In the fourth quarter of 2025, the Alger Mid Cap Focus Fund (ALOAX) experienced a period of underperformance relative to its benchmark, the Russell Midcap Growth Index. This period saw a mix of positive and negative influences on the fund's overall results, reflecting the dynamic nature of the market and the specific circumstances of its holdings. The fund's strategy focuses on identifying companies with strong growth potential, and its performance is inherently tied to the success and challenges faced by these selected enterprises.
Several companies made significant positive contributions to the fund's performance. Exact Sciences Corporation, for instance, saw its shares rise considerably due to an all-cash acquisition offer from Abbott, which provided a substantial premium for its stock. Similarly, Natera, Inc. and Guardant Health, Inc. both delivered strong earnings, benefited from increased test volumes, and saw favorable reimbursement trends, particularly in oncology testing, leading them to raise their full-year 2025 revenue and margin guidance. Conversely, some holdings adversely affected the fund's performance. Roblox Corp. experienced a decline in share value due to increased reinvestment in its platform and higher operational expenses. Robinhood Markets, Inc. was impacted by a notable downturn in the cryptocurrency markets. Nebius Group also faced headwinds from volatility in the AI infrastructure sector and investor apprehensions regarding the financing ecosystem for its projects.
The investment landscape is perpetually shifting, presenting both opportunities and obstacles. For the Alger Mid Cap Focus Fund, navigating these changes requires continuous diligence, adaptability, and a forward-looking perspective. Identifying companies with robust fundamentals and innovative potential remains crucial. The fund's ability to capitalize on market advancements while strategically managing risks associated with underperforming assets will determine its long-term success, ultimately fostering growth and resilience in investor portfolios.
