During the initial quarter of 2026, the Class A shares of the Alger Capital Appreciation Fund experienced a downturn, trailing behind the Russell 1000 Growth Index. Despite this overall underperformance, certain holdings such as Western Digital Corporation, Nebius Group, and Vertiv Holdings Co. emerged as strong positive influences on the portfolio's returns. Conversely, major technology companies like Microsoft Corporation, AppLovin Corp. Class A, and NVIDIA Corporation were among the primary factors contributing to the fund's negative results.

The Alger Capital Appreciation Fund aims to invest in companies that exhibit strong growth potential. Its performance is often benchmarked against indices that track growth-oriented stocks, such as the Russell 1000 Growth Index. The first quarter of 2026 presented a challenging environment for the fund, indicating that the selected growth strategies did not fully align with broader market trends in this period.

A closer look at the top performers reveals interesting insights. Western Digital Corporation, a prominent player in data storage, likely benefited from increasing demand in its sector or specific strategic advancements. Nebius Group's contribution suggests strong performance within its niche, possibly driven by innovative products or market expansion. Vertiv Holdings Co., a critical infrastructure provider for data centers, capitalized on the ongoing surge in data center investments, positioning itself advantageously in a growing market.

On the other hand, the underperformance of tech giants like Microsoft, AppLovin, and NVIDIA as detractors is noteworthy. These companies are typically considered stalwarts in growth portfolios. Their negative impact could stem from various factors, including sector-wide corrections, company-specific challenges, or shifts in investor sentiment away from certain high-growth tech stocks during the quarter. This highlights the dynamic nature of market leadership and the constant need for portfolio managers to adapt to evolving conditions.

Overall, the first quarter of 2026 for the Alger Capital Appreciation Fund reflects a mixed bag of individual stock performances against a backdrop of underperforming the broader growth market. This situation underscores the complexities of active investment management and the continuous effort required to identify and capitalize on opportunities while mitigating risks in a volatile market landscape.