The Alger
American Fund
A pooled funding vehicle for:
o variable annuity contracts One World Trade Center
o variable life insurance policies Suite 9333
o qualified pension plans New York, NY 10048
o qualified retirement plans 1-800-992-3863
PROSPECTUS
May 1, 2000
Alger American MidCap Growth Portfolio
Alger American Growth Portfolio
Alger American Balanced Portfolio
As with all mutual funds, the Securities and Exchange Commission has not
determined if the information in this Prospectus is accurate or complete, nor
has it approved or disapproved these securities. It is a criminal offense to
represent otherwise.
An investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
<PAGE>
The Alger
American Fund
PROSPECTUS
May 1, 2000
TABLE OF CONTENTS
2 ........... Risk/Return Summary: Investments, Risks & Performance
2 ..... Investments
Alger American MidCap
Growth Portfolio ......................... 2
Alger American Growth Portfolio ............ 2
Alger American Balanced Portfolio .......... 2
3 ..... Principal Risks
Alger American MidCap
Growth Portfolio ..... .................... 3
Alger American Growth Portfolio ............ 3
Alger American Balanced Portfolio .......... 3
3 ..... Performance
Alger American Growth Portfolio ............ 4
Alger American MidCap
Growth Portfolio ......................... 4
Alger American Balanced Portfolio .......... 4
5 ........... Fees and Expenses
6 ........... Management & Organization
6 ........... Shareholder Information
Distributor ................................ 6
Transfer Agent ............................. 6
Purchasing and Redeeming Fund Shares ....... 7
8 ........... Financial Highlights
Back Cover: How to obtain more information
<PAGE>
[GRAPHIC]
Risk/Return Summary: Investments, Risks & Performance
Investments: The Alger American Fund
The investment goal and primary approach of each portfolio is discussed
individually below. All of the portfolios (other than the fixed-income portion
of the Balanced Portfolio) invest primarily in equity securities, such as common
or preferred stocks, which are listed on U.S. exchanges or in the
over-the-counter market. They invest primarily in "growth" stocks. The Fund's
Manager, Fred Alger Management, Inc., believes that these companies tend to fall
into one of two categories:
o High Unit Volume Growth
Vital, creative companies which offer goods or services to a rapidly
expanding marketplace. They include both established and emerging firms,
offering new or improved products, or firms simply fulfilling an increased
demand for an existing line.
o Positive Life Cycle Change
Companies experiencing a major change which is expected to produce
advantageous results. These changes may be as varied as new management,
products or technologies; restructuring or reorganization; or merger and
acquisition.
The company's market capitalization will dictate in which portfolio(s) it will
be placed. The market capitalization of a company is its price per share
multiplied by its number of outstanding shares.
Alger American MidCap Growth Portfolio
Goal
The Alger American MidCap Growth Portfolio seeks long-term capital appreciation.
Approach
It focuses on midsize companies with promising growth potential. Under normal
circumstances, the portfolio invests primarily in the equity securities of
companies having a market capitalization within the range of companies in the
S&P MidCap 400 Index(R).
Alger American Growth Portfolio
Goal
The Alger American Growth Portfolio seeks long-term capital appreciation.
Approach
It focuses on growing companies that generally have broad product lines,
markets, financial resources and depth of management. Under normal
circumstances, the portfolio invests primarily in the equity securities of large
companies. The portfolio considers a large company to have a market
capitalization of $1 billion or greater.
Alger American Balanced Portfolio
Goal
The Alger American Balanced Portfolio seeks current income and long-term capital
appreciation.
Approach
It focuses on stocks of companies with growth potential and fixed-income
securities, with emphasis on income-producing securities which appear to have
some potential for capital appreciation. Under normal circumstances, the
portfolio invests in common stocks and fixed-income securities, which include
commercial paper and bonds rated within the 4 highest rating categories by an
established rating agency or if not rated, which are determined by the Fund's
Manager to be of comparable quality. Ordinarily, at least 25% of the portfolio's
net assets are invested in fixed-income securities.
2
<PAGE>
[GRAPHIC]
Principal Risks
Risks Applicable to All Equity Portfolios
As with any fund that invests in stocks, your investment will go up or down in
value, and the loss of your investment is a risk of investing. A portfolio's
price per share will fluctuate due to changes in the market prices of its
investments. Also, a Fund investment may not grow as fast as the rate of
inflation and stocks tend to be more volatile than some other investments you
could make, such as bonds. Furthermore, the returns of a fund concentrating on
"growth" stocks tend to vary more widely over time than those of funds that
focus on "value" stocks; prices of growth stocks tend to be higher in relation
to their companies' earnings and may be more sensitive to market, political and
economic developments than other stocks, making their prices more volatile.
Based on the equity portfolios' investment styles and objectives, an investment
in them may be better suited to investors who seek long-term capital growth and
can tolerate fluctuations in their investments' values.
A portfolio's trading in some stocks may be relatively short-term, meaning the
Fund may buy a security and sell it a short time later to take advantage of
current gains if it is believed that an alternative investment may provide
greater future growth. This activity may create higher transaction costs due to
commissions and other expenses.
There may be additional risks applicable to a specific portfolio because of its
investment approach.
Risks Applicable to Alger American
MidCap Growth Portfolio
An additional risk of investing in the portfolio is:
o the possibility of greater risk by investing in medium-sized companies
rather than larger, more established companies owing to such factors as
inexperienced management and limited financial resources
Risks Applicable to Alger American Growth Portfolio
The portfolio's primary risks are those summarized above in "Risks Applicable to
All Equity Portfolios."
Risks Applicable to Alger American
Balanced Portfolio
The primary risks arising from the fixed-income portion of the portfolio are:
o fixed income securities' sensitivity to interest rate movements
o the potential for a decline in the portfolio's market value in the event of
an issuer's falling credit rating or actual default
The primary risks for the equity portion of the portfolio are those summarized
above in "Risks Applicable to All Equity Portfolios."
[GRAPHIC]
Performance
The following bar charts show the changes in each portfolio's performance from
year to year and give you some indication of the risks of investing in the Fund.
They assume reinvestment of dividends and distributions.
The Average Annual Total Return tables compare a portfolio's performance over
several periods with that of an appropriate benchmark index. The annual returns
assume reinvestment of dividends and distributions. Remember that how a
portfolio has performed in the past is not necessarily an indication of how it
will perform in the future.
The performance disclosed in these charts does not reflect separate account
charges which, if reflected, would lower returns.
3
<PAGE>
Each index used in the tables is a broad index designed to track a particular
market or market segment. No expenses or fees are reflected in the returns for
the indexes, which are unmanaged. All returns for the indexes assume
reinvestment of dividends and interest on the underlying securities that make up
the respective index.
o S&P 500 Index(R): An index of large company common stocks considered to be
representative of the U.S. stock market in general.
o S&P Midcap 400 Index(R): An index of common stocks designed to track
performance of medium capitalization companies.
o Lehman Brothers Government/Corporate Bond Index(R): An index designed to
track performance of government and corporate bonds.
Since the Balanced Portfolio invests in both equity and fixed income securities,
you should compare its performance to both indexes presented.
Alger American Growth Portfolio
Annual Total Return as of December 31 each year (%)
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
YEAR PERCENT
---- -------
90 4.14
91 40.39
92 12.38
93 22.47
94 1.45
95 36.37
96 13.35
97 25.75
98 48.07
99 33.74
Best Quarter 25.93% Q4 1998
Worst Quarter: (16.21)% Q3 1990
Average Annual Total Return as of December 31, 1999
Since
Inception
1 Year 5 Years 10 Years 1/9/89
-------------------------------------------------------------------------
American Growth 33.74% 30.94% 22.89% 23.05%
S&P 500 Index(R) 21.04% 28.56% 18.21% 19.22%
Alger American MidCap Growth Portfolio
Annual Total Return as of December 31 each year (%)
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
YEAR PERCENT
---- -------
94 -1.54
95 44.45
96 11.90
97 15.01
98 30.30
99 31.85
Best Quarter 27.07% Q4 1998
Worst Quarter: (14.21)% Q3 1998
Average Annual Total Return as of December 31, 1999
Since
Inception
1 Year 5 Years 5/3/93
------------------------------------------------------------
American MidCap Growth 31.85% 26.14% 24.72%
S&P Midcap 400 Index(R) 14.72% 23.05% 18.34%
Alger American Balanced Portfolio
Annual Total Return as of December 31 each year (%)
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
YEAR PERCENT
---- -------
90 6.53
91 4.70
92 9.48
93 7.79
94 -4.27
95 28.62
96 10.17
97 19.82
98 31.51
99 29.21
Best Quarter 16.94% Q4 1998
Worst Quarter: (5.70)% Q1 1994
Average Annual Total Return as of December 31, 1999
Since
Inception
1 Year 5 Years 10 Years 9/5/89
-------------------------------------------------------------------------
American Balanced 29.21% 23.60% 13.78% 13.61%
S&P 500 Index(R) 21.04% 28.56% 18.21% 17.78%
Lehman Brothers Gov't/
Corp Bond Index(R) (2.14)% 7.60% 7.66% 7.82%
4
<PAGE>
[GRAPHIC]
Fees and Expenses
Investors incur certain fees and expenses in connection with an investment in
the Fund. The following table shows the fees and expenses that you may incur if
you buy and hold shares of the portfolios.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING
EXPENSES
(expenses that are deducted
from Fund assets)
------------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES
(fees paid directly Management Distribution Other TOTAL ANNUAL FUND
from your investment) Fees Fees Expenses OPERATING EXPENSES
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ALGER AMERICAN
MIDCAP GROWTH
PORTFOLIO None .80% None .05% .85%
------------------------------------------------------------------------------------------------------------------
ALGER AMERICAN
GROWTH
PORTFOLIO None .75% None .04% .79%
------------------------------------------------------------------------------------------------------------------
ALGER AMERICAN
BALANCED PORTFOLIO None .75% None .18% .93%
------------------------------------------------------------------------------------------------------------------
</TABLE>
Example
The following example, which reflects the shareholder fees and operating
expenses listed in the preceding table, is intended to help you compare the cost
of investing in the Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time periods
indicated. The example also assumes that your investment has a 5% return each
year and that the Fund's operating expenses remain the same as in the prior
table. The figures shown would be the same whether or not you sold your shares
at the end of each period. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
Alger American $87 $271 $471 $1,049
MidCap Growth
Portfolio
--------------------------------------------------------------------------------
Alger American $81 $252 $439 $978
Growth
Portfolio
--------------------------------------------------------------------------------
Alger American $95 $296 $515 $1,143
Balanced
Portfolio
--------------------------------------------------------------------------------
The example above does not reflect charges and deductions which are, or may be,
imposed under variable annuity contracts, variable life insurance policies, or
pension or retirement plans. Such charges and deductions are described in the
prospectus for the contract or policy accompanying this prospectus or in the
Plan documents.
Additional Information About
the Fund's Investments
Each portfolio may invest up to 100% of its assets in cash, high-grade bonds, or
cash equivalents for temporary defensive reasons if the Manager believes that
adverse market or other conditions warrant. This is to attempt to protect the
portfolio's assets from a temporary unacceptable risk of loss, rather than
directly to promote the portfolio's investment objective. The portfolio may not
achieve its objective during such periods.
Other securities the portfolios may invest in are discussed in the Fund's
Statement of Additional Information (see back cover).
5
<PAGE>
[GRAPHIC]
Management and Organization
Manager
Fred Alger Management, Inc.
One World Trade Center
Suite 9333
New York, NY 10048
The Manager has been an investment adviser since 1964, and manages investments
totaling (at 12/31/99) $10.69 billion in mutual fund assets as well as $6.75
billion in other assets. The Manager is responsible for managing each
portfolio's assets according to its goal and for placing orders with
broker-dealers to purchase and sell securities on behalf of the portfolios. The
Fund has had the same manager since inception and, for the most recent fiscal
year, the portfolios paid the Manager fees at these annual rates based on a
percentage of average daily net assets: MidCap Growth Portfolio--.80%; Growth
and Balanced Portfolios--.75%.
Portfolio Managers
David Alger, Ron Tartaro and Steven Thumm are the individuals responsible for
the day-to-day management of the portfolios' investments. Mr. Alger, a manager
of all of the portfolios since their inception, has been employed by the Manager
as Executive Vice President and Director of Research since 1971, and as
President since 1995. Mr. Tartaro, a co-manager of the MidCap Growth, Growth and
Balanced Portfolios, has been employed by the Manager since 1990, as a senior
research analyst until 1995 and as a Senior Vice President and co-manager since
1995. Steven Thumm serves as co-manager of the Balanced Portfolio. He has been
employed by the Manager as a fixed income analyst since 1991.
[GRAPHIC]
Shareholder Information
Distributor
Fred Alger & Company, Incorporated
30 Montgomery Street
Jersey City, NJ 07302
Transfer Agent
Alger Shareholder Services, Inc.
30 Montgomery Street
Jersey City, NJ 07302
Net Asset Value
The price of one share is its "net asset value," or NAV. The NAV for each
portfolio is calculated as of the close of business (normally 4:00 p.m. Eastern
time) every day the New York Stock Exchange is open. Generally, the Exchange is
closed on weekends and various national holidays. It may close on other days
from time to time.
The Fund generally values the assets of each portfolio on the basis of market
quotations or, where market quotations are not readily available, on the basis
of fair value as determined by the Manager under procedures adopted by the
Fund's Board of Trustees. Short-term money market instruments held by the
portfolios are valued on the basis of amortized cost.
Dividends and Distributions
The Fund declares and pays dividends and distributions by the portfolios
annually. The Fund expects that these annual payments to shareholders will
consist of both capital gains and net investment income.
Federal income taxation of separate accounts of insurance companies, variable
annuity contracts and variable life insurance contracts is discussed in the
prospectuses of participating insurance companies. Generally, distributions by
the Fund will not be taxable to holders of variable annuity contracts or
variable life insurance policies if the insurance company separate accounts to
which those distributions are made meet certain requirements, including certain
diversification requirements that the Fund has undertaken to meet, under the
Internal Revenue Code. Participants in qualified pension and retirement plans
ordinarily will not be subject to taxation on dividends from net investment
income and distributions from net realized capital gains until they receive a
distribution of the dividends from their plan accounts. Generally, distributions
from plan accounts are taxable as ordinary income at the rate applicable to each
participant at the time of distribution. In certain cases, distributions
6
<PAGE>
made to a participant prior to the participant's reaching age 59-1/2 are subject
to a penalty tax equivalent to 10% of the distributed amount, in addition to the
ordinary income tax payable on such amount.
Because everyone's tax situation is unique, see a tax advisor about federal,
state and local tax consequences of investing in the Fund.
NAV (net asset value) is computed by adding
together the value of the portfolio's investments
plus cash and other assets, subtracting its liabilities
and then dividing the result by the number of
its outstanding shares.
Purchasing and Redeeming Fund Shares
The Fund is an investment vehicle for variable annuity contracts and variable
life insurance policies offered by the separate accounts of life insurance
companies, as well as qualified pension and retirement plans. An individual
cannot invest in a portfolio directly, but may do so only through one of these
sources. The Fund's shares are held in the names of the separate accounts and
plans.
Shares of the Fund can be purchased or redeemed on any day the New York Stock
Exchange is open. They will be processed at the NAV next calculated after the
purchase or redemption request is received in good order by the Transfer Agent.
All orders for purchase of shares are subject to acceptance by the Fund or its
Transfer Agent. The Transfer Agent pays for redemptions within 7 days after it
accepts a redemption request.
The Fund may redeem some shares "in kind," which means that some of the proceeds
will be paid with securities the Fund owns instead of cash.
7
<PAGE>
[GRAPHIC]
Financial Highlights
The financial highlights table is intended to help you understand each
portfolio's financial performance for the periods shown. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). The financial highlights have been audited by Arthur Andersen
LLP, the Fund's independent public accountants. Arthur Andersen LLP's report,
along with the Fund's financial statements, are included in the Annual Report,
which is available upon request.
Note that the Financial Highlights do not reflect charges and deductions which
are, or may be, imposed under variable annuity contracts, variable life
insurance policies, or pension or retirement plans. Such charges and deductions
are described in the prospectus for the contract or policy accompanying this
prospectus or in the plan documents.
Alger American Growth Portfolio
For a share outstanding throughout the year
<TABLE>
<CAPTION>
Year Ended December 31,
=================================================================================================================================
1999 1998 1997 1996 1995
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 53.22 $ 42.76 $ 34.33 $ 31.16 $ 23.13
------------- ------------- ------------- ------------- -------------
Net investment income (loss) (0.03) 0.09 0.13 0.12 0.02
Net realized and unrealized gain (loss)
on investments 16.66 18.32 8.66 4.00 8.33
------------- ------------- ------------- ------------- -------------
Total from investment operations 16.63 18.41 8.79 4.12 8.35
------------- ------------- ------------- ------------- -------------
Dividends from net investment income (0.08) (0.13) (0.13) (0.02) (0.07)
Distributions from net realized gains (5.39) (7.82) (0.23) (0.93) (0.25)
------------- ------------- ------------- ------------- -------------
Total Distributions (5.47) (7.95) (0.36) (0.95) (0.32)
------------- ------------- ------------- ------------- -------------
Net asset value, end of year $ 64.38 $ 53.22 $ 42.76 $ 34.33 $ 31.16
============= ============= ============= ============= =============
Total Return 33.74% 48.07% 25.75% 13.35% 36.37%
============= ============= ============= ============= =============
Ratios and Supplemental Data:
Net assets, end of year (000's omitted) $ 3,387,526 $ 1,905,719 $ 1,072,529 $ 991,028 $ 502,974
============= ============= ============= ============= =============
Ratio of expenses to average net assets 0.79% 0.79% 0.79% 0.79% 0.85%
============= ============= ============= ============= =============
Ratio of net investment income (loss)
to average net assets (0.03%) 0.25% 0.27% 0.50% 0.18%
============= ============= ============= ============= =============
Portfolio Turnover Rate 135.13% 127.38% 129.50% 82.86% 118.33%
============= ============= ============= ============= =============
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31,
============================================================================================================================
1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 24.67 $ 20.17 $ 18.00 $ 12.86 $ 12.41
----------- ----------- ----------- ----------- -----------
Net investment income (loss) 0.07 0.03 0.03 0.08(i) 0.07
Net realized and unrealized gain (loss)
on investments 0.15 4.50 2.19 5.11 0.44
----------- ----------- ----------- ----------- -----------
Total from investment operations 0.22 4.53 2.22 5.19 0.51
----------- ----------- ----------- ----------- -----------
Dividends from net investment income (0.03) (0.03) (0.03) (0.05) (0.06)
Distributions from net realized gains (1.73) -- (0.02) -- --
----------- ----------- ----------- ----------- -----------
Total Distributions (1.76) (0.03) (0.05) (0.05) (0.06)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 23.13 $ 24.67 $ 20.17 $ 18.00 $ 12.86
=========== =========== =========== =========== ===========
Total Return 1.45% 22.47% 12.38% 40.39% 4.14%
=========== =========== =========== =========== ===========
Ratios and Supplemental Data:
Net assets, end of year (000's omitted) $ 150,390 $ 74,878 $ 30,316 $ 10,094 $ 1,228
=========== =========== =========== =========== ===========
Ratio of expenses to average net assets 0.86% 0.97% 0.99% 1.29% 1.50%(ii)
=========== =========== =========== =========== ===========
Ratio of net investment income (loss)
to average net assets 0.48% 0.25% 0.33% 0.52% 1.69%
=========== =========== =========== =========== ===========
Portfolio Turnover Rate 111.76% 112.64% 63.91% 58.95% 86.77%
=========== =========== =========== =========== ===========
</TABLE>
(i) Amount was computed based on average shares outstanding during the year.
(ii) Ratio has been reduced by 2.31% for the year ended December 31, 1990, due
to expense reimbursements.
9
<PAGE>
Alger American Balanced Portfolio (i)
For a share outstanding throughout the year
<TABLE>
<CAPTION>
Year Ended December 31,
================================================================================================================================
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 12.98 $ 10.76 $ 9.24 $ 13.64 $ 10.80
---------- ---------- ---------- ---------- ----------
Net investment income (loss) 0.15 0.19 0.17 0.21(ii) 0.33(ii)
Net realized and unrealized gain (loss)
on investments 3.45 3.02 1.63 1.01 2.73
---------- ---------- ---------- ---------- ----------
Total from investment operations 3.60 3.21 1.80 1.22 3.06
---------- ---------- ---------- ---------- ----------
Dividends from net investment income (0.17) (0.18) (0.12) (0.73) (0.22)
Distributions from net realized gains (0.84) (0.81) (0.16) (4.89) --
---------- ---------- ---------- ---------- ----------
Total Distributions (1.01) (0.99) (0.28) (5.62) (0.22)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 15.57 $ 12.98 $ 10.76 $ 9.24 $ 13.64
========== ========== ========== ========== ==========
Total Return 29.21% 31.51% 19.82% 10.17% 28.62%
========== ========== ========== ========== ==========
Ratios and Supplemental Data:
Net assets, end of year (000's omitted) $ 56,327 $ 28,208 $ 16,614 $ 10,486 $ 3,671
========== ========== ========== ========== ==========
Ratio of expenses to average net assets 0.93% 0.92% 1.01% 1.14% 1.00%
========== ========== ========== ========== ==========
Decrease reflected in above expense
ratios due to expense reimbursements -- -- -- -- --
========== ========== ========== ========== ==========
Ratio of net investment income (loss)
to average net assets 1.66% 2.09% 2.14% 2.06% 2.49%
========== ========== ========== ========== ==========
Portfolio Turnover Rate 118.74% 94.64% 105.01% 68.66% 113.02%
========== ========== ========== ========== ==========
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31,
===============================================================================================================================
1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 11.58 $ 10.77 $ 10.02 $ 10.01 $ 10.04
---------- ---------- ---------- ---------- ----------
Net investment income (loss) 0.20 0.15 0.22 0.45 0.66
Net realized and unrealized gain (loss)
on investments (0.70) 0.69 0.72 0.01 (0.03)
---------- ---------- ---------- ---------- ----------
Total from investment operations (0.50) 0.84 0.94 0.46 0.63
---------- ---------- ---------- ---------- ----------
Dividends from net investment income (0.13) (0.03) (0.19) (0.45) (0.66)
Distributions from net realized gains (0.15) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total Distributions (0.28) (0.03) (0.19) (0.45) (0.66)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 10.80 $ 11.58 $ 10.77 $ 10.02 $ 10.01
========== ========== ========== ========== ==========
Total Return (4.27%) 7.79% 9.48% 4.70% 6.53%
========== ========== ========== ========== ==========
Ratios and Supplemental Data:
Net assets, end of year (000's omitted) $ 10,394 $ 7,848 $ 4,009 $ 1,487 $ 365
========== ========== ========== ========== ==========
Ratio of expenses to average net assets 1.08% 1.25% 1.25% 1.25% 1.25%
========== ========== ========== ========== ==========
Decrease reflected in above expense
ratios due to expense reimbursements -- 0.19% 0.42% 1.37% 4.81%
========== ========== ========== ========== ==========
Ratio of net investment income (loss)
to average net assets 2.30% 2.05% 1.99% 4.22% 6.60%
========== ========== ========== ========== ==========
Portfolio Turnover Rate 78.80% 85.46% 15.27% -- 132.55%
========== ========== ========== ========== ==========
</TABLE>
(i) Prior to October 1, 1992, the Alger American Balanced Portfolio was the
Alger American Fixed Income Portfolio.
(ii) Amount was computed based on average shares outstanding during the year.
11
<PAGE>
Alger American MidCap Growth Portfolio
For a share outstanding throughout the period
<TABLE>
<CAPTION>
From
May 3, 1993
(commencement
of operations) to
Year Ended December 31, December 31,
====================================================================================================================================
1999 1998 1997 1996 1995 1994 1993(i)
-------- --------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 28.87 $ 24.18 $ 21.35 $ 19.44 $ 13.46 $ 13.72 $ 10.00
-------- --------- -------- -------- -------- ------- -------
Net investment income (loss) (0.05) 0.00(ii) (0.04) 0.03 (0.03) 0.00(ii) (0.02)
Net realized and unrealized gain (loss)
on investments 8.00 6.95 3.20 2.29 6.01 (0.21) 3.88
-------- --------- -------- -------- -------- ------- -------
Total from investment operations 7.95 6.95 3.16 2.32 5.98 (0.21) 3.86
-------- --------- -------- -------- -------- ------- -------
Dividends from net investment income -- -- (0.01) -- -- -- --
Distributions from net realized gains (4.59) (2.26) (0.32) (0.41) -- (0.05) (0.14)
-------- --------- -------- -------- -------- ------- -------
Total distributions (4.59) (2.26) (0.33) (0.41) -- (0.05) (0.14)
-------- --------- -------- -------- -------- ------- -------
Net asset value, end of period $ 32.23 $ 28.87 $ 24.18 $ 21.35 $ 19.44 $ 13.46 $ 13.72
======== ========= ======== ======== ======== ======= =======
Total Return 31.85% 30.30% 15.01% 11.90% 44.45% (1.54%) 38.67%
======== ========= ======== ======== ======== ======= =======
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) $931,397 $ 689,571 $444,967 $394,847 $185,349 $62,178 $21,301
======== ========= ======== ======== ======== ======= =======
Ratio of expenses to average net assets 0.85% 0.84% 0.84% 0.84% 0.90% 0.97% 1.50%(iii)
======== ========= ======== ======== ======== ======= =======
Ratio of net investment income (loss)
to average net assets (0.21%) 0.00% (0.15%) 0.08% (0.25%) 0.03% (0.58%)
======== ========= ======== ======== ======== ======= =======
Portfolio Turnover Rate 162.30% 152.21% 151.98% 90.97% 104.74% 83.96% 67.22%
======== ========= ======== ======== ======== ======= =======
</TABLE>
(i) Ratios have been annualized; total return has not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
(iii) Amount has been reduced by 0.03% due to expense reimbursements.
12
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For Fund Information:
By telephone: 1-800-992-3863
By mail: The Alger American Fund
One World Trade Center
Suite 9333
New York, NY 10048
Statement of Additional Information
For more detailed information about the Fund and its policies, please read the
Statement of Additional Information, which is incorporated by reference into (is
legally made a part of) this Prospectus. You can get a free copy of the
Statement of Additional Information by calling the Fund's toll-free number or by
writing to the address above. The Statement of Additional Information is on file
with the Securities and Exchange Commission.
Annual and Semi-annual Reports
Additional information about the Fund's investments is available in the Fund's
annual and semi-annual reports to shareholders. In the Fund's annual report you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during the period covered by the
report. You can receive free copies of these reports, and make inquiries of the
Fund, by calling the Fund's toll-free number or by writing to the address above.
Another way you can review and copy Fund documents is by visiting the SEC's
Public Reference Room in Washington, D.C. Copies can also be obtained, for a
duplicating fee by E-mail request to [email protected] or by writing to the
SEC's Public Reference Section, Washington, DC 20549-0102. Information on the
operation of the Public Reference Room is available by calling 1-202-942-8090.
Fund documents are also available on the EDGAR database on the SEC's internet
site at http://www.sec.gov.
Distributor: Fred Alger & Company, Incorporated
The Alger American Fund
SEC File #811-5550
