Value Line Mid Cap Focused Fund
| Value Line Mid Cap Focused Fund | |
|---|---|
| Investor Class | VLIFX |
| Institutional Class | VLMIX |
| AUM | $1744M |
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 09/30/25, 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 / 516 funds; 5 Year / 4 stars / 496 funds; 10 Year / 4 stars / 392 funds; )
VLIFX (3 Year / 3 stars / 472 funds; 5 Year / 5 stars / 443 funds; 10 Year / 5 stars / 367 funds; )
VALLX (3 Year / 5 stars / 1015 funds; 5 Year / 2 stars / 954 funds; 10 Year / 2 stars / 762 funds; )
VALSX (3 Year / 1 stars / 1015 funds; 5 Year / 2 stars / 954 funds; 10 Year / 2 stars / 762 funds; )
VLAAX (3 Year / 2 stars / 460 funds; 5 Year / 1 stars / 439 funds; 10 Year / 3 stars / 359 funds; )
VALIX (3 Year / 5 stars / 460 funds; 5 Year / 3 stars / 439 funds; 10 Year / 5 stars / 359 funds; )
VAGIX (3 Year / 1 stars / 423 funds; 5 Year / 2 stars / 381 funds; 10 Year / 2 stars / 282 funds; )
Source: Morningstar Direct
Would you please comment on the Fund’s performance relative to the Morningstar Mid-Cap Growth Category in Q3 and longer periods?
During the third quarter, the U.S. equity markets were once again dominated by significant price appreciation in large-cap companies, primarily those involved in technology and artificial intelligence. The S&P 500 Index, a broad market index that is also heavily weighted toward the “Magnificent 7” stocks (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA and Tesla) gained 8.12% during the three months ended September 30, 2025. In contrast, mid-cap companies were not rewarded to the same extent, and the S&P Midcap 400 Index gained 5.55% in the third quarter.
For the quarter ended September 30, 2025, the Fund’s return of 0.11% underperformed the Morningstar Mid-Cap Growth Category average return of 4.51%. We believe the Fund’s underperformance is largely due to the rally in lower quality stocks. Conversely, we employ a highly selective investment process, which favors high-quality companies that have a track record of consistent growth in both stock price and earnings.
While we are never satisfied with relative underperformance, our investment approach is designed to seek outperformance over long-term periods. In fact, the Fund’s performance ranked in the top 20% or better in the Morningstar category for the 5- and 10-year periods as of September 30, 2025.
Please visit the Fund’s performance page for complete performance information.
Source: Morningstar as of 9/30/25
Given the Fund’s long-term investment approach, would you please comment on the Fund’s risk profile?
When selecting companies for inclusion in the Fund’s portfolio, we seek those with a history of 10 or more years of consistent growth in both stock price and earnings. Generally, we don’t invest in companies that have turbulent track records or that are likely to be in news headlines. Rather, we focus on companies with a history of more stable operating results that might be considered “boring.”
As a result of the Fund’s high-quality emphasis, the Fund has less volatility than the Morningstar Mid-Cap Growth Category average. In fact, the Fund’s standard deviation, a measure of volatility, ranks the lowest in its category for the 5 and 10-year periods ended September 30, 2025. In addition, the Fund has been awarded Morningstar’s “Low” Risk Rating for the same periods.
Source: Morningstar as of 9/30/25
Are there any portfolio holdings that you would like to highlight as well as any changes to the portfolio?
The Fund’s holding in Comfort Systems USA Inc. (FIX) was a positive contributor to performance in Q3. Comfort Systems provides heating/cooling (HVAC) systems, mechanical, electrical, plumbing, and other services. The company’s stock price gained approximately 54% during the quarter.
During the third quarter we made a few changes to the portfolio, including the following:
As of September 30, 2025, the Fund owned positions in 36 companies.