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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number   811-05550

 

The Alger Portfolios

Alger Small Cap Growth Portfolio

 

(Exact name of registrant as specified in charter)

 

360 Park Avenue South New York, New York 10003

(Address of principal executive offices) (Zip code)

 

Mr. Hal Liebes

 

Fred Alger Management, LLC

 

360 Park Avenue South

 

New York, New York 10010

(Name and address of agent for service)

 

Registrant’s telephone number, including area code: 212-806-8800

 

Date of fiscal year end: December 31

 

Date of reporting period: June 30, 2021

 

Form N-CSR is to be used by management investment companies to file reports with the Commission, not later than 10 days after the transmission to Stockholders of any report to be transmitted to Stockholders under Rule
30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e1).  The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public.  A registrant is not required to respond to the collection of information contained in
Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number.  Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to
the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609.  The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

ITEM 1.

Reports to Stockholders.

Table of Contents

 

ALGER SMALL CAP GROWTH PORTFOLIO

 

Shareholders’ Letter

1

   

Fund Highlights

8

   

Portfolio Summary

10

   

Schedule of Investments

11

   

Statement of Assets and Liabilities

16

   

Statement of Operations

18

   

Statements of Changes in Net Assets

19

   

Financial Highlights

20

   

Notes to Financial Statements

21

   

Additional Information

33

Shareholders’ Letter (Unaudited)

June 30, 2021

Dear Shareholders,

 

Recent Market Performance Masks the Appeal of Industry Disrupters

 

In our opinion, unprecedented amounts of fiscal and monetary stimulus, anticipation of a grand re-opening of the economy and the widespread digitization of business models has resulted in
investors assessing two approaches to pursuing investments that can potentially benefit from a growing economy. One approach involves conducting in-depth fundamental research to find companies with strong earnings that are using innovation to create
secular growth, including in industries, such as leisure and restaurants, that generally benefit from economic expansion. The other approach relies on what we believe is a flawed shortcut of investing in businesses classified as value companies to gain
exposure to cyclical opportunities, or businesses that may have weak fundamentals but have potential to benefit in the short term from economic growth.

 

For the six-month reporting period ended June 30, 2021, investors who favored value stocks benefited, with the Russell 3000 Value Index gaining 17.67% compared to the 12.71% return of the Index’s
growth-focused counterpart. In mid-June, however, investors rotated into growth stocks and the Russell 3000 Growth Index gained 3.63% during the final two weeks of the reporting period compared to the -1.11% return of the Russell 3000 Value Index.
While the market rotation in late June was encouraging and provided additional fodder for the debate about the best investing styles for the near future, we believe it is important to focus on the potential for secular growth of innovative products to
outperform over the long term. To that end, we are continuing to seek companies with strong fundamentals that we believe are benefiting from developing innovative products and services.

 

Optimism Supports Markets

 

In the U.S., the S&P 500 Index generated a 15.25% return for the aforementioned six-month reporting period. During the reporting period, progress with inoculating individuals with COVID-19
vaccines supported optimism that economic shutdowns and other measures to contain the pandemic would be curtailed or eliminated. Simultaneously, analysts upgraded their outlook for 2021 earnings growth, while the March approval of President Biden’s
$1.9 trillion stimulus program, which included $1,400 checks for eligible individuals, was an additional tailwind. President Biden also signaled his commitment to provide additional stimulus with a proposed substantial infrastructure program.

 

Inflation and Valuations Spark Volatility

 

Optimism was occasionally dampened by fears that strong economic growth and stimulus spending could spark inflation, even though the Federal Reserve in the earlier portion of 2021 maintained that
inflationary pressures may be transitory and signaled that it is unlikely to curtail monetary stimulus prematurely. Inflation concerns eventually climbed after the May Consumer Price Index recorded a 5% year-over-year increase, its highest reading
since August of 2008. The Federal Reserve, furthermore, appeared to shift its stance on inflation during its June meeting, signaling that it may raise interest rates in 2023 rather than 2024 and discussing an eventual tapering of its bond buying
program, which created uncertainty about the potential duration of the economic recovery. This uncertainty caused the strong rotation into growth stocks during the final weeks of the reporting period as investors sought companies, such as technology
businesses, that can potentially generate secular earnings growth as the post COVID-19 economic recovery wanes.

Valuations also sparked concern among some investors, with the S&P 500 Index forward price-to-earnings ratio lingering above 21 times earnings compared to the 20-year average of 15.4 times
earnings. We believe, however, that other metrics, such as free cash flow and the equity risk premium, are encouraging. Due to what we believe are outdated accounting standards, corporations’ growing investments in intangible assets, such as software,
marketing algorithms, research and patents, are expensed rather than capitalized, causing earnings to decline relative to free cash flow, which is the amount of cash remaining after expenditures for operations and the maintenance of capital assets.
Free cash flow as a percentage of net income during the past three years has been more than 100% and has increased substantially since the 1990s when it was typically under 80%, which depicts stocks as more attractively valued compared to the
price-to-earnings metric. The equity risk premium, which measures investors’ required rate of return above the prevailing risk-free interest rate, furthermore, was only 5.3% for the S&P 500 Index as of June 30, 2021, which we believe is attractive
from a historical perspective.

 

International Markets Also Advance

 

International markets also advanced during the reporting period with the MSCI ACWI ex USA Index, the MSCI ACWI Index and the MSCI Emerging Markets Index returning 9.45%, 12.56% and 7.58%,
respectively. Optimism about a global economic recovery combined with the rollout of COVID-19 vaccines supported markets, while rising commodity prices were an additional tailwind for certain emerging market countries.

 

Choosing the Path Forward

 

We believe the post-pandemic economic recovery is benefiting not only from scaling back or eliminating social distancing requirements, but also from the strength of the U.S. consumer. The strong
performance of equities and increasing home values during the past year helped household net worth, which as of the end of the first quarter of 2021 climbed approximately 23% year over year to approximately $139 trillion, an increase of more than $25
trillion. If Americans spend 2% of that increased wealth, approximately $500 billion would surge through the economy, boosting GDP by approximately 2%. At the same time, stimulus checks are continuing to work their way through the economy.

 

As estimates for GDP growth climb and U.S. personal savings grow, it may be tempting to embrace cyclical stocks typically classified as value stocks in anticipation of strong economic expansion.
At Alger, however, we are continuing to take a long-term approach that involves seeking growth companies with strong fundamentals that are using innovation to disrupt their specific industries.

 

First, value market rallies have historically been short-lived, which illustrates the difficulty of successfully timing value trades.

 

The Trump election in the fall of 2016 resulted in the Russell 3000 Value Index rising 6% relative to the Russell 3000 Growth Index, as investors priced in lower corporate tax rates, which benefit more
domestically oriented companies like banks and retailers. Approximately half of the rally was concentrated in the two weeks after the election.

When worries about the longevity of the European Union subsided in the spring of 2012, the Russell 3000 Value Index rallied over 8% relative to the Russell 3000 Growth Index through mid-2013. More than half of
that move occurred in late 2012 and early 2013.

After the Global Financial Crisis, the Russell 3000 Value Index rose over 4% relative to the Russell 3000 Growth Index in the summer of 2009, but most of the rally took place over only one month.

 

Second, these value rallies occurred within a long structural downward period for value underperformance, with the Russell 3000 Value Index generating an annualized return of 11.64% for the
10-year period ended June 30, 2021, compared to the 17.66% annualized return of the Russell 3000 Growth Index. Additionally, we maintain that broader structural issues, including the outdated practice of not fully valuing intangible assets, has made
the common practice of using price-to-book ratios in classifying stocks as value equities obsolete.

 

Finally, growth companies are often leaders in innovation and can potentially benefit from corporations increasingly digitizing their business models, which over the years has become a competitive
necessity. Indeed, during earnings calls, businesses are emphasizing the need to digitize rather than increase their exposure to more discretionary services or products within their respective industries. We believe that the intersection of digital
innovation and certain end markets that may benefit from economic growth could be attractive for investors. These may include travel and leisure stocks, restaurant stocks, retailers or even certain commercial real estate and energy companies.

 

Portfolio Matters

Alger Small Cap Growth Portfolio

The Alger Small Cap Growth Portfolio returned 6.45% for the six-month period ended June 30, 2021, compared to the 8.98% return of its benchmark, the Russell 2000 Growth Index. During the reporting
period, the largest sector weightings were Healthcare and Information Technology. The largest sector overweight was Information Technology and the largest underweight was Industrials.

 

Contributors to Performance

The Healthcare and Energy sectors provided the largest contributions to relative performance. Regarding individual positions,
CareDx, Inc.; HubSpot, Inc.; Bio-Techne Corp.; Magnolia Oil & Gas Corp., Cl. A; and Joint Corp. were among the top contributors to absolute performance. Joint Corp. is a franchise-model chiropractic care chain, currently operating approximately
600 clinics. It plans to add approximately 400 units by 2023. The company seeks to make chiropractic care more accessible for everyone through low-cost, low-hassle visitation. It offers individual walk-ins starting at $39 and monthly packages ranging
in price from $21-$33 per visit with the most popular option being $69 a month for four visits. Clinics typically generate $500,000 in annual revenue but this is increasing quickly, and we have heard some of the best franchise units generate as much
as $1.3 million to $1.4 million in annual sales. We believe the company is positioned to accelerate unit growth due to its robust pipeline of franchise commitments and it has best-in-class comparable sales growth of more than 20%. Revenues are sticky
with 85% occurring from membership fees. The
 company is also already profitable, with owned-unit segment earnings before interest, taxes, depreciation and
amortization (EBITDA) margins of 30% and franchise EBTIDA margins of 50%. We believe that this is an undiscovered and underfollowed small cap growth name. Overall, we think the company has a strong growth profile for both topline earnings and
EBITDA. Even though Joint Corp. has been publicly traded for years, it is finally achieving sufficient scale to potentially cross $100 million in annual revenues, which would bring it more into investors’ purview. It recently crossed the critical
threshold of $1 billion in market capitalization.

Shares of Joint Corp. outperformed due to the company being added to a small cap market index. This likely drove heightened investor awareness and buying from small cap funds. The company also
continues to execute very well, and is undergoing a digital re-platforming, which could potentially drive improved retention, stronger comparables and higher revenues. Additionally, the company is benefiting from the economy reopening as its new member
acquisition and overall visitation numbers were negatively impacted by COVID-19.

 

Detractors from Performance

The Consumer Discretionary and Industrials sectors were among the sectors that detracted from results. Regarding individual positions, Quidel Corp.; Quotient Technology, Inc.; Farfetch Ltd. Cl. A;
Paycom Software, Inc.; and Q2 Holdings, Inc. were among the top detractors from performance. Quidel develops, manufactures and markets rapid point-of-care diagnostic solutions worldwide that are used for infectious disease, cardiac and toxicology
testing. Quidel’s solutions are mainly used at point-of-care locations, such as physicians’ offices, hospitals, urgent care clinics, pharmacies, wellness screening clinics and clinical laboratories when we believe quality, highly sensitive, low-cost,
easy-to-use and fast diagnosis is particularly important. Shares of the company underperformed due to general concern that COVID-19 vaccines may result in decreased demand for Quidel’s COVID-19 testing products. We believe potential exists for demand
to decrease in 2022, but COVID-19 testing is still experiencing strong utilization while vaccines are being distributed, a process that can last throughout 2021, in our view. In addition, we believe the need for testing can potentially last longer than
the market is currently assuming. Quidel has a significantly enhanced position in rapid point-of-care infectious disease testing, with a significant number of new instrument customers as a result of the pandemic. Quidel also has a robust product
pipeline outside of COVID-19, including the expected launch of its Savanna instrument by mid-2021 to offer rapid molecular testing with a panel of up to 8-12 tests at a time from a single patient sample. Additionally, COVID-19 testing has allowed
Quidel to build a sizable cash position, which it can potentially deploy on accretive mergers and acquisitions.

 

As always, we strive to deliver consistently superior investment results to you, our shareholders, and we thank you for your continued confidence in Alger.

 

Sincerely,

 

Daniel C. Chung, CFA

Chief Investment Officer

Fred Alger Management, LLC

Investors cannot invest directly in an index. Index performance does not reflect the deduction for fees, expenses, or taxes.

 

This report and the financial statements contained herein are submitted for the general information of shareholders of the Alger Small Cap Growth Portfolio. This report is not authorized for distribution to prospective
investors in the Portfolio unless preceded or accompanied by an effective prospectus for the Portfolio. The Portfolio’s returns represent the fiscal six-month period return of Class I-2 shares. Returns include reinvestment of dividends and
distributions.

 

The performance data quoted in these materials represent past performance, which is not an indication or guarantee of future results.

 

Standard performance results can be found on the following pages. The investment return and principal value of an investment in the Portfolio will fluctuate so that an investor’s shares, when redeemed,
may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. For performance data current to the most recent quarter-end, visit us at www.alger.com, or call us at (800) 992-3863.

The views and opinions of the Portfolio’s management in this report are as of the date of the Shareholders’ Letter and are subject to change at any time subsequent to this date. There is no guarantee that any of the
assumptions that formed the basis for the opinions stated herein are accurate or that they will materialize. Moreover, the information forming the basis for such assumptions is from sources believed to be reliable; however, there is no guarantee that
such information is accurate. Any securities mentioned, whether owned in the Portfolio or otherwise, are considered in the context of the construction of an overall portfolio of securities and therefore reference to them should not be construed as a
recommendation or offer to purchase or sell any such security. Inclusion of such securities in the Portfolio and transactions in such securities, if any, may be for a variety of reasons, including without limitation, in response to cash flows,
inclusion in a benchmark, and risk control. The reference to a specific security should also be understood in such context and not viewed as a statement that the security is a significant holding in the Portfolio. Please refer to the Schedule of
Investments for the Portfolio which is included in this report for a complete list of Portfolio holdings as of June 30, 2020. Securities mentioned in the Shareholders’ Letter, if not found in the Schedule of Investments, may have been held by the
Portfolio during the six-month fiscal period.

 

Risk Disclosure

Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and
may be more sensitive to market, political, and economic developments. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness such as COVID-19 or other public health issues, recessions, or other events could
have a significant impact on investments. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to
unfavorable sector developments. Investing in companies of small capitalizations involve the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. Foreign securities and Emerging
Markets involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility.

For a more detailed discussion of the risks associated with the Portfolio, please see the Portfolio’s Prospectus.

 

Before investing, carefully consider the Portfolio’s investment objective, risks, charges, and expenses. For a prospectus containing this and other information or for the Portfolio’s most recent
quarter-end performance data, call us at (800) 992-3863, visit us at www.alger.com, or consult your financial advisor. Read the prospectus and summary prospectus carefully before investing.

 

Fred Alger & Company, LLC, Distributor.

 

NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE

 

Definitions:

 

The S&P 500 Index: An index of large company stocks considered to be representative of the U.S. stock market.

 

The Russell 3000 Growth Index combines the large-cap Russell 1000 Growth, the small-cap Russell 2000 Growth and the Russell Microcap Growth Index. It includes companies that are considered more growth oriented
relative to the overall market as defined by Russell’s leading style methodology. The Russell 3000 Growth Index is constructed to provide a comprehensive, unbiased, and stable barometer of the growth opportunities within the broad market.

 

The Russell 3000 Value Index measures the performance of the broad value segment of the U.S. equity value universe. It includes those Russell 3000 companies with lower price-to-book ratios and lower forecasted
growth values. The Russell 3000 Value Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad value market.

 

The MSCI ACWI Index (gross) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI captures
large and mid cap representation across 23 developed markets (DM) and 26 emerging markets (EM) countries.

The MSCI ACWI ex USA Index (gross) captures large and mid cap representation across 22 of 23 developed markets (DM) countries (excluding the U.S.) and 26 emerging markets (EM) countries. The index covers
approximately 85% of the global equity opportunity set outside the U.S.

The Morgan Stanley Capital International (MSCI) Emerging Markets Index (gross) is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging
markets.

 

The Russell 2000 Growth Index measures the performance of the small cap growth segment of the U.S. equity universe. It includes those Russell 2000 companies with higher growth earning potential as defined by
Russell’s leading style methodology. The Russell 2000 Growth Index is constructed to provide a comprehensive and unbiased barometer for the small-cap growth segment.

ALGER SMALL CAP GROWTH PORTFOLIO

Fund Highlights Through June 30, 2021 (Unaudited)

HYPOTHETICAL $10,000 INVESTMENT IN CLASS I-2 SHARES

The chart above illustrates the change in value of a
hypothetical $10,000 investment made in Alger Small Cap Growth Portfolio Class I-2 shares and the Russell 2000 Growth Index (an unmanaged index of common stocks) for the ten years ended
June 30, 2021. Figures for each of the Alger Small Cap Growth Portfolio Class I-2 shares and the Russell 2000 Growth Index include reinvestment of dividends. Figures for the Alger
Small Cap Growth Portfolio Class I-2 shares also include reinvestment of capital gains.

ALGER SMALL CAP GROWTH PORTFOLIO

Fund Highlights Through June 30, 2021 (Unaudited) (Continued)

PERFORMANCE COMPARISON AS OF 6/30/21

AVERAGE ANNUAL TOTAL RETURNS

   

1 YEAR

   

5 YEARS

   

10 YEARS

   

Since

9/21/1988

 

Class I-2 (Inception 9/21/88)

   

%

   

%

   

15.32

%

   

11.79

%

Russell 2000 Growth Index

   

%

   

%

   

13.52

%

   

9.29

%

The performance data quoted represents past performance, which is not an indication or a guarantee of 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. Current performance may be higher or lower than the performance quoted. For performance current to the most recent quarter end, visit us at www.alger.com or call
us at (800) 992-3863.

 

Returns indicated assume reinvestment of all distributions, no transaction costs or taxes, and are net of management fees and fund operating expenses only. Total return does
not include deductions at the Portfolio or contract level for the cost of the insurance charges, premium load, administrative charges, mortality and expense risk charges or other charges that may be incurred under the variable annuity contract,
variable life insurance plan or retirement plan for which the Portfolio serves as an underlying investment vehicle. If these charges were deducted, the total return figures would be lower. Please refer to the variable insurance product or retirement
plan disclosure documents for any additional applicable expenses. Investing in the stock market involves gains and losses and may not be suitable for all investors.

PORTFOLIO SUMMARY†

June 30, 2021 (Unaudited)

 

SECTORS

 

Alger Small Cap

Growth Portfolio

 

Communication Services

   

8.3

%

Consumer Discretionary

   

13.0

 

Consumer Staples

   

2.4

 

Energy

   

1.5

 

Financials

   

1.5

 

Healthcare

   

35.6

 

Industrials

   

5.9

 

Information Technology

   

28.5

 

Materials

   

2.0

 

Real Estate

   

1.1

 

Total Equity Securities

   

99.8

 

Short-Term Investments and Net Other Assets

   

0.2

 
     

100.0

%

Based on net assets for the Portfolio.

THE ALGER PORTFOLIOS | ALGER SMALL CAP GROWTH PORTFOLIO

Schedule of Investments June 30, 2021 (Unaudited)

COMMON STOCKS—98.0%

 

SHARES

   

VALUE

 

ADVERTISING—2.9%

           

Cardlytics, Inc.*

   

23,794

   

$

3,020,172

 

Magnite, Inc.*

   

174,477

     

5,904,302

 
             

8,924,474

 

AEROSPACE & DEFENSE—1.9%

               

HEICO Corp.

   

18,080

     

2,520,713

 

Hexcel Corp.*

   

14,300

     

892,320

 

Mercury Systems, Inc.*

   

37,963

     

2,516,188

 
             

5,929,221

 

AGRICULTURAL & FARM MACHINERY—0.9%

               

Hydrofarm Holdings Group, Inc.*

   

46,623

     

2,755,886

 

ALTERNATIVE CARRIERS—1.5%

               

Bandwidth, Inc., Cl. A*

   

33,962

     

4,684,039

 

APPAREL ACCESSORIES & LUXURY GOODS—0.9%

               

Capri Holdings Ltd.*

   

45,729

     

2,615,242

 

APPLICATION SOFTWARE—22.7%

               

ACI Worldwide, Inc.*

   

162,963

     

6,052,446

 

Avalara, Inc.*

   

46,742

     

7,562,856

 

Benefitfocus, Inc.*

   

29,468

     

415,499

 

Bill.com Holdings, Inc.*

   

19,673

     

3,603,700

 

Blackbaud, Inc.*

   

32,715

     

2,504,987

 

Blackline, Inc.*

   

34,907

     

3,884,102

 

Digital Turbine, Inc.*

   

17,086

     

1,299,049

 

Everbridge, Inc.*

   

38,298

     

5,211,592

 

Guidewire Software, Inc.*

   

24,101

     

2,716,665

 

HubSpot, Inc.*

   

11,523

     

6,714,682

 

Manhattan Associates, Inc.*

   

31,183

     

4,516,546

 

Medallia, Inc.*

   

39,381

     

1,329,109

 

Paycom Software, Inc.*

   

13,265

     

4,821,429

 

Q2 Holdings, Inc.*

   

59,834

     

6,137,772

 

SEMrush Holdings, Inc., Cl. A*

   

43,954

     

1,011,821

 

Smartsheet, Inc., Cl. A*

   

35,160

     

2,542,771

 

Sprout Social, Inc., Cl. A*

   

33,553

     

3,000,309

 

SPS Commerce, Inc.*

   

36,971

     

3,691,554

 

Vertex, Inc., Cl. A*

   

93,883

     

2,059,793

 

Viant Technology, Inc., Cl. A*

   

25,753

     

766,924

 
             

69,843,606

 

ASSET MANAGEMENT & CUSTODY BANKS—1.2%

               

Affiliated Managers Group, Inc.

   

23,141

     

3,568,574

 

BIOTECHNOLOGY—4.4%

               

Alpha Teknova, Inc.*

   

14,567

     

345,675

 

CareDx, Inc.*

   

112,815

     

10,324,829

 

Forte Biosciences, Inc.*

   

41,877

     

1,407,905

 

Karuna Therapeutics, Inc.*

   

7,074

     

806,365

 

Turning Point Therapeutics, Inc.*

   

10,250

     

799,705

 
             

13,684,479

 

CASINOS & GAMING—2.6%

               

DraftKings, Inc., Cl. A*

   

65,316

     

3,407,536

 

LGER PORTFOLIOS | ALGER SMALL CAP GROWTH PORTFOLIO

Schedule of Investments June 30, 2021 (Unaudited) (Continued)

COMMON STOCKS—98.0%  

SHARES

    VALUE  
CASINOS & GAMING—2.6% (CONT.)      

Penn National Gaming, Inc.*

   

59,501

   

$

4,551,231

 
             

7,958,767

 

DIVERSIFIED SUPPORT SERVICES—0.4%

               

IAA, Inc.*

   

23,075

     

1,258,511

 

ELECTRICAL COMPONENTS & EQUIPMENT—0.9%

               

Sunrun, Inc.*

   

52,289

     

2,916,680

 

ELECTRONIC EQUIPMENT & INSTRUMENTS—1.5%

               

Cognex Corp.

   

56,448

     

4,744,454

 

FOOD DISTRIBUTORS—1.5%

               

The Chefs’ Warehouse, Inc.*

   

43,295

     

1,378,080

 

US Foods Holding Corp.*

   

87,760

     

3,366,473

 
             

4,744,553

 

HEALTHCARE DISTRIBUTORS—0.4%

               

PetIQ, Inc., Cl. A*

   

28,072

     

1,083,579

 

HEALTHCARE EQUIPMENT—6.9%

               

CryoPort, Inc.*

   

66,535

     

4,198,358

 

Inmode Ltd.*

   

34,202

     

3,238,245

 

Inogen, Inc.*

   

51,275

     

3,341,592

 

Insulet Corp.*

   

15,603

     

4,283,180

 

Mesa Laboratories, Inc.

   

10,970

     

2,974,735

 

Tandem Diabetes Care, Inc.*

   

32,308

     

3,146,799

 
             

21,182,909

 

HEALTHCARE FACILITIES—1.7%

               

The Joint Corp.*

   

60,426

     

5,070,950

 

HEALTHCARE SERVICES—1.9%

               

1Life Healthcare, Inc.*

   

10,985

     

363,164

 

Biodesix, Inc.*

   

35,760

     

472,390

 

Guardant Health, Inc.*

   

31,542

     

3,917,201

 

Privia Health Group, Inc.*

   

21,603

     

958,525

 
             

5,711,280

 

HEALTHCARE SUPPLIES—4.0%

               

Neogen Corp.*

   

207,807

     

9,567,435

 

Quidel Corp.*

   

21,577

     

2,764,445

 
             

12,331,880

 

HEALTHCARE TECHNOLOGY—4.6%

               

Convey Holding Parent, Inc.*

   

62,048

     

706,106

 

Doximity, Inc., Cl. A*

   

8,354

     

486,203

 

Veeva Systems, Inc., Cl. A*

   

22,321

     

6,940,715

 

Vocera Communications, Inc.*

   

148,057

     

5,900,071

 
             

14,033,095

 

HOMEFURNISHING RETAIL—0.7%

               

Bed Bath & Beyond, Inc.*

   

64,472

     

2,146,273

 

HUMAN RESOURCE & EMPLOYMENT SERVICES—1.8%

               

Legalzoom.com, Inc.*

   

65,630

     

2,484,096

 

Upwork, Inc.*

   

49,777

     

2,901,501

 
             

5,385,597

 

HYPERMARKETS & SUPER CENTERS—0.9%

               

BJ’s Wholesale Club Holdings, Inc.*

   

56,895

     

2,707,064

 

LGER PORTFOLIOS | ALGER SMALL CAP GROWTH PORTFOLIO

Schedule of Investments June 30, 2021 (Unaudited) (Continued)

COMMON STOCKS—98.0% (CONT.)

 

SHARES

   

VALUE

 

INTERACTIVE HOME ENTERTAINMENT—0.3%

           

Take-Two Interactive Software, Inc.*

   

5,589

   

$

989,365

 

INTERACTIVE MEDIA & SERVICES—2.8%

               

Bumble, Inc., Cl. A*

   

9,914

     

571,046

 

Eventbrite, Inc., Cl. A*

   

75,680

     

1,437,920

 

Genius Sports Ltd.*

   

232,565

     

4,365,245

 

TripAdvisor, Inc.*

   

57,136

     

2,302,581

 
             

8,676,792

 

INTERNET & DIRECT MARKETING RETAIL—3.6%

               

Farfetch Ltd., Cl. A*

   

61,236

     

3,083,845

 

Fiverr International Ltd.*

   

18,135

     

4,397,556

 

Quotient Technology, Inc.*

   

172,820

     

1,868,184

 

The RealReal, Inc.*

   

89,640

     

1,771,287

 
             

11,120,872

 

INTERNET SERVICES & INFRASTRUCTURE—1.3%

               

BigCommerce Holdings, Inc.*

   

63,855

     

4,145,467

 

LEISURE FACILITIES—0.6%

               

Planet Fitness, Inc., Cl. A*

   

22,820

     

1,717,205

 

LIFE SCIENCES TOOLS & SERVICES—10.1%

               

10X Genomics, Inc., Cl. A*

   

12,272

     

2,403,103

 

Akoya Biosciences, Inc.*

   

63,075

     

1,219,870

 

Bio-Techne Corp.

   

17,049

     

7,676,483

 

Codex DNA, Inc.*

   

36,465

     

802,230

 

Maravai LifeSciences Holdings, Inc., Cl. A*

   

21,311

     

889,308

 

NanoString Technologies, Inc.*

   

101,823

     

6,597,112

 

NeoGenomics, Inc.*

   

78,057

     

3,525,835

 

Personalis, Inc.*

   

33,842

     

856,203

 

PRA Health Sciences, Inc.*

   

21,687

     

3,582,909

 

Repligen Corp.*

   

18,036

     

3,600,346

 
             

31,153,399

 

MANAGED HEALTHCARE—1.3%

               

HealthEquity, Inc.*

   

50,743

     

4,083,797

 

MOVIES & ENTERTAINMENT—0.8%

               

Live Nation Entertainment, Inc.*

   

27,869

     

2,441,046

 

OIL & GAS EXPLORATION & PRODUCTION—1.5%

               

Magnolia Oil & Gas Corp., Cl. A*

   

298,716

     

4,668,931

 

PERSONAL PRODUCTS—0.0%

               

The Honest Co., Inc.*

   

2,872

     

46,498

 

PHARMACEUTICALS—0.2%

               

Aerie Pharmaceuticals, Inc.*

   

39,613

     

634,204

 

PRECIOUS METALS & MINERALS—0.0%

               

Xometry, Inc., Cl. A*

   

1,457

     

127,327

 

REGIONAL BANKS—0.3%

               

Webster Financial Corp.

   

20,010

     

1,067,333

 

RESTAURANTS—4.0%

               

Shake Shack, Inc., Cl. A*

   

49,606

     

5,308,834

 

The Cheesecake Factory, Inc.*

   

51,916

     

2,812,809

 

Wingstop, Inc.

   

26,463

     

4,171,363

 
             

12,293,006

 

THE ALGER PORTFOLIOS | ALGER SMALL CAP GROWTH PORTFOLIO 

Schedule of Investments June 30, 2021 (Unaudited) (Continued)

COMMON STOCKS—98.0%   SHARES     VALUE  

SEMICONDUCTOR EQUIPMENT—0.7%

SolarEdge Technologies, Inc.*

   

7,328

   

$

2,025,239

 

SEMICONDUCTORS—0.9%

Universal Display Corp.

   

12,653

     

2,813,141

 

SPECIALTY CHEMICALS—2.0%

Balchem Corp.

   

47,904

     

6,287,879

 

SPECIALTY STORES—0.6%

Five Below, Inc.*

   

9,426

     

1,821,763

 

SYSTEMS SOFTWARE—0.8%

Proofpoint, Inc.*

   

13,572

     

2,358,271

 

TOTAL COMMON STOCKS

(Cost $159,405,591)

           

301,752,648

 

PREFERRED STOCKS—0.0%

 

SHARES

   

VALUE

 

BIOTECHNOLOGY—0.0%

Prosetta Biosciences, Inc., Series D*,@,(a),(b)

   

75,383

     

11,307

 

(Cost $339,224)

           

11,307

 

RIGHTS—0.1%

 

SHARES

   

VALUE

 

BIOTECHNOLOGY—0.1%

Tolero CDR*,@,(b),(c)

   

287,830

     

239,878

 

(Cost $155,594)

           

239,878

 

REAL ESTATE INVESTMENT TRUST—1.1%

 

SHARES

   

VALUE

 

RETAIL—1.1%

Tanger Factory Outlet Centers, Inc.

   

184,837

     

3,484,177

 

(Cost $3,059,763)

           

3,484,177

 

SPECIAL PURPOSE VEHICLE—0.6%

 

SHARES

   

VALUE

 

DATA PROCESSING & OUTSOURCED SERVICES—0.6%

Crosslink Ventures Capital LLC, Cl. A*,@,(a),(b)

   

56

     

1,400,000

 

Crosslink Ventures Capital LLC, Cl. B*,@,(a),(b)

   

12

     

300,000

 
             

1,700,000

 

TOTAL SPECIAL PURPOSE VEHICLE

(Cost $1,700,000)

           

1,700,000

 

Total Investments

(Cost $164,660,172)

   

99.8

%

 

$

307,188,010

 

Affiliated Securities (Cost $2,039,224)

           

1,711,307

 

Unaffiliated Securities (Cost $162,620,948)

           

305,476,703

 

Other Assets in Excess of Liabilities

   

0.2

%

   

499,831

 

NET ASSETS

   

100.0

%

 

$

307,687,841

 

 

(a)

Deemed an affiliate of the Portfolio in accordance with Section 2(a)(3) of the Investment Company Act of 1940. See Note 11 – Affiliated Securities.

(b)

Security is valued in good faith at fair value determined using significant unobservable inputs pursuant to procedures established by the Board.

(c)

Contingent Deferred Rights.

*

 Non-income
producing security.

@

Restricted security – Investment in security not registered under the Securities Act of 1933. Sales or transfers of the investment may be restricted only to qualified buyers.

THE ALGER PORTFOLIOS | ALGER SMALL CAP GROWTH PORTFOLIO 

Schedule of Investments June 30, 2021 (Unaudited) (Continued)

Security

Acquisition

Date(s)

Acquisition

Cost

% of net assets

(Acquisition Date)

Market

Value

% of net assets

as of

6/30/2020

 

Crosslink Ventures Capital LLC, Cl. A

10/2/20

 

$

1,400,000

     

0.49

%

 

$

1,400,000

     

0.46

%

Crosslink Ventures Capital LLC, Cl. B

12/16/20

   

300,000

     

0.10

%

   

300,000

     

0.10

%

Prosetta Biosciences, Inc., Series D

2/6/15

   

339,224

     

0.10

%

   

11,307

     

0.00

%

Tolero CDR

2/6/17

   

155,594

     

0.08

%

         

0.07

%

Total

                         

0.63

%

See Notes to Financial Statements.

ALGER SMALL CAP GROWTH PORTFOLIO

Statement of Assets and Liabilities June 30, 2021 (Unaudited)

   

Alger Small Cap

Growth Portfolio

 

ASSETS:

     

Investments in unaffiliated securities, at value (Identified cost below)* see accompanying schedule of investments

 

$

305,476,703

 

Investments in affiliated securities, at value (Identified cost below)** see accompanying schedule of investments

   

1,711,307

 

Cash and cash equivalents

   

3,406,897

 

Receivable for shares of beneficial interest sold

   

30,609

 

Dividends and interest receivable

   

1,627

 

Security litigation receivable

   

109

 

Prepaid expenses

   

17,988

 

Total Assets

   

310,645,240

 

LIABILITIES:

       

Payable for investment securities purchased

   

2,530,538

 

Payable for shares of beneficial interest redeemed

   

109,113

 

Accrued investment advisory fees

   

218,797

 

Accrued shareholder administrative fees

   

2,701

 

Accrued administrative fees

   

7,428

 

Accrued custodian fees

   

3,148

 

Accrued transfer agent fees

   

4,487

 

Accrued printing fees

   

35,723

 

Accrued professional fees

   

24,844

 

Accrued fund accounting fees

   

15,630

 

Accrued other expenses

   

4,990

 

Total Liabilities

   

2,957,399

 

NET ASSETS

 

$

307,687,841

 

NET ASSETS CONSIST OF:

       

Paid in capital (par value of $.001 per share)

   

62,397,824

 

Distributable earnings

   

245,290,017

 

NET ASSETS

 

$

307,687,841

 

* Identified cost

 

$

162,620,948

** Identified cost

 

$

2,039,224

See Notes to Financial Statements.

 

(a) At June 30, 2021, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $165,091,828, amounted to $142,096,182, which consisted of aggregate gross unrealized appreciation of
$147,263,165 and aggregate gross unrealized depreciation of $5,166,983.

ALGER SMALL CAP GROWTH PORTFOLIO

Statement of Assets and Liabilities June 30, 2021 (Unaudited) (Continued)

   

Alger Small Cap

Growth Portfolio

 

NET ASSETS BY CLASS:

     

Class I-2

 

$

 
   

SHARES OF BENEFICIAL INTEREST OUTSTANDING — NOTE 6:

 

Class I-2

     
         

NET ASSET VALUE PER SHARE:

       

Class I-2

 

$

 

See Notes to Financial Statements.

ALGER SMALL CAP GROWTH PORTFOLIO

Statement of Operations for the six months ended June 30, 2021 (Unaudited)

   

Alger Small Cap

Growth Portfolio

 

INCOME:

     

Dividends

 

$

140,026

 

Interest

   

211

 

Total Income

   

140,237

 
       

EXPENSES:

       

Investment advisory fees — Note 3(a)

   

1,284,522

 

Shareholder administrative fees — Note 3(f)

   

15,858

 

Administration fees — Note 3(b)

   

43,610

 

Custodian fees

   

8,150

 

Interest expenses

   

853

 

Transfer agent fees — Note 3(f)

   

9,225

 

Printing fees

   

36,207

 

Professional fees

   

30,702

 

Registration fees

   

10,234

 

Trustee fees — Note 3(g)

   

3,997

 

Fund accounting fees

   

46,937

 

Other expenses

   

12,889

 

Total Expenses

   

1,503,184

 

NET INVESTMENT LOSS

   

(1,362,947

)

         
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:        

Net realized gain on unaffiliated investments

   

62,099,539

 

Net change in unrealized depreciation on unaffiliated investments

   

(39,765,993

)

Net realized and unrealized gain on investments

   

22,333,546

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

 

$

20,970,599

 

See Notes to Financial Statements.

ALGER SMALL CAP GROWTH PORTFOLIO

Statements of Changes in Net Assets (Unaudited)

 

Alger Small Cap Growth Portfolio

 
   

For the

Year Ended

December 31, 2020

   

For the

Year Ended

December 31, 2019

 

Net investment loss

 

)

 

)

Net realized gain on investments

           

Net change in unrealized appreciation (depreciation) on investments

    )      

Net increase in net assets resulting from operations

           
                 

Dividends and distributions to shareholders:

               
         

Total dividends and distributions to shareholders

   

     
                 

Increase (decrease) from shares of beneficial interest transactions – Note 6:

 
       

Total increase (decrease)

         
                 

Net Assets:

               

Beginning of period

           

END OF PERIOD

       

See Notes to Financial Statements.

THE ALGER PORTFOLIOS

Financial Highlights for a share outstanding throughout the period (Unaudited)

Alger Small Cap Growth Portfolio

 

Class I-2

 
   

Six months ended 6/30/2021(i)

   

Year ended 12/31/2020

   

Year ended 12/31/2019

   

Year ended 12/31/2018

   

Year ended 12/31/2017

   

Year ended 12/31/2016

 

Net asset value, beginning of period

 

$

44.78

   

$

28.69

   

$

23.43

   

$

24.15

   

$

18.76

   

$

20.47

 

INCOME FROM INVESTMENT OPERATIONS:

                                               

Net investment loss(ii)

   

(0.20

)

   

(0.22

)

   

(0.23

)

   

(0.18

)

   

(0.15

)

   

(0.05

)

Net realized and unrealized gain on investments

   

3.10

     

19.39

     

7.10

     

0.53

     

5.54

     

1.34

 

Total from investment operations

   

2.90

     

19.17

     

6.87

     

0.35

     

5.39

     

1.29

 

Dividends from net investment income

   

     

(0.40

)

   

     

     

     

 

Distributions from net realized gains

   

     

(2.68

)

   

(1.61

)

   

(1.07

)

   

     

(3.00

)

Net asset value, end of period

 

$

47.68

   

$

44.78

   

$

28.69

   

$

23.43

   

$

24.15

   

$

18.76

 

Total return

   

6.45

%

   

67.15

%

   

29.34

%

   

1.44

%

   

28.73

%

   

6.24

%

RATIOS/SUPPLEMENTAL DATA:                                                

Net assets, end of period (000’s omitted)

  $ 307,688     $ 331,123     $ 211,653     $ 187,862     $ 198,997     $ 181,731  

Ratio of net expenses to average net assets

    0.95 %     0.96 %     0.98 %     1.01 %     1.00 %     1.01 %

Ratio of net investment loss to average net assets

    (0.86 )%     (0.62 )%     (0.81 )%     (0.68 )%     (0.67 )%     (0.27 )%

Portfolio turnover rate

    24.99 %     26.46 %     18.13 %     25.58 %     17.76 %     61.19 %

See Notes to Financial Statements.

(i)     Ratios have been annualized; total return and portfolio turnover rate have not been annualized.

(ii)    Amount was computed based on average shares outstanding during the period.

THE ALGER PORTFOLIOS | ALGER SMALL CAP GROWTH PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited)

 

NOTE 1 — General:          

 

The Alger Portfolios (the “Fund”) is an open-end registered investment company organized as a business trust under the laws of the Commonwealth of Massachusetts. The Fund
qualifies as an investment company as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 946-Financial Services – Investment Companies. The Fund operates as a series company currently offering seven series
of shares of beneficial interest: Alger Capital Appreciation Portfolio, Alger Large Cap Growth Portfolio, Alger Growth & Income Portfolio, Alger Mid Cap Growth Portfolio, Alger Weatherbie Specialized Growth Portfolio, Alger Small Cap Growth
Portfolio and Alger Balanced Portfolio (collectively, the “Portfolios”). These financial statements include only the Alger Small Cap Growth Portfolio (the “Portfolio”). The Portfolio invests primarily in equity securities and has an investment
objective of long-term capital appreciation. Shares of the Portfolio are available to investment vehicles for variable annuity contracts and variable life insurance policies offered by separate accounts of life insurance companies, as well as
qualified pension and retirement plans.

 

NOTE 2 — Significant Accounting Policies:          

 

(a)       Investment
Valuation:
The Portfolio values its financial instruments at fair value using independent dealers or pricing services under policies approved by the Fund’s Board of Trustees (the “Board”). Investments held by the Portfolio are
valued on each day the New York Stock Exchange (the “NYSE”) is open, as of the close of the NYSE (normally 4:00
p.m. Eastern Time).

 

Investments in money market funds and short-term securities held by the Portfolio having a remaining maturity of sixty days or less are valued at
amortized cost which approximates market value.

 

Equity securities, including traded rights, warrants and option contracts for which valuation information is readily available, are valued at the
last quoted sales price or official closing price on the primary market or exchange on which they are traded as reported by an independent pricing service. In the absence of quoted sales, such securities are valued at the bid price or, in the
absence of a recent bid price, the equivalent as obtained from one or more of the major market makers for the securities to be valued.

 

Debt securities generally trade in the over-the-counter
market. Debt securities with remaining maturities of more than sixty days at the time of acquisition are valued on the basis of the last available bid prices or current market quotations provided by dealers or pricing services. In determining
the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments, various relationships
observed in the market between investments and calculated yield measures based on valuation technology commonly employed in the market for such investments. Asset-backed and mortgage-backed securities are valued by independent pricing services
using models that consider estimated cash flows of each tranche of the security, establish a benchmark yield and develop an estimated tranche-specific spread to the benchmark yield
 based on the unique attributes of the tranche. Debt securities with a remaining maturity of sixty days or less are valued at amortized cost which approximates market value.

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

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 and
described further herein.

 

Securities in which the Portfolio invests may be traded in foreign markets that close before the close of the NYSE. Developments that occur between the close of the
foreign markets and the close of the NYSE may result in adjustments to the closing foreign prices to reflect what the Portfolio’s investment adviser, pursuant to policies established by the Board, believes to be the fair value of these securities
as of the close of the NYSE. The Portfolio may also fair value securities in other situations, for example, when a particular foreign market is closed but the Portfolio is open.

 

FASB Accounting Standards Codification 820 – Fair Value Measurements and Disclosures (“ASC 820”) defines fair value as the price that the Portfolio would receive upon
selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. ASC 820 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of
unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability and may be observable or
unobservable. Observable inputs are based on market data obtained from sources independent of the Portfolio. Unobservable inputs are inputs that reflect the Portfolio’s own assumptions based on the best information available in the circumstances.
The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

 

Level 1 – quoted prices in active markets for identical investments

 

Level 2 – significant other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

 

Level 3 – significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

 

The Portfolio’s valuation techniques are generally consistent with either the
market or the income approach to fair value. The market approach considers prices and other relevant information generated by market transactions involving identical or comparable assets to measure fair value. The income approach converts future
amounts to a current, or discounted, single amount. These fair value measurements are determined on the basis of the value indicated by current market expectations about such future events. Inputs for Level 1 include exchange-listed prices and
broker quotes in an active market. Inputs for Level 2 include the last trade price in the case of a halted security, an exchange-listed price which has been adjusted for fair value factors, and prices of closely related securities. Additional
Level 2 inputs include an evaluated price which is based upon a compilation of observable market information such as spreads for fixed income and preferred securities. Inputs for Level 3 include, but are not limited to, revenue multiples,
earnings before interest, taxes,
 depreciation and amortization (“EBITDA”) multiples, discount rates, time to exit and the
probabilities of success of certain outcomes. Such unobservable market information may be obtained from a company’s financial statements and from industry studies, market data, and market indicators such as benchmarks and indexes. Because of
the inherent uncertainty and often limited markets for restricted securities, the valuations assigned to such securities by the Portfolio may significantly differ from the valuations that would have been assigned by the Portfolio had there been
an active market for such securities.

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

Valuation processes are determined by a Valuation Committee (“Committee”) authorized by the Board and comprised of representatives of the Portfolio’s investment adviser
and officers of the Fund. The Committee reports its fair valuation determinations and related valuation information to the Board. The Board is responsible for approving the valuation policy and procedures.

 

While the Committee meets on an as-needed basis, the Committee generally meets quarterly to review and evaluate the effectiveness of the procedures for making fair value
determinations. The Committee considers, among other things, the results of quarterly back testing of the fair value model for foreign securities, pricing comparisons between primary and secondary price sources, the outcome of price challenges
put to the Portfolio’s pricing vendor, and variances between transactional prices and the previous day’s price.

 

(b)        Cash and
Cash Equivalents:
Cash and cash equivalents include U.S. dollars, foreign cash and overnight time deposits.

 

(c)        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.

 

Premiums and discounts on debt securities purchased are amortized or accreted over the lives of the respective securities.

 

(d)        Foreign Currency
Transactions: The books and records of the Portfolio are maintained in
U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at
the prevailing rates of exchange on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the prevailing exchange rates on the respective dates of such transactions.

 

Net realized gains and losses on foreign currency transactions represent net gains and losses from the disposition of foreign currencies, currency gains and losses
realized between the trade dates and settlement dates of security transactions, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. The effects of changes in foreign currency
exchange rates on investments in securities are included in realized and unrealized gain or loss on investments in the accompanying Statement of Operations.

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

 

(e)        Lending
of Fund Securities:
The Portfolio may lend its securities to financial institutions, provided that the market value of the securities loaned will not at any time exceed one third of the Portfolio’s total assets including
borrowings, as defined in its prospectus. The Portfolio earns fees on the securities loaned, which are included in interest income in the accompanying Statement of Operations. In order to protect against the risk of failure by the borrower
to return the securities loaned or any delay in the delivery of such securities, the loan is collateralized by cash or securities that are maintained with Brown Brothers Harriman & Company, the Portfolio’s Custodian (“Custodian”), in an
amount equal to at least 102% of the current market value of U.S. loaned securities or 105% for non-U.S. loaned securities. The market value of the loaned securities is determined at the close of business of the Portfolio. Any required
additional collateral is delivered to the Custodian each day and any excess collateral is returned to the borrower on the next business day. In the event the borrower fails to return the loaned securities when due, the Portfolio may take
the collateral to replace the securities. If the value of the collateral is less than the purchase cost of replacement securities, the Custodian shall be responsible for any shortfall, but only to the extent that the shortfall is not due to
any diminution in collateral value, as defined in the securities lending agreement. The Portfolio is required to maintain the collateral in a segregated account and determine its value each day until the loaned securities are returned. Cash
collateral may be invested as determined by the Portfolio. Collateral is returned to the borrower upon settlement of the loan. There were no securities loaned as of June 30, 2021.

 

(f)         Dividends

to Shareholders: Dividends and distributions payable to shareholders are recorded by the Portfolio on the ex-dividend date.

 

Dividends from net investment income, if available, are declared and paid annually. Dividends from net realized gains, offset by any loss carryforward, are declared
and paid annually after the end of the fiscal year in which earned.

 

The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with federal income tax rules. Therefore, the source
of the Portfolio’s distributions may be shown in the accompanying financial statements as either from, or in excess of, net investment income, net realized gain on investment transactions, or return of capital, depending on the type of book/tax
differences that may exist. Capital accounts within the financial statements are adjusted for permanent book/tax differences. Reclassifications result primarily from the differences in tax treatment of net operating losses, passive foreign
investment companies, and foreign currency transactions. The reclassifications are done annually at year-end and have no impact on the net asset value of the Portfolio and are designed to present the Portfolio’s capital accounts on a tax basis.

 

(g)        Federal
Income Taxes:
It is the Portfolio’s policy to comply with the requirements of the Internal Revenue Code Subchapter M applicable to regulated investment companies and to distribute all of its taxable income to its shareholders.
Provided that the Portfolio maintains such compliance, no federal income tax provision is required.

 

FASB Accounting Standards Codification 740 – Income Taxes (“ASC 740”) requires
the Portfolio to measure and recognize in its financial statements the benefit of a tax position taken (or expected to be taken) on an income tax return if such position will more likely than not be sustained upon examination based on the
technical merits of the position. No tax years are currently under investigation. The Portfolio files income tax returns in the
 U.S.
Federal jurisdiction, as well as the New York State and New York City jurisdictions. The statute of limitations on the Portfolio’s tax returns remains open for the tax years 2017-2020. Management does not believe there are any uncertain tax
positions that require recognition of a tax liability.

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(h)        Allocation
Methods:
The Fund accounts separately for the assets, liabilities and operations of the Portfolio. Expenses directly attributable to the Portfolio are charged to the Portfolio’s operations; expenses which are applicable to all
Portfolios are allocated among them based on net assets.

(i)        Estimates: These
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require using estimates and assumptions that affect the reported amounts therein. These unaudited interim
financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of results for the interim period. Actual results may differ from those estimates. All such estimates are of a normal
recurring nature.

 

NOTE 3 — Investment Advisory Fees and Other Transactions with
Affiliates:
          

 

(a)       Investment
Advisory Fees:
Fees incurred by the Portfolio, pursuant to the provisions of the Fund’s Investment Advisory Agreement with Fred Alger Management, LLC (“Alger Management” or the “Investment Manager”), are payable monthly and computed
based on the following rates. The actual rate paid as a percentage of average daily net assets, for the six months ended June 30, 2021, is set forth below under the heading “Actual Rate”:

 

   

Tier 1

   

Tier 2

   

Actual Rate

 

Alger Small Cap Growth Portfolio(a)

   

0.81

%

   

0.75

%

   

0.81

%

 

(a)          Tier 1 rate is paid on assets up to $1 billion and Tier 2 rate is paid on assets in excess of $1 billion.

 

(b)       Administration
Fees:
Fees incurred by the Portfolio, pursuant to the provisions of the Fund’s Fund Administration Agreement with Alger Management, are payable monthly and computed based on the average daily net assets of the Portfolio at the annual
rate of 0.0275%.

(c)         Brokerage
Commissions:
During the six months ended June 30, 2021, the Portfolio paid Fred Alger & Company, LLC, the Fund’s distributor and affiliate of Alger Management (the “Distributor”), $8,227 in connection with securities transactions.

 

(d)        Interfund
Loans:
The Portfolio, along with other funds in the Alger Fund Complex (as defined below), may borrow money from and lend money to each other for temporary or emergency purposes. To the extent permitted under its investment
restrictions, the Portfolio may lend uninvested cash in an amount up to 15% of its net assets to other funds in the Alger Fund Complex. If the Portfolio has borrowed from other funds in the Alger Fund Complex and has aggregate borrowings from all
sources that exceed 10% of the Portfolio’s total assets, the Portfolio will secure all of its loans from other funds in the Alger Fund Complex. The interest rate charged on interfund loans is equal to the average of the overnight time deposit
rate and bank loan rate available to the Portfolio. There were no interfund
loans outstanding as of June 30, 2021.

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

 

During the six months ended June 30, 2021, the Portfolio incurred interfund loan interest expenses of $843, which is included in interest expenses in the accompanying
Statement of Operations.

 

(e)        Other
Transactions with Affiliates:
Certain officers and one Trustee of the Fund are directors and/or officers of Alger Management, the Distributor, or their affiliates. No shares of the Portfolio were held by Alger Management and its
affiliated entities as of June 30, 2021.

 

(f)        Shareholder
Administrative Fees:
The Fund has entered into a Shareholder Administrative Services Agreement with Alger Management to compensate Alger Management for providing administrative oversight of, the Portfolio’s transfer agent, and for other
related services. The Portfolio compensates Alger Management at the annual rate of 0.01% of the average daily net assets for these services.

(g)        Trustee Fees:
Each trustee who is not an “interested person” of the Fund, as defined in the Investment Company Act of 1940, as amended (“Independent Trustee”) receives a fee of $142,000 per annum, paid pro rata based on net assets by each fund in the
Alger Fund Complex, plus travel expenses incurred for attending board meetings. The term “Alger Fund Complex” refers to the Fund, The Alger Institutional Funds, The Alger Funds II, The Alger Funds, Alger Global Focus Fund and The Alger ETF Trust,
each of which is a registered investment company managed by Alger Management. The Independent Trustee appointed as Chairman of the Board receives additional compensation of $20,000 per annum paid pro rata based on net assets by each fund in the
Alger Fund Complex. Additionally, each member of the Audit Committee receives a fee of $13,000 per annum, paid pro rata based on net assets by each fund in the Alger Fund Complex.

 

(h)        Interfund
Trades:
The Portfolio may engage in purchase and sale transactions with other funds advised by Alger Management or Weatherbie Capital, LLC, an affiliated investment adviser of Alger Management. There were no interfund trades during the
six months ended June 30, 2021.

 

NOTE 4 — Securities Transactions:

 

Purchases and sales of securities, other than U.S. Government securities and short-term securities, for the six months ended June 30, 2021, were as follows:

 

   

PURCHASES

   

SALES

 

Alger Small Cap Growth Portfolio

 

$

78,598,014

   

$

111,492,092

 

 

NOTE 5 — Borrowings:

 

The Portfolio may borrow from the Custodian on an uncommitted basis. The Portfolio
pays the Custodian a market rate of interest, generally based upon a rate of return with respect to each respective currency borrowed taking into consideration relevant overnight and short-term reference rates, the range of distribution between and
among the interest rates paid on deposits to other institutions, less applicable commissions, if any. The Portfolio may also borrow from other funds in the Alger Fund Complex, as discussed in Note 3(d). For t
he six months ended June 30, 2021, the Portfolio had the following borrowings from the Custodian and other funds in the Alger Fund Complex:

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

   

AVERAGE DAILY

BORROWING

   

WEIGHTED AVERAGE

INTEREST RATE

 

Alger Small Cap Growth Portfolio

 

$

162,286

     

1.06

%

The highest amount borrowed from the Custodian and other funds during the six months ended June 30, 2021 by the Portfolio was as follows:

   

HIGHEST BORROWING

 
       

Alger Small Cap Growth Portfolio

 

$

7,888,000

 

 

NOTE 6 — Share Capital:

 

The Portfolio has an unlimited number of authorized shares of beneficial interest of $.001 par value. During the period ended June 30, 2021 and the year ended December 31, 2020, transactions
of shares of beneficial interest were as follows:

   

FOR THE SIX MONTHS ENDED

JUNE 30, 2021

   

FOR THE YEAR ENDED

DECEMBER 31, 2020

 
   

SHARES

   

AMOUNT

   

SHARES

   

AMOUNT

 

Alger Small Cap Growth Portfolio

 

Class I-2:

                       

Shares sold

   

289,722

   

$

13,557,996

   

908,066

   

$

33,465,247

 

Dividends reinvested

   

     

     

492,735

     

21,409,350

 

Shares redeemed

   

(1,230,839

)

   

(57,963,273

)

   

(1,384,018

)

   

(48,369,610

)

Net increase (decrease)

   

(941,117

)

  $

(44,405,277

)

 

16,783

   

$

6,504,987

 

 

NOTE 7 — Income Tax Information:

 

At December 31, 2020, the Portfolio, for federal income tax purposes, had no capital loss carryforwards and no capital loss carryforwards were utilized in 2020.

 

Net capital losses incurred after October 31 and within the taxable year are deemed to arise on the first business day of the Portfolio’s next taxable year.

 

The difference between book-basis and tax-basis unrealized appreciation (depreciation) is determined annually and is attributable primarily to the tax deferral of losses on wash sales, U.S.
Internal Revenue Code Section 988 currency transactions, the tax treatment of partnership investments, the realization of unrealized appreciation of passive foreign investment companies, and return of capital from real estate investment trust
investments.

 

NOTE 8 — Fair Value Measurements:

 

The major categories of securities and their respective fair value inputs are detailed in the Portfolio’s Schedule of Investments. Based upon the nature, characteristics, and risks associated
with its investments as of June 30, 2021, the Portfolio has determined that presenting them by security type and sector is appropriate.

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

Alger Small Cap Growth Portfolio

 

TOTAL

   

LEVEL 1

    LEVEL 2    

LEVEL 3

 

COMMON STOCKS

                       

Communication Services

 

$

25,715,716

   

$

25,715,716

   

$

   

$

 

Consumer Discretionary

   

39,673,128

     

39,673,128

             

Consumer Staples

   

7,498,115

     

7,498,115

             

Energy

   

4,668,931

     

4,668,931

             

Financials

   

4,635,907

     

4,635,907

             

Healthcare

   

108,969,572

     

108,969,572

             

Industrials

   

18,245,895

     

18,245,895

             

Information Technology

   

85,930,178

     

85,930,178

             

Materials

   

6,415,206

     

6,415,206

             

TOTAL COMMON STOCKS

 

$

       

$

   

$

 

PREFERRED STOCKS

                               

Healthcare

   

11,307

     

            11,307  

RIGHTS

                               

Healthcare

   

239,878

     

           

239,878

 

REAL ESTATE INVESTMENT TRUST

                               

Real Estate

   

3,484,177

     

3,484,177

             

SPECIAL PURPOSE VEHICLE

                               

Information Technology

   

1,700,000

     

           

1,700,000

 

TOTAL INVESTMENTS IN SECURITIES

 

$

307,188,010

   

$

305,236,825

    $    

$

1,951,185

 
   

FAIR VALUE

MEASUREMENTS

USING SIGNIFICANT

UNOBSERVABLE

INPUTS (LEVEL 3)

 
 

Preferred Stocks

 

Alger Small Cap Growth Portfolio

     

Opening balance at January 1, 2021

 

$

11,307

 

Transfers into Level 3

     

Transfers out of Level 3

     

Total gains or losses

       

Included in net realized gain (loss) on investments

     

Included in net change in unrealized appreciation (depreciation) on investments

     

Purchases and sales

       

Purchases

     

Sales

     

Closing balance at June 30, 2021

   

11,307

 

Net change in unrealized appreciation (depreciation) attributable to investments still held at June 30, 2021*

     —  

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

   

FAIR VALUE

MEASUREMENTS

USING SIGNIFICANT

UNOBSERVABLE

INPUTS (LEVEL 3)

 

Alger Small Cap Growth Portfolio

 

Rights

 

Opening balance at January 1, 2021

 

$

198,603

 

Transfers into Level 3

   

 

Transfers out of Level 3

   

 

Total gains or losses

       

Included in net realized gain (loss) on investments

   

 

Included in net change in unrealized appreciation (depreciation) on investments

   

41,275

 

Purchases and sales

       

Purchases

   

 

Sales

   

 

Closing balance at June 30, 2021

   

239,878

 

Net change in unrealized appreciation (depreciation) attributable to investments still held at June 30, 2021*

   

41,275

 
   

FAIR VALUE

MEASUREMENTS

USING SIGNIFICANT

UNOBSERVABLE

INPUTS (LEVEL 3)

 

Alger Small Cap Growth Portfolio

 

Special Purpose Vehicle

 

Opening balance at January 1, 2021

 

$

1,700,000

 

Transfers into Level 3

   

 

Transfers out of Level 3

   

 

Total gains or losses

       

Included in net realized gain (loss) on investments

   

 

Included in net change in unrealized appreciation (depreciation) on investments

   

 

Purchases and sales

       

Purchases

   

 

Sales

   

 

Closing balance at June 30, 2021

   

1,700,000

 

Net change in unrealized appreciation (depreciation) attributable to investments still held at June 30, 2021*

   

 

* Net change in unrealized appreciation (depreciation) is included in net change in unrealized appreciation (depreciation) on investments in the accompanying Statement of
Operations.

 

The following table provides quantitative information about the Portfolio’s Level 3 fair value measurements of the Portfolio’s investments as of June 30, 2021. The table
below is not intended to be all-inclusive, but rather provides information on the Level 3 inputs as they relate to the Portfolio’s fair value measurements.

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

   

Fair Value

June 30, 2021

 

Valuation

Methodology

 

Unobservable

Input

 

Input/Range

   

Weighted

Average

 

Alger Small Cap Growth Portfolio

                             

Preferred Stocks

 

$

 

Income Approach

 

Discount Rate

   

%

   

N/A

 

Rights

     

Income Approach

 

Discount Rate

   

%

   

N/A

 

 

         

Probability of Success

   

%

   

N/A

 
     

Cost Approach

 

Priced at Cost

   

N/A

     

N/A

 

 

The significant unobservable inputs used in the fair value measurement of the Portfolio’s securities are revenue and EBITDA multiples, discount rates, and
the probabilities of success of certain outcomes. Significant increases and decreases in these inputs in isolation and interrelationships between these inputs would have resulted in significantly higher or lower fair value measurements than those noted
in the table above. Generally, all other things being equal, increases in revenue and EBITDA multiples, decreases in discount rates, and increases in the probabilities of success result in higher fair value measurements, whereas decreases in revenues
and EBITDA multiples, increases in discount rates, and decreases in the probabilities of success result in lower fair value measurements.

 

Certain of the Portfolio’s assets and liabilities are held at carrying amount or face value, which approximates fair value for financial statements purposes. As of June 30, 2021, such assets were
categorized within the ASC 820 disclosure hierarchy as follows:

 

   

TOTAL FUND

   

LEVEL 1

   

LEVEL 2

   

LEVEL 3

 
Cash, Foreign cash and Cash equivalents:                                

Alger Small Cap Growth Portfolio

 

$

3,406,897

     

     

3,406,897

     

 

 

NOTE 9 — Derivatives:          

 

FASB Accounting Standards Codification 815 – Derivatives and Hedging (“ASC 815”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures
about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements.

 

Options—The Portfolio seeks to capture the majority of the returns associated with equity market
investments. To meet this investment goal, the Portfolio invests in a broadly diversified portfolio of common stocks and may also buy and sell call and put options on equities and equity indexes. The Portfolio may purchase call options to increase
its exposure to the stock market and also provide diversification of risk. The Portfolio may purchase put options in order to protect from significant market declines that may occur over a short period of time. The Portfolio may write covered call
and cash-secured put options to generate cash flows while reducing the volatility of the portfolio. The cash flows may be an important source of the Portfolio’s return, although written call options may reduce the Portfolio’s ability to profit from
increases in the value of the underlying security or
 equity portfolio. The value of a call option generally increases as the price of the underlying stock
increases and decreases as the stock decreases in price. Conversely, the value of a put option generally increases as the price of the underlying stock decreases and decreases as the stock increases in price. The combination of the diversified
stock portfolio and the purchase and sale of options is intended to provide the Portfolio with the majority of the returns associated with equity market investments but with reduced volatility and returns that are augmented with the cash flows from
the sale of options.

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

There were no options or other derivative instruments held by the Portfolio throughout the period or as of June 30, 2021.

 

NOTE 10 — Risk Disclosures:          

 

Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their
companies’ earnings and may be more sensitive to market, political, and economic developments. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness such as COVID-19 or other public health issues, recessions,
or other events could have a significant impact on investments. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may
be more vulnerable to unfavorable sector developments. Investing in companies of small capitalizations involves the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. Foreign
securities and emerging markets involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility.

 

Transactions in foreign securities may involve certain considerations and risks not typically associated with those of U.S. companies because of, among other factors, the level of governmental
supervision and regulation of foreign security markets, and the possibility of political or economic instability. Additional risks associated with investing in emerging markets include increased volatility, limited liquidity, and less stringent
regulatory and legal systems.

 

NOTE 11 — Affiliated Securities:          

 

The issuers of the securities listed below are deemed to be affiliates of the Portfolio because the Portfolio or its affiliates owned 5% or more of the issuer’s voting securities during all or
part of the period ended June 30, 2021 or because the Portfolio and the issuer are managed by the same investment adviser. Information regarding the Portfolio’s holdings of such securities is set forth in the following table:

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

Security

 

Value at

December

31, 2020

   

Purchases/

Conversion

   

Sales/

Conversion

   

Dividend/

Interest

Income

   

Realized

Gain (Loss)

   

Net Change

in

Unrealized

App(Dep)

   

Value at

December

31, 2021

 

Alger Small Cap Growth Portfolio

                                         

Preferred Stocks

                                         

Prosetta Biosciences, Inc.,

Series D

      $    

$

   

$

   

$

   

$

   

$

11,307

 

Special Purpose Vehicle

                                                       

Crosslink Ventures Capital LLC,

Cl. A

         

     

     

     

     

   

1,400,000

 

Crosslink Ventures Capital LLC,

Cl. B

    300,000      

     

     

     

     

   

300,000

 

Total

 

$

1,711,307

   

$

   

$

   

$

   

$

   

$

   

$

1,711,307

 

NOTE 12 — Subsequent Events:

 

Management of the Portfolio has evaluated events that have occurred subsequent to June 30, 2021,
through the issuance date of the Financial Statements. No such events have been identified which require recognition and/or disclosure.

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

ADDITIONAL INFORMATION (Unaudited)

Shareholder Expense Example          

 

As a shareholder of the Portfolio, you incur two types of costs: transaction costs, if applicable; and ongoing costs, including management fees, distribution (12b-1) fees, if applicable, and
other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

 

The example below is based on an investment of $1,000 invested at the beginning of the six-month period starting January 1, 2021 and ending June 30, 2021 and held for the entire period.

 

Actual Expenses          

 

The first line for each class of shares in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the
heading entitled “Expenses Paid During the Six Months Ended June 30, 2021” to estimate the expenses you paid on your account during this period.

 

Hypothetical Example for Comparison Purposes          

 

The second line for each class of shares in the table below provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for each class of
the Portfolio’s shares and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses
you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs or deduction of insurance charges against assets or
annuities. Therefore, the second line under each class of shares in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs
were included, your costs would have been higher.

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

ADDITIONAL INFORMATION (Unaudited) (Continued)

      

 

 

Beginning

Account

Value

January

1, 2021

   

 

 

Ending

Account

Value

June 30, 2021

   

 

Expenses

Paid During

the Six Months

Ended

June 30,

2021(a)

   

Annualized

Expense Ratio

For the

Six Months

Ended

June 31,

2021(b)

 

Alger Small Cap Growth Portfolio

                               

Class I-2

 

Actual

 

$

1,000.00

   

$

   

$

4.86

     

0.95

%

 

Hypothetical(c)

   

1,000.00

                 

0.95

 

(a)

Expenses are equal to the annualized expense ratio of the share class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

(c)

5% annual return before expenses.

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

ADDITIONAL INFORMATION (Unaudited) (Continued)

Privacy Policy

 

U.S. Consumer Privacy Notice

Rev. 06/22/21

FACTS

 

WHAT DOES ALGER DO WITH YOUR PERSONAL INFORMATION?

     

Why?

 

Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share,
and protect your personal information. Please read this notice carefully to understand what we do.

     

What?

 

The types of personal information we collect and share depend on the product or service you have with us. This information can include:

          Social Security number and

          Account balances and

          Transaction history and

          Purchase history and

          Assets

When you are no longer our customer, we continue to share your information as described in this notice.

     

How?

 

All financial companies need to share personal information to run their everyday business. In the section below, we list the reasons financial companies can share their personal
information; the reasons Alger chooses to share; and whether you can limit this sharing.

Reasons we can share your personal

information

 

Does

Alger share?

 

Can you limit

this sharing?

         

For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus

 

Yes

 

No

         

For our marketing purposes — to offer our products and services to you

 

Yes

 

No

         

For joint marketing with other financial companies

 

No

 

We don’t share

         

For our affiliates’ everyday business purposes — information about your transactions and experiences

 

Yes

 

No

         

For our affiliates’ everyday business purposes — information about your creditworthiness

 

No

 

We don’t share

         

For nonaffiliates to market to you

 

No

 

We don’t share

         

Questions? Call 1-800-223-3810

       

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

ADDITIONAL INFORMATION (Unaudited) (Continued)

Who we are  
   

Who is providing this notice?

Alger includes Fred Alger Management, LLC and Fred Alger & Company, LLC as well as the following funds: The Alger Funds, The Alger Funds II, The Alger Institutional Funds, The
Alger Portfolios, Alger Global Focus Fund, and The Alger ETF Trust.

 

What we do  
   

How does Alger protect my personal information?

To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.

   

How does Alger collect my personal information?

We collect your personal information, for example, when you:

          Open an account or

          Make deposits or withdrawals from your account or

          Give us your contact information or

          Provide account information or

          Pay us by check.

   

Why can’t I limit all sharing?

Federal law gives you the right to limit some but not all sharing related to:

          sharing for affiliates’ everyday business purposes ─ information about your credit worthiness

          affiliates from using your information to market to you

          sharing for nonaffiliates to market to you

State laws and individual companies may give you additional rights to limit sharing.

Definitions  
   

Affiliates

Companies related by common ownership or control. They can be financial and nonfinancial companies.

          Our affiliates include Fred Alger Management, LLC, Weatherbie Capital, LLC and Fred Alger & Company, LLC as well as the following funds:
The Alger Funds, The Alger Funds II, The Alger Institutional Funds, The Alger Portfolios, Alger Global Focus Fund, and The Alger ETF Trust.

   

Nonaffiliates

Companies not related by common ownership or control. They can be financial and nonfinancial companies.

   

Joint marketing

A formal agreement between nonaffiliated financial companies that together market financial products or services to you.

THE ALGER PORTFOLIOS | Alger Small Cap Growth Portfolio

ADDITIONAL INFORMATION (Unaudited) (Continued)

 

Proxy Voting Policies          

 

A description of the policies and procedures the Portfolio uses to determine how to vote proxies relating to portfolio securities and the proxy voting record is available, without charge, by
calling (800) 992-3863 or online on the Portfolio’s website at http://www.alger. com or on the SEC’s website at http://www.sec.gov.

 

Fund Holdings          

 

The Board has adopted policies and procedures relating to disclosure of the Portfolio’s securities. These policies and procedures recognize that there may be legitimate business reasons for
holdings to be disclosed and seek to balance those interests to protect the proprietary nature of the trading strategies and implementation thereof by the Portfolio.

 

Generally, the policies prohibit the release of information concerning portfolio holdings, which have not previously been made public, to individual investors, institutional investors,
intermediaries that distribute the Portfolio’s shares and other parties which are not employed by the Investment Manager or its affiliates except when the legitimate business purposes for selective disclosure and other conditions (designed to
protect the Portfolio) are acceptable.

 

The Portfolio files its complete schedule of portfolio holdings with the SEC semi-annually in shareholder reports on Form N-CSR and after the first and third fiscal quarters as an exhibit to
its reports on Form N-PORT. The Portfolio’s Forms N-CSR and N-PORT are available online on the SEC’s website at www.sec.gov.

 

In addition, the Portfolio makes publicly available its month-end top 10 holdings with a 10 day lag and its month-end full portfolio with a 60 day lag on its website www.alger.com and through
other marketing communications (including printed advertising/sales literature and/or shareholder telephone customer service centers). No compensation or other consideration is received for the non-public disclosure of portfolio holdings
information.

 

In accordance with the foregoing, the Portfolio provides portfolio holdings information to third parties including financial intermediaries and service providers who need access to this
information in the performance of their services and are subject to duties of confidentiality (1) imposed by law, including a duty not to trade on non-public information, and/or (2) pursuant to an agreement that confidential information is not to
be disclosed or used (including trading on such information) other than as required by law. From time to time, the Fund will communicate with these third parties to confirm that they understand the Portfolio’s policies and procedures regarding such
disclosure. This agreement must be approved by the Portfolio’s Chief Compliance Officer.

 

The Board periodically reviews a report disclosing the third parties to whom the Portfolio’s holdings information has been disclosed and the purpose for such disclosure, and it considers
whether or not the release of information to such third parties is in the best interest of the Portfolio and its shareholders.

 

In addition to material the Portfolio routinely provides to shareholders, the Investment Manager may make additional statistical information available regarding the Alger Family of Funds. Such
information may include, but not be limited to, relative weightings and characteristics of the Portfolio versus an index (such as P/E ratio, alpha, beta, capture ratio, maximum drawdown, standard deviation, EPS forecasts, Sharpe ratio, information
ratio, R-squared, and market cap analysis), security specific impact on overall portfolio performance, month-end top ten contributors to and detractors from performance, portfolio turnover, and other similar information. Shareholders should visit
www.alger.com or may also contact the Funds at (800) 992-3863 to obtain such information.

THE ALGER PORTFOLIOS          

 

360 Park Avenue South

New York, NY 10010

(800) 992-3863

www.alger.com

 

Investment Manager          

 

Fred Alger Management, LLC

360 Park Avenue South

New York, NY 10010

 

Distributor          

 

Fred Alger & Company, LLC

360 Park Avenue South

New York, NY 10010

 

Transfer Agent and Dividend Disbursing Agent          

 

UMB Fund Services, Inc.

235 W. Galena Street

Milwaukee, WI 53212

 

Custodian          

 

Brown Brothers Harriman & Company

50 Post Office Square

Boston, MA 02110

 

Independent Registered Public Accounting Firm          

 

Deloitte & Touche LLP

30 Rockefeller Plaza

New York, NY 10112

 

This report is submitted for the general information of the shareholders of Alger Small Cap Growth Portfolio. It is not authorized for distribution to prospective investors unless accompanied by an effective Prospectus for the Portfolio, which
contains information concerning the Portfolio’s investment policies, fees and expenses as well as other pertinent information.

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Not applicable.

 

ITEM 3.

Audit Committee Financial Expert.

Not applicable.

 

ITEM 4.

Principal Accountant Fees and Services.

Not applicable.

 

ITEM 5.

Audit Committee of Listed Registrants.

Not applicable.

Not applicable.

 

ITEM 7.

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

 

ITEM 8.

Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

 

ITEM 9.

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

 

ITEM 10.

Submission of Matters to a Vote of Security Holders.

Not applicable.

 

ITEM 11.

Controls and Procedures.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective
based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this document.

(b) No changes in the registrant’s internal control over financial reporting occurred during the registrant’s second fiscal quarter of the period covered by this report that materially affected, or are reasonably likely to materially affect, the
registrant’s internal control over financial reporting.

ITEM 12.

Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable.

 

(a) (1) Not applicable

(a) (3) Not applicable

(a) (4) Not applicable

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

The Alger Portfolios

Alger Small Cap Growth Portfolio

 

By: /s/Hal Liebes
   
 

Hal Liebes

   
 

President

Date: August 23, 2021

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By: /s/Hal Liebes
   
 

Hal Liebes

   
  President

Date: August 23, 2021

 

By: /s/Michael D. Martins
   
  Michael D. Martins
   
  Treasurer

Date: August 23, 2021

 

Exhibit 99.CERT

Rule 30a-2(a) CERTIFICATIONS

I, Hal Liebes, certify that:

 

1. I have reviewed this report on Form N-CSR of The Alger Portfolios – Alger Small Cap Growth Portfolio;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within
90 days prior to the filing date of this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize, and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 23, 2021

 

/s/ Hal Liebes

Hal Liebes

President

 

Rule 30a-2(a) CERTIFICATIONS

 

I, Michael D. Martins, certify that:

 

1. I have reviewed this report on Form N-CSR of The Alger Portfolios – Alger Small Cap Growth Portfolio;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date
within 90 days prior to the filing date of this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize, and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 23, 2021

 

/s/ Michael D. Martins

Michael D. Martins

Treasurer

 

Rule 30a-2(b) CERTIFICATIONS

 

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of The Alger Portfolios, do hereby certify, to such officer’s
knowledge, that:

 

  (1)

The semi-annual report on Form N-CSR of the Registrant for the period ended June 30, 2021 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934;

and

  (2)

the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of The Alger Portfolios.

 

Dated: August 23, 2021

 

/s/Hal Liebes

 

Hal Liebes

President

The Alger Portfolios

Alger Small Cap Growth Portfolio

 

Dated: August 23, 2021

 

/s/ Michael D. Martins

 

Michael D. Martins

Treasurer

The Alger Portfolios

Alger Small Cap Growth Portfolio

Dated: August 23, 2021

 

This certification is being furnished solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Report or as a separate disclosure document.