| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 8.6% | 1.8% | 0.5% |
The Alger Weatherbie Specialized Growth Fund focuses on secular growth themes including corporate digitization, cloud computing expansion, and artificial intelligence at an inflection point. The fund outperformed its Russell 2500 Growth Index benchmark during Q4 2025, with strong contributions from biotechnology holdings Natera, ACADIA Pharmaceuticals, and Glaukos, which benefited from strong earnings, FDA approvals, and revenue growth acceleration. The portfolio maintains significant exposure to healthcare and industrials while being underweight information technology. Key detractors included FirstService Corp due to cyclical weakness in restoration and roofing businesses, and Kratos Defense amid government shutdown delays affecting cash receipts. The manager sees attractive opportunities driven by AI infrastructure investment, business spending acceleration from tax incentives, and continued Federal Reserve easing. However, risks include labor market softening, cautious consumer behavior, and housing market pressure. The fund's positioning reflects confidence in secular digitization trends while navigating near-term macro uncertainties through selective stock picking in small and mid-cap growth companies.
The fund focuses on secular growth themes including corporate digitization, cloud computing expansion, and artificial intelligence at an inflection point, while positioning in small and mid-cap companies with promising growth potential across healthcare, industrials, and technology sectors.
The manager maintains a constructive baseline for the S&P 500 Index while acknowledging mounting cross-currents in the macroeconomic backdrop. They continue to observe secular themes creating attractive investment opportunities, particularly around corporate digitization, cloud computing growth, and AI at an inflection point. U.S. business spending acceleration driven by AI infrastructure demand and tax incentives provides a supportive backdrop for their investment approach.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 15 2026 | 2025 Q4 | ACAD, AIR, FSV, GKOS, KTOS, NTRA | AI, Biotechnology, defense, growth, healthcare, industrials, small cap, technology |
NTRA ACAD GKOS FSV AIR KTOS |
The market's biggest tailwind was continued investment tied to artificial intelligence, though increasingly accompanied by scrutiny around AI infrastructure bottlenecks, sources of financing, and whether the AI theme could deliver returns commensurate with the capital deployed. AI is at an inflection point, potentially enabling significant increases in productivity. Cloud computing is growing and supporting innovation as corporations are digitizing their operations. This represents one of the secular themes creating attractive investment opportunities. Portfolio includes significant exposure to biopharmaceutical companies like Natera with genetic testing platforms, ACADIA Pharmaceuticals focused on CNS disorders, and Glaukos developing ophthalmic medical technologies. These companies are advancing novel therapies and diagnostic capabilities. Investment in Kratos Defense & Security Solutions reflects focus on affordable unmanned systems, hypersonics and rocket systems, and satellite command-and-control, which are increasingly aligned with U.S. and allied priorities around rapid fielding and scalable production. |
| Oct 21 2025 | 2025 Q3 | AORT, PI, PLMR, SMTC, SPSC, VRTX | AI, Automation, Cloud, Digitization, small caps |
PI AORT SPSC PLMR VERX PI AORT SPSC PLMR VERX |
The fund underperformed as small- and mid-cap tech and health care names faced pressure amid shifting macro conditions. Managers remain focused on growth opportunities in digitization, cloud adoption, and AI infrastructure, where companies like Semtech and Impinj are showing strong product momentum. The team expects secular tailwinds in automation and connectivity to drive long-term growth. |
| Jul 22 2025 | 2025 Q2 | ACAD, NEO, NEOG, RXO, STRL, UPST | Compounding, earnings, growth, innovation, Resilience |
STRL UPST ACAD NEOG RXO NEO |
The letter focuses on companies with durable growth profiles benefiting from secular innovation, strong balance sheets, and expanding end markets. Management highlights disciplined stock selection amid market volatility, emphasizing earnings resilience and long-term compounding rather than short-term macro noise. Growth opportunities are framed around companies capable of sustaining above-average revenue and cash flow expansion. |
| Mar 31 2025 | 2025 Q1 | AGYS, PGNY, PLMR, SMTC, UPST, VSEC | - | - | |
| Dec 31 2024 | 2024 Q4 | MEG, NEOG, NTRA, SMTC, TNDM, UPST | - | - | |
| Sep 30 2024 | 2024 Q3 | HLNE, MEG, NTRA, PGNY, PRO, STEP | - | - | |
| Jul 31 2024 | 2024 Q2 | GKOS, NTRA, PGNY, SITE, SPT, STEP | - | - | |
| Apr 15 2024 | 2024 Q1 | ACAD, CWST, NTRA, NVRO, PI, XMTR | - | - | |
| Dec 31 2023 | 2023 Q4 | ACAD, CLB, FLYW, NTRA, STEP, VERX | - | - | |
| Sep 30 2023 | 2023 Q3 | AGTI, INSP, NOVT, OLLI, STEP, VERX | - | - | |
| Jun 30 2023 | 2023 Q2 | INSP, NVRO, PI, PLNT, SITE, SPSC | - | - | |
| Mar 31 2023 | 2023 Q1 | CHGG, FSV, MEG, SPSC, VERX, XMTR | - | - | |
| Dec 31 2022 | 2022 Q4 | CLB, GDYN, GKOS, MEG, PI, XMTR | - | - | |
| Sep 30 2022 | 2022 Q3 | AMRC, CLB, DH, DRQ, PI, SPSC | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
BiotechnologyHealthcare industry positioned for catch-up growth after several years of below-trend performance. Government spending expected to increase relative to feared cuts, with companies signaling improvement in revenue growth. Focus on 'picks & shovels' businesses serving the industry. |
Life Science Tools Pharmaceuticals CRO & CDMO Healthcare Research | |
CloudAmazon's positioning to benefit from both infrastructure and application layers of AI is highlighted. The company's logistical prowess represents one of the foremost moats in business and will be enhanced with AI through better orchestration of logistics assets and buildout of more sophisticated robotics. |
Infrastructure Logistics Automation Efficiency Coordination | |
DefenseThe team initiated a position in Curtiss-Wright, believing the company is entering a period where multiple near-term growth drivers are converging, including rising defense budgets, commercial aerospace production ramps, nuclear power plant life extensions and new builds, and submarine production. |
Defense Budgets Aerospace Nuclear Submarines | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
CloudAmazon's positioning to benefit from both infrastructure and application layers of AI is highlighted. The company's logistical prowess represents one of the foremost moats in business and will be enhanced with AI through better orchestration of logistics assets and buildout of more sophisticated robotics. |
Infrastructure Logistics Automation Efficiency Coordination | |
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy | |
| 2025 Q2 |
Growth |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 21, 2025 | Fund Letters | H. George Dai | PLMR | Palomar Holdings | Financials | Property & Casualty Insurance | Bear | NASDAQ | Catastrophe, combined ratio, guidance, Margins, premiums, specialty insurance, underwriting | Login |
| Jan 15, 2026 | Fund Letters | H. George Dai | FSV | FirstService Corporation | Real Estate | Real Estate Services | Bear | NASDAQ | Cyclicality, Macro, Property_Management, services, Weather | Login |
| Oct 21, 2025 | Fund Letters | H. George Dai | VERX | Vertex Inc. | Information Technology | Application Software | Bear | NASDAQ | Bookings, Compliance, Demand, ERP, Guidance cut, Sales cycles, Tax software | Login |
| Jan 15, 2026 | Fund Letters | H. George Dai | AIR | AAR Corp. | Industrials | Aerospace & Defense | Bear | New York Stock Exchange | Aerospace, aftermarket, Cyclicality, Defense, Governance | Login |
| Oct 21, 2025 | Fund Letters | H. George Dai | PI | Impinj Inc. | Information Technology | Semiconductor Equipment | Bull | NASDAQ | Adoption, Endpoints, Item-level tracking, operating leverage, Readers, RFID, supply chain | Login |
| Jan 15, 2026 | Fund Letters | H. George Dai | KTOS | Kratos Defense & Security Solutions, Inc. | Industrials | Aerospace & Defense | Bear | NASDAQ | cashflow, Defense, Drones, Government, Hypersonics | Login |
| Oct 21, 2025 | Fund Letters | H. George Dai | AORT | Artivion Inc. | Health Care | Medical Devices | Bull | NYSE | Aortic, cardiovascular, Devices, guidance, operating leverage, pipeline, Stent graft | Login |
| Oct 21, 2025 | Fund Letters | H. George Dai | SPSC | SPS Commerce | Information Technology | Application Software | Bear | NASDAQ | Deceleration, Edi, guidance, Outlook, SaaS, Sales cycles, supply chain | Login |
| Oct 21, 2025 | Fund Letters | H. George Dai | PLMR | Palomar Holdings | Financials | Property & Casualty Insurance | Bear | NASDAQ | Catastrophe, combined ratio, guidance, Margins, premiums, specialty insurance, underwriting | Login |
| Oct 21, 2025 | Fund Letters | H. George Dai | VERX | Vertex Inc. | Information Technology | Application Software | Bear | NASDAQ | Bookings, Compliance, Demand, ERP, Guidance cut, Sales cycles, Tax software | Login |
| Jul 22, 2025 | Fund Letters | H. George Dai | STRL | Sterling Infrastructure, Inc. | Industrials | Construction & Engineering | Bull | NASDAQ | backlog, construction, Cyclical, datacenters, infrastructure | Login |
| Jul 22, 2025 | Fund Letters | H. George Dai | UPST | Upstart Holdings, Inc. | Financials | Consumer Finance | Bull | NASDAQ | AI, Credit, Fintech, growth, Lending | Login |
| Jul 22, 2025 | Fund Letters | H. George Dai | ACAD | Acadia Pharmaceuticals Inc. | Health Care | Biotechnology | Bull | NASDAQ | biopharma, growth, Neurology, Prescriptions, Raredisease | Login |
| Jul 22, 2025 | Fund Letters | H. George Dai | NEOG | Neogen Corporation | Health Care | Health Care Supplies | Bear | NASDAQ | Animals, diagnostics, Foodsafety, guidance, restructuring | Login |
| Jul 22, 2025 | Fund Letters | H. George Dai | RXO | RXO, Inc. | Industrials | Trucking | Bull | NYSE | Cyclical, efficiency, Freight, Logistics, Volumes | Login |
| Jul 22, 2025 | Fund Letters | H. George Dai | NEO | NeoGenomics, Inc. | Health Care | Life Sciences Tools & Services | Bull | NASDAQ | acquisition, diagnostics, guidance, Labs, Oncology | Login |
| Oct 21, 2025 | Fund Letters | H. George Dai | PI | Impinj Inc. | Information Technology | Semiconductor Equipment | Bull | NASDAQ | Adoption, Endpoints, Item-level tracking, operating leverage, Readers, RFID, supply chain | Login |
| Jan 15, 2026 | Fund Letters | H. George Dai | NTRA | Natera, Inc. | Health Care | Diagnostics & Research | Bull | NASDAQ | diagnostics, Genomics, growth, Oncology, Reimbursement | Login |
| Oct 21, 2025 | Fund Letters | H. George Dai | AORT | Artivion Inc. | Health Care | Medical Devices | Bull | NYSE | Aortic, cardiovascular, Devices, guidance, operating leverage, pipeline, Stent graft | Login |
| Jan 15, 2026 | Fund Letters | H. George Dai | ACAD | ACADIA Pharmaceuticals Inc. | Health Care | Biotechnology | Bull | NASDAQ | Biotech, CNS, FDA, growth, Orphan_Drugs | Login |
| Oct 21, 2025 | Fund Letters | H. George Dai | SPSC | SPS Commerce | Information Technology | Application Software | Bear | NASDAQ | Deceleration, Edi, guidance, Outlook, SaaS, Sales cycles, supply chain | Login |
| Jan 15, 2026 | Fund Letters | H. George Dai | GKOS | Glaukos Corporation | Health Care | Medical Devices | Bull | New York Stock Exchange | FDA, growth, innovation, Medical_Devices, Ophthalmology | Login |
| TICKER | COMMENTARY |
|---|---|
| ACAD | Acadia Pharmaceuticals is a biopharmaceutical company focused on developing and commercializing medicines that address unmet needs in central nervous system (CNS) disorders. Its products include Nuplazid, for the treatment of hallucinations and delusions associated with Parkinson's disease psychosis, and Daybue, for Rett syndrome—a rare genetic disorder that affects brain development in children. Shares contributed positively during the quarter after the company reported better-than-expected third-quarter 2025 results that reinforced momentum across its two commercial franchises: Nuplazid saw solid demand and new patient activity, while Daybue posted strong referral trends. Sentiment was further supported late in the quarter by the FDA's approval of DAYBUE STIX, a new powder formulation, underscoring continued franchise investment. |
| AIR | AAR Corp. is a global aerospace and defense aftermarket services provider that supports commercial airlines and government customers through parts distribution and supply-chain solutions, as well as maintenance, repair, and overhaul services—an area we believe is structurally supported by high aircraft utilization and an aging fleet. During the quarter, shares detracted from performance amid investor uncertainty following the company's early-December announcement of a Chief Financial Officer transition; however, we believe underlying demand trends across AAR's end markets remain healthy. |
| FSV | Our lone position in Real Estate during the fourth quarter, FirstService, was the portfolio's largest negative contributor. The company specializes in residential management and storm restoration, but it struggled following a soft Q3, as its newly acquired commercial roofing business experienced a slower than expected conversion of its backlog. Additionally, certain large projects have been on hold following a volatile macro environment. This has been happening for several quarters, and the lack of progress has been disappointing. We expect growth to bottom in Q4 and then pick back up, driven by expansion in its remaining business lines. |
| GKOS | Glaukos following approval of a new product |
| KTOS | Kratos Defense & Security Solutions is a defense technology company focused on affordable unmanned systems, hypersonics and rocket systems, and satellite command-and-control, which we believe are increasingly aligned with U.S. and allied priorities around rapid fielding and scalable production. Kratos has invested deliberately in parts of the defense supply chain that we believe are increasingly critical to modern warfare and are now reaching an inflection point. Funding is beginning to flow into drone programs, demand for turbojet and turbofan engines is rising across unmanned aircraft and missile systems, and the company's C5ISR and space businesses continue to grow rapidly. While the company reported strong fiscal third-quarter operating results, shares detracted after management's fiscal fourth-quarter revenue outlook and free-cash-flow expectations came in below analyst estimates. Sentiment was further pressured by management commentary that cash receipts were being delayed due to the U.S. government shutdown, as well as ongoing cost headwinds tied to certain legacy unmanned contracts, which weighed on confidence in near-term margins and cash conversion. |
| NTRA | Not owning Natera, Inc. (NTRA) detracted from performance. The stock rose after its earnings announcement, signaling a strong revenue beat. |
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