Prospectus
May 1,
2022
|
|
Ticker
Symbol |
Listing
Exchange |
|
Alger
Mid Cap 40 ETF |
FRTY |
NYSE Arca,
Inc. |
|
Alger
35 ETF |
ATFV |
NYSE Arca,
Inc. |
These
Exchange-Traded Funds (“ETFs”) are different from traditional ETFs.
Traditional
ETFs tell the public what assets they hold each day. These ETFs will not. 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.
•
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 these ETFs compared to other ETFs because these ETFs provide
less information to traders.
•
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 the ETFs secret, these ETFs may face less risk
that other traders can predict or copy their investment strategies. This may
improve the ETFs’ performance. If other traders are able to copy or predict the
ETFs’ investment strategies, however, this may hurt the ETFs’
performance.
For
additional information regarding the unique attributes and risks of these ETFs,
see the Share Price and Distributions section of this Prospectus and the
Non-transparent ETF Structure Risk, Trading Issues Risk, Early Close/Trading
Halt Risk, Authorized Participant/AP Representative Concentration Risk, Market
Trading Risk, and Premium/Discount Risk in the Principal Risks section of this
Prospectus.
The Securities and
Exchange Commission has not determined if the information in this Prospectus is
accurate or complete, nor has it approved or disapproved these securities. It is
a criminal offense to represent otherwise.
Prospectus 2/26
Summary
Sections
(fees paid directly from your investment)
|
|
Alger
Mid
Cap 40 ETF |
|
|
|
(expenses that you pay each year as a percentage of the value of your investment)
|
|
Alger
Mid Cap 40
ETF |
|
Management
Fees |
|
|
Distribution
and/or Service (12b-1) Fees* |
|
|
Other
Expenses |
|
|
Total
Annual Fund Operating Expenses |
|
|
Fee
Waiver and/or Expense Reimbursement** |
( |
|
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement |
|
*
**
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Alger
Mid Cap 40 ETF |
$ |
$ |
$ |
$ |
Prospectus 3/26
Prospectus 4/26
Prospectus 5/26
Prospectus 6/26
Management
|
Investment
Manager |
Portfolio
Manager Primarily Responsible for Day-to-Day Management of the
Fund |
|
Fred
Alger Management, LLC |
Amy
Y. Zhang, CFA
Executive
Vice President and Portfolio Manager
Since
Inception (February 2021) |
Shareholder
Information
Purchasing
and Redeeming Fund Shares
Individual Fund
shares may only be bought and sold in the secondary market through a broker or
dealer at a market price. Because ETF shares trade at market prices rather than
NAV, shares may trade at a price greater than NAV (premium) or less than NAV
(discount). An investor may incur costs attributable to the difference between
the highest price a buyer is willing to pay to purchase shares of the Fund (bid)
and the lowest price a seller is willing to accept for shares of the Fund (ask)
when buying or selling shares in the secondary market (the “bid-ask spread”).
Once the Fund commences operations, recent information, including information on
the Fund’s NAV, market price, premiums and discounts, and bid-ask spreads, will
be available on the Fund’s website at www.alger.com.
Tax
Information
The Fund’s
distributions may be taxable as ordinary income or capital gains. The Fund is
actively managed, and as a result, investors may receive capital gains
distributions annually.
Payments
to Broker-Dealers and Other Financial Intermediaries
If you purchase the
Fund through a broker-dealer or other financial intermediary (such as if your
account is held at a bank), the Manager or the Fund’s distributor may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your financial professional to recommend the Fund over another
investment. Ask your financial professional or visit your financial
intermediary’s website for more information.
Prospectus 7/26
(fees paid directly from your investment)
|
|
Alger
35 ETF |
|
|
|
(expenses that you pay each year as a percentage of the value of your investment)
|
|
Alger 35
ETF |
|
Management
Fees |
|
|
Distribution
and/or Service (12b-1) Fees* |
|
|
Other
Expenses |
|
|
Total
Annual Fund Operating Expenses |
|
|
Fee
Waiver and/or Expense Reimbursement** |
( |
|
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement |
|
*
**
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Alger
35 ETF |
$ |
$ |
$ |
$ |
Prospectus 8/26
Prospectus 9/26
Prospectus 10/26
Management
|
Investment
Manager |
Portfolio
Manager Primarily Responsible for Day-to-Day Management of the
Fund |
|
Fred
Alger Management, LLC |
Dan
C. Chung, CFA
Chief
Executive Officer, Chief Investment Officer and Portfolio
Manager
Since
Inception (May
2021) |
Prospectus 11/26
Shareholder
Information
Purchasing
and Redeeming Fund Shares
Individual Fund
shares may only be bought and sold in the secondary market through a broker or
dealer at a market price. Because ETF shares trade at market prices rather than
NAV, shares may trade at a price greater than NAV (premium) or less than NAV
(discount). An investor may incur costs attributable to the difference between
the highest price a buyer is willing to pay to purchase shares of the Fund (bid)
and the lowest price a seller is willing to accept for shares of the Fund (ask)
when buying or selling shares in the secondary market (the “bid-ask spread”).
Once the Fund commences operations, recent information, including information on
the Fund’s NAV, market price, premiums and discounts, and bid-ask spreads, will
be available on the Fund’s website at www.alger.com.
Tax
Information
The Fund’s
distributions may be taxable as ordinary income or capital gains. The Fund is
actively managed, and as a result, investors may receive capital gains
distributions annually.
Payments
to Broker-Dealers and Other Financial Intermediaries
If you purchase the
Fund through a broker-dealer or other financial intermediary (such as if your
account is held at a bank), the Manager or the Fund’s distributor may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your financial professional to recommend the Fund over another
investment. Ask your financial professional or visit your financial
intermediary’s website for more information.
Prospectus 12/26
Investment
Objectives, Principal Investment Strategies and Related Risks
The investment
objective, principal strategy and primary risks of each Fund are discussed
individually in each Fund’s Summary Section in this Prospectus. Alger Mid Cap 40
ETF has adopted a policy to invest at least 80% of its assets in specified
securities appropriate to its name (as described in the Fund’s Summary Section
in this Prospectus) and to provide its shareholders with at least 60 days’ prior
notice of any change with respect to this policy. Each Fund’s investment
objective is a non-fundamental investment policy and may be changed by the Board
of Trustees (the “Board”) of The Alger ETF Trust (the “Trust”) without
shareholder approval. Each Fund will provide its shareholders with at least 60
days’ prior notice of any change to its investment objective. A Fund may, from
time to time, take temporary defensive positions that are inconsistent with the
Fund’s principal investment strategies in attempting to respond to adverse
market, economic, political, or other conditions. A Fund may not achieve its
investment objective while in a temporary defensive position.
Each Fund is a
non-diversified and non-transparent, actively managed ETF that does not seek to
replicate the performance of a specified index. A Fund’s past performance
(before and after taxes) is not necessarily an indication of how it will perform
in the future.
Additional
Information About the Funds’ Investment Strategies and Investments
Investment
Objectives
Each of the Funds
seeks long-term capital appreciation.
Principal
Investment Strategies
The following are
each Fund’s investment process and principal investment strategies. Each Fund
may invest in other securities that are not its principal strategy, and such
strategies and related risks are described in more detail in the Fund’s
Statement of Additional Information (“SAI”).
Each Fund invests
primarily in equity securities. Each Fund’s investments in equity securities are
primarily in common or preferred stocks, including convertible preferred
securities, and American Depositary Receipts. Each Fund invests in companies
whose securities are traded on a national securities exchange registered with
the SEC, and trade contemporaneously with the Fund’s shares. As noted in each
Fund's Summary Section in this Prospectus, the Funds operate in reliance on the
Order from the SEC, which limits the types of investments the Funds may hold to
those listed in the Funds' application for the Order.
Each Fund invests
primarily in “growth” stocks. The Funds’ investment manager, Fred Alger
Management, LLC (the “Manager”), believes that these companies tend to fall into
one of two categories:
•
High
Unit Volume Growth
Vital, creative companies that offer goods or services to a rapidly expanding marketplace. They include both established and emerging firms, exercising market dominance, offering new or improved products, or simply fulfilling an increased demand for an existing product line.
Vital, creative companies that offer goods or services to a rapidly expanding marketplace. They include both established and emerging firms, exercising market dominance, offering new or improved products, or simply fulfilling an increased demand for an existing product line.
•
Positive
Life Cycle Change
Companies experiencing a major change which is expected to produce advantageous results. These changes may be as varied as new management, products or technologies; restructuring or reorganization; regulatory change; or merger and acquisition.
Companies experiencing a major change which is expected to produce advantageous results. These changes may be as varied as new management, products or technologies; restructuring or reorganization; regulatory change; or merger and acquisition.
Alger Mid Cap 40 ETF
must take into account a company’s market capitalization when considering it for
investment. The market capitalization of a company is its price per share
multiplied by its number of outstanding shares.
ESG
Integration
Although a Fund does
not seek to implement a specific environmental, social and governance (“ESG”),
impact or sustainability strategy unless otherwise disclosed, the Manager has
sought to integrate ESG considerations into its investment process through the
use of both third-party ESG specific information and its own proprietary
research. Specifically, with respect to 75% of its assets under management, the
Manager evaluates a company’s ESG factors and, based on such factors, may engage
with the company to (i) identify drivers of poor ESG metrics; (ii) interview
management with key questions about ESG issues; and (iii) evaluate the prospect
of positive ESG change within a company. Upon conclusion of this engagement, a
report is published to the Manager’s research database to ensure that all
portfolio managers have access to the report summarizing the company’s ESG
issues, the results of any meeting/interview with the company, an ESG rating of
the company and any other relevant factors. The author of each report will meet
with portfolio managers as necessary to discuss the ESG report and the impact
the report may have on the overall investment view of the company.
The Manager may
change the sources for such ESG information, including by adding or modifying
the information it receives from third-party firms, selecting different
third-party firms, using company-provided information, or performing different
or additional
Prospectus 13/26
internal assessments. To assist with
efforts to incorporate ESG considerations into the investment process, all of
the Manager’s investment professionals have access to company-specific ESG
reports. The Manager has established an ESG steering committee comprised of
executive management and senior investment professionals to oversee this
process.
ESG characteristics
are not the sole considerations when making investment decisions for a Fund.
Further, investors can differ in their views of what constitutes positive or
negative ESG characteristics. As a result, a Fund may invest in issuers that do
not reflect the beliefs and values with respect to ESG of any particular
investor. ESG considerations may affect a Fund’s exposure to certain companies
or industries and a Fund may forego certain investment opportunities. While the
Manager views ESG considerations as having the potential to contribute to a
Fund’s long-term performance, there is no guarantee that such results will be
achieved.
Principal
Risks
This section contains
a discussion of the general risks of investing in the Funds. The “Investment
Strategies and Policies” section in the SAI also includes more information about
the Funds and their investments and the related risks. An investment in the
Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation
or by any bank or governmental agency. As with any fund, an investment in the
Funds involves risks. Each risk noted below is applicable to each Fund unless
the specific Fund or Funds are noted in a parenthetical.
Non-Transparent
ETF Structure Risk
Unlike most ETFs, the
Funds do not provide daily disclosure of their portfolio holdings. Instead, the
Funds provide a VIIV, calculated and disseminated every second throughout the
trading day. The VIIV is intended to provide investors and other market
participants with enough information to allow for an effective arbitrage
mechanism that will attempt to keep the market price of the Fund at or close to
the underlying NAV per share of the Fund. There is, however, a risk that shares
of the Funds may trade at a wider bid/ask spread than ETFs that publish their
portfolio holdings daily, especially during periods of market disruption or
volatility, and therefore, may cost investors more to trade. There is also a
risk that the market price may vary significantly from the VIIV and, thus, the
underlying value of the Funds. There is also a risk that, despite not disclosing
the portfolio holdings each day, some market participants may seek to use
publicly available information, including the VIIV, to identify the Funds’
investment strategies and engage in certain predatory trading practices that may
have the potential to harm the Funds.
Trading
Issues Risk
Trading in Fund
shares on the Listing Exchange may be halted in certain circumstances. If at any
time the securities representing 10% or more of a Fund’s portfolio become
subject to a trading halt or otherwise do not have readily available market
quotations, the Manager will request the Listing Exchange to halt trading of the
Fund. There may be other instances that require a trading halt specific to the
VIIV. If there is a discrepancy of sufficient magnitude in a Fund’s VIIV
calculation, the Manager will request the Listing Exchange to halt trading. This
“circuit breaker” is designed to prevent the VIIV from reflecting outlier
prices.
Early
Close/Trading Halt Risk
An exchange or market
may close early or issue trading halts on portfolio securities. In times of
market volatility, if trading is halted in some of the securities that a Fund
holds, there may be a disconnect between the market price of those securities
and the market price of a Fund. If at any time the securities representing 10%
or more of a Fund’s portfolio become subject to a trading halt or otherwise do
not have readily available market quotations, the Manager will request the
Listing Exchange to halt trading on a Fund, meaning that investors would not be
able to trade their shares. During any such trading halt, the VIIV would
continue to be calculated and disseminated. Trading halts may have a greater
impact on a Fund than traditional ETFs because of its lack of transparency.
Additionally, the Manager monitors the bid and ask quotations for the securities
a Fund holds, and, if it determines that such a security does not have readily
available market quotations (such as during an extended trading halt), it will
post that fact and the name and weighting of that security in a Fund’s VIIV
calculation on the Fund’s web site. This information should permit market
participants to calculate the effect of that security on the VIIV calculation,
determine their own fair value of the disclosed portfolio security, and better
judge the accuracy of that day’s VIIV for a Fund. An extended trading halt in a
portfolio security could exacerbate discrepancies between the VIIV and a Fund’s
NAV.
Authorized
Participant / AP Representative Concentration Risk
The creation and
redemption process for a Fund occurs through a Confidential Account with an AP
Representative on behalf of an Authorized Participant. Each day, the AP
Representative will be given the Basket, allowing the AP Representative to buy
and sell positions in the portfolio securities to permit creations or
redemptions on the Authorized Participant’s behalf, without disclosing the
information to the Authorized Participant. A Fund may have a limited number of
institutions that act as Authorized Participants and AP Representatives, none of
which are obligated to engage in creation or redemption transactions. To the
extent that these institutions exit the business or are unable to proceed with
creation and/or redemption orders with respect to a Fund and no other Authorized
Participant is able to step forward to process creation and/or redemption
orders, Fund shares may trade at a discount
Prospectus 14/26
to NAV and possibly
face trading halts and/or delisting. This risk may be more pronounced in
volatile markets, potentially where there are significant redemptions in ETFs
generally. The fact that a Fund is offering a novel and unique structure may
result in fewer entities willing to act as Authorized Participants and AP
Representatives. During times of market stress, Authorized Participants may be
more likely to step away from this type of ETF than a traditional
ETF.
Market
Trading Risk
Although shares of
the Funds are listed for trading on one or more stock exchanges, there can be no
assurance that an active trading market for such shares will develop or be
maintained. There are no obligations of market makers to make a market in a
Fund’s shares or of an AP to submit purchase or redemption orders for shares at
NAV in aggregations of a specified number of shares (a “Creation Unit”).
Decisions by market makers or APs to reduce their role or step away from these
activities in times of market stress could inhibit the effectiveness of the
arbitrage process in maintaining the relationship between the underlying value
of a Fund’s portfolio securities and a Fund’s market price. This reduced
effectiveness could result in Fund shares trading at a premium or discount to
its NAV. For at least the first three years after launch of each Fund, the Board
will promptly meet if, for 30 or more days in any quarter or 15 days in a row,
the absolute difference between either the market closing price or the bid/ask
price, on one hand, and NAV, on the other, exceeds 1.00% or the bid/ask spread
exceeds 1.00%. In such a circumstance, the Board will consider the continuing
viability of each Fund, whether shareholders are being harmed, and what, if any,
action would be appropriate to among other things, narrow the premium/discount
or spread, as applicable. The Board will then decide whether to take any such
action. Potential actions may include, but are not limited to, changing lead
market makers, listing a Fund on a different exchange, changing the size of
Creation Units, changing a Fund’s investment objective or strategy, and
liquidating a Fund.
Secondary market
trading in Fund shares may be halted by a stock exchange because of market
conditions or other reasons and may be subject to trading halts caused by
extraordinary market volatility pursuant to “circuit breaker” rules on the stock
exchange or market. There can be no assurance that the requirements necessary to
maintain the listing or trading of Fund shares will continue to be met or will
remain unchanged. In addition, during a “flash crash,” the market prices of the
Funds’ shares may decline suddenly and significantly. Such a decline may not
reflect the performance of the portfolio securities held by the Funds. Flash
crashes may cause APs and other market makers to limit or cease trading in the
Funds’ shares for temporary or longer periods. Shareholders could suffer
significant losses to the extent that they sell Fund shares at these temporarily
low market prices.
When buying or
selling shares of the Funds through a broker, you may incur a brokerage
commission or other charges determined by your broker. In addition, you may
incur the cost of the “spread,” that is, any difference between the bid price
and the ask price. The spread varies over time for shares of the Funds based on
the Funds’ trading volume and market liquidity and is generally lower if the
Funds have a lot of trading volume and market liquidity, and higher if the Funds
have little trading volume and market liquidity. During times of market stress,
spreads may widen causing investors to pay more.
Premium/Discount
Risk
Shares of the Funds
are listed for trading on the Listing Exchange and are bought and sold in the
secondary market at market prices that may differ from their most recent NAV.
The market value of the Funds’ shares will fluctuate, in some cases materially,
in response to changes in the Fund’s NAV, the intraday value of the Fund’s
holdings, and the relative supply and demand for the Fund’s shares on the
Listing Exchange. Although the Funds are intended to provide investors with
enough information to allow for an effective arbitrage mechanism that will keep
the market price of the Funds at or close to each Fund’s NAV, there is a risk
(which may increase during periods of market disruption or volatility) that
market prices for Fund shares will vary significantly from each Fund’s NAV. This
risk may be greater for the Funds than for traditional ETFs that disclose their
full portfolio holdings on a daily basis because the publication of the VIIV
does not provide the same level of transparency as the publication of the full
portfolio by a fully transparent active ETF. This could cause the Funds’ shares
to have wider bid/ask spreads and larger premiums/discounts than fully
transparent ETFs using the same investment strategies. During such periods, you
may be unable to sell your shares or may incur significant losses if you sell
your shares. There are various methods by which investors can purchase and sell
shares and various types of orders that may be placed. Investors should consult
their financial intermediary before purchasing or selling shares of the Funds.
If a shareholder purchases shares at a time when the market price is at a
premium to the NAV or sells shares at a time when the market price is at a
discount to the NAV, the shareholder may sustain losses. The Funds cannot
predict whether shares will trade above (premium), below (discount) or at
NAV.
Investment
Risk
An investment in a
Fund is subject to investment risk, including the possible loss of the entire
principal amount that you invest.
Market
Risk
Your investment in
Fund shares represents an indirect investment in the securities owned by a Fund.
The value of these securities, like other investments, may move up or down,
sometimes rapidly and unpredictably. Local, regional or global events such as
environmental or natural disasters, war, terrorism, pandemics, outbreaks of
infectious diseases, and similar public health threats,
Prospectus 15/26
recessions, or other
events could have a significant impact on a Fund and its investments and
could result in increased premiums or discounts to a Fund’s NAV.
Mid
Cap Securities Risk
There may be greater
risk in investing in medium-capitalization companies rather than larger, more
established companies due to such factors as inexperienced management and
limited product lines or financial resources. It may also be difficult or
impossible to liquidate a security position at a time and price acceptable to
the Fund because of the potentially less frequent trading of stocks of smaller
market capitalization.
Small
Cap Securities Risk (Alger 35 ETF)
There may be greater
risk investing in small capitalization companies rather than larger, more
established companies owing to such factors as more limited product lines or
financial resources or lack of management depth. They may be less financially
secure than larger, more established companies. They may depend on a small
number of key personnel. If a product fails, there are other adverse
developments, or if management changes, a Fund’s investment in a small cap
company may lose substantial value. In addition, it is more difficult to get
information on smaller companies, which tend to be less well known, have shorter
operating histories, do not have significant ownership by large investors and
are followed by relatively few securities analysts. The securities of small cap
companies generally trade in lower volumes and are subject to greater and more
unpredictable price changes than larger cap securities or the market as a whole.
In addition, it may be difficult or impossible to liquidate a security position
at a time and price acceptable to a Fund because of the potentially less
frequent trading of stocks of smaller market capitalization. Small cap
securities may be particularly sensitive to changes in interest rates, borrowing
costs and earnings. Investing in small cap securities requires a longer term
view.
Equity
Securities Risk
As with any fund that
invests in stocks, your investment will fluctuate in value, and the loss of your
investment is a risk of investing. Each Fund’s price per share will fluctuate
due to changes in the market prices of its investments. Because stock markets
tend to move in cycles, stock prices overall may decline. A particular stock’s
market value may decline as a result of general market conditions that are not
related to the issuing company (e.g., adverse economic
conditions or investor sentiment) or due to factors that affect the particular
company (e.g., management
performance or factors affecting the industry). Also, a Fund’s investments may
not grow as fast as the rate of inflation and stocks tend to be more volatile
than some other investments you could make, such as bonds.
Small
Number of Holdings Risk
A Fund’s performance
may be more vulnerable to changes in the market value of a single issuer and
more susceptible to risks associated with a single economic, political, or
regulatory occurrence than a fund that has a higher number of holdings. At
times, the performance of shares of particular companies will lag the
performance of other sectors or the market as a whole. This risk is magnified
when a fund has a small number of holdings. Generally, the more broadly a fund
invests, the more it spreads its risks and potentially reduces the risk of loss
and volatility.
Growth
Stocks Risk
Prices of growth
stocks tend to be higher in relation to their companies’ earnings and may be
more sensitive to market, political and economic developments than other stocks,
making their prices more volatile. An investment in a Fund may be better suited
to investors who seek long-term capital growth and can tolerate fluctuations in
their investment’s value. Expected growth may not be realized.
Non-Diversification
Risk
Each Fund is a
non-diversified investment company. As such, each Fund can invest in fewer
individual companies than a diversified investment company. As a result, each
Fund’s performance may be more vulnerable to changes in the market value of a
single issuer and more susceptible to risks associated with a single economic,
political, or regulatory occurrence than a fund that has a diversified
portfolio. This risk is magnified compared to a fund that invests more
broadly.
Sector
Risk
Each Fund may have a
significant portion of its assets invested in securities of companies conducting
business within a single sector. Companies in the same sector may be similarly
affected by economic, regulatory, political or market events or conditions,
which may make a Fund more vulnerable to unfavorable developments in that sector
than a fund that has a more diversified portfolio. Generally, the more broadly a
Fund invests, the more it spreads risk and potentially reduces the risks of loss
and volatility.
Prospectus 16/26
•
Consumer
Discretionary Sector Risk – The success of consumer product manufacturers and
retailers is tied closely to the performance of domestic and international
economies, interest rates, exchange rates, competition, consumer confidence,
changes in demographics and consumer preferences. Companies in the consumer
discretionary sector depend heavily on disposable household income and consumer
spending, and may be strongly affected by social trends and marketing campaigns.
These companies may be subject to severe competition, which may have an adverse
impact on their profitability.
•
Health Care Sector
Risk – A Fund may be more susceptible to particular risks that may affect
companies in the health care sector than if it were invested in a wider variety
of companies in unrelated sectors. At times, the performance of such companies
will lag the performance of other industries or the broader market as a whole,
and the performance of such companies may be more volatile. The healthcare field
is subject to substantial governmental regulation and may, therefore, be
adversely affected by changes in governmental policies. These factors may lead
to limited earnings and/or failing profit margins. As a result, the value of
healthcare companies’ securities may fall or fail to rise. In addition,
companies in the health care sector can be significantly affected by intense
competition, aggressive pricing, technological innovations, product
obsolescence, patent considerations, product compatibility and consumer
preferences.
•
Industrials Sector
Risk – A Fund may have a significant portion of its assets invested in
securities of companies in the industrials sector. Industrial
companies are affected by supply and demand both for their specific product or
service and for industrials sector products in
general. Government regulation, world events, exchange rates and economic
conditions, technological developments and liabilities for environmental damage
and general civil liabilities will likewise affect the performance of these
companies. Aerospace and defense companies, a component of the industrials
sector, can be significantly affected by government spending policies because
companies involved in this industry rely, to a significant extent, on U.S. and
foreign government demand for their products and services.
•
Information
Technology Sector Risk – A Fund may be more susceptible to particular risks that
may affect companies in the information technology sector and technology-related
sectors than if it were invested in a wider variety of companies in unrelated
sectors. At times, the performance of such companies will lag the performance of
other industries or the broader market as a whole. Certain technology related
companies may face special risks that their products or services may not prove
to be commercially successful. Technology related companies are also strongly
affected by worldwide scientific or technological developments. As a result,
their products may rapidly become obsolete. Such companies are also often
subject to governmental regulation and may, therefore, be adversely affected by
governmental policies. These factors may lead to limited earnings and/or failing
profit margins. As a result, the value of technology related companies’
securities may fall or fail to rise. Many technology related companies’
securities have historically been more volatile than other securities,
especially over the short term.
Portfolio
Turnover (Active Trading) Risk (Alger Mid Cap 40 ETF)
Because the Fund may
engage in active trading of portfolio securities, it may incur increased
transaction costs and brokerage commissions, both of which can lower the actual
return on an investment. Active trading may also increase short-term gains and
losses, which may affect the taxes a shareholder has to pay.
Temporary
Defensive Investments Risk
In times of adverse
or unstable market, economic or political conditions, a Fund may invest up to
100% of its assets in cash and cash equivalents (i.e., short-term U.S. Treasury
securities, government money market funds and repurchase agreements) for
temporary defensive reasons. This is to attempt to protect a Fund’s assets from
a temporary, unacceptable risk of loss, rather than directly to promote the
Fund’s investment objective; however, it could reduce the benefit from any
upswing in the market. A Fund may not achieve its investment objective, and a
Fund’s investments may not be consistent with its principal investment
strategies, while in a temporary defensive position.
Prospectus 17/26
Management
and Organization
Manager
Fred Alger
Management, LLC
100 Pearl Street, 27th Floor
New York, NY 10004
100 Pearl Street, 27th Floor
New York, NY 10004
The Manager has been
an investment adviser since 1964, and manages investments totaling (at December
31, 2021) approximately $43.8 billion. The Manager is responsible for providing
a continuous investment program for each Fund, making decisions with respect to
all purchases and sales of assets, and placing orders for the investment and
reinvestment of Fund assets. The Manager also arranges for transfer agency,
custody and all other services necessary for each Fund to operate. Additionally,
the Manager provides certain administrative services to the Funds. These
management responsibilities are subject to the supervision of the Board. A
discussion of the Trustees’ basis for approving the management contract with
respect to each Fund is available in the Funds’ semi-annual report to
shareholders for its most recent June 30 fiscal period. The Funds pay the
Manager management fees at the below annual rates based on a percentage of
average daily net assets. The actual rate paid as a percentage of average daily
net assets, for the fiscal year ended December 31, 2021, is set forth below
under the heading “Actual Rate.”
|
Fund |
Annual
Fee as a Percentage of Average Daily Net Assets |
Actual
Rate |
|
Alger
Mid Cap 40 ETF |
.50% |
.50% |
|
Alger
35 ETF |
.45% |
.45% |
The Manager has made
contractual commitments to each Fund to waive its fee and/or reimburse the Fund
for expenses to the extent necessary to maintain the Fund’s total annual
operating expenses at or below certain levels. The limitations do not apply to
acquired fund fees and expenses, taxes, brokerage and extraordinary expenses, to
the extent applicable. Each agreement runs through April 30, 2023 and may only
be amended or terminated prior to its expiration date by agreement between the
Manager and the Board, and will terminate automatically in the event of
termination of the Investment Management Agreement. Such waiver/reimbursement
arrangements are as follows: Alger Mid Cap 40 ETF – 0.60%; Alger 35 ETF – 0.55%.
The Manager may, during the term of the contract, recoup any fees waived or
expenses reimbursed pursuant to the contract; however, a Fund will only make
repayments to the Manager if such repayment does not cause a Fund’s expense
ratio after the repayment is taken into account, to exceed both (i) the expense
cap in place at the time such amounts were waived or reimbursed, and (ii) a
Fund’s current expense cap. Such recoupment is limited to two years from the
date the amount is initially waived or reimbursed.
Portfolio
Managers Responsible for Day-to-Day Management of the Funds
|
Fund |
Portfolio
Managers |
Since |
|
Alger
Mid Cap 40 ETF |
Amy
Y. Zhang, CFA |
Inception
(February
2021) |
|
Alger
35 ETF |
Dan
C. Chung, CFA |
Inception
(May 2021) |
•
Mr. Chung has been
employed by the Manager since 1994. He became a portfolio manager in 2000, Chief
Investment Officer in 2001, President in 2003, and Chief Executive Officer in
2006.
•
Ms. Zhang has been
employed by the Manager since 2015 as portfolio manager. She became an Executive
Vice President in 2020 and was previously Senior Vice President. Prior to
joining the Manager, she was a Managing Director and Senior Portfolio Manager at
Brown Capital Management, Inc. from 2002 to 2015.
The SAI provides
additional information about the portfolio managers’ compensation, other
accounts that they manage, and their ownership of securities of the Fund(s) that
they manage.
Investing
in the Funds
Buying
and Selling Shares
Shares of the Funds
may be acquired or redeemed directly from the Funds only in Creation Units or
multiples thereof. Only an Authorized Participant may engage in creation and
redemption transactions directly with a Fund. Once created, shares of the Funds
generally trade in the secondary market in amounts less than a Creation Unit.
Individual Fund shares may only be bought and sold in the secondary market
through a broker or dealer at market price.
Shares of the Funds
are listed on the Listing Exchange, a national securities exchange, for trading
during the trading day. Shares can be bought and sold throughout the trading day
like shares of other publicly traded companies. The Trust does not impose any
minimum investment for shares of the Funds purchased on an exchange.
Prospectus 18/26
The Funds’ primary
listing exchange is NYSE Arca, Inc., which is open for trading Monday through
Friday and is closed on weekends and the following holidays: New Year’s Day,
Martin Luther King, Jr. Day, Washington’s Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Additional
information regarding the purchase and redemption of Fund shares can be found in
the “Creation and Redemption of Creation Units” section of the SAI.
Book
Entry
Shares of the Funds
are held in book-entry form, which means that no share certificates are issued.
The Depository Trust Company (“DTC”) or its nominee is the record owner of all
outstanding shares of the Funds.
Investors owning
shares of the Funds are beneficial owners as shown on the records of DTC or its
participants. DTC serves as the securities depository for shares of the Funds.
DTC participants include securities brokers and dealers, banks, trust companies,
clearing corporations and other institutions that directly or indirectly
maintain a custodial relationship with DTC. As a beneficial owner of shares, you
are not entitled to receive physical delivery of stock certificates or to have
shares registered in your name, and you are not considered a registered owner of
shares. Therefore, to exercise any right as an owner of shares, you must rely
upon the procedures of DTC and its participants. These procedures are the same
as those that apply to any other securities that you hold in book-entry or
“street name” form.
Frequent
Trading
The Board has not
adopted a policy of monitoring for frequent purchases and redemptions of Fund
shares. The Board believes that a frequent trading policy is unnecessary because
Fund shares are listed for trading on a national securities exchange. Therefore,
it is unlikely that a shareholder could take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Funds’
portfolio securities after the close of the primary markets for the Funds’
portfolio securities and the reflection of that change in the Funds’ NAVs,
because the Funds generally sell and redeem their shares directly through
transactions that are in-kind and/or for cash, subject to the conditions
described in the “Creation and Redemption of Creation Units” section of the
SAI.
Investments
by Other Investment Companies
Section 12(d)(1) of
the Investment Company Act of 1940, as amended (the “1940 Act”) restricts
investments by investment companies in the securities of other investment
companies. Registered investment companies are permitted to invest in the Funds
beyond the limits set forth in Section 12(d)(1), subject to certain terms and
conditions set forth in SEC rules. In order for an unaffiliated registered
investment company to invest in shares of the Funds beyond the limitations of
Section 12(d)(1) pursuant to Rule 12d1-4 under the 1940 Act, the registered
investment company must, among other items, enter into an agreement with the
Trust.
Share
Price and Distributions
Share
Price
The secondary market
price of shares trading on the Listing Exchange is based on a current bid/ask
market. The secondary market price of a Fund’s shares generally differs from a
Fund’s daily NAV and, like the price of all traded securities, is affected by
market forces such as supply and demand, economic conditions and other factors
such as the current VIIV (described below).
Because the shares
are traded in the secondary market, a broker may charge a commission to execute
a transaction in shares, and an investor also may incur the cost of the spread
between the price at which a dealer will buy shares and the somewhat higher
price at which a dealer will sell shares.
The
Verified Intraday Indicative Value
Information regarding
the intraday value of shares of the Funds, also known as the VIIV, is calculated
and disseminated every second throughout each trading day by the Listing
Exchange or by market data vendors or other information providers. It is
available on alger.com and on websites that publish updated market quotations
during the trading day, like Yahoo Finance (https://finance.yahoo.com), by
searching for a Fund’s ticker plus the extension IV, though some websites
require their own unique extensions. The VIIV is based on the current market
value of the securities in a Fund’s portfolio that day. The VIIV is intended to
provide investors and other market participants with a highly correlated per
share value of the underlying portfolio that can be compared to the current
market price. To calculate the VIIV, the Funds employ two separate calculation
engines to provide two independently calculated sources of intraday indicative
values (calculation engines). The Funds then use a pricing verification agent to
continuously compare the data from both the calculations engines on a real time
basis. If during the process of real time price verification, the indicative
values from the calculation engines differ by more than 25 basis points for 60
consecutive
Prospectus 19/26
seconds, the pricing
verification agent will alert the Manager, which will request that the Listing
Exchange halt trading of a Fund’s shares until the two indicative values come
back into line.
The Funds have
adopted policies and procedures concerning the calculation of their VIIV. In
accordance with these procedures, the portfolio used for calculating the VIIV
will be the same portfolio used to calculate the Fund’s NAV for that business
day. The VIIV will be calculated to the nearest penny by dividing the “Intraday
Fund Value” as of the time of the calculation by the number of total Fund shares
outstanding. Intraday Fund Value is the sum of a Fund’s assets (e.g., the amount
of cash and cash equivalents held in a Fund’s portfolio, the current value of
the securities positions in the Fund’s portfolio, plus any accrued interest, and
declared but unpaid dividends) minus all accrued liabilities. All portfolio
securities will be valued by the calculation engines throughout the trading day
at the mid-point between the current national best bid and national best offer
as disseminated by the Consolidated Quotation System or UTP Plan Securities
Information Processor.
Although the VIIV is
intended to provide investors with enough information to allow for an effective
arbitrage mechanism that will keep the market price of the Funds at or close to
the underlying NAV per share of the Funds, there is a risk (which may increase
during periods of market disruption or volatility) that market prices will vary
significantly from the underlying NAV of the Funds. ETFs trading on the basis of
a published VIIV may trade at a wider bid/ask spread than ETFs that publish
their portfolios on a daily basis, especially during periods of market
disruption or volatility, and therefore, may cost investors more to trade.
Although the Funds seek to benefit from not disclosing its portfolio information
daily, market participants may attempt to use the VIIV to identify a Fund’s
trading strategy, which if successful, could result in such market participants
engaging in certain predatory trading practices that may have the potential to
harm the Fund and its shareholders.
If at any time 10% or
more of the securities in a Fund’s portfolio become subject to a trading halt or
otherwise do not have readily available market quotations, the Manager will ask
the Listing Exchange to halt trading of a Fund. Trading halts may have a greater
impact on these Funds compared to other ETFs because it is less
transparent.
Net
Asset Value
The value of one
share is its net asset value, or “NAV.” Each Fund values its financial
instruments at fair value using independent dealers or pricing services under
policies approved by the Board. Investments held by the Funds are valued on each
day the New York Stock Exchange (the “NYSE”) is open, as of the close of the
NYSE (normally 4:00 p.m. Eastern Time).
NAV
of a Fund is computed by adding together the value allocable to a Fund’s
investments plus cash and other assets, subtracting applicable liabilities and
then dividing the result by the number of outstanding shares of the
Fund.
Investments in money
market funds and short-term securities held by a Fund with maturities of 60 days
or less are valued at their amortized cost which does not take into account
unrealized capital gains or losses and approximates market value.
Equity securities are
valued at the last quoted sales price or official closing price on the primary
market or exchange on which they are traded as reported by an independent
pricing service. In the absence of quoted sales, such securities are valued at
the bid price or, in the absence of a recent bid price, the equivalent as
obtained from one or more of the major market makers for the securities to be
valued.
Securities for which
market quotations are not readily available are valued at fair value pursuant to
procedures approved by the Board.
Each Fund’s valuation
techniques are generally consistent with either the market or the income
approach to fair value. The market approach considers prices and other relevant
information generated by market transactions involving identical or comparable
assets to measure fair value. The income approach converts future amounts to a
current, or discounted, single amount. These fair value measurements are
determined on the basis of the value indicated by current market expectations
about such future events. Because of the inherent uncertainty and often limited
markets for restricted securities, the valuations assigned to such securities by
a Fund may significantly differ from the valuations that would have been
assigned by the Fund had there been an active market for such
securities.
Valuation processes
are determined by a Valuation Committee (“Valuation Committee”) authorized by
the Board and comprised of representatives of the Manager and officers of the
Trust. The Valuation Committee reports its fair valuation determinations and
related valuation information to the Board. The Board is responsible for
approving the valuation policy and procedures. While the meetings are held on an
as-needed basis, the Valuation Committee generally meets quarterly to review and
evaluate the effectiveness of the procedures for making fair value
determinations. The Valuation Committee considers, among other things, pricing
comparisons between primary and secondary price sources, the outcome of price
challenges put to each Fund’s pricing vendor, and variances between
transactional prices and the previous day’s price.
The Funds’ website,
which is publicly accessible at no charge, contains, on a per share basis, the
prior business day’s NAV and market closing price or bid/ask price of the
shares, a calculation of the premium or discount of the market closing price or
bid/ask
Prospectus 20/26
price against such NAV, and any other
required information about premiums and discounts. The website also discloses
the Funds’ median bid/ask spread information for the most recent 30-day period
on a rolling basis.
Taxes
The following
discussion is a very general summary of the federal income tax consequences of
holding shares in the Funds. This summary applies only to shareholders that are
U.S. residents for tax purposes and hold their shares as capital assets. This
summary does not address shareholders subject to special rules, such as those
who hold shares of a Fund through an IRA, 401(k) plan, or other tax-advantaged
account, or non-U.S. shareholders. The discussion is limited to federal income
tax matters, and does not address state, local, foreign or non-income taxes.
Further information regarding tax considerations applicable to the Funds, to
their qualification and taxation as regulated investment companies for U.S.
federal income tax purposes, and to the acquisition, ownership, and disposition
of shares in the Funds is included in the SAI. Because each shareholder’s
circumstances are different and special tax rules may apply, shareholders should
consult their tax advisors about federal, state, local, foreign and non-income
tax considerations that may be relevant to their particular
situation.
Distributions
The Funds declare and
pay dividends and distributions annually. Distributions of net capital gain
reported by the Funds as capital gain dividends are taxable to shareholders as
long-term capital gain regardless of how long a shareholder has owned its
shares. Noncorporate shareholders ordinarily pay tax at reduced rates on
long-term capital gain. Distributions of investment income that the Funds report
as “qualified dividend income” may be eligible to be taxed to noncorporate
shareholders at the reduced rates applicable to long-term capital gain if
certain requirements are satisfied.
If a Fund’s
distributions exceed current and accumulated earnings and profits, the excess
will generally be considered a return of capital. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and will result in a higher capital gain or lower capital loss when
those shares on which the distribution was received are sold. Once a
shareholder's cost basis is reduced to zero, further distributions will be
treated as capital gain.
A shareholder may
want to avoid buying shares shortly before a Fund is about to declare a dividend
or capital gain distribution because the dividend or distribution will be
taxable to the shareholder even though it may economically represent a return of
a portion of the shareholder’s investment.
Sale
of Shares of a Fund
Capital gain or loss
realized upon a sale of shares of a Fund generally is treated as long-term gain
or loss if the shares have been held for more than one year. Any capital gain or
loss realized upon a sale of shares of a Fund held for one year or less
generally is treated as short-term gain or loss, except that any capital loss on
the sale of shares held for six months or less is treated as long-term capital
loss to the extent that capital gain dividends were paid with respect to those
shares.
If a loss is realized
on the sale of shares of a Fund, the reinvestment in additional shares of that
Fund within 30 days before or after the sale generally will be subject to the
“wash sale” rules, in which case the shareholder’s ability to report a loss
would be deferred.
Net
Investment Income Tax
A Medicare
contribution tax is imposed at the rate of 3.8% on all or a portion of the net
investment income of U.S. individuals with income exceeding specified
thresholds, and on all or a portion of undistributed net investment income of
certain estates and trusts. Net investment income for this purpose generally
includes dividends and capital gain distributions paid by the Funds and gain on
the redemption or sale of shares of a Fund.
Withholding
A shareholder may be
subject to backup withholding at the applicable federal withholding tax rate on
taxable dividends, capital gains distributions and proceeds from the sale of
shares of a Fund if the shareholder fails to certify that their social security
number or tax identification number is correct and that they are not subject to
withholding.
Creation
Units
An Authorized
Participant that exchanges securities for Creation Units generally will
recognize a gain or a loss, except as described in the subsequent paragraph. The
gain or loss will be equal to the difference between the market value of the
Creation Units at the time and the sum of the Authorized Participant’s aggregate
basis in the securities surrendered plus the amount of cash paid for the
Creation Units. An Authorized Participant that redeems Creation Units generally
will recognize a gain or (subject to the subsequent sentence) loss equal to the
difference between the Authorized Participant’s basis in the Creation Units and
the sum of the aggregate market value of any securities received plus the amount
of any cash received for the Creation Units. It is unclear
Prospectus 21/26
whether any loss
realized upon an exchange of securities for Creation Units would be immediately
deductible or would be required to be deferred under the “wash sale” rules or on
the basis that there has been no significant change in economic
position.
Any gain or loss
realized on the creation of Creation Units will be treated as capital gain or
loss if the Authorized Participant holds the securities exchanged therefor as
capital assets, and generally will be treated as long-term capital gain or loss
if the securities exchanged for such Creation Units have been held for more than
one year. Similarly, any gain or loss realized upon a redemption of Creation
Units will be treated as capital gain or loss if the Authorized Participant
holds the shares of the Fund comprising the Creation Units as capital assets,
and otherwise will be ordinary income or loss, and generally will be treated as
long-term capital gain or loss if the Fund shares comprising the Creation Units
have been held for more than one year, and otherwise generally will be
short-term capital gain or loss. Any capital loss realized upon a redemption of
Creation Units held for six months or less will be treated as a long-term
capital loss to the extent of any amounts treated as distributions to the
applicable Authorized Participant of long-term capital gain with respect to the
Creation Units (including any amounts credited to the Authorized Participant as
undistributed capital gains).
The Funds have the
right to reject an order for Creation Units if the Authorized Participant (or
group of Authorized Participants) would, upon obtaining the Fund shares so
ordered, own 80% or more of the outstanding shares of the relevant Fund and if,
pursuant to section 351 of the Internal Revenue Code, the Fund would have a
basis in any securities different from the market value of such securities on
the date of deposit. The Funds also have the right to require information
necessary to determine beneficial Fund shares ownership for purposes of the 80%
determination. If the Fund does issue Creation Units to an Authorized
Participant (or group of Authorized Participants) that would, upon obtaining the
shares so ordered, own 80% or more of the outstanding shares of the Fund, the
Authorized Participant (or group of Authorized Participants) generally would not
recognize gain or loss upon the exchange of securities for Creation
Units.
Authorized
Participants purchasing or redeeming Creation Units should consult their own tax
advisors with respect to the tax treatment of any creation or redemption
transaction.
Additional
Information
Premium/Discount
Information
Each Fund’s website
includes additional quantitative information that is updated on a daily basis,
including, on a per share basis for each Fund, the prior business day’s NAV and
market closing price or bid/ask price and a calculation of the premium or
discount of the market closing price or bid/ask price against such NAV. In
addition, the Funds post a table showing the number of days the Funds’ shares
traded at a premium or a discount and a line graph showing the Fund share
premiums or discounts during the most recently completed calendar year and most
recently completed calendar quarters since that year (or the life of the fund,
if shorter). If a Fund’s premium or discount is greater than 2% for more than
seven consecutive trading days, the website will contain disclosure to that
effect along with a discussion of the factors that are reasonably believed to
have materially contributed to the premium or discount.
Service,
Distribution, and Administrative Fees
Rule 12b-1 under the
1940 Act permits investment companies that adopt a written plan to pay certain
expenses associated with the distribution of their shares out of fund assets.
The Board has adopted a 12b-1 plan that allows the Funds to pay annual fees not
to exceed 0.25% to Fred Alger & Company, LLC (the “Distributor”), the Funds’
distributor, for distribution and individual shareholder services. However, the
Board has determined not to authorize payment of a 12b-1 plan fee at this
time.
Because these fees
are paid out of a Fund’s assets on an ongoing basis, to the extent that a fee is
authorized, over time these fees will increase the cost of your investment and
may cost you more than paying other types of sales charges.
The Manager or its
affiliates (collectively, “Alger”) may make payments to intermediaries for
various additional services, other expenses and/or the intermediaries’
distribution of the Funds out of their profits or other available sources. Such
payments may be made for one or more of the following: (1) distribution, which
may include expenses incurred by intermediaries for their sales activities with
respect to the Funds, such as preparing, printing and distributing sales
literature and advertising materials and compensating registered representatives
or other employees of such financial intermediaries for their sales activities,
as well as the opportunity for the Funds to be made available by such
intermediaries; (2) shareholder services, such as providing individual and
custom investment management services to clients of the financial
intermediaries; and (3) marketing and promotional services, including business
planning assistance, educating personnel about the Funds, and sponsorship of
sales meetings, which may include covering costs of providing speakers, meals
and other entertainment. Alger may pay partnership and/or sponsorship fees to
support seminars, conferences, and other programs designed to educate
intermediaries about the Funds and may cover the expenses associated with
attendance at such meetings, including travel costs. Alger also may pay fees
related to obtaining data regarding intermediary or financial professional
activities to assist Alger with sales reporting, business intelligence, and
training and education opportunities. These payments and activities are intended
to provide an incentive to intermediaries to sell the Funds by educating them
about the Funds and helping defray the costs associated with offering the Funds.
These payments
Prospectus 22/26
may create a conflict
of interest by influencing the intermediary to recommend the Funds over another
investment. Ask your salesperson or visit your financial intermediary’s website
for more information. The amount of any payments described by this paragraph is
determined by Alger, and all such amounts are paid out of their available
assets, and not paid by you or the Funds. As a result, the total expense ratio
of the Funds will not be affected by any such payments.
Disclosure
of Portfolio Holdings
For a discussion of
each Fund’s policies and procedures regarding the selective disclosure of its
portfolio holdings, please see the SAI. Alger Mid Cap 40 Fund makes publicly
available its month-end top 10 holdings with a 10-day lag and its month-end full
portfolio with a 60-day lag on its website www.alger.com. Alger 35 Fund
makes publicly available its month-end top 5 holdings with a 10-day lag and its
month-end full portfolio with a 60-day lag on its website
www.alger.com.
Prospectus 23/26
Hypothetical
Investment and Expense Information
Hypothetical
investment and expense information, which is not required to be included in this
Prospectus by the SEC, is presented in the chart below. This information is
intended to reflect the annual and cumulative effect of a Fund’s expenses,
including management fees and other Fund costs, on each Fund’s total return
based on NAV over a 10-year period. The example assumes the
following:
•
You invest $10,000 in
the Fund and hold it for the entire 10-year period; and
•
Your investment has a
5% return before expenses each year.
There is no assurance
that the annual expense ratio will be the expense ratio for the Fund for any of
the years shown. To the extent that the Manager and any of its affiliates alter
any fee waivers and/or expense reimbursements pursuant to a voluntary or
contractual arrangement, your actual expenses may be higher or lower. This is
only a hypothetical presentation made to illustrate what expenses and returns
would be under the above scenarios. Your actual expenses and returns are likely
to differ (higher or lower) from those shown below.
Alger
Mid Cap 40 ETF
|
|
Year
1 |
Year
2 |
Year
3 |
Year
4 |
Year
5 |
Year
6 |
Year
7 |
Year
8 |
Year
9 |
Year
10 |
|
Expense
Ratio |
0.60% |
0.60% |
1.23% |
1.23% |
1.23% |
1.23% |
1.23% |
1.23% |
1.23% |
1.23% |
|
Cumulative
Gross Return |
5.00% |
10.25% |
15.76% |
21.55% |
27.63% |
34.01% |
40.71% |
47.75% |
55.13% |
62.89% |
|
Cumulative
Net Return |
4.40% |
8.99% |
13.10% |
17.37% |
21.79% |
26.38% |
31.15% |
36.09% |
41.22% |
46.55% |
|
End
Investment Balance |
$10,440 |
$10,899 |
$11,310 |
$11,737 |
$12,179 |
$12,638 |
$13,115 |
$13,609 |
$14,122 |
$14,655 |
|
Annual
Expense |
$61 |
$64 |
$137 |
$142 |
$147 |
$153 |
$158 |
$164 |
$171 |
$177 |
Alger
35 ETF
|
|
Year
1 |
Year
2 |
Year
3 |
Year
4 |
Year
5 |
Year
6 |
Year
7 |
Year
8 |
Year
9 |
Year
10 |
|
Expense
Ratio |
0.55% |
0.55% |
1.85% |
1.85% |
1.85% |
1.85% |
1.85% |
1.85% |
1.85% |
1.85% |
|
Cumulative
Gross Return |
5.00% |
10.25% |
15.76% |
21.55% |
27.63% |
34.01% |
40.71% |
47.75% |
55.13% |
62.89% |
|
Cumulative
Net Return |
4.45% |
9.10% |
12.53% |
16.08% |
19.74% |
23.51% |
27.40% |
31.41% |
35.55% |
39.82% |
|
End
Investment Balance |
$10,445 |
$10,910 |
$11,253 |
$11,608 |
$11,974 |
$12,351 |
$12,740 |
$13,141 |
$13,555 |
$13,982 |
|
Annual
Expense |
$56 |
$59 |
$205 |
$211 |
$218 |
$225 |
$232 |
$239 |
$247 |
$255 |
Prospectus 24/26
Financial
Highlights
The financial
highlights tables are intended to help you understand each Fund’s financial
performance for the periods shown. Certain information reflects financial
results for a single Fund share. The total returns in the tables represent the
rate that an investor would have earned or lost on an investment in the Fund
(assuming reinvestment of all dividends and distributions). The information in
the tables for the fiscal years ended December 31 has been audited by Deloitte
& Touche LLP, whose report, along with each Fund’s financial statements, is
included in the Annual Report, which is available upon request.
The
Alger ETF Trust Financial Highlights
for a share outstanding throughout the period
|
Alger
Mid Cap 40 ETF |
From
2/26/21
(commencement
of
operations)
to 12/31/21
(i) |
|
Net
asset value, beginning of period |
$20.00 |
|
Income
from Investment Operations: |
|
|
Net
investment loss (ii) |
(0.08) |
|
Net
realized and unrealized gain on investments |
1.15 |
|
Total
from investment operations |
1.07 |
|
Distributions
from net realized gains |
(1.07) |
|
Net
asset value, end of period |
$20.00 |
|
Net
asset value, Total return |
5.62% |
|
Ratios/Supplemental
Data: |
|
|
Net
assets, end of period (000’s omitted) |
$38,750 |
|
Ratio
of gross expenses to average net assets |
1.23% |
|
Ratio
of expense reimbursements to average net assets |
(0.63)% |
|
Ratio
of net expenses to average net assets |
0.60% |
|
Ratio
of net investment loss to average net assets |
(0.43)% |
|
Portfolio
turnover rate (iii) |
417.06% |
(i)
Ratios have been
annualized; total return and portfolio turnover rate have not been
annualized.
(ii)
Amount was computed
based on average shares outstanding during the period.
(iii)
Portfolio turnover
excludes the value of portfolio securities received or delivered as a result of
in-kind fund share transactions.
Prospectus 25/26
The
Alger ETF Trust Financial Highlights
for a share outstanding throughout the period
|
Alger
35 ETF |
From
5/3/21
(commencement
of
operations)
to 12/31/21
(i) |
|
Net
asset value, beginning of period |
$20.00 |
|
Income
from Investment Operations: |
|
|
Net
investment loss (ii) |
(0.04) |
|
Net
realized and unrealized gain on investments |
0.44 |
|
Total
from investment operations |
0.40 |
|
Net
asset value, end of period |
$20.40 |
|
Net
asset value, Total return |
2.00% |
|
Ratios/Supplemental
Data: |
|
|
Net
assets, end of period (000’s omitted) |
$13,517 |
|
Ratio
of gross expenses to average net assets |
1.85% |
|
Ratio
of expense reimbursements to average net assets |
(1.30)% |
|
Ratio
of net expenses to average net assets |
0.55% |
|
Ratio
of net investment loss to average net assets |
(0.28)% |
|
Portfolio
turnover rate (iii) |
99.20% |
(i)
Ratios have been
annualized; total return and portfolio turnover rate have not been
annualized.
(ii)
Amount was computed
based on average shares outstanding during the period.
(iii)
Portfolio turnover
excludes the value of portfolio securities received or delivered as a result of
in-kind fund share transactions.
Prospectus 26/26
For
Fund Information:
|
By
Telephone: |
(800)
223-3810 |
|
By
Mail: |
Alger
Family of Funds
c/o
Brown Brothers Harriman & Co.
50
Post Office Square
Boston,
Massachusetts 02110 |
|
Online |
Text
versions of Fund documents can be downloaded from the following
sources: |
|
|
•
The Funds: www.alger.com |
|
|
•
SEC (EDGAR data base):
www.sec.gov |
Statement
of Additional Information
For more detailed
information about each Fund and its policies, please read each Fund’s SAI, which
is incorporated by reference into (is legally made a part of) this Prospectus.
You can get a free copy of the SAI by calling the Funds’ toll-free number, at
the Funds’ website at www.alger.com or by writing to the address above. The SAI
is on file with the SEC.
Annual
and Semi-Annual Reports
Additional
information about a Fund’s investments is available in the Fund’s annual and
semi-annual reports to shareholders. In each Fund’s annual report you will find
a discussion of the market conditions and investment strategies that
significantly affected the Fund’s performance during the period covered by the
report. You can receive free copies of these reports by calling the Funds’
toll-free number, at the Funds’ website at www.alger.com or by writing to the
address above. Copies can also be obtained for a duplicating fee by E-mail
request to [email protected]. Fund documents are also available on the EDGAR
database on the SEC’s Internet site at www.sec.gov.
Quarterly
Fund Holdings
Each Fund’s most
recent month end portfolio holdings are available approximately sixty days after
month-end on the Fund’s website at www.alger.com. Each Fund also files its
complete schedule of portfolio holdings with the SEC for the first and third
quarter of each fiscal year as an exhibit to Form N-PORT and semi-annually on
Form N-CSR. Forms N-PORT and N-CSR are available online on the SEC’s website at
www.sec.gov. A copy of the most recent quarterly holdings may also be obtained
from the Funds by calling (800) 223-3810.
Alger
Electronic Delivery Service
The Funds provide you
with an enhancement of your ability to access Fund documents online. When Fund
documents such as prospectuses and annual and semi-annual reports are available,
you will be sent an e-mail notification with a link that will take you directly
to the Fund information on the Funds’ website. To sign up for this free service,
enroll at www.icsdelivery.com/alger.
ActiveShares®
Methodology
The Funds utilize the
ActiveShares® methodology licensed from Precidian Investments, LLC
(“Precidian”). Precidian’s products and services are protected by domestic and
international intellectual property protections, including, without limitation,
the following issued patents and pending patent applications: 7813987, 8285624,
7925562, 13011746, 14528658, 14208966, 16196560.
Distributor:
Fred Alger & Company, LLC
The Alger ETF
Trust SEC File #811-23603
ETF