Alger Mid Cap Growth Fund Q1 2026 Portfolio Review

Class A shares of the Alger Mid Cap Growth Fund underperformed the Russell Midcap Growth Index in the first quarter of 2026. FTAI Aviation Ltd., Vertiv Holdings Co. and Comfort Systems USA were among the top contributors, while Repligen Corporation, AppLovin Corp. and Carvana Co. were the main detractors. The note is primarily a performance attribution update with limited market-wide implications.

Analysis

The dispersion here is telling us more about factor placement than pure fundamentals. The winners are clustered in companies with visible operating leverage and/or “make-or-break” earnings credibility, while the laggards are names where positioning had likely gotten ahead of achievable near-term execution. In a market that is still rewarding self-help and punishing any miss on growth durability, the second-order effect is a widening gap between industrial/infra compounding stories and consumer/internet or life-science names that need multiple quarters of clean prints to re-rate.

The key technical risk is that the outperformers may now be crowded longs after a quarter of relative strength, making them vulnerable to de-grossing or any macro wobble in rates. That matters because the losers are not necessarily broken businesses; they are often the first source of funds when PMs cut exposure, which can extend drawdowns well beyond what fundamentals justify. On the other hand, if flows remain momentum-driven, the relative leadership can persist for another 1-2 quarters even without additional estimate revisions.

The contrarian setup is strongest in the detractors: when a mid-cap growth basket underperforms, the market often extrapolates one bad quarter into a slower terminal growth regime. If the underlying issue is mostly sentiment/positioning rather than a demand collapse, the rebound can be sharp once expectations reset and short interest is forced to cover. The most attractive trades are therefore not outright hero longs, but pairs that monetize the gap between “priced for perfection” and “priced for disappointment.”

Key Decisions for Investors

• Maintain/add to VRT/FIX relative longs versus RGEN and CVNA for the next 4-8 weeks; the best risk/reward is in continuing leadership names versus names needing multiple clean quarters to rebuild trust.
• Initiate a pair trade: long VRT or FIX / short RGEN on a 1-2 month horizon, looking for 8-12% relative outperformance if market keeps rewarding earnings visibility and operating leverage.
• Use CVNA as a tactically shorted hedge against a broader mid-cap growth long book; if sentiment weakens further, downside can accelerate 15-20% on de-risking, while borrow/short squeeze risk argues for options over outright size.