Company Logo
Website Banner

Mutual Fund Spotlight: Value Line Asset Allocation Fund [VLAAX]

By: Ted Black, CFP©
Spring 2019 (Vol. 37, No. 1)

The Value Line Asset Allocation Fund’s investment objective is to achieve a high total investment return (current income and capital appreciation) consistent with reasonable risk. To achieve this goal, the fund invests in a combination of Stock, Bonds and Cash. As of March 31, 2019, the fund had 64% of its assets in Stocks, and 36% in Bonds and Cash. This type of fund is also commonly known as a Balanced fund.

This no-load fund has roughly $600 million of assets under management, and is managed by a team of three experienced portfolio managers with different areas of specialization. And although the 1.12% annual expense ratio isn’t unreasonable, it’s a little pricier than we like to see. With that said, the return net of the expense ratio over the years has shown that these managers have clearly been earning their fee.

The investment approach this team employs is different in some ways to the majority of funds within its peer group. Many funds in this group use a static approach to allocating assets between Stocks, Bonds and Cash … say 60% Stocks and 40% Bonds and Cash. The VLAAX team has the ability to adjust the allocation used based on how they feel they can take best advantage of current market conditions.

The majority of funds in the peer group also take a “Value” approach when selecting stocks for their portfolios. This Value approach looks to buy individual stocks that are thought to be undervalued and are trading at what is believed to be a discount to their true value. The VLAAX team takes a “Growth” approach to selecting stocks for its portfolio. Rather than looking for gems in undervalued stocks, the growth approach looks for companies that have consistently exhibited strong growth in revenues, earnings per share, and subsequently, their stock price. This approach is perhaps why more of its holdings are in small companies then the majority of its peers who look to invest mostly in very large companies.

If you’re interested in this fund, or would like a portfolio review to determine if this fund might be an appropriate addition to your portfolio, please call Ted Black, CFP® at 888-878-0001, extension 3.

Performance annualized and updated through 04/30/2019: 1-Year: +16.80%; 3-Year: +11.99%; 5-Year: +8.93%. The gross annual expense ratio is 1.12%.

Statistics and information provided by Morningstar and Value Line Funds. Please visit the Value Line Funds website at https://vlfunds. com for the most recent performance information. The principal value and investment return will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns shown, unless otherwise indicated, are total returns, including any capital gains or losses and all dividend and capital gains distributions. The performance data quoted represents past performance and in no way guarantees future results. Mutual funds are not FDIC insured.

Mutual funds are sold by prospectus. An investor should consider the investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus contains this and other information about the investment company. Please contact our office at 888-878-0001 to obtain a prospectus. Please read the prospectus carefully before you invest or send money.

Advisory services offered through Royal Palm Investment Advisors, Inc., a Registered Investment Advisor.