================================================================================
------------------
SEMI-ANNUAL REPORT
------------------
September 30, 1998
------------------
Value Line
Asset
Allocation
Fund, Inc.
[LOGO]
----------
VALUE LINE
No-Load
Mutual
Funds
<PAGE>
Value Line Asset Allocation Fund, Inc.
To Our Value Line Asset
================================================================================
Dear Shareholder:
The latest reporting period was the most difficult in the Fund's five-year
history. For the six months ended September 30, 1998, the Value Line Asset
Allocation Fund showed a loss of 10.48%. This compared to a loss of 6.97% in the
unmanaged Standard & Poor's 500 Index (including dividends) and a total return
of 7.70% for the unmanaged Lehman Government/Corporate Bond Index.
An overweighting in stocks hurt the Fund's returns. The allocation to stocks
during most of the period was about 75% of assets, compared to a neutral
benchmark of 55%. Only about 15%-20% of assets were invested in bonds, the
best-performing asset class in this time frame. We rely on Value Line's
proprietary stock and bond models to determine the Fund's asset allocation at
any point in time. These models use a number of different financial and economic
variables, such as stock and bond price levels, dividend yields, and Federal
Reserve activity. Over time, we believe your Fund will benefit from the models,
which remove human emotion from the decision process, but even the best models
will not always be right. In the last weeks of the six-month period, our stock
model became still more bullish, mainly due to lower stock prices and falling
interest rates. We moved the stock allocation target up to 85% of assets, and
reduced the bond target to 10%.
Also hurting returns in the period were our holdings of smaller-capitalization
stocks, which performed much worse than the large-caps. A widely used benchmark
of small-cap stocks, the unmanaged Russell 2000 Index, fell 23.87% (including
dividends) in the six months under review. (However, it is worth noting that
since September 30th, the Russell 2000 Index has rebound 7.54% and that for the
calendar year the Russell 2000 Index fell only 10.32%, including dividends.) The
Fund's stock selection is made from a universe of about 5,000 companies, of
which only a small minority are the large-cap stocks represented by the S&P 500
Index. About one-quarter of the Fund's stockholdings are in large-caps, with the
remainder split about evenly between small-caps and mid-caps. We believe
smaller-cap stocks will be superior performers in the years ahead, given their
strong earnings prospects and reduced valuations.
Your Fund's excellent long-term record is intact. Since inception August 24,
1993, the Fund ranks 4th out of 72 funds in the Flexible category, according to
Lipper Analytical Services. We will stick to the discipline that has served us
well, investing in issues with strong earnings and price momentum, and quickly
selling holdings that fail to meet these standards. Once this rocky period for
the stock market passes, we will be well prepared for the better times ahead.
Thank you for investing with us.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
November 17, 1998
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2
<PAGE>
Value Line Asset Allocation Fund, Inc.
Allocation Fund Shareholders
================================================================================
Economic Observations
Steady growth and low inflation continue to be two of the dominant themes in the
domestic economy as 1998 rapidly draws to a close. This is underscored by
reports that show relative stability in retailing, manufacturing, housing,
personal income, and employment. Such trends suggest that GDP growth, which has
generally moderated over the past six months, will average 2%, or perhaps a
shade more, during the next two to four quarters. At the same time, inflation
remains quiescent, with producer and consumer price increases still modest
overall and with key industrial sectors finding it difficult to implement price
increases.
At this point, though, we do not believe that this modest pace of economic
activity is the opening act in a serious domestic business downturn. Our sense
is that the global crisis still afflicting Asia, Russia, and parts of Latin
America will gradually recede over the next 12 to 18 months and that the
continuing subdued level of inflation in this country will encourage the Federal
Reserve Board to relax the credit reins again over the next several quarters.
Performance Data:*
Average
Annual Total
Return
------------
1 year ended 9/30/98 .............................................. 1.04%
5 years ended 9/30/98 ............................................. 17.10%
From 8/24/93 (commencement
of operations) to 9/30/98 ....................................... 17.81%
* The performance data quoted represent past performance and are no guarantee
of future performance. The average annual total returns include dividends
reinvested and capital gains distributions accepted in shares. The
investment return and principal value of an investment will fluctuate so
that an investment, when redeemed, may be worth more or less than its
original cost.
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3
<PAGE>
Value Line Asset Allocation Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (85.6%)
ADVERTISING (0.8%)
13,000 Big Flower Holdings, Inc.*.................. $ 303,875
4,000 Harte-Hanks Inc............................. 89,500
11,400 Omnicom Group, Inc.......................... 513,000
7,000 Snyder Communications,
Inc.*................................... 234,500
-----------
1,140,875
AEROSPACE/DEFENSE
(1.1%)
10,000 Cordant Technologies Inc.................... 423,125
15,500 Gulfstream Aerospace
Corp.*.................................. 623,875
5,500 Primex Technologies, Inc.................... 187,000
8,500 Special Devices, Inc.*...................... 277,312
-----------
1,511,312
AIR TRANSPORT (1.3%)
14,000 Comair Holdings, Inc........................ 402,500
18,000 Mesaba Holdings, Inc.*...................... 261,000
9,500 Midwest Express
Holdings, Inc.*......................... 318,250
18,000 Skywest, Inc................................ 344,250
27,000 Southwest Airlines Co....................... 540,000
-----------
1,866,000
APPAREL (1.3%)
10,320 Abercrombie & Fitch Co.
Class "A"*.............................. 454,080
31,000 Chico's FAS, Inc.*.......................... 499,875
17,000 Quiksilver, Inc.*........................... 309,188
22,000 Tarrant Apparel Group*...................... 533,500
-----------
1,796,643
AUTO PARTS--ORIGINAL
EQUIPMENT (0.3%)
11,000 Arvin Industries, Inc. ..................... 409,750
AUTO PARTS--
REPLACEMENT (0.5%)
3,000 Federal-Mogul Corp.......................... 140,250
12,000 O'Reilly Automotive, Inc.*.................. 435,000
6,000 Wynns International, Inc.................... 112,125
-----------
687,375
BANK (0.3%)
13,500 North Fork Bancorporation,
Inc..................................... 270,000
5,000 Zions Bancorporation........................ 204,062
-----------
474,062
BANK--MIDWEST (0.5%)
8,000 Fifth Third Bancorp......................... 460,000
4,000 Northern Trust Corp......................... 273,000
-----------
733,000
BEVERAGE--
ALCOHOLIC (0.4%)
11,000 Coors (Adolph) Co.
Class "B"............................... 505,313
BUILDING MATERIALS
(0.9%)
12,000 Genlyte Group Incorporated
(The)*.................................. 246,000
5,000 Granite Construction Inc.................... 147,188
25,000 Insituform Technologies, Inc.
Class "A"*.............................. 331,250
11,000 NCI Building Systems, Inc.*................. 217,937
13,500 Thomas Industries, Inc...................... 289,406
-----------
1,231,781
CABLE TV (0.7%)
15,000 Cablevision Systems Corp.
Class "A"*.............................. 647,813
17,000 Century Communications
Corp. Class "A"*........................ 405,875
-----------
1,053,688
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4
<PAGE>
Value Line Asset Allocation Fund, Inc.
September 30, 1998 (unaudited)
================================================================================
Shares Value
- --------------------------------------------------------------------------------
CEMENT &
AGGREGATES (0.2%)
10,000 Centex Construction
Products, Inc........................... $ 341,250
CHEMICAL--
SPECIALTY (0.4%)
19,000 NL Industries, Inc.......................... 368,125
14,400 Tredegar Industries, Inc.................... 263,700
-----------
631,825
COAL/ALTERNATE
ENERGY (0.3%)
10,000 AES Corp.*.................................. 370,625
COMPUTER &
PERIPHERALS (4.4%)
17,000 American Power
Conversion Corp.*....................... 640,688
17,000 Apple Computer, Inc.*....................... 648,125
19,000 Brooktrout Technology,
Inc.*................................... 258,281
14,500 Cisco Systems, Inc.*........................ 896,281
11,000 Dell Computer Corp.*........................ 723,250
10,000 EMC Corp.*.................................. 571,875
17,000 FORE Systems, Inc.*......................... 282,625
10,200 Ingram Micro Inc.
Class "A"*.............................. 546,337
10,000 Pinnacle Systems, Inc.*..................... 260,000
12,000 Sun Microsystems, Inc.*..................... 597,750
20,000 Unisys Corp.*............................... 455,000
20,000 Xircom, Inc.*............................... 490,000
-----------
6,370,212
COMPUTER SOFTWARE
& SERVICES (12.2%)
7,000 Advent Software, Inc.*...................... 239,313
17,000 American Management
Systems, Inc.*.......................... 465,375
11,000 Analytical Surveys, Inc.*................... 255,750
5,000 Apex PC Solutions, Inc.*.................... 98,125
24,000 Ardent Software, Inc.*...................... 300,000
11,000 Aspect Development, Inc.*................... 433,125
12,700 BMC Software, Inc.*......................... 762,794
12,000 CIBER, Inc.*................................ 242,250
6,800 Citrix Systems, Inc.*....................... 482,800
6,000 Computer Sciences Corp.*.................... 327,000
11,000 Compuware Corp.*............................ 647,625
7,000 Comverse Technology, Inc.*.................. 286,125
9,500 Documentum, Inc.*........................... 376,438
10,000 Edwards (J.D.) &
Company*................................ 480,000
5,000 Engineering Animation, Inc.*................ 238,750
9,000 FactSet Research
Systems, Inc.*.......................... 285,187
6,000 FileNet Corp.*.............................. 84,000
12,000 Henry (Jack) & Associates,
Inc..................................... 573,000
12,000 Information Management
Resources, Inc.*........................ 297,000
18,000 Intelligroup, Inc.*......................... 306,000
13,000 International Network
Services*............................... 539,500
9,700 Keane, Inc.*................................ 340,713
13,000 Learning Company,
Inc. (The)*............................. 257,562
12,600 Legato Systems, Inc.*....................... 647,325
19,000 MAPICS, Inc.*............................... 419,188
18,000 Mastech Corp.*.............................. 433,125
14,000 Mercury Interactive Corp.*.................. 555,625
16,000 Microsoft Corp.*............................ 1,761,000
17,500 New Dimension
Software, Ltd.*......................... 435,312
14,000 Paychex, Inc................................ 721,875
16,500 Peregrine Systems, Inc.*.................... 664,125
13,000 Platinum Software Corp.*.................... 133,250
7,000 PLANTINUM
technology, inc.*....................... 126,000
8,000 Policy Management
Systems Corp.*.......................... 324,000
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5
<PAGE>
Value Line Asset Allocation Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE
& SERVICES (continued)
20,000 Progress Software Corp.*.................... $ 517,500
17,000 Siebel Systems, Inc.*....................... 487,687
14,000 Systems & Computer
Technology Corp.*....................... 180,250
11,000 TSI International
Software Ltd.*.......................... 380,875
20,000 Timberline Software Corp.................... 380,000
14,000 USCS International, Inc.*................... 449,750
10,550 Veritas Software Corp.*..................... 582,887
-----------
17,518,206
DIVERSIFIED
COMPANIES (1.3%)
11,000 Danaher Corp................................ 330,000
4,500 Myers Industries, Inc....................... 103,500
12,000 Ogden Corp.................................. 341,250
5,500 Sequa Corp. Class "A"*...................... 309,719
10,000 Tyco International, Ltd..................... 552,500
8,000 Varlen Corp................................. 222,000
-----------
1,858,969
DRUG (3.6%)
10,500 Amgen Inc.*................................. 793,406
12,500 Biogen, Inc.*............................... 822,656
14,000 Forest Laboratories, Inc.*.................. 481,250
5,000 Medco Research, Inc.*....................... 108,438
6,500 MedImmune, Inc.*............................ 420,875
6,200 Pfizer, Inc................................. 656,813
20,000 Roberts Pharmaceutical
Corp.*.................................. 382,500
9,600 Schering-Plough Corp........................ 994,200
9,000 Watson Pharmaceuticals,
Inc.*................................... 456,750
-----------
5,116,888
EDUCATIONAL
SERVICES (0.5%)
13,000 Apollo Group, Inc.
Class "A"*.............................. 362,375
11,000 Education Management Corp.*................. 390,500
-----------
752,875
ELECTRIC UTILITY--
EAST (0.6%)
8,000 Energy East Corporation..................... 408,000
30,000 Northeast Utilities *....................... 502,500
-----------
910,500
ELECTRICAL
EQUIPMENT (2.2%)
14,000 C & D Technologies, Inc..................... 334,250
32,000 General Electric Co......................... 2,546,000
7,000 Kuhlman Corp................................ 227,062
-----------
3,107,312
ELECTRONICS (1.6%)
2,000 Gemstar International
Group Ltd.*............................. 92,750
12,000 Gilat Satellite Networks, Ltd.*............. 540,000
8,400 Lexmark International
Group, Inc. Class "A"*.................. 582,225
10,000 Recoton Corporation*........................ 195,000
12,800 Symbol Technologies, Inc.................... 656,800
9,000 Telxon Corp................................. 183,375
-----------
2,250,150
ENTERTAINMENT (1.7%)
12,544 Chancellor Media Corp.*..................... 418,656
9,200 Clear Channel
Communications, Inc.*................... 437,000
6,000 Jacor Communications, Inc.*................. 303,750
12,000 Sinclair Broadcast Group,
Inc. Class "A"*......................... 195,000
12,200 Time Warner Inc............................. 1,068,263
-----------
2,422,669
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6
<PAGE>
Value Line Asset Allocation Fund, Inc.
September 30, 1998 (unaudited)
================================================================================
Shares Value
- --------------------------------------------------------------------------------
ENVIRONMENTAL (0.5%)
11,000 Allied Waste Industries, Inc.*.............. $ 257,125
10,200 Waste Management, Inc....................... 490,237
-----------
747,362
FINANCIAL SERVICES (2.4%)
12,000 AmeriCredit Corp.*.......................... 292,500
22,000 Century Business
Services, Inc.*......................... 448,250
10,000 Concord EFS, Inc.*.......................... 258,125
21,000 Doral Financial Corp........................ 336,000
11,000 Financial Federal Corp.*.................... 241,312
13,000 HealthCare Financial
Partners, Inc.*......................... 546,000
9,456 Metris Companies, Inc....................... 440,886
8,200 Mutual Risk Management Ltd.................. 290,075
21,000 Resource America, Inc....................... 211,313
5,300 SEI Investments Company..................... 368,350
-----------
3,432,811
FOOD WHOLESALERS (0.3%)
11,000 U.S. Foodservice *.......................... 457,875
FOREIGN
TELECOMMUNICATIONS
(0.4%)
7,300 Nokia Corp. (ADR) Class "A"................. 572,594
FURNITURE/HOME
FURNISHINGS (1.8%)
14,000 Department 56, Inc.*........................ 378,000
12,500 Furniture Brands
International, Inc.*.................... 243,750
27,500 La-Z-Boy, Inc............................... 539,687
15,000 Mohawk Industries, Inc.*.................... 410,625
29,500 Shaw Industries, Inc.*...................... 479,375
14,000 Stanley Furniture Co., Inc.*................ 243,250
16,000 Winsloew Furniture, Inc.*................... 304,000
-----------
2,598,687
GROCERY (1.8%)
14,400 Albertson's, Inc............................ 779,400
13,000 Kroger Co.*................................. 650,000
11,000 Meyer (Fred), Inc.*......................... 427,625
15,600 Safeway Inc.*............................... 723,450
-----------
2,580,475
HEALTHCARE
INFORMATION
SYSTEMS (0.6%)
7,800 HBO & Co.................................... 225,225
11,500 IDX Systems Corp.*.......................... 609,500
-----------
834,725
HOME
APPLIANCE (0.7%)
13,000 Maytag Corp................................. 620,750
14,500 Rent-Way, Inc.*............................. 357,063
-----------
977,813
HOMEBUILDING (0.7%)
14,000 American Homestar
Corporation*............................ 308,000
10,000 Kaufman & Broad
Home Corp............................... 234,375
6,500 NVR, Inc.*.................................. 214,500
12,000 Ryland Group Inc............................ 292,500
-----------
1,049,375
HOUSEHOLD
PRODUCTS (0.9%)
7,500 Clorox Company (The)........................ 618,750
16,000 Renters Choice, Inc.*....................... 424,000
25,000 Salton/Maxim
Housewares, Inc.*....................... 284,375
-----------
1,327,125
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7
<PAGE>
Value Line Asset Allocation Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
INDUSTRIAL SERVICES (3.6%)
12,000 Equifax Inc................................. $ 428,250
10,000 F.Y.I., Inc.*............................... 245,000
18,000 Labor Ready, Inc.*.......................... 263,250
14,000 Market Facts, Inc.*......................... 388,500
7,000 Metamor Worldwide, Inc.*.................... 192,500
15,500 Metzler Group, Inc. (The)*.................. 530,875
20,000 National Computer
Systems, Inc............................ 590,000
11,000 On Assignment, Inc.*........................ 407,000
15,000 Profit Recovery Group
International, Inc. (The)*.............. 468,750
18,000 RCM Technologies, Inc.*..................... 265,500
8,600 Robert Half International, Inc.*............ 371,412
20,851 Romac International, Inc.*.................. 375,318
10,000 SABRE Group Holdings,
Inc. Class "A"*......................... 300,000
22,500 Western Staff Services, Inc.*............... 292,500
-----------
5,118,855
INSURANCE--
DIVERSIFIED (1.4%)
12,100 Fidelity National
Financial, Inc.......................... 409,131
15,000 First American Financial
Corporation (The)....................... 480,000
8,000 LandAmerica Financial
Group, Inc.............................. 410,000
8,000 Stewart Information
Services Corp........................... 461,000
11,000 Triad Guaranty Inc.*........................ 280,500
-----------
2,040,631
INSURANCE--LIFE (0.8%)
4,000 Life Re Corporation......................... 367,750
6,000 Reinsurance Group of
America, Inc............................ 353,625
8,000 SunAmerica Inc.............................. 488,000
-----------
1,209,375
INSURANCE--
PROPERTY/
CASUALTY (0.0%)
908 EXEL, Ltd................................... 57,204
INTERNET (0.0%)
2,000 IDT Corp.*.................................. 46,000
MACHINERY (1.3%) 10,400 Applied Power, Inc.
Class "A"............................... 284,050
12,000 Astec Industries, Inc.*..................... 511,500
17,000 Commercial Intertech Corp................... 313,438
10,500 Ingersoll-Rand Co........................... 398,344
21,000 JLG Industries, Inc......................... 334,687
-----------
1,842,019
MANUFACTURED
HOUSING/
RECREATIONAL
VEHICLES (0.5%)
15,000 Champion Enterprises,
Inc.*................................... 348,750
15,000 Monaco Coach Corp.*......................... 378,750
-----------
727,500
MEDICAL
SERVICES (1.7%)
21,000 Hanger Orthopedic
Group, Inc.*............................ 391,125
8,400 Lincare Holdings, Inc.*..................... 325,500
9,000 Omnicare, Inc............................... 317,250
21,000 Osteotech, Inc.*............................ 556,500
12,000 Renal Care Group Inc.*...................... 307,500
3,000 Res-Care, Inc.*............................. 56,250
27,000 Veterinary Centers of
America, Inc.*.......................... 492,750
-----------
2,446,875
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8
<PAGE>
Value Line Asset Allocation Fund, Inc.
September 30, 1998 (unaudited)
================================================================================
Shares Value
- --------------------------------------------------------------------------------
MEDICAL SUPPLIES (5.9%)
15,000 ADAC Laboratories*.......................... $ 360,000
20,000 Allegiance Corp............................. 595,000
10,500 Allergan, Inc............................... 612,938
9,200 Arterial Vascular
Engineering, Inc.*...................... 340,400
14,200 Becton, Dickinson & Co...................... 583,975
19,000 Bindley Western
Industries, Inc......................... 627,000
7,000 Cardinal Health, Inc........................ 722,750
12,000 Cooper Companies,
Inc. (The)*............................. 211,500
14,000 ICU Medical, Inc.*.......................... 197,750
10,200 McKesson Corp............................... 934,575
12,000 Physio-Control
International Corp.*.................... 330,000
11,000 ResMed, Inc.*............................... 572,000
12,500 Safeskin Corp.*............................. 394,531
9,000 Schein (Henry), Inc.*....................... 312,750
3,600 Sofamor Danek Group, Inc.*.................. 320,400
12,600 STERIS Corp.*............................... 355,950
9,000 VISX, Inc.*................................. 603,000
11,000 Xomed Surgical
Products, Inc.*......................... 452,375
-----------
8,526,894
METAL FABRICATING (0.2%)
2,000 SPS Technologies, Inc.*..................... 93,125
7,200 Trinity Industries, Inc..................... 233,550
-----------
326,675
OFFICE EQUIPMENT &
SUPPLIES (1.6%)
18,400 Day Runner Inc.*............................ 358,800
5,000 Office Depot Inc.*.......................... 112,188
11,000 Pitney Bowes, Inc........................... 578,187
23,000 Staples, Inc.*.............................. 675,625
25,000 United Stationers, Inc.*.................... 596,875
-----------
2,321,675
OILFIELD SERVICES/
EQUIPMENT (0.1%)
12,000 Core Laboratories N.V.*..................... 207,000
PACKAGING &
CONTAINER (0.1%)
21,000 Zapata Corp................................. 203,437
PAPER & FOREST
PRODUCTS (0.2%)
25,000 Mail-Well, Inc.*............................ 214,063
PRECISION
INSTRUMENT (1.8%)
15,000 Eastman Kodak Co............................ 1,159,687
11,500 Kronos Inc.*................................ 425,500
20,000 Optical Coating
Laboratory, Inc......................... 358,750
9,200 Waters Corp.*............................... 616,400
-----------
2,560,337
PUBLISHING (0.6%)
8,000 Consolidated Graphics,
Inc.*................................... 304,000
18,000 Hollinger International, Inc.
Class "A"............................... 258,750
9,000 Meredith Corp............................... 288,000
-----------
850,750
RAILROAD (0.3%)
27,000 Johnstown America
Industries, Inc.*....................... 384,750
RECREATION (1.3%)
18,000 Carnival Corp............................... 572,625
21,000 First Years Inc. (The)...................... 299,250
16,000 Harley-Davidson, Inc........................ 470,000
18,000 Royal Caribbean Cruises Ltd................. 478,125
-----------
1,820,000
- --------------------------------------------------------------------------------
9
<PAGE>
Value Line Asset Allocation Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
RESTAURANT (0.9%)
24,000 Brinker International, Inc.*................ $ 450,000
31,000 Buffets, Inc.*.............................. 335,188
3,000 CKE Restaurants, Inc........................ 89,250
15,000 Fresh Foods Inc.*........................... 142,500
28,000 Ryan's Family Steak
Houses, Inc.*........................... 334,250
-----------
1,351,188
RETAIL--
SPECIAL LINES (5.3%)
8,750 American Eagle Outfitters,
Inc. *.................................. 302,968
18,000 AnnTaylor Stores Corp.*..................... 365,625
23,000 Bed Bath & Beyond Inc.*..................... 537,625
14,000 Best Buy Co., Inc.*......................... 581,000
10,000 Blair Corp.................................. 298,750
8,000 Burlington Coat Factory
Warehouse Corp.......................... 118,000
31,000 CATO Corp. Class "A"........................ 360,375
10,500 Dollar Tree Stores, Inc.*................... 328,781
14,000 Fingerhut Companies, Inc.................... 154,000
19,000 Fossil, Inc.*............................... 258,875
7,000 Gap, Inc. (The)............................. 369,250
16,000 Goody's Family Clothing, Inc.*.............. 192,000
14,000 Linens `N' Things, Inc.*.................... 385,000
14,000 Men's Wearhouse,
Inc. (The)*............................. 241,500
11,000 Michaels Stores, Inc.*...................... 280,500
16,000 Micro Warehouse, Inc.*...................... 241,000
32,000 Musicland Stores Corp.*..................... 396,000
9,000 Ross Stores Inc............................. 257,625
21,000 TJX Companies, Inc.......................... 374,063
11,000 Talbots, Inc. (The)......................... 196,625
8,600 Tandy Corp.................................. 460,100
26,000 United Retail Group Inc.*................... 211,250
16,500 Williams-Sonoma, Inc.*...................... 351,656
11,500 Zale Corp.*................................. 294,688
-----------
7,557,256
RETAIL BUILDING
SUPPLY (1.1%)
19,000 Eagle Hardware &
Garden, Inc.*........................... 412,063
20,000 Home Depot, Inc. (The)...................... 790,000
12,400 Lowe's Companies, Inc....................... 394,475
-----------
1,596,538
RETAIL STORE (4.1%)
15,000 Ames Department
Stores, Inc.*........................... 190,313
13,000 Bon-Ton Stores, Inc.*....................... 97,500
11,000 Buckle Inc. (The)*.......................... 198,000
10,000 Costco Companies, Inc.*..................... 473,750
11,200 Dayton Hudson Corp.......................... 400,400
12,500 Dollar General Corp......................... 332,812
24,000 Family Dollar Stores, Inc................... 378,000
8,500 Federated Department
Stores, Inc.*........................... 309,187
27,000 Kmart Corp.*................................ 322,313
8,500 Kohl's Corp.*............................... 331,500
11,000 99 Cents Only Stores*....................... 435,187
7,000 Nordstrom Inc............................... 173,250
13,375 Pacific Sunwear of
California, Inc.*....................... 297,594
7,000 Saks Incoporated*........................... 157,063
10,500 ShopKo Stores, Inc.*........................ 341,250
22,500 Trans World Entertainment
Corp.*.................................. 410,625
18,000 Wal-Mart Stores, Inc........................ 983,250
-----------
5,831,994
SEMICONDUCTOR (0.9%)
10,500 QLogic Corp*................................ 685,125
18,000 TranSwitch Corp.*........................... 268,875
14,000 Vitesse Semiconductor
Corp.*.................................. 330,750
-----------
1,284,750
- --------------------------------------------------------------------------------
10
<PAGE>
Value Line Asset Allocation Fund, Inc.
September 30, 1998 (unaudited)
================================================================================
Shares Value
- --------------------------------------------------------------------------------
SHOE (0.3%)
15,000 Maxwell Shoe Company,
Inc. Class "A"*......................... $ 178,125
26,000 Shoe Carnival, Inc.*........................ 240,500
-----------
418,625
TELECOMMUNICATIONS
EQUIPMENT (1.0%)
4,700 AFC Cable Systems, Inc.*.................... 111,625
22,500 AVT Corporation*............................ 509,063
23,000 InterVoice, Inc.*........................... 527,562
21,000 Tekelec *................................... 320,250
-----------
1,468,500
TELECOMMUNICATION
SERVICES (1.8%)
11,300 AirTouch Communications,
Inc.*................................... 644,100
13,000 Century Telephone
Enterprises, Inc........................ 614,250
15,600 DyCom Industries, Inc.*..................... 485,550
23,000 GeoTel Communications
Corp.*.................................. 618,125
11,000 SkyTel Communications
Inc.*................................... 199,375
-----------
2,561,400
TEXTILE (0.3%)
15,000 WestPoint Stevens, Inc.*.................... 457,500
THRIFT (0.6%)
25,000 Dime Bancorp, Inc........................... 632,813
8,000 GreenPoint Financial Corp................... 255,000
-----------
887,813
TOILETRIES/
COSMETICS (0.3%)
19,000 Helen of Troy Ltd.*......................... 368,125
TRUCKING/
TRANSPORTATION
LEASING (0.4%)
13,000 M.S. Carriers, Inc.*........................ 258,375
14,500 MotivePower Industries, Inc.*............... 338,937
-----------
597,312
-----------
TOTAL
COMMON STOCKS
(Cost $118,066,143) ........................ 122,925,163
-----------
Principal
Amount
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS (4.8%)
$4,000,000 United States Treasury
Notes 6 1/2%, 5/31/02............... $ 4,281,080
2,000,000 United States Treasury
Bonds 7 1/4%, 8/15/22............... 2,555,520
-----------
TOTAL U.S. TREASURY
OBLIGATIONS
(Cost $6,144,219) ..................... 6,836,600
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS (5.6%)
2,000,000 Federal Home Loan Banks
Bonds 5 5/8%, 3/19/01............... 2,044,920
2,000,000 Federal Home Loan Mortgage
Corp. Debentures,
5 3/4%, 7/15/03 .................... 2,088,080
1,000,000 Federal National Mortgage
Association Notes,
5 3/4%, 6/15/05 .................... 1,052,670
1,600,000 Federal National Mortgage
Association Medium Term
Notes, 6 1/2%, 7/16/07.............. 1,775,888
1,000,000 Federal Home Loan Mortgage
Corp. Debentures,
5 3/4%, 4/15/08..................... 1,062,560
-----------
TOTAL U.S.
GOVERNMENT AGENCY
OBLIGATIONS
(Cost $7,636,282) ..................... 8,024,118
-----------
- --------------------------------------------------------------------------------
11
<PAGE>
Value Line Asset Allocation Fund, Inc.
Schedule of Investments September 30, 1998 (unaudited)
================================================================================
Principal Amount Value
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES (2.2%)
TELECOMMUNICATION
SERVICES (2.2%)
$1,000,000 AirTouch Communications,
Inc. Notes,
6.650%, 5/1/08...................... $ 1,079,830
1,000,000 MCI WorldCom, Inc.
Sr. Notes,
6.40%, 8/15/05...................... 1,055,290
1,000,000 U.S. West Capital Funding,
Inc., Gtd. Notes,
6 1/4%, 7/15/05..................... 1,043,380
------------
3,178,500
------------
TOTAL CORPORATE
BONDS & NOTES
(Cost $2,995,491) ..................... 3,178,500
------------
TOTAL INVESTMENT
SECURITIES (98.2%)
(Cost $134,842,135) ................... 140,964,381
------------
REPURCHASE AGREEMENT (2.5%)
(including accrued interest)
3,600,000 Collateralized by $2,830,000
U.S. Treasury Bonds
11 1/8%, due 8/15/03,
with a value of
$3,686,517, (with State
Street Bank & Trust
Company, 5.30%,
dated 9/30/98,
due 10/1/98, delivery
value $3,600,530)................... 3,600,530
------------
EXCESS OF LIABILITIES
OVER CASH AND
OTHER ASSETS (-0.7%) ....................................... (970,746)
------------
NET ASSETS (100%) .......................................... $143,594,165
============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER OUTSTANDING SHARE
($143,594,165 / 9,826,342
shares outstanding) ........................................ $ 14.61
============
* Non-income producing
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12
<PAGE>
Statement of Assets and Liabilities
at September 30, 1998 (unaudited)
================================================================================
Assets:
Investment securities, at value
(Cost--$134,842,135)..................................... $140,964,381
Repurchase agreement
(Cost--$3,600,530)....................................... 3,600,530
Cash ..................................................... 84,782
Receivable for securities sold ........................... 994,802
Dividends and interest receivable ........................ 298,618
Receivable for capital shares sold ....................... 149,822
------------
Total Assets ....................................... 146,092,935
------------
Liabilities:
Payable for securities purchased ......................... 2,117,353
Payable for capital shares repurchased ................... 243,277
Accrued expenses:
Advisory fee payable ................................... 74,874
Distribution plan fees payable ......................... 28,507
Other .................................................. 34,759
------------
Total Liabilities .................................. 2,498,770
------------
Net Assets ............................................... $143,594,165
------------
Net Assets consist of:
Capital stock, at $.001 par value
(authorized 300,000,000,
outstanding 9,826,342 shares)........................... $ 9,827
Additional paid-in capital ............................... 134,457,265
Undistributed net investment income ...................... 604,814
Undistributed net realized gain
on investments.......................................... 2,400,013
Net unrealized appreciation
of investments.......................................... 6,122,246
------------
Net Assets ............................................... $143,594,165
------------
Net Asset Value, Offering and
Redemption Price, per
Outstanding Share
($143,594,165 / 9,826,342
shares outstanding) .................................... $ 14.61
------------
Statement of Operations
for the six months ended September 30, 1998 (unaudited)
================================================================================
Investment Income:
Interest income .......................................... $ 992,168
Dividend income (net of foreign
withholding tax of $842)................................ 166,929
-----------
Total Income ....................................... 1,159,097
-----------
Expenses:
Advisory fee ............................................. 456,112
Service and distribution plan fee ........................ 175,428
Custodian fees ........................................... 41,074
Registration and filing fees ............................. 19,518
Transfer agent fees ...................................... 17,981
Auditing and legal fees .................................. 17,442
Accounting & bookkeeping expense ......................... 16,200
Printing ................................................. 15,620
Directors' fees and expenses ............................. 11,373
Insurance, dues and other ................................ 10,007
Amortization of deferred organization
costs (note 2).......................................... 5,238
-----------
Total Expenses Before
Custody Credits .................................. 785,993
Less: Custody Credits .............................. (1,963)
-----------
Net Expenses ....................................... 784,030
-----------
Net Investment Income .................................... 375,067
-----------
Net Realized and Unrealized Loss
on Investments:
Net Realized Loss .................................... (37,400)
Change in Net Unrealized
Appreciation (Depreciation)......................... (17,299,249)
-----------
Net Realized Loss and Change in
Net Unrealized Appreciation
(Depreciation) on Investments .......................... (17,336,649)
-----------
Net Decrease in Net Assets
from Operations ........................................ $(16,961,582)
-----------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
13
<PAGE>
Statement of Changes in Net Assets
for the six months ended September 30, 1998 (unaudited)
and for the year ended March 31, 1998
================================================================================
<TABLE>
<CAPTION>
Six Months Ended
September 30, 1998 Year Ended
(unaudited) March 31, 1998
---------------------------------------
<S> <C> <C>
Operations:
Net investment income .................................................... $ 375,067 $ 1,425,457
Net realized (loss) gain on investments .................................. (37,400) 10,804,109
Change in net unrealized (depreciation) appreciation ..................... (17,299,249) 18,714,947
---------------------------------------
Net (decrease) increase in net assets from operations .................... (16,961,582) 30,944,513
---------------------------------------
Distributions to Shareholders:
Net investment income .................................................... -- (1,575,920)
Net realized gain from investment transactions ........................... -- (11,263,524)
---------------------------------------
Total distributions ...................................................... -- (12,839,444)
---------------------------------------
Capital Share Transactions:
Proceeds from sale of shares ............................................. 66,496,922 36,166,180
Proceeds from reinvestment of distributions to shareholders .............. -- 11,956,210
Cost of shares repurchased ............................................... (29,429,381) (17,720,083)
---------------------------------------
Increase from capital share transactions ................................. 37,067,541 30,402,307
---------------------------------------
Total Increase ............................................................. 20,105,959 48,507,376
Net Assets:
Beginning of period ...................................................... 123,488,206 74,980,830
---------------------------------------
End of period ............................................................ $ 143,594,165 $ 123,488,206
=======================================
Net undistributed investment income, at end of period ...................... $ 604,814 $ 229,747
=======================================
</TABLE>
See Notes to Financial Statements.
================================================================================
14
<PAGE>
Value Line Asset Allocation Fund, Inc.
Notes to Financial Statements September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
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, applicable to regulated
investment companies, including the distribution requirements of the Tax Reform
Act of 1986, 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.
- --------------------------------------------------------------------------------
15
<PAGE>
Value Line Asset Allocation Fund, Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. Organization Costs
Costs of $66,040 incurred in connection with the Funds's organization and
initial registration have been deferred and are being amortized over sixty
months beginning at the commencement of operations of the Fund. At September 30,
1998, the organization costs were fully amortized.
3. Capital Share Transactions Transactions in capital stock were as follows:
Six Months Ended
Sept. 30, 1998 Year Ended
(unaudited) March 31, 1998
----------------------------------
Shares sold ................................ 4,123,922 2,368,020
Shares issued in
reinvestment of dividends
and distributions......................... -- 850,954
----------------------------------
4,123,922 3,218,974
Shares repurchased ......................... 1,866,568 1,148,119
----------------------------------
Net increase ............................... 2,257,354 2,070,855
==================================
4. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, were as
follows:
Six Months Ended
Sept. 30, 1998
(unaudited)
----------------
PURCHASES:
U.S. Treasury and U.S. Government
Obligations ........................................... $ 9,141,840
Other Investment Securities ............................. 107,518,486
------------
$116,660,326
============
SALES:
U.S. Treasury and U.S. Government
Obligations ........................................... $ 17,260,962
Other Investment Securities ............................. 59,765,744
------------
$ 77,026,706
============
At September 30, 1998, the aggregate cost of investment securities and
repurchase agreement for federal income tax purposes was $138,442,665. The
aggregate appreciation and depreciation of investments at September 30, 1998,
based on a comparison of investment values and their costs for federal income
tax purposes was $15,146,522 and $9,024,276 respectively, resulting in a net
appreciation of $6,122,246.
5. Advisory Fees, Service and Distribution Plan Fees and Transactions With
Affiliates
An advisory fee of $456,112 was paid or payable to the Adviser for the six
months ended September 30, 1998. The fee was computed at the rate of .65 of 1%
of the daily net assets during the period 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.
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 the Adviser, 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 six months
ended September 30, 1998, fees amounting to $175,428 were paid or payable under
this Plan.
- --------------------------------------------------------------------------------
16
<PAGE>
Value Line Asset Allocation Fund, Inc.
September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Certain officers and directors of the Adviser and the Distributor, are also
officers and a director of the Fund. During the six months ended September 30,
1998, the Fund paid brokerage commissions totalling $68,498 to the Distributor,
a registered broker/dealer, which clears its transactions through unaffiliated
brokers.
At September 30, 1998, the Adviser, and/or affiliated companies, and the Value
Line, Inc. Profit Sharing Plan, owned 3,808,409 shares of the Fund's capital
stock, representing 38.8% of the outstanding shares. In addition, certain
officers and directors of the Fund owned 350,225 shares of capital stock,
representing 3.6% of the outstanding shares.
- --------------------------------------------------------------------------------
17
<PAGE>
Value Line Asset Allocation Fund, Inc.
<TABLE>
Financial Highlights
- ------------------------------------------------------------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period:
<CAPTION>
August 24, 1993
Six Months (commencement of
Ended Years Ended March 31, operations) to
Sept. 30, 1998 ---------------------------------------------------------- March 31,
(Unaudited) 1998 1997 1996 1995 1994
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $16.32 $13.64 $14.13 $11.58 $10.37 $10.00
----------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income ...... .03 .22 .30 .10 .08 .06(1)
Net (losses) or gains on
securities (both realized
and unrealized) .......... (1.74) 4.54 2.15 3.86 1.30 .35
----------------------------------------------------------------------------------------------------
Total from investment
operations ............. (1.71) 4.76 2.45 3.96 1.38 .41
----------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income ........ -- (.26) (.25) (.12) (.06) (.04)
Distributions from capital
gains .................... -- (1.82) (2.69) (1.29) (.11) --
----------------------------------------------------------------------------------------------------
Total distributions ...... -- (2.08) (2.94) (1.41) (.17) (.04)
----------------------------------------------------------------------------------------------------
Net asset value, end of period $14.61 $16.32 $13.64 $14.13 $11.58 $10.37
====================================================================================================
Total return ................. -10.48%+ 37.36% 17.49% 35.13% 13.47% 4.15%+
====================================================================================================
Ratios/Supplemental Data:
Net assets end of period
(in thousands) ............. $143,594 $123,488 $74,981 $55,803 $26,172 $18,989
Ratio of operating expenses to
average net assets ......... 1.14%*(2) 1.15%(2) 1.23%(2) 1.38% 1.76% 0.47%*(1)
Ratio of net investment income
to average net assets ...... 0.54%* 1.46% 1.95% .99% .85% 1.10%*(1)
Portfolio turnover rate ...... 60%+ 139% 192% 244% 211% 108%
</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 offset of custody credits.
+ Not annualized.
* Annualized.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18
<PAGE>
Value Line Asset Allocation Fund, Inc.
- --------------------------------------------------------------------------------
This page intentionally left 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 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.
- --------------------------------------------------------------------------------
20
<PAGE>
INVESTMENT ADVISER Value Line, Inc.
220 East 42nd Street
New York, NY 10017-5891
DISTRIBUTOR Value Line Securities, Inc.
220 East 42nd Street
New York, NY 10017-5891
CUSTODIAN BANK State Street Bank and Trust Co.
225 Franklin Street
Boston, MA 02110
SHAREHOLDER State Street Bank and Trust Co.
SERVICING AGENT c/o NFDS
P.O. Box 419729
Kansas City, MO 64141-6729
INDEPENDENT PricewaterhouseCoopers LLP
ACCOUNTANTS 1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL Peter D. Lowenstein, Esq.
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830
DIRECTORS Jean Bernhard Buttner
Francis C. Oakley
Marion N. Ruth
Frances T. Newton
OFFICERS Jean Bernhard Buttner
Chairman and President
Stephen E. Grant
Vice President
Bruce H. Alston
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
Fund without examination by the independent accountants and, accordingly, they
do not express an opinion thereon.
This unaudited report is issued for information of shareholders. It is not
authorized for distribution to prospective investors unless preceded or
accompanied by a currently effective prospectus of the Fund (obtainable from the
Distributor).
