THE ALGER FUNDS II | ALGER SPECTRA FUND
Schedule of Investments July 31, 2023 (Unaudited)
COMMON STOCKS—106.7% | SHARES | VALUE | ||||||
ADVERTISING—1.3% | ||||||||
The Trade Desk, Inc., Cl. A* | 437,357 | $ | 39,913,200 | |||||
AEROSPACE & DEFENSE—4.5% | ||||||||
HEICO Corp., Cl. A+ | 529,739 | 74,348,869 | ||||||
TransDigm Group, Inc.+ | 73,975 | 66,556,787 | ||||||
140,905,656 | ||||||||
AGRICULTURAL & FARM MACHINERY—0.4% | ||||||||
Deere & Co. | 28,467 | 12,229,423 | ||||||
APPAREL ACCESSORIES & LUXURY GOODS—0.5% | ||||||||
LVMH Moet Hennessy Louis Vuitton SE | 17,378 | 16,140,129 | ||||||
APPLICATION SOFTWARE—3.5% | ||||||||
Adobe, Inc.* | 72,719 | 39,716,936 | ||||||
Cadence Design Systems, Inc.* | 126,476 | 29,596,649 | ||||||
Datadog, Inc., Cl. A*,+ | 345,946 | 40,378,817 | ||||||
109,692,402 | ||||||||
AUTOMOBILE MANUFACTURERS—2.4% | ||||||||
Ferrari NV | 43,438 | 13,917,101 | ||||||
Tesla, Inc.*,+ | 227,847 | 60,933,123 | ||||||
74,850,224 | ||||||||
AUTOMOTIVE PARTS & EQUIPMENT—0.8% | ||||||||
Mobileye Global, Inc., Cl. A* | 676,334 | 25,822,432 | ||||||
BIOTECHNOLOGY—3.1% | ||||||||
Natera, Inc.*,+ | 1,267,777 | 57,328,876 | ||||||
Sarepta Therapeutics, Inc.* | 52,278 | 5,666,412 | ||||||
Vaxcyte, Inc.* | 382,892 | 18,401,789 | ||||||
Vertex Pharmaceuticals, Inc.* | 43,981 | 15,496,266 | ||||||
96,893,343 | ||||||||
BROADLINE RETAIL—8.4% | ||||||||
Amazon.com, Inc.*,+ | 1,543,891 | 206,387,349 | ||||||
MercadoLibre, Inc.*,+ | 45,974 | 56,918,111 | ||||||
263,305,460 | ||||||||
CARGO GROUND TRANSPORTATION—0.7% | ||||||||
Old Dominion Freight Line, Inc. | 55,524 | 23,291,763 | ||||||
CASINOS & GAMING—3.7% | ||||||||
DraftKings, Inc., Cl. A* | 683,211 | 21,712,446 | ||||||
Flutter Entertainment PLC* | 205,712 | 40,916,023 | ||||||
Las Vegas Sands Corp.* | 906,313 | 54,206,580 | ||||||
116,835,049 | ||||||||
COAL & CONSUMABLE FUELS—0.4% | ||||||||
Cameco Corp. | 320,184 | 11,257,669 | ||||||
COMMUNICATIONS EQUIPMENT—0.5% | ||||||||
Arista Networks, Inc.* | 97,603 | 15,137,249 | ||||||
CONSTRUCTION & ENGINEERING—0.5% | ||||||||
Quanta Services, Inc. | 79,320 | 15,992,498 | ||||||
CONSTRUCTION MACHINERY & HEAVY TRANSPORTATION EQUIPMENT—1.0% | ||||||||
Wabtec Corp. | 255,914 | 30,310,454 |
THE ALGER FUNDS II | ALGER SPECTRA FUND
Schedule of Investments July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—106.7% (CONT.) | SHARES | VALUE | ||||||
CONSTRUCTION MATERIALS—1.4% | ||||||||
Martin Marietta Materials, Inc. | 100,997 | $ | 45,091,121 | |||||
DIVERSIFIED BANKS—0.9% | ||||||||
JPMorgan Chase & Co. | 178,925 | 28,262,993 | ||||||
ELECTRICAL COMPONENTS & EQUIPMENT—0.5% | ||||||||
Vertiv Holdings Co., Cl. A | 640,512 | 16,659,717 | ||||||
ENVIRONMENTAL & FACILITIES SERVICES—1.7% | ||||||||
GFL Environmental, Inc. | 1,599,432 | 54,604,609 | ||||||
FINANCIAL EXCHANGES & DATA—2.0% | ||||||||
CME Group, Inc., Cl. A | 92,870 | 18,477,415 | ||||||
S&P Global, Inc.+ | 114,364 | 45,117,742 | ||||||
63,595,157 | ||||||||
HEALTHCARE DISTRIBUTORS—0.8% | ||||||||
McKesson Corp. | 61,203 | 24,628,087 | ||||||
HEALTHCARE EQUIPMENT—2.8% | ||||||||
Dexcom, Inc.* | 158,380 | 19,727,813 | ||||||
Intuitive Surgical, Inc.*,+ | 115,003 | 37,306,973 | ||||||
TransMedics Group, Inc.* | 329,442 | 30,697,406 | ||||||
87,732,192 | ||||||||
HEALTHCARE FACILITIES—0.9% | ||||||||
Acadia Healthcare Co., Inc.* | 352,067 | 27,823,855 | ||||||
HOTELS RESORTS & CRUISE LINES—1.1% | ||||||||
Trip.com Group Ltd.#,* | 817,781 | 33,561,732 | ||||||
INTERACTIVE MEDIA & SERVICES—8.3% | ||||||||
Alphabet, Inc., Cl. C*,+ | 869,880 | 115,789,727 | ||||||
Meta Platforms, Inc., Cl. A* | 434,734 | 138,506,252 | ||||||
Pinterest, Inc., Cl. A* | 284,784 | 8,255,888 | ||||||
262,551,867 | ||||||||
INTERNET SERVICES & INFRASTRUCTURE—0.6% | ||||||||
MongoDB, Inc., Cl. A* | 30,932 | 13,096,609 | ||||||
Snowflake, Inc., Cl. A* | 38,352 | 6,815,534 | ||||||
19,912,143 | ||||||||
LIFE SCIENCES TOOLS & SERVICES—1.5% | ||||||||
Danaher Corp. | 128,282 | 32,719,607 | ||||||
West Pharmaceutical Services, Inc. | 39,711 | 14,615,236 | ||||||
47,334,843 | ||||||||
MANAGED HEALTHCARE—1.9% | ||||||||
UnitedHealth Group, Inc. | 116,662 | 59,074,137 | ||||||
MOVIES & ENTERTAINMENT—3.1% | ||||||||
Liberty Media Corp. Series C Liberty Formula One* | 551,987 | 40,074,256 | ||||||
Netflix, Inc.* | 130,825 | 57,428,251 | ||||||
97,502,507 | ||||||||
OIL & GAS EQUIPMENT & SERVICES—1.0% | ||||||||
Schlumberger NV+ | 553,185 | 32,272,813 |
THE ALGER FUNDS II │ALGER SPECTRA FUND
Schedule of Investments July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—106.7% (CONT.) | SHARES | VALUE | ||||||
OIL & GAS EXPLORATION & PRODUCTION—3.1% | ||||||||
Diamondback Energy, Inc. | 203,483 | $ | 29,977,116 | |||||
EOG Resources, Inc. | 314,335 | 41,658,817 | ||||||
Pioneer Natural Resources Co.+ | 111,851 | 25,241,415 | ||||||
96,877,348 | ||||||||
OIL & GAS STORAGE & TRANSPORTATION—0.8% | ||||||||
Cheniere Energy, Inc. | 158,205 | 25,607,061 | ||||||
PHARMACEUTICALS—0.4% | ||||||||
Eli Lilly & Co. | 29,336 | 13,334,679 | ||||||
PROPERTY & CASUALTY INSURANCE—0.5% | ||||||||
The Progressive Corp. | 125,000 | 15,747,500 | ||||||
REAL ESTATE SERVICES—2.3% | ||||||||
CoStar Group, Inc.* | 284,641 | 23,901,305 | ||||||
FirstService Corp. | 305,966 | 47,923,454 | ||||||
71,824,759 | ||||||||
SEMICONDUCTOR MATERIALS & EQUIPMENT—0.4% | ||||||||
Enphase Energy, Inc.* | 74,759 | 11,350,659 | ||||||
SEMICONDUCTORS—13.0% | ||||||||
Advanced Micro Devices, Inc.*,+ | 208,423 | 23,843,591 | ||||||
Broadcom, Inc. | 6,835 | 6,142,273 | ||||||
First Solar, Inc.* | 71,249 | 14,777,043 | ||||||
Marvell Technology, Inc. | 947,003 | 61,678,305 | ||||||
NVIDIA Corp.+ | 512,910 | 239,677,714 | ||||||
ON Semiconductor Corp.* | 183,541 | 19,776,543 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd.# | 420,407 | 41,683,354 | ||||||
407,578,823 | ||||||||
SPECIALTY CHEMICALS—1.4% | ||||||||
Albemarle Corp. | 202,117 | 42,905,397 | ||||||
SYSTEMS SOFTWARE—14.3% | ||||||||
Microsoft Corp.+ | 1,160,877 | 389,961,802 | ||||||
Oracle Corp. | 230,911 | 27,069,696 | ||||||
ServiceNow, Inc.* | 57,299 | 33,405,317 | ||||||
450,436,815 | ||||||||
TECHNOLOGY HARDWARE STORAGE & PERIPHERALS—7.5% | ||||||||
Apple, Inc.+ | 1,208,136 | 237,338,317 | ||||||
TRANSACTION & PAYMENT PROCESSING SERVICES—2.8% | ||||||||
Toast, Inc., Cl. A* | 971,013 | 21,430,257 | ||||||
Visa, Inc., Cl. A+ | 285,947 | 67,978,180 | ||||||
89,408,437 | ||||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $2,168,947,109) | 3,355,594,519 |
PREFERRED STOCKS—0.3% | SHARES | VALUE | ||||||
BIOTECHNOLOGY—0.0% | ||||||||
Prosetta Biosciences, Inc., Series D*,@,(a),(b) | 2,912,012 | — |
THE ALGER FUNDS II │ALGER SPECTRA FUND
Schedule of Investments July 31, 2023 (Unaudited) (Continued)
PREFERRED STOCKS—0.3% (CONT.) | SHARES | VALUE | ||||||
DATA PROCESSING & OUTSOURCED SERVICES—0.3% | ||||||||
Chime Financial, Inc., Series G*,@,(a) | 188,583 | $ | 8,092,097 | |||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost $26,129,444) | 8,092,097 | |||||||
SPECIAL PURPOSE VEHICLE—0.4% | VALUE | |||||||
DATA PROCESSING & OUTSOURCED SERVICES—0.4% | ||||||||
Crosslink Ventures Capital C, LLC, Cl. A*,@,(a),(b) | 7,656,642 | |||||||
Crosslink Ventures Capital C, LLC, Cl. B*,@,(a),(b) | 4,793,868 | |||||||
12,450,510 | ||||||||
TOTAL SPECIAL PURPOSE VEHICLE | ||||||||
(Cost $11,925,000) | 12,450,510 | |||||||
Total Investments | ||||||||
(Cost $2,207,001,553) | 107.4 | % | $ | 3,376,137,126 | ||||
Affiliated Securities (Cost $25,029,054) | 12,450,510 | |||||||
Unaffiliated Securities (Cost $2,181,972,499) | 3,363,686,616 | |||||||
Securities Sold Short (Proceeds $215,044,660) | (7.3 | )% | (229,715,029 | ) | ||||
Liabilities in Excess of Other Assets | (0.1 | )% | (2,454,031 | ) | ||||
NET ASSETS | 100.0 | % | $ | 3,143,968,066 |
+ | All or a portion of this security is held as collateral for securities sold short. |
# | American Depositary Receipts. |
(a) | Security is valued in good faith at fair value determined using significant unobservable inputs pursuant to procedures established by the Valuation Designee (as defined in Note 2). |
(b) | Deemed an affiliate of the Fund in accordance with Section 2(a)(3) of the Investment Company Act of 1940. See Note 5 - Affiliated Securities. |
* | Non-income producing security. |
@ | Restricted security - Investment in security not registered under the Securities Act of 1933. Sales or transfers of the investment may be restricted only to qualified buyers. |
Security | Acquisition Date(s) | Acquisition Cost | % of net assets (Acquisition Date) | Market Value | % of net assets as of 7/31/2023 | |||||||||||||
Chime Financial, Inc., Series G | 8/24/21 | $ | 13,025,390 | 0.15 | % | $ | 8,092,097 | 0.26 | % | |||||||||
Crosslink Ventures Capital C, LLC, Cl. A | 10/2/20 | 7,350,000 | 0.10 | % | 7,656,642 | 0.24 | % | |||||||||||
Crosslink Ventures Capital C, LLC, Cl. B | 12/16/20 | 4,575,000 | 0.06 | % | 4,793,868 | 0.15 | % | |||||||||||
Prosetta Biosciences, Inc., Series D | 2/6/15 | 13,104,054 | 0.28 | % | 0 | 0.00 | % | |||||||||||
Total | $ | 20,542,607 | 0.65 | % |
See Notes to Financial Statements.
THE ALGER FUNDS II │ALGER SPECTRA FUND
Schedule of Investments - Securities Sold Short July 31, 2023 (Unaudited)
COMMON STOCKS—(7.3)% | SHARES | VALUE | ||||||
AEROSPACE & DEFENSE—(0.3)% | | |||||||
General Dynamics Corp. | (14,508 | ) | $ | (3,243,699 | ) | |||
Lockheed Martin Corp. | (6,875 | ) | (3,068,794 | ) | ||||
Textron, Inc. | (45,292 | ) | (3,522,359 | ) | ||||
(9,834,852 | ) | |||||||
APPAREL ACCESSORIES & LUXURY GOODS—(0.1)% | | |||||||
Carter’s, Inc. | (39,973 | ) | (2,998,375 | ) | ||||
APPAREL RETAIL—(0.1)% | | |||||||
Urban Outfitters, Inc. | (104,549 | ) | (3,802,447 | ) | ||||
APPLICATION SOFTWARE—(0.4)% | | |||||||
Aurora Innovation, Inc., Cl. A | (536,809 | ) | (1,760,734 | ) | ||||
Five9, Inc. | (104,198 | ) | (9,143,375 | ) | ||||
(10,904,109 | ) | |||||||
AUTOMOBILE MANUFACTURERS—(0.2)% | | |||||||
Thor Industries, Inc. | (44,136 | ) | (5,097,267 | ) | ||||
AUTOMOTIVE PARTS & EQUIPMENT—(0.2)% | | |||||||
QuantumScape Corp., Cl. A | (466,725 | ) | (6,212,110 | ) | ||||
BUILDING PRODUCTS—(0.1)% | | |||||||
Trane Technologies PLC | (12,312 | ) | (2,455,505 | ) | ||||
CABLE & SATELLITE—(0.2)% | | |||||||
Charter Communications, Inc., Cl. A | (15,426 | ) | (6,250,461 | ) | ||||
CASINOS & GAMING—(0.1)% | | |||||||
Caesars Entertainment, Inc. | (62,949 | ) | (3,715,250 | ) | ||||
CONSUMER FINANCE—(0.1)% | | |||||||
Capital One Financial Corp. | (28,104 | ) | (3,288,730 | ) | ||||
DIVERSIFIED BANKS—(0.1)% | | |||||||
SPDR S&P Regional Banking ETF | (47,074 | ) | (2,292,033 | ) | ||||
EDUCATION SERVICES—(0.1)% | | |||||||
Duolingo, Inc., Cl. A | (16,570 | ) | (2,571,498 | ) | ||||
ELECTRICAL COMPONENTS & EQUIPMENT—(0.1)% | | |||||||
Shoals Technologies Group, Inc., Cl. A | (178,444 | ) | (4,632,406 | ) | ||||
ELECTRONIC EQUIPMENT & INSTRUMENTS—(0.2)% | | |||||||
Cognex Corp. | (92,365 | ) | (5,044,976 | ) | ||||
EXCHANGE TRADED FUNDS—(0.2)% | | |||||||
ARK Innovation ETF | (53,093 | ) | (2,678,542 | ) | ||||
Renaissance IPO ETF | (71,563 | ) | (2,621,353 | ) | ||||
(5,299,895 | ) | |||||||
HEALTHCARE SERVICES—(0.1)% | | |||||||
CVS Health Corp. | (57,134 | ) | (4,267,338 | ) | ||||
HEALTHCARE SUPPLIES—(0.2)% | | |||||||
STAAR Surgical Co. | (100,712 | ) | (5,515,996 | ) | ||||
HOME FURNISHINGS—(0.2)% | | |||||||
Mohawk Industries, Inc. | (50,968 | ) | (5,419,937 | ) | ||||
HOUSEHOLD PRODUCTS—(0.3)% | | |||||||
The Clorox Co. | (60,209 | ) | (9,120,459 | ) |
THE ALGER FUNDS II │ALGER SPECTRA FUND
Schedule of Investments - Securities Sold Short July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—(7.3)% (CONT.) | SHARES | VALUE | ||||||
INDUSTRIAL MACHINERY & SUPPLIES & | ||||||||
COMPONENTS—(0.1)% | | |||||||
Lincoln Electric Holdings, Inc. | (16,273 | ) | $ | (3,266,154 | ) | |||
IT CONSULTING & OTHER SERVICES—(0.1)% | | |||||||
Accenture PLC, Cl. A | (10,055 | ) | (3,180,899 | ) | ||||
MARKET INDICES—(3.0)% | | |||||||
Direxion NASDAQ-100 Equal Weighted Index Shares | (228,978 | ) | (18,492,263 | ) | ||||
iShares MSCI United Kingdom ETF | (140,032 | ) | (4,663,066 | ) | ||||
iShares Russell Mid-Cap Growth ETF | (228,277 | ) | (22,720,410 | ) | ||||
SPDR S&P 500 ETF Trust | (108,162 | ) | (49,515,482 | ) | ||||
(95,391,221 | ) | |||||||
OTHER SPECIALTY RETAIL—(0.1)% | | |||||||
Dick’s Sporting Goods, Inc. | (21,993 | ) | (3,101,013 | ) | ||||
PACKAGED FOODS & MEATS—(0.3)% | | |||||||
Campbell Soup Co. | (92,549 | ) | (4,240,595 | ) | ||||
Hormel Foods Corp. | (77,545 | ) | (3,170,040 | ) | ||||
Kellogg Co. | (72,341 | ) | (4,838,889 | ) | ||||
(12,249,524 | ) | |||||||
PASSENGER AIRLINES—(0.1)% | | |||||||
Joby Aviation, Inc. | (327,194 | ) | (2,928,386 | ) | ||||
PROPERTY & CASUALTY INSURANCE—0.0% | | |||||||
Trupanion, Inc. | (31,384 | ) | (968,196 | ) | ||||
SEMICONDUCTORS—(0.2)% | | |||||||
Monolithic Power Systems, Inc. | (5,700 | ) | (3,189,093 | ) | ||||
Silicon Laboratories, Inc. | (23,187 | ) | (3,458,109 | ) | ||||
(6,647,202 | ) | |||||||
STEEL—(0.1)% | | |||||||
Steel Dynamics, Inc. | (30,576 | ) | (3,258,790 | ) | ||||
TOTAL COMMON STOCKS | ||||||||
(Proceeds $215,044,660) | $ | (229,715,029 | ) | |||||
Total Securities Sold Short | ||||||||
(Proceeds $215,044,660) | $ | (229,715,029 | ) |
See Notes to Financial Statements.
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments July 31, 2023 (Unaudited)
COMMON STOCKS—92.0% | SHARES | VALUE | ||||||
ADVERTISING—2.2% | | | ||||||
The Trade Desk, Inc., Cl. A*,+ | 81,258 | $ | 7,415,605 | |||||
AEROSPACE & DEFENSE—6.0% | | | ||||||
HEICO Corp. | 27,864 | 4,903,507 | ||||||
HEICO Corp., Cl. A+ | 10,776 | 1,512,412 | ||||||
Kratos Defense & Security Solutions, Inc.* | 38,194 | 576,347 | ||||||
TransDigm Group, Inc. | 15,146 | 13,627,159 | ||||||
20,619,425 | ||||||||
APPAREL RETAIL—0.1% | | | ||||||
MYT Netherlands Parent BV#,* | 52,415 | 220,143 | ||||||
APPLICATION SOFTWARE—7.5% | | | ||||||
AppFolio, Inc., Cl. A*,+ | 28,462 | 5,139,953 | ||||||
Datadog, Inc., Cl. A* | 28,892 | 3,372,274 | ||||||
Digital Turbine, Inc.* | 114,156 | 1,237,451 | ||||||
Everbridge, Inc.* | 2,061 | 63,561 | ||||||
HubSpot, Inc.* | 9,043 | 5,249,914 | ||||||
nCino, Inc.* | 31,422 | 1,016,502 | ||||||
Sprout Social, Inc., Cl. A* | 29,561 | 1,689,116 | ||||||
SPS Commerce, Inc.* | 16,842 | 3,038,128 | ||||||
Vertex, Inc., Cl. A* | 240,799 | 4,998,987 | ||||||
25,805,886 | ||||||||
ASSET MANAGEMENT & CUSTODY BANKS—1.4% | | | ||||||
Hamilton Lane, Inc., Cl. A | 20,519 | 1,814,495 | ||||||
StepStone Group, Inc., Cl. A | 102,121 | 2,866,537 | ||||||
4,681,032 | ||||||||
AUTOMOBILE MANUFACTURERS—0.9% | | | ||||||
BYD Co., Ltd., Cl. H | 26,351 | 938,600 | ||||||
Rivian Automotive, Inc., Cl. A* | 64,812 | 1,791,404 | ||||||
Tesla, Inc.* | 1,772 | 473,886 | ||||||
3,203,890 | ||||||||
AUTOMOTIVE PARTS & EQUIPMENT—0.5% | | | ||||||
Mobileye Global, Inc., Cl. A* | 47,947 | 1,830,616 | ||||||
BIOTECHNOLOGY—4.9% | | | ||||||
ACADIA Pharmaceuticals, Inc.* | 217,051 | 6,346,571 | ||||||
ADMA Biologics, Inc.* | 247,443 | 1,026,889 | ||||||
BioMarin Pharmaceutical, Inc.* | 30,995 | 2,725,390 | ||||||
Cabaletta Bio, Inc.*,+ | 144,757 | 1,971,590 | ||||||
Natera, Inc.*,+ | 63,972 | 2,892,814 | ||||||
Ultragenyx Pharmaceutical, Inc.* | 30,025 | 1,294,678 | ||||||
Vaxcyte, Inc.* | 11,004 | 528,852 | ||||||
16,786,784 | ||||||||
BROADLINE RETAIL—5.2% | | | ||||||
Amazon.com, Inc.*,+ | 79,500 | 10,627,560 | ||||||
Etsy, Inc.* | 17,585 | 1,787,515 | ||||||
MercadoLibre, Inc.*,+ | 2,112 | 2,614,762 | ||||||
Ollie’s Bargain Outlet Holdings, Inc.* | 40,991 | 2,987,424 | ||||||
18,017,261 | ||||||||
CABLE & SATELLITE—1.0% | | | ||||||
Charter Communications, Inc., Cl. A* | 8,311 | 3,367,534 |
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—92.0% (CONT.) | SHARES | VALUE | ||||||
CARGO GROUND TRANSPORTATION—0.8% | | | ||||||
RXO, Inc.* | 78,962 | $ | 1,741,112 | |||||
XPO, Inc.* | 14,568 | 1,008,688 | ||||||
2,749,800 | ||||||||
CASINOS & GAMING—1.2% | | | ||||||
DraftKings, Inc., Cl. A* | 73,364 | 2,331,508 | ||||||
Flutter Entertainment PLC* | 8,127 | 1,616,456 | ||||||
3,947,964 | ||||||||
COMMUNICATIONS EQUIPMENT—1.3% | | | ||||||
Arista Networks, Inc.*,+ | 29,262 | 4,538,244 | ||||||
CONSUMER FINANCE—0.2% | | | ||||||
Upstart Holdings, Inc.* | 12,411 | 852,512 | ||||||
DISTILLERS & VINTNERS—0.5% | | | ||||||
Constellation Brands, Inc., Cl. A | 6,734 | 1,837,035 | ||||||
DIVERSIFIED METALS & MINING—0.5% | | | ||||||
MP Materials Corp.* | 69,387 | 1,654,880 | ||||||
ELECTRONIC EQUIPMENT & INSTRUMENTS—1.0% | | | ||||||
908 Devices, Inc.*,+ | 341,794 | 2,378,886 | ||||||
Novanta, Inc.* | 6,789 | 1,200,974 | ||||||
3,579,860 | ||||||||
ENVIRONMENTAL & FACILITIES SERVICES—4.7% | | | ||||||
Casella Waste Systems, Inc., Cl. A* | 75,316 | 6,077,248 | ||||||
Montrose Environmental Group, Inc.* | 89,379 | 3,617,168 | ||||||
Waste Connections, Inc. | 45,200 | 6,380,884 | ||||||
16,075,300 | ||||||||
FOOTWEAR—0.5% | | | ||||||
Crocs, Inc.* | 16,572 | 1,795,576 | ||||||
HEALTHCARE DISTRIBUTORS—1.0% | | | ||||||
McKesson Corp.+ | 8,229 | 3,311,350 | ||||||
HEALTHCARE EQUIPMENT—8.4% | | | ||||||
Dexcom, Inc.* | 32,652 | 4,067,133 | ||||||
Glaukos Corp.* | 102,870 | 7,935,392 | ||||||
Impulse Dynamics PLC, Class E*,@,(a) | 1,273,271 | 4,201,794 | ||||||
Inogen, Inc.* | 73,842 | 603,289 | ||||||
Inspire Medical Systems, Inc.* | 8,381 | 2,412,136 | ||||||
Insulet Corp.* | 6,982 | 1,932,268 | ||||||
Intuitive Surgical, Inc.* | 2,855 | 926,162 | ||||||
Nevro Corp.* | 83,424 | 2,084,766 | ||||||
Tandem Diabetes Care, Inc.* | 17,369 | 606,525 | ||||||
TransMedics Group, Inc.*,+ | 45,821 | 4,269,601 | ||||||
29,039,066 | ||||||||
HEALTHCARE SERVICES—1.2% | | | ||||||
Agiliti, Inc.* | 176,647 | 3,033,029 | ||||||
NeoGenomics, Inc.* | 64,967 | 1,125,878 | ||||||
4,158,907 | ||||||||
HEALTHCARE TECHNOLOGY—0.5% | | | ||||||
Definitive Healthcare Corp., Cl. A* | 133,790 | 1,582,736 | ||||||
HOMEBUILDING—0.3% | | | ||||||
DR Horton, Inc. | 9,080 | 1,153,342 |
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—92.0% (CONT.) | SHARES | VALUE | ||||||
HOTELS RESORTS & CRUISE LINES—1.6% | ||||||||
Lindblad Expeditions Holdings, Inc.* | 149,984 | $ | 1,772,811 | |||||
Trip.com Group Ltd.#,* | 89,465 | 3,671,643 | ||||||
5,444,454 | ||||||||
HUMAN RESOURCE & EMPLOYMENT SERVICES—1.2% | ||||||||
Paylocity Holding Corp.* | 18,466 | 4,189,012 | ||||||
INTERACTIVE MEDIA & SERVICES—5.7% | ||||||||
Alphabet, Inc., Cl. A* | 38,440 | 5,101,757 | ||||||
Match Group, Inc.* | 73,792 | 3,432,066 | ||||||
Meta Platforms, Inc., Cl. A*,+ | 28,859 | 9,194,477 | ||||||
Pinterest, Inc., Cl. A* | 60,251 | 1,746,677 | ||||||
19,474,977 | ||||||||
INTERNET SERVICES & INFRASTRUCTURE—2.7% | ||||||||
MongoDB, Inc., Cl. A* | 7,987 | 3,381,696 | ||||||
Shopify, Inc., Cl. A*,+ | 88,978 | 6,013,133 | ||||||
9,394,829 | ||||||||
IT CONSULTING & OTHER SERVICES—0.8% | ||||||||
CI&T, Inc., Cl. A* | 47,925 | 285,633 | ||||||
Globant SA* | 14,769 | 2,580,587 | ||||||
2,866,220 | ||||||||
LEISURE FACILITIES—0.9% | ||||||||
Planet Fitness, Inc., Cl. A* | 43,176 | 2,916,107 | ||||||
LEISURE PRODUCTS—0.0% | ||||||||
Latham Group, Inc.* | 4,938 | 19,456 | ||||||
LIFE SCIENCES TOOLS & SERVICES—2.7% | ||||||||
Avantor, Inc.* | 72,296 | 1,487,129 | ||||||
Bio-Techne Corp. | 50,032 | 4,172,669 | ||||||
Sartorius Stedim Biotech | 11,236 | 3,515,421 | ||||||
9,175,219 | ||||||||
MANAGED HEALTHCARE—2.5% | ||||||||
Progyny, Inc.* | 205,569 | 8,584,561 | ||||||
MOVIES & ENTERTAINMENT—0.3% | ||||||||
Netflix, Inc.* ,+ | 2,172 | 953,443 | ||||||
OIL & GAS EQUIPMENT & SERVICES—1.8% | ||||||||
Core Laboratories, Inc. | 78,089 | 2,029,533 | ||||||
Dril-Quip, Inc.* | 88,104 | 2,281,012 | ||||||
Schlumberger NV | 33,173 | 1,935,313 | ||||||
6,245,858 | ||||||||
OIL & GAS EXPLORATION & PRODUCTION—2.0% | ||||||||
Diamondback Energy, Inc.+ | 23,268 | 3,427,842 | ||||||
Pioneer Natural Resources Co.+ | 15,506 | 3,499,239 | ||||||
6,927,081 | ||||||||
PERSONAL CARE PRODUCTS—0.2% | ||||||||
Oddity Tech Ltd., Cl. A* | 13,617 | 725,650 | ||||||
PHARMACEUTICALS—0.8% | ||||||||
Reata Pharmaceuticals, Inc., Cl. A*,+ | 16,747 | 2,772,968 |
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—92.0% (CONT.) | SHARES | VALUE | ||||||
REAL ESTATE SERVICES—3.0% | ||||||||
Compass, Inc., Cl. A* | 571,738 | $ | 2,395,582 | |||||
FirstService Corp. | 50,041 | 7,837,922 | ||||||
10,233,504 | ||||||||
REGIONAL BANKS—0.2% | ||||||||
Axos Financial, Inc.* | 3,525 | 165,675 | ||||||
Seacoast Banking Corp. of Florida | 19,113 | 472,282 | ||||||
Signature Bank | 44,390 | 2,220 | ||||||
640,177 | ||||||||
RESTAURANTS—0.4% | ||||||||
Kura Sushi USA, Inc., Cl. A* | 9,499 | 945,246 | ||||||
Wingstop, Inc. | 2,402 | 404,929 | ||||||
1,350,175 | ||||||||
SEMICONDUCTOR MATERIALS & EQUIPMENT—1.0% | ||||||||
SolarEdge Technologies, Inc.*,+ | 14,011 | 3,383,096 | ||||||
SEMICONDUCTORS—6.4% | ||||||||
Advanced Micro Devices, Inc.* | 16,204 | 1,853,737 | ||||||
Broadcom, Inc. | 3,064 | 2,753,464 | ||||||
Impinj, Inc.* | 33,761 | 2,249,158 | ||||||
Lattice Semiconductor Corp.* | 5,257 | 478,071 | ||||||
NVIDIA Corp.+ | 31,530 | 14,733,654 | ||||||
22,068,084 | ||||||||
SOFT DRINKS & NON-ALCOHOLIC BEVERAGES—0.3% | ||||||||
Celsius Holdings, Inc.* | 5,944 | 860,097 | ||||||
SYSTEMS SOFTWARE—3.2% | ||||||||
Microsoft Corp.+ | 32,885 | 11,046,729 | ||||||
Rapid7, Inc.* | 2,415 | 110,873 | ||||||
11,157,602 | ||||||||
TRADING COMPANIES & DISTRIBUTORS—0.8% | ||||||||
SiteOne Landscape Supply, Inc.* | 13,725 | 2,333,250 | ||||||
Xometry, Inc., Cl. A* | 27,106 | 562,721 | ||||||
2,895,971 | ||||||||
TRANSACTION & PAYMENT PROCESSING SERVICES—1.7% | ||||||||
Flywire Corp.* | 173,092 | 5,909,361 | ||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $278,438,092) | 316,412,650 |
PREFERRED STOCKS—0.0% | SHARES | VALUE | ||||||
BIOTECHNOLOGY—0.0% | ||||||||
Prosetta Biosciences, Inc., Series D*,@,(a),(b) | 41,418 | — | ||||||
(Cost $186,381) | — |
RIGHTS—0.0% | SHARES | VALUE | ||||||
BIOTECHNOLOGY—0.0% | ||||||||
Tolero CDR*,@,(a),(c) | 126,108 | 87,015 | ||||||
(Cost $67,638) | 87,015 |
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments July 31, 2023 (Unaudited) (Continued)
SPECIAL PURPOSE VEHICLE—0.5% | VALUE | |||
DATA PROCESSING & OUTSOURCED SERVICES—0.5% | | |||
Crosslink Ventures Capital C, LLC, Cl. A*,@,(a),(b) | $ | 963,591 | ||
Crosslink Ventures Capital C, LLC, Cl. B*,@,(a),(b) | 576,312 | |||
1,539,903 | ||||
TOTAL SPECIAL PURPOSE VEHICLE | ||||
(Cost $1,475,000) | 1,539,903 |
SHORT—TERM INVESTMENTS—7.1% | SHARES | VALUE | ||||||
U.S. GOVERNMENT —7.1% | ||||||||
U.S. Treasury Bill, 0.00%, 8/3/23 | 16,000,000 | 15,995,476 | ||||||
U.S. Treasury Bill, 0.00%, 8/8/23 | 8,500,000 | 8,491,736 | ||||||
24,487,212 | ||||||||
TOTAL SHORT—TERM INVESTMENTS | ||||||||
(Cost $24,487,212) | 24,487,212 |
PURCHASED OPTIONS—0.0% | ||||||||||||||
SECURITY NAME/ | ||||||||||||||
EXPIRATION DATE/ | ||||||||||||||
STRIKE PRICE | NOTIONAL AMOUNTS | COUNTERPARTY | NUMBER OF CONTRACTS | VALUE | ||||||||||
PUT OPTIONS—0.0% | ||||||||||||||
Carvana Co., 1/19/2024, 5.00 | $ | 2,343,450 | BNP Paribas | 510 | 7,650 | |||||||||
7,650 | ||||||||||||||
TOTAL PURCHASED OPTIONS | ||||||||||||||
(Cost $143,957) | 7,650 | |||||||||||||
Total Investments | ||||||||||||||
(Cost $304,798,280) | 99.6 | % | $ | 342,534,430 | ||||||||||
Affiliated Securities (Cost $1,661,381) | 1,539,903 | |||||||||||||
Unaffiliated Securities (Cost $303,136,899) | 340,994,527 | |||||||||||||
Securities Sold Short (Proceeds $109,413,677) | (31.7 | )% | (109,158,350 | ) | ||||||||||
Swaps | (0.2 | )% | (729,105 | ) | ||||||||||
Other Assets in Excess of Liabilities | 32.3 | % | 111,267,001 | |||||||||||
NET ASSETS | 100.0 | % | $ | 343,913,976 |
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments July 31, 2023 (Unaudited) (Continued)
+ | All or a portion of this security is held as collateral for securities sold short. |
# | American Depositary Receipts. |
(a) | Security is valued in good faith at fair value determined using significant unobservable inputs pursuant to procedures established by the Valuation Designee (as defined in Note 2). |
(b) | Deemed an affiliate of the Fund in accordance with Section 2(a)(3) of the Investment Company Act of 1940. See Note 5 - Affiliated Securities. |
(c) | Contingent Deferred Rights. |
* | Non-income producing security. |
@ | Restricted security - Investment in security not registered under the Securities Act of 1933. Sales or transfers of the investment may be restricted only to qualified buyers. |
Security | Acquisition Date(s) | Acquisition Cost | % of net assets (Acquisition Date) | Market Value | % of net assets as of 7/31/2023 | |||||||||||||
Crosslink Ventures Capital C, LLC, Cl. A | 10/2/20 | $ | 925,000 | 0.24 | % | $ | 963,591 | 0.28 | % | |||||||||
Crosslink Ventures Capital C, LLC, Cl. B | 12/16/20 | 550,000 | 0.11 | % | 576,312 | 0.17 | % | |||||||||||
Impulse Dynamics PLC, Class E | 2/11/22 | 3,485,265 | 0.47 | % | 4,201,794 | 1.22 | % | |||||||||||
Prosetta Biosciences, Inc., Series D | 2/6/15 | 186,381 | 0.25 | % | 0 | 0.00 | % | |||||||||||
Tolero CDR | 2/6/17 | 67,638 | 0.09 | % | 87,015 | 0.03 | % | |||||||||||
Total | $ | 5,828,712 | 1.70 | % |
Swaps outstanding as of July 31, 2023:
Over the counter swaps - Contracts for difference
Contract Amount | Counterparty | Reference Company | Market Value | Unrealized Appreciation | (Unrealized Depreciation) | Net Unrealized Appreciation/ (Depreciation) | |||||||||||||||
(21,022) | Goldman Sachs | Carvana Co. | $ | (797,616 | ) | $ | — | $ | (797,616 | ) | $ | (797,616 | ) | ||||||||
(470,524) | BNP Paribas | Ses Ai Corp. | 68,511 | 68,511 | — | 68,511 | |||||||||||||||
Total | $ | (729,105 | ) | $ | 68,511 | $ | (797,616 | ) | $ | (729,105 | ) |
See Notes to Financial Statements.
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments - Securities Sold Short July 31, 2023 (Unaudited)
COMMON STOCKS—(29.4)% | SHARES | VALUE | ||||||
ADVERTISING—(0.3)% | | |||||||
Omnicom Group, Inc. | (11,225 | ) | $ | (949,859 | ) | |||
AEROSPACE & DEFENSE—(0.5)% | | |||||||
Archer Aviation, Inc., Cl. A | (155,290 | ) | (1,045,102 | ) | ||||
General Dynamics Corp. | (3,345 | ) | (747,875 | ) | ||||
(1,792,977 | ) | |||||||
APPAREL ACCESSORIES & LUXURY GOODS—(0.3)% | | |||||||
Carter’s, Inc. | (12,138 | ) | (910,471 | ) | ||||
APPAREL RETAIL—(0.3)% | | |||||||
Ross Stores, Inc. | (8,048 | ) | (922,623 | ) | ||||
APPLICATION SOFTWARE—(1.5)% | | |||||||
DocuSign, Inc., Cl. A | (19,776 | ) | (1,064,344 | ) | ||||
Dynatrace, Inc. | (6,795 | ) | (371,619 | ) | ||||
Five9, Inc. | (9,612 | ) | (843,453 | ) | ||||
Latch, Inc. | (416,368 | ) | (724,480 | ) | ||||
Palantir Technologies, Inc., Cl. A | (25,767 | ) | (511,217 | ) | ||||
Porch Group, Inc. | (830 | ) | (1,129 | ) | ||||
Salesforce, Inc. | (8,269 | ) | (1,860,608 | ) | ||||
(5,376,850 | ) | |||||||
AUTOMOBILE MANUFACTURERS—(0.7)% | | |||||||
Fisker, Inc. | (97,159 | ) | (599,471 | ) | ||||
Lucid Group, Inc. | (133,056 | ) | (1,012,556 | ) | ||||
Thor Industries, Inc. | (8,016 | ) | (925,768 | ) | ||||
(2,537,795 | ) | |||||||
AUTOMOTIVE PARTS & EQUIPMENT—(1.9)% | | |||||||
LCI Industries | (15,092 | ) | (2,056,587 | ) | ||||
Luminar Technologies, Inc., Cl. A | (80,090 | ) | (592,666 | ) | ||||
Patrick Industries, Inc. | (23,233 | ) | (2,010,816 | ) | ||||
QuantumScape Corp., Cl. A | (129,319 | ) | (1,721,236 | ) | ||||
(6,381,305 | ) | |||||||
BIOTECHNOLOGY—(0.5)% | | |||||||
Twist Bioscience Corp. | (68,185 | ) | (1,659,623 | ) | ||||
BREWERS—(0.4)% | | |||||||
The Boston Beer Co., Inc., Cl. A | (3,713 | ) | (1,379,157 | ) | ||||
BROADCASTING—(0.5)% | | |||||||
Fox Corp., Cl. A | (27,830 | ) | (930,913 | ) | ||||
Paramount Global, Cl. B | (60,310 | ) | (966,769 | ) | ||||
(1,897,682 | ) | |||||||
CASINOS & GAMING—(0.1)% | | |||||||
Caesars Entertainment, Inc. | (7,740 | ) | (456,815 | ) | ||||
COMMODITY CHEMICALS—(0.6)% | | |||||||
PureCycle Technologies, Inc. | (169,651 | ) | (2,008,668 | ) | ||||
COMPUTER & ELECTRONICS RETAIL—(0.2)% | | |||||||
Best Buy Co., Inc. | (7,388 | ) | (613,573 | ) | ||||
CONSTRUCTION & ENGINEERING—(1.1)% | | |||||||
Ameresco, Inc., Cl. A | (64,822 | ) | (3,773,289 | ) |
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments - Securities Sold Short July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—(29.4)% (CONT.) | SHARES | VALUE | ||||||
CONSUMER STAPLES MERCHANDISE RETAIL—(0.3)% | | |||||||
Dollar General Corp. | (5,382 | ) | $ | (908,805 | ) | |||
DISTILLERS & VINTNERS—(0.5)% | | |||||||
Diageo PLC# | (10,364 | ) | (1,823,442 | ) | ||||
DISTRIBUTORS—(0.4)% | | |||||||
Pool Corp. | (3,561 | ) | (1,370,059 | ) | ||||
DIVERSIFIED SUPPORT SERVICES—(0.2)% | | |||||||
Healthcare Services Group, Inc. | (46,445 | ) | (585,671 | ) | ||||
EDUCATION SERVICES—(0.5)% | | |||||||
Duolingo, Inc., Cl. A | (10,289 | ) | (1,596,750 | ) | ||||
ELECTRICAL COMPONENTS & EQUIPMENT—(1.3)% | | |||||||
Acuity Brands, Inc. | (5,598 | ) | (925,013 | ) | ||||
Enovix Corp. | (23,291 | ) | (501,222 | ) | ||||
FREYR Battery SA | (129,323 | ) | (1,088,900 | ) | ||||
Shoals Technologies Group, Inc., Cl. A | (71,081 | ) | (1,845,263 | ) | ||||
(4,360,398 | ) | |||||||
ELECTRONIC EQUIPMENT & INSTRUMENTS—(0.6)% | | |||||||
Cognex Corp. | (22,685 | ) | (1,239,055 | ) | ||||
SmartRent, Inc., Cl. A | (202,863 | ) | (807,395 | ) | ||||
(2,046,450 | ) | |||||||
HEALTHCARE EQUIPMENT—(0.4)% | | |||||||
Envista Holdings Corp. | (29,921 | ) | (1,029,582 | ) | ||||
Omnicell, Inc. | (7,273 | ) | (459,290 | ) | ||||
(1,488,872 | ) | |||||||
HEALTHCARE FACILITIES—(0.2)% | | |||||||
US Physical Therapy, Inc. | (5,361 | ) | (623,323 | ) | ||||
HEALTHCARE SERVICES—(1.1)% | | |||||||
23andMe Holding Co., Cl. A | (1,140,676 | ) | (2,190,098 | ) | ||||
Cross Country Healthcare, Inc. | (11,722 | ) | (302,428 | ) | ||||
DocGo, Inc. | (164,678 | ) | (1,381,648 | ) | ||||
(3,874,174 | ) | |||||||
HEALTHCARE TECHNOLOGY—(0.8)% | | |||||||
Simulations Plus, Inc. | (58,260 | ) | (2,901,348 | ) | ||||
HOME IMPROVEMENT RETAIL—(0.4)% | | |||||||
Lowe’s Cos., Inc. | (5,447 | ) | (1,276,069 | ) | ||||
HOTELS RESORTS & CRUISE LINES—(0.4)% | | |||||||
Soho House & Co., Inc., Cl. A | (241,844 | ) | (1,443,809 | ) | ||||
HOUSEHOLD PRODUCTS—(0.5)% | | |||||||
Church & Dwight Co., Inc. | (18,902 | ) | (1,808,354 | ) | ||||
INDUSTRIAL MACHINERY & SUPPLIES & COMPONENTS—(0.5)% | ||||||||
Desktop Metal, Inc., Cl. A | (279,180 | ) | (508,108 | ) | ||||
Velo3D, Inc. | (537,013 | ) | (1,229,760 | ) | ||||
(1,737,868 | ) | |||||||
INTERACTIVE MEDIA & SERVICES—(0.3)% | | |||||||
Shutterstock, Inc. | (18,054 | ) | (928,878 | ) |
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments - Securities Sold Short July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—(29.4)% (CONT.) | SHARES | VALUE | ||||||
INTERNET SERVICES & INFRASTRUCTURE—(0.2)% | | |||||||
Snowflake, Inc., Cl. A | (4,480 | ) | $ | (796,141 | ) | |||
IT CONSULTING & OTHER SERVICES—(1.8)% | | |||||||
Accenture PLC, Cl. A | (6,102 | ) | (1,930,368 | ) | ||||
International Business Machines Corp. | (30,001 | ) | (4,325,544 | ) | ||||
(6,255,912 | ) | |||||||
LEISURE FACILITIES—(0.5)% | | |||||||
Six Flags Entertainment Corp. | (67,350 | ) | (1,609,665 | ) | ||||
LIFE SCIENCES TOOLS & SERVICES—(0.5)% | | |||||||
Thermo Fisher Scientific, Inc. | (1,293 | ) | (709,417 | ) | ||||
Waters Corp. | (3,273 | ) | (904,035 | ) | ||||
(1,613,452 | ) | |||||||
MANAGED HEALTHCARE—(0.2)% | | |||||||
Molina Healthcare, Inc. | (2,371 | ) | (721,946 | ) | ||||
MARKET INDICES—(1.8)% | | |||||||
Direxion NASDAQ-100 Equal Weighted Index Shares | (76,626 | ) | (6,188,316 | ) | ||||
MOVIES & ENTERTAINMENT—0.0% | | |||||||
Vivid Seats, Inc., Cl. A | (13,669 | ) | (113,863 | ) | ||||
PACKAGED FOODS & MEATS—(0.9)% | | |||||||
Hormel Foods Corp. | (35,004 | ) | (1,430,963 | ) | ||||
Kellogg Co. | (27,402 | ) | (1,832,920 | ) | ||||
(3,263,883 | ) | |||||||
PAPER & PLASTIC PACKAGING PRODUCTS & MATERIALS—(0.6)% | | |||||||
Ranpak Holdings Corp., Cl. A | (320,185 | ) | (2,052,386 | ) | ||||
PASSENGER AIRLINES—(0.6)% | | |||||||
Joby Aviation, Inc. | (225,528 | ) | (2,018,476 | ) | ||||
PHARMACEUTICALS—(0.2)% | | |||||||
Zoetis, Inc., Cl. A | (4,073 | ) | (766,091 | ) | ||||
PROPERTY & CASUALTY INSURANCE—(0.4)% | | |||||||
Lemonade, Inc. | (60,509 | ) | (1,406,834 | ) | ||||
REAL ESTATE SERVICES—(0.6)% | | |||||||
Opendoor Technologies, Inc. | (186,643 | ) | (953,746 | ) | ||||
Redfin Corp. | (63,952 | ) | (958,001 | ) | ||||
(1,911,747 | ) | |||||||
REGIONAL BANKS—(2.0)% | | |||||||
Amalgamated Financial Corp. | (174,098 | ) | (3,474,996 | ) | ||||
Bank OZK | (56,236 | ) | (2,459,200 | ) | ||||
Silvergate Capital Corp., Cl. A | (66,710 | ) | (25,350 | ) | ||||
Stellar Bancorp, Inc. | (35,700 | ) | (887,502 | ) | ||||
(6,847,048 | ) | |||||||
RESEARCH & CONSULTING SERVICES—(0.4)% | | |||||||
Franklin Covey Co. | (30,294 | ) | (1,443,509 | ) | ||||
SEMICONDUCTORS—(1.1)% | | |||||||
Monolithic Power Systems, Inc. | (2,478 | ) | (1,386,416 | ) | ||||
Silicon Laboratories, Inc. | (12,682 | ) | (1,891,393 | ) |
THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND
Schedule of Investments - Securities Sold Short July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—(29.4)% (CONT.) | SHARES | VALUE | ||||||
SEMICONDUCTORS—(1.1)% (CONT.) | ||||||||
Wolfspeed, Inc. | (8,724 | ) | $ | (574,912 | ) | |||
(3,852,721 | ) | |||||||
TRANSACTION & PAYMENT PROCESSING SERVICES—(0.3)% | | |||||||
Affirm Holdings, Inc., Cl. A | (50,055 | ) | (970,566 | ) | ||||
TOTAL COMMON STOCKS | ||||||||
(Proceeds $101,276,986) | $ | (101,267,513 | ) |
REAL ESTATE INVESTMENT TRUST—(2.3)% | SHARES | VALUE | ||||||
DIVERSIFIED—(0.3)% | | |||||||
Empire State Realty Trust, Inc., Cl. A | (128,679 | ) | (1,151,677 | ) | ||||
HEALTHCARE—(0.1)% | | |||||||
Omega Healthcare Investors, Inc. | (10,545 | ) | (336,385 | ) | ||||
INDUSTRIAL—(1.1)% | | |||||||
STAG Industrial, Inc. | (48,754 | ) | (1,769,770 | ) | ||||
Terreno Realty Corp. | (30,284 | ) | (1,797,053 | ) | ||||
(3,566,823 | ) | |||||||
OFFICE—(0.3)% | | |||||||
JBG SMITH Properties | (56,083 | ) | (938,269 | ) | ||||
Paramount Group, Inc. | (33,430 | ) | (175,173 | ) | ||||
(1,113,442 | ) | |||||||
REAL ESTATE OPERATING COMPANIES—(0.2)% | | |||||||
Seritage Growth Properties, Cl. A | (85,265 | ) | (800,638 | ) | ||||
RETAIL—(0.3)% | | |||||||
CBL & Associates Properties, Inc. | (75 | ) | (1,633 | ) | ||||
Federal Realty Investment Trust | (9,062 | ) | (919,974 | ) | ||||
Pennsylvania Real Estate Investment Trust | (402 | ) | (265 | ) | ||||
(921,872 | ) | |||||||
TOTAL REAL ESTATE INVESTMENT TRUST | ||||||||
(Proceeds $8,136,691) | $ | (7,890,837 | ) | |||||
Total Securities Sold Short | ||||||||
(Proceeds $109,413,677) | $ | (109,158,350 | ) |
# | American Depositary Receipts. |
See Notes to Financial Statements.
THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND
Schedule of Investments July 31, 2023 (Unaudited)
COMMON STOCKS—97.0% | SHARES | VALUE | ||||||
ARGENTINA—3.9% | | | ||||||
BROADLINE RETAIL—2.7% | ||||||||
MercadoLibre, Inc.* | 550 | $ | 680,927 | |||||
IT CONSULTING & OTHER SERVICES—1.2% | ||||||||
Globant SA* | 1,675 | 292,673 | ||||||
TOTAL ARGENTINA | ||||||||
(Cost $789,859) | 973,600 | |||||||
BRAZIL—10.6% | | | ||||||
DIVERSIFIED BANKS—3.4% | ||||||||
NU Holdings Ltd., Cl. A* | 104,500 | 831,820 | ||||||
FOOTWEAR—3.9% | ||||||||
Arezzo Industria e Comercio SA | 55,800 | 972,333 | ||||||
HEALTHCARE FACILITIES—1.6% | ||||||||
Rede D’Or Sao Luiz SA | 51,000 | 388,263 | ||||||
PASSENGER GROUND TRANSPORTATION—1.7% | ||||||||
Localiza Rent a Car SA | 29,000 | 412,240 | ||||||
TOTAL BRAZIL | ||||||||
(Cost $1,877,246) | 2,604,656 | |||||||
CHINA—32.0% | | | ||||||
APPLICATION SOFTWARE—1.3% | ||||||||
Glodon Co., Ltd., Cl. A | 68,600 | 310,508 | ||||||
AUTOMOBILE MANUFACTURERS—4.0% | ||||||||
BYD Co., Ltd., Cl. H | 27,522 | 980,311 | ||||||
BREWERS—1.3% | ||||||||
Budweiser Brewing Co. APAC Ltd. | 134,000 | 326,852 | ||||||
BROADLINE RETAIL—5.9% | ||||||||
Alibaba Group Holding Ltd.#,* | 8,800 | 899,008 | ||||||
JD.com, Inc., Cl. A | 27,119 | 561,479 | ||||||
1,460,487 | ||||||||
CONSUMER STAPLES MERCHANDISE RETAIL—2.6% | ||||||||
Dada Nexus Ltd.#,* | 95,000 | 635,550 | ||||||
DISTILLERS & VINTNERS—1.6% | ||||||||
Kweichow Moutai Co., Ltd., Cl. A | 1,500 | 395,889 | ||||||
EDUCATION SERVICES—2.6% | ||||||||
New Oriental Education & Technology Group, Inc.#,* | 11,500 | 645,495 | ||||||
FINANCIAL EXCHANGES & DATA—1.4% | ||||||||
East Money Information Co., Ltd., Cl. A | 156,938 | 354,098 | ||||||
HOTELS RESORTS & CRUISE LINES—2.9% | ||||||||
Trip.com Group Ltd.#,* | 17,300 | 709,992 | ||||||
INTERACTIVE MEDIA & SERVICES—5.2% | ||||||||
Tencent Holdings Ltd. | 27,700 | 1,273,165 | ||||||
RESTAURANTS—3.2% | ||||||||
Meituan, Cl. B* | 41,300 | 788,447 | ||||||
TOTAL CHINA | ||||||||
(Cost $7,618,640) | 7,880,794 |
THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND
Schedule of Investments July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—97.0% (CONT.) | SHARES | VALUE | ||||||
GREECE—7.1% | | | ||||||
INDUSTRIAL CONGLOMERATES—3.0% | ||||||||
Mytilineos SA | 17,700 | $ | 736,599 | |||||
OTHER SPECIALTY RETAIL—4.1% | ||||||||
JUMBO SA | 34,000 | 1,014,532 | ||||||
TOTAL GREECE | ||||||||
(Cost $1,026,878) | 1,751,131 | |||||||
HONG KONG—1.6% | | | ||||||
FINANCIAL EXCHANGES & DATA—1.6% | ||||||||
Hong Kong Exchanges & Clearing Ltd. | 9,176 | 386,891 | ||||||
(Cost $454,546) | ||||||||
INDIA—14.0% | | | ||||||
APPAREL ACCESSORIES & LUXURY GOODS—1.5% | ||||||||
Kalyan Jewellers India Ltd.* | 174,030 | 369,888 | ||||||
DIVERSIFIED BANKS—3.1% | ||||||||
HDFC Bank Ltd. | 38,000 | 762,973 | ||||||
HOTELS RESORTS & CRUISE LINES—4.1% | ||||||||
Lemon Tree Hotels Ltd.* | 268,000 | 301,782 | ||||||
MakeMyTrip Ltd.* | 24,100 | 693,357 | ||||||
995,139 | ||||||||
LIFE SCIENCES TOOLS & SERVICES—2.6% | ||||||||
Syngene International Ltd. | 66,000 | 639,573 | ||||||
PACKAGED FOODS & MEATS—2.7% | ||||||||
Patanjali Foods Ltd. | 41,478 | 671,577 | ||||||
TOTAL INDIA | ||||||||
(Cost $3,128,990) | 3,439,150 | |||||||
MEXICO—1.7% | | | ||||||
AIRPORT SERVICES—1.7% | ||||||||
Grupo Aeroportuario del Centro Norte SAB de CV | 36,500 | 411,440 | ||||||
(Cost $339,279) | ||||||||
POLAND—1.5% | | | ||||||
FOOD RETAIL—1.5% | ||||||||
Dino Polska SA* | 3,400 | 378,369 | ||||||
(Cost $294,641) | ||||||||
SAUDI ARABIA—3.3% | | | ||||||
IT CONSULTING & OTHER SERVICES—1.7% | ||||||||
Elm Co. | 2,300 | 416,907 | ||||||
LEISURE FACILITIES—1.6% | ||||||||
Leejam Sports Co. JSC | 10,000 | 393,427 | ||||||
TOTAL SAUDI ARABIA | ||||||||
(Cost $620,911) | 810,334 | |||||||
SOUTH KOREA—12.2% | | | ||||||
ELECTRONIC EQUIPMENT & INSTRUMENTS—3.1% | ||||||||
Park Systems Corp. | 4,900 | 774,733 |
THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND
Schedule of Investments July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—97.0% (CONT.) | SHARES | VALUE | ||||||
SOUTH KOREA—12.2% (CONT.) | ||||||||
HEALTHCARE EQUIPMENT—3.8% | ||||||||
Dentium Co., Ltd. | 2,600 | $ | 292,514 | |||||
Ray Co., Ltd.* | 21,100 | 652,811 | ||||||
945,325 | ||||||||
SEMICONDUCTOR MATERIALS & EQUIPMENT—2.8% | ||||||||
Eo Technics Co., Ltd. | 5,400 | 676,677 | ||||||
SEMICONDUCTORS—1.2% | ||||||||
LEENO Industrial, Inc. | 2,189 | 288,874 | ||||||
SPECIALTY CHEMICALS—1.3% | ||||||||
Chunbo Co., Ltd. | 2,223 | 331,548 | ||||||
TOTAL SOUTH KOREA | ||||||||
(Cost $2,174,831) | 3,017,157 | |||||||
TAIWAN—4.8% | ||||||||
APPLICATION SOFTWARE—0.6% | ||||||||
91APP, Inc. | 43,000 | 151,741 | ||||||
SEMICONDUCTORS—4.2% | ||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 57,500 | 1,036,350 | ||||||
TOTAL TAIWAN | ||||||||
(Cost $1,256,553) | 1,188,091 | |||||||
TURKEY—2.8% | ||||||||
APPAREL ACCESSORIES & LUXURY GOODS—1.4% | ||||||||
Mavi Giyim Sanayi Ve Ticaret AS, Cl. B(a) | 104,000 | 336,749 | ||||||
FOOD RETAIL—1.4% | ||||||||
BIM Birlesik Magazalar AS | 44,000 | 353,289 | ||||||
TOTAL TURKEY | ||||||||
(Cost $598,251) | 690,038 | |||||||
UNITED ARAB EMIRATES—1.5% | ||||||||
RESTAURANTS—1.5% | ||||||||
Americana Restaurants International PLC | 350,000 | 365,923 | ||||||
(Cost $274,503) | ||||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $20,455,128) | 23,897,574 | |||||||
Total Investments | ||||||||
(Cost $20,455,128) | 97.0 | % | $ | 23,897,574 | ||||
Unaffiliated Securities (Cost $20,455,128) | 23,897,574 | |||||||
Other Assets in Excess of Liabilities | 3.0 | % | 745,950 | |||||
NET ASSETS | 100.0 | % | $ | 24,643,524 |
# | American Depositary Receipts. |
* | Non-income producing security. |
(a) | Pursuant to Securities and Exchange Commission Rule 144A, this security may be sold prior to its maturity only to qualified institutional buyers. This security represents 1.4% of the net assets of the Fund. |
See Notes to Financial Statements.
THE ALGER FUNDS II | ALGER RESPONSIBLE INVESTING FUND
Schedule of Investments July 31, 2023 (Unaudited)
COMMON STOCKS—94.4% | SHARES | VALUE | ||||||
AGRICULTURAL & FARM MACHINERY—0.7% | | | ||||||
Deere & Co. | 1,358 | $ | 583,397 | |||||
APPAREL ACCESSORIES & LUXURY GOODS—0.5% | | | ||||||
Lululemon Athletica, Inc.* | 1,091 | 412,976 | ||||||
APPLICATION SOFTWARE—7.6% | | | ||||||
Adobe, Inc.* | 5,429 | 2,965,157 | ||||||
Autodesk, Inc.* | 3,176 | 673,280 | ||||||
Intuit, Inc. | 1,742 | 891,382 | ||||||
Salesforce, Inc.* | 7,440 | 1,674,074 | ||||||
6,203,893 | ||||||||
AUTOMOBILE MANUFACTURERS—1.6% | | | ||||||
Tesla, Inc.* | 5,019 | 1,342,231 | ||||||
AUTOMOTIVE PARTS & EQUIPMENT—0.8% | | | ||||||
Aptiv PLC* | 5,666 | 620,370 | ||||||
BIOTECHNOLOGY—2.2% | | | ||||||
AbbVie, Inc. | 3,323 | 497,055 | ||||||
Vaxcyte, Inc.* | 4,005 | 192,480 | ||||||
Vertex Pharmaceuticals, Inc.* | 3,183 | 1,121,498 | ||||||
1,811,033 | ||||||||
BROADLINE RETAIL—7.2% | | | ||||||
Amazon.com, Inc.* | 35,468 | 4,741,362 | ||||||
Etsy, Inc.* | 2,119 | 215,396 | ||||||
MercadoLibre, Inc.* | 736 | 911,205 | ||||||
5,867,963 | ||||||||
BUILDING PRODUCTS—0.5% | | | ||||||
Allegion PLC | 3,268 | 381,899 | ||||||
ELECTRIC UTILITIES—0.7% | | | ||||||
NextEra Energy, Inc. | 7,782 | 570,421 | ||||||
ELECTRICAL COMPONENTS & EQUIPMENT—1.2% | | | ||||||
Eaton Corp. PLC | 2,199 | 451,498 | ||||||
Rockwell Automation, Inc. | 1,599 | 537,728 | ||||||
989,226 | ||||||||
ELECTRONIC EQUIPMENT & INSTRUMENTS—0.4% | | | ||||||
Trimble, Inc.* | 5,902 | 317,528 | ||||||
ELECTRONIC MANUFACTURING SERVICES—1.8% | | | ||||||
Flex Ltd.* | 52,614 | 1,439,519 | ||||||
ENVIRONMENTAL & FACILITIES SERVICES—0.6% | | | ||||||
Tetra Tech, Inc. | 2,866 | 484,956 | ||||||
FINANCIAL EXCHANGES & DATA—1.7% | | | ||||||
S&P Global, Inc. | 3,601 | 1,420,631 | ||||||
FOOD DISTRIBUTORS—0.3% | | | ||||||
Sysco Corp. | 3,415 | 260,599 | ||||||
FOOTWEAR—1.5% | | | ||||||
NIKE, Inc., Cl. B | 8,142 | 898,795 | ||||||
On Holding AG, Cl. A* | 8,450 | 304,200 | ||||||
1,202,995 | ||||||||
HEALTHCARE DISTRIBUTORS—1.1% | | | ||||||
McKesson Corp. | 2,176 | 875,622 |
THE ALGER FUNDS II | ALGER RESPONSIBLE INVESTING FUND
Schedule of Investments July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—94.4% (CONT.) | SHARES | VALUE | ||||||
HEALTHCARE EQUIPMENT—0.4% | | | ||||||
Dexcom, Inc.* | 2,700 | $ | 336,312 | |||||
HOME IMPROVEMENT RETAIL—2.3% | | | ||||||
The Home Depot, Inc. | 5,647 | 1,885,195 | ||||||
HOUSEHOLD PRODUCTS—1.2% | | | ||||||
The Procter & Gamble Co. | 6,221 | 972,342 | ||||||
HUMAN RESOURCE & EMPLOYMENT SERVICES—0.5% | | | ||||||
Paycom Software, Inc. | 1,172 | 432,187 | ||||||
INDUSTRIAL CONGLOMERATES—1.0% | | | ||||||
Honeywell International, Inc. | 4,177 | 810,881 | ||||||
INDUSTRIAL GASES—1.3% | | | ||||||
Air Products & Chemicals, Inc. | 3,376 | 1,030,794 | ||||||
INDUSTRIAL MACHINERY & SUPPLIES & COMPONENTS—0.6% | | | ||||||
Xylem, Inc. | 4,408 | 497,002 | ||||||
INTERACTIVE MEDIA & SERVICES—5.1% | | | ||||||
Alphabet, Inc., Cl. A* | 16,160 | 2,144,755 | ||||||
Alphabet, Inc., Cl. C* | 13,940 | 1,855,554 | ||||||
Pinterest, Inc., Cl. A* | 7,019 | 203,481 | ||||||
4,203,790 | ||||||||
INVESTMENT BANKING & BROKERAGE—1.3% | | | ||||||
Morgan Stanley | 11,732 | 1,074,182 | ||||||
IT CONSULTING & OTHER SERVICES—0.9% | | | ||||||
Accenture PLC, Cl. A | 2,401 | 759,556 | ||||||
LEISURE FACILITIES—0.5% | | | ||||||
Vail Resorts, Inc. | 1,843 | 434,008 | ||||||
LIFE SCIENCES TOOLS & SERVICES—2.2% | | | ||||||
Agilent Technologies, Inc. | 4,610 | 561,360 | ||||||
Danaher Corp. | 4,742 | 1,209,494 | ||||||
1,770,854 | ||||||||
MANAGED HEALTHCARE—2.2% | | | ||||||
Humana, Inc. | 1,759 | 803,564 | ||||||
UnitedHealth Group, Inc. | 2,043 | 1,034,514 | ||||||
1,838,078 | ||||||||
METAL, GLASS & PLASTIC CONTAINERS—0.7% | | | ||||||
Ball Corp. | 9,873 | 579,446 | ||||||
MOVIES & ENTERTAINMENT—0.5% | | | ||||||
Live Nation Entertainment, Inc.* | 1,861 | 163,303 | ||||||
The Walt Disney Co.* | 3,132 | 278,403 | ||||||
441,706 | ||||||||
PHARMACEUTICALS—3.2% | | | ||||||
Bristol-Myers Squibb Co. | 8,904 | 553,740 | ||||||
Merck & Co., Inc. | 8,311 | 886,368 | ||||||
Reata Pharmaceuticals, Inc., Cl. A* | 2,269 | 375,701 | ||||||
Zoetis, Inc., Cl. A | 4,472 | 841,138 | ||||||
2,656,947 | ||||||||
RAIL TRANSPORTATION—0.8% | | | ||||||
Union Pacific Corp. | 2,735 | 634,575 |
THE ALGER FUNDS II | ALGER RESPONSIBLE INVESTING FUND
Schedule of Investments July 31, 2023 (Unaudited) (Continued)
COMMON STOCKS—94.4% (CONT.) | SHARES | VALUE | ||||||
RESTAURANTS—1.0% | | | ||||||
Cava Group, Inc.* | 96 | $ | 5,482 | |||||
Starbucks Corp. | 7,708 | 782,902 | ||||||
788,384 | ||||||||
SEMICONDUCTOR MATERIALS & EQUIPMENT—3.9% | | | ||||||
ASML Holding NV | 1,874 | 1,342,552 | ||||||
Lam Research Corp. | 2,569 | 1,845,801 | ||||||
3,188,353 | ||||||||
SEMICONDUCTORS—8.2% | | | ||||||
First Solar, Inc.* | 2,848 | 590,675 | ||||||
Marvell Technology, Inc. | 10,751 | 700,213 | ||||||
NVIDIA Corp. | 10,375 | 4,848,134 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd.# | 6,081 | 602,931 | ||||||
6,741,953 | ||||||||
SOFT DRINKS & NON-ALCOHOLIC BEVERAGES—1.3% | | | ||||||
PepsiCo, Inc. | 5,552 | 1,040,778 | ||||||
SYSTEMS SOFTWARE—12.3% | | | ||||||
Microsoft Corp. | 29,986 | 10,072,897 | ||||||
TECHNOLOGY HARDWARE STORAGE & PERIPHERALS—7.8% | | | ||||||
Apple, Inc. | 32,436 | 6,372,052 | ||||||
TRANSACTION & PAYMENT PROCESSING SERVICES—4.8% | | | ||||||
PayPal Holdings, Inc.* | 4,665 | 353,700 | ||||||
Visa, Inc., Cl. A | 15,054 | 3,578,788 | ||||||
3,932,488 | ||||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $27,990,018) | 77,280,019 | |||||||
REAL ESTATE INVESTMENT TRUST—2.5% | SHARES | VALUE | ||||||
INDUSTRIAL—1.1% | | | ||||||
Prologis, Inc. | 7,288 | 909,178 | ||||||
SPECIALIZED—1.4% | | | ||||||
Equinix, Inc. | 1,382 | 1,119,309 | ||||||
TOTAL REAL ESTATE INVESTMENT TRUST | ||||||||
(Cost $1,204,702) | 2,028,487 | |||||||
Total Investments | ||||||||
(Cost $29,194,720) | 96.9 | % | $ | 79,308,506 | ||||
Unaffiliated Securities (Cost $29,194,720) | 79,308,506 | |||||||
Other Assets in Excess of Liabilities | 3.1 | % | 2,550,164 | |||||
NET ASSETS | 100.0 | % | $ | 81,858,670 |
# American Depositary Receipts.
* Non-income producing security.
See Notes to Financial Statements.
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 (“FASB”) Accounting Standards Codification 946 – Financial Services – Investment Companies. The Trust operates as a series company currently offering an unlimited number of shares of beneficial interest in four series – Alger Spectra Fund, Alger Dynamic Opportunities Fund, Alger Emerging Markets Fund and Alger Responsible Investing Fund (collectively, the “Funds” or individually, each a “Fund”). The Funds normally invest primarily in equity securities and each has an investment objective of long-term capital appreciation.
Each Fund offers one or more of the following share classes: Class A, C, I, Y and Z. Class A shares are generally subject to an initial sales charge while Class C shares are generally subject to a deferred sales charge. Class C shares will automatically convert to Class A shares on the fifth business day of the month following the eighth anniversary of the purchase date of a shareholder’s Class C shares, without the imposition of any sales load, fee or other charge. Class C shares held at certain dealers may not convert to Class A shares or may be converted on a different schedule. At conversion, a proportionate amount of shares representing reinvested dividends and distributions will also be converted into Class A shares. Effective August 27, 2019, Class C shares were closed to direct shareholders and are only available for purchase through certain financial intermediaries and group retirement plan recordkeeping platforms. Class I shares, Class Z shares and Class Y shares are generally sold to institutional investors and are sold without an initial or deferred sales charge and Class Z shares and Class Y shares are generally subject to a minimum initial investment of $500,000. Each class has identical rights to assets and earnings, except that each share class bears the pro rata allocation of the Fund’s expenses other than a class expense (not including advisory or custodial fees or other expenses related to the management of the Fund’s assets).
On May 23, 2023, the Board of Trustees (the “Board”) approved the transition of the Fund’s custodian and administrator from Brown Brothers Harriman & Company (the “Custodian”) to The Bank of New York Mellon. This change is anticipated to become effective in early 2024.
NOTE 2 — Significant Accounting Policies:
(a) Investment Valuation: The Funds value their financial instruments at fair value using independent dealers or pricing services under policies approved by the Board of Trustees of the Trust (the “Board”). Investments held by the Funds are valued on each day the New York Stock Exchange (the “NYSE”) is open, as of the close of the NYSE (normally 4:00 p.m. Eastern Time).
The Board has designated, pursuant to Rule 2a-5 under the Investment Company Act of 1940, as amended (the “1940 Act”), the Funds’ investment adviser, Fred Alger Management, LLC (“Alger Management” or the “Investment Manager”) as its valuation designee (the “Valuation Designee”) to make fair value determinations subject to the Board’s review and oversight. The Valuation Designee has established a Valuation Committee (“Committee”) comprised of representatives of the Investment Manager and officers of the Funds to assist in performing the duties and responsibilities of the Valuation Designee.
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
The Valuation Designee has established valuation processes including but not limited to: (i) making fair value determinations when market quotations for financial instruments are not readily available in accordance with valuation policies and procedures adopted by the Board; (ii) assessing and managing material risks associated with fair valuation determinations; (iii) selecting, applying and testing fair valuation methodologies; and (iv) overseeing and evaluating pricing services used by the Funds. The Valuation Designee regularly reports its fair valuation determinations and related valuation information to the Board. The Committee generally meets quarterly and on an as-needed basis to review and evaluate the effectiveness of the valuation policies and procedures in accordance with the requirements of Rule 2a-5.
Investments in money market funds and short-term securities held by the Funds having a remaining maturity of sixty days or less are valued at amortized cost which approximates market value.
Equity securities, including traded rights, warrants and option contracts for which valuation information is readily available, are valued at the last quoted sales price or official closing price on the primary market or exchange on which they are traded as reported by an independent pricing service. In the absence of quoted sales, such securities are generally valued at the bid price or, in the absence of a recent bid price, the equivalent as obtained from one or more of the major market makers for the securities to be valued.
Swap contracts are privately negotiated in the over-the-counter market (“OTC swaps”) or may be executed in a multilateral or other trade facility platform, such as a registered commodities exchange (“Centrally Cleared Swaps”). Centrally Cleared Swaps are valued at the last reported sale on the clearing exchange.
Securities in which the Funds invest may be traded in foreign markets that close before the close of the NYSE. Developments that occur between the close of the foreign markets and the close of the NYSE may result in adjustments to the closing foreign prices to reflect what the Valuation Designee, through its Committee, believes to be the fair value of these securities as of the close of the NYSE. The Funds may also fair value securities in other situations, for example, when a particular foreign market is closed but the NYSE is open.
FASB Accounting Standards Codification 820 – Fair Value Measurements and Disclosures (“ASC 820”) defines fair value as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. ASC 820 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability and may be observable or unobservable. Observable inputs are based on market data obtained from sources independent of the Funds. Unobservable inputs are inputs that reflect the Funds’ own assumptions based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
● | Level 1 – quoted prices in active markets for identical investments |
● | Level 2 – significant other observable inputs (including quoted prices for similar investments, amortized cost, interest rates, prepayment speeds, credit risk, etc.) |
● | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments) |
The Funds’ valuation techniques are generally consistent with either the market or the income approach to fair value. The market approach considers prices and other relevant information generated by market transactions involving identical or comparable assets to measure fair value. The income approach converts future amounts to a current, or discounted, single amount. These fair value measurements are determined on the basis of the value indicated by current market expectations about such future events. Inputs for Level 1 include exchange-listed prices and broker quotes in an active market. Inputs for Level 2 include the last trade price in the case of a halted security, an exchange-listed price which has been adjusted for fair value factors, and prices of closely related securities. Additional Level 2 inputs include an evaluated price which is based upon a compilation of observable market information such as spreads for fixed income and preferred securities. Inputs for Level 3 include, but are not limited to, revenue multiples, earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples, discount rates, time to exit and the probabilities of success of certain outcomes. Such unobservable market information may be obtained from a company’s financial statements and from industry studies, market data, and market indicators such as benchmarks and indexes. Because of the inherent uncertainty and often limited markets for restricted securities, the valuations assigned to such securities by the Funds may significantly differ from the valuations that would have been assigned by the Funds had there been an active market for such securities.
(b) Cash and Cash Equivalents: Cash and cash equivalents include U.S. dollars, foreign cash and overnight time deposits.
NOTE 3 — Fair Value Measurements:
The following is a summary of the inputs used as of July 31, 2023 in valuing the Funds’ investments carried at fair value on a recurring basis. Based upon the nature, characteristics, and risks associated with their investments, the Funds have determined that presenting them by security type and sector is appropriate.
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Alger Spectra Fund | TOTAL | LEVEL 1 | LEVEL 2 | LEVEL 3 | ||||||||||||
COMMON STOCKS | ||||||||||||||||
Communication Services | $ | 399,967,574 | $ | 399,967,574 | $ | — | $ | — | ||||||||
Consumer Discretionary | 530,515,026 | 514,374,897 | 16,140,129 | — | ||||||||||||
Energy | 166,014,891 | 166,014,891 | — | — | ||||||||||||
Financials | 197,014,087 | 197,014,087 | — | — | ||||||||||||
Healthcare | 356,821,136 | 356,821,136 | — | — | ||||||||||||
Industrials | 293,994,120 | 293,994,120 | — | — | ||||||||||||
Information Technology | 1,251,446,408 | 1,251,446,408 | — | — | ||||||||||||
Materials | 87,996,518 | 87,996,518 | — | — | ||||||||||||
Real Estate | 71,824,759 | 71,824,759 | — | — | ||||||||||||
TOTAL COMMON STOCKS | $ | 3,355,594,519 | $ | 3,339,454,390 | $ | 16,140,129 | $ | — | ||||||||
PREFERRED STOCKS | ||||||||||||||||
Healthcare | — | * | — | — | — | * | ||||||||||
Information Technology | 8,092,097 | — | — | 8,092,097 | ||||||||||||
TOTAL PREFERRED STOCKS | $ | 8,092,097 | $ | — | $ | — | $ | 8,092,097 | ||||||||
SPECIAL PURPOSE VEHICLE | ||||||||||||||||
Information Technology | 12,450,510 | — | — | 12,450,510 | ||||||||||||
TOTAL INVESTMENTS IN SECURITIES | $ | 3,376,137,126 | $ | 3,339,454,390 | $ | 16,140,129 | $ | 20,542,607 | ||||||||
SECURITIES SOLD SHORT | ||||||||||||||||
COMMON STOCKS | ||||||||||||||||
Communication Services | 6,250,461 | 6,250,461 | — | — | ||||||||||||
Consumer Discretionary | 32,917,897 | 32,917,897 | — | — | ||||||||||||
Consumer Staples | 21,369,983 | 21,369,983 | — | — | ||||||||||||
Exchange Traded Funds | 5,299,895 | 5,299,895 | — | — | ||||||||||||
Financials | 6,548,959 | 6,548,959 | — | — | ||||||||||||
Healthcare | 9,783,334 | 9,783,334 | — | — | ||||||||||||
Industrials | 23,117,303 | 23,117,303 | — | — | ||||||||||||
Information Technology | 25,777,186 | 25,777,186 | — | — | ||||||||||||
Market Indices | 95,391,221 | 95,391,221 | — | — | ||||||||||||
Materials | 3,258,790 | 3,258,790 | — | — | ||||||||||||
TOTAL COMMON STOCKS | $ | 229,715,029 | $ | 229,715,029 | $ | — | $ | — | ||||||||
Alger Dynamic Opportunities Fund | TOTAL | LEVEL 1 | LEVEL 2 | LEVEL 3 | ||||||||||||
COMMON STOCKS | ||||||||||||||||
Communication Services | 31,211,559 | 31,211,559 | — | — | ||||||||||||
Consumer Discretionary | 39,898,984 | 38,960,384 | 938,600 | — | ||||||||||||
Consumer Staples | 3,422,782 | 3,422,782 | — | — | ||||||||||||
Energy | 13,172,939 | 13,172,939 | — | — | ||||||||||||
Financials | 12,083,082 | 12,083,082 | — | — | ||||||||||||
Healthcare | 75,411,591 | 67,694,376 | 3,515,421 | 4,201,794 | ||||||||||||
Industrials | 46,529,508 | 46,529,508 | — | — | ||||||||||||
Information Technology | 82,793,821 | 82,793,821 | — | — | ||||||||||||
Materials | 1,654,880 | 1,654,880 | — | — | ||||||||||||
Real Estate | 10,233,504 | 10,233,504 | — | — | ||||||||||||
TOTAL COMMON STOCKS | $ | 316,412,650 | $ | 307,756,835 | $ | 4,454,021 | $ | 4,201,794 |
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Alger Dynamic Opportunities Fund | TOTAL | LEVEL 1 | LEVEL 2 | LEVEL 3 | ||||||||||||
PREFERRED STOCKS | ||||||||||||||||
Healthcare | $ | — | * | $ | — | $ | — | $ | — | * | ||||||
RIGHTS | ||||||||||||||||
Healthcare | 87,015 | — | — | 87,015 | ||||||||||||
SPECIAL PURPOSE VEHICLE | ||||||||||||||||
Information Technology | 1,539,903 | — | — | 1,539,903 | ||||||||||||
SHORT TERM INVESTMENTS | ||||||||||||||||
U.S. Government | 24,487,212 | — | 24,487,212 | — | ||||||||||||
PURCHASED OPTIONS | ||||||||||||||||
Consumer Discretionary | 7,650 | 7,650 | — | — | ||||||||||||
TOTAL INVESTMENTS IN SECURITIES | $ | 342,534,430 | $ | 307,764,485 | $ | 28,941,233 | $ | 5,828,712 | ||||||||
SECURITIES SOLD SHORT | ||||||||||||||||
COMMON STOCKS | ||||||||||||||||
Communication Services | 3,890,282 | 3,890,282 | — | — | ||||||||||||
Consumer Discretionary | 19,118,934 | 19,118,934 | — | — | ||||||||||||
Consumer Staples | 9,183,641 | 9,183,641 | — | — | ||||||||||||
Financials | 9,224,448 | 9,224,448 | — | — | ||||||||||||
Healthcare | 13,648,829 | 13,648,829 | — | — | ||||||||||||
Industrials | 15,712,188 | 15,712,188 | — | — | ||||||||||||
Information Technology | 18,328,074 | 18,328,074 | — | — | ||||||||||||
Market Indices | 6,188,316 | 6,188,316 | — | — | ||||||||||||
Materials | 4,061,054 | 4,061,054 | — | — | ||||||||||||
Real Estate | 1,911,747 | 1,911,747 | — | — | ||||||||||||
TOTAL COMMON STOCKS | $ | 101,267,513 | $ | 101,267,513 | $ | — | $ | — | ||||||||
REAL ESTATE INVESTMENT TRUST | ||||||||||||||||
Real Estate | 7,890,837 | 7,890,837 | — | — | ||||||||||||
TOTAL SECURITIES SOLD SHORT | $ | 109,158,350 | $ | 109,158,350 | $ | — | $ | — | ||||||||
FINANCIAL DERIVATIVE INSTRUMENTS - ASSETS | ||||||||||||||||
Swaps - Contracts for difference | $ | 68,511 | $ | — | $ | 68,511 | $ | — | ||||||||
FINANCIAL DERIVATIVE INSTRUMENTS - LIABILITIES | ||||||||||||||||
Swaps - Contracts for difference | $ | (797,616 | ) | $ | — | $ | (797,616 | ) | $ | — | ||||||
Alger Emerging Markets Fund | TOTAL | LEVEL 1 | LEVEL 2 | LEVEL 3 | ||||||||||||
COMMON STOCKS | ||||||||||||||||
Communication Services | 1,273,165 | — | 1,273,165 | — | ||||||||||||
Consumer Discretionary | 9,713,650 | 5,303,784 | 4,409,866 | — | ||||||||||||
Consumer Staples | 2,761,526 | 635,550 | 2,125,976 | — | ||||||||||||
Financials | 2,335,782 | 831,820 | 1,503,962 | — | ||||||||||||
Healthcare | 1,973,161 | 388,263 | 1,584,898 | — | ||||||||||||
Industrials | 1,560,279 | 823,680 | 736,599 | — | ||||||||||||
Information Technology | 3,948,463 | 292,673 | 3,655,790 | — | ||||||||||||
Materials | 331,548 | — | 331,548 | — | ||||||||||||
TOTAL COMMON STOCKS | $ | 23,897,574 | $ | 8,275,770 | $ | 15,621,804 | $ | — | ||||||||
TOTAL INVESTMENTS IN SECURITIES | $ | 23,897,574 | $ | 8,275,770 | $ | 15,621,804 | $ | — |
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Alger Responsible Investing Fund | TOTAL | LEVEL 1 | LEVEL 2 | LEVEL 3 | ||||||||||||
COMMON STOCKS | ||||||||||||||||
Communication Services | $ | 4,645,496 | $ | 4,645,496 | $ | — | $ | — | ||||||||
Consumer Discretionary | 12,554,122 | 12,554,122 | — | — | ||||||||||||
Consumer Staples | 2,273,719 | 2,273,719 | — | — | ||||||||||||
Financials | 6,427,301 | 6,427,301 | — | — | ||||||||||||
Healthcare | 9,288,846 | 9,288,846 | — | — | ||||||||||||
Industrials | 4,814,123 | 4,814,123 | — | — | ||||||||||||
Information Technology | 35,095,751 | 35,095,751 | — | — | ||||||||||||
Materials | 1,610,240 | 1,610,240 | — | — | ||||||||||||
Utilities | 570,421 | 570,421 | — | — | ||||||||||||
TOTAL COMMON STOCKS | $ | 77,280,019 | $ | 77,280,019 | $ | — | $ | — | ||||||||
REAL ESTATE INVESTMENT TRUST | ||||||||||||||||
Real Estate | 2,028,487 | 2,028,487 | — | — | ||||||||||||
TOTAL INVESTMENTS IN SECURITIES | $ | 79,308,506 | $ | 79,308,506 | $ | — | $ | — |
* Alger Spectra Fund’s and Alger Dynamic Opportunities Fund’s holdings of Prosetta Biosciences, Inc., Series D shares are classified as a Level 3 investment and are fair valued at zero as of July 31, 2023.
FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) | ||||
Alger Spectra Fund | Common Stocks | |||
Opening balance at November 1, 2022 | $ | 1,037,036 | ||
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | (2,338,305 | ) | ||
Included in net change in unrealized appreciation (depreciation) on investments | 3,484,453 | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | (2,183,184 | ) | ||
Closing balance at July 31, 2023 | — | |||
Net change in unrealized appreciation (depreciation) attributable to investments still held at July 31, 2023 | $ | — |
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, 2022 | $ | 8,233,534 | * | |
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 | (141,437 | ) | ||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at July 31, 2023 | 8,092,097 | * | ||
Net change in unrealized appreciation (depreciation) attributable to investments still held at July 31, 2023 | $ | (141,437 | ) |
FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) | ||||
Alger Spectra Fund | Special Purpose Vehicle | |||
Opening balance at November 1, 2022 | $ | 12,651,042 | ||
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 | (200,532 | ) | ||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at July 31, 2023 | 12,450,510 | |||
Net change in unrealized appreciation (depreciation) attributable to investments still held at July 31, 2023 | $ | (200,532 | ) |
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) | ||||
Alger Dynamic Opportunities Fund | Common Stocks | |||
Opening balance at November 1, 2022 | $ | 3,485,265 | ||
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
Total gains or losses | ||||
Included in net realized gain (loss) on investments | — | |||
Included in net change in unrealized appreciation (depreciation) on investments | — | |||
Purchases and sales | ||||
Purchases | 716,529 | |||
Sales | — | |||
Closing balance at July 31, 2023 | 4,201,794 | |||
Net change in unrealized appreciation (depreciation) attributable to investments still held at July 31, 2023 | $ | — |
FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) | ||||
Alger Dynamic Opportunities Fund | Preferred Stocks | |||
Opening balance at November 1, 2022 | $ | — | * | |
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 July 31, 2023 | — | * | ||
Net change in unrealized appreciation (depreciation) attributable to investments still held at July 31, 2023 | $ | — |
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) | ||||
Alger Dynamic Opportunities Fund | Rights | |||
Opening balance at November 1, 2022 | $ | 75,665 | ||
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 | 11,350 | |||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at July 31, 2023 | 87,015 | |||
Net change in unrealized appreciation (depreciation) attributable to investments still held at July 31, 2023 | $ | 11,350 |
FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) | ||||
Alger Dynamic Opportunities Fund | Special Purpose Vehicle | |||
Opening balance at November 1, 2022 | $ | 1,564,668 | ||
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 | (24,765 | ) | ||
Purchases and sales | ||||
Purchases | — | |||
Sales | — | |||
Closing balance at July 31, 2023 | 1,539,903 | |||
Net change in unrealized appreciation (depreciation) attributable to investments still held at July 31, 2023 | $ | (24,765 | ) |
* Includes securities that are fair valued at zero.
The following table provides quantitative information about each Fund’s Level 3 fair value measurements of its investments as of July 31, 2023. The table below is not intended to be all-inclusive, but rather provides information on the Level 3 inputs as they relate to each Fund’s fair value measurements.
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Fair Value July 31, 2023 | Valuation Methodology | Unobservable Input | Input/Range | Weighted Average Inputs | ||||||||||
Alger Spectra Fund | ||||||||||||||
Preferred Stocks | $ | — | * | Income Approach | Discount Rate | 100.00% | N/A | |||||||
Preferred Stocks | 8,092,097 | Market Approach | Revenue Multiple | 14.00x-16.00x | N/A | |||||||||
Special Purpose Vehicle | 12,450,510 | Market Approach | Revenue Multiple | 14.00x-16.00x | N/A | |||||||||
Alger Dynamic Opportunities Fund | ||||||||||||||
Common Stocks | 4,201,794 | Market Approach | Recent Transaction Price | N/A | N/A | |||||||||
Preferred Stocks | $ | — | * | Income Approach | Discount Rate | 100.00% | N/A | |||||||
Rights | 87,015 | Income Approach | Discount Rate | 7.94%-9.43% 0.00%-60.00% | N/A | |||||||||
Special Purpose Vehicle | 1,539,903 | Market Approach | Probability of Success Revenue Multiple | 14.00x-16.00x | N/A |
* Prosetta Biosciences, Inc., Series D shares are classified as a Level 3 investment and are fair valued at zero as of July 31, 2023.
The significant unobservable inputs used in the fair value measurement of each Fund’s securities are revenue and EBITDA multiples, discount rates, and the probability of success of certain outcomes. Significant increases and decreases in these inputs in isolation and interrelationships between these inputs would have resulted in significantly higher or lower fair value measurements than those noted in the table above. Generally, all other things being equal, increases in revenue and EBITDA multiples, decreases in discount rates, and increases in the probability of success result in higher fair value measurements, whereas decreases in revenues and EBITDA multiples, increases in discount rates, and decreases in the probability of success result in lower fair value measurements.
Certain of the Funds’ assets and liabilities are held at carrying amount or face value, which approximates fair value for financial reporting purposes. As of July 31, 2023, such assets were categorized within the ASC 820 disclosure hierarchy as follows:
TOTAL | LEVEL 1 | LEVEL 2 | LEVEL 3 | |||||||||||||
Cash, foreign cash and cash equivalents: | ||||||||||||||||
Alger Spectra Fund | $ | 57,277 | $ | — | $ | 57,277 | $ | — | ||||||||
Collateral held for short sales(a) | 68,923,626 | 68,923,626 | — | — | ||||||||||||
Due to broker(b) | (87,314,330 | ) | (87,314,330 | ) | — | — | ||||||||||
Alger Dynamic Opportunities Fund | 16,581,781 | 5,501 | 16,576,280 | — | ||||||||||||
Collateral held for short sales(a) | 87,428,998 | 87,428,998 | — | — | ||||||||||||
Collateral pledged for OTC swaps(c) | 4,797,026 | 4,797,026 | — | — | ||||||||||||
Alger Emerging Markets Fund | 683,717 | 394,937 | 288,780 | — | ||||||||||||
Alger Responsible Investing Fund | 2,550,899 | — | 2,550,899 | — |
(a) | The collateral held for short sales balance represents restricted cash held at prime brokers as of July 31, 2023. |
(b) | The due to broker balance represents a margin payable related to short sales due to prime brokers as of July 31, 2023. |
(c) | The collateral held for the OTC swaps balance represents restricted cash held at prime brokers as of July 31, 2023. |
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
NOTE 4 — Derivatives:
FASB Accounting Standards Codification 815 – Derivatives and Hedging (“ASC 815”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements.
Options — The Funds seek to capture the majority of the returns associated with equity market investments. To meet this investment goal, the Funds invest in a broadly diversified portfolio of common stocks, the Funds may also buy and sell call and put options on equities and equity indexes. The Funds may also purchase call options to increase their exposure to the stock market and also provide diversification of risk. The Funds may also purchase put options in order to protect from significant market declines that may occur over a short period of time. The Funds may also write covered call and cash secured put options to generate cash flows while reducing the volatility of the Funds’ portfolios. The cash flows may be an important source of the Funds’ returns, although written call options may reduce the Funds’ ability to profit from increases in the value of the underlying security or equity portfolio. The value of a call option generally increases as the price of the underlying stock increases and decreases as the stock decreases in price. Conversely, the value of a put option generally increases as the price of the underlying stock decreases and decreases as the stock increases in price. The combination of the diversified stock portfolio and the purchase and sale of options is intended to provide the Funds with the majority of the returns associated with equity market investments but with reduced volatility and returns that are augmented with the cash flows from the sale of options. During the period ended January 31, 2023, 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 clearinghouse that acts as an intermediary between buyer and seller, receiving initial and maintenance margin from both, and guaranteeing performance of the option contract.
Forward foreign currency contracts — In connection with portfolio purchases and sales of securities denominated in foreign currencies, the Funds may enter into forward foreign currency contracts. Additionally, the Funds may enter into such contracts to economically hedge certain other foreign currency denominated investments. These contracts are valued at the current cost of covering or offsetting such contracts. In the event that counterparties fail to settle these currency contracts or the related foreign security trades, a Fund could be exposed to foreign currency fluctuations.
Swaps — Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than one year. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or “swapped” between the parties are generally calculated with respect to a “notional amount,” i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a “basket” of swaps or securities representing a particular index. The “notional amount” of the swap agreement is only used as a basis upon which to calculate the obligations that the parties to a swap agreement have agreed to exchange.
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
The use of swap agreements is a highly specialized activity which involves strategies and risks different from those associated with ordinary portfolio security transactions. If Alger Management is incorrect in its forecasts of applicable market factors, or a counterparty defaults, the investment performance of the Fund would diminish compared with what it would have been if these techniques were not used. In addition, it is possible that developments in the swap market, including potential government regulation, could adversely affect the Fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements.
Contracts for Differences — The Funds may enter into Contracts for Differences (“CFDs”). CFDs are leveraged derivative instruments that allow a Fund to take a position on the change in the market price of an underlying asset, such as a stock, or the value of an index or currency exchange rate. With a short CFD, a Fund is seeking to profit from a decrease in the market price of the asset. CFDs are subject to liquidity risk because the liquidity of CFDs is based on the liquidity of the underlying instrument, and are subject to counterparty risk, i.e., the risk that the counterparty to the CFD transaction may be unable or unwilling to make payments or to otherwise honor its financial obligations under the terms of the contract. It is also possible that the market price of the CFD will move between the time the order is placed by a Fund and when it is executed by the issuer, which can result in the trade being executed at a less favorable price. CFDs, like many other derivative instruments, involve the risk that, if the derivative security declines in value, additional margin would be required to maintain the margin level. The seller may require a Fund to deposit additional sums to cover this decline in value, and the margin call may be made at short notice. If additional margin is not provided in time, the seller may liquidate the positions at a loss which a Fund is liable. The potential for margin calls and large losses are much greater in CFDs than in other leveraged products. Most CFDs are traded OTC. CFDs are not registered with the SEC or any U.S. regulator, and are not subject to U.S. regulation. In a short position, a Fund will receive or pay an amount based upon the amount, if any, by which the notional amount of the CFD would have decreased or increased in value had it sold the particular stocks short, less the dividends that would have been paid on those stocks, plus a floating rate of interest on the notional amount of the CFD. All of these components are reflected in the market value of the CFD.
NOTE 5 — Affiliated Securities:
During the nine-month period ended July 31, 2023, as disclosed in the following table, certain Funds held 5% or more of the outstanding voting securities of the issuers listed below. As such, these issuers were “affiliated persons” of the applicable Fund(s) for purposes of the 1940 Act. Transactions during the nine-month period ended July 31, 2023 with such affiliated persons are summarized below. During this period, other Funds in the Trust may also have held voting shares of the issuers at levels below 5%.
THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Security | Shares Held at October 31, 2022 | Shares Purchased | Shares Sold | Shares Held at July 31, 2023 | Dividend Income | Realized Gain (Loss) | Net Change in Unrealized App(Dep) | Value at July 31, 2023 | ||||||||||||||||||||||||
Alger Spectra Fund | ||||||||||||||||||||||||||||||||
Preferred Stocks | ||||||||||||||||||||||||||||||||
Prosetta Biosciences, Inc., Series D** | 2,912,012 | — | — | 2,912,012 | $ | — | $ | — | $ | — | $ | — | * | |||||||||||||||||||
Special Purpose Vehicle | ||||||||||||||||||||||||||||||||
Crosslink Ventures Capital C, LLC, Cl. A*** | — | — | (116,718 | ) | 7,656,642 | |||||||||||||||||||||||||||
Crosslink Ventures Capital C, LLC, Cl. B*** | — | — | (83,814 | ) | 4,793,868 | |||||||||||||||||||||||||||
Total | $ | — | $ | — | $ | (200,532 | ) | $ | 12,450,510 |
Security | Shares Held at October 31, 2022 | Shares Purchased | Shares Sold | Shares Held at July 31, 2023 | Dividend Income | Realized Gain (Loss) | Net Change in Unrealized App(Dep) | Value at July 31, 2023 | ||||||||||||||||||||||||
Alger Dynamic Opportunities Fund | ||||||||||||||||||||||||||||||||
Preferred Stocks | ||||||||||||||||||||||||||||||||
Prosetta Biosciences, Inc., Series D** | 41,418 | — | — | 41,418 | $ | — | $ | — | $ | — | $ | — | * | |||||||||||||||||||
Special Purpose Vehicle | ||||||||||||||||||||||||||||||||
Crosslink Ventures Capital C, LLC, Cl. A*** | — | — | (14,689 | ) | 963,591 | |||||||||||||||||||||||||||
Crosslink Ventures Capital C, LLC, Cl. B*** | — | — | (10,076 | ) | 576,312 | |||||||||||||||||||||||||||
Total | $ | — | $ | — | $ | (24,765 | ) | $ | 1,539,903 |
* Prosetta Biosciences, Inc., Series D shares are classified as a Level 3 investment and are fair valued at zero as of July 31, 2023.
** Prosetta Biosciences, Inc., Series D is deemed to be an affiliate of the Funds because the Funds and Prosetta Biosciences, Inc., Series D are under common control.
*** The Alger Fund Complex and other entities managed by Alger Management fully own Crosslink Ventures Capital C, LLC, Class A and Crosslink Ventures Capital C, LLC, Class B. There were no capital increases or decreases for the period ended July 31, 2023.