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SUPPLEMENT TO PROSPECTUS DATED MARCH 1, 1995
THE VALUE LINE ADJUSTABLE RATE U.S. GOVERNMENT SECURITIES FUND, INC.
At a meeting held on September 21, 1995, the Board of Directors of the Fund
determined to recommend to the shareholders of the Fund that they approve a
change in the Fund's fundamental investment policy which would permit the Fund
to invest at least 65% of its assets, under normal circumstances, in a
diversified portfolio of debt securities with a dollar-weighted average
portfolio of between three to ten years. At present, the Fund's policy is to
invest at least 65% of its assets in adjustable rate securities that are issued
or guaranteed by the U.S. Government or any of its agencies or
instrumentalities, principally mortgage-backed and asset-backed securities.
If the proposed change in investment policy is approved by shareholders, the
Fund's investment objective of seeking high current income consistent with low
volatility of principal would remain unchanged. However, in pursuing that
objective, the Fund would no longer be restricted to investing primarily in
adjustable rate mortgage securities. Moreover, the name of the Fund would be
changed to "Value Line Intermediate Bond Fund, Inc."
The Fund's Board of Directors also determined at its meeting to recommend
that shareholders approve adoption of a Service and Distribution Plan which
would provide that the Fund would pay the Fund's distributor (a subsidiary of
the Fund's Advisor) a fee at the annual rate of 0.25% of the Fund's average
daily net assets.
The Service and Distribution Plan is designed to finance the activities of
the distributor principally intended to result in sales of the Fund's shares and
to include the following:
(a) to provide incentive to securities dealers to sell fund shares and to
provide administrative support services to the Fund and its shareholders;
(b) to compensate other participating financial institutions and
organizations (including individuals) for providing administrative
support services to the Fund and its shareholders;
(c) to pay for costs incurred in conjunction with advertising and marketing
of Fund shares including expenses of preparing, printing and distributing
prospectuses and sales literature to prospective shareholders, securities
dealers and others, and for servicing the accounts of shareholders; and
(d) other costs incurred in the implementation and operation of the Plan.
Both proposals are to be considered by the Fund's shareholders at a meeting
to be held in October or November 1995.
September 21, 1995
