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 811-22965
Value Line Funds Investment Trust
(Exact name of registrant as specified in charter)
7 Times Square, New York, N.Y. 10036
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: 212-907-1900
Date of fiscal year end: September 30, 2017
Date of reporting period: March 31, 2017
Item I. Reports to Stockholders.
A copy of the Semi-Annual Report to Stockholders for the period ended 3/31/17 is included with this Form.
Value Line Defensive Strategies Fund
(A series of the Value Line Funds Investment Trust)
(obtainable from the Distributor).
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| Value Line Defensive Strategies Fund: | | | |||||
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President of the Value Line Funds
Issue | | | Shares | | | Value | | | Percentage of Net Assets | | |||||||||
Boston Partners Long/Short Equity Fund | | | | | 61,006 | | | | | $ | 1,327,487 | | | | | | 15.1% | | |
AQR Multi Strategy Alternative Fund | | | | | 136,745 | | | | | | 1,310,020 | | | | | | 14.9% | | |
Catalyst/Millburn Hedge Strategy Fund | | | | | 42,713 | | | | | | 1,300,192 | | | | | | 14.8% | | |
Lazard Global Listed Infrastructure Portfolio | | | | | 81,044 | | | | | | 1,266,713 | | | | | | 14.4% | | |
Westwood Income Opportunity Fund | | | | | 73,827 | | | | | | 1,125,855 | | | | | | 12.8% | | |
Osterweis Strategic Income Fund | | | | | 97,144 | | | | | | 1,093,846 | | | | | | 12.4% | | |
DoubleLine Total Return Bond Fund | | | | | 46,022 | | | | | | 489,208 | | | | | | 5.6% | | |
Abbey Capital Futures Strategy Fund | | | | | 34,740 | | | | | | 397,427 | | | | | | 4.5% | | |
PIMCO StocksPLUS Short Fund | | | | | 39,770 | | | | | | 379,410 | | | | | | 4.3% | | |
Total | | | | | | | | | | | | | | | | | 98.8% | | |
Schedule of Investments (unaudited) | March 31, 2017 |
| Shares | | | | | | Value | | ||||||
| OPEN-END MUTUAL FUNDS (98.8%) | | ||||||||||||
| | | | | | | ALTERNATIVE — 63.7% | | ||||||
| | | 34,740 | | | | Abbey Capital Futures Strategy Fund* | | | | $ | 397,427 | | |
| | | 136,745 | | | | AQR Multi Strategy Alternative Fund | | | | | 1,310,020 | | |
| | | 61,006 | | | | Boston Partners Long/Short Equity Fund* | | | | | 1,327,487 | | |
| | | 42,713 | | | | Catalyst/Millburn Hedge Strategy Fund | | | | | 1,300,192 | | |
| | | 81,044 | | | | Lazard Global Listed Infrastructure Portfolio | | | | | 1,266,713 | | |
| | | | | | | | | | | | 5,601,839 | | |
| | | | | | | EQUITY — 4.3% | | ||||||
| | | 39,770 | | | | PIMCO StocksPLUS Short Fund* | | | | | 379,410 | | |
| | | | | | | FIXED INCOME — 18.0% | | ||||||
| | | 46,022 | | | | DoubleLine Total Return Bond Fund | | | | | 489,208 | | |
| | | 97,144 | | | | Osterweis Strategic Income Fund | | | | | 1,093,846 | | |
| | | | | | | | | | | | 1,583,054 | | |
| Shares | | | | | | Value | | ||||||
| | | | | | | MIXED ALLOCATION — 12.8% | | ||||||
| | | 73,827 | | | | Westwood Income Opportunity Fund | | | | $ | 1,125,855 | | |
| TOTAL OPEN-END MUTUAL FUNDS (Cost $8,428,532) (98.8%) | | | | | 8,690,158 | | | ||||||
| SHORT-TERM INVESTMENT (1.3%) | | ||||||||||||
| | | | | | | MONEY MARKET FUND (1.3%) | | ||||||
| | | 115,150 | | | | State Street Institutional Liquid Reserves Fund | | | | | 115,162 | | |
| TOTAL SHORT-TERM INVESTMENTS (Cost $115,162) (1.3%) | | | | | 115,162 | | | ||||||
| TOTAL INVESTMENT SECURITIES (100.1%) (Cost $8,543,694) | | | | $ | 8,805,320 | | | ||||||
| EXCESS OF LIABILITIES OVER CASH AND OTHER ASSETS (-0.1%) | | | | | (11,671) | | | ||||||
| NET ASSETS (100%) | | | | $ | 8,793,649 | | |
Investments in Securities: | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Assets | | | | | | ||||||||||||||||||||
Open-End Mutual Funds** | | | | $ | 8,690,158 | | | | | $ | — | | | | | $ | — | | | | | $ | 8,690,158 | | |
Short-Term Investment | | | | | 115,162 | | | | | | — | | | | | | — | | | | | | 115,162 | | |
Total Investments in Securities | | | | $ | 8,805,320 | | | | | $ | — | | | | | $ | — | | | | | $ | 8,805,320 | | |
| Assets: | | | |||||
| Investment securities, at value (Cost − $8,543,694) | | | | $ | 8,805,320 | | |
| Receivable from Adviser | | | | | 11,127 | | |
| Dividends receivable | | | | | 5,789 | | |
| Other receivables | | | | | 16,115 | | |
| Total Assets | | | | | 8,838,351 | | |
| Liabilities: | | | |||||
| Payable for capital shares redeemed | | | | | 14,508 | | |
| Accrued expenses: | | | |||||
| Custody and accounting fees payable | | | | | 9,273 | | |
| Management fee | | | | | 1,518 | | |
| Audit fee payable | | | | | 8,769 | | |
| Administration fee payable | | | | | 6,550 | | |
| Directors’ fees and expenses | | | | | 359 | | |
| Other | | | | | 3,725 | | |
| Total Liabilities | | | | | 44,702 | | |
| Net Assets | | | | $ | 8,793,649 | | |
| Net assets consist of: | | | |||||
| Capital stock, at $0.001 par value (authorized unlimited shares) | | | | $ | 94 | | |
| Additional paid-in capital | | | | | 11,255,950 | | |
| Undistributed net investment income | | | | | 2,428 | | |
| Accumulated net realized loss on investments | | | | | (2,726,449) | | |
| Net unrealized appreciation of investments | | | | | 261,626 | | |
| Net Assets | | | | $ | 8,793,649 | | |
| Net Asset Value Per Share | | | |||||
| Investor Class | | | |||||
| Net Assets | | | | $ | 614,541 | | |
| Shares Outstanding | | | | | 66,011 | | |
| Net Asset Value, Offering and Redemption Price per Outstanding Share | | | | $ | 9.31 | | |
| Institutional Class | | | |||||
| Net Assets | | | | $ | 8,179,108 | | |
| Shares Outstanding | | | | | 878,545 | | |
| Net Asset Value, Offering and Redemption Price per Outstanding Share | | | | $ | 9.31 | | |
for the Six Months Ended March 31, 2017 (unaudited)
| Investment Income: | | | |||||
| Dividends | | | | $ | 146,922 | | |
| Interest | | | | | 36 | | |
| Total Income | | | | | 146,958 | | |
| Expenses: | | | |||||
| Advisory fee | | | | | 26,176 | | |
| Management fee | | | | | 11,634 | | |
| Service and distribution plan fees | | | | | 676 | | |
| Sub-transfer agent fees | | | | | 144 | | |
| Administration fees | | | | | 23,801 | | |
| Transfer agent fees | | | | | 21,340 | | |
| Custody and accounting fees | | | | | 20,945 | | |
| Registration and filing fees | | | | | 19,945 | | |
| Printing and postage | | | | | 6,175 | | |
| Auditing and legal fees | | | | | 4,823 | | |
| Professional fees | | | | | 3,643 | | |
| Directors’ fees and expenses | | | | | 1,540 | | |
| Insurance | | | | | 515 | | |
| Other | | | | | 806 | | |
| Total Expenses Before Fees Waived and Expenses Reimbursed (See Note 4) | | | | | 142,163 | | |
| Less: Advisory, Management and Distributor Fees Waived and Expenses Reimbursed | | | | | (71,542) | | |
| Less: Sub-transfer Agent Fees Waived | | | | | (144) | | |
| Net Expenses | | | | | 70,477 | | |
| Net Investment Income | | | | | 76,481 | | |
| Net Realized and Unrealized Gain/(Loss) on Investments: | | | |||||
| Net Realized Gain From: | | | |||||
| Investments | | | | | 214,051 | | |
| Change in Net Unrealized Appreciation/(Depreciation) of: | | | |||||
| Investments | | | | | (1,401) | | |
| Net Realized Gain and Change in Net Unrealized Appreciation/(Depreciation) on Investments | | | | | 212,650 | | |
| Net Increase in Net Assets from Operations | | | | $ | 289,131 | | |
| | | Six Months Ended March 31, 2017 (Unaudited) | | | Year Ended September 30, 2016 | | ||||||
Operations: | | | | ||||||||||
Net investment income | | | | $ | 76,481 | | | | | $ | 95,502 | | |
Net realized gain/(loss) on investments | | | | | 214,051 | | | | | | (730,494) | | |
Capital gain distributions from underlying funds | | | | | — | | | | | | 3,100 | | |
Change in net unrealized appreciation/(depreciation) on investments | | | | | (1,401) | | | | | | 178,361 | | |
Net increase/(decrease) in net assets from operations | | | | | 289,131 | | | | | | (453,531) | | |
Distributions to Shareholders from: | | | | ||||||||||
Net investment income | | | | ||||||||||
Investor Class(1) | | | | | (3,945) | | | | | | — | | |
Institutional Class | | | | | (113,588) | | | | | | (298,085) | | |
| | | | | (117,533) | | | | | | (298,085) | | |
Share Transactions: | | | | ||||||||||
Proceeds from sale of shares | | | | ||||||||||
Investor Class(1) | | | | | 251,000 | | | | | | 444,969 | | |
Institutional Class | | | | | 44,162 | | | | | | 3,118,350 | | |
Proceeds from reinvestment of dividends to shareholders | | | | ||||||||||
Investor Class(1) | | | | | 3,945 | | | | | | — | | |
Institutional Class | | | | | 113,495 | | | | | | 298,085 | | |
Cost of shares redeemed | | | | ||||||||||
Investor Class(1) | | | | | (91,133) | | | | | | (2,489) | | |
Institutional Class | | | | | (4,836,770) | | | | | | (10,725,800) | | |
Net decrease in net assets from fund share transactions | | | | | (4,515,301) | | | | | | (6,866,885) | | |
Total decrease in net assets | | | | | (4,343,703) | | | | | | (7,618,501) | | |
Net Assets: | | | | ||||||||||
Beginning of period | | | | | 13,137,352 | | | | | | 20,755,853 | | |
End of period | | | | $ | 8,793,649 | | | | | $ | 13,137,352 | | |
Undistributed net investment income included in net assets, at end of period | | | | $ | 2,428 | | | | | $ | 43,480 | | |
Capital Share Transactions: | | | | ||||||||||
Shares sold | | | | ||||||||||
Investor Class(1) | | | | | 27,241 | | | | | | 48,516 | | |
Institutional Class | | | | | 4,762 | | | | | | 335,667 | | |
Shares issued to shareholders in reinvestment of dividends | | | | ||||||||||
Investor Class(1) | | | | | 431 | | | | | | — | | |
Institutional Class | | | | | 12,409 | | | | | | 32,436 | | |
Shares redeemed | | | | ||||||||||
Investor Class(1) | | | | | (9,905) | | | | | | (272) | | |
Institutional Class | | | | | (523,048) | | | | | | (1,167,627) | | |
Net decrease | | | | | (488,110) | | | | | | (751,280) | | |
| | | Value Line Defensive Strategies Fund Investor Class | | |||||||||
| | | Six Months Ended March 31, 2017 (unaudited) | | | June 13, 2016(1) to September 30, 2016 | | ||||||
Net asset value, beginning of period | | | | $ | 9.16 | | | | | $ | 9.14 | | |
Income/(loss) from investment operations: | | | | ||||||||||
Net investment income(2)(3) | | | | | 0.05 | | | | | | 0.02 | | |
Net gains/(losses) on securities (both realized and unrealized) | | | | | 0.17 | | | | | | (0.00)(4) | | |
Total from investment operations | | | | | 0.22 | | | | | | 0.02 | | |
Less distributions: | | | | ||||||||||
Dividends from net investment income | | | | | (0.07) | | | | | | — | | |
Total Distributions | | | | | (0.07) | | | | | | — | | |
Net asset value, end of period | | | | $ | 9.31 | | | | | $ | 9.16 | | |
Total return | | | | | 2.45%(5) | | | | | | 0.22%(5) | | |
Ratios/Supplemental Data: | | | | ||||||||||
Net assets, end of period (in thousands) | | | | $ | 615 | | | | | $ | 442 | | |
Ratio of gross expenses to average net assets(6)(7) | | | | | 8.78%(8) | | | | | | 5.82%(8) | | |
Ratio of net expenses to average net assets(6)(9) | | | | | 1.45%(8) | | | | | | 1.45%(8) | | |
Ratio of net investment income to average net assets(3) | | | | | 1.03%(8) | | | | | | 0.58%(8) | | |
Portfolio turnover rate | | | | | 53%(5) | | | | | | 268%(5) | | |
| | | Value Line Defensive Strategies Fund Institutional Class | | |||||||||||||||||||||||||||||||||
| | | Six Months Ended March 31, 2017 (unaudited) | | | Years Ended September 30, | | ||||||||||||||||||||||||||||||
| | | 2016 | | | 2015(8) | | | 2014(8) | | | 2013(8) | | | 2012(8) | | |||||||||||||||||||||
Net asset value, beginning of period | | | | $ | 9.17 | | | | | $ | 9.50 | | | | | $ | 10.28 | | | | | $ | 9.95 | | | | | $ | 10.22 | | | | | $ | 9.88 | | |
Income/(loss) from investment operations: | | | | | | | | ||||||||||||||||||||||||||||||
Net investment income(1)(2) | | | | | 0.06 | | | | | | 0.05 | | | | | | 0.25 | | | | | | 0.09 | | | | | | 0.12 | | | | | | 0.26 | | |
Net gains/(losses) on securities (both realized and unrealized) | | | | | 0.17 | | | | | | (0.23) | | | | | | (0.76) | | | | | | 0.37 | | | | | | (0.23) | | | | | | 0.43 | | |
Total from investment operations | | | | | 0.23 | | | | | | (0.18) | | | | | | (0.51) | | | | | | 0.46 | | | | | | (0.11) | | | | | | 0.69 | | |
Less distributions: | | | | | | | | ||||||||||||||||||||||||||||||
Dividends from net investment income | | | | | (0.09) | | | | | | (0.15) | | | | | | (0.27) | | | | | | (0.13) | | | | | | (0.16) | | | | | | (0.35) | | |
Total distributions | | | | | (0.09) | | | | | | (0.15) | | | | | | (0.27) | | | | | | (0.13) | | | | | | (0.16) | | | | | | (0.35) | | |
Net asset value, end of period | | | | $ | 9.31 | | | | | $ | 9.17 | | | | | $ | 9.50 | | | | | $ | 10.28 | | | | | $ | 9.95 | | | | | $ | 10.22 | | |
Total return | | | | | 2.52%(3) | | | | | | (1.92)% | | | | | | (5.10)% | | | | | | 4.65% | | | | | | (1.07)% | | | | | | 7.13% | | |
Ratios/Supplemental Data: | | | | | | | | ||||||||||||||||||||||||||||||
Net assets, end of period (in thousands) | | | | $ | 8,179 | | | | | $ | 12,695 | | | | | $ | 20,756 | | | | | $ | 37,579 | | | | | $ | 28,130 | | | | | $ | 15,950 | | |
Ratio of gross expenses to average net assets(4) | | | | | 2.14%(5)(6) | | | | | | 1.61%(5) | | | | | | 1.21%(5) | | | | | | 1.18%(5) | | | | | | 1.33%(5) | | | | | | 2.24%(5) | | |
Ratio of net expenses to average net assets(4) | | | | | 1.20%(6)(7) | | | | | | 1.24%(7) | | | | | | 1.25%(7) | | | | | | 1.25%(7) | | | | | | 1.25%(7) | | | | | | 1.25%(7) | | |
Ratio of net investment income to average net assets(2) | | | | | 1.34%(6) | | | | | | 0.54% | | | | | | 2.57% | | | | | | 0.93% | | | | | | 1.19% | | | | | | 2.64% | | |
Portfolio turnover rate | | | | | 53%(3) | | | | | | 268% | | | | | | 124% | | | | | | 103% | | | | | | 152% | | | | | | 128% | | |
| | | Investor Class | | | Institutional Class | | | Total | | |||||||||
Value Line Defensive Strategies Fund | | | | | |||||||||||||||
Registration and filing fees | | | | $ | 7,978 | | | | | $ | 11,967 | | | | | $ | 19,945 | | |
Transfer agent fees | | | | | 10,146 | | | | | | 11,194 | | | | | | 21,340 | | |
Sub-transfer agent fees | | | | | — | | | | | | 144 | | | | | | 144 | | |
Other | | | | | 227 | | | | | | 1,228 | | | | | | 1,455 | | |
| | | Six Months Ended March 31, 2017 (unaudited) | | |||
PURCHASES: | | | |||||
Investment Securities | | | | $ | 6,050,000 | | |
SALES: | | | |||||
Investment Securities | | | | $ | 10,312,180 | | |
| Cost of investments for tax purposes | | | | $ | 8,543,694 | | |
| Gross tax unrealized appreciation | | | | $ | 301,858 | | |
| Gross tax unrealized depreciation | | | | | 40,232 | | |
| Net tax unrealized appreciation on investments | | | | $ | 261,626 | | |
Expiration | | | Fees Waived and Reimbursed by the Adviser | | | Fees Waived and Reimbursed by the Manager | | | Fees Waived and Reimbursed by the Distributor | | |||||||||
September 30, 2019 | | | | $ | 12,137 | | | | | $ | 17,606 | | | | | $ | 78 | | |
September 30, 2020 | | | | | 25,531 | | | | | | 45,335 | | | | | | 676 | | |
Date of Reorganization | | | Surviving Fund | | | Shares Issued In Acquisition | | | Net Assets Before Reorganization | | | Net Assets After Reorganization | | |||||||||
6-10-16 | | | Value Line Defensive Strategies Fund | | | | | 2,025,680 | | | | | $ | — | | | | | $ | 18,655,396 | | |
Date of Reorganization | | | Acquired Fund | | | Shares Outstanding | | | Acquired Fund Net Assets | | | Acquired Fund Unrealized Appreciation | | |||||||||
6-10-16 | | | Alpha Defensive Alternatives Fund | | | | | 2,025,680 | | | | | $ | 18,655,396 | | | | | $ | 447,105 | | |
| | | Beginning account value 10/01/16 | | | Ending account value 03/31/17 | | | Expenses paid during the period 10/01/16 thru 03/31/17* | | | Annualized Expense Ratio | | ||||||||||||
Actual | | | | | | ||||||||||||||||||||
Investor Class | | | | $ | 1,000.00 | | | | | $ | 1,024.50 | | | | | $ | 7.32 | | | | | | 1.45% | | |
Institutional Class | | | | | 1,000.00 | | | | | | 1,025.20 | | | | | | 6.06 | | | | | | 1.20% | | |
Hypothetical (5% return before expenses) | | | | | | ||||||||||||||||||||
Investor Class | | | | | 1,000.00 | | | | | | 1,017.70 | | | | | | 7.29 | | | | | | 1.45% | | |
Institutional Class | | | | | 1,000.00 | | | | | | 1,018.95 | | | | | | 6.04 | | | | | | 1.20% | | |
Item 5. Audit Committee of Listed Registrants
Not Applicable.
Item 6. Investments
Not Applicable
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not Applicable
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not Applicable
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not Applicable
Item 10. Submission of Matters to a Vote of Security Holders
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) | (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 | /s/ Mitchell E. Appel | |
Mitchell E. Appel, President |
Date: | June 5, 2017 |
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: | /s/ Mitchell E. Appel | |
Mitchell E. Appel, President, Principal Executive Officer | ||
By: | /s/ Emily D. Washington | |
Emily D. Washington, Treasurer, Principal Financial Officer |
Date: | June 5, 2017 |