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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_811-7986
The Alger Institutional Fund
-----------------------------------------------------
(Exact name of registrant as specified in charter)
111 Fifth Avenue, New York, New York 10003
------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Mr. Frederick A. Blum
Fred Alger Management, Inc.
111 Fifth Avenue
New York, New York 10003
-------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-806-8800
Date of fiscal year end: October 31
Date of reporting period: October 31, 2003
ITEM 1. REPORT(S) TO STOCKHOLDERS.
THE ALGER
INSTITUTIONAL FUND
(FORMERLY THE ALGER RETIREMENT FUND)
ALGER LARGECAP GROWTH INSTITUTIONAL PORTFOLIO
ALGER SMALL CAP INSTITUTIONAL PORTFOLIO
ALGER MIDCAP GROWTH INSTITUTIONAL PORTFOLIO
ALGER CAPITAL APPRECIATION INSTITUTIONAL PORTFOLIO
ALGER BALANCED INSTITUTIONAL PORTFOLIO
ALGER SOCIALLY RESPONSIBLE GROWTH INSTITUTIONAL PORTFOLIO
ANNUAL REPORT
OCTOBER 31, 2003
[LOGO]
Dear Shareholders,
December 11, 2003
THE YEAR IN REVIEW
The fiscal year ended October 31, 2003, was dramatic, both economically
and politically. It began shortly after the Dow hit a five year low and ended
with a robust recovery. At the beginning of 2003, the markets had been down
three years in a row, something that hadn't happened since 1939-1941.
Overshadowed by national security concerns, the markets remained essentially
stagnant into the spring. The looming American-led invasion of Iraq dominated
the headlines and the attention of the American public. In spite of encouraging
economic data, both Wall Street and Main Street were preoccupied with war. On
March 19th, the United States invaded Iraq. The markets then fluctuated with the
perceived progress of the military campaign. Later in the spring, as the U.S.
military achieved success, at least relative to very pessimistic media opinion,
the markets recovered dramatically.
Throughout 2003, the U.S. economy grew steadily, aided by the Federal
Reserve, by tax policy, and by improving corporate outlooks. On June 25, 2003,
the Fed cut the Fed Funds Rate to 1.00%, a 40 year low. The combination of low
interest rates, tax cuts, increased federal spending and the mortgage
refinancing boom boosted the economy significantly. Fueled by a spike in
consumer spending and high productivity, third quarter GDP growth soared to
8.2%, the highest rate since 1984. Productivity growth also was exceptional in
2003, as it was in 2002. The one soft spot was the job market. Historically,
there has always been a lag time between economic recovery and job creation. For
the month of October, the unemployment rate was at 6.0%, just below its peak of
6.4%.
By the end of our fiscal year, the public mood had shifted. Both the
economy and the markets experienced remarkable growth, and investors seemed to
have gained a level of rational confidence that was absent from both the bull
market of the late 1990s and the bear market of 2000 through 2002. The Dow rose
17% in the 12 months ended October 31, 2003. The S&P 500 rose 19%, while the
Nasdaq Composite was up a staggering 45%. Interest rates and inflation remained
low, though interest rates did increase as the economy picked up. The yield on
the US Treasury 10-year note was pushed up to 4.30% at October 31, up from 3.89%
a year earlier.
PORTFOLIO MATTERS
Alger LargeCap Growth Institutional Portfolio
The Alger LargeCap Growth Institutional Portfolio increased by 23.10%
during the 12 months ended October 31, 2003, while the Russell 1000 Growth Index
increased by 21.81%. Reasons we outperformed: first, a solid overweighting of
the technology sector, at more than 28% of the portfolio, was key, as this
sector led
-2-
the market recovery, with strong returns from Intel, Veritas, and Cisco; and
second, a similar overweighting in consumer stocks where both retail and
internet stocks like Best Buy and eBay performed well. In both sectors, stock
selection was a strong positive contributor. Our stocks outperformed the Russell
1000 Growth Index in every sector except for telecommunication services. We were
market weighted in health care stocks, at just over 26% of the portfolio, and
performed in line with the sector here. We were hurt by Tenet Healthcare and
HCA, but these were offset by strong performers such as Boston Scientific
Corporation. A notable misjudgment was General Dynamics, which we sold in
frustration at or near the low for the year.
Alger Small Cap Institutional Portfolio
The Alger Small Cap Institutional Portfolio grew 37.65% during the 12
months ended October 31, 2003, while the Russell 2000 Growth Index grew 46.53%.
Our information technology holdings, representing an average of 27% of the
portfolio, did quite well, but underperformed the Russell 2000 Growth Index. Our
industrial stocks were slightly above market weight, and performance was mixed.
Our holdings in for-profit education stocks were strong, but our performance was
hurt by our holdings in capital goods stocks. Actuant Corporation, a
manufacturer of high-end hydraulic equipment and tools, suffered losses as it
faced a cautious customer base, and was forced to trim its workforce. Our
holdings in the health care sector represented an average of 20% of the
portfolio, and underperformed the Russell 2000 Growth Index. Performance was
helped by companies such as Pharmaceutical Resources, a manufacturer and
distributor of generic drugs, but was hurt by holdings in several health care
equipment makers such as Steris. Our holdings in the financial sector
outperformed the Russell 2000 Growth Index, with strong returns from stocks such
as Doral Financial Corp., a bank that specializes in mortgages, and has a strong
presence in Puerto Rico where the housing market is rapidly expanding.
Alger MidCap Growth Institutional Portfolio
The Alger MidCap Growth Institutional Portfolio increased 37.36% for the
12 months ended October 31, 2003, while the Russell MidCap Growth Index
increased 39.31%. Things we got right: in the consumer sector, where the
portfolio had over 23% of its assets, we sharply outperformed the Russell MidCap
Growth Index, with total returns of just over 79%. This was due to our early and
significant positions in NetFlix, an innovative provider of DVDs by mail, and
other exciting growth companies like XM Satellite Radio, Leapfrog Enterprises,
Tractor Supply, Amazon and Urban Outfitters. The portfolio was hurt by our
holdings in energy stocks, which as a sector significantly trailed the returns
of the rest of the market; we reduced our exposure to this sector over the
course of the year. An average of 27% of the portfolio was in information
technology stocks, which contributed to favorable
-3-
returns for the portfolio. Corporate spending on IT has shown steady improvement
throughout the year. One big loser was BISYS Group, a provider of outsourcing
and back-office services for financial institutions, which hurt our performance
in this sector.
Alger Capital Appreciation Institutional Portfolio
The Alger Capital Appreciation Institutional Portfolio increased by 23.30%
for the 12 months ended October 31, 2003, while the Russell 3000 Growth Index
increased by 23.34%. More than 27% of the portfolio holdings were in the
information technology sector, which experienced superior returns and
outperformed the Russell 3000 Growth Index. Stocks such as Yahoo! Inc., a global
internet business and consumer services company, and National Semiconductor
Corporation, a maker of analog microchips, experienced triple digit gains. We
were above market weight in health care stocks, at 31% of the portfolio, and
outperformed the Russell 3000 Growth Index. While the performance of our
holdings in this sector was mixed, strong performance from stocks such as Zimmer
Holdings and Boston Scientific Corp. boosted our overall returns. The portfolio
suffered from our holdings in the consumer staples sector, but we trimmed our
positions in this sector over the course of the year and therefore were able to
reduce the overall impact on the portfolio's performance.
Alger Balanced Institutional Portfolio
The Alger Balanced Institutional Portfolio increased by 11.09%, while the
Russell 1000 Growth Index increased by 21.81% and the Lehman Brothers
Government/Credit Bond Index rose 6.18%. Information technology stocks
represented approximately 29% of the portfolio, and outperformed the Russell
1000 Growth Index. Our performance in this sector was boosted by superior
returns from Intel Corporation, Yahoo! Inc., and Cisco Systems, Inc. Our
holdings in the consumer discretionary sector were above market weight and
out-performed the Russell 1000 Growth Index. Internet and retailing stocks like
eBay and Best Buy were large contributors to our overall returns. The fixed
income portion of the portfolio benefited from its above market weight position
in corporate bonds and its underweight position in Treasuries. Corporate credit
outperformed Treasuries as the economy improved, as corporations reduced debt
levels, and as interest rates rose in response to increased economic activity.
Alger Socially Responsible Growth Institutional Portfolio
The Alger Socially Responsible Growth Institutional Portfolio increased by
21.44% for the 12 months ended October 31, 2003, while the Russell 3000 Growth
Index increased by 23.34%. More than 27% of the portfolio holdings were in the
information technology sector, which experienced superior returns and
outperformed the Russell 3000 Growth Index. Stocks such as Yahoo! Inc., a global
inter-
-4-
net business and consumer services company, and National Semiconductor
Corporation, a maker of analog microchips, experienced triple digit gains. We
were above services. We were market weighted in the health care stocks, at just
over 26% of the portfolio, and performed in line with the sector here. We were
hurt by Tenet Healthcare and HCA, but these were offset by strong performers
such as Boston Scientific Corporation. A notable misjudgment was General
Dynamics, which we sold in frustration at or near the low for the year.
LOOKING AHEAD
As we head into 2004, we believe that the economy will continue to grow at
a strong pace. Trillions of dollars sit in money market and savings accounts,
and as the economy continues to grow steadily, we believe that investors will
look to put those dollars to more productive use in the equity markets. We think
that as investors search for better returns on their capital, high quality, high
growth companies should do well. Fundamentally, these tend to be companies with
management teams that not only led their organizations through the downturn of
the last three years, but looked forward while doing so. They continued to
invest in their products and services, and they should reap the benefits if the
economy accelerates in 2004.
True, many people are unsettled by the situation in Iraq, the federal
deficit, and most importantly, the job market. But consumer demand remains
strong and business spending continues to increase. The result should be wage
increases or job creation, or both. We expect that consumers will continue to
hold up the economy as they have always done. Home mortgage refinancing activity
has begun to slow, but federal spending and tax cuts should continue to provide
economic liquidity well into 2004. And as a general rule, Wall Street
consistently underestimates the ability of consumers to find new ways to
maintain spending, so we are not convinced about the recent predictions that the
consumer may be tapped out.
Other signs are also encouraging. Mergers and acquisitions are a necessary
component of a healthy economy. At a minimum, M&A activity is a sign that
business leaders are optimistic enough about future prospects in their industry
that they feel confident to take risks. October 2003 was the biggest month for
M&A deals since July 2001, and we expect that M&A activity will continue to
increase in the coming fiscal year.
In short, we believe the year ahead is likely to be shaped by an economy
expanding between 3.5% and 4% annually and by rational exuberance in the equity
markets. Investors have maintained high expectations for future earnings. They
are optimistic, but cautious, as are we. Having survived the bubble and the
bust, we, like you, would prefer not to see a repeat of either.
-5-
We hope that we have served you well this year. We know that the issues
surrounding trading activities in the mutual fund industry have raised
questions, and we are doing everything we can to address your concerns and
justify your confidence in us. You have entrusted us to find the best
investments, and we hope that we will continue to earn that trust. We strive for
the utmost rigor and integrity in our investment process, and going forward, we
are committed to making sure that every aspect of our company is run with the
same integrity.
Respectfully submitted,
/s/ Dan C. Chung
Dan C. Chung
Chief Investment Officer
-6-
ALGER LARGECAP GROWTH INSTITUTIONAL PORTFOLIO
PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 2003
(UNAUDITED)
PRIOR TO MARCH 1, 2002, THE ALGER LARGECAP INSTITUTIONAL PORTFOLIO WAS
ALGER GROWTH RETIREMENT PORTFOLIO.
$10,000 HYPOTHETICAL INVESTMENT SINCE INCEPTION NOVEMBER 8, 1993
[Data below represents a line chart in the original document.]
Alger
LargeCap
Growth Russell 1000
Institutional I Growth Index
--------------- ------------
11/8/93 $10000 $10000
10/31/94 10380 10554
10/31/95 14231 13642
10/31/96 15396 16650
10/31/97 19836 21721
10/31/98 24878 27072
10/31/99 35326 36344
10/31/00 38955 39734
10/31/01 28232 23867
10/31/02 21120 19185
10/31/03 25999 23369
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger LargeCap Growth Institutional Class I shares and
the Russell 1000 Growth Index on November 8, 1993, the inception date of the
Alger LargeCap Growth Institutional Class I shares. The figures for the Alger
LargeCap Growth Institutional Class I shares and the Russell 1000 Growth
Index (an unmanaged index of common stocks) include reinvestment of
dividends. Performance for the Alger LargeCap Growth Institutional Class R
shares may vary from the results shown above due to differences in expenses
the class bears.
PERFORMANCE COMPARISON AS OF OCTOBER 31, 2003
AVERAGE ANNUAL RETURNS
1 YEAR 5 YEARS SINCE INCEPTION
-------------------------------------------
Class I (INCEPTION 11/8/93) ......... 23.10% 0.89% 10.05%
Russell 1000 Growth Index ........... 21.81% (2.90)% 8.87%
- --------------------------------------------------------------------------------
Class R (INCEPTION 1/27/03) ......... * * 31.28%
Russell 1000 Growth Index ........... * * 26.71%
- --------------------------------------------------------------------------------
THE PORTFOLIO'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH 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 PORTFOLIO'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE DOES NOT GUARANTEE
FUTURE RESULTS.
-7-
THE ALGER INSTITUTIONAL FUND
ALGER LARGECAP GROWTH INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2003
SHARES COMMON STOCKS--98.9% VALUE
--------- --------
BIOTECHNOLOGY--5.1%
15,638 Amgen Inc.* ........................................ $ 965,803
8,100 Chiron Corporation* ................................ 442,503
29,650 Genentech, Inc.* ................................... 2,430,410
14,750 Gilead Sciences, Inc.* ............................. 805,055
-----------
4,643,771
-----------
CAPITAL MARKETS--3.4%
9,100 Affiliated Managers Group, Inc.*+ .................. 659,750
43,650 Mellon Financial Corporation ....................... 1,303,826
26,800 T. Rowe Price Group Inc. ........................... 1,102,820
-----------
3,066,396
-----------
COMMUNICATION EQUIPMENT--6.1%
133,200 Cisco Systems, Inc.* ............................... 2,794,536
117,400 Corning Incorporated* .............................. 1,289,052
90,925 Nokia Oyj, ADR# .................................... 1,544,816
-----------
5,628,404
-----------
COMPUTERS & PERIPHERALS--5.3%
44,275 Dell Inc.* ......................................... 1,599,213
103,400 EMC Corporation* ................................... 1,431,056
47,700 Hewlett-Packard Company ............................ 1,064,187
35,100 Seagate Technology ................................. 806,598
-----------
4,901,054
-----------
CONSUMER FINANCE--2.2%
19,400 American Express Company ........................... 910,442
18,800 Capital One Financial Corporation .................. 1,143,040
-----------
2,053,482
-----------
DIVERSIFIED FINANCIAL SERVICES--2.1%
39,975 Citigroup Inc. ..................................... 1,894,815
-----------
ENERGY EQUIPMENT & SERVICES--.9%
26,050 BJ Services Company* ............................... 854,700
-----------
FOOD & STAPLES RETAILING--1.0%
15,950 Wal-Mart Stores, Inc. .............................. 940,253
-----------
FREIGHT & LOGISTICS--1.1%
13,300 United Parcel Service, Inc. Cl. B .................. 964,516
-----------
HEALTH CARE EQUIPMENT & SUPPLIES--5.7%
8,600 Alcon, Inc. ........................................ 473,946
28,475 Boston Scientific Corporation* ..................... 1,928,327
50,600 Medtronic, Inc. .................................... 2,305,842
7,600 Varian Medical Systems, Inc.* ...................... 485,944
-----------
5,194,059
-----------
HOTELS, RESTAURANTS & LEISURE--2.6%
13,900 Carnival Corporation ............................... 485,249
25,700 International Game Technology ...................... 841,675
30,600 Starwood Hotels & Resorts Worldwide, Inc. .......... 1,032,138
-----------
2,359,062
-----------
-8-
THE ALGER INSTITUTIONAL FUND
ALGER LARGECAP GROWTH INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- --------
INDUSTRIAL CONGLOMERATES--4.7%
57,050 General Electric Company ........................... $ 1,655,021
128,600 Tyco International Ltd. ............................ 2,685,168
-----------
4,340,189
-----------
INSURANCE--2.0%
29,750 American International Group, Inc. ................. 1,809,692
-----------
INTERNET & CATALOG RETAIL--5.5%
25,600 Amazon.com, Inc.*+ ................................. 1,393,152
52,100 eBay Inc.* ......................................... 2,914,474
12,600 NetFlix Inc.*+ .................................... 721,980
-----------
5,029,606
-----------
INTERNET SOFTWARE & SERVICES--3.3%
68,300 Yahoo! Inc.* ....................................... 2,984,710
-----------
MEDIA--5.1%
67,650 Disney (Walt) Company .............................. 1,531,596
47,000 Fox Entertainment Group, Inc. Cl. A* ............... 1,301,900
111,300 General Motors Corporation Cl. H* .................. 1,828,659
-----------
4,662,155
-----------
OIL & GAS--1.9%
36,725 Devon Energy Corporation ........................... 1,781,162
-----------
PHARMACEUTICALS--10.6%
26,450 Abbott Laboratories ................................ 1,127,299
18,400 Allergan, Inc. ..................................... 1,391,408
56,900 Bristol-Myers Squibb Company ....................... 1,443,553
51,325 Johnson & Johnson .................................. 2,583,187
20,600 Teva Pharmaceutical Industries Ltd. ADR# ........... 1,171,934
22,300 Watson Pharmaceuticals Inc.* ....................... 875,721
25,850 Wyeth .............................................. 1,141,019
-----------
9,734,121
-----------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT--11.9%
44,900 Analog Devices, Inc.* .............................. 1,990,417
36,500 Applied Materials, Inc.* ........................... 853,005
84,600 Intel Corporation .................................. 2,796,030
74,100 Teradyne, Inc.* .................................... 1,687,998
75,200 Texas Instruments Incorporated ..................... 2,174,784
45,200 Xilinx, Inc.* ...................................... 1,432,840
-----------
10,935,074
-----------
SOFTWARE--8.7%
143,050 Microsoft Corporation .............................. 3,740,758
73,800 PeopleSoft, Inc.* .................................. 1,532,088
55,000 Synopsys, Inc.* .................................... 1,744,600
27,100 VERITAS Software Corporation* ...................... 979,665
-----------
7,997,111
-----------
-9-
THE ALGER INSTITUTIONAL FUND
ALGER LARGECAP GROWTH INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- --------
SPECIALTY RETAIL--7.8%
31,800 Best Buy Co., Inc.* ................................ $ 1,854,258
57,800 Home Depot, Inc. ................................... 2,142,646
103,700 The Gap, Inc. ...................................... 1,978,596
57,200 TJX Companies, Inc. ................................ 1,200,628
-----------
7,176,128
-----------
WIRELESS TELECOMMUNICATION SERVICES--1.9%
30,100 Nextel Communications, Inc. Cl. A* ................. 728,420
47,500 Vodafone Group PLC Sponsored ADR# .................. 1,004,625
-----------
1,733,045
-----------
Total Common Stocks
(Cost $77,821,676) ............................... 90,683,505
-----------
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--3.7%
---------
U.S. AGENCY OBLIGATIONS--1.7%
$1,550,000.00 Federal National Mortgage Association, 0.93%,
11/3/03 (Cost $1,549,920) ........................ 1,549,920
-----------
SHARES OTHER SHORT-TERM INVESTMENTS--2.0%
---------
1,889,400 Securities Lending Quality Trust
(Cost $1,889,400)(b) ............................. 1,889,400
-----------
Total Short-Term Investments
(Cost $3,439,320) ................................ 3,439,320
-----------
Total Investments
(Cost $81,260,996)(a) ................................ 102.6% 94,122,825
Liabilities in Excess of Other Assets .................. (2.6) (2,401,774)
----- -----------
Net Assets ............................................. 100.0% $91,721,051
===== ===========
- -----------
* Non-income producing security.
+ Securities partially or fully on loan.
# American Depositary Receipts.
(a) At October 31, 2003, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $82,016,950, amounted to
$12,105,875 which consisted of aggregate gross unrealized appreciation of
$13,172,398 and aggregate gross unrealized depreciation of $1,066,523.
(b) Represents investment of cash collateral received for securities on loan.
See Notes to Financial Statements.
-10-
ALGER SMALL CAP INSTITUTIONAL PORTFOLIO
PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 2003
(UNAUDITED)
$10,000 HYPOTHETICAL INVESTMENT SINCE INCEPTION NOVEMBER 8, 1993
[Data below represents a line chart in the original document.]
Alger Small Cap Russell 2000
Institutional I Growth Index
--------------- ------------
11/8/93 $10000 $10000
10/31/94 10830 10005
10/31/95 17999 12063
10/31/96 19654 13671
10/31/97 23388 16565
10/31/98 22971 13940
10/31/99 35085 18022
10/31/00 38614 20934
10/31/01 21678 14337
10/31/02 17813 11246
10/31/03 24519 16478
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger Small Cap Institutional Class I shares and the
Russell 2000 Growth Index on November 8, 1993, the inception date of the
Alger Small Cap Institutional Class I shares. The figures for the Alger Small
Cap Institutional Class I shares and the Russell 2000 Growth Index (an
unmanaged index of common stocks) include reinvestment of dividends.
Performance for the Alger Small Cap Institutional Class R shares may vary
from the results shown above due to differences in expenses the class bears.
PERFORMANCE COMPARISON AS OF OCTOBER 31, 2003
AVERAGE ANNUAL RETURNS
1 YEAR 5 YEARS SINCE INCEPTION
------------------------------------------
Class I (INCEPTION 11/8/93) ......... 37.65% 1.31% 9.40%
Russell 2000 Growth Index ........... 46.53% 3.40% 5.13%
- --------------------------------------------------------------------------------
Class R (INCEPTION 1/27/03) ......... * * 40.39%
Russell 2000 Growth Index ........... * * 46.56%
- --------------------------------------------------------------------------------
THE PORTFOLIO'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH 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 PORTFOLIO'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE DOES NOT GUARANTEE
FUTURE RESULTS.
-11-
THE ALGER INSTITUTIONAL FUND
ALGER SMALL CAP INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2003
SHARES COMMON STOCKS--94.8% VALUE
--------- -------
AEROSPACE & DEFENSE--.8%
14,450 Alliant Techsystems Inc.* .......................... $ 747,932
-----------
AIR FREIGHT & LOGISTICS--2.6%
50,600 J.B. Hunt Transport Services, Inc.* ................ 1,284,228
57,830 Pacer International, Inc.* ......................... 1,192,455
-----------
2,476,683
-----------
BIOTECHNOLOGY--5.4%
65,550 Alkermes, Inc.* .................................... 850,183
25,300 Gen-Probe Incorporated* ............................ 677,281
55,200 InterMune Inc.* .................................... 1,104,000
30,750 Onyx Pharmaceuticals, Inc.* ........................ 752,453
56,200 QLT Inc.* .......................................... 868,290
37,800 Telik, Inc.* ....................................... 768,096
-----------
5,020,303
-----------
CAPITAL MARKETS--3.7%
21,500 Affiliated Managers Group, Inc.* ................... 1,558,750
32,600 Jefferies Group, Inc. .............................. 1,010,600
34,500 National Financial Partners Corporation* ........... 934,950
-----------
3,504,300
-----------
COMMERCIAL BANKS--2.5%
39,850 UCBH Holdings, Inc. ................................ 1,423,044
25,300 Westcorp ........................................... 956,846
-----------
2,379,890
-----------
COMMERCIAL SERVICES & SUPPLIES--3.2%
14,700 Corinthian Colleges, Inc.* ......................... 910,224
2,500 CoStar Group Inc.* ................................. 94,125
17,400 Education Management Corporation* .................. 1,099,332
12,100 First Marblehead Corporation (The)* ................ 268,015
23,300 Monster Worldwide Inc.* ............................ 593,451
-----------
2,965,147
-----------
COMMUNICATION EQUIPMENT--3.7%
47,600 Advanced Fibre Communications, Inc.* ............... 1,145,732
11,450 Enterasys Networks, Inc.* .......................... 44,655
253,900 Finisar Corporation* ............................... 787,090
23,100 NetScreen Technologies, Inc.* ...................... 614,922
55,500 Tekelec* ........................................... 892,995
-----------
3,485,394
-----------
COMPUTERS & PERIPHERALS--2.5%
23,850 Avid Technology, Inc.* ............................. 1,233,999
81,100 Maxtor Corporation* ................................ 1,108,637
-----------
2,342,636
-----------
FOOD PRODUCTS--.9%
22,400 American Italian Pasta Company Cl. A* .............. 856,576
-----------
-12-
THE ALGER INSTITUTIONAL FUND
ALGER SMALL CAP INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- -------
HEALTH CARE EQUIPMENT & SUPPLIES--7.1%
60,450 ALARIS Medical Systems, Inc.* ...................... $ 937,580
197,300 Cardiac Science, Inc.* ............................. 803,011
67,150 Cytyc Corporation* ................................. 868,250
21,400 Dade Behring Holdings Inc.* ........................ 654,198
29,500 Fisher Scientific International Inc.* .............. 1,187,375
54,600 Intuitive Surgical, Inc.* .......................... 791,154
46,260 Wright Medical Group, Inc.* ........................ 1,357,731
-----------
6,599,299
-----------
HEALTH CARE PROVIDERS & SERVICES--5.4%
28,250 Kindred Healthcare, Inc.* .......................... 1,165,030
22,000 Mid Atlantic Medical Services, Inc.* ............... 1,284,800
43,500 VCA Antech, Inc.* .................................. 1,228,440
54,600 VISX, Incorporated* ................................ 1,324,596
-----------
5,002,866
-----------
HOTELS, RESTAURANTS & LEISURE--4.8%
29,375 Applebee's International, Inc. ..................... 1,101,856
29,600 Multimedia Games, Inc.* ............................ 1,113,256
20,600 P.F. Chang's China Bistro, Inc.* ................... 1,004,044
41,000 Station Casinos, Inc. .............................. 1,219,750
-----------
4,438,906
-----------
INFORMATION TECHNOLOGY SERVICES--2.4%
41,050 Alliance Data Systems Corporation* ................. 1,140,369
44,950 ManTech International Corporation Cl. A* ........... 1,099,477
-----------
2,239,846
-----------
INSURANCE--1.0%
25,650 Arch Capital Group Ltd.* ........................... 936,225
-----------
INTERNET SOFTWARE & SERVICES--8.2%
105,100 Autobytel Inc.* .................................... 1,098,295
48,700 Digital Insight Corporation* ....................... 1,021,726
36,500 DigitalNet Holdings, Inc.* ......................... 843,515
52,400 InfoSpace, Inc.* ................................... 1,366,592
75,200 Netegrity, Inc.* ................................... 891,872
73,000 Openwave Systems, Inc.* ............................ 952,650
17,900 SINA Corp.* ........................................ 691,477
101,600 ValueClick, Inc.* .................................. 818,896
-----------
7,685,023
-----------
LEISURE EQUIPMENT & PRODUCTS--1.1%
29,350 Leapfrog Enterprises, Inc.*+ ....................... 1,014,629
-----------
MACHINERY--1.5%
42,300 Actuant Corporation Cl. A* ......................... 1,363,752
-----------
MEDIA--2.2%
18,640 Media General, Inc. Cl. A .......................... 1,231,172
51,350 Radio One, Inc. Cl. A* ............................. 823,141
-----------
2,054,313
-----------
-13-
THE ALGER INSTITUTIONAL FUND
ALGER SMALL CAP INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- -------
METALS & MINING--1.3%
115,100 GrafTech International Ltd.* ....................... $ 1,195,889
-----------
OIL & GAS--2.5%
18,400 Noble Energy, Inc. ................................. 730,848
20,000 Pogo Producing Company ............................. 836,200
27,600 Brown (Tom) Inc.* .................................. 745,752
-----------
2,312,800
-----------
PAPER & FOREST PRODUCTS--1.2%
56,600 Louisiana-Pacific Corporation* ..................... 1,076,532
-----------
PHARMACEUTICALS--5.5%
23,700 Angiotech Pharmaceuticals, Inc.* ................... 1,083,801
46,700 Medicines Company* ................................. 1,244,555
15,300 Pharmaceutical Resources, Inc.* .................... 1,105,884
64,900 SICOR Inc.* ........................................ 1,739,320
-----------
5,173,560
-----------
ROAD & RAIL--.1%
6,100 Overnite Corporation* .............................. 135,176
-----------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT--10.1%
46,600 Brooks Automation, Inc.* ........................... 1,162,670
73,700 Fairchild Semiconductor International, Inc.* ....... 1,665,620
26,750 Integrated Circuit Systems, Inc.* .................. 897,997
28,950 International Rectifier Corporation* ............... 1,381,784
7,850 OmniVision Technologies, Inc.* ..................... 445,880
50,200 Photronics, Inc.* .................................. 1,081,308
37,100 Power Integrations, Inc.* .......................... 1,291,822
30,500 Varian Semiconductor Equipment Associates, Inc.* ... 1,474,675
-----------
9,401,756
-----------
SOFTWARE--6.2%
51,150 Documentum, Inc.* .................................. 1,521,712
23,025 Fair Isaac Corporation ............................. 1,468,535
33,300 Hyperion Solutions Corporation* .................... 1,115,217
43,900 Quest Software, Inc.* .............................. 654,110
72,700 Verity, Inc.* ...................................... 1,021,435
-----------
5,781,009
-----------
SPECIALTY RETAIL--4.5%
32,800 AnnTaylor Stores Corporation* ...................... 1,174,240
42,200 Charlotte Russe Holding Inc.* ...................... 567,590
35,500 PETCO Animal Supplies, Inc.* ....................... 1,177,890
40,075 Rent-A-Center, Inc.* ............................... 1,252,745
-----------
4,172,465
-----------
TEXTILES & APPAREL--1.2%
16,550 Oxford Industries, Inc. ............................ 1,133,674
-----------
-14-
THE ALGER INSTITUTIONAL FUND
ALGER SMALL CAP INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- -------
THRIFTS & MORTGAGE FINANCE--3.2%
94,283 Bank Mutual Corporation ............................ $ 1,115,367
59,450 BankAtlantic Bancorp, Inc. Cl. A ................... 998,165
17,400 Doral Financial Corp. .............................. 878,700
-----------
2,992,232
-----------
Total Common Stocks
(Cost $70,720,691) ............................... 88,488,813
-----------
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--6.7%
----------
U.S. AGENCY OBLIGATIONS
$6,275,000 Federal National Mortgage Association, 0.93%,
11/3/03 (Cost $6,274,676) ........................ 6,274,676
-----------
Total Investments
(Cost $76,995,367)(a) ............................... 101.5% 94,763,489
Liabilities in Excess of Other Assets .................. (1.5) (1,393,578)
----- -----------
Net Assets ............................................. 100.0% $93,369,911
===== ===========
- -----------
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At October 31, 2003, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $77,390,698, amounted to
$17,372,791 which consisted of aggregate gross unrealized appreciation of
$18,128,271 and aggregate gross unrealized depreciation of $755,480.
See Notes to Financial Statements.
-15-
ALGER MIDCAP GROWTH INSTITUTIONAL PORTFOLIO
PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 2003 (UNAUDITED)
$10,000 HYPOTHETICAL INVESTMENT SINCE INCEPTION NOVEMBER 8, 1993
[Data below represents a line chart in the original document.]
Alger MidCap
Growth S&P MidCap Russell Midcap
Institutional I 400 Index Growth Index
--------------- ----------- --------------
11/8/93 $10000 $10000 $10000
10/31/94 11660 10292 10311
10/31/95 17968 12475 12811
10/31/96 19088 14637 15111
10/31/97 24544 19417 19822
10/31/98 27366 20721 19286
10/31/99 38966 25087 26552
10/31/00 58951 33027 36819
10/31/01 46839 28916 21066
10/31/02 37780 27531 17356
10/31/03 51895 35998 24177
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger MidCap Growth Institutional Class I shares, the
Russell Midcap Growth Index and the S&P MidCap 400 Index on November 8, 1993,
the inception date of the Alger MidCap Growth Institutional Class I shares.
Figures for the Alger MidCap Growth Institutional Class I shares, the Russell
Midcap Growth Index (an unmanaged index of common stocks) and the S&P MidCap
400 Index (an unmanaged index of common stocks) include reinvestment of
dividends. Performance for the Alger MidCap Growth Institutional Class R
shares may vary from the results shown above due to differences in expenses
the class bears.
PERFORMANCE COMPARISON AS OF OCTOBER 31, 2003
AVERAGE ANNUAL RETURNS
1 YEAR 5 YEARS SINCE INCEPTION
------------------------------------------
Class I (INCEPTION 11/8/93) ......... 37.36% 13.65% 17.94%
Russell Midcap Growth Index ......... 39.31% 4.63% 9.25%
S&P MidCap 400 Index ................ 30.75% 11.68% 13.69%
- --------------------------------------------------------------------------------
Class R (INCEPTION 1/27/03) ......... * * 43.71%
Russell Midcap Growth Index ......... * * 38.64%
S&P MidCap 400 Index ................ * * 32.15%
- --------------------------------------------------------------------------------
THE PORTFOLIO'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH 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 PORTFOLIO'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE DOES NOT GUARANTEE
FUTURE RESULTS.
-16-
THE ALGER INSTITUTIONAL FUND
ALGER MIDCAP GROWTH INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2003
SHARES COMMON STOCKS--88.4% VALUE
--------- -------
AEROSPACE & DEFENSE--2.2%
253,025 L-3 Communications Holdings, Inc.* ................. $11,826,389
-----------
BIOTECHNOLOGY--5.0%
194,500 Celgene Corporation* ............................... 8,108,705
263,400 Gen-Probe Incorporated* ............................ 7,051,218
57,400 Gilead Sciences, Inc.* ............................. 3,132,892
43,500 Invitrogen Corporation* ............................ 2,766,165
408,100 Millennium Pharmaceuticals, Inc.* .................. 6,496,952
-----------
27,555,932
-----------
CAPITAL MARKETS--3.6%
117,329 Affiliated Managers Group, Inc.* ................... 8,506,352
1,057,750 E*Trade Financial Corporation* ..................... 10,894,825
-----------
19,401,177
-----------
COMMERCIAL BANKS--.4%
95,950 Synovus Financial Corp. ............................ 2,648,220
-----------
COMMERCIAL SERVICES & SUPPLIES--.8%
69,650 Corinthian Colleges, Inc.* ......................... 4,312,728
-----------
COMMUNICATION EQUIPMENT--3.7%
113,900 Advanced Fibre Communications, Inc.* ............... 2,741,573
666,100 CIENA Corporation* ................................. 4,269,701
412,500 Comverse Technology, Inc.* ......................... 7,441,500
91,800 Scientific Atlanta Inc. ............................ 2,717,280
371,200 Tellabs, Inc.* ..................................... 2,795,136
-----------
19,965,190
-----------
COMPUTERS & PERIPHERALS--1.2%
199,900 Maxtor Corporation* ................................ 2,732,633
253,000 PalmOne, Inc.* ..................................... 3,625,490
-----------
6,358,123
-----------
CONSUMER FINANCE--1.0%
86,600 Capital One Financial Corporation .................. 5,265,280
-----------
ELECTRONIC EQUIPMENT & INSTRUMENTS--1.1%
268,850 Thermo Electron Corporation* ....................... 5,909,323
-----------
ENERGY EQUIPMENT & SERVICES--1.1%
144,975 Cooper Cameron Corporation* ........................ 6,207,829
-----------
FOOD & STAPLES RETAILING--1.0%
87,600 Whole Foods Market, Inc.* .......................... 5,189,424
-----------
HEALTH CARE EQUIPMENT & SUPPLIES--1.5%
126,300 Varian Medical Systems, Inc.* ...................... 8,075,622
-----------
HEALTH CARE PROVIDERS & SERVICES--7.0%
246,700 Health Management Associates, Inc. Cl. A ........... 5,464,405
69,800 Laboratory Corporation of America Holdings* ........ 2,474,410
85,700 Medco Health Solutions, Inc.* ...................... 2,845,240
246,350 Omnicare, Inc. ..................................... 9,445,059
92,600 Quest Diagnostics Incorporated* .................... 6,264,390
461,000 VISX, Incorporated* ................................ 11,183,860
-----------
37,677,364
-----------
-17-
THE ALGER INSTITUTIONAL FUND
ALGER MIDCAP GROWTH INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- --------
HOTELS, RESTAURANTS & LEISURE--6.6%
179,400 Alliance Gaming Corporation* ....................... $ 4,350,450
610,000 Hilton Hotels Corporation .......................... 9,662,400
112,200 International Speedway Corporation Cl. A ........... 4,772,988
122,600 MGM MIRAGE* ........................................ 4,352,300
209,300 Multimedia Games, Inc.*+ ........................... 7,871,773
144,200 Starbucks Corporation* ............................. 4,556,720
-----------
35,566,631
-----------
INFORMATION TECHNOLOGY SERVICES--1.4%
93,000 Alliance Data Systems Corporation* ................. 2,583,540
86,200 BISYS Group, Inc. (The)* ........................... 1,232,660
136,650 SunGard Data Systems Inc.* ......................... 3,833,032
-----------
7,649,232
-----------
INSURANCE--1.8%
284,500 Willis Group Holdings Limited ...................... 9,473,850
-----------
INTERNET & CATALOG RETAIL--3.8%
360,950 NetFlix Inc.*+ ..................................... 20,682,435
-----------
INTERNET SOFTWARE & SERVICES--1.4%
203,600 SINA Corp.* ........................................ 7,865,068
-----------
LEISURE EQUIPMENT & PRODUCTS--.6%
96,200 Leapfrog Enterprises, Inc.*+ ....................... 3,325,634
-----------
MACHINERY--.7%
101,600 Dover Corporation .................................. 3,964,432
-----------
MEDIA--4.1%
98,335 Entercom Communications Corp.* ..................... 4,504,726
823,900 Gemstar-TV Guide International, Inc.* .............. 3,864,091
682,950 XM Satellite Radio Holdings Inc. Cl. A* ............ 13,836,567
-----------
22,205,384
-----------
OIL & GAS--1.7%
216,775 EOG Resources, Inc. ................................ 9,134,899
-----------
PHARMACEUTICALS--3.7%
121,800 Allergan, Inc. ..................................... 9,210,516
93,025 Mylan Laboratories Inc. ............................ 2,246,554
222,900 Watson Pharmaceuticals Inc.* ....................... 8,753,283
-----------
20,210,353
-----------
ROAD & RAIL--1.3%
207,100 Yellow Corporation* ................................ 6,803,235
-----------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT--10.5%
400,400 Altera Corporation * ............................... 8,100,092
376,000 Cree, Inc.* ........................................ 6,677,760
257,300 Cypress Semiconductor Corporation* ................. 5,521,658
243,000 Novellus Systems, Inc. * ........................... 10,033,470
156,800 Rambus Inc.* ....................................... 3,882,368
709,950 Skyworks Solutions, Inc.* .......................... 6,091,371
-18-
THE ALGER INSTITUTIONAL FUND
ALGER MIDCAP GROWTH INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- --------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT (CONTINUED)
541,800 Teradyne, Inc.* ................................... $ 12,342,204
132,700 Xilinx, Inc.* ..................................... 4,206,590
------------
56,855,513
------------
SOFTWARE--8.9%
234,725 Amdocs Limited* ................................... 5,037,199
194,400 BEA Systems, Inc.* ................................ 2,702,160
145,000 Fair Isaac Corporation ............................ 9,248,100
78,380 PalmSource, Inc.* ................................. 2,992,565
673,800 PeopleSoft, Inc.* ................................. 13,988,088
450,200 Synopsys, Inc.* ................................... 14,280,344
------------
48,248,456
------------
SPECIALTY RETAIL--9.0%
70,800 Advance Auto Parts, Inc.* ......................... 5,537,976
75,700 AnnTaylor Stores Corporation* ..................... 2,710,060
92,250 Barnes & Noble, Inc.* ............................. 2,749,050
137,300 Best Buy Co., Inc.* ............................... 8,005,963
144,300 Hot Topic, Inc.* .................................. 4,142,853
308,600 Pacific Sunwear of California, Inc.* .............. 7,125,574
232,250 TJX Companies, Inc. ............................... 4,874,928
324,200 Tractor Supply Company* ........................... 13,587,222
------------
48,733,626
------------
TEXTILES, APPAREL & LUXURY GOODS--1.8%
43,000 Coach, Inc.* ...................................... 1,525,210
189,300 Fossil, Inc.* ..................................... 5,111,100
87,700 Jones Apparel Group, Inc. ......................... 3,025,650
------------
9,661,960
------------
TRADING COMPANIES & DISTRIBUTORS--.5%
55,645 W. W. Grainger, Inc. .............................. 2,547,428
------------
WIRELESS TELECOMMUNICATION SERVICES--1.0%
145,700 SpectraSite, Inc.* ................................ 5,645,875
------------
Total Common Stocks (Cost $415,386,392) ........... 478,966,612
------------
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--9.3%
----------
U.S. AGENCY OBLIGATIONS
$50,250,000 Federal National Mortgage Association, 0.93%
11/3/03 (Cost $50,247,404) ...................... 50,247,404
------------
Total Investments (Cost $465,633,796)(a) ................ 97.7% 529,214,016
Other Assets in Excess of Liabilities ................... 2.3 12,318,106
----- ------------
Net Assets .............................................. 100.0% $541,532,122
===== ============
- -----------
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At October 31, 2003, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $467,014,654, amounted to
$62,199,362 which consisted of aggregate gross unrealized appreciation of
$69,654,858 and aggregate gross unrealized depreciation of $7,455,496.
See Notes to Financial Statements.
-19-
ALGER CAPITAL APPRECIATION INSTITUTIONAL PORTFOLIO
PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 2003 (UNAUDITED)
$10,000 HYPOTHETICAL INVESTMENT SINCE INCEPTION NOVEMBER 8, 1993
[Data below represents a line chart in the original document.]
Alger Capital
Appreciation Russell 2000
Institutional I Growth Index
--------------- --------------
11/8/93 $10000 $10000
10/31/94 10080 10507
10/31/95 15564 13487
10/31/96 16515 16338
10/31/97 20820 21180
10/31/98 26672 25499
10/31/99 49169 34143
10/31/00 55631 37490
10/31/01 35931 22740
10/31/02 27641 18250
10/31/03 34082 22510
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger Capital Appreciation Institutional Class I
shares and the Russell 3000 Growth Index on November 8, 1993, the inception
date of the Alger Capital Appreciation Institutional Class I shares. Figures
for the Alger Capital Appreciation Institutional Class I shares and the
Russell 3000 Growth Index (an unmanaged index of common stocks) include
reinvestment of dividends. Performance for the Alger Capital Appreciation
Institutional Class R shares may vary from the results shown above due to
differences in expenses the class bears.
PERFORMANCE COMPARISON AS OF OCTOBER 31, 2003
AVERAGE ANNUAL RETURNS
1 YEAR 5 YEARS SINCE INCEPTION
-----------------------------------------
Class I shares (INCEPTION 11/8/93) ... 23.30% 5.03% 13.07%
Russell 3000 Growth Index ............ 23.34% (2.46)% 8.47%
- --------------------------------------------------------------------------------
Class R shares (INCEPTION 1/27/03) ... * * 31.70%
Russell 3000 Growth Index ............ * * 27.98%
- --------------------------------------------------------------------------------
THE PORTFOLIO'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH 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 PORTFOLIO'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE DOES NOT GUARANTEE
FUTURE RESULTS.
-20-
THE ALGER INSTITUTIONAL FUND
ALGER CAPITAL APPRECIATION INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2003
SHARES COMMON STOCKS--100.3% VALUE
--------- --------
BIOTECHNOLOGY--7.8%
32,100 Amgen Inc.* ........................................ $ 1,982,496
64,600 Genentech, Inc.* ................................... 5,295,262
27,800 Gilead Sciences, Inc.* ............................. 1,517,324
14,400 Invitrogen Corporation* ............................ 915,696
96,400 Millennium Pharmaceuticals, Inc.* .................. 1,534,688
80,200 QLT Inc.*+ ......................................... 1,239,090
-----------
12,484,556
-----------
CAPITAL MARKETS--1.5%
79,100 Bank of New York Company, Inc. (The) ............... 2,467,129
-----------
COMMERCIAL BANKS--1.0%
59,600 U.S. Bancorp ....................................... 1,622,312
-----------
COMMERCIAL SERVICES & SUPPLIES--1.7%
19,850 Apollo Group, Inc. Cl. A* .......................... 1,261,071
56,100 Monster Worldwide Inc.* ............................ 1,428,867
-----------
2,689,938
-----------
COMMUNICATION EQUIPMENT--9.8%
171,500 Advanced Fibre Communications, Inc.* ............... 4,128,005
396,600 CIENA Corporation* ................................. 2,542,206
156,600 Cisco Systems, Inc.* ............................... 3,285,468
141,500 Comverse Technology, Inc.* ......................... 2,552,660
298,200 Corning Incorporated* .............................. 3,274,236
-----------
15,782,575
-----------
COMPUTERS & PERIPHERALS--2.2%
181,400 EMC Corporation* ................................... 2,510,576
11,900 SanDisk Corporation* ............................... 959,140
-----------
3,469,716
-----------
CONSUMER FINANCE--1.7%
46,000 Capital One Financial Corporation .................. 2,796,800
-----------
DIVERSIFIED FINANCIAL SERVICES--2.6%
88,500 Citigroup Inc. ..................................... 4,194,900
-----------
ENERGY EQUIPMENT & SERVICES--1.1%
72,200 Halliburton Company ................................ 1,724,136
-----------
HEALTH CARE EQUIPMENT & SUPPLIES--6.1%
72,050 Boston Scientific Corporation* ..................... 4,879,226
53,600 Medtronic, Inc. .................................... 2,442,552
13,400 Varian Medical Systems, Inc.* ...................... 856,796
25,400 Zimmer Holdings, Inc.* ............................. 1,620,774
-----------
9,799,348
-----------
HEALTH CARE PROVIDERS & SERVICES--3.1%
75,200 Health Management Associates, Inc. Cl. A ........... 1,665,680
49,000 Medco Health Solutions, Inc.* ...................... 1,626,800
24,100 Quest Diagnostics Incorporated* .................... 1,630,365
-----------
4,922,845
-----------
-21-
THE ALGER INSTITUTIONAL FUND
ALGER CAPITAL APPRECIATION INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- --------
HOTELS, RESTAURANTS & LEISURE--1.2%
60,400 International Game Technology ...................... $ 1,978,100
-----------
INDUSTRIAL CONGLOMERATES--2.0%
110,800 General Electric Company ........................... 3,214,308
-----------
INFORMATION TECHNOLOGY SERVICES--1.1%
43,500 Paychex, Inc. ...................................... 1,693,020
-----------
INSURANCE--1.5%
39,700 American International Group, Inc. ................. 2,414,951
-----------
INTERNET & CATALOG RETAIL--5.1%
91,000 eBay Inc.* ......................................... 5,090,540
80,900 InterActiveCorp* ................................... 2,969,839
-----------
8,060,379
-----------
INTERNET SOFTWARE & SERVICES--5.6%
84,000 United Online, Inc.*+ .............................. 2,418,360
149,100 Yahoo! Inc.* ....................................... 6,515,670
-----------
8,934,030
-----------
MEDIA--5.9%
157,500 Disney (Walt) Company .............................. 3,565,800
115,000 General Motors Corporation Cl. H* .................. 1,889,450
267,900 Time Warner Inc.* .................................. 4,096,191
-----------
9,551,441
-----------
PHARMACEUTICALS--5.6%
29,900 Allergan, Inc. ..................................... 2,261,038
82,350 Mylan Laboratories Inc. ............................ 1,988,752
74,330 Pfizer Inc. ........................................ 2,348,828
43,200 Teva Pharmaceutical Industries Ltd. ADR# ........... 2,457,648
-----------
9,056,266
-----------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT--15.1%
104,500 Applied Materials Inc.* ............................ 2,442,165
151,000 Broadcom Corporation Cl. A*+ ....................... 4,824,450
83,500 Intel Corporation .................................. 2,759,675
105,800 Intersil Corporation Cl. A ......................... 2,728,582
83,400 Kulicke & Soffa Industries Inc.* ................... 1,224,312
231,700 Micron Technology, Inc.* ........................... 3,322,578
60,700 National Semiconductor Corporation* ................ 2,466,241
40,000 Novellus Systems, Inc.* ............................ 1,651,600
98,400 Texas Instruments Incorporated ..................... 2,845,728
-----------
24,265,331
-----------
SOFTWARE--9.7%
131,200 BEA Systems, Inc.* ................................. 1,823,680
16,100 Electronic Arts Inc.* .............................. 1,594,544
155,000 Microsoft Corporation .............................. 4,053,250
137,300 Oracle Corporation* ................................ 1,642,108
236,400 PeopleSoft, Inc.* .................................. 4,907,664
44,600 VERITAS Software Corporation* ...................... 1,612,290
-----------
15,633,536
-----------
-22-
THE ALGER INSTITUTIONAL FUND
ALGER CAPITAL APPRECIATION INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- --------
SPECIALTY RETAIL--6.6%
143,300 Circuit City Stores, Inc. ........................ $ 1,367,082
110,100 Home Depot, Inc. ................................. 4,081,407
114,000 Pacific Sunwear of California, Inc.* ............. 2,632,260
132,200 The Gap, Inc. .................................... 2,522,376
------------
10,603,125
------------
WIRELESS TELECOMMUNICATION SERVICES--2.3%
114,200 Nextel Communications, Inc. Cl. A* ............... 2,763,640
23,000 SpectraSite, Inc.* ............................... 891,250
------------
3,654,890
------------
Total Common Stocks
(Cost $140,524,852) ............................ 161,013,632
------------
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--6.2%
----------
U.S. AGENCY OBLIGATIONS--.8%
$1,300,000 Federal National Mortgage Association, 0.93%,
11/3/03 (Cost $1,299,933) ...................... 1,299,933
------------
SHARES OTHER SHORT-TERM INVESTMENTS--5.4%
----------
8,718,950 Security Lending Quality Trust
(Cost $8,718,950)(b) ........................... 8,718,950
------------
Total Short-Term Investments
(Cost $10,018,883) ............................. 10,018,883
------------
Total Investments
(Cost $150,543,735)(a) ................................ 106.5% 171,032,515
Liabilities in Excess of Other Assets ................... (6.5) (10,397,676)
----- ------------
Net Assets .............................................. 100.0% $160,634,839
===== ============
- -----------
* Non-income producing security.
+ Securities partially or fully on loan.
# American Depositary Receipts.
(a) At October 31, 2003, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $150,755,356 amounted to
$20,277,159 which consisted of aggregate gross unrealized appreciation of
$21,702,839 and aggregate gross unrealized depreciation of $1,425,680.
(b) Represents investments of cash collateral received for securities on loan.
See Notes to Financial Statements.
-23-
ALGER BALANCED INSTITUTIONAL PORTFOLIO
PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 2003 (UNAUDITED)
$10,000 HYPOTHETICAL INVESTMENT SINCE INCEPTION DECEMBER 4, 2000
[Data below represents a line chart in the original document.]
Alger Balanced Lehman Gov't/Credit Russell 1000
Institutional I Bond Index Growth Index
--------------- ------------------- ------------
12/4/00 $10000 $10000 $10000
10/31/01 8200 11317 7067
10/31/02 6670 11937 5680
10/31/03 7410 12674 6919
The chart above illustrates the change in value of a hypothetical $10,000
investment made in the Alger Balanced Institutional Class I shares, the
Russell 1000 Growth Index and the Lehman Gov't/Credit Bond Index on December
4, 2000, the inception date of the Alger Balanced Institutional Class I
shares, through October 31, 2003. Figures for the Alger Balanced
Institutional Class I shares, the Russell 1000 Growth Index (an unmanaged
index of common stocks) and the Lehman Gov't/Credit Bond Index (an unmanaged
index of government and corporate bonds) include reinvestment of dividends
and/or interest. Performance for the Alger Balanced Institutional Class R
shares may vary from the results shown above due to differences in expenses
the class bears.
PERFORMANCE COMPARISON AS OF OCTOBER 31, 2003
AVERAGE ANNUAL RETURNS
1 YEAR SINCE INCEPTION
------------------------------
Class I shares (INCEPTION 12/4/00) .............. 11.09% (9.79)%
Russell 1000 Growth Index ....................... 21.81% (11.90)%
Lehman Gov't/Credit Bond Index .................. 6.18% 8.50%
- --------------------------------------------------------------------------------
Class R shares (INCEPTION 1/27/03) .............. * 14.77%
Russell 1000 Growth Index ....................... * 23.95%
Lehman Gov't/Credit Bond Index .................. * 3.79%
- --------------------------------------------------------------------------------
THE PORTFOLIO'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH AND TABLE ABOVE DO NOT
REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD HAVE PAID ON THE
REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND
THE PORTFOLIO'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
-24-
THE ALGER INSTITUTIONAL FUND
ALGER BALANCED INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2003
SHARES COMMON STOCKS--53.9% VALUE
--------- -------
BIOTECHNOLOGY--2.9%
130 Amgen Inc.* ........................................ $ 8,029
100 Chiron Corporation* ................................ 5,463
285 Genentech, Inc.* ................................... 23,361
100 Gilead Sciences, Inc.* ............................. 5,458
-----------
42,311
-----------
CAPITAL MARKETS--1.8%
80 Affiliated Managers Group, Inc.* ................... 5,800
350 Mellon Financial Corporation ....................... 10,455
250 T. Rowe Price Group Inc. ........................... 10,288
-----------
26,543
-----------
COMMUNICATION EQUIPMENT--3.5%
1,130 Cisco Systems, Inc.* ............................... 23,707
1,300 Corning Incorporated* .............................. 14,274
775 Nokia Oyj, ADR# .................................... 13,167
-----------
51,148
-----------
COMPUTERS & PERIPHERALS--2.9%
430 Dell Inc.* ......................................... 15,532
850 EMC Corporation* ................................... 11,764
400 Hewlett-Packard Company ............................ 8,924
300 Seagate Technology ................................. 6,894
-----------
43,114
-----------
CONSUMER FINANCE--1.4%
200 American Express Company ........................... 9,386
200 Capital One Financial Corporation .................. 12,160
-----------
21,546
-----------
DIVERSIFIED FINANCIAL SERVICES--1.0%
315 Citigroup Inc. ..................................... 14,931
-----------
ENERGY EQUIPMENT & SERVICES--.5%
225 BJ Services Company* ............................... 7,382
-----------
FOOD & STAPLES RETAILING--.7%
175 Wal-Mart Stores, Inc. .............................. 10,316
-----------
FREIGHT & LOGISTICS--.7%
150 United Parcel Service, Inc. Cl. B .................. 10,878
-----------
HEALTH CARE EQUIPMENT & SUPPLIES--3.1%
115 Alcon, Inc. ........................................ 6,338
210 Boston Scientific Corporation* ..................... 14,221
400 Medtronic, Inc. .................................... 18,228
100 Varian Medical Systems, Inc.* ...................... 6,394
-----------
45,181
-----------
HOTELS, RESTAURANTS & LEISURE--1.4%
100 Carnival Corporation ............................... 3,491
225 International Game Technology ...................... 7,369
300 Starwood Hotels & Resorts Worldwide, Inc. .......... 10,119
-----------
20,979
-----------
-25-
THE ALGER INSTITUTIONAL FUND
ALGER BALANCED INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- -------
INDUSTRIAL CONGLOMERATES--2.6%
500 General Electric Company ........................... $ 14,505
1,100 Tyco International Ltd. ............................ 22,968
-----------
37,473
-----------
INSURANCE--.8%
185 American International Group, Inc. ................. 11,254
-----------
INTERNET & CATALOG RETAIL--2.9%
250 Amazon.com, Inc.* .................................. 13,605
430 eBay Inc.* ......................................... 24,054
100 NetFlix Inc.* ...................................... 5,730
-----------
43,389
-----------
INTERNET SOFTWARE & SERVICES--1.6%
550 Yahoo! Inc.* ....................................... 24,035
-----------
MEDIA--2.7%
550 Disney (Walt) Company .............................. 12,452
400 Fox Entertainment Group, Inc. Cl. A* ............... 11,080
950 General Motors Corporation Cl. H* .................. 15,609
-----------
39,141
-----------
OIL & GAS--1.0%
300 Devon Energy Corporation ........................... 14,550
-----------
PHARMACEUTICALS--6.0%
175 Abbott Laboratories ................................ 7,458
200 Allergan, Inc. ..................................... 15,124
500 Bristol-Myers Squibb Company ....................... 12,685
480 Johnson & Johnson .................................. 24,158
200 Teva Pharmaceutical Industries Ltd. ADR# ........... 11,378
150 Watson Pharmaceuticals Inc.* ....................... 5,891
250 Wyeth .............................................. 11,035
-----------
87,729
-----------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT--6.4%
400 Analog Devices, Inc.* .............................. 17,732
300 Applied Materials, Inc.* ........................... 7,011
750 Intel Corporation .................................. 24,787
600 Teradyne, Inc.* .................................... 13,668
600 Texas Instruments Incorporated ..................... 17,352
400 Xilinx, Inc.* ...................................... 12,680
-----------
93,230
-----------
SOFTWARE--4.7%
1,200 Microsoft Corporation .............................. 31,380
600 PeopleSoft, Inc.* .................................. 12,456
490 Synopsys, Inc.* .................................... 15,543
250 VERITAS Software Corporation* ...................... 9,037
-----------
68,416
-----------
-26-
THE ALGER INSTITUTIONAL FUND
ALGER BALANCED INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- -------
SPECIALTY RETAIL--4.3%
300 Best Buy Co., Inc.* ................................ $ 17,493
500 Home Depot, Inc. ................................... 18,535
900 The Gap, Inc. ...................................... 17,172
450 TJX Companies, Inc. ................................ 9,446
-----------
62,646
-----------
WIRELESS TELECOMMUNICATION SERVICES--1.0%
250 Nextel Communications, Inc. Cl. A* ................. 6,050
400 Vodafone Group PLC Sponsored ADR# .................. 8,460
-----------
14,510
-----------
Total Common Stocks
(Cost $677,121) .................................. 790,702
-----------
PRINCIPAL
AMOUNT CORPORATE BONDS--5.8%
---------
AEROSPACE & DEFENSE--.4%
$ 5,000 United Technologies, 4.875%, 11/1/06 ............... 5,313
-----------
AUTO EQUIPMENT & SERVICES--.3%
4,000 Hertz Corp., 4.70%, 10/2/06 ........................ 3,954
-----------
AUTOMOTIVE--.9%
4,000 Ford Motor Credit Company, 6.875%, 2/1/06 .......... 4,189
4,000 General Motors Acceptance Corp., 4.50%, 7/15/06 .... 4,063
5,000 General Motors Acceptance Corp., 8.00%, 11/1/31 .... 5,157
-----------
13,409
-----------
CAPITAL MARKETS--.2%
3,000 J.P. Morgan Chase & Co., 3.625%, 5/1/08 ............ 2,999
-----------
COMMERCIAL BANKS--.2%
3,000 Bank One Corp., 2.625%, 6/30/08 .................... 2,865
-----------
COMPUTERS & PERIPHERALS--.4%
4,000 International Business Machines
Corporation, 8.38%, 11/1/19 ...................... 5,220
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES--.9%
3,000 Bell South Capital Funding Corp., 7.875%, 2/15/30 .. 3,618
3,000 Sprint Capital Corp., 6.00%, 1/15/07 ............... 3,182
6,000 Verizon New York Inc., Series A, 6.875%, 4/1/12 .... 6,595
-----------
13,395
-----------
FOOD CHAIN--.2%
3,000 Fred Meyer Inc., Senior Note, 7.45%, due 3/1/08 .... 3,414
-----------
FOOD PRODUCTS--.3%
3,000 Kraft Foods Inc., 6.25%, 6/1/12 .................... 3,238
-----------
INDUSTRIAL CONGLOMERATES--1.0%
16,000 General Electric Company, 5.00%, 2/1/13 ............ 16,131
-----------
INSURANCE--.3%
4,000 GE Global Insurance, 7.75%, 6/15/30 ................ 4,637
-----------
-27-
THE ALGER INSTITUTIONAL FUND
ALGER BALANCED INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2003
PRINCIPAL
AMOUNT CORPORATE BONDS (CONTINUED) VALUE
--------- -------
MEDIA--.7%
$ 5,000 Cox Enterprises, Inc., 4.375%, 5/1/08(a) ........... $ 5,061
5,000 Liberty Media Corporation Floating Rate Note,
2.64%, 9/17/06 ................................... 4,984
-----------
10,045
-----------
Total Corporate Bonds
(Cost $86,894) ................................... 84,620
-----------
U.S. GOVERNMENT & AGENCY OBLIGATIONS--34.8%
Federal National Mortgage Association,
18,000 1.875%, 9/15/05 .................................... 17,974
7,000 3.25%, 8/15/08 ..................................... 6,922
7,000 4.625%, 10/15/13 ................................... 6,916
U.S. Treasury Bonds,
13,000 7.25%, 5/15/16 ..................................... 16,114
6,000 6.25%, 8/15/23 ..................................... 6,773
103,000 5.375%, 2/15/31 .................................... 106,472
U.S. Treasury Notes,
100,000 2.125%, 10/31/04 ................................... 100,891
37,000 3.50%, 11/15/06 .................................... 38,200
97,000 3.25%, 8/15/07 ..................................... 98,701
62,000 2.625%, 5/15/08 .................................... 60,796
10,000 3.125%, 9/15/08 .................................... 9,958
40,000 4.375%, 8/15/12 .................................... 40,618
-----------
Total U.S. Government & Agency Obligations
(Cost $519,200) .................................. 510,335
-----------
Total Investments
(Cost $1,283,215)(b) .................................. 94.5% 1,385,657
Other assets in Excess of liabilities ................... 5.5 81,020
----- -----------
Total Net Assets ........................................ 100.0% $ 1,466,677
===== ===========
- -----------
* Non-income producing security.
# American Depositary Receipts.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity only to qualified institutional buyers.
(b) At October 31, 2003, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $1,291,585, amounted to $94,072
which consisted of aggregate gross unrealized appreciation of $117,264 and
aggregate gross unrealized depreciation of $23,192.
See Notes to Financial Statements.
-28-
ALGER SOCIALLY RESPONSIBLE GROWTH INSTITUTIONAL PORTFOLIO
PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 2003 (UNAUDITED)
$10,000 HYPOTHETICAL INVESTMENT SINCE INCEPTION DECEMBER 4, 2000
[Data below represents a line chart in the original document.]
Alger Socially
Responsible
Growth Russell 3000
Institutional I Growth Index
--------------- ------------
12/4/00 $10000 $10000
10/31/01 6370 7305
10/31/02 4430 5863
10/31/03 5380 7232
The chart above illustrates the change in value of a hypothetical $10,000
investment made in the Alger Socially Responsible Growth Institutional Class
I shares and the Russell 3000 Growth Index on December 4, 2000, the inception
date of the Alger Socially Responsible Growth Institutional Class I shares,
through October 31, 2003. Figures for the Alger Socially Responsible Growth
Institutional Class I shares and the Russell 3000 Growth Index (an unmanaged
index of common stocks) include reinvestment of dividends. Performance for
the Alger Socially Responsible Growth Institutional Class R shares may vary
from the results shown above due to differences in expenses the class bears.
PERFORMANCE COMPARISON AS OF OCTOBER 31, 2003
AVERAGE ANNUAL RETURNS
1 YEAR SINCE INCEPTION
-----------------------------
Class I (INCEPTION 12/4/00) ...................... 21.44% (19.19)%
Russell 3000 Growth Index ........................ 23.34% (10.55)%
- --------------------------------------------------------------------------------
Class R (INCEPTION 1/27/03) ...................... * 30.02%
Russell 3000 Growth Index ........................ * 27.98%
- --------------------------------------------------------------------------------
THE PORTFOLIO'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH AND TABLE ABOVE DO NOT
REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD HAVE PAID ON THE
REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND
THE PORTFOLIO'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
-29-
THE ALGER INSTITUTIONAL FUND
ALGER SOCIALLY RESPONSIBLE GROWTH INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2003
SHARES COMMON STOCKS--98.5% VALUE
--------- -------
BIOTECHNOLOGY--7.7%
250 Amgen Inc.* ........................................ $ 15,439
500 Genentech, Inc.* ................................... 40,985
250 Gilead Sciences, Inc.* ............................. 13,645
150 Invitrogen Corporation* ............................ 9,539
800 Millennium Pharmaceuticals, Inc.* .................. 12,736
700 QLT Inc.* .......................................... 10,815
-----------
103,159
-----------
CAPITAL MARKETS--1.6%
700 Bank of New York Company, Inc. (The) ............... 21,833
-----------
COMMERCIAL BANKS--1.0%
500 U.S. Bancorp ....................................... 13,610
-----------
COMMERCIAL SERVICES & SUPPLIES--1.5%
150 Apollo Group, Inc. Cl. A* .......................... 9,530
400 Monster Worldwide Inc.* ............................ 10,188
-----------
19,718
-----------
COMMUNICATION EQUIPMENT--10.0%
1,500 Advanced Fibre Communications, Inc.* ............... 36,105
3,300 CIENA Corporation* ................................. 21,153
1,300 Cisco Systems, Inc.* ............................... 27,273
1,250 Comverse Technology, Inc.* ......................... 22,550
2,500 Corning Incorporated* .............................. 27,450
-----------
134,531
-----------
COMPUTERS & PERIPHERALS--2.1%
1,500 EMC Corporation* ................................... 20,760
100 SanDisk Corporation* ............................... 8,060
-----------
28,820
-----------
CONSUMER FINANCE--1.8%
400 Capital One Financial Corporation .................. 24,320
-----------
DIVERSIFIED FINANCIAL SERVICES--2.6%
750 Citigroup Inc. ..................................... 35,550
-----------
ENERGY EQUIPMENT & SERVICES--1.2%
650 Halliburton Company ................................ 15,522
-----------
HEALTH CARE EQUIPMENT & SUPPLIES--6.0%
600 Boston Scientific Corporation* ..................... 40,632
450 Medtronic, Inc. .................................... 20,507
100 Varian Medical Systems, Inc.* ...................... 6,394
200 Zimmer Holdings, Inc.* ............................. 12,762
-----------
80,295
-----------
HEALTH CARE PROVIDERS & SERVICES--3.1%
650 Health Management Associates, Inc. Cl. A ........... 14,398
400 Medco Health Solutions, Inc.* ...................... 13,280
200 Quest Diagnostics Incorporated* .................... 13,530
-----------
41,208
-----------
-30-
THE ALGER INSTITUTIONAL FUND
ALGER SOCIALLY RESPONSIBLE GROWTH INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- -------
INDUSTRIAL CONGLOMERATES--1.9%
900 General Electric Company ........................... $ 26,109
-----------
INFORMATION TECHNOLOGY SERVICES--1.2%
400 Paychex, Inc. ...................................... 15,568
-----------
INSURANCE--1.5%
325 American International Group, Inc. ................. 19,770
-----------
INTERNET & CATALOG RETAIL--5.1%
800 eBay Inc.* ......................................... 44,752
650 InterActiveCorp* ................................... 23,862
-----------
68,614
-----------
INTERNET SOFTWARE & SERVICES--5.6%
700 United Online, Inc.* ............................... 20,152
1,250 Yahoo! Inc.* ....................................... 54,625
-----------
74,777
-----------
MEDIA--5.9%
1,300 Disney (Walt) Company .............................. 29,432
950 General Motors Corporation Cl. H* .................. 15,608
2,200 Time Warner Inc.* .................................. 33,638
-----------
78,678
-----------
PHARMACEUTICALS--5.5%
200 Allergan, Inc. ..................................... 15,124
650 Mylan Laboratories Inc. ............................ 15,698
650 Pfizer Inc. ........................................ 20,540
400 Teva Pharmaceutical Industries Ltd. ADR# ........... 22,756
-----------
74,118
-----------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT--15.3%
900 Applied Materials, Inc.* ........................... 21,033
1,250 Broadcom Corporation Cl. A* ........................ 39,938
700 Intel Corporation .................................. 23,135
850 Intersil Corporation Cl. A ......................... 21,921
700 Kulicke & Soffa Industries Inc.* ................... 10,276
1,950 Micron Technology, Inc.* ........................... 27,962
550 National Semiconductor Corporation* ................ 22,347
350 Novellus Systems, Inc.* ............................ 14,452
850 Texas Instruments Incorporated ..................... 24,582
-----------
205,646
-----------
SOFTWARE--9.2%
1,100 BEA Systems, Inc.* ................................. 15,290
100 Electronic Arts Inc.* .............................. 9,904
1,250 Microsoft Corporation .............................. 32,688
1,100 Oracle Corporation* ................................ 13,156
1,950 PeopleSoft, Inc.* .................................. 40,481
350 VERITAS Software Corporation* ...................... 12,653
-----------
124,172
-----------
-31-
THE ALGER INSTITUTIONAL FUND
ALGER SOCIALLY RESPONSIBLE GROWTH INSTITUTIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
October 31, 2003
SHARES COMMON STOCKS (CONTINUED) VALUE
--------- -------
SPECIALTY RETAIL--6.5%
1,200 Circuit City Stores, Inc. .......................... $ 11,448
900 Home Depot, Inc. ................................... 33,363
925 Pacific Sunwear of California, Inc.* ............... 21,359
1,100 The Gap, Inc. ...................................... 20,988
-----------
87,158
-----------
WIRELESS TELECOMMUNICATION SERVICES--2.2%
900 Nextel Communications, Inc. Cl. A* ................. 21,780
200 SpectraSite, Inc.* ................................. 7,750
-----------
29,530
-----------
Total Common Stocks
(Cost $1,159,433) ................................ 1,322,706
-----------
Total Investments
(Cost $1,159,433)(a) .................................. 98.5% 1,322,706
Other Assets in Excess of Liabilities ................... 1.5 20,583
----- -----------
Net Assets .............................................. 100.0% $ 1,343,289
===== ===========
- -----------
* Non-income producing security.
# American Depositary Receipts.
(a) At October 31, 2003, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $1,159,433, amounted to 163,273
which consisted of aggregate gross unrealized appreciation of $175,461 and
aggregate gross unrealized depreciation of $12,188.
See Notes to Financial Statements.
-32-
ALGER INSTITUTIONAL FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING
THROUGHOUT THE PERIOD
Income from
Investment Operations
------------------------
Net
Realized
and Net
Net Asset Net Unrealized Total Distributions Asset
Value, Investment Gain from from Value,
Beginning Income (Loss) on Investment Net Realized End of
of Period (Loss) Investments Operations Gains Period
---------- ---------- ----------- ---------- ------------- ------
ALGER LARGECAP GROWTH INSTITUTIONAL PORTFOLIO (i)
CLASS I
Year ended 10/31/03 ................ $ 8.70 $(0.03)(iii) $ 2.04 $ 2.01 $ -- $10.71
Year ended 10/31/02 ................ 11.63 (0.03)(iii) (2.90) (2.93) -- 8.70
Year ended 10/31/01 ................ 17.15 (0.03)(iii) (4.50) (4.53) (0.99) 11.63
Year ended 10/31/00 ................ 17.17 (0.03)(iii) 1.92 1.89 (1.91) 17.15
Year ended 10/31/99 ................ 12.37 (0.05) 5.23 5.18 (0.38) 17.17
CLASS R
From 1/27/03 to 10/31/03(ii)(iv) ... $ 8.12 $(0.06)(iii) $ 2.60 $ 2.54 -- $10.66
ALGER SMALL CAP INSTITUTIONAL PORTFOLIO
CLASS I
Year ended 10/31/03 ................ $10.97 $(0.12)(iii) $ 4.25 $ 4.13 $ -- $15.10
Year ended 10/31/02 ................ 13.35 (0.13)(iii) (2.25) (2.38) -- 10.97
Year ended 10/31/01 ................ 23.78 (0.08)(iii) (10.35) (10.43) -- 13.35
Year ended 10/31/00 ................ 22.82 (0.06)(iii) 2.50 2.44 (1.48) 23.78
Year ended 10/31/99 ................ 16.37 (0.12)(iii) 8.65 8.53 (2.08) 22.82
CLASS R
From 1/27/03 to 10/31/03(ii)(iv) ... $10.72 $(0.14)(iii) $ 4.47 $ 4.33 -- $15.05
ALGER MIDCAP GROWTH INSTITUTIONAL PORTFOLIO
CLASS I
Year ended 10/31/03 ................ $10.76 $(0.11)(iii) $ 4.13 $ 4.02 $ -- $14.78
Year ended 10/31/02 ................ 13.34 (0.10)(iii) (2.48) (2.58) -- 10.76
Year ended 10/31/01 ................ 17.53 (0.08)(iii) (3.44) (3.52) (0.67) 13.34
Year ended 10/31/00 ................ 11.80 (0.04)(iii) 6.07 6.03 (0.30) 17.53
Year ended 10/31/99 ................ 8.83 (0.05)(iii) 3.78 3.73 (0.76) 11.80
CLASS R
From 1/27/03 to 10/31/03(ii)(iv) ... $10.25 $(0.14)(iii) $ 4.62 $ 4.48 -- $14.73
- -----------
(i) Prior to March 1, 2002, the Alger LargeCap Growth Institutional Portfolio
was the Alger Growth Retirement Portfolio.
(ii) Commenced operations January 27, 2003.
(iii) Amount was computed based on average shares outstanding during the period.
(iv) Ratios have been annualized; total return has not been annualized.
See Notes to Financial Statements.
-33-
Ratios/Supplemental Data
---------------------------------------------
Ratio of
Net Ratio of Net
Assets, Expenses Investment
End of to Income
Period Average (Loss) to Portfolio
Total (000's Net Average Turnover
Return omitted) Assets Net Assets Rate
------ -------- -------- ---------- ---------
23.1% $ 91,588 1.14% (0.31)% 255.49%
(25.2) 108,660 1.14 (0.24) 202.07
(27.5) 97,308 1.09 (0.20) 89.54
10.3 126,573 1.06 (0.16) 101.29
42.0 72,746 1.07 (0.39) 143.80
31.3% $ 133 1.62% (0.84)% 255.49%
37.7% $ 93,300 1.24% (0.99)% 139.97%
(17.8) 62,780 1.25 (1.01) 138.01
(43.9) 86,790 1.19 (0.46) 191.89
10.1 187,973 1.17 (0.23) 242.45
52.7 63,711 1.02 (0.57) 193.32
40.4% $ 70 1.74% (1.49)% 139.97%
37.4% $540,742 1.17% (0.89)% 217.33%
(19.3) 215,727 1.17 (0.81) 284.69
(20.6) 217,153 1.13 (0.51) 130.93
51.3 177,566 1.12 (0.24) 113.14
42.4 28,233 1.23 (0.49) 165.68
43.7% $ 790 1.66% (1.40)% 217.33%
-34-
ALGER INSTITUTIONAL FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING
THROUGHOUT THE PERIOD
Income from
Investment Operations
------------------------
Net
Realized
and Net
Net Asset Net Unrealized Total Distributions Asset
Value, Investment Gain from from Value,
Beginning Income (Loss) on Investment Net Realized End of
of Period (Loss) Investments Operations Gains Period
---------- ---------- ----------- ---------- ------------- ------
ALGER CAPITAL APPRECIATION INSTITUTIONAL PORTFOLIO
CLASS I
Year ended 10/31/03 ................ $ 8.97 $(0.06)(iii) $ 2.15 $ 2.09 $ -- $11.06
Year ended 10/31/02 ................ 11.66 (0.08)(iii) (2.61) (2.69) -- 8.97
Year ended 10/31/01 ................ 18.12 (0.03)(iii) (6.37) (6.40) (0.06) 11.66
Year ended 10/31/00 ................ 16.19 (0.09)(iii) 2.24 2.15 (0.22) 18.12
Year ended 10/31/99 ................ 8.98 (0.09)(iii) 7.63 7.54 (0.33) 16.19
CLASS R
From 1/27/03 to 10/31/03(ii)(iv) ... $ 8.36 $(0.08)(iii) $ 2.73 $ 2.65 -- $11.01
ALGER BALANCED INSTITUTIONAL PORTFOLIO
CLASS I
Year ended 10/31/03 ................ $ 6.67 $(0.01)(iii) $ 0.75 $ 0.74 -- $ 7.41
Year ended 10/31/02 ................ 8.20 (0.39)(iii) (1.14) (1.53) -- 6.67
From 12/4/00 to 10/31/01(i)(iv) .... 10.00 (0.11)(iii) (1.69) (1.80) -- 8.20
CLASS R
From 1/27/03 to 10/31/03(ii)(iv) ... $ 6.43 $(0.04)(iii) $ 0.99 $ 0.95 -- $ 7.38
ALGER SOCIALLY RESPONSIBLE GROWTH INSTITUTIONAL PORTFOLIO
CLASS I
Year ended 10/31/03 ................ $ 4.43 $(0.09)(iii) $ 1.04 $ 0.95 -- $ 5.38
Year ended 10/31/02 ................ 6.37 (0.77)(iii) (1.17) (1.94) -- 4.43
From 12/4/00 to 10/31/01(i)(iv) .... 10.00 (0.30)(iii) (3.33) (3.63) -- 6.37
CLASS R
From 1/27/03 to 10/31/03(ii)(iv) ... $ 4.13 $(0.08)(iii) $ 1.32 $ 1.24 -- $ 5.37
- -----------
(i) Commenced operations December 4, 2000.
(ii) Commenced operations January 27, 2003.
(iii) Amount was computed based on average shares outstanding during the period.
(iv) Ratios have been annualized; total return has not been annualized.
See Notes to Financial Statements.
-35-
Ratios/Supplemental Data
---------------------------------------------
Ratio of
Net Ratio of Net
Assets, Expenses Investment
End of to Income
Period Average (Loss) to Portfolio
Total (000's Net Average Turnover
Return omitted) Assets Net Assets Rate
------ -------- -------- ---------- ---------
23.3% $160,569 1.23% (0.59)% 187.72%
(23.1) 132,010 1.23 (0.73) 180.39
(35.4) 187,187 1.18 (0.21) 104.17
13.1 279,916 1.14 (0.43) 144.16
84.3 96,711 1.29 (0.59) 155.40
31.7% $ 66 1.72% (1.01)% 187.72%
11.1% $ 1,409 2.00% (0.15)% 149.42%
(18.7) 225 6.72 (5.21) 321.89
(18.0) 108 3.13 (1.44) 15.99
14.8% $ 58 2.56% (0.74)% 149.42%
21.4% $ 1,277 2.26% (1.69)% 187.82%
(30.5) 46 13.48 (13.17) 205.83
(36.3) 77 5.31 (4.75) 114.33
30.0% $ 66 2.92% (2.29)% 187.82%
-36-
THE ALGER INSTITUTIONAL FUND
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 2003
LargeCap
Growth Small Cap
Portfolio Portfolio
------------- -------------
ASSETS:
Investments in securities, at value (identified cost*)--
see accompanying schedules of investments ............ $ 94,122,825 $ 94,763,489
Cash ................................................... 3,397 26,591
Receivable for investment securities sold .............. 834,391 1,899,704
Receivable for shares of beneficial interest sold ...... 117,821 306,579
Dividends and interest receivable ...................... 67,585 4,289
Prepaid expenses ....................................... 4,030 5,606
------------- -------------
Total Assets ......................................... 95,150,049 97,006,258
------------- -------------
LIABILITIES:
Payable for securities loaned .......................... 1,889,400 --
Payable for investment securities purchased ............ -- 2,552,907
Payable for shares of beneficial interest redeemed ..... 1,434,501 979,751
Accrued investment management fees ..................... 59,933 66,361
Accrued transfer agent fees ............................ 3,996 3,904
Accrued expenses ....................................... 41,168 33,424
------------- -------------
Total Liabilities .................................... 3,428,998 3,636,347
------------- -------------
NET ASSETS ............................................. $ 91,721,051 $ 93,369,911
============= =============
Net Assets Consist of:
Paid-in capital ...................................... $ 126,432,153 $ 170,023,722
Accumulated net investment income (loss) ............. -- --
Undistributed net realized gain (accumulated loss) ... (47,572,931) (94,421,933)
Net unrealized appreciation (depreciation) ........... 12,861,829 17,768,122
------------- -------------
NET ASSETS ............................................. $ 91,721,051 $ 93,369,911
============= =============
Shares of beneficial interest outstanding--Note 6
Class I .............................................. 8,554,611 6,177,773
============= =============
Class R .............................................. 12,457 4,664
============= =============
Net Asset Value Per Share
Class I .............................................. $ 10.71 $ 15.10
============= =============
Class R .............................................. $ 10.66 $ 15.05
============= =============
*Identified cost ....................................... $ 81,260,996 $ 76,995,367
============= =============
See Notes to Financial Statements.
-37-
Socially
MidCap Capital Responsible
Growth Appreciation Balanced Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- ------------- -------------
$ 529,214,016 $ 171,032,515 $ 1,385,657 $ 1,322,706
435,815 31,818 67,429 35,300
12,402,709 8,315,365 6,565 71,309
2,439,307 89,011 3,308 279
-- 109,610 6,248 940
26,847 6,891 355 587
------------- ------------- ------------- -------------
544,518,694 179,585,210 1,469,562 1,431,121
------------- ------------- ------------- -------------
-- 8,718,950 -- --
1,112,251 10,036,030 -- 84,757
1,298,503 11,440 -- --
347,951 116,014 924 846
21,747 6,824 62 56
206,120 61,113 1,899 2,173
------------- ------------- ------------- -------------
2,986,572 18,950,371 2,885 87,832
------------- ------------- ------------- -------------
$ 541,532,122 $ 160,634,839 $ 1,466,677 $ 1,343,289
============= ============= ============= =============
$ 507,276,723 $ 273,986,956 $ 1,381,322 $ 1,173,597
-- -- (1,758) --
(29,324,821) (133,840,897) (15,329) 6,419
63,580,220 20,488,780 102,442 163,273
------------- ------------- ------------- -------------
$ 541,532,122 $ 160,634,839 $ 1,466,677 $ 1,343,289
============= ============= ============= =============
36,575,429 14,522,712 190,153 237,596
============= ============= ============= =============
53,652 5,981 7,776 12,335
============= ============= ============= =============
$ 14.78 $ 11.06 $ 7.41 $ 5.38
============= ============= ============= =============
$ 14.73 $ 11.01 $ 7.38 $ 5.37
============= ============= ============= =============
$ 465,633,796 $ 150,543,735 $ 1,283,215 $ 1,159,433
============= ============= ============= =============
-38-
THE ALGER INSTITUTIONAL FUND
STATEMENTS OF OPERATIONS
For the year ended October 31, 2003
LargeCap
Growth Small Cap
Portfolio Portfolio
------------- -------------
INVESTMENT INCOME
Income:
Dividends .............................. $ 649,407 $ 124,455
Interest ............................... 46,902 58,217
------------- -------------
Total income .......................... 696,309 182,672
------------- -------------
Expenses:
Management fees--Note 3(a) ............. 627,529 612,415
Shareholder servicing fees ............. 209,176 180,122
Custodian fees ......................... 29,895 25,882
Transfer agent fees--Note 3(d) ......... 41,835 36,024
Trustees' fees ......................... 4,391 3,697
Miscellaneous .......................... 44,492 35,224
------------- -------------
Total Expenses ....................... 957,318 893,364
------------- -------------
NET INVESTMENT INCOME (LOSS) ............. (261,009) (710,692)
------------- -------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain on investments ....... 1,152,603 6,987,791
Net change in unrealized appreciation
(depreciation) on investments ........ 15,611,686 18,406,668
------------- -------------
Net realized and unrealized gain
on investments ....................... 16,764,289 25,394,459
------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ...................... $ 16,503,280 $ 24,683,767
============= =============
See Notes to Financial Statements.
-39-
Socially
MidCap Capital Responsible
Growth Appreciation Balanced Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- ------------- -------------
$ 530,355 $ 786,294 $ 5,091 $ 6,324
394,487 95,797 19,203 154
------------- ------------- ------------- -------------
924,842 882,091 24,294 6,478
------------- ------------- ------------- -------------
2,570,337 1,171,206 9,814 8,461
803,230 344,472 -- --
59,172 35,599 9,846 11,064
160,646 68,895 654 564
15,834 7,127 68 58
160,985 65,523 6,058 5,663
------------- ------------- ------------- -------------
3,770,204 1,692,822 26,440 25,810
------------- ------------- ------------- -------------
(2,845,362) (810,731) (2,146) (19,332)
------------- ------------- ------------- -------------
56,150,560 6,960,195 38,966 71,228
62,853,285 24,157,024 99,718 164,707
------------- ------------- ------------- -------------
119,003,845 31,117,219 138,684 235,935
------------- ------------- ------------- -------------
$ 116,158,483 $ 30,306,488 $ 136,538 $ 216,603
============= ============= ============= =============
-40-
THE ALGER INSTITUTIONAL FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the year ended October 31, 2003
LargeCap
Growth Small Cap
Portfolio Portfolio
------------- -------------
Net investment income (loss) .................... $ (261,009) $ (710,692)
Net realized gain on investments ................ 1,152,603 6,987,791
Net change in unrealized appreciation
(depreciation) on investments ................. 15,611,686 18,406,668
------------- -------------
Net increase in net assets resulting
from operations ............................... 16,503,280 24,683,767
Increase (decrease) from shares
of beneficial interest transactions:
Class I ....................................... (33,554,980) 5,856,223
Class R ....................................... 113,202 50,000
------------- -------------
Net increase (decrease) from shares
of beneficial interest transactions--Note 6 ... (33,441,778) 5,906,223
------------- -------------
Total increase (decrease) ................... (16,938,498) 30,589,990
Net Assets:
Beginning of year ............................. 108,659,549 62,779,921
------------- -------------
End of year ................................... $ 91,721,051 $ 93,369,911
============= =============
Accumulated net investment loss ................. $ -- $ --
============= =============
THE ALGER INSTITUTIONAL FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the year ended October 31, 2002
LargeCap
Growth Small Cap
Portfolio(i) Portfolio
------------- -------------
Net investment income (loss) .................... $ (229,136) $ (773,111)
Net realized loss on investments ................ (27,697,261) (12,084,103)
Net change in unrealized appreciation
(depreciation) on investments ................. 1,175,696 240,343
------------- -------------
Net decrease in net assets
resulting from operations ..................... (26,750,701) (12,616,871)
Net increase (decrease) from shares
of beneficial interest
transactions--Note 6 .......................... 38,102,406 (11,393,196)
------------- -------------
Total increase (decrease) ................... 11,351,705 (24,010,067)
Net Assets:
Beginning of year ............................. 97,307,844 86,789,988
------------- -------------
End of year ................................... $ 108,659,549 $ 62,779,921
============= =============
Accumulated net investment loss ................. $ -- $ --
============= =============
- ---------------
(i) Prior to March 1, 2002, the Alger LargeCap Growth Institutional Portfolio
was the Alger Growth Retirement Portfolio.
See Notes to Financial Statements.
-41-
Socially
MidCap Capital Responsible
Growth Appreciation Balanced Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- ------------- -------------
$ (2,845,362) $ (810,731) $ (2,146) $ (19,332)
56,150,560 6,960,195 38,966 71,228
62,853,285 24,157,024 99,718 164,707
------------- ------------- ------------- -------------
116,158,483 30,306,488 136,538 216,603
208,938,090 (1,731,344) 1,055,634 1,029,125
708,160 50,000 50,000 51,231
------------- ------------- ------------- -------------
209,646,250 (1,681,344) 1,105,634 1,080,356
------------- ------------- ------------- -------------
325,804,733 28,625,144 1,242,172 1,296,959
215,727,389 132,009,695 224,505 46,330
------------- ------------- ------------- -------------
$ 541,532,122 $ 160,634,839 $ 1,466,677 $ 1,343,289
============= ============= ============= =============
$ -- $ -- $ (1,758) $ --
============= ============= ============= =============
Socially
MidCap Capital Responsible
Growth Appreciation Balanced Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- ------------- -------------
$ (1,934,588) $ (1,249,372) $ (9,207) $ (8,132)
(55,077,406) (47,548,125) (43,449) (17,379)
4,572,841 7,506,733 11,714 5,649
------------- ------------- ------------- -------------
(52,439,153) (41,290,764) (40,942) (19,862)
51,013,257 (13,886,073) 157,906 (11,288)
------------- ------------- ------------- -------------
(1,425,896) (55,176,837) 116,964 (31,150)
217,153,285 187,186,532 107,541 77,480
------------- ------------- ------------- -------------
$ 215,727,389 $ 132,009,695 $ 224,505 $ 46,330
============= ============= ============= =============
$ -- $ -- $ -- $ --
============= ============= ============= =============
-42-
THE ALGER INSTITUTIONAL FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1--GENERAL:
The Alger Institutional Fund (the "Fund"), which was The Alger Retirement
Fund prior to March 1, 2002, is a diversified, open-end registered investment
company organized as a business trust under the laws of the Commonwealth of
Massachusetts. The Fund operates as a series company and currently issues an
unlimited number of shares of beneficial interest in six portfolios--LargeCap
Growth Portfolio, Small Cap Portfolio, MidCap Growth Portfolio, Capital
Appreciation Portfolio, Balanced Portfolio and Socially Responsible Growth
Portfolio (the "Portfolios"). Prior to March 1, 2002, the LargeCap Growth
Portfolio was the Growth Portfolio. The LargeCap Growth Portfolio, Small Cap
Portfolio, MidCap Growth Portfolio, Capital Appreciation Portfolio and Socially
Responsible Growth Portfolio normally invest primarily in equity securities and
each has an investment objective of long-term capital appreciation. The Balanced
Portfolio's investment objectives are current income and long-term capital
appreciation which it seeks to achieve through investing in equity and fixed
income securities.
Each Portfolio offers Class I and Class R shares. Class R shares were
first offered January 27, 2003. Each class has identical rights to assets and
earnings except that only Class R shares have a plan of distribution and bear
the related expenses.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:
(a) INVESTMENT VALUATION: Investments of the Portfolios are valued on each day
the New York Stock Exchange (the "NYSE") is open as of the close of the NYSE
(currently 4:00 p.m. Eastern time). Listed and unlisted securities for which
such information is regularly reported are valued at the last reported sales
price or, in the absence of reported sales, at the mean between the bid and
asked price or, in the absence of a recent bid or asked price, the equivalent as
obtained from one or more of the major market makers for the securities to be
valued.
Securities for which market quotations are not readily available are
valued at fair value, as determined in good faith pursuant to procedures
established by the Board of Trustees.
Short-term securities having a remaining maturity of sixty days or less
are valued at amortized cost which approximates market value. Shares of mutual
funds are valued at the net asset value of the underlying mutual fund.
(b) 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.
-43-
THE ALGER INSTITUTIONAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(c) REPURCHASE AGREEMENTS: The Portfolios enter into repurchase agreements with
approved institutions. The repurchase agreements are collateralized by U.S.
Government securities, which are either received and held in physical possession
by the custodian or received by such custodian in book-entry form through the
Federal Reserve book-entry system. The collateral is valued on a daily basis
during the term of the agreement to ensure that its value equals or exceeds the
agreed-upon repurchase price to be repaid to the Portfolio. Additional
collateral is obtained when necessary.
(d) LENDING OF PORTFOLIO SECURITIES: The Portfolios lend their securities to
financial institutions, provided that the market value of the securities loaned
will not at any time exceed one third of the Portfolio's total assets, as
defined. The Portfolios 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, letters of credit or U.S. Government securities that are
maintained in an amount equal to at least 100 percent of the current market
value of the loaned securities. The market value of the loaned securities is
determined at the close of business of the Portfolios and any required
additional collateral is delivered to the Portfolios on the next business day.
At October 31, 2003, the value of securities loaned and collateral received
thereon were as follows:
VALUE OF
SECURITIES VALUE OF
LOANED COLLATERAL
----------- -----------
LargeCap Growth Portfolio ..................... $ 1,824,592 $ 1,889,400
Small Cap Portfolio ........................... 1,014,630 1,039,632
MidCap Growth Portfolio ....................... 29,337,070 32,936,718
Capital Appreciation
Portfolio ................................... 8,485,430 8,718,950
Balanced Portfolio ............................ -- --
Socially Responsible
Growth Portfolio ............................ -- --
(e) DIVIDENDS TO SHAREHOLDERS: Dividends payable to shareholders are recorded on
the ex-dividend date. With respect to all Portfolios, dividends from net
investment income and distributions from net realized gains, offset by any loss
carry forward, 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
of net investment income and capital gains 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 the Portfolios' distributions may be shown in the
accompanying financial statements as either from, or in excess of net invest-
-44-
THE ALGER INSTITUTIONAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ment income, net realized gain on investment transactions or paid-in capital,
depending on the type of book/tax differences that may exist.
At October 31, 2003, the LargeCap Growth Portfolio, the Small Cap
Portfolio, the MidCap Growth Portfolio, the Capital Appreciation Portfolio, the
Balanced Portfolio and the Socially Responsible Growth Portfolio reclassified
$261,009, $710,692, $2,845,362, $810,731, $388 and $19,332, respectively, from
undistributed net investment income (accumulated loss) and $0, $0, $0, $0, $392
and $19,332, respectively, from undistributed net realized gain (accumulated
loss) to paid-in capital. Reclassifications result primarily from the difference
in tax treatment of net operating losses. The reclassifications had no impact on
the net asset values of the Portfolios and are designed to present the
Portfolios' capital accounts on a tax basis.
(f) FEDERAL INCOME TAXES: It is each Portfolio's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its investment company taxable income to its
shareholders. Provided a Portfolio maintains such compliance, no federal income
tax provision is required. Each Portfolio is treated as a separate entity for
the purpose of determining such compliance. At October 31, 2003, the net capital
loss carryforwards of the LargeCap Growth Portfolio, the Small Cap Portfolio,
the MidCap Growth Portfolio, the Capital Appreciation Portfolio, the Balanced
Portfolio and the Socially Responsible Growth Portfolio which may be used to
offset future net realized gains were approximately $46,816,979, $94,026,601,
$27,943,965, $133,629,281, $8,862 and $0, respectively, and expire 2008 through
2010.
(g) ALLOCATION METHODS: The Fund accounts separately for the assets, liabilities
and operations of each Portfolio. Expenses directly attributable to each
Portfolio are charged to that Portfolio's operations; expenses which are
applicable to all Portfolios are allocated among them based on net assets.
Income, realized and unrealized gains and losses, and expenses of each
Portfolio, are allocated among the Portfolio's classes based on relative net
assets, with the exception of distribution fees, which are only applicable to
Class R shares.
(h) OTHER: These financial statements have been prepared using estimates and
assumptions that affect the reported amounts therein. Actual results may differ
from those estimates.
NOTE 3--INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
(a) INVESTMENT MANAGEMENT FEES: Fees incurred by each Portfolio, pursuant to the
provisions of its Investment Management Agreement with Fred Alger Management,
Inc. ("Alger Management"), are payable monthly and are computed based on the
value of the average daily net assets of each Portfolio at the following annual
rates:
LargeCap Growth Portfolio ......................... .75%
Small Cap Portfolio ............................... .85
MidCap Growth Portfolio ........................... .80
-45-
THE ALGER INSTITUTIONAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Capital Appreciation Portfolio .................... .85
Balanced Portfolio ................................ .75
Socially Responsible Growth Portfolio ............. .75
(b) DISTRIBUTION FEES: Class R Shares--The Fund has adopted a Distribution Plan
pursuant to which Class R shares of each Portfolio pay Fred Alger & Company,
Incorporated, the Fund's distributor and an affiliate of Alger Management (the
"Distributor"), a fee at the annual rate of .50% of the respective average daily
net assets of the Class R shares of the designated Portfolios to compensate the
Distributor for its activities and expenses incurred in distributing the Class R
shares. The fees charged may be more or less than the expenses incurred by the
Distributor.
(c) BROKERAGE COMMISSIONS: During the year ended October 31, 2003, the LargeCap
Growth Portfolio, the Small Cap Portfolio, the MidCap Growth Portfolio, the
Capital Appreciation Portfolio, the Balanced Portfolio and the Socially
Responsible Growth Portfolio paid the Distributor commissions of $517,403,
$173,161, $1,469,164, $492,784, $4,476 and $4,507, respectively, in connection
with securities transactions.
(d) TRANSFER AGENT FEES: Alger Shareholder Services, Inc. ("Alger Services"), an
affiliate of Alger Management, serves as transfer agent for the Fund. During the
year ended October 31, 2003, the LargeCap Growth Portfolio, the Small Cap
Portfolio, the MidCap Growth Portfolio, the Capital Appreciation Portfolio, the
Balanced Portfolio and the Socially Responsible Growth Portfolio incurred fees
of $41,835, $36,024, $160,646, $68,895, $654 and $564, respectively, for
services provided by Alger Services.
(e) OTHER TRANSACTIONS WITH AFFILIATES: Certain trustees and officers of the
Fund are directors and officers of Alger Management, the Distributor and Alger
Services. At October 31, 2003, Alger Management and its affiliates owned 41,969
shares, 24,046 shares, 52,972 shares, 11,243 shares and 3,640 shares of the
LargeCap Growth Portfolio, the Small Cap Portfolio, the MidCap Growth Portfolio,
the Capital Appreciation Portfolio and the Balanced Portfolio, respectively.
NOTE 4--SECURITIES TRANSACTIONS:
The following summarizes the securities transactions by the Fund, other
than short-term securities, for the year ended October 31, 2003:
PURCHASES SALES
------------ ------------
LargeCap Growth Portfolio ..................... $201,088,642 $203,106,814
Small Cap Portfolio ........................... 98,675,081 94,667,534
MidCap Growth Portfolio ....................... 799,198,930 644,952,674
Capital Appreciation Portfolio ................ 259,265,981 245,023,536
Balanced Portfolio ............................ 2,819,502 1,763,442
Socially Responsible
Growth Portfolio ............................ 2,890,416 1,842,991
-46-
THE ALGER INSTITUTIONAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 5--LINES OF CREDIT:
The Fund has both committed and uncommitted lines of credit with banks.
All borrowings have variable interest rates and are payable on demand. With the
exception of the Capital Appreciation Portfolio, the Fund borrows under such
lines of credit exclusively for temporary or emergency purposes.
The Capital Appreciation Portfolio may borrow up to 1/3 of the value of
its assets, as defined, to purchase additional securities. To the extent the
Capital Appreciation Portfolio borrows under these lines, it must pledge
securities with a total value of at least twice the amount borrowed. For the
year ended October 31, 2003, the Portfolio had borrowings which averaged $25,616
at a weighted average interest rate of 1.53%.
NOTE 6--SHARE CAPITAL:
The Fund has an unlimited number of authorized shares of beneficial
interest of $.001 par value which are presently divided into six series. Each
series is divided into two separate classes.
During the year ended October 31, 2003, transactions of shares of
beneficial interest were as follows:
SHARES AMOUNT
------------ ------------
LargeCap Growth Portfolio
Class I
Shares sold ............................... 3,441,255 $ 31,652,971
Shares redeemed .......................... (7,375,519) (65,207,951)
------------ ------------
Net decrease .............................. (3,934,264) $(33,554,980)
============ ============
Class R*
Shares sold ............................... 12,585 $ 114,463
Shares redeemed ........................... (128) (1,261)
------------ ------------
Net increase .............................. 12,457 $ 113,202
============ ============
Small Cap Portfolio
Class I
Shares sold ............................... 2,571,061 $ 32,428,232
Shares redeemed ........................... (2,118,720) (26,572,009)
------------ ------------
Net increase .............................. 452,341 $ 5,856,223
============ ============
Class R*
Shares sold ............................... 4,664 $ 50,000
============ ============
-47-
THE ALGER INSTITUTIONAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SHARES AMOUNT
------------- -------------
MidCap Growth Portfolio
Class I
Shares sold ............................. 25,008,417 $ 310,763,082
Shares redeemed ......................... (8,479,728) (101,824,992)
------------- -------------
Net increase ............................ 16,528,689 $ 208,938,090
============= =============
Class R*
Shares sold ............................. 56,993 $ 754,543
Shares redeemed ......................... (3,341) (46,383)
------------- -------------
Net increase ............................ 53,652 $ 708,160
============= =============
Capital Appreciation Portfolio
Class I
Shares sold ............................. 5,572,926 $ 54,110,955
Shares redeemed ......................... (5,763,698) (55,842,299)
------------- -------------
Net decrease ............................ (190,772) $ (1,731,344)
============= =============
Class R*
Shares sold ............................. 5,981 $ 50,000
============= =============
Balanced Portfolio
Class I
Shares sold ............................. 167,211 $ 1,126,128
Shares redeemed ......................... (10,703) (70,494)
------------- -------------
Net increase ............................ 156,508 $ 1,055,634
============= =============
Class R*
Shares sold ............................. 7,776 $ 50,000
============= =============
Socially Responsible Growth Portfolio
Class I
Shares sold ............................. 254,629 $ 1,157,804
Shares redeemed ......................... (27,498) (128,679)
------------- -------------
Net increase ............................ 227,131 $ 1,029,125
============= =============
Class R*
Shares sold ............................. 12,335 $ 51,231
============= =============
- -----------
* Initially offered January 27, 2003.
-48-
THE ALGER INSTITUTIONAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
During the year ended October 31, 2002, transactions of shares of
beneficial interest were as follows:
SHARES AMOUNT
------------- -------------
LargeCap Growth Portfolio
Shares sold .............................. 6,419,729 $ 62,640,855
Shares redeemed .......................... (2,299,828) (24,538,449)
------------- -------------
Net increase ............................. 4,119,901 $ 38,102,406
============= =============
Small Cap Portfolio
Shares sold .............................. 2,520,386 $ 32,558,156
Shares redeemed .......................... (3,294,748) (43,951,352)
------------- -------------
Net decrease ............................. (774,362) $ (11,393,196)
============= =============
MidCap Growth Portfolio
Shares sold .............................. 10,842,827 $ 140,338,726
Shares redeemed .......................... (7,075,491) (89,325,469)
------------- -------------
Net increase ............................. 3,767,336 $ 51,013,257
============= =============
Capital Appreciation Portfolio
Shares sold .............................. 3,932,670 $ 43,390,389
Shares redeemed .......................... (5,268,245) (57,276,462)
------------- -------------
Net decrease ............................. (1,335,575) $ (13,886,073)
============= =============
Balanced Portfolio
Shares sold .............................. 40,497 $ 305,334
Shares redeemed .......................... (19,972) (147,428)
------------- -------------
Net increase ............................. 20,525 $ 157,906
============= =============
Socially Responsible Growth Portfolio
Shares sold .............................. 55 $ 352
Shares redeemed .......................... (1,761) (11,640)
------------- -------------
Net decrease ............................. (1,706) $ (11,288)
============= =============
-49-
THE ALGER INSTITUTIONAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 7--DISTRIBUTIONS TO SHAREHOLDERS:
During the year ended October 31, 2003 and the year ended October 31,
2002, there were no distributions paid.
As of October 31, 2003, the components of distributable earnings on a tax
basis were as follows:
LargeCap Growth Portfolio
Undistributed ordinary income ................................ --
Undistributed long-term gain ................................. --
Capital loss carryforward .................................... $ 46,816,979
Unrealized appreciation (depreciation) ....................... 12,105,875
Small Cap Portfolio
Undistributed ordinary income ................................ --
Undistributed long-term gain ................................. --
Capital loss carryforward .................................... $ 94,026,601
Unrealized appreciation (depreciation) ....................... 17,372,791
MidCap Growth Portfolio
Undistributed ordinary income ................................ --
Undistributed long-term gain ................................. --
Capital loss carryforward .................................... $ 27,943,965
Unrealized appreciation (depreciation) ....................... 62,199,362
Capital Appreciation Portfolio
Undistributed ordinary income ................................ --
Undistributed long-term gain ................................. --
Capital loss carryforward .................................... $133,629,281
Unrealized appreciation (depreciation) ....................... 20,277,159
Balanced Portfolio
Undistributed ordinary income ................................ $ 145
Undistributed long-term gain ................................. --
Capital loss carryforward .................................... 8,862
Unrealized appreciation (depreciation) ....................... 94,072
Socially Responsible Growth Portfolio
Undistributed ordinary income ................................ $ 6,419
Undistributed long-term gain ................................. --
Capital loss carryforward .................................... --
Unrealized appreciation (depreciation) ....................... 163,273
The difference between book basis and tax basis unrealized appreciation
(depreciation) is attributable primarily to the tax deferral of losses on wash
sales.
-50-
THE ALGER INSTITUTIONAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 8--REGULATORY MATTERS:
The Office of the New York State Attorney General, the Massachusetts
Securities Division of the Office of the Secretary of the Commonwealth, and the
United States Securities and Exchange Commission ("SEC") have contacted Alger
Management in connection with their investigation of practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. In response to these inquiries, Alger Management and its counsel have
been investigating certain shareholder trading practices, both in the Fund and
in other mutual funds that it manages (the "Funds"). Alger Management has
assured the board that if it is determined that improper trading practices in
the Fund detrimentally affected its performance, Alger Management will make
restitution. At the present time, Alger Management is unable to estimate the
impact, if any, that the outcome of these investigations may have on the Fund's
results of operations or financial conditions.
On October 16, 2003, the SEC commenced and settled a civil proceeding
against a former vice chairman of Alger Management's immediate parent, in
connection with alleged market timing arrangements with certain investors in the
Fund. That settlement specifically provided: "The findings herein are made
pursuant to [the former vice chairman's settlement] Offer and are not binding on
any other person or entity in this or any other proceeding." Neither Alger
Management nor any of the Funds was a party to this proceeding.
On October, 31, 2003, Peter D. DeMayo, as Custodian for James Liam DeMayo,
identifying himself as a shareholder of Spectra Fund, filed a purported class
action lawsuit against the Fund, Spectra Fund, various portfolios of the Fund,
Alger Management, and the former vice chairman (the "fund defendants"), Veras
Management Partners, LLP et al., in the United States District Court for the
Southern District of New York, and served the complaint in the lawsuit on Alger
Management and the fund defendants on November 10, 2003. The suit, based
primarily upon the SEC settlement with a former vice chairman, alleges, among
other things, that the fund defendants made false and misleading statements in
their prospectuses in violation of Section 11 of the Securities Act of 1933,
that other defendants violated the "control person" provisions of Section 15 of
the Securities Act and Section 20(a) of the Securities Exchange Act of 1934,
that all defendants committed fraud in violation of Section 10(b) of the
Securities Exchange Act and Rule 10b-5 thereunder, and that Alger Management
breached a fiduciary duty to plaintiffs. The suit seeks, among other things,
compensatory damages, recovery of advisory fees paid to Alger Management, and
payment of the plaintiff's counsel and expert fees.
Other related class actions have been commenced making substantially
similar allegations on behalf of the same putative class. All these related
class actions will be consolidated in accordance with the provisions of the
Private Securities Litigation Reform Act.
-51-
THE ALGER INSTITUTIONAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
On November 25, 2003, plaintiff, Michael Bernstein, as custodian for
Judith Bernstein, commenced an action derivatively on behalf of "the Alger
Funds" against Alger Management, a former vice chairman of its parent and Veras
Management Partners, LLP in the U.S. District Court for the Eastern District of
New York. In this shareholder derivative action, plaintiff seeks to recover
monies on behalf of "the Alger Funds" for the purportedly wrongful conduct of
defendants, including an alleged violation of Section 36 of the Investment
Company Act by Alger Management and the former vice chairman and an alleged
breach of fiduciary duty by Alger Management and the former vice chairman.
Alger Management does not believe that the foregoing lawsuits will
materially affect its ability to perform its management contracts with any of
the funds that it manages, and the management of the Fund believes that it will
not be materially adversely affected by the pending lawsuits.
-52-
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Trustees of
The Alger Institutional Fund:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of The Alger Institutional Fund
(comprising the LargeCap Growth Institutional, Small Cap Institutional, MidCap
Growth Institutional, Capital Appreciation Institutional, Balanced Institutional
and Socially Responsible Growth Institutional Portfolios) as of October 31,
2003, and the related statements of operations for the year then ended, and the
statements of changes in net assets and the financial highlights for each of the
two years then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the three years ended October 31, 2001 were
audited by other auditors, whose report, dated November 30, 2001, expressed an
unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments in
securities as of October 31, 2003, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above, and audited by us, present fairly, in all material respects, the
financial position of each of the respective portfolios constituting The Alger
Institutional Fund at October 31, 2003, the results of their operations for the
year then ended, and the changes in their net assets and the financial
highlights for each of the two years then ended, in conformity with accounting
principles generally accepted in the United States.
/s/ Ernst & Young LLP
December 10, 2003
-53-
TRUSTEES AND OFFICERS OF THE FUND (UNAUDITED)
Information about the Trustees and officers of the Fund is set forth
below. In the table the term "Alger Fund Complex" refers to the Fund, The Alger
Fund, The Alger American Fund, Spectra Fund, The China-U.S. Growth Fund and
Castle Convertible Fund, Inc., each of which is a registered investment company
managed by Fred Alger Management, Inc. ("Alger Management"). Each Trustee serves
until an event of termination, such as death or resignation, or until his
successor is duly elected; each officer's term of office is one year. Unless
otherwise noted, the address of each person named below is 111 Fifth Avenue, New
York, NY 10003.
Number of
Portfolios
in the
Alger Fund
Trustee Complex
and/or which are
Name, Age, Position with Officer Overseen
the Fund and Address Principal Occupations Since by Trustee
- -----------------------------------------------------------------------------------------
INTERESTED TRUSTEES
Fred M. Alger III (68) Chairman of the Board of Alger 1993 22
Chairman of the Board Associates, Inc. ("Associates"), Fred
Alger & Company, Incorporated ("Alger
Inc."), Alger Management, Alger
Properties, Inc. ("Properties"), Alger
Shareholder Services, Inc. ("Services"),
Alger Life Insurance Agency, Inc.
("Agency"), Fred Alger International
Advisory S.A. ("International"), and
five of the six funds in the Alger Fund
Complex; Chairman of the Boards of Alger
SICAV ("SICAV") and Analysts Resources,
Inc. ("ARI").
Dan C. Chung (41) President, Director and Chief Investment 2001 16
President and Officer of Alger Management; President
Trustee and Director of Associates, Alger Inc.,
Properties, Services, Agency,
International, ARI and Trust;
Trustee/Director of four of the six
funds in the Alger Fund Complex.
Hilary M. Alger (42) Trustee/Director of five of the six 2003 17
Trustee funds in the Alger Fund Complex;
Associate Director of Development,
College of Arts and Sciences, University
of Virginia, formerly Director of
Development and Communications, Lenox
Hill Neighborhood House.
NON-INTERESTED TRUSTEES
Stephen E. O'Neil (71) Attorney; Private investor since 1981; 1993 23
Trustee Director of Brown-Forman Corporation;
Trustee/Director of the six funds in the
Alger Fund Complex; formerly of Counsel
to the law firm of Kohler & Barnes.
-54-
Number of
Portfolios
in the
Alger Fund
Trustee Complex
and/or which are
Name, Age, Position with Officer Overseen
the Fund and Address Principal Occupations Since by Trustee
- -----------------------------------------------------------------------------------------
Charles F. Baird, Jr. (50) Managing Partner of North Castle 2000 16
Trustee Partners, a private equity securities
group; Chairman of Equinox, Leiner
Health Products, Elizabeth Arden Day
Spas, Grand Expeditions and EAS;
Trustee/Director of four of the six
funds in the Alger Fund Complex.
Formerly Managing Director of
AEA Investors, Inc.
Roger P. Cheever (58) Associate Dean of Development, Harvard 2000 16
Trustee University; Trustee/Director of four of
the six funds in the Alger Fund Complex.
Formerly Deputy Director of the Harvard
College Fund.
Lester L. Colbert, Jr. (69) Private investor; Trustee/Director of 2000 17
Trustee five of the six funds in the Alger Fund
Complex. Formerly Chairman of the Board
and Chief Executive Officer of Xidex
Corporation.
Nathan E. Saint-Amand, Medical doctor in private practice; 1993 23
M.D. (65) Co-Partner Fishers Island Partners;
Trustee Member of the Board of the Manhattan
Institute; Trustee/Director of five of
the six funds in the Alger Fund Complex.
Formerly Co-Chairman Special Projects
Committee of Memorial Sloan Kettering.
OFFICERS
Frederick A. Blum (50) Executive Vice President of Alger 1996 N/A
Treasurer and Management; Treasurer and Assistant
Assistant Secretary Secretary of the six funds in the Alger
Fund Complex. Executive Vice President,
Treasurer and Director of Trust.
Dorothy G. Sanders (48) Senior Vice President, General Counsel 2000 N/A
Secretary and Secretary of Alger, Inc., General
Counsel and Secretary of Associates,
Agency, Properties, Services, ARI and
Alger Management; Secretary of
International, and the six funds in the
Alger Fund Complex. Formerly Senior Vice
President, Fleet Financial Group.
-55-
Messrs. Alger and Chung are "interested persons" (as defined in the
Investment Company Act) of the Fund because of their affiliations with Alger
Management. Mr. Chung is Mr. Alger's son-in-law. Ms. Alger is a daughter of Fred
M. Alger III. Ms. Alger is an "interested person" because she is an immediate
family member of Mr. Alger. No Director is a director of any public company
except as may be indicated under "Principal Occupations."
The Statement of Additional Information contains additional information
about the Fund's Trustees and is available without charge upon request by
calling (800) 992-3863.
NOTES:
- ------
NOTES:
- ------
NOTES:
- ------
NOTES:
- ------
NOTES:
- ------
THE ALGER INSTITUTIONAL FUND
111 Fifth Avenue
New York, NY 10003
(800) 992-3362
www.alger.com
INVESTMENT MANAGER
Fred Alger Management, Inc.
111 Fifth Avenue
New York, NY 10003
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Alger Shareholder Services, Inc.
30 Montgomery Street
Jersey City, NJ 07302
This report is submitted for the general information of the shareholders of The
Alger Institutional Fund. It is not authorized for distribution to prospective
investors unless accompanied by an effective Prospectus for the Fund, which
contains information concerning the Fund's investment policies, fees and
expenses as well as other pertinent information.
[LOGO]
ARIFI L1
[LOGO] Alger Shareholder Services, Inc.
30 Montgomery Street
Jersey City, NJ 07302
ARIFI L2
ITEM 2. CODE OF ETHICS.
(a) The Registrant has adopted a code of ethics (the "Code of Ethics")
that applies to its principal executive officer, principal financial
officer, principal accounting officer or controller, or persons
performing similar functions.
(b) Not applicable.
(c) The Registrant has not amended its Code of Ethics during the period
covered by the shareholder report presented in Item 1 hereto.
(d) The Registrant has not granted a waiver or an implicit waiver from a
provision of its Code of Ethics during the period covered by the
shareholder report presented in Item 1 hereto.
(e) Not applicable.
(f) The Registrant's Code of Ethics is attached as an Exhibit hereto.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
On September 8, 2003, the Board of Trustees of the Registrant determined
that Stephen E. O'Neil is an audit committee financial expert (within
the meaning of that phrase specified in the instructions to Form N-CSR)
on the Registrant's audit committee. Mr. O'Neil is an "independent"
trustee - i.e., he is not an interested person of the Registrant as
defined in the Investment Company Act of 1940, nor has he accepted
directly or indirectly any consulting, advisory or other compensatory
fee from the Registrant, other than in his capacity as Trustee.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Applicable only for reports covering fiscal years ending on or after December
15, 2003.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. RESERVED
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END
MANAGEMENT INVESTMENT COMPANIES
Not applicable
ITEM 8. RESERVED
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act
of 1940, as amended) are effective based on their evaluation of the
disclosure controls and procedures as of a date within 90 days of the
filing date of this document.
(b) No changes in the registrant's internal control over financial
reporting occurred during the registrant's second fiscal half-year that
materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 10. EXHIBITS.
(a) (1) Code of Ethics as Exhibit EX-99.CODE ETH
(a) (2) Certifications of principal executive officer and principal financial
officer as required by rule 30a-2(a) under the Investment Company Act
of 1940 are attached as Exhibit 99.CERT
(b) Certifications of principal executive officer and principal financial
officer as required by rule 30a-2(b) under the Investment Company Act of
1940 are attached as Exhibit 99.906CERT
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
The Alger Institutional Fund
By: /s/Dan C. Chung
---------------------------
Dan C. Chung
President
Date: December 16, 2003
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/ Dan C. Chung
---------------------------
Dan C. Chung
President
Date: December 16, 2003
By: /s/ Frederick A. Blum
---------------------------
Frederick A. Blum
Treasurer
Date: December 16, 2003