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 811-21336
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FIRST TRUST VALUE LINE(R) 100 FUND
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(Exact name of registrant as specified in charter)
1001 Warrenville Road
LISLE, IL 60532
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(Address of principal executive offices) (Zip code)
CT Corporation System
101 Federal Street,
BOSTON, MA 02110
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(Name and address of agent for service)
Registrant's telephone number, including area code: 630-241-4141
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Date of fiscal year end: DECEMBER 31, 2003
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Date of reporting period: DECEMBER 31, 2003
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Form N-CSR is to be used by management investment companies to file
reports with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
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FIRST TRUST VALUE LINE(R) 100 FUND
ANNUAL REPORT
FOR THE PERIOD FROM JUNE 12, 2003 TO DECEMBER 31, 2003
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TABLE OF CONTENTS
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FIRST TRUST VALUE LINE(R) 100 FUND
DECEMBER 31, 2003
Shareholder Letter ....................................................... 1
Portfolio of Investments ................................................. 4
Statement of Assets and Liabilities ...................................... 8
Statement of Operations .................................................. 9
Statement of Changes in Net Assets ....................................... 10
Financial Highlights ..................................................... 11
Notes to Financial Statements ............................................ 12
Report of Independent Auditors ........................................... 16
Dividend Reinvestment Plan ............................................... 17
Management ............................................................... 18
HOW TO READ THIS REPORT
This report contains information that can help you evaluate your investment.
It includes details about the First Trust Value Line(R) 100 Fund (the "Fund")
and presents data and analysis that provide insight into the Fund's
performance and investment approach.
By reading the letter from the Fund's President, James A. Bowen, together
with the commentary by Robert F. Carey, who is the Chief Investment Officer
of the Fund's investment advisor, you will obtain an understanding of how the
market environment affected its performance. The statistical information that
follows can help you understand how the Fund's performance and
characteristics compare to that of relevant market benchmarks.
It is important to keep in mind that the opinions expressed by Mr. Bowen, Mr.
Carey and First Trust Advisors personnel are just that: informed opinions.
They should not be considered to be promises or advice. The opinions, like
the statistics, cover the period through the date on the cover of this
report. Of course, the risks of investing in the fund are spelled out in the
prospectus.
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SHAREHOLDER LETTER
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FIRST TRUST VALUE LINE(R) 100 FUND
ANNUAL REPORT
DECEMBER 31, 2003
Dear Shareholders:
The First Trust Value Line(R) 100 Fund (the "Fund") began trading on the
American Stock Exchange on June 12, 2003. The Fund, which trades under the
ticker symbol FVL, had an initial offering price to the public of $15.00 per
share on June 12 and closed at the end of December at $16.49 per share, a
gain of 9.9%. The net asset value (NAV) of the Fund appreciated from $14.33
on June 12th, to $16.61 at the end of December, a gain of 15.9%. The S&P 500
Index gained 12.4% over the same period. As of December 31, 2003, the Fund's
share price traded at a 0.7% discount to its NAV. As of February 10, 2004,
the share price of the Fund was $17.25 and shares were trading at a 0.4%
premium to its NAV. The Fund did not declare any dividends or capital gain
distributions in 2003 and is not leveraged.
The state of the U.S. economy improved a great deal as 2003 unfolded. We
believe that investors began to embrace the notion that the economic cycle
was transitioning from a recovery phase to an expansionary phase in early
spring. The combination of low interest rates/low inflation, a pickup in
business spending and tax reform helped to fuel economic growth. Overall, the
U.S. economy, as measured by Gross Domestic Product, grew by 3.1% in 2003.
The three-year bear market in stocks thankfully ran its course in March. At
first glance, 2003 looked a bit like the late 1990's when investors
speculated heavily on the dot-coms. Internet companies were among the top
performers in 2003, only this time the attraction was earnings instead of
hype. The degree to which corporate profits grew, in our opinion, was one of
the most pleasant surprises in 2003. According to the Bureau of Economic
Analysis, total corporate profits (pre-tax) in the third quarter set a record
at $1.12 trillion, up 25% from the third quarter of 2002.
The companies in the S&P 500 Index produced net income of $474 billion in
2003, up from $179 billion in 2002, and higher than the $445 billion posted
in 2000, according to Thomson Financial. Profits jumped 17% in 2003, up from
a 0.1% gain in 2002. Profits in 2003 fell just shy of 1999's 18% gain.
Year-to-date through December 12, no less than 241 companies in the S&P 500
Index raised their dividend distributions, while a record 21 companies
initiated dividends for the first time -- reversing a 20-year trend of fewer
companies paying dividends, according to BUSINESSWEEK.
According to SmartMoney.com, from 1927 through 2002 - encompassing 19
presidential election cycles - the S&P 500's average annual total return was
12%. The average return in the fourth year of a president's term has been
14%.
I encourage shareholders to read the interview with Bob Carey, Chief
Investment Officer at First Trust Advisors. Bob's commentary offers greater
insight into the Fund's investment strategy.
Sincerely,
/S/ James A. Bowen
James A. Bowen
President of the First Trust Value Line(R) 100 Fund
February 12, 2004
Page 1
[GRAPHIC OMITTED] ROBERT F. CAREY PIC
ROBERT F. CAREY, CFA
SENIOR VICE PRESIDENT, CHIEF INVESTMENT OFFICER
FIRST TRUST ADVISORS
Mr. Carey is responsible for the overall management of research and analysis
of the First Trust product line. Mr. Carey has over 17 years of experience as
an Equity and Fixed-Income Analyst and is a recipient of the Chartered
Financial Analyst (CFA) designation. He is a graduate of the University of
Illinois at Champaign-Urbana with a B.S. in Physics. He is also a member of
the Investment Analysts Society of Chicago and the Association for Investment
Management and Research. He has been a guest on CNBC and has been interviewed
by publications such as THE WALL STREET JOURNAL.
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A COMMENTARY ON THE FIRST TRUST VALUE LINE(R) 100 FUND
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A REVIEW OF THE FUND'S INVESTMENT STRATEGY
The Fund adheres to a disciplined strategy of investing in the 100 common
stocks ranked #1 in the Value Line(R) TimelinessTM Ranking System. The Value
Line(R) TimelinessTM Ranking System was introduced in 1965. Each week, Value
Line(R) applies its TimelinessTM Ranking System to screen a wide array of
data using a series of proprietary calculations to rank each of the
approximately 1,700 stocks in the Value Line(R) universe for EXPECTED PRICE
PERFORMANCE OVER THE NEXT 6 TO 12 MONTHS. Only 100 stocks are given Value
Line's #1 ranking for TimelinessTM at any given time.
Each week the Fund makes portfolio adjustments to match changes initiated by
Value Line(R) to the 100 stocks ranked #1 for TimelinessTM. When a new stock
attains a #1 ranking it is added to the Fund's portfolio and stocks no longer
ranked #1 are removed from the Fund's portfolio. From the commencement of
operations of the Fund on June 12 through December 31, 4.4 stocks on average
were changed in a given week. The Fund rebalances its holdings on a quarterly
basis so that each stock was equally weighted on the rebalancing date.
PERFORMANCE OF THE FUND SINCE INCEPTION
As is often the case with new closed-end fund offerings, the ride for
investors was a little bumpy in the first six months with respect to the
Fund's share price trading by as much as a 10% discount to its net asset
value (NAV). The slow start is not surprising considering that the last time
investors saw a diversified equity closed-end fund offering was 1994.
Furthermore, the three-year bear market in stocks had ended just three months
prior to the launch of the Fund.
Shown on the chart below are the market value and net asset value total returns
of the Fund for the period from its inception on June 12, 2003 through the end
of 2003, along with comparative returns for the S&P 500 Index and the S&P 400
Index over this same period. The returns depicted assume reinvestment of
dividends and capital gain distributions.
[GRAPHIC OMMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPARATIVE TOTAL RETURNS
June 12 to December 31, 2003
FVL FVL
MARKET NAV S&P 500 S&P 400
9.9% 15.9% 12.4% 18.7%
THE COMPOSITION OF THE FUND
The Fund had a mid-capitalization orientation to its portfolio holdings
during the approximately six months this Fund was open during 2003. Shortly
after the initial offering in June, the Fund was fully invested and the
average market capitalization of the issuers of stocks in the portfolio was
approximately $6.3 billion. The breakdown of the 100 stocks that initially
comprised the portfolio was as follows: Large-Cap stocks (20), Mid-Cap stocks
(46) and Small-Cap stocks (34). The average market capitalization of the
portfolio as of the end of December was approximately $9.4 billion.
Page 2
The breakdown of the 100 stocks as of December 31, 2003 was as follows:
Large-Cap stocks (20), Mid-Cap stocks (53) and Small-Cap stocks (27). During
this period the Fund's NAV more closely tracked the performance of the S&P
400 Index, which tracks mid-cap stocks, than the S&P 500 Index. For
comparative purposes, as of December 31, the average equal-weighted market
cap of the companies in the S&P 500 Index was $20.6 billion. A similar
average market cap of the companies in the S&P 400 Index, which tracks
mid-cap stocks, was $2.4 billion. The average market cap of the companies in
the Russell 2000 Index, which tracks small-cap stocks, was $587 million. Even
though the composition of this Fund was slanted toward mid-cap stocks during
2003, because of the continual adjustments in the make up of these 100 #1
ranked stocks by Value Line(R), this composition could change going forward.
A RECAP OF THE EQUITIES MARKETS IN 2003
Two areas that contributed significantly to the strong performance in the
equities markets in 2003 are the rebound in the Internet and technology
stocks and the continued leadership role of small-cap and mid-cap stocks. The
Dow Jones Composite Internet Index posted a gain of 81.8% in 2003. The
impressive showing, however, followed three dismal years (2000-2002) in which
the index had plummeted by 72%. According to Value Line(R), the interest in
these types of stocks, many of which still do not have earnings and were very
beaten down in price, came primarily from speculators encouraged by the
improving U.S. economy.
The rebound in the technology sector, in our opinion, was most likely a
result of an anticipation of a pickup in business spending. Technology
products often become obsolete in a relatively short time span, which
explains why businesses might be looking to upgrade the equipment purchased
back in the Y2K era. Also, thanks to the Jobs & Growth Tax Relief
Reconciliation Act of 2003 businesses are able to take advantage of an
accelerated depreciation provision on equipment purchased by the end of 2004.
Small-cap and mid-cap stocks outperformed large-cap stocks again in 2003.
Large-cap stocks have not challenged for the leadership role in the market
since before the bear market began in early 2000. For the 5-year period ended
2003, small-, mid- and large-cap stocks posted the following cumulative
returns: S&P 600 Index (+58.2%), S&P 400 Index (+55.3%) and S&P 500 Index
(-2.9%).
IN CLOSING
The First Trust Value Line(R) 100 Fund seeks to invest in stocks with good
earnings growth and favorable price momentum. During the period covered by
this report, the Fund was diversified via market capitalization and, because
of the weekly revisions to the portfolio to match changes in the Value
Line(R) TimelinessTM Ranking System; the average market capitalization of
this portfolio going forward could vary over time.
Page 3
FIRST TRUST VALUE LINE(R) 100 FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2003
MARKET
SHARES VALUE
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COMMON STOCKS - 99.8% (ALL U.S. ENTERPRISES)
RETAIL - 16.1%
159,387 Autonation, Inc.* ............................. $ 2,927,939
88,337 Barnes & Noble, Inc.* ......................... 2,901,870
55,903 Best Buy Company, Inc. ........................ 2,920,373
60,869 CEC Entertainment, Inc.* ...................... 2,884,582
154,038 Claire's Stores, Inc. ......................... 2,902,076
82,892 CVS Corp. ..................................... 2,994,059
125,708 Foot Locker, Inc .............................. 2,947,853
95,077 Fred's, Inc. .................................. 2,945,486
40,511 Harman International Industries, Inc. ......... 2,997,004
82,490 Home Depot, Inc. .............................. 2,927,570
64,827 Michael's Stores, Inc.* ....................... 2,865,353
85,163 Nordstrom, Inc. ............................... 2,921,091
167,126 Nu Skin Enterprises, Inc. - Class A ........... 2,856,183
125,164 PETsMART, Inc. ................................ 2,978,903
125,763 The Gap, Inc. ................................. 2,918,959
107,005 Yankee Candle Company* ........................ 2,924,447
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46,813,748
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HOME BUILDERS - 8.7%
28,402 Beazer Homes USA, Inc. ........................ 2,773,739
26,237 Centex Corp. .................................. 2,824,413
64,696 D.R. Horton, Inc. ............................. 2,798,749
32,298 Hovnanian Enterprises, Inc. - Class A* ........ 2,811,864
29,000 Lennar Corp. - Class A ........................ 2,784,000
43,947 M.D.C. Holdings, Inc. ......................... 2,834,581
30,244 Pulte Homes, Inc. ............................. 2,831,443
31,478 Ryland Group, Inc. ............................ 2,790,210
58,321 Standard-Pacific Corp. ........................ 2,831,485
---------------
25,280,484
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CONSUMER DURABLES & APPAREL - 7.0%
79,936 Chico's FAS, Inc.* ............................ 2,953,635
77,080 Coach, Inc.* .................................. 2,909,770
243,191 Guess ?, Inc.* ............................... 2,935,315
100,531 HOT Topic, Inc.* .............................. 2,961,643
117,313 K-Swiss, Inc. - Class A ....................... 2,822,551
138,339 Pacific Sunwear of California, Inc.* .......... 2,921,720
77,577 Urban Outfitters, Inc.* ....................... 2,874,228
---------------
20,378,862
---------------
INDUSTRIAL - 6.1%
103,593 Agilent Technologies, Inc.* ................... 3,029,059
394,883 NEC Corp. - Sponsored ADR ..................... 2,965,176
81,448 Rockwell Automation, Inc. ..................... 2,899,549
116,082 Tetra Tech, Inc.* ............................. 2,885,799
89,871 Universal Forest Products, Inc. ............... 2,892,049
88,189 Waters Corp.* ................................. 2,924,347
---------------
17,595,979
---------------
Page 4 See Notes to Financial Statements.
FIRST TRUST VALUE LINE(R) 100 FUND - (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2003
MARKET
SHARES VALUE
------------- ------------
COMMON STOCKS - (CONTINUED)
COMMERCIAL SERVICES - 6.0%
69,111 CoStar Group, Inc.* ........................... $ 2,880,547
411,257 Exult, Inc.* .................................. 2,928,150
61,648 ITT Educational Services, Inc.* ............... 2,895,607
151,330 Navigant Consulting, Inc.* .................... 2,854,084
27,809 Strayer Education, Inc. ....................... 3,026,453
42,165 University of Phoenix Online .................. 2,906,433
---------------
17,491,274
---------------
BIOTECHNOLOGY - 6.0%
116,209 Affymetrix, Inc.* ............................. 2,859,904
64,973 Celgene Corp.* ................................ 2,925,084
73,439 Digene Corp.* ................................. 2,944,904
30,521 Genentech, Inc.* .............................. 2,855,850
41,280 Invitrogen Corp.* ............................. 2,889,600
44,910 Martek Bioscience Corp.* ...................... 2,917,803
---------------
17,393,145
---------------
INTERNET - 5.9%
254,875 1-800-FLOWERS.COM, Inc.* ...................... 2,818,917
54,185 Amazon.com, Inc.* ............................. 2,852,298
276,149 Earthlink, Inc.* .............................. 2,761,490
113,483 eResearch Technology, Inc.* ................... 2,884,738
84,171 Symantec Corp.* ............................... 2,916,525
146,915 WebEx Communications, Inc.* ................... 2,952,992
---------------
17,186,960
---------------
DIVERSIFIED FINANCIAL SERVICES - 5.1%
206,355 Ameritrade Holding Corp.* ..................... 2,903,415
230,381 E*Trade Financial Corp.* ...................... 2,914,320
205,785 Knight Trading Group, Inc* .................... 3,012,692
38,219 Legg Mason, Inc. .............................. 2,949,742
117,675 MBNA Corp. .................................... 2,924,224
---------------
14,704,393
---------------
TECHNOLOGY HARDWARE & EQUIPMENT - 5.0%
65,281 Cognizant Technology Solutions Corp.* ......... 2,979,425
91,194 Global Imaging Systems, Inc.* ................. 2,895,409
47,174 Sandisk Corp.* ................................ 2,884,218
128,067 Transactions Systems Architects, Inc.* ........ 2,898,156
78,760 VERITAS Software Corp.* ....................... 2,926,722
---------------
14,583,930
---------------
HEALTHCARE PRODUCTS - 5.0%
63,559 Advanced Neuromodulation Systems, Inc.* ....... 2,922,443
60,868 INAMED Corp.* ................................. 2,925,316
45,290 Patterson Dental Company* ..................... 2,905,806
75,098 Techne Corp.* ................................. 2,837,203
41,673 Zimmer Holdings, Inc.* ........................ 2,933,779
---------------
14,524,547
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See Notes to Financial Statements.
Page 5
FIRST TRUST VALUE LINE(R) 100 FUND - (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2003
MARKET
SHARES VALUE
------------- ------------
COMMON STOCKS - (CONTINUED)
TELECOMMUNICATIONS - 4.1%
233,356 Avaya, Inc.* .................................. $ 3,019,627
121,126 Cisco Systems, Inc.* .......................... 2,942,150
105,431 Foundry Networks, Inc.* ....................... 2,884,592
106,847 Nextel Communications, Inc. - Class A* ........ 2,998,127
---------------
11,844,496
---------------
HEALTH CARE EQUIPMENT & SERVICES - 4.0%
75,294 DaVita, Inc.* ................................. 2,936,466
127,313 Humana, Inc.* ................................. 2,909,102
99,190 Odyssey Healthcare, Inc.* ..................... 2,902,300
43,354 Pacificare Health Systems, Inc.* .............. 2,930,730
---------------
11,678,598
---------------
SOFTWARE & SERVICES - 4.0%
61,477 Electronic Arts, Inc.* ........................ 2,937,371
107,323 IDX Systems Corp.* ............................ 2,878,403
271,993 Novell, Inc.* ................................. 2,861,367
93,995 Total System Services, Inc. ................... 2,926,064
---------------
11,603,205
---------------
SEMICONDUCTORS - 3.0%
135,487 Cypress Semiconductor Corp.* .................. 2,894,002
107,683 Emulex Corp.* ................................. 2,872,983
56,044 QLogic Corp.* ................................. 2,891,870
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8,658,855
---------------
PHARMACEUTICALS - 2.9%
90,466 Accredo Health, Inc.* ......................... 2,859,630
45,332 AmerisourceBergen Corp. ....................... 2,545,392
63,322 GlaxoSmithKline PLC, Sponsored ADR ............ 2,952,072
---------------
8,357,094
---------------
AEROSPACE/DEFENSE EQUIPMENT - 1.9%
180,809 AAR Corp.* .................................... 2,703,095
52,208 Engineered Support Systems, Inc. .............. 2,874,572
---------------
5,577,667
---------------
FOOD, BEVERAGE & TOBACCO - 1.0%
224,653 Tyson Foods, Inc. - Class A ................... 2,974,406
---------------
HOUSEHOLD PRODUCTS - 1.0%
40,912 Fortune Brands, Inc. .......................... 2,924,799
---------------
SAVINGS & LOAN - 1.0%
76,530 New York Community Bancorp, Inc. .............. 2,911,966
---------------
COMMUNICATIONS - 1.0%
73,327 Univision Communications, Inc. - Class A* ..... 2,910,349
---------------
ADVERTISING - 1.0%
57,547 Getty Images, Inc.* ........................... 2,884,831
---------------
Page 6 See Notes to Financial Statements.
FIRST TRUST VALUE LINE(R) 100 FUND - (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2003
MARKET
SHARES VALUE
------------- ------------
COMMON STOCKS - (CONTINUED)
MINING - 1.0%
59,175 Newmont Mining Corp. .......................... $ 2,876,497
---------------
ENTERTAINMENT - 1.0%
80,492 International Game Technology ................. 2,873,564
---------------
OIL & GAS - 1.0%
58,647 Patina Oil & Gas Corp. ........................ 2,873,117
---------------
CONSUMER GOODS - 1.0%
50,724 Thor Industries, Inc. ......................... 2,851,703
---------------
TOTAL COMMON STOCKS ........................... 289,754,469
---------------
(Cost $254,039,756)
TOTAL INVESTMENTS - 99.8% ..................... 289,754,469
(Cost $254,039,756)**
NET OTHER ASSETS & LIABILITIES - 0.2% ......... 709,226
---------------
NET ASSETS - 100.0% ........................... $ 290,463,695
===============
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* Non-income producing security.
** Aggregate cost for federal tax purposes.
ADR American Depository Receipt
See Notes to Financial Statements. Page 7
STATEMENT OF ASSETS AND LIABILITIES
FIRST TRUST VALUE LINE(R) 100 FUND
DECEMBER 31, 2003
ASSETS:
Investments, at value
(See Portfolio of Investments) (a): ........................................... $289,754,469
------------
Cash ............................................................................. 529,864
Receivable for investment securities sold ........................................ 38,428,807
Interest receivable .............................................................. 175
Dividends receivable ............................................................. 47,553
Prepaid expenses . ............................................................... 21,271
------------
Total Assets ................................................................ 328,782,139
------------
LIABILITIES:
Payable for investment securities purchased ...................................... 37,936,773
Investment advisory fee payable .................................................. 157,841
Payable to administrator ......................................................... 22,824
Trustees' fees payable ........................................................... 3,669
Accrued audit fees ............................................................... 30,000
Accrued transfer agent fees ...................................................... 9,596
Custodian fee payable ............................................................ 8,704
Printing fees payable ............................................................ 8,027
Accrued expenses and other payables .............................................. 141,010
------------
Total Liabilities ........................................................... 38,318,444
------------
NET ASSETS ....................................................................... $290,463,695
============
(a) Investments, at cost ......................................................... $254,039,756
============
NET ASSETS CONSIST OF:
Paid-in capital .................................................................. $250,024,791
Undistributed net investment income .............................................. 0
Accumulated net realized gain on investments sold ................................ 4,724,191
Net unrealized appreciation of investments during the period ..................... 35,714,713
------------
Total Net Assets ............................................................ $290,463,695
============
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share) ............. $ 16.61
============
Number of Common Shares outstanding .............................................. 17,490,000
============
Page 8 See Notes to Financial Statements.
STATEMENT OF OPERATIONS
FIRST TRUST VALUE LINE(R) 100 FUND
FOR THE PERIOD ENDED DECEMBER 31, 2003*
INVESTMENT INCOME:
Dividends .............................................................. $ 377,688
Interest ............................................................... 20,339
------------
Total investment income ........................................... 398,027
------------
EXPENSES:
Investment advisory fee ................................................ 941,326
Value Line(R)licensing fee ............................................. 147,247
Administration fee ..................................................... 137,554
Trustees' fees and expenses ............................................ 34,445
Legal fees . ........................................................... 75,000
Audit fees . ........................................................... 30,000
Custodian fees ......................................................... 28,810
Transfer Agent fees .................................................... 37,179
Printing fees .......................................................... 15,000
Other .................................................................. 36,524
------------
Total expenses .................................................... 1,483,085
------------
NET INVESTMENT LOSS .................................................... (1,085,058)
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from investments sold during the period .............. 5,809,249
Change in unrealized appreciation of investments during the period ..... 35,714,713
------------
Net realized and unrealized gain on investments ........................ 41,523,962
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................... $40,438,904
============
----------------------
* The Fund commenced operations on June 12, 2003.
See Notes to Financial Statements. Page 9
STATEMENT OF CHANGES IN NET ASSETS
FIRST TRUST VALUE LINE(R) 100 FUND
FOR THE PERIOD ENDED DECEMBER 31, 2003*
PERIOD
ENDED
12/31/03*
-------------
Net investment loss ............................................... $ (1,085,058)
Net realized gain from investments sold during the period ......... 5,809,249
Change in unrealized appreciation of investments during the period 35,714,713
-------------
Net increase in net assets resulting from operations .............. 40,438,904
Net proceeds from sale of 17,490,000 shares of Common Shares ...... 250,024,791
-------------
Net increase in net assets for the period ......................... 290,463,695
NET ASSETS:
Beginning of period ............................................... --
-------------
End of period ..................................................... $290,463,695
=============
Undistributed net investment loss at end of period ................ $ 0
=============
------------------------------
* The Fund commenced operations on June 12, 2003.
Page 10 See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
FIRST TRUST VALUE LINE(R) 100 FUND
FOR A COMMON SHARE OUTSTANDING THROUGHOUT THE PERIOD.
PERIOD
ENDED
12/31/03*
-----------
Net asset value, beginning of period ................... $ 14.33
-----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss .................................... (0.06)
Net realized and unrealized gain on investments ........ 2.34
-----------
Total from investment operations ....................... 2.28
-----------
Net asset value, end of period ......................... $ 16.61
===========
Market value, end of period ............................ $ 16.49
===========
TOTAL RETURN BASED ON NET ASSET VALUE (A)+ ............. 15.91%
===========
TOTAL RETURN BASED ON MARKET VALUE (B)+ ................ 9.93%
===========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ................... $ 290,464
Ratio of operating expenses to average net assets ...... 1.02%**
Ratio of net investment loss to average net assets ..... (0.75)%**
Portfolio turnover rate ................................ 143.53%
--------------------------------------------------
* The Fund commenced operations on June 12, 2003.
** Annualized.
(a) Total Return on Common Share Net Asset Value is the combination of
reinvested dividend income at net asset value, reinvested capital gains
distributions at net asset value, if any, and changes in Common Share
net asset value per share.
(b) Total Return on Market Value is the combination of reinvested dividend
income, reinvested capital gains distributions, if any, and changes in
stock price per share, all based on market price per share.
+ Total return is not annualized for periods less than one year.
See Notes to Financial Statements. Page 11
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST VALUE LINE(R) 100 FUND
DECEMBER 31, 2003
1. SIGNIFICANT ACCOUNTING POLICIES
First Trust Value Line(R) 100 Fund (the "Fund") is a diversified closed-end
management investment company organized as a Massachusetts business trust on
April 18, 2003 and is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended (the "1940
Act"). The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. The preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
reported amounts and disclosures in the financial statements. Actual results
could differ from those estimates.
The Fund's investment objective is to provide capital appreciation. The Fund
seeks to outperform the Standard & Poor's 500 Composite Stock Price Index
(the "S&P 500 Index") by adhering to a disciplined strategy of investing in a
diversified portfolio of the 100 common stocks ranked #1 in Value Line's(R)
TimelinessTM Ranking System.
The Value Line(R) TimelinessTM Ranking System was introduced in its present form
in 1965. Each week, Value Line(R) screens a wide array of data, using a series
of proprietary calculations to rank each of the approximately 1,700 stocks in
the Value Line(R) universe from #1 (highest) to #5 (lowest) based on their
expected price performance relative to the other stocks in the universe over the
following 6 to 12 months. At any one time, only 100 stocks are ranked #1 in the
Value Line(R) TimelinessTM Ranking System.
The Fund will invest substantially all, but in no event less than 80%, of its
net assets in the stocks that are ranked #1 in the Value Line(R) TimelinessTM
Ranking System. Upon commencement of the Fund's investment operations, the
Fund invested equal amounts in each of the 100 stocks ranked #1 by Value
Line(R) in the previous week. The Fund also rebalances its holdings on a
quarterly basis so that each stock is equally weighted on the rebalancing
date.
PORTFOLIO VALUATION:
The Fund will determine the net asset value of its shares daily, as of the
close of regular session trading on the New York Stock Exchange (normally
4:00 p.m. eastern time). Net asset value is computed by dividing the value of
all assets of the Fund (including accrued interest and dividends), less all
liabilities (including accrued expenses and dividends declared but unpaid),
by the total number of shares outstanding.
For the purposes of determining the net asset value of the Fund, readily
marketable portfolio securities listed on any exchange other than NASDAQ
National Market ("NASDAQ") are valued, except as indicated below, at the last
sale price on the business day as of which such value is being determined. If
there has been no sale on such day, the securities are valued at the mean of
the most recent bid and ask prices on such day. Securities admitted to trade
on the NASDAQ are valued at the NASDAQ Official Closing Price ("NOCP") as
determined by NASDAQ. Portfolio securities traded on more than one securities
exchange are valued at the last sale price on the business day as of which
such value is being determined at the close of the exchange representing the
principal market for such securities.
Equity securities traded in the over-the-counter market, but excluding
securities admitted to trading on the NASDAQ, are valued at the closing bid
prices. Fixed income securities with a remaining maturity of 60 days or more
will be valued by the Fund using a pricing service. Fixed income securities
maturing within 60 days are valued by the Fund on an amortized cost basis.
Foreign securities, currencies and other assets denominated in foreign
currencies are translated into U.S. dollars at the exchange rate of such
currencies against the U.S. dollar as provided by a pricing service. The value
of any portfolio security held by the Fund for which reliable market quotations
are not readily available, including illiquid securities, or if a valuation is
deemed inappropriate, will be determined by First Trust Advisors L.P. ("First
Trust") pursuant to the procedures approved by the Board of Trustees in a manner
that most fairly reflects fair market value of the security on the valuation
date.
Any derivative transaction that the Fund enters into may, depending on the
applicable environment, have a positive or negative value for purposes of
calculating net asset value. Forward foreign currency exchange contracts
which are traded in the United States on regulated exchanges are valued by
calculating the mean between the last bid and ask quotation supplied to a
pricing service by certain independent dealers in such contracts.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost
basis. Dividend income is recorded on the ex-dividend date. Interest income
is recorded on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may
be settled a month or more after the trade date; interest income is not
accrued until settlement date. The Fund instructs the custodian to segregate
assets of the Fund with a current value at least equal to the amount of its
when-issued purchase commitments.
FOREIGN CURRENCY:
The books and records of the Fund are maintained in U.S. dollars. Foreign
currencies, investments and other assets and liabilities are translated into
U.S. dollars at the exchange rates prevailing at the end of the period.
Purchases and sales of investment securities and items of income and expense
are translated on the respective dates of such transactions. Unrealized gains
and losses which result from changes
Page 12
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST VALUE LINE(R) 100 FUND
DECEMBER 31, 2003
in foreign currency exchange rates have been included in the unrealized
appreciation/(depreciation) of investments and net other assets. Net realized
foreign currency gains and losses include the effect of changes in exchange
rates between trade date and settlement date on investment security
transactions, foreign currency transactions and interest and dividends
received. The portion of foreign currency gains and losses related to
fluctuation in exchange rates between the initial purchase trade date and
subsequent sale trade date is included in realized gains and losses on
investment securities sold.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income and net realized long-term and
short-term capital gains of the Fund will be paid at least annually or as the
Board of Trustees may determine from time to time. Distributions will
automatically be reinvested into additional Common Shares pursuant to the
Fund's Dividend Reinvestment Plan unless cash distributions are elected by
the shareholder.
Income dividends and capital gain distributions are determined in accordance
with the income tax regulations which may differ from accounting principles
generally accepted in the United States of America. These differences are
primarily due to differing treatments of income and gains on various
investment securities held by the Fund, timing differences and differing
characterization of distributions made by the Fund. The net investment loss
of $1,085,058 reported in the Statement of Operations represents a permanent
book to tax difference and was reclassified from undistributed net investment
income to accumulated net realized loss on investments in the components of
net assets reported in the Statement of Assets and Liabilities.
As of December 31, 2003, the components of net assets on a tax basis were as
follows:
Paid in Capital...............................$250,024,791
Accumulated Gains............................. 4,724,191
Unrealized Appreciation....................... 35,714,713
FEDERAL INCOME TAXES:
The Fund intends to qualify as a regulated investment company by complying
with the requirements under Subchapter M of the Internal Revenue Code of
1986, as amended, applicable to regulated investment companies and by
distributing substantially all of its taxable income to shareholders.
Therefore, no Federal income tax provision is required.
Income and capital gain distributions are determined and characterized in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities held by the
Fund, timing differences and differing characterization of distributions made by
the Fund.
The Internal Revenue Code of 1986, as amended, imposes a 4% non-deductible
excise tax on the Fund to the extent the Fund does not distribute by the end
of any calendar year at least 98% of the sum of its net investment income and
its capital gains (both long and short) for its fiscal year and certain
undistributed amounts from previous years.
EXPENSES:
The Fund will pay all expenses directly related to its operations. First
Trust has entered into a non-exclusive license agreement with Value Line(R)
Publishing, Inc. which allows for the use by First Trust of the Value Line(R)
TimelinessTM Ranking System and certain trademarks and trade names of Value
Line(R) Publishing, Inc. The Fund is a sub-licensee to this license
agreement. In exchange, Value Line(R) Publishing, Inc. will receive an annual
fee, payable on a quarterly basis, equal to 10 basis points of the Fund's
average gross daily assets during such calendar quarter. This license fee
will be paid by the Fund to First Trust who will in turn pay Value Line(R)
Publishing, Inc. The terms of the license agreement provide that it shall
continue in effect for a term of one year and will be automatically renewed
for successive one year terms unless either party elects not to renew the
agreement.
ORGANIZATIONAL AND OFFERING COSTS:
Organization costs consist of costs incurred to establish the company and
enable it legally to do business. These costs include incorporation fees,
legal services pertaining to the organization of the business and audit fees
relating to the initial registration and auditing the initial seed capital
statement, among other fees. Offering costs consist of legal fees pertaining
to the Fund's shares offered for sale, registration fees, underwriting fees,
and printing of initial prospectus, among other fees. First Trust has
contractually agreed to pay all organizational expenses and all offering
costs of the Fund (other than sales load) that exceed $0.03 per Common Share.
The Fund's share of Common Share offering costs, $519,469, were recorded as a
reduction of the proceeds from the sale of Common Shares.
2. INVESTMENT ADVISORY FEE AND OTHER AFFILIATED TRANSACTIONS
First Trust Advisors L.P. is a limited partnership with one limited partner,
Grace Partners of DuPage L.P., and one general partner, The Charger
Corporation. First Trust serves as investment advisor to the Fund pursuant to
an Investment Management Agreement. First Trust is responsible for
implementing the Fund's overall investment strategy, including the allocation
and periodic reallocation of the portion of the Fund's assets to be invested
in common stocks, and certain administrative services necessary for the
management of the Fund. For its investment management services, First Trust
is entitled to a monthly fee calculated at an annual rate of 0.65% of the
Fund's average daily net assets.
Page 13
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST VALUE LINE(R) 100 FUND
DECEMBER 31, 2003
PFPC, Inc. ("PFPC"), an indirect, majority-owned subsidiary of the PNC
Financial Services Group, Inc., serves as the Fund's Administrator and
Transfer Agent in accordance with certain fee arrangements. PFPC Trust
Company, an indirect, majority-owned subsidiary of the PNC Financial Services
Group, Inc., serves as the Fund's Custodian in accordance with certain fee
arrangements.
No officer or employee of First Trust received any compensation from the Fund
for serving as an officer or Trustee of the Fund. The Fund pays each Trustee
who is not an officer or employee of First Trust or any of their affiliates
$10,000 per annum plus $1,000 per regularly scheduled meeting attended, $500
per committee meeting attended and reimbursement for travel and out-of-pocket
expenses.
3. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of investment securities, excluding
short-term investments, for the period ended December 31, 2003, aggregated
$585,061,210 and $336,830,703, respectively.
4. COMMON STOCK
At December 31, 2003, 17,490,000 of $0.01 par value Common Stock were
authorized. An unlimited number of shares has been authorized under the
Fund's Dividend Reinvestment Plan.
5. CONCENTRATION OF RISK
The Fund will invest substantially all, but in no event less than 80%, of its
net assets in the stocks that are ranked #1 in the Value Line(R) TimelinessTM
Ranking System. This investment strategy may be unsuccessful and may
underperform the stock market as a whole. The types of stocks that are ranked
#1 in the Value Line(R) TimelinessTM Ranking System can be expected to change
over time. Particular risks may be elevated during periods in which the
Fund's investment strategy dictates higher levels of investment in particular
types of stocks. Accordingly, in pursuing its investment strategy, the Fund
will be subject to the risks set forth below:
o An investment in the Fund's Common Shares is subject to investment
risk, including the possible loss of the entire principal invested. An
investment in Common Shares represents an indirect investment in the
securities owned by the Fund, substantially all of which are traded on
a national securities exchange or in the over-the-counter markets. The
value of these securities, like other market investments, may move up
or down, sometimes rapidly and unpredictably. Common Shares at any
point in time may be worth less than the original investment, even
after taking into account the reinvestment of Fund dividends and
distributions. The Fund will have exposure to common stocks. Although
common stocks have historically generated higher average returns than
fixed-income securities over the long term, common stocks also have
experienced significantly more volatility in those returns and in
recent years have significantly underperformed relative to fixed income
securities. An adverse event, such as an unfavorable earnings report,
may depress the value of a particular common stock held by the Fund.
Also, the price of common stocks are sensitive to general movements in
the stock market and a drop in the stock market may depress the price
of common stocks to which the Fund has exposure. Common stock prices
fluctuate for several reasons including changes in investors'
perceptions of the financial condition of an issuer or the general
condition of the relevant stock market, or when political or economic
events affecting the issuers occur. In addition, common stocks prices
may be particularly sensitive to rising interest rates, as the cost of
capital rises and borrowing costs increase.
o The Fund may invest a substantial portion of its assets in the
securities of issuers in any single industry or sector of the economy
if the companies which comprise the Value Line(R) #1 TimelinessTM
Ranked stocks result in such a focus. If the Fund is focused in an
industry or sector, it may present more risks than if it were broadly
diversified over numerous industries and sectors of the economy.
o The Fund will have exposure to stocks of companies with market
capitalization of less than $1 billion. Smaller companies present some
unique investment risks. These companies may have limited product
lines, as well as shorter operating histories, less experienced
management and more limited financial resources than larger companies.
Stocks of smaller companies may be less liquid than those of larger
companies and may experience greater price fluctuations than larger
companies. In addition, small-cap stocks may not be widely followed by
the investment community, which may result in reduced demand.
o The Fund will engage in portfolio trading as dictated by its investment
strategy, regardless of any income tax consequences to shareholders.
Although the Fund cannot accurately predict its annual portfolio
turnover rate, it is expected to be significantly higher than most
funds. A higher portfolio turnover rate results in correspondingly
greater brokerage commissions and other transactional expenses that are
borne by the Fund. High portfolio turnover may result in the
realization of net short-term capital gains by the Fund which, when
distributed to shareholders, will be taxable as ordinary income.
Page 14
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST VALUE LINE(R) 100 FUND
DECEMBER 31, 2003
o The Fund may invest a portion of its assets in the securities of issuers
domiciled in jurisdictions other than the United States and such stocks
may be denominated in currencies other than the U.S. dollar. Investments
in securities of non-U.S. issuers involve special risks not presented by
investments in securities of U.S. issuers, including: (i) there may be
less publicly available information about non-U.S. issuers or markets due
to less rigorous disclosure or accounting standards or regulatory
practices; (ii) many non-U.S. markets are smaller, less liquid and more
volatile than the U.S. market; (iii) potential adverse effects of
fluctuations in currency exchange rates or controls on the value of the
Fund's investments; (iv) the economies of non-U.S. countries may grow at
slower rates than expected or may experience a downturn or recession; (v)
the impact of economic, political, social or diplomatic events; (vi)
certain non-U.S. countries may impose restrictions on the ability of
non-U.S. issuers to make payments of principal and interest to investors
located in the U.S., due to blockage of foreign currency exchanges or
otherwise; and (vii) withholding and other non-U.S. taxes may decrease the
Fund's return.
Page 15
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REPORT OF INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF FIRST TRUST VALUE LINE(R)100 FUND:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of the First Trust Value Line(R) 100
Fund (the "Fund") as of December 31, 2003 and the related statement of
operations, statement of changes in net assets, and financial highlights for
the period from June 12, 2003 (commencement of operations) through December
31, 2003. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 2003,
by correspondence with the Fund's custodian and brokers. Where replies were
not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
the Fund as of December 31, 2003, and the results of its operations, changes
in net assets, and financial highlights for the period from June 12, 2003
(commencement of operations) through December 31, 2003 in conformity with
accounting principles generally accepted in the United States of America.
[GRAPHIC OMITTED]
DELOITTE + TOUCHE LLP
Chicago, Illinois
February 20, 2004
Page 16
--------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN - (UNAUDITED)
--------------------------------------------------------------------------------
If your Common Shares are registered directly with the Fund or if you hold
your Common Shares with a brokerage firm that participates in the Fund's
Dividend Reinvestment Plan, unless you elect to receive cash distributions,
all dividends, including any capital gain distributions, on your Common
Shares will be automatically reinvested by the Plan Agent, PFPC Inc., in
additional Common Shares under the Dividend Reinvestment Plan (the "Plan").
If you elect to receive cash distributions, you will receive all
distributions in cash paid by check mailed directly to you by PFPC Inc., as
dividend paying agent.
If you decide to participate in the Plan, the number of Common Shares you
will receive will be determined as follows:
(1) If the Common Shares are trading at or above net asset value at the time
of valuation, the Fund will issue new shares at a price equal to the greater of
(i) net asset value per Common Share on that date or (ii) 95% of the market
price on that date.
(2) If Common Shares are trading below net asset value at the time of
valuation, the Plan Agent will receive the dividend or distribution in cash and
will purchase Common Shares in the open market, on the American Stock Exchange
or elsewhere, for the participants' accounts. It is possible that the market
price for the Common Shares may increase before the Plan Agent has completed its
purchases. Therefore, the average purchase price per share paid by the Plan
Agent may exceed the market price at the time of valuation, resulting in the
purchase of fewer shares than if the dividend or distribution had been paid in
Common Shares issued by the Fund. The Plan Agent will use all dividends and
distributions received in cash to purchase Common Shares in the open market
within 30 days of the valuation date except where temporary curtailment or
suspension of purchases is necessary to comply with federal securities laws.
Interest will not be paid on any uninvested cash payments.
You may withdraw from the Plan at any time by giving written notice to the
Plan Agent, or by telephone in accordance with such reasonable requirements
as the Plan Agent and Fund may agree upon. If you withdraw or the Plan is
terminated, you will receive a certificate for each whole share in your
account under the Plan and you will receive a cash payment for any fraction
of a share in your account. If you wish, the Plan Agent will sell your shares
and send you the proceeds, minus brokerage commissions.
The Plan Agent maintains all shareholders' accounts in the Plan and gives
written confirmation of all transactions in the accounts, including
information you may need for tax records. Common Shares in your account will
be held by the Plan Agent in non-certificated form. The Plan Agent will
forward to each participant any proxy solicitation material and will vote any
shares so held only in accordance with proxies returned to the Fund. Any
proxy you receive will include all Common Shares you have received under the
Plan.
There is no brokerage charge for reinvestment of your dividends or
distributions in Common Shares. However, all participants will pay a pro rata
share of brokerage commissions incurred by the Plan Agent when it makes open
market purchases.
Automatically reinvesting dividends and distributions does not mean that you
do not have to pay income taxes due upon receiving dividends and
distributions. If you hold your Common Shares with a brokerage firm that does
not participate in the Plan, you will not be able to participate in the Plan
and any dividend reinvestment may be effected on different terms than those
described above. Consult your financial advisor for more information.
The Fund reserves the right to amend or terminate the Plan if in the judgment
of the Board of Trustees the change is warranted. There is no direct service
charge to participants in the Plan; however, the Fund reserves the right to
amend the Plan to include a service charge payable by the participants.
Additional information about the Plan may be obtained by writing PFPC Inc.,
301 Bellevue Parkway, Wilmington, Delaware 19809.
--------------------------------------------------------------------------------
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Fund uses to determine
how to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling (800)-988-5891 and (2) on the Securities and
Exchange Commission's website at http://www.sec.gov, when required to be
filed pursuant to applicable regulations.
Page 17
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MANAGEMENT
--------------------------------------------------------------------------------
FIRST TRUST VALUE LINE(R) 100 FUND
DECEMBER 31, 2003
BOARD OF TRUSTEES AND OFFICERS
(UNAUDITED)
Information pertaining to the Trustees and officers* of the Fund is set forth
below. The Fund's Statement of Additional Information (SAI) includes
additional information about the Trustees and is available without charge,
upon request, by calling (800) 621-1675.
NUMBER OF OTHER
PORTFOLIOS TRUSTEESHIPS/
NAME, DOB, ADDRESS AND TERM OF OFFICE AND PRINCIPAL OCCUPATION(S) IN FUND COMPLEX DIRECTORSHIPS
POSITION(S) WITH THE FUND LENGTH OF TIME SERVED DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
DISINTERESTED TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
Richard Erickson, Trustee o Indefinite term Physician, Sportsmed / 14 portfolios Trustee, First Trust Value
D.O.B. 04/51 327 o 6 months served Wheaton Orthopedics Line(R)Dividend Fund, First
Gundersen Drive Trust/Four Corners Senior
Carol Stream, IL 60188 Floating Rate Income Fund and
First Defined Portfolio Fund
LLC
Niel Nielson, Trustee o Indefinite term President, Covenant 14 portfolios Director of Good News
D.O.B. 03/54 o 6 months served College (June 2002 to Publishers; Trustee,
14049 Scenic Highway Present) Pastor (1997 to First Trust Value
Lookout Mt, GA 30750 June 2002), College Line(R)Dividend Fund,
Church in Wheaton First Trust/Four Corners
Senior Floating Rate
Income Fund, and First
Defined Portfolio Fund,
LLC
Thomas R. Kadlec o Indefinite term Vice President and Chief 3 portfolios Trustee, First Trust
D.O.B. 11/57 o 6 months served Financial Officer; ADM Value Line(R)Dividend
141 W. Jackson, Suite 1600A Investor Services, Inc. Fund, First Trust/Four
Chicago, IL 60604 (1990 to present) Corners Senior Floating
Rate Income Fund
David M. Oster o Indefinite term Trader and Market Maker, 3 portfolios Trustee, First Trust
D.O.B. 03/64 o 6 months served Chicago Options Exchange Value Line(R)Dividend
3550N Wildflower Lane Fund, First Trust/Four
West Chicago, IL 60185 Corners Senior Floating
Rate Income Fund
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen, Trustee o Indefinite term President, First Trust 14 portfolios Chairman of the Board of
President, Chairman of the o 6 months served Advisors and First Trust Directors, BondWave LLC
Board and CEO Portfolios; Chairman of
D.O.B. 09/55 the Board, BondWave LLC
1001 Warrenville Road
Suite 300
Lisle, IL 60532
Page 18
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MANAGEMENT - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST VALUE LINE(R) 100 FUND
DECEMBER 31, 2003
BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
(UNAUDITED)
NUMBER OF OTHER
PORTFOLIOS TRUSTEESHIPS/
NAME, DOB, ADDRESS AND TERM OF OFFICE AND PRINCIPAL OCCUPATION(S) IN FUND COMPLEX DIRECTORSHIPS
POSITION(S) WITH THE FUND LENGTH OF TIME SERVED DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
OFFICER(S) WHO ARE NOT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
Robert F. Carey, Vice o Indefinite term Senior Vice President, N/A N/A
President o 6 months served First Trust Advisors and
D.O.B. 07/63 First Trust Portfolios
1001 Warrenville Road
Suite 300
Lisle, IL 60532
Mark R. Bradley, o Indefinite term Chief Financial Officer, N/A N/A
Treasurer, Controller, o 6 months served Managing Director, First
Chief Financial Officer, Trust Advisors and First
Chief Accounting Officer Trust Portfolios; Chief
D.O.B. 11/57 Financial Officer,
1001 Warrenville Road BondWave LLC
Suite 300
Lisle, IL 60532
W. Scott Jardine, Secretary o Indefinite term General Counsel, First N/A N/A
D.O.B. 05/60 o 6 months served Trust Advisors and First
1001 Warrenville Road Trust Portfolios
Suite 300 Secretary, BondWave LLC
Lisle, IL 60532
Roger Testin o Indefinite term Senior Vice President, N/A N/A
Vice President o 6 months served First Trust Advisors;
D.O.B. 06/66 Analyst, Dolan Capital
1001 Warrenville Road Management; Investment
Suite 300 Supervisor, Zurich Kemper
Lisle, IL 60532 Investments
Susan M. Brix o Indefinite term Representative, First N/A N/A
Assistant Vice President o 6 months served Trust Portfolios;
D.O.B. 01/60 Assistant Portfolio
1001 Warrenville Road Manager, First Trust
Suite 300 Advisors
Lisle, IL 60532
----------
* The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy
making function.
Page 19
This Page Left Blank Intentionally.
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report,
has adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party.
(b) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party, and
that relates to any element of the code of ethics description.
(c) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party, that
relates to one or more of the items set forth in paragraph (b) of this item's
instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's
board of Trustees has determined that Thomas Kadlec is qualified to serve as an
audit committee financial expert serving on its audit committee and that he is
"independent," as defined by this Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) AUDIT FEES (REGISTRANT) -- The aggregate fees billed for the Fund's
last fiscal year (from inception to December 31, 2003) for professional services
rendered by the principal accountant for the audit of the registrant's annual
financial statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for such fiscal
year are $42,177.
(b) AUDIT-RELATED FEES (REGISTRANT) -- The aggregate fees billed in the
Fund's last fiscal year (from inception to December 31, 2003) for assurance and
related services by the principal accountant that are reasonably related to the
performance of the audit of the registrant's financial statements and are not
reported under paragraph (a) of this Item are $0.
AUDIT-RELATED FEES (INVESTMENT ADVISER) -- The aggregate fees
billed in the last fiscal year for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the adviser's registration statements and are not reported under paragraph
(a) of this Item are $20,400. The fees were for AIMR-PPS Verification services.
(c) TAX FEES (REGISTRANT) -- The aggregate fees billed in the last
fiscal year (from inception to December 31, 2003) for professional services
rendered by the principal accountant for tax compliance, tax advice, and tax
planning to the registrant are $5,000. The fees were for preparation of tax
returns and review of distribution requirements.
TAX FEES (INVESTMENT ADVISER) -- The aggregate fees billed in the
last fiscal year for professional services rendered by the principal accountant
for tax compliance, tax advice, and tax planning to the Fund's adviser are
$6,000. The fees are for tax return preparation.
(d) ALL OTHER FEES (REGISTRANT) -- The aggregate fees billed in the
last fiscal year (from inception to December 31, 2003) for products and services
provided by the principal accountant to the registrant, other than the services
reported in paragraphs (a) through (c) of this Item, are $0.
ALL OTHER FEES (INVESTMENT ADVISER) -- The aggregate fees billed in
the last fiscal year for products and services provided by the principal
accountant to the registrant's investment adviser, other than services reported
in paragraphs (a) through (c) of this Item, are $0.
(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.
Pursuant to its charter, the Audit Committee (the "COMMITTEE") is
responsible for the pre-approval of all audit services and permitted non-audit
services (including the fees and terms thereof) to be performed for the Fund by
its independent auditors. The Chairman of the Committee is authorized to give
such pre-approvals on behalf of the Committee and shall report any such
pre-approval to the full Committee.
The Committee is also responsible for the approval of the independent
auditor's engagements for non-audit services with the Fund's management (not
including a sub-adviser whose role is primarily portfolio management and is
sub-contracted or overseen by another investment adviser) and any entity
controlling, controlled by or under common control with the investment adviser
that provides ongoing services to the Fund, if the engagement relates directly
to the operations and financial reporting of the Fund, subject to the DE MINIMIS
exceptions for non-audit services described in Rule 2-01 of Regulation S-X. If
the independent auditor has provided non-audit services to the Fund's management
(other than any sub-adviser whose role is primarily portfolio management and is
sub-contracted with or overseen by another investment adviser) and any entity
controlling, controlled by or under common control with the investment adviser
that provides ongoing services to the Fund that were not pre-approved pursuant
to the DE MINIMIS exception, the Committee will consider whether the provision
of such non-audit services is compatible with the auditor's independence.
(e)(2) The percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) Not applicable.
(c) 100%.
(d) Not applicable.
The percentage of services described in each of paragraphs (b) through (d) of
this Item that were approved by the audit committee pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X are as follows:
(b) 100%.
(c) 100%.
(d) Not applicable.
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most recent
fiscal year that were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees was less than fifty
percent.
(g) The aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for the last
fiscal year of the registrant was $31,400.
(h) Not applicable. The audit committee pre-approved all non-audit
services rendered to the Registrant's investment adviser and any entity
controlling, controlled by or under common control with the adviser that
provides ongoing services to the registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
FIRST TRUST ADVISORS, L.P.
FIRST TRUST FUNDS
PROXY VOTING GUIDELINES
First Trust Advisors, L.P. (the "ADVISER") serves as investment adviser
providing discretionary investment advisory services for several open or
closed-end investment companies (the "FUNDS"). As part of these services, the
Adviser has full responsibility for proxy voting and related duties. In
fulfilling these duties, the Adviser and Funds have adopted the following
policies and procedures:
1. It is the Adviser's policy to seek to ensure that proxies for
securities held by a Fund are voted consistently and solely in the best economic
interests of the respective Fund.
2. The Adviser shall be responsible for the oversight of a Fund's
proxy voting process and shall assign a senior member of its staff to be
responsible for this oversight.
3. The Adviser has engaged the services of Institutional Shareholder
Services, Inc. ("ISS") to make recommendations to the Adviser on the voting of
proxies related to securities held by a Fund. ISS provides voting
recommendations based on established guidelines and practices. The Adviser has
adopted these ISS Proxy Voting Guidelines.
4. The Adviser shall review the ISS recommendations and generally will
vote the proxies in accordance with such recommendations. Notwithstanding the
foregoing, the Adviser may not vote in accordance with the ISS recommendations
if the Adviser believes that the specific ISS recommendation is not in the best
interests of the respective Fund.
5. If the Adviser manages the assets or pension fund of a company and
any of the Adviser's clients hold any securities in that company, the Adviser
will vote proxies relating to such company's securities in accordance with the
ISS recommendations to avoid any conflict of interest. In addition, if the
Adviser has actual knowledge of any other type of material conflict of interest
between itself and the respective Fund with respect to the voting of a proxy,
the Adviser shall vote the applicable proxy in accordance with the ISS
recommendations to avoid such conflict of interest.
6. If a Fund requests the Adviser to follow specific voting guidelines
or additional guidelines, the Adviser shall review the request and follow such
guidelines, unless the Adviser determines that it is unable to follow such
guidelines. In such case, the Adviser shall inform the Fund that it is not able
to follow the Fund's request.
7. The Adviser may have clients in addition to the Funds which have
provided the Adviser with discretionary authority to vote proxies on their
behalf. In such cases, the Adviser shall follow the same policies and
procedures.
Dated: September 15, 2003
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal
financial officers, or persons performing similar functions, have
concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940, as
amended (the "1940 ACT") (17 CFR 270.30a-3(c))) are effective, as of a
date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph, based on their evaluation of
these controls and procedures required by Rule 30a-3(b) under the 1940
Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal
control over financial reporting (as defined in Rule 30a-3(d) under the
1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's
last fiscal half-year (the registrant's second fiscal half-year in the
case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 11. EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the
subject of disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 are attached hereto.
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.
(registrant) FIRST TRUST VALUE LINE(R)100 FUND
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By (Signature and Title)* /S/ JAMES A. BOWEN
-------------------------------------------------------
James A. Bowen, Chief Executive Officer
(principal executive officer)
Date MARCH 5, 2004
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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 (Signature and Title)* /S/ JAMES A. BOWEN
-------------------------------------------------------
James A. Bowen, Chief Executive Officer
(principal executive officer)
Date MARCH 5, 2004
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By (Signature and Title)* /S/ MARK R. BRADLEY
-------------------------------------------------------
Mark R. Bradley, Chief Financial Officer
(principal financial officer)
Date MARCH 5, 2004
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* Print the name and title of each signing officer under his or her signature.