Alger Unveils Plans to Launch the Firm’s First Two Actively Managed Exchange Traded Funds

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Alger announced its plans to launch two actively managed exchange traded funds (ETF): Alger 25 ETF, managed by Dr. Ankur Crawford, and Alger Mid Cap 40 ETF, managed by Amy Y. Zhang, CFA, marking the firm’s entry into the ETF space.

Alger has a proud, 56-year record of investing in change and innovation, and we believe the innovation of actively managed ETFs is something that will help to continue to propel our growth.

Fred Alger Management, LLC (“Alger”), a leading growth equity investment manager, today announced its plans to launch two actively managed exchange traded funds (ETF): Alger 25 ETF and Alger Mid Cap 40 ETF, marking the firm’s entry into the ETF space. Both vehicles will be focused, high-conviction strategies. These products are scheduled for availability in 1Q 2021.

“We have seen increased demand for our focused strategies since we launched our first one in 2012. Having these strategies available as actively managed ETFs enables investors who prefer an ETF vehicle to access our investment capabilities,” said Dan Chung, CEO and chief investment officer of Alger. “Alger has a proud, 56-year record of investing in change and innovation, and we believe the innovation of actively managed ETFs is something that will help to continue to propel our growth.”

Alger 25 ETF will be managed by Dr. Ankur Crawford, executive vice president and portfolio manager. She has been with the firm for over 16 years and currently co-manages more than $22 billion in the firm’s U.S. large cap growth equity strategies. This ETF will execute a strategy similar to the Alger 25 Fund, which launched in 2017, by investing in 25 high-conviction large cap growth equities in the technology, health care, consumer discretionary, and industrials sectors.

Alger Mid Cap 40 ETF will be managed by Amy Y. Zhang, CFA, executive vice president and portfolio manager. The ETF will seek to invest in 40 high-conviction mid cap growth equities. Amy has been with the firm since 2015 and manages several of Alger’s small and mid cap strategies, including the Alger Small Cap Focus Fund, a five-star Morningstar rated fund.

Alger has licensed ActiveShares® from Precidian Investments, LLC, which enables the firm to deliver actively managed investment strategies in an ETF vehicle without disclosing holdings daily. The ETFs will be listed on the NYSE Arca, Inc., which currently lists nearly 80% of all U.S. ETF assets under management.

“As active growth equity managers, the ability to shield the strategies’ underlying holdings enables our investment team to construct these high-conviction portfolios with confidence. Our in-depth, fundamental research process, which we have refined for more than 55 years, is critical to our quest to generate strong, long-term returns on behalf of our clients,” added Dan.

Brown Brothers Harriman & Co. (“BBH”) will be the custodian, administrator, and transfer agent of the funds. Alger and BBH have worked closely together for more than a decade.

“After more than ten years partnering with Alger, we are excited to now partner on its first actively managed ETF launch, which will continue to bring fresh investment solutions to the collective market,” said Ryan Sullivan, senior vice president and head of U.S. ETF Services at BBH.

About Alger
Founded in 1964, Alger is widely recognized as a pioneer of growth-style investment management. Headquartered in New York City with affiliate offices in Boston and London, Alger provides U.S. and non-U.S. institutional investors and financial advisors access to a suite of growth equity separate accounts, mutual funds, and privately offered investment vehicles. The firm’s investment philosophy, discovering companies undergoing Positive Dynamic Change, has been in place for over 50 years. Weatherbie Capital, LLC, a Boston-based investment adviser specializing in small and mid-cap growth equity investing is a wholly-owned subsidiary of Alger.

About Brown Brothers Harriman
BBH is a privately held financial institution that has been a thought leader and solutions provider for over 200 years. The firm serves individuals, families, businesses and institutions in its three business lines: Private Banking, Investment Management, and Investor Services. BBH’s culture of accountability fosters deep and lasting relationships built on commitment, adaptability and trust. The company is independent, selective, and specialized by design.

BBH operates its global business out of eighteen offices located in New York, Boston, Beijing, Charlotte, Chicago, Denver, Dublin, Grand Cayman, Hong Kong, Jersey City, Kraków, London, Luxembourg, Nashville, Philadelphia, Tokyo, Wilmington and Zürich. For more information, please visit http://www.bbh.com.

The views expressed are the views of Fred Alger Management, LLC (“FAM”) and its affiliates as of August 2020. These views are subject to change at any time and may not represent the views of all portfolio management teams. These views should not be interpreted as a guarantee of the future performance of the markets, any security or any funds managed by FAM. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

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. Investing in companies of medium capitalizations involve the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. 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. 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. These Funds are classified as “non-diversified” funds under federal securities laws because they can invest in fewer individual companies than diversified funds. These Exchange-Traded Funds (“ETFs”) are different from traditional ETFs. Unlike traditional ETFs, these ETFs will not tell the public what assets they hold each day. This may create additional risks for your investment. For example:

  •     You may have to pay more money to trade an ETF’s shares. These ETFs will provide less information to traders, who tend to charge more for trades when they have less information about the underlying holdings.
  •     The price you pay to buy ETF shares on an exchange may not match the value of an ETF’s portfolio. The same is true when you sell shares. These price differences may be greater for the ETFs offered pursuant to this Prospectus compared to other ETFs because these ETFs provide less information to traders with respect to the underlying portfolio holdings.
  •     These additional risks may be even greater in bad or uncertain market conditions.

The differences between these ETFs and other ETFs may also have advantages. By keeping certain information about an ETF secret, the ETF may face less risk that other traders can predict or copy its investment strategy. This may improve an ETF’s performance. If other traders are able to copy or predict an ETF’s investment strategy, however, this may hurt the ETF’s performance. For more information regarding the unique attributes and risks of these ETFs, please refer to the Funds’ prospectus.

Because the Funds do not provide daily disclosure of its portfolio holdings, but instead a verified intraday indicative value (“VIIV”) calculated and disseminated every second throughout the trading day that is a highly correlated per share value of the underlying portfolio, there is a risk that market prices may vary significantly from the underlying net asset value (“NAV”) of the Funds. The Funds’ shares trade on NYSE Arca, Inc. and therefore may be halted in certain circumstances. Creation and redemptions in the Fund occur through an agent called an “AP Representative” who is not obligated to engage in creations or redemptions. The Funds may have a limited number of AP Representatives and if AP Representatives are not able to proceed with creations and/or redemptions the Funds’ shares may trade at a discount to NAV and possibly face trading halts and/or delisting. The Funds face numerous market trading risks, including the potential lack of an active market for Fund shares, losses from trading in secondary markets, periods of high volatility and disruption in the creation and/or redemption process of the Funds. Any of these factors may cause the Funds’ shares to trade at a premium or discount to NAV.

Morningstar calculates a Morningstar Rating ™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating may differ among share classes of a mutual fund as a result of different sales loads and/or expense structures. It may be based in part, on the performance of a predecessor fund. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. Alger Small Cap Focus Fund Z was rated 5, 5, and 5 Star(s) for the 3-, 5-, and 10-year periods among 577, 508, and 377 Small Growth funds as of 6/30/20.

Rankings and ratings may be based in part on the performance of a predecessor fund or share class and are calculated by Morningstar using a performance calculation methodology that differs from that used by Fred Alger Management, Inc.’s. Differences in the methodologies may lead to variances in calculating total performance returns, in some cases this variance may be significant, thereby potentially affecting the rating/ranking of the Fund(s). When an expense waiver is in effect, it may have a material effect on the total return or yield, and therefore the rating/ranking for the period.

Before investing, carefully consider the Fund’s investment objectives, risks, charges, and expenses. For a prospectus or summary prospectus containing this and other information about the Fund, call (800) 992-3863, visit http://www.alger.com, or consult your financial advisor. Read it carefully before investing.

Distributor: Fred Alger & Company, LLC Member NYSE Euronext, SIPC. NOT FDIC INSURED. NOT BANK GUARANTEED MAY LOSE VALUE.

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