<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
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
SERVICING AGENT Co.
c/o NFDS
P.O. Box 419729
Kansas City, MO 64141-6729
INDEPENDENT Price Waterhouse 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
Francis C. Oakley
Marion N. Ruth
Frances T. Newton
OFFICERS Jean Bernhard Buttner
CHAIRMAN AND PRESIDENT
Stephen Grant
VICE PRESIDENT
Christopher Bischof
VICE PRESIDENT
David T. Henigson
VICE PRESIDENT and
SECRETARY/TREASURER
Jack M. Houston
ASSISTANT SECRETARY/TREASURER
Stephen La Rosa
ASSISTANT SECRETARY/TREASURER
</TABLE>
THIS 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).
VLF703073
------------------------------------
ANNUAL REPORT
------------------------------------
MARCH 31, 1997
----------------------------------------
VALUE LINE
ASSET
ALLOCATION
FUND, INC.
[LOGO]
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
To Our Value Line Asset
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to report that since its inception, the Asset Allocation Fund has
been the top-performing fund of its kind, according to Lipper Analytical
Services, ranking #1 among 87 "flexible" funds. From inception August 24, 1993
through March 31, 1997, the Fund earned a total return of 87.63%, versus 80.26%
for the S&P 500 and 17.99% for the Lehman Government/Corporate Bond Index. Also
gratifying has been the Fund's consistency of excellence. A compilation by Money
magazine showed that your Fund was the only one among 2,787 stock and bond funds
to finish in the top 3% of its category in each of the past three calendar
years. In this highly competitive, fast-changing arena, that's a remarkable
feat; in fact, only six other funds finished even in the top 10% of their
category in all three years. Even more important, your Fund's risk exposure has
remained moderate, thanks to significant holdings of cash and bonds. As a
result, its reward/risk ratio has been among the highest in the mutual fund
universe.
For the fiscal year ended March 31, 1997, your Fund gained 17.49%, versus a
total return of 19.81% for the unmanaged Standard & Poor's 500 Stock Index and a
total return of 4.46% for the Lehman Government/Corporate Bond Index. Moreover,
the Fund achieved this return even though only 45%-50% of the assets were
invested in stocks during most of the fiscal year, thereby limiting risk
exposure.
Due to its performance, the Fund has, not surprisingly, begun to attract notice.
For example, U.S. News & World Report named the Fund among the "Best Funds of
the Year" for the second straight year and separately as one of the "Best Funds
for the Long Haul". Investor's Business Daily gave the Fund a Performance Rank
of A+. And Louis Rukeyser's Mutual Funds placed the Fund on the Rukeyser 100 as
one of its favorite 100 stock and bond funds. Interestingly, it placed the Fund
in its Growth category, where it holds its own against some of the top all-stock
funds.
In selecting stocks, we use a very disciplined approach that favors issues with
strong earnings and price momentum. Holdings that subsequently fall short of
these standards are quickly removed from the portfolio. Many stocks make only a
short visit to the portfolio, but the winners are welcomed for long-term stays.
The Fund holds about 180 issues diversified across many different industries,
with no large bets on any individual stock or sector. This diversification is
another method of reducing risk exposure. Small-capitalization issues make up
about half of the stockholdings, with the remainder weighted a bit more toward
mid-cap than large-cap.
In allocating assets, we also use a disciplined approach, relying on proprietary
models that incorporate a number of financial and economic variables. The Fund
began the last fiscal year with 64% of assets in stocks, but the stock market
rally and rising interest rates caused us to reduce the stock allocation to
45%-50% last summer, where it has since remained. Most recently, the somewhat
tighter money policy of the Federal Reserve has been a factor in keeping the
Fund's stock allocation below its long-term central tendency of 55%. Bond
allocation began the last fiscal year at 12%, but was raised to 25%-30% due to
the rise in yields in the spring of 1996. Bondholdings are currently all in
Treasuries and are weighted toward shorter maturities.
Thank you for investing with us.
Sincerely,
[SIGNATURE]
Jean Bernhard Buttner
CHAIRMAN AND PRESIDENT
May 29, 1997
- --------------------------------------------------------------------------------
2
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
Allocation Fund Shareholders
- --------------------------------------------------------------------------------
Economic Observations
The current economic expansion is now in its seventh year. Although this does
not yet qualify as the longest peacetime period of growth in our nation's
history (both the 1960s and the 1980s experienced somewhat longer upcycles), it
is still quite noteworthy, especially since there are as yet few signs that this
lengthy run of uninterrupted prosperity is about to draw to a close. In fact,
recent reports show that there is still a good deal of strength around, with
high doses of consumer confidence, continuing solid job growth, and healthy
levels of retail, housing, and manufacturing activity pointing to relatively
good levels of economic growth over the next few quarters.
Inflation, meanwhile, continues to be reasonably subdued. This healthy pricing
trend, which is remarkable given the longevity of the business expansion, is,
moreover, unlikely to change dramatically in the months ahead. Underscoring our
optimism in this area is the recent hammering out of a presumably workable
budget accord (which should reduce the government's need to borrow to finance
the deficit) and the fact that there is still a lack of serious shortages on
either the labor or the raw-materials fronts. On this latter score, though, we
do note that the recent pickup in wage pressures could, if unchecked, pose a
threat later in the year or in 1998.
Interest rates, meantime, reflecting the likely moderate pace of upcoming
economic growth and the fairly subdued pricing structure, are unlikely to
increase all that much over the next year. Nevertheless, we caution that recent
remarks by Federal Reserve Chairman Alan Greenspan, in which he indicated that
the central bank has, in the past, occasionally raised rates before higher
inflation actually took hold, and the one-quarter of a percentage point increase
in short-term interest rates that was tacked on in March, would seem to suggest
that the Fed will not be shy about tightening the credit reins further, if it
sees the need. An additional upward move in rates, if sufficiently pronounced,
would not be good news for either the stock or the bond markets, or, ultimately,
for the U.S. economy.
Performance Data:*
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN
--------------------------
<S> <C>
1 Year ended 3/31/97.............................................................. 17.49%
3 Years ended 3/31/97............................................................. 21.68%
From 8/24/93 (commencement of operations) to 3/31/97.............................. 19.10%
</TABLE>
* 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 VALUES
OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTMENT, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST.
- --------------------------------------------------------------------------------
3
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
VALUE LINE ASSET ALLOCATION FUND, INC.,
LEHMAN AGGREGATE BOND INDEX, AND THE S&P 500
Value Line Asset Allocation Fund,
Inc. S&P 500
<S> <C> <C>
8/24/93 $10,000 $10,000
9/30 $10,480 $10,051
12/31/93 $10,596 $10,284
3/31 $10,415 $9,897
6/30 $10,275 $9,939
9/30 $10,898 $10,425
12/31/94 $10,961 $10,423
3/31 $11,818 $11,435
6/30 $12,757 $12,523
9/30 $14,104 $13,515
12/31/95 $14,919 $14,326
3/31 $ 15,970 $15,094
6/30 $ 17,383 $15,770
9/30 $ 18,231 $16,254
12/31/96 $ 18,888 $17,607
3/31/97 $ 18,764 $18,082
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
VALUE LINE ASSET ALLOCATION FUND, INC.,
LEHMAN AGGREGATE BOND INDEX, AND THE S&P 500
Lehman Aggregate Bond Index
<S> <C>
8/24/93 $10,000
9/30 $10,080
12/31/93 $10,051
3/31 $9,737
6/30 $9,615
9/30 $9,663
12/31/94 $9,699
3/31 $10,182
6/30 $10,843
9/30 $11,050
12/31/95 $11,565
3/31 $11,294
6/30 $11,347
9/30 $11,547
12/31/96 $11,901
3/31/97 $11,798
</TABLE>
From 8/24/93 to 3/31/97
The Standard & Poor's 500 Index is an unmanaged index that is representative of
the larger capitalization stocks traded in the United States. The presentation
includes reinvested dividends. The Lehman Brothers Government/Corporate Bond
Index is an unmanaged index that generally represents the U.S. Bond market, with
issues having an average maturity of 9.8 years. The graphic representation
includes interest reinvested.
- --------------------------------------------------------------------------------
4
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
Schedule of Investments March 31, 1997
- -------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -----------------------------------------------------
<C> <S> <C>
COMMON STOCKS (49.3%)
ADVERTISING (0.4%)
6,200 Omnicom Group, Inc........ $ 309,225
AEROSPACE/ DEFENSE (0.7%)
7,000 BE Aerospace, Inc.*....... 171,500
4,000 Precision Castparts
Corp.................... 204,000
8,000 Wyman-Gordon Co.*......... 163,000
-----------
538,500
AIR TRANSPORT (0.3%)
8,000 Expeditors International
of Washington, Inc...... 192,000
APPAREL (1.6%)
15,000 Farah, Inc.*.............. 150,000
7,000 Fruit of the Loom,
Inc.*................... 290,500
8,000 Jones Apparel Group,
Inc.*................... 297,000
9,000 Oxford Industries, Inc.... 239,625
4,000 Quaker Fabric Corp.*...... 52,000
4,000 St. John Knits, Inc....... 173,000
-----------
1,202,125
AUTO PARTS-ORIGINAL
EQUIPMENT (0.3%)
6,000 Tower Automotive, Inc.*... 234,000
AUTO PARTS-REPLACEMENT
(0.5%)
7,500 Donnelly Corp............. 120,937
6,200 SPX Corp.................. 281,325
-----------
402,262
BEVERAGE-SOFT DRINK
(0.2%)
3,000 Coca-Cola Bottling Co.
Consolidated............ 130,500
<CAPTION>
SHARES VALUE
- -----------------------------------------------------
<C> <S> <C>
BUILDING MATERIALS (0.5%)
8,000 Martin Marietta Materials,
Inc..................... $ 206,000
7,000 Thomas Industries, Inc.... 164,500
-----------
370,500
CEMENT AND AGGREGATES
(0.3%)
6,000 Lone Star Industries,
Inc..................... 232,500
CHEMICAL-DIVERSIFIED
(0.3%)
6,000 Cytec Industries, Inc.*... 227,250
CHEMICAL-SPECIALTY (1.3%)
8,000 Amcol International
Corp.................... 145,000
4,000 Avery Dennison Corp....... 154,000
5,000 Fuller (H.B.) & Co........ 243,750
8,000 Lubrizol Corp. (The)...... 260,000
3,800 Tredegar Industries,
Inc..................... 153,425
-----------
956,175
COAL/ALTERNATE ENERGY
(0.7%)
6,000 AES Corp.*................ 336,000
5,000 CalEnergy Inc.*........... 170,000
-----------
506,000
COMPUTER & PERIPHERALS
(0.6%)
4,000 Brooktrout Technology,
Inc.*................... 59,500
2,000 Compaq Computer Corp.*.... 153,250
16,000 Funco, Inc.*.............. 224,000
-----------
436,750
</TABLE>
- --------------------------------------------------------------------------------
5
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
Schedule of Investments
- -------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -----------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE &
SERVICES (2.9%)
8,000 Banctec, Inc.*............ $ 204,000
6,000 Boole & Babbage, Inc.*.... 142,500
4,000 Computer Data Systems,
Inc..................... 120,500
5,500 Computer Task Group,
Inc..................... 195,250
4,300 Compuware Corp.*.......... 269,825
7,000 Comverse Technology,
Inc.*................... 276,500
6,000 Electronics for Imaging,
Inc.*................... 239,250
7,000 FIserv, Inc.*............. 260,750
5,600 National Data Corp........ 198,100
4,000 National Instruments
Corp.*.................. 129,000
6,000 Pomeroy Computer
Resources, Inc.*........ 118,500
-----------
2,154,175
DIVERSIFIED COMPANIES
(2.7%)
4,800 Danaher Corp.............. 199,800
17,000 Griffon Corp.*............ 204,000
10,000 Nortek, Inc.*............. 196,250
3,000 Raychem Corp.............. 247,125
13,000 Rexel, Inc.*.............. 235,625
5,000 Tyco International,
Ltd..................... 275,000
5,000 United Technologies
Corp.................... 376,250
6,700 Valmont Industries,
Inc..................... 261,300
-----------
1,995,350
DRUG (0.8%)
8,000 K-V Pharmaceutical Co.
Class "A"*.............. 132,000
4,000 Merck & Co., Inc.......... 337,000
7,000 NBTY, Inc.*............... 105,875
-----------
574,875
<CAPTION>
SHARES VALUE
- -----------------------------------------------------
<C> <S> <C>
ELECTRICAL EQUIPMENT
(0.8%)
5,000 Jabil Circuit, Inc.*...... $ 225,313
6,000 Kuhlman Corp.............. 139,500
16,000 Magnetek, Inc.*........... 258,000
-----------
622,813
ELECTRONICS (0.6%)
11,200 Ducommun, Inc.*........... 273,000
8,000 Lexmark International
Group, Inc.*............ 194,000
-----------
467,000
ENVIRONMENTAL (0.9%)
8,500 USA Waste Services,
Inc.*................... 301,750
6,000 U.S. Filter Corp.*........ 185,250
6,000 United Waste Systems,
Inc.*................... 223,500
-----------
710,500
FINANCIAL SERVICES (0.8%)
20,000 Imperial Credit
Industries,
Inc.*................... 402,500
4,000 Travelers Group, Inc...... 191,500
-----------
594,000
FOOD PROCESSING (1.3%)
6,400 Campbell Soup Co.......... 296,800
12,000 Chiquita Brands
International, Inc...... 186,000
6,000 Morningstar Group, Inc.
(The)*.................. 115,500
8,000 Smithfield Foods, Inc.*... 338,000
-----------
936,300
FOOD WHOLESALERS (0.3%)
7,200 Riser Foods, Inc.......... 238,500
</TABLE>
- --------------------------------------------------------------------------------
6
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
March 31, 1997
- -------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -----------------------------------------------------
<C> <S> <C>
FURNITURE/HOME FURNISHINGS
(1.7%)
7,000 Ethan Allen Interiors,
Inc..................... $ 304,500
9,000 Furniture Brands
International, Inc.*.... 135,000
7,000 La-Z-Boy, Inc............. 239,750
3,000 Miller (Herman), Inc...... 204,750
8,000 Mohawk Industries,
Inc.*................... 167,000
10,000 Stanley Furniture Co.,
Inc.*................... 195,000
-----------
1,246,000
GROCERY (1.3%)
3,400 American Stores Co........ 151,300
7,000 Quality Food Centers,
Inc.*................... 294,000
6,400 Safeway, Inc.*............ 296,800
4,000 Vons Companies, Inc.*..... 259,000
-----------
1,001,100
HOMEBUILDING (0.4%)
6,000 Fairfield Communities,
Inc.*................... 150,000
11,000 Host Marriott Corp.*...... 187,000
-----------
337,000
HOTEL/GAMING (0.9%)
10,000 Hilton Hotels Corp........ 242,500
11,000 International Game
Technology.............. 177,375
8,000 Promus Hotel Corp.*....... 266,000
-----------
685,875
HOUSEHOLD PRODUCTS (1.1%)
10,000 Libbey, Inc............... 312,500
2,200 Procter & Gamble Co....... 253,000
10,000 Watsco, Inc............... 255,000
-----------
820,500
<CAPTION>
SHARES VALUE
- -----------------------------------------------------
<C> <S> <C>
INDUSTRIAL SERVICES
(1.0%)
6,600 CDI Corp.*................ $ 245,025
12,500 O'Sullivan Industries
Holdings, Inc.*......... 157,812
7,000 Pinkerton's, Inc.*........ 180,250
4,400 Robert Half International,
Inc.*................... 153,450
-----------
736,537
INSURANCE-DIVERSIFIED
(1.1%)
5,800 American Bankers Insurance
Group, Inc.............. 282,750
3,000 American International
Group, Inc.............. 352,125
4,300 Horace Mann Educators
Corp.................... 189,738
-----------
824,613
INSURANCE-LIFE (1.0%)
16,202 Conseco, Inc.............. 577,196
4,000 SunAmerica, Inc........... 150,500
-----------
727,696
INSURANCE-PROPERTY/
CASUALTY (0.4%)
3,000 Philadelphia Consolidated
Holding Co.*............ 86,344
3,000 Progressive Corp.......... 191,625
-----------
277,969
MACHINERY (2.9%)
6,200 Applied Power, Inc. Class
"A"..................... 260,400
2,000 Binks Manufacturing Co.... 78,750
11,000 Chart Industries, Inc..... 232,375
8,000 Dreco Energy Services,
Ltd. Class "A"*......... 272,000
</TABLE>
- --------------------------------------------------------------------------------
7
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
Schedule of Investments
- -------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -----------------------------------------------------
<C> <S> <C>
MACHINERY (CONTINUED)
3,000 Graco Inc................. $ 86,250
9,000 Iteq Inc.*................ 58,500
9,000 Inter-City Products
Corp.*.................. 47,813
6,000 Lincoln Electric Co....... 219,000
7,000 Manitowoc Co., Inc........ 252,875
12,000 MotivePower Industries,
Inc.*................... 130,500
16,000 Powell Industries,
Inc.*................... 212,000
5,000 Scotsman Industries,
Inc..................... 140,000
7,000 Zoltek Companies, Inc.*... 177,625
-----------
2,168,088
MANUFACTURED HOUSING/
RECREATIONAL VEHICLES
(0.2%)
10,000 Monaco Coach Corp.*....... 178,750
MEDICAL SERVICES (0.8%)
8,000 Hooper Holmes, Inc........ 136,000
8,000 RehabCare Group, Inc.*.... 189,000
8,000 Universal Health Services,
Inc. Class "B"*......... 263,000
-----------
588,000
MEDICAL SUPPLIES (2.8%)
3,600 Boston Scientific
Corp.*.................. 222,300
4,500 Cardinal Health, Inc...... 244,687
12,000 Cooper Companies, Inc.*... 243,000
19,000 Graham-Field Health
Products, Inc.*......... 206,625
4,500 Guidant Corp.............. 276,750
18,000 International Murex
Technologies Corp.*..... 124,875
11,000 Kinetic Concepts, Inc..... 156,750
<CAPTION>
SHARES VALUE
- -----------------------------------------------------
<C> <S> <C>
MEDICAL SUPPLIES
(CONTINUED)
8,000 Patterson Dental Co.*..... $ 272,000
10,000 Safeskin Corp.*........... 181,250
10,000 Sullivan Dental Products,
Inc..................... 146,250
-----------
2,074,487
METAL FABRICATING (0.8%)
5,000 Mueller Industries,
Inc.*................... 195,625
10,000 Shaw Group, Inc. (The)*... 228,750
3,500 Timken Co................. 187,250
-----------
611,625
NATURAL GAS-DIVERSIFIED
(0.6%)
5,000 El Paso Natural Gas Co.... 283,125
4,000 PanEnergy Corp............ 172,500
-----------
455,625
NEWSPAPER (0.6%)
4,000 Central Newspapers, Inc.
Class "A"............... 200,500
5,000 New York Times Co. (The)
Class "A"............... 220,625
-----------
421,125
OFFICE EQUIPMENT &
SUPPLIES (0.3%)
7,000 General Binding Corp...... 211,750
OILFIELD SERVICES/
EQUIPMENT (1.5%)
19,000 Aztec Manufacturing Co.... 201,875
6,200 Camco International,
Inc..................... 272,800
11,000 Global Marine, Inc.*...... 236,500
12,000 Noble Drilling Corp.*..... 207,000
4,000 Smith International,
Inc.*................... 182,500
-----------
1,100,675
</TABLE>
- --------------------------------------------------------------------------------
8
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
March 31, 1997
- -------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -----------------------------------------------------
PACKAGING & CONTAINER
(0.7%)
<C> <S> <C>
3,000 Bemis Co., Inc............ $ 120,000
6,000 Gibson Greetings, Inc.*... 124,500
4,000 Owens-Illinois, Inc.*..... 98,500
5,000 Sealed Air Corp.*......... 205,625
-----------
548,625
PAPER & FOREST PRODUCTS
(0.2%)
4,000 Standard Register Co...... 131,000
PETROLEUM-PRODUCING
(0.4%)
14,000 Global Industries,
Ltd.*................... 299,250
PRECISION INSTRUMENT
(0.8%)
3,000 Hutchinson Technology,
Inc.*................... 85,500
16,000 Molecular Dynamics,
Inc.*................... 236,000
4,500 Perceptron, Inc.*......... 118,125
3,000 Perkin-Elmer Corp......... 193,125
-----------
632,750
PUBLISHING (0.6%)
6,000 Consolidated Graphics,
Inc.*................... 171,750
11,000 Valassis Communications,
Inc.*................... 246,125
-----------
417,875
RECREATION (0.3%)
6,000 Fountain Powerboat
Industries, Inc.*....... 115,500
19,000 Handleman Co.*............ 135,375
-----------
250,875
RESTAURANT (1.0%)
15,000 CKE Restaurants, Inc...... 331,875
10,000 Foodmaker, Inc.*.......... 101,250
7,500 ShowBiz Pizza Time,
Inc.*................... 131,250
20,000 WSMP, Inc.*............... 202,500
-----------
766,875
RETAIL-SPECIAL LINES
(3.1%)
5,500 Cole National Corp. Class
"A"*.................... 174,625
12,000 Dress Barn, Inc.*......... 202,500
<CAPTION>
SHARES VALUE
- -----------------------------------------------------
<C> <S> <C>
RETAIL-SPECIAL LINES
(CONTINUED)
4,000 Fabri-Centers of America,
Inc. Class "B"*......... $ 72,500
12,000 Goody's Family Clothing,
Inc.*................... 276,000
7,000 Herbalife International,
Inc..................... 126,875
6,000 Lands' End, Inc.*......... 159,000
12,000 Ross Stores, Inc.......... 304,500
5,000 Russ Berrie & Co., Inc.... 116,875
3,000 Samsonite Corp.*.......... 129,750
5,000 TJX Companies, Inc........ 213,750
6,000 Tiffany & Co.............. 228,000
9,000 Tuesday Morning Corp.*.... 288,000
-----------
2,292,375
RETAIL BUILDING SUPPLY
(0.2%)
8,700 Eagle Hardware & Garden,
Inc.*................... 156,600
RETAIL STORE (0.6%)
7,000 Costco Companies, Inc.*... 193,375
4,000 Meyer (Fred), Inc.*....... 165,000
6,000 Paul Harris Stores,
Inc.*................... 93,000
-----------
451,375
SHOE (0.7%)
15,000 Genesco, Inc.*............ 168,750
4,000 Rocky Shoes & Boots,
Inc.*................... 53,500
9,000 Wolverine World Wide,
Inc..................... 328,500
-----------
550,750
TELECOMMUNICATIONS
EQUIPMENT (0.1%)
5,000 Digital Microwave
Corp.*.................. 96,250
TELECOMMUNICATIONS SERVICE
(0.3%)
4,000 Cincinnati Bell, Inc...... 226,000
TEXTILE (0.9%)
8,000 Guilford Mills, Inc....... 241,000
12,000 Interface Inc. Class
"A"..................... 300,750
8,000 Paxar Corp.*.............. 155,000
-----------
696,750
</TABLE>
- --------------------------------------------------------------------------------
9
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
Schedule of Investments March 31, 1997
- -------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------
<C> <S> <C>
THRIFT (0.2%)
4,200 Charter One Financial,
Inc..................... $ 184,275
TOBACCO (0.5%)
2,400 Culbro Corp.*............. 225,000
7,070 Standard Commercial
Corp.*.................. 126,376
-----------
351,376
TOILETRIES/ COSMETICS
(0.5%)
7,000 Helen of Troy Ltd.*....... 166,250
21,500 Playtex Products, Inc.*... 233,813
-----------
400,063
-----------
TOTAL COMMON STOCKS (COST
$32,231,959)............ 36,951,779
-----------
U.S. TREASURY OBLIGATIONS (26.6%)
$ 4,000,000 United States Treasury
Notes 6 1/8%,
3/31/98**............... 4,002,840
4,000,000 United States Treasury
Notes 6 1/4%, 6/30/98... 4,002,800
2,000,000 United States Treasury
Notes 6 1/8%, 8/31/98... 1,995,720
4,000,000 United States Treasury
Notes 6 3/4%, 5/31/99... 4,020,200
1,000,000 United States Treasury
Notes 7 3/4%, 2/15/01... 1,035,170
2,000,000 Unites States Treasury
Notes 5 7/8%,
11/15/05................ 1,863,280
3,000,000 United States Treasury
Bonds 7 1/4%, 8/15/22... 3,008,160
-----------
TOTAL U.S. TREASURY
OBLIGATIONS (COST
$20,150,242)............ 19,928,170
-----------
TOTAL INVESTMENT
SECURITIES (75.9%) (COST
$52,382,201)............ 56,879,949
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENT
(24.1%) (INCLUDING
ACCRUED INTEREST)
$18,100,000 Collateralized by
$14,115,000 U.S.
Treasury Bills, due
8/14/97 and $4,870,000
U.S. Treasury Bills, due
2/5/98 with a combined
value of $18,469,536
(with First Chicago
Capital Markets, Inc.,
5.90%, dated 3/31/97,
due 4/1/97, delivery
value $18,102,966)...... $18,102,966
EXCESS OF LIABILITIES OVER CASH AND
OTHER ASSETS (0.0%).................... (2,085)
-----------
NET ASSETS (100%)...................... $74,980,830
-----------
-----------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE, PER OUTSTANDING SHARE
($74,980,830 DIVIDED BY 5,498,133
SHARES
OUTSTANDING)......................... $ 13.64
-----------
-----------
</TABLE>
* NON-INCOME PRODUCING
** PART OF THIS SECURITY IS SEGREGATED TO COVER INITIAL MARGIN
REQUIREMENTS ON THE FOLLOWING OPEN SHORT FINANCIAL FUTURES CONTRACTS:
<TABLE>
<CAPTION>
NO. OF UNREALIZED CONTRACT
CONTRACTS GAIN VALUE
--------------- ----------- ----------
<S> <C> <C> <C>
Russell 2,000
Index
June 1997 16 $ 208,800 $2,759,200
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
10
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
Statement of Assets and Liabilities
at March 31, 1997
- ------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment securities, at value
(Cost--$52,382,201)................... $ 56,879,949
Repurchase agreement
(Cost--$18,102,966)................... 18,102,966
Cash.................................... 4,461
Receivable for securities sold.......... 480,231
Dividends and interest receivable....... 262,290
Receivable for capital shares sold...... 130,605
Variation margin on futures contracts... 56,800
Deferred organization costs (note 2).... 18,330
-------------
TOTAL ASSETS........................ 75,935,632
-------------
LIABILITIES:
Payable for securities purchased........ 803,953
Payable for capital shares
repurchased........................... 40,435
Accrued expenses:
Advisory fee payable.................. 42,370
Distribution plan fees payable........ 16,003
Other................................. 52,041
-------------
TOTAL LIABILITIES................... 954,802
-------------
NET ASSETS.............................. $ 74,980,830
-------------
-------------
NET ASSETS CONSIST OF:
Capital stock, at $.001 par value
(authorized 300,000,000, outstanding
5,498,133 shares)..................... $ 5,499
Additional paid-in capital.............. 66,991,745
Undistributed investment income-net..... 380,210
Accumulated net realized gain on
investments........................... 2,896,828
Unrealized net appreciation of
investments (includes $208,800
unrealized gain on open futures
contracts)............................ 4,706,548
-------------
NET ASSETS.............................. $ 74,980,830
-------------
-------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE, PER OUTSTANDING SHARE
($74,980,830 DIVIDED BY 5,498,133
SHARES OUTSTANDING)................... $ 13.64
-------------
-------------
</TABLE>
Statement of Operations
for the year ended March 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income......................... $ 1,965,246
Dividend income (net of foreign
withholding tax of $296)............. 159,081
-------------
Total Income........................ 2,124,327
-------------
EXPENSES:
Advisory fee............................ 437,635
Service and distribution plan fee....... 168,321
Custodian fees.......................... 48,953
Auditing and legal fees................. 35,599
Accounting & bookkeeping expense........ 32,400
Registration and filing fees............ 29,040
Transfer agent fees..................... 17,582
Directors' fees and expenses............ 16,471
Printing................................ 13,976
Amortization of deferred organization
costs (note 2)....................... 13,093
Insurance, dues and other............... 8,713
-------------
Total Expenses Before Custody
Credits............................ 821,783
Less: Custody Credits............... (3,779)
-------------
Net Expenses........................ 818,004
-------------
INVESTMENT INCOME--NET.................. 1,306,323
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS--NET:
Realized Gain--Net (includes $104,482
loss on futures contracts)........... 10,113,531
Change in Unrealized Appreciation
(Depreciation) (includes $208,800
unrealized gain on open futures
contracts)........................... (1,342,707)
-------------
NET REALIZED GAIN AND NET UNREALIZED
APPRECIATION (DEPRECIATION) OF
INVESTMENTS........................... 8,770,824
-------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS........................... $ 10,077,147
-------------
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
11
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
Statement of Changes in Net Assets
for the years ended March 31, 1997 and 1996
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
MARCH 31, 1997 MARCH 31, 1996
---------------------------------------
<S> <C> <C>
OPERATIONS:
Investment income--net................ $ 1,306,323 $ 412,793
Realized gain on investments--net..... 10,113,531 7,850,774
Net change in unrealized
(depreciation) appreciation........... (1,342,707) 3,999,625
---------------------------------------
Net increase in net assets from
operations............................ 10,077,147 12,263,192
---------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
Investment income--net................ (1,023,047) (408,505)
Realized gains--net................... (11,007,991) (4,391,445)
---------------------------------------
Total distributions................... (12,031,038) (4,799,950)
---------------------------------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares...... 30,217,220 18,879,669
Net proceeds from reinvestment of
distributions to shareholders......... 11,783,049 4,775,221
Cost of shares repurchased............ (20,868,278) (1,487,694)
---------------------------------------
Increase from capital share
transactions.......................... 21,131,991 22,167,196
---------------------------------------
TOTAL INCREASE.......................... 19,178,100 29,630,438
NET ASSETS:
Beginning of year..................... 55,802,730 26,172,292
---------------------------------------
End of year........................... $ 74,980,830 $ 55,802,730
---------------------------------------
---------------------------------------
UNDISTRIBUTED INVESTMENT INCOME--NET,
AT END OF YEAR........................ $ 380,210 $ 96,934
---------------------------------------
---------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
12
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
Notes to Financial Statements March 31, 1997
- -------------------------------------------
1. Significant Accounting Policies
Value Line Asset Allocation Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company which seeks to achieve a high total investment
return consistent with reasonable risk by investing primarily in a broad range
of common stocks, bonds and money market instruments. The Fund will attempt to
achieve its objective by following an asset allocation strategy, based on data
derived from computer models for the stock and bond markets, that shifts the
assets of the Fund among equity, debt and money market securities as the models
indicate and its investment adviser, Value Line, Inc. (the "Adviser"), deems
appropriate.
The following significant accounting policies 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. Securities listed on a securities exchange and
over-the-counter securities traded on the NASDAQ national market are valued at
the closing sales price on the date as of which the net asset value is being
determined. In the absence of closing sales prices for such securities and for
securities traded in the over-the-counter market, the security is valued at the
midpoint between the latest available and representative asked and bid prices.
Securities for which market quotations are not readily available or which are
not readily marketable and all other assets of the Fund are valued at fair value
as the Board of Directors may determine in good faith. Short-term instruments
with maturities of 60 days or less at the date of purchase are valued at
amortized cost, which approximates market value.
(B) REPURCHASE AGREEMENTS. In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. In
the event of default of the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
(C) FEDERAL INCOME TAXES. It is the Fund's policy to comply with the
requirements of the Internal Revenue Code of 1986, as amended, applicable to
regulated investment companies, and to distribute all of its taxable income to
its shareholders. Therefore, no federal income tax or excise tax provision is
required.
(D) SECURITY TRANSACTIONS AND DISTRIBUTIONS. Security transactions are accounted
for on the date the securities are purchased or sold. Realized gains and losses
on sales of securities are calculated for financial accounting and federal
income tax purposes on the identified cost basis. Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
Distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles.
(E) AMORTIZATION. Discounts on debt securities are amortized to interest income
over the life of the security with a corresponding increase to the security's
cost basis; premiums on debt securities are not amortized.
(F) FINANCIAL FUTURES CONTRACTS. A financial futures contract is an agreement
between two parties to buy or sell financial instruments at a set price on a
future date. Upon entering into such a contract the Fund is required to pledge
to the broker cash, or U.S. Government securities,
- --------------------------------------------------------------------------------
13
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
Notes to Financial Statements
- -------------------------------------------
equal to the minimum "initial margin" requirements of the applicable futures
exchange. Pursuant to the contract, the Fund agrees to receive from or to pay
the broker an amount of cash equal to the daily fluctuation in the value of the
contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed.
2. Organization Costs
Costs of $66,040 incurred in connection with the Fund's organization and initial
registration have been deferred and are being amortized over sixty months
beginning at the commencement of operations of the Fund. In the event any of the
initial shares of the Fund are redeemed by the holder thereof during the
five-year amortization period, the redemption proceeds will be reduced by a pro
rata portion of any unamortized deferred organizational expenses in the same
proportion as the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption.
3. Capital Share Transactions
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------
<S> <C> <C>
Shares sold.................. 2,033,628 1,435,241
Shares issued in reinvestment
of dividends and
distributions.............. 870,240 363,965
--------------------
2,903,868 1,799,206
Shares repurchased........... 1,354,654 109,696
--------------------
Net increase................. 1,549,214 1,689,510
---------
---------
</TABLE>
4. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, were as
follows:
<TABLE>
<CAPTION>
1997
------------
<S> <C>
PURCHASES:
U.S. Treasury Obligations............. $ 15,625,156
Other Investment Securities........... 90,726,435
------------
$106,351,591
------------
------------
SALES:
U.S. Treasury Obligations............. $ 1,889,688
Other Investment Securities........... 98,450,265
------------
$100,339,953
------------
------------
</TABLE>
At March 31, 1997, the aggregate cost of investment securities and short-term
investments for federal income tax purposes was $70,489,169. The aggregate
appreciation and depreciation of investments at March 31, 1997, based on a
comparison of investment values and their costs for federal income tax purposes
were $5,704,020 and $1,210,274, respectively, resulting in a net appreciation of
$4,493,746.
5. Advisory Fees, Service and Distribution Plan Fees and Transactions With
Affiliates
An advisory fee of $437,635 was paid or payable to the Adviser for the year
ended March 31, 1997. The fee was computed at the annual rate of .65 of 1% of
the daily net assets during the year and paid monthly. The Adviser provides
research, investment programs and supervision of the investment portfolio and
pays costs of certain administrative services and office space. 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 in its organization and operation.
A fee of $2,880 for printing services was paid to the Adviser for the year ended
March 31, 1997.
- --------------------------------------------------------------------------------
14
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
March 31, 1997
- -------------------------------------------
The Fund has a Service and Distribution Plan (the "Plan"), adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, for the payment of certain
expenses incurred by Value Line Securities, Inc. (the "Distributor") a
wholly-owned subsidiary of Value Line, Inc., in advertising, marketing and
distributing the Fund's shares and for servicing the Fund's shareholders at an
annual rate of 0.25% of the Fund's average daily net assets. In the year ended
March 31, 1997, fees amounting to $168,321 were paid or payable under this Plan.
Certain officers and directors of the Adviser and the Distributor, are also
officers and a director of the Fund. During the year ended March 31, 1997, the
Fund paid brokerage commissions totalling $71,591 to the Distributor, a
registered broker/dealer, which clears its transactions through unaffiliated
brokers.
At March 31, 1997, the Adviser, and/or affiliated companies, and the Value Line,
Inc. Profit Sharing Plan, owned 3,263,349 shares of the Fund's capital stock,
representing 59.4% of the outstanding shares. In addition, certain officers and
directors of the Fund owned 305,614 shares of capital stock, representing 5.6%
of the outstanding shares.
6. Financial Instruments with Off-Balance Sheet Risk
During the year, the Fund sold stock index futures contracts to hedge its
portfolio positions against price fluctuations. Futures contracts involve
elements of credit and market risk in excess of the amounts reflected in the
Statement of Assets and Liabilities. The contract amounts of these futures
contracts reflect the extent of the Fund's exposure to off-balance sheet risk.
At March 31, 1997 the Fund held an open short position of 16 Russell 2000 index
contracts expiring June 1997 with a notional value of $2,759,200.
The Fund purchases or sells futures contracts only on exchanges or a board of
trade. The exchange or board of trade acts as the counterparty to the Fund's
futures transactions; therefore, the Fund's credit risk is limited to the
failure of the exchange or board of trade. The Fund bears the market risk which
arises from any changes in security values.
- --------------------------------------------------------------------------------
15
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
Financial Highlights
- -------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
AUGUST 24,
1993
(COMMENCEMENT
OF
OPERATIONS)
YEARS ENDED MARCH 31, TO
------------------------------------ MARCH 31,
1997 1996 1995 1994
-------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 14.13 $ 11.58 $ 10.37 $ 10.00
-------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............. .30 .10 .08 .06(1)
Net gains or losses on securities
(both realized and
unrealized)..................... 2.15 3.86 1.30 .35
-------------------------------------------------
Total from investment opeations... 2.45 3.96 1.38 .41
-------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income......................... (.25) (.12) (.06) (.04)
Distributions from realized
capital gains.................. (2.69) (1.29) (.11) --
-------------------------------------------------
Total distributions............... (2.94) (1.41) (.17) (.04)
-------------------------------------------------
NET ASSET VALUE, END OF PERIOD.......... $13.64 $14.13 $11.58 $10.37
-------------------------------------------------
-------------------------------------------------
TOTAL RETURN............................ 17.49% 35.13% 13.47% 4.15%+
-------------------------------------------------
-------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets end of period (in
thousands)............................ $74,981 $55,803 $26,172 $18,989
Ratio of operating expenses
to average net assets................. 1.23%(2) 1.38%(2) 1.76% 0.47%*(1)
Ratio of net investment income
to average net assets................. 1.95% .99% .85% 1.10%*(1)
Portfolio turnover rate................. 192% 244% 211% 108%+
Average commissions paid per share of
common stock investments
purchased/sold........................ $ .0492(3) -- -- --
</TABLE>
(1)NET OF EXPENSE REIMBURSEMENT AND FEES WAIVED BY THE ADVISER. HAD THESE
EXPENSES BEEN FULLY PAID BY THE FUND, NET INVESTMENT LOSS PER SHARE WOULD
HAVE BEEN $(.02), THE RATIO OF EXPENSES TO AVERAGE NET ASSETS WOULD HAVE BEEN
2.24%*, AND THE RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS WOULD HAVE
BEEN (0.67%)*.
(2)BEFORE CUSTODY CREDITS.
(3)DISCLOSURE EFFECTIVE FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1,
1995.
+ NOT ANNUALIZED.
* ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
16
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors
of Value Line Asset Allocation Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Value Line Asset Allocation Fund,
Inc. (the "Fund") at March 31, 1997, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the three years in
the period then ended and for the period August 24, 1993 (commencement of
operations) through March 31, 1994, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at March 31, 1997 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
May 14, 1997
- --------------------------------------------------------------------------------
17
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
- --------------------------------------------------------------------------------
This page left intentionally blank.
- --------------------------------------------------------------------------------
18
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
- --------------------------------------------------------------------------------
This page left intentionally blank.
- --------------------------------------------------------------------------------
19
<PAGE>
VALUE LINE ASSET ALLOCATION FUND, INC.
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 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.
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.
1992 -- VALUE LINE INTERMEDIATE BOND FUND seeks high current income consistent
with low volatility of principal by investing primarily in a diversified
portfolio of investment-grade debt 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.
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 THE 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. READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR
SEND MONEY.
- --------------------------------------------------------------------------------
20
