UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file Number 811- 04471
Value Line Core Bond Fund
(Exact name of registrant as specified in charter)
7 Times Square, Suite 1606, New York, N.Y. 10036
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: 212-907-1900
Date of fiscal period end: December 31, 2023
Date of reporting period: December 31, 2023
Item I Reports to Stockholders
| a) | A copy of the Annual Report to Stockholders for the period ended 12/31/23 is included with this Form. |
| b) | Not Applicable |
| Annual Report |
| December 31, 2023 |
| |
Equity Funds
| Value Line Small Cap Opportunities Fund, Inc. |
| Investor Class (VLEOX) |
| Institutional Class (VLEIX) |
| Value Line Mid Cap Focused Fund, Inc. |
| Investor Class (VLIFX) |
| Institutional Class (VLMIX) |
| Value Line Select Growth Fund, Inc. |
| Investor Class (VALSX) |
| Institutional Class (VILSX) |
| Value Line Larger Companies Focused Fund, Inc. |
| Investor Class (VALLX) |
| Institutional Class (VLLIX) |
Allocation Funds
| Value Line Asset Allocation Fund, Inc. |
| Investor Class (VLAAX) |
| Institutional Class (VLAIX) |
| Value Line Capital Appreciation Fund, Inc. |
| Investor Class (VALIX) |
| Institutional Class (VLIIX) |
Fixed Income Fund
| Value Line Core Bond Fund |
| Investor Class (VAGIX) |
Go Paperless
VLFunds.com/edelivery
VLFunds.com/edelivery
This audited report is issued for information to shareholders. It is not authorized for distribution to
prospective investors unless preceded or accompanied by a currently effective prospectus of the Fund
(obtainable from the Distributor).
Table of
Contents
| 3 | |
| | |
| 8 | |
| 10 | |
| 12 | |
| | |
| 14 | |
| 16 | |
| 18 | |
| | |
| 20 | |
| 22 | |
| 24 | |
| | |
| 25 | |
| 27 | |
| 30 | |
| | |
| 32 | |
| 35 | |
| 38 | |
| | |
| 44 | |
| 47 | |
| 50 | |
| | |
| 56 | |
| 58 | |
| 61 | |
| 66 | |
| 70 | |
| 74 | |
| 80 | |
| 87 | |
| 96 | |
| 97 | |
| 99 | |
| 100 | |
| 101 |
2
President’s Letter (unaudited)
Dear Fellow Shareholders:
On behalf of all of us here at Value Line Funds, I hope this annual report finds you and your families safe and
well.
As we continue through these challenging times, know that our long-term commitment to
you, our Fund shareholders, remains unchanged. As such, we are pleased to present you with this annual report for Value Line Small Cap Opportunities Fund, Inc., Value Line Mid Cap Focused Fund, Inc., Value Line Select Growth Fund, Inc., Value Line Larger Companies Focused Fund, Inc., Value Line
Asset Allocation Fund, Inc., Value Line Capital Appreciation Fund, Inc. and Value Line Core Bond Fund (individually, a “Fund” and collectively, the “Funds”) for the 12 months ended December 31, 2023.
During the annual period, most broad U.S. equity indices generated robust positive absolute returns that outpaced the more muted, yet still positive, absolute returns of most fixed income indices, impacted by a variety of economic and market factors discussed below. Notably, while all seven equity, hybrid and fixed income Funds also posted positive absolute returns during the annual
reporting period, five of the seven outperformed their respective benchmark index on a relative basis. The reporting period was highlighted by several of the Value Line Funds being recognized for their long-term performance and/or attractive risk profiles.
•
Value Line Small Cap Opportunities Fund, Inc.* outpaced the category average return of its peers for the one-, three-, five-and ten-year periods ended December 31, 2023
(small growth category), as measured by Morningstar.1 Additionally, the Fund earned an overall five-star rating from Morningstar2 in the small growth category among 563 funds as of December 31, 2023 based on risk-adjusted returns. Morningstar gave the
Fund an overall Risk Rating of Low and an overall Return Rating of Above
Average.i
•
Value Line Mid Cap Focused Fund, Inc.* outpaced the category average return of its peers for the one-, three-, five- and ten-year periods ended December 31, 2023
(mid-cap growth category), as measured by Morningstar.1 Additionally, the Fund earned an overall five-star rating from Morningstar2 in the mid-cap growth category among 523 funds as of December 31, 2023 based on risk-adjusted returns. Morningstar gave the
Fund an overall Risk Rating of Low and an overall Return Rating of
High.ii
•
Value Line Select Growth Fund, Inc.* outpaced the category average return of its peers for the three-year and five-year periods ended December 31, 2023 (large
growth category), as measured by Morningstar.1 Additionally, the Fund earned
an overall four-star rating from Morningstar2 in the large growth category among 1,118 funds as of December 31, 2023 based on risk-adjusted returns. Morningstar gave the
Fund an overall Risk Rating of Below Average.iii
•
Value Line Larger Companies Focused Fund, Inc.* outpaced the category average return of its peers for the one-year period ended December 31, 2023 (large growth category),
as measured by Morningstar.1, iv
•
Value Line Asset Allocation Fund, Inc.* outpaced the category average return of its peers for the one-, three-, five-and ten-year periods ended December 31, 2023
(moderate allocation category), as measured by Morningstar.1 Additionally, the Fund earned an overall five-star rating from Morningstar2 in the moderate allocation category among 700 funds as of December 31, 2023 based on risk-adjusted returns. Morningstar gave
the Fund an overall Return Rating of High.v
•
Value Line Capital Appreciation Fund, Inc.* outpaced the category average return of its peers for the one-, five- and 10-year periods ended December 31, 2023 (moderate
allocation category), as measured by Morningstar.1 Additionally, Morningstar gave the Fund an overall Return Rating of Above Average.vi
•
Value Line Core Bond Fund * was given an overall Risk Rating of Below Average by Morningstar.1, vii
On the following pages, the Funds’
portfolio managers discuss the management of their respective Funds during the reporting period. The discussions highlight key factors influencing recent performance of the Funds.
You will also find a Schedule of Investments and financial statements for each of the Funds.
Before reviewing the performance of your individual mutual fund investment(s), we encourage
you to take a brief look at the major factors affecting the financial markets during the 12 months ended December 31, 2023, especially given the newsworthy events of the annual period. With meaningful trends and developments during 2023 in several drivers of the capital markets, we also invite you to take this time to consider a broader diversification strategy by including additional Value Line Funds in your investment portfolio. You can find out more about the entire family of Value Line Funds at our website, www.vlfunds.com.
Economic Review
During the 12 months ended December 31, 2023, the U.S. economy continued to grow despite widespread predictions of a recession. Annualized U.S. Gross Domestic Product (GDP) posted a growth rate of 4.9% for the third quarter of 2023, according to the third
estimate, marking its strongest growth since the fourth quarter of 2021. To compare, U.S. GDP annualized growth was 2.0% for the first quarter of 2023 and 2.1% in the second calendar quarter. The increase in the third quarter primarily reflected increases in consumer spending and inventory investment. Consumer spending rose 3.1%, its biggest gain since the fourth quarter of 2021. The
Federal Reserve Bank of Atlanta estimates U.S. GDP growth to be 2.2% for the fourth quarter of 2023.
3
President’s Letter (continued)
The U.S. labor market
remained strong, as the U.S. economy added approximately 2.7 million jobs in 2023, even as the U.S. unemployment rate edged up from 3.5% in December 2022 to 3.7% in December 2023.
Excluding outsized gains from the rebound from pandemic-era firings and re-hiring in 2021 and 2022, the annual period ended December 31, 2023 was the most robust for job increases since 2015 and the third highest since 2000. That said, jobs added were confined to a few sectors, namely private
education, health care services, leisure and hospitality, social assistance, construction and government. Meanwhile, inflation, as measured by the Consumer Price Index (CPI), fell from 6.5% year over year in December 2022 to 3.4% year over year in December
2023—but was still above the U.S. Federal Reserve’s (Fed) target of 2%. The core CPI, which excludes food and energy, rose 3.9% over the last 12 months. Energy prices actually fell, with the energy index decreasing 2.0% for the 12 months ended December 2023, but the food index increased 2.7% over the same period.
This combination of a resilient labor market and sticky inflation levels prompted the Fed to continue to increase short-term interest rates through the first half of 2023 but to do so in smaller increments. The Fed hiked the targeted federal funds rate by 25 basis points three times during the first half of 2023, bringing it to a range of 5.00% to 5.25%, and then paused in June for the first time in more than a year, leaving rates unchanged to assess economic conditions before setting further policies. (A basis point is 1/100th of a percentage point.)
The Fed then raised the federal funds rate by 25 basis points again in July 2023, bringing it to a range of 5.25% to 5.50%, marking a total of 11 rate hikes since it initiated this
cycle in March 2022. The Fed stayed on hold for the remainder of the calendar year. At its December 2023 meeting, the Fed voted unanimously to hold rates steady with forecasts
indicating three rate cuts in 2024.
As the Fed raised interest rates, mortgage rates reached levels of 7.79% before coming down to a still-high 6.42%. At the same time, a lack of ample inventory to satisfy buyer demand drove the median home price to more than $426,000 in June 2023, moderating
only slightly to a median of about $410,000 by year end. Notably, in December 2023, the total number of homes for sale, including homes that were under contract but not yet sold, increased by 3.6% compared to last year, ending a seven-month streak of annual
total listing declines. Despite this encouraging annual increase, active inventory still remained 36.0% below typical 2017 to 2019 levels.
Notably, several of the challenges that drove some volatility within the U.S. economy did not have a lasting impact. For example, the regional bank crisis that emerged in March 2023 appears to have been isolated and to have subsided by the end of the year without any systemic ramifications for the economy given the orderly unwinding of the affected banks’ assets. The U.S. debt ceiling stalemate of late May/early June caused swings within the financial markets for a time but was settled, albeit at the eleventh hour, as expected, with the ultimately agreed-upon increase in the debt ceiling preventing the government from defaulting on its debt before early 2025. Geopolitical conditions—including the ongoing Russia/Ukraine war, heightened tensions between the U.S. and China, and unrest in the Middle East triggered by Hamas’ October terrorist attack on Israel—drove some volatility and remained of high concern but neither deterred the Fed from focusing on inflation nor weighed on U.S. economic activity during the annual period.
Equity Market Review
Following poor performance in 2022, U.S. equities, as measured by the S&P
500® Index3, returned 26.29% during the 12 months ended December 31, 2023, closing the calendar year with the best fourth quarter since 2003.
Despite a wide range of potential challenges, including a regional bank crisis in March, U.S. equities overall were propelled through most of the first half of the year by economic data, including cooling inflation, which investors thought might indicate an end—or at least a slowing—to the U.S. Fed’s tightening cycle. Following two quarters of strong equity market gains, the broad U.S. equity market stumbled in the third calendar quarter amid disruption in the auto industry and an eleventh hour avoidance of a U.S.
government shutdown. U.S. stocks continued to decline in October, as fresh data muted any near-term expectations for a dovish pivot from the Fed. (Dovish tends to suggest lower interest rates; opposite of hawkish.) However, equities broke a multi-month losing streak in November. Concerns around the federal deficit persisted, but the U.S. Treasury announced it would issue less long-term
debt in the coming months than previously expected. Additionally, the Fed kept rates steady, which investors viewed positively in tandem with its less hawkish tone. The rally was further supported by an October jobs report and inflation data that both showed
signs of softening, reinforcing hopes the Fed could soon be done raising rates. The rally extended into December, as hopes for a soft economic landing were further propelled by fresh data and the Fed’s decision in December to hold rates steady and forecast three rate cuts for 2024. The news amplified the stock market’s momentum, as strong performance broadened outside the “Magnificent Seven” stocks, i.e., the seven mega-cap stocks in the S&P 500 Index that had driven equity performance for much of the year.
Within the U.S. equity market, all segments gained, but large-cap stocks performed best, followed by
mid-cap stocks and then small-cap stocks. (All as measured by the FTSE Russell indices.3) In a reversal from 2022, growth stocks meaningfully outperformed value stocks across the capitalization spectrum of the U.S. equity market for the annual period ended December 31, 2023.
In the S&P 500® Index, nine of the 11 sectors generated positive absolute total returns during the annual
period. In another reversal from 2022, information technology, communication services and consumer discretionary were the strongest performing sectors in the S&P 500® Index
during the annual period. Conversely, utilities and energy were weakest and the only two sectors to post negative absolute returns during the annual period. Consumer staples
generated a modestly positive return but also significantly lagged the S&P
500® Index during the annual period.
4
President’s Letter (continued)
The U.S. equity markets
generally outperformed the international equity markets during the annual period. Developed and emerging market equities, as measured by the MSCI EAFE Index3 and MSCI Emerging Markets Index3, respectively, posted 12-month returns of 18.24% and 9.83%, respectively. As was the case for the U.S. equity markets, international equity markets, both developed and
emerging, rose solidly on the back of softening global inflationary pressures, due in large part to energy prices falling globally; the slowing pace of central bank interest rate hikes; and receding concerns about a global recession—all despite banking pressures, albeit relatively short-lived, that arose in the U.S. and internationally. During the first months of the annual period, international equities were further boosted by China finally lifting its stringent zero-COVID policy, which increased global hopes around both the resolution of supply-chain disruptions as well as economic recovery driven by strong domestic consumption. However, such positive investor sentiment was rather short-lived, as geopolitical tensions between the U.S. and China re-escalated, efforts undertaken by the Chinese government to stimulate its economy were inadequate, and problems in the Chinese real estate sector worsened. Also
muting international equity market returns were ongoing war between Russia and Ukraine and tensions in the Middle East following Hamas’ terrorist attack on Israel in October. However, as in the U.S., both developed and emerging markets equities rallied sharply in the last two months of the annual period, as cooling inflation and strong macroeconomic data created consensus expectations that the U.S. and European interest rate hiking cycles had ended.
Fixed Income Market Review
In a sharp reversal from 2022, the broad U.S. investment grade fixed income market, as measured by the Bloomberg US Aggregate Bond Index4, posted a return of 5.53% during the annual period, attributable primarily to the first and last months of the calendar year when signs that inflation was cooling and other encouraging economic data raised hopes that the U.S. Fed may be approaching
the end of its series of interest rate hikes. Bond prices fell and yields rose within the very short-term and very long-term segments of the yield curve, or spectrum of maturities, during the annual period, but the reverse was true within the intermediate-term
segment of the yield curve, i.e., bonds with maturities of two to ten years. (Remember, there is usually an inverse relationship between bond prices and yield movements, so that bond prices fall when yields increase and vice versa.)
More specifically, for the annual period overall, the yield on the three-month U.S. Treasury bill rose approximately 98 basis points, while the yield on the two-year U.S. Treasury note decreased approximately 18 basis points, and the yield on the five-year
U.S. Treasury note fell approximately 15 basis points. (A basis point is
1/100th of a percentage point.) The yield on the bellwether 10-year U.S. Treasury note actually ended the calendar year where it began—at 3.88%. The yield on the 30-year U.S. Treasury bond rose approximately six basis points during the annual period. Yields rose in the short-term segment of the yield curve primarily in response to the Fed’s interest rate increases. As investor worries about an economic recession abated, the two-year to 10-year portion of the U.S. Treasury yield curve remained inverted, but far more modestly so by the end of 2023, meaning yields on
shorter-term maturities were less high than those on longer-term maturities compared to at the start of the year.
Virtually all fixed income sectors recorded positive absolute returns during the annual period. However,
on a relative basis, lower volatility sectors, such as U.S. Treasuries and securitized assets, including mortgage-backed securities, lagged. Riskier credit sectors, including high yield corporate bonds and emerging markets debt performed especially strongly, as investors appeared to be reaching for yield on the belief the current Fed tightening cycle would end and give way to interest rate cuts. Investment grade corporate bonds were also strong, supported by favorable supply/demand dynamics, but more moderately outperformed the Bloomberg US
Aggregate Bond Index during the annual period.
***
Just as we remain focused on
long-term, strategic investing through all market conditions, we encourage you to do so as well.
We thank you for trusting us to be a part of your long-term, comprehensive investment strategy. We appreciate your confidence in the Value Line Funds and look forward to serving your investment needs in the years ahead just as we have been helping to secure
generations’ financial futures since 1950—based on solid fundamentals, sound investment principles and the power of disciplined and rigorous analytics.
To stay current
with timely commentary and investment insights and/or if you would like additional information on these or other Value Line Funds, we invite you to contact your investment
representative or visit us at www.vlfunds.com.
Sincerely,
Mitchell Appel
President of the Value Line Funds
President of the Value Line Funds
5
President’s Letter (continued)
The opinions expressed
herein are those of EULAV Asset Management and its investment team. The opinions referenced are as of the date of publication and are subject to change due to changes in the market
or economic conditions and may not necessarily come to pass. There is no guarantee of the future performance of any Value Line Funds investment portfolio. Nothing herein should be
construed as a solicitation, recommendation or an offer to buy, sell or hold any securities, other investments or to adopt any investment strategy or strategies. For educational use only. This information is not intended to serve as investment advice. This material is not intended to be relied upon as a forecast or research.
Past performance does not guarantee future results. Investment return and principal value of an investment can fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost; and that current performance may be lower or higher than the performance data quoted. Investors should carefully consider the investment objective, risks, charges and expense of a fund. This and other important information about a fund is contained in the fund’s prospectus. A copy of our funds’ prospectuses can be obtained free of charge by going to our website at www.vlfunds.com or calling toll-free 800.243.2729.
The Value Line Funds are distributed by EULAV Securities LLC.
*
Data, rankings and ratings are based on the Investor Class of the
Fund.
1
Morningstar, Inc. is an investment research and investment management firm headquartered in Chicago, Illinois, United States.
2
The Morningstar RatingTM 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.
i
For Value Line Small Cap Opportunities Fund, Inc.: Ranked by Morningstar
in the 14th percentile for one-year (597
funds), 10th percentile for three-year (563 funds), 28th percentile for five-year (528 funds) and 17th percentile for 10-year (405 funds) periods ended December 31, 2023. All in the
Morningstar small growth category. Five-star Rating for 3-year (563 funds), 5-year (528 funds), 10-year (405 funds) and overall (563 funds) periods ended December
31, 2023. All in the Morningstar small growth category. Morningstar Risk: Low for the 3-year, 5-year, 10-year and overall periods ended December 31, 2023. Morningstar Return: High for the 3-year period ended December 31, 2023 and Above Average for the 5-year, 10-year and overall periods ended December 31, 2023.
ii
For Value Line Mid Cap Focused Fund, Inc.: Ranked by Morningstar in the 40th percentile for one-year (553 funds), 3rd percentile for three-year (523 funds), 5th percentile for five-year (492 funds) and 3rd percentile for ten-year (395 funds) periods ended December 31, 2023. All in the
Morningstar mid-cap growth category. Five-star rating for 3-year (523 funds); 5-year (492 funds); 10-year (395 funds) and overall (523 funds) periods ended
December 31, 2023. All in the Morningstar mid-cap growth category. Morningstar Risk: Low for the 3-year, 5-year, 10-year and overall periods ended December
31, 2023. Morningstar Return: High for the 3-year, 5-year, 10-year and overall periods ended December 31, 2023.
iii
For Value Line Select Growth Fund, Inc.: Ranked by Morningstar in the 70th percentile for one-year (1200 funds), 14th percentile for three-year (1118 funds), 34th percentile for five-year (1031 funds) and 56th percentile for ten-year (810 funds) periods ended December 31, 2023. All in the
Morningstar large growth category. Four-star rating for 3-year (1118 funds), 5-year (1031 funds) and overall (1118 funds) periods ended December 31, 2023;
three-star rating for 10-year (810 funds) period ended December 31, 2023. All in the Morningstar large growth category. Morningstar Risk: Average for the 3-year period ended December 31, 2023 and Below Average for the 5-year, 10-year and overall periods ended December 31, 2023.
iv
For Value Line Larger Companies Focused Fund, Inc: Ranked by Morningstar
in the 2nd percentile for one-year (1200
funds), 89th percentile for three-year (1118 funds), 86th percentile for five-year (1031 funds) and 57th percentile for 10-year (810 funds) periods ended December 31, 2023. All in the
Morningstar large growth category.
6
President’s Letter (continued)
v
For Value Line Asset Allocation Fund, Inc.: Ranked by Morningstar in the
5th percentile for one-year (754 funds),
26th percentile for three-year (700 funds), 9th percentile for five-year (658 funds) and 7th percentile for 10-year (493 funds) periods ended December 31, 2023. All in the
Morningstar moderate allocation category. Four-star rating for 3-year (700 funds) period ended December 31, 2023; five-star rating for 5-year (658 funds), 10-year
(493 funds) and overall (700 funds) periods ended December 31, 2023. All in the moderate allocation category. Morningstar Return: Above Average for the 3-year period ended December 31, 2023 and High for the 5-year, 10-year and overall periods ended December 31, 2023.
vi
For Value Line Capital Appreciation Fund, Inc: Ranked by Morningstar in
the 1st percentile for one-year (754 funds),
97th percentile for three-year (700 funds), 6th percentile for five-year (658 funds) and 5th percentile for 10-year (493 funds) periods ended December 31, 2023. All in the
Morningstar moderate allocation category. Morningstar Return: Low for the 3-year period ended December 31, 2023; High for the 5-year and 10-year periods ended
December 31, 2023; and Above Average for the overall period ended December 31, 2023.
vii
For Value Line Core Bond Fund: Morningstar Risk: Below Average for the 3-year, 5-year, 10-year and overall periods ended December 31, 2023.
3
The S&P 500® Index consists of 500 stocks that are traded on the
New York Stock Exchange, American Stock Exchange and the NASDAQ national Market System and is representative of the broad stock market. The MSCI EAFE Index is an
equity index that captures large-cap and mid-cap representation across 21 developed markets countries around the world, excluding the U.S. and Canada. The index covers approximately 85% of the free float-adjusted market capitalization in each country. The MSCI Emerging Markets Index captures large-cap and mid-cap representation across 27 emerging markets countries. The index covers approximately 85% of the free float-adjusted market capitalization in each country. The FTSE Russell indices are a broad range of U.S. indices that allow investors to track current and historical market performance by specific size, investment style and other market characteristics. These are unmanaged indices and do not reflect charges, expenses or taxes, and it is not possible to directly invest in these indices.
4
The Bloomberg US Aggregate Bond Index is a broad-based benchmark that
measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including U.S. Treasuries, government-related and corporate securities,
MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS. This is an unmanaged index and does not reflect charges, expenses or taxes, which are deducted from the Fund’s return. It is not possible to directly invest in this index.
7
Value Line Small Cap Opportunities Fund, Inc.
PORTFOLIO
MANAGEMENT COMMENTARY (unaudited)
INVESTMENT OBJECTIVE
The Fund’s investment objective is long-term growth of capital.
Manager Discussion of Fund Performance
Below, Fund portfolio manager Stephen E. Grant discusses the Fund’s performance
and positioning for the 12 months ended December 31, 2023.
How did the Fund perform during the annual period?
The Fund’s Investor Class generated a total return of 22.00% during the 12 months ended December 31, 2023. This compares to the 16.93% return of the Fund’s benchmark, the Russell 2000® Index1, during the same
reporting period.
What key factors were responsible for the Fund’s
performance during the 12-month reporting period?
The Fund significantly outperformed the Russell 2000® Index on a relative basis during the 12-month reporting period due both to effective stock selection and sector
allocation.
Which equity market sectors most significantly affected Fund
performance?
Having a significantly overweighted allocation to industrials, which was the
strongest performing sector in the Russell 2000® Index during the annual period, contributed most positively to the Fund’s relative results. Effective individual stock selection in the information technology sector further buoyed the Fund’s performance. The Fund also benefited from strong stock selection in and having an underweighted exposure to the relatively weak health care sector.
Only partially offsetting these positive contributors was the dampening effect of weak stock selection in the materials and consumer staples sectors. Having a position in cash, albeit modest, during an annual period when the Russell 2000® Index rallied, also
detracted.
What were some of the Fund’s best-performing individual stocks?
Among the individual stocks that contributed most positively to the Fund’s relative results were
ePlus, which provides information technology solutions for data center, cloud computing, security, managed and professional services, lease financing and proprietary software; TopBuild, an insulation installation services provider; and Lennox International, a provider of climate control products for the HVAC and refrigeration markets. ePlus and Lennox International each enjoyed a robust double-digit share price gain and TopBuild experienced a triple-digit share price gain during the reporting period, in each case because of stronger than expected operating results.
Which stocks
detracted from the Fund’s performance during the annual period?
During the reporting
period, among the stocks that detracted most from the Fund’s relative performance were positions in Exponent, an engineering and scientific consulting firm; Silgan Holdings, a
sustainable packaging provider for consumer goods products; and Crocs, a casual footwear manufacturer. Each of these stocks posted a double-digit negative return, in each case
because of weaker than expected operating results.
How did the Fund use derivatives and similar instruments during the reporting period?
The Fund did not use derivatives as part of its strategy during the reporting period.
Did the Fund make any significant purchases or sales during the annual period?
Among the new Fund positions established during the reporting period were Federal Signal, a manufacturer and supplier of environmental solutions and safety & security systems for municipal, governmental, industrial and commercial customers; Badger Meter, a water metering and flow solutions company; and Emcor Group, a mechanical and electrical construction, industrial and
energy infrastructure and building services firm. The qualities we seek in new investments include a favorable history of both earnings and stock price growth and strong recent operating performance.
8
Value Line Small Cap Opportunities Fund, Inc. (continued)
Conversely, among those
positions eliminated from the Fund’s portfolio during the reporting period were Omnicell, a provider of an integrated suite of clinical infrastructure and workflow automation
solutions for healthcare facilities; Everbridge, an enterprise software company that offers applications providing information about critical events to help with personal safety and
business continuity; and Rapid7, a cybersecurity company. In each case, these positions were sold because we believed they were no longer delivering the consistent long-term earnings growth we seek.
Were there any notable changes in the Fund’s sector weightings during the 12-month period?
During the annual period, we shifted from overweight allocations within the Fund to rather neutral
positions relative to the Russell 2000® Index in the consumer discretionary and materials sectors.
How was the Fund positioned relative to its benchmark index at the end of December 2023?
As of December 31, 2023, the Fund was overweighted relative to the Russell 2000® Index in the industrials and information technology sectors. The Fund was underweighted relative to the Russell 2000® Index in the health care, financials, communication services and utilities sectors and had a rather neutral exposure relative
to the Russell 2000® Index in consumer staples, consumer discretionary and materials on the same date. The Fund had no exposure to the energy or real estate sectors on December 31, 2023.
What is your tactical view and strategy for the months ahead?
As always, we intend to stay true to our time-tested investment discipline going forward, seeking to
invest in companies that have demonstrated a solid history of consistent growth in both their earnings and stock price. We believe these companies possess enviable portfolios of proprietary products and services that give them strong market positions and make them less vulnerable to
swings in national and international economic conditions. In our experience, the stocks of these companies tend to be less volatile than the average small-cap stock, and therefore the Fund has historically provided a smoother ride to investors than its peer group average. At the same time, however, past performance is no guarantee of future results, and small-cap stocks in general are often more volatile than larger-cap stocks. Accepting the short-term ebbs and flows inevitable in the stock market, we believe investments in these companies may well provide superior returns to our shareholders maintaining a long-term perspective.
1
The Russell 2000® Index is representative of the smaller capitalization
stocks traded in the United States.
9
Value Line Small Cap Opportunities Fund, Inc.
| Ten Largest Holdings* |
|
|
|
| Issue |
Shares |
Value |
Percentage of
Net Assets |
| SPS
Commerce, Inc. |
104,500 |
$20,256,280 |
3.8
% |
| RLI Corp. |
131,900 |
17,558,528 |
3.3
% |
| Comfort Systems USA, Inc. |
75,100 |
15,445,817 |
2.9
% |
| AAON, Inc. |
208,500 |
15,401,895 |
2.9
% |
| RBC
Bearings, Inc. |
52,500 |
14,956,725 |
2.8
% |
| Exponent, Inc. |
163,700 |
14,412,148 |
2.7
% |
| ePlus, Inc. |
177,100 |
14,139,664 |
2.7
% |
| Churchill Downs, Inc. |
102,272 |
13,799,561 |
2.6
% |
| CACI
International, Inc. |
42,500 |
13,764,050 |
2.6
% |
| Watts Water Technologies, Inc. |
61,647 |
12,843,536 |
2.4
% |
| Asset Allocation — Percentage of Net Assets
|
| |
| Sector Weightings — Percentage of Total Investments In Securities* |
| |
| * |
Excludes short-term investments, if any. |
10
Value Line Small Cap Opportunities Fund, Inc.
The following graph compares
the performance of the Value Line Small Cap Opportunities Fund, Inc. to that of the Russell 2000 Index*** (the “Index”). The Value Line Small Cap Opportunities Fund,
Inc. is a professionally managed mutual fund, while the Index is not available for investment and is unmanaged. The returns for the Index do not reflect charges, expenses or taxes
but do include the reinvestment of dividends, if any. The comparison is shown for illustrative purposes only.
Comparison of a Change in Value of a $10,000 Investment in the Value Line Small Cap Opportunities Fund, Inc. and the Russell 2000® Index**
Value Line Small Cap Opportunities Fund, Inc.
As of 12/31/2023
Performance Data: **
Average Annual Total Returns (For year ended 12/31/2023)
| |
1 yr |
5 Yrs |
10 Yrs |
|
| Investor Class |
|
|
|
|
| Value
Line Small Cap Opportunities Fund, Inc. |
22.00 % |
12.49 % |
9.61
% |
|
| Russell 2000® Index*** |
16.93 % |
9.97 % |
7.16 % |
|
| |
1 yr |
5 Yrs |
|
Since Inception 11/2/2015 |
| Institutional Class |
|
|
|
|
| Value
Line Small Cap Opportunities Fund, Inc. |
22.29 % |
12.77 % |
|
10.63 % |
| Russell 2000® Index*** |
16.93 % |
9.97
% |
|
8.54
% |
**
The performance data quoted represent past performance and are no guarantee
of future performance. The investment return and principal value of an investment will fluctuate so that an investment, when redeemed, may be worth more or less
than its original cost. The performance data includes reinvestment of all dividends and distributions but does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
***
The Russell 2000® Index is representative of the smaller capitalization stocks traded in the United States.
11
Value Line Small Cap Opportunities Fund, Inc.
Schedule
of Investments
| Shares |
|
Value |
| COMMON STOCKS 95.1% | ||
| CONSUMER DISCRETIONARY 10.4% | ||
| |
APPAREL 1.3% | |
| 71,700 |
Crocs, Inc.(1) |
$6,697,497 |
| |
AUTO PARTS & EQUIPMENT 0.4% | |
| 16,500 |
Visteon Corp.(1) |
2,060,850 |
| |
ENGINEERING & CONSTRUCTION 1.7% | |
| 24,400 |
TopBuild Corp.(1) |
9,131,944 |
| |
ENTERTAINMENT 2.6% | |
| 102,272 |
Churchill Downs, Inc. |
13,799,561 |
| |
HOME BUILDERS 1.3% | |
| 20,800 |
Cavco Industries, Inc.(1) |
7,209,696 |
| |
HOUSEHOLD PRODUCTS 0.5% | |
| 23,000 |
Helen of Troy Ltd.(1) |
2,778,630 |
| |
LEISURE TIME 0.6% | |
| 42,700 |
Planet Fitness, Inc. Class A(1) |
3,117,100 |
| |
RETAIL 2.0% | |
| 41,600 |
Texas Roadhouse, Inc. |
5,084,768 |
| 21,800 |
Wingstop, Inc. |
5,593,444 |
| |
|
10,678,212 |
| |
|
55,473,490 |
| CONSUMER STAPLES 2.4% | ||
| |
FOOD 2.4% | |
| 69,900 |
J & J Snack Foods Corp. |
11,683,086 |
| 5,600 |
Lancaster Colony Corp. |
931,784 |
| |
|
12,614,870 |
| FINANCIALS 10.4% | ||
| |
BANKS 2.0% | |
| 206,496 |
First Financial Bankshares, Inc.
|
6,256,829 |
| 38,900 |
Walker & Dunlop, Inc. |
4,318,289 |
| |
|
10,575,118 |
| |
DIVERSIFIED FINANCIALS 1.4% | |
| 104,422 |
Stifel Financial Corp. |
7,220,781 |
| |
INSURANCE 7.0% | |
| 44,400 |
Primerica, Inc. |
9,135,744 |
| 131,900 |
RLI Corp. |
17,558,528 |
| 108,193 |
Selective Insurance Group, Inc.
|
10,763,040 |
| |
|
37,457,312 |
| |
|
55,253,211 |
| HEALTHCARE 8.2% | ||
| |
COMMERCIAL SERVICES 0.6% | |
| 40,651 |
AMN Healthcare Services, Inc.(1) |
3,043,947 |
| |
HEALTHCARE PRODUCTS 1.3% | |
| 22,700 |
CONMED Corp. |
2,485,877 |
| 18,100 |
Penumbra, Inc.(1) |
4,552,874 |
| |
|
7,038,751 |
| |
HEALTHCARE SERVICES 6.3% | |
| 19,000 |
Chemed Corp. |
11,110,250 |
| 76,500 |
Ensign Group, Inc. |
8,584,065 |
| 22,100 |
Medpace Holdings, Inc.(1) |
6,774,313 |
| Shares |
|
Value |
| COMMON STOCKS 95.1% (continued) | ||
| HEALTHCARE 8.2% (continued) | ||
| |
HEALTHCARE SERVICES 6.3% (continued) | |
| 77,800 |
US Physical Therapy, Inc. |
$7,246,292 |
| |
|
33,714,920 |
| |
|
43,797,618 |
| INDUSTRIALS 42.1% | ||
| |
BUILDING MATERIALS 6.1% | |
| 208,500 |
AAON, Inc. |
15,401,895 |
| 26,500 |
Lennox International, Inc. |
11,859,280 |
| 64,000 |
Trex Co., Inc.(1) |
5,298,560 |
| |
|
32,559,735 |
| |
COMMERCIAL SERVICES 4.2% | |
| 20,100 |
ASGN, Inc.(1) |
1,933,017 |
| 48,500 |
FTI Consulting, Inc.(1) |
9,658,775 |
| 31,400 |
Healthcare Services Group, Inc.(1) |
325,618 |
| 33,200 |
Insperity, Inc. |
3,891,704 |
| 55,400 |
TriNet Group, Inc.(1) |
6,588,722 |
| |
|
22,397,836 |
| |
COMPUTERS 6.1% | |
| 42,500 |
CACI International, Inc. Class A(1) |
13,764,050 |
| 397,500 |
ExlService Holdings, Inc.(1) |
12,262,875 |
| 11,966 |
MAXIMUS, Inc. |
1,003,469 |
| 44,900 |
Science Applications International
Corp. |
5,581,968 |
| |
|
32,612,362 |
| |
DISTRIBUTION/WHOLESALE 1.5% | |
| 50,000 |
SiteOne Landscape Supply, Inc.(1) |
8,125,000 |
| |
ELECTRICAL EQUIPMENT 0.6% | |
| 31,200 |
EnerSys |
3,149,952 |
| |
ELECTRONICS 2.4% | |
| 93,000 |
Woodward, Inc. |
12,660,090 |
| |
ENGINEERING & CONSTRUCTION 7.3% | |
| 75,100 |
Comfort Systems USA, Inc. |
15,445,817 |
| 42,600 |
EMCOR Group, Inc. |
9,177,318 |
| 163,700 |
Exponent, Inc. |
14,412,148 |
| |
|
39,035,283 |
| |
HAND/MACHINE TOOLS 1.9% | |
| 24,300 |
Franklin Electric Co., Inc. |
2,348,595 |
| 45,100 |
MSA Safety, Inc. |
7,614,233 |
| |
|
9,962,828 |
| |
MACHINERY - DIVERSIFIED 3.9% | |
| 23,300 |
Applied Industrial Technologies,
Inc. |
4,023,677 |
| 13,500 |
Kadant, Inc. |
3,784,185 |
| 61,647 |
Watts Water Technologies, Inc. Class
A |
12,843,536 |
| |
|
20,651,398 |
| |
METAL FABRICATE/HARDWARE 2.8% | |
| 52,500 |
RBC Bearings, Inc.(1) |
14,956,725 |
| |
MISCELLANEOUS MANUFACTURERS 3.4% | |
| 19,400 |
Carlisle Cos., Inc. |
6,061,142 |
| 13,200 |
Enpro, Inc. |
2,068,968 |
| 132,003 |
Federal Signal Corp. |
10,129,910 |
| |
|
18,260,020 |
See Notes to Financial Statements.
12
December
31, 2023
| Shares |
|
Value |
| COMMON STOCKS 95.1% (continued) | ||
| INDUSTRIALS 42.1% (continued) | ||
| |
RETAIL 0.4% | |
| 48,600 |
Rush Enterprises, Inc. Class A
|
$2,444,580 |
| |
TRANSPORTATION 1.2% | |
| 33,800 |
Landstar System, Inc. |
6,545,370 |
| |
TRUCKING & LEASING 0.3% | |
| 11,500 |
GATX Corp. |
1,382,530 |
| |
|
224,743,709 |
| INFORMATION TECHNOLOGY 16.7% | ||
| |
COMMERCIAL SERVICES 0.4% | |
| 36,600 |
Alarm.com Holdings, Inc.(1) |
2,365,092 |
| |
COMPUTERS 2.4% | |
| 60,800 |
Crane NXT Co. |
3,457,696 |
| 29,200 |
Insight Enterprises, Inc.(1) |
5,173,948 |
| 21,700 |
Qualys, Inc.(1) |
4,259,276 |
| |
|
12,890,920 |
| |
ELECTRICAL EQUIPMENT 0.5% | |
| 9,200 |
Littelfuse, Inc. |
2,461,552 |
| |
ELECTRONICS 2.6% | |
| 76,100 |
Badger Meter, Inc. |
11,747,557 |
| 21,400 |
TD SYNNEX Corp. |
2,302,854 |
| |
|
14,050,411 |
| |
INTERNET 2.7% | |
| 177,100 |
ePlus, Inc.(1) |
14,139,664 |
| |
MISCELLANEOUS MANUFACTURERS 2.2% | |
| 61,700 |
Fabrinet(1) |
11,743,361 |
| |
SOFTWARE 5.9% | |
| 45,900 |
Five9, Inc.(1) |
3,611,871 |
| 104,500 |
SPS Commerce, Inc.(1) |
20,256,280 |
| 76,400 |
Workiva, Inc.(1) |
7,756,892 |
| |
|
31,625,043 |
| |
|
89,276,043 |
| Shares |
|
Value |
| COMMON STOCKS 95.1% (continued) | ||
| MATERIALS 4.0% | ||
| |
CHEMICALS 1.9% | |
| 30,300 |
Balchem Corp. |
$4,507,125
|
| 26,700 |
Quaker Chemical Corp. |
5,698,314 |
| |
|
10,205,439 |
| |
PACKAGING & CONTAINERS 2.1% | |
| 28,200 |
AptarGroup, Inc. |
3,486,084 |
| 172,600 |
Silgan Holdings, Inc. |
7,810,150 |
| |
|
11,296,234 |
| |
|
21,501,673 |
| UTILITIES 0.9% | ||
| |
WATER 0.9% | |
| 59,900 |
American States Water Co. |
4,817,158 |
| TOTAL COMMON STOCKS (Cost $263,723,384) |
507,477,772 | |
| SHORT-TERM INVESTMENTS 4.7% | ||
| |
MONEY MARKET FUNDS 4.7% | |
| 25,216,227 |
State Street Institutional U.S. Government Money Market Fund, Premier Class, 5.32%(2) |
25,216,227 |
| TOTAL SHORT-TERM INVESTMENTS (Cost $25,216,227) |
25,216,227 | |
| TOTAL INVESTMENTS IN SECURITIES 99.8% (Cost $288,939,611) |
$532,693,999 | |
| CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES 0.2% |
1,254,403 | |
| NET ASSETS 100.0% |
$533,948,402 | |
| (1) |
Non-income producing. |
| (2) |
Rate reflects 7 day yield as of December 31, 2023. |
The following table summarizes
the inputs used to value the Fund's investments in securities as of December 31, 2023 (See
Note 1(B)):
| Investments in Securities: |
Level 1 |
Level 2 |
Level 3 |
Total |
| Assets |
|
|
|
|
| Common
Stocks* |
$507,477,772 |
$— |
$— |
$507,477,772 |
| Short-Term Investments |
25,216,227 |
— |
— |
25,216,227 |
| Total Investments in Securities
|
$532,693,999 |
$— |
$— |
$532,693,999 |
| * |
See Schedule of Investments for further breakdown by category. |
See Notes to Financial Statements.
13
Value Line Mid Cap Focused Fund, Inc.
PORTFOLIO
MANAGEMENT COMMENTARY (unaudited)
INVESTMENT OBJECTIVE
The Fund’s sole investment objective is long-term growth of capital.
Manager Discussion of Fund Performance
Below, Value Line Mid Cap Focused Fund, Inc. portfolio manager Stephen E. Grant discusses the Fund’s performance and positioning for the 12 months ended December 31, 2023.
How did the Fund perform during the annual period?
The Fund’s Investor Class generated a total return of 22.11% during the 12 months ended December 31, 2023. This compares to the 26.29% return of the Fund’s benchmark, the S&P 500® Index, during the same annual period. The Fund's secondary benchmark, the S&P MidCap 400® Index, posted a return of 16.44% during the same annual period.
What key factors were responsible for the Fund’s performance during the 12-month
reporting period?
While the Fund delivered strong double-digit absolute returns, it underperformed the S&P 500® Index on a relative basis during the 12-month reporting period primarily because mid-cap stocks materially lagged their large-cap counterparts during the reporting
period, making the S&P 500® Index, a large-cap index, a difficult benchmark to outpace for this Fund.
Which equity market sectors most significantly affected Fund performance?
The Fund, given its mid-cap focus, did not own any of the mega-cap stocks that drove the strongest sector of the S&P 500® Index during the
reporting period, namely information technology. Also detracting from the Fund’s relative results was its lack of exposure to communication services, which was the
second-strongest sector in the S&P 500® Index during the annual period,
and its underweighted allocation to consumer discretionary, the third-strongest sector in the S&P 500® Index during the annual period, each similarly driven by mega-cap companies. Weak individual stock selection in financials and having a position, albeit modest, in cash during an annual period when the S&P 500® Index rallied, further dampened the Fund’s relative results.
These detractors were partially offset by effective stock selection in the industrials and consumer staples sectors, which contributed positively. Having an underweighted allocation to consumer staples and having no holdings in energy and utilities—the three weakest sectors in the S&P 500® Index during the annual period—further boosted the Fund’s relative results.
Which stocks detracted from the Fund’s performance during the annual period?
During the annual period, the Fund’s relative results were hurt most by not having positions in the five biggest positive contributors to the S&P 500®
Index—mega-cap information technology, communication services and consumer discretionary giants NVIDIA, Microsoft, Meta Platforms, Apple and Amazon.com, which each rebounded
robustly from their heavy losses in 2022.
What were some of the Fund’s
best-performing individual stocks?
Among the individual stocks that contributed most
positively to the Fund’s relative results were Fair Isaac, also known as FICO, which provides credit scores, analytics software solutions and services, and risk management
tools for businesses worldwide; TransDigm Group, a designer, producer and supplier of commercial and military aerospace components; and Lennox International, a provider of climate control products for the HVAC and refrigeration markets. Each of these three companies enjoyed a robust double-digit
share price gain during the annual period because of stronger than expected operating performance.
How did the Fund use derivatives and similar instruments during the reporting period?
The Fund did not use derivatives during the reporting period.
Did the Fund make any significant purchases or sales during the annual period?
New positions added to the Fund’s portfolio during the annual period included Monolithic Power Systems, which engages in the design, development, marketing and sale of semiconductor-based power electronics solutions for the computing and storage,
automotive, industrial, communications and consumer markets; West Pharmaceutical Services, which manufactures and markets pharmaceuticals, biologics, vaccines and consumer healthcare products; and CDW, a provider of integrated information technology
solutions. In our view, each has established a consistent history of strong earnings growth and stock price growth.
14
Value Line Mid Cap Focused Fund, Inc. (continued)
Conversely, we eliminated
the Fund’s position in CooperCompanies, a medical device company, because we believed it was no longer delivering the consistent long-term growth we seek. This focused Fund
ended the annual period with 37 holdings in its portfolio as compared to 34 at the start of the calendar year.
Were there any notable changes in the Fund’s weightings during the 12-month
period?
We shifted during the annual period from having a rather neutral position relative to
the S&P 500® Index in health care to an overweight position. We also shifted from having a rather neutral position relative to the S&P 500® Index in real estate to an underweight position.
How
was the Fund positioned relative to its benchmark index at the end of December 2023?
As of
December 31, 2023, the Fund was overweighted relative to the S&P 500®
Index in the information technology, industrials and health care sectors. The Fund was underweighted relative to the S&P 500® Index in the consumer discretionary, consumer staples, financials, materials and real estate sectors. On December 31, 2023, the Fund held no positions at all in the energy, communication services or utilities sectors.
What is your tactical view and strategy for the months ahead?
Regardless of market conditions, we intend to stay true to our time-tested investment discipline going forward, seeking to invest in companies that have demonstrated a solid history of consistent growth in both their earnings and stock price. In our view, these
companies possess attractive portfolios of proprietary products and services that give them strong market positions and make them less vulnerable to swings in national and international economic conditions. At the same time, we believe the underlying stocks of these companies tend to be less volatile than the average stock in the S&P 500® Index. By maintaining our investment discipline, the Fund has historically provided a smoother ride to investors than its
peer group averages. Putting aside short-term ebbs and flows in the equity market, we believe the Fund’s investments are likely to provide superior returns to our shareholders
over the long term.
15
Value Line Mid Cap Focused Fund, Inc.
| Ten Largest Holdings* |
|
|
|
| Issue |
Shares |
Value |
Percentage of
Net Assets |
| Gartner, Inc. |
141,700 |
$63,922,287 |
5.1
% |
| CDW Corp. |
276,100 |
62,763,052 |
5.0
% |
| MSCI,
Inc. |
103,302 |
58,432,776 |
4.6
% |
| Lennox International, Inc. |
127,700 |
57,148,304 |
4.5
% |
| Tyler
Technologies, Inc. |
136,041 |
56,881,463 |
4.5
% |
| STERIS PLC |
245,100 |
53,885,235 |
4.3
% |
| Pool
Corp. |
134,961 |
53,810,300 |
4.2
% |
| TransDigm Group, Inc. |
51,300 |
51,895,080 |
4.1
% |
| HEICO
Corp. |
285,293 |
51,030,359 |
4.1
% |
| Fair Isaac Corp. |
39,900 |
46,443,999 |
3.7
% |
| Asset Allocation — Percentage of Net Assets
|
| |
| Sector Weightings — Percentage of Total Investments In Securities* |
| |
| * |
Excludes short-term investments, if any. |
16
Value Line Mid Cap Focused Fund, Inc.
The following graph compares
the performance of the Value Line Mid Cap Focused Fund, Inc. to that of the S&P 500® Index*** and the S&P MidCap 400® Index**** (the “Indices”). The Value Line Mid Cap Focused Fund, Inc. is a
professionally managed mutual fund, while the Indices are not available for investment and are unmanaged. The returns for the Indices do not reflect charges, expenses or taxes, but do include the reinvestment of dividends, if any. The comparison is shown for illustrative purposes only.
Comparison of a Change in Value of a $10,000 Investment in the Value Line Mid Cap Focused Fund, Inc., the S&P 500® Index and the S&P MidCap 400® Index**
Value Line Mid Cap Focused Fund, Inc.
As of 12/31/2023
Performance Data: **
Average Annual Total Returns (For year ended 12/31/2023)
| |
1 Yr |
5 Yrs |
10 Yrs |
|
| Investor Class |
|
|
|
|
| Value
Line Mid Cap Focused Fund, Inc. |
22.11 % |
16.53 % |
12.76 % |
|
| S&P 500® Index*** |
26.29 % |
15.69 % |
12.03 % |
|
| S&P MidCap 400® Index**** |
16.44 % |
12.62 % |
9.27 % |
|
| |
1 Yr |
5 Yrs |
|
Since Inception 8/14/2017 |
| Institutional Class |
|
|
|
|
| Value Line Mid Cap Focused Fund, Inc. |
22.38 % |
16.83 % |
|
15.01 % |
| S&P 500® Index*** |
26.29 % |
15.69 % |
|
13.04 % |
| S&P MidCap 400® Index**** |
16.44 % |
12.62 % |
|
9.65
% |
**
The performance data quoted represent past performance and are no guarantee
of future performance. The investment return and principal value of an investment will fluctuate so that an investment, when redeemed, may be worth more or less
than its original cost. The performance data includes reinvestments of all dividends and distributions but does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
***
The S&P 500® Index is an unmanaged index that is representative of
the larger-capitalization stocks traded in the United States.
****The S&P
MidCap 400® Index is an unmanaged
index that is representative of the mid-capitalization stocks traded in the
United States.
17
Value Line Mid Cap Focused Fund, Inc.
Schedule
of Investments
| Shares |
|
Value |
| COMMON STOCKS 94.9% | ||
| CONSUMER DISCRETIONARY 6.3% | ||
| |
DISTRIBUTION/WHOLESALE 4.2% | |
| 134,961 |
Pool Corp. |
$53,810,300 |
| |
ENTERTAINMENT 2.1% | |
| 194,490 |
Churchill Downs, Inc. |
26,242,536 |
| |
|
80,052,836 |
| CONSUMER STAPLES 0.8% | ||
| |
FOOD 0.8% | |
| 59,800 |
J & J Snack Foods Corp. |
9,994,972 |
| FINANCIALS 12.3% | ||
| |
INSURANCE 6.4% | |
| 304,392 |
American Financial Group, Inc.
|
36,189,165 |
| 637,004 |
W R Berkley Corp. |
45,048,923 |
| |
|
81,238,088 |
| |
SOFTWARE 5.9% | |
| 32,800 |
Fiserv, Inc.(1) |
4,357,152 |
| 66,708 |
Jack Henry & Associates, Inc.
|
10,900,754 |
| 103,302 |
MSCI, Inc. |
58,432,776 |
| |
|
73,690,682 |
| |
|
154,928,770 |
| HEALTHCARE 17.5% | ||
| |
ELECTRONICS 1.4% | |
| 14,100 |
Mettler-Toledo International, Inc.(1) |
17,102,736 |
| |
HEALTHCARE PRODUCTS 10.3% | |
| 55,900 |
IDEXX Laboratories, Inc.(1) |
31,027,295 |
| 245,100 |
STERIS PLC |
53,885,235 |
| 128,616 |
West Pharmaceutical Services, Inc.
|
45,288,266 |
| |
|
130,200,796 |
| |
HEALTHCARE SERVICES 5.8% | |
| 61,900 |
Chemed Corp. |
36,196,025 |
| 13,800 |
ICON PLC(1) |
3,906,366 |
| 145,000 |
IQVIA Holdings, Inc.(1) |
33,550,100 |
| |
|
73,652,491 |
| |
|
220,956,023 |
| INDUSTRIALS 20.8% | ||
| |
AEROSPACE/DEFENSE 8.2% | |
| 285,293 |
HEICO Corp. |
51,030,359 |
| 51,300 |
TransDigm Group, Inc. |
51,895,080 |
| |
|
102,925,439 |
| |
BUILDING MATERIALS 4.5% | |
| 127,700 |
Lennox International, Inc. |
57,148,304 |
| |
COMMERCIAL SERVICES 3.5% | |
| 57,193 |
Cintas Corp. |
34,467,933 |
| 231,049 |
Rollins, Inc. |
10,089,910 |
| |
|
44,557,843 |
| |
ENGINEERING & CONSTRUCTION 1.2% | |
| 166,400 |
Exponent, Inc. |
14,649,856 |
| |
ENVIRONMENTAL CONTROL 3.4% | |
| 289,506 |
Waste Connections, Inc. |
43,214,561 |
| |
|
262,496,003 |
| Shares |
|
Value |
| COMMON STOCKS 94.9% (continued) | ||
| INFORMATION TECHNOLOGY 35.2% | ||
| |
COMMERCIAL SERVICES 5.1% | |
| 141,700 |
Gartner, Inc.(1) |
$63,922,287 |
| |
COMPUTERS 2.9% | |
| 199,510 |
CGI, Inc.(1) |
21,389,467 |
| 53,360 |
EPAM Systems, Inc.(1) |
15,866,062 |
| |
|
37,255,529 |
| |
INTERNET 5.0% | |
| 276,100 |
CDW Corp. |
62,763,052 |
| |
MISCELLANEOUS MANUFACTURERS 2.5% | |
| 72,200 |
Teledyne Technologies, Inc.(1) |
32,222,138 |
| |
SEMICONDUCTORS 3.5% | |
| 69,311 |
Monolithic Power Systems, Inc.
|
43,719,993 |
| |
SOFTWARE 13.6% | |
| 45,400 |
ANSYS, Inc.(1) |
16,474,752 |
| 149,600 |
Cadence Design Systems, Inc.(1) |
40,746,552 |
| 39,900 |
Fair Isaac Corp.(1) |
46,443,999 |
| 19,400 |
Roper Technologies, Inc. |
10,576,298 |
| 136,041 |
Tyler Technologies, Inc.(1) |
56,881,463 |
| |
|
171,123,064 |
| |
TELECOMMUNICATIONS 2.6% | |
| 67,000 |
Motorola Solutions, Inc. |
20,977,030 |
| 61,800 |
Nice Ltd. ADR(1)(2) |
12,329,718 |
| |
|
33,306,748 |
| |
|
444,312,811 |
| MATERIALS 1.0% | ||
| |
PACKAGING & CONTAINERS 1.0% | |
| 100,700 |
AptarGroup, Inc. |
12,448,534 |
| REAL ESTATE 1.0% | ||
| |
REITS 1.0% | |
| 172,300 |
Equity Lifestyle Properties, Inc.
REIT |
12,154,042 |
| TOTAL COMMON STOCKS (Cost $871,263,668) |
1,197,343,991 | |
| SHORT-TERM INVESTMENTS 4.5% | ||
| |
MONEY MARKET FUNDS 4.5% | |
| 57,506,174 |
State Street Institutional U.S. Government Money Market Fund, Premier Class, 5.32%(3) |
57,506,174 |
| TOTAL SHORT-TERM INVESTMENTS (Cost $57,506,174) |
57,506,174 | |
| TOTAL INVESTMENTS IN SECURITIES 99.4% (Cost $928,769,842) |
$1,254,850,165 | |
| CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES 0.6% |
7,014,224 | |
| NET ASSETS 100.0% |
$1,261,864,389 | |
| (1) |
Non-income producing. |
| (2) |
A portion or all of the security was held on loan. As of December 31, 2023, the market value of the securities on loan was $10,919,581. |
| (3) |
Rate reflects 7 day yield as of December 31, 2023. |
| ADR |
American Depositary Receipt. |
| REITS |
Real Estate Investment Trusts. |
See Notes to Financial Statements.
18
December
31, 2023
The following table
summarizes the inputs used to value the Fund's investments in securities as of December 31, 2023 (See Note 1(B)):
| Investments in Securities: |
Level 1 |
Level 2 |
Level 3 |
Total |
| Assets |
|
|
|
|
| Common
Stocks* |
$1,197,343,991 |
$— |
$— |
$1,197,343,991 |
| Short-Term Investments |
57,506,174 |
— |
— |
57,506,174 |
| Total Investments in Securities
|
$1,254,850,165 |
$— |
$— |
$1,254,850,165 |
| * |
See Schedule of Investments for further breakdown by category. |
See Notes to Financial Statements.
19
Value Line Select Growth Fund, Inc.
PORTFOLIO
MANAGEMENT COMMENTARY (unaudited)
INVESTMENT OBJECTIVE
The Fund’s sole investment objective is long-term growth of capital.
Manager Discussion of Fund Performance
Below, Value Line Select Growth Fund, Inc. portfolio manager Stephen E. Grant discusses
the Fund’s performance and positioning for the 12 months ended December 31,
2023.
How did
the Fund perform during the annual period?
The Fund’s Investor Class generated a total
return of 31.11% during the 12 months ended December 31, 2023. This compares to the 26.29% return of the Fund’s benchmark, the S&P 500® Index, during the annual period.
What key factors were responsible for the Fund’s performance during the 12-month
reporting period?
The Fund outperformed the S&P 500® Index during the 12-month reporting period, driven primarily by effective stock selection overall. Additionally,
growth-oriented stocks significantly outpaced value-oriented stocks in the large-cap segment of the U.S. equity market during the annual period. As the Fund leans more toward
growth, this equity style trend contributed positively to its relative results.
Which equity market sectors most significantly affected Fund performance?
The Fund was helped most during the annual period by effective stock selection in the consumer staples sector, where it held only one stock, which was by far the strongest stock in this weak S&P 500® Index sector—namely, Costco, whose shares generated a robust double-digit gain during the annual period. Effective
stock selection in the industrials sector also added significant value. Having no holdings in the two weakest sectors in the S&P 500® Index during the annual period—energy and utilities—further boosted the Fund’s relative results.
On
the other hand, detracting from the Fund’s relative results was its lack of exposure to communication services and consumer discretionary, which were the second- and
third-strongest sectors in the S&P 500® Index, respectively, during the
annual period. Having a position in cash, albeit modest, during an annual period when the S&P 500® Index rallied further dampened the Fund’s relative results.
What were
some of the Fund’s best-performing individual stocks?
Among the individual stocks that
contributed most positively to the Fund’s relative results were Salesforce, a cloud-based customer relationship management software company; TransDigm Group, a designer,
producer and supplier of commercial and military aerospace components; and ServiceNow, an enterprise information technology management software provider. Each of these companies enjoyed a healthy double-digit share price gain during the annual period, each helped by stronger than expected
operating performance.
Which stocks detracted from the Fund’s performance during the annual period?
During the annual period, the Fund was hurt most by not having positions in the five biggest positive contributors to the S&P 500®
Index—mega-cap information technology, communication services and consumer discretionary giants NVIDIA, Microsoft, Meta Platforms, Apple and Amazon.com, which each rebounded robustly from their heavy losses in 2022.
How did the Fund use derivatives and similar instruments during the reporting period?
The Fund did not use derivatives during the reporting period.
Did the Fund make any significant purchases or sales during the annual period?
During the annual period, new Fund positions established included Zoetis, an animal health company;
Motorola Solutions, a data communications and telecommunications equipment provider; and Trane Technologies, a manufacturing company focused on HVAC and refrigeration systems. In our view, each of these companies continues to deliver consistent, attractive long-term growth in both earnings and stock price.
20
Value Line Select Growth Fund, Inc. (continued)
Conversely, we eliminated
the Fund’s position in three mid-cap stocks—namely, Teledyne Technologies, which provides enabling technologies for industrial growth markets; Mettler-Toledo
International, which provides analytical instruments for use in life sciences, reaction engineering and real-time analytic systems as well as inspection systems used in production
and packaging in food, pharmaceutical, chemicals and other industries; and Ansys, which develops and markets engineering simulation software and services—as we continued to maintain the Fund’s focus on large-cap investing.
The Fund had 29 holdings in its portfolio as of December 31, 2023, as compared to 28 at the start of the annual period.
Were there any notable changes in the Fund’s weightings during the 12-month
period?
There were no notable changes in the Fund’s weightings during the 12-month period ended December
31, 2023.
How was the Fund positioned relative to its benchmark index at the end
of December 2023?
As of December 31, 2023, the Fund was overweighted relative to the S&P
500® Index in the industrials, information technology, health care and financials sectors. The Fund was underweighted relative to the S&P
500® Index in the consumer staples and materials sectors. The Fund had no allocations to the consumer discretionary, real estate, communication services, energy or utilities sectors on the same date.
What is your tactical view and strategy for the months ahead?
Regardless of market conditions, we intend to stay true to our time-tested investment discipline going
forward, seeking to invest in companies that have demonstrated a solid history of consistent growth in both their earnings and stock price. In our view, these companies possess attractive portfolios of proprietary products and services that give them strong market positions and make them less vulnerable to swings in national and international economic conditions. At the same time, we believe the underlying stocks of these companies tend to be less volatile than the average stock in the S&P 500® Index. By maintaining our investment discipline, the Fund has historically provided a smoother ride to investors than its
peer group averages. Putting aside short-term ebbs and flows in the equity market, we believe the Fund’s investments are likely to provide superior returns to our shareholders
over the long term.
21
Value Line Select Growth Fund, Inc.
| Ten Largest Holdings* |
|
|
|
| Issue |
Shares |
Value |
Percentage of
Net Assets |
| Cintas Corp. |
52,177 |
$31,444,991 |
7.5
% |
| TransDigm Group, Inc. |
24,957 |
25,246,501 |
6.1
% |
| Accenture PLC |
70,200 |
24,633,882 |
5.9
% |
| Costco Wholesale Corp. |
33,800 |
22,310,704 |
5.4
% |
| Roper
Technologies, Inc. |
38,069 |
20,754,076 |
5.0
% |
| S&P Global, Inc. |
41,573 |
18,313,738 |
4.4
% |
| MasterCard, Inc. |
42,100 |
17,956,071 |
4.3
% |
| Union Pacific Corp. |
72,800 |
17,881,136 |
4.3
% |
| ServiceNow, Inc. |
23,639 |
16,700,717 |
4.0
% |
| Cadence Design Systems, Inc. |
59,000 |
16,069,830 |
3.8
% |
| Asset Allocation — Percentage of Net Assets
|
| |
| Sector Weightings — Percentage of Total Investments In Securities* |
| |
| * |
Excludes short-term investments, if any. |
22
Value Line Select Growth Fund, Inc.
The following graph compares
the performance of the Value Line Select Growth Fund, Inc. to that of the S&P 500® Index*** (the “Index”). The Value Line Select Growth Fund, Inc. is a professionally managed mutual fund, while
the Index is not available for investment and is unmanaged. The returns for the Index do not reflect charges, expenses or taxes, but do include the reinvestment of dividends, if any. The comparison is shown for illustrative purposes only.
Comparison of a Change in Value of a $10,000 Investment in the Value Line Select Growth Fund, Inc. and the S&P 500® Index**
Value Line Select Growth Fund, Inc.
As of 12/31/2023
Performance Data: **
Average Annual Total Returns (For year ended 12/31/2023)
| |
1 Yr |
|
5 Yrs |
10 Yrs |
|
| Investor Class |
|
|
|
|
|
| Value
Line Select Growth Fund, Inc. |
31.11 % |
|
16.78 % |
11.92 % |
|
| S&P 500® Index*** |
26.29 % |
|
15.69 % |
12.03 % |
|
| |
1 Yr |
3 Yrs |
|
|
Since Inception 5/1/2020 |
| Institutional Class |
|
|
|
|
|
| Value
Line Select Growth Fund, Inc. |
31.41 % |
9.17
% |
|
|
15.81 % |
| S&P 500® Index*** |
26.29 % |
10.00 % |
|
|
15.93 % |
**
The performance data quoted represent past performance and are no guarantee
of future performance. The investment return and principal value of an investment will fluctuate so that an investment, when redeemed, may be worth more or less
than its original cost. The performance data includes reinvestments of all dividends and distributions but does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
***
The S&P 500® Index is an unmanaged index that is representative of
the larger-capitalization stocks traded in the
United States.
23
Value Line Select Growth Fund, Inc.
Schedule
of Investments
December 31, 2023
| Shares |
|
Value |
| COMMON STOCKS 97.2% | ||
| CONSUMER STAPLES 5.4% | ||
| |
RETAIL 5.4% | |
| 33,800 |
Costco Wholesale Corp. |
$22,310,704 |
| FINANCIALS 18.1% | ||
| |
COMMERCIAL SERVICES 4.4% | |
| 41,573 |
S&P Global, Inc. |
18,313,738 |
| |
DIVERSIFIED FINANCIALS 7.9% | |
| 116,889 |
Intercontinental Exchange, Inc.
|
15,012,054 |
| 42,100 |
MasterCard, Inc. Class A |
17,956,071 |
| |
|
32,968,125 |
| |
INSURANCE 5.3% | |
| 18,000 |
Aon PLC Class A |
5,238,360 |
| 12,400 |
Arthur J Gallagher & Co.
|
2,788,512 |
| 74,700 |
Marsh & McLennan Cos., Inc.
|
14,153,409 |
| |
|
22,180,281 |
| |
SOFTWARE 0.5% | |
| 4,000 |
MSCI, Inc. |
2,262,600 |
| |
|
75,724,744 |
| HEALTHCARE 15.8% | ||
| |
HEALTHCARE PRODUCTS 13.3% | |
| 54,600 |
Danaher Corp. |
12,631,164 |
| 23,400 |
IDEXX Laboratories, Inc.(1) |
12,988,170 |
| 47,673 |
Stryker Corp. |
14,276,157 |
| 29,400 |
Thermo Fisher Scientific, Inc.
|
15,605,226 |
| |
|
55,500,717 |
| |
PHARMACEUTICALS 2.5% | |
| 53,000 |
Zoetis, Inc. |
10,460,610 |
| |
|
65,961,327 |
| INDUSTRIALS 24.1% | ||
| |
AEROSPACE/DEFENSE 6.1% | |
| 24,957 |
TransDigm Group, Inc. |
25,246,501 |
| |
BUILDING MATERIALS 1.1% | |
| 19,000 |
Trane Technologies PLC |
4,634,100 |
| |
COMMERCIAL SERVICES 7.5% | |
| 52,177 |
Cintas Corp. |
31,444,991 |
| |
ENVIRONMENTAL CONTROL 5.1% | |
| 81,800 |
Republic Services, Inc. |
13,489,638 |
| 51,700 |
Waste Connections, Inc. |
7,717,259 |
| |
|
21,206,897 |
| Shares |
|
Value |
| COMMON STOCKS 97.2% (continued) | ||
| INDUSTRIALS 24.1% (continued) | ||
| |
TRANSPORTATION 4.3% | |
| 72,800 |
Union Pacific Corp. |
$17,881,136 |
| |
|
100,413,625 |
| INFORMATION TECHNOLOGY 33.0% | ||
| |
COMPUTERS 5.9% | |
| 70,200 |
Accenture PLC Class A |
24,633,882 |
| |
SOFTWARE 24.3% | |
| 18,000 |
Adobe, Inc.(1) |
10,738,800 |
| 59,000 |
Cadence Design Systems, Inc.(1) |
16,069,830 |
| 25,700 |
Intuit, Inc. |
16,063,271 |
| 38,069 |
Roper Technologies, Inc. |
20,754,076 |
| 44,400 |
Salesforce, Inc.(1) |
11,683,416 |
| 23,639 |
ServiceNow, Inc.(1) |
16,700,717 |
| 18,800 |
Synopsys, Inc.(1) |
9,680,308 |
| |
|
101,690,418 |
| |
TELECOMMUNICATIONS 2.8% | |
| 37,000 |
Motorola Solutions, Inc. |
11,584,330 |
| |
|
137,908,630 |
| MATERIALS 0.8% | ||
| |
CHEMICALS 0.8% | |
| 17,100 |
Ecolab, Inc. |
3,391,785 |
| TOTAL COMMON STOCKS (Cost $187,190,118) |
405,710,815 | |
| SHORT-TERM INVESTMENTS 2.8% | ||
| |
MONEY MARKET FUNDS 2.8% | |
| 11,721,590 |
State Street Institutional U.S. Government Money Market Fund, Premier Class, 5.32%(2) |
11,721,590 |
| TOTAL SHORT-TERM INVESTMENTS (Cost $11,721,590) |
11,721,590 | |
| TOTAL INVESTMENTS IN SECURITIES 100.0% (Cost $198,911,708) |
$417,432,405 | |
| CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES 0.0% |
101,817 | |
| NET ASSETS 100.0% |
$417,534,222 | |
| (1) |
Non-income producing. |
| (2) |
Rate reflects 7 day yield as of December 31, 2023. |
The following table summarizes
the inputs used to value the Fund's investments in securities as of December 31, 2023 (See
Note 1(B)):
| Investments in Securities: |
Level 1 |
Level 2 |
Level 3 |
Total |
| Assets |
|
|
|
|
| Common
Stocks* |
$405,710,815 |
$— |
$— |
$405,710,815 |
| Short-Term Investments |
11,721,590 |
— |
— |
11,721,590 |
| Total Investments in Securities
|
$417,432,405 |
$— |
$— |
$417,432,405 |
| * |
See Schedule of Investments for further breakdown by category. |
See Notes to Financial Statements.
24
Value Line Larger Companies Focused Fund, Inc.
PORTFOLIO
MANAGEMENT COMMENTARY (unaudited)
INVESTMENT OBJECTIVE
The Fund’s sole investment objective is long-term growth of capital.
Manager Discussion of Fund Performance
Below, Value Line Larger Companies Focused Fund, Inc. portfolio manager Cindy Starke
discusses the Fund’s performance and positioning for the 12 months ended December 31, 2023.
How did the Fund perform during the annual period?
The Fund’s Investor Class generated a total return of 59.06% during the 12 months ended December 31,
2023. This compares to the 26.29% return of the Fund’s benchmark, the S&P 500® Index, during the annual period. The Fund’s secondary benchmark, the Russell 1000® Growth
Index, posted a return of 42.68% during the annual period.
What key factors were
responsible for the Fund’s performance during the 12-month reporting period?
The Fund significantly outperformed the S&P 500® Index on a relative basis during the 12-month reporting period, attributable primarily to stock selection. Sector allocation overall also contributed positively. Further, the Fund was helped by its focus on growth companies. Growth-oriented stocks significantly outperformed value-oriented stocks during the annual period. The Fund’s strength was broad-based, but having positions in the “Magnificent Seven,” a group of seven mega-cap stocks in the S&P 500® Index that drove
equity performance for much of the year, also helped.
Which equity market sectors
most significantly affected Fund performance?
Stock selection in information technology,
industrials and communication services contributed most positively to the Fund’s relative results. Having overweighted allocations to information technology and communication
services, which were the top two performing sectors in the S&P 500® Index during the annual period, and an underweighted allocation to industrials, which lagged the S&P 500®
Index during the annual period, also helped. There were no sectors that detracted from the Fund’s performance during the annual period.
What were some of
the Fund’s best-performing individual stocks?
The individual stocks that contributed
most positively to the Fund’s relative results were Uber Technologies, Meta Platforms and NVIDIA.
Which stocks detracted from the Fund’s performance during the annual period?
During the annual period, stocks that detracted from the Fund’s performance were Revance
Therapeutics, Match Group and an underweight position in Apple.
How did the Fund use derivatives and similar instruments during the reporting period?
The Fund did not use derivatives during the reporting period.
Did the Fund make any significant purchases or sales during the annual period?
We focused more during this annual period on adding to existing positions that we felt offered compelling
longer-term appreciation and return potential for the Fund and selling positions that we no longer had the same level of conviction in for a variety of reasons. Among those Fund positions sold were Splunk, Estee Lauder and The Disney Company. Splunk was sold after the firm announced it
was being acquired by Cisco Systems. Estee Lauder and The Disney Company were sold as their sales and earnings reports were weaker than expected. All told, the Fund shifted from 46 equity holdings at the start of the annual period to 36 as of year-end 2023.
Were there any notable changes in the Fund’s weightings during the 12-month
period?
During the annual period, the Fund’s weightings in the communication services,
consumer discretionary, health care and industrials sectors increased, and its weightings in the energy, financials and information technology sectors decreased, in each case
relative to the S&P 500® Index. We eliminated the Fund’s exposure to the consumer staples sector during the annual period.
25
Value Line Larger Companies Focused Fund, Inc. (continued)
How was the Fund
positioned relative to its benchmark index at the end of December 2023?
As of December 31,
2023, the Fund was overweighted relative to the S&P 500® Index in the
communication services, consumer discretionary, health care and information technology sectors. The Fund was underweighted relative to the S&P 500® Index in the energy,
financials and industrials sectors on the same date. The Fund had no exposure to the consumer staples, utilities, materials and real estate sectors at the end of December
2023.
What is your tactical view and strategy for the months ahead?
At the end of the annual period, we remained cautiously optimistic that the growth companies the Fund owns
will be able to navigate better than most companies in an economic slowdown or mild recession should it occur, as the Fund’s growth-oriented holdings tend to perform well during spans of slower economic growth and in lower interest rate environments. Still, we continue to believe
innovative and quality larger-cap growth companies with scale, pricing power, healthy balance sheets, strong management teams and above-average sales and earnings growth prospects are likely to outperform the S&P
500® Index over longer periods of time. Regardless of market conditions, we remain committed to our focus on longer-term growth investing as a compelling way to create
long-term growth of capital for investors.
26
Value Line Larger Companies Focused Fund, Inc.
| Ten Largest Holdings* |
|
|
|
| Issue |
Shares |
Value |
Percentage of
Net Assets |
| Uber
Technologies, Inc. |
355,000 |
$21,857,350 |
7.0
% |
| NVIDIA Corp. |
35,000 |
17,332,700 |
5.5
% |
| Meta
Platforms, Inc. |
47,000 |
16,636,120 |
5.3
% |
| Amazon.com, Inc. |
97,000 |
14,738,180 |
4.7
% |
| Alphabet, Inc. |
95,000 |
13,270,550 |
4.2
% |
| Advanced Micro Devices, Inc. |
90,000 |
13,266,900 |
4.2
% |
| Salesforce, Inc. |
48,000 |
12,630,720 |
4.0
% |
| Exact Sciences Corp. |
170,000 |
12,576,600 |
4.0
% |
| Microsoft Corp. |
32,500 |
12,221,300 |
3.9
% |
| Booking Holdings, Inc. |
3,000 |
10,641,660 |
3.4
% |
| Asset Allocation — Percentage of Net Assets
|
| |
| Sector Weightings — Percentage of Total Investments In Securities* |
| |
| * |
Excludes short-term investments, if any. |
27
Value Line Larger Companies Focused Fund, Inc.
The following graph compares
the performance of the Value Line Larger Companies Focused Fund, Inc. to that of the S&P 500® Index*** and the Russell 1000® Growth Index**** (the “Indices”). The Value Line Larger Companies Focused
Fund, Inc. is a professionally managed mutual fund, while the Indices are not available for investment and are unmanaged. The returns for the Indices do not reflect charges, expenses or taxes, but do include the reinvestment of dividends, if any. The comparison is shown for illustrative purposes only.
Comparison of a Change in Value of a $10,000 Investment in the Value Line Larger Companies Focused Fund, Inc., the S&P 500® Index and the Russell 1000® Growth Index**
Value Line Larger Companies Focused Fund, Inc.
As of 12/31/2023
Performance Data: **
Average Annual Total Returns (For year ended 12/31/2023)
| |
1 Yr |
5 Yrs |
10 Yrs |
|
| Investor Class |
|
|
|
|
| Value
Line Larger Companies Focused Fund, Inc. |
59.06 % |
12.87 % |
11.89 % |
|
| S&P 500® Index*** |
26.29 % |
15.69 % |
12.03 % |
|
| Russell 1000® Growth Index**** |
42.68 % |
19.50 % |
14.86 % |
|
| |
1 Yr |
5 Yrs |
|
Since Inception 11/1/2015 |
| Institutional Class |
|
|
|
|
| Value Line Larger Companies Focused Fund, Inc. |
59.52 % |
13.14 % |
|
11.95 % |
| S&P 500® Index*** |
26.29 % |
15.69 % |
|
12.77 % |
| Russell 1000® Growth Index**** |
42.68 % |
19.50 % |
|
15.77 % |
28
Value Line Larger Companies Focused Fund, Inc.
**
The performance data quoted represent past performance and are no guarantee of future performance. The investment return and principal value of an investment will fluctuate so that an investment, when redeemed, may be worth more or less than its original cost. The performance data includes reinvestments of all dividends and distributions but does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
***
The S&P 500® Index is an unmanaged index that is representative of
the larger-capitalization stocks traded in the United States.
****The
Russell 1000® Growth Index is an unmanaged
index that is representative of the 1,000 top companies by market
capitalization in the United States.
29
Value Line Larger Companies Focused Fund, Inc.
Schedule
of Investments
| Shares |
|
Value |
| COMMON STOCKS 99.1% | ||
| COMMUNICATION SERVICES 17.7% | ||
| |
INTERNET 17.7% | |
| 95,000 |
Alphabet, Inc. Class A(1) |
$13,270,550
|
| 220,000 |
Match Group, Inc.(1) |
8,030,000 |
| 47,000 |
Meta Platforms, Inc. Class A(1) |
16,636,120 |
| 16,000 |
Netflix, Inc.(1) |
7,790,080 |
| 50,000 |
Roku, Inc.(1) |
4,583,000 |
| 310,000 |
Snap, Inc. Class A(1) |
5,248,300 |
| |
|
55,558,050 |
| CONSUMER DISCRETIONARY 17.2% | ||
| |
AUTO MANUFACTURERS 4.7% | |
| 350,000 |
Rivian Automotive, Inc. Class A(1)(2) |
8,211,000 |
| 26,000 |
Tesla, Inc.(1) |
6,460,480 |
| |
|
14,671,480 |
| |
ENTERTAINMENT 1.6% | |
| 145,000 |
DraftKings, Inc. Class A(1) |
5,111,250 |
| |
INTERNET 9.3% | |
| 48,000 |
Alibaba Group Holding Ltd. ADR
|
3,720,480 |
| 97,000 |
Amazon.com, Inc.(1) |
14,738,180 |
| 3,000 |
Booking Holdings, Inc.(1) |
10,641,660 |
| |
|
29,100,320 |
| |
RETAIL 1.6% | |
| 10,000 |
Lululemon Athletica, Inc.(1) |
5,112,900 |
| |
|
53,995,950 |
| ENERGY 1.7% | ||
| |
OIL & GAS 1.7% | |
| 35,000 |
Diamondback Energy, Inc. |
5,427,800 |
| FINANCIALS 6.2% | ||
| |
COMMERCIAL SERVICES 1.3% | |
| 65,000 |
PayPal Holdings, Inc.(1) |
3,991,650 |
| |
DIVERSIFIED FINANCIALS 3.3% | |
| 40,000 |
Visa, Inc. Class A |
10,414,000 |
| |
INTERNET 1.6% | |
| 400,000 |
Robinhood Markets, Inc. Class A(1) |
5,096,000 |
| |
|
19,501,650 |
| HEALTHCARE 15.5% | ||
| |
BIOTECHNOLOGY 8.1% | |
| 70,000 |
BioMarin Pharmaceutical, Inc.(1) |
6,749,400 |
| 370,000 |
Exelixis, Inc.(1) |
8,876,300 |
| 24,000 |
Vertex Pharmaceuticals, Inc.(1) |
9,765,360 |
| |
|
25,391,060 |
| |
HEALTHCARE PRODUCTS 4.0% | |
| 170,000 |
Exact Sciences Corp.(1) |
12,576,600 |
| |
PHARMACEUTICALS 3.4% | |
| 65,000 |
DexCom, Inc.(1) |
8,065,850 |
| 290,000 |
Revance Therapeutics, Inc.(1)(2) |
2,549,100 |
| |
|
10,614,950 |
| |
|
48,582,610 |
| INDUSTRIALS 7.0% | ||
| |
INTERNET 7.0% | |
| 355,000 |
Uber Technologies, Inc.(1) |
21,857,350 |
| Shares |
|
Value |
| COMMON STOCKS 99.1% (continued) | ||
| INFORMATION TECHNOLOGY 33.8% | ||
| |
COMPUTERS 4.8% | |
| 23,000 |
Apple, Inc. |
$4,428,190
|
| 41,000 |
Crowdstrike Holdings, Inc. Class A(1) |
10,468,120 |
| |
|
14,896,310 |
| |
INTERNET 3.5% | |
| 65,000 |
Okta, Inc.(1) |
5,884,450 |
| 67,000 |
Shopify, Inc. Class A(1) |
5,219,300 |
| |
|
11,103,750 |
| |
SEMICONDUCTORS 9.7% | |
| 90,000 |
Advanced Micro Devices, Inc.(1) |
13,266,900 |
| 35,000 |
NVIDIA Corp. |
17,332,700 |
| |
|
30,599,600 |
| |
SOFTWARE 15.8% | |
| 6,700 |
Intuit, Inc. |
4,187,701 |
| 32,500 |
Microsoft Corp. |
12,221,300 |
| 48,000 |
Salesforce, Inc.(1) |
12,630,720 |
| 12,700 |
ServiceNow, Inc.(1) |
8,972,423 |
| 55,000 |
Twilio, Inc. Class A(1) |
4,172,850 |
| 27,000 |
Workday, Inc. Class A(1) |
7,453,620 |
| |
|
49,638,614 |
| |
|
106,238,274 |
| TOTAL COMMON STOCKS (Cost $197,623,058) |
311,161,684 | |
| SHORT-TERM INVESTMENTS 2.0% | ||
| |
MONEY MARKET FUNDS 2.0% | |
| 5,839,456 |
State Street Institutional U.S. Government Money Market Fund, Premier Class, 5.32%(3) |
5,839,456 |
| 535,925 |
State Street Navigator Securities Lending Government Money Market Portfolio(4) |
535,925 |
| |
|
6,375,381 |
| TOTAL SHORT-TERM INVESTMENTS (Cost $6,375,381) |
6,375,381 | |
| TOTAL INVESTMENTS IN SECURITIES 101.1% (Cost $203,998,439) |
$317,537,065 | |
| EXCESS OF LIABILITIES OVER CASH AND OTHER ASSETS (1.1)% |
(3,438,433 ) | |
| NET ASSETS 100.0% |
$314,098,632 | |
| (1) |
Non-income producing. |
| (2) |
A portion or all of the security was held on loan. As of December 31, 2023, the market value of the securities on loan was $9,527,742. |
| (3) |
Rate reflects 7 day yield as of December 31, 2023. |
| (4) |
Securities with an aggregate market value of $9,527,742 were out on loan in exchange for collateral including $535,925 of cash collateral as of December 31, 2023. The collateral was invested in a cash collateral reinvestment vehicle. |
| ADR |
American Depositary Receipt. |
See Notes to Financial Statements.
30
December
31, 2023
The following table
summarizes the inputs used to value the Fund's investments in securities as of December 31, 2023 (See Note 1(B)):
| Investments in Securities: |
Level 1 |
Level 2 |
Level 3 |
Total |
| Assets |
|
|
|
|
| Common
Stocks* |
$311,161,684 |
$— |
$— |
$311,161,684 |
| Short-Term Investments |
6,375,381 |
— |
— |
6,375,381 |
| Total Investments in Securities
|
$317,537,065 |
$— |
$— |
$317,537,065 |
| * |
See Schedule of Investments for further breakdown by category. |
See Notes to Financial Statements.
31
Value Line Asset Allocation Fund, Inc.
PORTFOLIO
MANAGEMENT COMMENTARY (unaudited)
INVESTMENT OBJECTIVE
The Fund’s investment objective is to achieve a high total investment return (current income and
capital appreciation) consistent with reasonable risk. For this purpose, risk takes into account volatility and other factors as determined by EULAV Asset Management (the “Adviser”).
Manager Discussion of Fund Performance
Below, Fund portfolio managers Stephen E. Grant and Liane Rosenberg discuss the
Fund’s performance and positioning for the 12 months ended December 31, 2023.
How did the Fund perform during the annual period?
The Fund’s Investor Class generated a total return of 21.39% during the 12 months ended December 31, 2023. This compares to the 17.98% return of the Fund’s blended benchmark, comprised 60% of the S&P
500® Index and 40% of the Bloomberg US Aggregate Bond Index (the “Bloomberg Index”), during the same reporting period.
What key factors were responsible for the Fund’s performance during the 12-month reporting period?
The Fund’s relative outperformance of its blended benchmark is attributable primarily to its asset
allocation, as the Fund was overweight the strong equity market and underweight the less strong bond market during the annual period. The 26.29% return of the S&P 500® Index
significantly outpaced the 5.53% return of the Bloomberg Index during the reporting period.
During the reporting period, the Fund’s equity portfolio outperformed the S&P 500® Index, driven by favorable sector allocation and stock selection decisions overall. Additionally, growth-oriented stocks significantly outpaced value-oriented stocks in the large-cap segment of the U.S. equity market during the annual period. As the equity portion of the Fund leans more toward growth, this equity style trend contributed positively to its relative results. The Fund’s fixed income portfolio lagged the Bloomberg Index during the annual period.
Which equity
market sectors most significantly affected Fund performance?
The equity portion of the Fund
outperformed its benchmark, the S&P 500® Index, on a relative basis,
helped most during the annual period by effective stock selection in the industrials, consumer staples and health care sectors. Having no holdings in energy and an underweighted exposure to utilities—the two weakest sectors in the S&P
500® Index during the annual period—further boosted the equity portion of the Fund’s relative results.
Only partially offsetting these positive contributors was the detracting effect of its underweighted exposure to communication services and consumer discretionary, which were the second- and third-strongest sectors in the S&P 500® Index, respectively, during the annual period. Having an overweighted allocation to the financials sector, which lagged the S&P 500® Index during the annual
period, also hurt.
What were some of the Fund’s best-performing individual stocks?
Among the individual stocks that contributed most positively to the equity portion of the Fund’s relative results were Fair Isaac, also known as FICO, which provides credit scores, analytics software solutions and services, and risk management tools for businesses
worldwide; TransDigm Group, a designer, producer and supplier of commercial and military aerospace components; and Cadence Design Systems, an electronic design automation software and engineering services company. Each of these companies enjoyed a
healthy double-digit share price gain during the annual period, each helped by better than expected operating performance.
Which stocks detracted from the Fund’s performance during the reporting
period?
During the annual period, the equity portion of the Fund was hurt most by not having
positions in the five biggest positive contributors to the S&P 500® Index—mega-cap information technology, communication services and consumer discretionary giants NVIDIA, Microsoft, Meta
Platforms, Apple and Amazon.com, which each rebounded robustly from their heavy losses in 2022.
Did the equity portion of the Fund make any significant purchases or sales?
During the reporting period, one new name was added to the equity portion of the Fund—animal health company Zoetis, which, in our view, has a solid long-term history of consistent gains in earnings and stock price.
32
Value Line Asset Allocation Fund, Inc. (continued)
Conversely, among those
names sold from the equity portion of the Fund during the reporting period were Equity Lifestyle Properties, a real estate investment trust focused on manufactured home communities,
RV resorts and campgrounds; NextEra Energy, a sustainable energy generation and distribution services provider; and Danaher, a manufacturer of professional, medical, industrial
and commercial products. We believed each had become less consistent in delivering long-term gains in earnings and stock price.
Were there any notable changes in the equity portion of the Fund’s sector weightings
during the 12-month reporting period?
There were no notable changes in the equity portion of the Fund’s sector weightings during the 12-month reporting period.
How was the equity portion of the Fund positioned relative to its benchmark index at the end of
December 2023?
As of December 31, 2023, the equity portion of the Fund was overweighted relative to the S&P 500® Index in information technology, industrials and financials and was underweighted relative to the S&P 500® Index in the consumer staples, consumer discretionary, materials, health care, real estate and utilities sectors. The equity
portion of the Fund had no exposure to the energy or communication services sectors on December 31, 2023.
What was the duration and yield curve strategy of the fixed income portion of the
Fund?
The fixed income portion of the Fund generally held a duration stance modestly shorter
than that of the Bloomberg Index during the annual period, which detracted from its relative performance. Virtually all fixed income sectors posted positive returns for the annual
period despite the Federal Reserve’s (Fed) rate hikes, with returns bettering the further out the bond was on the yield curve, or spectrum of maturities. Duration is a measure of a fund’s sensitivity to changes in interest rates.
Similarly, yield curve positioning overall detracted from relative performance. The fixed income portion of the Fund was positioned with an underweight to long-dated bonds, i.e., those with maturities of 30 years, which generated the strongest returns, and an
overweight to intermediate-maturity bonds.
Which fixed income market segments most significantly affected Fund performance?
During the annual period, issue selection within the corporate bond sector detracted most. More specifically, the fixed income portion of the Fund’s focus on the intermediate-term segment of the corporate yield curve hurt, as bonds with longer-term maturities were the best performers during the annual period. Further, the regional bank failures in early 2023 led to significant spread widening in bank and finance-related bonds. While most corporate bonds in the Fund’s portfolio generated positive returns for the annual period, some bonds of regional banks held in the Fund came under significant stress. Conversely, having an overweighted allocation to
corporate bonds, particularly BBB-rated bonds, contributed positively to the fixed income portion of the Fund’s relative performance. BBB-rated corporate bonds significantly outperformed higher-rated counterparts during the annual period. Having an underweighted
allocation to and effective security selection among U.S. Treasuries, with an emphasis on longer-duration securities, also helped.
Were there any notable changes in the fixed income portion of the Fund’s sector
weightings during the 12-month reporting period?
As the Fed appeared to be close to the end of its tightening cycle, with a pivot to cutting interest rates some time in 2024, we extended the fixed income portion of the Fund’s duration compared to that of the Bloomberg Index, shifting from a short duration stance to end the year neutral to slightly longer than that of the benchmark. This was implemented primarily by adding U.S.
Treasuries with maturities of 10 years and longer and reducing positions in U.S. Treasuries with maturities of less than two years. We also reduced the fixed income portion of the
Fund’s exposure to high yield corporate bonds given the significant spread tightening and performance of this sector in 2023. We added mortgage-backed securities to the
portfolio.
How was the fixed income portion of the Fund positioned relative to its
benchmark index at the end of December 2023?
As of December 31, 2023, the fixed income portion of the Fund remained overweight relative to the Bloomberg Index in investment grade corporate bonds, especially BBB-rated bonds, and remained underweight relative to the Bloomberg Index in U.S. Treasuries.
The Fund was neutrally positioned to the Bloomberg Index in securitized assets overall. The Fund also maintained exposure to high yield corporate bonds and to taxable municipal bonds, each not a component of the Bloomberg Index.
33
Value Line Asset Allocation Fund, Inc. (continued)
How did the
Fund’s overall asset allocation shift from beginning to end of the reporting period?
At
the end of December 2023, the Fund had a weighting of approximately 64% in stocks, 33% in fixed income securities and 3% in cash equivalents. This compares to Fund weights of
approximately 67% in stocks, 30% in fixed income securities and 3% in cash equivalents at the end of December 2022. Throughout the annual period, we sought to take advantage of
short-term market swings to buy and sell stocks and bonds. For example, late in the annual period, we shifted some assets from stocks to bonds in view of the strong rally in stocks and weakness in bonds. One input to the Fund’s allocation decisions is the proprietary Value Line stock market model, which incorporates variables such as interest rates and stock market price levels.
How did the Fund use derivatives and similar instruments during the reporting period?
Neither the equity portion nor the fixed income portion of the Fund used derivatives as part of its strategy during the reporting period.
What is your tactical view and strategy for the months ahead?
Regardless of market conditions, within the equity portion of the Fund, we intend to stay true to our
time-tested investment discipline going forward, seeking to invest in companies that have demonstrated a solid history of consistent growth in both their earnings and stock price. We believe these companies possess enviable portfolios of proprietary products and services that give them strong
market positions and make them less vulnerable to swings in national and international economic conditions. Unlike the typical fund in its peer group, the equity portion of the Fund held none of the 25 largest global companies by market capitalization as of
December 31, 2023. The equity portion of the Fund favors mid-cap companies and the lower range of the large-cap company spectrum. In our view, this is the “sweet spot,” where we seek to find firms that have already established long-term winning records and yet still have plenty of room to grow. Of course, past performance is no guarantee of future results. Accepting the short-term ebbs and flows inevitable in the stock market, we believe investments in these companies may well provide superior returns to our shareholders maintaining a long-term perspective.
As we manage both the equity and fixed income portions of the Fund and determine asset allocation, we will continue to carefully monitor any significant changes in the pace of U.S. and global economic growth, any shifts in the Fed’s monetary policy or in its outlook, the path of the Russia/Ukraine and Israel/Hamas wars, and any notable movements in either inflation or labor market
conditions, as these factors are likely, in our view, to affect the Fund’s equity and fixed income holdings.
34
Value Line Asset Allocation Fund, Inc.
| Ten Largest Holdings* |
|
|
|
| Issue |
Shares |
Value |
Percentage of
Net Assets |
| Cintas Corp. |
71,900 |
$43,331,254 |
4.6
% |
| TransDigm Group, Inc. |
38,400 |
38,845,440 |
4.1
% |
| Roper
Technologies, Inc. |
59,100 |
32,219,547 |
3.4
% |
| Republic Services, Inc. |
192,627 |
31,766,119 |
3.3
% |
| Fair
Isaac Corp. |
24,900 |
28,983,849 |
3.1
% |
| Adobe, Inc. |
42,800 |
25,534,480 |
2.7
% |
| W R
Berkley Corp. |
332,256 |
23,497,144 |
2.5
% |
| Intercontinental Exchange, Inc. |
180,944 |
23,238,638 |
2.5
% |
| Union
Pacific Corp. |
91,300 |
22,425,106 |
2.4
% |
| S&P Global, Inc. |
50,119 |
22,078,422 |
2.3
% |
| Asset Allocation — Percentage of Net Assets
|
| |
| Common Stock Sectors — Percentage of Common Stocks* |
| |
| Bonds & Notes Sectors — Percentage of All Bonds & Notes* |
| |
| * |
Excludes short-term investments, if any. |
35
Value Line Asset Allocation Fund, Inc.
The following graph compares
the performance of the Value Line Asset Allocation Fund, Inc. to that of the S&P 500® Index**** and the 60/40 S&P 500® Index/Bloomberg Barclays US Aggregate Bond Index***, (the “Indexes”). The
Value Line Asset Allocation Fund, Inc. is a professionally managed mutual fund, while the Indexes are not available for investment and are unmanaged. The returns for the Indexes do not reflect charges, expenses or taxes, but do include the reinvestment of dividends, if any. The comparison is shown for illustrative purposes only.
Comparison of a Change in Value of a $10,000 Investment in the Value Line Asset Allocation Fund, Inc., the S&P 500® Index and the 60/40 S&P 500® Index/Bloomberg Barclays US Aggregate Bond Index**
Value Line Asset Allocation Fund, Inc.
As of 12/31/2023
Performance Data: **
Average Annual Total Returns (For year ended 12/31/2023)
| |
1 yr |
5 Yrs |
10 Yrs |
|
| Investor Class |
|
|
|
|
| Value
Line Asset Allocation Fund, Inc. |
21.39 % |
10.60 % |
8.30
% |
|
| S&P 500® Index*** |
26.29 % |
15.69 % |
12.03 % |
|
| 60/40 S&P 500® Index/Bloomberg US Aggregate Bond**** |
17.98 % |
9.85
% |
7.94 % |
|
| |
1 yr |
5 Yrs |
|
Since Inception 11/2/2015 |
| Institutional Class |
|
|
|
|
| Value Line Asset Allocation Fund, Inc. |
21.68 % |
10.87 % |
|
9.27
% |
| S&P 500® Index*** |
26.29 % |
15.69 % |
|
12.77 % |
| 60/40 S&P 500® Index/Bloomberg US Aggregate Bond**** |
17.98 % |
9.85
% |
|
8.20
% |
36
Value Line Asset Allocation Fund, Inc.
**
The performance data quoted represent past performance and are no guarantee of future performance. The investment return and principal value of an investment will fluctuate so that an investment, when redeemed, may be worth more or less than its original cost. The performance data includes reinvestment of all dividends and distributions but does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
***
The S&P 500®Index is an unmanaged index that is representative of
the larger capitalization stocks traded in the United States.
****The
60/40 S&P 500® Index/Bloomberg US
Aggregate Bond Index is an unmanaged blended index which consists of a 60% weighting of the S&P 500® Index representative of the larger capitalization
stocks traded in the United States and a 40% weighting of the Bloomberg US Aggregate Bond Index which is a broad-based benchmark that measures the investment
grade, U.S. dollar denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, Mortgage Backed Securities (MBS) (agency fixed-rate and hybrid ARM pass-throughs), Asset Backed Securities (ABS), and
Commercial Mortgage Backed Securities
(CMBS).
37
Value Line Asset Allocation Fund, Inc.
Schedule
of Investments
| Shares |
|
Value |
| COMMON STOCKS 63.1% | ||
| CONSUMER DISCRETIONARY 1.5% | ||
| |
DISTRIBUTION/WHOLESALE 1.5% | |
| 34,800 |
Pool Corp. |
$13,875,108 |
| CONSUMER STAPLES 2.1% | ||
| |
RETAIL 2.1% | |
| 30,000 |
Costco Wholesale Corp. |
19,802,400 |
| FINANCIALS 11.9% | ||
| |
COMMERCIAL SERVICES 2.3% | |
| 50,119 |
S&P Global, Inc. |
22,078,422 |
| |
DIVERSIFIED FINANCIALS 2.5% | |
| 180,944 |
Intercontinental Exchange, Inc.
|
23,238,638 |
| |
INSURANCE 7.1% | |
| 70,100 |
American Financial Group, Inc.
|
8,334,189 |
| 51,700 |
Aon PLC Class A |
15,045,734 |
| 57,300 |
Marsh & McLennan Cos., Inc.
|
10,856,631 |
| 75,100 |
RLI Corp. |
9,997,312 |
| 332,256 |
W R Berkley Corp. |
23,497,144 |
| |
|
67,731,010 |
| |
|
113,048,070 |
| HEALTHCARE 6.5% | ||
| |
HEALTHCARE PRODUCTS 3.9% | |
| 26,812 |
IDEXX Laboratories, Inc.(1) |
14,882,001 |
| 72,371 |
Stryker Corp. |
21,672,220 |
| |
|
36,554,221 |
| |
HEALTHCARE SERVICES 1.4% | |
| 22,699 |
Chemed Corp. |
13,273,240 |
| |
PHARMACEUTICALS 1.2% | |
| 60,000 |
Zoetis, Inc. |
11,842,200 |
| |
|
61,669,661 |
| INDUSTRIALS 15.2% | ||
| |
AEROSPACE/DEFENSE 4.1% | |
| 38,400 |
TransDigm Group, Inc. |
38,845,440 |
| |
BUILDING MATERIALS 0.4% | |
| 9,500 |
Lennox International, Inc. |
4,251,440 |
| |
COMMERCIAL SERVICES 4.6% | |
| 71,900 |
Cintas Corp. |
43,331,254 |
| |
ENGINEERING & CONSTRUCTION 0.4% | |
| 39,300 |
Exponent, Inc. |
3,459,972 |
| |
ENVIRONMENTAL CONTROL 3.3% | |
| 192,627 |
Republic Services, Inc. |
31,766,119 |
| |
TRANSPORTATION 2.4% | |
| 91,300 |
Union Pacific Corp. |
22,425,106 |
| |
|
144,079,331 |
| INFORMATION TECHNOLOGY 25.9% | ||
| |
COMMERCIAL SERVICES 1.7% | |
| 36,000 |
Gartner, Inc.(1) |
16,239,960 |
| |
COMPUTERS 3.9% | |
| 43,751 |
Accenture PLC Class A |
15,352,663 |
| 146,900 |
CGI, Inc.(1) |
15,749,149 |
| 21,800 |
EPAM Systems, Inc.(1) |
6,482,012 |
| |
|
37,583,824 |
| Shares |
|
Value |
| COMMON STOCKS 63.1% (continued) | ||
| INFORMATION TECHNOLOGY 25.9% (continued) | ||
| |
SOFTWARE 18.9% | |
| 42,800 |
Adobe, Inc.(1) |
$25,534,480
|
| 72,700 |
Cadence Design Systems, Inc.(1) |
19,801,299 |
| 24,900 |
Fair Isaac Corp.(1) |
28,983,849 |
| 24,810 |
Intuit, Inc. |
15,506,994 |
| 59,100 |
Roper Technologies, Inc. |
32,219,547 |
| 30,525 |
ServiceNow, Inc.(1) |
21,565,607 |
| 25,800 |
Synopsys, Inc.(1) |
13,284,678 |
| 52,737 |
Tyler Technologies, Inc.(1) |
22,050,395 |
| |
|
178,946,849 |
| |
TELECOMMUNICATIONS 1.4% | |
| 42,100 |
Motorola Solutions, Inc. |
13,181,089 |
| |
|
245,951,722 |
| TOTAL COMMON STOCKS (Cost $317,386,655) |
598,426,292 | |
| Principal Amount |
|
Value |
| COLLATERALIZED MORTGAGE OBLIGATIONS 0.7% | ||
| $ 2,038,457 |
FHLMC, Series 2023-DNA1, Class M1A, REMIC, (SOFR30A + 2.10%), 7.44%, 3/25/43(2)(3) |
2,070,761 |
| 2,025,354 |
FNMA, Series 2023-R02, Class 1M1, (SOFR30A + 2.30%), 7.64%,
1/25/43(2)(3)
|
2,073,435 |
| 2,098,885 |
FNMA, Series 2023-R04, Class 1M1, (SOFR30A + 2.30%), 7.64%,
5/25/43(2)(3)
|
2,143,041 |
| TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $6,182,409) |
6,287,237 | |
| COMMERCIAL MORTGAGE-BACKED SECURITIES 0.6% | ||
| 1,240,000 |
FHLMC Multifamily Structured Pass-Through Certificates, Series K055, Class A2, 2.67%, 3/25/26 |
1,190,622 |
| 1,580,000 |
FHLMC Multifamily Structured Pass-Through Certificates, Series K064, Class A2, 3.22%, 3/25/27 |
1,525,335 |
| 750,000 |
FHLMC Multifamily Structured Pass-Through Certificates, Series K084, Class A2, 3.78%, 10/25/28(3) |
729,986 |
| 1,609,233 |
FHLMC Multifamily Structured Pass-Through Certificates, Series K089, Class A1, 3.34%, 10/25/28 |
1,560,256 |
| 231,257 |
FREMF Mortgage Trust, Series 2015-K43, Class B, 3.73%, 2/25/48(2)(3) |
225,714 |
| 107,466 |
GNMA, Series 2013-12, Class B, 2.07%, 11/16/52(3) |
99,624 |
| 1,000,000 |
Morgan Stanley Capital I Trust, Series 2021-L7, Class A4, 2.32%, 10/15/54
|
828,762 |
| TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $6,917,947) |
6,160,299 | |
| CORPORATE BONDS & NOTES 11.4% | ||
| BASIC MATERIALS 0.2% | ||
| |
IRON/STEEL 0.1% | |
| 1,250,000 |
Steel Dynamics, Inc., Senior Unsecured Notes, 3.25%, 1/15/31 |
1,126,244 |
See Notes to Financial Statements.
38
December
31, 2023
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 11.4% (continued) | ||
| BASIC MATERIALS 0.2% (continued) | ||
| |
MINING 0.1% | |
| $ 1,265,000 |
Freeport-McMoRan, Inc., Guaranteed Notes, 4.63%, 8/1/30 |
$1,236,179 |
| |
|
2,362,423 |
| COMMUNICATIONS 1.1% | ||
| |
INTERNET 0.3% | |
| 1,350,000 |
Expedia Group, Inc., Guaranteed Notes, 3.25%, 2/15/30(4) |
1,237,554 |
| 1,300,000 |
Netflix, Inc., Senior Unsecured Notes, 4.88%, 4/15/28 |
1,317,384 |
| |
|
2,554,938 |
| |
MEDIA 0.2% | |
| 1,200,000 |
Charter Communications Operating LLC/Charter Communications Operating Capital, Senior Secured Notes, 4.91%, 7/23/25 |
1,188,592 |
| 1,200,000 |
Comcast Corp., Guaranteed Notes, 4.15%, 10/15/28 |
1,183,285 |
| |
|
2,371,877 |
| |
TELECOMMUNICATIONS 0.6% | |
| 1,240,000 |
AT&T, Inc., Senior Unsecured Notes, 2.55%, 12/1/33 |
1,010,626 |
| 1,200,000 |
Bell Canada Co. (The), 5.10%,
5/11/33(4)
|
1,231,354 |
| 1,200,000 |
Cisco Systems, Inc., 5.50%,
1/15/40 |
1,277,387 |
| 1,275,000 |
T-Mobile USA, Inc., Guaranteed Notes, 3.50%, 4/15/31 |
1,165,592 |
| 1,250,000 |
Vodafone Group PLC, Senior Unsecured Notes, 4.25%, 9/17/50 |
1,036,837 |
| |
|
5,721,796 |
| |
|
10,648,611 |
| CONSUMER, CYCLICAL 1.4% | ||
| |
AUTO MANUFACTURERS 0.4% | |
| 1,275,000 |
Cummins, Inc., Senior Unsecured Notes, 1.50%, 9/1/30 |
1,063,266 |
| 1,325,000 |
Ford Motor Credit Co. LLC, Senior Unsecured Notes, 3.38%, 11/13/25
|
1,267,908 |
| 1,250,000 |
General Motors Financial Co., Inc., 5.80%, 1/7/29 |
1,279,202 |
| |
|
3,610,376 |
| |
HOME BUILDERS 0.1% | |
| 1,293,000 |
PulteGroup, Inc., Guaranteed Notes, 5.00%, 1/15/27(4) |
1,299,217 |
| |
LODGING 0.3% | |
| 1,250,000 |
Hyatt Hotels Corp., Senior Unsecured Notes, 1.80%, 10/1/24 |
1,212,801 |
| 1,250,000 |
Marriott International, Inc., 4.90%, 4/15/29 |
1,258,124 |
| |
|
2,470,925 |
| |
RETAIL 0.6% | |
| 1,250,000 |
AutoZone, Inc., Senior Unsecured Notes, 3.75%, 6/1/27 |
1,213,556 |
| 1,225,000 |
Costco Wholesale Corp., Senior Unsecured Notes, 1.75%, 4/20/32 |
1,023,304 |
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 11.4% (continued) | ||
| CONSUMER, CYCLICAL 1.4% (continued) | ||
| |
RETAIL 0.6% (continued) | |
| $ 1,300,000 |
McDonald's Corp., Senior Unsecured Notes, 4.60%, 9/9/32(4) |
$1,312,418
|
| 1,250,000 |
O'Reilly Automotive, Inc., Senior Unsecured Notes, 3.60%, 9/1/27 |
1,204,705 |
| 1,200,000 |
TJX Cos., Inc. (The), 2.25%,
9/15/26(4)
|
1,133,384 |
| |
|
5,887,367 |
| |
|
13,267,885 |
| CONSUMER, NON-CYCLICAL 2.5% | ||
| |
BEVERAGES 0.5% | |
| 1,275,000 |
Anheuser-Busch InBev Worldwide, Inc., Guaranteed Notes, 4.90%, 1/23/31(4) |
1,326,379 |
| 1,225,000 |
Constellation Brands, Inc., 2.25%,
8/1/31 |
1,029,327 |
| 1,225,000 |
Constellation Brands, Inc., Guaranteed Notes, 5.25%, 11/15/48 |
1,212,593 |
| 1,265,000 |
Diageo Capital PLC, Guaranteed Notes, 2.00%, 4/29/30 |
1,092,515 |
| |
|
4,660,814 |
| |
BIOTECHNOLOGY 0.4% | |
| 1,210,000 |
Amgen, Inc., Senior Unsecured Notes, 2.20%, 2/21/27 |
1,125,094 |
| 1,300,000 |
Gilead Sciences, Inc., 4.60%,
9/1/35 |
1,285,855 |
| 1,225,000 |
Regeneron Pharmaceuticals, Inc., Senior Unsecured Notes, 1.75%, 9/15/30
|
1,007,205 |
| |
|
3,418,154 |
| |
COMMERCIAL SERVICES 0.1% | |
| 1,200,000 |
PayPal Holdings, Inc., Senior Unsecured Notes, 2.65%, 10/1/26 |
1,139,706 |
| |
HEALTHCARE PRODUCTS 0.1% | |
| 1,300,000 |
Stryker Corp., 3.38%, 11/1/25
|
1,265,345 |
| |
HEALTHCARE SERVICES 0.4% | |
| 1,225,000 |
Centene Corp., Senior Unsecured Notes, 4.63%, 12/15/29 |
1,174,441 |
| 1,250,000 |
Elevance Health, Inc., 4.75%,
2/15/33 |
1,250,430 |
| 1,250,000 |
HCA, Inc., Guaranteed Notes, 5.38%, 2/1/25 |
1,248,163 |
| |
|
3,673,034 |
| |
PHARMACEUTICALS 1.0% | |
| 1,310,000 |
AbbVie, Inc., Senior Unsecured Notes, 2.95%, 11/21/26 |
1,256,156 |
| 1,200,000 |
Astrazeneca Finance LLC, 4.88%,
3/3/28 |
1,223,423 |
| 1,250,000 |
Becton Dickinson and Co., Senior Unsecured Notes, 3.70%, 6/6/27
|
1,211,308 |
| 1,375,000 |
CVS Health Corp., Senior Unsecured Notes, 1.75%, 8/21/30 |
1,135,831 |
| 1,200,000 |
Eli Lilly & Co., 4.70%,
2/27/33 |
1,230,532 |
| 1,200,000 |
Merck & Co., Inc., Senior Unsecured Notes, 3.90%, 3/7/39 |
1,090,890 |
| 1,250,000 |
Pfizer Investment Enterprises Pte. Ltd., 4.65%, 5/19/30 |
1,258,798 |
| 1,315,000 |
Takeda Pharmaceutical Co. Ltd., Senior Unsecured Notes, 3.03%, 7/9/40
|
1,010,648 |
| |
|
9,417,586 |
| |
|
23,574,639 |
See Notes to Financial Statements.
39
Schedule
of Investments (continued)
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 11.4% (continued) | ||
| ENERGY 1.2% | ||
| |
OIL & GAS 0.4% | |
| $ 1,175,000 |
Canadian Natural Resources Ltd., Senior Unsecured Notes, 2.05%, 7/15/25
|
$1,119,487
|
| 1,325,000 |
Hess Corp., Senior Unsecured Notes, 4.30%, 4/1/27 |
1,310,962 |
| 1,200,000 |
Occidental Petroleum Corp., Senior Unsecured Notes, 5.50%, 12/1/25
|
1,199,755 |
| |
|
3,630,204 |
| |
PIPELINES 0.8% | |
| 1,275,000 |
Boardwalk Pipelines LP, Guaranteed Notes, 4.95%, 12/15/24 |
1,266,057 |
| 1,250,000 |
Enbridge, Inc., Guaranteed Notes, 2.50%, 8/1/33 |
1,023,641 |
| 1,300,000 |
Energy Transfer LP, 5.25%, 4/15/29
|
1,309,724 |
| 1,275,000 |
Enterprise Products Operating LLC, Guaranteed Notes, 4.85%, 8/15/42
|
1,222,217 |
| 1,250,000 |
Kinder Morgan, Inc., 5.20%, 6/1/33
|
1,242,472 |
| 1,250,000 |
Targa Resources Corp., 6.50%,
3/30/34 |
1,349,087 |
| |
|
7,413,198 |
| |
|
11,043,402 |
| FINANCIAL 3.2% | ||
| |
BANKS 1.5% | |
| 1,250,000 |
Bank of America Corp., (SOFR + 2.16%), 5.02%, 7/22/33(3) |
1,236,539 |
| 1,250,000 |
Bank of New York Mellon Corp., (SOFR + 1.51%), 4.71%, 2/1/34(3) |
1,222,650 |
| 1,220,000 |
Citigroup, Inc., Senior Unsecured Notes, (SOFR + 1.16%), 3.35%, 4/24/25(3) |
1,210,654 |
| 1,278,000 |
Citigroup, Inc., Subordinated Notes, 5.30%, 5/6/44 |
1,226,257 |
| 1,200,000 |
Goldman Sachs Group, Inc., Senior Unsecured Notes, 3.75%, 2/25/26
|
1,172,481 |
| 1,325,000 |
JPMorgan Chase & Co., Subordinated Notes, 4.13%, 12/15/26 |
1,298,759 |
| 1,225,000 |
JPMorgan Chase & Co., Senior Unsecured Notes, (SOFR + 1.64%), 3.96%, 11/15/48(3) |
1,025,568 |
| 1,250,000 |
Morgan Stanley, (SOFR + 2.56%), 6.34%, 10/18/33(3) |
1,347,874 |
| 1,200,000 |
National Australia Bank Ltd., 5.20%, 5/13/25 |
1,207,336 |
| 1,200,000 |
NatWest Group PLC, (1 yr. CMT + 1.35%), 5.85%, 3/2/27(3) |
1,210,044 |
| 1,250,000 |
Royal Bank of Canada, 5.00%,
2/1/33 |
1,271,124 |
| 1,300,000 |
Wells Fargo & Co., (SOFR + 2.13%), 4.61%, 4/25/53(3) |
1,168,732 |
| |
|
14,598,018 |
| |
DIVERSIFIED FINANCIALS 0.6% | |
| 1,275,000 |
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, Guaranteed Notes, 1.75%, 1/30/26 |
1,183,997 |
| 1,200,000 |
Ally Financial, Inc., Senior Unsecured Notes, 4.75%, 6/9/27 |
1,157,950 |
| 1,275,000 |
American Express Co., 4.90%,
2/13/26 |
1,278,070 |
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 11.4% (continued) | ||
| FINANCIAL 3.2% (continued) | ||
| |
DIVERSIFIED FINANCIALS 0.6% (continued) | |
| $ 1,285,000 |
Discover Financial Services, Senior Unsecured Notes, 3.95%, 11/6/24
|
$1,263,150
|
| 1,200,000 |
Synchrony Financial, 4.88%,
6/13/25 |
1,179,503 |
| |
|
6,062,670 |
| |
INSURANCE 0.3% | |
| 1,325,000 |
Aflac, Inc., Senior Unsecured Notes, 3.60%, 4/1/30 |
1,251,054 |
| 1,200,000 |
CNA Financial Corp., 3.45%,
8/15/27 |
1,148,166 |
| |
|
2,399,220 |
| |
REITS 0.8% | |
| 1,200,000 |
American Tower Corp., 5.50%,
3/15/28 |
1,226,517 |
| 1,300,000 |
Crown Castle, Inc., Senior Unsecured Notes, 3.80%, 2/15/28 |
1,234,892 |
| 1,250,000 |
Equinix, Inc., Senior Unsecured Notes, 2.50%, 5/15/31 |
1,061,030 |
| 1,250,000 |
Kimco Realty Corp., Senior Unsecured Notes, 2.25%, 12/1/31 |
1,020,579 |
| 1,225,000 |
Welltower, Inc., Senior Unsecured Notes, 4.25%, 4/15/28 |
1,201,912 |
| 1,300,000 |
Weyerhaeuser Co., 4.75%, 5/15/26
|
1,293,741 |
| |
|
7,038,671 |
| |
|
30,098,579 |
| INDUSTRIAL 0.7% | ||
| |
AEROSPACE/DEFENSE 0.1% | |
| 1,250,000 |
RTX Corp., 4.50%, 6/1/42 |
1,135,140 |
| |
ELECTRONICS 0.3% | |
| 1,260,000 |
Amphenol Corp., Senior Unsecured Notes, 2.20%, 9/15/31 |
1,060,207 |
| 1,250,000 |
Flex Ltd., Senior Unsecured Notes, 4.75%, 6/15/25 |
1,234,276 |
| |
|
2,294,483 |
| |
MISCELLANEOUS MANUFACTURERS 0.1% | |
| 1,200,000 |
Teledyne Technologies, Inc., 2.25%,
4/1/28 |
1,086,546 |
| |
TRANSPORTATION 0.2% | |
| 1,250,000 |
CSX Corp., Senior Unsecured Notes, 3.35%, 9/15/49 |
944,844 |
| 1,300,000 |
Union Pacific Corp., Senior Unsecured Notes, 3.25%, 2/5/50 |
995,834 |
| |
|
1,940,678 |
| |
|
6,456,847 |
| TECHNOLOGY 0.9% | ||
| |
COMPUTERS 0.3% | |
| 1,250,000 |
Apple, Inc., 4.65%, 2/23/46 |
1,233,021 |
| 1,250,000 |
Dell International LLC/EMC Corp., Senior Unsecured Notes, 4.90%, 10/1/26
|
1,251,989 |
| |
|
2,485,010 |
| |
SEMICONDUCTORS 0.3% | |
| 1,265,000 |
Analog Devices, Inc., Senior Unsecured Notes, 2.80%, 10/1/41 |
941,636 |
| 1,225,000 |
Broadcom, Inc., 4.30%, 11/15/32
|
1,175,221 |
| 1,250,000 |
NVIDIA Corp., 3.50%, 4/1/40 |
1,083,518 |
| |
|
3,200,375 |
See Notes to Financial Statements.
40
December
31, 2023
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 11.4% (continued) | ||
| TECHNOLOGY 0.9% (continued) | ||
| |
SOFTWARE 0.3% | |
| $ 1,250,000 |
Adobe, Inc., Senior Unsecured Notes, 2.30%, 2/1/30 |
$1,119,751
|
| 1,275,000 |
Oracle Corp., 6.25%, 11/9/32
|
1,387,053 |
| |
|
2,506,804 |
| |
|
8,192,189 |
| UTILITIES 0.2% | ||
| |
ELECTRIC 0.2% | |
| 1,275,000 |
Duke Energy Corp., Senior Unsecured Notes, 4.50%, 8/15/32 |
1,234,137 |
| 1,200,000 |
Southern Co., 5.70%, 3/15/34
|
1,261,828 |
| |
|
2,495,965 |
| TOTAL CORPORATE BONDS & NOTES (Cost $113,214,479) |
108,140,540 | |
| LONG-TERM MUNICIPAL SECURITIES 0.7% | ||
| |
CALIFORNIA 0.4% | |
| 1,000,000 |
City of Los Angeles, Series A, GO, 3.55%, 9/1/31 |
951,627 |
| 1,200,000 |
Regents of the University of California Medical Center Pooled Revenue, Series Q, 4.13%, 5/15/32 |
1,151,322 |
| 1,250,000 |
State of California, GO, 5.70%,
10/1/32 |
1,339,417 |
| |
|
3,442,366 |
| |
NEW YORK 0.1% | |
| 1,250,000 |
New York City Transitional Finance Authority Building Aid Revenue, (ST AID WITHHLDG), 4.80%, 7/15/26 |
1,251,150 |
| |
OREGON 0.1% | |
| 1,100,000 |
State of Oregon, Series C, GO, 2.38%, 5/1/36 |
858,445 |
| |
WASHINGTON 0.1% | |
| 1,250,000 |
City of Tacoma, GO, 5.89%, 12/1/30
|
1,329,023 |
| TOTAL LONG-TERM MUNICIPAL SECURITIES (Cost $7,130,147) |
6,880,984 | |
| RESIDENTIAL MORTGAGE-BACKED SECURITIES 8.5% | ||
| 35,710 |
FHLMC, Series 4151, Class PA, 2.00%, 1/15/33 |
33,507 |
| 4,247 |
FHLMC Gold PC Pool #G08488, 3.50%, 4/1/42 |
4,023 |
| 974,644 |
FHLMC Pool #QB2462, 3.00%, 8/1/50
|
868,572 |
| 1,823,789 |
FHLMC Pool #QB2958, 3.00%, 9/1/50
|
1,620,437 |
| 7,554,002 |
FHLMC Pool #QF1236, 4.50%, 10/1/52
|
7,324,794 |
| 2,825,063 |
FHLMC Pool #QG6306, 5.00%, 7/1/53
|
2,796,598 |
| 794,573 |
FHLMC Pool #RA6817, 2.50%, 2/1/52
|
679,712 |
| 780,727 |
FHLMC Pool #RB5022, 3.00%, 11/1/39
|
724,978 |
| 674,059 |
FHLMC Pool #SD7514, 3.50%, 4/1/50
|
631,531 |
| 1,976,755 |
FHLMC Pool #SD8108, 3.00%, 11/1/50
|
1,758,605 |
| 819,943 |
FHLMC Pool #SD8196, 3.50%, 2/1/52
|
756,007 |
| 6,830,852 |
FHLMC Pool #SD8256, 4.00%, 10/1/52
|
6,460,459 |
| 852,973 |
FHLMC Pool #ZS4647, 3.50%, 1/1/46
|
796,015 |
| 1,353,119 |
FNMA Pool #AS0516, 3.00%, 9/1/43
|
1,243,142 |
| 207,021 |
FNMA Pool #AX9528, 3.50%, 2/1/45
|
193,210 |
| 28,712 |
FNMA Pool #AZ6194, 3.50%, 10/1/45
|
26,856 |
| Principal Amount |
|
Value |
| RESIDENTIAL MORTGAGE-BACKED SECURITIES 8.5% (continued) | ||
| $ 1,190,542 |
FNMA Pool #BM3634, 3.50%, 5/1/47
|
$1,111,096
|
| 1,044,841 |
FNMA Pool #BP5709, 2.50%, 5/1/50
|
895,556 |
| 2,480,484 |
FNMA Pool #BX7762, 5.00%, 3/1/53
|
2,454,296 |
| 790,031 |
FNMA Pool #CA5540, 3.00%, 4/1/50
|
707,722 |
| 4,991,090 |
FNMA Pool #CB2403, 2.50%, 12/1/51
|
4,245,420 |
| 7,694,814 |
FNMA Pool #CB5892, 4.50%, 3/1/53
|
7,461,333 |
| 2,500,502 |
FNMA Pool #FM2202, 4.00%, 12/1/48
|
2,407,009 |
| 1,038,320 |
FNMA Pool #FM3254, 3.50%, 5/1/49
|
970,316 |
| 1,012,186 |
FNMA Pool #FM4140, 2.50%, 9/1/50
|
873,271 |
| 1,066,797 |
FNMA Pool #FM9509, 3.00%, 11/1/36
|
1,007,500 |
| 1,390,723 |
FNMA Pool #FM9760, 3.50%, 11/1/51
|
1,282,450 |
| 1,849,559 |
FNMA Pool #FM9834, 3.50%, 6/1/49
|
1,723,210 |
| 1,615,301 |
FNMA Pool #FM9939, 4.00%, 1/1/52
|
1,527,433 |
| 908,751 |
FNMA Pool #MA4055, 2.50%, 6/1/50
|
780,603 |
| 2,888,417 |
FNMA Pool #MA4078, 2.50%, 7/1/50
|
2,477,489 |
| 1,231,885 |
FNMA Pool #MA4222, 3.50%, 12/1/50
|
1,145,569 |
| 1,470,487 |
FNMA Pool #MA4494, 3.00%, 12/1/51
|
1,308,234 |
| 2,289,719 |
FNMA Pool #MA4495, 3.50%, 12/1/51
|
2,110,283 |
| 5,726,027 |
FNMA Pool #MA5106, 5.00%, 8/1/53
|
5,664,808 |
| 16,917 |
FNMA REMIC Trust Series 2013-18, Series 2013-18, Class AE, 2.00%, 3/25/28
|
16,200 |
| 34,590 |
FNMA REMIC Trust Series 2013-41, Series 2013-41, Class WD, 2.00%, 11/25/42
|
31,125 |
| 7,690,097 |
GNMA, Series 2021-98, Class IG, IO, 3.00%, 6/20/51 |
1,220,975 |
| 1,105,791 |
GNMA II Pool #MA3937, 3.50%,
9/20/46 |
1,040,462 |
| 746,499 |
GNMA II Pool #MA7054, 3.50%,
12/20/50 |
700,946 |
| 3,475,315 |
GNMA II Pool #MA7651, 3.50%,
10/20/51 |
3,240,989 |
| 2,997,375 |
GNMA II Pool #MA8945, 4.00%,
6/20/53 |
2,859,983 |
| 6,332,192 |
Government National Mortgage Association, MBS, 2.50%, 11/20/51 |
5,536,842 |
| TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES (Cost $86,114,517) |
80,719,566 | |
| U.S. TREASURY OBLIGATIONS 11.3% | ||
| 3,170,000 |
U.S. Treasury Bonds, 5.38%,
2/15/31 |
3,473,750 |
| 5,500,000 |
U.S. Treasury Bonds, 3.50%,
2/15/39 |
5,208,887 |
| 10,000,000 |
U.S. Treasury Bonds, 2.75%,
11/15/42 |
8,086,328 |
| 7,500,000 |
U.S. Treasury Bonds, 3.88%,
5/15/43 |
7,149,609 |
| 1,075,000 |
U.S. Treasury Bonds, 3.00%,
2/15/48 |
875,999 |
| 11,000,000 |
U.S. Treasury Bonds, 2.25%,
8/15/49 |
7,680,234 |
| 5,000,000 |
U.S. Treasury Bonds, 2.25%,
2/15/52 |
3,466,016 |
| 4,250,000 |
U.S. Treasury Bonds, 2.88%,
5/15/52 |
3,383,731 |
| 4,000,000 |
U.S. Treasury Bonds, 3.63%,
5/15/53 |
3,698,125 |
| 1,000,000 |
U.S. Treasury Notes, 2.25%,
3/31/24 |
992,539 |
| 8,000,000 |
U.S. Treasury Notes, 2.38%,
8/15/24 |
7,869,375 |
| 9,500,000 |
U.S. Treasury Notes, 3.00%,
9/30/25 |
9,281,055 |
| 3,000,000 |
U.S. Treasury Notes, 1.63%,
5/15/26 |
2,830,547 |
| 5,000,000 |
U.S. Treasury Notes, 4.50%,
7/15/26 |
5,046,484 |
| 17,904,300 |
U.S. Treasury Notes, 2.25%,
8/15/27 |
16,885,993 |
| 2,000,000 |
U.S. Treasury Notes, 0.63%,
11/30/27 |
1,762,734 |
| 2,000,000 |
U.S. Treasury Notes, 1.63%,
8/15/29 |
1,779,453 |
| 10,000,000 |
U.S. Treasury Notes, 1.50%,
2/15/30 |
8,712,109 |
| 3,500,000 |
U.S. Treasury Notes, 1.13%,
2/15/31 |
2,921,543 |
See Notes to Financial Statements.
41
Schedule
of Investments (continued)
| Principal Amount |
|
Value |
| U.S. TREASURY OBLIGATIONS 11.3% (continued) | ||
| $ 2,000,000 |
U.S. Treasury Notes, 2.75%,
8/15/32 |
$1,831,563
|
| 4,000,000 |
U.S. Treasury Notes, 3.38%,
5/15/33 |
3,838,750 |
| TOTAL U.S. TREASURY OBLIGATIONS (Cost $107,916,693) |
106,774,824 | |
| Shares |
|
Value |
| SHORT-TERM INVESTMENTS 3.6% | ||
| |
MONEY MARKET FUNDS 3.6% | |
| 30,094,084 |
State Street Institutional U.S. Government Money Market Fund, Premier Class, 5.32%(5) |
30,094,084 |
| 3,823,003 |
State Street Navigator Securities Lending Government Money Market Portfolio(6) |
3,823,003 |
| |
|
33,917,087 |
| TOTAL SHORT-TERM INVESTMENTS (Cost $33,917,087) |
33,917,087 | |
| TOTAL INVESTMENTS IN SECURITIES 99.9% (Cost $678,779,934) |
$947,306,829 | |
| CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES 0.1% |
956,034 | |
| NET ASSETS 100.0% |
$948,262,863 | |
| (1) |
Non-income producing. |
| (2) |
Pursuant to Rule 144A under the Securities Act of 1933, this security can only be sold to qualified institutional investors. |
| (3) |
Floating or variable rate security. The rate disclosed is the rate in effect as of December 31, 2023. The information in parentheses represents the benchmark and reference rate for each relevant security and the rate adjusts based upon the reference rate and spread. The security may be further subject to interest rate floor and caps. For securities which do not indicate a reference rate and spread in their descriptions, the interest rate adjusts periodically based on current interest rates and, for mortgage-backed securities, prepayments in the underlying pool of assets. |
| (4) |
A portion or all of the security was held on loan. As of December 31, 2023, the market value of the securities on loan was $6,749,681. |
| (5) |
Rate reflects 7 day yield as of December 31, 2023. |
| (6) |
Securities with an aggregate market value of $6,749,681 were out on loan in exchange for collateral including $3,823,003 of cash collateral as of December 31, 2023. The collateral was invested in a cash collateral reinvestment vehicle. |
| CMT |
Constant Maturity Treasury |
| FHLMC |
Federal Home Loan Mortgage Corp. |
| FNMA |
Federal National Mortgage Association. |
| FREMF |
Freddie Mac Multifamily. |
| GNMA |
Government National Mortgage Association. |
| REITS |
Real Estate Investment Trusts. |
| REMIC |
Real Estate Mortgage Investment Conduit. |
| SOFR |
Secured Overnight Financing Rate. |
| ST AID WITHHLDG |
State Aid Withholding. |
See Notes to Financial Statements.
42
December
31, 2023
The following table
summarizes the inputs used to value the Fund's investments in securities as of December 31, 2023 (See Note 1(B)):
| Investments in Securities: |
Level 1 |
Level 2 |
Level 3 |
Total |
| Assets |
|
|
|
|
| Common
Stocks* |
$598,426,292 |
$— |
$— |
$598,426,292 |
| Collateralized Mortgage Obligations |
— |
6,287,237 |
— |
6,287,237 |
| Commercial Mortgage-Backed Securities |
— |
6,160,299 |
— |
6,160,299 |
| Corporate Bonds & Notes* |
— |
108,140,540 |
— |
108,140,540 |
| Long-Term Municipal Securities* |
— |
6,880,984 |
— |
6,880,984 |
| Residential Mortgage-Backed Securities |
— |
80,719,566 |
— |
80,719,566 |
| U.S.
Treasury Obligations |
— |
106,774,824 |
— |
106,774,824 |
| Short-Term Investments |
33,917,087 |
— |
— |
33,917,087 |
| Total Investments in Securities
|
$632,343,379 |
$314,963,450 |
$— |
$947,306,829 |
| * |
See Schedule of Investments for further breakdown by category. |
See Notes to Financial Statements.
43
Value Line Capital Appreciation Fund, Inc.
PORTFOLIO
MANAGEMENT COMMENTARY (unaudited)
INVESTMENT OBJECTIVE
The Fund’s investment objective is to seek capital appreciation and income consistent with its asset
allocation.
Manager Discussion of Fund Performance
Below, Value Line Capital Appreciation Fund, Inc. portfolio managers Cindy Starke and
Liane Rosenberg discuss the Fund’s performance and positioning for the 12 months ended December 31, 2023.
How did the Fund perform during the annual period?
The Fund’s Investor Class generated a total return of 34.44% during the 12 months ended December 31,
2023. This compares to the 17.98% return of the Fund’s blended benchmark, comprised 60% of the S&P 500® Index and 40% of the Bloomberg US Aggregate Bond Index (the Bloomberg Index), during the same annual period.
What key factors were responsible for the Fund’s performance during the 12-month reporting period?
The Fund significantly outperformed its blended benchmark during the 12-month reporting period. Asset
allocation decisions contributed positively. The Fund was overweight equities and underweight fixed income, which helped, as equities significantly outperformed fixed income during the annual period.
The equity portion of the Fund notably outperformed the S&P 500® Index during the annual period, attributable primarily to stock selection. Sector allocation overall also boosted results.
Further, the equity portion of the Fund was helped by its allocation to growth companies and especially large-cap growth companies, including the “Magnificent Seven,” a
group of seven mega-cap stocks in the S&P 500® Index that drove equity performance for much of the year and all of which are longer-term holdings of the equity portion of
the Fund. Growth-oriented stocks significantly outperformed value-oriented stocks during the annual period, and large-cap growth-oriented stocks were the strongest segment of the
U.S. equity market. The fixed income portion of the Fund lagged the Bloomberg Index during the annual period.
Which equity market sectors most significantly affected Fund performance?
The
equity portion of the Fund was helped most by stock selection in the information technology, industrials and communication services sectors. Having an underweight to industrials,
which lagged the S&P 500® Index during the annual period, and having an
overweight to communication services, which was the second-best performing sector in the S&P 500® Index during the annual
period, also added value.
The only sector to detract from the equity portion of the Fund during the annual period was energy. Having
an overweighted allocation to this second-weakest performing sector in the S&P
500® Index during the annual period hurt, more than offsetting the positive contribution of effective stock selection within the sector.
What were some of the Fund’s best-performing individual stocks?
Contributing most positively to the equity portion of the Fund’s relative results were positions in Uber Technologies, Meta Platforms and Advanced Micro Devices.
Which stocks detracted from the Fund’s performance during the annual period?
During the annual period, stocks that detracted from the equity portion of the Fund’s performance
were Revance Therapeutics, Microsoft, and an underweight position in Apple.
Did the equity portion of the Fund make any significant purchases or sales?
We initiated a Fund position in Madrigal Pharmaceuticals, which is engaged in the development of innovative therapeutics for cardiovascular, metabolic and liver diseases.
Conversely, we sold the equity position in oil and gas exploration and production company Devon Energy, driven by what we saw as a less attractive outlook for the energy sector broadly and the company’s fundamentals more specifically, including declining sales and earnings. We also exited the equity position in Splunk, a cloud-first software company that focuses on analyzing machine data. Splunk had been a long-term holding in the Fund, and we liquidated the position following the announcement that the company would be acquired by Cisco Systems.
44
Value Line Capital Appreciation Fund, Inc. (continued)
Were there any
notable changes in the equity portion of the Fund’s weightings during the 12-month period?
During the annual period, the equity portion of the Fund’s allocations to the communication
services, health care and industrials sectors increased and its exposures to the energy and information technology sectors decreased relative to the S&P 500® Index.
How was the equity portion of the Fund positioned relative to its benchmark index at the end of December 2023?
As of December 31, 2023, the equity portion of the Fund was overweight relative to the S&P 500® Index in the communication services, consumer discretionary and health care sectors. The equity portion of the Fund was underweight relative to the S&P 500®
Index in the consumer staples and industrials sectors on the same date. The equity portion of the Fund was rather neutrally weighted to the S&P 500®
Index in the energy, financials and information technology sectors and had no exposure to the materials, real estate and utilities sectors at the end of December 2023.
What was the duration and yield curve strategy of the fixed income portion of the
Fund?
The fixed income portion of the Fund generally held a duration stance modestly shorter
than that of the Bloomberg Index during the annual period, which detracted from its relative performance. Virtually all fixed income sectors posted positive returns for the annual
period despite the Federal Reserve’s (Fed) rate hikes, with returns bettering the further out the bond was on the yield curve, or spectrum of maturities. Duration is a measure of a fund’s sensitivity to changes in interest rates.
Similarly, yield curve positioning overall detracted from relative performance. The fixed income portion of the Fund was positioned with an underweight to long-dated bonds, i.e., those with maturities of 30 years, which generated the strongest returns, and an
overweight to intermediate-maturity bonds.
Which fixed income market segments most significantly affected Fund performance?
During the annual period, issue selection within the corporate bond sector detracted most. More specifically, the fixed income portion of the Fund’s focus on the intermediate-term segment of the corporate yield curve hurt, as bonds with longer-term maturities were the best performers during the annual period. Further, the regional bank failures in early 2023 led to significant spread widening in bank and finance-related bonds. While most corporate bonds in the Fund’s portfolio generated positive returns for the annual period, some bonds of regional banks held in the Fund came under significant stress. Conversely, having an overweighted allocation to
corporate bonds, particularly BBB-rated bonds, contributed positively to the fixed income portion of the Fund’s relative performance. BBB-rated corporate bonds significantly outperformed higher-rated counterparts during the annual period. Having an underweighted
allocation to and effective stock selection among U.S. Treasuries, with an emphasis on longer-duration securities, also helped.
Were there any notable changes in the fixed income portion of the Fund’s weightings
during the 12-month period?
As the Fed appeared to be close to the end of its tightening cycle, with a pivot to cutting interest rates some time in 2024, we extended the fixed income portion of the Fund’s duration compared to that of the Bloomberg Index, shifting from a short duration stance to end the year neutral to slightly longer than that of the benchmark. This was implemented primarily by adding U.S.
Treasuries with maturities of 10 years and longer and reducing positions in U.S. Treasuries with maturities of less than two years. We also reduced the fixed income portion of the
Fund’s exposure to high yield corporate bonds given the significant spread tightening and performance of this sector in 2023. We added mortgage-backed securities to the
portfolio.
How was the fixed income portion of the Fund positioned relative to its
benchmark index at the end of December 2023?
At the end of December 2023, the fixed income portion of the Fund remained overweight relative to the Bloomberg Index in investment grade corporate bonds, especially BBB-rated bonds, and remained underweight relative to the Bloomberg Index in U.S.
Treasuries. The Fund was neutrally positioned to the Bloomberg Index in securitized assets overall. The Fund also maintained exposure to high yield corporate bonds and to taxable
municipal bonds, each not a component of the Bloomberg Index.
How did the
Fund’s overall asset allocation shift from beginning to end of the annual period?
At
December 31, 2023, the Fund had a weighting of approximately 65% in stocks, 28% in fixed income securities and 7% in cash equivalents. This compared to approximately 83% in stocks,
11% in fixed income securities and 6% in cash equivalents at the start of the annual period. The shift in allocation during the annual period was driven largely by factors such as
economic growth, interest rates and equity valuations.
45
Value Line Capital Appreciation Fund, Inc. (continued)
How did the Fund
use derivatives and similar instruments during the reporting period?
Neither the equity portion nor the fixed
income portion of the Fund used derivatives during the reporting period.
What is
your tactical view and strategy for the months ahead?
Both the equity and fixed income
markets posted positive absolute returns during 2023, as each rebounded from losses in 2022. Despite the strong annual period, especially for equities, we remained cautiously
optimistic that the companies the Fund owns will be able to navigate better than most companies an economic slowdown or mild recession should it occur. We also continued to believe
innovative market leaders with scale, pricing power and strong management are likely to outperform the S&P 500® Index over longer
periods of time and especially during spans of slower economic growth. At the end of the annual period, for the equity portion of the Fund, we continued to favor and look for quality companies with strong balance sheets that are poised to grow both sales and
earnings above the market and their peers over the long term. We also believed the backdrop remained favorable for fixed income returns as we look to interest rates moving lower in 2024. We intend to closely monitor any significant changes in the pace of U.S. and global economic growth, any shifts in the Fed’s monetary policy or outlook, world events, and any notable movements in either inflation or labor market conditions, as these factors are likely, in our view, to affect both the Fund’s equity and fixed income holdings and its asset allocation.
46
Value Line Capital Appreciation Fund, Inc.
| Ten Largest Holdings* |
|
|
|
| Issue |
Principal Amount/Shares |
Value |
Percentage of
Net Assets |
| Meta
Platforms, Inc. |
36,000 |
$12,742,560 |
2.9
% |
| Alphabet, Inc. |
86,000 |
12,013,340 |
2.7
% |
| Uber
Technologies, Inc. |
195,000 |
12,006,150 |
2.7
% |
| NVIDIA Corp. |
23,500 |
11,637,670 |
2.6
% |
| Microsoft Corp. |
27,000 |
10,153,080 |
2.3
% |
| Amazon.com, Inc. |
66,000 |
10,028,040 |
2.3
% |
| U.S.
Treasury Notes, 2.25%, 8/15/27 |
$8,820,400 |
8,318,740 |
1.9
% |
| Visa, Inc. |
28,000 |
7,289,800 |
1.6
% |
| Apple, Inc. |
37,000 |
7,123,610 |
1.6
% |
| Booking Holdings, Inc. |
2,000 |
7,094,440 |
1.6
% |
| Asset Allocation — Percentage of Net Assets
|
| |
| Common Stock Sectors — Percentage of Common Stocks* |
| |
| Bonds & Notes Sectors — Percentage of All Bonds & Notes* |
| |
| * |
Excludes short-term investments, if any. |
47
Value Line Capital Appreciation Fund, Inc.
The following graph compares
the performance of the Value Line Capital Appreciation Fund, Inc. to that of the S&P 500® Index**** and the 60/40 S&P 500® Index/Bloomberg US Aggregate Bond Index***, (the “Indexes”). The Value Line
Capital Appreciation Fund, Inc. is a professionally managed mutual fund, while the Indexes are not available for investment and are unmanaged. The returns for the Indexes do not reflect charges, expenses or taxes, but do include the reinvestment of dividends, if any. The comparison is shown for illustrative purposes only.
Comparison of a Change in Value of a $10,000 Investment in the Value Line Capital Appreciation Fund, Inc., the S&P 500® Index and the 60/40 S&P 500® Index/Bloomberg US Aggregate Bond Index**
Value
Line Capital Appreciation Fund, Inc.
As of 12/31/2023
Performance Data: **
Average Annual Total Returns (For year ended 12/31/2023)
| |
1 Yr |
5 Yrs |
10 Yrs |
|
| Investor Class |
|
|
|
|
| Value
Line Capital Appreciation Fund, Inc. |
34.44 % |
11.07 % |
8.67
% |
|
| S&P 500® Index*** |
26.29 % |
15.69 % |
12.03 % |
|
| 60/40 S&P 500® Index/Bloomberg US Aggregate Bond Index**** |
17.98 % |
9.85
% |
7.94 % |
|
| |
1 Yr |
5 Yrs |
|
Since Inception 11/2/2015 |
| Institutional Class |
|
|
|
|
| Value Line Capital Appreciation Fund, Inc. |
34.91 % |
11.38 % |
|
9.31
% |
| S&P 500® Index*** |
26.29 % |
15.69 % |
|
12.77 % |
| 60/40 S&P 500® Index/Bloomberg US Aggregate Bond Index**** |
17.98 % |
9.85
% |
|
8.20
% |
48
Value Line Capital Appreciation Fund, Inc.
**
The performance data quoted represent past performance and are no guarantee of future performance. The investment return and principal value of an investment will fluctuate so that an investment, when redeemed, may be worth more or less than its original cost. The performance data includes reinvestments of all dividends and distributions but does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
***
The S&P 500® Index is an unmanaged index that is representative of
the larger-capitalization stocks traded in the United States.
****The
60/40 S&P 500®Index/Bloomberg US
Aggregate Bond Index is an unmanaged blended index which consists of a 60% weighting of the S&P 500® Index representative of the larger capitalization
stocks traded in the United States and a 40% weighting of the Bloomberg US Aggregate Bond Index which is a broad-based benchmark that measures the investment
grade, U.S. dollar denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, Mortgage Backed Securities (MBS) (agency fixed-rate and hybrid ARM pass-throughs), Asset Backed Securities (ABS), and
Commercial Mortgage Backed Securities
(CMBS).
49
Value Line Capital Appreciation Fund, Inc.
Schedule
of Investments
| Shares |
|
Value |
| COMMON STOCKS 64.7% | ||
| COMMUNICATION SERVICES 10.3% | ||
| |
INTERNET 9.8% | |
| 86,000 |
Alphabet, Inc. Class A(1) |
$12,013,340
|
| 570,000 |
Getty Images Holdings, Inc.(1)(2) |
2,992,500 |
| 114,000 |
Match Group, Inc.(1) |
4,161,000 |
| 36,000 |
Meta Platforms, Inc. Class A(1) |
12,742,560 |
| 11,700 |
Netflix, Inc.(1) |
5,696,496 |
| 26,000 |
Roku, Inc.(1) |
2,383,160 |
| 200,000 |
Snap, Inc. Class A(1) |
3,386,000 |
| |
|
43,375,056 |
| |
MEDIA 0.5% | |
| 25,000 |
Walt Disney Co. |
2,257,250 |
| |
|
45,632,306 |
| CONSUMER DISCRETIONARY 10.8% | ||
| |
APPAREL 0.6% | |
| 23,000 |
NIKE, Inc. Class B |
2,497,110 |
| |
AUTO MANUFACTURERS 1.9% | |
| 160,000 |
Rivian Automotive, Inc. Class A(1)(2) |
3,753,600 |
| 19,500 |
Tesla, Inc.(1) |
4,845,360 |
| |
|
8,598,960 |
| |
ENTERTAINMENT 1.0% | |
| 87,000 |
DraftKings, Inc. Class A(1) |
3,066,750 |
| 7,500 |
Vail Resorts, Inc. |
1,601,025 |
| |
|
4,667,775 |
| |
INTERNET 4.4% | |
| 31,000 |
Alibaba Group Holding Ltd. ADR
|
2,402,810 |
| 66,000 |
Amazon.com, Inc.(1) |
10,028,040 |
| 2,000 |
Booking Holdings, Inc.(1) |
7,094,440 |
| |
|
19,525,290 |
| |
LODGING 0.7% | |
| 18,000 |
Hilton Worldwide Holdings, Inc.
|
3,277,620 |
| |
RETAIL 2.2% | |
| 6,500 |
Lululemon Athletica, Inc.(1) |
3,323,385 |
| 32,000 |
Starbucks Corp. |
3,072,320 |
| 6,500 |
Ulta Beauty, Inc.(1) |
3,184,935 |
| |
|
9,580,640 |
| |
|
48,147,395 |
| CONSUMER STAPLES 1.4% | ||
| |
BEVERAGES 1.0% | |
| 18,000 |
Constellation Brands, Inc. Class A
|
4,351,500 |
| |
COSMETICS/PERSONAL CARE 0.4% | |
| 12,000 |
Estee Lauder Cos., Inc. Class A
|
1,755,000 |
| |
|
6,106,500 |
| ENERGY 2.5% | ||
| |
OIL & GAS 2.5% | |
| 38,000 |
Diamondback Energy, Inc. |
5,893,040 |
| 24,000 |
Pioneer Natural Resources Co.
|
5,397,120 |
| |
|
11,290,160 |
| FINANCIALS 8.0% | ||
| |
BANKS 3.0% | |
| 150,000 |
Bank of America Corp. |
5,050,500 |
| Shares |
|
Value |
| COMMON STOCKS 64.7% (continued) | ||
| FINANCIALS 8.0% (continued) | ||
| |
BANKS 3.0% (continued) | |
| 8,200 |
Goldman Sachs Group, Inc. |
$3,163,314
|
| 29,000 |
JPMorgan Chase & Co. |
4,932,900 |
| |
|
13,146,714 |
| |
COMMERCIAL SERVICES 0.7% | |
| 50,000 |
PayPal Holdings, Inc.(1) |
3,070,500 |
| |
DIVERSIFIED FINANCIALS 3.5% | |
| 21,000 |
Blackstone, Inc. |
2,749,320 |
| 30,000 |
Interactive Brokers Group, Inc. Class
A |
2,487,000 |
| 7,300 |
MasterCard, Inc. Class A |
3,113,523 |
| 28,000 |
Visa, Inc. Class A |
7,289,800 |
| |
|
15,639,643 |
| |
INTERNET 0.8% | |
| 270,000 |
Robinhood Markets, Inc. Class A(1) |
3,439,800 |
| |
|
35,296,657 |
| HEALTHCARE 8.8% | ||
| |
BIOTECHNOLOGY 4.1% | |
| 60,000 |
BioMarin Pharmaceutical, Inc.(1) |
5,785,200 |
| 280,000 |
Exelixis, Inc.(1) |
6,717,200 |
| 14,400 |
Vertex Pharmaceuticals, Inc.(1) |
5,859,216 |
| |
|
18,361,616 |
| |
HEALTHCARE PRODUCTS 1.8% | |
| 87,000 |
Exact Sciences Corp.(1) |
6,436,260 |
| 6,800 |
Insulet Corp.(1) |
1,475,464 |
| |
|
7,911,724 |
| |
PHARMACEUTICALS 2.9% | |
| 33,000 |
DexCom, Inc.(1) |
4,094,970 |
| 13,000 |
Madrigal Pharmaceuticals, Inc.(1)(2) |
3,007,940 |
| 340,000 |
Revance Therapeutics, Inc.(1) |
2,988,600 |
| 14,000 |
Zoetis, Inc. |
2,763,180 |
| |
|
12,854,690 |
| |
|
39,128,030 |
| INDUSTRIALS 3.9% | ||
| |
AIRLINES 0.6% | |
| 64,000 |
Delta Air Lines, Inc. |
2,574,720 |
| |
INTERNET 3.3% | |
| 180,000 |
Lyft, Inc. Class A(1) |
2,698,200 |
| 195,000 |
Uber Technologies, Inc.(1) |
12,006,150 |
| |
|
14,704,350 |
| |
|
17,279,070 |
| INFORMATION TECHNOLOGY 19.0% | ||
| |
COMPUTERS 2.8% | |
| 37,000 |
Apple, Inc. |
7,123,610 |
| 20,000 |
Crowdstrike Holdings, Inc. Class A(1) |
5,106,400 |
| |
|
12,230,010 |
| |
INTERNET 1.3% | |
| 36,000 |
Okta, Inc.(1) |
3,259,080 |
| 35,000 |
Shopify, Inc. Class A(1) |
2,726,500 |
| |
|
5,985,580 |
See Notes to Financial Statements.
50
December
31, 2023
| Shares |
|
Value |
| COMMON STOCKS 64.7% (continued) | ||
| INFORMATION TECHNOLOGY 19.0% (continued) | ||
| |
SEMICONDUCTORS 7.0% | |
| 42,000 |
Advanced Micro Devices, Inc.(1) |
$6,191,220
|
| 3,400 |
Broadcom, Inc. |
3,795,250 |
| 33,000 |
Micron Technology, Inc. |
2,816,220 |
| 23,500 |
NVIDIA Corp. |
11,637,670 |
| 14,000 |
NXP Semiconductors NV |
3,215,520 |
| 22,000 |
QUALCOMM, Inc. |
3,181,860 |
| |
|
30,837,740 |
| |
SOFTWARE 7.9% | |
| 4,600 |
Intuit, Inc. |
2,875,138 |
| 27,000 |
Microsoft Corp. |
10,153,080 |
| 10,000 |
MicroStrategy, Inc. Class A(1)(2) |
6,316,200 |
| 19,500 |
Salesforce, Inc.(1) |
5,131,230 |
| 5,000 |
ServiceNow, Inc.(1) |
3,532,450 |
| 33,000 |
Twilio, Inc. Class A(1) |
2,503,710 |
| 16,500 |
Workday, Inc. Class A(1) |
4,554,990 |
| |
|
35,066,798 |
| |
|
84,120,128 |
| TOTAL COMMON STOCKS (Cost $176,829,786) |
287,000,246 | |
| Principal Amount |
|
Value |
| COLLATERALIZED MORTGAGE OBLIGATIONS 0.4% | ||
| $ 612,450 |
FHLMC, Series 2023-DNA1, Class M1A, REMIC, (SOFR30A + 2.10%), 7.44%, 3/25/43(3)(4) |
622,156 |
| 608,513 |
FNMA, Series 2023-R02, Class 1M1, (SOFR30A + 2.30%), 7.64%,
1/25/43(3)(4)
|
622,959 |
| 630,606 |
FNMA, Series 2023-R04, Class 1M1, (SOFR30A + 2.30%), 7.64%,
5/25/43(3)(4)
|
643,872 |
| TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $1,860,633) |
1,888,987 | |
| COMMERCIAL MORTGAGE-BACKED SECURITIES 0.5% | ||
| 100,000 |
COMM Mortgage Trust, Series 2014-UBS2, Class AM, 4.20%, 3/10/47 |
99,256 |
| 350,000 |
FHLMC Multifamily Structured Pass-Through Certificates, Series K052, Class A2, 3.15%, 11/25/25 |
340,498 |
| 250,000 |
FHLMC Multifamily Structured Pass-Through Certificates, Series K055, Class A2, 2.67%, 3/25/26 |
240,045 |
| 255,000 |
FHLMC Multifamily Structured Pass-Through Certificates, Series K064, Class A2, 3.22%, 3/25/27 |
246,178 |
| 250,000 |
FHLMC Multifamily Structured Pass-Through Certificates, Series K074, Class A2, 3.60%, 1/25/28 |
242,653 |
| 250,000 |
FHLMC Multifamily Structured Pass-Through Certificates, Series K084, Class A2, 3.78%, 10/25/28(4) |
243,328 |
| 466,604 |
FHLMC Multifamily Structured Pass-Through Certificates, Series K728, Class A2, 3.06%, 8/25/24(4) |
459,401 |
| 70,240 |
GNMA, Series 2013-12, Class AB, 1.83%, 11/16/52 |
64,849 |
| Principal Amount |
|
Value |
| COMMERCIAL MORTGAGE-BACKED SECURITIES 0.5% (continued) | ||
| $ 107,466 |
GNMA, Series 2013-12, Class B, 2.07%, 11/16/52(4) |
$99,624 |
| TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $2,218,854) |
2,035,832 | |
| CORPORATE BONDS & NOTES 9.6% | ||
| BASIC MATERIALS 0.2% | ||
| |
IRON/STEEL 0.1% | |
| 500,000 |
Steel Dynamics, Inc., Senior Unsecured Notes, 3.25%, 1/15/31(2) |
450,498 |
| |
MINING 0.1% | |
| 500,000 |
Freeport-McMoRan, Inc., Guaranteed Notes, 4.63%, 8/1/30(2) |
488,608 |
| |
|
939,106 |
| COMMUNICATIONS 1.0% | ||
| |
INTERNET 0.2% | |
| 500,000 |
Expedia Group, Inc., Guaranteed Notes, 3.25%, 2/15/30(2) |
458,353 |
| 500,000 |
Netflix, Inc., Senior Unsecured Notes, 4.88%, 4/15/28 |
506,686 |
| |
|
965,039 |
| |
MEDIA 0.2% | |
| 500,000 |
Charter Communications Operating LLC/Charter Communications Operating Capital, Senior Secured Notes, 4.91%, 7/23/25 |
495,247 |
| 500,000 |
Comcast Corp., Guaranteed Notes, 3.95%, 10/15/25 |
493,148 |
| |
|
988,395 |
| |
TELECOMMUNICATIONS 0.6% | |
| 500,000 |
AT&T, Inc., Senior Unsecured Notes, 2.55%, 12/1/33 |
407,510 |
| 500,000 |
Bell Canada Co. (The), 5.10%,
5/11/33(2)
|
513,064 |
| 500,000 |
Cisco Systems, Inc., 5.50%,
1/15/40 |
532,245 |
| 500,000 |
T-Mobile USA, Inc., Guaranteed Notes, 3.50%, 4/15/31 |
457,095 |
| 500,000 |
Vodafone Group PLC, Senior Unsecured Notes, 4.25%, 9/17/50 |
414,735 |
| |
|
2,324,649 |
| |
|
4,278,083 |
| CONSUMER, CYCLICAL 1.1% | ||
| |
AUTO MANUFACTURERS 0.2% | |
| 395,000 |
Ford Motor Credit Co. LLC, Senior Unsecured Notes, 3.38%, 11/13/25
|
377,980 |
| 500,000 |
General Motors Financial Co., Inc., 5.80%, 1/7/29 |
511,681 |
| |
|
889,661 |
| |
HOME BUILDERS 0.1% | |
| 492,000 |
PulteGroup, Inc., Guaranteed Notes, 5.00%, 1/15/27(2) |
494,366 |
| |
LODGING 0.2% | |
| 500,000 |
Hyatt Hotels Corp., Senior Unsecured Notes, 1.80%, 10/1/24 |
485,121 |
| 500,000 |
Marriott International, Inc., 4.90%, 4/15/29 |
503,249 |
| |
|
988,370 |
See Notes to Financial Statements.
51
Schedule
of Investments (continued)
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 9.6% (continued) | ||
| CONSUMER, CYCLICAL 1.1% (continued) | ||
| |
RETAIL 0.6% | |
| $ 500,000 |
AutoZone, Inc., Senior Unsecured Notes, 3.75%, 6/1/27 |
$485,422
|
| 500,000 |
Costco Wholesale Corp., Senior Unsecured Notes, 1.75%, 4/20/32(2) |
417,675 |
| 500,000 |
McDonald's Corp., Senior Unsecured Notes, 4.60%, 9/9/32(2) |
504,776 |
| 500,000 |
O'Reilly Automotive, Inc., Senior Unsecured Notes, 3.60%, 9/1/27 |
481,882 |
| 500,000 |
TJX Cos., Inc. (The), 2.25%,
9/15/26(2)
|
472,244 |
| |
|
2,361,999 |
| |
|
4,734,396 |
| CONSUMER, NON-CYCLICAL 2.2% | ||
| |
BEVERAGES 0.4% | |
| 500,000 |
Anheuser-Busch InBev Worldwide, Inc., Guaranteed Notes, 4.90%, 1/23/31(2) |
520,149 |
| 500,000 |
Constellation Brands, Inc., 2.25%,
8/1/31 |
420,133 |
| 500,000 |
Constellation Brands, Inc., Guaranteed Notes, 5.25%, 11/15/48 |
494,936 |
| 500,000 |
Diageo Capital PLC, Guaranteed Notes, 2.00%, 4/29/30 |
431,824 |
| |
|
1,867,042 |
| |
BIOTECHNOLOGY 0.3% | |
| 500,000 |
Amgen, Inc., Senior Unsecured Notes, 2.20%, 2/21/27 |
464,915 |
| 500,000 |
Gilead Sciences, Inc., 4.60%,
9/1/35 |
494,560 |
| 500,000 |
Regeneron Pharmaceuticals, Inc., Senior Unsecured Notes, 1.75%, 9/15/30
|
411,104 |
| |
|
1,370,579 |
| |
COMMERCIAL SERVICES 0.2% | |
| 500,000 |
PayPal Holdings, Inc., Senior Unsecured Notes, 2.65%, 10/1/26 |
474,877 |
| 500,000 |
Service Corp. International, Senior Unsecured Notes, 4.00%, 5/15/31
|
447,750 |
| |
|
922,627 |
| |
HEALTHCARE PRODUCTS 0.1% | |
| 500,000 |
Stryker Corp., 3.38%, 11/1/25
|
486,671 |
| |
HEALTHCARE SERVICES 0.3% | |
| 500,000 |
Centene Corp., Senior Unsecured Notes, 4.63%, 12/15/29 |
479,364 |
| 500,000 |
Elevance Health, Inc., 4.75%,
2/15/33 |
500,172 |
| 500,000 |
HCA, Inc., Guaranteed Notes, 5.38%, 2/1/25 |
499,265 |
| |
|
1,478,801 |
| |
PHARMACEUTICALS 0.9% | |
| 500,000 |
AbbVie, Inc., Senior Unsecured Notes, 2.95%, 11/21/26 |
479,449 |
| 500,000 |
Astrazeneca Finance LLC, 4.88%,
3/3/28 |
509,760 |
| 500,000 |
Becton Dickinson and Co., Senior Unsecured Notes, 3.70%, 6/6/27
|
484,523 |
| 500,000 |
CVS Health Corp., Senior Unsecured Notes, 1.75%, 8/21/30 |
413,029 |
| 500,000 |
Eli Lilly & Co., 4.70%,
2/27/33 |
512,722 |
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 9.6% (continued) | ||
| CONSUMER, NON-CYCLICAL 2.2% (continued) | ||
| |
PHARMACEUTICALS 0.9% (continued) | |
| $ 500,000 |
Merck & Co., Inc., Senior Unsecured Notes, 3.90%, 3/7/39 |
$454,538
|
| 500,000 |
Pfizer Investment Enterprises Pte. Ltd., 4.65%, 5/19/30 |
503,519 |
| 500,000 |
Takeda Pharmaceutical Co. Ltd., Senior Unsecured Notes, 3.03%, 7/9/40
|
384,277 |
| |
|
3,741,817 |
| |
|
9,867,537 |
| ENERGY 1.0% | ||
| |
OIL & GAS 0.3% | |
| 500,000 |
Canadian Natural Resources Ltd., Senior Unsecured Notes, 2.05%, 7/15/25
|
476,377 |
| 500,000 |
Hess Corp., Senior Unsecured Notes, 4.30%, 4/1/27 |
494,703 |
| 500,000 |
Occidental Petroleum Corp., Senior Unsecured Notes, 5.50%, 12/1/25
|
499,898 |
| |
|
1,470,978 |
| |
PIPELINES 0.7% | |
| 500,000 |
Boardwalk Pipelines LP, Guaranteed Notes, 4.95%, 12/15/24(2) |
496,493 |
| 500,000 |
Enbridge, Inc., Guaranteed Notes, 2.50%, 8/1/33(2) |
409,456 |
| 500,000 |
Energy Transfer LP, 5.25%, 4/15/29
|
503,740 |
| 500,000 |
Enterprise Products Operating LLC, Guaranteed Notes, 4.85%, 8/15/42
|
479,301 |
| 500,000 |
Kinder Morgan, Inc., 5.20%, 6/1/33(2) |
496,989 |
| 500,000 |
Targa Resources Corp., 6.50%,
3/30/34 |
539,635 |
| |
|
2,925,614 |
| |
|
4,396,592 |
| FINANCIAL 2.8% | ||
| |
BANKS 1.3% | |
| 500,000 |
Bank of America Corp., (SOFR + 2.16%), 5.02%, 7/22/33(2)(4) |
494,615 |
| 500,000 |
Bank of New York Mellon Corp., (SOFR + 1.51%), 4.71%, 2/1/34(4) |
489,060 |
| 500,000 |
Citigroup, Inc., Senior Unsecured Notes, (SOFR + 1.16%), 3.35%, 4/24/25(4) |
496,170 |
| 500,000 |
Citigroup, Inc., Subordinated Notes, 5.30%, 5/6/44 |
479,756 |
| 500,000 |
Goldman Sachs Group, Inc., Senior Unsecured Notes, 3.75%, 2/25/26
|
488,534 |
| 500,000 |
JPMorgan Chase & Co., Subordinated Notes, 4.13%, 12/15/26 |
490,098 |
| 500,000 |
JPMorgan Chase & Co., Senior Unsecured Notes, (SOFR + 1.64%), 3.96%, 11/15/48(4) |
418,599 |
| 500,000 |
Morgan Stanley, (SOFR + 2.56%), 6.34%, 10/18/33(4) |
539,150 |
| 500,000 |
National Australia Bank Ltd., 5.20%, 5/13/25(2) |
503,056 |
| 500,000 |
NatWest Group PLC, (1 yr. CMT + 1.35%), 5.85%, 3/2/27(2)(4) |
504,185 |
| 500,000 |
Royal Bank of Canada, 5.00%,
2/1/33 |
508,450 |
See Notes to Financial Statements.
52
December
31, 2023
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 9.6% (continued) | ||
| FINANCIAL 2.8% (continued) | ||
| |
BANKS 1.3% (continued) | |
| $ 500,000 |
Wells Fargo & Co., (SOFR + 2.13%), 4.61%, 4/25/53(4) |
$449,512 |
| |
|
5,861,185 |
| |
DIVERSIFIED FINANCIALS 0.6% | |
| 500,000 |
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, Guaranteed Notes, 1.75%, 1/30/26 |
464,313 |
| 500,000 |
Ally Financial, Inc., Senior Unsecured Notes, 4.75%, 6/9/27 |
482,479 |
| 500,000 |
American Express Co., 4.90%,
2/13/26 |
501,204 |
| 500,000 |
Discover Financial Services, Senior Unsecured Notes, 3.95%, 11/6/24
|
491,498 |
| 500,000 |
Synchrony Financial, 4.88%,
6/13/25 |
491,459 |
| |
|
2,430,953 |
| |
INSURANCE 0.2% | |
| 500,000 |
Aflac, Inc., Senior Unsecured Notes, 3.60%, 4/1/30 |
472,095 |
| 500,000 |
CNA Financial Corp., 3.45%,
8/15/27 |
478,402 |
| |
|
950,497 |
| |
REITS 0.7% | |
| 500,000 |
American Tower Corp., 5.50%,
3/15/28 |
511,049 |
| 500,000 |
Crown Castle, Inc., Senior Unsecured Notes, 3.80%, 2/15/28 |
474,958 |
| 500,000 |
Equinix, Inc., Senior Unsecured Notes, 2.50%, 5/15/31 |
424,412 |
| 500,000 |
Extra Space Storage LP, 2.20%,
10/15/30 |
415,887 |
| 500,000 |
Kimco Realty Corp., Senior Unsecured Notes, 2.25%, 12/1/31 |
408,232 |
| 500,000 |
Welltower, Inc., Senior Unsecured Notes, 4.25%, 4/15/28 |
490,576 |
| 500,000 |
Weyerhaeuser Co., 4.75%, 5/15/26
|
497,593 |
| |
|
3,222,707 |
| |
|
12,465,342 |
| INDUSTRIAL 0.4% | ||
| |
AEROSPACE/DEFENSE 0.1% | |
| 500,000 |
RTX Corp., 4.50%, 6/1/42 |
454,056 |
| |
ELECTRONICS 0.1% | |
| 500,000 |
Flex Ltd., Senior Unsecured Notes, 4.75%, 6/15/25 |
493,711 |
| |
MISCELLANEOUS MANUFACTURERS 0.1% | |
| 500,000 |
Teledyne Technologies, Inc., 2.25%,
4/1/28 |
452,727 |
| |
TRANSPORTATION 0.1% | |
| 500,000 |
Union Pacific Corp., Senior Unsecured Notes, 3.25%, 2/5/50 |
383,013 |
| |
|
1,783,507 |
| TECHNOLOGY 0.7% | ||
| |
COMPUTERS 0.2% | |
| 500,000 |
Apple, Inc., 4.65%, 2/23/46 |
493,208 |
| 500,000 |
Dell International LLC/EMC Corp., Senior Unsecured Notes, 4.90%, 10/1/26
|
500,796 |
| |
|
994,004 |
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 9.6% (continued) | ||
| TECHNOLOGY 0.7% (continued) | ||
| |
SEMICONDUCTORS 0.3% | |
| $ 500,000 |
Analog Devices, Inc., Senior Unsecured Notes, 2.80%, 10/1/41 |
$372,188
|
| 500,000 |
Broadcom, Inc., 4.30%, 11/15/32
|
479,682 |
| 500,000 |
NVIDIA Corp., 3.50%, 4/1/40 |
433,407 |
| |
|
1,285,277 |
| |
SOFTWARE 0.2% | |
| 500,000 |
Adobe, Inc., Senior Unsecured Notes, 2.30%, 2/1/30 |
447,901 |
| 500,000 |
Oracle Corp., 6.25%, 11/9/32
|
543,942 |
| |
|
991,843 |
| |
|
3,271,124 |
| UTILITIES 0.2% | ||
| |
ELECTRIC 0.2% | |
| 500,000 |
Duke Energy Corp., Senior Unsecured Notes, 4.50%, 8/15/32 |
483,975 |
| 500,000 |
Southern Co., 5.70%, 3/15/34(2) |
525,762 |
| |
|
1,009,737 |
| TOTAL CORPORATE BONDS & NOTES (Cost $42,725,764) |
42,745,424 | |
| LONG-TERM MUNICIPAL SECURITIES 0.6% | ||
| |
CALIFORNIA 0.2% | |
| 500,000 |
Regents of the University of California Medical Center Pooled Revenue, Series Q, 4.13%, 5/15/32 |
479,718 |
| 500,000 |
State of California, GO, 5.70%,
10/1/32 |
535,767 |
| |
|
1,015,485 |
| |
HAWAII 0.1% | |
| 500,000 |
City & County Honolulu Wastewater System Revenue, Series B, 2.50%, 7/1/27
|
469,455 |
| |
MASSACHUSETTS 0.1% | |
| 350,000 |
Commonwealth of Massachusetts, Series A, 3.77%, 7/15/29 |
342,118 |
| |
NEW MEXICO 0.1% | |
| 335,000 |
City of Albuquerque, Series A, 2.49%, 7/1/35 |
263,411 |
| |
TEXAS 0.0% | |
| 250,000 |
Tarrant County Cultural Education Facilities Finance Corp., Revenue Bonds, Baylor Health Care System Project, Series C, Series C, 4.45%, 11/15/43 |
226,456 |
| |
WASHINGTON 0.1% | |
| 250,000 |
City of Tacoma, GO, 5.89%, 12/1/30
|
265,805 |
| TOTAL LONG-TERM MUNICIPAL SECURITIES (Cost $2,574,433) |
2,582,730 | |
| RESIDENTIAL MORTGAGE-BACKED SECURITIES 7.6% | ||
| 59,517 |
FHLMC, Series 4151, Class PA, 2.00%, 1/15/33 |
55,845 |
| 6,399 |
FHLMC Gold PC Pool #A47613, 5.00%, 11/1/35 |
6,512 |
| 79,244 |
FHLMC Gold Pool #C09027, 3.00%,
2/1/43 |
72,934 |
| 1,524,682 |
FHLMC Pool #QB9661, 2.50%, 3/1/51
|
1,296,788 |
| 730,687 |
FHLMC Pool #QD2419, 3.00%, 12/1/51
|
658,490 |
See Notes to Financial Statements.
53
Schedule
of Investments (continued)
| Principal Amount |
|
Value |
| RESIDENTIAL MORTGAGE-BACKED SECURITIES 7.6% (continued) | ||
| $ 1,876,771 |
FHLMC Pool #QF1236, 4.50%, 10/1/52
|
$1,819,825
|
| 1,107,119 |
FHLMC Pool #QG6306, 5.00%, 7/1/53
|
1,095,964 |
| 176,572 |
FHLMC Pool #RA6817, 2.50%, 2/1/52
|
151,047 |
| 580,288 |
FHLMC Pool #SB8215, 4.00%, 3/1/38
|
569,244 |
| 2,400,000 |
FHLMC Pool #SD4553, 3.00%, 9/1/53
|
2,122,246 |
| 400,165 |
FHLMC Pool #SD8093, 3.50%, 9/1/50
|
371,695 |
| 1,021,774 |
FHLMC Pool #SD8108, 3.00%, 11/1/50
|
909,013 |
| 1,971,988 |
FHLMC Pool #SD8255, 3.50%, 10/1/52
|
1,808,889 |
| 2,399,266 |
FHLMC Pool #SD8256, 4.00%, 10/1/52
|
2,269,169 |
| 2,253,844 |
FHLMC Pool #SD8266, MBS, 4.50%, 11/1/52 |
2,185,456 |
| 1,649,579 |
FHLMC Pool #SD8328, 4.50%, 6/1/53
|
1,599,527 |
| 319 |
FNMA Pool #AH3226, 5.00%, 2/1/41
|
324 |
| 100,310 |
FNMA Pool #AL0657, 5.00%, 8/1/41
|
101,885 |
| 82,748 |
FNMA Pool #AQ1853, 3.00%, 11/1/42
|
76,361 |
| 109,966 |
FNMA Pool #AU5409, 3.00%, 8/1/43
|
100,529 |
| 526,687 |
FNMA Pool #CA5540, 3.00%, 4/1/50
|
471,814 |
| 955,878 |
FNMA Pool #CB5892, 4.50%, 3/1/53
|
926,874 |
| 145,822 |
FNMA Pool #FM2202, 4.00%, 12/1/48
|
140,370 |
| 337,395 |
FNMA Pool #FM4140, 2.50%, 9/1/50
|
291,090 |
| 106,979 |
FNMA Pool #FM9760, 3.50%, 11/1/51
|
98,650 |
| 134,641 |
FNMA Pool #FM9834, 3.50%, 6/1/49
|
125,443 |
| 1,450,316 |
FNMA Pool #FS3526, 4.00%, 12/1/52
|
1,371,761 |
| 159,537 |
FNMA Pool #MA4222, 3.50%, 12/1/50
|
148,359 |
| 2,200,938 |
FNMA Pool #MA4512, 2.50%, 1/1/52
|
1,872,116 |
| 1,903,110 |
FNMA Pool #MA4978, 5.00%, 4/1/53
|
1,882,763 |
| 2,113,176 |
FNMA Pool #MA5106, 5.00%, 8/1/53
|
2,090,584 |
| 1,226,682 |
FNMA Pool #MA5131, 3.50%, 7/1/53
|
1,125,113 |
| 28,195 |
FNMA REMIC Trust Series 2013-18, Series 2013-18, Class AE, 2.00%, 3/25/28
|
27,000 |
| 1,281,683 |
GNMA, Series 2021-98, Class IG, IO, 3.00%, 6/20/51 |
203,496 |
| 48,519 |
GNMA II Pool #MA1521, 3.50%,
12/20/43 |
46,066 |
| 84,974 |
GNMA II Pool #MA1839, 4.00%,
4/20/44 |
83,226 |
| 93,550 |
GNMA II Pool #MA4836, 3.00%,
11/20/47 |
85,765 |
| 226,212 |
GNMA II Pool #MA7054, 3.50%,
12/20/50 |
212,408 |
| 1,778,068 |
GNMA II Pool #MA7651, 3.50%,
10/20/51 |
1,658,181 |
| 1,183,066 |
GNMA II Pool #MA8945, 4.00%,
6/20/53 |
1,128,837 |
| 2,606,782 |
Government National Mortgage Association, MBS, 2.50%, 11/20/51 |
2,279,359 |
| TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES (Cost $34,395,644) |
33,541,018 | |
| U.S. TREASURY OBLIGATIONS 11.3% | ||
| 2,000,000 |
U.S. Treasury Bonds, 3.50%,
2/15/39 |
1,894,141 |
| 1,750,000 |
U.S. Treasury Bonds, 1.13%,
5/15/40 |
1,127,793 |
| 3,100,000 |
U.S. Treasury Bonds, 2.88%,
5/15/43 |
2,544,785 |
| 2,000,000 |
U.S. Treasury Bonds, 3.88%,
5/15/43 |
1,906,563 |
| 2,500,000 |
U.S. Treasury Bonds, 3.00%,
2/15/48 |
2,037,207 |
| 1,000,000 |
U.S. Treasury Bonds, 2.25%,
8/15/49 |
698,203 |
| 5,250,000 |
U.S. Treasury Bonds, 2.25%,
2/15/52 |
3,639,316 |
| 2,000,000 |
U.S. Treasury Bonds, 2.88%,
5/15/52 |
1,592,344 |
| 7,000,000 |
U.S. Treasury Notes, 2.25%,
3/31/24 |
6,947,773 |
| 725,000 |
U.S. Treasury Notes, 4.50%,
7/15/26 |
731,740 |
| Principal Amount |
|
Value |
| U.S. TREASURY OBLIGATIONS 11.3% (continued) | ||
| $ 8,820,400 |
U.S. Treasury Notes, 2.25%,
8/15/27 |
$8,318,740
|
| 1,500,000 |
U.S. Treasury Notes, 1.25%,
3/31/28 |
1,345,078 |
| 6,000,000 |
U.S. Treasury Notes, 1.63%,
8/15/29 |
5,338,359 |
| 1,250,000 |
U.S. Treasury Notes, 3.50%,
1/31/30 |
1,222,510 |
| 1,000,000 |
U.S. Treasury Notes, 1.50%,
2/15/30 |
871,211 |
| 1,000,000 |
U.S. Treasury Notes, 1.13%,
2/15/31 |
834,727 |
| 3,875,000 |
U.S. Treasury Notes, 2.75%,
8/15/32 |
3,548,652 |
| 6,000,000 |
U.S. Treasury Notes, 3.38%,
5/15/33 |
5,758,125 |
| TOTAL U.S. TREASURY OBLIGATIONS (Cost $51,561,034) |
50,357,267 | |
| Shares |
|
Value |
| SHORT-TERM INVESTMENTS 7.7% | ||
| |
MONEY MARKET FUNDS 7.7% | |
| 22,566,689 |
State Street Institutional U.S. Government Money Market Fund, Premier Class, 5.32%(5) |
22,566,689 |
| 11,680,188 |
State Street Navigator Securities Lending Government Money Market Portfolio(6) |
11,680,188 |
| |
|
34,246,877 |
| TOTAL SHORT-TERM INVESTMENTS (Cost $34,246,877) |
34,246,877 | |
| TOTAL INVESTMENTS IN SECURITIES 102.4% (Cost $346,413,025) |
$454,398,381 | |
| EXCESS OF LIABILITIES OVER CASH AND OTHER ASSETS (2.4)% |
(10,629,301 ) | |
| NET ASSETS 100.0% |
$443,769,080 | |
| (1) |
Non-income producing. |
| (2) |
A portion or all of the security was held on loan. As of December 31, 2023, the market value of the securities on loan was $20,708,639. |
| (3) |
Pursuant to Rule 144A under the Securities Act of 1933, this security can only be sold to qualified institutional investors. |
| (4) |
Floating or variable rate security. The rate disclosed is the rate in effect as of December 31, 2023. The information in parentheses represents the benchmark and reference rate for each relevant security and the rate adjusts based upon the reference rate and spread. The security may be further subject to interest rate floor and caps. For securities which do not indicate a reference rate and spread in their descriptions, the interest rate adjusts periodically based on current interest rates and, for mortgage-backed securities, prepayments in the underlying pool of assets. |
| (5) |
Rate reflects 7 day yield as of December 31, 2023. |
| (6) |
Securities with an aggregate market value of $20,708,639 were out on loan in exchange for collateral including $11,680,188 of cash collateral as of December 31, 2023. The collateral was invested in a cash collateral reinvestment vehicle. |
| ADR |
American Depositary Receipt. |
| CMT |
Constant Maturity Treasury |
| FHLMC |
Federal Home Loan Mortgage Corp. |
| FNMA |
Federal National Mortgage Association. |
| GNMA |
Government National Mortgage Association. |
See Notes to Financial Statements.
54
December
31, 2023
| REITS |
Real Estate Investment Trusts. |
| REMIC |
Real Estate Mortgage Investment Conduit. |
| SOFR |
Secured Overnight Financing Rate. |
The following table summarizes
the inputs used to value the Fund's investments in securities as of December 31, 2023 (See
Note 1(B)):
| Investments in Securities: |
Level 1 |
Level 2 |
Level 3 |
Total |
| Assets |
|
|
|
|
| Common
Stocks* |
$287,000,246 |
$— |
$— |
$287,000,246 |
| Collateralized Mortgage Obligations |
— |
1,888,987 |
— |
1,888,987 |
| Commercial Mortgage-Backed Securities |
— |
2,035,832 |
— |
2,035,832 |
| Corporate Bonds & Notes* |
— |
42,745,424 |
— |
42,745,424 |
| Long-Term Municipal Securities* |
— |
2,582,730 |
— |
2,582,730 |
| Residential Mortgage-Backed Securities |
— |
33,541,018 |
— |
33,541,018 |
| U.S.
Treasury Obligations |
— |
50,357,267 |
— |
50,357,267 |
| Short-Term Investments |
34,246,877 |
— |
— |
34,246,877 |
| Total Investments in Securities
|
$321,247,123 |
$133,151,258 |
$— |
$454,398,381 |
| * |
See Schedule of Investments for further breakdown by category. |
See Notes to Financial Statements.
55
Value Line Core Bond Fund
PORTFOLIO
MANAGEMENT COMMENTARY (unaudited)
INVESTMENT OBJECTIVE
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.
Manager Discussion of Fund Performance
Below, Value Line Core Bond Fund’s portfolio manager Liane Rosenberg discusses the Fund’s performance and positioning for the 12 months ended December 31, 2023.
How did the Fund perform during the annual period?
The Fund generated a total return of 4.72% during the 12 months ended December 31, 2023. This compares to the 5.53% return of the Fund’s benchmark, the Bloomberg US Aggregate Bond Index (the “Bloomberg Index”), during the same annual period.
What key factors were responsible for the Fund’s performance relative to its benchmark
during the 12-month reporting period?
The Fund posted positive absolute returns but underperformed its benchmark on a relative basis due primarily to issue selection overall and to duration and yield curve positioning. Sector allocation decisions as a whole contributed positively.
Which fixed income market sectors most significantly affected Fund performance?
During the annual period, issue selection within the corporate bond sector detracted most. More specifically, the Fund’s focus on the intermediate-term segment of the corporate yield curve hurt, as bonds with longer-term maturities were the best performers during the annual period. Further, the regional bank failures in early 2023 led to significant spread widening in bank and finance-related bonds. While most corporate bonds in the Fund’s portfolio generated positive returns for the annual period, some bonds held in the Fund, including those of Zions Bancorp, Keycorp and Synovus, came under significant stress. Having a slightly underweighted
allocation to mortgage-backed securities also hurt, as this sector outperformed U.S. Treasuries during the annual period. Finally, the Fund maintained an approximately 2.2% position in cash, which, though modest, hurt during a period when virtually all fixed income sectors posted positive absolute returns.
Conversely, having an overweighted allocation to corporate bonds, particularly BBB-rated bonds, contributed positively to the Fund’s relative performance. BBB-rated corporate bonds significantly outperformed higher-rated counterparts during the annual period.
Having an underweighted allocation to and effective security selection among U.S. Treasuries, with an emphasis on longer-duration securities, also helped. Additionally, though a modest allocation within the Fund’s portfolio, having an out-of-benchmark position in taxable municipal bonds during the annual period, proved a solid positive contributor to relative results given their long average duration.
What was the
Fund’s duration strategy?
Duration positioning in the Fund detracted from its relative
performance, as the Fund generally held a duration stance modestly shorter than that of the Bloomberg Index during the annual period based on our expectations that the yield
curve’s marked inversion would start to normalize as the U.S. Federal Reserve (Fed) neared the end of its tightening cycle. While this scenario did materialize, virtually all fixed income sectors posted positive returns for the annual period despite the Fed’s rate hikes, with returns bettering the further out the bond was on the yield curve, or spectrum of maturities. Duration is a measure of a fund’s sensitivity to changes in interest rates.
How did
yield curve positioning decisions affect the Fund’s performance?
Overall, yield curve
positioning detracted from the Fund’s relative performance during the annual period. The Fund was positioned with an underweight to long-dated bonds, i.e., those with
maturities of 30 years, which generated the strongest returns, and an overweight to intermediate-maturity bonds.
How did the Fund use derivatives and similar instruments during the reporting
period?
The Fund did not use derivatives during the reporting period.
56
Value Line Core Bond Fund (continued)
Were there any
notable changes in the Fund’s weightings during the annual period?
As the Fed appeared
to be close to the end of its tightening cycle, with a pivot to cutting interest rates some time in 2024, we extended the Fund’s duration compared to that of the Bloomberg
Index, shifting from a short duration stance to end the year neutral to slightly longer than that of the benchmark. This was implemented primarily by adding U.S. Treasuries with
maturities of 10 years and longer and reducing positions in U.S. Treasuries with maturities of less than two years. We also reduced the Fund’s exposure to high yield corporate bonds given the significant spread tightening and performance of this sector in 2023. We added
mortgage-backed securities to the Fund’s portfolio, bringing the Fund’s allocation in the sector from an underweight to an overweight position compared to the Bloomberg Index.
How was the Fund positioned relative to its benchmark index at the end of December 2023?
At the end of December 2023, the Fund remained overweight relative to the Bloomberg Index in investment
grade corporate bonds, especially BBB-rated bonds, and remained underweight relative to the Bloomberg Index in U.S. Treasuries. The Fund was overweight compared to the Bloomberg Index in securitized assets overall, attributable primarily to its allocation to mortgage-backed securities. The Fund also maintained exposure to high yield corporate bonds and to taxable municipal bonds, each not a component of the
Bloomberg Index.
What is your tactical view and strategy for the months ahead?
At the end of December 2023, we believed the Fed’s monetary policy stance going forward would
continue to be the primary determinant of fixed income market performance. While the economy and job growth remained strong at the end of the calendar year, any developing weakness in either will probably motivate the Fed to increase the number of interest rate cuts in 2024 from the three it forecasts and to pivot sooner than later. Also, while inflation has dropped significantly from its mid-summer 2023 high, it remains higher than the Fed’s 2% target. Should inflation remain stubborn or move higher, it must be noted that the Fed has not ruled out an additional interest rate hike in the coming year. At the end of the annual period, we expected inflation to continue to decelerate and job growth to remain at least moderate, enabling the Fed to shift to a policy of quantitative easing from its cycle of quantitative tightening and to start to cut interest rates in the first half of 2024.
Based on this view, we extended the Fund’s duration toward the end of the annual period and intend to maintain an emphasis on spread sectors, especially corporate bonds, going forward. Of course, an increase in inflation, an overheated economy or significant job growth may cause us to reevaluate our view of Fed policy ahead and, in turn, our evaluation of the Fund’s sector allocations and duration and yield curve positioning.
57
Value Line Core Bond Fund
| Ten Largest Holdings* |
|
|
|
| Issue |
Principal Amount |
Value |
Percentage of
Net Assets |
| U.S.
Treasury Notes, 2.25%, 8/15/27 |
$1,906,300 |
$1,797,879 |
4.7
% |
| U.S. Treasury Notes, 2.25%, 11/15/24 |
1,100,000 |
1,075,379 |
2.8
% |
| FNMA
Pool #BX7762, 5.00%, 3/1/53 |
1,024,756 |
1,013,937 |
2.7
% |
| U.S. Treasury Bonds, 2.25%, 8/15/49 |
1,400,000 |
977,484 |
2.6
% |
| FNMA
Pool #FM9834, 3.50%, 6/1/49 |
1,043,464 |
972,181 |
2.6
% |
| FHLMC Pool #SD8256, 4.00%, 10/1/52 |
1,002,046 |
947,712 |
2.5
% |
| U.S.
Treasury Bonds, 3.00%, 2/15/48 |
1,050,000 |
855,627 |
2.3
% |
| U.S. Treasury Bonds, 2.88%, 5/15/43 |
1,000,000 |
820,899 |
2.2
% |
| FNMA
Pool #CB5892, 4.50%, 3/1/53 |
798,158 |
773,940 |
2.0
% |
| FNMA Pool #MA5106, 5.00%, 8/1/53 |
779,051 |
770,722 |
2.0
% |
| Asset Allocation — Percentage of Net Assets
|
| |
| Sector Weightings — Percentage of Total Investments In Securities* |
| |
| * |
Excludes short-term investments, if any. |
58
Value Line Core Bond Fund
Coupon Distribution
| |
Percentage of
Total Investments In Securities* |
| Less than 4% |
58.4
% |
| 4 -
4.99% |
26.1
% |
| 5 - 5.99% |
11.8
% |
| 6 -
6.99% |
1.3
% |
| Greater or equal to 7% |
2.4 % |
| Total |
100.0 % |
| * |
Excludes short-term investments, if any. |
The following graph compares the performance of the Value Line Core Bond Fund to that of the Bloomberg US Aggregate Bond Index*** (the “Index”). The Value Line Core Bond Fund is a professionally managed mutual fund, while the Index is not available for investment and is unmanaged. The returns for the Index do not reflect charges, expenses or taxes, but do include the
reinvestment of dividends, if any. The comparison is shown for illustrative purposes only.
Comparison of a Change in Value of a $10,000 Investment in the Value Line Core Bond Fund and the Bloomberg US Aggregate Bond Index***
Value Line Core Bond Fund
As of 12/31/2023
Performance Data: **
Average Annual Total Returns (For year ended 12/31/2023)
| |
1 Yr |
5 Yrs |
10 Yrs |
| Value Line Core Bond Fund |
4.72
% |
0.55
% |
1.17
% |
| Bloomberg US Aggregate Bond Index*** |
5.53
% |
1.10
% |
1.81
% |
59
Value Line Core Bond Fund
**
The performance data quoted represent past performance and are no guarantee of future performance. The investment return and principal value of an investment will fluctuate so that an investment, when redeemed, may be worth more or less than its original cost. The performance data includes reinvestments of all dividends and distributions but does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
***
The Bloomberg US Aggregate Bond Index is a broad-based benchmark that
measures the investment grade, U.S. dollar denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS
(agency fixed-rate and hybrid ARM passthroughs), ABS and CMBS. This is an unmanaged index and does not reflect charges, expenses
or taxes, which are deducted from the
Fund’s return. It is not possible to directly invest in this Index.
60
Value Line Core Bond Fund
Schedule
of Investments
December 31, 2023
| Principal Amount |
|
Value |
| COLLATERALIZED MORTGAGE OBLIGATIONS 2.3% | ||
| $ 288,756 |
FHLMC, Series 2023-DNA1, Class M1A, REMIC, (SOFR30A + 2.10%), 7.44%, 3/25/43(1)(2) |
$293,332
|
| 286,899 |
FNMA, Series 2023-R02, Class 1M1, (SOFR30A + 2.30%), 7.64%, 1/25/43(1)(2) |
293,710 |
| 297,315 |
FNMA, Series 2023-R04, Class 1M1, (SOFR30A + 2.30%), 7.64%, 5/25/43(1)(2) |
303,570 |
| TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $875,763) |
890,612 | |
| COMMERCIAL MORTGAGE-BACKED SECURITIES 2.0% | ||
| 150,000 |
COMM Mortgage Trust, Series 2014-UBS2, Class AM, 4.20%, 3/10/47 |
148,884 |
| 200,000 |
FHLMC Multifamily Structured Pass-Through Certificates, Series K092, Class A2, 3.30%, 4/25/29 |
190,179 |
| 175,000 |
FREMF Mortgage Trust, Series 2015-K43, Class B, 3.73%, 2/25/48(1)(2) |
170,805 |
| 132,977 |
GNMA, Series 2012-125, Class AB, 2.11%, 2/16/53(2) |
109,472 |
| 98,335 |
GNMA, Series 2013-12, Class AB, 1.83%, 11/16/52 |
90,789 |
| 31,539 |
Sequoia Mortgage Trust, Series 2004-8, Class A1, (SOFR + 0.81%), 6.17%, 9/20/34(2) |
27,576 |
| 23,049 |
Wells Fargo Commercial Mortgage Trust, Series 2015-NXS2, Class ASB, 3.46%, 7/15/58 |
22,676 |
| TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $859,686) |
760,381 | |
| CORPORATE BONDS & NOTES 34.2% | ||
| BASIC MATERIALS 0.8% | ||
| |
IRON/STEEL 0.4% | |
| 165,000 |
Steel Dynamics, Inc., Senior Unsecured Notes, 3.25%, 1/15/31(3) |
148,664 |
| |
MINING 0.4% | |
| 145,000 |
Freeport-McMoRan, Inc., Guaranteed Notes, 4.63%, 8/1/30 |
141,697 |
| |
|
290,361 |
| COMMUNICATIONS 3.4% | ||
| |
INTERNET 0.7% | |
| 150,000 |
Expedia Group, Inc., Guaranteed Notes, 3.25%, 2/15/30(3) |
137,506 |
| 150,000 |
Netflix, Inc., Senior Unsecured Notes, 4.88%, 4/15/28 |
152,006 |
| |
|
289,512 |
| |
MEDIA 0.8% | |
| 150,000 |
Charter Communications Operating LLC/Charter Communications Operating Capital, Senior Secured Notes, 4.91%, 7/23/25 |
148,574 |
| 150,000 |
Comcast Corp., Guaranteed Notes, 4.15%, 10/15/28 |
147,911 |
| |
|
296,485 |
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 34.2% (continued) | ||
| COMMUNICATIONS 3.4% (continued) | ||
| |
TELECOMMUNICATIONS 1.9% | |
| $ 150,000 |
AT&T, Inc., Senior Unsecured Notes, 2.55%, 12/1/33 |
$122,253
|
| 150,000 |
Bell Canada Co. (The), 5.10%,
5/11/33(3)
|
153,919 |
| 150,000 |
Cisco Systems, Inc., 5.50%,
1/15/40 |
159,673 |
| 150,000 |
T-Mobile USA, Inc., Guaranteed Notes, 3.50%, 4/15/31 |
137,129 |
| 175,000 |
Vodafone Group PLC, Senior Unsecured Notes, 4.25%, 9/17/50 |
145,157 |
| |
|
718,131 |
| |
|
1,304,128 |
| CONSUMER, CYCLICAL 4.2% | ||
| |
AUTO MANUFACTURERS 1.1% | |
| 150,000 |
Cummins, Inc., Senior Unsecured Notes, 1.50%, 9/1/30(3) |
125,090 |
| 170,000 |
Ford Motor Credit Co. LLC, Senior Unsecured Notes, 3.38%, 11/13/25
|
162,675 |
| 150,000 |
General Motors Financial Co., Inc., 5.80%, 1/7/29 |
153,504 |
| |
|
441,269 |
| |
HOME BUILDERS 0.4% | |
| 152,000 |
PulteGroup, Inc., Guaranteed Notes, 5.00%, 1/15/27(3) |
152,731 |
| |
LODGING 0.8% | |
| 150,000 |
Hyatt Hotels Corp., Senior Unsecured Notes, 1.80%, 10/1/24 |
145,536 |
| 150,000 |
Marriott International, Inc., 4.90%, 4/15/29 |
150,975 |
| |
|
296,511 |
| |
RETAIL 1.9% | |
| 150,000 |
AutoZone, Inc., Senior Unsecured Notes, 3.75%, 6/1/27 |
145,627 |
| 150,000 |
Costco Wholesale Corp., Senior Unsecured Notes, 1.75%, 4/20/32 |
125,302 |
| 150,000 |
McDonald's Corp., Senior Unsecured Notes, 4.60%, 9/9/32(3) |
151,433 |
| 150,000 |
O'Reilly Automotive, Inc., Senior Unsecured Notes, 3.60%, 9/1/27
|
144,565 |
| 150,000 |
TJX Cos., Inc. (The), 2.25%,
9/15/26(3)
|
141,673 |
| |
|
708,600 |
| |
|
1,599,111 |
| CONSUMER, NON-CYCLICAL 7.8% | ||
| |
BEVERAGES 1.4% | |
| 150,000 |
Anheuser-Busch InBev Worldwide, Inc., Guaranteed Notes, 4.90%, 1/23/31(3) |
156,045 |
| 150,000 |
Constellation Brands, Inc., 2.25%,
8/1/31 |
126,040 |
| 150,000 |
Constellation Brands, Inc., Guaranteed Notes, 5.25%, 11/15/48 |
148,481 |
| 135,000 |
Diageo Capital PLC, Guaranteed Notes, 2.00%, 4/29/30 |
116,592 |
| |
|
547,158 |
| |
BIOTECHNOLOGY 1.1% | |
| 160,000 |
Amgen, Inc., Senior Unsecured Notes, 2.20%, 2/21/27 |
148,773 |
See Notes to Financial Statements.
61
Schedule
of Investments (continued)
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 34.2% (continued) | ||
| CONSUMER, NON-CYCLICAL 7.8% (continued) | ||
| |
BIOTECHNOLOGY 1.1% (continued) | |
| $ 150,000 |
Gilead Sciences, Inc., 4.60%,
9/1/35 |
$148,368
|
| 150,000 |
Regeneron Pharmaceuticals, Inc., Senior Unsecured Notes, 1.75%, 9/15/30
|
123,331 |
| |
|
420,472 |
| |
COMMERCIAL SERVICES 0.7% | |
| 150,000 |
PayPal Holdings, Inc., Senior Unsecured Notes, 2.65%, 10/1/26 |
142,463 |
| 155,000 |
Service Corp. International, Senior Unsecured Notes, 4.00%, 5/15/31
|
138,803 |
| |
|
281,266 |
| |
HEALTHCARE PRODUCTS 0.4% | |
| 150,000 |
Stryker Corp., 3.38%, 11/1/25
|
146,001 |
| |
HEALTHCARE SERVICES 1.2% | |
| 150,000 |
Centene Corp., Senior Unsecured Notes, 4.63%, 12/15/29 |
143,809 |
| 150,000 |
Elevance Health, Inc., 4.75%,
2/15/33 |
150,052 |
| 150,000 |
HCA, Inc., Guaranteed Notes, 5.38%, 2/1/25 |
149,779 |
| |
|
443,640 |
| |
PHARMACEUTICALS 3.0% | |
| 150,000 |
AbbVie, Inc., Senior Unsecured Notes, 2.95%, 11/21/26 |
143,835 |
| 150,000 |
Astrazeneca Finance LLC, 4.88%,
3/3/28 |
152,928 |
| 150,000 |
Becton Dickinson and Co., Senior Unsecured Notes, 3.70%, 6/6/27
|
145,357 |
| 150,000 |
CVS Health Corp., Senior Unsecured Notes, 1.75%, 8/21/30 |
123,909 |
| 150,000 |
Eli Lilly & Co., 4.70%,
2/27/33 |
153,816 |
| 150,000 |
Merck & Co., Inc., Senior Unsecured Notes, 3.90%, 3/7/39 |
136,361 |
| 150,000 |
Pfizer Investment Enterprises Pte. Ltd., 4.65%, 5/19/30 |
151,056 |
| 165,000 |
Takeda Pharmaceutical Co. Ltd., Senior Unsecured Notes, 3.03%, 7/9/40
|
126,811 |
| |
|
1,134,073 |
| |
|
2,972,610 |
| ENERGY 3.5% | ||
| |
OIL & GAS 1.2% | |
| 150,000 |
Canadian Natural Resources Ltd., Senior Unsecured Notes, 2.05%, 7/15/25
|
142,913 |
| 150,000 |
Hess Corp., Senior Unsecured Notes, 4.30%, 4/1/27 |
148,411 |
| 150,000 |
Occidental Petroleum Corp., Senior Unsecured Notes, 5.50%, 12/1/25
|
149,969 |
| |
|
441,293 |
| |
PIPELINES 2.3% | |
| 150,000 |
Boardwalk Pipelines LP, Guaranteed Notes, 4.95%, 12/15/24 |
148,948 |
| 150,000 |
Enbridge, Inc., Guaranteed Notes, 2.50%, 8/1/33 |
122,837 |
| 150,000 |
Energy Transfer LP, 5.25%, 4/15/29
|
151,122 |
| 150,000 |
Enterprise Products Operating LLC, Guaranteed Notes, 4.85%, 8/15/42
|
143,790 |
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 34.2% (continued) | ||
| ENERGY 3.5% (continued) | ||
| |
PIPELINES 2.3% (continued) | |
| $ 150,000 |
Kinder Morgan, Inc., 5.20%, 6/1/33
|
$149,097
|
| 150,000 |
Targa Resources Corp., 6.50%,
3/30/34 |
161,890 |
| |
|
877,684 |
| |
|
1,318,977 |
| FINANCIAL 9.0% | ||
| |
BANKS 4.4% | |
| 150,000 |
Bank of America Corp., (SOFR + 2.16%), 5.02%, 7/22/33(2) |
148,385 |
| 150,000 |
Bank of New York Mellon Corp., (SOFR + 1.51%), 4.71%, 2/1/34(2) |
146,718 |
| 160,000 |
Citigroup, Inc., Senior Unsecured Notes, (SOFR + 1.16%), 3.35%, 4/24/25(2) |
158,774 |
| 165,000 |
Citigroup, Inc., Subordinated Notes, 5.30%, 5/6/44 |
158,320 |
| 175,000 |
Goldman Sachs Group, Inc., Senior Unsecured Notes, 3.75%, 2/25/26
|
170,987 |
| 150,000 |
JPMorgan Chase & Co., Subordinated Notes, 4.13%, 12/15/26 |
147,029 |
| 175,000 |
JPMorgan Chase & Co., Senior Unsecured Notes, (SOFR + 1.64%), 3.96%, 11/15/48(2) |
146,510 |
| 150,000 |
Morgan Stanley, (SOFR + 2.56%), 6.34%, 10/18/33(2) |
161,745 |
| 150,000 |
NatWest Group PLC, (1 yr. CMT + 1.35%), 5.85%, 3/2/27(2) |
151,255 |
| 160,000 |
Royal Bank of Canada, 5.00%,
2/1/33 |
162,704 |
| 150,000 |
Wells Fargo & Co., (SOFR + 2.13%), 4.61%, 4/25/53(2) |
134,854 |
| |
|
1,687,281 |
| |
DIVERSIFIED FINANCIALS 1.6% | |
| 175,000 |
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, Guaranteed Notes, 1.75%, 1/30/26 |
162,509 |
| 150,000 |
Ally Financial, Inc., Senior Unsecured Notes, 4.75%, 6/9/27 |
144,744 |
| 165,000 |
Discover Financial Services, Senior Unsecured Notes, 3.95%, 11/6/24
|
162,194 |
| 150,000 |
Synchrony Financial, 4.88%,
6/13/25 |
147,438 |
| |
|
616,885 |
| |
INSURANCE 0.4% | |
| 150,000 |
Aflac, Inc., Senior Unsecured Notes, 3.60%, 4/1/30 |
141,629 |
| |
REITS 2.6% | |
| 150,000 |
American Tower Corp., 5.50%,
3/15/28 |
153,315 |
| 150,000 |
Crown Castle, Inc., Senior Unsecured Notes, 3.80%, 2/15/28 |
142,487 |
| 150,000 |
Equinix, Inc., Senior Unsecured Notes, 2.50%, 5/15/31 |
127,324 |
| 150,000 |
Extra Space Storage LP, 2.20%,
10/15/30 |
124,766 |
| 150,000 |
Kimco Realty Corp., Senior Unsecured Notes, 2.25%, 12/1/31 |
122,469 |
| 150,000 |
Welltower, Inc., Senior Unsecured Notes, 4.25%, 4/15/28 |
147,173 |
See Notes to Financial Statements.
62
December
31, 2023
| Principal Amount |
|
Value |
| CORPORATE BONDS & NOTES 34.2% (continued) | ||
| FINANCIAL 9.0% (continued) | ||
| |
REITS 2.6% (continued) | |
| $ 150,000 |
Weyerhaeuser Co., 4.75%, 5/15/26
|
$149,278 |
| |
|
966,812 |
| |
|
3,412,607 |
| INDUSTRIAL 2.1% | ||
| |
AEROSPACE/DEFENSE 0.4% | |
| 150,000 |
RTX Corp., 4.50%, 6/1/42 |
136,217 |
| |
ELECTRONICS 0.7% | |
| 160,000 |
Amphenol Corp., Senior Unsecured Notes, 2.20%, 9/15/31 |
134,630 |
| 150,000 |
Flex Ltd., Senior Unsecured Notes, 4.75%, 6/15/25 |
148,113 |
| |
|
282,743 |
| |
MISCELLANEOUS MANUFACTURERS 0.4% | |
| 150,000 |
Teledyne Technologies, Inc., 2.25%, 4/1/28 |
135,818 |
| |
TRANSPORTATION 0.6% | |
| 150,000 |
CSX Corp., Senior Unsecured Notes, 3.35%, 9/15/49 |
113,381 |
| 150,000 |
Union Pacific Corp., Senior Unsecured Notes, 3.25%, 2/5/50 |
114,904 |
| |
|
228,285 |
| |
|
783,063 |
| TECHNOLOGY 2.6% | ||
| |
COMPUTERS 0.8% | |
| 150,000 |
Apple, Inc., 4.65%, 2/23/46 |
147,962 |
| 150,000 |
Dell International LLC/EMC Corp., Senior Unsecured Notes, 4.90%, 10/1/26
|
150,239 |
| |
|
298,201 |
| |
SEMICONDUCTORS 1.0% | |
| 150,000 |
Analog Devices, Inc., Senior Unsecured Notes, 2.80%, 10/1/41 |
111,656 |
| 150,000 |
Broadcom, Inc., 4.30%, 11/15/32
|
143,905 |
| 150,000 |
NVIDIA Corp., 3.50%, 4/1/40 |
130,022 |
| |
|
385,583 |
| |
SOFTWARE 0.8% | |
| 150,000 |
Adobe, Inc., Senior Unsecured Notes, 2.30%, 2/1/30 |
134,370 |
| 150,000 |
Oracle Corp., 6.25%, 11/9/32
|
163,183 |
| |
|
297,553 |
| |
|
981,337 |
| UTILITIES 0.8% | ||
| |
ELECTRIC 0.8% | |
| 150,000 |
Duke Energy Corp., Senior Unsecured Notes, 4.50%, 8/15/32 |
145,193 |
| 150,000 |
Southern Co., 5.70%, 3/15/34
|
157,728 |
| |
|
302,921 |
| TOTAL CORPORATE BONDS & NOTES (Cost $13,517,390) |
12,965,115 | |
| Principal Amount |
|
Value |
| LONG-TERM MUNICIPAL SECURITIES 2.3% | ||
| |
CALIFORNIA 0.8% | |
| $ 150,000 |
Regents of the University of California Medical Center Pooled Revenue, Series Q, 4.13%, 5/15/32 |
$143,915
|
| 150,000 |
State of California, GO, 5.70%,
10/1/32 |
160,730 |
| |
|
304,645 |
| |
OREGON 0.3% | |
| 145,000 |
State of Oregon, Series C, GO, 2.38%, 5/1/36 |
113,159 |
| |
TEXAS 1.2% | |
| 500,000 |
Tarrant County Cultural Education Facilities Finance Corp., Revenue Bonds, Baylor Health Care System Project, Series C, Series C, 4.45%,
11/15/43 |
452,913 |
| TOTAL LONG-TERM MUNICIPAL SECURITIES (Cost $944,039) |
870,717 | |
| RESIDENTIAL MORTGAGE-BACKED SECURITIES 28.0% | ||
| 76,904 |
FHLMC Gold PC Pool #C91749, 4.00%, 1/1/34 |
75,363 |
| 32,206 |
FHLMC Gold PC Pool #G06224, 3.50%, 1/1/41 |
30,619 |
| 4,132 |
FHLMC Gold PC Pool #J11587, 4.00%, 1/1/25 |
4,080 |
| 16,288 |
FHLMC Gold PC Pool #Q06307, 3.50%, 2/1/42 |
15,437 |
| 18,820 |
FHLMC Gold PC Pool #Q08656, 4.00%, 6/1/42 |
18,204 |
| 34,973 |
FHLMC Gold PC Pool #Q08903, 3.50%, 6/1/42 |
33,111 |
| 110,546 |
FHLMC Gold PC Pool #Q14593, 3.00%, 1/1/43 |
102,154 |
| 131,357 |
FHLMC Gold Pool #Q34167, 4.00%,
6/1/45 |
126,814 |
| 28,583 |
FHLMC Gold Pool #Q57991, 4.00%,
8/1/48 |
27,576 |
| 174,884 |
FHLMC Pool #QB2958, 3.00%, 9/1/50
|
155,384 |
| 182,564 |
FHLMC Pool #QB5314, 2.50%, 11/1/50
|
156,114 |
| 222,593 |
FHLMC Pool #QB8153, 2.50%, 1/1/51
|
190,522 |
| 783,552 |
FHLMC Pool #QF1236, 4.50%, 10/1/52
|
759,777 |
| 132,132 |
FHLMC Pool #SD8023, 2.50%, 11/1/49
|
113,351 |
| 140,176 |
FHLMC Pool #SD8163, 3.50%, 8/1/51
|
129,168 |
| 418,904 |
FHLMC Pool #SD8173, 2.50%, 10/1/51
|
356,646 |
| 1,002,046 |
FHLMC Pool #SD8256, 4.00%, 10/1/52
|
947,712 |
| 47,324 |
FNMA Pool #AB2346, 4.50%, 2/1/41
|
47,263 |
| 23,130 |
FNMA Pool #AB5231, 2.50%, 5/1/27
|
22,305 |
| 22,927 |
FNMA Pool #AB5716, 3.00%, 7/1/27
|
22,248 |
| 45,983 |
FNMA Pool #AI4285, 5.00%, 6/1/41
|
46,672 |
| 204,234 |
FNMA Pool #AR6394, 3.00%, 2/1/43
|
187,725 |
| 56,775 |
FNMA Pool #AS5892, 3.50%, 10/1/45
|
52,987 |
| 18,939 |
FNMA Pool #AS6102, 3.50%, 11/1/45
|
17,675 |
| 33,107 |
FNMA Pool #AS6205, 3.50%, 11/1/45
|
30,898 |
| 25,366 |
FNMA Pool #AS6385, 4.00%, 12/1/45
|
24,454 |
| 63,335 |
FNMA Pool #AS9562, 3.00%, 5/1/47
|
57,115 |
| 72,346 |
FNMA Pool #AU4279, 3.00%, 9/1/43
|
66,494 |
| 57,652 |
FNMA Pool #AV0703, 4.00%, 12/1/43
|
56,037 |
| 22,735 |
FNMA Pool #AW7362, 2.50%, 8/1/29
|
21,618 |
| 66,062 |
FNMA Pool #AX0416, 4.00%, 8/1/44
|
63,443 |
See Notes to Financial Statements.
63
Schedule
of Investments (continued)
| Principal Amount |
|
Value |
| RESIDENTIAL MORTGAGE-BACKED SECURITIES 28.0% (continued) | ||
| $ 40,125 |
FNMA Pool #AY1670, 3.50%, 2/1/45
|
$37,449
|
| 24,544 |
FNMA Pool #AY4195, 4.00%, 5/1/45
|
23,670 |
| 31,833 |
FNMA Pool #BA3885, 3.50%, 11/1/45
|
29,709 |
| 1,024,756 |
FNMA Pool #BX7762, 5.00%, 3/1/53
|
1,013,937 |
| 130,806 |
FNMA Pool #CA2320, 3.50%, 9/1/48
|
122,979 |
| 63,202 |
FNMA Pool #CA5540, 3.00%, 4/1/50
|
56,618 |
| 716,059 |
FNMA Pool #CB0856, 3.00%, 6/1/51
|
634,320 |
| 798,158 |
FNMA Pool #CB5892, 4.50%, 3/1/53
|
773,940 |
| 1,043,464 |
FNMA Pool #FM9834, 3.50%, 6/1/49
|
972,181 |
| 50,310 |
FNMA Pool #MA0641, 4.00%, 2/1/31
|
49,317 |
| 69,323 |
FNMA Pool #MA4012, 2.00%, 5/1/35
|
62,538 |
| 444,920 |
FNMA Pool #MA4548, 2.50%, 2/1/52
|
378,677 |
| 779,051 |
FNMA Pool #MA5106, 5.00%, 8/1/53
|
770,722 |
| 11,278 |
FNMA REMIC Trust Series 2013-18, Series 2013-18, Class AE, 2.00%, 3/25/28
|
10,800 |
| 6,543 |
GNMA, Series 2011-136, Class GB, 2.50%, 5/20/40 |
6,267 |
| 1,281,683 |
GNMA, Series 2021-98, Class IG, IO, 3.00%, 6/20/51 |
203,496 |
| 33,254 |
GNMA II Pool #5332, 4.00%, 3/20/42
|
32,594 |
| 122,866 |
GNMA II Pool #MA3937, 3.50%,
9/20/46 |
115,607 |
| 113,106 |
GNMA II Pool #MA7054, 3.50%,
12/20/50 |
106,204 |
| 121,232 |
GNMA II Pool #MA7651, 3.50%,
10/20/51 |
113,058 |
| 401,836 |
GNMA II Pool #MA8945, 4.00%,
6/20/53 |
383,417 |
| 864,738 |
Government National Mortgage Association, MBS, 2.50%, 11/20/51
|
756,123 |
| TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES (Cost $11,338,673) |
10,612,589 | |
| U.S. TREASURY OBLIGATIONS 28.4% | ||
| 120,000 |
U.S. Treasury Bonds, 5.38%,
2/15/31 |
131,498 |
| 250,000 |
U.S. Treasury Bonds, 4.38%,
2/15/38 |
262,695 |
| 650,000 |
U.S. Treasury Bonds, 3.50%,
2/15/39 |
615,596 |
| 600,000 |
U.S. Treasury Bonds, 1.13%,
5/15/40 |
386,672 |
| 1,000,000 |
U.S. Treasury Bonds, 2.88%,
5/15/43 |
820,899 |
| 1,050,000 |
U.S. Treasury Bonds, 3.00%,
2/15/48 |
855,627 |
| 1,400,000 |
U.S. Treasury Bonds, 2.25%,
8/15/49 |
977,484 |
| 650,000 |
U.S. Treasury Bonds, 2.25%,
2/15/52 |
450,582 |
| 1,100,000 |
U.S. Treasury Notes, 2.25%,
11/15/24 |
1,075,379 |
| 325,000 |
U.S. Treasury Notes, 3.00%,
9/30/25 |
317,510 |
| 575,000 |
U.S. Treasury Notes, 4.50%,
7/15/26 |
580,346 |
| 1,906,300 |
U.S. Treasury Notes, 2.25%,
8/15/27 |
1,797,879 |
| 450,000 |
U.S. Treasury Notes, 2.75%,
2/15/28 |
430,154 |
| 200,000 |
U.S. Treasury Notes, 3.50%,
1/31/30 |
195,602 |
| 300,000 |
U.S. Treasury Notes, 1.50%,
2/15/30 |
261,363 |
| 500,000 |
U.S. Treasury Notes, 1.13%,
2/15/31 |
417,363 |
| 525,000 |
U.S. Treasury Notes, 2.75%,
8/15/32 |
480,785 |
| 750,000 |
U.S. Treasury Notes, 3.38%,
5/15/33 |
719,766 |
| TOTAL U.S. TREASURY OBLIGATIONS (Cost $11,748,024) |
10,777,200 | |
| Shares |
|
Value |
| SHORT-TERM INVESTMENTS 3.2% | ||
| |
MONEY MARKET FUNDS 3.2% | |
| 842,903 |
State Street Institutional U.S. Government Money Market Fund, Premier Class, 5.32%(4) |
$842,903
|
| 372,250 |
State Street Navigator Securities Lending Government Money Market Portfolio(5) |
372,250 |
| |
|
1,215,153 |
| TOTAL SHORT-TERM INVESTMENTS (Cost $1,215,153) |
1,215,153 | |
| TOTAL INVESTMENTS IN SECURITIES 100.4% (Cost $40,498,728) |
$38,091,767 | |
| EXCESS OF LIABILITIES OVER CASH AND OTHER ASSETS (0.4)% |
(146,009 ) | |
| NET ASSETS 100.0% |
$37,945,758 | |
| (1) |
Pursuant to Rule 144A under the Securities Act of 1933, this security can only be sold to qualified institutional investors. |
| (2) |
Floating or variable rate security. The rate disclosed is the rate in effect as of December 31, 2023. The information in parentheses represents the benchmark and reference rate for each relevant security and the rate adjusts based upon the reference rate and spread. The security may be further subject to interest rate floor and caps. For securities which do not indicate a reference rate and spread in their descriptions, the interest rate adjusts periodically based on current interest rates and, for mortgage-backed securities, prepayments in the underlying pool of assets. |
| (3) |
A portion or all of the security was held on loan. As of December 31, 2023, the market value of the securities on loan was $1,168,634. |
| (4) |
Rate reflects 7 day yield as of December 31, 2023. |
| (5) |
Securities with an aggregate market value of $1,168,634 were out on loan in exchange for collateral including $372,250 of cash collateral as of December 31, 2023. The collateral was invested in a cash collateral reinvestment vehicle. |
| CMT |
Constant Maturity Treasury |
| FHLMC |
Federal Home Loan Mortgage Corp. |
| FNMA |
Federal National Mortgage Association. |
| FREMF |
Freddie Mac Multifamily. |
| GNMA |
Government National Mortgage Association. |
| REITS |
Real Estate Investment Trusts. |
| REMIC |
Real Estate Mortgage Investment Conduit. |
| SOFR |
Secured Overnight Financing Rate. |
See Notes to Financial Statements.
64
December
31, 2023
The following table
summarizes the inputs used to value the Fund's investments in securities as of December 31, 2023 (See Note 1(B)):
| Investments in Securities: |
Level 1 |
Level 2 |
Level 3 |
Total |
| Assets |
|
|
|
|
| Collateralized Mortgage Obligations |
$— |
$890,612 |
$— |
$890,612 |
| Commercial Mortgage-Backed Securities |
— |
760,381 |
— |
760,381 |
| Corporate Bonds & Notes* |
— |
12,965,115 |
— |
12,965,115 |
| Long-Term Municipal Securities* |
— |
870,717 |
— |
870,717 |
| Residential Mortgage-Backed Securities |
— |
10,612,589 |
— |
10,612,589 |
| U.S. Treasury Obligations |
— |
10,777,200 |
— |
10,777,200 |
| Short-Term Investments |
1,215,153 |
— |
— |
1,215,153 |
| Total Investments in Securities
|
$1,215,153 |
$36,876,614 |
$— |
$38,091,767 |
| * |
See Schedule of Investments for further breakdown by category. |
See Notes to Financial Statements.
65
Statements of Assets and Liabilities at December 31, 2023
| |
Value Line Small Cap Opportunities Fund, Inc. |
Value Line Mid Cap Focused
Fund, Inc. |
| Assets: |
|
|
| Investments in securities, at value* |
$532,693,999 |
$1,254,850,165 |
| Receivable for capital shares sold |
1,582,355 |
11,679,241 |
| Receivable for securities sold |
1,396,062 |
— |
| Dividends and interest receivable |
272,599 |
750,706 |
| Prepaid expenses |
55,697 |
77,157 |
| Receivable for securities lending income |
302 |
1,436 |
| Total Assets |
536,001,014 |
1,267,358,705 |
| Liabilities: |
|
|
| Payable for securities purchased |
1,383,056 |
1,738,146 |
| Payable for capital shares redeemed |
203,928 |
2,831,508 |
| Accrued expenses: |
|
|
| Advisory fee |
307,871 |
662,959 |
| Service
and distribution plan fees |
66,605 |
72,337 |
| Auditing and legal fees payable |
32,420 |
58,946 |
| Printing fee payable |
23,438 |
41,675 |
| Transfer agent fees |
6,591 |
8,408 |
| Sub-transfer agent fees |
4,715 |
— |
| Other |
23,988 |
80,337 |
| Total Liabilities |
2,052,612 |
5,494,316 |
| Commitments and contingent
liabilities(1) |
|
|
| Net Assets |
$533,948,402
|
$1,261,864,389
|
| Net assets consist of: |
|
|
| Capital stock, at $0.001 and $1.00 par value, respectively (authorized
300,000,000 and 50,000,000 shares, respectively) |
$10,150 |
$38,947,284 |
| Additional paid-in capital |
296,016,668 |
895,701,519 |
| Distributable Earnings/(Loss) |
237,921,584 |
327,215,586 |
| Net Assets |
$533,948,402
|
$1,261,864,389
|
| Net Asset Value Per Share |
|
|
| Investor Class |
|
|
| Net
Assets |
$321,657,771 |
$424,470,885 |
| Shares Outstanding |
6,184,906 |
13,165,842 |
| Net
Asset Value, Offering and Redemption Price per Outstanding Share |
$52.01 |
$32.24 |
| Institutional Class |
|
|
| Net
Assets |
$212,290,631 |
$837,393,504 |
| Shares Outstanding |
3,965,031 |
25,781,442 |
| Net
Asset Value, Offering and Redemption Price per Outstanding Share |
$53.54 |
$32.48 |
| *Includes securities on loan of |
$— |
$10,919,581 |
| Cost
of investments |
$288,939,611 |
$928,769,842 |
| (1) |
See Note 5 in Notes to the Financial Statements. |
See Notes to Financial Statements.
66
Statements of Assets and Liabilities at December 31, 2023 (continued)
| |
Value Line Select Growth Fund, Inc. |
Value Line Larger Companies Focused Fund, Inc. |
| Assets: |
|
|
| Investments in securities, at value* |
$417,432,405 |
$317,537,065 |
| Dividends and interest receivable |
714,311 |
51,686 |
| Prepaid expenses |
27,247 |
22,501 |
| Receivable for capital shares sold |
24,393 |
348,855 |
| Receivable for securities lending income |
— |
1,500 |
| Total Assets |
418,198,356 |
317,961,607 |
| Liabilities: |
|
|
| Payable for capital shares redeemed |
224,477 |
59,180 |
| Payable upon return of securities on loan (See Note 1(K)) |
— |
535,925 |
| Payable for securities purchased |
— |
2,948,873 |
| Accrued expenses: |
|
|
| Advisory fee |
249,778 |
180,474 |
| Service
and distribution plan fees |
83,139 |
62,419 |
| Auditing and legal fees payable |
29,588 |
24,539 |
| Transfer agent fees |
23,209 |
10,361 |
| Printing fee payable |
23,175 |
16,734 |
| Sub-transfer agent fees |
4,522 |
3,298 |
| Directors’ fees and expenses |
2,039 |
— |
| Other
|
24,207 |
21,172 |
| Total Liabilities |
664,134 |
3,862,975 |
| Commitments and contingent
liabilities(1) |
|
|
| Net Assets |
$417,534,222
|
$314,098,632
|
| Net assets consist of: |
|
|
| Capital stock, at $1.00 par value (authorized 100,000,000 and 50,000,000 shares, respectively) |
$12,184,661 |
$10,673,558 |
| Additional paid-in capital |
173,052,302 |
196,468,571 |
| Distributable Earnings/(Loss) |
232,297,259 |
106,956,503 |
| Net Assets |
$417,534,222
|
$314,098,632
|
| Net Asset Value Per Share |
|
|
| Investor Class |
|
|
| Net Assets |
$397,990,382 |
$304,094,481 |
| Shares
Outstanding |
11,621,288 |
10,339,924 |
| Net Asset Value, Offering and Redemption Price per Outstanding
Share |
$34.25 |
$29.41 |
| Institutional Class |
|
|
| Net Assets |
$19,543,840 |
$10,004,151 |
| Shares
Outstanding |
563,373 |
333,634 |
| Net Asset Value, Offering and Redemption Price per Outstanding
Share |
$34.69 |
$29.99 |
| *Includes securities on loan of |
$— |
$9,527,742 |
| Cost of investments |
$198,911,708 |
$203,998,439 |
| (1) |
See Note 5 in Notes to the Financial Statements. |
See Notes to Financial Statements.
67
Statements of Assets and Liabilities at December 31, 2023 (continued)
| |
Value Line Asset Allocation Fund, Inc. |
Value Line Capital Appreciation Fund, Inc. |
| Assets: |
|
|
| Investments in securities, at value* |
$947,306,829 |
$454,398,381 |
| Dividends and interest receivable |
3,292,286 |
1,187,910 |
| Receivable for capital shares sold |
2,811,395 |
438,607 |
| Prepaid expenses |
41,724 |
27,142 |
| Receivable for securities lending income |
1,003 |
13,293 |
| Total Assets |
953,453,237 |
456,065,333 |
| Liabilities: |
|
|
| Payable upon return of securities on loan (See Note 1(K)) |
3,823,003 |
11,680,188 |
| Payable for capital shares redeemed |
603,210 |
184,942 |
| Accrued expenses: |
|
|
| Advisory fee |
506,667 |
233,876 |
| Service and distribution plan fees |
81,586 |
72,457 |
| Printing fee payable |
54,994 |
29,425 |
| Auditing and legal fees payable |
43,864 |
29,662 |
| Transfer agent fees |
22,386 |
15,737 |
| Sub-transfer agent fees |
18,654 |
7,760 |
| Directors’ fees and expenses |
113 |
2,271 |
| Other |
35,897 |
39,935 |
| Total Liabilities |
5,190,374 |
12,296,253 |
| Commitments and contingent
liabilities(1) |
|
|
| Net Assets |
$948,262,863
|
$443,769,080
|
| Net assets consist of: |
|
|
| Capital stock, at $0.001 and $1.00 par value, respectively (authorized 300,000,000
and 75,000,000 shares, respectively) |
$23,263 |
$42,255,869 |
| Additional paid-in capital |
653,614,736 |
327,492,920 |
| Distributable Earnings/(Loss) |
294,624,864 |
74,020,291 |
| Net Assets |
$948,262,863
|
$443,769,080
|
| Net Asset Value Per Share |
|
|
| Investor Class |
|
|
| Net
Assets |
$387,503,773 |
$348,141,930 |
| Shares Outstanding |
9,517,278 |
33,148,019 |
| Net
Asset Value, Offering and Redemption Price per Outstanding Share |
$40.72 |
$10.50 |
| Institutional Class |
|
|
| Net
Assets |
$560,759,090 |
$95,627,150 |
| Shares Outstanding |
13,745,749 |
9,107,850 |
| Net
Asset Value, Offering and Redemption Price per Outstanding Share |
$40.80 |
$10.50 |
| *Includes securities on loan of |
$6,749,681 |
$20,708,639 |
| Cost
of investments |
$678,779,934 |
$346,413,025 |
| (1) |
See Note 5 in Notes to the Financial Statements. |
See Notes to Financial Statements.
68
Statements of Assets and Liabilities at December 31, 2023 (continued)
| |
Value Line Core Bond Fund |
| Assets: |
|
| Investments in securities, at value* |
$38,091,767 |
| Dividends and interest receivable |
289,372 |
| Prepaid expenses |
6,805 |
| Receivable for capital shares sold |
4,000 |
| Receivable for securities lending income |
140 |
| Total Assets |
38,392,084 |
| Liabilities: |
|
| Payable upon return of securities on loan (See Note 1(K)) |
372,250 |
| Dividends payable to shareholders |
8,842 |
| Payable for capital shares redeemed |
5,965 |
| Accrued expenses: |
|
| Printing fee payable |
14,204 |
| Auditing and legal fees payable |
14,154 |
| Custody and accounting fees payable |
11,878 |
| Transfer agent fees |
4,987 |
| Advisory fee |
4,087 |
| Directors’ fees and expenses |
355 |
| Other |
9,604 |
| Total Liabilities |
446,326 |
| Commitments and contingent
liabilities(1) |
|
| Net Assets |
$37,945,758
|
| Net assets consist of: |
|
| Capital stock, at $0.01 par value (authorized unlimited shares) |
$28,770 |
| Additional paid-in capital |
43,587,916 |
| Distributable Earnings/(Loss) |
(5,670,928 ) |
| Net Assets |
$37,945,758
|
| Net Asset Value Per Share |
|
| Investor Class |
|
| Net
Assets |
$37,945,758 |
| Shares Outstanding |
2,876,983 |
| Net
Asset Value, Offering and Redemption Price per Outstanding Share |
$13.19 |
| *Includes securities on loan of |
$1,168,634 |
| Cost
of investments |
$40,498,728 |
| (1) |
See Note 5 in Notes to the Financial Statements. |
See Notes to Financial Statements.
69
Statements of Operations
| |
Value Line Small Cap Opportunities Fund, Inc. |
Value Line Mid Cap Focused
Fund, Inc. |
| Investment Income: |
|
|
| Dividends (net of foreign withholding tax of $0 and $29,433, respectively) |
$3,912,989 |
$10,334,610 |
| Securities lending income (Net) |
4,809 |
18,990 |
| Total Income |
3,917,798 |
10,353,600 |
| Expenses: |
|
|
| Advisory fees |
3,250,784 |
5,393,874 |
| Service and distribution plan fees |
740,432 |
834,407 |
| Sub-transfer agent fees |
299,954 |
516,409 |
| Auditing and legal fees |
146,934 |
262,857 |
| Custody and accounting fees |
82,025 |
109,577 |
| Registration and filing fees |
71,594 |
212,428 |
| Transfer agent fees |
64,674 |
255,374 |
| Directors’ fees and expenses |
64,164 |
116,890 |
| Printing and postage fees |
39,179 |
95,124 |
| Fund administration fees |
31,001 |
31,000 |
| Compliance and tax service fees |
29,007 |
39,486 |
| Insurance fees |
23,181 |
45,997 |
| Other |
41,234 |
49,745 |
| Recoupment (See Note 5) |
310 |
— |
| Total
Expenses Before Fees Waived (See Note 5) |
4,884,473 |
7,963,168 |
| Less: Fees Waived/Reimbursed by the Advisor |
(76,077 ) |
(18,602 ) |
| Net
Expenses |
4,808,396 |
7,944,566 |
| Net Investment Income/(Loss) |
(890,598 ) |
2,409,034 |
| Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Exchange Transactions: |
|
|
| Net Realized Gain/(Loss) From: |
|
|
| Investments in securities |
(3,163,469 ) |
319,202 |
| Foreign currency transactions |
— |
(199 ) |
| |
(3,163,469 ) |
319,003 |
| Change in Net Unrealized Appreciation/(Depreciation) of: |
|
|
| Investments in securities |
91,699,908 |
181,317,798 |
| Net Realized Gain/(Loss) and Change in Net Unrealized Appreciation/(Depreciation) on Investments and Foreign Exchange Transactions |
88,536,439 |
181,636,801 |
| Net Increase/(Decrease) in Net Assets from
Operations |
$87,645,841
|
$184,045,835
|
See Notes to Financial Statements.
70
Statements of Operations (continued)
| |
Value Line Select Growth Fund, Inc. |
Value Line Larger Companies Focused Fund, Inc. |
| Investment Income: |
|
|
| Dividends (net of foreign withholding tax of $8,811 and $0, respectively) |
$4,492,500 |
$1,391,950 |
| Securities lending income (Net) |
— |
12,236 |
| Total Income |
4,492,500 |
1,404,186 |
| Expenses: |
|
|
| Advisory fees |
2,749,075 |
1,875,010 |
| Service and distribution plan fees |
903,559 |
633,495 |
| Auditing and legal fees |
128,562 |
92,536 |
| Transfer agent fees |
114,431 |
102,794 |
| Sub-transfer agent fees |
90,236 |
32,542 |
| Custody and accounting fees |
71,828 |
65,271 |
| Registration and filing fees |
66,762 |
63,904 |
| Directors’ fees and expenses |
54,834 |
33,472 |
| Printing and postage fees |
37,988 |
27,482 |
| Insurance fees |
34,515 |
20,518 |
| Fund
administration fees |
30,999 |
30,999 |
| Compliance and tax service fees |
26,085 |
21,025 |
| Other |
39,278 |
37,155 |
| Recoupment (See Note 5) |
855 |
3,232 |
| Total
Expenses Before Fees Waived (See Note 5) |
4,349,007 |
3,039,435 |
| Less: Fees Waived/Reimbursed by the Advisor |
(28,799 ) |
(70,055 ) |
| Net
Expenses |
4,320,208 |
2,969,380 |
| Net Investment Income/(Loss) |
172,292 |
(1,565,194 ) |
| Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Exchange Transactions: |
|
|
| Net Realized Gain/(Loss) From: |
|
|
| Investments in securities |
44,668,998 |
235,276 |
| Foreign currency transactions |
(9 ) |
— |
| |
44,668,989 |
235,276 |
| Change in Net Unrealized Appreciation/(Depreciation) of: |
|
|
| Investments in securities |
58,069,612 |
119,054,270 |
| Net Realized Gain/(Loss) and Change in Net Unrealized Appreciation/(Depreciation) on Investments and Foreign Exchange Transactions |
102,738,601 |
119,289,546 |
| Net Increase/(Decrease) in Net Assets from
Operations |
$102,910,893
|
$117,724,352
|
See Notes to Financial Statements.
71
Statements of Operations (continued)
| |
Value Line Asset Allocation Fund, Inc. |
Value Line Capital Appreciation Fund, Inc. |
| Investment Income: |
|
|
| Interest |
$10,380,569 |
$3,766,554 |
| Dividends (net of foreign withholding tax of $24 and $10,647,
respectively) |
9,167,556 |
3,848,014 |
| Securities lending income (Net) |
18,677 |
196,401 |
| Total Income |
19,566,802 |
7,810,969 |
| Expenses: |
|
|
| Advisory fees |
5,918,578 |
2,639,514 |
| Service and distribution plan fees |
934,434 |
791,130 |
| Sub-transfer agent fees |
533,615 |
170,112 |
| Auditing and legal fees |
290,178 |
140,781 |
| Transfer agent fees |
207,369 |
145,017 |
| Directors’ fees and expenses |
141,235 |
60,816 |
| Custody and accounting fees |
130,122 |
100,995 |
| Registration and filing fees |
86,236 |
71,836 |
| Printing and postage fees |
78,716 |
43,845 |
| Insurance fees |
58,491 |
40,013 |
| Compliance and tax service fees |
52,469 |
27,913 |
| Fund
administration fees |
30,999 |
31,000 |
| Other |
55,438 |
42,317 |
| Total
Expenses Before Fees Waived (See Note 5) |
8,517,880 |
4,305,289 |
| Less: Fees Waived/Reimbursed by the Advisor |
— |
(41,652 ) |
| Net
Expenses |
8,517,880 |
4,263,637 |
| Net Investment Income/(Loss) |
11,048,922 |
3,547,332 |
| Net Realized and Unrealized Gain/(Loss) on Investments: |
|
|
| Net Realized Gain/(Loss) From: |
|
|
| Investments in securities |
87,715,477 |
(17,058,330 ) |
| Change in Net Unrealized Appreciation/(Depreciation) of: |
|
|
| Investments in securities |
83,142,678 |
132,715,092 |
| Net Realized Gain/(Loss) and Change in Net Unrealized Appreciation/(Depreciation) on
Investments |
170,858,155 |
115,656,762 |
| Net Increase/(Decrease) in Net Assets from
Operations |
$181,907,077
|
$119,204,094
|
See Notes to Financial Statements.
72
Statements of Operations (continued)
| |
Value Line Core Bond Fund |
| Investment Income: |
|
| Interest |
$1,387,534 |
| Dividends |
113,738 |
| Securities lending income (Net) |
2,757 |
| Total Income |
1,504,029 |
| Expenses: |
|
| Advisory fees |
123,931 |
| Service and distribution plan fees |
97,765 |
| Custody and accounting fees |
70,918 |
| Transfer agent fees |
50,559 |
| Registration and filing fees |
37,275 |
| Fund
administration fees |
31,000 |
| Auditing and legal fees |
27,220 |
| Printing and postage fees |
11,373 |
| Compliance and tax service fees |
10,037 |
| Directors’ fees and expenses |
5,145 |
| Insurance fees |
1,815 |
| Other |
35,321 |
| Total Expenses Before Fees Waived (See Note 5) |
502,359 |
| Less:
Fees Waived/Reimbursed by the Advisor |
(78,228 ) |
| Less: Service and Distribution Plan Fees Waived |
(97,765 ) |
| Net
Expenses |
326,366 |
| Net Investment Income/(Loss) |
1,177,663 |
| Net Realized and Unrealized Gain/(Loss) on Investments: |
|
| Net Realized Gain/(Loss) From: |
|
| Investments in securities |
(2,162,274 ) |
| Change in Net Unrealized Appreciation/(Depreciation) of: |
|
| Investments in securities |
2,731,835 |
| Net Realized Gain/(Loss) and Change in Net Unrealized Appreciation/(Depreciation) on
Investments |
569,561 |
| Net Increase/(Decrease) in Net Assets from
Operations |
$1,747,224
|
See Notes to Financial Statements.
73
Statements of Changes in Net Assets
| |
Value Line Small Cap Opportunities Fund, Inc. | ||
| |
Year Ended December 31, 2023 |
Period Ended December 31, 2022* |
Year Ended
March 31, 2022 |
| Operations: |
|
|
|
| Net investment income/(loss) |
$(890,598
) |
$(76,858
) |
$(2,258,286
) |
| Net
realized gain/(loss) on investments and foreign currency |
(3,163,469 ) |
12,566,124 |
19,499,476 |
| Change in net unrealized appreciation/(depreciation) on investments |
91,699,908 |
(53,121,918 ) |
(31,182,773 ) |
| Net increase/(decrease) in net assets from operations |
87,645,841 |
(40,632,652 ) |
(13,941,583 ) |
| Distributions to Shareholders from: |
|
|
|
| Investor Class |
(2,614,949 ) |
(7,459,546 ) |
(21,858,560 ) |
| Institutional Class |
(1,588,725 ) |
(2,462,064 ) |
(7,681,925 ) |
| |
(4,203,674 ) |
(9,921,610 ) |
(29,540,485 ) |
| Share Transactions: |
|
|
|
| Proceeds from sale of shares |
|
|
|
| Investor Class |
23,080,276 |
5,203,536 |
12,595,498 |
| Institutional Class |
117,496,386 |
15,630,836 |
42,828,529 |
| Proceeds from reinvestment of distributions to shareholders |
|
|
|
| Investor Class |
2,593,186 |
7,370,018 |
21,567,199 |
| Institutional Class |
1,548,328 |
2,422,886 |
7,626,154 |
| Cost of shares redeemed |
|
|
|
| Investor Class |
(35,246,811 ) |
(29,798,131 ) |
(60,555,544 ) |
| Institutional Class |
(27,478,446 ) |
(36,809,974 ) |
(31,534,058 ) |
| Net increase/(decrease) in net assets from capital share transactions |
81,992,919 |
(35,980,829 ) |
(7,472,222 ) |
| Total increase/(decrease) in net
assets |
165,435,086 |
(86,535,091 ) |
(50,954,290 ) |
| Net Assets: |
|
|
|
| Beginning of year |
368,513,316 |
455,048,407 |
506,002,697 |
| End of year |
$533,948,402
|
$368,513,316
|
$455,048,407
|
| Capital Share Transactions: |
|
|
|
| Shares sold |
|
|
|
| Investor Class |
483,677 |
119,481 |
234,434 |
| Institutional Class |
2,381,879 |
346,209 |
791,942 |
| Shares issued to shareholders in reinvestment of distributions |
|
|
|
| Investor Class |
51,067 |
166,254 |
406,698 |
| Institutional Class |
29,622 |
53,239 |
140,548 |
| Shares redeemed |
|
|
|
| Investor Class |
(747,457 ) |
(680,191 ) |
(1,129,530 ) |
| Institutional Class |
(563,699 ) |
(838,716 ) |
(576,331 ) |
| * |
For the nine month period ended December 31, 2022. |
See Notes to Financial Statements.
74
Statements of Changes in Net Assets (continued)
| |
Value Line Mid Cap Focused Fund, Inc. |
Value Line Select Growth Fund, Inc. | ||
| |
Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
Year Ended December 31, 2023 |
Year Ended
December 31, 2022 |
| Operations: |
|
|
|
|
| Net investment income/(loss) |
$2,409,034 |
$889,712 |
$172,292 |
$(1,415,817
) |
| Net
realized gain/(loss) on investments and foreign
currency |
319,003 |
23,352,792 |
44,668,989 |
32,669,166 |
| Change in net unrealized appreciation/(depreciation) on investments |
181,317,798 |
(69,497,314 ) |
58,069,612 |
(133,069,415 ) |
| Net increase/(decrease) in net assets from operations |
184,045,835 |
(45,254,810 ) |
102,910,893 |
(101,816,066 ) |
| Distributions to Shareholders from: |
|
|
|
|
| Investor Class |
(113,528 ) |
(18,517,510 ) |
(36,539,060 ) |
(36,873,982 ) |
| Institutional Class |
(1,816,376 ) |
(16,342,913 ) |
(1,808,302 ) |
(1,192,230 ) |
| |
(1,929,904 ) |
(34,860,423 ) |
(38,347,362 ) |
(38,066,212 ) |
| Share Transactions: |
|
|
|
|
| Proceeds from sale of shares |
|
|
|
|
| Investor Class |
142,821,511 |
40,266,093 |
5,220,848 |
9,362,171 |
| Institutional Class |
595,415,538 |
163,549,665 |
9,878,151 |
1,646,171 |
| Proceeds from reinvestment of distributions to shareholders |
|
|
|
|
| Investor Class |
92,050 |
17,788,155 |
35,280,364 |
35,541,509 |
| Institutional Class |
1,681,591 |
14,303,115 |
1,752,043 |
1,148,276 |
| Cost of shares redeemed |
|
|
|
|
| Investor Class |
(62,295,463 ) |
(52,198,292 ) |
(36,268,595 ) |
(64,488,504 ) |
| Institutional Class |
(126,095,577 ) |
(70,920,693 ) |
(5,206,744 ) |
(3,412,772 ) |
| Net increase/(decrease) in net assets from capital share transactions |
551,619,650 |
112,788,043 |
10,656,067 |
(20,203,149 ) |
| Total increase/(decrease) in net assets |
733,735,581 |
32,672,810 |
75,219,598 |
(160,085,427 ) |
| Net Assets: |
|
|
|
|
| Beginning of year |
528,128,808 |
495,455,998 |
342,314,624 |
502,400,051 |
| End of year |
$1,261,864,389
|
$528,128,808
|
$417,534,222
|
$342,314,624
|
| Capital Share Transactions: |
|
|
|
|
| Shares sold |
|
|
|
|
| Investor Class |
4,938,007 |
1,456,599 |
158,664 |
264,675 |
| Institutional Class |
20,515,111 |
5,931,133 |
293,538 |
48,704 |
| Shares issued to shareholders in reinvestment of distributions |
|
|
|
|
| Investor Class |
2,846 |
651,104 |
1,033,705 |
1,189,475 |
| Institutional Class |
52,583 |
519,924 |
50,681 |
38,085 |
| Shares redeemed |
|
|
|
|
| Investor Class |
(2,163,808 ) |
(1,903,065 ) |
(1,105,555 ) |
(1,949,030 ) |
| Institutional Class |
(4,326,212 ) |
(2,546,765 ) |
(153,195 ) |
(101,255 ) |
See Notes to Financial Statements.
75
Statements of Changes in Net Assets (continued)
| |
Value Line Larger Companies Focused Fund, Inc. | |
| |
Year Ended December 31, 2023 |
Year Ended
December 31, 2022 |
| Operations: |
|
|
| Net investment income/(loss) |
$(1,565,194
) |
$(780,674
) |
| Net
realized gain/(loss) on investments |
235,276 |
(4,928,797 ) |
| Change in net unrealized appreciation/(depreciation) on
investments |
119,054,270 |
(136,211,646 ) |
| Net increase/(decrease) in net assets from
operations |
117,724,352 |
(141,921,117 ) |
| Distributions to Shareholders from: |
|
|
| Investor Class |
— |
(25,577,632 ) |
| Institutional Class |
— |
(504,353 ) |
| |
— |
(26,081,985 ) |
| Share Transactions: |
|
|
| Proceeds from sale of shares |
|
|
| Investor Class |
15,087,152 |
2,018,071 |
| Institutional Class |
5,296,495 |
1,349,644 |
| Proceeds from reinvestment of distributions to shareholders |
|
|
| Investor Class |
929 |
24,534,042 |
| Institutional Class |
— |
504,353 |
| Cost of shares redeemed |
|
|
| Investor Class |
(26,501,619 ) |
(29,153,077 ) |
| Institutional Class |
(2,190,836 ) |
(2,978,782 ) |
| Net increase/(decrease) in net assets from capital share transactions |
(8,307,879 ) |
(3,725,749 ) |
| Total increase/(decrease) in net
assets |
109,416,473 |
(171,728,851 ) |
| Net Assets: |
|
|
| Beginning of year |
204,682,159 |
376,411,010 |
| End of year |
$314,098,632
|
$204,682,159
|
| Capital Share Transactions: |
|
|
| Shares sold |
|
|
| Investor Class |
577,865 |
80,218 |
| Institutional Class |
203,791 |
47,853 |
| Shares issued to shareholders in reinvestment of distributions |
|
|
| Investor Class |
44 |
1,251,795 |
| Institutional Class |
— |
25,306 |
| Shares redeemed |
|
|
| Investor Class |
(1,088,062 ) |
(1,182,637 ) |
| Institutional Class |
(87,129 ) |
(107,126 ) |
See Notes to Financial Statements.
76
Statements of Changes in Net Assets (continued)
| |
Value Line Asset Allocation Fund, Inc. | ||
| |
Year Ended December 31, 2023 |
Period Ended December 31, 2022* |
Year Ended
March 31, 2022 |
| Operations: |
|
|
|
| Net investment income/(loss) |
$11,048,922 |
$5,029,611 |
$4,088,777 |
| Net
realized gain/(loss) on investments and foreign currency |
87,715,477 |
30,602,944 |
100,796,731 |
| Change in net unrealized appreciation/(depreciation) on investments |
83,142,678 |
(159,997,607 ) |
(5,767,838 ) |
| Net increase/(decrease) in net assets from operations |
181,907,077 |
(124,365,052 ) |
99,117,670 |
| Distributions to Shareholders from: |
|
|
|
| Investor Class |
(35,390,413 ) |
(21,445,941 ) |
(36,991,741 ) |
| Institutional Class |
(51,976,292 ) |
(36,399,992 ) |
(78,180,633 ) |
| |
(87,366,705 ) |
(57,845,933 ) |
(115,172,374 ) |
| Share Transactions: |
|
|
|
| Proceeds from sale of shares |
|
|
|
| Investor Class |
16,883,889 |
11,349,157 |
74,629,812 |
| Institutional Class |
61,530,093 |
55,211,793 |
255,362,228 |
| Proceeds from reinvestment of distributions to shareholders |
|
|
|
| Investor Class |
34,071,801 |
20,629,146 |
35,510,337 |
| Institutional Class |
50,629,390 |
35,347,148 |
76,064,513 |
| Cost of shares redeemed |
|
|
|
| Investor Class |
(73,040,376 ) |
(93,642,302 ) |
(232,929,799 ) |
| Institutional Class |
(183,840,916 ) |
(318,901,827 ) |
(559,927,173 ) |
| Net increase/(decrease) in net assets from capital share transactions |
(93,766,119 ) |
(290,006,885 ) |
(351,290,082 ) |
| Total increase/(decrease) in net
assets |
774,253 |
(472,217,870 ) |
(367,344,786 ) |
| Net Assets: |
|
|
|
| Beginning of year |
947,488,610 |
1,419,706,480 |
1,787,051,266 |
| End of year |
$948,262,863
|
$947,488,610
|
$1,419,706,480
|
| Capital Share Transactions: |
|
|
|
| Shares sold |
|
|
|
| Investor Class |
421,586 |
290,616 |
1,628,720 |
| Institutional Class |
1,536,582 |
1,410,469 |
5,536,165 |
| Shares issued to shareholders in reinvestment of distributions |
|
|
|
| Investor Class |
839,414 |
543,731 |
783,720 |
| Institutional Class |
1,245,189 |
930,188 |
1,676,134 |
| Shares redeemed |
|
|
|
| Investor Class |
(1,837,383 ) |
(2,407,154 ) |
(5,153,267 ) |
| Institutional Class |
(4,614,074 ) |
(8,223,343 ) |
(12,705,212 ) |
| * |
For the nine month period ended December 31, 2022. |
See Notes to Financial Statements.
77
Statements of Changes in Net Assets (continued)
| |
Value Line Capital Appreciation Fund, Inc. | |
| |
Year Ended December 31, 2023 |
Year Ended
December 31, 2022 |
| Operations: |
|
|
| Net investment income/(loss) |
$3,547,332 |
$2,252,772 |
| Net
realized gain/(loss) on investments |
(17,058,330 ) |
(8,895,638 ) |
| Change in net unrealized appreciation/(depreciation) on
investments |
132,715,092 |
(185,679,014 ) |
| Net increase/(decrease) in net assets from
operations |
119,204,094 |
(192,321,880 ) |
| Distributions to Shareholders from: |
|
|
| Investor Class |
(2,594,556 ) |
(28,673,244 ) |
| Institutional Class |
(922,424 ) |
(8,788,632 ) |
| |
(3,516,980 ) |
(37,461,876 ) |
| Share Transactions: |
|
|
| Proceeds from sale of shares |
|
|
| Investor Class |
42,099,683 |
11,383,375 |
| Institutional Class |
29,251,689 |
35,326,737 |
| Proceeds from reinvestment of distributions to shareholders |
|
|
| Investor Class |
2,421,837 |
27,086,503 |
| Institutional Class |
895,321 |
8,509,001 |
| Cost of shares redeemed |
|
|
| Investor Class |
(64,132,807 ) |
(100,093,807 ) |
| Institutional Class |
(41,161,891 ) |
(86,597,207 ) |
| Net increase/(decrease) in net assets from capital share transactions |
(30,626,168 ) |
(104,385,398 ) |
| Total increase/(decrease) in net
assets |
85,060,946 |
(334,169,154 ) |
| Net Assets: |
|
|
| Beginning of year |
358,708,134 |
692,877,288 |
| End of year |
$443,769,080
|
$358,708,134
|
| Capital Share Transactions: |
|
|
| Shares sold |
|
|
| Investor Class |
4,533,441 |
1,088,702 |
| Institutional Class |
3,221,824 |
3,442,690 |
| Shares issued to shareholders in reinvestment of distributions |
|
|
| Investor Class |
235,358 |
3,275,272 |
| Institutional Class |
87,009 |
1,028,900 |
| Shares redeemed |
|
|
| Investor Class |
(6,948,162 ) |
(10,068,016 ) |
| Institutional Class |
(4,480,277 ) |
(9,074,155 ) |
See Notes to Financial Statements.
78
Statements of Changes in Net Assets (continued)
| |
Value Line Core Bond Fund | |
| |
Year Ended December 31, 2023 |
Year Ended
December 31, 2022 |
| Operations: |
|
|
| Net investment income/(loss) |
$1,177,663 |
$716,220 |
| Net
realized gain/(loss) on investments |
(2,162,274 ) |
(1,033,581 ) |
| Change in net unrealized appreciation/(depreciation) on
investments |
2,731,835 |
(5,907,025 ) |
| Net increase/(decrease) in net assets from
operations |
1,747,224 |
(6,224,386 ) |
| Distributions to Shareholders from: |
|
|
| Investor Class |
(1,164,055 ) |
(762,097 ) |
| Share Transactions (Investor Class): |
|
|
| Proceeds from sale of shares |
264,022 |
1,182,592 |
| Proceeds from reinvestment of distributions to
shareholders |
1,066,590 |
703,071 |
| Cost of shares redeemed |
(4,714,059 ) |
(4,420,589 ) |
| Net increase/(decrease) in net assets from capital share transactions |
(3,383,447 ) |
(2,534,926 ) |
| Total decrease in net assets |
(2,800,278 ) |
(9,521,409 ) |
| Net Assets: |
|
|
| Beginning of year |
40,746,036 |
50,267,445 |
| End of year |
$37,945,758
|
$40,746,036
|
| Capital Share Transactions (Investor Class): |
|
|
| Shares sold |
20,369 |
82,203 |
| Shares issued to shareholders in reinvestment of
dividends |
82,476 |
52,082 |
| Shares redeemed |
(365,131 ) |
(320,808 ) |
See Notes to Financial Statements.
79
Value Line Small Cap Opportunities Fund, Inc.
Financial Highlights
Selected data for a share of capital stock outstanding throughout each
year:
| |
Value Line Small Cap Opportunities Fund, Inc. Investor Class | |||||
| |
Year Ended December 31, |
Period Ended December 31, |
Year Ended March 31, | |||
| |
2023 |
2022* |
2022 |
2021 |
2020 |
2019 |
| |
|
|
|
|
|
|
| Net asset value, beginning of year
|
$42.99
|
$48.36
|
$53.12
|
$34.69
|
$48.31
|
$51.99
|
| Income/(loss) from investment operations: |
|
|
|
|
| |
| Net
investment income/(loss) |
(0.14 )(1) |
(0.03 )(1) |
(0.28 )(1) |
(0.22 )(1) |
(0.12 )(1) |
(0.02 ) |
| Net gains/(losses) on securities (both realized and unrealized) |
9.59 |
(4.15 ) |
(1.21 ) |
22.68 |
(3.34 ) |
3.09 |
| Total
from investment operations |
9.45 |
(4.18 ) |
(1.49 ) |
22.46 |
(3.46 ) |
3.07 |
| Less distributions: |
|
|
|
|
|
|
| Distributions from net realized gains |
(0.43 ) |
(1.19 ) |
(3.27 ) |
(4.03 ) |
(10.16 ) |
(6.75 ) |
| Total distributions |
(0.43 ) |
(1.19 ) |
(3.27 ) |
(4.03 ) |
(10.16 ) |
(6.75 ) |
| Net asset value, end of year |
$52.01
|
$42.99
|
$48.36
|
$53.12
|
$34.69
|
$48.31
|
| Total return |
22.00 % |
(8.73
)%(2) |
(3.34 )% |
65.92 % |
(11.25 )% |
7.80 % |
| Ratios/Supplemental Data: |
|
|
|
|
|
|
| Net assets, end of year (in thousands) |
$321,658 |
$275,060 |
$328,455 |
$386,766 |
$297,244 |
$400,688 |
| Ratio of
expenses to average net assets |
1.18
% |
1.18 %(3) |
1.16
% |
1.18
% |
1.19
% |
1.21
% |
| Ratio of net investment income/(loss) to average net assets |
(0.30 )% |
(0.09 )%(3) |
(0.52 )% |
(0.48 )% |
(0.25 )% |
(0.24 )% |
| Portfolio
turnover rate |
11
% |
4 %(2) |
3
% |
4
% |
18
% |
20
% |
| |
Value Line Small Cap Opportunities Fund, Inc. Institutional Class | |||||
| |
Year Ended December 31, |
Period Ended December 31, |
Year Ended March 31, | |||
| |
2023 |
2022* |
2022 |
2021 |
2020 |
2019 |
| |
|
|
|
|
|
|
| Net asset value, beginning of year
|
$44.14
|
$49.52
|
$54.19
|
$35.25
|
$48.83
|
$52.34
|
| Income/(loss) from investment operations: |
|
|
|
|
| |
| Net
investment income/(loss) |
(0.01 )(1) |
0.05 (1) |
(0.14 )(1) |
(0.10 )(1) |
0.00 (1)(4) |
(0.02 ) |
| Net gains/(losses) on securities (both realized and unrealized) |
9.84 |
(4.24 ) |
(1.26 ) |
23.07 |
(3.42 ) |
3.26 |
| Total from investment operations |
9.83 |
(4.19 ) |
(1.40 ) |
22.97 |
(3.42 ) |
3.24 |
| Less distributions: |
|
|
|
|
|
|
| Distributions from net realized gains |
(0.43 ) |
(1.19 ) |
(3.27 ) |
(4.03 ) |
(10.16 ) |
(6.75 ) |
| Total distributions |
(0.43 ) |
(1.19 ) |
(3.27 ) |
(4.03 ) |
(10.16 ) |
(6.75 ) |
| Net asset value, end of year |
$53.54
|
$44.14
|
$49.52
|
$54.19
|
$35.25
|
$48.83
|
| Total return |
22.29 % |
(8.54
)%(2) |
(3.10 )% |
66.33 % |
(11.03 )% |
8.09 % |
| Ratios/Supplemental Data: |
|
|
|
|
|
|
| Net assets, end of year (in thousands) |
$212,291 |
$93,453 |
$126,593 |
$119,237 |
$42,287 |
$48,783 |
| Ratio of gross expenses to average net
assets |
0.98
% |
0.99 %(3) |
0.95
% |
0.96
% |
1.00
% |
1.02
% |
| Ratio of net expenses to average net assets |
0.93
% |
0.93 %(3) |
0.91
% |
0.93
% |
0.94
% |
0.96
% |
| Ratio of net investment income/(loss) to
average net assets |
(0.01 )% |
0.15 %(3) |
(0.25 )% |
(0.21 )% |
0.00 %(4) |
0.02
% |
| Portfolio turnover rate |
11
% |
4 %(2) |
3
% |
4
% |
18
% |
20
% |
| * |
For the nine month period ended December 31, 2022. |
| (1) |
Per share amounts are calculated based on average shares outstanding during the year. |
| (2) |
Not annualized. |
| (3) |
Annualized. |
| (4) |
Amount is less than $0.01 per share. |
See Notes to Financial Statements.
80
Value Line Mid Cap Focused Fund, Inc.
Financial Highlights
Selected data for a share of capital stock outstanding throughout each
year:
| |
Value Line Mid Cap Focused Fund, Inc. Investor Class | ||||
| |
Years Ended December 31, | ||||
| |
2023 |
2022 |
2021 |
2020 |
2019 |
| |
|
|
|
|
|
| Net asset value, beginning of year
|
$26.41
|
$31.24
|
$28.29
|
$25.49
|
$19.11
|
| Income/(loss) from investment operations: |
|
|
|
| |
| Net investment income/(loss)(1) |
0.04 |
0.03 |
0.10 (2) |
(0.12 ) |
0.06 (3) |
| Net gains/(losses) on securities (both realized and unrealized) |
5.80 |
(2.96
) |
5.42 |
5.13 |
6.68 |
| Total from investment operations |
5.84 |
(2.93 ) |
5.52 |
5.01 |
6.74 |
| Less distributions: |
|
|
|
|
|
| Dividends from net investment income |
(0.01 ) |
(0.03 ) |
— |
(0.02 ) |
(0.00 )(4) |
| Distributions from net realized gains |
—
|
(1.87
) |
(2.57
) |
(2.19
) |
(0.36 ) |
| Total distributions |
(0.01 ) |
(1.90 ) |
(2.57 ) |
(2.21 ) |
(0.36 ) |
| Net asset value, end of year |
$32.24 |
$26.41 |
$31.24 |
$28.29 |
$25.49
|
| Total return |
22.11 % |
(9.56 )% |
19.88 % |
19.96 % |
35.30 % |
| Ratios/Supplemental Data: |
|
|
|
|
|
| Net assets, end of year (in thousands) |
$424,471 |
$274,371 |
$318,184 |
$332,898 |
$373,341 |
| Ratio of expenses to average net assets |
1.08
% |
1.07
% |
1.07
% |
1.10
% |
1.11
% |
| Ratio of net investment income/(loss) to average
net assets |
0.12
% |
0.10
% |
0.33 %(2) |
(0.46 )% |
0.27 %(3) |
| Portfolio turnover rate |
1
% |
13
% |
0 %(5) |
4
% |
19
% |
| |
Value Line Mid Cap Focused Fund, Inc. Institutional Class | ||||
| |
Years Ended December 31, | ||||
| |
2023 |
2022 |
2021 |
2020 |
2019 |
| |
|
|
|
|
|
| Net asset value, beginning of year
|
$26.60
|
$31.46
|
$28.39
|
$25.59
|
$19.17
|
| Income/(loss) from investment operations: |
|
|
|
| |
| Net investment income/(loss)(1) |
0.12 |
0.10 |
0.19 (2) |
(0.04 ) |
0.20 (3) |
| Net gains/(losses) on securities (both realized and unrealized) |
5.83 |
(2.98
) |
5.45 |
5.14 |
6.64 |
| Total from investment operations |
5.95 |
(2.88 ) |
5.64 |
5.10 |
6.84 |
| Less distributions: |
|
|
|
|
|
| Dividends from net investment income |
(0.07 ) |
(0.11 ) |
— |
(0.11 ) |
(0.06 ) |
| Distributions from net realized gains |
—
|
(1.87
) |
(2.57
) |
(2.19
) |
(0.36 ) |
| Total distributions |
(0.07 ) |
(1.98 ) |
(2.57 ) |
(2.30 ) |
(0.42 ) |
| Net asset value, end of year |
$32.48 |
$26.60 |
$31.46 |
$28.39 |
$25.59
|
| Total return |
22.38 % |
(9.35 )% |
20.24 % |
20.24 % |
35.68 % |
| Ratios/Supplemental Data: |
|
|
|
|
|
| Net assets, end of year (in thousands) |
$837,394 |
$253,758 |
$177,272 |
$138,967 |
$41,459 |
| Ratio of gross expenses to average net assets |
0.87
% |
0.86
% |
0.86
% |
0.89
% |
1.04
% |
| Ratio of net expenses to average net assets |
0.87
% |
0.82
% |
0.82
% |
0.85
% |
0.86
% |
| Ratio of net investment income/(loss) to average net assets |
0.40
% |
0.35
% |
0.63 %(2) |
(0.15 )% |
0.81 %(3) |
| Portfolio turnover rate |
1
% |
13
% |
0 %(5) |
4
% |
19
% |
| (1) |
Per share amounts are calculated based on average shares outstanding during the year. |
| (2) |
Includes income resulting from special dividends. For the year ended December 31, 2021, without these dividends, the per share value for the
Investor Class and Institutional Class would have been $(0.18) and $(0.09),
respectively, and the ratio for the Investor Class and Institutional
Class would have been (0.59)% and (0.30)%, respectively. |
| (3) |
Includes income resulting from special dividends. For the year ended December 31, 2019, without these dividends, the per share value for the
Investor Class and Institutional Class would have been $(0.08) and $0.05, respectively,
and the ratio for the Investor Class and Institutional Class would have
been (0.33)% and 0.22%, respectively. |
| (4) |
Amount is less than $0.01 per share. |
| (5) |
Amount is less than 0.50%. |
See Notes to Financial Statements.
81
Value Line Select Growth Fund, Inc.
Financial Highlights
Selected data for a share of capital stock outstanding throughout each
year:
| |
Value Line Select Growth Fund, Inc. Investor Class | ||||
| |
Years Ended December 31, | ||||
| |
2023 |
2022 |
2021 |
2020 |
2019 |
| |
|
|
|
|
|
| Net asset value, beginning of year
|
$28.74
|
$40.46
|
$37.49
|
$38.93
|
$30.47
|
| Income/(loss) from investment operations: |
|
|
|
| |
| Net investment income/(loss)(1) |
0.01 |
(0.12 ) |
(0.25 ) |
(0.17 ) |
(0.05 ) |
| Net gains/(losses) on securities (both realized and unrealized) |
8.92 |
(8.11
) |
9.08 |
8.91 |
11.16 |
| Total from investment operations |
8.93 |
(8.23 ) |
8.83 |
8.74 |
11.11 |
| Less distributions: |
|
|
|
|
|
| Distributions from net realized gains |
(3.42 ) |
(3.49 ) |
(5.86 ) |
(10.18 ) |
(2.65 ) |
| Total distributions |
(3.42
) |
(3.49
) |
(5.86
) |
(10.18
) |
(2.65 ) |
| Net asset value, end of year |
$34.25
|
$28.74
|
$40.46
|
$37.49
|
$38.93
|
| Total return |
31.11
% |
(20.67
)% |
24.16
% |
23.12
% |
36.59 % |
| Ratios/Supplemental Data: |
|
|
|
|
|
| Net assets, end of year (in thousands) |
$397,990 |
$331,514 |
$486,661 |
$451,806 |
$486,392 |
| Ratio of expenses to average net assets |
1.16
% |
1.13
% |
1.13
% |
1.16
% |
1.16
% |
| Ratio of net investment income/(loss) to average net assets |
0.03
% |
(0.37 )% |
(0.62 )% |
(0.43 )% |
(0.12 )% |
| Portfolio turnover rate |
14
% |
6
% |
3
% |
12
% |
17
% |
| |
Value Line Select Growth Fund, Inc. Institutional Class | |||
| |
Year Ended
December 31, |
Period Ended December 31, | ||
| |
2023 |
2022 |
2021 |
2020(2) |
| |
|
|
|
|
| Net asset value, beginning of year
|
$29.01
|
$40.69
|
$37.58
|
$36.44
|
| Income/(loss) from investment operations: |
|
|
| |
| Net
investment
income/(loss)(1)
|
0.12 |
(0.04 ) |
(0.15 ) |
0.02 |
| Net gains/(losses) on securities (both realized and unrealized) |
8.98 |
(8.15 ) |
9.12 |
11.30 |
| Total from investment operations |
9.10 |
(8.19 ) |
8.97 |
11.32 |
| Less distributions: |
|
|
|
|
| Distributions from net realized gains |
(3.42 ) |
(3.49 ) |
(5.86 ) |
(10.18 ) |
| Total distributions |
(3.42 ) |
(3.49 ) |
(5.86 ) |
(10.18 ) |
| Net asset value, end of year |
$34.69
|
$29.01
|
$40.69
|
$37.58
|
| Total return |
31.41 % |
(20.45 )% |
24.47 % |
31.78
%(3) |
| Ratios/Supplemental Data: |
|
|
|
|
| Net assets, end of year (in thousands) |
$19,544 |
$10,801 |
$15,739 |
$11,963 |
| Ratio of gross expenses to average net assets |
1.10
% |
1.11
% |
1.04
% |
1.96 %(4) |
| Ratio of net expenses to average net assets |
0.91
% |
0.88
% |
0.88
% |
0.91 %(4) |
| Ratio of net investment income/(loss) to average
net assets |
0.36
% |
(0.12 )% |
(0.37 )% |
0.08 %(4) |
| Portfolio turnover rate |
14
% |
6
% |
3
% |
12 %(3) |
| (1) |
Per share amounts are calculated based on average shares outstanding during the year. |
| (2) |
Commenced operations on May 1, 2020. |
| (3) |
Not annualized. |
| (4) |
Annualized. |
See Notes to Financial Statements.
82
Value Line Larger Companies Focused Fund, Inc.
Financial Highlights
Selected data for a share of capital stock outstanding throughout each
year:
| |
Value Line Larger Companies Focused Fund, Inc. Investor Class | ||||
| |
Years Ended December 31, | ||||
| |
2023 |
2022 |
2021 |
2020 |
2019 |
| |
|
|
|
|
|
| Net asset value, beginning of year
|
$18.49
|
$34.36
|
$38.35
|
$28.87
|
$25.34
|
| Income/(loss) from investment operations: |
|
|
|
| |
| Net investment income/(loss)(1) |
(0.15 ) |
(0.08 ) |
(0.35 ) |
(0.29 ) |
(0.23 ) |
| Net gains/(losses) on securities (both realized and unrealized) |
11.07 |
(13.17
) |
1.29 |
13.42 |
6.64 |
| Total from investment operations |
10.92 |
(13.25 ) |
0.94 |
13.13 |
6.41 |
| Less distributions: |
|
|
|
|
|
| Distributions from net realized gains |
— |
(2.62 ) |
(4.93 ) |
(3.65 ) |
(2.88 ) |
| Total distributions |
—
|
(2.62
) |
(4.93
) |
(3.65
) |
(2.88 ) |
| Net asset value, end of year |
$29.41
|
$18.49
|
$34.36
|
$38.35
|
$28.87
|
| Total return |
59.06
% |
(38.99
)% |
2.89
% |
45.98
% |
25.67 % |
| Ratios/Supplemental Data: |
|
|
|
|
|
| Net assets, end of year (in thousands) |
$304,094 |
$200,602 |
$367,681 |
$394,389 |
$291,057 |
| Ratio of gross expenses to average net assets |
1.16
% |
1.14
% |
1.14
% |
1.15
% |
1.16
% |
| Ratio of net expenses to average net assets |
1.15
% |
1.14
% |
1.14
% |
1.15
% |
1.15
% |
| Ratio of net investment income/(loss) to average
net assets |
(0.61 )% |
(0.30 )% |
(0.87 )% |
(0.86 )% |
(0.78 )% |
| Portfolio turnover rate |
29
% |
58
% |
27
% |
54
% |
29
% |
| |
Value Line Larger Companies Focused Fund, Inc. Institutional Class | ||||
| |
Years Ended December 31, | ||||
| |
2023 |
2022 |
2021 |
2020 |
2019 |
| |
|
|
|
|
|
| Net asset value, beginning of year
|
$18.80
|
$34.79
|
$38.68
|
$29.03
|
$25.41
|
| Income/(loss) from investment operations: |
|
|
|
| |
| Net investment income/(loss)(1) |
(0.09 ) |
(0.02 ) |
(0.26 ) |
(0.21 ) |
(0.15 ) |
| Net gains/(losses) on securities (both realized and unrealized) |
11.28 |
(13.35
) |
1.30 |
13.51 |
6.65 |
| Total from investment operations |
11.19 |
(13.37 ) |
1.04 |
13.30 |
6.50 |
| Less distributions: |
|
|
|
|
|
| Distributions from net realized gains |
— |
(2.62 ) |
(4.93 ) |
(3.65 ) |
(2.88 ) |
| Total distributions |
—
|
(2.62
) |
(4.93
) |
(3.65
) |
(2.88 ) |
| Net asset value, end of year |
$29.99
|
$18.80
|
$34.79
|
$38.68
|
$29.03
|
| Total return |
59.52
% |
(38.85
)% |
3.12
% |
46.36
% |
25.92 % |
| Ratios/Supplemental Data: |
|
|
|
|
|
| Net assets, end of year (in thousands) |
$10,004 |
$4,080 |
$8,730 |
$6,519 |
$2,054 |
| Ratio of gross expenses to average net assets |
1.45
% |
1.25
% |
1.36
% |
1.80
% |
2.75
% |
| Ratio of net expenses to average net assets |
0.90
% |
0.89
% |
0.90
% |
0.90
% |
0.90
% |
| Ratio of net investment income/(loss) to average
net assets |
(0.38 )% |
(0.06 )% |
(0.63 )% |
(0.62 )% |
(0.50 )% |
| Portfolio turnover rate |
29
% |
58
% |
27
% |
54
% |
29
% |
| (1) |
Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
83
Value Line Asset Allocation Fund, Inc.
Financial Highlights
Selected data for a share of capital stock outstanding throughout each
year:
| |
Value Line Asset Allocation Fund, Inc. Investor Class | |||||
| |
Year Ended December 31, |
Period Ended December 31, |
Year Ended March 31, | |||
| |
2023 |
2022* |
2022 |
2021 |
2020 |
2019 |
| |
|
|
|
|
|
|
| Net asset value, beginning of year
|
$36.87
|
$42.79
|
$43.14
|
$34.72
|
$35.07
|
$31.95
|
| Income/(loss) from investment operations: |
|
|
|
|
| |
| Net
investment income/(loss) |
0.42 (1) |
0.13 (1) |
0.03 (1) |
0.00 (1)(2) |
0.20 (1) |
0.14 |
| Net gains/(losses) on securities (both realized and unrealized) |
7.46 |
(3.84 ) |
2.59 |
8.65 |
0.12 |
3.95 |
| Total
from investment operations |
7.88 |
(3.71 ) |
2.62 |
8.65 |
0.32 |
4.09 |
| Less distributions: |
|
|
|
|
|
|
| Dividends
from net investment income |
(0.44 ) |
(0.33 ) |
(0.01 ) |
(0.01 ) |
(0.16 ) |
(0.13 ) |
| Distributions from net realized gains |
(3.59 ) |
(1.88 ) |
(2.96 ) |
(0.22 ) |
(0.51 ) |
(0.84 ) |
| Total distributions |
(4.03 ) |
(2.21 ) |
(2.97 ) |
(0.23 ) |
(0.67 ) |
(0.97 ) |
| Net asset value, end of year |
$40.72
|
$36.87
|
$42.79
|
$43.14
|
$34.72
|
$35.07
|
| Total return |
21.39 % |
(8.81
)%(3) |
5.70 % |
24.93 % |
0.75 % |
13.17 % |
| Ratios/Supplemental Data: |
|
|
|
|
|
|
| Net
assets, end of year (in thousands) |
$387,504 |
$372,165 |
$499,220 |
$621,482 |
$600,102 |
$384,222 |
| Ratio of gross expenses to average net assets |
1.06
% |
1.04 %(4) |
1.02
% |
1.03
% |
1.08
% |
1.12
% |
| Ratio of
net investment income/(loss) to average net assets |
1.06
% |
0.45 %(4) |
0.07
% |
0.01
% |
0.54
% |
0.46
% |
| Portfolio turnover rate |
29
% |
37 %(3) |
14
% |
19
% |
16
% |
19
% |
| |
Value Line Asset Allocation Fund, Inc. Institutional Class | |||||
| |
Year Ended December 31, |
Period Ended December 31, |
Year Ended March 31, | |||
| |
2023 |
2022* |
2022 |
2021 |
2020 |
2019 |
| |
|
|
|
|
|
|
| Net asset value, beginning of year
|
$36.93
|
$42.89
|
$43.24
|
$34.82
|
$35.16
|
$32.03
|
| Income/(loss) from investment operations: |
|
|
|
|
| |
| Net
investment income/(loss) |
0.51 (1) |
0.20 (1) |
0.15 (1) |
0.11 (1) |
0.30 (1) |
0.19 |
| Net gains/(losses) on securities (both realized and unrealized) |
7.49 |
(3.85 ) |
2.61 |
8.68 |
0.11 |
4.00 |
| Total
from investment operations |
8.00 |
(3.65 ) |
2.76 |
8.79 |
0.41 |
4.19 |
| Less distributions: |
|
|
|
|
|
|
| Dividends
from net investment income |
(0.54 ) |
(0.43 ) |
(0.15 ) |
(0.15 ) |
(0.24 ) |
(0.22 ) |
| Distributions from net realized gains |
(3.59 ) |
(1.88 ) |
(2.96 ) |
(0.22 ) |
(0.51 ) |
(0.84 ) |
| Total distributions |
(4.13 ) |
(2.31 ) |
(3.11 ) |
(0.37 ) |
(0.75 ) |
(1.06 ) |
| Net asset value, end of year |
$40.80
|
$36.93
|
$42.89
|
$43.24
|
$34.82
|
$35.16
|
| Total return |
21.68 % |
(8.65
)%(3) |
5.98 % |
25.24 % |
0.99 % |
13.49 % |
| Ratios/Supplemental Data: |
|
|
|
|
|
|
| Net
assets, end of year (in thousands) |
$560,759 |
$575,324 |
$920,487 |
$1,165,569 |
$500,103 |
$160,075 |
| Ratio of gross expenses to average net assets |
0.82
% |
0.81 %(4) |
0.77
% |
0.78
% |
0.84
% |
0.88
% |
| Ratio of
net expenses to average net assets |
0.82
% |
0.80 %(4) |
0.77
% |
0.78
% |
0.83
% |
0.87
% |
| Ratio of net investment income/(loss) to average net assets |
1.28
% |
0.68 %(4) |
0.32
% |
0.26
% |
0.80
% |
0.74
% |
| Portfolio
turnover rate |
29
% |
37 %(3) |
14
% |
19
% |
16
% |
19
% |
| * |
For the nine month period ended December 31, 2022. |
| (1) |
Per share amounts are calculated based on average shares outstanding during the year. |
| (2) |
Amount is less than $0.01 per share. |
| (3) |
Not annualized. |
| (4) |
Annualized. |
See Notes to Financial Statements.
84
Value Line Capital Appreciation Fund, Inc.
Financial Highlights
Selected data for a share of capital stock outstanding throughout each
year:
| |
Value Line Capital Appreciation Fund, Inc. Investor Class | ||||
| |
Years Ended December 31, | ||||
| |
2023 |
2022 |
2021 |
2020 |
2019 |
| |
|
|
|
|
|
| Net asset value, beginning of year
|
$7.87
|
$12.39
|
$12.90
|
$10.25
|
$8.94
|
| Income/(loss) from investment operations: |
|
|
|
| |
| Net investment income/(loss)(1) |
0.08 |
0.04 |
(0.05 ) |
(0.03 ) |
(0.01 ) |
| Net gains/(losses) on securities (both realized and unrealized) |
2.63 |
(3.69
) |
0.88 |
3.39 |
2.32
(2) |
| Total from investment operations |
2.71 |
(3.65 ) |
0.83 |
3.36 |
2.31 |
| Less distributions: |
|
|
|
|
|
| Dividends from net investment income |
(0.08 ) |
(0.05 ) |
(0.00 )(3) |
— |
— |
| Distributions from net realized gains |
—
|
(0.82
) |
(1.34
) |
(0.71
) |
(1.00 ) |
| Total distributions |
(0.08 ) |
(0.87 ) |
(1.34 ) |
(0.71 ) |
(1.00 ) |
| Net asset value, end of year |
$10.50 |
$7.87 |
$12.39 |
$12.90 |
$10.25
|
| Total return |
34.44 % |
(29.83 )% |
6.79 % |
33.03 % |
26.14 % |
| Ratios/Supplemental Data: |
|
|
|
|
|
| Net assets, end of year (in thousands) |
$348,142 |
$277,895 |
$508,549 |
$560,243 |
$427,619 |
| Ratio of expenses to average net assets |
1.10
% |
1.07
% |
1.05
% |
1.07
% |
1.09
% |
| Ratio of net investment income/(loss) to average
net assets |
0.81
% |
0.39
% |
(0.35 )% |
(0.28 )% |
(0.08 )% |
| Portfolio turnover rate |
52
% |
56
% |
39
% |
51
% |
34
% |
| |
Value Line Capital Appreciation Fund, Inc. Institutional Class | ||||
| |
Years Ended December 31, | ||||
| |
2023 |
2022 |
2021 |
2020 |
2019 |
| |
|
|
|
|
|
| Net asset value, beginning of year
|
$7.86
|
$12.39
|
$12.90
|
$10.22
|
$8.89
|
| Income/(loss) from investment operations: |
|
|
|
| |
| Net investment income/(loss)(1) |
0.10 |
0.06 |
(0.01 ) |
(0.01 ) |
0.02 |
| Net gains/(losses) on securities (both realized and unrealized) |
2.64 |
(3.70
) |
0.88 |
3.40 |
2.31
(2) |
| Total from investment operations |
2.74 |
(3.64 ) |
0.87 |
3.39 |
2.33 |
| Less distributions: |
|
|
|
|
|
| Dividends from net investment income |
(0.10 ) |
(0.07 ) |
(0.04 ) |
— |
— |
| Distributions from net realized gains |
—
|
(0.82
) |
(1.34
) |
(0.71
) |
(1.00 ) |
| Total distributions |
(0.10 ) |
(0.89 ) |
(1.38 ) |
(0.71 ) |
(1.00 ) |
| Net asset value, end of year |
$10.50 |
$7.86 |
$12.39 |
$12.90 |
$10.22
|
| Total return |
34.91 % |
(29.74 )% |
7.13 % |
33.42 % |
26.51 % |
| Ratios/Supplemental Data: |
|
|
|
|
|
| Net assets, end of year (in thousands) |
$95,627 |
$80,814 |
$184,329 |
$121,927 |
$31,858 |
| Ratio of gross expenses to average net assets |
0.89
% |
0.86
% |
0.86 % |
0.89 % |
0.97
% |
| Ratio of net expenses to average net assets |
0.85
% |
0.82
% |
0.80
% |
0.82
% |
0.84
% |
| Ratio of net investment income/(loss) to average net assets |
1.06
% |
0.64
% |
(0.10 )% |
(0.06 )% |
0.17
% |
| Portfolio turnover rate |
52
% |
56
% |
39
% |
51
% |
34
% |
| (1) |
Per share amounts are calculated based on average shares outstanding during the year. |
| (2) |
Amount includes a non-recurring settlement paid by the Fund related to Legal Proceedings. The settlement payment impacted the realized
(loss) per share by less than $0.01 per share for Investor and Institutional class.
Total return was not impacted. |
| (3) |
Amount is less than $0.01 per share. |
See Notes to Financial Statements.
85
Value Line Core Bond Fund
Financial Highlights
Selected data for a share of capital stock outstanding throughout each
year:
| |
Value Line Core Bond Fund Investor Class | ||||
| |
Years Ended December 31, | ||||
| |
2023 |
2022 |
2021 |
2020 |
2019 |
| Net asset value, beginning of year
|
$12.98 |
$15.11 |
$15.84 |
$15.26 |
$14.40
|
| Income/(loss) from investment operations: |
|
|
|
|
|
| Net investment income/(loss) |
0.39
(1) |
0.22
(1) |
0.19
(1) |
0.25
(1) |
0.36 |
| Net
gains/(losses) on securities (both realized and unrealized) |
0.21 |
(2.11 ) |
0.53 |
0.63 |
0.86 |
| Total from investment operations |
0.60 |
(1.89
) |
0.34 |
0.88 |
1.22 |
| Less distributions: |
|
|
|
|
|
| Dividends from net investment income |
(0.39 ) |
(0.24 ) |
(0.23 ) |
(0.30 ) |
(0.36 ) |
| Distributions from net realized gains |
— |
— |
(0.16 ) |
— |
— |
| Total distributions |
(0.39
) |
(0.24
) |
(0.39
) |
(0.30
) |
(0.36 ) |
| Net asset value, end of year |
$13.19
|
$12.98
|
$15.11
|
$15.84
|
$15.26
|
| Total return |
4.72
% |
(12.58
)% |
(2.18
)% |
5.77
% |
8.51 % |
| Ratios/Supplemental Data: |
|
|
|
|
|
| Net assets, end of year (in thousands) |
$37,946 |
$40,746 |
$50,267 |
$53,854 |
$53,976 |
| Ratio of gross expenses to average net assets |
1.28
% |
1.20
% |
1.23
% |
1.19
% |
1.14
% |
| Ratio of net expenses to average net assets |
0.83 % |
0.90 % |
0.90 % |
0.90 % |
0.93
% |
| Ratio of net investment income/(loss) to average
net assets |
3.01
% |
1.62
% |
1.25
% |
1.62
% |
2.26
% |
| Portfolio turnover rate |
50 % |
37 % |
71 % |
70 % |
39
% |
| (1) |
Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
86
Notes to
Financial Statements
December 31, 2023
1. Significant Accounting Policies
Value Line Small Cap Opportunities Fund, Inc., Value Line Mid Cap Focused Fund, Inc., Value Line Select
Growth Fund, Inc., Value Line Larger Companies Focused Fund, Inc., Value Line Asset Allocation Fund, Inc., Value Line Capital Appreciation Fund, Inc. and Value Line Core Bond Fund (individually a “Fund” and collectively, the “Funds”) are each registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as diversified, open-end management investment companies. The Funds each (except for Value Line Core Bond Fund) offer two classes of shares: Investor Class shares and Institutional Class shares. Value Line Core Bond Fund offers only Investor Class shares. Investor Class shares are available to any investor who meets the Fund’s minimum purchase requirement. Institutional Class shares are designed for investors who meet certain administrative, service and account size criteria. The Value Line Family of Funds (the “Value Line Funds”) is a family of mutual funds that consists of a variety of equity, fixed income, and hybrid funds. The investment objective of each Fund is listed below.
| Fund |
Investment Goal |
| Value Line Small Cap Opportunities Fund, Inc. |
The Fund seeks long-term capital growth. |
| Value Line Mid Cap Focused Fund, Inc. |
The Fund seeks long-term capital growth. |
| Value Line Select Growth Fund, Inc. |
The Fund seeks long-term capital growth. |
| Value Line Larger Companies Focused Fund, Inc. |
The Fund seeks long-term capital growth. |
| Value Line Asset Allocation Fund, Inc. |
The Fund seeks high total investment return. |
| Value Line Capital Appreciation Fund, Inc. |
The Fund seeks capital appreciation and income. |
| Value Line Core Bond Fund |
The Fund seeks to maximize current income and secondarily capital appreciation. |
Each Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 Financial Services — Investment Companies.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results may differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements.
(A) Security Valuation: In accordance with Rule 2a-5 under the 1940 Act, the Board of Directors (the "Board") has designated
EULAV Asset Management (the "Adviser") as its valuation designee (the "Valuation Designee"). As Valuation Designee, the Adviser, subject to the oversight of the Board, is responsible for making fair valuation determinations in accordance with procedures (the "Pricing Procedures") approved by the Board. The Adviser's day-to-day responsibilities as Valuation Designee are performed by a pricing committee established by the Adviser (the "Committee").
Securities listed on a securities exchange are valued at the closing sales prices on the date as of
which the net asset value (“NAV”) is being determined. Securities traded on the National Association of Securities Dealers Automated Quotations (“NASDAQ”)
Stock Market are valued at the NASDAQ Official Closing Price. In the absence of closing sales prices for such securities and for securities traded in the over-the-counter market, the security is valued at the midpoint between the latest available and representative asked and bid prices. Short-term instruments with maturities of 60 days or less at the date of purchase are valued at amortized cost, which approximates fair value. Short-term instruments with maturities greater than 60 days at the date of purchase are valued at the
midpoint between the latest available and representative asked and bid prices, and commencing 60 days prior to maturity such securities are valued at amortized cost.
Investments in shares of open-end mutual funds, including money market funds, are valued at their daily
NAV which is calculated as of the close of regular trading on the New York Stock Exchange (“NYSE”) (usually 4:00 P.M. Eastern Time) on each day on which the NYSE is open for business. NAV per share is determined by dividing the funds' total net assets by the funds' total number of shares outstanding at the time of calculation.
Bonds and other fixed income securities are calculated on the valuation date by reference to valuations
obtained from an independent pricing service that determines valuations for normal institutional-size trading units of debt securities, without exclusive reliance upon quoted prices. This service takes into account appropriate factors such as institutional-size trading in similar groups of
securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data in determining valuations. Bonds and fixed income securities are valued at the evaluated bid on the date as of which the NAV is being determined.
The Committee monitors the continued appropriateness of methods applied and determines if adjustments
should be made in light of market changes, events affecting the issuer, or other factors. If the Committee determines that a valuation method may no longer be appropriate, another valuation method may be selected. The Board shall review the appropriateness of the valuation methods and these methods may be amended or supplemented from time to time by the Committee. In addition, the Funds may use the fair value
of a security when the closing market price on the primary exchange where the security is traded no longer reflects the value of a security due to factors affecting one or more relevant securities markets or the specific issuer.
87
Notes to
Financial Statements (continued)
(B) Fair
Value Measurements: The Funds follow fair valuation accounting standards which establish a
definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion of changes in valuation techniques and related inputs
during the period. These inputs are summarized in the three broad levels listed below:
•
Level 1 — Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date;
•
Level 2 — Inputs other than quoted prices that are observable for the asset or
liability either directly or indirectly, including inputs in markets that are not considered to be active;
•
Level 3 — Inputs that are unobservable.
Transfers between investment levels may occur as
the markets fluctuate and/or the availability of data used in an investment’s valuation changes. The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
An investment asset's or liability's level within the fair value hierarchy is based on the lowest level input, individually or in aggregate, that is significant to fair value measurement. The objective of fair value measurement remains the same even when there is a
significant decrease in the volume and level of activity for an asset or liability and regardless of the valuation techniques used.
(C) Federal Income Taxes: It is the policy of each Fund to continue to qualify as a regulated investment company by complying with the provisions
available to regulated investment companies, as defined in applicable sections of the Internal Revenue Code, and to distribute all of its investment income and capital gains to its
shareholders. Therefore, no provision for federal income tax is required.
As of December 31, 2023, and for all open tax years, management has analyzed the Funds’ tax positions taken on federal and state income tax returns, and has concluded that no provision for federal or state income tax is required in the Funds' financial statements. The Funds' federal and state income tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and the state departments of revenue. The Funds are not aware of any tax
positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
(D) Security Transactions and Income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are
calculated using the identified cost method. Interest income on investments, adjusted for amortization of discount and premium, if applicable, is earned from settlement date and
recognized on the accrual basis. Dividend income is recorded on the ex-dividend date.
The Value Line Asset Allocation Fund, Inc., Value Line Capital Appreciation Fund, Inc. and Value Line Core Bond Fund may purchase mortgage pass-through securities on a to-be-announced (“TBA”) basis, with payment and delivery scheduled for a future date. These Funds may enter into a TBA agreement, sell the obligation to purchase the pools stipulated in the TBA agreement prior to the
stipulated settlement date and enter into a new TBA agreement for future delivery of pools of mortgage pass-through securities (a “TBA roll”). A TBA roll is treated by the Fund as a purchase transaction and a sale transaction in which the Fund realizes a gain or loss. The Fund’s use of TBA rolls may cause the Fund to experience higher portfolio turnover and higher transaction costs. The Fund could be exposed to possible risk if there is an adverse market reaction, expenses or delays in connection with TBA transactions, or if the counterparty fails to complete the transaction.
The Value Line Core Bond Fund may invest in Treasury Inflation-Protected Securities (“TIPS”). The principal value and interest payout of TIPS are periodically adjusted according to the rate of inflation based on the Consumer Price Index. The adjustments for principal and income due to inflation are reflected in interest income in the Fund's Statement of Operations.
(E) Fund Distributions: Income dividends and capital gains distributions are automatically reinvested in additional shares of
each Fund unless the shareholder has requested otherwise. Income earned by the Fund on weekends, holidays and other days on which the Fund is closed for business is declared as a dividend on the next day on which the Fund is open for business. The Funds (except for Value Line Core Bond Fund) distribute all of their net investment income annually. Value Line Core Bond Fund declares and pays dividends from its net investment income monthly. Net realized capital gains, if any, are distributed to shareholders
annually or more frequently if necessary, to comply with the Internal Revenue Code.
88
December
31, 2023
(F) Class
Allocations: All income earned and expenses incurred by the Funds are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest in the Fund represented by the shares of such class, except for class specific expenses which are allocated to the respective class. Expenses of the Fund are charged proportionately to each Fund or based on
other appropriate methods. Realized and unrealized gains and losses are allocated between the share classes based on respective net assets.
Class Specific Expenses:
| |
Investor Class |
Institutional Class |
Total |
| Value Line Small Cap Opportunities Fund, Inc. |
|
|
|
| Transfer agent fees |
$38,159 |
$26,515 |
$64,674 |
| Sub-transfer agent fees |
173,086 |
126,868 |
299,954 |
| Registration and filing fees |
28,258 |
37,689 |
65,947 |
| Other |
27,928 |
13,306 |
41,234 |
| |
Investor Class |
Institutional Class |
Total |
| Value Line Mid Cap Focused Fund, Inc. |
|
|
|
| Transfer agent fees |
$99,779 |
$155,595 |
$255,374 |
| Sub-transfer agent fees |
139,020 |
377,389 |
516,409 |
| Registration and filing fees |
74,724 |
131,098 |
205,822 |
| Other |
20,103 |
29,642 |
49,745 |
| |
Investor Class |
Institutional Class |
Total |
| Value Line Select Growth Fund, Inc. |
|
|
|
| Transfer agent fees |
$114,431 |
$— |
$114,431 |
| Sub-transfer agent fees |
82,295 |
7,941 |
90,236 |
| Registration and filing fees |
32,624 |
28,774 |
61,398 |
| Other |
37,008 |
2,270 |
39,278 |
| |
Investor Class |
Institutional Class |
Total |
| Value Line Larger Companies Focused Fund, Inc. |
|
|
|
| Transfer agent fees |
$99,967 |
$2,827 |
$102,794 |
| Sub-transfer agent fees |
27,527 |
5,015 |
32,542 |
| Registration and filing fees |
32,478 |
28,272 |
60,750 |
| Other |
35,513 |
1,642 |
37,155 |
| |
Investor Class |
Institutional Class |
Total |
| Value Line Asset Allocation Fund, Inc. |
|
|
|
| Transfer agent fees |
$70,805 |
$136,564 |
$207,369 |
| Sub-transfer agent fees |
198,120 |
335,495 |
533,615 |
| Registration and filing fees |
29,566 |
41,543 |
71,109 |
| Other |
22,344 |
33,094 |
55,438 |
| |
Investor Class |
Institutional Class |
Total |
| Value Line Capital Appreciation Fund, Inc. |
|
|
|
| Transfer agent fees |
$109,390 |
$35,627 |
$145,017 |
| Sub-transfer agent fees |
120,042 |
50,070 |
170,112 |
| Registration and filing fees |
31,394 |
34,131 |
65,525 |
| Other |
32,270 |
10,047 |
42,317 |
89
Notes to
Financial Statements (continued)
(G) Foreign
Currency Translation: The books and records of the Funds are maintained in U.S. dollars.
Assets and liabilities which are denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange at the valuation date. The Funds do not isolate changes in the value of investments caused by foreign exchange rate differences from the changes due to
other circumstances.
Income and expenses
are translated to U.S. dollars based upon the rates of exchange on the respective dates of such transactions.
Net realized foreign exchange gains or losses arise from currency fluctuations realized between the trade and settlement dates on securities transactions, the differences between the U.S. dollar amounts of dividends, interest, and foreign withholding taxes
recorded by the Funds, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, other than investments, at the end of the fiscal period, resulting from changes in the exchange rates. The effect of the change in foreign exchange rates on the value of investments is included in realized gain/(loss) on investments and change in net unrealized appreciation/(depreciation) on investments.
(H) Representations and Indemnifications: In the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties
which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds
that have not yet occurred. However, based on experience, management expects the risk of loss to be remote.
(I) Accounting for Real Estate Investment Trusts: The Funds may own shares of Real Estate Investment Trusts (“REITs”) which report information on the source of
their distributions annually. Distributions received from REITs during the year which represent a return of capital are recorded as a reduction of cost and distributions which
represent a capital gain dividend are recorded as a realized long-term capital gain on investments.
(J) Foreign Taxes: The Funds may be subject to foreign taxes on income, gains on investments, or currency repatriation, a
portion of which may be recoverable. The Funds will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
(K) Securities Lending: Under an agreement with State Street Bank & Trust Company (“State Street”), the Funds
can lend their securities to brokers, dealers and other financial institutions approved by the Board. The Funds or the borrower may terminate the loan at any time. By lending their investment securities, the Funds attempt to increase their net investment income through receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest or dividends declared during the term of the loan would accrue to the account of the Funds. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Generally, in the event of a counter-party default, the Funds have the right to use the collateral to offset the losses incurred. The lending fees received and the Funds’ portion of the interest income earned on the cash collateral are included in “Securities lending income (Net)” in the Statements of Operations.
Upon entering into a
securities lending transaction, the Funds receive cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned
securities. Any cash received as collateral is invested by State Street, acting in its capacity as securities lending agent (the “Agent”), in the Value Line Funds
collateral account, which is subsequently invested into joint repurchase agreements and/or State Street Navigator Securities Lending Government Money Market Portfolio. When the Funds invest the cash collateral in the State Street Navigator Securities Lending Government Money Market Portfolio, a
portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Funds. Investments made with the cash collateral are disclosed in the Schedules of Investments.
As of December 31, 2023, certain Funds loaned securities which were collateralized by cash and other securities. The value of the securities on loan and the value of the related collateral were as follows:
| Fund |
Value of Securities Loaned |
Value of
Collateral* |
| Value Line Small Cap Opportunities Fund, Inc. |
$— |
$52,700 |
| Value
Line Mid Cap Focused Fund, Inc. |
10,919,581 |
11,233,743 |
| Value Line Larger Companies Focused Fund, Inc. |
9,527,742 |
9,873,150 |
| Value
Line Asset Allocation Fund, Inc. |
6,749,681 |
6,887,213 |
90
December
31, 2023
| Fund |
Value of Securities Loaned |
Value of
Collateral* |
| Value Line Capital Appreciation Fund, Inc. |
$20,708,639 |
$21,748,547 |
| Value
Line Core Bond Fund |
1,168,634 |
1,193,095 |
| * |
Value Line Larger Companies Focused Fund, Inc., Value Line Asset Allocation Fund, Inc., Value Line Capital Appreciation Fund,
Inc. and Value Line Core Bond Fund received cash collateral of $535,925,
$3,823,003, $11,680,188 and $372,250 respectively, which was
subsequently invested in the State Street Navigator Securities Lending Government Money Market Portfolio as reported in the Schedule of Investments. In addition, Value Line Small Cap Opportunities Fund, Inc. received non cash-collateral
of $52,700 in the form of U.S. Government obligations, for 0.01%, maturing
8/7/50, Value Line Mid Cap Focused Fund, Inc. received non
cash-collateral of $11,233,743 in the form of U.S. Government obligations, ranging from 0.01% — 4.75%, maturing 7/15/24 — 11/15/52, Value Line Larger Companies Focused Fund, Inc. received non cash-collateral of $9,337,225 in the form
of U.S. Government obligations, ranging from 0.01% — 4.75%, maturing
7/15/24 — 8/15/53, Value Line Asset Allocation Fund, Inc.
received non cash-collateral of $3,064,210 in the form of U.S. Government obligations, ranging from 0.01% — 4.25%, maturing 1/15/25 — 8/7/50, Value Line Capital Appreciation Fund, Inc. received non cash-collateral of $10,068,359 in the form
of U.S. Government obligations, ranging from 0.01% — 6.00%, maturing
1/25/24 — 8/15/53 and Value Line Core Bond Fund received
non cash-collateral of $820,845 in the form of U.S. Government obligations, ranging from 0.01% — 4.25%, maturing 1/15/25 — 8/7/50. The Funds cannot sell or repledge the non-cash collateral which accordingly is not reflected in the Schedule
of Investments. The value of securities loaned is determined at the close of
business of the Funds and any additional required collateral is delivered
to the Funds on the next business day. |
(L) Other Risks: The
value of the Funds’ shares will go up and down, sometimes rapidly or unpredictably, based on the performance of the securities owned by the Funds and other factors generally
affecting the securities market. Market risks, including political, regulatory, economic and social developments, can affect the value of the Funds’ investments. Natural
disasters, public health emergencies, war, terrorism and other unforeseeable events may lead to increased market volatility and may have adverse long-term effects on world economies and markets generally.
(M) Subsequent Events: Management has evaluated all subsequent transactions and events through the date on which these
financial statements were issued and has determined that no additional items require adjustment to or disclosure in the financial statements.
2. Investment Risks
Securities issued by U.S. Government agencies or government-sponsored enterprises may not be guaranteed by the U.S. Treasury. The Government National Mortgage Association (“GNMA” or “Ginnie Mae”), a wholly-owned U.S. Government corporation, is authorized to guarantee, with the full faith and credit of the U.S. Government, the timely payment of principal and interest on
securities issued by institutions approved by GNMA and backed by pools of mortgages insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. Government-related guarantors (i.e., not backed by the full faith and credit of the U.S. Government) include the Federal National Mortgage Association (“FNMA” or “Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“FHLMC” or “Freddie Mac”). Pass-through securities issued by FNMA are guaranteed as to timely payment of principal and interest by FNMA, but are not backed by the full faith and credit of the U.S. Government. FHLMC guarantees the timely payment of interest and ultimate collection of principal, but its participation certificates are not backed by the full faith and credit of the U.S. Government.
3. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, for the year ended December 31, 2023, were as
follows:
| Fund |
Purchases of Investment Securities Excluding U.S. Government Securities |
Sales of Investment Securities Excluding U.S. Government Securities |
Purchases of U.S. Government Obligations |
Sales of U.S. Government
Obligations |
| Value Line Small Cap Opportunities Fund, Inc. |
$102,545,976 |
$46,940,500 |
$— |
$— |
| Value
Line Mid Cap Focused Fund, Inc. |
516,598,060 |
8,475,149 |
— |
— |
| Value Line Select Growth Fund, Inc. |
52,397,753 |
88,320,678 |
— |
— |
| Value
Line Larger Companies Focused Fund, Inc. |
75,704,171 |
85,850,869 |
— |
— |
| Value Line Asset Allocation Fund, Inc. |
114,177,577 |
321,246,786 |
261,318,543 |
228,608,781 |
91
Notes to
Financial Statements (continued)
| Fund |
Purchases of Investment Securities Excluding U.S. Government Securities |
Sales of Investment Securities Excluding U.S. Government Securities |
Purchases of U.S. Government Obligations |
Sales of U.S.
Government Obligations |
| Value Line Capital Appreciation Fund, Inc. |
$99,726,271 |
$197,077,524 |
$110,576,198 |
$51,072,702 |
| Value
Line Core Bond Fund |
7,112,400 |
9,180,831 |
32,904,308 |
32,500,993 |
4. Income Taxes
At December 31,
2023, the federal tax cost and net unrealized appreciation (depreciation) in value of investments held were:
| Fund |
Cost of Investments for Tax Purposes |
Gross Tax Unrealized Appreciation |
Gross Tax Unrealized Depreciation |
Net Tax
Unrealized Appreciation/ (Depreciation) on Investments |
| Value Line Small Cap Opportunities Fund, Inc. |
$288,787,489 |
$248,200,880 |
$(4,294,370
) |
$243,906,510 |
| Value
Line Mid Cap Focused Fund, Inc. |
928,710,401 |
335,891,502 |
(9,751,738 ) |
326,139,764 |
| Value Line Select Growth Fund, Inc. |
198,924,565 |
218,726,373 |
(218,533 ) |
218,507,840 |
| Value
Line Larger Companies Focused Fund, Inc. |
207,797,862 |
133,850,717 |
(24,111,514 ) |
109,739,203 |
| Value Line Asset Allocation Fund, Inc. |
679,344,657 |
284,754,526 |
(16,792,354 ) |
267,962,172 |
| Value
Line Capital Appreciation Fund, Inc. |
356,410,583 |
128,514,103 |
(30,526,305 ) |
97,987,798 |
| Value Line Core Bond Fund |
40,510,265 |
277,623 |
(2,696,121 ) |
(2,418,498 ) |
Net unrealized appreciation/depreciation differs for financial statements and tax purposes primarily due to wash sales, return of capital distribution received, and market premium amortization.
As of December 31, 2023, the components of distributable earnings on a tax basis were as follows:
| Fund |
Undistributed Ordinary Income |
Undistributed Long-Term Gain |
Other Timing Differences |
Unrealized Appreciation (Depreciation) |
Capital Loss Carryforwards |
Late Year Deferrals |
Distributable Earnings (Loss) |
| Value Line Small Cap Opportunities
Fund, Inc. |
$— |
$— |
$— |
$243,906,510
|
$— |
$(5,984,926
) |
$237,921,584
|
| Value Line Mid Cap Focused Fund, Inc. |
748,102 |
327,720 |
— |
326,139,764 |
— |
— |
327,215,586 |
| Value Line Select Growth Fund, Inc. |
172,283 |
13,617,136 |
— |
218,507,840 |
— |
— |
232,297,259 |
| Value Line Larger Companies Focused Fund, Inc. |
— |
— |
— |
109,739,203 |
(2,782,700 ) |
— |
106,956,503 |
| Value Line Asset Allocation Fund, Inc. |
888,825 |
25,773,867 |
— |
267,962,172 |
— |
— |
294,624,864 |
| Value Line Capital Appreciation Fund, Inc. |
105,608 |
— |
— |
97,987,798 |
(24,073,115 ) |
— |
74,020,291 |
| Value Line Core Bond Fund |
95,728 |
— |
— |
(2,418,498 ) |
(3,348,158 ) |
— |
(5,670,928 ) |
92
December
31, 2023
At December 31, 2023, the
Value Line Larger Companies Focused Fund, Inc, has net short-term capital loss carryforwards of $2,782,700, the Value Line Capital Appreciation Fund has net short-term capital loss
carryforwards of $5,209,518 and net long-term capital loss carryforwards of $18,863,597, and the Value Line Core Bond Fund has net short-term capital loss carryforwards of $345,529 and net long-term capital loss carryforwards of $3,002,629. All of these can be carried forward indefinitely.
In accordance with federal tax laws applicable to investment companies, all or a portion of losses
resulting from capital loss or net specified losses realized between November 1 and the Funds' fiscal year-end are not recognized for tax purposes until the subsequent year (late-year loss deferrals); however, such losses are recognized for financial reporting purposes in the year realized. As of December 31, 2023, the Value Line Small Cap Opportunities Fund had a short-term and long-term late year loss deferral of $231,001 and $5,753,925, respectively.
A
reclassification has been made on the Statements of Assets and Liabilities to increase/(decrease) total distributable earnings/(loss) and additional paid-in capital for the Funds as
follows:
| |
Total Distributable Earnings/(Loss) |
| |
| Fund |
Undistributed Net Investment Income/(Loss) |
Accumulated Net Realized Gains/(Losses) |
Additional
Paid-In Capital |
| Value
Line Small Cap Opportunities Fund, Inc. |
$899,831 |
$41 |
$(899,872
) |
| Value Line Mid Cap Focused Fund, Inc. |
(8,717 ) |
8,717 |
— |
| Value
Line Select Growth Fund, Inc. |
(9
) |
9 |
— |
| Value Line Larger Companies Focused Fund, Inc. |
1,347,075 |
264,810 |
(1,611,885 ) |
| Value
Line Asset Allocation Fund, Inc. |
396,042 |
(396,042 ) |
— |
| Value Line Capital Appreciation Fund, Inc. |
18,663 |
(18,663 ) |
— |
| Value
Line Core Bond Fund |
45,832 |
(45,832 ) |
— |
These reclassifications were primarily due to net operating losses and return of capital distributions.
Net assets were not affected by these reclassifications.
The tax composition of distributions paid to shareholders during fiscal years ended December 31, 2023 and December 31, 2022 were as follows:
| |
Year Ended December 31, 2023 Distributions Paid from | |||
| Fund |
Ordinary Income |
Long-Term Capital Gain |
Return of Capital |
Total
Distributions Paid |
| Value
Line Small Cap Opportunities Fund, Inc. |
$— |
$4,203,633 |
$41 |
$4,203,674 |
| Value Line Mid Cap Focused Fund, Inc. |
1,929,904 |
— |
— |
1,929,904 |
| Value
Line Select Growth Fund, Inc. |
— |
38,347,362 |
— |
38,347,362 |
| Value Line Larger Companies Focused Fund, Inc. |
— |
— |
— |
— |
| Value
Line Asset Allocation Fund, Inc. |
10,582,983 |
76,783,722 |
— |
87,366,705 |
| Value Line Capital Appreciation Fund, Inc. |
3,516,980 |
— |
— |
3,516,980 |
| Value
Line Core Bond Fund |
1,164,055 |
— |
— |
1,164,055 |
| |
Year Ended December 31, 2022 Distributions Paid from |
| ||
| Fund |
Ordinary Income |
Long-Term Capital Gain |
|
Total
Distributions Paid |
| Value
Line Small Cap Opportunities Fund, Inc.*,
** |
$— |
$9,921,610 |
|
$9,921,610 |
| Value Line Mid Cap Focused Fund, Inc. |
1,256,185 |
33,604,238 |
|
34,860,423 |
| Value
Line Select Growth Fund, Inc. |
— |
38,066,212 |
|
38,066,212 |
| Value Line Larger Companies Focused Fund, Inc. |
— |
26,081,985 |
|
26,081,985 |
| Value
Line Asset Allocation Fund, Inc.*, ** |
9,741,884 |
48,104,049 |
|
57,845,933 |
93
Notes to
Financial Statements (continued)
| |
Year Ended December 31, 2022 Distributions Paid from |
| ||
| Fund |
Ordinary Income |
Long-Term Capital Gain |
|
Total
Distributions Paid |
| Value
Line Capital Appreciation Fund, Inc. |
$2,285,325 |
$35,176,551 |
|
$37,461,876 |
| Value Line Core Bond Fund |
762,097 |
— |
|
762,097 |
| * |
For the period 4/1/22-12/31/22. |
| ** |
For the year ended March 31, 2022, Value Line Small Cap Opportunities Fund, Inc. had distributions paid from ordinary income
and long-term capital gain of $0 and $29,540,485, respectively, and Value Line Asset Allocation
Fund, Inc. had distributions paid from ordinary income and long-term capital gain of
$5,820,859 and $109,351,515, respectively. |
5. Investment Advisory Fees, Service and
Distribution Fees and Transactions With Affiliates
For providing advisory services to the Value Line Small Cap Opportunities Fund, Inc., Value Line Mid Cap Focused Fund, Inc., Value Line Select Growth Fund, Inc., Value Line Larger Companies Focused Fund, Inc., Value Line Asset Allocation Fund, Inc., Value Line Capital Appreciation Fund, Inc. and Value Line Core Bond Fund, and managing each Fund’s investments for the year ended
December 31, 2023, the Adviser was paid a fee at an annual rate of 0.74%, 0.65%, 0.73%, 0.72%, 0.64%, 0.64% and 0.31%, respectively, of each Fund’s average daily net assets. The investment advisory agreement between each Fund and the Adviser
provides for a combined fee for both advisory services and Administrative Services (as defined in the investment advisory agreement) at an annual rate, based on each Fund’s average daily net assets, equal to 0.75% for Value Line Select Growth Fund, Inc., Value Line Larger Companies Focused Fund, Inc. and Value Line Small Cap Opportunities Fund and 0.70% on the first $100 million
of average daily net assets, and 0.65% on the remaining net assets for Value Line Mid Cap Focused Fund, Inc. and Value Line Capital Appreciation Fund, Inc. and 0.65% on the first $750 million of average daily net assets, and 0.60% on the net assets over $750
million for Value Line Asset Allocation Fund, Inc. and 0.50% for Value Line Core Bond Fund (the “Combined Rate”). The advisory fee component paid by each Fund to the
Adviser for each period is calculated by subtracting the amount paid by each Fund for Administrative Services with respect to the same period from the respective Combined Rate. The
Adviser provides (or arranges for the provision of) such Administrative Services pursuant to a separate administration agreement with the Funds.
For the Value Line Larger Companies Focused Fund, the Adviser has contractually agreed to waive through
May 1, 2024 certain Fund-wide fees and further assume certain Fund-wide expenses to the extent necessary to limit such expenses (excluding brokerage commissions, interest, taxes, and certain non-routine Fund-wide expenses) to 0.90% of the average daily net assets of each class
(the “Fund-Level Expense Limitation 1”).
Effective May 1, 2023, for the Value Line Core Bond Fund, the Adviser and the Distributor have agreed to waive a portion of their advisory and Rule 12b-1 fee 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 0.80% of the Fund’s average daily net assets (the “Fund-Level Expense Limitation 2”). Prior to May 1, 2023 the Fund-Level Expense Limitation 2 was 0.90%. The Adviser and the Distributor may subsequently recover from the Value Line Core Bond Fund reimbursed expenses and/or waived fees
(within 3 years from the month in which the waiver/reimbursement occurred) to the extent that the Fund’s expense ratio is less than the Expense Limitation. The Fund-Level Expense Limitation 2 can be terminated or modified before May 1, 2024 only with the
agreement of the Fund’s Board.
For Value Line Asset Allocation Fund, Inc., the Adviser contractually agreed to waive and not recoup a portion of its annual advisory fee rate by 0.05% with respect to the portion of the Fund’s average daily net assets that exceed $750 million. This contractual waiver creates a breakpoint in the advisory fee.
The Funds have a Service and Distribution Plan (the “Plan”), adopted pursuant to Rule 12b-1 under the 1940 Act, which compensates EULAV Securities, LLC (the “Distributor”) for advertising, marketing and distributing the Funds’ shares and for servicing the Funds’ shareholders at an annual rate of 0.25% of the Funds’ average daily net assets attributable to Investor Class shares. Institutional Class shares do not pay Rule 12b-1 distribution and service fees, and are not subject to the Plan.
The Funds (except Value Line Core Bond Fund) have a Sub-Transfer Agent Plan (the “sub TA plan”) which compensates financial intermediaries that provide sub-transfer agency and related services to investors that hold their Fund shares of such class in omnibus accounts maintained by the financial intermediaries with the Funds. The sub-transfer agency fee, which the Fund may pay directly
to the financial intermediary or indirectly via the Distributor, will not exceed (unless approved by the Board) the lower of: (i) the aggregate amount of additional transfer agency fees and expenses that the Funds would otherwise pay to the transfer agent if each subaccount in the omnibus account for such class of shares maintained by the financial intermediary with the Funds were a direct
94
December
31, 2023
account with the Funds and
(ii) the amount by which the fees charged by the financial intermediary for including the Funds on its platform and providing shareholder, sub-transfer agency and related services
exceed the amount paid under the Funds’ Plan with respect to each Fund’s assets attributable to shares held by the financial intermediary in the omnibus account. If the
sub-transfer agency fee is paid to financial intermediaries indirectly via the Distributor, the Distributor does not retain any amount thereof and such fee otherwise reduces the amount that the Distributor is contractually obligated to pay to the financial intermediary.
The Adviser agreed to pay or reimburse certain class-specific expenses of the Value Line Small Cap
Opportunities Fund, Inc., Value Line Select Growth Fund, Inc., Value Line Larger Companies Focused Fund, Inc., and Value Line Capital Appreciation Fund, Inc. attributable to the Institutional Class, so that the Institutional Class bears its class-specific fees and expenses at the same annual percentage of its average daily net assets as the Investor Class’s class-specific fees and expenses (excluding the 12b-1 fees paid by the Investor Class and certain non-routine class-specific expenses, if applicable) (the “Class Expense Limitation”, together with the Fund-level Expense Limitations (attributable to the Value Line Larger Companies Focused Fund and Value Line Core Bond Fund), the
“Expense Limitations”). The Adviser may subsequently recover from the Fund contractually reimbursed expenses and/or waived fees (within 3 years from the month in which the waiver/reimbursement occurred) to the extent that such class’ expense ratio is less than the applicable Expense Limitation or, if lower, the expense limitation in effect when the waiver or reimbursement occurred. The
Class Expense Limitation can be terminated or modified only with the agreement of the Board of Directors. With the approval of the Value Line Mid Cap Focused Fund's Board, this Class Expense Limitation was terminated effective May 1, 2023 and amounts
previously reimbursed and/or waived by the Adviser and eligible for recovery by the Adviser were forfeited.
As of December 31, 2023, fees contractually waived/reimbursed by the Adviser amounted to $76,077, $18,602,
$28,799, $70,055, $41,652 and $78,228 for the Value Line Small Cap Opportunities Fund, Inc., Value Line Mid Cap Focused Fund, Inc., Value Line Select Growth Fund, Inc., Value Line Larger Companies Focused Fund, Inc., Value Line Capital Appreciation Fund, Inc. and Value Line Core Bond Fund, respectively. As of December 31, 2023, the Adviser and Distributor may seek reimbursement of the remaining waived fees and reimbursed expenses as follows:
| Fund |
Expiration for the 12 months ended |
Fees Waived and Reimbursed by the Adviser |
Fees Waived and Reimbursed by the Distributor |
| Value Line Small Cap Opportunities Fund, Inc. |
December 31, 2024 |
$50,033 |
$— |
| Value
Line Small Cap Opportunities Fund, Inc. |
December 31, 2025 |
57,978 |
— |
| Value Line Small Cap Opportunities Fund, Inc. |
December 31, 2026 |
75,767 |
— |
| Value
Line Select Growth Fund, Inc. |
December 31, 2024 |
22,388 |
— |
| Value Line Select Growth Fund, Inc. |
December 31, 2025 |
28,912 |
— |
| Value
Line Select Growth Fund, Inc. |
December 31, 2026 |
27,944 |
— |
| Value Line Larger Companies Focused Fund, Inc. |
December 31, 2024 |
34,925 |
— |
| Value
Line Larger Companies Focused Fund, Inc. |
December 31, 2025 |
19,795 |
— |
| Value Line Larger Companies Focused Fund, Inc. |
December 31, 2026 |
66,823 |
— |
| Value
Line Capital Appreciation Fund, Inc. |
December 31, 2024 |
92,293 |
— |
| Value Line Capital Appreciation Fund, Inc. |
December 31, 2025 |
53,839 |
— |
| Value
Line Capital Appreciation Fund, Inc. |
December 31, 2026 |
41,652 |
— |
| Value Line Core Bond Fund |
December 31, 2024 |
170,756 |
— |
| Value
Line Core Bond Fund |
December 31, 2025 |
21,481 |
110,816 |
| Value Line Core Bond Fund |
December 31, 2026 |
78,228 |
97,765 |
During the year ended December 31, 2023, the Value Line Small Cap Opportunities Fund, Inc., Value Line
Select Growth Fund, Inc. and Value Line Larger Companies Focused Fund, Inc. made repayments to the Adviser for previously waived and reimbursed fees in the amounts of $310, $855 and $3,232, respectively.
In the normal course of business, each Fund enters into a variety of agreements that may expose the Funds to some risk of loss. These could include certain agreements related to preferred shares, which are each described elsewhere in these Notes to Financial Statements. The risk of future loss arising from such agreements, while not quantifiable, is expected to be remote. As of the end of the reporting period, the Funds did not have any unfunded commitments.
From time to time, the Funds may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Funds' rights under contracts. As of the end of the reporting period, management has determined that any legal proceeding(s) the Funds are subject to, including those described within this report, are unlikely to have a material impact to any of the Funds' financial statements.
95
Report of Independent Registered Public Accounting Firm
To the Board of Directors
and Shareholders of Value Line Small Cap Opportunities Fund, Inc., Value Line Mid Cap Focused Fund, Inc., Value Line Select Growth Fund, Inc., Value Line Larger Companies Focused
Fund, Inc., Value Line Asset Allocation Fund, Inc., Value Line Capital Appreciation Fund, Inc. and Value Line Core Bond Fund
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of
investments, of each of the funds listed in the table below (hereafter collectively referred to as the "Funds") as of December 31, 2023, the related statements of operations and the statements of changes in net assets for each of the periods indicated in the table below, including the related notes, and the financial highlights for each of the periods indicated in the table below (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of December 31, 2023, the results of each of their operations, the changes in each of their net assets and each of the
financial highlights for each of the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.
Value Line Select
Growth Fund, Inc.(1)
Value Line Mid Cap Focused Fund, Inc. (2)
Value Line Capital Appreciation Fund, Inc. (2)
Value Line Larger Companies Focused Fund, Inc. (2)
Value Line Core Bond
Fund (2)
Value Line Small Cap Opportunities Fund, Inc. (3)
Value Line Asset
Allocation Fund, Inc. (3)
(1)
Statement of operations for the year ended December 31, 2023, statement of changes in net
assets for each of the two years in the period ended December 31, 2023 and the financial highlights for each of the periods indicated therein
(2)
Statement of operations for the year ended December 31, 2023, statement of changes in net assets for each of the two years in
the period ended December 31, 2023 and the financial highlights for each of the five years in the period ended December 31, 2023
(3)
Statement of operations for the year ended December 31, 2023, statements of changes in net assets for the year ended December
31, 2023, the period April 1, 2022 through December 31, 2022 and the year ended March 31, 2022 and the financial highlights for the year ended December 31, 2023, the period April 1,
2022 through December 31, 2022 and for each of the four years in the period ended March 31, 2022
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to
express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our
procedures included confirmation of securities owned as of December 31, 2023 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits
provide a reasonable basis for our opinions.
/s/PricewaterhouseCoopers LLP
New York, New York
February 15, 2024
New York, New York
February 15, 2024
We have served as the auditor of one or more investment companies in the Value Line Funds since 1983.
96
Fund Expenses (unaudited)
Example
As a shareholder of the Funds, you incur ongoing costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in each Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested on (July 1, 2023 and held for six months ended December 31, 2023).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses.
You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in
the first line for each Fund under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical
expenses based on the Funds’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid
for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not
reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if transactional costs were included, your costs would have been higher.
| |
Beginning Account Value July 1, 2023 |
Ending Account Value December 31, 2023 |
Expenses Paid During Period |
Annualized
Expense Ratio |
| Actual* |
|
|
|
|
| Value
Line Small Cap Opportunities Fund, Inc. — Investor Class |
$1,000.00 |
$1,061.20 |
$6.13 |
1.18
% |
| Value Line Small Cap Opportunities Fund, Inc. — Institutional
Class |
1,000.00 |
1,062.50 |
4.83 |
0.93 |
| Value
Line Mid Cap Focused Fund, Inc. — Investor Class |
1,000.00 |
1,089.90 |
5.85 |
1.11 |
| Value Line Mid Cap Focused Fund, Inc. — Institutional
Class |
1,000.00 |
1,090.90 |
4.69 |
0.89 |
| Value
Line Select Growth Fund, Inc. — Investor Class |
1,000.00 |
1,123.50 |
6.26 |
1.17 |
| Value Line Select Growth Fund, Inc. — Institutional
Class |
1,000.00 |
1,124.50 |
4.93 |
0.92 |
| Value
Line Larger Companies Focused Fund, Inc. — Investor Class |
1,000.00 |
1,174.10 |
6.30 |
1.15 |
| Value Line Larger Companies Focused Fund, Inc. — Institutional
Class |
1,000.00 |
1,176.10 |
4.94 |
0.90 |
| Value
Line Asset Allocation Fund, Inc. — Investor Class |
1,000.00 |
1,093.50 |
5.54 |
1.05 |
| Value Line Asset Allocation Fund, Inc. — Institutional
Class |
1,000.00 |
1,095.00 |
4.28 |
0.81 |
| Value
Line Capital Appreciation Fund, Inc. — Investor Class |
1,000.00 |
1,107.90 |
5.84 |
1.10 |
| Value Line Capital Appreciation Fund, Inc. — Institutional
Class |
1,000.00 |
1,109.20 |
4.52 |
0.85 |
| Value
Line Core Bond Fund — Investor Class |
1,000.00 |
1,029.40 |
4.09 |
0.80 |
| Hypothetical (5% return before expenses) |
|
|
|
|
| Value
Line Small Cap Opportunities Fund, Inc. — Investor Class |
$1,000.00 |
$1,019.26 |
$6.01 |
1.18
% |
| Value Line Small Cap Opportunities Fund, Inc. — Institutional
Class |
1,000.00 |
1,020.52 |
4.74 |
0.93 |
| Value
Line Mid Cap Focused Fund, Inc. — Investor Class |
1,000.00 |
1,019.61 |
5.65 |
1.11 |
| Value Line Mid Cap Focused Fund, Inc. — Institutional
Class |
1,000.00 |
1,020.72 |
4.53 |
0.89 |
| Value
Line Select Growth Fund, Inc. — Investor Class |
1,000.00 |
1,019.31 |
5.96 |
1.17 |
| Value Line Select Growth Fund, Inc. — Institutional
Class |
1,000.00 |
1,020.57 |
4.69 |
0.92 |
| Value
Line Larger Companies Focused Fund, Inc. — Investor Class |
1,000.00 |
1,019.41 |
5.85 |
1.15 |
| Value Line Larger Companies Focused Fund, Inc. — Institutional
Class |
1,000.00 |
1,020.67 |
4.58 |
0.90 |
| Value
Line Asset Allocation Fund, Inc. — Investor Class |
1,000.00 |
1,019.91 |
5.35 |
1.05 |
| Value Line Asset Allocation Fund, Inc. — Institutional
Class |
1,000.00 |
1,021.12 |
4.13 |
0.81 |
| Value
Line Capital Appreciation Fund, Inc. — Investor Class |
1,000.00 |
1,019.66 |
5.60 |
1.10 |
97
Fund Expenses (unaudited) (continued)
| |
Beginning Account Value July 1, 2023 |
Ending Account Value December 31, 2023 |
Expenses Paid During Period |
Annualized
Expense Ratio |
| Hypothetical (5% return before expenses) |
|
|
|
|
| Value
Line Capital Appreciation Fund, Inc. — Institutional Class |
$1,000.00 |
$1,020.92 |
$4.33 |
0.85
% |
| Value Line Core Bond Fund — Investor Class
|
1,000.00 |
1,021.17 |
4.08 |
0.80 |
| * |
Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied
by 184/365 (to reflect the Fund's most recent fiscal one-half year). These
expense ratios may differ from the expense ratios shown in the Financial
Highlights. |
98
Federal Tax Notice (unaudited)
Each Fund designates the
following amounts distributed during the fiscal year ended December 31, 2023, if any, as capital gain dividends, dividends eligible for the corporate dividends received deduction
and/or qualified dividend income:
| Fund |
% of Qualifying Dividend Income |
% of Dividends Eligible for the Corporate Dividends Received Deduction |
Long-Term
Capital Gains |
| Value Line Small Cap Opportunities Fund, Inc. |
0
% |
0
% |
$4,203,633 |
| Value
Line Mid Cap Focused Fund, Inc. |
100 |
100 |
— |
| Value Line Select Growth Fund, Inc. |
0 |
0 |
38,347,362 |
| Value
Line Larger Companies Focused Fund, Inc. |
0 |
0 |
— |
| Value Line Asset Allocation Fund, Inc. |
59 |
59 |
76,783,722 |
| Value
Line Capital Appreciation Fund, Inc. |
74 |
74 |
— |
| Value Line Core Bond Fund |
0 |
0 |
— |
Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission
("SEC") for the first and third quarters of each fiscal year as an exhibit to Form N-PORT within 60 days of the end of such fiscal quarter. Regulatory filings of
Forms N-PORT are available on the SEC's website at http://www.sec.gov.
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities, and information regarding how the Funds voted these proxies for the 12-month period ended June 30 is available through the Funds' website at http://www.vlfunds.com and on the SEC's website at http://www.sec.gov. The description of the policies and procedures is also available without charge, upon request, by calling 1-800-243-2729.
99
Board Approval of Liquidity Risk Management Program (unaudited)
To promote effective
liquidity risk management throughout the fund industry and to enhance disclosure regarding fund liquidity and redemption practices, the Securities and Exchange Commission (the
“Commission”) adopted Rule 22e-4 under the Investment Company Act of 1940, as amended. This Rule requires every registered open-end management company to establish a
liquidity risk management program (the “LRMP”) that, among other things, provides for the assessment, management and review of liquidity risk, the classification of a fund’s portfolio investments into one of four liquidity buckets based upon the number of days that such investments may reasonably be expected to be converted into cash or otherwise disposed of without significantly impacting their
price, the establishment of a highly liquid investment minimum where required, and the establishment of a 15% limitation on illiquid investments. Additionally, the Commission adopted Rule 30b1-10 and Form N-LIQUID, which generally requires a fund to notify the
Commission when certain liquidity-related events occur.
The Funds’ Board approved the appointment of the Adviser’s 40 Act Liquidity Risk Management Committee (“Liquidity Committee”) as the administrator of the LRMP for the Funds on December 13, 2018 and the Fund’s LRMP on March 15, 2019. At the Board’s regular meeting on June 16, 2022, the Funds’ Chief Compliance Officer provided a report to the Funds’ Board on the operation and effectiveness of the LRMP after its first year of operation. The Adviser manages liquidity risks associated with the Funds’ investments by monitoring cash and cash equivalents, the use of derivatives, the concentration of investments and the appropriateness of
portfolio strategies for open-end funds, and by classifying every Fund investment as either highly liquid, moderately liquid, less liquid or illiquid on at least a monthly basis. To assist with the classification of Fund investments, the Adviser utilizes a third-party provider of liquidity monitoring services. The third-party provider supplies portfolio-level data and certain assumptions which it uses to determine classifications. The Liquidity Committee reviews and reconciles the information provided for accuracy.
The LRMP effectively managed the Funds’ liquidity risks for the twelve-month period ended December 31, 2023. During this period, each Fund held no less than 50% of its total net assets in highly liquid investments. Because each Fund consisted primarily of highly liquid investments, no highly liquid investment minimum was required to be established for any Fund, and all Funds were well under their illiquid investment limitations. Additionally, no events that would require the filing of Form N-LIQUID occurred.
100
Management of the Funds
The business and affairs of
each Fund are managed by the Fund’s officers under the direction of its Board of Directors. The following table sets forth information on the Directors and officers of the
Funds, each of which serves in that capacity for every Fund. Each Director serves as a director or trustee of each of the registered investment companies advised by the Adviser (the
“Value Line Funds”). Each Director serves until his or her successor is elected and qualified. The Statement of Additional Information includes additional information about the Funds’ Directors and is available without charge by calling
1-800-243-2729.
| Name, Address, and Year of Birth |
Position |
Length of
Time Served |
Principal Occupations
During the Past 5 Years |
Number of
Portfolios
in Fund
Complex
Overseen
by Director |
Other
Directorships Held by
Director During the Past 5
Years |
| Interested Director* |
|
|
|
|
|
| Mitchell E. Appel
1970 |
Director |
Since 2010 |
President of each of the Value Line Funds; Trustee, CEO and Treasurer of the Adviser; President and Chief Financial Officer of the Distributor. |
7 |
Forethought
Variable Insurance
Trust |
| Non-Interested Directors |
|
|
|
|
|
| Joyce E. Heinzerling 1956 |
Director |
Since 2008 |
Retired. Managing Member, Meridian Fund Advisers LLC (consultants) until 2020. |
7 |
KOP Therapeutics
Corp (biotechnology) |
| James E. Hillman
1957 |
Director (Chair of
the Board
of the Value
Line Funds
since April
2016) |
Since 2015 |
Chief Financial Officer, Notre Dame School of Manhattan since 2011; Director and Principal Financial Officer, Merrill Lynch Global Wealth Management, 2006 - 2011. |
7 |
Miller/Howard
High Income Equity Fund |
| Paul Craig Roberts
1939 |
Director |
Since 1983 |
Chairman, Institute for Political Economy. |
7 |
None |
*
Mr. Appel is an
“interested person” as defined in the 1940 Act by virtue of his position with the Distributor and the Adviser.
101
Management of the Funds (continued)
| Name, Address, and Year of Birth |
Position |
Length of
Time Served |
Principal Occupations During the Past 5 Years |
| Officers |
|
|
|
| Mitchell E. Appel
1970 |
President |
Since 2008 |
President of each of the Value Line Funds; Trustee, CEO and Treasurer of the Adviser; President and Chief Financial Officer of the Distributor.
|
| James A. Gallo
1964 |
Treasurer and Chief
Financial
Officer |
Since 2022 |
Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer) of each of the Value Line Funds since June 2022. Senior Principal Consultant. Foreside Management Services, LLC, since 2022. Director Fund Services, Bank of New York Mellon, 2002 - 2021. |
| Michael J. Wagner
1950 |
Chief Compliance
Officer |
Since 2009 |
Chief Compliance Officer of each of the Value Line Funds since 2009; President of Northern Lights Compliance Services, LLC 2006 – 2019. |
| Emily D. Washington 1979 |
Vice President
and
Secretary |
Since 2008 |
Vice President of each of the Value Line Funds since 2020 and Secretary since 2010; Treasurer and Chief Financial Officer of each of the Value Line Funds, 2008 – 2020. |
| Robert Scagnelli
1961 |
Vice President
|
Since 2020 |
Vice President of each of the Value Line Funds since 2020; Vice President of the Distributor and the Adviser since 2011. |
The address for each of the above is 7 Times Square, Suite 1606, New York, NY 10036-6524.
102
In 1950, Value Line started its first mutual fund. For seven decades, knowledgeable investors and financial advisors have been relying on the Value Line Funds to help them build their financial futures. Over the years, Value Line
Funds has evolved into what it is today - a diversified family of mutual funds with a wide range of investment objectives.
Strategies That Have Stood the Test of Time
1950Value
Line Mid Cap Focused Fund
1952Value Line Capital Appreciation Fund
1956Value Line Select Growth Fund
1972Value Line Larger Companies Focused Fund
1986Value Line Core Bond Fund
1993Value Line Small Cap Opportunities Fund
1993Value Line Asset Allocation Fund
2015Institutional shares launched for the Value Line
Larger Companies Focused Fund, Small Cap
Opportunities Fund, Asset Allocation Fund
and Capital Appreciation Fund
Larger Companies Focused Fund, Small Cap
Opportunities Fund, Asset Allocation Fund
and Capital Appreciation Fund
2017Insitutional shares launched for the
Value Line Mid Cap Focused Fund
Value Line Mid Cap Focused Fund
2020Institutional shares launched for the
Value Line Select Growth Fund
Value Line Select Growth Fund
For more complete information about any of the Value Line Funds, including charges and expenses, send for a prospectus from EULAV Securities LLC, 7 Times Square, Suite 1606, New York, New York 10036-6524 or call 1-800-243-2729, 9am-5pm CST, Monday-Friday, or visit us at www.vlfunds.com. Read the prospectus carefully before you invest or send money.
Item 2 Code of Ethics
(a) The Registrant has adopted a Code of Ethics that applies to its principal executive officer, and principal financial officer and principal accounting officer.
(f) Pursuant to item 12(a), the Registrant is attaching as an exhibit a copy of its Code of Ethics that applies to its principal executive officer, and principal financial officer and principal accounting officer.
Item 3 Audit Committee Financial Expert
((a)(1)The Registrant has an Audit Committee Financial Expert serving on its Audit Committee.
(2) The Registrant’s Board has designated James Hillman, member of the Registrant’s Audit Committee, as the Registrant’s Audit Committee Financial Expert. Mr. Hillman is an are independent director.
A person who is designated as an “audit committee financial expert” shall not make such person an “expert” for any purpose, including without limitation under Section 11 of the Securities Act of 1933 or under applicable fiduciary laws, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification.
Item 4 Principal Accountant Fees and Services
| (a) | Audit Fees 2023 - $19,317 |
Audit Fees 2022 - $20,175
| (b) | Audit-Related fees – None. |
| (c) | Tax Preparation 2023 - None |
Tax Preparation 2022 - None
| (d) | All Other Fees – None |
(e) (1) Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X
The Value Line Core Bond Fund (the “Fund”) Board has adopted policies and procedures with regard to the pre-approval of services provided by the Audit firm. Audit, audit-related and tax compliance services provided to the Fund on an annual basis require specific pre-approval by the Board. As noted above, the Board must also approve other non-audit services provided to the Fund and those non-audit services provided to the Fund’s Affiliate Service Providers that related directly to the operations and financial reporting of the Fund. Certain of these non-audit services that the Board believes are a) consistent with the SEC’s auditor independence rules and b) routine and recurring services that will not impair the independence of the independent auditors may be approved by the Board.
General Audit Committee Approval Policy:
Potential services by the auditors will be classified by officers of the Fund and the auditors into the four non-restricted service categories denoted above and this “Approval of Audit, Audit-Related, Tax and Other Services” Policy above will be applied. Any services outside the specific pre-approved service subcategories set forth in this Policy must be specifically approved by the Audit Committee (or such member or members of the Audit Committee as the Audit Committee may authorize to grant such approval).
At least quarterly, the Audit Committee shall review a report summarizing the services by service category, including fees, provided by the Audit firm as set forth in the above policy.
(e) (2) Not applicable.
(f) Not applicable.
(g) Aggregate Non-Audit 2023 - None
Aggregate Non-Audit 2022 - None
(h) Not applicable.
Item 5. Audit Committee of Listed Registrants
Not Applicable.
Item 6. Investments
Not Applicable
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not Applicable
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not Applicable
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not Applicable
Item 10 Submission of Matters to a Vote of Security Holders
Not Applicable
Item 11 Controls and Procedures
| (a) | The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in rule 30a-2(c) under the Act (17 CFR 270.30a-2(c) ) based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report, are appropriately designed to ensure that material information relating to the registrant is made known to such officers and are operating effectively. |
| (b) | The registrant’s principal executive officer and principal financial officer have determined that there have been no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls during the period covered by this report, including corrective actions with regard to significant deficiencies and material weaknesses. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not Applicable
Item 13. Exhibits.
| (a) |
| (b) |
| (2) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| By | /s/ Mitchell E. Appel | |
| Mitchell E. Appel, President | ||
| Date: | March 1, 2024 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Mitchell E. Appel | |
| Mitchell E. Appel, President, Principal Executive Officer | ||
| By: | /s/ James A. Gallo | |
| James A. Gallo, Treasurer, Principal Financial Officer | ||
| Date: | March 1, 2024 | |