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 _811-4471_
Value Line Aggressive Income Trust
(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: January 31, 2009
Date of reporting period: July 31, 2008
Item I. Reports to Stockholders.
| A copy of the Semi -Annual Report to Stockholders for the period ended 7/31/08 |
is included with this Form.
INVESTMENT ADVISER | EULAV Asset Management, LLC (A Wholly-Owned Subsidiary of 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 SERVICING AGENT | State Street Bank and Trust Co. c/o BFDS P.O. Box 219729 Kansas City, MO 64121-9729 | |||||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | PricewaterhouseCoopers LLP 300 Madison Avenue New York, NY 10017 | |||||
LEGAL COUNSEL | Peter D. Lowenstein, Esq. 496 Valley Road Cos Cob, CT 06807 | |||||
TRUSTEES | John W. Chandler Frances T. Newton Francis C. Oakley David H. Porter Paul Craig Roberts Thomas T. Sarkany Nancy-Beth Sheerr | |||||
OFFICERS | Mitchell E. Appel President Howard A. Brecher Vice President and Secretary Emily D. Washington Treasurer |
#542154 |
SEMI-ANNUAL REPORT
July 31, 2008
Aggressive
Income Trust
Mitchell Appel, President
(1) | The Lipper High Current Yield Bond Funds Average aims at high (relative) current yield from fixed income securities, has no quality or maturity restrictions, and tends to invest in lower grade debt issues. An investment cannot be made in Peer Group Average. |
(2) | The Lehman Brothers U.S. Corporate High Yield Index is representative of the broad based fixed-income market. It includes non-investment grade corporate bonds. The returns for the Index do not reflect charges, expenses, or taxes, and it is not possible to directly invest in this unmanaged Index. |
2
3
TRUST EXPENSES (unaudited):
Beginning account value 2/1/08 | Ending account value 7/31/08 | Expenses* paid during period 2/1/08 thru 7/31/08 | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Actual | $ | 1,000.00 | $ | 1,007.90 | $ | 4.74 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.14 | $ | 4.77 |
* | Expenses are equal to the Trust’s annualized expense ratio of 0.95%, multiplied by the average account value over the period, multiplied by 182/366 to reflect the one-half year period. This expense ratio may differ from the expense ratio shown in the Financial Highlights. |
4
Issue | | Par Value | | Value | | Percentage of Net Assets | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gulfmark Offshore, Inc., Guaranteed Notes, 7.75%, 7/15/14 | $ | 1,100,000 | $ | 1,083,500 | 3.46 | % | ||||||||
Phillips-Van Heusen Corp., Senior Notes, 7.25%, 2/15/11 | $ | 750,000 | $ | 750,000 | 2.39 | % | ||||||||
Stone Energy Corp., Senior Subordinated Notes, 8.25%, 12/15/11 | $ | 700,000 | $ | 682,500 | 2.18 | % | ||||||||
Williams Companies, Inc., Notes, 7.13%, 9/1/11 | $ | 600,000 | $ | 624,000 | 1.99 | % | ||||||||
CHC Helicopter Corp., Senior Subordinated Notes, 7.38%, 5/1/14 | $ | 600,000 | $ | 623,250 | 1.99 | % | ||||||||
NBTY, Inc., Senior Subordinated Notes, 7.13%, 10/1/15 | $ | 600,000 | $ | 564,000 | 1.80 | % | ||||||||
Citizens Communications Co., Notes, 9.25%, 5/15/11 | $ | 500,000 | $ | 520,000 | 1.66 | % | ||||||||
Ferrellgas Escrow LLC/Ferrellgas Finance Escrow Corp., Senior Notes, 6.75%, 5/1/14 | $ | 600,000 | $ | 507,000 | 1.62 | % | ||||||||
Celestica, Inc., Senior Subordinated Notes, 7.88%, 7/1/11 | $ | 500,000 | $ | 502,500 | 1.60 | % | ||||||||
Sensient Technologies Corp., 6.50%, 4/1/09 | $ | 500,000 | $ | 500,012 | 1.60 | % |
5
Principal Amount | | | Value | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
CONVERTIBLE CORPORATE BONDS & NOTES (2.5%) | |||||||||||
COMPUTER SOFTWARE & SERVICES (1.3%) | |||||||||||
$ 400,000 | Electronic Data Systems Corp. 3.88%, 7/15/23 | $ | 399,000 | ||||||||
SEMICONDUCTOR (0.5%) | |||||||||||
200,000 | Yingli Green Energy Holding Co. Ltd. 0.0% 12/15/12 (1) | 169,750 | |||||||||
TELECOMMUNICATION SERVICES (0.7%) | |||||||||||
250,000 | NII Holdings, Inc. 3.13%, 6/15/12 | 214,375 | |||||||||
TOTAL CONVERTIBLE CORPORATE BONDS & NOTES (Cost $791,723) | 783,125 | ||||||||||
CORPORATE BONDS & NOTES (85.0%) | |||||||||||
AEROSPACE/DEFENSE (1.1%) | |||||||||||
350,000 | Alliant Techsystems, Inc., Senior Subordinated Notes, 6.75%, 4/1/16 | 336,875 | |||||||||
AIR TRANSPORT (2.0%) | |||||||||||
600,000 | CHC Helicopter Corp., Senior Subordinated Notes, 7.38%, 5/1/14 | 623,250 | |||||||||
AUTO & TRUCK (1.5%) | |||||||||||
500,000 | Ford Motor Co., Global Landmark Securities, 7.45%, 7/16/31 | 260,000 | |||||||||
400,000 | General Motors Corp., Debentures, 8.25%, 7/15/23 | 198,000 | |||||||||
458,000 | |||||||||||
AUTO PARTS (1.7%) | |||||||||||
300,000 | ArvinMeritor, Inc., Senior Notes, 8.13%, 9/15/15 | 244,875 | |||||||||
350,000 | Lear Corp., Senior Notes Ser. B, 8.75%, 12/1/16 | 276,500 | |||||||||
521,375 | |||||||||||
CABLE TV (1.2%) | |||||||||||
400,000 | MediaCom LLC, Senior Notes, 9.50%, 1/15/13 | 378,000 | |||||||||
CHEMICAL — SPECIALTY (1.6%) | |||||||||||
$ 500,000 | PolyOne Corp., Senior Notes, 8.88%, 5/1/12 | $ | 497,500 | ||||||||
COMPUTER & PERIPHERALS (1.5%) | |||||||||||
500,000 | Unisys Corp., Senior Notes, 6.88%, 3/15/10 | 480,000 | |||||||||
DRUG (1.5%) | |||||||||||
500,000 | Elan Finance PLC, Senior Notes, 7.75%, 11/15/11 | 478,750 | |||||||||
ELECTRICAL EQUIPMENT (2.5%) | |||||||||||
400,000 | Baldor Electric Co., Senior Notes, 8.63%, 2/15/17 | 401,000 | |||||||||
400,000 | General Cable Corp., Senior Notes, 7.13%, 4/1/17 | 378,000 | |||||||||
779,000 | |||||||||||
ELECTRICAL UTILITY — CENTRAL (1.0%) | |||||||||||
300,000 | Texas Competitive Electric Holdings Co. LLC, 10.25%, 11/1/15 (2) | 300,000 | |||||||||
ELECTRICAL UTILITY — EAST (1.2%) | |||||||||||
400,000 | NRG Energy, Inc., Senior Notes, 7.38%, 2/1/16 | 388,000 | |||||||||
ELECTRONICS (1.6%) | |||||||||||
500,000 | Celestica, Inc., Senior Subordinated Notes, 7.88%, 7/1/11 | 502,500 | |||||||||
ENTERTAINMENT (4.0%) | |||||||||||
500,000 | EchoStar DBS Corp., Senior Notes, 6.63%, 10/1/14 | 458,750 | |||||||||
400,000 | Hughes Network Systems LLC, Senior Notes, 9.50%, 4/15/14 | 404,500 | |||||||||
400,000 | XM Satellite Radio Holdings, Inc., Senior Notes, 9.75%, 5/1/14 | 400,000 | |||||||||
1,263,250 | |||||||||||
ENVIRONMENTAL (1.3%) | |||||||||||
400,000 | Allied Waste North America, Inc., Senior Notes, 7.88%, 4/15/13 | 407,000 | |||||||||
FINANCIAL SERVICES (0.9%) | |||||||||||
350,000 | Broadridge Financial Solutions, Inc., 6.13%, 6/1/17 | 295,542 |
6
Principal Amount | | | Value | |||||||
---|---|---|---|---|---|---|---|---|---|---|
FOOD PROCESSING (4.5%) | ||||||||||
$ 300,000 | Chiquita Brands International, Inc., Senior Notes, 7.50%, 11/1/14 | $ | 243,750 | |||||||
300,000 | Dean Foods Co., Senior Notes, 7.00%, 6/1/16 | 271,500 | ||||||||
500,000 | Pilgrim’s Pride Corp., Senior Subordinated Notes, 8.38%, 5/1/17 | 382,500 | ||||||||
500,000 | Sensient Technologies Corp., 6.50%, 4/1/09 | 500,012 | ||||||||
1,397,762 | ||||||||||
HOME BUILDING (1.2%) | ||||||||||
400,000 | Toll Corp., Senior Subordinated Notes, 8.25%, 2/1/11 | 384,000 | ||||||||
HOTEL/GAMING (3.1%) | ||||||||||
500,000 | Boyd Gaming Corp., Senior Subordinated Notes, 6.75%, 4/15/14 | 367,500 | ||||||||
350,000 | Las Vegas Sands Corp., Senior Notes, 6.38%, 2/15/15 | 267,750 | ||||||||
400,000 | MGM Mirage, Senior Notes, 6.75%, 4/1/13 | 334,000 | ||||||||
969,250 | ||||||||||
MACHINERY (3.1%) | ||||||||||
350,000 | Case New Holland, Inc., Senior Notes, 7.13%, 3/1/14 | 338,625 | ||||||||
400,000 | Terex Corp., Senior Subordinated Notes, 8.00%, 11/15/17 | 391,000 | ||||||||
300,000 | United Rentals North America, Inc., 7.75%, 11/15/13 | 241,500 | ||||||||
971,125 | ||||||||||
MEDICAL SERVICES (2.4%) | ||||||||||
400,000 | Community Health Systems, Inc., Senior Notes, 8.88%, 7/15/15 | 403,000 | ||||||||
350,000 | Psychiatric Solutions, Inc., Senior Subordinated Notes, 7.75%, 7/15/15 | 342,125 | ||||||||
745,125 | ||||||||||
NATURAL GAS — DISTRIBUTION (4.2%) | ||||||||||
$ 350,000 | AmeriGas Partners LP, Senior Notes, 7.25%, 5/20/15 | $ | 323,750 | |||||||
500,000 | Berry Petroleum Co., Senior Subordinated Notes, 8.25%, 11/1/16 | 492,500 | ||||||||
600,000 | Ferrellgas Escrow LLC/Ferrellgas Finance Escrow Corp., Senior Notes, 6.75%, 5/1/14 | 507,000 | ||||||||
1,323,250 | ||||||||||
NATURAL GAS — DIVERSIFIED (3.1%) | ||||||||||
350,000 | Dynegy Holdings, Inc., Senior Notes, 7.50%, 6/1/15 | 331,625 | ||||||||
600,000 | Williams Companies, Inc., Notes, 7.13%, 9/1/11 | 624,000 | ||||||||
955,625 | ||||||||||
OILFIELD SERVICES/EQUIPMENT (8.8%) | ||||||||||
500,000 | Basic Energy Services, Inc., Senior Notes, 7.13%, 4/15/16 | 467,500 | ||||||||
1,100,000 | Gulfmark Offshore, Inc., Guaranteed Notes, 7.75%, 7/15/14 | 1,083,500 | ||||||||
250,000 | North American Energy Partners, Inc., 8.75%, 12/1/11 | 251,250 | ||||||||
500,000 | W&T Offshore, Inc., Senior Notes, 8.25%, 6/15/14 (2) | 470,000 | ||||||||
500,000 | Whiting Petroleum Corp., Senior Notes, 7.25%, 5/1/13 | 488,750 | ||||||||
2,761,000 | ||||||||||
PETROLEUM — INTEGRATED (1.0%) | ||||||||||
350,000 | Tesoro Corp., Notes, 6.50%, 6/1/17 | 297,500 |
7
Principal Amount | | | Value | |||||||
---|---|---|---|---|---|---|---|---|---|---|
PETROLEUM — PRODUCING (10.3%) | ||||||||||
$ 350,000 | Cimarex Energy Co., Senior Notes, 7.13%, 5/1/17 | $ | 344,750 | |||||||
500,000 | Encore Acquisition Co., Senior Subordinated Notes, 6.25%, 4/15/14 | 468,750 | ||||||||
500,000 | KCS Energy, Inc., Senior Notes, 7.13%, 4/1/12 | 480,000 | ||||||||
428,000 | PetroQuest Energy, Inc., Senior Notes, 10.38%, 5/15/12 | 440,840 | ||||||||
500,000 | Plains Exploration & Production Co., Senior Notes, 7.75%, 6/15/15 | 491,250 | ||||||||
325,000 | Regency Energy Partners LP/Regency Energy Finance Corp., Senior Notes, 8.38%, 12/15/13 | 331,500 | ||||||||
700,000 | Stone Energy Corp., Senior Subordinated Notes, 8.25%, 12/15/11 | 682,500 | ||||||||
3,239,590 | ||||||||||
POWER (1.1%) | ||||||||||
350,000 | Reliant Energy, Inc., Senior Notes, 7.63%, 6/15/14 | 337,750 | ||||||||
RENTAL AUTO/EQUIPMENT (0.9%) | ||||||||||
300,000 | Hertz Corp., 8.88%, 1/1/14 | 275,250 | ||||||||
RETAIL — AUTOMOTIVE (1.3%) | ||||||||||
500,000 | PEP Boys-Manny Moe & Jack, Senior Subordinated Notes, 7.50%, 12/15/14 | 415,000 | ||||||||
RETAIL — SPECIAL LINES (4.2%) | ||||||||||
600,000 | NBTY, Inc., Senior Subordinated Notes, 7.13%, 10/1/15 | 564,000 | ||||||||
750,000 | Phillips-Van Heusen Corp., Senior Notes, 7.25%, 2/15/11 | 750,000 | ||||||||
1,314,000 | ||||||||||
RETAIL STORE (1.2%) | ||||||||||
$ 410,000 | Dillard’s, Inc., Notes, 7.85%, 10/1/12 | $ | 385,400 | |||||||
SEMICONDUCTOR (0.5%) | ||||||||||
200,000 | Advanced Micro Devices, Inc., Senior Notes, 7.75%, 11/1/12 | 152,000 | ||||||||
SHOE (1.4%) | ||||||||||
500,000 | Payless ShoeSource, Inc., Senior Subordinated Notes, 8.25%, 8/1/13 | 450,000 | ||||||||
TELECOMMUNICATION SERVICES (6.5%) | ||||||||||
500,000 | Alamosa Delaware, Inc., Senior Notes, 8.50%, 1/31/12 | 490,000 | ||||||||
500,000 | Citizens Communications Co., Notes, 9.25%, 5/15/11 | 520,000 | ||||||||
350,000 | Cricket Communications, Inc., 9.38%, 11/1/14 | 343,000 | ||||||||
350,000 | Sprint Capital Corp., 8.38%, 3/15/12 | 343,875 | ||||||||
350,000 | Windstream Corp., Senior Notes, 8.13%, 8/1/13 | 353,500 | ||||||||
2,050,375 | ||||||||||
TRUCKING (1.6%) | ||||||||||
500,000 | Roadway Corp., Guaranteed Notes, 8.25%, 12/1/08 | 498,750 | ||||||||
TOTAL CORPORATE BONDS & NOTES (Cost $27,738,604) | 26,631,794 |
8
Shares | | | Value | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
PREFERRED STOCKS (0.2%) | ||||||||||||
R.E.I.T. (0.2%) | ||||||||||||
3,000 | Health Care REIT, Inc. Series F 7 5/8% | $ | 67,350 | |||||||||
TOTAL PREFERRED STOCKS (Cost $75,000) | 67,350 | |||||||||||
COMMON STOCKS (1.4%) | ||||||||||||
COMPUTER & PERIPHERALS (0.0%) | ||||||||||||
4,000 | Unisys Corp.* | 14,760 | ||||||||||
ELECTRICAL UTILITY — WEST (0.3%) | ||||||||||||
5,000 | Xcel Energy, Inc. | 100,300 | ||||||||||
FINANCIAL SERVICES — DIVERSIFIED (0.2%) | ||||||||||||
3,000 | Citigroup, Inc. | 56,070 | ||||||||||
OIL/GAS DISTRIBUTION (0.3%) | ||||||||||||
2,000 | Energy Transfer Partners L.P. | 85,520 | ||||||||||
PETROLEUM — INTEGRATED (0.3%) | ||||||||||||
1,500 | BP PLC ADR | 92,160 | ||||||||||
R.E.I.T. (0.3%) | ||||||||||||
4,000 | Hospitality Properties Trust | 85,200 | ||||||||||
TOTAL COMMON STOCKS (Cost $486,968) | 434,010 | |||||||||||
TOTAL INVESTMENT SECURITIES (89.1%) (Cost $29,092,295) | 27,916,279 |
Principal Amount | | | Value | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
REPURCHASE AGREEMENTS (9.0%) | |||||||||||
$1,500,000 | With Morgan Stanley, 1.90%, dated 7/31/08, due 8/1/08, delivery value $1,500,079 (collateralized by $1,540,000 U.S. Treasury Bonds 4.50%, due 2/15/36, with a value of $1,548,935) | $ | 1,500,000 | ||||||||
1,300,000 | With State Street Bank & Trust, 1.54%, dated 7/31/08, due 8/1/08, delivery value $1,300,056 (collateralized by $1,335,000 U.S. Treasury Bills 1.75%, due 12/11/08, with a value of $1,326,320) | 1,300,000 | |||||||||
TOTAL REPURCHASE AGREEMENTS (Cost $2,800,000) | 2,800,000 | ||||||||||
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES (1.9%) | 606,699 | ||||||||||
NET ASSETS (100%) | $ | 31,322,978 | |||||||||
NET ASSET VALUE OFFERING AND REDEMPTION PRICE, PER OUTSTANDING SHARE ($31,322,978 ÷ 6,643,827 shares outstanding) | $ | 4.71 |
* | Non-income producing. |
(1) | Zero-coupon bond. |
(2) | Pursuant to Rule 144A under the Securities Act of 1933, this security can only be sold to qualified institutional investors. |
9
at July 31, 2008 (unaudited)
Assets: | ||||||
---|---|---|---|---|---|---|
Investment securities, at value (Cost — $29,092,295) | $ | 27,916,279 | ||||
Repurchase agreements (Cost — $2,800,000) | 2,800,000 | |||||
Cash | 92,821 | |||||
Interest and dividends receivable | 544,423 | |||||
Receivable for securities sold | 61,290 | |||||
Receivable for trust shares sold | 22,000 | |||||
Prepaid expenses | 9,805 | |||||
Total Assets | 31,446,618 | |||||
Liabilities: | ||||||
Payable for trust shares repurchased | 48,429 | |||||
Dividends payable to shareholders | 42,028 | |||||
Accrued expenses: | ||||||
Advisory fee | 9,476 | |||||
Service and distribution plan fees | 4,046 | |||||
Trustees’ fees and expenses | 726 | |||||
Other | 18,935 | |||||
Total Liabilities | 123,640 | |||||
Net Assets | $ | 31,322,978 | ||||
Net assets consist of: | ||||||
Shares of beneficial interest, at $0.01 par value (authorized unlimited, outstanding 6,643,827 shares) | $ | 66,438 | ||||
Additional paid-in capital | 80,265,163 | |||||
Distributions in excess of net investment income | (32,054 | ) | ||||
Accumulated net realized loss on investments | (47,800,553 | ) | ||||
Net unrealized depreciation on investments | (1,176,016 | ) | ||||
Net Assets | $ | 31,322,978 | ||||
Net Asset Value, Offering and Redemption Price per Outstanding Share ($31,322,978 ÷ 6,643,827 shares of beneficial interest outstanding) | $ | 4.71 |
for the Six Months Ended July 31, 2008 (unaudited)
Investment Income: | ||||||
Interest | $ | 1,211,379 | ||||
Dividends | 12,226 | |||||
Total Income | 1,223,605 | |||||
Expenses: | ||||||
Advisory fee | 119,613 | |||||
Service and distribution plan fees | 39,871 | |||||
Transfer agent fees | 18,191 | |||||
Printing and postage | 17,686 | |||||
Custodian fees | 13,599 | |||||
Registration and filing fees | 11,916 | |||||
Auditing and legal fees | 7,516 | |||||
Trustees’ fees and expenses | 1,280 | |||||
Insurance | 498 | |||||
Other | 1,756 | |||||
Total Expenses Before Custody Credits and Fees Waived | 231,926 | |||||
Less: Advisory Fee Waived | (63,793 | ) | ||||
Less: Service and Distribution Plan Fees Waived | (15,948 | ) | ||||
Less: Custody Credits | (700 | ) | ||||
Net Expenses | 151,485 | |||||
Net Investment Income | 1,072,120 | |||||
Net Realized and Unrealized Loss on Investments: | ||||||
Net Realized Loss | (226,483 | ) | ||||
Change in Net Unrealized Appreciation/ (Depreciation) | (582,311 | ) | ||||
Net Realized Loss and Change in Net Unrealized Appreciation/(Depreciation) on Investments | (808,794 | ) | ||||
Net Increase in Net Assets from Operations | $ | 263,326 |
10
for the Six Months Ended July 31, 2008 (unaudited) and for the Year Ended January 31, 2008
Six Months Ended July 31, 2008 (unaudited) | | Year Ended January 31, 2008 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Operations: | ||||||||||
Net investment income | $ | 1,072,120 | $ | 2,384,024 | ||||||
Net realized loss on investments | (226,483 | ) | (54,940 | ) | ||||||
Change in net unrealized appreciation/(depreciation) | (582,311 | ) | (1,515,148 | ) | ||||||
Net increase in net assets from operations | 263,326 | 813,936 | ||||||||
Distributions to Shareholders: | ||||||||||
Net investment income | (1,060,484 | ) | (2,388,478 | ) | ||||||
Trust Share Transactions: | ||||||||||
Proceeds from sale of shares | 1,367,429 | 1,738,540 | ||||||||
Proceeds from reinvestment of distributions to shareholders | 806,703 | 1,774,585 | ||||||||
Cost of shares repurchased* | (2,513,430 | ) | (6,819,594 | ) | ||||||
Net decrease in net assets from Trust share transactions | (339,298 | ) | (3,306,469 | ) | ||||||
Total Decrease in Net Assets | (1,136,456 | ) | (4,881,011 | ) | ||||||
Net Assets: | ||||||||||
Beginning of period | 32,459,434 | 37,340,445 | ||||||||
End of period | $ | 31,322,978 | $ | 32,459,434 | ||||||
Distributions in excess of net investment income, at end of period | $ | (32,054 | ) | $ | (43,690 | ) |
11
1. | Significant Accounting Policies |
12
based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.
• | Level 1 — quoted prices in active markets for identical investments |
• | Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
Valuation Inputs | | Investments in Securities | | Other Financial Instruments* | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Level 1 — Quoted Prices | $ | 501,360 | — | |||||||
Level 2 — Other Significant Observable Inputs | 30,214,919 | — | ||||||||
Level 3 — Significant Unobservable Inputs | — | — | ||||||||
Total | $ | 30,716,279 | — |
* | Other financial instruments include futures, forwards and swap contracts. |
13
14
2. | Trust Share Transactions and Distributions to Shareholders |
Six Months Ended July 31, 2008 (unaudited) | | Year Ended January 31, 2008 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Shares sold | 284,044 | 347,176 | ||||||||
Shares issued to shareholders in reinvestment of dividends | 167,837 | 355,495 | ||||||||
Shares repurchased | (523,070 | ) | (1,367,552 | ) | ||||||
Net decrease | (71,189 | ) | (664,881 | ) | ||||||
Dividends per share from net Investment income | $ | 0.1594 | $ | 0.3387 |
3. | Purchases and Sales of Securities |
Six Months Ended July 31, 2008 (unaudited) | ||||||
---|---|---|---|---|---|---|
Purchases: | ||||||
Investment Securities | $ | 7,827,996 | ||||
Sales: | ||||||
Investment Securities | $ | 6,073,102 |
4. | Income Taxes (unaudited) |
Cost of investments for tax purposes | $ | 31,892,295 | ||||
Gross tax unrealized appreciation | $ | 239,727 | ||||
Gross tax unrealized depreciation | (1,415,743 | ) | ||||
Net tax unrealized depreciation on investments | $ | (1,176,016 | ) | |||
Capital loss carryforward, expires January 31, 2009 | $ | (20,922,783 | ) | |||
Capital loss carryforward, expires January 31, 2010 | (20,653,696 | ) | ||||
Capital loss carryforward, expires January 31, 2011 | (5,624,767 | ) | ||||
Capital loss carryforward, at January 31, 2008 | $ | (47,201,246 | ) |
5. | Investment Advisory Fee, Service and Distribution Fees and Transactions With Affiliates |
15
was computed at an annual rate of 0.75 of 1% per year on the first $100 million of the Trust’s average daily net assets for the year, and 0.50 of 1% on the average daily net assets in excess thereof. The Adviser provides research, investment programs and supervision of the investment portfolio and pays costs of administrative services and office space. The Adviser also provides persons, satisfactory to the Trust’s Trustees, to act as officers of the Trust and pays their salaries and wages. Direct expenses of the Trust are charged to the Trust while common expenses of the Value Line Funds are allocated proportionately based upon the funds’ respective net assets. The Trust bears all other costs and expenses. Effective June 1, 2007 and 2008, the Adviser contractually agreed to reduce the Trust’s advisory fee by 0.40% for one year periods. The fees waived amounted to $63,793 for the six months ended July 31, 2008. The Adviser has no right to recoup previously waived amounts.
6. | Other |
16
Years Ended January 31, | | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Six Months Ended July 31, 2008 (unaudited) | | 2008 | | 2007 | | 2006 | | 2005 | | 2004 | |||||||||||||||||
Net asset value, beginning of period | $ | 4.83 | $ | 5.06 | $ | 5.01 | $ | 5.16 | $ | 5.06 | $ | 4.35 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income | 0.16 | 0.34 | 0.32 | 0.31 | 0.33 | 0.34 | |||||||||||||||||||||
Net gains or (losses) on securities (both realized and unrealized) | (0.12 | ) | (0.23 | ) | 0.05 | (0.15 | ) | 0.09 | 0.70 | ||||||||||||||||||
Total from investment operations | 0.04 | 0.11 | 0.37 | 0.16 | 0.42 | 1.04 | |||||||||||||||||||||
Redemption fees | — | (3) | — | (3) | — | (3) | — | (3) | 0.01 | 0.01 | |||||||||||||||||
Less distributions: | |||||||||||||||||||||||||||
Dividends from net investment income | (0.16 | ) | (0.34 | ) | (0.32 | ) | (0.31 | ) | (0.33 | ) | (0.34 | ) | |||||||||||||||
Net asset value, end of period | $ | 4.71 | $ | 4.83 | $ | 5.06 | $ | 5.01 | $ | 5.16 | $ | 5.06 | |||||||||||||||
Total return | 0.79 | %(4) | 2.14 | % | 7.80 | % | 3.32 | % | 8.55 | % | 25.01 | % | |||||||||||||||
Ratios/Supplemental Data: | |||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 31,323 | $ | 32,459 | $ | 37,340 | $ | 43,761 | $ | 59,919 | $ | 64,101 | |||||||||||||||
Ratio of expenses to average net assets(1) | 1.45 | %(5) | 1.28 | % | 1.50 | % | 1.45 | % | 1.39 | % | 1.43 | % | |||||||||||||||
Ratio of expenses to average net assets(2) | 0.95 | %(5) | 0.77 | % | 1.04 | % | 1.45 | % | 1.39 | % | 1.43 | % | |||||||||||||||
Ratio of net investment income to average net assets | 6.72 | %(5) | 6.76 | % | 6.54 | % | 6.19 | % | 6.28 | % | 6.98 | % | |||||||||||||||
Portfolio turnover rate | 21 | %(4) | 30 | % | 31 | % | 27 | % | 69 | % | 76 | % |
(1) | Ratio reflects expenses grossed up for custody credit arrangement and grossed up for the waiver of a portion of the advisory fee by the Adviser and a portion of the service and distribution plan fees by the Distributor. The ratio of expenses to average net assets, net of custody credits, but exclusive of the waiver of a portion of the advisory fee by the Adviser and the waiver of the service and distribution plan fees by the Distributor, would have been 1.27% for the year ended January 31, 2008, 1.49% for the year ended January 31, 2007 and would not have changed for the other periods shown. |
(2) | Ratio reflects expenses net of the waiver of a portion of the advisory fee by the Adviser and a portion of the service and distribution plan fees by the Distributor and net of the custody credit arrangement. |
(3) | Amount is less than $.01 per share. |
(4) | Not annualized. |
(5) | Annualized. |
17
Agreement for the Value Line Aggressive Income Trust (unaudited)
1 On June 30, 2008, Value Line, Inc., the Fund’s former investment adviser, reorganized its investment management division into EULAV Asset Management, LLC, a newly formed wholly-owned subsidiary located at 220 East 42nd Street, New York, NY 10017. As part of the reorganization, the Fund’s investment advisory agreement was transferred from Value Line to EULAV and EULAV replaced Value Line as the Fund’s investment adviser. Value Line, Inc. is referred to as the investment adviser in this document because at the time of the meeting of the Board of Trustees discussed herein Value Line, Inc. remained the Fund’s investment adviser.
18
Agreement for the Value Line Aggressive Income Trust (unaudited)
19
Agreement for the Value Line Aggressive Income Trust (unaudited)
and more than the Expense Universe average. The Board concluded that the average expense ratio was satisfactory for the purpose of approving the continuance of the Agreement for the coming year.
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Name, Address, and Age | | Position | | Length of Time Served | | Principal Occupation During the Past 5 Years | | Other Directorships Held by Trustee | ||||||||||
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Interested Trustee* | ||||||||||||||||||
Thomas T. Sarkany Age 62 | Director | Since 2008 | Mutual Fund Marketing Director of Value Line Securities, Inc. (the “Distributor”). | None | ||||||||||||||
Non-Interested Trustees | ||||||||||||||||||
John W. Chandler 1611 Cold Springs Road Williamstown, MA 01267 Age 84 | Trustee (Lead Independent Trustee since 2007) | Since 1991 | Consultant, Academic Search Consultation Service, Inc. 1992–2004; Trustee Emeritus and Chairman (1993–1994) of the Board of Trustees of Duke University; President Emeritus, Williams College. | None | ||||||||||||||
Frances T. Newton 4921 Buckingham Drive Charlotte, NC 28209 Age 66 | Trustee | Since 2000 | Retired. Customer Support Analyst, Duke Power Company until 2007. | None | ||||||||||||||
Francis C. Oakley 54 Scott Hill Road Williamstown, MA 01267 Age 76 | Trustee | Since 2000 | Professor of History, Williams College, 1961 to 2002; Professor Emeritus since 2002; President Emeritus since 1994 and President, 1985–1994; Chairman (1993–1997) and Interim President (2002–2003) of the American Council of Learned Societies. Trustee since 1997 and Chairman of the Board since 2005, National Humanities Center. | None | ||||||||||||||
David H. Porter 5 Birch Run Drive Saratoga Springs, NY 12866 Age 72 | Trustee | Since 1997 | Visiting Professor of Classics, Williams College, since 1999; President Emeritus, Skidmore College since 1999 and President, 1987–1998. | None | ||||||||||||||
Paul Craig Roberts 169 Pompano St. Panama City Beach, FL 32413 Age 68 | Trustee | Since 1987 | Chairman, Institute for Political Economy. | None |
21
Name, Address, and Age | | Position | | Length of Time Served | | Principal Occupation During the Past 5 Years | | Other Directorships Held by Trustee | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nancy-Beth Sheerr 1409 Beaumont Drive Gladwyne, PA 19035 Age 58 | Trustee | Since 1996 | Senior Financial Advisor, Veritable L.P. (investment adviser) since 2004; Senior Financial Advisor, Hawthorn, 2001–2004. | None | ||||||||||||||
Officers | ||||||||||||||||||
Mitchell E. Appel Age 37 | President | Since 2008 | President of each of the 14 Value Line Funds since June 2008; Chief Financial Officer of Value Line since April 2008 and from September 2005 to November 2007; Treasurer from June 2005 to September 2005; Chief Financial Officer of XTF Asset Management from November 2007 to April 2008; Chief Financial officer of Circle Trust Company from 2003 through May 2005; Chief Financial Officer of the Distributor since April 2008. | |||||||||||||||
Howard A. Brecher Age 54 | Vice President and Secretary | Since 2008 | Vice President and Secretary of each of the 14 Value Line Funds since June 2008; Vice President, Secretary and a Director of Value Line; Vice President of the Distributor and Secretary since June 2008; Vice President, Secretary, Treasurer, General Counsel and a Director of Arnold Bernhard & Co., Inc. | |||||||||||||||
Emily D. Washington Age 29 | Treasurer | Since 2008 | Associate Director of Mutual Fund Accounting at Value Line until August 2008; Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer) of the Value Line Funds since August 2008. |
* | Mr. Sarkany is an “interested person” as defined in the Investment Company Act of 1940 by virtue of his position with the Distributor. |
The Fund’s Statement of Additional Information (SAI) includes additional information about the Fund’s directors and is available, without charge, upon request by calling 1-800-243-2729. |
22
23
* | Only available through the purchase of Guardian Investor, a tax deferred variable annuity, or ValuePlus, a variable life insurance policy. |
24
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: | October 6, 2008 |
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: | October 6, 2008 |