UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file Number 811-568
-------
Value Line Fund, Inc.
(Exact name of registrant as specified in charter)
220 East 42nd Street, New York, N.Y. 10017
- ------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-907-1500
Date of fiscal year end: Decembert 31, 2004
------------------
Date of reporting period: December 31, 2004
------------------
Item I. Reports to Stockholders.
A copy of the Annual Report to Stockholders for the period ended 12/31/04
is included with this Form.
Item 2. Code of Ethics
(a) The Registrant has adopted a Code of Ethics that applies to its
principal executive officer, and principal financial officer and principal
accounting officer.
(f) Pursuant to item 12(a), the Registrant is attaching as an exhibit a
copy of its Code of Ethics that applies to its principal executive officer, and
principal financial officer and principal accounting officer.
Item 3. Audit Committee Financial Expert.
(a)(1)The Registrant has an Audit Committee Financial Expert serving on its
Audit Committee.
(2) The Registrant's Board has designated John W. Chandler, a member of the
Registrant's Audit Committee, as the Registrant's Audit Committee Financial
Expert. Mr. Chandler is an independent director who is a senior consultant with
Academic Search Consultation Service. He spent most of his professional career
at Williams College, where he served as a faculty member, Dean of the Faculty,
and President (1973-85). He
also served as President of Hamilton College (1968-73), and as President of the
Association of American Colleges and Universities (1985-90). He has also
previously served as Trustee Emeritus and Chairman of the Board of Trustees of
Duke University.
A person who is designated as an "audit committee financial expert" shall not
make such person an "expert" for any purpose, including without limitation under
Section 11 of the Securities Act of 1933 or under applicable fiduciary laws, as
a result of being designated or identified as an audit committee financial
expert. The designation or identification of a person as an audit committee
financial expert does not impose on such person any duties, obligations, or
liabilities that are greater than the duties, obligations, and liabilities
imposed on such person as a member of the audit committee and Board of Trustees
in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services
(a) Audit Fees 2004 - $8,891; Audit Fees 2003 - $29,140.
(b) Audit-Related fees - None.
(c) Tax Preparation Fees 2004 -$5,940; Tax Preparation Fees 2003 - $6,840.
(d) All Other Fees - None
(e)(1) Audit Committee Pre-Approval Policy. All services to be performed
for the Registrant by PricewaterhouseCoopers LLP must be
pre-approved by the audit committee. All services performed during
2004 and 2003 were pre-approved by the committee.
(e)(2) Not applicable.
(f) Not applicable.
(g) Aggregate Non-Audit Fees 2004 -$5,940; Aggregate Non-Audit Fees 2003-
$6,840.
(h) Not applicable.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Act (17 CFR
270.30a-2(c) ) based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this
report, are appropriately designed to ensure that material
information relating to the registrant is made known to such officers
and are operating effectively.
(b) The registrant's principal executive officer and principal financial
officer have determined that there have been no significant changes in
the registrant's internal controls or in other factors that could
significantly affect these controls subsequent to the date of their
evaluation, including corrective actions with regard to significant
deficiencies and material weaknesses.
Item 12. Exhibits.
(a) Code of Business Conduct and Ethics for Principal Executive and Senior
Financial Officers attached hereto as Exhibit 100.COE
(b) (1) Certification pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2) attached hereto as Exhibit
99.CERT.
(2) Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
By
------------------------------------
Jean B. Buttner, President
Date:
----------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By:
-------------------------------------------------------
Jean B. Buttner, President, Principal Executive Officer
By: -------------------------------------------------------------------------
David T. Henigson, Vice President, Treasurer, Principal Financial Officer
Date:
-----------------
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 BFDS
P.O. Box 219729
Kansas City, MO 64121-9729
INDEPENDENT PricewaterhouseCoopers LLP
REGISTERED PUBLIC 300 Madison Avenue
ACCOUNTING FIRM New York, NY 10017
LEGAL COUNSEL Peter D. Lowenstein, Esq.
Two Sound View Drive, Suite 100
Greenwich, CT 06830
DIRECTORS Jean Bernhard Buttner
John W. Chandler
Frances T. Newton
Francis C. Oakley
David H. Porter
Paul Craig Roberts
Marion N. Ruth
Nancy-Beth Sheerr
OFFICERS Jean Bernhard Buttner
Chairman and President
Sigourney B. Romaine
Vice President
John J. Koller
Vice President
David T. Henigson
Vice President and
Secretary/Treasurer
Joseph Van Dyke
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).
#532848
-------------------------------------------
ANNUAL REPORT
-------------------------------------------
December 31, 2004
-------------------------------------------
The Value Line
Fund, Inc.
[VALUE LINE LOGO]
The Value Line Fund, Inc.
TO OUR VALUE LINE
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TO OUR SHAREHOLDERS:
The Value Line Fund beat its S&P 500 benchmark in 2004, returning 12.09%,
including dividends, compared with 10.88% for the S&P 500 Index(1). The Fund's
strong performance was ahead of the S&P thanks to a strong fourth-quarter
performance: the Fund gained 13.28% in the December period, compared with 9.22%
for the S&P 500.
Stocks generally rose in the first quarter, but prices seesawed down during the
second and third quarters, and the broad indices generally touched their year's
lows in the late summer. The ensuing rally represented most of the gains in
2004, or, in the case of the Dow Jones Industrial Average, more than the year's
total return. Stocks benefited from strong earnings gains, which generally
exceeded analysts' forecasts for the year. Although the Federal Reserve raised
short-term interest rates five times during 2004, rising rates had little effect
on stock prices last year.
The Value Line Fund generally invests in stocks that are ranked in the highest
category for price performance over the next six to twelve months by the Value
Line Timeliness Ranking System. The system favors stocks with strong price and
earnings momentum relative to those of all other companies in the Value Line
Investment Survey of approximately 1,700 stocks. At times, however, stock prices
move well in advance of positive changes in earnings, and sometimes whole
sectors do better in the market than in the Ranking System. This was the case in
2004, when the Fund's performance was hurt by underweighting the energy sector,
which was the best-performing group in 2004. On the other hand,the Fund's
underweighting in consumer staples helped its performance, as that sector
returned less than the S&P last year.
We appreciate your continued support and look forward to serving you in the New
Year.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
February 16, 2005
- --------------------------------------------------------------------------------
(1) The Standard & Poor's 500 Index consists of 500 stocks which are traded on
the New York Stock Exchange, American Stock Exchange and the NASDAQ
National Market System and is representative of the broad stock market.
This is an unmanaged index and does not reflect charges, expenses or taxes,
and it is not possible to directly invest in this index.
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2
The Value Line Fund, Inc.
FUND SHAREHOLDERS
- --------------------------------------------------------------------------------
ECONOMIC OBSERVATIONS
The maturing business expansion continues to move along at a healthy 3%-4% pace,
a level of growth that is underpinned by moderate and steady levels of consumer
spending and industrial activity. Moreover, recent trends suggest that the
present rate of improvement on the economic front will be sustained over the
next several quarters.
Helping the expansion along should be high levels of activity in the housing,
auto, retail, manufacturing, and service sectors. This steady growth is likely
to be accompanied by modest levels of inflation for the most part. The wild card
in the equation, and the reason that we are not forecasting an even greater
level of economic growth, is the near-record price of oil. High oil prices
threaten the sustainability of the business expansion and the level of price
stability.
The continuing moderate pace of gross domestic product growth and accompanying
modest inflation should have positive ramifications. That's because this
combination probably will allow the Federal Reserve Board to pursue a measured
monetary tightening course over the next year. Our feeling is that the Fed will
increase rates sufficiently to keep inflation subdued, in the aggregate, but
will not raise rates aggressively enough to derail the business expansion.
Our economic forecast, it should be noted, excludes allowances for a further
escalation in global military conflict or a new incidence of worldwide
terrorism, neither of which can be predicted with any degree of accuracy as to
scope or timing.
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3
The Value Line Fund, Inc.
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COMPARISON OF A CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE VALUE LINE FUND
AND THE S&P 500 Stock Index*
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
* The Standard and Poor's 500 Index (S&P 500 Index) is an unmanaged index
that is representative of the larger-capitalization stocks traded in the
United States.
The return for the index does not reflect expenses which are deducted from
the Fund's returns.
PERFORMANCE DATA:**
AVERAGE ANNUAL GROWTH OF AN ASSUMED
TOTAL RETURN INVESTMENT OF $10,000
------------ ---------------------
1 year ended 12/31/04 ............. +12.09% $11,209
5 years ended 12/31/04 ............ -6.41% $ 7,180
10 years ended 12/31/04 ........... +7.97% $21,536
** The performance data quoted represent past performance and are no guarantee
of future performance. The average annual total returns 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. The performance data and
graph do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares.
- --------------------------------------------------------------------------------
4
The Value Line Fund, Inc.
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FUND EXPENSES:
EXAMPLE
As a shareholder of the Fund, you incur ongoing costs, including management
fees; distribution and service (12b-1) fees; and other Fund expenses. This
Example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2004 through December 31, 2004).
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example an $8,600
account value divided by $1,000=8.6), then multiply the result by the number in
the first line under the heading "Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses in the table are meant to highlight your ongoing
costs and will not help you determine the relative total cost of owning
different funds.
EXPENSES*
PAID DURING
BEGINNING ENDING PERIOD
ACCOUNT ACCOUNT 7/1/04
VALUE VALUE THRU
7/1/04 12/31/04 12/31/04
------ -------- --------
Actual ....................................... $1,000.00 $1,104.60 $5.98
Hypothetical (5% return before expenses) ..... $1,000.00 $1,019.46 $5.74
- --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 1.13%
multiplied by the average account value over the period, multiplied by
184/366 to reflect the one-half period.
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5
Value Line Fund, Inc.
PORTFOLIO HIGHLIGHTS AT DECEMBER 31, 2004 (UNAUDITED)
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TEN LARGEST HOLDINGS
VALUE PERCENTAGE
ISSUE SHARES (IN THOUSANDS) OF NET ASSETS
- -----------------------------------------------------------------------------------------------
Macromedia Inc. .............................. 116,100 $3,613 1.68%
Cendant Corp. ................................ 154,100 3,603 1.68
Sapient Corp. ................................ 454,000 3,591 1.67
Penney (J.C.) Co. Inc. ....................... 86,300 3,573 1.66
Cree, Inc. ................................... 86,900 3,563 1.66
NVR Inc. ..................................... 4,600 3,539 1.65
Urban Outfitters, Inc. ....................... 79,400 3,525 1.64
American Eagle Outfitters, Inc. .............. 74,600 3,514 1.63
Cal Dive International, Inc. ................. 86,100 3,508 1.63
Yahoo! Inc. .................................. 92,600 3,489 1.62
- --------------------------------------------------------------------------------
ASSET ALLOCATION
Stocks 95.5%
Cash & Other 4.5%
- --------------------------------------------------------------------------------
EQUITY SECTOR WEIGHTINGS
Technology 36.40%
Industrial Cyclical 21.59%
Retail Trade 12.49%
Services 8.48%
Energy 5.41%
Consumer Durables 5.18%
Health 3.02%
Utilities 2.25%
Non-Durables 1.78%
Finance 1.70%
Other 1.70%
- --------------------------------------------------------------------------------
6
The Value Line Fund, Inc.
SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VALUE
SHARES (IN THOUSANDS)
- --------------------------------------------------------------------------------
COMMON STOCKS (95.5%)
AEROSPACE/DEFENSE (3.1%)
71,300 Armor Holdings, Inc.*................................. $3,353
86,500 United Industrial Corp. .............................. 3,351
--------
6,704
BIOTECHNOLOGY (0.5%)
17,900 Amgen Inc.*........................................... 1,148
CHEMICAL -- BASIC (1.1%)
39,500 Lyondell Chemical Company............................. 1,142
52,300 Olin Corporation...................................... 1,152
--------
2,294
CHEMICAL -- DIVERSIFIED (1.6%)
60,000 Eastman Chemical Company.............................. 3,464
COAL (1.1%)
27,400 Joy Global Inc. ...................................... 1,190
14,300 Peabody Energy Corp. ................................. 1,157
--------
2,347
COMPUTER & PERIPHERALS (2.7%)
53,900 Apple Computer, Inc.*................................. 3,471
27,600 Dell, Inc.*........................................... 1,163
35,900 Network Appliance, Inc.*.............................. 1,193
--------
5,827
COMPUTER SOFTWARE & SERVICES (11.9%)
55,100 Adobe Systems, Inc. .................................. 3,457
19,300 Affiliated Computer Services, Inc.*................... 1,162
83,200 Anteon International Corp.*........................... 3,483
30,700 Autodesk, Inc.*....................................... 1,165
50,600 CACI International, Inc.*............................. 3,447
46,000 Citrix Systems, Inc.*................................. 1,128
28,400 Cognizant Technology Solutions Corp. Class "A"*....... 1,202
26,700 Cognos Inc.*.......................................... 1,177
VALUE
SHARES (IN THOUSANDS)
- --------------------------------------------------------------------------------
116,100 Macromedia, Inc.*..................................... $ 3,613
26,100 Mercury Interactive Corp.*............................ 1,189
253,000 Oracle Corp.*......................................... 3,471
27,000 SEI Investments Company............................... 1,132
--------
25,626
DIVERSIFIED COMPANIES (2.7%)
154,100 Cendant Corp. ........................................ 3,603
82,500 Park-Ohio Holdings Corp.*............................. 2,137
--------
5,740
E-COMMERCE (3.4%)
49,900 Internet Security Systems, Inc.*...................... 1,160
454,000 Sapient Corporation*.................................. 3,591
95,200 TIBCO Software, Inc.*................................. 1,270
22,900 Websense, Inc.*....................................... 1,162
--------
7,183
EDUCATIONAL SERVICES (0.6%)
17,400 Bright Horizons Family Solutions, Inc.* .............. 1,127
4,000 ITT Educational Services, Inc.*....................... 190
--------
1,317
ELECTRICAL EQUIPMENT (3.8%)
56,700 Garmin Ltd. .......................................... 3,450
23,400 Rockwell Automation, Inc. ............................ 1,159
112,000 Thomas & Betts Corp.*................................. 3,444
--------
8,053
ELECTRICAL UTILITY -- CENTRAL (0.5%)
17,800 TXU Corp. ............................................ 1,149
ELECTRONICS (2.7%)
27,200 Harman International Industries, Inc. ................ 3,455
88,600 Intermagnetics General Corp.*......................... 2,251
--------
5,706
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7
The Value Line Fund, Inc.
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
VALUE
SHARES (IN THOUSANDS)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- DIVERSIFIED (0.5%)
21,500 SLM Corp. ............................................ $1,148
FOOD WHOLESALERS (0.7%)
40,600 Nash Finch Company.................................... 1,533
HOME APPLIANCE (0.6%)
13,400 Black & Decker Corp. (The)............................ 1,184
HOMEBUILDING (2.8%)
5,000 Beazer Homes USA, Inc. ............................... 731
5,500 KB Home............................................... 574
4,600 NVR, Inc.*............................................ 3,539
17,400 Toll Brothers, Inc.*.................................. 1,194
--------
6,038
HOTEL/GAMING (0.5%)
20,700 Station Casinos, Inc. ................................ 1,132
HUMAN RESOURCES (1.5%)
159,500 Korn/Ferry International*............................. 3,310
INDUSTRIAL SERVICES (0.5%)
20,700 C.H. Robinson Worldwide, Inc. ........................ 1,149
INFORMATION SERVICES (1.6%)
62,500 Advisory Board Co. (The)*............................. 2,305
20,000 FactSet Research Systems, Inc. ....................... 1,169
--------
3,474
INTERNET (2.2%)
10,100 eBay, Inc.* .......................................... 1,175
92,600 Yahoo!, Inc.*......................................... 3,489
--------
4,664
MARITIME (1.5%)
194,300 OMI Corporation....................................... 3,274
VALUE
SHARES (IN THOUSANDS)
- --------------------------------------------------------------------------------
MEDICAL SERVICES (2.2%)
9,200 Aetna Inc. ........................................... $1,148
34,700 American Healthways, Inc.*............................ 1,147
41,300 Community Health Systems, Inc.*....................... 1,151
13,500 UnitedHealth Group Inc. .............................. 1,188
--------
4,634
MEDICAL SUPPLIES (3.3%)
32,600 Affymetrix, Inc.*..................................... 1,192
40,600 Biosite, Inc.*........................................ 2,498
126,200 Cytyc Corp.*.......................................... 3,479
--------
7,169
NATURAL GAS -- DIVERSIFIED (2.1%)
67,300 Southwestern Energy Co.*.............................. 3,411
32,500 XTO Energy, Inc. ..................................... 1,150
--------
4,561
OILFIELD SERVICES/EQUIPMENT (1.6%)
86,100 Cal Dive International, Inc.*......................... 3,508
PAPER & FOREST PRODUCTS (0.5%)
34,000 MeadWestvaco Corp. ................................... 1,152
PETROLEUM -- PRODUCING (0.5%)
23,700 Berry Petroleum Co. Class "A"......................... 1,131
PHARMACY SERVICES (0.5%)
29,700 Walgreen Co. ......................................... 1,140
POWER INDUSTRY (0.4%)
27,200 Headwaters, Inc.* .................................... 775
PRECISION INSTRUMENT (1.9%)
10,000 Kronos Incorporated*.................................. 511
81,500 II-VI, Inc.*.......................................... 3,463
--------
3,974
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8
The Value Line Fund, Inc.
DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VALUE
SHARES (IN THOUSANDS)
- --------------------------------------------------------------------------------
RAILROAD (2.2%)
19,300 Canadian National Railway Co. ........................ $ 1,182
95,700 Norfolk Southern Corp. ............................... 3,463
--------
4,645
RESTAURANT (1.2%)
94,800 CKE Restaurants, Inc.* ............................... 1,376
20,400 P.F. Chang's China Bistro, Inc.*...................... 1,149
--------
2,525
RETAIL BUILDING SUPPLY (3.2%)
88,600 Building Materials Holding Corp. ..................... 3,393
81,100 Home Depot, Inc. (The)................................ 3,466
--------
6,859
RETAIL -- SPECIAL LINES (4.7%)
26,000 Aeropostale, Inc.*.................................... 765
74,600 American Eagle Outfitters, Inc. ...................... 3,514
29,200 Bed Bath & Beyond, Inc.* ............................. 1,163
38,600 Quiksilver, Inc.* .................................... 1,150
79,400 Urban Outfitters, Inc.*............................... 3,525
10,117
RETAIL STORE (2.8%)
24,200 Costco Wholesale Corp. ............................... 1,171
24,600 Kohl's Corp.*......................................... 1,210
86,300 Penney (J.C.) Co., Inc. .............................. 3,573
--------
5,954
SEMICONDUCTOR (1.7%)
88,900 Cree, Inc.* .......................................... 3,563
STEEL -- GENERAL (5.3%)
58,500 Carpenter Technology Corp. ........................... 3,420
23,400 Commercial Metals Co. ................................ 1,183
64,100 Nucor Corp. .......................................... 3,355
122,200 Steel Technologies Inc. .............................. 3,362
--------
11,320
VALUE
SHARES (IN THOUSANDS)
- --------------------------------------------------------------------------------
STEEL -- INTEGRATED (1.6%)
230,200 AK Steel Holding Corp.*............................... $ 3,331
TELECOMMUNICATION SERVICES (1.6%)
118,600 Western Wireless Corp. Class "A"*..................... 3,475
TELECOMMUNICATIONS EQUIPMENT (4.7%)
128,000 Juniper Networks, Inc.*............................... 3,480
97,100 Marvell Technology Group Ltd.*........................ 3,444
77,400 QUALCOMM, Incorporated................................ 3,282
--------
10,206
TOILETRIES/COSMETICS (0.1%)
7,800 Chattem, Inc.*........................................ 258
TRUCKING (3.2%)
25,400 Arkansas Best Corp. .................................. 1,140
52,500 Heartland Express, Inc. .............................. 1,180
77,400 Hunt (J.B.) Transport Services, Inc. ................. 3,471
20,800 Yellow Roadway Corp.*................................. 1,159
--------
6,950
WIRELESS NETWORKING (2.1%)
50,300 Itron, Inc.*.......................................... 1,203
41,100 Research In Motion Ltd.*.............................. 3,387
--------
4,590
--------
TOTAL COMMON STOCKS AND
TOTAL INVESTMENT
SECURITIES (95.5%)
(COST $173,024,000)................................................ 205,301
--------
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9
The Value Line Fund, Inc.
SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VALUE
PRINCIPAL (IN THOUSANDS
AMOUNT EXCEPT PER
(IN THOUSANDS) SHARE AMOUNT)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS (6.5%)
(INCLUDING ACCRUED INTEREST)
$8,000 Collateralized by $7,427,000
U.S. Treasury Bonds 5.50%,
due 8/15/28, with a value of
$8,174,000 (with UBS
Warburg LLC, 1.50%, dated
12/31/04, due 1/3/05,
delivery value $8,001,000)......................... $ 8,000
6,100 Collateralized by $5,895,000
U.S. Treasury Bonds
11.75%, due 2/15/10, with a
value of $6,218,000 (with
Morgan Stanley, 1.40%,
dated 12/31/04, due 1/3/05,
delivery value $6,101,000)......................... 6,100
--------
TOTAL REPURCHASE AGREEMENTS
(COST $14,100,000)................................. 14,100
--------
EXCESS OF LIABILITIES OVER
CASH AND OTHER ASSETS (-2.0%)................................. (4,376)
--------
NET ASSETS (100.0%)............................................. $215,025
========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
OUTSTANDING SHARE ($215,025,253 + 15,466,680
SHARES OF CAPITAL STOCK OUTSTANDING).......................... $ 13.90
========
* Non-income producing
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10
The Value Line Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 2004
- --------------------------------------------------------------------------------
(IN THOUSANDS
EXCEPT PER
SHARE AMOUNT)
-------------
ASSETS:
Investment securities, at value
(Cost - $173,024) ............................................. $205,301
-----------
Repurchase agreements
(Cost - $14,100) .............................................. 14,100
Cash ............................................................ 94
Receivable for securities sold .................................. 8,975
Dividends receivable ............................................ 85
Receivable for capital shares sold .............................. 32
Prepaid expenses ................................................ 4
-----------
TOTAL ASSETS ................................................ 228,591
-----------
LIABILITIES:
Payable for securities purchased ................................ 13,060
Payable for capital shares repurchased ... ...................... 252
Accrued expenses:
Advisory fee .................................................. 122
Service and distribution plan fees ............................ 45
Other ......................................................... 87
-----------
TOTAL LIABILITIES ........................................... 13,566
-----------
NET ASSETS ...................................................... $215,025
===========
NET ASSETS CONSIST OF:
Capital stock, at $1.00 par value (authorized 50,000,000,
outstanding 15,466,680 shares) ................................ $ 15,467
Additional paid-in capital ...................................... 157,213
Undistributed net investment income ............................. 8
Undistributed net realized gain on investments .................. 10,060
Net unrealized appreciation of investments ...................... 32,277
-----------
NET ASSETS ...................................................... $215,025
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER OUTSTANDING
SHARE ($215,025,253 + 15,466,680 SHARES OUTSTANDING) .......... $ 13.90
===========
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2004
- --------------------------------------------------------------------------------
(IN THOUSANDS)
--------------
INVESTMENT INCOME:
Dividends (Net of foreign withholding taxes of $12) ............. $ 1,017
Interest ........................................................ 108
-----------
Total Income ................................................ 1,125
-----------
EXPENSES:
Advisory fee .................................................... 1,377
Service and distribution plan fees .............................. 510
Transfer agent fees ............................................. 141
Auditing and legal fees ......................................... 64
Printing ........................................................ 44
Custodian fees .................................................. 44
Postage ......................................................... 38
Insurance ....................................................... 29
Registration and filing fees .................................... 23
Telephone ....................................................... 22
Directors' fees and expenses..................................... 21
-----------
Total Expenses before Custody Credits ......................... 2,313
Less: Custody Credits ......................................... (3)
-----------
Net Expenses .................................................. 2,310
-----------
NET INVESTMENT LOSS ............................................. (1,185)
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net Realized Gain ............................................. 24,093
Change in Net Unrealized Appreciation ......................... 635
-----------
NET REALIZED GAIN AND CHANGE IN NET UNREALIZED APPRECIATION
ON INVESTMENTS ................................................ 24,728
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS ...................... $23,543
===========
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
11
The Value Line Fund, Inc.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2004 2003
---------------------------------
(IN THOUSANDS)
OPERATIONS:
Net investment loss ............................................... $ (1,185) $ (397)
Net realized gain on investments .................................. 24,093 42,700
Change in net unrealized appreciation ............................. 635 (10,197)
---------------------------------
Net increase in net assets from operations ........................ 23,543 32,106
---------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain from investment transactions .................... (28,186) (22,708)
---------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares ...................................... 7,470 59,344
Proceeds from reinvestment of distributions to shareholders ....... 26,514 21,413
Cost of shares repurchased ........................................ (30,363) (80,446)
---------------------------------
Increase from capital share transactions .......................... 3,621 311
---------------------------------
TOTAL (DECREASE) INCREASE IN NET ASSETS ............................. (1,022) 9,709
NET ASSETS:
Beginning of year ................................................. 216,047 206,338
---------------------------------
End of year ....................................................... $ 215,025 $ 216,047
---------------------------------
Undistributed net investment income, end of year .................... $ 8 $ --
=================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12
The Value Line Fund, Inc.
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
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 long-term growth of capital.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements.
(A) SECURITY VALUATION. Securities listed on a securities exchange are valued at
the closing sales prices on the date as of which the net asset value is being
determined. Securities traded on the NASDAQ Stock Market are valued at the
NASDAQ Official Closing Price. 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. Short-term instruments with maturities of
60 days or less at the date of purchase are valued at amortized cost, which
approximates market value. Short-term instruments with maturities greater than
60 days at the date of purchase are valued at the mid point between the latest
available and representative asked and bit prices, and commencing 60 days prior
to maturity such securities are valued at amortized cost. Securities for which
market quotations are not readily available or that 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. In addition, the Fund may use the fair
value of a security when the closing market price on the primary exchange where
the security is traded no longer accurately reflects the value of a security due
to factors affecting one or more relevant securities markets or the specific
issuer.
(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) REPRESENTATIONS AND IDEMNIFICATIONS. In the normal course of business the
Fund enters into contract that contain a variety of representations and
warranties which provide general indemnifications. The maximum exposure under
these arrangements is unknown, as this would involve future claims that may be
made
- --------------------------------------------------------------------------------
13
The Value Line Fund, Inc.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
against the Fund that have not yet occurred. However, based on experience, the
Fund expects the risk of loss to be remote.
2. CAPITAL SHARE TRANSACTIONS, DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Transactions in capital stock were as follows (in thousands except per share
amounts):
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2004 2003
-------------------------------
Shares sold ............................. 512 4,159
Shares issued to shareholders in
reinvestment of dividends and
distributions ......................... 1,910 1,520
-------------------------------
2,422 5,679
Shares repurchased ...................... (2,117) (5,608)
-------------------------------
Net increase ............................ 305 71
===============================
Distributions per share from net
realized gains ........................ $ 2.07 $ 1.63
===============================
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities, excluding short-term securities,
were as follows:
YEAR ENDED
DECEMBER 31,
2004
------------
(IN THOUSANDS)
PURCHASES:
Investment Securities ................................. $582,663
============
SALES:
Investment Securities ................................. $610,631
============
4. INCOME TAXES
At December 31, 2004, information on the tax components of capital is as
follows:
(in thousands)
Cost of investments for tax purposes ..................... $ 187,448
=========
Gross tax unrealized appreciation ........................ $ 32,797
---------
Gross tax unrealized depreciation ........................ (844)
Net tax unrealized appreciation on investments ........... $ 31,953
=========
Undistributed ordinary income ............................ $ 10,208
---------
Undistributed long-term gains ............................ $ 184
=========
Net realized gains/losses differ for financial statement and tax purposes
primarily due to differing treatments of wash sales.
The tax composition of distributions to shareholders for the years ended
December 31, 2004 and 2003 were all from net long-term capital gains.
- --------------------------------------------------------------------------------
14
The Value Line Fund, Inc.
DECEMBER 31, 2004
- --------------------------------------------------------------------------------
5. INVESTMENT ADVISORY CONTRACT, MANAGEMENT FEES AND TRANSACTIONS WITH
AFFILIATES
An advisory fee of $1,377,000 was paid or payable to Value Line, Inc., the
"Adviser"), for the year ended December 31, 2004. This was computed at the rate
of .70% of the first $100 million of the Fund's average daily net assets plus
..65% on the excess thereof, and paid monthly. The Adviser provides research,
investment programs, supervision of the investment portfolio and pays costs of
administrative services, office space, equipment and compensation of
administrative, bookkeeping and clerical personnel necessary for managing the
affairs of the Fund. The Adviser also provides persons, satisfactory to the
Fund's Board of Directors, to act as officers and employees 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
December 31, 2004, fees amounting to $510,000 were paid or payable to the
Distributor under this Plan.
Certain officers and directors of the Adviser and its wholly owned subsidiary,
Value Line Securities, Inc. (the Fund's distributor and a registered
broker/dealer), are also officers and directors of the Fund. During the year
ended December 31, 2004, the Fund paid brokerage commissions totaling $574,000
to the Distributor, which clears its transactions through unaffiliated brokers.
For the year ended December 31, 2004, the Fund's expenses were reduced by $3,000
under a custody credit arrangement with the Custodian.
The Adviser and/or affiliated companies and the Value Line, Inc. Profit Sharing
and Savings Plan owned 474,679 shares of the Fund's capital stock, representing
3.1% of the outstanding shares at December 31, 2004.
- --------------------------------------------------------------------------------
15
The Value Line Fund, Inc.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR:
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------
2004 2003 2002 2001 2000
--------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR ............. $14.25 $13.67 $18.49 $21.37 $26.25
--------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment (loss) income ................. (.08) (.03) (.05) (.04) (.07)
Net gains or losses on securities
(both realized and unrealized) ............. 1.80 2.24 (4.64) (2.70) (3.95)
--------------------------------------------------------------------------------
Total from investment operations ............. 1.72 2.21 (4.69) (2.74) (4.02)
--------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from net realized gains ........ (2.07) (1.63) (.13) (.14) (.86)
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR ................... $13.90 $14.25 $13.67 $18.49 $21.37
--------------------------------------------------------------------------------
TOTAL RETURN ................................... 12.09% 16.28% (25.35)% (12.82)% (15.35)%
================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in thousands) ......... $215,025 $216,047 $206,338 $303,034 $386,406
Ratio of expenses to average net assets (1)..... 1.13% 1.13% 1.11% 1.04% .89%
Ratio of net investment (loss) income to
average net assets ........................... (0.58)% (0.19)% (0.31)% (.18)% (.27)%
Portfolio turnover rate ........................ 297% 129% 33% 45% 17%
(1) Ratios reflect expenses grossed up for custody credit arrangement. The
ratio of expenses to average net assets net of custody credits would have
been 1.03% for the year ended December 31, 2001, and unchanged for the
years ended December 31, 2004, 2003, 2002, and 2000.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16
The Value Line Fund, Inc.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF THE VALUE LINE 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 The Value Line Fund, Inc. (the
"Fund") at December 31, 2004, 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 of America. 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards 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
December 31, 2004 by correspondence with the custodian and brokers, provide a
reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 18, 2005
- --------------------------------------------------------------------------------
17
The Value Line Fund, Inc.
2004 TAX NOTICE TO SHAREHOLDERS (UNAUDITED)
- --------------------------------------------------------------------------------
For the year ended December 31, 2004 the Fund distributed $28,185,626 of
long-term capital gain to shareholders.
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
MANAGEMENT INFORMATION
The following table sets forth information on each Director and officer of the
Fund. Each Director serves as a director or trustee of each of the 14 Value Line
Funds and oversees a total of 15 portfolios. Each Director serves until his or
her successor is elected and qualified.
PRINCIPAL
OCCUPATION
LENGTH OF DURING THE OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE POSITION TIME SERVED PAST 5 YEARS HELD BY DIRECTOR
- ----------------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTORS*
- ---------------------
Jean Bernhard Buttner Chairman of the Since 1983 Chairman, President and Value Line, Inc.
Age 70 Board of Directors Chief Executive Officer of
and President Value Line, Inc. (the
"Adviser") and Value Line
Publishing, Inc.; Chairman
and President of each of
the 14 Value Line Funds and
Value Line Securities, Inc.
(the "Distributor").
- ----------------------------------------------------------------------------------------------------------------------------------
Marion N. Ruth Director Since 2000 Real Estate Executive: None
5 Outrider Road President, Ruth Realty (real
Rolling Hills, CA 90274 estate broker); Director of the
Age 70 Adviser since 2000.
- ----------------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED DIRECTORS
- ------------------------
John W. Chandler Director Since 1991 Consultant, Academic Search None
1611 Cold Spring Rd. Consultation Service, Inc.;
Williamstown, MA 01267 Trustee Emeritus and
Age 81 Chairman (1993-1994) of the
Board of Trustees of Duke
University; President
Emeritus, Williams College.
- ----------------------------------------------------------------------------------------------------------------------------------
Frances T. Newton Director Since 2000 Customer Support Analyst, None
4921 Buckingham Drive Duke Power Company.
Charlotte, NC 28209
Age 63
- ----------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
18
The Value Line Fund, Inc.
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
PRINCIPAL
OCCUPATION
LENGTH OF DURING THE OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE POSITION TIME SERVED PAST 5 YEARS HELD BY DIRECTOR
- ---------------------------------------------------------------------------------------------------------------------------------
Francis C. Oakley Director Since 2000 Professor of History, Berkshire Life
54 Scott Hill Road Williams College, 1961 to Insurance Company
Williamstown, MA 01267 2002; President Emeritus of America
Age 73 since 1994 and President,
1985-1994; Chairman (1993-
1997) and Interim President
(2002) of the American
Council of Learned
Societies.
- ---------------------------------------------------------------------------------------------------------------------------------
David H. Porter Director Since 1997 Visiting Professor of None
5 Birch Run Drive Classics, Williams College,
Saratoga Springs, NY 12866 since 1999; President
Age 69 Emeritus, Skidmore College
since 1999 and President,
1987-1998.
- ---------------------------------------------------------------------------------------------------------------------------------
Paul Craig Roberts Director Since 1983 Chairman, Institute for A. Schulman Inc.
169 Pompano St. Political Economy. (plastics)
Panama City Beach, FL 32413
Age 66
- ---------------------------------------------------------------------------------------------------------------------------------
Nancy-Beth Sheerr Director Since 1996 Senior Financial Advisor, None
1409 Beaumont Drive Hawthorne, since January
Gladwyne, PA 19035 2001; Chairman, Radcliffe
Age 56 College Board of Trustees,
1990-1999.
- ---------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
19
The Value Line Fund, Inc.
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
PRINCIPAL
OCCUPATION
LENGTH OF DURING THE
NAME, ADDRESS, AND AGE POSITION TIME SERVED PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------------
OFFICERS
- --------
Sigourney B. Romaine Vice President Since 2004 Portfolio Manager with the
Age 61 Adviser since 2002;
Securities Analyst with the
Adviser, 1996-2002.
- --------------------------------------------------------------------------------------------------------------------
John J. Koller Vice President Since 2004 Portfolio Manager with the
Age 36 Adviser since 2004;
Securities Analyst with the
Adviser, 2000-2004.
- --------------------------------------------------------------------------------------------------------------------
David T. Henigson Vice President, Since 1994 Director, Vice President and
Age 46 Secretary and Treasurer Compliance Officer of the
Adviser; Director and
Vice President of the
Distributor; Vice President,
Secretary, Treasurer and
Chief Compliance Officer
of each of the 14
Value Line Funds.
* Mrs. Buttner is an "interested person" as defined in the Investment Company
Act of 1940 by virtue of her positions with the Adviser and her indirect
ownership of a controlling interest in the Adviser; Mrs. Ruth is an
interested person by virtue of having been a director of the Adviser.
Unless otherwise indicated, the address for each of the above is 220 East
42nd Street, New York, NY 10017.
- --------------------------------------------------------------------------------
20
The Value Line Fund, Inc.
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The Value Line Fund, Inc.
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22
The Value Line Fund, Inc.
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23
The Value Line 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 AND GROWTH 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 -- THE 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. An investment in the Fund is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
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 the 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: The Money
Market Portfolio and The National Bond Portfolio. The fund may be subject to
state and local taxes and the Alternative Minimum Tax (if applicable).
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 the maximum income exempt from New York State, New York City and federal
income taxes while avoiding undue risk to principal. The fund may be subject to
state and local taxes and the Alternative Minimum Tax (if applicable).
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.
* 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 1-800-243-2729, 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.
- --------------------------------------------------------------------------------
24
