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, Suite 300
LISLE, IL 60532
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(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios L.P.
1001 Warrenville Road, Suite 300
LISLE, IL 60532
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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
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Date of reporting period: JUNE 30, 2006
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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, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
FIRST TRUST VALUE LINE(R) 100 FUND
SEMI-ANNUAL REPORT
FOR THE SIX MONTHS ENDED JUNE 30, 2006
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TABLE OF CONTENTS
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FIRST TRUST VALUE LINE(R) 100 FUND (FVL)
JUNE 30, 2006
Shareholder Letter .................................................. 1
Portfolio Commentary ................................................ 2
Portfolio Components ................................................ 4
Portfolio of Investments ............................................ 5
Statement of Assets and Liabilities ................................. 9
Statement of Operations ............................................. 10
Statements of Changes in Net Assets ................................. 11
Financial Highlights ................................................ 12
Notes to Financial Statements ....................................... 13
Additional Information .............................................. 16
Dividend Reinvestment Plan
Proxy Voting Policies and Procedures
Portfolio Holdings
Submission of Matters to a Vote of Shareholders~
By-Law Amendments
Advisory Agreement
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This Semi-Annual Report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933. Forward-looking statements
include statements regarding the goals, beliefs, plans or current expectations
of First Trust Advisors L.P. (the "Advisor") and its representatives, taking
into account the information currently available to them. Forward-looking
statements include all statements that do not relate solely to current or
historical fact. For example, forward-looking statements include the use of
words such as "anticipate," "estimate," "intend," "expect," "believe," "plan,"
"may," "should," "would" or other words that convey uncertainty of future events
or outcomes. Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the First Trust Value Line(R) 100
Fund's (the "Fund") actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by the forward-looking statements. When evaluating the information
included in this Semi-Annual Report, you are cautioned not to place undue
reliance on these forward-looking statements, which reflect the judgment of the
Advisor and its representatives only as of the date hereof. We undertake no
obligation to publicly revise or update these forward-looking statements to
reflect events and circumstances that arise after the date hereof.
HOW TO READ THIS REPORT
This report contains information that can help you evaluate your investment. It
includes details about 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, the Chief Investment Officer of the Advisor,
you may obtain an understanding of how the market environment affected the
Fund's performance. The statistical information that follows can help you
understand the Fund's performance compared to that of relevant market
benchmarks.
It is important to keep in mind that the opinions expressed by Mr. Bowen, Mr.
Carey and personnel of the Advisor 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 (FVL)
SEMI-ANNUAL REPORT
JUNE 30, 2006
Dear Shareholders:
We are pleased to present this semi-annual report of the First Trust Value
Line(R) 100 Fund (the "Fund") (AMEX: FVL), which includes a discussion of how
your Fund performed over the six-month reporting period ended June 30, 2006.
Domestic and global equity markets were generally strong at the beginning of
this reporting period, but became considerably more volatile beginning in May
and through the end of June. Inflation concerns continue to weigh on investor's
minds and were a factor contributing to the volatility. Regardless, the Fund
posted positive market value and net asset value total returns.
Over the short-term, markets change, and often times change quickly, as
evidenced by the performance over the past six months. History has shown that
stocks are prone to sudden declines in value. Sometimes stocks recover their
value quickly, while other times the decline lasts for quite a while. Because it
is virtually impossible to predict market declines with certainty, we believe a
better way to prosper is to put a well-considered, long-term strategy into place
such as that employed by the Fund.
The Fund's objective is to provide capital appreciation. It seeks to outperform
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 the Value Line(R)
Timeliness(TM) Ranking System. Every week, the Value Line(R) Timeliness(TM)
Ranking System screens millions of data items and, using a proprietary series of
calculations, ranks approximately 1,700 stocks for probable performance relative
to each other during the next six to twelve months. This system has a proven
record of historically outperforming the S&P 500 Index and we believe the
patient investor will be rewarded over the long-term.
First Trust Advisors L.P. ("First Trust"), the Fund's advisor, serves as
investment advisor or portfolio supervisor to investment portfolios with
approximately $25 billion in assets which it managed or supervised as of June
30, 2006. Robert Carey is the Chief Investment Officer for First Trust.
We appreciate the opportunity to assist you in achieving your financial goals
and thank you for your confidence.
Sincerely,
/S/ JAMES A. BOWEN
James A. Bowen
President of the First Trust Value Line(R) 100 Fund
August 11, 2006
Page 1
[PHOTO OMITTED]
ROBERT F. CAREY, CFA
SENIOR VICE PRESIDENT, CHIEF INVESTMENT OFFICER
FIRST TRUST ADVISORS L.P.
Mr. Carey is responsible for the overall management of research and analysis of
the First Trust product line. Mr. Carey has over 19 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 CFA Institute.
Mr. Carey has appeared as a guest on such programs as Bloomberg TV and CNBC and
has been quoted by several publications, including THE WALL STREET JOURNAL, THE
WALL STREET REPORTER, BLOOMBERG NEWS SERVICE, and REGISTERED REP.~
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PORTFOLIO COMMENTARY
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OVERVIEW
The First Trust Value Line(R) 100 Fund ("FVL" or the "Fund") posted a market
price total return of 3.8% for the semi-annual period ended June 30, 2006. Its
net asset value ("NAV") total return was 2.2%. Over the same semi-annual period,
the S&P 500 (large-cap) Index, S&P 400 (mid-cap) Index and S&P 600 (small-cap)
Index gained 2.7%, 4.2% and 7.7%, respectively. The Fund distributed $0.546 per
share in short-term capital gains and $0.280 per share in long-term capital
gains during the six-month period. FVL carried an adjusted beta of 1.05,
according to Bloomberg. Beta is a measurement of portfolio volatility and
indicates that the Fund's portfolio is slightly more volatile than the overall
market, which by definition has a beta of 1.0. FVL traded at a 7.5% discount to
its NAV on June 30, 2006.
Following is a review of the portfolio strategy and composition, investment
environment and performance results of FVL for the semi-annual period ended June
30, 2006.
INVESTMENT STRATEGY
The Fund adheres to a disciplined strategy of investing in the 100 common stocks
ranked #1 in the Value Line(R) Timeliness(TM) Ranking System. The Value Line(R)
Timeliness(TM) Ranking System was introduced in 1965. Each week, Value Line(R)
applies its Timeliness(TM) 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
Timeliness(TM) 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
Timeliness(TM). 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.
During the six-month period ended June 30, 2006, 4.5 stocks on average were
changed in a given week, essentially the same as in 2005. The Fund rebalances
its holdings on a quarterly basis so that each stock is equally weighted on the
rebalancing date.
DISTRIBUTIONS
On June 15, 2006, the Fund distributed capital gains of $0.826 per share, which
represented $0.546 per share in short-term capital gains and $0.280 per share in
long-term capital gains.
COMPOSITION OF THE FUND
The Fund had a mid-cap orientation to its portfolio holdings as of June 30,
2006, as 44 of the 100 holdings were classified as mid-cap stocks. These stocks
comprised approximately 44.7% of the portfolio. The breakdown of the 100 stocks
in the portfolio as of June 30, 2006, was as follows: large-cap stocks (36),
mid-cap stocks (44) and small-cap stocks (20). The breakdown of the 100 stocks
in the portfolio as of December 31, 2005, was as follows: large-cap stocks (34),
mid-cap stocks (35) and small-cap stocks (31). The average market capitalization
of the issuers of the stocks in the portfolio was approximately $10.89 billion,
down from $13.8 billion at the end of 2005. The Fund's beta of 1.05 at the end
of the period implies a risk level slightly higher than the overall market.
PERFORMANCE OF THE FUND
Based on market price, the Fund's total return was 3.8% for the six-month period
ended June 30, 2006. Its NAV total return was 2.2% for the same six-month
period. The Fund's returns compared to the S&P 500 Index return of 2.7%, over
the same period.
MARKET AND ECONOMIC OVERVIEW
Overall, stock markets performed in line or above long-term averages, with
particular strength in small and mid-cap stocks. The companies in the S&P 500
(large-cap), S&P 400 (mid-cap), and S&P 600 (small-cap) Indexes increased,
including dividends, with returns of 2.7%, 4.2% and 7.7%, respectively, for the
six-month period ended June 30, 2006. After lagging behind large-cap stocks in
the 1990s, small and mid-cap stocks have substantially outperformed their
large-cap counterparts so far this decade.
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY - (CONTINUED)
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Equity market conditions remained favorable throughout most of the period with
particular strength from January 2006 through early May 2006 as economic
conditions improved from the lower expectations brought about by severe weather
conditions in the Gulf Region. Gross Domestic Product in the second quarter of
2006 is forecast to have moderated somewhat, to 3.0%, according to economists
surveyed by Bloomberg, after expanding at a strong 5.6% rate in the first
quarter. However, towards the end of this period, starting in early May 2006,
stock markets began to experience meaningful weakness, particularly among the
shares of those companies that had experienced the greatest increase in price
leading up to that point. May 2006 saw the S&P small and mid-cap stock Indexes
decline by approximately 4.5%, considerably higher than the 2.5% decline for the
S&P 500 large-cap Index.
The Federal Open Market Committee raised interest rates steadily during the
period from 3.25% to 5.25% due to increased inflation expectations. The
inflation rate as measured by the Consumer Price Index did increase from 2.5% to
4.3%. Most of the increase in interest rates was likely due to the strong
recovery in capacity utilization and sharply higher commodity prices, as
evidenced by the price of gold.
Typically, higher interest rates put pressure on equity valuations, and so the
positive performance of equities, in the six month period ended June 30, 2006,
is notable and can most likely be explained by strong earnings performance. The
percentage of companies in the S&P 500 surpassing consensus earnings estimates
has exceeded 60% in every quarter during the year. (As of this writing, 109 of
the 165 S&P 500 companies to report second quarter 2006 earnings thus far have
surpassed estimates according to Bloomberg/Thomson Financial.)
Page 3
FIRST TRUST VALUE LINE(R) 100 FUND
PORTFOLIO COMPONENTS+
JUNE 30, 2006 (UNAUDITED)
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS
Specialty Retail 9.7%
Electronic Equipment & Instruments 8.0%
Semiconductors & Semiconductor Equipment 8.0%
Capital Markets 6.0%
Software. 5.3%
Metals & Mining 5.2%
IT Services 4.9%
Machinery 4.2%
Energy Equipment & Services 4.1%
Commercial Services & Supplies 3.9%
Media 3.9%
Oil, Gas & Consumable Fuels 3.9%
Electrical Equipment 3.0%
Road & Rail 3.0%
Computers & Peripherals 2.8%
Internet Software & Services 2.1%
Textiles, Apparel & Luxury Goods 2.0%
Diversified Telecommunication Services 1.9%
Multiline Retail 1.9%
Marine 1.1%
Trading Companies & Distributors 1.1%
Aerospace/Defense 1.0%
Air Freight & Logistics 1.0%
Automobiles 1.0%
Beverages 1.0%
Chemicals 1.0%
Commercial Banks 1.0%
Communications Equipment 1.0%
Construction & Engineering 1.0%
Diversified Financial Services 1.0%
Food Products 1.0%
Household Durables 1.0%
Industrial Conglomerates 1.0%
Life Sciences Tools & Services 1.0%
Pharmaceuticals 1.0%
+ Percentages are based on total investments. Please note that the percentages
shown on the Portfolio of Investments are based on net assets.
Page 4 See Notes to Financial Statements.
FIRST TRUST VALUE LINE(R) 100 FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2006 (UNAUDITED)
MARKET
SHARES VALUE
------------ ------------
COMMON STOCKS - 99.4%
AEROSPACE & DEFENSE - 1.0%
70,180 Honeywell International Inc. ................. $ 2,828,254
---------------
AIR FREIGHT & LOGISTICS - 1.0%
52,176 Expeditors International of Washington, Inc. . 2,922,378
---------------
AUTOMOBILES - 1.0%
59,647 Thor Industries, Inc. ........................ 2,889,897
---------------
BEVERAGES - 1.0%
15,491 Hansen Natural Corp.* ........................ 2,949,022
---------------
CAPITAL MARKETS - 5.9%
20,304 Bear Stearns Companies (The), Inc. ........... 2,844,184
181,284 Charles Schwab (The) Corp. ................... 2,896,918
128,778 E*TRADE Financial Corp.* ..................... 2,938,714
44,923 Morgan Stanley ............................... 2,839,583
60,388 SEI Investments Company ...................... 2,951,765
48,334 State Street Corp. ........................... 2,807,722
---------------
17,278,886
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CHEMICALS - 1.0%
80,876 Arch Chemicals, Inc. ......................... 2,915,580
---------------
COMMERCIAL BANKS - 1.0%
50,798 Hancock Holding Company ...................... 2,844,688
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COMMERCIAL SERVICES & SUPPLIES - 3.9%
99,774 Kelly Services, Inc., Class A ................ 2,710,860
67,136 Monster Worldwide Inc.* ...................... 2,864,022
61,611 Volt Information Sciences, Inc.* ............. 2,871,073
78,360 Waste Management, Inc. ....................... 2,811,557
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11,257,512
---------------
COMMUNICATIONS EQUIPMENT - 1.0%
95,452 CommScope, Inc.* ............................. 2,999,102
---------------
COMPUTERS & PERIPHERALS - 2.8%
87,245 Hewlett-Packard Company ...................... 2,763,922
148,845 Palm, Inc.* .................................. 2,396,404
149,246 Western Digital Corp.* ....................... 2,956,563
---------------
8,116,889
---------------
CONSTRUCTION & ENGINEERING - 1.0%
175,096 Quanta Services, Inc.* ....................... 3,034,414
---------------
DIVERSIFIED FINANCIAL SERVICES - 1.0%
5,822 Chicago Mercantile Exchange Holdings Inc. .... 2,859,475
---------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 1.9%
100,240 AT&T Inc. .................................... 2,795,694
350,191 Qwest Communications International Inc.* ..... 2,833,045
---------------
5,628,739
---------------
See Notes to Financial Statements. Page 5
FIRST TRUST VALUE LINE(R) 100 FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
JUNE 30, 2006 (UNAUDITED)
MARKET
SHARES VALUE
------------ ------------
COMMON STOCKS - CONTINUED
ELECTRICAL EQUIPMENT - 3.0%
88,697 Belden CDT Inc. .............................. $ 2,931,436
85,626 General Cable Corp.* ......................... 2,996,910
55,623 Thomas & Betts Corp.* ........................ 2,853,460
---------------
8,781,806
---------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 7.9%
180,457 AVX Corp. .................................... 2,849,416
119,449 Benchmark Electronics, Inc.* ................. 2,881,110
48,275 Itron, Inc.* ................................. 2,860,776
316,573 KEMET Corp.* ................................. 2,918,803
84,093 Molex, Inc. .................................. 2,823,002
174,215 Newport Corp.* ............................... 2,808,346
84,246 Plexus Corp.* ................................ 2,882,056
127,886 Technitrol, Inc. ............................. 2,960,561
---------------
22,984,070
---------------
ENERGY EQUIPMENT & SERVICES - 4.0%
173,234 Global Industries, Ltd.* ..................... 2,893,008
45,122 Schlumberger Ltd. ............................ 2,937,893
99,426 TETRA Technologies, Inc.* .................... 3,011,614
57,877 Weatherford International Ltd.* .............. 2,871,857
---------------
11,714,372
---------------
FOOD PRODUCTS - 1.0%
68,109 Archer-Daniels-Midland Company ............... 2,811,539
---------------
HOUSEHOLD DURABLES - 1.0%
27,025 Garmin Ltd. .................................. 2,849,516
---------------
INDUSTRIAL CONGLOMERATES - 1.0%
63,141 McDermott International, Inc.* ............... 2,871,021
---------------
INTERNET SOFTWARE & SERVICES - 2.0%
82,416 Akamai Technologies, Inc.* ................... 2,982,635
300,435 webMethods, Inc.* ............................ 2,965,293
---------------
5,947,928
---------------
IT SERVICES - 4.9%
58,365 CheckFree Corp.* ............................. 2,892,569
43,126 Cognizant Technology
Solutions Corp., Class A* .................... 2,905,399
201,017 Gartner, Inc.* ............................... 2,854,441
189,312 MPS Group, Inc.* ............................. 2,851,039
70,917 Paychex, Inc. ................................ 2,764,345
---------------
14,267,793
---------------
LIFE SCIENCES TOOLS & SERVICES - 1.0%
96,955 Illumina, Inc.* .............................. 2,875,685
---------------
Page 6 See Notes to Financial Statements.
FIRST TRUST VALUE LINE(R) 100 FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
JUNE 30, 2006 (UNAUDITED)
MARKET
SHARES VALUE
------------ ------------
COMMON STOCKS - CONTINUED
MACHINERY - 4.1%
80,524 Gardner Denver Inc.* ......................... $ 3,100,174
56,187 Joy Global, Inc. ............................. 2,926,781
69,703 Manitowoc Company (The), Inc. ................ 3,101,783
29,413 Terex Corp.* ................................. 2,903,063
---------------
12,031,801
---------------
MARINE - 1.1%
77,809 Kirby Corp.* ................................. 3,073,455
---------------
MEDIA - 3.8%
168,903 DIRECTV Group (The), Inc.* ................... 2,786,899
138,224 News Corp., Class B .......................... 2,789,360
71,855 Thompson (The) Corp. ......................... 2,767,855
93,740 Walt Disney (The) Company .................... 2,812,200
---------------
11,156,314
---------------
METALS & MINING - 5.2%
93,582 Agnico-Eagle Mines Ltd. ...................... 3,095,693
61,121 Alcan Inc. ................................... 2,869,020
111,424 AMCOL International Corp. .................... 2,936,022
26,058 Carpenter Technology Corp. ................... 3,009,699
37,212 Reliance Steel & Aluminum Company ............ 3,086,735
---------------
14,997,169
---------------
MULTILINE RETAIL - 1.9%
87,382 Dillard's Inc., Class A ...................... 2,783,117
48,266 Kohl's Corp.* ................................ 2,853,486
---------------
5,636,603
---------------
OIL, GAS & CONSUMABLE FUELS - 3.9%
68,378 Arch Coal, Inc. .............................. 2,897,176
184,094 El Paso Corp. ................................ 2,761,410
103,243 Norsk Hydro ASA, Sponsored ADR ............... 2,757,621
52,913 Peabody Energy Corp. ......................... 2,949,900
---------------
11,366,107
---------------
PHARMACEUTICALS - 1.0%
124,551 Biovail Corp. ................................ 2,915,739
---------------
ROAD & RAIL - 3.0%
40,718 CSX Corp. .................................... 2,868,176
82,221 Genesee & Wyoming Inc., Class A* ............. 2,916,379
87,798 Swift Transportation Company, Inc.* .......... 2,788,464
---------------
8,573,019
---------------
SEMICONDUCTORS &
SEMICONDUCTOR EQUIPMENT - 8.0%
306,757 Amkor Technology, Inc.* ...................... 2,901,921
372,314 Cirrus Logic, Inc.* .......................... 3,030,636
63,055 Cymer, Inc.* ................................. 2,929,535
209,215 Integrated Device Technology, Inc.* .......... 2,966,669
120,551 Intersil Corp., Class A ...................... 2,802,811
See Notes to Financial Statements. Page 7
FIRST TRUST VALUE LINE(R) 100 FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
JUNE 30, 2006 (UNAUDITED)
MARKET
SHARES VALUE
------------ ------------
COMMON STOCKS - CONTINUED
SEMICONDUCTORS &
SEMICONDUCTOR EQUIPMENT - (CONTINUED)
311,237 LSI Logic Corp.* ............................. $ 2,785,571
137,197 NVIDIA Corp.* ................................ 2,920,924
121,332 Veeco Instruments Inc.* ...................... 2,892,555
---------------
23,230,622
---------------
SOFTWARE - 5.3%
77,505 Amdocs Ltd.* ................................. 2,836,683
120,488 BMC Software, Inc.* .......................... 2,879,663
72,249 Citrix Systems, Inc.* ........................ 2,900,075
143,079 RSA Security Inc.* ........................... 3,890,318
69,285 Transaction Systems Architects, Inc.* ........ 2,888,492
---------------
15,395,231
---------------
SPECIALTY RETAIL - 9.7%
51,354 Best Buy Company, Inc. ....................... 2,816,253
96,516 Christopher & Banks Corp. .................... 2,798,964
102,366 Circuit City Stores, Inc. .................... 2,786,402
112,923 Dress Barn (The), Inc.* ...................... 2,862,598
50,045 Group 1 Automotive, Inc. ..................... 2,819,535
68,974 Guess?, Inc.* ................................ 2,879,664
80,876 Gymboree (The) Corp.* ........................ 2,811,250
76,710 Home Depot (The), Inc. ....................... 2,745,451
123,276 Select Comfort Corp.* ........................ 2,831,650
71,099 Tween Brands, Inc.* .......................... 2,729,491
---------------
28,081,258
---------------
TEXTILES, APPAREL & LUXURY GOODS - 2.0%
117,623 Skechers U.S.A., Inc., Class A* .............. 2,835,891
98,367 Steven Madden, Ltd. .......................... 2,913,630
---------------
5,749,521
---------------
TRADING COMPANIES & DISTRIBUTORS - 1.1%
96,349 United Rentals, Inc.* ........................ 3,081,241
---------------
TOTAL COMMON STOCKS .......................... 288,916,646
---------------
(Cost $271,125,601)
TOTAL INVESTMENTS - 99.4% .................... 288,916,646
(Cost $271,125,601)**
NET OTHER ASSETS & LIABILITIES - 0.6% ........ 1,619,433
---------------
NET ASSETS - 100.0% .......................... $ 290,536,079
===============
--------------------------------
* Non-income producing security.
** Aggregate cost for federal income tax and financial reporting purposes.
ADR American Depository Receipt
FIRST TRUST VALUE LINE(R) 100 FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2006 (UNAUDITED)
ASSETS:
Investments, at value
(Cost $271,125,601) .................................................................. $288,916,646
Cash .................................................................................... 746,556
Prepaid expenses ........................................................................ 9,523
Receivables:
Investment securities sold ........................................................... 27,516,733
Dividends ............................................................................ 91,904
-------------
Total Assets ....................................................................... 317,281,362
-------------
LIABILITIES:
Payables:
Investment securities purchased ...................................................... 26,304,189
Licensing fee ........................................................................ 158,448
Investment advisory fees ............................................................. 149,612
Printing fees ........................................................................ 80,331
Audit and legal fees ................................................................. 26,164
Administrative fees .................................................................. 21,702
Custodian fees ....................................................................... 3,341
Accrued expenses ........................................................................ 1,496
-------------
Total Liabilities .................................................................. 26,745,283
-------------
NET ASSETS .............................................................................. $290,536,079
-------------
NET ASSETS CONSIST OF:
Accumulated net investment loss ......................................................... $ (806,461)
Accumulated net realized gain on investments sold ....................................... 23,525,543
Net unrealized appreciation of investments .............................................. 17,791,045
Par value ............................................................................... 174,900
Paid-in capital ......................................................................... 249,851,052
-------------
Total Net Assets ................................................................... $290,536,079
=============
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share) .................... $ 16.61
=============
Number of Common Shares outstanding (unlimited number of Common Shares has been authorized) 17,490,000
=============
See Notes to Financial Statements. Page 9
FIRST TRUST VALUE LINE(R) 100 FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2006 (UNAUDITED)
INVESTMENT INCOME:
Dividends ............................................................................... $ 698,026
-----------
Total investment income ............................................................ 698,026
-----------
EXPENSES:
Investment advisory fees ................................................................ 1,018,489
Licensing fee ........................................................................... 158,448
Administration fees ..................................................................... 145,188
Printing fees ........................................................................... 51,550
Audit and legal fees .................................................................... 50,866
Custodian fees .......................................................................... 24,997
Trustees' fees and expenses ............................................................. 18,613
Other ................................................................................... 36,336
-----------
Total expenses ..................................................................... 1,504,487
-----------
NET INVESTMENT LOSS ..................................................................... (806,461)
-----------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain on investments during the period ...................................... 24,549,580
Net change in unrealized depreciation of investmentsduring the period ................... (18,809,062)
-----------
Net realized and unrealized gain on investments ......................................... 5,740,518
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................... $ 4,934,057
===========
Page 10 See Notes to Financial Statements.
FIRST TRUST VALUE LINE(R) 100 FUND
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR
06/30/2006 ENDED
(UNAUDITED) 12/31/2005
------------ -------------
OPERATIONS:
Net investment loss.............................................................. $ (806,461) $ (1,352,309)
Net realized gain on investments during the period............................... 24,549,580 56,759,952
Net change in unrealized depreciation of investments during the period........... (18,809,062) (21,808,712)
------------ -------------
Net increase in net assets resulting from operations............................. 4,934,057 33,598,931
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains............................................................... (14,446,740) (49,181,880)
------------ -------------
Total distributions to shareholders.............................................. (14,446,740) (49,181,880)
------------ -------------
Net decrease in net assets....................................................... (9,512,683) (15,582,949)
NET ASSETS:
Beginning of period.............................................................. 300,048,762 315,631,711
------------ -------------
End of period.................................................................... $290,536,079 $ 300,048,762
------------ -------------
Undistributed net investment income/(accumulated net investment loss)
at end of period $ (806,461) $ --
============ =============
See Notes to Financial Statements. Page 11
FIRST TRUST VALUE LINE(R) 100 FUND
FINANCIAL HIGHLIGHTS
FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR PERIOD
06/30/2006 ENDED ENDED ENDED
(UNAUDITED) 12/31/2005 12/31/2004 12/31/2003*
----------- ----------- ----------- -----------
Net asset value, beginning of period ................... $ 17.16 $ 18.05 $ 16.61 $ 14.33
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss .................................... (0.05) (0.08) (0.09) (0.06)
Net realized and unrealized gain on investments ........ 0.33 2.00 2.19 2.37
----------- ----------- ----------- -----------
Total from investment operations ....................... 0.28 1.92 2.10 2.31
----------- ----------- ----------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net realized gains ..................................... (0.83) (2.81) (0.66) --
----------- ----------- ----------- -----------
Total from distributions ............................... (0.83) (2.81) (0.66) --
----------- ----------- ----------- -----------
Common Shares offering costs charged to paid-in capital -- -- 0.00# (0.03)
----------- ----------- ----------- -----------
Net asset value, end of period ......................... $ 16.61 $ 17.16 $ 18.05 $ 16.61
=========== =========== =========== ===========
Market value, end of period ............................ $ 15.36 $ 15.62 $ 17.10 $ 16.49
=========== =========== =========== ===========
TOTAL RETURN BASED ON NET ASSET VALUE (A)+ ............. 2.16% 11.86% 13.05% 15.91%
=========== =========== =========== ===========
TOTAL RETURN BASED ON MARKET VALUE (B)+ ................ 3.78% 7.48% 7.88% 9.93%
=========== =========== =========== ===========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ................... $ 290,536 $ 300,049 $ 315,632 $ 290,464
Ratio of total expenses to average net assets .......... 0.96% ** 0.95% 0.97% 1.02%**
Ratio of net investment loss to average net assets ..... (0.51)%** (0.43)% (0.52)% (0.75)%**
Portfolio turnover rate ................................ 117% 240% 220% 144%
--------------------------------------------------
* The Fund commenced operations on June 12, 2003.
** Annualized.
# Amount represents less than $0.01 per share.
(a) Total return based on net asset value is the combination of reinvested
dividend distributions and reinvested capital gains distributions, if any,
at prices obtained by the Dividend Reinvestment Plan, and changes in net
asset value per share and does not reflect sales load.
(b) Total return based on market value is the combination of reinvested
dividend distributions and reinvested capital gains distributions, if any,
at prices obtained by the Dividend Reinvestment Plan, and changes in Common
Share market price per share, all based on Common Share market price per
share.
+ Total return is not annualized for periods less than one year.
Page 12 See Notes to Financial Statements.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST VALUE LINE(R) 100 FUNDJUNE 30, 2006 (UNAUDITED)
1. FUND DESCRIPTION
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 Fund trades under the ticker symbol FVL on the American Stock Exchange. 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) Timeliness(TM)
Ranking System. There can be no assurance that the Fund's investment objective
will be achieved. The Value Line(R) Timeliness(TM) Ranking System was introduced
in its present form in 1965. Each week, Value Line(R) Publishing, Inc. ("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 six
to twelve months. At any one time, only 100 stocks are ranked #1 in the Value
Line(R) Timeliness(TM) Ranking System. The Fund invests 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) Timeliness(TM) Ranking System. Each week, the Fund will make
portfolio adjustments to match the changes made to the #1 ranked stocks by Value
Line(R). The Fund also rebalances its holdings on a quarterly basis so that each
stock is equally weighted on the rebalancing date.
2. SIGNIFICANT ACCOUNTING POLICIES
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.
A. PORTFOLIO VALUATION:
The Fund determines the net asset value ("NAV") of its shares daily, as of the
close of regular session trading on the New York Stock Exchange ("NYSE"),
normally 4:00 p.m.
Eastern time, on each day the NYSE is open for trading. The NAV 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.
The Fund's investments are valued at market value or, in the absence of market
value with respect to any portfolio securities, at fair value according to
procedures adopted by the Fund's Board of Trustees.
Portfolio securities listed on any exchange other than the NASDAQ National
Market ("NASDAQ") are valued 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 asked prices on such day.
Securities traded on the NASDAQ are valued at the NASDAQ Official Closing Price
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. Portfolio securities
traded in the over-the-counter market, but excluding securities trading on the
NASDAQ, are valued at the closing bid prices. Short-term investments that mature
in less than 60 days are valued at amortized cost.
Foreign securities traded outside the United States are generally valued as of
the time their trading is complete, which is usually different from the close of
the NYSE.
Occasionally, events affecting the value of such securities may occur between
such times and the close of the NYSE that will not always be reflected in such
securities value.
If events materially affecting the value of such securities occur during such
period, these securities will be valued at their fair value according to
procedures adopted by the Fund's Board of Trustees. All securities and other
assets of the Fund denominated in foreign currencies will be converted to U.S.
dollars using exchange rates in effect at the time of valuation.
B. 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.
Page 13
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST VALUE LINE(R) 100 FUND
JUNE 30, 2006 (UNAUDITED)
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 on such securities 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.
C. 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. 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.
D. 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.
Distributions from income and capital gains 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 tax character
of distributions paid during the fiscal year ended December 31, 2005 was as
follows:
Distributions paid from:
2005
Ordinary Income................................ $31,551,960
Long-Term Capital Gains........................ $17,629,920
As of December 31, 2005, the components of distributable earnings on a tax basis
were as follows:
Undistributed Ordinary Income.................. $ 9,545,640
Undistributable Long-Term Capital Gains........ $ 4,903,922
Net Unrealized Appreciation.................... $35,573,248
E. INCOME TAXES:
The Fund intends to continue to qualify as a regulated investment company by
complying with the requirements under Subchapter M of the Internal Revenue Code
of 1986, as amended, and by distributing substantially all of its net investment
income and net realized gains to shareholders.
Accordingly, no provision has been made for federal or state income taxes.
F. EXPENSES:
The Fund pays all expenses directly related to its operations. First Trust
Advisors L.P. ("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) Timeliness(TM) 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. receives an
annual fee, payable on a quarterly basis, equal to 0.10% of the Fund's average
gross daily assets during such calendar quarter. This license fee is paid by the
Fund to First Trust, which in turn pays Value Line(R) Publishing, Inc. The terms
of the license agreement provide that it will be automatically renewed for
successive one year terms unless either party elects not to renew the agreement.
G. NEW ACCOUNTING PRONOUNCEMENT:
In July 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48 (FIN 48), "Accounting for Uncertainty in Income Taxes."
This pronouncement provides guidance on the recognition, measurement,
classification, and disclosures related to uncertain tax positions, along with
any related interest and penalties. FIN 48 is effective for fiscal years
beginning after December 15, 2006.
The impact from the adoption of FIN 48 is being evaluated, but is not
anticipated to have a material effect on the financial statements.
Page 14
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST VALUE LINE(R) 100 FUND
JUNE 30, 2006 (UNAUDITED)
3. INVESTMENT ADVISORY FEE AND OTHER AFFILIATED TRANSACTIONS
First Trust 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, managing the
Fund's business affairs and certain administrative services necessary for the
management of the Fund. For these 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.
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, also an indirect, majority-owned subsidiary of The PNC
Financial Services Group, Inc., serves as the Fund's Custodian in accordance
with certain fee arrangements.
The Fund pays each Trustee who is not an officer or employee of First Trust or
any of its affiliates an annual retainer of $10,000, which includes compensation
for all board and committee meetings. Trustees are also reimbursed for travel
and out-of-pocket expenses in connection with all meetings.
Effective June 12, 2006, the Board of Trustees unanimously appointed Robert F.
Keith to the Board of Trustees and as a member to the Fund's Audit Committee,
Valuation Committee and Nominating and Governance Committee.
4. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of investment securities, excluding
short-term investments, for the six months ended June 30, 2006, were
$368,491,125 and $384,151,857, respectively.
As of June 30, 2006, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was $27,263,330,
and the aggregate gross unrealized depreciation for all securities in which
there was an excess of tax cost over value was $9,472,285.
Page 15
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
FIRST TRUST VALUE LINE(R) 100 FUND
JUNE 30, 2006 (UNAUDITED)
DIVIDEND REINVESTMENT PLAN
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 (the "Plan"), unless you elect, by written notice to the Fund,
to receive cash distributions, all dividends, including any capital gain
distributions, on your Common Shares will be automatically reinvested by PFPC
Inc. (the "Plan Agent"), in additional Common Shares under 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 Common Shares are trading at or above net asset value ("NAV") at
the time of valuation, the Fund will issue new shares at a price equal
to the greater of (i) NAV per Common Share on that date or (ii) 95% of
the market price on that date.
(2) If Common Shares are trading below NAV 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 elect to opt-out of or withdraw from the Plan at any time by giving
written notice to the Plan Agent, or by telephone at (800) 331-1710, 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 Common 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 prox 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.
Capital gains and income are realized, although cash is not received by you.
Consult your financial advisor for more information.
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.
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 and information on how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, by calling (800) 988-5891; (2) on
the Fund's website located at http://www.ftportfolios.com; and (3) on the
Securities and Exchange Commission's website at http://www.sec.gov.
Page 16
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST VALUE LINE(R) 100 FUND
JUNE 30, 2006 (UNAUDITED)
PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available (1) by calling (800)
988-5891; (2) on the Fund's website located at http://www.ftportfolios.com; (3)
on the SEC's website at http://www.sec.gov; and (4) for review and copying at
the SEC's Public Reference Room ("PRR") in Washington, DC. Information regarding
the operation of the PRR may be obtained by calling 1-800-SEC-0330.
SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
The Joint Annual Meeting of Shareholders of Energy Income and Growth Fund, First
Trust Value Line(R) 100 Fund, First Trust/Fiduciary Asset Management Covered
Call Fund, First Trust Strategic High Income Fund, First Trust/FIDAC Mortgage
Income Fund and First Trust/Aberdeen Global Opportunity Income Fund was held on
April 17, 2006. At the Annual Meeting, the Fund's Board of Trustees, consisting
of James A. Bowen, Niel B. Nielson, Thomas R. Kadlec and Richard E. Erickson,
were elected to serve an additional one-year term. The number of votes cast for
James A. Bowen was 14,036,930, the number of votes withheld was 154,083 and the
number of abstentions was 3,298,987. The number of votes cast for Niel B.
Nielson was 14,025,512, the number of votes withheld was 165,501 and the number
of abstentions was 3,298,987. The number of votes cast for Richard E. Erickson
was 14,035,263, the number of votes withheld was 155,750 and the number of
abstentions was 3,298,987. The number of votes cast for Thomas R. Kadlec was
14,035,958, the number of votes withheld was 155,055 and the number of
abstentions was 3,298,987.
BY-LAW AMENDMENTS
On June 12, 2006, the Board of Trustees of the Fund approved certain changes to
the By-Laws of the Fund which may have the effect of delaying or preventing a
change in control of the Fund.
To receive a copy of the revised By-Laws, investors may call the Fund at (800)
988-5891.
ADVISORY AGREEMENT
BOARD CONSIDERATIONS REGARDING CONTINUATION OF ADVISORY CONTRACT
The Trustees unanimously approved the continuation of the Investment Advisory
Agreement (the "AGREEMENT") between First Trust Advisors L.P.
("FIRST TRUST") and First Trust Value Line(R) 100 Fund (the "FUND") at a meeting
held on March 13, 2006.
The Board of Trustees determined that the Agreement is in the best interests of
the Fund and that the compensation arrangement set forth in the Agreement is
fair and reasonable in light of the nature, extent and quality of the services
provided by First Trust and such other matters as the Trustees considered to be
relevant in the exercise of their reasonable business judgment.
To reach this determination, the Trustees considered their duties under the
Investment Company Act of 1940, as amended (the "1940 ACT") as well as under the
general principles of state law in reviewing and approving advisory contracts;
the requirements of the 1940 Act in such matters; the fiduciary duty of
investment advisers with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Trustees in
voting on such agreements. The Independent Trustees received advice from
independent legal counsel. The Trustees also applied their business judgment to
determine whether the arrangement between the Fund and First Trust was a
reasonable business arrangement from the Fund's perspective as well as from the
perspective of its shareholders. In reviewing such arrangement, the Board of
Trustees considered factors such as the nature, quality and extent of services
provided by First Trust under the Agreement and the fairness of the fee charged,
whether the fee level reflects any economies of scale, and any profitability
realized by First Trust under the Agreement.
The Trustees considered the nature, quality and extent of services provided by
First Trust, including the experience and skills of the personnel primarily
responsible for providing services to the Fund. The Board noted the compliance
program that had been developed by First Trust. In light of these considerations
and their overall familiarity with First Trust, the Trustees concluded that the
nature, quality and extent of services provided by First Trust to the Fund have
been and are expected to remain satisfactory.
The Trustees reviewed data prepared by Lipper Inc. ("LIPPER"), an independent
source, showing the advisory fee and expense ratio of the Fund compared to those
of a peer group of similar closed-end non-leveraged funds. The Trustees also
considered the Fund's advisory fee and expense ratio as compared to a second
peer group of similar funds, including one leveraged fund, as selected by First
Trust using data compiled by Lipper. The Trustees noted that the Fund's advisory
fee and expense ratio were either at or below the median of both the Lipper peer
group and the First Trust-selected peer group. The Trustees also considered the
advisory fees paid to First Trust by other funds
Page 17
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST VALUE LINE(R) 100 FUND
JUNE 30, 2006 (UNAUDITED)
DIVIDEND REINVESTMENT PLAN
with investment objectives and policies similar to the Fund's, noting that those
fees generally were similar, except for those funds for which First Trust served
as sub-adviser, for which the annual fee was lower. The Trustees noted that
First Trust told them that the nature of the services provided to those clients
may not be comparable to those provided to the Fund. The Trustees also
considered the Fund's performance for the one year, two year and since-inception
periods ended December 31, 2005 as compared to that of a relevant benchmark and
other closed-end funds in the performance universes selected by both Lipper and
First Trust. In addition, the Trustees considered the market price and net asset
value performance of the Fund since inception, and compared the Fund's discount
as of December 31, 2005 to the average and median discount of a peer group
selected by an independent source, noting that the Fund's discount was
indicative of the asset class. The Trustees noted the strong performance of the
Fund over all periods as compared to both performance universes and concluded
that the Fund's performance was reasonable. On the basis of the information
provided, the Trustees concluded that the Fund's advisory fee was reasonable and
appropriate in light of the nature, quality and extent of services provided by
First Trust.
The Trustees noted that First Trust has continued to invest in personnel and
infrastructure but had not identified any economies of scale realized by the
Fund and had indicated that, because the Fund is a closed-end fund that is not
issuing more shares other than pursuant to its dividend reinvestment plan, First
Trust believed that any discussion of economies of scale was not meaningful. The
Trustees concluded that the advisory fee reflects an appropriate level of
sharing of any economies of scale. The Trustees also considered the costs of the
services provided and profits realized by First Trust from its relationship with
the Fund for the twelve months ended December 31, 2005, as set forth in the
materials provided to the Board. The Trustees noted the inherent limitations in
the profitability analysis, and concluded that First Trust's profitability
appeared to be not unreasonable in light of the services provided to the Fund.
In addition, the Trustees considered and discussed any ancillary benefits
derived by First Trust from its relationship with the Fund and noted that First
Trust receives no brokerage or soft dollars from the Fund and therefore the
typical fall out benefits are not present. The Trustees concluded that any other
fall out benefits received by First Trust or its affiliates would appear to be
attenuated.
Based on all of the factors considered, the Trustees concluded that it was in
the best interests of the Fund to approve the continuation of the Agreement,
including the fees to be charged for services thereunder. No single factor was
determinative in the Board's analysis.
Page 18
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(A) Not applicable.
(B) There have been no changes, as of the date of filing, in any of the
Portfolio Managers in response to paragraph (a)(1) of this item in the
Registrant's most recent annual report on Form N-CSR.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 11. 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 second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
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
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James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date AUGUST 23, 2006
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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
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James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date AUGUST 23, 2006
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By (Signature and Title)* /S/ MARK R. BRADLEY
-------------------------------------------------------
Mark R. Bradley, Treasurer, Controller, Chief Financial
Officer and Chief Accounting Officer
(principal financial officer)
Date AUGUST 23, 2006
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* Print the name and title of each signing officer under his or her signature.