Convertible securities—that is, preferred stocks or debt instruments exchangeable for common stock at a prestated price—usually offer higher income with less risk than generally available from common stocks plus greater appreciation potential than regular bonds. This combination often results in higher total returns than an investment in common stocks.

Convertibles also offer a favorable upside/downside profile. They have unlimited appreciation potential when the price of the corporation's common stock goes up, yet, they have limited downside risk when the common stock declines because their value stabilizes when their yields equal that of nonconvertible long-term debt or preferred stock of the corporation. These securities also tend to perform comparatively well in almost any interest rate environment. But convertibles are usually the province of only the most sophisticated institutional investors.

The Value Line Convertible Fund offers individual investors the opportunity to achieve high current income together with capital appreciation through investment primarily in convertible securities. Of course, there is no guarantee that the Fund will achieve its objective. When shares are redeemed, they may be worth more or less than the original cost.

The Value Line Convertible Fund managers make decisions for the Fund's investors using data from the same Value Line analysts widely acclaimed for their quality research and the same proprietary computer models, including the Value Line Timeliness^TM Ranking System, the Value Line Performance^TM Ranking System, and the Value Line Convertibles Ranking System that we use for our conservative corporate and institutional clients. The Value Line Convertible Ranking System is based on a statistical evaluation model that assigns a rank to the approximately 600 convertibles and more than 50 warrants in the Value Line Convertibles Survey, which has the largest database of information on these securities available. The Ranking System makes a comparison of the historical price relationship of the convertible with its underlying stock, making adjustments for any changes in conditions that occurred, to estimate the degree to which the convertible may be underpriced or overpriced.