Tax-free investments
historically provide
higher after-tax yields
Investing in municipal bonds is one of the few remaining ways to reduce your federal income taxes and keep more of what you earn. In fact, with tax rates at some of the highest levels in recent years, the value of tax-free investing may be greater than ever now. For example, an investor taxed at the top effective marginal federal rate of 39.6% would have to earn an 8.28% yield from a taxable investment just to equal the same after-tax income as a tax-free yield of 5.0%. Even in the 28% federal tax bracket, that taxable investment would have to yield 6.94% to equal a 5.0% tax-free yield.*
The Value Line Tax Exempt Fund, designed to provide maximum income exempt from federal income taxes while avoiding undue risk to principal, offers investors relief through a choice of two portfolios: The Money Market Portfolio and The National Bond Portfolio. Each invests substantially all of its assets in investment-grade municipal securities; the basic difference between the two is the maturities of their holdings. The Money Market Portfolio maintains an average maturity of 90 days or less. The National Bond Portfolio generally maintains an average maturity of between ten and thirty years. Of course, there is no guarantee that the Fund will achieve its objective. When shares of the National Bond Portfolio are redeemed, they be worth more or less than the original cost.
* The value of tax-free investing depends on an individual's tax bracket and tax situation. Your tax adviser should be consulted to determine which of the Value Line Funds are best suited to your needs
and whether any income you may receive will be subject to the Alternative Minimum Tax. Under normal conditions, the Fund's assets will be invested so that at least 80% of the annual income of the Fund
will be exempt from federal income taxes. Income may be subject to state and local taxes. Capital gains, if any, are taxable. The example shown above is not representative of an investment in the Fund and
is shown solely for comparative purposes. Past performance is no guarantee of future results.
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The Value Line Tax
Exempt Fund offers high
quality, professional
management
Not all municipal bonds are alike, and so strict criteria for credit quality can provide a big advantage.
The Value Line Tax Exempt Fund's investment adviser is Value Line, Inc., the same widely acclaimed manager that provides investment counseling services to our corporate and institutional clients. The manager makes decisions for the Fund's investors using data from the nation's top independent rating agencies, Standard & Poor's Corporation and Moody's Investors Service, Inc. as well as from our own Value Line Investment Survey the financial condition of each security's issuer, economic, money and capital market conditions. The Fund invests in a nationally diversified portfolio of investment grade tax exempt bonds. The National Bond Portfolio's primary investments are typically rated at the time of purchase within the four highest grades assigned by Moody's or S&P. Capital appreciation is a secondary objective of the National Bond Portfolio.
The Fund's Money Market Portfolio invests primarily in a nationally diversified portfolio fo high grade, short-term tax exempt securities rated either Aaa, MIG-1, MIG-1, or A-1 by Moody's or AAA, A-1, or SP-1 by S&P.
* An investment in the Fund is neither insured nor guaranteed by the U.S. Government and is subject to the risk of possible loss of principal. Shares of the Fund are offered at net asset value. It is the
policy of the Fund to attempt to maintain a net asset value of $1.00 per share with respect to its Money Market Portfolio, but attainment of such is not assured.
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