increase purchasing
power may increase
investment opportunity
in a growing equity
market
U.S. equities have a long-term performance record that few other investments can match. When aggressively investing for capital growth, one way to increase purchasing power is to use leverage, or the borrowing of money, to buy additional securities. Investors benefit from leverage to the extent that return on the borrowed money exceeds the interest costs and the market value of their securities rise. In other words, when the opportunities for gain are considered potentially greater than the risk of loss, using leverage can put more money to work for you.
Value Line Leveraged Growth Investors is designed solely to realize capital growth by investing substantially all of its assets in common stocks or securities convertible into common stock. The Fund may borrow up to 50% of its net assets to increase its purchasing power, and if the Fund managers believe a defensive position is advisable in light of economic or market conditions, a portion of Fund assets may be held from time to time in cash, debt securities, bonds, or preferred stocks. Of course, there is no guarantee that the Fund will achieve its objective.
Of course, there are risks in all investments, including any stock investment, and in all mutual funds that invest in stocks. Borrowing for investment increases both investment opportunity and investment risk. Since substantially all of the Fund's assets fluctuate in value, whereas the interest obligation resulting from the borrowing is a fixed one, the asset value per share of the Fund will tend to increase more when the portfolio assets increase in value and decrease more when portfolio assets decrease in value than would otherwise be the case. This is the speculative factor known as leverage.
institutional-quality
research
Value Line Leveraged Growth Investors 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 TimelinessTM Ranking System, that we use for our conservative corporate and institutional clients.
The Fund invests primarily in a diversified portfolio of common stocks or securities convertible into common stock and, under normal conditions, will usually invest in those securities ranked 1 or 2 by the Value Line Ranking System for earnings and price momentum. The Fund managers use leverage to increase purchasing power in periods when they believe that the opportunities for gain are potentially greater than the risk of loss. Otherwise, Fund managers may take advantage of the flexibility to use leverage on a selected basis and move to a defensive stance by holding a portion of assets in more conservative securities.
The Fund will only borrow from banks, and only if the value of the Fund's assets, less its other liabilities, is equal to at least 300% of all borrowings including the proposed borrowing. Of course, borrowing for investment increases both investment opportunity and investment risk.
