Value Line Capital Appreciation Fund
*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 12/31/25, the Fund’s Top 10 Holdings were as follows:
NVIDIA Corp (3.99%),
Alphabet Inc Class A (3.91%),
Meta Platforms Inc Class A (3.88%),
Advanced Micro Devices Inc (3.41%),
Amazon.com Inc (3.24%),
Micron Technology Inc (2.87%),
Broadcom Inc (2.75%),
Microsoft Corp (2.38%),
Uber Technologies Inc (2.09%),
AppLovin Corp Ordinary Shares - Class A (1.98%)
3-Yr Average Projected Annual Sales Growth Rate is the year-over-year average growth rate of holdings based on analysts’ consensus revenue
estimates of holdings.
3-5 Yr Average Estimated Forward Earnings Growth Rate is the year-over-year average growth rate based on analysts’
consensus EPS (earnings per share) estimates. If EPS estimates are available for 5 years forward, it is an average of 5 years; otherwise, it is an avg of 3 years forward EPS estimates.
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 / 4 stars / 518 funds; 5 Year / 5 stars / 496 funds; 10 Year / 4 stars / 391 funds; )
VLIFX (3 Year / 3 stars / 469 funds; 5 Year / 5 stars / 445 funds; 10 Year / 5 stars / 373 funds; )
VALLX (3 Year / 3 stars / 1002 funds; 5 Year / 2 stars / 935 funds; 10 Year / 2 stars / 757 funds; )
VALSX (3 Year / 1 stars / 1002 funds; 5 Year / 2 stars / 935 funds; 10 Year / 2 stars / 757 funds; )
VLAAX (3 Year / 1 stars / 464 funds; 5 Year / 1 stars / 444 funds; 10 Year / 2 stars / 371 funds; )
VALIX (3 Year / 5 stars / 464 funds; 5 Year / 2 stars / 444 funds; 10 Year / 5 stars / 371 funds; )
VAGIX ()
Source: Morningstar Direct
How would you characterize the market environment in 2025, and what factors shaped investor behavior during the year?
Equity markets delivered strong results in 2025, with the S&P 500 Index rising 17.88%. While the final quarter of the year was marked by increased volatility and some rotation away from growth stocks, the broader market backdrop remained constructive. Leadership expanded beyond a narrow group of mega-cap names, with returns increasingly driven by company-specific fundamentals.
Artificial intelligence (AI) remained the most influential secular theme throughout the year, supporting earnings growth across a wide range of industries. At the same time, easing inflation and a gradual shift toward a more accommodative monetary environment improved sentiment for both equities and fixed income.
How did the Fund perform during 2025?
For 2025, the Fund returned 20.87%, significantly outperforming its 60% S&P 500 / 40% Bloomberg US Aggregate Bond blended benchmark and the Morningstar Moderate Allocation Category average, by over 700 basis points and 800 basis points, respectively. We are pleased to report that the Fund’s performance ranked in the top 2% among its Morningstar category peers for the 1, 3 and 10-year periods ended December 31, 2025.
Please visit the Fund’s performance page for complete performance information.
Source: Morningstar as of 12/31/25
Within the Fund’s equity portfolio, what were the key drivers of outperformance relative to the S&P 500 Index during the year?
Within the equity portfolio, the Fund’s outperformance was primarily due to stock section. The top two contributing sectors relative to the S&P 500 Index were as follows:
How is the Fund allocated as we enter 2026?
As of December 31, 2025, the Fund was allocated approximately 66% to equities, 29% to fixed income, and 5% to cash, largely consistent with its allocation at the end of the prior year. The Fund’s fixed income portfolio continues to emphasize high-quality, investment grade securities, with approximately 97% rated AAA through BBB as of December 31, 2025.
How do the Fund’s forward revenue and earnings growth rates compare to the broader market?
As of year-end, the Fund’s equity portfolio had a three-year projected average annual sales growth rate of 25%, nearly double the S&P 500 Index’s 13% rate, and a three- to five-year estimated earnings growth rate of 16% versus 13% for the Index.