Value Line Asset Allocation Fund
* 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 09/30/24, the Fund’s Top 10 Holdings were as follows:
TransDigm Group Inc (4.79%),
Cintas Corp (4.69%),
Republic Services Inc (3.76%),
Fair Isaac Corp (3.48%),
Tyler Technologies Inc (3.21%),
Intercontinental Exchange Inc (3.03%),
WR Berkley Corp (2.95%),
ServiceNow Inc (2.84%),
Costco Wholesale Corp (2.77%),
Stryker Corp (2.61%)
Morningstar™ Categories based on Investor class shares.
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 / 5 stars / 536 funds; 5 Year / 5 stars / 517 funds; 10 Year / 4 stars / 395 funds; )
VLIFX (3 Year / 5 stars / 477 funds; 5 Year / 5 stars / 440 funds; 10 Year / 5 stars / 356 funds; )
VALLX (3 Year / 2 stars / 1020 funds; 5 Year / 2 stars / 955 funds; 10 Year / 2 stars / 751 funds; )
VALSX (3 Year / 4 stars / 1020 funds; 5 Year / 2 stars / 955 funds; 10 Year / 3 stars / 751 funds; )
VLAAX (3 Year / 4 stars / 677 funds; 5 Year / 4 stars / 636 funds; 10 Year / 5 stars / 484 funds; )
VALIX (3 Year / 2 stars / 677 funds; 5 Year / 4 stars / 636 funds; 10 Year / 4 stars / 484 funds; )
VAGIX (3 Year / 2 stars / 431 funds; 5 Year / 1 stars / 386 funds; 10 Year / 2 stars / 271 funds; )
Source: Morningstar Direct
Would you please comment on the Fund’s performance relative to the Morningstar Moderate Allocation Category average for the third quarter as well as longer periods?
For the three months ended September 30, 2024, the Fund returned 7.77%, outperforming the Morningstar Moderate Allocation Category average return of 5.34%. Over the 1-year period ended September 30, 2024, the Fund’s return of 25.82% outperformed the category’s average return of 21.99% by over 380 basis points. In fact, the Fund’s performance ranked in the top 20% or better for the 1, 3 and 10-year periods ended September 30, 2024.
We believe the Fund’s outperformance over these long-term periods is primarily due to our investment approach. This flexible balanced Fund emphasizes equities with 10+ years of consistent growth in both stock price and earnings, and primarily investment grade fixed income securities.
Please visit the Fund’s performance page for complete performance information.
Source: Morningstar as of 9/30/24
Would you please provide some examples of the types of companies that comprise the Fund’s equity portfolio?
When it comes to equities, our investment process emphasizes companies with a history of 10+ years of consistent growth in both stock price and earnings. These types of companies have healthy balance sheets, experienced management teams, and a strong market share. With such a track record, these companies have experienced success in a variety of economic conditions, and we believe are capable of continued growth.
Two examples of the Fund’s equity portfolio companies include:
How do the characteristics of the Fund’s equity portfolio compare to its category peers?
The Fund’s portfolio approach is more growth oriented relative to its peers in the Morningstar Moderate Allocation Category. Approximately 41% of holdings in the equity portfolio are considered growth companies, compared with approximately 25% growth companies in the Morningstar category.
From a market-capitalization perspective, the Fund is flexible, with an emphasis on companies that we believe have a long growth runway. The Fund’s equity portfolio typically has a larger percentage of mid-cap companies, and fewer giant companies, compared to the Morningstar category average. Notably, the Fund did not own any of the 20 largest U.S. companies by market cap as of September 30, 2024.
Source: Morningstar as of 9/30/24
How much did the Fund’s allocation between equities and fixed income change since the prior quarter?
The Fund has a flexible allocation, enabling us to increase or decrease weightings to equities or fixed income based on relative opportunities and risks. As of September 30, 2024, the Fund was allocated 65% to equities, approximately the same as the allocation weighting at the end of the prior quarter.
Fixed income and cash accounted for 35% of the Fund’s assets at quarter’s end. Within the fixed income portfolio, approximately 99% of the Fund’s debt securities were rated investment grade (AAA through BBB) as of September 30, 2024.