THE
ALGER
AMERICAN
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
ANNUAL REPORT
------------------------------
DECEMBER 31, 1999
<PAGE>
January 24, 2000
Fellow Shareholders:
THE YEAR IN REVIEW
Investors may look back on the 1990s as one of remarkable opportunity. From
January 1, 1990 through December 31, 1999, the value of the U.S. stock market
rose 433% as measured by the S&P 500 Index. In 1999 the S&P 500 rose 21.04%,
marking its fifth consecutive year of 20%+ returns.
The last two years have seen an increase in day-to-day volatility, however, and
this trend continued in 1999. This higher volatility was driven by concerns over
the stability of global financial systems and the shorter-term outlook for U.S.
interest rates.
In the first quarter of 1999, strong economic growth - a 3.7% rise in GDP in the
first quarter - contributed to the Dow Jones Industrial Average's push above all
records to close above 10,000 in March. From May to July, the Dow traded in the
11,000 range before falling back on fears of higher interest rates and concerns
that stocks had become overvalued. During the second quarter, concerns about
potential inflation increased as unemployment remained at its lowest levels
since 1970. While core inflation remained in the 2% range, oil prices began
rising early in the year and had nearly doubled by July. This has not had a
broad effect on stock market prices, yet it bears watching in coming months.
Concerns about potential increases in core inflation led the Federal Reserve to
adopt a tightening bias during the second quarter. In the following months, the
Federal Open-Market Committee twice raised short-term interest rates to
forestall potential increases in inflation. In the bond markets higher interest
rates pushed prices lower, particularly at the short and long ends of the
maturity spectrum.
In this environment, market gains in the first quarter of 1999 were led by the
large-cap, blue-chip growth companies, as investors sought a sense of security
in the wake of 1998's Asian currency crisis and Russian debt default. As
recovery in Asia became more certain, the second quarter saw a resurgence of
interest in smaller-cap issues. Small-cap value stocks turned in the best
results and large-cap growth stocks turned in the worst.
The third quarter of 1999 saw an overall decline in domestic stocks. The S&P 500
fell 6.25% while the S&P MidCap 400 Index dropped 8.40%. Small capitalization
stocks, as measured by the Russell 2000 Growth Index, fared slightly better,
falling 4.91% during the same quarter. Overall, growth stocks again outperformed
value stocks. Factors affecting the market's performance in the third quarter
included the potential impact on earnings of technology companies from the
earthquake in Taiwan and continued uncertainty about interest rates. At the
conclusion of the fourth quarter, there were substantial gains in all market
segments, with the S&P 500 returning 14.88%, led by a recovery in technology
stocks. The technology-laden Nasdaq Composite rose 48.18% during the quarter,
while the Russell 2000 Growth Index returned 33.39%.
PORTFOLIO MATTERS
By maintaining a focus on bottom-up stock selection in a market environment that
has evidenced clear biases toward certain segments of the market, The Alger
American Fund Portfolios outperformed their market benchmarks for the 12 months
ended December 31, 1999.
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
For the fiscal year ended December 31, 1999, the Small Capitalization Portfolio
returned 43.42%, compared to a 43.10% rise in the Russell 2000 Growth Index.
Small-cap stocks were harder hit early in 1999 by last year's global financial
crisis and trailed larger issues during the first quarter, moving into positive
territory at the end of March and through the second quarter before falling back
somewhat during the third quarter. Recovery in the technology sector in
particular contributed to strong fourth-quarter results and to the Portfolio's
performance.
ALGER AMERICAN GROWTH PORTFOLIO
For the fiscal year ended December 31, 1999, the Growth Portfolio gained 33.74%,
substantially outperforming the 21.04% gain in the benchmark S&P 500 Index. The
Portfolio benefited from the market's preference for large-capitalization stocks
through the first quarter, with the technology sector leading the market's
surge.
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
For the fiscal year ended December 31, 1999, the Income and Growth Portfolio
gained 42.45% compared with the 21.04% gain in the benchmark S&P 500 Index. The
Portfolio's performance reflects the market's strong bias toward large,
blue-chip growth companies during the first quarter and the overall positive
market environment that prevailed during the fourth quarter. During the fourth
quarter alone, the Portfolio gained 35.96%, reflecting the resurgence in
consumer and technology stocks.
ALGER AMERICAN BALANCED PORTFOLIO
For the fiscal year ended December 31, 1999, the Balanced Portfolio returned
29.21%, outperforming both the S&P 500 Index return of 21.04% and the Lehman
Brothers Government/Corporate Bond Index return of -2.14%. The Portfolio's
results reflected the strong stock market performance, which helped offset the
generally negative environment for fixed-income investments during the year, and
judicious weighting of the Portfolio's allocation between stock and fixed-income
investments. Bond prices, which move in the opposite direction of interest
rates, were volatile during the year and were negatively affected by fears that
the Federal Reserve would further raise interest rates to forestall potential
inflation increases.
1
<PAGE>
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
For the fiscal year ended December 31, 1999, the MidCap Growth Portfolio
returned 31.85%, substantially outperforming the benchmark S&P MidCap 400 Index,
which rose 14.72% during the year. Mid-cap stocks as a group trailed larger
issues during the first quarter of 1999 but benefited during the second quarter
from the market's rotation toward smaller issues. In the fourth quarter,
technology stocks led the resurgence in mid-cap issues. The Portfolio benefited
from holdings in technology, retail, and consumer stocks.
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
For the fiscal year ended December 31, 1999 the Leveraged AllCap Portfolio
gained 78.06% compared to the 21.04% rise in the S&P 500 Index. The Portfolio
benefited from exposure to all segments of the market as investor biases pushed
first large-cap issues and then smaller companies to the fore. The Portfolio's
weightings in high-performing technology and Internet stocks contributed to its
strong performance.
LOOKING AHEAD
The Alger American Fund is managed to pursue its investment objectives by
applying an investment philosophy which we at Fred Alger Management believe will
serve investors well as we enter the next millennium. Changing demographics, new
technologies, and ever-increasing sophistication in the financial markets will
create new opportunities in the decades to come. Through rigorous fundamental
research, coupled with advanced analytic capabilities, we will continue to seek
out companies that offer investors the potential for superior returns.
Respectfully submitted,
/s/ David D. Alger
---------------------------------
David D. Alger
President
2
<PAGE>
TABLE OF CONTENTS
Alger American Growth Portfolio:
Portfolio Highlights .................................................. 4
Schedule of Investments ............................................... 5
Financial Highlights .................................................. 7
Alger American Small Capitalization Portfolio:
Portfolio Highlights .................................................. 8
Schedule of Investments ............................................... 9
Financial Highlights .................................................. 11
Alger American Income and Growth Portfolio:
Portfolio Highlights .................................................. 12
Schedule of Investments ............................................... 13
Financial Highlights .................................................. 15
Alger American Balanced Portfolio:
Portfolio Highlights .................................................. 16
Schedule of Investments ............................................... 17
Financial Highlights .................................................. 20
Alger American MidCap Growth Portfolio:
Portfolio Highlights .................................................. 21
Schedule of Investments ............................................... 22
Financial Highlights .................................................. 24
Alger American Leveraged AllCap Portfolio:
Portfolio Highlights .................................................. 25
Schedule of Investments ............................................... 26
Financial Highlights .................................................. 28
Statements of Assets and Liabilities ...................................... 29
Statements of Operations .................................................. 30
Statement of Cash Flows (Alger American Leveraged AllCap Portfolio) ....... 31
Statements of Changes in Net Assets ....................................... 32
Notes to Financial Statements ............................................. 33
Report of Independent Public Accountants .................................. 36
3
<PAGE>
ALGER AMERICAN GROWTH PORTFOLIO
Portfolio Highlights Through December 31, 1999 (Unaudited)
HYPOTHETICAL $10,000 INVESTMENT--10 Years Ended 12/31/99
[LINE CHART OMITTED]
Alger American Growth S&P 500 Index
--------------------- -------------
1/1/90 10000 10000
12/31/90 10414 9690
12/91 14619 12643
12/92 16429 13607
12/93 20120 14978
12/94 20411 15175
12/95 27834 20880
12/96 31550 25673
12/97 39673 34240
12/98 58744 44026
12/99 78567 53287
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger American Growth Portfolio and the S&P 500 Index for
the ten years ended December 31, 1999. The figures for both the Alger American
Growth Portfolio and the S&P 500 Index, an unmanaged index of common stocks,
include reinvestment of dividends.
PERFORMANCE COMPARISON THROUGH December 31, 1999
<TABLE>
<CAPTION>
Average Annual Total Returns
Since Inception
1 Year 5 Years 10 Years 1/9/89
----------------------------------------------------------
<S> <C> <C> <C> <C>
Alger American Growth Portfolio 33.74% 30.94% 22.89% 23.05%
S&P 500 Index 21.04% 28.56% 18.21% 19.22%
----------------------------------------------------------
</TABLE>
PERFORMANCE FIGURES DO NOT REFLECT DEDUCTION OF INSURANCE CHARGES AGAINST ASSETS
OR ANNUITIES. IF THESE CHARGES WERE DEDUCTED, THE TOTAL RETURN FIGURES WOULD BE
LOWER. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
4
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999
- --------------------------------------------------------------------------------
SHARES COMMON STOCKS--90.5% VALUE
------ -----
ADVERTISING--.5%
170,000 Omnicom Group Inc.............................. $ 17,000,000
-------------
AEROSPACE--4.1%
1,139,000 Honeywell International Inc.................... 65,706,063
1,106,800 United Technologies Corp....................... 71,942,000
-------------
137,648,063
AUTOMOTIVE--1.0%
543,600 Harley Davidson, Inc........................... 34,824,375
-------------
BIO-TECHNOLOGY--3.4%
1,713,400 Amgen Inc.*.................................... 102,911,087
167,900 Biogen Inc.*................................... 14,187,550
-------------
117,098,637
-------------
BROADCASTING--1.1%
198,000 Clear Channel Communications Inc.*............. 17,671,500
194,400 EchoStar Communications Corp., Cl. A*.......... 18,954,000
-------------
36,625,500
-------------
BUILDING & CONSTRUCTION--.3%
414,500 Masco Corp..................................... 10,517,937
-------------
BUSINESS SERVICES--1.0%
1,299,200 IMS Health Inc................................. 35,322,000
-------------
COMMUNICATION EQUIPMENT--9.2%
1,106,300 Cisco Systems, Inc.*........................... 118,512,388
792,400 Corning Inc.................................... 102,170,075
626,400 Motorola, Inc.................................. 92,237,400
-------------
312,919,863
-------------
COMMUNICATIONS--12.1%
1,492,000 America Online Inc.*........................... 112,552,750
881,550 At Home Corp. Series A*........................ 37,796,456
953,500 AT&T Corp. Liberty Media Group, Cl. A*......... 54,111,125
945,100 Comcast Corp. Cl. A Special.................... 47,786,619
364,400 Cox Communications Inc., Cl. A*................ 18,766,600
533,550 MCI Worldcom Inc.*............................. 28,311,497
565,900 MediaOne Group Inc.*........................... 43,468,194
156,000 Qualcomm Inc.*................................. 27,475,500
581,100 Sprint Corp.................................... 39,115,294
-------------
409,384,035
-------------
COMPUTER RELATED & BUSINESS EQUIPMENT--2.8%
1,856,200 Dell Computer Corp.*........................... 94,666,200
-------------
COMPUTER SERVICES--5.8%
663,400 eBay Inc.*..................................... $ 83,049,387
259,794 Yahoo Inc.*.................................... 112,409,616
-------------
195,459,003
-------------
COMPUTER SOFTWARE--5.7%
564,200 Intuit Inc.*................................... 33,816,737
1,367,000 Microsoft Corporation*......................... 159,597,250
-------------
193,413,987
-------------
ENERGY & ENERGY SERVICES--2.6%
2,206,000 Halliburton Co................................. 88,791,500
-------------
FINANCIAL SERVICES--11.9%
143,500 American Express Co............................ 23,856,875
1,197,369 Bank of America Corp........................... 60,092,957
1,757,050 Citigroup Inc.................................. 97,626,091
418,437 Firstar Corp................................... 8,839,482
835,200 Household International Inc.................... 31,111,200
500,900 Kansas City Southern Industries, Inc............ 37,379,663
196,100 Merrill Lynch & Co., Inc....................... 16,374,350
884,400 Morgan Stanley Dean Witter & Co................ 126,248,100
-------------
401,528,718
-------------
FREIGHT--2.5%
1,222,400 United Parcel Service Inc., Cl. B.............. 84,345,600
-------------
INSURANCE--2.5%
783,883 American International Group, Inc.............. 84,757,349
-------------
LEISURE & ENTERTAINMENT--.4%
314,000 Carnival Corp.................................. 15,013,125
-------------
PHARMACEUTICALS--6.2%
956,100 Bristol Myers Squibb Co........................ 61,369,669
1,299,650 Pfizer Inc..................................... 42,157,397
1,280,500 Warner-Lambert Co.............................. 104,920,969
-------------
208,448,035
-------------
RETAILING--7.7%
508,100 Amazon.com Inc.*............................... 38,679,112
645,800 Best Buy Company Inc.*......................... 32,411,088
212,900 Costco Wholesale Corp.*........................ 19,427,125
1,534,200 Home Depot, Inc................................ 105,188,588
951,800 Wal-Mart Stores Inc............................ 65,793,175
-------------
261,499,088
-------------
5
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999 (Cont'd)
SHARES COMMON STOCKS (Cont'd) VALUE
------ -----
SEMICONDUCTOR CAPITAL EQUIPMENT--4.2%
811,700 Applied Materials Inc.*........................ $ 102,832,243
583,300 Teradyne, Inc.*................................ 38,497,800
--------------
141,330,043
--------------
SEMICONDUCTORS--5.5%
858,100 Altera Corporation*............................ 42,529,581
993,500 Intel Corp..................................... 81,777,469
650,900 Linear Technology Corporation.................. 46,580,031
156,000 Texas Instruments, Incorporated................ 15,112,500
--------------
185,999,581
--------------
Total Common Stocks
(Cost $2,244,799,324)........................ 3,066,592,639
--------------
PREFERRED STOCK--.6%
COMMUNICATIONS
102,500 Nokia Corporation, ADR
(Cost $ 17,261,765)............................ 19,475,000
--------------
Principal
Amount
------ SHORT-TERM INVESTMENTS--11.6%
SHORT-TERM CORPORATE NOTES--10.8%
$50,000,000 AT&T Capital Corporation,
6.36%, 1/14/00.............................. 49,885,167
50,000,000 Corporate Receivables Corp.,
6.60%, 1/14/00(a)........................... 49,880,833
50,000,000 Ford Motor Credit Company,
6.41%, 1/13/00.............................. 49,893,167
40,000,000 Forrestal Funding Master Trust,
5.50%, 1/24/00(a)........................... 39,859,444
50,000,000 Inter-American Development Bank,
5.74%, 1/12/00.............................. 49,912,306
40,000,000 Merrill Lynch & Co., Inc.,
5.55%, 1/27/00.............................. 39,839,667
35,000,000 Petrofina (DE) Inc.,
6.25%, 1/10/00.............................. 34,945,312
50,000,000 Toronto-Dominion Holdings (USA) Inc.,
5.94%, 1/27/00.............................. 49,785,517
--------------
TOTAL SHORT-TERM CORPORATE NOTES
(Cost $364,001,413).......................... 364,001,413
--------------
Value
-----
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--.8%
Securities Held Under Repurchase
Agreements, 2.87%, 1/03/00, with
Bear, Stearns & Co. Inc., dtd 12/31/99,
repurchase price $27,462,298; collateralized
by U.S. Treasury Notes and U.S. Treasury Bonds
(Total par value $28,515,000 due
1/15/09-4/15/28).................................... $ 27,455,731
-------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $391,457,144).................................. 391,457,144
-------------
TOTAL INVESTMENTS
(Cost $2,653,518,233)(b)...................... 102.7% 3,477,524,783
Liabilities in Excess of Other Assets........... (2.7) (89,998,876)
----- --------------
NET ASSETS...................................... 100.0% $3,387,525,907
===== ==============
- --------------------------------------------------------------------------------
* Non-income producing security.
(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 December 31, 1999, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $2,653,518,233, amounted to
$824,006,550 which consisted of aggregate gross unrealized appreciation of
$904,324,526 and aggregate gross unrealized depreciation of $80,317,976.
See Notes to Financial Statements.
6
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
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>
See Notes to Financial Statements.
7
<PAGE>
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
Portfolio Highlights Through December 31, 1999 (Unaudited)
HYPOTHETICAL $10,000 INVESTMENT--10 Years Ended 12/31/99
[LINE CHART OMITTED]
Russell 2000 Alger American
Growth Index Small Capitalization
------------ --------------------
1/90 10000 10000
12/31/90 10871 8259
12/91 17127 12486
12/92 17736 13457
12/93 20091 15254
12/94 19212 14884
12/95 27724 19500
12/96 28884 21696
12/97 32174 24505
12/98 37171 24809
12/99 53309 35501
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger American Small Capitalization Portfolio and the
Russell 2000 Growth Index for the ten years ended December 31, 1999. The figures
for both the Alger American Small Capitalization Portfolio and the Russell 2000
Growth Index, an unmanaged index of common stocks of small capitalization
companies, include reinvestment of dividends.
PERFORMANCE COMPARISON THROUGH December 31, 1999
<TABLE>
<CAPTION>
Average Annual Total Returns
Since Inception
1 Year 5 Years 10 Years 9/21/88
---------------------------------------------------------
<S> <C> <C> <C> <C>
Alger American Small
Capitalization Portfolio 43.42% 22.64% 18.22% 20.86%
Russell 2000 Growth Index 43.10% 18.99% 13.51% 13.73%
---------------------------------------------------------
</TABLE>
PERFORMANCE FIGURES DO NOT REFLECT DEDUCTION OF INSURANCE CHARGES AGAINST ASSETS
OR ANNUITIES. IF THESE CHARGES WERE DEDUCTED, THE TOTAL RETURN FIGURES WOULD BE
LOWER. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
8
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999
SHARES COMMON STOCKS--90.4% VALUE
- ------ -----
ADVERTISING--1.8%
170,600 Young & Rubicam Inc............................ $ 12,069,950
------------
AIRLINES--.5%
111,000 SkyWest Inc.................................... 3,108,000
------------
BIO-TECHNOLOGY--4.8%
413,500 Cygnus, Inc.*+................................. 7,546,375
48,000 IDEC Pharmaceuticals Corporation*.............. 4,716,000
34,800 Medimmune Inc.*................................ 5,772,450
120,000 Protein Design Labs Inc.*...................... 8,400,000
57,600 Sepracor Inc.*+................................ 5,713,200
------------
32,148,025
------------
BROADCASTING--6.1%
65,400 Acme Communications Inc.*+..................... 2,174,550
192,000 Adelphia Business Solutions Inc., Cl. A*....... 9,216,000
185,100 Citadel Communications Corp.*.................. 12,008,363
40,000 Cumulus Media Inc., Cl. A*..................... 2,030,000
99,600 Emmis Communications Corp., CI. A*+............ 12,414,205
139,900 Salem Communications Corp., Cl. A*............. 3,165,238
------------
41,008,356
------------
BUSINESS SERVICES--11.4%
50,000 Ariba Inc.*.................................... 8,868,750
243,300 BISYS Group Inc.*+............................. 15,875,325
274,100 eSpeed Inc.*................................... 9,747,682
176,300 FactSet Research Systems Inc................... 14,037,888
102,100 F.Y.I. Incorporated*........................... 3,471,400
138,700 Getty Images Inc.*+............................ 6,778,963
288,000 The Management Network Group Inc.*............. 9,396,000
225,600 Marketing Services Group Inc.*................. 3,778,800
168,100 Source Information Management Co.*+............ 2,815,675
70,000 United Stationers Inc.*........................ 1,999,375
------------
76,769,858
------------
COMMUNICATION EQUIPMENT--1.7%
120,000 Alpha Industries Inc.*......................... 6,877,500
99,600 Aware Inc.*.................................... 3,622,950
42,000 MCK Communications Inc.*....................... 945,000
------------
11,445,450
------------
COMMUNICATIONS--2.6%
90,400 AirGate PCS Inc.*.............................. 4,768,600
21,000 Cox Radio, Inc., Cl. A*........................ 2,094,750
160,900 ITC DeltaCom Inc.*+............................ 4,444,863
94,500 Primus Telecommunications Group Incorporated*.. 3,614,625
51,000 Time Warner Telecom Inc., Cl. A*............... 2,546,812
------------
17,469,650
------------
COMPUTER RELATED & BUSINESS EQUIPMENT--1.3%
229,000 Antec Corp.*................................... 8,358,500
12,000 Digital Lightwave Inc.*........................ 768,000
------------
9,126,500
------------
COMPUTER SERVICES--10.1%
168,800 CNET Inc.*..................................... $ 9,579,400
83,600 Critical Path, Inc.*........................... 7,889,750
49,300 eBay Inc.*..................................... 6,171,744
134,400 Exodus Communications, Inc.*................... 11,936,400
86,200 Insituform Technologies Inc.*.................. 2,435,150
164,000 Official Payments Corp.*+...................... 8,528,000
93,087 QRS Corp.*..................................... 9,774,135
73,400 Vignette Corp.*................................ 11,964,200
------------
68,278,779
------------
COMPUTER SOFTWARE--7.7%
127,800 Advent Software Inc.*.......................... 8,235,113
196,700 BSquare Corp.*................................. 8,249,106
42,000 Business Objects ADS........................... 5,612,250
361,900 Intuit Inc.*................................... 21,691,381
29,600 Micromuse Inc.*................................ 5,032,000
84,100 Radiant Systems Inc.*+......................... 3,379,769
------------
52,199,619
------------
CONSUMER PRODUCTS--2.9%
33,400 Furniture Brands International Inc.*........... 734,800
175,500 Mettler-Toledo International Inc.*............. 6,701,906
276,600 Pittway Corp., Cl. A........................... 12,395,138
------------
19,831,844
------------
ENERGY & ENERGY SERVICES--1.0%
107,800 Calpine Corp.*................................. 6,899,200
------------
FOODS & BEVERAGES--1.2%
199,000 Beringer Wine Estates Holdings, Cl. B*......... 7,935,125
------------
HEALTH CARE--2.6%
141,200 Cytyc Corporation*............................. 8,622,025
202,600 ENZON Inc.*.................................... 8,787,775
------------
17,409,800
------------
MEDICAL DEVICES--2.3%
109,400 Caliper Technologies Corp.*+................... 7,302,450
150,400 CONMED Corporation*............................ 3,891,600
210,100 Varian Inc.*................................... 4,727,250
------------
15,921,300
------------
MEDICAL SERVICES--2.0%
292,500 Hooper Holmes Inc.............................. 7,531,875
150,000 ILEX Oncology Inc.*............................ 3,618,750
99,400 MedQuist Inc.*................................. 2,565,763
------------
13,716,388
------------
OIL & GAS--1.7%
163,100 B.J. Services Company*......................... 6,819,619
460,900 Varco International Inc.*+..................... 4,695,417
------------
11,515,036
------------
9
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999
- -------------------------------------------------------------------------------
SHARES COMMON STOCKS (Cont'd) VALUE
------ -----
PHARMACEUTICALS--2.0%
172,300 Alpharma Inc., Cl. A*+......................... $ 5,298,225
100,000 BioCryst Pharmaceuticals Inc.*+................ 2,950,000
75,600 Celgene Corp.*+................................ 5,292,000
------------
13,540,225
------------
RETAILING--12.9%
94,000 Bed Bath & Beyond Inc.*........................ 3,266,500
420,300 BJ's Wholesale Club Inc.*...................... 15,340,950
100,900 Cost Plus Inc.*................................ 3,594,563
384,400 Ethan Allen Interiors Inc.+.................... 12,324,825
407,700 Linens'n Things Inc.*.......................... 12,078,113
265,100 Michaels Stores Inc.*.......................... 7,555,350
94,850 Pacific Sunwear of California Inc.*+........... 3,023,344
227,200 Sharper Image Corp.*........................... 2,882,600
245,000 Sunglass Hut International Inc*................ 2,756,250
84,100 Too Inc.*...................................... 1,450,725
105,100 Tuesday Morning Corp.*+........................ 1,937,780
320,600 Tweeter Home Entertainment Group Inc.*......... 11,381,300
84,100 Valuevision International Inc., Cl. A*......... 4,819,981
100,150 Williams Sonoma Inc.*.......................... 4,606,900
------------
87,019,181
------------
SEMICONDUCTOR CAPITAL EQUIPMENT--5.7%
133,200 ASM Lithography Holding NV*+................... 15,151,500
236,500 Atmi Inc.*..................................... 7,819,281
230,200 PRI Automation, Inc.*.......................... 15,452,175
------------
38,422,956
------------
SEMICONDUCTORS--7.2%
42,000 Applied Micro Circuits Corp.*.................. 5,344,500
151,200 Conexant Systems Inc.*......................... 10,035,900
101,300 Dallas Semiconductor Corp...................... 6,527,518
206,100 Lattice Semiconductor Corp.*................... 9,712,463
157,200 Microchip Technology Incorporated*............. 10,758,375
116,800 Vitesse Semiconductor Corp.*................... 6,124,700
------------
48,503,456
------------
TRANSPORTATION--.3%
42,000 Forward Air Corporation *...................... 1,821,750
------------
MISCELLANEOUS--.6%
278,600 Coinstar Inc.*+................................ 3,900,400
------------
TOTAL COMMON STOCKs
(Cost $407,124,415).......................... 610,060,848
------------
Principal
Amount SHORT-TERM INVESTMENTS--11.9% Value
------ -----
SHORT-TERM CORPORATE NOTES--10.4%
$10,000,000 Forrestal Funding Master Trust,
5.50%, 1/24/00(a)............................ $ 9,964,861
25,000,000 Inter-American Development Bank,
5.74%, 1/12/00............................... 24,956,153
15,000,000 Merrill Lynch & Co., Inc.,
6.55%, 1/19/00............................... 14,950,875
20,000,000 Petrofina (DE) Inc.,
6.25%, 1/11/00............................... 19,965,277
------------
TOTAL SHORT-TERM CORPORATE NOTES
(Cost $69,837,166)........................... 69,837,166
------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--1.5%
Securities Held Under Repurchase
Agreements, 2.87%, 1/03/00, with
Bear, Stearns & Co. Inc., dtd 12/31/99,
repurchase price $10,348,327; collateralized
by U.S. Treasury Notes
(par value $10,725,000 due 1/15/09)............... 10,345,853
------------
Total Short-Term Investments
(Cost $80,183,019)................................ 80,183,019
------------
TOTAL INVESTMENTS
(Cost $487,307,434)(b)...................... 102.3% 690,243,867
Liabilities in Excess of Other Assets......... (2.3) (15,379,680)
----- ------------
NET ASSETS......................... 100.0% $674,864,187
===== ============
- --------------------------------------------------------------------------------
+ Securities partially or fully on loan.
* Non-income producing security.
(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 December 31, 1999, the net unrealized appreciation on investments,
based on cost for federal income tax purposes of $487,307,434, amounted to
$202,936,433 which consisted of aggregate gross unrealized appreciation of
$212,312,675 and aggregate gross unrealized depreciation of $9,376,242.
See Notes to Financial Statements.
10
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
FINANCIAL HIGHLIGHTS
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........... $ 43.97 $ 43.75 $ 40.91 $ 39.41 $ 27.31
-------- ---------- -------- ---------- --------
Net investment loss.......................... (0.12)(i) (0.02) (0.05)(i) (0.04)(i) (0.09)
Net realized and unrealized gain
(loss) on investments...................... 16.98 6.30 4.45 1.70 12.19
-------- ---------- -------- ---------- --------
Total from investment operations......... 16.86 6.28 4.40 1.66 12.10
Distributions from net realized gains........ (5.68) (6.06) (1.56) (0.16) --
-------- ---------- -------- ---------- --------
Net asset value, end of year................. $ 55.15 $ 43.97 $ 43.75 $ 40.91 $ 39.41
======== ========== ======== ========== ========
Total Return................................. 43.42% 15.53% 11.39% 4.18% 44.31%
======== ========== ======== ========== ========
Ratios and Supplemental Data:
Net assets, end of year (000's omitted)... $674,864 $1,216,584 $997,586 $1,469,518 $984,212
======== ========== ======== ========== ========
Ratio of expenses to average net assets... 0.90% 0.89% 0.89% 0.88% 0.92%
======== ========== ======== ========== ========
Ratio of net investment loss to
average net assets.................... (0.28%) (0.20%) (0.12%) (0.09%) (0.48%)
======== ========== ======== ========== ========
Portfolio Turnover Rate................... 182.25% 142.90% 104.43% 110.04% 80.66%
======== ========== ======== ========== ========
</TABLE>
(i) Amount was computed based on average shares outstanding during the year.
See Notes to Financial Statements.
11
<PAGE>
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
PORTFOLIO HIGHLIGHTS THROUGH DECEMBER 31, 1999 (UNAUDITED)
HYPOTHETICAL $10,000 INVESTMENT--10 Years Ended 12/31/99
[LINE CHART OMITTED]
Alger American
Income & Growth S&P 500 Index
--------------- -------------
1/1/90 10000 10000
12/90 10028 9690
12/91 12386 12643
12/92 13456 13607
12/93 14847 14978
12/94 13618 15175
12/95 18402 20880
12/96 22024 25673
12/97 30015 34240
12/98 39737 44026
12/99 56605 53287
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger American Income and Growth Portfolio and the S&P
500 Index for the ten years ended December 31, 1999. Figures for the Alger
American Income and Growth Portfolio and the S&P 500 Index, an unmanaged index
of common stocks, include reinvestment of dividends.
PERFORMANCE COMPARISON THROUGH December 31, 1999
<TABLE>
<CAPTION>
Average Annual Total Returns
Since Inception
1 Year 5 Years 10 Years 11/15/88
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Alger American Income
and Growth Portfolio 42.45% 32.97% 18.93% 17.71%
S&P 500 Index 21.04% 28.56% 18.21% 19.23%
--------------------------------------------------------------
</TABLE>
PERFORMANCE FIGURES DO NOT REFLECT DEDUCTION OF INSURANCE CHARGES AGAINST ASSETS
OR ANNUITIES. IF THESE CHARGES WERE DEDUCTED, THE TOTAL RETURN FIGURES WOULD BE
LOWER. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
12
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999
SHARES COMMON STOCKS--90.2% VALUE
------ -----
ADVERTISING--4.1%
21,600 Omnicom Group Inc.............................. $ 2,160,000
22,600 Young & Rubicam Inc............................ 1,598,950
------------
3,758,950
------------
AEROSPACE--1.4%
22,600 Honeywell International Inc.................... 1,303,738
------------
BIO-TECHNOLOGY--3.9%
59,800 Amgen Inc.*.................................... 3,591,738
------------
BROADCASTING--3.9%
12,900 Cablevision Systems Corp., Cl. A*+............. 973,950
23,700 Clear Channel Communications Inc.*............. 2,115,225
5,300 EchoStar Communications Corp., Cl. A*.......... 516,750
------------
3,605,925
------------
COMMUNICATION EQUIPMENT--6.5%
28,000 Cisco Systems, Inc.*........................... 2,999,500
20,100 Motorola, Inc.................................. 2,959,725
------------
5,959,225
------------
COMMUNICATIONS--15.8%
51,600 America Online Inc.*........................... 3,892,575
28,700 At Home Corp. Series A*........................ 1,230,513
15,500 AT&T Corp Liberty Media Group, Cl. A*.......... 879,625
49,400 Comcast Corp., Cl. A Special................... 2,497,788
20,600 Nextel Communications Inc., Cl. A*............. 2,124,375
4,400 Qualcomm Inc.*................................. 774,950
12,900 Sprint (PCS Group) Corp.*+..................... 1,322,250
23,200 Time Warner Inc................................ 1,680,550
------------
14,402,626
------------
COMPUTER RELATED & BUSINESS EQUIPMENT--1.0%
17,600 Dell Computer Corp.*........................... 897,600
------------
COMPUTER SERVICES--13.1%
12,900 CNET Inc.*..................................... 732,075
20,600 eBay Inc.*..................................... 2,578,863
31,000 Exodus Communications, Inc.*................... 2,753,187
13,700 Yahoo Inc.*.................................... 5,927,818
------------
11,991,943
------------
COMPUTER SOFTWARE--4.0%
31,400 Microsoft Corporation*......................... 3,665,950
------------
CONGLOMERATE--2.3%
13,400 General Electric Co............................ 2,073,650
------------
CONSUMER PRODUCTS--2.2%
75,000 Cendant Corp.*................................. 1,992,187
------------
ENERGY & ENERGY SERVICES--2.4%
53,600 Halliburton Co................................. $ 2,157,400
------------
FINANCIAL SERVICES--8.2%
17,300 American Express Co............................ 2,876,125
18,109 Bank of America Corp........................... 908,845
51,100 Citigroup Inc.................................. 2,839,244
5,700 Morgan Stanley Dean Witter & Co................ 813,675
------------
7,437,889
------------
INSURANCE--.7%
5,781 American International Group, Inc.............. 625,071
------------
PHARMACEUTICALS--2.8%
25,200 Bristol Myers Squibb Co........................ 1,617,525
11,200 Warner-Lambert Co.............................. 917,700
------------
2,535,225
------------
RETAILING--5.8%
13,400 Bed Bath & Beyond Inc.*........................ 465,650
7,100 Costco Wholesale Corp.*........................ 647,875
42,450 Home Depot, Inc................................ 2,910,478
17,850 Wal-Mart Stores Inc............................ 1,233,881
------------
5,257,884
------------
SEMICONDUCTOR CAPITAL EQUIPMENT--2.2%
10,300 Applied Materials Inc.*........................ 1,304,881
10,300 Teradyne, Inc.*................................ 679,800
------------
1,984,681
------------
SEMICONDUCTORS--9.9%
8,200 Broadcom Corp., Cl. A*......................... 2,233,475
27,800 Conexant Systems Inc.*......................... 1,845,225
23,200 Linear Technology Corporation.................. 1,660,250
25,800 Texas Instruments, Incorporated................ 2,499,375
15,500 Vitesse Semiconductor Corp.*................... 812,781
------------
9,051,106
------------
Total Common Stocks
(Cost $58,808,720)........................... 82,292,788
------------
Principal SHORT-TERM INVESTMENTS--5.6%
Amount SHORT-TERM CORPORATE NOTES--3.3%
------
$3,000,000 Toronto-Dominion Holdings (USA) Inc.,
5.94%, 1/27/00
(Cost $2,987,134)............................ 2,987,134
------------
13
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999 (Cont'd)
SHORT-TERM INVESTMENTS (Cont'd) VALUE
-----
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--2.3%
Securities Held Under Repurchase
Agreements, 2.87%, 1/03/00, with
Bear, Stearns & Co. Inc., dtd 12/31/99,
repurchase price $2,143,143;
collateralized by U.S. Treasury Notes
(par value $2,225,000 due 1/15/09)............. $ 2,142,631
------------
Total Short-Term Investments
(Cost $5,129,765)........................... 5,129,765
------------
TOTAL INVESTMENTS
(Cost $63,938,485)(a).......................... 95.8% 87,422,553
Other Assets in Excess of Liabilities............ 4.2 3,827,327
----- ------------
NET ASSETS....................................... 100.0% $ 91,249,880
===== ============
- --------------------------------------------------------------------------------
+ Securities partially or fully on loan.
* Non-income producing security.
(a) At December 31, 1999, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $63,938,485, amounted to
$23,484,068 which consisted of aggregate gross unrealized appreciation of
$24,536,752 and aggregate gross unrealized depreciation of $1,052,684.
See Notes to Financial Statements.
14
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
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........... $ 13.12 $ 10.99 $ 8.42 $ 17.79 $ 13.30
-------- -------- ---------- -------- --------
Net investment income........................ 0.00 0.03 0.03 0.09(i) 0.11(i)
Net realized and unrealized gain
(loss) on investments...................... 5.26 3.30 2.94 1.87 4.54
-------- -------- ---------- -------- --------
Total from investment operations......... 5.26 3.33 2.97 1.96 4.65
-------- -------- ---------- -------- --------
Dividends from net investment income......... (0.03) (0.04) (0.04) (0.33) (0.16)
Distributions from net realized gains........ (0.77) (1.16) (0.36) (11.00) --
-------- -------- ---------- -------- --------
Total Distributions...................... (0.80) (1.20) (0.40) (11.33) (0.16)
-------- -------- ---------- -------- --------
Net asset value, end of year................. $ 17.58 $ 13.12 $ 10.99 $ 8.42 $ 17.79
======== ======== ========== ======== ========
Total Return................................. 42.45% 32.39% 36.29% 19.68% 35.13%
======== ======== ========== ======== ========
Ratios and Supplemental Data:
Net assets, end of year (000's omitted)... $ 91,250 $ 77,926 $ 47,399 $ 20,910 $ 8,639
======== ======== ========== ======== ========
Ratio of expenses to average net assets... 0.70% 0.70% 0.74% 0.81% 0.75%
======== ======== ========== ======== ========
Ratio of net investment income to
average net assets...................... 0.03% 0.31% 0.56% 0.94% 0.61%
======== ======== ========== ======== ========
Portfolio Turnover Rate................... 193.23% 131.67% 150.09% 121.60% 164.05%
======== ======== ========== ======== ========
</TABLE>
(i) Amount was computed based on average shares outstanding during the year.
See Notes to Financial Statements.
15
<PAGE>
ALGER AMERICAN BALANCED PORTFOLIO
PORTFOLIO HIGHLIGHTS THROUGH DECEMBER 31, 1999 (UNAUDITED)
HYPOTHETICAL $10,000 INVESTMENT--10 Years Ended 12/31/99
[LINE CHART OMITTED]
Alger Lehman brothers
American Gov't/Corp
Balanced Bond Index S&P 500 Index
-------- --------------- -------------
1/90 10000 10000 10000
12/31/90 10653 10829 9690
12/91 11154 12576 12643
12/92 12212 13528 13607
12/93 13163 15024 14978
12/94 12601 14497 15175
12/95 16208 17286 20880
12/96 17856 17788 25673
12/97 21394 19523 34240
12/98 28136 21371 44026
12/99 36356 20914 53287
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger American Balanced Portfolio, the S&P 500 Index, and
the Lehman Brothers Government/Corporate Bond Index for the ten years ended
December 31, 1999. Figures for the Alger American Balanced Portfolio, the S&P
500 Index, an unmanaged index of common stocks, and the Lehman Brothers
Government/Corporate Bond Index, an unmanaged index of government and corporate
bonds, include reinvestment of dividends and/or interest.
PERFORMANCE COMPARISON THROUGH December 31, 1999
<TABLE>
<CAPTION>
Average Annual Total Returns
Since Inception
1 Year 5 Years 10 Years 9/5/89
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Alger American Balanced Portfolio 29.21% 23.60% 13.78% 13.61%
S&P 500 Index 21.04% 28.56% 18.21% 17.78%
Lehman Brothers Gov't/Corp Bond Index (2.14%) 7.60% 7.66% 7.82%
--------------------------------------------------------------
</TABLE>
PERFORMANCE FIGURES DO NOT REFLECT DEDUCTION OF INSURANCE CHARGES AGAINST ASSETS
OR ANNUITIES. IF THESE CHARGES WERE DEDUCTED, THE TOTAL RETURN FIGURES WOULD BE
LOWER. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
16
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999
SHARES COMMON STOCKS--61.1% VALUE
------ -----
ADVERTISING--.3%
1,800 Omnicom Group Inc.............................. $ 180,000
------------
AEROSPACE--2.4 %
10,900 Honeywell International Inc.................... 628,794
11,000 United Technologies Corp....................... 715,000
------------
1,343,794
------------
AUTOMOTIVE--.8%
6,700 Harley Davidson, Inc........................... 429,219
------------
BIO-TECHNOLOGY--2.4%
20,200 Amgen Inc.*.................................... 1,213,262
1,800 Biogen Inc.*................................... 152,100
------------
1,365,362
------------
BROADCASTING--.9%
2,000 Clear Channel Communications Inc.*............. 178,500
3,200 EchoStar Communications Corp., Cl. A*.......... 312,000
------------
490,500
------------
BUILDING & CONSTRUCTION--.2%
4,400 Masco Corp..................................... 111,650
------------
BUSINESS SERVICES--.7%
13,500 IMS Health Inc................................. 367,031
------------
COMMUNICATION EQUIPMENT--5.9%
12,200 Cisco Systems, Inc.*........................... 1,306,925
8,800 Corning Inc.................................... 1,134,650
6,000 Motorola, Inc.................................. 883,500
------------
3,325,075
------------
COMMUNICATIONS--9.0%
19,000 America Online Inc.*........................... 1,433,312
12,726 At Home Corp., Series A*....................... 545,628
10,400 AT&T Corp Liberty Media Group, Cl. A*.......... 590,200
9,000 Comcast Corp., Cl. A Special................... 455,062
5,700 Cox Communications Inc., Cl. A*................ 293,550
8,250 MCI Worldcom Inc.*............................. 437,766
8,000 MediaOne Group Inc.*........................... 614,500
1,600 Qualcomm Inc.*................................. 281,800
6,400 Sprint Corp.................................... 430,800
------------
5,082,618
------------
COMPUTER RELATED & BUSINESS EQUIPMENT--1.6%
17,600 Dell Computer Corp.*........................... 897,600
------------
COMPUTER SERVICES--4.0%
7,700 eBay Inc.*..................................... 963,944
3,044 Yahoo Inc.*.................................... 1,317,101
------------
2,281,045
------------
COMPUTER SOFTWARE--3.7%
5,700 Intuit Inc.*................................... 341,644
14,800 Microsoft Corporation*......................... 1,727,900
------------
2,069,544
------------
ENERGY & ENERGY SERVICES--1.7%
23,850 Halliburton Co................................. $ 959,962
------------
FINANCIAL SERVICES--8.7%
1,500 American Express Co............................ 249,375
15,016 Bank of America Corp........................... 753,615
20,200 Citigroup Inc.................................. 1,122,362
4,391 Firstar Corp................................... 92,760
9,400 Household International Inc.................... 350,150
9,300 Kansas City Southern Industries, Inc........... 694,012
2,100 Merrill Lynch & Co., Inc....................... 175,350
9,200 Morgan Stanley Dean Witter & Co................ 1,313,300
3,300 Paine Webber Group Inc......................... 128,081
------------
4,879,005
------------
FREIGHT--1.7%
13,800 United Parcel Service Inc., Cl. B.............. 952,200
------------
INSURANCE--1.6%
8,637 American International Group, Inc.............. 933,876
------------
LEISURE & ENTERTAINMENT--.3%
3,400 Carnival Corp.................................. 162,562
------------
PHARMACEUTICALS--4.0%
10,600 Bristol Myers Squibb Co........................ 680,387
14,166 Pfizer Inc..................................... 459,510
13,900 Warner-Lambert Co.............................. 1,138,931
------------
2,278,828
------------
RETAILING--4.9%
7,100 Amazon.com Inc.*............................... 540,488
5,800 Best Buy Company Inc.*......................... 291,088
1,800 Costco Wholesale Corp.*........................ 164,250
17,325 Home Depot, Inc................................ 1,187,845
8,150 Wal-Mart Stores Inc............................ 563,370
------------
2,747,041
------------
SEMICONDUCTOR CAPITAL EQUIPMENT--3.0%
9,700 Applied Materials Inc.*........................ 1,228,869
7,000 Teradyne, Inc.*................................ 462,000
------------
1,690,869
------------
SEMICONDUCTORS--3.3%
9,400 Altera Corporation*............................ 465,887
9,000 Intel Corp..................................... 740,812
6,600 Linear Technology Corporation.................. 472,312
1,700 Texas Instruments, Incorporated................ 164,689
------------
1,843,700
------------
TOTAL COMMON STOCKS
(Cost $24,918,426)........................... 34,391,481
------------
PREFERRED STOCK--.4%
COMMUNICATIONS
1,200 Nokia Corporation, ADR
(Cost $202,089).............................. 228,000
------------
17
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999 (Cont'd)
PRINCIPAL
AMOUNT CORPORATE BONDS--15.4% VALUE
------ -----
AUTOMOTIVE--.4%
$200,000 Ford Capital B.V.,
9.50%, 6/01/10............................... $ 225,850
------------
COMMUNICATIONS--2.9%
300,000 MCI Worldcom Inc.,
8.25%, 1/20/23............................... 310,635
800,000 TCI Communications Inc.,
8.00%, 8/01/05............................... 825,832
500,000 Tele-Communications Inc.,
7.25%, 8/01/05............................... 501,870
------------
1,638,337
------------
ELECTRIC & GAS COMPANIES--1.6%
100,000 Cincinnati Gas & Electric Co.,
7.20%, 10/01/23.............................. 92,091
400,000 Potomac Electric Power Co.,
7.00%, 1/15/24............................... 368,000
500,000 Washington Gas Light Co.,
6.51%, 8/18/08............................... 470,285
------------
930,376
------------
FINANCIAL SERVICES--6.9%
800,000 Associates Corp. North America,
5.75%, 11/01/03.............................. 764,760
BankAmerica Corp.,
100,000 7.125%, 5/12/05.............................. 99,079
800,000 7.20%, 4/15/06............................... 794,592
200,000 6.625%, 10/15/07............................. 190,054
400,000 Bankers Trust Corp.,
7.00%, 3/13/18............................... 355,448
260,000 Chase Manhattan Corp.,
8.50%, 2/15/02............................... 267,795
200,000 Citicorp,
7.125%, 6/01/03.............................. 199,784
800,000 Goldman Sachs Group,
6.65%, 5/15/09............................... 747,760
200,000 Merrill Lynch & Co., Inc.,
6.75%, 4/30/01............................... 199,488
290,000 Morgan Stanley Dean Witter & Co.,
7.50%, 2/01/24............................... 264,787
------------
3,883,547
------------
INSURANCE--1.7%
$500,000 Beneficial Corp.,
6.575%, 12/16/02............................. $ 491,950
500,000 Loews Corp.,
7.625%, 6/01/23.............................. 460,820
------------
952,770
------------
LEISURE & ENTERTAINMENT--.5%
300,000 Disney(Walt) Company,
6.375%, 3/30/01.............................. 298,941
------------
RETAILING--1.4%
800,000 Wal-Mart Stores Inc.,
6.55%, 8/10/04............................... 788,032
------------
TOTAL CORPORATE BONDS
(Cost $9,047,036)............................ 8,717,853
------------
U.S. GOVERNMENT & AGENCY
OBLIGATIONS--14.5%
255,000 Federal Home Loan Bank Corp.,
6.55%, 9/09/13............................... 229,459
Federal Home Loan Mortgage Corp.,
800,000 6.00%, 6/23/04............................... 770,376
800,000 5.75%, 4/15/08............................... 739,624
600,000 7.08%, 3/17/14............................... 553,314
Federal National Mortgage Assoc.,
200,000 8.50%, 2/01/05............................... 200,312
500,000 6.96%, 4/02/07............................... 498,205
300,000 6.42%, 7/14/08............................... 280,077
633,000 7.00%, 3/04/13............................... 586,810
400,000 6.75%, 2/04/28............................... 345,064
U.S. Treasury Notes,
800,000 6.125%, 12/31/01............................. 799,128
800,000 6.25%, 2/15/03............................... 799,000
800,000 6.00%, 8/15/04............................... 789,496
800,000 6.50%, 10/15/06.............................. 800,248
800,000 5.625%, 5/15/08.............................. 755,377
------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $8,383,454)............................ 8,146,490
------------
18
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999 (Cont'd)
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--9.3% VALUE
------ -----
SHORT-TERM CORPORATE NOTES--8.9%
$2,000,000 Bell Atlantic Network Funding Corporation,
6.28%, 1/05/00.......................... $ 1,998,607
1,500,000 Indianapolis Power & Light Company,
6.45%, 1/12/00.......................... 1,497,044
1,500,000 Standard Life Assurance,
6.45%, 1/12/00.......................... 1,497,044
------------
TOTAL SHORT-TERM CORPORATE NOTES
(Cost $4,992,695)....................... 4,992,695
------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--.4%
Securities Held Under Repurchase
Agreements, 2.87%, 1/03/00, with
Bear, Stearns & Co. Inc., dtd 12/31/99,
repurchase price $239,372; collateralized
by U.S. Treasury Notes
(par value $250,000 due 2/28/03)......... 239,315
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $5,232,010)........................ 5,232,010
------------
TOTAL INVESTMENTS (COST $47,783,015)(a)............ 100.7% 56,715,834
Liabilities in Excess of Other Assets.............. (.7) (389,326)
----- ------------
Net Assets......................................... 100.0% $ 56,326,508
===== ============
- --------------------------------------------------------------------------------
* Non-income producing security.
(a) At December 31, 1999, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $47,783,015, amounted to
$8,932,819 which consisted of aggregate gross unrealized appreciation of
$10,278,764 and aggregate gross unrealized depreciation of $1,345,945.
See Notes to Financial Statements.
19
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
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........................ 0.15 0.19 0.17 0.21(i) 0.33(i)
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%
======= ======= ======= ======= =======
Ratio of net investment income 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>
(i) Amount was computed based on average shares outstanding during the year.
See Notes to Financial Statements.
20
<PAGE>
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
Portfolio Highlights Through December 31, 1999 (Unaudited)
HYPOTHETICAL $10,000 INVESTMENT Since Inception May 3, 1993
[LINE CHART OMITTED]
Alger
America Midcap S&P 500 Index
-------------- -------------
5/3/93 10000 10000
12/93 13867 11297
12/94 13653 10893
12/95 19722 14264
12/96 22068 17001
12/97 25380 22483
12/98 33069 26781
12/99 43601 30723
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger American MidCap Growth Portfolio and the S&P MidCap
400 Index on May 3, 1993, the inception date of the Alger American MidCap Growth
Portfolio. The figures for both the Alger American MidCap Growth Portfolio and
the S&P MidCap 400 Index, an unmanaged index of common stocks, include
reinvestment of dividends.
PERFORMANCE COMPARISON THROUGH December 31, 1999
<TABLE>
<CAPTION>
Average Annual Total Returns
1 Year 5 Years Since Inception
-----------------------------------------------
<S> <C> <C> <C>
Alger American MidCap Growth Portfolio 31.85% 26.14% 24.72%
S&P MidCap 400 Index 14.72% 23.05% 18.34%
-----------------------------------------------
</TABLE>
PERFORMANCE FIGURES DO NOT REFLECT DEDUCTION OF INSURANCE CHARGES AGAINST ASSETS
OR ANNUITIES. IF THESE CHARGES WERE DEDUCTED, THE TOTAL RETURN FIGURES WOULD BE
LOWER. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
21
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999
SHARES COMMON STOCKS--92.7% VALUE
------ -----
ADVERTISING--1.6%
75,100 Lamar Advertising Co., Cl. A*+................. $ 4,548,243
144,000 Young & Rubicam Inc............................ 10,188,000
------------
14,736,243
------------
AUTOMOTIVE--2.6%
382,000 Harley Davidson, Inc........................... 24,471,875
------------
BIO-TECHNOLOGY--4.9%
33,200 Affymetrix Inc.*............................... 5,633,625
294,400 Biogen Inc.*................................... 24,876,800
91,100 Medimmune Inc.*................................ 15,111,212
------------
45,621,637
------------
BROADCASTING--1.4%
130,900 EchoStar Communications Corp., Cl. A*.......... 12,762,750
------------
BUSINESS SERVICES--6.5%
44,800 Ariba Inc.*.................................... 7,946,400
37,600 Digital Island Inc.*........................... 3,576,700
121,700 eSpeed Inc.*................................... 4,327,956
695,250 Fiserv Inc.*................................... 26,636,766
648,883 IMS Health Inc................................. 17,641,507
------------
60,129,329
------------
COMMUNICATION EQUIPMENT--5.2%
57,500 Brocade Communications Systems Inc.* 10,177,500
183,300 Corning Inc.................................... 23,634,244
51,000 Emulex Corp.*.................................. 5,737,500
44,000 VeriSign Inc.*................................. 8,401,250
------------
47,950,494
------------
COMMUNICATIONS--2.0%
441,864 At Home Corp., Series A*....................... 18,944,918
------------
COMPUTER SERVICES--6.3%
223,400 Amdocs Limited*+............................... 7,707,300
427,300 CNET Inc.*..................................... 24,249,275
104,900 eBay Inc.*..................................... 13,132,169
72,600 Exodus Communications, Inc.*................... 6,447,788
44,000 Vignette Corp.*................................ 7,172,000
------------
58,708,532
------------
COMPUTER SOFTWARE--5.7%
15,000 Commerce One Inc.*............................. 2,947,500
119,400 CSG Systems International Inc.*................ 4,761,075
680,700 Intuit Inc.*................................... 40,799,456
66,600 Legato Systems Inc.*........................... 4,582,912
------------
53,090,943
------------
ENERGY & ENERGY SERVICES--8.1%
487,939 Calpine Corp.*................................. $ 31,228,096
235,700 Devon Energy Corporation....................... 7,748,637
219,400 EOG Resources Inc.+............................ 3,853,212
951,400 Nabors Industries Inc.*........................ 29,433,938
278,800 Union Pacific Resources Group Inc.............. 3,554,700
------------
75,818,583
------------
FINANCIAL SERVICES--6.1%
454,600 Kansas City Southern Industries Inc............ 33,924,525
593,250 Paine Webber Group Inc......................... 23,025,516
------------
56,950,041
------------
INDUSTRIAL EQUIPMENT--2.7%
130,100 SPX Corp.*..................................... 10,513,706
272,100 Waters Corp.*.................................. 14,421,300
------------
24,935,006
------------
LEISURE & ENTERTAINMENT--2.5%
1,153,457 Mandalay Resort Group*......................... 23,213,322
------------
MEDICAL SERVICES--3.3%
334,500 Express Scripts Inc., Cl. A*................... 21,408,000
93,200 Gilead Sciences Inc.*.......................... 5,044,450
150,600 MedQuist Inc.*................................. 3,887,362
------------
30,339,812
------------
OIL & GAS--3.1%
698,700 B.J. Services Company*......................... 29,214,394
------------
PHARMACEUTICALS--3.3%
505,700 Forest Laboratories, Inc.*..................... 31,068,944
------------
RESTAURANTS & LODGING--2.5%
898,250 Outback Steakhouse, Inc.*...................... 23,298,359
------------
RETAILING--10.1%
389,200 Abercrombie & Fitch Co., Cl. A*................ 10,386,775
167,500 Amazon.com Inc.*............................... 12,750,938
632,600 Bed Bath & Beyond Inc.*........................ 21,982,850
275,700 Best Buy Company Inc.*......................... 13,836,694
130,000 BJ's Wholesale Club Inc.*...................... 4,745,000
177,800 Gucci Group N.V................................ 20,358,100
221,900 Williams Sonoma Inc.*.......................... 10,207,400
------------
94,267,757
------------
SEMICONDUCTOR CAPITAL EQUIPMENT--4.8%
81,200 ASM Lithography Holding NV*.................... 9,236,500
98,200 Atmi Inc.*..................................... 3,246,738
487,300 Teradyne, Inc.*................................ 32,161,800
------------
44,645,038
------------
22
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN MIDCAP GROWTH
PORTFOLIO SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999 (Cont'd)
SHARES COMMON STOCKS (CONT'D) VALUE
------ -----
SEMICONDUCTORS--10.0%
523,500 Altera Corporation*............................ $ 25,945,969
67,200 Conexant Systems Inc.*......................... 4,460,400
370,700 Linear Technology Corporation.................. 26,528,219
249,000 Maxim Integrated Products, Inc.*............... 11,749,688
204,300 Microchip Technology Incorporated*............. 13,981,781
34,500 Qlogic Corp.*.................................. 5,515,688
90,400 Vitesse Semiconductor Corp.*................... 4,740,350
------------
92,922,095
------------
TOTAL COMMON STOCKS
(Cost $668,920,070).......................... 863,090,072
------------
Principal
Amount SHORT-TERM INVESTMENTS--8.4%
------
SHORT-TERM CORPORATE NOTES--7.0%
$10,000,000 Inter-American Development Bank,
5.74%, 1/12/00............................... 9,982,461
35,000,000 Kansas City Power & Light Company,
6.50%, 1/10/00............................... 34,943,125
20,000,000 Standard Life Assurance,
6.45%, 1/13/00............................... 19,957,080
------------
TOTAL SHORT-TERM CORPORATE NOTES
(Cost $64,882,666)........................... 64,882,666
------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--1.4%
Securities Held Under Repurchase
Agreements, 2.87%, 1/03/00, with
Bear, Stearns & Co. Inc., dtd 12/31/99,
repurchase price $13,866,787; collateralized
by U.S. Treasury Notes
(par value $14,220,000 due 2/28/03).......... 13,863,471
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $78,746,137)........................... 78,746,137
------------
TOTAL INVESTMENTS
(Cost $747,666,207)(a)............................ 101.1% 941,836,209
Liabilities in Excess of Other Assets............... (1.1) (10,438,910)
----- ------------
NET ASSETS.......................................... 100.0% $931,397,299
===== ============
- --------------------------------------------------------------------------------
+ Securities partially or fully on loan.
* Non-income producing security.
(a) At December 31, 1999, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $747,666,207, amounted to
$194,170,002 which consisted of aggregate gross unrealized appreciation of
$209,579,714, and aggregate gross unrealized depreciation of $15,409,712.
See Notes to Financial Statements.
23
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
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........... $ 28.87 $ 24.18 $ 21.35 $ 19.44 $ 13.46
-------- -------- -------- -------- --------
Net investment income (loss)................. (0.05) 0.00(i) (0.04) 0.03 (0.03)
Net realized and unrealized gain
(loss) on investments...................... 8.00 6.95 3.20 2.29 6.01
-------- -------- -------- -------- --------
Total from investment operations......... 7.95 6.95 3.16 2.32 5.98
-------- -------- -------- -------- --------
Dividends from net investment income......... -- -- (0.01) -- --
Distributions from net realized gains........ (4.59) (2.26) (0.32) (0.41) --
Total Distributions...................... (4.59) (2.26) (0.33) (0.41) --
-------- -------- -------- -------- --------
Net asset value, end of year................. $ 32.23 $ 28.87 $ 24.18 $ 21.35 $ 19.44
======== ======== ======== ======== ========
Total Return................................. 31.85% 30.30% 15.01% 11.90% 44.45%
======== ======== ======== ======== ========
Ratios and Supplemental Data:
Net assets, end of year (000's omitted).... $931,397 $689,571 $444,967 $394,847 $185,349
======== ======== ======== ======== ========
Ratio of expenses to average net assets.... 0.85% 0.84% 0.84% 0.84% 0.90%
======== ======== ======== ======== ========
Ratio of net investment income (loss) to
average net assets....................... (0.21%) 0.00% (0.15%) 0.08% (0.25%)
======== ======== ======== ======== ========
Portfolio Turnover Rate..................... 162.30% 152.21% 151.98% 90.97% 104.74%
======== ======== ======== ======== ========
</TABLE>
(i) Amount was computed based on average shares outstanding during the year.
See Notes to Financial Statements.
24
<PAGE>
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
PORTFOLIO HIGHLIGHTS THROUGH DECEMBER 31, 1999 (Unaudited)
HYPOTHETICAL $10,000 INVESTMENT Since Inception January 25, 1995
[LINE CHART OMITTED]
Alger America
Leveraged AllCap S&P 500 Index
---------------- -------------
1/95 10000 10000
12/95 17430 13489
12/96 19529 16586
12/97 23372 22120
12/98 36888 28442
12/99 65683 34425
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger American Leveraged AllCap Portfolio and the S&P 500
Index on January 25, 1995, the inception date of the Alger American Leveraged
AllCap Portfolio. The figures for both the Alger American Leveraged AllCap
Portfolio and the S&P 500 Index, an unmanaged index of common stocks, include
reinvestment of dividends.
PERFORMANCE COMPARISON THROUGH December 31, 1999
<TABLE>
<CAPTION>
Average Annual
Total Returns
1 Year Since Inception
----------------------------------
<S> <C> <C>
Alger American Leveraged AllCap Portfolio 78.06% 46.44%
S&P 500 Index 21.04% 28.47%
----------------------------------
</TABLE>
PERFORMANCE FIGURES DO NOT REFLECT DEDUCTION OF INSURANCE CHARGES AGAINST ASSETS
OR ANNUITIES. IF THESE CHARGES WERE DEDUCTED, THE TOTAL RETURN FIGURES WOULD BE
LOWER. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
25
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999
SHARES COMMON STOCKS--92.2% VALUE
------ -----
ADVERTISING--1.5%
53,000 Omnicom Group Inc.............................. $ 5,300,000
------------
AEROSPACE--.4%
24,700 Honeywell International Inc.................... 1,424,881
------------
BIO-TECHNOLOGY--3.7%
220,300 Amgen Inc.*.................................... 13,231,769
------------
BROADCASTING--4.6%
54,000 Cablevision Systems Corp., Cl. A*+............. 4,077,000
78,000 Clear Channel Communications Inc.*............. 6,961,500
57,900 EchoStar Communications Corp., Cl. A*.......... 5,645,250
------------
16,683,750
------------
BUSINESS SERVICES--2.4%
30,000 Ariba Inc.*.................................... 5,321,250
34,800 Digital Island Inc.*........................... 3,310,350
------------
8,631,600
------------
COMMUNICATION EQUIPMENT--9.3%
49,000 Brocade Communications Systems Inc.*........... 8,673,000
104,500 Cisco Systems, Inc.*........................... 11,194,563
67,000 Motorola, Inc.................................. 9,865,750
17,600 SDL Inc.*...................................... 3,836,800
------------
33,570,113
------------
COMMUNICATIONS--14.9%
191,000 America Online Inc.*........................... 14,408,563
112,200 At Home Corp., Series A*....................... 4,810,575
206,000 Comcast Corp., Cl. A Special................... 10,415,875
108,000 Cox Communications Inc., Cl. A*................ 5,562,000
30,000 McLeodUSA Inc., Cl. A*+........................ 1,766,250
81,600 Nextel Communications Inc., Cl. A*............. 8,415,000
48,000 Qualcomm Inc.*................................. 8,454,000
------------
53,832,263
------------
COMPUTER RELATED & BUSINESS EQUIPMENT--3.2%
67,200 Dell Computer Corp.*........................... 3,427,200
106,400 Sun Microsystems Inc.*......................... 8,239,350
------------
11,666,550
------------
COMPUTER SERVICES--16.8%
97,600 CNET Inc.*..................................... 5,538,800
114,700 eBay Inc.*..................................... 14,359,006
166,000 Exodus Communications, Inc.*................... 14,742,875
30,000 Vignette Corp.*................................ 4,890,000
49,590 Yahoo Inc.*.................................... 21,456,973
------------
60,987,654
------------
COMPUTER SOFTWARE--5.2%
101,700 Intuit Inc.*................................... $ 6,095,644
110,200 Microsoft Corporation*......................... 12,865,850
------------
18,961,494
------------
CONSUMER PRODUCTS--1.0%
136,000 Cendant Corp.*................................. 3,612,500
------------
ENERGY & ENERGY SERVICES--2.1%
187,000 Halliburton Co................................. 7,526,750
------------
FINANCIAL SERVICES--6.5%
42,234 American Express Co............................ 7,021,402
71,527 Bank of America Corp........................... 3,589,761
181,750 Citigroup Inc.................................. 10,098,484
20,000 Morgan Stanley Dean Witter & Co................ 2,855,000
------------
23,564,647
------------
INSURANCE--.5%
15,437 American International Group, Inc.............. 1,669,126
------------
OIL & GAS--.4%
37,100 B.J. Services Company*......................... 1,551,244
------------
PHARMACEUTICALS--1.9%
54,674 Bristol Myers Squibb Co........................ 3,509,387
42,100 Warner-Lambert Co.............................. 3,449,568
------------
6,958,955
------------
RETAILING--3.6%
23,400 Costco Wholesale Corp.......................... 2,135,250
99,600 Home Depot, Inc................................ 6,828,825
61,900 Wal-Mart Stores Inc............................ 4,278,838
------------
13,242,913
------------
SEMICONDUCTOR CAPITAL EQUIPMENT--4.4%
55,000 Applied Materials Inc.*........................ 6,967,812
33,000 ASM Lithography Holding NV*.................... 3,753,750
80,800 Teradyne, Inc.*................................ 5,332,800
------------
16,054,362
------------
SEMICONDUCTORS--9.8%
58,000 Altera Corporation*............................ 2,874,625
28,100 Broadcom Corp., Cl. A*......................... 7,653,738
140,000 Conexant Systems Inc.*......................... 9,292,500
48,000 Linear Technology Corporation.................. 3,435,000
72,000 Texas Instruments, Incorporated................ 6,975,000
103,000 Vitesse Semiconductor Corp.*................... 5,401,063
------------
35,631,926
------------
TOTAL COMMON STOCKS
(Cost $223,646,841)........................... 334,102,497
------------
26
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1999 (Cont'd)
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS--5.6% VALUE
------ -----
Short-Term Corporate Notes--2.8%
$10,000,000 Constellation Energy Group,
6.35%, 1/10/00(a)
(Cost $9,984,125)............................ $ 9,984,125
------------
SECURITIES HELD UNDER
REPURCHASE AGREEMENTS--2.8%
Securities Held Under Repurchase
Agreements, 2.87%, 01/03/00, with
Bear, Stearns & Co. Inc., dtd 12/31/99,
repurchase price $10,390,042;
collateralized by U.S. Treasury Notes
& U.S. Treasury Strips (Total par value
$11,195,000 due 2/28/03-2/15/06)............. 10,387,558
------------
Total Short-Term Investments
(Cost $20,371,683)........................... 20,371,683
------------
TOTAL INVESTMENTS
(Cost $244,018,524)(b).......................... 97.8% 354,474,180
Other Assets in Excess of Liabilities............. 2.2 8,025,565
----- ------------
NET ASSETS........................................ 100.0% $362,499,745
===== ============
- --------------------------------------------------------------------------------
+ Securities partially or fully on loan.
* Non-income producing security.
(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 December 31, 1999, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $244,018,524, amounted to
$110,455,656 which consisted of aggregate gross unrealized appreciation of
$114,617,673 and aggregate gross unrealized depreciation of $4,162,017.
See Notes to Financial Statements.
27
<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
YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
----------------------------------------------------------- OPERATIONS)
1999 1998 1997 1996 TO DECEMBER 31, 1995(i)
---------- --------- --------- --------- ----------------------
<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........................ (0.09) (0.05) (0.03) (0.03)(ii) (0.03)
Net realized and unrealized gain
on investments........................... 25.93 12.99 3.84 2.14 7.46
---------- ---------- ---------- ---------- -------
Total from investment operations....... 25.84 12.94 3.81 2.11 7.43
Distributions from net realized gains...... (2.77) (1.21) -- (0.18) --
---------- ---------- ---------- ---------- -------
Net asset value, end of period............. $ 57.97 $ 34.90 $ 23.17 $ 19.36 $ 17.43
========== ========== ========== ========== =======
Total Return............................... 78.06% 57.83% 19.68% 12.04% 74.30%
========== ========== ========== ========== =======
Ratios and Supplemental Data:
Net assets, end of period
(000's omitted).......................... $ 362,500 $ 101,710 $ 53,488 $ 34,925 $ 5,497
========== ========== ========== ========== =======
Ratio of expenses excluding interest to
average net assets..................... 0.92% 0.93% 0.96% 1.06% 1.50%
========== ========== ========== ========== =======
Ratio of expenses including interest to
average net assets.................... 0.93% 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..................... (0.49%) (0.27%) (0.17%) (0.15%) (0.71%)
========== ========== ========== ========== =======
Portfolio Turnover Rate.................. 155.74% 143.59% 164.27% 102.10% 178.23%
========== ========== ========== ========== =======
Amount of debt outstanding
at end of period......................... -- -- -- -- --
========== ========== ========== ========== =======
Average amount of debt outstanding
during the period........................ $ 266,584 $ 246,101 $ 201,644 $ 76,079 $ 8,122
========== ========== ========== ========== =======
Average daily number of shares
outstanding during the period............ 4,395,246 2,480,478 2,135,458 1,107,187 75,460
========== ========== ========== ========== =======
Average amount of debt per share
during the period........................ $ 0.06 $ 0.10 $ 0.09 $ 0.07 $ 0.11
========== ========== ========== ========== =======
</TABLE>
(i) 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.
28
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 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 accompany-
ing schedules of investments.......... $3,477,524,783 $690,243,867 $87,422,553 $56,715,834 $941,836,209 $354,474,180
Receivable for investment securities
sold............................. -- 4,482,740 4,123,665 -- -- 11,492,912
Receivable for shares of beneficial
interest sold..................... 9,325,508 1,196,539 12,035 80,370 1,475,216 1,095,323
Interest and dividends receivable..... 443,983 22,258 13,779 304,917 74,949 21,238
Other assets.......................... 123,317 35,596 22,951 3,162 36,512 6,226
-------------- ------------ ----------- ----------- ------------ ------------
Total Assets 3,487,417,591 695,981,000 91,594,983 57,104,283 943,422,886 367,089,879
-------------- ------------ ----------- ----------- ------------ ------------
Liabilities:
Payable for investment securities
purchased.......................... 93,457,355 2,403,313 -- 721,247 4,437,048 3,596,784
Payable for shares of beneficial
interest redeemed.................. 4,113,664 18,197,902 279,591 11,481 6,918,280 725,145
Accrued investment management fees.... 2,053,337 453,415 44,961 34,149 602,182 238,306
Accrued expenses...................... 267,328 62,183 20,551 10,898 68,077 29,899
-------------- ------------ ----------- ----------- ------------ ------------
Total Liabilities................. 99,891,684 21,116,813 345,103 777,775 12,025,587 4,590,134
-------------- ------------ ----------- ----------- ------------ ------------
Net Assets.............................. $3,387,525,907 $674,864,187 $91,249,880 $56,326,508 $931,397,299 $362,499,745
============== ============ =========== =========== ============ ============
Net Assets Consist of:
Paid-in capital....................... $2,111,525,013 $189,791,334 $41,624,610 $40,560,862 $608,652,119 $205,947,718
Undistributed net investment
income (accumulated loss)......... (698,692) (11,484,511) 39,433 655,687 (2,526,046) (1,219,985)
Undistributed net realized gain....... 452,693,036 293,620,931 26,101,769 6,177,140 131,101,224 47,316,356
Net unrealized appreciation........... 824,006,550 202,936,433 23,484,068 8,932,819 194,170,002 110,455,656
-------------- ------------ ----------- ----------- ------------ ------------
Net Assets $3,387,525,907 $674,864,187 $91,249,880 $56,326,508 $931,397,299 $362,499,745
============== ============ =========== =========== ============ ============
Shares of beneficial interest
outstanding--Note 6............... 52,617,786 12,236,096 5,190,600 3,618,469 28,894,318 6,253,045
============== ============ =========== =========== ============ ============
Net Asset Value Per Share $ 64.38 $ 55.15 $ 17.58 $ 15.57 $ 32.23 $ 57.97
============== ============ =========== =========== ============ ============
*Identified cost $2,653,518,233 $487,307,434 $63,938,485 $47,783,015 $747,666,207 $244,018,524
============== ============ =========== =========== ============ ============
</TABLE>
See Notes to Financial Statements.
29
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 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............................ $ 10,062,396 $ 3,991,159 $ 318,511 $ 932,573 $ 3,593,656 $ 395,629
Dividends........................... 10,086,205 715,744 399,240 106,118 1,176,070 412,028
-------------- ------------ ----------- ----------- ------------ ------------
Total Income...................... 20,148,601 4,706,903 717,751 1,038,691 4,769,726 807,657
-------------- ------------ ----------- ----------- ------------ ------------
Expenses:
Management fees-- Note 3(a)......... 19,706,786 6,401,767 610,561 301,241 5,967,972 1,585,846
Interest on line of credit
utilized.......................... -- -- -- -- -- 16,269
Custodian fees...................... 565,790 198,065 34,340 29,901 173,428 50,551
Transfer agent fees................. 211,321 47,586 8,341 3,871 58,566 16,372
Professional fees................... 76,243 21,150 8,993 8,147 26,309 14,044
Trustees' fees...................... 3,750 3,750 3,750 3,750 3,750 3,750
Miscellaneous....................... 280,769 113,189 20,784 26,343 94,267 42,173
-------------- ------------ ----------- ----------- ------------ ------------
Total Expenses.................... 20,844,659 6,785,507 686,769 373,253 6,324,292 1,729,005
-------------- ------------ ----------- ----------- ------------ ------------
Net Investment Income (Loss)............ (696,058) (2,078,604) 30,982 665,438 (1,554,566) (921,348)
-------------- ------------ ----------- ----------- ------------ ------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments.... 460,411,703 293,080,766 26,152,817 6,227,204 131,041,471 47,112,154
Net change in unrealized appreciation
(depreciation) on investments..... 307,222,865 (71,914,674) 4,721,973 3,870,767 88,777,695 80,489,142
-------------- ------------ ----------- ----------- ------------ ------------
Net realized and unrealized gain
on investments.................... 767,634,568 221,166,092 30,874,790 10,097,971 219,819,166 127,601,296
-------------- ------------ ----------- ----------- ------------ ------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............................ $ 766,938,510 $219,087,488 $30,905,772 $10,763,409 $218,264,600 $126,679,948
============== ============ =========== =========== ============ ============
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
THE ALGER AMERICAN FUND
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Increase (decrease) in cash
Cash flows from operating activities:
Interest received ............................................. $ 401,885
Dividends received ............................................ 397,682
Interest paid ................................................. (16,313)
Operating expenses paid ....................................... (1,530,916)
Purchase of short-term securities, net ........................ (17, 579,686)
Purchase of portfolio securities .............................. (387,841,248)
Proceeds from disposition of portfolio securities ............. 272,503,835
Other ......................................................... (4,642)
-------------
Net cash used in operating activities ....................... (133,669,403)
-------------
Cash flows from financing activities:
Dividends paid ................................................ (10,215,601)
Proceeds from shares sold and dividends reinvested ............ 211,880,629
Payments on shares redeemed ................................... (67,995,625)
-------------
Net cash provided by financing activities ................... 133,669,403
-------------
Net increase in cash ............................................ --
Cash--beginning of year ......................................... --
-------------
Cash--end of year ............................................... $ --
=============
RECONCILIATION OF NET INCREASE IN NET ASSETS TO
NET CASH USED IN OPERATING ACTIVITIES:
Net increase in net assets resulting from operations ............ $ 126,679,948
Increase in investments ......................................... (125,940,740)
Increase in receivable for investments sold ..................... (10,573,143)
Increase in payable for securities purchased .................... 3,596,784
Increase in interest and dividends receivable ................... (8,090)
Net realized gain ............................................... (47,112,154)
Net increase in unrealized appreciation ......................... (80,489,142)
Increase in accrued expenses .................................... 181,776
Net increase in other assets .................................... (4,642)
-------------
Net cash used in operating activities .............................. $(133,669,403)
=============
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
THE ALGER AMERICAN FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 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)......... $ (696,058) $ (2,078,604) $ 30,982 $ 665,438 $ (1,554,566) $ (921,348)
Net realized gain on investments..... 460,411,703 293,080,766 26,152,817 6,227,204 131,041,471 47,112,154
Net change in unrealized appreciation
(depreciation) on investments....... 307,222,865 (71,914,674) 4,721,973 3,870,767 88,777,695 80,489,142
-------------- -------------- ----------- ----------- ------------ ------------
Net increase in net assets resulting
from operations.................... 766,938,510 219,087,488 30,905,772 10,763,409 218,264,600 126,679,948
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............. 949,764,622 (638,917,257) (11,917,487) 19,977,656 133,231,781 144,325,873
-------------- -------------- ----------- ----------- ------------ ------------
Total increase (decrease)........ 1,481,806,954 (541,719,553) 13,324,259 28,118,188 241,825,842 260,790,220
Net Assets
Beginning of year.................. 1,905,718,953 1,216,583,740 77,925,621 28,208,320 689,571,457 101,709,525
-------------- -------------- ----------- ----------- ------------ ------------
End of year........................ $3,387,525,907 $ 674,864,187 $91,249,880 $56,326,508 $931,397,299 $362,499,745
============== ============== =========== =========== ============ ============
Undistributed net investment income
(accumulated loss)............... $ (698,692) $ (11,484,511) $ 39,433 $ 655,687 $ (2,526,046) $ (1,219,985)
============== ============== =========== =========== ============ ============
</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.
32
<PAGE>
THE ALGER AMERICAN FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 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 December 31, 1999, the value of securities loaned and
collateral received thereon were as follows:
VALUE OF
SECURITIES VALUE OF
LOANED COLLATERAL
---------- ----------
American Growth Portfolio........................ $ -- $ --
American Small Capitalization Portfolio.......... 44,009,766 44,894,197
American Income and Growth Portfolio............. 691,400 708,565
American Balanced Portfolio...................... -- --
American MidCap Growth Portfolio................. 4,782,294 4,878,374
American Leveraged AllCap Portfolio.............. 4,242,650 4,328,917
(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.
33
<PAGE>
THE ALGER AMERICAN FUND
NOTES TO FINANCIAL STATEMENTS (Cont'd)
DECEMBER 31, 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 year ended December 31, 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.") $5,111,202, $2,278,921, $231,116, $53,606,
$1,821,363 and $341,921, 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
year ended December 31, 1999, were as follows:
PURCHASES SALES
--------- -----
American Growth Portfolio .................. $3,954,279,606 $3,289,891,955
American Small Capitalization Portfolio..... 1,236,782,165 1,932,594,294
American Income and Growth Portfolio ....... 178,438,444 200,800,089
American Balanced Portfolio ................ 58,114,482 38,749,526
American MidCap Growth Portfolio ........... 1,171,313,352 1,112,905,571
American Leveraged AllCap Portfolio ........ 391,438,032 283,074,144
NOTE 5--Line of Credit:
The American Leveraged AllCap Portfolio has a line of credit with its 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 year ended December 31, 1999,
the American Leveraged AllCap Portfolio had borrowings which averaged $266,584
at a weighted average interest rate of 6.02%.
NOTE 6--Share Capital:
The Fund has an unlimited number of authorized shares of beneficial interest of
$.001 par value.
34
<PAGE>
THE ALGER AMERICAN FUND
NOTES TO FINANCIAL STATEMENTS (Cont'd)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
During the year ended December 31, 1999, transactions of shares of beneficial
interest were as follows:
SHARES AMOUNT
------- --------
American Growth
Portfolio:
Shares sold.................. 46,703,529 $2,602,462,915
Dividends reinvested......... 4,531,199 234,852,067
----------- --------------
51,234,728 2,837,314,982
Shares redeemed.............. (34,425,887) (1,887,550,360)
----------- --------------
Net increase............... 16,808,841 $ 949,764,622
=========== ==============
SHARES AMOUNT
------- --------
American Small Capitalization
Portfolio:
Shares sold.................. 31,804,437 $1,387,733,383
Dividends reinvested......... 3,077,857 121,883,144
----------- --------------
34,882,294 1,509,616,527
Shares redeemed.............. (50,315,702) (2,148,533,784)
----------- --------------
Net decrease............... (15,433,408) $ (638,917,257)
=========== ==============
SHARES AMOUNT
------- --------
American Income and Growth
Portfolio:
Shares sold.................. 4,609,317 $ 62,276,927
Dividends reinvested......... 447,209 5,661,661
----------- --------------
5,056,526 67,938,588
Shares redeemed.............. (5,803,323) (79,856,075)
----------- --------------
Net decrease............... (746,797) $ (11,917,487)
=========== ==============
SHARES AMOUNT
------- --------
American Balanced
Portfolio:
Shares sold.................. 1,671,901 $ 23,274,857
Dividends reinvested......... 200,644 2,620,408
----------- --------------
1,872,545 25,895,265
Shares redeemed.............. (427,507) (5,917,609)
----------- --------------
Net increase............... 1,445,038 $ 19,977,656
=========== ==============
SHARES AMOUNT
------- --------
American MidCap Growth
Portfolio:
Shares sold.................. 41,675,397 $1,149,683,205
Dividends reinvested......... 4,326,254 109,670,534
----------- --------------
46,001,651 1,259,353,739
Shares redeemed.............. (40,988,951) (1,126,121,958)
----------- --------------
Net increase............... 5,012,700 $ 133,231,781
=========== ==============
SHARES AMOUNT
------- --------
American Leveraged AllCap
Portfolio:
Shares sold.................. 4,701,044 $ 202,660,204
Dividends reinvested......... 263,906 10,147,195
----------- --------------
4,964,950 212,807,399
Shares redeemed.............. (1,626,596) (68,481,526)
----------- --------------
Net increase............... 3,338,354 $ 144,325,873
=========== ==============
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
=========== ==============
35
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
of The Alger American Fund:
We have audited the statements of assets and liabilities, including the
schedules of investments, of The Alger American Fund (a Massachusetts business
trust comprising, respectively, the Alger American Growth Portfolio, Alger
American Small Capitalization Portfolio, Alger American Income and Growth
Portfolio, Alger American Balanced Portfolio, Alger American MidCap Growth
Portfolio and Alger American Leveraged AllCap Portfolio), as of December 31,
1999, and the related statements of operations and cash flows for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, except for the Alger American Leveraged AllCap Portfolio,
which is for the four years in the period then ended, and for the period ended
December 31, 1995. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1999, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective portfolios constituting The Alger American Fund, as of
December 31, 1999, the results of their operations and cash flows for the year
then ended, the changes in their net assets for each of the two years in the
period then ended, and their financial highlights for each of the five years in
the period then ended,except for the Alger American Leveraged AllCap Portfolio,
which is for the four years in the period then ended, and for the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
New York, New York
February 8, 2000
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