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How does your fund compare to the Capital Appreciation Fund?
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*EULAV Asset Management (the “Adviser”) and EULAV Securities LLC, the Fund’s principal underwriter (the “Distributor”), have agreed to permanently 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 from the month 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 only with the agreement of the Fund’s board. The Fund’s performance would be lower in the absence of such waivers.
As of 09/30/23, the Fund’s Top 10 Holdings were as follows:
Meta Platforms Inc Class A (2.89%),
Uber Technologies Inc (2.84%),
Alphabet Inc Class A (2.78%),
NVIDIA Corp (2.57%),
Amazon.com Inc (2.13%),
Microsoft Corp (2.10%),
Pioneer Natural Resources Co (1.76%),
Apple Inc (1.69%),
Visa Inc Class A (1.62%),
Exelixis Inc (1.51%)
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 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.
VLIFX (3 Year / 5 stars / 521 funds; 5 Year / 5 stars / 493 funds; 10 Year / 5 stars / 396 funds; )
VALLX (3 Year / 1 stars / 1126 funds; 5 Year / 1 stars / 1039 funds; 10 Year / 2 stars / 808 funds; )
VLEOX (3 Year / 5 stars / 560 funds; 5 Year / 5 stars / 526 funds; 10 Year / 5 stars / 395 funds; )
VALSX (3 Year / 4 stars / 1126 funds; 5 Year / 4 stars / 1039 funds; 10 Year / 3 stars / 808 funds; )
VLAAX (3 Year / 3 stars / 703 funds; 5 Year / 5 stars / 660 funds; 10 Year / 4 stars / 492 funds; )
VALIX (3 Year / 1 stars / 703 funds; 5 Year / 2 stars / 660 funds; 10 Year / 3 stars / 492 funds; )
VAGIX (3 Year / 3 stars / 423 funds; 5 Year / 2 stars / 383 funds; 10 Year / 2 stars / 278 funds; )
Source: Morningstar Direct
Q3 2023 : Portfolio Manager Q&A
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How did the Fund perform relative to the Morningstar Moderate Allocation Funds category average in the third quarter and for longer-term periods as of September 30, 2023?
Although the Fund declined 2.41% in the third quarter of 2023, on a relative basis, it outperformed the Morningstar Moderate Allocation Funds category’s average -2.67% return. The Fund also outperformed its benchmark, the 60/40 (S&P 500/Bloomberg U.S. Aggregate Bond Index), which declined 3.24% for the quarter.
More importantly, the Fund has also outperformed the Morningstar Moderate Allocation Funds category average over longer periods. In fact, the Fund’s performance ranked in the top decile (10% or better) for the 1 and 10-year periods ended September 30, 2023.
Please visit the Fund’s performance page for complete performance information.
Source: Morningstar as of 9/30/23
How was the Fund’s portfolio allocated between equities and fixed income as of September 30, 2023?
As of September 30, 2023, the Fund held 64% in equities, 28% in bonds and 8% in cash. Within the Fund’s fixed income allocation, the portfolio includes primarily investment grade securities as approximately 99% of the Fund’s debt securities were rated AAA through BBB as of September 30, 2023.
With respect to the Fund’s equity portfolio, what drove performance relative to the S&P 500 Index in the third quarter?
The Fund’s equity performance in the third quarter was driven primarily by stock selection. The two biggest contributing stocks to performance this quarter were Rivian Automotive Inc. (RIVN), an auto manufacturer that designs and develops electric vehicles and accessories; and Splunk Inc. (SPLK), a software company that specializes in machine learning, security, monitoring and analysis. Splunk’s share rose significantly following an acquisition announcement from Cisco Systems Inc.
With respect to the detractors to the Fund’s performance, the two biggest negative contributors were:
What differentiates the Value Line Capital Appreciation Fund from other allocation funds?
The Fund’s equity portfolio owns more growth-oriented companies when compared to other allocation funds. In fact, among the Fund’s peers in the Morningstar Moderate Allocation Funds category, less than 25% employ a primarily growth investing style in their equity portfolios. We believe that sales and earnings growth drive share price appreciation over time, and we strive to own a portfolio of companies that can collectively grow their future sales and earnings at faster rates relative to the S&P 500 Index.
As of September 30, 2023, the Fund’s equity portfolio had a 3-year projected average annual sales growth rate that was nearly double the growth rate of the S&P 500 Index, and the Fund’s 3- to 5-year estimated forward earnings growth rate was 1.6X that of the S&P 500.