In the fourth quarter of 2025, the Class A shares of the Alger Small Cap Growth Fund demonstrated a notable outperformance against the Russell 2000 Growth Index. This period saw significant contributions from its primary sector holdings: Health Care and Information Technology. While these sectors bolstered the fund's relative gains, other areas such as Consumer Discretionary and Materials experienced declines that tempered overall performance. This commentary provides a concise overview of the fund's strategic positioning and key performance drivers during this critical quarter.
During the fourth quarter of 2025, the Alger Small Cap Growth Fund strategically allocated its assets, with the most substantial concentrations found in the Health Care and Information Technology sectors. These sectors not only represented the largest portions of the portfolio but also served as significant catalysts for the fund's strong performance relative to its benchmark. The emphasis on Health Care stocks proved particularly advantageous, contributing positively to the fund's overall returns. In contrast, the Financials sector received the smallest allocation, marking it as the most underweight position within the fund's diversified portfolio during this period.
The strategic overweighting in Health Care reflected a bullish outlook on the sector's growth prospects, which materialized into tangible gains. Similarly, the robust performance of Information Technology holdings underscored the fund manager's successful identification of high-growth opportunities within this dynamic sector. These tactical decisions in asset allocation played a pivotal role in shaping the fund's outperformance, highlighting the impact of sector selection on investment outcomes.
The fourth quarter of 2025 saw the Alger Small Cap Growth Fund's Class A shares exceed the performance of the Russell 2000 Growth Index. The fund's primary sector exposures were in Health Care and Information Technology, which were instrumental in achieving these favorable results. However, challenges in the Consumer Discretionary and Materials sectors somewhat offset these gains, impacting the fund's relative performance during the quarter.