Alger On the Money

Innovation Fireworks

When Americans hit the beach and fire up their grills this July 4th there will be much to celebrate. While the U.S. leads the world in many industries, its strong position in technology may be among the most important factors in its future success.

The U.S. Dominates the MSCI AC World Index Technology Sector

Share of Tech Sector (%) 70.3

7.7 5.4 4.54.4 1.9 1.3 0.90.9 0.7 0.50.4 0.40.3 U.S. China Japan S. Korea Taiwan Germany Netherlands France India Canada Sweden Finland Spain U.K.

Source: FactSet as of 04/30/18.

• U.S. companies represent more than half of the MSCI All Country World Index’s market capitalization. Impressively, U.S. companies comprise over 70% of the index’s technology sector market value. • Spending about half a trillion dollars on research and development (R&D), the U.S. leads the world; R&D investments are approximately one third larger in the U.S. than in the European Union. • Importantly, U.S. R&D is of the highest quality, with the World Intellectual Property Organization ranking the U.S. as the global leader in innovation quality based on strong universities, wide globalization of local inventions, and heavily cited research publications.1 • Driving these impressive fundamentals are the passion to innovate and entrepreneurial spirit of risk-taking in the U.S.

1 The Global Innovation Index 2017.

Inspired by Change, Driven by Growth. The views expressed are the views of Fred Alger Management, Inc. as of June 2018. These views are subject to change at any time and they do not guarantee the future performance of the markets, any security or any funds managed by Fred Alger Management, Inc. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities. Risk Disclosure: Investing in the stock market involves gains and losses and may not be suitable for all investors. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Many technology companies have limited operating histories and prices of these companies’ securities have historically been more volatile than other securities, especially over the short term. Technology companies may also face increased competition, government regulation, and risk of obsolescence due to progress in technological developments.

Fred Alger & Company, Incorporated 360 Park Avenue South, New York, NY 10010 / www.alger.com AOM 6.6.18 800.305.8547 (Retail) / 212.806.8869 (Institutional)