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: 811-03599
Name of Registrant: The Royce Fund
Address of Registrant: 1414 Avenue of the Americas
New York, NY 10019
Name and address of agent for service: | John E. Denneen, Esquire |
1414 Avenue of the Americas | |
New York, NY 10019 |
Registrant’s telephone number, including area code: (212) 486-1445
Date of fiscal year end: December 31
Date of reporting period: January 1, 2007 - June 30, 2007
Item 1. Reports to Shareholders
Pennsylvania Mutual Fund Royce Micro-Cap Fund Royce Premier Fund Royce Low-Priced Stock Fund Royce Total Return Fund Royce Heritage Fund Royce Opportunity Fund Royce Special Equity Fund Royce Value Fund Royce Value Plus Fund Royce Technology Value Fund Royce 100 Fund | SEMIANNUAL REVIEW AND REPORT TO SHAREHOLDERS | ||||||||
Royce Discovery Fund Royce Financial Services Fund | |||||||||
Royce Dividend Value Fund Royce International Value Fund | |||||||||
Royce International Smaller-Companies Fund | |||||||||
www.roycefunds.com |
Investment Universe | generally hold relatively smaller positions in a larger number of securities, while a small- or mid-cap oriented fund may hold larger positions in a relatively limited number of securities. |
Current Portfolio Characteristics | ||||||||||||
Fund | Portfolio Composition (as of 6/30/07) | Portfolio Approach | Volatility (as of 6/30/07) | |||||||||
Micro | Small | Mid | Limited | Diversified | Low | Moderate | High | |||||
Pennsylvania Mutual | n | n | n | n | ||||||||
Royce Micro-Cap | n | n | n | n | ||||||||
Royce Premier | n | n | n | n | ||||||||
Royce Low-Priced Stock | n | n | n | |||||||||
Royce Total Return | n | n | n | n | ||||||||
Royce Heritage | n | n | n | n | ||||||||
Royce Opportunity | n | n | n | n | ||||||||
Royce Special Equity | n | n | n | n | ||||||||
Royce Value | n | n | n | n | ||||||||
Royce Value Plus | n | n | n | n | n | |||||||
Royce Technology Value | n | n | n | n | ||||||||
Royce 100 | n | n | n | n | ||||||||
Royce Discovery | n | n | n | |||||||||
Royce Financial Services | n | n | n | n | n | |||||||
Royce Dividend Value | n | n | n | n | ||||||||
Royce International Value1 | n | n | n | — | — | — | ||||||
Royce International Smaller-Companies1 | n | n | n | — | — | — |
n Indicates primary portfolio composition. n Indicates secondary portfolio composition. 1 Fund does not have three years of history required for calculating volatility score. |
This page is not part of the 2007 Semiannual Report to Shareholders |
Table of Contents | ||
Semiannual Review | ||
Performance and Expense Table | 2 | |
Letter to Our Shareholders | 3 | |
Fund Focus: Specialty of the House | 10 | |
Online Update | 11 | |
Semiannual Report to Shareholders | 12 |
This page is not part of the 2007 Semiannual Report to Shareholders | 1 |
Performance and Expenses1 | Through June 30, 2007 | |
Average Annual Total Returns | |||||||||||||||||
Gross Annual | Net Annual | ||||||||||||||||
10-Year/Since | Operating | Operating | |||||||||||||||
Fund | 1-Year | 5-Year | Inception (Date) | Expenses | Expenses | ||||||||||||
Pennsylvania Mutual Fund | 19.00 | % | 16.01 | % | 14.03 | % | 0.87 | 0.87 | |||||||||
Royce Micro-Cap Fund2 | 20.41 | 17.21 | 15.18 | 1.43 | 1.43 | ||||||||||||
Royce Premier Fund2 | 18.73 | 18.29 | 13.73 | 1.09 | 1.09 | ||||||||||||
Royce Low-Priced Stock Fund2 | 19.60 | 14.95 | 16.25 | 1.51 | 1.49 | ||||||||||||
Royce Total Return Fund | 18.15 | 13.98 | 12.50 | 1.09 | 1.09 | ||||||||||||
Royce Heritage Fund | 16.03 | 15.98 | 17.34 | 1.47 | 1.47 | ||||||||||||
Royce Opportunity Fund2 | 21.97 | 17.96 | 17.58 | 1.11 | 1.11 | ||||||||||||
Royce Special Equity Fund | 20.82 | 12.00 | 11.43 | 5/1/98 | 1.13 | 1.13 | |||||||||||
Royce Value Fund | 24.73 | 23.63 | 19.02 | 6/14/01 | 1.42 | 1.42 | |||||||||||
Royce Value Plus Fund | 23.89 | 25.08 | 23.83 | 6/14/01 | 1.40 | 1.40 | |||||||||||
Royce Technology Value Fund | 17.31 | 15.00 | 10.91 | 12/31/01 | 2.15 | 1.69 | |||||||||||
Royce 100 Fund | 18.56 | n/a | 19.29 | 6/30/03 | 1.72 | 1.49 | |||||||||||
Royce Discovery Fund | 14.77 | n/a | 14.15 | 10/3/03 | 3.73 | 1.49 | |||||||||||
Royce Financial Services Fund | 15.89 | n/a | 15.10 | 12/31/03 | 3.70 | 1.49 | |||||||||||
Royce Dividend Value Fund | 19.36 | n/a | 14.94 | 5/3/04 | 2.72 | 1.49 | |||||||||||
Royce International Value Fund | n/a | n/a | 15.80 | 1 | 12/29/06 | 1.69 | 1.69 | ||||||||||
Royce International | |||||||||||||||||
Smaller-Companies Fund | n/a | n/a | 10.30 | 1 | 12/29/06 | 1.69 | 1.69 | ||||||||||
Russell 2000 | 16.43 | 13.88 | 9.06 | n/a | n/a | ||||||||||||
Important Performance, Expense and Risk Information | |||||||||||||||||
All performance information in this Review reflects past performance, is presented on a total return basis and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, so that shares may be worth more or less than their original cost when redeemed. Current performance may be higher or lower than performance quoted. Current month-end performance may be obtained at www.roycefunds.com. All performance, risk and expense information reflects results of the Fund’s oldest share Class (Investment Class or Service Class, as the case may be). Shares of the Fund’s Service, Consultant and R Classes bear an annual distribution expense that is not borne by the Fund’s Investment Class. Gross annual operating expenses reflect the Fund’s gross total annual operating expenses for the Fund’s oldest Class, including management fees, 12b-1 distribution and service fees. Net annual operating expenses reflect contractual fee waivers and/or reimbursements. Gross annual operating expenses do not. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive fees and/or reimburse operating expenses through December 31, 2007 to the extent necessary to limit total net annual operating expenses to no more than 1.49% for Royce Low-Priced Stock, 100, Discovery, Financial Services and Dividend Value Funds and 1.69% for Royce Technology Value, International Value and International Smaller Companies Funds. Royce & Associates has contractually agreed to waive fees and/or reimburse operating expenses through December 31, 2016 to the extent necessary to limit total net annual operating expenses to no more than 1.99% for Royce Discovery, Financial Services and Dividend Value Funds. The Royce Funds invest primarily in securities of mid-, small- and/or micro-cap companies that may involve considerably more risk than investments in securities of larger-cap companies (see “Primary Risks for Fund Investors” in the respective Prospectus). Please read the Prospectus carefully before investing or sending money. The Russell 2000 Index is an unmanaged index of domestic small capitalization stocks. | |||||||||||||||||
1Not annualized. | |||||||||||||||||
2The Fund is currently closed to new investors. | |||||||||||||||||
Pennsylvania Mutual Fund’s average annual total return for the 30-year period ended 6/30/07 was 15.59%. | |||||||||||||||||
2 | This page is not part of the 2007 Semiannual Report to Shareholders |
Letter to Our Shareholders |
Rolling Stone Blues | ||
At first blush, the mid-point of 2007 looked very similar to the end of 2006. The economy’s condition was mostly positive, interest rates remained low and global liquidity levels remained flush following some vexing signs of contraction earlier in the year. The stock market kept moving mostly upwards, and the long bull market for small-caps in particular showed few signs of slowing down prior to July of this year. What’s new for 2007 is that larger companies have emerged in the short run as market leaders, though the margin of outperformance versus small-cap both year-to-date and for the one-year period ended June 30 was not enormous. Within small-cap, there has been a move toward larger, arguably higher-quality companies that’s distinct from the generally better returns achieved by more speculative issues in 2006. The overall direction remained positive for smaller companies, as it did for stocks as a whole. Equity investors continued to benefit from a remarkable run that included more of the overall market than is usually thought, small-cap having long since stolen the headlines from its larger peers as “The Only Asset Class Worth Owning” in some quarters. | ||
One of the advantages of employing an all-weather strategy to select smaller company stocks is that we continue to do what we have always done regardless of the market’s behavior. When smaller company stock prices were on the rise, it was more challenging to find the compelling values that have always been our stock in trade, but the search goes on whether the overall small-cap market is moving up or down. | ||
This page is not part of the 2007 Semiannual Report to Shareholders | 3 |
Letter to Our Shareholders | ||||||||
historically typical correction of 15% or better is in the near future for smaller companies. The positive-performance phase that began in the fall of 2002 was interrupted by only two corrections in the 10%-14% range—one in 2004-5 and another in 2006—and a handful of others that were shy of double digits. To paraphrase the poet, the course of true market cycles never did run smooth. At least not as smooth as this current cycle. And to us, this was a warning. As we saw in July, when stock prices fell harder then they did during any other month this year, things can change very quickly. Along with our belief in regression to the mean, our conviction that markets are inherently cyclical is too firm to counter any temptation to abandon the lessons of history. | ||||||||
Over the past decade or so the growth in the number and variety of equity market indices has been explosive. Russell, Standard & Poor’s (“S&P”), Wilshire, and Barra have all become accepted names in the equity world with stables of various indices. Considering the burgeoning number and scope of equity market indices, it is critical that investors better understand the composition, attribution and construction methodology among similar equity market indices. As the Standard & Poor’s 500 index recently celebrated its 50th anniversary, we thought that it might be helpful to delve into the particulars of the more prominent small-cap indices, and how we at The Royce Funds view them. Two of the most prominent are the Russell 2000 and the S&P SmallCap 600, both widely accepted benchmarks for small-cap equities. Yet each is different in composition, attribution and construction methodology. | As active small-cap managers with large stakes throughout the small-cap universe, perhaps we should be more consistently happy with a market that before July had been gathering no moss and few, if any bears. Maybe we should try a little harder to relax and simply enjoy the good times. Make no mistake, we are mostly very pleased–and more than happy to reap the benefits of the robust returns that smaller stocks have been providing since the most recent small-cap market trough in October 2002. However, as the small-cap bull stampeded its way toward a fifth full year, we were also in the midst of our own 19th Nervous Breakdown (and at least as many bear market predictions) as we awaited what seemed to us an inevitable smallcap downturn. Even as the market was swaying to higher and higher levels, we could not escape the nagging and persistent reality that historically strong bull markets often give way to serious corrections, and the longer the good times last, the more likely it seemed that the bear’s bite will be deep. Of course, one of the advantages of employing an all-weather strategy to select smaller company | |||||||
The Russell 2000 index is the oldest��� dating back to 1979—and broadest of the two small-cap indices. It measures the performance of the 2,000 smallest companies in the Russell 3000 Index (which represents 99% of the U.S. Continued on page 6... | stocks is that we continue to do what we have always done regardless of the market’s behavior. When smaller company stock prices were on the rise, it was more challenging to find the compelling values that have always been our stock in trade, but the search goes on whether the overall small-cap market is moving up or down. It’s All Over Now If our call for overall lower returns has not yet panned out, and our prediction of a small-cap correction has thus far proved at best premature, we can take a small measure of comfort for our forecasting acumen in the emergence of large-cap as a market leader, a development | |||||||
4 | This page is not part of the 2007 Semiannual Report to Shareholders |
we thought first looked likely by the beginning of 2006. As usually happens, the case for large-cap leadership took on a certain inevitability only with the gift of hindsight. In 2005, the large-cap S&P 500 and the small-cap Russell 2000 finished the year with near-identical results—the S&P 500 was up 4.9% while the Russell 2000 gained 4.6%. The | |||||
large-cap index relinquished the performance crown in 2006 (+15.8% versus 18.4%), but small-cap regained its edge mostly through the courtesy of a torrid first quarter and a strong fourth quarter. In both 2006’s bearish second quarter and flat-to-down third quarter, the S&P 500 beat the Russell 2000, events we regarded as especially telling of a shift to large-cap leadership. That third-quarter outperformance (+5.7% versus +0.4%) was the key to giving the large-cap index an edge for the second half of 2006; it also contributed to large-cap outgaining small-cap for the one-year period ended 6/30/07, up 20.6% versus 16.4%. | We have been less focused on the leadership issue within small-cap than we are in the wider worlds of small- and large-cap in part because we do not limit ourselves in the broad small-cap universe by attaching labels to stocks such as “value” or “growth.” | ||||
Two thousand seven has been different in terms of its first-half performance patterns, yet the end result through the end of June showed the S&P 500 ahead of its small-cap counterpart. During this year’s first quarter, a period that was positive for almost every segment of the stock market save certain small-cap growth companies and many micro-cap stocks, the S&P 500 gained a paltry 0.6% versus 2.0% for the Russell 2000. (The Nasdaq Composite, meanwhile, managed a 0.3% gain.) The second quarter saw higher returns spread more consistently throughout the market. Large-cap led small-cap, with the S&P 500 up 6.3% versus 4.4% for its small-cap sibling, while the Nasdaq Composite led both indices with a gain of 7.5%. For the year-to-date period ended 6/30/07, the Nasdaq Composite actually led, its 7.8% gain ahead of the S&P 500’s 7.0% return and the Russell 2000’s 6.5% showing. These first-half results, as well as the large- and small-cap indices’ one-year returns, were consistent with our thought that when large-cap stocks did finally assume a leadership role, the margin of outperformance would be slight. We remain committed to the idea that large-cap’s stay at the top should be brief, as frequent leadership rotation seems likely to roll on. Considering the recent status of large-cap’s leadership, it should come as no surprise that the long-term performance edge remained with smaller companies. The Russell 2000 outpaced the S&P 500 for the three-, five-, 10- and 15-year periods ended 6/30/07. In addition, the small-cap index outgained its large-cap counterpart in two-thirds of the S&P 500’s positive quarters in each three-, five- and 10-year period ended 6/30/07. Not Fade Away During the first half, a similar shift in leadership arrived via a different route between value and growth within small-cap. The Russell 2000 Value index had maintained a nearstranglehold on small-cap leadership until the first quarter of 2007, when it slipped under |
This page is not part of the 2007 Semiannual Report to Shareholders | 5 |
equity market) and accounts for approximately 8% of the total market capitalization of the larger Russell index. As of the end of June 2007, the median market cap of the Russell 2000 was $695 million. The largest company by market cap in the index was $3.3 billion and the smallest was $125 million. Companies with market capitalizations in excess of $2.5 billion represented 6% of the index, while micro-caps, which Royce defines as companies with market capitalizations less than $500 million, comprised roughly 13% of the index. In terms of attribution, Financial Services represented the largest sector weight in the index at the end of June 2007, at 22.6%. Industrials (autos and transportation, materials and processing and producer durable) and Consumer Discretionary followed, with weightings of 21.5% and 19.2%, respectively. Introduced in 1994, the S&P SmallCap 600 is more concentrated than the Russell 2000, consisting of 600 names that cover approximately 3% of the domestic equity market. The median market cap of the S&P SmallCap 600 was $820 million as of the end of June 2007. The largest company by market cap in the index was $5.0 billion and the smallest was $70 million. Companies with more than $2.5 billion in market cap comprised approximately 7%, while micro-caps represented 20% of the overall index. Industrials (materials and processing and producer durable) represented the largest sector weighting in the index at 19.1%, followed by Information Continued on page 8... | Letter to Our Shareholders | |||||||
the thumb of its small-cap growth sibling. During both the first quarter (+1.5% versus +2.5%) and second quarter (+2.3% versus +6.7%), the Russell 2000 Value index lost ground to the Russell 2000 Growth index. Interestingly for us, value also underperformed growth from the interim small-cap peak on 2/22/07 through 6/30/07, down 0.8% compared to a gain of 2.9%. This consistent underperformance, even during the year’s more volatile periods, not only put small-cap value in second place for the year-to-date period ended 6/30/07 (+3.8% versus +9.3%), it also cost small-cap value the performance edge for the most recent 12-month period. For the one-year period ended 6/30/07, the Russell 2000 Value index was up 16.1% versus 16.8% for the Russell 2000 Growth index. Paralleling the performance patterns of small-cap versus large-cap, the Russell 2000 Value index maintained its lead over the Russell 2000 Growth index for longer-term periods. It bested small-cap growth for the three-, five-, 10-,15-, 20- and 25-year periods ended 6/30/07. A critical element in this performance edge came from small-cap value’s better performance during the nearly five-year bull-market period following the small-cap market trough in October 2002, and from its superior results from the previous small-cap market peak on 3/9/00 through 6/30/07. What gives us some pause about the current period is the relative strength of small-cap growth in the more volatile period from that February 2007 interim peak. This is in stark contrast to 2006, a period in which small-cap value beat small-cap growth in up, down and more mixed quarters. However, we have been less focused on the leadership issue within small-cap than we are in the wider worlds of small- and large-cap in part because we do not limit ourselves in the broad small-cap universe by attaching labels to stocks such as “value” or “growth.” Cool, Calm & Collected Another reason for our bemusement is rooted in our own Funds’ recent results. While the Russell 2000 Value index was dominating small-cap performance in 2006, three of our most conservatively managed portfolios were underperforming. Yet during the first half of 2007, these same portfolios—Royce Premier, Total Return and Special Equity Funds—were among our best performers. So it would seem that the distinctions between small-cap value and growth stocks being drawn by the wider world may no longer be as significant as they were even a few years ago. The three aforementioned portfolios were part of a generally strong first half for The Royce Funds in this Review and Report. All but two of our portfolios were ahead of their small-cap benchmark, the Russell 2000, for the year-to-date period ended 6/30/07, and all but three outpaced the small-cap index for the 12 months ended 6/30/07. When we turn to the long view, the news becomes even better. Each of The Royce Funds then in existence outperformed the Russell 2000 from the previous small-cap market peak on | ||||||||
6 | This page is not part of the 2007 Semiannual Report to Shareholders |
3/9/00 through 6/30/07. In addition, all seven Royce Funds with 10 years or more of history outgained the Russell 2000 for the three-, five- and 10-year periods ended 6/30/07. First-half strength came from holdings in several sectors, but the leader in many portfolios (and a profitable one in all) was Industrial Products. It prevailed in some Funds in part owing to the whopping | |||||
46% premium that a larger competitor paid for long-time holding Florida Rock Industries back in February, but many other holdings in the sector, including another takeover target, Canadian steel business IPSCO, continued a pattern of mostly stellar performance that dates back to late 2005. Holdings in Natural Resources and Technology were generally solid as well. Micro-cap stocks finished the first half trailing their larger small-cap peers, though this was felt most acutely in only one of our micro-cap oriented portfolios, Royce Discovery Fund. We were pleased with the Funds’ first-half results, especially in a market climate that has made it more and more challenging to find the sort of attractive values that we like. | The popularity of ETF’s and other index-based investments has played an important role in helping small-cap to be taken more seriously as an asset class. We also think that the related success of small-cap value approaches has been a factor in this growing esteem because a large number of investors saw that you could invest in small-cap stocks or indices with attractively low volatility scores. | ||||
You Can’t Always Get What You Want Indeed, the reality of small-cap’s status as a permanent, professional asset class—something that we are happy to report does not seem likely to change, even in the event of a correction more severe than what we think is probable—cuts both ways for us. The popularity of ETF’s and other index-based investments has played an important role in helping small-cap to be taken more seriously as an asset class. We also think that the related success of small-cap value approaches has been a factor in this growing esteem because a large number of investors saw that you could invest in small-cap stocks or indices with attractively low volatility scores. However, this has also created new tests for our purchase habits, in which we seek high-quality companies selling for bargain prices. Unquestionably, in our view, the major player in the extension of the small-cap bull market has been the vast amount of global liquidity. The world is awash with capital |
This page is not part of the 2007 Semiannual Report to Shareholders | 7 |
Technology at 17.1%, and Financial Services at 15.8% at the end of June 2007. | Letter to Our Shareholders | |||||||
Another important difference between the two indices is the respective construction methodology. The S&P SmallCap 600 is designed to be an “efficient portfolio of companies that meet specific inclusion criteria to ensure that they are investable and financially viable.” Inclusion in the index is determined subjectively by the S&P Index Committee, which adds new stocks to the index based not only on size, but also on financial viability, liquidity, adequate float size and other trading requirements. In contrast, the Russell 2000 is more objective in nature; it has no committee to determine membership and stresses the need to accurately represent the market as it is. Kelly Haughton, strategic director for the Russell Indices, believes that “the market should decide which stocks belong in an index, especially if the index is to provide an unbiased benchmark for measuring the results of money managers’ investment decisions.” With differing composition, attribution and construction, performance can also vary dramatically. In fact, examining the annual performance of the two indices over the past 10 years shows that the spread has been as wide as 1400 basis points in a single calendar year. Still, we think that the Russell 2000 and the Standard & Poor’s SmallCap 600 Index are reasonable proxies of the small capitalization world. | looking for a profitable home, and that’s been an enormous factor in keeping stock prices afloat. Many of the investment vehicles that have become increasingly better known—not just ETFs, but hedge funds, as well as merger and acquisition (M&A) and private equity activity—have been fueled to some degree by the large amounts of cash circling the globe. Global liquidity has worked to make M&A’s, leveraged buyouts and privatizations increasingly commonplace in the financial marketplace. The United States is in | |||||||
the midst of a mega-merger wave, with the number and size of the transactions exploding. During the first half of 2007, 15 companies in the S&P 500 announced takeovers, while 111 companies in the Russell 2000 had deals pending. Equally important, the trend has shown no signs of slowing down within the small-cap world. | ||||||||
8 | This page is not part of the 2007 Semiannual Report to Shareholders |
However mindful of the significance of these figures, we still do not believe that the extraordinary amount of global liquidity changes the rules of the road in the U.S. equity market, at least over the long run. Cyclicality remains | |||||
the norm. Today’s small-cap market is no different than large-cap was during the ’90s. Global liquidity has extended a wonderful bull market, but it cannot save the market from history, which means that sooner or later, the good times will end. Smaller companies have been, and will continue to be, the target of private equity funds and larger companies flush with cash. Although it’s clear that M&A activity is not the primary driver of long-term performance, it has already had a hand in the extended run for a small-cap bull market. Yet once the bull market for acquisitions ends, the softening in demand could precipitate a more widespread correction in the very market whose bullish phase it helped to extend in the first place. | We have never allowed our thoughts on the short- or intermediate-term forecasts for the market to cloud our stock selection process. Regardless of where we think the market may be headed next, the search for great values in smaller stocks goes on... | ||||
Time Is On Our Side As we look forward, we almost find ourselves wishing for a serious, though short-lived, correction for smaller stocks. We are still buying mostly on short-term dips, which typically do not yield the sort of absolute value that we would ideally prefer. Our goal is to be fully invested, but with purchase decisions becoming harder and harder, it has not been easy. Yet that is the reality of the current market (at least as of this writing), so we make our adjustments and deal with what we have on a daily basis. And even as we remain highly concerned about a correction for smaller companies, we are also confident about the long-term prospects for our chosen asset class. Whether or not a decidedly bearish July marked the beginning of a correction, we are still managing our portfolios with a long-term outlook and an absolute return bias. We have never allowed our thoughts on the short- or intermediate-term forecasts for the market to cloud our stock selection process. Regardless of where we think the market may be headed next, the search for great values in smaller stocks goes on, with the thought that our Funds can provide the kind of terrific long-term absolute returns that help our shareholders to build wealth. Sincerely, |
Charles M. Royce President | W. Whitney George Vice President | Jack E. Fockler, Jr. Vice President |
July 31, 2007
This page is not part of the 2007 Semiannual Report to Shareholders | 9 |
Fund Focus |
Specialty of the House The idea of jumping off a pancake doesn’t exactly qualify as an extreme sport or high-risk enterprise. But for Charlie Dreifus, portfolio manager of Royce Special Equity Fund since its inception in April 1998, it describes perfectly his attitude toward the attendant risks of managing small-cap portfolios. For more than 25 years, he has managed small-cap portfolios with an approach that emphasizes close attention to company quality and accounting issues. The result is arguably the most conservatively managed portfolio among our offerings. Charlie has always believed that part of being a successful money manager involves the close scrutiny of financial statements. Much of this view is rooted in his academic background in accounting, where he studied with Abraham Briloff, a legendary figure whose inspired teaching could make the examination of annual reports as compelling as working out the clues in an Arthur Conan Doyle mystery. From his work with Abe, Charlie learned that much of the important information about a business’s financial condition is often buried in the footnotes. He also learned that financial statements were not solely objective sets of facts and figures, and could thus be read and interpreted in many cases like novels. As much as these examinations revealed hidden sources of value (or danger), they were not enough to help him determine whether or not a company’s stock was worth buying. Another piece of the puzzle emerged in the ’60s when Charlie first read Ben Graham and David Dodd’s classic, Security Analysis, with its treatment of a company’s margin of safety as “the central concept of investing.” Charlie had already been focused on the idea of losing less during flat or difficult markets, even if it meant giving up some returns during dynamic up-market periods—in other words, jumping off a pancake. | The key metrics that Charlie uses have evolved since he became involved in portfolio management in 1971. As a proxy for company quality, he first used return on assets (ROA). Wanting a metric that he believed would better reflect assets derived from a company’s operations—as opposed to cash, investments, et al.—Charlie eventually gravitated away from ROA to return on invested capital (ROIC). He thinks that dividing operating income by capital, exclusive of cash and investments, offers a better measure of a company’s strength. Charlie also favors the ratio of Enterprise Value to Earnings Before Interest and Taxes (EV/EBIT) over EV/EBITDA (which includes depreciation and amortization) because he views it as the better—i.e., more conservative—gauge of the price one pays for earnings. As a portfolio perhaps best made for flat and down markets, the last five years have been bittersweet for Royce Special Equity Fund, as the long bull market for small-cap stocks has seen the Fund frequently trailing small-cap indices, even as it has achieved solid absolute results. The current year has been kinder, as certain portfolio holdings have participated in profitable transactional activities and investors more generally seem to be seeking the kind of higher-quality small-cap businesses that Charlie has always sought for the portfolio. Any extension of a “quality rally” would be more than welcome. However, a correction would also not necessarily be as worrisome an experience as it might be for other small-cap portfolios. Throughout its more than nine-year history, the Fund has amassed very impressive volatility scores. (See the table below for performance and volatility scores). We think that Charlie’s considerable experience—he bought his first stock with his Bar-Mitzvah money—and the Fund’s unique take on value investing make the Fund a great fit for the risk-conscious investor. |
RSE vs Russell 2000: Performance and Volatility Comparison | Through June 30, 2007 | ||||||||||||||||||||||||
AVERAGE ANNUAL TOTAL RETURNS | VOLATILITY SCORES For the 5-Year Period | ||||||||||||||||||||||||
One-Year | Five-Year | Since Inception (5/1/98) | Annual Operating Expenses | Beta | Standard Deviation | ||||||||||||||||||||
Royce Special Equity Fund | 20.82 | % | 12.00 | % | 11.43 | % | 1.13 | % | 0.70 | 10.91 | |||||||||||||||
Russell 2000 | 16.43 | 13.88 | 7.43 | n/a | 1.19 | 16.47 | |||||||||||||||||||
Important Information on Performance |
All performance and expense information above reflects past performance for the Investment Class. Past performance is presented on a total return basis and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month end may be obtained at www.roycefunds.com. Investment return and principal value will fluctuate, so that shares may be worth more or less than their original cost when redeemed. Annual operating expenses reflect the Fund’s total annual operating expenses for the Investment Class as of the Fund’s most current prospectus and include management fees and other expenses. The Fund invests primarily in the securities of a limited number of small- and micro-cap companies that may involve considerably more risk than investments in securities of a greater number of larger-cap companies (see “Primary Risks for Fund Investors” in the Prospectus). Please see pages 2 and 125 for more information on performance and volatility figures, including a description of beta, standard deviation and the Russell 2000. |
10 | This page is not part of the 2007 Semiannual Report to Shareholders |
Online Update | ||
Simplify Your Life—Go Paperless. | ||
Simplify your life by choosing paperless eDelivery of your Royce documents. We promise that you won’t miss the paper or the clutter. And, with three years’ worth of statements online, you will enjoy better access to your information. | ||
With eDelivery, direct shareholders can choose to receive any or all of these documents online: | |||||
• | Semiannual Account Statements | ||||
• | Transaction Confirmation Statements | ||||
• | Prospectuses, Annual and Semiannual Reports, our RWord shareholder newsletter | ||||
• | 1099 Tax Forms | ||||
Of course, you can change your mind at any time, so sign up today. Don’t worry: we won’t inundate you with e-mail, and your e-mail address will remain secure. | |||||
Have a Royce IRA account? | |||||
eDelivery can save you cold, hard cash. | |||||
Go Paperless...and pay NO Maintenance Fees on Royce IRAs. | |||||
Any Royce IRA investor who signs up for eDelivery of Prospectuses, Reports, and our RWord newsletter will be free from the $12 annual maintenance fee. | |||||
(We will continue to waive this fee for any investor with more than $20,000 invested in Royce IRAs at the time the fee is charged, and for new transfer and rollover accounts in their first year.) | |||||
This page is not part of the 2007 Semiannual Report to Shareholders | 11
Table of Contents | |
Semiannual Report to Shareholders | |
Trustees and Officers | 13 |
Managers’ Discussions of Fund Performance | |
Pennsylvania Mutual Fund | 14 |
Royce Micro-Cap Fund | 16 |
Royce Premier Fund | 18 |
Royce Low-Priced Stock Fund | 20 |
Royce Total Return Fund | 22 |
Royce Heritage Fund | 24 |
Royce Opportunity Fund | 26 |
Royce Special Equity Fund | 28 |
Royce Value Fund | 30 |
Royce Value Plus Fund | 32 |
Royce Technology Value Fund | 34 |
Royce 100 Fund | 36 |
Royce Discovery Fund | 38 |
Royce Financial Services Fund | 40 |
Royce Dividend Value Fund | 42 |
Royce International Value Fund | 44 |
Royce International Smaller Companies Fund | 46 |
Financial Statements | 48 |
Notes to Financial Statements | 114 |
Understanding Your Fund’s Expenses | 123 |
Notes to Performance and Other Important Information | 125 |
Board Approval of Investment Advisory Agreements | 127 |
12 | The Royce Funds 2007 Semiannual Report to Shareholders
Trustees and Officers |
All Trustees and Officers may be reached c/o The Royce Funds, 1414 Avenue of the Americas, New York, NY 10019 |
Charles M. Royce, Trustee*, President |
Age: 67 | Number of Funds Overseen: 25 | Tenure: Since 1982 |
Non-Royce Directorships: Director of Technology Investment Capital Corp. |
Principal Occupation(s) During Past Five Years: President, Chief Investment Officer and Member of Board of Managers of Royce & Associates, LLC (“Royce”), the Trust’s investment adviser. |
Mark R. Fetting, Trustee* |
Age: 52 | Number of Funds Overseen: 41 | Tenure: Since 2001 |
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 16 Legg Mason Funds. |
Principal Occupation(s) During Past Five Years: Senior Executive Vice President of Legg Mason, Inc.; Member of Board of Managers of Royce. Mr. Fetting’s prior business experience includes having served as Division President and Senior Officer, Prudential Financial Group, Inc. and related companies; Partner, Greenwich Associates and Vice President, T. Rowe Price Group, Inc. |
Donald R. Dwight, Trustee |
Age: 76 | Number of Funds Overseen: 25 | Tenure: Since 1998 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: President of Dwight Partners, Inc., corporate communications consultant; Chairman (from 1982 to March 1998) and Chairman Emeritus (since March 1998) of Newspapers of New England, Inc. Mr. Dwight’s prior experience includes having served as Lieutenant Governor of the Commonwealth of Massachusetts, as President and Publisher of Minneapolis Star and Tribune Company and as a Trustee of the registered investment companies constituting the Eaton Vance Funds. |
Richard M. Galkin, Trustee |
Age: 69 | Number of Funds Overseen: 25 | Tenure: Since 1982 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: Private investor. Mr. Galkin’s prior business experience includes having served as President of Richard M. Galkin Associates, Inc., telecommunications consultants, President of Manhattan Cable Television (a subsidiary of Time, Inc.), President of Haverhills Inc. (another Time, Inc. subsidiary), President of Rhode Island Cable Television and Senior Vice President of Satellite Television Corp. (a subsidiary of Comsat). |
Stephen L. Isaacs, Trustee |
Age: 67 | Number of Funds Overseen: 25 | Tenure: Since 1989 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: President of The Center for Health and Social Policy (since September 1996); Attorney and President of Health Policy Associates, Inc., consultants. Mr. Isaacs’s prior business experience includes having served as Director of Columbia University Development Law and Policy Program and Professor at Columbia University (until August 1996). |
William L. Koke, Trustee |
Age: 72 | Number of Funds Overseen: 25 | Tenure: Since 1996 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: Private investor. Mr. Koke’s prior business experience includes having served as President of Shoreline Financial Consultants, Director of Financial Relations of SONAT, Inc., Treasurer of Ward Foods, Inc. and President of CFC, Inc. |
Arthur S. Mehlman, Trustee |
Age: 65 | Number of Funds Overseen: 41 | Tenure: Since 2004 |
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 16 Legg Mason Funds and Director of Municipal Mortgage & Equity, LLC. |
Principal Occupation(s) During Past Five Years: Director of The League for People with Disabilities, Inc.; Director of University of Maryland Foundation (non-profits). Formerly: Director of University of Maryland College Park Foundation (non-profit) (from 1998 to 2005); Partner, KPMG LLP (international accounting firm) (from 1972 to 2002); Director of Maryland Business Roundtable for Education (from July 1984 to June 2002). |
The Royce Funds 2007 Semiannual Report to Shareholders | 13 |
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Jan-June 2007* | 10.03 | % | |||||||
One-Year | 19.00 | ||||||||
Three-Year | 16.43 | ||||||||
Five-Year | 16.01 | ||||||||
10-Year | 14.03 | ||||||||
20-Year | 12.59 | ||||||||
25-Year | 15.47 | ||||||||
30-Year | 15.59 | ||||||||
EXPENSE RATIO | |||||||||
Annual Operating Expenses | 0.87 | % | |||||||
* Not annualized. | |||||||||
CALENDAR YEAR TOTAL RETURNS | |||||||||
Year | PMF | Year | PMF | ||||||
2006 | 14.8 | % | 1997 | 25.0 | % | ||||
2005 | 12.5 | 1996 | 12.8 | ||||||
2004 | 20.2 | 1995 | 18.7 | ||||||
2003 | 40.3 | 1994 | -0.7 | ||||||
2002 | -9.2 | 1993 | 11.3 | ||||||
2001 | 18.4 | 1992 | 16.2 | ||||||
2000 | 18.4 | 1991 | 31.8 | ||||||
1999 | 6.0 | 1990 | -11.5 | ||||||
1998 | 4.2 | 1989 | 16.7 | ||||||
TOP 10 POSITIONS % of Net Assets | |||||||||
AllianceBernstein Holding L.P. | 1.6 | % | |||||||
Unit Corporation | 1.0 | ||||||||
Lincoln Electric Holdings | 1.0 | ||||||||
Woodward Governor | 0.9 | ||||||||
Rofin-Sinar Technologies | 0.9 | ||||||||
Ensign Energy Services | 0.9 | ||||||||
Brady Corporation Cl. A | 0.8 | ||||||||
Oil States International | 0.8 | ||||||||
Simpson Manufacturing | 0.8 | ||||||||
Perot Systems Cl. A | 0.8 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Industrial Products | 17.0 | % | |||||||
Technology | 15.4 | ||||||||
Natural Resources | 13.1 | ||||||||
Industrial Services | 9.1 | ||||||||
Consumer Services | 8.2 | ||||||||
Consumer Products | 7.0 | ||||||||
Financial Intermediaries | 6.9 | ||||||||
Health | 6.4 | ||||||||
Financial Services | 6.0 | ||||||||
Miscellaneous | 4.8 | ||||||||
Cash and Cash Equivalents | 6.1 | ||||||||
14 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $1,434 million | |||||||||||||
Weighted Average P/E Ratio | 18.5x | |||||||||||||
Weighted Average P/B Ratio | 2.5x | |||||||||||||
Weighted Average Yield | 0.9% | |||||||||||||
Fund Net Assets | $4,836 million | |||||||||||||
Turnover Rate | 21% | |||||||||||||
Number of Holdings | 504 | |||||||||||||
Symbol | ||||||||||||||
Investment Class | PENNX | |||||||||||||
Service Class | RYPFX | |||||||||||||
Consultant Class | RYPCX | |||||||||||||
R Class | RPMRX | |||||||||||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
PMF | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 0.94 | 0.75 | 0.86 | |||||||||||
Standard Deviation | 13.97 | 15.25 | 14.07 | |||||||||||
Beta | 0.96 | 1.06 | 0.97 | |||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
PMF | 16.01 | % | 13.97 | 1.15 | ||||||||||
Russell 2000 | 13.88 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 15
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Jan-June 2007* | 10.14 | % | |||||||
One-Year | 20.41 | ||||||||
Three-Year | 17.76 | ||||||||
Five-Year | 17.21 | ||||||||
10-Year | 15.18 | ||||||||
15-Year | 16.31 | ||||||||
Since Inception (12/31/91) | 16.25 | ||||||||
EXPENSE RATIO | |||||||||
Annual Operating Expenses | 1.43 | % | |||||||
*Not annualized. | |||||||||
CALENDAR YEAR TOTAL RETURNS | |||||||||
Year | RMC | Year | RMC | ||||||
2006 | 22.3 | % | 1998 | -3.3 | % | ||||
2005 | 11.5 | 1997 | 24.7 | ||||||
2004 | 15.8 | 1996 | 15.5 | ||||||
2003 | 52.6 | 1995 | 19.1 | ||||||
2002 | -13.4 | 1994 | 3.6 | ||||||
2001 | 23.1 | 1993 | 23.7 | ||||||
2000 | 16.7 | 1992 | 29.4 | ||||||
1999 | 13.7 | ||||||||
TOP 10 POSITIONS % of Net Assets | |||||||||
Novamerican Steel | 1.4 | % | |||||||
Exponent | 1.2 | ||||||||
TTM Technologies | 1.2 | ||||||||
Bronco Drilling | 1.1 | ||||||||
Edge Petroleum | 1.1 | ||||||||
Tesco Corporation | 1.1 | ||||||||
Northern Orion Resources | 1.1 | ||||||||
Metal Management | 1.0 | ||||||||
Canadian Western Bank | 1.0 | ||||||||
Olympic Steel | 1.0 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Natural Resources | 17.0 | % | |||||||
Technology | 15.4 | ||||||||
Industrial Services | 11.9 | ||||||||
Industrial Products | 11.3 | ||||||||
Health | 11.1 | ||||||||
Consumer Services | 5.6 | ||||||||
Financial Intermediaries | 5.1 | ||||||||
Consumer Products | 3.5 | ||||||||
Financial Services | 0.8 | ||||||||
Miscellaneous | 3.7 | ||||||||
Cash and Cash Equivalents | 14.6 | ||||||||
16 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $321 million | |||||||||||||
Weighted Average P/E Ratio | 17.9x* | |||||||||||||
Weighted Average P/B Ratio | 2.2x | |||||||||||||
Weighted Average Yield | 0.6% | |||||||||||||
Fund Net Assets | $998 million | |||||||||||||
Turnover Rate | 24% | |||||||||||||
Number of Holdings | 201 | |||||||||||||
Symbol | ||||||||||||||
Investment Class | RYOTX | |||||||||||||
Consultant Class | RYMCX | |||||||||||||
Service Class | RMCFX | |||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
RMC | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 0.86 | 0.84 | 0.90 | |||||||||||
Standard Deviation | 17.10 | 16.92 | 16.37 | |||||||||||
Beta | 1.14 | 1.14 | 1.07 | |||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RMC | 17.21 | % | 17.10 | 1.01 | ||||||||||
Russell 2000 | 13.88 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 17
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Jan-June 2007* | 14.55 | % | |||||||
One-Year | 18.73 | ||||||||
Three-Year | 16.64 | ||||||||
Five-Year | 18.29 | ||||||||
10-Year | 13.73 | ||||||||
15-Year | 14.97 | ||||||||
Since Inception (12/31/91) | 14.56 | ||||||||
EXPENSE RATIO | |||||||||
Annual Operating Expenses | 1.09 | % | |||||||
*Not annualized. | |||||||||
CALENDAR YEAR TOTAL RETURNS | |||||||||
Year | RPR | Year | RPR | ||||||
2006 | 8.8 | % | 1998 | 6.7 | % | ||||
2005 | 17.1 | 1997 | 18.4 | ||||||
2004 | 22.8 | 1996 | 18.1 | ||||||
2003 | 38.7 | 1995 | 17.8 | ||||||
2002 | -7.8 | 1994 | 3.3 | ||||||
2001 | 9.6 | 1993 | 19.0 | ||||||
2000 | 17.1 | 1992 | 15.8 | ||||||
1999 | 11.5 | ||||||||
TOP 10 POSITIONS % of Net Assets | |||||||||
Lincoln Electric Holdings | 4.1 | % | |||||||
Unit Corporation | 3.3 | ||||||||
Thor Industries | 2.8 | ||||||||
Silver Standard Resources | 2.6 | ||||||||
Reliance Steel & Aluminum | 2.5 | ||||||||
Alleghany Corporation | 2.5 | ||||||||
Ensign Energy Services | 2.5 | ||||||||
IPSCO | 2.5 | ||||||||
Trican Well Service | 2.4 | ||||||||
Endo Pharmaceuticals Holdings | 2.3 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Industrial Products | 19.1 | % | |||||||
Natural Resources | 16.1 | ||||||||
Technology | 13.5 | ||||||||
Consumer Products | 11.0 | ||||||||
Financial Intermediaries | 8.9 | ||||||||
Health | 5.1 | ||||||||
Industrial Services | 3.8 | ||||||||
Consumer Services | 3.7 | ||||||||
Financial Services | 2.3 | ||||||||
Miscellaneous | 1.5 | ||||||||
Cash and Cash Equivalents | 15.0 | ||||||||
18 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $2,341 million | |||||||||||||
Weighted Average P/E Ratio | 18.0x | |||||||||||||
Weighted Average P/B Ratio | 2.9x | |||||||||||||
Weighted Average Yield | 0.7% | |||||||||||||
Fund Net Assets | $5,022 million | |||||||||||||
Turnover Rate | 7% | |||||||||||||
Number of Holdings | 58 | |||||||||||||
Symbol | ||||||||||||||
Investment Class | RYPRX | |||||||||||||
Service Class | RPFFX | |||||||||||||
Consultant Class | RPRCX | |||||||||||||
Institutional Class | RPFIX | |||||||||||||
W Class | RPRWX | |||||||||||||
R Class | RPRRX | |||||||||||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
RPR | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 1.12 | 0.75 | 0.86 | |||||||||||
Standard Deviation | 13.32 | 15.25 | 14.07 | |||||||||||
Beta | 0.92 | 1.06 | 0.97 | |||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RPR | 18.29 | % | 13.32 | 1.37 | ||||||||||
Russell 2000 | 13.88 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 19
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Jan-June 2007* | 9.98 | % | |||||||
One-Year | 19.60 | ||||||||
Three-Year | 15.54 | ||||||||
Five-Year | 14.95 | ||||||||
10-Year | 16.25 | ||||||||
Since Inception (12/15/93) | 16.06 | ||||||||
EXPENSE RATIO | |||||||||
Gross Annual Operating Expenses | 1.51 | % | |||||||
Net Annual Operating Expenses | 1.49 | ||||||||
*Not annualized. | |||||||||
CALENDAR YEAR TOTAL RETURNS | |||||||||
Year | RLP | Year | RLP | ||||||
2006 | 19.0 | % | 1999 | 29.8 | % | ||||
2005 | 9.7 | 1998 | 2.4 | ||||||
2004 | 13.6 | 1997 | 19.5 | ||||||
2003 | 44.0 | 1996 | 22.8 | ||||||
2002 | -16.3 | 1995 | 22.5 | ||||||
2001 | 25.1 | 1994 | 3.0 | ||||||
2000 | 24.0 | ||||||||
TOP 10 POSITIONS % of Net Assets | |||||||||
Foundry Networks | 1.8 | % | |||||||
Metal Management | 1.7 | ||||||||
Endo Pharmaceuticals Holdings | 1.7 | ||||||||
Silver Standard Resources | 1.7 | ||||||||
Ensign Energy Services | 1.7 | ||||||||
Unit Corporation | 1.6 | ||||||||
Perot Systems Cl. A | 1.6 | ||||||||
Knight Capital Group Cl. A | 1.6 | ||||||||
Ivanhoe Mines | 1.5 | �� | |||||||
Trican Well Service | 1.5 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Natural Resources | 23.8 | % | |||||||
Technology | 17.2 | ||||||||
Health | 9.5 | ||||||||
Consumer Services | 7.6 | ||||||||
Industrial Products | 7.1 | ||||||||
Industrial Services | 6.5 | ||||||||
Consumer Products | 6.1 | ||||||||
Financial Intermediaries | 4.3 | ||||||||
Financial Services | 1.5 | ||||||||
Miscellaneous | 2.0 | ||||||||
Cash and Cash Equivalents | 14.4 | ||||||||
20 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $1,181 million | |||||||||||||
Weighted Average P/E Ratio | 19.3x | |||||||||||||
Weighted Average P/B Ratio | 2.5x | |||||||||||||
Weighted Average Yield | 0.5% | |||||||||||||
Fund Net Assets | $5,050 million | |||||||||||||
Turnover Rate | 11% | |||||||||||||
Number of Holdings | 201 | |||||||||||||
Symbol | ||||||||||||||
Investment Class | RLPHX | |||||||||||||
Service Class | RYLPX | |||||||||||||
Institutional Class | RLPIX | |||||||||||||
R Class | RLPRX | |||||||||||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
RLP | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 0.75 | 0.75 | 0.86 | |||||||||||
Standard Deviation | 16.68 | 15.25 | 14.07 | |||||||||||
Beta | 1.13 | 1.06 | 0.97 | |||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RLP | 14.95 | % | 16.68 | 0.90 | ||||||||||
Russell 2000 | 13.88 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 21
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Jan-June 2007* | 8.90 | % | |||||||
One-Year | 18.15 | ||||||||
Three-Year | 14.25 | ||||||||
Five-Year | 13.98 | ||||||||
10-Year | 12.50 | ||||||||
Since Inception (12/15/93) | 14.32 | ||||||||
EXPENSE RATIO | |||||||||
Annual Operating Expenses | 1.09 | % | |||||||
*Not annualized. | |||||||||
CALENDAR YEAR TOTAL RETURNS | |||||||||
Year | RTR | Year | RTR | ||||||
2006 | 14.5 | % | 1999 | 1.6 | % | ||||
2005 | 8.2 | 1998 | 4.8 | ||||||
2004 | 17.5 | 1997 | 23.7 | ||||||
2003 | 30.0 | 1996 | 25.5 | ||||||
2002 | -1.6 | 1995 | 26.9 | ||||||
2001 | 14.8 | 1994 | 5.1 | ||||||
2000 | 19.4 | ||||||||
TOP 10 POSITIONS % of Net Assets | |||||||||
AllianceBernstein Holding L.P. | 2.3 | % | |||||||
Canadian Government Bonds | 2.2 | ||||||||
Helmerich & Payne | 0.9 | ||||||||
Nuveen Investments Cl. A | 0.8 | ||||||||
Reliance Steel & Aluminum | 0.7 | ||||||||
Cimarex Energy | 0.7 | ||||||||
SEI Investments | 0.7 | ||||||||
Federated Investors Cl. B | 0.7 | ||||||||
Woodward Governor | 0.7 | ||||||||
Lincoln Electric Holdings | 0.6 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Industrial Products | 20.8 | % | |||||||
Financial Intermediaries | 17.1 | ||||||||
Natural Resources | 11.7 | ||||||||
Industrial Services | 9.1 | ||||||||
Financial Services | 8.9 | ||||||||
Consumer Services | 6.3 | ||||||||
Consumer Products | 5.9 | ||||||||
Technology | 4.6 | ||||||||
Health | 4.0 | ||||||||
Utilities | 1.8 | ||||||||
Miscellaneous | 0.8 | ||||||||
Bonds and Preferred Stocks | 3.2 | ||||||||
Cash and Cash Equivalents | 5.8 | ||||||||
22 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $1,944 million | |||||||||||||
Weighted Average P/E Ratio | 16.9x | |||||||||||||
Weighted Average P/B Ratio | 2.4x | |||||||||||||
Weighted Average Yield | 1.9% | |||||||||||||
Fund Net Assets | $6,347 million | |||||||||||||
Turnover Rate | 12% | |||||||||||||
Number of Holdings | 493 | |||||||||||||
Symbol | ||||||||||||||
Investment Class | RYTRX | |||||||||||||
Service Class | RYTFX | |||||||||||||
Consultant Class | RYTCX | |||||||||||||
Institutional Class | RTRIX | |||||||||||||
W Class | RTRWX | |||||||||||||
R Class | RTRRX | |||||||||||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Decile | |||||||||||||
RTR | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 1.03 | 0.75 | 0.99 | |||||||||||
Standard Deviation | 10.59 | 15.25 | 13.18 | |||||||||||
Beta | 0.79 | 1.06 | 0.89 | |||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RTR | 13.98 | % | 10.59 | 1.32 | ||||||||||
Russell 2000 | 13.88 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 23
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Jan-June 2007* | 7.52 | % | |||||||
One-Year | 16.03 | ||||||||
Three-Year | 16.39 | ||||||||
Five-Year | 15.98 | ||||||||
10-Year | 17.34 | ||||||||
Since Inception (12/27/95) | 18.40 | ||||||||
EXPENSE RATIO | |||||||||
Annual Operating Expenses | 1.47 | % | |||||||
*Not annualized. | |||||||||
CALENDAR YEAR TOTAL RETURNS | |||||||||
Year | RHF | Year | RHF | ||||||
2006 | 22.6 | % | 2000 | 11.7 | % | ||||
2005 | 8.7 | 1999 | 41.8 | ||||||
2004 | 20.4 | 1998 | 19.5 | ||||||
2003 | 38.1 | 1997 | 26.0 | ||||||
2002 | -18.9 | 1996 | 25.6 | ||||||
2001 | 20.5 | ||||||||
TOP 10 POSITIONS% of Net Assets | |||||||||
AllianceBernstein Holding L.P. | 3.2 | % | |||||||
Ritchie Bros. Auctioneers | 1.6 | ||||||||
Edge Petroleum | 1.5 | ||||||||
Acacia Research-Acacia Technologies | 1.3 | ||||||||
Newport Corporation | 1.3 | ||||||||
Integrated Electrical Services | 1.3 | ||||||||
Perrigo Company | 1.2 | ||||||||
Integral Systems | 1.1 | ||||||||
Rofin-Sinar Technologies | 1.1 | ||||||||
Diodes | 1.1 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Technology | 24.5 | % | |||||||
Financial Services | 11.5 | ||||||||
Industrial Products | 10.9 | ||||||||
Industrial Services | 10.3 | ||||||||
Health | 8.6 | ||||||||
Natural Resources | 5.7 | ||||||||
Financial Intermediaries | 4.5 | ||||||||
Consumer Services | 4.2 | ||||||||
Consumer Products | 2.4 | ||||||||
Miscellaneous | 4.0 | ||||||||
Preferred Stock | 0.9 | ||||||||
Cash and Cash Equivalents | 12.5 | ||||||||
24 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $851 million | |||||||||||||
Weighted Average P/E Ratio | 20.7x | |||||||||||||
Weighted Average P/B Ratio | 2.6x | |||||||||||||
Weighted Average Yield | 0.7% | |||||||||||||
Fund Net Assets | $119 million | |||||||||||||
Turnover Rate | 63% | |||||||||||||
Number of Holdings | 151 | |||||||||||||
Symbol | ||||||||||||||
Investment Class | RHFHX | |||||||||||||
Service Class | RGFAX | |||||||||||||
Consultant Class | RYGCX | |||||||||||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
RHF | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 0.86 | 0.75 | 0.86 | |||||||||||
Standard Deviation | 15.37 | 15.25 | 14.07 | |||||||||||
Beta | 1.17 | 1.06 | 0.97 | |||||||||||
*Five years ended 6/30/07. Category Median and Best Quartile Breakpoint based on 347 small-cap objective funds (oldest class only) with at least five years of history. | ||||||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RHF | 15.98 | % | 15.37 | 1.04 | ||||||||||
Russell 2000 | 13.88 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 25
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Jan-June 2007* | 12.73 | % | |||||||
One-Year | 21.97 | ||||||||
Three-Year | 15.46 | ||||||||
Five-Year | 17.96 | ||||||||
10-Year | 17.58 | ||||||||
Since Inception (11/19/96) | 18.15 | ||||||||
EXPENSE RATIO | |||||||||
Annual Operating Expenses | 1.11 | % | |||||||
*Not annualized. | |||||||||
CALENDAR YEAR TOTAL RETURNS | |||||||||
Year | ROF | Year | ROF | ||||||
2006 | 18.8 | % | 2001 | 17.3 | % | ||||
2005 | 4.8 | 2000 | 19.9 | ||||||
2004 | 17.5 | 1999 | 32.3 | ||||||
2003 | 72.9 | 1998 | 4.9 | ||||||
2002 | -17.0 | 1997 | 20.8 | ||||||
TOP 10 POSITIONS% of Net Assets | |||||||||
Haynes International | 0.8 | % | |||||||
DryShips | 0.8 | ||||||||
Kaman Corporation | 0.7 | ||||||||
Barnes Group | 0.7 | ||||||||
Crane Company | 0.7 | ||||||||
Ferro Corporation | 0.7 | ||||||||
Invitrogen Corporation | 0.7 | ||||||||
Landry's Restaurants | 0.7 | ||||||||
Hexcel Corporation | 0.7 | ||||||||
Timken Company (The) | 0.7 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Technology | 33.6 | % | |||||||
Industrial Products | 22.5 | ||||||||
Industrial Services | 8.5 | ||||||||
Consumer Services | 8.1 | ||||||||
Health | 5.4 | ||||||||
Consumer Products | 5.3 | ||||||||
Natural Resources | 3.6 | ||||||||
Financial Intermediaries | 2.4 | ||||||||
Financial Services | 0.4 | ||||||||
Miscellaneous | 3.7 | ||||||||
Cash and Cash Equivalents | 6.5 | ||||||||
26 | The Royce Funds 2007 Semiannual Report to Shareholders
Performance and Portfolio Review | |||||
stocks. While many companies accomplished this without increasing capacity, keeping earnings growth robust without upping capacity will be a more daunting challenge in the months ahead, especially as competition puts pressure on margins. It’s a situation that we will continue to watch, as industrial companies have historically been well-represented in the portfolio. Certainly several holdings continued to benefit in the first half from the lofty stock prices that have graced so many industrial businesses in the last couple of years. Industrial Products led all of ROF’s sectors in dollar-based net gains, with the machinery, industrial components, specialty chemicals and materials, and metal fabrication and distribution industries posting strong performances year-to-date through 6/30/07. Growing demand gave a boost to the share price of GrafTech International, a firm that manufactures graphite and carbon material primarily for the steel industry. With its primary competitor based in Germany, the firm also gained a competitive advantage from the weaker U.S. dollar. We began to reduce our position at rising prices in March 2007. Cooper Tire & Rubber Company also found that the dollar helped it outrace European peers such as Pirelli and Michelin. Back in May, the firm reported its first quarterly profit in two years. We like the job done by the new CEO who took the wheel in December 2006 with a pledge to cut costs and improve efficiency, but the stock’s accelerating price prompted us to begin reducing our stake in March. A profitable fleet expansion drew investors to dry bulk commodities carrier DryShips. We began to sell shares in May at steadily rising prices. | |||||
In planning for the portfolio’s future, we were willing to sustain modest (and hopefully short-term) net losses in banking, retail stores and publishing. The McClatchy Company operates newspapers across the U.S. We think that this well-managed traditional media company can profit from the likely increased advertising rates in the upcoming election year, so we began to rebuild a position in April 2006. We held UTStarcom in the otherwise profitable telecommunications industry. | |||||
McClatchy Company (The) Cl. A | $ | 6,170,067 | |||
UTStarcom | 4,189,638 | ||||
Journal Register | 3,865,930 | ||||
Cray | 3,811,286 | ||||
Fremont General | 3,648,965 | ||||
*Includes dividends | |||||
Reporting issues turned off investors to this Asian business, but we liked the firm’s new president, an American with a long record of success in domestic businesses, though we trimmed our stake between March and June 2007. | |||||
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $661 million | |||||||||||||
Weighted Average P/E Ratio | 19.1x* | |||||||||||||
Weighted Average P/B Ratio | 1.8x | |||||||||||||
Weighted Average Yield | 0.6% | |||||||||||||
Fund Net Assets | $2,777 million | |||||||||||||
Turnover Rate | 23% | |||||||||||||
Number of Holdings | 311 | |||||||||||||
Symbol | ||||||||||||||
Investment Class | RYPNX | |||||||||||||
Service Class | RYTFX | |||||||||||||
Consultant Class | ROFCX | |||||||||||||
Institutional Class | ROFIX | |||||||||||||
R Class | ROFRX | |||||||||||||
*Excludes 27% of portfolio holdings with zero or negative earnings as of 6/30/07. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
ROF | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 0.79 | 0.75 | 0.86 | |||||||||||
Standard Deviation | 19.92 | 15.25 | 14.07 | |||||||||||
Beta | 1.41 | 1.06 | 0.97 | |||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
POF | 17.96 | % | 19.92 | 0.90 | ||||||||||
Russell 2000 | 13.88 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 27
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | ||||||||||
Jan-June 2007* | 11.26 | % | ||||||||
One-Year | 20.82 | |||||||||
Three-Year | 9.54 | |||||||||
Five-Year | 12.00 | |||||||||
Since Inception (5/1/98) | 11.43 | |||||||||
EXPENSE RATIO | ||||||||||
Annual Operating Expenses | 1.13 | % | ||||||||
*Not annualized. | ||||||||||
CALENDAR YEAR TOTAL RETURNS | ||||||||||
Year | RSE | Year | RSE | |||||||
2006 | 14.0 | % | 2002 | 15.3 | % | |||||
2005 | -1.0 | 2001 | 30.8 | |||||||
2004 | 13.9 | 2000 | 16.3 | |||||||
2003 | 27.6 | 1999 | -9.6 | |||||||
TOP 10 POSITIONS% of Net Assets | ||||||||||
National Presto Industries | 4.6 | % | ||||||||
Bio-Rad Laboratories Cl. A | 3.8 | |||||||||
Rofin-Sinar Technologies | 3.8 | |||||||||
Carpenter Technology | 3.4 | |||||||||
CSS Industries | 3.0 | |||||||||
Hilb Rogal & Hobbs | 2.9 | |||||||||
Lancaster Colony | 2.9 | |||||||||
Cascade Corporation | 2.8 | |||||||||
Lawson Products | 2.7 | |||||||||
Arden Group Cl. A | 2.4 | |||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | ||||||||||
Industrial Products | 40.7 | % | ||||||||
Consumer Products | 15.0 | |||||||||
Consumer Services | 10.7 | |||||||||
Industrial Services | 10.1 | |||||||||
Health | 6.1 | |||||||||
Technology | 5.0 | |||||||||
Financial Services | 2.9 | |||||||||
Natural Resources | 1.4 | |||||||||
Miscellaneous | 2.2 | |||||||||
Cash and Cash Equivalents | 5.9 | |||||||||
28 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $838 million | |||||||||||||
Weighted Average P/E Ratio | 16.9x | |||||||||||||
Weighted Average P/B Ratio | 2.4x | |||||||||||||
Weighted Average Yield | 1.0% | |||||||||||||
Fund Net Assets | $655 million | |||||||||||||
Turnover Rate | 17% | |||||||||||||
Number of Holdings | 67 | |||||||||||||
Symbol | ||||||||||||||
Investment Class | RYSEX | |||||||||||||
Service Class | RSEFX | |||||||||||||
Consultant Class | RSQCX | |||||||||||||
Institutional Class | RSEIX | |||||||||||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Decile | |||||||||||||
RSE | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 0.84 | 0.75 | 0.99 | |||||||||||
Standard Deviation | 10.91 | 15.25 | 13.18 | |||||||||||
Beta | 0.70 | 1.06 | 0.89 | |||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RSE | 12.00 | % | 10.91 | 1.10 | ||||||||||
Russell 2000 | 13.88 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 29
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | ||||||||||
Jan-June 2007* | 13.56 | % | ||||||||
One-Year | 24.73 | |||||||||
Three-Year | 21.47 | |||||||||
Five-Year | 23.63 | |||||||||
Since Inception (6/14/01) | 19.02 | |||||||||
EXPENSE RATIO | ||||||||||
Annual Operating Expenses | 1.42 | % | ||||||||
*Not annualized. | ||||||||||
CALENDAR YEAR TOTAL RETURNS | ||||||||||
Year | RVV | Year | RVV | |||||||
2006 | 16.8 | % | 2003 | 54.3 | % | |||||
2005 | 17.2 | 2002 | -23.5 | |||||||
2004 | 30.9 | |||||||||
TOP 10 POSITIONS% of Net Assets | ||||||||||
Unit Corporation | 2.8 | % | ||||||||
Ivanhoe Mines | 2.6 | |||||||||
Knight Capital Group Cl. A | 2.5 | |||||||||
Thor Industries | 2.3 | |||||||||
Reliance Steel & Aluminum | 2.2 | |||||||||
Steel Dynamics | 2.2 | |||||||||
Oil States International | 2.2 | |||||||||
Chaparral Steel | 2.1 | |||||||||
RC2 Corporation | 2.0 | |||||||||
Cimarex Energy | 2.0 | |||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | ||||||||||
Natural Resources | 27.8 | % | ||||||||
Industrial Products | 23.0 | |||||||||
Industrial Services | 9.6 | |||||||||
Consumer Products | 8.9 | |||||||||
Consumer Services | 6.3 | |||||||||
Technology | 5.6 | |||||||||
Financial Intermediaries | 4.1 | |||||||||
Health | 3.6 | |||||||||
Financial Services | 1.6 | |||||||||
Miscellaneous | 0.2 | |||||||||
Cash and Cash Equivalents | 9.3 | |||||||||
30 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $2,023 million | |||||||||||||
Weighted Average P/E Ratio | 14.6x | |||||||||||||
Weighted Average P/B Ratio | 2.7x | |||||||||||||
Weighted Average Yield | 0.5% | |||||||||||||
Fund Net Assets | $894 million | |||||||||||||
Turnover Rate | 23% | |||||||||||||
Number of Holdings | 78 | |||||||||||||
Symbol | ||||||||||||||
Investment Class | RVVHX | |||||||||||||
Service Class | RYVFX | |||||||||||||
Consultant Class | RVFCX | |||||||||||||
Institutional Class | RVFIX | |||||||||||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
RVV | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 1.18 | 0.75 | 0.86 | |||||||||||
Standard Deviation | 17.00 | 15.25 | 14.07 | |||||||||||
Beta | 1.27 | 1.06 | 0.97 | |||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RVV | 23.63 | % | 17.00 | 1.39 | ||||||||||
Russell 2000 | 13.88 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 31
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | ||||||||||
Jan-June 2007* | 12.78 | % | ||||||||
One-Year | 23.89 | |||||||||
Three-Year | 19.78 | |||||||||
Five-Year | 25.08 | |||||||||
Since Inception (6/14/01) | 23.83 | |||||||||
EXPENSE RATIO | ||||||||||
Annual Operating Expenses | 1.40 | % | ||||||||
*Not annualized. | ||||||||||
CALENDAR YEAR TOTAL RETURNS | ||||||||||
Year | RVP | Year | RVP | |||||||
2006 | 19.4 | % | 2003 | 79.9 | % | |||||
2005 | 13.2 | 2002 | -14.7 | |||||||
2004 | 28.2 | |||||||||
TOP 10 POSITIONS % of Net Assets | ||||||||||
Ivanhoe Mines | 1.6 | % | ||||||||
Knight Capital Group Cl. A | 1.6 | |||||||||
Reliance Steel & Aluminum | 1.5 | |||||||||
Unit Corporation | 1.4 | |||||||||
Kennametal | 1.2 | |||||||||
Agnico-Eagle Mines | 1.2 | |||||||||
Silver Standard Resources | 1.2 | |||||||||
Christopher & Banks | 1.2 | |||||||||
Tennant Company | 1.0 | |||||||||
MSC Industrial Direct Cl. A | 1.0 | |||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | ||||||||||
Technology | 21.6 | % | ||||||||
Natural Resources | 18.1 | |||||||||
Industrial Products | 12.7 | |||||||||
Industrial Services | 9.8 | |||||||||
Health | 9.8 | |||||||||
Consumer Services | 7.6 | |||||||||
Financial Intermediaries | 5.1 | |||||||||
Consumer Products | 2.8 | |||||||||
Financial Services | 0.8 | |||||||||
Miscellaneous | 0.9 | |||||||||
Cash and Cash Equivalents | 10.8 | |||||||||
32 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $1,123 million | |||||||||||||
Weighted Average P/E Ratio | 20.4x* | |||||||||||||
Weighted Average P/B Ratio | 2.8x | |||||||||||||
Weighted Average Yield | 0.4% | |||||||||||||
Fund Net Assets | $2,758 million | |||||||||||||
Turnover Rate | 21% | |||||||||||||
Number of Holdings | 144 | |||||||||||||
Symbol | ||||||||||||||
Investment Class | RVPHX | |||||||||||||
Service Class | RYVPX | |||||||||||||
Consultant Class | RVPCX | |||||||||||||
Institutional Class | RVPIX | |||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
RVP | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 1.14 | 0.75 | 0.86 | |||||||||||
Standard Deviation | 18.77 | 15.25 | 14.07 | |||||||||||
Beta | 1.27 | 1.06 | 0.97 | |||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RVP | 25.08 | % | 18.77 | 1.34 | ||||||||||
Russell 2000 | 13.88 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 33
�� | ||||||||||
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | ||||||||||
Jan-June 2007* | 11.08 | % | ||||||||
One-Year | 17.31 | |||||||||
Three-Year | 4.06 | |||||||||
Five-Year | 15.00 | |||||||||
Since Inception (12/31/01) | 10.91 | |||||||||
EXPENSE RATIO | ||||||||||
Gross Annual Operating Expenses | 2.15 | % | ||||||||
Net Annual Operating Expenses | 1.69 | |||||||||
*Not annualized. | ||||||||||
CALENDAR YEAR TOTAL RETURNS | ||||||||||
Year | RTV | |||||||||
2006 | 8.5 | % | ||||||||
2005 | -1.8 | |||||||||
2004 | -9.6 | |||||||||
2003 | 90.7 | |||||||||
2002 | -13.4 | |||||||||
TOP 10 POSITIONS % of Net Assets | ||||||||||
MKS Instruments | 2.5 | % | ||||||||
ILOG ADR | 2.2 | |||||||||
DivX | 2.2 | |||||||||
OSI Systems | 2.0 | |||||||||
Eclipsys Corporation | 1.9 | |||||||||
Secure Computing | 1.8 | |||||||||
TTM Technologies | 1.7 | |||||||||
Transaction Systems Architects Cl. A | 1.6 | |||||||||
TheStreet.com | 1.6 | |||||||||
Callidus Software | 1.6 | |||||||||
PORTFOLIO INDUSTRY BREAKDOWN % of Net Assets | ||||||||||
Software | 18.5 | % | ||||||||
Internet Software and Services | 16.6 | |||||||||
Semiconductors and Equipment | 11.5 | |||||||||
Telecommunications | 9.6 | |||||||||
IT Services | 5.0 | |||||||||
Components and Systems | 4.9 | |||||||||
Commercial Services | 2.0 | |||||||||
Health Services | 1.9 | |||||||||
Advertising and Publishing | 1.5 | |||||||||
Automotive | 1.4 | |||||||||
Leisure and Entertainment | 1.1 | |||||||||
Distribution | 1.0 | |||||||||
Other Consumer Products | 0.9 | |||||||||
Other Consumer Services | 0.8 | |||||||||
Miscellaneous | 4.3 | |||||||||
Cash and Cash Equivalents | 19.0 | |||||||||
34 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $387 million | |||||||||||||
Weighted Average P/B Ratio | 2.3x | |||||||||||||
Weighted Average Yield | 0.1% | |||||||||||||
Fund Net Assets | $21 million | |||||||||||||
Turnover Rate | 99% | |||||||||||||
Number of Holdings | 73 | |||||||||||||
Symbol | ||||||||||||||
Service Class | RYTVX | |||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
RTV | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 0.61 | 0.49 | 0.62 | |||||||||||
Standard Deviation | 22.33 | 22.33 | 20.62 | |||||||||||
Beta | 1.37 | 1.65 | 1.52 | |||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RTV | 15.00 | % | 22.33 | 0.67 | ||||||||||
Russell 2000 | 13.88 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 35
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | ||||||||||
Jan-June 2007* | 10.10 | % | ||||||||
One-Year | 18.56 | |||||||||
Three-Year | 17.24 | |||||||||
Since Inception (6/30/03) | 19.29 | |||||||||
EXPENSE RATIO | ||||||||||
Gross Annual Operating Expenses | 1.72 | % | ||||||||
Net Annual Operating Expenses | 1.49 | |||||||||
*Not annualized. | ||||||||||
CALENDAR YEAR TOTAL RETURNS | ||||||||||
Year | ROH | |||||||||
2006 | 13.7 | % | ||||||||
2005 | 14.9 | |||||||||
2004 | 27.2 | |||||||||
TOP 10 POSITIONS % of Net Assets | ||||||||||
Pason Systems | 1.4 | % | ||||||||
Kennametal | 1.4 | |||||||||
CLARCOR | 1.4 | |||||||||
AllianceBernstein Holding L.P. | 1.3 | |||||||||
National Instruments | 1.3 | |||||||||
Kaydon Corporation | 1.2 | |||||||||
Perrigo Company | 1.2 | |||||||||
Plexus Corporation | 1.2 | |||||||||
CEC Entertainment | 1.2 | |||||||||
Franklin Electric | 1.2 | |||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | ||||||||||
Industrial Products | 23.9 | % | ||||||||
Technology | 15.2 | |||||||||
Industrial Services | 11.6 | |||||||||
Natural Resources | 8.6 | |||||||||
Consumer Services | 6.8 | |||||||||
Financial Services | 6.6 | |||||||||
Consumer Products | 6.0 | |||||||||
Financial Intermediaries | 2.0 | |||||||||
Health | 1.2 | |||||||||
Miscellaneous | 4.5 | |||||||||
Cash and Cash Equivalents | 13.6 | |||||||||
36 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $1,620 million | |||||||||||||
Weighted Average P/E Ratio | 19.3x | |||||||||||||
Weighted Average P/B Ratio | 2.9x | |||||||||||||
Weighted Average Yield | 0.8% | |||||||||||||
Fund Net Assets | $38 million | |||||||||||||
Turnover Rate | 36% | |||||||||||||
Number of Holdings | 99 | |||||||||||||
Symbol | ||||||||||||||
Investment Class | ROHHX | |||||||||||||
Service Class | RYOHX | |||||||||||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
ROH | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 1.02 | 0.78 | 0.93 | |||||||||||
Standard Deviation | 12.58 | 12.72 | 11.66 | |||||||||||
Beta | 1.39 | 1.40 | 1.28 | |||||||||||
RISK/RETURN COMPARISON Three-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
ROH | 17.24 | % | 12.58 | 1.37 | ||||||||||
Russell 2000 | 8.33 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 37
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | ||||||||||
Jan-June 2007* | 1.02 | % | ||||||||
One-Year | 14.77 | |||||||||
Three-Year | 11.12 | |||||||||
Since Inception (10/3/03) | 14.15 | |||||||||
EXPENSE RATIO | ||||||||||
Gross Annual Operating Expenses | 3.73 | % | ||||||||
Net Annual Operating Expenses | 1.49 | |||||||||
*Not annualized. | ||||||||||
CALENDAR YEAR TOTAL RETURNS | ||||||||||
Year | RDF | |||||||||
2006 | 16.8 | % | ||||||||
2005 | 7.6 | |||||||||
2004 | 13.4 | |||||||||
TOP 10 POSITIONS % of Net Assets | ||||||||||
Village Super Market Cl. A | 1.6 | % | ||||||||
Heidrick & Struggles International | 1.4 | |||||||||
EnPro Industries | 1.3 | |||||||||
American Technical Ceramics | 1.2 | |||||||||
Air Methods | 1.1 | |||||||||
Quidel | 1.1 | |||||||||
Intevac | 1.1 | |||||||||
American Software Cl. A | 1.1 | |||||||||
Stride Rite | 1.0 | |||||||||
BluePhoenix Solutions | 1.0 | |||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | ||||||||||
Health | 20.5 | % | ||||||||
Industrial Products | 14.5 | |||||||||
Technology | 12.6 | |||||||||
Natural Resources | 9.6 | |||||||||
Financial Intermediaries | 9.0 | |||||||||
Industrial Services | 8.6 | |||||||||
Consumer Services | 7.6 | |||||||||
Consumer Products | 7.2 | |||||||||
Financial Services | 0.8 | |||||||||
Miscellaneous | 4.5 | |||||||||
Cash and Cash Equivalents | 5.1 | |||||||||
38 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $277 million | |||||||||||||
Weighted Average P/E Ratio | 14.7x | |||||||||||||
Weighted Average P/B Ratio | 2.0x | |||||||||||||
Weighted Average Yield | 0.5% | |||||||||||||
Fund Net Assets | $4 million | |||||||||||||
Turnover Rate | 55% | |||||||||||||
Number of Holdings | 131 | |||||||||||||
Symbol | ||||||||||||||
Service Class | RYDFX | |||||||||||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
RDF | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 0.64 | 0.78 | 0.93 | |||||||||||
Standard Deviation | 11.56 | 12.72 | 11.66 | |||||||||||
Beta | 1.23 | 1.40 | 1.28 | |||||||||||
RISK/RETURN COMPARISON Three-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RDF | 11.12 | % | 11.56 | 0.96 | ||||||||||
Russell 2000 | 8.33 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 39
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Jan-June 2007* | 1.49 | % | |||||||
One-Year | 15.89 | ||||||||
Three-Year | 17.43 | ||||||||
Since Inception (12/31/03) | 15.10 | ||||||||
EXPENSE RATIO | |||||||||
Gross Annual Operating Expenses | 3.70 | % | |||||||
Net Annual Operating Expenses | 1.49 | ||||||||
*Not annualized. | |||||||||
CALENDAR YEAR TOTAL RETURNS | |||||||||
Year | RFS | ||||||||
2006 | 24.8 | % | |||||||
2005 | 12.2 | ||||||||
2004 | 15.1 | ||||||||
TOP 10 POSITIONS % of Net Assets | |||||||||
GAMCO Investors Cl. A | 3.1 | % | |||||||
AllianceBernstein Holding L.P. | 2.9 | ||||||||
Highbury Financial | 1.5 | ||||||||
Westwood Holdings Group | 1.4 | ||||||||
Peapack-Gladstone Financial | 1.3 | ||||||||
Bank of N.T. Butterfield & Son | 1.3 | ||||||||
Morningstar | 1.3 | ||||||||
Federated Investors Cl. B | 1.2 | ||||||||
JAFCO | 1.2 | ||||||||
Affiliated Managers Group | 1.2 | ||||||||
PORTFOLIO INDUSTRY BREAKDOWN % of Net Assets | |||||||||
Investment Management | 19.9 | % | |||||||
Banking | 19.8 | ||||||||
Securities Brokers | 12.5 | ||||||||
Insurance | 8.0 | ||||||||
Other Financial Intermediaries | 5.9 | ||||||||
Insurance Brokers | 2.8 | ||||||||
Real Estate Investment Trusts | 2.7 | ||||||||
Information and Processing | 2.6 | ||||||||
Commercial Services | 2.0 | ||||||||
Other Financial Services | 2.0 | ||||||||
Software | 1.2 | ||||||||
Closed-end Funds | 1.0 | ||||||||
Other Consumer Services | 0.5 | ||||||||
Miscellaneous | 2.1 | ||||||||
Cash and Cash Equivalents | 17.0 | ||||||||
40 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $850 million | |||||||||||||
Weighted Average P/E Ratio | 18.6x | |||||||||||||
Weighted Average P/B Ratio | 2.1x | |||||||||||||
Weighted Average Yield | 1.7% | |||||||||||||
Fund Net Assets | $5 million | |||||||||||||
Turnover Rate | 22% | |||||||||||||
Number of Holdings | 106 | |||||||||||||
Symbol | ||||||||||||||
Service Class | RYFSX | |||||||||||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
RFS | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 1.69 | 0.83 | 1.14 | |||||||||||
Standard Deviation | 7.42 | 8.53 | 8.06 | |||||||||||
Beta | 0.79 | 0.93 | 0.72 | |||||||||||
RISK/RETURN COMPARISON Three-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RFS | 17.43 | % | 7.42 | 2.35 | ||||||||||
Russell 2000 | 8.33 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 41
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Jan-June 2007* | 6.82 | % | |||||||
One-Year | 19.36 | ||||||||
Three-Year | 15.56 | ||||||||
Since Inception (5/3/04) | 14.94 | ||||||||
EXPENSE RATIO | |||||||||
Gross Annual Operating Expenses | 2.72 | % | |||||||
Net Annual Operating Expenses | 1.49 | ||||||||
*Not annualized. | |||||||||
CALENDAR YEAR TOTAL RETURNS | |||||||||
Year | RDV | ||||||||
2006 | 19.9 | % | |||||||
2005 | 7.3 | ||||||||
TOP 10 POSITIONS % of Net Assets | |||||||||
B&G Foods | 2.7 | % | |||||||
AllianceBernstein Holding L.P. | 2.4 | ||||||||
Gallagher (Arthur J.) & Co. | 1.6 | ||||||||
Helmerich & Payne | 1.6 | ||||||||
Greif Cl. A | 1.5 | ||||||||
BOK Financial | 1.5 | ||||||||
Quadra Realty Trust | 1.5 | ||||||||
GAMCO Investors Cl. A | 1.5 | ||||||||
NN | 1.4 | ||||||||
SEI Investments | 1.4 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Financial Intermediaries | 19.8 | % | |||||||
Industrial Products | 18.0 | ||||||||
Financial Services | 13.4 | ||||||||
Natural Resources | 12.1 | ||||||||
Consumer Products | 6.1 | ||||||||
Consumer Services | 5.0 | ||||||||
Technology | 4.9 | ||||||||
Industrial Services | 3.8 | ||||||||
Utilities | 2.1 | ||||||||
Health | 1.9 | ||||||||
Miscellaneous | 4.7 | ||||||||
Preferred Stocks | 1.0 | ||||||||
Cash and Cash Equivalents | 7.2 | ||||||||
42 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $1,219 million | |||||||||||||
Weighted Average P/E Ratio | 17.4x | |||||||||||||
Weighted Average P/B Ratio | 2.6x | |||||||||||||
Weighted Average Yield | 2.5% | |||||||||||||
Fund Net Assets | $8 million | |||||||||||||
Turnover Rate | 54% | |||||||||||||
Number of Holdings | 139 | |||||||||||||
Symbol | ||||||||||||||
Service Class | RYDVX | |||||||||||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Decile | |||||||||||||
RDV | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 1.37 | 0.78 | 1.09 | |||||||||||
Standard Deviation | 8.03 | 12.72 | 10.65 | |||||||||||
Beta | 0.94 | 1.40 | 1.16 | |||||||||||
RISK/RETURN COMPARISON Three-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RDV | 15.56 | % | 8.03 | 1.94 | ||||||||||
Russell 2000 | 8.33 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 43
CUMULATIVE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Since Inception (12/29/06) | 15.80 | % | |||||||
EXPENSE RATIO | |||||||||
Annual Operating Expenses | 1.69 | % | |||||||
TOP 10 POSITIONS % of Net Assets | |||||||||
Metal Management | 3.1 | % | |||||||
Knight Capital Group Cl. A | 2.6 | ||||||||
Lincoln Electric Holdings | 2.4 | ||||||||
Ensign Energy Services | 2.2 | ||||||||
Silver Standard Resources | 2.0 | ||||||||
Reliance Steel & Aluminum | 2.0 | ||||||||
Fronteer Development Group | 1.8 | ||||||||
Trican Well Service | 1.8 | ||||||||
Umbro | 1.8 | ||||||||
Alten | 1.7 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Industrial Products | 23.8 | % | |||||||
Natural Resources | 20.3 | ||||||||
Consumer Products | 6.9 | ||||||||
Financial Services | 5.1 | ||||||||
Financial Intermediaries | 4.2 | ||||||||
Industrial Services | 3.1 | ||||||||
Technology | 2.4 | ||||||||
Health | 2.3 | ||||||||
Consumer Services | 2.0 | ||||||||
Preferred Stock | 0.2 | ||||||||
Cash and Cash Equivalents | 29.7 | ||||||||
44 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | |||||
Average Market Capitalization | $1,194 million | ||||
Weighted Average P/E Ratio | 16.5x | ||||
Weighted Average P/B Ratio | 3.2x | ||||
Weighted Average Yield | 0.8% | ||||
Fund Net Assets | $17 million | ||||
Turnover Rate | 7% | ||||
Number of Holdings | 59 | ||||
Symbol | |||||
Service Class | RIVFX | ||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | |||||
PORTFOLIO COUNTRY BREAKDOWN | |||||
% of Net Assets | |||||
United States | 22.4 | % | |||
Canada | 18.0 | ||||
Germany | 4.5 | ||||
France | 4.1 | ||||
Austria | 2.5 | ||||
Finland | 2.4 | ||||
Brazil | 2.1 | ||||
United Kingdom | 1.8 | ||||
Cayman Islands | 1.6 | ||||
Japan | 1.5 | ||||
Italy | 1.3 | ||||
British West Indies | 1.1 | ||||
Belgium | 1.1 | ||||
Mexico | 1.1 | ||||
Turkey | 1.1 | ||||
South Africa | 1.0 | ||||
Ireland | 0.9 | ||||
Belize | 0.8 | ||||
Norway | 0.8 | ||||
The Royce Funds 2007 Semiannual Report to Shareholders | 45
CUMULATIVE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Since Inception (12/29/06) | 10.30 | % | |||||||
EXPENSE RATIO | |||||||||
Annual Operating Expenses | 1.69 | % | |||||||
TOP 10 POSITIONS % of Net Assets | |||||||||
Takkt | 2.6 | % | |||||||
CapMan Cl. B | 2.5 | ||||||||
Manitou BF | 2.5 | ||||||||
Van De Velde | 2.4 | ||||||||
Mayr-Melnhof Karton | 2.4 | ||||||||
Alten | 2.2 | ||||||||
Umbro | 2.1 | ||||||||
Pfeiffer Vacuum Technology | 2.0 | ||||||||
Munters | 2.0 | ||||||||
Ekornes | 1.9 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Industrial Products | 20.2 | % | |||||||
Consumer Products | 18.1 | ||||||||
Technology | 12.6 | ||||||||
Financial Services | 7.2 | ||||||||
Consumer Services | 4.6 | ||||||||
Industrial Services | 2.8 | ||||||||
Health | 1.9 | ||||||||
Cash and Cash Equivalents | 32.6 | ||||||||
46 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | |||||
Average Market Capitalization | $785 million | ||||
Weighted Average P/E Ratio | 19.1x | ||||
Weighted Average P/B Ratio | 3.6x | ||||
Weighted Average Yield | 1.8% | ||||
Fund Net Assets | $5 million | ||||
Turnover Rate | 16% | ||||
Number of Holdings | 60 | ||||
Symbol | |||||
Service Class | RISCX | ||||
The Funds’ P/E ratio calculations exclude companies with zero or negative earnings. | |||||
PORTFOLIO COUNTRY BREAKDOWN | |||||
% of Net Assets | |||||
Germany | 15.1 | % | |||
France | 12.7 | ||||
United Kingdom | 12.2 | ||||
Italy | 6.4 | ||||
Finland | 5.5 | ||||
Austria | 4.1 | ||||
Belgium | 3.8 | ||||
Sweden | 2.4 | ||||
Norway | 2.2 | ||||
Turkey | 1.0 | ||||
Ireland | 0.6 | ||||
Denmark | 0.5 | ||||
Netherlands | 0.5 | ||||
Switzerland | 0.4 | ||||
The Royce Funds 2007 Semiannual Report to Shareholders | 47
Schedules of Investments
Pennsylvania Mutual Fund |
SHARES | VALUE | SHARES | VALUE | |||||||||
COMMON STOCKS – 93.9% | International Speedway Cl. A | 167,100 | $ | 8,807,841 | ||||||||
908,900 | 11,597,564 | |||||||||||
Consumer Products – 7.0% | Steiner Leisure a | 40,700 | 1,999,184 | |||||||||
Apparel and Shoes - 1.8% | ||||||||||||
Kenneth Cole Productions Cl. A | 378,150 | $ | 9,340,305 | 25,255,276 | ||||||||
Columbia Sportswear | 195,100 | 13,399,468 | ||||||||||
K-Swiss Cl. A | 994,100 | 28,162,853 | Media and Broadcasting - 0.4% | |||||||||
Liz Claiborne | 13,200 | 492,360 | Westwood One | 2,576,900 | 18,527,911 | |||||||
Shoe Pavilion a | 120,000 | 354,000 | ||||||||||
Stride Rite | 685,800 | 13,894,308 | Restaurants and Lodgings - 1.1% | |||||||||
Timberland Company Cl. A a | 69,300 | 1,745,667 | Applebee’s International | 121,400 | 2,925,740 | |||||||
True Religion Apparel a | 60,800 | 1,236,064 | Bob Evans Farms | 73,294 | 2,700,884 | |||||||
15,500 | 609,770 | CBRL Group | 190,551 | 8,094,606 | ||||||||
Weyco Group b | 590,500 | 15,902,165 | CEC Entertainment a | 719,100 | 25,312,320 | |||||||
Wolverine World Wide | 48,500 | 1,343,935 | 208,600 | 951,216 | ||||||||
IHOP Corporation | 45,400 | 2,471,122 | ||||||||||
86,480,895 | Ruby Tuesday | 374,900 | 9,871,117 | |||||||||
Collectibles - 0.1% | 52,327,005 | |||||||||||
Russ Berrie & Company a | 367,700 | 6,850,251 | ||||||||||
Retail Stores - 4.4% | ||||||||||||
Food/Beverage/Tobacco - 0.2% | America’s Car-Mart a | 465,100 | 6,320,709 | |||||||||
International Flavors & Fragrances | 100,000 | 5,214,000 | AnnTaylor Stores a | 206,400 | 7,310,688 | |||||||
J.M. Smucker Company (The) | 34,100 | 2,170,806 | BJ’s Wholesale Club a | 231,300 | 8,333,739 | |||||||
Buckle (The) | 893,450 | 35,201,930 | ||||||||||
7,384,806 | 350,000 | 8,925,000 | ||||||||||
Cato Corporation Cl. A | 1,348,750 | 29,591,575 | ||||||||||
Home Furnishing and Appliances - 1.7% | 1,069,200 | 11,579,436 | ||||||||||
American Woodmark | 386,378 | 13,368,679 | Deb Shops | 464,441 | 12,841,794 | |||||||
Ethan Allen Interiors | 1,042,600 | 35,709,050 | Dollar Tree Stores a | 78,200 | 3,405,610 | |||||||
Furniture Brands International | 512,600 | 7,278,920 | Dress Barn (The) a | 505,422 | 10,371,259 | |||||||
National Presto Industries | 7,400 | 461,316 | Finish Line (The) Cl. A | 850,900 | 7,751,699 | |||||||
Natuzzi ADR a | 1,057,700 | 8,408,715 | Longs Drug Stores | 39,700 | 2,085,044 | |||||||
Stanley Furniture b | 786,024 | 16,144,933 | The Men’s Wearhouse | 185,800 | 9,488,806 | |||||||
Pep Boys-Manny, Moe & Jack | 220,900 | 4,453,344 | ||||||||||
81,371,613 | 1,151,200 | 9,773,688 | ||||||||||
Ross Stores | 14,500 | 446,600 | ||||||||||
Publishing - 0.4% | Talbots | 223,450 | 5,592,954 | |||||||||
Journal Communications Cl. A | 58,700 | 763,687 | Tiffany & Co. | 500,000 | 26,530,000 | |||||||
586,400 | 21,075,216 | Tuesday Morning | 611,600 | 7,559,376 | ||||||||
Weis Markets | 90,700 | 3,674,257 | ||||||||||
21,838,903 | ||||||||||||
211,237,508 | ||||||||||||
Sports and Recreation - 1.7% | ||||||||||||
Arctic Cat | 49,500 | 980,100 | Other Consumer Services - 1.4% | |||||||||
Callaway Golf | 352,400 | 6,276,244 | 800 | 36,824 | ||||||||
Monaco Coach | 751,800 | 10,788,330 | Collectors Universe | 54,187 | 828,519 | |||||||
Polaris Industries | 163,300 | 8,844,328 | 521,200 | 8,490,348 | ||||||||
Thor Industries | 745,000 | 33,629,300 | ITT Educational Services a | 36,100 | 4,237,418 | |||||||
Winnebago Industries | 705,600 | 20,829,312 | Jackson Hewitt Tax Service | 36,800 | 1,034,448 | |||||||
Lincoln Educational Services a | 83,491 | 1,240,676 | ||||||||||
81,347,614 | MoneyGram International | 532,400 | 14,880,580 | |||||||||
43,000 | 677,680 | |||||||||||
Other Consumer Products - 1.1% | Sotheby’s | 282,900 | 13,019,058 | |||||||||
Burnham Holdings Cl. A | 117,964 | 1,916,915 | Strayer Education | 3,400 | 447,814 | |||||||
Fossil a | 383,200 | 11,300,568 | Universal Technical Institute a | 942,800 | 23,937,692 | |||||||
Matthews International Cl. A | 38,048 | 1,659,273 | ||||||||||
177,500 | 1,977,350 | 68,831,057 | ||||||||||
RC2 Corporation a | 670,700 | 26,834,707 | ||||||||||
Sonic Solutions a | 808,800 | 10,198,968 | Total (Cost $345,395,080) | 396,445,707 | ||||||||
53,887,781 | Financial Intermediaries – 6.9% | |||||||||||
Banking - 0.8% | ||||||||||||
Total (Cost $259,627,406) | 339,161,863 | BOK Financial | 439,600 | 23,483,432 | ||||||||
Boston Private Financial Holdings | 642,300 | 17,258,601 | ||||||||||
Consumer Services – 8.2% | ||||||||||||
Direct Marketing - 0.4% | 40,742,033 | |||||||||||
Nu Skin Enterprises Cl. A | 1,228,300 | 20,266,950 | ||||||||||
Leisure and Entertainment - 0.5% | ||||||||||||
Carmike Cinemas c | 76,100 | 1,671,156 | ||||||||||
Dover Downs Gaming & Entertainment | 78,583 | 1,179,531 |
48 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
SHARES | VALUE | SHARES | VALUE | |||||||||
Financial Intermediaries (continued) | AllianceBernstein Holding L.P. | 865,400 | $ | 75,367,686 | ||||||||
Insurance - 3.1% | Federated Investors Cl. B | 606,200 | 23,235,646 | |||||||||
Alleghany Corporation a | 78,275 | $ | 31,818,788 | GAMCO Investors Cl. A | 142,100 | 7,964,705 | ||||||
AmCOMP a | 285,000 | 2,778,750 | Waddel & Reed Financial Cl. A | 758,500 | 19,728,585 | |||||||
Amerisafe a | 49,300 | 967,759 | Westwood Holdings Group | 98,400 | 3,361,344 | |||||||
Argonaut Group | 181,000 | 5,649,010 | ||||||||||
Aspen Insurance Holdings | 210,000 | 5,894,700 | 184,993,883 | |||||||||
Assured Guaranty | 580,100 | 17,147,756 | ||||||||||
Baldwin & Lyons Cl. B | 306,000 | 7,949,880 | Other Financial Services - 0.1% | |||||||||
CNA Surety a | 100,000 | 1,891,000 | 175,700 | 1,296,666 | ||||||||
Commerce Group | 25,700 | 892,304 | ||||||||||
Erie Indemnity Cl. A | 261,000 | 14,104,440 | Total (Cost $218,108,343) | 289,041,579 | ||||||||
Horace Mann Educators | 111,300 | 2,364,012 | ||||||||||
ProAssurance Corporation a | 373,454 | 20,790,184 | Health – 6.4% | |||||||||
RLI | 102,831 | 5,753,394 | Commercial Services - 0.1% | |||||||||
RenaissanceRe Holdings | 27,500 | 1,704,725 | First Consulting Group a | 46,800 | 444,600 | |||||||
Security Capital Assurance | 254,600 | 7,859,502 | Owens & Minor | 100,000 | 3,494,000 | |||||||
Stewart Information Services | 116,600 | 4,644,178 | PAREXEL International a | 26,500 | 1,114,590 | |||||||
Transatlantic Holdings | 22,800 | 1,621,764 | ||||||||||
Wesco Financial | 16,965 | 6,531,525 | 5,053,190 | |||||||||
Zenith National Insurance | 209,350 | 9,858,292 | ||||||||||
Drugs and Biotech - 1.6% | ||||||||||||
150,221,963 | Alpharma Cl. A a | 178,200 | 4,634,982 | |||||||||
Applera Corporation- Celera Group a | 446,300 | 5,534,120 | ||||||||||
Real Estate Investment Trusts - 0.2% | 30,000 | 519,000 | ||||||||||
Capital Trust Cl. A | 219,400 | 7,490,316 | Caraco Pharmaceutical Laboratories a | 72,480 | 1,100,246 | |||||||
455,230 | 15,582,523 | |||||||||||
Securities Brokers - 1.8% | 700,153 | 8,359,827 | ||||||||||
85,000 | 4,871,350 | Lexicon Pharmaceuticals a | 1,497,400 | 4,806,654 | ||||||||
Greenhill & Co. c | 70,000 | 4,809,700 | Luminex Corporation a | 50,300 | 619,193 | |||||||
56,000 | 1,302,000 | 175,000 | 6,508,250 | |||||||||
Investment Technology Group a | 250,000 | 10,832,500 | Origin Agritech a | 375,900 | 3,101,175 | |||||||
Jefferies Group | 437,200 | 11,795,656 | Perrigo Company | 1,145,809 | 22,434,940 | |||||||
Knight Capital Group Cl. A a | 2,237,600 | 37,144,160 | 31,200 | 735,072 | ||||||||
Lazard Cl. A | 104,000 | 4,683,120 | Strategic Diagnostics a | 301,300 | 1,361,876 | |||||||
Piper Jaffray a | 192,600 | 10,733,598 | ViroPharma a | 122,400 | 1,689,120 | |||||||
50,000 | 2,944,500 | Zila a | 1,633,500 | 2,270,565 | ||||||||
89,116,584 | 79,257,543 | |||||||||||
Other Financial Intermediaries - 1.0% | Health Services - 1.4% | |||||||||||
KKR Financial | 721,300 | 17,967,583 | Accelrys a | 40,000 | 251,600 | |||||||
256,100 | 4,607,239 | Cross Country Healthcare a | 481,300 | 8,028,084 | ||||||||
TSX Group | 654,100 | 25,605,229 | Healthcare Services Group | 289,900 | 8,552,050 | |||||||
515,000 | 9,326,650 | |||||||||||
48,180,051 | Hooper Holmes a | 2,392,970 | 8,016,450 | |||||||||
Lincare Holdings a | 360,000 | 14,346,000 | ||||||||||
Total (Cost $254,246,686) | 335,750,947 | Mediware Information Systems a | 40,100 | 288,720 | ||||||||
On Assignment a | 85,000 | 911,200 | ||||||||||
Financial Services – 6.0% | Res-Care a | 109,390 | 2,312,505 | |||||||||
Information and Processing - 1.2% | 958,575 | 12,912,005 | ||||||||||
eFunds Corporation a | 167,000 | 5,893,430 | ||||||||||
Interactive Data | 258,800 | 6,930,664 | 64,945,264 | |||||||||
Morningstar a | 327,200 | 15,386,580 | ||||||||||
SEI Investments | 965,800 | 28,046,832 | Medical Products and Devices - 2.1% | |||||||||
Arrow International | 480,801 | 18,405,062 | ||||||||||
56,257,506 | 140,700 | 994,749 | ||||||||||
Golden Meditech Company a | 660,900 | 380,352 | ||||||||||
Insurance Brokers - 0.9% | Hillenbrand Industries | 26,700 | 1,735,500 | |||||||||
28,765 | 3,472,223 | 31,000 | 1,331,140 | |||||||||
Gallagher (Arthur J.) & Co. | 668,900 | 18,648,932 | IDEXX Laboratories a | 221,100 | 20,922,693 | |||||||
Health Benefits Direct a | 351,100 | 825,085 | Invacare Corporation | 386,400 | 7,082,712 | |||||||
Hilb Rogal & Hobbs | 549,400 | 23,547,284 | Mentor Corporation | 23,100 | 939,708 | |||||||
Possis Medical a | 30,000 | 326,400 | ||||||||||
46,493,524 | STERIS Corporation | 442,600 | 13,543,560 | |||||||||
Syneron Medical a | 69,200 | 1,726,540 | ||||||||||
Investment Management - 3.8% | Thoratec Corporation a | 372,600 | 6,852,114 | |||||||||
AGF Management Cl. B | 820,100 | 27,961,541 | ||||||||||
Affiliated Managers Group a | 212,600 | 27,374,376 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 49 |
Schedules of Investments
Pennsylvania Mutual Fund (continued) |
SHARES | VALUE | SHARES | VALUE | |||||||||
Health (continued) | Nordson Corporation | 270,500 | $ | 13,568,280 | ||||||||
Medical Products and Devices (continued) | Regal-Beloit | 55,800 | 2,596,932 | |||||||||
50,000 | $ | 3,863,500 | Rofin-Sinar Technologies a | 606,504 | 41,848,776 | |||||||
Vital Signs | 306,595 | 17,031,352 | Tennant Company | 309,300 | 11,289,450 | |||||||
Young Innovations | 222,550 | 6,494,009 | Woodward Governor | 844,016 | 45,298,339 | |||||||
101,629,391 | 294,291,626 | |||||||||||
Personal Care - 1.2% | Metal Fabrication and Distribution - 3.7% | |||||||||||
Inter Parfums | 863,200 | 22,978,384 | Chaparral Steel | 463,886 | 33,339,487 | |||||||
838,810 | 13,899,082 | Commercial Metals | 30,700 | 1,036,739 | ||||||||
Regis Corporation | 481,600 | 18,421,200 | Gibraltar Industries | 421,212 | 9,329,846 | |||||||
24,800 | 1,109,552 | Haynes International a | 58,423 | 4,932,654 | ||||||||
Insteel Industries | 84,780 | 1,526,040 | ||||||||||
56,408,218 | IPSCO | 92,150 | 14,640,792 | |||||||||
Kaydon Corporation | 223,800 | 11,664,456 | ||||||||||
Total (Cost $244,747,549) | 307,293,606 | Metal Management | 538,200 | 23,718,474 | ||||||||
Quanex Corporation | 258,000 | 12,564,600 | ||||||||||
Industrial Products – 17.0% | Reliance Steel & Aluminum | 121,300 | 6,824,338 | |||||||||
Automotive - 0.7% | Schnitzer Steel Industries Cl. A | 513,900 | 24,636,366 | |||||||||
Dorman Products a | 518,260 | 7,162,353 | Steel Dynamics | 514,500 | 21,562,695 | |||||||
Gentex Corporation | 527,600 | 10,388,444 | 289,212 | 10,188,939 | ||||||||
Noble International | 100,700 | 2,058,308 | ||||||||||
Strattec Security a | 150,000 | 7,050,000 | 175,965,426 | |||||||||
Superior Industries International | 50,000 | 1,088,000 | ||||||||||
Wescast Industries Cl. A | 373,700 | 5,612,955 | Paper and Packaging - 0.2% | |||||||||
AptarGroup | 22,200 | 789,432 | ||||||||||
33,360,060 | Greif Cl. A | 131,700 | 7,850,637 | |||||||||
Building Systems and Components - 1.6% | 8,640,069 | |||||||||||
AAON | 125,850 | 4,008,322 | ||||||||||
Drew Industries a | 596,400 | 19,764,696 | Specialty Chemicals and Materials - 0.9% | |||||||||
Preformed Line Products | 189,786 | 9,111,626 | Aceto Corporation | 41,300 | 382,851 | |||||||
Simpson Manufacturing | 1,183,700 | 39,938,038 | Balchem Corporation | 54,425 | 988,902 | |||||||
Teleflex | 58,300 | 4,767,774 | Cabot Corporation | 289,300 | 13,793,824 | |||||||
Sensient Technologies | 50,000 | 1,269,500 | ||||||||||
77,590,456 | Westlake Chemical | 855,100 | 24,045,412 | |||||||||
Construction Materials - 0.7% | 40,480,489 | |||||||||||
Ash Grove Cement | 50,018 | 12,004,320 | ||||||||||
Carlisle Companies | 33,000 | 1,534,830 | Other Industrial Products - 1.9% | |||||||||
Eagle Materials | 404,700 | 19,850,535 | Brady Corporation Cl. A | 1,096,900 | 40,738,866 | |||||||
164,700 | 8,124,651 | Diebold | 375,500 | 19,601,100 | ||||||||
250,000 | 4,907,500 | Electro Rent | 192,000 | 2,791,680 | ||||||||
HNI Corporation | 253,700 | 10,401,700 | ||||||||||
46,421,836 | Mettler-Toledo International a | 171,300 | 16,360,863 | |||||||||
Herman Miller | 15,000 | 474,000 | ||||||||||
Industrial Components - 1.2% | Smith (A.O.) Corporation | 15,600 | 622,284 | |||||||||
AMETEK | 5,100 | 202,368 | ||||||||||
Bel Fuse Cl. B | 166,901 | 5,679,641 | 90,990,493 | |||||||||
CLARCOR | 532,800 | 19,942,704 | ||||||||||
PerkinElmer | 645,400 | 16,819,124 | Total (Cost $590,768,215) | 824,008,115 | ||||||||
Powell Industries a | 317,000 | 10,067,920 | ||||||||||
Watts Water Technologies Cl. A | 94,900 | 3,555,903 | Industrial Services – 9.1% | |||||||||
Advertising and Publishing - 0.1% | ||||||||||||
56,267,660 | Journal Register | 194,600 | 871,808 | |||||||||
100,000 | 2,946,000 | |||||||||||
Machinery - 6.1% | ||||||||||||
Applied Industrial Technologies | 620,000 | 18,290,000 | 3,817,808 | |||||||||
Cascade Corporation | 2,100 | 164,724 | ||||||||||
423,500 | 12,920,985 | Commercial Services - 5.9% | ||||||||||
Eagle Test Systems a | 870,231 | 13,975,910 | 118,000 | 954,620 | ||||||||
Franklin Electric | 431,354 | 20,351,282 | Administaff | 432,000 | 14,467,680 | |||||||
Graco | 640,250 | 25,789,270 | Barrett Business Services b | 613,801 | 15,854,480 | |||||||
Hurco Companies a | 16,700 | 834,666 | CBIZ a | 6,875 | 50,531 | |||||||
IDEX Corporation | 172,500 | 6,648,150 | CRA International a | 88,713 | 4,275,967 | |||||||
Kennametal | 52,900 | 4,339,387 | Copart a | 851,500 | 26,047,385 | |||||||
Lincoln Electric Holdings | 621,586 | 46,146,545 | eResearch Technology a | 816,050 | 7,760,636 | |||||||
Mueller Water Products Cl. A | 131,200 | 2,238,272 | 157,000 | 5,970,710 | ||||||||
National Instruments | 859,400 | 27,990,658 | 30,915 | 701,770 |
50 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
SHARES | VALUE | SHARES | VALUE | |||||||||
Industrial Services (continued) | 666,700 | $ | 10,407,187 | |||||||||
Commercial Services (continued) | Lufkin Industries | 42,826 | 2,764,418 | |||||||||
Grupo Aeroportuario del Pacifico ADR | 160,000 | $ | 7,891,200 | Oil States International a | 982,400 | 40,612,416 | ||||||
Heidrick & Struggles International a | 500,600 | 25,650,744 | Pason Systems | 1,989,700 | 31,155,312 | |||||||
Hewitt Associates Cl. A a | 837,100 | 26,787,200 | Patterson-UTI Energy | 401,900 | 10,533,799 | |||||||
598,100 | 9,557,638 | Precision Drilling Trust | 256,200 | 6,264,090 | ||||||||
Korn/Ferry International a | 996,400 | 26,165,464 | RPC | 1,107,237 | 18,867,318 | |||||||
Labor Ready a | 829,100 | 19,160,501 | Tidewater | 7,600 | 538,688 | |||||||
1,455,500 | 21,992,605 | Trican Well Service | 1,473,700 | 30,006,620 | ||||||||
MPS Group a | 944,100 | 12,622,617 | Willbros Group a | 181,700 | 5,392,856 | |||||||
183,100 | 1,455,645 | |||||||||||
820,600 | 15,230,336 | 237,507,146 | ||||||||||
Portfolio Recovery Associates c | 64,600 | 3,877,292 | ||||||||||
RCM Technologies a | 179,500 | 1,398,305 | Oil and Gas - 4.0% | |||||||||
1,197,766 | 8,396,340 | 110,200 | 4,058,666 | |||||||||
ServiceMaster Company (The) | 253,400 | 3,917,564 | CE Franklin a | 89,740 | 1,045,471 | |||||||
Viad Corporation | 55,000 | 2,319,350 | Cimarex Energy | 914,514 | 36,040,997 | |||||||
Watson Wyatt Worldwide Cl. A | 409,500 | 20,671,560 | Crosstex Energy | 512,000 | 14,709,760 | |||||||
Wright Express a | 20,000 | 685,400 | Edge Petroleum a | 276,900 | 3,879,369 | |||||||
Mariner Energy a | 912,100 | 22,118,425 | ||||||||||
283,863,540 | 210,800 | 0 | ||||||||||
St. Mary Land & Exploration | 704,000 | 25,780,480 | ||||||||||
Engineering and Construction - 0.3% | SEACOR Holdings a | 231,100 | 21,575,496 | |||||||||
Exponent a | 330,700 | 7,397,759 | 703,580 | 17,877,968 | ||||||||
Hanfeng Evergreen a | 107,500 | 1,210,983 | Unit Corporation a | 737,100 | 46,370,961 | |||||||
196,556 | 6,480,451 | |||||||||||
100,000 | 2,623,000 | 193,457,593 | ||||||||||
17,712,193 | Precious Metals and Mining - 3.6% | |||||||||||
Agnico-Eagle Mines | 761,100 | 27,780,150 | ||||||||||
Food and Tobacco Processors - 0.2% | Apex Silver Mines a | 209,500 | 4,227,710 | |||||||||
Sanderson Farms | 7,300 | 328,646 | Eldorado Gold a | 1,989,400 | 11,598,202 | |||||||
Sunopta a | 157,910 | 1,760,697 | Golden Star Resources a | 1,675,300 | 6,215,363 | |||||||
1,009,600 | 6,814,800 | Hecla Mining a | 2,641,800 | 22,560,972 | ||||||||
1,876,840 | 11,223,503 | |||||||||||
8,904,143 | Ivanhoe Mines a | 1,829,700 | 26,054,928 | |||||||||
Kingsgate Consolidated | 109,447 | 514,980 | ||||||||||
Industrial Distribution - 1.2% | Meridian Gold a | 811,600 | 22,383,928 | |||||||||
MSC Industrial Direct Cl. A | 113,800 | 6,259,000 | 587,700 | 6,752,673 | ||||||||
Mine Safety Appliances | 445,000 | 19,473,200 | Northgate Minerals a | 481,000 | 1,394,900 | |||||||
Ritchie Bros. Auctioneers | 527,400 | 33,025,788 | Pan American Silver a | 355,600 | 9,362,948 | |||||||
Silver Standard Resources a | 734,000 | 25,227,580 | ||||||||||
58,757,988 | ||||||||||||
175,297,837 | ||||||||||||
Printing - 0.1% | ||||||||||||
Courier Corporation | 8,700 | 348,000 | Real Estate - 0.5% | |||||||||
The St. Joe Company | 517,800 | 23,994,852 | ||||||||||
Transportation and Logistics - 1.2% | ||||||||||||
ABX Air a | 158,500 | 1,277,510 | Other Natural Resources - 0.1% | |||||||||
Arkansas Best | 509,100 | 19,839,627 | AMCOL International | 24,000 | 655,440 | |||||||
Heartland Express | 448,400 | 7,308,920 | ||||||||||
Landstar System | 192,700 | 9,297,775 | Total (Cost $391,621,399) | 630,912,868 | ||||||||
Nordic American Tanker Shipping | 110,300 | 4,504,652 | ||||||||||
Patriot Transportation Holding a | 80,800 | 7,005,360 | Technology – 15.4% | |||||||||
Universal Truckload Services a | 528,580 | 10,502,885 | Aerospace and Defense - 0.7% | |||||||||
26,100 | 1,930,356 | |||||||||||
59,736,729 | Curtiss-Wright | 387,100 | 18,042,731 | |||||||||
110,100 | 5,092,125 | |||||||||||
Other Industrial Services - 0.1% | HEICO Corporation | 29,100 | 1,224,528 | |||||||||
Landauer | 135,000 | 6,648,750 | Innovative Solutions and Support a | 114,400 | 2,656,368 | |||||||
Integral Systems | 230,581 | 5,605,424 | ||||||||||
Total (Cost $371,042,236) | 439,789,151 | TVI Corporation a | 549,320 | 318,606 | ||||||||
Teledyne Technologies a | 20,000 | 919,000 | ||||||||||
Natural Resources – 13.1% | ||||||||||||
Energy Services - 4.9% | 35,789,138 | |||||||||||
Calfrac Well Services | 145,900 | 2,870,748 | ||||||||||
Carbo Ceramics | 544,300 | 23,845,783 | Components and Systems - 3.4% | |||||||||
Ensign Energy Services | 2,338,600 | 41,711,709 | 300,440 | 4,855,110 | ||||||||
43,000 | 755,510 | |||||||||||
Helmerich & Payne | 332,600 | 11,780,692 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 51 |
Schedules of Investments
Pennsylvania Mutual Fund (continued) |
SHARES | VALUE | SHARES | VALUE | |||||||||
Technology (continued) | 1,418,100 | $ | 16,847,028 | |||||||||
Components and Systems (continued) | Exar Corporation a | 804,441 | 10,779,509 | |||||||||
Analogic Corporation | 92,500 | $ | 6,799,675 | Fairchild Semiconductor International a | 1,008,000 | 19,474,560 | ||||||
DDi Corporation a | 132,000 | 1,054,680 | GSI Group a | 214,200 | 2,097,018 | |||||||
Digi International a | 913,793 | 13,469,309 | 291,000 | 10,842,660 | ||||||||
Dionex Corporation a | 296,426 | 21,043,282 | IXYS Corporation a | 728,315 | 6,081,430 | |||||||
43,800 | 1,236,036 | Nextest Systems a | 575,800 | 7,871,186 | ||||||||
Energy Conversion Devices a | 25,000 | 770,500 | 301,700 | 5,463,787 | ||||||||
Excel Technology a | 203,700 | 5,691,378 | 27,400 | 455,114 | ||||||||
Hutchinson Technology a | 50,000 | 940,500 | Sanmina-SCI Corporation a | 1,938,600 | 6,067,818 | |||||||
64,300 | 2,050,527 | Semitool a | 1,506,267 | 14,475,226 | ||||||||
162,800 | 4,296,292 | Supertex a | 54,500 | 1,708,030 | ||||||||
Nam Tai Electronics | 687,540 | 8,195,477 | Teradyne a | 23,700 | 416,646 | |||||||
Newport Corporation a | 496,600 | 7,687,368 | Tessera Technologies a | 1,100 | 44,605 | |||||||
180,900 | 2,896,209 | Varian a | 150,800 | 8,268,364 | ||||||||
Plexus Corporation a | 991,000 | 22,783,090 | ||||||||||
Richardson Electronics | 745,662 | 6,897,374 | 213,987,368 | |||||||||
Rimage Corporation a | 414,803 | 13,103,627 | ||||||||||
TTM Technologies a | 300,000 | 3,900,000 | Software - 1.6% | |||||||||
Technitrol | 550,000 | 15,768,500 | ANSYS a | 190,600 | 5,050,900 | |||||||
Tektronix | 514,100 | 17,345,734 | Epicor Software a | 106,800 | 1,588,116 | |||||||
Zebra Technologies Cl. A a | 22,300 | 863,902 | Fair Isaac | 121,300 | 4,866,556 | |||||||
Fundtech a | 26,500 | 383,985 | ||||||||||
161,648,570 | 2,383,802 | 12,920,207 | ||||||||||
MSC.Software a | 246,800 | 3,341,672 | ||||||||||
Distribution - 1.1% | Macrovision Corporation a | 137,600 | 4,136,256 | |||||||||
Anixter International a | 47,000 | 3,534,870 | Manhattan Associates a | 100,000 | 2,791,000 | |||||||
Benchmark Electronics a | 840,650 | 19,015,503 | ManTech International Cl. A a | 513,455 | 15,829,818 | |||||||
510,600 | 11,524,242 | 16,100 | 875,840 | |||||||||
Nu Horizons Electronics a | 522,844 | 6,959,054 | 202,100 | 1,719,871 | ||||||||
Solectron Corporation a | 2,967,900 | 10,921,872 | 1,766,600 | 8,126,360 | ||||||||
Transaction Systems Architects Cl. A a | 485,290 | 16,334,861 | ||||||||||
51,955,541 | Trintech Group ADR a | 211,510 | 962,371 | |||||||||
Internet Software and Services - 0.1% | 78,927,813 | |||||||||||
604,200 | 4,948,398 | |||||||||||
Optimal Group Cl. A a | 61,300 | 462,815 | Telecommunications - 1.6% | |||||||||
ADTRAN | 789,200 | 20,495,524 | ||||||||||
5,411,213 | Catapult Communications a | 273,000 | 2,708,160 | |||||||||
82,500 | 3,829,650 | |||||||||||
IT Services - 2.5% | 108,521 | 1,240,395 | ||||||||||
2,047,100 | 14,964,301 | Foundry Networks a | 935,100 | 15,578,766 | ||||||||
Black Box | 264,900 | 10,961,562 | Golden Telecom a | 60,000 | 3,300,600 | |||||||
269,100 | 7,569,783 | IDT Corporation Cl. B | 150,000 | 1,548,000 | ||||||||
Gartner a | 743,200 | 18,275,288 | 327,200 | 1,524,752 | ||||||||
Jack Henry & Associates | 50,900 | 1,310,675 | KVH Industries a | 231,000 | 2,025,870 | |||||||
MAXIMUS | 108,300 | 4,698,054 | 300,000 | 1,755,000 | ||||||||
Perot Systems Cl. A a | 2,206,300 | 37,595,352 | NETGEAR a | 343,400 | 12,448,250 | |||||||
RADVision a | 30,100 | 633,003 | North Pittsburgh Systems | 14,520 | 308,550 | |||||||
SRA International Cl. A a | 415,000 | 10,482,900 | Premiere Global Services a | 516,500 | 6,724,830 | |||||||
Sapient Corporation a | 1,335,500 | 10,323,415 | Radyne a | 125,000 | 1,333,750 | |||||||
Syntel | 158,048 | 4,803,079 | 205,000 | 881,500 | ||||||||
ViaSat a | 21,700 | 696,570 | ||||||||||
121,617,412 | ||||||||||||
76,400,167 | ||||||||||||
Semiconductors and Equipment - 4.4% | ||||||||||||
400,300 | 2,461,845 | Total (Cost $602,410,597) | 745,737,222 | |||||||||
Cabot Microelectronics a | 252,500 | 8,961,225 | ||||||||||
Cascade Microtech a | 50,400 | 604,296 | Miscellaneous e – 4.8% | |||||||||
Catalyst Semiconductor a | 319,800 | 1,522,248 | Total (Cost $222,259,756) | 232,844,694 | ||||||||
Cirrus Logic a | 1,283,000 | 10,648,900 | ||||||||||
Cognex Corporation | 896,835 | 20,187,756 | TOTAL COMMON STOCKS | |||||||||
Cymer a | 50,000 | 2,010,000 | (Cost $3,500,227,267) | 4,540,985,752 | ||||||||
DSP Group a | 49,500 | 1,013,265 | ||||||||||
5,649 | 122,979 | |||||||||||
551,200 | 23,023,624 | |||||||||||
Dolby Laboratories Cl. A a | 918,900 | 32,538,249 |
52 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited) |
Royce Micro-Cap Fund | ||
VALUE | SHARES | VALUE | ||||||||||
REPURCHASE AGREEMENTS – 6.3% | COMMON STOCKS – 85.4% | |||||||||||
State Street Bank & Trust Company, | ||||||||||||
5.10% dated 6/29/07, due 7/2/07, | Consumer Products – 3.5% | |||||||||||
maturity value $108,515,099 (collateralized | Apparel and Shoes - 2.1% | |||||||||||
by obligations of various U.S. Government | 152,900 | $ | 6,340,763 | |||||||||
Agencies, valued at $111,185,594) | LaCrosse Footwear b | 311,492 | 5,628,660 | |||||||||
(Cost $108,469,000) | $ | 108,469,000 | 444,400 | 9,034,652 | ||||||||
Lehman Brothers (Tri-Party), | 21,004,075 | |||||||||||
5.05% dated 6/29/07, due 7/2/07, | ||||||||||||
maturity value $195,082,063 (collateralized | Food/Beverage/Tobacco - 0.6% | |||||||||||
by obligations of various U.S. Government | 127,800 | 1,791,756 | ||||||||||
Agencies, valued at $198,986,984) | 455,230 | 1,943,832 | ||||||||||
(Cost $195,000,000) | 195,000,000 | Reliv International | 238,700 | 2,506,350 | ||||||||
TOTAL REPURCHASE AGREEMENTS | 6,241,938 | |||||||||||
(Cost $303,469,000) | 303,469,000 | |||||||||||
Sports and Recreation - 0.3% | ||||||||||||
COLLATERAL RECEIVED FOR SECURITIES | Arctic Cat | 129,200 | 2,558,160 | |||||||||
LOANED – 2.0% | ||||||||||||
Money Market Funds | Other Consumer Products - 0.5% | |||||||||||
AIM Liquid Assets Institutional Fund | RC2 Corporation a | 133,700 | 5,349,337 | |||||||||
(7 day yield-5.19%) | 95,105,844 | |||||||||||
Janus Institutional Money Market Fund | Total (Cost $24,739,168) | 35,153,510 | ||||||||||
(7 day yield-5.18%) | 2,572,885 | |||||||||||
Consumer Services – 5.6% | ||||||||||||
TOTAL COLLATERAL RECEIVED FOR | Leisure and Entertainment - 1.3% | |||||||||||
SECURITIES LOANED | Dover Downs Gaming & Entertainment | 222,000 | 3,332,220 | |||||||||
(Cost $97,678,729) | 97,678,729 | 225,700 | 2,277,313 | |||||||||
New Frontier Media | 838,200 | 7,309,104 | ||||||||||
TOTAL INVESTMENTS – 102.2% | ||||||||||||
(Cost $3,901,374,996) | 4,942,133,481 | 12,918,637 | ||||||||||
LIABILITIES LESS CASH | Retail Stores - 3.0% | |||||||||||
AND OTHER ASSETS – (2.2)% | (105,937,877 | ) | A.C. Moore Arts & Crafts a | 327,100 | 6,414,431 | |||||||
Buckle (The) | 178,850 | 7,046,690 | ||||||||||
NET ASSETS – 100.0% | $ | 4,836,195,604 | 125,000 | 3,267,500 | ||||||||
462,350 | 6,135,385 | |||||||||||
Cato Corporation Cl. A | 243,050 | 5,332,517 | ||||||||||
56,950 | 2,124,235 | |||||||||||
| ||||||||||||
| 30,320,758 | |||||||||||
Other Consumer Services - 1.3% | ||||||||||||
Collectors Universe | 368,505 | 5,634,441 | ||||||||||
330,896 | 4,917,115 | |||||||||||
Renaissance Learning | 200,800 | 2,640,520 | ||||||||||
13,192,076 | ||||||||||||
Total (Cost $42,023,870) | 56,431,471 | |||||||||||
Financial Intermediaries – 5.0% | ||||||||||||
Banking - 1.4% | ||||||||||||
173,567 | 3,880,958 | |||||||||||
Canadian Western Bank | 372,000 | 9,861,798 | ||||||||||
13,742,756 | ||||||||||||
Insurance - 2.6% | ||||||||||||
334,500 | 3,261,375 | |||||||||||
246,000 | 5,862,180 | |||||||||||
Argonaut Group | 236,900 | 7,393,649 | ||||||||||
Navigators Group a | 122,100 | 6,581,190 | ||||||||||
United Fire & Casualty | 100,000 | 3,538,000 | ||||||||||
26,636,394 | ||||||||||||
Securities Brokers - 1.0% | ||||||||||||
Cowen Group a | 299,000 | 5,355,090 | ||||||||||
Sanders Morris Harris Group | 390,300 | 4,543,092 | ||||||||||
9,898,182 | ||||||||||||
Total (Cost $27,882,378) | 50,277,332 | |||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 53 |
Schedules of Investments
Royce Micro-Cap Fund (continued) |
SHARES | VALUE | SHARES | VALUE | |||||||||
Financial Services – 0.8% | Construction Materials - 0.3% | |||||||||||
Investment Management - 0.8% | Synalloy Corporation | 70,700 | $ | 2,467,430 | ||||||||
ADDENDA Capital | 194,900 | $ | 4,144,084 | |||||||||
Westwood Holdings Group | 99,700 | 3,405,752 | Industrial Components - 0.4% | |||||||||
Powell Industries a | 112,100 | 3,560,296 | ||||||||||
Total (Cost $5,941,582) | 7,549,836 | |||||||||||
Machinery - 2.0% | ||||||||||||
Health – 11.1% | 521,100 | 8,368,866 | ||||||||||
Drugs and Biotech - 5.0% | 270,143 | 6,051,203 | ||||||||||
331,300 | 2,153,450 | 175,791 | 5,880,209 | |||||||||
452,500 | 1,515,875 | |||||||||||
597,800 | 4,041,128 | 20,300,278 | ||||||||||
664,400 | 2,046,352 | |||||||||||
928,984 | 3,892,443 | Metal Fabrication and Distribution - 4.7% | ||||||||||
473,000 | 1,825,780 | Dynamic Materials | 246,900 | 9,258,750 | ||||||||
Halozyme Therapeutics a | 552,900 | 5,103,267 | Metal Management | 233,500 | 10,290,345 | |||||||
350,300 | 2,066,770 | 257,500 | 13,732,475 | |||||||||
86,250 | 938,400 | Olympic Steel | 333,500 | 9,558,110 | ||||||||
Lexicon Pharmaceuticals a | 1,112,200 | 3,570,162 | 35,000 | 2,637,950 | ||||||||
290,000 | 2,485,300 | Samuel Manu-Tech | 150,300 | 1,745,328 | ||||||||
Neogen Corporation a | 197,600 | 5,682,976 | ||||||||||
Orchid Cellmark a | 1,340,322 | 6,219,094 | 47,222,958 | |||||||||
75,000 | 618,750 | |||||||||||
1,105,200 | 5,194,440 | Specialty Chemicals and Materials - 0.3% | ||||||||||
Zila a | 2,099,300 | 2,918,027 | American Vanguard | 187,300 | 2,682,136 | |||||||
50,272,214 | Other Industrial Products - 0.8% | |||||||||||
Electro Rent | 186,500 | 2,711,710 | ||||||||||
Health Services - 1.0% | 254,800 | 5,256,524 | ||||||||||
Bio-Imaging Technologies a | 501,300 | 3,423,879 | ||||||||||
Hooper Holmes a | 1,031,000 | 3,453,850 | 7,968,234 | |||||||||
U.S. Physical Therapy a | 237,400 | 3,197,778 | ||||||||||
Total (Cost $72,984,899) | 112,449,017 | |||||||||||
10,075,507 | ||||||||||||
Industrial Services – 11.9% | ||||||||||||
Medical Products and Devices - 4.7% | Commercial Services - 4.0% | |||||||||||
204,748 | 3,110,122 | Barrett Business Services | 125,901 | 3,252,023 | ||||||||
Bruker BioSciences a | 750,500 | 6,762,005 | BB Holdings a | 1,328,814 | 7,004,529 | |||||||
546,800 | 2,564,492 | 101,405 | 2,650,727 | |||||||||
Exactech a | 249,658 | 4,014,501 | 424,200 | 4,615,296 | ||||||||
262,700 | 3,141,892 | 453,858 | 4,538,580 | |||||||||
476,600 | 2,826,238 | 595,178 | 8,993,140 | |||||||||
NMT Medical a | 266,200 | 3,162,456 | 231,100 | 1,837,245 | ||||||||
287,600 | 3,129,088 | OneSource Services a | 88,824 | 1,146,011 | ||||||||
235,800 | 2,419,308 | 263,213 | 2,987,468 | |||||||||
221,700 | 2,181,528 | 336,700 | 3,299,660 | |||||||||
103,300 | 2,577,335 | |||||||||||
Synovis Life Technologies a | 140,100 | 2,017,440 | 40,324,679 | |||||||||
364,300 | 3,045,548 | |||||||||||
Young Innovations | 211,040 | 6,158,147 | Engineering and Construction - 2.9% | |||||||||
456,400 | 2,231,796 | |||||||||||
47,110,100 | 250,101 | 9,383,790 | ||||||||||
533,834 | 11,941,867 | |||||||||||
Personal Care - 0.4% | 252,000 | 5,329,800 | ||||||||||
Nutraceutical International a | 223,100 | 3,696,767 | ||||||||||
28,887,253 | ||||||||||||
Total (Cost $101,797,414) | 111,154,588 | |||||||||||
Food and Tobacco Processors - 0.9% | ||||||||||||
Industrial Products – 11.3% | 483,900 | 4,480,914 | ||||||||||
Automotive - 0.5% | Zapata Corporation a | 609,900 | 4,116,825 | |||||||||
174,800 | 5,188,064 | |||||||||||
8,597,739 | ||||||||||||
Building Systems and Components - 2.3% | ||||||||||||
AAON | 198,400 | 6,319,040 | Printing - 1.2% | |||||||||
Drew Industries a | 268,400 | 8,894,776 | CSS Industries | 91,000 | 3,604,510 | |||||||
263,300 | 2,027,410 | Courier Corporation | 116,732 | 4,669,280 | ||||||||
LSI Industries | 325,050 | 5,818,395 | Ennis | 139,500 | 3,281,040 | |||||||
23,059,621 | 11,554,830 | |||||||||||
| Transportation and Logistics - 2.9% | |||||||||||
| †Euroseas | 515,900 | 7,356,734 | |||||||||
| 341,350 | 6,147,714 | ||||||||||
| 90,191 | 7,819,560 |
54 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
SHARES | VALUE | SHARES | VALUE | |||||||||
Industrial Services (continued) | Integral Systems | 160,100 | $ | 3,892,031 | ||||||||
Transportation and Logistics (continued) | ||||||||||||
373,450 | $ | 7,969,423 | 21,513,415 | |||||||||
29,293,431 | Components and Systems - 2.6% | |||||||||||
Digi International a | 408,600 | 6,022,764 | ||||||||||
Total (Cost $86,918,840) | 118,657,932 | 214,200 | 5,984,748 | |||||||||
Performance Technologies a | 563,900 | 2,548,828 | ||||||||||
Natural Resources – 17.0% | 893,500 | 11,615,500 | ||||||||||
Energy Services - 4.7% | ||||||||||||
Dawson Geophysical a | 32,600 | 2,003,596 | 26,171,840 | |||||||||
103,700 | 6,216,815 | |||||||||||
Gulf Island Fabrication | 272,100 | 9,441,870 | Internet Software and Services - 1.9% | |||||||||
TGC Industries a | 532,926 | 5,808,893 | 243,500 | 3,007,225 | ||||||||
Tesco Corporation a | 337,400 | 10,644,970 | CryptoLogic | 144,000 | 3,513,600 | |||||||
Total Energy Services Trust | 801,000 | 8,421,684 | 567,500 | 1,532,250 | ||||||||
World Energy Solutions a | 3,154,800 | 4,590,415 | 704,393 | 5,127,981 | ||||||||
338,800 | 2,646,028 | |||||||||||
47,128,243 | 592,900 | 3,237,234 | ||||||||||
Oil and Gas - 3.5% | 19,064,318 | |||||||||||
Bronco Drilling a | 681,300 | 11,180,133 | ||||||||||
773,600 | 10,838,136 | IT Services - 0.7% | ||||||||||
499,500 | 1,098,900 | 528,400 | 2,145,304 | |||||||||
465,300 | 0 | MAXIMUS | 105,700 | 4,585,266 | ||||||||
269,000 | 4,010,790 | |||||||||||
Savanna Energy Services a | 154,500 | 2,900,728 | 6,730,570 | |||||||||
82,300 | 2,091,243 | |||||||||||
234,200 | 2,407,576 | Semiconductors and Equipment - 5.0% | ||||||||||
Advanced Energy Industries a | 213,000 | 4,826,580 | ||||||||||
34,527,506 | 246,400 | 2,954,336 | ||||||||||
CEVA a | 638,000 | 5,423,000 | ||||||||||
Precious Metals and Mining - 8.0% | 661,900 | 3,170,501 | ||||||||||
Alamos Gold a | 705,600 | 3,643,088 | 361,700 | 2,752,537 | ||||||||
326,771 | 1,408,382 | 755,176 | 4,757,609 | |||||||||
Central African Gold (Warrants) a | 3,658,485 | 734,660 | 964,800 | 3,376,800 | ||||||||
Central African Gold a | 2,006,900 | 2,196,381 | 583,500 | 7,976,445 | ||||||||
415,000 | 2,419,450 | 503,500 | 5,956,405 | |||||||||
Endeavour Mining Capital | 696,000 | 6,259,263 | 441,800 | 4,245,698 | ||||||||
531,900 | 2,398,869 | 1,011,201 | 3,974,020 | |||||||||
1,586,700 | 3,887,415 | |||||||||||
Etruscan Resources a | 491,500 | 1,430,322 | 49,413,931 | |||||||||
1,058,200 | 4,490,086 | |||||||||||
535,586 | 6,759,095 | Software - 1.5% | ||||||||||
Greystar Resources a | 424,700 | 2,790,800 | Fundtech a | 198,200 | 2,871,918 | |||||||
Hecla Mining a | 549,500 | 4,692,730 | iPass a | 708,300 | 3,838,986 | |||||||
Kingsgate Consolidated | 1,166,350 | 5,488,017 | 130,500 | 2,868,390 | ||||||||
Metallica Resources a | 946,800 | 4,260,600 | 468,500 | 4,061,895 | ||||||||
Midway Gold a | 1,176,800 | 3,037,972 | Pervasive Software a | 318,695 | 1,465,997 | |||||||
621,500 | 2,666,235 | |||||||||||
Northern Orion Resources a | 1,867,900 | 10,628,351 | 15,107,186 | |||||||||
Silvercorp Metals a | 204,100 | 3,458,348 | ||||||||||
U.S. Gold a | 749,050 | 4,119,775 | Telecommunications - 1.6% | |||||||||
Western Copper a | 2,044,900 | 3,167,411 | 296,000 | 5,212,560 | ||||||||
Atlantic Tele-Network | 233,200 | 6,678,848 | ||||||||||
79,937,250 | 274,000 | 2,402,980 | ||||||||||
225,700 | 1,974,875 | |||||||||||
Real Estate - 0.8% | ||||||||||||
208,900 | 7,885,975 | 16,269,263 | ||||||||||
Total (Cost $105,946,453) | 169,478,974 | Total (Cost $133,285,364) | 154,270,523 | |||||||||
Technology – 15.5% | Miscellaneous e – 3.7% | |||||||||||
Aerospace and Defense - 2.2% | Total (Cost $35,126,080) | 37,013,339 | ||||||||||
171,030 | 3,524,928 | |||||||||||
74,500 | 4,235,325 | TOTAL COMMON STOCKS | ||||||||||
222,000 | 4,748,580 | (Cost $636,646,048) | 852,436,522 | |||||||||
Ducommun a | 198,700 | 5,112,551 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 55 |
Schedules of Investments
Royce Micro-Cap Fund (continued) | Royce Premier Fund | |
VALUE | SHARES | VALUE | |||||||||||
REPURCHASE AGREEMENTS – 14.2% | COMMON STOCKS – 85.0% | ||||||||||||
State Street Bank & Trust Company, | |||||||||||||
5.10% dated 6/29/07, due 7/2/07, | Consumer Products – 11.0% | ||||||||||||
maturity value $46,795,880 (collateralized | Apparel and Shoes - 4.2% | ||||||||||||
by obligations of various U.S. Government | Columbia Sportswear | 707,600 | $ | 48,597,968 | |||||||||
Agencies, valued at $47,947,281) | Polo Ralph Lauren Cl. A | 907,700 | 89,054,447 | ||||||||||
(Cost $46,776,000) | $ | 46,776,000 | Timberland Company Cl. A a | 2,793,900 | 70,378,341 | ||||||||
Lehman Brothers (Tri-Party), | 208,030,756 | ||||||||||||
5.05% dated 6/29/07, due 7/2/07, | |||||||||||||
maturity value $95,039,979 (collateralized | Home Furnishing and Appliances - 0.8% | ||||||||||||
by obligations of various U.S. Government | Ethan Allen Interiors | 1,152,400 | 39,469,700 | ||||||||||
Agencies, valued at $96,941,355) | |||||||||||||
(Cost $95,000,000) | 95,000,000 | Sports and Recreation - 3.9% | |||||||||||
Thor Industries b | 3,086,400 | 139,320,096 | |||||||||||
TOTAL REPURCHASE AGREEMENTS | Winnebago Industries b | 1,968,400 | 58,107,168 | ||||||||||
(Cost $141,776,000) | 141,776,000 | ||||||||||||
197,427,264 | |||||||||||||
PRINCIPAL | |||||||||||||
AMOUNT | Other Consumer Products - 2.1% | ||||||||||||
COLLATERAL RECEIVED FOR SECURITIES | Fossil a | 2,855,400 | 84,205,746 | ||||||||||
LOANED – 14.0% | Matthews International Cl. A | 500,700 | 21,835,527 | ||||||||||
U.S. Treasury Bonds 2.375%-13.25% | |||||||||||||
due 5/15/14-8/15/29 | $3,643,987 | 3,701,771 | 106,041,273 | ||||||||||
U.S. Treasury Notes 0.875%-6.00% | |||||||||||||
due 8/15/09-7/15/15 | 144,008 | 146,127 | Total (Cost $377,380,743) | 550,968,993 | |||||||||
U.S. Treasury Strip-Principal | |||||||||||||
due 11/15/09-5/15/30 | 2,091,935 | 2,091,935 | Consumer Services – 3.7% | ||||||||||
U.S. Treasury Strip-Interest | Direct Marketing - 1.3% | ||||||||||||
due 11/15/10-8/15/23 | 549,208 | 549,208 | Nu Skin Enterprises Cl. A b | 4,086,500 | 67,427,250 | ||||||||
Money Market Funds | |||||||||||||
State Street Navigator Securities Lending | Retail Stores - 1.1% | ||||||||||||
Prime Portfolio (7 day yield-5.27%) | 132,721,510 | Charming Shoppes a | 2,996,300 | 32,449,929 | |||||||||
Pier 1 Imports a | 2,553,900 | 21,682,611 | |||||||||||
TOTAL COLLATERAL RECEIVED FOR | |||||||||||||
SECURITIES LOANED | 54,132,540 | ||||||||||||
(Cost $139,210,551) | 139,210,551 | ||||||||||||
Other Consumer Services - 1.3% | |||||||||||||
TOTAL INVESTMENTS – 113.6% | Corinthian Colleges a | 3,981,165 | 64,853,178 | ||||||||||
(Cost $917,632,599) | 1,133,423,073 | ||||||||||||
Total (Cost $184,493,830) | 186,412,968 | ||||||||||||
LIABILITIES LESS CASH | |||||||||||||
AND OTHER ASSETS – (13.6)% | (135,464,369 | ) | Financial Intermediaries – 8.9% | ||||||||||
Insurance - 5.5% | |||||||||||||
NET ASSETS – 100.0% | $ | 997,958,704 | Alleghany Corporation a | 312,312 | 126,954,828 | ||||||||
Erie Indemnity Cl. A | 1,249,200 | 67,506,768 | |||||||||||
ProAssurance Corporation a | 1,045,740 | 58,216,346 | |||||||||||
Wesco Financial | 65,680 | 25,286,800 | |||||||||||
277,964,742 | |||||||||||||
Securities Brokers - 1.6% | |||||||||||||
Knight Capital Group Cl. A a | 4,929,700 | 81,833,020 | |||||||||||
Other Financial Intermediaries - 1.8% | |||||||||||||
TSX Group | 2,284,000 | 89,408,871 | |||||||||||
Total (Cost $275,758,014) | 449,206,633 | ||||||||||||
Financial Services – 2.3% | |||||||||||||
Information and Processing - 1.2% | |||||||||||||
Interactive Data | 2,269,100 | 60,766,498 | |||||||||||
Investment Management - 1.1% | |||||||||||||
Federated Investors Cl. B | 1,459,500 | 55,942,635 | |||||||||||
Total (Cost $89,439,716) | 116,709,133 | ||||||||||||
Health – 5.1% | |||||||||||||
Drugs and Biotech - 3.8% | |||||||||||||
Endo Pharmaceuticals Holdings a | 3,349,250 | 114,644,828 | |||||||||||
Perrigo Company | 3,767,900 | 73,775,482 | |||||||||||
188,420,310 | |||||||||||||
Medical Products and Devices - 1.3% | |||||||||||||
Arrow International | 245,411 | 9,394,333 |
56 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
SHARES | VALUE | SHARES | VALUE | ||||||||||
Health (continued) | Perot Systems Cl. A a | 3,770,900 | $ | 64,256,136 | |||||||||
Medical Products and Devices (continued) | |||||||||||||
IDEXX Laboratories a | 602,300 | $ | 56,995,649 | 160,609,592 | |||||||||
66,389,982 | Semiconductors and Equipment - 2.5% | ||||||||||||
1,780,800 | 63,200,592 | ||||||||||||
Total (Cost $138,071,255) | 254,810,292 | Cognex Corporation b | 2,862,717 | 64,439,760 | |||||||||
Industrial Products – 19.1% | 127,640,352 | ||||||||||||
Building Systems and Components - 2.3% | |||||||||||||
Simpson Manufacturing b | 3,385,400 | 114,223,396 | Software - 0.7% | ||||||||||
Fair Isaac | 913,000 | 36,629,560 | |||||||||||
Machinery - 7.9% | |||||||||||||
756,300 | 32,180,565 | Telecommunications - 2.3% | |||||||||||
Lincoln Electric Holdings b | 2,769,597 | 205,614,881 | ADTRAN | 1,128,800 | 29,314,936 | ||||||||
National Instruments | 1,709,487 | 55,677,992 | Foundry Networks a | 5,124,800 | 85,379,168 | ||||||||
Woodward Governor b | 1,921,812 | 103,143,650 | |||||||||||
114,694,104 | |||||||||||||
396,617,088 | |||||||||||||
Total (Cost $484,114,366) | 676,928,595 | ||||||||||||
Metal Fabrication and Distribution - 7.8% | |||||||||||||
†Chaparral Steel | 861,900 | 61,944,753 | Miscellaneous e – 1.5% | ||||||||||
IPSCO | 788,000 | 125,197,440 | Total (Cost $67,020,009) | 73,690,037 | |||||||||
Reliance Steel & Aluminum | 2,269,800 | 127,698,948 | |||||||||||
Schnitzer Steel Industries Cl. A b | 1,591,300 | 76,286,922 | TOTAL COMMON STOCKS | ||||||||||
(Cost $2,643,889,100) | 4,267,674,681 | ||||||||||||
391,128,063 | |||||||||||||
REPURCHASE AGREEMENTS – 15.1% | |||||||||||||
Specialty Chemicals and Materials - 1.1% | State Street Bank & Trust Company, | ||||||||||||
Westlake Chemical | 2,045,000 | 57,505,400 | 5.10% dated 6/29/07, due 7/2/07, | ||||||||||
maturity value $259,343,174 (collateralized | |||||||||||||
Total (Cost $459,968,130) | 959,473,947 | by obligations of various U.S. Government | |||||||||||
Agencies, valued at $265,714,319) | |||||||||||||
Industrial Services – 3.8% | (Cost $259,233,000) | 259,233,000 | |||||||||||
Industrial Distribution - 2.2% | |||||||||||||
Ritchie Bros. Auctioneers b | 1,776,200 | 111,225,644 | Lehman Brothers (Tri-Party), | ||||||||||
5.05% dated 6/29/07, due 7/2/07, | |||||||||||||
Transportation and Logistics - 1.6% | maturity value $500,210,417 (collateralized | ||||||||||||
Arkansas Best b | 2,056,902 | 80,157,471 | by obligations of various U.S. Government | ||||||||||
Agencies, valued at $510,217,484) | |||||||||||||
Total (Cost $106,907,365) | 191,383,115 | (Cost $500,000,000) | 500,000,000 | ||||||||||
Natural Resources – 16.1% | TOTAL REPURCHASE AGREEMENTS | ||||||||||||
Energy Services - 5.8% | (Cost $759,233,000) | 759,233,000 | |||||||||||
Ensign Energy Services | 7,103,000 | 126,690,448 | |||||||||||
Pason Systems | 2,846,500 | 44,571,340 | PRINCIPAL | ||||||||||
Trican Well Service | 5,869,000 | 119,501,159 | AMOUNT | ||||||||||
COLLATERAL RECEIVED FOR | |||||||||||||
290,762,947 | SECURITIES LOANED – 0.3% | ||||||||||||
U.S. Treasury Strip-Principal | |||||||||||||
Oil and Gas - 4.1% | due 2/15/29 | $ | 4,060,561 | 4,060,561 | |||||||||
Cimarex Energy | 1,097,200 | 43,240,652 | U.S. Treasury Strip-Interest | ||||||||||
2,613,500 | 164,415,285 | due 2/15/21-2/15/22 | 9,640,110 | 9,640,110 | |||||||||
207,655,937 | TOTAL COLLATERAL RECEIVED FOR | ||||||||||||
SECURITIES LOANED | |||||||||||||
Precious Metals and Mining - 6.2% | (Cost $13,700,671) | 13,700,671 | |||||||||||
Meridian Gold a | 3,085,400 | 85,095,332 | |||||||||||
Pan American Silver a | 3,624,700 | 95,438,351 | TOTAL INVESTMENTS – 100.4% | ||||||||||
3,757,300 | 129,138,401 | (Cost $3,416,822,771) | 5,040,608,352 | ||||||||||
309,672,084 | |||||||||||||
LIABILITIES LESS CASH | |||||||||||||
Total (Cost $460,735,672) | 808,090,968 | AND OTHER ASSETS – (0.4)% | (18,435,700 | ) | |||||||||
Technology – 13.5% | |||||||||||||
Components and Systems - 3.8% | NET ASSETS – 100.0% | $ | 5,022,172,652 | ||||||||||
1,170,500 | 83,093,795 | ||||||||||||
Tektronix | 1,769,400 | 59,699,556 | |||||||||||
Zebra Technologies Cl. A a | 1,191,400 | 46,154,836 | |||||||||||
188,948,187 | |||||||||||||
Distribution - 1.0% | |||||||||||||
Benchmark Electronics a | 2,140,000 | 48,406,800 | |||||||||||
IT Services - 3.2% | |||||||||||||
Gartner a | 3,918,400 | 96,353,456 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 57 |
Schedules of investments
Royce Low-Priced Stock Fund |
SHARES | VALUE | SHARES | VALUE | ||||||||||||
COMMON STOCKS – 85.6% | Universal Technical Institute a | 896,000 | $ | 22,749,440 | |||||||||||
Consumer Products – 6.1% | 80,925,029 | ||||||||||||||
Apparel and Shoes - 0.9% | |||||||||||||||
K-Swiss Cl. A | 852,000 | $ | 24,137,160 | Total (Cost $328,311,725) | 382,668,994 | ||||||||||
Stride Rite | 979,200 | 19,838,592 | |||||||||||||
Financial Intermediaries – 4.3% | |||||||||||||||
43,975,752 | Banking - 0.1% | ||||||||||||||
Bancorp (The) a | 245,870 | 5,497,653 | |||||||||||||
Collectibles - 0.2% | |||||||||||||||
Topps Company (The) | 1,256,816 | 13,209,136 | Insurance - 1.6% | ||||||||||||
Argonaut Group | 804,900 | 25,120,929 | |||||||||||||
Food/Beverage/Tobacco - 0.1% | Aspen Insurance Holdings | 803,000 | 22,540,210 | ||||||||||||
575,000 | 8,061,500 | CNA Surety a | 524,800 | 9,923,968 | |||||||||||
NYMAGIC | 361,500 | 14,532,300 | |||||||||||||
Home Furnishing and Appliances - 1.4% | Navigators Group a | 150,200 | 8,095,780 | ||||||||||||
La-Z-Boy | 1,300,900 | 14,908,314 | |||||||||||||
3,015,400 | 23,972,430 | 80,213,187 | |||||||||||||
1,965,400 | 31,878,788 | ||||||||||||||
Securities Brokers - 2.2% | |||||||||||||||
70,759,532 | Ichiyoshi Securities | 1,206,600 | 17,482,838 | ||||||||||||
Knight Capital Group Cl. A a | 4,762,300 | 79,054,180 | |||||||||||||
Publishing - 0.6% | Mito Securities | 3,793,000 | 16,358,035 | ||||||||||||
Journal Communications Cl. A | 2,191,400 | 28,510,114 | |||||||||||||
112,895,053 | |||||||||||||||
Sports and Recreation - 1.7% | |||||||||||||||
Arctic Cat b | 1,298,360 | 25,707,528 | Other Financial Intermediaries - 0.4% | ||||||||||||
Callaway Golf | 2,567,200 | 45,721,832 | MarketAxess Holdings a | 768,500 | 13,825,315 | ||||||||||
Monaco Coach | 951,350 | 13,651,872 | TSX Group | 107,000 | 4,188,594 | ||||||||||
85,081,232 | 18,013,909 | ||||||||||||||
Other Consumer Products - 1.2% | Total (Cost $156,718,504) | 216,619,802 | |||||||||||||
Fossil a | 1,791,350 | 52,826,911 | |||||||||||||
Leapfrog Enterprises a | 632,600 | 6,484,150 | Financial Services – 1.5% | ||||||||||||
Information and Processing - 1.5% | |||||||||||||||
59,311,061 | eFunds Corporation a | 2,063,400 | 72,817,386 | ||||||||||||
Morningstar a | 114,500 | 5,384,363 | |||||||||||||
Total (Cost $261,952,667) | 308,908,327 | ||||||||||||||
Total (Cost $25,987,231) | 78,201,749 | ||||||||||||||
Consumer Services – 7.6% | |||||||||||||||
Direct Marketing - 1.1% | Health – 9.5% | ||||||||||||||
Nu Skin Enterprises Cl. A b | 3,342,900 | 55,157,850 | Drugs and Biotech - 6.0% | ||||||||||||
Alpharma Cl. A a | 794,900 | 20,675,349 | |||||||||||||
Leisure and Entertainment - 0.6% | 542,000 | 9,376,600 | |||||||||||||
4Kids Entertainment a | 490,200 | 7,353,000 | Cell Genesys a | 2,930,600 | 9,817,510 | ||||||||||
Multimedia Games a | 1,202,438 | 15,343,109 | 370,764 | 2,625,009 | |||||||||||
New Frontier Media | 986,688 | 8,603,919 | Dyax Corporation a | 315,000 | 1,319,850 | ||||||||||
Elan Corporation ADR a | 766,100 | 16,800,573 | |||||||||||||
31,300,028 | Endo Pharmaceuticals Holdings a | 2,490,200 | 85,239,546 | ||||||||||||
Exelixis a | 557,600 | 6,746,960 | |||||||||||||
Media and Broadcasting - 0.2% | 1,075,000 | 6,342,500 | |||||||||||||
Westwood One | 1,674,800 | 12,041,812 | Infinity Pharmaceuticals a | 602,300 | 6,553,024 | ||||||||||
5,027,300 | 16,137,633 | ||||||||||||||
Restaurants and Lodgings - 0.9% | Maxygen a | 840,200 | 7,200,514 | ||||||||||||
Applebee’s International | 1,261,000 | 30,390,100 | 132,900 | 283,077 | |||||||||||
Ruby Tuesday | 468,200 | 12,327,706 | Perrigo Company | 3,361,400 | 65,816,212 | ||||||||||
Pharmanet Development Group a | 150,300 | 4,791,564 | |||||||||||||
42,717,806 | ViroPharma a | 1,938,100 | 26,745,780 | ||||||||||||
3,038,500 | 15,891,355 | ||||||||||||||
Retail Stores - 3.2% | |||||||||||||||
Buckle (The) | 744,850 | 29,347,090 | 302,363,056 | ||||||||||||
1,206,800 | 16,014,236 | ||||||||||||||
Cato Corporation Cl. A | 797,350 | 17,493,859 | Health Services - 1.0% | ||||||||||||
Charming Shoppes a | 3,038,815 | 32,910,366 | Cross Country Healthcare a | 1,402,900 | 23,400,372 | ||||||||||
Christopher & Banks | 521,300 | 8,940,295 | Cypress Bioscience a | 706,100 | 9,362,886 | ||||||||||
Finish Line (The) Cl. A | 1,669,100 | 15,205,501 | Hooper Holmes a | 3,103,600 | 10,397,060 | ||||||||||
Hibbett Sports a | 110,137 | 3,015,551 | MedQuist a | 750,200 | 6,834,322 | ||||||||||
Pacific Sunwear of California a | 1,030,000 | 22,660,000 | |||||||||||||
1,117,500 | 9,487,575 | 49,994,640 | |||||||||||||
Tuesday Morning | 441,100 | 5,451,996 | |||||||||||||
160,526,469 | |||||||||||||||
Other Consumer Services - 1.6% | |||||||||||||||
Corinthian Colleges a | 3,313,879 | 53,983,089 | |||||||||||||
MoneyGram International | 150,000 | 4,192,500 |
58 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
SHARES | VALUE | SHARES | VALUE | ||||||||||
Health (continued) | Food and Tobacco Processors - 0.3% | ||||||||||||
Medical Products and Devices - 1.8% | 1,491,100 | $ | 13,807,586 | ||||||||||
Bruker BioSciences a | 4,200,257 | $ | 37,844,316 | ||||||||||
2,381,229 | 11,167,964 | Printing - 0.6% | |||||||||||
Candela Corporation a | 200,000 | 2,316,000 | Ennis | 1,216,000 | 28,600,320 | ||||||||
CONMED Corporation a | 205,500 | 6,017,040 | |||||||||||
Medical Action Industries a | 444,250 | 8,023,155 | Transportation and Logistics - 1.2% | ||||||||||
1,134,000 | 12,337,920 | Heartland Express | 1,696,666 | 27,655,656 | |||||||||
Restore Medical a | 270,700 | 508,916 | Universal Truckload Services a | 399,800 | 7,944,026 | ||||||||
Shamir Optical Industry a | 357,300 | 3,515,832 | Werner Enterprises | 1,260,000 | 25,389,000 | ||||||||
Thoratec Corporation a | 500,200 | 9,198,678 | |||||||||||
60,988,682 | |||||||||||||
90,929,821 | |||||||||||||
Total (Cost $270,741,862) | 327,103,044 | ||||||||||||
Personal Care - 0.7% | |||||||||||||
Helen of Troy a | 1,393,796 | 37,632,492 | Natural Resources – 23.8% | ||||||||||
Energy Services - 7.9% | |||||||||||||
Total (Cost $379,663,120) | 480,920,009 | Calfrac Well Services | 1,779,900 | 35,021,548 | |||||||||
Ensign Energy Services | 4,713,600 | 84,072,659 | |||||||||||
Industrial Products – 7.1% | Global Industries a | 652,050 | 17,487,981 | ||||||||||
Automotive - 0.6% | Input/Output a | 1,623,700 | 25,345,957 | ||||||||||
Gentex Corporation | 1,335,200 | 26,290,088 | Oil States International a | 336,200 | 13,898,508 | ||||||||
LKQ Corporation a | 148,200 | 3,654,612 | Pason Systems | 2,706,200 | 42,374,481 | ||||||||
2,105,505 | 66,428,683 | ||||||||||||
29,944,700 | TETRA Technologies a | 685,400 | 19,328,280 | ||||||||||
Total Energy Services Trust b | 1,966,700 | 20,677,813 | |||||||||||
Building Systems and Components - 0.2% | Trican Well Service | 3,715,200 | 75,646,738 | ||||||||||
AAON | 347,500 | 11,067,875 | |||||||||||
400,282,648 | |||||||||||||
Industrial Components - 0.3% | |||||||||||||
Powell Industries a | 494,800 | 15,714,848 | Oil and Gas - 2.1% | ||||||||||
St. Mary Land & Exploration | 628,000 | 22,997,360 | |||||||||||
Machinery - 0.7% | Unit Corporation a | 1,304,500 | 82,066,095 | ||||||||||
Lincoln Electric Holdings | 487,800 | 36,214,272 | |||||||||||
105,063,455 | |||||||||||||
Metal Fabrication and Distribution - 4.5% | |||||||||||||
Houston Wire & Cable c | 650,000 | 18,466,500 | Precious Metals and Mining - 13.6% | ||||||||||
IPSCO | 472,200 | 75,023,136 | Agnico-Eagle Mines | 1,839,000 | 67,123,500 | ||||||||
Metal Management b | 1,967,800 | 86,720,946 | 5,293,700 | 27,331,941 | |||||||||
Olympic Steel b | 720,200 | 20,640,932 | †Fronteer Development Group a | 2,583,300 | 30,741,270 | ||||||||
Schnitzer Steel Industries Cl. A | 592,200 | 28,390,068 | Gabriel Resources a | 3,001,700 | 13,441,079 | ||||||||
3,805,600 | 48,026,672 | ||||||||||||
229,241,582 | Hecla Mining a | 4,913,000 | 41,957,020 | ||||||||||
International Coal Group a | 4,503,300 | 26,929,734 | |||||||||||
Specialty Chemicals and Materials - 0.4% | Ivanhoe Mines a | 5,312,400 | 75,648,576 | ||||||||||
Schulman (A.) | 718,100 | 17,471,373 | Meridian Gold a | 2,723,200 | 75,105,856 | ||||||||
7,681,600 | 43,708,304 | ||||||||||||
Other Industrial Products - 0.4% | 490,700 | 7,375,221 | |||||||||||
Color Kinetics a | 371,400 | 12,408,474 | Palmarejo Silver and Gold a | 1,021,800 | 9,208,430 | ||||||||
Steelcase Cl. A | 441,300 | 8,164,050 | Pan American Silver a | 2,815,628 | 74,135,485 | ||||||||
Randgold Resources ADR | 500,000 | 11,095,000 | |||||||||||
20,572,524 | Silver Standard Resources a | 2,475,300 | 85,076,061 | ||||||||||
2,615,100 | 44,311,246 | ||||||||||||
Total (Cost $149,822,029) | 360,227,174 | 1,067,900 | 8,471,021 | ||||||||||
Industrial Services – 6.5% | 689,686,416 | ||||||||||||
Commercial Services - 3.4% | |||||||||||||
CBIZ a | 1,921,200 | 14,120,820 | Other Natural Resources - 0.2% | ||||||||||
Copart a | 110,143 | 3,369,274 | AMCOL International | 339,400 | 9,269,014 | ||||||||
3,504,500 | 33,327,795 | ||||||||||||
FTI Consulting a | 108,700 | 4,133,861 | Total (Cost $679,255,197) | 1,204,301,533 | |||||||||
Korn/Ferry International a | 1,538,600 | 40,403,636 | |||||||||||
Labor Ready a | 1,985,600 | 45,887,216 | Technology – 17.2% | ||||||||||
MPS Group a | 324,700 | 4,341,239 | Aerospace and Defense - 1.0% | ||||||||||
Navigant Consulting a | 1,019,100 | 18,914,496 | FLIR Systems a | 154,000 | 7,122,500 | ||||||||
PDI a | 556,900 | 5,713,794 | HEICO Corporation Cl. A | 966,100 | 33,958,415 | ||||||||
Integral Systems | 399,500 | 9,711,845 | |||||||||||
170,212,131 | |||||||||||||
50,792,760 | |||||||||||||
Engineering and Construction - 1.0% | |||||||||||||
Dycom Industries a | 778,400 | 23,336,432 | Components and Systems - 1.9% | ||||||||||
Exponent a | 400,400 | 8,956,948 | KEMET Corporation a | 1,078,800 | 7,605,540 | ||||||||
1,498,300 | 21,200,945 | ||||||||||||
53,494,325 | |||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 59 |
Schedules of Investments
Royce Low-Priced Stock Fund (continued) |
SHARES | VALUE | SHARES | VALUE | ||||||||||
Technology (continued) | ViaSat a | 163,300 | $ | 5,241,930 | |||||||||
Components and Systems (continued) | |||||||||||||
Methode Electronics | 1,187,600 | $ | 18,585,940 | 188,971,843 | |||||||||
2,250,035 | 29,250,455 | ||||||||||||
Technitrol | 505,900 | 14,504,153 | Total (Cost $665,746,547) | 866,571,151 | |||||||||
Tektronix | 746,900 | 25,200,406 | |||||||||||
Miscellaneous e –2.0% | |||||||||||||
95,146,494 | Total (Cost $98,869,564) | 99,072,361 | |||||||||||
Internet Software and Services - 1.0% | TOTAL COMMON STOCKS | ||||||||||||
CryptoLogic | 530,675 | 12,948,470 | (Cost $3,017,068,446) | 4,324,594,144 | |||||||||
Packeteer a | 1,144,600 | 8,939,326 | |||||||||||
RealNetworks a | 3,504,300 | 28,630,131 | REPURCHASE AGREEMENTS – 14.5% | ||||||||||
State Street Bank & Trust Company, | |||||||||||||
50,517,927 | 5.10% dated 6/29/07, due 7/2/07, | ||||||||||||
maturity value $242,772,134 (collateralized | |||||||||||||
IT Services - 2.7% | by obligations of various U.S. Government | ||||||||||||
CIBER a | 323,700 | 2,647,866 | Agencies, valued at $247,523,294) | ||||||||||
Forrester Research a | 308,400 | 8,675,292 | (Cost $242,669,000) | 242,669,000 | |||||||||
MAXIMUS | 665,500 | 28,869,390 | |||||||||||
Perot Systems Cl. A a | 4,707,000 | 80,207,280 | Lehman Brothers (Tri-Party), | ||||||||||
RADVision a | 343,700 | 7,228,011 | 5.05% dated 6/29/07, due 7/2/07, | ||||||||||
Syntel | 225,300 | 6,846,867 | maturity value $490,206,208 (collateralized | ||||||||||
by obligations of various U.S. Government | |||||||||||||
134,474,706 | Agencies, valued at $500,010,998) | ||||||||||||
(Cost $490,000,000) | 490,000,000 | ||||||||||||
Semiconductors and Equipment - 4.6% | |||||||||||||
Axcelis Technologies a | 632,800 | 4,106,872 | TOTAL REPURCHASE AGREEMENTS | ||||||||||
Brooks Automation a | 845,504 | 15,345,898 | (Cost $732,669,000) | 732,669,000 | |||||||||
1,281,800 | 10,895,300 | ||||||||||||
Cirrus Logic a | 1,705,000 | 14,151,500 | PRINCIPAL | ||||||||||
Cognex Corporation | 670,538 | 15,093,810 | AMOUNT | ||||||||||
Credence Systems a | 1,845,100 | 6,642,360 | COLLATERAL RECEIVED FOR SECURITIES | ||||||||||
415,000 | 10,727,750 | LOANED – 1.4% | |||||||||||
DTS a | 92,300 | 2,009,371 | U.S. Treasury Bonds 2.00%-13.25% | ||||||||||
Entegris a | 1,815,300 | 21,565,764 | due 11/15/12-8/15/29 | $26,931,964 | 27,409,183 | ||||||||
Exar Corporation a | 1,412,464 | 18,927,018 | U.S. Treasury Notes 0.875%-6.00% | ||||||||||
Fairchild Semiconductor International a | 2,008,500 | 38,804,220 | due 1/15/08-7/15/16 | 28,876,421 | 29,157,630 | ||||||||
GSI Group a | 1,709,200 | 16,733,068 | U.S. Treasury Strip-Principal | ||||||||||
MKS Instruments a | 611,900 | 16,949,630 | due 11/15/09-5/15/30 | 12,505,293 | 12,505,293 | ||||||||
613,500 | 11,110,485 | U.S. Treasury Strip-Interest | |||||||||||
Photronics a | 923,200 | 13,737,216 | due 11/15/10-8/15/23 | 1,620,776 | 1,620,776 | ||||||||
318,900 | 3,788,532 | ||||||||||||
Semitool a | 1,148,333 | 11,035,480 | TOTAL COLLATERAL RECEIVED FOR | ||||||||||
Verigy a | 83,500 | 2,388,935 | SECURITIES LOANED | ||||||||||
(Cost $70,692,882) | 70,692,882 | ||||||||||||
234,013,209 | |||||||||||||
TOTAL INVESTMENTS – 101.5% | |||||||||||||
Software - 2.2% | (Cost $3,820,430,328) | 5,127,956,026 | |||||||||||
1,102,753 | 16,541,295 | ||||||||||||
Epicor Software a | 477,500 | 7,100,425 | LIABILITIES LESS CASH | ||||||||||
3,389,100 | 18,368,922 | AND OTHER ASSETS – (1.5)% | (77,823,185 | ) | |||||||||
MSC.Software a | 1,705,200 | 23,088,408 | |||||||||||
ManTech International Cl. A a | 641,200 | 19,768,196 | |||||||||||
2,086,237 | 9,596,690 | NET ASSETS – 100.0% | $ | 5,050,132,841 | |||||||||
SPSS a | 110,272 | 4,867,406 | |||||||||||
THQ a | 312,500 | 9,537,500 | |||||||||||
Ulticom a | 435,100 | 3,785,370 | |||||||||||
112,654,212 | |||||||||||||
Telecommunications - 3.8% | |||||||||||||
ADTRAN | 1,076,700 | 27,961,899 | |||||||||||
Foundry Networks a | 5,340,700 | 88,976,062 | |||||||||||
1,150,200 | 10,087,254 | ||||||||||||
NETGEAR a | 742,600 | 26,919,250 | |||||||||||
1,618,600 | 14,162,750 | ||||||||||||
Premiere Global Services a | 1,199,900 | 15,622,698 |
60 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
Royce Total Return Fund |
SHARES | VALUE | SHARES | VALUE | |||||||||
COMMON STOCKS – 91.0% | Consumer Services – 6.3% | |||||||||||
Direct Marketing - 0.2% | ||||||||||||
Consumer Products – 5.9% | Nu Skin Enterprises Cl. A | 801,100 | $ | 13,218,150 | ||||||||
Apparel and Shoes - 1.6% | ||||||||||||
Columbia Sportswear | 5,200 | $ | 357,136 | Leisure and Entertainment - 1.0% | ||||||||
Delta Apparel b | 583,578 | 10,591,941 | Carmike Cinemas b | 642,100 | 14,100,516 | |||||||
Jones Apparel Group | 435,700 | 12,308,525 | International Speedway Cl. A | 588,345 | 31,011,665 | |||||||
K-Swiss Cl. A | 596,214 | 16,890,743 | Marine Products | 234,249 | 1,927,869 | |||||||
Kellwood Company | 78,900 | 2,218,668 | Regal Entertainment Group Cl. A | 396,300 | 8,690,859 | |||||||
Liz Claiborne | 33,100 | 1,234,630 | Speedway Motorsports | 66,400 | 2,654,672 | |||||||
Steven Madden | 89,319 | 2,926,090 | ||||||||||
Polo Ralph Lauren Cl. A | 143,500 | 14,078,785 | 58,385,581 | |||||||||
Stride Rite | 973,000 | 19,712,980 | ||||||||||
Timberland Company Cl. A a | 218,335 | 5,499,859 | Media and Broadcasting - 0.2% | |||||||||
Weyco Group | 45 | 1,212 | Westwood One | 1,899,500 | 13,657,405 | |||||||
Wolverine World Wide | 644,800 | 17,867,408 | ||||||||||
Restaurants and Lodgings - 1.3% | ||||||||||||
103,687,977 | Applebee’s International | 282,800 | 6,815,480 | |||||||||
Bob Evans Farms | 707,900 | 26,086,115 | ||||||||||
Collectibles - 0.1% | Brinker International | 25,350 | 741,995 | |||||||||
Topps Company (The) | 477,000 | 5,013,270 | CBRL Group | 103,568 | 4,399,569 | |||||||
CEC Entertainment a | 955,170 | 33,621,984 | ||||||||||
Food/Beverage/Tobacco - 1.0% | IHOP Corporation | 169,230 | 9,211,189 | |||||||||
Flowers Foods | 300,000 | 10,008,000 | Ruby Tuesday | 96,500 | 2,540,845 | |||||||
Hershey Creamery | 173 | 380,600 | ||||||||||
International Flavors & Fragrances | 175,000 | 9,124,500 | 83,417,177 | |||||||||
J & J Snack Foods | 96,928 | 3,658,063 | ||||||||||
Lancaster Colony | 191,500 | 8,021,935 | Retail Stores - 3.3% | |||||||||
Mannatech | 311,438 | 4,948,750 | Books-A-Million | 427 | 7,233 | |||||||
J.M. Smucker Company (The) | 305,200 | 19,429,032 | Borders Group | 418,300 | 7,972,798 | |||||||
Tootsie Roll Industries | 342,110 | 9,479,868 | Buckle (The) | 737,494 | 29,057,264 | |||||||
Cato Corporation Cl. A | 1,143,495 | 25,088,280 | ||||||||||
65,050,748 | Deb Shops | 639,709 | 17,687,954 | |||||||||
Dress Barn (The) a | 1,326,165 | 27,212,906 | ||||||||||
Home Furnishing and Appliances - 1.5% | Family Dollar Stores | 3,300 | 113,256 | |||||||||
American Woodmark | 329,257 | 11,392,292 | Finish Line (The) Cl. A | 729,100 | 6,642,101 | |||||||
Ethan Allen Interiors | 835,795 | 28,625,979 | Foot Locker | 107,300 | 2,339,140 | |||||||
Flexsteel Industries | 213,500 | 3,093,615 | Haverty Furniture | 276,400 | 3,225,588 | |||||||
Furniture Brands International | 566,800 | 8,048,560 | The Men’s Wearhouse | 13,800 | 704,766 | |||||||
La-Z-Boy c | 1,707,300 | 19,565,658 | Pep Boys-Manny, Moe & Jack | 742,500 | 14,968,800 | |||||||
National Presto Industries | 4,100 | 255,594 | Pier 1 Imports a | 1,052,900 | 8,939,121 | |||||||
Natuzzi ADR a | 1,426,400 | 11,339,880 | Ross Stores | 250,000 | 7,700,000 | |||||||
Stanley Furniture b | 606,717 | 12,461,967 | Talbots | 250,000 | 6,257,500 | |||||||
Tiffany & Co. | 726,200 | 38,532,172 | ||||||||||
94,783,545 | Williams-Sonoma | 425,400 | 13,434,132 | |||||||||
Publishing - 0.2% | 209,883,011 | |||||||||||
Belo Corporation Cl. A | 9,900 | 203,841 | ||||||||||
Journal Communications Cl. A | 782,450 | 10,179,675 | Other Consumer Services - 0.3% | |||||||||
McClatchy Company (The) Cl. A | 111,000 | 2,809,410 | Jackson Hewitt Tax Service | 210,290 | 5,911,252 | |||||||
Sun-Times Media Group Cl. A a | 180,000 | 945,000 | MoneyGram International | 439,000 | 12,270,050 | |||||||
Renaissance Learning | 15,293 | 201,103 | ||||||||||
14,137,926 | ||||||||||||
18,382,405 | ||||||||||||
Sports and Recreation - 1.0% | ||||||||||||
Arctic Cat | 110,818 | 2,194,196 | Total (Cost $340,334,733) | 396,943,729 | ||||||||
Callaway Golf | 962,900 | 17,149,249 | ||||||||||
Thor Industries | 684,100 | 30,880,274 | Financial Intermediaries – 17.1% | |||||||||
Winnebago Industries | 433,200 | 12,788,064 | Banking - 4.6% | |||||||||
Anchor BanCorp Wisconsin | 266,200 | 6,971,778 | ||||||||||
63,011,783 | Arrow Financial | 332,678 | 7,322,243 | |||||||||
BOK Financial | 512,375 | 27,371,073 | ||||||||||
Other Consumer Products - 0.5% | Bancorp Rhode Island b | 260,600 | 9,967,950 | |||||||||
American Greetings Cl. A | 65,000 | 1,841,450 | Bank of Hawaii | 191,700 | 9,899,388 | |||||||
Matthews International Cl. A | 399,700 | 17,430,917 | Bank of N.T. Butterfield & Son | 147,499 | 8,849,940 | |||||||
Starrett (L.S.) Company Cl. A b | 518,800 | 9,504,416 | Boston Private Financial Holdings | 358,500 | 9,632,895 | |||||||
WD-40 Company | 12,045 | 395,919 | Canadian Western Bank | 883,200 | 23,413,817 | |||||||
Center Bancorp | 66,811 | 986,130 | ||||||||||
29,172,702 | Central Pacific Financial | 20,000 | 660,200 | |||||||||
Total (Cost $340,278,412) | 374,857,951 | |||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 61 |
Schedules of Investments
Royce Total Return Fund (continued) |
SHARES | VALUE | SHARES | VALUE | ||||||||||||
Financial Intermediaries (continued) | Ohio Casualty | 38,751 | $ | 1,678,306 | |||||||||||
Banking (continued) | OneBeacon Insurance Group Cl. A | 488,300 | 12,368,639 | ||||||||||||
Chemung Financial | 40,000 | $ | 1,184,000 | PartnerRe | 56,900 | 4,409,750 | |||||||||
Chittenden Corporation | 302,625 | 10,576,744 | Presidential Life | 39,178 | 770,240 | ||||||||||
Credicorp | 267,900 | 16,387,443 | RLI | 176,600 | 9,880,770 | ||||||||||
Fauquier Bankshares b | 321,600 | 7,300,320 | Reinsurance Group of America | 216,700 | 13,054,008 | ||||||||||
First Citizens BancShares Cl. A | 15,800 | 3,071,520 | RenaissanceRe Holdings | 191,300 | 11,858,687 | ||||||||||
First Financial Bancorp | 150,000 | 2,248,500 | Safety Insurance Group | 166,107 | 6,876,830 | ||||||||||
First National Bank Alaska | 3,110 | 6,842,000 | Security Capital Assurance | 119,900 | 3,701,313 | ||||||||||
Fremont General a | 29,600 | 318,496 | Selective Insurance Group | 2,036 | 54,728 | ||||||||||
HopFed Bancorp b | 187,500 | 3,016,875 | State Auto Financial | 510,600 | 15,649,890 | ||||||||||
Investors Financial Services | 328,000 | 20,227,760 | Stewart Information Services | 1,200 | 47,796 | ||||||||||
NewAlliance Bancshares | 235,000 | 3,459,200 | Transatlantic Holdings | 331,600 | 23,586,708 | ||||||||||
Park National | 143,370 | 12,156,342 | 21st Century Insurance Group | 266,000 | 5,814,760 | ||||||||||
Partners Trust Financial Group | 608,100 | 6,385,050 | United Fire & Casualty | 339,603 | 12,015,154 | ||||||||||
Peapack-Gladstone Financial | 315,991 | 8,553,876 | Wesco Financial | 31,482 | 12,120,570 | ||||||||||
Peoples Community Bancorp | 119,310 | 1,949,525 | White Mountains Insurance Group | 2,800 | 1,696,856 | ||||||||||
Provident Financial Services | 146,000 | 2,300,960 | Zenith National Insurance | 420,540 | 19,803,229 | ||||||||||
Provident New York Bancorp | 50,000 | 675,500 | |||||||||||||
Royal Bancshares of Pennsylvania Cl. A | 5,373 | 105,902 | 541,186,534 | ||||||||||||
Sterling Bancorp | 407,662 | 6,534,822 | |||||||||||||
Sun Bancorp a | 211,680 | 3,571,042 | Real Estate Investment Trusts - 1.9% | ||||||||||||
Susquehanna Bancshares | 343,500 | 7,684,095 | Annaly Capital Management | 719,600 | 10,376,632 | ||||||||||
Timberland Bancorp b | 469,200 | 7,366,440 | Capital Trust Cl. A | 418,600 | 14,291,004 | ||||||||||
Tompkins Financial | 45,958 | 1,718,829 | Cousins Properties | 223,500 | 6,483,735 | ||||||||||
Trustmark Corporation | 210,700 | 5,448,702 | Essex Property Trust | 83,000 | 9,652,900 | ||||||||||
W Holding Company | 1,190,700 | 3,143,448 | Friedman, Billings, Ramsey Group Cl. A | 1,592,600 | 8,695,596 | ||||||||||
Whitney Holding | 757,000 | 22,785,700 | MFA Mortgage Investments | 1,367,000 | 9,951,760 | ||||||||||
Wilber Corporation | 97,200 | 899,100 | Macquarie MEAG Prime REIT | 200,000 | 162,012 | ||||||||||
Wilmington Trust | 560,300 | 23,258,053 | National Retail Properties | 650,000 | 14,209,000 | ||||||||||
PS Business Parks | 168,500 | 10,677,845 | |||||||||||||
294,245,658 | Plum Creek Timber | 248,000 | 10,331,680 | ||||||||||||
Rayonier | 588,200 | 26,551,348 | |||||||||||||
Insurance - 8.5% | Suntec Real Estate Investment Trust | 400,000 | 506,941 | ||||||||||||
Alleghany Corporation a | 97,842 | 39,772,773 | |||||||||||||
American Financial Group | 725,800 | 24,786,070 | 121,890,453 | ||||||||||||
American National Insurance | 145,364 | 22,182,546 | |||||||||||||
Argonaut Group | 318,000 | 9,924,780 | Securities Brokers - 0.5% | ||||||||||||
Aspen Insurance Holdings | 728,600 | 20,451,802 | 137,000 | 1,011,060 | |||||||||||
Assured Guaranty | 563,000 | 16,642,280 | Piper Jaffray a | 211,100 | 11,764,603 | ||||||||||
Baldwin & Lyons Cl. B | 548,211 | 14,242,522 | Raymond James Financial | 501,525 | 15,497,123 | ||||||||||
CNA Surety a | 594,000 | 11,232,540 | |||||||||||||
Commerce Group | 625,600 | 21,720,832 | 28,272,786 | ||||||||||||
Donegal Group Cl. A | 98,055 | 1,461,020 | |||||||||||||
E-L Financial | 51,588 | 31,962,525 | Other Financial Intermediaries - 1.6% | ||||||||||||
EMC Insurance Group | 264,790 | 6,572,088 | A.F.P. Provida ADR | 332,000 | 10,401,560 | ||||||||||
Endurance Specialty Holdings | 26,300 | 1,053,052 | KKR Financial | 1,082,000 | 26,952,620 | ||||||||||
Erie Indemnity Cl. A | 540,600 | 29,214,024 | London Stock Exchange | 465,942 | 12,678,172 | ||||||||||
Harleysville Group | 121,396 | 4,049,771 | Student Loan | 91,900 | 18,738,410 | ||||||||||
Horace Mann Educators | 223,500 | 4,747,140 | TSX Group | 868,300 | 33,990,246 | ||||||||||
IPC Holdings | 272,600 | 8,802,254 | |||||||||||||
Independence Holding | 379,924 | 7,761,847 | 102,761,008 | ||||||||||||
Infinity Property & Casualty | 421,424 | 21,378,840 | |||||||||||||
Leucadia National | 924,200 | 32,578,050 | Total (Cost $790,240,974) | 1,088,356,439 | |||||||||||
Markel Corporation a | 54,025 | 26,178,354 | |||||||||||||
Max Capital Group | 432,800 | 12,248,240 | Financial Services – 8.9% | ||||||||||||
Midland Company | 26,374 | 1,237,996 | Information and Processing - 0.9% | ||||||||||||
Montpelier Re Holdings | 331,100 | 6,138,594 | Interactive Data | 612,900 | 16,413,462 | ||||||||||
NYMAGIC | 167,000 | 6,713,400 | SEI Investments | 1,495,700 | 43,435,128 | ||||||||||
Odyssey Re Holdings | 64,000 | 2,744,960 | |||||||||||||
59,848,590 | |||||||||||||||
Insurance Brokers - 1.3% | |||||||||||||||
Brown & Brown | 1,028,100 | 25,846,434 | |||||||||||||
Gallagher (Arthur J.) & Co. | 978,200 | 27,272,216 | |||||||||||||
Hilb Rogal & Hobbs | 537,300 | 23,028,678 | |||||||||||||
National Financial Partners | 200,000 | 9,262,000 | |||||||||||||
85,409,328 | |||||||||||||||
62 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
SHARES | VALUE | SHARES | VALUE | ||||||||||
Financial Services (continued) | Regis Corporation | 265,700 | $ | 10,163,025 | |||||||||
Investment Management - 6.1% | |||||||||||||
AGF Management Cl. B | 548,500 | $ | 18,701,262 | 30,171,219 | |||||||||
AllianceBernstein Holding L.P. | 1,666,500 | 145,135,485 | |||||||||||
CI Financial | 864,300 | 21,987,824 | Total (Cost $197,369,234) | 256,391,783 | |||||||||
Cohen & Steers | 178,800 | 7,768,860 | |||||||||||
Federated Investors Cl. B | 1,097,300 | 42,059,509 | Industrial Products – 20.8% | ||||||||||
GAMCO Investors Cl. A | 303,300 | 16,999,965 | Automotive - 0.4% | ||||||||||
IGM Financial | 545,600 | 26,515,571 | Autoliv | 30,300 | 1,723,161 | ||||||||
Janus Capital Group | 383,000 | 10,662,720 | Gentex Corporation | 595,000 | 11,715,550 | ||||||||
Nuveen Investments Cl. A | 856,800 | 53,250,120 | Superior Industries International | 523,900 | 11,400,064 | ||||||||
SPARX Group | 3,700 | 2,749,645 | |||||||||||
T. Rowe Price Group | 740,500 | 38,424,545 | 24,838,775 | ||||||||||
384,255,506 | Building Systems and Components - 1.2% | ||||||||||||
LSI Industries | 672,937 | 12,045,572 | |||||||||||
Other Financial Services - 0.6% | Preformed Line Products | 204,410 | 9,813,724 | ||||||||||
Advanta Corporation Cl. B | 169,926 | 5,291,496 | Simpson Manufacturing | 715,820 | 24,151,767 | ||||||||
Centerline Holding Company | 200,000 | 3,600,000 | Teleflex | 338,100 | 27,649,818 | ||||||||
274,005 | 7,351,554 | ||||||||||||
First Marblehead | 159,850 | 6,176,604 | 73,660,881 | ||||||||||
GATX Corporation | 274,000 | 13,494,500 | |||||||||||
Ocwen Financial a | 123,600 | 1,647,588 | Construction Materials - 0.8% | ||||||||||
Ameron International | 172,300 | 15,539,737 | |||||||||||
37,561,742 | Ash Grove Cement | 39,610 | 9,506,400 | ||||||||||
Eagle Materials | 435,800 | 21,375,990 | |||||||||||
Total (Cost $318,358,631) | 567,075,166 | NCI Building Systems a | 153,000 | 7,547,490 | |||||||||
Health – 4.0% | 53,969,617 | ||||||||||||
Commercial Services - 0.4% | |||||||||||||
Owens & Minor | 671,300 | 23,455,222 | Industrial Components - 2.7% | ||||||||||
AMETEK | 659,100 | 26,153,088 | |||||||||||
Drugs and Biotech - 0.1% | Bel Fuse Cl. A | 24,300 | 898,614 | ||||||||||
Alpharma Cl. A a | 119,600 | 3,110,796 | Bel Fuse Cl. B | 541,230 | 18,418,057 | ||||||||
Biovail Corporation | 104,900 | 2,666,558 | Chase Corporation b | 759,474 | 12,759,163 | ||||||||
Medicis Pharmaceutical Cl. A | 29,670 | 906,122 | CLARCOR | 963,100 | 36,048,833 | ||||||||
Perrigo Company | 133,800 | 2,619,804 | Crane Company | 259,800 | 11,807,910 | ||||||||
Deswell Industries | 724,706 | 7,913,790 | |||||||||||
9,303,280 | Donaldson Company | 671,400 | 23,868,270 | ||||||||||
Hubbell Cl. B | 200,000 | 10,844,000 | |||||||||||
Health Services - 0.4% | PerkinElmer | 585,500 | 15,258,130 | ||||||||||
Computer Programs and Systems | 50,050 | 1,550,549 | Standex International | 7,200 | 204,768 | ||||||||
Healthcare Services Group | 61,072 | 1,801,624 | Timken Company (The) | 600 | 21,666 | ||||||||
LCA-Vision | 254,900 | 12,046,574 | Watts Water Technologies Cl. A | 253,800 | 9,509,886 | ||||||||
Omnicare | 21,600 | 778,896 | |||||||||||
Option Care | 432,825 | 6,665,505 | 173,706,175 | ||||||||||
Universal Health Services Cl. B | 90,290 | 5,552,835 | |||||||||||
Machinery - 6.0% | |||||||||||||
28,395,983 | Applied Industrial Technologies | 806,450 | 23,790,275 | ||||||||||
Briggs & Stratton | 386,240 | 12,189,734 | |||||||||||
Medical Products and Devices – 2.6% | Cascade Corporation | 219,729 | 17,235,543 | ||||||||||
Applera Corporation-Applied | Franklin Electric | 399,300 | 18,838,974 | ||||||||||
Biosystems Group | 518,700 | 15,841,098 | Freightcar America | 10,100 | 483,184 | ||||||||
Arrow International | 614,152 | 23,509,739 | Gorman-Rupp Company | 369,046 | 11,757,806 | ||||||||
Bausch & Lomb | 4,600 | 319,424 | Graco | 592,800 | 23,877,984 | ||||||||
Datascope | 432,300 | 16,548,444 | IDEX Corporation | 551,400 | 21,250,956 | ||||||||
Hillenbrand Industries | 450,260 | 29,266,900 | Kennametal | 193,300 | 15,856,399 | ||||||||
IDEXX Laboratories a | 189,800 | 17,960,774 | Lincoln Electric Holdings | 544,400 | 40,416,256 | ||||||||
Invacare Corporation | 802,700 | 14,713,491 | Lindsay Corporation | 233,600 | 10,346,144 | ||||||||
Mentor Corporation | 235,100 | 9,563,868 | MTS Systems | 655,321 | 29,273,189 | ||||||||
STERIS Corporation | 682,000 | 20,869,200 | Mueller (Paul) Company b | 116,700 | 7,322,925 | ||||||||
Vital Signs | 288,546 | 16,028,730 | Nordson Corporation | 329,200 | 16,512,672 | ||||||||
Young Innovations | 15,230 | 444,411 | Regal-Beloit | 115,600 | 5,380,024 | ||||||||
Roper Industries | 286,000 | 16,330,600 | |||||||||||
165,066,079 | Sun Hydraulics | 449,510 | 22,138,368 | ||||||||||
Tennant Company | 527,600 | 19,257,400 | |||||||||||
Personal Care - 0.5% | Toro Company (The) | 398,645 | 23,476,204 | ||||||||||
Alberto-Culver | 404,600 | 9,597,112 | Woodward Governor | 783,000 | 42,023,610 | ||||||||
Inter Parfums | 391,100 | 10,411,082 | |||||||||||
377,758,247 | |||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 63 |
Schedules of Investments
Royce Total Return Fund (continued) |
SHARES | VALUE | SHARES | VALUE | ||||||||||||
Industrial Products (continued) | Industrial Services – 9.1% | ||||||||||||||
Metal Fabrication and Distribution - 4.1% | Commercial Services - 3.2% | ||||||||||||||
Carpenter Technology | 130,500 | $ | 17,005,455 | ABM Industries | 844,500 | $ | 21,796,545 | ||||||||
Castle (A.M.) & Co. | 17,908 | 643,076 | Brink’s Company (The) | 279,400 | 17,292,066 | ||||||||||
Chaparral Steel | 307,200 | 22,078,464 | Chemed Corporation | 526,100 | 34,875,169 | ||||||||||
Cleveland-Cliffs | 8,200 | 636,894 | Gevity HR | 27,800 | 537,374 | ||||||||||
Commercial Metals | 340,140 | 11,486,528 | Kelly Services Cl. A | 583,200 | 16,014,672 | ||||||||||
Gerdau Ameristeel | 252,000 | 3,686,760 | MPS Group a | 604,000 | 8,075,480 | ||||||||||
Gibraltar Industries | 643,106 | 14,244,798 | Macquarie Infrastructure Company Trust | 254,100 | 10,540,068 | ||||||||||
Insteel Industries | 207,495 | 3,734,910 | Manpower | 345,200 | 31,841,248 | ||||||||||
IPSCO | 211,800 | 33,650,784 | Onex Corporation | 339,000 | 11,711,054 | ||||||||||
Kaydon Corporation | 762,500 | 39,741,500 | Rollins | 370,500 | 8,436,285 | ||||||||||
Metal Management | 3,000 | 132,210 | ServiceMaster Company (The) | 647,000 | 10,002,620 | ||||||||||
Mueller Industries | 75,900 | 2,613,996 | Watson Wyatt Worldwide Cl. A | 688,500 | 34,755,480 | ||||||||||
Olympic Steel | 34,874 | 999,489 | |||||||||||||
Quanex Corporation | 522,822 | 25,461,431 | 205,878,061 | ||||||||||||
Reliance Steel & Aluminum | 810,200 | 45,581,852 | |||||||||||||
Schnitzer Steel Industries Cl. A | 235,000 | 11,265,900 | Engineering and Construction - 0.8% | ||||||||||||
Steel Dynamics | 617,243 | 25,868,654 | Comfort Systems USA | 133,100 | 1,887,358 | ||||||||||
EMCOR Group a | 305,900 | 22,300,110 | |||||||||||||
258,832,701 | Granite Construction | 214,240 | 13,749,923 | ||||||||||||
M.D.C. Holdings | 20,464 | 989,639 | |||||||||||||
Paper and Packaging - 1.1% | M/I Homes | 12,880 | 342,608 | ||||||||||||
AptarGroup | 676,300 | 24,049,228 | Ryland Group (The) | 40,700 | 1,520,959 | ||||||||||
Bemis Company | 589,940 | 19,574,209 | Skyline Corporation | 223,100 | 6,695,231 | ||||||||||
Greif Cl. A | 187,900 | 11,200,719 | Standard Pacific | 2,200 | 38,566 | ||||||||||
Louisiana-Pacific Corporation | 25,000 | 473,000 | |||||||||||||
Sonoco Products | 349,500 | 14,962,095 | 47,524,394 | ||||||||||||
70,259,251 | Food and Tobacco Processors - 0.6% | ||||||||||||||
Farmer Bros. | 542,300 | 12,272,249 | |||||||||||||
Specialty Chemicals and Materials - 2.4% | Imperial Sugar | 67,400 | 2,075,246 | ||||||||||||
Agrium | 5,200 | 227,500 | Sanderson Farms | 35,100 | 1,580,202 | ||||||||||
Albemarle Corporation | 341,000 | 13,138,730 | Seaboard Corporation | 9,959 | 23,353,855 | ||||||||||
Balchem Corporation | 734,400 | 13,344,048 | |||||||||||||
CF Industries Holdings | 40,400 | 2,419,556 | 39,281,552 | ||||||||||||
Cabot Corporation | 818,700 | 39,035,616 | |||||||||||||
Innospec | 149,657 | 8,861,191 | Industrial Distribution - 1.3% | ||||||||||||
Lubrizol Corporation | 447,900 | 28,911,945 | Grainger (W.W.) | 263,500 | 24,518,675 | ||||||||||
Methanex Corporation | 512,298 | 12,879,172 | Lawson Products | 199,600 | 7,724,520 | ||||||||||
Park Electrochemical | 35,300 | 994,754 | Mine Safety Appliances | 196,000 | 8,576,960 | ||||||||||
Quaker Chemical | 405,000 | 9,558,000 | Ritchie Bros. Auctioneers | 642,340 | 40,223,331 | ||||||||||
RPM International | 20,300 | 469,133 | Watsco | 3,700 | 201,280 | ||||||||||
Westlake Chemical | 749,110 | 21,064,973 | |||||||||||||
81,244,766 | |||||||||||||||
150,904,618 | |||||||||||||||
Printing - 0.4% | |||||||||||||||
Textiles - 0.2% | Bowne & Co. | 67,000 | 1,307,170 | ||||||||||||
Albany International Cl. A | 344,300 | 13,923,492 | CSS Industries | 75,460 | 2,988,971 | ||||||||||
UniFirst Corporation | 31,600 | 1,391,980 | Courier Corporation | 15,844 | 633,760 | ||||||||||
Ennis | 890,400 | 20,942,208 | |||||||||||||
15,315,472 | |||||||||||||||
25,872,109 | |||||||||||||||
Other Industrial Products - 1.9% | |||||||||||||||
Brady Corporation Cl. A | 771,000 | 28,634,940 | Transportation and Logistics - 2.5% | ||||||||||||
Diebold | 147,800 | 7,715,160 | Alexander & Baldwin | 494,700 | 26,273,517 | ||||||||||
HNI Corporation | 527,200 | 21,615,200 | Arkansas Best | 579,791 | 22,594,455 | ||||||||||
Kimball International Cl. B | 674,600 | 9,451,146 | C. H. Robinson Worldwide | 256,000 | 13,445,120 | ||||||||||
McGrath RentCorp | 291,300 | 9,813,897 | Expeditors International of Washington | 586,400 | 24,218,320 | ||||||||||
Quixote Corporation b | 461,900 | 8,637,530 | Florida East Coast Industries | 202,100 | 16,770,258 | ||||||||||
Raven Industries | 156,201 | 5,577,938 | J.B. Hunt Transport Services | 17,200 | 504,304 | ||||||||||
Smith (A.O.) Corporation | 308,900 | 12,322,021 | Interpool | 14,400 | 387,360 | ||||||||||
Trinity Industries | 339,850 | 14,797,069 | Nordic American Tanker Shipping | 134,500 | 5,492,980 | ||||||||||
Overseas Shipholding Group | 13,400 | 1,090,760 | |||||||||||||
118,564,901 | Pacer International | 864,200 | 20,325,984 | ||||||||||||
SkyWest | 445,600 | 10,618,648 | |||||||||||||
Total (Cost $801,240,945) | 1,317,810,638 | Teekay Shipping | 103,300 | 5,982,103 | |||||||||||
UTI Worldwide | 492,600 | 13,196,754 | |||||||||||||
160,900,563 | |||||||||||||||
64 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
SHARES | VALUE | SHARES | VALUE | ||||||||||
Industrial Services (continued) | W.P. Carey & Co. | 518,500 | $ | 16,306,825 | |||||||||
Other Industrial Services - 0.3% | |||||||||||||
Landauer | 406,400 | $ | 20,015,200 | 46,799,401 | |||||||||
Total (Cost $326,185,803) | 580,716,645 | Other Natural Resources - 0.6% | |||||||||||
Alliance Holdings GP L.P. | 468,500 | 13,942,560 | |||||||||||
Natural Resources – 11.7% | Deltic Timber | 172,000 | 9,429,040 | ||||||||||
Energy Services - 4.0% | Natural Resource Partners L.P. | 308,200 | 11,723,928 | ||||||||||
Carbo Ceramics | 252,750 | 11,072,978 | |||||||||||
Energy Transfer Equity L.P. | 530,600 | 22,545,194 | 35,095,528 | ||||||||||
Ensign Energy Services | 1,116,500 | 19,914,104 | |||||||||||
Helmerich & Payne | 1,607,600 | 56,941,192 | Total (Cost $524,420,319) | 740,458,537 | |||||||||
Lufkin Industries | 26,757 | 1,727,164 | |||||||||||
National Fuel Gas | 114,500 | 4,958,995 | Technology – 4.6% | ||||||||||
Nicor | 371,700 | 15,953,364 | Aerospace and Defense - 0.4% | ||||||||||
NuStar GP Holdings | 369,200 | 14,125,592 | Curtiss-Wright | 109,400 | 5,099,134 | ||||||||
Otter Tail | 239,000 | 7,664,730 | HEICO Corporation | 210,400 | 8,853,632 | ||||||||
Patterson-UTI Energy | 1,369,500 | 35,894,595 | HEICO Corporation Cl. A | 335,159 | 11,780,839 | ||||||||
Piedmont Natural Gas | 585,800 | 14,439,970 | Kaman Corporation | 70,800 | 2,208,252 | ||||||||
Precision Drilling Trust | 763,750 | 18,673,688 | |||||||||||
RPC | 91,270 | 1,555,241 | 27,941,857 | ||||||||||
Tidewater | 152,100 | 10,780,848 | |||||||||||
Universal Compression Holdings a | 213,700 | 15,486,839 | Components and Systems - 1.6% | ||||||||||
AVX Corporation | 905,900 | 15,164,766 | |||||||||||
251,734,494 | Analogic Corporation | 141,400 | 10,394,314 | ||||||||||
Imation Corporation | 342,297 | 12,617,067 | |||||||||||
Oil and Gas - 5.8% | Methode Electronics | 990,493 | 15,501,216 | ||||||||||
Alliance Resource Partners L.P. | 241,000 | 10,097,900 | Nam Tai Electronics | 605,340 | 7,215,653 | ||||||||
Berry Petroleum Cl. A | 274,200 | 10,331,856 | Technitrol | 969,700 | 27,801,299 | ||||||||
Cimarex Energy | 1,111,005 | 43,784,707 | Tektronix | 378,100 | 12,757,094 | ||||||||
Crosstex Energy | 360,200 | 10,348,546 | |||||||||||
Energen Corporation | 369,400 | 20,294,836 | 101,451,409 | ||||||||||
Energy Transfer Partners L.P. | 114,200 | 7,049,566 | |||||||||||
EnergySouth | 208,605 | 10,638,855 | Distriution - 0.1% | ||||||||||
Enterprise GP Holdings L.P. | 385,900 | 14,637,187 | Tech Data a | 207,800 | 7,991,988 | ||||||||
Frontier Oil | 625,900 | 27,395,643 | |||||||||||
Hiland Holdings GP L.P. | 184,400 | 6,610,740 | Internet Software and Services - 0.6% | ||||||||||
Holly Corporation | 3,500 | 259,665 | CryptoLogic | 143,028 | 3,489,883 | ||||||||
Hugoton Royalty Trust | 245,600 | 6,196,488 | United Online | 1,977,906 | 32,615,670 | ||||||||
Magellan Midstream Holdings L.P. | 738,500 | 22,155,000 | |||||||||||
Magellan Midstream Partners L.P. | 128,000 | 5,962,240 | 36,105,553 | ||||||||||
Penn Virginia | 648,660 | 26,076,132 | |||||||||||
Penn Virginia GP Holdings L.P. | 228,000 | 7,093,080 | IT Services - 0.5% | ||||||||||
Plains All American Pipeline L.P. | 277,630 | 17,671,150 | Black Box | 626,996 | 25,945,095 | ||||||||
Pogo Producing | 199,500 | 10,132,605 | MAXIMUS | 5,785 | 250,953 | ||||||||
Rowan Companies | 4,300 | 176,214 | Total System Services | 180,100 | 5,314,751 | ||||||||
St. Mary Land & Exploration | 656,700 | 24,048,354 | |||||||||||
SEACOR Holdings a | 335,000 | 31,275,600 | 31,510,799 | ||||||||||
Stone Energy a | 180,450 | 6,182,217 | |||||||||||
Sunoco Logistics Partners L.P. | 181,000 | 10,874,480 | Semiconductors and Equipment - 0.2% | ||||||||||
Universal Compression Partners L.P. | 389,900 | 14,266,441 | Cognex Corporation | 418,300 | 9,415,933 | ||||||||
W&T Offshore | 973,800 | 27,256,662 | Cohu | 30,300 | 674,175 | ||||||||
Exar Corporation a | 600 | 8,040 | |||||||||||
370,816,164 | |||||||||||||
10,098,148 | |||||||||||||
Precious Metals and Mining - 0.6% | |||||||||||||
Agnico-Eagle Mines | 351,000 | 12,811,500 | Software - 0.2% | ||||||||||
Gold Fields ADR | 434,700 | 6,824,790 | Advent Software a | 197,500 | 6,428,625 | ||||||||
IAMGOLD Corporation | 455,000 | 3,485,300 | Fair Isaac | 221,000 | 8,866,520 | ||||||||
Lihir Gold ADR a | 502,000 | 12,891,360 | |||||||||||
15,295,145 | |||||||||||||
36,012,950 | |||||||||||||
Telecommunications - 1.0% | |||||||||||||
Real Estate - 0.7% | ADTRAN | 527,200 | 13,691,384 | ||||||||||
AMREP Corporation | 23,992 | 1,140,820 | Atlantic Tele-Network | 128,081 | 3,668,240 | ||||||||
The St. Joe Company | 633,400 | 29,351,756 | Golden Telecom a | 135,705 | 7,465,132 | ||||||||
North Pittsburgh Systems b | 1,214,402 | 25,806,043 | |||||||||||
SureWest Communications | 271,400 | 7,392,936 | |||||||||||
USA Mobility | 162,700 | 4,353,852 | |||||||||||
62,377,587 | |||||||||||||
Total (Cost $227,560,430) | 292,772,486 | ||||||||||||
Utilities – 1.8% | |||||||||||||
ALLETE | 264,067 | 12,424,352 | |||||||||||
Aqua America | 794,766 | 17,874,287 | |||||||||||
CH Energy Group | 224,300 | 10,086,771 | |||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 65 |
Schedules of Investments
Royce Total Return Fund (continued) |
SHARES | VALUE | PRINCIPAL | ||||||||||||
AMOUNT | VALUE | |||||||||||||
Utilities (continued) | ||||||||||||||
El Paso Electric a | 395,400 | $ | 9,711,024 | U.S. TREASURY OBLIGATIONS – 1.5% | ||||||||||
Hawaiian Electric Industries | 661,000 | 15,659,090 | U.S. Treasury Notes | |||||||||||
ITC Holdings | 100,000 | 4,063,000 | 3.25%, due 8/15/08 | $ | 100,000,000 | $ | 98,125,000 | |||||||
PNM Resources | 638,900 | 17,755,031 | ||||||||||||
SJW | 400,400 | 13,333,320 | TOTAL U.S. TREASURY OBLIGATIONS | |||||||||||
Southern Union | 315,000 | 10,265,850 | (Cost $99,818,438) | 98,125,000 | ||||||||||
Total (Cost $81,504,228) | 111,172,725 | REPURCHASE AGREEMENTS – 4.5% | ||||||||||||
State Street Bank & Trust Company, | ||||||||||||||
Miscellaneous e – 0.8% | 5.10% dated 6/29/07, due 7/2/07, | |||||||||||||
Total (Cost $49,698,972) | 49,016,880 | maturity value $105,640,878 (collateralized | ||||||||||||
by obligations of various U.S. Government | ||||||||||||||
TOTAL COMMON STOCKS | Agencies, valued at $108,237,281) | |||||||||||||
(Cost $3,997,192,681) | 5,775,572,979 | (Cost $105,596,000) | 105,596,000 | |||||||||||
PREFERRED STOCKS – 0.8% | Lehman Brothers (Tri-Party), | |||||||||||||
Allied Waste Industries Ser. D 6.25% Conv. d | 28,300 | 9,900,472 | 5.05% dated 6/29/07, due 7/2/07, | |||||||||||
Central Parking Finance Trust 5.25% Conv. | 4,000 | 72,600 | maturity value $180,075,750 (collateralized | |||||||||||
†Edge Petroleum 5.75% Ser. A Conv. | 171,000 | 9,199,800 | by obligations of various U.S. Government | |||||||||||
Fedders Corporation 8.60% Ser. A a | 79,975 | 163,949 | Agencies, valued at $183,679,512) | |||||||||||
Fleetwood Capital Trust 6.00% Conv. | 70,000 | 2,257,500 | (Cost $180,000,000) | 180,000,000 | ||||||||||
Merrill Lynch & Co. 6.75% Conv. | 115,000 | 6,082,235 | ||||||||||||
PNM Resources 6.75% Conv. | 35,000 | 1,750,000 | TOTAL REPURCHASE AGREEMENTS | �� | ||||||||||
Reinsurance Group of America 5.75% Conv. | 94,000 | 7,073,500 | (Cost $285,596,000) | 285,596,000 | ||||||||||
Vornado Realty Trust Ser. F 6.75% | 200,000 | 4,914,000 | ||||||||||||
Vornado Realty Trust Ser. G 6.625% | 400,000 | 9,472,000 | COLLATERAL RECEIVED FOR SECURITIES | |||||||||||
LOANED – 0.4% | ||||||||||||||
TOTAL PREFERRED STOCKS | U.S. Treasury Bonds 2.375%-8.875% | |||||||||||||
(Cost $44,756,963) | 50,886,056 | due 5/15/17-8/15/29 | 17,246,567 | 17,611,053 | ||||||||||
U.S. Treasury Notes 0.875%-6.00% | ||||||||||||||
PRINCIPAL | due 1/15/08-1/15/15 | 4,772,391 | 4,812,682 | |||||||||||
AMOUNT | ||||||||||||||
CORPORATE BONDS – 0.2% | TOTAL COLLATERAL RECEIVED FOR | |||||||||||||
Leucadia National 3.75% | SECURITIES LOANED | |||||||||||||
Conv. Senior Note due 4/15/14 | $ | 3,000,000 | 4,998,750 | (Cost $22,423,735) | 22,423,735 | |||||||||
Level 3 Communications 6.00% | ||||||||||||||
Conv. Sub. Deb. due 9/15/09 | 5,000,000 | 4,850,000 | TOTAL INVESTMENTS – 100.6% | |||||||||||
Levi Strauss & Co. 12.25% | (Cost $4,581,277,759) | 6,384,193,883 | ||||||||||||
Senior Note due 12/15/12 | 1,000,000 | 1,082,500 | ||||||||||||
Mueller Industries 6.00% | LIABILITIES LESS CASH | |||||||||||||
Sub. Deb. due 11/1/14 | 1,088,000 | 1,010,480 | AND OTHER ASSETS – (0.6)% | (37,456,399 | ) | |||||||||
TOTAL CORPORATE BONDS | NET ASSETS – 100.0% | $ | 6,346,737,484 | |||||||||||
(Cost $8,551,614) | 11,941,730 | |||||||||||||
GOVERNMENT BONDS – 2.2% | ||||||||||||||
(Principal Amount shown in Canadian dollars) | ||||||||||||||
Canada 4.50%, due 9/1/07 | 50,000,000 | 46,913,870 | ||||||||||||
Canada 4.25%, due 9/1/08 | 50,000,000 | 46,743,957 | ||||||||||||
Canada 5.50%, due 6/1/09 | 24,000,000 | 22,904,595 | ||||||||||||
Canada 5.50%, due 6/1/10 | 24,000,000 | 23,085,961 | ||||||||||||
TOTAL GOVERNMENT BONDS | ||||||||||||||
(Cost $122,938,328) | 139,648,383 | |||||||||||||
66 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
Royce Heritage Fund |
SHARES | VALUE | SHARES | VALUE | |||||||||
COMMON STOCKS – 86.6% | Crawford & Company Cl. A a | 10,000 | $ | 63,000 | ||||||||
Consumer Products – 2.4% | 6,500 | 124,085 | ||||||||||
Apparel and Shoes - 1.1% | Gallagher (Arthur J.) & Co. c | 28,000 | 780,640 | |||||||||
37,700 | $ | 287,651 | Health Benefits Direct a | 154,400 | 362,840 | |||||||
Polo Ralph Lauren Cl. A c | 5,300 | 519,983 | ||||||||||
26,000 | 528,580 | 2,587,565 | ||||||||||
1,336,214 | Investment Management - 6.0% | |||||||||||
2,400 | 309,024 | |||||||||||
Food/Beverage/Tobacco - 0.3% | AllianceBernstein Holding L.P. c | 44,000 | 3,831,960 | |||||||||
19,000 | 383,990 | Federated Investors Cl. B c | 21,700 | 831,761 | ||||||||
131,300 | 807,495 | |||||||||||
Sports and Recreation - 0.3% | Highbury Financial (Warrants) a | 222,600 | 342,804 | |||||||||
45,500 | 318,500 | Nuveen Investments Cl. A c | 17,200 | 1,068,980 | ||||||||
Other Consumer Products - 0.7% | 7,192,024 | |||||||||||
74,100 | 825,474 | |||||||||||
Other Financial Services - 0.9% | ||||||||||||
Total (Cost $2,286,346) | 2,864,178 | 74,400 | 549,072 | |||||||||
Chardan North China Acquisition | ||||||||||||
Consumer Services – 4.2% | (Warrants) a | 198,800 | 520,856 | |||||||||
Restaurants and Lodgings - 1.1% | ||||||||||||
25,000 | 880,000 | 1,069,928 | ||||||||||
87,100 | 397,176 | |||||||||||
Total (Cost $8,672,763) | 13,672,911 | |||||||||||
1,277,176 | ||||||||||||
Health – 8.6% | ||||||||||||
Retail Stores - 1.1% | Commercial Services - 1.0% | |||||||||||
†Longs Drug Stores | 16,700 | 877,084 | 133,100 | 1,264,450 | ||||||||
20,900 | 421,344 | |||||||||||
Drugs and Biotech - 4.3% | ||||||||||||
1,298,428 | 30,900 | 469,062 | ||||||||||
22,300 | 763,329 | |||||||||||
Other Consumer Services - 2.0% | 50,481 | 602,743 | ||||||||||
16,800 | 273,672 | 21,400 | 263,434 | |||||||||
MoneyGram International | 25,100 | 701,545 | 115,700 | 954,525 | ||||||||
18,300 | 288,408 | Perrigo Company c | 74,800 | 1,464,584 | ||||||||
47,300 | 1,200,947 | 128,100 | 579,012 | |||||||||
2,464,572 | 5,096,689 | |||||||||||
Total (Cost $4,667,490) | 5,040,176 | Health Services - 1.7% | ||||||||||
98,500 | 924,915 | |||||||||||
Financial Intermediaries – 4.5% | 10,000 | 181,100 | ||||||||||
Banking - 1.7% | Res-Care a | 46,010 | 972,651 | |||||||||
†BOK Financial | 19,100 | 1,020,322 | ||||||||||
15,400 | 433,664 | 2,078,666 | ||||||||||
Peapack-Gladstone Financial | 22,500 | 609,075 | ||||||||||
Medical Products and Devices - 1.6% | ||||||||||||
2,063,061 | Arrow International c | 33,500 | 1,282,380 | |||||||||
59,600 | 421,372 | |||||||||||
Real Estate Investment Trusts - 0.3% | Golden Meditech Company a | 307,000 | 176,680 | |||||||||
Capital Trust Cl. A c | 9,300 | 317,502 | ||||||||||
1,880,432 | ||||||||||||
Securities Brokers - 2.5% | ||||||||||||
15,000 | 406,950 | Total (Cost $9,044,363) | 10,320,237 | |||||||||
23,300 | 541,725 | |||||||||||
Jefferies Group c | 32,900 | 887,642 | Industrial Products – 10.9% | |||||||||
6,000 | 176,280 | Automotive - 0.7% | ||||||||||
17,200 | 958,556 | 42,700 | 872,788 | |||||||||
2,971,153 | Construction Materials - 1.1% | |||||||||||
38,500 | 1,294,755 | |||||||||||
Total (Cost $5,267,244) | 5,351,716 | |||||||||||
Machinery - 4.5% | ||||||||||||
Financial Services – 11.5% | 11,800 | 504,922 | ||||||||||
Information and Processing - 2.4% | Franklin Electric c | 800 | 37,744 | |||||||||
29,900 | 1,055,171 | 7,100 | 354,858 | |||||||||
12,900 | 606,623 | Lincoln Electric Holdings c | 14,400 | 1,069,056 | ||||||||
SEI Investments | 40,000 | 1,161,600 | 18,900 | 1,304,100 | ||||||||
Tennant Company | 33,000 | 1,204,500 | ||||||||||
2,823,394 | Woodward Governor c | 16,800 | 901,656 | |||||||||
Insurance Brokers - 2.2% | 5,376,836 | |||||||||||
Brown & Brown c | 50,000 | 1,257,000 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 67 |
Schedules of Investments
Royce Heritage Fund (continued) |
SHARES | VALUE | SHARES | VALUE | |||||||||
Industrial Products (continued) | 6,700 | $ | 421,497 | |||||||||
Metal Fabrication and Distribution - 3.0% | ||||||||||||
Commercial Metals c | 13,100 | $ | 442,387 | 2,152,991 | ||||||||
Haynes International a | 8,590 | 725,254 | ||||||||||
Insteel Industries | 56,520 | 1,017,360 | Precious Metals and Mining - 0.8% | |||||||||
Kaydon Corporation c | 12,900 | 672,348 | 61,500 | 367,770 | ||||||||
Schnitzer Steel Industries Cl. A | 15,000 | 719,100 | Northgate Minerals a | 203,000 | 588,700 | |||||||
3,576,449 | 956,470 | |||||||||||
Other Industrial Products - 1.6% | Real Estate - 0.7% | |||||||||||
Brady Corporation Cl. A c | 27,700 | 1,028,778 | †The St. Joe Company | 18,800 | 871,192 | |||||||
Raven Industries c | 25,600 | 914,176 | ||||||||||
Total (Cost $5,787,970) | 6,782,727 | |||||||||||
1,942,954 | ||||||||||||
Technology – 24.5% | ||||||||||||
Total (Cost $8,555,201) | 13,063,782 | Aerospace and Defense - 1.4% | ||||||||||
HEICO Corporation Cl. A | 9,200 | 323,380 | ||||||||||
Industrial Services – 10.3% | Integral Systems c | 54,200 | 1,317,602 | |||||||||
Advertising and Publishing - 0.3% | TVI Corporation a | 154,850 | 89,813 | |||||||||
Journal Register c | 80,900 | 362,432 | ||||||||||
1,730,795 | ||||||||||||
Commercial Services - 4.7% | ||||||||||||
49,800 | 402,882 | Components and Systems - 6.0% | ||||||||||
20,000 | 669,800 | 97,950 | 1,582,872 | |||||||||
25,000 | 764,750 | 58,600 | 468,214 | |||||||||
25,000 | 237,750 | 27,200 | 867,408 | |||||||||
13,015 | 295,440 | 99,400 | 1,538,712 | |||||||||
20,000 | 640,000 | Richardson Electronics | 132,400 | 1,224,700 | ||||||||
33,000 | 441,210 | 69,853 | 209,559 | |||||||||
77,700 | 617,715 | Technitrol c | 42,800 | 1,227,076 | ||||||||
PDI a | 43,400 | 445,284 | ||||||||||
56,700 | 643,545 | 7,118,541 | ||||||||||
44,300 | 477,997 | |||||||||||
Distribution - 0.9% | ||||||||||||
5,636,373 | 91,600 | 567,004 | ||||||||||
48,300 | 468,510 | |||||||||||
Engineering and Construction - 1.9% | ||||||||||||
23,000 | 218,500 | 1,035,514 | ||||||||||
Hanfeng Evergreen a | 45,300 | 510,303 | ||||||||||
46,200 | 1,523,214 | Internet Software and Services - 1.9% | ||||||||||
53,700 | 439,803 | |||||||||||
2,252,017 | 100,000 | 728,000 | ||||||||||
69,900 | 1,140,768 | |||||||||||
Food and Tobacco Processors - 0.4% | ||||||||||||
Sunopta a | 41,170 | 459,046 | 2,308,571 | |||||||||
Industrial Distribution - 1.6% | IT Services - 2.5% | |||||||||||
Ritchie Bros. Auctioneers | 31,000 | 1,941,220 | 75,000 | 548,250 | ||||||||
30,000 | 843,900 | |||||||||||
Transportation and Logistics - 1.4% | MAXIMUS | 8,600 | 373,068 | |||||||||
65,900 | 531,154 | 50,000 | 852,000 | |||||||||
2,100 | 53,613 | 54,800 | 423,604 | |||||||||
UTI Worldwide c | 18,000 | 482,220 | ||||||||||
28,100 | 558,347 | 3,040,822 | ||||||||||
1,625,334 | Semiconductors and Equipment - 6.2% | |||||||||||
159,300 | 979,695 | |||||||||||
Total (Cost $8,742,273) | 12,276,422 | Cognex Corporation c | 38,500 | 866,635 | ||||||||
31,000 | 1,294,870 | |||||||||||
Natural Resources – 5.7% | 34,700 | 1,228,727 | ||||||||||
Energy Services - 2.4% | 87,550 | 1,173,170 | ||||||||||
Carbo Ceramics c | 16,800 | 736,008 | 50,600 | 772,662 | ||||||||
17,800 | 312,746 | Jazz Technologies (Units) a | 80,000 | 368,000 | ||||||||
17,600 | 1,275,472 | 21,500 | 673,810 | |||||||||
Willbros Group a | 16,100 | 477,848 | ||||||||||
7,357,569 | ||||||||||||
2,802,074 | ||||||||||||
Software - 2.2% | ||||||||||||
Oil and Gas - 1.8% | 15,000 | 488,250 | ||||||||||
CE Franklin a | 8,360 | 97,394 | 387,600 | 821,712 | ||||||||
50,000 | 700,500 | 94,600 | 878,834 | |||||||||
10,000 | 933,600 | 89,090 | 405,360 | |||||||||
2,594,156 | ||||||||||||
68 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
Royce Opportunity Fund | ||
SHARES | VALUE | SHARES | VALUE | ||||||||||
Technology (continued) | COMMON STOCKS – 93.5% | ||||||||||||
Telecommunications - 3.4% | |||||||||||||
21,600 | $ | 395,928 | Consumer Products – 5.3% | ||||||||||
ADTRAN c | 30,400 | 789,488 | Apparel and Shoes - 2.5% | ||||||||||
18,200 | 844,844 | Bernard Chaus a | 884,558 | $ | 716,492 | ||||||||
139,600 | 650,536 | 927,450 | 7,076,443 | ||||||||||
26,800 | 432,552 | 617,200 | 16,682,916 | ||||||||||
Radyne a | 53,000 | 565,510 | Hartmarx Corporation a | 1,389,500 | 11,074,315 | ||||||||
82,578 | 355,085 | Kellwood Company | 483,700 | 13,601,644 | |||||||||
286,400 | 4,046,832 | ||||||||||||
4,033,943 | 431,079 | 16,958,648 | |||||||||||
Total (Cost $27,114,235) | 29,219,911 | 70,157,290 | |||||||||||
Miscellaneous e – 4.0% | Home Furnishing and Appliances - 0.8% | ||||||||||||
Total (Cost $4,424,352) | 4,734,086 | 713,700 | 2,690,649 | ||||||||||
Furniture Brands International | 645,000 | 9,159,000 | |||||||||||
TOTAL COMMON STOCKS | La-Z-Boy c | 824,200 | 9,445,332 | ||||||||||
(Cost $84,562,237) | 103,326,146 | ||||||||||||
21,294,981 | |||||||||||||
PREFERRED STOCK – 0.9% | |||||||||||||
†Edge Petroleum 5.75% Ser. A Conv. | 20,600 | 1,108,280 | Publishing - 1.4% | ||||||||||
McClatchy Company (The) Cl. A | 493,400 | 12,487,954 | |||||||||||
TOTAL PREFERRED STOCK | Media General Cl. A | 291,800 | 9,708,186 | ||||||||||
(Cost $1,030,000) | 1,108,280 | 506,900 | 18,217,986 | ||||||||||
REPURCHASE AGREEMENT – 11.1% | 40,414,126 | ||||||||||||
State Street Bank & Trust Company, | |||||||||||||
5.10% dated 6/29/07, due 7/2/07, | Other Consumer Products - 0.6% | ||||||||||||
maturity value $13,208,611 (collateralized | 898,846 | 10,013,144 | |||||||||||
by obligations of various U.S. Government | Universal Electronics a | 152,300 | 5,531,536 | ||||||||||
Agencies, valued at $13,536,327) | |||||||||||||
(Cost $13,203,000) | 13,203,000 | 15,544,680 | |||||||||||
COLLATERAL RECEIVED FOR SECURITIES | Total (Cost $134,030,830) | 147,411,077 | |||||||||||
LOANED – 22.7% | |||||||||||||
Money Market Funds | Consumer Services – 8.1% | ||||||||||||
State Street Navigator Securities Lending | Direct Marketing - 0.1% | ||||||||||||
Prime Portfolio (7 day yield-5.27%) | Alloy a | 399,700 | 3,997,000 | ||||||||||
(Cost $27,039,273) | 27,039,273 | ||||||||||||
Leisure and Entertainment - 1.5% | |||||||||||||
TOTAL INVESTMENTS – 121.3% | Carmike Cinemas c | 330,774 | 7,263,797 | ||||||||||
(Cost $125,834,510) | 144,676,699 | 635,700 | 11,372,673 | ||||||||||
Regal Entertainment Group Cl. A | 758,000 | 16,622,940 | |||||||||||
LIABILITIES LESS CASH | Steinway Musical Instruments | 220,600 | 7,630,554 | ||||||||||
AND OTHER ASSETS – (21.3)% | (25,398,519 | ) | |||||||||||
42,889,964 | |||||||||||||
NET ASSETS – 100.0% | $ | 119,278,180 | |||||||||||
Media and Broadcasting - 0.5% | |||||||||||||
Ballantyne of Omaha a | 239,400 | 1,462,734 | |||||||||||
812,200 | 11,565,728 | ||||||||||||
13,028,462 | |||||||||||||
�� | |||||||||||||
Restaurants and Lodgings - 0.9% | |||||||||||||
Landry’s Restaurants | 611,000 | 18,488,860 | |||||||||||
616,900 | 6,249,197 | ||||||||||||
24,738,057 | |||||||||||||
Retail Stores - 4.6% | |||||||||||||
467,366 | 3,383,730 | ||||||||||||
Bombay Company (The) a | 642,205 | 288,992 | |||||||||||
442,652 | 12,642,141 | ||||||||||||
Cost Plus a | 419,565 | 3,557,911 | |||||||||||
Dillard’s Cl. A | 297,900 | 10,703,547 | |||||||||||
Fred’s Cl. A | 747,500 | 10,001,550 | |||||||||||
219,216 | 2,488,102 | ||||||||||||
1,606,000 | 14,871,560 | ||||||||||||
539,000 | 10,790,780 | ||||||||||||
574,200 | 12,632,400 | ||||||||||||
1,403,986 | 7,834,242 | ||||||||||||
561,200 | 11,128,596 | ||||||||||||
Saks a | 611,400 | 13,053,390 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 69 |
Schedules of Investments
Royce Opportunity Fund (continued) |
SHARES | VALUE | SHARES | VALUE | |||||||||
Consumer Services (continued) | 774,300 | $ | 3,368,205 | |||||||||
Retail Stores (continued) | Home Diagnostics a | 406,350 | 4,782,740 | |||||||||
Tuesday Morning | 447,800 | $ | 5,534,808 | New Brunswick Scientific a | 389,874 | 3,111,195 | ||||||
547,944 | 7,539,709 | 275,700 | 12,398,229 | |||||||||
621,400 | 1,143,376 | 489,100 | 11,797,092 | |||||||||
127,594,834 | 41,218,023 | |||||||||||
Other Consumer Services - 0.5% | Total (Cost $139,306,614) | 150,643,817 | ||||||||||
1,384,329 | 5,883,398 | |||||||||||
464,100 | 6,896,526 | Industrial Products – 22.5% | ||||||||||
Automotive - 0.5% | ||||||||||||
12,779,924 | Cooper Tire & Rubber | 475,500 | 13,133,310 | |||||||||
Total (Cost $208,636,629) | 225,028,241 | Building Systems and Components - 0.2% | ||||||||||
Lennox International | 109,500 | 3,748,185 | ||||||||||
Financial Intermediaries – 2.4% | 657,701 | 1,775,793 | ||||||||||
Banking - 1.0% | ||||||||||||
Cascade Financial | 157,975 | 2,500,744 | 5,523,978 | |||||||||
742,601 | 6,289,830 | |||||||||||
235,100 | 2,529,676 | Construction Materials - 0.8% | ||||||||||
Great Lakes Bancorp a | 460,800 | 6,087,168 | Apogee Enterprises | 344,235 | 9,576,618 | |||||||
104,900 | 1,485,384 | 624,700 | 12,262,861 | |||||||||
Superior Bancorp a | 186,400 | 1,906,872 | ||||||||||
317,800 | 7,102,830 | 21,839,479 | ||||||||||
27,902,504 | Industrial Components - 4.3% | |||||||||||
American Technical Ceramics a | 83,500 | 1,993,145 | ||||||||||
Insurance - 1.1% | Barnes Group | 627,000 | 19,863,360 | |||||||||
American Equity Investment Life | CTS Corporation | 631,000 | 7,988,460 | |||||||||
Holding Company | 564,060 | 6,813,845 | Crane Company | 422,700 | 19,211,715 | |||||||
Horace Mann Educators | 518,500 | 11,012,940 | Deswell Industries | 286,898 | 3,132,926 | |||||||
482,600 | 5,289,296 | 1,104,800 | 12,837,776 | |||||||||
RAM Holdings a | 410,400 | 6,463,800 | 870,960 | 14,666,966 | ||||||||
422,500 | 5,771,350 | |||||||||||
29,579,881 | 685,655 | 5,135,556 | ||||||||||
Timken Company (The) | 506,700 | 18,296,937 | ||||||||||
Securities Brokers - 0.3% | Zygo Corporation a | 763,603 | 10,911,887 | |||||||||
Evercore Partners Cl. A | 265,800 | 7,912,866 | ||||||||||
119,810,078 | ||||||||||||
Total (Cost $60,909,271) | 65,395,251 | |||||||||||
Machinery - 4.8% | ||||||||||||
Financial Services – 0.4% | 259,500 | 11,264,895 | ||||||||||
Other Financial Services - 0.4% | Astec Industries a | 201,475 | 8,506,274 | |||||||||
Advanta Corporation Cl. B | 317,742 | 9,894,486 | Baldwin Technology Cl. A a | 703,100 | 4,239,693 | |||||||
92,900 | 2,642,076 | |||||||||||
Total (Cost $3,409,715) | 9,894,486 | 327,300 | 14,005,167 | |||||||||
260,000 | 8,439,600 | |||||||||||
Health – 5.4% | Flow International a | 746,886 | 9,410,764 | |||||||||
Drugs and Biotech - 1.4% | 326,400 | 13,888,320 | ||||||||||
Cambrex Corporation | 676,100 | 8,971,847 | 208,591 | 6,332,823 | ||||||||
255,500 | 18,843,125 | 175,150 | 8,753,997 | |||||||||
460,100 | 12,988,623 | 251,000 | 6,352,810 | |||||||||
Keithley Instruments | 455,800 | 5,720,290 | ||||||||||
40,803,595 | 712,600 | 6,926,472 | ||||||||||
Mueller Water Products Cl. B | 341,675 | 5,125,125 | ||||||||||
Health Services - 2.5% | Robbins & Myers | 298,100 | 15,838,053 | |||||||||
AMICAS a | 792,236 | 2,804,515 | 421,500 | 7,081,200 | ||||||||
1,025,700 | 15,231,645 | |||||||||||
1,044,655 | 6,163,464 | 134,527,559 | ||||||||||
394,600 | 12,122,112 | |||||||||||
407,100 | 15,746,628 | Metal Fabrication and Distribution - 2.9% | ||||||||||
863,400 | 4,705,530 | Carpenter Technology | 130,400 | 16,992,424 | ||||||||
QuadraMed a | 478,000 | 1,457,900 | Chaparral Steel | 110,600 | 7,948,822 | |||||||
1,206,252 | 3,775,569 | 241,822 | 5,172,573 | |||||||||
464,525 | 6,614,836 | Commercial Metals | 170,200 | 5,747,654 | ||||||||
253,000 | 21,360,790 | |||||||||||
68,622,199 | Insteel Industries | 563,084 | 10,135,512 | |||||||||
Medical Products and Devices - 1.5% | ||||||||||||
Del Global Technologies a | 578,648 | 1,475,552 | ||||||||||
1,025,122 | 4,285,010 |
70 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
SHARES | VALUE | SHARES | VALUE | |||||||||
Industrial Products (continued) | Engineering and Construction - 1.3% | |||||||||||
Metal Fabrication and Distribution (continued) | 613,300 | $ | 6,028,739 | |||||||||
NN | 483,608 | $ | 5,706,574 | 584,311 | 1,606,855 | |||||||
Northwest Pipe a | 218,255 | 7,763,330 | 1,101,900 | 9,972,195 | ||||||||
M.D.C. Holdings | 176,100 | 8,516,196 | ||||||||||
80,827,679 | Matrix Service a | 425,600 | 10,576,160 | |||||||||
Paper and Packaging - 0.4% | 36,700,145 | |||||||||||
Chesapeake Corporation c | 375,900 | 4,725,063 | ||||||||||
1,515,900 | 7,336,956 | Food and Tobacco Processors - 0.9% | ||||||||||
†Andersons (The) | 310,854 | 14,091,012 | ||||||||||
12,062,019 | 999,900 | 539,946 | ||||||||||
962,250 | 10,729,088 | |||||||||||
Pumps, Valves and Bearings - 0.6% | ||||||||||||
CIRCOR International | 444,300 | 17,963,049 | 25,360,046 | |||||||||
Specialty Chemicals and Materials - 4.5% | Printing - 0.4% | |||||||||||
Aceto Corporation | 1,215,952 | 11,271,875 | Bowne & Co. | 545,400 | 10,640,754 | |||||||
993,900 | 11,529,240 | |||||||||||
Chemtura Corporation | 681,700 | 7,573,687 | Transportation and Logistics - 2.9% | |||||||||
Cytec Industries | 244,900 | 15,617,273 | 1,231,400 | 9,925,084 | ||||||||
Lydall a | 531,500 | 7,765,215 | 847,200 | 9,251,424 | ||||||||
Material Sciences a | 608,900 | 7,178,931 | 82,480 | 4,861,371 | ||||||||
Park Electrochemical | 493,600 | 13,909,648 | DryShips | 484,073 | 20,999,087 | |||||||
Penford Corporation | 348,700 | 9,516,023 | 1,015,300 | 5,685,680 | ||||||||
1,307,450 | 9,400,566 | 858,273 | 5,673,185 | |||||||||
Quaker Chemical | 343,500 | 8,106,600 | 405,005 | 7,816,596 | ||||||||
SGL Carbon ADR a | 516,400 | 7,023,040 | Overseas Shipholding Group | 55,300 | 4,501,420 | |||||||
Spartech Corporation | 465,200 | 12,351,060 | 597,900 | 514,194 | ||||||||
Terra Industries a | 137,700 | 3,500,334 | 327,227 | 12,041,954 | ||||||||
124,743,492 | 81,269,995 | |||||||||||
Textiles - 1.0% | Total (Cost $197,298,850) | 236,403,311 | ||||||||||
Albany International Cl. A | 380,900 | 15,403,596 | ||||||||||
Dixie Group a | 455,266 | 5,690,825 | Natural Resources – 3.6% | |||||||||
1,111,400 | 2,911,868 | Energy Services - 1.6% | ||||||||||
Wellman | 1,205,256 | 3,663,978 | 558,601 | 14,981,679 | ||||||||
192,500 | 6,233,150 | |||||||||||
27,670,267 | 587,840 | 11,286,528 | ||||||||||
1,694,800 | 13,134,700 | |||||||||||
Other Industrial Products - 2.5% | ||||||||||||
314,716 | 1,554,697 | 45,636,057 | ||||||||||
Ferro Corporation | 767,100 | 19,123,803 | ||||||||||
Interface Cl. A a | 476,700 | 8,990,562 | Oil and Gas - 1.5% | |||||||||
Koppers Holdings | 107,200 | 3,610,496 | Bronco Drilling a | 375,412 | 6,160,511 | |||||||
624,700 | 8,883,234 | Pengrowth Energy Trust | 692,500 | 13,219,825 | ||||||||
Trinity Industries | 192,150 | 8,366,211 | 693,100 | 10,334,121 | ||||||||
Walter Industries | 605,679 | 17,540,464 | 360,400 | 12,347,304 | ||||||||
68,069,467 | 42,061,761 | |||||||||||
Total (Cost $406,613,468) | 626,170,377 | Precious Metals and Mining - 0.5% | ||||||||||
242,306 | 13,237,177 | |||||||||||
Industrial Services – 8.5% | ||||||||||||
Advertising and Publishing - 0.9% | Total (Cost $77,486,226) | 100,934,995 | ||||||||||
1,074,600 | 5,749,110 | |||||||||||
Journal Register | 1,527,000 | 6,840,960 | Technology – 33.6% | |||||||||
MDC Partners Cl. A a | 646,000 | 5,652,500 | Aerospace and Defense - 5.4% | |||||||||
177,976 | 5,243,173 | Applied Signal Technology | 543,760 | 8,488,094 | ||||||||
435,100 | 17,969,630 | |||||||||||
23,485,743 | 305,100 | 2,532,330 | ||||||||||
Ducommun a | 454,400 | 11,691,712 | ||||||||||
Commercial Services - 2.1% | EDO Corporation | 511,800 | 16,822,866 | |||||||||
401,900 | 3,251,371 | 352,600 | 17,034,106 | |||||||||
Anacomp Cl. A a | 105,000 | 771,750 | GenCorp a | 1,126,400 | 14,722,048 | |||||||
Furmanite Corporation a | 1,697,700 | 13,140,198 | 391,298 | 6,405,548 | ||||||||
Gevity HR | 652,200 | 12,607,026 | 868,600 | 18,301,402 | ||||||||
Rentrak Corporation a | 318,300 | 4,714,023 | Kaman Corporation | 644,352 | 20,097,339 | |||||||
1,108,000 | 16,431,640 | 320,000 | 14,704,000 | |||||||||
435,500 | 8,030,620 | |||||||||||
148,769,075 | ||||||||||||
58,946,628 | ||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 71 |
Schedules of Investments
Royce Opportunity Fund (continued) |
SHARES | VALUE | ||||
Technology (continued) | |||||
Components and Systems - 5.0% | |||||
Analogic Corporation | 199,300 | $ | 14,650,543 | ||
1,501,073 | 2,686,921 | ||||
1,214,135 | 9,263,850 | ||||
1,484,170 | 5,343,012 | ||||
1,384,850 | 8,184,463 | ||||
InFocus Corporation a | 345,282 | 769,979 | |||
787,275 | 1,180,912 | ||||
392,400 | 4,402,728 | ||||
Iomega Corporation a | 1,299,400 | 6,042,210 | |||
1,017,800 | 7,175,490 | ||||
Lantronix a | 505,101 | 707,141 | |||
780,711 | 9,524,674 | ||||
1,074,300 | 8,476,227 | ||||
528,100 | 8,174,988 | ||||
530,895 | 14,519,978 | ||||
Printronixb | 359,481 | 4,673,253 | |||
894,420 | 2,683,260 | ||||
284,900 | 2,675,211 | ||||
Sparton Corporation a | 375,997 | 2,707,178 | |||
Spectrum Control a | 479,000 | 8,085,520 | |||
616,400 | 8,013,200 | ||||
620,700 | 9,819,474 | ||||
139,760,212 | |||||
Distribution - 0.8% | |||||
468,100 | 1,708,565 | ||||
787,468 | 5,134,291 | ||||
653,650 | 14,785,563 | ||||
Data I/O Corporation a | 372,700 | 1,241,091 | |||
22,869,510 | |||||
Internet Software and Services - 3.5% | |||||
1,228,200 | 9,174,654 | ||||
InfoSpace | 580,400 | 13,471,084 | |||
833,140 | 11,697,286 | ||||
565,100 | 4,113,928 | ||||
1,347,010 | 7,933,889 | ||||
1,025,980 | 4,001,322 | ||||
1,510,124 | 9,815,806 | ||||
1,173,900 | 11,069,877 | ||||
1,131,815 | 9,246,929 | ||||
537,213 | 4,292,332 | ||||
SupportSoft a | 1,504,700 | 8,215,662 | |||
Tumbleweed Communications a | 768,700 | 1,960,185 | |||
129,074 | 2,473,058 | ||||
97,466,012 | |||||
IT Services - 0.5% | |||||
1,233,923 | 10,093,490 | ||||
1,099,500 | 4,914,765 | ||||
15,008,255 | |||||
Semiconductors and Equipment - 7.3% | |||||
548,742 | 2,376,053 | ||||
584,397 | 8,128,962 | ||||
394,900 | 8,948,434 | ||||
294,300 | 2,575,125 | ||||
1,165,100 | 16,066,729 | ||||
214,200 | 2,953,818 | ||||
654,100 | 11,871,915 | ||||
1,307,600 | 5,295,780 |
SHARES | VALUE | ||||
Cascade Microtech a | 212,563 | $ | 2,548,630 | ||
Cohu | 364,600 | 8,112,350 | |||
621,400 | 14,472,406 | ||||
1,330,827 | 2,861,278 | ||||
568,300 | 10,979,556 | ||||
GSI Group a | 1,309,000 | 12,815,110 | |||
560,521 | 4,265,565 | ||||
Kulicke & Soffa Industries a | 930,700 | 9,744,429 | |||
1,130,500 | 7,755,230 | ||||
494,687 | 5,520,707 | ||||
695,200 | 7,758,432 | ||||
1,548,600 | 4,847,118 | ||||
484,025 | 1,805,413 | ||||
1,456,800 | 7,371,408 | ||||
229,795 | 12,599,660 | ||||
Varian Semiconductor Equipment | |||||
245,304 | 9,826,878 | ||||
621,800 | 12,896,132 | ||||
1,319,790 | 7,654,782 | ||||
202,051,900 | |||||
Software - 4.9% | |||||
878,500 | 12,299,000 | ||||
398,462 | 14,085,632 | ||||
1,771,350 | 10,521,819 | ||||
1,376,479 | 16,999,516 | ||||
952,106 | 14,157,816 | ||||
652,825 | 1,481,913 | ||||
717,303 | 14,080,658 | ||||
769,000 | 10,412,260 | ||||
1,508,786 | 2,263,179 | ||||
Moldflow Corporation a | 241,240 | 5,302,455 | |||
707,966 | 15,299,145 | ||||
QAD | 1,093,100 | 9,072,730 | |||
783,269 | 6,148,662 | ||||
Versant Corporation a | 102,250 | 2,466,270 | |||
134,591,055 | |||||
Telecommunications - 6.2% | |||||
718,700 | 13,173,771 | ||||
C-COR.net a | 27,744 | 390,081 | |||
1,365,955 | 6,406,329 | ||||
Centillium Communications a | 1,317,923 | 2,754,459 | |||
710,344 | 3,338,617 | ||||
675,829 | 14,908,788 | ||||
427,945 | 5,481,975 | ||||
456,400 | 6,672,568 | ||||
950,300 | 8,429,161 | ||||
538,068 | 9,674,463 | ||||
775,200 | 12,263,664 | ||||
1,723,400 | 16,441,236 | ||||
618,201 | 9,273,015 | ||||
Optical Cable a | 268,065 | 1,377,854 | |||
1,441,200 | 9,656,040 | ||||
Radyne a | 893,200 | 9,530,444 | |||
982,700 | 8,254,680 | ||||
993,900 | 14,332,038 | ||||
689,834 | 7,277,749 | ||||
1,100,700 | 6,174,927 | ||||
993,600 | 1,738,800 |
72 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
Royce Special Equity Fund | ||
SHARES | VALUE | |||||
Technology (continued) | ||||||
Telecommunications (continued) | ||||||
Westell Technologies Cl. A a | 1,541,500 | $ | 4,023,315 | |||
171,573,974 | ||||||
Total (Cost $752,538,748) | 932,089,993 | |||||
Miscellaneous e– 3.7% | ||||||
Total (Cost $104,894,401) | 102,084,586 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $2,085,124,752) | 2,596,056,134 | |||||
REPURCHASE AGREEMENTS – 5.7% | ||||||
State Street Bank & Trust Company, | ||||||
5.10% dated 6/29/07, due 7/2/07, | ||||||
maturity value $53,910,902 (collateralized | ||||||
by obligations of various U.S. Government | ||||||
Agencies, valued at $55,238,525) | ||||||
(Cost $53,888,000) | 53,888,000 | |||||
Lehman Brothers (Tri-Party), | ||||||
5.05% dated 6/29/07, due 7/2/07, | ||||||
maturity value $105,044,188 (collateralized | ||||||
by obligations of various U.S. Government | ||||||
Agencies, valued at $107,147,274) | ||||||
(Cost $105,000,000) | 105,000,000 | |||||
TOTAL REPURCHASE AGREEMENTS | ||||||
(Cost $158,888,000) | 158,888,000 | |||||
PRINCIPAL | ||||||
AMOUNT | ||||||
COLLATERAL RECEIVED FOR SECURITIES | ||||||
LOANED – 12.7% | ||||||
U.S. Treasury Bonds 3.625%-3.875% | ||||||
due 4/15/28-4/15/29 | $10,477 | 10,530 | ||||
U.S. Treasury Notes 0.875%-2.375% | ||||||
due 4/15/10-1/15/16 | 13,674 | 13,701 | ||||
Money Market Funds | ||||||
State Street Navigator Securities Lending | ||||||
Prime Portfolio (7 day yield-5.27%) | 353,389,087 | |||||
TOTAL COLLATERAL RECEIVED FOR | ||||||
SECURITIES LOANED | ||||||
(Cost $353,413,318) | 353,413,318 | |||||
TOTAL INVESTMENTS – 111.9% | ||||||
(Cost $2,597,426,070) | 3,108,357,452 | |||||
LIABILITIES LESS CASH | ||||||
AND OTHER ASSETS – (11.9)% | (331,505,990 | ) | ||||
NET ASSETS – 100.0% | $ | 2,776,851,462 | ||||
SHARES | VALUE | ||||
COMMON STOCKS – 94.1% | |||||
Consumer Products – 15.0% | |||||
Apparel and Shoes - 3.2% | |||||
†Brown Shoe Company | 228,402 | $ | 5,554,737 | ||
199,200 | 5,167,248 | ||||
K-Swiss Cl. A | 352,500 | 9,986,325 | |||
20,708,310 | |||||
Food/Beverage/Tobacco - 2.9% | |||||
Lancaster Colony | 450,000 | 18,850,500 | |||
Home Furnishing and Appliances - 7.7% | |||||
Ethan Allen Interiors | 265,000 | 9,076,250 | |||
Graham Corporation b | 254,300 | 7,150,916 | |||
201,500 | 4,324,190 | ||||
National Presto Industries b | 483,100 | 30,116,454 | |||
50,667,810 | |||||
Sports and Recreation - 0.7% | |||||
Escalade | 486,500 | 4,543,910 | |||
Other Consumer Products - 0.5% | |||||
Koss Corporation b | 188,911 | 3,547,748 | |||
Total (Cost $74,648,413) | 98,318,278 | ||||
Consumer Services – 10.7% | |||||
Leisure and Entertainment - 0.5% | |||||
Bowl America Cl. A | 204,100 | 3,479,905 | |||
Restaurants and Lodgings - 3.4% | |||||
CEC Entertainment a | 229,000 | 8,060,800 | |||
Frisch’s Restaurants b | 277,000 | 8,459,580 | |||
Jack in the Box a | 79,600 | 5,646,824 | |||
22,167,204 | |||||
Retail Stores - 6.8% | |||||
AnnTaylor Stores a | 287,500 | 10,183,250 | |||
Arden Group Cl. A | 115,500 | 15,754,200 | |||
BJ’s Wholesale Club a | 142,400 | 5,130,672 | |||
Deb Shops | 477,500 | 13,202,875 | |||
44,270,997 | |||||
Total (Cost $44,961,744) | 69,918,106 | ||||
Financial Services – 2.9% | |||||
Insurance Brokers - 2.9% | |||||
Hilb Rogal & Hobbs | 447,500 | 19,179,850 | |||
Total (Cost $14,102,373) | 19,179,850 | ||||
Health – 6.1% | |||||
Medical Products and Devices - 5.5% | |||||
Atrion Corporation | 74,600 | 7,310,800 | |||
Bio-Rad Laboratories Cl. A a | 330,000 | 24,938,100 | |||
STERIS Corporation | 129,100 | 3,950,460 | |||
36,199,360 | |||||
Personal Care - 0.6% | |||||
Regis Corporation | 96,000 | 3,672,000 | |||
Total (Cost $27,802,675) | 39,871,360 | ||||
Industrial Products – 40.7% | |||||
Automotive - 1.6% | |||||
Dorman Products a | 750,000 | 10,365,000 | |||
Construction Materials - 2.6% | |||||
Carlisle Companies | 275,000 | 12,790,250 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 73 |
Schedules of Investments
Royce Special Equity Fund (continued) |
SHARES | VALUE | ||||
Industrial Products (continued) | |||||
Construction Materials (continued) | |||||
83,100 | $ | 4,099,323 | |||
16,889,573 | |||||
Industrial Components - 4.7% | |||||
Genlyte Group (The) a | 147,800 | 11,608,212 | |||
Hubbell Cl. B | 130,400 | 7,070,288 | |||
Standex International | 426,500 | 12,129,660 | |||
30,808,160 | |||||
Machinery - 17.4% | |||||
Ampco-Pittsburgh | 204,000 | 8,178,360 | |||
Applied Industrial Technologies | 215,400 | 6,354,300 | |||
Cascade Corporation | 232,700 | 18,252,988 | |||
Hurco Companies a | 142,500 | 7,122,150 | |||
K-Tron International a | 84,000 | 8,515,080 | |||
Kennametal | 118,800 | 9,745,164 | |||
Nordson Corporation | 133,000 | 6,671,280 | |||
Regal-Beloit | 215,400 | 10,024,716 | |||
Rofin-Sinar Technologies a | 360,000 | 24,840,000 | |||
Sun Hydraulics | 187,100 | 9,214,675 | |||
Wabtec Corporation | 140,200 | 5,121,506 | |||
114,040,219 | |||||
Metal Fabrication and Distribution - 7.0% | |||||
Carpenter Technology | 171,000 | 22,283,010 | |||
Insteel Industries | 755,000 | 13,590,000 | |||
Quanex Corporation | 202,500 | 9,861,750 | |||
45,734,760 | |||||
Paper and Packaging - 0.1% | |||||
Greif Cl. A | 14,600 | 870,306 | |||
Specialty Chemicals and Materials - 5.9% | |||||
Hawkins b | 547,500 | 8,458,875 | |||
Lubrizol Corporation | 184,000 | 11,877,200 | |||
Park Electrochemical | 402,500 | 11,342,450 | |||
Schulman (A.) | 290,000 | 7,055,700 | |||
38,734,225 | |||||
Other Industrial Products - 1.4% | |||||
Met-Pro Corporation b | 578,001 | 9,080,396 | |||
Total (Cost $162,157,195) | 266,522,639 | ||||
Industrial Services – 10.1% | |||||
Commercial Services - 2.0% | |||||
255,900 | 4,749,504 | ||||
Watson Wyatt Worldwide Cl. A | 162,000 | 8,177,760 | |||
12,927,264 | |||||
Industrial Distribution - 3.7% | |||||
Lawson Products b | 450,000 | 17,415,000 | |||
Watsco | 127,200 | 6,919,680 | |||
24,334,680 | |||||
Printing - 3.0% | |||||
CSS Industries | 489,000 | 19,369,290 | |||
Transportation and Logistics - 1.4% | |||||
Arkansas Best | 234,200 | 9,126,774 | |||
Total (Cost $46,459,785) | 65,758,008 | ||||
Natural Resources – 1.4% | |||||
Energy Services - 1.4% | |||||
215,500 | 8,809,640 | ||||
Total (Cost $9,016,197) | 8,809,640 | ||||
SHARES | VALUE | |||||
Technology – 5.0% | ||||||
Components and Systems - 3.5% | ||||||
†Imation Corporation | 149,300 | $ | 5,503,198 | |||
Rimage Corporation a | 170,100 | 5,373,459 | ||||
Thomas & Betts a | 206,800 | 11,994,400 | ||||
22,871,057 | ||||||
Semiconductors and Equipment - 1.5% | ||||||
CyberOptics Corporation a | 188,100 | 2,531,826 | ||||
261,300 | 7,238,010 | |||||
9,769,836 | ||||||
Total (Cost $27,440,671) | 32,640,893 | |||||
Miscellaneous e – 2.2% | ||||||
Total (Cost $13,385,142) | 14,329,597 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $419,974,195) | 615,348,371 | |||||
REPURCHASE AGREEMENTS – 6.3% | ||||||
State Street Bank & Trust Company, | ||||||
5.10% dated 6/29/07, due 7/2/07, | ||||||
maturity value $16,431,981 (collateralized | ||||||
by obligations of various U.S. Government | ||||||
Agencies, valued at $16,835,625) | ||||||
(Cost $16,425,000) | 16,425,000 | |||||
Lehman Brothers (Tri-Party), | ||||||
5.05% dated 6/29/07, due 7/2/07, | ||||||
maturity value $25,010,521 (collateralized | ||||||
by obligations of various U.S. Government | ||||||
Agencies, valued at $25,514,970) | ||||||
(Cost $25,000,000) | 25,000,000 | |||||
TOTAL REPURCHASE AGREEMENTS | ||||||
(Cost $41,425,000) | 41,425,000 | |||||
COLLATERAL RECEIVED FOR | ||||||
SECURITIES LOANED – 0.3% | ||||||
Money Market Funds | ||||||
AIM Liquid Assets Institutional Fund | ||||||
(7 day yield-5.19%) | ||||||
(Cost $2,085,900) | 2,085,900 | |||||
TOTAL INVESTMENTS – 100.7% | ||||||
(Cost $463,485,095) | 658,859,271 | |||||
LIABILITIES LESS CASH | ||||||
AND OTHER ASSETS – (0.7)% | (4,325,889 | ) | ||||
NET ASSETS – 100.0% | $ | 654,533,382 | ||||
74 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
Royce Value Fund |
SHARES | VALUE | ||||
COMMON STOCKS – 90.7% | |||||
Consumer Products – 8.9% | |||||
Apparel and Shoes - 2.5% | |||||
233,200 | $ | 5,874,308 | |||
375,300 | 16,738,380 | ||||
22,612,688 | |||||
Home Furnishing and Appliances - 0.9% | |||||
Ethan Allen Interiors c | 170,000 | 5,822,500 | |||
150,000 | 2,433,000 | ||||
8,255,500 | |||||
Sports and Recreation - 3.0% | |||||
Thor Industries c | 464,300 | 20,958,502 | |||
Winnebago Industries c | 191,600 | 5,656,032 | |||
26,614,534 | |||||
Other Consumer Products - 2.5% | |||||
117,400 | 3,462,126 | ||||
457,953 | 18,322,700 | ||||
21,784,826 | |||||
Total (Cost $74,887,700) | 79,267,548 | ||||
Consumer Services – 6.3% | |||||
Direct Marketing - 0.9% | |||||
Nu Skin Enterprises Cl. A c | 489,600 | 8,078,400 | |||
Leisure and Entertainment - 0.9% | |||||
International Speedway Cl. A c | 157,200 | 8,286,012 | |||
Restaurants and Lodgings - 1.3% | |||||
316,800 | 11,151,360 | ||||
Retail Stores- 3.0% | |||||
Buckle (The) c | 350,400 | 13,805,760 | |||
450,600 | 9,246,312 | ||||
Finish Line (The) Cl. A c | 404,100 | 3,681,351 | |||
26,733,423 | |||||
Other Consumer Services - 0.2% | |||||
127,500 | 2,076,975 | ||||
Total (Cost $55,717,929) | 56,326,170 | ||||
Financial Intermediaries – 4.1% | |||||
Insurance - 1.6% | |||||
Assured Guaranty c | 226,100 | 6,683,516 | |||
281,197 | 7,957,875 | ||||
14,641,391 | |||||
Securities Brokers - 2.5% | |||||
1,359,000 | 22,559,400 | ||||
Total (Cost $36,844,027) | 37,200,791 | ||||
Financial Services – 1.6% | |||||
Information and Processing - 0.6% | |||||
147,800 | 5,215,862 | ||||
Investment Management - 1.0% | |||||
Federated Investors Cl. B c | 232,900 | 8,927,057 | |||
Total (Cost $11,465,951) | 14,142,919 | ||||
Health – 3.6% | |||||
Drugs and Biotech - 3.0% | |||||
215,900 | 5,615,559 | ||||
306,400 | 10,488,072 | ||||
534,000 | 10,925,640 | ||||
27,029,271 | |||||
SHARES | VALUE | ||||
Medical Products and Devices - 0.6% | |||||
Vital Signs c | 88,045 | $ | 4,890,900 | ||
Total (Cost $28,157,456) | 31,920,171 | ||||
Industrial Products – 23.0% | |||||
Building Systems and Components - 1.6% | |||||
130,800 | 4,334,712 | ||||
Simpson Manufacturing c | 310,700 | 10,483,018 | |||
14,817,730 | |||||
Construction Materials - 1.1% | |||||
199,900 | 9,805,095 | ||||
Machinery - 6.2% | |||||
203,500 | 6,003,250 | ||||
Graco c | 219,100 | 8,825,348 | |||
†Kennametal | 92,400 | 7,579,572 | |||
Lincoln Electric Holdings c | 183,000 | 13,585,920 | |||
133,472 | 9,209,568 | ||||
Woodward Governor c | 186,700 | 10,020,189 | |||
55,223,847 | |||||
Metal Fabrication and Distribution - 12.3% | |||||
Chaparral Steel | 256,700 | 18,449,029 | |||
IPSCO | 75,200 | 11,947,776 | |||
Metal Management c | 296,931 | 13,085,749 | |||
198,800 | 9,681,560 | ||||
Reliance Steel & Aluminum c | 353,400 | 19,882,284 | |||
Schnitzer Steel Industries Cl. A c | 360,200 | 17,267,988 | |||
Steel Dynamics c | 472,200 | 19,789,902 | |||
110,104,288 | |||||
Specialty Chemicals and Materials - 1.8% | |||||
Westlake Chemical c | 567,700 | 15,963,724 | |||
Total (Cost $163,036,270) | 205,914,684 | ||||
Industrial Services – 9.6% | |||||
Commercial Services - 6.1% | |||||
100,000 | 3,059,000 | ||||
278,300 | 14,260,092 | ||||
536,300 | 8,570,074 | ||||
616,800 | 16,197,168 | ||||
417,600 | 9,650,736 | ||||
149,900 | 2,782,144 | ||||
54,519,214 | |||||
Food and Tobacco Processors - 0.1% | |||||
27,550 | 1,240,301 | ||||
Transportation and Logistics - 3.4% | |||||
Arkansas Best c | 313,000 | 12,197,610 | |||
556,800 | 9,075,840 | ||||
373,900 | 8,794,128 | ||||
30,067,578 | |||||
Total (Cost $78,032,307) | 85,827,093 | ||||
Natural Resources – 27.8% | |||||
Energy Services - 8.3% | |||||
Ensign Energy Services | 929,800 | 16,584,088 | |||
467,900 | 19,342,986 | ||||
Patterson-UTI Energy c | 518,500 | 13,589,885 | |||
RPC c | 538,700 | 9,179,448 | |||
Trican Well Service | 755,900 | 15,391,196 | |||
74,087,603 | |||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 75 |
Schedules of Investments
Royce Value Fund (continued) |
SHARES | VALUE | ||||
Natural Resources (continued) | |||||
Oil and Gas - 9.9% | |||||
Cimarex Energy c | 445,800 | $ | 17,568,978 | ||
284,100 | 12,435,057 | ||||
523,100 | 4,310,344 | ||||
St. Mary Land & Exploration c | 378,300 | 13,853,346 | |||
574,200 | 14,590,422 | ||||
Unit Corporation a | 404,175 | 25,426,649 | |||
88,184,796 | |||||
Precious Metals and Mining - 8.6% | |||||
Agnico-Eagle Mines | 361,200 | 13,183,800 | |||
711,200 | 8,975,344 | ||||
1,637,500 | 23,318,000 | ||||
322,800 | 8,902,824 | ||||
367,700 | 9,681,541 | ||||
381,800 | 13,122,466 | ||||
77,183,975 | |||||
Real Estate - 1.0% | |||||
190,800 | 8,841,672 | ||||
Total (Cost $211,052,438) | 248,298,046 | ||||
Technology – 5.6% | |||||
Distribution - 2.1% | |||||
CDW Corporation | 138,300 | 11,751,351 | |||
303,000 | 6,838,710 | ||||
18,590,061 | |||||
IT Services - 0.8% | |||||
441,500 | 7,523,160 | ||||
Semiconductors and Equipment - 1.5% | |||||
227,300 | 4,391,436 | ||||
331,800 | 9,190,860 | ||||
13,582,296 | |||||
Software - 1.0% | |||||
282,000 | 8,694,060 | ||||
Telecommunications - 0.2% | |||||
ADTRAN c | 75,000 | 1,947,750 | |||
Total (Cost $43,892,726) | 50,337,327 | ||||
Miscellaneous e– 0.2% | |||||
Total (Cost $1,635,824) | 1,644,750 | ||||
TOTAL COMMON STOCKS | |||||
(Cost $704,722,628) | 810,879,499 | ||||
REPURCHASE AGREEMENTS – 9.1% | |||||
State Street Bank & Trust Company, | |||||
5.10% dated 6/29/07, due 7/2/07, | |||||
maturity value $26,171,118 (collateralized | |||||
by obligations of various U.S. Government | |||||
Agencies, valued at $26,815,730) | |||||
(Cost $26,160,000) | 26,160,000 | ||||
Lehman Brothers (Tri-Party), | |||||
5.05% dated 6/29/07, due 7/2/07, | |||||
maturity value $55,023,146 (collateralized | |||||
by obligations of various U.S. Government | |||||
Agencies, valued at $56,128,225) | |||||
(Cost $55,000,000) | 55,000,000 | ||||
VALUE | ||||
TOTAL REPURCHASE AGREEMENTS | ||||
(Cost $81,160,000) | $ | 81,160,000 | ||
COLLATERAL RECEIVED FOR | ||||
SECURITIES LOANED – 13.2% | ||||
Money Market Funds | ||||
State Street Navigator Securities Lending | ||||
Prime Portfolio (7 day yield-5.27%) | ||||
(Cost $118,053,793) | 118,053,793 | |||
TOTAL INVESTMENTS – 113.0% | ||||
(Cost $903,936,421) | 1,010,093,292 | |||
LIABILITIES LESS CASH | ||||
AND OTHER ASSETS – (13.0)% | (116,013,881 | ) | ||
NET ASSETS – 100.0% | $ | 894,079,411 | ||
76 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
Royce Value Plus Fund |
SHARES | VALUE | ||||
COMMON STOCKS – 89.2% | |||||
Consumer Products – 2.8% | |||||
Apparel and Shoes - 0.9% | |||||
706,400 | $ | 24,222,456 | |||
Home Furnishing and Appliances - 0.6% | |||||
1,079,300 | 17,506,246 | ||||
Sports and Recreation - 0.8% | |||||
Thor Industries c | 480,800 | 21,703,312 | |||
Other Consumer Products - 0.5% | |||||
216,000 | 6,369,840 | ||||
551,500 | 6,954,415 | ||||
13,324,255 | |||||
Total (Cost $68,196,460) | 76,756,269 | ||||
Consumer Services – 7.6% | |||||
Direct Marketing - 0.2% | |||||
Nu Skin Enterprises Cl. A c | 283,300 | 4,674,450 | |||
Leisure and Entertainment - 1.2% | |||||
857,200 | 24,721,648 | ||||
International Speedway Cl. A | 184,300 | 9,714,453 | |||
34,436,101 | |||||
Restaurants and Lodgings - 0.6% | |||||
3,697,600 | 16,861,056 | ||||
Retail Stores - 4.1% | |||||
995,600 | 19,523,716 | ||||
2,271,300 | 22,940,130 | ||||
1,850,300 | 31,732,645 | ||||
The Men’s Wearhouse | 462,100 | 23,599,447 | |||
Pacific Sunwear of California a | 660,100 | 14,522,200 | |||
112,318,138 | |||||
Other Consumer Services - 1.5% | |||||
297,300 | 20,763,432 | ||||
803,400 | 20,398,326 | ||||
41,161,758 | |||||
Total (Cost $198,777,212) | 209,451,503 | ||||
Financial Intermediaries – 5.1% | |||||
Banking - 1.1% | |||||
696,300 | 15,569,268 | ||||
Enterprise Financial Services c | 624,800 | 15,532,528 | |||
31,101,796 | |||||
Insurance - 0.3% | |||||
Assured Guaranty | 271,400 | 8,022,584 | |||
�� | |||||
Securities Brokers - 2.2% | |||||
2,628,900 | 43,639,740 | ||||
1,572,700 | 18,321,955 | ||||
61,961,695 | |||||
Other Financial Intermediaries - 1.5% | |||||
805,000 | 14,481,950 | ||||
TSX Group | 663,300 | 25,965,370 | |||
40,447,320 | |||||
Total (Cost $136,490,662) | 141,533,395 | ||||
Financial Services – 0.8% | |||||
Insurance Brokers - 0.5% | |||||
525,100 | 13,201,014 | ||||
SHARES | VALUE | ||||
Investment Management - 0.3% | |||||
Nuveen Investments Cl. A c | 132,000 | $ | 8,203,800 | ||
Total (Cost $18,830,749) | 21,404,814 | ||||
Health – 9.8% | |||||
Drugs and Biotech - 6.1% | |||||
894,100 | 23,255,541 | ||||
1,387,000 | 15,243,130 | ||||
2,061,000 | 13,932,360 | ||||
Draxis Health a | 575,000 | 3,404,000 | |||
3,041,060 | 12,742,041 | ||||
607,700 | 13,326,861 | ||||
Endo Pharmaceuticals Holdings a | 650,000 | 22,249,500 | |||
766,000 | 1,631,580 | ||||
Perrigo Company c | 797,100 | 15,607,218 | |||
Pharmanet Development Group a | 766,300 | 24,429,644 | |||
Theratechnologies a | 1,914,000 | 21,058,043 | |||
178,300 | 2,460,540 | ||||
169,340,458 | |||||
Health Services - 1.4% | |||||
2,048,800 | 27,167,088 | ||||
414,000 | 10,846,800 | ||||
38,013,888 | |||||
Medical Products and Devices - 1.6% | |||||
990,395 | 15,044,100 | ||||
1,766,700 | 8,285,823 | ||||
2,208,000 | 9,604,800 | ||||
366,584 | 3,988,434 | ||||
567,879 | 1,067,612 | ||||
Shamir Optical Industry a | 637,000 | 6,268,080 | |||
44,258,849 | |||||
Personal Care - 0.7% | |||||
Inter Parfums c | 701,000 | 18,660,620 | |||
Total (Cost $235,659,451) | 270,273,815 | ||||
Industrial Products – 12.7% | |||||
Automotive - 0.8% | |||||
507,800 | 21,007,686 | ||||
Building Systems and Components - 0.5% | |||||
461,000 | 15,277,540 | ||||
Industrial Components - 0.5% | |||||
342,100 | 12,804,803 | ||||
Machinery - 4.7% | |||||
718,800 | 12,420,864 | ||||
†Kennametal | 416,100 | 34,132,683 | |||
Lincoln Electric Holdings | 133,900 | 9,940,736 | |||
656,500 | 21,382,205 | ||||
†Tennant Company c | 787,600 | 28,747,400 | |||
Woodward Governor | 432,800 | 23,228,376 | |||
129,852,264 | |||||
Metal Fabrication and Distribution - 3.8% | |||||
808,000 | 22,955,280 | ||||
IPSCO | 35,100 | 5,576,688 | |||
Metal Management c | 368,400 | 16,235,388 | |||
Reliance Steel & Aluminum c | 724,700 | 40,771,622 | |||
Schnitzer Steel Industries Cl. A c | 404,130 | 19,373,992 | |||
104,912,970 | |||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report To Shareholders | 77 |
Schedules of Investments
Royce Value Plus Fund (continued) |
SHARES | VALUE | ||||
Industrial Products (continued) | |||||
Specialty Chemicals and Materials - 0.5% | |||||
1,218,400 | $ | 14,023,784 | |||
Textiles - 0.6% | |||||
UniFirst Corporation c | 347,400 | 15,302,970 | |||
Other Industrial Products - 1.3% | |||||
Diebold c | 236,900 | 12,366,180 | |||
641,800 | 22,918,678 | ||||
35,284,858 | |||||
Total (Cost $276,048,447) | 348,466,875 | ||||
Industrial Services – 9.8% | |||||
Commercial Services - 3.4% | |||||
1,569,100 | 14,922,141 | ||||
Labor Ready a | 1,137,600 | 26,289,936 | |||
291,100 | 5,466,858 | ||||
542,400 | 7,251,888 | ||||
1,108,700 | 20,577,472 | ||||
1,801,800 | 20,450,430 | ||||
94,958,725 | |||||
Engineering and Construction - 0.2% | |||||
199,500 | 5,981,010 | ||||
Food and Tobacco Processors - 0.3% | |||||
165,000 | 7,428,300 | ||||
Industrial Distribution - 3.7% | |||||
†Grainger (W.W.) | 287,500 | 26,751,875 | |||
MSC Industrial Direct Cl. A c | 522,400 | 28,732,000 | |||
Ritchie Bros. Auctioneers | 383,000 | 23,983,460 | |||
429,000 | 23,337,600 | ||||
102,804,935 | |||||
Transportation and Logistics - 2.2% | |||||
1,686,200 | 26,810,580 | ||||
847,800 | 19,940,256 | ||||
674,600 | 13,404,302 | ||||
60,155,138 | |||||
Total (Cost $261,160,587) | 271,328,108 | ||||
Natural Resources – 18.1% | |||||
Energy Services - 4.8% | |||||
Calfrac Well Services | 770,800 | 15,166,363 | |||
Carbo Ceramics c | 375,800 | 16,463,798 | |||
Ensign Energy Services | 1,424,900 | 25,414,785 | |||
Pason Systems | 1,491,000 | 23,346,520 | |||
Tesco Corporation a | 717,700 | 22,643,435 | |||
Trican Well Service | 1,353,800 | 27,565,287 | |||
130,600,188 | |||||
Oil and Gas - 2.0% | |||||
477,500 | 17,586,325 | ||||
Unit Corporation a | 606,300 | 38,142,333 | |||
55,728,658 | |||||
Precious Metals and Mining - 10.3% | |||||
Agnico-Eagle Mines | 928,800 | 33,901,200 | |||
Alamos Gold a | 1,703,700 | 8,796,386 | |||
Equinox Minerals a | 2,720,500 | 8,759,742 | |||
1,590,100 | 18,922,190 | ||||
Gabriel Resources a | 2,929,600 | 13,118,228 | |||
2,217,900 | 27,989,898 | ||||
3,098,050 | 18,526,339 | ||||
3,147,900 | 44,826,096 |
SHARES | VALUE | ||||
1,034,500 | $ | 28,531,510 | |||
1,609,600 | 9,158,624 | ||||
1,402,700 | 21,082,581 | ||||
961,000 | 33,029,570 | ||||
Silvercorp Metals a | 987,600 | 16,734,269 | |||
158,100 | 1,254,114 | ||||
284,630,747 | |||||
Other Natural Resources - 1.0% | |||||
AMCOL International c | 995,400 | 27,184,374 | |||
Total (Cost $416,314,370) | 498,143,967 | ||||
Technology – 21.6% | |||||
Aerospace and Defense - 0.7% | |||||
442,600 | 20,470,250 | ||||
Components and Systems - 2.4% | |||||
1,087,700 | 16,032,698 | ||||
376,700 | 7,835,360 | ||||
1,627,800 | 19,859,160 | ||||
876,050 | 21,787,363 | ||||
65,514,581 | |||||
Distribution - 0.6% | |||||
CDW Corporation a | 183,600 | 15,600,492 | |||
Internet Software and Services - 1.5% | |||||
575,010 | 7,101,373 | ||||
300,000 | 2,265,000 | ||||
1,492,100 | 11,653,301 | ||||
2,411,000 | 19,697,870 | ||||
40,717,544 | |||||
IT Services - 2.1% | |||||
3,575,434 | 14,516,262 | ||||
Perot Systems Cl. A a | 1,370,600 | 23,355,024 | |||
RADVision a | 899,200 | 18,910,176 | |||
56,781,462 | |||||
Semiconductors and Equipment - 9.8% | |||||
3,097,600 | 20,103,424 | ||||
1,974,382 | 16,387,371 | ||||
456,700 | 10,280,317 | ||||
459,200 | 9,996,784 | ||||
Dolby Laboratories Cl. A a | 694,400 | 24,588,704 | |||
1,027,000 | 19,841,640 | ||||
GSI Group a | 1,496,000 | 14,645,840 | |||
807,899 | 16,117,585 | ||||
810,900 | 22,461,930 | ||||
620,700 | 22,531,410 | ||||
999,400 | 14,871,072 | ||||
1,377,200 | 16,361,136 | ||||
2,955,900 | 21,725,865 | ||||
906,900 | 28,422,246 | ||||
Verigy a | 469,400 | 13,429,534 | |||
271,764,858 | |||||
Software - 3.2% | |||||
Activision a | 399,300 | 7,454,931 | |||
748,000 | 11,220,000 | ||||
Epicor Software a | 1,107,200 | 16,464,064 | |||
707,500 | 22,540,950 | ||||
1,358,800 | 18,398,152 | ||||
Ulticom a | 1,446,300 | 12,582,810 | |||
88,660,907 | |||||
78 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited) |
SHARES | VALUE | ||||||
Technology (continued) | |||||||
Telecommunications - 1.3% | |||||||
ADTRAN | 647,300 | $ | 16,810,381 | ||||
Foundry Networks a | 936,400 | 15,600,424 | |||||
256,259 | 3,241,676 | ||||||
35,652,481 | |||||||
Total (Cost $531,842,601) | 595,162,575 | ||||||
Miscellaneous e – 0.9% | |||||||
Total (Cost $19,668,972) | 25,754,758 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $2,162,989,511) | 2,458,276,079 | ||||||
REPURCHASE AGREEMENTS – 10.6% | |||||||
State Street Bank & Trust Company, | |||||||
5.10% dated 6/29/07, due 7/2/07, | |||||||
maturity value $93,697,805 (collateralized | |||||||
by obligations of various U.S. Government | |||||||
Agencies, valued at $95,531,250) | |||||||
(Cost $93,658,000) | 93,658,000 | ||||||
Lehman Brothers (Tri-Party), | |||||||
5.05% dated 6/29/07, due 7/2/07, | |||||||
maturity value $200,084,167 (collateralized | |||||||
by obligations of various U.S. Government | |||||||
Agencies, valued at $204,088,082) | |||||||
(Cost $200,000,000) | 200,000,000 | ||||||
TOTAL REPURCHASE AGREEMENTS | |||||||
(Cost $293,658,000) | 293,658,000 | ||||||
PRINCIPAL | |||||||
AMOUNT | |||||||
COLLATERAL RECEIVED FOR | |||||||
SECURITIES LOANED – 13.3% | |||||||
U.S. Treasury Bonds 2.375%-8.875% | |||||||
due 5/15/17-8/15/29 | $ | 1,673,599 | 1,714,052 | ||||
U.S. Treasury Notes 1.875%-6.00% | |||||||
due 1/15/08-7/15/13 | 1,305,365 | 1,322,335 | |||||
U.S. Treasury Strip-Principal | |||||||
due 5/15/17-5/15/30 | 190,249 | 190,249 | |||||
U.S. Treasury Strip-Interest | |||||||
due 11/15/10-8/15/23 | 1,389 | 1,389 | |||||
Money Market Funds | |||||||
State Street Navigator Securities Lending | |||||||
Prime Portfolio (7 day yield-5.27%) | 364,037,003 | ||||||
TOTAL COLLATERAL RECEIVED FOR | |||||||
SECURITIES LOANED | |||||||
(Cost $367,265,028) | 367,265,028 | ||||||
TOTAL INVESTMENTS – 113.1% | |||||||
(Cost $2,823,912,539) | 3,119,199,107 | ||||||
LIABILITIES LESS CASH | |||||||
AND OTHER ASSETS – (13.1)% | (361,407,163 | ) | |||||
NET ASSETS – 100.0% | $ | 2,757,791,944 | |||||
Royce Technology Value Fund | |||||||
SHARES | VALUE | ||||||
COMMON STOCKS – 81.0% | |||||||
Advertising and Publishing - 1.5% | |||||||
Hollywood Media a | 70,000 | $ | 305,200 | ||||
Total (Cost $308,789) | 305,200 | ||||||
Automotive - 1.4% | |||||||
30,000 | 283,800 | ||||||
Total (Cost $241,277) | 283,800 | ||||||
Commercial Services - 2.0% | |||||||
Kenexa Corporation a | 5,000 | 188,550 | |||||
20,000 | 227,000 | ||||||
Total (Cost $403,365) | 415,550 | ||||||
Components and Systems - 4.9% | |||||||
Analogic Corporation | 2,500 | 183,775 | |||||
Digi International a | 5,000 | 73,700 | |||||
OSI Systems a | 15,000 | 410,250 | |||||
27,000 | 351,000 | ||||||
Total (Cost $763,146) | 1,018,725 | ||||||
Distribution - 1.0% | |||||||
15,000 | 206,850 | ||||||
Total (Cost $183,486) | 206,850 | ||||||
Health Services - 1.9% | |||||||
Eclipsys Corporation a | 20,000 | 396,000 | |||||
Total (Cost $418,063) | 396,000 | ||||||
Internet Software and Services - 16.6% | |||||||
350,000 | 0 | ||||||
Internap Network Services a | 10,000 | 144,200 | |||||
Jacada a | 50,200 | 173,692 | |||||
60,000 | 186,000 | ||||||
100,000 | 225,000 | ||||||
†Marchex Cl. B | 15,000 | 244,800 | |||||
Online Resources a | 20,000 | 219,600 | |||||
150,000 | 178,831 | ||||||
RealNetworks a | 30,000 | 245,100 | |||||
Saba Software a | 30,000 | 153,900 | |||||
Secure Computing a | 50,000 | 379,500 | |||||
Stamps.com a | 20,000 | 275,600 | |||||
SupportSoft a | 50,000 | 273,000 | |||||
TheStreet.com | 30,000 | 326,400 | |||||
Web.com a | 40,000 | 252,400 | |||||
Website Pros a | 20,000 | 188,400 | |||||
Total (Cost $3,134,514) | 3,466,423 | ||||||
IT Services - 5.0% | |||||||
15,000 | 178,350 | ||||||
Rainmaker Systems a | 40,000 | 284,400 | |||||
Think Partnership a | 100,000 | 299,000 | |||||
TriZetto Group (The) a | 15,000 | 290,400 | |||||
Total (Cost $916,036) | 1,052,150 | ||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 79 |
Schedules of Investments
Royce Technology Value Fund (continued) |
SHARES | VALUE | VALUE | |||||||||
Leisure and Entertainment - 1.1% | TOTAL COMMON STOCKS | ||||||||||
New Frontier Media | 25,000 | $ | 218,000 | (Cost $16,204,288) | $ | 16,895,588 | |||||
Total (Cost $228,765) | 218,000 | REPURCHASE AGREEMENT – 18.2% | |||||||||
State Street Bank & Trust Company, | |||||||||||
Other Consumer Products - 0.9% | 5.10% dated 6/29/07, due 7/2/07, | ||||||||||
15,000 | 189,150 | maturity value $3,794,612 (collateralized | |||||||||
by obligations of various U.S. Government | |||||||||||
Total (Cost $214,298) | 189,150 | Agencies, valued at $3,890,656) | |||||||||
(Cost $3,793,000) | 3,793,000 | ||||||||||
Other Consumer Services - 0.8% | |||||||||||
Autobytel a | 40,000 | 170,000 | TOTAL INVESTMENTS – 99.2% | ||||||||
(Cost $19,997,288) | 20,688,588 | ||||||||||
Total (Cost $168,884) | 170,000 | ||||||||||
CASH AND OTHER ASSETS | |||||||||||
Semiconductors and Equipment - 11.5% | LESS LIABILITIES – 0.8% | 174,928 | |||||||||
12,500 | 226,875 | ||||||||||
6,500 | 230,685 | NET ASSETS – 100.0% | $ | 20,863,516 | |||||||
DTS a | 10,000 | 217,700 | |||||||||
15,500 | 299,460 | ||||||||||
19,000 | 526,300 | ||||||||||
7,000 | 254,100 | ||||||||||
20,000 | 192,200 | ||||||||||
10,000 | 313,400 | ||||||||||
30,000 | 147,600 | ||||||||||
Total (Cost $2,514,185) | 2,408,320 | ||||||||||
Software - 18.5% | |||||||||||
40,000 | 324,000 | ||||||||||
Descartes Systems Group (The) a | 50,000 | 206,000 | |||||||||
30,100 | 451,500 | ||||||||||
Epicor Software a | 20,000 | 297,400 | |||||||||
15,000 | 217,350 | ||||||||||
ILOG ADR a | 37,500 | 453,750 | |||||||||
IncrediMail a | 10,000 | 78,000 | |||||||||
JDA Software Group a | 10,000 | 196,300 | |||||||||
22,000 | 297,880 | ||||||||||
100,000 | 212,000 | ||||||||||
Pegasystems | 20,000 | 218,600 | |||||||||
30,000 | 232,800 | ||||||||||
25,000 | 196,250 | ||||||||||
Transaction Systems Architects Cl. A a | 10,000 | 336,600 | |||||||||
Tucows a | 125,000 | 146,250 | |||||||||
Total (Cost $3,799,627) | 3,864,680 | ||||||||||
Telecommunications - 9.6% | |||||||||||
ADTRAN | 11,000 | 285,670 | |||||||||
American Telecom Services (Warrants) a | 59,500 | 26,180 | |||||||||
50,000 | 256,000 | ||||||||||
19,000 | 316,540 | ||||||||||
Intervoice a | 30,000 | 249,900 | |||||||||
20,000 | 185,200 | ||||||||||
30,000 | 299,400 | ||||||||||
15,000 | 189,750 | ||||||||||
PC-Tel a | 22,000 | 192,500 | |||||||||
UCN a | 1,500 | 6,450 | |||||||||
Total (Cost $1,987,210) | 2,007,590 | ||||||||||
Miscellaneous e - 4.3% | |||||||||||
Total (Cost $922,643) | 893,150 | ||||||||||
80 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited) |
Royce 100 Fund |
SHARES | VALUE | SHARES | VALUE | ||||||||||
COMMON STOCKS – 86.4% | Health – 1.2% | ||||||||||||
Drugs and Biotech - 1.2% | |||||||||||||
Consumer Products – 6.0% | Perrigo Company | 23,300 | $ | 456,214 | |||||||||
Apparel and Shoes - 1.7% | |||||||||||||
Columbia Sportswear | 4,500 | $ | 309,060 | Total (Cost $354,859) | 456,214 | ||||||||
K-Swiss Cl. A | 11,200 | 317,296 | |||||||||||
Industrial Products – 23.9% | |||||||||||||
626,356 | Automotive - 1.1% | ||||||||||||
Gentex Corporation | 20,100 | 395,769 | |||||||||||
Food/Beverage/Tobacco - 0.9% | |||||||||||||
†B&G Foods Cl. A | 25,400 | 335,280 | Building Systems and Components - 1.6% | ||||||||||
Drew Industries a | 11,500 | 381,110 | |||||||||||
Home Furnishing and Appliances - 0.9% | Teleflex | 2,700 | 220,806 | ||||||||||
Ethan Allen Interiors | 10,100 | 345,925 | |||||||||||
601,916 | |||||||||||||
Sports and Recreation - 1.9% | |||||||||||||
Polaris Industries | 6,000 | 324,960 | Industrial Components - 2.2% | ||||||||||
Thor Industries | 8,300 | 374,662 | CLARCOR | 13,800 | 516,534 | ||||||||
Donaldson Company | 8,400 | 298,620 | |||||||||||
699,622 | |||||||||||||
815,154 | |||||||||||||
Other Consumer Products - 0.6% | |||||||||||||
Fossil a | 8,200 | 241,818 | Machinery - 11.9% | ||||||||||
Coherent a | 9,700 | 295,947 | |||||||||||
Total (Cost $1,961,013) | 2,249,001 | Franklin Electric | 9,400 | 443,492 | |||||||||
6,800 | 289,340 | ||||||||||||
Consumer Services – 6.8% | Graco | 5,900 | 237,652 | ||||||||||
Leisure and Entertainment - 0.4% | Kennametal | 6,500 | 533,195 | ||||||||||
DreamWorks Animation SKG Cl. A a | 5,300 | 152,852 | Lincoln Electric Holdings | 5,700 | 423,168 | ||||||||
†Mueller Water Products Cl. A | 18,800 | 320,728 | |||||||||||
Restaurants and Lodgings - 1.2% | †National Instruments | 14,500 | 472,265 | ||||||||||
CEC Entertainment a | 12,900 | 454,080 | Nordson Corporation | 6,200 | 310,992 | ||||||||
Rofin-Sinar Technologies a | 6,400 | 441,600 | |||||||||||
Retail Stores - 2.5% | Tennant Company | 9,500 | 346,750 | ||||||||||
A.C. Moore Arts & Crafts a | 19,000 | 372,590 | Woodward Governor | 7,300 | 391,791 | ||||||||
32,900 | 356,307 | ||||||||||||
Tiffany & Co. | 4,000 | 212,240 | 4,506,920 | ||||||||||
941,137 | Metal Fabrication and Distribution - 2.6% | ||||||||||||
Kaydon Corporation | 8,800 | 458,656 | |||||||||||
Other Consumer Services - 2.7% | Metal Management | 5,600 | 246,792 | ||||||||||
Corinthian Colleges a | 21,200 | 345,348 | †Quanex Corporation | 5,800 | 282,460 | ||||||||
MoneyGram International | 11,900 | 332,605 | |||||||||||
Universal Technical Institute a | 13,600 | 345,304 | 987,908 | ||||||||||
1,023,257 | Paper and Packaging - 0.8% | ||||||||||||
†Greif Cl. A | 4,800 | 286,128 | |||||||||||
Total (Cost $2,266,228) | 2,571,326 | ||||||||||||
Specialty Chemicals and Materials - 0.7% | |||||||||||||
Westlake Chemical | 10,100 | 284,012 | |||||||||||
Financial Intermediaries – 2.0% | |||||||||||||
Banking - 1.0% | Other Industrial Products - 3.0% | ||||||||||||
†BOK Financial | 7,200 | 384,624 | Diebold | 6,900 | 360,180 | ||||||||
Raven Industries | 12,200 | 435,662 | |||||||||||
Securities Brokers - 1.0% | Smith (A.O.) Corporation | 8,200 | 327,098 | ||||||||||
Knight Capital Group Cl. A a | 21,400 | 355,240 | |||||||||||
1,122,940 | |||||||||||||
Total (Cost $607,119) | 739,864 | ||||||||||||
Total (Cost $6,983,448) | 9,000,747 | ||||||||||||
Financial Services – 6.6% | |||||||||||||
Information and Processing - 1.9% | Industrial Services – 11.6% | ||||||||||||
Morningstar a | 8,500 | 399,713 | Commercial Services - 5.2% | ||||||||||
SEI Investments | 10,800 | 313,632 | Administaff | 12,600 | 421,974 | ||||||||
Copart a | 12,000 | 367,080 | |||||||||||
713,345 | Grupo Aeroportuario del Centro Norte ADR a | 9,700 | 266,459 | ||||||||||
Hewitt Associates Cl. A a | 5,900 | 188,800 | |||||||||||
Insurance Brokers - 1.2% | MPS Group a | 21,700 | 290,129 | ||||||||||
Brown & Brown | 10,000 | 251,400 | Navigant Consulting a | 22,200 | 412,032 | ||||||||
Hilb Rogal & Hobbs | 4,900 | 210,014 | |||||||||||
1,946,474 | |||||||||||||
461,414 | |||||||||||||
Engineering and Construction - 0.9% | |||||||||||||
Investment Management - 3.5% | 10,800 | 356,076 | |||||||||||
AllianceBernstein Holding L.P. | 5,600 | 487,704 | |||||||||||
Federated Investors Cl. B | 10,200 | 390,966 | |||||||||||
Nuveen Investments Cl. A | 6,700 | 416,405 | |||||||||||
1,295,075 | |||||||||||||
Total (Cost $1,815,556) | 2,469,834 | ||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 81 |
Schedules of Investments
Royce 100 Fund (continued) |
SHARES | VALUE | SHARES | VALUE | |||||||||
Industrial Services (continued) | Software - 2.5% | |||||||||||
Industrial Distribution - 1.5% | Epicor Software a | 29,300 | $ | 435,691 | ||||||||
MSC Industrial Direct Cl. A | 3,600 | $ | 198,000 | Fair Isaac | 5,500 | 220,660 | ||||||
Ritchie Bros. Auctioneers | 5,700 | 356,934 | FARO Technologies a | 8,200 | 261,252 | |||||||
554,934 | 917,603 | |||||||||||
Printing - 0.8% | Telecommunications - 1.3% | |||||||||||
Courier Corporation | 7,775 | 311,000 | ADTRAN | 9,700 | 251,909 | |||||||
Foundry Networks a | 15,200 | 253,232 | ||||||||||
Transportation and Logistics - 3.2% | ||||||||||||
Alexander & Baldwin | 3,000 | 159,330 | 505,141 | |||||||||
Arkansas Best | 7,900 | 307,863 | ||||||||||
21,000 | 333,900 | Total (Cost $4,394,919) | 5,730,387 | |||||||||
Universal Truckload Services a | 20,900 | 415,283 | ||||||||||
Miscellaneous e – 4.5% | ||||||||||||
1,216,376 | Total (Cost $1,680,576) | 1,694,022 | ||||||||||
Total (Cost $3,925,288) | 4,384,860 | TOTAL COMMON STOCKS | ||||||||||
(Cost $26,613,804) | 32,539,025 | |||||||||||
Natural Resources – 8.6% | ||||||||||||
Energy Services - 5.3% | REPURCHASE AGREEMENT – 13.7% | |||||||||||
Carbo Ceramics | 8,600 | 376,766 | State Street Bank & Trust Company, | |||||||||
Ensign Energy Services | 19,300 | 344,238 | 5.10% dated 6/29/07, due 7/2/07, | |||||||||
Pason Systems | 34,900 | 546,474 | maturity value $5,170,196 (collateralized | |||||||||
Trican Well Service | 19,600 | 399,084 | by obligations of various U.S. Government | |||||||||
4,400 | 318,868 | Agencies, valued at $5,300,113) | ||||||||||
(Cost $5,168,000) | 5,168,000 | |||||||||||
1,985,430 | ||||||||||||
TOTAL INVESTMENTS – 100.1% | ||||||||||||
Oil and Gas - 2.6% | (Cost $31,781,804) | 37,707,025 | ||||||||||
Cimarex Energy | 8,700 | 342,867 | ||||||||||
SEACOR Holdings a | 2,200 | 205,392 | LIABILITIES LESS CASH | |||||||||
Unit Corporation a | 6,800 | 427,788 | AND OTHER ASSETS – (0.1)% | (18,584 | ) | |||||||
976,047 | NET ASSETS – 100.0% | $ | 37,688,441 | |||||||||
Other Natural Resources - 0.7% | ||||||||||||
AMCOL International | 10,300 | 281,293 | ||||||||||
Total (Cost $2,624,798) | 3,242,770 | |||||||||||
Technology – 15.2% | ||||||||||||
Aerospace and Defense - 0.9% | ||||||||||||
HEICO Corporation Cl. A | 10,100 | 355,015 | ||||||||||
Components and Systems - 4.9% | ||||||||||||
Dionex Corporation a | 5,400 | 383,346 | ||||||||||
Newport Corporation a | 20,000 | 309,600 | ||||||||||
Plexus Corporation a | 19,800 | 455,202 | ||||||||||
Technitrol | 11,200 | 321,104 | ||||||||||
Tektronix | 10,800 | 364,392 | ||||||||||
1,833,644 | ||||||||||||
Distribution - 0.7% | ||||||||||||
Benchmark Electronics a | 11,900 | 269,178 | ||||||||||
IT Services - 3.1% | ||||||||||||
Gartner a | 12,100 | 297,539 | ||||||||||
Perot Systems Cl. A a | 24,600 | 419,184 | ||||||||||
RADVision a | 7,300 | 153,519 | ||||||||||
Sapient Corporation a | 37,900 | 292,967 | ||||||||||
1,163,209 | ||||||||||||
Semiconductors and Equipment - 1.8% | ||||||||||||
DTS a | 9,600 | 208,992 | ||||||||||
Diodes a | 5,500 | 229,735 | ||||||||||
Dolby Laboratories Cl. A a | 7,000 | 247,870 | ||||||||||
686,597 | ||||||||||||
82 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
Royce Discovery Fund |
SHARES | VALUE | SHARES | VALUE | ||||||||||
COMMON STOCKS – 94.9% | †NYMAGIC | 800 | $ | 32,160 | |||||||||
2,300 | 31,947 | ||||||||||||
Consumer Products – 7.2% | SeaBright Insurance Holdings a | 1,800 | 31,464 | ||||||||||
Apparel and Shoes - 2.5% | 21st Century Holding Company | 1,800 | 19,332 | ||||||||||
Lakeland Industries a | 2,050 | $ | 28,413 | ||||||||||
Stride Rite | 2,300 | 46,598 | 254,647 | ||||||||||
Weyco Group | 1,358 | 36,571 | |||||||||||
Total (Cost $410,994) | 402,626 | ||||||||||||
111,582 | |||||||||||||
Financial Services – 0.8% | |||||||||||||
Food/Beverage/Tobacco - 1.5% | Other Financial Services - 0.8% | ||||||||||||
Mannatech | 2,200 | 34,958 | ASTA Funding | 900 | 34,587 | ||||||||
Schiff Nutrition International a | 4,800 | 31,440 | |||||||||||
Total (Cost $31,844) | 34,587 | ||||||||||||
66,398 | |||||||||||||
Health – 20.5% | |||||||||||||
Home Furnishing and Appliances - 1.5% | Drugs and Biotech - 6.1% | ||||||||||||
American Woodmark | 875 | 30,275 | American Oriental Bioengineering a | 3,600 | 32,040 | ||||||||
Hooker Furniture | 1,500 | 33,660 | Bradley Pharmaceuticals a | 1,600 | 34,736 | ||||||||
Mity Enterprises a | 100 | 2,146 | Draxis Health a | 5,300 | 31,376 | ||||||||
Harvard Bioscience a | 6,400 | 33,600 | |||||||||||
66,081 | Lifecore Biomedical a | 1,700 | 26,979 | ||||||||||
Neogen Corporation a | 1,300 | 37,388 | |||||||||||
Sports and Recreation - 0.7% | Pharmanet Development Group a | 1,400 | 44,632 | ||||||||||
†Arctic Cat | 1,700 | 33,660 | QLT a | 4,300 | 31,820 | ||||||||
Other Consumer Products - 1.0% | 272,571 | ||||||||||||
JAKKS Pacific a | 1,600 | 45,024 | |||||||||||
Health Services - 3.8% | |||||||||||||
Total (Cost $280,438) | 322,745 | 1,400 | 51,338 | ||||||||||
NovaMed a | 3,700 | 22,385 | |||||||||||
Consumer Services – 7.6% | PainCare Holdings a | 1,098 | 406 | ||||||||||
Leisure and Entertainment - 0.7% | †Psychemedics Corporation | 1,700 | 34,697 | ||||||||||
New Frontier Media | 3,600 | 31,392 | RehabCare Group a | 2,100 | 29,904 | ||||||||
Res-Care a | 1,500 | 31,710 | |||||||||||
Restaurants and Lodgings - 1.9% | |||||||||||||
Benihana Cl. A a | 700 | 14,000 | 170,440 | ||||||||||
Interstate Hotels & Resorts a | 500 | 2,610 | |||||||||||
2,100 | 36,330 | Medical Products and Devices - 10.6% | |||||||||||
2,000 | 33,380 | Abaxis a | 1,300 | 27,118 | |||||||||
10,100 | 27,573 | ||||||||||||
86,320 | Anika Therapeutics a | 2,000 | 30,380 | ||||||||||
Cholestech Corporation a | 2,000 | 43,980 | |||||||||||
Retail Stores - 3.0% | Cutera a | 1,400 | 34,888 | ||||||||||
Books-A-Million | 1,600 | 27,104 | 1,200 | 43,716 | |||||||||
Cache a | 1,800 | 23,886 | Exactech a | 1,900 | 30,552 | ||||||||
Shoe Carnival a | 400 | 10,996 | HealthTronics a | 4,088 | 17,783 | ||||||||
Village Super Market Cl. A | 1,500 | 71,715 | Medical Action Industries a | 1,400 | 25,284 | ||||||||
Meridian Bioscience | 1,995 | 43,212 | |||||||||||
133,701 | Merit Medical Systems a | 2,800 | 33,488 | ||||||||||
2,000 | 31,840 | ||||||||||||
Other Consumer Services - 2.0% | Quidel a | 2,800 | 49,168 | ||||||||||
Lincoln Educational Services a | 1,400 | 20,804 | Zoll Medical a | 1,600 | 35,696 | ||||||||
2,100 | 30,618 | ||||||||||||
2,700 | 35,046 | 474,678 | |||||||||||
86,468 | Total (Cost $773,531) | 917,689 | |||||||||||
Total (Cost $316,392) | 337,881 | Industrial Products – 14.5% | |||||||||||
Automotive - 1.5% | |||||||||||||
Financial Intermediaries – 9.0% | Commerical Vehicle Group a | 1,800 | 33,534 | ||||||||||
Banking - 3.3% | 1,400 | 35,140 | |||||||||||
†City Bank | 1,100 | 34,661 | |||||||||||
†First Financial Service | 1,100 | 31,284 | 68,674 | ||||||||||
First Regional Bancorp a | 1,200 | 30,528 | |||||||||||
Republic First Bancorp a | 2,310 | 22,176 | Building Systems and Components - 0.8% | ||||||||||
Temecula Valley Bancorp | 1,658 | 29,330 | 1,400 | 37,198 | |||||||||
147,979 | Industrial Components - 2.7% | ||||||||||||
American Technical Ceramics a | 2,200 | 52,514 | |||||||||||
Insurance - 5.7% | |||||||||||||
American Safety Insurance Holdings a | |||||||||||||
1,900 | 45,277 | ||||||||||||
Donegal Group Cl. A | 1,900 | 37,297 | |||||||||||
Mercer Insurance Group | 1,700 | 25,330 | |||||||||||
1,600 | 31,840 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 83 |
Schedules of Investments
Royce Discovery Fund (continued) |
SHARES | VALUE | SHARES | VALUE | ||||||||||||||
Industrial Products (continued) | VAALCO Energy a | 7,300 | $ | 35,259 | |||||||||||||
Industrial Components (continued) | |||||||||||||||||
800 | $ | 34,400 | 200,608 | ||||||||||||||
Zygo Corporation a | 2,200 | 31,438 | |||||||||||||||
Precious Metals and Mining - 1.4% | |||||||||||||||||
118,352 | 20,900 | 29,260 | |||||||||||||||
†International Royalty | 5,000 | 31,800 | |||||||||||||||
Machinery - 5.9% | |||||||||||||||||
4,400 | 31,460 | 61,060 | |||||||||||||||
EnPro Industries a | 1,400 | 59,906 | |||||||||||||||
Gehl Company a | 1,200 | 36,432 | Real Estate - 2.1% | ||||||||||||||
Hurco Companies a | 800 | 39,984 | AMREP Corporation | 600 | 28,530 | ||||||||||||
K-Tron International a | 300 | 30,411 | Avatar Holdings a | 500 | 38,470 | ||||||||||||
LeCroy Corporation a | 2,700 | 26,244 | †Gyrodyne Company of America | 500 | 28,725 | ||||||||||||
MTS Systems | 900 | 40,203 | |||||||||||||||
95,725 | |||||||||||||||||
264,640 | |||||||||||||||||
Total (Cost $418,846) | 430,309 | ||||||||||||||||
Metal Fabrication and Distribution - 2.1% | |||||||||||||||||
Friedman Industries | 3,300 | 31,845 | Technology – 12.6% | ||||||||||||||
Olympic Steel | 1,000 | 28,660 | Aerospace and Defense - 1.8% | ||||||||||||||
Universal Stainless & Alloy Products a | 900 | 31,707 | Axsys Technologies a | 2,100 | 44,919 | ||||||||||||
†Kaman Corporation | 1,200 | 37,428 | |||||||||||||||
92,212 | |||||||||||||||||
82,347 | |||||||||||||||||
Specialty Chemicals and Materials - 0.7% | |||||||||||||||||
900 | 30,933 | Internet Software and Services - 0.8% | |||||||||||||||
Imergent a | 1,500 | 36,690 | |||||||||||||||
Other Industrial Products - 0.8% | |||||||||||||||||
5,900 | 34,692 | IT Services - 2.6% | |||||||||||||||
3,900 | 46,371 | ||||||||||||||||
Total (Cost $541,029) | 646,701 | 4,200 | 34,356 | ||||||||||||||
Ness Technologies a | 2,600 | 33,826 | |||||||||||||||
Industrial Services – 8.6% | |||||||||||||||||
Commercial Services - 5.6% | 114,553 | ||||||||||||||||
Barrett Business Services | 1,400 | 36,162 | |||||||||||||||
4,300 | 33,884 | Semiconductors and Equipment - 4.0% | |||||||||||||||
Heidrick & Struggles International a | 1,200 | 61,488 | CyberOptics Corporation a | 2,400 | 32,304 | ||||||||||||
Intersections a | 3,500 | 35,000 | GSI Group a | 3,600 | 35,244 | ||||||||||||
RCM Technologies a | 4,000 | 31,160 | Intevac a | 2,300 | 48,898 | ||||||||||||
Rentrak Corporation a | 1,700 | 25,177 | IXYS Corporation a | 3,200 | 26,720 | ||||||||||||
Volt Information Sciences a | 1,600 | 29,504 | Photronics a | 2,400 | 35,712 | ||||||||||||
252,375 | 178,878 | ||||||||||||||||
Food and Tobacco Processors - 1.0% | Software - 2.0% | ||||||||||||||||
Imperial Sugar | 1,400 | 43,106 | American Software Cl. A | 4,700 | 48,410 | ||||||||||||
1,600 | 38,592 | ||||||||||||||||
Printing - 1.0% | |||||||||||||||||
CSS Industries | 1,081 | 42,818 | 87,002 | ||||||||||||||
Transportation and Logistics - 1.0% | Telecommunications - 1.4% | ||||||||||||||||
5,400 | 32,292 | Atlantic Tele-Network | 1,100 | 31,504 | |||||||||||||
Vitran Corporation Cl. A a | 700 | 14,938 | 2,500 | 30,925 | |||||||||||||
47,230 | 62,429 | ||||||||||||||||
Total (Cost $353,687) | 385,529 | Total (Cost $484,894) | 561,899 | ||||||||||||||
Natural Resources – 9.6% | Miscellaneous e – 4.5% | ||||||||||||||||
Energy Services - 1.6% | Total (Cost $252,988) | 199,351 | |||||||||||||||
Trico Marine Services a | 900 | 36,792 | |||||||||||||||
2,200 | 36,124 | TOTAL COMMON STOCKS | |||||||||||||||
(Cost $3,864,643) | 4,239,317 | ||||||||||||||||
72,916 | |||||||||||||||||
REPURCHASE AGREEMENT – 5.0% | |||||||||||||||||
Oil and Gas - 4.5% | State Street Bank & Trust Company, | ||||||||||||||||
5,300 | 31,111 | 5.10% dated 6/29/07, due 7/2/07, | |||||||||||||||
1,900 | 31,179 | maturity value $224,095 (collateralized | |||||||||||||||
EnergySouth | 700 | 35,700 | by obligations of various U.S. Government | ||||||||||||||
21,050 | 31,785 | Agencies, valued at $230,006) | |||||||||||||||
1,400 | 35,574 | (Cost $224,000) | 224,000 | ||||||||||||||
84 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
Royce Financial Services Fund |
VALUE | SHARES | VALUE | ||||||||||
TOTAL INVESTMENTS – 99.9% | COMMON STOCKS – 83.0% | |||||||||||
(Cost $4,088,643) | $ | 4,463,317 | ||||||||||
Banking - 19.8% | ||||||||||||
CASH AND OTHER ASSETS | Abigail Adams National Bancorp | 1,100 | $ | 15,180 | ||||||||
LESS LIABILITIES – 0.1% | 5,914 | †Ameriana Bancorp | 3,500 | 34,825 | ||||||||
BCB Bancorp | 2,400 | 39,624 | ||||||||||
†BOK Financial | 1,000 | 53,420 | ||||||||||
NET ASSETS – 100.0% | $ | 4,469,231 | Bancorp Rhode Island | 700 | 26,775 | |||||||
Bank of Hawaii | 200 | 10,328 | ||||||||||
Bank of N.T. Butterfield & Son | 1,210 | 72,600 | ||||||||||
Boston Private Financial Holdings | 800 | 21,496 | ||||||||||
CFS Bancorp | 3,400 | 49,368 | ||||||||||
CNB Financial | 3,700 | 51,652 | ||||||||||
Cadence Financial | 1,900 | 37,012 | ||||||||||
Center Bancorp | 1,323 | 19,527 | ||||||||||
Central Pacific Financial | 1,000 | 33,010 | ||||||||||
Centrue Financial | 3,200 | 64,160 | ||||||||||
Commercial National Financial | 2,800 | 52,528 | ||||||||||
Fauquier Bankshares | 2,400 | 54,480 | ||||||||||
First Citizens BancShares Cl. A | 125 | 24,300 | ||||||||||
†1st Independence Financial Group | 3,400 | 56,780 | ||||||||||
HopFed Bancorp | 3,600 | 57,924 | ||||||||||
International Bancshares | 687 | 17,601 | ||||||||||
†Kearny Financial | 4,000 | 53,920 | ||||||||||
Peapack-Gladstone Financial | 2,700 | 73,089 | ||||||||||
Sun Bancorp a | 882 | 14,879 | ||||||||||
Susquehanna Bancshares | 400 | 8,948 | ||||||||||
900 | 26,865 | |||||||||||
Wilber Corporation | 6,100 | 56,425 | ||||||||||
Wilmington Trust | 1,100 | 45,661 | ||||||||||
Total (Cost $1,067,359) | 1,072,377 | |||||||||||
Closed-End Funds - 1.0% | ||||||||||||
Central Fund of Canada Cl. A | 6,300 | 57,267 | ||||||||||
Total (Cost $50,682) | 57,267 | |||||||||||
Commercial Services - 2.0% | ||||||||||||
1,500 | 48,000 | |||||||||||
Watson Wyatt Worldwide Cl. A | 1,200 | 60,576 | ||||||||||
Total (Cost $77,290) | 108,576 | |||||||||||
Information and Processing - 2.6% | ||||||||||||
Interactive Data | 500 | 13,390 | ||||||||||
Morningstar a | 1,500 | 70,538 | ||||||||||
SEI Investments | 2,000 | 58,080 | ||||||||||
Total (Cost $90,164) | 142,008 | |||||||||||
Insurance - 8.0% | ||||||||||||
Alleghany Corporation a | 106 | 43,089 | ||||||||||
American National Insurance | 200 | 30,520 | ||||||||||
Argonaut Group | 800 | 24,968 | ||||||||||
Aspen Insurance Holdings | 1,400 | 39,298 | ||||||||||
Assured Guaranty | 2,000 | 59,120 | ||||||||||
Baldwin & Lyons Cl. B | 1,500 | 38,970 | ||||||||||
CNA Surety a | 500 | 9,455 | ||||||||||
CRM Holdings a | 4,800 | 36,720 | ||||||||||
Erie Indemnity Cl. A | 200 | 10,808 | ||||||||||
Infinity Property & Casualty | 700 | 35,511 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 85 |
Schedules of Investments
Royce Financial Services Fund (continued) |
SHARES | VALUE | SHARES | VALUE | ||||||||||||
Insurance (continued) | Gladstone Commercial | 600 | $ | 11,760 | |||||||||||
Montpelier Re Holdings | 1,300 | $ | 24,102 | MFA Mortgage Investments | 7,000 | 50,960 | |||||||||
Ohio Casualty | 500 | 21,655 | |||||||||||||
RLI | 300 | 16,785 | Total (Cost $177,299) | 143,402 | |||||||||||
Transatlantic Holdings | 600 | 42,678 | |||||||||||||
Securities Brokers - 12.5% | |||||||||||||||
Total (Cost $347,771) | 433,679 | Cowen Group a | 1,900 | 34,029 | |||||||||||
†Dundee Wealth Management | 3,000 | 46,243 | |||||||||||||
Insurance Brokers - 2.8% | Evercore Partners Cl. A | 600 | 17,862 | ||||||||||||
Brown & Brown | 2,200 | 55,308 | Greenhill & Co. | 600 | 41,226 | ||||||||||
Gallagher (Arthur J.) & Co. | 1,800 | 50,184 | International Assets Holding a | 1,000 | 23,250 | ||||||||||
Hilb Rogal & Hobbs | 1,000 | 42,860 | 1,200 | 51,996 | |||||||||||
†Jefferies Group | 1,900 | 51,262 | |||||||||||||
Total (Cost $139,700) | 148,352 | KBW a | 2,000 | 58,760 | |||||||||||
Knight Capital Group Cl. A a | 1,600 | 26,560 | |||||||||||||
Investment Management - 19.9% | Lazard Cl. A | 600 | 27,018 | ||||||||||||
AGF Management Cl. B | 1,500 | 51,143 | Piper Jaffray a | 1,100 | 61,303 | ||||||||||
ADDENDA Capital | 2,800 | 59,535 | Sanders Morris Harris Group | 2,500 | 29,100 | ||||||||||
500 | 64,380 | Shinko Securities | 10,800 | 55,963 | |||||||||||
AllianceBernstein Holding L.P. | 1,800 | 156,762 | Stifel Financial a | 1,000 | 58,890 | ||||||||||
BKF Capital Group a | 18,300 | 42,090 | Thomas Weisel Partners Group a | 2,300 | 38,295 | ||||||||||
Calamos Asset Management Cl. A | 700 | 17,885 | †Tokai Tokyo Securities | 9,400 | 53,823 | ||||||||||
Epoch Holding Corporation a | 2,900 | 38,831 | |||||||||||||
Federated Investors Cl. B | 1,700 | 65,161 | Total (Cost $598,075) | 675,580 | |||||||||||
†GAMCO Investors Cl. A | 3,000 | 168,150 | |||||||||||||
Hennessy Advisors | 2,250 | 29,250 | Software - 1.2% | ||||||||||||
Highbury Financial a | 10,400 | 63,960 | Advent Software a | 500 | 16,275 | ||||||||||
Highbury Financial (Warrants) a | 12,600 | 19,404 | Fair Isaac | 1,200 | 48,144 | ||||||||||
IGM Financial | 200 | 9,720 | |||||||||||||
Janus Capital Group | 700 | 19,488 | Total (Cost $47,607) | 64,419 | |||||||||||
Nuveen Investments Cl. A | 800 | 49,720 | |||||||||||||
SPARX Group | 50 | 37,157 | Miscellaneous e – 2.1% | ||||||||||||
T. Rowe Price Group | 1,000 | 51,890 | Total (Cost $103,427) | 113,329 | |||||||||||
Waddel & Reed Financial Cl. A | 2,300 | 59,823 | |||||||||||||
Westwood Holdings Group | 2,200 | 75,152 | TOTAL COMMON STOCKS | ||||||||||||
(Cost $3,875,209) | 4,491,619 | ||||||||||||||
Total (Cost $785,864) | 1,079,501 | ||||||||||||||
REPURCHASE AGREEMENT – 21.6% | |||||||||||||||
Other Consumer Services - 0.5% | State Street Bank & Trust Company, | ||||||||||||||
MoneyGram International | 1,000 | 27,950 | 5.10% dated 6/29/07, due 7/2/07, | ||||||||||||
maturity value $1,171,498 (collateralized | |||||||||||||||
Total (Cost $19,367) | 27,950 | by obligations of various U.S. Government | |||||||||||||
Agencies, valued at $1,204,375) | |||||||||||||||
Other Financial Intermediaries - 5.9% | (Cost $1,171,000) | 1,171,000 | |||||||||||||
AP Alternative Assets L.P. | 2,300 | 41,975 | |||||||||||||
JAFCO | 1,400 | 64,585 | TOTAL INVESTMENTS – 104.6% | ||||||||||||
KKR Private Equity Investors LLP | 800 | 18,000 | (Cost $5,046,209) | 5,662,619 | |||||||||||
Kohlberg Capital | 3,000 | 55,650 | |||||||||||||
MCG Capital | 1,000 | 16,020 | LIABILITIES LESS CASH | ||||||||||||
MVC Capital | 3,400 | 63,954 | AND OTHER ASSETS – (4.6)% | (247,399 | ) | ||||||||||
RHJ International a | 2,900 | 57,305 | |||||||||||||
NET ASSETS – 100.0% | $ | 5,415,220 | |||||||||||||
Total (Cost $297,276) | 317,489 | ||||||||||||||
Other Financial Services - 2.0% | |||||||||||||||
Centerline Holding Company | 500 | 9,000 | |||||||||||||
Credit Acceptance a | 1,066 | 28,601 | |||||||||||||
†Deutsche Beteiligungs | 1,200 | 48,724 | |||||||||||||
World Acceptance a | 500 | 21,365 | |||||||||||||
Total (Cost $73,328) | 107,690 | ||||||||||||||
Real Estate Investment Trusts - 2.7% | |||||||||||||||
Capital Trust Cl. A | 700 | 23,898 | |||||||||||||
Friedman, Billings, Ramsey Group Cl. A | 10,400 | 56,784 |
86 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited)
Royce Dividend Value Fund |
SHARES | VALUE | SHARES | VALUE | |||||||||
COMMON STOCKS – 91.8% | Real Estate Investment Trusts - 7.4% | |||||||||||
†Annaly Capital Management | 5,300 | $ | 76,426 | |||||||||
Consumer Products – 6.1% | †Anworth Mortgage Asset | 5,000 | 45,250 | |||||||||
Apparel and Shoes - 0.2% | Capital Trust Cl. A | 1,700 | 58,038 | |||||||||
K-Swiss Cl. A | 600 | $ | 16,998 | †DCT Industrial Trust | 8,900 | 95,764 | ||||||
Friedman, Billings, Ramsey Group Cl. A | 20,200 | 110,292 | ||||||||||
Food/Beverage/Tobacco - 3.4% | Gladstone Commercial | 1,200 | 23,520 | |||||||||
†B&G Foods Cl. A | 14,000 | 184,800 | MFA Mortgage Investments | 8,000 | 58,240 | |||||||
†B&G Foods (Units) | 2,000 | 40,420 | 10,000 | 125,100 | ||||||||
†Tootsie Roll Industries | 2,200 | 60,962 | Winthrop Realty Trust | 5,329 | 36,823 | |||||||
286,182 | 629,453 | |||||||||||
Home Furnishing and Appliances - 1.4% | Other Financial Intermediaries - 2.3% | |||||||||||
Ethan Allen Interiors | 1,400 | 47,950 | Kohlberg Capital | 4,700 | 87,185 | |||||||
Furniture Brands International | 4,800 | 68,160 | MCG Capital | 1,000 | 16,020 | |||||||
MVC Capital | 1,500 | 28,215 | ||||||||||
116,110 | NGP Capital Resources | 3,500 | 58,514 | |||||||||
Sports and Recreation - 1.1% | 189,934 | |||||||||||
†Thor Industries | 1,300 | 58,682 | ||||||||||
†Winnebago Industries | 1,200 | 35,424 | Total (Cost $1,651,114) | 1,674,744 | ||||||||
94,106 | Financial Services – 13.4% | |||||||||||
Information and Processing - 1.4% | ||||||||||||
Total (Cost $533,178) | 513,396 | SEI Investments | 4,000 | 116,160 | ||||||||
Consumer Services – 5.0% | Insurance Brokers - 3.2% | |||||||||||
Leisure and Entertainment - 0.6% | Brown & Brown | 2,900 | 72,906 | |||||||||
†International Speedway Cl. A | 600 | 31,626 | Gallagher (Arthur J.) & Co. | 4,900 | 136,612 | |||||||
Regal Entertainment Group Cl. A | 800 | 17,544 | Hilb Rogal & Hobbs | 1,500 | 64,290 | |||||||
49,170 | 273,808 | |||||||||||
Restaurants and Lodgings - 0.4% | Investment Management - 8.8% | |||||||||||
CBRL Group | 900 | 38,232 | AGF Management Cl. B | 1,300 | 44,324 | |||||||
ADDENDA Capital | 3,100 | 65,914 | ||||||||||
Retail Stores - 3.3% | AllianceBernstein Holding L.P. | 2,300 | 200,307 | |||||||||
Borders Group | 1,400 | 26,684 | Federated Investors Cl. B | 800 | 30,664 | |||||||
†Buckle (The) | 800 | 31,520 | GAMCO Investors Cl. A | 2,200 | 123,310 | |||||||
†Cato Corporation Cl. A | 2,400 | 52,656 | Nuveen Investments Cl. A | 1,500 | 93,225 | |||||||
†Deb Shops | 2,200 | 60,830 | †Waddel & Reed Financial Cl. A | 3,300 | 85,833 | |||||||
Dress Barn (The) a | 3,100 | 63,612 | †Westwood Holdings Group | 3,000 | 102,480 | |||||||
Talbots | 400 | 10,012 | ||||||||||
Williams-Sonoma | 1,100 | 34,738 | 746,057 | |||||||||
280,052 | Total (Cost $815,077) | 1,136,025 | ||||||||||
Other Consumer Services - 0.7% | Health – 1.9% | |||||||||||
MoneyGram International | 2,000 | 55,900 | Drugs and Biotech - 0.8% | |||||||||
†Perrigo Company | 3,600 | 70,488 | ||||||||||
Total (Cost $411,174) | 423,354 | |||||||||||
Medical Products and Devices - 0.3% | ||||||||||||
Financial Intermediaries – 19.8% | Applera Corporation-Applied | |||||||||||
Banking - 7.1% | Biosystems Group | 800 | 24,432 | |||||||||
BOK Financial | 2,400 | 128,208 | ||||||||||
Bank of N.T. Butterfield & Son | 1,200 | 72,000 | Personal Care - 0.8% | |||||||||
Boston Private Financial Holdings | 2,200 | 59,114 | †Inter Parfums | 1,200 | 31,944 | |||||||
Canadian Western Bank | 2,400 | 63,624 | Regis Corporation | 900 | 34,425 | |||||||
Fauquier Bankshares | 3,900 | 88,530 | ||||||||||
Peapack-Gladstone Financial | 4,100 | 110,987 | 66,369 | |||||||||
Timberland Bancorp | 3,600 | 56,520 | ||||||||||
W Holding Company | 7,600 | 20,064 | Total (Cost $140,384) | 161,289 | ||||||||
599,047 | Industrial Products – 18.0% | |||||||||||
Building Systems and Components - 0.3% | ||||||||||||
Insurance - 3.0% | †Simpson Manufacturing | 900 | 30,366 | |||||||||
†Assured Guaranty | 1,000 | 29,560 | ||||||||||
†Harleysville Group | 2,000 | 66,720 | Construction Materials - 0.9% | |||||||||
†Max Capital Group | 1,200 | 33,960 | Eagle Materials | 1,500 | 73,575 | |||||||
OneBeacon Insurance Group Cl. A | 2,000 | 50,660 | ||||||||||
†State Auto Financial | 1,300 | 39,845 | Industrial Components - 2.2% | |||||||||
Transatlantic Holdings | 500 | 35,565 | †AMETEK | 1,100 | 43,648 | |||||||
CLARCOR | 1,400 | 52,402 | ||||||||||
256,310 | ||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 87 |
Schedules of Investments
Royce Dividend Value Fund (continued) |
SHARES | VALUE | SHARES | VALUE | |||||||||
Industrial Products (continued) | Oil and Gas - 8.4% | |||||||||||
Industrial Components (continued) | Cimarex Energy | 1,900 | $ | 74,879 | ||||||||
†Hubbell Cl. B | 1,600 | $ | 86,752 | Crosstex Energy | 3,300 | 94,809 | ||||||
Enterprise GP Holdings L.P. | 2,600 | 98,618 | ||||||||||
182,802 | †Frontier Oil | 900 | 39,393 | |||||||||
Hiland Holdings GP L.P. | 1,100 | 39,435 | ||||||||||
Machinery - 3.2% | Hugoton Royalty Trust | 3,600 | 90,828 | |||||||||
†Applied Industrial Technologies | 1,200 | 35,400 | Magellan Midstream Holdings L.P. | 2,300 | 69,000 | |||||||
Franklin Electric | 2,000 | 94,360 | †St. Mary Land & Exploration | 1,500 | 54,930 | |||||||
Graco | 1,700 | 68,476 | †Universal Compression Partners L.P. | 2,100 | 76,839 | |||||||
Lincoln Electric Holdings | 600 | 44,544 | W&T Offshore | 2,400 | 67,176 | |||||||
†MTS Systems | 700 | 31,269 | ||||||||||
705,907 | ||||||||||||
274,049 | ||||||||||||
Other Natural Resources - 1.1% | ||||||||||||
Metal Fabrication and Distribution - 4.7% | Alliance Holdings GP L.P. | 3,100 | 92,256 | |||||||||
†Carpenter Technology | 400 | 52,124 | ||||||||||
Chaparral Steel | 1,000 | 71,870 | Total (Cost $897,873) | 1,020,851 | ||||||||
†Kaydon Corporation | 600 | 31,272 | ||||||||||
†NN | 10,000 | 118,000 | Technology – 4.9% | |||||||||
†Reliance Steel & Aluminum | 900 | 50,634 | Components and Systems - 3.0% | |||||||||
Schnitzer Steel Industries Cl. A | 700 | 33,558 | Analogic Corporation | 1,200 | 88,212 | |||||||
†Steel Dynamics | 1,000 | 41,910 | Nam Tai Electronics | 3,400 | 40,528 | |||||||
Technitrol | 3,900 | 111,813 | ||||||||||
399,368 | Tektronix | 500 | 16,870 | |||||||||
Paper and Packaging - 2.4% | 257,423 | |||||||||||
AptarGroup | 2,000 | 71,120 | ||||||||||
†Greif Cl. A | 2,200 | 131,142 | Internet Software and Services - 0.5% | |||||||||
†United Online | 2,800 | 46,172 | ||||||||||
202,262 | ||||||||||||
Software - 0.5% | ||||||||||||
Specialty Chemicals and Materials - 2.2% | Fair Isaac | 1,000 | 40,120 | |||||||||
Balchem Corporation | 1,687 | 30,653 | ||||||||||
Cabot Corporation | 1,300 | 61,984 | Telecommunications - 0.9% | |||||||||
Quaker Chemical | 1,000 | 23,600 | CT Communications | 2,100 | 64,071 | |||||||
Westlake Chemical | 2,500 | 70,300 | North Pittsburgh Systems | 500 | 10,625 | |||||||
186,537 | 74,696 | |||||||||||
Other Industrial Products - 2.1% | Total (Cost $333,762) | 418,411 | ||||||||||
Quixote Corporation | 2,600 | 48,620 | ||||||||||
†Raven Industries | 2,900 | 103,559 | Utilities – 2.1% | |||||||||
Smith (A.O.) Corporation | 600 | 23,934 | ALLETE | 600 | 28,230 | |||||||
Aqua America | 2,000 | 44,980 | ||||||||||
176,113 | †SJW | 3,100 | 103,230 | |||||||||
Total (Cost $1,371,522) | 1,525,072 | Total (Cost $153,782) | 176,440 | |||||||||
Industrial Services – 3.8% | Miscellaneous e – 4.7% | |||||||||||
Commercial Services - 0.9% | Total (Cost $393,449) | 395,465 | ||||||||||
†Barrett Business Services | 1,400 | 36,162 | ||||||||||
Kelly Services Cl. A | 1,400 | 38,444 | TOTAL COMMON STOCKS | |||||||||
(Cost $7,013,560) | 7,769,796 | |||||||||||
74,606 | ||||||||||||
PREFERRED STOCKS – 1.0% | ||||||||||||
Transportation and Logistics - 2.0% | Central Parking Finance Trust 5.25% Conv. | 1,000 | 18,150 | |||||||||
Alexander & Baldwin | 600 | 31,866 | †Edge Petroleum 5.75% Ser. A Conv. | 1,200 | 64,560 | |||||||
†Heartland Express | 2,400 | 39,120 | ||||||||||
†Landstar System | 1,300 | 62,725 | TOTAL PREFERRED STOCKS | |||||||||
†Pacer International | 1,600 | 37,632 | (Cost $79,050) | 82,710 | ||||||||
171,343 | REPURCHASE AGREEMENT – 7.0% | |||||||||||
State Street Bank & Trust Company, | ||||||||||||
Other Industrial Services - 0.9% | 5.10% dated 6/29/07, due 7/2/07, | |||||||||||
Landauer | 1,600 | 78,800 | maturity value $595,253 (collateralized | |||||||||
by obligations of various U.S. Government | ||||||||||||
Total (Cost $312,245) | 324,749 | Agencies, valued at $613,050) | ||||||||||
(Cost $595,000) | 595,000 | |||||||||||
Natural Resources – 12.1% | ||||||||||||
Energy Services - 2.6% | ||||||||||||
†Ensign Energy Services | 2,000 | 35,672 | ||||||||||
Helmerich & Payne | 3,800 | 134,596 | ||||||||||
†Patterson-UTI Energy | 2,000 | 52,420 | ||||||||||
222,688 | ||||||||||||
88 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited) |
Royce International Value Fund | ||
VALUE | SHARES | VALUE | ||||||||
TOTAL INVESTMENTS – 99.8% | COMMON STOCKS – 70.1% | |||||||||
(Cost $7,687,610) | $ | 8,447,506 | ||||||||
Austria – 2.5% | ||||||||||
CASH AND OTHER ASSETS | †Mayr-Melnhof Karton | 1,000 | $ | 227,623 | ||||||
LESS LIABILITIES – 0.2% | 14,908 | †Semperit AG Holding | 4,500 | 193,679 | ||||||
Total (Cost $424,166) | 421,302 | |||||||||
NET ASSETS – 100.0% | $ | 8,462,414 | ||||||||
Belgium – 1.1% | ||||||||||
†Van De Velde | 3,500 | 181,382 | ||||||||
Total (Cost $181,510) | 181,382 | |||||||||
Belize – 0.8% | ||||||||||
21,000 | 110,697 | |||||||||
2,500 | 32,255 | |||||||||
Total (Cost $120,480) | 142,952 | |||||||||
Brazil – 2.1% | ||||||||||
†Duratex | 3,700 | 105,495 | ||||||||
†GP Investments BDR | 5,600 | 246,731 | ||||||||
Total (Cost $280,666) | 352,226 | |||||||||
British West Indies – 1.1% | ||||||||||
22,000 | 181,500 | |||||||||
Total (Cost $179,002) | 181,500 | |||||||||
Canada – 18.0% | ||||||||||
†Agnico-Eagle Mines | 7,000 | 255,500 | ||||||||
†Ensign Energy Services | 20,800 | 370,993 | ||||||||
26,000 | 309,400 | |||||||||
21,000 | 94,034 | |||||||||
21,000 | 265,020 | |||||||||
12,000 | 170,880 | |||||||||
43,000 | 33,908 | |||||||||
6,000 | 157,980 | |||||||||
†Pason Systems | 7,600 | 119,003 | ||||||||
44,800 | 222,896 | |||||||||
10,000 | 343,700 | |||||||||
13,700 | 232,138 | |||||||||
5,000 | 157,750 | |||||||||
†Trican Well Service | 15,000 | 305,421 | ||||||||
Total (Cost $3,027,453) | 3,038,623 | |||||||||
Cayman Islands – 1.6% | ||||||||||
†Endeavour Mining Capital | 30,400 | 273,393 | ||||||||
Total (Cost $255,185) | 273,393 | |||||||||
Finland – 2.4% | ||||||||||
†CapMan Cl. B | 54,000 | 294,538 | ||||||||
†Vaisala Cl. A | 2,100 | 110,847 | ||||||||
Total (Cost $359,177) | 405,385 | |||||||||
France – 4.1% | ||||||||||
7,500 | 295,593 | |||||||||
†Beneteau | 1,100 | 149,832 | ||||||||
†Exel Industries Cl. A | 200 | 24,635 | ||||||||
†Manitou BF | 3,500 | 223,590 | ||||||||
Total (Cost $642,440) | 693,650 | |||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 89 |
Schedules of Investments
Royce International Value Fund (continued) |
SHARES | VALUE | SHARES | VALUE | |||||||||
Germany – 4.5% | TOTAL COMMON STOCKS | |||||||||||
†Deutsche Beteiligungs | 1,600 | $ | 64,966 | (Cost $11,514,361) | $ | 11,857,165 | ||||||
†Pfeiffer Vacuum Technology | 2,500 | 241,083 | ||||||||||
†Rational | 1,100 | 215,652 | PREFERRED STOCK – 0.2% | |||||||||
†Takkt | 14,000 | 249,928 | Brazil – 0.2% | |||||||||
1,100 | 31,649 | |||||||||||
Total (Cost $752,409) | 771,629 | |||||||||||
TOTAL PREFERRED STOCK | ||||||||||||
Ireland – 0.9% | (Cost $30,991) | 31,649 | ||||||||||
7,000 | 153,510 | |||||||||||
REPURCHASE AGREEMENT – 26.1% | ||||||||||||
Total (Cost $126,473) | 153,510 | State Street Bank & Trust Company, | ||||||||||
4.80% dated 6/29/07, due 7/2/07, | ||||||||||||
Italy – 1.3% | maturity value $4,405,762 (collateralized | |||||||||||
†Anima Sgrpa | 50,000 | 225,180 | by obligations of various U.S. Government | |||||||||
Agencies, valued at $4,516,503) | ||||||||||||
Total (Cost $243,129) | 225,180 | (Cost $4,404,000) | 4,404,000 | |||||||||
Japan – 1.5% | TOTAL INVESTMENTS – 96.4% | |||||||||||
†Ichiyoshi Securities | 8,300 | 120,262 | (Cost $15,949,352) | 16,292,814 | ||||||||
†Mito Securities | 32,500 | 140,162 | ||||||||||
CASH AND OTHER ASSETS | ||||||||||||
Total (Cost $282,652) | 260,424 | LESS LIABILITIES – 3.6% | 609,026 | |||||||||
Mexico – 1.1% | ||||||||||||
43,000 | 180,701 | NET ASSETS – 100.0% | $ | 16,901,840 | ||||||||
Total (Cost $193,608) | 180,701 | |||||||||||
Norway – 0.8% | ||||||||||||
†Ekornes | 6,000 | 136,850 | ||||||||||
Total (Cost $138,069) | 136,850 | |||||||||||
South Africa – 1.0% | ||||||||||||
20,700 | 164,201 | |||||||||||
Total (Cost $114,460) | 164,201 | |||||||||||
Turkey – 1.1% | ||||||||||||
75,000 | 180,571 | |||||||||||
Total (Cost $180,367) | 180,571 | |||||||||||
United Kingdom – 1.8% | ||||||||||||
†Umbro | 95,000 | 300,462 | ||||||||||
Total (Cost $324,895) | 300,462 | |||||||||||
United States – 22.4% | ||||||||||||
†Chaparral Steel | 3,500 | 251,545 | ||||||||||
†Dynamic Materials | 5,700 | 213,750 | ||||||||||
6,400 | 188,736 | |||||||||||
6,100 | 259,555 | |||||||||||
†IPSCO | 600 | 95,328 | ||||||||||
†Kennametal | 1,600 | 131,248 | ||||||||||
26,980 | 447,868 | |||||||||||
11,700 | 176,787 | |||||||||||
15,600 | 50,076 | |||||||||||
†Lincoln Electric Holdings | 5,500 | 408,320 | ||||||||||
†Metal Management | 12,000 | 528,840 | ||||||||||
†Nu Skin Enterprises Cl. A | 5,000 | 82,500 | ||||||||||
18,000 | 204,300 | |||||||||||
†Reliance Steel & Aluminum | 6,000 | 337,560 | ||||||||||
†Schnitzer Steel Industries Cl. A | 5,000 | 239,700 | ||||||||||
†Woodward Governor | 3,300 | 177,111 | ||||||||||
Total (Cost $3,688,220) | 3,793,224 | |||||||||||
90 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce International Smaller-Companies Fund |
SHARES | VALUE | SHARES | VALUE | |||||||||
COMMON STOCKS – 67.4% | Italy – 6.4% | |||||||||||
†Anima Sgrpa | 17,000 | $ | 76,561 | |||||||||
Austria – 4.1% | †Bulgari | 3,000 | 48,359 | |||||||||
†Mayr-Melnhof Karton | 500 | $ | 113,812 | †Emak | 3,900 | 32,647 | ||||||
†Semperit AG Holding | 2,000 | 86,079 | †Guala Closures | 6,800 | 54,162 | |||||||
†Nice | 6,000 | 51,810 | ||||||||||
Total (Cost $193,822) | 199,891 | †Panariagroup Industrie Ceramiche | 4,500 | 44,339 | ||||||||
Belgium – 3.8% | Total (Cost $296,482) | 307,878 | ||||||||||
3,500 | 69,682 | |||||||||||
†Van De Velde | 2,200 | 114,012 | Netherlands – 0.5% | |||||||||
†Boskalis Westminster | 600 | 23,964 | ||||||||||
Total (Cost $175,410) | 183,694 | |||||||||||
Total (Cost $18,270) | 23,964 | |||||||||||
Denmark – 0.5% | ||||||||||||
†Coloplast Cl. B | 300 | 24,416 | Norway – 2.2% | |||||||||
†Ekornes | 4,000 | 91,234 | ||||||||||
Total (Cost $25,713) | 24,416 | †Tandberg | 700 | 15,758 | ||||||||
Finland – 5.5% | Total (Cost $102,764) | 106,992 | ||||||||||
†CapMan Cl. B | 22,300 | 121,633 | ||||||||||
†Vacon | 1,500 | 64,458 | Sweden – 2.4% | |||||||||
†Vaisala Cl. A | 1,500 | 79,177 | †Husqvarna Cl. A | 390 | 5,560 | |||||||
†Husqvarna Cl. B | 1,300 | 18,533 | ||||||||||
Total (Cost $231,677) | 265,268 | †Munters | 6,000 | 94,309 | ||||||||
France – 12.7% | Total (Cost $112,590) | 118,402 | ||||||||||
2,700 | 106,414 | |||||||||||
†Beneteau | 500 | 68,106 | Switzerland – 0.4% | |||||||||
†Boiron | 1,400 | 47,162 | †Phonak Holding | 200 | 18,011 | |||||||
†Exel Industries Cl. A | 250 | 30,794 | ||||||||||
†LaCie | 3,500 | 34,960 | Total (Cost $15,815) | 18,011 | ||||||||
†Manitou BF | 1,900 | 121,377 | ||||||||||
†Neurones | 2,400 | 18,190 | Turkey – 1.0% | |||||||||
†Piscines Desjoyaux | 500 | 60,228 | 20,000 | 48,152 | ||||||||
†Somfy | 200 | 65,290 | ||||||||||
†Trigano | 1,000 | 59,349 | Total (Cost $48,056) | 48,152 | ||||||||
Total (Cost $568,858) | 611,870 | United Kingdom – 12.2% | ||||||||||
†Aero Inventory | 7,500 | 71,652 | ||||||||||
Germany – 15.1% | †Bloomsbury Publishing | 2,200 | 8,747 | |||||||||
†AS Creation Tapeten | 800 | 54,279 | †Candover Investments | 1,000 | 40,664 | |||||||
†Deutsche Beteiligungs | 900 | 36,543 | †Clinton Cards | 8,700 | 11,137 | |||||||
†ElringKlinger | 600 | 54,855 | †Diploma | 4,500 | 81,599 | |||||||
†Fielmann | 600 | 38,005 | †F&C Asset Management | 12,000 | 44,399 | |||||||
†Hugo Boss | 600 | 39,377 | †Games Workshop Group | 2,300 | 13,533 | |||||||
†Pfeiffer Vacuum Technology | 1,000 | 96,433 | †Haynes Publishing Group | 6,000 | 39,459 | |||||||
†Progress-Werk Oberkirch | 1,200 | 57,170 | †Jessops | 4,400 | 1,392 | |||||||
†Rational | 400 | 78,419 | †Michael Page International | 7,000 | 73,868 | |||||||
†Sartorius | 900 | 54,681 | †New Star Asset Management Group | 2,800 | 25,415 | |||||||
†Takkt | 7,000 | 124,964 | 10,000 | 25,503 | ||||||||
†Technotrans | 1,100 | 35,731 | †Rotork | 1,524 | 27,941 | |||||||
†Viscom | 3,500 | 57,319 | †Umbro | 32,000 | 101,208 | |||||||
3,400 | 20,705 | |||||||||||
Total (Cost $684,861) | 727,776 | |||||||||||
Total (Cost $580,050) | 587,222 | |||||||||||
Ireland – 0.6% | ||||||||||||
†Abbey | 2,200 | 30,466 | TOTAL COMMON STOCKS | |||||||||
(Cost $3,087,348) | 3,254,002 | |||||||||||
Total (Cost $32,980) | 30,466 | |||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 91 |
Schedules of Investments | June 30, 2007 (unaudited) |
Royce International Smaller-Companies Fund (continued) |
VALUE | ||||||||||||
REPURCHASE AGREEMENT – 29.3% | ||||||||||||
State Street Bank & Trust Company, 4.80% dated 6/29/07, due 7/2/07, maturity value $1,412,565 (collateralized by obligations of various U.S. Government Agencies, valued at $1,451,733) (Cost $1,412,000) | $ | 1,412,000 | ||||||||||
TOTAL INVESTMENTS – 96.7% | ||||||||||||
(Cost $4,499,348) | 4,666,002 | |||||||||||
CASH AND OTHER ASSETS | ||||||||||||
LESS LIABILITIES – 3.3% | 158,006 | |||||||||||
NET ASSETS – 100.0% | $ | 4,824,008 | ||||||||||
92 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Statements of Assets and Liabilities | June 30, 2007 (unaudited) | |
Pennsylvania | Royce | Royce | Royce | |||||||||||||
Mutual | Micro-Cap | Premier | Low-Priced | |||||||||||||
Fund | Fund | Fund | Stock Fund | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at value | ||||||||||||||||
(including collateral on loaned securities)* | ||||||||||||||||
Non-Affiliates | $ | 4,510,261,884 | $ | 986,018,413 | $ | 2,821,581,041 | $ | 3,792,090,852 | ||||||||
Affiliated Companies | 128,402,597 | 5,628,660 | 1,459,794,311 | 603,196,174 | ||||||||||||
Repurchase agreements (at cost and value) | 303,469,000 | 141,776,000 | 759,233,000 | 732,669,000 | ||||||||||||
Cash and foreign currency | 150,455 | 106,673 | 125,880 | 243,351 | ||||||||||||
Receivable for investments sold | 7,378,879 | 11,956,128 | – | 27,811,005 | ||||||||||||
Receivable for capital shares sold | 15,590,114 | 816,435 | 3,774,525 | 269,148,972 | ||||||||||||
Receivable for dividends and interest | 2,535,158 | 796,422 | 2,139,233 | 2,924,255 | ||||||||||||
Prepaid expenses and other assets | 889,037 | 5,729 | 31,602 | 30,173 | ||||||||||||
Total Assets | 4,968,677,124 | 1,147,104,460 | 5,046,679,592 | 5,428,113,782 | ||||||||||||
LIABILITIES: | ||||||||||||||||
Payable for collateral on loaned securities | 97,678,729 | 139,210,551 | 13,700,671 | 70,692,882 | ||||||||||||
Payable for investments purchased | 27,764,981 | 8,089,455 | 3,084,870 | 17,210,879 | ||||||||||||
Payable for capital shares redeemed | 2,741,304 | 443,585 | 2,325,853 | 283,994,104 | ||||||||||||
Payable for investment advisory fees | 2,995,368 | 1,063,327 | 3,994,012 | 4,669,756 | ||||||||||||
Accrued expenses | 1,301,138 | 338,838 | 1,401,534 | 1,413,320 | ||||||||||||
Total Liabilities | 132,481,520 | 149,145,756 | 24,506,940 | 377,980,941 | ||||||||||||
Net Assets | $ | 4,836,195,604 | $ | 997,958,704 | $ | 5,022,172,652 | $ | 5,050,132,841 | ||||||||
ANALYSIS OF NET ASSETS: | ||||||||||||||||
Paid-in capital | $ | 3,511,859,644 | $ | 688,718,100 | $ | 2,971,227,644 | $ | 3,410,143,795 | ||||||||
Undistributed net investment income (loss) | 1,132,611 | (11,879,407 | ) | (8,121,517 | ) | (44,468,095 | ) | |||||||||
Accumulated net realized gain (loss) on investments and foreign currency | 282,442,561 | 105,336,490 | 435,276,063 | 376,926,591 | ||||||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 1,040,760,788 | 215,783,521 | 1,623,790,462 | 1,307,530,550 | ||||||||||||
Net Assets | $ | 4,836,195,604 | $ | 997,958,704 | $ | 5,022,172,652 | $ | 5,050,132,841 | ||||||||
Investment Class | $ | 3,487,958,293 | $ | 740,786,025 | $ | 3,957,545,393 | $ | 1,436,078 | ||||||||
Service Class | 59,485,706 | 25,678,985 | 242,523,637 | 4,116,956,473 | ||||||||||||
Consultant Class | 1,288,651,546 | 231,493,694 | 55,738,320 | |||||||||||||
Institutional Class | 437,874,757 | 931,641,257 | ||||||||||||||
W Class | 328,391,308 | |||||||||||||||
R Class | 100,059 | 99,237 | 99,033 | |||||||||||||
SHARES OUTSTANDING: | ||||||||||||||||
(unlimited number of $.001 par value shares authorized for each Fund) | ||||||||||||||||
Investment Class | 274,097,984 | 38,762,471 | 195,583,551 | 77,537 | ||||||||||||
Service Class | 4,696,570 | 1,350,857 | 12,065,083 | 222,473,797 | ||||||||||||
Consultant Class | 108,127,631 | 13,027,803 | 2,883,178 | |||||||||||||
Institutional Class | 21,570,243 | 50,285,686 | ||||||||||||||
W Class | 16,221,997 | |||||||||||||||
R Class | 7,868 | 4,907 | 5,350 | |||||||||||||
NET ASSET VALUES: | ||||||||||||||||
(Net Assets ÷ Shares Outstanding) | ||||||||||||||||
Investment Class (1) | $12.73 | $19.11 | $20.23 | $18.52 | ||||||||||||
Service Class (1) | 12.67 | 19.01 | 20.10 | 18.51 | ||||||||||||
Consultant Class (1) | 11.92 | 17.77 | 19.33 | |||||||||||||
Institutional Class (2) | 20.30 | 18.53 | ||||||||||||||
W Class (2) | 20.24 | |||||||||||||||
R Class (1) | 12.72 | 20.22 | 18.51 | |||||||||||||
* Investments at identified cost | $ | 3,597,905,996 | $ | 775,856,599 | $ | 2,657,589,771 | $ | 3,087,761,328 | ||||||||
Market value of loaned securities | 92,294,479 | 133,890,556 | 13,338,997 | 67,311,759 |
(1) | Offering and redemption price per share; shares redeemed within six months of purchase are subject to a 1% redemption fee, payable to the Fund. | |
(2) | Offering and redemption price per share. |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 93 |
Statements of Assets and Liabilities |
Royce | Royce | Royce | Royce | |||||||||||||
Total Return | Heritage | Opportunity | Special Equity | |||||||||||||
Fund | Fund | Fund | Fund | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at value (including collateral on loaned securities)* | ||||||||||||||||
Non-Affiliates | $ | 5,969,761,797 | $ | 131,473,699 | $ | 2,789,744,866 | $ | 528,881,112 | ||||||||
Affiliated Companies | 128,836,086 | – | 159,724,586 | 88,553,159 | ||||||||||||
Repurchase agreements (at cost and value) | 285,596,000 | 13,203,000 | 158,888,000 | 41,425,000 | ||||||||||||
Cash and foreign currency | 2,067,865 | 2,856 | 473 | 97,397 | ||||||||||||
Receivable for investments sold | 6,543,662 | 1,939,008 | 29,441,065 | 1,042,066 | ||||||||||||
Receivable for capital shares sold | 14,237,520 | 104,376 | 4,920,247 | 1,312,056 | ||||||||||||
Receivable for dividends and interest | 10,300,384 | 57,064 | 794,149 | 392,498 | ||||||||||||
Prepaid expenses and other assets | 40,878 | 497 | 14,818 | 4,427 | ||||||||||||
Total Assets | 6,417,384,192 | 146,780,500 | 3,143,528,204 | 661,707,715 | ||||||||||||
LIABILITIES: | ||||||||||||||||
Payable for collateral on loaned securities | 22,423,735 | 27,039,273 | 353,413,318 | 2,085,900 | ||||||||||||
Payable for investments purchased | 17,119,220 | 253,835 | 7,544,747 | 4,130,541 | ||||||||||||
Payable for capital shares redeemed | 24,213,040 | 63,248 | 2,853,775 | 279,086 | ||||||||||||
Payable for investment advisory fees | 5,031,219 | 98,275 | 2,240,104 | 533,224 | ||||||||||||
Accrued expenses | 1,859,494 | 47,689 | 624,798 | 145,582 | ||||||||||||
Total Liabilities | 70,646,708 | 27,502,320 | 366,676,742 | 7,174,333 | ||||||||||||
Net Assets | $ | 6,346,737,484 | $ | 119,278,180 | $ | 2,776,851,462 | $ | 654,533,382 | ||||||||
ANALYSIS OF NET ASSETS: | ||||||||||||||||
Paid-in capital | $ | 4,207,765,912 | $ | 92,198,192 | $ | 2,056,215,272 | $ | 402,183,762 | ||||||||
Undistributed net investment income (loss) | 24,708,135 | 114,864 | 13,127,112 | 2,161,617 | ||||||||||||
Accumulated net realized gain (loss) on investments and foreign currency | 311,284,155 | 8,122,935 | 196,576,872 | 54,813,827 | ||||||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 1,802,979,282 | 18,842,189 | 510,932,206 | 195,374,176 | ||||||||||||
Net Assets | $ | 6,346,737,484 | $ | 119,278,180 | $ | 2,776,851,462 | $ | 654,533,382 | ||||||||
Investment Class | $ | 4,700,369,013 | $ | 324,267 | $ | 1,981,617,521 | $ | 476,199,192 | ||||||||
Service Class | 342,829,536 | 113,540,444 | 350,011,866 | 2,325,541 | ||||||||||||
Consultant Class | 735,986,111 | 5,413,469 | 9,456,762 | 17,681,520 | ||||||||||||
Institutional Class | 307,954,388 | 435,663,500 | 158,327,129 | |||||||||||||
W Class | 259,498,299 | |||||||||||||||
R Class | 100,137 | 101,813 | ||||||||||||||
SHARES OUTSTANDING: | ||||||||||||||||
(unlimited number of $.001 par value shares authorized for each Fund) | ||||||||||||||||
Investment Class | 315,969,150 | 21,418 | 134,827,862 | 21,708,787 | ||||||||||||
Service Class | 23,276,055 | 7,496,619 | 24,248,770 | 106,004 | ||||||||||||
Consultant Class | 49,556,321 | 406,062 | 655,021 | 822,245 | ||||||||||||
Institutional Class | 20,660,008 | 29,476,105 | 7,230,668 | |||||||||||||
W Class | 17,423,070 | |||||||||||||||
R Class | 6,720 | 6,930 | ||||||||||||||
NET ASSET VALUES: | ||||||||||||||||
(Net Assets ÷ Shares Outstanding) | ||||||||||||||||
Investment Class (1) | $14.88 | $15.14 | $14.70 | $21.94 | ||||||||||||
Service Class (1) | 14.73 | 15.15 | 14.43 | 21.94 | ||||||||||||
Consultant Class (1) | 14.85 | 13.33 | 14.44 | 21.50 | ||||||||||||
Institutional Class (2) | 14.91 | 14.78 | 21.90 | |||||||||||||
W Class (2) | 14.89 | |||||||||||||||
R Class (1) | 14.90 | 14.69 | ||||||||||||||
* Investments at identified cost | $ | 4,295,681,759 | $ | 112,631,510 | $ | 2,438,538,070 | $ | 422,060,095 | ||||||||
Market value of loaned securities | 21,223,722 | 26,308,561 | 341,148,630 | 2,017,597 |
(1) | Offering and redemption price per share; shares redeemed within six months of purchase are subject to a 1% redemption fee, payable to the Fund. | |
(2) | Offering and redemption price per share. |
94 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited) |
Royce | Royce | Royce | Royce | |||||||||||||
Value | Value Plus | Technology | 100 | |||||||||||||
Fund | Fund | Value Fund | Fund | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at value | ||||||||||||||||
(including collateral on loaned securities)* | ||||||||||||||||
Non-Affiliates | $ | 928,933,292 | $ | 2,520,256,158 | $ | 16,895,588 | $ | 32,539,025 | ||||||||
Affiliated Companies | – | 305,284,949 | – | – | ||||||||||||
Repurchase agreements (at cost and value) | 81,160,000 | 293,658,000 | 3,793,000 | 5,168,000 | ||||||||||||
Cash and foreign currency | 12,324 | 538 | 154,688 | 437 | ||||||||||||
Receivable for investments sold | 546,171 | 12,833,698 | 1,099,463 | – | ||||||||||||
Receivable for capital shares sold | 6,252,657 | 20,137,118 | 25,925 | 55,924 | ||||||||||||
Receivable for dividends and interest | 368,126 | 819,860 | 2,175 | 18,164 | ||||||||||||
Prepaid expenses and other assets | 2,101 | 4,684 | 182 | 172 | ||||||||||||
Total Assets | 1,017,274,671 | 3,152,995,005 | 21,971,021 | 37,781,722 | ||||||||||||
LIABILITIES: | ||||||||||||||||
Payable for collateral on loaned securities | 118,053,793 | 367,265,028 | – | – | ||||||||||||
Payable for investments purchased | 3,492,945 | 23,153,683 | 1,078,952 | 42,953 | ||||||||||||
Payable for capital shares redeemed | 751,417 | 1,984,672 | – | 4,973 | ||||||||||||
Payable for investment advisory fees | 728,970 | 2,179,160 | 19,416 | 31,077 | ||||||||||||
Accrued expenses | 168,135 | 620,518 | 9,137 | 14,278 | ||||||||||||
Total Liabilities | 123,195,260 | 395,203,061 | 1,107,505 | 93,281 | ||||||||||||
Net Assets | $ | 894,079,411 | $ | 2,757,791,944 | $ | 20,863,516 | $ | 37,688,441 | ||||||||
ANALYSIS OF NET ASSETS: | ||||||||||||||||
Paid-in capital | $ | 752,814,934 | $ | 2,345,694,943 | $ | 19,270,054 | $ | 29,211,204 | ||||||||
Undistributed net investment income (loss) | (590,045 | ) | (8,681,535 | ) | (97,139 | ) | 8,041 | |||||||||
Accumulated net realized gain (loss) on investments and foreign currency | 35,697,059 | 125,490,582 | 999,300 | 2,543,956 | ||||||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 106,157,463 | 295,287,954 | 691,301 | 5,925,240 | ||||||||||||
Net Assets | $ | 894,079,411 | $ | 2,757,791,944 | $ | 20,863,516 | $ | 37,688,441 | ||||||||
Investment Class | $ | 4,093,572 | $ | 5,662,364 | $ | 949,576 | ||||||||||
Service Class | 690,779,936 | 2,631,632,296 | $ | 20,863,516 | 36,738,865 | |||||||||||
Consultant Class | 10,229,179 | 38,803,259 | ||||||||||||||
Institutional Class | 188,976,724 | 81,694,025 | ||||||||||||||
SHARES OUTSTANDING: | ||||||||||||||||
(unlimited number of $.001 par value shares authorized for each Fund) | ||||||||||||||||
Investment Class | 325,633 | 356,007 | 103,535 | |||||||||||||
Service Class | 54,985,655 | 165,661,308 | 2,932,262 | 4,009,240 | ||||||||||||
Consultant Class | 825,025 | 2,474,509 | ||||||||||||||
Institutional Class | 15,059,340 | 5,139,847 | ||||||||||||||
NET ASSET VALUES: | ||||||||||||||||
(Net Assets ÷ Shares Outstanding) | ||||||||||||||||
Investment Class (1) | $12.57 | $15.91 | $9.17 | |||||||||||||
Service Class (1) | 12.56 | 15.89 | $7.12 | 9.16 | ||||||||||||
Consultant Class (1) | 12.40 | 15.68 | ||||||||||||||
Institutional Class (2) | 12.55 | 15.89 | ||||||||||||||
* Investments at identified cost | $ | 822,776,421 | $ | 2,530,254,539 | $ | 16,204,288 | $ | 26,613,804 | ||||||||
Market value of loaned securities | 114,684,410 | 355,261,315 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 95 |
Statements of Assets and Liabilities | ||
Royce | Royce | Royce | ||||||||||||||
Discovery | Financial | Dividend | ||||||||||||||
Fund | Services Fund | Value Fund | ||||||||||||||
ASSETS: | ||||||||||||||||
Investments at value* | ||||||||||||||||
Non-Affiliates | $ | 4,239,317 | $ | 4,491,619 | $ | 7,852,506 | ||||||||||
Repurchase agreements (at cost and value) | 224,000 | 1,171,000 | 595,000 | |||||||||||||
Cash and foreign currency | 461 | 879 | 473 | |||||||||||||
Receivable for investments sold | – | – | 10,863 | |||||||||||||
Receivable for capital shares sold | 15,200 | 500 | 8,736 | |||||||||||||
Receivable for dividends and interest | 6,504 | 8,780 | 20,285 | |||||||||||||
Prepaid expenses and other assets | 27 | 16 | 30 | |||||||||||||
Total Assets | 4,485,509 | 5,672,794 | 8,487,893 | |||||||||||||
LIABILITIES: | ||||||||||||||||
Payable for investments purchased | – | 245,831 | 10,947 | |||||||||||||
Payable for capital shares redeemed | 303 | – | 14 | |||||||||||||
Payable for investment advisory fees | – | 2,473 | 5,414 | |||||||||||||
Accrued expenses | 15,975 | 9,270 | 9,104 | |||||||||||||
Total Liabilities | 16,278 | 257,574 | 25,479 | |||||||||||||
Net Assets | $ | 4,469,231 | $ | 5,415,220 | $ | 8,462,414 | ||||||||||
ANALYSIS OF NET ASSETS: | ||||||||||||||||
Paid-in capital | $ | 3,732,476 | $ | 4,635,839 | $ | 6,994,958 | ||||||||||
Undistributed net investment income (loss) | (12,208 | ) | 39,008 | 52,645 | ||||||||||||
Accumulated net realized gain (loss) on investments and foreign currency | 374,289 | 123,959 | 654,909 | |||||||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 374,674 | 616,414 | 759,902 | |||||||||||||
Net Assets | $ | 4,469,231 | $ | 5,415,220 | $ | 8,462,414 | ||||||||||
Service Class | $ | 4,469,231 | $ | 5,415,220 | $ | 8,462,414 | ||||||||||
SHARES OUTSTANDING: | ||||||||||||||||
(unlimited number of $.001 par value shares authorized for each Fund) Service Class | 643,609 | 724,240 | 1,155,349 | |||||||||||||
NET ASSET VALUES: | ||||||||||||||||
(Net Assets ÷ Shares Outstanding) | ||||||||||||||||
Service Class (1) | $6.94 | $7.48 | $7.32 | |||||||||||||
* Investments at identified cost | $ | 3,864,643 | $ | 3,875,209 | $ | 7,092,610 |
(1) | Offering and redemption price per share; shares redeemed within six months of purchase are subject to a 1% redemption fee, payable to the Fund. |
96 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2007 (unaudited) |
Royce | Royce | |||||||||||||||
International | International Smaller- | |||||||||||||||
Value Fund | Companies Fund | |||||||||||||||
ASSETS: | ||||||||||||||||
Investments at value* | ||||||||||||||||
Non-Affiliates | $ | 11,888,814 | $ | 3,254,002 | ||||||||||||
Repurchase agreements (at cost and value) | 4,404,000 | 1,412,000 | ||||||||||||||
Cash and foreign currency | 2,539 | 311 | ||||||||||||||
Receivable for capital shares sold | 963,808 | 148,647 | ||||||||||||||
Receivable for dividends and interest | 6,074 | 2,747 | ||||||||||||||
Prepaid expenses and other assets | 14,808 | 14,811 | ||||||||||||||
Total Assets | 17,280,043 | 4,832,518 | ||||||||||||||
LIABILITIES: | ||||||||||||||||
Payable for investments purchased | 355,204 | 282 | ||||||||||||||
Payable for capital shares redeemed | – | – | ||||||||||||||
Payable for investment advisory fees | 14,700 | – | ||||||||||||||
Accrued expenses | 8,299 | 8,228 | ||||||||||||||
Total Liabilities | 378,203 | 8,510 | ||||||||||||||
Net Assets | $ | 16,901,840 | $ | 4,824,008 | ||||||||||||
ANALYSIS OF NET ASSETS: | ||||||||||||||||
Paid-in capital | $ | 16,528,797 | $ | 4,600,867 | ||||||||||||
Undistributed net investment income (loss) | (11,418 | ) | 17,478 | |||||||||||||
Accumulated net realized gain (loss) on investments and foreign currency | 40,985 | 39,002 | ||||||||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 343,476 | 166,661 | ||||||||||||||
Net Assets | $ | 16,901,840 | $ | 4,824,008 | ||||||||||||
Service Class | $ | 16,901,840 | $ | 4,824,008 | ||||||||||||
SHARES OUTSTANDING: | ||||||||||||||||
(unlimited number of $.001 par value shares authorized for each Fund) Service Class | 1,459,846 | 437,213 | ||||||||||||||
NET ASSET VALUES: | ||||||||||||||||
(Net Assets ÷ Shares Outstanding) | ||||||||||||||||
Service Class (1) | $11.58 | $11.03 | ||||||||||||||
* Investments at identified cost | $ | 11,545,352 | $ | 3,087,348 |
(1) | Offering and redemption price per share; shares redeemed within six months of purchase are subject to a 1% redemption fee, payable to the Fund. |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 97 |
Statements of Changes in Net Assets |
Pennsylvania Mutual Fund | Royce Micro-Cap Fund | Royce Premier Fund | ||||||||||||||||||||||||||||
Six months ended | Six months ended | Six months ended | ||||||||||||||||||||||||||||
6/30/07 | Year ended | 6/30/07 | Year ended | 6/30/07 | Year ended | |||||||||||||||||||||||||
(unaudited) | 12/31/06 | (unaudited) | 12/31/06 | (unaudited) | 12/31/06 | |||||||||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||||||||
Net investment income (loss) | $ | 6,375,969 | $ | 3,124,579 | $ | (1,149,412 | ) | $ | (4,661,873 | ) | $ | 1,928,791 | $ | 7,605,840 | ||||||||||||||||
Net realized gain (loss) on investments and foreign currency | 223,269,770 | 303,312,402 | 81,004,433 | 121,801,397 | 359,642,622 | 209,556,231 | ||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | 187,031,213 | 152,260,760 | 11,182,558 | 39,530,655 | 280,928,187 | 139,544,353 | ||||||||||||||||||||||||
Net increase (decrease) in net assets from investment operations | 416,676,952 | 458,697,741 | 91,037,579 | 156,670,179 | 642,499,600 | 356,706,424 | ||||||||||||||||||||||||
DISTRIBUTIONS: | ||||||||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||||||
Investment Class | – | (8,666,310 | ) | – | (10,229,702 | ) | – | (15,065,087 | ) | |||||||||||||||||||||
Service Class | – | (112,018 | ) | – | (96,125 | ) | – | (445,228 | ) | |||||||||||||||||||||
Consultant Class | – | – | – | (1,474,554 | ) | – | – | |||||||||||||||||||||||
Institutional Class | – | (1,219,250 | ) | |||||||||||||||||||||||||||
W Class | – | (1,248,982 | ) | |||||||||||||||||||||||||||
R Class | – | – | ||||||||||||||||||||||||||||
Net realized gain on investments and foreign currency | ||||||||||||||||||||||||||||||
Investment Class | – | (178,399,126 | ) | – | (64,622,164 | ) | – | (129,214,858 | ) | |||||||||||||||||||||
Service Class | – | (2,503,926 | ) | – | (666,510 | ) | – | (6,749,418 | ) | |||||||||||||||||||||
Consultant Class | – | (76,941,898 | ) | – | (22,098,628 | ) | – | (1,829,813 | ) | |||||||||||||||||||||
Institutional Class | – | (8,529,310 | ) | |||||||||||||||||||||||||||
W Class | – | (10,289,309 | ) | |||||||||||||||||||||||||||
R Class | – | – | ||||||||||||||||||||||||||||
Total distributions | – | (266,623,278 | ) | – | (99,187,683 | ) | – | (174,591,255 | ) | |||||||||||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||||||||
Value of shares sold | ||||||||||||||||||||||||||||||
Investment Class | 587,414,264 | 1,201,978,144 | 73,382,985 | 211,152,681 | 231,424,659 | 820,732,534 | ||||||||||||||||||||||||
Service Class | 23,050,714 | 41,460,068 | 19,189,059 | 5,988,190 | 55,804,502 | 113,247,042 | ||||||||||||||||||||||||
Consultant Class | 108,292,322 | 281,344,214 | 7,080,701 | 46,980,025 | 2,156,379 | 11,613,727 | ||||||||||||||||||||||||
Institutional Class | 61,446,141 | 202,179,749 | ||||||||||||||||||||||||||||
W Class | 9,606,756 | 34,834,895 | ||||||||||||||||||||||||||||
R Class | 100,000 | 100,000 | ||||||||||||||||||||||||||||
Distributions reinvested | ||||||||||||||||||||||||||||||
Investment Class | – | 150,746,233 | – | 69,445,926 | – | 134,752,804 | ||||||||||||||||||||||||
Service Class | – | 2,615,479 | – | 762,629 | – | 7,158,489 | ||||||||||||||||||||||||
Consultant Class | – | 75,115,893 | – | 22,843,982 | – | 1,774,993 | ||||||||||||||||||||||||
Institutional Class | – | 8,425,863 | ||||||||||||||||||||||||||||
W Class | – | 10,770,134 | ||||||||||||||||||||||||||||
R Class | – | – | ||||||||||||||||||||||||||||
Value of shares redeemed | ||||||||||||||||||||||||||||||
Investment Class | (268,888,265 | ) | (487,118,810 | ) | (84,018,093 | ) | (139,673,360 | ) | (414,176,680 | ) | (860,640,681 | ) | ||||||||||||||||||
Service Class | (8,466,713 | ) | (4,265,946 | ) | (2,297,753 | ) | (2,131,444 | ) | (35,426,476 | ) | (68,352,065 | ) | ||||||||||||||||||
Consultant Class | (92,989,524 | ) | (152,133,742 | ) | (17,882,799 | ) | (35,222,706 | ) | (4,250,096 | ) | (11,805,167 | ) | ||||||||||||||||||
Institutional Class | (31,852,805 | ) | (100,573,649 | ) | ||||||||||||||||||||||||||
W Class | (23,222,380 | ) | (42,801,516 | ) | ||||||||||||||||||||||||||
R Class | – | – | ||||||||||||||||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||||||||
Investment Class | 103,300 | 224,400 | 19,460 | 103,835 | 62,226 | 231,832 | ||||||||||||||||||||||||
Service Class | 426 | – | – | 28 | 13,621 | 10,651 | ||||||||||||||||||||||||
Consultant Class | 25,879 | 90,736 | 2,481 | 36,783 | 341 | 7,778 | ||||||||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 348,642,403 | 1,110,056,669 | (4,523,959 | ) | 180,286,569 | (148,313,812 | ) | 261,567,413 | ||||||||||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS | 765,319,355 | 1,302,131,132 | 86,513,620 | 237,769,065 | 494,185,788 | 443,682,582 | ||||||||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||||||||
Beginning of period | 4,070,876,249 | 2,768,745,117 | 911,445,084 | 673,676,019 | 4,527,986,864 | 4,084,304,282 | ||||||||||||||||||||||||
End of period | $ | 4,836,195,604 | $ | 4,070,876,249 | $ | 997,958,704 | $ | 911,445,084 | $ | 5,022,172,652 | $ | 4,527,986,864 | ||||||||||||||||||
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) AT END OF PERIOD | $ | 1,132,611 | $ | (5,243,358 | ) | $ | (11,879,407 | ) | $ | (10,729,995 | ) | $ | (8,121,517 | ) | $ | (10,050,308 | ) |
98 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce Low-Priced Stock Fund | Royce Total Return Fund | Royce Heritage Fund | ||||||||||||||||||||||
Six months ended | Six months ended | Six months ended | ||||||||||||||||||||||
6/30/07 | Year ended | 6/30/07 | Year ended | 6/30/07 | Year ended | |||||||||||||||||||
(unaudited) | 12/31/06 | (unaudited) | 12/31/06 | (unaudited) | 12/31/06 | |||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) | $ | (1,907,670 | ) | �� | $ | (14,978,296 | ) | $ | 38,886,492 | $ | 70,275,480 | $ | (11,136 | ) | $ | 6,096 | ||||||||
Net realized gain (loss) on investments and foreign currency | 309,964,779 | 409,065,375 | 214,938,100 | 299,391,274 | 6,426,958 | 8,653,636 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | 156,044,977 | 343,628,581 | 275,075,626 | 402,615,402 | 1,602,424 | 6,296,476 | ||||||||||||||||||
Net increase (decrease) in net assets from investment operations | 464,102,086 | 737,715,660 | 528,900,218 | 772,282,156 | 8,018,246 | 14,956,208 | ||||||||||||||||||
DISTRIBUTIONS: | ||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||
Investment Class | – | (28,654,599 | ) | (50,946,082 | ) | – | ||||||||||||||||||
Service Class | – | (27,697,370 | ) | (2,090,058 | ) | (2,911,841 | ) | – | – | |||||||||||||||
Consultant Class | (996,134 | ) | (1,232,171 | ) | – | – | ||||||||||||||||||
Institutional Class | – | (5,987,487 | ) | (2,010,750 | ) | (3,385,821 | ) | |||||||||||||||||
W Class | (1,522,568 | ) | (2,260,151 | ) | ||||||||||||||||||||
R Class | – | (67 | ) | |||||||||||||||||||||
Net realized gain on investments and foreign currency | ||||||||||||||||||||||||
Investment Class | – | – | (160,106,616 | ) | – | |||||||||||||||||||
Service Class | – | (338,749,938 | ) | – | (13,670,906 | ) | – | (7,364,369 | ) | |||||||||||||||
Consultant Class | – | (25,184,238 | ) | – | (324,141 | ) | ||||||||||||||||||
Institutional Class | – | (50,267,288 | ) | – | (10,453,373 | ) | ||||||||||||||||||
W Class | – | (7,939,323 | ) | |||||||||||||||||||||
R Class | – | – | ||||||||||||||||||||||
Total distributions | – | (422,702 ,083 | ) | (35,274,176 | ) | (278,090,522 | ) | – | (7,688,510 | ) | ||||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Value of shares sold | ||||||||||||||||||||||||
Investment Class | 1,401,014 | 413,760,569 | 952,576,801 | 319,200 | ||||||||||||||||||||
Service Class | 412,300,880 | 864,208,173 | 92,623,536 | 107,821,971 | 18,659,220 | 23,980,305 | ||||||||||||||||||
Consultant Class | 48,896,926 | 110,054,247 | 1,668,129 | 1,303,591 | ||||||||||||||||||||
Institutional Class | 312,594,391 | 628,550,572 | 48,568,835 | 99,662,465 | ||||||||||||||||||||
W Class | 32,046,500 | 70,724,392 | ||||||||||||||||||||||
R Class | 100,000 | 100,000 | ||||||||||||||||||||||
Distributions reinvested | ||||||||||||||||||||||||
Investment Class | – | 25,091,720 | 188,482,885 | – | ||||||||||||||||||||
Service Class | – | 349,790,587 | 2,071,468 | 16,542,059 | – | 7,272,453 | ||||||||||||||||||
Consultant Class | 953,072 | 25,520,731 | – | 324,136 | ||||||||||||||||||||
Institutional Class | – | 56,254,770 | 1,812,732 | 12,531,728 | ||||||||||||||||||||
W Class | 1,516,988 | 10,172,186 | ||||||||||||||||||||||
R Class | – | 67 | ||||||||||||||||||||||
Value of shares redeemed | ||||||||||||||||||||||||
Investment Class | – | (538,493,573 | ) | (1,333,998,368 | ) | (2,000 | ) | |||||||||||||||||
Service Class | (759,979,444 | ) | (1,399,264,508 | ) | (156,810,985 | ) | (97,087,209 | ) | (8,212,104 | ) | (1,861,142 | ) | ||||||||||||
Consultant Class | (59,532,351 | ) | (108,124,753 | ) | (439,045 | ) | (481,349 | ) | ||||||||||||||||
Institutional Class | (54,448,411 | ) | (49,968,076 | ) | (49,020,916 | ) | (66,055,779 | ) | ||||||||||||||||
W Class | (13,665,912 | ) | (19,442,976 | ) | ||||||||||||||||||||
R Class | – | – | ||||||||||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||
Investment Class | – | 136,703 | 281,770 | – | ||||||||||||||||||||
Service Class | 24,663 | 63,474 | 3,611 | 2,302 | 38,045 | 10,766 | ||||||||||||||||||
Consultant Class | 12,637 | 47,746 | 453 | – | ||||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | (88,006,907 | ) | 449,634,992 | (149,928,373 | ) | (30,287,802 | ) | 12,031,898 | 30,548,760 | |||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS | 376,095,179 | 764,648,569 | 343,697,669 | 463,903,832 | 20,050,144 | 37,816,458 | ||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of period | 4,674,037,662 | 3,909,389,093 | 6,003,039,815 | 5,539,135,983 | 99,228,036 | 61,411,578 | ||||||||||||||||||
End of period | $ | 5,050,132,841 | $ | 4,674,037,662 | $ | 6,346,737,484 | $ | 6,003,039,815 | $ | 119,278,180 | $ | 99,228,036 | ||||||||||||
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) AT END OF PERIOD | $ | (44,468,095 | ) | $ | (42,560,425 | ) | $ | 24,708,135 | $ | 21,095,819 | $ | 114,864 | $ | 126,000 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 99 |
Statements of Changes In Net Assets |
Royce Opportunity Fund | Royce Special Equity Fund | Royce Value Fund | ||||||||||||||||||||||
Six months ended | Six months ended | Six months ended | ||||||||||||||||||||||
6/30/07 | Year ended | 6/30/07 | Year ended | 6/30/07 | Year ended | |||||||||||||||||||
(unaudited) | 12/31/06 | (unaudited) | 12/31/06 | (unaudited) | 12/31/06 | |||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) | $ | 13,127,112 | $ | (1,220,309 | ) | $ | 2,161,617 | $ | 3,115,682 | $ | 201,489 | $ | (495,071 | ) | ||||||||||
Net realized gain (loss) on investments and foreign currency | 145,405,706 | 261,639,817 | 46,000,384 | 55,154,379 | 31,707,781 | 11,739,937 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | 150,707,298 | 89,982,937 | 18,050,151 | 24,727,892 | 62,553,559 | 29,329,469 | ||||||||||||||||||
Net increase (decrease) in net assets from investment operations | 309,240,116 | 350,402,445 | 66,212,152 | 82,997,953 | 94,462,829 | 40,574,335 | ||||||||||||||||||
DISTRIBUTIONS: | ||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||
Investment Class | – | – | – | (2,386,267 | ) | – | ||||||||||||||||||
Service Class | – | – | – | – | – | (623,703 | ) | |||||||||||||||||
Consultant Class | – | – | – | – | – | (32 | ) | |||||||||||||||||
Institutional Class | – | – | – | (896,270 | ) | – | (30,221 | ) | ||||||||||||||||
R Class | – | |||||||||||||||||||||||
Net realized gain on investments and foreign currency | ||||||||||||||||||||||||
Investment Class | – | (194,770,107 | ) | – | (32,306,607 | ) | – | |||||||||||||||||
Service Class | – | (30,716,981 | ) | – | (85,015 | ) | – | (8,484,332 | ) | |||||||||||||||
Consultant Class | – | (394,568 | ) | – | (1,237,544 | ) | – | (70,102 | ) | |||||||||||||||
Institutional Class | – | (25,785,180 | ) | – | (10,546,577 | ) | – | (172,358 | ) | |||||||||||||||
R Class | – | |||||||||||||||||||||||
Total distributions | – | (251,666,836 | ) | – | (47,458,280 | ) | – | (9,380,748 | ) | |||||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Value of shares sold | ||||||||||||||||||||||||
Investment Class | 250,547,151 | 460,025,902 | 58,977,929 | 64,568,458 | 3,859,159 | |||||||||||||||||||
Service Class | 105,751,866 | 139,187,127 | 1,732,258 | 692,879 | 234,509,901 | 404,126,231 | ||||||||||||||||||
Consultant Class | 5,012,360 | 3,956,233 | 1,194,038 | 2,503,244 | 5,104,617 | 4,370,437 | ||||||||||||||||||
Institutional Class | 161,863,944 | 102,325,325 | 25,894,210 | 16,280,694 | 162,134,540 | 17,276,975 | ||||||||||||||||||
R Class | 100,000 | |||||||||||||||||||||||
Distributions reinvested | ||||||||||||||||||||||||
Investment Class | – | 179,955,705 | – | 31,333,578 | – | |||||||||||||||||||
Service Class | – | 30,704,030 | – | 85,012 | – | 8,494,055 | ||||||||||||||||||
Consultant Class | – | 380,214 | – | 1,123,035 | – | 63,290 | ||||||||||||||||||
Institutional Class | – | 18,291,310 | – | 11,362,155 | – | 202,578 | ||||||||||||||||||
R Class | – | |||||||||||||||||||||||
Value of shares redeemed | ||||||||||||||||||||||||
Investment Class | (303,160,492 | ) | (405,219,952 | ) | (69,104,258 | ) | (207,850,482 | ) | (9,474 | ) | ||||||||||||||
Service Class | (86,492,386 | ) | (49,497,180 | ) | (793,259 | ) | (7,702,979 | ) | (66,007,609 | ) | (104,921,709 | ) | ||||||||||||
Consultant Class | (420,462 | ) | (81,792 | ) | (2,509,620 | ) | (4,692,537 | ) | (187,258 | ) | (177,677 | ) | ||||||||||||
Institutional Class | (21,452,427 | ) | (80,836,542 | ) | (31,620,232 | ) | (42,023,743 | ) | (10,567,086 | ) | (3,868,360 | ) | ||||||||||||
R Class | – | |||||||||||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||
Investment Class | 85,807 | 187,962 | 29,390 | 21,297 | – | |||||||||||||||||||
Service Class | 327 | 57 | 666 | 11 | 73,483 | 493,259 | ||||||||||||||||||
Consultant Class | 807 | 389 | 875 | 874 | 1,293 | 1,568 | ||||||||||||||||||
Net increase (decrease) in net assets from | ||||||||||||||||||||||||
capital share transactions | 111,836,495 | 399,378,788 | (16,198,003 | ) | (134,298,504 | ) | 328,911,566 | 326,060,647 | ||||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS | 421,076,611 | 498,114,397 | 50,014,149 | (98,758,831 | ) | 423,374,395 | 357,254,234 | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of period | 2,355,774,851 | 1,857,660,454 | 604,519,233 | 703,278,064 | 470,705,016 | 113,450,782 | ||||||||||||||||||
End of period | $ | 2,776,851,462 | $ | 2,355,774,851 | $ | 654,533,382 | $ | 604,519,233 | $ | 894,079,411 | $ | 470,705,016 | ||||||||||||
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) AT END OF PERIOD | $ | 13,127,112 | $ | – | $ | 2,161,617 | $ | – | $ | (590,045 | ) | $ | (791,534 | ) |
100 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce Value Plus Fund | Royce Technology Value Fund | Royce 100 Fund | |||||||||||||||||||||||||||||
Six months ended | Six months ended | Six months ended | |||||||||||||||||||||||||||||
6/30/07 | Year ended | 6/30/07 | Year ended | 6/30/07 | Year ended | ||||||||||||||||||||||||||
(unaudited) | 12/31/06 | (unaudited) | 12/31/06 | (unaudited) | 12/31/06 | ||||||||||||||||||||||||||
INVESTMENT OPERATIONS: | |||||||||||||||||||||||||||||||
Net investment income (loss) | $ | (4,499,122 | ) | $ | (3,686,908 | ) | $ | (97,139 | ) | $ | (337,926 | ) | $ | 8,041 | $ | (70,015 | ) | ||||||||||||||
Net realized gain (loss) on investments and foreign currency | 111,368,104 | 37,892,327 | 2,791,189 | (1,614,602 | ) | 2,397,834 | 869,488 | ||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | 152,531,684 | 98,110,022 | (555,177 | ) | 3,882,984 | 994,705 | 2,700,547 | ||||||||||||||||||||||||
Net increase (decrease) in net assets from investment operations | 259,400,666 | 132,315,441 | 2,138,873 | 1,930,456 | 3,400,580 | 3,500,020 | |||||||||||||||||||||||||
DISTRIBUTIONS: | |||||||||||||||||||||||||||||||
Net investment income | |||||||||||||||||||||||||||||||
Investment Class | – | – | |||||||||||||||||||||||||||||
Service Class | – | (283,348 | ) | – | – | – | – | ||||||||||||||||||||||||
Consultant Class | – | – | |||||||||||||||||||||||||||||
Institutional Class | – | (33,910 | ) | ||||||||||||||||||||||||||||
Net realized gain on investments and foreign currency | |||||||||||||||||||||||||||||||
Investment Class | – | – | |||||||||||||||||||||||||||||
Service Class | – | (26,099,551 | ) | – | (856,506 | ) | – | (947,591 | ) | ||||||||||||||||||||||
Consultant Class | – | (184,441 | ) | ||||||||||||||||||||||||||||
Institutional Class | – | (439,195 | ) | ||||||||||||||||||||||||||||
Total distributions | – | (27,040,445 | ) | – | (856,506 | ) | – | (947,591 | ) | ||||||||||||||||||||||
CAPITAL SHARE TRANSACTIONS: | |||||||||||||||||||||||||||||||
Value of shares sold | |||||||||||||||||||||||||||||||
Investment Class | 5,392,198 | 912,087 | |||||||||||||||||||||||||||||
Service Class | 1,132,662,859 | 1,277,843,910 | 1,601,327 | 4,527,651 | 9,454,710 | 21,292,793 | |||||||||||||||||||||||||
Consultant Class | 23,953,870 | 12,484,500 | |||||||||||||||||||||||||||||
Institutional Class | 48,836,101 | 29,484,364 | |||||||||||||||||||||||||||||
Distributions reinvested | |||||||||||||||||||||||||||||||
Investment Class | – | – | |||||||||||||||||||||||||||||
Service Class | – | 23,874,768 | – | 807,659 | – | 718,406 | |||||||||||||||||||||||||
Consultant Class | – | 182,432 | |||||||||||||||||||||||||||||
Institutional Class | – | 311,013 | |||||||||||||||||||||||||||||
Value of shares redeemed | |||||||||||||||||||||||||||||||
Investment Class | – | (14,655 | ) | ||||||||||||||||||||||||||||
Service Class | (266,362,302 | ) | (185,960,483 | ) | (3,927,960 | ) | (13,093,590 | ) | (10,759,201 | ) | (6,788,579 | ) | |||||||||||||||||||
Consultant Class | (1,120,888 | ) | (150,809 | ) | |||||||||||||||||||||||||||
Institutional Class | (2,948,843 | ) | (338,210 | ) | |||||||||||||||||||||||||||
Shareholder redemption fees | |||||||||||||||||||||||||||||||
Investment Class | – | – | |||||||||||||||||||||||||||||
Service Class | 405,755 | 702,898 | 10,596 | 20,112 | 4,381 | 23,341 | |||||||||||||||||||||||||
Consultant Class | 5,973 | 1,050 | |||||||||||||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 940,824,723 | 1,158,435,433 | (2,316,037 | ) | (7,738,168 | ) | (402,678 | ) | 15,245,961 | ||||||||||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS | 1,200,225,389 | 1,263,710,429 | (177,164 | ) | (6,664,218 | ) | 2,997,902 | 17,798,390 | |||||||||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||||||
Beginning of period | 1,557,566,555 | 293,856,126 | 21,040,680 | 27,704,898 | 34,690,539 | 16,892,149 | |||||||||||||||||||||||||
End of period | $ | 2,757,791,944 | $ | 1,557,566,555 | $ | 20,863,516 | $ | 21,040,680 | $ | 37,688,441 | $ | 34,690,539 | |||||||||||||||||||
UNDISTRIBUTED NET INVESTMENT | $ | (8,681,535 | ) | $ | (4,182,413 | ) | $ | (97,139 | ) | $ | – | $ | 8,041 | $ | – |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 101 |
Statements of Changes In Net Assets |
Royce Financial | |||||||||||||||||||||||||||||||
Royce Discovery Fund | Services Fund | Royce Dividend Value Fund | |||||||||||||||||||||||||||||
Six months ended | Six months ended | Six months ended | |||||||||||||||||||||||||||||
6/30/07 | Year ended | 6/30/07 | Year ended | 6/30/07 | Year ended | ||||||||||||||||||||||||||
(unaudited) | 12/31/06 | (unaudited) | 12/31/06 | (unaudited) | 12/31/06 | ||||||||||||||||||||||||||
INVESTMENT OPERATIONS: | |||||||||||||||||||||||||||||||
Net investment income (loss) | $ | (12,208 | ) | $ | (14,538 | ) | $ | 29,122 | $ | 37,952 | $ | 101,976 | $ | 79,821 | |||||||||||||||||
Net realized gain (loss) on investments and foreign currency | 366,645 | 318,086 | 124,718 | 149,221 | 629,148 | 155,139 | |||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (312,497 | ) | 329,738 | (80,618 | ) | 427,306 | (205,233 | ) | 584,947 | ||||||||||||||||||||||
Net increase (decrease) in net assets from investment operations | 41,940 | 633,286 | 73,222 | 614,479 | 525,891 | 819,907 | |||||||||||||||||||||||||
DISTRIBUTIONS: | |||||||||||||||||||||||||||||||
Net investment income | |||||||||||||||||||||||||||||||
Service Class | – | – | – | (33,389 | ) | (78,664 | ) | (59,629 | ) | ||||||||||||||||||||||
Net realized gain on investments and foreign currency | |||||||||||||||||||||||||||||||
Service Class | – | (311,358 | ) | – | (183,157 | ) | – | (130,535 | ) | ||||||||||||||||||||||
Total distributions | – | (311,358 | ) | – | (216,546 | ) | (78,664 | ) | (190,164 | ) | |||||||||||||||||||||
CAPITAL SHARE TRANSACTIONS: | |||||||||||||||||||||||||||||||
Value of shares sold | |||||||||||||||||||||||||||||||
Service Class | 597,703 | 645,725 | 2,378,819 | 1,886,164 | 1,902,959 | 3,384,265 | |||||||||||||||||||||||||
Distributions reinvested | |||||||||||||||||||||||||||||||
Service Class | – | 292,266 | – | 210,242 | 76,709 | 187,204 | |||||||||||||||||||||||||
Value of shares redeemed | |||||||||||||||||||||||||||||||
Service Class | (576,080 | ) | (466,763 | ) | (1,122,435 | ) | (175,377 | ) | (789,377 | ) | (979,504 | ) | |||||||||||||||||||
Shareholder redemption fees | |||||||||||||||||||||||||||||||
Service Class | 417 | 489 | 5,502 | 590 | 5,908 | 970 | |||||||||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 22,040 | 471,717 | 1,261,886 | 1,921,619 | 1,196,199 | 2,592,935 | |||||||||||||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS | 63,980 | 793,645 | 1,335,108 | 2,319,552 | 1,643,426 | 3,222,678 | |||||||||||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||||||
Beginning of period | 4,405,251 | 3,611,606 | 4,080,112 | 1,760,560 | 6,818,988 | 3,596,310 | |||||||||||||||||||||||||
End of period | $ | 4,469,231 | $ | 4,405,251 | $ | 5,415,220 | $ | 4,080,112 | $ | 8,462,414 | $ | 6,818,988 | |||||||||||||||||||
UNDISTRIBUTED NET INVESTMENT | $ | (12,208 | ) | $ | – | $ | 39,008 | $ | 9,886 | $ | 52,645 | $ | 29,333 |
102 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce International | Royce International | |||||||||
Value Fund | Smaller-Companies Fund | |||||||||
Six months ended | Six months ended | |||||||||
6/30/07* | 6/30/07* | |||||||||
(unaudited) | (unaudited) | |||||||||
INVESTMENT OPERATIONS: | ||||||||||
Net investment income (loss) | $ | (11,418 | ) | $ | 17,478 | |||||
Net realized gain (loss) on investments and foreign currency | 40,985 | 39,002 | ||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | 343,476 | 166,661 | ||||||||
Net increase (decrease) in net assets from investment operations | 373,043 | 223,141 | ||||||||
DISTRIBUTIONS: | ||||||||||
Net investment income | ||||||||||
Service Class | – | – | ||||||||
Net realized gain on investments and foreign currency | ||||||||||
Service Class | – | – | ||||||||
Total distributions | – | – | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||
Value of shares sold | ||||||||||
Service Class | 16,630,551 | 4,630,644 | ||||||||
Distributions reinvested | ||||||||||
Service Class | – | – | ||||||||
Value of shares redeemed | ||||||||||
Service Class | (103,554 | ) | (29,896 | ) | ||||||
Shareholder redemption fees | ||||||||||
Service Class | 1,800 | 119 | ||||||||
Net increase (decrease) in net assets from capital share transactions | 16,528,797 | 4,600,867 | ||||||||
NET INCREASE (DECREASE) IN NET ASSETS | 16,901,840 | 4,824,008 | ||||||||
NET ASSETS: | ||||||||||
Beginning of period | – | – | ||||||||
End of period | $ | 16,901,840 | $ | 4,824,008 | ||||||
UNDISTRIBUTED NET INVESTMENT | $ | (11,418 | ) | $ | 17,478 | |||||
* The Fund commenced operations on December 29, 2006. |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 103 |
Statements of Operations | Six Months Ended June 30, 2007 (unaudited) |
Pennsylvania Mutual Fund | Royce Micro-Cap Fund | Royce Premier Fund | Royce Low-Priced Stock Fund | Royce Total Return Fund | Royce Heritage Fund | Royce Opportunity Fund | Royce Special Equity Fund | |||||||||||||||||||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||||||||||||||||||||||
Income: | ||||||||||||||||||||||||||||||||||||||||
Dividends | ||||||||||||||||||||||||||||||||||||||||
Non-Affiliates | $ | 24,161,007 | $ | 3,403,203 | $ | 8,285,394 | $ | 13,090,444 | $ | 60,542,713 | $ | 433,442 | $ | 21,910,359 | $ | 2,438,410 | ||||||||||||||||||||||||
Affiliated Companies | 423,832 | 46,514 | 5,727,866 | 2,255,506 | 1,812,951 | – | 193,741 | 2,433,400 | ||||||||||||||||||||||||||||||||
Interest | 6,884,104 | 3,055,354 | 13,916,379 | 17,335,682 | 12,611,648 | 287,410 | 4,629,193 | 743,017 | ||||||||||||||||||||||||||||||||
Securities lending | 236,747 | 260,525 | 117 | 373,645 | 889,053 | – | 777,174 | 5,769 | ||||||||||||||||||||||||||||||||
Total income | 31,705,690 | 6,765,596 | 27,929,756 | 33,055,277 | 75,856,365 | 720,852 | 27,510,467 | 5,620,596 | ||||||||||||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||||||||||
Investment advisory fees | 16,741,123 | 6,137,853 | 22,788,721 | 27,057,055 | 29,439,715 | 551,884 | 12,726,102 | 3,069,218 | ||||||||||||||||||||||||||||||||
Distribution fees | 6,151,343 | 1,142,623 | 531,420 | 5,232,954 | 4,074,296 | 154,968 | 448,093 | 88,665 | ||||||||||||||||||||||||||||||||
Shareholder servicing | 1,347,952 | 294,865 | 1,657,483 | 2,339,610 | 2,190,362 | 48,669 | 868,245 | 161,915 | ||||||||||||||||||||||||||||||||
Shareholder reports | 649,459 | 245,886 | 589,805 | 648,772 | 752,335 | 23,887 | 188,683 | 53,327 | ||||||||||||||||||||||||||||||||
Custody | 196,101 | 45,926 | 199,514 | 209,337 | 280,966 | 10,199 | 123,240 | 29,289 | ||||||||||||||||||||||||||||||||
Administrative and office facilities | 168,251 | 37,074 | 187,384 | 191,323 | 248,236 | 4,085 | 98,975 | 24,815 | ||||||||||||||||||||||||||||||||
Registration | 74,282 | 26,839 | 52,171 | 39,941 | 69,251 | 25,522 | 45,868 | 19,405 | ||||||||||||||||||||||||||||||||
Trustees’ fees | 55,066 | 11,776 | 58,460 | 60,513 | 77,449 | 5,146 | 34,830 | 7,191 | ||||||||||||||||||||||||||||||||
Audit | 22,016 | 12,941 | 22,197 | 22,271 | 27,942 | 6,050 | 21,180 | 13,791 | ||||||||||||||||||||||||||||||||
Legal | 20,732 | 5,010 | 23,201 | 23,899 | 30,772 | 934 | 12,343 | 3,115 | ||||||||||||||||||||||||||||||||
Other expenses | 65,492 | 17,030 | 85,499 | 80,683 | 108,004 | 3,040 | 42,758 | 14,031 | ||||||||||||||||||||||||||||||||
Total expenses | 25,491,817 | 7,977,823 | 26,195,855 | 35,906,358 | 37,299,328 | 834,384 | 14,610,317 | 3,484,762 | ||||||||||||||||||||||||||||||||
Compensating balance credits | (158,786 | ) | (57,662 | ) | (121,514 | ) | (90,890 | ) | (236,583 | ) | (6,440 | ) | (67,765 | ) | (19,309 | ) | ||||||||||||||||||||||||
Fees waived by distributor | (54 | ) | – | (53 | ) | (837,318 | ) | (54 | ) | (79,290 | ) | (54 | ) | – | ||||||||||||||||||||||||||
Expenses reimbursed by investment adviser | ||||||||||||||||||||||||||||||||||||||||
Investment Class | – | – | – | (11,891 | ) | – | (12,112 | ) | – | – | ||||||||||||||||||||||||||||||
Service Class | – | (5,153 | ) | (70,045 | ) | – | (89,542 | ) | – | (155,826 | ) | (6,474 | ) | |||||||||||||||||||||||||||
Consultant Class | – | – | – | – | – | (4,554 | ) | – | – | |||||||||||||||||||||||||||||||
R Class | (3,256 | ) | (3,278 | ) | (3,312 | ) | (3,276 | ) | (3,317 | ) | ||||||||||||||||||||||||||||||
Net expenses | 25,329,721 | 7,915,008 | 26,000,965 | 34,962,947 | 36,969,873 | 731,988 | 14,383,355 | 3,458,979 | ||||||||||||||||||||||||||||||||
Net investment income (loss) | 6,375,969 | (1,149,412 | ) | 1,928,791 | (1,907,670 | ) | 38,886,492 | (11,136 | ) | 13,127,112 | 2,161,617 | |||||||||||||||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||||||||||||||||||||||||||||||||||||
AND FOREIGN CURRENCY: | ||||||||||||||||||||||||||||||||||||||||
Net realized gain (loss) on investments and foreign currency | ||||||||||||||||||||||||||||||||||||||||
Non-Affiliates | 221,785,687 | 82,486,650 | 265,845,426 | 225,583,351 | 209,392,987 | 6,426,958 | 145,130,300 | 43,985,098 | ||||||||||||||||||||||||||||||||
Affiliated Companies | 1,484,083 | (1,482,217 | ) | 93,797,196 | 84,381,428 | 5,545,113 | – | 275,406 | 2,015,286 | |||||||||||||||||||||||||||||||
Net change in unrealized appreciation | ||||||||||||||||||||||||||||||||||||||||
(depreciation) on investments and foreign currency | 187,031,213 | 11,182,558 | 280,928,187 | 156,044,977 | 275,075,626 | 1,602,424 | 150,707,298 | 18,050,151 | ||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | 410,300,983 | 92,186,991 | 640,570,809 | 466,009,756 | 490,013,726 | 8,029,382 | 296,113,004 | 64,050,535 | ||||||||||||||||||||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS FROM | ||||||||||||||||||||||||||||||||||||||||
INVESTMENT OPERATIONS | $ | 416,676,952 | $ | 91,037,579 | $ | 642,499,600 | $ | 464,102,086 | $ | 528,900,218 | $ | 8,018,246 | $ | 309,240,116 | $ | 66,212,152 |
104 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Statements of Operations | Six Months Ended June 30, 2007(unaudited) |
Royce Value Fund | Royce Value Plus Fund | Royce Technology Value Fund | Royce 100 Fund | Royce Discovery Fund | Royce Financial Services Fund | Royce Dividend Value Fund | Royce International Value Fund | Royce International Smaller- Companies Fund | |||||||||||||||||||||||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||||||||||||||||||||||||||
Income: | |||||||||||||||||||||||||||||||||||||||||||||||
Dividends | |||||||||||||||||||||||||||||||||||||||||||||||
Non-Affiliates | $ | 2,771,367 | $ | 3,118,822 | $ | 7,238 | $ | 129,508 | $ | 18,897 | $ | 46,200 | $ | 147,041 | $ | 27,818 | $ | 36,028 | |||||||||||||||||||||||||||||
Affiliated Companies | – | 186,468 | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||
Interest | 2,034,882 | 6,438,458 | 90,725 | 103,658 | 3,187 | 19,807 | 13,660 | 2,815 | 920 | ||||||||||||||||||||||||||||||||||||||
Securities lending | 20,857 | 140,232 | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||
Total income | 4,827,106 | 9,883,980 | 97,963 | 233,166 | 22,084 | 66,007 | 160,701 | 30,633 | 36,948 | ||||||||||||||||||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
Investment advisory fees | 3,623,810 | 10,805,625 | 146,253 | 174,883 | 23,014 | 24,755 | 39,284 | 31,103 | 14,401 | ||||||||||||||||||||||||||||||||||||||
Distribution fees | 734,523 | 2,758,060 | 25,561 | 43,176 | 5,754 | 6,189 | 9,821 | 6,221 | 2,880 | ||||||||||||||||||||||||||||||||||||||
Shareholder servicing | 274,677 | 998,085 | 12,134 | 28,466 | 20,538 | 5,997 | 6,378 | 5,408 | 5,378 | ||||||||||||||||||||||||||||||||||||||
Shareholder reports | 77,038 | 357,624 | 5,877 | 4,719 | 1,724 | 2,069 | 2,874 | 609 | 439 | ||||||||||||||||||||||||||||||||||||||
Custody | 34,934 | 94,167 | 2,953 | 4,360 | 3,046 | 5,071 | 3,063 | 6,539 | 9,363 | ||||||||||||||||||||||||||||||||||||||
Administrative and office facilities | 23,350 | 69,131 | 864 | 1,341 | 183 | 174 | 284 | 61 | 45 | ||||||||||||||||||||||||||||||||||||||
Registration | 50,657 | 99,828 | 8,380 | 16,690 | 6,135 | 7,797 | 7,264 | 15,183 | 14,931 | ||||||||||||||||||||||||||||||||||||||
Trustees’ fees | 8,721 | 26,397 | 252 | 2,069 | 71 | 86 | 96 | 37 | 23 | ||||||||||||||||||||||||||||||||||||||
Audit | 12,786 | 18,365 | 4,010 | 4,016 | 4,002 | 4,002 | 4,004 | 4,001 | 4,000 | ||||||||||||||||||||||||||||||||||||||
Legal | 2,841 | 8,424 | 109 | 165 | 23 | 446 | 35 | 7 | 5 | ||||||||||||||||||||||||||||||||||||||
Other expenses | 8,789 | 20,651 | 1,732 | 1,722 | 1,041 | 988 | 1,045 | 856 | 872 | ||||||||||||||||||||||||||||||||||||||
Total expenses | 4,852,126 | 15,256,357 | 208,125 | 281,607 | 65,531 | 57,574 | 74,148 | 70,025 | 52,337 | ||||||||||||||||||||||||||||||||||||||
Compensating balance credits | (22,298 | ) | (127,075 | ) | (1,535 | ) | (1,351 | ) | (259 | ) | (462 | ) | (501 | ) | (6,317 | ) | (8,860 | ) | |||||||||||||||||||||||||||||
Fees waived by investment adviser and distributor | (195,435 | ) | (735,398 | ) | (11,488 | ) | (43,176 | ) | (28,768 | ) | (20,227 | ) | (14,922 | ) | (21,657 | ) | (17,281 | ) | |||||||||||||||||||||||||||||
Expenses reimbursed by investment adviser | |||||||||||||||||||||||||||||||||||||||||||||||
Investment Class | (8,776 | ) | (8,181 | ) | (11,955 | ) | |||||||||||||||||||||||||||||||||||||||||
Service Class | – | – | – | – | (2,212 | ) | – | – | – | (6,726 | ) | ||||||||||||||||||||||||||||||||||||
Institutional Class | – | (2,601 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Net expenses | 4,625,617 | 14,383,102 | 195,102 | 225,125 | 34,292 | 36,885 | 58,725 | 42,051 | 19,470 | ||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | 201,489 | (4,499,122 | ) | (97,139 | ) | 8,041 | (12,208 | ) | 29,122 | 101,976 | (11,418 | ) | 17,478 | ||||||||||||||||||||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | |||||||||||||||||||||||||||||||||||||||||||||||
Net realized gain (loss) on investments and foreign currency | |||||||||||||||||||||||||||||||||||||||||||||||
Non-Affiliates | 31,707,781 | 105,800,923 | 2,791,189 | 2,397,834 | 366,645 | 124,718 | 629,148 | 40,985 | 39,002 | ||||||||||||||||||||||||||||||||||||||
Affiliated Companies | – | 5,567,181 | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | 62,553,559 | 152,531,684 | (555,177 | ) | 994,705 | (312,497 | ) | (80,618 | ) | (205,233 | ) | 343,476 | 166,661 | ||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | 94,261,340 | 263,899,788 | 2,236,012 | 3,392,539 | 54,148 | 44,100 | 423,915 | 384,461 | 205,663 | ||||||||||||||||||||||||||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | 94,462,829 | $ | 259,400,666 | $ | 2,138,873 | $ | 3,400,580 | $ | 41,940 | $ | 73,222 | $ | 525,891 | $ | 373,043 | $ | 223,141 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 105 |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | Net | Net Realized and Unrealized | Distributions | Distributions from Net | Ratio of Expenses to Average Net Assets | Ratio of Net Investment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Value, Beginning of Period | Investment Income (Loss) | Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | from Net Investment Income | Realized Gain on Investments and Foreign Currency | Total Distributions | Shareholder Redemption Fees | Net Asset Value, End of Period | Total Return | Net Assets, End of Period (in thousands) | Prior to Fee Waivers and Balance Credits | Prior to Fee Waivers | Net of Fee Waivers | Income (Loss) to Average Net Assets | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||||||||
Pennsylvania Mutual Fund – Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 11.57 | $ | 0.03 | $ | 1.13 | $ | 1.16 | $ | – | $ | – | $ | – | $ | – | $ | 12.73 | 10.03 | %** | $ | 3,487,958 | 0.87 | %* | 0.87 | %* | 0.87 | %* | 0.56 | %* | 21 | % | ||||||||||||||||||||||||||||
2006 | 10.78 | 0.04 | 1.56 | 1.60 | (0.04 | ) | (0.77 | ) | (0.81 | ) | – | 11.57 | 14.78 | 2,867,562 | 0.88 | 0.87 | 0.87 | 0.39 | 38 | |||||||||||||||||||||||||||||||||||||||||
2005 | 10.14 | 0.05 | 1.22 | 1.27 | – | (0.63 | ) | (0.63 | ) | – | 10.78 | 12.50 | 1,864,481 | 0.90 | 0.90 | 0.90 | 0.49 | 26 | ||||||||||||||||||||||||||||||||||||||||||
2004 | 8.88 | (0.02 | ) | 1.81 | 1.79 | – | (0.53 | ) | (0.53 | ) | – | 10.14 | 20.23 | 1,243,059 | 0.89 | 0.89 | 0.89 | (0.20 | ) | 32 | ||||||||||||||||||||||||||||||||||||||||
2003 | 6.59 | (0.01 | ) | 2.66 | 2.65 | – | (0.36 | ) | (0.36 | ) | – | 8.88 | 40.29 | 839,604 | 0.93 | 0.93 | 0.93 | (0.17 | ) | 30 | ||||||||||||||||||||||||||||||||||||||||
2002 | 7.39 | (0.01 | ) | (0.67 | ) | (0.68 | ) | – | (0.12 | ) | (0.12 | ) | – | 6.59 | (9.22 | ) | 462,152 | 0.94 | 0.94 | 0.94 | (0.13 | ) | 33 | |||||||||||||||||||||||||||||||||||||
Pennsylvania Mutual Fund – Service Class(a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 11.53 | $ | 0.02 | $ | 1.12 | $ | 1.14 | $ | – | $ | – | $ | – | $ | – | $ | 12.67 | 9.89 | %** | $ | 59,486 | 1.06 | %* | 1.06 | %* | 1.06 | %* | 0.39 | %* | 21 | % | ||||||||||||||||||||||||||||
2006 | 10.77 | (0.04 | ) | 1.61 | 1.57 | (0.04 | ) | (0.77 | ) | (0.81 | ) | – | 11.53 | 14.49 | 40,049 | 1.16 | 1.16 | 1.14 | 0.30 | 38 | ||||||||||||||||||||||||||||||||||||||||
2005 | 10.93 | 0.02 | 0.45 | 0.47 | – | (0.63 | ) | (0.63 | ) | – | 10.77 | 4.27 | ** | 104 | 26.06 | * | 26.06 | * | 1.14 | * | 1.32 | * | 26 | |||||||||||||||||||||||||||||||||||||
Pennsylvania Mutual Fund – Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 10.89 | $ | (0.02 | ) | $ | 1.05 | $ | 1.03 | $ | – | $ | – | $ | – | $ | – | $ | 11.92 | 9.46 | %** | $ | 1,288,652 | 1.87 | %* | 1.86 | %* | 1.86 | %* | (0.43 | )%* | 21 | % | |||||||||||||||||||||||||||
2006 | 10.25 | (0.07 | ) | 1.48 | 1.41 | – | (0.77 | ) | (0.77 | ) | – | 10.89 | 13.71 | 1,163,265 | 1.87 | 1.86 | 1.86 | (0.61 | ) | 38 | ||||||||||||||||||||||||||||||||||||||||
2005 | 9.77 | (0.04 | ) | 1.15 | 1.11 | – | (0.63 | ) | (0.63 | ) | – | 10.25 | 11.32 | 904,160 | 1.89 | 1.89 | 1.88 | (0.52 | ) | 26 | ||||||||||||||||||||||||||||||||||||||||
2004 | 8.65 | (0.11 | ) | 1.76 | 1.65 | – | (0.53 | ) | (0.53 | ) | – | 9.77 | 19.14 | 753,388 | 1.89 | 1.89 | 1.89 | (1.20 | ) | 32 | ||||||||||||||||||||||||||||||||||||||||
2003 | 6.50 | (0.09 | ) | 2.60 | 2.51 | – | (0.36 | ) | (0.36 | ) | �� | 8.65 | 38.69 | 484,439 | 1.94 | 1.94 | 1.94 | (1.19 | ) | 30 | ||||||||||||||||||||||||||||||||||||||||
2002 | 7.36 | (0.08 | ) | (0.66 | ) | (0.74 | ) | – | (0.12 | ) | (0.12 | ) | – | 6.50 | (10.07 | ) | 266,061 | 1.97 | 1.97 | 1.97 | (1.16 | ) | 33 | |||||||||||||||||||||||||||||||||||||
Pennsylvania Mutual Fund – R Class(b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 12.71 | $ | (0.00 | ) | $ | 0.01 | $ | 0.01 | $ | – | $ | – | $ | – | $ | – | $ | 12.72 | 0.08 | %** | $ | 100 | 31.85 | %* | 31.85 | %* | 1.74 | %* | (0.32 | )%* | 21 | % | |||||||||||||||||||||||||||
Royce Micro-Cap Fund – Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 17.35 | $ | (0.00 | ) | $ | 1.76 | $ | 1.76 | $ | – | $ | – | $ | – | $ | – | $ | 19.11 | 10.14 | %** | $ | 740,786 | 1.45 | %* | 1.44 | %* | 1.44 | %* | (0.01 | )%* | 24 | % | |||||||||||||||||||||||||||
2006 | 15.90 | (0.06 | ) | 3.58 | 3.52 | (0.28 | ) | (1.79 | ) | (2.07 | ) | – | 17.35 | 22.31 | 682,513 | 1.44 | 1.43 | 1.43 | (0.31 | ) | 42 | |||||||||||||||||||||||||||||||||||||||
2005 | 15.71 | (0.10 | ) | 1.90 | 1.80 | (0.13 | ) | (1.48 | ) | (1.61 | ) | – | 15.90 | 11.50 | 497,917 | 1.49 | 1.49 | 1.48 | (0.72 | ) | 31 | |||||||||||||||||||||||||||||||||||||||
2004 | 14.93 | (0.15 | ) | 2.47 | 2.32 | – | (1.54 | ) | (1.54 | ) | – | 15.71 | 15.78 | 473,248 | 1.56 | 1.56 | 1.47 | (0.94 | ) | 44 | ||||||||||||||||||||||||||||||||||||||||
2003 | 10.16 | (0.13 | ) | 5.47 | 5.34 | – | (0.57 | ) | (0.57 | ) | – | 14.93 | 52.62 | 431,808 | 1.67 | 1.67 | 1.48 | (1.09 | ) | 44 | ||||||||||||||||||||||||||||||||||||||||
2002 | 11.85 | (0.12 | ) | (1.48 | ) | (1.60 | ) | – | (0.10 | ) | (0.10 | ) | 0.01 | 10.16 | (13.43 | ) | 262,981 | 1.73 | 1.73 | 1.49 | (1.05 | ) | 31 | |||||||||||||||||||||||||||||||||||||
Royce Micro-Cap Fund – Service Class(c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 17.27 | $ | (0.00 | ) | $ | 1.74 | $ | 1.74 | $ | – | $ | – | $ | – | $ | – | $ | 19.01 | 10.08 | %** | $ | 25,679 | 1.75 | %* | 1.74 | %* | 1.66 | %* | (0.03 | )%* | 24 | % | |||||||||||||||||||||||||||
2006 | 15.85 | (0.18 | ) | 3.65 | 3.47 | (0.26 | ) | (1.79 | ) | (2.05 | ) | – | 17.27 | 22.02 | 7,521 | 1.93 | 1.93 | 1.66 | (0.50 | ) | 42 | |||||||||||||||||||||||||||||||||||||||
2005 | 15.68 | (0.11 | ) | 1.89 | 1.78 | (0.13 | ) | (1.48 | ) | (1.61 | ) | – | 15.85 | 11.39 | 2,742 | 2.75 | 2.75 | 1.49 | (0.72 | ) | 31 | |||||||||||||||||||||||||||||||||||||||
2004 | 14.91 | (0.16 | ) | 2.47 | 2.31 | – | (1.54 | ) | (1.54 | ) | – | 15.68 | 15.73 | 1,152 | 3.07 | 3.07 | 1.49 | (1.06 | ) | 44 | ||||||||||||||||||||||||||||||||||||||||
2003 | 10.16 | (0.15 | ) | 5.47 | 5.32 | – | (0.57 | ) | (0.57 | ) | – | 14.91 | 52.42 | 202 | 17.16 | 17.16 | 1.49 | (1.11 | ) | 44 | ||||||||||||||||||||||||||||||||||||||||
2002 | 10.27 | (0.04 | ) | 0.03 | (0.01 | ) | – | (0.10 | ) | (0.10 | ) | – | 10.16 | (0.11 | )** | 7 | 17.46 | * | 17.46 | * | 1.49 | * | (1.20 | )* | 31 | |||||||||||||||||||||||||||||||||||
Royce Micro-Cap Fund – Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 16.21 | $ | (0.08 | ) | $ | 1.64 | $ | 1.56 | $ | – | $ | – | $ | – | $ | – | $ | 17.77 | 9.62 | %** | $ | 231,494 | 2.44 | %* | 2.42 | %* | 2.42 | %* | (1.00 | )%* | 24 | % | |||||||||||||||||||||||||||
2006 | 14.98 | (0.21 | ) | 3.35 | 3.14 | (0.12 | ) | (1.79 | ) | (1.91 | ) | – | 16.21 | 21.10 | 221,411 | 2.44 | 2.42 | 2.42 | (1.30 | ) | 42 | |||||||||||||||||||||||||||||||||||||||
2005 | 14.92 | (0.25 | ) | 1.79 | 1.54 | – | (1.48 | ) | (1.48 | ) | – | 14.98 | 10.37 | 173,017 | 2.49 | 2.49 | 2.49 | (1.72 | ) | 31 | ||||||||||||||||||||||||||||||||||||||||
2004 | 14.39 | (0.29 | ) | 2.36 | 2.07 | – | (1.54 | ) | (1.54 | ) | – | 14.92 | 14.62 | 169,813 | 2.56 | 2.56 | 2.47 | (1.94 | ) | 44 | ||||||||||||||||||||||||||||||||||||||||
2003 | 9.91 | (0.25 | ) | 5.30 | 5.05 | – | (0.57 | ) | (0.57 | ) | – | 14.39 | 51.01 | 144,451 | 2.74 | 2.74 | 2.49 | (2.10 | ) | 44 | ||||||||||||||||||||||||||||||||||||||||
2002 | 11.68 | (0.22 | ) | (1.45 | ) | (1.67 | ) | – | (0.10 | ) | (0.10 | ) | – | 9.91 | (14.31 | ) | 68,963 | 2.78 | 2.78 | 2.49 | (2.06 | ) | 31 |
106 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | Net | Net Realized and Unrealized | Distributions | Distributions from Net | Ratio of Expenses to Average Net Assets | Ratio of Net Investment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Value, Beginning of Period | Investment Income (Loss) | Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | from Net Investment Income | Realized Gain on Investments and Foreign Currency | Total Distributions | Shareholder Redemption Fees | Net Asset Value, End of Period | Total Return | Net Assets, End of Period (in thousands) | Prior to Fee Waivers and Balance Credits | Prior to Fee Waivers | Net of Fee Waivers | Income (Loss) to Average Net Assets | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||||||||
Royce Premier Fund – Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 17.66 | $ | 0.01 | $ | 2.56 | $ | 2.57 | $ | – | $ | – | $ | – | $ | – | $ | 20.23 | 14.55 | %** | $ | 3,957,545 | 1.09 | %* | 1.09 | %* | 1.09 | %* | 0.09 | %* | 7 | % | ||||||||||||||||||||||||||||
2006 | 16.86 | 0.03 | 1.47 | 1.50 | (0.07 | ) | (0.63 | ) | (0.70 | ) | – | 17.66 | 8.81 | 3,628,842 | 1.10 | 1.09 | 1.09 | 0.18 | 13 | |||||||||||||||||||||||||||||||||||||||||
2005 | 15.12 | (0.01 | ) | 2.59 | 2.58 | – | (0.84 | ) | (0.84 | ) | – | 16.86 | 17.07 | 3,382,086 | 1.13 | 1.13 | 1.13 | (0.09 | ) | 20 | ||||||||||||||||||||||||||||||||||||||||
2004 | 12.90 | (0.06 | ) | 2.99 | 2.93 | – | (0.71 | ) | (0.71 | ) | – | 15.12 | 22.82 | 2,975,348 | 1.14 | 1.14 | 1.14 | (0.43 | ) | 24 | ||||||||||||||||||||||||||||||||||||||||
2003 | 9.39 | (0.03 | ) | 3.67 | 3.64 | – | (0.13 | ) | (0.13 | ) | – | 12.90 | 38.74 | 1,713,001 | 1.16 | 1.16 | 1.16 | (0.29 | ) | 26 | ||||||||||||||||||||||||||||||||||||||||
2002 | 10.54 | (0.04 | ) | (0.77 | ) | (0.81 | ) | – | (0.34 | ) | (0.34 | ) | – | 9.39 | (7.75 | ) | 848,341 | 1.17 | 1.17 | 1.17 | (0.40 | ) | 33 | |||||||||||||||||||||||||||||||||||||
Royce Premier Fund – Service Class(a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 17.56 | $ | (0.01 | ) | $ | 2.55 | $ | 2.54 | $ | – | $ | – | $ | – | $ | – | $ | 20.10 | 14.46 | %** | $ | 242,524 | 1.36 | %* | 1.35 | %* | 1.29 | %* | (0.10 | )%* | 7 | % | |||||||||||||||||||||||||||
2006 | 16.77 | (0.00 | ) | 1.46 | 1.46 | (0.04 | ) | (0.63 | ) | (0.67 | ) | – | 17.56 | 8.61 | 193,860 | 1.38 | 1.38 | 1.29 | (0.01 | ) | 13 | |||||||||||||||||||||||||||||||||||||||
2005 | 15.07 | (0.04 | ) | 2.58 | 2.54 | – | (0.84 | ) | (0.84 | ) | – | 16.77 | 16.86 | 135,927 | 1.37 | 1.37 | 1.29 | (0.24 | ) | 20 | ||||||||||||||||||||||||||||||||||||||||
2004 | 12.89 | (0.08 | ) | 2.97 | 2.89 | – | (0.71 | ) | (0.71 | ) | – | 15.07 | 22.52 | 69,759 | 1.39 | 1.39 | 1.29 | (0.57 | ) | 24 | ||||||||||||||||||||||||||||||||||||||||
2003 | 9.39 | (0.04 | ) | 3.67 | 3.63 | – | (0.13 | ) | (0.13 | ) | – | 12.89 | 38.63 | 32,307 | 1.42 | 1.42 | 1.29 | (0.33 | ) | 26 | ||||||||||||||||||||||||||||||||||||||||
2002 | 9.48 | (0.02 | ) | 0.27 | 0.25 | – | (0.34 | ) | (0.34 | ) | – | 9.39 | 2.56 | ** | 7,826 | 4.69 | * | 4.69 | * | 1.29 | * | (0.62 | )* | 33 | ||||||||||||||||||||||||||||||||||||
Royce Premier Fund – Consultant Class(b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 16.96 | $ | (0.08 | ) | $ | 2.45 | $ | 2.37 | $ | – | $ | – | $ | – | $ | – | $ | 19.33 | 13.97 | %** | $ | 55,738 | 2.09 | %* | 2.08 | %* | 2.08 | %* | (0.90 | )%* | 7 | % | |||||||||||||||||||||||||||
2006 | 16.31 | (0.14 | ) | 1.42 | 1.28 | – | (0.63 | ) | (0.63 | ) | – | 16.96 | 7.74 | 50,862 | 2.12 | 2.11 | 2.11 | (0.83 | ) | 13 | ||||||||||||||||||||||||||||||||||||||||
2005 | 14.80 | (0.17 | ) | 2.52 | 2.35 | – | (0.84 | ) | (0.84 | ) | – | 16.31 | 15.88 | 47,310 | 2.17 | 2.17 | 2.17 | (1.12 | ) | 20 | ||||||||||||||||||||||||||||||||||||||||
2004 | 12.80 | (0.22 | ) | 2.93 | 2.71 | – | (0.71 | ) | (0.71 | ) | – | 14.80 | 21.27 | 26,805 | 2.35 | 2.35 | 2.35 | (1.59 | ) | 24 | ||||||||||||||||||||||||||||||||||||||||
2003 | 10.52 | (0.08 | ) | 2.49 | 2.41 | – | (0.13 | ) | (0.13 | ) | – | 12.80 | 22.88 | ** | 5,401 | 4.25 | * | 4.25 | * | 2.49 | * | (1.22 | )* | 26 | ||||||||||||||||||||||||||||||||||||
Royce Premier Fund – Institutional Class(c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 17.71 | $ | 0.02 | $ | 2.57 | $ | 2.59 | $ | – | $ | – | $ | – | $ | – | $ | 20.30 | 14.62 | %** | $ | 437,875 | 1.01 | %* | 1.01 | %* | 1.01 | %* | 0.18 | %* | 7 | % | ||||||||||||||||||||||||||||
2006 | 16.91 | 0.05 | 1.47 | 1.52 | (0.09 | ) | (0.63 | ) | (0.72 | ) | – | 17.71 | 8.88 | 355,293 | 1.01 | 1.00 | 1.00 | 0.27 | 13 | |||||||||||||||||||||||||||||||||||||||||
2005 | 15.15 | 0.01 | 2.59 | 2.60 | – | (0.84 | ) | (0.84 | ) | – | 16.91 | 17.17 | 235,886 | 1.02 | 1.02 | 1.02 | 0.04 | 20 | ||||||||||||||||||||||||||||||||||||||||||
2004 | 12.91 | (0.04 | ) | 2.99 | 2.95 | – | (0.71 | ) | (0.71 | ) | – | 15.15 | 22.96 | 104,497 | 1.06 | 1.06 | 1.04 | (0.30 | ) | 24 | ||||||||||||||||||||||||||||||||||||||||
2003 | 9.39 | (0.00 | ) | 3.65 | 3.65 | – | (0.13 | ) | (0.13 | ) | – | 12.91 | 38.84 | 24,106 | 1.14 | 1.14 | 1.04 | (0.03 | ) | 26 | ||||||||||||||||||||||||||||||||||||||||
2002 | 9.64 | (0.01 | ) | 0.10 | 0.09 | – | (0.34 | ) | (0.34 | ) | – | 9.39 | 0.86 | ** | 4,490 | 1.58 | * | 1.58 | * | 1.04 | * | (0.28 | )* | 33 | ||||||||||||||||||||||||||||||||||||
Royce Premier Fund – W Class(d) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 17.67 | $ | 0.01 | $ | 2.56 | $ | 2.57 | $ | – | $ | – | $ | – | $ | – | $ | 20.24 | 14.54 | %** | $ | 328,391 | 1.04 | %* | 1.04 | %* | 1.04 | %* | 0.14 | %* | 7 | % | ||||||||||||||||||||||||||||
2006 | 16.87 | 0.04 | 1.46 | 1.50 | (0.07 | ) | (0.63 | ) | (0.70 | ) | – | 17.67 | 8.82 | 299,129 | 1.08 | 1.07 | 1.07 | 0.20 | 13 | |||||||||||||||||||||||||||||||||||||||||
2005 | 14.37 | 0.01 | 3.33 | 3.34 | – | (0.84 | ) | (0.84 | ) | – | 16.87 | 23.25 | ** | 283,095 | 1.04 | * | 1.04 | * | 1.04 | * | 0.06 | * | 20 | |||||||||||||||||||||||||||||||||||||
Royce Premier Fund – R Class(e) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 20.38 | $ | (0.01 | ) | $ | (0.15 | ) | $ | (0.16 | ) | $ | – | $ | – | $ | – | $ | – | $ | 20.22 | (0.79 | )%** | $ | 99 | 32.17 | %* | 32.17 | %* | 1.74 | %* | (0.31 | )%* | 7 | % | |||||||||||||||||||||||||
Royce Low-Priced Stock Fund – Investment Class(f) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 17.06 | $ | 0.02 | $ | 1.44 | $ | 1.46 | $ | – | $ | – | $ | – | $ | – | $ | 18.52 | 8.56 | %** | $ | 1,436 | 5.09 | %* | 5.09 | %* | 1.24 | %* | 0.41 | %* | 11 | % |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 107 |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | Net | Net Realized and Unrealized | Distributions | Distributions from Net | Ratio of Expenses to Average Net Assets | Ratio of Net Investment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Value, Beginning of Period | Investment Income (Loss) | Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | from Net Investment Income | Realized Gain on Investments and Foreign Currency | Total Distributions | Shareholder Redemption Fees | Net Asset Value, End of Period | Total Return | Net Assets, End of Period (in thousands) | Prior to Fee Waivers and Balance Credits | Prior to Fee Waivers | Net of Fee Waivers | Income (Loss) to Average Net Assets | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||||||||
Royce Low-Priced Stock Fund – Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 16.83 | $ | (0.01 | ) | $ | 1.69 | $ | 1.68 | $ | – | $ | – | $ | – | $ | – | $ | 18.51 | 9.98 | %** | $ | 4,116,956 | 1.52 | %* | 1.52 | %* | 1.48 | % | (0.12 | )% | 11 | % | |||||||||||||||||||||||||||
2006 | 15.53 | (0.05 | ) | 3.00 | 2.95 | (0.12 | ) | (1.53 | ) | (1.65 | ) | – | 16.83 | 18.97 | 4,065,946 | 1.51 | 1.51 | 1.46 | (0.37 | ) | 27 | |||||||||||||||||||||||||||||||||||||||
2005 | 15.33 | (0.10 | ) | 1.58 | 1.48 | – | (1.28 | ) | (1.28 | ) | – | 15.53 | 9.66 | 3,909,389 | 1.54 | 1.54 | 1.49 | (0.68 | ) | 21 | ||||||||||||||||||||||||||||||||||||||||
2004 | 13.98 | (0.14 | ) | 2.04 | 1.90 | – | (0.55 | ) | (0.55 | ) | – | 15.33 | 13.64 | 4,769,417 | 1.71 | 1.71 | 1.49 | (1.00 | ) | 26 | ||||||||||||||||||||||||||||||||||||||||
2003 | 9.75 | (0.07 | ) | 4.36 | 4.29 | – | (0.06 | ) | (0.06 | ) | – | 13.98 | 44.02 | 3,046,100 | 1.94 | 1.94 | 1.49 | (0.70 | ) | 42 | ||||||||||||||||||||||||||||||||||||||||
2002 | 11.67 | (0.08 | ) | (1.83 | ) | (1.91 | ) | – | (0.02 | ) | (0.02 | ) | 0.01 | 9.75 | (16.28 | ) | 1,787,172 | 1.97 | 1.97 | 1.49 | (0.74 | ) | 29 | |||||||||||||||||||||||||||||||||||||
Royce Low-Priced Stock Fund – Institutional Class(a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 16.82 | $ | 0.02 | $ | 1.69 | $ | 1.71 | $ | – | $ | – | $ | – | $ | – | $ | 18.53 | 10.17 | %** | $ | 931,641 | 1.18 | %* | 1.18 | %* | 1.18 | %* | 0.19 | %* | 11 | % | ||||||||||||||||||||||||||||
2006 | 15.84 | (0.18 | ) | 2.87 | 2.69 | (0.18 | ) | (1.53 | ) | (1.71 | ) | – | 16.82 | 16.94 | ** | 608,092 | 1.20 | * | 1.19 | * | 1.19 | * | 0.02 | * | 27 | |||||||||||||||||||||||||||||||||||
Royce Low-Priced Stock Fund – R Class(b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 18.69 | $ | 0.01 | $ | (0.19 | ) | $ | (0.18 | ) | $ | – | $ | – | $ | – | $ | – | $ | 18.51 | (0.96 | )%** | $ | 99 | 32.49 | %* | 32.49 | %* | 1.74 | %* | 0.42 | %* | 11 | % | ||||||||||||||||||||||||||
Royce Total Return Fund – Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 13.75 | $ | 0.10 | $ | 1.12 | $ | 1.22 | $ | (0.09 | ) | $ | – | $ | (0.09 | ) | $ | – | $ | 14.88 | 8.90 | %** | $ | 4,700,369 | 1.07 | %* | 1.07 | %* | 1.07 | %* | 1.37 | %* | 12 | % | ||||||||||||||||||||||||||
2006 | 12.60 | 0.18 | 1.64 | 1.82 | (0.15 | ) | (0.52 | ) | (0.67 | ) | – | 13.75 | 14.54 | 4,438,964 | 1.09 | 1.09 | 1.09 | 1.31 | 25 | |||||||||||||||||||||||||||||||||||||||||
2005 | 12.26 | 0.14 | 0.87 | 1.01 | (0.12 | ) | (0.55 | ) | (0.67 | ) | – | 12.60 | 8.23 | 4,258,135 | 1.12 | 1.12 | 1.12 | 1.13 | 24 | |||||||||||||||||||||||||||||||||||||||||
2004 | 10.69 | 0.11 | 1.75 | 1.86 | (0.12 | ) | (0.17 | ) | (0.29 | ) | – | 12.26 | 17.52 | 3,738,851 | 1.15 | 1.15 | 1.15 | 1.08 | 22 | |||||||||||||||||||||||||||||||||||||||||
2003 | 8.37 | 0.11 | 2.39 | 2.50 | (0.10 | ) | (0.08 | ) | (0.18 | ) | – | 10.69 | 29.99 | 2,289,013 | 1.18 | 1.18 | 1.18 | 1.27 | 20 | |||||||||||||||||||||||||||||||||||||||||
2002 | 8.59 | 0.08 | (0.21 | ) | (0.13 | ) | (0.08 | ) | (0.01 | ) | (0.09 | ) | – | 8.37 | (1.60 | ) | 986,455 | 1.20 | 1.20 | 1.20 | 1.01 | 22 | ||||||||||||||||||||||||||||||||||||||
Royce Total Return Fund – Service Class(c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 13.61 | $ | 0.08 | $ | 1.11 | $ | 1.19 | $ | (0.07 | ) | $ | – | $ | (0.07 | ) | $ | – | $ | 14.73 | 8.76 | %** | $ | 342,830 | 1.33 | %* | 1.33 | %* | 1.29 | %* | 1.15 | %* | 12 | % | ||||||||||||||||||||||||||
2006 | 12.46 | 0.15 | 1.63 | 1.78 | (0.11 | ) | (0.52 | ) | (0.63 | ) | – | 13.61 | 14.32 | 371,755 | 1.34 | 1.34 | 1.29 | 1.12 | 25 | |||||||||||||||||||||||||||||||||||||||||
2005 | 12.12 | 0.12 | 0.86 | 0.98 | (0.09 | ) | (0.55 | ) | (0.64 | ) | – | 12.46 | 8.07 | 315,602 | 1.36 | 1.36 | 1.29 | 0.98 | 24 | |||||||||||||||||||||||||||||||||||||||||
2004 | 10.57 | 0.10 | 1.72 | 1.82 | (0.10 | ) | (0.17 | ) | (0.27 | ) | – | 12.12 | 17.38 | 261,212 | 1.38 | 1.38 | 1.29 | 0.95 | 22 | |||||||||||||||||||||||||||||||||||||||||
2003 | 8.28 | 0.11 | 2.34 | 2.45 | (0.08 | ) | (0.08 | ) | (0.16 | ) | – | 10.57 | 29.71 | 131,813 | 1.45 | 1.45 | 1.28 | 1.28 | 20 | |||||||||||||||||||||||||||||||||||||||||
2002 | 8.59 | 0.07 | (0.29 | ) | (0.22 | ) | (0.08 | ) | (0.01 | ) | (0.09 | ) | – | 8.28 | (2.65 | )** | 12,302 | 1.54 | * | 1.54 | * | 1.28 | * | 0.97 | * | 22 | ||||||||||||||||||||||||||||||||||
Royce Total Return Fund – Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 13.73 | $ | 0.03 | $ | 1.11 | $ | 1.14 | $ | (0.02 | ) | $ | – | $ | (0.02 | ) | $ | – | $ | 14.85 | 8.31 | %** | $ | 735,986 | 2.06 | %* | 2.05 | %* | 2.05 | %* | 0.38 | %* | 12 | % | ||||||||||||||||||||||||||
2006 | 12.58 | 0.05 | 1.64 | 1.69 | (0.02 | ) | (0.52 | ) | (0.54 | ) | – | 13.73 | 13.45 | 689,311 | 2.07 | 2.06 | 2.06 | 0.34 | 25 | |||||||||||||||||||||||||||||||||||||||||
2005 | 12.24 | 0.02 | 0.87 | 0.89 | – | (0.55 | ) | (0.55 | ) | – | 12.58 | 7.18 | 606,618 | 2.10 | 2.10 | 2.10 | 0.17 | 24 | ||||||||||||||||||||||||||||||||||||||||||
2004 | 10.68 | 0.01 | 1.73 | 1.74 | (0.01 | ) | (0.17 | ) | (0.18 | ) | – | 12.24 | 16.35 | 501,635 | 2.13 | 2.13 | 2.13 | 0.10 | 22 | |||||||||||||||||||||||||||||||||||||||||
2003 | 8.37 | 0.02 | 2.37 | 2.39 | – | (0.08 | ) | (0.08 | ) | – | 10.68 | 28.61 | 309,136 | 2.19 | 2.19 | 2.19 | 0.26 | 20 | ||||||||||||||||||||||||||||||||||||||||||
2002 | 8.64 | – | (0.24 | ) | (0.24 | ) | (0.02 | ) | (0.01 | ) | (0.03 | ) | – | 8.37 | (2.74 | ) | 120,737 | 2.25 | 2.25 | 2.20 | 0.15 | 22 | ||||||||||||||||||||||||||||||||||||||
Royce Total Return Fund – Institutional Class(d) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 13.77 | $ | 0.10 | $ | 1.14 | $ | 1.24 | $ | (0.10 | ) | $ | – | $ | (0.10 | ) | $ | – | $ | 14.91 | 8.99 | %** | $ | 307,954 | 0.98 | %* | 0.98 | %* | 0.98 | %* | 1.46 | %* | 12 | % | ||||||||||||||||||||||||||
2006 | 12.63 | 0.19 | 1.65 | 1.84 | (0.18 | ) | (0.52 | ) | (0.70 | ) | – | 13.77 | 14.62 | 282,295 | 1.00 | 0.99 | 0.99 | 1.42 | 25 | |||||||||||||||||||||||||||||||||||||||||
2005 | 12.30 | 0.16 | 0.86 | 1.02 | (0.14 | ) | (0.55 | ) | (0.69 | ) | – | 12.63 | 8.31 | 214,275 | 1.00 | 1.00 | 1.00 | 1.30 | 24 | |||||||||||||||||||||||||||||||||||||||||
2004 | 10.71 | 0.13 | 1.76 | 1.89 | (0.13 | ) | (0.17 | ) | (0.30 | ) | – | 12.30 | 17.78 | 124,286 | 1.04 | 1.04 | 1.04 | 1.20 | 22 | |||||||||||||||||||||||||||||||||||||||||
2003 | 7.88 | 0.10 | 2.90 | 3.00 | (0.09 | ) | (0.08 | ) | (0.17 | ) | – | 10.71 | 38.16 | ** | 67,912 | 1.07 | * | 1.07 | * | 1.04 | * | 1.54 | * | 20 |
108 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | Net | Net Realized and Unrealized | Distributions | Distributions from Net | Ratio of Expenses to Average Net Assets | Ratio of Net Investment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Value, Beginning | Investment Income | Gain (Loss) on Investments and | Total from Investment | from Net Investment | Realized Gain on Investments and | Total | Shareholder Redemption | Net Asset Value, End | Total | Net Assets, End of Period | Prior to Fee Waivers and | Prior to Fee | Net of Fee | Income (Loss) to Average | Portfolio Turnover | |||||||||||||||||||||||||||||||||||||||||||||
of Period | (Loss) | Foreign Currency | Operations | Income | Foreign Currency | Distributions | Fees | of Period | Return | (in thousands) | Balance Credits | Waivers | Waivers | Net Assets | Rate | |||||||||||||||||||||||||||||||||||||||||||||
Royce Total Return Fund – W Class(a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 13.76 | $ | 0.10 | $ | 1.12 | $ | 1.22 | $ | (0.09 | ) | $ | – | $ | (0.09 | ) | $ | – | $ | 14.89 | 8.89 | %** | $ | 259,498 | 1.04 | %* | 1.04 | %* | 1.04 | %* | 1.40 | %* | 12 | % | ||||||||||||||||||||||||||
2006 | 12.61 | 0.18 | 1.65 | 1.83 | (0.16 | ) | (0.52 | ) | (0.68 | ) | – | 13.76 | 14.54 | 220,716 | 1.10 | 1.09 | 1.09 | 1.33 | 25 | |||||||||||||||||||||||||||||||||||||||||
2005 | 11.97 | 0.11 | 1.17 | 1.28 | (0.09 | ) | (0.55 | ) | (0.64 | ) | – | 12.61 | 10.68 | ** | 144,506 | 1.06 | * | 1.06 | * | 1.06 | * | 1.38 | * | 24 | ||||||||||||||||||||||||||||||||||||
Royce Total Return Fund – R Class(b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 14.89 | $ | 0.01 | $ | 0.01 | $ | 0.02 | $ | (0.01 | ) | $ | – | $ | (0.01 | ) | $ | – | $ | 14.90 | 0.13 | %** | $ | 100 | 32.02 | %* | 32.02 | %* | 1.74 | %* | 0.80 | %* | 12 | % | ||||||||||||||||||||||||||
Royce Heritage Fund – Investment Class(c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 14.03 | $ | 0.00 | $ | 1.11 | $ | 1.11 | $ | – | $ | – | $ | – | $ | – | $ | 15.14 | 7.91 | %** | $ | 324 | 27.17 | %* | 27.16 | %* | 1.24 | %* | 0.11 | %* | 63 | % | ||||||||||||||||||||||||||||
Royce Heritage Fund – Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 14.09 | $ | 0.00 | $ | 1.05 | $ | 1.05 | $ | – | $ | – | $ | – | $ | 0.01 | $ | 15.15 | 7.52 | %** | $ | 113,540 | 1.44 | %* | 1.43 | %* | 1.28 | %* | 0.03 | %* | 63 | % | ||||||||||||||||||||||||||||
2006 | 12.47 | 0.01 | 2.82 | 2.83 | – | (1.21 | ) | (1.21 | ) | – | 14.09 | 22.62 | 95,349 | 1.48 | 1.47 | 1.32 | 0.05 | 98 | ||||||||||||||||||||||||||||||||||||||||||
2005 | 13.00 | (0.06 | ) | 1.21 | 1.15 | – | (1.68 | ) | (1.68 | ) | – | 12.47 | 8.74 | 58,905 | 1.58 | 1.58 | 1.43 | (0.44 | ) | 142 | ||||||||||||||||||||||||||||||||||||||||
2004 | 12.19 | (0.12 | ) | 2.57 | 2.45 | – | (1.64 | ) | (1.64 | ) | – | 13.00 | 20.35 | 52,891 | 1.55 | 1.55 | 1.49 | (0.95 | ) | 86 | ||||||||||||||||||||||||||||||||||||||||
2003 | 9.03 | (0.08 | ) | 3.51 | 3.43 | – | (0.27 | ) | (0.27 | ) | – | 12.19 | 38.09 | 34,143 | 1.63 | 1.63 | 1.49 | (0.81 | ) | 25 | ||||||||||||||||||||||||||||||||||||||||
2002 | 11.47 | (0.09 | ) | (2.07 | ) | (2.16 | ) | – | (0.28 | ) | (0.28 | ) | – | 9.03 | (18.93 | ) | 23,312 | 1.63 | 1.63 | 1.49 | (0.85 | ) | 66 | |||||||||||||||||||||||||||||||||||||
Royce Heritage Fund – Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 12.47 | $ | (0.08 | ) | $ | 0.94 | $ | 0.86 | $ | – | $ | – | $ | – | $ | – | $ | 13.33 | 6.90 | %** | $ | 5,413 | 2.70 | %* | 2.69 | %* | 2.49 | %* | (1.18 | )%* | 63 | % | |||||||||||||||||||||||||||
2006 | 11.29 | (0.14 | ) | 2.53 | 2.39 | – | (1.21 | ) | (1.21 | ) | – | 12.47 | 21.08 | 3,879 | 3.20 | 3.18 | 2.49 | (1.12 | ) | 98 | ||||||||||||||||||||||||||||||||||||||||
2005 | 12.03 | (0.17 | ) | 1.11 | 0.94 | – | (1.68 | ) | (1.68 | ) | – | 11.29 | 7.70 | 2,507 | 3.99 | 3.99 | 2.49 | (1.50 | ) | 142 | ||||||||||||||||||||||||||||||||||||||||
2004 | 11.50 | (0.23 | ) | 2.40 | 2.17 | – | (1.64 | ) | (1.64 | ) | – | 12.03 | 19.11 | 1,885 | 5.21 | 5.21 | 2.49 | (1.94 | ) | 86 | ||||||||||||||||||||||||||||||||||||||||
2003 | 8.62 | (0.18 | ) | 3.33 | 3.15 | – | (0.27 | ) | (0.27 | ) | – | 11.50 | 36.65 | 762 | 8.20 | 8.20 | 2.49 | (1.81 | ) | 25 | ||||||||||||||||||||||||||||||||||||||||
2002 | 11.08 | (0.13 | ) | (2.05 | ) | (2.18 | ) | – | (0.28 | ) | (0.28 | ) | – | 8.62 | (19.78 | ) | 342 | 10.36 | 10.36 | 2.49 | (1.97 | ) | 66 | |||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund – Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 13.04 | $ | 0.07 | $ | 1.59 | $ | 1.66 | $ | – | $ | – | $ | – | $ | – | $ | 14.70 | 12.73 | %** | $ | 1,981,618 | 1.11 | %* | 1.10 | %* | 1.10 | %* | 1.03 | %* | 23 | |||||||||||||||||||||||||||||
2006 | 12.29 | (0.01 | ) | 2.32 | 2.31 | – | (1.56 | ) | (1.56 | ) | – | 13.04 | 18.76 | 1,811,073 | 1.12 | 1.11 | 1.11 | (0.05 | ) | 47 | ||||||||||||||||||||||||||||||||||||||||
2005 | 13.31 | (0.05 | ) | 0.70 | 0.65 | – | (1.67 | ) | (1.67 | ) | – | 12.29 | 4.76 | 1,490,999 | 1.14 | 1.14 | 1.14 | (0.38 | ) | 42 | ||||||||||||||||||||||||||||||||||||||||
2004 | 12.14 | (0.07 | ) | 2.17 | 2.10 | – | (0.93 | ) | (0.93 | ) | – | 13.31 | 17.51 | 1,677,215 | 1.14 | 1.14 | 1.14 | (0.55 | ) | 47 | ||||||||||||||||||||||||||||||||||||||||
2003 | 7.37 | (0.06 | ) | 5.41 | 5.35 | – | (0.58 | ) | (0.58 | ) | – | 12.14 | 72.87 | 1,311,815 | 1.15 | 1.15 | 1.15 | (0.65 | ) | 55 | ||||||||||||||||||||||||||||||||||||||||
2002 | 9.01 | (0.04 | ) | (1.50 | ) | (1.54 | ) | – | (0.11 | ) | (0.11 | ) | 0.01 | 7.37 | (17.01 | ) | 635,296 | 1.17 | 1.17 | 1.17 | (0.49 | ) | 46 | |||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund – Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 12.82 | $ | 0.05 | $ | 1.56 | $ | 1.61 | $ | – | $ | – | $ | – | $ | – | $ | 14.42 | 12.56 | %** | $ | 350,012 | 1.39 | %* | 1.38 | %* | 1.29 | %* | 0.81 | %* | 23 | % | ||||||||||||||||||||||||||||
2006 | 12.13 | (0.03 | ) | 2.28 | 2.25 | – | (1.56 | ) | (1.56 | ) | – | 12.82 | 18.51 | 291,911 | 1.40 | 1.40 | 1.29 | (0.20 | ) | 47 | ||||||||||||||||||||||||||||||||||||||||
2005 | 13.17 | (0.07 | ) | 0.70 | 0.63 | – | (1.67 | ) | (1.67 | ) | – | 12.13 | 4.66 | 167,369 | 1.41 | 1.41 | 1.29 | (0.53 | ) | 42 | ||||||||||||||||||||||||||||||||||||||||
2004 | 12.05 | (0.09 | ) | 2.14 | 2.05 | – | (0.93 | ) | (0.93 | ) | – | 13.17 | 17.22 | 230,068 | 1.43 | 1.43 | 1.29 | (0.70 | ) | 47 | ||||||||||||||||||||||||||||||||||||||||
2003 | 7.33 | (0.08 | ) | 5.38 | 5.30 | – | (0.58 | ) | (0.58 | ) | – | 12.05 | 72.59 | 90,243 | 1.45 | 1.45 | 1.29 | (0.79 | ) | 55 | ||||||||||||||||||||||||||||||||||||||||
2002 | 8.98 | (0.06 | ) | (1.48 | ) | (1.54 | ) | – | (0.11 | ) | (0.11 | ) | – | 7.33 | (17.18 | ) | 19,979 | 1.50 | 1.50 | 1.29 | (0.60 | ) | 46 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 109 |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | Net | Net Realized and Unrealized | Distributions | Distributions from Net | Ratio of Expenses to Average Net Assets | Ratio of Net Investment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Value, Beginning of Period | Investment Income (Loss) | Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | from Net Investment Income | Realized Gain on Investments and Foreign Currency | Total Distributions | Shareholder Redemption Fees | Net Asset Value, End of Period | Total Return | Net Assets, End of Period (in thousands) | Prior to Fee Waivers and Balance Credits | Prior to Fee Waivers | Net of Fee Waivers | Income (Loss) to Average Net Assets | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund – Consultant Class (a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 12.90 | $ | (0.01 | ) | $ | 1.55 | $ | 1.54 | $ | – | $ | – | $ | – | $ | – | $ | 14.44 | 11.94 | %** | $ | 9,457 | 2.46 | %* | 2.45 | %* | 2.45 | %* | (0.15 | )%* | 23 | % | |||||||||||||||||||||||||||
2006 | 14.29 | (0.12 | ) | 0.29 | 0.17 | – | (1.56 | ) | (1.56 | ) | – | 12.90 | 1.16 | ** | 4,080 | 3.75 | * | 3.74 | * | 2.49 | * | (1.24 | )* | 47 | ||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund – Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 13.11 | $ | 0.08 | $ | 1.59 | $ | 1.67 | $ | – | $ | – | $ | – | $ | – | $ | 14.78 | 12.74 | %** | $ | 435,664 | 1.02 | %* | 1.02 | %* | 1.02 | %* | 1.19 | %* | 23 | % | ||||||||||||||||||||||||||||
2006 | 12.34 | 0.00 | 2.33 | 2.33 | – | (1.56 | ) | (1.56 | ) | – | 13.11 | 18.85 | 248,710 | 1.04 | 1.03 | 1.03 | 0.03 | 47 | ||||||||||||||||||||||||||||||||||||||||||
2005 | 13.34 | (0.04 | ) | 0.71 | 0.67 | – | (1.67 | ) | (1.67 | ) | – | 12.34 | 4.90 | 199,293 | 1.05 | 1.05 | 1.04 | (0.28 | ) | 42 | ||||||||||||||||||||||||||||||||||||||||
2004 | 12.16 | (0.06 | ) | 2.17 | 2.11 | – | (0.93 | ) | (0.93 | ) | – | 13.34 | 17.57 | 193,136 | 1.06 | 1.06 | 1.04 | (0.44 | ) | 47 | ||||||||||||||||||||||||||||||||||||||||
2003 | 7.38 | (0.05 | ) | 5.41 | 5.36 | – | (0.58 | ) | (0.58 | ) | – | 12.16 | 72.91 | 85,813 | 1.08 | 1.08 | 1.04 | (0.54 | ) | 55 | ||||||||||||||||||||||||||||||||||||||||
2002 | 9.01 | (0.03 | ) | (1.49 | ) | (1.52 | ) | – | (0.11 | ) | (0.11 | ) | – | 7.38 | (16.90 | ) | 31,897 | 1.14 | 1.14 | 1.04 | (0.32 | ) | 46 | |||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund – R Class(b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 14.43 | $ | (0.01 | ) | $ | 0.27 | $ | 0.26 | $ | – | $ | – | $ | – | $ | – | $ | 14.69 | 1.80 | %** | $ | 102 | 32.18 | %* | 32.18 | %* | 1.74 | %* | (0.66 | )%* | 23 | % | |||||||||||||||||||||||||||
Royce Special Equity Fund – Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 19.72 | $ | 0.07 | $ | 2.15 | $ | 2.22 | $ | – | $ | – | $ | – | $ | – | $ | 21.94 | 11.26 | %** | $ | 476,199 | 1.12 | %* | 1.12 | %* | 1.12 | %* | 0.72 | %* | 17 | % | ||||||||||||||||||||||||||||
2006 | 18.70 | 0.11 | 2.53 | 2.64 | (0.11 | ) | (1.51 | ) | (1.62 | ) | – | 19.72 | 14.00 | 438,427 | 1.13 | 1.13 | 1.13 | 0.51 | 16 | |||||||||||||||||||||||||||||||||||||||||
2005 | 19.61 | 0.23 | (0.42 | ) | (0.19 | ) | (0.22 | ) | (0.50 | ) | (0.72 | ) | – | 18.70 | (0.99 | ) | 523,961 | 1.14 | 1.14 | 1.14 | 0.94 | 22 | ||||||||||||||||||||||||||||||||||||||
2004 | 17.97 | 0.20 | 2.28 | 2.48 | (0.18 | ) | (0.67 | ) | (0.85 | ) | 0.01 | 19.61 | 13.91 | 856,537 | 1.15 | 1.15 | 1.15 | 1.02 | 17 | |||||||||||||||||||||||||||||||||||||||||
2003 | 14.24 | 0.05 | 3.86 | 3.91 | (0.05 | ) | (0.15 | ) | (0.20 | ) | 0.02 | 17.97 | 27.64 | 721,334 | 1.19 | 1.19 | 1.19 | 0.35 | 22 | |||||||||||||||||||||||||||||||||||||||||
2002 | 12.37 | 0.02 | 1.73 | 1.75 | (0.03 | ) | – | (0.03 | ) | 0.15 | 14.24 | 15.32 | 397,755 | 1.20 | 1.20 | 1.20 | 0.27 | 41 | ||||||||||||||||||||||||||||||||||||||||||
Royce Special Equity Fund – Service Class(c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 19.73 | $ | 0.04 | $ | 2.16 | $ | 2.20 | $ | – | $ | – | $ | – | $ | 0.01 | $ | 21.94 | 11.20 | %** | $ | 2,326 | 2.13 | %* | 2.13 | %* | 1.35 | %* | 0.43 | %* | 17 | % | ||||||||||||||||||||||||||||
2006 | 18.66 | 0.10 | 2.48 | 2.58 | – | (1.51 | ) | (1.51 | ) | – | 19.73 | 13.70 | 1,200 | 1.69 | 1.69 | 1.35 | 0.52 | 16 | ||||||||||||||||||||||||||||||||||||||||||
2005 | 19.56 | 0.17 | (0.41 | ) | (0.24 | ) | (0.16 | ) | (0.50 | ) | (0.66 | ) | – | 18.66 | (1.23 | ) | 7,606 | 1.48 | 1.48 | 1.35 | 0.65 | 22 | ||||||||||||||||||||||||||||||||||||||
2004 | 17.95 | 0.09 | 2.35 | 2.44 | (0.16 | ) | (0.67 | ) | (0.83 | ) | – | 19.56 | 13.66 | 12,743 | 1.55 | 1.55 | 1.35 | 0.74 | 17 | |||||||||||||||||||||||||||||||||||||||||
2003 | 16.38 | (0.02 | ) | 1.80 | 1.78 | (0.06 | ) | (0.15 | ) | (0.21 | ) | – | 17.95 | 10.90 | ** | 5,387 | 1.79 | * | 1.79 | * | 1.35 | * | (0.04 | )* | 22 | |||||||||||||||||||||||||||||||||||
Royce Special Equity Fund – Consultant Class(d) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 19.43 | $ | (0.04 | ) | $ | 2.11 | $ | 2.07 | $ | – | $ | – | $ | – | $ | – | $ | 21.50 | 10.65 | %** | $ | 17,682 | 2.20 | %* | 2.19 | %* | 2.19 | %* | (0.35 | )%* | 17 | % | |||||||||||||||||||||||||||
2006 | 18.55 | (0.12 | ) | 2.51 | 2.39 | – | (1.51 | ) | (1.51 | ) | – | 19.43 | 12.75 | 17,231 | 2.23 | 2.22 | 2.22 | (0.60 | ) | 16 | ||||||||||||||||||||||||||||||||||||||||
2005 | 19.47 | (0.03 | ) | (0.39 | ) | (0.42 | ) | – | (0.50 | ) | (0.50 | ) | – | 18.55 | (2.16 | ) | 17,517 | 2.26 | 2.26 | 2.26 | (0.15 | ) | 22 | |||||||||||||||||||||||||||||||||||||
2004 | 17.89 | (0.02 | ) | 2.28 | 2.26 | (0.01 | ) | (0.67 | ) | (0.68 | ) | – | 19.47 | 12.66 | 20,277 | 2.28 | 2.28 | 2.28 | (0.09 | ) | 17 | |||||||||||||||||||||||||||||||||||||||
2003 | 15.06 | (0.08 | ) | 3.07 | 2.99 | (0.01 | ) | (0.15 | ) | (0.16 | ) | – | 17.89 | 19.91 | ** | 9,944 | 3.21 | * | 3.21 | * | 2.20 | * | (0.81 | )* | 22 |
110 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | Net | Net Realized and Unrealized | Distributions | Distributions from Net | Ratio of Expenses to Average Net Assets | Ratio of Net Investment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Value, Beginning of Period | Investment Income (Loss) | Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | from Net Investment Income | Realized Gain on Investments and Foreign Currency | Total Distributions | Shareholder Redemption Fees | Net Asset Value, End of Period | Total Return | Net Assets, End of Period (in thousands) | Prior to Fee Waivers and Balance Credits | Prior to Fee Waivers | Net of Fee Waivers | Income (Loss) to Average Net Assets | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||||||||
Royce Special Equity Fund – Institutional Class(a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 19.68 | $ | 0.08 | $ | 2.14 | $ | 2.22 | $ | – | $ | – | $ | – | $ | – | $ | 21.90 | 11.28 | %** | $ | 158,327 | 1.04 | %* | 1.04 | %* | 1.04 | %* | 0.80 | %* | 17 | % | ||||||||||||||||||||||||||||
2006 | 18.66 | 0.12 | 2.54 | 2.66 | (0.13 | ) | (1.51 | ) | (1.64 | ) | – | 19.68 | 14.12 | 147,661 | 1.05 | 1.05 | 1.05 | 0.58 | 16 | |||||||||||||||||||||||||||||||||||||||||
2005 | 19.58 | 0.21 | (0.39 | ) | (0.18 | ) | (0.24 | ) | (0.50 | ) | (0.74 | ) | – | 18.66 | (0.93 | ) | 154,195 | 1.05 | 1.05 | 1.05 | 1.08 | 22 | ||||||||||||||||||||||||||||||||||||||
2004 | 17.95 | 0.10 | 2.40 | 2.50 | (0.20 | ) | (0.67 | ) | (0.87 | ) | – | 19.58 | 13.97 | 162,819 | 1.07 | 1.07 | 1.07 | 1.07 | 17 | |||||||||||||||||||||||||||||||||||||||||
2003 | 15.78 | 0.01 | 2.37 | 2.38 | (0.06 | ) | (0.15 | ) | (0.21 | ) | – | 17.95 | 15.14 | ** | 13,439 | 1.36 | * | 1.36 | * | 1.10 | * | 0.24 | * | 22 | ||||||||||||||||||||||||||||||||||||
Royce Value Fund – Investment Class(b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 11.22 | $ | 0.01 | $ | 1.34 | $ | 1.35 | $ | – | $ | – | $ | – | $ | – | $ | 12.57 | 12.03 | %** | $ | 4,094 | 2.25 | %* | 2.24 | %* | 1.24 | %* | 0.35 | %* | 23 | % | ||||||||||||||||||||||||||||
Royce Value Fund – Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 11.06 | $ | (0.00 | ) | $ | 1.50 | $ | 1.50 | $ | – | $ | – | $ | – | $ | – | $ | 12.56 | 13.56 | %** | $ | 690,780 | 1.41 | %* | 1.40 | %* | 1.33 | %* | (0.00 | )%* | 23 | % | |||||||||||||||||||||||||||
2006 | 9.67 | (0.02 | ) | 1.63 | 1.61 | (0.02 | ) | (0.22 | ) | (0.24 | ) | 0.02 | 11.06 | 16.76 | 452,383 | 1.43 | 1.42 | 1.31 | (0.15 | ) | 41 | |||||||||||||||||||||||||||||||||||||||
2005 | 8.39 | (0.03 | ) | 1.46 | 1.43 | – | (0.16 | ) | (0.16 | ) | 0.01 | 9.67 | 17.23 | 113,451 | 1.53 | 1.53 | 1.28 | (0.31 | ) | 44 | ||||||||||||||||||||||||||||||||||||||||
2004 | 6.56 | (0.06 | ) | 2.07 | 2.01 | – | (0.19 | ) | (0.19 | ) | 0.01 | 8.39 | 30.94 | 38,713 | 2.15 | 2.15 | 1.49 | (0.77 | ) | 83 | ||||||||||||||||||||||||||||||||||||||||
2003 | 4.35 | (0.04 | ) | 2.40 | 2.36 | – | (0.15 | ) | (0.15 | ) | – | 6.56 | 54.32 | 4,034 | 3.46 | 3.46 | 1.49 | (0.73 | ) | 181 | ||||||||||||||||||||||||||||||||||||||||
2002 | 5.89 | (0.06 | ) | (1.32 | ) | (1.38 | ) | – | (0.16 | ) | (0.16 | ) | – | 4.35 | (23.51 | ) | 1,319 | 3.08 | 3.08 | 1.49 | (1.26 | ) | 89 | |||||||||||||||||||||||||||||||||||||
Royce Value Fund – Consultant Class(c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 10.98 | $ | (0.07 | ) | $ | 1.94 | $ | 1.42 | $ | – | $ | – | $ | – | $ | – | $ | 12.40 | 12.93 | %** | $ | 10,229 | 2.49 | %* | 2.48 | %* | 2.48 | %* | (1.12 | )%* | 23 | % | |||||||||||||||||||||||||||
2006 | 10.94 | (0.07 | ) | 0.32 | 0.25 | (0.00 | ) | (0.22 | ) | (0.22 | ) | 0.01 | 10.98 | 2.33 | ** | 4,424 | 4.35 | * | 4.34 | * | 2.49 | * | (0.93 | )* | 41 | |||||||||||||||||||||||||||||||||||
Royce Value Fund – Institutional Class(d) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 11.04 | $ | 0.02 | $ | 1.49 | $ | 1.51 | $ | – | $ | – | $ | – | $ | – | $ | 12.55 | 13.68 | %** | $ | 188,977 | 1.03 | %* | 1.03 | %* | 1.03 | %* | 0.32 | %* | 23 | % | ||||||||||||||||||||||||||||
2006 | 10.52 | 0.01 | 0.77 | 0.78 | (0.04 | ) | (0.22 | ) | (0.26 | ) | – | 11.04 | 7.35 | ** | 13,898 | 1.27 | * | 1.27 | * | 1.04 | * | 0.43 | * | 41 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 111 |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | Net | Net Realized and Unrealized | Distributions | Distributions from Net | Ratio of Expenses to Average Net Assets | Ratio of Net Investment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Value, Beginning of Period | Investment Income (Loss) | Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | from Net Investment Income | Realized Gain on Investments and Foreign Currency | Total Distributions | Shareholder Redemption Fees | Net Asset Value, End of Period | Total Return | Net Assets, End of Period (in thousands) | Prior to Fee Waivers and Balance Credits | Prior to Fee Waivers | Net of Fee Waivers | Income (Loss) to Average Net Assets | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||||||||
Royce Value Plus Fund – Investment Class(a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 14.38 | $ | (0.01 | ) | $ | 1.54 | $ | 1.53 | $ | – | $ | – | $ | – | $ | – | $ | 15.91 | 10.64 | %** | $ | 5,662 | 2.00 | %* | 1.99 | %* | 1.24 | %* | (0.29 | )%* | 21 | % | |||||||||||||||||||||||||||
Royce Value Plus Fund – Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 14.09 | $ | (0.03 | ) | $ | 1.83 | $ | 1.80 | $ | – | $ | – | $ | – | $ | – | $ | 15.89 | 12.78 | %** | $ | 2,631,632 | 1.40 | %* | 1.39 | %* | 1.32 | %* | (0.41 | )%* | 21 | % | |||||||||||||||||||||||||||
2006 | 12.03 | (0.06 | ) | 2.38 | 2.32 | (0.00 | ) | (0.27 | ) | (0.27 | ) | 0.01 | 14.09 | 19.35 | 1,513,626 | 1.41 | 1.40 | 1.26 | (0.45 | ) | 31 | |||||||||||||||||||||||||||||||||||||||
2005 | 10.94 | (0.04 | ) | 1.47 | 1.43 | – | (0.35 | ) | (0.35 | ) | 0.01 | 12.03 | 13.20 | 293,856 | 1.42 | 1.42 | 1.17 | (0.54 | ) | 62 | ||||||||||||||||||||||||||||||||||||||||
2004 | 8.57 | (0.08 | ) | 2.47 | 2.39 | – | (0.04 | ) | (0.04 | ) | 0.02 | 10.94 | 28.19 | 211,981 | 1.55 | 1.55 | 1.30 | (0.84 | ) | 56 | ||||||||||||||||||||||||||||||||||||||||
2003 | 4.97 | (0.05 | ) | 4.01 | 3.96 | – | (0.36 | ) | (0.36 | ) | – | 8.57 | 79.88 | 20,405 | 2.01 | 2.01 | 1.49 | (0.91 | ) | 161 | ||||||||||||||||||||||||||||||||||||||||
2002 | 5.97 | (0.07 | ) | (0.81 | ) | (0.88 | ) | – | (0.12 | ) | (0.12 | ) | – | 4.97 | (14.74 | ) | 3,934 | 2.10 | 2.10 | 1.49 | (1.29 | ) | 110 | |||||||||||||||||||||||||||||||||||||
Royce Value Plus Fund – Consultant Class (b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 13.97 | $ | (0.10 | ) | $ | 1.81 | $ | 1.71 | $ | – | $ | – | $ | – | $ | – | $ | 15.68 | 12.24 | %** | $ | 38,803 | 2.24 | %* | 2.22 | %* | 2.22 | %* | (1.30 | )%* | 21 | % | |||||||||||||||||||||||||||
2006 | 13.85 | (0.16 | ) | 0.55 | 0.39 | – | (0.27 | ) | (0.27 | ) | – | 13.97 | 2.78 | ** | 12,956 | 2.91 | * | 2.90 | * | 2.49 | * | (1.61 | )* | 31 | ||||||||||||||||||||||||||||||||||||
Royce Value Plus Fund – Institutional Class (c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 14.08 | $ | (0.01 | ) | $ | 1.82 | $ | 1.81 | $ | – | $ | – | $ | – | $ | – | $ | 15.89 | 12.86 | %** | $ | 81,694 | 1.06 | %* | 1.05 | %* | 1.04 | %* | (0.12 | )%* | 21 | % | |||||||||||||||||||||||||||
2006 | 14.20 | (0.04 | ) | 0.21 | 0.17 | (0.02 | ) | (0.27 | ) | (0.29 | ) | – | 14.08 | 1.16 | ** | 30,985 | 1.17 | * | 1.17 | * | 1.04 | * | (0.18 | )* | 31 | |||||||||||||||||||||||||||||||||||
Royce Technology Value Fund | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 6.41 | $ | (0.03 | ) | $ | 0.74 | $ | 0.71 | $ | – | $ | – | $ | – | $ | – | $ | 7.12 | 11.08 | %** | $ | 20,864 | 2.04 | %* | 2.02 | %* | 1.91 | %* | (0.95 | )%* | 99 | % | |||||||||||||||||||||||||||
2006 | 6.15 | (0.09 | ) | 0.60 | 0.51 | – | (0.26 | ) | (0.26 | ) | 0.01 | 6.41 | 8.53 | 21,041 | 2.17 | 2.15 | 1.99 | (1.35 | ) | 117 | ||||||||||||||||||||||||||||||||||||||||
2005 | 6.73 | (0.10 | ) | (0.02 | ) | (0.12 | ) | – | (0.47 | ) | (0.47 | ) | 0.01 | 6.15 | (1.82 | ) | 27,705 | 2.18 | 2.18 | 1.99 | (1.62 | ) | 94 | |||||||||||||||||||||||||||||||||||||
2004 | 8.25 | (0.15 | ) | (0.69 | ) | (0.84 | ) | – | (0.72 | ) | (0.72 | ) | 0.04 | 6.73 | (9.64 | ) | 37,602 | 2.13 | 2.13 | 1.99 | (1.94 | ) | 107 | |||||||||||||||||||||||||||||||||||||
2003 | 4.33 | (0.11 | ) | 4.01 | 3.90 | – | (0.01 | ) | (0.01 | ) | 0.03 | 8.25 | 90.72 | 102,408 | 2.11 | 2.11 | 1.99 | (1.51 | ) | 64 | ||||||||||||||||||||||||||||||||||||||||
2002 | 5.00 | (0.17 | ) | (0.50 | ) | (0.67 | ) | – | – | – | – | 4.33 | (13.40 | ) | 4,786 | 2.73 | 2.73 | 1.99 | (1.74 | ) | 45 | |||||||||||||||||||||||||||||||||||||||
Royce 100 Fund—Investment Class (a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 8.42 | $ | 0.00 | $ | 0.75 | $ | 0.75 | $ | – | $ | – | $ | – | $ | – | $ | 9.17 | 8.91 | %** | $ | 950 | 6.72 | %* | 6.72 | %* | 1.24 | %* | (0.17 | )%* | 36 | % | ||||||||||||||||||||||||||||
Royce 100 Fund—Service Class (d) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 8.32 | $ | 0.00 | $ | 0.84 | $ | 0.84 | $ | – | $ | – | $ | – | $ | – | $ | 9.16 | 10.10 | %** | $ | 36,739 | 1.55 | %* | 1.54 | %* | 1.29 | %* | 0.04 | %* | 36 | % | ||||||||||||||||||||||||||||
2006 | 7.52 | (0.02 | ) | 1.04 | 1.02 | – | (0.23 | ) | (0.23 | ) | 0.01 | 8.32 | 13.70 | 34,691 | 1.73 | 1.72 | 1.47 | (0.26 | ) | 45 | ||||||||||||||||||||||||||||||||||||||||
2005 | 6.85 | (0.03 | ) | 1.06 | 1.03 | – | (0.36 | ) | (0.36 | ) | – | 7.52 | 14.89 | 16,892 | 2.07 | 2.07 | 1.49 | (0.49 | ) | 60 | ||||||||||||||||||||||||||||||||||||||||
2004 | 5.53 | (0.02 | ) | 1.52 | 1.50 | – | (0.18 | ) | (0.18 | ) | – | 6.85 | 27.24 | 8,748 | 2.84 | 2.84 | 1.49 | (0.34 | ) | 97 | ||||||||||||||||||||||||||||||||||||||||
2003 | 5.00 | (0.01 | ) | 0.54 | 0.53 | – | (0.00 | ) | (0.00 | ) | – | 5.53 | 10.66 | ** | 2,502 | 3.68 | * | 3.68 | * | 1.49 | * | (0.39 | )* | 8 |
112 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | Net | Net Realized and Unrealized | Distributions | Distributions from Net | Ratio of Expenses to Average Net Assets | Ratio of Net Investment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Value, Beginning of Period | Investment Income (Loss) | Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | from Net Investment Income | Realized Gain on Investments and Foreign Currency | Total Distributions | Shareholder Redemption Fees | Net Asset Value, End of Period | Total Return | Net Assets, End of Period (in thousands) | Prior to Fee Waivers and Balance Credits | Prior to Fee Waivers | Net of Fee Waivers | Income (Loss) to Average Net Assets | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||||||||||
Royce Discovery Fund(a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 6.87 | $ | (0.02 | ) | $ | 0.09 | $ | 0.07 | $ | – | $ | – | $ | – | $ | – | $ | 6.94 | 1.02 | %** | $ | 4,469 | 2.85 | %* | 2.84 | %* | 1.49 | %* | (0.53 | )%* | 55 | % | |||||||||||||||||||||||||||
2006 | 6.33 | (0.02 | ) | 1.08 | 1.06 | – | (0.52 | ) | (0.52 | ) | – | 6.87 | 16.84 | 4,405 | 3.75 | 3.73 | 1.49 | (0.37 | ) | 91 | ||||||||||||||||||||||||||||||||||||||||
2005 | 6.39 | (0.02 | ) | 0.51 | 0.49 | – | (0.55 | ) | (0.55 | ) | – | 6.33 | 7.60 | 3,612 | 3.75 | 3.75 | 1.49 | (0.38 | ) | 105 | ||||||||||||||||||||||||||||||||||||||||
2004 | 5.70 | (0.05 | ) | 0.81 | 0.76 | – | (0.07 | ) | (0.07 | ) | – | 6.39 | 13.35 | 3,217 | 4.12 | 4.12 | 1.49 | (0.91 | ) | 111 | ||||||||||||||||||||||||||||||||||||||||
2003 | 5.00 | (0.01 | ) | 0.71 | 0.70 | – | – | – | – | 5.70 | 14.00 | ** | 1,359 | 8.69 | * | 8.69 | * | 1.49 | * | (1.05 | )* | 1 | ||||||||||||||||||||||||||||||||||||||
Royce Financial Services Fund(b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 7.37 | $ | 0.04 | $ | 0.06 | $ | 0.10 | $ | – | $ | – | $ | – | $ | 0.01 | $ | 7.48 | 1.49 | %** | $ | 5,415 | 2.33 | %* | 2.31 | %* | 1.49 | %* | 1.18 | %* | 22 | % | ||||||||||||||||||||||||||||
2006 | 6.26 | 0.08 | 1.46 | 1.54 | (0.06 | ) | (0.37 | ) | (0.43 | ) | – | 7.37 | 24.77 | 4,080 | 3.71 | 3.70 | 1.49 | 1.44 | 14 | |||||||||||||||||||||||||||||||||||||||||
2005 | 5.66 | 0.05 | 0.64 | 0.69 | (0.03 | ) | (0.06 | ) | (0.09 | ) | – | 6.26 | 12.23 | 1,761 | 3.87 | 3.87 | 1.49 | 0.97 | 9 | |||||||||||||||||||||||||||||||||||||||||
2004 | 5.00 | (0.01 | ) | 0.76 | 0.75 | – | (0.09 | ) | (0.09 | ) | – | 5.66 | 15.08 | 1,418 | 4.70 | 4.70 | 1.49 | (0.16 | ) | 22 | ||||||||||||||||||||||||||||||||||||||||
Royce Dividend Value Fund(c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 6.92 | $ | 0.09 | $ | 0.37 | $ | 0.46 | $ | (0.07 | ) | $ | – | $ | (0.07 | ) | $ | 0.01 | $ | 7.32 | 6.82 | %** | $ | 8,462 | 1.89 | %* | 1.87 | %* | 1.49 | %* | 2.60 | %* | 54 | % | ||||||||||||||||||||||||||
2006 | 5.98 | 0.11 | 1.07 | 1.18 | (0.09 | ) | (0.15 | ) | (0.24 | ) | – | 6.92 | 19.87 | 6,819 | 2.73 | 2.72 | 1.49 | 1.72 | 19 | |||||||||||||||||||||||||||||||||||||||||
2005 | 5.65 | 0.07 | 0.34 | 0.41 | (0.05 | ) | (0.03 | ) | (0.08 | ) | – | 5.98 | 7.31 | 3,596 | 2.89 | 2.89 | 1.49 | 1.33 | 4 | |||||||||||||||||||||||||||||||||||||||||
2004 | 5.00 | (0.01 | ) | 0.66 | 0.65 | – | – | – | – | 5.65 | 13.00 | ** | 1,650 | 5.60 | * | 5.60 | * | 1.49 | * | (0.17 | )* | 8 | ||||||||||||||||||||||||||||||||||||||
Royce International Value Fund(d) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 10.00 | $ | (0.05 | ) | $ | 1.63 | $ | 1.58 | $ | – | $ | – | $ | – | $ | – | $ | 11.58 | 15.80 | %** | $ | 16,902 | 2.81 | %* | 2.56 | %* | 1.69 | %* | (0.46 | )%* | 7 | % | |||||||||||||||||||||||||||
Royce International Smaller-Companies Fund(d) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 10.00 | $ | 0.06 | $ | 0.97 | $ | 1.03 | $ | – | $ | – | $ | – | $ | – | $ | 11.03 | 10.30 | %** | $ | 4,824 | 4.54 | %* | 3.77 | %* | 1.69 | %* | 1.52 | %* | 16 | % |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 113 |
Summary of Significant Accounting Policies: |
Pennsylvania Mutual Fund, Royce Micro-Cap Fund, Royce Premier Fund, Royce Low-Priced Stock Fund, Royce Total Return Fund, Royce Heritage Fund, Royce Opportunity Fund, Royce Special Equity Fund, Royce Value Fund, Royce Value Plus Fund, Royce Technology Value Fund, Royce 100 Fund, Royce Discovery Fund, Royce Financial Services Fund, Royce Dividend Value Fund, Royce International Value Fund and Royce International Smaller-Companies Fund (the “Fund” or “Funds”), are seventeen series of The Royce Fund (the “Trust”), a diversified open-end management investment company organized as a Delaware business trust. |
Classes of shares have equal rights as to earnings and assets, except that each class may bear different fees and expenses for distribution, shareholder servicing, registration, shareholder reports, compensating balance credits and different expense reimbursements. Investment income, realized and unrealized capital gains or losses on investments and foreign currency, and expenses other than those attributable to a specific class are allocated to each class of shares based on its relative net assets. The Institutional Class of Royce Low-Priced Stock Fund commenced operations on January 3, 2006, with an initial transfer from the Fund’s Service Class. During the period ended December 31, 2006, total transfers from the Fund’s Service Class to the Institutional Class were $585,107,011 (33,244,344 shares). |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. |
Valuation of Investments: |
Securities are valued as of the close of trading on the New York Stock Exchange (NYSE) (generally 4:00 p.m. Eastern time) on the valuation date. Securities that trade on an exchange, and securities traded on Nasdaq’s Electronic Bulletin Board, are valued at their last reported sales price or Nasdaq official closing price taken from the primary market in which each security trades or, if no sale is reported for such day, at their bid price. Other over-the-counter securities for which market quotations are readily available are valued at their highest bid price. Securities for which market quotations are not readily available are valued at their fair value under procedures established by the Board of Trustees. In addition, if, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and may make the closing price unreliable, the Fund may fair value the security. The Funds use an independent pricing service to provide fair value estimates for relevant non-U.S. equity securities on days when the U.S. market volatility exceeds a certain threshold. This pricing service uses proprietary correlations it has developed between the movement of prices of non-U.S. equity securities and indices of U.S.-traded securities, futures contracts and other indications to estimate the fair value of relevant non-U.S. securities. Bonds and other fixed income securities may be valued by reference to other securities with comparable ratings, interest rates and maturities, using established independent pricing services. Investments in money market funds are valued at net asset value per share. |
114 | The Royce Funds 2007 Semiannual Report to Shareholders |
Foreign Currency: |
The Funds value their non-U.S. securities in U.S. dollars on the basis of foreign currency exchange rates provided to the Funds by their custodian, State Street Bank and Trust Company. The effects of changes in foreign exchange rates on investments and other assets and liabilities are included with net realized and unrealized gains and losses on investments. |
Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, expiration of currency forward contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, including investments in securities at the end of the reporting period, as a result of changes in foreign currency exchange rates. |
Investment Transactions |
and Related Investment Income: |
Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Non-cash dividend income is recorded at the fair market value of the securities received. Interest income is recorded on an accrual basis. Realized gains and losses from investment transactions are determined on the basis of identified cost for book and tax purposes. |
Expenses: |
The Funds incur direct and indirect expenses. Expenses directly attributable to a Fund are charged to the Fund’s operations, while expenses applicable to more than one series of the Trust are allocated equitably. Allocated personnel and occupancy costs related to The Royce Funds are included in administrative and office facilities expenses. The Fund has adopted a deferred fee agreement that allows the Trustees to defer the receipt of all or a portion of Trustees Fees otherwise payable. The deferred fees are invested in certain Royce Funds until distribution in accordance with the agreement. |
Compensating Balance Credits: |
The Fund has arrangements with its custodian bank and transfer agent, whereby a portion of the custodian’s fee and transfer agent’s fee is paid indirectly by credits earned on the Fund’s cash on deposit with the bank and transfer agent. These deposit arrangements are an alternative to purchasing overnight investments. |
Distributions and Taxes: |
As qualified regulated investment companies under Subchapter M of the Internal Revenue Code, the Funds are not subject to income taxes to the extent that each Fund distributes substantially all of its taxable income for its fiscal year. |
Royce Total Return Fund and Royce Dividend Value Fund pay any dividends from net investment income quarterly and make any distributions from net realized gains annually in December. The other Funds pay any dividends and capital gain distributions annually in December. Because federal income tax regulations differ from generally |
accepted accounting principles, income and capital gain distributions determined in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Accordingly, the character of distributions and composition of net assets for tax purposes differ from those reflected in the accompanying financial statements. |
Repurchase Agreements: |
The Funds may enter into repurchase agreements with institutions that the Funds’ investment adviser has determined are creditworthy. Each Fund restricts repurchase agreements to maturities of no more than seven days. Securities pledged as collateral for repurchase agreements, which are held until maturity of the repurchase agreements, are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). Repurchase agreements could involve certain risks in the event of default or insolvency of the counter-party, including possible delays or restrictions upon the ability of each Fund to dispose of its underlying securities. |
Securities Lending: |
The Funds loan securities to qualified institutional investors for the purpose of realizing additional income. Collateral on all securities loaned for the Funds is accepted in cash and cash equivalents and invested temporarily by the custodian. The collateral is equal to at least 100% of the current market value of the loaned securities. The market value of the loaned securities is determined at the close of business of the Funds and any additional required collateral is delivered to the Funds on the next business day. |
Line of Credit: |
The Funds, along with certain other Royce Funds, participate in a $75 million line of credit (“Credit Agreement”) to be used for temporary or |
emergency purposes. Pursuant to the Credit Agreement, each participating Fund is liable only for principal and interest payments related to borrowings made by that Fund. Borrowings under the Credit Agreement bear interest at a rate equal to the prevailing federal funds rate plus the federal funds rate margin. The Funds did not utilize the line of credit during the six months ended June 30, 2007. |
Recent Accounting Pronouncements: |
Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”) provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more- likely-than-not threshold would be recorded as a tax benefit or expense in the current year. FIN 48 was adopted for the Funds on June 29, 2007. There was no material impact to the financial statements or disclosures thereto as a result of the adoption of this pronouncement. |
FASB Statement of Financial Accounting Standard No. 157, “Fair Value Measurement” (“FAS 157”), provides enhanced guidance for using fair value to measure assets and liabilities. The standard requires companies to provide expanded information about the assets and liabilities measured at fair value and the potential effect of these fair valuations on an entity’s financial performance. The standard does not expand the use of fair value in any new circumstances, but provides clarification on acceptable fair valuation methods and applications. Adoption of FAS 157 is required for fiscal years beginning after November 15, 2007. The standard is not expected to materially impact the Fund’s financial statements. |
The Royce Funds 2007 Semiannual Report to Shareholders | 115 |
Capital Share Transactions (in shares): | ||||||||||||||||||||||
Shares issued for reinvestment | Shares | Net increase (decrease) in | ||||||||||||||||||||
Shares sold | of distributions | redeemed | shares outstanding | |||||||||||||||||||
Period ended | Period ended | Period ended | Period ended | |||||||||||||||||||
6/30/07 | Period ended | 6/30/07 | Period ended | 6/30/07 | Period ended | 6/30/07 | Period ended | |||||||||||||||
(unaudited) | 12/31/06 | (unaudited) | 12/31/06 | (unaudited) | 12/31/06 | (unaudited) | 12/31/06 | |||||||||||||||
Pennsylvania Mutual Fund | �� | |||||||||||||||||||||
Investment Class | 48,543,263 | 103,945,685 | – | 12,895,291 | (22,182,805 | ) | (42,076,445 | ) | 26,360,458 | 74,764,531 | ||||||||||||
Service Class | 1,922,883 | 3,599,517 | – | 224,505 | (698,823 | ) | (361,193 | ) | 1,224,060 | 3,462,829 | ||||||||||||
Consultant Class | 9,519,836 | 25,664,383 | – | 6,822,493 | (8,170,982 | ) | (13,908,167 | ) | 1,348,854 | 18,578,709 | ||||||||||||
R Class | 7,868 | – | – | 7,868 | ||||||||||||||||||
Royce Micro-Cap Fund | ||||||||||||||||||||||
Investment Class | 4,060,038 | 11,937,861 | – | 4,046,965 | (4,643,906 | ) | (7,962,099 | ) | (583,868 | ) | 8,022,727 | |||||||||||
Service Class | 1,040,372 | 340,725 | – | 44,624 | (124,953 | ) | (122,905 | ) | 915,419 | 262,444 | ||||||||||||
Consultant Class | 420,305 | 2,815,439 | – | 1,424,188 | (1,053,158 | ) | (2,131,961 | ) | (632,853 | ) | 2,107,666 | |||||||||||
Royce Premier Fund | ||||||||||||||||||||||
Investment Class | 12,147,541 | 46,198,999 | – | 7,473,875 | (21,996,554 | ) | (48,818,682 | ) | (9,849,013 | ) | 4,854,192 | |||||||||||
Service Class | 2,909,274 | 6,445,593 | – | 399,246 | (1,881,376 | ) | (3,910,972 | ) | 1,027,898 | 2,933,867 | ||||||||||||
Consultant Class | 119,449 | 681,533 | – | 102,482 | (235,252 | ) | (685,582 | ) | (115,803 | ) | 98,433 | |||||||||||
Institutional Class | 3,185,590 | 11,376,429 | – | 466,032 | (1,675,235 | ) | (5,734,740 | ) | 1,510,355 | 6,107,721 | ||||||||||||
W Class | 507,376 | 1,966,985 | – | 597,345 | (1,216,129 | ) | (2,418,692 | ) | (708,753 | ) | 145,638 | |||||||||||
R Class | 4,907 | – | – | 4,907 | ||||||||||||||||||
Royce Low-Priced Stock Fund | ||||||||||||||||||||||
Investment Class | 77,537 | – | – | 77,537 | ||||||||||||||||||
Service Class | 23,175,364 | 50,203,056 | – | 20,685,424 | (42,272,089 | ) | (81,086,805 | ) | (19,096,725 | ) | (10,198,325 | ) | ||||||||||
Institutional Class | 17,227,321 | 35,753,252 | – | 3,328,685 | (3,083,903 | ) | (2,939,669 | ) | 14,143,418 | 36,142,268 | ||||||||||||
R Class | 5,350 | – | – | 5,350 | ||||||||||||||||||
Royce Total Return Fund | ||||||||||||||||||||||
Investment Class | 28,924,197 | 71,097,825 | 1,743,122 | 13,766,021 | (37,587,109 | ) | (100,045,052 | ) | (6,919,790 | ) | (15,181,206 | ) | ||||||||||
Service Class | 6,570,472 | 8,128,910 | 145,137 | 1,218,585 | (10,755,569 | ) | (7,362,610 | ) | (4,039,960 | ) | 1,984,885 | |||||||||||
Consultant Class | 3,414,838 | 8,246,391 | 65,448 | 1,852,071 | (4,144,835 | ) | (8,114,439 | ) | (664,549 | ) | 1,984,023 | |||||||||||
Institutional Class | 3,403,704 | 7,511,493 | 125,986 | 912,372 | (3,363,039 | ) | (4,896,104 | ) | 166,651 | 3,527,761 | ||||||||||||
W Class | 2,230,739 | 5,285,305 | 105,226 | 741,486 | (949,915 | ) | (1,447,649 | ) | 1,386,050 | 4,579,142 | ||||||||||||
R Class | 6,716 | 4 | – | 6,720 | ||||||||||||||||||
Royce Heritage Fund | ||||||||||||||||||||||
Investment Class | 21,553 | – | (135 | ) | 21,418 | |||||||||||||||||
Service Class | 1,285,925 | 1,664,793 | – | 513,592 | (558,518 | ) | (131,394 | ) | 727,407 | 2,046,991 | ||||||||||||
Consultant Class | 128,624 | 102,655 | – | 25,827 | (33,526 | ) | (39,565 | ) | 95,098 | 88,917 | ||||||||||||
Royce Opportunity Fund | ||||||||||||||||||||||
Investment Class | 18,212,597 | 33,714,583 | – | 13,757,954 | (22,230,601 | ) | (29,934,625 | ) | (4,018,004 | ) | 17,537,912 | |||||||||||
Service Class | 7,865,670 | 10,282,356 | – | 2,387,561 | (6,381,828 | ) | (3,705,647 | ) | 1,483,842 | 8,964,270 | ||||||||||||
Consultant Class | 369,823 | 293,023 | – | 29,383 | (31,170 | ) | (6,038 | ) | 338,653 | 316,368 | ||||||||||||
Institutional Class | 12,044,484 | 7,466,386 | – | 1,392,033 | (1,537,916 | ) | (6,037,552 | ) | 10,506,568 | 2,820,867 | ||||||||||||
R Class | 6,930 | – | – | 6,930 | ||||||||||||||||||
Royce Special Equity Fund | ||||||||||||||||||||||
Investment Class | 2,852,649 | 3,235,198 | – | 1,564,333 | (3,378,571 | ) | (10,584,352 | ) | (525,922 | ) | (5,784,821 | ) | ||||||||||
Service Class | 82,041 | 35,516 | – | 4,240 | (36,867 | ) | (386,430 | ) | 45,174 | (346,674 | ) | |||||||||||
Consultant Class | 58,539 | 127,284 | – | 56,834 | (122,980 | ) | (241,491 | ) | (64,441 | ) | (57,373 | ) | ||||||||||
Institutional Class | 1,262,254 | 822,412 | – | 568,392 | (1,536,152 | ) | (2,148,005 | ) | (273,898 | ) | (757,201 | ) | ||||||||||
Royce Value Fund | ||||||||||||||||||||||
Investment Class | 326,380 | – | (747 | ) | 325,633 | |||||||||||||||||
Service Class | 19,731,667 | 38,529,342 | – | 753,705 | (5,638,193 | ) | (10,129,028 | ) | 14,093,474 | 29,154,019 | ||||||||||||
Consultant Class | 437,701 | 414,554 | – | 5,656 | (15,598 | ) | (17,288 | ) | 422,103 | 402,922 | ||||||||||||
Institutional Class | 14,666,082 | 1,591,409 | – | 18,023 | (865,771 | ) | (350,403 | ) | 13,800,311 | 1,259,029 | ||||||||||||
Royce Value Plus Fund | ||||||||||||||||||||||
Investment Class | 356,007 | – | – | 356,007 | ||||||||||||||||||
Service Class | 76,029,034 | 95,350,447 | – | 1,681,321 | (17,770,647 | ) | (14,053,384 | ) | 58,258,387 | 82,978,384 | ||||||||||||
Consultant Class | 1,622,829 | 925,489 | – | 12,947 | (75,636 | ) | (11,120 | ) | 1,547,193 | 927,316 | ||||||||||||
Institutional Class | 3,131,067 | 2,203,690 | – | 21,933 | (191,581 | ) | (25,262 | ) | 2,939,486 | 2,200,361 | ||||||||||||
Royce Technology Value Fund | ||||||||||||||||||||||
Service Class | 235,294 | 679,297 | – | 127,391 | (586,674 | ) | (2,029,122 | ) | (351,380 | ) | (1,222,434 | ) | ||||||||||
116 | The Royce Funds 2007 Semiannual Report to Shareholders |
Capital Share Transactions (in shares) (continued): | ||||||||||||||||||||
Shares issued for reinvestment | Shares | Net increase (decrease) in | ||||||||||||||||||
Shares sold | of distributions | redeemed | shares outstanding | |||||||||||||||||
Period ended | Period ended | Period ended | Period ended | |||||||||||||||||
6/30/07 | Period ended | 6/30/07 | Period ended | 6/30/07 | Period ended | 6/30/07 | Period ended | |||||||||||||
(unaudited) | 12/31/06 | (unaudited) | 12/31/06 | (unaudited) | 12/31/06 | (unaudited) | 12/31/06 | |||||||||||||
Royce 100 Fund | ||||||||||||||||||||
Investment Class | 105,151 | – | (1,616 | ) | 103,535 | |||||||||||||||
Service Class | 1,093,827 | 2,668,771 | – | 86,359 | (1,255,168 | ) | (831,104 | ) | (161,341 | ) | 1,924,026 | |||||||||
Royce Discovery Fund | ||||||||||||||||||||
Service Class | 86,768 | 97,209 | – | 42,980 | (84,210 | ) | (70,034 | ) | 2,558 | 70,155 | ||||||||||
Royce Financial Services Fund | ||||||||||||||||||||
Service Class | 321,833 | 268,596 | – | 28,919 | (151,467 | ) | (24,805 | ) | 170,366 | 272,710 | ||||||||||
Royce Dividend Value Fund | ||||||||||||||||||||
Service Class | 268,769 | 505,353 | 10,728 | 27,799 | (109,555 | ) | (149,118 | ) | 169,942 | 384,034 | ||||||||||
Royce International Value Fund | ||||||||||||||||||||
Service Class | 1,468,960 | – | (9,114 | ) | 1,459,846 | |||||||||||||||
Royce International Smaller- | ||||||||||||||||||||
Companies Fund | ||||||||||||||||||||
Service Class | 440,076 | – | (2,863 | ) | 437,213 |
Investment Adviser and Distributor:
Investment Adviser: Under the Trust’s investment advisory agreements with Royce & Associates, LLC (“Royce”), Royce is entitled to receive Investment Advisory fees that are computed daily and payable monthly. Royce’s commitment to waive its fees and reimburse expenses to the extent necessary to maintain certain Funds’ net annual operating expense ratios at specified levels through December 31, 2007 is shown below to the extent that it impacted net expenses for the period ended June 30, 2007. See the Prospectus for contractual waiver expiration dates.
Committed net annual | Six months | ||||||||||||||||||||||||||
Annual contractual | operating expense ratio cap | ended June 30, 2007 | |||||||||||||||||||||||||
advisory fee as a | |||||||||||||||||||||||||||
percentage of | Investment | Service | Consultant | Institutional | W | R | Net advisory | Advisory | |||||||||||||||||||
average net assetsb | Class | Class | Class | Class | Class | Class | fees | fees waived | |||||||||||||||||||
Pennsylvania Mutual Fund | 0.75 | %a | N/A | 1.14 | % | N/A | N/A | N/A | 1.74 | % | $ | 16,741,123 | $ | – | |||||||||||||
Royce Micro-Cap Fund | 1.30 | % | N/A | 1.66 | % | N/A | N/A | N/A | N/A | 6,137,853 | – | ||||||||||||||||
Royce Premier Fund | 0.96 | % | N/A | 1.29 | % | N/A | N/A | N/A | 1.74 | % | 22,788,721 | – | |||||||||||||||
Royce Low-Priced Stock Fund | 1.11 | % | 1.24 | % | 1.49 | % | N/A | N/A | N/A | 1.74 | % | 27,057,055 | – | ||||||||||||||
Royce Total Return Fund | 0.95 | % | N/A | 1.29 | % | N/A | N/A | N/A | 1.74 | % | 29,439,715 | – | |||||||||||||||
Royce Heritage Fund | 1.00 | % | 1.24 | % | N/A | 2.49 | % | N/A | N/A | N/A | 551,884 | – | |||||||||||||||
Royce Opportunity Fund | 0.99 | % | N/A | 1.29 | % | 2.49 | % | N/A | N/A | 1.74 | % | 12,726,102 | – | ||||||||||||||
Royce Special Equity Fund | 1.00 | % | N/A | 1.35 | % | N/A | N/A | N/A | N/A | 3,069,218 | – | ||||||||||||||||
Royce Value Fund | 1.00 | % | 1.24 | % | N/A | 2.49 | % | 1.04 | % | N/A | N/A | 3,623,810 | – | ||||||||||||||
Royce Value Plus Fund | 0.99 | % | 1.24 | % | N/A | 2.49 | % | 1.04 | % | N/A | N/A | 10,805,625 | – | ||||||||||||||
Royce Technology Value Fund | 1.25 | %c | N/A | 1.69 | %c | N/A | N/A | N/A | N/A | 143,455 | 2,798 | ||||||||||||||||
Royce 100 Fund | 1.00 | % | 1.24 | % | N/A | N/A | N/A | N/A | N/A | 174,883 | – | ||||||||||||||||
Royce Discovery Fund | 1.00 | % | N/A | 1.49 | % | N/A | N/A | N/A | N/A | – | 23,014 | ||||||||||||||||
Royce Financial Services Fund | 1.00 | % | N/A | 1.49 | % | N/A | N/A | N/A | N/A | 10,717 | 14,038 | ||||||||||||||||
Royce Dividend Value Fund | 1.00 | % | N/A | 1.49 | % | N/A | N/A | N/A | N/A | 33,398 | 5,886 | ||||||||||||||||
Royce International Value Fund | 1.25 | % | N/A | 1.69 | % | N/A | N/A | N/A | N/A | 15,667 | 15,436 | ||||||||||||||||
Royce International Smaller-Companies Fund | 1.25 | % | N/A | 1.69 | % | N/A | N/A | N/A | N/A | – | 14,401 | ||||||||||||||||
Notes to Financial Statements (unaudited) (continued) | ||||||||||||||||||||||||
Distributor: Royce Fund Services, Inc., the distributor of the Trust’s shares, is a wholly owned subsidiary of Royce. | ||||||||||||||||||||||||
Period ended June 30, 2007 | ||||||||||||||||||||||||
Annual contractual | ||||||||||||||||||||||||
distribution fee as a percentage | Net | Distribution | ||||||||||||||||||||||
of average net assets | distribution fees | fees waived | ||||||||||||||||||||||
Pennsylvania Mutual Fund – Service Class | 0.25 | % | $ | 64,451 | $ | – | ||||||||||||||||||
Pennsylvania Mutual Fund – Consultant Class | 1.00 | % | 6,086,838 | – | ||||||||||||||||||||
Pennsylvania Mutual Fund – R Class | 0.50 | % | – | 54 | ||||||||||||||||||||
Royce Micro-Cap Fund – Service Class | 0.25 | % | 17,496 | – | ||||||||||||||||||||
Royce Micro-Cap Fund – Consultant Class | 1.00 | % | 1,125,127 | – | ||||||||||||||||||||
Royce Premier Fund – Service Class | 0.25 | % | 266,049 | – | ||||||||||||||||||||
Royce Premier Fund – Consultant Class | 1.00 | % | 265,318 | – | ||||||||||||||||||||
Royce Premier Fund – R Class | 0.50 | % | – | 53 | ||||||||||||||||||||
Royce Low-Priced Stock Fund – Service Class | 0.25 | % | 4,395,636 | 837,265 | ||||||||||||||||||||
Royce Low-Priced Stock Fund – R Class | 0.50 | % | – | 53 | ||||||||||||||||||||
Royce Total Return Fund – Service Class | 0.25 | % | 519,888 | – | ||||||||||||||||||||
Royce Total Return Fund – Consultant Class | 1.00 | % | 3,554,354 | – | ||||||||||||||||||||
Royce Total Return Fund – R Class | 0.50 | % | – | 54 | ||||||||||||||||||||
Royce Heritage Fund – Service Class | 0.25 | % | 52,860 | 79,290 | ||||||||||||||||||||
Royce Heritage Fund – Consultant Class | 1.00 | % | 22,818 | – | ||||||||||||||||||||
Royce Opportunity Fund – Service Class | 0.25 | % | 414,473 | – | ||||||||||||||||||||
Royce Opportunity Fund – Consultant Class | 1.00 | % | 33,566 | – | ||||||||||||||||||||
Royce Opportunity Fund – R Class | 0.50 | % | – | 54 | ||||||||||||||||||||
Royce Special Equity Fund – Service Class | 0.25 | % | 2,085 | – | ||||||||||||||||||||
Royce Special Equity Fund – Consultant Class | 1.00 | % | 86,580 | – | ||||||||||||||||||||
Royce Value Fund – Service Class | 0.25 | % | 502,548 | 195,435 | ||||||||||||||||||||
Royce Value Fund – Consultant Class | 1.00 | % | 36,540 | – | ||||||||||||||||||||
Royce Value Plus Fund – Service Class | 0.25 | % | 1,891,021 | 735,398 | ||||||||||||||||||||
Royce Value Plus Fund – Consultant Class | 1.00 | % | 131,641 | – | ||||||||||||||||||||
Royce Technology Value Fund – Service Class | 0.25 | % | 16,871 | 8,690 | ||||||||||||||||||||
Royce 100 Fund – Service Class | 0.25 | % | – | 43,176 | ||||||||||||||||||||
Royce Discovery Fund – Service Class | 0.25 | % | – | 5,754 | ||||||||||||||||||||
Royce Financial Services Fund – Service Class | 0.25 | % | – | 6,189 | ||||||||||||||||||||
Royce Dividend Value Fund – Service Class | 0.25 | % | 785 | 9,036 | ||||||||||||||||||||
Royce International Value Fund – Service Class | 0.25 | % | – | 6,221 | ||||||||||||||||||||
Royce International Smaller-Companies Fund – Service Class | 0.25 | % | – | 2,880 | ||||||||||||||||||||
Purchases and Sales of Investment Securities: | ||||||||||||||||||||||||
For the six months ended June 30, 2007, the cost of purchases and the proceeds from sales of investment securities, other than short-term securities and collateral received for securities loaned, were as follows: |
Purchases | Sales | Purchases | Sales | |||||||
Pennsylvania Mutual Fund | $1,142,527,711 | $896,204,385 | Royce Value Plus Fund | $1,245,505,437 | $398,348,774 | |||||
Royce Micro-Cap Fund | 200,066,888 | 243,824,680 | Royce Technology Value Fund | 16,930,852 | 20,106,237 | |||||
Royce Premier Fund | 293,422,152 | 769,171,337 | Royce 100 Fund | 11,310,100 | 15,764,383 | |||||
Royce Low-Priced Stock Fund | 446,950,044 | 718,115,753 | Royce Discovery Fund | 2,484,787 | 2,663,547 | |||||
Royce Total Return Fund | 705,416,374 | 835,565,745 | Royce Financial Services Fund | 1,780,085 | 935,690 | |||||
Royce Heritage Fund | 68,229,720 | 62,937,593 | Royce Dividend Value Fund | 4,754,109 | 3,986,956 | |||||
Royce Opportunity Fund | 662,949,921 | 551,840,285 | Royce International Value Fund | 11,798,827 | 294,460 | |||||
Royce Special Equity Fund | 103,020,411 | 133,917,330 | Royce International Smaller- | |||||||
Royce Value Fund | 437,465,525 | 146,272,743 | Companies Fund | 3,310,651 | 262,305 | |||||
118 | The Royce Funds 2007 Semiannual Report to Shareholders |
Class Specific Expenses: | |||||||||||||||||||||||
Class specific expenses were as follows: | |||||||||||||||||||||||
Expenses | |||||||||||||||||||||||
Net | Transfer Agent | Reimbursed by | |||||||||||||||||||||
Distribution | Shareholder | Shareholder | Balance | Investment | |||||||||||||||||||
Fees | Servicing | Reports | Registration | Credits | Total | Adviser | |||||||||||||||||
Pennsylvania Mutual Fund – Investment Class | $ | – | $ | 1,004,986 | $ | 451,134 | $ | 52,342 | $ | (81,527 | ) | $ | 1,426,935 | $ | – | ||||||||
Pennsylvania Mutual Fund – Service Class | 64,451 | 5,385 | 1,603 | 2,529 | (767 | ) | 73,201 | – | |||||||||||||||
Pennsylvania Mutual Fund – Consultant Class | 6,086,838 | 334,259 | 196,679 | 19,409 | (56,523 | ) | 6,580,662 | – | |||||||||||||||
Pennsylvania Mutual Fund – R Class | – | 3,322 | 43 | 2 | – | 3,367 | 3,256 | ||||||||||||||||
6,151,289 | 1,347,952 | 649,459 | 74,282 | (138,817 | ) | ||||||||||||||||||
Royce Micro-Cap Fund – Investment Class | – | 222,837 | 186,159 | 20,990 | (20,636 | ) | 409,350 | – | |||||||||||||||
Royce Micro-Cap Fund – Service Class | 17,496 | 9,293 | 1,000 | 1,674 | (164 | ) | 29,299 | 5,153 | |||||||||||||||
Royce Micro-Cap Fund – Consultant Class | 1,125,127 | 62,735 | 58,727 | 4,175 | (11,100 | ) | 1,239,664 | – | |||||||||||||||
1,142,623 | 294,865 | 245,886 | 26,839 | (31,900 | ) | ||||||||||||||||||
Royce Premier Fund – Investment Class | – | 1,522,767 | 459,831 | 28,916 | (87,559 | ) | 1,923,955 | – | |||||||||||||||
Royce Premier Fund – Service Class | 266,049 | 104,822 | 14,324 | 8,217 | (2,678 | ) | 390,734 | 70,045 | |||||||||||||||
Royce Premier Fund – Consultant Class | 265,318 | 13,350 | 9,362 | 5,052 | (2,607 | ) | 290,475 | – | |||||||||||||||
Royce Premier Fund – Institutional Class | – | 6,764 | 36,669 | 3,472 | (4,407 | ) | 42,498 | – | |||||||||||||||
Royce Premier Fund – W Class | – | 6,458 | 69,576 | 6,512 | (3,790 | ) | 78,756 | – | |||||||||||||||
Royce Premier Fund – R Class | – | 3,322 | 43 | 2 | – | 3,367 | 3,278 | ||||||||||||||||
531,367 | 1,657,483 | 589,805 | 52,171 | (101,041 | ) | ||||||||||||||||||
Royce Low-Priced Stock Fund – Investment Class | – | 5,061 | 78 | 7,126 | – | 12,265 | 11,891 | ||||||||||||||||
Royce Low-Priced Stock Fund – Service Class | 4,395,636 | 2,322,959 | 503,339 | 25,464 | (86,175 | ) | 7,161,223 | – | |||||||||||||||
Royce Low-Priced Stock Fund – Institutional Class | – | 8,245 | 145,318 | 7,349 | (8,587 | ) | 152,325 | – | |||||||||||||||
Royce Low-Priced Stock Fund – R Class | – | 3,345 | 37 | 2 | – | 3,384 | 3,312 | ||||||||||||||||
4,395,636 | 2,339,610 | 648,772 | 39,941 | (94,762 | ) | ||||||||||||||||||
Royce Total Return Fund – Investment Class | – | 1,763,269 | 526,403 | 44,888 | (116,282 | ) | 2,218,278 | – | |||||||||||||||
Royce Total Return Fund – Service Class | 519,888 | 209,987 | 17,752 | 6,101 | (5,768 | ) | 747,960 | 89,542 | |||||||||||||||
Royce Total Return Fund – Consultant Class | 3,554,354 | 201,336 | 122,207 | 9,234 | (34,601 | ) | 3,852,530 | – | |||||||||||||||
Royce Total Return Fund – Institutional Class | – | 6,356 | 11,483 | 2,294 | (3,870 | ) | 16,263 | – | |||||||||||||||
Royce Total Return Fund – W Class | – | 6,092 | 74,448 | 6,732 | (3,005 | ) | 84,267 | – | |||||||||||||||
Royce Total Return Fund – R Class | – | 3,322 | 42 | 2 | – | 3,366 | 3,276 | ||||||||||||||||
4,074,242 | 2,190,362 | 752,335 | 69,251 | (163,526 | ) | ||||||||||||||||||
Royce Heritage Fund – Investment Class | – | 5,061 | 63 | 7,103 | – | 12,227 | 12,112 | ||||||||||||||||
Royce Heritage Fund – Service Class | 52,860 | 37,252 | 20,515 | 13,301 | (3,864 | ) | 120,064 | – | |||||||||||||||
Royce Heritage Fund – Consultant Class | 22,818 | 6,356 | 3,309 | 5,118 | (99 | ) | 37,502 | 4,554 | |||||||||||||||
75,678 | 48,669 | 23,887 | 25,522 | (3,963 | ) | ||||||||||||||||||
Royce Opportunity Fund – Investment Class | – | 680,543 | 157,132 | 29,379 | (44,132 | ) | 822,922 | – | |||||||||||||||
Royce Opportunity Fund – Service Class | 414,473 | 172,294 | 25,331 | 6,639 | (4,100 | ) | 614,637 | 155,826 | |||||||||||||||
Royce Opportunity Fund – Consultant Class | 33,566 | 5,497 | 3,754 | 5,850 | (303 | ) | 48,364 | – | |||||||||||||||
Royce Opportunity Fund – Institutional Class | – | 6,566 | 2,411 | 3,998 | (4,499 | ) | 8,476 | – | |||||||||||||||
Royce Opportunity Fund – R Class | – | 3,345 | 55 | 2 | – | 3,402 | 3,317 | ||||||||||||||||
448,039 | 868,245 | 188,683 | 45,868 | (53,034 | ) | ||||||||||||||||||
Royce Special Equity Fund – Investment Class | – | 144,500 | 47,540 | 13,271 | (12,837 | ) | 192,474 | – | |||||||||||||||
Royce Special Equity Fund – Service Class | 2,085 | 4,889 | 776 | 1,504 | (33 | ) | 9,221 | 6,474 | |||||||||||||||
Royce Special Equity Fund – Consultant Class | 86,580 | 6,825 | 3,374 | 4,614 | (753 | ) | 100,640 | – | |||||||||||||||
Royce Special Equity Fund – Institutional Class | – | 5,701 | 1,637 | 16 | (1,825 | ) | 5,529 | – | |||||||||||||||
88,665 | 161,915 | 53,327 | 19,405 | (15,448 | ) | ||||||||||||||||||
Royce Value Fund – Investment Class | – | 4,993 | 90 | 5,759 | (1 | ) | 10,841 | 8,776 | |||||||||||||||
Royce Value Fund – Service Class | 502,548 | 258,188 | 70,886 | 35,267 | (13,691 | ) | 853,198 | – | |||||||||||||||
Royce Value Fund – Consultant Class | 36,540 | 5,715 | 5,280 | 6,096 | (366 | ) | 53,265 | – | |||||||||||||||
Royce Value Fund – Institutional Class | – | 5,781 | 782 | 3,535 | (1,831 | ) | 8,267 | – | |||||||||||||||
539,088 | 274,677 | 77,038 | 50,657 | (15,889 | ) | ||||||||||||||||||
Royce Value Plus Fund – Investment Class | – | 4,993 | 116 | 5,777 | – | 10,886 | 8,181 | ||||||||||||||||
Royce Value Plus Fund – Service Class | 1,891,021 | 980,619 | 337,853 | 85,783 | (57,223 | ) | 3,238,053 | – | |||||||||||||||
Royce Value Plus Fund – Consultant Class | 131,641 | 7,287 | 15,214 | 7,402 | (1,209 | ) | 160,335 | – | |||||||||||||||
Royce Value Plus Fund – Institutional Class | – | 5,186 | 4,441 | 866 | (459 | ) | 10,034 | 2,601 | |||||||||||||||
2,022,662 | 998,085 | 357,624 | 99,828 | (58,891 | ) | ||||||||||||||||||
Royce 100 Fund – Investment Class | – | 5,062 | 79 | 7,238 | – | 12,379 | 11,955 | ||||||||||||||||
Royce 100 Fund – Service Class | – | 23,404 | 4,640 | 9,452 | (1,105 | ) | 36,391 | – | |||||||||||||||
– | 28,466 | 4,719 | 16,690 | (1,105 | ) | ||||||||||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 119 |
Notes to Financial Statements (unaudited) (continued) | |||||||||
Tax Information: | |||||||||
At June 30, 2007, net unrealized appreciation (depreciation) based on identified cost for tax purposes was as follows: | |||||||||
Net Unrealized | Gross Unrealized | ||||||||
Appreciation | |||||||||
Tax Basis Cost | (Depreciation) | Appreciation | Depreciation | ||||||
Pennsylvania Mutual Fund | $3,903,558,050 | $1,038,575,431 | $1,150,930,086 | $112,354,655 | |||||
Royce Micro-Cap Fund | 917,813,359 | 215,609,714 | 242,876,380 | 27,266,666 | |||||
Royce Premier Fund | 3,417,072,127 | 1,623,536,225 | 1,674,936,508 | 51,400,283 | |||||
Royce Low-Priced Stock Fund | 3,821,517,318 | 1,306,438,708 | 1,471,455,777 | 165,017,069 | |||||
Royce Total Return Fund | 4,583,625,163 | 1,800,568,720 | 1,929,403,316 | 128,834,596 | |||||
Royce Heritage Fund | 126,002,544 | 18,674,156 | 22,518,736 | 3,844,580 | |||||
Royce Opportunity Fund | 2,598,944,312 | 509,413,140 | 635,718,806 | 126,305,666 | |||||
Royce Special Equity Fund | 463,485,770 | 195,373,501 | 198,759,972 | 3,386,471 | |||||
Royce Value Fund | 903,936,421 | 106,156,871 | 119,290,167 | 13,133,296 | |||||
Royce Value Plus Fund | 2,823,957,023 | 295,242,084 | 370,196,611 | 74,954,527 | |||||
Royce Technology Value Fund | 20,038,906 | 649,682 | 1,292,381 | 642,699 | |||||
Royce 100 Fund | 31,817,675 | 5,889,350 | 6,181,931 | 292,581 | |||||
Royce Discovery Fund | 4,089,281 | 374,036 | 611,004 | 236,968 | |||||
Royce Financial Services Fund | 5,046,209 | 616,410 | 757,289 | 140,879 | |||||
Royce Dividend Value Fund | 7,689,113 | 758,393 | 1,032,630 | 274,237 | |||||
Royce International Value Fund | 15,949,352 | 343,462 | 589,092 | 245,630 | |||||
Royce International Smaller- Companies Fund | 4,499,646 | 166,356 | 199,116 | 32,760 | |||||
The primary difference between book and tax basis cost is the timing of the recognition of losses on securities sold for book and tax purposes. | |||||||||
Transactions in Affiliated Companies: | |||||||||||||||||||||||
An “Affiliated Company,” as defined in the Investment Company Act of 1940, is a company in which a fund owns 5% or more of the company’s outstanding voting securities at any time during the period. The following transactions were effected in shares of such companies for the six months ended June 30, 2007. | |||||||||||||||||||||||
Market | Realized | Market | |||||||||||||||||||||
Shares | Value | Cost of | Cost of | Gain | Dividend | Shares | Value | ||||||||||||||||
Affiliated Company | 12/31/06 | 12/31/06 | Purchases | Sales | (Loss) | Income | 6/30/07 | 6/30/07 | |||||||||||||||
Pennsylvania Mutual Fund | |||||||||||||||||||||||
Barrett Business Services | 384,189 | $ | 8,997,706 | $ | 5,929,911 | $ | 496,432 | $ | 4,901 | $ | 75,950 | 613,801 | $ | 15,854,480 | |||||||||
Cutter & Buck* | 1,053,100 | 11,341,887 | – | 10,838,138 | 3,965,054 | 73,717 | |||||||||||||||||
Hi-Tech Pharmacal | 768,753 | 9,355,724 | 551,205 | 1,641,804 | (435,250 | ) | – | 700,153 | 8,359,827 | ||||||||||||||
LECG Corporation | 1,123,200 | 20,756,736 | 4,916,504 | – | – | – | 1,455,500 | 21,992,605 | |||||||||||||||
Nutraceutical International | 853,810 | 13,071,831 | – | 304,919 | (62,819 | ) | – | 838,810 | 13,899,082 | ||||||||||||||
Pervasive Software | 1,922,600 | 6,940,586 | – | 703,646 | (79,266 | ) | – | 1,766,600 | 8,126,360 | ||||||||||||||
SM&A | 1,819,900 | 10,555,420 | – | 5,535,671 | (1,359,849 | ) | – | 1,197,766 | 8,396,340 | ||||||||||||||
Semitool* | 1,710,367 | 22,764,985 | – | 2,428,021 | (396,298 | ) | – | ||||||||||||||||
Stanley Furniture | 780,324 | 16,737,950 | 130,535 | – | – | 156,065 | 786,024 | 16,144,933 | |||||||||||||||
U.S. Physical Therapy | 1,007,575 | 12,342,794 | – | 832,510 | (152,390 | ) | – | 958,575 | 12,912,005 | ||||||||||||||
Weyco Group | 590,500 | 14,673,925 | – | – | – | 118,100 | 590,500 | 15,902,165 | |||||||||||||||
Zapata Corporation | 1,009,600 | 7,067,200 | – | – | – | – | 1,009,600 | 6,814,800 | |||||||||||||||
154,606,744 | 1,484,083 | 423,832 | 128,402,597 | ||||||||||||||||||||
Royce Micro-Cap Fund | |||||||||||||||||||||||
Inforte Corporation* | 670,200 | 2,506,548 | – | 3,448,639 | (1,163,257 | ) | – | ||||||||||||||||
Key Technology* | 286,143 | 4,289,284 | – | 191,320 | 90,223 | – | |||||||||||||||||
LaCrosse Footwear | 277,792 | 3,686,300 | 580,002 | – | – | 46,514 | 311,492 | 5,628,660 | |||||||||||||||
Orchid Cellmark* | 1,572,322 | 4,874,198 | 232,750 | 2,184,467 | (409,183 | ) | – | ||||||||||||||||
15,356,330 | (1,482,217 | ) | 46,514 | 5,628,660 | |||||||||||||||||||
Royce Premier Fund | |||||||||||||||||||||||
Arkansas Best | 1,914,302 | 68,914,872 | 6,868,245 | 1,491,395 | (67,988 | ) | 601,216 | 2,056,902 | 80,157,471 | ||||||||||||||
Cabot Microelectronics | 1,805,800 | 61,288,852 | – | 749,428 | 106,684 | – | 1,780,800 | 63,200,592 | |||||||||||||||
Cognex Corporation | 2,824,117 | 67,270,467 | 855,962 | – | – | 485,497 | 2,862,717 | 64,439,760 | |||||||||||||||
Dionex Corporation | 1,170,500 | 66,379,055 | – | – | – | – | 1,170,500 | 83,093,795 | |||||||||||||||
EGL* | 2,393,600 | 71,281,408 | – | 40,395,965 | 50,830,758 | – | |||||||||||||||||
Lincoln Electric Holdings | 2,769,597 | 167,339,051 | – | – | – | 1,218,623 | 2,769,597 | 205,614,881 | |||||||||||||||
Nu Skin Enterprises Cl. A | 4,086,500 | 74,496,895 | – | – | – | 858,165 | 4,086,500 | 67,427,250 | |||||||||||||||
Pan American Silver* | 4,525,900 | 113,916,903 | – | 19,718,172 | 6,615,073 | – | |||||||||||||||||
Ritchie Bros. Auctioneers | 1,776,200 | 95,097,748 | – | – | – | 634,103 | 1,776,200 | 111,225,644 | |||||||||||||||
Schnitzer Steel Industries Cl. A | 1,591,300 | 63,174,610 | – | – | – | 54,104 | 1,591,300 | 76,286,922 | |||||||||||||||
Silver Standard Resources | 2,851,900 | 87,667,406 | 37,565,285 | 3,682,880 | 1,179,474 | – | 3,757,300 | 129,138,401 | |||||||||||||||
120 | The Royce Funds 2007 Semiannual Report to Shareholders |
Transactions in Affiliated Companies (continued): | |||||||||||||||||||||||
Market | Realized | Market | |||||||||||||||||||||
Shares | Value | Cost of | Cost of | Gain | Dividend | Shares | Value | ||||||||||||||||
Affiliated Company | 12/31/06 | 12/31/06 | Purchases | Sales | (Loss) | Income | 6/30/07 | 6/30/07 | |||||||||||||||
Royce Premier Fund (continued) | |||||||||||||||||||||||
Simpson Manufacturing | 3,755,400 | $ | 118,858,410 | $ | – | $ | 14,296,220 | $ | (2,235,632 | ) | $ | 638,972 | 3,385,400 | $ | 114,223,396 | ||||||||
Thor Industries | 2,973,700 | 130,813,063 | 6,463,339 | 1,792,105 | 389,216 | 420,707 | 3,086,400 | 139,320,096 | |||||||||||||||
Unit Corporation | 2,588,500 | 125,412,825 | 1,131,608 | – | – | – | 2,613,500 | 164,415,285 | |||||||||||||||
Viasys Healthcare* | 1,656,900 | 46,094,958 | – | 34,264,320 | 36,684,994 | – | |||||||||||||||||
Winnebago Industries | 2,125,600 | 69,953,496 | – | 4,816,713 | 294,617 | 393,680 | 1,968,400 | 58,107,168 | |||||||||||||||
Woodward Governor | 1,921,812 | 76,315,155 | – | – | – | 422,799 | 1,921,812 | 103,143,650 | |||||||||||||||
1,504,275,174 | 93,797,196 | 5,727,866 | 1,459,794,311 | ||||||||||||||||||||
Royce Low-Priced Stock Fund | |||||||||||||||||||||||
Alamos Gold | 4,054,200 | 33,583,649 | 7,757,430 | – | – | – | 5,293,700 | 27,331,941 | |||||||||||||||
Arctic Cat | 1,298,360 | 22,838,152 | – | – | – | 181,770 | 1,298,360 | 25,707,528 | |||||||||||||||
Bruker BioSciences* | 5,353,757 | 40,206,715 | – | 7,176,891 | 3,875,418 | – | |||||||||||||||||
Cache | 1,052,800 | 26,572,672 | 2,302,593 | – | – | – | 1,206,800 | 16,014,236 | |||||||||||||||
Caliper Life Sciences | 1,865,100 | 10,668,372 | 2,818,965 | – | – | – | 2,381,229 | 11,167,964 | |||||||||||||||
CEVA | 1,306,800 | 8,454,996 | – | 261,095 | (46,829 | ) | – | 1,281,800 | 10,895,300 | ||||||||||||||
Cell Genesys* | 3,180,600 | 10,782,234 | – | 3,635,838 | (2,497,550 | ) | – | ||||||||||||||||
CryptoLogic* | 630,675 | 14,631,660 | – | 1,841,199 | 561,521 | 108,258 | |||||||||||||||||
eFunds Corporation* | 3,021,700 | 83,096,750 | – | 15,437,437 | 14,962,744 | – | |||||||||||||||||
eResearch Technology | 3,504,500 | 23,585,285 | – | – | – | – | 3,504,500 | 33,327,795 | |||||||||||||||
Harris Steel Group* | 2,052,600 | 76,548,964 | – | 37,512,689 | 42,816,125 | – | |||||||||||||||||
Hecla Mining* | 6,088,000 | 46,634,080 | – | 6,654,871 | 3,091,657 | – | |||||||||||||||||
iPass | 3,389,100 | 19,927,908 | – | – | – | – | 3,389,100 | 18,368,922 | |||||||||||||||
KVH Industries | 1,150,200 | 12,203,622 | – | – | – | – | 1,150,200 | 10,087,254 | |||||||||||||||
Lexicon Pharmaceuticals | 4,962,300 | 17,913,903 | 228,483 | – | – | – | 5,027,300 | 16,137,633 | |||||||||||||||
Metal Management | 2,307,300 | 87,331,305 | – | 8,380,619 | 6,759,199 | 313,883 | 1,967,800 | 86,720,946 | |||||||||||||||
Natuzzi ADR | 3,015,400 | 25,661,054 | – | – | – | – | 3,015,400 | 23,972,430 | |||||||||||||||
Northern Orion Resources* | 8,181,600 | 29,944,656 | – | 1,381,199 | 1,366,048 | – | |||||||||||||||||
Nu Skin Enterprises Cl. A | 3,342,900 | 60,941,067 | – | – | – | 702,009 | 3,342,900 | 55,157,850 | |||||||||||||||
Olympic Steel | 720,200 | 16,010,046 | – | – | – | 43,212 | 720,200 | 20,640,932 | |||||||||||||||
Omega Protein | 2,001,100 | 15,468,503 | – | 4,433,062 | (309,060 | ) | – | 1,491,100 | 13,807,586 | ||||||||||||||
PC-Tel | 1,358,600 | 12,702,910 | 2,653,849 | – | – | – | 1,618,600 | 14,162,750 | |||||||||||||||
Palm Harbor Homes | 1,498,300 | 21,006,166 | – | – | – | – | 1,498,300 | 21,200,945 | |||||||||||||||
PLATO Learning | 1,336,312 | 7,229,448 | 3,779,622 | – | – | – | 2,086,237 | 9,596,690 | |||||||||||||||
Possis Medical | 1,134,000 | 15,286,320 | – | – | – | – | 1,134,000 | 12,337,920 | |||||||||||||||
Silvercorp Metals | 2,285,900 | 33,617,618 | 5,150,765 | – | – | – | 2,615,100 | 44,311,246 | |||||||||||||||
Steel Technologies* | 912,200 | 16,009,110 | – | 17,497,774 | 9,656,597 | 84,330 | |||||||||||||||||
TTM Technologies | 2,049,935 | 23,225,764 | 2,025,327 | – | – | – | 2,250,035 | 29,250,455 | |||||||||||||||
Tesco Corporation | 2,615,200 | 46,210,584 | – | 8,470,711 | 4,145,669 | – | 2,105,505 | 66,428,683 | |||||||||||||||
Total Energy Services Trust | 1,616,700 | 16,553,100 | 3,390,182 | – | – | 822,044 | 1,966,700 | 20,677,813 | |||||||||||||||
VIVUS | 3,138,500 | 11,361,370 | – | 507,313 | (111 | ) | – | 3,038,500 | 15,891,355 | ||||||||||||||
886,207,983 | 84,381,428 | 2,255,506 | 603,196,174 | ||||||||||||||||||||
Royce Total Return Fund | |||||||||||||||||||||||
Bancorp Rhode Island | 260,600 | 11,270,950 | – | – | – | 78,180 | 260,600 | 9,967,950 | |||||||||||||||
Bel Fuse Cl. B* | 596,817 | 20,763,263 | 1,314,739 | 3,163,880 | 374,866 | 59,346 | |||||||||||||||||
Carmike Cinemas | 642,100 | 13,092,419 | – | – | – | 112,368 | 642,100 | 14,100,516 | |||||||||||||||
Chase Corporation | 320,183 | 8,148,657 | 1,859,636 | – | – | – | 759,474 | 12,759,163 | |||||||||||||||
Chemed Corporation* | 616,200 | 22,787,076 | 1,386,785 | 6,243,362 | 1,286,851 | 73,692 | |||||||||||||||||
Delta Apparel | 617,395 | 10,551,281 | 53,811 | 514,615 | 110,800 | 59,391 | 583,578 | 10,591,941 | |||||||||||||||
Fauquier Bankshares | 278,700 | 6,967,500 | 1,060,638 | – | – | 119,154 | 321,600 | 7,300,320 | |||||||||||||||
Government Properties Trust* | 1,142,000 | 12,105,200 | – | 10,359,181 | 2,299,302 | 146,747 | |||||||||||||||||
HopFed Bancorp | 145,500 | 2,313,450 | 670,488 | – | – | 42,952 | 187,500 | 3,016,875 | |||||||||||||||
Mueller (Paul) Company | 116,700 | 4,492,950 | – | – | – | 140,040 | 116,700 | 7,322,925 | |||||||||||||||
North Pittsburgh Systems | 1,045,649 | 25,241,967 | 6,280,347 | 2,318,855 | (146,687 | ) | 497,881 | 1,214,402 | 25,806,043 | ||||||||||||||
Preformed Line Products* | 276,385 | 9,742,571 | 1,726 | 1,416,536 | 2,014,044 | 96,164 | |||||||||||||||||
Quixote Corporation | 461,900 | 9,085,573 | – | - | – | 87,761 | 461,900 | 8,637,530 | |||||||||||||||
Stanley Furniture | 601,008 | 12,891,622 | 1,564,296 | 1,785,229 | (394,063 | ) | 116,459 | 606,717 | 12,461,967 | ||||||||||||||
Starrett (L.S.) Company Cl. A | 518,800 | 8,430,500 | – | – | – | 103,760 | 518,800 | 9,504,416 | |||||||||||||||
Timberland Bancorp | 157,600 | 5,848,536 | 2,838,830 | – | – | 79,056 | 469,200 | 7,366,440 | |||||||||||||||
183,733,515 | 5,545,113 | 1,812,951 | 128,836,086 | ||||||||||||||||||||
Royce Opportunity Fund | |||||||||||||||||||||||
Aceto Corporation* | 1,117,450 | 9,654,768 | 919,672 | 48,810 | (5,201 | ) | 122,095 | ||||||||||||||||
Allion Healthcare | 963,000 | 6,895,080 | 719,700 | 346,687 | (124,145 | ) | – | 1,044,655 | 6,163,464 | ||||||||||||||
Bakers Footwear Group | 419,666 | 3,793,781 | 453,247 | – | – | – | 467,366 | 3,383,730 | |||||||||||||||
Bell Industries | 468,100 | 1,778,780 | – | – | – | – | 468,100 | 1,708,565 | |||||||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 121 |
Notes to Financial Statements (unaudited)(continued) | ||||||||||||||||||||||||
Transactions in Affiliated Companies (continued): | ||||||||||||||||||||||||
Market | Realized | Market | ||||||||||||||||||||||
Shares | Value | Cost of | Cost of | Gain | Dividend | Shares | Value | |||||||||||||||||
Affiliated Company | 12/31/06 | 12/31/06 | Purchases | Sales | (Loss) | Income | 6/30/07 | 6/30/07 | ||||||||||||||||
Royce Opportunity Fund (continued) | ||||||||||||||||||||||||
Bottomline Technologies | 1,066,701 | $ | 12,213,726 | $ | 3,591,049 | $ | – | $ | – | $ | – | 1,376,479 | $ | 16,999,516 | ||||||||||
CPI Aerostructures | 305,100 | 2,190,618 | – | – | – | – | 305,100 | 2,532,330 | ||||||||||||||||
California Micro Devices | 1,222,600 | 5,354,988 | 415,282 | – | – | – | 1,307,600 | 5,295,780 | ||||||||||||||||
ClearOne Communications | 710,344 | 3,082,893 | – | – | – | – | 710,344 | 3,338,617 | ||||||||||||||||
Computer Task Group | 1,099,500 | 5,222,625 | – | – | – | – | 1,099,500 | 4,914,765 | ||||||||||||||||
Comstock Homebuilding Cl. A* | 617,730 | 3,551,948 | 823,731 | 1,366,595 | (831,067 | ) | – | |||||||||||||||||
Digirad Corporation | 997,122 | 4,108,143 | 122,102 | – | – | – | 1,025,122 | 4,285,010 | ||||||||||||||||
Electroglas | 1,353,827 | 3,371,029 | – | 78,943 | (32,016 | ) | – | 1,330,827 | 2,861,278 | |||||||||||||||
Evans & Sutherland Computer | 670,825 | 2,837,590 | – | 72,720 | (25,876 | ) | – | 652,825 | 1,481,913 | |||||||||||||||
Galaxy Nutritional Foods | 934,100 | 485,732 | 49,488 | – | – | – | 999,900 | 539,946 | ||||||||||||||||
Hawk Corporation Cl. A* | 455,800 | 5,455,926 | 318,316 | 631,704 | 225,558 | – | ||||||||||||||||||
Interlink Electronics | 790,775 | 2,372,325 | 28,235 | 39,870 | (17,525 | ) | – | 787,275 | 1,180,912 | |||||||||||||||
Interphase Corporation | 392,400 | 3,252,996 | – | – | – | – | 392,400 | 4,402,728 | ||||||||||||||||
LeCroy Corporation | 648,600 | 7,465,386 | 629,584 | – | – | – | 712,600 | 6,926,472 | ||||||||||||||||
Majesco Entertainment | 1,483,786 | 1,973,435 | 33,885 | – | – | – | 1,508,786 | 2,263,179 | ||||||||||||||||
Merix Corporation | 887,300 | 8,243,017 | 1,487,628 | – | – | – | 1,074,300 | 8,476,227 | ||||||||||||||||
Nanometrics | 880,900 | 6,967,919 | 1,799,039 | – | – | – | 1,130,500 | 7,755,230 | ||||||||||||||||
Network Equipment Technologies | 1,708,600 | 9,944,052 | 526,729 | 696,104 | (147,490 | ) | – | 1,723,400 | 16,441,236 | |||||||||||||||
Printronix | 356,981 | 4,426,564 | 36,415 | – | – | 71,646 | 359,481 | 4,673,253 | ||||||||||||||||
REX Stores | 524,400 | 9,302,856 | 601,145 | – | – | – | 561,200 | 11,128,596 | ||||||||||||||||
Rubio’s Restaurants | 632,700 | 6,232,095 | – | 159,555 | 36,742 | – | 616,900 | 6,249,197 | ||||||||||||||||
SCM Microsystems | 872,820 | 2,749,383 | 71,598 | – | – | – | 894,420 | 2,683,260 | ||||||||||||||||
Sigmatron International | 276,900 | 2,547,480 | 80,847 | – | – | – | 284,900 | 2,675,211 | ||||||||||||||||
TRC Companies | 1,044,900 | 9,017,487 | 744,477 | 139,200 | 430 | – | 1,108,000 | 16,431,640 | ||||||||||||||||
Tollgrade Communications | 624,634 | 6,602,381 | 727,948 | – | – | – | 689,834 | 7,277,749 | ||||||||||||||||
Versant Corporation* | 180,850 | 2,463,177 | – | 365,764 | 1,195,996 | – | ||||||||||||||||||
White Electronic Designs | 1,225,290 | 6,665,578 | 577,593 | – | – | – | 1,319,790 | 7,654,782 | ||||||||||||||||
160,223,758 | 275,406 | 193,741 | 159,724,586 | |||||||||||||||||||||
Royce Special Equity Fund | ||||||||||||||||||||||||
Frisch’s Restaurants | 277,000 | 8,143,800 | – | – | – | 60,940 | 277,000 | 8,459,580 | ||||||||||||||||
Graham Corporation | 248,400 | 3,266,460 | 121,831 | 50,496 | 14,443 | 12,785 | 254,300 | 7,150,916 | ||||||||||||||||
Hawkins | 547,500 | 7,829,250 | – | – | – | 120,450 | 547,500 | 8,458,875 | ||||||||||||||||
Koss Corporation | 171,500 | 4,006,240 | 349,726 | – | – | 47,450 | 188,911 | 3,547,748 | ||||||||||||||||
Lawson Products | 450,000 | 20,650,500 | – | – | – | 270,000 | 450,000 | 17,415,000 | ||||||||||||||||
Met-Pro Corporation | 718,700 | 10,665,508 | – | 1,422,860 | 779,523 | 85,995 | 578,001 | 9,080,396 | ||||||||||||||||
Mity Enterprises | 201,500 | 3,606,850 | – | – | – | – | 201,500 | 4,324,190 | ||||||||||||||||
National Dentex* | 292,500 | 5,118,750 | – | 4,605,476 | 234,827 | – | ||||||||||||||||||
National Presto Industries | 529,900 | 31,725,113 | – | 2,041,980 | 986,493 | 1,835,780 | 483,100 | 30,116,454 | ||||||||||||||||
95,012,471 | 2,015,286 | 2,433,400 | 88,553,159 | |||||||||||||||||||||
Royce Value Plus Fund | ||||||||||||||||||||||||
Anika Therapeutics | 968,395 | 12,850,602 | 297,633 | – | – | – | 990,395 | 15,044,100 | ||||||||||||||||
Answers Corporation | 575,010 | 7,699,384 | - | – | – | – | 575,010 | 7,101,373 | ||||||||||||||||
Bancorp (The) | 402,900 | 11,925,840 | 7,384,029 | – | – | – | 696,300 | 15,569,268 | ||||||||||||||||
Casual Male Retail Group | – | – | 26,053,361 | – | – | – | 2,271,300 | 22,940,130 | ||||||||||||||||
Celadon Group | – | – | 28,381,063 | – | – | – | 1,686,200 | 26,810,580 | ||||||||||||||||
Cerus Corporation | – | – | 13,855,793 | – | – | – | 2,061,000 | 13,932,360 | ||||||||||||||||
Christopher & Banks | 874,800 | 16,323,768 | 17,743,001 | – | – | 186,468 | 1,850,300 | 31,732,645 | ||||||||||||||||
Cosi | – | – | 22,123,807 | – | – | – | 3,697,600 | 16,861,056 | ||||||||||||||||
Cypress Bioscience | 700,300 | 5,427,325 | 15,667,307 | – | – | – | 2,048,800 | 27,167,088 | ||||||||||||||||
Dyax Corporation | 1,975,000 | 5,984,250 | 4,502,442 | – | – | – | 3,041,060 | 12,742,041 | ||||||||||||||||
Entrust | 3,504,600 | 14,964,642 | 286,261 | – | – | – | 3,575,434 | 14,516,262 | ||||||||||||||||
FARO Technologies* | 818,100 | 19,667,124 | 2,321,497 | 4,190,533 | 2,360,590 | – | ||||||||||||||||||
HealthTronics | 1,427,300 | 9,505,818 | 4,220,797 | – | – | – | 2,208,000 | 9,604,800 | ||||||||||||||||
Mercury Computer Systems | 1,159,300 | 15,488,248 | 6,279,145 | – | – | – | 1,627,800 | 19,859,160 | ||||||||||||||||
Novatel | – | – | 24,255,764 | – | – | – | 620,700 | 22,531,410 | ||||||||||||||||
NUCRYST Pharmaceuticals* | 953,300 | 4,528,175 | 787,270 | 3,483,962 | (2,494,077 | ) | – | |||||||||||||||||
PeopleSupport | – | – | 22,815,143 | – | – | – | 1,801,800 | 20,450,430 | ||||||||||||||||
Pharmanet Development Group* | 830,400 | 18,326,928 | 6,182,157 | 7,723,374 | 2,037,776 | – | ||||||||||||||||||
SpectraLink Corporation* | 912,800 | 7,850,080 | 4,034,775 | 12,496,028 | 3,537,073 | – | ||||||||||||||||||
Supertex | – | – | 31,045,591 | – | – | – | 906,900 | 28,422,246 | ||||||||||||||||
3D Systems* | – | – | 18,706,517 | 2,117,977 | 125,819 | – | ||||||||||||||||||
150,542,184 | 5,567,181 | 186,468 | 305,284,949 | |||||||||||||||||||||
* Not an Affiliated Company at June 30, 2007. | ||||||||||||||||||||||||
122 | The Royce Funds 2007 Semiannual Report to Shareholders |
Understanding Your Fund’s Expenses (unaudited) |
As a shareholder of a mutual fund, you pay ongoing expenses, including management fees and other Fund expenses including, for some funds, distribution and/or service (12b-1) fees. Using the information below, you can estimate how these ongoing expenses (in dollars) affect your investment and compare them with the ongoing expenses of other funds. You may also incur one-time transaction expenses, including redemption fees, which are not shown in this section and would result in higher total costs. The example is based on an investment of $1,000 invested at January 1, 2007 and held for the entire six-month period ended June 30, 2007. Service, Consultant and R Class shares are generally available only through certain brokers or retirement plan administrators who receive distribution and/or service fees from the Fund for services that they perform. Institutional and W Class shares are generally available only to institutions or intermediaries with a minimum account size of $1 million. Actual Expenses The first part of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value at June 30, 2007 by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period. | Hypothetical Example for Comparison Purposes The second part of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, this section is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. |
Actual | Hypothetical (5% per year return before expenses) | |||||||||||||||||||
Beginning | Ending | Expenses Paid | Beginning | Ending | Expenses Paid | Annualized | ||||||||||||||
Account Value | Account Value | During the | Account Value | Account Value | During the | Expense | ||||||||||||||
1/1/07 | 6/30/07 | Period(1) | 1/1/07 | 6/30/07 | Period(1) | Ratio(2) | ||||||||||||||
Investment Class | ||||||||||||||||||||
Pennsylvania Mutual Fund | $ 1,000.00 | $ 1,100.26 | $ 4.53 | $ 1,000.00 | $ 1,020.48 | $ 4.36 | 0.87% | |||||||||||||
Royce Micro-Cap Fund | 1,000.00 | 1,101.44 | 7.50 | 1,000.00 | 1,017.65 | 7.20 | 1.44% | |||||||||||||
Royce Premier Fund | 1,000.00 | 1,145.53 | 5.80 | 1,000.00 | 1,019.39 | 5.46 | 1.09% | |||||||||||||
Royce Low-Priced Stock Fund | 1,000.00 | 1,085.58 | 6.41 | 1,000.00 | 1,018.65 | 6.21 | 1.24% | |||||||||||||
Royce Total Return Fund | 1,000.00 | 1,088.96 | 5.54 | 1,000.00 | 1,019.49 | 5.36 | 1.07% | |||||||||||||
Royce Heritage Fund(3) | 1,000.00 | 1,079.12 | 6.39 | 1,000.00 | 1,018.65 | 6.21 | 1.24% | |||||||||||||
Royce Opportunity Fund | 1,000.00 | 1,127.30 | 5.80 | 1,000.00 | 1,019.34 | 5.51 | 1.10% | |||||||||||||
Royce Special Equity Fund | 1,000.00 | 1,112.58 | 5.87 | 1,000.00 | 1,019.24 | 5.61 | 1.12% | |||||||||||||
Royce Value Fund | 1,000.00 | 1,120.32 | 6.52 | 1,000.00 | 1,018.65 | 6.21 | 1.24% | |||||||||||||
Royce Value Plus Fund | 1,000.00 | 1,106.40 | 6.48 | 1,000.00 | 1,018.65 | 6.21 | 1.24% | |||||||||||||
Royce 100 Fund | 1,000.00 | 1,089.07 | 6.42 | 1,000.00 | 1,018.65 | 6.21 | 1.24% | |||||||||||||
Service Class | ||||||||||||||||||||
Pennsylvania Mutual Fund | 1,000.00 | 1,098.87 | 5.52 | 1,000.00 | 1,019.54 | 5.31 | 1.06% | |||||||||||||
Royce Micro-Cap Fund | 1,000.00 | 1,100.75 | 8.65 | 1,000.00 | 1,016.56 | 8.30 | 1.66% | |||||||||||||
Royce Premier Fund | 1,000.00 | 1,144.65 | 6.86 | 1,000.00 | 1,018.40 | 6.46 | 1.29% | |||||||||||||
Royce Low-Priced Stock Fund | 1,000.00 | 1,099.82 | 7.71 | 1,000.00 | 1,017.46 | 7.40 | 1.48% | |||||||||||||
Royce Total Return Fund | 1,000.00 | 1,087.61 | 6.68 | 1,000.00 | 1,018.40 | 6.46 | 1.29% | |||||||||||||
Royce Heritage Fund(3) | 1,000.00 | 1,075.23 | 6.59 | 1,000.00 | 1,018.45 | 6.41 | 1.28% | |||||||||||||
Royce Opportunity Fund | 1,000.00 | 1,125.59 | 6.80 | 1,000.00 | 1,018.40 | 6.46 | 1.29% | |||||||||||||
Royce Special Equity Fund | 1,000.00 | 1,112.01 | 7.07 | 1,000.00 | 1,018.10 | 6.76 | 1.35% | |||||||||||||
Royce Value Fund | 1,000.00 | 1,135.62 | 7.04 | 1,000.00 | 1,018.20 | 6.66 | 1.33% | |||||||||||||
Royce Value Plus Fund | 1,000.00 | 1,127.75 | 6.96 | 1,000.00 | 1,018.25 | 6.61 | 1.32% | |||||||||||||
Royce Technology Value Fund | 1,000.00 | 1,110.76 | 10.00 | 1,000.00 | 1,015.32 | 9.54 | 1.91% | |||||||||||||
Royce 100 Fund | 1,000.00 | 1,100.96 | 6.72 | 1,000.00 | 1,018.40 | 6.46 | 1.29% | |||||||||||||
Royce Discovery Fund | 1,000.00 | 1,010.19 | 7.43 | 1,000.00 | 1,017.41 | 7.45 | 1.49% | |||||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 123 |
Understanding Your Fund’s Expenses (unaudited)(continued) |
Actual | Hypothetical (5% per year return before expenses) | |||||||||||||||||||||||||||
Beginning | Ending | Expenses Paid | Beginning | Ending | Expenses Paid | Annualized | ||||||||||||||||||||||
Account Value | Account Value | During the | Account Value | Account Value | During the | Expense | ||||||||||||||||||||||
1/1/07 | 6/30/07 | Period(1) | 1/1/07 | 6/30/07 | Period(1) | Ratio(2) | ||||||||||||||||||||||
Service Class (continued) | ||||||||||||||||||||||||||||
Royce Financial Services Fund | $ | 1,000.00 | $ | 1,014.93 | $ | 7.44 | $ | 1,000.00 | $ | 1,017.41 | $ | 7.45 | 1.49 | % | ||||||||||||||
Royce Dividend Value Fund | 1,000.00 | 1,068.19 | 7.64 | 1,000.00 | 1,017.41 | 7.45 | 1.49 | % | ||||||||||||||||||||
Royce International Value Fund | 1,000.00 | 1,158.00 | 9.04 | 1,000.00 | 1,016.41 | 8.45 | 1.69 | % | ||||||||||||||||||||
Royce International Smaller- | ||||||||||||||||||||||||||||
Companies Fund | 1,000.00 | 1,103.00 | 8.81 | 1,000.00 | 1,016.41 | 8.45 | 1.69 | % | ||||||||||||||||||||
Consultant Class | ||||||||||||||||||||||||||||
Pennsylvania Mutual Fund | 1,000.00 | 1,094.58 | 9.66 | 1,000.00 | 1,015.57 | 9.30 | 1.86 | % | ||||||||||||||||||||
Royce Micro-Cap Fund | 1,000.00 | 1,096.24 | 12.58 | 1,000.00 | 1,012.79 | 12.08 | 2.42 | % | ||||||||||||||||||||
Royce Premier Fund | 1,000.00 | 1,139.74 | 11.04 | 1,000.00 | 1,014.48 | 10.39 | 2.08 | % | ||||||||||||||||||||
Royce Total Return Fund | 1,000.00 | 1,083.06 | 10.59 | 1,000.00 | 1,014.63 | 10.24 | 2.05 | % | ||||||||||||||||||||
Royce Heritage Fund(3) | 1,000.00 | 1,068.97 | 12.77 | 1,000.00 | 1,012.45 | 12.42 | 2.49 | % | ||||||||||||||||||||
Royce Opportunity Fund | 1,000.00 | 1,119.38 | 12.87 | 1,000.00 | 1,012.65 | 12.23 | 2.45 | % | ||||||||||||||||||||
Royce Special Equity Fund | 1,000.00 | 1,106.54 | 11.44 | 1,000.00 | 1,013.93 | 10.94 | 2.19 | % | ||||||||||||||||||||
Royce Value Fund | 1,000.00 | 1,129.33 | 13.09 | 1,000.00 | 1,012.50 | 12.37 | 2.48 | % | ||||||||||||||||||||
Royce Value Plus Fund | 1,000.00 | 1,122.41 | 11.68 | 1,000.00 | 1,013.79 | 11.08 | 2.22 | % | ||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||
Royce Premier Fund | 1,000.00 | 1,146.25 | 5.37 | 1,000.00 | 1,019.79 | 5.06 | 1.01 | % | ||||||||||||||||||||
Royce Low-Priced Stock Fund | 1,000.00 | 1,101.66 | 6.15 | 1,000.00 | 1,018.94 | 5.91 | 1.18 | % | ||||||||||||||||||||
Royce Total Return Fund | 1,000.00 | 1,089.95 | 5.08 | 1,000.00 | 1,019.93 | 4.91 | 0.98 | % | ||||||||||||||||||||
Royce Opportunity Fund | 1,000.00 | 1,127.38 | 5.38 | 1,000.00 | 1,019.74 | 5.11 | 1.02 | % | ||||||||||||||||||||
Royce Special Equity Fund | 1,000.00 | 1,112.80 | 5.45 | 1,000.00 | 1,019.64 | 5.21 | 1.04 | % | ||||||||||||||||||||
Royce Value Fund | 1,000.00 | 1,136.78 | 5.46 | 1,000.00 | 1,019.69 | 5.16 | 1.03 | % | ||||||||||||||||||||
Royce Value Plus Fund | 1,000.00 | 1,128.55 | 5.49 | 1,000.00 | 1,019.64 | 5.21 | 1.04 | % | ||||||||||||||||||||
W Class | ||||||||||||||||||||||||||||
Royce Premier Fund | 1,000.00 | 1,145.44 | 5.53 | 1,000.00 | 1,019.64 | 5.21 | 1.04 | % | ||||||||||||||||||||
Royce Total Return Fund | 1,000.00 | 1,088.89 | 5.39 | 1,000.00 | 1,019.64 | 5.21 | 1.04 | % | ||||||||||||||||||||
R Class | ||||||||||||||||||||||||||||
Pennsylvania Mutual Fund | 1,000.00 | 1,000.79 | 8.63 | 1,000.00 | 1,016.17 | 8.70 | 1.74 | % | ||||||||||||||||||||
Royce Premier Fund | 1,000.00 | 992.15 | 8.59 | 1,000.00 | 1,016.17 | 8.70 | 1.74 | % | ||||||||||||||||||||
Royce Low-Priced Stock Fund | 1,000.00 | 990.37 | 8.59 | 1,000.00 | 1,016.17 | 8.70 | 1.74 | % | ||||||||||||||||||||
Royce Total Return Fund | 1,000.00 | 1,001.34 | 8.63 | 1,000.00 | 1,016.17 | 8.70 | 1.74 | % | ||||||||||||||||||||
Royce Opportunity Fund | 1,000.00 | 1,018.02 | 8.71 | 1,000.00 | 1,016.17 | 8.70 | 1.74 | % |
124 | The Royce Funds 2007 Semiannual Report to Shareholders |
Notes to Performance and Other Important Information |
The thoughts expressed in this report concerning recent market movements and future prospects for small company stocks are solely the opinion of Royce at June 30, 2007, and, of course, historical market trends are not necessarily indicative of future market movements. Statements regarding the future prospects for particular securities held in the Funds’ portfolios and Royce’s investment intentions with respect to those securities reflect Royce’s opinions as of June 30, 2007 and are subject to change at any time without notice. There can be no assurance that securities mentioned in this report will be included in any Royce-managed portfolio in the future. |
| Forward-Looking Statements This material contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve risks and uncertainties, including, among others, statements as to: • the Funds’ future operating results, • the prospects of the Funds’ portfolio companies, • the impact of investments that the Funds have made or may make, • the dependence of the Funds’ future success on the general economy and its impact on the companies and industries in which the Funds invest, and • the ability of the Funds’ portfolio companies to achieve their objectives. This review and report use words such as “anticipates,” “believes,” “expects,” “future,” “intends,” and similar expressions to identify forward-looking statements. Actual results may differ materially from those projected in the forward looking statements for any reason. |
Proxy Voting A copy of the policies and procedures that The Royce Funds use to determine how to vote proxies relating to portfolio securities and information regarding how each of The Royce Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available, without charge, on The Royce Funds’ website at www.roycefunds.com, by calling 1-800-221-4268 (toll-free) and on the website of the Securities and Exchange Commission (“SEC”), at www.sec.gov. | ||
Form N-Q Filing The Funds file their complete schedules of investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on The Royce Funds’ website at www.roycefunds.com and on the SEC’s website at www.sec.gov. The Funds’ Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. To find out more about this public service, call the SEC at 1-202-942-8090. The Funds’ complete schedules of investments are updated quarterly, and are available at www.roycefunds.com. | ||
The Royce Funds 2007 Semiannual Report to Shareholders | 125 |
Notes to Performance and Other Important Information (continued) |
Shareholders Meeting Results
Royce Financial Services Fund
At a Special Meeting of Shareholders held on April 9, 2007, the Fund’s shareholders approved the following:
PROPOSAL | VOTES FOR | VOTES AGAINST | VOTES ABSTAINED | |||||
Approve a change in the Fund’s fundamental investment restriction to: | ||||||||
eliminate the Fund’s fundamental investment restriction limiting its investment in the securities of foreign issuers. | 352,032 | 12,149 | 3,821 | |||||
Royce Micro-Cap Fund
At a Special Meeting of Shareholders held on April 9, 2007 and adjourned to May 2, 2007, the Fund’s shareholders approved the following:
PROPOSAL | VOTES FOR | VOTES AGAINST | VOTES ABSTAINED | |||||
Approve a change in the Fund’s fundamental investment restriction to: | ||||||||
eliminate the Fund’s fundamental investment restriction | ||||||||
limiting its investment in the securities of foreign issuers; | 22,431,354 | 2,807,269 | 1,618,042 | |||||
eliminate the Fund’s fundamental investment restriction | ||||||||
prohibiting its investment in restricted securities; and | 21,787,615 | 3,309,190 | 1,759,858 | |||||
eliminate the Fund’s fundamental investment restriction prohibiting | ||||||||
its investment in the securities of other investment companies. | 22,071,939 | 3,087,558 | 1,697,170 | |||||
Royce Heritage Fund
At a Special Meeting of Shareholders held on April 9, 2007 and adjourned to May 2, 2007, the Fund’s shareholders approved the following:
PROPOSAL | VOTES FOR | VOTES AGAINST | VOTES ABSTAINED | |||||
Approve a change in the Fund’s fundamental investment restriction to: | ||||||||
eliminate the Fund’s fundamental investment restriction | ||||||||
limiting its investment in the securities of foreign issuers; | 3,663,777 | 247,159 | 272,800 | |||||
eliminate the Fund’s fundamental investment restriction | ||||||||
prohibiting its investment in restricted securities; and | 3,497,590 | 339,725 | 293,151 | |||||
eliminate the Fund’s fundamental investment restriction prohibiting | ||||||||
its investment in the securities of other investment companies. | 3,477,720 | 352,879 | 299,869 | |||||
126 | The Royce Funds 2007 Semiannual Report to Shareholders |
Board Approval of Investment Advisory Agreements |
At meetings held on June 6-7, 2007, The Royce Fund’s Board of Trustees, including all of the non-interested trustees, approved the continuance of the Investment Advisory Agreements between Royce & Associates, LLC (“R&A”) and each of Pennsylvania Mutual Fund, Royce Micro-Cap Fund, Royce Premier Fund, Royce Low-Priced Stock Fund, Royce Total Return Fund, Royce Heritage Fund, Royce Opportunity Fund, Royce Special Equity Fund, Royce Value Fund, Royce Value Plus Fund, Royce Technology Value Fund, Royce 100 Fund, Royce Discovery Fund, Royce Financial Services Fund, Royce Dividend Value Fund, Royce International Value Fund and Royce International Smaller-Companies Fund (the “Funds”). In reaching these decisions, the Board reviewed the materials provided by R&A, which included, among other things, information prepared internally by R&A and independently by Morningstar Associates, LLC (“Morningstar”) containing detailed expense ratio and investment performance comparisons for each series of the Fund with other mutual funds in their “peer group” and “category”, information regarding the past performance of Funds managed by R&A and a memorandum outlining the legal duties of the Board prepared by independent counsel to the non-interested trustees. R&A also provided the trustees with an analysis of its profitability with respect to providing investment advisory services to each of the Funds. In addition, the Board took into account information furnished throughout the year at regular Board meetings, including reports on investment performance, shareholder services, distribution fees and expenses, regulatory compliance, brokerage commissions and research, brokerage and execution products and services provided to the Funds. The Board also considered other matters they deemed important to the approval process such as payments made to R&A or its affiliates relating to distribution of Fund shares, allocation of Fund brokerage commissions, and other direct and indirect benefits to R&A and its affiliates, from their relationship with the Funds. The trustees also met throughout the year with investment advisory personnel from R&A. The Board, in its deliberations, recognized that, for many of the Funds’ shareholders, the decision to purchase Fund shares included a decision to select R&A as the investment adviser and that there was a strong association in the minds of Fund shareholders between R&A and each of the Funds. In considering factors relating to the approval of the continuance of the Investment Advisory Agreements, the non-interested trustees received assistance and advice from, and met separately with, their independent counsel. While the Investment Advisory Agreements for the Funds were considered at the same Board meetings, the trustees dealt with each agreement separately. Among other factors, the trustees considered the following:
The nature, extent and quality of services provided by R&A: The trustees considered the following factors to be of fundamental importance to their consideration of whether to approve the continuance of the Funds’ Investment Advisory Agreements: (i) R&A’s more than 30 years of small-cap value investing experience and track record; (ii) the history of long-tenured R&A portfolio managers managing many of the Funds; (iii) R&A’s sole focus on mid-cap, small-cap and micro-cap value investing; (iv) the consistency of R&A’s approach to managing the Funds over more than 30 years; (v) the integrity and high ethical standards adhered to at R&A; (vi) R&A’s specialized experience in the area of trading small- and micro-cap securities; (vii) R&A’s historical ability to attract and retain portfolio management talent; and (viii) R&A’s focus on shareholder interests as exemplified by capping expenses on smaller funds, closing funds to new investors when R&A believed such closings were in the best interests of existing shareholders, establishing break points for a number of funds and providing expansive shareholder reporting and communications. The trustees reviewed the services that R&A provides to the Funds, including, but not limited to, managing each Fund’s investments in accordance with the stated policies of each Fund. The trustees determined that the services to be provided to each Fund by R&A would be the same as those it previously provided to the Funds. They also took into consideration the histories, reputations and backgrounds of R&A’s portfolio managers for the Funds, finding that these would likely have an impact on the continued success of the Funds. Lastly, the trustees noted R&A’s ability to attract quality and experienced personnel. The trustees concluded that the services provided by R&A to each Fund compared favorably to services provided by R&A to other R&A client accounts, including other funds, in both nature and quality, and that the scope of services provided by R&A would continue to be suitable for each Fund.
Investment performance of the Funds and R&A: In light of R&A’s risk-averse approach to investing, the trustees believe that risk-adjusted performance continues to be an appropriate measure of each Fund’s investment performance. One measure of risk-adjusted performance the trustees have historically used in their review of the series’ performance is the Sharpe Ratio. The Sharpe Ratio is a risk-adjusted measure of performance developed by Nobel Laureate William Sharpe. It is calculated by dividing a fund’s annualized excess returns by its annualized standard deviation to determine reward per unit of risk. The higher the Sharpe Ratio, the better a fund’s historical risk-adjusted performance. The Board attaches primary importance to risk-adjusted performance over relatively long periods of time, typically three to five years. Except as described below, all of the Funds fell in the 1st or 2nd quartiles within the small-cap universe for the three-year, five-year and ten-year periods ended December 31, 2006. Royce Opportunity Fund placed in the 3rd quartile for the three year period but was in the 2nd quartile for the five-year period and the first quartile for the ten-year period. Royce Special Equity Fund (“RSE”) placed in the bottom quartile for the three-year period as its returns during the recent strong small-cap market have significantly lagged its small-cap peers. However, RSE placed in the top quartile for the five-year period. Royce Technology Value Fund (“RTV”) placed in the 4th quartile in its Morningstar category for the three-year period as the recent technology market has favored larger cap stocks. However, RTV placed in the top quartile within its Morningstar category for the five-year period. Royce Discovery Fund has a micro-cap focus and, had its Sharpe Ratio been compared to the peer group chosen by Morningstar for Royce Micro-Cap Fund (“RMC”), it would have placed in the 2nd quartile among its micro-cap peers. All other Royce Funds fell in the top 1st or 2nd quartile within the small-cap universe for each of the periods. In addition to each Fund’s risk-adjusted performance the trustees also reviewed and considered each Fund’s absolute total returns, down-market performance and, for the Funds in existence for such periods, long-term performance records over periods of ten years or longer.
The trustees noted that R&A manages a number of funds that invest in small-cap and micro-cap issuers, many of which were outperforming the Russell 2000 Index and their competitors. Although the trustees recognized that past performance is not necessarily an indicator of future results, they found that R&A had the necessary qualifications, experience and track record in managing small-cap and micro-cap securities to manage the Funds. The trustees determined that R&A continued to be an appropriate investment adviser for the Funds and concluded that each of the Fund’s performance supported the renewal of its Investment Advisory Agreement.
The Royce Funds 2007 Semiannual Report to Shareholders | 127 |
Board Approval of Investment Advisory Agreements (continued) |
Cost of the services provided and profits realized by R&A from its relationship with each Fund: The trustees considered the cost of the services provided by R&A and profits realized by R&A from its relationship with each Fund. As part of the analysis, the Board discussed with R&A its methodology in allocating its costs to each Fund and concluded that its allocations were reasonable. The trustees noted that at times R&A had closed certain of the Funds to new investors because of the rate of growth in Fund assets. The trustees concluded that R&A’s profits were reasonable in relation to the nature and quality of services provided.
The extent to which economies of scale would be realized as the Funds grow and whether fee levels would reflect such economies of sale: The trustees considered whether there have been economies of scale in respect of the management of the Funds, whether the Funds have appropriately benefited from any economies of scale and whether there is potential for realization of any further economies of scale. The trustees noted the time and effort involved in managing portfolios of small- and micro-cap stocks and that they did not involve the same efficiencies as do portfolios of large cap stocks. The trustees noted that in 2004 breakpoints had been added to the investment advisory fees for all series except Pennsylvania Mutual Fund (“PMF”), (PMF’s fee schedule already had breakpoints) and that the contractual investment advisory fee rate for RMC, Royce Low-Priced Stock Fund (“RLP”) and RTV had each been reduced in recent years. The trustees concluded that the current fee structure for each Fund was reasonable, and that no changes were currently necessary.
Comparison of services to be rendered and fees to be paid to those under other investment advisory contracts, such as contracts of the same and other investment advisers or other clients: The trustees reviewed the investment advisory fee paid by each Fund and compared both the services to be rendered and the fees to be paid under the Investment Advisory Agreements to other contracts of R&A and to contracts of other investment advisers to registered investment companies investing in small- and micro-cap stocks, as provided by Morningstar. The trustees noted the importance of the net expense ratio in measuring a fund’s efficiency, particularly in light of the variations in the mutual fund industry as to who is responsible for which expenses. Except as described below, the net expense ratios for the series ranked within the 1st and 2nd quartile among their peers, as selected by Morningstar. It was noted that Royce Total Return Fund (“RTR”) was being compared against a peer group for purposes of the Morningstar expense ratio analysis that generally consisted of funds managed by firms much larger than R&A and that it placed in the 3rd quartile among that group. Within its Morningstar category, RTR placed in the top quartile. It was noted that RLP’s net expense ratio was in the 4th quartile of the Morningstar peer group, but that its expense ratio includes a 12b-1 fee of up to 0.25%. (Only six other peers have a 0.25% 12b-1 fee). If the 12b-1 fee was stripped out, RLP would place 8 of 13, in the middle quintile. RLP’s higher management fee, reflecting the Fund’s use of low-priced and micro-cap stocks, which are harder to research and trade, accounts for the remainder of the difference. The trustees noted that Royce Heritage Fund (“RHF”) had a net 12b-1 fee expense of 10 basis points in 2006, which accounts for the 4 basis points difference between it and the peer median expense ratio (only five out of 18 peers had a 12b-1 expense). Even with the 12b-1 expense, it was noted that RHF placed in the middle quintile (59th percentile). The trustees noted that Royce Value Plus Fund and Royce Value Fund similarly can account for their higher relative expense ratios by their net 12b-1 fee of 11 and 12 basis points, respectively, compared to their differentials from the median of 5 and 11 basis points, respectively. The trustees believed that RTV’s 4th quartile (8 of 9) peer ranking should be viewed with consideration of its investment style. RTV’s investment approach is significantly different from most of the funds in its peer group, as only RTV and one other fund had a micro-cap orientation in 2006 (average market cap of $268 million for RTV, and an average of $2.4 billion for the seven non-micro-cap funds in RTV’s peer group). RTV’s expense ratio is within four basis points of the only other micro-cap fund in its peer group. The level of research necessary for RTV’s micro-cap oriented bottom-up approach is far greater than that necessary for larger-cap stocks. Notwithstanding this analysis, the recent reduction of the management fee for this Fund, effective May 14, 2007, and the related expense cap reduction to 1.69% would place RTV well below its peer group median expense ratio of 1.94%. Similarly, the trustees noted that Royce Financial Services Fund’s peer group includes only two other small-cap oriented financial services funds, which have management fees of 1.00% and 0.90% respectively. The rest are large-cap. The trustees took into consideration the fact that the level of research necessary for a small-cap, bottom-up approach is far greater than that necessary for large-cap stocks. Royce 100 Fund’s (“ROH”) peer group includes mainly larger funds than itself (7 of 11 peers). ROH was currently running at an expense ratio of 1.32%, which would place it in the 2nd quartile.
The trustees noted that R&A has waived advisory fees in order to maintain expense ratios at competitive levels and acknowledged R&A’s intention to continue this expense limitation practice. The trustees also considered fees charged by R&A to institutional and other clients and noted that each of the Funds’ advisory fees compared favorably to these other accounts.
The entire Board, including all the non-interested trustees, determined to approve the renewal of the existing Investment Advisory Agreements, concluding that a contract renewal on the existing terms was in the best interest of the shareholders of each Fund and that each investment advisory fee rate was reasonable in relation to the services provided.
128 | The Royce Funds 2007 Semiannual Report to Shareholders |
Postscript: Tastes Great |
Our taste buds know what’s good. Just as important, they know it in an absolute sense. Whether we go for haute cuisine, burgers and fries, or both, we know what we like, and we like it for its own sake. Although everyone’s taste is subjective, when we sit down anticipating a great meal, we’re not thinking in relative terms. If we love Italian food, it’s not because it’s so enjoyable relative to French or Indian or Chinese or Tex-Mex. We simply enjoy it on its own merits. We may prefer it to other cuisines, just as we may prefer veal piccata to linguine and clams, but that’s not quite the same thing as enjoying something on a relative basis. | to make our managers hungry for the overlooked and—in our view, anyway—the undervalued. This can create performance disparities with our benchmark (as well as other small-cap indices), as well as the occasional bout of indigestion when the Funds experience relative underperformance. We accept these hiccups and attempt to stick to a steady diet of long-term above-average returns. Hopefully, our shareholders share our taste for the importance of absolute performance. |
So when Chuck Royce first began to say, “You can’t eat from the table of relative returns, only from the table of absolute performance,” he may have been closer than he initially imagined to describing why absolute performance goals are so critical to us at The Royce Funds. For each of our portfolios, we seek strong absolute returns over market cycle and other long-term periods. | Of course, we understand that there will be times when this is not the case. Particularly during periods of relative underperformance, we expect to hear questions about what’s on our small-cap menu, about why we’re not beating our small-cap benchmark, or why we’re not using another index as a benchmark that happens to be doing better than our Funds are at the time. These criticisms are something of an occupational hazard and thus explain why we choose to discuss performance in both relative and absolute terms. |
(This is consistent with our goal of doubling our money in four to five years with any stock that we select for our portfolios.) We may not always meet the mark, but the salient point is that we have established a target for our portfolios that’s based squarely on long-term, absolute results. | When Chuck Royce first began to say, “You can’t eat from the table of relative returns, only from the table of absolute performance,” he may have been closer than he initially imagined to describing why absolute performance goals are so critical to us at The Royce Funds. For each of our portfolios, we seek strong absolute returns over market cycle and other long-term periods. | In many ways, we like to think of ourselves as “benchmark agnostic.” In other words, we select companies for our portfolios based on each business’s absolute return potential, and not because we think that they can beat the return provided by a relevant small-cap index. Our focus is on security selection, on the search |
As active small-cap managers, we tend to be less anxious about short-term performance as a whole than those of our peers who may be more focused on beating a benchmark or who seek to replicate an index in terms of portfolio holdings or similar industry and sector weightings. By contrast, we are strictly stock pickers, and thus our sector and industry weightings are byproducts of our focus on individual companies. This bottom-up, business-buyer’s approach tends | for compelling values in the large and diverse small-cap marketplace. At the same time, however, we recognize the need to frame our Funds’ market cycle and other long-term performance for our investors. The Russell 2000 is thus useful in helping us to chart our progress, but our true appetite is best satisfied by what we love best—strong, absolute returns over the long term. |
This page is not part of the 2007 Semiannual Report to Shareholders |
Wealth Of Experience With approximately $32.7 billion in open- and closed-end fund assets under management, Royce & Associates is committed to the same small-company investing principles that have served us well for more than 30 years. Charles M. Royce, our Chief Investment Officer, enjoys one of the longest tenures of any active mutual fund manager. Royce’s investment staff includes eight Portfolio Managers, as well as 11 assistant portfolio managers and analysts, and six traders. Multiple Funds, Common Focus Our goal is to offer both individual and institutional investors the best available small-cap value portfolios. Unlike a lot of mutual fund groups with broad product offerings, we have chosen to concentrate on small-company value investing by providing investors with a range of funds that take full advantage of this large and diverse sector. Consistent Discipline Our approach emphasizes paying close attention to risk and maintaining the same discipline, regardless of market movements and trends. The price we pay for a security must be significantly below our appraisal of its current worth. This requires a thorough analysis of the financial and business dynamics of an enterprise, as though we were purchasing the entire company. Co-Ownership Of Funds It is important that our employees and shareholders share a common financial goal; our officers, employees and their families currently have approximately $122 million invested in The Royce Funds. | |||||
General Information | Advisor Services | ||||
Additional Report Copies | (For Fund Materials, Performance Updates, | ||||
and Prospectus Inquiries | Account Inquiries | ||||
(800) 221-4268 | (800) 33-ROYCE (337-6923) | ||||
Shareholder Services | Broker/Dealer Services | ||||
(800) 841-1180 | For Fund Materials and Performance Updates | ||||
(800) 59-ROYCE (597-6923) | |||||
Automated Telephone Services | |||||
(800) 78-ROYCE (787-6923) | |||||
www.roycefunds.com This review and report must be accompanied or preceded by a current prospectus for the Funds. Please read the prospectus carefully before investing or sending money. | |||||
TheRoyceFunds | OE-REP-0607 | ||||
Royce Select Fund I Royce Select Fund II Royce Global Select Fund | SEMIANNUAL REVIEW AND REPORT TO SHAREHOLDERS | ||||||||
| |||||||||
| |||||||||
| |||||||||
www.roycefunds.com |
Table of Contents | ||
Semiannual Review | ||
Performance and Expenses | 2 | |
Letter to Our Shareholders | 3 | |
Semiannual Report to Shareholders | 10 | |
This page is not part of the 2007 Semiannual Report to Shareholders | 1 |
Performance and Expenses | Through June 30, 2007 | |
Average Annual Total Returns | ||||||||||||||||||||
1-Year | Since Inception | Since Inception | Annual Operating | |||||||||||||||||
Fund | 1-Year | (Net)1 | 5-Year | (Date) | (Net)1 | Expenses | ||||||||||||||
Royce Select Fund I | 19.65 | % | 17.58 | % | 17.46% | 18.63 | % | (11/18/98) | n/a | 2.18 | % | |||||||||
Royce Select Fund II | 8.21 | 6.19 | n/a | 15.56 | (6/30/05) | 14.47 | 2.99 | |||||||||||||
Royce Global Select Fund | 28.82 | 26.36 | n/a | 29.11 | (6/30/05) | 27.87 | 2.40 | |||||||||||||
Russell 2000 | 16.43 | n/a | 13.88 | n/a | n/a | n/a |
Letter to Our Shareholders | |
Rolling Stone Blues | ||
At first blush, the mid-point of 2007 looked very similar to the end of 2006. The economy’s condition was mostly positive, interest rates remained low and global liquidity levels remained flush following some vexing signs of contraction earlier in the year. The stock market kept moving mostly upwards, and the long bull market for small-caps in particular showed few signs of slowing down prior to July of this year. What’s new for 2007 is that larger companies have emerged in the short run as market leaders, though the margin of outperformance versus small-cap both year-to-date and for the one-year period ended June 30 was not enormous. Within small-cap, there has been a move toward larger, arguably higher-quality companies that’s distinct from the generally better returns achieved by more speculative issues in 2006. The overall direction remained positive for smaller companies, as it did for stocks as a whole. Equity investors continued to benefit from a remarkable run that included more of the overall market than is usually thought, small-cap having long since stolen the headlines from its larger peers as “The Only Asset Class Worth Owning” in some quarters. | ||
One of the advantages of employing an all-weather strategy to select smaller company stocks is that we continue to do what we have always done regardless of the market’s behavior. When smaller company stock prices were on the rise, it was more challenging to find the compelling values that have always been our stock in trade, but the search goes on whether the overall small-cap market is moving up or down. | ||
This page is not part of the 2007 Semiannual Report to Shareholders | 3 |
Letter to Our Shareholders | ||||||||
that a more historically typical correction of 15% or better is in the near future for smaller companies. The positive-performance phase that began in the fall of 2002 was interrupted by only two corrections in the 10%-14% range—one in 2004-5 and another in 2006—and a handful of others that were shy of double digits. To paraphrase the poet, the course of true market cycles never did run smooth. At least not as smooth as this current cycle. And to us, this was a warning. As we saw in July, when stock prices fell harder than they did during any other month this year, things can change very quickly. Along with our belief in regression to the mean, our conviction that markets are inherently cyclical is too firm to counter any temptation to abandon the lessons of history. | ||||||||
Over the past decade or so the growth in the number and variety of equity market indices has been explosive. Russell, Standard & Poor’s (“S&P”), Wilshire, and Barra have all become accepted names in the equity world with stables of various indices. Considering the burgeoning number and scope of equity market indices, it is critical that investors better understand the composition, attribution and construction methodology among similar equity market indices. As the Standard & Poor’s 500 index recently celebrated its 50th anniversary, we thought that it might be helpful to delve into the particulars of the more prominent small-cap indices, and how we at The Royce Funds view them. Two of the most prominent are the Russell 2000 and the S&P SmallCap 600, both widely accepted benchmarks for small-cap equities. Yet each is different in composition, attribution and construction methodology. | As active small-cap managers with large stakes throughout the small-cap universe, perhaps we should be more consistently happy with a market that before July had been gathering no moss and few, if any bears. Maybe we should try a little harder to relax and simply enjoy the good times. Make no mistake, we are mostly very pleased—and more than happy to reap the benefits of the robust returns that smaller stocks have been providing since the most recent small-cap market trough in October 2002. However, as the small-cap bull stampeded its way toward a fifth full year, we were also in the midst of our own 19th Nervous Breakdown (and at least as many bear market predictions) as we awaited what seemed to us an inevitable small-cap downturn. Even as the market was swaying to higher and higher levels, we could not escape the nagging and persistent reality that historically strong bull markets often give way to serious corrections, and the longer the good times last, the more likely it seems that the bear’s bite will be deep. Of course, one of the advantages of employing an all-weather strategy to select smaller | |||||||
The Russell 2000 index is the oldest—dating back to 1979—and broadest of the two small-cap indices. It measures the performance of the 2,000 smallest companies in the Russell 3000 Index (which represents 99% of the U.S. equity Continued on page 6... | company stocks is that we continue to do what we have always done regardless of the market’s behavior. When smaller company stock prices were on the rise, it was more challenging to find the compelling values that have always been our stock in trade, but the search goes on whether the overall small-cap market is moving up or down. It’s All Over Now If our call for overall lower returns has not yet panned out, and our prediction of a small-cap correction has thus far proved at best premature, we can take a small measure of comfort for | |||||||
4 | This page is not part of the 2007 Semiannual Report to Shareholders |
our forecasting acumen in the emergence of large-cap as a market leader, a development we thought first looked likely by the beginning of 2006. As usually happens, the case for large-cap leadership took on a certain inevitability only with the gift of hindsight. In 2005, the large-cap S&P 500 and the small-cap Russell 2000 finished the year with near-identical | |||||
results—the S&P 500 was up 4.9% while the Russell 2000 gained 4.6%. The large-cap index relinquished the performance crown in 2006 (+15.8% versus 18.4%), but small-cap regained its edge mostly through the courtesy of a torrid first quarter and a strong fourth quarter. In both 2006’s bearish second quarter and flat-to-down third quarter, the S&P 500 beat the Russell 2000, events we regarded as especially telling of a shift to large-cap leadership. That third-quarter outperformance (+5.7% versus +0.4%) was the key to giving the large-cap index an edge for the second half of 2006; it also contributed to large-cap outgaining small-cap for the one-year period ended 6/30/07, up 20.6% versus 16.4%. | We have been less focused on the leadership issue within small-cap than we are in the wider worlds of small- and large-cap in part because we do not limit ourselves in the broad small-cap universe by attaching labels to stocks such as “value” or “growth.” | ||||
Two thousand seven has been different in terms of its first-half performance patterns, yet the end result through the end of June showed the S&P 500 ahead of its small-cap counterpart. During this year’s first quarter, a period that was positive for almost every segment of the stock market save certain small-cap growth companies and many micro-cap stocks, the S&P 500 gained a paltry 0.6% versus 2.0% for the Russell 2000. (The Nasdaq Composite, meanwhile, managed a 0.3% gain.) The second quarter saw higher returns spread more consistently throughout the market. Large-cap led small-cap, with the S&P 500 up 6.3% versus 4.4% for its small-cap sibling, while the Nasdaq Composite led both indices with a gain of 7.5%. For the year-to-date period ended 6/30/07, the Nasdaq Composite actually led, its 7.8% gain ahead of the S&P 500’s 7.0% return and the Russell 2000’s 6.5% showing. These first-half results, as well as the large- and small-cap indices’ one-year returns, were consistent with our thought that when large-cap stocks did finally assume a leadership role, the margin of outperformance would be slight. We remain committed to the idea that large-cap’s stay at the top should be brief, as frequent leadership rotation seems likely to roll on. Considering the recent status of large-cap’s leadership, it should come as no surprise that the long-term performance edge remained with smaller companies. The Russell 2000 outpaced the S&P 500 for the three-, five-, 10- and 15-year periods ended 6/30/07. In addition, the small-cap index outgained its large-cap counterpart in two-thirds of the S&P 500’s positive quarters in each three-, five- and 10-year period ended 6/30/07. Not Fade Away During the first half, a similar shift in leadership arrived via a different route between value and growth within small-cap. The Russell 2000 Value index had maintained a near- |
This page is not part of the 2007 Semiannual Report to Shareholders | 5 |
market) and accounts for approximately 8% of the total market capitalization of the larger Russell index. As of the end of June 2007, the median market cap of the Russell 2000 was $695 million. The largest company by market cap in the index was $3.3 billion and the smallest was $125 million. Companies with market capitalizations in excess of $2.5 billion represented 6% of the index, while micro-caps, which Royce defines as companies with market capitalizations less than $500 million, comprised roughly 13% of the index. In terms of attribution, Financial Services represented the largest sector weight in the index at the end of June 2007, at 22.6%. Industrials (autos and transportation, materials and processing and producer durable) and Consumer Discretionary followed, with weightings of 21.5% and 19.2%, respectively. Introduced in 1994, the S&P SmallCap 600 is more concentrated than the Russell 2000, consisting of 600 names that cover approximately 3% of the domestic equity market. The median market cap of the S&P SmallCap 600 was $820 million as of the end of June 2007. The largest company by market cap in the index was $5.0 billion and the smallest was $70 million. Companies with more than $2.5 billion in market cap comprised approximately 7%, while micro-caps represented 20% of the overall index. Industrials (materials and processing and producer durable) represented the largest sector weighting in the index at 19.1%, Continued on page 8... | Letter to Our Shareholders | |||||||
stranglehold on small-cap leadership until the first quarter of 2007, when it slipped under the thumb of its small-cap growth sibling. During both the first quarter (+1.5% versus +2.5%) and second quarter (+2.3% versus +6.7%), the Russell 2000 Value index lost ground to the Russell 2000 Growth index. Interestingly for us, value also underperformed growth from the interim small-cap peak on 2/22/07 through 6/30/07, down 0.8% compared to a gain of 2.9%. This consistent underperformance, even during the year’s more volatile periods, not only put small-cap value in second place for the year-to-date period ended 6/30/07 (+3.8% versus +9.3%), it also cost small-cap value the performance edge for the most recent 12-month period. For the one-year period ended 6/30/07, the Russell 2000 Value index was up 16.1% versus 16.8% for the Russell 2000 Growth index. Paralleling the performance patterns of small-cap versus large-cap, the Russell 2000 Value index maintained its lead over the Russell 2000 Growth index for longer-term periods. It bested small-cap growth for the three-, five-, 10-, 15-, 20- and 25-year periods ended 6/30/07. A critical element in this performance edge came from small-cap value’s better performance during the nearly five-year bull-market period following the small-cap market trough in October 2002, and from its superior results from the previous small-cap market peak on 3/9/00 through 6/30/07. What gives us some pause about the current period is the relative strength of small-cap growth in the more volatile period from that February 2007 interim peak. This is in stark contrast to 2006, a period in which small-cap value beat small-cap growth in up, down and more mixed quarters. However, we have been less focused on the leadership issue within small-cap than we are in the wider worlds of small- and large-cap in part because we do not limit ourselves in the broad small-cap universe by attaching labels to stocks such as “value” or “growth.” Calm, Cool & Collected Another reason for our bemusement is rooted in our own Funds’ recent results. While the Russell 2000 Value index was dominating small-cap performance in 2006, one of our conservatively managed Select portfolios was underperforming. Yet during the first half of 2007, that same portfolio—Royce Select Fund I—was a terrific performer. In addition, the no less conservatively managed Royce Global Select Fund more than tripled the return of the Russell 2000 and more than quintupled the gain of the Russell 2000 Value index. So it would seem that the distinctions between small-cap value and growth stocks being drawn by the wider world may no longer be as significant as they were even a few years ago. Royce Select Fund II struggled, a blemish on an otherwise strong first half for our three performance-fee-based offerings. Royce Select Fund I and Royce Global Select Fund were ahead of their small-cap benchmark, the Russell 2000, for the year-to-date period ended 6/30/07, and both outpaced the small-cap index for the 12 months ended 6/30/07. | ||||||||
6 | This page is not part of the 2007 Semiannual Report to Shareholders |
First-half strength came from holdings in several sectors, but the leader in many portfolios (and a profitable one in all) was Industrial Products. The ongoing worldwide boom in large-scale infrastructure construction, particularly in China, has made industrial companies, which have historically been well-represented in the portfolio, highly desirable. Holdings in Natural Resources and Technology were generally solid as well. Although micro-cap stocks finished the first half trailing their larger small-cap peers, any ill-effects scarcely registered in the Funds’ first-half results. We were therefore generally pleased with the Funds’ first-half results, especially in a market climate that has made it more and more challenging to find the sort of attractive values that we like. | The popularity of ETF’s and other index-based investments has played an important role in helping small-cap to be taken more seriously as an asset class. We also think that the related success of small-cap value approaches has been a factor in this growing esteem because a large number of investors saw that you could invest in small-cap stocks or indices with attractively low volatility scores. | ||||
You Can’t Always Get What You Want Indeed, the reality of small-cap’s status as a permanent, professional asset class–something that we are happy to report does not seem likely to change, even in the event of a correction more severe than what we think is probable—cuts both ways for us. The popularity of ETF’s and other index-based investments has played an important role in helping small-cap to be taken more seriously as an asset class. We also think that the related success of small-cap value approaches has been a factor in this growing esteem because a large number of investors saw that you could invest in small-cap stocks or indices with attractively low volatility scores. However, this has also created new tests for our purchase habits, in which we seek high-quality companies selling for bargain prices. Unquestionably, in our view, the major player in the extension of the small-cap bull market has been the vast amount of global liquidity. The world has been awash with capital looking for a profitable home, and that’s been an enormous factor in keeping stock prices afloat. Many of the investment vehicles that have become increasingly better known—not just ETFs, but hedge funds, as well as merger and acquisition (M&A) and private equity activity—have been fueled to some degree by the large amounts of cash circling the globe. Global liquidity has worked to make M&A’s, leveraged buyouts and | |||||
This page is not part of the 2007 Semiannual Report to Shareholders | 7 |
followed by Information Technology at 17.1%, and Financial Services at 15.8% at the end of June 2007. | Letter to Our Shareholders | |||||||
Another important difference between the two indices is the respective construction methodology. The S&P SmallCap 600 is designed to be an “efficient portfolio of companies that meet specific inclusion criteria to ensure that they are investable and financially viable.” Inclusion in the index is determined subjectively by the S&P Index Committee, which adds new stocks to the index based not only on size, but also on financial viability, liquidity, adequate float size and other trading requirements. In contrast, the Russell 2000 is more objective in nature; it has no committee to determine membership and stresses the need to accurately represent the market as it is. Kelly Haughton, strategic director for the Russell Indices, believes that “the market should decide which stocks belong in an index, especially if the index is to provide an unbiased benchmark for measuring the results of money managers’ investment decisions.” With differing composition, attribution and construction, performance can also vary dramatically. In fact, examining the annual performance of the two indices over the past 10 years shows that the spread has been as wide as 1400 basis points in a single calendar year. Still, we think that the Russell 2000 and the Standard & Poor’s SmallCap 600 Index are reasonable proxies of the small capitalization world. | privatizations increasingly commonplace in the financial marketplace. The United States is in the midst of a mega-merger wave, with the number and size of the transactions exploding. During the first half of 2007, 15 companies in the S&P 500 announced takeovers, while 111 companies in the Russell 2000 had deals pending. Equally important, the trend has shown no signs of slowing down within the small-cap world. However mindful of the significance of these figures, we still do not believe that the extraordinary amount of global liquidity changes the rules of the road in the U.S. equity market, at least over the long run. Cyclicality remains the norm. Today’s small-cap market is no different than large-cap was during the ’90s. Global liquidity has extended a wonderful bull market, but it cannot save the market from history, which means that sooner or later, the good times will end. Smaller companies have been, and will continue to be, the target of private equity funds and larger companies flush with cash. Although it’s clear that M&A activity is not the primary driver of long-term performance, it has already had a hand in the extended run for a small-cap bull market. Yet once the bull market for acquisitions ends, the softening in demand could precipitate a more widespread correction in the very market whose bullish phase it helped to extend in the first place. | |||||||
8 | This page is not part of the 2007 Semiannual Report to Shareholders |
Time Is On Our Side As we look forward, we almost find ourselves wishing for a serious, though short-lived, correction for smaller stocks. We are still buying mostly on short-term dips, which typically do not yield the sort of absolute value that we would ideally prefer. Our goal is to be fully invested, but with purchase decisions becoming harder and harder, it has not been easy. Yet that is the reality of the current market (at least as of this writing), so we make our adjustments and deal with | |||||
what we have on a daily basis. And even as we remain highly concerned about a correction for smaller companies, we are also confident about the long-term prospects for our chosen asset class. Whether or not a decidedly bearish July marked the beginning of a correction, we are still managing our portfolios with a long-term outlook and an absolute return bias. We have never allowed our thoughts on the short- or intermediate-term forecasts for the market to cloud our stock selection process. Regardless of where we think the market may be headed next, the search for great values in smaller stocks goes on, with the thought that our Funds can provide the kind of terrific long-term absolute returns that help our shareholders to build wealth. Sincerely, | We have never allowed our thoughts on the short- or intermediate-term forecasts for the market to cloud our stock selection process. Regardless of where we think the market may be headed next, the search for great values in smaller stocks goes on... |
Charles M. Royce President | W. Whitney George Vice President | Jack E. Fockler, Jr. Vice President |
July 31, 2007
This page is not part of the 2007 Semiannual Report to Shareholders | 9 |
Table of Contents | |
Semiannual Report to Shareholders | |
Trustees and Officers | 11 |
Managers’ Discussions of Fund Performance | |
Royce Select Fund I | 12 |
Royce Select Fund II | 14 |
Royce Global Select Fund | 16 |
Financial Statements | 19 |
Notes to Financial Statements | 28 |
Understanding Your Fund’s Expenses | 31 |
Board Approval of Investment Advisory Agreements | 32 |
Notes to Performance and Other Important Information | 34 |
10 | The Royce Funds 2007 Semiannual Report to Shareholders
Trustees and Officers |
All Trustees and Officers may be reached c/o The Royce Funds, 1414 Avenue of the Americas, New York, NY 10019 |
Charles M. Royce, Trustee*, President |
Age: 67 | Number of Funds Overseen: 25 | Tenure: Since 1982 |
Non-Royce Directorships: Director of Technology Investment Capital Corp. |
Principal Occupation(s) During Past Five Years: President, Chief Investment Officer and Member of Board of Managers of Royce & Associates, LLC (“Royce”), the Trust’s investment adviser. |
Mark R. Fetting, Trustee* |
Age: 52 | Number of Funds Overseen: 41 | Tenure: Since 2001 |
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 16 Legg Mason Funds. |
Principal Occupation(s) During Past Five Years: Senior Executive Vice President of Legg Mason, Inc.; Member of Board of Managers of Royce. Mr. Fetting’s prior business experience includes having served as Division President and Senior Officer, Prudential Financial Group, Inc. and related companies; Partner, Greenwich Associates and Vice President, T. Rowe Price Group, Inc. |
Donald R. Dwight, Trustee |
Age: 76 | Number of Funds Overseen: 25 | Tenure: Since 1998 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: President of Dwight Partners, Inc., corporate communications consultant; Chairman (from 1982 to March 1998) and Chairman Emeritus (since March 1998) of Newspapers of New England, Inc. Mr. Dwight’s prior experience includes having served as Lieutenant Governor of the Commonwealth of Massachusetts, as President and Publisher of Minneapolis Star and Tribune Company and as a Trustee of the registered investment companies constituting the Eaton Vance Funds. |
Richard M. Galkin, Trustee |
Age: 69 | Number of Funds Overseen: 25 | Tenure: Since 1982 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: Private investor. Mr. Galkin’s prior business experience includes having served as President of Richard M. Galkin Associates, Inc., telecommunications consultants, President of Manhattan Cable Television (a subsidiary of Time, Inc.), President of Haverhills Inc. (another Time, Inc. subsidiary), President of Rhode Island Cable Television and Senior Vice President of Satellite Television Corp. (a subsidiary of Comsat). |
Stephen L. Isaacs, Trustee |
Age: 67 | Number of Funds Overseen: 25 | Tenure: Since 1989 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: President of The Center for Health and Social Policy (since September 1996); Attorney and President of Health Policy Associates, Inc., consultants. Mr. Isaacs’s prior business experience includes having served as Director of Columbia University Development Law and Policy Program and Professor at Columbia University (until August 1996). |
William L. Koke, Trustee |
Age: 72 | Number of Funds Overseen: 25 | Tenure: Since 1996 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: Private investor. Mr. Koke’s prior business experience includes having served as President of Shoreline Financial Consultants, Director of Financial Relations of SONAT, Inc., Treasurer of Ward Foods, Inc. and President of CFC, Inc. |
Arthur S. Mehlman, Trustee |
Age: 65 | Number of Funds Overseen: 41 | Tenure: Since 2004 |
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 16 Legg Mason Funds and Director of Municipal Mortgage & Equity, LLC. |
Principal Occupation(s) During Past Five Years: Director of The League for People with Disabilities, Inc.; Director of University of Maryland Foundation (non-profits). Formerly: Director of University of Maryland College Park Foundation (non-profit) (from 1998 to 2005); Partner, KPMG LLP (international accounting firm) (from 1972 to 2002); Director of Maryland Business Roundtable for Education (from July 1984 to June 2002). |
The Royce Funds 2007 Semiannual Report to Shareholders | 11 |
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Jan-June 2007* | 9.67 | % | |||||||
One-Year | 19.65 | ||||||||
One-Year (Net)1 | 17.58 | ||||||||
Three-Year | 15.20 | ||||||||
Five-Year | 17.46 | ||||||||
Since Inception (11/18/98) | 18.63 | ||||||||
EXPENSE RATIO | |||||||||
Annual Operating Expenses | 2.18 | % | |||||||
* Not annualized. | |||||||||
CALENDAR YEAR TOTAL RETURNS | |||||||||
Year | RS1 | Year | RS1 | ||||||
2006 | 15.0 | % | 2002 | -15.8 | % | ||||
2005 | 10.9 | 2001 | 24.5 | ||||||
2004 | 19.1 | 2000 | 15.0 | ||||||
2003 | 48.7 | 1999 | 35.4 | ||||||
TOP 10 POSITIONS % of Net Assets | |||||||||
AllianceBernstein Holding L.P. | 4.2 | % | |||||||
SEI Investments | 2.6 | ||||||||
Corinthian Colleges | 2.5 | ||||||||
Ritchie Bros. Auctioneers | 2.5 | ||||||||
Arkansas Best | 2.3 | ||||||||
MoneyGram International | 2.3 | ||||||||
SkillSoft ADR | 2.2 | ||||||||
HEICO Corporation Cl. A | 2.1 | ||||||||
eResearch Technology | 2.1 | ||||||||
Brady Corporation Cl. A | 1.9 | ||||||||
TOP 4 SHORT POSITIONS % of Net Assets | |||||||||
BB&T Corporation | -0.8 | % | |||||||
Washington Mutual | -1.7 | ||||||||
Financial Select Sector SPDR Fund | -3.8 | ||||||||
iShares Russell Microcap Index Fund | -7.2 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Technology | 19.4 | % | |||||||
Industrial Services | 16.1 | ||||||||
Financial Services | 13.3 | ||||||||
Industrial Products | 12.7 | ||||||||
Consumer Services | 8.3 | ||||||||
Natural Resources | 6.7 | ||||||||
Consumer Products | 2.4 | ||||||||
Financial Intermediaries | 2.2 | ||||||||
Health | 1.3 | ||||||||
Miscellaneous | 2.3 | ||||||||
Cash and Cash Equivalents | 15.3 | ||||||||
12 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $1,437 million | |||||||||||||
Weighted Average P/E Ratio | 19.5x | |||||||||||||
Weighted Average P/B Ratio | 2.7x | |||||||||||||
Weighted Average Yield | 1.0% | |||||||||||||
Fund Net Assets | $25 million | |||||||||||||
Number of Holdings | 67 | |||||||||||||
Symbol | RYSFX | |||||||||||||
The Funds’ P/E calculation exclude companies with zero or negative earnings. | ||||||||||||||
MORNINGSTAR STATISTICAL MEASURES* | ||||||||||||||
Category | Best Quartile | |||||||||||||
RS1 | Median | Breakpoint | ||||||||||||
Sharpe Ratio | 0.99 | 0.75 | 0.86 | |||||||||||
Standard Deviation | 14.48 | 15.25 | 14.07 | |||||||||||
Beta | 1.11 | 1.06 | 0.97 | |||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/07 | ||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RS1 | 17.46 | % | 14.48 | 1.21 | ||||||||||
Russell 2000 | 13.88 | 16.47 | 0.84 | |||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 13
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Jan-June 2007* | 4.11 | % | |||||||
One-Year | 8.21 | ||||||||
One-Year (Net)1 | 6.19 | ||||||||
Since Inception (6/30/05) | 15.56 | ||||||||
Since Inception (6/30/05) (Net)1 | 14.47 | ||||||||
EXPENSE RATIO | |||||||||
Annual Operating Expenses | 2.99 | % | |||||||
* Not Annualized. | |||||||||
TOP 10 POSITIONS % of Net Assets | |||||||||
Komag | 2.8 | % | |||||||
Integral Systems | 2.5 | ||||||||
Acacia Research-Acacia Technologies | 2.3 | ||||||||
Newport Corporation | 2.1 | ||||||||
Chardan North China Acquisition | 2.1 | ||||||||
Owens Corning | 1.9 | ||||||||
Origin Agritech | 1.5 | ||||||||
Res-Care | 1.5 | ||||||||
Liberty Mines | 1.5 | ||||||||
Actions Semiconductor ADR | 1.5 | ||||||||
TOP 5 SHORT POSITIONS % of Net Assets | |||||||||
Ultra QQQ ProShares | -1.8 | % | |||||||
BB&T Corporation | -2.0 | ||||||||
Ultra S&P 500 ProShares | -2.2 | ||||||||
Financial Select Sector SPDR Fund | -3.5 | ||||||||
Washington Mutual | -4.1 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Technology | 29.0 | % | |||||||
Health | 8.0 | ||||||||
Industrial Products | 7.2 | ||||||||
Industrial Services | 5.7 | ||||||||
Natural Resources | 5.0 | ||||||||
Consumer Services | 4.9 | ||||||||
Financial Services | 3.1 | ||||||||
Consumer Products | 2.6 | ||||||||
Financial Intermediaries | 2.4 | ||||||||
Micellaneous | 3.8 | ||||||||
Cash and Cash Equivalents | 28.3 | ||||||||
14 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $342 million | |||||||||||||
Weighted Average P/E Ratio | 19.7x | |||||||||||||
Weighted Average P/B Ratio | 2.4x | |||||||||||||
Weighted Average Yield | 0.2% | |||||||||||||
Fund Net Assets | $3 million | |||||||||||||
Number of Holdings | 82 | |||||||||||||
Symbol | RSFDX | |||||||||||||
The Funds’ P/E calculation excludes companies with zero or negative earnings. | ||||||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 15
AVERAGE ANNUAL TOTAL RETURNS Through 6/30/07 | |||||||||
Jan-June 2007* | 18.62 | % | |||||||
One-Year | 28.82 | ||||||||
One-Year (Net)1 | 26.36 | ||||||||
Since Inception (6/30/05) | 29.11 | ||||||||
Since Inception (6/30/05) (Net)1 | 27.87 | ||||||||
EXPENSE RATIO | |||||||||
Annual Operating Expenses | 2.40 | % | |||||||
* Not annualized. | |||||||||
TOP 10 POSITIONS % of Net Assets | |||||||||
Unit Corporation | 3.5 | % | |||||||
Metal Management | 3.4 | ||||||||
Knight Capital Group Cl. A | 3.4 | ||||||||
Lincoln Electric Holdings | 3.3 | ||||||||
Fronteer Development Group | 2.7 | ||||||||
Silver Standard Resources | 2.6 | ||||||||
Schnitzer Steel Industries Cl. A | 2.5 | ||||||||
Endeavour Mining Capital | 2.4 | ||||||||
Ensign Energy Services | 2.4 | ||||||||
Gammon Gold | 2.3 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||
Natural Resources | 26.1 | % | |||||||
Industrial Products | 24.5 | ||||||||
Consumer Products | 6.6 | ||||||||
Industrial Services | 4.8 | ||||||||
Consumer Services | 4.7 | ||||||||
Technology | 4.7 | ||||||||
Financial Services | 3.8 | ||||||||
Financial Intermediaries | 3.4 | ||||||||
Health | 3.1 | ||||||||
Cash and Cash Equivalents | 18.3 | ||||||||
16 | The Royce Funds 2007 Semiannual Report to Shareholders
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization | $1,274 million | |||||||||||||
Weighted Average P/E Ratio | 16.3x | |||||||||||||
Weighted Average P/B Ratio | 3.1x | |||||||||||||
Weighted Average Yield | 0.7% | |||||||||||||
Fund Net Assets | $4 million | |||||||||||||
Number of Holdings | 50 | |||||||||||||
Symbol | RSFTX | |||||||||||||
The Funds’ P/E calculation excludes companies with zero or negative earnings. | ||||||||||||||
The Royce Funds 2007 Semiannual Report to Shareholders | 17
[This page intentionally left blank.]
18 | The Royce Funds 2007 Semiannual Report to Shareholders
Schedules of Investments | June 30, 2007 (unaudited) |
Royce Select Fund I |
SHARES | VALUE | |||||
COMMON STOCKS – 84.7% | ||||||
Consumer Products – 2.4% | ||||||
Apparel and Shoes - 0.7% | ||||||
Columbia Sportswear | 2,700 | $ | 185,436 | |||
Sports and Recreation - 1.2% | ||||||
Polaris Industries | 5,300 | 287,048 | ||||
Other Consumer Products - 0.5% | ||||||
Fossil a | 4,400 | 129,756 | ||||
Total (Cost $433,215) | 602,240 | |||||
Consumer Services – 8.3% | ||||||
Media and Broadcasting - 0.6% | ||||||
Westwood One | 20,000 | 143,800 | ||||
Retail Stores - 0.6% | ||||||
Tuesday Morning | 12,600 | 155,736 | ||||
Other Consumer Services - 7.1% | ||||||
Collectors Universe | 13,000 | 198,770 | ||||
39,200 | 638,568 | |||||
MoneyGram International | 20,800 | 581,360 | ||||
Universal Technical Institute a | 14,700 | 373,233 | ||||
1,791,931 | ||||||
Total (Cost $1,846,374) | 2,091,467 | |||||
Financial Intermediaries – 2.2% | ||||||
Banking - 1.1% | ||||||
Bank of N.T. Butterfield & Son | 4,664 | 279,840 | ||||
Real Estate Investment Trusts - 0.6% | ||||||
Capital Trust Cl. A | 4,000 | 136,560 | ||||
Other Financial Intermediaries - 0.5% | ||||||
MarketAxess Holdings a | 6,900 | 124,131 | ||||
Total (Cost $395,453) | 540,531 | |||||
Financial Services – 13.3% | ||||||
Information and Processing - 3.4% | ||||||
Morningstar a | 4,600 | 216,315 | ||||
SEI Investments b | 22,200 | 644,688 | ||||
861,003 | ||||||
Insurance Brokers - 2.3% | ||||||
Brown & Brown | 13,200 | 331,848 | ||||
Gallagher (Arthur J.) & Co. | 8,600 | 239,768 | ||||
571,616 | ||||||
Investment Management - 7.6% | ||||||
AllianceBernstein Holding L.P. b | 12,200 | 1,062,498 | ||||
Highbury Financial a | 45,300 | 278,595 | ||||
Highbury Financial (Warrants) a | 90,600 | 139,524 | ||||
Nuveen Investments Cl. A | 7,100 | 441,265 | ||||
1,921,882 | ||||||
Total (Cost $1,839,316) | 3,354,501 | |||||
Health – 1.3% | ||||||
Drugs and Biotech - 1.3% | ||||||
Perrigo Company | 17,100 | 334,818 | ||||
Total (Cost $199,676) | 334,818 | |||||
Industrial Products – 12.7% | ||||||
Automotive - 1.3% | ||||||
Gentex Corporation | 16,600 | 326,854 | ||||
SHARES | VALUE | |||||
Machinery - 5.8% | ||||||
Lincoln Electric Holdings | 3,800 | $ | 282,112 | |||
†Regal-Beloit | 7,300 | 339,742 | ||||
†Robbins & Myers | 8,300 | 440,979 | ||||
Rofin-Sinar Technologies a | 5,900 | 407,100 | ||||
1,469,933 | ||||||
Metal Fabrication and Distribution - 2.4% | ||||||
Metal Management | 7,500 | 330,525 | ||||
Quanex Corporation | 5,900 | 287,330 | ||||
617,855 | ||||||
Specialty Chemicals and Materials - 1.3% | ||||||
†Westlake Chemical | 11,400 | 320,568 | ||||
Other Industrial Products - 1.9% | ||||||
Brady Corporation Cl. A | 12,600 | 467,964 | ||||
Total (Cost $2,359,025) | 3,203,174 | |||||
Industrial Services – 16.1% | ||||||
Commercial Services - 8.3% | ||||||
4,800 | 231,360 | |||||
Copart a | 11,200 | 342,608 | ||||
54,600 | 519,246 | |||||
Grupo Aeroportuario del Centro Norte ADR a | 13,800 | 379,086 | ||||
MPS Group a | 15,600 | 208,572 | ||||
21,500 | 399,040 | |||||
2,079,912 | ||||||
Industrial Distribution - 3.1% | ||||||
MSC Industrial Direct Cl. A | 3,000 | 165,000 | ||||
Ritchie Bros. Auctioneers b | 9,900 | 619,938 | ||||
784,938 | ||||||
Transportation and Logistics - 4.7% | ||||||
Arkansas Best | 15,000 | 584,550 | ||||
†Pacer International | 12,000 | 282,240 | ||||
Universal Truckload Services a | 16,100 | 319,907 | ||||
1,186,697 | ||||||
Total (Cost $3,149,880) | 4,051,547 | |||||
Natural Resources – 6.7% | ||||||
Energy Services - 5.0% | ||||||
Calfrac Well Services | 18,000 | 354,170 | ||||
Oil States International a | 11,300 | 467,142 | ||||
Pason Systems | 28,200 | 441,564 | ||||
1,262,876 | ||||||
Oil and Gas - 1.7% | ||||||
Unit Corporation a | 6,600 | 415,206 | ||||
Total (Cost $1,318,910) | 1,678,082 | |||||
Technology – 19.4% | ||||||
Aerospace and Defense - 2.1% | ||||||
HEICO Corporation Cl. A | 14,800 | 520,220 | ||||
Components and Systems - 4.0% | ||||||
Electronics for Imaging a | 13,500 | 380,970 | ||||
Plexus Corporation a | 20,100 | 462,099 | ||||
Technitrol | 5,500 | 157,685 | ||||
1,000,754 | ||||||
Distribution - 1.2% | ||||||
Benchmark Electronics a | 13,050 | 295,191 | ||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 19 |
Schedules of Investments |
|
Royce Select Fund I (continued) | Royce Select Fund II | |
SHARES | VALUE | |||||
Technology (continued) | ||||||
IT Services - 2.4% | ||||||
Perot Systems Cl. A a | 17,300 | $ | 294,792 | |||
Syntel | 10,100 | 306,939 | ||||
601,731 | ||||||
Semiconductors and Equipment - 3.8% | ||||||
Cognex Corporation | 10,700 | 240,857 | ||||
7,700 | 309,540 | |||||
GSI Group a | 42,600 | 417,054 | ||||
967,451 | ||||||
Software - 5.3% | ||||||
Fair Isaac | 10,300 | 413,236 | ||||
26,900 | 364,226 | |||||
60,000 | 557,400 | |||||
1,334,862 | ||||||
Telecommunications - 0.6% | ||||||
Foundry Networks a | 9,900 | 164,934 | ||||
Total (Cost $3,678,449) | 4,885,143 | |||||
Miscellaneous c – 2.3% | ||||||
Total (Cost $600,066) | 586,340 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $15,820,364) | 21,327,843 | |||||
REPURCHASE AGREEMENT – 15.8% | ||||||
State Street Bank & Trust Company, | ||||||
5.10% dated 6/29/07, due 7/2/07, | ||||||
maturity value $3,996,698 (collateralized | ||||||
by obligations of various U.S. Government | ||||||
Agencies, valued at $4,094,875) | ||||||
(Cost $3,995,000) | 3,995,000 | |||||
TOTAL INVESTMENTS – 100.5% | ||||||
(Cost $19,815,364) | 25,322,843 | |||||
LIABILITIES LESS CASH | ||||||
AND OTHER ASSETS – (0.5)% | (133,002 | ) | ||||
NET ASSETS – 100.0% | $ | 25,189,841 | ||||
SECURITIES SOLD SHORT | ||||||
COMMON STOCKS – 13.5% | ||||||
Diversified Investment Companies – 11.0% | ||||||
Exchange Traded Funds - 11.0% | ||||||
Financial Select Sector SPDR Fund | 26,700 | $ | 966,006 | |||
iShares Russell Microcap Index Fund | 30,000 | 1,815,000 | ||||
Total (Proceeds $2,702,748) | 2,781,006 | |||||
Financial Intermediaries – 2.5% | ||||||
Banking - 2.5% | ||||||
BB&T Corporation | 5,000 | 203,400 | ||||
Washington Mutual | 10,000 | 426,400 | ||||
Total (Proceeds $601,114) | 629,800 | |||||
TOTAL SECURITIES SOLD SHORT | ||||||
(Proceeds $3,303,862) | $ | 3,410,806 | ||||
SHARES | VALUE | |||||
COMMON STOCKS – 71.7% | ||||||
Consumer Products – 2.6% | ||||||
Apparel and Shoes - 0.8% | ||||||
1,000 | $ | 20,330 | ||||
Sports and Recreation - 0.5% | ||||||
1,800 | 12,600 | |||||
Other Consumer Products - 1.3% | ||||||
3,000 | 33,420 | |||||
Total (Cost $53,333) | 66,350 | |||||
Consumer Services – 4.9% | ||||||
Restaurants and Lodgings - 1.5% | ||||||
3,500 | 15,960 | |||||
3,000 | 22,200 | |||||
38,160 | ||||||
Retail Stores - 2.7% | ||||||
1,900 | 24,415 | |||||
†Longs Drug Stores | 600 | 31,512 | ||||
800 | 16,128 | |||||
72,055 | ||||||
Other Consumer Services - 0.7% | ||||||
1,000 | 14,860 | |||||
300 | 4,728 | |||||
19,588 | ||||||
Total (Cost $122,496) | 129,803 | |||||
Financial Intermediaries – 2.4% | ||||||
Insurance - 0.8% | ||||||
900 | 20,277 | |||||
Securities Brokers - 1.6% | ||||||
1,000 | 23,250 | |||||
Jefferies Group b | 700 | 18,886 | ||||
42,136 | ||||||
Total (Cost $53,153) | 62,413 | |||||
Financial Services – 3.1% | ||||||
Insurance Brokers - 1.0% | ||||||
10,600 | 24,910 | |||||
Other Financial Services - 2.1% | ||||||
2,900 | 21,402 | |||||
Chardan North China Acquisition | ||||||
(Warrants) a | 13,100 | 34,322 | ||||
55,724 | ||||||
Total (Cost $87,555) | 80,634 | |||||
Health – 8.0% | ||||||
Drugs and Biotech - 3.1% | ||||||
1,170 | 17,761 | |||||
4,870 | 40,178 | |||||
Strategic Diagnostics a | 5,100 | 23,052 | ||||
80,991 | ||||||
Health Services - 3.5% | ||||||
3,500 | 32,865 | |||||
†Psychemedics Corporation | 900 | 18,369 | ||||
1,880 | 39,743 | |||||
90,977 | ||||||
20 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
| June 30, 2007 (unaudited) |
SHARES | VALUE | |||||
Health (continued) | ||||||
Medical Products and Devices - 1.4% | ||||||
4,400 | $ | 31,108 | ||||
Golden Meditech Company a | 12,000 | 6,906 | ||||
38,014 | ||||||
Total (Cost $194,862) | 209,982 | |||||
Industrial Products – 7.2% | ||||||
Automotive - 2.3% | ||||||
†Noble International | 1,700 | 34,748 | ||||
†Titan International | 800 | 25,288 | ||||
60,036 | ||||||
Construction Materials - 1.9% | ||||||
1,500 | 50,445 | |||||
Machinery - 1.4% | ||||||
500 | 21,395 | |||||
Hurco Companies a | 300 | 14,994 | ||||
36,389 | ||||||
Metal Fabrication and Distribution - 1.6% | ||||||
Commercial Metals b | 500 | 16,885 | ||||
Insteel Industries b | 1,450 | 26,100 | ||||
42,985 | ||||||
Total (Cost $167,380) | 189,855 | |||||
Industrial Services – 5.7% | ||||||
Commercial Services - 2.8% | ||||||
1,100 | 8,899 | |||||
3,000 | 14,940 | |||||
2,900 | 23,055 | |||||
2,600 | 28,054 | |||||
74,948 | ||||||
Engineering and Construction - 0.8% | ||||||
1,800 | 20,277 | |||||
Food and Tobacco Processors - 1.3% | ||||||
28,800 | 15,552 | |||||
1,580 | 17,617 | |||||
33,169 | ||||||
Transportation and Logistics - 0.8% | ||||||
2,500 | 20,150 | |||||
Total (Cost $119,668) | 148,544 | |||||
Natural Resources – 5.0% | ||||||
Energy Services - 0.6% | ||||||
500 | 14,840 | |||||
Oil and Gas - 1.5% | ||||||
Cano Petroleum a | 2,900 | 17,400 | ||||
Storm Cat Energy a | 19,000 | 21,660 | ||||
39,060 | ||||||
Precious Metals and Mining - 2.9% | ||||||
International Coal Group a | 2,300 | 13,754 | ||||
12,600 | 39,624 | |||||
8,100 | 23,490 | |||||
76,868 | ||||||
Total (Cost $138,737) | 130,768 | |||||
Technology – 29.0% | ||||||
Aerospace and Defense - 2.5% | ||||||
2,688 | 65,345 | |||||
SHARES | VALUE | |||||
Components and Systems - 10.1% | ||||||
3,790 | $ | 61,246 | ||||
Komag a | 2,300 | 73,347 | ||||
3,600 | 55,728 | |||||
†Richardson Electronics | 3,600 | 33,300 | ||||
3,500 | 10,500 | |||||
1,800 | 30,384 | |||||
264,505 | ||||||
Distribution - 1.3% | ||||||
2,684 | 16,614 | |||||
1,900 | 18,430 | |||||
35,044 | ||||||
Internet Software and Services - 1.2% | ||||||
2,000 | 32,640 | |||||
Semiconductors and Equipment - 5.0% | ||||||
6,300 | 38,745 | |||||
550 | 22,974 | |||||
1,900 | 29,013 | |||||
Jinpan International | 1,000 | 19,200 | ||||
650 | 20,371 | |||||
130,303 | ||||||
Software - 2.7% | ||||||
15,420 | 32,690 | |||||
2,200 | 20,438 | |||||
3,648 | 16,598 | |||||
69,726 | ||||||
Telecommunications - 6.2% | ||||||
Comtech Telecommunications a | 700 | 32,494 | ||||
2,869 | 32,793 | |||||
InPhonic a | 6,600 | 30,756 | ||||
1,100 | 17,754 | |||||
2,060 | 21,980 | |||||
5,913 | 25,426 | |||||
161,203 | ||||||
Total (Cost $739,586) | 758,766 | |||||
Miscellaneous c – 3.8% | ||||||
Total (Cost $103,967) | 100,481 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $1,780,737) | 1,877,596 | |||||
REPURCHASE AGREEMENT – 15.3% | ||||||
State Street Bank & Trust Company, | ||||||
5.10% dated 6/29/07, due 7/2/07, | ||||||
maturity value $400,170 (collateralized | ||||||
by obligations of various U.S. Government | ||||||
Agencies, valued at $412,563) | ||||||
(Cost $400,000) | 400,000 | |||||
TOTAL INVESTMENTS – 87.0% | ||||||
(Cost $2,180,737) | 2,277,596 | |||||
CASH AND OTHER ASSETS | ||||||
LESS LIABILITIES – 13.0% | 341,120 | |||||
NET ASSETS – 100.0% | $ | 2,618,716 | ||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 21 |
Schedules of Investments |
|
Royce Select Fund II (continued) | Royce Global Select Fund | |
SHARES | VALUE | |||||
SECURITIES SOLD SHORT | ||||||
COMMON STOCKS – 13.5% | ||||||
Diversified Investment Companies – 7.4% | ||||||
Exchange Traded Funds - 7.4% | ||||||
Financial Select Sector SPDR Fund | 2,500 | $ | 90,450 | |||
Ultra QQQ ProShares | 500 | 47,540 | ||||
Ultra S&P 500 ProShares | 600 | 56,700 | ||||
Total (Proceeds $193,963) | 194,690 | |||||
Financial Intermediaries – 6.1% | ||||||
Banking - 6.1% | ||||||
BB&T Corporation | 1,300 | 52,884 | ||||
Washington Mutual | 2,500 | 106,600 | ||||
Total (Proceeds $152,292) | 159,484 | |||||
TOTAL SECURITIES SOLD SHORT | ||||||
(Proceeds $346,255) | $ | 354,174 | ||||
SHARES | VALUE | |||||
COMMON STOCKS – 81.7% | ||||||
Consumer Products – 6.6% | ||||||
Apparel and Shoes - 2.2% | ||||||
Timberland Company Cl. A a | 1,000 | $ | 25,190 | |||
Van De Velde | 1,400 | 72,553 | ||||
97,743 | ||||||
Sports and Recreation - 3.0% | ||||||
†Thor Industries | 1,500 | 67,710 | ||||
Umbro | 21,000 | 66,418 | ||||
134,128 | ||||||
Other Consumer Products - 1.4% | ||||||
2,000 | 58,980 | |||||
Total (Cost $295,089) | 290,851 | |||||
Consumer Services – 4.7% | ||||||
Direct Marketing - 1.5% | ||||||
Nu Skin Enterprises Cl. A | 4,000 | 66,000 | ||||
Other Consumer Services - 3.2% | ||||||
Corinthian Colleges a | 2,200 | 35,838 | ||||
Lincoln Educational Services a | 2,800 | 41,608 | ||||
Renaissance Learning | 5,000 | 65,750 | ||||
143,196 | ||||||
Total (Cost $201,131) | 209,196 | |||||
Financial Intermediaries – 3.4% | ||||||
Securities Brokers - 3.4% | ||||||
Knight Capital Group Cl. A a | 9,000 | 149,400 | ||||
Total (Cost $148,573) | 149,400 | |||||
Financial Services – 3.8% | ||||||
Investment Management - 3.8% | ||||||
†CapMan Cl. B | 15,800 | 86,180 | ||||
†GP Investments BDR | 1,900 | 83,712 | ||||
Total (Cost $146,074) | 169,892 | |||||
Health – 3.1% | ||||||
Drugs and Biotech - 2.1% | ||||||
Endo Pharmaceuticals Holdings a | 700 | 23,961 | ||||
Lexicon Pharmaceuticals a | 9,500 | 30,495 | ||||
Orchid Cellmark a | 8,000 | 37,120 | ||||
91,576 | ||||||
Medical Products and Devices - 1.0% | ||||||
Caliper Life Sciences a | 10,000 | 46,900 | ||||
Total (Cost $133,637) | 138,476 | |||||
Industrial Products – 24.5% | ||||||
Building Systems and Components - 2.4% | ||||||
†Duratex | 2,000 | 57,024 | ||||
Simpson Manufacturing | 1,400 | 47,236 | ||||
104,260 | ||||||
Machinery - 8.8% | ||||||
1,400 | 59,570 | |||||
†Kennametal | 600 | 49,218 | ||||
Lincoln Electric Holdings | 2,000 | 148,480 | ||||
Pfeiffer Vacuum Technology | 800 | 77,147 | ||||
Woodward Governor | 1,000 | 53,670 | ||||
388,085 | ||||||
22 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
| June 30, 2007 (unaudited) |
SHARES | VALUE | |||||
Industrial Products (continued) | ||||||
Metal Fabrication and Distribution - 11.8% | ||||||
†Chaparral Steel | 1,200 | $ | 86,244 | |||
†Dynamic Materials | 1,700 | 63,750 | ||||
IPSCO | 300 | 47,664 | ||||
Metal Management | 3,400 | 149,838 | ||||
Reliance Steel & Aluminum | 1,200 | 67,512 | ||||
Schnitzer Steel Industries Cl. A | 2,300 | 110,262 | ||||
525,270 | ||||||
Paper and Packaging - 1.5% | ||||||
†Mayr-Melnhof Karton | 300 | 68,287 | ||||
Total (Cost $882,567) | 1,085,902 | |||||
Industrial Services – 4.8% | ||||||
Commercial Services - 3.3% | ||||||
Labor Ready a | 2,000 | 46,220 | ||||
4,000 | 60,440 | |||||
Portfolio Recovery Associates | 700 | 42,014 | ||||
148,674 | ||||||
Transportation and Logistics - 1.5% | ||||||
Arkansas Best | 1,700 | 66,249 | ||||
Total (Cost $189,506) | 214,923 | |||||
Natural Resources – 26.1% | ||||||
Energy Services - 6.9% | ||||||
Ensign Energy Services | 6,000 | 107,017 | ||||
Pason Systems | 2,200 | 34,448 | ||||
Tesco Corporation a | 2,000 | 63,100 | ||||
Trican Well Service | 4,900 | 99,771 | ||||
304,336 | ||||||
Oil and Gas - 3.6% | ||||||
Unit Corporation a | 2,500 | 157,275 | ||||
Precious Metals and Mining - 15.6% | ||||||
Endeavour Mining Capital | 12,000 | 107,918 | ||||
10,000 | 119,000 | |||||
Gammon Gold a | 8,000 | 100,960 | ||||
Ivanhoe Mines a | 7,000 | 99,680 | ||||
15,000 | 74,630 | |||||
Silver Standard Resources a | 3,400 | 116,858 | ||||
Silvercorp Metals a | 4,400 | 74,555 | ||||
693,601 | ||||||
Total (Cost $1,009,395) | 1,155,212 | |||||
SHARES | VALUE | |||||
Technology – 4.7% | ||||||
Distribution - 1.2% | ||||||
Diploma | 2,800 | $ | 50,773 | |||
Semiconductors and Equipment - 1.4% | ||||||
†Vaisala Cl. A | 1,200 | 63,342 | ||||
Telecommunications - 2.1% | ||||||
ADTRAN | 2,000 | 51,940 | ||||
Foundry Networks a | 2,500 | 41,650 | ||||
93,590 | ||||||
Total (Cost $180,426) | 207,705 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $3,186,398) | 3,621,557 | |||||
REPURCHASE AGREEMENT – 21.0% | ||||||
State Street Bank & Trust Company, | ||||||
5.10% dated 6/29/07, due 7/2/07, | ||||||
maturity value $932,396 (collateralized | ||||||
by obligations of various U.S. Government | ||||||
Agencies, valued at $955,938) | ||||||
(Cost $932,000) | 932,000 | |||||
TOTAL INVESTMENTS – 102.7% | ||||||
(Cost $4,118,398) | 4,553,557 | |||||
LIABILITIES LESS CASH | ||||||
AND OTHER ASSETS – (2.7)% | (120,366 | ) | ||||
NET ASSETS – 100.0% | $ | 4,433,191 | ||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 23 |
Statements of Assets and Liabilities | June 30, 2007 (unaudited) |
Royce | Royce | Royce | ||||||||||
Select | Select | Global Select | ||||||||||
Fund I | Fund II | Fund | ||||||||||
ASSETS: | ||||||||||||
Investments at value* | $ | 21,327,843 | $ | 1,877,596 | $ | 3,621,557 | ||||||
Repurchase agreements (at cost and value) | 3,995,000 | 400,000 | 932,000 | |||||||||
Deposits with brokers for securities sold short | 3,305,994 | 270,147 | – | |||||||||
Cash and foreign currency | 29,931 | – | 1,404 | |||||||||
Receivable for investments sold | 85,070 | 42,111 | – | |||||||||
Receivable for capital shares sold | – | 403,458 | – | |||||||||
Receivable for dividends and interest | 16,249 | 327 | 2,121 | |||||||||
Total Assets | 28,760,087 | 2,993,639 | 4,557,082 | |||||||||
LIABILITIES: | ||||||||||||
Securities sold short, at fair value** | 3,410,806 | 354,174 | – | |||||||||
Payable for investments purchased | 29,536 | 5,375 | 117,340 | |||||||||
Payble for capital shares redeemed | 105,230 | – | – | |||||||||
Payble for dividends and interest | 8,484 | 673 | – | |||||||||
Payable for investment advisory fees | 16,190 | – | 6,551 | |||||||||
Payable to custodian for cash overdrawn | – | 14,701 | – | |||||||||
Total Liabilities | 3,570,246 | 374,923 | 123,891 | |||||||||
Net Assets | $ | 25,189,841 | $ | 2,618,716 | $ | 4,433,191 | ||||||
ANALYSIS OF NET ASSETS: | ||||||||||||
Paid-in capital | $ | 17,103,233 | $ | 2,396,686 | $ | 3,834,475 | ||||||
Undistributed net investment income (loss) | (46,988 | ) | (7,329 | ) | (42,627 | ) | ||||||
Accumulated net realized gain (loss) on investments and foreign currency | 2,733,051 | 140,418 | 206,177 | |||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 5,400,545 | 88,941 | 435,166 | |||||||||
Net Assets | $ | 25,189,841 | $ | 2,618,716 | $ | 4,433,191 | ||||||
Investment Class | $ | 25,189,841 | $ | 2,618,716 | $ | 4,433,191 | ||||||
SHARES OUTSTANDING: | ||||||||||||
(unlimited number of $.001 par value | ||||||||||||
shares authorized for each Fund) | ||||||||||||
Investment Class | 1,207,336 | 209,877 | 278,210 | |||||||||
NET ASSET VALUES: | ||||||||||||
(Net Assets ÷ Shares Outstanding) | ||||||||||||
Investment Class (1) | $20.86 | $12.48 | $15.93 | |||||||||
$ | 15,820,364 | $ | 1,780,737 | $ | 3,186,398 | |||||||
3,303,862 | 346,255 | – | ||||||||||
Aggregate value of segregated securities | 3,255,394 | 638,057 | – | |||||||||
(1) Offering and redemption price per share; shares redeemed within three years of purchase are subject to a 2% redemption fee, payable to the Fund. |
24 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Statements of Changes in Net Assets |
|
Royce Select Fund I | Royce Select Fund II | Royce Global Select Fund | ||||||||||||||||||||||
Six months ended | Six months ended | Six months ended | ||||||||||||||||||||||
6/30/07 | Year ended | 6/30/07 | Year ended | 6/30/07 | Year ended | |||||||||||||||||||
(unaudited) | 12/31/06 | (unaudited) | 12/31/06 | (unaudited) | 12/31/06 | |||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) | $ | (99,867 | ) | $ | (113,700 | ) | $ | (7,615 | ) | $ | (22,585 | ) | $ | (32,699 | ) | $ | (6,249 | ) | ||||||
Net realized gain (loss) on investments | ||||||||||||||||||||||||
and foreign currency | 2,379,656 | 3,209,279 | 113,442 | 163,874 | 178,872 | 94,344 | ||||||||||||||||||
Net change in unrealized appreciation | ||||||||||||||||||||||||
(depreciation) on investments and | ||||||||||||||||||||||||
foreign currency | (16,628 | ) | 294,001 | (21,433 | ) | 67,704 | 266,080 | 100,571 | ||||||||||||||||
Net increase (decrease) in net assets from | ||||||||||||||||||||||||
investment operations | 2,263,161 | 3,389,580 | 84,394 | 208,993 | 412,253 | 188,666 | ||||||||||||||||||
DISTRIBUTIONS: | ||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||
Investment Class | – | – | – | – | – | (2,778 | ) | |||||||||||||||||
Net realized gain on investments and | ||||||||||||||||||||||||
foreign currency | ||||||||||||||||||||||||
Investment Class | – | (3,301,264 | ) | (4,329 | ) | (112,225 | ) | – | (65,695 | ) | ||||||||||||||
Total distributions | – | (3,301,264 | ) | (4,329 | ) | (112,225 | ) | – | (68,473 | ) | ||||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Value of shares sold | ||||||||||||||||||||||||
Investment Class | 705,592 | 486,982 | 834,623 | 739,668 | 2,706,474 | 1,156,378 | ||||||||||||||||||
Distributions reinvested | ||||||||||||||||||||||||
Investment Class | – | 3,092,343 | 4,329 | 112,225 | – | 68,474 | ||||||||||||||||||
Value of shares redeemed | ||||||||||||||||||||||||
Investment Class | (1,203,581 | ) | (5,801,846 | ) | (69,209 | ) | – | (284,896 | ) | (293,000 | ) | |||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||
Investment Class | 4,533 | 9,757 | 874 | – | – | – | ||||||||||||||||||
Net increase (decrease) in net assets from | ||||||||||||||||||||||||
capital share transactions | (493,456 | ) | (2,212,764 | ) | 770,617 | 851,893 | 2,421,578 | 931,852 | ||||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS | 1,769,705 | (2,124,448 | ) | 850,682 | 948,661 | 2,833,831 | 1,052,045 | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of period | 23,420,136 | 25,544,584 | 1,768,034 | 819,373 | 1,599,360 | 547,315 | ||||||||||||||||||
End of period | $ | 25,189,841 | $ | 23,420,136 | $ | 2,618,716 | $ | 1,768,034 | $ | 4,433,191 | $ | 1,599,360 | ||||||||||||
UNDISTRIBUTED NET INVESTMENT | ||||||||||||||||||||||||
INCOME (LOSS) AT END OF PERIOD | $ | (46,988 | ) | $ | 52,879 | $ | (7,329 | ) | $ | 286 | $ | (42,627 | ) | $ | (9,928 | ) |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 25 |
Statements of Operations | Six Months Ended June 30, 2007 (unaudited) |
Royce | Royce | Royce | ||||||||||||||||||||||
Select | Select | Global Select | ||||||||||||||||||||||
Fund I | Fund II | Fund | ||||||||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||||||
Income: | ||||||||||||||||||||||||
Interest | $ | 118,117 | $ | 5,433 | $ | 17,905 | ||||||||||||||||||
Dividends | 109,154 | 1,957 | 13,456 | |||||||||||||||||||||
Total income | 227,271 | 7,390 | 31,361 | |||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Investment advisory fees | 309,186 | 12,187 | 64,060 | |||||||||||||||||||||
Dividends on securities sold short | 17,952 | 2,818 | – | |||||||||||||||||||||
Total expenses | 327,138 | 15,005 | 64,060 | |||||||||||||||||||||
Net expenses | 327,138 | 15,005 | 64,060 | |||||||||||||||||||||
Net investment income (loss) | (99,867 | ) | (7,615 | ) | (32,699 | ) | ||||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||||||||||||||||||||
AND FOREIGN CURRENCY: | ||||||||||||||||||||||||
Net realized gain (loss) on investments and foreign currency | 2,379,656 | 113,442 | 178,872 | |||||||||||||||||||||
Net change in unrealized appreciation | ||||||||||||||||||||||||
(depreciation) on investments and foreign currency | (16,628 | ) | (21,433 | ) | 266,080 | |||||||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | 2,363,028 | 92,009 | 444,952 | |||||||||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS FROM | ||||||||||||||||||||||||
INVESTMENT OPERATIONS | $ | 2,263,161 | $ | 84,394 | $ | 412,253 |
26 | The Royce Funds 2007 Semiannual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Financial Highlights |
|
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.
Net Realized | Distributions | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net | Net | and Unrealized | Distributions | from Net | Investment | |||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Value, | Investment | Gain (Loss) on | Total from | from Net | Realized Gain on | Shareholder | Net Asset | Net Assets, | Ratio of Expenses | Income (Loss) | Portfolio | |||||||||||||||||||||||||||||||||||||||||||||
Beginning | Income | Investments and | Investment | Investment | Investments and | Total | Redemption | Value, End | Total | End of Period | to Average | to Average | Turnover | |||||||||||||||||||||||||||||||||||||||||||
of Period | (Loss) | Foreign Currency | Operations | Income | Foreign Currency | Distributions | Fees | of Period | Return | (in thousands) | Net Assets | Net Assets | Rate | |||||||||||||||||||||||||||||||||||||||||||
Royce Select I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 19.02 | $ | (0.08 | ) | $ | 1.92 | $ | 1.84 | $ | – | $ | – | $ | – | $ | – | $ | 20.86 | 9.67 | %* | $ | 25,190 | 1.34 | %* | (0.41 | )%* | 31 | % | |||||||||||||||||||||||||||
2006 | 19.16 | (0.09 | ) | 2.99 | 2.90 | – | (3.05 | ) | (3.05 | ) | 0.01 | 19.02 | 15.02 | 23,420 | 2.18 | (0.46 | ) | 45 | ||||||||||||||||||||||||||||||||||||||
2005(a) | 20.87 | (0.05 | ) | 2.32 | 2.27 | – | (3.99 | ) | (3.99 | ) | 0.01 | 19.16 | 10.87 | 25,545 | 1.67 | (0.22 | ) | 83 | ||||||||||||||||||||||||||||||||||||||
2004(a) | 19.81 | (0.32 | ) | 4.08 | 3.76 | – | (2.71 | ) | (2.71 | ) | 0.01 | 20.87 | 19.08 | 24,917 | 2.45 | (1.54 | ) | 53 | ||||||||||||||||||||||||||||||||||||||
2003(a) | 14.60 | (0.31 | ) | 7.39 | 7.08 | – | (1.88 | ) | (1.88 | ) | 0.01 | 19.81 | 48.67 | 21,640 | 2.69 | (1.74 | ) | 30 | ||||||||||||||||||||||||||||||||||||||
2002(a) | 17.70 | (0.10 | ) | (2.71 | ) | (2.81 | ) | – | (0.31 | ) | (0.31 | ) | 0.02 | 14.60 | (15.82 | ) | 16,183 | 1.01 | (0.60 | ) | 90 | |||||||||||||||||||||||||||||||||||
Royce Select Fund II (b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 12.01 | $ | (0.04 | ) | $ | 0.52 | $ | 0.48 | $ | – | $ | (0.02 | ) | $ | (0.02 | ) | $ | 0.01 | $ | 12.48 | 4.11 | %* | $ | 2,619 | 0.71 | %* | (0.36 | )%* | 282 | % | |||||||||||||||||||||||||
2006 | 10.71 | (0.21 | ) | 2.32 | 2.11 | – | (0.81 | ) | (0.81 | ) | – | 12.01 | 19.76 | 1,768 | 2.99 | (1.70 | ) | 443 | ||||||||||||||||||||||||||||||||||||||
2005 | 10.00 | (0.06 | ) | 0.77 | 0.71 | – | – | – | – | 10.71 | 7.10 | * | 819 | 1.12 | * | (0.64 | )* | 239 | ||||||||||||||||||||||||||||||||||||||
Royce Global Select Fund (b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
†2007 | $ | 13.43 | $ | (0.17 | ) | $ | 2.67 | $ | 2.50 | $ | – | $ | – | $ | – | $ | – | $ | 15.93 | 18.62 | %* | $ | 4,433 | 2.31 | %* | (1.18 | )%* | 31 | % | |||||||||||||||||||||||||||
2006 | 11.77 | 0.00 | 2.29 | 2.29 | (0.03 | ) | (0.60 | ) | (0.63 | ) | – | 13.43 | 19.40 | 1,599 | 2.40 | (0.57 | ) | 50 | ||||||||||||||||||||||||||||||||||||||
2005 | 10.00 | (0.20 | ) | 1.97 | 1.77 | – | – | – | – | 11.77 | 17.70 | * | 547 | 2.45 | * | (1.84 | )* | 22 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | The Royce Funds 2007 Semiannual Report to Shareholders | 27 |
Notes to Financial Statements (unaudited) |
|
Summary of Significant Accounting Policies: Royce Select Fund I, Royce Select Fund II and Royce Global Select Fund (the “Fund” or “Funds”), are three series of The Royce Fund (the “Trust”), a diversified open-end management investment company organized as a Delaware business trust. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Valuation of Investments: Securities are valued as of the close of trading on the New York Stock Exchange (NYSE) (generally 4:00 p.m. Eastern time) on the valuation date. Securities that trade on an exchange, and securities traded on Nasdaq’s Electronic Bulletin Board, are valued at their last reported sales price or Nasdaq official closing price taken from the primary market in which each security trades or, if no sale is reported for such day, at their highest bid price (in the case of long positions) and at the lowest ask price (in the case of short positions). Other over-the-counter securities for which market quotations are readily available are valued at their highest bid price. Securities for which market quotations are not readily available are valued at their fair value under procedures established by the Board of Trustees. In addition, if, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and may make the closing price unreliable, the Fund may fair value the security. The Funds use an independent pricing service to provide fair value estimates for relevant non-U.S. equity securities on days when the U.S. market volatility exceeds a certain threshold. This pricing service uses proprietary correlations it has developed between the movement of prices of non-U.S. equity securities and indices of U.S.-traded securities, futures contracts and other indications to estimate the fair value of relevant non-U.S. securities. Bonds and other fixed income securities may be valued by reference to other securities with comparable ratings, interest rates and maturities, using established independent pricing services. Investments in money market funds are valued at net asset value per share. Foreign Currency: The Funds value their non-U.S. securities in U.S. dollars on the basis of foreign currency exchange rates provided to the Funds by their custodian, State Street Bank and Trust Company. The effects of changes in foreign exchange rates on investments and other assets and liabilities are included with net realized and unrealized gains and losses on investments. Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, expiration of currency forward contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, | including investments in securities at the end of the reporting period, as a result of changes in foreign currency exchange rates. Investment Transactions and Related Investment Income: Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Non-cash dividend income is recorded at the fair market value of the securities received. Interest income is recorded on an accrual basis. Realized gains and losses from investment transactions are determined on the basis of identified cost for book and tax purposes. Expenses: The Funds generally incur only performance fees as expenses. See the “Investment Adviser” section of these notes. Distributions and Taxes: As qualified regulated investment companies under Subchapter M of the Internal Revenue Code, the Funds are not subject to income taxes to the extent that each Fund distributes substantially all of its taxable income for its fiscal year. The Funds pay any dividends and capital gain distributions annually in December. Because federal income tax regulations differ from generally accepted accounting principles, income and capital gain distributions determined in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Accordingly, the character of distributions and composition of net assets for tax purposes differ from those reflected in the accompanying financial statements. Repurchase Agreements: The Funds may enter into repurchase agreements with institutions that the Funds’ investment adviser has determined are creditworthy. Each Fund restricts repurchase agreements to maturities of no more than seven days. Securities pledged as collateral for repurchase agreements, which are held until maturity of the repurchase agreements, are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). Repurchase agreements could involve certain risks in the event of default or insolvency of the counter-party, including possible delays or restrictions upon the ability of each Fund to dispose of its underlying securities. Short Sales: The Funds may sell a security they do not own in anticipation of a decline in the fair value of that security. When the Funds sell a security short, they must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale. A gain, limited to the price at which the Funds sold the security short, or a loss, unlimited in size, will be recognized upon the termination of a short sale. On ex-dividend date, dividends on short sales are recorded as an expense to the Fund. Line of Credit: The Funds, along with certain other Royce Funds, participate in a $75 million line of credit (“Credit Agreement”) to be used for temporary or emergency purposes. Pursuant to the Credit Agreement, each participating Fund is liable only for principal and interest payments related to borrowings made by that Fund. Borrowings under the Credit Agreement |
28 | The Royce Funds 2007 Semiannual Report to Shareholders |
|
|
bear interest at a rate equal to the prevailing federal funds rate plus the federal funds rate margin. The Funds did not utilize the line of credit during the six months ended June 30, 2007. Recent Accounting Pronouncements: Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”) provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current | year. FIN 48 was adopted for the Funds on June 29, 2007. There was no material impact to the financial statements or disclosures thereto as a result of the adoption of this pronouncement. FASB Statement of Financial Accounting Standard No. 157, “Fair Value Measurement” (“FAS 157”), provides enhanced guidance for using fair value to measure assets and liabilities. The standard requires companies to provide expanded information about the assets and liabilities measured at fair value and the potential effect of these fair valuations on an entity’s financial performance. The standard does not expand the use of fair value in any new circumstances, but provides clarification on acceptable fair valuation methods and applications. Adoption of FAS 157 is required for fiscal years beginning after November 15, 2007. The standard is not expected to materially impact the Fund’s financial statements. |
The Royce Funds 2007 Semiannual Report to Shareholders | 29 |
Notes to Financial Statements (unaudited) (continued) |
|
Capital Share Transactions (in shares):
Shares issued for | Shares | Net increase (decrease) in | ||||||||||||||||||||||||||||||
Shares sold | reinvestment of distributions | redeemed | shares outstanding | |||||||||||||||||||||||||||||
Six months | Six months | Six months | Six months | |||||||||||||||||||||||||||||
ended | ended | ended | ended | |||||||||||||||||||||||||||||
6/30/07 | Year ended | 6/30/07 | Year ended | 6/30/07 | Year ended | 6/30/07 | Year ended | |||||||||||||||||||||||||
(unaudited) | 12/31/06 | (unaudited) | 12/31/06 | (unaudited) | 12/31/06 | (unaudited) | 12/31/06 | |||||||||||||||||||||||||
Royce Select Fund I | 36,186 | 24,008 | – | 160,892 | (59,990 | ) | (286,737 | ) | (23,804 | ) | (101,837 | ) | ||||||||||||||||||||
Royce Select Fund II | 67,964 | 61,313 | 344 | 9,360 | (5,604 | ) | – | 62,704 | 70,673 | |||||||||||||||||||||||
Royce Global Select Fund | 180,304 | 90,809 | – | 5,053 | (21,191 | ) | (23,247 | ) | 159,113 | 72,615 |
Investment Adviser:
Under the Trust’s investment advisory agreements with Royce & Associates, LLC (“Royce”), Royce is entitled to receive performance fees that are computed daily and payable monthly. Royce is entitled to receive from each of the Funds a performance fee of 12.5% of each Fund’s pre-fee total return (calculated using “then current” net assets of the Fund), subject to high watermark accounting. Fund shares will not bear a fee for any day on which the Fund’s pre-fee cumulative total return does not exceed its pre-fee cumulative total return as of the day on which a fee was last accrued. However, Royce will not reimburse previously accrued fees because of any negative total returns occurring after their accrual. The agreement provides that all expenses of the Funds, except brokerage commissions, dividends on short sales, taxes, interest and extraordinary expenses, will be paid by Royce. For the six months ended June 30, 2007, the Funds accrued the following performance fees:
Royce Select Fund I | $ 309,186 | ||
Royce Select Fund II | 12,187 | ||
Royce Global Select Fund | 64,060 |
Purchases and Sales of Investment Securities:
For the six months ended June 30, 2007, the cost of purchases and the proceeds from sales of investment securities, other than short-term securities, were as follows:
Short | Purchases to | |||||||||||||||
Purchases | Sales | Sales | Cover Short Sales | |||||||||||||
Royce Select Fund I | $ | 5,805,802 | $ | 7,928,030 | $ | 3,303,862 | $ | – | ||||||||
Royce Select Fund II | 3,104,868 | 3,115,145 | 1,759,433 | 1,672,889 | ||||||||||||
Royce Global Select Fund | 2,600,061 | 676,196 | – | – |
Tax Information:
At June 30, 2007, net unrealized appreciation (depreciation) based on identified cost for tax purposes was as follows:
Net Unrealized | Gross Unrealized | |||||||||||||||
Appreciation | ||||||||||||||||
Tax Basis Cost | (Depreciation) | Appreciation | Depreciation | |||||||||||||
Royce Select Fund I | $ | 16,511,502 | $ | 5,400,535 | $ | 5,694,663 | $ | 294,128 | ||||||||
Royce Select Fund II | 1,840,901 | 82,521 | 201,933 | 119,412 | ||||||||||||
Royce Global Select Fund | 4,118,398 | 435,159 | 467,159 | 32,000 |
30 | The Royce Funds 2007 Semiannual Report to Shareholders |
Understanding Your Fund’s Expenses (unaudited) |
|
As a shareholder of a mutual fund, you pay ongoing expenses, including management fees and other Fund expenses including, for some funds, distribution and/or service (12b-1) fees. Using the information below, you can estimate how these ongoing expenses (in dollars) affect your investment and compare them with the ongoing expenses of other funds. You may also incur one-time transaction expenses, including redemption fees, which are not shown in this section and would result in higher total costs. The example is based on an investment of $1,000 invested at January 1, 2007 and held for the entire six-month period ended June 30, 2007. Actual Expenses The first part of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value at June 30, 2007 by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period. | Hypothetical Example for Comparison Purposes The second part of the table below provides information about hypothetical account values and hypothetical expenses based on an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return, and the expense ratio that would be incurred at that rate of return before expenses. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, this section is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. |
Actual | Hypothetical (5% per year return before expenses) | |||||||||||||||||||||||||||||||
Beginning | Ending | Expenses Paid | Actual | Beginning | Ending | Expenses Paid | Hypothetical | |||||||||||||||||||||||||
Account Value | Account Value | During the | Expense | Account Value | Account Value | During the | Expense | |||||||||||||||||||||||||
1/1/07 | 6/30/07 | Period (1) | Ratio (1,2) | 1/1/07 | 6/30/07 | Period (3) | Ratio (4) | |||||||||||||||||||||||||
Royce Select Fund I | $ | 1,000.00 | $ | 1,096.70 | $ | 6.60 | 1.34 | % | $ | 1,000.00 | $ | 1,018.91 | $ | 6.36 | 0.63 | % | ||||||||||||||||
Royce Select Fund II | 1,000.00 | 1,041.10 | 6.43 | 0.71 | % | 1,000.00 | 1,018.91 | 6.36 | 0.63 | % | ||||||||||||||||||||||
Royce Global Select Fund | 1,000.00 | 1,186.20 | 6.89 | 2.31 | % | 1,000.00 | 1,018.91 | 6.36 | 0.63 | % |
The Royce Funds 2007 Semiannual Report to Shareholders | 31 |
Board Approval of Investment Advisory Agreements |
|
At meetings held on June 6-7, 2007, The Royce Fund’s Board of Trustees, including all of the non-interested trustees, approved the continuance of the Investment Advisory Agreements between Royce & Associates, LLC (“R&A”) and each of Royce Select Fund I (“RS1”), Royce Select Fund II (“RS2”) and Royce Global Select Fund (“RGS”) (the “Funds”). In reaching these decisions, the Board reviewed the materials provided by R&A, which included, among other things, information prepared internally by R&A and independently by Morningstar Associates, LLC (“Morningstar”) containing detailed expense ratio and investment performance comparisons for each Fund with other mutual funds in their “peer group” and “category” (investment performance comparisons were not provided for RS2 and RGS due to their limited operating history), information regarding the past performance of Funds managed by R&A and a memorandum outlining the legal duties of the Board prepared by independent counsel to the non-interested trustees. R&A also provided the trustees with an analysis of its profitability with respect to providing investment advisory services to each of the Funds. In addition, the Board took into account information furnished throughout the year at regular Board meetings, including reports on investment performance, shareholder services, regulatory compliance, brokerage commissions and research, brokerage and execution products and services provided to the Funds. The Board also considered other matters they deemed important to the approval process such as allocation of Fund brokerage commissions, and other direct and indirect benefits to R&A and its affiliates, from their relationship with the Funds. The trustees also met throughout the year with investment advisory personnel from R&A. The Board, in its deliberations, recognized that, for many of the Funds’ shareholders, the decision to purchase Fund shares included a decision to select R&A as the investment adviser and that there was a strong association in the minds of Fund shareholders between R&A and each Fund. In considering factors relating to the approval of the continuance of the Investment Advisory Agreements, the non-interested trustees received assistance and advice from, and met separately with, their independent counsel. While the Investment Advisory Agreements for the Funds were considered at the same Board meetings, the trustees dealt with each agreement separately. Among other factors, the trustees considered the following:
The nature, extent and quality of services provided by R&A: The trustees considered the following factors to be of fundamental importance to their consideration of whether to approve the continuance of the Funds’ Investment Advisory Agreements: (i) R&A’s more than 30 years of small-cap value investing experience and track record; (ii) the history of long-tenured R&A portfolio managers managing many of the Funds; (iii) R&A’s sole focus on mid-cap, small-cap and micro-cap value investing; (iv) the consistency of R&A’s approach to managing the Funds over more than 30 years; (v) the integrity and high ethical standards adhered to at R&A; (vi) R&A’s specialized experience in the area of trading small- and micro-cap securities; (vii) R&A’s historical ability to attract and retain portfolio management talent; and (viii) R&A’s focus on shareholder interests as exemplified by capping expenses on smaller funds, closing funds to new investors when R&A believed such closings were in the best interests of existing shareholders, establishing break points for a number of funds and providing expansive shareholder reporting and communications. The trustees reviewed the services that R&A provides to the Funds, including, but not limited to, managing each Fund’s investments in accordance with the stated policies of each Fund. The trustees determined that the services to be provided to each Fund by R&A would be the same as those it previously provided to the Funds. They also took into consideration the histories, reputations and backgrounds of R&A’s portfolio managers for the Funds, finding that these would likely have an impact on the continued success of the Funds. Lastly, the trustees noted R&A’s ability to attract quality and experienced personnel. The trustees concluded that the services provided by R&A to each Fund compared favorably to services provided by R&A to other R&A client accounts, including other funds, in both nature and quality, and that the scope of services provided by R&A would continue to be suitable for each Fund.
Investment performance of the Funds and R&A: In light of R&A’s risk-averse approach to investing, the trustees believe that risk-adjusted performance continues to be an appropriate measure of each Fund’s investment performance. One measure of risk-adjusted performance the trustees have historically used in their review of the Funds’ performance is the Sharpe Ratio. The Sharpe Ratio is a risk-adjusted measure of performance developed by Nobel Laureate William Sharpe. It is calculated by dividing a fund’s annualized excess returns by its annualized standard deviation to determine reward per unit of risk. The higher the Sharpe Ratio, the better a fund’s historical risk-adjusted performance. The Board attaches primary importance to risk-adjusted performance over relatively long periods of time, typically three to five years. RS1 fell in the 1st or 2nd quartiles within its small-cap universe categories for the three- and five-year periods ended December 31, 2006, respectively. In addition to RS1’s risk adjusted performance, the trustees also reviewed its absolute total returns and down-market performance. Because of RS2’s and RGS’s limited operating histories, the Board did not consider their performance but rather the performance of other Royce Funds.
The trustees noted that R&A manages a number of funds that invest in small-cap and micro-cap issuers, many of which were outperforming the Russell 2000 Index and their competitors. Although the trustees recognized that past performance is not necessarily an indicator of future results, they found that R&A had the necessary qualifications, experience and track record in managing small-cap and micro-cap securities to manage the Funds. The trustees determined that R&A continued to be an appropriate investment adviser for the Funds and concluded that RS1’s performance and the performance of other Royce Funds with respect to RS2 and RGS, supported the renewal of each Fund’s Investment Advisory Agreement.
Cost of the services provided and profits realized by R&A from its relationship with each Fund: The trustees considered the cost of the services provided by R&A and profits realized by R&A from its relationship with each Fund. As part of the analysis, the Board discussed with R&A its methodology in allocating its costs to each Fund and concluded that its allocations were reasonable. The trustees concluded that R&A’s profits were reasonable in relation to the nature and quality of services provided.
The extent to which economies of scale would be realized as the Funds grow and whether fee levels would reflect such economies of scale: The trustees considered whether there have been economies of scale in respect of the management of the Funds, whether the Funds have appropriately benefited from any economies of scale and whether there is potential for realization of any further economies of scale. The trustees noted the time and effort
32 | Royce Fund 2007 Semiannual Report to Shareholders |
Board Approval of Investment Advisory Agreements (continued) |
|
involved in managing portfolios of small- and micro-cap stocks and that they did not involve the same efficiencies as do portfolios of large-cap stocks. The trustees noted the Funds charge an all-inclusive performance fee. The trustees concluded that the current fee structure for each Fund was reasonable, and that no changes were currently necessary.
Comparison of services to be rendered and fees to be paid to those under other investment advisory contracts, such as contracts of the same and other investment advisers or other clients: The trustees reviewed the investment advisory fee paid by each Fund and compared both the services to be rendered and the fees to be paid under the Investment Advisory Agreements to other contracts of R&A and to contracts of other investment advisers to registered investment companies investing in small- and micro-cap stocks, as provided by Morningstar. The trustees noted the importance of the net expense ratio in measuring a fund’s efficiency, particularly in light of the variations in the mutual fund industry as to who is responsible for which expenses. The Funds each had a net expense ratio in the 4th quartile of their Morningstar peer group, but the trustees noted that due to the unique nature of their expense structure, direct comparisons to other funds were not helpful. The Funds pay an all-inclusive management fee equal to 12.5% of their pre-fee total return, measured using a high watermark test.
The trustees also considered fees charged by R&A to institutional and other clients and noted that due to the unique nature of the Funds’ expense structure, direct comparisions to these other accounts were not helpful.
After the non-interested trustees deliberated in executive session, the entire Board, including all the non-interested trustees, determined to approve the renewal of the existing Investment Advisory Agreements, concluding that a contract renewal on the existing terms was in the best interest of the shareholders of each Fund and that each investment advisory fee rate was reasonable in relation to the services provided.
Royce Fund 2007 Semiannual Report to Shareholders | 33 |
Notes to Performance and Other Important Information |
|
The thoughts expressed in this report concerning recent market movements and future prospects for small company stocks are solely the opinion of Royce at June 30, 2007, and, of course, historical market trends are not necessarily indicative of future market movements. Statements regarding the future prospects for particular securities held in the Funds’ portfolios and Royce’s investment intentions with respect to those securities reflect Royce’s opinions as of June 30, 2007 and are subject to change at any time without notice. There can be no assurance that securities mentioned in this report will be included in any Royce-managed portfolio in the future. |
| Forward-Looking Statements This material contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve risks and uncertainties, including, among others, statements as to: • the Funds’ future operating results, • the prospects of the Funds’ portfolio companies, • the impact of investments that the Funds have made or may make, • the dependence of the Funds’ future success on the general economy and its impact on the companies and industries in which the Funds invest, and • the ability of the Funds’ portfolio companies to achieve their objectives. This review and report use words such as “anticipates,” “believes,” “expects,” “future,” “intends,” and similar expressions to identify forward-looking statements. Actual results may differ materially from those projected in the forward looking statements for any reason. |
Proxy Voting A copy of the policies and procedures that The Royce Funds use to determine how to vote proxies relating to portfolio securities and information regarding how each of The Royce Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available, without charge, on The Royce Funds’ website at www.roycefunds.com, by calling 1-800-221-4268 (toll-free) and on the website of the Securities and Exchange Commission (“SEC”), at www.sec.gov. | ||
Form N-Q Filing The Funds file their complete schedules of investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on The Royce Funds’ website at www.roycefunds.com and on the SEC’s website at www.sec.gov. The Funds’ Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. To find out more about this public service, call the SEC at 1-202-942-8090. The Funds’ complete schedules of investments are updated quarterly, and are available at www.roycefunds.com. | ||
34 | The Royce Funds 2007 Semiannual Report to Shareholders |
[This page intentionally left blank.]
This page is not part of the 2007 Semiannual Report to Shareholders | 35 |
[This page intentionally left blank.]
36 | This page is not part of the 2007 Semiannual Report to Shareholders |
Postscript: Tastes Great |
Our taste buds know what’s good. Just as important, they know it in an absolute sense. Whether we go for haute cuisine, burgers and fries, or both, we know what we like, and we like it for its own sake. Although everyone’s taste is subjective, when we sit down anticipating a great meal, we’re not thinking in relative terms. If we love Italian food, it’s not because it’s so enjoyable relative to French or Indian or Chinese or Tex-Mex. We simply enjoy it on its own merits. We may prefer it to other cuisines, just as we may prefer veal piccata to linguine and clams, but that’s not quite the same thing as enjoying something on a relative basis. | to make our managers hungry for the overlooked and—in our view, anyway—the undervalued. This can create performance disparities with our benchmark (as well as other small-cap indices), as well as the occasional bout of indigestion when the Funds experience relative underperformance. We accept these hiccups and attempt to stick to a steady diet of long-term above-average returns. Hopefully, our shareholders share our taste for the importance of absolute performance. |
So when Chuck Royce first began to say, “You can’t eat from the table of relative returns, only from the table of absolute performance,” he may have been closer than he initially imagined to describing why absolute performance goals are so critical to us at The Royce Funds. For each of our portfolios, we seek strong absolute returns over market cycle and other long-term periods. | Of course, we understand that there will be times when this is not the case. Particularly during periods of relative underperformance, we expect to hear questions about what’s on our small-cap menu, about why we’re not beating our small-cap benchmark, or why we’re not using another index as a benchmark that happens to be doing better than our Funds are at the time. These criticisms are something of an occupational hazard and thus explain why we choose to discuss performance in both relative and absolute terms. |
(This is consistent with our goal of doubling our money in four to five years with any stock that we select for our portfolios.) We may not always meet the mark, but the salient point is that we have established a target for our portfolios that’s based squarely on long-term, absolute results. | When Chuck Royce first began to say, “You can’t eat from the table of relative returns, only from the table of absolute performance,” he may have been closer than he initially imagined to describing why absolute performance goals are so critical to us at The Royce Funds. For each of our portfolios, we seek strong absolute returns over market cycle and other long-term periods. | In many ways, we like to think of ourselves as “benchmark agnostic.” In other words, we select companies for our portfolios based on each business’s absolute return potential, and not because we think that they can beat the return provided by a relevant small-cap index. Our focus is on security selection, on the search |
As active small-cap managers, we tend to be less anxious about short-term performance as a whole than those of our peers who may be more focused on beating a benchmark or who seek to replicate an index in terms of portfolio holdings or similar industry and sector weightings. By contrast, we are strictly stock pickers, and thus our sector and industry weightings are byproducts of our focus on individual companies. This bottom-up, business-buyer’s approach tends | for compelling values in the large and diverse small-cap marketplace. At the same time, however, we recognize the need to frame our Funds’ market cycle and other long-term performance for our investors. The Russell 2000 is thus useful in helping us to chart our progress, but our true appetite is best satisfied by what we love best—strong, absolute returns over the long term. |
Wealth Of Experience With approximately $32.7 billion in open- and closed-end fund assets under management, Royce & Associates is committed to the same small-company investing principles that have served us well for more than 30 years. Charles M. Royce, our Chief Investment Officer, enjoys one of the longest tenures of any active mutual fund manager. Royce’s investment staff includes eight Portfolio Managers, as well as 11 assistant portfolio managers and analysts, and six traders. Multiple Funds, Common Focus Our goal is to offer both individual and institutional investors the best available small-cap value portfolios. Unlike a lot of mutual fund groups with broad product offerings, we have chosen to concentrate on small-company value investing by providing investors with a range of funds that take full advantage of this large and diverse sector. Consistent Discipline Our approach emphasizes paying close attention to risk and maintaining the same discipline, regardless of market movements and trends. The price we pay for a security must be significantly below our appraisal of its current worth. This requires a thorough analysis of the financial and business dynamics of an enterprise, as though we were purchasing the entire company. Co-Ownership Of Funds It is important that our employees and shareholders share a common financial goal; our officers, employees and their families currently have approximately $122 million invested in The Royce Funds. | |||||
General Information | Advisor Services | ||||
Additional Report Copies | (For Fund Materials, Performance Updates, | ||||
and Prospectus Inquiries | and Account Inquiries | ||||
(800) 221-4268 | (800) 33-ROYCE (337-6923) | ||||
Shareholder Services | Broker/Dealer Services | ||||
(800) 841-1180 | For Fund Materials and Performance Updates | ||||
(800) 59-ROYCE (597-6923) | |||||
Automated Telephone Services | |||||
(800) 78-ROYCE (787-6923) | |||||
www.roycefunds.com This review and report must be accompanied or preceded by a current prospectus for the Funds. Please read the prospectus carefully before investing or sending money. | |||||
TheRoyceFunds | RSF-REP-0607 | ||||
Item 2. Code(s) of Ethics – Not applicable to this semi-annual report. |
Item 3. Audit Committee Financial Expert – Not applicable to this semi-annual report. |
Item 4. Principal Accountant Fees and Services – Not applicable to this semi-annual report. |
Item 5. Audit Committee of Listed Registrants – Not applicable. |
Item 6. Schedule of Investments – See Item 1. |
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 – Not applicable. |
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 – None. |
Item 11. Controls and Procedures. |
(a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. |
(b) Internal Control over Financial Reporting. There were no significant changes in Registrant’s internal control over financial reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses during the second fiscal quarter of the period covered by this report. |
(a)(2) Separate certifications by the Registrant’s Principal Executive Officer and Principal Financial Officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not Applicable
(b) Separate certifications by the Registrant’s Principal Executive Officer and Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940.
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.
THE ROYCE FUND
BY: | /s/ Charles M. Royce |
Charles M. Royce | |
President |
Date: August 29, 2007 |
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.
THE ROYCE FUND | THE ROYCE FUND |
BY: | /s/ Charles M. Royce | BY: | /s/ John D. Diederich | |
Charles M. Royce | John D. Diederich | |||
President | Chief Financial Officer | |||
Date: August 29, 2007 | Date: August 29, 2007 |