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Q1 2024 : Portfolio Manager Q&A

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Would you please comment on the Fund’s performance relative to the Morningstar Moderate Allocation category average in the first quarter and longer-term periods?

For the quarter ended March 31, 2024, the Fund produced a total return of 4.44% lagging the Morningstar Moderate Allocation category average return of 5.32% for the period. However, when considering longer time periods, the Fund has outperformed over multiple periods. In fact, the Fund’s performance ranked in the top quartile (25% or better) for the 1, 3, 5 and 10-year periods ended March 31, 2024, and maintained a 5-star Overall rating by Morningstar. We believe the Fund’s relative outperformance is primarily due to our investment approach of owning equities with 10 or more years of consistent growth in stock price and earnings, and the inclusion of primarily investment grade fixed income.

Please visit the Fund’s performance page for complete performance information.

Source: Morningstar as of 3/31/24

Within the Fund’s equity portfolio, what types of companies does the Fund’s investment process favor?

The Fund’s equity investment criteria emphasize companies with 10+ years of consistent growth in stock price and earnings. With a consistent track record, such companies generally have proven their ability to operate successfully in a variety of economic conditions. They are often providers of products and services that seem “boring” but are essential to the operations of businesses in many industries. For example, the Fund owns Cintas Corporation (CTAS). Cintas offers uniforms for both rental and purchase, as well as restroom supplies such as mats, towels, mops, and hand sanitizer.

From a market-cap perspective, the Fund’s equity portfolio is comprised of primarily large-cap companies, with fewer giant-cap companies compared to its peers in the Morningstar Moderate Allocation category. We favor companies with a relatively smaller size that, in our view, have greater potential for continued growth over longer time periods. In fact, as of March 31, 2024, the Fund did not own any of the 20 largest companies by market cap in the U.S.

Source: Morningstar as of 3/31/24

What was the composition of the Fund’s fixed income portfolio at quarter end?

The Fund’s fixed income portfolio includes primarily investment grade debt securities (rated AAA through BBB). As of March 31, 2024, approximately 99% of the Fund’s debt securities were rated investment grade.

What is the Fund’s current allocation among stocks, bonds and cash?

The Fund’s flexible allocation allows us to adjust the allocation between stocks and bonds based on relative opportunities and risks. As of March 31, 2024, the Fund held approximately 63% in equities, 33% in bonds and 4% in cash. The Fund’s equity/fixed income allocation was similar to the end of 2023.

* EULAV Asset Management (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 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 03/31/24, the Fund’s Top 10 Holdings were as follows: Cintas Corp (4.69%), TransDigm Group Inc (4.44%), Republic Services Inc (3.82%), WR Berkley Corp (3.04%), Fair Isaac Corp (2.94%), Stryker Corp (2.68%), Intercontinental Exchange Inc (2.57%), ServiceNow Inc (2.41%), Cadence Design Systems Inc (2.34%), Union Pacific Corp (2.32%)

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 or by calling 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 / 5 stars / 510 funds; 5 Year / 5 stars / 476 funds; 10 Year / 5 stars / 382 funds; ) VALLX (3 Year / 1 stars / 1100 funds; 5 Year / 1 stars / 1026 funds; 10 Year / 2 stars / 798 funds; ) VLEOX (3 Year / 5 stars / 552 funds; 5 Year / 5 stars / 523 funds; 10 Year / 5 stars / 399 funds; ) VALSX (3 Year / 4 stars / 1100 funds; 5 Year / 2 stars / 1026 funds; 10 Year / 3 stars / 798 funds; ) VLAAX (3 Year / 4 stars / 680 funds; 5 Year / 3 stars / 642 funds; 10 Year / 5 stars / 485 funds; ) VALIX (3 Year / 1 stars / 680 funds; 5 Year / 3 stars / 642 funds; 10 Year / 4 stars / 485 funds; ) VAGIX (3 Year / 2 stars / 426 funds; 5 Year / 2 stars / 382 funds; 10 Year / 2 stars / 270 funds; )

Source: Morningstar Direct