Health Sciences Update

Q&A 4/4

What drives health care is innovation, which aligns with Alger’s experience and expertise.

Innovation is occurring throughout the market spectrum. What makes innovation in the Health Care sector different? Innovative companies have traditionally produced earnings growth that exceeds expectations, may support higher valuations, and have the potential to produce outsized returns. However, innovation is not guaranteed, so performance of companies can vary widely. By using our bottom-up research process, we seek to identify the most innovative companies that are most likely to rapidly grow their earnings. As an example, mid cap size pharmaceutical companies tend to have newer and more innovative treatments than large cap companies. Smaller companies are therefore more likely to generate strong earnings growth. In some instances, we benefit from finding companies that are responding to changes in demographics, such as aging baby boomers’ increasing demands for health care. What differentiates Alger and how you invest in health care companies? We are experienced investors who know the language and nuances of health care and science. The members of our five-person team have an average of 22 years of experience and I have been investing in health care since 1994. With this experience comes confidence that allows me to impart my skills and knowledge to my team members, helping them become better investors. The health care team has a very deep understanding of their respective subsectors of health care. Everyone spends significant time researching companies and understanding what innovation is coming along that may be a major breakthrough.  

The views expressed are the views of Fred Alger Management, LLC (“FAM”) and Alger Management Ltd. (together with their affiliated entities“Alger”) as of March 2020.Alger has used sources of information which it believes to be reliable; however, this publication is not intended to be and does not constitute investment advice.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 Alger.This material is provided for informational purposes only and should not be considered healthcare advice. Please consult your healthcare professional for medical advice. Risk Disclosures: 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 health care 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. Performance data quoted represents past performance. Past performance a not a guarantee of future result. Investors whose reference currency differs from that in which the underlying assets are invested may be subject to exchange rate movements that alter the value of their investments. Important Information for US Investors: This material must be accompanied by the most recent fund fact sheet(s) if used in connection with the sale of mutual fund shares. Fred Alger & Company, LLC serves as distributor of the Alger mutual funds. Important Information for UK and EU Investors: This material is directed at investment professionals and qualified investors (as defined by MiFID/FCA regulations). It is for information purposes only and has been prepared and is made available for the benefit investors.This material does not constitute an offer or solicitation to any person in any jurisdiction in which it is not authorised or permitted, or to anyone who would be an unlawful recipient, and is only intended for use by original recipients and addressees.The original recipient is solely responsible for any actions in further distributing this material and should be satisfied in doing so that there is no breach of local legislation or regulation. Certain products may be subject to restrictions with regard to certain persons or in certain countries under national regulations applicable to such persons or countries. Alger Management, Ltd. (company house number 8634056, domiciled at 78 Brook Street, London W1K 5EF, UK) is authorised and regulated by the Financial Conduct Authority, for the distribution of regulated financial products and services. FAM is a U.S. registered investment advisor, serve as sub-portfolio manager to financial products distributed by Alger Management, Ltd. Alger Group Holdings, LLC (parent company of FAM) and Fred Alger & Company, LLC are not an authorized persons for the purposes of the Financial Services and Markets Act 2000 of the United Kingdom (“FSMA”) and this material has not been approved by an authorized person for the purposes of Section 21(2)(b) of the FSMA. The S&P 500 Index is an index of large company stocks considered to be representative of the U.S. stock market. The Cass Freight Index measures the volume of freight shipping in North America. Investors cannot invest directly in an index. Index performance does not reflect deductions for fees, expenses or taxes. All information regarding firm history, biographies, and Fred Alger Management, LLC (“FAM”) and Weatherbie Capital, LLC performance are maintained by FAM. Alger uses The Global Industry Classification Standard (GICS®) for categorizing companies into sectors and industries. GICS is designed to meet the needs of the investment community for a classification system that reflects a company’s primary business model as determined by its financial performance. FactSet is an independent source, which Alger believes to be a reliable source. FAM, however, makes no representation that it is complete or accurate.

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