The Alger Fund
Alger LargeCap Growth Portfolio
Alger Small Capitalization Portfolio
Alger Balanced Portfolio
Alger MidCap Growth Portfolio
Alger Capital Appreciation Portfolio
Alger Money Market Portfolio
ANNUAL REPORT
October 31, 2000
[LOGO]
<PAGE>
Fellow Shareholders:
November 20, 2000
THE YEAR IN REVIEW
In each of the last five years the U.S. stock market has posted yearly
gains of more than 20%, an unprecedented record of consecutive double-digit
returns. This year has seen a break in the market's momentum. For the year ended
October 31, 2000, the S&P 500 Index was up 6.1%. However, from January through
October the broad based index was down 1.8%, and the Dow Jones Industrial
Average, which ended 1999 very near the 11,500 we had predicted, was down more
than 4%.
Price Shocks Squeeze Corporate Earnings
Much of the stock market's volatility since March, when stock market
indices hovered near their highs, has been the result of investor uncertainty
over the effects of higher interest rates on the economy. During the summer
months, concerns about higher energy prices and the falling euro also came into
play, and the impacts of these shocks were seen in the third quarter as many
companies reported lower than expected earnings. Technology stocks in particular
came under pressure during the second half of the year following last year's
euphoric 86% gain in the Nasdaq.
After six Federal Reserve interest rate hikes since the summer of 1999
that culminated in a 50-basis-point increase in May 2000, the economy finally
began to show signs of slowing in the second half of the year. In July and
August, stocks traded in a narrow range as investors watched oil prices and
waited for further signals on the direction of interest rates.
At its meeting on August 22, the Federal Open Market Committee (FOMC) held
rates steady but maintained an inflationary bias, in part due to higher energy
prices. Crude oil prices rose dramatically in August and in September reached
above $37 a barrel. Increased production by OPEC nations and the release of
emergency U.S. reserves helped stabilize prices but by the end of October prices
were still above $30 a barrel.
At the same time, the euro currency came under pressure in international
markets, falling to a low of $0.85 in September. Intervention by central banks
to support the currency temporarily halted the currency's slide, but on October
26, the currency reached a new low of $0.82, nearly 30% below its initial value
in January 1999.
Stock prices were negatively affected as companies began issuing
preannouncements in September warning that third quarter earnings would not meet
market expectations due to higher energy costs and the euro's decline. Earnings
of computer manufacturers were also affected by lower demand compared to last
year. The S&P 500 fell 0.97% during the third quarter while the technology-laden
Nasdaq Composite fell 7.39%. Small- and mid-capitalization stocks fared better,
with the S&P MidCap 400 rising 12.15% during the third quarter.
Corporate earnings reports continued to dominate the markets in October.
The Dow Jones Industrial Average gained 3% during the month to close at 10,971,
while the broader based S&P 500 fell 0.5%. The Nasdaq Composite fell 8.3% during
the month to close at 3,369.
Fixed income markets were mostly negatively affected during the year by
rising interest rates. Prices of long-term government bonds however were
supported by the Treasury department's buy-back program of $30 billion worth of
debt with maturities of 10 to 30 years. At the end of October, 30-year bond
yields stood at 5.8%.
Further Signs of a Slower Economy
Economic data released in early November showed further signs of a slower
economy, leading the FOMC to again hold interest rates steady at its last
meeting on November 15. The rate of growth in Gross Domestic Product slowed from
5.6% in the first quarter to 2.7% in the third quarter, within the targeted 2%
to 3% for a "soft landing." However, the Federal Reserve continues to maintain a
tightening bias in the face of higher core inflation and a tight labor market.
September's Consumer Price Index showed inflation at 3.4% year over year, with
core inflation (excluding food and energy) at 2.5% on an annual basis.
Unemployment remains near its 30-year low at 3.9%, and average hourly wages
showed an upward tick in October, rising 0.4% compared to analysts' expectations
of a 0.3% increase.
Consumer spending, responsible for two-thirds of the nation's GDP, may
also be slowing. The Consumer Board's measure of consumer confidence fell
sharply in October, reaching its lowest level since October 1999. Major
retailers have reported sluggish sales compared to year-ago levels and
preliminary data from the National Association of Purchasing
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Management show that manufacturing activity is also beginning to slow.
Marking Time While the Vote Count Continues
As this is an election year, the potential for a change in party
leadership affected individual stock sectors as investors took speculative
positions in anticipation of election results. As of November 20, however, there
is not yet a clear winner in the Presidential race, and the financial markets
have largely been marking time since November 7.
In the short-term, a prolonged court battle will likely have a negative
impact on the financial markets as investors in general are uncomfortable with
uncertainty. In the longer term, however, the election results may not have a
significant effect on stock prices. The Republicans have control of both the
Senate and the House, albeit by a narrow margin, limiting the likelihood that
any new social spending legislation will be enacted if Gore were to become
President. In the event of a Republican victory, proposed tax cuts may
eventually be enacted but the current proposals will likely have to be scaled
back in order to pass Congress.
PORTFOLIO MATTERS
Alger Small Capitalization Portfolio
The Alger Small Capitalization Portfolio lost .40% for the twelve months
ended October 31, 2000, compared to a gain of 16.16% in the Russell 2000 Growth
index. While small-cap stocks in general have underperformed larger companies in
recent years, this trend reversed in 2000 as investors sought attractive
valuations among overlooked small-cap stocks. The Portfolio's holdings in
Internet and technology stocks came under pressure during the year, while
holdings in health care stocks contributed gains. During the year the
Portfolio's investment in semiconductor stocks was reduced in response to an
expectation that much of this sector's strong growth potential has been
realized. Positions in economically sensitive stocks were reduced in light of
the expected slower rate of economic growth.
Alger LargeCap Growth Portfolio
For the year ended October 31, 2000 the Alger LargeCap Growth Portfolio
returned 7.24% compared to a 6.10% gain in the S&P 500. The Portfolio's holdings
in semiconductor, energy, and pharmaceutical stocks contributed gains during the
year, while holdings in Internet stocks and PC manufacturers were adversely
affected by the general downturn in the technology sector. During the year, the
Portfolio's holdings in Internet and semiconductor stocks were reduced.
Selective investments in pharmaceuticals and financial companies were among new
holdings added to the Portfolio.
Alger MidCap Growth Portfolio
For the year ended October 31, 2000, the Alger MidCap Growth Portfolio
earned a total return of 46.42% compared to a 31.65% increase in the benchmark
S&P MidCap 400 index. During the twelve months mid-capitalization stocks as a
group turned in the best performance compared to the S&P 500 and the Russell
2000 Growth index, which tracks smaller companies. The Portfolio substantially
outperformed its benchmark index as a result of individual holdings in
semiconductor, energy, and pharmaceutical stocks. Positions in Internet
companies posted declines during the year and were trimmed from the Portfolio in
favor of new investments in health care and energy services companies.
Alger Capital Appreciation Portfolio
For the twelve months ended October 31, 2000, the Alger Capital
Appreciation Portfolio returned 11.60% compared to 6.10% for the S&P 500. The
Portfolio employs an all-cap approach to selecting securities and has benefited
in recent years from a higher weighting towards large-capitalization growth
stocks. During the last twelve months the Portfolio benefited from the positive
trend in small- and mid-cap issues. The Portfolio's holdings in Internet and
technology stocks came under pressure with the general decline in technology
issues during the year, while health care, software, and energy stocks
contributed gains. During the second half of the year the Portfolio's holdings
in tech-
2
<PAGE>
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nology stocks were reduced in favor of new investments in stocks that are
positioned to sustain earnings in a period of slower economic growth. New
investments also included positions in biotechnology stocks offering strong
growth potential from product development efforts.
Alger Balanced Portfolio
The Alger Balanced Portfolio's total return for the twelve months ended
October 31, 2000 was 9.36% compared to 7.11% for the Lehman Brothers Government/
Corporate Bond Index and 6.10% for the S&P 500. During the year the Portfolio
maintained a ratio of approximately 60/40 common stocks to debt securities,
producing results that were superior to those of a blended index made up of the
two benchmark indexes. Portfolio holdings in semiconductor, energy and health
care stocks contributed to the Portfolio's gains during the year.
LOOKING AHEAD
Looking ahead, we believe that sustained economic growth in the 2% to 3%
range combined with moderate inflation will offer opportunities for a decline in
interest rates in 2001, a move that would lend support to stocks. We expect the
outcome of the Presidential election to have a modest impact on the economy and
the markets over the long term, and the resolution of the current uncertainty
will likely result in a rebound in stock prices. In our view, a Bush
administration would undoubtedly be more pro-business than a Gore
administration; however, if Gore is President the Republican control of Congress
will likely result in gridlock, and that too can be good for the markets.
More important than the election results, we believe, is the prospect of
declining interest rates in 2001. Lower interest rates will set the stage for
quality companies to sustain corporate earnings growth, and support a rally in
bond prices and a resurgence in stock prices. In this environment, the Alger
Portfolios will continue to seek investments in quality companies that offer
superior growth potential, consistent with our fundamental approach to security
selection.
Respectfully submitted,
/s/ David D. Alger
David D. Alger
President
3
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TABLE OF CONTENTS
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Alger LargeCap Growth Portfolio:
Portfolio Highlights ........................................ 7
Schedule of Investments ..................................... 8
Financial Highlights ........................................ 10
Alger Small Capitalization Portfolio:
Portfolio Highlights ........................................ 13
Schedule of Investments ..................................... 14
Financial Highlights ........................................ 18
Alger Balanced Portfolio:
Portfolio Highlights ........................................ 21
Schedule of Investments ..................................... 22
Financial Highlights ........................................ 26
Alger MidCap Growth Portfolio:
Portfolio Highlights ........................................ 29
Schedule of Investments ..................................... 30
Financial Highlights ........................................ 32
Alger Capital Appreciation Portfolio:
Portfolio Highlights ........................................ 35
Schedule of Investments ..................................... 36
Financial Highlights ........................................ 38
Alger Money Market Portfolio:
Schedule of Investments ..................................... 40
Financial Highlights ........................................ 41
Statements of Assets and Liabilities ....................................... 42
Statements of Operations ................................................... 43
Statements of Changes in Net Assets ........................................ 44
Notes to Financial Statements .............................................. 46
Report of Independent Public Accountants ................................... 53
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Alger LargeCap Growth Portfolio Portfolio Highlights Through October 31, 2000
(Unaudited) Prior to September 29, 2000, the Alger LargeCap Growth Portfolio was
Alger Growth Portfolio.
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--------------------------------------------------------------------------------
Hypothetical $10,000 Investment in Class B Shares - 10 Years Ended 10/31/00
--------------------------------------------------------------------------------
ALGER LARGE CAP GROWTH PLOT POINTS
[GRAPHIC OMITTED]
[The following table was depicted as a mountain chart in the printed material.]
Alger LargeCap Growth B S&P 500 Index
11/1/90 10000 10000
14579 13350
10/31/92 15988 14681
20652 16874
10/31/94 21494 17527
29614 22163
10/31/96 32007 27502
40059 36335
10/31/98 48637 44323
68267 55700
10/31/2000 73735 59097
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger LargeCap Growth Class B shares and the S&P 500
Index for the ten years ended October 31, 2000. Figures for both the Alger
LargeCap Growth Class B shares and the S&P 500 Index, an unmanaged index of
common stocks, include reinvestment of dividends. Performance for the Alger
LargeCap Growth Class A and Class C shares will vary from the results shown
above due to differences in expenses and sales charges those classes bear.
--------------------------------------------------------------------------------
Performance Comparison as of 10/31/00+
Average Annual Total Returns
1 5 10 Since
Year Years Years Inception
-------------------------------------------------
Class A (Inception 1/1/97) 2.88% * * 22.25%
S&P 500 Index 6.10% * * 20.40%
--------------------------------------------------------------------------------
Class B (Inception 11/11/86) 2.74% 19.25% 22.11% 17.38%
S&P 500 Index 6.10% 21.67% 19.44% 16.40%
--------------------------------------------------------------------------------
Class C (Inception 8/1/97) 5.28% * * 17.94%
S&P 500 Index 6.10% * * 14.77%
--------------------------------------------------------------------------------
The Portfolio's average annual total returns include changes in share price and
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. Investment return and principal will fluctuate and the
Portfolio's shares, when redeemed, may be worth more or less than their original
cost.
+ Returns reflect maximum initial sales charges on Class A and Class C
shares and applicable contingent deferred sales charges on Class B and
Class C shares.
<PAGE>
-8-
THE ALGER FUND
ALGER LARGECAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2000
Common Stocks--89.0% Shares Value
------ -----
ADVERTISING--.9%
Omnicom Group Inc. .......................... 118,500 $ 10,931,625
-------------
AEROSPACE--4.2%
General Dynamics Corporation ................ 108,300 7,750,219
United Technologies Corporation ............. 670,900 46,837,206
-------------
54,587,425
-------------
AUTOMOTIVE--.9%
Harley-Davidson, Inc. ....................... 253,900 12,234,806
-------------
BIO-TECHNOLOGY RESEARCH
& PRODUCTION--2.4%
Amgen Inc.* ................................. 536,000 31,054,500
-------------
CABLE--2.7%
Comcast Corp., Cl. A Special*+ .............. 284,200 11,581,150
Time Warner Inc. ............................ 303,050 23,004,526
-------------
34,585,676
-------------
COMMUNICATION EQUIPMENT--4.3%
Cisco Systems, Inc.* ........................ 691,200 37,238,400
Corning Incorporated+ ....................... 242,000 18,513,000
-------------
55,751,400
-------------
COMMUNICATIONS
TECHNOLOGY--5.4%
America Online, Inc.* ....................... 386,300 19,481,109
AT&T Corp. Liberty Media Group,
Series A* ................................ 714,800 12,866,400
Exodus Communications, Inc.* ................ 207,600 6,967,575
SBC Communications Inc.* .................... 105,000 6,057,188
Viacom Inc. Cl. B* .......................... 424,400 24,137,750
-------------
69,510,022
-------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--4.3%
Dell Computer Corporation* .................. 220,000 6,490,000
EMC Corporation* ............................ 205,700 18,320,156
Hewlett-Packard Company ..................... 183,600 8,525,925
Sun Microsystems, Inc.* ..................... 200,200 22,197,175
-------------
55,533,256
-------------
COMPUTER SERVICES--2.9%
CNET Networks, Inc.*+ ....................... 104,600 3,294,900
eBay Inc.*+ ................................. 594,000 30,591,000
Yahoo Inc.* ................................. 61,970 3,632,991
-------------
37,518,891
-------------
COMPUTER SOFTWARE--4.8%
BEA Systems, Inc.* .......................... 120,700 8,660,225
Commerce One, Inc.* ......................... 108,000 6,932,250
i2 Technologies, Inc.* ...................... 53,075 9,022,750
Intuit Inc.* ................................ 203,300 12,490,244
Microsoft Corporation* ...................... 364,400 25,098,050
-------------
62,203,519
-------------
CONGLOMERATE--5.3%
General Electric Company .................... 227,900 12,491,768
Philip Morris Companies Inc. ................ 332,900 12,192,463
Tyco International Limited .................. 767,200 43,490,650
-------------
68,174,881
-------------
ENERGY & ENERGY SERVICES--4.9%
Calpine Corporation* ........................ 147,850 11,670,909
Duke Energy Corporation ..................... 74,000 6,396,375
Halliburton Company .........................1,085,700 40,238,756
Transocean Sedco Forex Inc. ................. 89,500 4,743,500
-------------
63,049,540
-------------
FINANCIAL SERVICES--8.3%
American Express Company .................... 153,000 9,180,000
Citigroup Inc. .............................. 699,733 36,823,449
Marsh & McLennan Companies, Inc. ............ 52,300 6,838,225
Merrill Lynch & Co., Inc. ................... 192,000 13,440,000
Schwab (Charles) Corporation
(The) .................................... 435,975 15,313,622
Stilwell Financial Inc. ..................... 371,400 16,643,363
Washington Mutual, Inc.+ .................... 211,600 9,310,400
-------------
107,549,059
-------------
FOOD CHAINS--2.4%
The Kroger Co.* ............................. 322,900 7,285,431
Safeway Inc.* ............................... 435,300 23,805,469
-------------
31,090,900
-------------
FOODS & BEVERAGES--1.3%
The Coca-Cola Company ....................... 274,450 16,569,918
-------------
HEALTH CARE ADMINISTRATIVE SERVICES--2.9%
Cardinal Health, Inc. ....................... 402,200 38,108,450
-------------
INSURANCE--2.0%
American International Group, Inc. .......... 259,900 25,470,200
-------------
MANUFACTURING--2.0%
Sanmina Corporation* ........................ 55,300 6,321,480
Solectron Corporation* ...................... 451,800 19,879,200
-------------
26,200,680
-------------
MEDICAL DEVICES--1.5%
Guidant Corporation* ........................ 217,900 11,535,081
Medtronic, Inc. ............................. 134,500 7,305,031
-------------
18,840,112
-------------
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-9-
THE ALGER FUND
ALGER LARGECAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (Continued)
October 31, 2000
Common Stocks--(cont.) Shares Value
------ -----
OIL & GAS--3.7%
Exxon Mobil Corporation ................... 537,600 $ 47,947,200
-------------
PHARMACEUTICALS--8.5%
Abbott Laboratories ....................... 147,500 7,789,844
American Home Products
Corporation ............................ 448,464 28,477,464
Baxter International Inc. ................. 227,400 18,689,438
Pfizer Inc. ............................... 1,265,275 54,644,064
-------------
109,600,810
-------------
RETAIL--5.0%
Best Buy Co., Inc.* ....................... 339,400 17,033,637
Home Depot, Inc. .......................... 93,000 3,999,000
Walgreen Co. .............................. 198,750 9,067,969
Wal-Mart Stores, Inc. ..................... 770,300 34,952,363
-------------
65,052,969
-------------
SEMICONDUCTOR CAPITAL
EQUIPMENT--2.2%
Applied Materials, Inc.* .................. 370,400 19,677,500
Teradyne, Inc.* ........................... 280,000 8,750,000
-------------
28,427,500
-------------
SEMICONDUCTORS--6.2%
Altera Corporation* ....................... 748,200 30,629,438
Intel Corporation ......................... 302,100 13,594,500
Linear Technology Corporation ............. 357,800 23,100,463
Texas Instruments, Incorporated ........... 258,600 12,687,563
-------------
80,011,964
-------------
Total Common Stocks
(Cost $1,024,840,248) .................. 1,150,005,303
-------------
Preferred Stock--.5%
COMMUNICATIONS
Nokia Corporation, ADR
(Cost $6,139,553) ...................... 153,500 6,562,125
-------------
Principal
Short-Term Investments--14.3% Amount Value
------ -----
SHORT-TERM CORPORATE NOTES--7.7%
Cintas Executive Services,
6.47%, 11/9/00 .........................$30,000,000 $ 29,956,867
Florida Power & Light Company,
6.50%, 11/7/00 ......................... 4,000,000 3,995,667
Merrill Lynch & Co., Inc.,
6.49%, 11/30/00 ........................ 20,700,000 20,591,779
Rembrandt International Company
Holdings,
6.52%, 11/28/00(a) ..................... 42,600,000 42,391,686
Textron Financial Corporation,
6.52%, 11/17/00 ........................ 3,200,000 3,190,727
-------------
Total Short-Term Corporate Notes
(Cost $100,126,726) .................... 100,126,726
-------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--4.7%
Securities Held Under Repurchase
Agreements, 6.47%, 11/1/00, with
State Street Bank and Trust
Company, dtd 10/31/00, repurchase
price $60,210,819; collateralized
by U.S. Treasury Bonds (par value
$47,060,000, 8.50%, due 2/15/20) ....... 60,200,000
-------------
OTHER SHORT-TERM
INVESTMENTS--1.9% Shares
Securities Lending Quality Trust ------
(Cost $24,572,089) (c) ................. 24,572,089 24,572,089
-------------
Total Short-Term Investments
(Cost $184,898,815) .................... 184,898,815
Total Investments
(Cost $1,215,878,616) (b) .............. 103.8% 1,341,466,243
Liabilities in Excess of Other Assets ..... (3.8) (49,352,720)
----- -------------
Net Assets ................................ 100.0% $1,292,113,523
====== ==============
* Non-income producing security.
+ Securities partially or fully on loan.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity to qualified institutional buyers.
(b) At October 31, 2000, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $1,215,878,616, amounted to
$125,587,627 which consisted of aggregate gross unrealized appreciation of
$187,117,192 and aggregate gross unrealized depreciation of $61,529,565.
(c) Represents investment of cash collateral received for securities on loan.
See Notes to Financial Statements.
<PAGE>
-10-
THE ALGER FUND
alger Largecap GROWTH PORTFOLIO (i)
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
Class A (ii) Class B
------------------------------------------------------ -----------------------
Ten Months
Year Ended October 31, Ended Year Ended October 31,
-------------------------------------- October 31, -----------------------
2000 1999 1998 1997(iv) 2000 1999
-------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ... $ 15.47 $ 12.19 $ 11.58 $ 9.40 $ 15.09 $ 12.00
-------- -------- -------- ------- -------- --------
Net investment income (loss) ........... (.05)(v) (.07)(v) (.03)(v) (.02) (.16)(v) (.18)(v)
Net realized and unrealized gain (loss)
on investments ...................... 1.33 4.64 2.13 2.20 1.31 4.56
-------- -------- -------- ------- -------- --------
Total from investment operations ....... 1.28 4.57 2.10 2.18 1.15 4.38
Distributions from net realized gains .. (2.66) (1.29) (1.49) -- (2.66) (1.29)
-------- -------- -------- ------- -------- --------
Net asset value, end of period ......... $ 14.09 $ 15.47 $ 12.19 $ 11.58 $ 13.58 $ 15.09
======== ======== ======== ======= ======== ========
Total Return (vi) ...................... 8.0% 40.4% 21.4% 23.2% 7.2% 39.3%
======== ======== ======== ======= ======== ========
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) .................... $324,130 $228,896 $121,930 $52,307 $902,091 $770,311
======== ======== ======== ======= ======== ========
Ratio of expenses to average
net assets ....................... 1.20% 1.21% 1.25% 1.30% 1.96% 1.96%
======== ======== ======== ======= ======== ========
Ratio of net investment income (loss)
to average net assets ............ (.32%) (.50%) (.23%) (.39%) (1.07%) (1.26%)
======== ======== ======== ======= ======== ========
Portfolio Turnover Rate ............. 96.13% 205.94% 146.64% 128.26% 96.13% 205.94%
======== ======== ======== ======= ======== ========
</TABLE>
(i) Prior to September 29, 2000 the Alger LargeCap Growth Portfolio was the
Alger Growth Portfolio.
(ii) Initially offered January 1, 1997.
(iii) Initially offered August 1, 1997.
(iv) Ratios have been annualized; total return has not been annualized.
(v) Amount was computed based on average shares outstanding during the period.
(vi) Does not reflect the effect of any sales charges.
See Notes to Financial Statements.
<PAGE>
-11-
<TABLE>
<CAPTION>
Class B Class C (iii)
----------------------------------- ---------------------------------------------------
Three Months
Year Ended October 31, Year Ended October 31, Ended
----------------------------------- ----------------------------------- October 31,
1998 1997 1996 2000 1999 1998 1997(iv)
-------- -------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ... $ 11.50 $ 9.49 $ 9.38 $ 15.08 $ 12.00 $ 11.50 $ 11.98
-------- -------- -------- ------- ------- ------- -------
Net investment income (loss) ........... (.11)(v) (.13) (.08)(v) (.16)(v) (.18)(v) (.11)(v) (.02)
Net realized and unrealized gain (loss)
on investments ...................... 2.10 2.44 .78 1.31 4.55 2.10 (.46)
-------- -------- -------- ------- ------- ------- -------
Total from investment operations ....... 1.99 2.31 .70 1.15 4.37 1.99 (.48)
Distributions from net realized gains .. (1.49) (.30) (.59) (2.66) (1.29) (1.49) --
-------- -------- -------- ------- ------- ------- -------
Net asset value, end of period ......... $ 12.00 $ 11.50 $ 9.49 $ 13.57 $ 15.08 $ 12.00 $ 11.50
======== ======== ======== ======= ======= ======= =======
Total Return (vi) ...................... 20.5% 24.9% 8.1% 7.2% 39.2% 20.5% (4.0%)
======== ======== ======== ======= ======= ======= =======
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) .................... $390,885 $304,984 $266,207 $65,893 $31,500 $ 3,312 $ 199
======== ======== ======== ======= ======= ======= =======
Ratio of expenses to average
net assets ....................... 2.00% 2.08% 2.08% 1.95% 1.97% 2.00% 2.02%
======== ======== ======== ======= ======= ======= =======
Ratio of net investment income (loss)
to average net assets ............ (.98%) (1.13%) (.84%) (1.08%) (1.30%) (.97%) (1.43%)
======== ======== ======== ======= ======= ======= =======
Portfolio Turnover Rate ............. 146.64% 128.26% 94.91% 96.13% 205.94% 146.64% 128.26%
======== ======== ======== ======= ======= ======= =======
</TABLE>
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Alger Small Capitalization Portfolio Portfolio Highlights Through October 31,
2000 (Unaudited)
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--------------------------------------------------------------------------------
Hypothetical $10,000 Investment in Class B Shares - 10 Years Ended 10/31/00
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
[The following table was depicted as a mountain chart in the printed material.]
ALGER SMALL CAP PLOT POINTS
Alger Small Capitalization Growth B S&P 500 Index
11/1/90 10000 10000
16374 16653
10/31/92 16935 16593
21302 21185
10/31/94 21079 20991
30807 25308
10/31/96 31784 28681
35867 34753
10/31/98 31973 29245
42421 37810
10/31/2000 42589 43920
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger Small Capitalization Class B shares and the Russell
2000 Growth Index for the ten years ended October 31, 2000. Figures for both the
Alger Small Capitalization Class B shares and the Russell 2000 Growth Index, an
unmanaged index of common stocks, include reinvestment of dividends. Performance
for the Alger Small Capitalization Class A and Class C shares will vary from the
results shown above due to differences in expenses and sales charges those
classes bear.
--------------------------------------------------------------------------------
Performance Comparison as of 10/31/00+
Average Annual Total Returns
1 5 10 Since
Year Years Years Inception
-------------------------------------------------
Class A (Inception 1/1/97) (4.37%) * * 6.46%
Russell 2000 Growth Index 16.16% * * 10.40%
--------------------------------------------------------------------------------
Class B (Inception 11/11/86) (4.61%) 6.00% 15.59% 14.96%
Russell 2000 Growth Index 16.16% 11.66% 15.95% 10.34%
--------------------------------------------------------------------------------
Class C (Inception 8/1/97) (2.10%) * * 4.18%
Russell 2000 Growth Index 16.16% * * 8.94%
--------------------------------------------------------------------------------
The Portfolio's average annual total returns include changes in share price and
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. Investment return and principal will fluctuate and the
Portfolio's shares, when redeemed, may be worth more or less than their original
cost.
+ Returns reflect maximum initial sales charges on Class A and Class C
shares and applicable contingent deferred sales charges on Class B and
Class C shares.
<PAGE>
-14-
THE ALGER FUND
ALGER SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2000
Common Stocks--87.7% Shares Value
------ -----
AIR TRANSPORT--.5%
SkyWest Inc. .............................. 41,400 $ 2,090,700
-------------
BANKS--.5%
Greater Bay Bancorp ....................... 13,600 442,850
Southwest Bancorporation of
Texas, Inc.* ........................... 43,750 1,596,875
-------------
2,039,725
-------------
BIO-TECHNOLOGY RESEARCH & PRODUCTION--7.7%
Albany Molecular Research, Inc.* .......... 41,000 2,383,125
Alexion Pharmaceuticals, Inc.* ............ 26,300 2,718,763
Aviron*+ .................................. 42,700 2,791,513
Celgene Corporation* ...................... 32,000 2,060,000
Cell Therapeutics, Inc.* .................. 24,800 1,658,887
Cephalon, Inc.* ........................... 88,629 4,752,730
Charles River Laboratories
International, Inc.* ................... 79,850 2,096,063
IDEC Pharmaceuticals Corporation* ......... 32,500 6,374,063
Informax, Inc.* ........................... 85,830 2,387,147
Lexicon Genetics Incorporated* ............ 133,900 2,711,475
Myriad Genetics, Inc.* .................... 8,000 960,000
NPS Pharmaceuticals, Inc.* ................ 51,500 2,208,063
Titan Pharmaceuticals, Inc.* .............. 15,400 648,032
Variagenics, Inc.* ........................ 45,050 743,325
-------------
34,493,186
-------------
BUSINESS SERVICES
AvantGo, Inc.* ............................ 13,945 137,271
-------------
COMMERCIAL SERVICES--.5%
Corporate Executive Board Co. ............. 45,200 2,084,850
-------------
COMMUNICATIONS
TECHNOLOGY--7.3%
Avocent Corporation* ...................... 80,500 5,710,469
Cobalt Networks, Inc.* .................... 172,500 9,509,063
Digital Lightwave, Inc.*+ ................. 49,500 2,509,031
Packeteer Inc. ............................ 93,400 2,323,325
Proxim, Inc.* ............................. 47,100 2,855,438
REMEC, Inc.* .............................. 73,500 2,191,219
Research in Motion Limited* ............... 63,200 6,320,000
TeleCommunication Systems,
Inc. Cl. A* ............................ 78,900 1,242,675
-------------
32,661,220
-------------
COMPUTER SERVICES--10.8%
Actuate Corporation* ...................... 198,000 5,581,125
Aspen Technology, Inc.* ................... 88,000 3,635,500
Click Commerce, Inc.* ..................... 28,300 810,088
Documentum, Inc.* ......................... 19,400 1,649,000
Embarcadero Technologies, Inc.* ........... 5,120 309,440
Evolve Software, Inc.* .................... 88,000 1,380,500
Exult Inc.*+ .............................. 259,300 3,889,500
Informatica Corporation* .................. 38,000 3,591,000
Interwoven, Inc.* ......................... 60,308 6,076,031
Manugistics Group, Inc.* .................. 34,900 3,976,419
Micromuse Inc.* ........................... 32,500 5,514,844
Netegrity, Inc.* .......................... 38,350 2,991,300
Resonate Inc.* ............................ 25,200 1,067,850
SignalSoft Corporation* ................... 47,375 1,347,226
SpeechWorks International Inc.* ........... 80,450 6,697,463
-------------
48,517,286
-------------
COMPUTER TECHNOLOGY--.6%
Computer Network Technology
Corporation* ........................... 86,395 2,625,598
-------------
DIVERSIFIED FINANCIAL
SERVICES--2.2%
BISYS Group, Inc.* ........................ 213,800 10,075,325
-------------
DRUGS & PHARMACEUTICALS--8.3%
ALZA Corporation* ......................... 53,550 4,334,202
AmeriSource Health Corporation
Cl. A* ................................. 284,100 12,340,594
Bindley Western Industries, Inc. .......... 230,750 8,292,578
COR Therapeutics, Inc.* ................... 52,400 2,960,600
Medicis Pharmaceutical
Corporation* ........................... 39,650 2,919,231
Onyx Pharmaceuticals, Inc.*+ .............. 61,200 918,000
Priority Healthcare Corporation,
Cl. B* ................................. 65,300 3,509,875
United Therapeutics Corporation*+ ......... 35,000 1,872,500
-------------
37,147,580
-------------
ELECTRONICS--6.5%
Benchmark Electronics, Inc.* .............. 94,800 3,815,700
DDi Corp.* ................................ 207,100 8,271,056
Keithley Instruments, Inc. ................ 59,900 3,204,650
Mettler-Toledo International Inc.* ........ 50,600 2,362,388
MRV Communications, Inc.* ................. 95,900 3,788,050
Plexus Corp.* ............................. 105,000 6,621,563
SMTC Corporation* ......................... 58,300 1,100,413
-------------
29,163,820
-------------
ENERGY--1.1%
CARBO Ceramics Inc. ....................... 52,800 1,580,700
FuelCell Energy, Inc.*+ ................... 34,840 2,667,437
Veritas DGC Inc.* ......................... 13,500 405,000
-------------
4,653,137
-------------
<PAGE>
-15-
THE ALGER FUND
ALGER SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS (Continued)
October 31, 2000
Common Stocks--(cont.) Shares Value
------ -----
FINANCIAL INFORMATION
SERVICES--2.5%
FactSet Research Systems Inc. ............. 296,200 $ 11,217,094
-------------
FREIGHT
EGL, Inc.* ................................ 11,200 319,200
-------------
HEALTH CARE--9.1%
Advance Paradigm, Inc.* ................... 82,500 4,032,188
IMPATH Inc.* .............................. 80,900 6,118,062
Laboratory Corporation of America
Holdings* .............................. 109,500 14,768,812
Orthodontic Centers Of America* ........... 141,895 4,735,746
Province Healthcare Company* .............. 257,825 10,860,878
-------------
40,515,686
-------------
HOTELS--.2%
Orient-Express Hotels Ltd., Cl. A* ........ 58,250 1,052,141
-------------
IDENTIFICATION CONTROL
& FILTER DEVICES--.8%
Artesyn Technologies, Inc.* ............... 92,500 3,757,812
-------------
INVESTMENT MANAGEMENT COMPANIES--5.0%
Affiliated Managers Group, Inc.* .......... 92,400 5,555,550
Blackrock Inc.* ........................... 169,900 7,241,987
Federated Investors, Inc. Cl. B ........... 335,450 9,769,981
-------------
22,567,518
-------------
MEDICAL & DENTAL INSTRUMENTS
& SUPPLIES--2.5%
Cytyc Corporation* ........................ 48,900 2,902,673
Enzon, Inc.* .............................. 114,800 8,179,500
-------------
11,082,173
-------------
MEDICAL SERVICES--2.7%
Aurora Biosciences Corp.* ................. 150,100 9,146,719
Deltagen, Inc.* ........................... 38,000 603,250
RehabCare Group, Inc.* .................... 51,258 2,213,705
-------------
11,963,674
-------------
METAL FABRICATING--2.5%
Shaw Group Inc. (The)* .................... 136,900 11,157,350
-------------
OIL--1.2%
Cross Timbers Oil Company ................. 44,000 827,750
Grey Wolf, Inc.* .......................... 456,250 2,110,156
Mitchell Energy & Development
Corp. .................................. 18,300 841,800
Spinnaker Exploration Company* ............ 10,500 317,625
St. Mary Land & Exploration
Company ................................ 24,500 574,219
Swift Energy Company* ..................... 19,700 640,250
-------------
5,311,800
-------------
PHOTOGRAPHY--1.2%
Concord Camera Corp.* ..................... 168,435 5,210,957
-------------
PRODUCTION TECHNOLGY EQUIPMENT--.5%
DuPont Photomasks, Inc.* .................. 36,929 2,072,640
-------------
RESTAURANTS--1.9%
California Pizza Kitchen, Inc.* ........... 78,000 2,730,000
Cheesecake Factory Incorporated* .......... 122,200 5,414,988
Krispy Kreme Doughnuts Inc.* .............. 5,000 492,812
-------------
8,637,800
-------------
RETAIL--1.3%
Abercrombie & Fitch Co., Cl. A* ........... 147,800 3,482,537
Zale Corporation* ......................... 66,600 2,256,075
-------------
5,738,612
-------------
SCIENTIFIC EQUIPMENT
& SUPPLIERS--2.5%
Newport Corporation ....................... 99,150 11,323,240
-------------
SECURITIES BROKERAGE
& SERVICES--.6%
Investment Technology Group, Inc.* ........ 71,300 2,566,800
-------------
SEMICONDUCTORS--5.9%
Actel Corporation* ........................ 37,900 1,388,087
Applied Micro Circuits Corp.* ............. 33,069 2,527,696
Elantec Semiconductor Inc.* ............... 52,550 5,846,188
Exar Corporation* ......................... 44,400 1,984,125
Integrated Circuit Systems, Inc.* ......... 220,000 2,997,500
Microtune, Inc.* .......................... 90,000 2,531,250
Oak Technology Inc.* ...................... 168,500 4,728,531
OmniVision Technologies, Inc.* ............ 25,950 885,544
Pericom Semiconductor
Corporation* ........................... 136,000 3,604,000
-------------
26,492,921
-------------
TELECOMMUNICATIONS EQUIPMENT--.5%
Plantronics, Inc.* ........................ 51,600 2,354,250
-------------
TRUCKERS--.8%
Forward Air Corporation* .................. 86,500 3,557,312
-------------
UTILITIES
TNPC, Inc.* ............................... 28,600 475,475
-------------
Total Common Stocks
(Cost $367,942,398) 393,064,153
-------------
<PAGE>
-16-
THE ALGER FUND
ALGER SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS (Continued)
October 31, 2000
Principal
Short-Term Investments--12.6% Amount Value
------ -----
SHORT-TERM CORPORATE
NOTES--8.2%
Cintas Executive Services,
6.47%, 11/9/00 .........................$12,200,000 $ 12,182,460
Merrill Lynch & Co., Inc.,
6.49%, 11/30/00 ........................ 13,600,000 13,528,898
United Technologies Corporation,
6.47%, 11/1/00 (a) ..................... 11,200,000 11,200,000
-------------
Total Short-Term Corporate Notes
(Cost $36,911,358) ..................... 36,911,358
-------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--4.4%
Securities Held Under Repurchase
Agreements, 6.47%, 11/1/00,
with State Street Bank and Trust
Company, dtd 10/31/00 repurchase
price $19,653,532; collateralized
by Federal Home Loan
Bank Notes (par value
$20,640,000, 6.47%, due 4/27/04) ....... 19,650,000
-------------
Total Short-Term Investments
(Cost $56,561,358) ..................... 56,561,358
-------------
Total Investments
(Cost $424,503,756) .................... 100.3% 449,625,511
Liabilities in Excess of Other Assets ..... (0.3) (1,475,786)
----- -------------
Net Assets ................................ 100.0% $ 448,149,725
===== =============
* Non-income producing security.
+ Securities partially or fully on loan.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity only to qualified institutional
buyers.
(b) At October 31, 2000, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $424,503,756, amounted to
$25,121,755 which consisted of aggregate gross unrealized appreciation of
$53,987,476 and aggregate gross unrealized depreciation of $28,865,721.
See Notes to Financial Statements.
<PAGE>
[This page intentionally left blank]
<PAGE>
-18-
THE ALGER FUND
ALGER SMALL CAPITALIZATION PORTFOLIO
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
Class A (i) Class B
------------------------------------------------------ -----------------------
Ten Months
Year Ended October 31, Ended Year Ended October 31,
-------------------------------------- October 31, -----------------------
2000 1999 1998 1997(iii) 2000 1999
-------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ... $ 10.35 $ 8.74 $ 10.35 $ 9.21 $ 10.13 $ 8.61
-------- ------- ------- ------- -------- --------
Net investment income (loss) ........... (.08)(iv) (.08)(iv) (.06)(iv) (.04) (.16)(iv) (.15)(iv)
Net realized and unrealized gain (loss)
on investments ......................... .35 2.71 (1.04) 1.18 .36 2.69
-------- ------- ------- ------- -------- --------
Total from investment operations ....... .27 2.63 (1.10) 1.14 .20 2.54
Distributions from net realized gains .. (1.81) (1.02) (.51) -- (1.81) (1.02)
-------- ------- ------- ------- -------- --------
Net asset value, end of period ......... $ 8.81 $ 10.35 $ 8.74 $ 10.35 $ 8.52 $ 10.13
======== ======= ======= ======= ======== ========
Total Return (v) ....................... .4% 32.7% (10.9%) 12.4% (.4%) 32.1%
======== ======= ======= ======= ======== ========
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) .................. $111,665 $69,986 $59,516 $25,996 $325,382 $419,842
======== ======= ======= ======= ======== ========
Ratio of expenses to average
net assets ....................... 1.41% 1.38% 1.37% 1.38% 2.14% 2.14%
======== ======= ======= ======= ======== ========
Ratio of net investment income (loss)
to average net assets ............ (.81%) (.79%) (.71%) (.93%) (1.58%) (1.58%)
======== ======= ======= ======= ======== ========
Portfolio Turnover Rate ............. 207.19% 110.92% 157.26% 120.27% 207.19% 110.92%
======== ======= ======= ======= ======== ========
</TABLE>
(i) Initially offered January 1, 1997.
(ii) Initially offered August 1, 1997.
(iii) Ratios have been annualized; total return has not been annualized.
(iv) Amount was computed based on average shares outstanding during the period.
(v) Does not reflect the effect of any sales charges.
See Notes to Financial Statements.
<PAGE>
-19-
<TABLE>
<CAPTION>
Class B Class C (ii)
---------------------------------- ---------------------------------------------------
Three Months
Year Ended October 31, Year Ended October 31, Ended
---------------------------------- ----------------------------------- October 31,
1998 1997 1996 2000 1999 1998 1997(iii)
-------- -------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ... $ 10.29 $ 10.86 $ 11.13 $ 10.13 $ 8.59 $ 10.29 $ 10.38
-------- -------- -------- ------- ------- ------- -------
Net investment income (loss) ........... (.14)(iv) (.11) (.09) (.16)(iv) (.16)(iv) (.10)(iv) (.03)
Net realized and unrealized gain (loss)
on investments ......................... (1.03) 1.28 .42 .37 2.72 (1.09) (.06)
-------- -------- -------- ------- ------- ------- -------
Total from investment operations ....... (1.17) 1.17 .33 .21 2.56 (1.19) (.09)
Distributions from net realized gains .. (.51) (1.74) (.60) (1.81) (1.02) (.51) --
-------- -------- -------- ------- ------- ------- -------
Net asset value, end of period ......... $ 8.61 $ 10.29 $ 10.86 $ 8.53 $ 10.13 $ 8.59 $ 10.29
======== ======== ======== ======= ======= ======= =======
Total Return (v) ....................... (11.6%) 12.9% 3.2% (.3%) 32.4% (11.8%) (.9%)
======== ======== ======== ======= ======= ======= =======
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) .................. $460,788 $580,651 $553,872 $11,103 $ 7,659 $ 4,838 $ 338
======== ======== ======== ======= ======= ======= =======
Ratio of expenses to average
net assets ....................... 2.12% 2.14% 2.13% 2.15% 2.13% 2.11% 2.09%
======== ======== ======== ======= ======= ======= =======
Ratio of net investment income (loss)
to average net assets ............ (1.51%) (1.67%) (1.59%) (1.57%) (1.55%) (1.36%) (1.71%)
======== ======== ======== ======= ======= ======= =======
Portfolio Turnover Rate ............. 157.26% 120.27% 153.35% 207.19% 110.92% 157.26% 120.27%
======== ======== ======== ======= ======= ======= =======
</TABLE>
<PAGE>
[This page intentionally left blank]
<PAGE>
-21-
--------------------------------------------------------------------------------
Alger Balanced Portfolio Portfolio Highlights Through October 31, 2000
(Unaudited)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Hypothetical $10,000 Investment in Class B Shares from 6/1/92 to 10/31/00
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
[The following table was depicted as a mountain chart in the printed material.]
ALGER BALANCED PLOT POINTS
Alger Balanced B S&P 500 Index Lehman Gov't/Corp. Bond Index
6/1/92 10000 10000 10000
10/31/92 9950 10197 10479
10/31/93 11180 11720 11911
10/31/94 10736 12173 11358
10/31/95 13700 15393 13193
10/31/96 14558 19101 13905
10/31/97 17360 25236 15130
10/31/98 20287 30784 16684
10/31/99 26675 38686 16575
10/31/2000 29171 41045 17754
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in Alger Balanced Class B shares, the S&P 500 Index, and the
Lehman Brothers Government/Corporate Bond Index on June 1, 1992, the inception
date of the Alger Balanced Portfolio, through October 31, 2000. Figures for the
Alger Balanced Portfolio Class B shares, the S&P 500 Index, an unmanaged index
of common stocks, and the Lehman Brothers Government/Corporate Bond Index, an
unmanaged index of government and corporate bonds, include reinvestment of
dividends and/or interest. Performance for the Alger Balanced Class A and Class
C shares will vary from the results shown above due to differences in expenses
and sales charges those classes bear.
--------------------------------------------------------------------------------
Performance Comparison as of 10/31/00+
Average Annual Total Returns
1 5 Since
Year Years Inception
-------------------------------------------------
Class A (Inception 1/1/97) 4.95% * 18.89%
S&P 500 Index 6.10% * 20.40%
Lehman Gov't/Corp. Bond Index 7.11% * 6.38%
--------------------------------------------------------------------------------
Class B (Inception 6/1/92) 4.36% 16.10% 13.56%
S&P 500 Index 6.10% 21.67% 18.26%
Lehman Gov't/Corp. Bond Index 7.11% 6.12% 7.13%
--------------------------------------------------------------------------------
Class C (Inception 8/1/97) 7.23% * 16.10%
S&P 500 Index 6.10% * 14.77%
Lehman Gov't/Corp. Bond Index 7.11% * 5.70%
--------------------------------------------------------------------------------
The Portfolio's average annual total returns include changes in share price and
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. Investment return and principal will fluctuate and the
Portfolio's shares, when redeemed, may be worth more or less than their original
cost.
+ Returns reflect maximum initial sales charges on Class A and Class C
shares and applicable contingent deferred sales charges on Class B and
Class C shares.
<PAGE>
-22-
THE ALGER FUND
ALGER BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2000
Common Stocks--52.4% Shares Value
------ -----
ADVERTISING--.4%
Omnicom Group Inc. ......................... 11,900 $ 1,097,775
-------------
AEROSPACE--2.4%
General Dynamics Corporation ............... 22,500 1,610,156
United Technologies Corporation ............ 69,900 4,879,894
-------------
6,490,050
-------------
AUTOMOTIVE--.4%
Harley-Davidson, Inc.+ ..................... 25,000 1,204,688
-------------
BIO-TECHNOLOGY RESEARCH
& PRODUCTION--1.5%
Amgen Inc.* ................................ 69,200 4,009,275
-------------
CABLE--.8%
Comcast Corp., Cl. A Special* .............. 25,000 1,018,750
Time Warner Inc. ........................... 17,250 1,309,448
-------------
2,328,198
-------------
COMMUNICATION EQUIPMENT--2.6%
Cisco Systems, Inc.* ....................... 85,900 4,627,862
Corning Incorporated ....................... 31,700 2,425,050
-------------
7,052,912
-------------
COMMUNICATIONS
TECHNOLOGY--3.3%
America Online, Inc.* ...................... 63,400 3,197,262
AT&T Corp. Liberty Media Group,
Series A* ............................... 55,000 990,000
Exodus Communications, Inc.* ............... 27,300 916,256
SBC Communications, Inc. ................... 14,000 807,625
Viacom Inc. Cl. B* ......................... 57,950 3,295,906
-------------
9,207,049
-------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--2.6%
Dell Computer Corporation* ................. 29,000 855,500
EMC Corporation* ........................... 27,150 2,418,047
Hewlett-Packard Company .................... 20,900 970,544
Sun Microsystems, Inc.* .................... 26,900 2,982,537
-------------
7,226,628
-------------
COMPUTER SERVICES--2.0%
CNET Networks, Inc.*+ ...................... 41,600 1,310,400
eBay Inc.*+ ................................ 76,400 3,934,600
Yahoo Inc.* ................................ 5,752 337,211
-------------
5,582,211
-------------
COMPUTER SOFTWARE--3.6%
BEA Systems, Inc.*+ ........................ 16,500 1,183,875
Commerce One, Inc.*+ ....................... 21,800 1,399,288
i2 Technologies, Inc.* ..................... 9,620 1,635,400
Intuit Inc.* ............................... 39,500 2,426,781
Microsoft Corporation* ..................... 46,900 3,230,237
-------------
9,875,581
-------------
CONGLOMERATE--3.3%
General Electric Company ................... 30,200 1,655,337
Philip Morris Companies Inc. ............... 44,000 1,611,500
Tyco International Limited ................. 103,000 5,838,813
-------------
9,105,650
-------------
ENERGY & ENERGY SERVICES--2.9%
Calpine Corporation*+ ...................... 21,600 1,705,050
Duke Energy Corporation .................... 9,500 821,156
Halliburton Company ........................ 107,150 3,971,247
Transocean Sedco Forex Inc. ................ 29,100 1,542,300
-------------
8,039,753
-------------
FINANCIAL SERVICES--5.1%
American Express Company ................... 22,500 1,350,000
Citigroup Inc. ............................. 88,066 4,634,473
Marsh & McLennan Companies, Inc. ........... 10,400 1,359,800
Merrill Lynch & Co., Inc. .................. 21,700 1,519,000
Schwab (Charles) Corporation (The) ......... 50,725 1,781,716
Stilwell Financial Inc. .................... 53,800 2,410,912
Washington Mutual, Inc. .................... 20,800 915,200
-------------
13,971,101
-------------
FOOD CHAINS--1.4%
The Kroger Co.* ............................ 52,900 1,193,556
Safeway Inc.* .............................. 47,500 2,597,656
-------------
3,791,212
-------------
FOODS & BEVERAGES--.6%
The Coca-Cola Company ...................... 29,450 1,778,044
-------------
HEALTH CARE ADMINISTRATIVE SERVICES--2.0%
Cardinal Health, Inc. ...................... 57,300 5,429,175
-------------
INSURANCE--1.2%
American International Group, Inc. ......... 34,200 3,351,600
-------------
MANUFACTURING--.9%
Sanmina Corporation*+ ...................... 7,200 823,050
Solectron Corporation* ..................... 37,600 1,654,400
-------------
2,477,450
-------------
MEDICAL DEVICES--.9%
Guidant Corporation* ....................... 32,600 1,725,763
Medtronic, Inc. ............................ 15,200 825,550
-------------
2,551,313
-------------
<PAGE>
-23-
THE ALGER FUND
ALGER BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS (Continued)
October 31, 2000
Common Stocks--(cont.) Shares Value
------ -----
OIL & GAS--1.9%
Exxon Mobil Corporation .................... 58,000 $ 5,172,875
-------------
PHARMACEUTICALS--4.6%
Abbott Laboratories ........................ 17,000 897,812
American Home Products
Corporation ............................. 61,191 3,885,629
Baxter International Inc. .................. 37,300 3,065,594
Pfizer Inc. ................................ 113,225 4,889,905
-------------
12,738,940
-------------
RETAIL--3.2%
Best Buy Co., Inc.* ........................ 40,200 2,017,537
Home Depot, Inc. ........................... 19,850 853,550
Walgreen Co. ............................... 42,300 1,929,938
Wal-Mart Stores, Inc. ...................... 86,950 3,945,356
-------------
8,746,381
-------------
SEMICONDUCTOR CAPITAL EQUIPMENT--1.4%
Applied Materials, Inc.* ................... 49,100 2,608,438
Teradyne, Inc.* ............................ 42,000 1,312,500
-------------
3,920,938
-------------
SEMICONDUCTORS--3.4%
Altera Corporation* ........................ 109,100 4,466,281
Intel Corporation .......................... 34,300 1,543,500
Linear Technology Corporation .............. 30,700 1,982,069
Texas Instruments, Incorporated ............ 26,200 1,285,437
-------------
9,277,287
-------------
Total Common Stocks
(Cost $137,603,156) 144,426,086
-------------
Preferred Stock--.3%
Communication Equipment
Nokia Corporation, ADR
(Cost $807,941) ......................... 20,200 863,550
-------------
Principal
Corporate Bonds--14.8% Amount
------
AUTOMOTIVE--1.6%
Ford Motor Credit Company,
7.50%, 6/15/03 ..........................$2,000,000 2,011,560
General Motors Acceptance Corp.,
6.55%, 11/17/03 ......................... 2,300,000 2,262,786
-------------
4,274,346
-------------
BANKS--3.0%
Associates Corp., North America
Sr. Notes, 5.75%, 11/1/03 ............... 1,000,000 965,040
First USA Bank Wilmington Delaware,
7.65%, 8/1/03 ...........................$3,000,000 3,058,230
Signet Bank,
7.80%, 9/15/06 .......................... 3,000,000 3,124,500
Wells Fargo & Co. Sr. Global Notes,
6.625%, 7/15/04 ......................... 1,200,000 1,182,540
-------------
8,330,310
-------------
CHEMICALS--.5%
Du Pont E.I. De Nemours & Co.,
6.50%, 9/1/02 ........................... 1,500,000 1,490,055
-------------
COMMUNICATIONS
TECHNOLOGY--2.5%
AT&T Corp.,
7.00%, 5/15/05 .......................... 2,000,000 1,956,500
Beneficial Corp.,
6.575%, 12/16/02 ........................ 500,000 494,470
TCI Communications Inc. Sr. Notes,
8.00%, 8/1/05 ........................... 1,000,000 1,010,580
Tele-Communications, Inc.,
7.25%, 8/1/05 ........................... 500,000 488,705
Vodafone Group, PLC ADR,
7.625%, 2/15/05 (a) ..................... 3,000,000 3,043,080
-------------
6,993,335
-------------
CONGLOMERATE--.2%
Loews Corp.,
7.625%, 6/1/23 .......................... 500,000 455,725
-------------
CONSUMER PRODUCTS--.1%
Eastman Kodak Company,
9.20%, 6/1/21 ........................... 300,000 316,530
-------------
ELECTRIC & GAS COMPANIES--2.5%
General Electric Capital Corp.,
7.50%, 5/15/05 .......................... 3,000,000 3,084,780
GTE Florida Inc.,
6.25%, 11/15/05 ......................... 3,000,000 2,927,520
Pacific Gas & Electric Co.,
7.25%, 3/1/26 ........................... 182,000 162,542
Potomac Electric Power Co.,
7.00%, 1/15/24 .......................... 200,000 175,000
Washington Gas Light Co.,
Medium Term Notes,
6.51%, 8/18/08 .......................... 500,000 478,460
-------------
6,828,302
-------------
FINANCIAL SERVICES--4.0%
Bank of America Corp.,
7.20%, 4/15/06 .......................... 1,500,000 1,491,420
<PAGE>
-24-
THE ALGER FUND
ALGER BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS (Continued)
October 31, 2000
Principal
Corporate Bonds--(cont.) Amount Value
------ -----
FINANCIAL SERVICES--(cont.)
Block Financial Corp.,
8.50%, 4/15/07 ..........................$ 500,000 $ 514,750
Chase Manhattan Corporation,
8.50%, 2/15/02 .......................... 200,000 202,988
Cit Group Inc.,
7.125%, 10/15/04 ........................ 1,000,000 979,860
Citicorp, 7.125%, 6/1/03 ................... 200,000 201,472
Countrywide Home Loan Inc.,
6.51%, 2/11/05 .......................... 1,524,000 1,458,209
6.935%, 7/16/07 ......................... 3,450,000 3,240,413
Goldman, Sachs Group,
6.65%, 5/15/09 .......................... 1,000,000 946,790
Morgan Stanley Dean Witter & Co.,
6.875%, 3/1/07 .......................... 2,000,000 1,949,940
-------------
10,985,842
-------------
RETAIL--.4%
Wal-Mart Stores Inc.,
6.55%, 8/10/04 .......................... 1,000,000 998,070
-------------
Total Corporate Bonds
(Cost $40,720,961) ...................... 40,672,515
-------------
U.S. Government & Agency Obligations--19.1%
Federal Home Loan Bank,
5.87%, 4/22/03 .......................... 300,000 295,782
5.935%, 4/22/05 ......................... 400,000 389,936
6.375%, 8/15/06 ......................... 3,000,000 2,968,800
7.625%, 5/15/07 ......................... 2,000,000 2,106,440
6.75%, 8/15/07 .......................... 3,000,000 3,021,390
6.12%, 8/26/08 .......................... 1,000,000 944,690
7.625%, 5/14/10 ......................... 2,000,000 2,125,880
Federal Home Loan Mortgage Corp.,
6.00%, 6/23/04 .......................... 1,500,000 1,462,260
5.75%, 4/15/08 .......................... 1,000,000 945,780
6.625%, 9/15/09 ......................... 1,200,000 1,192,500
6.875%, 9/15/10 ......................... 2,000,000 2,025,320
7.08%, 3/17/14 .......................... 400,000 381,436
Federal National Mortgage Assoc.,
5.38%, 1/16/01 .......................... 2,000,000 1,995,720
6.00%, 3/8/04 ........................... 3,000,000 2,950,260
7.125%, 2/15/05 ......................... 2,000,000 2,043,200
6.96%, 4/2/07 ........................... 500,000 507,420
7.49%, 5/22/07 .......................... 250,000 243,125
6.09%, 1/12/09 .......................... 1,000,000 935,470
7.00%, 3/4/13 ........................... 600,000 572,250
6.75%, 2/4/28 ........................... 400,000 361,252
U.S. Treasury Notes,
6.125%, 12/31/01 ........................ 1,000,000 998,440
6.50%, 3/31/02 .......................... 2,000,000 2,008,440
6.375%, 4/30/02 ......................... 2,000,000 2,006,880
7.50%, 5/15/02 .......................... 100,000 102,016
6.25%, 7/31/02 .......................... 3,500,000 3,511,410
6.25%, 2/15/03 .......................... 1,750,000 1,760,658
6.00%, 8/15/04 .......................... 1,500,000 1,506,795
5.875%, 11/15/04 ........................ 2,000,000 2,001,260
6.50%, 8/15/05 .......................... 6,000,000 6,165,000
6.50%, 10/15/06 ......................... 1,500,000 1,547,115
5.625%, 5/15/08 ......................... 1,500,000 1,479,615
6.00%, 8/15/09 .......................... 2,000,000 2,020,940
-------------
Total U.S. Government &
Agency Obligations
(Cost $52,082,016) ...................... 52,577,480
-------------
Short-Term Investments--17.3%
SHORT-TERM CORPORATE
NOTES--10.6%
Consolidated Natural Gas Company,
6.55%, 11/30/00 ......................... 5,400,000 5,371,507
Indiana Gas Company, Inc.,
6.48%, 11/8/00 .......................... 8,100,000 8,089,794
Merrill Lynch & Co., Inc.,
6.49%, 11/30/00 ......................... 8,100,000 8,057,653
Textron Financial Corporation,
6.52%, 11/17/00 ......................... 6,700,000 6,680,585
United Technologies Corporation,
6.47%, 11/1/00 (a) ...................... 900,000 900,000
-------------
Total Short-Term Corporate Notes
(Cost $29,099,539) ...................... 29,099,539
-------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--4.4%
Securities Held Under Repurchase
Agreements, 6.47%, 11/1/00, with
State Street Bank and Trust,
dtd 10/31/00, repurchase price
$12,102,175; collateralized by
Federal National Mortgage
Association Discount Notes
(par value $12,390,000
due 11/24/00) ........................... 12,100,000
-------------
OTHER SHORT-TERM
INVESTMENTS--2.3% Shares
Securities Lending Quality Trust ------
(Cost $6,418,900) (c) 6,418,900 6,418,900
-------------
Total Short-Term Investments
(Cost $47,618,439) ...................... 47,618,439
-------------
<PAGE>
-25-
THE ALGER FUND
ALGER BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS (Continued)
October 31, 2000
Value
-----
Total Investments
(Cost $278,832,513) (b) ................. 103.9% 286,158,070
Liabilities in Excess of Other Assets ...... (3.9) (10,771,769)
----- -------------
Net Assets ................................. 100.0% $ 275,386,301
===== =============
* Non-income producing security.
+ Securities partially or fully on loan.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity to qualified institutional buyers.
(b) At October 31, 2000, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $278,832,513 amounted to
$7,325,557 which consisted of aggregate gross unrealized appreciation of
$16,426,320 and aggregate gross unrealized depreciation of $9,100,763.
(c) Represents investments of cash collateral received for securities on loan.
See Notes to Financial Statements.
<PAGE>
-26-
THE ALGER FUND
ALGER BALANCED PORTFOLIO
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
Class A (i) Class B
------------------------------------------------- -----------------------
Ten Months
Year Ended October 31, Ended Year Ended October 31,
---------------------------------- October 31, -----------------------
2000 1999 1998 1997(iii) 2000 1999
------- ------- ------ ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ... $ 20.95 $ 16.83 $16.58 $ 13.99 $ 20.59 $ 16.64
------- ------- ------ ------- -------- -------
Net investment income (loss) ........... .39(iv) .25(iv) .16(iv) .05 .17(iv) .07(iv)
Net realized and unrealized gain (loss)
on investments ...................... 1.68 4.97 2.35 2.54 1.71 4.93
------- ------- ------ ------- -------- -------
Total from investment operations ....... 2.07 5.22 2.51 2.59 1.88 5.00
------- ------- ------ ------- -------- -------
Dividends from net investment income ... (.13) (.08) (.06) -- (.04) (.03)
Distributions from net realized gains .. (1.60) (1.02) (2.20) -- (1.60) (1.02)
------- ------- ------ ------- -------- -------
Total distributions .................... (1.73) (1.10) (2.26) -- (1.64) (1.05)
------- ------- ------ ------- -------- -------
Net asset value, end of period ......... $ 21.29 $ 20.95 $16.83 $ 16.58 $ 20.83 $ 20.59
======= ======= ====== ======= ======== =======
Total Return (v) ....................... 10.2% 32.5% 17.7% 18.5% 9.4% 31.5%
======= ======= ====== ======= ======== =======
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) ................... $93,671 $12,488 $1,354 $ 459 $132,123 $52,607
======= ======= ====== ======= ======== =======
Ratio of expenses to average
net assets ....................... 1.29% 1.40% 1.79% 2.10% 2.04% 2.18%
======= ======= ====== ======= ======== =======
Ratio of net investment income (loss)
to average net assets ............ 1.80% 1.15% .98% .72% .98% .36%
======= ======= ====== ======= ======== =======
Portfolio Turnover Rate ............. 63.50% 126.01% 93.23% 109.26% 63.50% 126.01%
======= ======= ====== ======= ======== =======
</TABLE>
(i) Initially offered January 1, 1997.
(ii) Initially offered August 1, 1997.
(iii) Ratios have been annualized; total return has not been annualized.
(iv) Amount was computed based on average shares outstanding during the period.
(v) Does not reflect the effect of any sales charges.
See Notes to Financial Statements.
<PAGE>
-27-
<TABLE>
<CAPTION>
Class B Class C (ii)
--------------------------------- --------------------------------------------------
Three Months
Year Ended October 31, Year Ended October 31, Ended
--------------------------------- ---------------------------------- October 31,
1998 1997 1996 2000 1999 1998 1997(iii)
------- ------- ------- ------- ------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ... $ 16.48 $ 14.21 $ 13.59 $ 20.65 $ 16.66 $16.49 $ 16.88
------- ------- ------- ------- ------- ------ -------
Net investment income (loss) ........... .03(iv) -- .12 .21(iv) .07(iv) .04(iv) (.01)
Net realized and unrealized gain (loss)
on investments ...................... 2.34 2.67 .72 1.67 4.95 2.33 (.38)
------- ------- ------- ------- ------- ------ -------
Total from investment operations ....... 2.37 2.67 .84 1.88 5.02 2.37 (.39)
------- ------- ------- ------- ------- ------ -------
Dividends from net investment income ... (.01) (.06) (.01) (.03) (0.01) -- --
Distributions from net realized gains .. (2.20) (.34) (.21) (1.60) (1.02) (2.20) --
------- ------- ------- ------- ------- ------ -------
Total distributions .................... (2.21) (.40) (.22) (1.63) (1.03) (2.20) --
------- ------- ------- ------- ------- ------ -------
Net asset value, end of period ......... $ 16.64 $ 16.48 $ 14.21 $ 20.90 $ 20.65 $16.66 $ 16.49
======= ======= ======= ======= ======= ====== =======
Total Return (v) ....................... 16.9% 19.3% 6.3% 9.3% 31.6% 16.8% (2.31%)
======= ======= ======= ======= ======= ====== =======
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) ................... $19,282 $12,653 $13,492 $49,592 $14,626 $ 334 $ 48
======= ======= ======= ======= ======= ====== =======
Ratio of expenses to average
net assets ....................... 2.58% 2.89% 2.70% 2.04% 2.16% 2.53% 2.77%
======= ======= ======= ======= ======= ====== =======
Ratio of net investment income (loss)
to average net assets ............ .19% .04% .47% .99% .38% .23% (.84%)
======= ======= ======= ======= ======= ====== =======
Portfolio Turnover Rate ............. 93.23% 109.26% 85.51% 63.50% 126.01% 93.23% 109.26%
======= ======= ======= ======= ======= ====== =======
</TABLE>
<PAGE>
[This page intentionally left blank]
<PAGE>
-29-
--------------------------------------------------------------------------------
Alger MidCap Growth Portfolio Portfolio Highlights Through October 31, 2000
(Unaudited)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Hypothetical $10,000 Investment in Class B Shares from 5/24/93 to 10/31/00
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
[The following table was depicted as a mountain chart in the printed material.]
ALGER MID CAP PLOT POINTS
Alger Midcap Growth B S&P MidCap 400 Index
5/24/93 10000 10000
10/31/93 12480 10714
10/31/94 13062 10969
10/31/95 19373 13295
10/31/96 20618 15600
10/31/97 25024 20694
10/31/98 26586 22084
10/31/99 35182 26736
10/31/2000 51513 35199
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in Alger MidCap Growth Class B shares and the S&P MidCap 400
Index on May 24, 1993, the inception date of the Alger MidCap Growth Portfolio,
through October 31, 2000. Figures for both the Alger MidCap Growth Class B
shares and the S&P MidCap 400 Index, an unmanaged index of common stocks,
include reinvestment of dividends. Performance for the Alger MidCap Growth Class
A and Class C shares will vary from the results shown above due to differences
in expenses and sales charges those classes bear.
--------------------------------------------------------------------------------
Performance Comparison as of 10/31/00+
Average Annual Total Returns
1 5 Since
Year Years Inception
-------------------------------------------------
Class A (Inception 1/1/97) 40.65% * 25.44%
S&P MidCap 400 Index 31.65% * 21.85%
--------------------------------------------------------------------------------
Class B (Inception 5/24/93) 41.42% 21.42% 24.63%
S&P MidCap 400 Index 31.65% 21.50% 18.42%
--------------------------------------------------------------------------------
Class C (Inception 8/1/97) 43.89% * 24.14%
S&P MidCap 400 Index 31.65% * 18.12%
--------------------------------------------------------------------------------
The Portfolio's average annual total returns include changes in share price and
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. Investment return and principal will fluctuate and the
Portfolio's shares, when redeemed, may be worth more or less than their original
cost.
+ Returns reflect maximum initial sales charges on Class A and Class C
shares and applicable contingent deferred sales charges on Class B and
Class C shares.
<PAGE>
-30-
THE ALGER FUND
ALGER MIDCAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2000
Common Stocks--83.2% Shares Value
------ -----
ADVERTISING--1.1%
Lamar Advertising Company, Cl. A* ........ 163,500 $ 7,848,000
-------------
AEROSPACE--.5%
General Dynamics Corporation ............. 55,000 3,935,971
-------------
AIRLINES--.4%
Continental Airlines, Inc. Cl. B* ........ 57,500 3,018,750
-------------
AUTOMOTIVE--1.1%
Harley-Davidson, Inc. .................... 160,900 7,753,369
-------------
BIO-TECHNOLOGY RESEARCH
& PRODUCTION--2.9%
Affymetrix Inc.* ......................... 48,400 2,680,150
Cephalon, Inc.* .......................... 140,400 7,528,950
QLT Inc.* ................................ 222,900 11,085,792
-------------
21,294,892
-------------
BROADCASTING--.4%
Entravision Communications
Corporation Cl. A* .................... 169,600 2,999,800
-------------
BUSINESS SERVICES--1.5%
CSG Systems International Inc.* .......... 77,800 3,612,838
Fiserv Inc.* ............................. 137,600 7,215,400
-------------
10,828,238
-------------
COMMUNICATION EQUIPMENT--1.6%
Efficient Networks, Inc.* ................ 111,400 4,673,578
Spectrasite Holdings, Inc.* .............. 361,000 7,129,750
-------------
11,803,328
-------------
COMMUNICATIONS
TECHNOLOGY--.4%
Exodus Communications, Inc.* ............. 88,800 2,980,350
-------------
COMPUTER SERVICES--5.4%
Amdocs Limited* .......................... 92,800 6,014,600
CNET Networks, Inc.* ..................... 428,700 13,504,050
eBay Inc.* ............................... 382,700 19,709,050
-------------
39,227,700
-------------
COMPUTER SOFTWARE--8.6%
Commerce One, Inc.* ...................... 247,000 15,854,313
Intuit Inc.* ............................. 447,900 27,517,856
PeopleSoft, Inc.* ........................ 267,900 11,691,323
Software.com, Inc.* ...................... 48,800 7,271,200
-------------
62,334,692
-------------
DRUGS & PHARMACEUTICALS--4.7%
ALZA Corporation* ........................ 344,400 27,874,875
AmeriSource Health Corporation
Cl. A* ................................ 139,800 6,072,563
-------------
33,947,438
-------------
ELECTRONICS: SEMICONDUCTORS/
COMPONENTS--.3%
Elantec Semiconductor Inc.* .............. 20,000 2,225,000
-------------
ENERGY & ENERGY SERVICES--13.1%
BJ Services Company* ..................... 416,000 21,814,000
Calpine Corporation* ..................... 168,700 13,316,756
Cooper Cameron Corporation* .............. 296,133 16,139,249
Nabors Industries, Inc.* ................. 450,250 22,917,725
Santa Fe International Corporation ....... 160,000 5,840,000
Smith International, Inc.* ............... 150,500 10,610,250
Southern Energy Inc.* .................... 30,000 817,500
Transocean Sedco Forex Inc. .............. 62,000 3,286,000
-------------
94,741,480
-------------
FINANCIAL SERVICES--3.4%
Concord EFS Inc.* ........................ 128,200 5,296,262
Stilwell Financial Inc. .................. 430,200 19,278,338
-------------
24,574,600
-------------
FOODS & BEVERAGES--3.0%
Starbucks Corporation* ................... 489,200 21,861,125
-------------
HEALTH CARE FACILITIES--1.5%
Laboratory Corporation of America
Holdings* ............................. 83,400 11,248,575
-------------
INDUSTRIAL EQUIPMENT--4.1%
SPX Corporation* ......................... 76,000 9,395,500
Waters Corporation* ...................... 278,700 20,223,169
-------------
29,618,669
-------------
MANUFACTURING--7.9%
Dover Corporation ........................ 124,600 5,287,712
Flextronics International Ltd.* .......... 59,000 2,242,000
Jabil Circuit, Inc.* ..................... 125,150 7,141,372
Millipore Corporation .................... 360,100 18,905,250
Sanmina Corporation* ..................... 206,700 23,628,394
-------------
57,204,728
-------------
MEDICAL SERVICES--1.0%
Express Scripts Inc. Cl. A* .............. 110,100 7,397,344
-------------
OIL & GAS--2.2%
Devon Energy Corporation ................. 171,800 8,658,720
EOG Resources Inc. ....................... 178,950 7,046,155
-------------
15,704,875
-------------
<PAGE>
-31-
THE ALGER FUND
ALGER MIDCAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (Continued)
October 31, 2000
Common Stocks--(cont.) Shares Value
------ -----
PHARMACEUTICALS--4.6%
Allergan, Inc. ........................... 45,200 $ 3,799,625
Forest Laboratories, Inc.* ............... 223,300 29,587,250
-------------
33,386,875
-------------
RESTAURANTS--2.4%
Outback Steakhouse, Inc.* ................ 611,850 17,437,725
-------------
RETAIL--.5%
Best Buy Co., Inc.* ...................... 68,200 3,422,788
-------------
SCIENTIFIC EQUIPMENT
& SUPPLIERS--.6%
Newport Corporation ...................... 35,000 3,997,108
-------------
SECURITIES BROKERAGE
& SERVICES--.4%
Investment Technology Group, Inc.* ....... 82,900 2,984,400
-------------
SEMICONDUCTOR CAPITAL EQUIPMENT--1.5%
ATMI, Inc.* .............................. 93,900 1,772,363
Teradyne, Inc.* .......................... 299,368 9,355,250
-------------
11,127,613
-------------
SEMICONDUCTORS--8.1%
Altera Corporation* ...................... 399,500 16,354,531
Linear Technology Corporation ............ 292,000 18,852,250
Microchip Technology
Incorporated* ......................... 653,525 20,667,728
Vishay Intertechnology, Inc.* ............ 90,000 2,700,000
-------------
58,574,509
-------------
Total Common Stocks
(Cost $507,064,691) ................... 603,479,942
-------------
Principal
Short-Term Investments--13.3% Amount Value
------ -----
SHORT-TERM CORPORATE NOTES--8.8%
Boeing Capital Corporation,
6.47%, 11/1/00 ........................ $11,800,000 $ 11,800,000
Cintas Executive Services,
6.47%, 11/9/00 ........................ 6,500,000 6,490,654
General Re Corporation,
6.47%, 11/30/00 ....................... 9,400,000 9,351,008
Rembrandt International Company
Holdings,
6.52%, 11/28/00 (a) ................... 21,400,000 21,295,354
Textron Financial Corporation,
6.52%, 11/17/00 ....................... 15,200,000 15,155,954
-------------
Total Short-Term Corporate Notes
(Cost $64,092,970) .................... 64,092,970
-------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--4.5%
Securities Held Under Repurchase
Agreements, 6.47%, 11/1/00,
with State Street Bank and Trust
Company, dtd 10/31/00, repurchase
price $32,205,787; collateralized
by Federal National Mortgage
Association Discount Notes (par
value $32,970,000 due 11/24/00) ....... 32,200,000
-------------
Total Short-Term Investments
(Cost $96,292,970) .................... 96,292,970
-------------
Total Investments
(Cost $603,357,661) (b) ............... 96.5% 699,772,912
Other Assets in Excess of Liabilities .... 3.5 25,595,651
----- -------------
Net Assets ............................... 100.0% $ 725,368,563
===== =============
* Non-income producing security.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity to qualified institutional buyers.
(b) At October 31, 2000, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $603,357,661, amounted to
$96,415,251 which consisted of aggregate gross unrealized appreciation of
$134,266,923 and aggregate gross unrealized depreciation of $37,851,672.
See Notes to Financial Statements.
<PAGE>
-32-
THE ALGER FUND
ALGER MIDCAP GROWTH PORTFOLIO(i)
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
Class A (ii) Class B
---------------------------------------------------- -----------------------
Ten Months
Year Ended October 31, Ended Year Ended October 31,
------------------------------------ October 31, -----------------------
2000 1999 1998 1997(iv) 2000 1999
-------- ------- ------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ... $ 8.20 $ 7.07 $ 7.49 $ 6.31 $ 8.00 $ 6.96
-------- ------- ------- ------- -------- --------
Net investment income (loss) ........... (.04)(v) (.05)(v) (.03)(v) (.03) (.12)(v) (.11)(v)
Net realized and unrealized gain (loss)
on investments ...................... 3.51 2.16 .43 1.21 3.41 2.13
-------- ------- ------- ------- -------- --------
Total from investment operations ....... 3.47 2.11 .40 1.18 3.29 2.02
Distributions from net realized gains .. (1.50) (.98) (.82) -- (1.50) (.98)
-------- ------- ------- ------- -------- --------
Net asset value, end of period ......... $ 10.17 $ 8.20 $ 7.07 $ 7.49 $ 9.79 $ 8.00
======== ======= ======= ======= ======== ========
Total Return (vi) ...................... 47.7% 33.3% 7.2% 18.7% 46.4% 32.3%
======== ======= ======= ======= ======== ========
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) .................... $141,558 $49,246 $32,447 $ 5,436 $532,476 $248,139
======== ======= ======= ======= ======== ========
Ratio of expenses to average
net assets ....................... 1.29% 1.31% 1.34% 1.40% 2.04% 2.07%
======== ======= ======= ======= ======== ========
Ratio of net investment income (loss)
to average net assets ............ (.46%) (.58%) (.53%) (.83%) (1.23%) (1.39%)
======== ======= ======= ======= ======== ========
Portfolio Turnover Rate ............. 97.11% 203.86% 180.98% 160.09% 97.11% 203.86%
======== ======= ======= ======= ======== ========
</TABLE>
(i) Per share data has been adjusted to reflect the effect of a 3 for 1 stock
split which occurred April 20, 2000.
(ii) Initially offered January 1, 1997.
(iii) Initially offered August 1, 1997.
(iv) Ratios have been annualized; total return has not been annualized.
(v) Amount was computed based on average shares outstanding during the period.
(vi) Does not reflect the effect of any sales charges.
See Notes to Financial Statements.
<PAGE>
-33-
<TABLE>
<CAPTION>
Class B
------------------------------------
Year Ended October 31,
------------------------------------
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period ... $ 7.44 $ 6.29 $ 6.31
-------- -------- --------
Net investment income (loss) ........... (.10)(v) (.10) (.08)(v)
Net realized and unrealized gain (loss)
on investments ...................... .44 1.41 .45
-------- -------- --------
Total from investment operations ....... .34 1.31 .37
Distributions from net realized gains .. (.82) (.16) (.39)
-------- -------- --------
Net asset value, end of period ......... $ 6.96 $ 7.44 $ 6.29
======== ======== ========
Total Return (vi) ...................... 6.2% 21.4% 6.4%
======== ======== ========
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) .................... $191,934 $166,475 $125,686
======== ======== ========
Ratio of expenses to average
net assets ....................... 2.10% 2.19% 2.27%
======== ======== ========
Ratio of net investment income (loss)
to average net assets ............ (1.38%) (1.58%) (1.33%)
======== ======== ========
Portfolio Turnover Rate ............. 180.98% 160.09% 113.95%
======== ======== ========
<CAPTION>
Class C (iii)
----------------------------------------------------
Three Months
Year Ended October 31, Ended
----------------------------------- October 31,
2000 1999 1998 1997(iv)
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ... $ 7.99 $ 6.95 $ 7.44 $ 7.50
------- ------- ------- -------
Net investment income (loss) ........... (.11)(v) (.11)(v) (.09)(v) (.01)
Net realized and unrealized gain (loss)
on investments ...................... 3.39 2.13 .42 (.05)
------- ------- ------- -------
Total from investment operations ....... 3.28 2.02 .33 (.06)
Distributions from net realized gains .. (1.50) (.98) (.82) --
------- ------- ------- -------
Net asset value, end of period ......... $ 9.77 $ 7.99 $ 6.95 $ 7.44
======= ======= ======= =======
Total Return (vi) ...................... 46.4% 32.4% 6.1% (.7%)
======= ======= ======= =======
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) .................... $51,335 $10,827 $ 1,759 $ 84
======= ======= ======= =======
Ratio of expenses to average
net assets ....................... 2.04% 2.08% 2.08% 1.97%
======= ======= ======= =======
Ratio of net investment income (loss)
to average net assets ............ (1.22%) (1.40%) (1.26%) (1.55%)
======= ======= ======= =======
Portfolio Turnover Rate ............. 97.11% 203.86% 180.98% 160.09%
======= ======= ======= =======
</TABLE>
<PAGE>
[This page intentionally left blank]
<PAGE>
-35-
--------------------------------------------------------------------------------
Alger Capital Appreciation Portfolio Portfolio Highlights Through October 31,
2000 (Unaudited)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Hypothetical $10,000 Investment in Class B Shares from 11/1/93 to 10/31/00
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
[The following table was depicted as a mountain chart in the printed material.]
ALGER CAPITAL APPRECIATION PLOT POINTS
Alger Capital Appreciation B S&P 500 Index
11/1/93 10000 10000
10/31/94 11110 10387
10/31/95 18620 13133
10/31/96 22246 16297
10/31/97 26918 21531
10/31/98 29572 26267
10/31/99 48198 33009
10/31/2000 53789 35024
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in Alger Capital Appreciation Class B shares and the S&P 500
Index on November 1, 1993, the inception date of the Alger Capital Appreciation
Portfolio, through October 31, 2000. Figures for the Alger Capital Appreciation
Class B shares and the S&P 500 Index, an unmanaged index of common stocks,
include reinvestment of dividends. Performance for Alger Capital Appreciation
Class A and Class C shares will vary from the results shown above due to
differences in expenses and sales charges those classes bear.
--------------------------------------------------------------------------------
Performance Comparison as of 10/31/00+
Average Annual Total Returns
1 5 Since
Year Years Inception
-------------------------------------------------
Class A (Inception 1/1/97) 7.28% * 25.12%
S&P 500 Index 6.10% * 20.40%
--------------------------------------------------------------------------------
Class B (Inception 11/1/93) 6.67% 23.46% 27.16%
S&P 500 Index 6.10% 21.67% 19.60%
--------------------------------------------------------------------------------
Class C (Inception 8/1/97) 9.60% * 21.01%
S&P 500 Index 6.10% * 14.77%
--------------------------------------------------------------------------------
The Portfolio's average annual total returns include changes in share price and
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. Investment return and principal will fluctuate and the
Portfolio's shares, when redeemed, may be worth more or less than their original
cost.
+ Returns reflect maximum initial sales charges on Class A and Class C
shares and applicable contingent deferred sales charges on Class B and
Class C shares.
<PAGE>
-36-
THE ALGER FUND
ALGER CAPITAL APPRECIATION PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2000
Common Stocks--83.9 % Shares Value
------ -----
BIO-TECHNOLOGY RESEARCH & PRODUCTION--4.7%
Affymetrix Inc.* ........................ 97,000 $ 5,371,375
Amgen Inc.* ............................. 820,850 47,557,997
Celgene Corporation*+ ................... 170,900 11,001,688
QLT Inc.*+ .............................. 230,000 11,438,906
-------------
75,369,966
-------------
CABLE--1.1%
Comcast Corp., Cl. A Special* ........... 419,400 17,090,550
-------------
COMMUNICATION EQUIPMENT--7.2%
Cisco Systems, Inc.* .................... 922,500 49,699,688
Nortel Networks Corporation ............. 854,100 38,861,550
QUALCOMM Inc.* .......................... 274,000 17,839,969
Redback Networks Inc.*+ ................. 81,200 8,642,725
-------------
115,043,932
-------------
COMMUNICATIONS TECHNOLOGY--5.0%
America Online, Inc.* ................... 706,850 35,646,446
AT&T Corp. Liberty Media
Group, Series A* ..................... 542,200 9,759,600
Exodus Communications, Inc.* ............ 222,500 7,467,656
McLeodUSA Incorporated Cl. A*+ .......... 295,000 5,678,750
Research in Motion Limited* ............. 213,800 21,380,000
-------------
79,932,452
-------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--6.6%
EMC Corporation* ........................ 282,750 25,182,422
Hewlett-Packard Company ................. 235,100 10,917,456
Sun Microsystems, Inc.* ................. 629,900 69,840,163
-------------
105,940,041
-------------
COMPUTER SERVICES--5.2%
Amdocs Limited* ......................... 385,300 24,972,256
CNET Networks, Inc.*+ ................... 239,200 7,534,800
eBay Inc.*+ ............................. 924,000 47,586,000
Yahoo Inc.* ............................. 55,900 3,277,138
-------------
83,370,194
-------------
COMPUTER SOFTWARE--15.0%
Ariba, Inc.* ............................ 389,450 49,216,744
BEA Systems, Inc.*+ ..................... 402,200 28,857,850
Business Objects ADS* ................... 71,000 5,594,578
Commerce One, Inc.*+ .................... 288,500 18,518,094
i2 Technologies, Inc.* .................. 256,400 43,588,000
Mercury Interactive Corporation* ........ 126,000 13,986,000
Oracle Corporation* ..................... 986,200 32,544,600
Phone.com Inc.*+ ........................ 475,200 43,985,700
Vitria Technology, Inc.*+ ............... 143,800 3,864,625
-------------
240,156,191
-------------
CONGLOMERATE--2.5%
General Electric Company ................ 558,212 30,596,995
Tyco International Ltd. ................. 167,100 9,472,481
-------------
40,069,476
-------------
ENERGY & ENERGY SERVICES--1.2%
Calpine Corporation*+ ................... 138,650 10,944,684
Duke Energy Corporation ................. 95,500 8,254,781
-------------
19,199,465
-------------
FINANCIAL SERVICES--8.0%
Bank of New York Inc. ................... 130,000 7,483,125
Citigroup Inc. .......................... 1,105,933 58,199,724
Marsh & McLennan Companies, Inc. ........ 219,515 28,701,586
Schwab (Charles) Corporation (The) ...... 704,350 24,740,294
State Street Corp. ...................... 30,600 3,817,044
Stilwell Financial Inc. ................. 117,700 5,274,431
-------------
128,216,204
-------------
FOOD CHAINS--1.9%
Safeway Inc.* ........................... 566,400 30,975,000
-------------
INSURANCE--2.5%
American International Group, Inc. ...... 415,275 40,696,950
-------------
MANUFACTURING--1.4%
Solectron Corporation* .................. 516,700 22,734,800
-------------
MEDICAL DEVICES--1.2%
Guidant Corporation* .................... 147,750 7,821,516
Medtronic, Inc. ......................... 217,100 11,791,244
-------------
19,612,760
-------------
PHARMACEUTICALS--9.3%
American Home Products Corporation ...... 711,700 45,192,950
Baxter International Inc. ............... 315,900 25,963,030
Eli Lilly and Company ................... 341,450 30,517,094
Pfizer Inc. ............................. 1,082,912 46,768,262
-------------
148,441,336
-------------
RETAIL--5.2%
Home Depot, Inc. ........................ 957,125 41,156,375
Wal-Mart Stores, Inc. ................... 927,500 42,085,313
-------------
83,241,688
-------------
<PAGE>
-37-
THE ALGER FUND
ALGER CAPITAL APPRECIATION PORTFOLIO
SCHEDULE OF INVESTMENTS (Continued)
October 31, 2000
Common Stocks--(cont.) Shares Value
------ -----
SEMICONDUCTORS--5.9%
Altera Corporation* ..................... 847,000 $ 34,674,062
Broadcom Corporation Cl. A* ............. 194,000 43,140,750
Texas Instruments, Incorporated ......... 209,350 10,271,234
Vitesse Semiconductor Corporation* ...... 104,900 7,336,444
--------------
95,422,490
--------------
Total Common Stocks
(Cost $1,281,940,746) 1,345,513,495
--------------
Preferred Stock--2.0%
COMMUNICATION EQUIPMENT
Nokia Corporation, ADR
(Cost $29,019,575) ................... 765,550 32,727,263
--------------
Principal
Short-Term Investments--23.9% Amount
------
SHORT-TERM CORPORATE NOTES--11.0%
Aetna Services, Inc.,
6.60%, 11/28/00 ...................... $50,000,000 49,752,500
Caisse Centrale Desjardins du Quebec,
6.47%, 11/30/00 ...................... 3,800,000 3,780,195
Cintas Executive Services,
6.47%, 11/9/00 ....................... 29,200,000 29,158,017
General Re Corporation,
6.47%, 11/30/00 ...................... 50,000,000 49,739,403
Merrill Lynch & Co., Inc.,
6.48%, 11/8/00 ....................... 6,400,000 6,391,936
Schering Corporation,
6.42%, 11/20/00 ...................... 38,000,000 37,871,243
--------------
Total Short-Term Corporate Notes
(Cost $176,693,294) .................. 176,693,294
--------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--4.5%
Securities Held Under Repurchase
Agreements, 6.47%, 11/1/00,
with State Street Bank and Trust,
dtd 10/31/00, repurchase price
$72,212,976; collateralized by
U.S. Treasury Bonds (par value
$56,445,000, 8.50%, due 2/15/20) $ 72,200,000
--------------
OTHER SHORT-TERM
INVESTMENTS--8.4% Shares
Securities Lending Quality Trust ------
(Cost $134,609,456) (b) .............. 134,609,456 134,609,456
--------------
Total Short-Term Investments
(Cost $383,502,750) 383,502,750
--------------
Total Investments
(Cost $1,694,463,071) (a) ............ 109.8% 1,761,743,508
Liabilities in Excess of Other Assets ... (9.8) (157,953,395)
----- --------------
Net Assets 100.0% $1,603,790,113
===== ==============
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At October 31, 2000, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $1,694,463,071, amounted to
$67,280,437 which consisted of aggregate gross unrealized appreciation of
$178,771,339 and aggregate gross unrealized depreciation of $111,490,902.
(b) Represents investments of cash collateral received for securities on loan.
See Notes to Financial Statements.
<PAGE>
-38-
THE ALGER FUND
ALGER CAPITAL APPRECIATION PORTFOLIO(i)
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
Class A (ii)
-----------------------------------------------------------------
Ten Months
Year Ended October 31, Ended
----------------------------------------------- October 31,
2000 1999 1998 1997(iv)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ... $ 13.57 $ 9.03 $ 8.72 $ 7.20
----------- ----------- ----------- -----------
Net investment income (loss) ........... (.11)(v) (.12)(v) (.05)(v) (.03)
Net realized and unrealized gain (loss)
on investments ...................... 2.01 5.50 .90 1.55
----------- ----------- ----------- -----------
Total from investment operations ....... 1.90 5.38 .85 1.52
Distributions from net realized gains .. (1.93) (.84) (.54) --
----------- ----------- ----------- -----------
Net asset value, end of period ......... $ 13.54 $ 13.57 $ 9.03 $ 8.72
=========== =========== =========== ===========
Total Return (vi) ...................... 12.6% 63.9% 10.7% 21.2%
=========== =========== =========== ===========
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) ................... $ 366,296 $ 147,929 $ 54,415 $ 15,572
=========== =========== =========== ===========
Ratio of expenses excluding interest
to average net assets ............ 1.36% 1.38% 1.42% 1.45%
=========== =========== =========== ===========
Ratio of expenses including interest
to average net assets ............ 1.36% 1.44% 1.49% 1.53%
=========== =========== =========== ===========
Ratio of net investment income (loss)
to average net assets ............ (.66%) (.98%) (.67%) (.85%)
=========== =========== =========== ===========
Portfolio Turnover Rate ............. 132.37% 186.93% 184.07% 157.63%
=========== =========== =========== ===========
Amount of debt
outstanding at end of period ..... -- -- -- --
=========== =========== =========== ===========
Average amount of debt
outstanding during the period .... $ 138,087 $ 7,758,649 $ 2,814,493 $ 2,940,097
=========== =========== =========== ===========
Average daily number of portfolio
shares outstanding during the period 97,199,509 42,330,298 29,012,853 23,217,597
=========== =========== =========== ===========
Average amount of debt per portfolio
share during the period .......... -- $ 0.18 $ 0.10 $ 0.13
=========== =========== =========== ===========
<CAPTION>
Class B
-----------------------------
Year Ended October 31,
-----------------------------
2000 1999
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ... $ 13.28 $ 8.90
----------- -----------
Net investment income (loss) ........... (.22)(v) (.21)(v)
Net realized and unrealized gain (loss)
on investments ...................... 1.96 5.43
----------- -----------
Total from investment operations ....... 1.74 5.22
Distributions from net realized gains .. (1.93) (.84)
----------- -----------
Net asset value, end of period ......... $ 13.09 $ 13.28
=========== ===========
Total Return (vi) ...................... 11.6% 63.0%
=========== ===========
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) ................... $ 1,056,831 $ 594,971
=========== ===========
Ratio of expenses excluding interest
to average net assets ............ 2.11% 2.12%
=========== ===========
Ratio of expenses including interest
to average net assets ............ 2.11% 2.21%
=========== ===========
Ratio of net investment income (loss)
to average net assets ............ (1.41%) (1.77%)
=========== ===========
Portfolio Turnover Rate ............. 132.37% 186.93%
=========== ===========
Amount of debt
outstanding at end of period ..... -- --
=========== ===========
Average amount of debt
outstanding during the period .... $ 138,087 $ 7,758,649
=========== ===========
Average daily number of portfolio
shares outstanding during the period 97,199,509 42,330,298
=========== ===========
Average amount of debt per portfolio
share during the period .......... -- $ 0.18
=========== ===========
</TABLE>
(i) Per share data has been adjusted to reflect the effect of a 3 for 1 stock
split which occurred January 8, 1998.
(ii) Initially offered January 1, 1997.
(iii) Initially offered August 1, 1997.
(iv) Ratios have been annualized; total return has not been annualized.
(v) Amount was computed based on average shares outstanding during the period.
(vi) Does not reflect the effect of any sales charges.
See Notes to Financial Statements.
<PAGE>
-39-
<TABLE>
<CAPTION>
Class B
---------------------------------------------
Year Ended October 31,
---------------------------------------------
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period ...... $ 8.67 $ 7.21 $ 6.21
----------- ----------- -----------
Net investment income (loss) .............. (.13)(v) (.11) (.11)(v)
Net realized and unrealized gain (loss)
on investments ......................... .90 1.62 1.29
----------- ----------- -----------
Total from investment operations .......... .77 1.51 1.18
Distributions from net realized gains ..... (.54) (.05) (.18)
----------- ----------- -----------
Net asset value, end of period ............ $ 8.90 $ 8.67 $ 7.21
=========== =========== ===========
Total Return (vi) ......................... 9.9% 21.0% 19.5%
=========== =========== ===========
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) ...................... $ 242,941 $ 212,895 $ 150,258
=========== =========== ===========
Ratio of expenses excluding interest
to average net assets ............... 2.19% 2.27% 2.44%
=========== =========== ===========
Ratio of expenses including interest
to average net assets ............... 2.26% 2.38% 2.46%
=========== =========== ===========
Ratio of net investment income (loss)
to average net assets ............... (1.48%) (1.72%) (1.61%)
=========== =========== ===========
Portfolio Turnover Rate ................ 184.07% 157.63% 162.37%
=========== =========== ===========
Amount of debt
outstanding at end of period ........ -- -- $ 7,700,000
=========== =========== ===========
Average amount of debt
outstanding during the period ....... $ 2,814,493 $ 2,940,097 $ 239,966
=========== =========== ===========
Average daily number of portfolio
shares outstanding during the period 29,012,853 23,217,597 14,556,858
=========== =========== ===========
Average amount of debt per portfolio
share during the period ............. $ 0.10 $ 0.13 $ 0.02
=========== =========== ===========
<CAPTION>
Class C (iii)
-----------------------------------------------------------------
Three Months
Year Ended October 31, Ended
----------------------------------------------- October 31,
2000 1999 1998 1997(iv)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ...... $ 13.27 $ 8.90 $ 8.67 $ 9.22
----------- ----------- ----------- -----------
Net investment income (loss) .............. (.22)(v) (.22)(v) (.12)(v) (.02)
Net realized and unrealized gain (loss)
on investments ......................... 1.97 5.43 .89 (.53)
----------- ----------- ----------- -----------
Total from investment operations .......... 1.75 5.21 .77 (.55)
Distributions from net realized gains ..... (1.93) (.84) (.54) --
----------- ----------- ----------- -----------
Net asset value, end of period ............ $ 13.09 $ 13.27 $ 8.90 $ 8.67
=========== =========== =========== ===========
Total Return (vi) ......................... 11.7% 62.9% 9.9% (6.0%)
=========== =========== =========== ===========
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) ...................... $ 180,663 $ 43,789 $ 2,967 $ 631
=========== =========== =========== ===========
Ratio of expenses excluding interest
to average net assets ............... 2.12% 2.12% 2.18% 2.18%
=========== =========== =========== ===========
Ratio of expenses including interest
to average net assets ............... 2.12% 2.21% 2.25% 2.25%
=========== =========== =========== ===========
Ratio of net investment income (loss)
to average net assets ............... (1.42%) (1.80%) (1.46%) (1.80%)
=========== =========== =========== ===========
Portfolio Turnover Rate ................ 132.37% 186.93% 184.07% 157.63%
=========== =========== =========== ===========
Amount of debt
outstanding at end of period ........ -- -- -- --
=========== =========== =========== ===========
Average amount of debt
outstanding during the period ....... $ 138,087 $ 7,758,649 $ 2,814,493 $ 2,940,097
=========== =========== =========== ===========
Average daily number of portfolio
shares outstanding during the period 97,199,509 42,330,298 29,012,853 23,217,597
=========== =========== =========== ===========
Average amount of debt per portfolio
share during the period ............. -- $ 0.18 $ 0.10 $ 0.13
=========== =========== =========== ===========
</TABLE>
<PAGE>
-40-
THE ALGER FUND
ALGER MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 2000
Short-Term Corporate Principal
Notes--64.7% Amount Value
------ -----
AEROSPACE--3.4%
Honeywell International Inc.,
6.47%, 11/9/00 ......................... $8,000,000 $ 7,988,498
-------------
BANKS--3.4%
Svenska Handelsbanken, Inc.,
6.50%, 1/26/01 ......................... 8,000,000 7,875,778
-------------
BUILDING & CONSTRUCTION--3.4%
WW Grainger Inc.,
6.50%, 1/29/01 ......................... 8,000,000 7,871,444
-------------
COMMUNICATIONS
TECHNOLOGY--6.8%
BellSouth Telecommunications, Inc.,
6.43%, 12/1/00 ......................... 8,000,000 7,957,133
France Telecom,
6.48%, 12/14/00(a) ..................... 8,000,000 7,938,080
-------------
15,895,213
-------------
CONGLOMERATE--3.4%
Fluor Corporation,
6.49%, 11/14/00(a) ..................... 8,000,000 7,981,251
-------------
ELECTRONICS--3.4%
Hitachi Credit America Corp.,
6.50%, 12/5/00 ......................... 8,000,000 7,950,889
-------------
ENERGY & ENERGY SERVICES--6.8%
Allegheny Energy,
6.50%, 12/4/00 ......................... 8,000,000 7,952,333
Centennial Energy Holdings, Inc.,
6.52%, 12/5/00(a) ...................... 8,000,000 7,950,738
-------------
15,903,071
-------------
FINANCIAL SERVICES--13.6%
AEP Credit Incorporated,
6.48%, 11/28/00 ........................ 8,000,000 7,961,120
Fairway Finance Corporation,
6.55%, 11/1/00(a) ...................... 8,000,000 8,000,000
General Electric Capital Corporation,
6.49%, 1/16/01 ......................... 8,000,000 7,890,391
Merrill Lynch & Co., Inc.,
6.48%, 11/16/00 ........................ 8,000,000 7,978,400
-------------
31,829,911
-------------
MORTGAGE COMPANIES--6.8%
Homeside Lending, Inc.,
6.49%, 11/3/00 ......................... 8,000,000 7,997,116
Woolwich PLC,
6.52%, 1/10/01 ......................... 8,000,000 7,898,578
-------------
15,895,694
-------------
RETAIL--6.9%
May Department Stores Company
(The), 6.45%, 11/17/00 ................. 8,000,000 7,977,067
Nike, Inc.,
6.47%, 11/16/00 ........................ 8,000,000 7,978,433
-------------
15,955,500
-------------
TELEPHONES--3.4%
AT&T Corp.,
6.46%, 12/13/00 ........................ 8,000,000 7,939,707
-------------
UTILITIES--3.4%
Kansas City Power & Light
Company, 6.48%, 11/29/00 ............... 8,000,000 7,959,680
-------------
Total Short-Term Corporate Notes
(Cost $151,046,636) .................... 151,046,636
-------------
U.S. Government & Agency Obligations--69.6%
Federal Home Loan Mortgage Corp.,
6.35%, 11/1/00
(Cost $162,500,000) ....................162,500,000 162,500,000
-------------
Securities Held Under Repurchase
Agreements--4.6%
Securities Held Under Repurchase
Agreements, 6.47%, 11/1/00,
with State Street Bank and Trust
Company, dtd 10/31/00, repurchase
price $10,801,941; collateralized
by Federal Home Loan Bank
Notes (par value $11,060,000,
5.70%, due 8/2/02) ..................... 10,800,000
-------------
Total Investments
(Cost $324,346,636)(b) ................. 138.9% 324,346,636
Liabilities in Excess of Other Assets ..... (38.9) (90,820,825)
----- -------------
Net Assets ................................ 100.0% $ 233,525,811
===== =============
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity only to qualified institutional
buyers.
(b) At October 31, 2000, the net unrealized appreciation on investments based
on cost for federal income tax purposes was the same as the cost for
financial reporting purposes.
See Notes to Financial Statements.
<PAGE>
-41-
THE ALGER FUND
Alger MONEY MARKET PORTFOLIO
Financial Highlights
For a share outstanding throughout the year
<TABLE>
<CAPTION>
Year Ended October 31,
------------------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year .... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- --------
Net investment income ................. .0527 .0423 .0476 .0479 .0521
Dividends from net investment income .. (.0527) (.0423) (.0476) (.0479) (.0521)
-------- -------- -------- -------- --------
Net asset value, end of year .......... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ========
Total Return .......................... 5.4% 4.3% 4.9% 4.9% 5.3%
======== ======== ======== ======== ========
Ratios and Supplemental Data:
Net assets, end of year
(000's omitted) .................... $233,526 $241,310 $172,862 $179,407 $285,702
======== ======== ======== ======== ========
Ratio of expenses to average net assets .78% .72% .76% .81% .41%
======== ======== ======== ======== ========
Decrease reflected in above
expense ratios due to
management fee waivers ............. -- -- -- -- .38%
======== ======== ======== ======== ========
Ratio of net investment income
to average net assets .............. 5.14% 4.37% 4.84% 4.76% 5.18%
======== ======== ======== ======== ========
</TABLE>
See Notes to Financial Statements.
<PAGE>
-42-
THE ALGER FUND
STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except per share amounts)
October 31, 2000
<TABLE>
<CAPTION>
Small Capital
LargeCap 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 accompanying
schedules of investments .............. $ 1,341,466 $ 449,626 $ 286,158 $ 699,773 $ 1,761,743 $ 324,347
Cash .................................... 45 19 15 11 47 54
Receivable for investment securities sold 21,209 12,127 955 15,661 32,083 --
Receivable for shares of beneficial
interest sold ......................... 22,382 11,425 2,499 14,665 61,044 237
Dividends and interest
receivable ............................ 191 8 1,587 23 115 2
Prepaid expenses ........................ 21 49 3 24 3 11
----------- ----------- ----------- ----------- ----------- -----------
Total Assets ............................ 1,385,314 473,254 291,217 730,157 1,855,035 324,651
----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES:
Payable for securities loaned ........... 24,572 -- 6,419 -- 134,609 --
Payable for investment
securities purchased .................. 65,205 23,695 8,671 2,895 111,003 --
Payable for shares of beneficial
interest redeemed ..................... 1,138 346 234 559 2,172 90,571
Accrued investment management fees ...... 817 329 174 476 1,190 149
Accrued distribution fees ............... 625 225 115 366 831 --
Accrued shareholder servicing fees ...... 273 97 58 149 350 --
Dividends payable--Note 2(e) ............ -- -- -- -- -- 165
Accrued expenses ........................ 570 412 160 343 1,090 240
----------- ----------- ----------- ----------- ----------- -----------
Total Liabilities ..................... 93,200 25,104 15,831 4,788 251,245 91,125
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS .............................. $ 1,292,114 $ 448,150 $ 275,386 $ 725,369 $ 1,603,790 $ 233,526
=========== =========== =========== =========== =========== ===========
Net Assets Consist of:
Paid-in capital ....................... $ 1,105,305 $ 341,637 $ 267,243 $ 552,831 $ 1,522,474 $ 233,605
Undistributed net investment
income (accumulated loss) ............ (11,368) (7,913) 1,915 (5,729) (18,684) --
Undistributed net realized
gain (accumulated loss) .............. 72,590 89,304 (1,097) 81,852 32,719 (79)
Net unrealized appreciation ........... 125,587 25,122 7,325 96,415 67,281
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS .............................. $ 1,292,114 $ 448,150 $ 275,386 $ 725,369 $ 1,603,790 $ 233,526
=========== =========== =========== =========== =========== ===========
Class A
Net Asset Value Per Share ............. $ 14.09 $ 8.81 $ 21.29 $ 10.17 $ 13.54 --
=========== =========== =========== =========== =========== ===========
Offering Price Per Share .............. $ 14.79 $ 9.25 $ 22.35 $ 10.68 $ 14.22 --
=========== =========== =========== =========== =========== ===========
Class B
Net Asset Value and
Offering Price Per Share ............. $ 13.58 $ 8.52 $ 20.83 $ 9.79 $ 13.09 $ 1.00
=========== =========== =========== =========== =========== ===========
Class C
Net Asset Value Per Share ............. $ 13.57 $ 8.53 $ 20.90 $ 9.77 $ 13.09 --
=========== =========== =========== =========== =========== ===========
Offering Price Per Share .............. $ 13.71 $ 8.62 $ 21.11 $ 9.87 $ 13.22 --
=========== =========== =========== =========== =========== ===========
Shares of beneficial interest
outstanding--Note 6
Class A ............................... 22,997 12,669 4,401 13,925 27,050 --
=========== =========== =========== =========== =========== ===========
Class B ............................... 66,449 38,192 6,344 54,416 80,720 233,605
=========== =========== =========== =========== =========== ===========
Class C ............................... 4,856 1,302 2,373 5,255 13,804 --
=========== =========== =========== =========== =========== ===========
*Identified cost ........................ $ 1,215,879 $ 424,504 $ 278,833 $ 603,358 $ 1,694,463 $ 324,347
=========== =========== =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
<PAGE>
-43-
THE ALGER FUND
STATEMENTS of operations (in thousands)
For the year ended October 31, 2000
<TABLE>
<CAPTION>
Small Capital
LargeCap 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 .................................. $ 4,964 $ 243 $ 385 $ 400 $ 2,566 $ --
Interest ................................... 6,328 2,847 4,554 3,828 7,833 18,349
--------- --------- --------- --------- --------- ---------
Total Income ............................... 11,292 3,090 4,939 4,228 10,399 18,349
--------- --------- --------- --------- --------- ---------
Expenses:
Management fees--Note 3(a) ................ 9,539 4,627 1,220 4,160 12,610 1,551
Distribution fees--Note 3(b):
Class B ................................. 6,929 3,319 697 3,040 7,795 --
Class C ................................. 406 89 232 213 1,087 --
Shareholder servicing fees--Note 3(f) ..... 3,180 1,361 407 1,300 3,716 --
Interest on line of credit utilized--Note 5 -- 11 -- -- 10 7
Custodian fees ............................ 106 59 23 51 124 52
Transfer agent fees and
expenses--Note 3(e) ..................... 1,880 1,254 277 847 2,830 588
Professional fees ......................... 31 29 16 30 21 15
Trustees' fees ............................ 6 6 6 6 6 6
Registration fees ......................... 204 62 97 144 393 151
Miscellaneous ............................. 379 186 49 166 491 49
--------- --------- --------- --------- --------- ---------
Total Expenses ............................. 22,660 11,003 3,024 9,957 29,083 2,419
--------- --------- --------- --------- --------- ---------
NET INVESTMENT
INCOME (LOSS) ............................ (11,368) (7,913) 1,915 (5,729) (18,684) 15,930
--------- --------- --------- --------- --------- ---------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments ..... 82,649 92,099 (924) 84,452 39,348 (3)
Net change in unrealized appreciation
(depreciation) on investments .............. (5,654) (83,423) 1,906 71,287 (49,790) --
--------- --------- --------- --------- --------- ---------
Net realized and unrealized
gain (loss) on investments ................. 76,995 8,676 982 155,739 (10,442) (3)
--------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ............................... $ 65,627 $ 763 $ 2,897 $ 150,010 $ (29,126) $ 15,927
========= ========= ========= ========= ========= =========
</TABLE>
* Prior to September 29, 2000, the Alger LargeCap Growth Portfolio was the
Alger Growth Portfolio.
See Notes to Financial Statements.
<PAGE>
-44-
THE ALGER FUND
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
For the year ended October 31, 2000
<TABLE>
<CAPTION>
Small Capital
LargeCap 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) .................... $ (11,368) $ (7,913) $ 1,915 $ (5,729) $ (18,684) $ 15,930
Net realized gain (loss) on investments ......... 82,649 92,099 (924) 84,452 39,348 (3)
Net change in unrealized appreciation
(depreciation) on investments ................ (5,654) (83,423) 1,906 71,287 (49,790) --
---------- --------- --------- --------- ---------- ---------
Net increase (decrease) in net assets
resulting from operations .................. 65,627 763 2,897 150,010 (29,126) 15,927
---------- --------- --------- --------- ---------- ---------
Dividends and distributions to shareholders from:
Net investment income
Class A ....................................... -- -- (85) -- -- --
Class B ....................................... -- -- (118) -- -- (15,930)
Class C ....................................... -- -- (24) -- -- --
Net realized gains
Class A ....................................... (38,393) (9,118) (1,018) (7,104) (24,442) --
Class B ....................................... (136,938) (73,991) (4,386) (47,287) (91,441) --
Class C ....................................... (6,306) (1,539) (1,265) (2,332) (7,820) --
---------- --------- --------- --------- ---------- ---------
Total dividends and distributions to shareholders (181,637) (84,648) (6,896) (56,723) (123,703) (15,930)
---------- --------- --------- --------- ---------- ---------
Increase (decrease) from shares of beneficial
interest transactions:
Class A ....................................... 120,024 56,656 82,915 74,593 248,964 --
Class B ....................................... 216,520 (28,373) 81,066 212,448 556,754 (7,781)
Class C ....................................... 40,873 6,265 35,683 36,829 164,212 --
---------- --------- --------- --------- ---------- ---------
Net increase (decrease) from shares of beneficial
interest transactions--Note 6 ................ 377,417 34,548 199,664 323,870 969,930 (7,781)
---------- --------- --------- --------- ---------- ---------
Total increase (decrease) .................... 261,407 (49,337) 195,665 417,157 817,101 (7,784)
Net Assets:
Beginning of year ........................... 1,030,707 497,487 79,721 308,212 786,689 241,310
---------- --------- --------- --------- ---------- ---------
End of year ................................. $1,292,114 $ 448,150 $ 275,386 $ 725,369 $1,603,790 $ 233,526
========== ========= ========= ========= ========== =========
Undistributed net investment
income (accumulated loss) .................... $ (11,368) $ (7,913) $ 1,915 $ (5,729) $ (18,684) $ --
========== ========= ========= ========= ========== =========
</TABLE>
* Prior to September 29, 2000, the Alger LargeCap Growth Portfolio was the
Alger Growth Portfolio.
See Notes to Financial Statements.
<PAGE>
-45-
THE ALGER FUND
STATEMENTS OF CHANGES IN NET ASSETS (in thousands)
For the year ended October 31, 1999
<TABLE>
<CAPTION>
Small Capital
LargeCap 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) .................... $ (8,357) $ (8,029) $ 225 $ (3,366) $ (8,093) $ 12,382
Net realized gain (loss) on investments ......... 182,147 90,139 6,539 58,127 125,466 (2)
Net change in unrealized appreciation
(depreciation) on investments ................. 38,830 64,884 2,433 11,776 80,515 --
---------- --------- --------- --------- --------- ---------
Net increase in net assets
resulting from operations ................... 212,620 146,994 9,197 66,537 197,888 12,380
---------- --------- --------- --------- --------- ---------
Dividends and distributions to shareholders from:
Net investment income
Class A ....................................... -- -- (7) -- -- --
Class B ....................................... -- -- (31) -- -- (12,382)
Net realized gains
Class A ....................................... (12,572) (5,621) (101) (2,780) (3,154) --
Class B ....................................... (40,774) (49,513) (1,123) (24,072) (21,244) --
Class C ....................................... (432) (236) (34) (331) (354) --
---------- --------- --------- --------- --------- ---------
Total dividends and distributions to shareholders (53,778) (55,370) (1,296) (27,183) (24,752) (12,382)
---------- --------- --------- --------- --------- ---------
Increase (decrease) from shares of
beneficial interest transactions:
Class A ....................................... 70,710 (2,005) 10,077 11,740 64,516 --
Class B ....................................... 258,777 (119,313) 27,338 22,482 213,052 68,450
Class C ....................................... 26,251 2,039 13,435 8,496 35,662 --
---------- --------- --------- --------- --------- ---------
Net increase (decrease) from shares of beneficial
interest transactions--Note 6 ................ 355,738 (119,279) 50,850 42,718 313,230 68,450
---------- --------- --------- --------- --------- ---------
Total increase (decrease) .................... 514,580 (27,655) 58,751 82,072 486,366 68,448
Net Assets:
Beginning of year ........................... 516,127 525,142 20,970 226,140 300,323 172,862
---------- --------- --------- --------- --------- ---------
End of year ................................. $1,030,707 $ 497,487 $ 79,721 $ 308,212 $ 786,689 $ 241,310
========== ========= ========= ========= ========= =========
Undistributed net investment
income (accumulated loss) .................... $ (19,428) $ (51,039) $ 160 $ (10,312) $ (16,864) $ --
========== ========= ========= ========= ========= =========
</TABLE>
* Prior to September 29, 2000, the Alger LargeCap Growth Portfolio was the
Alger Growth Portfolio.
See Notes to Financial Statements.
<PAGE>
-46-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- General:
The Alger Fund (the "Fund") is a diversified, open-end registered
investment company organized as a business trust under the laws of the
Commonwealth of Massachusetts. The Fund operates as a series company currently
issuing an unlimited number of shares of beneficial interest in six
portfolios--LargeCap Growth Portfolio, Small Capitalization Portfolio, Balanced
Portfolio, MidCap Growth Portfolio, Capital Appreciation Portfolio and Money
Market Portfolio (the "Portfolios"). Prior to September 29, 2000, the LargeCap
Growth Portfolio was the Growth Portfolio. The LargeCap 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. The Money Market Portfolio's investment objective is high current
income which it seeks to achieve by investing in short-term instruments.
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 shares are generally subject to
a deferred sales charge. Class C shares are generally subject to an initial
sales charge and a deferred sales charge. Class B shares will automatically
convert to Class A shares eight years after the end of the calendar month in
which the order to purchase was accepted. 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. Shares of mutual
funds are valued at the net asset value of the underlying mutual fund.
(b) Securities Transactions and Investment Income: Securities transactions are
recorded on a trade date basis. Realized gains and losses from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income is recognized on the
accrual basis.
(c) Repurchase Agreements: The Portfolios enter into repurchase agreements with
approved institutions. The repurchase agreements are collateralized by U.S.
Government securities, which are either received and held in physical possession
by the custodian or received by such custodian in book-entry form through the
Federal Reserve book-entry system. The collateral is valued on a daily basis
during the term of the agreement to ensure that its value equals or exceeds the
agreed-upon repurchase price to be repaid to the Portfolio. Additional
collateral is obtained when necessary.
(d) Lending of Portfolio Securities: The Portfolios lend their securities to
financial institutions, provided that the market value of the securities loaned
will not at any time
<PAGE>
-47-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
exceed one third of the Portfolio's total assets, as defined. The Portfolios
earn fees on the securities loaned, which are included in interest income in the
accompanying Statements of Operations. In order to protect against the risk of
failure by the borrower to return the securities loaned or any delay in the
delivery of such securities, the loan is collateralized by cash, letters of
credit or U.S. Government securities that are maintained in an amount equal to
at least 100 percent of the current market value of the loaned securities. The
market value of the loaned securities is determined at the close of business of
the Portfolios and any required additional collateral is delivered to the
Portfolios on the next business day. At October 31, 2000, the value of
securities loaned and collateral received thereon were as follows:
Value of
Securities Value of
Loaned Collateral
---------- ----------
LargeCap Growth Portfolio ........................ $ 24,666,230 $ 24,572,089
Small Capitalization
Portfolio ...................................... 8,417,225 8,796,757
Balanced Portfolio ............................... 6,705,756 6,418,900
MidCap Growth
Portfolio ...................................... 3,641,812 4,153,277
Capital Appreciation
Portfolio ...................................... 141,021,099 134,609,456
Money Market
Portfolio ...................................... -- --
(e) 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.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax rules.
Therefore, the source of the Portfolios' distributions, other than the Money
Market Portfolio, may be shown in the accompanying financial statements as
either from or in excess of net investment income or net realized gain on
investment transactions, or from paid-in capital, depending on the type of
book/tax differences that may exist.
At October 31, 2000, the LargeCap Growth Portfolio, the Small
Capitalization Portfolio, the Balanced Portfolio, the MidCap Growth Portfolio
and the Capital Appreciation Portfolio reclassified $19,428,146, $51,039,525,
$67,077, $10,311,424 and $16,864,558, respectively, from undistributed net
investment loss to either accumulated undistributed net realized gain or paid-in
capital. The reclassifications had no impact on the net asset values of the
Portfolios and are designed to present the Portfolios' capital accounts on a tax
basis.
(f) Federal Income Taxes: It is each Portfolio's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its investment company taxable income to its
shareholders. Provided a Portfolio maintains such compliance, no federal income
tax provision is required. Each Portfolio is treated as a separate entity for
the purpose of determining such compliance. At October 31, 2000, the net capital
loss carryforwards of the Money Market Portfolio which may be used to offset
future net realized gains were approximately $75,000, and expire between 2001
and 2007.
(g) Allocation Methods: The Fund accounts separately for the assets, liabilities
and operations of each Portfolio. Expenses directly attributable to each
Portfolio are charged to that Portfolio's operations; expenses which are
applicable to all Portfolios are allocated among them. 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.
<PAGE>
-48-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
(h) Other: These financial statements have been prepared using estimates and
assumptions that affect the reported amounts therein. Actual results may differ
from those estimates.
NOTE 3 -- Investment Management Fees and Other Transactions with Affiliates:
(a) Investment Management Fees: Fees incurred by each Portfolio, pursuant to the
provisions of its Investment Management Agreement with Fred Alger Management,
Inc. ("Alger Management"), are payable monthly and are computed based on the
value of the average daily net assets of each Portfolio at the following annual
rates:
LargeCap Growth Portfolio ............................................... .75%
Small 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 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, marketing
and selling the Class B shares. 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 Class B shares of the Portfolios, the excess may be carried
forward, with interest, and sought to be reimbursed in future periods. As of
October 31, 2000, such excess carried forward was approximately $20,577,000,
$15,545,000, $3,789,000, $6,957,000 and $28,476,000 for Class B shares of the
LargeCap 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 incurred in distributing the Class C
shares. The fees charged may be more or less than the expenses incurred by the
Distributor.
(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 year ended October 31, 2000, the
initial sales charges and contingent deferred sales charges retained by the
Distributor were approximately $334,000 and $5,265,000, 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 year ended October 31, 2000, the LargeCap
Growth Portfolio, the Small Capitalization Portfolio, the Balanced Portfolio,
the MidCap Growth Portfolio and the Capital Appreciation Portfolio paid the
Distributor commissions of $1,934,509, $891,329, $187,039, $662,316 and
$1,597,714, 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 year ended October 31, 2000, the LargeCap Growth Portfolio, the
Small Capitalization Portfolio, the Balanced Portfolio, the MidCap Growth
Portfolio, the
<PAGE>
-49-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
Capital Appreciation Portfolio and the Money Market Portfolio incurred fees of
$1,566,724, $967,235, $213,748, $687,905, $2,229,520 and $464,660, respectively,
for services provided by Alger Services. In addition, during the year ended
October 31, 2000, the LargeCap 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
$312,975, $286,566, $63,179, $158,979, $600,382 and $123,081, 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) Other Transactions With Affiliates: 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 year ended October 31, 2000 (in thousands):
Purchases Sales
--------- -----
LargeCap Growth
Portfolio ...................................... $1,286,700 $1,110,574
Small Capitalization
Portfolio ...................................... 1,023,871 1,109,481
Balanced Portfolio .............................. 267,586 85,573
MidCap Growth
Portfolio ...................................... 449,886 534,340
Capital Appreciation
Portfolio ...................................... 2,427,510 1,763,574
NOTE 5 -- Lines of Credit:
The Fund has both committed and uncommitted lines of credit with banks.
All borrowings have variable interest rates and are payable on demand. With the
exception of the Capital Appreciation Portfolio, the Fund borrows under such
lines of credit exclusively for temporary or emergency purposes.
The Capital Appreciation Portfolio may borrow under these lines up to 1/3
of the value of its assets, as defined, to purchase additional securities. To
the extent the Capital Appreciation Portfolio borrows under these lines, it must
pledge securities with a total value of at least twice the amount borrowed. For
the year ended October 31, 2000, the Capital Appreciation Portfolio had no such
borrowings.
<PAGE>
-50-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS (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. The
transactions of shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
For the year ended For the year ended
October 31, 2000 October 31, 1999
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Alger LargeCap Growth Portfolio
Class A:
Shares sold ...................... 162,449,155 $ 2,482,401,072 93,010,120 $ 1,345,815,062
Shares converted from Class B .... 1,743,049 26,577,277 765,156 10,723,156
Dividends reinvested ............. 2,500,745 35,785,660 676,360 8,211,015
Shares redeemed .................. (158,493,375) (2,424,739,451) (89,655,055) (1,294,039,354)
--------------- --------------- --------------- ---------------
Net increase ..................... 8,199,574 $ 120,024,558 4,796,581 $ 70,709,879
=============== =============== =============== ===============
Class B:
Shares sold ...................... 207,051,376 $ 3,059,360,172 118,806,283 $ 1,673,356,937
Dividends reinvested ............. 9,240,884 128,263,469 3,233,151 38,571,496
Shares converted to Class A ...... (1,801,857) (26,577,277) (779,638) (10,723,156)
Shares redeemed .................. (199,088,996) (2,944,526,617) (102,786,502) (1,442,428,434)
--------------- --------------- --------------- ---------------
Net increase ..................... 15,401,407 $ 216,519,747 18,473,294 $ 258,776,843
=============== =============== =============== ===============
Class C:
Shares sold ...................... 6,077,592 $ 89,824,465 2,593,259 $ 37,501,908
Dividends reinvested ............. 439,173 6,091,330 29,615 353,009
Shares redeemed .................. (3,749,529) (55,042,716) (810,252) (11,603,192)
--------------- --------------- --------------- ---------------
Net increase ..................... 2,767,236 $ 40,873,079 1,812,622 $ 26,251,725
=============== =============== =============== ===============
Alger Small Capitalization Portfolio
Class A:
Shares sold ...................... 61,143,690 $ 634,356,124 149,420,839 $ 1,465,519,097
Shares converted from Class B .... 5,197,378 53,753,929 1,236,266 12,164,811
Dividends reinvested ............. 760,113 7,654,340 571,350 4,845,050
Shares redeemed .................. (61,193,895) (639,108,096) (151,276,967) (1,484,533,596)
--------------- --------------- --------------- ---------------
Net increase (decrease) .......... 5,907,286 $ 56,656,297 (48,512) $ (2,004,638)
=============== =============== =============== ===============
Class B:
Shares sold ...................... 45,801,106 $ 475,351,587 314,933,540 $ 3,028,416,304
Dividends reinvested ............. 7,118,807 69,835,497 5,742,442 47,777,113
Shares converted to Class A ...... (5,353,313) (53,753,929) (1,259,686) (12,164,811)
Shares redeemed .................. (50,806,572) (519,806,493) (331,525,302) (3,183,341,861)
--------------- --------------- --------------- ---------------
Net decrease ..................... (3,239,972) $ (28,373,338) (12,109,006) $ (119,313,255)
=============== =============== =============== ===============
Class C:
Shares sold ...................... 1,523,544 $ 16,682,243 9,797,623 $ 94,352,794
Dividends reinvested ............. 144,825 1,419,283 21,996 182,783
Shares redeemed .................. (1,122,291) (11,836,447) (9,626,258) (92,496,428)
--------------- --------------- --------------- ---------------
Net increase ..................... 546,078 $ 6,265,079 193,361 $ 2,039,149
=============== =============== =============== ===============
</TABLE>
<PAGE>
-51-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
For the year ended For the year ended
October 31, 2000 October 31, 1999
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Alger Balanced Portfolio
Class A:
Shares sold ................. 4,565,490 $ 99,530,708 4,284,737 $ 85,443,461
Shares converted from Class B 71,386 1,557,011 6,645 130,732
Dividends reinvested ........ 50,553 1,040,369 5,413 91,866
Shares redeemed ............. (882,695) (19,213,016) (3,781,145) (75,588,660)
--------------- --------------- --------------- ---------------
Net increase ................ 3,804,734 $ 82,915,072 515,650 $ 10,077,399
=============== =============== =============== ===============
Class B:
Shares sold ................. 8,075,884 $ 173,063,380 5,166,089 $ 99,682,060
Dividends reinvested ........ 208,439 4,227,147 64,040 1,075,875
Shares converted to Class A . (72,703) (1,557,011) (6,739) (130,732)
Shares redeemed ............. (4,422,449) (94,667,065) (3,827,743) (73,289,320)
--------------- --------------- --------------- ---------------
Net increase ................ 3,789,171 $ 81,066,451 1,395,647 $ 27,337,883
=============== =============== =============== ===============
Class C:
Shares sold ................. 1,898,378 $ 40,718,761 886,244 $ 17,342,456
Dividends reinvested ........ 54,299 1,104,984 1,551 26,116
Shares redeemed ............. (288,169) (6,141,241) (199,452) (3,933,326)
--------------- --------------- --------------- ---------------
Net increase ................ 1,664,508 $ 35,682,504 688,343 $ 13,435,246
=============== =============== =============== ===============
Alger MidCap Growth Portfolio
Class A:**
Shares sold ................. 145,344,275 $ 1,400,353,840 153,362,394 $ 1,191,539,173
Shares converted from Class B 1,036,760 9,984,433 113,655 886,475
Dividends reinvested ........ 869,019 6,856,558 393,936 2,575,026
Shares redeemed ............. (139,332,954) (1,342,601,390) (152,455,266) (1,183,261,041)
--------------- --------------- --------------- ---------------
Net increase ................ 7,917,100 $ 74,593,441 1,414,719 $ 11,739,633
=============== =============== =============== ===============
Class B:**
Shares sold ................. 54,409,817 $ 511,828,795 57,683,991 $ 433,987,342
Dividends reinvested ........ 5,616,424 42,984,366 3,378,093 21,676,093
Shares converted to Class A . (1,072,154) (9,984,433) (116,127) (886,475)
Shares redeemed ............. (35,562,632) (332,380,942) (57,482,649) (432,294,954)
--------------- --------------- --------------- ---------------
Net increase ................ 23,391,455 $ 212,447,786 3,463,308 $ 22,482,006
=============== =============== =============== ===============
Class C:**
Shares sold ................. 5,308,692 $ 50,459,581 1,774,719 $ 13,714,796
Dividends reinvested ........ 284,495 2,173,537 40,833 261,599
Shares redeemed ............. (1,693,505) (15,804,677) (712,755) (5,479,710)
--------------- --------------- --------------- ---------------
Net increase ................ 3,899,682 $ 36,828,441 1,102,797 $ 8,496,685
=============== =============== =============== ===============
</TABLE>
<PAGE>
-52-
THE ALGER FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
For the year ended For the year ended
October 31, 2000 October 31, 1999
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Alger Capital Appreciation Portfolio
Class A:*
Shares sold ..................... 167,135,442 $ 2,628,765,000 168,941,613 $ 2,013,311,342
Shares converted from Class B ... 910,674 14,344,012 175,365 2,161,488
Dividends reinvested ............ 1,559,442 23,422,814 316,690 2,952,608
Shares redeemed ................. (153,453,836) (2,417,567,657) (164,563,152) (1,953,909,113)
---------------- ---------------- ---------------- ----------------
Net increase ..................... 16,151,722 $ 248,964,169 4,870,516 $ 64,516,325
================ ================ ================ ================
Class B:*
Shares sold ..................... 137,803,098 $ 2,111,394,871 127,184,924 $ 1,494,488,538
Dividends reinvested ............ 5,932,840 86,797,445 2,154,183 19,746,682
Shares converted to Class A ..... (937,583) (14,344,012) (178,924) (2,161,488)
Shares redeemed ................. (106,892,604) (1,627,094,311) (111,652,359) (1,299,022,116)
---------------- ---------------- ---------------- ----------------
Net increase .................... 35,905,751 $ 556,753,993 17,507,824 $ 213,051,616
================ ================ ================ ================
Class C:*
Shares sold ...................... 16,104,072 $ 247,401,803 4,353,255 $ 52,799,128
Dividends reinvested ............. 498,863 7,293,385 25,529 233,926
Shares redeemed .................. (6,097,998) (90,483,748) (1,413,209) (17,370,934)
---------------- ---------------- ---------------- ----------------
Net increase .................... 10,504,937 $ 164,211,440 2,965,575 $ 35,662,120
================ ================ ================ ================
Alger Money Market Portfolio
Shares sold ...................... 11,125,335,270 $ 11,125,335,270 9,851,815,099 $ 9,851,815,099
Dividends reinvested ............. 12,394,274 12,394,274 9,402,809 9,402,809
Shares redeemed .................. (11,145,511,173) (11,145,511,173) (9,792,767,208) (9,792,767,208)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) ......... (7,781,629) $ (7,781,629) 68,450,700 $ 68,450,700
================ ================ ================ ================
</TABLE>
----------
* Adjusted to reflect the effect of a 3 for 1 stock split which occurred on
January 8, 1999.
** Adjusted to reflect the effect of a 3 for 1 stock split which occurred on
April 20, 2000.
<PAGE>
-53-
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and
Board of Trustees of The Alger Fund:
We have audited the statements of assets and liabilities, including the
schedules of investments, of The Alger Fund (a Massachusetts business trust
comprising, respectively, the LargeCap Growth, Small Capitalization, Balanced,
MidCap Growth, Capital Appreciation and Money Market Portfolios) as of October
31, 2000, and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 2000, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective portfolios constituting The Alger Fund, as of October 31,
2000, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
New York, New York
December 8, 2000
<PAGE>
The Alger Fund
1 World Trade Center
Suite 9333
New York, N.Y. 10048
(800) 992-3863
www.algerfund.com
Board of Trustees
Fred M. Alger, Chairman
David D. Alger
Charles F. Baird, Jr.
Roger P. Cheever
Lester L. Colbert, Jr.
James P. Connelly, Jr.
Stephen E. O'Neil
Nathan E. Saint-Amand
B. Joseph White
Investment Manager
Fred Alger Management, Inc.
1 World Trade Center
Suite 9333
New York, N.Y. 10048
Distributor
Fred Alger & Company, Incorporated
30 Montgomery Street
Jersey City, N.J. 07302
Transfer Agent
Alger Shareholder Services, Inc.
30 Montgomery Street
Jersey City, N.J. 07302
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.
REP100
