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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-01743
The Alger Funds II
(Exact name of registrant as specified in charter)
360 Park Avenue South New York, New York 10010
(Address of principal executive offices) (Zip code)
Mr. Hal Liebes
Fred Alger Management, Inc.
360 Park Avenue South
New York, New York 10010
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-806-8800
Date of fiscal year end: October 31
Date of reporting period: April 30, 2018
ITEM 1. REPORT(S) TO STOCKHOLDERS.
Table of Contents
The Alger Funds II
Shareholders’ Letter | 1 |
Fund Highlights | 13 |
Portfolio Summary | 21 |
Schedules of Investments | 22 |
Statements of Assets and Liabilities | 50 |
Statements of Operations | 54 |
Statements of Changes in Net Assets | 58 |
Financial Highlights | 62 |
Notes to Financial Statements | 79 |
Additional Information | 106 |
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Shareholders’ Letter April 30, 2018
Dear Shareholders,
Corporations Generate Stellar Earnings but Emotions Spark Volatility
After a nearly one-and-a-half-year period during which the S&P 500 Index didn’t experience
a single monthly decline, concerns about potential inflation caused the index to tumble
11.84% in late January and early February. We believe investors may have subsequently
determined that the decline was excessive when considering the strength of corporate
fundamentals and the potential for additional economic growth. The market selloff was
therefore short-lived. The combination of strong performance leading up to the January
peak and the 4.56% market gain after the market pullback resulted in the S&P 500 Index
advancing 3.82% during the six-month reporting period ended April 30, 2018.
Not surprisingly, the market decline, which lasted less than two weeks, prompted pundits
to renew their predictions that the ongoing bull market was ending. As evidenced by the
positive performance of equities during the reporting period, the renewed predictions were
a continuation of pundits being consistently wrong since the end of the Great Recession
with negative views, driven by what we believe has been market noise. In this letter, we urge
investors to focus on the strength of corporate fundamentals and economic growth. These
factors, we believe, can potentially support equity gains in the foreseeable future. We explain
why equities still carry potential for generating attractive returns despite concerns that we
believe are misguided about the length of the current bull market, potential for inflation,
and fears that President Donald Trump’s proposed tariffs could hinder global trade.
Market Overview
News that wages were 2.9% higher in January of 2018 than in January of 2017 strengthened
fears of inflation and ushered in market volatility. Some investors may also have believed
that market gains, equity valuations, and optimism were excessive relative to corporate
fundamentals and the potential benefits of lower taxes resulting from tax reform. Despite
those concerns, anticipation of strong first-quarter earnings helped reverse the decline. The
recovery in equity prices was further supported by corporations eventually reporting strong
earnings growth. Non-U.S. equities followed a similar pattern with the MSCI Emerging
Markets Index gaining 4.94% and the MSCI ACWI ex USA Index advancing 3.73% for the
six-month reporting period.
As growth equity investors, we are encouraged by the continuation of the multiyear
outperformance of growth stocks. The Russell 1000 Growth Index led with a 5.68% return
compared to 1.94% of its value-oriented counterpart during the six-month reporting period.
Growth outperformance also occurred with mid- and small-cap stocks. At the same time,
rising interest rates caused investors to continue dumping bond-like equities in favor of
growth equities, as illustrated by the Consumer Discretionary and Information Technology
sectors’ outperformance of the overall S&P 500 Index. Sectors such as Real Estate, Utilities,
and Consumer Staples that generally consist of companies that offer higher dividend yields
but less potential for earnings growth lagged with negative returns. At Alger, we have
previously written about the potential for investors to rapidly flee bond-like equities in favor
of growth stocks, so this development was no surprise to our firm.
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The Importance of Earnings Growth and Innovation
At Alger, our in-depth research has led us to believe that corporate fundamentals are healthy
with businesses having strong potential for growing their earnings. Our research also points
to the economy being stronger than commonly believed and therefore highly supportive
of earnings growth. We have also maintained that earnings growth resulting from lower
corporate taxes could be stronger than commonly believed. While some observers have
focused on how tax reform has directly boosted earnings by cutting corporate expenses in
the form of taxes, we have also assessed the potential for businesses to use their tax savings
to increase their investments in growth initiatives. Tax reform is also supporting business
spending by allowing full expensing of capital expenditures. Banks’ increased willingness
to provide financing to corporations is an additional tailwind for business spending. This
increased spending, in turn, is providing opportunities for certain corporations to improve
their earnings by offering products and services that can help businesses grow and increase
productivity.
Our belief that corporate earnings would be stronger than expected was validated by first-
quarter results. As of the end of the six-month reporting period, 81% of S&P 500 companies
had reported first-quarter numbers. Of those, 78% reported positive earnings-per-share
(EPS) surprises and 77% reported positive sales surprises. At that pace, the percentage of
positive EPS surprises would be the highest since FactSet Research started tracking earnings
in the third quarter of 2008. Among companies that had reported, earnings grew 24.2%
compared to earlier estimates of 17.1%.
We believe that earnings growth drives long-term equity performance. On one hand,
companies with strong earnings can reward investors with stock buybacks and dividends.
Companies can also use profits to develop new and disruptive products and services that
can capture market share. Perhaps most importantly, earnings also support valuations.
Keeping the Economy in Perspective
Economists and investors frequently focus on monetary policy to gain insight into
economic cycles. Optimism often grows as the Federal Reserve cuts the fed funds rate and
pessimism spikes when the central bank begins tightening monetary policy. We agree that it
is important to understand the relationship of monetary tightening, the economy, and equity
performance, but in our view, Fed policy appears to be a long way from sparking a recession
or a bear market. Indeed, bull markets have traditionally persisted during fed rate increases
and recessions typically haven’t occurred until the real fed funds rate, which is the nominal
fed funds rate minus inflation, hits 2% or higher. With the real fed funds rate currently at
about 0% and the Federal Reserve expected to raise rates approximately 75 basis points a
year, we maintain that monetary policy is unlikely to kill the economic recovery or stifle the
equity market in the foreseeable future.1
We believe that bonds are a different matter. During periods of fed funds rate increases,
the 10-year Treasury bond has generated an average annual return of -2.7% compared to
the average annual return of 6.2% of the S&P 500 Index.2 We also believe that valuations
imply that earnings multiples may not suffer as rates rise, with the S&P 500 Index having
an EPS yield on April 30 that was approximately 328 bps higher than the yield of the 10-
year Treasury bond. While bonds are susceptible to monetary tightening, we believe the
economy is strong and can absorb the impact of fed rate increases.3
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Outlook
In past years, economic growth has been driven primarily by consumer spending, but
business spending, which is growing at a faster rate than the nation’s gross domestic product,
is now playing a more significant role. In our view, business spending is likely to increase
in the coming months and provide additional support to the U.S. economy while helping
corporations boost productivity and earnings. Other indicators, such as the Conference
Board’s Leading Economic Index (LEI), are encouraging. The LEI typically leads S&P 500
Index earnings by 6 to 18 months, so its record high reading of 109.4 in April suggests that
the bull market still has a long runway.
We acknowledge that over the long term, monetary tightening, rising labor costs, and tariffs
leading to a potential trade war could be a headwind for equities. We think the best way
to address those risks is to invest in highly innovative companies that can disrupt their
industries by creating new products and services. During the global financial crisis, for
example, U.S. e-commerce and internet advertising spending grew 33% while total U.S.
retail sales increased only 1%. At the same time, we are experiencing unprecedented levels
of innovation, with artificial intelligence, cloud computing, internet connectivity, genome
sequencing, and novel drug developments allowing leading companies to disrupt their
respective industries with new products and business models.
In closing, we urge investors to focus on corporate fundamentals rather than react hastily
to what we believe are short-sighted views of market pundits. As an active, research-driven
investor, we intend to continue seeking out innovative companies that can grow their
earnings and revenues.
Portfolio Matters
Alger Spectra Fund
The Alger Spectra Fund returned 6.47% for the fiscal six-month period ended April 30,
2018, compared to the 5.66% return of the Russell 3000 Growth Index.
During the reporting period, the largest sector weightings were Information Technology and
Consumer Discretionary. The largest sector overweight was Information Technology and
the largest underweight was Consumer Staples. For the reporting period, the Fund’s average
portfolio allocation to long positions, which was increased by leverage, was 101.66%. The
Fund had a 2.91% allocation to short positions and a 1.25% allocation to cash.
Contributors to Performance
The Consumer Discretionary and Health Care sectors provided the greatest contributions
to relative performance. Long positions also supported relative performance. Amazon.com,
Inc.; Microsoft Corp.; Visa, Inc., Cl. A; UnitedHealth Group Inc.; and Netflix, Inc. were top
contributors to performance.
Amazon is well known as a leading U.S. online retailer. Its shares contributed to performance
as Amazon has enjoyed strong high unit volume growth, in large part driven by the company
continuing to take market share from traditional brick and mortar retailers. Its leadership in
the sizable and expanding web hosting industry also supported the performance of Amazon
shares.
Short position Symantec Corp. also contributed to performance. The company provides
security products and solutions to protect businesses and individuals from advanced threats,
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malware, and other cyberattacks. We believe the company faces competitive threats from
cloud solutions that present businesses with better productivity and value propositions than
“on premises” offerings like Symantec’s. We believe the price of Symantec shares declined
in response to concerns over the company’s competitive disadvantage relative to cloud
vendors. This problem has become increasingly clear in the form of Symantec’s weakening
business fundamentals. Short selling entails selling borrowed stock with the goal of buying
the stock in the future at a lower price and then returning the security to the lender. As the
price of Symantec shares declined, the portfolio’s cost of purchasing the stock declined,
thereby supporting portfolio performance.
Detractors from Performance
The Industrials and Consumer Staples sectors were among sectors that detracted from
results. Short positions also detracted from results. Regarding individual long positions,
Broadcom, Inc.; Facebook, Inc., Cl. A; Newell Brands, Inc.; Equinix, Inc.; and Applied
Materials, Inc. were the top detractors from performance.
Facebook operates the world’s largest social network. Facebook continues to take advertising
market share from print, radio, and television media because the social network offers
brands a robust return on digital advertising spending. Investors have been excited by the
growth of both Instagram, which is Facebook’s video and picture sharing platform, and
WhatsApp, which is the company’s texting and voice over internet protocol service. Shares
of the company underperformed when some measures of Facebook consumer engagement
deteriorated, which suggested user fatigue may be occurring. Facebook also endured a
public relations crisis as management tried to contain media and customer fallout about a
data breach that led to reservations about the company’s privacy safeguards.
Short position CyberArk Software Ltd. also detracted from results. The company develops,
markets, and sells software-based security products for enterprises. It offers a shared
technology platform, account security, and technology for managing sensitive information.
We believe the company’s fundamentals are being challenged by intensifying competition
resulting from the industry transitioning to cloud-based business models. A reorganization
of the company’s sales team is also challenging CyberArk’s fundamentals. Shares of
CyberArk, however, performed strongly in response to the company experiencing growth
in demand for password protection, malware attack prevention, and continuous monitoring
services. As the share price increased, the short position detracted from performance.
Alger Responsible Investing Fund
The Alger Responsible Investing Fund returned 3.36% for the fiscal six-month period
ended April 30, 2018, compared to the 5.68% return of the Russell 1000 Growth Index.
Contributors to Performance
During the reporting period, the largest sector weightings were Information Technology and
Consumer Discretionary. The largest sector overweight was Information Technology and
the largest underweight was Consumer Staples. The Consumer Discretionary and Materials
sectors provided the largest contributions to relative performance.
Among individual positions, Amazon.com, Inc.; Microsoft Corp.; Visa, Inc., Cl. A; Cisco
Systems, Inc.; and Salesforce.com, Inc. were among the top contributors to performance.
Shares of Amazon outperformed in response to developments described in the Alger
Spectra Fund discussion.
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Detractors from Performance
The Industrials and Health Care sectors were among the sectors that detracted from results.
Regarding individual positions, Newell Brands, Inc.; Facebook, Inc., Cl. A; Bristol-Myers
Squibb Co.; The Procter & Gamble Co.; and Broadcom, Inc. were among the top detractors
from results. Shares of Facebook underperformed in response to developments described
in the Alger Spectra Fund discussion.
Alger Dynamic Opportunities Fund
The Alger Dynamic Opportunities Fund returned 1.34% for the fiscal six-month period
ended April 30, 2018, compared to the 3.82% return of the Fund’s benchmark, the S&P
500 Index.
The long/short equity Fund seeks long-term capital appreciation, downside protection, and
lower volatility by primarily investing in long and short exposures in U.S. equities. The Fund
seeks to generate market-like equity returns over a full U.S. market cycle. During shorter-
term periods, the Fund may underperform when U.S. equity markets generate strong gains,
perform in line or modestly outperform when markets are flat, and should outperform
when markets decline.
During the reporting period, the average allocation to long positions was 92.93% and the
average allocation to short positions was 28.44%. The Fund’s cash allocation was 35.51%.
Based on the combined allocations of long and short positions, Information Technology
and Health Care were the largest sector weightings for the reporting period. The Industrials
sector was the only sector overweighting while Financials was the largest underweighting.
Contributors to Performance
The Industrials and Consumer Discretionary sectors provided the largest contributions to
relative performance. Long positions, in aggregate, outperformed the Fund’s benchmark
and contributed to both absolute and relative performance. Among long positions, Insulet
Corp.; Chegg, Inc.; Amazon.com, Inc.; XPO Logistics, Inc.; and Canada Goose Holdings,
Inc. provided the largest contributions to performance. Shares of Amazon outperformed in
response to developments described in the Alger Spectra Fund discussion.
Short exposure on Sears Holdings Corp. also contributed to performance. Sears Holdings
operates Sears and Kmart stores. Its stock underperformed sharply in response to the
company experiencing an acceleration of declining same-store-sales and a continuation in
gross margin compression, which is a particularly worrisome combination for a retailer.
Even though the company has shuttered hundreds of struggling stores, it reported poor
results. After underinvesting in its stores for many years, it is in a weak position to compete
for consumers amid rising competition from e-commerce. As the price of Sears stock
declined, the short exposure increased in value and supported portfolio performance.
Detractors from Performance
The Health Care and Financials sectors were among the sectors that detracted from
results. In addition, short positions also detracted from results. Regarding individual long
positions, ACADIA Pharmaceuticals, Inc.; Trade Desk, Inc., Cl. A; WageWorks, Inc.;
Puma Biotechnology, Inc., and Portola Pharmaceuticals, Inc. were the top detractors from
performance. WageWorks is the leading provider and administrator of consumer-directed,
tax-advantaged benefit accounts that employers provide to employees. It offers its services
- 5 -
through its software-as-a-service (SaaS) platform. These accounts include health and
dependent care, commuter benefits, and other employee programs such as COBRA. Its
stock performance weakened in March after the company filed for an SEC extension for
releasing fourth-quarter results. In filing the extension, WageWorks said its auditor had not
yet completed the audit of its financial statements due primarily to issues such as “managing
change and assessing risk in the areas of non-routine complex transactions.” WageWorks
has announced that it is working diligently to file its results as soon as possible.
Short exposure on Snap, Inc., Cl. A also detracted from performance. Snap provides a
smartphone app called Snapchat that allows users to send and receive photos, texts and
videos. We believe the company has been facing challenges due to competition, questionable
return on investment for advertisers and the fickle nature of its young audience. Snap,
however, said fourth-quarter advertising revenues were better than expected and it posted
a smaller-than-expected loss in adjusted EBITDA, which caused shares of the company to
advance.
Alger Emerging Markets Fund
The Alger Emerging Markets Fund returned 1.39% for the fiscal six-month period ended
April 30, 2018, compared to the 4.93% return of its benchmark, the MSCI Emerging
Markets Index.
Contributors to Performance
During the reporting period, the largest portfolio sector weightings were Information
Technology and Financials. The largest sector overweight was Consumer Discretionary
and the largest sector underweight was Telecommunication Services. The Consumer
Discretionary and Health Care sectors provided the largest contributions to relative
performance. Stock selection resulted in Chile, Indonesia, and the United Arab Emirates
providing the largest contributions to relative performance. The Fund’s small allocation to
Hong Kong was also beneficial.
Tencent Holdings Ltd.; China Petroleum & Chemical Corp., Cl. H; Titan Industries Ltd.;
GeoPark Ltd.; and Sunny Friend Environmental Technology Co., Ltd. provided the greatest
contributions to performance. Tencent operates the largest Chinese online ecosystem with
over 980 million WeChat monthly active users. The users represent over one third of the
total time that individuals in mainland China spend online with mobile devices. Performance
of Tencent shares benefited late in 2017 from the company reporting that third-quarter
revenues increased 61.5% year over year and that gross margins were 48.6%. Tencent’s
self-developed mobile game “Honor of Kings” helped drive a 48% year-over-year increase
in online gambling, and online advertising contributed 17% to total revenue, having grown
48% year over year. Tencent has been gradually increasing advertising in WeChat.
Detractors from Performance
The Information Technology and Consumer Staples sectors were among the sectors that
detracted from results. From a country perspective, stock selection resulted in South Africa,
Russia, South Korea, and Taiwan being among countries that were the largest detractors
from performance.
Regarding individual holdings, Taiwan Semiconductor Manufacturing Co., Ltd.; Vakrangee
Ltd.; Silergy Corp.; Samsung Electronics Co., Ltd.; and X5 Retail Group N.V. were the top
detractors from results. Vakrangee owns or franchises more than 50,000 retail outlets that
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are viewed as last mile retail touchpoints across India’s far flung land mass, offering a wide
range of products and services. The company’s share price collapsed on the last day of
January following an article in the tabloid section of a Mumbai newspaper claiming that
Vakrangee was investigated by the Securities Exchange Board of India (SEBI) for alleged
share price and trading volume manipulation in 2016 and 2017. Vakrangee’s share price
declined even though the article reported that SEBI had closed the investigation without
finding any wrongdoing. Vakrangee’s senior management was in the U.S. visiting with
investors and insisted that the newspaper article was incorrect: SEBI had not contacted the
company. Vakrangee has a top corporate governance score from MSCI ESG Research and
has gone through extensive vetting with Amazon.
I thank you for putting your trust in Alger.
Sincerely,
Daniel C. Chung, CFA
Chief Investment Officer
Fred Alger Management, Inc.
_______________________________
1 Dan Chung and Brad Neuman, Capital Markets: Observations and Insights: Party Without the Punch? Fred Alger Management,
Spring 2018.
2 Ibid.
3 Ibid.
Investors cannot invest directly in an index. Index performance does not reflect the
deduction for fees, expenses, or taxes.
This report and the financial statements contained herein are submitted for the general
information of shareholders of the funds. This report is not authorized for distribution to
prospective investors in a fund unless preceded or accompanied by an effective prospectus
for the fund. Fund performance returns represent the six-month period return of Class
A shares prior to the deduction of any sales charges and include the reinvestment of any
dividends or distributions.
The performance data quoted 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
- 7 -
fund or otherwise, are considered in the context of the construction of an overall portfolio
of securities and therefore reference to them should not be construed as a recommendation
or offer to purchase or sell any such security. Inclusion of such securities in a fund and
transactions in such securities, if any, may be for a variety of reasons, including, without
limitation, in response to cash flows, inclusion in a benchmark, and risk control. The
reference to a specific security should also be understood in such context and not viewed as
a statement that the security is a significant holding in a fund. Please refer to the Schedule
of Investments for each fund which is included in this report for a complete list of fund
holdings as of April 30, 2018. 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.
Risk Disclosures
Alger Spectra Fund
Investing in the stock market involves gains and losses and may not be suitable for all
investors. The value of an investment may move up or down, sometimes rapidly and
unpredictably, and may be worth more or less than what you invested. Stocks tend to be more
volatile than other investments such as bonds. Growth stocks tend to be more volatile than
other stocks as the prices of growth stocks tend to be higher in relation to their companies’
earnings and may be more sensitive to market, political, and economic developments. The
market price of a security may increase after the Fund borrows the security and sells it short,
so that the Fund suffers a loss when it replaces the borrowed security at the higher price.
The use of short sales could increase the Fund’s exposure to the market, magnifying losses
and increasing volatility. The Fund may have a significant portion of its assets invested in
securities of companies conducting business in a related group of industries within a sector,
which may make the Fund more vulnerable to unfavorable developments in that sector
than a fund that has a more diversified portfolio. Many technology companies have limited
operating histories and prices of these companies’ securities have historically been more
volatile than other securities due to increased competition, government regulation, and risk
of obsolescence due to the progress of technological developments. Investing in companies
of all capitalizations involves the risk that smaller issuers may have limited product lines
or financial resources, lack management depth, or have more limited liquidity. The cost of
borrowing money to leverage may exceed the returns for the securities purchased or the
securities purchased may actually go down in value more quickly than if the Fund had not
borrowed.
Alger Responsible Investing Fund
Investing in the stock market involves gains and losses and may not be suitable for all
investors. The value of an investment may move up or down, sometimes rapidly and
unpredictably, and may be worth more or less than what you invested. Stocks tend to
be more volatile than other investments such as bonds. Growth stocks tend to be more
volatile than other stocks as the prices of growth stocks tend to be higher in relation to
their companies’ earnings and may be more sensitive to market, political, and economic
developments. The Fund’s environmental, social and governance investment criteria may
limit the number of investment opportunities available to the Fund, and as a result, at times
the Fund’s returns may be less than those of funds that are not subject to such special
investment considerations. Moreover, companies that promote positive environmental,
social and/or governance policies may not perform as well as companies that do not pursue
- 8 -
such goals. The Fund may have a significant portion of its assets invested in securities
of companies conducting business in a related group of industries within a sector, which
may make the Fund more vulnerable to unfavorable developments in that sector than
a fund that has a more diversified portfolio. Many technology companies have limited
operating histories and prices of these companies’ securities have historically been more
volatile than other securities due to increased competition, government regulation, and risk
of obsolescence due to the progress of technological developments. Investing in companies
of all capitalizations involves the risk that smaller issuers may have limited product lines
or financial resources, lack management depth, or have more limited liquidity. The cost of
borrowing money to leverage may exceed the returns for the securities purchased or the
securities purchased may actually go down in value more quickly than if the Fund had not
borrowed.
Alger Dynamic Opportunities Fund
Investing in the stock market involves gains and losses and may not be suitable for all
investors. The value of an investment may move up or down, sometimes rapidly and
unpredictably, and may be worth more or less than what you invested. The Fund’s large
cash position may underperform relative to both equity and fixed-income securities. Stocks
tend to be more volatile than other investments such as bonds. Growth stocks tend to
be more volatile than other stocks as the prices of growth stocks tend to be higher in
relation to their companies’ earnings and may be more sensitive to market, political, and
economic developments. The Fund may have a significant portion of its assets invested in
securities of companies conducting business in a related group of industries within a sector,
which may make the Fund more vulnerable to unfavorable developments in that sector
than a fund that has a more diversified portfolio. Many technology companies have limited
operating histories and prices of these companies’ securities have historically been more
volatile than other securities due to increased competition, government regulation, and risk
of obsolescence due to the progress of technological developments. Investing in companies
of all capitalizations involves the risk that smaller issuers may have limited product lines
or financial resources, lack management depth, or have more limited liquidity. Foreign
investing involves special risks including currency risk and risks related to political, social,
or economic conditions. Issuers of convertible securities may not be as strong financially
as other companies, and may be more vulnerable to changes in the economy. The price of
an option selected as a hedge may not correlate precisely with movements of the Fund’s
portfolio securities. The Fund may lose money and be forced to liquidate portfolio securities
to meet settlement obligations on option positions. The market price of a security may
increase after the Fund borrows the security and sells it short, so that the Fund suffers a
loss when it replaces the borrowed security at the higher price. The use of short sales could
increase the Fund’s exposure to the market, magnifying losses and increasing volatility. The
Fund is a non-diversified investment company. Therefore, the Fund’s performance may be
more vulnerable to changes in the market value of a single issuer and more susceptible to
risks associated with a single economic, political, or regulatory occurrence than a fund that
has a diversified portfolio. The cost of borrowing money to leverage may exceed the returns
for the securities purchased or the securities purchased may actually go down in value more
quickly than if the Fund had not borrowed. Active trading of portfolio securities may incur
increased transaction costs and brokerage commissions, and potentially increase taxes that a
shareholder may pay, which can lower the actual return on an investment.
- 9 -
Alger Emerging Markets Fund
Investing in the stock market involves gains and losses and may not be suitable for all
investors. The value of an investment may move up or down, sometimes rapidly and
unpredictably, and may be worth more or less than what you invested. Stocks tend to
be more volatile than other investments such as bonds. Growth stocks tend to be more
volatile than other stocks as the prices of growth stocks tend to be higher in relation to
their companies’ earnings and may be more sensitive to market, political, and economic
developments. Investing in companies of all capitalizations involves the risk that smaller
issuers may have limited product lines or financial resources, lack management depth, or
have more limited liquidity. Special risks associated with investments in emerging country
issuers include exposure to currency fluctuations, less liquidity, less developed or less
efficient trading markets, lack of comprehensive company information, political instability
and differing auditing and legal standards, and securities of such issuers can be more volatile
than those of more mature economies. The cost of borrowing money to leverage may
exceed the returns for the securities purchased or the securities purchased may actually go
down in value more quickly than if the Fund had not borrowed.
For a more detailed discussion of the risks associated with a fund, please see the Prospectus.
Before investing, carefully consider a fund’s investment objective, risks, charges,
and expenses.
For a prospectus or a summary prospectus containing this and other information
about the Alger Funds II 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.
- 10 -
Definitions:
• S&P 500 Index: An index of large company stocks considered representative
of the U.S. stock market.
• Conference Board’s Leading Economic Index: An index based on a variety
of economic data and is part of the Conference Board’s analytic system that
seeks to signal peaks and troughs in the business cycle.
• Morgan Stanley Capital International (MSCI) All Country World Index
(ACWI) ex USA: An unmanaged, market capitalization-weighted index de-
signed to provide a broad measure of equity market performance throughout
the world, including both developing and emerging markets, but excluding
the United States.
• MSCI Emerging Markets Index: A free float-adjusted market capitalization
index designed to measure equity market performance in the global emerging
markets.
• Russell 3000 Growth Index: An index of common stocks designed to track
performance of companies with greater than average growth orientation in
general.
• Russell 1000 Growth Index: An index of common stocks designed to track
performance of large-capitalization companies with greater than average
growth orientation.
• FactSet Research Systems: A firm that provides data and research for invest-
ment managers, hedge funds investment bankers and other financial profes-
sionals.
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FUND PERFORMANCE AS OF 3/31/18 (Unaudited) | ||||||
AVERAGE ANNUAL TOTAL RETURNS | ||||||
1 YEAR | 5 YEARS | 10 YEARS | ||||
Alger Spectra Class A (Inception 7/28/69) | 14.93 | % | 13.70 | % | 11.69 | % |
Alger Spectra Class C (Inception 9/24/08)* | 19.48 | % | 14.08 | % | 11.49 | % |
Alger Spectra Class I (Inception 9/24/08)† | 21.47 | % | 14.97 | % | 12.39 | % |
1 YEAR | 5 YEARS | Since 12/29/2010 | ||||
Alger Spectra Class Z (Inception 12/29/10) | 21.78 | % | 15.30 | % | 14.27 | % |
* Historical performance prior to September 24, 2008, inception of the class, is that of the Fund’s Class A shares, adjusted to
reflect the current maximum sales charge and the higher operating expenses of Class C shares.
† Historical performance prior to September 24, 2008, inception of the class, is that of the Fund’s Class A shares, which has been
adjusted to remove the front-end sales charge imposed by Class A shares.
Alger Responsible Investing Fund Class A shares performance figures prior to January 12,
2007, are those of the Alger Green Institutional Fund and performance prior to October 19,
2006, represents the performance of the Alger Socially Responsible Growth Institutional
Fund Class I, the predecessor fund to the Alger Green Institutional Fund. The predecessor
fund followed different investment strategies and had a different portfolio manager. As of
January 12, 2007, the Alger Green Institutional Fund became the Alger Green Fund. As of
December 30, 2016 the Alger Green Fund became the Alger Responsible Investing Fund.
FUND PERFORMANCE AS OF 3/31/18 (Unaudited) | ||||||||
AVERAGE ANNUAL TOTAL RETURNS | ||||||||
1 | 5 | 10 | SINCE | |||||
YEAR | YEARS | YEARS | INCEPTION | |||||
Alger Responsible Investing Class A (Inception 12/4/00) | 11.96 | % | 10.53 | % | 6.69 | % | 3.01 | % |
Alger Responsible Investing Class C (Inception 9/24/08)* | 16.21 | % | 10.86 | % | n/a | 8.43 | % | |
Alger Responsible Investing Class I (Inception 9/24/08)† | 18.09 | % | 11.74 | % | n/a | 9.27 | % | |
Alger Responsible Investing Class Z (Inception 10/14/16) | 18.67 | % | n/a | n/a | 21.56 | % | ||
Alger Dynamic Opportunities Class A (Inception 11/2/09) | 6.87 | % | 5.81 | % | n/a | 5.68 | % | |
Alger Dynamic Opportunities Class C (Inception 12/29/10)‡ | 10.98 | % | 6.13 | % | n/a | 5.55 | % | |
Alger Dynamic Opportunities Class Z (Inception 12/29/10) | 13.21 | % | 7.26 | % | n/a | 6.35 | % | |
Alger Emerging Markets Class A (Inception 12/29/10) | 18.25 | % | 4.40 | % | n/a | 1.90 | % | |
Alger Emerging Markets Class C (Inception 12/29/10) | 22.87 | % | 4.74 | % | n/a | 1.83 | % | |
Alger Emerging Markets Class I (Inception 12/29/10) | 24.89 | % | 5.53 | % | n/a | 2.58 | % | |
Alger Emerging Markets Class Y (Inception 5/9/16) | 25.45 | % | n/a | n/a | 23.93 | % | ||
Alger Emerging Markets Class Y-2 (Inception 5/9/16) | 25.56 | % | n/a | n/a | 23.98 | % | ||
Alger Emerging Markets Class Z (Inception 2/28/14) | 25.32 | % | n/a | n/a | 6.60 | % |
* Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to September
24, 2008, inception of the class, is that of the Fund’s Class A shares, reduced to reflect the current maximum sales charge and
the higher operating expenses of Class C shares.
† Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to September
24, 2008, inception of the class, is that of the Fund’s Class A shares, which has been adjusted to remove the front-end sales
charge imposed by Class A shares.
‡ Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to December 29,
2010, inception of the class, is that of the Fund’s Class A shares, reduced to reflect the current maximum sales charge and the
higher operating expenses of Class C shares.
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.
- 12 -
ALGER SPECTRA FUND
Fund Highlights Through April 30, 2018 (Unaudited)
The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger
Spectra Fund Class A shares, with an initial 5.25% maximum sales charge, and the Russell 3000 Growth Index
(an unmanaged index of common stocks) for the ten years ended April 30, 2018. The figures for the Alger
Spectra Fund Class A and the Russell 3000 Growth Index include reinvestment of dividends and capital gains.
Performance for the Alger Spectra Fund Class C, Class I and Class Z shares will vary from the results shown
above due to the operating expenses and the current maximum sales charge of each share class. Investors
cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.
- 13 -
ALGER SPECTRA FUND
Fund Highlights Through April 30, 2018 (Unaudited) (Continued)
PERFORMANCE COMPARISON AS OF 04/30/18 | ||||||||
AVERAGE ANNUAL TOTAL RETURNS | ||||||||
Since | ||||||||
1 YEAR | 5 YEARS | 10 YEARS | 12/31/1974 | |||||
Class A (Inception 7/28/69) | 13.98 | % | 13.95 | % | 11.17 | % | 15.73 | % |
Class C (Inception 9/24/08)* | 18.43 | % | 14.32 | % | 10.96 | % | 15.01 | % |
Class I (Inception 9/24/08)† | 20.37 | % | 15.22 | % | 11.85 | % | 15.89 | % |
Russell 3000 Growth Index | 18.78 | % | 14.97 | % | 10.78 | % | n/a |
Since | |||||||
1 YEAR | 5 YEARS | 10 YEARS | 12/29/2010 | ||||
Class Z (Inception 12/29/10) | 20.74 | % | 15.55 | % | n/a | 14.35 | % |
Russell 3000 Growth Index | 18.78 | % | 14.97 | % | n/a | 14.13 | % |
The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average
annual total returns include changes in share price and reinvestment of dividends and capital gains. Class A returns reflect the maximum
initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. Class A, C, and I historical performance
is calculated from December 31, 1974, the first full calendar year that Fred Alger Management, Inc. was the Fund's investment adviser.
The Fund operated as a closed-end fund from August 23, 1978 to February 12, 1996, during which time the calculation of total return
assumed dividends were reinvested at market value. Had dividends not been reinvested, performance would have been lower. The chart
and table above do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of
Fund shares. Investment return and principal will fluctuate and the Fund’s shares, when redeemed, may be worth more or less than their
original cost. Current performance may be higher or lower than the performance quoted. For updated performance, visit us at www.alger.
com or call us at (800) 992-3863.
* Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to September
24, 2008, inception of the class, is that of the Fund's Class A shares, reduced to reflect the current maximum sales charge
and the higher operating expenses of Class C shares.
† Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to September
24, 2008, inception of the class, is that of the Fund's Class A shares, which has been adjusted to remove the front-end sales
charge imposed by Class A shares.
- 14 -
ALGER RESPONSIBLE INVESTING FUND
Fund Highlights Through April 30, 2018 (Unaudited)
The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Responsible
Investing Fund Class A shares, with an initial 5.25% maximum sales charge, and the Russell 1000 Growth Index
(an unmanaged index of common stocks) for the ten years ended April 30, 2018. Prior to December 30, 2016, the
Fund followed different investment strategies under the name “Alger Green Fund” and was managed by a different
portfolio manager. Accordingly, performance prior to that date does not reflect the Fund’s current investment
strategies and investment personnel. Prior to December 30, 2016, the Fund compared its performance to the Russell
3000 Growth Index. After December 30, 2016, the Fund will compare its performance to the Russell 1000 Growth
Index to better reflect its investment strategies. The figures for the Alger Responsible Investing Fund Class A and
the Russell 1000 Growth Index include reinvestment of dividends and capital gains. Performance for the Alger
Responsible Investing Fund Class C, Class I and Class Z shares will vary from the results shown above due to the
operating expenses and the current maximum sales charge of each share class. Investors cannot invest directly in any
index. Index performance does not reflect deduction for fees, expenses, or taxes.
- 15 -
ALGER RESPONSIBLE INVESTING FUND
Fund Highlights Through April 30, 2018 (Unaudited) (Continued)
PERFORMANCE COMPARISON AS OF 04/30/18 | ||||||||
AVERAGE ANNUAL TOTAL RETURNS | ||||||||
Since | ||||||||
1 YEAR | 5 YEARS | 10 YEARS | 12/4/2000 | |||||
Class A (Inception 12/4/00) | 9.45 | % | 10.08 | % | 6.14 | % | 3.01 | % |
Russell 1000 Growth Index | 18.96 | % | 15.13 | % | 10.81 | % | 5.58 | % |
Since | |||||||
1 YEAR | 5 YEARS | 10 YEARS | 9/24/2008 | ||||
Class C (Inception 9/24/08) | 13.62 | % | 10.40 | % | n/a | 8.37 | % |
Class I (Inception 9/24/08) | 15.63 | % | 11.30 | % | n/a | 9.22 | % |
Russell 1000 Growth Index | 18.96 | % | 15.13 | % | n/a | 12.95 | % |
Since | ||||||
1 YEAR | 5 YEARS | 10 YEARS | 10/14/2016 | |||
Class Z (Inception 10/14/16) | 16.09 | % | n/a | n/a | 20.52 | % |
Russell 1000 Growth Index | 18.96 | % | n/a | n/a | 22.31 | % |
The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average
annual total returns include changes in share price and reinvestment of dividends and capital gains. Class A returns reflect the maximum
initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. Performance figures prior to January 12,
2007, are those of the Alger Green Institutional Fund and performance prior to October 19, 2006, represents the performance of
the Alger Socially Responsible Growth Institutional Fund Class I, the predecessor fund to the Alger Green Institutional Fund. The
predecessor fund followed different investment strategies and had a different portfolio manager. As of January 12, 2007, the Alger Green
Institutional Fund became the Alger Green Fund. The chart and table above do not reflect the deduction of taxes that a shareholder
would have paid on Fund distributions or on the redemption of Fund shares. Investment return and principal will fluctuate and the
Fund’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the
performance quoted. For updated performance, visit us at www.alger.com or call us at (800) 992-3863.
- 16 -
ALGER DYNAMIC OPPORTUNITIES FUND
Fund Highlights Through April 30, 2018 (Unaudited)
The chart above illustrates the change in value of a hypothetical $10,000 investment made in Alger Dynamic
Opportunities Fund Class A shares, with an initial 5.25% maximum sales charge, and the S&P 500 Index and the
HFRI Equity Hedge (Total) Index (an both unmanaged indices of common stocks) from November 2, 2009, the
inception date of the Alger Dynamic Opportunities Fund Class A, through April 30, 2018. Effective March 1, 2017,
Weatherbie Capital, LLC, a wholly-owned subsidiary of Alger Associates, Inc., the parent company of Fred Alger
Management, Inc., began providing investment management for a portion of the assets of the Alger Dynamic
Opportunities Fund. The figures for the Alger Dynamic Opportunities Fund Class A and the S&P 500 Index and the
HFRI Equity Hedge (Total) Index include reinvestment of dividends and capital gains. Performance for the Alger
Dynamic Opportunities Fund Class C and Class Z shares will vary from the results shown above due to the operating
expenses and the current maximum sales charge of each share class. Investors cannot invest directly in any index.
Index performance does not reflect deduction for fees, expenses, or taxes.
- 17 -
ALGER DYNAMIC OPPORTUNITIES FUND
Fund Highlights Through April 30, 2018 (Unaudited) (Continued)
PERFORMANCE COMPARISON AS OF 04/30/18 | |||||||
AVERAGE ANNUAL TOTAL RETURNS | |||||||
Since | |||||||
1 YEAR | 5 YEARS | 10 YEARS | 11/2/2009 | ||||
Class A (Inception 11/2/09) | 6.24 | % | 5.89 | % | n/a | 5.69 | % |
Class C (Inception 12/29/10)* | 10.22 | % | 6.22 | % | n/a | 5.54 | % |
S&P 500 Index | 13.27 | % | 12.96 | % | n/a | 13.96 | % |
HFRI Equity Hedge (Total) Index | 9.14 | % | 5.67 | % | n/a | 5.40 | % |
Since | |||||||
1 YEAR | 5 YEARS | 10 YEARS | 12/29/2010 | ||||
Class Z (Inception 12/29/10) | 12.48 | % | 7.35 | % | n/a | 6.35 | % |
S&P 500 Index | 13.27 | % | 12.96 | % | n/a | 13.01 | % |
HFRI Equity Hedge (Total) Index | 9.14 | % | 5.67 | % | n/a | 4.34 | % |
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. Class A returns reflect the maximum
initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. The chart and table above do not reflect the
deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Investment return
and principal will fluctuate and the Fund’s shares, when redeemed, may be worth more or less than their original cost. Current performance
may be higher or lower than the performance quoted. For updated performance, visit us at www.alger.com or call us at (800) 992-3863.
* Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to
December 29, 2010, inception of the class, is that of the Fund’s Class A shares, reduced to reflect the current maximum
sales charge and the higher operating expenses of Class C shares.
- 18 -
ALGER EMERGING MARKETS FUND
Fund Highlights Through April 30, 2018 (Unaudited)
The chart above illustrates the change in value of a hypothetical $10,000 investment made in Alger Emerging
Markets Fund Class A shares, with an initial 5.25% maximum sales charge, and the MSCI Emerging Markets Index
(an unmanaged index of common stocks) from December 29, 2010, the inception date of the Alger Emerging
Markets Fund Class A, through April 30, 2018. The figures for the Alger Emerging Markets Fund Class A and the
MSCI Emerging Markets Index include reinvestment of dividends and capital gains. Performance for the Alger
Emerging Markets Fund Class C, Class I, Class Y, Class Y-2 and Class Z shares will vary from the results shown
above due to differences in expense and sales charges those classes bear. Investors cannot invest directly in any index.
Index performance does not reflect deduction for fees, expenses, or taxes.
- 19 -
ALGER EMERGING MARKETS FUND
Fund Highlights Through April 30, 2018 (Unaudited) (Continued)
PERFORMANCE COMPARISON AS OF 04/30/18 | |||||||
AVERAGE ANNUAL TOTAL RETURNS | |||||||
Since | |||||||
1 YEAR | 5 YEARS | 10 YEARS | 12/29/2010 | ||||
Class A (Inception 12/29/10) | 11.46 | % | 3.28 | % | n/a | 1.37 | % |
Class C (Inception 12/29/10) | 15.80 | % | 3.60 | % | n/a | 1.29 | % |
Class I (Inception 12/29/10) | 17.65 | % | 4.37 | % | n/a | 2.04 | % |
MSCI Emerging Markets Index | 22.14 | % | 5.11 | % | n/a | 3.11 | % |
Since | ||||||
1 YEAR | 5 YEARS | 10 YEARS | 5/9/2016 | |||
Class Y (Inception 5/9/16) | 18.24 | % | n/a | n/a | 20.59 | % |
Class Y-2 (Inception 5/9/16) | 18.32 | % | n/a | n/a | 20.63 | % |
MSCI Emerging Markets Index | 22.14 | % | n/a | n/a | 24.07 | % |
Since | ||||||
1 YEAR | 5 YEARS | 10 YEARS | 2/28/2014 | |||
Class Z (Inception 2/28/14) | 18.14 | % | n/a | n/a | 5.55 | % |
MSCI Emerging Markets Index | 22.14 | % | n/a | n/a | 7.43 | % |
The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average
annual total returns include changes in share price and reinvestment of dividends and capital gains. Class A returns reflect the maximum
initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. The chart and table above do not reflect the
deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Investment return
and principal will fluctuate and the Fund’s shares, when redeemed, may be worth more or less than their original cost. Current performance
may be higher or lower than the performance quoted. For updated performance, visit us at www.alger.com or call us at (800) 992-3863.
- 20 -
PORTFOLIO SUMMARY†
April 30, 2018 (Unaudited)
Alger Responsible | Alger Dynamic | ||||||||
SECTORS | Alger Spectra Fund* | Investing Fund | Opportunities Fund* | ||||||
Consumer Discretionary | 16.3 | % | 18.4 | % | 6.6 | % | |||
Consumer Staples | 0.8 | 2.9 | (0.4 | ) | |||||
Energy | 1.1 | 0.8 | 1.7 | ||||||
Financials | 6.5 | 5.4 | 1.6 | ||||||
Health Care | 14.1 | 13.3 | 15.9 | ||||||
Industrials | 7.8 | 12.6 | 10.3 | ||||||
Information Technology | 42.7 | 41.5 | 30.0 | ||||||
Market Indices | 0.0 | 0.0 | (1.7 | ) | |||||
Materials | 3.0 | 0.8 | 0.1 | ||||||
Miscellaneous | 0.0 | 0.0 | (0.7 | ) | |||||
Real Estate | 2.2 | 2.3 | 1.0 | ||||||
Telecommunication Services | 0.5 | 0.0 | 0.0 | ||||||
Utilities | 0.0 | 0.0 | (0.2 | ) | |||||
Short-Term Investments and | |||||||||
Net Other Assets | 5.0 | 2.0 | 35.8 | ||||||
100.0 | % | 100.0 | % | 100.0 | % |
Alger Emerging Markets | |||
COUNTRY | Fund | ||
Argentina | 1.2 | % | |
Brazil | 7.5 | ||
Chile | 1.1 | ||
China | 29.7 | ||
Greece | 0.5 | ||
Hong Kong | 1.1 | ||
Hungary | 0.8 | ||
India | 9.4 | ||
Indonesia | 1.9 | ||
Malaysia | 1.7 | ||
Mexico | 2.5 | ||
Peru | 0.8 | ||
Philippines | 1.0 | ||
Poland | 0.6 | ||
Russia | 2.7 | ||
South Africa | 6.6 | ||
South Korea | 13.4 | ||
Taiwan | 10.6 | ||
Thailand | 1.5 | ||
Turkey | 0.6 | ||
United Arab Emirates | 1.6 | ||
Cash and Net Other Assets | 3.2 | ||
100.0 | % |
* Includes short sales as a reduction of sector exposure.
† Based on net assets for each Fund.
- 21 -
THE ALGER FUNDS II | ALGER SPECTRA FUND
Schedule of Investments April 30, 2018 (Unaudited)
COMMON STOCKS—94.6% | SHARES | VALUE | ||
AEROSPACE & DEFENSE—2.2% | ||||
General Dynamics Corp. | 88,195 | $ | 17,754,535 | |
The Boeing Co. | 253,659 | 84,610,496 | ||
United Technologies Corp. | 254,526 | 30,581,299 | ||
132,946,330 | ||||
AIR FREIGHT & LOGISTICS—0.4% | ||||
XPO Logistics, Inc. * | 232,919 | 22,630,410 | ||
ALTERNATIVE CARRIERS—0.5% | ||||
Zayo Group Holdings, Inc. * | 859,876 | 31,213,499 | ||
APPAREL ACCESSORIES & LUXURY GOODS—0.7% | ||||
adidas AG | 42,654 | 10,483,920 | ||
PVH Corp. | 213,847 | 34,144,950 | ||
44,628,870 | ||||
APPLICATION SOFTWARE—6.0% | ||||
Adobe Systems, Inc. * | 381,348 | 84,506,717 | ||
Autodesk, Inc. * | 573,173 | 72,162,480 | ||
salesforce. com, Inc. * | 1,694,315 | 204,995,172 | ||
361,664,369 | ||||
ASSET MANAGEMENT & CUSTODY BANKS—0.2% | ||||
BlackRock, Inc. , Cl. A | 22,572 | 11,771,298 | ||
WisdomTree Investments, Inc. | 180,127 | 1,903,942 | ||
13,675,240 | ||||
AUTO PARTS & EQUIPMENT—0.3% | ||||
Aptiv PLC. | 203,486 | 17,210,846 | ||
BIOTECHNOLOGY—3.7% | ||||
AbbVie, Inc. | 466,062 | 44,998,286 | ||
BioMarin Pharmaceutical, Inc. * | 227,583 | 19,005,456 | ||
Bluebird Bio, Inc. * | 28,669 | 4,878,030 | ||
Celgene Corp. *,+ | 187,167 | 16,302,246 | ||
Exact Sciences Corp. * | 376,479 | 18,827,715 | ||
Sarepta Therapeutics, Inc. * | 439,887 | 33,589,771 | ||
Vertex Pharmaceuticals, Inc. *,+ | 547,821 | 83,904,265 | ||
221,505,769 | ||||
CABLE & SATELLITE—0.6% | ||||
Charter Communications, Inc. , Cl. A* | 44,891 | 12,178,479 | ||
Comcast Corp. , Cl. A | 766,571 | 24,062,664 | ||
36,241,143 | ||||
COMMUNICATIONS EQUIPMENT—0.6% | ||||
Cisco Systems, Inc. | 230,151 | 10,193,388 | ||
Palo Alto Networks, Inc. * | 117,559 | 22,631,283 | ||
32,824,671 | ||||
CONSTRUCTION MACHINERY & HEAVY TRUCKS—0.3% | ||||
Caterpillar, Inc. | 123,827 | 17,875,666 | ||
CONSTRUCTION MATERIALS—1.1% | ||||
Vulcan Materials Co. | 571,013 | 63,776,442 |
- 22 -
THE ALGER FUNDS II | ALGER SPECTRA FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—94.6% (CONT. ) | SHARES | VALUE | ||
DATA PROCESSING & OUTSOURCED SERVICES—5.1% | ||||
Alliance Data Systems Corp. | 51,909 | $ | 10,540,123 | |
Visa, Inc. , Cl. A+ | 2,331,456 | 295,815,137 | ||
306,355,260 | ||||
DIVERSIFIED BANKS—2.2% | ||||
Bank of America Corp. | 3,164,815 | 94,691,265 | ||
Citigroup, Inc. | 192,366 | 13,132,827 | ||
JPMorgan Chase & Co. | 246,203 | 26,781,962 | ||
134,606,054 | ||||
DIVERSIFIED CHEMICALS—0.4% | ||||
DowDuPont, Inc. | 339,468 | 21,467,956 | ||
DIVERSIFIED SUPPORT SERVICES—0.5% | ||||
Cintas Corp. | 178,229 | 30,352,399 | ||
FINANCIAL EXCHANGES & DATA—2.7% | ||||
Intercontinental Exchange, Inc. | 1,399,479 | 101,406,248 | ||
S&P Global, Inc. | 336,160 | 63,399,776 | ||
164,806,024 | ||||
HEALTH CARE EQUIPMENT—5.0% | ||||
ABIOMED, Inc. * | 33,130 | 9,970,473 | ||
Boston Scientific Corp. * | 1,764,921 | 50,688,531 | ||
Danaher Corp. | 804,881 | 80,745,662 | ||
DexCom, Inc. * | 413,543 | 30,263,077 | ||
Insulet Corp. * | 281,299 | 24,191,714 | ||
Intuitive Surgical, Inc. * | 50,347 | 22,191,951 | ||
Medtronic PLC. | 473,037 | 37,904,455 | ||
Zimmer Biomet Holdings, Inc. | 393,508 | 45,320,316 | ||
301,276,179 | ||||
HOME ENTERTAINMENT SOFTWARE—0.4% | ||||
Electronic Arts, Inc. * | 201,974 | 23,828,892 | ||
HOME IMPROVEMENT RETAIL—2.5% | ||||
The Home Depot, Inc.+ | 825,026 | 152,464,805 | ||
HOTELS RESORTS & CRUISE LINES—0.8% | ||||
Carnival Corp. | 301,179 | 18,992,348 | ||
Norwegian Cruise Line Holdings Ltd. * | 543,528 | 29,062,442 | ||
48,054,790 | ||||
HYPERMARKETS & SUPER CENTERS—0.2% | ||||
Walmart, Inc. | 126,317 | 11,174,002 | ||
INDUSTRIAL CONGLOMERATES—2.3% | ||||
Honeywell International, Inc.+ | 944,890 | 136,706,685 | ||
INDUSTRIAL GASES—1.0% | ||||
Air Products & Chemicals, Inc. | 360,261 | 58,466,758 | ||
INDUSTRIAL MACHINERY—0.9% | ||||
Stanley Black & Decker, Inc. | 397,456 | 56,275,795 | ||
INTERNET & DIRECT MARKETING RETAIL—10.3% | ||||
Amazon. com, Inc. *,+ | 352,841 | 552,594,875 | ||
Booking Holdings, Inc. * | 7,990 | 17,402,220 |
- 23 -
THE ALGER FUNDS II | ALGER SPECTRA FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—94.6% (CONT. ) | SHARES | VALUE | ||
INTERNET & DIRECT MARKETING RETAIL—10.3% (CONT. ) | ||||
Netflix, Inc. * | 144,341 | $ | 45,100,789 | |
Wayfair, Inc. , Cl. A* | 47,318 | 2,947,912 | ||
618,045,796 | ||||
INTERNET SOFTWARE & SERVICES—12.3% | ||||
Alibaba Group Holding Ltd. #,* | 660,172 | 117,867,109 | ||
Alphabet, Inc. , Cl. C*,+ | 257,312 | 261,771,217 | ||
Altaba, Inc. * | 1,138,250 | 79,768,560 | ||
Facebook, Inc. , Cl. A*,+ | 1,578,026 | 271,420,472 | ||
Palantir Technologies, Inc. , Cl. A*,@,(a) | 348,292 | 2,002,679 | ||
Tencent Holdings Ltd. | 62,685 | 3,081,778 | ||
735,911,815 | ||||
INVESTMENT BANKING & BROKERAGE—0.7% | ||||
Morgan Stanley | 760,298 | 39,246,583 | ||
IT CONSULTING & OTHER SERVICES—0.7% | ||||
Cognizant Technology Solutions Corp. , Cl. A | 290,842 | 23,796,692 | ||
EPAM Systems, Inc. * | 158,214 | 18,091,771 | ||
41,888,463 | ||||
LEISURE FACILITIES—0.7% | ||||
Vail Resorts, Inc. | 170,805 | 39,167,295 | ||
LIFE SCIENCES TOOLS & SERVICES—0.9% | ||||
Illumina, Inc. * | 160,902 | 38,766,119 | ||
Thermo Fisher Scientific, Inc. | 70,732 | 14,878,476 | ||
53,644,595 | ||||
MANAGED HEALTH CARE—3.8% | ||||
UnitedHealth Group, Inc. | 969,848 | 229,272,067 | ||
OIL & GAS EQUIPMENT & SERVICES—0.4% | ||||
Halliburton Co. | 447,210 | 23,697,658 | ||
OIL & GAS EXPLORATION & PRODUCTION—0.7% | ||||
Pioneer Natural Resources Co. | 203,244 | 40,963,828 | ||
PAPER PACKAGING—0.1% | ||||
International Paper Co. | 131,467 | 6,778,438 | ||
PHARMACEUTICALS—0.6% | ||||
Allergan PLC. | 71,593 | 11,000,265 | ||
Bristol-Myers Squibb Co. | 267,588 | 13,949,362 | ||
GW Pharmaceuticals PLC. #,* | 90,574 | 12,038,190 | ||
36,987,817 | ||||
PROPERTY & CASUALTY INSURANCE—0.3% | ||||
The Progressive Corp. | 255,340 | 15,394,449 | ||
RAILROADS—1.4% | ||||
Union Pacific Corp. | 623,663 | 83,340,087 | ||
RESTAURANTS—0.8% | ||||
McDonald's Corp. | 296,302 | 49,612,807 | ||
SEMICONDUCTOR EQUIPMENT—1.5% | ||||
Applied Materials, Inc. | 1,503,889 | 74,698,167 |
- 24 -
THE ALGER FUNDS II | ALGER SPECTRA FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—94.6% (CONT. ) | SHARES | VALUE | ||
SEMICONDUCTOR EQUIPMENT—1.5% (CONT. ) | ||||
Lam Research Corp. | 90,304 | $ | 16,711,658 | |
91,409,825 | ||||
SEMICONDUCTORS—4.0% | ||||
Broadcom, Inc. | 569,155 | 130,575,540 | ||
Cavium, Inc. * | 186,287 | 13,973,388 | ||
Marvell Technology Group Ltd. | 551,672 | 11,066,540 | ||
Microchip Technology, Inc. | 319,119 | 26,697,496 | ||
Micron Technology, Inc. * | 418,647 | 19,249,389 | ||
NVIDIA Corp. | 176,278 | 39,644,922 | ||
241,207,275 | ||||
SPECIALTY CHEMICALS—0.6% | ||||
The Sherwin-Williams Co. | 101,296 | 37,242,487 | ||
SYSTEMS SOFTWARE—10.2% | ||||
Microsoft Corp.+ | 5,145,326 | 481,190,888 | ||
Red Hat, Inc. * | 597,873 | 97,489,171 | ||
ServiceNow, Inc. * | 117,334 | 19,493,871 | ||
Smartsheet, Inc. , Cl. A * | 48,396 | 934,043 | ||
VMware, Inc. , Cl. A* | 96,439 | 12,851,461 | ||
611,959,434 | ||||
TECHNOLOGY HARDWARE STORAGE & PERIPHERALS—3.3% | ||||
Apple, Inc.+ | 1,188,772 | 196,456,461 | ||
TOBACCO—0.6% | ||||
Philip Morris International, Inc. | 469,786 | 38,522,452 | ||
TRADING COMPANIES & DISTRIBUTORS—0.1% | ||||
United Rentals, Inc. * | 52,803 | 7,920,450 | ||
TOTAL COMMON STOCKS | ||||
(Cost $4,112,422,090) | 5,680,698,936 | |||
PREFERRED STOCKS—0.4% | SHARES | VALUE | ||
BIOTECHNOLOGY—0.1% | ||||
Prosetta Biosciences, Inc. , Series D*,@,(a),(b) | 2,912,012 | 8,736,036 | ||
INTERNET SOFTWARE & SERVICES—0.2% | ||||
Palantir Technologies, Inc. , Cl. B*,@,(a) | 1,420,438 | 8,167,518 | ||
Palantir Technologies, Inc. , Cl. D*,@,(a) | 185,062 | 1,064,107 | ||
9,231,625 | ||||
PHARMACEUTICALS—0.1% | ||||
Intarcia Therapeutics, Inc. , Series DD*,@,(a) | 171,099 | 4,587,164 | ||
TOTAL PREFERRED STOCKS | ||||
(Cost $29,247,649) | 22,554,825 | |||
MASTER LIMITED PARTNERSHIP—0.5% | SHARES | VALUE | ||
ASSET MANAGEMENT & CUSTODY BANKS—0.5% | ||||
The Blackstone Group LP. | 989,758 | 30,633,010 | ||
(Cost $27,457,400) | 30,633,010 |
- 25 -
THE ALGER FUNDS II | ALGER SPECTRA FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
REAL ESTATE INVESTMENT TRUST—2.2% | SHARES | VALUE | |||
SPECIALIZED—2.2% | |||||
Equinix, Inc. | 164,033 | $ | 69,023,446 | ||
SBA Communications Corp. , Cl. A* | 386,828 | 61,981,451 | |||
131,004,897 | |||||
TOTAL REAL ESTATE INVESTMENT TRUST | |||||
(Cost $133,095,557) | 131,004,897 | ||||
SPECIAL PURPOSE VEHICLE—0.1% | SHARES | VALUE | |||
CONSUMER FINANCE—0.1% | |||||
JS Kred SPV I, LLC.*,@,(a) | 2,715,111 | 3,327,097 | |||
(Cost $2,715,111) | 3,327,097 | ||||
Total Investments | |||||
(Cost $4,304,937,807) | 97.8 | % | $ | 5,868,218,765 | |
Affiliated Securities (Cost $13,104,054) | 8,736,036 | ||||
Unaffiliated Securities (Cost $4,291,833,753) | 5,859,482,729 | ||||
Other Assets in Excess of Liabilities | 2.2 | % | 137,948,312 | ||
NET ASSETS | 100.0 | % | $ | 6,006,167,077 |
# American Depositary Receipts.
(a) Security is valued in good faith at fair value determined using significant unobservable inputs pursuant to procedures established by
the Board.
(b) Deemed an affiliate of the Alger fund complex during the year in accordance with Section 2(a)(3) of the Investment Company Act
of 1940. See Affiliated Securities Note 11.
* Non-income producing security.
@ Restricted security - Investment in security not registered under the Securities Act of 1933. The investment is deemed to not be
liquid and may be sold only to qualified buyers.
(% of net assets | |||||||||
Acquisition | Acquisition | (Acquisition | Market | as of | |||||
Security | Date(s) | Cost | Date) | Value | 4/30/2018 | ||||
Intarcia Therapeutics, Inc. , Series | |||||||||
DD | 03/27/14 | $ | 5,541,897 | 0.14 | % | $ | 4,587,164 | 0.08 | % |
JS Kred SPV I, LLC. | 06/26/15 | 2,715,111 | 0.05 | % | 3,327,097 | 0.05 | % | ||
Palantir Technologies, Inc. , Cl. A | 10/07/14 | 2,266,336 | 0.05 | % | 2,002,679 | 0.03 | % | ||
Palantir Technologies, Inc. , Cl. B | 10/07/14 | 9,379,767 | 0.22 | % | 8,167,518 | 0.13 | % | ||
Palantir Technologies, Inc. , Cl. D | 10/14/14 | 1,221,931 | 0.03 | % | 1,064,107 | 0.02 | % | ||
Prosetta Biosciences, Inc. , Series D | 02/06/15 | 13,104,054 | 0.28 | % | 8,736,036 | 0.15 | % | ||
Total | $ | 27,884,601 | 0.46 | % | |||||
+ All or a portion of this security is held as collateral for securities sold short.
See Notes to Financial Statements.
- 26 -
THE ALGER FUNDS II | ALGER SPECTRA FUND
Schedule of Investments - Securities Sold Short April 30, 2018 (Unaudited)
COMMON STOCKS—(2.8)% | SHARES | VALUE | ||||
APPAREL ACCESSORIES & LUXURY GOODS—(0.1)% | ||||||
VF Corp. | (112,617 | ) | $ | (9,107,337 | ) | |
APPLICATION SOFTWARE—(0.2)% | ||||||
SAP SE# | (113,992 | ) | (12,633,733 | ) | ||
ASSET MANAGEMENT & CUSTODY BANKS—(0.1)% | ||||||
Federated Investors, Inc. , Cl. B | (267,246 | ) | (7,074,002 | ) | ||
AUTO PARTS & EQUIPMENT—(0.1)% | ||||||
Gentex Corp. | (142,134 | ) | (3,232,127 | ) | ||
DATA PROCESSING & OUTSOURCED SERVICES—(0.1)% | ||||||
Fidelity National Information Services, Inc. | (63,119 | ) | (5,994,412 | ) | ||
ELECTRICAL COMPONENTS & EQUIPMENT—0.0% | ||||||
Acuity Brands, Inc. | (12,833 | ) | (1,537,008 | ) | ||
FERTILIZERS & AGRICULTURAL CHEMICALS—(0.2)% | ||||||
The Scotts Miracle-Gro Co. | (123,007 | ) | (10,280,925 | ) | ||
INTERNET SOFTWARE & SERVICES—(0.4)% | ||||||
58. com, Inc. # | (73,539 | ) | (6,426,573 | ) | ||
NetEase, Inc. # | (22,206 | ) | (5,708,496 | ) | ||
Weibo Corp. # | (115,938 | ) | (13,277,220 | ) | ||
(25,412,289 | ) | |||||
IT CONSULTING & OTHER SERVICES—(0.2)% | ||||||
Infosys Ltd. # | (538,847 | ) | (9,521,427 | ) | ||
LIFE SCIENCES TOOLS & SERVICES—(0.1)% | ||||||
Evotec AG | (385,454 | ) | (6,221,040 | ) | ||
RESTAURANTS—(0.1)% | ||||||
Brinker International, Inc. | (94,974 | ) | (4,139,917 | ) | ||
SYSTEMS SOFTWARE—(0.7)% | ||||||
Check Point Software Technologies Ltd. | (211,696 | ) | (20,430,781 | ) | ||
Fortinet, Inc. | (185,354 | ) | (10,261,198 | ) | ||
Symantec Corp. | (452,064 | ) | (12,562,859 | ) | ||
(43,254,838 | ) | |||||
THRIFTS & MORTGAGE FINANCE—(0.1)% | ||||||
LendingTree, Inc. | (17,626 | ) | (4,202,038 | ) | ||
TIRES & RUBBER—(0.1)% | ||||||
The Goodyear Tire & Rubber Co. | (179,521 | ) | (4,507,772 | ) | ||
TRADING COMPANIES & DISTRIBUTORS—(0.3)% | ||||||
WW Grainger, Inc. | (60,469 | ) | (17,012,953 | ) | ||
TOTAL COMMON STOCKS | ||||||
(Proceeds $170,422,149) | $ | (164,131,818 | ) | |||
Total (Proceeds $170,422,149) | $ | (164,131,818 | ) |
# American Depositary Receipts.
See Notes to Financial Statements.
- 27 -
THE ALGER FUNDS II | ALGER RESPONSIBLE INVESTING FUND
Schedule of Investments April 30, 2018 (Unaudited)
COMMON STOCKS—95.7% | SHARES | VALUE | ||
AEROSPACE & DEFENSE—3.0% | ||||
Hexcel Corp. | 6,950 | $ | 461,966 | |
Lockheed Martin Corp. | 1,371 | 439,872 | ||
The Boeing Co. | 2,639 | 880,265 | ||
1,782,103 | ||||
AIR FREIGHT & LOGISTICS—0.5% | ||||
United Parcel Service, Inc. , Cl. B | 2,574 | 292,149 | ||
APPAREL ACCESSORIES & LUXURY GOODS—1.5% | ||||
PVH Corp. | 5,722 | 913,632 | ||
APPAREL RETAIL—0.6% | ||||
The Gap, Inc. | 12,902 | 377,255 | ||
APPLICATION SOFTWARE—5.5% | ||||
Adobe Systems, Inc. * | 2,684 | 594,775 | ||
Autodesk, Inc. * | 8,398 | 1,057,308 | ||
salesforce. com, Inc. * | 13,868 | 1,677,889 | ||
3,329,972 | ||||
ASSET MANAGEMENT & CUSTODY BANKS—0.5% | ||||
BlackRock, Inc. , Cl. A | 564 | 294,126 | ||
AUTOMOBILE MANUFACTURERS—0.4% | ||||
Tesla, Inc. * | 905 | 265,980 | ||
BIOTECHNOLOGY—4.9% | ||||
AbbVie, Inc. | 6,310 | 609,230 | ||
Biogen, Inc. * | 1,166 | 319,017 | ||
Celgene Corp. * | 3,369 | 293,440 | ||
Incyte Corp. * | 2,014 | 124,747 | ||
Sarepta Therapeutics, Inc. * | 7,830 | 597,899 | ||
TESARO, Inc. * | 1,569 | 79,878 | ||
Vertex Pharmaceuticals, Inc. * | 6,148 | 941,628 | ||
2,965,839 | ||||
BUILDING PRODUCTS—1.3% | ||||
Allegion PLC. | 5,588 | 431,282 | ||
Johnson Controls International PLC. | 10,927 | 370,097 | ||
801,379 | ||||
COMMUNICATIONS EQUIPMENT—2.2% | ||||
Cisco Systems, Inc. | 23,686 | 1,049,053 | ||
Lumentum Holdings, Inc. * | 5,424 | 273,641 | ||
1,322,694 | ||||
DATA PROCESSING & OUTSOURCED SERVICES—4.0% | ||||
Visa, Inc. , Cl. A | 18,919 | 2,400,443 | ||
DIVERSIFIED BANKS—1.7% | ||||
Citigroup, Inc. | 6,220 | 424,639 | ||
JPMorgan Chase & Co. | 5,474 | 595,462 | ||
1,020,101 | ||||
ELECTRICAL COMPONENTS & EQUIPMENT—0.5% | ||||
Rockwell Automation, Inc. | 1,902 | 312,936 |
- 28 -
THE ALGER FUNDS II | ALGER RESPONSIBLE INVESTING FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—95.7% (CONT. ) | SHARES | VALUE | ||
ENVIRONMENTAL & FACILITIES SERVICES—0.8% | ||||
Tetra Tech, Inc. | 9,763 | $ | 472,529 | |
FOOTWEAR—0.9% | ||||
NIKE, Inc. , Cl. B | 7,589 | 519,012 | ||
HEALTH CARE EQUIPMENT—1.0% | ||||
ABIOMED, Inc. * | 1,003 | 301,853 | ||
Edwards Lifesciences Corp. * | 2,448 | 311,777 | ||
613,630 | ||||
HEALTH CARE SUPPLIES—0.6% | ||||
Align Technology, Inc. * | 1,517 | 379,022 | ||
HEALTH CARE TECHNOLOGY—0.5% | ||||
Medidata Solutions, Inc. * | 4,396 | 313,699 | ||
HOME ENTERTAINMENT SOFTWARE—1.2% | ||||
Electronic Arts, Inc. * | 5,990 | 706,700 | ||
HOME IMPROVEMENT RETAIL—2.7% | ||||
The Home Depot, Inc. | 8,795 | 1,625,316 | ||
HOTELS RESORTS & CRUISE LINES—1.2% | ||||
Royal Caribbean Cruises Ltd. | 6,670 | 721,627 | ||
HOUSEHOLD PRODUCTS—1.2% | ||||
The Procter & Gamble Co. | 10,255 | 741,847 | ||
INDUSTRIAL CONGLOMERATES—4.4% | ||||
3M Co. | 2,730 | 530,684 | ||
Honeywell International, Inc. | 14,457 | 2,091,639 | ||
2,622,323 | ||||
INDUSTRIAL GASES—0.8% | ||||
Air Products & Chemicals, Inc. | 3,038 | 493,037 | ||
INDUSTRIAL MACHINERY—2.1% | ||||
Stanley Black & Decker, Inc. | 2,044 | 289,410 | ||
Woodward, Inc. | 4,802 | 345,456 | ||
Xylem, Inc. | 9,025 | 657,922 | ||
1,292,788 | ||||
INTERNET & DIRECT MARKETING RETAIL—9.5% | ||||
Amazon. com, Inc. * | 3,647 | 5,711,676 | ||
INTERNET SOFTWARE & SERVICES—10.3% | ||||
Alphabet, Inc. , Cl. A* | 1,789 | 1,822,240 | ||
Alphabet, Inc. , Cl. C* | 1,465 | 1,490,388 | ||
Facebook, Inc. , Cl. A* | 16,875 | 2,902,500 | ||
6,215,128 | ||||
INVESTMENT BANKING & BROKERAGE—1.8% | ||||
Morgan Stanley | 21,150 | 1,091,763 | ||
IT CONSULTING & OTHER SERVICES—0.6% | ||||
Accenture PLC., Cl. A | 2,322 | 351,086 | ||
LEISURE FACILITIES—0.8% | ||||
Vail Resorts, Inc. | 2,226 | 510,444 |
- 29 -
THE ALGER FUNDS II | ALGER RESPONSIBLE INVESTING FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—95.7% (CONT. ) | SHARES | VALUE | ||
LIFE SCIENCES TOOLS & SERVICES—0.8% | ||||
Agilent Technologies, Inc. | 7,736 | $ | 508,565 | |
MANAGED HEALTH CARE—1.5% | ||||
Cigna Corp. | 1,971 | 338,657 | ||
Humana, Inc. | 1,990 | 585,418 | ||
924,075 | ||||
OIL & GAS EXPLORATION & PRODUCTION—0.8% | ||||
Encana Corp. | 36,250 | 452,400 | ||
PACKAGED FOODS & MEATS—0.5% | ||||
McCormick & Co. , Inc. | 3,063 | 322,871 | ||
PHARMACEUTICALS—4.0% | ||||
Bristol-Myers Squibb Co. | 14,925 | 778,041 | ||
Johnson & Johnson | 6,939 | 877,714 | ||
Merck & Co. , Inc. | 5,675 | 334,087 | ||
Zoetis, Inc. , Cl. A | 4,902 | 409,219 | ||
2,399,061 | ||||
PROPERTY & CASUALTY INSURANCE—0.6% | ||||
The Progressive Corp. | 5,601 | 337,684 | ||
REGIONAL BANKS—0.8% | ||||
Regions Financial Corp. | 26,520 | 495,924 | ||
RESTAURANTS—0.8% | ||||
Dunkin' Brands Group, Inc. | 7,817 | 476,524 | ||
SEMICONDUCTOR EQUIPMENT—1.3% | ||||
Applied Materials, Inc. | 5,498 | 273,086 | ||
Lam Research Corp. | 2,682 | 496,331 | ||
769,417 | ||||
SEMICONDUCTORS—3.1% | ||||
Broadcom, Inc. | 3,287 | 754,103 | ||
Intel Corp. | 14,472 | 747,045 | ||
NVIDIA Corp. | 1,523 | 342,523 | ||
1,843,671 | ||||
SOFT DRINKS—1.2% | ||||
PepsiCo, Inc. | 6,849 | 691,338 | ||
SYSTEMS SOFTWARE—7.1% | ||||
Microsoft Corp. | 45,602 | 4,264,699 | ||
TECHNOLOGY HARDWARE STORAGE & PERIPHERALS—6.2% | ||||
Apple, Inc. | 22,607 | 3,736,033 | ||
TOTAL COMMON STOCKS | ||||
(Cost $32,920,886) | 57,682,498 | |||
REAL ESTATE INVESTMENT TRUST—2.3% | SHARES | VALUE | ||
SPECIALIZED—2.3% | ||||
Equinix, Inc. | 2,399 | 1,009,475 | ||
SBA Communications Corp. , Cl. A* | 2,261 | 362,280 | ||
1,371,755 | ||||
TOTAL REAL ESTATE INVESTMENT TRUST | ||||
(Cost $1,307,949) | 1,371,755 |
- 30 -
THE ALGER FUNDS II | ALGER RESPONSIBLE INVESTING FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
VALUE | |||||
Total Investments | |||||
(Cost $34,228,835) | 98.0 | % | $ | 59,054,253 | |
Unaffiliated Securities (Cost $34,228,835) | 59,054,253 | ||||
Other Assets in Excess of Liabilities | 2.0 | % | 1,229,221 | ||
NET ASSETS | 100.0 | % | $ | 60,283,474 |
* Non-income producing security.
See Notes to Financial Statements.
- 31 -
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments April 30, 2018 (Unaudited)
COMMON STOCKS—91.8% | SHARES | VALUE | ||
AEROSPACE & DEFENSE—5.2% | ||||
HEICO Corp.+ | 11,330 | $ | 995,340 | |
Kratos Defense & Security Solutions, Inc. * | 32,263 | 322,953 | ||
The Boeing Co. | 3,235 | 1,079,067 | ||
TransDigm Group, Inc.+ | 6,460 | 2,070,882 | ||
4,468,242 | ||||
AIR FREIGHT & LOGISTICS—2.5% | ||||
XPO Logistics, Inc. *,+ | 21,891 | 2,126,930 | ||
APPAREL ACCESSORIES & LUXURY GOODS—1.2% | ||||
adidas AG | 929 | 228,339 | ||
Canada Goose Holdings, Inc. *,+ | 15,043 | 557,795 | ||
Lululemon Athletica, Inc. * | 2,163 | 215,867 | ||
1,002,001 | ||||
APPAREL RETAIL—0.6% | ||||
Burlington Stores, Inc. * | 3,700 | 502,645 | ||
APPLICATION SOFTWARE—9.9% | ||||
Blackbaud, Inc.+ | 6,012 | 631,020 | ||
Ebix, Inc.+ | 21,363 | 1,655,632 | ||
Everbridge, Inc. *,+ | 29,794 | 1,112,806 | ||
Globant SA* | 3,931 | 176,934 | ||
HubSpot, Inc. *,+ | 6,381 | 675,748 | ||
MicroStrategy, Inc. , Cl. A* | 1,613 | 205,593 | ||
Paylocity Holding Corp. *,+ | 31,695 | 1,731,498 | ||
PTC, Inc. *,+ | 7,798 | 642,165 | ||
RealPage, Inc. * | 10,188 | 545,058 | ||
salesforce. com, Inc. * | 2,620 | 316,994 | ||
The Ultimate Software Group, Inc. *,+ | 3,418 | 820,047 | ||
8,513,495 | ||||
ASSET MANAGEMENT & CUSTODY BANKS—0.9% | ||||
Affiliated Managers Group, Inc. + | 3,765 | 620,698 | ||
Virtus Investment Partners, Inc. | 1,571 | 181,215 | ||
801,913 | ||||
BIOTECHNOLOGY—6.3% | ||||
AbbVie, Inc. | 8,920 | 861,226 | ||
ACADIA Pharmaceuticals, Inc. *,+ | 33,654 | 532,070 | ||
Acorda Therapeutics, Inc.+ | 11,279 | 260,545 | ||
Agios Pharmaceuticals, Inc. * | 1,008 | 84,581 | ||
Alexion Pharmaceuticals, Inc. * | 1,241 | 145,979 | ||
BioMarin Pharmaceutical, Inc. *,+ | 4,972 | 415,212 | ||
Exact Sciences Corp. *,+ | 4,166 | 208,341 | ||
Portola Pharmaceuticals, Inc. *,+ | 34,567 | 1,248,906 | ||
Puma Biotechnology, Inc. *,+ | 10,997 | 701,059 | ||
Sarepta Therapeutics, Inc. * | 2,731 | 208,539 | ||
Ultragenyx Pharmaceutical, Inc. *,+ | 11,201 | 569,459 | ||
Vertex Pharmaceuticals, Inc. *,+ | 1,359 | 208,144 | ||
5,444,061 |
- 32 -
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—91.8% (CONT. ) | SHARES | VALUE | ||
CONSTRUCTION MACHINERY & HEAVY TRUCKS—0.5% | ||||
Wabtec Corp. | 4,660 | $ | 413,855 | |
CONSTRUCTION MATERIALS—0.2% | ||||
US Concrete, Inc. * | 3,493 | 204,166 | ||
DATA PROCESSING & OUTSOURCED SERVICES—1.2% | ||||
Visa, Inc. , Cl. A+ | 8,417 | 1,067,949 | ||
DISTRIBUTORS—0.4% | ||||
LKQ Corp. * | 11,963 | 371,092 | ||
DIVERSIFIED BANKS—0.6% | ||||
Bank of America Corp. | 17,325 | 518,364 | ||
DIVERSIFIED SUPPORT SERVICES—0.5% | ||||
Cintas Corp. | 2,167 | 369,040 | ||
iAnthus Capital Holdings, Inc. * | 23,836 | 85,593 | ||
454,633 | ||||
EDUCATION SERVICES—2.5% | ||||
Chegg, Inc. *,+ | 94,228 | 2,187,032 | ||
ELECTRONIC COMPONENTS—0.3% | ||||
Universal Display Corp.+ | 2,426 | 213,609 | ||
ELECTRONIC EQUIPMENT & INSTRUMENTS—0.9% | ||||
FLIR Systems, Inc. | 4,120 | 220,626 | ||
nLight, Inc. * | 4,385 | 109,318 | ||
Trimble, Inc. * | 11,729 | 405,823 | ||
735,767 | ||||
ELECTRONIC MANUFACTURING SERVICES—0.2% | ||||
IPG Photonics Corp. * | 660 | 140,600 | ||
ENVIRONMENTAL & FACILITIES SERVICES—1.8% | ||||
Waste Connections, Inc.+ | 21,584 | 1,560,523 | ||
FINANCIAL EXCHANGES & DATA—1.5% | ||||
CME Group, Inc. , Cl. A | 2,617 | 412,648 | ||
MarketAxess Holdings, Inc.+ | 2,600 | 516,438 | ||
S&P Global, Inc. | 1,691 | 318,923 | ||
1,248,009 | ||||
GENERAL MERCHANDISE STORES—0.8% | ||||
Dollar Tree, Inc. *,+ | 4,412 | 423,067 | ||
Ollie's Bargain Outlet Holdings, Inc. * | 4,771 | 296,756 | ||
719,823 | ||||
HEALTH CARE DISTRIBUTORS—0.2% | ||||
PetIQ, Inc. , Cl. A* | 9,444 | 211,073 | ||
HEALTH CARE EQUIPMENT—6.4% | ||||
ABIOMED, Inc. *,+ | 1,757 | 528,769 | ||
AxoGen, Inc. * | 2,838 | 112,952 | ||
Cantel Medical Corp.+ | 5,479 | 614,031 | ||
Danaher Corp. | 6,184 | 620,379 | ||
Glaukos Corp. * | 1,326 | 44,660 | ||
Insulet Corp. *,+ | 30,447 | 2,618,442 | ||
Intuitive Surgical, Inc. *,+ | 1,411 | 621,941 |
- 33 -
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—91.8% (CONT. ) | SHARES | VALUE | ||
HEALTH CARE EQUIPMENT—6.4% (CONT. ) | ||||
Zimmer Biomet Holdings, Inc. | 2,735 | $ | 314,990 | |
5,476,164 | ||||
HEALTH CARE FACILITIES—0.4% | ||||
US Physical Therapy, Inc.,+ | 4,002 | 365,182 | ||
HEALTH CARE SERVICES—0.7% | ||||
Diplomat Pharmacy, Inc. *,+ | 26,829 | 584,604 | ||
HEALTH CARE SUPPLIES—0.9% | ||||
Align Technology, Inc. * | 1,671 | 417,499 | ||
Quidel Corp. * | 6,504 | 368,777 | ||
786,276 | ||||
HEALTH CARE TECHNOLOGY—1.6% | ||||
Cotiviti Holdings, Inc. *,+ | 6,939 | 239,673 | ||
Medidata Solutions, Inc. *,+ | 9,501 | 677,991 | ||
Veeva Systems, Inc. , Cl. A* | 5,912 | 414,609 | ||
1,332,273 | ||||
HOME ENTERTAINMENT SOFTWARE—0.6% | ||||
Electronic Arts, Inc. * | 1,826 | 215,431 | ||
Take-Two Interactive Software, Inc. * | 3,212 | 320,269 | ||
535,700 | ||||
HUMAN RESOURCE & EMPLOYMENT SERVICES—0.9% | ||||
WageWorks, Inc. *,+ | 18,257 | 760,404 | ||
INDUSTRIAL CONGLOMERATES—0.2% | ||||
Roper Technologies, Inc. | 736 | 194,444 | ||
INDUSTRIAL MACHINERY—1.3% | ||||
Proto Labs, Inc. * | 286 | 34,077 | ||
Stanley Black & Decker, Inc. | 1,675 | 237,163 | ||
The Middleby Corp. *,+ | 6,739 | 848,036 | ||
1,119,276 | ||||
INTERNET & DIRECT MARKETING RETAIL—3.7% | ||||
Amazon. com, Inc. *,+ | 935 | 1,464,331 | ||
Booking Holdings, Inc. * | 101 | 219,978 | ||
Wayfair, Inc. , Cl. A*,+ | 23,922 | 1,490,341 | ||
3,174,650 | ||||
INTERNET SOFTWARE & SERVICES—15.0% | ||||
2U, Inc. *,+ | 5,683 | 457,425 | ||
Alibaba Group Holding Ltd. #*,+ | 6,052 | 1,080,524 | ||
Alphabet, Inc. , Cl. C*,+ | 1,639 | 1,667,404 | ||
CommerceHub, Inc. , Series A* | 7,414 | 168,075 | ||
Etsy, Inc. * | 29,124 | 871,973 | ||
Facebook, Inc. , Cl. A*,+ | 7,426 | 1,277,272 | ||
GrubHub, Inc. * | 2,062 | 208,551 | ||
GTT Communications, Inc. *,+ | 13,880 | 666,934 | ||
Match Group, Inc. * ,+ | 7,263 | 342,233 | ||
Palantir Technologies, Inc. , Cl. A*,@,(a) | 6,606 | 37,985 | ||
Spotify Technology SA* | 5,572 | 900,824 | ||
SPS Commerce, Inc. * | 4,864 | 333,524 |
- 34 -
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—91.8% (CONT. ) | SHARES | VALUE | ||
INTERNET SOFTWARE & SERVICES—15.0% (CONT. ) | ||||
Stamps. com, Inc. *,+ | 7,525 | $ | 1,713,819 | |
Tencent Holdings Ltd. | 23,845 | 1,172,290 | ||
The Trade Desk, Inc. , Cl. A*,+ | 13,769 | 704,560 | ||
Yelp, Inc. , Cl. A* | 29,057 | 1,303,206 | ||
12,906,599 | ||||
IT CONSULTING & OTHER SERVICES—0.6% | ||||
Accenture PLC. , Cl. A | 1,414 | 213,797 | ||
EPAM Systems, Inc. *,+ | 2,910 | 332,758 | ||
546,555 | ||||
LEISURE FACILITIES—0.5% | ||||
Planet Fitness, Inc. , Cl. A*,+ | 11,222 | 452,134 | ||
LIFE SCIENCES TOOLS & SERVICES—0.6% | ||||
Bio-Techne Corp.,+ | 3,402 | 513,396 | ||
MANAGED HEALTH CARE—0.8% | ||||
UnitedHealth Group, Inc. | 2,876 | 679,886 | ||
MOVIES & ENTERTAINMENT—0.4% | ||||
Live Nation Entertainment, Inc. *,+ | 8,031 | 316,984 | ||
OIL & GAS EQUIPMENT & SERVICES—1.1% | ||||
ProPetro Holding Corp. * | 11,643 | 213,067 | ||
Solaris Oilfield Infrastructure, Inc. , Cl. A*,+ | 39,220 | 737,336 | ||
950,403 | ||||
OIL & GAS EXPLORATION & PRODUCTION—0.6% | ||||
Parsley Energy, Inc. , Cl. A* | 9,748 | 292,732 | ||
Penn Virginia Corp. * | 4,680 | 217,246 | ||
509,978 | ||||
PERSONAL PRODUCTS—0.5% | ||||
L'Occitane International SA | 221,135 | 410,194 | ||
PHARMACEUTICALS—1.2% | ||||
Aerie Pharmaceuticals, Inc. * | 3,134 | 160,461 | ||
Bristol-Myers Squibb Co. | 10,261 | 534,906 | ||
Canopy Growth Corp. * | 4,036 | 94,660 | ||
GW Pharmaceuticals PLC. #* | 1,584 | 210,529 | ||
1,000,556 | ||||
REAL ESTATE SERVICES—2.4% | ||||
FirstService Corp.+ | 27,878 | 1,951,460 | ||
Redfin Corp. | 4,760 | 101,864 | ||
2,053,324 | ||||
REGIONAL BANKS—2.7% | ||||
Independent Bank Group, Inc.,+ | 15,924 | 1,136,974 | ||
Peapack Gladstone Financial Corp. | 1,825 | 60,298 | ||
Signature Bank*,+ | 5,803 | 737,851 | ||
SVB Financial Group* | 692 | 207,330 | ||
Webster Financial Corp. | 3,468 | 208,739 | ||
2,351,192 |
- 35 -
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—91.8% (CONT. ) | SHARES | VALUE | ||
RESTAURANTS—0.6% | ||||
Chipotle Mexican Grill, Inc. , Cl. A* | 946 | $ | 400,470 | |
Chuy's Holdings, Inc. * | 2,553 | 73,016 | ||
473,486 | ||||
SEMICONDUCTOR EQUIPMENT—1.7% | ||||
Applied Materials, Inc.,+ | 13,026 | 647,001 | ||
Lam Research Corp. | 4,561 | 844,059 | ||
1,491,060 | ||||
SEMICONDUCTORS—0.4% | ||||
Impinj, Inc. * | 10,855 | 133,408 | ||
Micron Technology, Inc. *,+ | 4,184 | 192,380 | ||
325,788 | ||||
SPECIALIZED CONSUMER SERVICES—0.5% | ||||
ServiceMaster Global Holdings, Inc. * | 8,305 | 420,233 | ||
SPECIALTY CHEMICALS—0.2% | ||||
The Sherwin-Williams Co. | 559 | 205,522 | ||
SYSTEMS SOFTWARE—2.5% | ||||
Microsoft Corp.,+ | 18,652 | 1,744,335 | ||
Proofpoint, Inc. * | 2,608 | 307,588 | ||
ServiceNow, Inc. *,+ | 660 | 109,652 | ||
2,161,575 | ||||
TECHNOLOGY HARDWARE STORAGE & PERIPHERALS—2.5% | ||||
Apple, Inc.,+ | 12,869 | 2,126,731 | ||
THRIFTS & MORTGAGE FINANCE—0.8% | ||||
BofI Holding, Inc. *,+ | 17,838 | 718,515 | ||
TRADING COMPANIES & DISTRIBUTORS—1.3% | ||||
Fastenal Co. | 8,604 | 430,114 | ||
H&E Equipment Services, Inc.+ | 9,577 | 309,816 | ||
SiteOne Landscape Supply, Inc. *,+ | 5,609 | 384,216 | ||
1,124,146 | ||||
TOTAL COMMON STOCKS | ||||
(Cost $66,918,064) | 78,973,012 | |||
PREFERRED STOCKS—0.3% | SHARES | VALUE | ||
BIOTECHNOLOGY—0.1% | ||||
Prosetta Biosciences, Inc. , Series D*,@,(a),(b) | 41,418 | 124,254 | ||
INTERNET SOFTWARE & SERVICES—0.2% | ||||
Palantir Technologies, Inc. , Cl. B*,@,(a) | 26,941 | 154,911 | ||
TOTAL PREFERRED STOCKS | ||||
(Cost $364,284) | 279,165 | |||
RIGHTS—0.5% | SHARES | VALUE | ||
BIOTECHNOLOGY—0.5% | ||||
Adolor Corp. , CPR*,@,(a),(c) | 49,870 | – | ||
Tolero CDR*,@,(a),(d) | 126,108 | 411,256 | ||
411,256 | ||||
TOTAL RIGHTS | ||||
(Cost $67,638) | 411,256 |
- 36 -
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
REAL ESTATE INVESTMENT TRUST—0.5% | SHARES | VALUE | ||
SPECIALIZED—0.5% | ||||
Crown Castle International Corp. | 4,029 | $ | 406,405 | |
(Cost $425,474) | 406,405 | |||
SPECIAL PURPOSE VEHICLE—0.2% | SHARES | VALUE | ||
CONSUMER FINANCE—0.2% | ||||
JS Kred SPV I, LLC. *,@,(a) | 159,212 | 195,098 | ||
(Cost $159,212) | 195,098 |
PURCHASED OPTIONS—0.8% | |||||||||
SECURITY NAME/ | |||||||||
EXPIRATION DATE/ | NOTIONAL | NUMBER OF | |||||||
STRIKE PRICE | AMOUNTS | COUNTERPARTY | CONTRACTS | VALUE | |||||
PUT OPTIONS—0.8% | |||||||||
Carvana Co. , 1/18/19, 25* | $ | 89,114 | BNP Paribas | 34 | $ | 16,320 | |||
Carvana Co. , 8/17/18, 23* | 89,114 | BNP Paribas | 34 | 7,650 | |||||
Powershares QQQ Trust Series 1, | |||||||||
5/18/18, 157* | 804,700 | BNP Paribas | 50 | 7,650 | |||||
Powershares QQQ Trust Series 1, | |||||||||
5/18/18, 160* | 321,880 | BNP Paribas | 20 | 4,960 | |||||
Riot Blockchain, Inc. , 1/18/19, 13* | 9,386 | BNP Paribas | 13 | 10,530 | |||||
Riot Blockchain, Inc. , 1/18/19, 33* | 24,548 | BNP Paribas | 34 | 92,820 | |||||
Riot Blockchain, Inc. , 6/15/18, 16* | 18,772 | BNP Paribas | 26 | 23,920 | |||||
Sears Holdings Corp. , 1/18/19, 17* | 15,548 | BNP Paribas | 52 | 63,440 | |||||
Sears Holdings Corp. , 1/18/19, 25* | 29,302 | BNP Paribas | 98 | 213,640 | |||||
Sears Holdings Corp. , 6/15/18, 27* | 5,382 | BNP Paribas | 18 | 42,660 | |||||
Snap, Inc. , 1/18/19, 30* | 96,011 | BNP Paribas | 67 | 97,820 | |||||
Snap, Inc. , 1/18/19, 40* | 75,949 | BNP Paribas | 53 | 136,740 | |||||
(Cost $728,386) | 718,150 | ||||||||
TOTAL PURCHASED OPTIONS | |||||||||
(Cost $728,386) | 718,150 | ||||||||
Total Investments | |||||||||
(Cost $68,663,058) | 94.1 | % | $ | 80,983,086 | |||||
Affiliated Securities (Cost $186,381) | 124,254 | ||||||||
Unaffiliated Securities (Cost $68,476,677) | 80,858,832 | ||||||||
Other Assets in Excess of Liabilities | 5.9 | % | 5,027,290 | ||||||
NET ASSETS | 100.0 | % | $ | 86,010,376 |
# American Depositary Receipts.
(a) Security is valued in good faith at fair value determined using significant unobservable inputs pursuant to procedures established by the
Board.
(b) Deemed an affiliate of the Alger fund complex during the year in accordance with Section 2(a)(3) of the Investment Company Act of
1940. See Affiliated Securities Note 11.
(c) Right - Contingent Payment Right granted December 13, 2011 and may not be sold. Right is deemed to be illiquid and represents
0.0% of the net assets of the Fund.
(d) Contingent Deferred Rights.
* Non-income producing security.
- 37 -
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
@ Restricted security - Investment in security not registered under the Securities Act of 1933. The investment is deemed to not be liquid
and may be sold only to qualified buyers.
% of net assets | % of net assets | ||||||||
Acquisition | Acquisition | (Acquisition | Market | as of | |||||
Security | Date(s) | Cost | Date) | Value | 4/30/2018 | ||||
Adolor Corp. , CPR | 10/24/11 | $ | 0 | 0.00 | % | $ | 0 | 0.00 | % |
JS Kred SPV I, LLC. | 06/26/15 | 159,212 | 0.15 | % | 195,098 | 0.23 | % | ||
Palantir Technologies, Inc. , Cl. A | 10/07/14 | 42,985 | 0.05 | % | 37,985 | 0.04 | % | ||
Palantir Technologies, Inc. , Cl. B | 10/07/14 | 177,903 | 0.22 | % | 154,911 | 0.18 | % | ||
Prosetta Biosciences, Inc. , Series D | 02/06/15 | 186,381 | 0.25 | % | 124,254 | 0.14 | % | ||
Tolero CDR | 02/06/17 | 67,638 | 0.09 | % | 411,256 | 0.48 | % | ||
Total | $ | 923,504 | 1.07 | % | |||||
+ All or a portion of this security is held as collateral for securities sold short.
See Notes to Financial Statements.
- 38 -
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments - Securities Sold Short April 30, 2018 (Unaudited)
COMMON STOCKS—(27.2)% | SHARES | VALUE | ||||
AIR FREIGHT & LOGISTICS—(0.1)% | ||||||
CH Robinson Worldwide, Inc. | (1,082 | ) | $ | (99,577 | ) | |
APPAREL ACCESSORIES & LUXURY GOODS—(0.1)% | ||||||
VF Corp. | (1,480 | ) | (119,688 | ) | ||
APPLICATION SOFTWARE—(0.7)% | ||||||
Citrix Systems, Inc. | (3,369 | ) | (346,704 | ) | ||
SAP SE# | (1,958 | ) | (217,005 | ) | ||
Snap, Inc. , Cl. A | (1,632 | ) | (23,387 | ) | ||
(587,096 | ) | |||||
AUTO PARTS & EQUIPMENT—(0.1)% | ||||||
Gentex Corp. | (3,813 | ) | (86,708 | ) | ||
AUTOMOTIVE RETAIL—(0.5)% | ||||||
Carvana Co. , Cl. A | (15,152 | ) | (397,134 | ) | ||
BIOTECHNOLOGY—(0.2)% | ||||||
Genomic Health, Inc. | (1,789 | ) | (56,765 | ) | ||
United Therapeutics Corp. | (1,158 | ) | (127,507 | ) | ||
(184,272 | ) | |||||
BREWERS—(0.2)% | ||||||
The Boston Beer Co. , Inc. , Cl. A | (586 | ) | (131,352 | ) | ||
BROADCASTING—(0.1)% | ||||||
AMC Networks, Inc. , Cl. A | (2,411 | ) | (125,372 | ) | ||
COMMERCIAL PRINTING—(0.5)% | ||||||
Cimpress NV | (2,866 | ) | (412,159 | ) | ||
COMMUNICATIONS EQUIPMENT—(0.1)% | ||||||
Finisar Corp. | (5,665 | ) | (88,261 | ) | ||
COMPUTER & ELECTRONICS RETAIL—(0.2)% | ||||||
JB Hi-Fi Ltd. | (11,001 | ) | (212,095 | ) | ||
CONSTRUCTION & ENGINEERING—(0.2)% | ||||||
Great Lakes Dredge & Dock Corp. | (29,954 | ) | (137,788 | ) | ||
CONSTRUCTION MACHINERY & HEAVY TRUCKS—(0.2)% | ||||||
PACCAR, Inc. | (2,499 | ) | (159,111 | ) | ||
DATA PROCESSING & OUTSOURCED SERVICES—(1.4)% | ||||||
Automatic Data Processing, Inc. | (4,986 | ) | (588,747 | ) | ||
Fidelity National Information Services, Inc. | (1,098 | ) | (104,277 | ) | ||
The Western Union Co. | (23,772 | ) | (469,497 | ) | ||
(1,162,521 | ) | |||||
DEPARTMENT STORES—0.0% | ||||||
Sears Holdings Corp. | (19 | ) | (57 | ) | ||
ELECTRICAL COMPONENTS & EQUIPMENT—(0.1)% | ||||||
Acuity Brands, Inc. | (928 | ) | (111,147 | ) | ||
FERTILIZERS & AGRICULTURAL CHEMICALS—(0.2)% | ||||||
The Scotts Miracle-Gro Co. | (1,609 | ) | (134,480 | ) | ||
FINANCIAL EXCHANGES & DATA—(0.2)% | ||||||
FactSet Research Systems, Inc. | (782 | ) | (147,884 | ) |
- 39 -
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments - Securities Sold Short April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—(27.2)% (CONT. ) | SHARES | VALUE | ||||
GAS UTILITIES—(0.2)% | ||||||
National Fuel Gas Co. | (3,249 | ) | $ | (166,836 | ) | |
GENERAL MERCHANDISE STORES—(0.3)% | ||||||
Target Corp. | (2,991 | ) | (217,147 | ) | ||
HEALTH CARE EQUIPMENT—(1.3)% | ||||||
DexCom, Inc. | (14,974 | ) | (1,095,797 | ) | ||
HEALTH CARE FACILITIES—(0.2)% | ||||||
Encompass Health Corp. | (2,240 | ) | (136,237 | ) | ||
HEALTH CARE TECHNOLOGY—0.0% | ||||||
Castlight Health, Inc. , Cl. B | (10,388 | ) | (38,955 | ) | ||
HOME FURNISHINGS—(0.5)% | ||||||
La-Z-Boy, Inc. | (4,420 | ) | (127,296 | ) | ||
Leggett & Platt, Inc. | (7,919 | ) | (321,115 | ) | ||
(448,411 | ) | |||||
HOMEFURNISHING RETAIL—(0.1)% | ||||||
Williams-Sonoma, Inc. | (1,616 | ) | (77,245 | ) | ||
HOUSEHOLD APPLIANCES—(0.5)% | ||||||
iRobot Corp. | (6,735 | ) | (393,055 | ) | ||
HYPERMARKETS & SUPER CENTERS—(0.5)% | ||||||
Costco Wholesale Corp. | (2,225 | ) | (438,681 | ) | ||
INDUSTRIAL MACHINERY—(0.7)% | ||||||
Actuant Corp. , Cl. A | (21,206 | ) | (499,401 | ) | ||
Hillenbrand, Inc. | (3,131 | ) | (145,122 | ) | ||
(644,523 | ) | |||||
INTERNET & DIRECT MARKETING RETAIL—(0.3)% | ||||||
Blue Apron Holdings, Inc. , Cl. A | (12,772 | ) | (26,694 | ) | ||
Expedia Group, Inc. | (2,029 | ) | (233,619 | ) | ||
PetMed Express, Inc. | (1,210 | ) | (40,487 | ) | ||
(300,800 | ) | |||||
INTERNET SOFTWARE & SERVICES—(1.1)% | ||||||
Box, Inc. , Cl. A | (4,015 | ) | (91,783 | ) | ||
Shutterstock, Inc. | (11,412 | ) | (480,902 | ) | ||
Weibo Corp. # | (1,338 | ) | (153,228 | ) | ||
Zillow Group, Inc. , Cl. A | (1,667 | ) | (80,633 | ) | ||
Zillow Group, Inc. , Cl. C | (3,280 | ) | (159,047 | ) | ||
(965,593 | ) | |||||
IT CONSULTING & OTHER SERVICES—(0.8)% | ||||||
Infosys Ltd. # | (37,720 | ) | (666,512 | ) | ||
LEISURE PRODUCTS—(0.2)% | ||||||
Hasbro, Inc. | (1,556 | ) | (137,068 | ) | ||
LIFE SCIENCES TOOLS & SERVICES—(0.4)% | ||||||
Illumina, Inc. | (318 | ) | (76,616 | ) | ||
IQVIA Holdings, Inc. | (1,462 | ) | (140,001 | ) | ||
Waters Corp. | (786 | ) | (148,090 | ) | ||
(364,707 | ) |
- 40 -
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments - Securities Sold Short April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—(27.2)% (CONT. ) | SHARES | VALUE | ||||
MARKET INDICES—(1.7)% | ||||||
iShares Russell 2000 Growth ETF | (3,757 | ) | $ | (717,549 | ) | |
PowerShares QQQ Trust Series 1 | (4,569 | ) | (735,335 | ) | ||
(1,452,884 | ) | |||||
METAL & GLASS CONTAINERS—(0.1)% | ||||||
Silgan Holdings, Inc. | (3,675 | ) | (103,157 | ) | ||
MISCELLANEOUS—(0.7)% | ||||||
iPATH S&P 500 VIX Short-Term Futures ETN | (13,813 | ) | (574,206 | ) | ||
MOTORCYCLE MANUFACTURERS—(0.2)% | ||||||
Harley-Davidson, Inc. | (3,619 | ) | (148,850 | ) | ||
MOVIES & ENTERTAINMENT—(0.1)% | ||||||
The Walt Disney Co. | (964 | ) | (96,718 | ) | ||
PACKAGED FOODS & MEATS—(0.2)% | ||||||
General Mills, Inc. | (1,456 | ) | (63,685 | ) | ||
The Hershey Co. | (1,145 | ) | (105,271 | ) | ||
(168,956 | ) | |||||
PHARMACEUTICALS—(1.7)% | ||||||
Valeant Pharmaceuticals International, Inc. | (81,103 | ) | (1,465,531 | ) | ||
PROPERTY & CASUALTY INSURANCE—(2.9)% | ||||||
HCI Group, Inc. | (36,702 | ) | (1,537,447 | ) | ||
Universal Insurance Holdings, Inc. | (30,400 | ) | (986,480 | ) | ||
(2,523,927 | ) | |||||
REGIONAL BANKS—(2.0)% | ||||||
Associated Banc-Corp. | (15,349 | ) | (405,981 | ) | ||
People's United Financial, Inc. | (29,851 | ) | (545,975 | ) | ||
Synovus Financial Corp. | (5,616 | ) | (293,548 | ) | ||
Zions Bancorporation | (10,117 | ) | (553,906 | ) | ||
(1,799,410 | ) | |||||
RESTAURANTS—(0.7)% | ||||||
Papa John's International, Inc. | (4,502 | ) | (279,124 | ) | ||
Starbucks Corp. | (3,679 | ) | (211,800 | ) | ||
Texas Roadhouse, Inc. , Cl. A | (2,089 | ) | (133,863 | ) | ||
(624,787 | ) | |||||
SECURITY & ALARM SERVICES—(0.1)% | ||||||
ADT, Inc. | (11,744 | ) | (104,639 | ) | ||
SEMICONDUCTORS—(0.4)% | ||||||
Advanced Micro Devices, Inc. | (13,471 | ) | (146,565 | ) | ||
Analog Devices, Inc. | (1,845 | ) | (161,161 | ) | ||
(307,726 | ) | |||||
SPECIALTY STORES—(0.6)% | ||||||
Tractor Supply Co. | (2,407 | ) | (163,676 | ) | ||
Ulta Beauty, Inc. | (1,571 | ) | (394,180 | ) | ||
(557,856 | ) | |||||
SYSTEMS SOFTWARE—(1.3)% | ||||||
Check Point Software Technologies Ltd. | (3,387 | ) | (326,879 | ) | ||
Fortinet, Inc. | (6,965 | ) | (385,582 | ) |
- 41 -
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments - Securities Sold Short April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—(27.2)% (CONT. ) | SHARES | VALUE | ||||
SYSTEMS SOFTWARE—(1.3)% (CONT. ) | ||||||
Oracle Corp. | (5,142 | ) | $ | (234,835 | ) | |
Symantec Corp. | (6,798 | ) | (188,916 | ) | ||
(1,136,212 | ) | |||||
TECHNOLOGY HARDWARE STORAGE & PERIPHERALS—(0.2)% | ||||||
Pure Storage, Inc. , Cl. A | (6,610 | ) | (133,720 | ) | ||
TIRES & RUBBER—(0.1)% | ||||||
The Goodyear Tire & Rubber Co. | (3,484 | ) | (87,483 | ) | ||
TRADING COMPANIES & DISTRIBUTORS—(2.0)% | ||||||
MSC Industrial Direct Co. , Inc. , Cl. A | (2,128 | ) | (183,944 | ) | ||
WW Grainger, Inc. | (5,466 | ) | (1,537,859 | ) | ||
(1,721,803 | ) | |||||
TOTAL COMMON STOCKS | ||||||
(Proceeds $21,611,208) | (23,396,134 | ) | ||||
MASTER LIMITED PARTNERSHIP—0.0% | SHARES | VALUE | ||||
ASSET MANAGEMENT & CUSTODY BANKS—0.0% | ||||||
Och-Ziff Capital Management Group LLC. , Cl. A | (811 | ) | (1,581 | ) | ||
(Proceeds $1,975) | (1,581 | ) | ||||
REAL ESTATE INVESTMENT TRUST—(1.9)% | SHARES | VALUE | ||||
HOTEL & RESORT—(0.1)% | ||||||
Host Hotels & Resorts, Inc. | (6,449 | ) | (126,142 | ) | ||
RETAIL—(1.8)% | ||||||
CBL & Associates Properties, Inc. | (29,169 | ) | (121,926 | ) | ||
Pennsylvania Real Estate Investment Trust | (53,486 | ) | (517,745 | ) | ||
Seritage Growth Properties | (11,174 | ) | (397,459 | ) | ||
Washington Prime Group, Inc. | (79,699 | ) | (515,653 | ) | ||
(1,552,783 | ) | |||||
TOTAL REAL ESTATE INVESTMENT TRUST | ||||||
(Proceeds $1,826,833) | (1,678,925 | ) | ||||
Total (Proceeds $23,440,016) | $ | (25,076,640 | ) | |||
# American Depositary Receipts. |
See Notes to Financial Statements.
- 42 -
THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND
Schedule of Investments April 30, 2018 (Unaudited)
COMMON STOCKS—95.3% | SHARES | VALUE | ||
ARGENTINA—1.2% | ||||
CONSTRUCTION MATERIALS—0.6% | ||||
Loma Negra Compania Industrial Argentina SA#* | 20,029 | $ | 415,402 | |
DIVERSIFIED BANKS—0.6% | ||||
Grupo Supervielle SA# | 16,422 | 458,831 | ||
TOTAL ARGENTINA | ||||
(Cost $848,548) | 874,233 | |||
BRAZIL—6.1% | ||||
DIVERSIFIED BANKS—2.1% | ||||
Banco Bradesco SA | 84,172 | 830,619 | ||
Banco do Brasil SA | 67,100 | 702,949 | ||
1,533,568 | ||||
FINANCIAL EXCHANGES & DATA—0.7% | ||||
B3 SA - Brasil Bolsa Balcao | 74,700 | 539,481 | ||
HOMEBUILDING—0.9% | ||||
MRV Engenharia e Participacoes SA* | 154,600 | 661,966 | ||
PAPER PRODUCTS—0.5% | ||||
Fibria Celulose SA | 18,700 | 367,306 | ||
RAILROADS—0.8% | ||||
Rumo SA* | 132,687 | 562,458 | ||
TRUCKING—1.1% | ||||
Localiza Rent a Car SA | 97,300 | 774,634 | ||
TOTAL BRAZIL | ||||
(Cost $3,984,974) | 4,439,413 | |||
CHILE—1.1% | ||||
OIL & GAS EXPLORATION & PRODUCTION—1.1% | ||||
Geopark Ltd. * | 52,621 | 772,476 | ||
(Cost $383,541) | ||||
CHINA—29.7% | ||||
AUTOMOTIVE RETAIL—0.5% | ||||
China ZhengTong Auto Services Holdings Ltd. | 472,500 | 382,081 | ||
BREWERS—0.7% | ||||
China Resources Beer Holdings Co. , Ltd. | 124,000 | 534,059 | ||
CASINOS & GAMING—0.9% | ||||
Galaxy Entertainment Group Ltd. , Cl. L | 78,000 | 682,705 | ||
COMMUNICATIONS EQUIPMENT—0.2% | ||||
ZTE Corp. , Cl. H* | 78,400 | 159,824 | ||
CONSTRUCTION MATERIALS—1.7% | ||||
China National Building Material Co. , Ltd. , Cl. H | 596,000 | 696,303 | ||
West China Cement Ltd. * | 2,292,000 | 464,877 | ||
1,161,180 | ||||
DIVERSIFIED BANKS—4.6% | ||||
China Construction Bank Corp. , Cl. H | 1,432,700 | 1,500,981 | ||
China Merchants Bank Co. , Ltd. , Cl. H | 200,000 | 872,080 | ||
Industrial & Commercial Bank of China Ltd. , Cl. H | 1,088,000 | 955,135 | ||
3,328,196 |
- 43 -
THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—95.3% (CONT. ) | SHARES | VALUE | ||
CHINA—29.7% (CONT. ) | ||||
DIVERSIFIED METALS & MINING—0.6% | ||||
China Molybdenum Co. , Ltd. , Cl. H* | 534,000 | $ | 401,284 | |
EDUCATION SERVICES—0.9% | ||||
TAL Education Group# | 17,350 | 631,887 | ||
ELECTRONIC EQUIPMENT & INSTRUMENTS—0.7% | ||||
Hangzhou Hikvision Digital Technology Co. , Ltd. , Cl. A | 83,100 | 504,534 | ||
GAS UTILITIES—0.5% | ||||
ENN Energy Holdings Ltd. | 41,000 | 383,413 | ||
INTEGRATED OIL & GAS—2.0% | ||||
China Petroleum & Chemical Corp. , Cl. H | 1,015,023 | 988,490 | ||
PetroChina Co. , Ltd. , Cl. H | 572,000 | 421,489 | ||
1,409,979 | ||||
INTERNET & DIRECT MARKETING RETAIL—0.7% | ||||
JD. com, Inc. #* | 14,334 | 523,334 | ||
INTERNET SOFTWARE & SERVICES—11.2% | ||||
Alibaba Group Holding Ltd. #* | 21,374 | 3,816,114 | ||
Tencent Holdings Ltd. | 88,007 | 4,326,682 | ||
8,142,796 | ||||
LIFE & HEALTH INSURANCE—1.8% | ||||
Ping An Insurance Group Co. , of China Ltd. , Cl. H | 133,532 | 1,304,795 | ||
LIFE SCIENCES TOOLS & SERVICES—0.6% | ||||
Wuxi Biologics Cayman, Inc. * | 43,500 | 394,586 | ||
PACKAGED FOODS & MEATS—1.0% | ||||
China Mengniu Dairy Co. , Ltd. | 230,000 | 741,472 | ||
RESTAURANTS—0.5% | ||||
Yum China Holdings, Inc. | 9,098 | 389,030 | ||
WATER UTILITIES—0.6% | ||||
Beijing Enterprises Water Group Ltd. | 794,000 | 460,983 | ||
TOTAL CHINA | ||||
(Cost $16,610,650) | 21,536,138 | |||
GREECE—0.5% | ||||
INDUSTRIAL CONGLOMERATES—0.5% | ||||
Mytilineos Holdings SA* | 32,063 | 386,658 | ||
(Cost $384,252) | ||||
HONG KONG—1.1% | ||||
LIFE & HEALTH INSURANCE—1.1% | ||||
AIA Group Ltd. | 86,919 | 776,812 | ||
(Cost $531,440) | ||||
HUNGARY—0.8% | ||||
AIRLINES—0.8% | ||||
Wizz Air Holdings PLC. *,(a) | 13,345 | 585,945 | ||
(Cost $434,188) | ||||
INDIA—9.4% | ||||
ALUMINUM—0.6% | ||||
Hindalco Industries Ltd. | 116,149 | 408,646 |
- 44 -
THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—95.3% (CONT. ) | SHARES | VALUE | ||
INDIA—9.4% (CONT. ) | ||||
APPAREL ACCESSORIES & LUXURY GOODS—1.1% | ||||
Titan Co. , Ltd. | 56,480 | $ | 831,618 | |
AUTOMOBILE MANUFACTURERS—0.8% | ||||
Maruti Suzuki India Ltd. | 4,404 | 581,819 | ||
CONSTRUCTION MATERIALS—0.7% | ||||
Shree Cement Ltd. | 2,086 | 530,790 | ||
CONSUMER FINANCE—0.9% | ||||
Shriram Transport Finance Co. , Ltd. | 26,391 | 636,953 | ||
DATA PROCESSING & OUTSOURCED SERVICES—0.4% | ||||
Vakrangee Ltd. | 172,149 | 258,042 | ||
DIVERSIFIED BANKS—2.6% | ||||
HDFC Bank Ltd. | 36,445 | 1,099,010 | ||
Kotak Mahindra Bank Ltd. | 44,445 | 809,251 | ||
1,908,261 | ||||
INTERNET & DIRECT MARKETING RETAIL—0.6% | ||||
MakeMyTrip Ltd. * | 11,704 | 431,878 | ||
OIL & GAS REFINING & MARKETING—1.1% | ||||
Reliance Industries Ltd. | 53,976 | 779,489 | ||
TOBACCO—0.6% | ||||
ITC Ltd. | 105,528 | 447,230 | ||
TOTAL INDIA | ||||
(Cost $5,163,718) | 6,814,726 | |||
INDONESIA—1.9% | ||||
DIVERSIFIED BANKS—1.0% | ||||
Bank Central Asia Tbk PT | 480,200 | 759,332 | ||
SPECIALTY STORES—0.9% | ||||
Mitra Adiperkasa Tbk PT* | 1,038,300 | 615,704 | ||
TOTAL INDONESIA | ||||
(Cost $1,223,356) | 1,375,036 | |||
MALAYSIA—1.7% | ||||
CONSTRUCTION & ENGINEERING—0.7% | ||||
Gamuda Bhd | 373,100 | 487,428 | ||
DIVERSIFIED BANKS—1.0% | ||||
CIMB Group Holdings Bhd | 390,000 | 711,120 | ||
TOTAL MALAYSIA | ||||
(Cost $1,168,604) | 1,198,548 | |||
MEXICO—2.5% | ||||
COMMODITY CHEMICALS—0.9% | ||||
Mexichem SAB de CV | 210,400 | 657,746 | ||
CONSTRUCTION MATERIALS—0.7% | ||||
Cemex SAB de CV#* | 86,302 | 535,935 | ||
PACKAGED FOODS & MEATS—0.9% | ||||
Gruma SAB de CV, Cl. B | 50,305 | 615,272 | ||
TOTAL MEXICO | ||||
(Cost $1,994,865) | 1,808,953 |
- 45 -
THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—95.3% (CONT. ) | SHARES | VALUE | ||
PERU—0.8% | ||||
DIVERSIFIED BANKS—0.8% | ||||
Credicorp Ltd. | 2,477 | $ | 575,878 | |
(Cost $438,225) | ||||
PHILIPPINES—1.0% | ||||
DIVERSIFIED BANKS—1.0% | ||||
Metropolitan Bank & Trust Co. | 448,021 | 734,919 | ||
(Cost $721,627) | ||||
POLAND—0.5% | ||||
FOOD RETAIL—0.5% | ||||
Dino Polska SA* | 13,230 | 355,883 | ||
(Cost $362,036) | ||||
RUSSIA—2.7% | ||||
DIVERSIFIED BANKS—1.1% | ||||
Sberbank of Russia PJSC# | 54,479 | 805,541 | ||
FOOD RETAIL—0.6% | ||||
X5 Retail Group NV*,(b) | 15,270 | 434,540 | ||
INTERNET SOFTWARE & SERVICES—1.0% | ||||
Yandex NV, Cl. A* | 21,608 | 720,843 | ||
TOTAL RUSSIA | ||||
(Cost $1,633,700) | 1,960,924 | |||
SOUTH AFRICA—6.6% | ||||
APPAREL RETAIL—0.7% | ||||
Mr Price Group Ltd. | 22,985 | 504,262 | ||
CABLE & SATELLITE—3.0% | ||||
Naspers Ltd. , Cl. N | 8,800 | 2,143,353 | ||
DIVERSIFIED BANKS—1.4% | ||||
Barclays Africa Group Ltd. | 23,867 | 349,505 | ||
Capitec Bank Holdings Ltd. | 9,671 | 688,357 | ||
1,037,862 | ||||
FOOD DISTRIBUTORS—0.7% | ||||
Bid Corp. , Ltd. | 22,461 | 516,219 | ||
PHARMACEUTICALS—0.8% | ||||
Aspen Pharmacare Holdings Ltd. | 26,872 | 579,270 | ||
TOTAL SOUTH AFRICA | ||||
(Cost $3,956,057) | 4,780,966 | |||
SOUTH KOREA—13.4% | ||||
BIOTECHNOLOGY—1.4% | ||||
Hugel, Inc. * | 972 | 454,999 | ||
Seegene, Inc. * | 17,736 | 574,024 | ||
1,029,023 | ||||
COMMODITY CHEMICALS—0.9% | ||||
LG Chem Ltd. | 2,016 | 672,961 | ||
CONSTRUCTION MACHINERY & HEAVY TRUCKS—0.8% | ||||
Hyundai Heavy Industries Co. , Ltd. * | 5,320 | 587,320 |
- 46 -
THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—95.3% (CONT. ) | SHARES | VALUE | ||
SOUTH KOREA—13.4% (CONT. ) | ||||
DIVERSIFIED BANKS—1.2% | ||||
Shinhan Financial Group Co. , Ltd. | 20,214 | $ | 897,591 | |
DIVERSIFIED METALS & MINING—0.7% | ||||
Korea Zinc Co. , Ltd. | 1,192 | 481,111 | ||
ELECTRONIC COMPONENTS—0.5% | ||||
Samsung SDI Co. , Ltd. | 2,324 | 394,644 | ||
INTERNET SOFTWARE & SERVICES—0.7% | ||||
Cafe24 Corp. * | 4,112 | 519,476 | ||
LIFE & HEALTH INSURANCE—1.0% | ||||
Samsung Life Insurance Co. , Ltd. | 6,448 | 701,976 | ||
LIFE SCIENCES TOOLS & SERVICES—0.6% | ||||
Samsung Biologics Co. , Ltd. * | 965 | 437,091 | ||
PACKAGED FOODS & MEATS—0.9% | ||||
Orion Corp. | 5,479 | 634,278 | ||
SEMICONDUCTOR EQUIPMENT—1.4% | ||||
Koh Young Technology, Inc. | 7,042 | 666,866 | ||
Viatron Technologies, Inc. | 25,223 | 324,436 | ||
991,302 | ||||
SEMICONDUCTORS—0.9% | ||||
SK Hynix, Inc. | 8,270 | 648,601 | ||
SPECIALTY STORES—1.4% | ||||
Hotel Shilla Co. , Ltd. | 9,694 | 1,039,850 | ||
STEEL—1.0% | ||||
POSCO | 2,039 | 700,631 | ||
TOTAL SOUTH KOREA | ||||
(Cost $9,035,747) | 9,735,855 | |||
TAIWAN—10.6% | ||||
DIVERSIFIED BANKS—0.9% | ||||
CTBC Financial Holding Co. , Ltd. | 923,000 | 657,084 | ||
INDUSTRIAL MACHINERY—1.2% | ||||
Airtac International Group | 50,144 | 868,529 | ||
INTERNET & DIRECT MARKETING RETAIL—0.6% | ||||
momo. com, Inc. * | 51,000 | 422,217 | ||
LIFE & HEALTH INSURANCE—0.9% | ||||
Cathay Financial Holding Co. , Ltd. | 363,000 | 649,980 | ||
RESTAURANTS—1.0% | ||||
Gourmet Master Co. , Ltd. | 62,815 | 722,500 | ||
SEMICONDUCTOR EQUIPMENT—0.7% | ||||
Globalwafers Co. , Ltd. | 33,000 | 531,431 | ||
SEMICONDUCTORS—4.8% | ||||
Land Mark Optoelectronics Corp. | 37,000 | 344,480 | ||
Taiwan Semiconductor Manufacturing Co. , Ltd. | 359,000 | 2,729,782 | ||
Win Semiconductors Corp. | 55,000 | 411,676 | ||
3,485,938 |
- 47 -
THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
COMMON STOCKS—95.3% (CONT. ) | SHARES | VALUE | |||
TAIWAN—10.6% (CONT. ) | |||||
TECHNOLOGY DISTRIBUTORS—0.5% | |||||
Kingpak Technology, Inc. * | 53,000 | $ | 345,209 | ||
TOTAL TAIWAN | |||||
(Cost $7,762,532) | 7,682,888 | ||||
THAILAND—1.5% | |||||
COMMODITY CHEMICALS—1.0% | |||||
Indorama Ventures PCL | 391,800 | 743,291 | |||
HOTELS RESORTS & CRUISE LINES—0.5% | |||||
Central Plaza Hotel PCL* | 222,700 | 367,943 | |||
TOTAL THAILAND | |||||
(Cost $849,601) | 1,111,234 | ||||
TURKEY—0.6% | |||||
PACKAGED FOODS & MEATS—0.6% | �� | ||||
Ulker Biskuvi Sanayi AS* | 81,375 | 426,587 | |||
(Cost $420,774) | |||||
UNITED ARAB EMIRATES—1.6% | |||||
DIVERSIFIED BANKS—0.5% | |||||
Abu Dhabi Commercial Bank PJSC | 200,236 | 382,446 | |||
HEALTH CARE FACILITIES—1.1% | |||||
NMC Health PLC. | 16,496 | 805,987 | |||
TOTAL UNITED ARAB EMIRATES | |||||
(Cost $818,629) | 1,188,433 | ||||
TOTAL COMMON STOCKS | |||||
(Cost $58,727,064) | 69,122,505 | ||||
PREFERRED STOCKS—1.4% | SHARES | VALUE | |||
BRAZIL—1.4% | |||||
INTEGRATED OIL & GAS—1.4% | |||||
Petroleo Brasileiro SA* | 151,548 | 993,679 | |||
(Cost $690,851) | |||||
SPECIAL PURPOSE VEHICLE—0.1% | SHARES | VALUE | |||
POLAND—0.1% | |||||
CONSUMER FINANCE—0.1% | |||||
JS Kred SPV I, LLC.*,@,(c) | 43,241 | 52,988 | |||
(Cost $43,241) | |||||
Total Investments | |||||
(Cost $59,461,156) | 96.8 | % | $ | 70,169,172 | |
Unaffiliated Securities (Cost $59,461,156) | 70,169,172 | ||||
Other Assets in Excess of Liabilities | 3.2 | % | 2,331,743 | ||
NET ASSETS | 100.0 | % | $ | 72,500,915 |
# American Depositary Receipts.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities may be sold prior to their maturity only to qualified
institutional buyers. These securities are however deemed to be liquid and represent 0.8% of the net assets of the Fund.
(b) Global Depositary Receipts.
(c) Security is valued in good faith at fair value determined using significant unobservable inputs pursuant to procedures established by the
Board.
* Non-income producing security.
- 48 -
THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND
Schedule of Investments April 30, 2018 (Unaudited) (Continued)
@ Restricted security - Investment in security not registered under the Securities Act of 1933. The investment is deemed to not be liquid
and may be sold only to qualified buyers.
% of net assets | % of net assets | |||||||||
Acquisition | Acquisition | (Acquisition | Market | as of | ||||||
Security | Date(s) | Cost | Date) | Value | 4/30/2018 | |||||
JS Kred SPV I, LLC. | 06/26/15 | $ | 43,241 | 0.15 | % | $ | 52,988 | 0.07 | % | |
Total | $ | 52,988 | 0.07 | % | ||||||
See Notes to Financial Statements.
- 49 -
THE ALGER FUNDS II
Statement of Assets and Liabilities April 30, 2018 (Unaudited)
Alger | ||||||
Alger Spectra | Responsible | |||||
Fund | Investing Fund | |||||
ASSETS: | ||||||
Investments in unaffiliated securities, at value (Identified cost | ||||||
below)* see accompanying schedules of investments | $ | 5,859,482,729 | $ | 59,054,253 | ||
Investments in affiliated securities, at value (Identified cost | ||||||
below)** see accompanying schedules of investments | 8,736,036 | — | ||||
Cash and cash equivalents | 224,366,287 | 1,267,782 | ||||
Collateral held for short sales | 79,457,640 | — | ||||
Receivable for investment securities sold | 56,945,800 | — | ||||
Receivable for shares of beneficial interest sold | 5,651,863 | 32,380 | ||||
Dividends and interest receivable | 1,969,271 | 42,056 | ||||
Receivable from Investment Manager | — | 6,766 | ||||
Prepaid expenses | 534,526 | 87,978 | ||||
Total Assets | 6,237,144,152 | 60,491,215 | ||||
LIABILITIES: | ||||||
Securities sold short, at value ‡ | 164,131,818 | — | ||||
Payable for investment securities purchased | 52,253,756 | — | ||||
Payable for shares of beneficial interest redeemed | 7,211,052 | 77,261 | ||||
Accrued investment advisory fees | 4,015,961 | 37,517 | ||||
Accrued transfer agent fees | 1,446,315 | 27,112 | ||||
Accrued distribution fees | 1,119,758 | 14,348 | ||||
Accrued administrative fees | 144,036 | 1,453 | ||||
Accrued shareholder administrative fees | 64,334 | 735 | ||||
Dividends payable | 26,801 | — | ||||
Accrued other expenses | 563,244 | 49,315 | ||||
Total Liabilities | 230,977,075 | 207,741 | ||||
NET ASSETS | $ | 6,006,167,077 | $ | 60,283,474 | ||
NET ASSETS CONSIST OF: | ||||||
Paid in capital (par value of $. 001 per share) | 4,027,421,690 | 33,322,360 | ||||
Undistributed net investment income (accumulated loss) | (3,711,705 | ) | (144,751 | ) | ||
Undistributed net realized gain | 412,987,047 | 2,281,714 | ||||
Net unrealized appreciation on investments | 1,569,470,045 | 24,824,151 | ||||
NET ASSETS | $ | 6,006,167,077 | $ | 60,283,474 | ||
* Identified cost | $ | 4,291,833,753(a) | $ | 34,228,835 | (b) | |
** Identified cost | $ | 13,104,054(a) | $ | — | ||
‡ Proceeds received on short sales | $ | 170,422,149 | $ | — | ||
See Notes to Financial Statements. |
- 50 -
THE ALGER FUNDS II
Statement of Assets and Liabilities April 30, 2018 (Unaudited) (Continued)
Alger | ||||
Alger Spectra | Responsible | |||
Fund | Investing Fund | |||
NET ASSETS BY CLASS: | ||||
Class A | $ | 1,343,647,757 | $ | 30,513,231 |
Class C | $ | 760,183,046 | $ | 5,906,354 |
Class I | $ | 726,256,200 | $ | 11,294,428 |
Class Z | $ | 3,176,080,074 | $ | 12,569,461 |
SHARES OF BENEFICIAL INTEREST OUTSTANDING — NOTE 6: | ||||
Class A | 62,546,210 | 3,007,980 | ||
Class C | 38,552,429 | 638,883 | ||
Class I | 33,473,546 | 1,115,269 | ||
Class Z | 144,332,276 | 1,229,816 | ||
NET ASSET VALUE PER SHARE: | ||||
Class A — Net Asset Value Per Share Class A | $ | 21.48 | $ | 10.14 |
Class A — Offering Price Per Share | ||||
(includes a 5.25% sales charge) | $ | 22.67 | $ | 10.71 |
Class C — Net Asset Value Per Share Class C | $ | 19.72 | $ | 9.24 |
Class I — Net Asset Value Per Share Class I | $ | 21.70 | $ | 10.13 |
Class Z — Net Asset Value Per Share Class Z | $ | 22.01 | $ | 10.22 |
See Notes to Financial Statements.
(a) At April 30, 2018, the net unrealized appreciation on investments, based on cost for federal income tax purposes of
$4,178,916,420, amounted to $1,525,170,527 which consisted of aggregate gross unrealized appreciation of $1,631,367,286
and aggregate gross unrealized depreciation of $106,196,759.
(b) At April 30, 2018, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $34,297,612,
amounted to $24,756,641 which consisted of aggregate gross unrealized appreciation of $25,606,942 and aggregate gross
unrealized depreciation of $850,301.
- 51 -
THE ALGER FUNDS II
Statement of Assets and Liabilities April 30, 2018 (Unaudited) (Continued)
Alger Dynamic | ||||||
Opportunities | Alger Emerging | |||||
Fund | Markets Fund | |||||
ASSETS: | ||||||
Investments in unaffiliated securities, at value (Identified cost | ||||||
below)* see accompanying schedules of investments | $ | 80,858,832 | $ | 70,169,172 | ||
Investments in affiliated securities, at value (Identified cost | ||||||
below)** see accompanying schedules of investments | 124,254 | — | ||||
Cash and cash equivalents | 9,237,332 | 1,568,705 | ||||
Collateral held for short sales | 15,662,502 | — | ||||
Foreign cash † | — | 625,031 | ||||
Receivable for investment securities sold | 6,618,610 | 65,664 | ||||
Receivable for shares of beneficial interest sold | 67,239 | 244,275 | ||||
Dividends and interest receivable | 16,040 | 26,654 | ||||
Receivable for escrow, at value (Identified cost below)*** | 147,206 | — | ||||
Prepaid expenses | 67,760 | 122,782 | ||||
Total Assets | 112,799,775 | 72,822,283 | ||||
LIABILITIES: | ||||||
Securities sold short, at value ‡ | 25,076,640 | — | ||||
Payable for investment securities purchased | 1,517,631 | 134,641 | ||||
Payable for shares of beneficial interest redeemed | 3,172 | 52,684 | ||||
Accrued investment advisory fees | 91,002 | 22,324 | ||||
Due to investment advisor | — | 5,479 | ||||
Accrued transfer agent fees | 17,351 | 16,383 | ||||
Accrued distribution fees | 11,282 | 11,034 | ||||
Accrued administrative fees | 2,085 | 1,772 | ||||
Accrued shareholder administrative fees | 952 | 722 | ||||
Dividends payable | 9,283 | — | ||||
Accrued other expenses | 60,001 | 76,329 | ||||
Total Liabilities | 26,789,399 | 321,368 | ||||
NET ASSETS | $ | 86,010,376 | $ | 72,500,915 | ||
NET ASSETS CONSIST OF: | ||||||
Paid in capital (par value of $. 001 per share) | 74,542,661 | 64,793,803 | ||||
Undistributed net investment income (accumulated loss) | (858,017 | ) | (2,332,256 | ) | ||
Undistributed net realized gain (accumulated realized loss) | 1,520,379 | (659,751 | ) | |||
Net unrealized appreciation on investments | 10,805,353 | 10,699,119 | ||||
NET ASSETS | $ | 86,010,376 | $ | 72,500,915 | ||
* Identified cost | $ | 68,476,677(a) | $ | 59,461,156 | (b) | |
** Identified cost | $ | 186,381(a) | $ | — | ||
*** Identified cost escrow receivable | $ | 23,147 | $ | — | ||
† Cost of foreign cash | $ | — | $ | 616,333 | ||
‡ Proceeds received on short sales | $ | 23,440,016 | $ | — |
See Notes to Financial Statements.
- 52 -
THE ALGER FUNDS II
Statement of Assets and Liabilities April 30, 2018 (Unaudited) (Continued)
Alger Dynamic | ||||
Opportunities | Alger Emerging | |||
Fund | Markets Fund | |||
NET ASSETS BY CLASS: | ||||
Class A | $ | 27,175,928 | $ | 8,766,144 |
Class C | $ | 5,808,360 | $ | 4,572,961 |
Class I | $ | — | $ | 22,140,579 |
Class Y | $ | — | $ | 5,272,126 |
Class Y-2 | $ | — | $ | 144,941 |
Class Z | $ | 53,026,088 | $ | 31,604,164 |
SHARES OF BENEFICIAL INTEREST OUTSTANDING — NOTE 6: | ||||
Class A | 2,031,263 | 794,310 | ||
Class C | 463,378 | 432,743 | ||
Class I | — | 2,018,276 | ||
Class Y | — | 476,276 | ||
Class Y-2 | — | 13,124 | ||
Class Z | 3,874,249 | 2,845,205 | ||
NET ASSET VALUE PER SHARE: | ||||
Class A — Net Asset Value Per Share Class A | $ | 13.38 | $ | 11.04 |
Class A — Offering Price Per Share | ||||
(includes a 5.25% sales charge) | $ | 14.12 | $ | 11.65 |
Class C — Net Asset Value Per Share Class C | $ | 12.53 | $ | 10.57 |
Class I — Net Asset Value Per Share Class I | $ | — | $ | 10.97 |
Class Y — Net Asset Value Per Share Class Y | $ | — | $ | 11.07 |
Class Y-2 — Net Asset Value Per Share Class Y-2 | $ | — | $ | 11.04 |
Class Z — Net Asset Value Per Share Class Z | $ | 13.69 | $ | 11.11 |
See Notes to Financial Statements.
(a) At April 30, 2018, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $45,835,055,
amounted to $10,071,391 which consisted of aggregate gross unrealized appreciation of $15,463,957 and aggregate gross
unrealized depreciation of $5,392,566.
(b) At April 30, 2018, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $61,658,611,
amounted to $8,510,561 which consisted of aggregate gross unrealized appreciation of $13,545,982 and aggregate gross
unrealized depreciation of $5,035,421.
- 53 -
THE ALGER FUNDS II
Statement of Operations for the six months ended April 30, 2018 (Unaudited)
Alger | ||||||
Alger Spectra | Responsible | |||||
Fund | Investing Fund | |||||
INCOME: | ||||||
Dividends (net of foreign withholding taxes*) | $ | 30,657,254 | $ | 368,289 | ||
Interest from unaffiliated securities | 324,490 | 3,753 | ||||
Total Income | 30,981,744 | 372,042 | ||||
EXPENSES: | ||||||
Advisory fees — Note 3(a) | 22,870,264 | 219,207 | ||||
Distribution fees — Note 3(c) | ||||||
Class A | 1,782,744 | 39,743 | ||||
Class C | 3,849,149 | 30,094 | ||||
Class I | 962,782 | 15,618 | ||||
Shareholder administrative fees — Note 3(f) | 370,483 | 4,316 | ||||
Administration fees — Note 3(b) | 822,558 | 8,490 | ||||
Dividends on securities sold short | 818,374 | — | ||||
Custodian fees | 134,666 | 24,481 | ||||
Interest expenses | 22,143 | 65 | ||||
Borrowing fees on short sales | 1,785,873 | — | ||||
Transfer agent fees and expenses — Note 3(f) | 1,456,165 | 27,381 | ||||
Printing fees | 396,825 | 8,492 | ||||
Professional fees | 117,753 | 13,325 | ||||
Registration fees | 97,389 | 31,977 | ||||
Trustee fees — Note 3(g) | 111,088 | 1,153 | ||||
Fund accounting fees | 403,923 | 6,534 | ||||
Miscellaneous | 165,090 | 7,154 | ||||
Total Expenses | 36,167,269 | 438,030 | ||||
Less, expense reimbursements/waivers — Note 3(a) | — | (23,264 | ) | |||
Net Expenses | 36,167,269 | 414,766 | ||||
NET INVESTMENT LOSS | (5,185,525 | ) | (42,724 | ) |
- 54 -
THE ALGER FUNDS II
Statement of Operations for the six months ended April 30, 2018 (Unaudited) (Continued)
Alger | |||||||
Alger Spectra | Responsible | ||||||
Fund | Investing Fund | ||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | |||||||
Net realized gain on unaffiliated investments | 479,210,286 | 2,430,622 | |||||
Net realized (loss) on affiliated investments | (4,378,824 | ) | (78,422 | ) | |||
Net realized gain (loss) on foreign currency transactions | (30,043 | ) | 2 | ||||
Net realized (loss) on short sales | (15,888,849 | ) | — | ||||
Net change in unrealized (depreciation) on unaffiliated | |||||||
investments | (93,720,251 | ) | (292,986 | ) | |||
Net change in unrealized appreciation on affiliated | |||||||
investments | 4,029,383 | 78,422 | |||||
Net change in unrealized (depreciation) on foreign currency | (13,364 | ) | — | ||||
Net change in unrealized appreciation on short sales | 12,872,849 | — | |||||
Net realized and unrealized gain on investments and foreign | |||||||
currency | 382,081,187 | 2,137,638 | |||||
NET INCREASE IN NET ASSETS RESULTING FROM | |||||||
OPERATIONS | $ | 376,895,662 | $ | 2,094,914 | |||
* Foreign withholding taxes | $ | — | $ | 57 | |||
See Notes to Financial Statements. |
- 55 -
THE ALGER FUNDS II
Statement of Operations for the six months ended April 30, 2018 (Unaudited) (Continued)
Alger Dynamic | ||||||
Opportunities | Alger Emerging | |||||
Fund | Markets Fund | |||||
INCOME: | ||||||
Dividends (net of foreign withholding taxes*) | $ | 179,340 | $ | 273,767 | ||
Interest from unaffiliated securities | 92,816 | 5,321 | ||||
Total Income | 272,156 | 279,088 | ||||
EXPENSES: | ||||||
Advisory fees — Note 3(a) | 505,809 | 282,865 | ||||
Distribution fees — Note 3(c) | ||||||
Class A | 35,235 | 10,406 | ||||
Class C | 30,455 | 21,006 | ||||
Class I | — | 28,368 | ||||
Shareholder administrative fees — Note 3(f) | 5,329 | 3,950 | ||||
Administration fees — Note 3(b) | 11,591 | 9,744 | ||||
Dividends on securities sold short | 228,035 | — | ||||
Custodian fees | 30,354 | 73,045 | ||||
Interest expenses | 398 | 299 | ||||
Borrowing fees on short sales | 115,594 | — | ||||
Transfer agent fees and expenses — Note 3(f) | 16,544 | 19,586 | ||||
Printing fees | 7,556 | 9,667 | ||||
Professional fees | 27,674 | 15,271 | ||||
Registration fees | 25,712 | 45,833 | ||||
Trustee fees — Note 3(g) | 1,579 | 1,354 | ||||
Fund accounting fees | 7,306 | 9,108 | ||||
Miscellaneous | 7,436 | 16,466 | ||||
Total Expenses | 1,056,607 | 546,968 | ||||
Less, expense reimbursements/waivers — Note 3(a) | — | (76,054 | ) | |||
Net Expenses | 1,056,607 | 470,914 | ||||
NET INVESTMENT LOSS | (784,451 | ) | (191,826 | ) |
- 56 -
THE ALGER FUNDS II
Statement of Operations for the six months ended April 30, 2018 (Unaudited) (Continued)
Alger Dynamic | ||||||
Opportunities | Alger Emerging | |||||
Fund | Markets Fund | |||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS, ESCROW RECEIVABLE AND | ||||||
FOREIGN CURRENCY: | ||||||
Net realized gain on unaffiliated investments and purchased | ||||||
options | 5,356,706 | 2,516,307 | ||||
Net realized gain on foreign currency transactions | 2,443 | 11,422 | ||||
Net realized (loss) on options written | (24,764 | ) | — | |||
Net realized (loss) on short sales | (3,274,923 | ) | — | |||
Net change in unrealized appreciation (depreciation) on | ||||||
unaffiliated investments, purchased options and escrow | ||||||
receivable | 521,388 | (1,570,704 | ) | |||
Net change in unrealized (depreciation) on affiliated | ||||||
investments | (4,970 | ) | — | |||
Net change in unrealized (depreciation) on foreign currency | (1,522 | ) | (10,180 | ) | ||
Net change in unrealized (depreciation) on short sales | (643,128 | ) | — | |||
Net realized and unrealized gain on investments, purchased | ||||||
options, escrow receivable and foreign currency | 1,931,230 | 946,845 | ||||
NET INCREASE IN NET ASSETS RESULTING FROM | ||||||
OPERATIONS | $ | 1,146,779 | $ | 755,019 | ||
* Foreign withholding taxes | $ | 2,039 | $ | 44,071 | ||
See Notes to Financial Statements. |
- 57 -
THE ALGER FUNDS II
Statements of Changes in Net Assets (Unaudited)
Alger Spectra Fund | |||||||
For the | For the | ||||||
Six Months Ended | Year Ended | ||||||
April 30, 2018 | October 31, 2017 | ||||||
Net investment loss | $ | (5,185,525 | ) | $ | (5,791,121 | ) | |
Net realized gain on investments and foreign currency | 458,912,570 | 391,367,272 | |||||
Net change in unrealized appreciation (depreciation) on | |||||||
investments and foreign currency | (76,831,383 | ) | 993,813,082 | ||||
Net increase in net assets resulting from operations | 376,895,662 | 1,379,389,233 | |||||
Dividends and distributions to shareholders from: | |||||||
Net realized gains: | |||||||
Class A | (83,234,679 | ) | (32,000,028 | ) | |||
Class C | (47,913,069 | ) | (16,722,585 | ) | |||
Class I | (45,052,258 | ) | (16,533,672 | ) | |||
Class Z | (165,844,677 | ) | (37,254,788 | ) | |||
Total dividends and distributions to shareholders | (342,044,683 | ) | (102,511,073 | ) | |||
Increase (decrease) from shares of beneficial interest transactions: | |||||||
Class A | (329,623,180 | ) | (354,511,000 | ) | |||
Class C | (2,957,045 | ) | (222,859,098 | ) | |||
Class I | (69,469,779 | ) | (620,092,953 | ) | |||
Class Z | 508,290,862 | 609,300,379 | |||||
Net increase (decrease) from shares of beneficial interest | |||||||
transactions — Note 6 | 106,240,858 | (588,162,672 | ) | ||||
Total increase | 141,091,837 | 688,715,488 | |||||
Net Assets: | |||||||
Beginning of period | 5,865,075,240 | 5,176,359,752 | |||||
END OF PERIOD | $ | 6,006,167,077 | $ | 5,865,075,240 | |||
Undistributed net investment income (accumulated loss) | $ | (3,711,705 | ) | $ | 1,473,820 |
See Notes to Financial Statements.
- 58 -
THE ALGER FUNDS II
Statements of Changes in Net Assets (Unaudited) (Continued)
Alger Responsible Investing Fund | ||||||||
For the | For the | |||||||
Six Months Ended | Year Ended | |||||||
April 30, 2018 | October 31, 2017 | |||||||
Net investment loss | $ | (42,724 | ) | $ | (31,751 | ) | ||
Net realized gain on investments and foreign currency | 2,352,202 | 8,381,985 | ||||||
Net change in unrealized appreciation (depreciation) on | ||||||||
investments and foreign currency | (214,564 | ) | 6,244,557 | |||||
Net increase in net assets resulting from operations | 2,094,914 | 14,594,791 | ||||||
Dividends and distributions to shareholders from: | ||||||||
Net realized gains: | ||||||||
Class A | (4,311,706 | ) | (1,219,015 | ) | ||||
Class C | (879,831 | ) | (226,591 | ) | ||||
Class I | (1,772,826 | ) | (1,101,010 | ) | ||||
Class Z | (1,504,625 | ) | (33,577 | ) | ||||
Total dividends and distributions to shareholders | (8,468,988 | ) | (2,580,193 | ) | ||||
Increase (decrease) from shares of beneficial interest transactions: | ||||||||
Class A | (142,725 | ) | (4,403,275 | ) | ||||
Class C | 397,493 | (603,084 | ) | |||||
Class I | (507,086 | ) | (18,147,746 | ) | ||||
Class Z | 4,698,783 | 7,888,248 | ||||||
Net increase (decrease) from shares of beneficial interest | ||||||||
transactions — Note 6 | 4,446,465 | (15,265,857 | ) | |||||
Total decrease | (1,927,609 | ) | (3,251,259 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 62,211,083 | 65,462,342 | ||||||
END OF PERIOD | $ | 60,283,474 | $ | 62,211,083 | ||||
Undistributed net investment income (accumulated loss) | $ | (144,751 | ) | $ | (102,027 | ) |
See Notes to Financial Statements.
- 59 -
THE ALGER FUNDS II
Statements of Changes in Net Assets (Unaudited) (Continued)
Alger Dynamic Opportunities Fund | |||||||
For the | For the | ||||||
Six Months Ended | Year Ended | ||||||
April 30, 2018 | October 31, 2017 | ||||||
Net investment loss | $ | (784,451 | ) | $ | (1,205,902 | ) | |
Net realized gain on investments, purchased options and foreign | |||||||
currency | 2,059,462 | 9,509,798 | |||||
Net change in unrealized appreciation (depreciation) on | |||||||
investments, purchased options, escrow receivable and | |||||||
foreign currency | (128,232 | ) | 7,564,063 | ||||
Net increase in net assets resulting from operations | 1,146,779 | 15,867,959 | |||||
Dividends and distributions to shareholders from: | |||||||
Net realized gains: | |||||||
Class A | (1,740,187 | ) | (81,035 | ) | |||
Class C | (430,863 | ) | (21,772 | ) | |||
Class Z | (2,999,574 | ) | (145,260 | ) | |||
Total dividends and distributions to shareholders | (5,170,624 | ) | (248,067 | ) | |||
Increase (decrease) from shares of beneficial interest transactions: | |||||||
Class A | (291,874 | ) | (6,271,218 | ) | |||
Class C | (296,508 | ) | (1,844,644 | ) | |||
Class Z | 6,656,571 | (5,635,965 | ) | ||||
Net increase (decrease) from shares of beneficial interest | |||||||
transactions — Note 6 | 6,068,189 | (13,751,827 | ) | ||||
Total increase | 2,044,344 | 1,868,065 | |||||
Net Assets: | |||||||
Beginning of period | 83,966,032 | 82,097,967 | |||||
END OF PERIOD | $ | 86,010,376 | $ | 83,966,032 | |||
Undistributed net investment income (accumulated loss) | $ | (858,017 | ) | $ | (73,566 | ) |
See Notes to Financial Statements.
- 60 -
THE ALGER FUNDS II
Statements of Changes in Net Assets (Unaudited) (Continued)
Alger Emerging Markets Fund | |||||||
For the | For the | ||||||
Six Months Ended | Year Ended | ||||||
April 30, 2018 | October 31, 2017 | ||||||
Net investment income (loss) | $ | (191,826 | ) | $ | 69,463 | ||
Net realized gain on investments and foreign currency | 2,527,729 | 2,327,411 | |||||
Net change in unrealized appreciation (depreciation) on | |||||||
investments and foreign currency | (1,580,884 | ) | 8,172,025 | ||||
Net increase in net assets resulting from operations | 755,019 | 10,568,899 | |||||
Dividends and distributions to shareholders from: | |||||||
Net investment income: | |||||||
Class A | (280,683 | ) | — | ||||
Class C | (117,567 | ) | — | ||||
Class I | (829,119 | ) | — | ||||
Class Y | (191,397 | ) | — | ||||
Class Y-2 | (5,738 | ) | — | ||||
Class Z | (1,053,169 | ) | — | ||||
Total dividends and distributions to shareholders | (2,477,673 | ) | — | ||||
Increase (decrease) from shares of beneficial interest transactions: | |||||||
Class A | 1,857,544 | (91,175 | ) | ||||
Class C | 1,089,399 | 99,796 | |||||
Class I | (257,956 | ) | 5,210,363 | ||||
Class Y | 191,397 | 5,002,619 | |||||
Class Y-2 | 5,738 | — | |||||
Class Z | 4,472,606 | 5,492,511 | |||||
Net increase from shares of beneficial interest transactions — | |||||||
Note 6 | 7,358,728 | 15,714,114 | |||||
Total increase | 5,636,074 | 26,283,013 | |||||
Net Assets: | |||||||
Beginning of period | 66,864,841 | 40,581,828 | |||||
END OF PERIOD | $ | 72,500,915 | $ | 66,864,841 | |||
Undistributed net investment income (accumulated loss) | $ | (2,332,256 | ) | $ | 337,243 |
See Notes to Financial Statements.
- 61 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Spectra Fund | Class A | |||||||||||||||||||||||
Six months | ||||||||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | ||||||||||||||||||
Net asset value, beginning of period | $ | 21.41 | $ | 16.91 | $ | 18.45 | $ | 19.13 | $ | 17.37 | $ | 13.82 | ||||||||||||
INCOME FROM INVESTMENT | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss)(ii) | (0.02 | ) | (0.02 | ) | (0.01 | ) | (0.04 | ) | (0.06 | ) | 0.05 | |||||||||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||||||||
on investments | 1.35 | 4.86 | (0.03 | ) | 1.74 | 2.82 | 3.91 | |||||||||||||||||
Total from investment operations | 1.33 | 4.84 | (0.04 | ) | 1.70 | 2.76 | 3.96 | |||||||||||||||||
Dividends from net investment income | – | – | – | – | – | (0.09 | ) | |||||||||||||||||
Distributions from net realized gains | (1.26 | ) | (0.34 | ) | (1.50 | ) | (2.38 | ) | (1.00 | ) | (0.32 | ) | ||||||||||||
Net asset value, end of period | $ | 21.48 | $ | 21.41 | $ | 16.91 | $ | 18.45 | $ | 19.13 | $ | 17.37 | ||||||||||||
Total return(iii) | 6.47 | % | 29.19 | % | (0.36 | )% | 9.66 | % | 16.56 | % | 29.29 | % | ||||||||||||
RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||||||||
Net assets, end of period (000's | ||||||||||||||||||||||||
omitted) | $ | 1,343,648 | $ | 1,662,441 | $ | 1,635,495 | $ | 2,243,901 | $ | 1,846,479 | $ | 1,866,317 | ||||||||||||
Ratio of gross expenses to average | ||||||||||||||||||||||||
net assets | 1.28 | %(iv) | 1.28 | %(v) | 1.31 | %(vi) | 1.34 | %(vii) | 1.52 | %(viii) | 1.52 | %(ix) | ||||||||||||
Ratio of net expenses to average net | ||||||||||||||||||||||||
assets | 1.28 | % | 1.28 | % | 1.31 | % | 1.34 | % | 1.52 | % | 1.52 | % | ||||||||||||
Ratio of net investment income (loss) to | ||||||||||||||||||||||||
average net assets | (0.22 | )% | (0.13 | )% | (0.05 | )% | (0.24 | )% | (0.35 | )% | 0.35 | % | ||||||||||||
Portfolio turnover rate | 36.47 | % | 80.08 | % | 108.51 | % | 143.64 | % | 149.01 | % | 113.69 | % | ||||||||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Does not reflect the effect of sales charges, if applicable.
(iv) Includes 0.04% related to dividend expense on short positions and interest expense for the period ended 4/30/18.
(v) Includes 0.07% related to dividend expense on short positions and interest expense for the period ended 10/31/17.
(vi) Includes 0.10% related to dividend expense on short positions and interest expense for the period ended 10/31/16.
(vii) Includes 0.15% related to dividend expense on short positions and interest expense for the period ended 10/31/15.
(viii) Includes 0.27% related to dividend expense on short positions and interest expense for the period ended 10/31/14.
(ix) Includes 0.22% related to dividend expense on short positions and interest expense for the period ended 10/31/13.
- 62 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Spectra Fund | Class C | |||||||||||||||||
Six months | ||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | ||||||||||||
Net asset value, beginning of period | $ | 19.82 | $ | 15.80 | $ | 17.46 | $ | 18.35 | $ | 16.81 | $ | 13.43 | ||||||
INCOME FROM INVESTMENT | ||||||||||||||||||
OPERATIONS: | ||||||||||||||||||
Net investment loss(ii) | (0.10 | ) | (0.15 | ) | (0.13 | ) | (0.18 | ) | (0.19 | ) | (0.07 | ) | ||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||
on investments | 1.26 | 4.51 | (0.03 | ) | 1.67 | 2.73 | 3.79 | |||||||||||
Total from investment operations | 1.16 | 4.36 | (0.16 | ) | 1.49 | 2.54 | 3.72 | |||||||||||
Dividends from net investment income | – | – | – | – | – | (0.02 | ) | |||||||||||
Distributions from net realized gains | (1.26 | ) | (0.34 | ) | (1.50 | ) | (2.38 | ) | (1.00 | ) | (0.32 | ) | ||||||
Net asset value, end of period | $ | 19.72 | $ | 19.82 | $ | 15.80 | $ | 17.46 | $ | 18.35 | $ | 16.81 | ||||||
Total return(iii) | 6.12 | % | 28.18 | % | (1.12 | )% | 8.84 | % | 15.69 | % | 28.38 | % | ||||||
RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||
Net assets, end of period (000's | ||||||||||||||||||
omitted) | $ | 760,183 | $ | 765,136 | $ | 815,694 | $ | 899,108 | $ | 650,438 | $ | 458,750 | ||||||
Ratio of gross expenses to average | ||||||||||||||||||
net assets | 2.02 | %(iv) | 2.04 | %(v) | 2.07 | %(vi) | 2.11 | %(vii) | 2.27 | %(viii) | 2.28 | %(ix) | ||||||
Ratio of net expenses to average net | ||||||||||||||||||
assets | 2.02 | % | 2.04 | % | 2.07 | % | 2.11 | % | 2.27 | % | 2.28 | % | ||||||
Ratio of net investment loss to average | ||||||||||||||||||
net assets | (0.99 | )% | (0.89 | )% | (0.82 | )% | (1.01 | )% | (1.12 | )% | (0.46 | )% | ||||||
Portfolio turnover rate | 36.47 | % | 80.08 | % | 108.51 | % | 143.64 | % | 149.01 | % | 113.69 | % | ||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Does not reflect the effect of sales charges, if applicable.
(iv) Includes 0.04% related to dividend expense on short positions and interest expense for the period ended 4/30/18.
(v) Includes 0.07% related to dividend expense on short positions and interest expense for the period ended 10/31/17.
(vi) Includes 0.10% related to dividend expense on short positions and interest expense for the period ended 10/31/16.
(vii) Includes 0.15% related to dividend expense on short positions and interest expense for the period ended 10/31/15.
(viii) Includes 0.28% related to dividend expense on short positions and interest expense for the period ended 10/31/14.
(ix) Includes 0.22% related to dividend expense on short positions and interest expense for the period ended 10/31/13.
- 63 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Spectra Fund | Class I | ||||||||||||||||||||
Six months | |||||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | ||||||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | |||||||||||||||
Net asset value, beginning of period | $ | 21.61 | $ | 17.06 | $ | 18.60 | $ | 19.27 | $ | 17.48 | $ | 13.92 | |||||||||
INCOME FROM INVESTMENT | |||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||
Net investment income (loss)(ii) | (0.02 | ) | (0.02 | ) | (0.01 | ) | (0.05 | ) | (0.06 | ) | 0.06 | ||||||||||
Net realized and unrealized gain (loss) | |||||||||||||||||||||
on investments | 1.37 | 4.91 | (0.03 | ) | 1.76 | 2.85 | 3.91 | ||||||||||||||
Total from investment operations | 1.35 | 4.89 | (0.04 | ) | 1.71 | 2.79 | 3.97 | ||||||||||||||
Dividends from net investment income | – | – | – | – | – | (0.09 | ) | ||||||||||||||
Distributions from net realized gains | (1.26 | ) | (0.34 | ) | (1.50 | ) | (2.38 | ) | (1.00 | ) | (0.32 | ) | |||||||||
Net asset value, end of period | $ | 21.70 | $ | 21.61 | $ | 17.06 | $ | 18.60 | $ | 19.27 | $ | 17.48 | |||||||||
Total return(iii) | 6.50 | % | 29.23 | % | (0.35 | )% | 9.65 | % | 16.63 | % | 29.30 | % | |||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||
Net assets, end of period (000's | |||||||||||||||||||||
omitted) | $ | 726,256 | $ | 791,060 | $ | 1,222,783 | $ | 1,251,395 | $ | 1,030,304 | $ | 736,036 | |||||||||
Ratio of gross expenses to average | |||||||||||||||||||||
net assets | 1.26 | %(iv) | 1.27 | %(v) | 1.29 | %(vi) | 1.35 | %(vii) | 1.50 | %(viii) | 1.50 | %(ix) | |||||||||
Ratio of net expenses to average net | |||||||||||||||||||||
assets | 1.26 | % | 1.27 | % | 1.29 | % | 1.35 | % | 1.50 | % | 1.50 | % | |||||||||
Ratio of net investment income (loss) to | |||||||||||||||||||||
average net assets | (0.21 | )% | (0.09 | )% | (0.05 | )% | (0.25 | )% | (0.35 | )% | 0.36 | % | |||||||||
Portfolio turnover rate | 36.47 | % | 80.08 | % | 108.51 | % | 143.64 | % | 149.01 | % | 113.69 | % | |||||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Does not reflect the effect of sales charges, if applicable.
(iv) Includes 0.04% related to dividend expense on short positions and interest expense for the period ended 4/30/18.
(v) Includes 0.07% related to dividend expense on short positions and interest expense for the period ended 10/31/17.
(vi) Includes 0.10% related to dividend expense on short positions and interest expense for the period ended 10/31/16.
(vii) Includes 0.15% related to dividend expense on short positions and interest expense for the period ended 10/31/15.
(viii) Includes 0.28% related to dividend expense on short positions and interest expense for the period ended 10/31/14.
(ix) Includes 0.22% related to dividend expense on short positions and interest expense for the period ended 10/31/13.
- 64 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Spectra Fund | Class Z | |||||||||||||||||||||
Six months | ||||||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | ||||||||||||||||
Net asset value, beginning of period | $ | 21.87 | $ | 17.21 | $ | 18.70 | $ | 19.30 | $ | 17.46 | $ | 13.90 | ||||||||||
INCOME FROM INVESTMENT | ||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||
Net investment income (loss)(ii) | 0.01 | 0.03 | 0.04 | 0.01 | (0.02 | ) | 0.10 | |||||||||||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||||||
on investments | 1.39 | 4.97 | (0.03 | ) | 1.77 | 2.86 | 3.91 | |||||||||||||||
Total from investment operations | 1.40 | 5.00 | 0.01 | 1.78 | 2.84 | 4.01 | ||||||||||||||||
Dividends from net investment income | – | – | – | – | – | (0.13 | ) | |||||||||||||||
Distributions from net realized gains | (1.26 | ) | (0.34 | ) | (1.50 | ) | (2.38 | ) | (1.00 | ) | (0.32 | ) | ||||||||||
Net asset value, end of period | $ | 22.01 | $ | 21.87 | $ | 17.21 | $ | 18.70 | $ | 19.30 | $ | 17.46 | ||||||||||
Total return(iii) | 6.66 | % | 29.62 | % | (0.06 | )% | 9.98 | % | 17.01 | % | 29.68 | % | ||||||||||
RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||||||
Net assets, end of period (000's | ||||||||||||||||||||||
omitted) | $ | 3,176,080 | $ | 2,646,438 | $ | 1,502,388 | $ | 1,193,803 | $ | 928,600 | $ | 367,709 | ||||||||||
Ratio of gross expenses to average | ||||||||||||||||||||||
net assets | 0.96 | %(iv) | 0.96 | %(v) | 0.99 | %(vi) | 1.04 | %(vii) | 1.23 | %(viii) | 1.20 | %(ix) | ||||||||||
Ratio of net expenses to average net | ||||||||||||||||||||||
assets | 0.96 | % | 0.96 | % | 0.99 | % | 1.04 | % | 1.23 | % | 1.20 | % | ||||||||||
Ratio of net investment income (loss) to | ||||||||||||||||||||||
average net assets | 0.07 | % | 0.17 | % | 0.26 | % | 0.06 | % | (0.11 | )% | 0.65 | % | ||||||||||
Portfolio turnover rate | 36.47 | % | 80.08 | % | 108.51 | % | 143.64 | % | 149.01 | % | 113.69 | % | ||||||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Does not reflect the effect of sales charges, if applicable.
(iv) Includes 0.04% related to dividend expense on short positions and interest expense for the period ended 4/30/18.
(v) Includes 0.07% related to dividend expense on short positions and interest expense for the period ended 10/31/17.
(vi) Includes 0.10% related to dividend expense on short positions and interest expense for the period ended 10/31/16.
(vii) Includes 0.15% related to dividend expense on short positions and interest expense for the period ended 10/31/15.
(viii) Includes 0.30% related to dividend expense on short positions and interest expense for the period ended 10/31/14.
(ix) Includes 0.22% related to dividend expense on short positions and interest expense for the period ended 10/31/13.
- 65 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Responsible Investing Fund | Class A | |||||||||||||||||
Six months | ||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | ||||||||||||
Net asset value, beginning of period | $ | 11.32 | $ | 9.14 | $ | 9.36 | $ | 9.14 | $ | 8.78 | $ | 6.68 | ||||||
INCOME FROM INVESTMENT | ||||||||||||||||||
OPERATIONS: | ||||||||||||||||||
Net investment income (loss)(ii) | (0.01 | ) | – | 0.01 | (0.01 | ) | – | 0.01 | ||||||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||
on investments | 0.37 | 2.55 | (0.10 | ) | 0.49 | 0.69 | 2.10 | |||||||||||
Total from investment operations | 0.36 | 2.55 | (0.09 | ) | 0.48 | 0.69 | 2.11 | |||||||||||
Dividends from net investment income | – | – | – | – | – | (0.01 | ) | |||||||||||
Distributions from net realized gains | (1.54 | ) | (0.37 | ) | (0.13 | ) | (0.26 | ) | (0.33 | ) | – | |||||||
Net asset value, end of period | $ | 10.14 | $ | 11.32 | $ | 9.14 | $ | 9.36 | $ | 9.14 | $ | 8.78 | ||||||
Total return(iii) | 3.36 | % | 28.84 | % | (1.03 | )% | 5.30 | % | 7.99 | % | 31.63 | % | ||||||
RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||
Net assets, end of period (000's | ||||||||||||||||||
omitted) | $ | 30,513 | $ | 33,828 | $ | 31,321 | $ | 34,213 | $ | 31,662 | $ | 30,586 | ||||||
Ratio of gross expenses to average | ||||||||||||||||||
net assets | 1.41 | % | 1.42 | % | 1.31 | % | 1.29 | % | 1.33 | % | 1.41 | % | ||||||
Ratio of expense reimbursements to | ||||||||||||||||||
average net assets | (0.06 | )% | (0.07 | )% | – | – | – | (0.06 | )% | |||||||||
Ratio of net expenses to average net | ||||||||||||||||||
assets | 1.35 | % | 1.35 | % | 1.31 | % | 1.29 | % | 1.33 | % | 1.35 | % | ||||||
Ratio of net investment income (loss) to | ||||||||||||||||||
average net assets | (0.14 | )% | (0.02 | )% | 0.14 | % | (0.07 | )% | (0.05 | )% | 0.18 | % | ||||||
Portfolio turnover rate | 11.44 | % | 30.70 | % | 19.84 | % | 16.85 | % | 24.22 | % | 43.35 | % | ||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Does not reflect the effect of sales charges, if applicable.
- 66 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Responsible Investing Fund | Class C | |||||||||||||||||
Six months | ||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | ||||||||||||
Net asset value, beginning of period | $ | 10.49 | $ | 8.56 | $ | 8.84 | $ | 8.71 | $ | 8.45 | $ | 6.47 | ||||||
INCOME FROM INVESTMENT | ||||||||||||||||||
OPERATIONS: | ||||||||||||||||||
Net investment loss(ii) | (0.04 | ) | (0.08 | ) | (0.05 | ) | (0.07 | ) | (0.07 | ) | (0.05 | ) | ||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||
on investments | 0.33 | 2.38 | (0.10 | ) | 0.46 | 0.66 | 2.03 | |||||||||||
Total from investment operations | 0.29 | 2.30 | (0.15 | ) | 0.39 | 0.59 | 1.98 | |||||||||||
Distributions from net realized gains | (1.54 | ) | (0.37 | ) | (0.13 | ) | (0.26 | ) | (0.33 | ) | – | |||||||
Net asset value, end of period | $ | 9.24 | $ | 10.49 | $ | 8.56 | $ | 8.84 | $ | 8.71 | $ | 8.45 | ||||||
Total return(iii) | 2.91 | % | 27.83 | % | (1.77 | )% | 4.51 | % | 7.09 | % | 30.45 | % | ||||||
RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||
Net assets, end of period (000's | ||||||||||||||||||
omitted) | $ | 5,906 | $ | 6,205 | $ | 5,581 | $ | 5,949 | $ | 5,261 | $ | 4,096 | ||||||
Ratio of gross expenses to average | ||||||||||||||||||
net assets | 2.14 | % | 2.19 | % | 2.09 | % | 2.07 | % | 2.09 | % | 2.16 | % | ||||||
Ratio of net expenses to average net | ||||||||||||||||||
assets | 2.14 | % | 2.19 | % | 2.09 | % | 2.07 | % | 2.09 | % | 2.16 | % | ||||||
Ratio of net investment loss to average | ||||||||||||||||||
net assets | (0.93 | )% | (0.86 | )% | (0.63 | )% | (0.85 | )% | (0.81 | )% | (0.69 | )% | ||||||
Portfolio turnover rate | 11.44 | % | 30.70 | % | 19.84 | % | 16.85 | % | 24.22 | % | 43.35 | % | ||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Does not reflect the effect of sales charges, if applicable.
- 67 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Responsible Investing Fund | Class I | |||||||||||||||||
Six months | ||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | ||||||||||||
Net asset value, beginning of period | $ | 11.31 | $ | 9.13 | $ | 9.35 | $ | 9.12 | $ | 8.77 | $ | 6.67 | ||||||
INCOME FROM INVESTMENT | ||||||||||||||||||
OPERATIONS: | ||||||||||||||||||
Net investment income (loss)(ii) | (0.01 | ) | 0.01 | 0.01 | (0.01 | ) | – | 0.01 | ||||||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||
on investments | 0.37 | 2.54 | (0.10 | ) | 0.50 | 0.68 | 2.10 | |||||||||||
Total from investment operations | 0.36 | 2.55 | (0.09 | ) | 0.49 | 0.68 | 2.11 | |||||||||||
Dividends from net investment income | – | – | – | – | –(iii) | (0.01 | ) | |||||||||||
Distributions from net realized gains | (1.54 | ) | (0.37 | ) | (0.13 | ) | (0.26 | ) | (0.33 | ) | – | |||||||
Net asset value, end of period | $ | 10.13 | $ | 11.31 | $ | 9.13 | $ | 9.35 | $ | 9.12 | $ | 8.77 | ||||||
Total return(iv) | 3.36 | % | 28.88 | % | (1.03 | )% | 5.42 | % | 7.91 | % | 31.68 | % | ||||||
RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||
Net assets, end of period (000's | ||||||||||||||||||
omitted) | $ | 11,294 | $ | 13,128 | $ | 28,461 | $ | 42,860 | $ | 41,888 | $ | 35,108 | ||||||
Ratio of gross expenses to average | ||||||||||||||||||
net assets | 1.36 | % | 1.37 | % | 1.28 | % | 1.27 | % | 1.30 | % | 1.35 | % | ||||||
Ratio of expense reimbursements to | ||||||||||||||||||
average net assets | (0.01 | )% | (0.02 | )% | – | – | – | – | ||||||||||
Ratio of net expenses to average net | ||||||||||||||||||
assets | 1.35 | % | 1.35 | % | 1.28 | % | 1.27 | % | 1.30 | % | 1.35 | % | ||||||
Ratio of net investment income (loss) to | ||||||||||||||||||
average net assets | (0.14 | )% | 0.08 | % | 0.16 | % | (0.05 | )% | (0.03 | )% | 0.14 | % | ||||||
Portfolio turnover rate | 11.44 | % | 30.70 | % | 19.84 | % | 16.85 | % | 24.22 | % | 43.35 | % | ||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Amount was less than $0.005 per share.
(iv) Does not reflect the effect of sales charges, if applicable.
- 68 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Responsible Investing Fund | Class Z | ||||||||
From 10/14/2016 | |||||||||
Six months | (commencement | ||||||||
ended | Year ended | of operations) to | |||||||
4/30/2018 (i) | 10/31/2017 | 10/31/2016 (ii) | |||||||
Net asset value, beginning of period | $ | 11.37 | $ | 9.14 | $ | 9.20 | |||
INCOME FROM INVESTMENT | |||||||||
OPERATIONS: | |||||||||
Net investment income(iii) | 0.01 | 0.03 | 0.01 | ||||||
Net realized and unrealized gain (loss) | |||||||||
on investments | 0.38 | 2.57 | (0.07 | ) | |||||
Total from investment operations | 0.39 | 2.60 | (0.06 | ) | |||||
Distributions from net realized gains | (1.54 | ) | (0.37 | ) | – | ||||
Net asset value, end of period | $ | 10.22 | $ | 11.37 | $ | 9.14 | |||
Total return(iv) | 3.63 | % | 29.41 | % | (0.65 | )% | |||
RATIOS/SUPPLEMENTAL DATA: | |||||||||
Net assets, end of period (000's | |||||||||
omitted) | $ | 12,569 | $ | 9,050 | $ | 99 | |||
Ratio of gross expenses to average | |||||||||
net assets | 1.14 | % | 1.31 | % | 33.46 | % | |||
Ratio of expense reimbursements to | |||||||||
average net assets | (0.24 | )% | (0.41 | )% | (32.56 | )% | |||
Ratio of net expenses to average net | |||||||||
assets | 0.90 | % | 0.90 | % | 0.90 | % | |||
Ratio of net investment income to | |||||||||
average net assets | 0.28 | % | 0.32 | % | 2.38 | % | |||
Portfolio turnover rate | 11.44 | % | 30.70 | % | 19.84 | % | |||
See Notes to Financial Statements. |
(i) Ratios have been annualized; total return and portfolio turnover rate have not been annualized.
(ii) Ratios have been annualized; total return has not been annualized; portfolio turnover is for the twelve months then ended.
(iii) Amount was computed based on average shares outstanding during the period.
(iv) Does not reflect the effect of sales charges, if applicable.
- 69 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Dynamic Opportunities | ||||||||||||||||||
Fund | Class A | |||||||||||||||||
Six months | ||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | ||||||||||||
Net asset value, beginning of period | $ | 14.10 | $ | 11.63 | $ | 12.48 | $ | 12.86 | $ | 12.90 | $ | 11.12 | ||||||
INCOME FROM INVESTMENT | ||||||||||||||||||
OPERATIONS: | ||||||||||||||||||
Net investment loss(ii) | (0.13 | ) | (0.21 | ) | (0.17 | ) | (0.19 | ) | (0.20 | ) | (0.16 | ) | ||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||
on investments | 0.30 | 2.72 | (0.34 | ) | 0.55 | 0.96 | 1.94 | |||||||||||
Total from investment operations | 0.17 | 2.51 | (0.51 | ) | 0.36 | 0.76 | 1.78 | |||||||||||
Distributions from net realized gains | (0.89 | ) | (0.04 | ) | (0.34 | ) | (0.74 | ) | (0.80 | ) | – | |||||||
Net asset value, end of period | $ | 13.38 | $ | 14.10 | $ | 11.63 | $ | 12.48 | $ | 12.86 | $ | 12.90 | ||||||
Total return(iii) | 1.34 | % | 21.63 | % | (4.22 | )% | 2.86 | % | 6.15 | % | 16.01 | % | ||||||
RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||
Net assets, end of period (000's | ||||||||||||||||||
omitted) | $ | 27,176 | $ | 28,833 | $ | 30,031 | $ | 67,533 | $ | 48,464 | $ | 36,712 | ||||||
Ratio of gross expenses to average | ||||||||||||||||||
net assets | 2.60 | %(iv) | 2.51 | %(v) | 2.38 | %(vi) | 2.20 | %(vii) | 2.46 | %(viii) | 2.61 | %(ix) | ||||||
Ratio of expense reimbursements to | ||||||||||||||||||
average net assets | – | – | – | – | – | (0.03 | )% | |||||||||||
Ratio of net expenses to average net | ||||||||||||||||||
assets | 2.60 | % | 2.51 | % | 2.38 | % | 2.20 | % | 2.46 | % | 2.58 | % | ||||||
Ratio of net investment loss to average | ||||||||||||||||||
net assets | (1.96 | )% | (1.62 | )% | (1.43 | )% | (1.51 | )% | (1.57 | )% | (1.37 | )% | ||||||
Portfolio turnover rate | 80.96 | % | 216.81 | % | 146.73 | % | 178.19 | % | 205.45 | % | 201.50 | % | ||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Does not reflect the effect of sales charges, if applicable.
(iv) Includes 0.40% related to dividend expense on short positions and interest expense for the period ended 4/30/18.
(v) Includes 0.62% related to dividend expense on short positions and interest expense for the period ended 10/31/17.
(vi) Includes 0.58% related to dividend expense on short positions and interest expense for the period ended 10/31/16.
(vii) Includes 0.44% related to dividend expense on short positions and interest expense for the period ended 10/31/15.
(viii) Includes 0.57% related to dividend expense on short positions and interest expense for the period ended 10/31/14.
(ix) Includes 0.58% related to dividend expense on short positions and interest expense for the period ended 10/31/13.
- 70 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Dynamic Opportunities | ||||||||||||||||||
Fund | Class C | |||||||||||||||||
Six months | ||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | ||||||||||||
Net asset value, beginning of period | $ | 13.32 | $ | 11.07 | $ | 11.98 | $ | 12.47 | $ | 12.62 | $ | 10.95 | ||||||
INCOME FROM INVESTMENT | ||||||||||||||||||
OPERATIONS: | ||||||||||||||||||
Net investment loss(ii) | (0.17 | ) | (0.29 | ) | (0.25 | ) | (0.28 | ) | (0.29 | ) | (0.25 | ) | ||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||
on investments | 0.27 | 2.58 | (0.32 | ) | 0.53 | 0.94 | 1.92 | |||||||||||
Total from investment operations | 0.10 | 2.29 | (0.57 | ) | 0.25 | 0.65 | 1.67 | |||||||||||
Distributions from net realized gains | (0.89 | ) | (0.04 | ) | (0.34 | ) | (0.74 | ) | (0.80 | ) | – | |||||||
Net asset value, end of period | $ | 12.53 | $ | 13.32 | $ | 11.07 | $ | 11.98 | $ | 12.47 | $ | 12.62 | ||||||
Total return(iii) | 0.87 | % | 20.73 | % | (5.00 | )% | 2.11 | % | 5.38 | % | 15.15 | % | ||||||
RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||
Net assets, end of period (000's | ||||||||||||||||||
omitted) | $ | 5,808 | $ | 6,472 | $ | 7,120 | $ | 10,136 | $ | 5,808 | $ | 1,407 | ||||||
Ratio of gross expenses to average | ||||||||||||||||||
net assets | 3.41 | %(iv) | 3.29 | %(v) | 3.14 | %(vi) | 2.98 | %(vii) | 3.23 | %(viii) | 3.36 | %(ix) | ||||||
Ratio of expense reimbursements to | ||||||||||||||||||
average net assets | – | – | – | – | – | (0.03 | )% | |||||||||||
Ratio of net expenses to average net | ||||||||||||||||||
assets | 3.41 | % | 3.29 | % | 3.14 | % | 2.98 | % | 3.23 | % | 3.33 | % | ||||||
Ratio of net investment loss to average | ||||||||||||||||||
net assets | (2.76 | )% | (2.42 | )% | (2.19 | )% | (2.28 | )% | (2.36 | )% | (2.13 | )% | ||||||
Portfolio turnover rate | 80.96 | % | 216.81 | % | 146.73 | % | 178.19 | % | 205.45 | % | 201.50 | % | ||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Does not reflect the effect of sales charges, if applicable.
(iv) Includes 0.40% related to dividend expense on short positions and interest expense for the period ended 4/30/18.
(v) Includes 0.61% related to dividend expense on short positions and interest expense for the period ended 10/31/17.
(vi) Includes 0.59% related to dividend expense on short positions and interest expense for the period ended 10/31/16.
(vii) Includes 0.44% related to dividend expense on short positions and interest expense for the period ended 10/31/15.
(viii) Includes 0.59% related to dividend expense on short positions and interest expense for the period ended 10/31/14.
(ix) Includes 0.58% related to dividend expense on short positions and interest expense for the period ended 10/31/13.
- 71 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Dynamic Opportunities | ||||||||||||||||||
Fund | Class Z | |||||||||||||||||
Six months | ||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | ||||||||||||
Net asset value, beginning of period | $ | 14.39 | $ | 11.83 | $ | 12.64 | $ | 12.99 | $ | 12.98 | $ | 11.16 | ||||||
INCOME FROM INVESTMENT | ||||||||||||||||||
OPERATIONS: | ||||||||||||||||||
Net investment loss(ii) | (0.12 | ) | (0.18 | ) | (0.14 | ) | (0.16 | ) | (0.16 | ) | (0.13 | ) | ||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||
on investments | 0.31 | 2.78 | (0.33 | ) | 0.55 | 0.97 | 1.95 | |||||||||||
Total from investment operations | 0.19 | 2.60 | (0.47 | ) | 0.39 | 0.81 | 1.82 | |||||||||||
Distributions from net realized gains | (0.89 | ) | (0.04 | ) | (0.34 | ) | (0.74 | ) | (0.80 | ) | – | |||||||
Net asset value, end of period | $ | 13.69 | $ | 14.39 | $ | 11.83 | $ | 12.64 | $ | 12.99 | $ | 12.98 | ||||||
Total return(iii) | 1.46 | % | 22.02 | % | (3.92 | )% | 3.16 | % | 6.52 | % | 16.29 | % | ||||||
RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||
Net assets, end of period (000's | ||||||||||||||||||
omitted) | $ | 53,026 | $ | 48,660 | $ | 44,947 | $ | 46,966 | $ | 29,828 | $ | 20,504 | ||||||
Ratio of gross expenses to average | ||||||||||||||||||
net assets | 2.34 | %(iv) | 2.21 | %(v) | 2.07 | %(vi) | 1.93 | %(vii) | 2.18 | %(viii) | 2.34 | %(ix) | ||||||
Ratio of net expenses to average net | ||||||||||||||||||
assets | 2.34 | % | 2.21 | % | 2.07 | % | 1.93 | % | 2.18 | % | 2.34 | % | ||||||
Ratio of net investment loss to average | ||||||||||||||||||
net assets | (1.70 | )% | (1.34 | )% | (1.13 | )% | (1.23 | )% | (1.29 | )% | (1.08 | )% | ||||||
Portfolio turnover rate | 80.96 | % | 216.81 | % | 146.73 | % | 178.19 | % | 205.45 | % | 201.50 | % | ||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Does not reflect the effect of sales charges, if applicable.
(iv) Includes 0.41% related to dividend expense on short positions and interest expense for the period ended 4/30/18.
(v) Includes 0.61% related to dividend expense on short positions and interest expense for the period ended 10/31/17.
(vi) Includes 0.58% related to dividend expense on short positions and interest expense for the period ended 10/31/16.
(vii) Includes 0.44% related to dividend expense on short positions and interest expense for the period ended 10/31/15.
(viii) Includes 0.57% related to dividend expense on short positions and interest expense for the period ended 10/31/14.
(ix) Includes 0.58% related to dividend expense on short positions and interest expense for the period ended 10/31/13.
- 72 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Emerging Markets Fund | Class A | |||||||||||||||||
Six months | ||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | ||||||||||||
Net asset value, beginning of period | $ | 11.29 | $ | 9.09 | $ | 8.55 | $ | 9.44 | $ | 9.57 | $ | 8.52 | ||||||
INCOME FROM INVESTMENT | ||||||||||||||||||
OPERATIONS: | ||||||||||||||||||
Net investment income (loss)(ii) | (0.04 | ) | – | (0.01 | ) | (0.03 | ) | (0.01 | ) | 0.02 | ||||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||
on investments | 0.19 | 2.20 | 0.56 | (0.86 | ) | (0.12 | ) | 1.19 | ||||||||||
Total from investment operations | 0.15 | 2.20 | 0.55 | (0.89 | ) | (0.13 | ) | 1.21 | ||||||||||
Dividends from net investment income | (0.40 | ) | – | (0.01 | ) | – | – | (0.16 | ) | |||||||||
Net asset value, end of period | $ | 11.04 | $ | 11.29 | $ | 9.09 | $ | 8.55 | $ | 9.44 | $ | 9.57 | ||||||
Total return(iii) | 1.39 | % | 24.20 | % | 6.41 | % | (9.43 | )% | (1.36 | )% | 14.31 | % | ||||||
RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||
Net assets, end of period (000's | ||||||||||||||||||
omitted) | $ | 8,766 | $ | 7,141 | $ | 5,931 | $ | 8,270 | $ | 6,931 | $ | 5,260 | ||||||
Ratio of gross expenses to average | ||||||||||||||||||
net assets | 1.67 | % | 2.05 | % | 2.43 | % | 2.71 | % | 2.99 | % | 3.49 | % | ||||||
Ratio of expense reimbursements to | ||||||||||||||||||
average net assets | (0.12 | )% | (0.50 | )% | (0.83 | )% | (1.01 | )% | (1.29 | )% | (1.79 | )% | ||||||
Ratio of net expenses to average net | ||||||||||||||||||
assets | 1.55 | % | 1.55 | % | 1.60 | % | 1.70 | % | 1.70 | % | 1.70 | % | ||||||
Ratio of net investment income (loss) to | ||||||||||||||||||
average net assets | (0.76 | )% | 0.05 | % | (0.10 | )% | (0.31 | )% | (0.13 | )% | 0.19 | % | ||||||
Portfolio turnover rate | 42.70 | % | 71.95 | % | 65.84 | % | 84.93 | % | 98.25 | % | 103.59 | % | ||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Does not reflect the effect of sales charges, if applicable.
- 73 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Emerging Markets Fund | Class C | |||||||||||||||||
Six months | ||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | ||||||||||||
Net asset value, beginning of period | $ | 10.80 | $ | 8.76 | $ | 8.30 | $ | 9.23 | $ | 9.42 | $ | 8.37 | ||||||
INCOME FROM INVESTMENT | ||||||||||||||||||
OPERATIONS: | ||||||||||||||||||
Net investment loss(ii) | (0.08 | ) | (0.06 | ) | (0.06 | ) | (0.09 | ) | (0.08 | ) | (0.06 | ) | ||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||
on investments | 0.19 | 2.10 | 0.52 | (0.84 | ) | (0.11 | ) | 1.17 | ||||||||||
Total from investment operations | 0.11 | 2.04 | 0.46 | (0.93 | ) | (0.19 | ) | 1.11 | ||||||||||
Dividends from net investment income | (0.34 | ) | – | – | – | – | (0.06 | ) | ||||||||||
Net asset value, end of period | $ | 10.57 | $ | 10.80 | $ | 8.76 | $ | 8.30 | $ | 9.23 | $ | 9.42 | ||||||
Total return(iii) | 1.01 | % | 23.29 | % | 5.54 | % | (10.08 | )% | (2.02 | )% | 13.34 | % | ||||||
RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||
Net assets, end of period (000's | ||||||||||||||||||
omitted) | $ | 4,573 | $ | 3,602 | $ | 2,849 | $ | 2,581 | $ | 2,151 | $ | 484 | ||||||
Ratio of gross expenses to average | ||||||||||||||||||
net assets | 2.45 | % | 2.82 | % | 3.21 | % | 3.51 | % | 3.79 | % | 4.75 | % | ||||||
Ratio of expense reimbursements to | ||||||||||||||||||
average net assets | (0.15 | )% | (0.52 | )% | (0.86 | )% | (1.06 | )% | (1.34 | )% | (2.30 | )% | ||||||
Ratio of net expenses to average net | ||||||||||||||||||
assets | 2.30 | % | 2.30 | % | 2.35 | % | 2.45 | % | 2.45 | % | 2.45 | % | ||||||
Ratio of net investment loss to average | ||||||||||||||||||
net assets | (1.52 | )% | (0.68 | )% | (0.80 | )% | (1.01 | )% | (0.84 | )% | (0.73 | )% | ||||||
Portfolio turnover rate | 42.70 | % | 71.95 | % | 65.84 | % | 84.93 | % | 98.25 | % | 103.59 | % | ||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Does not reflect the effect of sales charges, if applicable.
- 74 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Emerging Markets Fund | Class I | |||||||||||||||||
Six months | ||||||||||||||||||
ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||
4/30/2018 | (i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014 | 10/31/2013 | ||||||||||||
Net asset value, beginning of period | $ | 11.22 | $ | 9.04 | $ | 8.50 | $ | 9.38 | $ | 9.51 | $ | 8.48 | ||||||
INCOME FROM INVESTMENT | ||||||||||||||||||
OPERATIONS: | ||||||||||||||||||
Net investment income (loss)(ii) | (0.04 | ) | – | (0.01 | ) | (0.03 | ) | (0.02 | ) | 0.01 | ||||||||
Net realized and unrealized gain (loss) | ||||||||||||||||||
on investments | 0.19 | 2.18 | 0.55 | (0.85 | ) | (0.11 | ) | 1.19 | ||||||||||
Total from investment operations | 0.15 | 2.18 | 0.54 | (0.88 | ) | (0.13 | ) | 1.20 | ||||||||||
Dividends from net investment income | (0.40 | ) | – | –(iii) | – | – | (0.17 | ) | ||||||||||
Net asset value, end of period | $ | 10.97 | $ | 11.22 | $ | 9.04 | $ | 8.50 | $ | 9.38 | $ | 9.51 | ||||||
Total return(iv) | 1.40 | % | 24.12 | % | 6.39 | % | (9.38 | )% | (1.37 | )% | 14.26 | % | ||||||
RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||
Net assets, end of period (000's | ||||||||||||||||||
omitted) | $ | 22,141 | $ | 22,848 | $ | 14,006 | $ | 11,814 | $ | 11,451 | $ | 10,218 | ||||||
Ratio of gross expenses to average | ||||||||||||||||||
net assets | 1.63 | % | 1.96 | % | 2.32 | % | 2.64 | % | 2.92 | % | 3.45 | % | ||||||
Ratio of expense reimbursements to | ||||||||||||||||||
average net assets | (0.14 | )% | (0.41 | )% | (0.72 | )% | (0.94 | )% | (1.22 | )% | (1.75 | )% | ||||||
Ratio of net expenses to average net | ||||||||||||||||||
assets | 1.49 | % | 1.55 | % | 1.60 | % | 1.70 | % | 1.70 | % | 1.70 | % | ||||||
Ratio of net investment income (loss) to | ||||||||||||||||||
average net assets | (0.69 | )% | 0.03 | % | (0.06 | )% | (0.35 | )% | (0.16 | )% | 0.06 | % | ||||||
Portfolio turnover rate | 42.70 | % | 71.95 | % | 65.84 | % | 84.93 | % | 98.25 | % | 103.59 | % | ||||||
See Notes to Financial Statements. |
(i) 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.
(iii) Amount was less than $0.005 per share.
(iv) Does not reflect the effect of sales charges, if applicable.
- 75 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Alger Emerging Markets Fund | Class Y | ||||||||
From 5/9/2016 | |||||||||
Six months | (commencement | ||||||||
ended | Year ended | of operations) to | |||||||
4/30/2018(i) | 10/31/2017 | 10/31/2016(ii) | |||||||
Net asset value, beginning of period | $ | 11.31 | $ | 9.06 | $ | 7.94 | |||
INCOME FROM INVESTMENT | |||||||||
OPERATIONS: | |||||||||
Net investment income (loss)(iii) | (0.01 | ) | 0.07 | 0.03 | |||||
Net realized and unrealized gain on | |||||||||
investments | 0.19 | 2.18 | 1.09 | ||||||
Total from investment operations | 0.18 | 2.25 | 1.12 | ||||||
Dividends from net investment income | (0.42 | ) | – | – | |||||
Net asset value, end of period | $ | 11.07 | $ | 11.31 | $ | 9.06 | |||
Total return(iv) | 1.61 | % | 24.83 | % | 14.11 | % | |||
RATIOS/SUPPLEMENTAL DATA: | |||||||||
Net assets, end of period (000's | |||||||||
omitted) | $ | 5,272 | $ | 5,187 | $ | 114 | |||
Ratio of gross expenses to average | |||||||||
net assets | 1.33 | % | 2.30 | % | 4.86 | % | |||
Ratio of expense reimbursements to | |||||||||
average net assets | (0.35 | )% | (1.25 | )% | (3.81 | )% | |||
Ratio of net expenses to average net | |||||||||
assets | 0.98 | % | 1.05 | % | 1.05 | % | |||
Ratio of net investment income (loss) to | |||||||||
average net assets | (0.20 | )% | 0.64 | % | 0.73 | % | |||
Portfolio turnover rate | 42.70 | % | 71.95 | % | 65.84 | % | |||
See Notes to Financial Statements. |
(i) Ratios have been annualized; total return and portfolio turnover rate have not been annualized.
(ii) Ratios have been annualized; total return has not been annualized; portfolio turnover is for the twelve months then ended.
(iii) Amount was computed based on average shares outstanding during the period.
(iv) Does not reflect the effect of sales charges, if applicable.
- 76 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Class Y-2 | |||||||||
Alger Emerging Markets Fund | From 5/9/2016 | ||||||||
Six months | (commencement | ||||||||
ended | Year ended | of operations) to | |||||||
4/30/2018(i) | 10/31/2017 | 10/31/2016(ii) | |||||||
Net asset value, beginning of period | $ | 11.32 | $ | 9.06 | $ | 7.94 | |||
INCOME FROM INVESTMENT | |||||||||
OPERATIONS: | |||||||||
Net investment income (loss)(iii) | (0.01 | ) | 0.06 | 0.03 | |||||
Net realized and unrealized gain on | |||||||||
investments | 0.19 | 2.20 | 1.09 | ||||||
Total from investment operations | 0.18 | 2.26 | 1.12 | ||||||
Dividends from net investment income | (0.46 | ) | – | – | |||||
Net asset value, end of period | $ | 11.04 | $ | 11.32 | $ | 9.06 | |||
Total return(iv) | 1.60 | % | 24.94 | % | 14.11 | % | |||
RATIOS/SUPPLEMENTAL DATA: | |||||||||
Net assets, end of period (000's | |||||||||
omitted) | $ | 145 | $ | 143 | $ | 114 | |||
Ratio of gross expenses to average | |||||||||
net assets | 1.40 | % | 2.16 | % | 4.86 | % | |||
Ratio of expense reimbursements to | |||||||||
average net assets | (0.47 | )% | (1.17 | )% | (3.87 | )% | |||
Ratio of net expenses to average net | |||||||||
assets | 0.93 | % | 0.99 | % | 0.99 | % | |||
Ratio of net investment income (loss) to | |||||||||
average net assets | (0.15 | )% | 0.61 | % | 0.79 | % | |||
Portfolio turnover rate | 42.70 | % | 71.95 | % | 65.84 | % | |||
See Notes to Financial Statements. |
(i) Ratios have been annualized; total return and portfolio turnover rate have not been annualized.
(ii) Ratios have been annualized; total return has not been annualized; portfolio turnover is for the twelve months then ended.
(iii) Amount was computed based on average shares outstanding during the period.
(iv) Does not reflect the effect of sales charges, if applicable.
- 77 -
THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period (Unaudited)
Class Z | |||||||||||||||
Alger Emerging Markets Fund | From 2/28/2014 | ||||||||||||||
Six months | (commencement | ||||||||||||||
ended | Year ended | Year ended | Year ended | of operations) to | |||||||||||
4/30/2018(i) | 10/31/2017 | 10/31/2016 | 10/31/2015 | 10/31/2014(ii) | |||||||||||
Net asset value, beginning of period | $ | 11.36 | $ | 9.12 | $ | 8.56 | $ | 9.41 | $ | 9.24 | |||||
INCOME FROM INVESTMENT | |||||||||||||||
OPERATIONS: | |||||||||||||||
Net investment income (loss)(iii) | (0.02 | ) | 0.04 | 0.02 | 0.01 | 0.02 | |||||||||
Net realized and unrealized gain (loss) | |||||||||||||||
on investments | 0.20 | 2.20 | 0.56 | (0.86 | ) | 0.15 | |||||||||
Total from investment operations | 0.18 | 2.24 | 0.58 | (0.85 | ) | 0.17 | |||||||||
Dividends from net investment income | (0.43 | ) | – | (0.02 | ) | – | – | ||||||||
Net asset value, end of period | $ | 11.11 | $ | 11.36 | $ | 9.12 | $ | 8.56 | $ | 9.41 | |||||
Total return(iv) | 1.60 | % | 24.56 | % | 6.78 | % | (9.03 | )% | 1.84 | % | |||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||
Net assets, end of period (000's | |||||||||||||||
omitted) | $ | 31,604 | $ | 27,944 | $ | 17,568 | $ | 4,294 | $ | 3,667 | |||||
Ratio of gross expenses to average | |||||||||||||||
net assets | 1.35 | % | 1.71 | % | 2.07 | % | 2.55 | % | 3.35 | % | |||||
Ratio of expense reimbursements to | |||||||||||||||
average net assets | (0.28 | )% | (0.46 | )% | (0.82 | )% | (1.30 | )% | (2.10 | )% | |||||
Ratio of net expenses to average net | |||||||||||||||
assets | 1.07 | % | 1.25 | % | 1.25 | % | 1.25 | % | 1.25 | % | |||||
Ratio of net investment income (loss) to | |||||||||||||||
average net assets | (0.29 | )% | 0.38 | % | 0.29 | % | 0.20 | % | 0.29 | % | |||||
Portfolio turnover rate | 42.70 | % | 71.95 | % | 65.84 | % | 84.93 | % | 98.25 | % | |||||
See Notes to Financial Statements. |
(i) Ratios have been annualized; total return and portfolio turnover rate have not been annualized.
(ii) Ratios have been annualized; total return has not been annualized; portfolio turnover is for the twelve months then ended.
(iii) Amount was computed based on average shares outstanding during the period.
(iv) Does not reflect the effect of sales charges, if applicable.
- 78 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1 — General:
The Alger Funds II (the “Trust”) is an open-end registered investment company organized
as a business trust under the laws of the Commonwealth of Massachusetts. The Trust
qualifies as an investment company as defined in Financial Accounting Standards Board
Accounting Standards Codification 946-Financial Services – Investment Companies. The
Trust operates as a series company currently offering an unlimited number of shares of
beneficial interest in four funds—Alger Spectra Fund, Alger Responsible Investing Fund,
Alger Dynamic Opportunities Fund and Alger Emerging Markets 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 shares, Class C shares,
Class I shares, Class Y shares, Class Y-2 shares and Class Z shares. Class A shares are
generally subject to an initial sales charge while Class C shares are generally subject to a
deferred sales charge. Class I shares, Class Y shares, Class Y-2 shares and Class Z shares
are sold to institutional investors without an initial or deferred sales charge. Each class
has identical rights to assets and earnings, except that each share class bears the pro rata
allocation of the Fund’s expenses other than a class expense (not including advisory or
custodial fees or other expenses related to the management of the Fund’s assets).
NOTE 2 — Significant Accounting Policies:
(a) Investment Valuation: The Funds value their financial instruments (including escrow
receivable) at fair value using independent dealers or pricing services under policies approved
by the Trust’s Board of Trustees (“Board”). Investments are valued on each day the New
York Stock Exchange (the “NYSE”) is open, as of the close of the NYSE (normally 4:00
p.m. Eastern Standard Time).
Equity securities, including traded rights, warrants and option contracts for which valuation
information is readily available are valued at the last quoted sales price or official closing
price as reported by an independent pricing service on the primary market or exchange on
which they are traded. In the absence of quoted sales, such securities are valued at the bid
price or, in the absence of a recent bid price, the equivalent as obtained from one or more
of the major market makers for the securities to be valued.
Debt securities generally trade in the over-the-counter market. Debt securities with
remaining maturities of more than sixty days at the time of acquisition are valued on
the basis of last available bid prices or current market quotations provided by dealers
or pricing services. In determining the value of a particular investment, pricing services
may use certain information with respect to transactions in such investments, quotations
from dealers, pricing matrixes, market transactions in comparable investments, various
relationships observed in the market between investments and calculated yield measures
based on valuation technology commonly employed in the market for such investments.
Asset-backed and mortgage-backed securities are valued by independent pricing services
using models that consider estimated cash flows of each tranche of the security, establish a
benchmark yield and develop an estimated tranche-specific spread to the benchmark yield
- 79 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
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 (including escrow receivable)
are valued at fair value, as determined in good faith pursuant to procedures established by
the Board.
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, believes to be
the fair value of these securities as of the close of the NYSE. The Funds may also fair value
securities in other situations, for example, when a particular foreign market is closed but the
Funds are open.
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 either the market or the
income approach to fair value. The market approach considers prices and other relevant
information generated by market transactions involving identical or comparable assets
to measure fair value. The income approach converts future amounts to a current, or
discounted, single amount. These fair value measurements are determined on the basis of
the value indicated by current market expectations about such future events. Inputs for Level
1 include exchange-listed prices and broker quotes in an active market. Inputs for Level 2
include the last trade price in the case of a halted security, an exchange-listed price which
has been adjusted for fair value factors, and prices of closely related securities. Additional
Level 2 inputs include an evaluated price which is based upon a compilation of observable
market information such as spreads for fixed income and preferred securities. Inputs for
Level 3 include, but are not limited to, revenue multiples, earnings before interest, taxes,
- 80 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
depreciation and amortization (“EBITDA”) multiples, discount rates, and the probabilities
of success of certain outcomes. Such unobservable market information may be obtained
from a company’s financial statements and from industry studies, market data, and market
indicators such as benchmarks and indexes. Because of the inherent uncertainty and often
limited markets for restricted securities, the values may significantly differ from the values
if there was an active market.
Valuation processes are determined by a Valuation Committee (“Committee”) established
by the Board and comprised of representatives of the Trust’s investment adviser. The
Committee reports its fair valuation determinations to the Board which is responsible for
approving valuation policy and procedures.
While the Committee meets on an as-needed basis, the Committee generally meets
quarterly to review and evaluate the effectiveness of the procedures for making fair value
determinations. The Committee considers, among other things, the results of quarterly back
testing of the fair value model for foreign securities, pricing comparisons between primary
and secondary price sources, the outcome of price challenges put to the Funds’ pricing
vendor, and variances between transactional prices and previous days price.
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, 2 and 3 are recognized at the end of the
reporting period.
(b) Cash and Cash Equivalents: Cash and cash equivalents include U.S. dollars, foreign cash
and overnight time deposits.
(c) Securities Transactions and Investment Income: Securities transactions are recorded on a
trade date basis. Realized gains and losses from securities transactions are recorded on the
identified cost basis. Dividend income is recognized on the ex-dividend date and interest
income is recognized on the accrual basis.
Premiums and discounts on debt securities purchased are amortized or accreted over the
lives of the respective securities.
(d) Foreign Currency Translations: The books and records of the Funds are maintained in U.S.
dollars. Foreign currencies, investments and other assets and liabilities are translated into
U.S. dollars at the prevailing rates of exchange on the valuation date. Purchases and sales
of investment securities and income and expenses are translated into U.S. dollars at the
prevailing exchange rates on the respective dates of such transactions.
Net realized gains and losses on foreign currency transactions represent net gains and losses
from the disposition of foreign currencies, currency gains and losses realized between the
trade dates and settlement dates of security transactions, and the difference between the
amount of net investment income accrued and the U.S. dollar amount actually received.
The effects of changes in foreign currency exchange rates on investments in securities
are included in realized and unrealized gain or loss on investments in the accompanying
Statements of Operations.
- 81 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
(e) Short Sales: Securities sold short represent an obligation to deliver the securities at a
future date. A Fund may sell a security it does not own in anticipation of a decline in the
value of that security before the delivery date. When a Fund sells a security short, it must
borrow the security sold short and deliver it to the broker-dealer through which it made
the short sale. Dividends paid on securities sold short are disclosed as an expense on the
Statement of Operations. A gain, limited to the price at which the Fund sold the security
short, or a loss, unlimited in size, will be recognized upon the termination of a short sale.
To secure its obligation to deliver to the broker-dealer the securities sold short, the Fund
must segregate an amount of cash or liquid securities with its custodian equal to any excess
of the current market value of the securities sold short over any cash or liquid securities
deposited as collateral with the broker in connection with the short sale (not including the
proceeds of the short sale). As a result of that requirement, the Fund will not gain any
leverage merely by selling short, except to the extent that it earns interest or other income
or gains on the segregated cash or liquid securities while also being subject to gain or loss
from the securities sold short.
(f) Option Contracts: When a Fund writes an option, an amount equal to the premium received
by the Fund is recorded as a liability and is subsequently adjusted to the current fair value
of the option written. Premiums received from writing options that expire unexercised are
treated by the Fund on the expiration date as realized gains from investments. The difference
between the premium and the amount paid on effecting a closing purchase transaction,
including brokerage commissions, is also treated as a realized gain, or, if the premium is less
than the amount paid for the closing purchase transaction, as a realized loss. If a 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.
(g) Lending of Fund Securities: The Funds may lend their securities to financial institutions,
provided that the market value of the securities loaned will not at any time exceed one
third of a Fund’s total assets, as defined in its prospectuses. The Funds earn fees on the
securities loaned, which are included in interest income in the accompanying Statements
of Operations. In order to protect against the risk of failure by the borrower to return the
securities loaned or any delay in the delivery of such securities, the loan is collateralized by
cash or securities that are maintained with the Custodian (“Brown Brothers Harriman &
Company”) in an amount equal to at least 102 percent of the current market value of U.S.
- 82 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
loaned securities or 105 percent for non-U.S. loaned securities. The market value of the
loaned securities is determined at the close of business of the Fund. Any required additional
collateral is delivered to the Custodian and any excess collateral is returned to the borrower
on the next business day. In the event the borrower fails to return the loaned securities when
due, the Funds may take the collateral to replace the securities. If the value of the collateral
is less than the purchase cost of replacement securities, the Custodian shall be responsible
for any shortfall, but only to the extent that the shortfall is not due to any diminution in
collateral value, as defined in the securities lending agreement. The Funds are required to
maintain the collateral in a segregated account and determine its value each day until the
loaned securities are returned. Cash collateral may be invested as determined by the Funds.
Collateral is returned to the borrower upon settlement of the loan. There were no securities
loaned as of April 30, 2018.
(h) Dividends to Shareholders: Dividends and distributions payable to shareholders are recorded
by the Funds on the ex-dividend date. Dividends from net investment income, if available,
and distributions from net realized gains, offset by any loss carryforward, are declared and
paid annually after the end of the fiscal year in which earned.
Each 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.
(i) 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 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 Funds file
income tax returns in the U.S., as well as New York State and New York City. The statute
of limitations on the tax returns for Alger Spectra Fund, Alger Responsible Investing Fund,
Alger Dynamic Opportunities Fund and Alger Emerging Markets Fund remains open for
- 83 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
the tax years 2014-2017. Management does not believe there are any uncertain tax positions
that require recognition of a tax liability.
(j) Allocation Methods: The Trust accounts separately for the assets, liabilities and operations
of each Fund. Expenses directly attributable to each Fund are charged to that Fund’s
operations; expenses which are applicable to all Funds are allocated among them based on
net assets. Income, realized and unrealized gains and losses, and expenses of each Fund
are allocated among the Fund’s classes based on relative net assets, with the exception of
distribution fees, transfer agency fees, and shareholder servicing and related fees.
(k) 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. These unaudited interim financial
statements reflect all adjustments which are, in the opinion of management, necessary to
present a fair statement of results for the interim period. Actual results may differ from
those estimates. All such estimates are of normal recurring nature.
NOTE 3 — Investment Advisory Fees and Other Transactions with Affiliates:
(a) Investment Advisory Fees: Fees incurred by each Fund, pursuant to the provisions of
the Trust’s Investment Advisory Agreement with Fred Alger Management, Inc. (“Alger
Management” or the “Investment Manager”), are payable monthly and computed based on
the following rates. The actual rate paid as a percentage of average daily net assets, for the
six months ended April 30, 2018, is set forth below under the heading “Actual Rate.”:
Tier 1 | Tier 2 | Tier 3 | Tier 4 | Tier 5 | Actual Rate | |||||||||||||
Alger Spectra | ||||||||||||||||||
Fund(a) | 0.900 | % | 0.750 | % | 0.650 | % | 0.550 | % | 0.450 | % | 0.760 | % | ||||||
Alger Responsible | ||||||||||||||||||
Investing Fund(b) | 0.710 | 0.650 | — | — | — | 0.710 | ||||||||||||
Alger Dynamic | ||||||||||||||||||
Opportunities | ||||||||||||||||||
Fund(b) | 1.200 | 1.000 | — | — | — | 1.200 | ||||||||||||
Alger Emerging | ||||||||||||||||||
Markets | ||||||||||||||||||
Fund(c),(d) | 0.750 | — | — | — | — | 0.800 |
(a) Tier 1 rate is paid on assets up to $2 billion, Tier 2 rate is paid on assets between $2 billion and $4 billion, Tier 3
rate is paid on assets between $4 billion and $6 billion, Tier 4 rate is paid on assets between $6 billion and $8 billion,
and Tier 5 rate is paid on assets in excess of $8 billion.
(b) Tier 1 rate is paid on assets up to $1 billion and Tier 2 rate is paid on assets in excess of $1 billion.
(c) Tier 1 rate is paid on all assets.
(d) Prior to January 1, 2018, Alger Emerging Markets Fund Advisory Fee rate was 0.900%.
Alger Management has established expense caps for several share classes, effective through
February 28, 2019, whereby it reimburses the share classes if annualized operating expenses
(excluding interest, taxes, brokerage, dividend expense and extraordinary expenses) exceed
the rates, based on average daily net assets, listed below:
- 84 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
FEES WAIVED | ||||||||||||
/ REIMBURSED | ||||||||||||
FOR THE SIX | ||||||||||||
CLASS | MONTHS ENDED | |||||||||||
A | C | I | Y | Y-2 | Z | APRIL 30, 2018 | ||||||
Alger Responsible Investing Fund | 1.35 | % | – | 1.35 | % | – | – | 0.90 | % | $ | 23,264 | |
Alger Dynamic Opportunities Fund | 1.95 | 2.70 | – | – | – | 1.60 | — | |||||
Alger Emerging Markets Fund** | 1.55 | 2.30 | 1.45 | * | 0.95% | 0.90% | *0.99* | 50,054 |
* Prior to January 1, 2018, the expense cap for the Alger Emerging Markets Fund Class I was 1.55%, Class Y was
1.05%, Class Y-2 was 0.99% and Class Z was 1.25%.
** Effective August 30, 2018 to February 28, 2019, the expense cap for the Alger Emerging Markets Fund will be
1.60% and 2.35% for the Class A shares and Class C shares, respectively.
Alger Management may, during the one-year term of the expense reimbursement contract,
recoup any expenses waived or reimbursed pursuant to the expense reimbursement contract
to the extent that such recoupment would not cause the expense ratio to exceed the lesser
of the stated limitation in effect at the time of (i) the waiver or reimbursement and (ii) the
recoupment. For the six months ended April 30, 2018, the Investment Manager recouped
$5,479 from the Alger Emerging Markets Fund. As of April 30, 2018, the total repayments
that may potentially be made by the Funds to the Investment Manager for the Alger
Responsible Investing Fund and Alger Emerging Markets Fund are $45,044 and $52,048,
respectively, which will expire February 28, 2019.
In addition to the fee cap, Alger Management voluntarily reduced its advisory fee for the
Alger Emerging Markets Fund by $26,000 for the six months ended April 30, 2018.
(b) Administration Fees: Fees incurred by each Fund, pursuant to the provisions of the Trust’s
Administration Agreement with Alger Management, are payable monthly and computed
based on the average daily net assets of each Fund at the annual rate of 0.0275%.
(c) Distribution Fees: The Trust has adopted a distribution plan pursuant to which Class
A shares, Class C shares and Class I shares of each Fund pay Fred Alger & Company,
Incorporated, the distributor (“Alger Inc.”), a fee at the annual rate listed below of the
respective average daily net assets of the share class of the designated Fund to compensate
Alger Inc. for its activities and expenses incurred in distributing the share class and
shareholder servicing. Fees paid may be more or less than the expenses incurred by Alger
Inc.
FEE | ||
SHARE CLASS | RATE | |
A | 0.25 | % |
C | 1.00 | |
I | 0.25 |
(d) Sales Charges: Purchases and sales of shares of the Funds may be subject to initial sales
charges or contingent deferred sales charges. The contingent deferred sales charges are
used by Alger Inc. to offset distribution expenses previously incurred. Sales charges do not
represent expenses of the Trust. For the six months ended April 30, 2018, the initial sales
- 85 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
charges and contingent deferred sales charges imposed, all of which were retained by Alger
Inc., were as follows:
CONTINGENT | ||||
INITIAL SALES | DEFERRED SALES | |||
CHARGES | CHARGES | |||
Alger Spectra Fund | $ | $ | 26,277 | |
Alger Responsible Investing Fund | 17 | 21 | ||
Alger Emerging Markets Fund | 25 | 50 |
(e) Brokerage Commissions: During the six months ended April 30, 2018, Alger Spectra Fund,
Alger Responsible Investing Fund, Alger Dynamic Opportunities Fund and Alger Emerging
Markets Fund paid Alger Inc., an affiliate of Alger Management, $358,936, $4,380, $11,286
and $184, respectively, in connection with securities transactions.
(f) 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 DST Asset Manager Solutions, Inc., the transfer
agent, and for other related services. The Funds compensate Alger Management at the
annual rate of 0.0165% of their respective average daily net assets for the Class A and Class
C shares and 0.01% of their respective average daily net assets of the Class I shares, Class Y
shares, Class Y-2 shares and Class Z shares for these services.
Alger Management makes payments to intermediaries that provide sub-accounting services
to omnibus accounts invested in the Funds. A portion of the fees paid by Alger Management
to intermediaries that provide sub-accounting services are charged back to the appropriate
Fund, subject to certain limitations, as approved by the Board. For the six months ended
April 30, 2018, Alger Management charged back to Alger Spectra Fund, Alger Responsible
Investing Fund, Alger Dynamic Opportunities Fund and Alger Emerging Markets Fund
$776,343, $13,558, $4,386 and $7,285, respectively, for these services, which are included in
transfer agent fees and expenses in the accompanying Statements of Operations.
(g) Trustees’ Fees: From November 1, 2017 through February 28, 2018 each Independent
Trustee received a fee of $27,250 for each board meeting attended, to a maximum of
$109,000 per annum, paid pro rata by each fund in the Alger Fund Complex, plus travel
expenses incurred for attending the meeting. The term “Alger Fund Complex” refers to
the Trust, The Alger Institutional Funds, The Alger Funds, The Alger Portfolios and Alger
Global Growth Fund, each of which is a registered investment company managed by Fred
Alger Management, Inc. The Independent Trustee appointed as Chairman of the Board of
Trustees receives additional compensation of $26,000 per annum paid pro rata by each fund
in the Alger Fund Complex. Additionally, each member of the Audit Committee receives
a fee of $2,500 for each Audit Committee meeting attended to a maximum of $10,000 per
annum, paid pro rata by each fund in the Alger Fund Complex.
Effective March 1, 2018, each Independent Trustee receives a fee of $28,000 for each board
meeting attended, to a maximum of $112,000 per annum, paid pro rata by each fund in
the Alger Fund Complex, plus travel expenses incurred for attending the meeting. The
Independent Trustee appointed as Chairman of the Board of Trustees receives additional
- 86 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
compensation of $30,000 per annum paid pro rata by each fund in the Alger Fund Complex.
Additionally, each member of the Audit Committee receives a fee of $2,750 for each Audit
Committee meeting attended to a maximum of $11,000 per annum, paid pro rata by each
fund in the Alger Fund Complex.
(h) Interfund Trades: The Funds engage in purchase and sale transactions with other funds
advised by Alger Management. There were no interfund trades during the six months ended
April 30, 2018.
(i) 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. There were no interfund loans outstanding as of April 30, 2018.
During the six months ended April 30, 2018, Alger Spectra Fund and Alger Emerging
Markets Fund incurred interfund loan interest expense of $1,368 and $298, respectively, and
Alger Spectra Fund, Alger Responsible Investing Fund and Alger Dynamic Opportunities
Fund earned interfund loan interest income of $19,277, $30 and $1,854, respectively.
(j) Other Transactions with Affiliates: Certain officers of the Trust are directors and officers of
Alger Management and Alger Inc. At April 30, 2018, Alger Management and its affiliated
entities owned the following shares:
SHARE CLASS | ||||||||
A | C | I | Y | Y-2 | Z | |||
Alger Spectra Fund | 1,777,022 | 17,175 | 16,862 | – | – | 107,889 | ||
Alger Responsible Investing Fund | – | – | – | – | – | 216,376 | ||
Alger Dynamic Opportunities Fund | – | 116 | – | – | – | 2,045,356 | ||
Alger Emerging Markets Fund | 107 | 104 | 1,045,503 | 475,975 | 13,124 | 130,798 |
NOTE 4 — Securities Transactions:
The following summarizes the securities transactions by the Trust, other than U.S.
Government securities, short-term securities, purchased options and short sales, for the six
months ended April 30, 2018:
PURCHASES | SALES | |||||
Alger Spectra Fund | $ | 2,228,300,231 | $ | 2,791,806,629 | ||
Alger Responsible Investing Fund | 6,967,659 | 9,445,827 | ||||
Alger Dynamic Opportunities Fund | 62,798,721 | 62,556,342 | ||||
Alger Emerging Markets Fund | 34,102,712 | 29,586,695 |
Transactions in foreign securities may involve certain considerations and risks not typically
associated with those of U.S. companies because of, among other factors, the level of
governmental supervision and regulation of foreign security markets, and the possibility of
- 87 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
political or economic instability. Additional risks associated with investing in the emerging
markets include increased volatility, limited liquidity, and less stringent regulatory and legal
systems.
NOTE 5 — Borrowing:
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(i). For the six months ended April 30, 2018, the Funds had the following
borrowings:
AVERAGE DAILY | WEIGHTED AVERAGE | ||||
BORROWING | INTEREST RATE | ||||
Alger Spectra Fund | $ | 188,276 | 2.25 | % | |
Alger Responsible Investing Fund | 3,504 | 3.75 | |||
Alger Dynamic Opportunities Fund | 58,017 | 3.96 | |||
Alger Emerging Markets Fund | 27,768 | 2.17 |
The highest amount borrowed from its custodian and other funds during the six months
ended April 30, 2018, for each Fund was as follows:
HIGHEST BORROWING | |||
Alger Spectra Fund | $ | 14,804,000 | |
Alger Responsible Investing Fund | 102,027 | ||
Alger Dynamic Opportunities Fund | 3,500,359 | ||
Alger Emerging Markets Fund | 1,898,000 |
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 separate classes.
The transactions of shares of beneficial interest were as follows:
- 88 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
FOR THE SIX MONTHS ENDED | FOR THE YEAR ENDED | ||||||||||||||||||||
APRIL 30, 2018 | OCTOBER 31, 2017 | ||||||||||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | ||||||||||||||||||
Alger Spectra Fund | |||||||||||||||||||||
Class A: | |||||||||||||||||||||
Shares sold | 4,689,049 | $ | 100,709,726 | 12,856,375 | $ | 239,905,766 | |||||||||||||||
Shares converted from Class C | — | — | 29 | 490 | |||||||||||||||||
Dividends reinvested | 3,558,411 | 73,338,846 | 1,644,904 | 27,798,404 | |||||||||||||||||
Shares redeemed | (23,347,244 | ) | (503,671,752 | ) | (33,591,471 | ) | (622,215,660 | ) | |||||||||||||
Net decrease | (15,099,784) | $ | (329,623,180) | (19,090,163) | $ | (354,511,000) | |||||||||||||||
Class C: | |||||||||||||||||||||
Shares sold | 2,043,537 | $ | 40,302,867 | 3,798,666 | $ | 66,027,658 | |||||||||||||||
Shares converted to Class C | — | — | (31 | ) | (490 | ) | |||||||||||||||
Dividends reinvested | 2,125,953 | 40,328,172 | 828,254 | 13,044,997 | |||||||||||||||||
Shares redeemed | (4,216,416 | ) | (83,588,084 | ) | (17,667,448 | ) | (301,931,263 | ) | |||||||||||||
Net decrease | (46,926 | ) | $ | (2,957,045 | ) | (13,040,559) | $ | (222,859,098) | |||||||||||||
Class I: | |||||||||||||||||||||
Shares sold | 4,113,600 | $ | 89,617,237 | 11,282,380 | $ | 212,245,481 | |||||||||||||||
Dividends reinvested | 2,087,291 | 43,457,405 | 913,763 | 15,579,664 | |||||||||||||||||
Shares redeemed | (9,336,352 | ) | (202,544,421 | ) | (47,271,011 | ) | (847,918,098 | ) | |||||||||||||
Net decrease | (3,135,461 | ) | $ | (69,469,779 | ) | (35,074,868) | $ | (620,092,953) | |||||||||||||
Class Z: | |||||||||||||||||||||
Shares sold | 33,299,843 | $ | 734,012,250 | 67,253,233 | $ | 1,241,772,627 | |||||||||||||||
Dividends reinvested | 6,557,963 | 138,307,144 | 1,735,218 | 29,863,103 | |||||||||||||||||
Shares redeemed | (16,548,614 | ) | (364,028,532 | ) | (35,283,706 | ) | (662,335,351 | ) | |||||||||||||
Net increase | 23,309,192 | $ | 508,290,862 | 33,704,745 | $ | 609,300,379 | |||||||||||||||
Alger Responsible Investing Fund | |||||||||||||||||||||
Class A: | |||||||||||||||||||||
Shares sold | 298,882 | $ | 3,096,189 | 459,031 | $ | 4,642,249 | |||||||||||||||
Dividends reinvested | 382,402 | 3,831,666 | 118,267 | 1,079,778 | |||||||||||||||||
Shares redeemed | (660,667 | ) | (7,070,580 | ) | (1,015,688 | ) | (10,125,302 | ) | |||||||||||||
Net increase (decrease) | 20,617 | $ | (142,725 | ) | (438,390 | ) | $ | (4,403,275 | ) | ||||||||||||
Class C: | |||||||||||||||||||||
Shares sold | 27,392 | $ | 258,507 | 70,974 | $ | 643,679 | |||||||||||||||
Dividends reinvested | 83,578 | 765,573 | 22,899 | 195,096 | |||||||||||||||||
Shares redeemed | (63,622 | ) | (626,587 | ) | (153,991 | ) | (1,441,859 | ) | |||||||||||||
Net increase (decrease) | 47,348 | $ | 397,493 | (60,118 | ) | $ | (603,084 | ) | |||||||||||||
Class I: | |||||||||||||||||||||
Shares sold | 57,209 | $ | 620,203 | 339,054 | $ | 3,372,102 | |||||||||||||||
Dividends reinvested | 173,672 | 1,738,454 | 119,765 | 1,091,057 | |||||||||||||||||
Shares redeemed | (276,770 | ) | (2,865,743 | ) | (2,414,099 | ) | (22,610,905 | ) | |||||||||||||
Net decrease | (45,889 | ) | $ | (507,086 | ) | (1,955,280 | ) | $ | (18,147,746 | ) | |||||||||||
Class Z: | |||||||||||||||||||||
Shares sold | 408,072 | $ | 4,493,929 | 906,629 | $ | 9,106,205 | |||||||||||||||
Dividends reinvested | 143,176 | 1,443,217 | 3,678 | 33,576 | |||||||||||||||||
Shares redeemed | (117,091 | ) | (1,238,363 | ) | (125,518 | ) | (1,251,533 | ) | |||||||||||||
Net increase | 434,157 | $ | 4,698,783 | 784,789 | $ | 7,888,248 |
- 89 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
FOR THE SIX MONTHS ENDED | FOR THE YEAR ENDED | ||||||||||||||
APRIL 30, 2018 | OCTOBER 31, 2017 | ||||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | ||||||||||||
Alger Dynamic Opportunities Fund | |||||||||||||||
Class A: | |||||||||||||||
Shares sold | 260,047 | $ | 3,474,199 | 536,821 | $ | 7,080,010 | |||||||||
Dividends reinvested | 129,388 | 1,685,930 | 6,496 | 78,411 | |||||||||||
Shares redeemed | (402,797 | ) | (5,452,003 | ) | (1,081,350 | ) | (13,429,639 | ) | |||||||
Net decrease | (13,362 | ) | $ | (291,874 | ) | (538,033 | ) | $ | (6,271,218 | ) | |||||
Class C: | |||||||||||||||
Shares sold | 27,695 | $ | 350,591 | 79,633 | $ | 979,614 | |||||||||
Dividends reinvested | 32,465 | 397,699 | 1,879 | 21,569 | |||||||||||
Shares redeemed | (82,723 | ) | (1,044,798 | ) | (238,666 | ) | (2,845,827 | ) | |||||||
Net decrease | (22,563 | ) | $ | (296,508 | ) | (157,154 | ) | $ | (1,844,644 | ) | |||||
Class Z: | |||||||||||||||
Shares sold | 564,004 | $ | 7,776,661 | 765,427 | $ | 9,949,678 | |||||||||
Dividends reinvested | 224,252 | 2,987,036 | 11,829 | 145,260 | |||||||||||
Shares redeemed | (296,109 | ) | (4,107,126 | ) | (1,195,602 | ) | (15,730,903 | ) | |||||||
Net increase (decrease) | 492,147 | $ | 6,656,571 | (418,346 | ) | $ | (5,635,965 | ) | |||||||
Alger Emerging Markets Fund | |||||||||||||||
Class A: | |||||||||||||||
Shares sold | 258,755 | $ | 2,987,677 | 314,886 | $ | 3,232,709 | |||||||||
Dividends reinvested | 23,057 | 251,780 | — | — | |||||||||||
Shares redeemed | (120,064 | ) | (1,381,913 | ) | (334,666 | ) | (3,323,884 | ) | |||||||
Net increase (decrease) | 161,748 | $ | 1,857,544 | (19,780 | ) | $ | (91,175 | ) | |||||||
Class C: | |||||||||||||||
Shares sold | 111,561 | $ | 1,227,285 | 121,933 | $ | 1,149,019 | |||||||||
Dividends reinvested | 11,022 | 115,617 | — | — | |||||||||||
Shares redeemed | (23,411 | ) | (253,503 | ) | (113,432 | ) | (1,049,223 | ) | |||||||
Net increase | 99,172 | $ | 1,089,399 | 8,501 | $ | 99,796 | |||||||||
Class I: | |||||||||||||||
Shares sold | 283,477 | $ | 3,232,717 | 794,297 | $ | 8,084,928 | |||||||||
Dividends reinvested | 65,609 | 712,510 | — | — | |||||||||||
Shares redeemed | (367,090 | ) | (4,203,183 | ) | (307,686 | ) | (2,874,565 | ) | |||||||
Net increase (decrease) | (18,004 | ) | $ | (257,956 | ) | 486,611 | $ | 5,210,363 | |||||||
Class Y: | |||||||||||||||
Shares sold | — | $ | — | 446,369 | $ | 5,004,910 | |||||||||
Dividends reinvested | 17,512 | 191,397 | — | — | |||||||||||
Shares redeemed | — | — | (203 | ) | (2,291 | ) | |||||||||
Net increase | 17,512 | $ | 191,397 | 446,166 | $ | 5,002,619 |
- 90 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
FOR THE SIX MONTHS ENDED | FOR THE YEAR ENDED | |||||||||||
APRIL 30, 2018 | OCTOBER 31, 2017 | |||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | |||||||||
Alger Emerging Markets Fund | ||||||||||||
Class Y-2: | ||||||||||||
Dividends reinvested | 526 | $ | 5,738 | — | $ | — | ||||||
Net increase | 526 | $ | 5,738 | — | $ | — | ||||||
Class Z: | ||||||||||||
Shares sold | 568,582 | $ | 6,614,878 | 953,879 | $ | 9,358,303 | ||||||
Dividends reinvested | 96,004 | 1,053,169 | — | — | ||||||||
Shares redeemed | (279,608 | ) | (3,195,441 | ) | (420,078 | ) | (3,865,792 | ) | ||||
Net increase | 384,978 | $ | 4,472,606 | 533,801 | $ | 5,492,511 |
NOTE 7 — Income Tax Information:
At October 31, 2017, Alger Emerging Markets Fund, for federal income tax purposes, had
capital loss carryforwards of $3,130,215. These amounts will not be subject to expiration
under the Regulated Investment Company Modernization Act of 2010, and these amounts
may be applied against future net realized gains until their utilization.
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is
determined annually and is attributable primarily to the tax deferral of losses on wash sales,
U.S. Internal Revenue Code Section 988 currency transactions, nondeductible expenses
on dividends sold short, 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 following is a summary of the inputs used as of April 30, 2018, in valuing the Funds’
investments carried at fair value on a recurring basis. Based upon the nature, characteristics,
and risks associated with their investments, the Funds have determined that presenting them
by security type and sector is appropriate.
Alger Spectra Fund | TOTAL FUND | LEVEL 1 | LEVEL 2 | LEVEL 3 | ||||||||
COMMON STOCKS | ||||||||||||
Consumer Discretionary | $ | 1,005,426,351 | $ | 994,942,431 | $ | 10,483,920 | — | |||||
Consumer Staples | 49,696,454 | 49,696,454 | — | — | ||||||||
Energy | 64,661,486 | 64,661,486 | — | — | ||||||||
Financials | 367,728,350 | 367,728,350 | — | — | ||||||||
Health Care | 842,686,428 | 842,686,428 | — | — | ||||||||
Industrials | 488,047,822 | 488,047,822 | — | — | ||||||||
Information Technology | 2,643,506,465 | 2,638,422,008 | 3,081,778 | $ | 2,002,679 | |||||||
Materials | 187,732,081 | 187,732,081 | — | — | ||||||||
Telecommunication Services | 31,213,499 | 31,213,499 | — | — | ||||||||
TOTAL COMMON STOCKS | $ | 5,680,698,936 | $ | 5,665,130,559 | $ | 13,565,698 | $ | 2,002,679 |
- 91 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Alger Spectra Fund | TOTAL FUND | LEVEL 1 | LEVEL 2 | LEVEL 3 | |||||||||||
MASTER LIMITED PARTNERSHIP | |||||||||||||||
Financials | $ | 30,633,010 | $ | 30,633,010 | — | — | |||||||||
PREFERRED STOCKS | |||||||||||||||
Health Care | 13,323,200 | — | — | $ | 13,323,200 | ||||||||||
Information Technology | 9,231,625 | — | — | 9,231,625 | |||||||||||
TOTAL PREFERRED STOCKS | $ | 22,554,825 | — | — | $ | 22,554,825 | |||||||||
REAL ESTATE INVESTMENT TRUST | |||||||||||||||
Real Estate | 131,004,897 | 131,004,897 | — | — | |||||||||||
SPECIAL PURPOSE VEHICLE | |||||||||||||||
Financials | 3,327,097 | — | — | 3,327,097 | |||||||||||
TOTAL INVESTMENTS IN | |||||||||||||||
SECURITIES | $ | 5,868,218,765 | $ | 5,826,768,466 | $ | 13,565,698 | $ | 27,884,601 | |||||||
SECURITIES SOLD SHORT | |||||||||||||||
COMMON STOCKS | |||||||||||||||
Consumer Discretionary | $ | 20,987,153 | $ | 20,987,153 | — | — | |||||||||
Financials | 11,276,040 | 11,276,040 | — | — | |||||||||||
Health Care | 6,221,040 | — | $ | 6,221,040 | — | ||||||||||
Industrials | 18,549,962 | 18,549,962 | — | — | |||||||||||
Information Technology | 96,816,698 | 96,816,698 | — | — | |||||||||||
Materials | 10,280,925 | 10,280,925 | — | — | |||||||||||
TOTAL COMMON STOCKS | $ | 164,131,818 | $ | 157,910,778 | $ | 6,221,040 | — | ||||||||
Alger Responsible Investing Fund | TOTAL FUND | LEVEL 1 | LEVEL 2 | LEVEL 3 | |||||||||||
COMMON STOCKS | |||||||||||||||
Consumer Discretionary | $ | 11,121,465 | $ | 11,121,465 | — | — | |||||||||
Consumer Staples | 1,756,056 | 1,756,056 | — | — | |||||||||||
Energy | 452,400 | 452,400 | — | — | |||||||||||
Financials | 3,239,598 | 3,239,598 | — | — | |||||||||||
Health Care | 8,103,891 | 8,103,891 | — | — | |||||||||||
Industrials | 7,576,208 | 7,576,208 | — | — | |||||||||||
Information Technology | 24,939,843 | 24,939,843 | — | — | |||||||||||
Materials | 493,037 | 493,037 | — | — | |||||||||||
TOTAL COMMON STOCKS | $ | 57,682,498 | $ | 57,682,498 | — | — | |||||||||
REAL ESTATE INVESTMENT TRUST | |||||||||||||||
Real Estate | 1,371,755 | 1,371,755 | — | — | |||||||||||
TOTAL INVESTMENTS IN | |||||||||||||||
SECURITIES | $ | 59,054,253 | $ | 59,054,253 | — | — | |||||||||
Alger Dynamic Opportunities Fund | TOTAL FUND | LEVEL 1 | LEVEL 2 | LEVEL 3 | |||||||||||
COMMON STOCKS | |||||||||||||||
Consumer Discretionary | $ | 9,620,080 | $ | 9,391,741 | $ | 228,339 | — | ||||||||
Consumer Staples | 410,194 | — | 410,194 | — | |||||||||||
Energy | 1,460,381 | 1,460,381 | — | — | |||||||||||
Financials | 5,637,993 | 5,637,993 | — | — | |||||||||||
Health Care | 16,393,472 | 16,393,472 | — | — | |||||||||||
Industrials | 12,222,452 | 12,222,452 | — | — | |||||||||||
Information Technology | 30,765,428 | 29,555,153 | 1,172,290 | $ | 37,985 | ||||||||||
Materials | 409,688 | 409,688 | — | — | |||||||||||
Real Estate | 2,053,324 | 2,053,324 | — | — | |||||||||||
TOTAL COMMON STOCKS | $ | 78,973,012 | $ | 77,124,204 | $ | 1,810,823 | $ | 37,985 |
- 92 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Alger Dynamic Opportunities Fund | TOTAL FUND | LEVEL 1 | LEVEL 2 | LEVEL 3 | |||||||||||
PREFERRED STOCKS | |||||||||||||||
Health Care | $ | 124,254 | — | — | $ | 124,254 | |||||||||
Information Technology | 154,911 | — | — | 154,911 | |||||||||||
TOTAL PREFERRED STOCKS | $ | 279,165 | — | — | $ | 279,165 | |||||||||
PURCHASED OPTIONS | |||||||||||||||
Consumer Discretionary | 343,710 | $ | 87,410 | $ | 256,300 | — | |||||||||
Health Care | 127,270 | 127,270 | — | — | |||||||||||
Information Technology | 234,560 | 234,560 | — | — | |||||||||||
Market Indices | 12,610 | 12,610 | — | — | |||||||||||
TOTAL PURCHASED OPTIONS | $ | 718,150 | $ | 461,850 | $ | 256,300 | — | ||||||||
REAL ESTATE INVESTMENT TRUST | |||||||||||||||
Real Estate | 406,405 | 406,405 | — | — | |||||||||||
RIGHTS | |||||||||||||||
Health Care | 411,256 | — | — | 411,256 | * | ||||||||||
SPECIAL PURPOSE VEHICLE | |||||||||||||||
Financials | 195,098 | — | — | 195,098 | |||||||||||
TOTAL INVESTMENTS IN | |||||||||||||||
SECURITIES | $ | 80,983,086 | $ | 77,992,459 | $ | 2,067,123 | $ | 923,504 | |||||||
SECURITIES SOLD SHORT | |||||||||||||||
COMMON STOCKS | |||||||||||||||
Consumer Discretionary | 4,030,471 | 3,818,376 | 212,095 | — | |||||||||||
Consumer Staples | 738,990 | 738,990 | — | — | |||||||||||
Financials | 4,471,221 | 4,471,221 | — | — | |||||||||||
Health Care | 3,285,500 | 3,285,500 | — | — | |||||||||||
Industrials | 3,390,748 | 3,390,748 | — | — | |||||||||||
Information Technology | 5,047,641 | 5,047,641 | — | — | |||||||||||
Market Indices | 1,452,884 | 1,452,884 | — | — | |||||||||||
Materials | 237,637 | 237,637 | — | — | |||||||||||
Miscellaneous | 574,206 | 574,206 | — | — | |||||||||||
Utilities | 166,836 | 166,836 | — | — | |||||||||||
TOTAL COMMON STOCKS | $ | 23,396,134 | $ | 23,184,039 | $ | 212,095 | — | ||||||||
MASTER LIMITED PARTNERSHIP | �� | ||||||||||||||
Financials | 1,581 | 1,581 | — | — | |||||||||||
REAL ESTATE INVESTMENT TRUST | |||||||||||||||
Real Estate | 1,678,925 | 1,678,925 | — | — | |||||||||||
TOTAL SECURITIES SOLD | |||||||||||||||
SHORT | $ | 25,076,640 | $ | 24,864,545 | $ | 212,095 | — | ||||||||
Escrow receivable | $ | 147,206 | — | $ | 147,206 | ** | — | ||||||||
Alger Emerging Markets Fund | TOTAL FUND | LEVEL 1 | LEVEL 2 | LEVEL 3 | |||||||||||
COMMON STOCKS | |||||||||||||||
Consumer Discretionary | $ | 10,932,148 | $ | 3,253,799 | $ | 7,678,349 | — | ||||||||
Consumer Staples | 4,705,540 | 615,272 | 4,090,268 | — | |||||||||||
Energy | 2,961,944 | 772,476 | 2,189,468 | — | |||||||||||
Financials | 18,400,626 | 3,107,758 | 15,292,868 | — | |||||||||||
Health Care | 3,245,958 | — | 3,245,958 | — | |||||||||||
Industrials | 4,252,972 | 1,337,092 | 2,915,880 | — | |||||||||||
Information Technology | 16,702,639 | 5,216,257 | 11,486,382 | — | |||||||||||
Materials | 7,076,282 | 1,976,389 | 5,099,893 | — | |||||||||||
Utilities | 844,396 | — | 844,396 | — | |||||||||||
TOTAL COMMON STOCKS | $ | 69,122,505 | $ | 16,279,043 | $ | 52,843,462 | — |
- 93 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Alger Emerging Markets Fund | TOTAL FUND | LEVEL 1 | LEVEL 2 | LEVEL 3 | ||||||
PREFERRED STOCKS | ||||||||||
Energy | $ | 993,679 | $ | 993,679 | — | — | ||||
SPECIAL PURPOSE VEHICLE | ||||||||||
Financials | 52,988 | — | — | $ | 52,988 | |||||
TOTAL INVESTMENTS IN | ||||||||||
SECURITIES | $ | 70,169,172 | $ | 17,272,722 | $ | 52,843,462 | $ | 52,988 |
*Alger Dynamic Opportunities Fund’s holdings of Adolor Corp.’s rights are classified as a Level 3 investment and
fair valued at zero as of April 30, 2018.
**Amounts held for indemnification claims of Sumitomo Dainippon Pharma Co., Ltd. following its acquisition of
Tolero Pharmaceuticals, Inc.
FAIR VALUE | ||||
MEASUREMENTS | ||||
USING SIGNIFICANT | ||||
UNOBSERVABLE | ||||
INPUTS (LEVEL 3) | ||||
Alger Spectra Fund | Common Stocks | |||
Opening balance at November 1, 2017 | $ | 2,002,679 | * | |
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | (51,705 | ) | ||
Included in net change in unrealized appreciation (depreciation) on investments | 51,705 | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at April 30, 2018 | 2,002,679 | |||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | — | ||
Alger Spectra Fund | Corporate Bonds | |||
Opening balance at November 1, 2017 | $ | 0 | * | |
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | (836 | ) | ||
Included in net change in unrealized appreciation (depreciation) on investments | 836 | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at April 30, 2018 | — | |||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | — |
- 94 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
FAIR VALUE | ||||
MEASUREMENTS | ||||
USING SIGNIFICANT | ||||
UNOBSERVABLE | ||||
INPUTS (LEVEL 3) | ||||
Alger Spectra Fund | Preferred Stocks | |||
Opening balance at November 1, 2017 | $ | 28,143,318 | * | |
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | (3,488,835 | ) | ||
Included in net change in unrealized appreciation (depreciation) on investments | (2,099,658 | ) | ||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at April 30, 2018 | 22,554,825 | |||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | (5,588,493 | ) | |
Special Purpose | ||||
Alger Spectra Fund | Vehicle | |||
Opening balance at November 1, 2017 | $ | 3,277,682 | ||
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | — | |||
Included in net change in unrealized appreciation (depreciation) on investments | 49,415 | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at April 30, 2018 | 3,327,097 | |||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | 49,415 | ||
Alger Spectra Fund | Warrants | |||
Opening balance at November 1, 2017 | $ | 0 | * | |
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | (837,448 | ) | ||
Included in net change in unrealized appreciation (depreciation) on investments | 837,448 | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at April 30, 2018 | — | |||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | — |
- 95 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
FAIR VALUE | ||||
MEASUREMENTS | ||||
USING SIGNIFICANT | ||||
UNOBSERVABLE | ||||
INPUTS (LEVEL 3) | ||||
Alger Responsible Investing Fund | Common Stocks | |||
Opening balance at November 1, 2017 | $ | 0 | * | |
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | (1,049 | ) | ||
Included in net change in unrealized appreciation (depreciation) on investments | 1,049 | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at April 30, 2018 | — | |||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | — | ||
Alger Responsible Investing Fund | Corporate Bonds | |||
Opening balance at November 1, 2017 | $ | 0 | * | |
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | (11 | ) | ||
Included in net change in unrealized appreciation (depreciation) on investments | 11 | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at April 30, 2018 | — | |||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | — | ||
Alger Responsible Investing Fund | Preferred Stocks | |||
Opening balance at November 1, 2017 | $ | 0 | * | |
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | (66,854 | ) | ||
Included in net change in unrealized appreciation (depreciation) on investments | 66,854 | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at April 30, 2018 | — | |||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | — |
- 96 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
FAIR VALUE | ||||
MEASUREMENTS | ||||
USING SIGNIFICANT | ||||
UNOBSERVABLE | ||||
INPUTS (LEVEL 3) | ||||
Alger Responsible Investing Fund | Warrants | |||
Opening balance at November 1, 2017 | $ | 0 | * | |
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | (10,508 | ) | ||
Included in net change in unrealized appreciation (depreciation) on investments | 10,508 | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at April 30, 2018 | — | |||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | — | ||
FAIR VALUE | ||||
MEASUREMENTS | ||||
USING SIGNIFICANT | ||||
UNOBSERVABLE | ||||
INPUTS (LEVEL 3) | ||||
Alger Dynamic Opportunities Fund | Common Stocks | |||
Opening balance at November 1, 2017 | $ | 37,985 | ||
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | — | |||
Included in net change in unrealized appreciation (depreciation) on investments | — | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at April 30, 2018 | 37,985 | |||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | — |
- 97 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
FAIR VALUE | ||||
MEASUREMENTS | ||||
USING SIGNIFICANT | ||||
UNOBSERVABLE | ||||
INPUTS (LEVEL 3) | ||||
Alger Dynamic Opportunities Fund | Preferred Stocks | |||
Opening balance at November 1, 2017 | $ | 304,317 | ||
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | (3,871 | ) | ||
Included in net change in unrealized appreciation (depreciation) on investments | (1,976 | ) | ||
Purchases and sales | ||||
Purchases | — | |||
Sales | (19,305 | ) | ||
Closing balance at April 30, 2018 | 279,165 | |||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | (4,970 | ) | |
Alger Dynamic Opportunities Fund | Rights | |||
Opening balance at November 1, 2017 | $ | 360,139 | * | |
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | — | |||
Included in net change in unrealized appreciation (depreciation) on investments | 51,117 | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at April 30, 2018 | 411,256 | * | ||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | 51,117 | ||
Special Purpose | ||||
Alger Dynamic Opportunities Fund | Vehicle | |||
Opening balance at November 1, 2017 | $ | 192,201 | ||
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | — | |||
Included in net change in unrealized appreciation (depreciation) on investments | 2,897 | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at April 30, 2018 | 195,098 | |||
Net change in unrealized appreciation (depreciation) attributable to investments | ||||
still held at April 30, 2018 | $ | 2,897 |
- 98 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
FAIR VALUE | |||
MEASUREMENTS | |||
USING SIGNIFICANT | |||
UNOBSERVABLE | |||
INPUTS (LEVEL 3) | |||
Special Purpose | |||
Alger Emerging Markets Fund | Vehicle | ||
Opening balance at November 1, 2017 | $ | 52,201 | |
Transfers into Level 3 | — | ||
Transfers out of Level 3 | — | ||
Total gains or losses | |||
Included in net realized gain (loss) on investments | — | ||
Included in net change in unrealized appreciation (depreciation) on investments | 787 | ||
Purchases and sales | |||
Purchases | — | ||
Sales | — | ||
Closing balance at April 30, 2018 | 52,988 | ||
Net change in unrealized appreciation (depreciation) attributable to investments | |||
still held at April 30, 2018 | $ | 787 |
* Includes securities that are fair valued at $0.
The following table provides quantitative information about our Level 3 fair value
measurements of our investments as of April 30, 2018. In addition to the techniques and
inputs noted in the table below, according to our valuation policy we may also use other
valuation techniques and methodologies when determining our fair value measurements.
The table below is not intended to be all-inclusive, but rather provides information on the
Level 3 inputs as they relate to our fair value measurements.
Fair Value | Valuation | Unobservable | Weighted | ||||
April 30, 2018 | Methodology | Input | Input/Range | Average Inputs | |||
Alger Spectra Fund | |||||||
Common Stocks | $ | 2,002,679 | Market | Market Quotation | N/A* | N/A | |
Approach | |||||||
Preferred Stocks | 8,736,036 | Income | Discount Rate | 41%-45% | N/A | ||
Approach | |||||||
Preferred Stocks | 13,818,789 | Market | Time to Exit | 2 years | N/A | ||
Approach | Volatility | 75.1% | N/A | ||||
Market Quotation | N/A* | N/A | |||||
Special Purpose Vehicle | 3,327,097 | Market | Revenue Multiple | 2.9x-4.2x | N/A | ||
Approach | |||||||
Alger Dynamic Opportunities Fund | |||||||
Common Stocks | $ | 37,985 | Market | Market Quotation | N/A* | N/A | |
Approach | |||||||
Preferred Stocks | 154,911 | Market | Market Quotation | N. A* | N/A | ||
Approach | |||||||
Preferred Stocks | 124,254 | Income | Discount Rate | 41%-45% | N/A | ||
Approach |
- 99 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Fair Value | Valuation | Unobservable | Weighted | ||||
April 30, 2018 | Methodology | Input | Input/Range | Average Inputs | |||
Alger Dynamic Opportunities Fund | |||||||
Rights | $ | 411,256 | Income | Discount Rate | 5.70%-27.40% | N/A | |
Approach | Probability of | 0% | N/A | ||||
Success | |||||||
Special Purpose Vehicle | 195,098 | Market | Revenue Multiple | 2.9x-4.2x | N/A | ||
Approach | |||||||
Alger Emerging Markets Fund | |||||||
Special Purpose Vehicle | $ | 52,988 | Market | Revenue Multiple | 2.9x-4.2x | N/A | |
Approach |
* The Fund utilized a market approach to fair value this security. The significant unobservable input used in the
valuation model was a market quotation available to the Fund at April 30, 2018.
The significant unobservable inputs used in the fair value measurement of the Fund’s
securities are revenue and EBITDA multiples, discount rates, and the probabilities of
success of certain outcomes. Significant increases and decreases in these inputs in isolation
and interrelationships between those inputs could result in significantly higher or lower fair
value measurements than those noted in the table above. Generally, increases in revenue and
EBITDA multiples, decreases in discount rates, and increases in the probabilities of success
results in higher fair value measurements, whereas decreases in revenues and EBITDA
multiples, increases in discount rates, and decreases in the probabilities of success results in
lower fair value measurements.
As of April 30, 2018, there were no transfers of securities between Level 1 and Level 2.
Certain of the Funds’ assets and liabilities are held at carrying amount or face value, which
approximates fair value for financial statement purposes. As of April 30, 2018, such assets
are categorized within the ASC 820 disclosure hierarchy as follows:
TOTAL FUND | LEVEL 1 | LEVEL 2 | LEVEL 3 | |||||||||
Cash, Foreign cash and Cash equivalents: | ||||||||||||
Alger Spectra Fund | $ | 224,366,287 | — | $ | 224,366,287 | — | ||||||
Collateral held for short sales | 79,457,640 | $ | 79,457,640 | — | — | |||||||
Alger Responsible Investing Fund | 1,267,782 | — | 1,267,782 | — | ||||||||
Alger Dynamic Opportunities Fund | 9,237,332 | — | 9,237,332 | — | ||||||||
Collateral held for short sales | 15,662,502 | 15,662,502 | — | — | ||||||||
Alger Emerging Markets Fund | 2,193,736 | 625,031 | 1,568,705 | — |
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.
- 100 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
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 indexes. The Funds purchase call options to increase their exposure to the stock
market 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, 2018, options were
used in accordance with these objectives.
The Funds’ option contracts were not subject to any rights of offset with any counterparty.
All of the Funds’ options were exchange traded which utilize a clearing house that acts as an
intermediary between buyer and seller, receiving initial and maintenance margin from both,
and guaranteeing performance of the option contract. The purchased options included on
the Statement of Assets and Liabilities are exchange traded and not subject to offsetting.
ASSET DERIVATIVES 2018 | LIABILITY DERIVATIVES 2018 | ||||||
Alger Dynamic Opportunities Fund | |||||||
Derivatives not accounted | Balance Sheet | Balance Sheet | |||||
for as hedging instruments | Location | Fair Value | Location | Fair Value | |||
Investments in | |||||||
Purchased Put Options | Securities, at value | $ | 718,150 | - | $ | – | |
Total | $ | 718,150 | $ | – |
For the six months ended April 30, 2018, Alger Dynamic Opportunities Fund had option
purchases of $639,808 and option sales of $3,173,913. The average number of contracts
for purchased options for the six months ended April 30, 2018, is $710,389. The effect of
derivative instruments on the accompanying Statement of Operations for the six months
ended April 30, 2018, is as follows:
NET REALIZED GAIN (LOSS) ON INVESTMENTS AND OPTIONS | |||
Alger Dynamic Opportunities Fund | |||
Derivatives not accounted for as hedging instruments | Options | ||
Purchased Options | $ | 78,034 | |
Written Options | (24,764 | ) | |
Total | $ | 53,270 |
- 101 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS, OPTIONS | ||
Alger Dynamic Opportunities Fund | ||
Derivatives not accounted for as hedging instruments | Options | |
Purchased Options | $ | 135,897 |
Total | $ | 135,897 |
NOTE 10 — Principal Risks:
Alger Spectra Fund – Investing in the stock market involves gains and losses and may not
be suitable for all investors. The value of an investment may move up or down, sometimes
rapidly and unpredictably, and may be worth more or less than what you invested. Stocks
tend to be more volatile than other investments such as bonds. Growth stocks tend to
be more volatile than other stocks as the prices of growth stocks tend to be higher in
relation to their companies’ earnings and may be more sensitive to market, political, and
economic developments. The market price of a security may increase after the Fund
borrows the security and sells it short, so that the Fund suffers a loss when it replaces the
borrowed security at the higher price. The use of short sales could increase the Fund’s
exposure to the market, magnifying losses and increasing volatility. The Fund may have a
significant portion of its assets invested in securities of companies conducting business in
a related group of industries within a sector, which may make the Fund more vulnerable to
unfavorable developments in that sector than a fund that has a more diversified portfolio.
Many technology companies have limited operating histories and prices of these companies’
securities have historically been more volatile than other securities due to increased
competition, government regulation, and risk of obsolescence due to the progress of
technological developments. Investing in companies of all capitalizations involve the risk
that smaller issuers may have limited product lines or financial resources, lack management
depth, or have more limited liquidity. The cost of borrowing money to leverage may exceed
the returns for the securities purchased or the securities purchased may actually go down in
value more quickly than if the Fund had not borrowed.
Alger Responsible Investing Fund – Investing in the stock market involves gains and losses
and may not be suitable for all investors. The value of an investment may move up or
down, sometimes rapidly and unpredictably, and may be worth more or less than what you
invested. Stocks tend to be more volatile than other investments such as bonds. Growth
stocks tend to be more volatile than other stocks as the prices of growth stocks tend to be
higher in relation to their companies’ earnings and may be more sensitive to market, political,
and economic developments. The Fund’s environmental, social and governance investment
criteria may limit the number of investment opportunities available to the Fund, and as
a result, at times the Fund’s returns may be less than those of funds that are not subject
to such special investment considerations. Moreover, companies that promote positive
environmental, social and/or governance policies may not perform as well as companies
that do not pursue such goals. The Fund may have a significant portion of its assets invested
in securities of companies conducting business in a related group of industries within a
sector, which may make the Fund more vulnerable to unfavorable developments in that
sector than a fund that has a more diversified portfolio. Many technology companies have
- 102 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
limited operating histories and prices of these companies’ securities have historically been
more volatile than other securities due to increased competition, government regulation,
and risk of obsolescence due to the progress of technological developments. Investing in
companies of all capitalizations involve the risk that smaller issuers may have limited product
lines or financial resources, lack management depth, or have more limited liquidity. The cost
of borrowing money to leverage may exceed the returns for the securities purchased or the
securities purchased may actually go down in value more quickly than if the Fund had not
borrowed.
Alger Dynamic Opportunities Fund – Investing in the stock market involves gains and
losses and may not be suitable for all investors. The value of an investment may move up or
down, sometimes rapidly and unpredictably, and may be worth more or less than what you
invested. The Fund’s large cash position may underperform relative to both equity and fixed-
income securities. Stocks tend to be more volatile than other investments such as bonds.
Growth stocks tend to be more volatile than other stocks as the prices of growth stocks tend
to be higher in relation to their companies’ earnings and may be more sensitive to market,
political, and economic developments. The Fund may have a significant portion of its assets
invested in securities of companies conducting business in a related group of industries
within a sector, which may make the Fund more vulnerable to unfavorable developments in
that sector than a fund that has a more diversified portfolio. Many technology companies
have limited operating histories and prices of these companies’ securities have historically
been more volatile than other securities due to increased competition, government
regulation, and risk of obsolescence due to the progress of technological developments.
Investing in companies of all capitalizations involve the risk that smaller issuers may have
limited product lines or financial resources, lack management depth, or have more limited
liquidity. Foreign investing involves special risks including currency risk and risks related
to political, social, or economic conditions. Issuers of convertible securities may not be
as strong financially as other companies, and may be more vulnerable to changes in the
economy. The price of the option selected as a hedge may not correlate precisely with
movements of the Fund’s portfolio securities. The Fund may lose money and be forced to
liquidate portfolio securities to meet settlement obligations. The market price of a security
may increase after the Fund borrows the security and sells it short, so that the Fund suffers a
loss when it replaces the borrowed security at the higher price. The use of short sales could
increase the Fund’s exposure to the market, magnifying losses and increasing volatility. The
Fund is a non-diversified investment company. Therefore, the Fund’s performance may be
more vulnerable to changes in the market value of a single issuer and more susceptible to
risks associated with a single economic, political, or regulatory occurrence than a fund that
has a diversified portfolio. The cost of borrowing money to leverage may exceed the returns
for the securities purchased or the securities purchased may actually go down in value more
quickly than if the Fund had not borrowed. Active trading of portfolio securities may incur
increased transaction costs and brokerage commissions, and potentially increase taxes that a
shareholder may pay, which can lower the actual return on an investment.
Alger Emerging Markets Fund – Investing in the stock market involves gains and losses
and may not be suitable for all investors. The value of an investment may move up or
- 103 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
down, sometimes rapidly and unpredictably, and may be worth more or less than what you
invested. Stocks tend to be more volatile than other investments such as bonds. Growth
stocks tend to be more volatile than other stocks as the prices of growth stocks tend to
be higher in relation to their companies’ earnings and may be more sensitive to market,
political, and economic developments. Investing in companies of all capitalizations involve
the risk that smaller issuers may have limited product lines or financial resources, lack
management depth, or have more limited liquidity. Special risks associated with investments
in emerging country issuers include exposure to currency fluctuations, less liquidity, less
developed or less efficient trading markets, lack of comprehensive company information,
political instability and differing auditing and legal standards, and securities of such issuers
can be more volatile than those of more mature economies. The cost of borrowing money
to leverage may exceed the returns for the securities purchased or the securities purchased
may actually go down in value more quickly than if the Fund had not borrowed.
NOTE 11 — Affiliated Securities:
The issuers of the securities listed below are deemed to be affiliates of the Funds because
the Funds or their affiliates owned 5% or more of the issuer’s voting securities during all or
part of the six months ended April 30, 2018. Purchase and sale transactions and dividend
income earned during the period were as follows:
Net Increase | |||||||||||||||||
Shares/ | Shares/ | (Decrease) | |||||||||||||||
Par at | Par at | in | Value at | ||||||||||||||
October 31, | Purchases/ | Sales/ | April 30, | Interest | Realized | Unrealized | April 30, | ||||||||||
Security | 2017 | Conversion | Conversion | 2018 | Income | Gain (Loss) | App(Dep) | 2018 | |||||||||
Alger Spectra Fund | |||||||||||||||||
Common Stocks | |||||||||||||||||
Choicestream, Inc. * | 178,292 | – | (178,292 | )* | – | – | $ | (51,705 | ) | $ | 51,705 | – | |||||
Preferred Stocks | |||||||||||||||||
Choicestream, Inc. , | |||||||||||||||||
Series A* | 1,537,428 | – | (1,537,428 | )* | – | – | (1,229,452 | ) | 1,229,452 | – | |||||||
Choicestream, Inc. , | |||||||||||||||||
Series B* | 3,765,639 | – | (3,765,639 | )* | – | – | (2,259,383 | ) | 2,259,383 | – | |||||||
Prosetta Biosciences, | |||||||||||||||||
Inc. , Series D | 2,912,012 | – | – | 2,912,012 | – | – | (349,441 | ) | $ | 8,736,036 | |||||||
Warrants | |||||||||||||||||
Choicestream, Inc., | |||||||||||||||||
6/22/26* | 838,287 | – | (838,287 | )* | – | – | (837,448 | ) | 837,448 | – | |||||||
Corporate Bonds | |||||||||||||||||
Choicestream, Inc., | |||||||||||||||||
11.00%, 8/5/18* | 838,287 | – | (838,287 | )* | – | – | (836 | ) | 836 | – | |||||||
Total | – | $ | (4,378,824) | $ | 4,029,383 | $ | 8,736,036 |
- 104 -
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Net Increase | |||||||||||||
Shares/ | Shares/ | (Decrease) | |||||||||||
Par at | Par at | in | Value at | ||||||||||
October 31, | Purchases/ | Sales/ | April 30, | Interest | Realized | Unrealized | April 30, | ||||||
Security | 2017 | Conversion | Conversion | 2018 | Income | Gain (Loss) | App(Dep) | 2018 | |||||
Alger Responsible Investing Fund | |||||||||||||
Common Stocks | |||||||||||||
Choicestream, Inc. * | 3,619 | – | (3,619 | )* | – | – | $ | (1,049 | ) | $ | 1,049 | – | |
Preferred Stocks | |||||||||||||
Choicestream, Inc. , | |||||||||||||
Series A* | 31,215 | – | (31,215 | )* | – | – | (24,962 | ) | 24,962 | – | |||
Choicestream, Inc. , | |||||||||||||
Series B* | 69,819 | – | (69,819 | )* | – | – | (41,892 | ) | 41,892 | – | |||
Warrants | |||||||||||||
Choicestream, Inc. , | |||||||||||||
6/22/26* | 10,518 | – | (10,518 | )* | – | – | (10,508 | ) | 10,508 | – | |||
Corporate Bonds | |||||||||||||
Choicestream, Inc. , | |||||||||||||
11.00%, 8/5/18* | 10,518 | – | (10,518 | )* | – | – | (11 | ) | 11 | – | |||
Total | – | $ | (78,422 | ) | $ | 78,422 | – |
Net Increase | |||||||||||
Shares/ | Shares/ | (Decrease) | |||||||||
Par at | Par at | in | Value at | ||||||||
October 31, | Purchases/ | Sales/ | April 30, | Interest | Realized | Unrealized | April 30, | ||||
Security | 2017 | Conversion | Conversion | 2018 | Income | Gain (Loss) | App(Dep) | 2018 | |||
Alger Dynamic Opportunities Fund | |||||||||||
Preferred Stocks | |||||||||||
Prosetta Biosciences, | |||||||||||
Inc. , Series D | 41,418 | – | – | 41,418 | – | – | $ | (4,970 | ) | $ | 124,254 |
Total | – | – | $ | (4,970 | ) | $ | 124,254 |
* The company was dissolved on December 20, 2017.
NOTE 12 — Subsequent Events:
Management of each Fund has evaluated events that have occurred subsequent to April
30, 2018, through the issuance date of the Financial Statements. Effective August 30, 2018,
Class C shares will automatically convert to Class A shares on the fifth business day of
the month following the tenth anniversary of the purchase. No other events have been
identified which require recognition and/or disclosure.
- 105 -
THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited)
Shareholder Expense Example
As a shareholder of a Fund, you incur two types of costs: transaction costs, if applicable,
including sales charges (loads) and redemption fees; and ongoing costs, including
management fees, distribution (12b-1) fees, if applicable, and other fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of investing in
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, 2017 and ending April 30, 2018.
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.
- 106 -
THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)
Annualized | |||||||||||
Expenses | Expense Ratio | ||||||||||
Beginning | Ending | Paid During | For the | ||||||||
Account | Account | the Six Months | Six Months | ||||||||
Value | Value | Ended | Ended | ||||||||
November 1, 2017 | April 30, 2018 | April 30, 2018(a) | April 30, 2018(b) | ||||||||
Alger Spectra Fund | |||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,008.70 | $ | 6.38 | 1.28 | % | ||
Hypothetical(c) | 1,000.00 | 1,018.45 | 6.41 | 1.28 | |||||||
Class C | Actual | 1,000.00 | 1,051.20 | 10.27 | 2.02 | ||||||
Hypothetical(c) | 1,000.00 | 1,014.78 | 10.09 | 2.02 | |||||||
Class I | Actual | 1,000.00 | 1,065.00 | 6.45 | 1.26 | ||||||
Hypothetical(c) | 1,000.00 | 1,018.55 | 6.31 | 1.26 | |||||||
Class Z | Actual | 1,000.00 | 1,066.60 | 4.92 | 0.96 | ||||||
Hypothetical(c) | 1,000.00 | 1,020.03 | 4.81 | 0.96 | |||||||
Alger Responsible Investing Fund | |||||||||||
Class A | Actual | $ | 1,000.00 | $ | 979.10 | $ | 6.62 | 1.35 | % | ||
Hypothetical(c) | 1,000.00 | 1,018.10 | 6.76 | 1.35 | |||||||
Class C | Actual | 1,000.00 | 1,020.30 | 10.72 | 2.14 | ||||||
Hypothetical(c) | 1,000.00 | 1,014.18 | 10.69 | 2.14 | |||||||
Class I | Actual | 1,000.00 | 1,033.60 | 6.81 | 1.35 | ||||||
Hypothetical(c) | 1,000.00 | 1,018.10 | 6.76 | 1.35 | |||||||
Class Z | Actual | 1,000.00 | 1,036.30 | 4.54 | 0.90 | ||||||
Hypothetical(c) | 1,000.00 | 1,020.33 | 4.51 | 0.90 | |||||||
Alger Dynamic Opportunities Fund | |||||||||||
Class A | Actual | $ | 1,000.00 | $ | 960.30 | $ | 12.64 | 2.60 | % | ||
Hypothetical(c) | 1,000.00 | 1,011.90 | 12.97 | 2.60 | |||||||
Class C | Actual | 1,000.00 | 999.20 | 16.90 | 3.41 | ||||||
Hypothetical(c) | 1,000.00 | 1,007.88 | 16.98 | 3.41 | |||||||
Class Z | Actual | 1,000.00 | 1,014.60 | 11.69 | 2.34 | ||||||
Hypothetical(c) | 1,000.00 | 1,013.19 | 11.68 | 2.34 | |||||||
Alger Emerging Markets Fund | |||||||||||
Class A | Actual | $ | 1,000.00 | $ | 960.30 | $ | 7.53 | 1.55 | % | ||
Hypothetical(c) | 1,000.00 | 1,017.06 | 7.75 | 1.55 | |||||||
Class C | Actual | 1,000.00 | 1,000.30 | 11.41 | 2.30 | ||||||
Hypothetical(c) | 1,000.00 | 1,013.39 | 11.48 | 2.30 | |||||||
Class I | Actual | 1,000.00 | 1,014.00 | 7.44 | 1.49 | ||||||
Hypothetical(c) | 1,000.00 | 1,017.41 | 7.45 | 1.49 | |||||||
Class Y | Actual | 1,000.00 | 1,016.10 | 4.90 | 0.98 | ||||||
Hypothetical(c) | 1,000.00 | 1,019.89 | 4.91 | 0.98 | |||||||
Class Y-2 | Actual | 1,000.00 | 1,016.00 | 4.65 | 0.93 | ||||||
Hypothetical(c) | 1,000.00 | 1,020.18 | 4.66 | 0.93 | |||||||
Class Z | Actual | 1,000.00 | 1,016.00 | 5.35 | 1.07 | ||||||
Hypothetical(c) | 1,000.00 | 1,019.49 | 5.36 | 1.07 |
- 107 -
THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)
(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.
- 108 -
THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)
Privacy Policy
U.S. Consumer Privacy Notice Rev. 12/20/16
FACTS | WHAT DOES ALGER DO WITH YOUR PERSONAL INFORMATION? |
Why? | Financial companies choose how they share your personal information. Federal law |
gives consumers the right to limit some but not all sharing. Federal law also requires us | |
to tell you how we collect, share, and protect your personal information. Please read this | |
notice carefully to understand what we do. | |
What? | The types of personal information we collect and share depend on the product or service |
you have with us. | |
This information can include: | |
• Social Security number and | |
• Account balances and | |
• Transaction history and | |
• Purchase history and | |
• Assets | |
When you are no longer our customer, we continue to share your information as | |
described in this notice. | |
How? | All financial companies need to share personal information to run their everyday business. |
In the section below, we list the reasons financial companies can share personal | |
information; the reasons Alger chooses to share; and whether you can limit this sharing. |
Reasons we can share your personal | Does | Can you limit |
information | Alger share? | this sharing? |
For our everyday business purposes — | Yes | No |
such as to process your transactions, maintain | ||
your account(s), respond to court orders and | ||
legal investigations, or report to credit bureaus | ||
For our marketing purposes —to offer our | Yes | No |
products and services to you | ||
For joint marketing with other financial | No | We don’t share |
companies | ||
For our affiliates’ everyday business | Yes | No |
purposes — information about your | ||
transactions and experiences | ||
For our affiliates’ everyday business | No | We don’t share |
purposes — information about your | ||
creditworthiness | ||
For nonaffiliates to market to you | No | We don’t share |
Questions? Call 1-800-342-2186 |
- 109 -
THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)
Who we are | |
Who is providing this notice? | Alger includes Fred Alger Management, Inc. and Fred |
Alger & Company, Incorporated as well as the following | |
funds: The Alger Funds, The Alger Funds II, The Alger | |
Institutional Funds, The Alger Portfolios, and Alger | |
Global Growth Fund. |
What we do | |
How does Alger | To protect your personal information from unauthorized |
protect my personal | access and use, we use security measures that comply |
information? | with federal law. These measures include computer |
safeguards and secured files and buildings. | |
How does Alger | We collect your personal information, for example, |
collect my personal | when you: |
information? | • Open an account or |
• Make deposits or withdrawals from your account or | |
• Give us your contact information or | |
• Provide account information or | |
• Pay us by check. | |
Why can’t I limit all sharing? | Federal law gives you the right to limit only |
• sharing for affiliates’ everyday business purposes | |
information about your credit worthiness | |
• affiliates from using your information to market to you | |
• sharing for nonaffiliates to market to you | |
State laws and individual companies may give you | |
additional rights to limit sharing. |
Definitions | |
Affiliates | Companies related by common ownership or control. |
They can be financial and nonfinancial companies. | |
• Our affiliates include Fred Alger Management, Inc. | |
and Fred Alger & Company, Incorporated as well as the | |
following funds: The Alger Funds, The Alger Funds II, | |
The Alger Institutional Funds, The Alger Portfolios, and | |
Alger Global Growth Fund. | |
Nonaffiliates | Companies not related by common ownership or |
control. They can be financial and nonfinancial | |
companies. | |
Joint marketing | A formal agreement between nonaffiliated financial |
companies that together market financial products or | |
services to you. |
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THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)
Proxy Voting Policies
A description of the policies and procedures the Trust uses to determine how to vote
proxies relating to portfolio securities and information regarding how the Fund voted
proxies relating to portfolio securities during the most recent 12-month period ended June
30 are available, without charge, by calling (800) 992-3863 or online on the Funds’ website
at www.alger.com or on the SEC’s website at www.sec.gov.
Fund Holdings
The Board of Trustees has adopted policies and procedures relating to disclosure of the
Funds’ portfolio securities. These policies and procedures recognize that there may be
legitimate business reasons for holdings to be disclosed and seek to balance those interests
to protect the proprietary nature of the trading strategies and implementation thereof by
the Funds.
Generally, the policies prohibit the release of information concerning portfolio holdings
which have not previously been made public to individual investors, institutional investors,
intermediaries that distribute the Funds’ shares and other parties which are not employed
by the Investment Manager or its affiliates except when the legitimate business purposes
for selective disclosure and other conditions (designed to protect the Funds) are acceptable.
The Funds 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 10 day lag and their month-end full portfolios with a 60 day lag on their website www.
alger.com and through other marketing communications (including printed advertising/
sales literature and/or shareholder telephone customer service centers). No compensation
or other consideration is received for the non-public disclosure of portfolio holdings
information.
In accordance with the foregoing, the 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
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THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)
agreement must be approved by the Trust’s Chief Compliance Officer, President, Secretary
or Assistant Secretary.
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 Investment 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 a Fund’s portfolio versus its peers or an index (such as P/E ratio, alpha, beta, capture
ratio, maximum drawdown, standard deviation, EPS forecasts, Sharpe ratio, information
ratio, R-squared, and market cap analysis), security specific impact on overall portfolio
performance, month-end top ten contributors to and detractors from performance,
breakdown of High Unit Volume Growth holdings vs. Positive Lifecycle Change holdings,
portfolio turnover, and requests of a similar nature. Please contact the Funds at (800) 992-
3863 to obtain such information.
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THE ALGER FUNDS II
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
DST Asset Manager Solutions, Inc.
P.O. Box 8480
Boston, MA 02266
Custodian
Brown Brothers Harriman & Company
50 Post Office Square
Boston, MA 02110
This report is submitted for the general information of the shareholders of The Alger
Funds II. 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.
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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 Funds II
By: /s/Hal Liebes
Hal Liebes
President
Date: June 26, 2018
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 26, 2018
By: /s/Michael D. Martins
Michael D. Martins
Treasurer
Date: June 26, 2018