================================================================================
THE |
ALGER | MEETING THE CHALLENGE
AMERICAN | OF INVESTING
FUND |
ALGER AMERICAN
GROWTH PORTFOLIO
ALGER AMERICAN
SMALL CAPITALIZATION PORTFOLIO
ALGER AMERICAN
INCOME AND GROWTH PORTFOLIO
ALGER AMERICAN
BALANCED PORTFOLIO
ALGER AMERICAN
MIDCAP GROWTH PORTFOLIO
ALGER AMERICAN
LEVERAGED ALLCAP PORTFOLIO
SEMI-ANNUAL | JUNE 30, 1999
REPORT | (UNAUDITED)
================================================================================
<PAGE>
Fellow Shareholders: AUGUST 4, 1999
YEAR-TO-DATE REVIEW
Continued strength in the U.S. economy contributed both to further gains in the
equity markets and to increased market volatility through the second quarter of
1999. Gross Domestic Product grew 2.3% during the second quarter, a markedly
slower pace than the 4.3% gain realized through March. With consumer spending
still strong, business investment advancing, and low unemployment, the Federal
Reserve Open-Market Committee (FOMC) adopted a "tightening bias" in May and
announced a 25-basis point hike in short-term interest rates at the end of June.
In the face of uncertainty about interest rates and profit-taking on large
capitalization stocks, the S&P 500 posted three dips of 5% or more in the first
half of the year. At the end of June, however, equity markets soared on the FOMC
announcement, ending the second quarter near record highs. The main reason for
this surge was that the Fed officially returned to a "neutral bias". Through
July, news of stronger-than-expected increases in consumer credit, retail sales,
and new home sales bolstered confidence that the economy continues to steam
along. At the same time, these indicators may have raised investors' uncertainty
about the future direction of interest rates, contributing to the 3.2% decline
in the S&P 500 in July. In the fixed-income markets, yields on long-term
government issues rose from 5.06% at the end of 1998 to 6.04% at the end of
June, and hovered near 6% through July.
Overseas, it seems that the Asian financial crisis, which began more than two
years ago, is behind us. While U.S. exports to the region have not yet staged a
sustained turnaround, many analysts expect to see better numbers by the end of
this year. Moreover, business sentiment is changing for the better in most Asian
countries as stock markets across the region are up when compared with their
levels at the end of last year.
History shows that our current period of sustained economic growth is truly
quite rare. For that reason, it may be prudent for policymakers, market experts,
and individuals alike to keep a watchful eye on influences that can potentially
derail this economic locomotive.
In raising interest rates, the Federal Reserve continues to pursue its goal of
sustaining growth while keeping inflation in check. Aside from hints that
housing may be leveling off, most likely due to the interest rate hike, there
are few negative signs for this record-breaking expansion.
Respectfully submitted,
/s/David D. Alger
-----------------
David D. Alger
President
1
<PAGE>
TABLE OF CONTENTS
Alger American Growth Portfolio:
Schedule of Investments .......................................... 3
Financial Highlights ............................................. 5
Alger American Small Capitalization Portfolio:
Schedule of Investments .......................................... 6
Financial Highlights ............................................. 8
Alger American Income and Growth Portfolio:
Schedule of Investments .......................................... 9
Financial Highlights ............................................. 11
Alger American Balanced Portfolio:
Schedule of Investments .......................................... 12
Financial Highlights ............................................. 15
Alger American MidCap Growth Portfolio:
Schedule of Investments .......................................... 16
Financial Highlights ............................................. 18
Alger American Leveraged AllCap Portfolio:
Schedule of Investments .......................................... 19
Financial Highlights ............................................. 21
Statements of Assets and Liabilities ...................................... 22
Statements of Operations .................................................. 23
Statement of Cash Flows (Alger American Leveraged AllCap Portfolio) ....... 24
Statements of Changes in Net Assets ....................................... 25
Notes to Financial Statements ............................................. 26
2
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS--96.6% VALUE
------ -----
ADVERTISING--.5%
170,600 Omnicom Group Inc. ....................... $13,648,000
--------------
AEROSPACE--3.8%
429,600 AlliedSignal Inc.+ ....................... 27,064,800
1,146,200 United Technologies Corp.+ ............... 82,168,786
--------------
109,233,586
--------------
AIRLINES--.4%
359,000 Southwest Airlines Co. ................... 11,173,875
--------------
AUTOMOTIVE--.9%
495,300 Harley Davidson, Inc.+ ................... 26,931,938
--------------
BIO-TECHNOLOGY--2.7%
1,249,100 Amgen Inc.* .............................. 76,038,963
--------------
BUSINESS SERVICES--3.3%
450,000 Ceridian Corp.* .......................... 14,709,600
498,000 Cintas Corp. ............................. 33,459,624
1,379,700 IMS Health Inc. .......................... 43,115,625
--------------
91,284,849
--------------
COMMUNICATION EQUIPMENT--7.3%
1,379,800 Cisco Systems, Inc.* ..................... 88,910,863
712,100 Corning Inc. ............................. 49,936,013
732,500 Motorola, Inc. ........................... 69,404,375
--------------
208,251,251
--------------
COMMUNICATIONS--16.0%
812,700 America Online Inc.* ..................... 89,803,350
699,750 At Home Corp. Series. A.* ................ 37,743,116
192,300 Broadcast.com Inc.* ...................... 25,684,165
1,003,600 Comcast Corp. Cl. A. Special ............. 38,576,377
338,100 COX Communications Inc. Cl. A.*+ ......... 12,446,475
806,700 Frontier Corp. ........................... 47,595,300
243,065 Lucent Technologies Inc. ................. 16,391,817
970,200 MCI Worldcom Inc.* ....................... 83,497,838
1,014,900 MediaOne Group Inc.* ..................... 75,483,188
259,100 Nextel Communications Inc Cl.A.*+ ........ 13,003,711
250,500 SBC Communications Inc. .................. 14,529,000
--------------
454,754,337
--------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--5.6%
1,158,200 Dell Computer Corp.* ..................... 42,853,400
463,200 International Business Machines Corp. .... 59,868,600
833,900 Sun Microsystems Inc.* ................... 57,434,863
--------------
160,156,863
--------------
COMPUTER SERVICES--.8%
145,700 eBay Inc.* ............................... 22,055,338
--------------
SHARES VALUE
------ -----
COMPUTER SOFTWARE--4.9%
199,700 Intuit Inc.* ............................. $17,997,963
1,351,200 Microsoft Corporation* ................... 121,862,026
--------------
139,859,989
--------------
CONGLOMERATE--3.5%
1,048,380 Tyco International Ltd. .................. 99,334,005
--------------
ENERGY & ENERGY SERVICES--.9%
527,500 Halliburton Co. .......................... 23,869,375
--------------
FINANCIAL SERVICES--12.9%
152,400 American Express Co. ..................... 19,831,050
469,900 Bank of America Corp. .................... 34,449,779
1,814,550 Citigroup Inc. ........................... 86,191,125
579,800 Federal Home Loan Mortgage Corporation ... 33,628,400
110,200 The Goldman Sachs Group, Inc.* ........... 7,961,950
886,900 Household International Inc. ............. 42,016,888
459,100 Kansas City Southern Industries Inc.+ .... 29,296,548
212,500 Mercantile Bancorporation ................ 12,139,063
857,300 Morgan Stanley Dean Witter & Co.+ ........ 87,873,250
143,000 State Street Corp. ....................... 12,208,625
--------------
365,596,678
--------------
FOOD CHAINS--5.4%
2,530,400 Kroger Co.* .............................. 70,694,315
1,658,100 Safeway Inc.* ............................ 82,075,950
--------------
152,770,265
--------------
FOODS & BEVERAGES--.6%
394,300 Starbucks Corp.* ......................... 14,811,091
--------------
INSURANCE--2.7%
665,987 American International Group, Inc. ....... 77,962,436
--------------
LEISURE & ENTERTAINMENT--.9%
511,400 Carnival Corp. ........................... 24,802,900
--------------
MANUFACTURING--.5%
230,500 Solectron Corp.* ......................... 15,371,584
--------------
MEDICAL DEVICES--1.7%
1,118,600 Boston Scientific Corp.*+ ................ 49,149,047
--------------
PHARMACEUTICALS--3.3%
117,100 Pfizer Inc. .............................. 12,851,725
403,600 SmithKline Beecham PLC ADS ............... 26,663,027
771,900 Warner-Lambert Co. ....................... 53,550,563
--------------
93,065,315
--------------
3
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1999 (UNAUDITED) (CONT'D)
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS (CONT'D) VALUE
------ -----
RETAILING--9.9%
320,800 Abercrombie & Fitch Co., Cl.A.* .......... $15,398,400
184,200 Amazon.com Inc.*+ ........................ 23,048,025
232,600 Best Buy Company Inc.* ................... 15,700,500
195,400 CVS Corp. ................................ 9,916,550
390,900 Costco Companies Inc.* ................... 31,296,627
1,087,500 Home Depot, Inc. ......................... 70,076,325
1,122,600 Office Depot Inc.* ....................... 24,767,924
961,000 Staples Inc.* ............................ 29,731,418
1,284,400 Wal-Mart Stores Inc. ..................... 61,972,300
--------------
281,908,069
--------------
SEMICONDUCTORS--4.2%
361,000 Altera Corporation* ...................... 13,289,493
750,700 Intel Corp. .............................. 44,666,650
375,200 Linear Technology Corporation ............ 25,232,200
99,300 Texas Instruments, Incorporated .......... 14,398,500
379,400 Xilinx, Inc.* ............................ 21,720,650
--------------
119,307,493
--------------
SEMICONDUCTOR CAPITAL EQUIPMENT--3.9%
1,299,500 Applied Materials Inc.* .................. 96,000,563
202,500 Teradyne, Inc.* .......................... 14,529,375
--------------
110,529,938
--------------
TOTAL COMMON STOCKS
(COST $2,130,689,101) 2,741,867,185
-----------
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--6.1% VALUE
------ -----
SHORT-TERM CORPORATE NOTES--5.3%
$18,000,000 Austra Corp., 5.35%, 7/12/99(a) .......... $17,970,575
50,000,000 Merrill Lynch & Co. Inc., 5.25%, 7/12/99 . 49,919,793
15,000,000 Toyota Motor Corp. (Of Puerto Rico),
5.05%, 7/16/99 ......................... 67,870,347
68,000,000 Toys R Us Inc., 5.28%, 7/14/99 ........... 14,968,438
--------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $150,729,153) .................... 150,729,153
-----------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--.8%
Securities Held Under Repurchase
Agreements, 4.80%-5.875%, 7/1/99, with
Bear, Stearns & Co. Inc., dtd 6/30/99,
repurchase price $22,960,433;
collateralized by U.S. Treasury Notes
(total par value $21,585,000 due
5/15-11/15/04) ......................... 22,957,347
--------------
TOTAL SHORT-TERM INVESTMENTS
(COST $173,686,500) .................... 173,686,500
--------------
TOTAL INVESTMENTS
(Cost $2,304,375,601)(b) ......................... 102.7% 2,915,553,685
Liabilities in Excess Of Other Assets .............. (2.7) (75,718,618)
----- --------------
NET ASSETS 100.0% .................................. 100.0% $2,839,835,067
===== ==============
* 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, 1999, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $2,304,375,601, amounted to
$611,178,084 which consisted of aggregate gross unrealized appreciation of
$623,753,769 and aggregate gross unrealized depreciation of $12,575,685.
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, 1999(I) 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $53.22 $42.76 $34.33 $31.16 $23.13 $24.67
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.03) 0.09 0.13 0.12 0.02 0.07
Net realized and unrealized
gain on investments 8.12 18.32 8.66 4.00 8.33 0.15
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 8.09 18.41 8.79 4.12 8.35 0.22
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.08) (0.13) (0.13) (0.02) (0.07) (0.03)
Distributions from net realized gains (5.39) (7.82) (0.23) (0.93) (0.25) (1.73)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (5.47) (7.95) (0.36) (0.95) (0.32) (1.76)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $55.84 $53.22 $42.76 $34.33 $31.16 $23.13
====================================================================================================================================
Total Return 16.00% 48.07% 25.75% 13.35% 36.37% 1.45%
====================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) $2,839,835 $1,905,719 $1,072,529 $991,028 $502,974 $150,390
====================================================================================================================================
Ratio of expenses to average net assets 0.79% 0.79% 0.79% 0.79% 0.85% 0.86%
====================================================================================================================================
Ratio of net investment income (loss)
to average net assets (0.07)% 0.25% 0.27% 0.50% 0.18% 0.48%
====================================================================================================================================
Portfolio Turnover Rate 62.90% 127.38% 129.50% 82.86% 118.33% 111.76%
====================================================================================================================================
(i) Unaudited. Ratios have been annualized; total return has not been annualized.
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1999 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS--91.6% VALUE
------ -----
ADVERTISING--3.9%
256,050 Outdoor Systems, Inc.* ......................... $ 9,345,825
289,100 Young & Rubicam Inc.+ .......................... 13,136,126
--------------
22,481,951
--------------
AIRLINES--1.2%
278,500 SkyWest Inc. ................................... 6,945,233
-----------
AUTOMOTIVE EQUIPMENT &
SERVICES--1.3%
190,000 Speedway Motorsports Inc.* ..................... 7,469,470
-----------
BIO-TECHNOLOGY--4.8%
237,800 IDEC Pharmaceuticals Corporation*+ ............. 18,325,581
131,900 Medimmune Inc.* ................................ 8,936,225
--------------
27,261,806
--------------
BROADCASTING--1.0%
118,500 Emmis Communications Corporation, Cl A.*+ ...... 5,850,938
--------------
BUILDING & CONSTRUCTION--.9%
266,300 Champion Enterprises Inc.* ..................... 4,959,838
--------------
BUSINESS SERVICES--11.6%
252,400 BISYS Group Inc.* .............................. 14,765,400
80,300 Catalina Marketing Corp.* ...................... 7,387,600
121,500 F.Y.I. Incorporated*+ .......................... 3,812,063
187,200 FactSet Research Systems Inc. .................. 10,600,200
92,500 Fiserv Inc.* ................................... 2,896,453
400,000 Paymentech Inc.* ............................... 10,150,000
208,800 Quanta Services Inc.* .......................... 9,187,200
315,400 Rent-Way Inc.*+ ................................ 7,766,725
--------------
66,565,641
--------------
COMMUNICATION EQUIPMENT--4.2%
133,500 Aware Inc.* .................................... 6,157,688
220,050 Dycom Industries Inc.* ......................... 12,322,800
119,000 L-3 Communications Holdings, Inc.* ............. 5,749,247
--------------
24,229,735
--------------
COMMUNICATIONS--1.6%
50,000 Broadcast.com Inc.* ............................ 6,678,150
50,000 McLeodUSA Inc. Cl. A.*+ ........................ 2,750,000
--------------
9,428,150
--------------
COMPUTER RELATED & BUSINESS EQUIPMENT--4.2%
482,400 Antec Corp.* ................................... 15,467,191
180,000 Dupont Photomasks Inc.* ........................ 8,617,500
--------------
24,084,691
--------------
COMPUTER SERVICES--5.6%
100,000 CNET Inc.*+ .................................... 5,762,500
74,900 eBay Inc.* ..................................... 11,337,988
194,700 QRS Corp.*+ .................................... 15,186,600
--------------
32,287,088
--------------
SHARES VALUE
------ -----
COMPUTER SOFTWARE--4.7%
121,000 Advent Software Inc.* .......................... $ 8,107,000
185,200 Dendrite International Inc.* ................... 6,690,350
133,500 Intuit Inc.* ................................... 12,031,688
--------------
26,829,038
--------------
CONSUMER PRODUCTS--4.2%
39,700 Furniture Brands International Inc.* ........... 1,106,638
208,800 Mettler-Toledo International. Inc.*+ ........... 5,180,954
91,700 Movado Group Inc. .............................. 2,372,738
309,200 Pittway Corp. Cl. A ............................ 10,570,930
302,200 Playtex Products Inc.*+ ........................ 4,703,139
--------------
23,934,399
--------------
FOODS & BEVERAGES--3.8%
223,000 Beringer Wine Estates Holdings Cl.B.*+ ......... 9,317,163
104,400 Church & Dwight Co. Inc. ....................... 4,541,400
205,200 Starbucks Corp.* ............................... 7,707,928
--------------
21,566,491
--------------
LEISURE & ENTERTAINMENT--1.0%
155,000 Cinar Corporation Cl. B.* ...................... 3,797,500
100,000 Mandalay Resort Group* ......................... 2,112,500
--------------
5,910,000
--------------
MEDICAL SERVICES--7.2%
66,667 Bindley Western Industry Inc. .................. 1,537,533
178,900 CONMED Corporation* ............................ 5,478,813
360,600 Hooper Holmes Inc. ............................. 7,347,225
407,500 LCA-Vision Inc.* ............................... 3,794,844
393,100 MedQuist Inc.* ................................. 17,198,125
123,000 Perclose, Inc.*+ ............................... 5,911,749
--------------
41,268,289
--------------
OIL & GAS--.5%
275,000 Varco International Inc.* ...................... 3,007,963
--------------
PERSONAL CARE--1.0%
287,750 Regis Corp. .................................... 5,521,347
--------------
RESTAURANTS & LODGING--2.0%
288,150 Outback Steakhouse, Inc.* ...................... 11,328,041
--------------
RETAILING--17.5%
87,600 Amazon.com Inc.* ............................... 10,960,950
500,000 BJ's Wholesale Club Inc.*+ ..................... 15,031,500
305,800 Bed Bath & Beyond Inc.* ........................ 11,773,300
123,500 CSK Auto Corp.*+ ............................... 3,334,500
338,300 Ethan Allen Interiors Inc. ..................... 12,770,825
433,300 Family Dollar Stores Inc. ...................... 10,399,200
366,100 Linens'n Things Inc.* .......................... 16,016,875
142,900 Mens Wearhouse Inc.*+ .......................... 3,643,950
87,750 Pacific Sunwear of California Inc.* ............ 2,138,906
See Notes to Financial Statements.
6
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1999 (UNAUDITED) (CONT'D)
================================================================================
SHARES COMMON STOCKS (CONT'D) VALUE
------ -----
RETAILING (CONT'D)
393,000 Stride Rite Corp. .............................. $ 4,053,009
120,500 Tweeter Home Entertainment Group Inc.* ......... 4,729,625
148,700 Williams Sonoma Inc.*+ ......................... 5,176,693
--------------
100,029,333
--------------
SEMICONDUCTORS--2.3%
112,500 Dallas Semiconductor Corp. ..................... 5,681,250
117,600 Lattice Semiconductor Corp.*+ .................. 7,320,600
--------------
13,001,850
--------------
SEMICONDUCTOR CAPITAL
EQUIPMENT--3.9%
183,500 ASM Lithography Holding NV* .................... 10,895,313
135,000 Atmi Inc.*+ .................................... 4,016,250
196,400 PRI Automation, Inc.*+ ......................... 7,119,500
--------------
22,031,063
--------------
TRANSPORTATION--1.2%
167,200 Coach USA Inc.* ................................ 7,012,034
--------------
MISCELLANEOUS--2.0%
404,000 Coinstar Inc.* ................................. 11,589,952
--------------
TOTAL COMMON STOCKS
(COST $394,465,642) 524,594,341
--------------
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--7.8% VALUE
------ -----
SHORT-TERM CORPORATE NOTES--4.4%
$10,000,000 Export Development Corp., 4.77%, 7/2/99 ........ $9,998,671
15,000,000 Merrill Lynch & Co. Inc., 5.25%, 7/12/99 ....... 14,975,934
--------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $24,974,605) 24,974,605
--------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--3.4%
Securities Held Under Repurchase
Agreements, 4.80%-5.875%, 7/1/99, with
Bear, Stearns & Co. Inc., dtd 6/30/99,
repurchase price $19,568,732;
collateralized by U.S. Treasury Notes
(total par value $19,835,000 due 7/15/02) 19,566,069
--------------
TOTAL SHORT-TERM INVESTMENTS
(COST $44,540,674) 44,540,674
--------------
TOTAL INVESTMENTS
(COST $439,006,316)(A) 99.4% 569,135,015
Other Assets in Excess of Liabilities .6 3,329,409
----- --------------
NET ASSETS 100.0% $572,464,424
===== ==============
- --------------------------------------------------------------------------------
* Non-income producing security.
+ Securities partially or fully on loan.
(a) At June 30, 1999, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $439,006,316, amounted to
$130,128,699 which consisted of aggregate gross unrealized appreciation
of $137,887,395 and aggregate gross unrealized depreciation of
$7,758,696.
7
<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, 1999(I) 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $43.97 $43.75 $40.91 $39.41 $27.31 $30.88
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.04)(ii) (0.02) (0.05)(ii) (0.04)(ii) (0.09) (0.03)(ii)
Net realized and unrealized gain
(loss) on investments 5.33 6.30 4.45 1.70 12.19 (1.45)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 5.29 6.28 4.40 1.66 12.10 (1.48)
Distributions from net realized gains (5.68) (6.06) (1.56) (0.16) -- (2.09)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $43.58 $43.97 $43.75 $40.91 $39.41 $27.31
====================================================================================================================================
Total Return 13.33% 15.53% 11.39% 4.18% 44.31% (4.38%)
====================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $572,464 $1,216,584 $997,586 $1,469,518 $984,212 $397,037
====================================================================================================================================
Ratio of expenses to average net assets 0.89% 0.89% 0.89% 0.88% 0.92% 0.96%
====================================================================================================================================
Ratio of net investment loss to
average net assets (0.19%) (0.20%) (0.12%) (0.09%) (0.48%) (0.10%)
====================================================================================================================================
Portfolio Turnover Rate 95.09% 142.90% 104.43% 110.04% 80.66% 117.61%
====================================================================================================================================
</TABLE>
(i) Unaudited. Ratios have been annualized; total return has not been
annualized.
(ii) Amount was computed based on average shares outstanding during the period.
See Notes to Financial Statements.
8
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1999 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS--97.0% VALUE
------ -----
ADVERTISING--2.2%
30,000 Omnicom Group Inc. ........................ $ 2,400,000
--------------
AEROSPACE--6.2%
52,000 AlliedSignal Inc. ......................... 3,276,000
49,000 United Technologies Corp.+ ................ 3,512,712
--------------
6,788,712
--------------
AUTOMOTIVE EQUIPMENT & SERVICES--.9%
24,300 Speedway Motorsports Inc.* ................ 955,306
--------------
BIO-TECHNOLOGY--1.0%
19,000 Amgen Inc.* ............................... 1,156,625
--------------
BROADCASTING--1.9%
30,000 Clear Channel Communications Inc.* ........ 2,068,140
--------------
BUSINESS SERVICES--1.6%
57,200 IMS Health Inc. ........................... 1,787,500
--------------
COMMUNICATION EQUIPMENT--7.3%
74,000 Cisco Systems, Inc.* ...................... 4,768,375
35,000 Motorola, Inc. ............................ 3,316,250
--------------
8,084,625
--------------
COMMUNICATIONS--12.1%
31,000 America Online Inc.* ...................... 3,425,500
96,000 Comcast Corp. Cl. A. Special .............. 3,690,048
33,000 MCI Worldcom Inc.* ........................ 2,840,063
45,000 Time Warner Inc. .......................... 3,307,500
--------------
13,263,111
--------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--1.9%
57,400 Dell Computer Corp.* ...................... 2,123,800
--------------
COMPUTER SERVICES--2.5%
14,000 eBay Inc.* ................................ 2,119,250
3,700 Yahoo Inc.* ............................... 637,325
--------------
2,756,575
--------------
COMPUTER SOFTWARE--4.2%
51,000 Microsoft Corporation* .................... 4,599,588
--------------
CONGLOMERATE--7.6%
26,000 General Electric Co. ...................... 2,938,000
56,804 Tyco International Ltd. ................... 5,382,179
--------------
8,320,179
--------------
SHARES VALUE
------ -----
ENERGY & ENERGY SERVICES--.5%
12,000 Halliburton Co. ........................... 543,000
--------------
FINANCIAL SERVICES--13.0%
10,000 American Express Co. ...................... 1,301,250
15,000 Bank of America Corp. ..................... 1,099,695
79,500 Citigroup Inc. ............................ 3,776,250
21,000 Fifth Third Bancorp ....................... 1,397,823
46,000 Kansas City Southern Industries Inc.+ ..... 2,935,398
24,000 Mellon Bank Corp. ......................... 873,000
16,000 Morgan Stanley Dean Witter & Co.+ ......... 1,640,000
5,000 Schwab (Charles) Corporation (The) ........ 549,375
8,500 State Street Corp. ........................ 725,688
--------------
14,298,479
--------------
FOOD CHAINS--3.7%
68,000 Kroger Co.* ............................... 1,899,784
45,000 Safeway Inc.* ............................. 2,227,500
--------------
4,127,284
--------------
INSURANCE--3.5%
33,025 American International Group, Inc. ........ 3,866,006
--------------
LEISURE & ENTERTAINMENT--2.4%
54,000 Carnival Corp. ............................ 2,619,000
--------------
PHARMACEUTICALS--3.2%
34,000 Bristol Myers Squibb Co. .................. 2,394,892
21,800 Schering-Plough Corporation+ .............. 1,155,400
--------------
3,550,292
--------------
RETAILING--19.3%
17,000 Amazon.com Inc.* .......................... 2,127,125
26,000 Bed Bath & Beyond Inc.* ................... 1,001,000
37,000 Costco Companies Inc.* .................... 2,962,331
40,000 Dayton-Hudson Corp. ....................... 2,600,000
40,000 Family Dollar Stores Inc. ................. 960,000
52,500 Gap Inc. .................................. 2,644,688
80,000 Home Depot, Inc. .......................... 5,155,040
78,000 Wal-Mart Stores Inc. ...................... 3,763,500
--------------
21,213,684
--------------
SEMICONDUCTORS--2.0%
15,000 Texas Instruments, Incorporated ........... 2,175,000
--------------
TOTAL COMMON STOCKS
(COST $86,287,596) ....................... 106,696,906
--------------
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1999 (UNAUDITED) (CONT'D)
================================================================================
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--7.6% VALUE
-------- -----
SHORT-TERM CORPORATE NOTES--5.4%
$3,000,000 Austra Corp.,5.35%, 7/12/99(a) ............ $ 2,995,094
3,000,000 Toys R Us Inc.,5.28%, 7/14/99 ............. 2,994,279
------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $5,989,373) ....................... 5,989,373
------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--2.2%
Securities Held Under Repurchase
Agreements, 4.80%-5.875%, 7/1/99, with
Bear, Stearns & Co. Inc., dtd 6/30/99,
repurchase price $2,409,737;
collateralized by U.S. Treasury Notes
(total par value $2,445,000 due 7/15/02) 2,409,416
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $8,398,789) 8,398,789
------------
TOTAL INVESTMENTS
(COST $94,686,385)(B) 104.6% 115,095,695
Liabilities in Excess Of Other Assets (4.6) (5,080,173)
----- ------------
NET ASSETS 100.0% $110,015,522
===== ============
- --------------------------------------------------------------------------------
* 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, 1999, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $94,686,385, amounted to
$20,409,310 which consisted of aggregate gross unrealized appreciation of
$21,586,348 and aggregate gross unrealized depreciation of $1,177,038.
10
<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, 1999(I) 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.12 $10.99 $8.42 $17.79 $13.30 $15.31
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.00 0.03 0.03 0.09(ii) 0.11(ii) 0.17
Net realized and unrealized gain
(loss) on investments 1.00 3.30 2.94 1.87 4.54 (1.47)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.00 3.33 2.97 1.96 4.65 (1.30)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.03) (0.04) (0.04) (0.33) (0.16) (0.15)
Distributions from net realized gains (0.77) (1.16) (0.36) (11.00) -- (0.56)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.80) (1.20) (0.40) (11.33) (0.16) (0.71)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.32 $13.12 $10.99 $8.42 $17.79 $13.30
====================================================================================================================================
Total Return 7.93% 32.39% 36.29% 19.68% 35.13% (8.28%)
====================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $110,016 $77,926 $47,399 $20,910 $8,639 $29,135
====================================================================================================================================
Ratio of expenses to average net assets 0.69% 0.70% 0.74% 0.81% 0.75% 0.75%
====================================================================================================================================
Ratio of net investment income to average
net assets 0.04% 0.31% 0.56% 0.94% 0.61% 1.22%
====================================================================================================================================
Portfolio Turnover Rate 65.94% 131.67% 150.09% 121.60% 164.05% 177.97%
====================================================================================================================================
</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.
11
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1999 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS--65.4% VALUE
------ -----
ADVERTISING--.3%
1,800 Omnicom Group Inc. ........................ $ 144,000
--------------
AEROSPACE--2.4%
4,200 AlliedSignal Inc.+ ........................ 264,600
10,400 United Technologies Corp.+ ................ 745,555
--------------
1,010,155
--------------
AIRLINES--.3%
3,400 Southwest Airlines Co. .................... 105,825
--------------
AUTOMOTIVE--.6%
4,900 Harley Davidson, Inc. ..................... 266,438
--------------
BIO-TECHNOLOGY--2.1%
12,200 Amgen Inc.* ............................... 742,675
2,200 Biogen Inc.* .............................. 141,489
--------------
884,164
--------------
BUSINESS SERVICES--2.2%
6,600 Ceridian Corp.* ........................... 215,741
4,100 Cintas Corp. .............................. 275,471
13,500 IMS Health Inc. ........................... 421,875
--------------
913,087
--------------
COMMUNICATION EQUIPMENT--4.8%
13,000 Cisco Systems, Inc.* ...................... 837,688
6,800 Corning Inc. .............................. 476,850
7,200 Motorola, Inc. ............................ 682,200
--------------
1,996,738
--------------
COMMUNICATIONS--11.2%
7,800 America Online Inc.* ...................... 861,900
11,026 At Home Corp. Ser. A.* .................... 594,720
2,000 Broadcast.com Inc.* ....................... 267,126
9,000 Comcast Corp. Cl. A. Special .............. 345,942
3,200 COX Communications Inc. Cl. A.*+ .......... 117,802
8,000 Frontier Corp. ............................ 472,000
2,070 Lucent Technologies Inc. .................. 139,597
9,600 MCI Worldcom Inc.* ........................ 826,200
10,200 MediaOne Group Inc.* ...................... 758,625
2,900 Nextel Communications Inc Cl. A.*+ ........ 145,545
2,500 SBC Communications Inc. ................... 145,000
--------------
4,674,457
--------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--3.4%
11,000 Dell Computer Corp.* ...................... 407,000
4,400 International Business Machines Corp. ..... 568,700
6,500 Sun Microsystems Inc.* .................... 447,688
--------------
1,423,388
--------------
COMPUTER SERVICES--1.0%
2,900 eBay Inc.* ................................ 438,988
--------------
SHARES VALUE
------ -----
COMPUTER SOFTWARE--3.3%
1,900 Intuit Inc.* .............................. 171,238
13,500 Microsoft Corporation* .................... 1,217,538
--------------
1,388,776
--------------
CONGLOMERATE--2.4%
10,750 Tyco International Ltd. ................... 1,018,563
--------------
ENERGY & ENERGY SERVICES--.6%
5,900 Halliburton Co. ........................... 266,975
--------------
FINANCIAL SERVICES--9.4%
1,500 American Express Co. ...................... 195,188
5,300 Bank of America Corp. ..................... 388,559
18,000 Citigroup Inc. ............................ 855,000
5,300 Federal Home Loan Mortgage Corporation .... 307,400
9,400 Household International Inc. .............. 445,325
4,500 Kansas City Southern Industries Inc.+ ..... 287,159
2,100 Mercantile Bancorporation ................. 119,963
8,700 Morgan Stanley Dean Witter & Co.+ ......... 891,750
3,300 Paine Webber Group Inc. ................... 154,275
3,200 State Street Corp. ........................ 273,200
--------------
3,917,819
--------------
FOOD CHAINS--3.9%
28,600 Kroger Co.* ............................... 799,027
16,500 Safeway Inc.* ............................. 816,750
--------------
1,615,777
--------------
FOODS & BEVERAGES--.4%
3,900 Starbucks Corp.* .......................... 146,496
--------------
INSURANCE--1.5%
5,390 American International Group, Inc. ........ 630,970
--------------
LEISURE & ENTERTAINMENT--.5%
4,500 Carnival Corp. ............................ 218,250
--------------
MANUFACTURING--.4%
2,300 Solectron Corp.* .......................... 153,382
--------------
MEDICAL DEVICES--1.4%
12,900 Boston Scientific Corp.*+ ................. 566,800
--------------
PHARMACEUTICALS--2.2%
1,200 Pfizer Inc. ............................... 131,700
3,600 SmithKline Beecham PLC ADS ................ 237,827
7,700 Warner-Lambert Co. ........................ 534,188
--------------
903,715
--------------
12
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1999 (UNAUDITED) (CONT'D)
================================================================================
SHARES COMMON STOCK (Cont'd) VALUE
------ -----
RETAILING--6.0%
2,800 Abercrombie & Fitch Co., Cl.A.* ........... $ 134,400
900 Amazon.com Inc.* .......................... 112,613
2,400 Best Buy Company Inc.* .................... 162,000
1,000 CVS Corp. ................................. 50,750
3,900 Costco Companies Inc.* .................... 312,246
10,800 Home Depot, Inc. .......................... 695,930
8,100 Office Depot Inc.* ........................ 178,710
8,350 Staples Inc.* ............................. 258,332
12,600 Wal-Mart Stores Inc. ...................... 607,950
--------------
2,512,931
--------------
SEMICONDUCTORS--2.5%
3,300 Altera Corporation* ....................... 121,483
7,300 Intel Corp. ............................... 434,350
2,100 Linear Technology Corporation ............. 141,225
1,000 Texas Instruments, Incorporated ........... 145,000
3,700 Xilinx, Inc.* ............................. 211,825
--------------
1,053,883
--------------
SEMICONDUCTOR CAPITAL EQUIPMENT--2.6%
12,900 Applied Materials Inc.* ................... 952,988
2,000 Teradyne, Inc.* ........................... 143,500
--------------
1,096,488
--------------
TOTAL COMMON STOCKS
(COST $21,350,561) ...................... 27,348,065
-----------
PRINCIPAL
AMOUNT CORPORATE BONDS--8.3%
--------
AUTOMOTIVE--.5%
$200,000 Ford Capital B.V.,9.50%, 6/1/10 ........... 230,014
--------------
ELECTRIC & GAS COMPANIES--1.1%
100,000 Cincinnati Gas & Electric Co.,
7.20%, 10/1/23 .......................... 95,829
400,000 Potomac Electric Power Co.,
7.00%, 1/15/24 .......................... 369,000
--------------
464,829
--------------
PRINCIPAL
AMOUNT FINANCIAL SERVICES--4.3% VALUE
-------- -----
BankAmerica Corp.,
$200,000 6.625%, 10/15/07 ........................ 192,744
100,000 7.125%, 5/12/05 ......................... 100,439
400,000 Bankers Trust Corp., 7.00%, 3/13/18 ....... 365,156
260,000 Chase Manhattan Corp., 8.50%, 2/15/02 ..... 272,022
200,000 Citicorp., 7.125%, 6/1/03 ................. 202,438
200,000 Merrill Lynch & Company Inc.,
6.75%, 4/30/01 .......................... 201,100
290,000 Morgan Stanley Dean Witter & Co.,
7.50%, 2/1/2 ............................ 273,531
200,000 Transamerica Financial Corp.,
7.85%, 10/21/99 ......................... 201,242
--------------
1,808,672
--------------
INSURANCE--1.1%
500,000 Loews Corp., 7.625%, 6/1/23 ............... 476,180
--------------
LEISURE & ENTERTAINMENT--.7%
300,000 Walt Disney Corp.,+ 6.375%, 3/30/01 ....... 300,900
--------------
POLLUTION CONTROL--.6%
200,000 Waste Management Inc., 8.25%, 11/15/99 .... 201,732
--------------
TOTAL CORPORATE BONDS
(COST $3,732,643) ....................... 3,482,327
-----------
U.S. GOVERNMENT &
AGENCY OBLIGATIONS--8.2%
U.S. Treasury Notes,
200,000 7.50%, 10/31/99 ......................... 201,500
500,000 5.00%, 4/30/01 .......................... 494,065
500,000 5.625%, 2/15/06 ......................... 488,515
255,000 Federal Home Loan Bank Corp.,
6.55%, 9/9/13 ........................... 236,951
600,000 Federal Home Loan Mortgage Corp.,
7.08%, 3/17/14 .......................... 565,878
Federal National Mortgage Association,
200,000 8.50%, 2/1/05 ........................... 202,938
300,000 6.42%, 7/14/08 .......................... 285,984
633,000 7.00%, 3/14/13 .......................... 603,724
400,000 6.75%, 2/4/28 ........................... 361,564
--------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(COST $3,612,111) ....................... 3,441,119
-----------
13
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1999 (UNAUDITED) (CONT'D)
================================================================================
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--20.8% VALUE
-------- -----
SHORT-TERM CORPORATE NOTES--14.3%
$1,500,000 Austra Corp.,5.35%, 7/12/99(a) ............ $ 1,497,548
1,000,000 Hertz Corp.,4.99%, 7/8/99 ................. 999,029
1,500,000 Merrill Lynch & Co. Inc.,
5.25%, 7/12/99 .......................... 1,497,593
1,000,000 Toyota Motor Corp. (Of Puerto Rico),
5.05%, 7/16/99 ........................... 997,896
1,000,000 Toys R Us Inc.,
5.05%, 7/15/99 ........................... 998,036
-----------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $5,990,102) ....................... 5,990,102
-----------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--6.5%
Securities Held Under Repurchase
Agreements, 4.80%-5.875%, 7/1/99, with
Bear, Stearns & Co. Inc., dtd 6/30/99,
repurchase price $2,707,062;
collateralized by U.S. Treasury Notes
(total par value $2,745,000 due 7/15/02) 2,706,692
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $8,696,794) ....................... 8,696,794
-----------
TOTAL INVESTMENTS
(COST $37,392,109)(B) .............................. 102.7% 42,968,305
Liabilities in Excess Of Other Assets ................ (2.7) (1,135,165)
----- -----------
NET ASSETS ........................................... 100.0% $41,833,140
===== ===========
* 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, 1999, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $37,392,109, amounted to $5,576,196
which consisted of aggregate gross unrealized appreciation of $6,140,110
and aggregate gross unrealized depreciation of $563,914.
See Notes to Financial Statements.
14
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
====================================================================================================================================
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ------------------------------------------------------------------
JUNE 30, 1999(I) 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.98 $10.76 $9.24 $13.64 $10.80 $11.58
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.06 0.19 0.17 0.21(ii) 0.33(ii) 0.20
Net realized and unrealized gain
(loss) on investments 1.86 3.02 1.63 1.01 2.73 (0.70)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.92 3.21 1.80 1.22 3.06 (0.50)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.17) (0.18) (0.12) (0.73) (0.22) (0.13)
Distributions from net realized gains (0.84) (0.81) (0.16) (4.89) -- (0.15)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.01) (0.99) (0.28) (5.62) (0.22) (0.28)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.89 $12.98 $10.76 $9.24 $13.64 $10.80
====================================================================================================================================
Total Return 15.27% 31.51% 19.82% 10.17% 28.62% (4.27%)
====================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $41,833 $28,208 $16,614 $10,486 $3,671 $10,394
====================================================================================================================================
Ratio of expenses to average net assets 0.91% 0.92% 1.01% 1.14% 1.00% 1.08%
====================================================================================================================================
Ratio of net investment income to
average net assets 1.56% 2.09% 2.14% 2.06% 2.49% 2.30%
====================================================================================================================================
Portfolio Turnover Rate 60.34% 94.64% 105.01% 68.66% 113.02% 78.80%
====================================================================================================================================
</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.
15
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1999 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS--87.6% VALUE
------ -----
ADVERTISING--.8%
156,200 Young & Rubicam Inc.+ ..................... $ 7,097,416
--------------
AIRLINES--.4%
108,800 Southwest Airlines Co. .................... 3,386,400
--------------
APPAREL--.6%
63,600 Tommy Hilfiger Corporation* ............... 4,674,600
--------------
AUTOMOTIVE--2.2%
330,900 Harley Davidson, Inc. ..................... 17,992,688
--------------
BIO-TECHNOLOGY--2.3%
299,600 Biogen Inc.* .............................. 19,268,175
--------------
BUSINESS SERVICES--8.0%
580,500 Ceridian Corp.* ........................... 18,975,384
349,200 Cintas Corp. .............................. 23,462,050
338,650 Fiserv Inc.* .............................. 10,604,147
426,300 IMS Health Inc.+ .......................... 13,321,875
--------------
66,363,456
--------------
CHEMICALS--.4%
182,500 Lyondell Chemical Co. ..................... 3,764,063
--------------
COMMUNICATION EQUIPMENT--2.2%
198,800 Corning Inc. .............................. 13,940,850
71,700 Flextronics International Ltd.* ........... 3,979,350
--------------
17,920,200
--------------
COMMUNICATIONS--7.2%
297,564 At Home Corp. Ser. A.* .................... 16,050,007
156,400 Broadcast.com Inc.* ....................... 20,889,253
384,800 Frontier Corp. ............................ 22,703,200
--------------
59,642,460
--------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--3.2%
750,000 Quantum Corp.* ............................ 18,093,750
110,100 Sanmina Corporation* ...................... 8,353,838
--------------
26,447,588
--------------
COMPUTER SERVICES--4.9%
172,500 Amdocs Limited*+ .......................... 3,924,375
330,600 CNET Inc.*+ ............................... 19,050,825
85,200 eBay Inc.* ................................ 12,897,150
42,600 Exodus Communications, Inc.* .............. 5,109,359
--------------
40,981,709
--------------
COMPUTER SOFTWARE--3.4%
79,700 BMC Software Inc.* ........................ 4,303,800
267,800 Intuit Inc.* .............................. 24,135,475
--------------
28,439,275
--------------
DRUG DISTRIBUTION--.6%
186,000 AmeriSource Health Corp Cl.A.* ............ 4,743,000
--------------
FINANCIAL SERVICES--8.0%
264,100 Charter One Financial Inc. ................ 7,345,413
236,000 Dime Bancorp Inc.+ ........................ 4,749,500
155,500 Golden State Bancorp Inc.*+ ............... 3,421,000
387,300 Kansas City Southern Industries Inc.+ ..... 24,714,775
168,000 Mercantile Bancorporation ................. 9,597,000
344,250 Paine Webber Group Inc. ................... 16,093,688
--------------
65,921,376
--------------
FOODS & BEVERAGES--3.3%
553,400 Starbucks Corp.* .......................... 20,787,364
148,000 U.S. Foodservice* ......................... 6,308,500
--------------
27,095,864
--------------
INDUSTRIAL EQUIPMENT--1.0%
165,000 Waters Corp.* ............................. 8,765,625
--------------
LEISURE & ENTERTAINMENT--.4%
138,100 Mandalay Resort Group* .................... 2,917,363
--------------
MEDICAL SERVICES--.9%
117,100 Express Scripts Inc. Cl. A.*+ ............. 7,048,015
--------------
PAPER PACKAGING &
FOREST PRODUCTS--2.1%
267,500 Sealed Air Corp.* ......................... 17,354,063
--------------
PHARMACEUTICALS--3.1%
548,500 Forest Laboratories, Inc.* ................ 25,368,125
--------------
RESTAURANTS & LODGING--3.3%
617,550 Outback Steakhouse, Inc.* ................. 24,277,743
75,000 Papa John's International Inc.*+ .......... 3,351,600
--------------
27,629,343
--------------
RETAILING--16.3%
435,600 Abercrombie & Fitch Co., Cl. A.* .......... 20,908,800
120,800 Amazon.com Inc.*+ ......................... 15,115,100
141,000 BJ's Wholesale Club Inc.* ................. 4,238,883
631,900 Bed Bath & Beyond Inc.* ................... 24,328,150
262,000 Best Buy Company Inc.* .................... 17,685,000
307,800 Gucci Group N.V ........................... 21,546,000
1,042,000 Office Depot Inc.* ........................ 22,989,646
240,700 Williams Sonoma Inc.*+ .................... 8,379,489
--------------
135,191,068
--------------
16
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1999 (UNAUDITED) (CONT'D)
================================================================================
SHARES COMMON STOCKS (CONT'D) VALUE
------ -----
SEMICONDUCTORS--9.3%
328,200 Altera Corporation* ....................... $ 12,082,027
301,100 Linear Technology Corporation ............. 20,248,975
135,000 Maxim Integrated Products, Inc.* .......... 8,977,500
508,300 Microchip Technology Incorporated ......... 24,080,713
208,200 Xilinx, Inc.* ............................. 11,919,450
--------------
77,308,665
--------------
SEMICONDUCTOR CAPITAL
EQUIPMENT--3.2%
108,300 ASM Lithography Holding NV* ............... 6,430,313
177,500 Applied Materials Inc.* ................... 13,112,813
96,600 Teradyne, Inc.* ........................... 6,931,050
--------------
26,474,176
--------------
TRANSPORTATION--.5%
56,500 Canadian National Railway Co.+ ............ 3,785,500
--------------
TOTAL COMMON STOCKS
(COST $609,564,086) ..................... 725,580,213
--------------
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--14.2% VALUE
-------- -----
SHORT-TERM CORPORATE NOTES--9.6%
$25,000,000 Bank Austria Commercial Paper Inc.,
4.83%, 7/2 .............................. $ 24,996,646
20,000,000 Export Development Corp.,
4.77%, 7/2/99 ........................... 19,997,350
10,000,000 Merrill Lynch & Co. Inc.,
5.25%, 7/12/99 .......................... 9,983,958
25,000,000 Toyota Motor Corp., (Of Puerto Rico),
5.05%, 7/16/99 .......................... 24,947,395
------------
TOTAL SHORT-TERM CORPORATE NOTES
(COST $79,925 ........................... 79,925,349
------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--4.6%
Securities Held Under Repurchase
Agreements, 4.80%-5.875%, 7/1/99, with
Bear, Stearns & Co. Inc., dtd 6/30/99,
repurchase price $37,745,808;
collateralized by U.S. Government
Securities (total par value $52,104,000
due 7/15/02-2/15/22) .................... 37,740,734
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $117,666,083) ..................... 117,666,083
------------
TOTAL INVESTMENTS
(COST $727,230,169)(A) 101.8% 843,246,296
Liabilities in Excess Of Other Assets (1.8) (14,514,305)
----- ------------
NET ASSETS 100.0% $828,731,991
===== ============
* Non-income producing security.
+ Securities partially or fully on loan.
a) At June 30, 1999, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $727,230,169, amounted to
$116,016,127 which consisted of aggregate gross unrealized appreciation of
$128,115,779 and aggregate gross unrealized depreciation of $12,099,652.
See Notes to Financial Statements.
17
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
====================================================================================================================================
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED -------------------------------------------------------------------
JUNE 30, 1999(I) 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $28.87 $24.18 $21.35 $19.44 $13.46 $13.72
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.03) 0.00(ii) (0.04) 0.03 (0.03) 0.00(ii)
Net realized and unrealized gain
(loss) on investments 3.35 6.95 3.20 2.29 6.01 (0.21)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.32 6.95 3.16 2.32 5.98 (0.21)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income -- -- (0.01) -- -- --
Distributions from net realized gains (4.59) (2.26) (0.32) (0.41) -- (0.05)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (4.59) (2.26) (0.33) (0.41) -- (0.05)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $27.60 $28.87 $24.18 $21.35 $19.44 $13.46
====================================================================================================================================
Total Return 12.91% 30.30% 15.01% 11.90% 44.45% (1.54%)
====================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $828,732 $689,571 $444,967 $394,847 $185,349 $62,178
====================================================================================================================================
Ratio of expenses to average net assets 0.84% 0.84% 0.84% 0.84% 0.90% 0.97%
====================================================================================================================================
Ratio of net investment income (loss) to
average net assets (0.35%) 0.00% (0.15%) 0.08% (0.25%) 0.03%
====================================================================================================================================
Portfolio Turnover Rate 84.98% 152.21% 151.98% 90.97% 104.74% 83.96%
====================================================================================================================================
</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.
18
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
SCHEDULE OF INVESTMENTS--JUNE 30, 1999 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS--98.0% VALUE
------ -----
ADVERTISING--1.0%
23,000 Omnicom Group Inc. ........................ $ 1,840,000
--------------
AEROSPACE--4.3%
56,000 AlliedSignal Inc. ......................... 3,528,000
59,000 United Technologies Corp.+ ................ 4,229,592
--------------
7,757,592
--------------
BROADCASTING--3.8%
44,000 Cablevision Systems Corp. Cl. A.*+ ........ 3,080,000
55,000 Clear Channel Communications Inc.* ........ 3,791,590
--------------
6,871,590
--------------
BUSINESS SERVICES--1.6%
94,900 IMS Health Inc. ........................... 2,965,625
--------------
COMMUNICATION EQUIPMENT--7.0%
124,000 Cisco Systems, Inc.* ...................... 7,990,250
50,000 Motorola, Inc. ............................ 4,737,500
--------------
12,727,750
--------------
COMMUNICATIONS--23.5%
74,000 America Online Inc.* ...................... 8,177,000
76,058 At Home Corp. Series A* ................... 4,102,416
43,500 Broadcast.com Inc.* ....................... 5,809,991
146,000 Comcast Corp. Cl. A. Special .............. 5,611,948
108,000 COX Communications Inc. Cl. A.*+ .......... 3,975,804
102,300 Lucent Technologies Inc. .................. 6,898,907
38,700 MCI Worldcom Inc.* ........................ 3,330,619
30,000 McLeodUSA Inc. Cl. A.* .................... 1,650,000
65,000 Nextel Communications Inc. Cl. A*+ ........ 3,262,220
--------------
42,818,905
--------------
COMPUTER RELATED &
BUSINESS EQUIPMENT--6.1%
98,700 Dell Computer Corp.* ...................... 3,651,900
107,000 Sun Microsystems Inc.* .................... 7,369,625
--------------
11,021,525
--------------
COMPUTER SERVICES--4.9%
78,000 CNET Inc.*+ ............................... 4,494,750
22,500 eBay Inc.* ................................ 3,405,938
6,000 Yahoo Inc.* ............................... 1,033,500
--------------
8,934,188
--------------
COMPUTER SOFTWARE--6.5%
15,000 BMC Software Inc.* ........................ 810,000
40,000 Intuit Inc.* .............................. 3,605,000
83,200 Microsoft Corporation* .................... 7,503,642
--------------
11,918,642
--------------
SHARES VALUE
------ -----
CONGLOMERATE--3.6%
68,730 Tyco International Ltd. ................... 6,512,168
--------------
ENERGY & ENERGY SERVICES--.5%
20,000 Halliburton Co. ........................... 905,000
--------------
FINANCIAL SERVICES--6.2%
105,750 Citigroup Inc. ............................ 5,023,125
40,000 Kansas City Southern Industries Inc.+ ..... 2,552,520
25,000 Morgan Stanley Dean Witter & Co.+ ......... 2,562,500
11,000 Schwab (Charles) Corporation (The) ........ 1,208,625
--------------
11,346,770
--------------
FOOD CHAINS--1.8%
79,800 Kroger Co.* ............................... 2,229,452
25,000 Safeway Inc.* ............................. 1,237,500
--------------
3,466,952
--------------
INSURANCE--1.6%
24,350 American International Group, Inc. ........ 2,850,484
--------------
LEISURE & ENTERTAINMENT--1.5%
57,000 Carnival Corp. ............................ 2,764,500
--------------
PHARMACEUTICALS--.6%
20,400 Schering-Plough Corporation+ .............. 1,081,200
--------------
RETAILING--14.0%
33,000 Amazon.com Inc.* .......................... 4,129,125
25,000 Bed Bath & Beyond Inc.* ................... 962,500
29,000 Best Buy Company Inc.* .................... 1,957,500
45,900 Costco Companies Inc.* .................... 3,674,892
91,400 Home Depot, Inc. .......................... 5,889,633
10,000 Linens'n Things Inc.* ..................... 437,500
127,500 Office Depot Inc.* ........................ 2,813,033
114,900 Wal-Mart Stores Inc. ...................... 5,543,925
--------------
25,408,108
--------------
SEMICONDUCTORS--5.9%
48,000 Altera Corporation* ....................... 1,767,024
33,000 Linear Technology Corporation ............. 2,219,250
16,000 Texas Instruments, Incorporated ........... 2,320,000
76,000 Xilinx, Inc.* ............................. 4,351,000
--------------
10,657,274
--------------
SEMICONDUCTOR CAPITAL
EQUIPMENT--3.6%
46,900 Applied Materials Inc.* ................... 3,464,738
25,000 ASM Lithography Holding NV* ............... 1,484,375
22,900 Teradyne, Inc.* ........................... 1,643,075
--------------
6,592,188
--------------
TOTAL COMMON STOCKS
(COST $138,224,760) ..................... 178,440,461
-----------
19
<PAGE>
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--3.4% VALUE
-------- -----
SHORT-TERM CORPORATE NOTES--1.7%
$3,000,000 Export Development Corp.,
4.77%, 7/2/99 (Cost $2,999,600) ......... $ 2,999,600
-----------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--1.7%
Securities Held Under Repurchase
Agreements, 4.80%-5.875%, 7/1/99, with
Bear, Stearns & Co. Inc., dtd 6/30/99,
repurchase price $3,123,925;
collateralized by U.S. Treasury Strips
(par value $7,855,000 due 11/15/13) ..... 3,123,501
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $6,123,101) ....................... 6,123,101
------------
TOTAL INVESTMENTS
(Cost $144,347,861)(a) ........................... 101.4% 184,563,562
Liabilities in Excess Of Other Assets .............. (1.4) (2,565,202)
----- ------------
NET ASSETS ......................................... 100.0% $181,998,360
===== ============
* Non-income producing security.
+ Securities partially or fully on loan.
a) At June 30, 1999, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $144,347,861, amounted to
$40,215,701 which consisted of aggregate gross unrealized appreciation of
$40,526,761 and aggregate gross unrealized depreciation of $311,060.
See Notes to Financial Statements.
20
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
====================================================================================================================================
FROM JANUARY 25,
1995
SIX MONTHS (COMMENCEMENT OF
ENDED YEAR ENDED DECEMBER 31, OPERATIONS)
JUNE 30, ------------------------------------------- TO DECEMBER 31,
1999(I)(II) 1998 1997 1996 1995(II)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $34.90 $23.17 $19.36 $17.43 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.06) (0.05) (0.03) (0.03)(iii) (0.03)
Net realized and unrealized gain
on investments 8.80 12.99 3.84 2.14 7.46
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 8.74 12.94 3.81 2.11 7.43
Distribution from net realized gains (2.77) (1.21) -- (0.18) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $40.87 $34.90 $23.17 $19.36 $17.43
====================================================================================================================================
Total Return 25.54% 57.83% 19.68% 12.04% 74.30%
====================================================================================================================================
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted) $181,998 $101,710 $53,488 $34,925 $5,497
====================================================================================================================================
Ratio of expenses excluding interest
to average net assets 0.91 %0.93 %0.96 %1.06 %1.50%
====================================================================================================================================
Ratio of expenses including interest
to average net assets 0.92 %0.96 %1.00 %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 (0.59%) (0.27%) (0.17%) (0.15%) (0.71%)
====================================================================================================================================
Portfolio Turnover Rate 74.13% 143.59% 164.27% 102.10% 178.23%
====================================================================================================================================
Amount of debt outstanding
at end of period -- -- -- -- --
====================================================================================================================================
Average amount of debt
outstanding during the period $426,923 $246,101 $201,644 $76,079 $8,122
====================================================================================================================================
Average daily number of shares
outstanding during the period 3,523,768 2,480,478 2,135,458 1,107,187 75,460
====================================================================================================================================
Average amount of debt per share
during the period $0.12 $0.10 $0.09 $0.07 $0.11
====================================================================================================================================
</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.
See Notes to Financial Statements.
21
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1999
<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 accompanying
schedules of investments $2,915,553,685 $569,135,015 $115,095,695 $42,968,305 $843,246,296 $184,563,562
Receivable for investment
securities sold 76,626,980 10,823,699 2,081,420 494,220 12,961,867 3,585,329
Receivable for shares of
beneficial interest sold 8,240,966 4,197,377 135,035 -- 4,677,752 764,172
Interest and dividends
receivable 637,260 106,223 39,629 150,629 134,659 27,842
Other assets 62,079 47,418 18,821 19,444 34,024 20,581
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets 3,001,120,970 584,309,732 117,370,600 43,632,598 861,054,598 188,961,486
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for investment
securities purchased 154,628,963 4,241,563 6,477,296 1,422,338 26,900,599 6,680,386
Payable for securities loaned 795,447 1,824,829 9,525 314,716 1,396,925 114,016
Payable for shares of
beneficial interest redeemed 4,112,589 5,369,330 802,622 30,031 3,498,197 35,635
Interest payable -- -- -- -- -- 893
Accrued investment management
fees 1,596,087 370,007 52,215 23,888 480,675 115,220
Accrued expenses 152,817 39,579 13,420 8,485 46,211 16,976
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 161,285,903 11,845,308 7,355,078 1,799,458 32,322,607 6,963,126
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $2,839,835,067 $572,464,424 $110,015,522 $41,833,140 $828,731,991 $181,998,360
====================================================================================================================================
NET ASSETS CONSIST OF:
Paid-in capital $1,994,834,055 $230,763,053 $84,157,661 $31,947,799 $637,599,848 $123,661,655
Undistributed net investment
income (accumulated loss) (781,921) (10,278,319) 28,698 255,630 (2,183,795) (707,580)
Undistributed net realized gain 234,604,849 221,850,991 5,419,853 4,053,515 77,299,811 18,828,584
Net unrealized appreciation 611,178,084 130,128,699 20,409,310 5,576,196 116,016,127 40,215,701
====================================================================================================================================
NET ASSETS $2,839,835,067 $572,464,424 $110,015,522 $41,833,140 $828,731,991 $181,998,360
====================================================================================================================================
Shares of beneficial interest
outstanding--Note 6 50,860,223 13,137,264 8,258,806 3,012,783 30,029,724 4,453,030
====================================================================================================================================
NET ASSET VALUE PER SHARE $55.84 $43.58 $13.32 $13.89 $27.60 $40.87
====================================================================================================================================
*Identified cost $2,304,375,601 $439,006,316 $94,686,385 $37,392,109 $727,230,169 $144,347,861
====================================================================================================================================
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1999
<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 $4,170,418 $2,721,439 $130,659 $377,091 $1,177,595 $94,071
Dividends 4,109,581 546,890 201,371 42,106 539,717 132,996
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income 8,279,999 3,268,329 332,030 419,197 1,717,312 227,067
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses:
Management fees-- Note 3(a) 8,643,733 3,948,986 281,919 127,315 2,781,770 584,733
Interest on line of credit
utilized -- -- -- -- -- 12,792
Custodian fees 251,445 124,430 13,916 14,805 83,371 20,428
Transfer agent fees 63,814 18,730 3,083 1,552 18,738 4,594
Professional fees 40,283 13,595 6,357 5,509 15,086 7,400
Trustees' fees 1,984 1,984 1,984 1,984 1,984 1,984
Miscellaneous 58,027 33,016 4,524 2,651 28,678 4,079
- ------------------------------------------------------------------------------------------------------------------------------------
Total Expenses 9,059,286 4,140,741 311,783 153,816 2,929,627 636,010
- ------------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) (779,287) (872,412) 20,247 265,381 (1,212,315) (408,943)
- ------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain on
investments 242,323,516 221,310,826 5,470,901 4,103,579 77,240,058 18,624,382
Net change in unrealized
appreciation on investments 94,394,399 (144,722,408) 1,647,215 514,144 10,623,820 10,249,187
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 336,717,915 76,588,418 7,118,116 4,617,723 87,863,878 28,873,569
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS $335,938,628 $75,716,006 $7,138,363 $4,883,104 $86,651,563 $28,464,626
====================================================================================================================================
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1999
================================================================================
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH
Cash flows from operating activities:
Interest received $86,551
Dividends received 125,822
Interest paid (11,944)
Operating expenses paid (577,406)
Purchase of short-term securities, net (3,331,110)
Purchase of portfolio securities (146,595,494)
Proceeds from disposition of portfolio securities 99,183,581
Other (18,997)
- --------------------------------------------------------------------------------
Net cash used in operating activities (51,138,997)
- --------------------------------------------------------------------------------
Cash flows from financing activities:
Dividends paid (10,215,601)
Proceeds from shares sold and dividends reinvested 90,590,610
Payments on shares redeemed (29,350,028)
Increase in cash collateral received on
securities loaned 114,016
- --------------------------------------------------------------------------------
Net cash provided by financing activities 51,138,997
- --------------------------------------------------------------------------------
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 $28,464,626
Increase in investments (54,757,849)
Increase in receivable for investments sold (2,665,560)
Increase in payable for securities purchased 6,680,386
Increase in interest and dividends receivable (14,694)
Net realized gain (18,624,382)
Net increase in unrealized appreciation (10,249,187)
Increase in accrued expenses 46,660
Net increase in other assets (18,997)
- --------------------------------------------------------------------------------
Net cash used in operating activities $(51,138,997)
================================================================================
See Notes to Financial Statements.
24
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1999
<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) $ (779,287) $ (872,412) $ 20,247 $ 265,381 $ (1,212,315) $ (408,943)
Net realized gain on
investments 242,323,516 221,310,826 5,470,901 4,103,579 77,240,058 18,624,382
Net change in unrealized
appreciation (depreciation)
on investments 94,394,399 (144,722,408) 1,647,215 514,144 10,623,820 10,249,187
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 335,938,628 75,716,006 7,138,363 4,883,104 86,651,563 28,464,626
Dividends to shareholders:
Net investment income (3,390,608) -- (184,311) (431,942) -- --
Net realized gains (231,505,570) (121,889,784) (5,479,715) (2,190,935) (109,670,539) (10,215,601)
Net increase (decrease) from
shares of beneficial interest
transactions-- Note 6 833,073,664 (597,945,538) 30,615,564 11,364,593 162,179,510 62,039,810
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) 934,116,114 (644,119,316) 32,089,901 13,624,820 139,160,534 80,288,835
Net Assets
Beginning of period 1,905,718,953 1,216,583,740 77,925,621 28,208,320 689,571,457 101,709,525
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $2,839,835,067 $ 572,464,424 $110,015,522 $41,833,140 $828,731,991 $181,998,360
====================================================================================================================================
Undistributed net investment
income (accumulated loss) $ (781,921) $ (10,278,319) $ 28,698 $ 255,630 $ (2,183,795) $ (707,580)
====================================================================================================================================
</TABLE>
THE ALGER AMERICAN FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
<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) $ 3,372,212 $ (2,025,154) $ 181,987 $ 430,207 $ (4,412) $ (178,959)
Net realized gain on
investments 223,813,556 122,430,214 5,444,249 2,135,374 112,933,261 10,343,897
Net change in unrealized
appreciation on investments 338,483,830 51,310,113 11,504,771 3,469,514 35,788,129 23,275,972
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 565,669,598 171,715,173 17,131,007 6,035,095 148,716,978 33,440,910
Dividends to shareholders:
Net investment income (3,246,329) -- (194,463) (295,352) -- --
Net realized gains (198,381,152) (131,575,498) (5,380,156) (1,311,952) (41,830,668) (2,761,338)
Net increase from
shares of beneficial
interest transactions--Note 6 469,147,944 178,858,157 18,970,341 7,166,779 137,718,447 17,541,955
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase 833,190,061 218,997,832 30,526,729 11,594,570 244,604,757 48,221,527
Net Assets
Beginning of year 1,072,528,892 997,585,908 47,398,892 16,613,750 444,966,700 53,487,998
- ------------------------------------------------------------------------------------------------------------------------------------
End of year $ 1,905,718,953 $1,216,583,740 $ 77,925,621 $28,208,320 $ 689,571,457 $ 101,709,525
====================================================================================================================================
Undistributed net investment
income (accumulated loss) $ 3,387,974 $ (9,405,907) $ 192,762 $ 422,191 $ (971,480) $ (298,637)
====================================================================================================================================
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
THE ALGER AMERICAN FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1999
================================================================================
NOTE 1--GENERAL:
The Alger American Fund (the "Fund") is a diversified, open-end registered
investment company organized as a business trust under the laws of the
Commonwealth of Massachusetts. The Fund operates as a series company
currently issuing six series 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"). The American Growth Portfolio, American Small Capitalization
Portfolio, American MidCap Growth Portfolio and American Leveraged AllCap
Portfolio invest primarily in equity securities and each has an investment
objective of long-term capital appreciation. The American Income and Growth
Portfolio's primary investment objective is to provide a high level of
dividend income by investing primarily in dividend-paying equity
securities; capital appreciation is a secondary objective. The American
Balanced Portfolio's investment objectives are current income and long-term
capital appreciation which it seeks to achieve through investing in equity
and fixed income securities. 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 on each
day the New York Stock Exchange ("NYSE") is open as of the close of the
NYSE (normally 4:00 p.m. Eastern time). Listed and unlisted securities for
which such information is regularly reported are valued at the last
reported sales price or, in the absence of reported sales, at the mean
between the bid and 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. The
repurchase agreements are collateralized by U.S. Government securities which are
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, as defined. The Portfolios earn fees on the
securities loaned which are included in interest income in the accompanying
Statements of Operations. In order to protect against the risk of failure by the
borrower to return the securities loaned or any delay in the delivery of such
securities, the 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, 1999, the value of securities loaned and
collateral received thereon were as follows:
VALUE OF
SECURITIES VALUE OF
LOANED COLLATERAL
----------- -----------
American Growth Portfolio .......................... $ 4,934,475 $ 5,021,664
American Small Capitalization Portfolio ............ 17,307,477 17,617,970
American Income and Growth Portfolio ............... 9,521 9,525
American Balanced Portfolio ........................ 314,707 314,716
American MidCap Growth Portfolio ................... 12,782,417 13,018,987
American Leveraged AllCap Portfolio ................ 4,890,370 4,986,368
(e) DIVIDENDS TO SHAREHOLDERS: Dividends and distributions payable to
shareholders are recorded by the Fund on the ex-dividend date.
Dividends from net investment income are declared and paid annually.
26
<PAGE>
THE ALGER AMERICAN FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONT'D)
JUNE 30, 1999
================================================================================
Distributions from net realized gains, offset by any loss carryforward, 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, including net realized
capital gains, of each Portfolio to its respective shareholders. Therefore, no
federal income tax provision is required. Each Portfolio is treated as a
separate entity for the purpose of determining such compliance.
(g) EXPENSES: The Fund accounts separately for the assets, liabilities and
operations of each Portfolio. Expenses directly attributable to each Portfolio
are charged to that Portfolio's operations; expenses which are applicable to all
Portfolios are allocated among them.
(h) OTHER: These financial statements have been prepared using estimates and
assumptions that affect the reported amounts therein. Actual results may differ
from those estimates.
NOTE 3--INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
(a) INVESTMENT MANAGEMENT FEES: Fees incurred by each Portfolio, pursuant to the
provisions of its Investment Management Agreement (the "Agreement") 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
Each Agreement further provides 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, 1999, 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.") $2,231,592, $1,794,525, $102,194, $22,392, $941,473
and $122,547, 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"), an affiliate of Alger
Management, whereby Services will act as transfer agent for the Fund.
(d) Certain trustees and officers of the Fund are directors and officers of
Alger Management, Alger Inc. and Services.
NOTE 4--SECURITIES TRANSACTIONS:
Purchases and sales of securities, other than short-term securities, for the six
months ended June 30, 1999, were as follows:
PURCHASES SALES
------------- --------------
American Growth Portfolio .................. $2,116,806,030 $1,365,609,378
American Small Capitalization Portfolio .... 755,810,632 1,392,785,618
American Income and Growth Portfolio ....... 82,640,842 56,844,175
American Balanced Portfolio ................ 24,869,289 16,736,247
American MidCap Growth Portfolio ........... 610,768,944 557,909,595
American Leveraged AllCap Portfolio ........ 153,275,880 101,845,784
NOTE 5--LINE OF CREDIT:
The American Leveraged AllCap Portfolio has a line of credit withits
custodian bank whereby it may borrow up to one-third of the value 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. To the extent American
Leveraged AllCap Portfolio borrows under this line, it must pledge
securities with a total value of at least twice the amount borrowed. During
the six months ended June 30, 1999, the American Leveraged AllCap Portfolio
had borrowings which averaged $426,923 at a weighted average interest rate
of 5.96%.
NOTE 6--SHARE CAPITAL:
The Fund has an unlimited number of authorized shares of beneficial
interest of $.001 par value.
27
<PAGE>
THE ALGER AMERICAN FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONT'D)
JUNE 30, 1999
================================================================================
During the six months ended June 30, 1999, transactions of shares of
beneficial interest were as follows:
SHARES AMOUNT
------ ------
American Growth Portfolio:
Shares sold ....................... 23,229,052 $ 1,297,797,918
Dividends reinvested .............. 4,531,199 234,852,067
-------------- ---------------
27,760,251 1,532,649,985
Shares redeemed ................... (12,708,973) (699,576,321)
-------------- ---------------
Net increase ..................... 15,051,278 $ 833,073,664
============== ===============
SHARES AMOUNT
------ ------
American Small Capitalization Portfolio:
Shares sold ....................... 18,827,200 $ 810,109,177
Dividends reinvested .............. 3,077,857 121,883,144
-------------- ---------------
21,905,057 931,992,321
Shares redeemed ................... (36,437,297) (1,529,937,859)
-------------- ---------------
Net decrease ..................... (14,532,240) $ (597,945,538)
============== ===============
SHARES AMOUNT
------ ------
American Income and Growth Portfolio:
Shares sold ....................... 2,284,869 $ 30,461,737
Dividends reinvested .............. 447,209 5,661,661
-------------- ---------------
2,732,078 36,123,398
Shares redeemed ................... (410,669) (5,507,834)
-------------- ---------------
Net increase ..................... 2,321,409 $ 30,615,564
============== ===============
SHARES AMOUNT
------ ------
American Balanced Portfolio:
Shares sold ....................... 880,872 $ 12,025,460
Dividends reinvested .............. 200,644 2,620,408
-------------- ---------------
1,081,516 14,645,868
Shares redeemed ................... (242,164) (3,281,275)
-------------- ---------------
Net increase ..................... 839,352 $ 11,364,593
============== ===============
SHARES AMOUNT
------ ------
American MidCap Growth Portfolio:
Shares sold ....................... 21,487,635 $ 604,896,674
Dividends reinvested .............. 4,326,254 109,670,534
-------------- ---------------
25,813,889 714,567,208
Shares redeemed ................... (19,665,783) (552,387,698)
-------------- ---------------
Net increase ................ 6,148,106 $ 162,179,510
============== ===============
SHARES AMOUNT
------ ------
American Leveraged AllCap Portfolio:
Shares sold .................. 2,018,631 $ 81,039,034
Dividends reinvested ......... 263,906 10,147,195
-------------- ---------------
2,282,537 91,186,229
Shares redeemed .............. (744,198) (29,146,419)
-------------- ---------------
Net increase ................ 1,538,339 $ 62,039,810
============== ===============
During the year ended December 31, 1998, transactions of shares of beneficial
interest were as follows:
SHARES AMOUNT
------ ------
American Growth Portfolio:
Shares sold ....................... 22,276,285 $ 1,015,249,072
Dividends reinvested .............. 4,809,435 201,563,406
-------------- ---------------
27,085,720 1,216,812,478
Shares redeemed ................... (16,358,040) (747,664,534)
-------------- ---------------
Net increase ..................... 10,727,680 $ 469,147,944
============== ===============
SHARES AMOUNT
------ ------
American Small Capitalization Portfolio:
Shares sold ....................... 33,401,217 $ 1,342,889,723
Dividends reinvested .............. 3,247,801 131,568,417
-------------- ---------------
36,649,018 1,474,458,140
Shares redeemed ................... (31,781,393) (1,295,599,983)
-------------- ---------------
Net increase ..................... 4,867,625 $ 178,858,157
============== ===============
SHARES AMOUNT
------ ------
American Income and Growth Portfolio:
Shares sold ....................... 2,355,653 $ 27,413,251
Dividends reinvested .............. 504,168 5,571,055
-------------- ---------------
2,859,821 32,984,306
Shares redeemed ................... (1,236,899) (14,013,965)
-------------- ---------------
Net increase ..................... 1,622,922 $ 18,970,341
============== ===============
SHARES AMOUNT
------ ------
American Balanced Portfolio:
Shares sold ....................... 781,832 $ 8,989,415
Dividends reinvested .............. 146,968 1,604,892
-------------- ---------------
928,800 10,594,307
Shares redeemed ................... (299,561) (3,427,528)
-------------- ---------------
Net increase ..................... 629,239 $ 7,166,779
============== ===============
SHARES AMOUNT
------ ------
American MidCap Growth Portfolio:
Shares sold ....................... 14,298,667 $ 361,534,632
Dividends reinvested .............. 1,688,763 41,830,666
-------------- ---------------
15,987,430 403,365,298
Shares redeemed ................... (10,509,008) (265,646,851)
-------------- ---------------
Net increase ..................... 5,478,422 $ 137,718,447
============== ===============
SHARES AMOUNT
------ ------
American Leveraged AllCap Portfolio:
Shares sold ....................... 1,353,912 $ 37,604,075
Dividends reinvested .............. 107,618 2,731,336
-------------- ---------------
1,461,530 40,335,411
Shares redeemed ................... (854,961) (22,793,456)
-------------- ---------------
Net increase ..................... 606,569 $ 17,541,955
============== ===============
28
<PAGE>
