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Challening theEcommerce Leaders
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​Video: ​Challenging the E-commerce Leaders

Dan Chung's Photo

Dan Chung, CFA;

Chief Executive Officer
Chief Investment Officer
Portfolio Manager

Alger Chief Executive Officer, Chief Investment Officer and Portfolio Manager of the Alger 35 ETF, Dan Chung, CFA, explains why we believe, some of the lesser known, behind-the-scenes e-commerce companies may be challenging the largest online retailers.

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​​In this video, Alger Chief Executive Officer, Chief Investment Officer and Portfolio Manager of the Alger 35 ETF​, Dan Chung, CFA, explains why we believe some of the lesser known, behind-the-scenes e-commerce companies may be challenging the largest online ​retailers.

​DAN CHUNG: As e-commerce technology continues to rapidly evolve, online retailing and digital vendors persist in disrupting traditional stores. At Alger, we believe some of the lesser known, behind-the-scenes players may be challenging the largest online retailers and providing attractive opportunities for investors.

Shopify, for example, provides the technology for businesses to create their own e-commerce websites, including payment processing, advertising and logistics. The company appeals to businesses that want to maintain control over their customers’ online experiences, versus the Amazon business model where products – not a business’ store or brand – is central to the shopping experience.  We believe Shopify is creating a network-effect that, for the first time in our view, may be competitive with Amazon’s offering.

In the realm of digital banking services, mobile payment company Block runs two network-effect marketplaces:  a consumer side around payments and a merchant network around its e-commerce services for businesses. Block provides an array of services for merchants to manage their on and off line business, to accept and process payments and also create customer loyalty.  

Another example of the growing innovation in fintech, Marqeta, operates a cloud-based credit card platform that allows retailers and banks to issue customized debit and credit cards in real time. For example, DoorDash uses the platform to provide cards for delivery workers, who can instantly use the credit cards when picking up point-of-sale customer orders. Marqeta’s system has effectively helped DoorDash reduce fraudulent charges. In addition to DoorDash, Marqeta counts Uber, Instacart and even JPMorgan among its clients.

As the nation’s largest online retailer, Amazon’s significant scale advantage has historically been difficult for new market entrants to compete against. However, as technology evolves, along with the online shopping habits of consumers, so too do the opportunities for smaller e-commerce players. At Alger, we believe growth companies with strong business models and competitive moats that are effectively innovating – like Shopify, Block and Marqeta – may benefit from shifts in the e-commerce landscape and emerge as the next market leaders.​
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Risk Disclosures:
ETF shares are based on market price rather than net asset value (“NAV”), as a result, shares may trade at a price greater than NAV (a premium) or less than NAV (a discount). The Fund may also incur brokerage commissions, as well as the cost of the bid/ask spread, when purchase or selling ETF shares. The Fund faces numerous market trading risks, including the potential lack of an active market for Fund shares, losses from trading in secondary markets, periods of high volatility and disruption in the creation and/or redemption process of the Fund. Any of these factors, among others, may lead to the Fund’s shares trading at a premium or discount to NAV. Thus, you may pay more (or less) than NAV when you buy shares of the Fund in the secondary market, and you may receive less (or more) than NAV when you sell those shares in the secondary market. The Manager cannot predict whether shares will trade above (premium), below (discount) or at NAV. The Fund may effect its creations and redemptions for cash, rather than for in-kind securities. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the Fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in Fund shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind. Brokerage fees and taxes will be higher than if the Fund sold and redeemed shares in-kind. Certain shareholders, including other funds advised by the Manager, may from time to time own a substantial amount of the shares of the Fund. There can be no assurance that any large shareholder would not redeem its investment, that the size of the Fund would be maintained at such levels or that the Fund would continue to meet applicable listing requirements. Redemptions by large shareholders could have a significant negative impact on the Fund.

Prior to December 2, 2024, Alger 35 ETF operated as non-transparent ETF and was limited in the types of investments in which it could invest. This is because only exchange traded securities were permitted.

Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Technology companies may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness such as COVID-19 or other public health issues, recessions, or other events could have a significant impact on investments. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments.  Investing in companies of small and medium capitalizations involve the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. The Fund is classified as a “non-diversified fund” under federal securities laws because it can invest in fewer individual companies than a diversified fund. Assets may be focused in a small number of holdings, making them susceptible to risks associated with a single economic, political or regulatory event than a more diversified portfolio.  Past performance is not indicative of future performance.  Investors whose reference currency differs from that in which the underlying assets are invested may be subject to exchange rate movements that alter the value of their investments.

The following represents the noted percentages of the Alger 35 strategy as of 1/31/22: Shopify, Inc. 3.63%; Block, Inc. 1.92%; Marqeta, Inc. 1.89%; Amazon.com, Inc. 4.81%; DoorDash, Inc. 0%; Uber Technologies, Inc. 0%; and JPMorgan Chase & Co. 0%.

Important Information for US Investors: This material must be accompanied by the most recent fund fact sheet(s) if used in connection with the sale of mutual fund and ETF shares. Fred Alger & Company, LLC serves as distributor of the Alger mutual funds.

Before investing, carefully consider the Fund’s investment objective, risks, charges, and expenses. For a prospectus and summary prospectus containing this and other information or for the Fund’s most recent month-end performance data, visit www.alger.com, call (800) 223 3810or consult your financial advisor.  Read the prospectus and summary prospectus carefully before investing. Distributor: Fred Alger & Company, LLC. NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE.

Fred Alger & Company, LLC 100 Pearl Street, New York, NY 10004 / 800.305.8547 / www.alger.com
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ETF Investors

This ETF is different from traditional ETFs.

Traditional ETFs tell the public what assets they hold each day. This ETF will not. This may create additional risks for your investment. Specifically:

You may have to pay more money to trade the ETF’s shares. This ETF 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 the ETF’s portfolio. The same is true when you sell shares. These price differences may be greater for this ETF compared to other ETFs because it provides less information to traders.

These additional risks may be even greater in bad or uncertain market conditions.

The differences between this ETF and other ETFs may also have advantages. By keeping certain information about the ETF confidential, this ETF may face less risk that other traders can predict or copy its investment strategy. This may improve the ETF’s performance. If other traders are able to copy or predict the ETF’s investment strategy, however, this may hurt the ETF’s performance. For additional information regarding the unique attributes and risks of this ETF, please refer to the prospectus.

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