OMB APPROVAL

 

 

OMB Number:

3235-0578

 

 

Expires:

January 31, 2016

 

UNITED STATES

Estimated average burden hours per response. . . . . . . . . . . . . 10.5

 

SECURITIES AND EXCHANGE COMMISSION

 

 

Washington, D.C. 20549

 

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number

811-21308

 

Alger China-U.S. Growth Fund

(Exact name of registrant as specified in charter)

 

111 Fifth Avenue, New York, New York

 

10003

(Address of principal executive offices)

 

(Zip code)

 

Mr. Hal Liebes
Fred Alger Management, Inc.
360 Park Avenue South, New York, New York 10010

(Name and address of agent for service)

 

Registrant’s telephone number, including area code:

212-806-8800

 

 

Date of fiscal year end:

October 31

 

 

Date of reporting period:

January 31, 2013

 

 



 

ITEM 1. Schedule of Investments.

 



 

ALGER CHINA-U.S. GROWTH FUND

Schedule of Investments‡ (Unaudited) January 31, 2013

 

 

 

SHARES

 

VALUE

 

COMMON STOCKS—93.8%

 

 

 

 

 

CHINA—21.8%

 

 

 

 

 

APPAREL ACCESSORIES & LUXURY GOODS—0.6%

 

 

 

 

 

Anta Sports Products Ltd.

 

280,000

 

$

261,755

 

 

 

 

 

 

 

APPAREL RETAIL—0.5%

 

 

 

 

 

Belle International Holdings Ltd.

 

107,300

 

239,909

 

 

 

 

 

 

 

AUTOMOBILE MANUFACTURERS—0.8%

 

 

 

 

 

Great Wall Motor Co., Ltd.

 

84,854

 

346,841

 

 

 

 

 

 

 

AUTOMOTIVE RETAIL—0.5%

 

 

 

 

 

China ZhengTong Auto Services Holdings Ltd.*

 

257,500

 

228,768

 

 

 

 

 

 

 

COAL & CONSUMABLE FUELS—0.9%

 

 

 

 

 

China Shenhua Energy Co.

 

90,523

 

390,439

 

 

 

 

 

 

 

CONSTRUCTION MATERIALS—0.5%

 

 

 

 

 

West China Cement Ltd.

 

1,194,000

 

230,937

 

 

 

 

 

 

 

CONSUMER FINANCE—1.4%

 

 

 

 

 

Chailease Holding Co., Ltd.

 

240,174

 

642,524

 

 

 

 

 

 

 

DIVERSIFIED BANKS—2.8%

 

 

 

 

 

China Construction Bank Corp.

 

634,657

 

547,474

 

Industrial & Commercial Bank of China Ltd.

 

974,646

 

733,937

 

 

 

 

 

1,281,411

 

DIVERSIFIED METALS & MINING—2.8%

 

 

 

 

 

Jiangxi Copper Co.

 

154,096

 

418,255

 

Tiangong International Co., Ltd.

 

2,720,043

 

838,247

 

 

 

 

 

1,256,502

 

ELECTRIC UTILITIES—0.8%

 

 

 

 

 

China Longyuan Power Group Corp.

 

421,000

 

352,853

 

 

 

 

 

 

 

INDEPENDENT POWER PRODUCERS & ENERGY TRADERS—1.8%

 

 

 

 

 

GCL Poly Energy Holdings Ltd.

 

1,011,000

 

276,367

 

Huaneng Power International, Inc.

 

492,000

 

507,520

 

 

 

 

 

783,887

 

INTEGRATED OIL & GAS—1.6%

 

 

 

 

 

China Petroleum & Chemical Corp.

 

238,000

 

287,858

 

PetroChina Co., Ltd.

 

317,010

 

452,092

 

 

 

 

 

739,950

 

INTERNET SOFTWARE & SERVICES—3.7%

 

 

 

 

 

Baidu, Inc. #*

 

3,400

 

368,220

 

Sina Corp. *

 

7,600

 

417,468

 

Tencent Holdings Ltd.

 

25,874

 

905,465

 

 

 

 

 

1,691,153

 

LIFE & HEALTH INSURANCE—0.8%

 

 

 

 

 

Ping An Insurance Group Co., of China Ltd.

 

41,733

 

374,800

 

 

 

 

 

 

 

OIL & GAS EXPLORATION & PRODUCTION—1.0%

 

 

 

 

 

CNOOC Ltd.

 

223,020

 

461,261

 

 

 

 

 

 

 

PACKAGED FOODS & MEATS—0.5%

 

 

 

 

 

China Foods Ltd.

 

241,619

 

209,363

 

 



 

 

 

SHARES

 

VALUE

 

COMMON STOCKS—(CONT.)

 

 

 

 

 

CHINA—(CONT.)

 

 

 

 

 

REAL ESTATE DEVELOPMENT—0.8%

 

 

 

 

 

Evergrande Real Estate Group Ltd.

 

680,000

 

$

360,371

 

TOTAL CHINA
(Cost $7,243,890)

 

 

 

9,852,724

 

 

 

 

 

 

 

GERMANY—1.0%

 

 

 

 

 

APPLICATION SOFTWARE—1.0%

 

 

 

 

 

SAP AG#
(Cost $346,781)

 

5,600

 

459,312

 

 

 

 

 

 

 

HONG KONG—20.6%

 

 

 

 

 

APPAREL RETAIL—0.6%

 

 

 

 

 

Sitoy Group Holdings Ltd.

 

492,115

 

289,354

 

 

 

 

 

 

 

BUILDING PRODUCTS—0.5%

 

 

 

 

 

Far East Global Group Ltd.*

 

738,000

 

228,384

 

 

 

 

 

 

 

CASINOS & GAMING—0.6%

 

 

 

 

 

Galaxy Entertainment Group Ltd.*

 

60,000

 

270,394

 

 

 

 

 

 

 

CONSTRUCTION & ENGINEERING—1.7%

 

 

 

 

 

China State Construction International Holdings Ltd.

 

572,341

 

751,279

 

 

 

 

 

 

 

CONSUMER ELECTRONICS—0.5%

 

 

 

 

 

Haier Electronics Group Co., Ltd.*

 

129,944

 

217,150

 

 

 

 

 

 

 

DIVERSIFIED BANKS—0.8%

 

 

 

 

 

BOC Hong Kong Holdings Ltd.

 

102,075

 

350,106

 

 

 

 

 

 

 

DIVERSIFIED CAPITAL MARKETS—1.2%

 

 

 

 

 

Digital China Holdings Ltd.

 

336,189

 

543,600

 

 

 

 

 

 

 

ELECTRIC UTILITIES—0.4%

 

 

 

 

 

Power Assets Holdings Ltd.

 

23,283

 

201,297

 

 

 

 

 

 

 

FOOD RETAIL—0.7%

 

 

 

 

 

China Resources Enterprise Ltd.

 

90,200

 

323,333

 

 

 

 

 

 

 

INDUSTRIAL CONGLOMERATES—1.2%

 

 

 

 

 

Hutchison Whampoa Ltd.

 

48,639

 

543,754

 

 

 

 

 

 

 

INTEGRATED TELECOMMUNICATION SERVICES—0.9%

 

 

 

 

 

China Unicom Hong Kong Ltd.

 

259,368

 

417,378

 

 

 

 

 

 

 

LIFE & HEALTH INSURANCE—1.8%

 

 

 

 

 

AIA Group Ltd.

 

197,511

 

785,679

 

 

 

 

 

 

 

OIL & GAS EXPLORATION & PRODUCTION—1.2%

 

 

 

 

 

Kunlun Energy Co., Ltd.

 

266,704

 

555,050

 

 

 

 

 

 

 

PACKAGED FOODS & MEATS—0.8%

 

 

 

 

 

China Mengniu Dairy Co., Ltd.

 

112,494

 

328,546

 

 

 

 

 

 

 

REAL ESTATE DEVELOPMENT—0.7%

 

 

 

 

 

China Overseas Land & Investment Ltd.

 

106,000

 

329,398

 

 

 

 

 

 

 

REAL ESTATE MANAGEMENT & DEVELOPMENT—4.7%

 

 

 

 

 

Cheung Kong Holdings Ltd.

 

35,812

 

586,912

 

Cheung Kong Infrastructure Holdings Ltd.

 

75,510

 

476,115

 

China Overseas Grand Oceans Group Ltd.

 

442,797

 

613,208

 

 



 

 

 

SHARES

 

VALUE

 

COMMON STOCKS—(CONT.)

 

 

 

 

 

HONG KONG—(CONT.)

 

 

 

 

 

Wharf Holdings Ltd.

 

53,943

 

$

476,110

 

 

 

 

 

2,152,345

 

SPECIALIZED FINANCE—0.8%

 

 

 

 

 

Hong Kong Exchanges and Clearing Ltd.

 

18,850

 

358,024

 

 

 

 

 

 

 

WIRELESS TELECOMMUNICATION SERVICES—1.5%

 

 

 

 

 

China Mobile Ltd.

 

61,841

 

680,180

 

TOTAL HONG KONG
(Cost $7,658,907)

 

 

 

9,325,251

 

 

 

 

 

 

 

INDIA—0.6%

 

 

 

 

 

CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS—0.6%

 

 

 

 

 

Tata Motors Ltd.#
(Cost $291,346)

 

11,952

 

330,233

 

 

 

 

 

 

 

ISRAEL—0.5%

 

 

 

 

 

SEMICONDUCTORS—0.5%

 

 

 

 

 

EZchip Semiconductor Ltd.*
(Cost $239,454)

 

7,450

 

229,386

 

 

 

 

 

 

 

ITALY—0.9%

 

 

 

 

 

APPAREL RETAIL—0.9%

 

 

 

 

 

Prada SpA
(Cost $326,828)

 

46,746

 

420,122

 

 

 

 

 

 

 

JAPAN—1.3%

 

 

 

 

 

APPAREL RETAIL—1.3%

 

 

 

 

 

Fast Retailing Co., Ltd.
(Cost $261,325)

 

2,000

 

526,656

 

 

 

 

 

 

 

LUXEMBOURG—0.2%

 

 

 

 

 

SPECIALTY STORES—0.2%

 

 

 

 

 

L’Occitane International SA
(Cost $112,965)

 

35,400

 

106,355

 

 

 

 

 

 

 

MALAYSIA—0.7%

 

 

 

 

 

HEALTH CARE PROVIDERS & SERVICE—0.7%

 

 

 

 

 

IHH Healthcare Bhd*
(Cost $293,959)

 

292,428

 

315,430

 

 

 

 

 

 

 

MONGOLIA—0.6%

 

 

 

 

 

DIVERSIFIED METALS & MINING—0.6%

 

 

 

 

 

Mongolian Mining Corp.*
(Cost $277,264)

 

535,500

 

265,149

 

 

 

 

 

 

 

NETHERLANDS—2.6%

 

 

 

 

 

INTEGRATED OIL & GAS—1.6%

 

 

 

 

 

Royal Dutch Shell PLC#

 

10,350

 

729,882

 

 



 

 

 

SHARES

 

VALUE

 

COMMON STOCKS—(CONT.)

 

 

 

 

 

NETHERLANDS—(CONT.)

 

 

 

 

 

SEMICONDUCTOR EQUIPMENT—1.0%

 

 

 

 

 

ASML Holding NV#

 

6,326

 

$

475,019

 

TOTAL NETHERLANDS
(Cost $1,100,535)

 

 

 

1,204,901

 

 

 

 

 

 

 

SPAIN—0.3%

 

 

 

 

 

APPAREL RETAIL—0.3%

 

 

 

 

 

Inditex SA
(Cost $91,749)

 

950

 

133,138

 

 

 

 

 

 

 

SWEDEN—0.6%

 

 

 

 

 

CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS—0.6%

 

 

 

 

 

Volvo AB#
(Cost $249,857)

 

18,250

 

268,823

 

 

 

 

 

 

 

TAIWAN—5.4%

 

 

 

 

 

COMPUTER HARDWARE—0.6%

 

 

 

 

 

Wistron Corp.

 

223,000

 

258,266

 

 

 

 

 

 

 

ELECTRONIC COMPONENTS—0.6%

 

 

 

 

 

Delta Electronics, Inc.

 

69,000

 

250,017

 

 

 

 

 

 

 

ELECTRONIC EQUIPMENT & INSTRUMENTS—1.2%

 

 

 

 

 

TPK Holding Co., Ltd.

 

32,000

 

550,491

 

 

 

 

 

 

 

OTHER DIVERSIFIED FINANCIAL SERVICES—0.5%

 

 

 

 

 

Fubon Financial Holding Co., Ltd.

 

165,000

 

210,930

 

 

 

 

 

 

 

PERSONAL PRODUCTS—0.8%

 

 

 

 

 

Ginko International Co., Ltd.

 

28,000

 

354,622

 

 

 

 

 

 

 

SEMICONDUCTORS—1.7%

 

 

 

 

 

Career Technology MFG. Co., Ltd.

 

211,000

 

268,662

 

Epistar Corp.

 

139,544

 

265,101

 

Orise Technology Co., Ltd.

 

183,000

 

245,095

 

 

 

 

 

778,858

 

TOTAL TAIWAN
(Cost $2,350,428)

 

 

 

2,403,184

 

 

 

 

 

 

 

UNITED STATES—36.7%

 

 

 

 

 

AIR FREIGHT & LOGISTICS—1.2%

 

 

 

 

 

United Parcel Service, Inc., Cl. B

 

6,650

 

527,279

 

 

 

 

 

 

 

AIRLINES—0.5%

 

 

 

 

 

United Continental Holdings, Inc.*

 

9,300

 

224,595

 

 

 

 

 

 

 

APPAREL ACCESSORIES & LUXURY GOODS—1.1%

 

 

 

 

 

PVH Corp.

 

3,000

 

356,610

 

Ralph Lauren Corp.

 

800

 

133,184

 

 

 

 

 

489,794

 

AUTOMOBILE MANUFACTURERS—0.8%

 

 

 

 

 

Ford Motor Co.

 

30,900

 

400,155

 

 



 

 

 

SHARES

 

VALUE

 

COMMON STOCKS—(CONT.)

 

 

 

 

 

UNITED STATES—(CONT.)

 

 

 

 

 

CASINOS & GAMING—1.2%

 

 

 

 

 

Las Vegas Sands Corp.

 

9,950

 

$

549,737

 

 

 

 

 

 

 

COMMUNICATIONS EQUIPMENT—2.9%

 

 

 

 

 

Cisco Systems, Inc.

 

27,150

 

558,476

 

QUALCOMM, Inc.

 

11,100

 

732,933

 

 

 

 

 

1,291,409

 

COMPUTER HARDWARE—3.6%

 

 

 

 

 

Apple, Inc.

 

3,600

 

1,639,116

 

 

 

 

 

 

 

CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS—0.9%

 

 

 

 

 

Caterpillar, Inc.

 

2,750

 

270,572

 

Cummins, Inc.

 

1,000

 

114,830

 

 

 

 

 

385,402

 

DATA PROCESSING & OUTSOURCED SERVICES—1.1%

 

 

 

 

 

Mastercard, Inc., Cl. A

 

950

 

492,480

 

 

 

 

 

 

 

DISTILLERS & VINTNERS—0.6%

 

 

 

 

 

Beam, Inc.

 

4,700

 

288,298

 

 

 

 

 

 

 

DIVERSIFIED METALS & MINING—0.8%

 

 

 

 

 

Cliffs Natural Resources, Inc.

 

9,700

 

361,907

 

 

 

 

 

 

 

FERTILIZERS & AGRICULTURAL CHEMICALS—0.4%

 

 

 

 

 

Monsanto Co.

 

1,950

 

197,633

 

 

 

 

 

 

 

FOOTWEAR—1.0%

 

 

 

 

 

NIKE, Inc., Cl. B

 

8,350

 

451,318

 

 

 

 

 

 

 

HOUSEHOLD PRODUCTS—0.5%

 

 

 

 

 

Procter & Gamble Co., /The

 

3,100

 

232,996

 

 

 

 

 

 

 

INDUSTRIAL MACHINERY—1.5%

 

 

 

 

 

SPX Corp.

 

9,000

 

671,670

 

 

 

 

 

 

 

INTERNET SOFTWARE & SERVICES—0.2%

 

 

 

 

 

Facebook, Inc.*

 

2,750

 

85,168

 

 

 

 

 

 

 

IT CONSULTING & OTHER SERVICES—2.3%

 

 

 

 

 

International Business Machines Corp.

 

5,050

 

1,025,504

 

 

 

 

 

 

 

MOTORCYCLE MANUFACTURERS—1.4%

 

 

 

 

 

Harley-Davidson, Inc.

 

12,100

 

634,282

 

 

 

 

 

 

 

MOVIES & ENTERTAINMENT—1.3%

 

 

 

 

 

News Corp., Cl. A

 

20,500

 

568,670

 

 

 

 

 

 

 

OIL & GAS EQUIPMENT & SERVICES—1.3%

 

 

 

 

 

Baker Hughes, Inc.

 

5,500

 

245,960

 

National Oilwell Varco, Inc.

 

4,700

 

348,458

 

 

 

 

 

594,418

 

OIL & GAS EXPLORATION & PRODUCTION—1.2%

 

 

 

 

 

Anadarko Petroleum Corp.

 

6,650

 

532,133

 

 

 

 

 

 

 

PHARMACEUTICALS—4.1%

 

 

 

 

 

Actavis, Inc. *

 

4,550

 

393,075

 

Johnson & Johnson

 

15,650

 

1,156,847

 

 



 

 

 

SHARES

 

VALUE

 

COMMON STOCKS—(CONT.)

 

 

 

 

 

UNITED STATES—(CONT.)

 

 

 

 

 

Mylan, Inc. *

 

11,300

 

$

319,451

 

 

 

 

 

1,869,373

 

REAL ESTATE SERVICES—0.7%

 

 

 

 

 

CBRE Group, Inc.*

 

15,350

 

331,253

 

 

 

 

 

 

 

RESTAURANTS—0.8%

 

 

 

 

 

McDonald’s Corp.

 

4,000

 

381,160

 

 

 

 

 

 

 

SEMICONDUCTORS—2.5%

 

 

 

 

 

Altera Corp.

 

10,250

 

342,555

 

Inphi Corp. *

 

56,800

 

456,104

 

Skyworks Solutions, Inc. *

 

14,650

 

350,721

 

 

 

 

 

1,149,380

 

SOFT DRINKS—1.1%

 

 

 

 

 

PepsiCo, Inc.

 

7,100

 

517,235

 

 

 

 

 

 

 

SPECIALTY CHEMICALS—1.7%

 

 

 

 

 

Celanese Corp.

 

3,100

 

145,328

 

Rockwood Holdings, Inc.

 

11,250

 

615,713

 

 

 

 

 

761,041

 

TOTAL UNITED STATES
(Cost $12,353,855)

 

 

 

16,653,406

 

 

 

 

 

 

 

TOTAL COMMON STOCKS
(Cost $33,199,143)

 

 

 

42,494,070

 

 

 

 

 

 

 

EXCHANGE TRADED FUND—1.0%

 

 

 

 

 

HONG KONG—1.0%

 

 

 

 

 

MARKET INDICES—1.0%

 

 

 

 

 

CSOP FTSE China A50 HKD ETF*
(Cost $400,705)

 

305,000

 

443,616

 

 

 

 

 

 

 

Master Limited Partnership—1.1%

 

 

 

 

 

UNITED STATES—1.1%

 

 

 

 

 

ASSET MANAGEMENT & CUSTODY BANKS—1.1%

 

 

 

 

 

KKR & Co., LP

 

29,800

 

503,024

 

 

 

 

 

 

 

REAL ESTATE INVESTMENT TRUST—1.1%

 

 

 

 

 

HONG KONG—1.1%

 

 

 

 

 

RETAIL—1.1%

 

 

 

 

 

Link REIT, /The
(Cost $298,781)

 

93,005

 

482,093

 

 

 

 

 

 

 

Total Investments
(Cost $34,330,004)(a)

 

97.0

%

43,922,803

 

Other Assets in Excess of Liabilities

 

3.0

 

1,356,275

 

NET ASSETS

 

100.0

%

$

45,279,078

 

 


Securities classified as Level 1 for ASC 820 disclosure purposes based on valuation inputs unless otherwise

 



 

 

noted.

 

 

*

Non-income producing security.

#

American Depositary Receipts.

(a)

At January 31, 2013, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $35,105,322, amounted to $8,817,480 which consisted of aggregate gross unrealized appreciation of $10,095,388 and aggregate gross unrealized depreciation of $1,277,908.

 

See Notes to Schedule of Investments.

 



 

ALGER CHINA-U.S. GROWTH FUND

NOTES TO SCHEDULE OF INVESTMENTS (Unaudited)

 

NOTE 1 — General:

 

Alger China-U.S. Growth Fund (the “Fund”) is a diversified, open-end registered investment company organized as a business trust under the laws of the Commonwealth of Massachusetts. The Fund’s investment objective is long-term capital appreciation. It seeks to achieve its objective by investing in equity securities that are economically tied to China (including Hong Kong and Taiwan) or the United States.  The Fund offers Class A shares and Class C shares.  Class A shares are generally subject to an initial sales charge while Class C shares are generally subject to a deferred sales charge.  Each class has identical rights to assets and earnings except that each share class bears the cost of its plan of distribution and transfer agency and sub-transfer agency services.

 

NOTE 2 — Significant Accounting Policies:

 

Investment Valuation: The Fund values its financial instruments at fair value using independent dealers or pricing services under policies approved by the Board of Trustees. Investments 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).

 

Equity securities for which valuation information is readily available are valued at the last reported sales price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the absence of reported sales, such securities are valued at a price within the bid and ask price or, in the absence of a recent bid or ask 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, as determined in good faith pursuant to procedures established by the Board of Trustees.

 

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

 

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

 



 

ALGER CHINA-U.S. GROWTH FUND

NOTES TO SCHEDULE OF INVESTMENTS (Continued) (Unaudited)

 

assumptions based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

 

·                   Level 1 — quoted prices in active markets for identical investments

 

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

 

·                   Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

 

The Fund’s valuation techniques are generally consistent with the market approach whereby prices and other relevant information generated by market transactions involving identical or comparable assets are used to measure fair value.  Inputs for Level 1 include exchange-listed prices and broker quotes in an active market.  Inputs for Level 2 include the last trade price in the case of a halted security, an exchange-listed price which has been adjusted for fair value factors, and prices of closely related securities.  Additional Level 2 inputs include an evaluated price which is based upon on a compilation of observable market information such as spreads for fixed income and preferred securities.  Valuation techniques for Level 3 securities include using the income approach whereby future amounts are converted, or discounted, to a current single amount. These fair value measurements are determined on the basis of the value indicated by current market expectations about such future events. Inputs for Level 3 include unobservable market information which can include cash flows, income and expenses, and other information obtained from a company’s financial statements, or from market indicators such as benchmarks and indices.

 

Valuation processes are determined by a Valuation Committee (“Committee”) established by the Fund’s Board of Trustees (“Board”) and comprised of representatives of the Fund’s investment advisor.  The Committee reports its valuation determinations to the Board which is responsible for approving valuation policy and procedures.

 

The Committee meets quarterly to review and evaluate the effectiveness of the procedures for making fair value determinations.  The Committee considers, among other things, the results of quarterly back testing of the fair value model for foreign securities, pricing comparisons between primary and secondary price sources, the outcome of price challenges put to the Fund’s pricing vendor, and variances between transactional prices and previous mark-to-markets.

 

The Fund will record a change to a security’s fair value level if new inputs are available or it becomes evident that inputs previously considered for leveling have changed or are no longer relevant.  Transfers between Levels 1 and 2 are recognized at the end of the reporting period, and transfers into and out of Level 3 are recognized during the reporting period.

 

NOTE 3 — Fair Value Measurements:

 

The major categories of securities and their respective fair value inputs are detailed in the Fund’s Schedule of Investments.  The following is a summary of the inputs used as of

 



 

ALGER CHINA-U.S. GROWTH FUND

NOTES TO SCHEDULE OF INVESTMENTS (Continued) (Unaudited)

 

October 31, 2012 in valuing the Fund’s investments carried at fair value on a recurring basis. Based upon the nature, characteristics, and risks associated with its investments, the Fund has determined that presenting them by security type and sector is appropriate.

 

Alger China-U.S. Growth Fund

 

TOTAL FUND

 

LEVEL 1

 

LEVEL 2

 

LEVEL 3

 

COMMON STOCKS

 

 

 

 

 

 

 

 

 

Consumer Discretionary

 

$

6,515,558

 

$

6,515,558

 

 

 

Consumer Staples

 

2,254,393

 

2,254,393

 

 

 

Energy

 

4,003,133

 

4,003,133

 

 

 

Financials

 

7,720,441

 

7,720,441

 

 

 

Health Care

 

2,184,803

 

2,184,803

 

 

 

Industrials

 

3,931,419

 

3,931,419

 

 

 

Information Technology

 

10,375,559

 

10,375,559

 

 

 

Materials

 

3,073,169

 

3,073,169

 

 

 

Telecommunication Services

 

1,097,558

 

1,097,558

 

 

 

Utilities

 

1,338,037

 

1,338,037

 

 

 

TOTAL COMMON STOCKS

 

$

42,494,070

 

$

42,494,070

 

 

 

EXCHANGE TRADED FUND

 

 

 

 

 

 

 

 

 

Market Indices

 

$

443,616

 

$

443,616

 

 

 

MASTER LIMITED PARTNERSHIP

 

 

 

 

 

 

 

 

 

Financials

 

$

503,024

 

$

503,024

 

 

 

REAL ESTATE INVESTMENT TRUST

 

 

 

 

 

 

 

 

 

Financials

 

$

482,093

 

$

482,093

 

 

 

TOTAL INVESTMENTS IN SECURITIES

 

$

43,922,803

 

$

43,922,803

 

 

 

 

On January 31, 2013 there were no transfers of securities between Level 1 and Level 2.

 

NOTE 4 — Derivatives:

 

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

 

Forward currency contracts—In connection with portfolio purchases and sales of securities denominated in foreign currencies, the Fund may enter into forward currency contracts. Additionally, the Fund may enter into such contracts to economically hedge certain other foreign currency denominated investments. These contracts are valued at the current cost of covering or offsetting such contracts, and the related realized and unrealized foreign exchange gains and losses are included in the Statement of Operations. In the event that counterparties fail to settle these currency contracts or the related foreign security trades, the Fund could be exposed to foreign currency fluctuations.

 

Options—The Fund seeks to capture the majority of the returns associated with equity market investments. To meet this investment goal, the Fund invests in a broadly

 



 

ALGER CHINA-U.S. GROWTH FUND

NOTES TO SCHEDULE OF INVESTMENTS (Continued) (Unaudited)

 

diversified portfolio of common stocks, while also buying and selling call and put options on equities and equity indices.  The Fund purchases call options to increase its exposure to stock market risk and also provide diversification of risk.  The Fund purchases put options in order to protect from significant market declines that may occur over a short period of time.  The Fund can write covered call and cash secured put options to generate cash flows while reducing the volatility of the Fund’s portfolio.  The cash flows may be an important source of the Fund’s return, although written call options may reduce the Fund’s ability to profit from increases in the value of the underlying security or equity portfolio.  The value of a call option generally increases as the price of the underlying stock increases and decreases as the stock decreases in price.  Conversely, the value of a put option generally increases as the price of the underlying stock decreases and decreases as the stock increases in price. The combination of the diversified stock portfolio and the purchase and sale of options is intended to provide the Fund with the majority of the returns associated with equity market investments but with reduced volatility and returns that are augmented with the cash flows from the sale of options.

 

There were no derivative transactions for the period ended January 31, 2013.

 

NOTE 5 — Recent Accounting Pronouncements:

 

In December 2011, the Financial Accounting Standard Board issued ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”), which provides guidance regarding balance sheet offsetting disclosures.  The amendments in ASU 2011-11 require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effects of those arrangements on its financial position. Entities are required to disclose gross information and net information about both instruments and transactions eligible for offset in the statement of assets and liabilities and transactions subject to an agreement similar to a master netting arrangement. The objective of ASU 2011-11 is to facilitate comparison between those entities that prepare their financial statements on the basis of GAAP and those entities that prepare their financial statements on the basis of IFRS.  The new guidance is effective for annual reporting periods beginning on or after January 1, 2013. The Fund does not believe that this will have a material impact on the financial statements.

 



 

ITEM 2.  Controls and Procedures.

 

(a) Based on their evaluation of Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) as of a date within 90 days of the filing of this document, Registrant’s principal executive officer and principal financial officer found Registrant’s disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by Registrant in the reports it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to Registrant’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission.

 

(b) No changes in the registrant’s internal control over financial reporting occurred during the registrant’s last fiscal quarter that materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

ITEM 3. Exhibits.

 

Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940 are attached as Exhibit 99.CERT.

 


 


 

SIGNATURES

 

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

 

Alger China-U.S. Growth Fund

 

 

By

/s/Hal Liebes

 

 

Hal Liebes

 

President

 

Date: April 1, 2013

 

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

 

 

By

/s/Hal Liebes

 

 

Hal Liebes

 

President

 

Date: April 1, 2013

 

 

By

/s/ Michael D. Martins

 

 

Michael D. Martins

 

Treasurer

 

Date: April 1, 2013

 


 

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