NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1--GENERAL:
The Alger American Fund (the "Fund") is a diversified, open-end registered investment company organized as an
unincorporated business trust under the laws of the Commonwealth of Massachusetts. The Fund operates as a
series company currently issuing six series of shares of beneficial interest: American Growth Portfolio, American
Small Capitalization Portfolio, American Income and Growth Portfolio, American Balanced Portfolio, American
MidCap Growth Portfolio and American Leveraged AllCap Portfolio (collectively "the Portfolios"). The
American Growth Portfolio, American Small Capitalization Portfolio, American MidCap Growth Portfolio and
American Leveraged AllCap Portfolio invest primarily in equity securities and each has an investment objective of
long-term capital appreciation. The American Income and Growth Portfolio's primary investment objective is to
provide a high level of dividend income by investing primarily in dividend-paying equity securities; capital
appreciation is a second objective. The American Balanced Portfolio's investment objectives are current income
and long-term capital appreciation which it seeks to achieve through investing in equity and fixed income
securities. Shares of the Portfolios are available and are being marketed exclusively as a pooled funding vehicle
for qualified retirement plans and for life insurance companies writing all types of variable annuity contracts and
variable life insurance policies.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:
(a) INVESTMENT VALUATION: Investments of the Portfolios are valued on each day the New York Stock
Exchange ("NYSE") is open as of the close of the NYSE (normally 4:00 p.m. Eastern time). Listed and unlisted
securities for which such information is regularly reported are valued at the last reported sales price or, in the
absence of reported sales, at the mean between the bid and the asked price, or, in the absence of a recent bid or
asked price, the equi