------------------
SEMI-ANNUAL REPORT
------------------
September 30, 1997
------------------
Value Line
U.S.
Multinational
Company
Fund, Inc.
[LOGO]
VALUE LINE
No Load
Mutual
Funds
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
To Our Value Line
================================================================================
To Our Shareholders:
We are pleased to report that the Value Line U.S. Multinational Company Fund
posted superior results in the first half of the fiscal year that will end in
March 1998. During this period, the Fund attained a total return (including
reinvested dividends) of 31.04%, beating the unmanaged Standard & Poor's 500
Index, with a total return of 26.27%, by almost five percentage points.
The operating environment for U.S. multinational companies has been mixed over
the half year since March 31, 1997. The multinationals generally were market
leaders during the late spring and early summer, in line with the performance
they have generated for the last several years. In July and August, the tide
turned for some of these companies (especially in the consumer-products area),
as currency devaluations in Southeast Asia produced negative accounting effects,
which reduced earnings marginally. In a few cases--Coca-Cola is a prominent
example--actual volumes declined in some overseas jurisdictions. On the other
hand, many stocks in the technology and energy related areas and elsewhere
remained stellar performers throughout the period.
As this letter is going to press, stock markets worldwide are reacting to the
broad selloff on the Hong Kong Stock Exchange, and on other exchanges throughout
parts of Asia. We don't know how this drama will eventually play out, but we
remain convinced that a portfolio of multinational stocks, with diversified
exposure to a number of economies around the globe, should continue to produce
superior returns over the long term. And selecting those securities according to
the principles of the Value Line Timeliness Ranking System--with its 32-year
record of identifying stocks with greater appreciation potential--ought to
improve the U.S. Multinational Company Fund's long-term return substantially.
We appreciate your confidence in Value Line, and we intend to continue to offer
high-quality vehicles for growth investing.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
November 5, 1997
- --------------------------------------------------------------------------------
2
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
U.S. Multinational Company Fund Shareholders
================================================================================
Economic Observations
In contrast to many parts of the world, the basic underpinnings of the U.S.
economy appear to be quite sound as we wend our way through the latter stages of
this year and look ahead to 1998. Here's a rundown:
Economic Growth: After a strong opening half of the year, in which growth
exceeded 4%, the economy seems to be proceeding at a less frenetic pace.
Importantly, this more modest rate of business improvement should prove equally
sustainable. Overall, we see the domestic economy moving ahead at a 2.4%-2.6%
rate during the closing months of 1997, and then proceeding at a somewhat slower
2.0%-2.3% in 1998. We now believe that the evolving financial crises in
Southeast Asia and in other parts of the world will not have a material
dampening effect on this country's economic health.
Inflation: Here, too, moderation should be a prevailing theme, with prices
likely to continue rising at a subdued pace in the months ahead. The ongoing
lack of serious labor and raw materials shortages underscore much of our
optimism on the pricing front.
Interest Rates: As has been the case with the economy and inflation, interest
rates--specifically their ongoing stability--have been a pivotal source of
support for the financial markets in this country. But will rates continue to
provide support? The answer here will depend largely on the upcoming levels of
economic growth and inflation. Should both remain at moderate, non-threatening
levels, as we expect, the Federal Reserve will probably keep interest rates
where they are into at least the early part of 1998.
Performance Data:*
Total
Return
------
1 Year ended September 30, 1997 ..................................... 31.42%
From November 17, 1995+ to
September 30, 1997 ................................................ 30.22%
+ Commencement of operations.
* The performance data quoted represent past performance and are no guarantee
of future performance.
- --------------------------------------------------------------------------------
3
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Schedule of Investments (unaudited)
================================================================================
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (91.7%)
ADVERTISING (1.2%)
4,600 Omnicom Group, Inc................................. $ 334,650
AIR TRANSPORT (1.2%)
9,000 Air Express International
Corp........................................... 328,500
AUTO & TRUCK (1.4%)
7,000 Paccar, Inc........................................ 392,000
BANK (2.8%)
5,000 Bank of Boston Corp................................ 442,187
2,500 Citicorp........................................... 334,844
-----------
777,031
BEVERAGE-SOFT
DRINK (2.3%)
6,000 Coca-Cola Co....................................... 365,625
9,600 Coca-Cola Enterprises, Inc......................... 258,600
----------
624,225
CHEMICAL-SPECIALTY
(1.4%)
7,500 Praxair, Inc....................................... 383,906
COAL/ALTERNATE
ENERGY (1.4%)
9,000 AES Corp.*......................................... 393,750
COMPUTER &
PERIPHERALS (16.9%)
7,500 Adaptec, Inc.*..................................... 350,625
7,000 Cisco Systems, Inc.*............................... 511,438
5,500 Compaq Computer Corp.*............................. 411,125
8,000 Dell Computer Corp.*............................... 775,000
9,000 EMC Corp.*......................................... 525,375
20,000 Gateway 2000, Inc.*................................ 628,750
4,000 International Business
Machines Corp.................................. 423,750
10,000 Newbridge Networks Corp.*.......................... 598,750
8,000 Sun Microsystems, Inc.*............................ 374,500
-----------
4,599,313
COMPUTER SOFTWARE
& SERVICES (9.8%)
6,500 BMC Software, Inc.*................................ 420,875
10,500 Computer Associates
International, Inc............................. 754,031
5,500 McAfee Associates, Inc.*........................... 291,500
3,000 Microsoft Corp.*................................... 396,937
9,750 Oracle Corp.*...................................... 355,266
10,000 Parametric Technology
Corp.*......................................... 441,250
-----------
2,659,859
DIVERSIFIED
COMPANIES (1.3%)
8,400 AlliedSignal, Inc.................................. 357,000
DRUG (5.5%)
4,000 Lilly (Eli) & Co................................... 481,750
3,000 Merck & Co., Inc................................... 299,812
6,000 Pfizer, Inc........................................ 360,375
7,000 Schering-Plough Corp............................... 360,500
-----------
1,502,437
ELECTRICAL
EQUIPMENT (1.8%)
7,000 General Electric Co................................ 476,438
FINANCIAL SERVICES
(1.1%)
3,200 Franklin Resources, Inc............................ 298,000
- --------------------------------------------------------------------------------
4
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
September 30, 1997
================================================================================
Shares Value
- --------------------------------------------------------------------------------
FOREIGN
TELECOMMUNICATIONS
(1.4%)
3,600 Northern Telecom Ltd............................... $ 374,175
HOUSEHOLD
PRODUCTS (1.1%)
4,400 Procter & Gamble Co................................ 303,875
INSURANCE-
DIVERSIFIED (2.6%)
3,600 American International
Group, Inc..................................... 371,475
1,800 CIGNA Corp......................................... 335,250
-----------
706,725
MACHINERY (2.6%)
8,000 Caterpillar, Inc................................... 431,500
5,200 Deere & Co......................................... 279,500
-----------
711,000
MEDICAL SUPPLIES (6.1%)
4,000 Boston Scientific Corp.*........................... 220,750
9,000 Guidant Corp....................................... 504,000
8,000 Johnson & Johnson.................................. 461,000
10,000 Medtronic Inc...................................... 470,000
-----------
1,655,750
OILFIELD SERVICES/
EQUIPMENT (11.3%)
10,000 BJ Services Co.*................................... 742,500
7,500 Ensco International, Inc........................... 295,781
6,000 Smith International, Inc.*......................... 466,125
8,000 Tidewater, Inc..................................... 474,000
12,000 Transocean Offshore, Inc........................... 575,250
6,000 Western Atlas, Inc.*............................... 528,000
-----------
3,081,656
PACKAGING &
CONTAINER (1.5%)
12,000 Owens-Illinois, Inc.*.............................. 407,250
RAILROAD (1.1%)
9,500 Wisconsin Central
Transportation Corp.*.......................... 302,219
RETAIL-SPECIAL
LINES (1.6%)
10,000 Tiffany & Co....................................... 425,000
SEMICONDUCTOR (3.4%)
10,000 Intel Corp......................................... 923,125
SEMICONDUCTOR-
CAPITAL EQUIPMENT
(1.4%)
4,000 Applied Materials, Inc.*........................... 381,000
SHOE (2.6%)
8,000 NIKE, Inc. Class "B"............................... 424,000
11,250 Wolverine World Wide, Inc.......................... 284,063
-----------
708,063
TELECOMMUNICATIONS
EQUIPMENT (2.1%)
9,750 Andrew Corp.*...................................... 255,328
6,400 Tellabs, Inc.*..................................... 329,600
-----------
584,928
TELECOMMUNICATION
SERVICES (3.2%)
10,000 AirTouch Communications,
Inc.*.......................................... 354,375
14,400 WorldCom, Inc.*.................................... 509,400
----------
863,775
- --------------------------------------------------------------------------------
5
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Schedule of Investments (unaudited) September 30, 1997
================================================================================
Shares Value
- --------------------------------------------------------------------------------
TOILETRIES/COSMETICS
(1.6%)
5,000 Gillette Co........................................ $ 431,563
-----------
TOTAL COMMON STOCKS
AND TOTAL INVESTMENT
SECURITIES (91.7%)
(Cost $17,555,877) ................................ 24,987,213
----------
Principal
Amount Value
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT (8.1%)
(including accrued interest)
$2,200,000 Collateralized by $1,805,000
U.S. Treasury Notes 8 1/2%,
due 2/15/20, with a value of
$2,256,815 (with Goldman,
Sachs & Co., Inc. 6.05%,
dated 9/30/97, due 10/1/97,
delivery value $2,200,370) ........................ $ 2,200,370
CASH AND OTHER ASSETS OVER
LIABILITIES (0.2%) ............................................... 53,110
-----------
TOTAL NET ASSETS (100%) ......................................... $27,240,693
===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE, PER
OUTSTANDING SHARE
($27,240,693 / 1,685,128
shares outstanding) ............................................ $ 16.17
===========
* Non-income producing
See Notes to Financial Statements.
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6
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Statement of Assets and Liabilities
at September 30, 1997 (unaudited)
================================================================================
Assets:
Investment securities, at value
(Cost-$17,555,877) ....................................... $ 24,987,213
Repurchase agreement
(Cost-$2,200,370) ........................................ 2,200,370
Cash ....................................................... 56,450
Deferred organization costs (note 2) ....................... 32,548
Dividends receivable ....................................... 9,966
------------
Total Assets ........................................... 27,286,547
------------
Liabilities:
Payable for capital shares
repurchased .............................................. 2,000
Accrued expenses:
Advisory fee payable ..................................... 16,711
Service and Distribution Plan fees ....................... 5,575
Other .................................................... 21,568
------------
Total Liabilities ...................................... 45,854
------------
Net Assets ................................................. $ 27,240,693
============
Net Assets consist of:
Capital stock, at $.01 par value
(authorized 50,000,000,
outstanding 1,685,128 shares) ............................ $ 16,851
Additional paid-in capital ................................. 18,980,339
Accumulated investment loss-net ............................ (76,571)
Accumulated net realized gain
on investments ........................................... 888,738
Unrealized net appreciation of
investments .............................................. 7,431,336
------------
Net Assets ................................................. $ 27,240,693
============
Net Asset Value, Offering and
Redemption Price, per
Outstanding Share
($27,240,693 / 1,685,128
shares outstanding) .................................... $ 16.17
============
Statement of Operations
for the six months ended September 30, 1997 (unaudited)
================================================================================
Investment Income:
Interest income ............................................ $ 61,386
Dividend income (Net of foreign
withholding taxes of $162) ............................... 60,011
-----------
Total Income ........................................... 121,397
-----------
Expenses:
Advisory fee ............................................... 86,771
Service and distribution plan
fee (note 5) ............................................. 28,923
Auditing and legal fees .................................... 17,385
Accounting and bookkeeping fees ............................ 16,195
Custodian fees ............................................. 16,195
Registration and filing fees ............................... 10,320
Directors' fees and expenses ............................... 9,150
Printing ................................................... 6,405
Amortization of deferred organization
costs (note 2) ........................................... 5,214
Insurance, dues and other .................................. 2,050
Transfer agent ............................................. 1,830
-----------
Total Expenses before
Custody Credits ...................................... 200,438
Less: Custody Credits .................................. (2,470)
-----------
Net Expenses ........................................... 197,968
-----------
Investment Loss--Net ....................................... (76,571)
-----------
Realized and Unrealized Gain on
Investments--Net:
Realized Gain--Net ..................................... 164,418
Change in Unrealized
Appreciation ......................................... 5,711,794
-----------
Net Realized Gain and Net Unrealized
Appreciation of Investments .............................. 5,876,212
-----------
Net Increase in Net Assets
from Operations .......................................... $ 5,799,641
===========
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
7
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Statement of Changes in Net Assets
for the six months ended September 30, 1997 (unaudited) and for the year ended
March 31, 1997
================================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
September 30, 1997 March 31,
(unaudited) 1997
------------------------------
<S> <C> <C>
Operations:
Investment (loss) income--net ...................................... $ (76,571) $ 140,782
Realized gain on investments--net .................................. 164,418 986,627
Net change in unrealized appreciation of investments .............. 5,711,794 988,551
----------------------------
Net increase in net assets from operations......................... 5,799,641 2,115,960
----------------------------
Distributions to Shareholders:
Investment income--net ............................................. -- (179,489)
Realized gains--net ................................................ -- (13,147)
----------------------------
-- (192,636)
----------------------------
Capital Share Transactions:
Proceeds from sale of shares ...................................... 3,960,525 4,016,641
Proceeds from reinvestment of distributions to shareholders........ -- 192,342
Cost of shares repurchased ........................................ (600,433) (498,959)
----------------------------
Increase from capital share transactions .......................... 3,360,092 3,710,024
----------------------------
Total Increase ...................................................... 9,159,733 5,633,348
Net Assets:
Beginning of period ............................................... 18,080,960 12,447,612
----------------------------
End of period ..................................................... $27,240,693 $18,080,960
============================
Accumulated investment (loss) income-net, at end of period .......... $ (76,571) $ --
============================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Notes to Financial Statements (unaudited) September 30, 1997
================================================================================
1. Significant Accounting Policies
Value Line U.S. Multinational Company Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended, as a diversified open-end
management investment company whose primary investment objective is maximum
total return. The Fund invests primarily in common stock or securities
convertible into common stock of U.S. companies that have significant sales from
international operations.
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.
2. Organization Cost
Costs of $52,030 incurred in connection with the Fund's organization and initial
registration have been deferred and are being amortized on a straight-line basis
over 60 months, beginning at the commencement of operations of the Fund. In the
event any of the initial shares of the Fund are redeemed by the holder thereof
during the five-year amortization period, the redemption proceeds will be
- --------------------------------------------------------------------------------
9
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Notes to Financial Statements (unaudited) September 30, 1997
================================================================================
reduced by a pro rata portion of any unamortized, deferred organizational
expenses in the same proportion as the number of initial shares being redeemed
bears to the number of initial shares outstanding at the time of redemption.
3. Capital Share Transactions
Transactions in capital stock were as follows:
Six Months
Ended Year
September 30, Ended
1997 March 31,
(unaudited) 1997
-------------------------
Shares sold .................................... 259,584 311,397
Shares issued to shareholders
in reinvestment of
dividends .................................... -- 14,727
-------------------------
259,584 326,124
Shares repurchased ............................. 40,171 40,083
-------------------------
Net increase ................................... 219,413 286,041
=========================
4. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, were as
follows:
Six Months
Ended
Sept. 30, 1997
(unaudited)
--------------
PURCHASES:
Investment Securities ....................................... $8,102,919
==========
SALES:
Investment Securities ....................................... $5,524,899
==========
At September 30, 1997, the aggregate cost of investment securities and
repurchase agreement for federal income tax purposes was $19,756,247. The
aggregate appreciation and depreciation of investments at September 30, 1997,
based on a comparison of investment values and their costs for federal income
tax purposes, was $7,505,020 and $73,684, respectively, resulting in a net
appreciation of $7,431,336.
5. Advisory Fees, Service and Distribution Plan Fees and Transactions With
Affiliates
An Advisory fee of $86,771 was paid or payable to Value Line, Inc., the Fund's
investment adviser (the "Adviser"), for the six month period ended September 30,
1997. The fee is computed at the rate of .75 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, as amended, 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. Fees amounting to
$28,923 for the six month period ended September 30, 1997 were paid or payable
to the Distributor under this Plan.
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, 1997, the Fund paid brokerage
commissions totaling $7,845 to the Distributor, which clears its transactions
through unaffiliated brokers.
At September 30, 1997, the Adviser and/or affiliated companies and the Value
Line, Inc. Profit Sharing and Savings Plan owned 1,463,277 shares of the Fund's
capital stock, representing 86.8% of the outstanding shares. In addition,
officers and directors of the Fund owned 113,036 shares of capital stock,
representing 6.7% of the outstanding shares.
- --------------------------------------------------------------------------------
10
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Financial Highlights
================================================================================
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Six Months November 17, 1995
Ended (commencement of
Sept. 30, 1997 Year Ended operations) to
(unaudited) March 31, 1997 March 31, 1996
------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period ............. $12.34 $10.55 $10.00
--------------------------------------------------
Income from investment operations:
Net investment (loss) income ................... (.05) .12(1) .07(1)
Net gains or losses on securities (both realized
and unrealized)............................... 3.88 1.82 .52
------------------------------------------------------
Total from investment operations ............... 3.83 1.94 .59
------------------------------------------------------
Less distributions:
Dividends from net investment income ........... -- (.14) (.04)
Distributions from realized capital gains....... -- (.01) --
------------------------------------------------------
Total distributions ............................ -- (.15) (.04)
------------------------------------------------------
Net asset value, end of period ................... $16.17 $12.34 $10.55
======================================================
Total return .................................... 31.04%+ 18.36% 5.93%+
======================================================
Ratios/Supplemental Data:
Net assets end of period (in thousands) .......... $27,241 $18,081 $12,448
Ratio of operating expenses to average net assets. 1.75%* 1.97%(2)(4) 2.45%*(2)(4)
Ratio of net investment (loss) income to
average net assets.............................. (0.67)%* (0.64)%(2)(4) (0.32)%*(2)(4)
Portfolio turnover rate........................... 27%+ 56% 17%+
Average commission rate paid per share of
common stock investments purchased/ sold........ $.0491 $.0495(3) --
</TABLE>
(1) Net of custody fee credits, expense reimbursement and fees waived by the
Adviser. Had these expenses been fully paid by the Fund for the periods
ended March 31, 1997 and 1996 investment loss- net per share would have
been $(.07) and $(.001) respectively.
(2) Due to the reimbursement of expenses and waiver of fees by the Adviser,
data are not indicative of future periods.
(3) Disclosure effective for fiscal years beginning on or after September 1,
1995.
(4) Before custody fee credits, expense reimbursement and fees waived by the
Adviser. After expense reimbursement and fees waived for the periods ended
March 31, 1997 and 1996 ratio of expenses to average net assets was 0.40%
and 0%+ respectively; and ratio of net investment income to average net
assets was 0.93% and 2.13%* respectively.
+ Not annualized
* Annualized
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
11
<PAGE>
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 Value Plus, a variable life insurance policy.
For more complete information about any of the Value Line Funds, including
charges and expenses, send for a prospectus from Value Line Securities, Inc.,
220 East 42nd Street, New York, New York 10017-5891 or call 1-800-223-0818, 24
hours a day, 7 days a week. Read the prospectus carefully before you invest or
send money.
- --------------------------------------------------------------------------------
12
<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 Price Waterhouse LLP
ACCOUNTANTS 1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL Peter D. Lowenstein, Esq.
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830
DIRECTORS Jean Bernhard Buttner
Francis C. Oakley
Marion N. Ruth
Frances T. Newton
OFFICERS Jean Bernhard Buttner
Chairman and President
Alan N. Hoffman
Vice President
Michael Romanowski
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).
VLF709215
