Investment Objective and Strategy

The investment objective of the Fund is to maximize current income. Capital appreciation is a secondary objective but only when consistent with the Fund’s primary objective.

The Fund invests primarily in a diversified portfolio of primarily investment grade, fixed income obligations, including securities issued or guaranteed by the U.S. government, its agencies or instrumentalities (U.S. government securities), mortgage-backed securities, asset-backed securities, corporate bonds, and other fixed income securities. Under normal circumstances, the Fund invests at least 80% of its assets in fixed income securities. The Fund invests in debt securities of any maturity, and there is no limit on the Fund's maximum average portfolio maturity.

Average Annual Returns as of 04/30/20

YTD 1 Yr 3 Yr 5 Yr 10 Yr
transparent Value Line Core Bond Fund 2.82% 8.21% 3.92% 2.88% 3.85%
transparent BBgBarc US Agg Bond 4.98% 10.84% 5.17% 3.80% 3.96%
transparent Morningstar Intermediate Core Bond 3.62% 8.87% 4.35% 3.21% 3.60%
Morningstar Intermediate Core Bond Ranking - 293/428 277/386 242/331 98/252
Percentile Rank as of 04/30/20 - 70% 74% 76% 44%
VAGIX Gross / Net Expense Ratio*: 1.14% / 0.90%
Morningstar rates funds based on enhanced Morningstar risk-adjusted returns.
Effective Dec. 10, 2012 the Core Bond Fund changed its primary strategy of investing in high-yield bonds to investing in investment-grade bonds. All data above prior to 12/10/2012 reflects the old strategy.
YTD 2.82% 4.98% 3.62%
1 Yr 8.21% 10.84% 8.87%
3 Yr 3.92% 5.17% 4.35%
5 Yr 2.88% 3.80% 3.21%
10 Yr 3.85% 3.96% 3.60%
VAGIX Gross / Net Expense Ratio*: 1.14% / 0.90%
Morningstar rates funds based on enhanced Morningstar risk-adjusted returns.
Effective Dec. 10, 2012 the Core Bond Fund changed its primary strategy of investing in high-yield bonds to investing in investment-grade bonds. All data above prior to 12/10/2012 reflects the old strategy.

Economic Review

Overall, the six-month period ending June 30th was one of positive but weakening economic growth both in the U.S. and globally. For the first quarter of 2019, U.S. Gross Domestic Product (GDP) registered 3.1%, stronger than the 2.2% GDP growth rate for the final quarter of 2018. However, at 2.0%, U.S. economic growth was notably slower for the second quarter of 2019. A major reason for the slowdown is a significant weakening in manufacturing, not just in the U.S., but globally. The U.S. ISM Manufacturing Index, an important measure, declined from 56.6 to 51.7 during the first six months of 2019. Germany and China saw slowing as well as their manufacturing indices broke through the 50 level for the semi-annual period. Continuing trade tensions with China and the levying of tariffs contributed to this global slowdown. Even the U.S. labor market, though still healthy, slowed. While unemployment fell to 3.6%, the lowest level since 1969, non-farm payroll growth, which averaged 223,000 jobs monthly for 2018 slowed to an average of 172,000 jobs monthly for the first half of 2019. Consumer confidence was mixed but ended June 2019 sharply lower as optimism about the labor market and the economy waned on escalating trade tensions with China and Mexico.

Inflation also weakened from 2.00% in 2018 to 1.5% at the end of June. This is significantly below the 2.0% inflation target of the Federal Reserve (the Fed), causing concern over the health of the economy. Another sign pointing to economic weakness was the U.S. bond market. The three-month U.S. Treasury bill was yielding 2.12% at the end of June 2019, while the five-year U.S. Treasury note had a yield of 1.76%. This differential reflected an inverted yield curve, whereby the shorter maturity security yielded more than the longer maturity security. An inverted yield curve is concerning as it has preceded most, but not all, economic recessions during the last 50 years.

Against this backdrop of weaker economic data and lower than expected inflation, the Fed significantly shifted its stance from 2018, adopting an increasingly dovish bias as the months progressed in an effort to maintain financial stability. (Dovish tends to imply lower interest rates; opposite of hawkish.) Fed Chair Powell emphasized that the U.S. central bank would be largely guided by inflation indicators as well as by the global economic growth backdrop and the potential for financial market volatility. At the Fed’s June 2019 meeting, eight of 12 Fed policymakers projected interest rate cuts in 2019. There was also a consensus among market participants at the end of the semi-annual period that the Fed would likely begin to lower interest rates as soon as July 2019. Other developed markets’ central banks, including the European Central Bank and the Bank of Japan, turned similarly dovish during the first half of 2019.

Morningstar as of 04/30/20

Category Intermediate Core Bond
3 Year of 386 Funds
5 Year of 331 Funds
10 Year of 252 Funds
Overall of 386 Funds

* EULAV Asset Management (the “Adviser”) and EULAV Securities LLC, the Fund’s principal underwriter (the “Distributor”) have agreed to waive a portion of their advisory and Rule 12b-1 fees and the Adviser has further agreed to reimburse certain expenses of the Fund to the extent necessary to limit the Fund’s total annual operating expenses (other than those attributable to interest, taxes, brokerage and futures commissions, and extraordinary expenses not incurred in the ordinary course of the Fund’s business) to 0.90% of the Fund’s average daily net assets (the “Expense Limitation”) through June 30, 2020. The Adviser and the Distributor may subsequently recover from the Fund 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 Fund’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 before June 30, 2020 only with the agreement of the Fund’s Board. Net Total Annual Fund Operating Expenses After Fee Waiver and Expense Reimbursement in the table above have been restated from 0.99% to 0.90% to reflect a change in the Expense Limitation effective May 1, 2019. The Fund's performance would be lower in the absence of such waivers.

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 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 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. VLIFX (3 Year / 4 stars / 565 funds; 5 Year / 5 stars / 503 funds; 10 Year / 5 stars / 387 funds; ) VALLX (3 Year / 3 stars / 1237 funds; 5 Year / 3 stars / 1084 funds; 10 Year / 3 stars / 813 funds; ) VLEOX (3 Year / 3 stars / 581 funds; 5 Year / 4 stars / 500 funds; 10 Year / 5 stars / 381 funds; ) VALSX (3 Year / 4 stars / 565 funds; 5 Year / 5 stars / 503 funds; 10 Year / 5 stars / 387 funds; ) VLAAX (3 Year / 5 stars / 643 funds; 5 Year / 5 stars / 561 funds; 10 Year / 5 stars / 413 funds; ) VALIX (3 Year / 5 stars / 309 funds; 5 Year / 5 stars / 277 funds; 10 Year / 5 stars / 194 funds; ) VAGIX (3 Year / 2 stars / 386 funds; 5 Year / 2 stars / 331 funds; 10 Year / 3 stars / 252 funds; ) VLHYX (3 Year / 2 stars / 151 funds; 5 Year / 2 stars / 139 funds; 10 Year / 1 stars / 109 funds; )

Source: Morningstar Direct