- --------------------------------------------------------------------------------
THE |
ALGER | MEETING THE CHALLENGE
AMERICAN | OF INVESTING
FUND |
ALGER AMERICAN
GROWTH PORTFOLIO
ALGER AMERICAN
SMALL CAPITALIZATION PORTFOLIO
ALGER AMERICAN
INCOME AND GROWTH PORTFOLIO
ALGER AMERICAN
BALANCED PORTFOLIO
ALGER AMERICAN
MIDCAP GROWTH PORTFOLIO
ALGER AMERICAN
LEVERAGED ALLCAP PORTFOLIO
SEMI-ANNUAL | JUNE 30, 1996
REPORT | (UNAUDITED)
- --------------------------------------------------------------------------------
<PAGE>
Fellow Shareholders: July 31, 1996
ECONOMIC AND MARKET REVIEW
The first six months of 1996 have been extremely challenging and volatile.
On more than one occasion, we have experienced the financial markets' equivalent
of wind-shear. This has resulted from a dramatic change in perception about the
nature of the economy.
The conventional wisdom earlier in the year was that the economy was
extremely weak and the Federal Reserve Bank would act to lower interest rates
and avoid a possible recession. During the second quarter, the focus shifted to
whether the economy was growing too fast, leading to inflation and the Federal
Reserve Bank taking action to raise interest rates. This dramatic change in
perception over the first six months of 1996 created extremely volatile
conditions in the bond market. By way of example, on January 1, the thirty year
Treasury bond yield was 5.9%, but it has recently been as high as 7.2%. The
stock market has been taking its lead from the bond market and has experienced
similar volatility. As evidence of the stock market's volatility, the New York
Stock Exchange instituted trading curbs in both directions on the same day (May
8, 1996) for the first time ever!
CURRENT MARKET CONDITIONS
Beginning in early June, the listed markets have dropped significantly, and
NASDAQ stocks are down dramatically. Economic data and certain market conditions
have contributed to this sell-off. June employment numbers were more robust than
expected, and average hourly earnings increased sharply. Recently released
economic data including soft retail store sales, declining vehicle sales,
weakened commodity prices and a soft housing market has brought a new awareness
and a small rally to the bond market. The stock market, however, has now
de-coupled itself from the bond market and a dramatic liquidation of "hot
stocks" has occurred.
This sell-off seems to have been triggered by a number of
events:
o Disappointing earnings reported by both Hewlett Packard and Motorola
(neither of which we owned) have resulted in a wave of panic selling in
technology stocks.
o Disappointing earnings reported by several companies in the
medical field, especially HMO's, have put pressure on stocks in that high flying
industry.
o June mutual fund subscription data suggested that the cash flow into
mutual funds has slowed.
Although all major market averages have gone down, the NASDAQ market
pull-back has been very severe, suggesting a degree of panic. The NASDAQ market
is heavily burdened with technology stocks which seem to be catching the brunt
of the disappointment. Additionally, the NASDAQ market has the most speculative
investors, many of whom are pure momentum players. Moreover, it has less trading
power than the broader markets have and is the stomping ground of short-sellers.
In the short-term, there is no question that a correction is underway. As a
result, we have eliminated some of the more controversial technology stocks from
the Portfolios and other holdings which we think would be hit over the
short-term sell-off. We have built up a nice little war chest of cash, which we
hope to deploy when we see this sell-off exhaust itself.
LOOKING AHEAD
We continue to believe that the stock market is undervalued relative to the
bond market and we believe, furthermore, that the bond market will continue to
rally in the third quarter. Moreover, we do not believe that the Fed will find
it necessary to raise rates, even at the August 20th FOMC meeting. We believe
that there is a good chance that the market will attain a target objective of
6000 by year-end or at least by the middle of 1997, and that technology stocks
could stage a recovery later this year as new product cycles kick in.
In conclusion, it is critical to note that the underlying economic factors
which drive the market are still extremely positive:
1. The economy is moving ahead briskly but not fast enough to warrant Fed
intervention.
2. Inflation is modest.
3. Most companies are reporting satisfactory, if not exceptional earnings.
4. The United States retains its technological superiority over the rest of
the world.
5. Even if Clinton wins re-election, the Republicans have put so much
pressure on him that his agenda has shifted demonstrably to the right.
6. Lastly, baby-boomers are still going to be forced to increase their
financial assets in order to retire and pay college tuition. Therefore,
the stock market will remain the medium of choice for investors well into
the next century.
In summary, it is always discouraging to see stocks drop and mutual fund
shares diminish in value. Nevertheless, this is a great time to invest. Also,
dollar cost averaging is a wonderful tool for taking advantage of this kind of
volatility. We see nothing to change our long-term optimistic outlook, except
the price of stocks themselves.
Respectfully submitted,
David D. Alger
President
1
<PAGE>
TABLE OF CONTENTS
Alger American Growth Portfolio:
Schedule of Investments............................................ 3-4
Financial Highlights............................................... 5
Alger American Small Capitalization Portfolio:
Schedule of Investments............................................ 6-8
Financial Highlights............................................... 9
Alger American Income and Growth Portfolio:
Schedule of Investments............................................ 10-11
Financial Highlights............................................... 12
Alger American Balanced Portfolio:
Schedule of Investments............................................ 13-14
Financial Highlights............................................... 15
Alger American MidCap Growth Portfolio:
Schedule of Investments............................................ 16-17
Financial Highlights............................................... 18
Alger American Leveraged AllCap Portfolio:
Schedule of Investments............................................ 19-21
Financial Highlights............................................... 22
Statements of Assets and Liabilities.................................... 23
Statements of Operations................................................ 24
Statements of Cash Flows................................................ 25
Statements of Changes in Net Assets..................................... 26-27
Notes to Financial Statements........................................... 28-30
2
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS--90.7% VALUE
------ -----
AEROSPACE--3.5%
114,500 The Boeing Company ................ $ 9,975,813
66,200 Delta Air Lines Inc.+ ............. 5,494,600
291,100 Sundstrand Corp. .................. 10,661,538
------------
26,131,951
------------
ALUMINUM--.7%
90,200 Aluminum Co. of America+ .......... 5,175,225
------------
APPAREL--1.0%
143,500 Tommy Hilfiger Corporation* ....... 7,695,188
------------
AUTOMOTIVE--1.6%
191,900 Chrysler Corporation .............. 11,897,800
------------
BIO-TECHNOLOGY--2.3%
103,400 Amgen Inc.* ....................... 5,583,600
303,800 BioChem Pharma Inc.*+ ............. 11,392,500
------------
16,976,100
------------
BUILDING & CONSTRUCTION--1.3%
467,025 Clayton Homes, Inc. ............... 9,340,500
------------
CHEMICALS--1.0%
232,500 Monsanto Co. ...................... 7,556,250
------------
COMMUNICATIONS--8.4%
146,800 Ascend Communications, Inc.* ...... 8,257,500
95,800 Cascade Communications Corp.* ..... 6,514,400
187,500 Glenayre Technologies Inc.* ....... 9,375,000
90,000 MFS Communications Co., Inc.* ..... 3,386,250
83,500 Telecommunicacoes
Brasileiras S.A. ADR ............ 5,813,688
118,200 Tellabs, Inc.* .................... 7,904,625
378,500 WorldCom Inc.* .................... 20,959,438
------------
62,210,901
------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--6.3%
393,200 Cisco Systems, Inc.*+ ............. 22,264,950
396,600 3 Com Corp.* ...................... 18,144,450
114,900 Xerox Corp. ....................... 6,147,150
------------
46,556,550
------------
COMPUTER SOFTWARE--2.9%
184,000 Compuware Corp.* .................. 7,268,000
642,400 Informix Corporation* ............. 14,454,000
------------
21,722,000
------------
COMPUTER TECHNOLOGY--.8%
122,000 Adaptec, Inc.* .................... 5,779,750
------------
CONSUMER PRODUCTS--2.7%
218,800 CUC International Inc.* ........... 7,767,400
109,200 Colgate Palmolive Co. ............. 9,254,700
30,200 Nike, Inc., Cl. B ................. 3,103,050
------------
20,125,150
------------
DEFENSE--3.2%
69,120 Lockheed Martin Corp. ............. 5,806,080
368,400 McDonnell Douglas Corporation ..... 17,867,400
------------
23,673,480
------------
FINANCIAL SERVICES--10.5%
271,400 Chase Manhattan Corp. ............. 19,167,625
275,463 First Data Corporation ............ 21,933,741
265,000 Green Tree Financial Corp. ........ 8,281,250
364,500 MBNA Corp. ........................ 10,388,250
110,000 Merrill Lynch & Co., Inc. ......... 7,163,750
147,000 The Money Store Inc.+ ............. 3,252,375
299,400 Schwab (Charles) Corporation (The) 7,335,300
------------
77,522,291
------------
HEALTHCARE--8.3%
103,100 Boston Scientific Corporation* .... 4,639,500
299,000 Columbia/HCA Healthcare Corporation 15,959,125
120,600 Guidant Corp. ..................... 5,939,550
66,622 Johnson & Johnson ................. 3,297,789
161,200 Lilly (Eli) Co. ................... 10,478,000
183,800 Merck & Co., Inc. ................. 11,878,075
166,200 SmithKline Beecham PLC ADS ........ 9,037,125
------------
61,229,164
------------
HEALTH MAINTENANCE
ORGANIZATIONS--2.4%
234,700 Oxford Health Plans, Inc.* ........ 9,652,038
162,000 United Healthcare Corporation ..... 8,181,000
------------
17,833,038
------------
INSURANCE--4.9%
177,000 American International Group, Inc. 17,456,625
100,000 Travelers/Aetna Property
Casualty Corp., Cl. A* .......... 2,837,500
357,050 Travelers Group Inc. .............. 16,290,406
------------
36,584,531
------------
MACHINERY--.8%
121,300 Case Corp. ...................... 5,822,400
------------
MEDICAL DEVICES--.1%
60,300 Summit Technology Inc.*+ .......... 844,200
------------
MEDICAL SERVICES--1.0%
137,600 Medtronic, Inc. ................... 7,705,600
------------
OIL & GAS--2.5%
161,800 Halliburton Co. ................... 8,979,900
44,500 Schlumberger Ltd. ................. 3,749,125
140,200 Tidewater Inc.+ ................... 6,151,275
------------
18,880,300
------------
3
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED) (CONT'D)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS (CONTINUED) VALUE
------- -----
PHARMACEUTICALS--2.4%
256,400 Astra AB ADS Series A+ ............ $ 11,217,500
95,000 Pfizer, Inc........................ 6,780,623
------------
17,998,123
------------
POLLUTION CONTROL--.6%
158,400 USA Waste Services, Inc.*+ ........ 4,692,600
------------
RESTAURANTS &
LODGING--4.2%
285,000 Boston Chicken, Inc.*+ ............ 9,262,500
478,600 Lone Star Steakhouse & Saloon, Inc.* 18,067,150
106,200 Outback Steakhouse, Inc.* ......... 3,662,201
------------
30,991,851
------------
RETAILING--7.2%
75,000 Cintas Corp........................ 4,012,500
479,000 The Gap, Inc. ..................... 15,387,875
200,500 Gucci Group N.V.* ................. 12,932,250
12,500 Nordstrom, Inc. ................... 556,250
669,000 OfficeMax, Inc.* .................. 15,972,375
32,000 TJX Companies Inc.+ ............... 1,080,000
100,000 Viking Office Products, Inc.* ..... 3,137,500
------------
53,078,750
------------
SEMICONDUCTORS--6.4%
183,400 Altera Corporation* ............... 6,969,200
103,300 Intel Corp......................... 7,586,145
221,500 Linear Technology Corporation ..... 6,645,000
311,700 Maxim Integrated Products, Inc.* .. 8,513,462
164,000 Microchip Technology Incorporated* 4,059,000
434,400 Xilinx, Inc.*+ .................... 13,792,200
------------
47,565,007
------------
MISCELLANEOUS--3.7%
273,000 Loewen Group Inc. ................. 8,258,250
335,800 Service Corporation International . 19,308,500
------------
27,566,750
------------
TOTAL COMMON STOCKS
(COST $599,101,336) ............. 673,155,450
------------
WARRANTS WARRANTS
- --------
MANUFACTURING
1 Windmere Corp.
expires 1/19/98 (COST $1) ....... 6
------------
SHORT-TERM INVESTMENTS--12.7%
PRINCIPAL SHORT-TERM
AMOUNT CORPORATE NOTES--10.1%
--------
$25,000,000 AT&T Capital Corp.,
5.41%, 7/11/96 .................. 24,962,430
25,000,000 Countrywide Funding Corp.,
5.42%, 7/10/96 .................. 24,966,125
25,000,000 International Lease Finance Corp.,
5.35%, 7/2/96 ................... 24,996,285
------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $74,924,840) .............. 74,924,840
------------
SECURITIES HELD UNDER
REPURCHASE
AGREEMENTS--2.6%
Securities Held Under Repurchase
Agreements, 5.30%-5.625%, 7/1/96,
with Bear, Stearns & Co. Inc., dtd
6/28/96, repurchase price
$19,422,656; collateralized by
U.S. Treasury Bonds and
U.S. Treasury Strips
(par value $79,253,000 due
5/15/13-8/15/22) ................ 19,413,619
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $94,338,459) .............. 94,338,459
------------
TOTAL INVESTMENTS
(COST $693,439,796)(A) 103.4% 767,493,915
Liabilities in Excess Of Other Assets (3.4) (25,403,973)
----- ------------
NET ASSETS 100.0% $742,089,942
===== ============
- --------------------------------------------------------------------------------
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At June 30, 1996, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $693,439,796, amounted to
$74,054,119 which consisted of aggregate gross unrealized appreciation of
$90,603,326 and aggregate gross unrealized depreciation of $16,549,207.
See Notes to Financial Statements.
4
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ----------------------------------------------------------------
JUNE 30, 1996(I) 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 31.16 $ 23.13 $ 24.67 $ 20.17 $ 18.00 $ 12.86
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income .06 0.02 0.07 0.03 0.03 0.08(ii)
Net realized and unrealized gain on investments 1.98 8.33 0.15 4.50 2.19 5.11
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.04 8.35 0.22 4.53 2.22 5.19
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.02) (0.07) (0.03) (0.03) (0.03) (0.05)
Distributions from net realized gains (0.93) (0.25) (1.73) -- (0.02) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.95) (0.32) (1.76) (0.03) (0.05) (0.05)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 32.25 $ 31.16 $ 23.13 $ 24.67 $ 20.17 $ 18.00
===================================================================================================================================
Total Return 6.48% 36.37% 1.45% 22.47% 12.38% 40.39%
===================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $742,090 $502,974 $150,390 $74,878 $30,316 $10,094
===================================================================================================================================
Ratio of expenses to average net assets 0.79% 0.85% 0.86% 0.97% 0.99% 1.29%
===================================================================================================================================
Ratio of net investment income to average
net assets 0.47% 0.18% 0.48% 0.25% 0.33% 0.52%
===================================================================================================================================
Portfolio Turnover Rate 43.71% 118.33% 111.76% 112.64% 63.91% 58.95%
===================================================================================================================================
Average Commission Rate Paid $ .0712
===================================================================================================================================
(i) Unaudited. Ratios have been annualized; total return has not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS--86.9% VALUE
------ -----
AGRICULTURE--.9%
276,500 Delta and Pine Land Co. ........... $ 11,682,125
------------
ALUMINUM--.4%
94,000 Reynolds Metals Co.+ .............. 4,899,750
------------
APPAREL--3.8%
92,700 Designer Holdings, Ltd.* .......... 2,468,138
284,100 Gymboree Corp.*+ .................. 8,665,050
246,600 Nautica Enterprises, Inc.*+ ....... 7,089,750
352,000 St. Johns Knits, Inc. ............. 15,708,000
279,900 Tommy Hilfiger Corporation* ....... 15,009,638
------------
48,940,576
------------
BIO-TECHNOLOGY--6.8%
110,000 Affymetrix, Inc.*+ ................ 1,677,500
594,700 BioChem Pharma Inc.* .............. 22,301,250
290,000 CellPro Incorporated* ............. 5,220,000
303,900 Centocor, Inc.* ................... 9,079,013
280,000 Cygnus, Inc.*+ .................... 4,270,000
25,000 Cytotherapeutics, Inc.* ........... 278,125
147,300 DEKALB Genetics Corp. Cl B+ ....... 3,829,800
20,000 Ergo Science Corp.* ............... 372,500
455,000 Genzyme Corp.--Tissue Repair
Division*+ ...................... 5,346,250
194,000 Gliatech Inc.*+ ................... 2,037,000
230,000 Guilford Pharmaceuticals Inc.* .... 5,462,500
323,800 IDEC Pharmaceuticals Corporation* . 7,487,875
155,500 Incyte Pharmaceuticals, Inc.* ..... 5,996,547
13,300 Interneuron Pharmaceuticals, Inc.* 399,000
294,400 Liposome Company, Inc.*+ .......... 5,520,000
85,000 Millennium Pharmaceuticals, Inc.* . 1,317,500
110,000 Oncogene Science, Inc.* ........... 1,100,000
255,000 Sepracor Inc.*+ ................... 3,825,000
122,000 Sequana Therapeutics, Inc.* ....... 1,891,000
60,000 Serologicals Corporation* ......... 1,590,000
------------
89,000,860
------------
BUILDING &
CONSTRUCTION--.6%
418,500 Clayton Homes, Inc. ............... 8,370,000
------------
COMMUNICATIONS--11.3%
99,000 Allen Group Inc.* ................. 2,153,250
70,000 Andrew Corp.* ..................... 3,762,500
613,100 Ascend Communications, Inc.* ...... 34,486,875
155,200 Cascade Communications Corp.* ..... 10,553,600
254,500 Chancellor Broadcasting
Company Cl. A*+ ................. 7,953,125
115,000 Clear Channel Communications, Inc.* 9,473,125
89,500 Davox Corp.* ...................... 2,640,250
25,000 DSP Communications, Inc.*+ ........ 1,284,375
124,400 Evergreen Media Corp. Cl. A.*+ .... 5,318,100
553,925 Glenayre Technologies Inc.* ....... 27,696,250
25,000 Jacor Communications Inc.* ........ 771,875
221,000 LCl International, Inc.* .......... 6,933,875
56,500 MRV Communications Inc.* .......... 2,415,375
25,000 P-COM, Inc.* ...................... 787,500
75,000 Teleport Communications
Group Inc. Cl. A* ............... 1,434,375
368,200 Tellabs, Inc.* .................... 24,623,375
122,000 Young Broadcasting Inc. Cl. A.* ... 4,666,500
------------
146,954,325
------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--4.3%
72,500 C-COR Electronics Inc.* ........... 1,305,000
155,000 Cable Design Technologies Corp.*+ . 5,076,250
292,500 Cisco Systems, Inc.*+. ............ 16,562,813
257,900 Odetics Inc. Cl. A.* .............. 3,932,975
73,700 Teltrend, Inc.* ................... 2,855,875
579,400 3 Com Corp.* ...................... 26,507,550
------------
56,240,463
------------
COMPUTER SERVICES--1.8%
337,400 HBO & Company+ .................... 22,858,850
------------
COMPUTER SOFTWARE--10.5%
127,500 Applix Inc.*+ ..................... 3,665,625
100,000 AXENT Technologies, Inc.* ......... 1,650,000
151,200 Business Objects ADS* ............. 6,085,800
20,000 CBT Group PLC ADS* ................ 925,000
444,400 Compuware Corp* ................... 17,553,800
4,600 Cooper & Chyan Technology Inc.* ... 100,625
441,100 Electronics For Imaging Inc.* ..... 30,601,313
90,000 EPIC Design Technology, Inc.* ..... 2,272,500
100,000 Individual, Inc.* ................. 1,650,000
130,000 Inference Corp. Cl. A.*+ .......... 3,120,000
923,400 Informix Corporation* ............. 20,776,500
150,000 INSO Corp.*+ ...................... 7,856,250
144,200 Medic Computer Systems, Inc.* ..... 11,698,225
39,000 Parametric Technology Corporation* 1,691,625
178,500 PeopleSoft Inc.* .................. 12,718,125
104,100 Raptor Systems, Inc.*+ ............ 2,758,650
440,800 Softkey International Inc.*+ ...... 8,347,870
175,000 Tracor Inc.*+ ..................... 3,018,750
------------
136,490,658
------------
COMPUTER TECHNOLOGY--3.3%
230,400 Adaptec, Inc.* .................... 10,915,200
111,300 Biopsys Medical Inc.* ............. 2,226,000
105,300 C.P. Clare Corporation* ........... 2,711,475
275,100 Citrix Systems, Inc.*+ ............ 10,453,800
228,000 Digital Microwave Corp.* .......... 3,790,500
150,000 FORE Systems, Inc.* ............... 5,418,750
273,100 Verity Inc.* ...................... 7,851,625
------------
43,367,350
------------
CONSUMER PRODUCTS--1.1%
108,000 G&K Services Inc. Cl. A ........... 3,078,000
244,000 Oakley, Inc.*+ .................... 11,102,000
------------
14,180,000
------------
6
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED) (CONT'D)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
ELECTRONICS--.1%
55,000 SpecTran Corp.*+ .................. $ 1,072,500
------------
FINANCIAL SERVICES--3.6%
83,100 ADVANTA Corp., Class B ............ 3,760,275
224,800 AMRESCO Inc.+ ..................... 3,849,700
332,100 Green Tree Financial Corp. ........ 10,378,125
604,700 The Money Store Inc.+ ............. 13,378,981
206,500 Oxford Resources Corp. Cl. A*+ .... 4,801,125
442,400 Schwab (Charles) Corporation (The) 10,838,800
------------
47,007,006
------------
HEALTHCARE--1.7%
23,000 CNS Inc.*+ 557,750
223,600 IMNET Systems, Inc.*+ ............. 6,819,800
114,000 NPS Pharmaceuticals, Inc.* ........ 1,510,500
167,600 Orthodontic Centers Of
America, Inc.*+ ................. 4,441,400
172,400 Physicians Resource Group, Inc.*+ . 5,753,850
150,000 Respironics, Inc.*+ ............... 2,775,000
------------
21,858,300
------------
INDUSTRIAL EQUIPMENT--.8%
314,100 Waters Corporation*+ .............. 10,365,300
------------
HEALTH MAINTENANCE
ORGANIZATIONS--1.3%
425,300 Oxford Health Plans, Inc.* ........ 17,490,463
------------
LEISURE & ENTERTAINMENT--.3%
61,000 Anchor Gaming Inc.* 3,675,250
40,000 Cinar Films, Inc. Cl. B.*+ ........ 870,000
------------
4,545,250
------------
MANUFACTURING--.1%
87,500 Landec Corporation* ............... 1,662,500
------------
MEDICAL DEVICES--7.7%
341,300 Conceptus, Inc.* .................. 5,802,100
65,300 CONMED Corporation* ............... 1,738,613
234,100 ESC Medical Systems Ltd.* ......... 6,613,325
509,750 Fuisz Technologies Ltd.*+ ......... 9,685,250
187,900 Heartport, Inc.* .................. 5,683,975
447,000 Hologic, Inc.* .................... 19,779,750
114,000 IDEXX Laboratories Inc.*+ ......... 4,474,500
140,500 Intercardia, Inc.*+ ............... 4,004,250
256,000 Metra Biosystems, Inc.* ........... 1,408,000
424,300 Neuromedical Systems, Inc.*+ ...... 6,364,500
50,000 Perclose, Inc.* ................... 1,125,000
299,600 STERIS Corp.* ..................... 9,587,200
59,700 Summit Technology Inc.*+ .......... 835,800
311,600 Target Therapeutics, Inc.* ........ 12,775,600
306,400 VISX, Incorporated*+ .............. 10,455,900
------------
100,333,763
------------
MEDICAL SERVICES--5.0%
310,000 American Oncology Resources, Inc.*+ 6,742,500
184,000 CompDent Corp.*+ .................. 8,556,000
249,450 Health Management
Associates, Inc. Cl. A* ......... 5,051,363
403,000 Lincare Holdings, Inc.* ........... 15,817,750
476,550 PhyCor Inc.*+ ..................... 18,108,900
154,000 Quintiles Transnational Corp.*+ ... 10,125,500
------------
64,402,013
------------
METALS--.5%
227,000 Titanium Metals Corporation*+ ..... 5,873,625
------------
PAPER & PACKAGING &
FOREST PRODUCTS--.4%
150,100 Sealed Air Corp.* ................. 5,047,113
------------
POLLUTION CONTROL--2.9%
701,800 United Waste Systems, Inc.*+ ...... 22,633,050
525,800 USA Waste Services, Inc.* ......... 15,576,825
------------
38,209,875
------------
RESTAURANTS &
LODGING--2.9%
238,100 Boston Chicken, Inc.*+ ............ 7,738,250
34,000 Doubletree Corp.* ................. 1,207,000
580,500 Lone Star Steakhouse &
Saloon, Inc.* ................... 21,913,875
195,000 Outback Steakhouse, Inc.* ......... 6,724,380
------------
37,583,505
------------
RETAILING--8.6%
1,155,000 Charming Shoppes, Inc. ............ 8,157,765
75,000 The Finish Line, Inc., Cl. A* ..... 2,146,875
377,500 The Gap, Inc. ..................... 12,127,188
10,000 Garden Ridge Corporation*+ ........ 505,000
282,600 Gucci Group N.V.* ................. 18,227,700
502,000 Home Shopping Network Inc.*+ ...... 6,024,000
40,000 Loehmann's Inc.*+ ................. 920,000
95,000 Nine West Group Inc.*+ ............ 4,856,875
50,000 Nordstrom, Inc. ................... 2,225,000
517,650 OfficeMax, Inc.* .................. 12,358,894
60,000 Pacific Sunwear Of California Inc.* 1,410,000
63,000 Sports Authority (The) Inc.*+ ..... 2,063,250
131,600 Tiffany & Co.+ .................... 9,606,800
410,000 TJX Companies Inc.+ ............... 13,837,500
536,500 Viking Office Products, Inc.* ..... 16,832,688
------------
111,299,535
------------
SEMICONDUCTORS--5.3%
333,000 Altera Corporation* ............... 12,654,000
335,000 Linear Technology Corporation ..... 10,050,000
565,600 Maxim Integrated Products, Inc.* .. 15,448,233
285,225 Microchip Technology Incorporated* 7,059,319
729,700 Xilinx, Inc.* ..................... 23,167,975
------------
68,379,527
------------
7
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED) (CONT'D)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
MISCELLANEOUS--.9%
297,100 Loewen Group Inc. ................. $ 8,987,275
105,400 Metromail Corporation* ............ 2,358,325
-------------
11,345,600
-------------
TOTAL COMMON STOCKS
(COST $866,811,860) ............. 1,129,460,832
-------------
PRINCIPAL SHORT-TERM INVESTMENTS-19.2%
AMOUNT SHORT-TERM CORPORATE NOTES-11.5%
--------
$10,000,000 AIG Funding, Inc.,
5.30%, 7/11/96 ................ 9,985,277
25,000,000 AT&T Capital Corp.,
5.41%, 7/11/96 ................ 24,962,431
Countrywide Funding Corp.,
24,257,000 5.40%, 7/9/96 ................. 24,227,892
25,000,000 5.42%, 7/10/96 ................ 24,966,125
25,743,000 International Lease Finance Corp.,
5.35%, 7/2/96 ................. 25,739,173
25,000,000 Philip Morris Cos. Inc.,
5.31%, 7/15/96 ................ 24,948,375
15,000,000 TDK USA Corp.
5.48%, 7/9/96 ................. 14,981,735
-------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $149,811,008) ........... 149,811,008
-------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--7.7%
Securities Held Under Repurchase
Agreements, 5.30%-5.625%,
7/1/96, with Bear, Stearns & Co.
Inc., dtd 6/28/96, repurchase price
$99,741,545; collateralized by
U.S. Treasury Notes, U.S.
Treasury Bonds and U.S. Treasury
Strips (par value
$472,195,000 due 8/15/22) ........$ 99,695,164
--------------
TOTAL SHORT-TERM INVESTMENTS
(COST $249,506,172 ) ............ 249,506,172
--------------
TOTAL INVESTMENTS
(COST $1,116,318,032)(A) 106.1% 1,378,967,004
Liabilities in Excess Of Other Assets (6.1) (79,130,626)
----- ==============
NET ASSETS 100.0% $1,299,836,378
===== ==============
- --------------------------------------------------------------------------------
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At June 30, 1996, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $1,116,318,032, amounted to
$262,648,972, which consisted on aggregate gross unrealized appreciation of
$292,029,087 and aggregate gross unrealized depreciation of $29,380,115.
See Notes to Financial Statements.
8
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED -----------------------------------------------------------------
JUNE 30, 1996(i) 1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 39.41 $ 27.31 $ 30.88 $ 27.26 $ 26.79 $ 17.02
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.02) (0.09) (0.03)(ii) (0.05) (0.06) (0.03)
Net realized and unrealized gain
(loss) on investments 3.10 12.19 (1.45) 3.67 0.91 9.82
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.08 12.10 (1.48) 3.62 0.85 9.79
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income -- -- -- -- -- (0.02)
Distributions from net realized gains (0.16) -- (2.09) -- (0.38) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.16) -- (2.09) -- (0.38) (0.02)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 42.33 $ 39.41 $ 27.31 $ 30.88 $ 27.26 $ 26.79
==================================================================================================================================
Total Return 7.80% 44.31% (4.38%) 13.28% 3.55% 57.54%
==================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $1,299,836 $984,212 $397,037 $238,850 $135,718 $ 56,798
==================================================================================================================================
Ratio of expenses to average net assets 0.88% 0.92% 0.96% 1.03% .98% 1.06%
==================================================================================================================================
Ratio of net investment income (loss) to
average net assets (0.26%) (0.48%) (0.10%) (0.35%) (0.37%) (0.12%)
==================================================================================================================================
Portfolio Turnover Rate 54.01% 80.66% 117.61% 148.07% 108.06% 125.90%
==================================================================================================================================
Average Commission Rate Paid $ .0642
==================================================================================================================================
(i) Unaudited. Ratios have been annualized; total return has not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)--JUNE 30, 1996
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS--85.5% VALUE
------ -----
AEROSPACE--6.6%
3,300 The Boeing Company ................ $ 287,513
18,000 Sundstrand Corp. .................. 659,250
------------
946,763
------------
ALUMINUM--3.3%
1,900 Aluminum Co. of America ........... 109,013
7,000 Reynolds Metals Co.+ .............. 364,875
------------
473,888
------------
AUTOMOTIVE--1.3%
3,000 Chrysler Corporation ............... 186,000
------------
BIO-TECHNOLOGY--3.1%
3,800 Amgen Inc.* ........................ 205,200
9,000 DEKALB Genetics Corp Cl. B+ ........ 234,000
------------
439,200
------------
CHEMICALS--3.4%
15,000 Monsanto Co. ....................... 487,500
------------
COMMUNICATIONS--3.4%
5,000 Telecommunicacoes
Brasilerias S.A. ADR ............. 348,125
2,500 WorldCom Inc.* ..................... 138,438
------------
486,563
------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--7.4%
9,800 Cisco Systems, Inc.*+ .............. 554,925
7,800 3 Com Corp.* ....................... 356,850
2,700 Xerox Corp.......................... 144,450
------------
1,056,225
------------
CONSUMER PRODUCTS--3.0%
5,000 Colgate Palmolive Co. .............. 423,750
------------
CONTAINERS--1.9%
6,000 Crown Cork & Seal Co., Inc. ........ 270,000
------------
DEFENSE--5.8%
4,850 Lockheed Martin Corp. .............. 407,400
8,600 McDonnell Douglas Corporation ...... 417,100
------------
824,500
------------
FINANCIAL SERVICES--5.9%
3,000 Chase Manhattan Corp. .............. 211,875
4,837 First Data Corporation ............. 385,146
2,000 Merrill Lynch & Co., Inc. .......... 130,250
5,000 The Money Store Inc. ............... 110,625
------------
837,896
------------
HEALTHCARE--11.6%
5,900 Columbia/HCA Healthcare Corporation 314,913
5,100 Guidant Corp. ...................... 251,175
3,128 Johnson & Johnson .................. 154,836
4,900 Lilly (Eli) Co. .................... 318,500
6,600 Merck & Co., Inc. .................. 426,525
3,500 SmithKline Beecham PLC ADS ......... 190,313
------------
1,656,262
------------
INSURANCE--3.2%
3,200 American International Group, Inc. . 315,600
3,000 Travelers Group Inc. ............... 136,875
------------
452,475
------------
MACHINERY--1.4%
4,200 Case Corp. ......................... 201,600
------------
MANUFACTURING--2.7%
8,850 Precision Castparts Corp.+ ......... 380,550
------------
MEDICAL SERVICES--1.8%
4,700 Medtronic, Inc. .................... 263,200
------------
OIL & GAS--6.5%
2,000 Chevron Corp. ...................... 118,000
3,000 Exxon Corp. ........................ 260,625
5,300 Halliburton Co. .................... 294,150
1,000 Schlumberger Ltd.................... 84,250
4,000 Tidewater Inc. ..................... 175,500
------------
932,525
------------
PHARMACEUTICALS--4.6%
7,000 Astra AB ADS Series A+ ............. 306,250
5,000 Pfizer, Inc. ....................... 356,875
------------
663,125
------------
RETAILING--2.1%
2,300 Gucci Group N.V.* .................. 148,350
4,500 TJX Companies, Inc. ................ 151,875
------------
300,225
------------
SEMI-CONDUCTORS--2.5%
2,400 Altera Corporation* ................ 91,200
8,700 Xilinx, Inc.* ...................... 276,225
------------
367,425
------------
MISCELLANEOUS--4.0%
4,500 Loewen Group Inc. .................. 136,123
7,500 Service Corporation International .. 431,250
------------
567,373
------------
TOTAL COMMON STOCKS
(COST $10,925,090) ............... 12,217,045
------------
10
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED) (CONT'D)
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--21.1% VALUE
------ -----
SHORT-TERM CORPORATE NOTES--11.9%
$650,000 Countrywide Funding Corp.,
5.42%, 7/10/96 ................... $ 649,119
400,000 International Lease Finance Corp.,
5.35%, 7/02/96 ................... 399,941
650,000 Repsol International Finance B.V.,
5.27%, 7/10/96 ................... 649,143
------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $1,698,203) ................ 1,698,203
------------
SECURITIES HELD
UNDER REPURCHASE
AGREEMENTS--9.2%
Securities Held Under Repurchase
Agreements, 5.30%-5.625%, 7/1/96,
with Bear, Stearns & Co. Inc., dtd 6/28/96,
repurchase price $1,309,262; collateralized by
U.S. Treasury Bonds (par value
$8,365,000 due 8/15/22) ........... 1,308,668
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $3,006,871) ................ 3,006,871
------------
TOTAL INVESTMENTS
(COST $13,931,961)(A) 106.6% 15,223,916
Liabilities in Excess Of Other Assets (6.6) (936,396)
----- -----------
NET ASSETS 100.0% $14,287,520
===== ===========
- --------------------------------------------------------------------------------
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At June 30, 1996, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $13,931,961, amounted to $1,291,955
which consisted of aggregate gross unrealized appreciation of $1,553,051 and
aggregate gross unrealized depreciation of $261,096.
See Notes to Financial Statements.
11
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED -----------------------------------------------------------------
JUNE 30, 1996(I) 1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.79 $ 13.30 $ 15.31 $ 13.93 $ 13.08 $ 10.67
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.05(ii) 0.11(ii) 0.17 0.07 0.08 0.09
Net realized and unrealized gain
(loss) on investments 0.91 4.54 (1.47) 1.37 1.02 2.41
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.96 4.65 (1.30) 1.44 1.10 2.50
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.33) (0.16) (0.15) (0.06) (0.12) (0.09)
Distributions from net realized gains (11.00) -- (0.56) -- (0.13) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (11.33) (0.16) (0.71) (0.06) (0.25) (0.09)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.42 $ 17.79 $ 13.30 $ 15.31 $ 13.93 $ 13.08
==================================================================================================================================
Total Return 5.47% 35.13% (8.28%) 10.34% 8.64% 23.51%
==================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $14,288 $ 8,639 $29,135 $31,895 $ 8,671 $ 2,663
==================================================================================================================================
Ratio of expenses to average net assets 0.85% 0.75% 0.75% 0.97% 1.25% 1.25%
==================================================================================================================================
Decrease reflected in above expense ratios
due to expense reimbursements -- -- -- -- 0.01% 0.66%
==================================================================================================================================
Ratio of net investment income to average
net assets 0.84% 0.61% 1.22% 1.51% 1.62% 2.54%
==================================================================================================================================
Portfolio Turnover Rate 75.51% 164.05% 177.97% 105.80% 100.62% 61.11%
==================================================================================================================================
Average Commission Rate Paid $.0726
==================================================================================================================================
(i) Unaudited. Ratios have been annualized; total return has not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS--59.1% VALUE
------ -----
AEROSPACE--2.7%
700 The Boeing Company ................. $ 60,988
600 Delta Air Lines Inc. ............... 49,800
2,500 Sundstrand Corp. ................... 91,563
------------
202,351
------------
ALUMINUM--.8%
800 Aluminum Co. of America ............ 45,900
300 Reynolds Metals Co.+ ............... 15,638
------------
61,538
------------
APPAREL--.7%
1,000 Tommy Hilfiger Corporation* ........ 53,625
------------
AUTOMOTIVE--1.1%
1,300 Chrysler Corporation .............. 80,600
------------
BIO-TECHNOLOGY--1.6%
600 Amgen Inc.* ........................ 32,400
2,300 BioChem Pharma Inc.* ............... 86,250
------------
118,650
------------
BUILDING & CONSTRUCTION--1.0%
3,750 Clayton Homes, Inc. ................ 75,000
------------
CHEMICALS--.9%
2,125 Monsanto Co. ....................... 69,063
------------
COMMUNICATIONS--4.4%
1,000 Ascend Communications, Inc.* ....... 56,250
1,000 Glenayre Technologies Inc.* ........ 50,000
1,600 LCI International, Inc.* ........... 50,200
600 Telecommunicacoes Brasileiras
S.A. ADR 41,775
2,500 WorldCom, Inc.* .................... 138,438
------------
336,663
------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--4.1%
2,600 Cisco Systems, Inc.*+ .............. 147,225
2,500 3 Com Corp.* ....................... 114,375
850 Xerox Corp. ........................ 45,475
------------
307,075
------------
COMPUTER SOFTWARE--2.4%
2,000 Compuware Corp.* ................... 79,000
4,500 Informix Corporation* .............. 101,250
------------
180,250
------------
COMPUTER TECHNOLOGY--.5%
800 Adaptec, Inc.* ..................... 37,900
------------
CONSUMER PRODUCTS--1.6%
600 Colgate Palmolive Co. .............. 50,850
1,900 CUC International Inc.* ............ 67,450
------------
118,300
------------
DEFENSE--2.1%
741 Lockheed Martin Corp. .............. 62,244
2,000 McDonnell Douglas Corporation ...... 97,000
------------
159,244
------------
FINANCIAL SERVICES--7.6%
1,000 ADVANTA Corp., Class B ............. 45,250
1,600 Chase Manhattan Corp................ 113,000
1,813 First Data Corporation.............. 144,360
2,560 Green Tree Financial Corp. ......... 80,000
2,700 MBNA Corp. ......................... 76,950
3,000 The Money Store Inc. ............... 66,375
2,000 Schwab (Charles) Corporation (The) . 49,000
------------
574,935
------------
HEALTHCARE--4.6%
500 Boston Scientific Corporation* ..... 22,500
2,000 Columbia/HCA Healthcare Corporation 106,750
700 Guidant Corp. ...................... 34,475
450 Johnson & Johnson .................. 22,275
1,000 Lilly, (Eli) Co. ................... 65,000
1,500 Merck & Co., Inc. .................. 96,938
------------
347,938
------------
HEALTH MAINTENANCE
ORGANIZATIONS--1.3%
1,100 Oxford Health Plans, Inc.* ......... 45,238
1,100 United Healthcare Corporation ...... 55,550
------------
100,788
------------
INSURANCE--2.6%
1,000 American International Group, Inc. . 98,625
2,100 Travelers Group Inc. ............... 95,813
------------
194,438
------------
MACHINERY--.6%
1,000 Case Corp........................... 48,000
------------
MEDICAL SERVICES--.7%
1,000 Medtronic, Inc. .................... 56,000
------------
OIL & GAS--1.6%
900 Halliburton Co. .................... 49,950
300 Schlumberger Ltd. .................. 25,275
1,100 Tidewater Inc. ..................... 48,263
------------
123,488
------------
PHARMACEUTICALS--1.6%
2,100 Astra AB ADS Series A+ ............. 91,875
600 Pfizer, Inc......................... 42,825
------------
134,700
------------
POLLUTION CONTROL--.8%
2,000 USA Waste Services, Inc.* .......... 59,250
------------
13
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED) (CONT'D)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
RESTAURANTS & LODGING--2.9%
2,500 Boston Chicken Inc.* ............... $ 81,250
3,000 Lone Star Steakhouse & Saloon, Inc.* 113,250
700 Outback Steakhouse, Inc.* .......... 24,139
------------
218,639
------------
RETAILING--4.8%
2,600 The Gap, Inc. ...................... 83,525
1,500 Gucci Group N.V.* .................. 96,750
5,000 OfficeMax, Inc.* ................... 119,375
2,000 Viking Office Products, Inc.* ...... 62,750
------------
362,400
------------
SEMI-CONDUCTORS--3.8%
1,100 Altera Corporation* ................ 41,800
1,000 Intel Corp. ........................ 73,438
1,900 Maxim Integrated Products, Inc.* ... 51,895
1,100 Microchip Technology Incorporated* . 27,225
3,000 Xilinx, Inc.* ...................... 95,250
------------
289,608
------------
MISCELLANEOUS--2.3%
1,900 Loewen Group Inc. .................. 57,475
2,000 Service Corporation International .. 115,000
------------
172,475
------------
TOTAL COMMON STOCK
(COST $4,035,675) ................ 4,482,918
------------
PRINCIPAL
AMOUNT CORPORATE BONDS--5.7%
--------
AUTOMOTIVE--3.0%
$200,000 Ford Motor Credit Corp.,
9.50%, 6/1/10 .................... 230,210
------------
FINANCIAL SERVICES--1.3%
100,000 Bank America Corp.,
7.125%, 5/12/05 .................. 98,609
------------
INSURANCE--1.4%
100,000 Travelers Inc.,
7.75%, 6/15/99 ................... 102,276
------------
TOTAL CORPORATE BONDS
(COST $467,480) .................. 431,095
------------
U.S. GOVERNMENT AND
AGENCY OBLIGATIONS--13.7%
$200,000 U.S. Treasury Notes, 7.50%, 10/31/99 $ 206,718
200,000 U.S. Treasury Notes, 7.50%, 5/15/02 209,562
200,000 U.S. Treasury Bonds, 7.625%, 11/15/22 213,968
200,000 Federal Home Loan Mortgage Corp.,
8.20%, 1/16/98 ................... 202,844
200,000 Federal National Mortgage Association,
8.50%, 2/1/05 .................... 208,718
------------
TOTAL U.S. GOVERNMENT & AGENCY
OBLIGATIONS (COST $989,251) ...... 1,041,810
------------
SHORT-TERM INVESTMENTS--24.4%
SHORT-TERM CORPORATE NOTES--12.5%
300,000 AIG Funding Inc.,
5.30%,7/11/96 .................... 299,558
325,000 AT&T Capital Corp.,
5.41%, 7/11/96 ................... 324,512
325,000 Countrywide Funding Corp.,
5.42%, 7/10/96 ................... 324,560
------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $948,630) 948,630
------------
SHORT-TERM
U.S. GOVERNMENT
OBLIGATIONS--5.2%
400,000 U.S. Treasury Bills, 5.08%, 9/26/96
(COST $395,084) ................. 395,518
------------
SECURITIES HELD UNDER
REPURCHASE
AGREEMENTS--6.7%
Securities Held Under Repurchase
Agreements, 5.30%-5.50%, 7/1/96,
with Bear, Stearns & Co. Inc., dtd
6/28/96, repurchase price $509,998;
collateralized by U.S. Treasury Bonds
(par value $3,105,000, due 11/15/21) 509,773
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,853,487) 1,853,921
------------
TOTAL INVESTMENTS
(COST $7,345,893)(A) 102.9% 7,809,744
Liabilities in Excess Of Other Assets (2.9) (221,689)
----- ------------
NET ASSETS 100.0% $ 7,588,055
===== ============
- --------------------------------------------------------------------------------
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At June 30, 1996, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $7,345,893, amounted to $463,851
which consisted of aggregate gross unrealized appreciation of $592,526 and
aggregate gross unrealized depreciation of $128,675.
See Notes to Financial Statements.
14
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO (I)
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED -----------------------------------------------------------------
JUNE 30, 1996(II) 1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.64 $ 10.80 $ 11.58 $10.77 $10.02 $10.01
- ------------------------------------------------------------------------------------------------------------------------
Net investment income 0.11(iii) 0.33(iii) 0.20 0.15 0.22 0.45
Net realized and unrealized gain
(loss) on investments 0.70 2.73 (0.70) 0.69 0.72 0.01
- ------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.81 3.06 (0.50) 0.84 0.94 0.46
- ------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.73) (0.22) (0.13) (0.03) (0.19) (0.45)
Distributions from net realized gains (4.89) -- (0.15) -- -- --
- ------------------------------------------------------------------------------------------------------------------------
Total Distributions (5.62) (0.22) (0.28) (0.03) (0.19) (0.45)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.83 $ 13.64 $ 10.80 $11.58 $10.77 $10.02
========================================================================================================================
Total Return 5.28% 28.62% (4.27%) 7.79% 9.48% 4.70%
========================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) $7,588 $ 3,671 $10,394 $7,848 $4,009 $1,487
========================================================================================================================
Ratio of expenses to average net
assets 1.25% 1.00% 1.08% 1.25% 1.25% 1.25%
========================================================================================================================
Decrease reflected in above expense
ratios due to expense
reimbursements -- -- -- 0.19% 0.42% 1.37%
========================================================================================================================
Ratio of net investment income to
average net assets 1.87% 2.49% 2.30% 2.05% 1.99% 4.22%
========================================================================================================================
Portfolio Turnover Rate 38.77% 113.02% 78.80% 85.46% 15.27% --
========================================================================================================================
Average Commission Rate Paid $.0725
========================================================================================================================
(i) Prior to October 1, 1992, the American Balanced Portfolio was the American Fixed Income Portfolio.
(ii) Unaudited. Ratios have been annualized; total return has not been annualized.
(iii) Amount was computed based on average shares outstanding during the period.
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS--90.8% VALUE
------ -----
AEROSPACE--2.3%
182,000 Sundstrand Corp. ................... $ 6,665,750
------------
AGRICULTURE--.3%
17,000 Delta and Pine Land Co. ............ 718,250
------------
ALUMINUM--.5%
29,500 Reynolds Metals Co.+ ............... 1,537,688
------------
APPAREL--2.5%
90,000 Gymboree Corp.* .................... 2,745,000
83,400 Tommy Hilfiger Corporation* ........ 4,472,325
------------
7,217,325
------------
BIO-TECHNOLOGY--3.4%
171,900 BioChem Pharma Inc.* ............... 6,446,250
52,300 Centocor, Inc.* .................... 1,562,463
30,000 Guilford Pharmaceuticals Inc.* ..... 712,500
51,000 Liposome Company, Inc.*+ ........... 956,250
------------
9,677,463
------------
BUILDING AND
CONSTRUCTION--1.1%
158,025 Clayton Homes, Inc. ................ 3,160,500
------------
COMMUNICATIONS--11.9%
100,000 Ascend Communications, Inc.* ....... 5,625,000
47,600 Cascade Communications Corp.* ...... 3,236,800
42,400 Evergreen Media Corp. Cl. A.*+ ..... 1,812,600
111,075 Glenayre Technologies Inc.* ........ 5,553,750
48,100 LCl International, Inc.* ........... 1,509,138
81,000 MFS Communications Co., Inc.* ...... 3,047,625
59,000 Tellabs, Inc.* ..................... 3,945,625
161,700 WorldCom Inc.* ..................... 8,954,138
------------
33,684,676
------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--4.4%
66,000 Cable Design Technologies Corp.* ... 2,161,500
56,100 Cisco Systems, Inc.*+ .............. 3,176,663
157,000 3 Com Corp.* ....................... 7,182,750
------------
12,520,913
------------
COMPUTER SOFTWARE--6.4%
29,700 Business Objects ADS* .............. 1,195,425
109,900 Compuware Corp.* ................... 4,341,050
40,000 Electronics For Imaging, Inc.* ..... 2,775,000
310,400 Informix Corporation* .............. 6,984,000
144,900 Softkey International Inc.* ........ 2,744,116
------------
18,039,591
------------
COMPUTER TECHNOLOGY--1.5%
55,000 Adaptec, Inc.* ..................... 2,605,625
42,000 Citrix Systems, Inc.*+ ............. 1,596,000
------------
4,201,625
------------
CONSUMER PRODUCTS--2.4%
125,500 CUC International Inc.* ............ 4,455,250
31,000 G&K Services Inc. Cl. A ............ 883,500
31,000 Oakley, Inc.*+ ..................... 1,410,500
------------
6,749,250
------------
FINANCIAL SERVICES--9.1%
80,000 ADVANTA Corp., Class B ............. 3,620,000
55,506 First Data Corporation ............. 4,419,665
126,400 Green Tree Financial Corp. ......... 3,950,000
141,500 MBNA Corp. ......................... 4,032,750
252,500 The Money Store Inc. + ............. 5,586,563
170,000 Schwab (Charles) Corporation (The) . 4,165,000
------------
25,773,978
------------
HEALTHCARE--2.0%
72,300 Boston Scientific Corporation* ..... 3,253,500
48,800 Guidant Corp. ...................... 2,403,400
------------
5,656,900
------------
HEALTH MAINTENANCE
ORGANIZATIONS--1.8%
84,500 Oxford Health Plans, Inc.* ......... 3,475,063
30,000 United Healthcare Corporation ...... 1,515,000
------------
4,990,063
------------
MACHINERY--.7%
43,000 Case Corp........................... 2,064,000
------------
MEDICAL DEVICES--3.7%
50,000 Fuisz Technologies Ltd.* ........... 950,000
45,900 Heartport, Inc.* ................... 1,388,475
45,000 IDEXX Laboratories Inc.* ........... 1,766,250
74,000 STERIS Corp.* ...................... 2,368,000
30,000 Target Therapeutics, Inc.* ......... 1,230,000
77,500 VISX, Incorporated* ................ 2,644,688
------------
10,347,413
------------
MEDICAL SERVICES--1.0%
135,000 American Oncology Resources, Inc.* . 2,936,250
------------
METALS--1.1%
120,000 Titanium Metals Corporation*+ ...... 3,105,000
------------
16
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED) (CONT'D)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
OIL & GAS--2.2%
66,500 Halliburton Co. .................... $ 3,690,750
57,000 Tidewater Inc. ..................... 2,500,875
------------
6,191,625
------------
PAPER & PACKAGING &
FOREST PRODUCTS--1.1%
94,800 Sealed Air Corp.* .................. 3,187,650
------------
POLLUTION CONTROL--3.6%
182,600 United Waste Systems, Inc.* ........ 5,888,850
147,700 USA Waste Services, Inc.* .......... 4,375,613
------------
10,264,463
------------
RESTAURANTS &
LODGING--5.9%
220,700 Boston Chicken, Inc.* .............. 7,172,750
214,300 Lone Star Steakhouse & Saloon, Inc.* 8,089,825
42,900 Outback Steakhouse, Inc.* .......... 1,479,364
------------
16,741,939
------------
RETAILING--10.8%
50,600 Cintas Corp......................... 2,707,100
158,000 The Gap, Inc........................ 5,075,750
73,000 Gucci Group N.V.* .................. 4,708,500
65,000 Nine West Group Inc.*+ ............. 3,323,125
330,200 OfficeMax, Inc.* ................... 7,883,525
20,600 Sports Authority (The) Inc.* ....... 674,650
84,800 TJX Companies Inc.+................. 2,862,000
112,800 Viking Office Products, Inc.* ...... 3,539,100
------------
30,773,750
------------
SEMICONDUCTORS--6.2%
87,600 Altera Corporation* ................ 3,328,800
82,900 Linear Technology Corporation ...... 2,487,000
126,700 Maxim Integrated Products, Inc.* ... 3,460,557
64,500 Microchip Technology Incorporated* . 1,596,371
209,200 Xilinx, Inc.* ...................... 6,642,100
------------
17,514,828
------------
MISCELLANEOUS--4.9%
195,800 Loewen Group Inc. .................. 5,922,950
139,000 Service Corporation International .. 7,992,500
------------
13,915,450
------------
TOTAL COMMON STOCKS
(COST $222,670,901) .............. $257,636,340
------------
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--10.9% VALUE
-------- -----
SHORT-TERM CORPORATE NOTES--7.0%
$12,500,000 AT&T Capital Corp.,
5.41%, 7/11/96 ................... $ 12,481,215
7,500,000 International Lease Finance Corp.,
5.35%, 7/2/96 .................... 7,498,885
------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $19,980,100) ............... 19,980,100
------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--3.9%
Securities Held Under Repurchase
Agreements, 5.30%-5.625%,
7/1/96, with Bear, Stearns & Co.
Inc., dtd 6/28/96, repurchase price
$10,962,476; collateralized by
U.S. Treasury Bonds (par value
$66,610,000 due 11/15/21) ......... 10,957,482
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $30,937,582) ............... 30,937,582
------------
TOTAL INVESTMENTS
(COST $253,608,483)(A) 101.7% 288,573,922
Liabilities in Excess Of Other Assets (1.7) (4,720,550)
----- ------------
NET ASSETS 100.0% $283,853,372
====== ============
- --------------------------------------------------------------------------------
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At June 30, 1996, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $253,608,483, amounted to
$34,965,439 which consisted of aggregate gross unrealized appreciation of
$41,136,309 and aggregate gross unrealized depreciation of $6,170,870.
See Notes to Financial Statements.
17
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FROM MAY 3, 1993
SIX MONTHS YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
ENDED ------------------------------- OPERATIONS)
JUNE 30, 1996(i)(ii) 1995 1994 TO DECEMBER 31, 1993(II)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.44 $ 13.46 $ 13.72 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.01 (0.03) 0.00(iii) (0.02)
Net realized and unrealized gain (loss) on investments 1.65 6.01 (0.21) 3.88
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.66 5.98 (0.21) 3.86
Distributions from net realized gains (0.41) -- (0.05) (0.14)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.69 $ 19.44 $ 13.46 $ 13.72
====================================================================================================================================
Total Return 8.44% 44.45% (1.54%) 38.67%
====================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $283,853 $185,349 $62,178 $21,301
====================================================================================================================================
Ratio of expenses to average net assets 0.85% 0.90% 0.97% 1.50%
====================================================================================================================================
Decrease reflected in above expense ratio
due to expense reimbursements -- -- -- 0.03%
====================================================================================================================================
Ratio of net investment income (loss) to average
net assets 0.02% (0.25%) 0.03% (0.58%)
====================================================================================================================================
Portfolio Turnover Rate 53.38% 104.74% 83.96% 67.22%
====================================================================================================================================
Average Commission Rate Paid $ .0686
====================================================================================================================================
(i) Unaudited.
(ii) Ratios have been annualized; total return has not been annualized.
(iii) Amount was computed based on average shares outstanding during the period.
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS--87.2% VALUE
------ -----
AEROSPACE--1.4%
1,300 The Boeing Company $ 113,263
5,000 Sundstrand Corp. ................... 183,125
------------
296,388
------------
AGRICULTURE--.8%
3,900 Delta and Pine Land Co. ............ 164,775
------------
ALUMINUM--.9%
1,800 Aluminum Co. of America............. 103,275
2,000 Reynolds Metals Co.+ ............... 104,250
------------
207,525
------------
APPAREL--.2%
1,600 Nautica Enterprises, Inc.* ......... 46,000
------------
AUTOMOTIVE--.7%
2,500 Chrysler Corporation................ 155,000
------------
BIO-TECHNOLOGY--6.2%
2,500 Amgen Inc.* ........................ 135,000
6,100 BioChem Pharma Inc.* ............... 228,750
12,000 CellPro Incorporated* .............. 216,000
5,100 Centocor, Inc.* .................... 152,363
4,000 Cygnus, Inc.* ...................... 61,000
3,400 Cytotherapeutics, Inc.* ............ 37,825
4,000 Ergo Science Corporation ........... 74,500
10,000 Genzyme Corp.--Tissue Repair Division* 117,500
4,500 IDEC Pharmaceuticals, Corporation* . 104,063
2,300 Incyte Pharmaceuticals, Inc.* ...... 88,695
3,500 Liposome Company Inc.* ............. 65,625
4,000 Sepracor Inc.* ..................... 60,000
------------
1,341,321
------------
CHEMICALS--.5%
3,500 Monsanto Co. 113,750
------------
COMMUNICATIONS--11.8%
3,100 Allen Group Inc.* .................. 67,425
9,400 Ascend Communications, Inc.* ....... 528,750
3,000 Cascade Communications Corp.* ...... 204,000
7,775 Glenayre Technologies Inc.* ........ 388,750
2,500 LCI International Inc.* ............ 78,438
4,000 MFS Communications Inc.* ........... 150,500
1,500 Telecommunicacoes Brasileiras
S.A. ADR ......................... 104,438
7,100 Tellabs, Inc.* ..................... 474,813
10,000 WorldCom Inc.* ..................... 553,750
------------
2,550,864
------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--6.2%
4,700 C-COR Electronics Inc.* ............ 84,600
10,300 Cisco Systems, Inc.*+ .............. 583,238
2,500 Network Appliance, Inc.* ........... 74,375
6,000 Odetics Inc. Cl. A.* ............... 91,500
11,000 3 Com Corp.* ....................... 503,250
------------
1,336,963
------------
COMPUTER SERVICES--1.5%
10,000 FactSet Research Systems Inc.* ..... 200,000
2,000 HBO & Company ...................... 135,500
------------
335,500
------------
COMPUTER SOFTWARE--9.6%
2,800 Business Objects ADS* .............. 112,700
10,000 Compuware Corp.* ................... 395,000
3,700 Electronics For Imaging Inc.* ...... 256,688
10,000 Individual, Inc.* .................. 165,000
9,000 Inference Corp. Cl. A.* ............ 216,000
8,500 Informix Corporation* .............. 191,250
2,000 Medic Computer Systems, Inc.* ...... 162,250
5,000 Parametric Technology Corporation* . 216,875
2,600 PeopleSoft Inc.* ................... 185,250
9,900 Softkey International Inc.* ........ 187,486
------------
2,088,499
------------
COMPUTER TECHNOLOGY--.9%
6,500 Verity Inc.* ....................... 186,875
------------
CONSUMER PRODUCTS--2.2%
4,700 Colgate Palmolive Co. .............. 398,325
1,500 Oakley, Inc.*+ ..................... 68,250
------------
466,575
------------
DEFENSE--3.0%
4,600 Lockheed Martin Corp. .............. 386,400
5,400 McDonnell Douglas Corporation ...... 261,900
------------
648,300
------------
FINANCIAL SERVICES--5.5%
4,600 Chase Manhattan Corp............... 324,875
6,000 First Data Corporation ............. 477,750
3,000 Green Tree Financial Corp. ......... 93,750
10,100 The Money Store Inc. ............... 223,463
3,000 Oxford Resources Corp. Cl. A*+ ..... 69,750
300 Schwab (Charles) Corporation (The) . 7,350
------------
1,196,938
------------
19
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED) (CONT'D)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
HEALTHCARE--3.7%
2,500 Guidant Corp. ...................... $ 123,125
7,000 IMNET Systems, Inc.*+ .............. 213,500
902 Johnson & Johnson .................. 44,642
2,000 Lilly (Eli) Co. .................... 130,000
2,300 Lunar Corp.* ....................... 79,350
3,200 Merck & Co., Inc. .................. 206,800
------------
797,417
------------
HEALTH MAINTENANCE
ORGANIZATIONS--.9%
5,000 Oxford Health Plans, Inc.* ......... 205,625
------------
INSURANCE--.9%
1,900 American International Group, Inc. . 187,388
------------
MACHINERY--.5%
2,100 Case Corp........................... 100,800
------------
MEDICAL DEVICES--6.4%
4,500 Conceptus, Inc.* ................... 76,500
2,400 ESC Medical Systems Ltd.* .......... 67,800
7,050 Fuisz Technologies Ltd.* ........... 133,950
2,500 Heartport Inc.* .................... 75,625
12,400 Hologic, Inc.* ..................... 548,700
4,000 Intercardia, Inc.*+ ................ 114,000
10,000 Neuromedical Systems, Inc.* ........ 150,000
2,700 Target Therapeutics, Inc.* ......... 110,700
3,300 VISX, Incorporated* ................ 112,613
------------
1,389,888
------------
MEDICAL SERVICES--3.7%
4,000 American Oncology Resources, Inc.* . 87,000
5,600 Lincare Holdings, Inc.* ............ 219,800
3,000 Medtronic, Inc. .................... 168,000
6,000 PhyCor Inc.* ....................... 228,000
1,400 Quintiles Transnational Corp.* ..... 92,050
------------
794,850
------------
METALS--.6%
5,000 Titanium Metals Corporation*+ ...... 129,375
------------
OIL & GAS--1.5%
1,800 Halliburton Co. .................... 99,900
1,500 Schlumberger Ltd. .................. 126,375
2,300 Tidewater Inc. ..................... 100,913
------------
327,188
------------
PHARMACEUTICALS--3.0%
9,200 Astra AB ADS Series A+ ............. 402,500
3,600 Pfizer, Inc. ....................... 256,950
------------
659,450
------------
POLLUTION CONTROL--1.8%
3,200 United Waste Systems, Inc.* ........ 103,200
10,000 USA Waste Services, Inc.* .......... 296,250
------------
399,450
------------
RESTAURANTS & LODGING--2.4%
7,000 Boston Chicken Inc.* ............... 227,500
7,900 Lone Star Steakhouse & Saloon, Inc.* 298,225
------------
525,725
------------
RETAILING--4.2%
7,500 The Gap, Inc. ...................... 240,938
3,300 Gucci Group N.V.* .................. 212,850
6,500 TJX Companies Inc.+ ................ 219,375
7,300 Viking Office Products, Inc.* ...... 229,038
------------
902,201
------------
SEMICONDUCTORS--3.2%
5,100 Altera Corporation* ................ 193,800
2,300 Linear Technology Corporation ...... 69,000
5,600 Maxim Integrated Products, Inc.* ... 152,953
9,000 Xilinx, Inc.* ...................... 285,750
------------
701,503
------------
MISCELLANEOUS--3.0%
4,500 Loewen Group Inc. .................. 136,125
7,000 Service Corporation International .. 402,500
4,000 Vincam Group, Inc.* ................ 104,000
------------
642,625
------------
TOTAL COMMON STOCKS
(COST $17,632,273) ............... 18,898,758
------------
20
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1996 (UNAUDITED) (CONT'D)
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--16.8% VALUE
- -------- -----
SHORT-TERM CORPORATE NOTES--13.6%
$900,000 AT&T Capital Corp.,
5.41%, 7/11/96 ................... $ 898,648
900,000 Countrywide Funding Corp.,
5.42%, 7/10/96 ................... 898,781
400,000 International Lease Finance Corp.,
5.35%, 7/2/96 .................... 399,941
750,000 Philip Morris Cos. Inc.,
5.31%, 7/15/96 ................... 748,451
------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $2,945,821) ................ 2,945,821
------------
SECURITIES HELD
UNDER REPURCHASE
AGREEMENTS--3.2%
Securities Held Under Repurchase
Agreements, 5.30%-5.50%, 7/1/96,
with Bear, Stearns & Co. Inc., dtd
6/28/96, repurchase price
$706,652; collateralized by
U.S. Treasury Bonds (par value
$4,300,000, due 11/15/21) ........ 706,337
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $3,652,158) ................ 3,652,158
------------
TOTAL INVESTMENTS
(COST $21,284,431)(A) .............. 104.0% 22,550,916
Other Assets in Excess Of Liabilities (4.0) (876,529)
----- ------------
NET ASSETS ........................... 100.0% $21,674,387
============
- --------------------------------------------------------------------------------
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At June 30, 1996, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $21,284,431, amounted to $1,266,485,
which consisted of aggregate gross unrealized appreciation of $1,970,992 and
aggregate gross unrealized depreciation of $704,507.
See Notes to Financial Statements.
21
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FROM JANUARY 25, 1995
SIX MONTHS (COMMENCEMENT OF
ENDED OPERATIONS)
JUNE 30, 1996(I)(II)TO DECEMBER 31, 1995(II)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 17.43 $ 10.00
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment (loss) (0.03)iii (0.03)
Net realized and unrealized gain (loss) on investments 2.04 7.46
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.01 7.43
Distributions from net realized gains (0.18) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 19.26 $ 17.43
===================================================================================================================================
Total Return 11.46% 74.30%
===================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $ 21,674 $ 5,497
===================================================================================================================================
Ratio of expenses excluding interest to average net assets 1.22% 1.50%
===================================================================================================================================
Ratio of expenses including interest to average net assets 1.22% 1.56%
===================================================================================================================================
Decrease reflected in above expense ratios
due to expense reimbursements -- 2.36%
===================================================================================================================================
Ratio of net investment (loss) to average net assets (0.35%) (0.71%)
===================================================================================================================================
Portfolio Turnover Rate 63.62% 178.23%
===================================================================================================================================
Debt outstanding at end of period $ -- $--
===================================================================================================================================
Average amount of debt outstanding during the period $ 2,005 $ 8,122
===================================================================================================================================
Average daily number of shares outstanding during the period 678,970 75,460
===================================================================================================================================
Average amount of debt per share during the period (iv) $ 0.11
===================================================================================================================================
Average Commission Rate Paid $ .0661
===================================================================================================================================
</TABLE>
(i) Unaudited.
(ii) Ratios have been annualized; total return has not been annualized.
(iii) Amount was computed based on average shares outstanding during the period.
(iv) Average amount of debt is less than $.01 per share for the period ended
June 30, 1996.
See Notes to Financial Statements.
22
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN AMERICAN
SMALL INCOME AMERICAN AMERICAN
AMERICAN CAPITALIZA- AND AMERICAN MIDCAP LEVERAGED
GROWTH TION GROWTH BALANCED GROWTH ALLCAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value
(identified cost*)--see accompany-
ing schedules of investments $767,493,915 $1,378,967,004 $15,223,916 $7,809,744 $288,573,922 $22,550,916
Receivable for investment securities
sold 763,333 13,850,489 -- 12,946 2,603,164 437,332
Receivable for shares of beneficial
interest sold 2,372,976 3,771,830 11,888 1,966 527,395 274,697
Interest and dividends receivable 438,732 164,728 13,929 29,564 86,434 8,573
Other assets 9,082 23,765 897 618 7,158 14
- ----------------------------------------------------------------------------------------------------------------------------------
Total Assets 771,078,038 1,396,777,816 15,250,630 7,854,838 291,798,073 23,271,532
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities loaned 18,470,625 87,508,407 640,968 22,777 5,853,928 151,523
Payable for investment securities
purchased 8,777,537 8,209,938 233,231 222,564 1,779,810 1,418,496
Payable for shares of beneficial
interest redeemed 1,224,290 200,971 73,328 9,305 85,368 873
Accrued investment management fees 454,292 926,164 7,230 4,459 196,066 13,979
Accrued expenses 61,352 95,958 8,353 7,678 29,529 12,274
- ----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 28,988,096 96,941,438 963,110 266,783 7,944,701 1,597,145
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $742,089,942 $1,299,836,378 $14,287,520 $7,588,055 $283,853,372 $21,674,387
==================================================================================================================================
NET ASSETS CONSIST OF:
Paid-in capital $658,640,666 $1,014,769,310 $12,324,811 $6,845,032 $242,349,042 $20,555,223
Undistributed net investment
income (accumulated loss) 1,479,592 (5,858,098) 60,643 47,681 (282,241) (30,035)
Undistributed net realized gain
(accumulated loss) 7,915,565 28,276,194 610,111 231,491 6,821,132 (117,286)
Net unrealized appreciation 74,054,119 262,648,972 1,291,955 463,851 34,965,439 1,266,485
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $742,089,942 $1,299,836,378 $14,287,520 $7,588,055 $283,853,372 $21,674,387
==================================================================================================================================
Shares of beneficial interest
outstanding--Note 6 23,010,477 30,704,711 1,924,730 858,864 13,722,082 1,125,307
==================================================================================================================================
NET ASSET VALUE PER SHARE $ 32.25 $ 42.33 $ 7.42 $ 8.83 $ 20.69 $ 19.26
==================================================================================================================================
*Identified cost $693,439,796 $1,116,318,032 $13,931,961 $7,345,893 $253,608,483 $21,284,431
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN AMERICAN
SMALL INCOME AMERICAN AMERICAN
AMERICAN CAPITALIZA- AND AMERICAN MIDCAP LEVERAGED
GROWTH TION GROWTH BALANCED GROWTH ALLCAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest $ 2,149,461 $ 3,216,848 $ 43,642 $ 78,781 $ 822,939 $ 36,319
Dividends 1,870,965 356,984 56,518 10,032 230,087 19,215
- -----------------------------------------------------------------------------------------------------------------------------------
Total Income 4,020,426 3,573,832 100,160 88,813 1,053,026 55,534
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses:
Management fees-- Note 3(a) 2,403,030 4,845,954 37,061 21,384 971,889 53,832
Custodian fees 83,451 147,925 5,528 8,203 36,339 12,694
Transfer Agent fees 1,247 1,247 1,247 1,247 1,247 1,247
Professional fees 9,988 13,655 1,704 1,473 6,309 4,022
Trustees' fees 1,995 1,995 1,995 1,995 1,995 1,995
Miscellaneous 29,464 31,674 2,889 1,336 12,707 3,714
- -----------------------------------------------------------------------------------------------------------------------------------
Total Expenses 2,529,175 5,042,450 50,424 35,638 1,030,486 77,504
- -----------------------------------------------------------------------------------------------------------------------------------
Net Investment Income
(Loss) 1,491,251 (1,468,618) 49,736 53,175 22,540 (21,970)
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments 12,677,352 55,314,044 622,540 237,993 11,008,339 137,196
Net change in unrealized appreciation
(depreciation) on investments 20,919,144 21,380,980 (72,366) (45,032) 3,356,493 862,774
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
on investments 33,596,496 76,695,024 550,174 192,961 14,364,832 999,970
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS $35,087,747 $75,226,406 $599,910 $246,136 $14,387,372 $978,000
===================================================================================================================================
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN
AMERICAN INCOME AMERICAN AMERICAN
AMERICAN SMALL AND AMERICAN MIDCAP LEVERAGED
GROWTH CAPITALIZATION GROWTH BALANCED GROWTH ALLCAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN CASH
Cash flows from operating activities:
Interest received $ 1,986,760 $ 3,209,660 $ 57,354 $ 79,493 $ 822,886 $ 33,731
Dividends received 1,808,032 306,792 84,279 10,085 191,160 15,348
Operating expenses paid (2,430,223) (4,951,774) (68,743) (42,653) (986,603) (60,581)
Maturity (purchase) of short-term
securities, net 624,100 (42,015,116) 28,600,972 8,091,528 (763,766) (2,439,668)
Purchase of portfolio securities (513,832,245) (719,806,862) (11,602,054) (4,156,278) (189,648,283) (19,789,506)
Proceeds from disposition of
portfolio securities 250,685,702 553,348,958 7,793,741 3,040,249 113,440,946 7,234,677
Other (2,927) (7,015) 5,674 1,810 (1,475) (2)
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used
in) operating activities (261,160,801) (209,915,357) 24,871,223 7,024,234 (76,945,135) (15,006,001)
- ----------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Dividends paid (19,919,783) (4,872,722) (7,887,584) (2,497,939) (5,502,860) (145,132)
Proceeds from shares sold and
dividends reinvested 418,509,664 522,150,632 13,840,895 6,559,225 164,147,325 19,787,598
Payments on shares redeemed (128,259,960) (280,491,087) (30,689,335) (11,108,297) (74,139,253) (4,599,315)
Increase (decrease) in cash collateral
received on securities loaned (9,169,120) (26,871,466) (135,199) 22,777 (7,560,077) (37,150)
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used
in) financing activities 261,160,801 209,915,357 (24,871,223) (7,024,234) 76,945,135 15,006,001
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in cash -- -- -- -- -- --
Cash--beginning of period -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Cash--end of period $ -- $ -- $ -- $ -- $ -- $ --
==================================================================================================================================
RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET CASH PROVIDED BY (USED
IN) OPERATING ACTIVITIES:
Net increase in net assets
resulting from operations $ 35,087,747 $ 75,226,406 $ 599,910 $ 246,136 $ 14,387,372 $ 978,000
(Increase) decrease in investments (227,206,783) (187,077,870) 24,559,428 5,593,207 (74,197,536) (15,089,355)
(Increase) decrease in receivable for
investments sold (763,333) (11,331,102) -- 1,159,728 (2,603,164) (437,332)
(Increase) decrease in interest and
dividends receivable (225,634) (57,380) 41,473 765 (38,980) (6,455)
Increase (decrease) in payable
for investments purchased (34,552,327) (10,064,048) 233,231 222,564 (170,403) 532,190
Net realized gain (12,677,352) (55,314,044) (622,540) (237,993) (11,008,339) (137,196)
Net (increase) decrease in unrealized
appreciation (20,919,144) (21,380,980) 72,366 45,032 (3,356,493) (862,774)
Increase (decrease) in accrued expenses 98,952 90,676 (18,319) (7,015) 43,883 8,374
Net (increase) decrease in other assets (2,927) (7,015) 5,674 1,810 (1,475) 8,547
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used
in) operating activities $(261,160,801) $(209,915,357) $ 24,871,223 $7,024,234 $ (76,945,135) $(15,006,001)
==================================================================================================================================
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN
AMERICAN INCOME AMERICAN AMERICAN
AMERICAN SMALL AND AMERICAN MIDCAP LEVERAGED
GROWTH CAPITALIZATION GROWTH BALANCED GROWTH ALLCAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) $ 1,491,251 $ (1,468,618) $ 49,736 $ 53,175 $ 22,540 $ (21,970)
Net realized gain on investments 12,677,352 55,314,044 622,540 237,993 11,008,339 137,196
Net change in unrealized appreciation
(depreciation) on investments 20,919,144 21,380,980 (72,366) (45,032) 3,356,493 862,774
- --------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 35,087,747 75,226,406 599,910 246,136 14,387,372 978,000
Dividends to shareholders:
Net investment income (460,331) -- (229,100) (324,679) -- --
Net realized gains (19,459,452) (4,872,722) (7,658,484) (2,173,260) (5,502,860) (145,132)
Net increase from
shares of beneficial
interest transactions-- Note 6 223,948,439 245,270,546 12,935,735 6,168,689 89,620,097 15,344,433
- --------------------------------------------------------------------------------------------------------------------------------
Total increase 239,116,403 315,624,230 5,648,061 3,916,886 98,504,609 16,177,301
Net Assets
Beginning of period 502,973,539 984,212,148 8,639,459 3,671,169 185,348,763 5,497,086
- --------------------------------------------------------------------------------------------------------------------------------
End of period $742,089,942 $1,299,836,378 $14,287,520 $7,588,055 $283,853,372 $21,674,387
================================================================================================================================
Undistributed net investment income
(accumulated loss) $ 1,479,592 $ (5,858,098) $ 60,643 $ 47,681 $ (282,241) $ (30,035)
================================================================================================================================
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN
AMERICAN INCOME AMERICAN AMERICAN
AMERICAN SMALL AND AMERICAN MIDCAP LEVERAGED
GROWTH CAPITALIZATION GROWTH BALANCED GROWTH ALLCAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO(*)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) $ 447,177 $ (3,177,269) $ 229,201 $ 320,176 $ (275,972) $ (8,065)
Net realized gain (loss) on investments 15,710,698 (5,203,810) 10,080,314 2,423,578 3,625,757 (109,350)
Net change in unrealized appreciation
on investments 42,409,681 195,831,810 678,273 354,713 26,654,319 403,711
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 58,567,556 187,450,731 10,987,788 3,098,467 30,004,104 286,296
Dividends to shareholders:
Net investment income (480,697) -- (352,788) (217,622) (10,668) --
Net realized gains (1,703,042) -- -- -- -- --
Net increase (decrease) from
shares of beneficial interest
transactions-- Note 6 296,199,246 399,724,319 (31,130,440) (9,604,163) 93,177,691 5,210,790
- ----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) 352,583,063 587,175,050 (20,495,440) (6,723,318) 123,171,127 5,497,086
Net Assets
Beginning of year 150,390,476 397,037,098 29,134,899 10,394,487 62,177,636 --
- ----------------------------------------------------------------------------------------------------------------------------------
End of year $502,973,539 $984,212,148 $ 8,639,459 $ 3,671,169 $185,348,763 $5,497,086
==================================================================================================================================
Undistributed net investment income
(accumulated loss) $ 448,672 $ (4,389,480) $ 240,007 $ 319,185 $ (304,781) $ (8,065)
==================================================================================================================================
(*) Commenced operations January 25, 1995.
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
THE ALGER AMERICAN FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
NOTE 1--GENERAL:
The Alger American Fund (the "Fund") is a diversified, open-end registered
investment company organized as an unincorporated business trust under the laws
of the Commonwealth of Massachusetts. The Fund operates as a series company
currently issuing six classes of shares of beneficial interest: American Growth
Portfolio, American Small Capitalization Portfolio, American Income and Growth
Portfolio, American Balanced Portfolio, American MidCap Growth Portfolio and
American Leveraged AllCap Portfolio (collectively "the Portfolios"). Shares of
the Portfolios are available and are being marketed exclusively as a pooled
funding vehicle for qualified retirement plans and for life insurance companies
writing all types of variable annuity contracts and variable life insurance
policies.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:
(a) INVESTMENT VALUATION: Investments of the Portfolios are valued at 4:00 p.m.
Eastern time on each day the New York Stock Exchange is open. 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 the 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
according to procedures established by the Board of Trustees to determine fair
value in good faith.
Securities having a remaining maturity of sixty days or less are valued at
amortized cost which approximates market value.
(b) SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
recorded on a trade date basis. Resulting receivables and payables are carried
at amounts which approximate fair value. Realized gains and losses from security
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, primarily U.S. Government securities dealers, and are
collateralized by U.S. Government securities. Such collateral is verified by the
investment manager as being either received and held in physical possession by
the custodian or as having been received by such custodian in book-entry form
through the Federal Reserve book-entry system. The investment manager monitors
the value of the collateral at the time the repurchase agreement is entered into
and 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, including an affiliate of the custodian, provided that
the market value of securities loaned will not at any time exceed one-third of
the Portfolio's total assets. 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 investment manager ensures that the loan is collateralized
by cash, letters of credit or U.S. Government securities that are maintained at
all times in an amount equal to at least 100 percent of the current market value
of the loaned securities. At June 30, 1996, the value of securities loaned and
cash collateral received thereon were as follows:
VALUE OF CASH
SECURITIES COLLATERAL
LOANED RECEIVED
--------- ---------
American Growth Portfolio...... $18,333,063 $18,470,625
American Small Capitalization
Portfolio.................... 86,997,743 87,508,407
American Income and Growth
Portfolio.................... 635,182 640,968
American Balanced Portfolio.... 22,775 22,777
American MidCap Growth
Portfolio.................... 5,882,803 5,853,928
American Leveraged AllCap
Portfolio.................... 151,523 151,523
The Portfolios invest the cash collateral and rebate a portion of the interest
earned to the borrower of the securities. During the six months ended June 30,
1996, the American Growth Portfolio, the American Small Capitalization
Portfolio, the American Income and Growth Portfolio, the American Balanced
Portfolio, the American MidCap Growth Portfolio and the American Leveraged
AllCap Portfolio received $64,806, $177,062, $1,601, $468, $29,278, and $1,007,
respectively, of stock loan fees, net of rebates paid. Such net fees are
included in interest income in the accompanying Statements of Operations.
(e) DIVIDENDS TO SHAREHOLDERS: Dividends payable to shareholders are recorded by
the Fund on the ex-dividend date.
Dividends from net investment income are declared and paid annually.
Dividends from net realized gains, offset by any loss carry forward, are
declared and paid annually after the end of the fiscal year in which earned.
(f) FEDERAL INCOME TAXES: It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
28
<PAGE>
THE ALGER AMERICAN FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONT'D)
JUNE 30, 1996
- --------------------------------------------------------------------------------
investment companies and to distribute all of the taxable income of each
portfolio to its respective shareholders. Therefore, no federal income tax
provision is required. Each portfolio is treated as a separate entity for the
purpose of determining such compliance.
(g) EXPENSES: 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.
(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 the Investment Management Agreements (the "Agreements") with Fred
Alger Management, Inc. ("Alger Management"), are payable monthly and computed
based on the average daily net assets of each Portfolio at the following annual
rates:
American Growth Portfolio............................ .750%
American Small Capitalization Portfolio.............. .850
American Income and Growth Portfolio................. .625
American Balanced Portfolio.......................... .750
American MidCap Growth Portfolio..................... .800
American Leveraged AllCap Portfolio.................. .850
The Agreements further provide that if in any fiscal year the aggregate
expenses, excluding interest, taxes, brokerage commissions, and extraordinary
expenses, of the American Growth Portfolio exceed 1.50%; the American Small
Capitalization Portfolio exceed 1.50%; the American Income and Growth Portfolio
exceed 1.25%; the American Balanced Portfolio exceed 1.25%; the American MidCap
Growth Portfolio exceed 1.50% and the American Leveraged AllCap Portfolio exceed
1.50% of the average daily net assets of the applicable Portfolio, Alger
Management will reimburse that Portfolio for the excess expenses. (b) BROKERAGE
COMMISSIONS: During the six months ended June 30, 1996, the American Growth
Portfolio, American Small Capitalization Portfolio, American Income and Growth
Portfolio, American Balanced Portfolio, American MidCap Growth Portfolio and the
American Leveraged AllCap Portfolio paid Fred Alger & Company, Incorporated
("Alger Inc.") $617,397, $748,400, $22,836, $4,686, $221,469 and $15,308,
respectively, in connection with securities transactions.
(c) TRANSFER AGENCY FEES: The Fund has entered into a transfer agency agreement
with Alger Shareholder Services, Inc. ("Services"), whereby Services will act as
transfer agent for the Fund for a fee of $2,500 per year, per Portfolio, plus
out-of-pocket expenses.
(d) OTHER TRANSACTIONS WITH AFFILIATES: Certain trustees and officers of the
Fund are directors and officers of Alger Management, Alger Inc. and Services. At
June 30, 1996, Alger Inc. and affiliates owned 36,376 shares, 21,905 shares,
2,836 shares, 2,381 shares, 1 share, and 24,715 shares of the American Growth
Portfolio, American Small Capitalization Portfolio, American Income and Growth
Portfolio, American Balanced Portfolio, American MidCap Growth Portfolio and
American Leveraged AllCap Portfolio, respectively.
NOTE 4--SECURITIES TRANSACTIONS:
Purchases and sales of securities, other than short-term securities, for the six
months ended June 30, 1996, were as follows:
PURCHASES SALES
--------- -----
American Growth Portfolio...... $479,279,918 $251,449,035
American Small Capitalization
Portfolio.................... 709,742,814 564,680,060
American Income and Growth
Portfolio.................... 11,835,285 7,793,741
American Balanced Portfolio.... 4,378,842 1,880,521
American MidCap Growth
Portfolio.................... 189,477,880 116,044,110
American Leveraged AllCap
Portfolio.................... 20,321,696 7,672,009
NOTE 5--SHORT-TERM BORROWINGS:
The American Leveraged AllCap Portfolio has a line of credit with a bank whereby
it may borrow up to one-third of its assets, as defined, up to a maximum of
$25,000,000. Such borrowings have a variable interest rate and are payable on
demand.
NOTE 6--SHARE CAPITAL:
The Fund has an unlimited number of authorized shares of beneficial interest of
$.001 par value.
29
<PAGE>
THE ALGER AMERICAN FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONT'D)
JUNE 30, 1996
- --------------------------------------------------------------------------------
During the six months ended june 30, 1996, transactions of shares of beneficial
interest were as follows:
SHARES AMOUNT
------ -------
American Growth
Portfolio:
Shares sold................ 10,278,651 $333,499,191
Dividends reinvested....... 603,264 19,919,783
--------- -----------
10,881,915 353,418,974
Shares redeemed............ (4,015,019) (129,470,535)
--------- -----------
Net increase............. 6,866,896 $223,948,439
========= ===========
SHARES AMOUNT
------ -------
American Small Capitalization
Portfolio:
Shares sold................ 12,363,615 $518,571,479
Dividends reinvested....... 107,827 4,872,722
--------- -----------
12,471,442 523,444,201
Shares redeemed............ (6,743,188) (278,173,655)
--------- -----------
Net increase............. 5,728,254 $245,270,546
========= ===========
SHARES AMOUNT
------ -------
American Income and Growth
Portfolio:
Shares sold................ 448,763 $ 5,955,399
Dividends reinvested....... 1,064,413 7,887,584
--------- -----------
1,513,176 13,842,983
Shares redeemed............ (74,185) (907,248)
--------- -----------
Net increase............. 1,438,991 $ 12,935,735
========= ===========
SHARES AMOUNT
------ -------
American Balanced
Portfolio:
Shares sold................ 343,733 $ 4,046,822
Dividends reinvested....... 278,167 2,497,939
--------- -----------
621,900 6,544,761
Shares redeemed............ (32,228) (376,072)
--------- -----------
Net increase............. 589,672 $ 6,168,689
========= ===========
SHARES AMOUNT
------ -------
American MidCap Growth
Portfolio:
Shares sold................ 7,546,220 $158,341,786
Dividends reinvested....... 252,773 5,502,860
--------- -----------
7,798,993 163,844,646
Shares redeemed............ (3,610,106) (74,224,549)
--------- -----------
Net increase............. 4,188,887 $ 89,620,097
========= ===========
SHARES AMOUNT
------ -------
American Leveraged AllCap
Portfolio:
Shares sold................ 1,048,904 $ 19,798,543
Dividends reinvested....... 7,221 145,132
--------- -----------
1,056,125 19,943,675
Shares redeemed............ (246,200) (4,599,242)
--------- -----------
Net increase............. 809,925 $ 15,344,433
========= ===========
During the year ended December 31, 1995, transactions of shares of beneficial
interest were as follows:
SHARES AMOUNT
------ -------
American Growth
Portfolio:
Shares sold................ 13,397,031 $401,141,672
Dividends reinvested....... 84,119 2,183,739
--------- -----------
13,481,150 403,325,411
Shares redeemed............ (3,839,223) (107,126,165)
--------- -----------
Net increase............. 9,641,927 $296,199,246
========= ===========
SHARES AMOUNT
------ -------
American Small Capitalization
Portfolio:
Shares sold................ 18,702,535 $ 691,048,373
Shares redeemed............ (8,263,881) (291,324,054)
--------- -----------
Net increase............. 10,438,654 $ 399,724,319
========= ===========
SHARES AMOUNT
------ -------
American Income and Growth
Portfolio:
Shares sold................ 887,706 $ 14,574,940
Dividends reinvested....... 23,363 352,788
--------- -----------
911,069 14,927,728
Shares redeemed............ (2,616,215) (46,058,168)
--------- -----------
Net decrease............. (1,705,146) $ (31,130,440)
========= ===========
SHARES AMOUNT
------ -------
American Balanced
Portfolio:
Shares sold................ 392,582 $ 4,925,776
Dividends reinvested....... 18,568 217,622
--------- -----------
411,150 5,143,398
Shares redeemed............ (1,104,001) (14,747,561)
--------- -----------
Net decrease............. (692,851) $ (9,604,163)
========= ===========
SHARES AMOUNT
------ -------
American MidCap Growth
Portfolio:
Shares sold................ 8,606,684 $ 160,082,716
Dividends reinvested....... 706 10,668
--------- -----------
8,607,390 160,093,384
Shares redeemed............ (3,694,620) (66,915,693)
--------- -----------
Net increase............. 4,912,770 $ 93,177,691
========= ===========
SHARES AMOUNT
------ -------
American Leveraged AllCap
Portfolio:
Shares sold................ 405,310 $ 6,744,547
Shares redeemed............ (89,928) (1,533,757)
--------- -----------
Net increase............. 315,382 $ 5,210,790
========= ===========
30
