The strategy has usually worked best in bull markets. In 2008 when the bear market struck, the growth-oriented Alger Funds, including China-U.S., lagged their peers. The tide turned in the bull market of 2009, however, when a number of the company's funds delivered chart-topping performance. Over the five-year period ending that year, three of them landed in the top 1% of their Morningstar categories and another three
made the top 10%. Alger China-U.S. was the top performing world stock fund in that period.
The successes are welcome at Fred Alger Management, which has experienced tragedy, coupled with wrenching changes, over the last decade. Thirty-five people in the firm's 55-person World Trade Center headquarters staff were lost in the September 11, 2001 disaster. Chung, then 39, might have been one of them had he not been in Midtown Manhattan speaking to the management of Tyco Industries. Chung, who joined the firm in 1994, became its most senior member with the death of CEO and relative David Alger. (Chung married Fred Alger's daughter Alexandra in 1993.) After David Alger died, Chung's role expanded quickly, as he was named CIO in September 2001, president in 2003 and CEO in 2006.
The years after 9/11 were a time of difficult transition. Chung's father-in-law Fred Alger, who had left the firm years earlier, returned after the disaster to set up a management committee to run day-to-day activities. He bowed out again in 2002 and has not returned.
Assets under management, which had grown in the late 1990s, sank with the stock market, and the firm's assets were hurt further by investors' shift in the early 2000s from growth to value stocks. The sting of the 2008 bear market was particularly bad for growth shops.
But Chung believes 2009 was a watershed year and sees better times ahead for the firm, which now has some $13.5 billion in assets under management. "In 2001, people asked me how we were going to rebuild and succeed. I knew then that the key to our success was to remain true to our investment philosophy and process. That's still true today," he says. "I think our recent investment results speak for themselves."