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THE |
ALGER | Meeting the challenge
FUND | of investing
Alger Growth Portfolio
Alger Small Capitalization Portfolio
Alger Balanced Portfolio
Alger MidCap Growth Portfolio
Alger Capital Appreciation Portfolio
Alger Money Market Portfolio
|
SEMI-ANNUAL | April 30, 1998
REPORT | (Unaudited)
|
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<PAGE>
The Alger Fund
75 Maiden Lane
New York, N.Y. 10038
(800) 992-3863
www.algerfund.com
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Board of Trustees
Fred M. Alger, CHAIRMAN
David D. Alger
Arthur M. Dubow
Stephen E. O'Neil
Nathan E. Saint-Amand
John T. Sargent
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Investment Manager
Fred Alger Management, Inc.
75 Maiden Lane
New York, N.Y. 10038
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Distributor
Fred Alger & Company, Incorporated
30 Montgomery Street
Jersey City, N.J. 07302
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Transfer Agent
Alger Shareholder Services, Inc.
30 Montgomery Street
Jersey City, N.J. 07302
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This report is submitted for the general information of the shareholders of The
Alger 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.
REP 4/8
<PAGE>
FELLOW SHAREHOLDERS: May 29, 1998
A YEAR-TO-DATE REVIEW
At the start of 1998, expectations that the turmoil in Asia would dampen
economic growth in the U.S. led investors to conclude that inflationary
pressures in the near term would remain muted and, therefore, the Federal
Reserve would leave monetary policy unchanged. As a result, the fixed-income
markets remained tranquil. Long-term interest rates during the first three
months of the year remained in a narrow 5.75% to 6.00% trading range, following
the gradual decline in long-term interest rates since April 1997. In addition to
the positive backdrop of low inflation, stable interest rates, and a neutral
monetary policy, signs of a resilient domestic economy and greater stability in
overseas financial markets formed the foundation for continued gains in the
stock market.
Ironically, the financial crisis in Asia, which was supposed to slow the
U.S. economy, contributed to the unexpected strength in the economy. The
economic downturn in Asia was supposed to slow the American economy through
reduced export demand and to curtail inflation through lower import prices. U.S.
exports to Asian markets have been dropping and import prices have been falling,
but the weakness in Asia also helped to keep American long-term interest rates
at comparatively low levels. Low long-term interest rates, plus very good
weather (there was a mild winter in the East due to El Nino), led to a boom in
consumer spending in January and February. Housing sales remained brisk and
massive mortgage refinancing occurred. The result was a 4.2% increase in GDP in
the first quarter, twice the desired rate and even higher than the very high
3.7% in the fourth quarter of 1997.
By the end of March, the monthly economic indicators were already
signaling that the economy was growing too fast--above the 2.5% target the Fed
outlined several years ago as the ideal non-inflationary growth rate. Worse yet,
there were few signs of the impending slowdown that most forecasters had
predicted. The economy continued to create new jobs, so an already tight labor
market got even tighter. The rate of unemployment fell to 4.3% which is
considered by many economists to be an unsustainable and inflationary level.
These numbers led many to speculate that the Federal Reserve would raise rates
at the May Federal Open-Market Committee meeting or this summer (probably July)
to offset future inflation. This would be an obvious case for higher rates if
there were any inflation. However, inflation continued to drop. At the same
time, political uncertainty and social unrest in Indonesia renewed instability
in the Asian financial markets. As a result, investors sought shelter in the
relative safety of the U.S. Treasury market, and long-term interest rates,
despite concerns of a Fed tightening, remained steady. The stock market entered
a narrow trading range, roughly equivalent to 9,000 to 9,200 for the Dow Jones
Industrial Average. The cessation of the strong upward movement also reflects
the natural tendency of the market to consolidate its gains.
As upcoming reports document slower growth and continued low inflation,
fears of a Fed tightening should begin to recede. Continued reports of low
inflation should also alleviate underlying worries about a possible acceleration
in inflation and interest rates on bonds should decline as the economy slows. We
expect the rate on the thirty-year bond to be below 5.50% by year-end, possibly
as low as 5.25%. Under those circumstances, the stock market should continue to
add to the gains of the first four months of 1998.
<PAGE>
Our models also show that growth stocks are selling with very little
premium to the market. This should change as the market advances and the economy
slows, which should make this year exceptionally good for growth stocks. Small
and mid cap stocks should also benefit. Given this, we remain extremely
optimistic about the prospects for all of The Alger Fund's Portfolios.
Respectfully submitted,
/s/ David D. Alger
------------------------
David D. Alger
President
<PAGE>
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TABLE OF CONTENTS
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Alger Growth Portfolio:
Schedule of Investments.......................... 4-5
Financial Highlights............................. 6-7
Alger Small Capitalization Portfolio:
Schedule of Investments.......................... 8-9
Financial Highlights............................. 10-11
Alger Balanced Portfolio:
Schedule of Investments.......................... 12-13
Financial Highlights............................. 14-15
Alger MidCap Growth Portfolio:
Schedule of Investments.......................... 16-17
Financial Highlights............................. 18-19
Alger Capital Appreciation Portfolio:
Schedule of Investments.......................... 20-21
Financial Highlights............................. 22-23
Alger Money Market Portfolio:
Schedule of Investments.......................... 24-25
Financial Highlights............................. 26
Statements of Assets and Liabilities................................... 27
Statements of Operations............................................... 28
Statement of Cash Flows (Alger Capital Appreciation Portfolio)......... 29
Statements of Changes in Net Assets.................................... 30-31
Notes to Financial Statements.......................................... 32-37
<PAGE>
-4-
THE ALGER FUND
ALGER GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (Unaudited)
April 30, 1998
COMMON STOCKS--95.0% SHARES VALUE
------ -----
APPLIANCES & TOOLS--.8%
Black & Decker Corp.............. 62,500 $ 3,226,563
-----------
BROADCASTING--1.7%
CBS Corp.........................201,000 7,160,625
-----------
BUILDING &
CONSTRUCTION--2.5%
Masco Corp.......................188,200 10,915,600
-----------
BUSINESS SERVICES--2.9%
Cognizant Corp...................163,500 8,410,113
H&R Block Inc.................... 93,300 4,198,500
-----------
12,608,613
-----------
COMMUNICATIONS--4.8%
America Online Inc.*.............135,200 10,816,000
WorldCom Inc.*...................228,900 9,792,571
-----------
20,608,571
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COMMUNICATION
EQUIPMENT--2.9%
Ascend Communications, Inc.*.....115,700 5,040,239
Cisco Systems, Inc.*............. 99,650 7,299,362
-----------
12,339,601
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COMPUTER RELATED &
BUSINESS EQUIPMENT--4.4%
Compaq Computer Corp.............233,100 6,541,485
International Business
Machines Corp. ................ 38,200 4,426,425
Xerox Corp....................... 70,300 7,979,050
-----------
18,946,960
-----------
COMPUTER SERVICES--1.1%
Network Associates Inc.*......... 68,500 4,692,250
-----------
COMPUTER SOFTWARE--4.9%
Compuware Corp.*................. 84,800 4,144,600
HBO & Company.................... 94,500 5,652,329
Microsoft Corporation*...........124,700 11,238,588
-----------
21,035,517
-----------
CONGLOMERATE--2.1%
Tyco International Ltd...........162,094 8,834,123
-----------
CONTAINERS--.9%
Owens-Illinois Inc.*............. 98,800 3,908,824
-----------
DRUG DISTRIBUTION--3.0%
AmeriSource Health Corp. Cl.A*... 57,500 3,133,750
Cardinal Health, Inc............. 67,000 6,448,750
McKesson Corp.................... 45,000 3,180,960
-----------
12,763,460
-----------
ENERGY & ENERGY
SERVICES--1.0%
AES Corp.*....................... 81,100 $ 4,475,747
-----------
FINANCIAL SERVICES--16.4%
BankAmerica Corp................. 71,500 6,077,500
Bank of New York Inc.............188,100 11,109,750
Chase Manhattan Corp............. 46,000 6,373,898
Federal Home Loan Mortgage
Corporation....................104,100 4,821,183
First Union Corp.................156,272 9,434,922
Household International Inc...... 64,100 8,425,176
Kansas City Southern
Industries Inc. ............... 90,000 4,066,920
Morgan Stanley Dean Witter & Co..142,900 11,271,238
NationsBank Corp................. 80,300 6,082,725
Schwab (Charles)
Corporation (The) ............. 73,600 2,576,000
-----------
70,239,312
-----------
FOOD CHAINS--3.5%
Kroger Co.*......................100,500 4,208,438
Safeway Inc.*....................284,400 10,878,300
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15,086,738
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INSURANCE--6.2%
American International
Group, Inc. ................... 84,150 11,071,026
MGIC Investment Corp............. 66,500 4,189,500
Travelers Group Inc..............187,500 11,472,750
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26,733,276
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LEISURE &
ENTERTAINMENT--3.6%
Carnival Corporation Cl. A.......137,000 9,530,131
International Game Technology....222,300 6,182,830
-----------
15,712,961
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MEDICAL DEVICES--1.8%
Guidant Corp..................... 55,500 3,711,563
Medtronic, Inc................... 76,200 4,010,025
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7,721,588
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PHARMACEUTICALS--11.2%
Bristol Myers Squibb Co.......... 95,000 10,058,125
Eli Lilly & Company.............. 64,100 4,458,988
Pfizer Inc....................... 40,200 4,575,283
Schering-Plough Corporation......170,600 13,669,325
Warner-Lambert Co................ 80,900 15,305,309
-----------
48,067,030
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POLLUTION CONTROL--1.3%
USA Waste Services, Inc.*........110,000 5,396,930
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<PAGE>
-5-
THE ALGER FUND
ALGER GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
April 30, 1998
COMMON STOCKS--(cont.) SHARES VALUE
------ -----
RETAILING--8.9%
CVS Corp......................... 79,500 $ 5,863,125
Home Depot, Inc..................175,050 12,187,856
Kmart Corp.*.....................148,500 2,589,543
Staples Inc.*....................238,800 5,895,494
Wal-Mart Stores Inc..............232,800 11,771,066
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38,307,084
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SEMICONDUCTORS--2.7%
Intel Corp.......................118,300 9,560,178
Micron Technology Inc.*.......... 68,400 2,124,709
-----------
11,684,887
-----------
TOYS--2.1%
Mattel Inc.......................238,200 9,126,157
-----------
TRANSPORTATION--4.3%
AMR Corp.*....................... 78,200 11,915,725
Burlington Northern Santa Fe Co.. 65,600 6,494,400
-----------
18,410,125
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Total Common Stocks
(Cost $315,876,086)............ 408,002,542
-----------
PREFERRED STOCK--1.1%
COMMUNICATION
EQUIPMENT
Nokia Corporation, ADR
(Cost $3,518,259).............. 73,000 4,881,875
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SHORT-TERM CORPORATE PRINCIPAL
NOTES--3.8% AMOUNT VALUE
---------- ------
Merrill Lynch & Co., Inc.,
5.53%, 5/12/98.................$8,000,000 $ 7,986,482
Trident Capital Finance Inc.,
5.54%, 5/15/98 (a)............. 8,300,000 8,282,118
------------
Total Short-Term Corporate Notes
(Cost $16,268,600)............. 16,268,600
------------
Total Investments
(Cost $335,662,945)(b)......... 99.9% 429,153,017
Other Assets In Excess of
Liabilities ................... .1 264,850
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Net Assets....................... 100.0% $429,417,867
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* Non-income producing security
(a)Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity only to qualified institutional buyers.
(b)At April 30, 1998, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $335,662,945 amounted to $93,490,072
which consisted of aggregate gross unrealized appreciation of $95,849,877 and
aggregate gross unrealized depreciation of $2,359,805.
See Notes to Financial Statements
<PAGE>
-6-
THE ALGER FUND
ALGER GROWTH PORTFOLIO
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
CLASS B(i)
------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, --------------------------------------------------
1998(vi)(vii) 1997 1996 1995 1994 1993
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 11.50 $ 9.49 $ 9.38 $ 6.97 $ 7.43 $ 5.76
Net investment income (loss).................. (.03) (.13) (.08)(ii) (.02) (.07)(ii) (.02)
Net realized and unrealized gain (loss)
on investments............................. 1.70 2.44 .78 2.59 .35 1.70
------- ------ ------ ------ ------ ------
Total from investment operations.............. 1.67 2.31 .70 2.57 .28 1.68
Distributions from net realized gains......... (1.49) (.30) (.59) (.16) (.74) (.01)
------- ------ ------ ------ ------ ------
Net asset value, end of period................ $ 11.68 $ 11.50 $ 9.49 $ 9.38 $ 6.97 $ 7.43
======= ======= ====== ====== ====== ======
Total Return (iii)............................ 17.3% 24.9% 8.1% 37.8% 4.1% 29.2%
======= ======= ====== ====== ====== ======
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted)..........................$ 332,924 $304,984 $266,207 $154,284 $ 76,390 $ 37,988
======= ======= ====== ====== ====== ======
Ratio of expenses to average
net assets............................... 2.01% 2.08% 2.08% 2.09% 2.20% 2.20%
======= ======= ====== ====== ====== ======
Ratio of net investment income (loss)
to average net assets.................... (1.01%) (1.13%) (.84%) (1.03%) (1.01%) (1.16%)
======= ======= ====== ====== ====== ======
Portfolio Turnover Rate..................... 60.77% 128.26% 94.91% 118.16% 103.86% 108.54%
======= ======= ====== ====== ====== ======
Average Commission Rate Paid................ $ .0727 $ .0699 $ .0715
======= ======= ======
</TABLE>
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See footnotes on page 7.
<PAGE>
-7-
THE ALGER FUND
ALGER GROWTH PORTFOLIO
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
CLASS A (v)(vi) CLASS C (iv)(vi)
-------------------------------- --------------------------------
SIX MONTHS TEN MONTHS SIX MONTHS THREE MONTHS
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1998(vii) 1997 1998(vii) 1997
-------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 11.58 $ 9.40 $ 11.50 $ 11.98
------- ------ ------- -------
Net investment income (loss).................. -- (.02) (.05) (.02)
Net realized and unrealized gain (loss)
on investments............................. 1.73 2.20 1.72 (.46)
------- ------ ------- -------
Total from investment operations.............. 1.73 2.18 1.67 (.48)
Distributions from net realized gains......... (1.49) -- (1.49) --
------- ------ ------- -------
Net asset value, end of period................ $ 11.82 $ 11.58 $ 11.68 $ 11.50
======= ======= ======= =======
Total Return (iii)............................ 17.7% 23.2% 17.3% (4.0%)
======= ======= ======= =======
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted).......................... $ 95,118 $ 52,307 $ 1,376 $ 199
======= ======= ======= =======
Ratio of expenses to average
net assets............................... 1.26% 1.30% 2.02% 2.02%
======= ======= ======= =======
Ratio of net investment income (loss)
to average net assets.................... (.27%) (.39%) (1.07%) (1.43%)
======= ======= ======= =======
Portfolio Turnover Rate..................... 60.77% 128.26% 60.77% 128.26%
======= ======= ======= =======
Average Commission Rate Paid................ $ .0727 $ .0699 $ .0727 $ .0699
======= ======= ======= =======
</TABLE>
(i) Per share data has been adjusted to reflect the effect of a 3 for 1 stock
split which occurred September 27, 1995.
(ii) Amount was computed based on
average shares outstanding during the year.
(iii) Does not reflect the effect of any sales charges.
(iv) Initially offered August 1, 1997.
(v) Initially offered January 1, 1997.
(vi) Ratios have been annualized; total return has not been annualized.
(vii) Unaudited.
See Notes to Financial Statements.
<PAGE>
-8-
THE ALGER FUND
ALGER SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS (Unaudited)
April 30, 1998
COMMON STOCKS--89.7% SHARES VALUE
------ -----
AEROSPACE--1.4%
Aviall Inc.*.................. 217,500 $ 3,045,000
Thiokol Corporation........... 74,000 3,986,750
TriStar Aerospace Co.*........ 120,000 1,980,000
-----------
9,011,750
-----------
APPAREL--3.0%
Brylane Inc.*................. 180,800 10,622,000
Dan River Inc. Cl. A*......... 265,300 5,123,739
St. John Knits Inc............ 65,000 2,900,625
-----------
18,646,364
-----------
BIO-TECHNOLOGY--2.2%
IDEC Pharmaceuticals
Corporation*................ 145,500 5,238,000
INCYTE Pharmaceuticals, Inc.*. 192,700 8,671,500
-----------
13,909,500
-----------
BUSINESS SERVICES--3.1%
Cognizant Corp................ 146,500 7,535,667
Rent-Way Inc.*................ 192,000 6,024,000
United Stationers Inc.*....... 93,000 5,870,625
-----------
19,430,292
-----------
COMMUNICATIONS--4.3%
America Online Inc.*.......... 85,000 6,800,000
Jacor Communications Inc.*.... 180,500 10,265,938
Outdoor Systems, Inc.*........ 311,050 9,875,837
-----------
26,941,775
-----------
COMMUNICATION
EQUIPMENT--1.9%
Ascend Communications, Inc.*.. 201,200 8,764,876
Visual Networks, Inc.*........ 91,500 3,030,938
-----------
11,795,814
-----------
COMPUTER RELATED &
BUSINESS EQUIPMENT--.9%
Essex International Inc.*..... 162,400 5,826,100
-----------
COMPUTER SERVICES--4.1%
Keane Inc.*................... 84,500 4,246,125
Network Associates Inc.*...... 100,000 6,850,000
QuickResponse Service Inc.*... 103,800 4,878,600
Technology Solutions Co.*..... 227,500 7,308,438
Transaction Network
Services Inc.* ............. 139,800 2,848,425
-----------
26,131,588
-----------
COMPUTER SOFTWARE--3.7%
CBT Group PLC ADS*............ 169,500 8,623,312
Compuware Corp.*.............. 130,000 6,353,750
Saville Systems PLC ADR*...... 172,600 8,608,425
-----------
23,585,487
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CONSUMER PRODUCTS--2.0%
Central Garden & Pet Co.*..... 117,400 4,020,950
Furniture Brands
International Inc.* ........ 114,500 3,363,437
Pittway Corp. Cl. A........... 68,800 5,142,800
-----------
12,527,187
-----------
CONTAINERS--.1%
Owens-Illinois Inc.*.......... 20,000 791,260
-----------
DRUG DISTRIBUTION--4.1%
AmeriSource Health
Corp Cl. A* ................ 134,500 7,330,250
Bergen Brunswig Corp. Cl. A... 84,800 3,847,800
McKesson Corp................. 130,000 9,189,440
Omnicare, Inc................. 166,700 5,709,475
-----------
26,076,965
-----------
FINANCIAL SERVICES--7.1%
CMAC Investment Corp.......... 131,300 8,477,122
Commerce Bancshares Inc....... 69,652 3,412,947
Dime Community Bancorp, Inc... 103,100 3,163,933
Finova Group Inc.............. 73,000 4,275,099
Kansas City Southern
Industries Inc.............. 159,000 7,184,892
National Commerce Bancorp..... 100,000 4,475,000
North Fork Bancorp Inc........ 133,100 4,941,338
Sovereign Bancorp Inc......... 206,400 3,895,800
Wilmington Trust Corp......... 81,000 5,234,625
-----------
45,060,756
-----------
FOOD CHAINS--2.3%
Fred Meyer, Inc.*............. 191,600 8,598,050
Whole Foods Market Inc.* ..... 93,000 5,754,375
-----------
14,352,425
-----------
FOODS & BEVERAGES--6.6%
CKE Restaurants Inc........... 175,480 6,075,995
Earthgrains Company........... 211,400 9,882,950
Flowers Industries Inc........ 297,000 6,348,375
Interstate Bakeries Corp...... 160,300 5,079,586
Keebler Foods Co.*............ 162,000 4,617,000
Suiza Foods Corp.*............ 67,000 3,969,750
U.S. Foodservice*............ 157,200 5,551,204
-----------
41,524,860
-----------
INSURANCE--3.7%
Enhance Financial Services
Group Inc................... 86,000 5,901,750
Executive Risk Inc............ 95,100 6,342,029
Fremont General Corp.......... 52,200 2,910,150
Vesta Insurance Group Inc..... 146,000 8,267,250
-----------
23,421,179
-----------
LEISURE &
ENTERTAINMENT--2.4%
Family Golf Centers Inc.*..... 188,000 7,919,500
International Game Technology. 132,000 3,671,315
Premier Parks Inc.*........... 70,000 3,893,750
-----------
15,484,565
-----------
<PAGE>
-9-
THE ALGER FUND
ALGER SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
April 30, 1998
SHARES VALUE
------ -----
MANUFACTURING--2.1%
Knoll Inc.*................... 176,100 $ 6,130,569
Leggett & Platt Inc........... 77,100 4,004,420
Scotsman Industries Inc....... 100,000 2,862,500
-----------
12,997,489
-----------
MEDICAL DEVICES--3.5%
Biomet Inc.................... 240,000 7,200,000
ESC Medical Systems Ltd.*..... 170,900 5,554,250
Ocular Sciences Inc.*......... 141,200 3,953,600
Safeskin Corp.*............... 155,800 5,550,375
-----------
22,258,225
-----------
MEDICAL SERVICES--5.2%
Express Scripts Inc. Cl. A*... 70,000 5,600,000
Hooper Holmes Inc............. 205,200 4,835,127
Impath Inc.*.................. 85,000 3,166,250
Lincare Holdings Inc.*........ 100,000 8,112,500
MedQuist Inc.*................ 143,600 7,000,500
VWR Scientific
Products Corp.* ............ 120,000 3,945,000
-----------
32,659,377
-----------
OIL & GAS--.7%
Varco International Inc.*..... 149,000 4,581,750
-----------
PHARMACEUTICALS--4.0%
Alza Corp.*................... 124,400 5,963,487
Elan Corp PLC-ADR*............ 163,600 10,163,650
Forest Laboratories, Inc.*.... 262,200 9,488,494
-----------
25,615,631
-----------
PUBLISHING--.8%
Ziff-Davis Inc.*.............. 270,000 4,860,000
-----------
POLLUTION CONTROL--1.2%
USA Waste Services, Inc.*..... 152,000 7,457,575
-----------
RESTAURANTS &
LODGING--1.2%
Outback Steakhouse, Inc.*..... 111,600 4,254,750
Showbiz Pizza Time, Inc.*..... 93,800 3,623,025
-----------
7,877,775
-----------
RETAILING--13.9%
BJ's Wholesale Club Inc.*..... 173,500 6,950,931
Bed Bath & Beyond Inc.*....... 134,400 6,619,200
Bon-Ton Stores Inc.*.......... 187,300 3,067,038
Borders Group Inc.*........... 238,600 7,665,025
Dress Barn Inc.*.............. 151,300 4,406,613
Elder-Beerman Stores Corp.*... 133,500 3,604,500
Family Dollar Stores Inc...... 174,400 5,929,600
Finish Line (The) Inc Cl. A*.. 150,000 3,712,500
Kmart Corp.*.................. 310,000 5,405,780
Linens'n Things Inc.*......... 102,500 6,175,625
Michaels Stores Inc.*......... 276,800 8,373,200
Pacific Sunwear of
California Inc.* ........... 80,000 3,530,000
Proffitt's Inc.*.............. 160,000 6,360,000
Stage Stores, Inc.*........... 145,300 7,473,941
Sunglass Hut
International Inc.* ........ 290,500 2,778,052
WestPoint Stevens Inc.*....... 180,600 6,050,100
-----------
88,102,105
-----------
SEMICONDUCTORS--.5%
Micron Technology Inc.*....... 101,600 3,156,001
-----------
TRANSPORATION--3.7%
Coach USA Inc.*............... 200,900 9,530,294
Continental
Airlines Inc. Cl. B* ....... 124,000 7,300,500
SkyWest Inc................... 157,800 6,390,900
-----------
23,221,694
-----------
Total Common Stocks
(Cost $443,646,444)......... 567,305,489
-----------
SHORT-TERM CORPORATE PRINCIPAL
NOTES--10.9% AMOUNT
---------
Merrill Lynch & Co., Inc.,....
5.53%, 5/12/98..............$23,000,000 22,961,136
Three Rivers Funding Corp.,
5.55%, 5/14/98 (a).......... 23,000,000 22,953,904
Trident Capital Finance Inc.,
5.54%, 5/15/98 (a).......... 23,100,000 23,050,233
-----------
Total Short-Term Corporate Notes
(Cost $68,965,273).......... 68,965,273
-----------
Total Investments
(Cost $512,611,717) (b)..... 100.6% 636,270,762
Liabilities in Excess of
Other Assets (.6) (3,629,620)
----- -----------
Net Assets.................... 100.0% $632,641,142
----- ------------
* Non-income producing security.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity only to qualified institutional
buyers.
(b) At April 30 1998, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $512,611,717, amounted to $
123,659,045 which consisted of aggregate gross unrealized appreciation of
$126,933,524 and aggregate gross unrealized depreciation of $ 3,274,479.
See Notes to Financial Statements.
<PAGE>
-10-
THE ALGER FUND
ALGER SMALL CAPITALIZATION PORTFOLIO
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
CLASS B(i)
----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ----------------------------------------------------
1998(v)(vi) 1997 1996 1995 1994 1993
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $ 10.29 $ 10.86 $ 11.13 $ 7.62 $ 8.65 $ 6.88
-------- -------- -------- -------- -------- ------
Net investment income (loss).................. (.09) (.11) (.09) (.13) (.09) (.08)
Net realized and unrealized gain (loss)
on investments............................. .76 1.28 .42 3.64 (.02) 1.85
-------- -------- -------- -------- -------- ------
Total from investment operations.............. .67 1.17 .33 3.51 (.11) 1.77
Distributions from net realized gains......... (.51) (1.74) (.60) -- (.92) --
-------- -------- -------- -------- -------- ------
Net asset value, end of period................ $ 10.45 $ 10.29 $ 10.86 $ 11.13 $ 7.62 $ 8.65
======== ======== ======== ======== ======== ========
Total Return (ii)............................. 7.3% 12.9% 3.2% 46.2% (1.1%) 25.8%
======== ======== ======== ======== ======== ========
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted).......................... $577,316 $580,651 $553,872 $463,718 $294,890 $300,108
======== ======== ======== ======== ======== ========
Ratio of expenses to average
net assets............................... 2.11% 2.14% 2.13% 2.11% 2.18% 2.13%
======== ======== ======== ======== ======== ========
Ratio of net investment income
(loss) to average net assets............. (1.58%) (1.67%) (1.59%) (1.75%) (1.51%) (1.52%)
======== ======== ======== ======== ======== ========
Portfolio Turnover Rate..................... 88.19% 120.27% 153.35% 97.37% 131.86% 148.49%
======== ======== ======== ======== ======== ========
Average Commission Rate Paid................ $ .0671 $ .0652 $ .0611
======== ======== ========
</TABLE>
- -------------------
See footnotes on page 11.
<PAGE>
-11-
THE ALGER FUND
ALGER SMALL CAPITALIZATION PORTFOLIO
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
CLASS A (iv)(v) CLASS C (iii)(v)
-------------------------------- --------------------------------
SIX MONTHS TEN MONTHS SIX MONTHS THREE MONTHS
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1998(vi) 1997 1998(vi) 1997
<S> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 10.35 $ 9.21 $ 10.29 $ 10.38
-------- -------- ------- --------
Net investment income (loss).................. (.01) (.04) (.01) (.03)
Net realized and unrealized gain (loss)
on investments............................. .74 1.18 .68 (.06)
-------- -------- ------- --------
Total from investment operations.............. .73 1.14 .67 (.09)
Distributions from net realized gains......... (.51) -- (.51) --
-------- -------- ------- --------
Net asset value, end of period................ $ 10.57 $ 10.35 $ 10.45 $ 10.29
======== ======== ======= ========
Total Return (ii)............................. 7.8% 12.4% 7.3% (.9%)
======== ======== ======= ========
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted).......................... $ 52,650 $ 25,996 $ 2,675 $ 338
======== ======== ======= ========
Ratio of expenses to average
net assets............................... 1.36% 1.38% 2.11% 2.09%
======== ======== ======= ========
Ratio of net investment income (loss)
to average net assets.................... (.81%) (.93%) (1.55%) (1.71%)
======== ======== ======= ========
Portfolio Turnover Rate..................... 88.19% 120.27% 88.19% 120.27%
======== ======== ======= ========
Average Commission Rate Paid................ $ .0671 $ .0652 $ .0671 $ .0652
======== ======== ======= ========
</TABLE>
(i) Per share data has been adjusted to reflect the effect of a 3 for 1 stock
split which occurred September 27, 1995.
(ii) Does not reflect the effect
of any sales charges.
(iii) Initially offered August 1, 1997.
(iv) Initially offered January 1, 1997.
(v) Ratios have been annualized; total return has not been annualized.
(vi) Unaudited.
<PAGE>
-12-
THE ALGER FUND
ALGER BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS (Unaudited)
April 30, 1998
COMMON STOCKS--67.3% SHARES VALUE
------ -----
APPLIANCES & TOOLS--1.0%
Black & Decker Corp.............. 3,500 $ 180,687
---------
BROADCASTING--1.4%
CBS Corp. ....................... 7,000 249,375
---------
BUILDING &
CONSTRUCTION--1.7%
Masco Corp....................... 5,000 290,000
---------
BUSINESS SERVICES--2.0%
H&R Block Inc.................... 2,600 117,000
Cognizant Corp................... 4,400 226,327
---------
343,327
---------
COMMUNICATIONS--3.4%
America Online Inc.*............. 3,800 304,000
WorldCom Inc.*................... 6,300 269,520
---------
573,520
---------
COMMUNICATION
EQUIPMENT--2.4%
Ascend Communications, Inc.*..... 3,300 143,758
Cisco Systems, Inc.*............. 3,550 260,038
---------
403,796
COMPUTER RELATED &
BUSINESS EQUIPMENT--2.9%
Compaq Computer Corp............. 6,500 182,410
International Business
Machines Corp. 1,100 127,462
Xerox Corp....................... 1,700 192,950
---------
502,822
---------
COMPUTER SERVICES--.6%
Network Associates Inc.*......... 1,400 95,900
---------
COMPUTER SOFTWARE--3.4%
Compuware Corp.*................. 2,800 136,850
HBO & Company.................... 3,100 185,420
Microsoft Corporation*........... 2,900 261,362
---------
583,632
---------
CONGLOMERATE--1.4%
Tyco International Ltd........... 4,546 247,756
---------
DRUG DISTRIBUTION--1.8%
AmeriSource Health Corp Cl. A*... 1,500 81,750
McKesson Corp.................... 3,200 226,202
---------
307,952
---------
ENERGY & ENERGY SERVICES--.7%
AES Corp.*....................... 2,200 121,414
---------
FINANCIAL SERVICES--12.4%
Banc One Corp.................... 2,530 148,797
BankAmerica Corp................. 2,000 170,000
Bank of New York Inc............. 5,200 307,128
Chase Manhattan Corp............. 500 69,282
Federal Home Loan Mortgage
Corporation.................... 3,700 171,357
First Union Corp................. 2,772 167,360
Household International Inc...... 1,700 223,445
Kansas City Southern
Industries Inc. ............... 3,000 135,564
Morgan Stanley Dean Witter & Co.. 4,635 365,586
NationsBank Corp................. 2,300 174,225
Paine Webber Group Inc........... 2,450 109,792
Schwab (Charles)
Corporation (The) ............. 2,050 71,750
---------
2,114,286
---------
FOOD CHAINS--2.5%
Kroger Co.*...................... 2,700 113,062
Safeway Inc.*.................... 8,000 306,000
---------
419,062
---------
INSURANCE--4.3%
American International
Group, Inc. ................... 2,050 269,704
MGIC Investment Corp............. 1,900 119,700
Travelers Group Inc.............. 5,500 336,534
---------
725,938
---------
LEISURE &
ENTERTAINMENT--2.7%
Carnival Corporation Cl. A....... 4,200 292,165
International Game Technology.... 6,200 172,441
---------
464,606
---------
MEDICAL DEVICES--1.6%
Guidant Corp..................... 2,400 160,500
Medtronic, Inc................... 2,000 105,250
---------
265,750
---------
PHARMACEUTICALS--7.9%
Bristol Myers Squibb Co.......... 3,100 328,212
Eli Lilly & Company.............. 1,700 118,257
Forest Laboratories, Inc.*....... 1,600 57,901
Pfizer Inc....................... 1,000 113,813
Schering-Plough Corporation...... 4,300 344,538
Warner-Lambert Co................ 2,000 378,376
---------
1,341,097
---------
POLLUTION CONTROL--.9%
USA Waste Services, Inc.*........ 3,000 147,188
---------
RETAILING--7.0%
CVS Corp......................... 3,000 221,250
Home Depot, Inc.................. 5,000 348,125
Kmart Corp.*..................... 4,200 73,240
Staples Inc.*.................... 8,100 199,973
Wal-Mart Stores Inc.............. 6,800 343,828
---------
1,186,416
---------
SEMICONDUCTORS--1.5%
Intel Corp....................... 2,500 202,032
Micron Technology Inc.*.......... 1,900 59,020
---------
261,052
---------
TOYS--1.5%
Mattel Inc....................... 6,700 256,697
---------
<PAGE>
-13-
THE ALGER FUND
ALGER BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
April 30, 1998
COMMON STOCKS--(cont.) SHARES VALUE
------ -----
TRANSPORTATION--2.3%
AMR Corp.*....................... 1,600 $ 243,800
Burlington Northern Santa Fe Co.. 1,500 148,500
-----------
392,300
-----------
Total Common Stocks
(Cost $8,717,429).............. 11,474,573
-----------
PREFERRED STOCK--1.0%
COMMUNICATION EQUIPMENT
Nokia Corporation, ADR
(Cost $125,202)................ 2,600 173,875
-----------
CORPORATE BONDS--13.4% PRINCIPAL
AMOUNT
---------
AUTOMOTIVE--3.4%
Ford Motor Capital B.V.,
9.50%, 6/1/10.................$300,000 366,654
General Motors Acceptance Corp.,
7.125%, 6/1/99................ 200,000 202,254
-----------
568,908
-----------
CONGLOMERATE--1.8%
GE Capital Corp.,
7.25%, 6/5/12..................300,000 301,101
-----------
ELECTRIC & GAS
COMPANIES--2.8%
Cincinnati Gas & Electric Co.,
7.20%, 10/1/23.................100,000 99,320
Pacific Gas & Electric Co.,
7.25%, 3/1/26..................182,000 185,216
Potomac Electric Power Co.,
7.00%, 1/15/24.................200,000 201,162
-----------
485,698
-----------
FINANCIAL SERVICES--4.2%
BankAmerica Corp.,
6.625%, 10/15/07...............200,000 201,072
Bankers Trust Corp.,
7.00%, 3/13/18.................300,000 305,250
Citicorp.,
7.125%, 6/1/03.................200,000 205,618
-----------
711,940
-----------
POLLUTION CONTROL--1.2%
Waste Management Inc.,
8.25%, 11/15/99................200,000 205,908
-----------
Total Corporate Bonds
(Cost $2,308,102) ............. 2,273,555
-----------
U.S. GOVERMENT & AGENCY
OBLIGATIONS--15.7%
U.S. Treasury Notes,
6.375%, 1/15/00............... 100,000 101,234
U.S. Treasury Notes,
7.50%, 5/15/02.................100,000 106,500
U.S. Treasury Notes,
6.25%, 2/15/03.................250,000 255,938
Federal Home Loan Bank Corp.,
6.00%, 1/27/03.................250,000 247,033
Federal Home Loan Bank Corp.,
7.58%, 7/9/12..................200,000 199,960
Federal Home Loan Bank Corp.,
7.30%, 12/24/12................300,000 298,359
Federal Home Loan Mortgage Corp.,
6.50%, 6/10/03.................150,000 149,016
Federal National Mortgage Assoc.,
8.50%, 2/1/05..................100,000 103,813
Federal National Mortgage Assoc.,
7.49%, 5/22/07.................250,000 253,868
Federal National Mortgage Assoc.,
7.00%, 3/14/13.................600,000 586,500
Federal National Mortgage Assoc.,
6.75%, 2/4/28..................400,000 381,876
----------
Total U.S. Goverment & Agency
Obligations (Cost $2,731,195).. 2,684,097
----------
SHORT-TERM CORPORATE
NOTES--3.5%
Countrywide Home Loans Inc.,
5.57%, 5/7/98..................150,000 149,861
OGE Energy Corp.,
5.51%, 5/1/98..................200,000 200,000
Trident Capital Finance Inc.,
5.54%, 5/15/98 (a).............250,000 249,461
-----------
Total Short-Term Corporate Notes
(Cost $599,322)................ 599,322
-----------
Total Investments
(Cost $14,481,250)(b).......... 100.9% 17,205,422
Liabilities in Excess of
Other Assets .................. (.9) (159,788)
-----------
Net Assets....................... 100.0% $17,045,634
===== ===========
* Non-income producing security.
(a)Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity only to qualified institutional buyers.
(b)At April 30, 1998, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $14,481,250, amounted to $2,724,172
which consisted of aggregate gross unrealized appreciation of $ 2,879,942 and
aggregate gross unrealized depreciation of $155,770.
See Notes to Financial Statements
<PAGE>
-14-
THE ALGER FUND
ALGER BALANCED PORTFOLIO
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -----------------------------------------------------
1998(iii)(vii) 1997 1996 1995 1994 1993
-------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $ 16.48 $ 14.21 $ 13.59 $ 10.65 $ 11.18 $ 9.95
------- ------- ------- ------- ------- -------
Net investment income (loss).................. .03 -- .12 (.02)(i) (.05) (.01)
Net realized and unrealized gain (loss)
on investments............................. 1.68 2.67 .72 2.96 (.39) 1.24
------- ------- ------- ------- ------- -------
Total from investment operations.............. 1.71 2.67 .84 2.94 (.44) 1.23
Dividends from net investment income.......... (.01) (.06) (.01) -- -- --
Distributions from net realized gains......... (2.20) (.34) (.21) -- (.09) --
------- ------- ------- ------- ------- -------
Total distributions........................... (2.21) (.40) (.22) -- (.09) --
------- ------- ------- ------- ------- -------
Net asset value, end of period................ $ 15.98 $ 16.48 $ 14.21 $ 13.59 $ 10.65 $ 11.18
======== ======== ======== ======= ======= =======
Total Return (ii)............................. 12.2% 19.3% 6.3% 27.6% (4.0%) 12.4%
======== ======== ======== ======= ======= =======
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted).......................... $ 16,218 $ 12,653 $ 13,492 $ 6,214 $ 3,073 $ 3,125
======== ======== ======== ======= ======= =======
Ratio of expenses to average
net assets............................... 2.66% 2.89% 2.70% 3.34% 3.18% 3.82%
======== ======== ======== ======= ======= =======
Decrease reflected in above
expense ratios due to
expense reimbursements (iv).............. -- -- -- .24% -- .75%
======== ======== ======== ======= ======= =======
Ratio of net investment income
(loss) to average net assets............. .21% .04% .47% (.13%) (.41%) (.97%)
======== ======== ======== ======= ======= =======
Portfolio Turnover Rate..................... 35.60% 109.26% 85.51% 84.06% 84.88% 115.17%
======== ======== ======== ======= ======= =======
Average Commission Rate Paid................ $ .0737 $ .0709 $ .0700
======== ======== ========
</TABLE>
- ------------------
See footnotes on page 15.
<PAGE>
-15-
THE ALGER FUND
ALGER BALANCED PORTFOLIO
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
CLASS A (iii)(vi) CLASS C (iii)(v)
-------------------------------- --------------------------------
SIX MONTHS TEN MONTHS SIX MONTHS THREE MONTHS
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1998(vii) 1997 1998(vii) 1997
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 16.58 $ 13.99 $ 16.49 $ 16.88
------- ------- ------- -------
Net investment income (loss).................. .07 .05 .02 (.01)
Net realized and unrealized gain (loss)
on investments............................. 1.72 2.54 1.70 (.38)
------- ------- ------- -------
Total from investment operations.............. 1.79 2.59 1.72 (.39)
------- ------- ------- -------
Dividends from net investment income.......... (.06) -- -- --
Distributions from net realized gains......... (2.20) -- (2.20) --
------- ------- ------- -------
Total distributions........................... (2.26) -- (2.20) --
------- ------- ------- -------
Net asset value, end of period................ $ 16.11 $ 16.58 $ 16.01 $ 16.49
======= ======= ======= =======
Total Return (ii)............................. 12.7% 18.5% 12.3% (2.31)%
======= ======= ======= =======
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted).......................... $ 681 $ 459 $ 147 $ 48
======= ======= ======= =======
Ratio of expenses to average
net assets............................... 1.89% 2.10% 2.62% 2.77%
======= ======= ======= =======
Ratio of net investment income (loss)
to average net assets.................... .96% .72% .21% (.84)%
======= ======= ======= =======
Portfolio Turnover Rate..................... 35.60% 109.26% 35.60% 109.26%
======= ======= ======= =======
Average Commission Rate Paid................ $ .0737 $ .0709 $ .0737 $ .0709
======= ======= ======= =======
</TABLE>
(i) Amount was computed based on average shares outstanding during the period.
(ii) Does not reflect the effect of any sales charges.
(iii) Ratios have been annualized; total return has not been annualized.
(iv) Represents expense reimbursements made pursuant to applicable state
expense limits.
(v) Initially offered August 1, 1997.
(vi) Initially offered January 1, 1997.
(vii) Unaudited.
<PAGE>
-16-
THE ALGER FUND
ALGER MIDCAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (Unaudited)
April 30, 1998
COMMON STOCKS--94.0% SHARES VALUE
------ -----
APPAREL--.5%
Tommy Hilfiger Corporation*...... 16,700 $ 1,018,700
-----------
APPLIANCES & TOOLS--1.0%
Black & Decker Corp.............. 39,100 2,018,538
-----------
BUILDING &
CONSTRUCTION--4.1%
Champion Enterprises Inc.*....... 52,200 1,298,475
Masco Corp....................... 83,600 4,848,800
Royal Group Technologies Ltd.*... 69,800 2,168,197
-----------
8,315,472
-----------
BUSINESS SERVICES--6.2%
Cognizant Corp...................112,700 5,797,063
Consolidation Capital Corp.*..... 43,100 950,915
H&R Block Inc.................... 65,000 2,925,000
Paychex, Inc..................... 51,400 2,791,688
-----------
12,464,666
-----------
COMMUNICATIONS--2.8%
America Online Inc.*............. 69,300 5,544,000
-----------
COMMUNICATION
EQUIPMENT--1.0%
Ascend Communications, Inc.*..... 45,700 1,990,828
-----------
COMPUTER SERVICES--3.2%
Network Associates Inc.*......... 67,200 4,603,200
Sterling Commerce, Inc.*......... 44,500 1,894,054
-----------
6,497,254
-----------
COMPUTER SOFTWARE--4.1%
Compuware Corp.*................. 92,100 4,501,388
HBO & Company.................... 62,400 3,732,330
-----------
8,233,718
-----------
CONSUMER PRODUCTS--2.1%
Furniture Brands
International Inc.* ........... 98,500 2,893,438
Newell Co........................ 25,500 1,231,982
-----------
4,125,420
-----------
CONTAINERS--1.3%
Owens-Illinois Inc.*............. 67,000 2,650,720
-----------
DRUG DISTRIBUTION--8.8%
AmeriSource Health Corp. Cl. A*.. 77,800 4,240,100
Bergen Brunswig Corp. Cl. A...... 23,800 1,079,925
Cardinal Health, Inc............. 42,900 4,129,125
McKesson Corp.................... 75,600 5,344,012
Omnicare, Inc.................... 84,100 2,880,425
-----------
17,673,587
-----------
ENERGY & ENERGY
SERVICES--2.6%
AES Corp.*....................... 95,500 5,270,454
-----------
FINANCIAL SERVICES--9.2%
Dime Community Bancorp, Inc...... 71,500 2,194,192
Finova Group Inc................. 21,000 1,229,823
Kansas City Southern
Industries Inc. ............... 46,600 2,105,761
Paine Webber Group Inc........... 51,550 2,310,110
Schwab (Charles)
Corporation (The) ............. 35,600 1,246,000
Sovereign Bancorp Inc............121,200 2,287,650
Star Banc Corp................... 18,400 1,162,659
State Street Corp................ 56,000 4,004,000
SunAmerica Inc................... 36,000 1,797,768
-----------
18,337,963
-----------
FOOD CHAINS--1.5%
Fred Meyer, Inc.*................ 67,000 3,006,625
-----------
FOODS & BEVERAGES--2.4%
Suiza Foods Corp.*............... 82,700 4,899,975
-----------
INSURANCE--1.9%
MGIC Investment Corp............. 60,500 3,811,500
-----------
LEISURE &
ENTERTAINMENT--5.6%
Carnival Corporation Cl. A....... 43,100 2,998,165
International Game Technology....225,500 6,271,832
Premier Parks Inc.*.............. 34,500 1,919,063
-----------
11,189,060
-----------
MANUFACTURING--2.3%
Leggett & Platt Inc.............. 50,900 2,643,644
Wabash National Corp............. 62,100 1,917,338
-----------
4,560,982
-----------
MEDICAL DEVICES--3.1%
Biomatrix Inc.*.................. 35,000 1,111,250
Biomet Inc....................... 93,700 2,811,000
Guidant Corp..................... 19,400 1,297,375
Safeskin Corp.*.................. 30,400 1,083,000
-----------
6,302,625
-----------
MEDICAL SERVICES--1.8%
Quorum Health Group Inc.*........114,950 3,692,769
-----------
PHARMACEUTICALS--4.4%
Alza Corp.*...................... 39,200 1,879,170
Elan Corp PLC-ADR*............... 47,300 2,938,513
Forest Laboratories, Inc.*.......111,100 4,020,487
-----------
8,838,170
-----------
<PAGE>
-17-
THE ALGER FUND
ALGER MIDCAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
April 30, 1998
COMMON STOCKS--94.0% SHARES VALUE
------ -----
POLLUTION CONTROL--3.6%
USA Waste Services, Inc.*........145,900 $ 7,158,292
-----------
RESTAURANTS &
LODGING--2.8%
Outback Steakhouse, Inc.*........ 86,000 3,278,750
Showbiz Pizza Time, Inc.*........ 59,000 2,278,875
-----------
5,557,625
-----------
RETAILING--6.9%
Borders Group Inc.*.............. 56,000 1,799,000
CVS Corp......................... 45,400 3,348,250
General Nutrition
Companies, Inc.* .............. 91,100 3,268,213
Kmart Corp.*..................... 67,400 1,175,321
Staples Inc.*....................170,850 4,217,944
-----------
13,808,728
-----------
SEMICONDUCTORS--.5%
Micron Technology Inc.*.......... 32,500 1,009,548
-----------
TEXTILES--.5%
Pillowtex Corp................... 19,700 988,704
-----------
TOYS--2.5%
Mattel Inc.......................131,000 5,019,003
-----------
TRANSPORTATION--7.3%
Alaska Air Group Inc.*........... 41,600 2,334,800
AMR Corp.*....................... 27,400 4,175,075
Coach USA Inc.*.................. 56,300 2,670,758
Continental Airlines Inc. Cl. B*. 92,500 5,445,938
-----------
14,626,571
-----------
Total Common Stocks
(Cost $157,470,670)............ 188,611,497
-----------
SHORT-TERM CORPORATE PRINCIPAL
NOTES--8.2% AMOUNT VALUE
---------- -------
APC Funding Corp.,
5.55%, 5/12/98................. $5,200,000 $ 5,191,182
Merrill Lynch & Co., Inc.,
5.53%, 5/12/98................. 5,600,000 5,590,538
Trident Capital Finance Inc.,
5.54%, 5/15/98(a).............. 5,700,000 5,687,720
------------
Total Short-Term Corporate Notes
(Cost $16,469,440)............. 16,469,440
------------
Total Investments
(Cost $173,940,110)(b)......... 102.2% 205,080,937
Liabilities in Excess of
Other Assets .................. (2.2) (4,460,259)
----- ------------
Net Assets....................... 100.0% $200,620,678
===== ============
* Non-income producing security.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity only to qualified institutional buyers.
(b) At April 30 1998, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $173,940,110, amounted to
$31,140,827 which consisted of aggregate gross unrealized appreciation of
$32,886,560 and aggregate gross unrealized depreciation of $ 1,745,733.
See Notes to Financial Statements.
<PAGE>
-18-
THE ALGER FUND
ALGER MIDCAP GROWTH PORTFOLIO
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------------
FROM
MAY 24, 1993
SIX MONTHS (COMMENCEMENT
ENDED YEAR ENDED OCTOBER 31, OF OPERATIONS) TO
APRIL 30, ---------------------------------------- OCTOBER 31,
1998(i)(vii) 1997 1996 1995 1994 1993(i)
------------ ---- ---- ---- ---- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 22.33 $ 18.87 $ 18.94 $ 12.77 $ 12.48 $ 10.00
-------- -------- --------- --------- --------- -------
Net investment income (loss)............ (.16)(ii) (.29) (.25)(ii) (.08) (.11) (.09)
Net realized and unrealized gain (loss)
on investments....................... 2.44 4.23 1.35 6.25 .68 2.57
-------- -------- --------- --------- --------- -------
Total from investment operations........ 2.28 3.94 1.10 6.17 .57 2.48
Distributions from net realized gains... (2.46) (.48) (1.17) -- (.28) --
-------- -------- --------- --------- --------- -------
Net asset value, end of period.......... $ 22.15 $ 22.33 $ 18.87 $ 18.94 $ 12.77 $ 12.48
-------- -------- --------- --------- --------- -------
Total Return (iii)...................... 12.7% 21.4% 6.4% 48.3% 4.7% 24.8%
======== ======== ======== ======== ======== =======
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted).................... $185,814 $166,475 $125,686 $ 54,016 $ 18,516 $ 3,836
======== ======== ======== ======== ======== =======
Ratio of expenses to average
net assets......................... 2.13% 2.19% 2.27% 2.39% 3.20% 3.73%
======== ======== ======== ======== ======== =======
Decrease reflected in above
expense ratios due to
expense reimbursements (iv)........ -- -- -- -- .07% .80%
======== ======== ======== ======== ======== =======
Ratio of net investment income
(loss) to average net assets....... (1.50%) (1.58%) (1.33%) (1.71%) (2.32%) (2.86%)
======== ======== ======== ======== ======== =======
Portfolio Turnover Rate............... 96.96% 160.09% 113.95% 121.60% 127.40% 57.64%
======== ======== ======== ======== ======== =======
Average Commission Rate Paid.......... $ .0711 $ .0680 $ .0690
======== ======== ========
</TABLE>
- -------------------
See footnotes on page 19.
<PAGE>
-19-
THE ALGER FUND
ALGER MIDCAP GROWTH PORTFOLIO
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
CLASS A (i)(vi) CLASS C (i)(v)
-------------------------------- --------------------------------
SIX MONTHS TEN MONTHS SIX MONTHS THREE MONTHS
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1998(vii) 1997 1998(vii) 1997
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 22.46 $ 18.92 $ 22.33 $ 22.49
-------- -------- ------- -------
Net investment income (loss).................. (.07)(ii) (.10) (.18)(ii) (.03)
Net realized and unrealized gain (loss)
on investments............................. 2.46 3.64 2.43 (.13)
-------- -------- ------- -------
Total from investment operations.............. 2.39 3.54 2.25 (.16)
Distributions from net realized gains......... (2.46) -- (2.46) --
-------- -------- ------- -------
Net asset value, end of period................ $ 22.39 $ 22.46 $ 22.12 $ 22.33
======== ======== ======= =======
Total Return (iii)............................ 13.1% 18.7% 12.5% (.7%)
======== ======== ======= =======
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted).......................... $ 14,137 $ 5,436 $ 670 $ 84
======== ======== ======= =======
Ratio of expenses to average
net assets............................... 1.37% 1.40% 2.12% 1.97%
======== ======== ======= =======
Ratio of net investment income (loss)
to average net assets.................... (.72%) (.83%) (1.38%) (1.55%)
======== ======== ======= =======
Portfolio Turnover Rate..................... 96.96% 160.09% 96.96% 160.09%
======== ======== ======= =======
Average Commission Rate Paid................ $ .0711 $ .0680 $ .0711 $ .0680
======== ======== ======= =======
</TABLE>
(i) Ratios have been annualized; total return has not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
(iii)Does not reflect the effect of any sales charges.
(iv) Represents expense reimbursements made pursuant to applicable state
expense limits.
(v) Initially offered August 1, 1997.
(vi) Initially offered January 1, 1997.
(vii)Unaudited.
<PAGE>
-20-
THE ALGER FUND
ALGER CAPITAL APPRECIATION PORTFOLIO
SCHEDULE OF INVESTMENTS (Unaudited)
April 30, 1998
Common Stocks--89.9% Shares Value
------ ------------
APPAREL--1.0%
Brylane Inc.* ................................... 48,700 $ 2,861,125
------------
BIO-TECHNOLOGY--.9%
INCYTE Pharmaceuticals, Inc.* ................... 55,000 2,475,000
------------
BROADCASTING--1.6%
CBS Corp. ....................................... 123,600 4,403,250
------------
BUILDING &
CONSTRUCTION--1.0%
Masco Corp. ..................................... 50,000 2,900,000
------------
BUSINESS SERVICES--1.9%
Cognizant Corp. ................................. 101,700 5,231,245
------------
COMMUNICATIONS--6.5%
America Online Inc.* ............................ 92,600 7,408,000
Clear Channel
Communications, Inc.* ......................... 14,000 1,319,500
Jacor Communications Inc.* ...................... 48,000 2,730,000
Outdoor Systems, Inc.* .......................... 50,000 1,587,500
WorldCom Inc.* .................................. 113,700 4,864,200
------------
17,909,200
------------
COMMUNICATION
EQUIPMENT--5.4%
Ascend Communications, Inc.* .................... 83,000 3,615,729
Cisco Systems, Inc.* ............................ 102,000 7,471,500
Tellabs, Inc.* .................................. 54,400 3,855,600
------------
14,942,829
------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--1.0%
International Business Machines Corp. ........... 23,900 2,769,412
------------
COMPUTER SERVICES--1.5%
Network Associates Inc.* ........................ 60,000 4,110,000
------------
COMPUTER SOFTWARE--7.4%
Compuware Corp.* ................................ 110,000 5,376,250
HBO & Company ................................... 49,800 2,978,687
Microsoft Corporation* .......................... 96,500 8,697,063
Saville Systems PLC ADR* ........................ 70,000 3,491,250
------------
20,543,250
------------
CONGLOMERATE--1.9%
Tyco International Ltd. ......................... 97,434 5,310,152
------------
DRUG DISTRIBUTION--3.6%
AmeriSource Health Corp Cl. A* .................. 50,000 2,725,000
Bergen Brunswig Corp. Cl. A ..................... 32,600 1,479,225
McKesson Corp. .................................. 83,700 5,916,585
------------
10,120,810
------------
ENERGRY & ENERGY
SERVICES--.8%
AES Corp.* ...................................... 40,000 2,207,520
------------
FINANCIAL SERVICES--9.6%
BankAmerica Corp. ............................... 45,900 3,901,500
Bank of New York Inc. ........................... 110,000 6,496,930
Chase Manhattan Corp. ........................... 10,600 1,468,768
Federal Home Loan Mortgage
Corporation ................................... 59,500 2,755,624
Kansas City Southern
Industries, Inc. .............................. 92,500 4,179,890
Morgan Stanley Dean Witter & Co. ................ 36,180 2,853,698
NationsBank Corp. ............................... 34,900 2,643,675
State Street Corp. .............................. 33,800 2,416,700
------------
26,716,785
------------
FOODS & BEVERAGES--1.0%
Earthgrains Company ............................. 61,500 2,875,125
------------
FOOD CHAINS--2.7%
Fred Meyer, Inc.* ............................... 30,000 1,346,250
Kroger Co.* ..................................... 65,900 2,759,562
Safeway Inc.* ................................... 89,400 3,419,550
------------
7,525,362
------------
INSURANCE--5.4%
American International Group, Inc. .............. 27,100 3,565,357
Executive Risk Inc. ............................. 25,300 1,687,206
MGIC Investment Corp. ........................... 25,700 1,619,100
Travelers Group Inc. ............................ 89,100 5,451,850
Vesta Insurance Group Inc. ...................... 48,600 2,751,975
------------
15,075,488
------------
LEISURE &
ENTERTAINMENT--2.3%
Carnival Corporation Cl. A ...................... 40,000 2,782,520
International Game Technology ................... 41,100 1,143,114
Premier Parks Inc.* ............................. 42,000 2,336,250
------------
6,261,884
------------
PHARMACEUTICALS--12.6%
Bristol Myers Squibb Co. ........................ 57,300 6,066,638
Elan Corp PLC-ADR* .............................. 84,400 5,243,350
Forest Laboratories, Inc.* ...................... 114,200 4,132,670
Pfizer Inc. ..................................... 74,200 8,444,925
Schering-Plough Corporation ..................... 76,500 6,129,563
Warner-Lambert Co. .............................. 26,300 4,975,644
------------
34,992,790
------------
POLLUTION CONTROL--3.5%
USA Waste Services, Inc.* ....................... 200,100 9,817,506
------------
<PAGE>
-21-
THE ALGER FUND
ALGER CAPITAL APPRECIATION PORTFOLIO
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
April 30, 1998
COMMON STOCKS--(CONT.) SHARES VALUE
------ ------------
RETAILING--13.7%
Bed Bath & Beyond Inc.* ......................... 35,000 $ 1,723,750
CVS Corp. ....................................... 67,000 4,941,250
Home Depot, Inc. ................................ 133,850 9,319,306
Kmart Corp.* .................................... 203,300 3,545,145
Michaels Stores Inc.* ........................... 78,600 2,377,650
Rite Aid Corp. .................................. 147,800 4,748,075
Staples Inc.* ................................... 190,650 4,706,767
Wal-Mart Stores Inc. ............................ 134,500 6,800,724
------------
38,162,667
------------
SEMICONDUCTORS--2.1%
Intel Corp. ..................................... 44,600 3,604,260
Micron Technology Inc.* ......................... 68,900 2,140,241
------------
5,744,501
------------
TRANSPORTATION--2.5%
AMR Corp.* ...................................... 28,100 4,281,738
SkyWest Inc. .................................... 66,000 2,673,000
------------
6,954,738
------------
Total Common Stocks
(Cost $202,686,869) ........................... 249,910,639
------------
Preferred Stock--1.0%
COMMUNICATION EQUIPMENT
Nokia Corporation, ADR
(Cost $2,069,672) ............................. 43,000 $ 2,875,625
------------
SHORT-TERM CORPORATE PRINCIPAL
NOTES--9.5% AMOUNT
---------
Quincy Capital Corporation.,
5.55%, 5/15/98 ................................ $ 9,000,000 8,980,575
Three Rivers Funding Corp.,
5.55%, 5/13/98 (a) ............................ 8,500,000 8,484,180
Trident Capital Finance Inc.,
5.54%, 5/15/98 (a) ............................ 9,000,000 8,980,610
------------
Total Short-Term Corporate Notes
(Cost 26,445,365) ............................. 26,445,365
------------
Total Investments
(Cost 231,201,906) (b) ........................ 100.4% 279,231,629
Liabilities in Excess of Other Assets ........... (.4) (1,182,657)
----- ------------
Net Assets ...................................... 100.0% $278,048,972
===== ============
* Non-income producing security.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity only to qualified institutional buyers.
(b) At April 30, 1998, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $231,201,906, amounted to
$48,029,723 which consisted of aggregate gross unrealized appreciation of
$49,270,331 and aggregate gross unrealized depreciation of $1,240,608.
See Notes to Financial Statements.
<PAGE>
-22-
THE ALGER FUND
ALGER CAPITAL APPRECIATION PORTFOLIO (i)
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED OCTOBER 31,
ENDED ----------------------------------------------------------
APRIL 30,
1998(vii)(viii) 1997 1996 1995 1994
--------------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............ $26.00 $21.62 $18.62 $11.11 $10.00
---------- ---------- ---------- -------- --------
Net investment income (loss) .................... (.14) (.33) (.34)(ii) (0.47)(ii) (0.47)
Net realized and unrealized gain (loss)
on investments ............................... 3.39 4.85 3.88 7.98 1.58
---------- ---------- ---------- -------- --------
Total from investment operations ................ 3.25 4.52 3.54 7.51 1.11
Distributions from net realized gains ........... (1.61) (.14) (.54) -- --
---------- ---------- ---------- -------- --------
Net asset value, end of period .................. $27.64 $26.00 $21.62 $18.62 $11.11
========== ========== ========== ======== ========
Total Return (iii) .............................. 13.8% 21.0% 19.5% 67.6% 11.1%
========== ========== ========== ======== ========
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) ..... $246,968 $212,895 $150,258 $33,640 $2,369
========== ========== ========== ======== ========
Ratio of expenses excluding interest
to average net assets ...................... 2.21% 2.27% 2.44% 3.26% 4.13%
========== ========== ========== ======== ========
Ratio of expenses including interest
to average net assets ...................... 2.28% 2.38% 2.46% 3.54% 5.53%
========== ========== ========== ======== ========
Decrease reflected in above expense ratios
due to expense reimbursements (iv) ......... -- -- -- -- .85%
========== ========== ========== ======== ========
Ratio of net investment income
(loss) to average net assets ............... (1.51%) (1.72%) (1.61%) (3.02%) (5.12%)
========== ========== ========== ======== ========
Portfolio Turnover Rate ....................... 95.93% 157.63% 162.37% 197.65% 231.99%
========== ========== ========== ======== ========
Average Commission Rate Paid .................. $.0708 $.0702 $.0647
========== ========== ========== ======== ========
Amount of debt outstanding at end of period ... -- -- $7,700,000 -- $651,000
========== ========== ========== ======== ========
Average amount of debt outstanding
during the period .......................... $2,656,354 $2,940,097 $239,966 $293,153 $406,864
========== ========== ========== ======== ========
Average daily number of portfolio shares
outstanding during the period .............. 9,536,041 7,739,199 4,852,286 543,270 191,676
========== ========== ========== ======== ========
Average amount of debt per share
during the period .......................... $0.28 $0.38 $0.05 $0.54 $2.12
========== ========== ========== ======== ========
</TABLE>
See footnotes on page 23.
<PAGE>
-23-
THE ALGER FUND
ALGER CAPITAL APPRECIATION PORTFOLIO (i)
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
CLASS A (vi)(vii) CLASS C (v)(vii)
------------------------ -------------------------
SIX MONTHS TEN MONTHS SIX MONTHS THREE MONTHS
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1998(viii) 1997 1998(viii) 1997
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.......... $26.17 $21.59 $26.00 $27.67
---------- ---------- ---------- ----------
Net investment income (loss).................. (.03) (.09) (.11) (.05)
Net realized and unrealized gain (loss)
on investments............................. 3.40 4.67 3.35 (1.62)
---------- ---------- ---------- ----------
Total from investment operations.............. 3.37 4.58 3.24 (1.67)
Distributions from net realized gains......... (1.61) -- (1.61) --
---------- ---------- ---------- ----------
Net asset value, end of period................ $27.93 $26.17 $27.63 $26.00
========== ========== ========== ==========
Total Return (iii)............................ 14.2% 21.2% 13.7% (6.0%)
========== ========== ========== ==========
Ratios and Supplemental Data:
Net assets, end of period (000's omitted)... $29,189 $15,572 $1,892 $631
========== ========== ========== ==========
Ratio of expenses excluding interest
to average net assets.................... 1.46% 1.45% 2.22% 2.18%
========== ========== ========== ==========
Ratio of expenses including interest
to average net assets.................... 1.53% 1.53% 2.29% (2.25)%
========== ========== ========== ==========
Ratio of net investment income (loss)
to average net assets.................... (.73%) (.85%) (1.55%) (1.80%)
========== ========== ========== ==========
Portfolio Turnover Rate..................... 95.93% 157.63% 95.93% 157.63%
========== ========== ========== ==========
Average Commission Rate Paid................ $.0708 $.0702 $.0708 $.0702
========== ========== ========== ==========
Amount of debt oustanding at end of period.. -- -- -- --
========== ========== ========== ==========
Average amount of debt oustanding
during the period........................ $2,656,354 $2,940,097 $2,656,354 $2,940,097
========== ========== ========== ==========
Average daily number of portfolio shares
outstanding during the period............ 9,536,041 7,739,199 9,536,041 7,739,199
========== ========== ========== ==========
Average amount of debt per share
during the period........................ $0.28 $0.38 $0.28 $0.38
========== ========== ========== ==========
</TABLE>
(i) Prior to March 27, 1995, the Alger Capital Appreciation Portfolio was the
Alger Leveraged AllCap Portfolio.
(ii) Amount was computed based on average shares outstanding during the year.
(iii) Does not reflect the effect of any sales charges.
(iv) Represents expense reimbursements made pursuant to applicable state
expense limits.
(v) Initially offered August 1, 1997.
(vi) Initially offered January 1, 1997.
(vii) Ratios have been annualized; total return has not been annualized.
(viii) Unaudited.
<PAGE>
-24-
THE ALGER FUND
ALGER MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (Unaudited)
April 30, 1998
SHORT-TERM CORPORATE PRINCIPAL
NOTES--97.9% AMOUNT VALUE
--------- ------------
BANKS--10.1%
Banque Generale
Du Luxembourg S.A.,
5.47%, 6/16/98 ................................ $ 8,000,000 $ 7,944,084
Corporacion Andina De Fomento,
5.51%, 6/25/98 ................................ 8,000,000 7,932,656
------------
15,876,740
------------
BROKERAGE--1.1%
Merrill Lynch & Co., Inc.,
5.51%, 5/7/98 ................................. 1,700,000 1,698,439
------------
CHEMICALS--4.1%
PHH Corporation,
5.53%, 5/7/98 ................................. 6,500,000 6,494,009
------------
COMMUNICATIONS--12.7%
Ameritech Corporation,
5.50%, 5/13/98 ................................ 6,000,000 5,989,000
Bell Atlantic Network Funding
Corporation,
5.49%, 5/22/98 ................................ 8,000,000 7,974,380
Telstra Corporation Limited,
5.50%, 5/22/98 ................................ 6,000,000 5,980,750
------------
19,944,130
------------
ELECTRONICS--2.4%
Avnet, Inc.,
5.51%, 5/15/98 ................................ 3,800,000 3,791,857
------------
ENERGY & ENERGY
SERVICES--12.1%
Georgia Power Company,
5.50%, 5/12/98 ................................ 1,000,000 998,320
Midamerican Energy Co.,
5.52%, 5/15/98 ................................ 6,000,000 5,987,120
New England Power Company,
5.50%, 5/7/98 ................................. 6,000,000 5,994,500
OGE Energy Corp.,
5.51%, 5/1/98 ................................. 6,000,000 6,000,000
------------
18,979,940
------------
ELECTRIC UTILITIES--1.7%
Potomac Electric Power Company,
5.50%, 5/4/98 ................................. 2,700,000 2,698,763
------------
FINANCE--10.0%
BCI Funding Corporation,
5.49%, 5/26/98 ................................ 8,000,000 7,969,500
Lexington Parker Capital Co. LLC.,
5.53%, 5/1/98(a) .............................. 1,700,000 1,700,000
USAA Capital Corporation,
5.52%, 5/5/98 ................................. 6,000,000 5,996,320
------------
15,665,820
------------
INSURANCE--8.8%
Safeco Credit Company, Incorporated,
5.53%, 7/23/98 ................................ 8,000,000 7,898,002
Sunamerica Life Insurance Company,
5.50%, 5/5/98 ................................. 6,000,000 5,996,333
------------
13,894,335
------------
LEASING--3.3%
Mitsubishi International Corporation,
5.51%, 5/6/98 ................................. 5,300,000 5,295,944
------------
MACHINERY &
EQUIPMENT--3.8%
Cooperative Association of Tractor
Dealers Inc.,
5.53%, 5/8/98 ................................. 6,000,000 5,993,548
------------
MORTGAGE COMPANIES--7.6%
Countrywide Home Loans, Inc.,
5.57%, 5/7/98 ................................. 6,000,000 5,994,430
Reliastar Mortgage Corporation,
5.52%, 5/15/98 ................................ 6,000,000 5,987,120
------------
11,981,550
------------
OIL--3.8%
Petrofina Delaware, Inc.,
5.46%, 5/7/98 ................................. 6,000,000 5,994,540
------------
REAL ESTATE--3.8%
Northern Rock PLC,
5.50%, 5/7/98 ................................. 6,000,000 5,994,500
------------
<PAGE>
-25-
THE ALGER FUND
ALGER MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
April 30, 1998
SHORT-TERM CORPORATE PRINCIPAL
NOTES--(CONT.) AMOUNT VALUE
--------- ------------
UTILITIES--12.6%
Consolidated Natural Gas Company,
5.52%, 5/11/98 ................................ $ 6,000,000 $ 5,990,800
GTE Corporation,
5.51%, 5/11/98 ................................ 6,000,000 5,990,817
Transportadora De Gas Del Sur S.A.,
5.52%, 7/23/98 ................................ 8,000,000 7,898,187
------------
19,879,804
------------
Total Short-Term Corporate Notes
(Cost $154,183,919) ........................... 154,183,919
------------
Certificates of Deposit--3.2%
Banco Espirito Santo E Commercial,
5.51%, 5/21/98
(Cost $4,984,694) ............................. 5,000,000 4,984,694
------------
Total Investments
(Cost $159,168,613)(b) ........................ 101.1% 159,168,613
Liabilities In Excess of Other Assets ........... (1.1) (1,738,785)
----- ------------
Net Assets ...................................... 100.0% $157,429,828
===== ============
(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 April 30,1998, the cost of investments for federal income tax purposes
was the same as the cost for financial reporting purposes.
See Notes to Financial Statements.
<PAGE>
-26-
THE ALGER FUND
ALGER MONEY MARKET PORTFOLIO
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -------------------------------------------------------
1998(i) 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
-------- -------- -------- -------- -------- --------
Net investment income................... .0236 .0479 .0521 .0573 .0374 .0304
Dividends from net investment income ... (.0236) (.0479) (.0521) (.0573) (.0374) (.0304)
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======== ======== ======== ======== ======== ========
Total Return............................ 2.4% 4.9% 5.3% 5.9% 3.8% 3.1%
======== ======== ======== ======== ======== ========
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted)...................... $157,430 $179,407 $285,702 $185,822 $163,170 $126,567
======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets. .80% .81% .41% .29% .27% .41%
======== ======== ======== ======== ======== ========
Decrease reflected in above
expense ratios due to
expense reimbursements
and management fee waivers........... -- -- .38% .50% .50% .50%
======== ======== ======== ======== ======== ========
Ratio of net investment income
to average net assets................ 4.88% 4.76% 5.18% 5.73% 3.78% 3.04%
======== ======== ======== ======== ======== ========
(i) Unaudited. Ratios have been annualized; total return has not been annualized.
</TABLE>
See Notes to Financial Statements.
<PAGE>
-27-
THE ALGER FUND
STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except per share amounts) (Unaudited)
April 30, 1998
<TABLE>
<CAPTION>
SMALL CAPITAL
CAPITAL- MIDCAP APPRE- MONEY
GROWTH IZATION BALANCED GROWTH CIATION MARKET
ASSETS: PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investments in securities, at value
(identified cost*)-see accompany-
ing schedules of investments ......... $429,153 $636,271 $17,205 $205,081 $279,232 $159,169
Cash .................................... 47 205 54 47 86 1,239
Receivable for investment securities sold 1,698 4,580 87 1,225 673 --
Receivable for shares of beneficial
interest sold......................... 1,016 5,073 49 482 1,272 1,190
Dividends and interest
receivable............................ 203 92 111 40 120 --
Prepaid expenses......................... 29 36 14 14 39 15
-------- -------- ------- -------- -------- --------
Total Assets....................... 432,146 646,257 17,520 206,889 281,422 161,613
-------- -------- ------- -------- -------- --------
LIABILITIES:
Payable for investment
securities purchased.................. 1,063 9,488 120 5,602 2,048 --
Payable for shares of beneficial
interest redeemed..................... 726 2,679 297 221 607 3,832
Interest payable......................... -- -- -- -- 79 --
Accrued investment management fees....... 266 430 11 131 189 75
Accrued distribution fees ............... 207 355 10 116 152 --
Accrued shareholder servicing fees....... 89 126 4 41 56 --
Dividends payable-Note 2(c).............. -- -- -- -- -- 27
Accrued expenses......................... 377 538 32 157 242 249
-------- -------- ------- -------- -------- --------
Total Liabilities.................. 2,728 13,616 474 6,268 3,373 4,183
-------- -------- ------- -------- -------- --------
NET ASSETS .............................. $429,418 $632,641 $17,046 $200,621 $278,049 $157,430
======== ======== ======= ======== ======== ========
Net Assets Consist of:
Paid-in capital....................... $309,065 $476,105 $13,657 $155,260 $213,912 $157,504
Undistributed net investment
income (accumulated loss).......... (9,305) (39,500) (48) (5,734) (6,923) --
Undistributed net realized
gain (accumulated loss)............ 36,168 72,377 713 19,954 23,030 (74)
Net unrealized appreciation........... 93,490 123,659 2,724 31,141 48,030 --
-------- -------- ------- -------- -------- --------
NET ASSETS .............................. $429,418 $632,641 $17,046 $200,621 $278,049 $157,430
======== ======== ======= ======== ======== ========
Class A
Net Asset Value Per Share............. $11.82 $10.57 $16.11 $22.39 $27.93 --
======== ======== ======= ======== ======== ========
Offering Price Per Share.............. $12.41 $11.10 $16.91 $23.51 $29.32 --
======== ======== ======= ======== ======== ========
Class B
Net Asset Value and Offering Price
Per Share ......................... $11.68 $10.45 $15.98 $22.15 $27.64 $1.00
======== ======== ======= ======== ======== ========
Class C
Net Asset Value and Offering Price
Per Share ......................... $11.68 $10.45 $16.01 $22.12 $27.63 --
======== ======== ======= ======== ======== ========
Shares of beneficial interest
outstanding-Note 6
Class A............................... 8,046 4,977 42 631 1,045 --
======== ======== ======= ======== ======== ========
Class B............................... 28,498 55,237 1,015 8,390 8,937 157,504
======== ======== ======= ======== ======== ========
Class C............................... 118 256 9 30 68 --
======== ======== ======= ======== ======== ========
*Identified cost......................... $335,663 $512,612 $14,481 $173,940 $231,202 $159,169
======== ======== ======= ======== ======== ========
</TABLE>
See Notes to Financial Statements.
<PAGE>
-28-
THE ALGER FUND
STATEMENTS OF OPERATIONS (in thousands) (Unaudited)
For the six months ended April 30, 1998
<TABLE>
<CAPTION>
SMALL CAPITAL
CAPITAL- MIDCAP APPRE- MONEY
GROWTH IZATION BALANCED GROWTH CIATION MARKET
INVESTMENT INCOME: PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends ............................. $1,262 $769 $37 $307 $705 $5,223
Interest .............................. 647 790 182 263 243 --
------- ------- ------ ------- ------- ------
Total Income........................... 1,909 1,559 219 570 948 5,223
Expenses:
Management fees-Note 3(a).............. 1,432 2,476 57 716 1,038 460
Distribution fees-Note 3(b):
Class B.............................. 1,140 2,064 55 640 836 --
Class C.............................. 3 4 -- 2 5 --
Shareholder servicing fees-Note 3(f)... 477 728 19 224 305 --
Interest on line of credit utilized
-Note 5 ............................. -- -- -- -- 87 --
Custodian fees......................... 30 47 5 18 22 22
Transfer agent fees and
expenses-Note 3(e)................... 372 603 32 208 349 205
Professional fees...................... 6 6 8 8 8 8
Trustees' fees......................... 3 3 3 3 3 3
Registration fees...................... 48 41 19 37 39 33
Miscellaneous.......................... 41 68 3 22 21 6
------- ------- ------ ------- ------- ------
Total Expenses......................... 3,552 6,040 201 1,878 2,713 737
------- ------- ------ ------- ------- ------
NET INVESTMENT
INCOME (LOSS).......................... (1,643) (4,481) 18 (1,308) (1,765) 4,486
------- ------- ------ ------- ------- ------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments......... 32,510 59,983 711 16,750 18,075 6
Net change in unrealized appreciation
(depreciation) on investments.......... 32,236 (6,098) 1,154 6,981 17,827 --
------- ------- ------ ------- ------- ------
Net realized and unrealized
gain (loss) on investments............. 64,746 53,885 1,865 23,731 35,902 6
------- ------- ------ ------- ------- ------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS.............. $63,103 $49,404 $1,883 $22,423 $34,137 $4,492
======= ======= ====== ======= ======= ======
</TABLE>
See Notes to Financial Statements.
<PAGE>
-29-
THE ALGER FUND
ALGER CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF CASH FLOWS (in thousands) (Unaudited)
For the six months ended April 30, 1998
<TABLE>
<CAPTION>
Increase (decrease) in cash:
Cash flows from operating activities:
<S> <C>
Dividends received ........................................................ $629
Interest received ......................................................... 243
Interest paid ............................................................. (95)
Operating expenses paid ................................................... (2,527)
Purchase of investment securities ......................................... (240,345)
Purchase of short-term securities, net .................................... (15,855)
Proceeds from disposition of investment securities ........................ 237,199
Other ..................................................................... (3)
--------
Net cash used in operating activities ................................. (20,754)
--------
Cash flows from financing activities:
Dividends paid ............................................................ (14,120)
Proceeds from shares sold and dividends reinvested ........................ 434,004
Payments on shares redeemed ............................................... (399,103)
--------
Net cash provided by financing activities ............................. 20,781
--------
Net increase in cash .......................................................... 27
Cash--beginning of period ..................................................... 59
--------
Cash--end of period ........................................................... $86
========
Reconciliation of net increase in net assets to net cash used in operating
activities:
Net increase in net assets resulting from operations ...................... $34,137
Increase in investments ................................................... (15,261)
Increase in interest and dividends receivable ............................. (76)
Decrease in receivable for investment securities sold ..................... 6,840
Decrease in payable for investment securities purchased ................... (10,581)
Net realized gain ......................................................... (18,075)
Net increase in unrealized appreciation ................................... (17,827)
Increase in accrued expenses and other liabilities ........................ 91
Net increase in other assets .............................................. (2)
--------
Net cash used in operating activities ................................. $(20,754)
========
</TABLE>
See Notes to Financial Statements.
<PAGE>
-30-
THE ALGER FUND
STATEMENTS OF CHANGES IN NET ASSETS (in thousands) (Unaudited)
For the six months ended April 30, 1998
<TABLE>
<CAPTION>
SMALL CAPITAL
CAPITAL- MIDCAP APPRE- MONEY
GROWTH IZATION BALANCED GROWTH CIATION MARKET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss)............. $ (1,643) $ (4,481) $ 18 $ (1,308) $ (1,765) $ 4,486
Net realized gain on investments......... 32,510 59,983 711 16,750 18,075 6
Net change in unrealized appreciation
(depreciation) on investments.......... 32,236 (6,098) 1,154 6,981 17,827 --
-------- -------- ------- -------- -------- --------
Net increase in net assets
resulting from operations.......... 63,103 49,404 1,883 22,423 34,137 4,492
-------- -------- ------- -------- -------- --------
Dividends and distributions to
shareholders from:
Net investment income
Class A.............................. -- -- (2) -- -- --
Class B.............................. -- -- (9) -- -- (4,486)
Net realized gains
Class A.............................. (10,089) (1,188) (64) (574) (880) --
Class B.............................. (36,412) (27,136) (1,780) (18,402) (13,178) --
Class C.............................. (54) (25) (7) (19) (62) --
-------- -------- ------- -------- -------- --------
Total distributions to shareholders...... (46,555) (28,349) (1,862) (18,995) (14,120) (4,486)
-------- -------- ------- -------- -------- --------
Increase (Decrease) from shares of
beneficial interest transactions:
Class A.............................. 38,513 23,935 219 7,754 10,794 --
Class B.............................. 15,768 (21,432) 3,551 16,897 16,986 (21,983)
Class C.............................. 1,099 2,098 95 547 1,154 --
-------- -------- ------- -------- -------- --------
Net increase (decrease) from shares of
beneficial interest transactions
-Note 6........... .................... 55,380 4,601 3,865 25,198 28,934 (21,983)
-------- -------- ------- -------- -------- --------
Total increase (decrease).......... 71,928 25,656 3,886 28,626 48,951 (21,977)
Net Assets:
Beginning of period.................... 357,490 606,985 13,160 171,995 229,098 179,407
-------- -------- ------- -------- -------- --------
End of period.......................... $429,418 $632,641 $17,046 $200,621 $278,049 $157,430
======== ======== ======= ======== ======== ========
Undistributed net investment
income (accumulated loss).............. $ (9,305) $(39,500) $ (48) $ (5,734) $ (6,923) --
======== ======== ======= ======== ======== ========
</TABLE>
See Notes to Financial Statements.
<PAGE>
-31-
THE ALGER FUND
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
For the year ended October 31, 1997
<TABLE>
<CAPTION>
SMALL CAPITAL
CAPITAL- MIDCAP APPRE- MONEY
GROWTH IZATION BALANCED GROWTH CIATION MARKET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss)............ $ (3,399) $ (9,189) $ 6 $ (2,412) $ (3,154) $ 10,506
Net realized gain (loss)
on investments........................ 48,794 28,698 1,856 21,535 17,357 (16)
Net change in unrealized appreciation
on investments........................ 21,432 42,118 316 10,912 18,233 --
-------- -------- ------- -------- -------- --------
Net increase in net assets
resulting from operations........ 66,827 61,627 2,178 30,035 32,436 10,490
-------- -------- ------- -------- -------- --------
Dividends and distributions to
shareholders-Class B:
Net investment income................. -- -- (50) -- -- (10,506)
Net realized gains.................... (8,740) (93,115) (288) (3,458) (970) --
-------- -------- ------- -------- -------- --------
Total distributions to shareholders..... (8,740) (93,115) (338) (3,458) (970) (10,506)
-------- -------- ------- -------- -------- --------
Additional paid-in capital.............. -- 578 -- -- -- --
-------- -------- ------- -------- -------- --------
Increase (Decrease) from shares of
beneficial interest transactions:
Class A............................... 45,431 23,494 417 4,665 14,238 --
Class B............................... (12,447) 60,181 (2,639) 14,976 32,464 (106,279)
Class C............................... 212 348 50 91 672 --
-------- -------- ------- -------- -------- --------
Net increase (decrease) from shares of
beneficial interest transactions
-Note 6............................... 33,196 84,023 (2,172) 19,732 47,374 (106,279)
-------- -------- ------- -------- -------- --------
Total increase (decrease)........ 91,283 53,113 (332) 46,309 78,840 (106,295)
Net Assets:
Beginning of year..................... 266,207 553,872 13,492 125,686 150,258 285,702
-------- -------- ------- -------- -------- --------
End of year........................... $357,490 $606,985 $13,160 $171,995 $229,098 $179,407
======== ======== ======= ======== ======== ========
Undistributed net investment
income (accumulated loss).......... $ (7,662) $(35,019) $ (55) $ (4,426) $ (5,158) --
======== ======== ======= ======== ======== ========
</TABLE>
See Notes to Financial Statements.
<PAGE>
-32-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1- General:
The Alger Fund (the "Fund") is a diversified, open-end registered
investment company organized as an unincorporated business trust under the laws
of the Commonwealth of Massachusetts. The Fund operates as a series company
currently issuing an unlimited number of shares of beneficial interest in six
portfolios--Growth Portfolio, Small Capitalization Portfolio, Balanced
Portfolio, MidCap Growth Portfolio, Capital Appreciation Portfolio and Money
Market Portfolio (the "Portfolios"). The Growth Portfolio, Small Capitalization
Portfolio, MidCap Growth Portfolio and Capital Appreciation 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, other than the Money Market Portfolio, offers Class A,
Class B and Class C shares. Class A and Class C shares were first offered on
January 1, 1997 and August 1, 1997, respectively. Class A shares are generally
subject to an initial sales charge while Class B and Class C shares are
generally subject to a deferred sales charge. Class B and Class C shares held
for eight and twelve years, respectively, after the end of the calendar month in
which the order to purchase was accepted, convert to Class A shares. The
conversion is completed without the imposition of any sales charges or other
fees. Each class has identical rights to assets and earnings except that only
Class B and Class C shares have plans of distribution and bear the related
expenses.
NOTE 2- Significant Accounting Policies:
(a) INVESTMENT VALUATION: Investments of the Portfolios, other than the Money
Market Portfolio, are valued on each day the New York Stock Exchange (the
"NYSE") is open as of the close of the NYSE (normally 4:00 p.m. Eastern time).
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.
The investments of the Money Market Portfolio, and short-term securities
held by the other Portfolios having a remaining maturity of sixty days or less,
are valued at amortized cost which approximates market value.
(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.
(c) DIVIDENDS TO SHAREHOLDERS: Dividends payable to shareholders are recorded on
the ex-dividend date.
The Money Market Portfolio declares dividends daily from net investment
income; such dividends are paid monthly. The dividends from net investment
income of the other Portfolios are declared and paid annually.
With respect to all Portfolios, dividends from net realized gains, offset
by any loss carryforward, are declared and paid annually after the end of the
fiscal year in which earned. Each class is treated separately in determining the
amounts of dividends of net investment income and distributions of capital gains
payable to holders of its shares.
(d) 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 taxable income to its share-
<PAGE>
-33-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
holders. 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, 1997, the net capital
loss carryforwards of the Money Market Portfolio which may be used to offset
future net realized gains were approximately $78,000, and expire between 1998
and 2005.
(e) 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. Income, realized and
unrealized gains and losses, and expenses of each Portfolio, other than the
Money Market 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 B and Class C shares.
(f) 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:
Growth Portfolio............................ .75%
Small Capitalization Portfolio.............. .85
Balanced Portfolio.......................... .75
MidCap Growth Portfolio..................... .80
Capital Appreciation Portfolio.............. .85
Money Market Portfolio...................... .50
(b) DISTRIBUTION FEES: Class B Shares--The Fund has adopted an Amended and
Restated Plan of Distribution (the "Plan") pursuant to which Class B shares of
each Portfolio, other than the Money Market Portfolio, reimburse Fred Alger &
Company, Incorporated, the Fund's distributor (the "Distributor"), for costs and
expenses incurred by the Distributor in connection with advertising and
marketing Class B shares of the Fund's Portfolios. The distribution fee is not
to exceed an annual rate of .75% of the respective average daily net assets of
the Class B shares of the designated Portfolios. If in any month, the costs
incurred by the Distributor relating to the Class B shares are in excess of the
distribution fees charged to the Portfolios, the excess may be carried forward,
with interest, and sought to be reimbursed in future periods. As of April 30,
1998, such excess carried forward was approximately $7,660,000, $16,241,000,
$216,000, $3,276,000 and $2,044,000 for Class B shares of the Growth Portfolio,
the Small Capitalization Portfolio, the Balanced Portfolio, the MidCap Growth
Portfolio, and the Capital Appreciation Portfolio, respectively. Contingent
deferred sales charges imposed on redemptions of Class B shares will reduce the
amount of distribution expenses for which reimbursement may be sought. See Note
3(c) below.
Class C Shares--The Fund has adopted a Distribution Plan pursuant to which Class
C shares of each Portfolio, other than the Money Market Portfolio, pay the
Distributor a fee at the annual rate of .75% of the respective average daily net
assets of the Class C shares of the designated Portfolios to compensate the
Distributor for its activities and expenses in distributing the Class C shares.
The fees charged may be more or less than the expenses incurred by the
Distributor.
The Distributor has entered into arrangements with broker/dealers for the sale
of Class B shares and Class C shares of certain of the Fund's Portfolios. In
connec-
<PAGE>
-34-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
tion with these arrangements, the Distributor has agreed to make payments to
these broker/dealers with respect to the Class B shares and Class C shares sold.
(c) SALES CHARGES: The purchases and sales of shares of the Portfolios, other
than the Money Market Portfolio, may be subject to initial sales charges or
contingent deferred sales charges. For the six months ended April 30, 1998, the
initial sales charges and contingent deferred sales charges retained by the
Distributor were approximately $31,500 and $1,727,734, respectively. The
contingent deferred sales charges are used by the Distributor to offset
distribution expenses previously incurred. Sales charges do not represent
expenses of the Fund.
(d) BROKERAGE COMMISSIONS: During the six months ended April 30, 1998, the
Growth Portfolio, the Small Capitalization Portfolio, the Balanced Portfolio,
the MidCap Growth Portfolio and the Capital Appreciation Portfolio paid the
Distributor commissions of $528,317, $988,889, $13,401, $378,059 and $448,165,
respectively, in connection with securities transactions.
(e) TRANSFER AGENT FEES AND EXPENSES: Alger Shareholder Services, Inc. ("Alger
Services"), an affiliate of Alger Management, serves as transfer agent for the
Fund. During the six months ended April 30, 1998, the Growth Portfolio, the
Small Capitalization Portfolio, the Balanced Portfolio, the MidCap Growth
Portfolio, the Capital Appreciation Portfolio and the Money Market Portfolio
incurred fees of $273,060, $435,150, $26,665, $168,370, $293,660 and $153,375,
respectively, for services provided by Alger Services. In addition, during the
six months ended April 30, 1998, the Growth Portfolio, the Small Capitalization
Portfolio, the Balanced Portfolio, the MidCap Growth Portfolio, the Capital
Appreciation Portfolio and the Money Market Portfolio reimbursed Alger Services
$98,980, $167,640, $5,120, $39,660, $54,880 and $51,310, respectively, for
transfer agent related expenses paid by Alger Services on behalf of the
Portfolios.
(f) SHAREHOLDER SERVICING FEES: The Fund has entered into a shareholder
servicing agreement with the Distributor whereby the Distributor provides each
Portfolio, other than the Money Market Portfolio, with ongoing servicing of
shareholder accounts. As compensation for such services, each designated
Portfolio pays the Distributor a monthly fee at an annual rate equal to .25% of
each Portfolio's average daily net assets.
(g) Certain trustees and officers of the Fund are directors and officers of
Alger Management, the Distributor and Alger Services.
NOTE 4- Securities Transactions:
The following summarizes the securities transactions by the Fund, other
than short-term securities, for the six months ended April 30, 1998 (in
thousands):
PURCHASES SALES
--------- -----
Growth Portfolio......... $242,937 $221,965
Small Capitalization
Portfolio.............. 491,319 536,412
Balanced Portfolio....... 8,545 4,990
MidCap Growth
Portfolio.............. 169,633 169,553
Capital Appreciation
Portfolio.............. 229,764 230,364
NOTE 5- Lines of Credit:
The Capital Appreciation Portfolio has lines of credit with banks whereby
it may borrow up to 1/3 of the value of its assets, as defined, up to a maximum
of $45,000,000. Such borrowings have variable interest rates and are payable on
demand. For the six months ended April 30, 1998, the Portfolio had borrowings
which averaged $2,656,354 at a weighted average interest rate of 6.48%.
<PAGE>
-35-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
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, other
than the Money Market Portfolio, is divided into three separate classes. During
the six months ended April 30, 1998, transactions of shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ------------ --------------
Alger Growth Portfolio
Class A:*
<S> <C> <C> <C> <C>
Shares sold..................... 4,747,559 $ 53,761,355 5,044,972 $ 51,947,397
Shares converted from Class B... 209,886 2,345,418 2,227,219 22,695,978
Dividends reinvested............ 1,012,458 9,861,339 -- --
Shares redeemed................. (2,439,729) (27,455,302) (2,756,124) (29,211,908)
----------- ------------ ------------ --------------
Net increase.................... 3,530,174 $ 38,512,810 4,516,067 $ 45,431,467
=========== ============ ============ ==============
Class B:
Shares sold..................... 9,721,572 $107,407,728 19,936,199 $ 209,548,326
Dividends reinvested............ 3,613,386 34,869,174 887,671 8,477,253
Shares converted to Class A..... (212,025) (2,345,418) (2,233,829) (22,695,978)
Shares redeemed................. (11,135,348) (124,163,032) (20,141,745) (207,776,866)
----------- ------------ ------------ --------------
Net increase (decrease)......... 1,987,585 $ 15,768,452 (1,551,704) $ (12,447,265)
=========== ============ ============ ==============
Class C:**
Shares sold..................... 114,903 $ 1,245,681 22,512 $ 273,258
Dividends reinvested............ 5,128 49,487 -- --
Shares redeemed................. (19,569) (196,387) (5,189) (61,432)
----------- ------------ ------------ --------------
Net increase.................... 100,462 $ 1,098,781 17,323 $ 211,826
=========== ============ ============ ==============
Alger Small Capitalization Portfolio
Class A:*
Shares sold..................... 20,863,924 $210,601,898 7,681,584 $ 75,848,391
Shares converted from Class B... 671,401 6,741,262 1,829,173 17,139,109
Dividends reinvested............ 120,213 1,097,543 -- --
Shares redeemed................. (19,190,049) (194,506,118) (6,999,709) (69,493,610)
----------- ------------ ------------ --------------
Net increase.................... 2,465,489 $ 23,934,585 2,511,048 $ 23,493,890
=========== ============ ============ ==============
Class B:
Shares sold..................... 66,769,928 $661,910,315 106,288,557 $1,038,455,771
Dividends reinvested............ 2,899,072 26,265,587 9,868,408 89,901,198
Shares converted to Class A..... (678,153) (6,741,262) (1,835,958) (17,139,109)
Shares redeemed................. (70,202,061) (702,866,338) (108,877,400) (1,051,036,361)
----------- ------------ ------------ --------------
Net increase (decrease)......... (1,211,214) $(21,431,698) 5,443,607 $ 60,181,499
=========== ============ ============ ==============
Class C:**
Shares sold..................... 913,359 $ 9,086,237 42,583 $ 451,031
Dividends reinvested............ 2,485 22,515 -- --
Shares redeemed................. (692,603) (7,010,566) (9,782) (102,933)
----------- ------------ ------------ --------------
Net increase.................... 223,241 $ 2,098,186 32,801 $ 348,098
=========== ============ ============ ==============
</TABLE>
<PAGE>
-36-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Alger Balanced Portfolio
Class A:*
Shares sold..................... 31,842 $ 502,952 19,407 $ 305,198
Shares converted from Class B... 4,956 72,214 13,383 192,101
Dividends reinvested............ 4,622 65,126 -- --
Shares redeemed................. (26,842) (421,288) (5,110) (80,451)
---------- ------------ ---------- ------------
Net increase.................... 14,578 $ 219,004 27,680 $ 416,848
========== ============ ========== ============
Class B:
Shares sold..................... 283,451 $ 4,268,708 626,022 $ 9,511,649
Dividends reinvested............ 122,289 1,714,490 23,152 328,056
Shares converted to Class A..... (4,985) (72,214) (13,405) (192,101)
Shares redeemed................. (153,941) (2,359,724) (817,576) (12,286,748)
---------- ------------ ---------- ------------
Net increase (decrease)......... 246,814 $ 3,551,260 (181,807) $ (2,639,144)
========== ============ ========== ============
Class C:**
Shares sold..................... 8,267 $ 126,196 3,179 $ 54,326
Dividends reinvested............ 473 6,646 -- --
Shares redeemed................. (2,472) (38,059) (259) (4,321)
---------- ------------ ---------- ------------
Net increase.................... 6,268 $ 94,783 2,920 $ 50,005
========== ============ ========== ============
Alger MidCapGrowth Portfolio
Class A:*
Shares sold..................... 3,728,309 $ 79,986,763 1,533,288 $ 31,807,270
Shares converted from Class B... 18,944 397,365 148,365 2,732,385
Dividends reinvested............ 28,826 526,934 -- --
Shares redeemed................. (3,386,782) (73,157,220) (1,439,653) (29,874,723)
---------- ------------ ---------- ------------
Net increase.................... 389,297 $ 7,753,842 242,000 $ 4,664,932
========== ============ ========== ============
Class B:
Shares sold..................... 5,056,783 $107,443,359 6,111,087 $124,416,537
Dividends reinvested............ 952,240 17,273,632 176,660 3,335,332
Shares converted to Class A..... (19,129) (397,365) (148,651) (2,732,385)
Shares redeemed................. (5,053,433) (107,422,769) (5,345,132) (110,043,722)
---------- ------------ ---------- ------------
Net increase.................... 936,461 $ 16,896,857 793,964 $ 14,975,762
========== ============ ========== ============
Class C:**
Shares sold..................... 186,605 $ 3,807,186 5,118 $ 120,922
Dividends reinvested............ 761 13,810 -- --
Shares redeemed................. (160,871) (3,273,557) (1,348) (29,837)
---------- ------------ ---------- ------------
Net increase.................... 26,495 $ 547,439 3,770 $ 91,085
========== ============ ========== ============
</TABLE>
<PAGE>
-37-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
Alger Capital Appreciation Portfolio
Class A:*
<S> <C> <C> <C> <C>
Shares sold..................... 5,777,211 $ 151,368,813 3,241,124 $ 82,052,318
Shares converted from Class B... 33,117 869,006 233,151 5,186,684
Dividends reinvested............ 36,380 843,296 -- --
Shares redeemed................. (5,397,094) (142,286,762) (2,879,210) (73,001,214)
-------------- -------------- -------------- --------------
Net increase.................... 449,614 $ 10,794,353 595,065 $ 14,237,788
============== ============== ============== ==============
Class B:
Shares sold..................... 9,833,041 $ 253,083,595 12,410,336 $ 304,603,104
Dividends reinvested............ 541,761 12,460,510 43,004 941,804
Shares converted to Class A..... (33,443) (869,006) (233,764) (5,186,684)
Shares redeemed................. (9,593,592) (247,689,081) (10,979,223) (267,894,646)
-------------- -------------- -------------- --------------
Net increase.................... 747,767 $ 16,986,018 1,240,353 $ 32,463,578
============== ============== ============== ==============
Class C:**
Shares sold..................... 379,978 $ 9,741,964 36,710 $ 1,019,125
Dividends reinvested............ 2,031 46,713 -- --
Shares redeemed................. (337,805) (8,634,743) (12,451) (346,883)
-------------- -------------- -------------- --------------
Net increase.................... 44,204 $ 1,153,934 24,259 $ 672,242
============== ============== ============== ==============
Alger Money Market Portfolio
Shares sold..................... 1,312,044,916 $1,312,044,916 1,583,643,437 $1,583,643,437
Dividends reinvested............ 3,744,393 3,744,393 9,418,392 9,418,392
Shares redeemed................. (1,337,772,094) (1,337,772,094) (1,699,340,499) (1,699,340,499)
-------------- -------------- -------------- --------------
Net decrease.................... (21,982,785) $ (21,982,785) (106,278,670) $ (106,278,670)
============== ============== ============== ==============
</TABLE>
- ----------
* Initially offered January 1, 1997.
** Initially offered August 1, 1997.
<PAGE>
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