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THE ALGER | Meeting the challenge
RETIREMENT | of investing
FUND |
Alger Growth
Retirement Portfolio
Alger Small Cap
Retirement Portfolio
Alger MidCap Growth
Retirement Portfolio
Alger Capital Appreciation
Retirement Portfolio
ANNUAL |
` REPORT | October 31, 1996
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<PAGE>
FELLOW SHAREHOLDERS: December 16, 1996
A YEAR-TO-DATE REVIEW
The fiscal year ended October 31, 1996 proved to be an interesting and turbulent
time in the market. As we started this period, our Portfolios were coming off an
extraordinary year, having significantly outperformed all relevant major market
indices. During the past twelve months, however, it has been much more difficult
to outperform the market. Although all of our Portfolios posted positive
returns, they did lag the relevant market indices to some degree. The good news
is that we feel that many of the factors which have contributed to our recent
performance are now behind us, setting the stage for a strong rebound next year.
In a sense, this past year has been almost a circle. We began with the
assumption that the economy was exceedingly weak, went through a period dating
from mid-March to late October during which the popular view was that the
economy was too strong, and are now moving back in the direction of closing the
year where we began it. During this time, the markets' volatility has been
exacerbated by several "fear factors," which I believe are now behind us.
I thought it might be useful to discuss these factors and explain why they are
in our past.
1. The Federal Reserve
Since March, the worries concerning both the bond and stock markets
have been that the economy was growing too quickly, unemployment
levels were too low, and inflation was just around the corner. It
was presumed that these concerns would lead to an increase in
Federal Reserve driven rates, most likely the Fed Funds rate, but
also possibly the discount rate. We have maintained that the
marketplace was exaggerating the extent of the strength in the
economy and, as a result, the Fed would not raise rates. Thus far,
we have been correct. One of the points that we have consistently
made has been that the economy, in the second half, was going to
slow dramatically from the rapid pace of the second quarter. On
October 30th, the GDP for the third quarter was announced and it
increased a scant 2.2%, now revised to 2%. Moreover, consumer
spending was up merely .6%, the smallest increase in almost five
years. Real final sales were up just .4%, the smallest gain since
the first quarter of 1993. Moreover, the implicit price deflator was
1.6%, even lower than the diminutive 1.8% of the second quarter.
Furthermore, payroll employment growth slowed significantly in the
third quarter of 1996. Average monthly gains amounted to 113,000,
well below the rate of gain in the first half of 1996. All of this
data leads us to the conclusion that there should be no more concern
about the Fed increasing interest rates this year.
2. Clinton-Phobia
One of the market's biggest concerns had been the prospect that the
Democrats would regain control of the political agenda. So intense
was this fear that health care stocks, thought to be especially
vulnerable, sold off dramatically prior to the election. As we now
know, the reality is far different. The Republicans retained control
of the House of Representatives. Additionally, they increased their
control of the Senate by two seats. This election essentially forces
a moderate agenda on President Clinton and probably dooms for a long
time to come any return to liberal issues. One can only conclude
that the election was a great triumph for investors.
3. Valuation Fears
I am frequently asked to address the question as to whether the
market is or is not over-valued at present. The answer emphatically
is that it is not. Contrast if you will, the present level of the
S&P Industrials compared to 1987. In 1987, at its peak, the S&P
<PAGE>
Industrials was selling in excess of 20x earnings, contrasted with
the long-bond yielding in excess of 9%. At present the S&P
Industrials is selling at 18.1x consensus estimates for 1997, while
the long-bond is yielding 6.7%.
I am also asked whether or not the deceleration of the economy could
put downward pressure on earnings, thereby impacting the market.
Growth stocks tend to do their best during periods of relatively
slack earnings. For example, 1991 was a slow year in the economy,
but one of the best years of performance in our history. The reason
for this is obvious. As the economy slows down, investors turn away
from large, cyclical stocks and concentrate on smaller, growth
stocks which can generate increased earnings independent of the
economy. This is made even more pronounced when it is preceded by a
period during which the multiples on growth stocks have been
compressed relative to the market as whole. This is certainly the
case in the current environment. For example, we estimate
preliminarily that the 5 year weighted average growth rate of the
stocks in the Alger Retirement Fund Portfolios currently ranges from
22.1% (Alger Growth Retirement Portfolio) to 26.9% (Alger Small Cap
Retirement Portfolio) as compared to a trend line growth rate of 7%
for the S&P Industrials. The P/E multiple on average, based on 1997
estimates, ranges from 18.5x (Alger Growth Retirement Portfolio) to
21.2x (Alger Small Cap Retirement Portfolio) which compares with the
multiple on the S&P Industrials at 18.1x. These numbers show that
there is very little premium in terms of valuation between our funds
and the index despite the fact that the growth rate on the stocks in
the funds is 3 times faster than the index.
We believe, therefore, that we may have a trampoline effect next year. While our
target for the Dow in 1997 is in the 7200 to 7300 range, we believe that our
funds could do considerably better if everything works right.
PORTFOLIO MATTERS
ALGER SMALL CAP RETIREMENT PORTFOLIO
The Portfolio's total return for the year was 9.20% versus a return of 13.33%
for the Russell 2000 Growth Index. This Portfolio's performance during this time
period is particularly gratifying given the extremely challenging conditions
which prevailed. When we began November 1995, the Portfolio had just produced a
one year return through October 31, 1995 of 66.19% versus 20.57% for the Russell
2000 Growth Index and 25.20% for the Wilshire Small Company Growth Index. These
tremendous gains were realized in large part by a substantial commitment to the
technology sector. Specifically, by the end of October 1995, the Portfolio had
19.4% of its assets invested in semiconductors, 16.5% in communications, 11.7%
in computer related & business equipment, 10.6% in computer software and 13.0%
in other technology related companies. It was with this allocation of assets
that the Portfolio entered into fiscal year 1996. The economy decelerated
sharply in the fourth quarter of 1995, and this had negative implications for
certain technology stocks, especially commodity-based semiconductors (DRAMs &
SRAMs) which were also beset by a build-up of capacity in Asia. At this point,
significant sell-offs began to occur. Our overweighting in this industry earlier
in the year contributed to the lackluster performance. As of fiscal year-end, we
had reduced our semiconductor exposure to 2.7%.
Also noteworthy is that during the recent June-July correction, small cap growth
stocks seemed to catch the brunt of the negativity. Additionally, the Russell
2000 Growth had a substantial exposure to the financial and energy sectors, both
of which performed very well during the 12 month period. These were areas in
which the Portfolio had minimal weighting, which accounts in part for the
Portfolio's relative underperformance.
ALGER GROWTH RETIREMENT PORTFOLIO
For the year ended October 31, 1996, the Portfolio's total return was 8.19% as
compared to 24.10% for the S&P 500. The economic uncertainty which prevailed
throughout most of the year resulted in defensive positioning of investors. As a
result, there was a flight to larger, less volatile, blue-chip type stocks.
Stocks of companies which are expected to grow their earnings at a faster rate
<PAGE>
(25%+), which are the types of stocks in which this Portfolio typically invests,
did not fare as well. Currently, good quality growth stocks, which typically
trade in a range of 1.5 to 2.5 times the market multiple, are trading at around
1.3 times based on our 1997 estimated earnings per share: below the low-end of
the historical range. In other words, investors are paying only a very small
premium for quality growth stocks, such as those in the Portfolio. As it becomes
clearer in the months ahead that the economy is expanding at a noninflationary,
steady pace, we expect that investor confidence will rebuild and premiums for
growth stocks will expand. This should translate into strong performance for the
Portfolio.
ALGER MIDCAP GROWTH RETIREMENT PORTFOLIO
For the year ended October 31, 1996, the Portfolio's total return was 6.24% as
compared to 17.35% for the S&P MidCap 400 Index. In the exceedingly volatile
environment that prevailed over the last 12 months, it proved very difficult to
find the right group of stocks. Although activity in the bond market made the
economy look, at times, overheated, corporate profits in the first half of the
year were not that strong. As a result, earnings for many of the stocks held in
the Portfolio grew at rates which were below expectations. Like the Alger Small
Cap Retirement Portfolio, this portfolio was also negatively impacted by its
large technology exposure, most notably semiconductors. At October 31, 1996, the
three largest industries represented in the Portfolio were retailing, computer
software and financial services. The Portfolio currently has a 5 year estimated
EPS of 25.4%, and with a P/E multiple (based on 1997 earnings estimates) of only
19.1x, demonstrates very attractive valuations relative to the market.
ALGER CAPITAL APPRECIATION RETIREMENT PORTFOLIO
For the year ended October 31, 1996, the Portfolio's total return was 6.11%,
compared to 24.10% for the S&P 500. The economic uncertainty which existed
throughout most of the year resulted in defensive positioning of investors. As a
result, there was a flight to larger, more predictable, blue-chip type stocks.
Therefore, the S&P 500 enjoyed a very strong year, driven by the larger, stable
companies in the index. This Portfolio employs an "allcap" (i.e. small, medium
and large capitalizations) portfolio management strategy, and thus was
relatively underweighted in these strong performing stocks. Additionally, as
smaller and mid cap stocks have been significantly lagging the larger averages,
the Portfolio's exposure to these types of stocks through its allcap strategy
has caused it to underperform the S&P 500, which has relatively little exposure
in these areas.
LOOKING AHEAD
The longer term looks very bright. Recently I have found myself being asked the
same question, "How long can this bull market go on?" I never hesitate to tell
people that I expect the market, as measured by the Dow Jones Industrial
Average, to hit 10,000 by the end of the decade. I think this answer seems to
many to be either a bit far fetched or a number that I picked because it sounds
good for the media, a nice, big, round number. This is how the 10,000 was
derived: I believe that the earnings per share of the Dow will be approximately
$365 in 1996. If the economy is able to grow at a 3% rate in GDP (which it
should, on average), I believe the Dow can grow its earnings at a 10% rate. This
should bring earnings in the year 2000 to about $535 per share. The median
relationship between the earnings yield on the averages and the long-bond has
been 75% over fifteen years. Based on this number, given a 7% long-bond (which
would presume a 3% inflation rate and a 4% real rate of return), the market
should have a multiple of 19x. This, multiplied by its earnings, gives the Dow a
value of 10190: QED!
In conclusion, I don't want to seem Panglossian, but we seem to be in the best
of all possible worlds. Interest rates, politics, inflation, the economy and the
stock market all seem to be going in the right direction at the same time. The
result should be good performance for the Portfolios.
Respectfully submitted,
/s/ David D. Alger
-------------------------------
David D. Alger
President
<PAGE>
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ALGER GROWTH RETIREMENT PORTFOLIO
Portfolio Highlights Through October 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
The Alger Growth Retirement 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
- --------------------------------------------------------------------------------
CHART
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger Growth Retirement Portfolio and the S&P 500 Index
on November 8, 1993, the inception date of the Alger Growth Retirement
Portfolio. The figures for both the Alger Growth Retirement Portfolio and the
S&P 500 Index, an unmanaged index of common stocks, include reinvestment of
dividends.
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PERFORMANCE COMPARISON THROUGH OCTOBER 31, 1996
- --------------------------------------------------------------------------------
Average Annual Return
Since Inception
1 Year 11/8/93
---------------------------------------------
Alger Growth
Retirement Portfolio 8.19% 15.58%
S&P 500 Index 24.10% 17.89%
---------------------------------------------
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>
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THE ALGER RETIREMENT FUND
ALGER GROWTH RETIREMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 1996
SHARES COMMON STOCKS--97.0% VALUE
------ -----
AEROSPACE--3.8%
2,400 Boeing Company (The) ............................. $ 228,900
2,300 Gulfstream Aerospace Corp.* ...................... 54,337
3,700 Sundstrand Corp. ................................. 148,925
-----------
432,162
-----------
APPAREL--.5%
1,000 Tommy Hilfiger Corporation* ...................... 52,000
-----------
BUILDING & CONSTRUCTION--.9%
5,800 Clayton Homes Inc. ............................... 97,875
-----------
CHEMICAL--2.9%
8,300 Monsanto Co. ..................................... 328,887
-----------
COMMUNICATIONS--4.4%
2,000 LCI International Inc.* .......................... 63,750
3,900 PictureTel Corp.* ................................ 105,300
1,500 Qualcomm Inc.* ................................... 59,625
2,000 Telecomunicacoes Brasileiras S.A. ADR ............ 149,000
5,000 WorldCom Inc.* ................................... 121,875
-----------
499,550
-----------
COMMUNICATIONS EQUIPMENT--7.3%
2,000 Ascend Communications, Inc.* ..................... 130,750
1,000 Cascade Communications Corp.* .................... 72,625
6,600 Cisco Systems, Inc.* ............................. 408,375
3,000 Glenayre Technolgies Inc.* ....................... 77,250
700 Pairgain Technologies Inc.* ...................... 48,213
1,000 Tellabs, Inc.* ................................... 85,125
-----------
822,338
-----------
COMPUTER RELATED &
BUSINESS EQUIPMENT--3.7%
1,000 Cable Design Technologies Corp.* ................. 26,000
2,700 Sun Microsystems Inc.* ........................... 164,700
2,600 3 Com Corp.* ..................................... 175,825
1,200 Xerox Corp. ...................................... 55,650
-----------
422,175
-----------
COMPUTER SOFTWARE--5.2%
2,900 Compuware Corp.* ................................. 152,975
9,900 Informix Corporation* ............................ 219,661
900 Microsoft Corporation* ........................... 123,525
2,000 Parametric Technology Corporation* ............... 97,750
-----------
593,911
-----------
COMPUTER TECHNOLOGY--2.0%
3,700 Adaptec, Inc.* ................................... 225,237
-----------
CONSUMER PRODUCTS--2.8%
3,900 CUC International Inc.* .......................... 95,550
2,000 Nike, Inc. Cl. B ................................. 117,750
3,000 Oakley, Inc.* .................................... 44,625
1,300 Tyco International Ltd. .......................... 64,513
-----------
322,438
-----------
DEFENSE--2.2%
4,600 McDonnell Douglas Corporation .................... 250,700
-----------
ENERGY & ENERGY SERVICES--2.0%
2,300 Schlumberger Ltd. ................................ 227,987
-----------
FINANCIAL SERVICES--10.5%
2,000 Chase Manhattan Corp. ............................ 171,500
3,500 Citicorp ......................................... 346,500
4,164 First Data Corporation ........................... 332,079
2,400 Green Tree Financial Corp. ....................... 95,100
5,300 Money Store Inc. (The) ........................... 136,475
4,500 Schwab (Charles) Corporation (The) ............... 112,500
-----------
1,194,154
-----------
FOOD CHAINS--.6%
1,500 Safeway Inc.* ..................................... 64,312
-----------
HEALTH CARE--9.5%
3,000 Boston Scientific Corp.* ......................... 163,125
2,250 Columbia/HCA Healthcare Corporation .............. 80,438
2,100 Guidant Corp. .................................... 96,863
3,700 Eli Lilly & Company .............................. 260,850
5,700 Merck & Co., Inc. ................................ 422,513
900 Warner-Lambert Co. ............................... 57,263
-----------
1,081,052
-----------
INSURANCE--3.0%
3,100 American International Group, Inc. ............... 336,737
-----------
LEISURE & ENTERTAINMENT--2.8%
10,000 International Game Technology .................... 211,250
4,600 Mirage Resorts, Incorporated* .................... 101,200
-----------
312,450
-----------
MACHINERY--.9%
2,100 Case Corp. ....................................... 97,650
-----------
MEDICAL SERVICES--1.0%
1,800 Medtronic, Inc. .................................. 115,875
-----------
OIL & GAS--2.2%
2,000 Halliburton Co. .................................. 113,250
2,500 Input/Output Inc.* ............................... 74,375
1,400 Tidewater Inc. ................................... 61,250
-----------
248,875
-----------
PHARMACEUTICALS--1.9%
500 Bristol Myers Squibb Co. ......................... 52,875
2,000 Pfizer Inc. ...................................... 165,500
-----------
218,375
-----------
POLLUTION CONTROL--1.9%
6,800 USA Waste Services ............................... 217,600
-----------
RESTAURANTS & LODGING--3.5%
3,700 Boston Chicken, Inc.* ............................ 134,588
10,000 Lone Star Steakhouse & Saloon, Inc.* ............. 256,250
-----------
390,838
-----------
RETAILING--10.4%
2,000 Cintas Corp.* .................................... 116,500
4,000 Dollar General Corp. ............................. 111,000
3,500 Gucci Group N.V .................................. 241,500
6,000 Home Depot, Inc. ................................. 328,500
2,100 Nine West Group Inc.* ............................ 104,737
15,375 OfficeMax, Inc.* ................................. 207,563
2,000 Rite Aid Corp. ................................... 68,000
-----------
1,177,800
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5
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
ALGER GROWTH RETIREMENT PORTFOLIO
SCHEDULE OF INVESTMENTS (Continued)
October 31, 1996
SHARES COMMON STOCKS (Continued) VALUE
------ -----
SEMI-CONDUCTORS--6.0%
4,100 Altera Corporation* ...................... $ 254,200
3,900 Intel Corp. .............................. 428,512
-----------
682,712
-----------
MISCELLANEOUS--5.1%
4,900 Loewen Group Inc. ........................ 194,162
13,400 Service Corp. International .............. 381,900
-----------
576,062
-----------
Total Common Stocks
(Cost $9,389,727) ........................ 10,989,752
-----------
PREFERRED STOCK--.6%
COMMUNICATIONS
1,400 Nokia Corporation, ADR
(Cost $66,042)............................. 64,925
-----------
PRINCIPAL
AMOUNT SHORT-TERM CORPORATE NOTES--1.0%
--------
$112,000 Bancomer S.A.,
5.26%, 11/8/96 (Cost $111,886)............. 111,886
-----------
Total Investments
(Cost $9,567,655)(a)............................... 98.6% 11,166,563
Other Assets in Excess of Liabilities .............. 1.4 158,593
----- -----------
Net Assets........................................... 100.0% $11,325,156
===== ===========
* Non-income producing security.
(a)At October 31, 1996, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $9,567,655, amounted to
$1,598,908 which consisted of aggregate gross unrealized appreciation of
$1,887,847 and aggregate gross unrealized depreciation of $288,939.
See Notes to Financial Statements.
6
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
ALGER GROWTH RETIREMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
FROM NOVEMBER 8, 1993
YEAR ENDED YEAR ENDED (COMMENCEMENT OF
OCTOBER 31, OCTOBER 31, OPERATIONS)
1996 1995 TO OCTOBER 31, 1994(I)
--------------------- --------------- -----------------------
<S> <C> <C> <C>
Net asset value, beginning of period ................... $ 11.65 $ 10.38 $ 10.00
------------ ------------ -------------
Net investment (loss) .................................. (0.01) (0.01) (0.03)
Net realized and unrealized gain on investments ........ 0.91 3.59 .41
------------ ------------ -------------
Total from investment operations ................ 0.90 3.58 .38
Distributions from net realized gains .................. (3.23) (2.31) --
------------ ------------ -------------
Net asset value, end of period ......................... $ 9.32 $ 11.65 $ 10.38
============ ============ =============
Total Return ........................................... 8.2% 37.1% 3.8%
============ ============ =============
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) ....... $ 11,325 $ 13,042 $ 9,365
============ ============ =============
Ratio of expenses to average net assets.......... 1.07%(ii) 1.11%(ii) 1.26%(ii)
============ ============ =============
Ratio of net investment income (loss) to
average net assets ............................ (.09%) (.18%) (.29%)
============ ============ =============
Portfolio Turnover Rate ......................... 142.83% 133.42% 103.79%
============ ============ =============
Average Commission Rate Paid .................... $ .0716
============
</TABLE>
(i) Ratios have been annualized; total return has not been annualized.
(ii) Reflects total expenses, including fees offset by earnings credits. The
expense ratio net of earnings credits would have been 1.06% and 1.08% for
the years ended October 31, 1996 and 1995, respectively. The expense ratio
for the period ended October 31, 1994 does not reflect the effect of fees
offset by earnings credits.
See Notes to Financial Statements.
7
<PAGE>
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ALGER SMALL CAP RETIREMENT PORTFOLIO
PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
The Alger Small Cap Retirement 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
- --------------------------------------------------------------------------------
CHART
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger Small Cap Retirement Portfolio and the Russell
2000 Growth Index on November 8, 1993, the inception date of the Alger Small
Cap Retirement Portfolio. The figures for the Alger Small Cap Retirement
Portfolio and the Russell 2000 Growth Index, an unmanaged index of common
stocks, include reinvestment of dividends.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON THROUGH OCTOBER 31, 1996
- --------------------------------------------------------------------------------
Average Annual Return
Since Inception
1 Year 11/8/93
------------------------------------------
Alger Small Cap
Retirement Portfolio 9.20% 25.45%
Russell 2000 Growth Index 13.33% 11.09%
------------------------------------------
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 RETIREMENT FUND
ALGER SMALL CAP RETIREMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 1996
SHARES COMMON STOCKS--97.2% VALUE
------ -----
AEROSPACE--1.2%
5,000 Greenwich Air Services Inc. Cl. A*............. $ 112,500
7,000 Greenwich Air Services Inc. Cl. B*............. 118,125
6,500 Wyman Gordon Co*............................... 143,000
-----------
373,625
-----------
APPAREL--4.7%
5,000 Designer Holdings Ltd.*........................ 95,625
9,000 Harold's Stores, Inc.*......................... 126,000
11,000 Jones Apparel Group Inc.*...................... 343,750
7,700 Mens Wearhouse Inc.*........................... 158,812
10,000 Nautica Enterprises Inc.*...................... 307,500
7,000 Tommy Hilfiger Corporation*.................... 364,000
-----------
1,395,687
-----------
AUTOMOTIVE EQUIPMENT
& SERVICES--.6%
7,400 Cross-Continent Auto Retailers, Inc.*.......... 189,625
-----------
BIO-TECHNOLOGY--2.8%
4,600 BioChem Pharma Inc.*........................... 196,075
15,000 CellPro Incorporated*.......................... 176,250
5,000 DEKALB Genetics Corp. Cl. B.................... 197,500
7,000 INCYTE Pharmaceuticals, Inc.*.................. 283,500
-----------
853,325
-----------
COMMUNICATIONS--2.1%
5,100 LCI International Inc.*........................ 162,562
4,600 PictureTel Corp.*.............................. 124,200
8,000 Saville Systems PLC ADR*....................... 345,000
-----------
631,762
-----------
COMMUNICATIONS EQUIPMENT--8.2%
11,900 Ascend Communications, Inc.*................... 777,963
3,800 Cascade Communications Corp.*.................. 275,975
5,000 Cisco Systems, Inc.*........................... 309,375
9,912 Glenayre Technologies Inc.*.................... 255,234
9,900 Tellabs, Inc.*................................. 842,737
-----------
2,461,284
-----------
COMPUTER RELATED &
BUSINESS EQUIPMENT--4.8%
13,800 Network Appliance Inc.*........................ 483,000
42,000 Raster Graphics Inc............................ 351,750
9,100 3 Com Corp.*................................... 615,388
-----------
1,450,138
-----------
COMPUTER SERVICES--9.8%
3,900 Acxiom Corp.*.................................. 153,075
8,300 Employee Solutions Inc.*....................... 183,638
15,000 FactSet Research Systems Inc.*................. 360,000
11,800 International Network Services*................ 421,850
9,400 Keane Inc.*.................................... 435,925
4,000 National Data Corp............................. 164,500
8,900 Quick Response Service Inc.*................... 330,412
11,800 Technology Solutions Co.*...................... 458,725
9,000 Whittman-Hart, Inc.*........................... 427,500
-----------
2,935,625
-----------
COMPUTER SOFTWARE--11.7%
2,100 Applix Inc.*................................... 50,925
9,700 Auspex Systems Inc.*........................... 99,425
11,100 Compuware Corp.*............................... 585,525
9,000 Electronics For Imaging Inc.*.................. 648,000
6,000 HBO & Company.................................. 360,750
5,500 Informix Corporation*.......................... 122,033
10,000 Infinity Financial Technology Inc.*............ 163,750
13,000 Learning Company Inc. (The)*................... 264,069
16,200 Medic Computer Systems, Inc.*.................. 457,650
10,000 S3 Incorporated*............................... 188,750
23,600 Structural Dynamics Research Corp.*............ 418,900
5,400 Systemsoft Corp.*.............................. 152,550
-----------
3,512,327
-----------
COMPUTER TECHNOLOGY--6.4%
5,200 Adaptec, Inc.*................................. 316,550
5,900 Checkpoint Systems Inc.*....................... 132,013
6,600 Cirrus Logic, Inc.*............................ 125,400
6,800 Citrix Systems, Inc.*.......................... 375,700
4,700 Sterling Commerce, Inc.*....................... 132,188
17,700 Videoserver Inc.*.............................. 838,538
-----------
1,920,389
-----------
CONSUMER PRODUCTS--1.0%
10,000 G&K Services Inc., Cl. A....................... 290,000
-----------
DEFENSE--.8%
13,200 Rohr Inc....................................... 244,200
-----------
FINANCIAL SERVICES--2.8%
5,500 Concord EFS Inc.*.............................. 159,500
21,000 Money Store Inc. (The)......................... 540,750
7,500 PMT Services, Inc.*............................ 150,000
-----------
850,250
-----------
FOODS & BEVERAGES--.5%
10,300 Fine Host Corp.*............................... 149,350
-----------
HEALTH CARE--3.4%
3,200 Access Health, Inc.*........................... 105,600
3,500 Clintrials Research Inc.*...................... 129,938
11,700 Omnicare, Inc.................................. 318,825
10,000 Orthodontic Centers of America, Inc.*.......... 143,750
14,800 Physicians Sales & Service, Inc.*.............. 314,500
-----------
1,012,613
-----------
INDUSTRIAL EQUIPMENT--.2%
2,200 Waters Corporation*............................ 68,200
-----------
LEISURE & ENTERTAINMENT--2.3%
14,800 Cinar Films, Inc. Cl. B*....................... 362,600
15,000 International Game Technology*................. 316,875
-----------
679,475
-----------
MEDICAL DEVICES--5.5%
32,900 CONMED Corporation*............................ 567,525
20,200 Hologic, Inc.*................................. 459,550
1,000 Intercardia, Inc.*............................. 23,000
6,000 Mentor Corp.................................... 132,750
4,800 Target Therapeutics, Inc.*..................... 177,600
10,650 ESC Medical Systems Ltd.*...................... 294,205
-----------
1,654,630
-----------
MEDICAL SERVICES--5.7%
6,000 American Medical Response Inc.*................ 180,000
13,600 Biopsys Medical Inc.*.......................... 232,900
7,600 CompDent Corp.*................................ 261,250
11,000 Lincare Holdings Inc.*......................... 412,500
9,362 PhyCor, Inc.*.................................. 290,222
5,300 Quintiles Transnational Corp.*................. 348,475
-----------
1,725,347
-----------
METALS--.6%
5,900 Titanium Metals Corporation*................... 181,425
-----------
9
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
ALGER SMALL CAP RETIREMENT PORTFOLIO
SCHEDULE OF INVESTMENTS (Continued)
October 31, 1996
SHARES COMMON STOCKS (Continued) VALUE
------ -----
OIL & GAS--.7%
3,800 CBT Group PLC ADS*............................. $ 209,000
-----------
PAPER PACKAGING &
FOREST PRODUCTS--.5%
3,600 Sealed Air Corp.*.............................. 139,950
-----------
POLLUTION CONTROL--4.9%
19,500 USA Waste Services, Inc.*...................... 624,000
12,750 U.S. Filter Corp.*............................. 439,875
11,600 United Waste Systems, Inc.*.................... 398,750
-----------
1,462,625
-----------
RESEARCH--1.0%
10,000 Gartner Group Inc. Cl. A*...................... 307,500
-----------
RESTAURANT & LODGING--1.5%
18,000 Lone Star Steakhouse & Saloon, Inc.*............ 461,250
99 Outback Steakhouse, Inc.*....................... 2,296
-----------
463,546
-----------
RETAILING--7.3%
6,500 Eagle Hardware & Garden, Inc.*.................. 186,063
12,000 Loehmann's, Inc.*............................... 322,500
10,700 Mossimo, Inc.*.................................. 231,387
5,500 PetsMart Inc.*.................................. 148,500
4,100 Saks Holdings, Inc.*............................ 143,500
23,300 Sports Authority Inc. (The)*.................... 565,025
7,900 Stage Stores, Inc.*............................. 144,175
4,600 TJX Companies, Inc.............................. 184,000
4,000 Tiffany & Co.................................... 148,000
3,500 West Marine Inc.*............................... 123,375
-----------
2,196,525
-----------
SEMI-CONDUCTORS--2.7%
10,200 Maxim Integrated Products, Inc.*................ 357,000
5,000 Microchip Technology Incorporated*.............. 181,250
8,100 Xilinx, Inc.*................................... 265,275
-----------
803,525
-----------
MISCELLANEOUS--3.5%
9,600 Loewen Group, Inc............................... 380,400
13,000 Metromail Corporation*.......................... 238,875
8,000 Rural/Metro Corporation*........................ 292,000
7,000 Veterinary Centers of America Inc.*............. 128,625
-----------
1,039,900
-----------
Total Common Stocks (Cost $24,593,470).......... 29,201,848
-----------
PRINCIPAL
AMOUNT SHORT-TERM CORPORATE NOTES--2.1% VALUE
-------- -----
$645,000 Bancomer S.A.,
5.26%, 11/8/96 (Cost $644,340)............... $ 644,340
-----------
Total Investments
(Cost $25,237,810)(a)......................... 99.3% 29,846,188
Other Assets in Excess of Liabilities........... .7 196,547
----- -----------
Net Assets...................................... 100.0% $30,042,735
===== ===========
*Non-income producing security.
(a)At October 31, 1996, the net unrealized appreciation on investments, based
on cost for federal income tax purposes of $25,237,810, amounted to
$4,608,378, which consisted of aggregate gross unrealized appreciation of
$5,862,315 and aggregate gross unrealized depreciation of $1,253,937.
See Notes to Financial Statements.
10
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
ALGER SMALL CAP RETIREMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
FROM NOVEMBER 8, 1993
YEAR ENDED YEAR ENDED (COMMENCEMENT OF
OCTOBER 31, OCTOBER 31, OPERATIONS)
1996 1995 TO OCTOBER 31, 1994(I)
------------ ----------- ----------------------
<S> <C> <C> <C>
Net asset value, beginning of period .......... $ 17.92 $ 10.83 $ 10.00
-------- -------- --------
Net investment (loss) ......................... (0.05) (0.07) (0.07)
Net realized and unrealized gain on investments 1.72 7.23 .90
-------- -------- --------
Total from investment operations .......... 1.67 7.16 .83
Distributions from net realized gains ......... (1.72) (0.07) --
-------- -------- --------
Net asset value, end of period ................ $ 17.87 $ 17.92 $ 10.83
======== ======== ========
Total Return .................................. 9.2% 66.2% 8.3%
======== ======== ========
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) ... $ 30,043 $23,002 $ 9,513
======== ======== ========
Ratio of expenses to average net assets ..... 1.05%(ii) 1.13%(ii) 1.47%(ii)
======== ======== ========
Ratio of net investment income (loss) to
average net assets ........................ (.54%) (.73%) (.80%)
======== ======== ========
Portfolio Turnover Rate ..................... 182.49% 104.84% 186.76%
======== ======== ========
Average Commission Rate Paid ................ $ .0629
========
</TABLE>
(i)Ratios have been annualized; total return has not been annualized.
(ii)Reflects total expenses, including fees offset by earnings credits. The
expense ratio net of earnings credits would have been 1.03% and 1.06% for
the years ended October 31, 1996 and 1995, respectively. The expense ratio
for the period ended October 31, 1994 does not reflect the effect of fees
offset by earnings credits.
See Notes to Financial Statements.
11
<PAGE>
- --------------------------------------------------------------------------------
ALGER MIDCAP GROWTH RETIREMENT PORTFOLIO
PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
The Alger MidCap Growth Retirement Portfolio invests in mid-sized companies.
- --------------------------------------------------------------------------------
$10,000 HYPOTHETICAL INVESTMENT SINCE INCEPTION NOVEMBER 8, 1993
- --------------------------------------------------------------------------------
CHART
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger MidCap Growth Retirement Portfolio and the S&P
MidCap 400 Index on November 8, 1993, the inception date of the Alger MidCap
Growth Retirement Portfolio. Figures for the Alger MidCap Growth Retirement
Portfolio and the S&P MidCap 400 Index, an unmanaged index of common stocks,
include reinvestment of dividends.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON THROUGH OCTOBER 31, 1996
- --------------------------------------------------------------------------------
Average Annual Return
Since Inception
1 Year 11/8/93
-------------------------------------------
Alger MidCap Growth
Retirement Portfolio 6.24% 24.22%
S&P MidCap 400 Index 17.35% 13.65%
-------------------------------------------
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.
12
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
ALGER MIDCAP GROWTH RETIREMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 1996
SHARES COMMON STOCKS--97.6% VALUE
------- -----
AEROSPACE--2.4%
2,000 Gulfstream Aerospace Corp.*.................... $ 47,250
4,700 Sundstrand Corp................................ 189,175
----------
236,425
----------
APPAREL--1.1%
2,000 Tommy Hilfiger Corporation*.................... 104,000
----------
COMMUNICATIONS--7.1%
2,500 EXCEL Communications, Inc.*.................... 65,000
3,200 LCI International Inc.*........................ 102,000
3,400 PictureTel Corp.*.............................. 91,800
4,600 Qualcomm Inc.*................................. 182,850
2,000 Univision Communications Inc. Cl. A............ 67,500
7,300 WorldCom Inc.*................................. 177,938
----------
687,088
----------
COMMUNICATIONS & EQUIPMENT--6.7%
1,500 Ascend Communications, Inc.*................... 98,063
1,000 Cascade Communications Corp.*.................. 72,625
5,400 Cisco Systems, Inc.*........................... 334,125
2,300 Glenayre Technologies Inc.*.................... 59,225
600 Pairgain Technologies Inc.*.................... 41,325
500 Tellabs, Inc.*................................. 42,563
----------
647,926
----------
COMPUTER RELATED &
BUSINESS EQUIPMENT--2.0%
2,000 Cable Design Technologies Corp.*............... 52,000
2,100 3 Com Corp.*................................... 142,010
----------
194,010
----------
COMPUTER SOFTWARE--8.9%
2,500 Compuware Corp.*............................... 131,875
2,000 Electronics For Imaging Inc.*.................. 144,000
10,000 Informix Corporation*.......................... 221,880
3,500 Medic Computer Systems, Inc.*.................. 98,875
1,500 Parametric Technology Corporation*............. 73,311
4,000 S3 Incorporated*............................... 75,500
7,000 Structural Dynamics Research Corp.*............ 124,250
----------
869,691
----------
COMPUTER TECHNOLOGY--3.4%
3,800 Adaptec, Inc.*................................. 231,325
3,600 Sterling Commerce, Inc.*....................... 101,250
----------
332,575
----------
CONSUMER PRODUCTS--3.0%
6,750 CUC International Inc.*........................ 165,375
5,000 Oakley, Inc.*.................................. 74,375
1,100 Tyco International Ltd......................... 54,588
----------
294,338
----------
FINANCIAL SERVICES--7.9%
3,400 Equifax Inc.................................... 101,150
2,000 First Data Corporation......................... 159,500
3,000 Green Tree Financial Corp.*.................... 118,875
11,500 Money Store Inc. (The)......................... 296,125
3,800 Schwab (Charles) Corporation (The)............. 95,000
----------
770,650
----------
FOOD CHAINS--.5%
1,200 Safeway Inc.*.................................. 51,450
----------
HEALTH CARE--2.8%
2,200 Access Health, Inc.*........................... 72,600
2,000 Boston Scientific Corp.*....................... 108,750
1,900 Guidant Corp................................... 87,638
----------
268,988
----------
INDUSTRIAL EQUIPMENT--.4%
1,000 Smith International Inc........................ 38,000
----------
LEISURE & ENTERTAINMENT--4.3%
12,500 International Game Technology.................. 264,063
7,000 Mirage Resorts, Incorporated*.................. 154,000
----------
418,063
----------
MACHINERY--.9%
1,800 Case Corp...................................... 83,700
----------
MANUFACTURING--.7%
3,400 American Power Conversion Corp.*............... 72,675
----------
MEDICAL DEVICES--1.7%
2,500 Hologic, Inc.*................................. 56,875
2,000 Target Therapeutics, Inc.*..................... 74,000
1,500 VISX, Incorporated*............................ 37,875
----------
168,750
----------
MEDICAL SERVICES--.6%
2,000 PhyCor, Inc.*.................................. 62,000
----------
METALS--1.3%
4,100 Titanium Metals Corporation*................... 126,075
----------
OIL & GAS--4.2%
1,900 Halliburton Co................................. 107,588
4,000 Input/Output Inc.*............................. 119,000
1,500 MGIC Investment Corp.*......................... 102,938
1,700 Tidewater Inc.................................. 74,375
----------
403,901
----------
PAPER PACKAGING &
FOREST PRODUCTS--1.6%
4,000 Sealed Air Corp.*.............................. 155,500
----------
POLLUTION CONTROL--4.3%
6,600 USA Waste Services, Inc.*...................... 211,200
6,000 United Waste Systems, Inc.*.................... 206,250
----------
417,450
----------
RESEARCH--.5%
1,500 Gartner Group Inc. Cl. A*...................... 46,125
----------
RESTAURANTS & LODGING--5.3%
3,200 Boston Chicken Inc.*........................... 116,400
2,000 Landry's Seafood Restaurants, Inc.*............ 41,000
11,700 Lone Star Steakhouse & Saloon, Inc.*........... 299,813
2,300 Outback Steakhouse, Inc.*...................... 53,330
----------
510,543
----------
RETAILING--14.4%
3,500 Cintas Corp.................................... 203,875
5,000 Dollar General Corp............................ 138,750
3,200 Gucci Group N.V................................ 220,800
1,500 Neiman Marcus Group, Inc. (The)*............... 48,938
3,000 Nine West Group Inc.*.......................... 149,625
15,250 OfficeMax, Inc.*............................... 205,875
2,800 PetsMart, Inc.*................................ 75,600
1,500 Rite Aid Corp.................................. 51,000
1,400 Saks Holdings, Inc.*........................... 49,000
8,750 Sports Authority Inc. (The)*................... 212,188
1,200 TJX Companies, Inc............................. 48,000
----------
1,403,651
----------
13
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
ALGER MIDCAP GROWTH RETIREMENT PORTFOLIO
SCHEDULE OF INVESTMENTS (Continued)
October 31, 1996
SHARES COMMON STOCKS (Continued) VALUE
------- -----
SEMI-CONDUCTORS--5.3%
3,900 Altera Corporation*............................ $ 241,800
1,500 Maxim Integrated Products, Inc.*............... 52,500
2,800 Microchip Technology Incorporated*............. 101,500
3,600 Xilinx, Inc.*.................................. 117,900
----------
513,700
----------
TRANSPORTATION--.7%
2,500 Coach USA Inc.*................................ 68,125
----------
MISCELLANEOUS--5.6%
5,500 Loewen Group Inc............................... 217,938
11,600 Service Corporation International.............. 330,600
----------
548,538
----------
Total Common Stocks
(Cost $8,251,378)............................ 9,493,937
----------
PREFERRED STOCK--1.1%
COMMUNICATIONS
2,300 Nokia Corporation, ADR
(Cost $105,639).............................. 106,663
----------
Total Investments
(Cost $8,357,017)(a)........................ 98.7% 9,600,600
Other Assets in Excess of Liabilities ........ 1.3 125,323
------ -----------
Net Assets.................................... 100.0% $ 9,725,923
===== ===========
*Non-income producing security.
(a)At October 31, 1996, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $8,357,017, amounted to $1,243,583
which consisted of aggregate gross unrealized appreciation of $1,581,890 and
aggregate gross unrealized depreciation of $338,307.
See Notes to Financial Statements.
14
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
ALGER MIDCAP GROWTH RETIREMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
FROM NOVEMBER 8, 1993
YEAR ENDED YEAR ENDED (COMMENCEMENT OF
OCTOBER 31, OCTOBER 31, OPERATIONS)
1996 1995 TO OCTOBER 31, 1994(I)
---------------- ------------ --------------------
<S> <C> <C> <C>
Net asset value, beginning of period ........................ $ 16.34 $ 11.66 $ 10.00
------------ ------------ -------------
Net investment (loss) ....................................... (0.07) (0.07) (0.09)
Net realized and unrealized gain on investments ............. 1.09 6.07 1.75
------------ ------------ -------------
Total from investment operations ..................... 1.02 6.00 1.66
Distributions from net realized gains ....................... (2.88) (1.32) --
------------ ------------ -------------
Net asset value, end of period .............................. $ 14.48 $ 16.34 $ 11.66
============ ============ =============
Total Return ................................................ 6.2% 54.1% 16.6%
============ ============ =============
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) ............ $ 9,726 $ 10,914 $ 6,774
============ ============ =============
Ratio of expenses to average net assets .............. 1.16%(ii) 1.23%(ii) 1.53%(ii)
============ ============ =============
Ratio of net investment income (loss) to
average net assets ................................. (.45%) (.69%) (.89%)
============ ============ =============
Portfolio Turnover Rate .............................. 170.21% 132.74% 134.06%
============ ============ =============
Average Commission Rate Paid.......................... $ .0682
============
</TABLE>
(i) Ratios have been annualized; total return has not been annualized.
(ii) Reflects total expenses, including fees offset by earnings credits. The
expense ratio net of earnings credits would have been 1.14% and 1.16% for
the years ended October 31, 1996 and 1995, respectively. The expense ratio
for the period ended October 31, 1994 does not reflect the effect of fees
offset by earnings credits.
See Notes to Financial Statements.
15
<PAGE>
- --------------------------------------------------------------------------------
ALGER CAPITAL APPRECIATION RETIREMENT PORTFOLIO
PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
The Alger Capital Appreciation Retirement Portfolio focuses on companies with
promising growth potential while using some special investment tools such as
leveraging and options and futures transactions.
- --------------------------------------------------------------------------------
$10,000 HYPOTHETICAL INVESTMENT SINCE INCEPTION NOVEMBER 8, 1993
- --------------------------------------------------------------------------------
CHART
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Alger Capital Appreciation Retirement Portfolio and the
S&P 500 Index on November 8, 1993, the inception date of the Alger Capital
Appreciation Retirement 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, 1996
- --------------------------------------------------------------------------------
Average Annual Return
Since Inception
1 Year 11/8/93
-------------------------------------
Alger Capital Appreciation
Retirement Portfolio 6.11% 18.33%
S&P 500 Index 24.10% 17.89%
-------------------------------------
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.
16
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
ALGER CAPITAL APPRECIATION RETIREMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 1996
SHARES COMMON STOCKS--99.5% VALUE
------ -----
AEROSPACE--4.8%
1,700 Boeing Company (The)........................... $ 162,138
1,500 Gulfstream Aerospace Corp.*.................... 35,438
1,500 Sundstrand Corp................................ 60,375
3,000 Wyman Gordon Co.*.............................. 66,000
-----------
323,951
-----------
APPAREL--.9%
1,100 Tommy Hilfiger Corporation*.................... 57,200
-----------
BIO-TECHNOLOGY--3.2%
2,500 BioChem Pharma Inc.*........................... 106,563
5,000 CellPro Incorporated*.......................... 58,750
1,700 Centocor, Inc.*................................ 49,938
-----------
215,251
-----------
CHEMICALS--2.8%
4,800 Monsanto Co.................................... 190,200
-----------
COMMUNICATIONS--5.0%
2,000 EXCEL Communications Inc.*..................... 52,000
1,400 LCI International Inc.*........................ 44,625
600 Lucent Technologies Inc........................ 28,200
900 MFS Communications Co. Inc.*................... 45,113
1,000 PictureTel Corp.*.............................. 27,000
900 Telecomunicacoes Brasileiras S.A. ADR.......... 67,050
2,900 WorldCom Inc.*................................. 70,688
-----------
334,676
-----------
COMMUNICATIONS EQUIPMENT--14.8%
3,200 Ascend Communications, Inc.*................... 209,200
900 Cascade Communications Corp.*.................. 65,363
4,200 Cisco Systems, Inc.*........................... 259,875
2,450 Glenayre Technologies Inc.*.................... 63,088
1,500 Pairgain Technologies Inc.*.................... 103,313
3,400 Tellabs, Inc.*................................. 289,425
-----------
990,264
-----------
COMPUTER RELATED &
BUSINESS EQUIPMENT--5.4%
1,600 Network Appliance, Inc.*....................... 56,000
1,600 Sun Microsystems, Inc.*........................ 97,600
2,600 3 Com Corp.*................................... 175,825
700 Xerox Corp..................................... 32,463
-----------
361,888
-----------
COMPUTER SERVICES--3.3%
2,200 International Network Services*................ 78,650
2,500 Paychex, Inc................................... 142,500
-----------
221,150
-----------
COMPUTER SOFTWARE--12.1%
2,500 Compuware Corp.*............................... 131,875
2,000 Electronics For Imaging Inc.*.................. 144,000
2,400 HBO & Company.................................. 144,300
6,100 Informix Corporation*.......................... 135,347
500 Microsoft Corporation*......................... 68,625
2,400 Learning Company Inc. (The)*................... 48,750
1,600 Parametric Technology Corporation*............. 78,200
3,400 Structural Dynamics Research Corp.*............ 60,350
-----------
811,447
-----------
COMPUTER TECHNOLOGY--4.2%
1,700 Adaptec, Inc.*................................. 103,488
2,000 Citrix Systems, Inc.*.......................... 110,500
2,300 Sterling Commerce, Inc.*....................... 64,688
-----------
278,676
-----------
DEFENSE--1.3%
1,000 Lockheed Martin Corp........................... 89,625
-----------
ENERGY & ENERGY SERVICES--2.1%
1,400 Schlumberger Ltd............................... 138,775
-----------
FINANCIAL SERVICES--7.6%
1,300 Chase Manhattan Corp........................... 111,475
1,100 Citicorp....................................... 108,900
2,000 First Data Corporation......................... 159,500
5,000 Money Store Inc. (The)......................... 128,750
-----------
508,625
-----------
FOOD CHAINS--.5%
800 Safeway Inc.*.................................. 34,300
-----------
HEALTHCARE--1.7%
1,600 Eli Lilly & Company............................ 112,800
-----------
INSURANCE--2.0%
1,200 American International Group, Inc.............. 130,350
-----------
LEISURE & ENTERTAINMENT--2.4%
4,900 International Game Technology.................. 103,511
2,700 Mirage Resorts, Incorporated*.................. 59,400
-----------
162,911
-----------
MEDICAL SERVICES--3.5%
1,400 ESC Medical Systems Ltd........................ 38,675
1,100 Hologic, Inc.*................................. 25,025
3,000 PhyCor, Inc.*.................................. 93,000
2,000 Target Therapeutics, Inc.*..................... 74,000
-----------
230,700
-----------
METALS--.6%
1,400 Titanium Metals Corporation*................... 43,050
-----------
OIL & GAS--1.9%
600 Halliburton Co................................. 33,975
2,000 Input/Output Inc.*............................. 59,500
800 Tidewater Inc.................................. 35,000
-----------
128,475
-----------
PHARMACEUTICALS--2.7%
1,500 Astra AB-Sponsored ADS Ser A................... 68,811
300 Bristol Myers Squibb Co........................ 31,725
1,000 Pfizer Inc..................................... 82,750
-----------
183,286
-----------
POLLUTION CONTROL--1.4%
3,000 USA Waste Services, Inc.*...................... 96,000
-----------
RESEARCH--.8%
1,700 Gartner Group Inc. Cl. A*...................... 52,275
-----------
17
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
ALGER CAPITAL APPRECIATION RETIREMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
October 31, 1996
SHARES COMMON STOCKS (CONTINUED) VALUE
------ -----
RETAILING--6.3%
2,000 Dollar General Corp............................ $ 55,500
2,200 Gucci Group N.V................................ 151,800
1,800 Home Depot, Inc................................ 98,550
1,500 Nine West Group Inc.*.......................... 74,811
1,100 TJX Companies, Inc............................. 44,000
-----------
424,661
-----------
SEMI-CONDUCTORS--4.3%
1,300 Altera Corporation*............................ 80,600
1,900 Intel Corp..................................... 208,762
-----------
289,362
-----------
MISCELLANEOUS--3.9%
4,400 Loewen Group Inc............................... 174,350
3,000 Service Corporation International.............. 85,500
-----------
259,850
-----------
Total Common Stocks (Cost $5,671,183).......... 6,669,748
-----------
PREFERRED STOCK--.6%
COMMUNICATIONS
800 Nokia Corporation, ADR
(Cost $37,735)............................... 37,100
-----------
Total Investments (Cost $5,708,918)(a).......... 100.1% 6,706,848
Liabilities in Excess of Other Assets........... (.1) (3,477)
----- ----------
Net Assets ................................... 100.0% $6,703,371
===== ==========
*Non-income producing security.
(a)At October 31, 1996, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $5,708,918, amounted to $997,930
which consisted of aggregate gross unrealized appreciation of $1,127,090 and
aggregate gross unrealized depreciation of $129,160.
See Notes to Financial Statements.
18
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
ALGER CAPITAL APPRECIATION RETIREMENT PORTFOLIO(I)
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
FROM NOVEMBER 8, 1993
YEAR ENDED YEAR ENDED (COMMENCEMENT OF
OCTOBER 31, OCTOBER 31, OPERATIONS)
1996 1995 TO OCTOBER 31, 1994(II)
----------- ------------- -----------------------
<S> <C> <C> <C>
Net asset value, beginning of period ..................... $ 12.72 $ 10.08 $ 10.00
------------ ------------ -------------
Net investment (loss) .................................... (0.07) (0.19) (0.23)
Net realized and unrealized gain on investments .......... 0.83 5.30 0.31
------------ ------------ -------------
Total from investment operations .................. 0.76 5.11 0.08
Distributions from net realized gain ..................... (3.60) (2.47) --
------------ ------------ -------------
Net asset value, end of period ........................... $ 9.88 $ 12.72 $ 10.08
============ ============ =============
Total Return ............................................. 6.1% 54.4% 0.8%
============ ============ =============
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) ......... $ 6,703 $ 8,116 $ 5,251
============ ============ =============
Ratio of expenses excluding interest to
average net assets .............................. 1.37% 1.43% 1.78%
============ ============ =============
Ratio of expenses including interest to
average net assets............................... 1.44%(iii) 2.70%(iii) 2.87%(iii)
============ ============ =============
Ratio of net investment income (loss) to
average net assets .............................. (0.94%) (2.32%) (2.53%)
============ ============ =============
Portfolio Turnover Rate .................................. 203.46% 188.53% 229.11%
============ ============ =============
Average Commission Rate Paid ............................. $ .0668 -- --
============ ============ =============
Debt outstanding at end of period ........................ $ -- $ 302,600 $ 955,600
============ ============ =============
Average amount of debt outstanding during
the period ............................................. $ 62,130 $ 939,600 $ 826,076
============ ============ =============
Average daily number of shares outstanding
during the period....................................... 595,051 565,805 515,270
============ ============ =============
Average amount of debt per share during
the period ............................................. $ .10 $ 1.66 $ 1.60
============ ============ =============
</TABLE>
(i)Prior to April 12, 1996, the Alger Capital Appreciation Retirement
Portfolio was the Alger Defined Contribution Leveraged AllCap Portfolio.
(ii)Ratios have been annualized; total return has not been annualized.
(iii)Reflects total expenses, including fees offset by earnings credits. The
expense ratio net of earnings credits would have been 1.42% and 2.66% for
the years ended October 31, 1996 and October 31, 1995, respectively. The
expense ratio for the period ended October 31, 1994 does not reflect the
effect of fees offset by earnings credits.
See Notes to Financial Statements.
19
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1996
<TABLE>
<CAPTION>
MIDCAP CAPITAL
GROWTH SMALL CAP GROWTH APPRECIATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value (identified cost*)-
see accompanying schedules of investments ........... $ 11,166,563 $29,846,188 $9,600,600 $ 6,706,848
Cash .................................................. 1,604 35,255 84,330 64,772
Receivable for investment securities sold ............. 381,582 491,625 140,773 421,245
Receivable for shares of beneficial interest sold ..... 6,784 256,323 8,361 6,533
Dividends receivable .................................. 2,795 450 565 962
Prepaid expenses and other assets ..................... 3,685 5,555 3,697 3,566
------------ ------------ ------------ ------------
Total Assets ...................................... 11,563,013 30,635,396 9,838,326 7,203,926
------------ ------------ ------------ ------------
LIABILITIES:
Payable for investment securities purchased ........... 217,013 550,384 92,300 482,313
Accrued investment management fees .................... 7,287 21,978 6,773 4,916
Accrued expenses ...................................... 13,557 20,299 13,330 13,326
------------ ------------ ------------ ------------
Total Liabilities ................................. 237,857 592,661 112,403 500,555
------------ ------------ ------------ ------------
NET ASSETS ............................................ $ 11,325,156 $30,042,735 $9,725,923 $ 6,703,371
============ ============ ============ ============
Net Assets Consist of:
Paid-in capital ..................................... $ 7,789,930 $21,221,689 $6,023,276 $ 4,731,419
Undistributed net investment income
(accumulated loss) ................................ (55,121) (315,635) (153,744) (338,035)
Undistributed net realized gain ..................... 1,991,439 4,528,303 2,612,808 1,312,057
Net unrealized appreciation ......................... 1,598,908 4,608,378 1,243,583 997,930
------------ ------------ ------------ ------------
NET ASSETS ............................................ $ 11,325,156 $30,042,735 $9,725,923 $ 6,703,371
============ ============ ============ ============
Shares of beneficial interest outstanding--Note 6 ..... 1,214,656 1,681,292 671,612 678,556
============ ============ ============ ============
NET ASSET VALUE PER SHARE ............................. $ 9.32 $ 17.87 $ 14.48 $ 9.88
============ ============ ============ ============
*Identified cost ...................................... $ 9,567,655 $25,237,810 $8,357,017 $ 5,708,918
============ ============ ============ ============
See Notes to Financial Statements.
20
</TABLE>
<PAGE>
THE ALGER RETIREMENT FUND
STATEMENTS OF OPERATIONS
For the year ended October 31, 1996
<TABLE>
<CAPTION>
MIDCAP CAPITAL
GROWTH SMALL CAP GROWTH APPRECIATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO*
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends ........................................ $ 73,086 $ 5,316 $ 14,168 $ 15,567
Interest ......................................... 39,699 123,973 54,969 17,457
----------- ----------- ----------- -----------
Total income ................................... 112,785 129,289 69,137 33,024
----------- ----------- ----------- -----------
Expenses:
Management fees--Note 3(a) ....................... 87,258 223,623 80,088 58,658
Interest on line of credit utilized--Note 5 ...... -- -- -- 5,417
Custodian fees ................................... 9,473 13,915 9,114 9,289
Transfer agent fees--Note 3(c) ................... 2,500 2,500 2,500 2,500
Professional fees ................................ 9,425 9,425 9,425 9,425
Trustees' fees ................................... 6,000 6,000 6,000 6,000
Miscellaneous .................................... 10,136 21,383 9,274 8,338
----------- ----------- ----------- -----------
124,792 276,846 116,401 99,627
Less, earnings credits--Note 2(e) ................. (1,825) (4,868) (1,949) (1,670)
----------- ----------- ----------- -----------
Total net expenses ............................. 122,967 271,978 114,452 97,957
----------- ----------- ----------- -----------
NET INVESTMENT (LOSS) ............................... (10,182) (142,689) (45,315) (64,933)
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain on investments ................. 1,959,971 4,416,600 2,505,853 1,069,584
Net change in unrealized appreciation (depreciation)
on investments ................................ (897,060) (1,945,398) (1,800,673) (565,660)
----------- ----------- ----------- -----------
Net realized and unrealized gain (loss)
on investments ................................. 1,062,911 2,471,202 705,180 503,924
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................................ $ 1,052,729 $ 2,328,513 $ 659,865 $ 438,991
=========== =========== =========== ===========
* Prior to April 12, 1996, the Alger Capital Appreciation Retirement Portfolio was the Alger Defined
Contribution Leveraged AllCap Portfolio.
See Notes to Financial Statements.
21
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
ALGER CAPITAL APPRECIATION RETIREMENT PORTFOLIO*
STATEMENT OF CASH FLOWS
For the year ended October 31, 1996
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH:
Cash flows from operating activities:
Dividends received .......................................... $ 14,797
Interest received ........................................... 17,457
Interest paid ............................................... (12,156)
Operating expenses paid ..................................... (94,276)
Purchase of investment securities ........................... (13,470,929)
Proceeds from disposition of investment securities .......... 15,590,134
Other ....................................................... (1,002)
------------
Net cash provided by operating activities ................. 2,044,025
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid .............................................. (1,765,311)
Proceeds from shares sold and dividends reinvested .......... 2,350,850
Payments on shares redeemed ................................. (2,440,328)
Repayment of bank borrowings ............................... (302,600)
------------
Net cash used in financing activities ..................... (2,157,389)
------------
Net decrease in cash .......................................... (113,364)
Cash--beginning of year ....................................... 178,136
------------
Cash--end of year ............................................. $ 64,772
============
Reconciliation of net increase in net assets to net cash
provided by operating activities:
Net increase in net assets resulting from operations ........ $ 438,991
Decrease in investments ..................................... 1,672,393
Decrease in receivable for investment securities sold ....... 242,243
Increase in dividends receivable ............................ (770)
Increase in payable for investment securities purchased ..... 204,569
Net realized gain on investments ............................ (1,069,584)
Net decrease in unrealized appreciation on investments ...... 565,660
Decrease in accrued expenses and other liabilities .......... (9,178)
Net increase in other assets ................................ (299)
------------
Net cash provided by operating activities ................. $ 2,044,025
============
*Prior to April 12, 1996, the Alger Capital Appreciation Retirement Portfolio
was the Alger Defined Contribution Leveraged AllCap Portfolio.
See Notes to Financial Statements.
22
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the year ended October 31, 1996
MIDCAP CAPITAL
GROWTH SMALL CAP GROWT APPRECIATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO*
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Net investment (loss) ....................................... $ (10,182) $ (142,689) $ (45,315) $ (64,933)
Net realized gain on investments ............................ 1,959,971 4,416,600 2,505,853 1,069,584
Net change in unrealized (depreciation)
on investments ............................................ (897,060) (1,945,398) (1,800,673) (565,660)
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations ........ 1,052,729 2,328,513 659,865 438,991
Dividends to Shareholders:
Net realized gains ........................................ (2,895,406) (2,507,225) (1,618,472) (1,765,311)
Net increase (decrease) from shares of beneficial
interest transactions--Note 6 ............................. 126,096 7,219,881 (229,799) (86,328)
------------ ------------ ------------ ------------
Total increase (decrease) ............................... (1,716,581) 7,041,169 (1,188,406) (1,412,648)
Net Assets:
Beginning of year ......................................... 13,041,737 23,001,566 10,914,329 8,116,019
------------ ------------ ------------ ------------
End of year ............................................... $ 11,325,156 $ 30,042,735 $ 9,725,923 $ 6,703,371
============ ============ ============ ============
Undistributed net investment income (accumulated loss) ...... $ (55,121) $ (315,635) $ (153,744) $ (338,035)
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the year ended October 31, 1995
MIDCAP CAPITAL
GROWTH SMALL CAP GROWT APPRECIATION
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 year ........................................ 9,364,615 9,512,542 6,774,008 5,250,507
------------ ------------ ------------ ------------
End of year .............................................. $ 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)
============ ============ ============ ============
* Prior to April 12, 1996, the Alger Capital Appreciation Retirement Portfolio was the Alger Defined Contribution Leveraged
AllCap Portfolio.
See Notes to Financial Statements.
23
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1--General:
The Alger Retirement Fund (the "Fund"), (which was The Alger Defined
Contribution Trust prior to April 12, 1996), 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
Capital Appreciation Portfolio (the "Portfolios"). Prior to April 12, 1996, the
Capital Appreciation Portfolio was the Leveraged AllCap Portfolio.
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.
(f) Other: These financial statements have been prepared using estimates
and assumptions that affect the reported amounts therein. Actual results may
differ from those estmates.
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
Capital Appreciation Portfolio...................................... .85
(b) Brokerage Commissions: During the year ended October 31, 1996, the
Growth Portfolio, the Small Cap Portfolio, the MidCap Growth Portfolio and the
Capital Appreciation Portfolio paid Fred Alger & Company, Incorporated ("Alger
Inc."), the Fund's distributor, commissions of $28,583, $38,665, $24,886 and
$14,904, 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, 1996, 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, 1996, Alger Management and its affiliates owned
1,214,656 shares, 561,218 shares, 671,612 shares and 678,556 shares of the
Growth Portfolio, the Small Cap Portfolio, the MidCap Growth Portfolio and the
Capital Appreciation 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, 1996:
PURCHASES SALES
--------- -----
Growth Portfolio ............................... $15,659,523 $18,406,111
Small Cap Portfolio ............................ 49,363,504 44,317,764
MidCap Growth Portfolio ........................ 15,432,612 16,946,212
Capital Appreciation Portfolio ................. 13,675,498 15,347,926
24
<PAGE>
- --------------------------------------------------------------------------------
THE ALGER RETIREMENT FUND
NOTES TO FINANCIAL STATEMENTS Continued)
NOTE 5--Short-Term Borrowings:
The Capital Appreciation 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
$20,000,000. Such borrowings have a variable interest rate and are payable on
demand. For the year ended October 31, 1996, the Portfolio had borrowings which
averaged $62,130 at a weighted average interest rate of 8.58%.
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, 1996, transactions of shares of
beneficial interest were as follows:
SHARES AMOUNT
------ ------
Growth Portfolio
Shares sold 61,014 $ 717,882
Dividends reinvested 315,748 2,895,406
--------- -----------
376,762 3,613,288
Shares redeemed (281,860) (3,487,192)
--------- -----------
Net increase 94,902 $ 126,096
========= ===========
Small Cap Portfolio
Shares sold 567,108 $10,311,184
Dividends reinvested 138,215 2,507,225
--------- -----------
705,323 12,818,409
Shares redeemed (307,294) (5,598,528)
--------- -----------
Net increase 398,029 $ 7,219,881
========= ===========
MidCap Growth Portfolio
Shares sold 50,525 $ 813,902
Dividends reinvested 111,850 1,618,472
--------- ------------
162,375 2,432,374
Shares redeemed (158,661) (2,662,173)
--------- -----------
Net increase (decrease) 3,714 $ (229,799)
========= ===========
Capital Appreciation Portfolio
Shares sold 53,444 $ 588,689
Dividends reinvested 179,584 1,765,311
--------- -----------
233,028 2,354,000
Shares redeemed (192,540) (2,440,328)
--------- -----------
Net increase (decrease) 40,488 $ (86,328)
========= ===========
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
========= ===========
Capital Appreciation 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
========= ===========
25
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
THE ALGER RETIREMENT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
To the Shareholders and Board of Trustees
of The Alger Retirement Fund:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of The Alger Retirement Fund (a
Massachusetts business trust comprising, respectively, the Alger Growth
Retirement Portfolio, Alger Small Cap Retirement Portfolio, Alger MidCap Growth
Retirement Portfolio, and Alger Capital Appreciation Retirement Portfolio) as of
October 31, 1996, 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 two
years in the period 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, 1996, 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 Retirement
Fund as of October 31, 1996, 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 the financial highlights for each of the two years
in the period 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 16, 1996
26
