Value Line Mid Cap Focused Fund
| Value Line Mid Cap Focused Fund | |
|---|---|
| Investor Class | VLIFX |
| Institutional Class | VLMIX |
| AUM | $1817M |
Stephen E. Grant Senior Portfolio Manager
* The Adviser and EULAV Securities LLC, the Fund’s principal underwriter (the “Distributor”), have agreed to waive certain class-specific fees and/or pay certain class-specific expenses incurred by the Institutional Class so that the Institutional Class bears its class-specific fees and expenses at the same percentage of its average daily net assets as the Investor Class’s class-specific fees and expenses (excluding 12b-1 fees and any extraordinary expenses incurred in different amounts by the classes) (the “Expense Limitation”). The information regarding the Institutional Class in the table has been restated to reflect the Expense Limitation. The Adviser and the Distributor may subsequently recover from assets attributable to the Institutional Class the reimbursed expenses and/or waived fees (within 3 years after the fiscal year end in which the waiver/reimbursement occurred) to the extent that the Institutional Class’s expense ratio is less than the Expense Limitation or, if lower, the expense limitation in effect when the waiver/reimbursement occurred. The Expense Limitation can be terminated or modified before June 30, 2019 only with the agreement of the Fund’s board. The Fund's performance would be lower in the absence of such waivers.
As of 06/30/25, the Fund’s Top 10 Holdings were as follows:
Heico Corp (6.87%),
Tyler Technologies Inc (5.42%),
MSCI Inc (5.29%),
Monolithic Power Systems Inc (5.26%),
Casey's General Stores Inc (5.20%),
Waste Connections Inc (5.14%),
Lennox International Inc (4.38%),
WR Berkley Corp (4.31%),
Steris PLC (4.06%),
American Financial Group Inc (3.29%)
There are risks associated with investing in small and mid cap stocks, which tend to be more volatile and less liquid than stocks of large companies, including the risk of price fluctuations.
The performance data quoted herein represents past performance and does not guarantee future results. Market volatility can dramatically impact the fund's short term performance. Current performance may be lower or higher than figures shown. The investment return and principal value will fluctuate so that an investor's shares, when redeemed may be worth more or less than their original cost. Past performance data through the most recent month end is available at vlfunds.com or by calling 1-800-243-2729.
You should carefully consider investment objectives, risks, charges and expenses of Value Line Funds before investing. This and other information can be found in the fund's prospectus and summary prospectus, which can be obtained free of charge from your investment representative, by calling 800.243.2729, or by clicking on the applicable fund at www.vlfunds.com. Please read it carefully before you invest or send money. Value Line Funds are distributed by EULAV Securities LLC. Past performance is no guarantee of future results.
Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell securities. Current and future portfolio holdings are subject to risk.
The average annual returns shown above are historical and reflect changes in share price, reinvested dividends and are net of expenses. Investment results and the principal value of an investment will vary.
The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three- year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
VLEOX (3 Year / 4 stars / 512 funds; 5 Year / 4 stars / 496 funds; 10 Year / 4 stars / 390 funds; )
VLIFX (3 Year / 3 stars / 476 funds; 5 Year / 5 stars / 444 funds; 10 Year / 5 stars / 368 funds; )
VALLX (3 Year / 5 stars / 1024 funds; 5 Year / 2 stars / 954 funds; 10 Year / 2 stars / 766 funds; )
VALSX (3 Year / 1 stars / 1024 funds; 5 Year / 2 stars / 954 funds; 10 Year / 2 stars / 766 funds; )
VLAAX (3 Year / 2 stars / 466 funds; 5 Year / 1 stars / 439 funds; 10 Year / 3 stars / 363 funds; )
VALIX (3 Year / 5 stars / 466 funds; 5 Year / 3 stars / 439 funds; 10 Year / 5 stars / 363 funds; )
VAGIX (3 Year / 1 stars / 430 funds; 5 Year / 2 stars / 382 funds; 10 Year / 2 stars / 288 funds; )
Source: Morningstar Direct
Would you please comment on the Fund’s performance relative to the Morningstar Mid-Cap Growth Category in the second quarter and for longer-term periods?
For the quarter ended June 30, 2025, the Fund returned 4.13%, lagging the Morningstar Mid-Cap Growth Category average return of 13.88%. While we are never satisfied with relative short-term underperformance, we believe that a long-term approach to investment growth with an emphasis on reducing risk is important to investors.
Notably, the Fund is the only fund in the Morningstar category (among 108 unique funds) with performance that ranked in the top 15% or better for the 5 and 10-year periods while earning Morningstar’s “Low” Risk Rating for the 3, 5 and 10-year periods ended June 30, 2025.
Please visit the Fund’s performance page for complete performance information.
Source: Morningstar as of 6/30/25
Would you please describe the types of companies that meet the Fund’s risk/reward selection criteria?
When selecting companies for investment, we seek those with a track record of 10+ years of consistent growth in both stock price and earnings. We believe this type of consistent, historical growth indicates that a company has excellent management, healthy fundamentals, and stable, yet growing, operations. Such companies have the potential to operate successfully in a variety of market and economic conditions.
For example, the Fund’s portfolio holds Comfort Systems USA Inc. (FIX), which provides heating, air conditioning, HVAC and plumbing services. Comfort Systems primarily services commercial and industrial customers. The company has benefited from the steady demand for climate control systems in new construction as well as maintenance of existing units.
A second portfolio example is Waste Connections Inc. (WCN), the third-largest provider of solid waste and recycling services in North America. The company serves commercial, industrial and residential markets in the U.S. and Canada.
How does the Fund’s risk/reward profile compare with other mid-cap growth funds?
The Fund’s investment process emphasizes risk management. We own a concentrated portfolio of mid-cap companies that have produced, in general, 10+ years of consistent growth in stock price and earnings, through a variety of economic conditions. By extension, we believe our portfolio is comprised of companies that are well positioned for continued growth. As a result of this emphasis on consistent results, the portfolio has experienced less volatility compared to our Morningstar Mid-Cap Growth Category peers.
In fact, the Fund’s standard deviation, a measure of volatility, ranks the lowest among its peers in the Morningstar Mid-Cap Growth Category for the 3, 5 and 10-year periods ended June 30, 2025.
Source: Morningstar as of 6/30/25
What changes were made to the Fund in Q2?
During the second quarter, we exited our positions in companies that no longer met our stringent investment criteria. These companies include:
As of June 30, 2025, the Fund held 37 companies.