Alger Funds N-CSRCertified annual shareholder report (management investment company)

Dear Shareholders,

Frequent Shifts in Market Performance Occur Despite Strong Secular Growth

Researchers at the Max Planck Institute for Biological Cybernetics conducted a study of hikers in areas such as deserts that lack visual reference points. They equipped the participants with GPS tracking technology and instructed them to walk a straight path. Within several hours, many of the hikers unknowingly returned to their starting point. Others repeatedly walked in circles.

In some ways, investors may learn an important lesson from this experiment: failing to focus on appropriate reference points in understanding secular growth may lead one astray. In this letter, I explore how investors can easily become distracted and I urge them to focus on actual reference points.

During the 12-month period ended October 31, 2019, the S&P 500 Index generated a 14.33% return. Key developments included the ebb and flow of optimism regarding U.S.-China trade negotiations, monetary policy and economic growth. We believe those factors are important, but unlike the powerful nature of secular growth, they typically affect corporate earnings and stock prices only temporarily. These transitory events can be distracting and caused the S&P 500 Index to produce 55 days of losses or gains exceeding 1% during the reporting period; however, we believe long-term results have been more telling. In fact, the year-to-date period ended October 31, 2019, saw the S&P 500 Index generate a 23.16% return, the second-strongest showing for the first 10 months of any year since 2000.

Trade Conflicts Drive Volatility

For most of the reporting period, concerns about U.S.-China trade tariffs intensified as both countries imposed additional tariffs while frequent shifts in the outlook for trade negotiations fueled market volatility. By late 2019, U.S. tariffs extended to more than $360 billion of Chinese imports while Chinese tariffs covered $100 billion of U.S. imports. Finally, in October, President Trump proposed measures that may potentially prevent or delay both an increase in certain existing tariffs and the implementation of new tariffs. China proposed purchasing $40 billion to $50 billion in U.S. agriculture products annually. In the days immediately following the announcement, however, the fate of the proposals remained uncertain.

Investors Watch the Fed

Concerns about economic growth drew attention to the U.S. Federal Reserve and monetary policy. Much like investors’ frequently varying views of trade negotiations, shifts in expectations for the Federal Reserve to cut interest rates caused market performance to oscillate. On July 31, 2019, the Federal Reserve announced an anticipated fed funds rate cut of 25 basis points (bps), but Fed Chairman Jerome Powell described the change as a mid-cycle adjustment rather than the start of a prolonged series of rate cuts, which disappointed market participants. The Federal Reserve eventually ushered in two additional 25 bps cuts by October 31, 2019.

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Economic Sentiment Drives Market Rotation

The Organization for Economic Cooperation and Development announced in September that it expects global economic growth of only 2.9% this year, the slowest rate since the global financial crisis. It also announced that economic growth could be curtailed next year and beyond if the trade conflict continues. In the U.S., the Federal Reserve’s June outlook predicted that the nation’s economy would grow only 2.1% this year and 2.0% in 2020. In September, the Federal Reserve increased its 2019 estimate to 2.2% but left its 2020 outlook unchanged.

In an encouraging development, the Bloomberg Economic Surprise Index turned consistently positive in September and strengthened in October after having been in negative territory for most of the first eight months of 2019. The index measures economic readings against forecasts. The improved economic data and a steepening yield curve triggered a rotation from growth stocks to cyclical value equities, such as Financials. From August 27, 2019, until October 31, 2019, the Russell 3000 Value Index generated a 7.08% return compared to the 4.27% return of its growth counterpart. We believe this outperformance is likely to be short lived. In many areas, the fundamentals of value companies, e.g., brick and mortar retailers, are victims of disruption by innovative companies, such as online retailers, that are rapidly capturing market share. This secular trend, and other growth opportunities driven by demographic changes and other advances, suggests to us that growth companies still have the edge in the longer term.

For the 12-month reporting period ended October 31, 2019, growth continued its multi-year period of outperformance with the 18.93% return of the Russell Midcap Growth Index leading the market.

International markets were also strong during the reporting period with the MSCI ACWI ex USA Index generating an 11.84% return. Developed markets led with the MSCI World Index generating a 13.35% return and outpacing the 12.29% return of the MSCI Emerging Markets Index.

A Better Framework for Making Investment Decisions

History is peppered with examples of innovation driving strong secular growth even during challenging economic times, including the Global Financial Crisis, when U.S. internet advertising and e-commerce revenues grew approximately 30% even though total retail sales were virtually flat.(1) With that in mind, we believe investors should focus on unprecedented levels of innovation and secular growth as reference points rather than short-term events.

A small sampling of strong secular growth themes includes cloud computing, mobile device advertising and disruption in healthcare, all of which are allowing companies to capture market share and reward investors with strong earnings growth.

·                  Cloud computing, or the use of off-premises IT resources, is allowing companies and governments to quickly develop new services while reducing overall operating costs. By capturing market share from providers of on-premises technology, cloud computing is growing rapidly with the market for the public cloud expected to grow 35% this year. One example of the growing appeal of off-premises computing occurred earlier this year when Amazon.com, Inc. was selected to create the Volkswagen Industrial Cloud with data from 122 of the car company’s facilities.

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·                  Digital advertising is another powerful secular growth theme, with some of the largest technology firms, such as Alphabet, Inc., Facebook, Inc. and Amazon.com, Inc., having generated rapid earnings growth by capturing advertising market share from traditional publishers. As smartphones have become indispensable, brands are increasingly placing content on them as well as on other portable devices. While overall digital advertising grew 21.8% last year, according to the Interactive Advertising Bureau, revenues for advertising on mobile devices increased 39.7%. For 2019, we believe revenues for advertising on mobile devices will continue to increase at a considerably faster pace than revenues for overall digital advertising.

·                  Healthcare innovations, such as new drugs and novel medical devices, are also creating secular growth. For treating diabetes, Dexcom, Inc. has developed a continuous glucose monitoring system and Insulet Corp. has developed a wearable insulin pump. These products are disrupting older technologies that require injections and frequent finger stick tests to monitor and control patients’ glucose levels. We believe both companies have strong growth opportunities with 65% of diabetes patients still using traditional methods to monitor their conditions. In the pharmaceutical industry, novel drugs are noteworthy, with cancer immunotherapy being just one example. Unlike chemotherapy, which kills cancer cells using toxic compounds, immunotherapy enlists the immune system to attack cancer. The category of drugs is only five years old, but its annual market size is expected to reach $44 billion by 2024.(2)

Going Forward

Innovation and disruption are increasingly high stakes matters. Earlier this year, we estimated that S&P 500 companies representing 14% of the index’s market capitalization are disrupting companies with a total market capitalization of 31%. We believe investors can potentially benefit the most by utilizing active portfolio management based on in-depth fundamental research that seeks to discern the winners and losers of the new economy. At Alger, we will continue to focus on corporate fundamentals as we pursue attractive investment opportunities for our shareholders.

Portfolio Matters

Alger Capital Appreciation Fund

The Alger Capital Appreciation Fund returned 15.29% for the fiscal 12-month period ended October 31, 2019, compared to the 17.10% return of the Russell 1000 Growth Index.

Contributors to Performance

During the reporting period, the largest portfolio sector weightings were Information Technology and Consumer Discretionary. The largest sector overweight was Consumer Discretionary and the largest sector underweight was Consumer Staples.

The Materials and Consumer Discretionary sectors provided the largest contributions to relative performance. Microsoft Corp.; Visa, Inc., Cl. A; Amazon.com, Inc.; Danaher Corp.; and Lam Research Corp. were among the top contributors to performance. Shares of Amazon.com performed strongly in response to the company continuing to take market share from brick and mortar retailers. Strong growth of the company’s web hosting and digital advertising services also supported the performance of Amazon.com shares.

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Detractors from Performance

The Consumer Staples and Industrials sectors were among the sectors that detracted from results. Regarding individual positions, UnitedHealth Group, Inc.; Conagra Brands, Inc.; Sarepta Therapeutics, Inc.; Xilinx, Inc.; and NVIDIA Corp. were among the top detractors from performance. UnitedHealth Group provides a variety of services, including medical insurance and pharmacy benefit management (PBM) programs. Lingering concerns about the potential for Washington, D.C., to curtail drug prices by imposing new regulations on middlemen such as PBM programs hurt the performance of UnitedHealth Group shares. Proposals by certain presidential candidates to enact “Medicare for all” also weighed upon the performance of UnitedHealth Group shares.

Alger 25 Fund

Class P shares of the Alger 25 Fund generated a 15.98% return during the fiscal 12-month period ended October 31, 2019, compared to the 14.33% return of the S&P 500 Index.

Contributors to Performance

During the reporting period, the largest sector weightings were Information Technology and Consumer Discretionary. The largest sector overweight was Information Technology. The Fund had no exposure to Consumer Staples, Energy, or Utilities sectors. The Information Technology and Industrials sectors provided the greatest contributions to relative performance.

Regarding individual positions, Microsoft Corp.; Visa, Inc., Cl. A; Applied Materials, Inc.; HEICO Corp.; and Cintas Corp. were among the top contributors to performance.

Shares of Microsoft performed strongly in response to developments identified in the Alger Growth & Income Fund discussion.

Detractors from Performance

Among sectors, Healthcare was the largest detractors from performance. Regarding individual positions, Apple, Inc.; Vail Resorts, Inc.; QUALCOMM, Inc.; NVIDIA Corp.; and Worldpay, Inc., Cl. A were among the top detractors from performance. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. Such engagement fosters growing purchases of high margin services such as music and apps, along with increasing use of Apple Pay. The shares underperformed as investors considered a slowing consumer demand environment for smartphones, which is driven by some skepticism around the utility of phones sold at increasingly high price points.

Alger 35 Fund

Class P shares of the Alger 35 Fund generated a 13.19% return during the fiscal 12-month period ended October 31, 2019, compared to the 14.33% return of the S&P 500 Index.

Contributors to Performance

During the reporting period, the largest sector weightings were Information Technology and Healthcare. The largest sector overweight was Information Technology. The Fund had no exposure to Consumer Staples, Materials or Energy sectors. The Information Technology and Industrials sectors provided the greatest contributions to relative performance. Regarding individual positions, Microsoft Corp.; Cintas Corp.; MarketAxess Holdings, Inc.; Visa, Inc., Cl. A; and Veeva Systems, Inc. Cl. A. were among the top contributors to performance.

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Shares of Microsoft performed strongly in response to developments identified below in the Alger Growth & Income discussion.

Detractors from Performance

The Consumer Discretionary sector was the largest detractor from relative performance while the Fund’s lack of exposure to Consumer Staples companies was the second-largest detractor from performance. Regarding individual positions, Apple, Inc.; Vail Resorts, Inc.; Abiomed, Inc.; Take-Two Interactive Software, Inc.; and Square, Inc., Cl. A were among the top detractors from performance. Shares of Apple underperformed in response to developments identified in the Alger 25 discussion.

Alger Growth & Income Fund

The Alger Growth & Income Fund returned 13.94% for the fiscal 12-month period ended October 31, 2019, compared to the 14.33% return of the S&P 500 Index.

Contributors to Performance

During the reporting period, the largest portfolio sector weightings were Information Technology and Financials. The largest sector overweight was Financials and the largest sector underweight was Information Technology.

The Financials and Energy sectors provided the largest contributions to relative performance. Regarding individual positions, Microsoft Corp.; Home Depot, Inc.; KLA Corp.; Blackstone Group, Inc., Cl. A; and Procter & Gamble Co. were among the top contributors to performance. Microsoft created the world’s leading desktop operating system and it is transitioning its products to the cloud, which we believe is improving the company’s potential for increasing its profits. In addition, Microsoft’s enterprise cloud product, Azure, is rapidly growing and capturing market share. The company generates very strong free cash flow that it is returning to shareholders through dividends and share repurchases. Its shares performed strongly in response to investors’ reactions to the company’s positive lifecycle change resulting from the success of moving products and customers to the cloud.

Detractors from Performance

The Consumer Discretionary and Healthcare sectors were the largest detractors from relative performance. Regarding individual positions, Altria Group Inc.; Tapestry, Inc.; ConocoPhillips; Gap, Inc.; and DuPont de Nemours, Inc. were the top detractors from performance. The Gap is a global apparel retailer offering products for men, women and children under the following labels: Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Intermix. The shares underperformed after unseasonably cool spring weather resulted in lower than anticipated sales and reduced estimates. The escalating trade war also negatively impacted performance given international sourcing is integral to the Gap’s supply chain.

Alger Mid Cap Growth Fund

The Alger Mid Cap Growth Fund returned 10.95% for the fiscal 12-month period ended October 31, 2019, compared to the 18.93% return of the Russell Midcap Growth Index.

Contributors to Performance

During the reporting period, the largest portfolio sector weightings were Information Technology and Healthcare. The largest sector overweight was Healthcare and the

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largest sector underweight was Information Technology. The Industrials and Real Estate sectors provided the greatest contributions to relative performance. Regarding individual positions, Avalara, Inc.; Advanced Micro Devices, Inc.; ServiceNow, Inc.; HEICO Corp.; and MarketAxess Holdings, Inc. were among the top contributors to performance. Avalara provides cloud-based software services that simplify tax compliance. Its software products automate accurate calculation and validation of taxation. Demand for the company’s products is growing due to increasing tax complexity as well as significant variability in state and municipal treatment of commercial transactions. The shares contributed to performance in response to businesses purchasing products to increase corporate productivity in a cost effective manner. This high unit volume growth company is an example of corporate America’s spending on “digitization.”

Detractors from Performance

The Information Technology and Consumer Discretionary sectors were among the sectors that detracted from results. Regarding individual positions, Grubhub, Inc.; Conagra Brands, Inc.; Vail Resorts, Inc.; Take-Two Interactive Software, Inc.; and Abiomed, Inc. were among the top detractors from performance. Take-Two Interactive owns the Rockstar Games and 2K video game studios and distributes titles such as Grand Theft Auto, Red Dead Redemption, NBA 2K and Borderlands. Shares of Take-Two Interactive underperformed early in the reporting period in response to the company providing lower-than-expected revenue and profitability guidance for the fiscal fourth quarter ended March 31, 2019.

Alger Mid Cap Focus Fund

From the Fund’s June 14, 2019, inception date to October 31, 2019, Class I shares of the Alger Mid Cap Focus Fund generated a -2.80% return compared to the 3.06% return of the Russell Midcap Growth Index.

Contributors to Performance

During the reporting period, Information Technology and Healthcare were the largest sector weightings and sector overweightings. The Fund had no exposure to Real Estate, Materials or Communication Services sectors. The Industrials sector provided the largest contribution to relative performance.

Regarding individual positions, SiteOne Landscape; XPO Logistics, Inc.; Cognex Corp.; Insulet Corp.; and Teladoc Health, Inc. were among the top contributors to performance. XPO Logistics, is a diversified transportation and logistics company operating in North America and Europe. XPO’s logistics division provides a range of supply chain management solutions to customers across a broad set of end markets. XPO’s Transportation segment provides freight brokerage, less-than-truckload (LTL), last mile delivery, managed transportation and other services. We believe XPO is well positioned to benefit from the multi-year strong growth in ecommerce and supply chain outsourcing. It is also benefiting from cross selling across its businesses. XPO is delivering profitability improvement in its North American LTL business through cost controls and improved pricing. Shares of XPO performed strongly in the third quarter of 2019 as investor confidence in the company strengthened, a result, in part, of the company reporting strong second quarter results and increasing its full-year 2019 guidance for earnings before interest, tax, depreciation and amortization and free cash flow at a time when many investors had low expectations for the company.

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Detractors from Performance

The information Technology and Consumer Discretionary sectors were the largest detractors from performance. Regarding individual positions, Planet Fitness, Inc., Cl. A, DMC Global, Inc., Trade Desk, Inc., Align Technology, Inc., and Veeva Systems, Inc., Cl. A were among top detractors from performance. Trade Desk is a leading platform for programmatic ad buying, which is a targeted and automated approach to digital ad spending. The platform leverages data analytics and the company’s predictive artificial intelligence engine, Koa AI, to optimize ad spending across media channels and consumer devices. It disintermediates ad exchanges by allowing buyers to go directly to publishers. Trade Desk shares hit a 52-week high in late July following news that Amazon.com, Inc. opened its ad inventory on Amazon TV to the Trade Desk and other platforms. This change allows Trade Desk to place advertisements on third-party networks, such as Discovery, that are streamed via Amazon Fire TV devices. Investors’ factor rotation out of high-growth companies trading at high multiples later in the reporting period resulted in Trade Desk shares’ underperformance. The impact was compounded when the company’s CEO sold shares. The company, however, beat consensus expectations for revenues for the second quarter and it raised its guidance for its full fiscal year. In addition to the company being well positioned to benefit from increasing spending by brands embracing programmatic advertising, we believe the Trade Desk’s expansion into China is also encouraging.

Alger Weatherbie Specialized Growth Fund

The Alger Weatherbie Specialized Growth Fund generated an 11.57% return during the fiscal 12-month period ended October 31, 2019, compared to the 11.77% return of the Russell 2500 Growth Index. Prior to September 30, 2019, the Fund’s name was “Alger SMid Cap Focus Fund.” The Fund continues to be managed with the same portfolio management team and investment strategy.

Contributors to Performance

During the reporting period, the largest portfolio sector weightings were Information Technology and Healthcare. The largest sector overweight was Consumer Discretionary. The Fund had no exposure to Materials, Consumer Staples or Utilities. The Information Technology and Healthcare sectors provided the greatest contributions to relative performance. Among individual positions, HEICO Corp.; Trade Desk, Inc., Cl. A; Nevro Corp.; Insulet Corp.; and Paylocity Holding Corp. were the top contributors to performance. Trade Desk provides a technology platform for managing digital display, mobile and video advertising campaigns. It is a pioneer in programmatic advertising, which seeks to pitch advertisements that are targeted to viewers’ specific interests. The shares underperformed late in the reporting period, but strong performance prior to September resulted in the company contributing to the Fund’s performance. Trade Desk’s sales growth has benefitted from accelerating favorable trends, including brands moving from analog marketing to digital and programmatic advertising comprising the quickest growing segment within digital marketing. In particular, connected TV, or TV that accesses content via the internet, has reached an inflection point and is starting to contribute meaningfully to advertising growth. We believe programmatic advertising is still in its early phase of adoption.

Detractors from Performance

The Consumer Discretionary and Financials sectors were the largest detractors from relative performance. Regarding individual positions, Stamps.com, Inc.; Puma Biotechnology,

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Inc.; XPO Logistics, Inc.; Canada Goose Holdings, Inc.; and 2U, Inc. were among the top detractors from performance. Stamps.com provides software that allows customers to print postage using a computer, printer and internet connection. Stamps.com is highly leveraged to secular growth in e-commerce and it is expanding beyond the U.S. The stock declined sharply in response to the company reporting a 2019 outlook for revenue and earnings per share that was significantly below expectations. This was due to Stamps.com failing to renew one of its contracts with USPS. While Stamps.com remains a partner of USPS and retains its PC postage license, Stamps.com will no longer participate in a “revenue sharing’ arrangement with USPS whereby Stamps.com would earn a small percentage of shipping fees that certain higher volume shipping customers paid to the postal service.

Alger Small Cap Growth Fund

The Alger Small Cap Growth Fund returned 9.94% for the fiscal 12-month period ended October 31, 2019, compared to the 6.40% return of the Russell 2000 Growth Index.

Contributors to Performance

During the reporting period, the largest portfolio sector weightings were Healthcare and Information Technology. The largest sector overweight was Healthcare and the largest underweight was Industrials. The Information Technology and Energy sectors provided the greatest contributions to relative performance.

Veeva Systems, Inc., Cl. A; Avalara, Inc.; Insulet Corp.; Shopify, Inc., Cl A; and Paycom Software, Inc. were among the top contributors to performance. Veeva Systems is a leading provider of cloud-based solutions for the global life sciences industry. Veeva’s key solutions are its Commercial Cloud products, offering multi-channel customer relationship management software, and Veeva Vault, offering regulated content management. Shares of Veeva performed strongly after the company reported better-than-expected fiscal first quarter 2020 results and raised its fiscal year 2020 guidance. Veeva’s key growth driver has been the strong adoption of Veeva Vault, which saw revenue increase 41% in the first quarter of fiscal year 2020. Veeva also won its first top 20 pharmaceutical customer for its Vault Clinical Data Management Suite, which we believe is an important validation of this product.

Detractors from Performance

The Industrials and Real Estate sectors were among the sectors that detracted from results.

Inogen, Inc.; Abiomed, Inc.; Quidel Corp.; Vocera Communications, Inc.; and Grubhub, Inc. were among the top detractors from performance. Inogen develops, manufactures and markets innovative portable oxygen concentrators (POC) that provide supplemental long-term oxygen for patients suffering from chronic respiratory conditions. The company’s Inogen One systems concentrate the air around the patient to offer a single source of supplemental oxygen. The technology is more convenient than traditional portable devices that can weigh 5 to 20 pounds. During the first quarter of 2019, Inogen reported weaker-than-expected fourth quarter 2018 results, which heightened concerns about the sustainability of the company’s growth and the market penetration of its products. In 2018, Inogen delivered impressive revenue growth of 44% but margins declined slightly year over year. The company increased spending during the second half of the year to build upon its direct-to-consumer (DTC) business, which hurt margins, and it experienced slowing growth of its U.S home medical equipment (HME) distributor channel due to a sharp drop in

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purchasing at one of the company’s largest HME distributors. We believe the slowdown is a temporary result of this distributor adjusting its infrastructure for POCs, which require significantly fewer home deliveries than oxygen tank systems. Additionally, the company has potential to benefit from increasing its U.S. DTC salesforce and the introduction of its next generation G5 POC.

Alger Small Cap Focus Fund

The Alger Small Cap Focus Fund returned 6.59% during the fiscal 12-month period ended October 31, 2019, compared to the 6.40% return of the Russell 2000 Growth Index.

Contributors to Performance

During the reporting period, the Healtcare and Information Technology sectors were the largest portfolio sector weightings. The largest sector overweight was Healthcare. The Fund had no exposure to Energy, Consumer Staples, Communication Services, Real Estate or Utilities. The Information Technology sector was the most important contributor to relative performance.

Regarding individual positions, Shopify, Inc., Cl. A; Tandem Diabetes Care, Inc.; Coupa Software, Inc.; Veeva Systems, Inc., Cl. A; and Natera, Inc. were among the top contributors to performance. Shares of Veeva performed strongly in response to developments identified in the Alger Small Cap Growth Fund discussion.

Detractors from Performance

The Industrials and Consumer Discretionary sectors were the most significant detractors from performance. Regarding individual positions, Inogen, Inc.; HealthEquity, Inc.; Stamps.com, Inc.; Abiomed, Inc.; and Tactile Systems Technology, Inc. were among the top detractors from performance. Shares of Stamps.com underperformed in response to developments identified in the Alger Weatherbie Specialized Growth Fund discussion.

Alger International Focus Fund

The Alger International Focus Fund returned 11.99% for the fiscal 12-month period ended October 31, 2019, compared to the 11.84% return of the MSCI ACWI ex USA Index.

Contributors to Performance

During the reporting period, the largest sector weightings were Consumer Discretionary and Healthcare. The largest sector overweight was Consumer Discretionary and the largest underweight was Financials. The Consumer Discretionary and Financials sectors provided the greatest contributions to relative performance. From a country perspective, India, Italy, Brazil, Russia, Argentina and Ireland provided the greatest contributions to relative performance.

Among individual positions, ASML Holding NV; London Stock Exchange Group plc; Lojas Renner S.A.; Manappuram Finance Limited; and Globant SA were among the top contributors to performance. ASML is the world’s leading photolithography systems supplier. The lithography process is one of the critical steps in semiconductor manufacturing. The stock performed strongly in response to management providing a reassuring outlook for the remainder of the year and 2020, despite a challenging backdrop for semiconductors.

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Detractors from Performance

The Consumer Staples and Communication Services sectors were among the sectors that detracted from results. From a country perspective, Spain, France, South Korea, Switzerland and Canada were among the top detractors from performance. Among individual positions, Core Laboratories NV; Ubisoft Entertainment SA; UT Group Co., Ltd.; Fevertree Drinks PLC; and SMCP SA were top detractors from performance. UT Group is one of Japan’s premier employment outsourcing companies with a primary focus on short- and long-term contract workers for information technology, auto and general industry manufacturing positions. During the reporting period, the recent global economic slowdown and trade tension between the U.S. and China dented investor sentiment for the company and exacerbated the slowdown in manufacturing activity in Japan.

Alger Health Sciences Fund

The Alger Health Sciences Fund returned 1.96% for the fiscal 12-month period ended October 31, 2019, compared to the 7.74% return of the Russell 3000 Healthcare Index.

Contributors to Performance

Among the most important contributors to performance were Array BioPharma, Inc.; Tesaro, Inc.; Tandem Diabetes Care, Inc.; Insulet Corp.; and Vertex Pharmaceuticals, Inc. Tandem Diabetes Care provides the t:slim X2 Insulin Delivery System for treating diabetes. It is the smallest durable insulin pump available and it is the only pump on the market with software that can be updated remotely. The company also sells insulin reservoir cartridges and infusion sets for use with its pumps. Tandem stock outperformed early in the reporting period after the company announced stronger-than-expected fourth quarter 2018 financial results. The company’s new t:slim X2 insulin pump with a Basal-IQ algorithm and integration with a no-calibration continuous glucose monitoring (CGM) sensor has helped Tandem gain significant U.S. market share. Tandem sales have also benefited from the company expanding internationally and a competitor exiting the insulin pump market in late 2017.

Detractors from Performance

Conversely, Sarepta Therapeutics, Inc.; Prosetta Biosciences, Inc.; Emmaus Life Sciences, Inc.; UnitedHealth Group, Inc.; and Abiomed, Inc. were among positions that detracted from performance. UnitedHealth Group is a large managed healthcare company. Shares of UnitedHealth Group underperformed in response to developments identified in the Alger Capital Appreciation Fund discussion.

I thank you for putting your trust in Alger.

Sincerely,

Daniel C. Chung, CFA

Chief Investment Officer

Fred Alger Management, LLC

(1) Source: Alger Capital Markets: Observations and Insights — Loving to Lend of Opting to Own. Autumn 2019.

(2) Source: Cowen, which is an investment bank.

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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 funds. This report is not authorized for distribution to prospective investors in a fund unless preceded or accompanied by an effective prospectus for the fund. Performance of Funds discussed above other than the Alger 25 Fund, the Alger 35 Fund and the Alger Mid Cap Focus Fund represents the return of Class A shares prior to the deduction of any sales charges and includes the reinvestment of any dividends or distributions. The performance represents the return of Class P shares for the Alger 25 Fund and the Alger 35 Fund and Class I shares for the Alger Mid Cap Focus Fund.

The performance data quoted represents past performance, which is not an indication or guarantee of future results.

Standardized performance results can be found on the following pages. The investment return and principal value of an investment in a fund 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 month-end, visit us at www.alger.com or call us at (800) 992-3863.

The views and opinions of the funds’ 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 a fund 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 a fund 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 a fund. Please refer to the Schedule of Investments for each fund which is included in this report for a complete list of fund holdings as of October 31, 2019. Securities mentioned in the Shareholders’ Letter, if not found in the Schedule of Investments, may have been held by the funds during the 12-month fiscal period ended October 31, 2019.

Risk Disclosures

Alger Capital Appreciation Fund

Investing in the stock market involves risks and may not be suitable for all investors. Growth stocks tend to 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. A significant portion of assets will be invested in technology and healthcare companies, which may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies.

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Alger 25 Fund

Investing in the stock market involves risks, and may not be suitable for all investors. Growth stocks tend to 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. A significant portion of assets will be invested in technology companies, which may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. The Fund is classified as a “non-diversified fund” under federal securities laws because it can invest in fewer individual companies than a diversified fund. Assets may be focused in a small number of holdings, making them susceptible to risks associated with a single economic, political or regulatory event than a more diversified portfolio.

Alger 35 Fund

Investing in the stock market involves risks, and may not be suitable for all investors. Growth stocks tend to 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. A significant portion of assets will be invested in technology and healthcare companies, which may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. The Fund is classified as a “non-diversified fund” under federal securities laws because it can invest in fewer individual companies than a diversified fund. Assets may be focused in a small number of holdings, making them susceptible to risks associated with a single economic, political or regulatory event than a more diversified portfolio.

Alger Growth & Income Fund

Investing in the stock market involves risks, and may not be suitable for all investors. Growth stocks tend to 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. A significant portion of assets will be invested in technology companies, which may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies.

Alger Mid Cap Growth Fund

Investing in the stock market involves risks, and may not be suitable for all investors. Growth stocks tend to 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. A significant portion of assets will be invested in technology and healthcare companies, which may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. Investing in companies of medium capitalizations involves the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity.

Alger Mid Cap Focus Fund

Investing in the stock market involves risks, and may not be suitable for all investors. Growth stocks tend to 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. Investing in companies of medium capitalizations involve the risk that such

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issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. Assets may be focused in a small number of holdings, making them susceptible to risks associated with a single economic, political or regulatory event than a more diversified portfolio. A significant portion of assets will be invested in technology and healthcare companies, which may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. Leverage increases volatility in both up and down markets and its costs may exceed the returns of borrowed securities. Foreign securities involve special risks including currency fluctuations, less liquidity, inefficient trading, political instability, and increased volatility. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment. The Fund is classified as a “non-diversified fund” under federal securities laws because it can invest in fewer individual companies than a diversified fund.

Alger Weatherbie Specialized Growth Fund

Investing in the stock market involves risks, and may not be suitable for all investors. Growth stocks tend to 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. A significant portion of assets will be invested in technology and healthcare companies, which may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. Investing in companies of small and medium capitalizations involves the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. Assets may be focused in a small number of holdings, making them susceptible to risks associated with a single economic, political or regulatory event than a more diversified portfolio. Foreign securities involve special risks including currency fluctuations, less liquidity, inefficient trading, political instability, and increased volatility.

Alger Small Cap Growth Fund

Investing in the stock market involves risks, and may not be suitable for all investors. Growth stocks tend to 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. A significant portion of assets will be invested in technology and healthcare companies, which may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. 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.

Alger Small Cap Focus Fund

Investing in the stock market involves risks, and may not be suitable for all investors. Growth stocks tend to 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. A significant portion of assets will be invested in technology and healthcare companies, which may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. 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. Assets may be focused in a small number of holdings, making them susceptible to

13

risks associated with a single economic, political or regulatory event than a more diversified portfolio.

Alger International Focus Fund

Investing in the stock market involves risks, and may not be suitable for all investors. Growth stocks tend to 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. Assets may be focused in a small number of holdings, making them susceptible to risks associated with a single economic, political or regulatory event than a more diversified portfolio. Foreign securities and Emerging Markets involve special risks including currency fluctuations, less liquidity, inefficient trading, political instability, and increased volatility. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment.

Alger Health Sciences Fund

Investing in the stock market involves risks, and may not be suitable for all investors. Growth stocks tend to 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. A significant portion of assets will be invested in healthcare companies, which may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. Private placements are offerings of a company’s securities not registered with the SEC and not offered to the public, for which limited information may be available. Such investments are generally considered to be illiquid. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment.

For a more detailed discussion of the risks associated with a fund, please see the Prospectus.

Before investing, carefully consider a fund’s investment objective, risks, charges, and expenses.

For a prospectus or a summary prospectus containing this and other information about The Alger Funds call us at (800) 992-3863 or visit us at www.alger.com. Read it carefully before investing.

Fred Alger & Company, LLC, Distributor. Member NYSE Euronext, SIPC.

NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE.

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Definitions:

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

·                  The Bloomberg Economic Surprise Index shows the degree to which economic analysts under- or over-estimate the trends in the business cycle. The surprise element is defined as the percentage (or percentage point) difference between analyst forecasts and the published value of economic data releases.

·                  The Interactive Advertising Bureau is an advertising business organization that develops industry standards, conducts research, and provides legal support for the online advertising industry.

·                  The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher growth earning potential as defined by Russell’s leading style methodology. The Russell 1000 Growth Index is constructed to provide a comprehensive and unbiased barometer for the large-cap growth segment.

·                  The MSCI ACWI ex USA Index (gross) captures large and mid cap representation across 23 of 24 Developed Markets (DM) countries (excluding the US) and 23 Emerging Markets (EM) countries. The index covers approximately 85% of the global equity opportunity set outside the US.

·                  The MSCI Emerging Markets Index is a free float-adjusted market capitalization index designed to measure equity market performance in the global emerging markets.

·                  The MSCI World Index is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. Investors cannot invest directly in any index. Index performance does not reflect the deduction for fees, expenses, or taxes.

·                  The Russell 3000 Healthcare Index is an unmanaged index that measures the performance of those companies in the Russell 3000 Index involved in the medical services or healthcare field. The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on the total market capitalization, which represents 99% of the U.S. equity market.

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

·                  The Russell 2500 Growth Index measures the performance of the small to mid-cap growth segment of the U.S. equity universe. It includes those Russell 2500 companies with higher growth earning potential as defined by Russell’s leading style methodology. The Russell 2500 Growth Index is constructed to provide a comprehensive and unbiased barometer of the small to mid-cap

15

growth market.

·                  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.

·                  The Russell 3000 Value Index is a market-capitalization weighted equity index maintained by the Russell Investment Group and based on the Russell 3000 Index, which measures how U.S. stocks in the equity value segment perform. Included in the Russell 3000 Value Index are stocks from the Russell 3000 Index with lower price-to-book ratios and lower expected growth rates.

16

FUND PERFORMANCE AS OF 9/30/19 (Unaudited)

AVERAGE ANNUAL TOTAL RETURNS

The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains.

Beginning August 7, 2015, Alger Small Cap Focus Fund (formerly Alger Growth Opportunities Fund) changed its investment strategy to normally invest at least 80% of its

17

net assets, plus any borrowings for investment purposes, in equity securities of companies that, at the time of purchase of the securities, have a total market capitalization within the range of companies included in the Russell 2000 Growth Index.

Alger International Focus Fund prior to March 28, 2018, followed different investment strategies and was managed by different portfolio managers. Prior to August 15, 2018, the Fund was named “Alger International Growth Fund”. Beginning May 31, 2013, Alger International Growth Fund (formerly Alger Large Cap Growth Fund) changed its investment strategy to include securities of foreign companies of any market capitalization; its previous investment strategy considered securities of United States companies with a market capitalization equal to or greater than the companies in the Russell 1000 Growth Index. Performance prior to March 28, 2018, reflects these prior management styles and does not reflect the Fund’s current investment strategies and investment personnel.

Beginning April 1, 2011, Alger Growth & Income Fund changed its investment strategy to focus on securities that offer opportunities for capital appreciation as well as pay dividends. Previously, under the name “Alger Balanced Fund”, its investment strategy focused on securities, including fixed-income, with an emphasis on income-producing and a potential for capital appreciation.

Alger Weatherbie Specialized Growth Fund current portfolio managers began managing the Fund in March 2017. The Fund changed its name and investment strategy from “Alger SMid Cap Growth Fund” to “Alger SMid Cap Focus Fund” in August 2017 and the Fund changed its name from “Alger SMid Cap Focus Fund” to “Alger Weatherbie Specialized Growth Fund” in September 2019.

*                 Historical performance prior to the inception of the Class, is that of the Fund’s Class A shares, which has been adjusted to remove the sales charge imposed by Class A shares and adding the higher operating expenses of the Class C shares.

18

ALGER CAPITAL APPRECIATION FUND

Fund Highlights Through October 31, 2019 (Unaudited)

HYPOTHETICAL $10,000 INVESTMENT IN CLASS A SHARES

— 10 years ended 10/31/19

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Capital Appreciation Fund Class A shares, with a maximum sales charge of 5.25%, and the Russell 1000 Growth Index (an unmanaged index of common stocks) for the ten years ended October 31, 2019. Figures for the Alger Capital Appreciation Fund Class A shares and the Russell 1000 Growth Index include reinvestment of dividends. Figures for the Alger Capital Appreciation Fund Class A shares also include reinvestment of capital gains. Performance for Alger Capital Appreciation Fund Class B, Class C and Class Z shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

19

ALGER CAPITAL APPRECIATION FUND

Fund Highlights Through October 31, 2019 (Unaudited) (Continued)

PERFORMANCE COMPARISON AS OF 10/31/19

AVERAGE ANNUAL TOTAL RETURNS

The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. Class A returns reflect the maximum initial sales charge and Class B and C returns reflect the applicable contingent deferred sales charge. The chart and table above do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Investment return and principal will fluctuate and the Fund’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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

*                 Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to July 31, 1997, inception of the class, is that of the Fund’s Class A shares, reduced to reflect the current maximum sales charge and the higher operating expenses of Class C shares.

20

ALGER 25 FUND

Fund Highlights Through October 31, 2019 (Unaudited)

HYPOTHETICAL $10,000 INVESTMENT IN CLASS P SHARES

from 12/28/17 to 10/31/19

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger 25 Fund Class P shares and the S&P 500 Index (an unmanaged index of common stocks) from December 28, 2017, the inception date of the Alger 25 Fund Class P, through October 31, 2019. Figures for the Alger 25 Fund Class P shares and the S&P 500 Index include reinvestment of dividends. Figures for the Alger 25 Fund Class P shares also include reinvestment of capital gains. Performance for the Alger 25 Fund Class P-2 shares will vary from results shown above due to differences in the expenses that the class bears. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

21

ALGER 25 FUND

Fund Highlights Through October 31, 2019 (Unaudited) (Continued)

PERFORMANCE COMPARISON AS OF 10/31/19

AVERAGE ANNUAL TOTAL RETURNS

The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. The chart and table above do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Investment return and principal will fluctuate and the Fund’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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

22

ALGER 35 FUND

Fund Highlights Through October 31, 2019 (Unaudited)

HYPOTHETICAL $10,000 INVESTMENT IN CLASS P SHARES

from 3/29/18 to 10/31/19

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger 35 Fund Class P shares and the S&P 500 Index (an unmanaged index of common stocks) from March 29, 2018, the inception date of the Alger 35 Fund Class P, through October 31, 2019. Figures for the Alger 35 Fund Class P shares and the S&P 500 Index include reinvestment of dividends. Figures for the Alger 35 Fund Class P shares also include reinvestment of capital gains. Performance for the Alger 35 Fund Class P-2 shares will vary from results shown above due to differences in the expenses that the class bears. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

23

ALGER 35 FUND

Fund Highlights Through October 31, 2019 (Unaudited) (Continued)

PERFORMANCE COMPARISON AS OF 10/31/19

AVERAGE ANNUAL TOTAL RETURNS

The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. The chart and table above do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Investment return and principal will fluctuate and the Fund’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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

24

ALGER GROWTH & INCOME FUND

Fund Highlights Through October 31, 2019 (Unaudited)

HYPOTHETICAL $10,000 INVESTMENT IN CLASS A SHARES

— 10 years ended 10/31/19

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Growth & Income Fund Class A shares, with a maximum sales charge of 5.25%, and the S&P 500 Index (an unmanaged index of common stocks), for the ten years ended October 31, 2019. Beginning April 1, 2011, Alger Growth & Income Fund changed its investment strategy to focus on securities that offer opportunities for capital appreciation as well as pay dividends. Previously, under the name “Alger Balanced Fund”, its investment strategy focused on securities, including fixed-income, with an emphasis on income-producing and a potential for capital appreciation. Figures for the Alger Growth & Income Fund Class A shares, and the S&P 500 Index include reinvestment of dividends. Figures for the Alger Growth & Income Fund Class A shares also include reinvestment of capital gains. Performance for the Alger Growth & Income Fund Class C and Class Z shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

25

ALGER GROWTH & INCOME FUND

Fund Highlights Through October 31, 2019 (Unaudited) (Continued)

PERFORMANCE COMPARISON AS OF 10/31/19

AVERAGE ANNUAL TOTAL RETURNS

The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. Class A returns reflect the maximum initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. The chart and table above do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Prior to April 1, 2011, the Fund followed a different investment objective and different strategies under the name “Alger Balanced Fund”. Investment return and principal will fluctuate and the Fund’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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

*                 Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to July 31, 1997, inception of the class, is that of the Fund’s Class A shares, reduced to reflect the current maximum sales charge and the higher operating expenses of Class C shares.

26

ALGER MID CAP GROWTH FUND

Fund Highlights Through October 31, 2019 (Unaudited)

HYPOTHETICAL $10,000 INVESTMENT IN CLASS A SHARES

— 10 years ended 10/31/19

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Mid Cap Growth Fund Class A shares, with a maximum sales charge of 5.25%, and the Russell Midcap Growth Index (an unmanaged index of common stocks) for the ten years ended October 31, 2019. Figures for the Alger Mid Cap Growth Fund Class A shares and Russell Midcap Growth Index include reinvestment of dividends. Figures for the Alger Mid Cap Growth Fund Class A shares also include reinvestment of capital gains. Performance for the Alger Mid Cap Growth Fund Class B, Class C and Class Z shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

27

ALGER MID CAP GROWTH FUND

Fund Highlights Through October 31, 2019 (Unaudited) (Continued)

PERFORMANCE COMPARISON AS OF 10/31/19

AVERAGE ANNUAL TOTAL RETURNS

The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. Class A returns reflect the maximum initial sales charge and Class B and C returns reflect the applicable contingent deferred sales charge. The chart and table above do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Investment return and principal will fluctuate and the Fund’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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

*                 Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to July 31, 1997, inception of the class, is that of the Fund’s Class A shares, reduced to reflect the current maximum sales charge and the higher operating expenses of Class C shares.

28

ALGER MID CAP FOCUS FUND

Fund Highlights Through October 31, 2019 (Unaudited)

HYPOTHETICAL $10,000 INVESTMENT IN CLASS I SHARES

from 6/14/2019 to 10/31/19

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Mid Cap Focus Fund Class I shares and the Russell Midcap Growth Index (an unmanaged index of common stocks) from June 14, 2019, the inception date of the Alger Mid Cap Focus Fund Class I, through October 31, 2019. Figures for the Alger Mid Cap Focus Fund Class I shares and the Russell Midcap Growth Index include reinvestment of dividends. Alger Mid Cap Focus Fund Class I shares also include reinvestment of capital gains. Performance for the Alger Mid Cap Focus Fund Class Z shares will vary from results shown above due to differences in the expenses that the class bears. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

29

ALGER MID CAP FOCUS FUND

Fund Highlights Through October 31, 2019 (Unaudited) (Continued)

PERFORMANCE COMPARISON AS OF 10/31/19

AVERAGE ANNUAL TOTAL RETURNS

The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. The chart and table above do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Investment return and principal will fluctuate and the Fund’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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

30

ALGER WEATHERBIE SPECIALIZED GROWTH FUND

Fund Highlights Through October 31, 2019 (Unaudited)

HYPOTHETICAL $10,000 INVESTMENT IN CLASS A SHARES

— 10 years ended 10/31/19

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Weatherbie Specialized Growth Fund Class A shares, with a maximum sales charge of 5.25%, and the Russell 2500 Growth Index (an unmanaged index of common stocks) for the ten years ended October 31, 2019. On September 30, 2019 Alger SMid Cap Focus Fund changed its name to Alger Weatherbie Specialized Growth Fund. Prior to August 30, 2017, the Fund followed different investment strategies under the name “Alger SMid Cap Growth Fund” and prior to March 1, 2017 was managed by different portfolio managers. Effective March 1, 2017, Weatherbie Capital, LLC, an indirect, wholly-owned subsidiary of Alger Associates, Inc., the parent company of Fred Alger Management, LLC, began acting as sub-advisor to the Alger Weatherbie Specialized Growth Fund. Figures for the Alger Weatherbie Specialized Growth Fund Class A shares and the Russell 2500 Growth Index include reinvestment of dividends. Figures for the Alger Weatherbie Specialized Growth Fund Class A shares also include reinvestment of capital gains. Performance for the Alger Weatherbie Specialized Growth Fund Class C, Class I, Class Y and Class Z shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

31

ALGER WEATHERBIE SPECIALIZED GROWTH FUND

Fund Highlights Through October 31, 2019 (Unaudited) (Continued)

PERFORMANCE COMPARISON AS OF 10/31/19

AVERAGE ANNUAL TOTAL RETURNS

The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. Class A returns reflect the maximum initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. The chart and table above do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Investment return and principal will fluctuate and the Fund’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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

*                 Historical performance prior to August 5, 2007, inception of the class, is that of the Fund’s Class A shares, which has been adjusted to remove the sales charge imposed by Class A shares.

32

ALGER SMALL CAP GROWTH FUND

Fund Highlights Through October 31, 2019 (Unaudited)

HYPOTHETICAL $10,000 INVESTMENT IN CLASS A SHARES

— 10 years ended 10/31/19

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Small Cap Growth Fund Class A shares, with a maximum sales charge of 5.25%, and the Russell 2000 Growth Index (an unmanaged index of common stocks) for the ten years ended October 31, 2019. Figures for the Alger Small Cap Growth Fund Class A shares and the Russell 2000 Growth Index include reinvestment of dividends. Figures for the Alger Small Cap Growth Fund Class A shares also include reinvestment of capital gains. Performance for the Alger Small Cap Growth Fund Class B, Class C and Class Z shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

33

ALGER SMALL CAP GROWTH FUND

Fund Highlights Through October 31, 2019 (Unaudited) (Continued)

PERFORMANCE COMPARISON AS OF 10/31/19

AVERAGE ANNUAL TOTAL RETURNS

The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. Class A returns reflect the maximum initial sales charge and Class B and C returns reflect the applicable contingent deferred sales charge. The chart and table above do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Investment return and principal will fluctuate and the Fund’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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

*                 Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to July 31, 1997, inception of the class, is that of the Fund’s Class A shares, reduced to reflect the current maximum sales charge and the higher operating expenses of Class C shares.

34

ALGER SMALL CAP FOCUS FUND

Fund Highlights Through October 31, 2019 (Unaudited)

HYPOTHETICAL $10,000 INVESTMENT IN CLASS A SHARES

— 10 years ended 10/31/19

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Small Cap Focus Fund Class A shares, with an initial 5.25% maximum sales charge, and the Russell 2000 Growth (an unmanaged indices of common stocks) for the ten years ended October 31, 2019. Prior to August 7, 2015, the Fund followed different investment strategies under the name “Alger Growth Opportunities Fund” and prior to February 12, 2015 was managed by a different portfolio manager. Accordingly, performance prior to those dates does not reflect the Fund’s current investment strategies and investment personnel. Figures for the Alger Small Cap Focus Fund Class A shares, and the Russell 2000 Growth Index include reinvestment of dividends. Figures for the Alger Small Cap Focus Fund Class A shares also include reinvestment of capital gains. Performance for the Alger Small Cap Focus Fund Class C, Class I, Class Y and Class Z shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

35

ALGER SMALL CAP FOCUS FUND

Fund Highlights Through October 31, 2019 (Unaudited) (Continued)

PERFORMANCE COMPARISON AS OF 10/31/19

AVERAGE ANNUAL TOTAL RETURNS

The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. Class A returns reflect the maximum initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. The chart and table above do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Investment return and principal will fluctuate and the Fund’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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

36

ALGER INTERNATIONAL FOCUS FUND

Fund Highlights Through October 31, 2019 (Unaudited)

HYPOTHETICAL $10,000 INVESTMENT IN CLASS A SHARES

— 10 years ended 10/31/19

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger International Focus Fund Class A shares, with a maximum sales charge of 5.25% and MSCI AC World Index ex USA (an unmanaged index of common stocks) for the ten years ended October 31, 2019. Beginning May 31, 2013, Alger International Growth Fund changed its investment strategy to include securities of foreign companies of any market capitalization. Alger International Focus Fund prior to March 28, 2018, followed different investment strategies and was managed by different portfolio managers. Prior to August 15, 2018, the Fund was named “Alger International Growth Fund”. Previously, under the name “Alger Large Cap Growth Fund”, its investment strategy considered securities of United States companies with a market capitalization equal to or greater than the companies in the Russell 1000 Growth Index. Performance prior to March 28, 2018, reflects these prior management styles and does not reflect the Fund’s current investment strategies and investment personnel. Figures for the Alger International Focus Fund Class A shares and the index include reinvestment of dividends. Figures for the Alger International Focus Fund Class A shares also include reinvestment of capital gains. Performance for the Alger International Focus Fund Class B, Class C, Class I and Class Z shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

37

ALGER INTERNATIONAL FOCUS FUND

Fund Highlights Through October 31, 2019 (Unaudited) (Continued)

PERFORMANCE COMPARISON AS OF 10/31/19

AVERAGE ANNUAL TOTAL RETURNS

The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. Class A returns reflect the maximum initial sales charge and Class B and C returns reflect the applicable contingent deferred sales charge. The chart and table above do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Investment return and principal will fluctuate and the Fund’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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

*                 Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to July 31, 1997, inception of the class, is that of the Fund’s Class A shares, reduced to reflect the current maximum sales charge and the higher operating expenses of Class C shares.

38

ALGER HEALTH SCIENCES FUND

Fund Highlights Through October 31, 2019 (Unaudited)

HYPOTHETICAL $10,000 INVESTMENT IN CLASS A SHARES

— 10 years ended 10/31/19

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Health Sciences Fund Class A shares, with a maximum sales charge of 5.25%, the Russell 3000 Healthcare Index (an unmanaged index of common stocks) for the ten years ended October 31, 2019. Figures for the Alger Health Sciences Fund Class A shares and the Russell 3000 Healthcare Index include reinvestment of dividends. Figures for the Alger Health Sciences Fund Class A shares also include reinvestment of capital gains. Performance for the Alger Health Sciences Fund Class C and Class Z shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

39

ALGER HEALTH SCIENCES FUND

Fund Highlights Through October 31, 2019 (Unaudited) (Continued)

PERFORMANCE COMPARISON AS OF 10/31/19

AVERAGE ANNUAL TOTAL RETURNS

The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. Class A returns reflect the maximum initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. The chart and table above do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares. Investment return and principal will fluctuate and the Funds 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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

40

PORTFOLIO SUMMARY†
October 31, 2019 (Unaudited)

41

PORTFOLIO SUMMARY†

October 31, 2019 (Unaudited) (Continued)

†                 Based on net assets for each Fund.

42

THE ALGER FUNDS | ALGER CAPITAL APPRECIATION FUND
Schedule of Investments October 31, 2019

43

THE ALGER FUNDS  |  ALGER CAPITAL APPRECIATION FUND

Schedule of Investments October 31, 2019 (Continued)