================================================================================
SEMI-ANNUAL REPORT
------------------
June 30, 2000
------------------
Value Line
Leveraged Growth
Investors, Inc.
[LOGO]
------------
VALUE LINE
No-Load
Mutual
Funds
<PAGE>
Value Line Leveraged Growth Investors, Inc.
To Our Value Line Leveraged
--------------------------------------------------------------------------------
To Our Shareholders:
Equity investors have encountered a variety of market climates over the first
six months of 2000. The year started out with a continuation of the strong price
appreciation stretching back into the third quarter of 1999. In this
environment, the NASDAQ Composite hit a string of record highs, and technology
and other growth stocks performed well. By early March, however, the reality of
rapid economic growth and the resultant string of interest-rate hikes engineered
by the Federal Reserve reversed earlier market psychology. Stock prices
collapsed, and technology and other growth vehicles bore the brunt of the
damage.
Since about the beginning of June, however, it seems that the tighter monetary
policy that has been in place since June of 1999 has begun to filter into the
economy, and we have seen several indications that the breakneck GDP expansion
that carried through this year's March quarter has begun to ease up. Statistics
in the areas of manufacturing, wage rates, housing, retail sales, and employment
growth all suggest that a soft landing may be under way.
Thus, stocks ended the quarter somewhat off balance, neither as strong as in the
early weeks of this year nor as weak as the midsection. When the dust settled,
however, Value Line Leveraged Growth Investors ended up the first half of the
year ahead of the unmanaged S&P 500 by a small margin and for the trailing
twelve months our Fund outperformed its benchmark by almost eleven percentage
points. The actual numbers are as follows:
Leveraged
Growth
Investors S&P 500
--------- -------
First half ................. 1.88% -0.42%
Trailing twelve months ..... 18.13% 7.25%
Looking ahead, we believe that the tendency toward slower (but still healthy)
economic growth that we've seen recently will prevail for the foreseeable
future. (For more detail, see our Economic Observations nearby) That, along with
a benign inflation backdrop, should provide a constructive atmosphere for equity
investing over the balance of the year. Success with common stocks will likely
require a certain amount of selectivity, since not all stocks will prosper under
circumstances of slower overall growth. Therefore, those stocks that score
highly in the time-tested Value Line Timeliness Ranking System will continue to
provide the foundation for our growth investment style.
We thank you for your continued confidence in Value Line, and we wish you the
best for the rest of 2000 and beyond.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
August 4, 2000
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2
<PAGE>
Value Line Leveraged Growth Investors, Inc.
Growth Investors Shareholders
--------------------------------------------------------------------------------
Economic Observations
The American economy appears to be on a somewhat slower growth track as we move
through the early stages of the second half of calendar 2000. Evidence of this
deceleration in business activity can be found in recent surveys on
manufacturing, housing, auto sales, and employment. Overall, we now estimate
that GDP growth will average 3.0%-3.5% during the third and fourth quarters.
Thereafter, we would expect the pace of economic activity to hold at these
comparatively restrained levels through at least the first half of 2001, as the
succession of interest-rate hikes voted for by the Federal Reserve Board over
the past year, or so, continues to have the hoped-for effect of stabilizing the
economy at comfortable growth levels.
Inflationary pressures, meanwhile, continue to be held in check for the most
part, with sustained increases in productivity and ongoing technological
innovations being at least partially responsible for this comparative pricing
stability. Nevertheless, a moderate increase in cost pressures could still
evolve over the next few quarters, particularly if energy prices increase
further and the aforementioned moderation in second-half GDP growth fails to
evolve as we expect it will. The Federal Reserve, taking note of this potential
for higher prices, meanwhile, is likely to keep a vigilant eye on the monetary
situation, standing ready to raise interest rates further should it deem
inflation to be a problem. Absent an unexpected price flareup, we believe the
recent credit tightening cycle will shortly run its course.
*Performance Data:
Growth of
Average an Assumed
Annual Investment of
Total Return $10,000
------------ -------------
1 year ended 6/30/2000 ....................... 18.13% $11,813
5 years ended 6/30/2000 ...................... 25.92% $31,660
10 years ended 6/30/2000 ...................... 19.07% $57,296
* The performance data quoted represent past performance and are no guarantee
of future performance. The average annual total returns and growth of an
assumed investment of $10,000 include dividends reinvested and capital gains
distributions accepted in shares. The investment return and principal value
of an investment will fluctuate so that an investment, when redeemed, may be
worth more or less than its original cost.
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3
<PAGE>
Value Line Leveraged Growth Investors, Inc.
Portfolio Highlights at June 30, 2000 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ten Largest Holdings
Value Percentage
Issue Shares (in thousands) of Net Assets
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ADC Telecommunications, Inc. ................................. 400,000 $ 33,550 4.5%
EMC Corp. .................................................... 350,000 26,928 3.6
American International Group, Inc. ........................... 225,000 26,437 3.5
Dell Computer Corp. .......................................... 500,000 24,656 3.3
Harley-Davidson, Inc. ........................................ 640,000 24,640 3.3
Intel Corp. .................................................. 180,000 24,064 3.2
America Online, Inc. ......................................... 400,000 21,100 2.8
PMC-Sierra, Inc. ............................................. 110,000 19,546 2.6
Cisco Systems, Inc. .......................................... 300,000 19,069 2.5
Home Depot, Inc. (The) ....................................... 360,000 17,978 2.4
<CAPTION>
Five Largest Industry Categories
Value Percentage
Industry (in thousands) of Net Assets
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Computer & Peripherals ....................................... $ 80,514 10.8%
Telecommunications Equipment ................................. 63,932 8.5
Computer Software & Services ................................. 54,281 7.3
Financial Services-Diversified ............................... 46,944 6.3
Semiconductor ................................................ 46,661 6.2
<CAPTION>
Five Largest Security Purchases*
Cost
Issue (in thousands)
-----------------------------------------------------------------------------------------------------------
<S> <C>
HCA-The Healthcare Corporation ............................... $ 6,195
Corning Inc. ................................................. 5,930
Oracle Corp. ................................................. 5,791
Alcoa, Inc. .................................................. 5,240
Motorola, Inc. ............................................... 4,369
<CAPTION>
Five Largest Security Sales*
Proceeds
Issue (in thousands)
-----------------------------------------------------------------------------------------------------------
<S> <C>
Cisco Systems, Inc. .......................................... $ 15,664
Intel Corp. .................................................. 14,081
EMC Corp. .................................................... 12,696
Staples, Inc. ................................................ 6,260
Williams-Sonoma, Inc. ........................................ 3,928
</TABLE>
* For the six month period ended 06/30/00
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4
<PAGE>
Value Line Leveraged Growth Investors, Inc.
Schedule of Investments (unaudited) June 30, 2000
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Value
Shares (in thousands)
--------------------------------------------------------------------------------
COMMON STOCKS (97.6%)
ADVERTISING (2.4%)
200,000 Omnicom Group, Inc............................. $ 17,813
BANK (2.1%)
60,000 Chase Manhattan Corp........................... 2,764
80,000 State Street Corp.............................. 8,485
100,000 Zions Bancorporation........................... 4,589
--------
15,838
BANK-MIDWEST (2.5%)
225,000 Fifth Third Bancorp............................ 14,231
215,000 Firstar Corp................................... 4,528
--------
18,759
COMPUTER &
PERIPHERALS (10.8%)
300,000 Cisco Systems, Inc.*........................... 19,069
500,000 Dell Computer Corp.*........................... 24,656
350,000 EMC Corp.*..................................... 26,928
90,000 International Business
Machines Corp.............................. 9,861
--------
80,514
COMPUTER SOFTWARE &
SERVICES (7.3%)
90,000 Adobe Systems, Inc............................. 11,700
189,000 Computer Associates
International, Inc......................... 9,675
167,450 Fiserv, Inc.*.................................. 7,242
200,000 Microsoft Corp.*............................... 16,000
70,000 Oracle Corp.*.................................. 5,884
90,000 Paychex, Inc................................... 3,780
--------
54,281
DIVERSIFIED
COMPANIES (2.2%)
200,000 Honeywell International, Inc................... 6,737
200,000 Tyco International Ltd......................... 9,475
--------
16,212
DRUG (5.8%)
120,000 Amgen Inc.*.................................... 8,430
70,000 Biogen, Inc.*.................................. 4,515
100,000 Merck & Co., Inc............................... 7,663
216,000 Pfizer, Inc.................................... 10,368
250,000 Schering-Plough Corp........................... 12,625
--------
43,601
DRUGSTORE (0.8%)
150,000 CVS Corp....................................... 6,000
ELECTRIC UTILITY-
CENTRAL (1.2%)
200,000 AES Corp. (The)*............................... 9,125
ELECTRICAL
EQUIPMENT (3.3%)
32,000 Corning Inc.................................... 8,636
300,000 General Electric Co............................ 15,900
--------
24,536
ENTERTAINMENT (3.1%)
150,000 Clear Channel
Communications, Inc.*...................... 11,250
90,000 Time Warner, Inc............................... 6,840
75,000 Viacom, Inc. Class "A"*........................ 5,128
--------
23,218
FINANCIAL SERVICES-
DIVERSIFIED (6.3%)
90,000 American Express Co............................ 4,691
225,000 American International
Group, Inc................................. 26,437
262,500 Citigroup, Inc................................. 15,816
--------
46,944
GROCERY (1.1%)
180,000 Safeway Inc.*.................................. 8,123
INTERNET (2.8%)
400,000 America Online, Inc.*.......................... 21,100
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5
<PAGE>
Value Line Leveraged Growth Investors, Inc.
Schedule of Investments (unaudited)
--------------------------------------------------------------------------------
Value
Shares (in thousands)
--------------------------------------------------------------------------------
MEDICAL SERVICES (1.1%)
280,000 HCA-The Healthcare
Corporation................................ $ 8,505
MEDICAL SUPPLIES (4.2%)
100,000 Guidant Corp.*................................. 4,950
100,000 Johnson & Johnson.............................. 10,187
320,000 Medtronic, Inc................................. 15,940
--------
31,077
METALS & MINING-
GENERAL (0.6%)
150,000 Alcoa, Inc..................................... 4,350
PAPER & FOREST
PRODUCTS (0.3%)
75,000 International Paper Co......................... 2,236
PETROLEUM
PRODUCING (0.7%)
95,000 Apache Corp.................................... 5,587
PRECISION
INSTRUMENT (0.5%)
60,500 KLA-Tencor Corp.*.............................. 3,543
RECREATION (4.8%)
150,000 Electronic Arts Inc.*.......................... 10,941
640,000 Harley-Davidson, Inc........................... 24,640
--------
35,581
RETAIL BUILDING
SUPPLY (3.2%)
360,000 Home Depot, Inc. (The)......................... 17,978
150,000 Lowe's Companies, Inc.......................... 6,159
--------
24,137
RETAIL-SPECIAL
LINES (6.0%)
150,000 Bed Bath & Beyond Inc.*........................ 5,438
120,000 Best Buy Co., Inc.*............................ 7,590
80,000 Circuit City Stores, Inc.
-Circuit City Group ....................... 2,655
405,000 Gap, Inc. (The)................................ 12,656
240,000 Intimate Brands, Inc. Class "A"................ 4,740
140,000 RadioShack Corp................................ 6,632
80,000 Tiffany & Co................................... 5,400
--------
45,111
RETAIL STORE (4.3%)
130,000 Costco Wholesale Corp.*........................ 4,290
280,000 Kohl's Corp.*.................................. 15,575
100,000 Target Corp.................................... 5,800
110,000 Wal-Mart Stores, Inc........................... 6,339
--------
32,004
SECURITIES BROKERAGE
(1.6%)
360,000 Schwab (Charles) Corp.......................... 12,105
SEMICONDUCTOR (6.2%)
180,000 Intel Corp..................................... 24,064
105,000 Motorola, Inc.................................. 3,051
110,000 PMC-Sierra, Inc.*.............................. 19,546
--------
46,661
SEMICONDUCTOR CAPITAL
EQUIPMENT (2.5%)
95,000 Altera Corp.*.................................. 9,684
100,000 Applied Materials, Inc.*....................... 9,063
--------
18,747
STEEL-GENERAL (0.3%)
70,000 Nucor Corp..................................... 2,323
TELECOMMUNICATIONS
EQUIPMENT (8.5%)
400,000 ADC Telecom-
munications, Inc.*......................... 33,550
140,000 Lucent Technologies Inc........................ 8,295
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6
<PAGE>
Value Line Leveraged Growth Investors, Inc.
June 30, 2000
--------------------------------------------------------------------------------
Value
Shares (in thousands)
--------------------------------------------------------------------------------
TELECOMMUNICATIONS
EQUIPMENT (8.5%)
(Continued)
140,000 QUALCOMM Incorporated.......................... $ 8,400
200,000 Tellabs, Inc.*................................. 13,687
--------
63,932
TELECOMMUNICATION
SERVICES (1.1%)
40,000 Telephone & Data Systems, Inc.................. 4,010
97,500 WorldCom, Inc.*................................ 4,473
--------
8,483
--------
TOTAL COMMON STOCKS
AND TOTAL
INVESTMENT
SECURITIES (97.6%)
(Cost $278,451,000) ....................... 730,446
--------
Value
Principal (in thousands
Amount except per
(in thousands) share amount)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS (0.4%)
(including accrued interest)
$ 2,800 Collateralized by $2,711,000
U.S. Treasury Bonds 6.50%,
due 11/15/26, with a value of
$2,855,000 (with Warburg
Dillon Read LLC, 6.20%,
dated 6/30/00,
due 7/3/00, delivery value
$2,801,447)................................ $ 2,800
CASH AND OTHER ASSETS LESS
LIABILITIES (2.0%) .......................................... 14,870
--------
NET ASSETS (100.0%) ........................................... $748,116
========
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
OUTSTANDING SHARE
($748,116,207 / 12,664,918 shares of
capital stock outstanding) .................................. $ 59.07
=======
* Non-income producing
See Notes to Financial Statements.
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7
<PAGE>
Value Line Leveraged Growth Investors, Inc.
Statement of Assets
and Liabilities at June 30, 2000 (unaudited)
--------------------------------------------------------------------------------
(In thousands
except per share
amount)
-------------
Assets:
Investment securities, at value
(Cost - $278,451) .......................................... $730,446
Repurchase agreement
(Cost - $2,800) ............................................ 2,800
Cash ....................................................... 12
Receivable for capital shares sold ......................... 15,245
Dividends receivable ....................................... 215
Prepaid insurance expense .................................. 4
--------
Total Assets ......................................... 748,722
--------
Liabilities:
Payable for capital shares repurchased ..................... 63
Accrued expenses:
Advisory fee ............................................. 454
Other .................................................... 89
--------
Total Liabilities .................................... 606
--------
Net Assets ................................................. $748,116
========
Net Assets consist of:
Capital stock, at $1.00 par value
(authorized 50,000,000,
outstanding 12,664,918 shares) ........................... $ 12,665
Additional paid-in capital ................................. 233,619
Accumulated net investment loss ............................ (1,188)
Undistributed net realized gain
on investments ........................................... 51,025
Net unrealized appreciation
of investments ........................................... 451,995
--------
Net Assets ................................................. $748,116
========
Net Asset Value, Offering and
Redemption Price per
Outstanding Share
($748,116,207 / 12,664,918
shares outstanding) ...................................... $ 59.07
=======
Statement of Operations
for the six months ended June 30, 2000 (unaudited)
--------------------------------------------------------------------------------
(In thousands)
------------
Investment Income:
Dividends .................................................. $ 1,319
Interest ................................................... 539
-------
Total Income ......................................... 1,858
-------
Expenses:
Advisory fee ............................................... 2,764
Transfer agent fees ........................................ 85
Insurance, dues and other .................................. 32
Custodian fees ............................................. 30
Postage .................................................... 29
Printing ................................................... 28
Telephone .................................................. 19
Registration and filing fees ............................... 19
Auditing and legal fees .................................... 18
Commitment fee ............................................. 16
Directors' fees and expenses ............................... 7
Interest expense ........................................... 5
-------
Total Expenses Before
Custody Credits .................................... 3,052
Less: Custody Credits ................................ (6)
-------
Net Expenses ......................................... 3,046
-------
Net Investment Loss ........................................ (1,188)
-------
Net Realized and Unrealized Gain (Loss)
on Investments:
Net Realized Gain ........................................ 27,342
Change in Net Unrealized
Appreciation ........................................... (13,283)
-------
Net Realized Gain and Change in
Net Unrealized Appreciation
on Investments ........................................... 14,059
-------
Net Increase in Net Assets
from Operations .......................................... $12,871
=======
See Notes to Financial Statements.
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8
<PAGE>
Value Line Leveraged Growth Investors, Inc.
Statement of Changes in Net Assets
for the six months ended June 30, 2000
(unaudited) and for the year ended December 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
June 30, 2000 Year Ended
(unaudited) 1999
----------------------------
(In thousands)
<S> <C> <C>
Operations:
Net investment loss ....................................... $ (1,188) $ (1,837)
Net realized gain on investments .......................... 27,342 62,968
Change in net unrealized appreciation ..................... (13,283) 123,405
----------------------------
Net increase in net assets from operations ................ 12,871 184,536
----------------------------
Distributions to Shareholders:
Net realized gain from investment transactions ............ -- (64,005)
----------------------------
Capital Share Transactions:
Proceeds from sale of shares .............................. 520,830 802,337
Proceeds from reinvestment of distributions to shareholders -- 59,964
Cost of shares repurchased ................................ (548,788) (828,127)
----------------------------
Net (decrease) increase from capital share transactions ... (27,958) 34,174
----------------------------
Total (Decrease) Increase in Net Assets ..................... (15,087) 154,705
Net Assets:
Beginning of period ....................................... 763,203 608,498
----------------------------
End of period ............................................. $ 748,116 $ 763,203
============================
Accumulated net investment (loss) income, at end of period .. $ (1,188) $ --
============================
</TABLE>
See Notes to Financial Statements.
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9
<PAGE>
Value Line Leveraged Growth Investors, Inc.
Notes to Financial Statements (unaudited)
--------------------------------------------------------------------------------
1. Significant Accounting Policies
Value Line Leveraged Growth Investors, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company whose sole investment objective is to realize
capital growth. The Fund may employ "leverage" by borrowing money and using it
for the purchase of additional securities. Borrowing for investment increases
both investment opportunity and investment risk.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements.
(A) Security Valuation. Securities listed on a securities exchange and
over-the-counter securities traded on the NASDAQ national market are valued at
the closing sales prices on the date as of which the net asset value is being
determined. In the absence of closing sales prices for such securities and for
securities traded in the over-the-counter market, the security is valued at the
midpoint between the latest available and representative asked and bid prices.
Securities for which market quotations are not readily available or which are
not readily marketable and all other assets of the Fund are valued at fair value
as the Board of Directors may determine in good faith. Short-term instruments
with maturities of 60 days or less, at the date of purchase are valued at
amortized cost which approximates market value.
(B) Repurchase Agreements. In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. In
the event of default of the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization, and/or retention of the
collateral or proceeds may be subject to legal proceedings.
(C) Federal Income Taxes. It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies, including the distribution requirements of the Tax Reform Act of
1986, and to distribute all of its taxable income to its shareholders.
Therefore, no federal income tax or excise tax provision is required.
(D) Security Transactions and Distributions. Security transactions are accounted
for on the date the securities are purchased or sold. Interest income is accrued
as earned. Realized gains and losses on sales of securities are calculated for
financial accounting and federal income tax purposes on the identified cost
basis. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
(E) Amortization. Discounts on debt securities are amortized to interest income
over the life of the security with a corresponding increase to the security's
cost basis; premiums on debt securities are not amortized.
--------------------------------------------------------------------------------
10
<PAGE>
Value Line Leveraged Growth Investors, Inc.
June 30, 2000
--------------------------------------------------------------------------------
2. Capital Share Transactions, Dividends and Distributions to Shareholders
Transactions in capital stock were as follows (in thousands except per share
amounts):
Six Months
Ended
June 30, Year Ended
2000 December 31,
(unaudited) 1999
------------------------------
Shares sold ............................... 9,056 15,046
Shares issued to shareholders
in reinvestment of dividends
and distributions ....................... -- 1,082
------------------------------
9,056 16,128
Shares repurchased ........................ 9,554 15,533
------------------------------
Net (decrease) increase ................... (498) 595
==============================
Distributions per share from
net realized gains ...................... $ -- $ 5.20
==============================
3. Purchases and Sales of Securities
Purchases and sales of investment securities, excluding short-term securities,
were as follows:
Six Months Ended
June 30, 2000
(unaudited)
----------------
(in thousands)
Purchases:
Investment Securities .................................. $ 58,081
==========
Sales:
Investment Securities .................................. $ 83,659
==========
At June 30, 2000, the aggregate cost of investments securities and repurchase
agreement for federal income tax purposes, was $281,251,000. The aggregate
appreciation and depreciation of investments at June 30, 2000, based on a
comparison of investment values and their costs for federal income tax purposes
was $460,830,000 and $8,835,000, respectively, resulting in a net appreciation
of $451,995,000.
4. Investment Advisory Contract, Management Fees, and Transactions With
Affiliates
An advisory fee of $2,764,000 was paid or payable to Value Line, Inc., the
Fund's investment adviser (the "Adviser"), for the six months ended ended June
30, 2000. This was computed at the rate of 3/4 of 1% of average daily net assets
for the period and paid monthly. The Adviser provides research, investment
programs and supervision of the investment portfolio and pays costs of
administrative services, office space, equipment and compensation of
administrative, bookkeeping and clerical personnel necessary for managing the
affairs of the Fund. The Adviser also provides persons, satisfactory to the
Fund's Board of Directors, to act as officers and employees of the Fund and pays
their salaries and wages. The Fund bears all other costs and expenses.
Certain officers and directors of the Adviser and its wholly owned subsidiary,
Value Line Securities, Inc. (the Fund's distributor and a registered
broker/dealer), are also officers and a director of the Fund. During the six
months ended June 30, 2000, the Fund paid brokerage commissions totalling
$68,000 to the distributor, which clears its transactions through unaffiliated
brokers.
The Adviser and/or affiliated companies and the Value Line, Inc. Profit Sharing
and Savings Plan, owned 931,874 shares of the Fund's capital stock, representing
7.4% of the outstanding shares at June 30, 2000.
--------------------------------------------------------------------------------
11
<PAGE>
Value Line Leveraged Growth Investors, Inc.
Notes to Financial Statements (unaudited) June 30, 2000
--------------------------------------------------------------------------------
5. Borrowing Arrangement
The Fund has a line of credit agreement with State Street Bank and Trust
("SSBT"), in the amount of $37,500,000. The terms of the agreement are as
follows: The first $12.5 million is available on a committed basis which, at the
Fund's option, may be either at the Bank's prime rate or at the Federal Funds
Rate plus 1%, whichever is less, and will be subject to a commitment fee of 1/4
of 1% on the unused portion thereof; amounts in excess of $12.5 million are made
available on an unsecured basis at the same interest rate options stated above.
The Fund had no borrowings outstanding at June 30, 2000. The weighted average
amount of bank loans outstanding for the period ended June 30, 2000, amounted to
approximately $139,000 at a weighted average interest rate of 7.15%. For the six
months ended June 30, 2000, interest expense of approximately $5,000 and
commitment fees of approximately $16,000 relating to borrowings under the
agreement were paid or payable to SSBT.
6. Subsequent Event
At a special meeting of shareholders, held on June 15, 2000, the shareholders
approved the adoption of a Service and Distribution Plan (the "Plan") effective
July 1, 2000. The Plan, adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940, provides for the payment of certain expenses incurred by
the distributor in advertising, marketing and distributing the Fund's shares and
for servicing the Fund's shareholders at an annual rate of 0.25% of the Fund's
average daily net assets.
--------------------------------------------------------------------------------
12
<PAGE>
Value Line Leveraged Growth Investors, Inc.
Financial Highlights
--------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Six Months Ended Years Ended December 31,
June 30, 2000 ----------------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ............. $57.98 $48.42 $35.58 $31.51 $28.50 $23.18
-------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment (loss) income .... (.09) (.14) (.08) (.06) (.01) .09
Net gains or losses on securities
(both realized and unrealized) 1.18 14.90 14.13 7.37 6.40 8.48
-------------------------------------------------------------------------------------------
Total from investment operations 1.09 14.76 14.05 7.31 6.39 8.57
-------------------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income ............. -- -- -- -- # (.09)
Distributions from capital gains -- (5.20) (1.21) (3.24) (3.38) (3.16)
-------------------------------------------------------------------------------------------
Total distributions ......... -- (5.20) (1.21) (3.24) (3.38) (3.25)
-------------------------------------------------------------------------------------------
Net asset value, end of period .... $59.07 $57.98 $48.42 $35.58 $31.51 $28.50
===========================================================================================
Total return ...................... 1.88%+ 30.99% 39.63% 23.79% 22.31% 37.06%
===========================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) .................. $748,116 $763,203 $608,498 $432,815 $371,060 $337,280
Ratio of expenses to average
net assets (including
interest expense) ............... .82%*(2) .82%(2) .87%(1) .86%(1) .88%(1) .88%
Ratio of expenses to average
net assets (excluding
interest expense) ............... .82%*(2) .82%(2) .84%(1) .86%(1) .87%(1) --
Ratio of net investment (loss)
income to average net assets .... (.32)%* (.28)% (.22)% (0.17)% (.02)% .31%
Portfolio turnover rate ........... 8%+ 27% 54% 37% 34% 54%
</TABLE>
+ Not annualized
* Annualized.
# Dividend paid was less than one cent.
(1) Before offset for custody credits.
(2) Ratios reflect expenses grossed up for custody credit arrangement. The
ratio of expenses to average net assets net of custody credits would not
have changed.
See Notes to Financial Statements
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Value Line Leveraged Growth Investors, Inc.
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Value Line Leveraged Growth Investors, Inc.
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Value Line Leveraged Growth Investors, Inc.
The Value Line Family of Funds
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1950--The Value Line Fund seeks long-term growth of capital. Current income is a
secondary objective.
1952--Value Line Income and Growth Fund's primary investment objective is
income, as high and dependable as is consistent with reasonable risk. Capital
growth to increase total return is a secondary objective.
1956--The Value Line Special Situations Fund seeks long-term growth of capital.
No consideration is given to current income in the choice of investments.
1972--Value Line Leveraged Growth Investors' sole investment objective is to
realize capital growth.
1979--The Value Line Cash Fund, a money market fund, seeks to secure as high a
level of current income as is consistent with maintaining liquidity and
preserving capital. An investment in the Fund is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
1981--Value Line U.S. Government Securities Fund seeks maximum income without
undue risk to principal. Under normal conditions, at least 80% of the value of
its net assets will be invested in securities issued or guaranteed by the U.S.
Government and its agencies and instrumentalities.
1983--Value Line Centurion Fund* seeks long-term growth of capital.
1984--The Value Line Tax Exempt Fund seeks to provide investors with the maximum
income exempt from federal income taxes while avoiding undue risk to principal.
The Fund offers investors a choice of two portfolios: The Money Market Portfolio
and the National Bond Portfolio.
1985--Value Line Convertible Fund seeks high current income together with
capital appreciation primarily from convertible securities ranked 1 or 2 for
year-ahead performance by the Value Line Convertible Ranking System.
1986--Value Line Aggressive Income Trust seeks to maximize current income.
1987--Value Line New York Tax Exempt Trust seeks to provide New York taxpayers
with the maximum income exempt from New York State, New York City and federal
income taxes while avoiding undue risk to principal.
1987--Value Line Strategic Asset Management Trust* seeks to achieve a high total
investment return consistent with reasonable risk.
1993--Value Line Emerging Opportunities Fund invests primarily in common stocks
or securities convertible into common stock, with its primary objective being
long-term growth of capital.
1993--Value Line Asset Allocation Fund seeks high total investment return,
consistent with reasonable risk. The Fund invests in stocks, bonds and money
market instruments utilizing quantitative modeling to determine the asset mix.
1995--Value Line U.S. Multinational Company Fund's investment objective is
maximum total return. It invests primarily in securities of U.S. companies that
have significant sales from international operations.
* Only available through the purchase of Guardian Investor, a tax deferred
variable annuity, or ValuePlus, a variable life insurance policy.
For more complete information about any of the Value Line Funds, including
charges and expenses, send for a prospectus from Value Line Securities, Inc.,
220 East 42nd Street, New York, New York 10017-5891 or call 1-800-223-0818, 24
hours a day, 7 days a week, or visit us at www.valueline.com. Read the
prospectus carefully before you invest or send money.
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<PAGE>
INVESTMENT ADVISER Value Line, Inc.
220 East 42nd Street
New York, NY 10017-5891
DISTRIBUTOR Value Line Securities, Inc.
220 East 42nd Street
New York, NY 10017-5891
CUSTODIAN BANK State Street Bank and Trust Co.
225 Franklin Street
Boston, MA 02110
SHAREHOLDER State Street Bank and Trust Co.
SERVICING AGENT c/o NFDS
P.O. Box 219729
Kansas City, MO 64121-9729
INDEPENDENT PricewaterhouseCoopers LLP
ACCOUNTANTS 1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL Peter D. Lowenstein, Esq.
Two Sound View Drive, Suite 100
Greenwich, CT 06830
Directors Jean Bernhard Buttner
John W. Chandler
Frances T. Newton
Francis C. Oakley
David H. Porter
Paul Craig Roberts
Marion N. Ruth
Nancy-Beth Sheerr
OFFICERS Jean Bernhard Buttner
Chairman and President
Alan N. Hoffman
Vice President
Philip J. Orlando
Vice President
David T. Henigson
Vice President and
Secretary/Treasurer
Jack M. Houston
Assistant Secretary/Treasurer
Stephen La Rosa
Assistant Secretary/Treasurer
The financial statements included herein have been taken from the records of the
Fund without examination by the independent accountants and, accordingly, they
do not express an opinion thereon.
This unaudited report is issued for information of shareholders. It is not
authorized for distribution to prospective investors unless preceded or
accompanied by a currently effective prospectus of the Fund (obtainable from the
Distributor).
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