------------------
SEMI-ANNUAL REPORT
------------------
September 30, 1998
------------------
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:
As you are no doubt aware, economic and monetary conditions across the globe
have been in turmoil over the past several months. The turbulence started with a
round of currency devaluations in several Pacific Rim countries in August and
September of 1997, continued through weakness in Latin America, Canada and other
commodity-dependent nations, and climaxed in the devaluation of the Russian
ruble (which sparked a wrenching retrenchment in that economy) this past summer.
Through it all, the Japanese economy--the world's second largest--has been mired
in a prolonged recession.
This has been devastating for investors in international or emerging-markets
stock funds. And even though the Value Line U.S. Multinational Company Fund does
not fit into those categories--since our investable universe consists solely of
U.S. domiciled, U.S. traded securities--the effect of worldwide economic
weakness has affected this portfolio as well. The strong U.S. dollar has damaged
the competitive position of companies that manufacture goods here and export to
foreign countries, and unfortunate currency relations have also impeded the
performance of U.S. companies that operate abroad and must translate their
results into U.S. dollars for financial-reporting purposes. All in all, the past
six to twelve months have witnessed a gravitation on the part of the investment
community toward those sectors with little or no overseas exposure (such as
utilities, regional banks, or retailers), to the distinct detriment of the
multinationals.
As a result, for the first six months of the current fiscal year the U.S.
Multinational Company Fund was down 11.37% (including reinvested dividends), a
poorer showing than that achieved by the unmanaged benchmark Standard & Poor's
500 Index during this period.
U.S.
Multinational
Company
Fund S&P 500
----------------------------
April 1 to
September 30, 1998......................... -11.37% -7.03%
----------------------------
In dealing with this marketplace reality, we have been concentrating on the most
high-quality stocks in the group, and we have held somewhat more cash than we
would under normal market conditions. This cash has served to cushion the
portfolio from some of the severe volatility we have experienced, and it
provides a reservoir we can tap to buy stocks as their prices become more
attractive.
While it may take a few more quarters for the international turbulence to
straighten itself out, we have seen some recent signs of hope. Japanese
officials have finally taken some proactive steps to pull their country out of
recession, including an interest rate cut and legislation to reform their
banking system. We believe that more fiscal stimulus is required, but this is a
good first step. Further, the U.S. Federal Reserve has embarked on a program of
easier monetary policy by cutting short-term interest rates. Among other things,
this will rein in the strong U.S. currency, to the benefit of our exporters and
other multinational companies. Thus, there are several signs that point to a
brighter future. (Please see the accompanying Economic Observations insert for
our latest thoughts in where the economy may be headed.)
We appreciate your confidence in Value Line, and hope we can continue to serve
your needs for growth investing in the future.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
November 16, 1998
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2
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
U.S. Multinational Company 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 September 30, 1998................................ -5.87%
From November 17, 1995+ to
September 30, 1998........................................... +16.34%
+ Commencement of operations.
* 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 U.S. Multinational Company Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (90.9%)
ADVERTISING (1.7%)
9,200 Omnicom Group, Inc. ........................... $ 414,000
AIR TRANSPORT (1.9%)
4,500 AMR Corp.*..................................... 249,469
12,300 Airborne Freight Corp.......................... 212,944
---------
462,413
AUTO & TRUCK (1.0%)
6,000 PACCAR Inc..................................... 247,125
AUTO PARTS--
REPLACEMENT (1.0%)
5,500 Federal-Mogul Corp............................. 257,125
BANK (4.8%)
10,000 BankBoston Corp................................ 330,000
6,500 BankAmerica Corp............................... 390,812
2,500 Citicorp....................................... 232,344
4,300 State Street Corporation....................... 234,619
---------
1,187,775
BEVERAGE--
SOFT DRINK (1.5%)
15,000 Coca-Cola Enterprises, Inc. ................... 378,750
COAL/ALTERNATE
ENERGY (1.3%)
9,000 AES Corp.*..................................... 333,562
COMPUTER &
PERIPHERALS (19.6%)
15,750 Cisco Systems, Inc.*........................... 973,547
15,000 Compaq Computer Corp. ......................... 474,375
24,000 Dell Computer Corp.*........................... 1,578,000
18,000 EMC Corp.*..................................... 1,029,375
4,000 International Business
Machines Corp.............................. 512,000
10,000 3Com Corp.*.................................... 300,625
---------
4,867,922
COMPUTER SOFTWARE
SERVICES (9.3%)
13,000 BMC Software, Inc.*............................ 780,812
15,750 Computer Associates
International, Inc......................... 582,750
6,000 Microsoft Corp.*............................... 660,375
8,250 Network Associates, Inc.*...................... 292,875
---------
2,316,812
DIVERSIFIED
COMPANIES (1.1%)
5,000 Tyco International, Ltd. ...................... 276,250
DRUG (10.2%)
6,500 Lilly (Eli) & Co............................... 509,031
3,000 Merck & Co., Inc............................... 388,688
6,000 Pfizer, Inc.................................... 635,625
6,000 Quintiles Transnational
Corp.*..................................... 262,500
7,000 Schering-Plough Corp. ......................... 724,937
---------
2,520,781
ELECTRICAL
EQUIPMENT (1.8%)
5,500 General Electric Co............................ 437,594
ENTERTAINMENT (1.1%)
6,000 Clear Channel
Communications, Inc.*...................... 285,000
FINANCIAL SERVICES (2.7%)
6,000 American Express Co. .......................... 465,750
6,400 Franklin Resources, Inc........................ 192,000
---------
657,750
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4
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
September 30, 1998
================================================================================
Shares Value
- --------------------------------------------------------------------------------
HOUSEHOLD
PRODUCTS (2.6%)
5,000 Colgate-Palmolive Co. ......................... $ 342,500
4,400 Procter & Gamble Co. .......................... 312,125
---------
654,625
INSURANCE--
DIVERSIFIED (1.7%)
5,400 American International
Group, Inc................................. 415,800
MEDICAL SUPPLIES (8.7%)
7,500 Centocor, Inc.*................................ 297,188
9,000 Guidant Corp................................... 668,250
8,000 Johnson & Johnson.............................. 626,000
10,000 Medtronic, Inc................................. 578,750
---------
2,170,188
METAL FABRICATING
(1.1%)
6,000 SPS Technologies, Inc.*........................ 279,375
OILFIELD SERVICES/
EQUIPMENT (1.7%)
12,000 Transocean Offshore, Inc....................... 416,250
PACKAGING &
CONTAINER (1.2%)
12,000 Owens-Illinois, Inc.*.......................... 300,000
RECREATION (1.0%)
5,500 Electronic Arts Inc.*.......................... 241,312
RETAIL--SPECIAL
LINES (1.3%)
10,000 Tiffany & Co................................... 313,750
SEMICONDUCTOR (3.5%)
10,000 Intel Corp..................................... 857,500
TELECOMMUNICATIONS
EQUIPMENT (2.5%)
10,000 ADC Telecommunications,
Inc.*...................................... 211,250
10,000 Loral Space &
Communications Ltd.*....................... 147,500
6,400 Tellabs, Inc.*................................. 254,800
----------
613,550
TELECOMMUNICATION
SERVICES (5.1%)
10,000 AirTouch
Communications Inc.*....................... 570,000
14,400 MCI WorldCom, Inc.*............................ 703,800
---------
1,273,800
TOILETRIES/
COSMETICS (1.5%)
10,000 Gillette Co.................................... 382,500
---------
TOTAL COMMON STOCKS
& TOTAL INVESTMENT
SECURITIES (90.9%)
(Cost $15,769,763) .......................... 22,561,509
----------
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5
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Schedule of Investments September 30, 1998 (unaudited)
================================================================================
Principal
Amount Value
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT (9.7%)
(including accrued interest)
$2,400,000 Collateralized by $2,095,000
U.S. Treasury Notes 6 5/8%,
due 5/15/07, with a value
of $2,461,952 (with State
Street Bank & Trust
Company, 5.30%, dated
9/30/98, due 10/1/98
delivery value
$2,400,353)......................................... $ 2,400,353
EXCESS OF LIABILITIES OVER
CASH AND OTHER
ASSETS (-0.6%) .............................................. (157,449)
------------
NET ASSETS (100%) ............................................. $ 24,804,413
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE, PER
OUTSTANDING SHARE
($24,804,413 / 1,719,643) ................................... $ 14.42
============
* 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, 1998 (unaudited)
- --------------------------------------------------------------------------------
Assets:
Investment securities, at value
(Cost--$15,769,763)...................................... $ 22,561,509
Repurchase agreement
(Cost--$2,400,353)....................................... 2,400,353
Cash ..................................................... 69,113
Deferred organization costs (note 2) ..................... 22,149
Dividends receivable ..................................... 7,149
Receivable for securities sold ........................... 1
-------------
Total Assets ......................................... 25,060,274
-------------
Liabilities:
Payable for securities purchased ......................... 223,380
Accrued expenses:
Advisory fee payable ................................... 15,106
Distribution plan fees payable ......................... 5,040
Other .................................................. 12,335
-------------
Total Liabilities .................................... 255,861
-------------
Net Assets ............................................... $ 24,804,413
=============
Net Assets consist of:
Capital stock, at $.01 par value
(authorized 50,000,000,
outstanding 1,719,643 shares)........................... $ 17,197
Additional paid-in capital ............................... 19,029,464
Accumulated net investment loss .......................... (109,389)
Accumulated net realized loss
on investments.......................................... (924,605)
Net unrealized appreciation
of investments.......................................... 6,791,746
-------------
Net Assets ............................................... $ 24,804,413
=============
Net Asset Value, Offering and
Redemption Price, per
Outstanding Share
($24,804,413 / 1,719,643
shares outstanding) .................................... $ 14.42
=============
Statement of Operations
for the six months ended September 30, 1998 (unaudited)
================================================================================
Investment Income:
Interest income .......................................... $ 63,283
Dividend income (Net of foreign
withholding taxes of $81)............................... 59,183
------------
Total Income ......................................... 122,466
------------
Expenses:
Advisory fee ............................................. 108,317
Service and distribution plan fee ........................ 36,106
Auditing and legal fees .................................. 16,710
Accounting and bookkeeping fees .......................... 16,200
Custodian fees ........................................... 13,725
Printing ................................................. 11,621
Directors' fees and expenses ............................. 11,092
Registration and filing fees ............................. 9,493
Amortization of deferred organization
costs (note 2).......................................... 5,213
Insurance, dues and other ................................ 2,470
Transfer agent ........................................... 1,991
------------
Total Expenses before
Custody Credits .................................... 232,938
Less: Custody Credits ................................ (1,083)
------------
Net Expenses ......................................... 231,855
------------
Net Investment Loss ...................................... (109,389)
------------
Net Realized and Unrealized
Loss on Investments:
Net Realized Loss .................................... (924,605)
Change in Net Unrealized
Appreciation (Depreciation)......................... (2,242,781)
------------
Net Realized Loss and Change in
Net Unrealized Appreciation
(Depreciation) on Investments .......................... (3,167,386)
------------
Net Decrease in Net Assets from
Operations ............................................. $ (3,276,775)
============
See Notes to Financial Statements.
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7
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
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 loss ..................................................... $ (109,389) $ (149,728)
Net realized (loss) gain on investments ................................. (924,605) 378,803
Change in net unrealized (depreciation) appreciation .................... (2,242,781) 7,314,985
------------------------------------
Net (decrease) increase in net assets from operations ................... (3,276,775) 7,544,060
------------------------------------
Distributions to Shareholders:
Net investment income ................................................... -- --
Net realized gain from investment transactions .......................... -- (1,344,034)
------------------------------------
Total distributions ..................................................... -- (1,344,034)
------------------------------------
Capital Share Transactions:
Proceeds from sale of shares ............................................ 948,109 5,038,730
Proceeds from reinvestment of distributions to shareholders ............. -- 1,339,403
Cost of shares repurchased .............................................. (2,542,141) (983,899)
------------------------------------
(Decrease) Increase from capital share transactions ..................... (1,594,032) 5,394,234
------------------------------------
Total (Decrease) Increase ................................................. (4,870,807) 11,594,260
Net Assets:
Beginning of period ..................................................... 29,675,220 18,080,960
------------------------------------
End of period ........................................................... $ 24,804,413 $ 29,675,220
====================================
Accumulated Net Investment Loss, at end of period ......................... $ (109,389) $ --
====================================
</TABLE>
See Notes to Financial Statements.
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8
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Notes to Financial Statements September 30, 1998 (unaudited)
================================================================================
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 Costs
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
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.
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9
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Notes to Financial Statements (September 30, 1998 (unaudited)
================================================================================
3. Capital Share Transactions
Transactions in capital stock were as follows:
Six Months
Ended
Sept. 30, Year Ended
1998 March 31,
(unaudited) 1998
---------------------------
Shares sold ................................. 58,264 328,824
Shares issued in reinvestment
of dividends and
distributions ............................. -- 94,724
--------------------------
58,264 423,548
Shares repurchased .......................... 162,731 65,153
--------------------------
Net (decrease) increase ..................... (104,467) 358,395
===========================
4. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, were as
follows:
Six Months Ended
Sept. 30, 1998
(unauditied)
--------------
PURCHASES:
Investment Securities .................................. $5,405,897
==========
SALES:
Investment Securities .................................. $6,029,496
==========
At September 30, 1998, the aggregate cost of investment securities and
short-term investments for federal income tax purposes was $18,170,116. 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 $8,067,483 and $1,275,737 respectively, resulting in a net
appreciation of $6,791,746.
5. Advisory Fees, Service and Distribution Plan Fees and Transactions With
Affiliates
An advisory fee of $108,317 was paid or payable to Value Line, Inc., the Fund's
investment adviser (the "Adviser"), for the six months ended September 30, 1998.
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.
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
$36,106 were paid or payable to the Distributor under the 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,
1998, the Fund paid brokerage commissions totaling $5,407 to the Distributor,
which clears its transactions through unaffiliated brokers.
At September 30, 1998, the Adviser, and/or affiliated companies, and the Value
Line, Inc. Profit Sharing and Savings Plan, owned 1,432,566 shares of the Fund's
capital stock, representing 83.3% of the outstanding shares. In addition,
certain officers and directors of the Fund owned 119,447 shares of capital
stock, representing 6.9% of the outstanding shares.
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10
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Financial Highlights
================================================================================
Selected data for a share of capital sotck outstanding throughout each period:
<TABLE>
<CAPTION>
Six Months Years Ended November 17, 1995
Ended March 31, (Commencement of
Sept.30, 1998 --------------------- Operations) to
(Unaudited) 1998 1997 March 31, 1996
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................... $ 16.27 $ 12.34 $ 10.55 $ 10.00
-------------------------------------------------------------------
Income from investment operations:
Net investment (loss) income .......................... (.06) (.08) .12(1) .07(1)
Net (losses) or gains on securities
(both realized and unrealized) ...................... (1.79) 4.80 1.82 .52
-------------------------------------------------------------------
Total from investment operations ...................... (1.85) 4.72 1.94 .59
-------------------------------------------------------------------
Less distributions:
Dividends from net investment income .................. -- -- (.14) (.04)
Distributions from capital gains ...................... -- (.79) (.01) --
-------------------------------------------------------------------
Total distributions ................................... -- (.79) (.15) (.04)
-------------------------------------------------------------------
Net asset value, end of period .......................... $ 14.42 $ 16.27 $ 12.34 $ 10.55
===================================================================
Total return ............................................ -11.37%+ 39.17% 18.36% 5.93%
===================================================================
Ratios/Supplemental Data:
Net assets end of period (in thousands) ................. $ 24,804 $ 29,675 $ 18,081 $12,448
Ratio of operating expenses to
average net assets..................................... 1.65%*(4) 1.69%(4) 1.97%(2)(3) 2.45%*(2)(3)
Ratio of net investment (loss) income to
average net assets..................................... (0.78)*% (0 .60)% (0.64)%(2)(3) (0.32)%*(2)(3)
Portfolio turnover rate.................................. 21%+ 49% 56% 17%+
</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, net investment loss per share would have
been $(.07) and $(.001) respectively.
(2) Due to the reimbusement of expenses and waiver of fees by the Adviser, data
are not indicative of future periods.
(3) 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.
(4) Before offset of custody credits.
+ Not annualized.
* Annualized.
See Notes to Financial Statements.
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11
<PAGE>
Value Line U.S. Multinational Company 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.
- --------------------------------------------------------------------------------
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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
Alan N. Hoffman
Vice President
Nancy Bendig
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).
