<PAGE>
INVESTMENT ADVISER -----------------------
Value Line, Inc. SEMI-ANNUAL REPORT
220 East 42nd Street, New York, NY 10017-5891 AUGUST 31, 1995
-----------------------
DISTRIBUTOR
Value Line Securities, Inc.
220 East 42nd Street, New York, NY 10017-5891
CUSTODIAN BANK THE
State Street Bank and Trust Company VALUE LINE
225 Franklin Street, Boston, MA 02110 TAX EXEMPT
FUND, INC.
SHAREHOLDER SERVICING AGENT
State Street Bank and Trust Company c/o NFDS
P.O. Box 419729, Kansas City, MO 64141-6729
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas, New York, NY 10036
LEGAL COUNSEL
Peter D. Lowenstein, Esq.
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830
BOARD OF DIRECTORS
Jean Bernhard Buttner Leo R. Futia
Charles E. Reed Paul Craig Roberts
John W. Chandler
OFFICERS
Jean Bernhard Buttner Charles Heebner
CHAIRMAN and PRESIDENT VICE PRESIDENT
Raymond S. Cowen
VICE PRESIDENT
David T. Henigson
VICE PRESIDENT, SECRETARY/TREASURER
Jack M. Houston Stephen La Rosa
Assistant Assistant
SECRETARY/TREASURER SECRETARY/TREASURER
An investment in The Value Line Tax Exempt Fund, Inc.
Money Market Portfolio is not guaranteed or insured by
the U.S. government, and there is no assurance that this
portfolio will maintain its $1.00 per-share net asset
value.
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. LOGO
This unaudited report is issued for the information of
shareholders. It is not authorized for distribution to VALUE LINE
prospective investors unless preceded or accompanied MUTUAL FUNDS
by a currently effective prospectus of the Fund
(obtainable from the Distributor).
VLF520126
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LOGO TO OUR VALUE LINE
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DEAR SHAREHOLDER:
During the past six months, the fixed-income markets made an impressive
recovery from the tumultuous 1994 interest-rate climate. After long-term,
tax-exempt rates reached a peak of 7.37% on November 22, 1994, as measured by
the Bond Buyer's Index of 40 tax-exempt bonds, these rates declined to a low
of 5.98% on September 14, 1995. During this same period, long-term taxable
yields, as measured by the 30-year Treasury bond, declined from a high of
8.16% on November 7, 1994, to a low of 6.47% on September 14, 1995. Since
their peak, tax-exempt yields have fallen 1.39 percentage points, compared to
1.69 percentage points for taxable yields.
Tax-exempt securities have underperformed taxable securities in this market
rally, especially in recent months. Proposals for major tax-law changes, such
as flat, sales, and value-added taxes, have discouraged investors in
tax-exempt securities from adding to their positions, especially in bonds
with long maturities. Indeed, many have reduced their positions: During 1994,
investments in long-term, tax-exempt bond funds declined by $13.7 billion. An
additional $2.6 billion was withdrawn from such funds through September 20,
1995.
Offsetting these negative factors have been the significant decline in
volume of new tax-exempt issues and the absence of selling pressures, which
occurred in the bear bond market of 1994. New-issue volume was down 22.4%,
from $119.7 billion in the first eight months of 1994 to $92.8 billion in the
same period this year. For the second year in a row, redemptions will exceed
new tax-exempt debt issues in 1995.
HIGH-YIELD PORTFOLIO
The primary objective of The Value Line Tax Exempt Fund High-Yield Portfolio
is to provide investors with maximum income exempt from federal income tax
without undue risk to principal. During the six months ended August 31, 1995,
the Fund's total return was 4.73%. From its inception in March 1984 through
that date, the total return, assuming reinvestment of all dividends, was
161.33%. This is equivalent to an average annual total return of 8.76%. The
Fund's SEC yield, as of August 31, 1995, was 5.17%, which exceeded the
average SEC yield of 4.79% for all general municipal bond funds ranked by
Lipper Analytical Services.
Your Fund's total return for the period January 1 through August 31, 1995,
was 11.2%, compared to 12.1% for the Lehman Brothers Municipal Bond Index
during the same period. Our emphasis on high-grade securities (which have
lower yields than low-grade bonds) and on shorter duration than the Lehman
Index has contributed to the Fund's below-index performance. We believe that
emphasis on high-grade issues is warranted, especially when considering the
narrow difference between yields of high-grade and those of low-grade
securities.
We have concentrated on maintaining call protection and have emphasized
higher grade credits to maximize shareholder income without compromising
safety of principal. Over 96% of your Fund's bonds are rated A or better by
the major credit-rating agencies. In addition, 23.7% of the portfolio is
invested in high-coupon, non-callable bonds that assure high, tax-free
income. The Fund's highest concentrations are in housing revenue, insured,
hospital revenue, and general obligation bonds. During the past six months,
we increased our concentration in the insured and housing sectors, while
reducing those in the general-obligation, electric-revenue, and
hospital-revenue sectors.
MONEY MARKET PORTFOLIO
The objective of The Value Line Tax Exempt Fund Money Market Portfolio is to
preserve principal by investing in high-quality, tax-exempt, short-term
securities with a high degree of liquidity (to assure a constant net asset
value of $1.00 per share). The portfolio consists only of securities that
carry the two highest ratings of the major credit-rating agencies. The
annualized yield of this fund was 2.74% as of August 31, 1995, equivalent to
a 4.54% taxable yield for those in the 39.6% income-tax bracket.
All short-term rates have declined in 1995. Since January, short-term,
tax-exempt rates, as measured by the Bond Buyer's One-year Note Index, have
decreased 1.41 percentage points--from a high of 5.10% on January 12, 1995,
to a low of 3.69% on June 8th. During this same period, the yield on one-year
taxable Treasury bills declined two full percentage
2
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TAX EXEMPT FUND SHAREHOLDERS
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points--from a high of 7.33% on December 13, 1994, to a low of 5.33% on
September 20, 1995.
The municipal bond market is one of the most fragmented and complex sectors
of the American capital markets. We believe that most investors seeking
tax-free income are best served by a mutual fund, like yours, that provides
professional management, diversification, liquidity, low transaction fees,
sound record keeping, and automatic reinvestment of dividends, and that is
available in small-dollar amounts. The Value Line Tax Exempt Fund has the
additional advantage of carrying no sales or redemption fees; it is a true
no-load fund.
We thank you for your continued confidence in Value Line, and we look forward
to serving your investment needs in the future.
Sincerely,
Jean Bernhard Buttner
CHAIRMAN and PRESIDENT
September 25, 1995
PERFORMANCE DATA:*
HIGH-YIELD PORTFOLIO
AVERAGE ANNUAL GROWTH OF AN ASSUMED
TOTAL RETURN INVESTMENT OF $10,000
-----------------------------------
1 year ended 6/30/95 8.16% $ 10,816
5 years ended 6/30/95 7.31% $ 14,230
10 years ended 6/30/95 7.95% $ 21,485
MONEY MARKET PORTFOLIO
AVERAGE ANNUAL GROWTH OF AN ASSUMED
TOTAL RETURN INVESTMENT OF $10,000
-----------------------------------
1 year ended 6/30/95 2.69% $ 10,269
5 years ended 6/30/95 2.89% $ 11,529
10 years ended 6/30/95 3.83% $ 14,558
ECONOMIC OBSERVATIONS
The economy is giving off mixed signals. For example, housing activity,
benefitting from earlier reductions in mortgage rates, remains quite strong,
and production at the nation's factories is once more on the rise after a
period of weakness during the middle months of the year. Conversely, a
number of retailers are reporting soft sales, and average employment growth
remains somewhat below the levels one would normally associate with a
vigorous business expansion.
On balance, though, we think the current picture is more positive than not,
largely because of the more favorable interest-rate structure vis-a-vis
earlier in the year. Moreover, we would expect business conditions to remain
relatively upbeat and for the long-running economic expansion to prove
largely sustainable. All in all, we sense that the upturn, which faltered in
the second quarter, as the economy grew by just 1.3%, will strengthen
moderately over the final months of the year and then retain this upward bias
in 1996.
Such a scenario, however, is probably not conducive to a major relaxation in
Federal Reserve policies. To be sure, this moderately more positive economic
tone should hardly be the lightning rod for a new round of monetary
tightening. Rather, it just seems that the recent reduction in short-term
interest rates will not be the opening salvo in a multi-step process. At
best, we now see one or two additional rate cuts in the months ahead--barring
any sudden reversal in business fortunes.
*THE AVERAGE ANNUAL TOTAL RETURN FOR THE ONE-YEAR, FIVE-YEAR, AND TEN-YEAR
PERIODS ENDED AUGUST 31, 1995, FOR THE HIGH-YIELD PORTFOLIO AND THE MONEY
MARKET PORTFOLIO WERE 8.00%, 7.78%, AND 8.12% AND 2.83%, 2.80%, AND 3.80%,
RESPECTIVELY. 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.
3
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THE VALUE LINE TAX EXEMPT FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED)
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PRINCIPAL
AMOUNT HIGH-YIELD PORTFOLIO RATING VALUE
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LONG-TERM MUNICIPAL SECURITIES (87.4%)
ALABAMA (.6%)
$ 1,250,000 Colbert County-Northwest, Health Care
Authority, Hospital Revenue Refunding,
Helen Keller Hospital, 8.75%, 6/1/09 Baa $ 1,395,187
-----------
ALASKA (5.3%)
Housing Finance Corp., Collateralized
Mortgage Obligation, Veteran's, 1st Ser.,
Veteran's Mortgage Program:
8,410,000 5.40%, 12/1/23 Aaa 7,366,067
310,000 7.45%, 12/1/29 Aaa 327,220
5,000,000 Valdez, Marine Terminal, Revenue, Refunding,
BP Pipeline Inc. Project, Ser. B, 5.50%,
10/1/28 A1 4,516,500
----------
12,209,787
----------
ARKANSAS (.4%)
855,000 Development Finance Authority, Single Family
Mortgage, Revenue Replacement, Ser. C,
8.125%, 8/1/14. A+* 910,652
----------
CALIFORNIA (2.2%)
895,000 Bay Area, Government Association, Revenue,
Municipal Funding Pool, Ser. A, 8.05%,
9/1/10 (Called 9/1/95) A 894,982
4,250,000 Pleasant Hill, Redevelopment Agency
Residential Mortgage Revenue, Refunding,
5.75%, 8/1/11 AA* 4,129,045
----------
5,024,027
----------
COLORADO (2.2%)
4,055,000 Denver, City & County Single Family Mortgage
Revenue, 7.00%, 8/1/10 Aaa 4,476,071
520,000 Housing Finance Authority, Single Family,
Revenue, Residential, Ser. C, 8.75%, 9/1/17 Aa 555,090
----------
5,031,161
----------
CONNECTICUT (.4%)
850,000 Housing Finance Authority, Mortgage Finance
Program, Ser. E, 8.75%, 11/15/18 Aa 885,692
----------
FLORIDA (.1%)
240,000 Housing Finance Agency, Home Ownership
Mortgage, 8.595%, 11/1/17 AAA* 241,200
----------
4
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THE VALUE LINE TAX EXEMPT FUND, INC.
AUGUST 31, 1995
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PRINCIPAL
AMOUNT HIGH-YIELD PORTFOLIO RATING VALUE
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GEORGIA (4.1%)
$ 3,000,000 Fulton County, Housing Authority, Single
Family Mortgage, Revenue, Ser. A, 6.20%,
3/1/13 AAA* $ 3,031,890
5,000,000 General Obligation, Ser. B, 6.00%, 3/1/12 Aaa 5,291,150
1,000,000 Residential Finance Authority, Single Family
Insured Mortgage, Revenue, Subser. C,
8.00%, 12/1/16 Aa 1,085,030
-----------
9,408,070
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HAWAII (1.8%)
4,000,000 Department of Budget and Finance, Special
Purpose Mortgage Revenue, Kapiolani Health
Care System, 6.40%, 7/1/13 A 4,142,160
-----------
IDAHO (.6%)
1,485,000 Housing Agency, Single Family, Mortgage
Revenue, Refunding, Ser. E, 5.95%, 7/1/26 Aaa 1,497,400
-----------
ILLINOIS (8.7%)
Chicago, O'Hare International Airport,
Revenue Refunding, 2nd Lien:
2,000,000 Ser. A, 6.375%, 1/1/15 Aaa 2,055,840
6,940,000 Ser. C-1, 5.00%, 1/1/18 Aaa 6,083,882
3,475,000 Chicago, Water Revenue, Refunding, 6.50%,
11/1/15 Aaa 3,740,003
4,500,000 Housing Development Authority, Multi-Family,
Ser. 91-A, 8.25%, 7/1/16 A1 4,897,350
3,000,000 Metropolitan Pier and Exposition Authority,
McCormick Place Expansion Project,
Ser. 1992A, 6.75%, 6/1/10 A 3,295,230
-----------
20,072,305
-----------
INDIANA (1.5%)
3,000,000 Office Building Commission, Capital Complex,
Revenue, Ser. B, 7.40%, 7/1/15 Aaa 3,541,170
-----------
IOWA (.6%)
1,255,000 Finance Authority, Single Family, Revenue
Mortgage, Ser. B, 7.45%, 7/1/23. Aaa 1,328,681
-----------
MAINE (1.3%)
2,800,000 Housing Authority, Mortgage Purchase Program,
Ser. D-4, 7.55%, 11/15/19 A1 2,953,888
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MARYLAND (3.1%)
7,000,000 Northeast, Waste Disposal Authority, Solid
Waste Removal, Montgomery County, Revenue,
6.20%, 7/1/10 A 7,096,880
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5
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THE VALUE LINE TAX EXEMPT FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED)
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PRINCIPAL
AMOUNT HIGH-YIELD PORTFOLIO RATING VALUE
- -------------------------------------------------------------------------------
MASSACHUSETTS (4.4%)
$ 5,000,000 General Obligations, Consolidated Loan,
Ser. C, 5.625%, 8/1/12 Aaa $ 4,927,350
3,000,000 Health & Educational Facilities Authority,
Revenue, New England Memorial Hospital,
Ser. B, 6.00%, 7/1/08 Ba 2,490,000
2,710,000 Housing Finance Agency, Residential
Development, Ser. H, 6.75%, 5/15/15 Aaa 2,827,343
-----------
10,244,693
-----------
NEBRASKA (2.1%)
5,000,000 Investment Finance Authority, Single Family
Mortgage, Revenue, Ser. A, 5.977%, 9/30/16 Aaa 5,008,650
-----------
NEVADA (4.6%)
Clark County:
5,000,000 Passenger Facilities Charge, Revenue, Las
Vegas/Macarran International Airport,
Ser. A, 6.00%, 7/1/17 Aaa 4,909,950
5,000,000 School District, Ser. A, 7.00%, 6/15/05 Aaa 5,753,550
-----------
10,663,500
-----------
NEW HAMPSHIRE (.1%)
215,000 Housing Finance Authority, Single Family
Residential Mortgage, Ser. B, 7.75%,
7/1/23 Aa 228,016
-----------
NEW JERSEY (1.9%)
4,500,000 Housing and Mortgage Finance Agency, Home
Buyer, Revenue, Ser. G, 4.625%, 4/1/15 Aaa 4,406,130
-----------
NEW YORK (11.4%)
New York City:
3,900,000 General Obligations, Ser. F, 8.20%, 11/15/04 Baa1 4,486,287
750,000 Housing Development Corp., Mortgage Revenue,
Multi-Family, F.H.A. Insured, Ser. 1985A,
9.625%, 1/1/19 A+* 811,785
New York State:
Medical Care Facilities Finance Agency:
Hospital and Nursing Home, Mortgage
Revenue:
3,950,000 Ser. D, 6.35%, 2/15/12 Aa 4,268,765
2,355,000 Ser. A, 6.125%, 2/15/14 AAA* 2,414,252
5,000,000 Presbyterian Hospital, Revenue, Refunding,
Ser. A, 5.10%, 8/15/10 Aa 4,852,200
7,190,000 St. Luke's-Roosevelt Hospital, Ser. A,
Refunding, 5.60%, 8/15/13 Aa 7,069,927
2,500,000 Mortgage Agency, Revenue, Homeowner
Mortgage, Ser. 36-A, 5.70%, 4/1/23 Aa 2,499,850
-----------
26,403,066
-----------
6
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THE VALUE LINE TAX EXEMPT FUND, INC.
AUGUST 31, 1995
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PRINCIPAL
AMOUNT HIGH-YIELD PORTFOLIO RATING VALUE
- -------------------------------------------------------------------------------
NORTH CAROLINA (3.1%)
Housing Finance Agency:
$ 3,000,000 Single Family, Revenue, Ser. BB, 6.05%,
3/1/21 Aa $ 3,017,280
4,055,000 Ser. U, 6.375%, 9/1/22 Aa 4,114,527
-----------
7,131,807
-----------
OKLAHOMA (.7%)
1,540,000 Housing Finance Agency, Single Family
Mortgage, Revenue, Class A, Ser. 87A,
7.99675%, 8/1/18 AAA* 1,570,800
-----------
OREGON (1.8%)
4,235,000 Eugene, Trojan Nuclear Project, Revenue,
5.90%, 9/1/09 Aa 4,234,492
-----------
PENNSYLVANIA (1.8%)
4,500,000 Philadelphia, Gas Works Revenue, 15th Ser.,
Refunding, 4.875%, 8/1/10 Aaa 4,108,905
-----------
SOUTH DAKOTA (1.6%)
3,600,000 Heartland Consumers Power District, Electric
Revenue, 6.375%, 1/1/16 Aaa 3,831,552
-----------
TEXAS (8.2%)
3,000,000 Harris County, Hospital District, Mortgage
Reveue, 7.40%, 2/15/10 Aaa 3,510,540
10,000,000 Houston, Housing Finance Corp., Single Family
Mortgage Revenue, Refunding, Ser. A, 5.95%,
12/1/10 Aaa 10,146,600
3,000,000 Lubbock, Housing Finance Corp., Single Family
Mortgage Revenue, Refunding, Ser. 1989A,
8.00%, 10/1/21 AAA* 4,094,880
1,200,000 Travis County, Health Facilities Development
Corp., Hospital Revenue, Daughters of
Charity, 5.90%, 11/15/07 Aa 1,225,644
-----------
18,977,664
-----------
UTAH (1.0%)
Housing Finance Agency, Single Family Mortgage:
625,000 Ser. C-3, 7.55%, 7/1/23 AA* 661,950
1,530,000 Ser. D-3, 7.55%, 7/1/23 AA* 1,620,454
-----------
2,282,404
-----------
VIRGINIA (1.3%)
3,000,000 Housing Development Authority, Commonwealth
Mortgage, Ser. H, 6.85%, 7/1/14 Aa1 3,146,730
-----------
7
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THE VALUE LINE TAX EXEMPT FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED)
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PRINCIPAL
AMOUNT HIGH-YIELD PORTFOLIO RATING VALUE
- -------------------------------------------------------------------------------
WASHINGTON (3.5%)
$ 5,000,000 Motor Vehicle Fuel Tax, Ser. D, 7.00%,
9/1/05 Aa $ 5,775,150
2,000,000 Public Power Supply System, Revenue,
Refunding, Ser. 1990B, Nuclear
Project #1, Ser. B, 7.25%, 7/1/09 Aa 2,232,500
-----------
8,007,650
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WISCONSIN (7.0%)
6,000,000 Clean Water Revenue, Ser. 1, 6.875%, 6/1/11 Aa 6,699,060
9,595,000 Housing and Economic Development Authority,
Housing Revenue, Refunding, Ser. C, 5.80%,
11/1/13 Aaa 9,435,435
-----------
16,134,495
-----------
SHORT-TERM MUNICIPAL INVESTMENTS (11.2%)
900,000 Brazos River, Texas, Harbor Navigation
District, Revenue, Texaco Dow Chemical
Project, 3.70%, 5/1/23 A1(1) 900,000
Lincoln County, Wyoming, Pollution Control
Revenue, Exxon Project:
5,300,000 Ser. A, 3.55%, 7/1/17 Aaa(1) 5,300,000
3,300,000 Ser. B, 3.55%, 7/1/17 Aaa(1) 3,300,000
2,000,000 Long Beach, California, Tax and Revenue
Anticipation Notes, dated 9/21/94,
4.75%, 9/20/95 MIG1 2,000,600
New York City:
General Obligations:
1,000,000 Subser. B-2, 3.35%, 8/15/03 VMIG1(1) 1,000,000
400,000 Subser. B-3, 3.35%, 8/15/04 VMIG1(1) 400,000
500,000 Subser. A-5, 3.35%, 8/1/16 VMIG1(1) 500,000
300,000 Subser. B-7, 3.35%, 8/15/18 VMIG1(1) 300,000
1,200,000 Subser. B-4, 3.35%, 8/15/23 VMIG1(1) 1,200,000
New York State:
1,375,000 Dormitory Authority, Mortgage Revenue,
St. Vincent's Hospital and Medical Center,
4.00%, 8/1/96 Aaa 1,375,192
1,800,000 Enviormental Facilities Corp., Resource
Recovery Revenue, Huntington Project,
3.55%, 11/1/14 A1+*(1) 1,800,000
1,700,000 Port Authority of New York and New Jersey,
Special Obligations, Revenue, Versatile
Structure Obligation, 3.30%, 6/1/20 VMIG1(1) 1,700,000
5,000,000 Rhode Island, Tax Anticipation Notes,
dated 7/3/95, 4.50%, 6/28/96 MIG1 5,020,250
1,100,000 Southwestern Illinois, Development Authority,
Solid Waste Disposal, Revenue, Shell Oil Co.,
Wood River Project, 3.65%, 4/1/22 VMIG1(1) 1,100,000
-----------
25,896,042
-----------
8
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THE VALUE LINE TAX EXEMPT FUND, INC.
AUGUST 31, 1995
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PRINCIPAL
AMOUNT HIGH-YIELD PORTFOLIO RATING VALUE
- -------------------------------------------------------------------------------
TOTAL MUNICIPAL SECURITIES (98.6%)
(Cost $223,653,076) $ 228,014,856
EXCESS OF CASH AND OTHER ASSETS OVER
LIABILITIES (1.4%) 3,271,270
-------------
NET ASSETS (100.0%) $ 231,286,126
-------------
-------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE, PER SHARE OUTSTANDING $ 10.61
-------------
-------------
Rated by Moody's Investors Service except for those marked by an asterisk
(*), which are rated by Standard & Poor's.
Variable-rate notes are considered short-term obligations. Interest rates
change periodically every (1) 1 day. These securities are payable on demand
on interest-rate refix dates and are secured by either letters of credit or
other credit-support agreements from banks. The rates listed are as of
August 31, 1995.
See Notes to Financial Statements
9
<PAGE>
THE VALUE LINE TAX EXEMPT FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED)
- -------------------------------------------------------------------------------
PRINCIPAL
AMOUNT MONEY MARKET PORTFOLIO RATING VALUE
- -------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL SECURITIES (99.0%)
ARIZONA (4.6%)
$ 1,000,000 Maricopa County, Pollution Control Revenue,
Refunding, Arizona Public Service Co.,
Ser B, 3.50%, 5/1/29 P1(1) $ 1,000,000
-----------
CALIFORNIA (4.6%)
1,000,000 Long Beach, Tax and Revenue Anticipation
Notes, dated 9/21/94, 4.75%, 9/20/95 MIG1 1,000,325
-----------
DISTRICT OF COLUMBIA (5.5%)
1,200,000 Tax and Revenue Anticipation Notes,
dated 1/4/95, 6.25%, 9/30/95 MIG1 1,201,289
-----------
FLORIDA (3.2%)
700,000 Dade County, Industrial Development
Authority, Revenue, Refunding, Florida
Power and Light Co., 3.50%, 6/1/21 VMIG1(2) 700,000
-----------
GEORGIA (4.6%)
1,000,000 De Kalb County, Tax Anticipation Notes,
dated 3/14/95, 5.00%, 12/29/95 MIG1 1,002,355
-----------
ILLINOIS (4.6%)
1,000,000 Southwestern Development Authority, Solid
Waste Disposal, Revenue, Shell Oil Co.,
Wood River Project, 3.65%, 4/1/22 VMIG1(1) 1,000,000
-----------
INDIANA (7.6%)
1,000,000 Indianapolis, Resource Recovery, Revenue,
Ogden Martin Systems, 3.70%, 12/1/16 A1+*(1) 1,000,000
Muncie, School Building Corp., First
Mortgage Refunding:
355,000 4.80%, 1/15/96 Aaa 356,467
325,000 4.80%, 7/15/96 Aaa 327,742
-----------
1,684,209
-----------
IOWA (5.5%)
1,200,000 School Corporations, Warrant Certificates,
Cash Anticipation Program, Ser. A,
dated 6/28/95, 4.75%, 6/28/96 MIG1 1,208,546
-----------
KANSAS (6.2%)
Kansas City:
750,000 General Obligations, Refunding, Ser. A,
5.00%, 9/1/96 Aaa 758,720
600,000 Industrial Revenue, PQ Corp. Project,
3.50%, 8/1/15 VMIG1(1) 600,000
-----------
1,358,720
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10
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THE VALUE LINE TAX EXEMPT FUND, INC.
AUGUST 31, 1995
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PRINCIPAL
AMOUNT MONEY MARKET PORTFOLIO RATING VALUE
- -------------------------------------------------------------------------------
KENTUCKY (4.1%)
$ 900,000 Davies County, Solid Waste Disposal
Facilities, Revenue, Scott Paper Co.
Project, Ser. B, 3.70%, 12/1/23 VMIG1(1) $ 900,000
----------
LOUISIANA (4.6%)
1,000,000 Lake Charles Parish, Harbor and Terminal
District, Port Facilities Revenue,
Refunding, 3.55%, 11/1/11 Aa1(1) 1,000,000
----------
MICHIGAN (4.6%)
1,000,000 Strategic Fund, Pollution Control Revenue,
Refunding, Consumers Power Project,
Ser. A, 3.35%, 4/15/18 P1(1) 1,000,000
----------
MINNESOTA (4.6%)
1,000,000 Rochester, Health Care Facilities, Revenue,
for Mayo Medical Center, Ser. A, 3.60%,
11/15/18 (Putable 10/18/95) A1+* 1,000,000
----------
MISSOURI (4.6%)
1,000,000 Health and Educational Facilities Authority,
School District Advance Funding Program
Notes, Saint Louis Board of Education,
Ser. H, 4.50%, 8/19/96 SP1+* 1,005,082
----------
NEW MEXICO (4.6%)
1,000,000 Hurley, Pollution Control, Revenue,
Kennecott Santa Fe, 3.55%, 12/1/15 P1(1) 1,000,000
----------
NEW YORK (5.4%)
New York City:
200,000 General Obligations, Subser. B-3,
3.35%, 8/15/04 VMIG1(1) 200,000
New York State:
1,000,000 Environmental Facilities Corp., Pollution
Control, Revenue, State Water, Revolving
Fund, Ser. D, 4.40%, 11/15/95 Aaa 1,000,000
----------
1,200,000
----------
TEXAS (12.8%)
200,000 Brazos River, Harbor Navigation District,
Revenue, Dow Chemical Project, Ser. A,
3.70%, 12/1/18 P1(1) 200,000
1,000,000 Harris County, Industrial Development
Corp., Pollution Control, Revenue, Exxon
Corp. Project, 3.65%, 8/15/27 A1+*(1) 1,000,000
500,000 Houston, General Obligations, Public
Improvements, Refunding, Ser. C, 5.50%,
4/1/96 Aa 504,483
1,100,000 San Antonio, Water Revenue, Refunding,
5.20%, 5/15/96 Aaa 1,111,264
----------
2,815,747
----------
11
<PAGE>
THE VALUE LINE TAX EXEMPT FUND, INC.
SCHEDULE OF INVESTMENTS
AUGUST 31, 1995 (UNAUDITED)
- -------------------------------------------------------------------------------
PRINCIPAL
AMOUNT MONEY MARKET PORTFOLIO RATING VALUE
- -------------------------------------------------------------------------------
VIRGINIA (2.7%)
$ 600,000 Peninsula Ports Authority, Coal Terminal,
Ser. D, Refunding, 3.55%, 7/1/16 P1(1) $ 600,000
-----------
WYOMING (4.6%)
1,000,000 Lincoln County, Pollution Control Revenue,
for Exxon Project, Ser. D, 3.35%,
11/1/14 P1(1) 1,000,000
-----------
TOTAL SHORT-TERM MUNICIPAL SECURITIES (99.0%)
(Cost $21,676,273) 21,676,273
EXCESS OF CASH AND OTHER ASSETS OVER
LIABILITIES (1.0%) 218,513
-----------
NET ASSETS (100.0%) $21,894,786
-----------
-----------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE, PER OUTSTANDING SHARE $1.00
-----------
-----------
Rated by Moody's Investors Service except for those marked by an asterisk
(*), which are rated by Standard & Poor's.
Variable-rate notes are considered short-term obligations. Interest rates
change periodically every (1) 1 day. These securities are payable on demand
on interest-rate refix dates and are secured by either letters of credit or
other credit-support agreements from banks. The rates listed are as of August
31, 1995.
12
<PAGE>
VALUE LINE TAX EXEMPT FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
AT AUGUST 31, 1995 (UNAUDITED)
- -------------------------------------------------------------------------------
PORTFOLIO
---------------------------
HIGH-YIELD MONEY MARKET
---------------------------
DOLLARS
(IN THOUSANDS EXCEPT
PER-SHARE AMOUNTS)
ASSETS:
Investment securities, at value
(Cost $223,653 and amortized cost $21,676) $228,015 $21,676
Cash 502 53
Interest receivable 3,200 267
Receivable for securities sold 100 --
Receivable for capital shares sold 21 4
-------- -------
TOTAL ASSETS 231,838 22,000
-------- -------
LIABILITIES:
Dividends payable to shareholders 325 --
Payable for capital shares repurchased 13 39
Accrued expenses:
Advisory fee 96 9
Other 118 57
-------- -------
TOTAL LIABILITIES 552 105
-------- -------
NET ASSETS:
Capital Stock, at $.01 par value (Authorized
65,000,000 shares and 125,000,000 shares,
respectively; outstanding 21,789,635 shares
and 21,923,437 shares, respectively) 218 219
Additional paid-in capital 229,830 21,704
Accumulated net realized loss on investments (3,124) (28)
Unrealized net appreciation of investments 4,362 --
-------- -------
NET ASSETS $231,286 $21,895
-------- -------
-------- -------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
OUTSTANDING SHARE $ 10.61 $ 1.00
-------- -------
-------- -------
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
THE VALUE LINE TAX EXEMPT FUND, INC.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
- -------------------------------------------------------------------------------
PORTFOLIO
---------------------------
HIGH-YIELD MONEY MARKET
---------------------------
DOLLARS
(IN THOUSANDS)
INVESTMENT INCOME:
Interest $ 6,754 $ 472
------- -----
EXPENSES:
Advisory fee 579 59
Transfer agent fees 36 15
Auditing and legal fees 26 20
Printing and stationery 11 3
Postage 10 2
Registration and filing fees and other 6 10
Custodian fees 6 --
Directors' fees and expenses 3 3
TOTAL EXPENSES 677 112
------- -----
NET INVESTMENT INCOME 6,077 360
------- -----
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
NET REALIZED GAIN 2,548 --
CHANGE IN UNREALIZED APPRECIATION 2,557 --
------- -----
NET REALIZED GAIN AND CHANGE IN UNREALIZED
APPRECIATION ON INVESTMENTS 5,105 --
------- -----
NET INCREASE IN NET ASSETS FROM OPERATIONS $11,182 $ 360
------- -----
------- -----
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
THE VALUE LINE TAX EXEMPT FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED AUGUST 31, 1995,
AND FOR THE YEAR ENDED FEBRUARY 28, 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH-YIELD PORTFOLIO MONEY MARKET PORTFOLIO
--------------------------------------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
AUGUST 31, 1995 YEAR ENDED AUGUST 31, 1995 YEAR ENDED
(UNAUDITED) FEBRUARY 28, 1995 (UNAUDITED) FEBRUARY 28, 1995
--------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 6,077 $ 13,517 $ 360 $ 656
Net realized gain (loss) on investments 2,548 (5,710) -- --
Change in net unrealized appreciation 2,557 (7,800) -- --
-------- -------- -------- --------
Net increase in net assets from operations 11,182 7 360 656
-------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (6,077) (13,517) (360) (656)
Realized gain from investment
transactions--net -- (987) -- --
-------- -------- -------- --------
Total distributions (6,077) (14,504) (360) (656)
-------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 48,909 83,010 6,065 21,421
Net proceeds from reinvestment of
distributions to shareholders 4,014 9,884 360 656
Cost of shares repurchased (68,209) (110,818) (10,211) (28,103)
-------- -------- -------- --------
Decrease from capital share transactions (15,286) (17,924) (3,786) (6,026)
-------- -------- -------- --------
TOTAL DECREASE IN NET ASSETS (10,181) (32,421) (3,786) (6,026)
NET ASSETS:
Beginning of period 241,467 273,888 25,681 31,707
-------- -------- -------- --------
End of period $231,286 $241,467 $ 21,895 $ 25,681
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
THE VALUE LINE TAX EXEMPT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- -------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Value Line Tax Exempt Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company, comprised of the High-Yield and Money Market
Portfolios. The primary investment objective of the High-Yield Portfolio is
to provide investors with maximum income exempt from federal income taxes
while avoiding undue risk to principal by investing primarily in
investment-grade municipal securities. The ability of the issuers of the
securities held by the Fund to meet their obligations may be affected by
economic or political developments in a specific state or region. The primary
objective of the Money Market Portfolio is to preserve principal and provide
income by investing in high quality tax-exempt money market instruments. The
following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements.
(A) SECURITY VALUATIONS: High-Yield Portfolio. The investments are valued
each business day by an independent pricing service ("Service") approved by
the Board of Directors. Investments for which quoted bid prices in the
judgment of the Service are readily available and are representative of the
bid side of the market are valued at quotes obtained by the Service from
dealers in such securities. Other investments (which constitute a majority of
the portfolio securities) are carried at fair value by the Service, based on
methods that include consideration of the following: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to value from dealers; and general market conditions.
Short-term instruments maturing within 60 days of the date of purchase are
valued at amortized cost, which approximates value. Other assets and
securities for which no quotations are readily available will be valued in
good faith at their fair value using methods determined by the Board of
Directors.
Money Market Portfolio. Securities are valued on the basis of amortized cost,
which approximates market value and which does not take into account
unrealized capital gains or losses. This involves valuing an instrument at
cost and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates
on the market value of the instrument. The valuation of securities based upon
their amortized cost is permitted by Rule 2a-7 under the Investment Company
Act of 1940. The rule requires that money market funds maintain a
dollar-weighted average portfolio maturity of 90 days or less, purchase
instruments that have remaining maturities of 13 months or less, and invest
only in securities determined by the Board of Directors to be of good quality
with minimal credit risk. The Directors have established procedures designed
to achieve these objectives.
(B) DISTRIBUTIONS: It is the policy of the Fund to declare dividends daily
from net investment income. In the Money Market portfolio, dividends are
automatically reinvested each day in additional shares. Dividends credited to
a shareholder's account in the High-Yield Portfolio are distributed monthly.
Income earned by the Fund on weekends, holidays, and other days on which the
Fund is closed for business is declared as a dividend on the next day on
which the Fund is open for business. The Fund expects to distribute any net
realized capital gains in either Portfolio at least annually.
(C) FEDERAL INCOME TAXES: It is the policy of the Fund to qualify as a
regulated investment company, which can distribute tax-exempt dividends, by
complying with the provisions available to certain investment companies, as
defined in applicable sections of the
16
<PAGE>
THE VALUE LINE TAX EXEMPT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- -------------------------------------------------------------------------------
Internal Revenue Code, and to distribute all of its investment income and
capital gains to its shareholders. Therefore, no provision for federal income
tax or excise tax is required in the accompanying financial statements.
(D) INVESTMENTS: Securities transactions are recorded on a trade-date basis.
Realized gains and losses from securities transactions are recorded on the
identified-cost basis. Interest income, adjusted for amortization of premium
and accretion of original-issue discount and market discount, when
appropriate, in accordance with federal income-tax regulations, is earned
from settlement date and recognized on the accrual basis. Securities
purchased or sold on a when-issued or delayed-delivery basis may be settled a
month or more after the trade date.
(E) EXPENSES: Expenses directly attributable to each portfolio are charged to
that portfolio's operations; expenses that are applicable to both portfolios
are allocated between them.
2. CAPITAL SHARE TRANSACTIONS
Transactions in capital stock were as follows:
HIGH-YIELD PORTFOLIO
--------------------------------
SIX MONTHS ENDED YEAR
AUGUST 31, ENDED
1995 FEBRUARY 28,
(UNAUDITED) 1995
--------------------------------
(IN THOUSANDS)
Shares sold 4,660 8,140
Shares issued to share-
holders in reinvestment
of dividends 381 972
------ -------
5,041 9,112
Shares repurchased (6,478) (10,861)
------ -------
Net decrease (1,437) (1,749)
------ -------
------ -------
MONEY MARKET PORTFOLIO
--------------------------------
SIX MONTHS ENDED YEAR
AUGUST 31, ENDED
1995 FEBRUARY 28,
(UNAUDITED) 1995
--------------------------------
(IN THOUSANDS)
Shares sold 6,065 21,421
Shares issued to share-
holders in reinvestment
of dividends 360 656
------- -------
6,425 22,077
Shares repurchased (10,211) (28,103)
------ -------
Net decrease (3,786) (6,026)
------ -------
------ -------
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of municipal securities were as follows:
HIGH-YIELD
PORTFOLIO
-----------
SIX MONTHS
ENDED
AUGUST 31,
1995
(UNAUDITED)
-----------
(IN THOUSANDS)
PURCHASES:
Long-term obligations $ 98,700
Short-term obligations 85,217
--------
$183,917
--------
--------
MATURITIES OR SALES:
Long-term obligations $108,340
Short-term obligations 93,400
--------
$201,740
--------
--------
17
<PAGE>
THE VALUE LINE TAX EXEMPT FUND, INC.
AUGUST 31, 1995
- -------------------------------------------------------------------------------
MONEY MARKET
PORTFOLIO
-------------
SIX MONTHS
ENDED
AUGUST 31,
1995
(UNAUDITED)
-----------
(IN THOUSANDS)
PURCHASES:
Municipal short-term obligations $ 25,603
--------
--------
MATURITIES OR SALES:
Municipal short-term obligations $ 29,215
--------
--------
At August 31, 1995, the aggregate cost of investments for federal income-tax
purposes was $223,653,076 for the High-Yield Portfolio and $21,676,273 for
the Money Market Portfolio.
The aggregate appreciation and depreciation of investments in the High-Yield
Portfolio at August 31, 1995, based on a comparison of investment values and
their cost for federal income-tax purposes is $5,912,490 and $1,550,710,
respectively, resulting in net unrealized appreciation of $4,361,780. There
was no unrealized appreciation or depreciation in the Money Market Portfolio.
For federal income-tax purposes the High-Yield Portfolio had a capital loss
carryover at February 28, 1995, of $4,644,892, which will expire in 2003, and
the Money Market Portfolio had a capital loss carryover at February 28, 1995,
of $27,649, which will expire in 2000. Any net capital losses incurred after
October 31, within the Fund's tax year, if so elected by either Portfolio of
the Fund, are deemed to arise on the first day of that Fund Portfolio's next
taxable year. To the extent future capital gains are offset by such capital
losses, the Portfolio does not anticipate distributing any such gains to its
shareholders.
4. INVESTMENT ADVISORY CONTRACT,
MANAGEMENT FEES, AND
TRANSACTIONS WITH AFFILIATES
Advisory fees of $579,039 and $59,427 were paid or payable on the High-Yield
Portfolio and the Money Market Portfolio, respectively, to Value Line, Inc.
(the Adviser) for the six months ended August 31, 1995. These were computed
at the annual rate of 1/2 of 1% of the average daily net asset values of
the portfolios of the Fund for the year. 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 of the Fund and pays their
salaries and wages. The Fund bears all other costs and expenses of its
organization and operation. If the aggregate expenses of the Fund, other than
taxes, interest, brokerage commissions, and extraordinary expenses, exceed
the expense limitation imposed by any state in which the Fund sells its
shares, the advisory fee will be reduced by the amount of such excess, or the
amount of such excess will be refunded. No such reimbursement was required
for the six months ended August 31, 1995. During the six months ended
August 31, 1995, $1,960 was paid or payable to the Adviser for printing
services.
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.
At August 31, 1995, the Adviser and/or affiliated companies owned 1,466,886
shares of the High-Yield Portfolio common shares, representing 6.73% of the
outstanding shares. In addition, certain officers and directors of the Fund
owned 253,988 shares of the High-Yield Portfolio, representing 1.17 % of the
outstanding shares and 2,356 shares of the Money Market Portfolio,
representing .01% of the outstanding shares.
18
<PAGE>
THE VALUE LINE TAX EXEMPT FUND, INC.
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
HIGH-YIELD PORTFOLIO
FOR THE SIX
MONTHS ENDED YEAR ENDED ON LAST DAY OF FEBRUARY,
AUGUST 31, 1995 ----------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.40 $10.97 $11.29 $10.59 $10.20 $10.23
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .277 .568 .598 .635 .676 .756
Net gains or losses on securities
(both realized and unrealized) .210 (.528) (.112) .698 .388 (.030)
-------- -------- -------- -------- -------- --------
Total from investment operations .487 .040 .486 1.333 1.064 .726
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income (.277) (.568) (.602) (.633) (.674) (.756)
Distributions from capital gains -- (.042) (.204) -- -- --
-------- -------- -------- -------- -------- --------
Total distributions (.277) (.610) (.806) (.633) (.674) (.756)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $10.61 $10.40 $10.97 $11.29 $10.59 $10.20
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total return 4.73%+ .64% 4.37% 13.03% 10.75% 7.41%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $231,286 $241,467 $273,888 $301,514 $299,781 $278,176
Ratio of expenses to average net assets .58%* .61% .58% .60% .58% .60%
Ratio of net investment income
to average net assets 5.23%* 5.54% 5.30% 5.89% 6.50% 7.47%
Portfolio turnover rate 49%+ 60% 55% 101% 122% 122%
</TABLE>
+ Not annualized; six-month period only
* Annualized
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
THE VALUE LINE TAX EXEMPT FUND, INC.
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
FOR THE SIX
MONTHS ENDED YEAR ENDED ON LAST DAY OF FEBRUARY,
AUGUST 31, 1995 ----------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .015 .022 .016 .023 .037 .053
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income (.015) (.022) (.016) (.023 ) (.037) (.053)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $ 1.00 $1.00
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total return 1.53%+ 2.22% 1.58% 2.34% 3.79% 5.28%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $21,895 $25,681 $31,707 $36,309 $58,090 $60,371
Ratio of expenses to average net assets .94%* .89% .86% .80% .74% .76%
Ratio of net investment income to
average net assets 3.02%* 2.17% 1.56% 2.38% 3.74% 5.13%
</TABLE>
+ Not annualized; six-month period only
* Annualized
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
21
<PAGE>
THE VALUE LINE FAMILY OF FUNDS
- -------------------------------------------------------------------------------
1950 -- THE VALUE LINE FUND seeks long-term growth of capital along with
modest current income by investing substantially all of its assets in common
stocks or securities convertible into common stock.
1952 -- THE VALUE LINE INCOME FUND's primary investment objective is income,
as high and dependable as is consistent with reasonable growth. Capital
growth to increase total return is a secondary objective.
1956 -- THE VALUE LINE SPECIAL SITUATIONS FUND seeks to obtain long-term
growth of capital by investing not less than 80% of its assets in "special
situations". No consideration is given to achieving current income.
1972 -- VALUE LINE LEVERAGED GROWTH INVESTOR'S sole investment objective is
to realize capital growth by investing substantially all of its assets in
common stocks. The Fund may borrow up to 50% of its net assets to increase
its purchasing power.
1979 -- THE VALUE LINE CASH FUND, a money market fund, seeks high current
income consistent with preservation of capital and liquidity.
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 assets will be invested in issues of the U.S. Government and its
agencies and instrumentalities.
1983 -- VALUE LINE CENTURION FUND seeks long-term growth of capital as its
sole objective by investing primarily in stocks ranked 1 or 2 by Value Line
for year-ahead relative performance. The Fund is available to investors only
through the purchase of Guardian Investor, a tax deferred variable annuity,
or Value Plus, a variable life insurance policy.
1984 -- THE VALUE LINE TAX EXEMPT FUND seeks to provide investors with
maximum income exempt from federal income taxes while avoiding undue risk to
principal. The Fund offers investors a choice of two portfolios: a Money
Market Portfolio and a High-Yield 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
by investing in high-yielding, lower-rated, fixed-income securities.
1987 -- VALUE LINE NEW YORK TAX EXEMPT TRUST seeks to provide New York
taxpayers with 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 invests in stocks, bonds
and cash equivalents according to computer trend models developed by Value
Line. The objective is to professionally manage the optimal allocation of
these investments at all times. The Fund is available to investors only
through the purchase of the Guardian Investor, a tax deferred variable
annuity, or Value Plus, a variable life insurance policy.
1992 -- THE VALUE LINE ADJUSTABLE RATE U.S. GOVERNMENT SECURITIES FUND seeks
high current income consistent with low volatility of principal by investing
primarily in adjustable rate U.S. Government securities.
1993 -- VALUE LINE SMALL-CAP GROWTH 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 correct
asset mix.
- -------------------------------------------------------------------------------
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. READ THE PROSPECTUS CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
22
