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​Cracks in the Foundation?

Housing is important to the economy, representing approximately $38 trillion or approximately a quarter of household assets. It is also a huge component of inflation and a sector of the economy that is very interest rate sensitive.

​Housing is important to the economy, representing approximately $38 trillion or approximately a quarter of household assets. It is also a huge component of inflation and a sector of the economy that is very interest rate sensitive. These factors likely make it a key focus of ​the Federal Reserve’s (The Fed’s) tightening policy. Is the housing foundation stable?​​
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​Housing affordability index chart​​​​​​​​
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  • The housing market represents one-third of the Consumer Price Index and therefore is a big part of the high inflation that the Fed is trying to mitigate. Additionally, it is a large source of American wealth that is susceptible to the Fed’s tools, given that higher interest rates make buying homes less affordable, thereby slowing housing activity
  • With the one-two punch of rising home prices and interest rates over the past year, housing affordability has declined significantly. While official numbers are not yet out, we estimate April 2022 affordability plummeted to levels not seen since the housing bubble of 2007.
  • Less affordable housing may portend slowing home buying, building and remodels. It may also slow consumer spending and in particular impact household durable products, including homebuilding supplies, home furnishings, and household appliances.
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The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. ​

​The views expressed are the views of Fred Alger Management, LLC as of May 2022. These views are subject to change at any time and may not represent the views of all portfolio management teams. These views should not be interpreted as a guarantee of the future performance of the markets, any security or any funds managed by Fred Alger Management, LLC. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

T​his 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.​

​​Risk Disclosure: Investing in the stock market involves certain 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. 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.

​Fred Alger & Company, LLC 100 Pearl Street, New York, NY 10004 / www.alger.com
​ 800.305.8547 (Retail) / 800.223.3810 (Institutional)​
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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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