----------------
ANNUAL REPORT
----------------
March 31, 2000
----------------
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
================================================================================
To Our Shareholders:
The Value Line Asset Allocation Fund completed another excellent fiscal year.
For the 12 months ending March 31, 2000, the Fund gained 25.02%, which compared
with a total return of 17.94% for the unmanaged Standard & Poor's 500 Index and
a total return of 1.70% for the unmanaged Lehman Government/Corporate Bond
Index.
This achievement continues your Fund's consistent track record of superior
results. Since inception in August 1993, the Fund has finished in the top
one-third of its "flexible funds" category in every year, according to Lipper
Analytical Services.
Our success is attributable to a strategy of investing in companies with strong
operating momentum, whose stocks are showing strong price momentum. When the
momentum fails on either measure, we will usually sell the stock. In the latest
fiscal year, technology sector stocks best fit our buy criteria, and they proved
to be the top contributors to your Fund's performance. These include holdings in
a number of different subsectors, such as computer software, wireless
communications, semiconductors, and the internet. Many of these stocks can be
quite volatile, and we don't make big bets on any single issue, but their great
growth potential has been worth their higher-than-average risk. Still, we
maintain a diversified portfolio, with about 300 stocks in many different
industries. Stockholdings in the portfolio are about evenly divided between
large-capitalization stocks and those considered to be mid- or small-cap stocks.
At the close of the fiscal year, our asset allocation target was 60% stocks, 30%
bonds, and 10% cash. During much of the 12-month period, the Fund was only 35%
to 40% invested in stocks. Our proprietary allocation models favored bonds over
stocks after last year's rise in long-term interest rates and rise in stock
prices. In January and February, however, as both long-term interest rates and
stock prices fell, our model suggested putting money back to work in the stock
market. The current allocation target represents essentially a neutral view of
the financial markets. As for the Fund's bondholdings, they are confined to
high-quality issues, primarily U.S. Treasuries and agencies, with an average
maturity at this time of about seven years.
We will strive to continue your Fund's record of success. Thank you for
investing with us.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
April 15, 2000
- --------------------------------------------------------------------------------
2
<PAGE>
Value Line Asset Allocation Fund, Inc.
Allocation Fund Shareholders
================================================================================
Economic Observations
The American economy continues to perform well as we proceed through the second
quarter of 2000. Evidence of this healthy level of business activity can be
found in the strong pace of manufacturing, continued healthy gains in personal
income, and high levels of employment. Overall, we estimate that GDP growth will
approach 4% in the second quarter and average that level, or slightly better,
for the year as a whole. That would make 2000 the tenth year in a row of
sustained economic growth in this country.
Inflationary pressures, meanwhile, continue to be held in check for the most
part, with strong increases in productivity and ongoing technological
innovations being at least partially responsible for this comparative pricing
stability. Nevertheless, an increase in cost pressures could still evolve over
the next several quarters, particularly if the expected late-2000 moderation in
GDP growth does not evolve. The Federal Reserve, taking note of this potential
for higher prices, is likely to chart a fairly restrictive monetary course in
the months ahead. As such, we now expect the lead bank to vote two additional
modest interest rate increases over the course of the current year.
- --------------------------------------------------------------------------------
3
<PAGE>
Value Line Asset Allocation Fund, Inc.
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN
VALUE LINE ASSET ALLOCATION FUND, INC., LEHMAN BROTHERS
GOVERNMENT/CORPORATE BOND INDEX AND THE S&P 500 INDEX
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Value Line Lehman Brothers Govt/
Asset Allocation Fund, Inc. S&P 500 Index Corp Bond
--------------------------- ------------- ---------------------
8/24/93 $10,000 $10,000 $10,000
9/30/93 $10,480 $10,051 $10,080
12/31/93 $10,596 $10,284 $10,051
3/31/94 $10,415 $9,897 $9,737
6/30/94 $10,275 $9,939 $9,615
9/30/94 $10,898 $10,425 $9,663
12/31/94 $10,961 $10,423 $9,669
3/31/95 $11,818 $11,435 $10,182
6/30/95 $12,757 $12,523 $10,843
9/30/95 $14,104 $13,515 $11,050
12/31/95 $14,919 $14,326 $11,565
3/31/96 $15,970 $15,094 $11,294
6/30/96 $17,383 $15,770 $11,347
9/30/96 $18,231 $16,254 $11,547
12/31/96 $18,888 $17,607 $11,901
3/31/97 $18,764 $18,082 $11,798
6/30/97 $20,635 $21,239 $12,231
9/30/97 $22,836 $22,831 $12,638
12/31/97 $22,852 $23,487 $13,010
3/31/98 $25,774 $26,763 $13,212
6/30/98 $26,470 $27,647 $13,558
9/30/98 $23,074 $24,896 $14,229
12/31/98 $28,748 $30,198 $14,248
3/31/99 $28,908 $31,703 $14,077
6/30/99 $30,917 $33,937 $13,922
9/30/99 $31,077 $31,818 $13,998
12/31/99 $34,463 $36,552 $13,941
3/31/00 $36,142 $37,391 $14,316
From 8/24/93 to 3/31/00
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.
Performance Data:*
Average
Annual Total
Return
------------
1 year ended 3/31/00 ....................... 25.02%
5 years ended 3/31/00 ...................... 25.05%
From 8/24/93 (commencement
of operations) to 3/31/00 ................ 21.49%
* 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
value of an investment will fluctuate so that an investment, when redeemed,
may be worth more or less than its original cost.
- --------------------------------------------------------------------------------
4
<PAGE>
Value Line Asset Allocation Fund, Inc.
Schedule of Investments March 31, 2000
================================================================================
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (67.0%)
ADVERTISING (0.6%)
4,000 ADVO, Inc.*.......................... $ 100,000
2,000 Getty Images, Inc.*.................. 71,875
11,400 Omnicom Group, Inc................... 1,065,187
8,000 TMP Worldwide Inc.*.................. 622,000
----------
1,859,062
AEROSPACE/DEFENSE
(0.2%)
12,500 General Dynamics Corp................ 621,875
BANK (0.2%)
7,000 State Street Corp.................... 678,125
BANK--MIDWEST (0.5%)
11,000 Fifth Third Bancorp.................. 693,000
13,000 Northern Trust Corp.................. 878,312
----------
1,571,312
BEVERAGE--
ALCOHOLIC (0.2%)
12,000 Canandaigua Brands, Inc.
Class "A"*........................ 612,000
2,000 Coors (Adolph) Co. Class "B"......... 95,625
----------
707,625
BUILDING MATERIALS
(0.5%)
12,000 Elcor Corp........................... 414,000
25,000 Insituform Technologies, Inc.
Class "A"*........................ 765,625
7,000 USG Corp............................. 293,562
----------
1,473,187
CABLE TV (1.2%)
13,355 Adelphia Communications
Corp. Class "A"*.................. 654,395
10,000 Cablevision Systems Corp.
Class "A"*........................ 607,500
27,200 EchoStar Communications
Corp. Class "A"*.................. 2,148,800
2,000 Pegasus Communications
Corp. Class "A"*.................. 281,500
----------
3,692,195
COMPUTER &
PERIPHERALS (4.9%)
5,000 Apple Computer, Inc.*................ 679,062
39,000 Blue Wave Systems, Inc.*............. 624,000
13,000 Brooktrout, Inc.*.................... 377,000
20,000 Cabletron Systems, Inc.*............. 586,250
49,324 Cisco Systems, Inc.*................. 3,813,362
27,000 Cybex Computer Products
Corp.*............................ 1,015,875
5,500 EMC Corp.*........................... 687,500
8,000 Hewlett-Packard Co.*................. 1,060,500
17,000 In-Focus Systems, Inc.*.............. 608,813
4,000 M-Systems Flash Disk
Pioneers Ltd.*.................... 212,000
15,000 Mercury Computer
Systems, Inc.*.................... 733,125
10,000 Network Appliance, Inc.*............. 827,500
9,000 Network Peripherals Inc.*............ 319,500
40,000 Pinnacle Systems, Inc.*.............. 1,330,000
8,000 SanDisk Corp.*....................... 980,000
7,000 Silicon Storage
Technology, Inc.*................. 517,125
7,500 TIBCO Software, Inc.*................ 611,250
6,000 Zebra Technologies Corp.
Class "A"*........................ 300,000
----------
15,282,862
COMPUTER SOFTWARE
& SERVICES (9.9%)
28,000 Actuate Corp.*....................... 1,506,750
14,000 Adobe Systems, Inc................... 1,558,375
12,000 Advent Software, Inc.*............... 550,500
8,000 Apex, Inc.*.......................... 297,000
12,000 Aspect Development, Inc.*............ 772,500
14,000 Aspen Technology, Inc.*.............. 565,250
- --------------------------------------------------------------------------------
5
<PAGE>
Value Line Asset Allocation Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (9.9%) - Continued
5,000 BroadVision, Inc.*................... $ 224,375
6,000 Business Objects S.A.
(ADR)*............................ 597,000
10,000 CACI International, Inc.
Class "A"*........................ 299,375
19,200 Citrix Systems, Inc.*................ 1,272,000
5,500 Clarus Corporation*.................. 388,437
6,000 ClickAction Inc.*.................... 297,750
12,000 Cognizant Technology
Solutions Corp. Class "A"*........ 750,000
8,000 Cognos Inc.*......................... 500,500
8,000 Comverse Technology, Inc.*........... 1,512,000
9,000 Documentum, Inc.*.................... 702,000
12,000 Electronics For
Imaging Inc.*..................... 720,000
10,000 FactSet Research
Systems, Inc...................... 270,625
20,000 4 Front Technologies, Inc.*.......... 415,000
3,000 Inktomi Corp.*....................... 585,000
10,000 IONA Technologies PLC
(ADR)*............................ 740,000
11,000 Manugistics Group, Inc.*............. 552,750
17,000 MapInfo Corp.*....................... 663,000
41,000 Mercury Interactive Corp.*........... 3,249,250
13,000 Microsoft Corp.*..................... 1,381,250
4,000 MicroStrategy Inc.
Class "A"*........................ 348,250
22,500 Paychex, Inc......................... 1,178,438
40,000 Peregrine Systems, Inc.*............. 2,682,500
8,000 RSA Security Inc.*................... 414,500
30,000 S3 Incorporated*..................... 630,000
14,000 Siebel Systems, Inc.*................ 1,672,125
21,000 SunGard Data Systems Inc.*........... 792,750
20,000 Sybase, Inc.*........................ 406,250
9,000 Symantec Corp.*...................... 676,125
14,000 Technomatix Technologies
Ltd.*............................. 607,250
4,000 Veritas Software Corp.*.............. 524,000
36,000 Versant Corp.*....................... 483,750
----------
30,786,625
DIVERSIFIED
COMPANIES (0.6%)
8,000 Textron, Inc......................... 487,000
20,000 Tyco International Ltd............... 997,500
6,000 United Technologies Corp............. 379,125
----------
1,863,625
DRUG (3.7%)
2,000 Abgenix, Inc.*....................... 276,250
10,000 Andrx Corp.*......................... 1,155,000
26,000 AxyS Pharmaceuticals, Inc.*.......... 199,875
17,000 Biogen, Inc.*........................ 1,187,875
5,000 Biovail Corporation
International*.................... 221,563
33,000 Corvas International, Inc.*.......... 363,000
8,000 CuraGen Corp.*....................... 374,000
9,000 Forest Laboratories, Inc.*........... 760,500
3,000 ImClone Systems, Inc.*............... 230,625
6,000 Immunex Corp.*....................... 380,625
4,000 Inhale Therapeutic Systems*.......... 298,000
8,000 Invitrogen Corp.*.................... 464,500
13,000 MGI Pharma, Inc.*.................... 524,062
4,000 Medicis Pharmaceutical
Corp. Class "A"*.................. 160,000
5,000 MedImmune, Inc.*..................... 870,625
12,000 Millennium Pharmaceuticals,
Inc.*............................. 1,558,500
4,000 Pharmacopeia, Inc.*.................. 196,000
10,000 SciClone Pharmaceuticals,
Inc.*............................. 153,750
23,981 Shire Pharmaceuticals Group
PLC (ADR)*........................ 1,229,026
16,000 Titan Pharmaceuticals, Inc.*......... 498,000
9,000 Trimeris, Inc.*...................... 449,438
10,000 Valentis, Inc.*...................... 113,750
----------
11,664,964
- --------------------------------------------------------------------------------
6
<PAGE>
Value Line Asset Allocation Fund, Inc.
Schedule of Investments March 31, 2000
================================================================================
Shares Value
- --------------------------------------------------------------------------------
EDUCATIONAL
SERVICES (0.2%)
14,000 National Computer Systems,
Inc............................... $ 710,500
ELECTRIC UTILITY--
CENTRAL (0.3%)
10,000 AES Corp. (The)*..................... 787,500
ELECTRIC UTILITY--
WEST (0.5%)
16,000 Calpine Corp.*....................... 1,504,000
ELECTRICAL
EQUIPMENT (2.4%)
3,000 C&D Technologies, Inc................ 177,000
20,000 Cable Design Technologies
Corp.*............................ 678,750
3,000 Corning Inc.......................... 582,000
15,000 GaSonics International
Corp.*............................ 594,844
15,000 General Electric Co.................. 2,327,812
7,000 Kopin Corp.*......................... 481,250
34,000 Power Integrations, Inc.*............ 850,000
30,000 Semtech Corp.*....................... 1.921,875
----------
7,613,531
ELECTRONICS (4.5%)
8,000 Adaptive Broadband Corp.*............ 428,000
4,500 Alpha Industries, Inc.*.............. 427,500
16,000 CTS Corp............................. 912,000
7,000 DII Group, Inc.*..................... 791,438
7,000 Exar Corp.*.......................... 500,937
20,000 Gemstar International Group
Ltd.*............................. 1,720,000
29,696 JDS Uniphase Corp.*.................. 3,580,224
11,000 KEMET Corp.*......................... 695,750
5,000 Nu Horizons Electronics
Corp.*............................ 110,625
11,000 Plexus Corp.*........................ 732,875
3,000 Sawtek Inc.*......................... 157,688
18,200 Symbol Technologies, Inc............. 1,498,087
19,000 Titan Corp.*......................... 969,000
8,000 Valence Technology, Inc.*............ 188,500
15,000 Varian Medical Systems,
Inc.*............................. 684,375
10,000 Vishay Intertechnology, Inc.*........ 556,250
----------
13,953,249
ENTERTAINMENT (1.7%)
7,544 AMFM Inc.*........................... 468,671
10,000 CBS Corp.*........................... 566,250
11,143 Clear Channel
Communications, Inc.*............. 769,563
8,200 Cox Radio, Inc. Class "A"*........... 688,800
10,400 Time Warner, Inc..................... 1,040,000
24,000 USA Networks, Inc.*.................. 541,500
10,000 Univision Communications,
Inc. Class "A"*................... 1,130,000
----------
5,204,784
FINANCIAL SERVICES--
DIVERSIFIED (0.9%)
17,000 Administaff, Inc.*................... 667,250
7,000 American International
Group, Inc........................ 766,500
15,000 Citigroup, Inc....................... 889,687
13,000 Metris Companies Inc................. 505,375
----------
2,828,812
FOREIGN
TELECOMMUNICATIONS
(1.9%)
7,000 Ericsson (L.M.) Telephone
Co. (ADR)......................... 656,688
6,000 Nokia Corp. (ADR).................... 1,303,500
14,000 Nortel Networks Corp................. 1,764,000
13,000 SK Telecom Ltd. (ADR)*............... 507,000
16,000 Telefonos de Mexico S.A.de
CV (ADR) ......................... 1,072,000
13,250 Vodafone AirTouch PLC
(ADR)............................. 736,203
----------
6,039,391
- --------------------------------------------------------------------------------
7
<PAGE>
Value Line Asset Allocation Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
FURNITURE/HOME
FURNISHINGS (0.1%)
15,000 Ethan Allen Interiors, Inc........... $ 375,000
HEALTHCARE
INFORMATION
SYSTEMS (0.2%)
20,000 Hooper Holmes, Inc................... 686,250
HOUSEHOLD
PRODUCTS (0.5%)
37,500 Salton, Inc.*........................ 1,626,563
INDUSTRIAL SERVICES
(0.9%)
13,500 Profit Recovery Group
International, Inc. (The)*........ 249,750
6,000 Quanta Services, Inc.*............... 364,125
19,000 Robert Half International,
Inc.*............................. 901,312
10,000 Sabre Holdings Corp.
Class "A"*........................ 369,375
16,000 TeleTech Holdings, Inc.*............. 552,000
15,000 URS Corp.*........................... 196,875
----------
2,633,437
INTERNET (2.2%)
4,600 America Online, Inc.*................ 309,350
18,000 Exodus Communications,
Inc.*............................. 2,529,000
5,000 IntraNet Solutions, Inc.*............ 230,000
2,000 Juniper Networks Inc.*............... 527,125
19,000 Macromedia, Inc.*.................... 1,715,937
4,600 Network Solutions Inc.*.............. 707,034
6,000 Portal Software, Inc.*............... 341,625
5,000 S1 Corp.*............................ 428,438
----------
6,788,509
MACHINERY (0.1%)
4,000 Helix Technology Corp................ 240,250
MANUFACTURED
HOUSING/
RECREATIONAL
VEHICLES (0.2%)
33,750 Monaco Coach Corp.*.................. 641,250
MEDICAL SERVICES
(0.5%)
18,000 Advance Paradigm, Inc.*.............. 213,750
2,500 Affymetrix, Inc.*.................... 371,094
4,000 Myriad Genetics, Inc.*............... 241,000
11,000 Wellpoint Health Networks,
Inc.*............................. 768,625
----------
1,594,469
MEDICAL SUPPLIES
(2.2%)
23,000 Allergan, Inc........................ 1,150,000
14,000 Alpharma Inc. Class "A".............. 514,500
47,000 Aradigm Corp.*....................... 981,125
28,000 Bindley Western Industries,
Inc............................... 379,750
7,000 Johnson & Johnson.................... 490,437
25,334 Medtronic, Inc....................... 1,303,118
12,000 Patterson Dental Co.*................ 459,000
11,000 PolyMedica Corp.*.................... 646,250
3,500 ResMed Inc.*......................... 249,813
8,000 Techne Corp.*........................ 552,000
----------
6,725,993
METAL FABRICATING
(0.1%)
9,100 Shaw Group, Inc.*.................... 320,775
NATURAL GAS--
DIVERSIFIED (0.2%)
10,000 Enron Corp........................... 748,750
NEWSPAPER (0.1%)
10,000 Tribune Co........................... 365,625
- --------------------------------------------------------------------------------
8
<PAGE>
Value Line Asset Allocation Fund, Inc.
March 31, 2000
================================================================================
Shares Value
- --------------------------------------------------------------------------------
OFFICE EQUIPMENT &
SUPPLIES (0.3%)
11,000 Pitney Bowes, Inc.................... $ 491,563
28,500 Staples, Inc.*....................... 570,000
----------
1,061,563
OILFIELD SERVICES/
EQUIPMENT (0.2%)
9,000 Hanover Compressor Co.*.............. 511,875
PRECISION INSTRUMENT
(1.6%)
12,000 Cognex Corp.*........................ 692,250
5,000 LTX Corp.*........................... 225,937
5,000 Newport Corp......................... 675,000
15,000 Orbotech Ltd.*....................... 1,275,000
13,000 PerkinElmer, Inc..................... 864,500
12,000 Waters Corp.*........................ 1,143,000
----------
4,875,687
PUBLISHING (0.3%)
13,000 Reader's Digest Association,
Inc. Class "A" ................... 459,875
4,500 Reuters Group PLC (ADR).............. 537,188
----------
997,063
RECREATION (0.4%)
9,000 Harley-Davidson, Inc................. 714,375
18,000 Royal Caribbean Cruises Ltd.......... 504,000
----------
1,218,375
RESTAURANT (0.8%)
24,000 Brinker International, Inc.*......... 712,500
13,000 Cheesecake Factory, Inc.
(The)*............................ 541,125
19,000 Darden Restaurants, Inc.............. 338,438
24,000 Jack In The Box, Inc.*............... 511,500
20,000 Ruby Tuesday, Inc.................... 350,000
----------
2,453,563
RETAIL--SPECIAL
LINES (4.0%)
18,640 Abercrombie & Fitch Co.
Class "A"*........................ 298,240
17,500 American Eagle Outfitters,
Inc. *............................ 663,906
12,000 Audiovox Corp. Class "A"*............ 523,500
19,000 Bed Bath & Beyond Inc.*.............. 748,125
62,000 Chico's FAS, Inc.*................... 1,051,094
14,000 Circuit City Stores, Inc.-
Circuit City Group ............... 852,250
16,500 Cost Plus, Inc.*..................... 557,906
14,000 Damark International, Inc.
Class "A"*........................ 533,750
10,500 Dollar Tree Stores, Inc.*............ 547,312
28,500 Fossil, Inc.*........................ 667,969
15,250 Gap, Inc. (The)...................... 759,641
15,750 Intimate Brands, Inc................. 645,750
16,000 Linens `N' Things, Inc.*............. 548,000
17,000 Michaels Stores, Inc.*............... 692,750
25,500 Quiksilver, Inc.*.................... 447,844
20,000 Ross Stores, Inc..................... 481,250
10,000 Tandy Corp........................... 507,500
12,000 Tiffany & Co......................... 1,003,500
9,000 ValueVision International,
Inc. Class "A"*................... 372,375
11,500 Zale Corp.*.......................... 542,656
----------
12,445,318
RETAIL BUILDING
SUPPLY (0.8%)
27,000 Home Depot, Inc. (The)............... 1,741,500
14,560 Lowe's Companies, Inc................ 849,940
----------
2,591,440
RETAIL STORE (1.6%)
15,000 Ames Department Stores, Inc.*.368,438
16,000 Costco Wholesale Corp.*.............. 841,000
8,500 Kohl's Corp.*........................ 871,250
9,200 Target Corp.......................... 687,700
42,000 Wal-Mart Stores, Inc................. 2,331,000
----------
5,099,388
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<PAGE>
Value Line Asset Allocation Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
SECURITIES
BROKERAGE (0.2%)
8,000 Morgan Stanley Dean
Witter & Co....................... $ 652,500
SEMICONDUCTOR
(7.6%)
5,000 ASM International N.V.*.............. 145,000
18,000 Atmel Corp.*......................... 929,250
8,000 ATMI, Inc.*.......................... 382,000
11,000 Amkor Technology, Inc.*.............. 583,688
8,000 Analog Devices, Inc.*................ 644,500
5,200 Applied Micro Circuits
Corp.*............................ 780,325
7,000 C-Cube Microsystems Inc.*............ 509,687
2,000 Credence Systems Corp.*.............. 250,250
14,000 Cypress Semiconductor
Corp.*............................ 690,375
15,000 Electroglas, Inc.*................... 513,750
3,000 IBIS Technology Corp.*............... 270,000
11,000 ICOS Vision Systems
Corporation N.V.*................. 368,500
12,000 International Rectifier
Corp.*............................ 457,500
15,000 Lam Research Corp.*.................. 675,938
10,000 Lattice Semiconductor
Corp.*............................ 676,875
20,000 Linear Technology Corp............... 1,100,000
10,000 Maxim Integrated Products,
Inc.*............................. 710,625
15,000 Nanometrics, Inc.*................... 731,250
10,000 National Semiconductor
Corp.*............................ 606,250
13,000 PMC-Sierra, Inc.*.................... 2,647,937
13,000 Pericom Semiconductor
Corp.*............................ 463,937
16,000 QLogic Corp*......................... 2,168,000
6,000 RF Micro Devices Inc.*............... 806,250
3,600 SDL, Inc.*........................... 766,350
23,000 TelCom Semiconductor,
Inc.*............................. 695,750
27,750 TranSwitch Corp.*.................... 2,667,469
24,000 TriQuint Semiconductor,
Inc.*............................. 1,764,000
6,500 Vitesse Semiconductor
Corp*............................. 625,625
----------
23,631,081
SEMICONDUCTOR--
CAPITAL
EQUIPMENT (0.4%)
9,000 Applied Materials, Inc.*............. 848,250
5,000 Electro Scientific Industries,
Inc.*............................. 290,000
----------
1,138,250
SHOE (0.1%)
6,000 Timberland Co. Class "A"*............ 306,000
TELECOMMUNICATIONS EQUIPMENT (3.8%)
15,000 ADC Telecommunications,
Inc.*............................. 808,125
10,000 Aspect Communictions Corp.*...370,625
10,000 Black Box Corp.*..................... 692,344
5,000 C-Cor.net Corp.*..................... 245,000
18,000 CommScope, Inc.*..................... 821,250
20,000 Glenayre Technologies Inc.*.......... 351,250
5,000 Harmonic, Inc.*...................... 416,250
16,000 InterVoice-Brite, Inc.*.............. 462,000
35,000 Oak Technology, Inc.*................ 673,750
30,000 Polycom, Inc.*....................... 2,375,625
6,000 Powerwave Technologies,
Inc.*............................. 750,000
6,000 QUALCOMM Incorporated*............... 895,875
27,000 SpectraSite Holdings, Inc.*.......... 764,437
15,000 Tekelec*............................. 556,875
10,000 Tellabs, Inc. *...................... 629,844
21,000 Westell Technologies, Inc.
Class "A"*........................ 669,375
8,000 Xeta Corp.*.......................... 364,000
----------
11,846,625
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10
<PAGE>
Value Line Asset Allocation Fund, Inc.
March 31, 2000
================================================================================
Shares Value
- --------------------------------------------------------------------------------
TELECOMMUNICATION
SERVICES (2.5%)
9,000 ADTRAN, Inc.*........................ $ 534,938
6,000 ALLTEL Corp.......................... 378,375
13,000 CoreComm Ltd.*....................... 572,000
8,000 Copper Mountain
Networks, Inc.*................... 655,500
8,000 Corsair Communications,
Inc.*............................. 153,000
35,100 DyCom Industries, Inc.*.............. 1,711,125
19,000 Metromedia Fiber Network,
Inc. Class "A"*................... 1,837,062
5,000 Nextel Communications, Inc.
Class "A"*........................ 741,250
8,000 Performance Technologies,
Inc.*............................. 347,500
8,000 Puma Technology, Inc.*............... 405,000
10,000 Viatel, Inc.......................... 501,875
-----------
7,837,625
TOILETRIES/
COSMETICS (0.1%)
9,000 Estee Lauder Companies, Inc.
(The) Class "A" .................. 450,563
TRUCKING/
TRANSPORTATION
LEASING (0.0%)
2,000 Celadon Group, Inc.*................. 51,750
-----------
TOTAL
COMMON STOCKS
(Cost $137,479,372) ................. 208,758,761
-----------
U.S. TREASURY OBLIGATIONS (10.8%)
$4,000,000 United States
Treasury Notes
5.250%, 5/31/01............... 3,946,438
4,000,000 United States
Treasury Notes
5.750%, 6/30/01............... 3,966,170
2,000,000 United States
Treasury Notes
6.25%, 8/31/02................ 1,989,308
9,000,000 United States
Treasury Notes
6.500%, 10/15/06.............. 9,079,666
5,142,900 United States Inflation
Indexed Treasury Notes
3.875%, 1/15/09 .............. 5,092,200
8,500,000 United States
Treasury Bonds
7.250%, 8/15/22**............. 9,610,637
----------
TOTAL U.S. TREASURY
OBLIGATIONS
(Cost $33,787,056) .............. 33,684,419
----------
U.S. GOVERNMENT AGENCY
OBLIGATIONS (18.8%)
7,000,000 Federal National Mortgage
Association Notes
6.250%, 11/15/02.............. 6,866,062
4,000,000 Federal Home Loan
Mortgage Corp.
Debentures 7%, 2/15/03 ....... 3,990,656
8,000,000 Federal Home Loan
Mortgage Corp.
Debentures 5%, 1/15/04 ....... 7,447,712
8,000,000 Federal National Mortgage
Association Notes
5.625%, 5/14/04 .............. 7,584,256
4,000,000 Federal Home Loan
Mortgage Corp.
Debentures 6.25%,
7/15/04 ...................... 3,875,836
- --------------------------------------------------------------------------------
11
<PAGE>
Value Line Asset Allocation Fund, Inc.
Schedule of Investments March 31, 2000
================================================================================
Shares Value
- --------------------------------------------------------------------------------
$7,000,000 Federal Home Loan
Mortgage Corp.
Debentures 6.875%,
1/15/05 ...................... $6,938,085
5,000,000 International Bank for
Reconstruction and
Development Notes 7%,
1/27/05 ...................... 5,035,411
3,000,000 Federal National Mortgage
Association Notes
5.75%, 6/15/05 ............... 2,828,079
5,000,000 Federal National Mortgage
Association Notes
7.125%, 3/15/07 .............. 4,995,635
2,000,000 Federal National Mortgage
Association Notes
5.250%, 1/15/09 .............. 1,746,444
7,500,000 Federal National Mortgage
Association Notes
6.625%, 9/15/09 .............. 7,212,637
------------
TOTAL U.S.
GOVERNMENT AGENCY OBLIGATIONS
(Cost $60,014,173) .............. 58,520,813
------------
CORPORATE BONDS & NOTES (0.6%)
TELECOMMUNICATION
SERVICES (0.6%)
1,000,000 AirTouch Communications,
Inc. Notes 6.650%,
5/1/08........................ 939,732
1,000,000 MCI WorldCom, Inc.Senior
Notes 6.400%, 8/15/05......... 957,558
------------
TOTAL CORPORATE
BONDS & NOTES
(Cost $1,998,444) ............... 1,897,290
------------
TOTAL INVESTMENT
SECURITIES (97.2%)
(Cost $233,279,045) ............. 302,861,283
------------
SHORT-TERM INVESTMENTS (3.5%)
U.S. TREASURY
OBLIGATION (1.6%)
$5,000,000 United States Treasury
Notes 4%, 10/31/00............ 4,932,785
REPURCHASE
AGREEMENT (1.9%)
(including accrued interest)
6,000,000 Collateralized by $4,560,000
U.S. Treasury Bonds 9.125%,
due 5/15/18, with a value
of $6,130,208, (with
Morgan Stanley & Co.,
Inc. 6.02%, dated 3/31/00,
due 4/3/00, delivery
value $6,003,010) ............ 6,001,003
------------
TOTAL SHORT-TERM
INVESTMENTS
(Cost $10,966,847) .............. 10,933,788
------------
LIABILITIES IN EXCESS OF CASH
AND RECEIVABLES (-0.7%) .......................... (2,080,233)
------------
NET ASSETS (100%) ................................ 311,714,838
------------
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
OUTSTANDING SHARE
($311,714,838 / 14,931,247
shares outstanding) .............................. 20.88
------------
* Non-income producing (ADR) American Depositary Receipts
** A portion of this security is segregated to cover initial margin
requirements on the following open short financial futures contracts:
Number of Unrealized Contract
Contracts Gain (Loss) Value
- --------------------------------------------------------------------------------
Russell 2000
Index June/00 26 $ 749,450 $7,089,550
S&P 500
Index June/00 17 (320,825) 6,440,025
S&P MidCap 400
Index June/00 17 (170,425) 4,295,475
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12
<PAGE>
Statement of Assets and Liabilities
at March 31, 2000
================================================================================
Assets:
Investment securities, at value
(Cost--$233,279,045)........................... $302,861,283
Short term investments
(Cost--$10,966,847)............................ 10,933,788
Cash ........................................... 83,606
Receivable for capital shares sold ............. 1,652,389
Dividends and interest receivable .............. 1,492,724
Receivable for securities sold ................. 511,014
------------
Total Assets ............................. 317,534,804
------------
Liabilities:
Payable for securities purchased ............... 5,036,373
Variation margin on futures contracts .......... 363,675
Payable for capital shares repurchased ......... 98,333
Accrued expenses:
Advisory fee payable ......................... 174,523
Service and distribution plan
fees payable ............................... 66,833
Other ........................................ 80,229
------------
Total Liabilities ........................ 5,819,966
------------
Net Assets ..................................... $ 311,714,838
============
Net Assets consist of:
Capital stock, at $.001 par value
(authorized 300,000,000,
outstanding 14,931,247 shares) ............... $ 14,932
Additional paid-in capital ..................... 233,784,327
Undistributed net investment income ............ 2,031,001
Undistributed net realized gain
on investments ............................... 6,077,199
Net unrealized appreciation
of investments ............................... 69,807,379
------------
Net Assets ..................................... $ 311,714,838
============
Net Asset Value, Offering and
Redemption Price, per
Outstanding Share
($311,714,838 / 14,931,247
shares outstanding) .......................... $ 20.88
============
Statement of Operations
for the year ended March 31, 2000
================================================================================
Investment Income:
Interest ......................................... $ 6,794,308
Dividend (net of foreign withholding
tax of $2,374) ................................. 328,282
------------
Total Income ............................... 7,122,590
------------
Expenses:
Advisory fee ..................................... 1,571,675
Service and distribution plan fee ................ 604,490
Custodian fees ................................... 60,475
Transfer agent fees .............................. 46,754
Registration and filing fees ..................... 43,986
Auditing and legal fees .......................... 40,628
Accounting & bookkeeping expense ................. 32,400
Insurance, dues and other ........................ 30,903
Directors' fees and expenses ..................... 23,004
Printing ......................................... 20,768
------------
Total Expenses before
custody credits .......................... 2,475,083
Less: custody credits ...................... (6,954)
------------
Net Expenses ............................... 2,468,129
------------
Net Investment Income ............................ 4,654,461
------------
Net Realized and Unrealized Gain
on Investments:
Net Realized Gain (includes
$2,627,237 loss on futures
contracts) ................................. 19,644,832
Change in Net Unrealized
Appreciation ............................... 30,989,677
------------
Net Realized Gain and Change in
Net Unrealized Appreciation
on Investments ................................. 50,634,509
------------
Net Increase in Net Assets
from Operations ................................ $55,288,970
============
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
13
<PAGE>
Statement of Changes in Net Assets
for the years ended March 31, 2000 and 1999
================================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 2000 March 31, 1999
---------------------------------------
<S> <C> <C>
Operations:
Net investment income ........................................................ $ 4,654,461 $ 460,193
Net realized gain on investments ............................................. 19,644,832 2,393,060
Change in net unrealized appreciation ........................................ 30,989,677 15,396,207
--------------------------------------
Net increase in net assets from operations ................................... 55,288,970 18,249,460
--------------------------------------
Distributions to Shareholders:
Net investment income ........................................................ (3,082,826) (230,574)
Net realized gain from investment transactions ............................... (15,937,464) (2,460,642)
--------------------------------------
Total distributions .......................................................... (19,020,290) (2,691,216)
--------------------------------------
Capital Share Transactions:
Proceeds from sale of shares ................................................. 253,957,020 106,486,745
Proceeds from reinvestment of distributions to shareholders .................. 17,807,565 2,407,222
Cost of shares repurchased ................................................... (178,850,176) (65,408,668)
--------------------------------------
Net increase from capital share transactions ................................. 92,914,409 43,485,299
--------------------------------------
Total Increase in Net Assets ................................................... 129,183,089 59,043,543
Net Assets:
Beginning of year ............................................................ 182,531,749 123,488,206
--------------------------------------
End of year .................................................................. $ 311,714,838 $ 182,531,749
======================================
Net undistributed investment income, at end of year ............................ $ 2,031,001 $ 459,366
======================================
</TABLE>
See Notes to Financial Statements.
================================================================================
14
<PAGE>
Value Line Asset Allocation Fund, Inc.
Notes to Financial Statements March 31, 2000
- --------------------------------------------------------------------------------
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 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. Interest income is accrued
as earned. 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
- --------------------------------------------------------------------------------
(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, equal to the minimum "initial
margin" requirements of the applicable futures exchange. Pursuant to the
contract, the Fund agrees to receive from or pay to 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. Capital Share Transactions
Transactions in capital stock were as follows:
Year Ended Year Ended
March 31, March 31,
2000 1999
-----------------------------
Shares sold .............................. 12,960,862 6,501,091
Shares issued in
reinvestment of dividends
and distributions ...................... 928,929 149,517
-----------------------------
13,889,791 6,650,608
Shares repurchased ....................... 9,104,678 4,073,462
-----------------------------
Net increase ............................. 4,785,113 2,577,146
=============================
3. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, were as
follows:
Year Ended
March 31, 2000
--------------
PURCHASES:
U.S. Treasury and
U.S. Government Agency
Obligations .......................................... $120,760,980
Other Investment Securities ............................ 120,741,932
------------
$241,502,912
============
SALES:
U.S. Treasury and
U.S. Government Agency
Obligations .......................................... $ 54,355,217
Other Investment Securities ............................ 96,854,712
------------
$151,209,929
============
At March 31, 2000, the aggregate cost of investment securities and short-term
investments for federal income tax purposes was $244,252,978. The aggregate
appreciation and depreciation of investments at March 31, 2000, based on a
comparison of investment values and their costs for federal income tax purposes
was $82,562,798 and $13,020,705 respectively, resulting in a net appreciation of
$69,542,093.
- --------------------------------------------------------------------------------
16
<PAGE>
Value Line Asset Allocation Fund, Inc.
March 31, 2000
- --------------------------------------------------------------------------------
4. Advisory Fees, Service and Distribution Plan Fees and Transactions With
Affiliates:
An advisory fee of $1,571,675 was paid or payable to the Adviser for the year
ended March 31, 2000. The fee was computed at an 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.
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. For the year ended
March 31, 2000, fees amounting to $604,490 were paid or payable to the
Distributor under this Plan.
For the year ended March 31, 2000, the Fund's expenses were reduced by $6,954
under a custody credit arrangement with the Custodian.
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, 2000, the
Fund paid brokerage commissions totaling $50,377 to the Distributor, a
registered broker/dealer, which clears its transactions through unaffiliated
brokers.
At March 31, 2000, the Adviser, and/or affiliated companies, and the Value Line,
Inc. Profit Sharing and Savings Plan, owned 4,065,661 shares of the Fund's
capital stock, representing 27.2% of the outstanding shares. In addition,
certain officers and directors of the Fund owned 369,992 shares of capital
stock, representing 2.5% of the outstanding shares.
5. Financial Instrument with Off-Balance Sheet Risk
During the year ended March 31, 2000, 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, 2000 the Fund held an open short position of 26 Russell
2000 Index contracts, 17 S&P 500 Index contracts, and 17 S&P Mid-Cap 400 Index
contracts all expiring in June 2000, with a total notional value of $17,825,050.
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.
- --------------------------------------------------------------------------------
17
<PAGE>
Value Line Asset Allocation Fund, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Years Ended March 31,
--------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year .... $ 17.99 $ 16.32 $ 13.64 $ 14.13 $ 11.58
--------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ............... .33 .03 .22 .30 .10
Net gains on securities
(both realized and unrealized) .... 4.04 1.92 4.54 2.15 3.86
--------------------------------------------------------------------------------------
Total from investment operations .... 4.37 1.95 4.76 2.45 3.96
--------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (.24) (.02) (.26) (.25) (.12)
Distributions from realized gains ... (1.24) (.26) (1.82) (2.69) (1.29)
--------------------------------------------------------------------------------------
Total distributions ................. (1.48) (.28) (2.08) (2.94) (1.41)
--------------------------------------------------------------------------------------
Net asset value, end of year .......... $ 20.88 $ 17.99 $ 16.32 $ 13.64 $ 14.13
======================================================================================
Total return .......................... 25.02% 12.16% 37.36% 17.49% 35.13%
======================================================================================
Ratios/Supplemental Data:
Net assets, end of year (in thousands) $ 311,715 $ 182,532 $ 123,488 $ 74,981 $ 55,803
Ratio of operating expenses to
average net assets .................. 1.03%(2) 1.08%(1) 1.15%(1) 1.23%(1) 1.38%(1)
Ratio of net investment income to
average net assets .................. 1.93% 0.30% 1.46% 1.95% .99%
Portfolio turnover rate ............... 72% 129% 139% 192% 244%
</TABLE>
(1) Before offset of custody credits.
(2) Ratio reflects expenses grossed up for custody credit arrangement. The
ratio of expenses net of custody credits would have been 1.02%.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18
<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, 2000, 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 five years in the
period then ended, in conformity with accounting principles generally accepted
in the United States. 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 auditing standards generally accepted in
the United States, 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, 2000 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
May 1, 2000
- --------------------------------------------------------------------------------
Tax Information (unaudited)
For the taxable year ended March 31, 2000, 5.31% of the ordinary income
dividends paid by the Fund qualified for the corporate dividends received
deduction available to corporate shareholders.
- --------------------------------------------------------------------------------
The amount of long term capital gain paid by the Fund for the fiscal year ended
March 31, 2000 was $7,711,676.
- --------------------------------------------------------------------------------
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. Current income is a
secondary objective.
1952--Value Line Income Fund's primary investment objective is income, as high
and dependable as is consistent with reasonable risk. Capital growth to increase
total return is a secondary objective.
1956--Value Line Special Situations Fund seeks long-term growth of capital. No
consideration is given to current income in the choice of investments.
1972--Value Line Leveraged Growth Investors' sole investment objective is to
realize capital growth.
1979--The Value Line Cash Fund, a money market fund, seeks to secure as high a
level of current income as is consistent with maintaining liquidity and
preserving capital.
1981--Value Line U.S. Government Securities Fund seeks maximum income without
undue risk to capital. Under normal conditions, at least 80% of the value of its
net assets will be invested in securities issued or guaranteed by U.S.
Government and its agencies and instrumentalities.
1983--Value Line Centurion Fund* seeks long-term growth of capital.
1984--The Value Line Tax Exempt Fund seeks to provide investors with the 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 the National Bond 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.
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* seeks to achieve a high total
investment return consistent with reasonable risk.
1993--Value Line Emerging Opportunities 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 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 219729
Kansas City, MO 64121-9729
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
Alan N. Hoffman
Vice President
David T. Henigson
Vice President and
Secretary/Treasurer
Jack M. Houston
Assistant Secretary/Treasurer
Stephen La Rosa
Assistant Secretary/Treasurer
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).
#513283
