================================================================================
THE ALGER |
DEFINED | Meeting the challenge
CONTRIBUTION | of investing
TRUST |
Alger Defined Contribution
Growth Portfolio
Alger Defined Contribution
Small Cap Portfolio
Alger Defined Contribution
MidCap Growth Portfolio
Alger Defined Contribution
Leveraged AllCap Portfolio
ANNUAL |
REPORT | October 31, 1995
================================================================================
<PAGE>
This Page Intentionally Left Blank
<PAGE>
FELLOW SHAREHOLDERS: DECEMBER 15, 1995
Unlike France in the 1790's, which Charles Dickens described in the Tale of Two
Cities as the "best of times and the worst of times," the late 1990's for the
American financial markets are purely the best of times. While all periods
provide some room for concern, the current period is more promising than almost
any other in recent history.
HOW WE ARRIVED AT THIS POINT
The stock market and the bond market have both done exceptionally well this
year. This year's performance results from the one-two combination punch to the
jaw of growth stocks which commenced with the Presidential election in 1992.
After twelve years of Republican stewardship, the market and business community
began to see a very unclear economic picture emerge. The first punch landed with
the appointment of the President's new cabinet whose agenda was to create new
taxes on the "rich" and to socialize the health care industry (which represents
15% of the Gross Domestic Product). Growth stocks, which rely on a reasonable
visibility of the future, began to lose relative valuation. What seemed like a
value market at the time was in reality a reluctance on the part of investors to
face an uncertain future. An exceedingly lenient monetary policy, which touched
off a boom in consumer spending in the fourth quarter of 1993, added to this
confusion. This brought about the second punch to the jaw that growth stocks
received. In February of 1994, the Federal Reserve began to tighten interest
rates in a series of six consecutive steps. Once again, this clouded the
economic future and created a compression of growth stock multiples.
At this point, fear of the new administration's policies was replaced by fear of
the Federal Reserve. The market declined and growth stocks collapsed on a
relative basis. The collective body of market and economic forecasters who are
colloquially known as "pundits" all unanimously agreed that inflation would soar
and the stock market would collapse.
Why were they so wrong? First, inflation fears were driven by soaring prices of
industrial commodities. However, commodity based raw materials represent only
15% of the total cost of manufacturing. Much more important is the cost of
labor, which did not rise rapidly. Inflation was subdued throughout 1994.
Secondly, the forecaster's assumption of a stock market collapse was predicated
on the view that the market abhors increases in short-term rates. Indeed, the
crash of 1987 was preceded and perhaps caused by an increase in short-term
rates. Thirdly, there was a generally accepted view that the market was
overpriced. Although this view was widely expressed on television, it was never
the case. By way of comparison, in the period prior to the crash of 1987, the
earnings yield of the market was only half the yield of the 30-year U.S.
Government Bond. This was below the normal range of 50% to 90%. Throughout 1994,
the earnings yield of the stock market typically sold at about 75% of the U.S.
Government Bond yield. Moreover, the bond market itself was undervalued,
discounting a level of inflation which never materialized. Based on forward
looking price earnings ratios, the market was, if anything, undervalued.
CURRENT MARKET AND ECONOMY
As 1995 dawned, the key questions facing the markets concerned the need for
future tightening of interest rates by the Federal Reserve, the possible onset
of inflation and the excessive strength of the economy, all of which are
naturally interrelated. Now we are well into the fourth quarter and the concern
of the market is not whether the economy is growing too fast, but whether it is
growing too slowly. As early as last year, we forecasted that the economy would
slow and that there would be a "soft landing". This has been a correct forecast,
although it may now be obsolete. All four components of consumer spending, which
constitute 69% of the Gross Domestic Product: housing, autos, consumer durables
and apparel, have slowed significantly but should bounce back due to the drop in
interest rates and a reduction in inventory levels. There is evidence,
therefore, that we are no longer looking at a "soft landing," but rather a
"touch and go landing."
1
<PAGE>
It would be overly optimistic to say that all is well with the economy. Consumer
confidence, while better in some surveys, is not robust. While leading
indicators are up slightly, many components of retail sales are still pointing
down. Whether the Federal Reserve will continue to lower rates is an open
question especially in light of the current Federal budget negotiations. While
these negotiations may well drag into 1996, it would be disappointing for those
who are expecting a cut in rates in the near term.
The bond market continues to believe that interest rates are too high. The
dramatic flattening of the yield curve and the fact that the Government pays
less interest to borrow for 10 years than banks do overnight provides ample
evidence. The price of gold, an excellent proxy for inflation, remains at a
relatively low historic level (approximately $390 an ounce). We believe that the
economy will soon begin to react to the drop in interest rates that we have
experienced to date. As a result, we expect the economy to keep advancing at a
slow rate and avoid a recession in 1996.
As for the stock market, we feel it still remains undervalued. We use three
measures to determine the appropriate valuation for the market. The first is
simply to multiply our best estimate of Dow earnings for 1995 by the average
multiple of the last ten years which is 16. The result is an expected target of
the Dow of 5600. The second method relates the market to short-term interest
rates. Our own proprietary model multiplies the bottom-up forecast for the Dow
earnings by the reciprocal of the 90-day commercial paper rate adjusted for some
smoothing techniques. This model states that the Dow would be correctly valued
at 6200. The third technique involves the relationship between the industrial
S&P indexes estimated earnings and the 30 year bond yield. Using the average
relationship between these two variables for the period 1988 through 1994,
suggests that the market could appreciate 33% next year. The Dow equivalent of
this would be 6300. While none of these forecasts may be realized, it is
interesting that they all agree that the market will appreciate significantly
next year using only average relationships.
THE ALGER DEFINED CONTRIBUTION TRUST PORTFOLIO REVIEWS
Alger Defined Contribution Growth Portfolio
The Alger Defined Contribution Growth Portfolio recorded excellent results for
the period ended October 31, 1995, with a gain of 37.1%, relative to the S&P 500
Index return of 26.4%. The Portfolio is well represented in three industries
which are full of fast growing, profitable and well run companies. The
Healthcare, Computer Related & Business Equipment and Semiconductors industries
represent 23.1%, 15.2% and 11.6%, respectively, of the Portfolio's composition.
The top three holdings of the Portfolio at the period end were Altera
Corporation, Lone Star Steakhouse & Saloon, Inc. and Biochem Pharma Inc.
Alger Defined Contribution Small Cap Portfolio
For the year ended October 31, 1995, the Alger Defined Contribution Small Cap
Portfolio returned 66.2%, significantly outperforming the Wilshire Small Company
Growth Index which returned 25.2% and the Russell 2000 Growth Index which
returned 20.6% over the same period. The Portfolio's largest three positions at
the end of the period were: U.S. Robotics Corp., Maxim Integrated Products Inc.
and Altera Corporation. The top representative industry groups at the period end
were: Semi-Conductors, Communications and Computer Related & Business Equipment.
At present, we continue to hold these companies and many companies in these
representative industries as their products are innovative, in high demand by an
expanding marketplace and have earnings that continue to grow at very high
rates.
Alger Defined Contribution MidCap Growth Portfolio
The Alger Defined Contribution MidCap Growth Portfolio continues to provide its
investors with strong, solid performance, returning 54.1% for the one year
period ended October 31, 1995. Over the same period, the benchmark S&P MidCap
400 Index returned 21.2%. Possibly the most exciting and yet to be recognized
sector of the equities market, midcap stocks have many of the upside
2
<PAGE>
characteristics of small cap stocks without the attendant volatility
attributable to a lack of liquidity. The Portfolio's largest representative
industries at the period end were Computer Related & Business Equipment 21.7%,
Healthcare 16.1% and Communications 11.2%.
Alger Defined Contribution Leveraged AllCap Portfolio
The Alger Defined Contribution Leveraged AllCap Portfolio employs an "all cap"
(small, medium and large capitalizations) portfolio management strategy which
has been implemented at Fred Alger Management for over 31 years. In addition,
the Portfolio may employ a management technique known as leveraging, that is,
borrowing money for investment purposes in order to increase the Portfolio's
holdings and, therefore, its exposure to the stock market. Over the twelve month
period, the Portfolio returned 54.4% relative to the S&P 500 Index which
returned 26.4%. The largest representative industry groups at the period ended
included Semiconductors 23.9%, Computer Related & Business Equipment 18.4%, and
Healthcare 12.7%.
LOOKING AHEAD
Despite the rally year-to-date, growth stocks generally remain undervalued
relative to the market. Technology stocks still represent excellent investments.
While they have moved up a great deal, so have their earnings. Consequently,
their price/earnings multiples have not greatly increased. An example of this is
one of our favorite holdings, Altera Corporation, which has appreciated
approximately 150% year-to-date . However, we expect Altera's earnings to be up
135% this year. Consequently, Altera is not trading at a substantially higher
multiple of 1995 earnings compared to its 1994 earnings at this point last year.
In 1991, I wrote a book entitled Raging Bull: How to Invest in the Growth Stocks
of the 90's. In the last chapter I predicted that the Dow Jones Industrial
Average would reach 6,000 by the millennium and perhaps sooner based on seven
basic factors:
1. End of the Cold War, leading to increased American self confidence.
2. An average high level of employment, due mainly to demographics.
3. Modest inflation.
4. Normal real rates of interest.
5. Rapidly expanding exports.
6. The eventual elimination of the deficit.
7. Rapid technological change.
Generally, I think we are still on target (even the deficit point is being
debated) and I am extremely excited about the prospects for the market and
especially growth stocks during the next 5 years.
Respectfully submitted,
/s/ David D. Alger
-----------------------
David D. Alger
President
3
<PAGE>
- --------------------------------------------------------------------------------
ALGER DEFINED CONTRIBUTION GROWTH PORTFOLIO
Portfolio Highlights Through October 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
The Alger Defined Contribution Growth Portfolio invests in companies which
generally have broader product lines, markets, financial resources and depth
of management than smaller, newer companies.
- --------------------------------------------------------------------------------
$10,000 HYPOTHETICAL INVESTMENT SINCE INCEPTION November 8, 1993
- --------------------------------------------------------------------------------
The following information was used to plot graph which appears on page 4.
ALGER DEFINED
GROWTH S&P 500
------------- -------
3-11-93 10000 10000
31-10-94 10380 10410
31-10-95 14231 13162
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger Defined Contribution Growth Portfolio and the
S&P 500 on November 8, 1993, the inception date of the Alger Defined
Contribution Growth Portfolio. The figures for both the Alger Defined
Contribution Growth Portfolio and the S&P 500, an unmanaged index of common
stocks, include reinvestment of dividends.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON THROUGH October 31, 1995
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURN
SINCE INCEPTION
1 YEAR 11/8/93
---------------------------------------
Alger Defined Contribution
Growth Portfolio .................. 37.10% 19.50%
S&P 500 ........................... 26.44% 14.88%
---------------------------------------
The Portfolio's average annual total returns include changes in share price
and reinvestment of dividends and capital gains. Past performance does not
guarantee future results. Investment return and principal will fluctuate and
the Portfolio's shares when redeemed may be worth more or less than their
original cost.
4
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
ALGER DEFINED CONTRIBUTION GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 1995
SHARES COMMON STOCKS--97.7% VALUE
------ -----
AIRLINES--1.0%
2,000 Delta Air Lines Inc................... $ 131,250
-----------
COMMUNICATIONS--5.6%
3,500 Century Telephone Enterprises, Inc.... 101,500
6,000 DSC Communications Corporation*....... 222,000
2,000 Glenayre Technologies Inc.*........... 128,500
8,000 Tellabs, Inc.*........................ 272,000
-----------
724,000
-----------
COMPUTER RELATED &
BUSINESS EQUIPMENT--15.2%
6,600 Altera Corporation*................... 399,300
3,000 Bay Networks Inc.*.................... 198,750
4,000 Dell Computer Corporation*............ 186,500
3,200 Hewlett-Packard Company............... 296,400
3,700 Read-Rite Corporation*................ 129,038
6,000 Seagate Technology*................... 268,500
5,000 3 Com Corp.*.......................... 235,000
5,900 Xilinx, Inc.*......................... 271,400
-----------
1,984,888
-----------
COMPUTER SOFTWARE--3.0%
4,500 Enterprise Systems Inc.*.............. 105,188
10,000 Informix Corporation*................. 291,250
-----------
396,438
-----------
COMPUTER TECHNOLOGY--1.5%
2,000 AVX Corporation*...................... 62,250
3,900 Silicon Graphics, Inc.*............... 129,675
-----------
191,925
-----------
DEFENSE--4.8%
2,679 Lockheed Martin Corp.................. 182,506
6,000 Loral Corporation..................... 177,750
3,300 McDonnell Douglas Corporation......... 269,775
-----------
630,031
-----------
FINANCIAL SERVICES--5.4%
4,965 First Data Corporation................ 328,294
4,300 Lehman Brothers Holdings Inc.......... 93,524
5,000 Merrill Lynch & Co., Inc.............. 277,500
-----------
699,318
-----------
FREIGHT--2.0%
3,200 Federal Express Corp.*................ 262,800
-----------
HEALTHCARE--23.1%
3,100 Apria Healthcare Group Inc.*.......... 67,038
10,000 Biochem Pharma Inc.*.................. 382,500
3,000 Boston Scientific Corporation*........ 126,375
5,000 Cardinal Health, Inc.................. 256,875
5,000 Columbia/HCA Healthcare Corporation... 245,625
5,800 Healthsource Inc.*.................... 307,400
3,000 Lilly (Eli) Co........................ 289,875
3,200 Medtronic, Inc........................ 184,800
5,200 Merck & Co., Inc...................... 299,000
1,200 Nellcor Puritan Bennett Inc.*......... 69,000
1,800 Oxford Health Plans, Inc.*............ 140,850
HEALTHCARE--(Continued)
6,000 SmithKline Beecham PLC ADS............ 311,250
6,200 Summit Technology Inc.*............... 275,900
2,000 United Dental Care, Inc.*............. 61,000
-----------
3,017,488
-----------
LEISURE & ENTERTAINMENT--3.1%
3,000 Disney (Walt) Productions............. 172,875
4,500 Viacom Inc. Cl. B.*................... 225,000
-----------
397,875
-----------
PAPER PACKAGING &
FOREST PRODUCTS--2.6%
3,900 Alco Standard Corporation............. 345,150
-----------
POLLUTION CONTROL--1.6%
10,000 USA Waste Services Inc.*.............. 210,000
-----------
RESTAURANTS & LODGING--3.0%
10,000 Lone Star Steakhouse & Saloon, Inc.*.. 386,250
-----------
RETAILING--6.0%
15,250 OfficeMax Inc.*....................... 377,437
4,500 Tandy Corporation..................... 222,188
4,000 Viking Office Products, Inc.*......... 178,000
-----------
777,625
-----------
SEMICONDUCTORS--11.6%
3,500 Cirrus Logic, Inc.*................... 147,437
5,500 Integrated Device Technology, Inc.*... 104,500
2,200 Intel Corporation..................... 153,725
6,000 LSI Logic Corporation*................ 282,750
5,000 Linear Technology Corporation......... 218,750
3,000 Maxim Integrated Products, Inc.*...... 224,250
2,600 Micron Technology, Inc................ 183,625
3,000 Texas Instruments, Incorporated....... 204,750
-----------
1,519,787
-----------
SEMICONDUCTORS
CAPITAL EQUIPMENT--4.6%
6,600 Applied Materials, Inc.*.............. 330,825
7,500 Opal, Inc.*........................... 113,438
4,500 Teradyne, Inc.*....................... 150,188
-----------
594,451
-----------
MISCELLANEOUS--3.6%
5,000 Loewen Group Inc...................... 200,238
6,700 Service Corporation International..... 268,838
-----------
469,076
-----------
Total Common Stocks (Cost $10,242,384) 12,738,352
-----------
PRINCIPAL
AMOUNT SHORT-TERM CORPORATE NOTES--3.4%
---------
$445,000 Washington Square Mortgage Co.,
5.78%, 11/3/95
(Cost $444,857)..................... 444,857
-----------
Total Investments (Cost $10,687,241)(a) 101.1% 13,183,209
Liabilities in Excess of Other Assets (1.1) (141,472)
----- -----------
Net Assets............................. 100.0% $13,041,737
===== ===========
*Non-income producing security.
(a)At October 31, 1995, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $10,687,241, amounted to $2,495,968
which consisted of aggregate gross unrealized appreciation of $2,722,814 and
aggregate gross unrealized depreciation of $226,846.
See Notes to Financial Statements.
5
<PAGE>
- --------------------------------------------------------------------------------
ALGER DEFINED CONTRIBUTION SMALL CAP PORTFOLIO
Portfolio Highlights Through October 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
The Alger Defined Contribution Small Cap Portfolio invests in small,
fast-growing companies that offer innovative products, services, or
technologies to a rapidly expanding marketplace.
- --------------------------------------------------------------------------------
$10,000 HYPOTHETICAL INVESTMENT SINCE INCEPTION November 8, 1993
- --------------------------------------------------------------------------------
The following information was used to plot graph which appears on page 6.
ALGER DEFINED WILSHIRE SMALL CO. RUSSELL 2000
SMALL CAP GROWTH INDEX GROWTH INDEX
------------- ------------------ ------------
8-11-93 10000 10000 10000
31-10-94 10830 10546 10600
31-10-95 17999 13203 12064
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger Defined Contribution Small Cap Portfolio,
Wilshire Small Company Growth Index and the Russell 2000 Growth Index on
November 8, 1993, the inception date of the Alger Defined Contribution Small
Cap Portfolio. The figures for the Alger Defined Contribution Small Cap
Portfolio, Wilshire Small Company Growth Index (an unmanaged index of common
stocks) and the Russell 2000 Growth Index (an unmanaged index of common
stocks) include reinvestment of dividends.
For the upcoming fiscal year, the Portfolio will use only the Russell 2000
Growth Index (the "Russell 2000") as a comparative index. The Portfolio has
elected to change its comparative index because management of the Portfolio
believes the size of the companies in the Russell 2000 is more representative
of the size of the companies in which the Portfolio invests.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON THROUGH October 31, 1995
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURN
SINCE INCEPTION
1 YEAR 11/8/93
------------------------------------
Alger Defined Contribution
Small Cap Portfolio ................ 66.19% 34.54%
Wilshire Small Co. Growth Index .... 25.20% 15.06%
Russell 2000 Growth Index ......... 20.57% 9.93%
------------------------------------
The Portfolio's average annual total returns include changes in share price
and reinvestment of dividends and capital gains. Past performance does not
guarantee future results. Investment return and principal will fluctuate and
the Portfolio's shares when redeemed may be worth more or less than their
original cost.
6
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
ALGER DEFINED CONTRIBUTION SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 1995
SHARES COMMON STOCKS--94.3% VALUE
------ -----
BUILDING & CONSTRUCTION--.4%
3,000 U.S. Home Corporation*................ $ 80,625
-----------
COMMUNICATIONS--16.5%
5,000 Ascend Communications, Inc.*.......... 325,000
12,000 DSC Communications Corporation*....... 444,000
10,875 Glenayre Technologies Inc.*........... 698,719
9,000 Network Equipment Technologies, Inc.*. 293,625
16,400 Tellabs, Inc.*........................ 557,600
16,000 U.S. Robotics Corp.*.................. 1,480,00
-----------
3,798,944
-----------
COMPUTER RELATED &
BUSINESS EQUIPMENT--11.7%
12,200 Altera Corporation*................... 738,100
7,000 Bay Networks Inc.*.................... 463,750
4,600 Dell Computer Corporation*............ 214,475
5,000 Digital Equipment Corporation*........ 270,625
15,000 ESS Technology, Inc.*................. 450,000
2,000 Komag, Incorporated*.................. 114,000
7,000 Read-Rite Corporation*................ 244,125
4,500 Xilinx, Inc........................... 207,000
-----------
2,702,075
-----------
COMPUTER SOFTWARE--10.6%
9,000 Activision Inc.*...................... 150,750
4,000 Electronics For Imaging Inc.*......... 329,000
7,000 EPIC Design Technology, Inc.*......... 322,000
16,600 Informix Corporation*................. 483,475
10,000 Logic Works Inc.*..................... 152,500
5,000 Maxis Inc.*........................... 221,250
23,000 S3 Incorporated*...................... 393,875
12,000 Softkey International Inc.*........... 378,000
-----------
2,430,850
-----------
COMPUTER TECHNOLOGY--5.6%
3,000 Actel Corporation*.................... 35,250
5,700 Adaptec Inc.*......................... 253,650
17,600 C.P. Clare Corporation*............... 455,400
3,000 Integrated Silicon Systems, Inc. *.... 88,125
15,000 Pinnacle Systems, Inc.*............... 470,625
-----------
1,303,050
-----------
CONSUMER PRODUCTS--2.5%
15,000 De Rigo Spa (ADR)*.................... 309,375
8,000 Oakley, Inc.*......................... 276,000
-----------
585,375
-----------
HEALTHCARE--10.6%
20,000 AHI Healthcare Systems, Inc.*......... 280,000
16,500 Biochem Pharma Inc.*.................. 631,125
10,000 Depotech Corp.*....................... 145,000
2,000 HBO & Company......................... 141,500
5,000 Hologic, Inc.*........................ 130,000
12,500 IMNET Systems, Inc.*.................. 317,188
10,000 Liposome Company Inc.*................ 153,750
6,100 Metra Biosystems, Inc.*............... 112,850
7,575 PhyCor Inc.*.......................... 278,381
5,400 Summit Technology, Inc.*.............. 240,300
-----------
2,430,094
-----------
POLLUTION CONTROL--2.3%
5,800 United Waste Systems, Inc.*........... 229,100
14,500 USA Waste Services, Inc.*............. 304,500
-----------
533,600
-----------
RESTAURANTS & LODGING--2.9%
5,600 DF&R Restaurants, Inc.*............... 170,800
5,000 Lone Star Steakhouse & Saloon, Inc.*.. 193,125
9,499 Outback Steakhouse, Inc.*............. 298,030
-----------
661,955
-----------
RETAILING--4.4%
5,300 CompUSA Inc.*......................... 202,725
7,400 Fabri-Centers Of America Inc. Cl A.*.. 110,075
7,400 Fabri-Centers Of America Inc. Cl B.*.. 86,025
6,000 Guest Supply Inc.*.................... 113,250
16,500 OfficeMax, Inc.*...................... 408,375
2,034 Viking Office Products, Inc.*......... 90,512
-----------
1,010,962
-----------
SEMICONDUCTORS--19.4%
9,750 Alliance Semiconductor Corp.*......... 299,813
13,000 Cirrus Logic, Inc.*................... 547,625
16,600 Integrated Device Technology, Inc.*... 315,400
9,500 LSI Logic Corporation*................ 447,688
13,500 Linear Technology Corporation......... 590,625
10,800 Maxim Integrated Products Inc.*....... 807,300
9,000 Micrel, Incorporated*................. 204,750
20,500 Micro Linear Corporation*............. 315,188
17,000 Microchip Technology Incorporated*.... 674,696
10,900 TriQuint Semiconductor, Inc.*......... 247,975
-----------
4,451,060
-----------
SEMICONDUCTORS
CAPITAL EQUIPMENT--7.4%
5,000 AG Associates, Inc.*.................. 110,625
8,000 FSI International, Inc.*.............. 190,000
8,000 GaSonics International Corp.*......... 264,000
5,000 OnTrak Systems, Inc.*................. 98,125
5,200 Opal, Inc.*........................... 78,650
7,000 PRI Automation, Inc.*................. 259,000
5,700 Silicon Valley Group, Inc.*........... 184,538
12,000 Tencor Instruments*................... 511,500
-----------
1,696,438
-----------
Total Common Stocks (Cost $15,131,252) 21,685,028
-----------
PRINCIPAL
AMOUNT SHORT-TERM CORPORATE NOTES--5.0%
---------
$225,000 International Lease Finance Corp.,
5.72%, 11/01/95..................... 225,000
358,000 State Mutual Life Assurance Co. of America,
5.73%, 11/03/95..................... 357,886
578,000 Washington Square Mortgage Co.,
5.78%, 11/03/95..................... 577,815
-----------
Total Short-Term Corporate Notes
(Cost $1,160,701)................... 1,160,701
-----------
Total Investments (Cost $16,291,953)(a) 99.3% 22,845,729
Other Assets in Excess of Liabilities.. .7 155,837
----- -----------
Net Assets............................. 100.0% $23,001,566
===== ===========
*Non-income producing security.
(a)At October 31, 1995, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $16,291,953, amounted to
$6,553,776 which consisted of aggregate gross unrealized appreciation of
$6,796,262 and aggregate gross unrealized depreciation of $242,486.
See Notes to Financial Statements.
7
<PAGE>
- --------------------------------------------------------------------------------
ALGER DEFINED CONTRIBUTION MIDCAP GROWTH PORTFOLIO
Portfolio Highlights Through October 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
The Alger Defined Contribution MidCap Growth Portfolio invests in mid-sized
companies.
- --------------------------------------------------------------------------------
$10,000 HYPOTHETICAL INVESTMENT SINCE INCEPTION November 8, 1993
- --------------------------------------------------------------------------------
The following information was used to plot graph which appears on page 8.
ALGER DEFINED S&P MIDCAP
MIDCAP GROWTH 400 INDEX
------------- ----------
8-11-93 10000 10000
31-10-94 11660 10292
31-10-95 17968 12475
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger Defined Contribution MidCap Growth Portfolio and
the S&P MidCap 400 Index on November 8, 1993, the inception date of the Alger
Defined Contribution MidCap Growth Portfolio. Figures for the Alger Defined
Contribution MidCap Growth Portfolio and the S&P MidCap 400 Index, an
unmanaged index of common stocks, include reinvestment of dividends.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON THROUGH October 31, 1995
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURN
SINCE INCEPTION
1 YEAR 11/8/93
-----------------------------------
Alger Defined Contribution
MidCap Growth Portfolio .............. 54.10% 34.42%
S&P MidCap 400 Index ................. 21.21% 11.81%
-----------------------------------
The Portfolio's average annual total returns include changes in share price
and reinvestment of dividends and capital gains. Past performance does not
guarantee future results. Investment return and principal will fluctuate and
the Portfolio's shares when redeemed may be worth more or less than their
original cost.
8
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
ALGER DEFINED CONTRIBUTION MIDCAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 1995
SHARES COMMON STOCKS--95.4% VALUE
------ -----
APPAREL--1.7%
5,000 Tommy Hilfiger Corporation*........... $ 190,625
-----------
BUILDING & CONSTRUCTION--.9%
3,000 Pulte Corp............................ 94,875
-----------
COMMUNICATIONS--11.2%
4,000 Ascend Communications, Inc.*.......... 260,000
3,000 Century Telephone Enterprises, Inc.... 87,000
3,400 DSC Communications Corporation*....... 125,800
4,050 Glenayre Technologies Inc.*........... 260,212
9,000 Tellabs, Inc.*........................ 306,000
2,000 U.S. Robotics Corp.*.................. 185,000
-----------
1,224,012
-----------
COMPUTER RELATED &
BUSINESS EQUIPMENT--21.7%
5,200 Altera Corporation*................... 314,600
6,000 Bay Networks Inc.*.................... 397,500
2,700 Cisco Systems, Inc.*.................. 209,250
4,800 Dell Computer Corporation*............ 223,800
7,000 ESS Technology, Inc.*................. 210,000
3,000 Read-Rite Corporation*................ 104,625
5,000 Seagate Technology*................... 223,750
8,000 3 Com Corp.*.......................... 376,000
6,700 Xilinx, Inc.*......................... 308,200
-----------
2,367,725
-----------
COMPUTER SOFTWARE--2.7%
6,000 Informix Corporation*................. 174,750
2,000 Learning Company (The)*............... 118,000
-----------
292,750
-----------
COMPUTER TECHNOLOGY--5.1%
2,000 AVX Corporation*...................... 62,250
2,800 Adaptec, Inc.*........................ 124,600
2,000 Integrated Silicon Systems, Inc.*..... 58,750
10,000 Pinnacle Systems, Inc.*............... 313,750
-----------
559,350
-----------
CONSUMER PRODUCTS--1.8%
5,700 Oakley, Inc.*......................... 196,650
-----------
FINANCIAL SERVICES--1.4%
3,000 Advanta Corp. Class B................. 107,250
1,800 Schwab (Charles) Corporation (The).... 41,175
-----------
148,425
-----------
HEALTHCARE--16.1%
3,100 Apria Healthcare Group Inc.*.......... 67,037
7,500 Biochem Pharma Inc.*.................. 286,875
2,000 Boston Scientific Corporation*........ 84,250
5,000 Cardinal Health, Inc.................. 256,875
2,000 Genzyme Corp.--General Division*...... 116,500
5,550 Health Management Associates, Inc.*... 119,325
5,500 Healthsource, Inc.*................... 291,500
4,000 MedPartners, Inc.*.................... 112,000
900 Nellcor Puritan Bennett Inc.*......... 51,750
1,500 Oxford Health Plans, Inc.*............ 117,375
5,600 Summit Technology Inc.*............... 249,200
-----------
1,752,687
-----------
POLLUTION CONTROL--2.3%
12,000 USA Waste Services, Inc.*............. 252,000
-----------
RESTAURANTS & LODGING--4.2%
6,000 La Quinta Inns, Inc................... 154,500
8,000 Lone Star Steakhouse & Saloon, Inc.*.. 309,000
-----------
463,500
-----------
RETAILING--8.5%
1,500 CompUSA Inc.*......................... 57,375
8,000 Global DirectMail Corp.*.............. 218,000
13,500 OfficeMax, Inc.*...................... 334,125
4,600 Tandy Corporation..................... 227,125
2,000 Viking Office Products, Inc.*......... 89,000
-----------
925,625
-----------
SEMICONDUCTORS--9.9%
4,000 Alliance Semiconductor Corp.*......... 123,000
2,800 Cirrus Logic, Inc.*................... 117,950
5,100 Integrated Device Technology, Inc.*... 96,900
5,000 LSI Logic Corporation*................ 235,625
2,000 Linear Technology Corporation......... 87,500
4,000 Maxim Integrated Products, Inc.*...... 299,000
3,000 Microchip Technology Incorporated*.... 119,063
-----------
1,079,038
-----------
SEMICONDUCTORS
CAPITAL EQUIPMENT--3.9%
2,000 ASM Lithography Holdings*............. 99,250
2,000 Lam Research Corporation*............. 121,750
2,500 Silicon Valley Group, Inc.*........... 80,937
3,800 Teradyne, Inc.*....................... 126,825
-----------
428,762
-----------
MISCELLANEOUS--4.0%
5,000 Loewen Group Inc...................... 200,237
5,800 Service Corporation International..... 232,725
-----------
432,962
-----------
Total Common Stocks (Cost $7,364,730). 10,408,986
-----------
PRINCIPAL
AMOUNT SHORT-TERM CORPORATE NOTES--4.5%
- ---------
$490,000 State Mutual Life Assurance Co. of America,
5.73%, 11/03/95
(Cost $489,844)..................... 489,844
-----------
Total Investments (Cost $7,854,574)(a). 99.9% 10,898,830
Other Assets in Excess of Liabilities . .1 15,499
----- -----------
Net Assets............................. 100.0% $10,914,329
===== ===========
*Non-income producing security.
(a)At October 31, 1995, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $7,854,574, amounted to $3,044,256
which consisted of aggregate gross unrealized appreciation of $3,208,051 and
aggregate gross unrealized depreciation of $163,795.
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
ALGER DEFINED CONTRIBUTION LEVERAGED ALLCAP PORTFOLIO
Portfolio Highlights Through October 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
The Alger Defined Contribution Leveraged AllCap Portfolio focuses on
companies with promising growth potential and uses some special investment
tools such as leveraging and options and futures transactions.
- --------------------------------------------------------------------------------
$10,000 HYPOTHETICAL INVESTMENT SINCE INCEPTION November 8, 1993
- --------------------------------------------------------------------------------
The following information was used to plot graph which appears on page 10.
ALGER DEFINED
LEVERAGED ALLCAP S&P 500
---------------- -------
8-11-93 10000 10000
31-10-94 10080 10410
31-10-95 15564 13162
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger Defined Contribution Leveraged AllCap Portfolio
and the S&P 500 on November 8, 1993, the inception date of the Alger Defined
Contribution Leveraged AllCap Portfolio. Figures for the Portfolio and the
S&P 500 Index, an unmanaged index of common stocks, include reinvestment of
dividends.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON THROUGH October 31, 1995
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURN
SINCE INCEPTION
1 YEAR 11/8/93
----------------------------------------
Alger Defined Contribution
Leveraged AllCap Portfolio 54.40% 25.02%
S&P 500 26.44% 14.88%
----------------------------------------
The Portfolio's average annual total returns include changes in share price
and reinvestment of dividends and capital gains. Past performance does not
guarantee future results. Investment return and principal will fluctuate and
the Portfolio's shares when redeemed may be worth more or less than their
original cost.
10
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
ALGER DEFINED CONTRIBUTION LEVERAGED ALLCAP PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 1995
SHARES COMMON STOCKS--95.2% VALUE
------ -----
APPAREL--.9%
2,000 Tommy Hilfiger Corporation*........... $ 76,250
----------
COMMUNICATIONS--7.7%
4,600 ADC Telecommunications, Inc.*......... 184,000
2,100 Glenayre Technologies Inc.*........... 134,925
4,900 Network Equipment Technologies, Inc.*. 159,862
1,600 U.S. Robotics Corp.*.................. 148,000
----------
626,787
----------
COMPUTER RELATED &
BUSINESS EQUIPMENT--18.4%
5,100 Altera Corporation*................... 308,550
3,100 Bay Networks Inc.*.................... 205,374
2,100 Cisco Systems, Inc.*.................. 162,750
15,000 Creative Technology, Ltd.*............ 174,375
4,000 Dell Computer Corporation*............ 186,500
4,200 3 Com Corp.*.......................... 197,400
5,700 Xilinix, Inc.*........................ 262,200
----------
1,497,149
----------
COMPUTER SOFTWARE--8.5%
10,000 Activision Inc.*...................... 167,500
3,200 Electronics For Imaging Inc.*......... 263,200
3,000 Maxis Inc.*........................... 132,750
7,400 S3 Incorporated*...................... 126,725
----------
690,175
----------
COMPUTER TECHNOLOGY--5.6%
7,400 C.P. Clare Corporation*............... 191,474
6,700 Pinnacle Systems, Inc.*............... 210,212
1,800 VideoServer Inc.*..................... 54,900
----------
456,586
----------
CONSUMER PRODUCTS--2.1%
5,000 Oakley, Inc.*......................... 172,500
----------
HEALTHCARE--12.7%
8,000 Biochem Pharma Inc.*.................. 306,000
1,600 Cardinal Health, Inc.................. 82,200
1,000 Genzyme Corp.--General Division*...... 58,250
2,300 Healthsource, Inc.*................... 121,900
5,200 Liposome Company Inc.*................ 79,950
2,000 Medtronic, Inc........................ 115,500
2,000 Summit Technology Inc.*............... 89,000
1,500 Target Therapeutics, Inc.*............ 116,250
2,000 United Dental Care Inc.*.............. 61,000
----------
1,030,050
----------
POLLUTION CONTROL--2.9%
4,000 United Waste Systems, Inc.*........... 158,000
3,500 USA Waste Services, Inc.*............. 73,500
----------
231,500
----------
RESTAURANTS & LODGING--.7%
1,800 Outback Steakhouse, Inc.*............. 56,475
----------
RETAILING--1.4%
4,500 OfficeMax, Inc.*...................... 111,375
----------
SEMICONDUCTORS--23.9%
2,000 Alliance Semiconductor Corp.*......... 61,500
4,000 Cirrus Logic, Inc.*................... 168,500
6,400 Integrated Device Technology, Inc.*... 121,600
3,400 LSI Logic Corporation*................ 160,225
4,800 Linear Technology Corporation+........ 210,000
4,000 Maxim Integrated Products, Inc.*...... 299,000
4,500 Micrel, Incorporated*................. 102,375
16,500 Micro Linear Corporation*+............ 253,688
4,300 Microchip Technology Incorporated*+... 170,657
3,000 Micron Technology, Inc.+.............. 211,875
1,600 Texas Instruments, Incorporated....... 109,200
3,000 TriQuint Semiconductor, Inc.*......... 68,250
----------
1,936,870
----------
SEMICONDUCTORS
CAPITAL EQUIPMENT--10.4%
4,600 Applied Materials, Inc.*.............. 230,575
5,000 ASM Lithography Holdings*............. 248,125
6,100 FSI International, Inc.*.............. 144,875
7,200 On Trak Systems, Inc.*................ 141,300
1,800 Tencor Instruments*................... 76,725
----------
841,600
----------
Total Common Stocks (Cost $6,169,894). 7,727,317
----------
WARRANTS--1.8%
SEMI-CONDUCTORS
4,000 Intel Corp. Warrants,
expire 3/14/98 (Cost $141,833)...... 148,000
----------
Total Investments (Cost $6,311,727)(a). 97.0% 7,875,317
Other Assets in Excess of Liabilities.. 3.0 240,702
----- ----------
Net Assets............................. 100.0% $8,116,019
===== ==========
*Non-income producing security.
+Securities partially or fully pledged (see note 5).
(a)At October 31, 1995, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $6,311,727, amounted to $1,563,590
which consisted of aggregate gross unrealized appreciation of $1,900,810 and
aggregate gross unrealized depreciation of $337,220.
See Notes to Financial Statements.
11
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1995
MIDCAP LEVERAGED
GROWTH SMALL CAP GROWTH ALLCAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value (identified cost*)-
see accompanying schedules of investments............. $13,183,209 $22,845,729 $10,898,830 $7,875,317
Cash.................................................... 39,441 664,256 41,870 178,136
Receivable for investment securities sold............... -- 504,972 104,105 663,488
Receivable for shares of beneficial interest sold....... 6,018 61,566 6,365 3,383
Dividends receivable.................................... 778 540 252 192
Organizational expenses, net............................ 2,114 2,114 2,114 2,114
Prepaid expenses........................................ 1,380 3,117 1,226 1,153
----------- ----------- ----------- ----------
Total Assets........................................ 13,232,940 24,082,294 11,054,762 8,723,783
=========== =========== =========== ==========
LIABILITIES:
Payable for investment securities purchased............. 168,716 1,049,104 119,383 277,744
Demand loan payable to bank............................. -- -- -- 302,600
Interest payable........................................ -- -- -- 6,739
Accrued investment management fees...................... 8,554 16,742 7,440 5,972
Accrued expenses........................................ 13,933 14,882 13,610 14,709
----------- ----------- ----------- ----------
Total Liabilities................................... 191,203 1,080,728 140,433 607,764
----------- ----------- ----------- ----------
NET ASSETS.............................................. $13,041,737 $23,001,566 $10,914,329 $8,116,019
=========== =========== =========== ==========
Net Assets Consist of:
Paid-in capital....................................... $7,663,834 $14,001,808 $ 6,253,075 $4,817,747
Undistributed net investment income
(accumulated loss).................................. (44,939) (172,946) (108,429) (273,102)
Undistributed net realized gain....................... 2,926,874 2,618,928 1,725,427 2,007,784
Net unrealized appreciation........................... 2,495,968 6,553,776 3,044,256 1,563,590
----------- ----------- ----------- ----------
NET ASSETS.............................................. $13,041,737 $23,001,566 $10,914,329 $8,116,019
=========== =========== =========== ==========
Shares of beneficial interest outstanding--Note 6....... 1,119,754 1,283,263 667,898 638,068
=========== =========== =========== ==========
NET ASSET VALUE PER SHARE............................... $ 11.65 $ 17.92 $ 16.34 $ 12.72
=========== =========== =========== ==========
*Identified cost........................................ $10,687,241 $16,291,953 $ 7,854,574 $6,311,727
=========== =========== =========== ==========
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
STATEMENTS OF OPERATIONS
For the year ended October 31, 1995
MIDCAP LEVERAGED
GROWTH SMALL CAP GROWTH ALLCAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends............................................. $ 72,760 $ 8,166 $ 17,564 $ 22,248
Interest.............................................. 25,177 42,102 21,449 --
---------- ---------- ---------- ----------
Total Income........................................ 97,937 50,268 39,013 22,248
---------- ---------- ---------- ----------
Expenses:
Management fees--Note 3(a)............................ 81,537 130,610 66,230 55,348
Interest on line of credit utilized--Note 5........... -- -- -- 82,890
Custodian fees........................................ 7,145 11,604 7,381 9,232
Transfer agent fees--Note 3(c)........................ 2,500 2,500 2,500 2,500
Professional fees..................................... 9,580 9,580 9,580 9,580
Trustees' fees........................................ 6,000 6,000 6,000 6,000
Registration fees..................................... 6,245 8,179 5,733 5,774
Miscellaneous......................................... 7,769 4,959 4,706 4,791
---------- ---------- ---------- ----------
120,776 173,432 102,130 176,115
Less, earnings credits--Note 2(e)..................... (3,002) (11,134) (6,176) (2,604)
---------- ---------- ---------- ----------
Total net expenses.................................. 117,774 162,298 95,954 173,511
---------- ---------- ---------- ----------
NET INVESTMENT INCOME (LOSS)............................ (19,837) (112,030) (56,941) (151,263)
---------- ---------- ---------- ----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain on investments...................... 2,914,058 2,620,966 1,676,799 1,934,036
Net change in unrealized appreciation
on investments...................................... 617,050 5,485,820 2,165,746 1,097,196
---------- ---------- ---------- ----------
Net realized and unrealized gain
on investments...................................... 3,531,108 8,106,786 3,842,545 3,031,232
---------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS..................................... $3,511,271 $7,994,756 $3,785,604 $2,879,969
========== ========== ========== ==========
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
ALGER DEFINED CONTRIBUTION LEVERAGED ALLCAP PORTFOLIO
STATEMENT OF CASH FLOWS
For the year ended October 31, 1995
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH: Cash flows from operating
activities:
Dividends received .......................................... $ 22,804
Interest paid ............................................... (76,150)
Operating expenses paid ..................................... (87,880)
Maturity of short-term securities, net ...................... 370,701
Purchase of investment securities ........................... (13,728,841)
Proceeds from disposition of investment securities .......... 14,337,889
Other ....................................................... 5,718
------------
Net cash provided by operating activities ................. 844,241
------------
Cash flows from financing activities:
Proceeds from shares sold ................................... 164,174
Payments on shares redeemed ................................. (177,912)
Repayment of bank borrowings ............................... (653,000)
------------
Net cash used in financing activities ..................... (666,738)
------------
Net increase in cash .......................................... 177,503
Cash--beginning of year ....................................... 633
------------
Cash--end of year ............................................. $ 178,136
============
Reconciliation of net increase in net assets to net cash
provided by operations:
Net increase in net assets resulting from operations ........ $ 2,879,969
Decrease in investments ..................................... 1,759,768
Increase in receivable for investment securities sold ....... (650,488)
Decrease in dividends receivable ............................ 561
Decrease in payable for investment securities purchased ..... (129,530)
Net realized gain on investments ............................ (1,934,036)
Net increase in unrealized appreciation on investments ...... (1,097,196)
Increase in accrued expenses and other liabilities .......... 8,775
Net decrease in other assets ................................ 6,418
------------
Net cash provided by operating activities ................. $ 844,241
============
See Notes to Financial Statements.
14
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
For the year ended October 31, 1995
MIDCAP LEVERAGED
GROWTH SMALL CAP GROWTH ALLCAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net investment (loss)................................... $ (19,837) $ (112,030) $ (56,941) $ (151,263)
Net realized gain on investments........................ 2,914,058 2,620,966 1,676,799 1,934,036
Net change in unrealized appreciation
on investments........................................ 617,050 5,485,820 2,165,746 1,097,196
----------- ----------- ----------- ----------
Net increase in net assets resulting from operations.. 3,511,271 7,994,756 3,785,604 2,879,969
Dividends to Shareholders:
Net realized gains.................................... (2,104,329) (75,100) (790,355) (1,300,367)
Net increase from shares of beneficial
interest transactions--Note 6......................... 2,270,180 5,569,368 1,145,072 1,285,910
----------- ----------- ----------- ----------
Total increase...................................... 3,677,122 13,489,024 4,140,321 2,865,512
Net Assets:
Beginning of period................................... 9,364,615 9,512,542 6,774,008 5,250,507
----------- ----------- ----------- ----------
End of period......................................... $13,041,737 $23,001,566 $10,914,329 $8,116,019
=========== =========== =========== ==========
Undistributed net investment income (accumulated loss).. $ (44,939) $ (172,946) $ (108,429) $ (273,102)
=========== =========== =========== ==========
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
For the period November 8, 1993 (commencement of operations) through October 31, 1994
MIDCAP LEVERAGED
GROWTH SMALL CAP GROWTH ALLCAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net investment (loss)................................... $ (25,102) $ (60,916) $ (51,488) $ (121,839)
Net realized gain on investments........................ 2,117,145 73,062 838,983 1,374,115
Net change in unrealized appreciation on investments.... 1,878,918 1,067,956 878,510 466,394
---------- ---------- ---------- ----------
Net increase in net assets resulting from operations.. 3,970,961 1,080,102 1,666,005 1,718,670
Net increase from shares of beneficial
interest transactions--Note 6......................... 5,360,654 8,431,440 5,075,003 3,498,837
---------- ---------- ---------- ----------
Total increase...................................... 9,331,615 9,511,542 6,741,008 5,217,507
Net Assets:
Beginning of period................................... 33,000 1,000 33,000 33,000
---------- ---------- ---------- ----------
End of period......................................... $9,364,615 $9,512,542 $6,774,008 $5,250,507
========== ========== ========== ==========
Undistributed net investment income (accumulated loss).. $ (25,102) $ (60,916) $ (51,488) $ (121,839)
========== ========== ========== ==========
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the year ended October 31, 1995
MIDCAP LEVERAGED
GROWTH SMALL CAP GROWTH ALLCAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of year...................... $ 10.38 $ 10.83 $ 11.66 $ 10.08
-------- -------- -------- -------
Net investment (loss)................................... (0.01) (0.07) (0.07) (0.19)
Net realized and unrealized gain on investments......... 3.59 7.23 6.07 5.30
Total from investment operations.................... 3.58 7.16 6.00 5.11
Distribution from net realized gains.................... (2.31) (0.07) (1.32) (2.47)
-------- -------- -------- -------
Net asset value, end of year............................ $ 11.65 $ 17.92 $ 16.34 $ 12.72
======== ======== ======== =======
Total Return............................................ 37.1% 66.2% 54.1% 54.4%
======== ======== ======== =======
Ratios and Supplemental Data:
Net assets, end of year (000's omitted) .............. $ 13,042 $ 23,002 $ 10,914 $ 8,116
======== ======== ======== =======
Ratio of expenses excluding interest
to average net assets(i)............................ 1.11% 1.13% 1.23% 1.43%
======== ======== ======== =======
Ratio of expenses including interest
to average net assets............................... 1.11% 1.13% 1.23% 2.70%
======== ======== ======== =======
Ratio of net investment income (loss)
to average net assets............................... (.18%) (.73%) (.69%) (2.32%)
======== ======== ======== =======
Portfolio Turnover Rate................................. 133.42% 104.84% 132.74% 188.53%
======== ======== ======== =======
Debt outstanding at end of year....................................................................................... $ 302,600
=========
Average amount of debt outstanding during the year.................................................................... $ 939,600
=========
Average daily number of shares outstanding during the year............................................................ 565,805
=========
Average amount of debt per share during the year...................................................................... $ 1.66
=========
- ------------------------------------------------------------------------------------------------------------------------------------
(i) Reflects total expenses, including fees offset by earnings credits. The expense ratio net of earnings credits would have been
1.08%, 1.06%, 1.16% and 2.66% for the Growth Portfolio, Small Cap Portfolio, MidCap Growth Portfolio and Leveraged AllCap
Portfolio, respectively.
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period November 8, 1993 (commencement of
operations) through October 31, 1994*
MIDCAP LEVERAGED
GROWTH SMALL CAP GROWTH ALLCAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.................... $ 10.00 $ 10.00 $ 10.00 $ 10.00
------- ------- ------- -------
Net investment (loss)................................... (0.03) (0.07) (0.09) (0.23)
Net realized and unrealized gain on investments......... .41 .90 1.75 0.31
------- ------- ------- -------
Total from investment operations.................... .38 .83 1.66 .08
------- ------- ------- -------
Net asset value, end of period.......................... $ 10.38 $ 10.83 $ 11.66 $ 10.08
======= ======= ======= =======
Total Return............................................ 3.8% 8.3% 16.6% .8%
======= ======= ======= =======
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) ............ $ 9,365 $ 9,513 $ 6,774 $ 5,251
======= ======= ======= =======
Ratio of expenses excluding interest
to average net assets............................... 1.26% 1.47% 1.53% 1.78%
======= ======= ======= =======
Ratio of expenses including interest
to average net assets............................... 1.26% 1.47% 1.53% 2.87%
======= ======= ======= =======
Ratio of net investment income (loss)
to average net assets............................... (.29%) (.80%) (.89%) (2.53%)
======= ======= ======= =======
Portfolio Turnover Rate................................. 103.79% 186.76% 134.06% 229.11%
======= ======= ======= =======
Debt outstanding at end of period..................................................................................... $ 955,600
=========
Average amount of debt outstanding during the period.................................................................. $ 826,076
=========
Average daily number of shares outstanding during the period.......................................................... 515,270
---------
Average amount of debt per share during the period.................................................................... $ 1.60
---------
</TABLE>
- -------------
*Ratios have been annualized; total return has not been annualized.
See Notes to Financial Statements.
16
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
NOTES TO FINANCIAL STATEMENTS
NOTE 1--General:
The Alger Defined Contribution Trust (the "Fund") is a diversified, open-end
registered investment company organized as an unincorporated business trust
under the laws of the Commonwealth of Massachusetts. The Fund operates as a
series company and currently issues four classes of shares of beneficial
interest --Growth Portfolio, Small Cap Portfolio, MidCap Growth Portfolio and
Leveraged AllCap Portfolio (the "Portfolios").
NOTE 2--Significant Accounting Policies:
(a) Investment Valuation: Investments of the Portfolios are valued on each
day the New York Stock Exchange (the "NYSE") is open as of the close of the NYSE
(currently 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
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
at fair value, as determined in good faith pursuant to procedures established by
the Board of Trustees.
Short-term securities having a remaining maturity of sixty days or less are
valued at amortized cost which approximates market value.
(b) Securities Transactions and Investment Income: Securities transactions
are recorded on a trade date basis. Realized gains and losses from securities
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) Dividends to Shareholders: Dividends payable to shareholders are recorded
on the ex-dividend date. With respect to all Portfolios, dividends from net
investment income and dividends from net realized gains, offset by any loss
carry forward, are declared and paid annually after the end of the fiscal year
in which earned.
(d) 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 its taxable income to its shareholders.
Therefore, no federal income tax provision is required. Each Portfolio is
treated as a separate entity for the purpose of determining such compliance.
(e) 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. Organizational expenses are being amortized
from the date operations commenced over a five year period. The Fund's custodian
fees have been reduced as a result of earnings credits received on overnight
cash balances. Balances left on deposit with the custodian preclude their use
elsewhere.
NOTE 3--Investment Management Fees and Other Transactions with Affiliates:
(a) Investment Management Fees: Fees incurred by each Portfolio, pursuant to
the provisions of Investment Management Agreements (the "Agreements") with Fred
Alger Management, Inc. ("Alger Management"), are payable monthly and computed
based on the value of the average daily net assets of each Portfolio at the
following annual rates:
Growth Portfolio............................. .75%
Small Cap Portfolio.......................... .85
MidCap Growth Portfolio...................... .80
Leveraged AllCap Portfolio................... .85
The Agreements further provide that if in any fiscal year the aggregate
expenses of any Portfolio, excluding interest, taxes, brokerage commissions,
distribution fees and extraordinary expenses, exceed the expense limitation of
any state securities laws having jurisdiction over a Portfolio, Alger Management
will reimburse that Portfolio for the excess expense to the extent required by
such state laws.
(b) Brokerage Commissions: During the year ended October 31, 1995, the Growth
Portfolio, the Small Cap Portfolio, the MidCap Growth Portfolio and the
Leveraged AllCap Portfolio paid Fred Alger & Company, Incorporated ("Alger,
Inc."), the Fund's distributor, commissions of $31,030, $15,461, $21,998 and
$14,288, respectively, in connection with securities transactions.
(c) Transfer Agent Fees: Alger Shareholder Services, Inc. ("Alger Services"),
an affiliate of Alger Management, serves as transfer agent for the Fund. During
the year ended October 31, 1995, each Portfolio incurred fees of $2,500, for
services provided by Alger Services.
(d) Other Transactions With Affiliates: Certain trustees and officers of the
Fund are directors and officers of Alger Management, Alger, Inc. and Alger
Services. At October 31, 1995 Alger Management and its affiliates owned
1,119,754 shares, 661,403 shares, 667,898 shares and 638,068 shares of the
Growth Portfolio, the Small Cap Portfolio, the MidCap Growth Portfolio and the
Leveraged AllCap Portfolio, respectively.
NOTE 4--Securities Transactions:
The following summarizes the securities transactions by the Fund, other than
short-term securities, for the year ended October 31, 1995:
PURCHASES SALES
--------- -----
Growth Portfolio.................. $ 14,164,422 $ 13,951,323
Small Cap Portfolio............... 20,866,351 15,348,682
MidCap Growth Portfolio........... 11,037,985 10,580,743
Leveraged AllCap Portfolio........ 13,595,564 14,987,896
17
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER DEFINED CONTRIBUTION TRUST
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 5--Short-Term Borrowings:
The Leveraged AllCap Portfolio has a line of credit with a bank whereby it
may borrow up to 1/3 of its assets, as defined, up to a maximum of $25,000,000.
Such borrowings are collateralized by securities owned by the Portfolio, have a
variable interest rate and are payable on demand. For the year ended October 31,
1995, the Portfolio had borrowings which averaged $939,600 at a weighted average
interest rate of 8.82%.
NOTE 6--Share Capital:
The Fund has an unlimited number of authorized shares of beneficial interest
of $.001 par value which are presently divided into four classes of shares.
During the year ended October 31, 1995, transactions of shares of beneficial
interest were as follows:
SHARES AMOUNT
------ ------
Growth Portfolio
Shares sold 15,649 $ 171,231
Dividends reinvested 202,145 2,104,329
--------- -----------
217,794 2,275,560
Shares redeemed (470) (5,380)
--------- -----------
Net increase 217,324 $ 2,270,180
========= ===========
Small Cap Portfolio
Shares sold 422,015 $ 5,804,623
Dividends reinvested 5,085 75,100
--------- -----------
427,100 5,879,723
Shares redeemed (21,812) (310,355)
--------- -----------
Net increase 405,288 $ 5,569,368
========= ===========
MidCap Growth Portfolio
Shares sold 27,857 $ 369,295
Dividends reinvested 59,875 790,355
--------- -----------
87,732 1,159,650
Shares redeemed (1,007) (14,578)
--------- -----------
Net increase 86,725 $ 1,145,072
========= ===========
Leveraged AllCap Portfolio
Shares sold 14,786 $ 163,455
Dividends reinvested 117,787 1,300,367
--------- -----------
132,573 1,463,822
Shares redeemed (15,285) (177,912)
--------- -----------
Net increase 117,288 $ 1,285,910
========= ===========
During the period November 8, 1993 through October 31, 1994, transactions of
shares of beneficial interest were as follows:
SHARES AMOUNT
------ ------
Growth Portfolio
Shares sold 900,251 $ 5,372,304
Shares redeemed (1,121) (11,650)
--------- -----------
Net increase 899,130 $ 5,360,654
========= ===========
Small Cap Portfolio
Shares sold 889,510 $ 8,542,594
Shares redeemed (11,635) (111,154)
--------- -----------
Net increase 877,875 $ 8,431,440
========= ===========
MidCap Growth Portfolio
Shares sold 579,888 $ 5,095,040
Shares redeemed (2,014) (20,037)
--------- -----------
Net increase 577,874 $ 5,075,003
========= ===========
Leveraged AllCap Portfolio
Shares sold 520,548 $ 3,527,824
Shares redeemed (3,068) (28,987)
--------- -----------
Net increase 517,480 $ 3,498,837
========= ===========
The dollar amounts received for shares sold do not include the amounts
credited to net unrealized appreciation related to marketable securities
received in exchange for shares of beneficial interest.
18
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
of The Alger Defined Contribution Trust:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of The Alger Defined Contribution Trust
(a Massachusetts business trust comprising, respectively, the Alger Defined
Contribution Growth Portfolio, Alger Defined Contribution Small Cap Portfolio,
Alger Defined Contribution MidCap Growth Portfolio and Alger Defined
Contribution Leveraged AllCap Portfolio) as of October 31, 1995, and the related
statements of operations and cash flows for the year then ended and the
statements of changes in net assets and the financial highlights for the year
then ended and for the period ended October 31, 1994. 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. Our procedures included confirmation of securities owned as of
October 31, 1995, 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 Defined Contribution
Trust as of October 31, 1995, the results of their operations and their cash
flows for the year then ended and the changes in their net assets and the
financial highlights for the year then ended and for the period ended October
31, 1994, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
New York, New York
December 19, 1995
19
<PAGE>
This Page Intentionally Left Blank
<PAGE>
This Page Intentionally Left Blank
