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​Periods of Pain: Shorter Than You Think​

Corporations’ capacity for preserving earnings may help shorten future recessions. So, while it may make sense to plan for a potential recession, one may also want to prepare for potential subsequent recovery because periods of pain may be short lived.

Acute adversity makes time seem to stand still, but periods of deep economic pain such as recessions have become shorter. Understanding factors that have driven this trend may help investors manage fears about recessions and avoid panic selling just prior to an uptick in market sentiment.

​​​​Recessions Get Shorter chart
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  • The average duration of recessions has dropped dramatically from 22 months to only 11, (see above). Unusual events such as the Global Financial Crisis that started in 2007 can create exceptions, but we believe powerful changes are contributing to recessions, on average, becoming shorter.

  • With technology, businesses maintain inventory in real time. When the economy contracts, excess inventories are minimized, thereby reducing the need to discount prices. In our view, technology has also facilitated the “gig economy” consisting of an increased number of part-time workers so the size of the workforce can quickly be adjusted to reflect economic conditions.

  • We believe that the economy is also more heavily weighted toward asset-light services. For example, unlike traditional resort companies, online reservation services don’t have costs associated with underutilized hotel rooms when the economy weakens. Similarly, ride hailing services, unlike traditional limo companies, don’t have costs associated with owning vehicles.

  • Corporations’ capacity for preserving earnings may help shorten future recessions. So, while it may make sense to plan for a potential recession, one may also want to prepare for potential subsequent recovery because periods of pain may be short lived.
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​​​The views expressed are the views of Fred Alger Management, LLC (“FAM”) and its affiliates as of July 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 FAM. These views are not meant to provide investment advice and should not be considered a ​recommendation to purchase or sell securities.

​​ Risk Disclosures: 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. Foreign securities and Emerging Markets involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility.
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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.
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​​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 ​

Important Information for UK and EU Investors: This material is directed at investment professionals and qualified investors (as defined by MiFID/FCA regulations). It is for information purposes only and has been prepared and is made available for the benefit investors. This material does not constitute an offer or solicitation to any person in any jurisdiction in which it is not authorised or permitted, or to anyone who would be an unlawful recipient, and is only intended for use by original recipients and addressees. The original recipient is solely responsible for any actions in further distributing this material and should be satisfied in doing so that there is no breach of local legislation or regulation. ​

​Certain products may be subject to restrictions with regard to certain persons or in certain countries under national regulations applicable to such persons or countries.

​Alger Management, Ltd. (company house number 8634056, domiciled at 78 Brook Street, London W1K 5EF, UK) is authorised and regulated by the Financial Conduct Authority, for the distribution of regulated financial products and services. FAM and/or Weatherbie Capital, LLC, U.S. registered investment advisors, serve as sub-portfolio manager to financial products distributed by Alger Management, Ltd.

Alger Group Holdings, LLC (parent company of FAM and Alger Management, Ltd.), FAM, and Fred Alger & Company, LLC are not authorized persons for the purposes of the Financial Services and Markets Act 2000 of the United Kingdom (“FSMA”) and this material has not been approved by an authorized person for the purposes of Section 21(2)(b) of the FSMA.
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Important information for Investors in Israel: This material is provided in Israel only to investors of the type listed in the first schedule of the Securities Law, 1968 (the “Securities Law”) and the Regulation of Investment Advice, Investment Marketing and Investment Portfolio Management Law, 1995. The Fund units will not be sold to investors who are not of the type listed in the first schedule of the Securities Law.

​ 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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