4
ALGER CODE OF ETHICS
FOR
PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
I. COVERED OFFICERS/PURPOSE OF THE CODE
This Code of Ethics (the "Code") is adopted by each investment
company in the Alger Fund Complex, as set forth in Exhibit A hereto
(collectively, "Funds" and each, "Company"). The Code applies to the Company's
Principal Executive Officer and Principal Financial Officer, as set forth in
Exhibit B hereto, and any other Company officers set forth therein (the "Covered
Officers") for the purpose of promoting:
o honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
o full, fair, accurate, timely and understandable disclosure in reports
and documents that a registrant files with, or submits to, the
Securities and Exchange Commission ("SEC") and in other public
communications made by the Company;
o compliance with applicable laws and governmental rules and
regulations;
o the prompt internal reporting of violations of the Code to an
appropriate person or persons identified in the Code; and
o accountability for adherence to the Code.
Each Covered Officer should adhere to a high standard of business ethics
and should be sensitive to situations that may give rise to actual as well as
apparent conflicts of interest.
II. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT
CONFLICTS OF INTEREST
OVERVIEW. A "conflict of interest" occurs when a Covered Officer's
private interest interferes with the interests of, or his service to, the
Company. For example, a conflict of interest would arise if a Covered Officer,
or a member of his family, receives improper personal benefits as a result of
his position with the Company.
Certain conflicts of interest arise out of the relationships between
Covered Officers and the Company and already are subject to conflict of interest
provisions in the Investment Company Act of 1940 ("Investment Company Act") and
the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example,
Covered Officers may not individually engage in certain transactions (such as
the purchase or sale of securities or other property) with the Company because
of their status as "affiliated persons" of the Company. The Company's and the
investment adviser's compliance programs and procedures are designed to prevent,
or identify and correct, violations of these provisions. This Code does not, and
is not intended to, repeat or replace these programs and procedures, and such
conflicts fall outside of the parameters of this Code.
Although typically not presenting an opportunity for improper
personal benefit, conflicts arise from, or as a result of, the contractual
relationship between the Company and the investment adviser of which the Covered
Officers are also officers or employees. As a result, this Code recognizes that
the Covered Officers will, in the normal course of their duties (whether
formally for the Company or for the adviser, or for both), be involved in
establishing policies and implementing decisions that will have different
effects on the adviser and the Company. The participation of the Covered
Officers in such activities is inherent in the contractual relationship between
the Company and the adviser and is consistent with the performance by the
Covered Officers of their duties as officers of the Company. Thus, if performed
in conformity with the provisions of the Investment Company Act and the
Investment Advisers Act, such activities will be deemed to have been handled
ethically. In addition, it is recognized by the Funds' Boards of
Trustees/Directors ("Boards") that the Covered Officers may also be officers or
employees of one or more other investment companies covered by this or other
codes.
Other conflicts of interest are covered by the Code, even if such
conflicts of interest are not subject to provisions in the Investment Company
Act and the Investment Advisers Act. The following list provides examples of
conflicts of interest under the Code, but Covered Officers should keep in mind
that these examples are not exhaustive. The overarching principle is that the
personal interest of a Covered Officer should not be placed improperly before
the interest of the Company.
Each Covered Officer must:
o not use his personal influence or personal relationships improperly
to influence investment decisions or financial reporting by the
Company whereby the Covered Officer would benefit personally to the
detriment of the Company;
o not cause the Company to take action, or fail to take action, for the
individual personal benefit of the Covered Officer rather than the
benefit the Company;
o not use material non-public knowledge of portfolio transactions made
or contemplated for the Company to trade personally or cause others
to trade personally in contemplation of the market effect of such
transactions;
o report at least annually in writing to the adviser's general counsel
("General Counsel") all affiliations or other relationships that
might give rise to a conflict of interest between the Company and the
Covered Officer.(1)
There are some conflict of interest situations that should be
discussed with the General Counsel or other senior legal officer of the adviser.
Examples of these include:
o service as a director on the board of any public or private company;
o the receipt of any non-nominal gifts;
- ---------------------
(1) Any activity or relationship that would present a conflict for a Covered
Officer would likely also present a conflict for the Covered Officer if a
member of the Covered Officer's family engages in such an activity or has
such a relationship.
-2-
o the receipt of any entertainment from any company with which the
Company has current or prospective business dealings unless such
entertainment is business-related, reasonable in cost, appropriate
as to time and place, and not so frequent as to raise any question of
impropriety;
o any ownership interest in, or any consulting or employment
relationship with, any of the Company's service providers, other than
its investment adviser, principal underwriter, administrator or any
affiliated person thereof;
o a direct or indirect financial interest in commissions, transaction
charges or spreads paid by the Company for effecting portfolio
transactions or for selling or redeeming shares other than an
interest arising from the Covered Officer's employment, such as
compensation or equity ownership.
III. DISCLOSURE AND COMPLIANCE
o Each Covered Officer should familiarize himself with the disclosure
requirements generally applicable to the Company;
o each Covered Officer should not knowingly misrepresent, or cause
others to misrepresent, facts about the Company to others, whether
within or outside the Company, including to the Company's directors
and auditors, and to governmental regulators and self-regulatory
organizations;
o each Covered Officer should, to the extent appropriate within his
area of responsibility, consult with other officers and employees of
the Funds and the adviser with the goal of promoting full, fair,
accurate, timely and understandable disclosure in the reports and
documents the Funds file with, or submit to, the SEC and in other
public communications made by the Funds; and
o it is the responsibility of each Covered Officer to promote
compliance with the standards and restrictions imposed by applicable
laws, rules and regulations.
IV. REPORTING AND ACCOUNTABILITY
Each Covered Officer must:
o upon adoption of the Code, or as soon thereafter as applicable, upon
becoming a Covered Officer, affirm in writing to the Board that he
has received, read, and understands the Code;
o annually thereafter affirm to the Board that he has complied with the
requirements of the Code;
o not retaliate against any other Covered Officer or any employee of
the Funds or their affiliated persons for reports of potential
violations that are made in good faith; and
o notify the General Counsel promptly if he knows of any violation of
this Code. Failure to do so is itself a violation of this Code.
-3-
The General Counsel or other designated senior legal officer of the
adviser is responsible for applying this Code to specific situations in which
questions are presented under it and has the authority to interpret this Code in
any particular situation.(2) However, any approvals or waivers(3) sought by the
Principal Executive Officer will be considered by the Audit Committee (the
"Committee").
The Company and the Funds will follow these procedures in
investigating and enforcing this Code:
o the General Counsel or other designated senior legal officer will
take all appropriate action to investigate any potential violations
reported to him;
o if, after such investigation, the General Counsel believes that no
violation has occurred, the General Counsel is not required to take
any further action;
o any matter that the General Counsel believes is a violation will be
reported to the Committee;
o if the Committee concurs that a violation has occurred, it will
inform and make a recommendation to the Board, which will consider
appropriate action, which may include review of, and appropriate
modifications to, applicable policies and procedures; notification to
appropriate personnel of the investment adviser or its board; or a
recommendation to dismiss the Covered Officer;
o the Committee will be responsible for granting waivers, as
appropriate; and
o any changes to or waivers of this Code will, to the extent required,
be disclosed as provided by SEC rules.
V. OTHER POLICIES AND PROCEDURES
This Code shall be the sole code of ethics adopted by the Funds for
purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms
applicable to registered investment companies thereunder. Insofar as other
policies or procedures of the Funds, the Funds' adviser, principal underwriter,
or other service providers govern or purport to govern the behavior or
activities of the Covered Officers who are subject to this Code, they are
superseded by this Code to the extent that they overlap or conflict with the
provisions of this Code. The Funds' and their investment adviser's and principal
underwriter's codes of ethics under Rule 17j-1 under the Investment Company Act
and the adviser's more detailed policies and procedures set forth in its code of
ethics are separate requirements applying to the Covered Officers and others,
and are not part of this Code.
- ---------------------
(2) The General Counsel or other designated senior legal officer is authorized
to consult, as appropriate, with the chair of the Committee, counsel to the
Company and counsel to the Independent Directors, and is encouraged to do
so.
(3) Item 2 of Form N-CSR defines "waiver" as "the approval by the registrant of
a material departure from a provision of the code of ethics" and "implicit
waiver," which must also be disclosed, as "the registrant's failure to take
action within a reasonable period of time regarding a material departure
from a provision of the code of ethics that has been made known to an
executive officer" of the registrant.
-4-
VI. AMENDMENTS
Any amendments to this Code, other than amendments to Exhibit B, must
be approved or ratified by a majority vote of the Board, including a majority of
independent directors.
VII. CONFIDENTIALITY
All reports and records prepared or maintained pursuant to this Code
will be considered confidential and shall be maintained and protected
accordingly. Except as otherwise required by law or this Code, such matters
shall not be disclosed to anyone other than the appropriate Board and its
counsel, the appropriate Company and its adviser and the Boards of other funds
within the Alger Fund Complex and their counsel.
VIII. INTERNAL USE
The Code is intended solely for the internal use by the Funds and
does not constitute an admission, by or on behalf of any Company, as to any
fact, circumstance, or legal conclusion.
Date: September 8, 2003
-5-
EXHIBIT A
INVESTMENT COMPANIES IN THE ALGER FUND COMPLEX
The Alger Fund
The Alger Institutional Fund
The Alger American Fund
The China-U.S. Growth Fund
Spectra Fund
Castle Convertible Fund, Inc.
-6-
EXHIBIT B
PERSONS COVERED BY THIS CODE OF ETHICS
THE ALGER INSTITUTIONAL FUND
- ----------------------------
Chairman....................................................Fred M. Alger
President...................................................Dan C. Chung
Treasurer...................................................Frederick A. Blum
-7-