================================================================================
SEMI-ANNUAL REPORT
------------------
February 29, 2000
------------------
Value Line
U.S. Government
Securities
Fund, Inc.
[LOGO]
-----------------
VALUE LINE
No-Load
Mutual
Funds
<PAGE>
Value Line U.S. Government Securities Fund, Inc.
To Our Value Line
- --------------------------------------------------------------------------------
To Our Shareholders
The rebound in the global economy helped to further underpin the already potent
U.S. business expansion and produce a powerful stock market rally over the first
half of the fiscal year ending February 29, 2000.
Your Fund returned 1.38% for the six months ended February 29, 2000. This
compares favorably to the 1.30% return of the unmanaged Lehman Brothers
Intermediate U.S. Government Index, a proxy for the Fund's government investment
strategy. This positive return is quite favorable, given the trying times in
which it occurred. For example, ten-year Treasury bonds returned a negative
0.94% over this six-month period.
The strong economic growth that buoyed the stock market, depressed bond prices
causing bond yields to rise sharply. Inflation crept up over 2% and inched
toward the 3% area as corporations stepped up borrowings in anticipation of
higher interest rates. Meanwhile, the Federal Reserve Board adopted a more
aggressive, pre-emptive stance on interest rates by raising the Federal Funds
rate twice by 0.25% to 5.75% in an effort to slow the overheating economy. In
this hostile interest rate environment, only bonds with the shortest maturity
produced positive total returns. Your Fund's positive performance is
attributable to the emphasis on bonds with intermediate-maturity dates and U.S.
Agency securities with higher yields.
Your Fund's long-term strategy is to generate high income consistent with safety
of principal by investing primarily in U.S. Government securities, representing
the highest level of safety. Additionally, we control risk by limiting the
portfolio average maturity to 10 years and by maintaining a well-diversified
portfolio. These measures, we believe, will protect the fund from the dramatic
swings in value caused by gyrating interest rates and produce more stable and
consistent performance.
We continue to stick to our intermediate-term maturity structure and to provide
excellent performance. We appreciate your continued support.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
March 20, 2000
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2
<PAGE>
Value Line U.S. Government Securities Fund, Inc.
U.S. Government Securities Fund Shareholders
- --------------------------------------------------------------------------------
Economic Observations
The American economy continues to perform well as we proceed through the first
quarter of 2000. Evidence of this healthy level of business activity can be
found in the strong pace of manufacturing, the continued healthy gains in
personal income, and the comparatively high levels of consumer spending.
Overall, we estimate that Gross Domestic Product growth will exceed 4% in the
opening quarter and average 3.5%-4.0% for the year as a whole. That would make
2000 the tenth year in a row of sustained economic growth in this country.
Inflationary pressures, meanwhile, continue to be held in check for the most
part, in spite of a further recent surge in oil and gasoline prices, with strong
increases in productivity and ongoing technological innovations being at least
partially responsible for this comparative pricing stability. Nevertheless, an
increase in cost pressures does seem likely over the next several quarters. The
Federal Reserve Board, taking note of this somewhat higher expense structure, is
likely to chart a more restrictive monetary course in the months ahead. As such,
we now expect the lead bank to vote one additional, albeit modest, interest rate
increases before midyear.
Performance Data:*
Growth of
an Assumed Average
Investment of Annual
$10,000 Total Return
------------- -------------
1 year ended 12/31/99 ............. $ 9,885 -1.15%
5 years ended 12/31/99 ............ $13,827 6.70%
10 years ended 12/31/99 ........... $18,513 6.35%
* The average annual total returns for the one, five and ten year periods
ended February 29, 2000, were 0.46%, 5.98% and 6.40%, respectively. The
performance data quoted represent past performance and are no guarantee of
future performance. The average annual total return 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 U.S. Government Securities Fund, Inc.
Schedule of Investments (unaudited)
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<TABLE>
<CAPTION>
Principal Maturity
Amount Rate Date Value
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS (9.6%)
$ 15,393,300 U.S. Treasury Inflation Indexed Notes...................... 3.88% 1/15/09 $ 14,893,555
------------ ------------
15,393,300 TOTAL U.S. TREASURY OBLIGATIONS (Cost $15,200,729) ........ 14,893,555
------------ ------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (86.5%)
FEDERAL NATIONAL MORTGAGE ASSOCIATION (54.5%)
5,000,000 Federal National Mortgage Association...................... 6.63 1/15/02 4,979,150
7,641,159 Federal National Mortgage Association Pool #313031......... 6.83 7/01/03 7,464,457
5,000,000 Federal National Mortgage Association...................... 6.50 8/15/04 4,883,167
10,000,000 Federal National Mortgage Association...................... 5.75 6/15/05 9,407,860
8,409,759 Federal National Mortgage Association Pool #313032......... 7.04 7/01/06 8,225,796
10,275,632 Federal National Mortgage Association Pool #375667......... 6.02 2/01/08 9,392,575
10,000,000 Federal National Mortgage Association Pool #380188......... 6.45 4/01/08 9,362,500
10,000,000 Federal National Mortgage Association...................... 6.63 9/15/09 9,581,157
5,000,000 Federal National Mortgage Association...................... 7.25 1/15/10 5,009,851
8,723,009 Federal National Mortgage Association Pool #412682......... 6.00 3/01/28 7,979,559
4,732,432 Federal National Mortgage Association Pool #424691......... 6.50 4/01/28 4,429,532
4,337,258 Federal National Mortgage Association Pool #425239......... 6.50 4/01/28 4,074,872
------------ ------------
89,119,249 TOTAL FEDERAL NATIONAL MORTGAGE ASSOCIATION
------------
(Cost $88,939,176) ...................................... 84,790,476
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION (11.9%)
10,000,000 Federal Home Loan Mortgage Corporation..................... 5.00 1/15/04 9,298,947
5,000,000 Federal Home Loan Mortgage Corporation..................... 6.25 7/15/04 4,836,660
5,000,000 Federal Home Loan Mortgage Corporation..................... 5.13 10/15/08 4,327,134
------------ ------------
20,000,000 TOTAL FEDERAL HOME LOAN MORTGAGE CORPORATION
------------
(Cost $19,411,078) ...................................... 18,462,741
------------
FEDERAL HOME LOAN BANK (10.7%)
12,000,000 Federal Home Loan Bank..................................... 5.50 8/13/01 11,797,184
5,000,000 Federal Home Loan Bank..................................... 5.13 2/26/02 4,838,708
------------ ------------
17,000,000 TOTAL FEDERAL HOME LOAN BANK
------------
(Cost $17,043,099) ...................................... 16,635,892
------------
FEDERAL FARM CREDIT BANK (6.4%)
10,000,000 Federal Farm Credit Bank................................... 5.88 07/02/01 9,892,648
------------ ------------
10,000,000 TOTAL FEDERAL FARM CREDIT BANK
------------
(Cost $9,980,407) ....................................... 9,892,648
------------
</TABLE>
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4
<PAGE>
Value Line U.S. Government Securities Fund, Inc.
February 29, 2000
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<TABLE>
<CAPTION>
Principal Maturity
Amount Rate Date Value
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TENNESSEE VALLEY AUTHORITY (2.8%)
$ 5,000,000 Tennessee Valley Authority Global Bonds Series C........... 6.00% 03/15/13 $ 4,423,594
------------ ------------
5,000,000 TOTAL TENNESSEE VALLEY AUTHORITY
------------
(Cost $4,930,965) ....................................... 4,423,594
------------
RESOLUTION TRUST CORPORATION SECURITIES (0.2%)
290,584 Resolution Trust Corporation 1992-5 A-6.................... 9.24 5/25/26 292,751
------------ ------------
290,584 TOTAL RESOLUTION TRUST CORPORATION
------------
(Cost $295,306) ......................................... 292,751
------------
141,409,833 TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
------------
(Cost $140,600,031) ..................................... 134,498,102
------------
156,803,133 TOTAL INVESTMENT SECURITIES (96.1%)
------------
(Cost $155,800,760) ..................................... 149,391,657
------------
REPURCHASE AGREEMENT (2.9%) (including accrued interest)
4,600,000 Collateralized by $3,620,000 U.S. Treasury Bonds 9.00% due
11/15/18, with a value of $4,684,357 (with Warburg Dillon
Read LLC 5.65%, dated 2/29/00, due 3/1/00, delivery
value $4,600,722) ....................................... 4,600,722
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITlES (1.0%) ................................... 1,519,318
------------
NET ASSETS (100.0%) ....................................... $155,511,697
============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER OUTSTANDING SHARE ($155,511,697 / 14,594,243
shares of capital stock outstanding) .................... $ 10.66
============
</TABLE>
See Notes to Financial Statements.
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5
<PAGE>
Value Line U.S. Government Securities Fund, Inc.
Statement of Assets and Liabilities
at February 29, 2000 (unaudited)
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Assets:
Investment securities at value
(Cost--$155,800,760) .................................. $ 149,391,657
Repurchase agreements
(Cost-$4,600,722) ..................................... 4,600,722
Cash .................................................... 120,056
Interest receivable ..................................... 1,616,344
Receivable for capital shares sold ...................... 10,375
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Total Assets ........................................ 155,739,154
-------------
Liabilities:
Payable for capital shares
repurchased ........................................... 17,934
Accrued expenses:
Advisory fee .......................................... 61,851
Other ................................................. 147,672
-------------
Total Liabilities ................................... 227,457
-------------
Net Assets .............................................. $ 155,511,697
=============
Net Assets consist of:
Capital stock, at $1 par value
(authorized 100,000,000,
outstanding 14,594,243 shares) ........................ $ 14,594,243
Additional paid-in capital .............................. 196,598,510
Undistributed net investment
income ................................................ 1,640,023
Accumulated net realized loss
on investments ........................................ (50,911,976)
Net unrealized depreciation
of investments ........................................ (6,409,103)
-------------
Net Assets .............................................. $ 155,511,697
=============
Net Asset Value, Offering and
Redemption Price per
Outstanding Share
($155,511,697 / 14,594,243
shares outstanding) ................................... $ 10.66
=============
Statement of Operations
for the six months ended February 29, 2000 (unaudited)
- --------------------------------------------------------------------------------
Investment Income:
Interest income .......................................... $ 5,107,127
-----------
Expenses:
Advisory fee ............................................. 403,772
Transfer agent fees ...................................... 47,911
Auditing and legal fees .................................. 23,874
Telephone, insurance, dues and other ..................... 20,556
Printing ................................................. 15,710
Registration and filing fees ............................. 13,500
Custodian fees ........................................... 13,322
Postage .................................................. 8,738
Directors' fees and expenses ............................. 5,463
-----------
Total Expenses Before
Custody Credits .................................... 552,846
Less: Custody Credits ................................ (1,912)
-----------
Net Expenses ......................................... 550,934
-----------
Net Investment Income .................................... 4,556,193
-----------
Net Realized and Unrealized Loss
on Investments:
Net Realized Loss .................................... (1,634,863)
Change in Net Unrealized
Appreciation (Depreciation) ........................ (725,346)
-----------
Net Realized Loss and Change in
Net Unrealized Appreciation
(Depreciation) on Investments .......................... (2,360,209)
-----------
Net Increase in Net Assets
from Operations ........................................ $ 2,195,984
===========
See Notes to Financial Statements.
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6
<PAGE>
Value Line U.S. Government Securities Fund, Inc.
Statement of Changes in Net Assets
for the six months ended February 29, 2000 (unaudited) and for the year ended
August 31, 1999
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<TABLE>
<CAPTION>
Six Months
Ended
February 29, Year Ended
2000 August 31,
(unaudited) 1999
------------------------------
<S> <C> <C>
Operations:
Net investment income ..................................... $ 4,556,193 $ 9,659,103
Net realized loss on investments .......................... (1,634,863) (232,408)
Change in net unrealized appreciation (depreciation) ...... (725,346) (9,439,773)
------------------------------
Net increase (decrease) in net assets from operations ..... 2,195,984 (13,078)
------------------------------
Dividends to Shareholders:
Net investment income ..................................... (4,555,988) (9,846,476)
------------------------------
Capital Share Transactions:
Proceeds from sale of shares .............................. 7,755,427 22,704,158
Proceeds from reinvestment of distributions to shareholders 3,708,555 8,073,713
Cost of shares repurchased ................................ (20,822,803) (38,981,549)
------------------------------
Net decrease from capital share transactions .............. (9,358,821) (8,203,678)
------------------------------
Total Decrease in Net Assets ................................ (11,718,825) (18,063,232)
Net Assets:
Beginning of period ....................................... 167,230,522 185,293,754
------------------------------
End of period ............................................. $ 155,511,697 $ 167,230,522
==============================
Undistributed net investment income, at end of period ....... $ 1,640,023 $ 1,639,818
==============================
</TABLE>
See Notes to Financial Statements.
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7
<PAGE>
Value Line U.S. Government Securities Fund, Inc.
Notes to Financial Statements (unaudited)
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1. Significant Accounting Policies
Value Line U.S. Government Securities Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company whose primary investment objective is to obtain
maximum income without undue risk to principal. Capital preservation and
possible capital appreciation are secondary objectives.
The following significant accounting principles are in conformity with generally
accepted accounting principles for investment companies. Such policies are
consistently followed by the Fund in the preparation of its financial
statements. Generally accepted accounting principles may require management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results may differ from those estimates.
(A) Security Valuation. Where market quotations are readily available, portfolio
securities are valued at the midpoint between the latest available and
representative asked and bid prices, or when stock exchange valuations are used,
at the latest quoted sale price as of the close of business of the New York
Stock Exchange on the valuation date. The Fund values mortgage-backed securities
other than GNMA's (Government National Mortgage Association) on the basis of
valuations provided by dealers in such securities. Some of the general factors
which may be considered by the dealers in arriving at such valuations include
the fundamental analytic data relating to the security and an evaluation of the
forces which influence the market in which these securities are purchased and
sold. Determination of values may involve subjective judgment, as the actual
market value of a particular security can be established only by negotiation
between the parties in a sales transaction. The values for GNMA's, U.S. Treasury
and U.S. Government agency notes and debentures are determined on the valuation
date by reference to valuations obtained from an independent pricing service
which determines valuations for normal institutional-size trading units of debt
securities, without exclusive reliance upon quoted prices. This service takes
into account appropriate factors such as institutional-size trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of issue,
trading characteristics and other market data in determining valuations.
Short-term instruments with maturities of 60 days or less at the date of
purchase are valued at amortized cost, which approximates market value. Other
assets and securities for which market valuations are not readily available will
be valued at fair value as the Board of Directors may determine in good faith.
(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, and to
distribute all of its taxable income and capital gains to its shareholders.
Therefore, no federal income tax or excise tax provision is required.
(D) Security Transactions and Related Income. Security transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses
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8
<PAGE>
Value Line U.S. Government Securities Fund, Inc.
February 29, 2000
- --------------------------------------------------------------------------------
on securities transactions are determined using the identified cost method and
interest income is accrued as earned. In computing net investment income, the
Fund amortizes premiums and discounts on securities owned. The Fund purchases
stripped mortgage-backed securities at premiums and discounts. The Fund
amortizes such premiums on interest-only securities using the yield-to-maturity
method. Cash is received based on the stated coupon rate and interest income is
earned based on the security's effective yield-to-maturity. When the Fund
purchases principal-only securities, although no interest payments are received,
the discounts are accrued using the yield-to-maturity method based on the
effective yield-to-maturity of the security.
2. Capital Share Transactions and Dividends to Shareholders
Transactions in capital stock were as follows:
Six Months
Ended Year
February 29, Ended
2000 August 31,
(unaudited) 1999
----------------------------
Shares sold ................................ 721,691 2,015,642
Shares issued to shareholders in
reinvestment of dividends ................ 344,979 720,630
----------------------------
1,066,670 2,736,272
Shares repurchased ......................... (1,940,338) (3,467,790)
----------------------------
Net decrease ............................... (873,668) (731,518)
============================
Dividends per share ........................ $ .30 $ .62
============================
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
On March 16, 2000 the Fund's Board of Directors declared a quarterly dividend
from net investment income of $.15 per share payable on March 24, 2000 to
shareholders of record on March 22, 2000.
3. Purchases and Sales of Securities
Purchases and sales of investment securities, excluding short-term investments,
were as follows:
Six Months Ended
February 29, 2000
(unaudited)
------------------
PURCHASES:
U.S. Treasury Obligations ..................... $ 5,180,638
U.S. Government Agency
Obligations and Other
Investment Securities ....................... 36,321,010
-----------
$41,501,648
===========
SALES AND REDEMPTIONS:
U.S. Treasury Obligations ..................... $ 8,775,781
U.S. Government Agency
Obligations and Other
Investment Securities ....................... 42,311,567
-----------
$51,087,348
===========
At February 29, 2000, the aggregate cost of investment securities and repuchase
agreement for federal income tax purposes was $160,401,482. The aggregate
appreciation and depreciation of investments at February 29, 2000, based on a
comparison of investment values and their costs for federal income tax purposes,
was $26,830 and $6,435,933 respectively, resulting in a net depreciation of
$6,409,103.
For federal income tax purposes, the Fund had a net capital loss carryover at
August 31, 1999 of approximately $47,733,893 of which approximately $35,928,048
will expire in 2003, $8,976,510 will expire in 2004 and $2,829,335 will expire
in 2005.
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9
<PAGE>
Value Line U.S. Government Securities Fund, Inc.
Notes to Financial Statements (unaudited) February 29, 2000
- --------------------------------------------------------------------------------
4. Investment Advisory Contract, Management Fees and Transactions With
Affiliates
An advisory fee of $403,772 was paid or payable to Value Line, Inc., the Fund's
investment adviser ("Adviser"), for the six months ended February 29, 2000. This
was computed at the rate of 1/2 of 1% of the Fund's average daily net assets
during the period and was 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 subsidiary, Value Line
Securities, Inc. (the Fund's distributor and a registered broker/dealer), are
also officers and a director of the Fund.
The Adviser and/or affiliated companies and the Value Line, Inc. Profit Sharing
and Savings Plan at February 29, 2000 owned 995,074 shares of the Fund's capital
stock, representing 6.8% of the outstanding shares. In addition, officers and
directors owned 426 shares of capital stock, representing 0.0% of the
outstanding shares.
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10
<PAGE>
Value Line U.S. Government Securities Fund, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Six Months Ended Years Ended August 31,
February 29, 2000 --------------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
----------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.81 $11.44 $11.04 $10.85 $11.28 $11.20
-------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income ........... .31 .61 .69 .74 .77 .74
Net gains or losses on securities
(both realized and unrealized) (.16) (.62) .41 .21 (.43) .04
-------------------------------------------------------------------------------------
Total income (loss) from
investment operations ........... .15 (.01) 1.10 .95 .34 .78
-------------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income ............. (.30) (.62) (.70) (.76) (.77) (.70)
Distributions from capital gains -- -- -- -- -- --
-------------------------------------------------------------------------------------
Total distributions ............... (.30) (.62) (.70) (.76) (.77) (.70)
-------------------------------------------------------------------------------------
Net asset value, end of period ...... $10.66 $10.81 $11.44 $11.04 $10.85 $11.28
=====================================================================================
Total return ........................ 1.38%+ -0.17% 10.28% 9.01% 3.06% 7.37%
=====================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) .................... $155,512 $167,231 $185,294 $185,004 $214,889 $256,004
Ratio of operating expenses to
average net assets ................ .68%*(2) .67%(2) .66%(1) .65%(1) .65%(1) .66%
Ratio of net investment income to
average net assets ................ 5.63%* 5.40% 6.07% 6.52% 6.74% 6.58%
Portfolio turnover rate ............. 27%+ 125% 159% 255% 158% 193%
</TABLE>
(1) Before offset of custody credits.
(2) Ratios reflect expenses grossed up for custody credit arrangement. The
ratios of expenses to average net assets net of custody credits would have
been .68% for the six months ended February 29, 2000 and .66% for the year
ended August 31, 1999.
+ Not annualized.
* Annualized.
See Notes to Financial Statements.
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11
<PAGE>
Value Line U.S. Government Securities Fund, Inc.
The Value Line Family of Funds
- --------------------------------------------------------------------------------
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.
1981--Value Line U.S. Government Securities Fund seeks maximum income without
undue risk to capital. 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.
- --------------------------------------------------------------------------------
12
<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 Greenwich Plaza, Suite 100
Greenwich, CT 06830
Directors Jean Bernhard Buttner
John W. Chandler
David H. Porter
Paul Craig Roberts
Nancy-Beth Sheerr
OFFICERS Jean Bernhard Buttner
Chairman and President
Bruce H. Alston
Vice President
Charles Heebner
Vice President
David T. Henigson
Vice President,
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).
#512637
