================================================================================
------------------
SEMI-ANNUAL REPORT
------------------
August 31, 1998
------------------
Value Line
New York
Tax Exempt
Trust
[LOGO]
----------
VALUE LINE
No-Load
Mutual
Funds
<PAGE>
Value Line New York Tax Exempt Trust
To Our Value Line New York
- --------------------------------------------------------------------------------
To Our Shareholders:
The primary objective of the Value Line New York Tax Exempt Trust is to provide
investors with maximum income exempt from New York State, New York City and
federal personal income taxes, without undue risk to principal. During the six
months ended August 31, 1998, the Trust's total return was 3.23%. Since its
inception in July, 1987, the total return for the Trust, assuming the
reinvestment of all dividends over that period, has been 124.35%. This is
equivalent to an average annual total return of 7.50%. Your Trust's total return
for the January 1, 1998 through August 31, 1998 period was 4.22% compared to
4.54% for the Lehman Brothers Municipal Bond Index during this same time period.
During the six months ended August 31, 1998, prices of fixed-income securities
increased as interest rates plummeted to record lows. Long-term, tax-exempt
interest rates, as measured by the Bond Buyer's Index 40-Bond Index, declined
from 5.24% on February 27, 1998 to 5.11% on August 31, 1998. During this same
period, long-term taxable rates, as measured by the 30-year Treasury bond,
declined from 5.92% to 5.27%. The subdued inflationary environment, the Federal
surplus, and the Asian crisis have contributed to the decline in interest rates.
With fewer bonds being issued by the Treasury, long-term Treasury yields have
declined to new lows. At the same time, the number of new issues of tax-exempt
bonds has increased to near record highs. As a result, Treasury bonds have
significantly outperformed tax-exempt bonds during the past six months. For the
year to date ending (through August 31, 1998), the Lehman Treasury Bond Index
was up 7.20% compared to 4.54% for the Lehman Municipal Bond Index.*
In this environment of declining interest rates, your Trust's management has
maintained the average maturity of the portfolio to about 13 years and
emphasized the purchase of high-grade bonds which can not be redeemed by the
issuer prior to maturity for at least ten years. Management continues to avoid
securities rated below investment grade (defined as Baa or higher by Moody's
Investors Service and as BBB or higher by Standard & Poor's Corporation). As of
August 31, 1998, the market value of the Trust's portfolio consisted of 60% AAA
bonds, 22% AA bonds, 9% A bonds, and 9% Baa or BBB rated bonds. New York City
was upgraded to an A-rated bond this year. About 27% of the portfolio is
invested in bonds which cannot be redeemed by the issuer prior to maturity. The
portfolio's highest concentrations of investments are in the insured,
hospital-revenue, housing-revenue, education-revenue, and general obligation
sectors, respectively.
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 investing in a mutual fund, whose advantages include
professional management, diversification, liquidity, low transaction costs,
accurate record-keeping, automatic reinvestment of dividends, and availability
in small- dollar amounts. In addition to these features, The Value Line New York
Tax Exempt Trust has the additional advantage of carrying no sales or redemption
fees; it is a true no-load fund.
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2
<PAGE>
Value Line New York Tax Exempt Trust
Tax Exempt Trust Shareholders
- --------------------------------------------------------------------------------
We thank you for your continued confidence in Value Line, and look forward to
serving your investment needs in the future.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
October 16, 1998
Economic Observations
The U.S. economy has slowed considerably since the early part of this year,
principally as a result of the fallout from the series of financial crises now
engulfing the Pacific Rim, Russia, and parts of Latin America. As such, this
nation's gross domestic product, which expanded at better than at a 5% rate
early in the year, is currently proceeding at just about a third of that pace.
Moreover, the figures released in recent weeks, including those relating to
manufacturing, housing, retailing, and employment do not suggest that we'll see
any appreciable strengthening in economic activity over the next three to six
months.
At this point, though, we do not believe that this slower pace of economic
activity is the opening act in a serious domestic business downturn. Our sense
is that the global crisis will gradually recede over the next 12 to 18 months
and that the continuing modest level of inflation in this country will encourage
the Federal Reserve Board, which has already reduced short-term interest rates
in recent weeks, to relax the credit reins again--perhaps before year end.
- --------------------------------------------------------------------------------
* The Lehman Brothers Municipal Bond Index is a total-return performance
benchmark for the long-term, investment-grade, tax-exempt bond market.
Investment-grade bonds are rated Baa or higher by Moody's or BBB or higher
by Standard & Poor's. Returns and attributes for the index are calculated
semi-monthly using approximately 25,000 municipal bonds, which are priced
by Muller Data Corporation. The returns for the Index do not reflect
expenses, which are deducted from the Fund's returns.
Performance Data:*
Growth of
Average an Assumed
Annual Investment of
Total Return $10,000
------------ -------------
1 year ended 6/30/98..................... 8.41% $10,841
5 years ended 6/30/98.................... 5.36% $12,985
10 years ended 6/30/98.................... 7.61% $20,825
* The performance data quoted represent past performance and are no guarantee
of future performance. The average annual total return includes 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. The average annual total return for the one-year, five-year,
and ten-year periods ended August 31, 1998, were 8.44%, 5.24%, and 7.72%,
respectively.
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3
<PAGE>
Value Line New York Tax Exempt Trust
<TABLE>
<CAPTION>
Schedule of Investments (unaudited)
- --------------------------------------------------------------------------------------------------------
Principal
Amount Rating Value
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES (94.2%)
NEW YORK STATE (77.8%)
$1,000,000 Albany County, General Obligations, 5.75%, 6/1/11................. Aaa $ 1,091,980
Dormitory Authority, Revenue:
1,000,000 Bishop Henry B. Hucles Nursing Home, 5.625%, 7/1/18............. Aa1 1,046,430
500,000 Champlain Valley Hospitals, 6.00%, 7/1/10....................... AAA* 572,155
City University System, Ser. 1:
500,000 5.00%, 7/1/10................................................. Aaa 520,845
500,000 Third, 5.00%, 7/1/10.......................................... Aaa 519,220
1,000,000 Eger Health Center, 4.90%, 2/1/13............................... AAA* 998,930
500,000 Hospital for Special Surgery, 4.90%, 2/1/11..................... Aaa 510,870
625,000 Lakeside Nursing Home, 5.15%, 2/1/07............................ AAA* 660,356
555,000 Long Island University, Asset Guaranty, 5.50%, 9/1/10........... AA* 598,234
750,000 Lutheran Nursing Home, 5.125%, 2/1/18........................... Aaa 754,290
250,000 North Shore Hospital, Plainview, 5.50%, 11/1/14................. Aaa 270,680
500,000 Rochester Institute of Technology, 5.30%, 7/1/17................ Aaa 517,730
500,000 St. Barnabas Hospital, 5.35%, 8/1/17............................ Aaa 515,580
1,480,000 St. Clares Hospital, Ser. B, 5.25%, 2/15/15..................... Baa1 1,497,760
State University Educational Facilities:
1,000,000 5.00%, 5/15/12................................................ A3 1,016,520
985,000 5.00%, 5/15/17................................................ A3 980,193
500,000 W.K. Nursing Home Corp., 5.75%, 2/1/10.......................... AAA* 545,095
700,000 East Rochester, Housing Authority, Mortgage Revenue,
St. Johns Meadows, Ser. A, 5.05%, 8/1/07 ...................... AAA* 734,818
1,000,000 Environmental Facilities Corp., Pollution Control Revenue, Water,
Revolving Fund, Ser. E, 4.90%, 6/15/10 ........................ Aaa 1,029,650
1,730,000 Local Government Assistance Corp., Refunding,
Ser. B, 4.80%, 4/1/11 ......................................... Aaa 1,760,742
Medical Care Facilities Finance Agency, Revenue, Refunding,
Presbyterian Hospital, Ser. A:
160,000 5.10%, 8/15/10................................................ Aa2 165,099
1,100,000 5.25%, 8/15/14................................................ Aa2 1,135,563
700,000 Saint Mary's Hospital, Ser. A, 6.00%, 11/1/09................... Aaa 772,324
Mortgage Agency, Revenue Refunding, Homeowner Mortgage:
370,000 Ser. 72, 4.95%, 4/1/11.......................................... Aa2 372,283
525,000 Ser. 61, 5.60%, 10/1/11......................................... Aa2 546,268
1,000,000 Ser. 55, 5.95%, 10/1/17......................................... Aa2 1,061,420
</TABLE>
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4
<PAGE>
Value Line New York Tax Exempt Trust
<TABLE>
<CAPTION>
August 31, 1998
- --------------------------------------------------------------------------------------------------------
Principal
Amount Rating Value
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 1,000,000 Nassau County, General Obligation, Improvements,
Ser. Z, 5.00%, 9/1/12 ......................................... Aaa $ 1,029,130
1,000,000 Niagara Falls, Water Treatment Plant, 7.25%, 11/1/11.............. Aaa 1,262,870
890,000 Onondaga County, General Obligations, Ser. A, 5.85%, 5/1/10....... Aa2 971,284
1,000,000 Power Authority, Revenue & General Purpose,
Ser. A, 4.90%, 2/15/12 ........................................ Aa3 1,016,120
1,000,000 Syracuse, Housing Authority, Mortgage Revenue, Loretto Rest Home,
Ser. A, 5.60%, 8/1/17 ......................................... AAA* 1,050,600
520,000 Thruway Authority, Highway & Bridge Trust Fund,
Ser. B, 5.00%, 4/1/10 ......................................... Aaa 540,436
500,000 Urban Development Corp., Refunding, Corporate Purpose,
Senior Lien, 5.125%, 1/1/09 .................................... Aaa 528,245
-----------
TOTAL NEW YORK STATE .............................................. 26,593,720
-----------
NEW YORK CITY (14.8%) General Obligation:
55,000 Ser. F, 6.50%, 2/15/08.......................................... A3 61,943
1,000,000 Ser. G, Refunding, 5.00%, 8/1/10................................ Aaa 1,038,420
1,000,000 Ser. D, Refunding, 5.00%, 8/1/11................................ A3 1,018,860
1,500,000 Housing Development Corp., Multi-Family Housing Revenue,
Ser. A, 5.625%, 5/1/12 ........................................ Aa 1,566,375
Industrial Development Agency:
Civic Facilities Revenue:
500,000 College of Aeronautics Project, 5.45%, 5/1/18................. BBB* 514,320
500,000 USTA National Tennis Center Project, 6.40%, 11/15/08.......... Aaa 570,185
250,000 Industrial Development Revenue, Brooklyn Navy Yard,
Cogen Partners, 6.20%, 10/1/22 ................................ Baa3 280,395
-----------
TOTAL NEW YORK CITY ............................................... 5,050,498
-----------
PUERTO RICO (1.6%)
500,000 Electric Power Authority, Power Revenue,
Ser. T, 6.125%, 7/1/09 ........................................ Baa1 550,855
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TOTAL LONG-TERM MUNICIPAL SECURITIES .............................. 32,195,073
-----------
</TABLE>
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5
<PAGE>
Value Line New York Tax Exempt Trust
<TABLE>
<CAPTION>
Schedule of Investments (unaudited) August 31, 1998
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Principal
Amount Rating Value
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES (4.9%)
NEW YORK STATE (2.9%)
$ 1,000,000 Energy Research & Development Authority, Pollution Control Revenue,
Niagara Mohawk Power, Ser. A, 3.85%, 12/1/23.................... A2(1) $ 1,000,000
-----------
NEW YORK CITY (2.0%)
700,000 General Obligations, Subser. A-8, 3.30%, 8/1/18................... VMIG1(1) 700,000
-----------
TOTAL SHORT-TERM MUNICIPAL SECURITIES ............................. 1,700,000
-----------
TOTAL MUNICIPAL SECURITIES (99.1%)
(Cost $32,288,752) .............................................. 33,895,073
EXCESS OF CASH AND OTHER ASSETS
OVER LIABILITIES (.9%) ......................................... 291,829
-----------
NET ASSETS (100.0%) ............................................... $34,186,902
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE,
PER OUTSTANDING SHARE .......................................... $ 10.63
===========
</TABLE>
Rated by Moody's Investors Service except for those marked by an asterisk (*)
which are rated by Standard & Poor's.
Variable rate demand notes are considered short-term obligations. Interest rates
change every (1) day. These securities are secured by either letters of credit
or other credit support agreements from banks. The rates listed are as of August
31, 1998.
See Notes to Financial Statements
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6
<PAGE>
Value Line New York Tax Exempt Trust
Statement of Assets and Liabilities
at August 31, 1998 (unaudited)
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Dollars
(in thousands
except per-share
amount)
----------------
Assets:
Investment securities, at value
(Cost $32,289) ............................................. $33,895
Cash ......................................................... 28
Interest receivable .......................................... 356
Receivable for capital shares sold ........................... 16
-------
Total Assets ............................................. 34,295
-------
Liabilities:
Dividends payable to shareholders ............................ 37
Accrued expenses:
Advisory fee ............................................... 17
Other ...................................................... 54
-------
Total Liabilities ........................................ 108
-------
Net Assets: .................................................. $34,187
=======
Net Assets:
Capital stock, at $.01 par value
(authorized unlimited,
outstanding 3,215,418
shares of beneficial interest) ............................. $ 32
Additional paid-in capital ................................... 31,272
Accumulated net realized gain
on investments ............................................. 1,277
Unrealized net appreciation of
investments ................................................ 1,606
-------
Net Assets ................................................... $34,187
=======
Net Asset Value, Offering and
Redemption Price, per
Outstanding Share .......................................... $ 10.63
=======
Statement of Operations
for the Six Months Ended August 31, 1998 (unaudited)
- --------------------------------------------------------------------------------
Dollars
(in thousands)
--------------
Investment Income:
Interest .................................................... $ 868
-------
Expenses:
Advisory fee ................................................ 103
Auditing and legal fees ..................................... 22
Trustees' fees and expenses ................................. 8
Custodian fees .............................................. 7
Transfer agent fees ......................................... 6
Printing and stationery ..................................... 4
Other ....................................................... 18
-------
Total Expenses before
custody credits ....................................... 168
Less: custody credits ................................... (2)
-------
Net Expenses ............................................ 166
-------
Net Investment Income ....................................... 702
-------
Net Realized and Unrealized Gain on
Investments:
Net Realized Gain ....................................... 237
Change in Unrealized
Appreciation .......................................... 140
-------
Net Realized Gain and Change in
Unrealized Appreciation
on Investments ............................................ 377
-------
Net Increase in Net Assets
from Operations ........................................... $ 1,079
=======
See Notes to Financial Statements.
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7
<PAGE>
Value Line New York Tax Exempt Trust
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
for the Six Months Ended August 31, 1998 (unaudited), and for the Year Ended February 28, 1998
- -------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended
August 31, 1998 February 28,
(unaudited) 1998
-------------------------------
(Dollars in thousands)
<S> <C> <C>
Operations:
Net Investment income ............................................... $ 702 $ 1,456
Net Realized gain on investments..................................... 237 1,147
Change in net unrealized appreciation ............................... 140 380
--------------------------
Net increase in net assets from operations........................... 1,079 2,983
--------------------------
Distributions to Shareholders:
Net investment income ............................................... (702) (1,451)
--------------------------
Trust Share Transactions:
Net proceeds from sale of shares .................................... 1,569 3,531
Net proceeds from reinvestment of distribution to shareholders....... 476 986
Cost of shares repurchased........................................... (2,832) (4,197)
--------------------------
Net (decrease) increase in net assets from Trust share transactions . (787) 320
--------------------------
Total (Decrease) Increase in Net Assets ............................... (410) 1,852
Net Assets:
Beginning of period ................................................. 34,597 32,745
--------------------------
End of period ...................................................... $ 34,187 $ 34,597
==========================
</TABLE>
See Notes to Financial Statements.
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8
<PAGE>
Value Line New York Tax Exempt Trust
Notes to Financial Statements (unaudited) August 31, 1998
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Value Line New York Tax Exempt Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The investment objective of the Trust is to
provide New York taxpayers with the maximum income exempt from New York State,
New York City, and federal individual income taxes, while avoiding undue risk to
principal. The Trust will invest primarily in New York State municipal and
public-authority debt obligations. The ability of the issuers of the securities
held by the Trust to meet their obligations may be affected by economic or
political developments in New York State and New York City. The following
significant accounting policies are in conformity with generally accepted
accounting principles for investment companies. Such policies are consistently
followed by the Trust 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: The Trust's investments are valued each business day by
an independent pricing service ("Service") approved by the Trustees. 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 quotations
obtained by the Service from dealers in such securities. Other investments
(which constitute a majority of the portfolio securities) are valued by the
Service, based on methods that include consideration of yields or prices of
municipal securities of comparable quality, coupon, maturity, and type;
indications as to values from dealers; and general market conditions.
Short-term instruments maturing within 60 days are valued at amortized cost,
which approximates value. Other assets and securities for which no quotations
are readily available are valued in good faith at their fair value using methods
determined by the Trustees.
(B) Distributions: It is the policy of the Trust to distribute all of its
investment income to shareholders. Dividends from net investment income are
declared daily and paid monthly. Net realized capital gains, if any, are
distributed to shareholders annually. Income dividends and capital-gains
distributions are automatically reinvested in additional shares of the Trust
unless the shareholder has requested otherwise. Income earned by the Trust on
weekends, holidays, and other days on which the Trust is closed for business is
declared as a dividend on the next day on which the Trust is open for business.
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income-tax
regulations, which may differ from generally accepted accounting principles.
These "book/tax" differencs are either considered temporary or permanent in
nature, such amounts are reclassified within the capital accounts based on their
federal tax-basis treatment. In the current year, distributions in excess of net
investment income of $19,632 were reclassified to paid-in capital. Net
investment income, net realized gains/losses and net assets were not affected by
this reclassification. Temporary differences do not require reclassification.
(C) Federal Income Taxes: It is the policy of the Trust 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 Internal Revenue Code, and to distribute
all of its investment income and capital gains to its shareholders. Therefore,
no federal income-tax or excise-tax provision is required.
(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 discounts on investments in accordance with federal
income-tax regulations, is earned from settlement date and recognized on the
accrual basis.
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9
<PAGE>
Value Line New York Tax Exempt Trust
Notes to Financial Statements (unaudited) August 31, 1998
- --------------------------------------------------------------------------------
Additionally, when appropriate, the Trust recognizes market discount when the
securities are disposed.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date.
2. Trust Share Transactions
Transactions in shares of beneficial interest were as follows:
Six Months
Ended Year
August 31, Ended
1998 February 28,
(unaudited) 1998
---------------------------
(in thousands)
Shares sold ....................... 150 345
Shares issued to shareholders
in reinvestment of
distributions.................... 45 96
---------------------
195 441
Shares repurchased ................ (271) (410)
---------------------
Net (decrease) increase ........... (76) 31
=====================
3. Purchases and Sales of Securities
Purchases and sales of municipal securities were as follows:
Six Months
Ended
August 31, 1998
(unaudited)
---------------
(in thousands)
Purchases:
Long-term obligations ................................... $11,508
Short-term obligations .................................. 7,003
-------
$18,511
=======
MATURITIES OR Sales:
Long-term obligations ................................... $12,259
Short-term obligations .................................. 6,902
-------
$19,161
=======
At August 31, 1998, the aggregate cost of investments for federal income-tax
purposes was $32,288,752. The aggregate appreciation and depreciation of
investments at August 31, 1998, based on a comparison of investment values and
their costs for federal income-tax purposes, was $1,607,391 and $1,070,
respectively, resulting in a net appreciation of $1,606,321. During the year
ended February 28, 1998, the Trust utilized $107,675 of capital loss carry
overs.
4. Investment Advisory Contract and Transactions With Affiliates
An advisory fee of $103,095 was paid or payable to Value Line, Inc. (the
Adviser) for the six months ended August 31, 1998. This was computed at the rate
of 0.6 of 1% per year of the Trust's average daily net assets for the period.
The Adviser provides research, investment programs, and supervision of the
investment portfolio and pays costs of administrative services, office space,
and compensation of administrative, bookkeeping, and clerical personnel
necessary for managing the affairs of the Trust. The Adviser also provides
persons, satisfactory to the Trustees, to act as officers of the Trust and pays
their salaries and wages. The Trust bears all other costs and expenses in its
operation.
Certain officers and directors of the Adviser and its subsidiary, Value Line
Securities, Inc. (the Trust's distributor and a registered broker/dealer), are
also officers and a Trustee of the Trust.
At August 31, 1998, the Adviser owned 112,038 shares of beneficial interest in
the Trust, representing 3.5% of the outstanding shares. In addition, certain
officers and Trustees owned 21,125 shares of beneficial interest in the Trust,
representing 0.7% of the outstanding shares.
- --------------------------------------------------------------------------------
10
<PAGE>
Value Line New York Tax Exempt Trust
<TABLE>
<CAPTION>
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each period:
Six Months
Ended Years Ended on Last Day of February
August 31, 1998 -------------------------------------------------------------
(unaudited) 1998 1997 1996 1995 1994
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .................................. $ 10.51 $ 10.04 $ 10.28 $ 9.81 $ 10.49 $ 10.84
-------------------------------------------------------------------------------
Income from investment
operations:
Net investment income .................... .215 .445 .480 .491 .523 .570
Net gains or losses on securities
(both realized and unrealized) ......... .120 .469 (.113) .470 (.611) .062
-------------------------------------------------------------------------------
Total from investment
operations ............................. .335 .914 .367 .961 (.088) .632
-------------------------------------------------------------------------------
Less distributions:
Dividends from net investment
income ................................. (.215) (.444) (.480) (.491) (.523) (.570)
Distributions from capital gains ......... -- -- (.127) -- (.069) (.412)
-------------------------------------------------------------------------------
Total distributions .................... (.215) (.444) (.607) (.491) (.592) (.982)
-------------------------------------------------------------------------------
Net asset value, end of period ............... $ 10.63 $ 10.51 $ 10.04 $ 10.28 $ 9.81 $ 10.49
===============================================================================
Total return ................................. 3.23%+ 9.31% 3.73% 10.00% (.58%) 5.98%
===============================================================================
Ratios/Supplemental Data
Net assets, end of period
(in thousands) ............................. $34,187 $34,597 $32,745 $40,169 $39,139 $44,190
Ratio of expenses to
average net assets ......................... .98%(1)* .92%(1) .92%(1) .92% .86% .87%
Ratio of net investment income to
average net assets ......................... 4.08%* 4.35% 4.79% 4.87% 5.36% 5.21%
Portfolio turnover rate ...................... 36%+ 116% 86% 119% 105% 54%
</TABLE>
+ Not annualized, for six month period only.
* Annualized
(1) Before offset for custody credits.
See Notes to Financial Statements
- --------------------------------------------------------------------------------
11
<PAGE>
Value Line New York Tax Exempt Trust
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 Investors' 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 to
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.
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 corporate 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
individual 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.
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.
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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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 419729
Kansas City, MO 64141-6729
INDEPENDENT PricewaterhouseCoopers LLP
ACCOUNTANTS 1177 Avenue of the Americas
New York, NY 10036-2798
LEGAL COUNSEL Peter D. Lowenstein, Esq.
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830
TRUSTEES Jean Bernhard Buttner
John W. Chandler
Leo R. Futia
David H. Porter
Paul Craig Roberts
Nancy-Beth Sheerr
OFFICERS Jean Bernhard Buttner
Chairman and President
Raymond S. Cowen
Vice President
Charles Heebner
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
Trust 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 Trust (obtainable from
the Distributor).
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