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 11/30/17

YTD 1 Yr 3 Yr 5 Yr 10 Yr
transparent Value Line Core Bond Fund 3.04% 3.24% 1.79% 1.54% 4.26%
transparent BBgBarc US Agg Bond 3.07% 3.21% 2.11% 1.98% 3.99%
transparent Morningstar Interm.-Term Bond Funds 3.32% 3.57% 2.05% 1.98% 4.03%
Morningstar Interm.-Term Bond Funds Ranking - 591/981 555/845 594/779 216/551
Percentile Rank as of 11/30/17 - 58% 67% 76% 44%
VAGIX Gross / Net Expense Ratio*: 1.20% / 0.99%
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 3.04% 3.07% 3.32%
1 Yr 3.24% 3.21% 3.57%
3 Yr 1.79% 2.11% 2.05%
5 Yr 1.54% 1.98% 1.98%
10 Yr 4.26% 3.99% 4.03%
VAGIX Gross / Net Expense Ratio*: 1.20% / 0.99%
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.

Quarterly Economic Highlights as of 11/30/17

The S&P 500 began the second quarter at 2059, edging up to 2168 by the end of the third quarter. This moderate increase was posted against a backdrop of generally disappointing economic growth both at home as well as globally.

U.S. Gross Domestic Product (GDP) rose 1.2% in Q2 which was less than half the anticipated growth. Significant improvement in consumer spending was responsible for most of the increase, due in large part to continued tightening in the labor market. This robust pace of consumer spending did not extend to home sales over the summer months. Existing home sales eased despite mortgage rates near record lows. Higher home prices and limited inventory kept some potential buyers on the sidelines.

Investors have kept a keen focus on the Fed for clues as to when it would continue its long anticipated increase in short rates. While a mid-year rate increase had been seen as likely, the Fed resumed its dovish stance after a disappointing jobs report in May, and the global uncertainty resulting from Great Britain’s passage of BREXIT. Additionally, inflation continues to fall short of the Fed’s target, and wage growth remains modest. While there has been some retracement in energy prices, it has not been enough to push inflation to the Fed’s 2% threshold. However, more recent economic data continues to underscore robust employment patterns, leading to wider investor expectations for a single rate hike before the end of the year.

The U.S. economy continues to be the world’s largest and seemingly most robust. While U.S. interest rates remain low, several countries, including Germany, France and Japan, face a challenging environment of negative interest rates. This disparity in rates has fostered a strong appetite for U.S. bonds with their relatively more attractive rates. The specter of BREXIT followed by its unexpected passage provided additional luster to the U.S. Treasury market. The increased global uncertainty sparked a strong rally in risk-free assets, pushing the thirty-year U.S. Treasury bond to total returns in excess of 6% for the period.

Morningstar as of 11/30/17

Category Intermediate-Term Bond
3 Year of 845 Funds
5 Year of 779 Funds
10 Year of 551 Funds
Overall of 845 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 0.99% of the Fund’s average daily net assets (the “Expense Limitation”). 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. The Expense Limitation can be terminated or modified before June 30, 2018 only with the agreement of the Fund’s Board. 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 / 560 funds; 5 Year / 4 stars / 491 funds; 10 Year / 2 stars / 365 funds; ) VALLX (3 Year / 4 stars / 1226 funds; 5 Year / 4 stars / 1110 funds; 10 Year / 3 stars / 786 funds; ) VLEOX (3 Year / 4 stars / 604 funds; 5 Year / 4 stars / 539 funds; 10 Year / 4 stars / 404 funds; ) VALSX (3 Year / 3 stars / 560 funds; 5 Year / 2 stars / 491 funds; 10 Year / 3 stars / 365 funds; ) VLAAX (3 Year / 4 stars / 719 funds; 5 Year / 4 stars / 668 funds; 10 Year / 4 stars / 458 funds; ) VALIX (3 Year / 3 stars / 317 funds; 5 Year / 4 stars / 277 funds; 10 Year / 5 stars / 199 funds; ) VAGIX (3 Year / 3 stars / 845 funds; 5 Year / 2 stars / 779 funds; 10 Year / 2 stars / 551 funds; ) VLHYX (3 Year / 2 stars / 137 funds; 5 Year / 1 stars / 127 funds; 10 Year / 1 stars / 103 funds; )

Source: Morningstar Direct