THE
ALGER
AMERICAN
FUND
---------------------
MEETING THE CHALLENGE
OF INVESTING
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
REPORT
-------------
JUNE 30, 1997
(UNAUDITED)
<PAGE>
FELLOW SHAREHOLDERS:
JULY 30, 1997
A YEAR-TO-DATE REVIEW
Thus far 1997 has been a challenging year for growth stock managers. While
some of the trends which had penalized growth stocks in 1996 continued into the
first few months of 1997, the good news is that these trends now appear to be
reversing in favor of the growth style.
Despite a strong January, the first quarter was difficult for growth
managers as investors continued to favor blue-chip type stocks with predictable
earnings and to shy away from traditional growth stocks with more explosive
earnings growth potential. This trend, which began in the second quarter of
1996, was in response to the overriding concern of investors that the economy
was growing too quickly and that this would touch off a series of preemptive
strikes on inflation by the Fed. During the first few months of 1997 concerns
about rates heightened because monthly economic indicators showed that the
economy was growing very rapidly. The preliminary estimate for the Gross
Domestic Product (GDP) released on April 30 confirmed the strength in the
economy, with the growth rate soaring to 5.9%. This represented a rate of growth
which was much higher than anyone expected, thereby fueling fears of an
overheating economy. These concerns caused the market to behave erratically,
particularly in the growth stock discipline. The effect was even more pronounced
in the small cap sector as evidenced by the Russell 2000 Growth Index (the
benchmark index for our Small Cap Portfolio) which was down 10.5% in the first
quarter versus gains in excess of 2.5% for both the Dow Jones Industrial Average
and the S&P 500 Index.
I have maintained, however, that part of the strength in the economy,
especially in January and February, related to the unusually pleasant weather in
the Northeast. This had the effect of encouraging real estate activity and
retail sales, which were further overstated by the seasonal adjustment factors.
My reasoning was that if this were true, we would start to see a visible
deceleration in economic activity in April and May. This has been borne out by
the most recent data and now two things seem to be clear. First, the economy has
slowed. More interesting and perhaps more relevant, there is clearly no
inflation. The Consumer Price Index (CPI), has continued to decelerate in 1997,
with the year-over-year rate of change dropping to 2.2% in May from 3.3% at the
end of 1996. The core rate of CPI inflation, which excludes the more volatile
food and energy prices, rose a mere 2.4% for the first half of 1997, the
smallest increase during the first six-months in any given year since 1965. The
drop in the Producer Price Index (PPI) continues to be startling. In fact, the
PPI has dropped each month so far in 1997, the first consecutive six-month
decline since 1952. Clearly, this is a major deflationary component and while
producer prices have only a moderate influence on consumer prices, they
nevertheless represent a part of our economy which suggests that inflation is in
effect, dead.
Additionally, wage gains, as measured by the index of average hourly
earnings, appear to have moderated over the past three months despite the strong
gains in employment and low rate of unemployment. Acute labor shortages
resulting in higher wages still appear to be confined to certain industries or
regions of the country. Even those companies or industries paying higher wages
to attract new employees cannot pass those added costs on to end users because
of stiff competition from domestic and foreign rivals. The recent appreciation
in the dollar in foreign exchange markets has served to make the competition
even more intense for many manufacturers.
As we began the second quarter, the P/E multiples of quality growth stocks
had compressed to the point where these stocks were selling at a discount to the
broader market. In reviewing the outlook for the growth stocks in our universe
of followed companies, we concluded that the drop in growth stock multiples did
not reflect deteriorating company fundamentals, but instead negative investor
psychology. Market psychology started to improve once economic indicators showed
that the economy was in fact slowing and that inflation was not an imminent
problem. As confidence in a benign economic outlook strengthened, investors
began to focus on growth stocks after having shunned them for almost ten months.
During the quarter, investors' willingness to pay a premium for superior
earnings growth potential increased, leading to a significant rebound in growth
stocks, particularly during the last month of the quarter. This change in
investor psychology resulted in a strong ending to the first half of the year
for all of the Portfolios.
LOOKING AHEAD
We believe that the market should continue to advance as investors focus on the
positive outlook for continued growth in corporate earnings in 1998. Since
prospects for moderate economic growth and modest inflation remain highly
favorable, investor confidence should remain high. Investors, in our view, will
continue to be attracted to the ability of quality growth stocks to produce
strong earnings gains. Since quality growth stocks have typically traded at 1.5
to 2 times the market multiple, we believe that there is considerable room for
further multiple expansion in the months ahead. We are encouraged by this
reversal of negative investor psychology toward growth stocks and excited by the
fact that there is still a long way to go until these explosive stocks are
fairly valued relative to the broad market.
Respectfully submitted,
/s/ David D. Alger
------------------
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 .......................................... 6-9
Financial Highlights ............................................. 10
Alger American Income and Growth Portfolio:
Schedule of Investments .......................................... 11-12
Financial Highlights ............................................. 13
Alger American Balanced Portfolio:
Schedule of Investments .......................................... 14-16
Financial Highlights ............................................. 17
Alger American MidCap Growth Portfolio:
Schedule of Investments .......................................... 18-19
Financial Highlights ............................................. 20
Alger American Leveraged AllCap Portfolio:
Schedule of Investments .......................................... 21-22
Financial Highlights ............................................. 23
Statements of Assets and Liabilities ................................... 24
Statements of Operations ............................................... 25
Statement of Cash Flows (Alger American
Leveraged AllCap Portfolio) ............................................ 26
Statements of Changes in Net Assets .................................... 27-28
Notes to Financial Statements .......................................... 29-31
2
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS--93.9% VALUE
------ -----
AEROSPACE--6.9%
201,100 Allied Signal Inc. ................................. $16,892,400
442,300 Boeing Company (The)+ .............................. 23,469,765
263,500 Gulfstream Aerospace Corp.* ........................ 7,773,250
197,700 Sundstrand Corp.+ .................................. 10,675,800
276,900 United Technologies Corp. .......................... 22,982,700
-----------
81,793,915
-----------
AGRICULTURE--1.0%
158,900 IMC Global Inc. .................................... 5,561,500
81,700 Pioneer Hi-Bred International Inc. ................. 6,536,000
-----------
12,097,500
-----------
APPAREL--.5%
139,400 Tommy Hilfiger Corporation*+ ....................... 5,602,207
-----------
APPLIANCES & TOOLS--1.7%
529,200 Sunbeam Corp. ...................................... 19,977,300
-----------
BIO-TECHNOLOGY--.2%
102,800 BioChem Pharma Inc.*+ .............................. 2,287,300
-----------
CHEMICALS--2.1%
313,200 Du Pont E.I. De Nemours & Co. ...................... 19,692,450
128,600 Monsanto Co. ....................................... 5,537,902
-----------
25,230,352
-----------
COMMUNICATIONS--1.7%
641,600 WorldCom Inc.* ..................................... 20,531,200
-----------
COMMUNICATIONS EQUIPMENT--4.8%
407,500 Cisco Systems, Inc.* ............................... 27,353,438
105,700 (LM) Ericsson Telephone Co., ADR Cl. B ............. 4,161,938
171,000 Motorola, Inc. ..................................... 12,996,000
230,400 Tellabs, Inc.* ..................................... 12,873,600
-----------
57,384,976
-----------
COMPUTER RELATED &
BUSINESS EQUIPMENT--3.1%
260,600 Bay Networks Inc.* ................................. 6,922,318
219,400 Hewlett-Packard Company+ ........................... 12,286,400
196,800 International Business Machines Corp. .............. 17,748,998
-----------
36,957,716
-----------
COMPUTER SOFTWARE--5.2%
20,000 Electronics For Imaging Inc.* ...................... 945,000
177,300 Microsoft Corporation* ............................. 22,406,288
430,600 Oracle Corp.* ...................................... 21,691,475
396,800 Parametric Technology Corporation* ................. 16,888,998
-----------
61,931,761
-----------
CONGLOMERATE--4.9%
510,000 General Electric Co. ............................... 33,341,250
356,200 Tyco International Ltd.+ ........................... 24,778,341
-----------
58,119,591
-----------
CONSUMER PRODUCTS--8.2%
188,000 ADT Ltd.* .......................................... 6,204,000
709,000 CUC International Inc.* ............................ 18,301,417
307,600 Colgate Palmolive Co. .............................. 20,070,900
218,300 Corning Inc. ....................................... 12,142,938
393,600 Gillette Co. ....................................... 37,293,600
78,400 Newell Co. ......................................... 3,106,600
-----------
97,119,455
-----------
ENERGY & ENERGY SERVICES--2.7%
123,000 Diamond Offshore Drilling Inc.*+ ................... 9,609,375
50,000 Santa Fe International Corp* ....................... 1,700,000
163,000 Schlumberger Ltd. .................................. 20,375,000
-----------
31,684,375
-----------
FINANCIAL SERVICES--10.8%
128,249 Banc One Corp. ..................................... 6,212,061
294,900 Citicorp ........................................... 35,554,029
261,426 First Data Corporation+ ............................ 11,486,536
27,400 Household International Inc. ....................... 3,217,801
340,300 Money Store Inc.(The)+ ............................. 9,762,526
854,205 Morgan Stanley, Dean Witter, Discover Co. .......... 36,784,630
287,900 Paine Webber Group Inc. ............................ 10,076,500
368,100 Schwab (Charles) Corporation (The)+ ................ 14,977,253
-----------
128,071,336
-----------
FOODS & BEVERAGES--.6%
192,800 PepsiCo, Inc. ...................................... 7,242,146
-----------
HEALTH CARE--.7%
114,400 McKesson Corp. ..................................... 8,866,000
-----------
HEALTH MAINTENANCE
ORGANIZATION--.1%
17,900 Oxford Health Plans, Inc.*+ ........................ 1,284,325
-----------
INSURANCE--3.1%
199,700 American International Group Inc. .................. 29,830,188
148,400 MGIC Investment Corp.+ ............................. 7,113,999
-----------
36,944,187
-----------
LEISURE & ENTERTAINMENT--2.9%
437,200 Carnival Corporation Cl. A ......................... 18,034,500
756,500 International Game Technology ...................... 13,427,875
119,300 Mirage Resorts, Incorporated* ...................... 3,012,325
-----------
34,474,700
-----------
3
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED) (CONT'D)
================================================================================
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
MANUFACTURING--1.1%
559,500 Westinghouse Electric Corp. ........................ $12,938,438
-----------
MEDICAL DEVICES--.6%
142,500 Becton Dickinson & Co. ............................. 7,214,063
-----------
OIL & GAS--1.9%
49,800 EVI Inc.*+ ......................................... 2,091,600
275,300 Global Marine Inc.*+ ............................... 6,400,725
181,500 Halliburton Co. .................................... 14,383,875
-----------
22,876,200
-----------
PHARMACEUTICALS--10.3%
161,600 Bristol Myers Squibb Co.+ .......................... 13,089,600
333,500 Eli Lilly & Company ................................ 36,455,886
353,000 Merck & Co., Inc. .................................. 36,535,500
100,100 Pfizer Inc. ........................................ 11,961,950
124,600 Schering-Plough Corporation ........................ 5,965,225
150,900 Warner-Lambert Co. ................................. 18,749,325
-----------
122,757,486
-----------
POLLUTION CONTROL--1.0%
299,500 USA Waste Services, Inc.* .......................... 11,568,188
-----------
RETAILING--7.0%
310,100 Gucci Group N.V .................................... 19,962,688
517,300 Home Depot, Inc. ................................... 35,661,627
57,000 Rite Aid Corp. ..................................... 2,842,875
745,300 Wal-Mart Stores Inc. ............................... 25,200,829
-----------
83,668,019
-----------
SEMICONDUCTORS--8.8%
125,000 Adaptec, Inc.* ..................................... 4,343,750
302,600 Altera Corporation* ................................ 15,281,300
76,600 Intel Corp. ........................................ 10,862,876
411,200 Linear Technology Corporation ...................... 21,279,600
182,500 Maxim Integrated Products, Inc.* ................... 10,379,687
322,200 Texas Instruments, Incorporated+ ................... 27,085,099
310,400 Xilinx, Inc.*+ ..................................... 15,229,155
-----------
104,461,467
-----------
SEMICONDUCTORS CAPITAL EQUIPMENT--1.0%
169,700 Applied Materials Inc.* .......................... 12,016,965
-----------
TRANSPORTATION--.6%
82,300 AMR Corp.*+ ...................................... 7,612,750
-----------
MISCELLANEOUS--.4%
146,500 Service Corp. International ...................... 4,816,188
-----------
TOTAL COMMON STOCKS
(COST $896,879,535) ........................... 1,117,530,106
-------------
PREFERRED STOCK--1.7%
COMMUNICATIONS
272,000 Nokia Corporation, ADR+
(COST $14,738,099) ............................ 20,060,000
-----------
PRINCIPAL SHORT-TERM INVESTMENTS--9.5%
AMOUNT SHORT-TERM CORPORATE NOTES--5.8%
------
$ 8,400,000 Export Development Corp.,
5.45%, 7/3/97 ................................. 8,397,457
13,751,000 HMO Funding Corp.,
5.62%, 7/8/97 ................................. 13,735,973
6,249,000 Oglethorpe Power Corporation,
5.67%, 7/8/97 ................................. 6,242,110
30,800,000 Philip Morris Cos., Inc.,
5.50%, 7/2/97 ................................. 30,795,294
5,000,000 Progress Funding Corp.,
5.72%, 7/3/97 (a) ............................. 4,998,412
5,000,000 United Air Lines First Funding Corp.,
5.80%, 7/10/97 ................................ 4,992,750
-----------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $69,161,996) ............................ 69,161,996
-----------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--3.7%
Securities Held Under Repurchase
Agreements, 5.85%-6.375%, 7/1/97,
with Bear, Stearns & Co. Inc., dtd 6/30/97,
repurchase price $44,068,087;
collateralized by U.S. Treasury
Strips (par value $150,287,000 due
5/15/01-11/15/18) ............................. 44,060,383
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $113,222,379) ........................... 113,222,379
-----------
TOTAL INVESTMENTS
(COST $1,024,840,013) (B) ......................... 105.1% 1,250,812,485
Liabilities in Excess of Other Assets ................ (5.1) (60,787,152)
----- --------------
NET ASSETS ........................................... 100.0% $1,190,025,333
===== ==============
* Non-income producing security.
+ Securities partially or fully on loan.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity only to qualified institutional buyers.
(b) At June 30, 1997, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $1,024,840,013, amounted to
$225,972,472 which consisted of aggregate gross unrealized appreciation of
$229,642,484 and aggregate gross unrealized depreciation of $3,670,012.
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, 1997(I) 1996 1995 1994 1993 1992
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 34.33 $ 31.16 $ 23.13 $ 24.67 $ 20.17 $ 18.00
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.05 0.12 0.02 0.07 0.03 0.03
Net realized and unrealized gain on investments 5.51 4.00 8.33 0.15 4.50 2.19
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 5.56 4.12 8.35 0.22 4.53 2.22
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.13) (0.02) (0.07) (0.03) (0.03) (0.03)
Distributions from net realized gains (0.23) (0.93) (0.25) (1.73) -- (0.02)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.36) (0.95) (0.32) (1.76) (0.03) (0.05)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 39.53 $ 34.33 $ 31.16 $ 23.13 $ 24.67 $ 20.17
==================================================================================================================================
Total Return 16.25% 13.35% 36.37% 1.45% 22.47% 12.38%
==================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $1,190,025 $991,028 $502,974 $150,390 $74,878 $30,316
==================================================================================================================================
Ratio of expenses to average net assets 0.78% 0.79% 0.85% 0.86% 0.97% 0.99%
==================================================================================================================================
Ratio of net investment income to average
net assets 0.30% 0.50% 0.18% 0.48% 0.25% 0.33%
==================================================================================================================================
Portfolio Turnover Rate 60.87% 82.86% 118.33% 111.76% 112.64% 63.91%
==================================================================================================================================
Average Commission Rate Paid $ .0679 $ .0683
=================================================================================
</TABLE>
(i) Unaudited. Ratios have been annualized; total return has not been
annualized.
See Notes to Financial Statements.
5
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS--96.6% VALUE
------ -----
AEROSPACE--1.9%
241,300 Aviall Inc.* ...................................... $ 3,378,200
260,000 BE Aerospace Inc.* ................................ 8,222,500
200,300 Coltec Industries Inc.* ........................... 3,905,850
468,700 Wyman Gordon Co*+ ................................. 12,654,900
--------------
28,161,450
--------------
ALUMINUM--.3%
390,600 Kaiser Aluminum Corp.* ............................ 4,784,850
--------------
APPAREL--7.7%
132,300 Brylane Inc.* ..................................... 5,101,885
257,000 Gymboree Corp* .................................... 6,168,000
387,600 Jones Apparel Group Inc.* ......................... 18,507,900
265,400 Kellwood Co. ...................................... 7,364,850
248,500 Mens Wearhouse Inc.* .............................. 7,827,750
546,300 Nautica Enterprises Inc.* ......................... 14,443,079
320,300 St. John Knits Inc. ............................... 17,296,200
495,400 Tommy Hilfiger Corporation* ....................... 19,909,135
472,600 Warnaco Group Inc. Cl. A .......................... 15,064,125
--------------
111,682,924
--------------
APPLIANCES & TOOLS--1.0%
380,400 Sunbeam Corp. ..................................... 14,360,100
--------------
AUTOMOTIVE--.2%
201,100 Navistar International Corp.* ..................... 3,468,975
--------------
BIO-TECHNOLOGY--2.9%
387,900 BioChem Pharma Inc.* .............................. 8,630,775
317,500 Chiron Corp.* ..................................... 6,627,813
152,300 DEKALB Genetics Corp. Cl. B ....................... 12,145,925
208,600 INCYTE Pharmaceuticals, Inc.* ..................... 13,976,200
--------------
41,380,713
--------------
BUILDING & CONSTRUCTION--.7%
80,000 Hirsh International Corp. Cl. A* .................. 1,780,000
556,500 Morrison Knudsen Corp.* ........................... 7,582,313
--------------
9,362,313
--------------
BUSINESS SERVICES--1.5%
185,000 G & K Services Inc. Cl. A ......................... 6,891,250
53,300 Harte Hanks Communications, Inc. .................. 1,572,350
247,100 Saville Systems PLC ADR* .......................... 12,849,200
--------------
21,312,800
--------------
CHEMICALS--.1%
70,000 ChemFirst Inc. .................................... 1,898,750
--------------
COMMUNICATIONS--.7%
159,000 Jacor Communications Inc.* ........................ 6,081,750
215,000 Sitel Corp.* ...................................... 4,434,375
--------------
10,516,125
--------------
COMMUNICATIONS EQUIPMENT--4.1%
260,100 Advanced Fibre Communications Inc.* ............... 15,703,538
183,200 Essex International Inc.* ......................... 5,106,700
85,500 Powerwave Technologies, Inc.* ..................... 1,923,750
654,000 Tellabs, Inc.* .................................... 36,542,250
--------------
59,276,238
--------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--.9%
363,100 Auspex Systems Inc.* .............................. 3,494,838
330,600 Bay Networks Inc.* ................................ 8,781,728
--------------
12,276,566
--------------
COMPUTER SERVICES--5.0%
156,500 CKS Group Inc.* ................................... 5,281,875
175,500 Cambridge Technology Partners Inc.* ............... 5,616,000
135,400 Keane Inc.* ....................................... 7,040,800
188,400 Logicon Inc. ...................................... 9,985,200
391,000 Quick Response Service Inc.* ...................... 14,173,750
248,900 Sterling Commerce, Inc.* .......................... 8,182,588
90,000 Stratus Computer Inc.* ............................ 4,500,000
227,200 Sungard Data Systems* ............................. 10,564,800
134,000 Technology Solutions Co.* ......................... 5,293,000
68,600 Whittman-Hart, Inc.* .............................. 1,929,375
--------------
72,567,388
--------------
COMPUTER SOFTWARE--8.1%
356,000 CBT Group PLC ADS* ................................ 22,472,500
724,000 Electronics For Imaging Inc.* ..................... 34,209,000
463,000 Oracle Corp.* ..................................... 23,323,625
410,300 Parametric Technology Corporation* ................ 17,463,599
779,300 Structural Dynamics Research Corp.* ............... 20,456,625
--------------
117,925,349
--------------
COMPUTER TECHNOLOGY--.8%
99,300 Citrix Systems, Inc.* ............................. 4,356,788
228,000 Digital Microwave Corp.* .......................... 6,840,000
--------------
11,196,788
--------------
CONSUMER PRODUCTS--2.6%
130,000 Acorn Products Inc.* .............................. 1,820,000
343,100 Coleman Co. Inc.* ................................. 5,918,475
145,000 Fortune Brands Inc. ............................... 5,410,385
183,000 Fred Meyer, Inc.* ................................. 9,458,904
114,650 Pittway Corp. Cl. A ............................... 5,703,838
97,000 Samsonite Corp.* .................................. 4,280,125
203,500 Helen of Troy Ltd.* ............................... 5,214,688
--------------
37,806,415
--------------
DEFENSE--.3%
175,000 Tracor, Inc.* ..................................... 4,396,875
--------------
6
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED) (CONT'D)
================================================================================
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
ELECTRONICS--.1%
30,000 Avid Thermal Technologies Inc.* ................... $ 618,750
50,000 Zytec Corp.* ...................................... 937,500
--------------
1,556,250
--------------
ENERGY & ENERGY SERVICES--2.5%
198,500 Camco International Inc. .......................... 10,867,875
194,500 Diamond Offshore Drilling Inc.* ................... 15,195,313
156,600 Hvide Marine Inc. Cl. A* .......................... 3,464,775
130,000 Noble Drilling Corp.* ............................. 2,933,190
64,600 Smith International Inc.* ......................... 3,924,450
--------------
36,385,603
--------------
FINANCIAL SERVICES--5.7%
34,200 Associated Banc--Corp ............................. 1,350,900
57,700 CCB Financial Corp. ............................... 4,219,313
52,300 CMAC Investment Corp. ............................. 2,497,325
384,900 CWM Mortgage Holdings Inc. ........................ 9,213,736
74,200 Colonial BancGroup Inc. ........................... 1,799,350
84,900 Commerce Bancshares Inc. .......................... 3,841,725
157,500 Compass Bancshares Inc. ........................... 5,295,938
557,000 E*TRADE Group, Inc.* .............................. 10,931,125
38,100 Mercantile Bankshares Corp. ....................... 1,524,000
805,700 Money Store Inc.(The) ............................. 23,113,922
220,000 National Commerce Bancorp ......................... 4,840,000
100,485 Provident Bankshares Corp. ........................ 4,182,688
5,000 Provident Financial Group Inc. .................... 213,750
160,000 Signet Banking Corp. .............................. 5,760,000
90,000 Wilmington Trust Corp. ............................ 4,117,500
--------------
82,901,272
--------------
FOODS & BEVERAGES--2.3%
659,900 Chiquita Brands International Inc. ................ 9,073,625
61,900 Earthgrains Company ............................... 4,058,350
34,000 Fine Host Corp.* .................................. 1,071,000
17,500 Ingles Markets Inc. Cl. A ......................... 286,563
113,900 Interstate Bakeries Corp. ......................... 6,755,751
273,000 JP Foodservice Inc.* .............................. 7,831,688
134,000 Morningstar Group Inc.* ........................... 3,936,250
--------------
33,013,227
--------------
FREIGHT--.3%
32,500 Expeditors International of Washington Inc. ....... 922,188
122,500 Landstar Systems Inc.* ............................ 3,445,313
--------------
4,367,501
--------------
HEALTH CARE--3.0%
470,700 Elan Corp. Plc--ADR* .............................. 21,299,175
174,900 McKesson Corp. .................................... 13,554,750
285,000 Omnicare, Inc. .................................... 8,941,875
--------------
43,795,800
--------------
HEALTH MAINTENANCE
ORGANIZATION--.7%
140,000 Oxford Health Plans, Inc.* ........................ 10,045,000
--------------
INDUSTRIAL EQUIPMENT--1.0%
150,000 Keystone International Inc. ....................... 5,203,200
187,600 Valmont Industries Inc. ........................... 3,564,400
155,600 Waters Corp.* ..................................... 5,582,150
--------------
14,349,750
--------------
INSURANCE--2.1%
82,500 Equitable Of Iowa Companies ....................... 4,620,000
85,000 Executive Risk Inc. ............................... 4,420,000
156,900 HCC Insurance Holdings Inc. ....................... 4,187,347
90,500 Protective Life Corp. ............................. 4,547,625
210,000 USF&G Corp. ....................................... 5,040,000
173,900 Vesta Insurance Group Inc. ........................ 7,521,175
--------------
30,336,147
--------------
LEISURE & ENTERTAINMENT--1.3%
40,000 Cinar Films,Inc. Cl. B.* .......................... 1,300,000
170,900 Family Golf Centers Inc.* ......................... 3,930,700
634,300 International Game Technology ..................... 11,258,825
120,400 Viad Corp. ........................................ 2,317,700
--------------
18,807,225
--------------
MANUFACTURING--.3%
12,000 Knoll Inc.* ....................................... 285,000
141,000 Palm Harbor Homes Inc.* ........................... 4,635,375
--------------
4,920,375
--------------
MEDICAL DEVICES--2.5%
433,100 Acuson Corp.* ..................................... 9,961,300
446,600 ESC Medical Systems Ltd. .......................... 11,388,300
251,600 Hologic, Inc.* .................................... 6,698,850
278,000 Mentor Corp. ...................................... 8,235,750
--------------
36,284,200
--------------
MEDICAL SERVICES--3.5%
48,000 American Oncology Resources, Inc. ................. 810,000
206,600 Express Scripts Inc. Cl. A* ....................... 8,625,550
161,500 Health Management Assoc., Inc. Cl. A .............. 4,602,750
67,100 HealthPlan Services Corp. ......................... 1,266,513
52,500 Hooper Holmes Inc. ................................ 1,204,245
367,800 Lincare Holdings Inc.* ............................ 15,815,400
70,000 National Surgery Centers, Inc.* ................... 2,476,250
341,550 PhyCor, Inc.* ..................................... 11,762,299
10,000 Quorum Health Group Inc.* ......................... 357,500
95,000 Sunrise Assisted Living Inc.* ..................... 3,325,000
--------------
50,245,507
--------------
MEDICAL TECHNOLOGY--.2%
116,500 Curative Health Services Inc.* .................... 3,349,375
--------------
7
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED) (CONT'D)
================================================================================
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
METALS--.8%
176,200 Special Metals Corp.* ............................. $ 3,435,900
247,000 Titanium Metals Corporation* ...................... 7,811,375
--------------
11,247,275
--------------
OIL & GAS--2.1%
160,200 EVI Inc.* ......................................... 6,728,400
100,000 Global Industries Ltd.* ........................... 2,335,900
373,500 Global Marine Inc.* ............................... 8,683,875
383,000 Varco International Inc.* ......................... 12,351,750
--------------
30,099,925
--------------
PAPER PACKAGING & FOREST
PRODUCTS--.8%
245,100 Sealed Air Corp.* ................................. 11,642,250
--------------
PHARMACEUTICALS--.7%
253,000 Dura Pharmaceuticals, Inc.* ....................... 10,088,375
--------------
POLLUTION CONTROL--3.3%
100,000 Allied Waste Industries Inc.* ..................... 1,737,500
133,000 American Disposal Services Inc.* .................. 2,992,500
142,000 Culligan Water Technologies Inc.* ................. 6,354,500
361,800 USA Waste Services, Inc.* ......................... 13,974,525
562,300 United Waste Systems, Inc.* ....................... 23,054,300
--------------
48,113,325
--------------
PUBLISHING--.3%
189,300 Big Flowers Press Holdings Inc.* .................. 3,927,975
--------------
REAL ESTATE--.5%
150,000 Boston Properties, Inc* ........................... 4,125,000
100,000 Spieker Properties Inc. ........................... 3,518,800
--------------
7,643,800
--------------
RESTAURANTS & LODGING--2.1%
250,000 Foodmaker Inc.* ................................... 4,093,750
324,900 Patriot American Hospitality Inc.+ ................ 8,284,950
432,000 Prime Hospitality Corp.* .......................... 8,532,000
212,400 Starwood Lodging Trust ............................ 9,066,931
--------------
29,977,631
--------------
RETAILING--8.4%
312,500 Bed Bath & Beyond Inc.* ........................... 9,492,188
307,800 Borders Group Inc.* ............................... 7,425,675
255,000 CompUSA Inc.* ..................................... 5,482,500
40,000 Dominick's Supermarkets, Inc.* .................... 1,065,000
151,400 Family Dollar Stores Inc. ......................... 4,125,650
85,000 The Finish Line Inc. Cl. A* ....................... 1,243,125
276,500 General Nutrition Companies, Inc.* ................ 7,742,000
140,500 Genesco Inc.* ..................................... 1,993,414
244,800 Gucci Group N.V ................................... 15,759,000
223,200 Michaels Stores Inc.* ............................. 4,729,162
100,000 Payless ShoeSource Inc.* .......................... 5,468,800
149,600 Quiksilver Inc.* .................................. 4,787,200
200,000 Sothebys Holdings Inc., Cl. A ..................... 3,375,000
383,400 Stage Stores, Inc.* ............................... 10,016,325
892,200 TJX Companies, Inc. ............................... 23,531,775
148,800 West Marine Inc.* ................................. 3,831,600
91,500 WestPoint Stevens Inc.* ........................... 3,579,938
232,400 Whole Foods Market Inc.* .......................... 7,698,250
--------------
121,346,602
--------------
SEMICONDUCTORS--8.0%
198,600 Adaptec, Inc.* .................................... 6,901,350
425,400 Altera Corporation* ............................... 21,482,700
429,600 Linear Technology Corporation ..................... 22,231,800
344,300 Maxim Integrated Products, Inc.* .................. 19,582,063
233,450 Microchip Technology Incorporated ................. 6,945,138
246,800 Texas Instruments, Incorporated ................... 20,746,748
374,400 Xilinx, Inc.* ..................................... 18,369,186
--------------
116,258,985
--------------
SEMICONDUCTORS CAPITAL
EQUIPMENT--2.9%
170,100 Applied Materials Inc.* ........................... 12,045,291
158,000 ASM Lithography Holding NV* ....................... 9,243,000
150,000 KLA-Tencor Corp.* ................................. 7,312,500
437,000 Kulicke & Soffa Industries Inc.* .................. 14,188,940
--------------
42,789,731
--------------
TRANSPORTATION--1.4%
512,900 Coach USA Inc.* ................................... 13,624,162
269,000 Knightsbridge Tankers Ltd.* ....................... 6,792,250
--------------
20,416,412
--------------
UTILITIES--.2%
115,000 Westcoast Energy Inc. ............................. 2,091,620
--------------
MISCELLANEOUS--.8%
50,000 Foamex International Inc.* ........................ 656,250
224,300 Ogden Corp. ....................................... 4,878,525
301,100 Pameco Corp. Cl. A* ............................... 5,344,525
--------------
10,879,300
--------------
TOTAL COMMON STOCKS
(COST $1,088,063,127) .......................... 1,399,255,057
--------------
8
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED) (CONT'D)
================================================================================
PRINCIPAL
AMOUNT VALUE
------ -----
SHORT-TERM INVESTMENTS--3.9%
SHORT-TERM CORPORATE NOTES--3.1%
$11,653,000 FPL Fuels Inc.,
5.58%, 7/10/97 ................................. $ 11,636,744
15,000,000 Philip Morris Cos. Inc.,
5.50%, 7/2/97 .................................. 14,997,708
3,347,000 Sanwa Business Credit Corp.,
5.70%, 7/10/97 ................................. 3,342,231
12,500,000 Southwestern Electricity Corp.,
5.80%, 7/10/97 (a) ............................. 12,481,875
2,900,000 Three Rivers Funding Corp.,
5.60%, 7/1/97 (a) ............................. 2,900,000
-------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $45,358,558) ............................. 45,358,558
-------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--.8%
Securities Held Under Repurchase
Agreements, 5.85%, 7/1/97,
with Bear, Stearns & Co. Inc.,
dtd 6/30/97, repurchase price
$11,832,017; collateralized by
U.S. Treasury Strips
(par value $51,163,000 due
2/15/18-8/15/18) ............................... 11,830,095
-------------
TOTAL SHORT-TERM INVESTMENTS
(COST $57,188,653) ............................. 57,188,653
-------------
TOTAL INVESTMENTS
(COST $1,145,251,780)(B) ...................... 100.5% 1,456,443,710
Liabilities in Excess of Other Assets .......... (.5) (7,858,815)
--- -------------
NET ASSETS ..................................... 100.0% $1,448,584,895
===== ==============
- --------------------------
* Non-income producing security.
+ Securities partially or fully on loan.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities
may be sold prior to their maturity only to qualified institutional buyers.
(b) At June 30, 1997, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $1,145,251,780, amounted to
$311,191,930 which consisted of aggregate gross unrealized appreciation of
$319,692,063 and aggregate gross unrealized depreciation of $8,500,133.
9
<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, 1997(i) 1996 1995 1994 1993 1992
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 40.91 $ 39.41 $ 27.31 $ 30.88 $ 27.26 $ 26.79
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.03) (0.04)(ii) (0.09) (0.03)(ii) (0.05) (0.06)
Net realized and unrealized gain
(loss) on investments 0.21 1.70 12.19 (1.45) 3.67 0.91
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.18 1.66 12.10 (1.48) 3.62 0.85
Distributions from net realized gains (1.56) (0.16) -- (2.09) -- (0.38)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 39.53 $ 40.91 $ 39.41 $ 27.31 $ 30.88 $ 27.26
==================================================================================================================================
Total Return 0.65% 4.18% 44.31% (4.38%) 13.28% 3.55%
==================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $1,448,585 $1,469,518 $984,212 $397,037 $238,850 $135,718
==================================================================================================================================
Ratio of expenses to average net assets 0.89% 0.88% 0.92% 0.96% 1.03% 0.98%
==================================================================================================================================
Ratio of net investment income (loss) to
average net assets (0.16%) (0.09%) (0.48%) (0.10%) (0.35%) (0.37%)
==================================================================================================================================
Portfolio Turnover Rate 63.22% 110.04% 80.66% 117.61% 148.07% 108.06%
==================================================================================================================================
Average Commission Rate Paid $ .0622 $ .0591
===============================================================================
(i) Unaudited. Ratios have been annualized; total return has not been annualized.
(ii) Amount was computed based on average shares outstanding during the year.
See Notes to Financial Statements.
</TABLE>
10
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS--94.0% VALUE
------ -----
AEROSPACE--7.9%
5,400 Allied Signal Inc. ................................ $ 453,600
12,900 Boeing Company (The) .............................. 684,513
15,000 Sundstrand Corp.+ ................................. 810,000
10,200 United Technologies Corp. ......................... 846,600
--------------
2,794,713
--------------
AGRICULTURE--1.3%
4,000 IMC Global Inc. ................................... 140,000
3,800 Pioneer Hi-Bred International Inc. ................ 304,000
--------------
444,000
--------------
APPAREL--.9%
7,400 Tommy Hilfiger Corporation* ....................... 297,391
--------------
APPLIANCES & TOOLS--1.5%
13,500 Sunbeam Corp. ..................................... 509,625
--------------
BIO-TECHNOLOGY--2.0%
9,000 DEKALB Genetics Corp. Cl. B+ ...................... 717,750
--------------
CHEMICALS--2.1%
8,500 Du Pont E.I. De Nemours & Co. ..................... 534,438
5,200 Monsanto Co. ...................................... 223,928
--------------
758,366
--------------
COMMUNICATIONS EQUIPMENT--2.9%
2,400 (LM) Ericsson Telephone Co., ADR, Cl. B ........... 94,500
4,800 Motorola, Inc. .................................... 364,800
10,000 Tellabs, Inc.* .................................... 558,750
--------------
1,018,050
--------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--1.3%
5,000 International Business Machines Corp. ............. 450,940
--------------
COMPUTER SOFTWARE--2.4%
3,000 Microsoft Corporation* ............................ 379,125
9,400 Oracle Corp.* ..................................... 473,525
--------------
852,650
--------------
CONGLOMERATES--5.3%
15,000 General Electric Co. .............................. 980,625
13,000 Tyco International Ltd.+ .......................... 904,319
--------------
1,884,944
--------------
CONSUMER PRODUCTS--7.3%
5,200 ADT Ltd.* ......................................... 171,600
13,000 Colgate Palmolive Co. ............................. 848,250
2,900 Corning Inc. ...................................... 161,313
10,900 Gillette Co. ...................................... 1,032,775
2,800 Minnesota Mining & Manufacturing Co. .............. 285,600
2,300 Newell Co. ........................................ 91,138
--------------
2,590,676
--------------
ENERGY & ENERGY SERVICES--1.9%
5,400 Schlumberger Ltd. ................................. 675,000
--------------
FINANCIAL SERVICES--12.5%
7,000 American Express Co. .............................. 521,500
6,000 BankAmerica Corp. ................................. 387,377
8,600 Citicorp .......................................... 1,036,842
6,000 Equifax Inc.+ ..................................... 223,128
12,000 Mellon Bank Corp. ................................. 541,500
15,015 Morgan Stanley, Dean Witter, Discover Co. ......... 646,591
4,300 Paine Webber Group Inc. ........................... 150,500
11,000 Schwab (Charles) Corporation (The)+ ............... 447,568
10,000 SunAmerica Inc. ................................... 487,500
--------------
4,442,506
--------------
FOODS & BEVERAGES--1.2%
11,200 PepsiCo, Inc. ..................................... 420,706
--------------
HEALTH CARE--2.6%
12,000 McKesson Corp. .................................... 930,000
--------------
INSURANCE--4.0%
6,700 American International Group Inc. ................. 1,000,812
5,000 Amerus Life Holdings Inc. Cl. A ................... 139,375
11,000 USF&G Corp. ....................................... 264,000
--------------
1,404,187
--------------
LEISURE & ENTERTAINMENT--1.7%
15,000 Carnival Corporation Cl. A ........................ 618,750
--------------
MANUFACTURING--2.5%
8,850 Precision Castparts Corp. ......................... 527,681
15,300 Westinghouse Electric Corp. ....................... 353,813
--------------
881,494
--------------
MEDICAL DEVICES--1.1%
8,000 Becton Dickinson & Co. ............................ 405,000
--------------
OIL & GAS--4.5%
2,000 Chevron Corp. ..................................... 147,876
6,000 Exxon Corp. ....................................... 369,000
13,300 Halliburton Co. ................................... 1,054,025
--------------
1,570,901
--------------
11
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED) (CONT'D)
================================================================================
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
PHARMACEUTICALS--12.7%
11,500 Bristol Myers Squibb Co.+ ......................... $ 931,500
9,900 Eli Lilly & Company ............................... 1,082,198
12,000 Merck & Co., Inc. ................................. 1,242,000
2,900 Pfizer Inc. ....................................... 346,550
7,100 Warner-Lambert Co. ................................ 882,175
-----------
4,484,423
-----------
POLLUTION CONTROL--1.8%
19,800 Waste Management Inc. ............................. 636,075
-----------
RETAILING--5.9%
2,300 Gucci Group N.V ................................... 148,062
11,500 Home Depot, Inc. .................................. 792,787
13,000 Rite Aid Corp. .................................... 648,375
19,000 TJX Companies, Inc. ............................... 501,125
-----------
2,090,349
-----------
SEMICONDUCTORS--5.4%
6,000 Altera Corporation* ............................... 303,000
2,100 Intel Corp. ....................................... 297,807
13,100 Linear Technology Corporation ..................... 677,925
7,400 Texas Instruments, Incorporated+ .................. 622,066
-----------
1,900,798
-----------
SEMICONDUCTORS CAPITAL EQUIPMENT--.9%
4,700 Applied Materials Inc.* ........................... 332,821
-----------
MISCELLANEOUS--.4%
4,000 Service Corp. International ....................... 131,500
-----------
TOTAL COMMON STOCKS
(COST $26,479,349) ............................. 33,243,615
-----------
PREFERRED STOCK--.7%
COMMUNICATIONS
3,500 Nokia Corporation, ADR+
(COST $187,284) ................................. 258,125
-----------
PRINCIPAL
AMOUNT
- ---------
SHORT-TERM INVESTMENTS--6.9%
SHORT-TERM CORPORATE NOTES--2.1%
$750,000 United Air Lines First Funding Corp.,
5.80%, 7/10/97
(COST $748,913) ................................ 748,913
-----------
SECURITIES HELD
UNDER REPURCHASE
AGREEMENTS--4.8%
Securities Held Under Repurchase
Agreements, 7/1/97, 5.85%-6.375%,
with Bear, Stearns & Co. Inc., dtd
6/30/97, repurchase price $1,709,417;
collateralized by U.S. Treasury
Strips (par value $7,615,000 due
2/15/18-11/15/18) .............................. 1,709,128
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $2,458,041) .............................. 2,458,041
-----------
TOTAL INVESTMENTS
(COST $29,124,674)(A) ................................ 101.6% 35,959,781
Liabilities in Excess of Other Assets ................. (1.6) (579,928)
----- -----------
NET ASSETS ............................................ 100.0% $35,379,853
===== ===========
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At June 30, 1997, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $29,124,674, amounted to $6,835,107
which consisted of aggregate gross unrealized appreciation of $6,924,756
and aggregate gross unrealized depreciation of $89,649.
See Notes to Financial Statements.
12
<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, 1997(I) 1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.42 $ 17.79 $ 13.30 $ 15.31 $ 13.93 $ 13.08
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.01 0.09(ii) 0.11(ii) 0.17 0.07 0.08
Net realized and unrealized gain
(loss) on investments 1.81 1.87 4.54 (1.47) 1.37 1.02
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.82 1.96 4.65 (1.30) 1.44 1.10
- --------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.04) (0.33) (0.16) (0.15) (0.06) (0.12)
Distributions from net realized gains (0.36) (11.00) -- (0.56) -- (0.13)
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.40) (11.33) (0.16) (0.71) (0.06) (0.25)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.84 $ 8.42 $ 17.79 $ 13.30 $ 15.31 $ 13.93
================================================================================================================================
Total Return 22.02% 19.68% 35.13% (8.28%) 10.34% 8.64%
================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $35,380 $ 20,910 $ 8,639 $ 29,135 $31,895 $ 8,671
================================================================================================================================
Ratio of expenses to average net assets 0.74% 0.81% 0.75% 0.75% 0.97% 1.25%
================================================================================================================================
Decrease reflected in above expense ratios
due to expense reimbursements -- -- -- -- -- 0.01%
================================================================================================================================
Ratio of net investment income to average
net assets 0.74% 0.94% 0.61% 1.22% 1.51% 1.62%
=================================================================================================================================
Portfolio Turnover Rate 62.40% 121.60% 164.05% 177.97% 105.80% 100.62%
=================================================================================================================================
Average Commission Rate Paid $ .0708 $ .0728
===============================================================================
</TABLE>
(i) Unaudited. Ratios have been annualized; total return has not been
annualized.
(ii) Amount was computed based on average shares outstanding during the year.
See Notes to Financial Statements.
13
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS--57.9% VALUE
------ -----
AEROSPACE--4.6%
1,400 Allied Signal Inc. ................................. $ 117,600
3,200 Boeing Company (The) ............................... 169,802
3,200 Gulfstream Aerospace Corp.* ........................ 94,400
2,500 Sundstrand Corp.+ .................................. 135,000
1,500 United Technologies Corp. .......................... 124,500
------------
641,302
------------
AGRICULTURE--.6%
1,000 IMC Global Inc. .................................... 35,000
600 Pioneer Hi-Bred International Inc. ................. 48,000
------------
83,000
------------
APPAREL--.1%
500 Tommy Hilfiger Corporation* ........................ 20,094
------------
APPLIANCES & TOOLS--1.2%
4,300 Sunbeam Corp. ...................................... 162,325
------------
BUSINESS SERVICES--.2%
500 Cintas Corp. ....................................... 34,375
------------
CHEMICALS--1.4%
2,100 Du Pont E.I. De Nemours & Co. ...................... 132,038
1,425 Monsanto Co. ....................................... 61,365
------------
193,403
------------
COMMUNICATIONS--1.1%
4,600 WorldCom Inc.* ..................................... 147,200
------------
COMMUNICATIONS EQUIPMENT--3.0%
3,300 Cisco Systems, Inc.* ............................... 221,513
700 (LM) Ericsson Telephone Co. ADR Cl. B .............. 27,563
1,200 Motorola, Inc. ..................................... 91,200
1,500 Tellabs, Inc.* ..................................... 83,813
------------
424,089
------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--1.9%
1,900 Bay Networks Inc.* ................................. 50,470
1,600 Hewlett-Packard Company+ ........................... 89,600
1,400 International Business Machines Corp. .............. 126,263
------------
266,333
------------
COMPUTER SOFTWARE--3.0%
1,300 Microsoft Corporation* ............................. 164,288
3,800 Oracle Corp.* ...................................... 191,425
1,500 Parametric Technology Corporation* ................. 63,845
------------
419,558
------------
CONGLOMERATE--2.7%
3,000 General Electric Co. ............................... 196,125
2,600 Tyco International Ltd.+ ........................... 180,864
------------
376,989
------------
CONSUMER PRODUCTS--4.6%
1,300 ADT Ltd.* .......................................... 42,900
3,850 CUC International Inc.* ............................ 99,380
2,100 Colgate Palmolive Co. .............................. 137,025
1,600 Corning Inc. ....................................... 89,000
2,600 Gillette Co. ....................................... 246,350
500 Newell Co. ......................................... 19,813
------------
634,468
------------
ENERGY & ENERGY SERVICES--1.8%
1,500 Diamond Offshore Drilling Inc.* .................... 117,188
1,100 Schlumberger Ltd. .................................. 137,500
------------
254,688
------------
FINANCIAL SERVICES--6.2%
1,800 Citicorp ........................................... 217,013
2,126 First Data Corporation+ ............................ 93,412
400 Household International Inc. ....................... 46,975
3,000 Money Store Inc.(The)+ ............................. 86,064
6,105 Morgan Stanley, Dean Witter, Discover Co. .......... 262,900
2,200 Paine Webber Group Inc. ............................ 77,000
2,000 Schwab (Charles) Corporation (The)+ ................ 81,376
------------
864,740
------------
FOODS & BEVERAGES--.6%
2,300 PepsiCo, Inc. ...................................... 86,395
------------
HEALTH CARE--.3%
500 McKesson Corp. ..................................... 38,750
------------
INSURANCE--2.1%
1,400 American International Group Inc. .................. 209,125
1,600 MGIC Investment Corp. .............................. 76,701
------------
285,826
------------
LEISURE & ENTERTAINMENT--1.7%
3,200 Carnival Corporation Cl. A ......................... 132,000
5,700 International Game Technology ...................... 101,175
------------
233,175
------------
14
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED) (CONT'D)
===============================================================================
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
MANUFACTURING--.9%
5,500 Westinghouse Electric Corp. ........................ $ 127,187
------------
MEDICAL DEVICES--.4%
1,100 Becton Dickinson & Co. ............................. 55,687
------------
OIL & GAS--1.4%
1,200 EVI Inc.* .......................................... 50,400
1,900 Halliburton Co. .................................... 150,575
------------
200,975
------------
PHARMACEUTICALS--6.4%
1,200 Bristol Myers Squibb Co.+ .......................... 97,200
2,500 Eli Lilly & Company ................................ 273,283
2,500 Merck & Co., Inc. .................................. 258,750
700 Pfizer Inc. ........................................ 83,650
800 Schering-Plough Corporation ........................ 38,300
1,100 Warner-Lambert Co. ................................. 136,675
------------
887,858
------------
POLLUTION CONTROL--.6%
2,100 USA Waste Services, Inc.* .......................... 81,112
------------
RETAILING--4.5%
2,000 Gucci Group N.V .................................... 128,750
4,000 Home Depot, Inc. ................................... 275,752
6,700 Wal-Mart Stores Inc. ............................... 226,547
------------
631,049
------------
SEMICONDUCTORS--5.2%
1,200 Adaptec, Inc.* ..................................... 41,700
2,100 Altera Corporation* ................................ 106,050
600 Intel Corp. ........................................ 85,088
2,100 Linear Technology Corporation ...................... 108,675
1,100 Maxim Integrated Products, Inc.* ................... 62,563
2,400 Texas Instruments, Incorporated+ ................... 201,751
2,400 Xilinx, Inc.* ...................................... 117,751
------------
723,578
------------
SEMICONDUCTORS
CAPITAL EQUIPMENT--.6%
1,200 Applied Materials Inc.* ............................ 84,976
------------
TRANSPORTATION--.5%
800 AMR Corp.* ......................................... 74,000
------------
MISCELLANEOUS--.3%
1,100 Service Corp. International ........................ 36,163
------------
TOTAL COMMON STOCKS
(COST $6,448,796) ............................... 8,069,295
------------
PREFERRED STOCK--1.3%
COMMUNICATIONS
2,500 Nokia Corporation, ADR+
(COST $147,435) ................................. 184,375
------------
PRINCIPAL
AMOUNT CORPORATE BONDS--9.6% VALUE
- ----------- -----
AUTOMOTIVE--3.1%
$ 200,000 Ford Motor Credit Corp.,
9.50%, 6/01/10 .................................. 235,162
200,000 General Motors Acceptance Corp.,
7.125%, 6/01/99 ................................. 202,532
------------
437,694
------------
POLLUTION CONTROL--1.5%
200,000 Waste Management Inc.,
8.25%, 11/15/99 ................................. 207,486
------------
CONGLOMERATE--1.4%
200,000 General Electric Capital Corp.,
7.25%, 6/05/12 .................................. 197,318
------------
ELECTRIC UTILITIES--.7%
100,000 Cincinnati Gas & Electric Co.,
7.20%, 10/01/23 ................................. 95,311
------------
FINANCIAL SERVICES--2.2%
100,000 Bank America Corp.,
7.125%, 5/12/05.................................. 100,046
200,000 Transamerica Financial Corp.,
7.85%, 10/21/99 ................................. 204,500
------------
304,546
------------
INSURANCE--.7%
100,000 Travelers Inc.,
7.75%, 6/15/99 .................................. 102,462
------------
TOTAL CORPORATE BONDS
(COST $1,392,855) ............................... 1,344,817
------------
U.S. GOVERNMENT &
AGENCY OBLIGATIONS--14.3%
200,000 U.S. Treasury Notes,
5.625%, 11/30/98 ................................ 199,094
200,000 U.S. Treasury Notes,
7.50%, 10/31/99 ................................. 205,688
200,000 U.S. Treasury Notes,
5.875%, 11/30/01 ................................ 196,094
400,000 Federal Home Loan Bank Corp.,
8.02%, 1/30/12 .................................. 396,064
300,000 Federal Home Loan Bank Corp.,
7.58%, 7/09/12 .................................. 299,940
500,000 Federal Home Loan Mortgage Corp.,
7.00%, 3/06/07 .................................. 485,390
200,000 Federal National Mortgage Association,
8.50%, 2/01/05 .................................. 209,032
------------
TOTAL U.S. GOVERNMENT &
AGENCY OBLIGATIONS
(COST $1,996,688)................................ 1,991,302
------------
15
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED) (CONT'D)
===============================================================================
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--21.9% VALUE
---------- -----
SHORT-TERM CORPORATE NOTES--16.7%
$ 650,000 FPL Fuels Inc.,
5.58%, 7/08/97 .................................. $ 649,093
625,000 HMO Funding Corp.,
5.62%, 7/08/97 .................................. 624,317
650,000 Mitsui & Co., Inc.,
5.63%, 7/08/97 .................................. 649,289
400,000 United Airlines First Funding Corp.,
5.80%, 7/10/97 .................................. 399,420
------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $2,322,119) ............................... 2,322,119
------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--5.2%
Securities Held Under Repurchase
Agreements, 5.85%-6.375%, 7/1/97,
With Bear, Stearns & Co. Inc., dtd
6/30/97, repurchase price $712,949;
collateralized by U.S. Treasury
Strips (par value $3,150,000 due
8/15/18) ........................................ 712,833
------------
TOTAL SHORT-TERM INVESTMENTS
(COSTS $3,034,952) .............................. 3,034,952
------------
TOTAL INVESTMENTS
(COST $13,020,726) (A) 105.0% 14,624,741
Liabilities in Excess of Other Assets ......... (5.0) (687,836)
----- ------------
NET ASSETS .................................... 100.0% $13,936,905
===== ============
- -------------------------------------------------------------------------------
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At June 30, 1997, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $13,020,726, amounted to $1,604,015
which consisted of aggregate gross unrealized appreciation of $1,695,900
and aggregate gross unrealized depreciation of $91,885.
See Notes to Financial Statements.
16
<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, 1997(ii) 1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.24 $ 13.64 $ 10.80 $ 11.58 $ 10.77 $ 10.02
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.08 0.21(iii) 0.33(iii) 0.20 0.15 0.22
Net realized and unrealized gain
(loss) on investments 1.01 1.01 2.73 (0.70) 0.69 0.72
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.09 1.22 3.06 (0.50) 0.84 0.94
- --------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.12) (0.73) (0.22) (0.13) (0.03) (0.19)
Distributions from net realized gains (0.16) (4.89) -- (0.15) -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.28) (5.62) (0.22) (0.28) (0.03) (0.19)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.05 $ 9.24 $ 13.64 $ 10.80 $ 11.58 $ 10.77
================================================================================================================================
Total Return 11.91% 10.17% 28.62% (4.27%) 7.79% 9.48%
================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $13,937 $ 10,486 $ 3,671 $ 10,394 $ 7,848 $ 4,009
================================================================================================================================
Ratio of expenses to average net assets 1.04% 1.14% 1.00% 1.08% 1.25% 1.25%
================================================================================================================================
Decrease reflected in above expense ratios
due to expense reimbursements -- -- -- -- 0.19% 0.42%
================================================================================================================================
Ratio of net investment income to average
net assets 2.18% 2.06% 2.49% 2.30% 2.05% 1.99%
================================================================================================================================
Portfolio Turnover Rate 49.63% 68.66% 113.02% 78.80% 85.46% 15.27%
================================================================================================================================
Average Commission Rate Paid $.0714 $ .0712
===============================================================================
(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 year.
See Notes to Financial Statements.
</TABLE>
17
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED)
===============================================================================
SHARES COMMON STOCKS--93.8% VALUE
------ -----
AEROSPACE--3.5%
8,800 BE Aerospace Inc.* ................................. $ 278,300
23,000 Greenwich Air Services Inc. Cl. A .................. 658,375
260,500 Gulfstream Aerospace Corp.* ........................ 7,684,750
120,100 Sundstrand Corp. ................................... 6,485,400
------------
15,106,825
------------
AGRICULTURE--2.4%
116,800 IMC Global Inc. .................................... 4,088,000
80,100 Pioneer Hi-Bred International Inc. ................. 6,408,000
------------
10,496,000
------------
APPAREL--3.7%
177,100 Nautica Enterprises Inc.* .......................... 4,682,170
88,500 Warnaco Group Inc. Cl. A ........................... 2,820,938
216,800 Tommy Hilfiger Corporation* ........................ 8,712,758
------------
16,215,866
------------
APPLIANCES & TOOLS--1.9%
222,000 Sunbeam Corp. ...................................... 8,380,500
------------
BIO-TECHNOLOGY--2.7%
404,900 BioChem Pharma Inc.* ............................... 9,009,025
136,800 Chiron Corp.* ...................................... 2,855,700
------------
11,864,725
------------
BUSINESS SERVICES--2.3%
70,000 Cintas Corp. ....................................... 4,812,500
31,000 G & K Services Inc. Cl. A .......................... 1,154,750
109,500 Paychex, Inc. ...................................... 4,161,000
------------
10,128,250
------------
COMMUNICATIONS--1.1%
156,100 WorldCom Inc.* ..................................... 4,995,200
------------
COMMUNICATIONS EQUIPMENT--3.1%
93,200 Cisco Systems, Inc.* ............................... 6,256,050
132,700 Tellabs, Inc.* ..................................... 7,414,613
------------
13,670,663
------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--.6%
101,900 Bay Networks Inc.* ................................. 2,706,770
------------
COMPUTER SERVICES--.5%
72,500 Sterling Commerce, Inc.* ........................... 2,383,438
------------
COMPUTER SOFTWARE--6.1%
213,400 Electronics For Imaging Inc.* ...................... 10,083,150
56,500 HBO & Company ...................................... 3,891,438
294,500 Parametric Technology Corporation* ................. 12,534,804
------------
26,509,392
------------
CONGLOMERATE--.8%
50,500 Tyco International Ltd. ............................ 3,512,932
------------
CONSUMER PRODUCTS--3.5%
83,700 ADT Ltd.* .......................................... 2,762,100
338,750 CUC International Inc.* ............................ 8,744,154
75,000 Fortune Brands Inc. ................................ 2,798,475
26,100 Newell Co. ......................................... 1,034,213
------------
15,338,942
------------
ENERGY & ENERGY SERVICES--1.9%
135,000 Santa Fe International Corp. ....................... 4,590,000
59,000 Smith International Inc.* .......................... 3,584,250
------------
8,174,250
------------
FINANCIAL SERVICES--9.6%
173,000 CWM Mortgage Holdings Inc. ......................... 4,141,274
186,800 Equifax Inc. ....................................... 6,946,718
69,712 First Data Corporation ............................. 3,063,006
434,900 Money Store Inc. (The) ............................. 12,476,411
118,700 Paine Webber Group Inc. ............................ 4,154,500
157,600 Schwab (Charles) Corporation (The) ................. 6,412,429
91,400 SunAmerica Inc. .................................... 4,455,750
------------
41,650,088
------------
FOODS & BEVERAGES--.8%
202,500 Chiquita Brands International Inc. ................. 2,784,375
11,000 Interstate Bakeries Corp. .......................... 652,443
------------
3,436,818
------------
HEALTH CARE--2.6%
174,500 Elan Corp PLC-ADR* ................................. 7,896,125
46,000 McKesson Corp. ..................................... 3,565,000
------------
11,461,125
------------
HEALTH MAINTENANCE ORGANIZATION--1.3%
78,700 Oxford Health Plans, Inc.* ......................... 5,646,725
------------
INSURANCE--2.4%
25,000 Hartford Life, Inc. Cl. A.* ........................ 937,500
197,000 MGIC Investment Corp. .............................. 9,443,786
------------
10,381,286
------------
LEISURE & ENTERTAINMENT--4.0%
122,100 Carnival Corporation Cl. A ......................... 5,036,625
530,800 International Game Technology ...................... 9,421,700
124,000 Mirage Resorts, Incorporated* ...................... 3,131,000
------------
17,589,325
------------
MEDICAL DEVICES--1.0%
40,000 Becton Dickinson & Co. ............................. 2,025,000
25,000 Hologic, Inc.* ..................................... 665,625
54,600 Mentor Corp. ....................................... 1,617,525
------------
4,308,150
------------
18
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED) (CONT'D)
===============================================================================
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
MEDICAL SERVICES--3.0%
79,000 Cardinal Health, Inc. .............................. $ 4,522,750
179,000 PhyCor, Inc.* ...................................... 6,164,402
64,700 Quorum Health Group Inc.* .......................... 2,313,025
------------
13,000,177
------------
METALS--1.3%
60,200 Special Metals Corp.* .............................. 1,173,900
139,600 Titanium Metals Corporation* ....................... 4,414,850
------------
5,588,750
------------
OIL & GAS--4.0%
91,000 EVI Inc.* .......................................... 3,822,000
95,000 Global Industries Ltd.* ............................ 2,219,105
145,100 Global Marine Inc.* ................................ 3,373,575
100,900 Halliburton Co. .................................... 7,996,325
------------
17,411,005
------------
PAPER PACKAGING &
FOREST PRODUCTS--1.7%
158,200 Sealed Air Corp.* .................................. 7,514,500
------------
POLLUTION CONTROL--3.6%
130,100 Allied Waste Industries Inc.* ...................... 2,260,488
111,500 USA Waste Services, Inc.* .......................... 4,306,688
104,500 U.S. Filter Corp.* ................................. 2,847,625
153,600 United Waste Systems, Inc.* ........................ 6,297,600
------------
15,712,401
------------
REAL ESTATE--.4%
56,400 Boston Properties, Inc.* ........................... 1,551,000
------------
RETAILING--9.9%
48,000 Barnes & Noble Inc.* ............................... 2,064,000
196,400 Borders Group Inc.* ................................ 4,738,150
323,000 CompUSA Inc.* ...................................... 6,944,500
284,900 General Nutrition Companies, Inc. .................. 7,977,200
133,800 Gucci Group N.V .................................... 8,613,375
86,600 Rite Aid Corp. ..................................... 4,319,175
251,600 TJX Companies, Inc. ................................ 6,635,950
70,500 West Marine Inc.* .................................. 1,815,375
------------
43,107,725
------------
SEMICONDUCTORS--10.5%
63,300 Adaptec, Inc.* ..................................... 2,199,675
132,000 Altera Corporation* ................................ 6,666,000
254,300 Linear Technology Corporation ...................... 13,160,025
236,200 Maxim Integrated Products, Inc.* ................... 13,433,875
207,500 Xilinx, Inc.* ...................................... 10,180,573
------------
45,640,148
------------
SEMICONDUCTORS
CAPITAL EQUIPMENT--2.7%
122,400 Applied Materials Inc.* ............................ 8,667,510
91,600 Kulicke & Soffa Industries Inc.* ................... 2,974,160
------------
11,641,670
------------
TRANSPORTATION--.5%
76,000 Coach USA Inc.* .................................... 2,018,788
------------
MISCELLANEOUS--.4%
53,900 Service Corp. International ........................ 1,771,963
------------
TOTAL COMMON STOCKS
(COST $347,693,959) ............................. 408,915,397
------------
PREFERRED STOCK--3.3%
COMMUNICATIONS
191,300 Nokia Corporation, ADR
(COST $10,445,266) ................................. 14,108,375
------------
PRINCIPAL
AMOUNT
- ----------
SHORT-TERM INVESTMENTS--6.1%
SHORT-TERM CORPORATE NOTES--5.7%
15,000,000 Philip Morris Cos., Inc.,
5.50%, 7/2/97 ................................... 14,997,708
3,170,000 Riverside Funding, Inc.,
5.65%, 7/8/97 ................................... 3,166,517
Oglethorpe Power Corporation,
1,514,000 5.65%, 7/3/97 ................................... 1,513,525
5,316,000 5.67%, 7/8/97 ................................... 5,310,140
------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $24,987,890) .............................. 24,987,890
------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--.4%
Securities Held Under Repurchase
Agreements, 5.85%, 7/1/97, with Bear, Stearns
& Co. Inc., dtd 6/30/97, repurchase
price $1,866,514; collateralized
by U.S. Treasury Strips
(par value $8,235,000 due 8/15/18) .............. 1,866,211
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $26,854,101) .............................. 26,854,101
------------
TOTAL INVESTMENTS
(COST $384,993,326)(A) ..................... 103.2% 449,877,873
Liabilities in Excess of Other Assets ....... (3.2) (13,841,122)
------ ------------
NET ASSETS .................................. 100.0% $436,036,751
====== ============
- -------------------------------------------------------------------------------
* Non-income producing security.
(a) At June 30, 1997, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $384,993,326, amounted to
$64,884,547 which consisted of aggregate gross unrealized appreciation of
$69,392,051 and aggregate gross unrealized depreciation of $4,507,504.
See Notes to Financial Statements.
19
<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
(COMMENCEMENT OF
SIX MONTHS YEAR ENDED DECEMBER 31, OPERATIONS)
ENDED ------------------------------------------- TO DECEMBER 31,
JUNE 30, 1997(i)(ii) 1996 1995 1994 1993 (ii)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 21.35 $ 19.44 $ 13.46 $ 13.72 $ 10.00
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.01) 0.03 (0.03) 0.00(iii) (0.02)
Net realized and unrealized gain
(loss) on investments 1.50 2.29 6.01 (0.21) 3.88
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.49 2.32 5.98 (0.21) 3.86
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.01) -- -- -- --
Distributions from net realized gains (0.32) (0.41) -- (0.05) (0.14)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.33) (0.41) -- (0.05) (0.14)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 22.51 $ 21.35 $ 19.44 $ 13.46 $ 13.72
===================================================================================================================================
Total Return 7.06% 11.90% 44.45% (1.54%) 38.67%
===================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) $436,037 $394,847 $185,349 $62,178 $21,301
===================================================================================================================================
Ratio of expenses to average
net assets 0.84% 0.84% 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 (0.05)% 0.08% (0.25%) 0.03% (0.58%)
===================================================================================================================================
Portfolio Turnover Rate 85.28% 90.97% 104.74% 83.96% 67.22%
===================================================================================================================================
Average Commission Rate Paid $ .0662 $ .0663
================================================================================
(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.
20
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS--96.0% VALUE
------ -----
AEROSPACE--6.7%
7,800 Allied Signal Inc. ................................. $ 655,200
17,300 Boeing Company (The) ............................... 917,990
16,500 Gulfstream Aerospace Corp.* ........................ 486,750
5,000 Sundstrand Corp.+ .................................. 270,000
10,500 United Technologies Corp. .......................... 871,500
------------
3,201,440
------------
AGRICULTURE--.9%
5,600 IMC Global Inc. .................................... 196,000
2,900 Pioneer Hi-Bred International Inc. ................. 232,000
------------
428,000
------------
APPAREL--1.0%
1,600 Nautica Enterprises Inc.* .......................... 42,301
10,100 Tommy Hilfiger Corporation* ........................ 405,899
------------
448,200
------------
BIO-TECHNOLOGY--.3%
7,000 BioChem Pharma Inc.* ............................... 155,750
------------
BUSINESS SERVICES--1.1%
9,900 Saville Systems PLC ADR* ........................... 514,800
------------
CHEMICALS--2.2%
11,300 Du Pont E.I. De Nemours & Co. ...................... 710,488
7,700 Monsanto Co. ....................................... 331,585
------------
1,042,073
------------
COMMUNICATIONS--.9%
13,700 WorldCom Inc.* ..................................... 438,400
------------
COMMUNICATIONS EQUIPMENT--6.5%
4,000 Advanced Fibre Communications Inc.* ................ 241,500
15,500 Cisco Systems, Inc.* ............................... 1,040,437
4,700 LM Ericsson Telephone Co. ADR Cl. B ................ 185,063
6,700 Motorola, Inc. ..................................... 509,200
20,800 Tellabs, Inc.* ..................................... 1,162,200
------------
3,138,400
------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--2.5%
19,200 Bay Networks Inc.* ................................. 510,010
7,600 International Business Machines Corp. .............. 685,429
------------
1,195,439
------------
COMPUTER SERVICES--.7%
10,300 Sterling Commerce, Inc.* ........................... 338,613
------------
COMPUTER SOFTWARE--8.8%
17,400 Electronics For Imaging Inc.* ...................... 822,150
6,900 Microsoft Corporation* ............................. 871,988
25,100 Oracle Corp.* ...................................... 1,264,413
17,900 Parametric Technology Corporation* ................. 761,878
18,100 Structural Dynamics Research Corp.* ................ 475,125
------------
4,195,554
------------
CONGLOMERATE--2.0%
13,400 Tyco International Ltd.+ ........................... 932,144
------------
CONSUMER PRODUCTS--7.7%
7,200 ADT Ltd.* .......................................... 237,600
10,000 CUC International Inc.* ............................ 258,130
19,800 Colgate Palmolive Co. .............................. 1,291,950
4,200 Corning Inc. ....................................... 233,625
16,100 Gillette Co. ....................................... 1,525,475
3,100 Newell Co. ......................................... 122,838
------------
3,669,618
------------
ENERGY & ENERGY SERVICES--3.1%
6,500 Diamond Offshore Drilling Inc.* .................... 507,813
7,800 Schlumberger Ltd. .................................. 975,000
------------
1,482,813
------------
FINANCIAL SERVICES--7.6%
11,000 Citicorp ........................................... 1,326,193
14,600 Money Store Inc. (The)+ ............................ 418,845
19,470 Morgan Stanley, Dean Witter, Discover Co. .......... 838,437
24,500 Schwab (Charles) Corporation (The)+ ................ 996,855
------------
3,580,330
------------
FOODS & BEVERAGES--.6%
7,000 PepsiCo, Inc. ...................................... 262,941
------------
HEALTH CARE--1.8%
11,200 McKesson Corp. ..................................... 868,000
------------
HEALTH MAINTENANCE ORGANIZATION--1.5%
10,000 Oxford Health Plans, Inc.* ......................... 717,500
------------
INDUSTRIAL EQUIPMENT--.3%
9,700 Comfort Systems USA Inc.* .......................... 151,563
------------
INSURANCE--3.0%
9,600 American International Group Inc. .................. 1,434,000
------------
LEISURE & ENTERTAINMENT--1.4%
11,000 Carnival Corporation Cl. A ......................... 453,750
11,500 International Game Technology ...................... 204,125
------------
657,875
------------
21
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1997 (UNAUDITED) (CONT'D)
================================================================================
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
MANUFACTURING--1.0%
20,200 Westinghouse Electric Corp. ........................ $ 467,125
------------
MEDICAL DEVICES--2.3%
13,000 Becton Dickinson & Co. ............................. 658,125
8,700 ESC Medical Systems Ltd. ........................... 221,850
7,900 Hologic, Inc.* ..................................... 210,337
------------
1,090,312
------------
OIL & GAS--2.1%
12,400 Halliburton Co. .................................... 982,700
------------
PHARMACEUTICALS--12.6%
11,900 Bristol Myers Squibb Co.+ .......................... 963,900
12,900 Eli Lilly & Company ................................ 1,410,137
16,500 Merck & Co., Inc. .................................. 1,707,750
3,900 Pfizer Inc. ........................................ 466,050
4,800 Schering-Plough Corporation ........................ 229,800
9,800 Warner-Lambert Co. ................................. 1,217,650
------------
5,995,287
------------
POLLUTION CONTROL--1.1%
10,000 USA Waste Services, Inc.* .......................... 386,250
3,200 United Waste Systems, Inc.* ........................ 131,200
------------
517,450
------------
RESTAURANTS & LODGING--.5%
10,000 Patriot American Hospitality Inc.+ ................. 255,000
------------
RETAILING--5.5%
9,500 Gucci Group N.V .................................... 611,563
16,500 Home Depot, Inc. ................................... 1,137,477
23,000 TJX Companies, Inc. ................................ 606,625
7,200 Wal-Mart Stores Inc. ............................... 243,454
------------
2,599,119
------------
SEMICONDUCTORS--9.1%
6,300 Adaptec, Inc.* ..................................... 218,925
13,200 Altera Corporation* ................................ 666,600
3,000 Intel Corp. ........................................ 425,439
17,900 Linear Technology Corporation ...................... 926,325
11,900 Maxim Integrated Products, Inc.* ................... 676,813
9,700 Texas Instruments, Incorporated+ ................... 815,411
12,800 Xilinx, Inc.* ...................................... 628,006
------------
4,357,519
------------
SEMICONDUCTORS CAPITAL
EQUIPMENT--1.2%
6,600 Applied Materials Inc.* ............................ 467,366
3,400 Kulicke & Soffa Industries Inc.* ................... 110,395
------------
577,761
------------
TOTAL COMMON STOCKS
(COST $37,911,250) .............................. 45,695,726
------------
PREFERRED STOCK--1.3%
COMMUNICATIONS
8,700 Nokia Corporation, ADR+
(COST $494,586) ................................. 641,625
------------
SHORT-TERM INVESTMENTS--3.6%
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS
Securities Held Under Repurchase
Agreements, 5.85%-6.375%, 7/1/97,
with Bear, Stearns & Co. Inc., dtd 6/30/97,
repurchase price $1,706,858; collateralized
by U.S. Treasury Strips
(par value $7,535,000 due 8/15/18)
(COST $1,706,572) ............................... 1,706,572
------------
TOTAL INVESTMENTS
(COST $40,112,408)(A) ....................... 100.9% 48,043,923
Liabilities in Excess of Other Assets ........... (.9) (410,597)
----- ------------
NET ASSETS ...................................... 100.0% $ 47,633,326
===== ============
- --------------------------------------------------------------------------------
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At June 30, 1997, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $40,112,408, amounted to $7,931,515
which consisted of aggregate gross unrealized appreciation of $8,176,651
and aggregate gross unrealized depreciation of $245,136.
See Notes to Financial Statements.
22
<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 YEAR ENDED (COMMENCEMENT OF
ENDED DECEMBER 31, OPERATIONS)
JUNE 30, 1997(i)(ii) 1996 TO DECEMBER 31, 1995(ii)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 19.36 $ 17.43 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------
Net investment (loss) (0.01) (0.03)(iii) (0.03)
Net realized and unrealized gain (loss) on investments 2.51 2.14 7.46
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.50 2.11 7.43
Distribution from net realized gains -- (0.18) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 21.86 $ 19.36 $ 17.43
=========================================================================================================================
Total Return 12.91% 12.04% 74.30%
=========================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $ 47,633 $ 34,925 $ 5,497
=========================================================================================================================
Ratio of expenses excluding interest to
average net assets 0.96% 1.06% 1.50%
=========================================================================================================================
Ratio of expenses including interest to
average net assets 0.97% 1.09% 1.56%
=========================================================================================================================
Decrease reflected in above expense ratios
due to expense reimbursements -- -- 2.36%
=========================================================================================================================
Ratio of net investment (loss) to average net assets (0.12%) (0.15%) (0.71%)
=========================================================================================================================
Portfolio Turnover Rate 70.04% 102.10% 178.23%
=========================================================================================================================
Amount of debt outstanding at end of period -- -- --
=========================================================================================================================
Average amount of debt outstanding during the period $ 28,840 $ 76,079 $ 8,122
=========================================================================================================================
Average daily number of shares outstanding
during the period 2,004,938 1,107,187 75,460
=========================================================================================================================
Average amount of debt per share during the period $ 0.01 $ 0.07 $ 0.11
=========================================================================================================================
Average Commission Rate Paid $ .0716 $ .0682
===============================================================================================
</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.
23
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1997
<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 $1,250,812,485 $1,456,443,710 $35,959,781 $14,624,741 $449,877,873 $48,043,923
Receivable for investment securities
sold 16,788,875 5,269,061 920,367 111,537 482,459 1,326,791
Receivable for shares of beneficial
interest sold 1,505,302 1,341,250 159,698 16,978 3,411,311 375,569
Interest and dividends receivable 542,108 444,267 26,208 57,122 110,753 17,481
Other assets 23,041 36,774 477 275 10,337 614
- -----------------------------------------------------------------------------------------------------------------------------------
Total Assets 1,269,671,811 1,463,535,062 37,066,531 14,810,653 453,892,733 49,764,378
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities loaned 38,156,667 -- 819,849 114,490 -- 622,198
Payable for investment securities
purchased 39,544,992 9,001,764 841,864 727,833 15,315,358 1,458,187
Payable for shares of beneficial
interest redeemed 1,124,837 4,821,761 -- 15,169 2,208,961 5,046
Accrued investment management fees 739,961 1,023,557 17,729 8,621 295,463 32,618
Accrued expenses 80,021 103,085 7,236 7,635 36,200 13,003
- -----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 79,646,478 14,950,167 1,686,678 873,748 17,855,982 2,131,052
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $1,190,025,333 $1,448,584,895 $35,379,853 $13,936,905 $436,036,751 $47,633,326
===================================================================================================================================
NET ASSETS CONSIST OF:
Paid-in capital $902,523,744 $1,253,065,638 $26,875,361 $11,726,922 $359,752,940 $40,886,389
Undistributed net investment
income (accumulated loss) 1,605,811 (6,643,593) 108,086 122,207 (423,675) (64,211)
Undistributed net realized gain
(accumulated loss) 59,923,306 (109,029,080) 1,561,299 483,761 11,822,939 (1,120,367)
Net unrealized appreciation 225,972,472 311,191,930 6,835,107 1,604,015 64,884,547 7,931,515
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $1,190,025,333 $1,448,584,895 $35,379,853 $13,936,905 $436,036,751 $47,633,326
===================================================================================================================================
Shares of beneficial interest
outstanding--Note 6 30,106,049 36,640,885 3,595,363 1,387,296 19,369,988 2,179,222
===================================================================================================================================
NET ASSET VALUE PER SHARE $39.53 $39.53 $9.84 $10.05 $22.51 $21.86
===================================================================================================================================
*Identified cost $1,024,840,013 $1,145,251,780 $29,124,674 $13,020,726 $384,993,326 $40,112,408
===================================================================================================================================
</TABLE>
24
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997
<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 $ 1,749,552 $ 2,820,577 $ 38,354 $ 163,575 $ 807,676 $ 37,187
Dividends 4,053,384 2,143,484 159,107 27,486 772,707 130,673
- ---------------------------------------------------------------------------------------------------------------------------
Total Income 5,802,936 4,964,061 197,461 191,061 1,580,383 167,860
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Management fees-- Note 3(a) 3,998,271 5,789,738 83,152 44,577 1,608,483 168,543
Interest expense -- -- -- -- -- 1,201
Custodian fees 119,146 174,465 8,940 10,060 55,530 13,545
Transfer Agent fees 1,240 1,240 1,240 1,240 1,240 1,240
Professional fees 23,738 31,370 2,214 2,699 10,401 2,760
Trustees' fees 1,984 1,984 1,984 1,984 1,984 1,984
Miscellaneous 37,641 48,229 1,207 975 12,942 2,431
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses 4,182,020 6,047,026 98,737 61,535 1,690,580 191,704
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income
(Loss) 1,620,916 (1,082,965) 98,724 129,526 (110,197) (23,844)
- ---------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss)
on investments 61,469,106 (101,456,791) 1,575,099 485,618 12,166,866 (369,850)
Net change in
unrealized appreciation
(depreciation)
on investments 97,016,112 110,155,341 3,832,279 768,043 16,144,064 5,498,877
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gain
on investments 158,485,218 8,698,550 5,407,378 1,253,661 28,310,930 5,129,027
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET
ASSETS RESULTING
FROM OPERATIONS $160,106,134 $ 7,615,585 $5,506,102 $1,383,187 $28,200,733 $5,105,183
===========================================================================================================================
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997
================================================================================
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH:
Cash flows from operating activities:
Interest received $ 35,493
Dividends received 124,085
Interest paid (6,084)
Operating expenses paid (184,063)
Disposition (purchase) of short-term securities, net (308,440)
Purchase of portfolio securities (33,054,727)
Proceeds from disposition of portfolio securities 26,108,021
Other (155)
- -------------------------------------------------------------------------------
Net cash provided by (used in) operating activities (7,285,870)
- -------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from shares sold 15,257,178
Payments on shares redeemed (7,679,070)
Decrease in cash collateral received on securities loaned (292,238)
- -------------------------------------------------------------------------------
Net cash provided by financing activities 7,285,870
- -------------------------------------------------------------------------------
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 $5,105,183
Increase in investments (7,504,908)
Increase in receivable for investments sold (1,208,424)
Increase in interest and dividends receivable (8,282)
Increase in payable for investments purchased 1,458,187
Net realized loss 369,850
Net increase in unrealized appreciation (5,498,877)
Increase in accrued expenses 1,557
Net increase in other assets (156)
- -------------------------------------------------------------------------------
Net cash used in operating activities $ (7,285,870)
===============================================================================
See Notes to Financial Statements.
26
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997
<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>
Net investment income (loss) $ 1,620,916 $ (1,082,965) $ 98,724 $ 129,526 $ (110,197) $ (23,844)
Net realized gain (loss) on investments 61,469,106 (101,456,791) 1,575,099 485,618 12,166,866 (369,850)
Net change in unrealized appreciation
on investments 97,016,112 110,155,341 3,832,279 768,043 16,144,064 5,498,877
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 160,106,134 7,615,585 5,506,102 1,383,187 28,200,733 5,105,183
Dividends to shareholders:
Net investment income (3,760,721) -- (141,500) (155,278) (250,596) --
Net realized gains (6,810,754) (54,749,439) (1,170,590) (210,546) (6,110,692) --
Net increase from shares
of beneficial interest
transactions-- Note 6 49,462,306 26,200,280 10,275,601 2,433,858 19,350,572 7,602,873
- ---------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) 198,996,965 (20,933,574) 14,469,613 3,451,221 41,190,017 12,708,056
Net Assets
Beginning of period 991,028,368 1,469,518,469 20,910,240 10,485,684 394,846,734 34,925,270
- ---------------------------------------------------------------------------------------------------------------------------------
End of period $1,190,025,333 $1,448,584,895 $35,379,853 $13,936,905 $436,036,751 $47,633,326
=================================================================================================================================
Undistributed net investment
income (accumulated loss) $ 1,605,811 $ (6,643,593) $ 108,086 $ 122,207 $ (423,675) $ (64,211)
=================================================================================================================================
27
</TABLE>
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 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>
Net investment income (loss) $ 3,757,275 $ (1,171,148) $ 139,955 $ 153,453 $ 241,899 $ (32,302)
Net realized gain (loss) on investments 10,026,741 74,215,000 1,169,219 215,191 9,953,972 (496,035)
Net change in unrealized appreciation
(depreciation) on investments 75,821,385 (40,231,403) 1,638,507 327,089 17,131,537 2,028,927
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 89,605,401 32,812,449 2,947,681 695,733 27,327,408 1,500,590
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)
Additional paid-in capital -- 1,653,352 -- -- -- --
Net increase from
shares of beneficial
interest transactions-- Note 6 418,369,211 455,713,242 17,210,684 8,616,721 187,673,423 28,072,726
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase 488,054,829 485,306,321 12,270,781 6,814,515 209,497,971 29,428,184
Net Assets
Beginning of year 502,973,539 984,212,148 8,639,459 3,671,169 185,348,763 5,497,086
- -----------------------------------------------------------------------------------------------------------------------------------
End of year $991,028,368 $1,469,518,469 $20,910,240 $10,485,684 $394,846,734 $34,925,270
===================================================================================================================================
Undistributed net investment income
(accumulated loss) $ 3,745,616 $ (5,560,628) $ 150,862 $ 147,959 $ (62,882) $ (40,367)
===================================================================================================================================
</TABLE>
28
<PAGE>
THE ALGER AMERICAN FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30,1997
================================================================================
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. The Portfolios earn fees on the securities loaned
which are included in interest income in the accompanying Statements of
Operations. In order to protect against the risk of failure by the borrower to
return the securities loaned or any delay in the delivery of such securities,
the 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, 1997, the value of securities loaned and collateral
received thereon were as follows:
VALUE OF
SECURITIES VALUE OF
LOANED COLLATERAL
---------- ----------
American Growth Portfolio ................ $ 37,140,631 $ 38,156,667
American Small Capitalization
Portfolio ............................. 4,849,468 4,849,500
American Income and Growth
Portfolio ............................. 799,617 819,849
American Balanced Portfolio .............. 110,538 114,490
American MidCap Growth
Portfolio ............................. -- --
American Leveraged AllCap
Portfolio ............................. 609,642 622,198
(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 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. At December 31, 1996, the net capital loss carryforward of the
American Leveraged AllCap Portfolio which may be used to offset future net
realized gains was approximately $678,000, and expires in 2004.
29
<PAGE>
THE ALGER AMERICAN FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONT'D)
JUNE 30,1997
================================================================================
(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, 1997, 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.") $1,359,457, $1,451,916, $47,272, $10,806, $631,948
and $59,736, 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, 1997, Alger Inc. and affiliates owned 36,459 shares, 22,616 shares,
2,961 shares, 2,449 shares, 1 share, and 24,714 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.
During the year ended December 31, 1996, Alger Management contributed additional
paid-in capital of approximately $1,653,000 to the American Small Capitalization
Portfolio for the purpose of correcting an error.
NOTE 4--SECURITIES TRANSACTIONS:
Purchases and sales of securities, other than short-term securities, for the six
months ended June 30, 1997, were as follows:
PURCHASES SALES
--------- -----
American Growth Portfolio $ 672,188,615 $ 617,441,111
American Small Capitalization
Portfolio ........................... 808,766,998 803,255,071
American Income and Growth
Portfolio ........................... 23,937,247 15,996,772
American Balanced Portfolio ............ 6,855,912 4,911,290
American MidCap Growth
Portfolio ........................... 339,242,682 320,463,732
American Leveraged AllCap
Portfolio ........................... 34,512,914 27,316,473
NOTE 5--LINE-OF-CREDIT:
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. During the six months ended June 30, 1997, the American Leveraged AllCap
Portfolio had borrowings which averaged $28,840 at a weighted average interest
rate of 8.28%.
NOTE 6--SHARE CAPITAL:
The Fund has an unlimited number of authorized shares of beneficial interest of
$.001 par value.
30
<PAGE>
THE ALGER AMERICAN FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONT'D)
JUNE 30,1997
================================================================================
During the six months ended June 30, 1997, transactions of shares of beneficial
interest were as follows:
SHARES AMOUNT
------ ------
American Growth
Portfolio:
Shares sold ............................ 8,703,428 $ 318,596,995
Dividends reinvested ................... 283,342 10,571,475
----------- -------------
8,986,770 329,168,470
Shares redeemed ........................ (7,749,195) (279,706,164)
----------- -------------
Net increase .......................... 1,237,575 $ 49,462,306
=========== =============
SHARES AMOUNT
------ ------
American Small Capitalization
Portfolio:
Shares sold ............................ 9,249,561 $ 355,752,842
Dividends reinvested ................... 1,463,106 54,749,439
----------- -------------
10,712,667 410,502,281
Shares redeemed ........................ (9,996,472) (384,302,001)
----------- -------------
Net increase .......................... 716,195 $ 26,200,280
=========== =============
SHARES AMOUNT
------ ------
American Income and Growth
Portfolio:
Shares sold ............................ 1,634,274 $ 14,930,965
Dividends reinvested ................... 142,001 1,312,090
----------- -------------
1,776,275 16,243,055
Shares redeemed ........................ (663,395) (5,967,454)
----------- -------------
Net increase .......................... 1,112,880 $ 10,275,601
=========== =============
SHARES AMOUNT
------ ------
American Balanced
Portfolio:
Shares sold ............................ 318,829 $ 3,061,452
Dividends reinvested ................... 38,027 365,824
----------- -------------
356,856 3,427,276
Shares redeemed ........................ (104,052) (993,418)
----------- -------------
Net increase .......................... 252,804 $ 2,433,858
=========== =============
SHARES AMOUNT
------ ------
American MidCap Growth
Portfolio:
Shares sold ............................ 7,959,105 $ 170,125,162
Dividends reinvested ................... 297,953 6,361,288
----------- -------------
8,257,058 176,486,450
Shares redeemed ........................ (7,381,326) (157,135,878)
----------- -------------
Net increase .......................... 875,732 $ 19,350,572
=========== =============
SHARES AMOUNT
------ ------
American Leveraged AllCap
Portfolio:
Shares sold ............................ 761,980 $ 15,285,892
Shares redeemed ........................ (386,636) (7,683,019)
----------- -------------
Net increase .......................... 375,344 $ 7,602,873
=========== =============
During the year ended December 31, 1996, transactions of shares of beneficial
interest were as follows:
SHARES AMOUNT
------ ------
American Growth
Portfolio:
Shares sold ............................ 19,647,051 $ 642,965,537
Dividends reinvested ................... 603,264 19,919,783
----------- -------------
20,250,315 662,885,320
Shares redeemed ........................ (7,525,422) (244,516,109)
----------- -------------
Net increase .......................... 12,724,893 $ 418,369,211
=========== =============
SHARES AMOUNT
------ ------
American Small Capitalization
Portfolio:
Shares sold ............................ 23,962,644 $ 986,432,069
Dividends reinvested ................... 107,827 4,872,722
----------- -------------
24,070,471 991,304,791
Shares redeemed ........................ (13,122,238) (535,591,549)
----------- -------------
Net increase .......................... 10,948,233 $ 455,713,242
=========== =============
SHARES AMOUNT
------ ------
American Income and Growth
Portfolio:
Shares sold ............................ 1,280,083 $ 12,357,144
Dividends reinvested ................... 1,064,451 7,887,584
----------- -------------
2,344,534 20,244,728
Shares redeemed ........................ (347,790) (3,034,044)
----------- -------------
Net increase .......................... 1,996,744 $ 17,210,684
=========== =============
SHARES AMOUNT
------ ------
American Balanced
Portfolio:
Shares sold ............................ 701,980 $ 7,239,916
Dividends reinvested ................... 278,167 2,497,939
----------- -------------
980,147 9,737,855
Shares redeemed ........................ (114,847) (1,121,134)
----------- -------------
Net increase .......................... 865,300 $ 8,616,721
=========== =============
SHARES AMOUNT
------ ------
American MidCap Growth
Portfolio:
Shares sold ............................ 16,365,480 $ 340,608,341
Dividends reinvested ................... 252,773 5,502,860
----------- -------------
16,618,253 346,111,201
Shares redeemed ........................ (7,657,192) (158,437,778)
----------- -------------
Net increase .......................... 8,961,061 $ 187,673,423
=========== =============
SHARES AMOUNT
------ ------
American Leveraged AllCap
Portfolio:
Shares sold ............................ 2,109,229 $ 39,694,878
Dividends reinvested ................... 7,221 145,132
----------- -------------
2,116,450 39,840,010
Shares redeemed ........................ (627,954) (11,767,284)
----------- -------------
Net increase .......................... 1,488,496 $ 28,072,726
=========== =============
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