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: 745 Fifth Avenue
New York, NY 10151
Name and address of agent for service: | John E. Denneen, Esquire 745 Fifth Avenue New York, NY 10151 |
Registrant’s telephone number, including area code: (212) 508-4500
Date of fiscal year end: December 31
Date of reporting period: January 1, 2014 - December 31, 2014
Item 1. Reports to Shareholders. |
DECEMBER 31, 2014 | ||
2014 Annual | ||
Review and Report to Shareholders | ||
Royce 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 100 Fund | |||
Royce Dividend Value Fund | |||
Royce Global Value Fund | |||
Royce International Smaller-Companies Fund | |||
Royce Special Equity Multi-Cap Fund | |||
roycefunds.com | |||
Table of Contents | |||
Annual Review | |||
Letter to Our Shareholders | 2 | ||
Performance and Expenses | 6 | ||
U.S. Small-Cap Market Cycle and Risk Adjusted Performance | 7 | ||
Annual Report to Shareholders | |||
Manager’s Discussions of Fund Performance | |||
Royce Pennsylvania Mutual Fund | 8 | ||
Royce Micro-Cap Fund | 10 | ||
Royce Premier Fund | 12 | ||
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Royce Low-Priced Stock Fund | 14 | ||
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Royce Total Return Fund | 16 | ||
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Royce Heritage Fund | 18 | ||
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Royce Opportunity Fund | 20 | ||
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Royce Special Equity Fund | 22 | ||
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Royce Value Fund | 24 | ||
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Royce Value Plus Fund | 26 | ||
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Royce 100 Fund | 28 | ||
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Royce Dividend Value Fund | 30 | ||
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Royce Global Value Fund | 32 | ||
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Royce International Smaller-Companies Fund | 34 | ||
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Royce Special Equity Multi-Cap Fund | 36 | ||
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Schedules of Investments and Financial Statements | 38 | ||
Notes to Financial Statements | 100 | ||
Report of Independent Registered Public Accounting Firm | 115 | ||
Understanding Your Fund’s Expenses | 116 | ||
Federal Tax Information | 118 | ||
Trustees and Officers | 119 | ||
Notes to Performance and Other Important Information | 120 |
This page is not part of the 2014 Annual Report to Shareholders | 1 |
Letter to Our Shareholders
A TALE OF TWO MARKETS
It wasn’t the best of times; it wasn’t the worst of times. As 2014 began, it all seemed just right, with small-caps easing into the year on a more mutedly bullish note following their extraordinary run in 2013. So relaxed was the pace of returns, and in such stark contrast to the eventful years of 2008-2013, that in our June 30 Semiannual Review we remarked on how agreeably peaceful and undramatic it all was. During the year’s first six months, inflation was nearly non-existent, most commodity prices were stable, and volatility, as measured by the VIX, reached the end of June at its lowest level since 2007. These factors, along with a sprightly M&A market, looked to us like clear signs of ongoing growth. The case appeared even stronger as the Federal Reserve moved further and further into the background of the U.S. economy. We were not alone in thinking that the anticipated end of QE (“quantitative easing”) and what looked like an inevitable rise in interest rates would set the stage for a more dynamic pace of economic expansion. We also thought an extension of the bull market that began off the March 9, 2009 bottom seemed likely, though we were expecting both lower returns and increased volatility. |
As it happens, this call was somewhat accurate: the economy did pick up speed in the second half while the bull market rolled on for large-cap stocks. More turbulent, small-caps (along with most Energy stocks) could not keep up. Of course, equity markets simply do not stay undisturbed for long, so the increased volatility in the second half of 2014 was not a surprise. Yet its highly selective reach was puzzling, even allowing for the historically higher volatility exhibited by smaller companies. Shortly after the Russell 2000 Index established a year-to-date high on July 3 (a high that would last into late December), small-cap prices began to fall. They slid most precipitously in July and September and rallied to varying degrees in August, October, November, and December. The downdrafts were sharper than the upswings, however—:it took a furious rally in the final two weeks of the year’s closing month to shore up a modest positive return for the Russell 2000 in the second half. Meanwhile, the S&P 500 and Russell 1000 Indexes lost comparatively little in those two bearish months and posted solid gains during the other four. The upshot was such a strong year for large-cap companies that 2014 was the ninth-largest calendar-year spread between the Russell 2000 and the S&P 500 in the 36-year history of the small-cap index. |
2 | This page is not part of the 2014 Annual Report to Shareholders |
LETTER TO OUR SHAREHOLDERS
What, then, to make of a year in which the Russell 2000 posted a relatively undistinguished single-digit gain of 4.9%, ceded leadership to its larger siblings, and still bested most actively managed small-cap portfolios? A few developments in particular stood out. First, the rotation in leadership from small-cap to large in 2014 looked very much like a classic case of reversion to the mean to us. The former led the market decisively from the bottom in March of 2009 through the end of 2013, a prolonged period of small-cap leadership that made a shift all but inevitable. The second trend was more worrisome. Within small-cap, more economically cyclical sectors continued to lag in spite of the growing economy. The same held true for what we define as quality companies—those with strong balance sheets and high returns on invested capital. Even with the economy accelerating, investors tended to ignore profitable companies with solid fundamentals while they continued to be drawn more to defensive and/or high-growth areas. This included utilities and REITs among the highly successful defensive areas of 2014, and social media, biotech, and pharmaceuticals among the speedy growth industries. In most instances, companies in these sectors and industries do not satisfy our purchase criteria because they lack the combination of balance-sheet strength and a long-term history of profitability that we find most attractive. |
Even with the economy accelerating, investors tended to ignore profitable companies with solid fundamentals while they continued to be drawn more to defensive and/or high-growth areas. We were hopeful that the end of QE (along with rising rates) would help to reverse this trend. But the strengthening U.S. dollar and monetary stimulus efforts in Japan and Europe conspired to make the October conclusion of QE something of a non-event, while interest rates fell through most of the year. On the whole, then, 2014 was an often confounding period for us, especially its second half. Indeed, if there is a theme that best captures the year, it might be “A Tale of Two Markets.” And we should point out that Dickens’s rubric covers not just the very different halves of the year for small-cap stocks but also the disparity in results and volatility between small-caps and their bigger siblings. (More index returns can be found below.) VOLATILITY—OUR MUTUAL FRIEND Yet the level of conviction in our value-oriented approaches remains high. (And as disappointing as recent relative results have been, three- and five-year results through the end of 2014 for many of our Featured Funds were closer to or above their historical averages.) Although it may seem counterintuitive (or |
Equity Indexes | ||
As of December 31, 2014 (%) | ||
• | The third quarter was the worst for the Russell 2000 since 9/30/11 and, relative to the S&P 500, was the index’s worst quarterly performance since 3/31/99. It also ended a streak of eight consecutive quarters of positive performance. | |
• | Small-caps rallied in October and December to outpace their large-cap counterparts in the fourth quarter. | |
• | 2014 marked just the fifth time since its inception in 1979 that the Russell 2000 had a gain in the single digits (+4.9%). Small-caps trailed large-caps by the widest margin since 1998. | |
• | Within the Russell 2000, Health Care, Utilities, and REITs were the best-performing areas in 2014 while Energy was by far the largest detractor. |
3Q14 | 1 | 4Q14 | 1 | 1-YR | 3-YR | 5-YR | 10-YR | ||||||
Russell 2000 | -7.36 | 9.73 | 4.89 | 19.21 | 15.55 | 7.77 | |||||||
S&P 500 | 1.13 | 4.93 | 13.69 | 20.41 | 15.45 | 7.67 | |||||||
Russell 1000 | 0.65 | 4.88 | 13.24 | 20.62 | 15.64 | 7.96 | |||||||
Nasdaq Composite | 1.93 | 5.40 | 13.40 | 22.05 | 15.85 | 8.09 | |||||||
Russell Midcap | -1.66 | 5.94 | 13.22 | 21.40 | 17.19 | 9.56 | |||||||
Russell Microcap | -8.21 | 11.19 | 3.65 | 21.81 | 16.14 | 5.96 | |||||||
Russell Global ex-U.S. Small Cap | -6.21 | -4.45 | -3.63 | 10.31 | 6.40 | 6.65 | |||||||
Russell Global ex-U.S. Large Cap | -5.35 | -3.72 | -3.57 | 9.41 | 4.80 | 5.36 | |||||||
1Not annualized |
For details on The Royce Funds’ performance in the period, please turn to the Manager’s Discussions that begin on page 8. |
This page is not part of the 2014 Annual Report to Shareholders | 3 |
LETTER TO OUR SHAREHOLDERS
worse), the current extended period of relative underperformance for many Royce-managed portfolios actually helps to fuel our confidence in the years to come. Let us explain why. First, we have always viewed volatility as an ally, agreeing with Warren Buffett’s statement: “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.” So while many investors think of volatility as being synonymous (or nearly so) with risk or even loss, we have never seen it that way. Instead, we try to take advantage of market movements—an essential skill for any successful active manager. Those times when the market cannot seem to make up its mind are exactly when securities tend to be most mispriced. And therein lies one of the keys to outperformance for active managers—the identification and purchase of mispriced securities. While many investors think of volatility as being synonymous (or nearly so) with risk or even loss, we have never seen it that way. We recently conducted research that looked at some of the market forces that have helped to shape the current cycle, in particular the years from 2011-2014 when many active approaches struggled on a relative basis. (The full results of this research are available on our website at www.roycefunds.com/4qresearch.) As we have previously argued, the Fed’s easy-money policies of QE and ZIRP (“zero-interest rates”) have had the unintentional effect of stoking appetites for high yield and creating too few (if any) consequences for companies carrying a lot of debt. This led many investors to relatively neglect businesses with more pristine balance sheets and/or those with steady but smaller dividends. It also meant that from the beginning of 2011 through the end of 2014, the small-cap market was in a peculiar state, one characterized by a pile-up of anomalies—the combination of declining volatility with higher-than-average returns converging with contracting credit spreads. Needless to say, our risk-conscious, balance-sheet-centric approaches have been challenged in this setting, at least on a relative basis. Low volatility has arguably created the highest hurdle. We have always felt most comfortable in markets with higher levels of volatility, which usually create the differentiation that lies at |
the core of our active management styles. We analyze, assess, and evaluate multiple aspects of a company before determining whether or not the current stock price reflects the long-term prospects we see. Opportunities to purchase what we deem to be attractively undervalued companies tend to proliferate when stock prices are volatile rather than when markets are calm. Yet for most of the last four years, volatility has been falling, at least until the second half of 2014. This has made it far more difficult for our funds to outpace their respective benchmarks. GREAT EXPECTATIONS The questions are: How much longer is this going to last? More specifically, are interest rates going to remain at or near zero? Is the pace of economic growth likely to slacken? Are financial markets going to continue to behave atypically even as the economy continues to normalize? Will small-cap companies indefinitely gain an advantage by carrying more debt? Are three- and five-year average annual total returns for the Russell 2000 going to remain at levels higher than the index’s historical monthly rolling averages of 8.2% and 7.6%, respectively? For those who believe that most, or even some, of these things are likely to happen, then our approach would seem a bit at odds. We confess that we have been anticipating some of these shifts for nearly two years. This has meant re-learning the hard lesson that change seldom occurs when we most want it to. Yet we are convinced that markets remain cyclical (recent events notwithstanding). In our view, reversion to the mean is as close to an iron law as the capital markets allow. Most trends reverse, though they may linger for longer than initially anticipated (or desired). Widening credit spreads, increasing volatility, and decreasing stock correlation should all help active management and allow stock pickers the chance to emerge as performance leaders. We also expect equity returns to remain attractive, though we see a decrease from the high levels we have seen over the last three to five years. Cyclical companies appear due for a round of revenue acceleration, particularly those in the Consumer Discretionary and Industrials sectors, as do some industries in the Information Technology sector. The best-managed companies within these areas could also see solid margin expansion. Among other cyclical |
4 | This page is not part of the 2014 Annual Report to Shareholders |
LETTER TO OUR SHAREHOLDERS
sectors, we also see a number of profitable, conservatively capitalized businesses that have either been ignored or whose returns have lagged. We expect this to change. On the valuation front, the picture looked admittedly tricky at the end of 2014. For example, an examination of trailing 12-month earnings for many companies suggests that small-cap share prices may be on the high side. But if you believe, as we do, that the economy is going to keep growing, that credit spreads will continue to expand, and that a more robust CAPEX cycle is in the offing, then valuations seem pretty reasonable, if not attractive in certain areas, Energy in particular. Many stocks look fairly valued though not fully valued to us. So while we do not shrink from the sobering truth of relative underperformance through much of this now-long bullish cycle, we continue to see good times ahead for our risk-conscious, fundamentally based approach. |
While we do not shrink from the sobering truth of relative underperformance through much of this now-long bullish cycle, we continue to see good times ahead for our risk-conscious, fundamentally based approach. The argument that we have been making for more than four decades remains the same. Small-cap is an inefficient area of the market in which we search for qualitative advantages and valuation discrepancies. Our belief that fundamentally strong companies trading at discounts to their private worth can outperform over the long term, often with lower volatility, will not change. It is our core investment principle, and it has served us very, very well over most of the last 40+ years. |
Sincerely, |
Charles M. Royce | Christopher D. Clark | Francis D. Gannon | ||
Chairman and Chief Executive Officer, | President and Co-Chief Investment Officer, | Co-Chief Investment Officer, | ||
Royce & Associates, LLC | Royce & Associates, LLC | Royce & Associates, LLC | ||
January 26, 2015 |
This page is not part of the 2014 Annual Report to Shareholders | 5 |
Performance and Expenses
Performance and Expenses |
As of December 31, 2014 |
AVERAGE ANNUAL TOTAL RETURNS (%) | ANNUAL OPERATING EXPENSES (%) | ||||||||||||||||||
FUND | 1-YR | 5-YR | 10-YR | 20-YR | 40-YR/ SINCE INCEPTION | INCEPTION DATE | GROSS | NET | |||||||||||
Royce Pennsylvania Mutual Fund | -0.70 | 12.80 | 7.97 | 11.32 | 16.28 | n.a. | 0.93 | 0.93 | |||||||||||
Royce Micro-Cap Fund | -4.13 | 7.50 | 6.78 | 10.95 | 11.89 | 12/31/91 | 1.56 | 1.56 | |||||||||||
Royce Premier Fund | -0.86 | 12.09 | 9.27 | 11.98 | 12.04 | 12/31/91 | 1.09 | 1.09 | |||||||||||
Royce Low-Priced Stock Fund | -3.37 | 5.07 | 5.33 | 11.31 | 10.89 | 12/15/93 | 1.51 | 1.49 | |||||||||||
Royce Total Return Fund | 1.34 | 13.32 | 7.50 | 11.55 | 11.21 | 12/15/93 | 1.18 | 1.18 | |||||||||||
Royce Heritage Fund | -1.14 | 10.48 | 7.96 | n.a. | 13.15 | 12/27/95 | 1.49 | 1.49 | |||||||||||
Royce Opportunity Fund | -0.48 | 15.31 | 8.14 | n.a. | 13.00 | 11/19/96 | 1.17 | 1.17 | |||||||||||
Royce Special Equity Fund | 1.09 | 12.55 | 8.22 | n.a. | 9.77 | 5/1/98 | 1.13 | 1.13 | |||||||||||
Royce Value Fund | -0.02 | 10.12 | 8.15 | n.a. | 10.84 | 6/14/01 | 1.48 | 1.48 | |||||||||||
Royce Value Plus Fund | 3.89 | 11.32 | 7.11 | n.a. | 12.18 | 6/14/01 | 1.49 | 1.49 | |||||||||||
Royce 100 Fund | -3.26 | 10.49 | 8.48 | n.a. | 10.58 | 6/30/03 | 1.51 | 1.51 | |||||||||||
Royce Dividend Value Fund | -2.14 | 13.19 | 8.47 | n.a. | 9.17 | 5/3/04 | 1.52 | 1.52 | |||||||||||
Royce Global Value Fund | -5.76 | 4.17 | n.a. | n.a. | 3.95 | 12/29/06 | 1.84 | 1.70 | |||||||||||
Royce International Smaller-Companies Fund | -7.29 | 5.10 | n.a. | n.a. | 4.69 | 6/30/08 | 2.08 | 1.70 | |||||||||||
Royce Special Equity Multi-Cap Fund | 9.28 | n.a. | n.a. | n.a. | 15.53 | 12/31/10 | 1.46 | 1.24 | |||||||||||
INDEX | |||||||||||||||||||
Russell 2000 | 4.89 | 15.55 | 7.77 | 9.63 | n.a. | n.a. | n.a. | n.a. | |||||||||||
Russell Microcap | 3.65 | 16.14 | 5.96 | n.a. | n.a. | n.a. | n.a. | n.a. | |||||||||||
Russell Global Small Cap | -0.28 | 9.56 | 6.87 | n.a. | n.a. | n.a. | n.a. | n.a. | |||||||||||
Russell Global ex-U.S. Small Cap | -3.63 | 6.40 | 6.65 | n.a. | n.a. | n.a. | n.a. | n.a. | |||||||||||
Russell 1000 | 13.24 | 15.64 | 7.96 | 10.04 | n.a. | n.a. | n.a. | n.a. | |||||||||||
All performance information in this Review and Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes a shareholder would pay on fund distributions or the redemption of fund shares. 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. Investment and Service Class shares of Royce Global Value and International Smaller-Companies Funds redeemed within 30 days of purchase may be subject to a 2% redemption fee payable to The Royce Funds. Investment and Service Class shares of all other Funds redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund. Redemption fees are not reflected in the performance shown above; if they were, performance would be lower. Current performance may be higher or lower than performance quoted. Current month-end performance may be obtained at www.roycefunds.com. All performance and expense information reflects results of the Funds’ oldest share Class (Investment Class or Service Class, as the case may be). Price and total return information is based on net asset values calculated for shareholder transactions. Price and total return information is based on net asset values calculated for shareholder transactions. Gross annual operating expenses reflect the Fund’s gross total annual operating expenses and include management fees, any 12b-1 distribution and service fees, other expenses, and any applicable acquired fund fees and expenses. Net annual operating expenses reflect contractual fee waivers and/or reimbursements. 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, excluding brokerage commissions, taxes, interest litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business, and to the extent necessary to maintain net operating expenses at or below: 1.24% for Royce Special Equity Multi-Cap Fund; 1.49% for Royce Low-Priced Stock Fund; 1.69% for Royce Global Value and International Smaller-Companies Funds through April 30, 2015; and at or below 1.99% for Royce International Smaller-Companies Fund through April 30, 2024. Acquired fund fees and expenses reflect the estimated amount of fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Shares of the Funds’ Service, Consultant, R, and K Classes bear an annual distribution expense that is not borne by the Funds’ Investment Class. Investments in securities of micro-cap, small-cap, and/or mid-cap companies may involve considerably more risk than investments in securities of larger-cap companies. (Please see “Primary Risks for Fund Investors” in the prospectus.) Royce Global Value and International Smaller-Companies Funds invest a significant portion of their respective assets in foreign companies, which may be subject to different risks than investments in securities of U.S. companies, including adverse political, social, economic, or other developments that are unique to a particular country or region. (Please see “Investing in foreign securities” in the prospectus.) Therefore, the prices of securities of foreign companies in particular countries or regions may, at times, move in a different direction than those of securities of U.S. companies. (Please see “Primary Risk of Fund Investors” in the prospectus.) Please read the prospectus carefully before investing or sending money. Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. The Russell 2000 Index is an unmanaged, capitalization-weighted index of domestic small-cap stocks. It measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 Index. The Russell Microcap Index includes 1,000 of the smallest securities in the Russell 2000 Index, along with the next smallest eligible securities as determined by Russell. The Russell Global Small Cap Index is an index of global small-cap stocks. The Russell Global ex-U.S. Small Cap Index is an index of global small-cap stocks, excluding the United States. The Russell 1000 is an unmanaged, capitalization-weighted index of domestic large-cap stocks. It measures the performance of the 1,000 largest publicly traded U.S. companies in the Russell 3,000 Index. The performance of an index does not represent exactly any particular investment as you cannot invest directly in an index. Distributor: Royce Fund Services, Inc.
6 | This page is not part of the 2014 Annual Report to Shareholders
U.S. Small-Cap Market Cycle and Risk-Adjusted Performance
We believe strongly in the idea that a long-term perspective is crucial for determining the success of an investment approach. While flourishing in an up market is wonderful, surviving a bear market by losing less (or not at all) is equally desirable. However, the true test of a portfolio’s results that include up and down market phases by looking at full market cycles.
We have seen 10 full market cycles since the inception of the Russell 2000 Index on December 31, 1978, with the most recent peaking on April 29, 2011. (Royce defines market cycles as those that have retreated at least 15% from a previous market peak and have rebounded to establish a new peak above the previous one.) Each market cycle contains a peak-to-trough and a trough-to-peak period. When evaluating fund performance, it is common practice to review results for the most recent year (often the calendar year) along with its related longer-term trailing periods. However, we think full market cycle results offers an equally, if not more important measure of performance. Interestingly, over the small-cap index’s more-than-30-year history, each style index—the Russell 2000 Value Index and the Russell 2000 Growth Index—outperformed in five of the 10 full market cycles. In fact, leadership has alternated between growth and value over the last six cycles.
Royce U.S. Small-Cap Equity Funds vs. Russell 2000 Index: | |||||||
Market Cycle Results (%) | |||||||
PEAK-TO-PEAK | PEAK-TO-PEAK | PEAK-TO-CURRENT | |||||
FUND | 3/9/00–7/13/07 | 7/13/07–4/29/11 | 4/29/11–12/31/14 | ||||
Royce Pennsylvania Mutual Fund | 207.1 | 11.6 | 32.2 | ||||
Royce Micro-Cap Fund | 197.4 | 24.9 | 0.5 | ||||
Royce Premier Fund | 198.1 | 29.9 | 24.1 | ||||
Royce Low-Priced Stock Fund | 198.9 | 27.2 | -10.7 | ||||
Royce Total Return Fund | 193.9 | 6.8 | 39.3 | ||||
Royce Heritage Fund | 150.4 | 25.3 | 16.9 | ||||
Royce Opportunity Fund | 191.8 | 6.9 | 41.3 | ||||
Royce Special Equity Fund | 227.4 | 20.8 | 40.7 | ||||
Royce Value Fund | n.a. | 17.4 | 15.8 | ||||
Royce Value Plus Fund | n.a. | -3.0 | 30.2 | ||||
Royce 100 Fund | n.a. | 27.6 | 19.6 | ||||
Royce Dividend Value Fund | n.a. | 21.6 | 32.0 | ||||
INDEX | |||||||
Russell 2000 | 54.8 | 6.6 | 46.5 | ||||
Russell 2000 Value | 189.4 | -1.4 | 44.4 | ||||
Russell 2000 Growth | -14.8 | 14.3 | 48.8 | ||||
Small-Cap Market Cycle: Russell 2000 Indexes Total Returns (%) |
From Small-Cap Peak on 3/9/00 through 12/31/14 |
Risk/Return Profile | ||
For the 10-Year Period Ended December 31, 2014 (%) | ||
• | Eight out of 12 Royce Funds with 10-Years of history outperformed the Russell 2000, while eight of the 12 provided better risk-adjusted returns/Sharpe ratios. |
All performance information above reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Standard deviation is a statistical measure within which a fund’s total returns have varied over time. The greater the standard deviation, the greater a fund’s volatility. The Sharpe ratio is calculated for a specified period by dividing a fund’s annualized excess returns by its annualized standard deviation. The higher the Sharpe ratio, the better the fund’s historical risk-adjusted performance.
This page is not part of the 2014 Annual Report to Shareholders | 7 |
MANAGER’S DISCUSSION | |
Royce Pennsylvania Mutual Fund® |
Chuck Royce |
FUND PERFORMANCE Our flagship, Royce Pennsylvania Mutual Fund (“PMF”), lost 0.7% in 2014, trailing its small-cap benchmark, the Russell 2000 Index, which gained 4.9% for the same period. This result was made more disappointing coming after a promising first half in which PMF rose 2.0%. The quietly bullish first half of the year, however, gave way to a far more volatile period for small-cap companies in the second. The Fund lost more ground to its benchmark in the bearish third quarter (-7.6% versus -7.4%), an unpleasant surprise considering PMF’s long-term record of better relative results in down market periods. Increased volatility within small-cap extended into the fourth quarter, which was, however, a solidly bullish period thanks in large part to a dynamic rally to close out the year in December. The Fund stayed behind the small-cap index in the year’s final quarter, climbing 5.3% versus a 9.7% advance for its benchmark. Over the last few years, the Fund has struggled on a relative basis, even when (as in 2010 and 2013) absolute results were more than respectable. The lingering combination of higher-than-average small-cap returns and lower volatility has clearly had an impact on PMF’s results vis-à-vis the benchmark in much of the market cycle since the bottom on March 9, 2009. It is also worth pointing out, however, that the respective five-year average annual total returns for both our flagship (+12.8%) and the Russell 2000 (+15.5%) were higher than their respective historical rolling monthly five-year averages of 9.8% and 7.6%. We remain committed to our risk-conscious approach and are optimistic about the Fund’s long-term prospects. The Fund outpaced the Russell 2000 for the 10-, 15-, 20-, 25-, 30-, and 35-year periods ended December 31, 2014. PMF’s average annual total return for the 40-year period—all under the management of Chuck Royce—was 16.3%. We take great pride in this four-decade result. WHAT WORKED... AND WHAT DIDN’T One somewhat counterintuitive result of a year replete with volatility in the small-cap market was that there were no outsized net gains or losses for the Fund at the sector, industry, or position level. The only sizable net gain came from positions in Information Technology. Net losses were concentrated mostly in the Energy and Industrials sectors, though Materials, Consumer Staples, and Telecommunication Services also detracted from 2014’s results. Industrials were a slight sore spot in the otherwise bullish first half, though it remained one of PMF’s largest sectors at the end of the period. The woes for Houston-based engineering and construction firm KBR continued. Earlier in the year, the firm had its fiscal 2014 outlook reduced by cancellations and losses on some engineering and construction bids, as well as on pushed-out start dates for certain LNG (liquefied natural gas) projects. Its shares fell through most of the year, with a somewhat sharp dip in December when it announced plans to restructure its operations and divest or exit some noncore segments. We held a position at year end. Unlike Industrials, Energy was a stalwart performer in the first half before the nearly 50% decline in oil prices sent shockwaves throughout the industry and elsewhere. Unit Corporation, a top performer in the six-month period ended June 30, 2014, operates as a contract driller and exploration and production company, among other energy-related businesses. With a long history as a successful, well-run business, its rebound potential when oil prices eventually recover looked strong to us, but its short-term prospects were tougher to gauge at the end of December, when it was a top-40 position. Nu Skin Enterprises was also a top-40 holding at the end of the period. The personal care products maker and distributor endured a host of challenges in 2014, including trouble with the Chinese government early in the year and the announcement of new debt arrangements in October. Its consistently punished shares can get off the mat, we suspect, with a comeback for its business in China. Multiline women’s fashion retailer Ascena Retail Group endured sluggish sales for two of its highest profile brands-tween fashion stop Justice and plus-size specialist Lane Bryant. Unsure of its ability to navigate a still-challenging environment for retailers, we reduced our position in the second half. A rising stock price helped to leave PMF with a sizable position in Core-Mark Holding Company, which distributes and markets various consumer goods to convenience stores, grocery stores, drug stores, and other retail centers. Increased earnings gave investors a convenient reason to buy. Long-time holding Sapient Corporation provides integrated management consulting services, Internet commerce solutions, and systems implementation services. We sold our shares in November shortly after it was announced that French advertising company Publicis Groupe was paying a substantial premium to buy the company. |
Top Contributors to Performance For 2014 (%)1 | ||
Core-Mark Holding Company | 0.27 | |
Sapient Corporation | 0.25 | |
NVR | 0.18 | |
International Rectifier | 0.16 | |
Rentrak Corporation | 0.16 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
Nu Skin Enterprises Cl. A | -0.37 | |
Ascena Retail Group | -0.32 | |
Unit Corporation | -0.31 | |
KBR | -0.26 | |
Kennametal | -0.25 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK We believe that increasing volatility and decreasing stock correlation can help stock pickers to emerge as performance leaders. Beyond minor increases or decreases, sector weightings remained largely unchanged from the end of 2013. The Fund was overweight in more economically sensitive areas such as Industrials and Information Technology, which reflected our confidence that the U.S. economy will continue to expand in 2015. |
8 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS PENNX RYPFX RPMIX RYPCX RPMRX RPMKX |
Performance and Expenses | ||||||||||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | 25-YR | 30-YR | 35-YR | 40-YR | ||||||||||||
PMF | -2.68 | -0.70 | 15.45 | 12.80 | 7.97 | 10.74 | 11.32 | 10.73 | 11.55 | 12.66 | 16.28 | |||||||||||
Annual Operating Expenses: 0.93% | ||||||||||||||||||||||
*Not Annualized |
Relative Returns: Monthly Rolling Average Annual Return Periods
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 100% of all 10-year periods; 80% of all 5-year periods; 75% of all 3-year periods; and 60% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 61/61 | 100% | 9.6 | 7.3 | |||||||
5-year | 97/121 | 80% | 9.8 | 7.6 | |||||||
3-year | 109/145 | 75% | 10.5 | 8.2 | |||||||
1-year | 102/169 | 60% | 12.8 | 9.6 | |||||||
*Average of monthly rolling average annual total returns over the specified periods. |
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Invested on 12/31/78 (Russell 2000 Inception) as of 12/31/14 ($)
Top 10 Positions | ||
% of Net Assets | ||
Reliance Steel & Aluminum | 1.0 | |
Ritchie Bros. Auctioneers | 0.9 | |
HEICO Corporation | 0.9 | |
Genesco | 0.8 | |
Buckle (The) | 0.8 | |
Thor Industries | 0.8 | |
Copart | 0.8 | |
Forward Air | 0.7 | |
Balchem Corporation | 0.7 | |
RBC Bearings | 0.7 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Industrials | 25.5 | |
Information Technology | 21.9 | |
Consumer Discretionary | 15.3 | |
Financials | 11.3 | |
Materials | 10.2 | |
Energy | 5.7 | |
Health Care | 5.1 | |
Consumer Staples | 2.2 | |
Telecommunication Services | 0.2 | |
Utilities | 0.0 | |
Miscellaneous | 1.5 | |
Cash and Cash Equivalents | 1.1 | |
Calendar Year Total Returns (%) | ||
YEAR | PMF | |
2014 | -0.7 | |
2013 | 35.3 | |
2012 | 14.6 | |
2011 | -4.2 | |
2010 | 23.9 | |
2009 | 36.3 | |
2008 | -34.8 | |
2007 | 2.8 | |
2006 | 14.8 | |
2005 | 12.5 | |
2004 | 20.2 | |
2003 | 40.3 | |
2002 | -9.2 | |
2001 | 18.4 | |
2000 | 18.3 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 99 | 96 | ||
From 12/31/78 | ||||
(Russell 2000 Inception) | 90 | 71 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $5,729 million | |
Number of Holdings | 411 | |
Turnover Rate | 21% | |
Average Market Capitalization1 | $1,679 million | |
Weighted Average P/E Ratio2,3 | 19.0x | |
Weighted Average P/B Ratio2 | 2.1x | |
Holdings ≥ 75% of Total Investments | 154 | |
Active Share 4 | 86% | |
U.S. Investments (% of Net Assets) | 89.4% | |
Non-U.S. Investments (% of Net Assets) | 9.5% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (7% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Investment Class (its oldest class). 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, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investment in mutual funds, hedge funds, private equity funds, and other investment companies. Shares of PMF’s Service, Consultant, R, and K Classes bear an annual distribution expense that is not borne by the Investment Class. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 9 |
MANAGER’S DISCUSSION | ||
Royce Micro-Cap Fund |
Jenifer Taylor |
FUND PERFORMANCE |
Royce Micro-Cap Fund (“RMC”) lost 4.1% in 2014, trailing both its benchmark, the Russell Microcap Index, and the small-cap Russell 2000 Index, which rose 3.6% and 4.9%, respectively, for the same period. The Fund’s participation in the more quietly bullish first half was more limited than we would prefer—RMC was up 1.0% for the six-month period ended June 30, 2014—but things grew worse when a wave of volatility hit the small- and micro-cap markets in the year’s second half. Share prices began to fall following a small-cap high on July 3. In the third-quarter downdraft, the Fund fell 10.0% compared to respective declines of 8.2% and 7.4% for the micro-cap and small-cap indexes. We were frustrated that the Fund was unable to hold its value more effectively in a down phase, which has been one of its historical strengths. RMC’s participation in the fourth-quarter rebound was again limited and contributed to its relative performance disadvantage in the calendar year. The Fund was up 5.5% in the fourth quarter versus 11.2% for the Russell Microcap and 9.7% for the Russell 2000. |
An examination of longer-term periods showed more attractive results on both an absolute and relative basis. The Fund outperformed the micro-cap benchmark for the 10-year period ended December 31, 2014. (Data for the Russell Microcap only goes back to June 30, 2000.) RMC also outpaced the Russell 2000 for the 15-, 20-year, and since inception (12/31/91) periods ended December 31, 2014. The Fund’s average annual total return since inception was 11.9%. We remain proud of its long-term performance record. |
WHAT WORKED... AND WHAT DIDN’T |
Four of RMC’s 10 equity sectors ended the year in the red, with Energy posting the largest net losses followed by Materials. The negative impact of Industrials and Consumer Staples was far more modest. Energy holdings first gave then took away in 2014, going from the portfolio’s top performer in the first half to its worst in the second. The reversal of fortune was keyed by the nearly 50% decline in oil prices during the second half. TGC Industries provides geophysical services to oil and gas companies, such as seismic data acquisition services and gravity data. Its business mirrors that of long-time RMC holding Dawson Geophysical. In October the two firms announced plans to merge, which should provide wider geographical reach, a stronger balance sheet, and more efficient operations, all of which should prove useful while we wait for commodity prices to recover. Total Energy Services, which was the Fund’s twentieth-largest holding at the end of 2014, is a Calgary-based service company that provides contract drilling, equipment rentals, and compression and processing work. Conservatively capitalized, it’s a high-return business that we have long regarded as especially well-run. We trimmed our position in 2014. Like many of our energy services holdings, it continued to execute effectively through the painful industry cycle. |
Outside of Energy, maternity apparel retailer Destination Maternity continued to labor through a challenging retail market. A new CEO was hired in August with plans to manage inventories more effectively, improve store layouts, and refresh merchandise, all of which inspired our confidence in a turnaround that will require additional patience. Both Olympic Steel and Universal Stainless & Alloy Products grappled with ongoing sluggishness for industrial metals. Companies in the steel business have had no pricing power due to utilization rates being less than optimal. As with Destination Maternity, the turnaround is taking more time than we had initially anticipated. We held shares of all of these stocks at the end of 2014. |
VASCO Data Security International specializes in bank security and develops security systems to secure and manage access to user digital assets. Its stock made two significant upticks in the first half. In February, its shares rose on better-than-expected fourth quarter of 2013 earnings and a strong outlook for fiscal 2014. Increased revenues and ongoing earnings strength saw the shares getting another major boost late in April, especially with HSBC, USA, its customer, offering VASCO authentication solutions to its retail customers. In October, its stock climbed yet again after beating estimates for third-quarter revenue and earnings. We sold the last of our shares in December. We held a stake in San Jose-based Super Micro Computer, which provides specialized high performance server solutions. Its recent successful forays into cloud computing data storage helped its earnings to soar steadily in 2014. |
Top Contributors to Performance For 2014 (%)1 | |||
VASCO Data Security International | 0.87 | ||
Super Micro Computer | 0.52 | ||
CRA International | 0.46 | ||
Furiex Pharmaceuticals | 0.42 | ||
Zumiez | 0.41 | ||
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||||
TGC Industries | -0.67 | |||
Total Energy Services | -0.65 | |||
Destination Maternity | -0.49 | |||
Olympic Steel | -0.47 | |||
Universal Stainless & Alloy Products | -0.43 | |||
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK Sector weightings at year end were relatively unchanged from where they stood at the end of 2013. We continue to emphasize more economically sensitive sectors, such as the Fund’s three largest at the end of the period—Industrials, Information Technology, and Consumer Discretionary. Our view is that many portfolio holdings in these (and other) sectors should benefit from a faster-growing economy that also could reward disciplined approaches that focus on fundamentals. So while we were not pleased with the Fund’s recent performances, we remain confident about its prospects going forward. |
10 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYOTX RMCFX RYMCX |
Performance and Expenses | ||||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | SINCE INCEPTION (12/31/91) | |||||||||
RMC | -5.09 | -4.13 | 7.89 | 7.50 | 6.78 | 10.11 | 10.95 | 11.89 | ||||||||
Annual Operating Expenses: 1.56% | ||||||||||||||||
*Not Annualized |
Relative Returns: Monthly Rolling Average Annual Return Periods
Since Russell Microcap’s Inception Through 12/31/14
On a monthly rolling basis, the Fund outperformed the Russell Microcap in 100% of all 10-year periods; 80% of all 5-year periods; 62% of all 3-year periods; and 60% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 55/55 | 100% | 9.9 | 6.6 | |||||||
5-year | 92/115 | 80% | 10.0 | 6.7 | |||||||
3-year | 86/139 | 62% | 10.5 | 8.8 | |||||||
1-year | 98/163 | 60% | 12.4 | 11.1 | |||||||
*Average of monthly rolling average annual total returns over the specified periods. |
Morningstar Style Map TM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Top 10 Positions | ||
% of Net Assets | ||
FRP Holdings | 1.8 | |
Resources Connection | 1.8 | |
Shoe Carnival | 1.6 | |
Stein Mart | 1.5 | |
American Public Education | 1.3 | |
Kennedy-Wilson Holdings | 1.3 | |
Gulf Island Fabrication | 1.3 | |
ePlus | 1.2 | |
Marten Transport | 1.2 | |
Kirkland’s | 1.2 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Industrials | 24.1 | |
Information Technology | 17.0 | |
Consumer Discretionary | 15.3 | |
Health Care | 9.9 | |
Financials | 9.0 | |
Materials | 7.5 | |
Energy | 6.8 | |
Consumer Staples | 1.2 | |
Telecommunication Services | 0.5 | |
Miscellaneous | 4.8 | |
Cash and Cash Equivalents | 3.9 | |
Calendar Year Total Returns (%) | ||
YEAR | RMC | |
2014 | -4.1 | |
2013 | 21.3 | |
2012 | 8.0 | |
2011 | -12.1 | |
2010 | 30.1 | |
2009 | 55.7 | |
2008 | -40.9 | |
2007 | 7.1 | |
2006 | 22.3 | |
2005 | 11.5 | |
2004 | 15.8 | |
2003 | 52.6 | |
2002 | -13.4 | |
2001 | 23.1 | |
2000 | 16.7 | |
Upside/Downside Capture Ratios Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 90 | 82 | ||
From 6/30/00 (Russell | ||||
Microcap Index Inception) | 94 | 80 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $529 million | |
Number of Holdings | 190 | |
Turnover Rate | 18% | |
Average Market Capitalization1 | $415 million | |
Weighted Average P/E Ratio2,3 | 21.7x | |
Weighted Average P/B Ratio2 | 1.6x | |
Holdings ≥ 75% of Total Investments | 94 | |
Active Share4 | 91% | |
U.S. Investments (% of Net Assets) | 83.4% | |
Non-U.S. Investments (% of Net Assets) | 12.7% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (20% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Investment Class (its oldest class). Price and total return information is based on net asset values calculated for shareholder transactions. Certain immaterial adjustments were made to the net assets of Royce Micro-Cap Fund at 12/30/11 for financial reporting purposes, and as a result the net asset values for shareholder transactions on that date and the calendar year Total Returns (%) based on those net asset values differ from the adjusted net asset values and calendar year total returns reported in the Financial Highlights. 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, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Shares of RMC’s Service and Consultant Classes bear an annual distribution expense that is not borne by the Investment Class. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell Microcap Index). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 11 |
MANAGER’S DISCUSSION | |
Royce Premier Fund |
Chuck Royce |
FUND PERFORMANCE |
Royce Premier Fund (“RPR”) fell well short of our expectations in 2014. For the calendar year, the Fund was down 0.9%, significantly trailing its small-cap benchmark, the Russell 2000 Index, which gained 4.9% for the same period. The Fund handily outpaced the small-cap index in the year’s first half with a gain of 7.3% compared to 3.2% for the Russell 2000. But small-cap share prices corrected soon after making a high on July 3. Down phases typically result in the Fund holding its value more effectively than its benchmark, as it so often has through its history. The third quarter of 2014, however, offered an ill-timed exception. For the quarter as a whole, the Fund lost 8.6% versus 7.4% for the small-cap index. |
The Russell 2000 then rebounded through much of the fourth quarter, when the Fund posted a comparably paltry 1.0% return while the Russell 2000 rose 9.7%. This was an unfortunate end to a frustrating final half. We were pleased, however, with longer-term results. Although the Fund trailed the small-cap index for the three- and five-year periods ended December 31, 2014, it did so with strong absolute returns that were in excess of both its own and its benchmark’s historical three- and five-year monthly rolling average returns (respective rolling returns of +11.8% versus +8.2% for the three-year span and +11.6% versus +7.6% for the five-year period). RPR also outperformed the Russell 2000 for the 10-, 15-, 20-year, and since inception (12/31/91) periods ended December 31, 2014. The Fund’s average annual total return for the since inception period was 12.0%, a long-term record in which we take great pride. |
WHAT WORKED... AND WHAT DIDN’T Energy was one of Premier’s best-performing sectors in the first half before oil prices abruptly plummeted and handed the Fund its largest net losses for the calendar year. An overweight in energy stocks—all of them in the equipment & services industry, and six of the seven not in the Russell 2000—did not help. Trican Well Service is an oilfield services company and the largest pressure pumping service provider in Canada. Over the last few years, its operations in the U.S. and other energy-rich spots around the world have been growing. Yet its ongoing operational successes meant little to anxious investors fleeing energy stocks in the second half. Much the same could be said for the Fund’s other holdings in the industry, most of which are also long-time holdings. Unit Corporation operates several businesses—it explores for oil and natural gas, acquires oil and gas properties, does contract drilling of onshore oil and natural gas wells, and performs gathering and processing of natural gas. Unit has shown over the years that it can be successful at all of them, and its steady execution has made its hard-to-pigeonhole business a Royce favorite. Alberta-based Ensign Energy Services is a global provider of oilfield services such as contract drilling. Drill rig orders were drying up as the oil price plunge was driving its shares into the ground. Ever contrarian, we took an admittedly (and customarily) long-term view and held good-sized positions in each stock at year end in anticipation of an eventual recovery in energy prices. |
Elsewhere in the portfolio, we modestly reduced our position in Nu Skin Enterprises. A maker and distributor of personal care products, Nu Skin endured a litany of challenges over the last 18 months, including the restructuring of its debt and trouble in its previously fast-growing—but more recently stagnating—Asian business. It has been handling its difficulties with success, and we think it can engineer a reversal when sales in China improve. We took the opposite tack by selling our shares of GrafTech International, which manufactures synthetic and natural graphite and carbon-based products used in steel production. Ongoing earnings disappointments, most recently resulting from graphite electrode order push outs, weakening international business, and poor sales tied to the Galaxy Samsung 5 phone pushed the stock down more than 50% in the third quarter. |
On the positive side, we continued to be pleased with molecular diagnostic company Myriad Genetics. A specialist in genetic testing for cancer, its share price fell rapidly in the second half of 2013 once the Supreme Court held that human genes cannot be patented. The stock then began to get healthy in the first six months of 2014. The first-half acquisition of Crescendo Bioscience diversified Myriad’s already promising pipeline, and its genetic panel test—MyRisk— looked promising. Its stock stumbled in the fourth quarter when the MyRisk adoption proved more expensive than expected, causing sales deferrals and higher operating costs. Still, we remained confident enough in its long-term prospects for Myriad to be the Fund’s thirteenth-largest holding at the end of 2014. |
Top Contributors to Performance For 2014 (%)1 | |||
Myriad Genetics | 1.16 | ||
Jones Lang LaSalle | 0.69 | ||
Zebra Technologies Cl. A | 0.58 | ||
Strayer Education | 0.52 | ||
IDEXX Laboratories | 0.52 | ||
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||||
Nu Skin Enterprises Cl. A | -1.56 | |||
Trican Well Service | -1.03 | |||
Unit Corporation | -0.80 | |||
Ensign Energy Services | -0.74 | |||
GrafTech International | -0.59 | |||
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK We reduced our exposure to Materials primarily by selling the Fund’s remaining precious metals & mining holdings. We remained overweight in Industrials and Information Technology, consistent with our view that we will eventually see an earnings-led market. We also had increased exposure to Consumer Discretionary, Financials, and Health Care companies by the end of 2014. |
12 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYPRX RPFFX RPFIX RPRCX RPRRX RPRKX RPRWX |
Performance and Expenses | |||||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | |||||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | SINCE INCEPTION (12/31/91) | ||||||||||
RPR | -7.63 | -0.86 | 12.17 | 12.09 | 9.27 | 11.17 | 11.98 | 12.04 | |||||||||
Annual Operating Expenses: 1.09% | |||||||||||||||||
*Not Annualized |
Relative Returns: Monthly Rolling Average Annual Return Periods
15 Years Through 12/31/14
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 100% of all 10-year periods; 83% of all 5-year periods; 78% of all 3-year periods; and 67% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 61/61 | 100% | 11.4 | 7.3 | |||||||
5-year | 101/121 | 83% | 11.6 | 7.6 | |||||||
3-year | 113/145 | 78% | 11.8 | 8.2 | |||||||
1-year | 113/169 | 67% | 13.2 | 9.6 | |||||||
*Average of monthly rolling average annual total returns over the specified periods. |
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Top 10 Positions | ||
% of Net Assets | ||
Thor Industries | 3.9 | |
Alleghany Corporation | 3.1 | |
Lincoln Electric Holdings | 3.0 | |
Woodward | 2.7 | |
Ritchie Bros. Auctioneers | 2.7 | |
Kennedy-Wilson Holdings | 2.5 | |
National Instruments | 2.3 | |
Federated Investors Cl. B | 2.2 | |
Landstar System | 2.2 | |
Copart | 2.1 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Industrials | 26.4 | |
Information Technology | 18.9 | |
Consumer Discretionary | 12.9 | |
Financials | 12.3 | |
Materials | 7.5 | |
Health Care | 6.7 | |
Energy | 6.3 | |
Consumer Staples | 3.9 | |
Miscellaneous | 3.0 | |
Cash and Cash Equivalents | 2.1 | |
Calendar Year Total Returns (%) | ||
YEAR | RPR | |
2014 | -0.9 | |
2013 | 27.7 | |
2012 | 11.4 | |
2011 | -0.9 | |
2010 | 26.5 | |
2009 | 33.3 | |
2008 | -28.3 | |
2007 | 12.7 | |
2006 | 8.8 | |
2005 | 17.1 | |
2004 | 22.8 | |
2003 | 38.7 | |
2002 | -7.8 | |
2001 | 9.6 | |
2000 | 17.1 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 100 | 89 | ||
From 12/31/91 (Start of Fund’s | ||||
First Full Quarter) | 93 | 72 | ||
Portfolio Diagnostics | ||||
Fund Net Assets | $5,402 million | |||
Number of Holdings | 67 | |||
Turnover Rate | 9% | |||
Average Market Capitalization1 | $2,790 million | |||
Weighted Average P/E Ratio2,3 | 19.5x | |||
Weighted Average P/B Ratio2 | 2.4x | |||
Holdings ≥ 75% of Total Investments | 39 | |||
Active Share4 | 97% | |||
U.S. Investments (% of Net Assets) | 88.1% | |||
Non-U.S. Investments (% of Net Assets) | 9.8% | |||
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (6% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Investment Class (its oldest class). 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. Shares of RPR’s Service, Consultant, R, and K Classes bear an annual distribution expense that is not borne by the Investment Class. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 13
MANAGER’S DISCUSSION | ||
Royce Low-Priced Stock Fund |
Jim Stoeffel |
FUND PERFORMANCE Royce Low-Priced Stock Fund (“RLP”) was down 3.4% in 2014, substantially behind its small-cap benchmark, the Russell 2000 Index, which gained 4.9% for the same period. The year got off to a highly promising start when the Fund posted terrific results on both an absolute and relative basis in the first half, advancing 9.0% and outpacing the 3.2% gain for its benchmark. This was a welcome development after several years of relative performance disappointments for the portfolio. |
Small-cap stocks then took a turn for the worse in the third quarter following a high for the Russell 2000 on July 3. RLP fell 9.8% in the third quarter compared to a 7.4% decline for the benchmark over the same span. At this point, the Fund was in negative territory year-to-date, but still ahead of the small-cap index. That changed in the fourth quarter. Small-cap stocks rallied through most of the year’s last three months, with October and December especially robust. The Fund, however, was essentially flat in each of those months and had a loss in November. For the fourth quarter as a whole, RLP lost 1.7% while the Russell 2000 increased 9.7%. The Fund outperformed the benchmark for the 15-, 20-year, and since inception (12/15/93) periods ended December 31, 2014. RLP’s average annual total return since inception was 10.9%. We remain proud of the Fund’s long-term performance record. |
WHAT WORKED... AND WHAT DIDN’T After being the top-contributing sector (and thus a major source of outperformance) in the first half of the year, Energy stocks finished 2014 as the portfolio’s leading detractor. The second-half collapse in energy prices and pressure on other commodities thus took an enormous toll on results for both the second half and full year. Being substantially overweight in the Energy sector versus the Russell 2000 hampered relative results as well. We are well aware of the near-term stresses on energy prices, which include surging supply from U.S. shale plays, weaker European and emerging market economies (the latter having been a key source of incremental demand), and a strong U.S. dollar. However, we have also been quite pleased with the way that many of the portfolio’s energy names have been executing. As such, we have mostly chosen to hold positions in the belief that lower energy prices will ultimately spur demand and thus eventually start the next up cycle in commodity prices. We did, however, trim our position in Trican Well Service, a Canadian oilfield services company and that nation’s largest pressure pumping service provider. In the Materials sector, which posted net losses for the year, we greatly reduced RLP’s exposure to the metals & mining industry, which involved selling most of our positions in Hochschild Mining and Alamos Gold. |
Nu Skin Enterprises is a personal care product manufacturer and distributor. The aggressive rollout of its direct marketing model in China set off an investigation by authorities into its sales model. The official result was a modest fine, though it also derailed growth more than we would have expected. The company has been working through inventory issues and rebuilding its sales team in China to create a more sustainable growth model there. At year’s end, we believed we were near the bottom in terms of company fundamentals and remain constructive on Nu Skin going forward. We were less confident in the rebound potential for GrafTech International, which makes graphite and carbon material used in steel production and other industries. Depressed sales and ongoing earnings disappointments influenced our decision to reduce our position. |
Information Technology dominated, leading all of the Fund’s equity sectors by a hefty margin. Two top-performing semiconductor companies were takeover targets—OmniVision Technologies and International Rectifier. We sold both as news of their respective acquisitions drove shares higher. From the Health Care sector, Myriad Genetics is a leading provider of diagnostic cancer testing that proved the value of patience. In 2013, its shares fell as Wall Street worried about the firm’s ability to maintain market share and price in the face of creeping competition. However, the accuracy and rapid turnaround times of the company’s tests have proven to be highly effective barriers to entry. We took gains through much of 2014, though we were happy to hold a decent-sized stake at the end of the year. |
Top Contributors to Performance For 2014 (%)1 | |||
Myriad Genetics | 1.00 | ||
OmniVision Technologies | 0.67 | ||
International Rectifier | 0.64 | ||
Industrias Bachoco ADR | 0.48 | ||
Cato Corporation (The) Cl. A | 0.45 | ||
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | |||
Nu Skin Enterprises Cl. A | -1.20 | ||
Trican Well Service | -0.90 | ||
GrafTech International | -0.84 | ||
Hochschild Mining | -0.73 | ||
Alamos Gold | -0.69 | ||
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK Effective November 10, 2014, Jim Stoeffel became the Fund’s portfolio manager after serving as assistant portfolio manager since 2013. Bill Hench, Jim Harvey, and Carl Brown joined him as assistant portfolio managers. Our general view is that the U.S. economy should remain strong. The Fund remained overweight in Energy at the end of 2014 for the reasons previously discussed. We see Information Technology as a vital source of ideas, particularly in mobile, Big Data, and the Internet of Things. Industrials were also a key investment focus because we suspect that many of our holdings can take advantage of lower energy prices. Finally, there was increased exposure to both consumer sectors for similar reasons—lower gas and heating oil prices should continue to benefit consumers by putting more money in their pockets. |
14 | The Royce Funds 2014 Annual Report to Shareholders
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYLPX RLPHX RLPIX RLPRX RLPKX |
Performance and Expenses | ||||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | SINCE INCEPTION (12/15/93) | |||||||||
RLP | -11.37 | -3.37 | 4.46 | 5.07 | 5.33 | 8.85 | 11.31 | 10.89 | ||||||||
Annual Gross Operating Expenses: 1.51% Annual Net Operating Expenses: 1.49% | ||||||||||||||||
*Not Annualized |
Relative Returns: Monthly Rolling Average Annual Return Periods
15 Years Through 12/31/14
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 59% of all 10-year periods; 74% of all 5-year periods; 67% of all 3-year periods; and 58% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 36/61 | 59% | 8.8 | 7.3 | |||||||
5-year | 89/121 | 74% | 8.9 | 7.6 | |||||||
3-year | 97/145 | 67% | 8.8 | 8.2 | |||||||
1-year | 98/169 | 58% | 11.3 | 9.6 | |||||||
*Average of monthly rolling average annual total returns over the specified periods. |
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Invested on 12/15/93 as of 12/31/14 ($)
Top 10 Positions | ||
% of Net Assets | ||
Globe Specialty Metals | 1.3 | |
Vishay Intertechnology | 1.3 | |
Newpark Resources | 1.3 | |
Convergys Corporation | 1.3 | |
Kforce | 1.3 | |
Buckle (The) | 1.2 | |
RPX Corporation | 1.2 | |
Brocade Communications Systems | 1.2 | |
ADTRAN | 1.2 | |
Teradyne | 1.2 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Information Technology | 33.4 | |
Industrials | 16.3 | |
Consumer Discretionary | 11.5 | |
Energy | 8.9 | |
Financials | 7.7 | |
Materials | 6.7 | |
Health Care | 3.1 | |
Consumer Staples | 1.8 | |
Miscellaneous | 4.9 | |
Cash and Cash Equivalents | 5.7 | |
Calendar Year Total Returns (%) | ||
YEAR | RLP | |
2014 | -3.4 | |
2013 | 12.9 | |
2012 | 4.5 | |
2011 | -14.6 | |
2010 | 31.5 | |
2009 | 53.6 | |
2008 | -36.0 | |
2007 | 2.3 | |
2006 | 19.0 | |
2005 | 9.7 | |
2004 | 13.6 | |
2003 | 44.0 | |
2002 | -16.3 | |
2001 | 25.1 | |
2000 | 24.0 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
94 | 108 | |||
From 12/31/93 (Start of the | ||||
Fund’s First Full Quarter) | 103 | 92 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $677 million | |
Number of Holdings | 133 | |
Turnover Rate | 29% | |
Average Market Capitalization1 | $905 million | |
Weighted Average P/E Ratio2,3 | 18.7x | |
Weighted Average P/B Ratio2 | 1.6x | |
Holdings ≥ 75% of Total Investments | 76 | |
Active Share4 | 96% | |
U.S. Investments (% of Net Assets) | 77.3% | |
Non-U.S. Investments (% of Net Assets) | 17.0% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (23% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Price and total return information is based on net asset values for shareholder transactions. Certain immaterial adjustments were made to the net assets of Royce Low-Priced Stock Fund at 6/30/13 for financial reporting purposes, and as a result the net asset values for shareholder transactions and the calendar year total returns based on those net asset values differ from the adjusted net asset values and calendar year total returns reported in the Financial Highlights. Gross operating expenses reflect the Fund’s gross total annual operating expenses for the Service Class, including management fees, 12b-1 distribution and service fees, and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. 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 to the extent necessary to maintain the Service Class’s net annual operating expenses, excluding brokerage commissions, taxes, interest litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business, at or below 1.49% through April 30, 2015. Shares of RLP’s R Class bear an annual distribution expense that is higher than that of the Service Class. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 15 |
MANAGER’S DISCUSSION | ||
Royce Total Return Fund | ||
Jay Kaplan, CFA
FUND PERFORMANCE Royce Total Return Fund (“RTR”) finished the calendar year with a gain of 1.3%, behind its small-cap benchmark, the Russell 2000 Index, which was up 4.9% for the same period. This was a discouraging outcome even as the Fund in many ways performed as we would expect it to. The last four years have been characterized by both declining volatility and higher-than-average small-cap returns. In such a climate, we would anticipate beating the index in downdrafts while trailing in upswings, which has pretty much been the case for the 2011-2014 period, a span during which RTR achieved solid results on an absolute basis with noticeably lower volatility than its benchmark. Yet this has not made its frequent periods of underperformance any easier for us to digest. |
The year began with lower but positive small-cap returns following a highly dynamic 2013. The Fund trailed its benchmark in the first quarter before outpacing it in the second, finishing the first half with a 2.7% gain versus 3.2% for the Russell 2000. Small-caps established a high on July 3 that would hold until late December. The third quarter turned quickly bearish, and during this period the Fund held its value more effectively than the small-cap index, losing 6.5% versus 7.4%. Helped by a holiday gift in the form of a robust rally spread over most of the end of December, the fourth quarter was highly bullish. RTR finished the closing quarter up 5.5%, a more-than-respectable showing that nonetheless trailed the even more impressive 9.7% advance for the Russell 2000. Another year with a relative performance disadvantage affected longer-term results, pushing the Fund’s edge further out. RTR outpaced its benchmark for the 15-, 20-year, and since inception (12/15/93) periods ended December 31, 2014. The Fund’s average annual total return since inception was 11.2%, a long-term record that gives us great pride. |
WHAT WORKED... AND WHAT DIDN’T Six of RTR’s 10 equity sectors made positive contributions to 2014’s results, with Financials leading a diverse list that also included Health Care, Utilities, Information Technology, Consumer Discretionary, and Telecommunication Services. Three of the Fund’s four best-performing industries are housed within Financials—insurance companies, real estate investment trusts (REITs), and capital markets stocks. REITs, one of the strongest areas for small-caps in 2014, is not an area of primary investment focus, and we were significantly underweight versus the Russell 2000. Net gains came from a large number of companies in these three groups, led by long-term holding and top position Erie Indemnity, a Pennsylvania-based insurer whose shares we have held in the portfolio since 1998. A strong fiscal second quarter keyed an autumn advance for its shares. |
From the Health Care sector, Chemed Corporation operates two different businesses—hospice care provider Vitas and plumbing and drain cleaning service company Roto-Rooter. Its shares seemed to climb mostly as a result of a “no news is good news” scenario concerning Vitas. In 2013 the Justice Department began looking into its Medicare enrollment and billing rates. Offering more critical care than is typical in the hospice industry may have helped to trigger the investigation. However, margins for critical care are not much higher than for other elements of hospice care, and Vitas is one of the few able to deliver it on a nationwide basis. The lack of any additional developments in the investigation seemed to reassure investors. We reduced our position as its stock price rose. A rising share price also led us to take gains in The Cato Corporation, a discount women’s fashion retailer that was nonetheless a top-20 position at the end of 2014. Improved same-store sales drove its recovery. |
After a terrific first half, energy stocks fell so hard in the second half with the precipitous decline of oil prices that the sector became RTR’s hardest hit for the calendar year. Net losses in Consumer Staples, Materials, and Industrials especially had a decidedly less negative impact. While the near-term outlook for the energy industry remained very hard to gauge at this writing, we held shares in a number of companies, with our larger holdings typically slotted in the energy equipment & services group. The stock price of CARBO Ceramics, which manufactures ceramic proppants and other materials used in hydraulic well fracturing, fell more than 55% before the October announcement of better-than-expected earnings for the third quarter, news that did little for its share price. We added to our initially small position in Tidewater, which provides marine service vessels to offshore energy companies. Outside of Energy, we also built our stake in personal care products manufacturer and distributor Nu Skin Enterprises, which survived a multitude of recent challenges and is looking to revive its formerly fast-growing business in Asia. |
Top Contributors to Performance For 2014 (%)1 | |||
Chemed Corporation | 0.26 | ||
Cato Corporation (The) Cl. A | 0.25 | ||
Erie Indemnity Cl. A | 0.25 | ||
STERIS Corporation | 0.23 | ||
AllianceBernstein Holding L.P. | 0.21 | ||
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | |||
Nu Skin Enterprises Cl. A | -0.52 | ||
CARBO Ceramics | -0.34 | ||
Ascena Retail Group | -0.33 | ||
Tidewater | -0.24 | ||
GameStop Corporation Cl. A | -0.18 | ||
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK While the market continued to show a preference for high yields in 2014, we still believe that steady, consistent dividend-payers offer long-term advantages. The Fund’s sector weightings changed little from the end of 2013 as we again chose to position the portfolio for improved performance from cyclical sectors in 2015. We have based this decision on our confidence in both the ongoing expansion of the U.S. economy and an earnings-led rally for small-cap stocks. |
16 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYTRX RYTFX RTRIX RYTCX RTRRX RTRKX RTRWX |
Performance and Expenses | ||||||||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | SINCE INCEPTION (12/15/93) | |||||||||||||
RTR | -1.36 | 1.34 | 15.47 | 13.32 | 7.50 | 10.12 | 11.55 | 11.21 | ||||||||||||
Annual Operating Expenses: 1.18% | ||||||||||||||||||||
*Not Annualized |
Relative Returns: Monthly Rolling Average Annual Return Periods
15 Years Through 12/31/14
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 64% of all 10-year periods; 70% of all 5-year periods; 57% of all 3-year periods; and 55% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 39/61 | 64% | 8.5 | 7.3 | |||||||
5-year | 85/121 | 70% | 8.8 | 7.6 | |||||||
3-year | 83/145 | 57% | 9.6 | 8.2 | |||||||
1-year | 93/169 | 55% | 11.7 | 9.6 | |||||||
*Average of monthly rolling average annual total returns over the specified periods. |
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Invested on 12/15/93 as of 12/31/14 ($)
Top 10 Positions | ||
% of Net Assets | ||
Erie Indemnity Cl. A | 1.1 | |
E-L Financial | 1.0 | |
Markel Corporation | 1.0 | |
Alleghany Corporation | 1.0 | |
AllianceBernstein Holding L.P. | 0.9 | |
Bank of Hawaii | 0.9 | |
Gentex Corporation | 0.9 | |
Balchem Corporation | 0.9 | |
Tennant Company | 0.9 | |
Owens & Minor | 0.9 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Financials | 26.4 | |
Industrials | 18.8 | |
Consumer Discretionary | 12.4 | |
Materials | 11.0 | |
Information Technology | 8.2 | |
Health Care | 6.1 | |
Energy | 4.1 | |
Consumer Staples | 3.0 | |
Utilities | 2.8 | |
Telecommunication Services | 0.9 | |
Miscellaneous | 3.4 | |
Cash and Cash Equivalents | 2.9 | |
Calendar Year Total Returns (%) | ||
YEAR | RTR | |
2014 | 1.3 | |
2013 | 32.8 | |
2012 | 14.4 | |
2011 | -1.7 | |
2010 | 23.5 | |
2009 | 26.2 | |
2008 | -31.2 | |
2007 | 2.4 | |
2006 | 14.5 | |
2005 | 8.2 | |
2004 | 17.5 | |
2003 | 30.0 | |
2002 | -1.6 | |
2001 | 14.8 | |
2000 | 19.4 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 86 | 81 | ||
From 12/31/93 (Start of Fund’s | ||||
First Full Quarter) | 82 | 56 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $4,659 million | |
Number of Holdings | 400 | |
Turnover Rate | 18% | |
Average Market Capitalization1 | $2,202 million | |
Weighted Average P/E Ratio2,3 | 17.3x | |
Weighted Average P/B Ratio2 | 1.9x | |
Holdings ≥ 75% of Total Investments | 137 | |
Active Share4 | 89% | |
U.S. Investments (% of Net Assets) | 85.2% | |
Non-U.S. Investments (% of Net Assets) | 11.9% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (6% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Investment Class (its oldest class). 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, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Shares of RTR’s Service, Consultant, R, and K Classes bear an annual distribution expense that is not borne by the Investment Class. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 17
MANAGER’S DISCUSSION | |
Royce Heritage Fund |
Steven McBoyle, CPA, CA
Jim Harvey, CFA
FUND PERFORMANCE
Royce Heritage Fund (“RHF”) fell 1.1% in 2014, significantly trailing the 4.9% advance for its small-cap benchmark, the Russell 2000 Index, for the same period. The first six months of 2014, in addition to being a lower-return up phase, saw the Fund stay closer to the small-cap index. For the year-to-date period ended June 30, 2014, RHF increased 2.9% versus a 3.2% gain for the Russell 2000. The gap between the Fund and its benchmark in the second half of the year was primarily the result of poor performance for the former during the fourth quarter. The down phase in the third quarter saw both the Fund and the index losing 7.4%. Most small-cap prices recovered later in the year. The fourth-quarter rally, however, was not nearly as bullish for RHF as it was for its benchmark. The Fund gained 3.7% while the Russell 2000 rose 9.7%. Fourth-quarter results were frustrating as we saw outperformance from sectors of the market in which we typically do not participate. Longer-term results, however, were better on both an absolute and relative basis. We were pleased to see the Fund outpace its benchmark for the 10-, 15-year, and since inception (12/27/95) periods ended December 31, 2014. The Fund’s average annual total return since inception was 13.2%, a long-term record in which we take great pride. WHAT WORKED... AND WHAT DIDN’T Six of the Fund’s nine equity sectors made a net contribution to calendar-year results. Information Technology was the leader while Consumer Discretionary and Financials also posted solid results. The leading industry groups were capital markets stocks, IT services companies, distributors (from the Consumer Discretionary sector), and semiconductors & semiconductor equipment businesses. The third of these groups was home to Core-Mark Holding Company, a marketer and distributor of consumer goods to convenience stores, grocery stores, drug stores, and other retail centers. Improved second- and third-quarter earnings and an increased dividend offered investors a convenient reason to buy. We reduced our stake by taking gains at various times as the stock appreciated by some 60% during the year. The Fund’s third-largest holding at the end of 2014, Rogers Corporation is a technology company that manufactures specialty materials and components, including printed circuit materials, high-performance foams, and power electronic solutions. Somewhat volatile into the third quarter, its stock price soared in October after it reported record quarterly revenues, which capped a seventh consecutive quarter of year-over-year revenue growth. We were pleased to see each of its three core businesses contributing to its growth as we were buyers of its shares throughout 2014. Industrials, RHF’s largest sector and a significant overweight versus the Russell 2000 at year end, detracted most from calendar-year results. Of the 21 industry groups that suffered net losses in 2014, nine are slotted in that sector, with machinery stocks and construction & engineering companies registering the largest negative impact. Houston-based KBR came from the latter group. Its shares plummeted as the company contended with several troubles (some related to energy’s woes), such as cancellations and losses of projects as well as the pushed-out start dates for some of its LNG (liquefied natural gas) ventures. We were encouraged by a restructuring plan unveiled later in the year by the company’s CEO, which entailed streamlining operations and reducing overhead costs, refocusing on core areas of traditional strength, and exiting four non-core businesses that were more heavily fixed-price project oriented. We built our position as its price slipped. When oil prices declined by 50% in the second half, it had a predictably depressing effect on energy and related stocks throughout the equity market. And some parts of the industry felt much of the brunt more immediately than others. This was the case with many offshore drillers because of the higher operating costs inherent in that business. Based in Switzerland, Transocean is the world’s largest offshore driller. Its shares corrected significantly as pre-existing industry oversupply of ultra-deep water drilling was compounded by the severe commodity-price decline. Unit Corporation is a long-time Royce holding that has always been something of an anomaly in its business because the energy industry traditionally, if not rigidly, separates oil and gas producers from service providers. |
Top Contributors to Performance | ||
For 2014 (%)1 | �� | |
Core-Mark Holding Company | 0.47 | |
Rogers Corporation | 0.36 | |
ePlus | 0.27 | |
Pan American Silver | 0.26 | |
Bed Bath & Beyond | 0.25 | |
1Includes dividends |
Top Detractors from Performance | ||
For 2014 (%)2 | ||
Transocean | -0.71 | |
Unit Corporation | -0.41 | |
KBR | -0.36 | |
Trican Well Service | -0.32 | |
Reliance Steel & Aluminum | -0.29 | |
2Net of dividends |
CURRENT POSITIONING AND OUTLOOK As the year came to an end, we attempted to take advantage by buying shares of companies that saw their valuations disconnect from fundamentals due to concerns over European growth and more general deflation in basic materials. Effective February 2, 2015, Steven McBoyle became the Fund’s lead portfolio manager after serving as portfolio manager since 2012. Chuck Royce and James Harvey continue to serve as portfolio managers. |
18 | The Royce Funds 2014 Annual Report to Shareholders
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RGFAX RHFHX RYGCX RHFRX RHFKX |
Performance and Expenses | ||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | SINCE INCEPTION (12/27/95) | ||||||||
RHF | -3.92 | -1.14 | 12.50 | 10.48 | 7.96 | 9.50 | 13.15 | |||||||
Annual Operating Expenses: 1.49% | ||||||||||||||
*Not Annualized | ||||||||||||||
15 Years Through 12/31/14
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 100% of all 10-year periods; 90% of all 5-year periods; 67% of all 3-year periods; and 57% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 61/61 | 100% | 9.6 | 7.3 | |||||||
5-year | 109/121 | 90% | 9.7 | 7.6 | |||||||
3-year | 97/145 | 67% | 9.8 | 8.2 | |||||||
1-year | 96/169 | 57% | 11.7 | 9.6 | |||||||
*Average of monthly rolling average annual total returns over the specified periods.
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Invested on 12/27/95 as of 12/31/14 ($)
Top 10 Positions | ||
% of Net Assets | ||
Copart | 1.8 | |
Ritchie Bros. Auctioneers | 1.6 | |
Rogers Corporation | 1.5 | |
DENTSPLY International | 1.5 | |
Expeditors International of Washington | 1.4 | |
Diodes | 1.4 | |
KKR & Co. L.P. | 1.4 | |
Bed Bath & Beyond | 1.3 | |
Reliance Steel & Aluminum | 1.2 | |
Anixter International | 1.2 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Industrials | 25.5 | |
Information Technology | 18.5 | |
Financials | 17.1 | |
Consumer Discretionary | 11.6 | |
Materials | 8.6 | |
Health Care | 5.6 | |
Energy | 4.2 | |
Consumer Staples | 0.6 | |
Utilities | 0.5 | |
Miscellaneous | 4.5 | |
Cash and Cash Equivalents | 3.3 | |
Calendar Year Total Returns (%) | ||
YEAR | RHF | |
2014 | -1.1 | |
2013 | 26.0 | |
2012 | 14.3 | |
2011 | -9.3 | |
2010 | 27.5 | |
2009 | 51.8 | |
2008 | -36.2 | |
2007 | 1.2 | |
2006 | 22.6 | |
2005 | 8.7 | |
2004 | 20.4 | |
2003 | 38.1 | |
2002 | -18.9 | |
2001 | 20.5 | |
2000 | 11.7 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 101 | 100 | ||
From 12/31/95 (Start of Fund’s | ||||
First Full Quarter) | 112 | 89 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $359 million | |
Number of Holdings | 202 | |
Turnover Rate | 35% | |
Average Market Capitalization1 | $2,928 million | |
Weighted Average P/E Ratio sizes2,3 | 19.8x | |
Weighted Average P/B Ratio2 | 2.5x | |
Holdings ≥ 75% of Total Investments | 96 | |
Active Share 4 | 95% | |
U.S. Investments (% of Net Assets) | 75.0% | |
Non-U.S. Investments (% of Net Assets) | 21.7% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (6% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Price and total return information is based on net asset values calculated for shareholder transactions. Certain immaterial adjustments were made to the net assets of Royce Heritage Fund at 12/30/11 for financial reporting purposes, and as a result the net asset values for shareholder transactions on that date and the calendar year total returns based on those net asset values differ from the adjusted net asset values and calendar year total returns reported in the Financial Highlights. Operating expenses reflect the Fund’s total annual operating expenses for the Service Class as of the Fund’s most current prospectus and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Shares of RHF’s Consultant and R Classes bear an annual distribution expense that is higher than that of the Service Class. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 19 |
MANAGER’S DISCUSSION | |
Royce Opportunity Fund |
Bill Hench
FUND PERFORMANCE
Royce Opportunity Fund (“ROF”) posted a loss of 0.5% in 2014, underperforming its small-cap benchmark, the Russell 2000 Index, which increased 4.9% for the same period. After a number of strong calendar-year performances on both an absolute and relative basis, ROF finished further behind its benchmark than we would prefer. And while a year in the red, even slightly, is far from ideal, we remain confident in the Fund’s distinctive opportunistic approach, especially over long-term periods. For the first half, the Fund narrowly trailed the Russell 2000, up 3.0% versus 3.2%. The bulk of ROF’s difficulties, on both a relative and absolute basis, were in the bearish third quarter when small-caps began to slide following a high on July 3. For the quarter, the Fund fell 9.0% compared to a loss of 7.4% for the small-cap index. This did not worry us; ROF has historically had a mixed record of success in short-term downdrafts versus the Russell 2000. And while the Fund also underperformed in the bullish fourth quarter, rising 6.1% while the Russell 2000 climbed 9.7%, the quarter included the end of the downturn, which bottomed out on October 13. From that date through the end of December, ROF narrowly outpaced the small-cap index, advancing 15.4% versus 15.2%. The calendar year did little to dent ROF’s longer-term advantage. The Fund outpaced the small-cap index for the three-, 10-, 15-year, and since inception (11/19/96) periods ended December 31, 2014 (and trailed by only 24 basis points for the five-year period). ROF’s average annual total return since inception was 13.0%. We take great pride in the Fund’s nearly two decades of strong long-term results. WHAT WORKED... AND WHAT DIDN’T The market hates uncertainty. In that sense, the second half of 2014 reminded us a little of 2011, when political discord made the market nervous and led to a largely negative second half. Although 2014 was a much better year than 2011, we once again saw an exogenous event–the collapse of oil prices—sow the seeds of uncertainty, rattle investors, and help to create both higher volatility and steep losses, at least among certain small-caps and most energy companies. ROF’s exposure to Energy was slight, though not small enough to prevent the sector from detracting most–by a good-sized margin–from 2014’s results. Two holdings from the sector were among the Fund’s loss leaders. Swift Energy is an onshore and offshore exploration & production (“E&P”) company. Offshore has higher costs, which meant being hurt first and hardest in the decline. We reduced our position in December, as we did with Approach Resources, a Texas-based E&P business. Outside Energy, we held shares of Quiksilver, which makes and distributes youth-oriented branded apparel, footwear, and accessories. The company operates under its own brand name as well as Roxy and DC. Its turnaround is taking longer than we anticipated, but we like the management team that came on board in 2013 and the strong presence of its brands in high-profile spots such as Macy’s. Our confidence in the likelihood of infrastructure improvements led us to build our position in General Cable, which makes copper, aluminum, and fiber optic wire and cable products for the energy, industrial, construction, specialty, and communications markets. Its international exposure hurt results, but we think it’s well positioned to recover when industrial activity picks up. The rising stock price of Century Aluminum prompted us to sell shares through most of 2014. The company produces the metal for sale in the U.S. and Iceland. Earnings recovered in the second half in part the result of the increased use of aluminum-steel hybrids in the aerospace and automotive industries. In February 2014, RF Micro Devices and TriQuint Semiconductor agreed to merge, which seemed to help the shares of each semiconductor business to climb in 2014. We sold the last of our shares of TriQuint in May while holding RF Micro Devices at year end. One of 2013’s top contributors extended its net gains through 2014–SunEdison produces electronic-grade polysilicon used for electronics, solar cells, and film devices while also developing solar power projects. The demand for solar technology keeps heating up, the result of improved technological efficiency that’s helping to lower costs and support for its long-term environmental benefits. |
Top Contributors to Performance | ||
For 2014 (%)1 | ||
Century Aluminum | 0.61 | |
RF Micro Devices | 0.47 | |
SunEdison | 0.36 | |
Spansion Cl. A | 0.35 | |
Planar Systems | 0.35 | |
1Includes dividends |
Top Detractors from Performance | ||
For 2014 (%)2 | ||
Quiksilver | -0.42 | |
Swift Energy | -0.36 | |
General Cable | -0.34 | |
Approach Resources | -0.31 | |
Extreme Networks | -0.28 | |
2Net of dividends |
CURRENT POSITIONING AND OUTLOOK In many ways a restocking year, 2014 saw us trimming or selling positions that had established momentum while looking to find or add to companies that will ideally furnish the next few years with strong performance. Looking ahead, we are constructive on several consumer and technology areas, as well as housing and non-residential construction. Lower energy prices and improved employment rates should help to keep the U.S. consumer active and confident, as was the case in the closing months of 2014 when auto sales remained strong, and holiday sales were robust for many retailers. We anticipate that housing sales should gain momentum in the weeks and months following the Super Bowl, as is often the case, and also expect non-residential construction and infrastructure activity to increase in 2015. |
20 | The Royce Funds 2014 Annual Report to Shareholders
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYPNX RYOFX ROFCX ROFIX ROFRX ROFKX |
Performance and Expenses | ||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | SINCE INCEPTION (11/19/96) | ||||||||
ROF | -3.40 | -0.48 | 20.52 | 15.31 | 8.14 | 11.60 | 13.00 | |||||||
Annual Operating Expenses: 1.17% | ||||||||||||||
*Not Annualized |
Relative Returns: Monthly Rolling Average Annual Return Periods 15 Years Through 12/31/14 | ||||
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 100% of all 10-year periods; 83% of all 5-year periods; 79% of all 3-year periods; and 67% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 61/61 | 100% | 9.9 | 7.3 | |||||||
5-year | 100/121 | 83% | 10.3 | 7.6 | |||||||
3-year | 115/145 | 79% | 11.3 | 8.2 | |||||||
1-year | 114/169 | 67% | 14.9 | 9.6 | |||||||
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Top 10 Positions | ||
% of Net Assets | ||
Microsemi Corporation | 0.9 | |
Sanmina Corporation | 0.8 | |
Mueller Industries | 0.8 | |
Advanced Energy Industries | 0.8 | |
Commercial Metals | 0.8 | |
RTI International Metals | 0.8 | |
Mueller Water Products Cl. A | 0.8 | |
Ingram Micro Cl. A | 0.7 | |
Kaiser Aluminum | 0.7 | |
Atlas Air Worldwide Holdings | 0.7 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Information Technology | 29.6 | |
Industrials | 20.1 | |
Consumer Discretionary | 12.5 | |
Financials | 10.3 | |
Materials | 7.8 | |
Health Care | 4.0 | |
Energy | 2.1 | |
Consumer Staples | 1.2 | |
Telecommunication Services | 0.6 | |
Miscellaneous | 4.8 | |
Cash and Cash Equivalents | 7.0 | |
Calendar Year Total Returns (%) | ||
YEAR | ROF | |
2014 | -0.5 | |
2013 | 43.5 | |
2012 | 22.6 | |
2011 | -13.0 | |
2010 | 33.8 | |
2009 | 62.1 | |
2008 | -45.7 | |
2007 | -2.0 | |
2006 | 18.8 | |
2005 | 4.8 | |
2004 | 17.5 | |
2003 | 72.9 | |
2002 | -17.0 | |
2001 | 17.3 | |
2000 | 19.8 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 121 | 128 | ||
From 12/31/95 (Start of Fund's First Full Quarter) | 126 | 110 | ||
Portfolio Diagnostics | ||||
Fund Net Assets | $2,315 million | |||
Number of Holdings | 295 | |||
Turnover Rate | 36% | |||
Average Market Capitalization1 | $791 million | |||
Weighted Average P/B Ratio2 | 1.4x | |||
Holdings ≥ 75% of Total Investments | 151 | |||
Active Share3 | 90% | |||
U.S. Investments (% of Net Assets) | 83.3% | |||
Non-U.S. Investments (% of Net Assets) | 3.7% | |||
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Investment Class (its oldest class). 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, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Shares of ROF’s Service, Consultant, R, and K Classes bear an annual distribution expense that is not borne by the Investment Class. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 21 |
MANAGER’S DISCUSSION | |
Royce Special Equity Fund |
FUND PERFORMANCE
Royce Special Equity Fund (“RSE”) suffered some relative disappointments in 2014. The Fund gained 1.1% in the calendar year, underperforming its small-cap benchmark, the Russell 2000 Index, which advanced 4.9% for the same period. In the context of a market in which many companies with no earnings, no dividend, and other lower-quality attributes continued to outperform, this was hardly surprising. In fact, the strength of low quality was particularly evident even in the first quarter, when RSE was down 0.8% versus a gain of 1.1% for the Russell 2000. Much of this underperformance came from specialty retailers in the Consumer Discretionary sector, and the negative impact was exacerbated by the portfolio’s significant overweight versus the benchmark. However, our patience with many of these holdings would begin to be rewarded later in the year. After underperforming again in the second quarter, the Fund finished behind the index in the first half, up 0.2% versus 3.2% for the Russell 2000. When the market became both more volatile and markedly bearish in the third quarter, the Fund had a somewhat curious experience. It lost less than the small-cap index in both the July and September downturns but underperformed in the August recovery, which gave RSE only a narrowly smaller loss than the Russell 2000 for the third quarter as a whole, -7.1% versus -7.4%. We were pleased to see the Fund go on to enjoy a strong rebound when small-cap prices began to recover, thanks in part to a strong showing from specialty retailers. RSE advanced 8.6% in the fourth quarter compared to 9.7% for its benchmark. Considering the Fund’s long-term historical pattern, 2014 results were not surprising as the market continued to favor lower-quality issues that simply do not meet our exacting selection standards. We were pleased with RSE’s longer-term results. The Fund outpaced the Russell 2000 for the 10-, 15-year, and since inception (5/1/98) periods ended December 31, 2014. RSE’s average annual total return since inception was 9.8%. WHAT WORKED... AND WHAT DIDN’T Only two of the Fund’s equity sectors—Consumer Staples and Consumer Discretionary—finished the year with net losses, which were modest. The latter group, as mentioned, received a considerable boost in the fourth-quarter rally. Information Technology led the Fund’s five equity sectors that posted net gains in 2014 (Financials were flat for the year). RSE’s three top-performing industry groups were chemicals, media, and commercial services & supplies, while the communications equipment group, semiconductors & semiconductor equipment companies, and electronic equipment, instruments & components stocks all posted solid net gains to galvanize the Information Technology sector. The Fund’s top performer and largest holding at the end of the year was UniFirst Corporation, which provides workplace uniforms and protective work wear clothing. We added shares between February and early June. Minerals Technologies, another top-performing top-10 position, is a resource- and technology-based organization that develops and produces performance-enhancing minerals as well as synthetic mineral and mineral-based products. We took gains through much of the year as its price rose. RSE’s leading detractor was also a top-10 holding. Schweitzer-Mauduit International runs a global business from Georgia manufacturing paper and reconstituted tobacco products for the tobacco industry. After buying during the first half, we trimmed in the second, resulting in a small net decrease in the position for the year. The Finish Line ran a poor race in what was often a torturous course for retailers in 2014. The company sells men’s, women’s, and children’s brand name athletic and leisure footwear, activewear, and accessories. It was the Fund’s sixth-largest position at the end of the year. |
Top Contributors to Performance | ||
For 2014 (%)1 | ||
UniFirst Corporation | 0.93 | |
Minerals Technologies | 0.81 | |
Meredith Corporation | 0.65 | |
Plantronics | 0.55 | |
Neenah Paper | 0.47 | |
1 Includes dividends |
Top Detractors from Performance | ||
For 2014 (%)2 | ||
Schweitzer-Mauduit International | -0.62 | |
Finish Line (The) Cl. A | -0.59 | |
LeapFrog Enterprises Cl. A | -0.54 | |
Universal Corporation | -0.52 | |
EnerSys | -0.40 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK The combination of slower growth in healthcare costs on top of lower energy prices is striking—a decade ago, energy and healthcare costs were consuming nearly all of the gains in consumer discretionary income. It is possible, even likely, that profit margins will expand rather than contract, as most expect. Besides the slide in commodity prices, we continue to see the substitution of capital for labor. While having a negative outcome concerning income inequality, it bodes well for the equity market. We still believe that more merger and acquisition activity is ahead and that our portfolio should receive its share and then some in light of both our methodology and the attractiveness of the issues. The forces behind more M&A activity include record-low interest rates, little other cost cutting opportunities, many companies being over capitalized (some with sizeable cash balances), activist investing putting deals into play, and the fact that acquiring companies shares have been advancing immediately of late. Market correlations continue to fall, which suggests that the value of stock picking will continue to increase in importance. The more concerned about the market one is, the more we think quality companies—those with high returns on equity, low debt, and stable earnings—make sense. |
22 | The Royce Funds 2014 Annual Report to Shareholders
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYSEX RSEFX RSEIX RSQCX |
Performance and Expenses | ||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | SINCE INCEPTION (5/1/98) | ||||||||
RSE | 0.93 | 1.09 | 14.69 | 12.55 | 8.22 | 12.19 | 9.77 | |||||||
Annual Operating Expenses: 1.13% | ||||||||||||||
* Not Annualized |
Relative Returns: Monthly Rolling Average Annual Return Periods 15 Years Through 12/31/14 | ||||||||||||||
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 80% of all 10-year periods; 72% of all 5-year periods; 48% of all 3-year periods; and 50% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 49/61 | 80% | 10.1 | 7.3 | |||||||
5-year | 87/121 | 72% | 10.3 | 7.6 | |||||||
3-year | 70/145 | 48% | 11.4 | 8.2 | |||||||
1-year | 84/169 | 50% | 13.2 | 9.6 | |||||||
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Invested on 5/1/98 as of 12/31/14 ($)
Top 10 Positions | ||
% of Net Assets | ||
UniFirst Corporation | 6.5 | |
Bed Bath & Beyond | 6.4 | |
AVX Corporation | 4.8 | |
Meredith Corporation | 4.5 | |
Children’s Place | 4.3 | |
Finish Line (The) Cl. A | 4.0 | |
Minerals Technologies | 3.9 | |
Scholastic Corporation | 3.4 | |
Schweitzer-Mauduit International | 3.4 | |
ScanSource | 3.3 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Consumer Discretionary | 32.8 | |
Industrials | 23.2 | |
Information Technology | 16.4 | |
Materials | 11.6 | |
Consumer Staples | 6.6 | |
Health Care | 2.5 | |
Energy | 1.2 | |
Financials | 0.3 | |
Cash and Cash Equivalents | 5.4 | |
Calendar Year Total Returns (%) | ||
YEAR | RSE | |
2014 | 1.1 | |
2013 | 29.4 | |
2012 | 15.4 | |
2011 | 0.1 | |
2010 | 19.6 | |
2009 | 28.4 | |
2008 | -19.6 | |
2007 | 4.7 | |
2006 | 14.0 | |
2005 | -1.0 | |
2004 | 13.9 | |
2003 | 27.6 | |
2002 | 15.3 | |
2001 | 30.7 | |
2000 | 16.3 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 79 | 65 | ||
From 6/30/98 (Start of Fund's | ||||
First Full Quarter) | 74 | 48 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $2,888 million | |
Number of Holdings | 40 | |
Turnover Rate | 21% | |
Average Market Capitalization1 | $1,934 million | |
Weighted Average P/E Ratio2,3 | 18.5x | |
Weighted Average P/B Ratio2 | 2.1x | |
Holdings ≥ 75% of Total Investments | 20 | |
Active Share 4 | 98% | |
U.S. Investments (% of Net Assets) | 94.6% | |
Non-U.S. Investments (% of Net Assets) | 0.0% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (3% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Investment Class (its oldest class). 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. Shares of RSE’s Service and Consultant Classes bear an annual distribution expense that is not borne by the Investment Class. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 23 |
MANAGER’S DISCUSSION | |
Royce Value Fund |
Jay Kaplan, CFA |
FUND PERFORMANCE Royce Value Fund (“RVV”) finished 2014 with a slight loss of 0.02%, well behind its small-cap benchmark, the Russell 2000 Index, which advanced 4.9% for the same period. Making things more frustrating was that RVV was slightly ahead of the small-cap index in the first half, up 3.4% versus 3.2%. This capped a smooth start to 2014 that followed the red-hot pace of returns in 2013. Yet this did not last, at least not for small-caps. Shortly after establishing a high on July 3, returns for the Russell 2000 began to slip. This made for a dismal third quarter in which the Fund fell 5.6%, losing less than its benchmark, which declined 7.4%. At this stage, the Fund remained ahead of the small-cap index for the nine-month period ended September 30, 2014. The Fund forfeited its relative advantage, then, in the otherwise pleasant fourth quarter. Small-caps remained volatile through the year’s final three months, but returns were generally positive. This was more true in some cases, however, than in others. The Russell 2000 managed a gain in each of the year’s last three months while Halloween marked the final month with a positive return for RVV. For the fourth quarter, the Fund rose 2.4% versus 9.7% for the Russell 2000. Longer-term returns offered something better on a relative (as well as absolute) basis. RVV outpaced the small-cap index for the 10-year and since inception (6/14/01) periods ended December 31, 2014. The Fund’s average annual total return since inception was 10.8%. WHAT WORKED... AND WHAT DIDN’T Three of RVV’s equity sector finished the year in the red—Energy, Consumer Staples, and Materials. After finishing the first half as the Fund’s best-performing sector, energy stocks were crushed by the precipitous collapse in oil prices. Atwood Oceanics is an offshore drilling contractor that specializes in deep-water drilling, an area that earlier in the year was suffering from an oversupply problem that hurt pricing for both rigs and drill ships. Atwood’s rigs that are currently under customer contracts make its prospects for 2015 look fairly solid, but 2016’s outlook is murky. The decline in commodity prices also led the company to push out delivery dates for two large new drill ships for which it does not yet have contracts. We think it can benefit from a recovery in oil prices, but the timing on that is obviously impossible to predict. While keeping in mind the daunting short-and intermediate-term prospects for the industry, we were also constructive about the long-term prospects for Unit Corporation, which operates primarily as a contract drilling company that is also involved in exploration and production and engages in midstream activities. These related segments make it an outlier in an otherwise rigidly specialized industry, though we like its unique business model as well as its long history of strong operating results. Outside of Energy, Nu Skin Enterprises settled some issues with the Chinese government by paying fines and improving training, restructuring its debt covenants, and reversing a cash flow problem. This was all good news, but we think the firm also needs improved sales in China to spur a comeback. |
The sectors that contributed most to 2014 results were Information Technology (by a sizable margin), Financials, Health Care, Industrials, and Consumer Discretionary. Net gains in the first of these groups were particularly strong in the semiconductors & semiconductor equipment group and communications equipment industry, where Brocade Communications Systems, which provides switching solutions for storage area networks (SAN), was the standout. Knight Transportation, from the Industrials sector, is a short-to medium-haul truckload carrier of general commodities that we regard as a very well-run business. Consolidation and labor tightening in its industry aided the stronger players, and Knight’s stock price accelerated. The Fund’s top-performing position was Chemed Corporation, which operates two very different businesses—hospice care provider Vitas and plumbing and drain cleaning service company Roto-Rooter—and is slotted in Health Care. Its shares appeared to benefit most from a “no news is good news” scenario regarding Vitas. In 2013 this business became the target of a Justice Department investigation into Medicare enrollment and billing rates. Vitas offers more critical care than is typical in the hospice industry, which might have helped to trigger an inquiry. However, margins for critical care are not much higher than for other elements of hospice care, and the firm is one of the few able to deliver it on a nationwide basis. The absence of news around the investigation seemed to reassure investors who flocked to the stock. We like the consistency and brand value of Roto-Rooter and Vitas’s status as one of the few hospice providers with coast-to-coast reach. |
Top Contributors to Performance For 2014 (%)1 | ||
Chemed Corporation | 0.90 | |
Knight Transportation | 0.73 | |
Brocade Communications Systems | 0.66 | |
DSW Cl. A | 0.60 | |
G-III Apparel Group | 0.56 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
Nu Skin Enterprises Cl. A | -1.96 | |
Atwood Oceanics | -1.45 | |
Ascena Retail Group | -1.35 | |
Unit Corporation | -0.88 | |
GameStop Corporation Cl. A | -0.74 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK At the end of 2014, RVV remained heavily overweight in the Consumer Discretionary and Information Technology sectors, which reflected our confidence for strong growth potential in these areas. Biotech was an area that we again avoided. These companies, which have been among small-cap’s best performers over the last couple of years, also tend to have no earnings. We expect interest rates to remain low and for the economy to keep growing. In our view stocks should benefit from earnings growth, and we have carefully positioned the portfolio for this kind of environment. |
24 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYVFX RVVHX RVFIX RVFCX RVVRX RVFKX |
Performance and Expenses | ||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | SINCE INCEPTION (6/14/01) | |||||||
RVV | -3.32 | -0.02 | 11.85 | 10.12 | 8.15 | 10.84 | ||||||
Annual Operating Expenses: 1.48% | ||||||||||||
*Not Annualized |
Since Inception Through 12/31/14
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 100% of all 10-year periods; 74% of all 5-year periods; 70% of all 3-year periods; and 63% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 43/43 | 100% | 11.2 | 8.3 | |||||||
5-year | 76/103 | 74% | 10.7 | 7.6 | |||||||
3-year | 89/127 | 70% | 12.1 | 9.3 | |||||||
1-year | 95/151 | 63% | 13.6 | 11.0 | |||||||
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Invested On 6/14/01 as of 12/31/14 ($)
Top 10 Positions | ||
% of Net Assets | ||
Buckle (The) | 3.2 | |
Reinsurance Group of America | 3.0 | |
Vishay Intertechnology | 3.0 | |
Brocade Communications Systems | 3.0 | |
NETGEAR | 3.0 | |
Genesco | 2.9 | |
Genworth MI Canada | 2.8 | |
Innospec | 2.7 | |
Nu Skin Enterprises Cl. A | 2.7 | |
Steven Madden | 2.7 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Consumer Discretionary | 28.2 | |
Information Technology | 26.1 | |
Financials | 12.0 | |
Materials | 9.1 | |
Energy | 8.6 | |
Industrials | 8.1 | |
Consumer Staples | 2.8 | |
Health Care | 1.9 | |
Miscellaneous | 1.8 | |
Cash and Cash Equivalents | 1.4 | |
Calendar Year Total Returns (%) | ||
YEAR | RVV | |
2014 | -0.0 | |
2013 | 27.8 | |
2012 | 9.6 | |
2011 | -7.4 | |
2010 | 25.0 | |
2009 | 44.7 | |
2008 | -34.2 | |
2007 | 3.8 | |
2006 | 16.8 | |
2005 | 17.2 | |
2004 | 30.9 | |
2003 | 54.3 | |
2002 | -23.5 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 103 | 101 | ||
From 6/30/01 (Start of Fund's First Full Quarter) | 109 | 96 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $882 million | |
Number of Holdings | 65 | |
Turnover Rate | 38% | |
Average Market Capitalization1 | $2,154 million | |
Weighted Average P/E Ratio2,3 | 13.8x | |
Weighted Average P/B Ratio2 | 1.7x | |
Holdings ≥ 75% of Total Investments | 31 | |
Active Share4 | 97% | |
U.S. Investments (% of Net Assets) | 89.0% | |
Non-U.S. Investments (% of Net Assets) | 9.6% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (3% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Operating expenses reflect the Fund’s total annual operating expenses for the Service Class as of the Fund’s most current prospectus and include management fees, 12b-1 distribution and service fees, and other expenses. Shares of RVV’s Consultant and R Classes bear an annual distribution expense that is higher than that of the Service Class. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 25 |
MANAGER’S DISCUSSION | |
Royce Value Plus Fund |
Chip Skinner, CFA |
FUND PERFORMANCE Royce Value Plus Fund (“RVP”) gained 3.9% in 2014, trailing its small-cap benchmark, the Russell 2000 Index, which gained 4.9% for the same period. RVP finished the first half of 2014 with an advantage over the small-cap benchmark, up 4.1% versus 3.2%. Holding this gain through the third quarter, when small-cap stock prices began to slip rapidly following a high for the Russell 2000 on July 3, RVP was down 6.5% while the small-cap index declined 7.4%. When small-caps rallied through much of the fourth quarter, however, the Fund could not match the benchmark’s pace. RVP increased 6.8% in the final quarter of 2014, a fine result on an absolute basis, but still behind the 9.7% advance for the Russell 2000. This had its effect on certain intermediate-and long-term results, many of which fell short of what we would like on a relative basis even as they were strong on an absolute basis. The Fund outperformed the Russell 2000 for the since inception (6/14/01) period ended December 31, 2014. RVP’s average annual total return since inception was 12.2%. WHAT WORKED... AND WHAT DIDN’T Health Care had a robustly positive effect on calendar-year results, leading all of the Fund’s sectors by a large margin. Two of these holdings were takeover targets in 2014. Furiex Pharmaceuticals first saw strong results in phase III clinical trials for an IBS treatment before being acquired at a healthy premium. The announcement in April prompted us to sell our shares. In February the stock price of InterMune soared on news of positive phase III trial results for a drug that treats IPF (idiopathic pulmonary fibrosis), a chronic and ultimately fatal condition that leads to a decline in lung function. It shot up again in August on news that Roche was buying therm. Elsewhere in the sector, Myriad Genetics was a top contributor after detracting from 2013 results. The company faced several headwinds that year: reimbursement change concerns from payers, a Supreme Court decision in June that held that human genes cannot be patented, and new competition in the breast cancer gene testing market. This led its stock to fall, though the company retained some of its patents on certain genetic testing processes. Its shares then came back strong in the first half. The reimbursement issues were resolved at a rate that was more favorable than many investors were expecting, and the firm has demonstrated an impressive rate of growth. Additionally, competition, especially in the breast cancer genetic screening area, has not materialized to the degree many were anticipating. For example, it has retained about 90% of its market share in breast cancer genetic screening. It was the Fund’s third-largest holding at year end. |
We also had success with holdings involved in big data and machine-to-machine (M2M) technology, sometimes known as “the Internet of Things.” The latter typically involves using technology on one piece of equipment that captures and relays information through a wireless or wired network. This information then goes to a computer, which translates it into meaningful data that makes machines work better. Sierra Wireless, a wireless data communications equipment company with a global business providing M2M communications and mobile components, was one beneficiary of solid fundamentals and burgeoning investor interest in this important area. It was RVP’s fourteenth-largest holding at the end of 2014. |
Net losses at the sector level were relatively modest. Energy led the detractors followed by Materials, Consumer Staples, and Financials. After increasing our exposure to Energy in the first half, we began to trim as share prices were climbing, a fortuitous shift in light of the rapid decline in oil prices. With Energy, our preference is for service businesses rather than E&P (exploration & production) companies. Triangle Petroleum is involved in several facets of energy, including fracking and well services as well as production. Its shares plummeted with the second-half plunge in commodity prices. As with the Fund’s other holdings in the sector, we like its longer-term potential to recover in an improved business climate for the industry. E2open initially looked to us like a broken SaaS business (“software as a service,” a software licensing and delivery model in which software is licensed on a subscription basis) that had terrific rebound potential. Three lost customers later, we concluded that its growth potential looked likely to remain untapped for longer than we were willing to wait and sold our shares despite some positive product feedback. SciQuest provides procurement and spending management software on a subscription basis primarily to universities, hospitals, and local and state governments. Its planned expansion into more commercial sectors did not materialize along the lines we had been anticipating. The firm also exhibited an earnings pattern that had grown too consistently inconsistent and was made worse by some recent misses. All of this led us to take our losses and move on, selling the last of our shares in October. |
Top Contributors to Performance For 2014 (%)1 | ||
InterMune | 1.65 | |
Furiex Pharmaceuticals | 1.44 | |
Sierra Wireless | 1.33 | |
Myriad Genetics | 0.95 | |
U.S. Silica Holdings | 0.93 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
E2open | -1.31 | |
SciQuest | -0.90 | |
Triangle Petroleum | -0.62 | |
Worthington Industries | -0.53 | |
Medicines Company (The) | -0.47 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK We sought to bring sector weightings more into balance with one another during 2014, reducing some (such as Energy) and adding to others, such as Health Care. Looking forward, the latter sector and Consumer Discretionary are areas of particular interest. While we slightly reduced our overall exposure to Information Technology, the big data and Internet of Things themes remain focal points. |
26 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYVPX RVPHX RVPCX RVPIX RVPRX RVPKX |
Performance and Expenses | ||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | SINCE INCEPTION (6/14/01) | |||||||
RVP | -0.18 | 3.89 | 16.64 | 11.32 | 7.11 | 12.18 | ||||||
Annual Operating Expenses: 1.49% | ||||||||||||
*Not Annualized |
Since Inception Through 12/31/14
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 79% of all 10-year periods; 52% of all 5-year periods; 52% of all 3-year periods; and 56% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 34/43 | 79% | 10.5 | 8.3 | |||||||
5-year | 54/103 | 52% | 9.8 | 7.6 | |||||||
3-year | 66/127 | 52% | 12.1 | 9.3 | |||||||
1-year | 85/151 | 56% | 15.0 | 11.0 | |||||||
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Invested On 6/14/01 as of 12/31/14 ($)
Top 10 Positions | ||
% of Net Assets | ||
Rogers Corporation | 2.8 | |
IPG Photonics | 2.6 | |
Myriad Genetics | 2.4 | |
Zumiez | 2.4 | |
Paylocity Holding Corporation | 2.4 | |
Carter’s | 2.1 | |
Mobile Mini | 1.9 | |
Actelion | 1.8 | |
Mercury Systems | 1.8 | |
UCB | 1.8 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Information Technology | 22.9 | |
Consumer Discretionary | 17.5 | |
Industrials | 15.3 | |
Health Care | 15.2 | |
Financials | 9.8 | |
Materials | 4.7 | |
Energy | 4.0 | |
Consumer Staples | 3.6 | |
Telecommunication Services | 1.0 | |
Miscellaneous | 4.1 | |
Cash and Cash Equivalents | 1.9 | |
Calendar Year Total Returns (%) | ||
YEAR | RVP | |
2014 | 3.9 | |
2013 | 32.5 | |
2012 | 15.2 | |
2011 | -10.0 | |
2010 | 19.7 | |
2009 | 41.4 | |
2008 | -41.1 | |
2007 | 3.2 | |
2006 | 19.3 | |
2005 | 13.2 | |
2004 | 28.2 | |
2003 | 79.9 | |
2002 | -14.7 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 101 | 107 | ||
From 6/30/01 (Start of Fund’s First Full Quarter) | 116 | 99 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $926 million | |
Number of Holdings | 92 | |
Turnover Rate | 52% | |
Average Market Capitalization1 | $1,724 million | |
Weighted Average P/E Ratio2,3 | 22.9x | |
Weighted Average P/B Ratio2 | 2.9x | |
Holdings ≥ 75% of Total Investments | 50 | |
Active Share4 | 96% | |
U.S. Investments (% of Net Assets) | 81.7% | |
Non-U.S. Investments (% of Net Assets) | 16.4% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio's center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio's share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (23% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Operating expenses reflect the Fund’s total annual operating expenses for the Service Class as of the Fund’s most current prospectus and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Shares of RVP’s Consultant and R Classes bear an annual distribution expense that is higher than that of the Service Class. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 27 |
MANAGER’S DISCUSSION | |
Royce 100 Fund |
Lauren Romeo, CFA Chuck Royce |
FUND PERFORMANCE Royce 100 Fund (“ROH”) was down 3.3% in 2014, underperforming its small-cap benchmark, the Russell 2000 Index, which gained 4.9% for the same period. A difficult year, 2014 began in far more promising fashion, as the year’s first six months were both placid and bullish, albeit in a low key way. The Fund was up 2.8% for the six-month period ended through June 30, 2014 compared to 3.2% for the small-cap index. The third quarter, however, saw increased volatility within small-cap and mostly staggering share prices. ROH lost a surprising 9.0% in the quarter while the Russell 2000 fell 7.4%. This was particularly discouraging because we expect our risk-conscious approach to weather such periods better than the index, as has usually been the case throughout the Fund’s more-than-10-year history. Compounding its difficulties, the Fund then failed to participate fully in the rally that enlivened much of the fourth quarter, climbing 3.4% versus 9.7% for the Russell 2000. For most of the year, then, the market did not reward the sort of high-quality companies that we seek for the portfolio. Many of the highest returns went instead to faster-growing, often unprofitable businesses. We were more encouraged by the Fund’s longer-term relative and absolute results. ROH outpaced the small-cap index for the 10-year and since inception (6/30/03) periods ended December 31, 2014. The Fund’s average annual total return since inception was 10.6%. WHAT WORKED... AND WHAT DIDN’T ROH’s eight equity sectors were split between four that showed net gains and four that sustained net losses. The largest negative impact came from the Industrials sector, home of 10 of the portfolio’s 20 largest detractors in 2014. The stock price of KBR fell throughout the year. During the first half, the company struggled with the cancellation of some engineering and construction projects and losses on a few others while also contending with pushed-out start dates for certain LNG (liquefied natural gas) ventures. Later in the year, the firm’s CEO unveiled a restructuring plan. While the plan showed promise, we chose to sell our shares in ROH’s portfolio and move on. We also chose to exit GrafTech International, which manufactures graphite and carbon material mostly for use in the steel industry. A series of earnings misses, mainly the result of graphite electrode order push outs and weakening international business, helped its shares to decline by more than 50% in the third quarter, eroding our confidence. The second-half collapse of oil prices caused an unfortunate reversal for many of our Energy holdings. The sector was ROH’s best performing group through the end of June only to finish the year with the portfolio’s second-largest net loss on a sector basis. Our Energy holdings were in the equipment & services industry (as opposed to those exclusively engaged in exploration and production), but these companies were not spared. Unit Corporation, the Fund’s eleventh-largest position at the end of the year, is a long-time holding involved in several energy businesses, including oil and natural gas exploration, oil and gas property acquisition, contract drilling services, and natural gas processing. Its ability to do each of these jobs well makes it something of an anomaly in an otherwise rigidly specialized industry. We built our position in the fourth quarter. The core business of Canadian oilfield service company Trican Well Service took us in the opposite direction. Differentiation has become increasingly difficult to establish in the field of hydraulic fracturing. This development, combined with the capital intensity of fracking fleets, leads both existing and potential customers to price aggressively in downturns in order to maintain fleet utilization, prompting us to sell our shares in ROH in December. |
Information Technology led those sectors posting net gains in 2014. Sapient Corporation is a marketing and consulting services firm whose acquisition by French advertising giant Publicis Groupe for a more than 40% premium was announced in November. Our take was that the move proved Sapient’s value and highlighted the increasing importance (and share gains) of digital marketing for more traditional advertising businesses. Marcus & Millichap is a national commercial real estate and financing brokerage firm. A market leader in the private segment of the investment sales market, it has double the market share of its nearest competitor but in our estimation has ample room to grow. Increased commercial real estate activity supplemented by the company’s national network and database of private real estate investors was a key driver of 2014 results. |
Top Contributors to Performance For 2014 (%)1 | ||
Sapient Corporation | 0.58 | |
Marcus & Millichap | 0.53 | |
ePlus | 0.48 | |
Core-Mark Holding Company | 0.45 | |
Liberty Tax | 0.43 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
Trican Well Service | -0.78 | |
Unit Corporation | -0.74 | |
KBR | -0.71 | |
GrafTech International | -0.65 | |
Destination Maternity | -0.53 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK Effective November 10, 2014, Lauren Romeo became the Fund’s lead portfolio manager. Chuck Royce manages the Fund with her. Ms. Romeo previously served as co-manager (2013-2014), portfolio manager (2010-2013), and assistant portfolio manager (2006-2010). Mr. Royce has managed the Fund since its inception. We are anticipating accelerated economic growth, with many holdings poised for margin expansion when revenue growth improves. While the near-term outlook for energy-related stocks is grim, we have confidence in the long-term prospects for our holdings in or close to that industry. We believe rising capital spending and signs of an upturn in non-residential construction should help many holdings in Industrials, ROH’s largest sector weighting at year end. We also believe that favorable secular spending trends in semiconductor capital equipment, factory automation, and telecom infrastructure should bode well for many tech-related positions. |
28 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYOHX ROHHX ROHRX ROHKX |
Performance and Expenses | ||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | SINCE INCEPTION (6/30/03) | |||||||
ROH | -5.88 | -3.26 | 12.18 | 10.49 | 8.48 | 10.58 | ||||||
Annual Operating Expenses: 1.51% | ||||||||||||
*Not Annualized |
Since Inception Through 12/31/14
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 100% of all 10-year periods; 77% of all 5-year periods; 67% of all 3-year periods; and 50% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 19/19 | 100% | 10.5 | 8.8 | |||||||
5-year | 61/79 | 77% | 8.3 | 5.8 | |||||||
3-year | 69/103 | 67% | 9.5 | 7.8 | |||||||
1-year | 63/127 | 50% | 12.2 | 10.9 | |||||||
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Invested On 6/30/03 as of 12/31/14 ($)
Top 10 Positions | ||
% of Net Assets | ||
Buckle (The) | 2.3 | |
ManpowerGroup | 2.1 | |
ePlus | 2.0 | |
Reliance Steel & Aluminum | 1.8 | |
MKS Instruments | 1.8 | |
CIRCOR International | 1.7 | |
Valmont Industries | 1.7 | |
Pason Systems | 1.7 | |
Applied Industrial Technologies | 1.6 | |
Bio-Techne | 1.6 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Industrials | 24.8 | |
Information Technology | 23.2 | |
Consumer Discretionary | 10.9 | |
Financials | 8.4 | |
Energy | 8.3 | |
Materials | 8.2 | |
Health Care | 5.7 | |
Consumer Staples | 1.1 | |
Miscellaneous | 4.6 | |
Cash and Cash Equivalents | 4.8 | |
Calendar Year Total Returns (%) | ||
YEAR | ROH | |
2014 | -3.3 | |
2013 | 30.9 | |
2012 | 11.5 | |
2011 | -6.5 | |
2010 | 24.8 | |
2009 | 38.0 | |
2008 | -29.2 | |
2007 | 7.3 | |
2006 | 13.7 | |
2005 | 14.9 | |
2004 | 27.2 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 101 | 96 | ||
From 6/30/03 (Start of Fund’s First Full Quarter) | 98 | 96 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $221 million | |
Number of Holdings | 94 | |
Turnover Rate | 39% | |
Average Market Capitalization1 | $1,707 million | |
Weighted Average P/E Ratio2,3 | 19.7x | |
Weighted Average P/B Ratio2 | 2.3x | |
Holdings ≥ 75% of Total Investments | 56 | |
Active Share4 | 96% | |
U.S. Investments (% of Net Assets) | 88.2% | |
Non-U.S. Investments (% of Net Assets) | 7.0% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (4% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Operating expenses reflect the Fund’s gross total annual operating expenses for the Service Class as of the Fund’s most current prospectus, and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Shares of ROH’s R Class bear an annual distribution expense that is higher than that of the Service Class. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 29 |
MANAGER’S DISCUSSION | |
Royce Dividend Value Fund |
Chuck Royce Jay Kaplan, CFA |
FUND PERFORMANCE It was not a successful year for our strategy of investing in conservatively capitalized, dividend paying micro-cap, small-cap, and mid-cap companies. Royce Dividend Value Fund (“RDV”) finished 2014 with a loss of 2.1%, significantly behind its small-cap benchmark, the Russell 2000 Index, which rose 4.9% for the same period. This was especially dispiriting in the context of a strong start to the year, a period of lower but positive returns for most equities following the sky-high returns of 2013. RDV finished the first half of the year just ahead of the small-cap benchmark, up 3.3% versus 3.2% for the Russell 2000. After eight consecutive positive quarters, the Russell 2000nished the third quarter in the red. The Fund followed suit, and both fell 7.4% for the quarter. This was something of a disappointment in that RDV has historically lost less than the small-cap index during most down phases, including short-term spans. Unfortunately, the Fund also could not match the fast pace established by the Russell 2000 for most of the year’s final quarter. The small-cap index finished the year with an impressive fourth-quarter gain of 9.7% while RDV mustered an advance of 2.3%. Three months, then, sealed a sizable annual advantage for the benchmark. We were more pleased with longer-term results. The Fund beat the Russell 2000 for the 10-year and since inception (5/3/04) periods ended December 31, 2014. RDV’s average annual total return since inception was 9.2%. WHAT WORKED... AND WHAT DIDN’T Of the four equity sectors that posted net losses in the portfolio for 2014, Energy led by a considerable margin, an unsurprising fact in light of the extraordinary decline in oil prices during the second half of the year. Taking our usual contrarian view, we are prepared to live with the negative short-term picture by holding most of our companies in the industry. We believe their long-term prospects will be effectively strengthened in an improved market for energy prices. Having higher operating costs often hurts offshore drillers earlier and harder when crude prices slip, which affected the performance of two companies in the portfolio. Based in Switzerland, Transocean is the world’s largest offshore driller. Its shares fell by nearly 60% in 2014 based on both the collapse of oil prices and an oversupplied ultra-deep water drilling market. Louisiana-based Tidewater provides marine service vessels to offshore energy companies. Its low-debt balance sheet and strong market position gave us confidence going forward. We thought that Nu Skin Enterprises managed its way well through a highly challenging year. It settled issues with the Chinese government by paying fines and improving training, restructured its debt, and positively reversed its cash flows. These positive developments notwithstanding, a rebound in the Chinese market probably needs to happen before its stock can really come back. We demonstrated our confidence in this eventually occurring by adding shares through most of 2014. The ongoing struggles of tween girl retailer Justice and plus-size women’s retailer Lane Bryant were major factors in depressing the shares of multiline fashion business Ascena Retail Group. We trimmed our stake in 2014. The ongoing strength of the U.S. dollar combined with the Fund’s sizable exposure to non-U.S. companies (more than 24% of net assets at the end of 2014) also created a drag on results, hurting the value of holdings headquartered abroad. |
Six equity sectors finished the year in the black, with the largest contribution coming from Financials. Three of RDV’s top four industry groups came from that sector—capital markets stocks, insurance companies, and real estate investment trusts (REITs). The last group, one of the strongest for small-caps in 2014, is not an area of primary investment focus, for us as we were significantly underweight REITs versus the Russell 2000. The Fund’s top performing stock was Cintas Corporation, which provides corporate identity uniforms and related business services. Stronger-than-expected earnings in its first and second fiscal quarters boosted its shares in the second half, when we took gains. Low debt and a solid dividend drew us to C.H. Robinson Worldwide, a third-party logistics company that provides freight transportation services and logistics solutions. Rising earnings drove interest in its stock and led us to reduce our position in November. Chemed Corporation runs hospice care provider Vitas and plumbing and drain cleaning service company Roto-Rooter. Its shares seemed to climb mostly as a result of a “no news is good news” scenario concerning Vitas. In 2013 the Justice Department began looking into its Medicare enrollment and billing rates. Offering more critical care than is typical in the hospice industry may have been a factor. However, margins for critical care are not much higher than for other elements of hospice care, and Vitas is one of the few delivering it on a nationwide basis. The absence of any additional developments in the investigation appeared to reassure investors. We reduced our position as its stock price rose. |
Top Contributors to Performance For 2014 (%)1 | ||
Cintas Corporation | 0.33 | |
C. H. Robinson Worldwide | 0.25 | |
Chemed Corporation | 0.24 | |
Coronation Fund Managers | 0.23 | |
Hormel Foods | 0.21 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
Transocean | -0.98 | |
Nu Skin Enterprises Cl. A | -0.51 | |
Ascena Retail Group | -0.39 | |
Tidewater | -0.34 | |
Reliance Steel & Aluminum | -0.29 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK We continue to focus on what we regard as well-run dividend-paying businesses. We have positioned the portfolio for improved performance from cyclical sectors in 2015, basing this decision on our confidence in both the ongoing expansion of the U.S. economy and an earnings-led rally for small-cap stocks. |
30 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYDVX RDVIX RDIIX RDVCX |
Performance and Expenses | ||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | SINCE INCEPTION (5/3/04) | |||||||
RDV | -5.31 | -2.14 | 14.38 | 13.19 | 8.47 | 9.17 | ||||||
Annual Operating Expenses: 1.52% | ||||||||||||
*Not Annualized |
Relative Returns: Monthly Rolling Average Annual Return Periods
On a monthly rolling basis, the fund outperformed the Russell 2000 in 100% of all 10-year periods; 84% of all 5-year periods; 74% of all 3-year period; and 59% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 8/8 | 100% | 9.6 | 8.5 | |||||||
5-year | 57/68 | 84% | 8.6 | 6.5 | |||||||
3-year | 68/92 | 74% | 8.6 | 7.0 | |||||||
1-year | 68/116 | 59% | 11.4 | 10.6 | |||||||
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Top 10 Positions | ||
% of Net Assets | ||
FLIR Systems | 1.6 | |
Reliance Steel & Aluminum | 1.6 | |
Expeditors International of Washington | 1.4 | |
Willis Group Holdings | 1.2 | |
Buckle (The) | 1.2 | |
Vishay Intertechnology | 1.2 | |
Reinsurance Group of America | 1.2 | |
Genesco | 1.1 | |
SEI Investments | 1.1 | |
KKR & Co. L.P. | 1.1 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Financials | 27.3 | |
Industrials | 19.2 | |
Materials | 14.2 | |
Information Technology | 12.8 | |
Consumer Discretionary | 10.5 | |
Energy | 3.8 | |
Health Care | 3.7 | |
Consumer Staples | 2.3 | |
Telecommunication Services | 1.0 | |
Utilities | 0.6 | |
Miscellaneous | 4.5 | |
Cash and Cash Equivalents | 0.1 | |
Calendar Year Total Returns (%) | ||
YEAR | RDV | |
2014 | -2.1 | |
2013 | 30.7 | |
2012 | 16.9 | |
2011 | -4.5 | |
2010 | 30.1 | |
2009 | 37.7 | |
2008 | -31.5 | |
2007 | -0.0 | |
2006 | 19.9 | |
2005 | 7.3 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 92 | 83 | ||
From 6/30/04 (Start of Fund’s | ||||
First Full Quarter) | 91 | 80 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $513 million | |
Number of Holdings | 267 | |
Turnover Rate | 22% | |
Average Market Capitalization1 | $2,989 million | |
Weighted Average P/E Ratio2,3 | 17.5x | |
Weighted Average P/B Ratio2 | 2.2x | |
Holdings ≥ 75% of Total Investments | 96 | |
Active Share4 | 96% | |
U.S. Investments (% of Net Assets) | 75.6% | |
Non-U.S. Investments (% of Net Assets) | 24.3% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (6% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Operating expenses reflect the Fund’s gross total annual operating expenses for the Service Class as of the Fund’s most current prospectus and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 31 |
MANAGERS’ DISCUSSION | |||
Royce Global Value Fund |
David Nadel Steven McBoyle, CPA, CA Dilip Badlani, CFA Jim Harvey, CFA |
FUND PERFORMANCE Royce Global Value Fund (“RGV”) fell 5.8% in 2014, trailing its benchmark, the Russell Global Small Cap Index, which lost 0.3% for the same period. The Fund’s difficulties on both a relative and absolute basis were entirely the result of a poor second half. The year began on a solidly bullish note. For the six-month period ended June 30, 2014, RGV rose 11.0% versus a 5.7% gain for the global small-cap index. During the first half the Fund benefited from a strengthening Europe and ongoing bullishness in the U.S., both of which were compensation for generally less robust Asian markets during the first few months of 2014. |
This positive picture began to shift in the third quarter. Stocks across the globe corrected (with the exception of U.S. large-caps), with European shares among the most adversely affected. The Fund lost 9.8% for the third quarter versus a loss of 6.7% for the Russell Global Small Cap. Portfolio holdings in the U.S., Canada, the United Kingdom, and Austria were the largest detractors from quarterly results. While we were not happy with the Fund’s results during the downdraft, we were pleased that at the end of the third quarter RGV remained ahead of its benchmark for the nine-month period ended September 30, 2014. Unfortunately, this advantage was lost in the fourth quarter, a period in which U.S. small-caps rallied off a mid-October low while many non-U.S. companies saw additional losses or treaded water. For the fourth quarter, the Fund was down 5.9% compared to a 1.1% increase for its global benchmark. As in the third quarter, holdings headquartered in Canada, the U.S., and the U.K. had the most significant negative impact. We were also not pleased with the Fund’s longer-term results, which were disappointing on both an absolute and relative basis. |
WHAT WORKED... AND WHAT DIDN’T |
Three of RGV’s eight equity sectors posted net gains in 2014, with Information Technology and Health Care making the largest net contribution. Myriad Genetics, the market share leader in molecular diagnostic testing for cancer, saw its shares decline materially in June 2013 when the U.S. Supreme Court held that human genes cannot be patented. We took advantage of this share price decline. The stock then returned to health in the first half of 2014, when it also acquired Crescendo Bioscience in a move that diversified Myriad’s already promising pipeline. In addition, MyRisk, its genetic panel test, showed promise. We reduced our position through much of the year as its valuation returned to more normalized levels. Indian specialty pipe and tube maker Maharashtra Seamless also did well after slumping in 2013 when the slow-growing Indian economy and ongoing pipe dumping depressed demand. India’s May elections gave a boost to the economy and markets. Oil pipeline replacements in certain areas are likely, as is nationwide pipe connectivity for natural gas, both of which would likely benefit Maharashtra. After taking gains earlier in the year, we sold the last of our shares in August as it rolled past our sell targets. |
Five equity sectors were in the red at the end of 2014. Financials detracted most, losing considerably more than the Fund’s other detractors—Materials, Consumer Staples, Energy, and Industrials. Real estate management & development stocks made the largest negative impact in both Financials and the portfolio as a whole. Three of RGV’s five biggest detracting companies also came from that sector. Brazil’s number one real-estate brokerage, Brasil Brokers Participacoes remained mired in a weak housing market. Disappointment from autumn’s election results exacerbated poor consumer sentiment and did little to revive Brazil’s stagnant economy, which also hurt. We sold our position in November. London-based Ashmore Group is among the world’s leading emerging markets asset management companies. Its shares were challenged by concerns about the debt cycle and worrisome news from Russia and other emerging markets in 2014. Earnings have been hurt, though revenues have remained mostly consistent. We liked its long-term prospects enough for it to be a top-10 holding at the end of the period. We had a similar level of confidence in the eventual recovery of the Fund’s largest position at year end, retailer New World Department Store China. We like how the company is positioned for a pick-up in the Chinese economy as well as its management and very generous dividend policy. The strength of the U.S. dollar was also a factor in the performance of non-U.S. holdings. |
Top Contributors to Performance For 2014 (%)1 | ||||
Myriad Genetics | 1.48 | |||
Maharashtra Seamless | 1.03 | |||
Western Digital | 0.68 | |||
Industrias Bachoco ADR | 0.54 | |||
Kennedy-Wilson Holdings | 0.46 | |||
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||||
Brasil Brokers Participacoes | -0.92 | |||
Ashmore Group | -0.84 | |||
New World Department Store China | -0.67 | |||
Nu Skin Enterprises Cl. A | -0.65 | |||
E-House (China) Holdings ADR | -0.59 | |||
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK Effective November 10, 2014, David Nadel became Lead Portfolio Manager of the Fund after having previously served as assistant portfolio manager (2013-2014) and co-manager (2009-2013). Steven G. McBoyle, James J. Harvey, and Dilip P. Badlani manage the Fund with him. Messrs. Nadel, Harvey, and Badlani are our most experienced international portfolio managers while Mr. McBoyle, who joined Royce in 2007, brings a disciplined business buyer’s, balance-sheet-centric approach to the portfolio, with particular attention to domestic holdings. At the end of 2014, RGV was overweight in cyclical sectors such as Consumer Discretionary and Industrials while it also had reasonable exposure to Financials and Information Technology. The former group was considerably underweight versus the benchmark. These weightings reflect our belief in the recovery of global economic growth. |
32 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RIVFX RGVIX RGVHX RGVRX RGVKX |
Performance and Expenses | ||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | SINCE INCEPTION ( 12/29/06 ) | ||||||||||
RGV | -15.13 | -5.76 | 3.60 | 4.17 | 3.95 | |||||||||
Annual Gross Operating Expenses: 1.84% | Annual Net Operating Expenses: 1.70% | |||||||||||||
*Not Annualized |
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Top 10 Positions | ||
% of Net Assets | ||
New World Department Store China | 2.4 | |
Mayr-Melnhof Karton | 2.0 | |
Television Broadcasts | 2.0 | |
Alten | 1.9 | |
Value Partners Group | 1.8 | |
Obara Group | 1.7 | |
Ashmore Group | 1.6 | |
Clarkson | 1.6 | |
Zuiko Corporation | 1.5 | |
Thor Industries | 1.5 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Consumer Discretionary | 23.9 | |
Industrials | 22.3 | |
Financials | 14.3 | |
Information Technology | 12.4 | |
Materials | 7.9 | |
Health Care | 5.3 | |
Energy | 3.7 | |
Consumer Staples | 2.9 | |
Cash and Cash Equivalents | 7.3 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
From 12/31/06 (Start of Fund’s | ||||
First Full Quarter) | 97 | 97 | ||
Calendar Year Total Returns (%) | ||||
YEAR | RGV | |||
2014 | -5.8 | |||
2013 | 6.3 | |||
2012 | 11.0 | |||
2011 | -18.7 | |||
2010 | 35.7 | |||
2009 | 61.9 | |||
2008 | -39.9 | |||
2007 | 14.3 | |||
Portfolio Country Breakdown1,2 | ||||
% of Net Assets | ||||
United States | 27.3 | |||
Japan | 13.2 | |||
United Kingdom | 8.3 | |||
Hong Kong | 8.3 | |||
Austria | 3.8 | |||
Canada | 3.6 | |||
Brazil | 3.5 | |||
1 | Represents countries that are 3% or more of net assets. |
2 | Securities are categorized by the country of their headquarters. |
Portfolio Diagnostics | ||
Fund Net Assets | $96 million | |
Number of Holdings | 126 | |
Turnover Rate | 54% | |
Average Market Capitalization1 | $1,675 million | |
Weighted Average P/E Ratio2,3 | 15.3x | |
Weighted Average P/B Ratio2 | 2.1x | |
Holdings ≥ 75% of Total Investments | 63 | |
Active Share4 | 98% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (4% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 2% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Price and total return information is based on net asset values calculated for shareholder transactions. Certain immaterial adjustments were made to the net assets of Royce Global Value Fund at 12/31/13 for financial reporting purposes, and as a result the net asset values for shareholder transactions on that date and the total returns based on those net asset values differ from the adjusted net asset values and total returns reported in the Financial Highlights. Gross operating expenses reflect gross total annual operating expenses for the Service Class and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Net operating expenses reflect contractual fee waivers and/or reimbursements. 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 to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding brokerage commissions, taxes, interest litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.69% through April 30, 2015. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell Global Small Cap). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 33 |
MANAGER’S DISCUSSION | |||
Royce International Smaller-Companies Fund |
David Nadel |
FUND PERFORMANCE Non-U.S. small-cap indexes trailed their domestic peers once again in 2014, and Royce International Smaller-Companies Fund (“RIS”) was unable to resist the trend. The Fund was down 7.3% in 2014 while its benchmark, the Russell Global ex-U.S. Small Cap Index, lost 3.6% for the same period. Although the Fund also trailed its benchmark in the first half of 2014, its results were both nicely positive and strong on an absolute basis. For the year-to-date period ended June 30, 2014, RIS advanced 6.6% versus 7.5% for the non-U.S. small-cap index. |
The Fund’s fortunes began to change when a downdraft hit small-caps across the globe. RIS fell 7.0% in the third quarter while the Russell Global ex-U.S. Small Cap declined 6.2%. All of the Fund’s nine equity sectors detracted from performance in the quarter, with Health Care, Industrials, and Materials registering the largest negative impact. At the country level, companies headquartered in France, the United Kingdom, and Japan were the biggest detractors in aggregate from third-quarter performance. |
While U.S. small-caps rallied in the fourth quarter, elsewhere in the world smaller companies in general managed only to lose less than they had in the third quarter. RIS was down 6.4% in the final quarter of 2014 compared to a 4.5% loss for the benchmark. Holdings in the U.K. and Japan were once again significant detractors, as were positions headquartered in Malaysia and Brazil. We remain disappointed with the Fund’s intermediate and long-term relative results. RIS outperformed the Russell Global ex-U.S. Small Cap for the since inception (6/30/08) period ended December 31, 2014. |
WHAT WORKED... AND WHAT DIDN’T |
For the calendar year, all but one of the Fund’s eight equity sectors were in the red. Consumer Discretionary made the largest negative impact by a good-sized margin, with Energy and Materials also posting sizable net losses. Industrials was RIS’s only sector to post net gains, in part due to the strong showing for the machinery industry. At the country level, India was the top contributor to returns for the year (as was the case in the semiannual period, when in May pro-business Bharatiya Janata Party candidate Narenda Modi was elected Prime Minister by a landslide victory). In fact, four of the Fund’s top-five contributors to 2014 performance were Indian companies, two of them machinery stocks. AIA Engineering manufactures chromium grinding balls used by the mining and cement industries. In May the firm reported an increase in after-tax profit year-over-year for its fiscal fourth quarter, leading us to take more gains as its stock advanced. A strong balance sheet and rising profits initially drew us to rolling-bearings manufacturer FAG Bearings India. We sold our shares between May and August as its stock price began to reach our sell target. Shriram Transport Finance is India’s leading lender to the used truck market and another beneficiary of the country’s improved business conditions. We took gains as its shares rose. Magellan Aerospace is an Ontario-based company that serves the civil aerospace and defense markets. Its shares benefited from a strong aerospace and defense capital spending cycle as well as weakness in the Canadian dollar, which significantly increased its competitiveness versus U.S. suppliers. We trimmed our stake in December, though it was a top-15 holding at the end of 2014. |
Globaltrans Investment GDR endured a difficult year, seeing further share price declines in the second half. The company is a leading private freight rail transportation group operating in Russia, the CIS (the Commonwealth of Independent States, including Ukraine), and the Baltics. Globaltrans lost about 70% of its value by year end, hurt by tensions in Ukraine and the weakening ruble. With more than 85% of freight transported by rail in Russia, we believe the company can improve its competitive position in the next couple of years. We like its corporate governance and constructive attitude towards capital allocation. EnQuest is a London-based oil and gas development and production company. A nearly 50% decline in oil prices in the second half keyed the company’s plummeting share price. Brasil Brokers Participacoes is one of Brazil’s two leading real estate brokerages. A weak real estate market and low consumer sentiment contributed to the company’s fading share price, which was also hampered by political uncertainty through the first nine months of the year. As we anticipated, the re-election of president Dilma Rousseff has not yet led to a more business-friendly environment in Brazil. We sold some shares in October and December. The strength of the U.S. dollar also played a role in the performance of non-U.S. holdings. |
Top Contributors to Performance For 2014 (%)1 | ||
AIA Engineering | 0.64 | |
Shriram Transport Finance | 0.60 | |
FAG Bearings India | 0.55 | |
Thomas Cook (India) | 0.53 | |
Magellan Aerospace | 0.46 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
Globaltrans Investment GDR | -0.98 | |
EnQuest | -0.67 | |
Brasil Brokers Participacoes | -0.62 | |
New World Department Store China | -0.56 | |
Société Internationale de Plantations d’Hévéas | -0.50 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK Though out of favor at the end of 2014, we continue to believe that the international small-cap market is home to many high-quality companies. We see the most potential for growth in developed nations such as Japan, the U.K., and France as well as in certain emerging markets such as India and Brazil. Our focus remains on some of the more economically sensitive areas of the market, such as Industrials and Consumer Discretionary, though RIS was also overweight in Health Care at year end. We have been populating the portfolio with companies that we believe can remain competitive in a highly challenging environment for non-U.S. small-cap stocks. |
34 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYGSX RISNX RISIX |
Performance and Expenses | ||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | SINCE INCEPTION (6/30/08) | ||||||
RIS | -13.02 | -7.29 | 7.66 | 5.10 | 4.69 | |||||
Annual Gross Operating Expenses: 2.08% | Annual Net Operating Expenses: 1.70% | |||||||||
*Not Annualized |
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Top 10 Positions | ||
% of Net Assets | ||
Semperit AG Holding | 1.8 | |
FamilyMart | 1.7 | |
Pico Far East Holdings | 1.6 | |
VZ Holding | 1.5 | |
Vetoquinol | 1.5 | |
CETIP - Mercados Organizados | 1.5 | |
Lundin Petroleum | 1.5 | |
Mayr-Melnhof Karton | 1.5 | |
Kennedy Wilson Europe Real Estate | 1.5 | |
E2V Technologies | 1.5 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Industrials | 22.3 | |
Consumer Discretionary | 21.3 | |
Financials | 16.5 | |
Health Care | 13.0 | |
Materials | 8.6 | |
Information Technology | 7.9 | |
Consumer Staples | 4.6 | |
Energy | 4.2 | |
Cash and Cash Equivalents | 1.6 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
From 6/30/08 (Start of Fund’s | ||||
First Full Quarter) | 96 | 89 | ||
Calendar Year Total Returns (%) | ||
YEAR | RIS | |
2014 | -7.3 | |
2013 | 12.7 | |
2012 | 19.4 | |
2011 | -18.7 | |
2010 | 26.5 | |
2009 | 50.3 | |
Portfolio Country Breakdown1,2 | ||
% of Net Assets | ||
Japan | 17.5 | |
United Kingdom | 9.9 | |
France | 8.8 | |
Hong Kong | 8.7 | |
India | 8.5 | |
Brazil | 6.9 | |
Switzerland | 4.1 | |
Germany | 3.6 | |
Austria | 3.2 | |
1 | Represents countries that are 3% or more of net assets. |
2 | Securities are categorized by the country of their headquarters. |
Portfolio Diagnostics | ||
Fund Net Assets | $33 million | |
Number of Holdings | 95 | |
Turnover Rate | 78% | |
Average Market Capitalization1 | $946 million | |
Weighted Average P/E Ratio2,3 | 14.4x | |
Weighted Average P/B Ratio2 | 1.8x | |
Holdings ≥ 75% of Total Investments | 59 | |
Active Share4 | 99% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (3% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 2% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Gross operating expenses reflect total gross annual operating expenses and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by any applicable Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive its fees and/or reimburse operating expenses to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding brokerage commissions, taxes, interest litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.69% through April 30, 2015 and at or below 1.99% through April 30, 2024. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell Global ex-U.S. Small Cap). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 35 |
MANAGER’S DISCUSSION | |||
Royce Special Equity Multi-Cap Fund |
Charlie Dreifus, CFA |
FUND PERFORMANCE While Royce Special Equity Multi-Cap Fund (“RSM”) did well on an absolute basis in 2014, its relative results were slightly disappointing. The Fund gained 9.3% for the calendar year, underperforming its benchmark, the Russell 1000 Index, which advanced 13.2% for the same period. A relatively slow, though still bullish, start to 2014 saw RSM lose some ground to its benchmark early in the year. In the first half, the Fund advanced 5.3% versus a 7.3% increase for the Russell 1000 when overall market leadership remained with lower-quality stocks. Large-cap performance was in general more consistent during these first six months and did not correct as small-caps did from early March through mid-May. |
Compared to their smaller siblings, which corrected between July 3 and October 13, large-cap companies were even more stable in the third quarter. For that period, RSM posted a small loss, down 0.4%, while the Russell 1000 managed a slight gain, up 0.7%. Equities were more in line as the year approached its end. For large- and small-cap stocks alike, the fourth quarter was a more dynamic period, one in which both the Fund and its benchmark did well. RSM gained 4.2% in the last quarter of 2014 while the Russell 1000 climbed 4.9%. Keeping in mind our disciplined, scrutinous, and quality-centric approach, the Fund’s calendar-year results were not surprising. Through much of the year the market continued to favor companies without earnings or dividends and with low returns on equity and high betas. These types of businesses simply do not meet our exacting selection standards. Although the Fund underperformed its benchmark for the three-year period ended December 31, 2014 (+18.5% versus +20.6%), we remained pleased with RSM’s longer-term results. The Fund was even with the Russell 1000 for the since inception (12/31/10) period ended December 31, 2014. RSM’s average annual total return since inception was 15.5%. |
WHAT WORKED... AND WHAT DIDN’T Only two of the Fund’s equity sectors—Industrials and Energy—finished the year with net losses. Their negative impact was comparatively modest, however, especially compared to the outsized contribution that came from the Information Technology sector, which more than doubled the net gains from the Fund’s second-best-performing group, Consumer Discretionary. The Health Care sector also made a strong contribution to 2014’s returns, and Financials posted a small net gain. RSM’s top three performing industries came from Information Technology—software companies, semiconductors & semiconductor equipment stocks, and technology hardware storage & peripherals. We had success with multiline retail, the home of Nordstrom, which was the portfolio’s top performer and second-largest holding at the end of the year. The health care equipment & supplies and health care providers & services industries also made solid contributions. The latter was dominated by a terrific performance from diagnostic testing, information, and services company, Quest Diagnostics. Two technology businesses rounded out the list of top contributors, Microsoft Corporation and KLA-Tencor, which makes yield management and process monitoring systems for the semiconductor industry. Hurt by poor sales, office products retailer Staples was a large detractor through most of 2014, which influenced the decision to sell our shares during the third quarter. |
Top Contributors to Performance For 2014 (%)1 | ||
Nordstrom | 1.56 | |
Microsoft Corporation | 1.28 | |
KLA-Tencor | 1.20 | |
Quest Diagnostics | 1.15 | |
Cisco Systems | 1.13 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
Staples | -0.83 | |
Fluor Corporation | -0.59 | |
Helmerich & Payne | -0.51 | |
Emerson Electric | -0.50 | |
ManpowerGroup | -0.43 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK Effective on August 1, 2014, the Fund is a “non-diversified” fund within the meaning of the Investment Company Act of 1940. This means that it may invest a larger percentage of its assets in a single issuer or in a smaller number of issuers than a “diversified” fund. As of December 31, 2014, the Fund held 25 equity positions. |
The combination of slower growth in healthcare costs on top of lower energy prices is striking—a decade ago, energy and healthcare costs were consuming nearly all of the gains in consumer discretionary income. We believe it is possible, even likely, that profit margins will expand rather than contract, as most expect. We still believe that more merger and acquisition activity is ahead and that our portfolio should receive its share and then some in light of both our methodology and the attractiveness of the issues. The forces behind more M&A activity include record-low interest rates, little other cost cutting opportunities, many companies being over capitalized (some with sizeable cash balances), activist investing putting deals into play, and the fact that acquiring companies shares have been advancing immediately of late. |
Market correlation continues to fall, which suggests that the value of stock picking will continue to increase in importance. Inflows into equities (beyond what has been seen recently from individual investors) will likely be funded by the well above historical allocations in bond funds. This could accelerate if yields rise and bond prices fall. The more concerned about the market one is, the more we think quality companies—those with high returns on equity, low debt, and stable earnings—make sense. |
36 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RSEMX RSMCX RMUIX RSMLX |
Performance and Expenses | ||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||
JUL-DEC 2014* | 1-YR | 3-YR | SINCE INCEPTION (12/31/10) | |||||
RSM | 3.73 | 9.28 | 18.46 | 15.53 | ||||
Annual Gross Operating Expenses: 1.46% | Annual Net Operating Expenses: 1.24% | |||||||
*Not Annualized |
Relative Returns: Monthly Rolling Average Annual Return Periods
Since Inception Through 12/31/14
On a monthly rolling basis, the Fund outperformed the Russell 1000 in 62% of all 3-year periods; and 49% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
3-year | 8/13 | 62% | 17.2 | 17.5 | |||||||
1-year | 18/37 | 49% | 17.2 | 17.4 | |||||||
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 120 for additional information. |
Value of $10,000
Top 10 Positions | ||
% of Net Assets | ||
Bed Bath & Beyond | 6.1 | |
Nordstrom | 5.5 | |
Lear Corporation | 5.2 | |
Emerson Electric | 5.1 | |
Quest Diagnostics | 4.8 | |
Cisco Systems | 4.7 | |
Gap (The) | 4.6 | |
Franklin Resources | 4.6 | |
Microsoft Corporation | 4.5 | |
Helmerich & Payne | 4.2 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Consumer Discretionary | 30.8 | |
Industrials | 19.6 | |
Information Technology | 19.6 | |
Financials | 8.6 | |
Energy | 8.0 | |
Health Care | 4.8 | |
Cash and Cash Equivalents | 8.6 | |
Calendar Year Total Returns (%) | ||
YEAR | RSM | |
2014 | 9.3 | |
2013 | 36.3 | |
2012 | 11.6 | |
2011 | 7.2 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
From 12/31/10 (Start of Fund’s First Full Quarter) | 95 | 82 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $304 million | |
Number of Holdings | 25 | |
Turnover Rate | 39% | |
Average Market Capitalization1 | $27,015 million | |
Weighted Average P/E Ratio2,3 | 16.3x | |
Weighted Average P/B Ratio2 | 3.1x | |
Holdings ≥ 75% of Total Investments | 16 | |
Active Share4 | 91% | |
U.S. Investments (% of Net Assets) | 91.4% | |
Non-U.S. Investments (% of Net Assets) | 0.0% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (0% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Gross operating expenses reflect gross total annual operating expenses for the Service Class and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Net operating expenses reflect contractual fee waivers and/or reimbursements. 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 to the extent necessary to maintain the Service Classes’s net annual operating expenses, (excluding brokerage commissions, taxes, interest litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.24% through April 30, 2015. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 1000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 37 |
Schedules of Investments
Royce Pennsylvania Mutual Fund | ||||||
Common Stocks – 98.9% | ||||||
SHARES | VALUE | |||||
CONSUMER DISCRETIONARY – 15.3% | ||||||
AUTO COMPONENTS - 2.0% | ||||||
BorgWarner | 7,000 | $ | 384,650 | |||
Dorman Products 1 | 410,021 | 19,791,714 | ||||
Drew Industries 1 | 690,183 | 35,247,646 | ||||
Gentex Corporation | 697,222 | 25,190,631 | ||||
Standard Motor Products | 113,343 | 4,320,635 | ||||
STRATTEC SECURITY 2 | 263,950 | 21,796,991 | ||||
Superior Industries International | 488,000 | 9,657,520 | ||||
116,389,787 | ||||||
AUTOMOBILES - 1.1% | ||||||
Thor Industries | 812,450 | 45,391,582 | ||||
Winnebago Industries | 890,000 | 19,366,400 | ||||
64,757,982 | ||||||
DISTRIBUTORS - 1.1% | ||||||
Core-Mark Holding Company | 620,925 | 38,453,885 | ||||
Pool Corporation | 111,700 | 7,086,248 | ||||
Weyco Group 2 | 590,500 | 17,520,135 | ||||
63,060,268 | ||||||
DIVERSIFIED CONSUMER SERVICES - 0.7% | ||||||
American Public Education 1 | 85,500 | 3,152,385 | ||||
200,000 | 1,382,000 | |||||
Sotheby’s | 705,500 | 30,463,490 | ||||
Universal Technical Institute | 753,700 | 7,416,408 | ||||
42,414,283 | ||||||
HOUSEHOLD DURABLES - 1.5% | ||||||
Ethan Allen Interiors | 1,131,088 | 35,029,795 | ||||
Garmin | 18,100 | 956,223 | ||||
La-Z-Boy | 482,600 | 12,952,984 | ||||
Mohawk Industries 1 | 2,300 | 357,328 | ||||
NVR 1 | 26,659 | 33,999,023 | ||||
83,295,353 | ||||||
INTERNET & CATALOG RETAIL - 0.1% | ||||||
FTD Companies 1 | 237,760 | 8,278,803 | ||||
LEISURE PRODUCTS - 0.3% | ||||||
Arctic Cat | 103,200 | 3,663,600 | ||||
Nautilus 1 | 532,500 | 8,083,350 | ||||
245,800 | 2,327,726 | |||||
14,074,676 | ||||||
MEDIA - 1.6% | ||||||
311,654 | 6,959,234 | |||||
E.W. Scripps Company Cl. A 1 | 190,100 | 4,248,735 | ||||
Harte-Hanks | 234,640 | 1,816,114 | ||||
Morningstar | 442,400 | 28,627,704 | ||||
Rentrak Corporation 1 | 265,065 | 19,302,033 | ||||
Saga Communications Cl. A | 168,600 | 7,330,728 | ||||
Scholastic Corporation | 50,000 | 1,821,000 | ||||
Wiley (John) & Sons Cl. A | 375,593 | 22,250,129 | ||||
92,355,677 | ||||||
MULTILINE RETAIL - 0.2% | ||||||
Dollar Tree 1 | 11,200 | 788,256 | ||||
402,633 | 8,737,136 | |||||
9,525,392 | ||||||
SPECIALTY RETAIL - 5.5% | ||||||
Advance Auto Parts | 3,600 | 573,408 | ||||
American Eagle Outfitters | 1,026,791 | 14,251,859 | ||||
500,900 | 26,738,042 | |||||
Ascena Retail Group 1 | 1,866,367 | 23,441,570 | ||||
Buckle (The) | 909,583 | 47,771,299 | ||||
Cato Corporation (The) Cl. A | 639,896 | 26,990,813 | ||||
Destination Maternity | 648,466 | 10,343,033 | ||||
DSW Cl. A | 509,200 | 18,993,160 | ||||
Finish Line (The) Cl. A | 191,000 | 4,643,210 | ||||
GameStop Corporation Cl. A 3 | 659,400 | 22,287,720 | ||||
Genesco 1 | 624,333 | 47,836,394 | ||||
Monro Muffler Brake | 342,900 | 19,819,620 | ||||
Penske Automotive Group | 194,600 | 9,549,022 | ||||
Ross Stores | 2,600 | 245,076 | ||||
Shoe Carnival | 821,381 | 21,101,278 | ||||
Stein Mart | 1,414,642 | 20,682,066 | ||||
315,267,570 | ||||||
TEXTILES, APPAREL & LUXURY GOODS - 1.2% | ||||||
G-III Apparel Group 1 | 96,231 | 9,720,293 | ||||
Gildan Activewear | 8,800 | 497,640 | ||||
Movado Group | 599,236 | 17,000,325 | ||||
Steven Madden 1 | 753,047 | 23,969,486 | ||||
Vera Bradley 1 | 91,180 | 1,858,249 | ||||
Wolverine World Wide | 500,200 | 14,740,894 | ||||
67,786,887 | ||||||
Total (Cost $537,145,959) | 877,206,678 | |||||
CONSUMER STAPLES – 2.2% | ||||||
FOOD & STAPLES RETAILING - 0.1% | ||||||
Village Super Market Cl. A | 181,297 | 4,962,099 | ||||
FOOD PRODUCTS - 0.8% | ||||||
Cal-Maine Foods | 221,040 | 8,627,191 | ||||
Farmer Bros. 1 | 53,177 | 1,566,063 | ||||
Industrias Bachoco ADR 1 | 104,111 | 5,193,057 | ||||
Sanderson Farms | 331,800 | 27,879,495 | ||||
Seneca Foods Cl. A 1 | 131,589 | 3,556,851 | ||||
Seneca Foods Cl. B 1 | 7,197 | 231,743 | ||||
SunOpta 1 | 96,319 | 1,141,380 | ||||
48,195,780 | ||||||
HOUSEHOLD PRODUCTS - 0.3% | ||||||
Harbinger Group 1 | 1,009,600 | 14,295,936 | ||||
PERSONAL PRODUCTS - 1.0% | ||||||
Inter Parfums | 547,000 | 15,015,150 | ||||
Nu Skin Enterprises Cl. A | 784,545 | 34,284,616 | ||||
Nutraceutical International 1 | 312,500 | 6,737,500 | ||||
56,037,266 | ||||||
Total (Cost $95,785,410) | 123,491,081 | |||||
ENERGY – 5.7% | ||||||
ENERGY EQUIPMENT & SERVICES - 5.5% | ||||||
Atwood Oceanics 1 | 630,521 | 17,887,881 | ||||
CARBO Ceramics | 169,000 | 6,768,450 | ||||
Ensign Energy Services | 1,710,100 | 15,013,789 | ||||
Era Group 1 | 721,840 | 15,266,916 | ||||
Exterran Holdings | 745,500 | 24,288,390 | ||||
Helmerich & Payne | 327,810 | 22,100,950 | ||||
ION Geophysical 1 | 716,700 | 1,970,925 | ||||
Matrix Service 1 | 511,275 | 11,411,658 | ||||
Newpark Resources 1 | 98,900 | 943,506 | ||||
Oceaneering International | 2,300 | 135,263 | ||||
Oil States International 1 | 579,584 | 28,341,657 | ||||
Pason Systems | 2,054,900 | 38,717,302 | ||||
RPC | 1,280,475 | 16,697,394 | ||||
SEACOR Holdings 1 | 529,842 | 39,107,638 |
38 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Pennsylvania Mutual Fund (continued) | ||||||
SHARES | VALUE | |||||
ENERGY (continued) | ||||||
ENERGY EQUIPMENT & SERVICES (continued) | ||||||
TGS-NOPEC Geophysical | 665,315 | $ | 14,394,982 | |||
Tidewater | 581,314 | 18,840,387 | ||||
Total Energy Services | 226,400 | 2,529,413 | ||||
Trican Well Service | 1,283,200 | 6,152,026 | ||||
Unit Corporation 1 | 988,929 | 33,722,479 | ||||
314,291,006 | ||||||
OIL, GAS & CONSUMABLE FUELS - 0.2% | ||||||
Cimarex Energy | 61,200 | 6,487,200 | ||||
Sprott Resource 1 | 2,688,200 | 4,349,988 | ||||
World Fuel Services | 12,300 | 577,239 | ||||
WPX Energy 1 | 66,000 | 767,580 | ||||
12,182,007 | ||||||
Total (Cost $272,372,030) | 326,473,013 | |||||
FINANCIALS – 11.3% | ||||||
BANKS - 0.5% | ||||||
Ames National | 14,900 | 386,506 | ||||
Camden National | 154,788 | 6,166,754 | ||||
City Holding Company | 229,470 | 10,677,239 | ||||
First Citizens BancShares Cl. A | 58,526 | 14,794,788 | ||||
32,025,287 | ||||||
CAPITAL MARKETS - 4.2% | ||||||
AllianceBernstein Holding L.P. | 1,258,960 | 32,518,937 | ||||
Artisan Partners Asset Management Cl. A | 97,450 | 4,924,148 | ||||
ASA Gold and Precious Metals | 98,100 | 991,791 | ||||
Cowen Group 1 | 2,152,377 | 10,331,410 | ||||
Diamond Hill Investment Group | 161,817 | 22,337,219 | ||||
Federated Investors Cl. B | 1,247,282 | 41,072,996 | ||||
Financial Engines | 45,000 | 1,644,750 | ||||
GFI Group | 424,000 | 2,310,800 | ||||
INTL FCStone 1 | 61,217 | 1,259,234 | ||||
Lazard Cl. A | 340,127 | 17,016,554 | ||||
Manning & Napier Cl. A | 677,292 | 9,360,175 | ||||
†Medley Management Cl. A | 177,300 | 2,606,310 | ||||
Paris Orleans | 178,346 | 3,837,672 | ||||
Reinet Investments | 238,550 | 5,108,718 | ||||
Reinet Investments DR | 1,300,000 | 2,835,280 | ||||
SEI Investments | 977,965 | 39,157,719 | ||||
Sprott | 4,275,100 | 8,978,519 | ||||
Stifel Financial 1 | 52,600 | 2,683,652 | ||||
Waddell & Reed Financial Cl. A | 83,300 | 4,150,006 | ||||
Westwood Holdings Group | 405,035 | 25,039,264 | ||||
WisdomTree Investments | 180,000 | 2,821,500 | ||||
240,986,654 | ||||||
DIVERSIFIED FINANCIAL SERVICES - 1.1% | ||||||
Bolsa Mexicana de Valores | 7,740,000 | 14,017,643 | ||||
1,319,011 | 24,863,357 | |||||
Sofina | 209,000 | 21,968,086 | ||||
60,849,086 | ||||||
INSURANCE - 3.5% | ||||||
Alleghany Corporation 1 | 10,220 | 4,736,970 | ||||
Allied World Assurance Company Holdings | 258,358 | 9,796,935 | ||||
Aspen Insurance Holdings | 141,655 | 6,200,239 | ||||
E-L Financial | 59,500 | 34,978,912 | ||||
Erie Indemnity Cl. A | 164,300 | 14,913,511 | ||||
Greenlight Capital Re Cl. A 1 | 1,156,104 | 37,746,796 | ||||
MBIA 1 | 2,265,177 | 21,609,789 | ||||
PartnerRe | 150,581 | 17,185,809 | ||||
ProAssurance Corporation | 70,400 | 3,178,560 | ||||
Reinsurance Group of America | 299,521 | 26,244,030 | ||||
RLI Corp. | 380,681 | 18,805,641 | ||||
Validus Holdings | 92,460 | 3,842,638 | ||||
199,239,830 | ||||||
INVESTMENT COMPANIES - 0.4% | ||||||
British Empire Securities and General Trust | 183,727 | 1,467,023 | ||||
RIT Capital Partners | 1,042,300 | 22,693,274 | ||||
24,160,297 | ||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.8% | ||||||
AV Homes 1 | 45,500 | 662,935 | ||||
Jones Lang LaSalle | 114,300 | 17,136,999 | ||||
Kennedy-Wilson Holdings | 309,100 | 7,820,230 | ||||
105,000 | 1,930,950 | |||||
Tejon Ranch 1 | 575,046 | 16,940,855 | ||||
44,491,969 | ||||||
THRIFTS & MORTGAGE FINANCE - 0.8% | ||||||
Genworth MI Canada | 934,377 | 29,741,145 | ||||
TrustCo Bank Corp. NY | 2,175,051 | 15,790,870 | ||||
45,532,015 | ||||||
Total (Cost $515,005,451) | 647,285,138 | |||||
HEALTH CARE – 5.1% | ||||||
BIOTECHNOLOGY - 0.3% | ||||||
121,250 | 832,987 | |||||
1,522,400 | 1,385,232 | |||||
Myriad Genetics 1 | 419,100 | 14,274,546 | ||||
16,492,765 | ||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 1.6% | ||||||
Analogic Corporation | 251,100 | 21,245,571 | ||||
Atrion Corporation | 5,603 | 1,905,076 | ||||
DENTSPLY International | 10,100 | 538,027 | ||||
IDEXX Laboratories 1 | 158,000 | 23,426,660 | ||||
Invacare Corporation | 118,100 | 1,979,356 | ||||
Meridian Bioscience | 107,100 | 1,762,866 | ||||
Merit Medical Systems 1 | 534,586 | 9,264,375 | ||||
STERIS Corporation | 347,800 | 22,554,830 | ||||
SurModics 1 | 346,900 | 7,666,490 | ||||
Trinity Biotech ADR Cl. A | 72,600 | 1,271,226 | ||||
91,614,477 | ||||||
HEALTH CARE PROVIDERS & SERVICES - 1.3% | ||||||
24,100 | 774,333 | |||||
Chemed Corporation | 51,948 | 5,489,345 | ||||
HealthSouth Corporation | 756,513 | 29,095,490 | ||||
Landauer | 456,500 | 15,584,910 | ||||
MEDNAX 1 | 70,084 | 4,633,253 | ||||
U.S. Physical Therapy | 445,054 | 18,674,466 | ||||
74,251,797 | ||||||
LIFE SCIENCES TOOLS & SERVICES - 1.6% | ||||||
Bio-Rad Laboratories Cl. A 1 | 78,332 | 9,443,706 | ||||
Bio-Techne | 342,080 | 31,608,192 | ||||
ICON 1 | 210,200 | 10,718,098 | ||||
Mettler-Toledo International 1 | 87,100 | 26,344,266 | ||||
PAREXEL International 1 | 270,000 | 15,001,200 | ||||
93,115,462 | ||||||
PHARMACEUTICALS - 0.3% | ||||||
Lannett Company 1 | 147,460 | 6,323,085 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 39 |
Schedules of Investments
Royce Pennsylvania Mutual Fund (continued) | ||||||
SHARES | VALUE | |||||
HEALTH CARE (continued) | ||||||
PHARMACEUTICALS (continued) | ||||||
Medicines Company (The) 1 | 313,722 | $ | 8,680,688 | |||
15,003,773 | ||||||
Total (Cost $182,489,659) | 290,478,274 | |||||
INDUSTRIALS – 25.5% | ||||||
AEROSPACE & DEFENSE - 1.6% | ||||||
Astronics Corporation 1 | 10,120 | 559,737 | ||||
Curtiss-Wright | 264,320 | 18,658,349 | ||||
HEICO Corporation | 667,635 | 40,325,154 | ||||
HEICO Corporation Cl. A | 180,440 | 8,545,638 | ||||
Kratos Defense & Security Solutions 1 | 95,578 | 479,802 | ||||
Teledyne Technologies 1 | 253,800 | 26,075,412 | ||||
94,644,092 | ||||||
AIR FREIGHT & LOGISTICS - 1.9% | ||||||
Echo Global Logistics 1 | 316,904 | 9,253,597 | ||||
Forward Air | 829,000 | 41,756,730 | ||||
Hub Group Cl. A 1 | 247,500 | 9,424,800 | ||||
UTi Worldwide 1 | 3,213,600 | 38,788,152 | ||||
287,292 | 11,744,497 | |||||
110,967,776 | ||||||
BUILDING PRODUCTS - 1.7% | ||||||
AAON | 1,428,262 | 31,978,786 | ||||
American Woodmark 1 | 410,774 | 16,611,701 | ||||
Gibraltar Industries 1 | 615,120 | 10,001,851 | ||||
Insteel Industries | 308,567 | 7,276,010 | ||||
Simpson Manufacturing | 904,300 | 31,288,780 | ||||
97,157,128 | ||||||
COMMERCIAL SERVICES & SUPPLIES - 2.8% | ||||||
Copart 1 | 1,184,352 | 43,217,005 | ||||
Healthcare Services Group | 677,275 | 20,948,116 | ||||
Heritage-Crystal Clean 1 | 257,656 | 3,176,898 | ||||
Ritchie Bros. Auctioneers | 1,922,370 | 51,692,529 | ||||
Team 1 | 551,898 | 22,329,793 | ||||
UniFirst Corporation | 106,526 | 12,937,583 | ||||
US Ecology | 100,000 | 4,012,000 | ||||
158,313,924 | ||||||
CONSTRUCTION & ENGINEERING - 1.4% | ||||||
Chicago Bridge & Iron | 22,056 | 925,911 | ||||
Comfort Systems USA | 553,491 | 9,475,766 | ||||
EMCOR Group | 617,400 | 27,468,126 | ||||
Jacobs Engineering Group 1 | 49,000 | 2,189,810 | ||||
KBR | 1,556,472 | 26,382,200 | ||||
MYR Group 1 | 503,843 | 13,805,298 | ||||
80,247,111 | ||||||
ELECTRICAL EQUIPMENT - 2.3% | ||||||
AZZ | 215,958 | 10,132,749 | ||||
Encore Wire | 295,479 | 11,030,231 | ||||
EnerSys | 100,430 | 6,198,540 | ||||
Franklin Electric | 789,200 | 29,618,676 | ||||
Global Power Equipment Group | 638,185 | 8,813,335 | ||||
GrafTech International 1 | 5,171,169 | 26,166,115 | ||||
Powell Industries | 364,600 | 17,890,922 | ||||
Preformed Line Products 2 | 352,478 | 19,255,873 | ||||
129,106,441 | ||||||
INDUSTRIAL CONGLOMERATES - 0.4% | ||||||
Carlisle Companies | 34,115 | 3,078,538 | ||||
Raven Industries | 833,570 | 20,839,250 | ||||
23,917,788 | ||||||
MACHINERY - 8.1% | ||||||
AGCO Corporation | 3,600 | 162,720 | ||||
Alamo Group | 242,426 | 11,743,116 | ||||
Chart Industries 1 | 46,000 | 1,573,200 | ||||
CIRCOR International | 537,397 | 32,394,291 | ||||
CLARCOR | 465,700 | 31,034,248 | ||||
Columbus McKinnon | 126,779 | 3,554,883 | ||||
Donaldson Company | 616,500 | 23,815,395 | ||||
Federal Signal | 85,300 | 1,317,032 | ||||
Foster (L.B.) Company | 191,898 | 9,320,486 | ||||
Gorman-Rupp Company (The) | 62,166 | 1,996,772 | ||||
Graco | 371,449 | 29,782,781 | ||||
Graham Corporation | 41,098 | 1,182,390 | ||||
IDEX Corporation | 30,000 | 2,335,200 | ||||
John Bean Technologies | 943,513 | 31,003,837 | ||||
Kadant | 54,300 | 2,318,067 | ||||
Kennametal | 919,933 | 32,924,402 | ||||
Lincoln Electric Holdings | 372,160 | 25,712,534 | ||||
Lindsay Corporation | 158,000 | 13,546,920 | ||||
Lydall 1 | 46,220 | 1,516,940 | ||||
Miller Industries | 211,225 | 4,391,368 | ||||
Mueller Industries | 50,500 | 1,724,070 | ||||
Mueller Water Products Cl. A | 38,300 | 392,192 | ||||
Nordson Corporation | 284,600 | 22,187,416 | ||||
RBC Bearings | 645,100 | 41,628,303 | ||||
Semperit AG Holding | 39,897 | 1,930,619 | ||||
Sun Hydraulics | 646,210 | 25,447,750 | ||||
Tennant Company | 525,000 | 37,889,250 | ||||
Timken Company (The) | 50,880 | 2,171,558 | ||||
Valmont Industries | 298,265 | 37,879,655 | ||||
Wabtec Corporation | 356,587 | 30,983,845 | ||||
463,861,240 | ||||||
PROFESSIONAL SERVICES - 2.3% | ||||||
Acacia Research | 158,100 | 2,678,214 | ||||
Advisory Board (The) 1 | 665,923 | 32,616,909 | ||||
Corporate Executive Board | 95,600 | 6,933,868 | ||||
CRA International 1 | 363,851 | 11,031,962 | ||||
Exponent | 269,639 | 22,245,217 | ||||
Franklin Covey 1 | 121,200 | 2,346,432 | ||||
ICF International 1 | 149,860 | 6,141,263 | ||||
ManpowerGroup | 355,705 | 24,248,410 | ||||
Robert Half International | 106,090 | 6,193,534 | ||||
RPX Corporation 1 | 316,100 | 4,355,858 | ||||
Towers Watson & Co. Cl. A | 64,100 | 7,254,197 | ||||
TrueBlue 1 | 229,200 | 5,099,700 | ||||
131,145,564 | ||||||
ROAD & RAIL - 1.3% | ||||||
FRP Holdings 1 | 254,400 | 9,975,024 | ||||
Knight Transportation | 42,483 | 1,429,978 | ||||
Landstar System | 522,700 | 37,911,431 | ||||
Universal Truckload Services | 810,784 | 23,115,452 | ||||
72,431,885 | ||||||
TRADING COMPANIES & DISTRIBUTORS - 1.4% | ||||||
Aceto Corporation | 481,700 | 10,452,890 | ||||
Air Lease Cl. A | 26,000 | 892,060 | ||||
Applied Industrial Technologies | 908,493 | 41,418,196 | ||||
MSC Industrial Direct Cl. A | 354,630 | 28,813,687 | ||||
81,576,833 | ||||||
40 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Pennsylvania Mutual Fund (continued) | ||||||
SHARES | VALUE | |||||
INDUSTRIALS (continued) | ||||||
TRANSPORTATION INFRASTRUCTURE - 0.3% | ||||||
Wesco Aircraft Holdings 1 | 1,191,187 | $ | 16,652,794 | |||
Total (Cost $838,325,473) | 1,460,022,576 | |||||
INFORMATION TECHNOLOGY – 21.9% | ||||||
COMMUNICATIONS EQUIPMENT - 2.2% | ||||||
ADTRAN | 1,304,995 | 28,448,891 | ||||
Brocade Communications Systems | 2,148,519 | 25,438,465 | ||||
77,000 | 1,409,100 | |||||
Digi International 1 | 388,644 | 3,610,503 | ||||
74,000 | 1,436,340 | |||||
NETGEAR 1 | 1,129,918 | 40,202,482 | ||||
Plantronics | 306,802 | 16,266,642 | ||||
Polycom 1 | 165,000 | 2,227,500 | ||||
TESSCO Technologies | 248,981 | 7,220,449 | ||||
126,260,372 | ||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 10.8% | ||||||
Anixter International 1 | 203,000 | 17,957,380 | ||||
Avnet | 8,300 | 357,066 | ||||
AVX Corporation | 1,448,321 | 20,276,494 | ||||
Badger Meter | 273,514 | 16,233,056 | ||||
Benchmark Electronics 1 | 1,239,795 | 31,540,385 | ||||
Cognex Corporation 1 | 611,790 | 25,285,281 | ||||
Coherent 1 | 659,630 | 40,052,733 | ||||
Dolby Laboratories Cl. A | 494,446 | 21,320,511 | ||||
1,007,929 | 30,993,817 | |||||
1,790,355 | 31,760,898 | |||||
FARO Technologies 1 | 378,900 | 23,749,452 | ||||
FLIR Systems | 954,000 | 30,823,740 | ||||
Hollysys Automation Technologies 1 | 389,600 | 9,517,928 | ||||
II-VI 1 | 5,300 | 72,345 | ||||
IPG Photonics 1 | 411,115 | 30,800,736 | ||||
681,935 | 5,414,564 | |||||
Methode Electronics | 469,350 | 17,135,968 | ||||
MTS Systems | 528,874 | 39,681,416 | ||||
National Instruments | 1,266,700 | 39,381,703 | ||||
Newport Corporation 1 | 1,727,922 | 33,020,589 | ||||
PC Connection | 1,065,447 | 26,156,724 | ||||
Plexus Corporation 1 | 576,200 | 23,745,202 | ||||
Richardson Electronics | 157,551 | 1,575,510 | ||||
Rofin-Sinar Technologies 1 | 1,216,211 | 34,990,390 | ||||
Rogers Corporation 1 | 387,981 | 31,597,173 | ||||
ScanSource 1 | 182,887 | 7,344,742 | ||||
Vishay Intertechnology | 2,125,545 | 30,076,462 | ||||
620,862,265 | ||||||
INTERNET SOFTWARE & SERVICES - 0.5% | ||||||
Envestnet 1 | 322,401 | 15,842,785 | ||||
j2 Global | 146,750 | 9,098,500 | ||||
199,600 | 5,682,612 | |||||
30,623,897 | ||||||
IT SERVICES - 1.6% | ||||||
Computer Task Group | 399,372 | 3,806,015 | ||||
Convergys Corporation | 810,193 | 16,503,631 | ||||
CoreLogic 1 | 319,000 | 10,077,210 | ||||
Fiserv 1 | 2,100 | 149,037 | ||||
Forrester Research | 298,200 | 11,737,152 | ||||
ManTech International Cl. A | 651,970 | 19,709,053 | ||||
MAXIMUS | 325,700 | 17,861,388 | ||||
MoneyGram International 1 | 552,339 | 5,020,762 | ||||
815,761 | 3,817,762 | |||||
Sykes Enterprises 1 | 212,002 | 4,975,687 | ||||
Teradata Corporation 1 | 8,600 | 375,648 | ||||
94,033,345 | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 3.5% | ||||||
Advanced Energy Industries 1 | 704,714 | 16,701,722 | ||||
Brooks Automation | 353,200 | 4,503,300 | ||||
Cabot Microelectronics 1 | 454,580 | 21,510,726 | ||||
Cascade Microtech 1 | 43,800 | 639,918 | ||||
Diodes 1 | 1,317,700 | 36,328,989 | ||||
Exar Corporation 1 | 824,441 | 8,409,298 | ||||
Fairchild Semiconductor International 1 | 1,151,800 | 19,442,384 | ||||
Integrated Silicon Solution | 305,773 | 5,066,659 | ||||
IXYS Corporation | 434,105 | 5,469,723 | ||||
Kulicke & Soffa Industries 1 | 123,900 | 1,791,594 | ||||
Lam Research | 1,800 | 142,812 | ||||
Micrel | 1,080,800 | 15,682,408 | ||||
MKS Instruments | 786,330 | 28,779,678 | ||||
Nanometrics 1 | 284,971 | 4,793,212 | ||||
Photronics 1 | 274,960 | 2,284,918 | ||||
Rudolph Technologies 1 | 101,722 | 1,040,616 | ||||
Synaptics 1 | 17,800 | 1,225,352 | ||||
Teradyne | 612,251 | 12,116,447 | ||||
Tessera Technologies | 61,290 | 2,191,730 | ||||
Veeco Instruments 1 | 332,200 | 11,587,136 | ||||
199,708,622 | ||||||
SOFTWARE - 2.5% | ||||||
ACI Worldwide 1 | 1,401,900 | 28,276,323 | ||||
Advent Software | 28,900 | 885,496 | ||||
ANSYS 1 | 4,600 | 377,200 | ||||
Blackbaud | 595,391 | 25,756,615 | ||||
Computer Modelling Group | 74,000 | 760,509 | ||||
Ellie Mae 1 | 177,700 | 7,164,864 | ||||
ePlus 1 | 235,028 | 17,789,269 | ||||
Fair Isaac | 240,800 | 17,409,840 | ||||
Manhattan Associates 1 | 219,396 | 8,933,805 | ||||
Mentor Graphics | 79,290 | 1,738,037 | ||||
Monotype Imaging Holdings | 708,951 | 20,439,057 | ||||
Rovi Corporation 1 | 537,884 | 12,150,800 | ||||
141,681,815 | ||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.8% | ||||||
74,200 | 1,054,382 | |||||
Diebold | 895,832 | 31,031,621 | ||||
421,551 | 4,797,250 | |||||
89,100 | 7,405,101 | |||||
Western Digital | 3,500 | 387,450 | ||||
44,675,804 | ||||||
Total (Cost $878,391,382) | 1,257,846,120 | |||||
MATERIALS – 10.2% | ||||||
CHEMICALS - 3.4% | ||||||
Balchem Corporation | 626,000 | 41,716,640 | ||||
Cabot Corporation | 145,100 | 6,364,086 | ||||
FutureFuel Corporation | 824,656 | 10,737,021 | ||||
Hawkins | 29,617 | 1,283,305 | ||||
Innophos Holdings | 13,387 | 782,470 | ||||
Innospec | 828,570 | 35,379,939 | ||||
Minerals Technologies | 321,937 | 22,358,525 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 41 |
Schedules of Investments
Royce Pennsylvania Mutual Fund (continued) | ||||||
SHARES | VALUE | |||||
MATERIALS (continued) | ||||||
CHEMICALS (continued) | ||||||
OM Group | 78,015 | $ | 2,324,847 | |||
Quaker Chemical | 392,288 | 36,106,187 | ||||
Schulman (A.) | 269,690 | 10,930,536 | ||||
Sensient Technologies | 15,200 | 917,168 | ||||
Stepan Company | 265,814 | 10,653,825 | ||||
Westlake Chemical | 279,900 | 17,099,091 | ||||
196,653,640 | ||||||
CONSTRUCTION MATERIALS - 0.2% | ||||||
Ash Grove Cement 4 | 50,018 | 10,078,627 | ||||
CONTAINERS & PACKAGING - 0.9% | ||||||
AptarGroup | 493,000 | 32,952,120 | ||||
Greif Cl. A | 437,468 | 20,661,614 | ||||
53,613,734 | ||||||
METALS & MINING - 4.8% | ||||||
Allegheny Technologies | 513,046 | 17,838,609 | ||||
Carpenter Technology | 797 | 39,252 | ||||
Commercial Metals | 1,103,700 | 17,979,273 | ||||
Compass Minerals International | 174,426 | 15,145,410 | ||||
Franco-Nevada Corporation | 50,200 | 2,469,338 | ||||
Globe Specialty Metals | 1,354,503 | 23,338,087 | ||||
Gold Fields ADR | 520,000 | 2,355,600 | ||||
Haynes International | 583,795 | 28,314,057 | ||||
Hecla Mining | 228,300 | 636,957 | ||||
510,400 | 8,079,632 | |||||
Major Drilling Group International | 2,339,730 | 11,499,275 | ||||
Pan American Silver | 1,083,100 | 9,964,520 | ||||
Pretium Resources 1 | 1,913,787 | 11,053,117 | ||||
Reliance Steel & Aluminum | 952,460 | 58,357,224 | ||||
RTI International Metals 1 | 249,792 | 6,309,746 | ||||
Schnitzer Steel Industries Cl. A | 500,410 | 11,289,250 | ||||
Seabridge Gold 1 | 1,448,404 | 10,935,450 | ||||
Sims Metal Management | 1,707,445 | 16,648,070 | ||||
Steel Dynamics | 383,521 | 7,570,705 | ||||
Worthington Industries | 523,733 | 15,759,126 | ||||
275,582,698 | ||||||
PAPER & FOREST PRODUCTS - 0.9% | ||||||
Glatfelter | 13,200 | 337,524 | ||||
Schweitzer-Mauduit International | 383,019 | 16,201,704 | ||||
Stella-Jones | 1,180,300 | 33,261,337 | ||||
49,800,565 | ||||||
Total (Cost $461,547,147) | 585,729,264 | |||||
TELECOMMUNICATION SERVICES – 0.2% | ||||||
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.1% | ||||||
Premiere Global Services 1 | 601,500 | 6,387,930 | ||||
WIRELESS TELECOMMUNICATION SERVICES - 0.1% | ||||||
Telephone and Data Systems | 162,000 | 4,090,500 | ||||
Total (Cost $9,335,115) | 10,478,430 | |||||
UTILITIES – 0.0% | ||||||
GAS UTILITIES - 0.0% | ||||||
UGI Corporation | 22,750 | 864,045 | ||||
Total (Cost $762,206) | 864,045 | |||||
MISCELLANEOUS5 – 1.5% | ||||||
Total (Cost $83,179,075) | 86,430,386 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $3,874,338,907) | 5,666,305,005 | |||||
REPURCHASE AGREEMENT – 1.9% | ||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $109,019,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% due 10/12/17, valued at $111,201,200) | ||||||
(Cost $109,019,000) | $ | 109,019,000 | ||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 1.1% | ||||||
Money Market Funds | ||||||
Federated Government Obligations Fund (7 day yield-0.0099%) | ||||||
(Cost $62,985,137) | 62,985,137 | |||||
TOTAL INVESTMENTS – 101.9% | ||||||
(Cost $4,046,343,044) | 5,838,309,142 | |||||
LIABILITIES LESS CASH AND OTHER ASSETS – (1.9)% | (108,989,400) | |||||
NET ASSETS – 100.0% | $ | 5,729,319,742 | ||||
42 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Micro-Cap Fund | ||||||
Common Stocks – 96.1% |
SHARES | VALUE | |||||
CONSUMER DISCRETIONARY – 15.3% | ||||||
AUTO COMPONENTS - 1.0% | ||||||
Drew Industries 1 | 105,778 | $ | 5,402,082 | |||
DIVERSIFIED CONSUMER SERVICES - 3.7% | ||||||
American Public Education 1 | 186,930 | 6,892,109 | ||||
Capella Education | 74,151 | 5,706,661 | ||||
Liberty Tax 1 | 120,376 | 4,302,238 | ||||
Lincoln Educational Services | 961,143 | 2,710,424 | ||||
19,611,432 | ||||||
HOTELS, RESTAURANTS & LEISURE - 0.2% | ||||||
26,900 | 804,579 | |||||
HOUSEHOLD DURABLES - 0.9% | ||||||
Cavco Industries 1 | 61,310 | 4,860,044 | ||||
LEISURE PRODUCTS - 1.4% | ||||||
Black Diamond 1 | 123,919 | 1,084,291 | ||||
397,200 | 1,874,784 | |||||
457,465 | 4,332,194 | |||||
7,291,269 | ||||||
SPECIALTY RETAIL - 7.4% | ||||||
Buckle (The) | 76,575 | 4,021,719 | ||||
Cato Corporation (The) Cl. A | 80,750 | 3,406,035 | ||||
Citi Trends 1 | 135,924 | 3,432,081 | ||||
Destination Maternity | 197,094 | 3,143,649 | ||||
Kirkland’s 1 | 263,340 | 6,225,358 | ||||
Shoe Carnival | 328,714 | 8,444,663 | ||||
Stein Mart | 529,084 | 7,735,208 | ||||
Zumiez 1 | 71,800 | 2,773,634 | ||||
39,182,347 | ||||||
TEXTILES, APPAREL & LUXURY GOODS - 0.7% | ||||||
Culp | 164,874 | 3,574,468 | ||||
Total (Cost $59,377,530) | 80,726,221 | |||||
CONSUMER STAPLES – 1.2% | ||||||
BEVERAGES - 0.2% | ||||||
191,900 | 758,005 | |||||
FOOD PRODUCTS - 1.0% | ||||||
†Limoneira Company | 107,530 | 2,686,099 | ||||
Sipef | 30,748 | 1,774,010 | ||||
2,760,860 | 1,049,127 | |||||
5,509,236 | ||||||
Total (Cost $5,500,235) | 6,267,241 | |||||
ENERGY – 6.8% | ||||||
ENERGY EQUIPMENT & SERVICES - 5.1% | ||||||
Canadian Energy Services & Technology | 184,800 | 1,010,053 | ||||
Dawson Geophysical | 121,233 | 1,482,680 | ||||
Geospace Technologies 1 | 115,216 | 3,053,224 | ||||
Gulf Island Fabrication | 345,089 | 6,691,276 | ||||
Natural Gas Services Group 1 | 185,187 | 4,266,709 | ||||
358,412 | 817,179 | |||||
Tesco Corporation | 259,500 | 3,326,790 | ||||
TGC Industries 1 | 635,893 | 1,373,529 | ||||
Total Energy Services | 437,800 | 4,891,241 | ||||
26,912,681 | ||||||
OIL, GAS & CONSUMABLE FUELS - 1.7% | ||||||
Ardmore Shipping | 139,675 | 1,671,910 | ||||
83,900 | 880,950 | |||||
Sprott Resource 1 | 1,474,500 | 2,386,004 | ||||
Synergy Resources 1 | 191,600 | 2,402,664 | ||||
344,163 | 1,645,099 | |||||
8,986,627 | ||||||
Total (Cost $32,924,366) | 35,899,308 | |||||
FINANCIALS – 9.0% | ||||||
BANKS - 1.2% | ||||||
BCB Holdings 1 | 2,215,060 | 414,287 | ||||
62,700 | 1,109,790 | |||||
Pacific Continental | 187,797 | 2,662,961 | ||||
TriState Capital Holdings 1 | 229,157 | 2,346,568 | ||||
6,533,606 | ||||||
CAPITAL MARKETS - 4.2% | ||||||
FBR & Co. 1 | 136,242 | 3,350,191 | ||||
Gluskin Sheff + Associates | 65,100 | 1,551,574 | ||||
GMP Capital | 391,400 | 2,139,258 | ||||
INTL FCStone 1 | 215,155 | 4,425,738 | ||||
JMP Group | 303,549 | 2,313,044 | ||||
Silvercrest Asset Management Group Cl. A | 225,600 | 3,530,640 | ||||
U.S. Global Investors Cl. A | 236,749 | 733,922 | ||||
Westwood Holdings Group | 66,272 | 4,096,935 | ||||
22,141,302 | ||||||
DIVERSIFIED FINANCIAL SERVICES - 0.2% | ||||||
PICO Holdings 1 | 64,123 | 1,208,719 | ||||
INSURANCE - 1.2% | ||||||
Blue Capital Reinsurance Holdings | 103,800 | 1,842,450 | ||||
eHealth 1 | 42,400 | 1,056,608 | ||||
79,000 | 1,534,970 | |||||
Navigators Group 1 | 21,464 | 1,574,170 | ||||
6,008,198 | ||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 2.2% | ||||||
AV Homes 1 | 161,700 | 2,355,969 | ||||
Kennedy-Wilson Holdings | 268,885 | 6,802,790 | ||||
Midland Holdings 1 | 5,263,200 | 2,659,219 | ||||
11,817,978 | ||||||
Total (Cost $36,054,105) | 47,709,803 | |||||
HEALTH CARE – 9.9% | ||||||
BIOTECHNOLOGY - 0.5% | ||||||
BioSpecifics Technologies 1 | 22,300 | 861,226 | ||||
Dyax Corporation 1 | 90,419 | 1,271,291 | ||||
659,471 | 600,053 | |||||
2,732,570 | ||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 5.5% | ||||||
573,761 | 3,580,268 | |||||
CryoLife | 182,455 | 2,067,215 | ||||
Cynosure Cl. A 1 | 114,669 | 3,144,224 | ||||
Exactech 1 | 96,240 | 2,268,377 | ||||
Merit Medical Systems 1 | 167,320 | 2,899,655 | ||||
39,321 | 653,515 | |||||
Orthofix International 1 | 28,600 | 859,716 | ||||
RTI Surgical 1 | 398,100 | 2,070,120 | ||||
SurModics 1 | 189,322 | 4,184,016 | ||||
Synergetics USA 1 | 440,562 | 1,916,445 | ||||
Syneron Medical 1 | 415,490 | 3,876,522 | ||||
Trinity Biotech ADR Cl. A | 89,276 | 1,563,223 | ||||
29,083,296 | ||||||
HEALTH CARE PROVIDERS & SERVICES - 2.2% | ||||||
81,600 | 2,621,808 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 43 |
Schedules of Investments |
Royce Micro-Cap Fund (continued) |
SHARES | VALUE | |||||
HEALTH CARE (continued) | ||||||
HEALTH CARE PROVIDERS & SERVICES (continued) | ||||||
CorVel Corporation 1 | 95,365 | $ | 3,549,485 | |||
U.S. Physical Therapy | 125,540 | 5,267,659 | ||||
11,438,952 | ||||||
LIFE SCIENCES TOOLS & SERVICES - 0.5% | ||||||
Harvard Bioscience 1 | 417,679 | 2,368,240 | ||||
PHARMACEUTICALS - 1.2% | ||||||
190,882 | 1,172,015 | |||||
185,000 | 2,760,200 | |||||
Unichem Laboratories | 66,918 | 254,880 | ||||
Vetoquinol | 54,269 | 2,357,338 | ||||
6,544,433 | ||||||
Total (Cost $31,280,284) | 52,167,491 | |||||
INDUSTRIALS – 24.1% | ||||||
AEROSPACE & DEFENSE - 1.0% | ||||||
AeroVironment 1 | 68,944 | 1,878,724 | ||||
American Science and Engineering | 32,118 | 1,666,924 | ||||
CPI Aerostructures 1 | 156,818 | 1,645,021 | ||||
5,190,669 | ||||||
BUILDING PRODUCTS - 1.5% | ||||||
AAON | 152,999 | 3,425,648 | ||||
Quanex Building Products | 251,500 | 4,723,170 | ||||
8,148,818 | ||||||
COMMERCIAL SERVICES & SUPPLIES - 2.4% | ||||||
Courier Corporation | 190,382 | 2,840,500 | ||||
Ennis | 319,451 | 4,303,005 | ||||
Heritage-Crystal Clean 1 | 99,674 | 1,228,980 | ||||
Hudson Technologies 1 | 430,904 | 1,624,508 | ||||
Team 1 | 33,600 | 1,359,456 | ||||
US Ecology | 31,600 | 1,267,792 | ||||
12,624,241 | ||||||
CONSTRUCTION & ENGINEERING - 2.0% | ||||||
MYR Group 1 | 195,200 | 5,348,480 | ||||
Severfield 1 | 3,566,858 | 3,779,713 | ||||
Sterling Construction 1 | 272,275 | 1,739,837 | ||||
10,868,030 | ||||||
ELECTRICAL EQUIPMENT - 2.9% | ||||||
Global Power Equipment Group | 350,612 | 4,841,952 | ||||
Graphite India | 1,819,291 | 2,619,990 | ||||
LSI Industries | 694,236 | 4,713,862 | ||||
Powell Industries | 60,400 | 2,963,828 | ||||
15,139,632 | ||||||
MACHINERY - 5.9% | ||||||
CIRCOR International | 21,759 | 1,311,632 | ||||
Foster (L.B.) Company | 85,756 | 4,165,169 | ||||
FreightCar America | 116,209 | 3,057,459 | ||||
Gorman-Rupp Company (The) | 58,313 | 1,873,013 | ||||
Graham Corporation | 171,088 | 4,922,202 | ||||
Kadant | 116,816 | 4,986,875 | ||||
339,814 | 4,349,619 | |||||
RBC Bearings | 44,669 | 2,882,491 | ||||
Semperit AG Holding | 75,578 | 3,657,226 | ||||
31,205,686 | ||||||
MARINE - 0.3% | ||||||
Clarkson | 56,600 | 1,670,697 | ||||
PROFESSIONAL SERVICES - 4.6% | ||||||
CRA International 1 | 179,583 | 5,444,957 | ||||
Exponent | 36,735 | 3,030,637 | ||||
GP Strategies 1 | 78,818 | 2,674,295 | ||||
Kforce | 160,158 | 3,864,612 | ||||
Resources Connection | 568,818 | 9,357,056 | ||||
24,371,557 | ||||||
ROAD & RAIL - 3.0% | ||||||
FRP Holdings 1 | 239,189 | 9,378,601 | ||||
Marten Transport | 287,633 | 6,287,657 | ||||
15,666,258 | ||||||
TRADING COMPANIES & DISTRIBUTORS - 0.5% | ||||||
Houston Wire & Cable | 235,100 | 2,809,445 | ||||
Total (Cost $91,248,283) | 127,695,033 | |||||
INFORMATION TECHNOLOGY – 17.0% | ||||||
COMMUNICATIONS EQUIPMENT - 2.3% | ||||||
139,500 | 2,552,850 | |||||
COM DEV International | 423,800 | 1,455,467 | ||||
Digi International 1 | 351,034 | 3,261,106 | ||||
KVH Industries 1 | 310,800 | 3,931,620 | ||||
Numerex Corporation Cl. A 1 | 99,032 | 1,095,294 | ||||
12,296,337 | ||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 3.6% | ||||||
CUI Global 1 | 321,038 | 2,391,733 | ||||
Electro Rent | 159,500 | 2,239,380 | ||||
Fabrinet 1 | 252,845 | 4,485,470 | ||||
GSI Group 1 | 311,700 | 4,588,224 | ||||
601,496 | 2,033,056 | |||||
Pure Technologies | 58,100 | 369,564 | ||||
Vishay Precision Group 1 | 157,700 | 2,706,132 | ||||
18,813,559 | ||||||
INTERNET SOFTWARE & SERVICES - 1.0% | ||||||
63,500 | 525,780 | |||||
QuinStreet 1 | 362,600 | 2,200,982 | ||||
RealNetworks 1 | 134,100 | 944,064 | ||||
Zix Corporation 1 | 435,600 | 1,568,160 | ||||
5,238,986 | ||||||
IT SERVICES - 0.5% | ||||||
†Computer Task Group | 260,610 | 2,483,613 | ||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.3% | ||||||
Advanced Energy Industries 1 | 181,474 | 4,300,934 | ||||
Brooks Automation | 460,100 | 5,866,275 | ||||
Cascade Microtech 1 | 67,284 | 983,019 | ||||
586,182 | 2,925,048 | |||||
Integrated Silicon Solution | 237,500 | 3,935,375 | ||||
Photronics 1 | 279,700 | 2,324,307 | ||||
Rudolph Technologies 1 | 196,751 | 2,012,763 | ||||
Ultra Clean Holdings 1 | 211,500 | 1,962,720 | ||||
Xcerra Corporation 1 | 437,961 | 4,011,723 | ||||
28,322,164 | ||||||
SOFTWARE - 3.2% | ||||||
ePlus 1 | 84,767 | 6,416,014 | ||||
Monotype Imaging Holdings | 151,187 | 4,358,721 | ||||
125,500 | 2,025,570 | |||||
361,307 | 2,305,139 | |||||
TeleNav 1 | 277,700 | 1,852,259 | ||||
16,957,703 | ||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.1% | ||||||
Avid Technology 1 | 152,043 | 2,160,531 |
44 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Micro-Cap Fund (continued) |
SHARES | VALUE | |||||
INFORMATION TECHNOLOGY (continued) | ||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS (continued) | ||||||
Super Micro Computer 1 | 103,846 | $ | 3,622,149 | |||
5,782,680 | ||||||
Total (Cost $72,600,244) | 89,895,042 | |||||
MATERIALS – 7.5% | ||||||
CHEMICALS - 1.8% | ||||||
99,712 | 836,584 | |||||
FutureFuel Corporation | 279,200 | 3,635,184 | ||||
Quaker Chemical | 39,560 | 3,641,102 | ||||
Societe Internationale de Plantations d’Heveas | 34,037 | 1,356,898 | ||||
9,469,768 | ||||||
METALS & MINING - 5.7% | ||||||
Alamos Gold | 170,100 | 1,215,209 | ||||
Argonaut Gold 1 | 378,300 | 595,876 | ||||
546,800 | 1,181,088 | |||||
Geodrill 1 | 1,614,300 | 805,900 | ||||
1,035,100 | 486,497 | |||||
Goldgroup Mining 1 | 1,296,300 | 150,629 | ||||
Haynes International | 90,330 | 4,381,005 | ||||
Horsehead Holding Corporation 1 | 259,271 | 4,104,260 | ||||
Imdex 1 | 2,194,065 | 850,648 | ||||
1,207,004 | 1,339,774 | |||||
Olympic Steel | 240,473 | 4,275,610 | ||||
Pilot Gold 1 | 2,155,400 | 1,651,150 | ||||
Synalloy Corporation | 153,142 | 2,696,831 | ||||
Universal Stainless & Alloy Products 1 | 224,752 | 5,652,513 | ||||
Western Copper and Gold 1 | 1,084,400 | 628,952 | ||||
30,015,942 | ||||||
Total (Cost $44,041,565) | 39,485,710 | |||||
TELECOMMUNICATION SERVICES – 0.5% | ||||||
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.5% | ||||||
452,700 | 2,960,658 | |||||
Total (Cost $2,895,587) | 2,960,658 | |||||
MISCELLANEOUS5 – 4.8% | ||||||
Total (Cost $25,207,828) | 25,327,631 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $401,130,027) | 508,134,138 | |||||
REPURCHASE AGREEMENT – 3.8% | ||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $20,212,000 (collateralized by obligations of various U.S. Government Agencies, 0.75% due 10/31/17, valued at $20,619,478) | ||||||
(Cost $20,212,000) | 20,212,000 | |||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 4.2% | ||||||
Money Market Funds | ||||||
Federated Government Obligations Fund (7 day yield-0.0099%) | ||||||
(Cost $22,089,668) | 22,089,668 | |||||
TOTAL INVESTMENTS – 104.1% | ||||||
(Cost $443,431,695) | 550,435,806 | |||||
LIABILITIES LESS CASH AND OTHER ASSETS – (4.1)% | (21,802,574) | |||||
NET ASSETS – 100.0% | $ | 528,633,232 | ||||
Royce Premier Fund | ||||||
Common Stocks – 97.9% | ||||||
SHARES | VALUE | |||||
CONSUMER DISCRETIONARY – 12.9% | ||||||
AUTO COMPONENTS - 0.5% | ||||||
Dorman Products 1 | 628,200 | $ | 30,323,214 | |||
AUTOMOBILES - 3.9% | ||||||
Thor Industries 2 | 3,761,457 | 210,152,602 | ||||
DISTRIBUTORS - 1.4% | ||||||
Pool Corporation | 1,200,700 | 76,172,408 | ||||
DIVERSIFIED CONSUMER SERVICES - 1.4% | ||||||
Sotheby’s | 1,734,667 | 74,902,921 | ||||
MEDIA - 1.4% | ||||||
Morningstar | 1,147,500 | 74,254,725 | ||||
SPECIALTY RETAIL - 1.7% | ||||||
Buckle (The) | 1,721,536 | 90,415,071 | ||||
TEXTILES, APPAREL & LUXURY GOODS - 2.6% | ||||||
Columbia Sportswear | 1,902,872 | 84,753,919 | ||||
Wolverine World Wide | 1,857,974 | 54,754,494 | ||||
139,508,413 | ||||||
Total (Cost $369,728,599) | 695,729,354 | |||||
CONSUMER STAPLES – 3.9% | ||||||
FOOD PRODUCTS - 2.9% | ||||||
Cal-Maine Foods | 2,308,718 | 90,109,263 | ||||
Sanderson Farms | 809,785 | 68,042,185 | ||||
158,151,448 | ||||||
PERSONAL PRODUCTS - 1.0% | ||||||
Nu Skin Enterprises Cl. A | 1,175,894 | 51,386,568 | ||||
Total (Cost $71,304,878) | 209,538,016 | |||||
ENERGY – 6.3% | ||||||
ENERGY EQUIPMENT & SERVICES - 6.3% | ||||||
Ensign Energy Services | 6,982,000 | 61,298,330 | ||||
Pason Systems | 3,981,100 | 75,009,708 | ||||
982,527 | 72,520,318 | |||||
Trican Well Service 2 | 8,450,100 | 40,512,186 | ||||
2,586,073 | 88,185,089 | |||||
Total (Cost $327,869,743) | 337,525,631 | |||||
FINANCIALS – 12.3% | ||||||
CAPITAL MARKETS - 5.0% | ||||||
Artisan Partners Asset Management Cl. A | 1,172,746 | 59,258,855 | ||||
Federated Investors Cl. B | 3,643,300 | 119,973,869 | ||||
†Sprott | 6,957,200 | 14,611,438 | ||||
Stifel Financial 1 | 1,515,454 | 77,318,463 | ||||
271,162,625 | ||||||
INSURANCE - 3.0% | ||||||
Alleghany Corporation 1 | 355,725 | 164,878,537 | ||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 4.3% | ||||||
Jones Lang LaSalle | 639,185 | 95,833,007 | ||||
Kennedy-Wilson Holdings 2 | 5,318,014 | 134,545,754 | ||||
230,378,761 | ||||||
Total (Cost $419,145,785) | 666,419,923 | |||||
HEALTH CARE – 6.7% | ||||||
BIOTECHNOLOGY - 1.8% | ||||||
2,900,350 | 98,785,921 | |||||
HEALTH CARE EQUIPMENT & SUPPLIES - 1.7% | ||||||
IDEXX Laboratories 1 | 626,700 | 92,920,809 | ||||
LIFE SCIENCES TOOLS & SERVICES - 1.6% | ||||||
PerkinElmer | 1,942,600 | 84,949,898 | ||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 45 |
Schedules of Investments |
Royce Premier Fund (continued) |
SHARES | VALUE | |||||
HEALTH CARE (continued) | ||||||
PHARMACEUTICALS - 1.6% | ||||||
Medicines Company (The) 1 | 3,079,888 | $ | 85,220,501 | |||
Total (Cost $201,425,570) | 361,877,129 | |||||
INDUSTRIALS – 26.4% | ||||||
AIR FREIGHT & LOGISTICS - 1.2% | ||||||
Forward Air | 1,360,228 | 68,514,684 | ||||
BUILDING PRODUCTS - 1.7% | ||||||
Simpson Manufacturing 2 | 2,630,933 | 91,030,282 | ||||
COMMERCIAL SERVICES & SUPPLIES - 4.8% | ||||||
Copart 1 | 3,093,500 | 112,881,815 | ||||
Ritchie Bros. Auctioneers 2 | 5,442,714 | 146,354,580 | ||||
259,236,395 | ||||||
CONSTRUCTION & ENGINEERING - 1.8% | ||||||
EMCOR Group | 2,195,500 | 97,677,795 | ||||
MACHINERY - 10.1% | ||||||
Kennametal | 1,531,500 | 54,812,385 | ||||
Lincoln Electric Holdings | 2,344,070 | 161,951,796 | ||||
Semperit AG Holding 2 | 1,927,361 | 93,265,167 | ||||
Valmont Industries | 684,600 | 86,944,200 | ||||
Woodward | 2,999,324 | 147,656,721 | ||||
544,630,269 | ||||||
PROFESSIONAL SERVICES - 2.5% | ||||||
Acacia Research 2 | 3,075,472 | 52,098,496 | ||||
Towers Watson & Co. Cl. A | 726,421 | 82,209,064 | ||||
134,307,560 | ||||||
ROAD & RAIL - 2.2% | ||||||
Landstar System | 1,641,000 | 119,021,730 | ||||
TRADING COMPANIES & DISTRIBUTORS - 2.1% | ||||||
Air Lease Cl. A | 1,180,160 | 40,491,290 | ||||
MSC Industrial Direct Cl. A | 886,184 | 72,002,450 | ||||
112,493,740 | ||||||
Total (Cost $732,104,841) | 1,426,912,455 | |||||
INFORMATION TECHNOLOGY – 18.9% | ||||||
COMMUNICATIONS EQUIPMENT - 1.0% | ||||||
ADTRAN | 2,516,834 | 54,866,981 | ||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 8.3% | ||||||
Anixter International 1 | 1,061,835 | 93,929,924 | ||||
2,702,100 | 68,741,424 | |||||
Cognex Corporation 1 | 2,671,114 | 110,397,142 | ||||
National Instruments | 4,079,501 | 126,831,686 | ||||
Zebra Technologies Cl. A 1 | 648,394 | 50,192,179 | ||||
450,092,355 | ||||||
IT SERVICES - 2.3% | ||||||
Gartner 1 | 735,200 | 61,911,192 | ||||
Jack Henry & Associates | 995,440 | 61,856,642 | ||||
123,767,834 | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.5% | ||||||
1,321,074 | 62,513,222 | |||||
Cirrus Logic 1 | 1,315,688 | 31,010,766 | ||||
Fairchild Semiconductor International 1 | 3,501,112 | 59,098,771 | ||||
MKS Instruments 2 | 3,028,910 | 110,858,106 | ||||
Veeco Instruments 1 | 961,815 | 33,548,107 | ||||
297,028,972 | ||||||
SOFTWARE - 1.8% | ||||||
Fair Isaac | 1,324,800 | 95,783,040 | ||||
Total (Cost $570,233,315) | 1,021,539,182 | |||||
MATERIALS – 7.5% | ||||||
CHEMICALS - 2.5% | ||||||
Cabot Corporation | 1,299,000 | 56,974,140 | ||||
Westlake Chemical | 1,264,810 | 77,267,243 | ||||
134,241,383 | ||||||
METALS & MINING - 4.1% | ||||||
Globe Specialty Metals 2 | 5,094,972 | 87,786,367 | ||||
Reliance Steel & Aluminum | 1,503,500 | 92,119,445 | ||||
Schnitzer Steel Industries Cl. A 2 | 1,795,805 | 40,513,361 | ||||
220,419,173 | ||||||
PAPER & FOREST PRODUCTS - 0.9% | ||||||
Stella-Jones | 1,828,712 | 51,533,854 | ||||
Total (Cost $269,696,119) | 406,194,410 | |||||
MISCELLANEOUS5 – 3.0% | ||||||
Total (Cost $162,234,604) | 161,629,226 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $3,123,743,454) | 5,287,365,326 | |||||
REPURCHASE AGREEMENT – 3.4% | ||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $185,743,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% due 10/12/17, valued at $189,457,950) | ||||||
(Cost $185,743,000) | 185,743,000 | |||||
PRINCIPAL | ||||||
AMOUNT | ||||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 1.6% | ||||||
U.S. Treasury Bills | ||||||
due 1/15/15-8/20/15 | $ | 3,532,930 | 3,533,097 | |||
U.S. Treasury Bonds | ||||||
0.75%-8.125% | ||||||
due 11/15/16-5/15/44 | 7,763,152 | 7,819,341 | ||||
U.S. Treasury Notes | ||||||
0.125%-4.75% | ||||||
due 12/31/14-8/15/24 | 12,392,417 | 12,409,086 | ||||
Money Market Funds | ||||||
Federated Government Obligations Fund (7 day yield-0.0099%) | 60,262,488 | |||||
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED | ||||||
(Cost $84,024,012) | 84,024,012 | |||||
TOTAL INVESTMENTS – 102.9% | ||||||
(Cost $3,393,510,466) | 5,557,132,338 | |||||
LIABILITIES LESS CASH AND OTHER ASSETS – (2.9)% | (154,973,345) | |||||
NET ASSETS – 100.0% | $ | 5,402,158,993 | ||||
46 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Low-Priced Stock Fund | ||||||
Common Stocks – 94.3% |
SHARES | VALUE | |||||
CONSUMER DISCRETIONARY – 11.5% | ||||||
AUTOMOBILES - 1.0% | ||||||
Thor Industries | 118,003 | $ | 6,592,828 | |||
DIVERSIFIED CONSUMER SERVICES - 1.0% | ||||||
Universal Technical Institute | 682,651 | 6,717,286 | ||||
HOTELS, RESTAURANTS & LEISURE - 0.7% | ||||||
329,200 | 4,072,204 | |||||
Ruby Tuesday 1 | 100,000 | 684,000 | ||||
4,756,204 | ||||||
HOUSEHOLD DURABLES - 0.6% | ||||||
283,700 | 4,326,425 | |||||
LEISURE PRODUCTS - 0.6% | ||||||
402,000 | 3,806,940 | |||||
MEDIA - 0.8% | ||||||
Pico Far East Holdings | 24,976,900 | 5,723,414 | ||||
SPECIALTY RETAIL - 6.8% | ||||||
American Eagle Outfitters | 259,200 | 3,597,696 | ||||
Ascena Retail Group 1 | 113,000 | 1,419,280 | ||||
Buckle (The) | 160,075 | 8,407,139 | ||||
Cato Corporation (The) Cl. A | 158,250 | 6,674,985 | ||||
Chico’s FAS | 496,500 | 8,048,265 | ||||
Finish Line (The) Cl. A | 208,200 | 5,061,342 | ||||
GameStop Corporation Cl. A | 179,900 | 6,080,620 | ||||
341,900 | 4,314,778 | |||||
West Marine 1 | 203,300 | 2,626,636 | ||||
46,230,741 | ||||||
Total (Cost $59,301,429) | 78,153,838 | |||||
CONSUMER STAPLES – 1.8% | ||||||
FOOD PRODUCTS - 0.8% | ||||||
Industrias Bachoco ADR 1 | 113,906 | 5,681,631 | ||||
PERSONAL PRODUCTS - 1.0% | ||||||
Nu Skin Enterprises Cl. A | 154,529 | 6,752,918 | ||||
Total (Cost $3,857,141) | 12,434,549 | |||||
ENERGY – 8.9% | ||||||
ENERGY EQUIPMENT & SERVICES - 7.4% | ||||||
C&J Energy Services 1 | 251,346 | 3,320,281 | ||||
Calfrac Well Services | 472,600 | 4,071,894 | ||||
915,175 | 8,730,769 | |||||
Pason Systems | 304,650 | 5,740,049 | ||||
Tesco Corporation | 579,816 | 7,433,241 | ||||
TGS-NOPEC Geophysical | 252,700 | 5,467,503 | ||||
Total Energy Services | 496,100 | 5,542,587 | ||||
Trican Well Service | 831,300 | 3,985,489 | ||||
Unit Corporation 1 | 175,000 | 5,967,500 | ||||
50,259,313 | ||||||
OIL, GAS & CONSUMABLE FUELS - 1.5% | ||||||
389,400 | 2,488,266 | |||||
Sprott Resource 1 | 1,368,800 | 2,214,963 | ||||
439,600 | 5,512,584 | |||||
10,215,813 | ||||||
Total (Cost $49,967,315) | 60,475,126 | |||||
FINANCIALS – 7.7% | ||||||
CAPITAL MARKETS - 5.6% | ||||||
Ashmore Group | 1,806,363 | 7,831,467 | ||||
Federated Investors Cl. B | 185,400 | 6,105,222 | ||||
INTL FCStone 1 | 134,900 | 2,774,893 | ||||
Jupiter Fund Management | 1,043,849 | 5,860,378 | ||||
Sprott | 3,613,800 | 7,589,664 | ||||
Value Partners Group | 9,312,500 | 7,777,577 | ||||
37,939,201 | ||||||
INSURANCE - 0.6% | ||||||
397,400 | 3,791,196 | |||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.5% | ||||||
Gladstone Land | 239,500 | 2,562,650 | ||||
Kennedy-Wilson Holdings | 296,830 | 7,509,799 | ||||
10,072,449 | ||||||
Total (Cost $42,115,199) | 51,802,846 | |||||
HEALTH CARE – 3.1% | ||||||
BIOTECHNOLOGY - 1.5% | ||||||
Myriad Genetics 1 | 181,569 | 6,184,240 | ||||
500,850 | 3,786,426 | |||||
9,970,666 | ||||||
PHARMACEUTICALS - 1.6% | ||||||
241,100 | 4,086,645 | |||||
Medicines Company (The) 1 | 244,932 | 6,777,269 | ||||
10,863,914 | ||||||
Total (Cost $10,776,590) | 20,834,580 | |||||
INDUSTRIALS – 16.3% | ||||||
AEROSPACE & DEFENSE - 1.7% | ||||||
Kratos Defense & Security Solutions 1 | 715,200 | 3,590,304 | ||||
298,523 | 8,027,284 | |||||
11,617,588 | ||||||
BUILDING PRODUCTS - 0.6% | ||||||
301,200 | 4,210,776 | |||||
COMMERCIAL SERVICES & SUPPLIES - 0.3% | ||||||
Ennis | 153,162 | 2,063,092 | ||||
CONSTRUCTION & ENGINEERING - 0.4% | ||||||
Raubex Group | 1,587,837 | 3,013,053 | ||||
ELECTRICAL EQUIPMENT - 1.8% | ||||||
†General Cable | 253,400 | 3,775,660 | ||||
†Global Power Equipment Group | 275,900 | 3,810,179 | ||||
GrafTech International 1 | 837,130 | 4,235,878 | ||||
11,821,717 | ||||||
MACHINERY - 1.1% | ||||||
†Mueller Water Products Cl. A | 387,100 | 3,963,904 | ||||
1,207,365 | 3,730,758 | |||||
7,694,662 | ||||||
MARINE - 0.8% | ||||||
Clarkson | 187,331 | 5,529,563 | ||||
PROFESSIONAL SERVICES - 8.3% | ||||||
Acacia Research | 421,805 | 7,145,377 | ||||
Heidrick & Struggles International | 285,092 | 6,571,371 | ||||
Kforce | 353,274 | 8,524,502 | ||||
Korn/Ferry International 1 | 226,040 | 6,500,910 | ||||
Navigant Consulting 1 | 514,523 | 7,908,218 | ||||
Resources Connection | 403,800 | 6,642,510 | ||||
RPX Corporation 1 | 609,200 | 8,394,776 | ||||
TrueBlue 1 | 196,794 | 4,378,666 | ||||
56,066,330 | ||||||
ROAD & RAIL - 0.8% | ||||||
Heartland Express | 56,545 | 1,527,280 | ||||
160,600 | 3,750,010 | |||||
5,277,290 | ||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 47 |
Schedules of Investments |
Royce Low-Priced Stock Fund (continued) | ||||||
SHARES | VALUE | |||||
INDUSTRIALS (continued) | ||||||
TRADING COMPANIES & DISTRIBUTORS - 0.5% | ||||||
Houston Wire & Cable | 264,000 | $ | 3,154,800 | |||
Total (Cost $94,133,173) | 110,448,871 | |||||
INFORMATION TECHNOLOGY – 33.4% | ||||||
COMMUNICATIONS EQUIPMENT - 6.2% | ||||||
ADTRAN | 375,263 | 8,180,733 | ||||
Brocade Communications Systems | 698,500 | 8,270,240 | ||||
Harmonic 1 | 150,000 | 1,051,500 | ||||
Infinera Corporation 1 | 400,000 | 5,888,000 | ||||
KVH Industries 1 | 539,615 | 6,826,130 | ||||
NETGEAR 1 | 222,500 | 7,916,550 | ||||
322,300 | 3,874,046 | |||||
42,007,199 | ||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 4.0% | ||||||
AVX Corporation | 577,178 | 8,080,492 | ||||
312,200 | 4,261,530 | |||||
TTM Technologies 1 | 723,358 | 5,446,886 | ||||
Vishay Intertechnology | 628,750 | 8,896,812 | ||||
26,685,720 | ||||||
INTERNET SOFTWARE & SERVICES - 2.7% | ||||||
335,600 | 3,429,832 | |||||
EarthLink Holdings | 200,000 | 878,000 | ||||
340,200 | 4,048,380 | |||||
1,062,400 | 6,448,768 | |||||
RealNetworks 1 | 518,000 | 3,646,720 | ||||
18,451,700 | ||||||
IT SERVICES - 4.0% | ||||||
Convergys Corporation | 421,611 | 8,588,216 | ||||
295,200 | 3,808,080 | |||||
Neurones | 407,633 | 6,835,330 | ||||
TeleTech Holdings 1 | 321,501 | 7,613,144 | ||||
26,844,770 | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 13.5% | ||||||
Advanced Energy Industries 1 | 343,383 | 8,138,177 | ||||
Brooks Automation | 627,682 | 8,002,946 | ||||
272,300 | 3,978,303 | |||||
Cirrus Logic 1 | 338,100 | 7,969,017 | ||||
Exar Corporation 1 | 387,000 | 3,947,400 | ||||
Fairchild Semiconductor International 1 | 462,739 | 7,811,034 | ||||
231,900 | 4,285,512 | |||||
Integrated Silicon Solution | 192,782 | 3,194,398 | ||||
†IXYS Corporation | 315,000 | 3,969,000 | ||||
Lam Research | 78,800 | 6,251,992 | ||||
MKS Instruments | 204,427 | 7,482,028 | ||||
221,100 | 3,718,902 | |||||
Photronics 1 | 454,500 | 3,776,895 | ||||
389,900 | 3,988,677 | |||||
1,222,400 | 6,747,648 | |||||
Teradyne | 411,775 | 8,149,027 | ||||
91,410,956 | ||||||
SOFTWARE - 1.5% | ||||||
300,400 | 4,848,456 | |||||
840,100 | 5,359,838 | |||||
10,208,294 | ||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.5% | ||||||
Avid Technology 1 | 35,000 | 497,350 | ||||
382,800 | 4,356,264 | |||||
154,200 | 5,378,496 | |||||
10,232,110 | ||||||
Total (Cost $169,971,765) | 225,840,749 | |||||
MATERIALS – 6.7% | ||||||
CHEMICALS - 1.0% | ||||||
372,000 | 3,121,080 | |||||
276,000 | 3,811,560 | |||||
6,932,640 | ||||||
METALS & MINING - 5.7% | ||||||
Alamos Gold | 668,700 | 4,777,251 | ||||
Globe Specialty Metals | 519,463 | 8,950,348 | ||||
Hochschild Mining 1 | 1,098,648 | 1,503,306 | ||||
264,535 | 4,187,589 | |||||
Major Drilling Group International | 927,300 | 4,557,482 | ||||
Pan American Silver | 325,476 | 2,994,379 | ||||
Pretium Resources 1 | 552,400 | 3,190,398 | ||||
Schnitzer Steel Industries Cl. A | 164,900 | 3,720,144 | ||||
Seabridge Gold 1 | 573,470 | 4,329,699 | ||||
38,210,596 | ||||||
Total (Cost $41,217,669) | 45,143,236 | |||||
MISCELLANEOUS5 – 4.9% | ||||||
Total (Cost $32,213,338) | 33,268,394 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $503,553,619) | 638,402,189 | |||||
REPURCHASE AGREEMENT – 5.3% | ||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $35,516,000 (collateralized by obligations of various U.S. Government Agencies, 0.75%-1.06% due 10/12/17-10/31/17, valued at $36,228,563) | ||||||
(Cost $35,516,000) | 35,516,000 | |||||
PRINCIPAL | ||||||
AMOUNT | ||||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 3.0% | ||||||
U.S. Treasury Bonds | ||||||
3.125%-4.75% | ||||||
due 2/15/40-5/15/44 | $13,938 | 14,073 | ||||
U.S. Treasury Notes | ||||||
0.125%-2.375% | ||||||
due 1/15/17-8/15/24 | 15,450 | 15,519 | ||||
Money Market Funds | ||||||
Federated Government Obligations Fund (7 day yield- | ||||||
0.0099%) | 20,316,730 | |||||
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED | ||||||
(Cost $20,346,322) | 20,346,322 | |||||
TOTAL INVESTMENTS – 102.6% | ||||||
(Cost $559,415,941) | 694,264,511 | |||||
LIABILITIES LESS CASH AND OTHER ASSETS – (2.6)% | (17,612,086) | |||||
NET ASSETS – 100.0% | $ | 676,652,425 | ||||
48 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Total Return Fund | ||||||
Common Stocks – 97.1% | ||||||
SHARES | VALUE | |||||
CONSUMER DISCRETIONARY – 12.4% | ||||||
AUTO COMPONENTS - 1.1% | ||||||
Gentex Corporation | 1,189,382 | $ | 42,972,371 | |||
Standard Motor Products | 94,406 | 3,598,757 | ||||
STRATTEC SECURITY | 69,205 | 5,714,949 | ||||
52,286,077 | ||||||
AUTOMOBILES - 0.7% | ||||||
Thor Industries | 561,174 | 31,352,791 | ||||
DISTRIBUTORS - 0.2% | ||||||
Weyco Group | 282,000 | 8,366,940 | ||||
DIVERSIFIED CONSUMER SERVICES - 0.3% | ||||||
DeVry Education Group | 39,200 | 1,860,824 | ||||
Regis Corporation 1 | 837,200 | 14,031,472 | ||||
15,892,296 | ||||||
HOTELS, RESTAURANTS & LEISURE - 0.7% | ||||||
Abu Dhabi National Hotels | 1,200,000 | 1,306,816 | ||||
Bob Evans Farms | 430,473 | 22,031,608 | ||||
Cheesecake Factory | 33,900 | 1,705,509 | ||||
DineEquity | 51,630 | 5,350,933 | ||||
Ruth’s Hospitality Group | 52,600 | 789,000 | ||||
31,183,866 | ||||||
HOUSEHOLD DURABLES - 0.9% | ||||||
De’Longhi | 45,000 | 814,992 | ||||
Ekornes | 60,000 | 764,849 | ||||
Ethan Allen Interiors | 1,181,550 | 36,592,603 | ||||
La-Z-Boy | 75,920 | 2,037,693 | ||||
40,210,137 | ||||||
INTERNET & CATALOG RETAIL - 0.1% | ||||||
Manutan International | 1,381 | 68,473 | ||||
Nutrisystem | 25,660 | 501,653 | ||||
PetMed Express | 351,500 | 5,051,055 | ||||
5,621,181 | ||||||
LEISURE PRODUCTS - 0.2% | ||||||
Arctic Cat | 107,565 | 3,818,558 | ||||
Callaway Golf | 962,900 | 7,414,330 | ||||
11,232,888 | ||||||
MEDIA - 0.8% | ||||||
Harte-Hanks | 618,563 | 4,787,677 | ||||
Meredith Corporation | 194,494 | 10,564,914 | ||||
Morningstar | 34,801 | 2,251,973 | ||||
Saga Communications Cl. A | 190,758 | 8,294,158 | ||||
Television Broadcasts | 90,000 | 522,421 | ||||
Wiley (John) & Sons Cl. A | 180,739 | 10,706,978 | ||||
37,128,121 | ||||||
MULTILINE RETAIL - 0.0% | ||||||
New World Department Store China | 1,993,300 | 637,237 | ||||
SPECIALTY RETAIL - 6.1% | ||||||
American Eagle Outfitters | 1,730,294 | 24,016,481 | ||||
Ascena Retail Group 1 | 1,872,158 | 23,514,304 | ||||
Buckle (The) | 625,024 | 32,826,260 | ||||
Cato Corporation (The) Cl. A | 859,933 | 36,271,974 | ||||
Chico’s FAS | 61,500 | 996,915 | ||||
DSW Cl. A | 701,776 | 26,176,245 | ||||
GameStop Corporation Cl. A | 785,025 | 26,533,845 | ||||
Genesco 1 | 375,546 | 28,774,335 | ||||
Guess? | 47,934 | 1,010,449 | ||||
Haverty Furniture | 1,800 | 39,618 | ||||
Men’s Wearhouse (The) | 176,539 | 7,794,197 | ||||
Monro Muffler Brake | 430,000 | 24,854,000 | ||||
Rent-A-Center | 361,529 | 13,130,733 | ||||
Shoe Carnival | 676,696 | 17,384,320 | ||||
Stein Mart | 1,063,666 | 15,550,797 | ||||
Systemax 1 | 255,676 | 3,451,626 | ||||
282,326,099 | ||||||
TEXTILES, APPAREL & LUXURY GOODS - 1.3% | ||||||
Columbia Sportswear | 159,764 | 7,115,889 | ||||
G-III Apparel Group 1 | 120,780 | 12,199,988 | ||||
Movado Group | 317,303 | 9,001,886 | ||||
Pacific Textiles Holdings | 750,000 | 992,052 | ||||
Stella International Holdings | 100,000 | 262,401 | ||||
Steven Madden 1 | 824,664 | 26,249,055 | ||||
Vera Bradley 1 | 291,209 | 5,934,839 | ||||
Wolverine World Wide | 27,075 | 797,900 | ||||
62,554,010 | ||||||
Total (Cost $401,886,191) | 578,791,643 | |||||
CONSUMER STAPLES – 3.0% | ||||||
BEVERAGES - 0.0% | ||||||
43,380 | 407,772 | |||||
FOOD & STAPLES RETAILING - 0.4% | ||||||
Village Super Market Cl. A | 685,437 | 18,760,411 | ||||
FOOD PRODUCTS - 1.8% | ||||||
Cal-Maine Foods | 104,596 | 4,082,382 | ||||
Farmer Bros. 1 | 366,000 | 10,778,700 | ||||
Flowers Foods | 1,058,900 | 20,320,291 | ||||
Fresh Del Monte Produce | 241,700 | 8,109,035 | ||||
Hershey Creamery 4 | 882 | 2,412,270 | ||||
J&J Snack Foods | 3,500 | 380,695 | ||||
Lancaster Colony | 120,300 | 11,264,892 | ||||
Sanderson Farms | 48,900 | 4,108,822 | ||||
Tootsie Roll Industries | 701,291 | 21,494,569 | ||||
82,951,656 | ||||||
HOUSEHOLD PRODUCTS - 0.0% | ||||||
WD-40 Company | 10,211 | 868,752 | ||||
PERSONAL PRODUCTS - 0.8% | ||||||
Nu Skin Enterprises Cl. A | 804,976 | 35,177,451 | ||||
Total (Cost $125,617,877) | 138,166,042 | |||||
ENERGY – 4.1% | ||||||
ENERGY EQUIPMENT & SERVICES - 3.3% | ||||||
CARBO Ceramics | 300,646 | 12,040,872 | ||||
Ensign Energy Services | 226,800 | 1,991,186 | ||||
Era Group 1 | 176,980 | 3,743,127 | ||||
Exterran Partners L.P. | 819,700 | 17,721,914 | ||||
Helmerich & Payne | 232,142 | 15,651,014 | ||||
Oil States International 1 | 190,205 | 9,301,025 | ||||
Pason Systems | 1,125,700 | 21,209,824 | ||||
Patterson-UTI Energy | 28,665 | 475,552 | ||||
Precision Drilling | 568,250 | 3,443,595 | ||||
RPC | 78,620 | 1,025,205 | ||||
SEACOR Holdings 1 | 460,690 | 34,003,529 | ||||
Tidewater | 864,313 | 28,012,384 | ||||
Total Energy Services | 207,223 | 2,315,161 | ||||
Trican Well Service | 200,000 | 958,857 | ||||
151,893,245 | ||||||
OIL, GAS & CONSUMABLE FUELS - 0.8% | ||||||
Cimarex Energy | 156,790 | 16,619,740 | ||||
Hugoton Royalty Trust | 558,500 | 4,724,910 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 49 |
Schedules of Investments |
Royce Total Return Fund (continued) | ||||||
SHARES | VALUE | |||||
ENERGY (continued) | ||||||
OIL, GAS & CONSUMABLE FUELS (continued) | ||||||
NuStar GP Holdings LLC | 369,200 | $ | 12,707,864 | |||
633,760 | 4,233,517 | |||||
Penn West Petroleum 3 | 32,100 | 66,768 | ||||
38,352,799 | ||||||
Total (Cost $176,942,448) | 190,246,044 | |||||
FINANCIALS – 26.4% | ||||||
BANKS - 4.2% | ||||||
Ames National | 423,068 | 10,974,384 | ||||
Associated Banc-Corp | 493,700 | 9,197,631 | ||||
Bank of Hawaii | 732,001 | 43,414,979 | ||||
BLOM Bank GDR | 684,500 | 7,016,125 | ||||
BOK Financial | 458,968 | 27,556,439 | ||||
Camden National | 194,540 | 7,750,474 | ||||
Canadian Western Bank | 933,200 | 26,305,991 | ||||
City Holding Company | 444,266 | 20,671,697 | ||||
Farmers & Merchants Bank of Long Beach 4 | 479 | 2,881,664 | ||||
First Citizens BancShares Cl. A | 97,026 | 24,527,202 | ||||
First National Bank Alaska 4 | 3,110 | 4,920,020 | ||||
Peapack-Gladstone Financial | 604,692 | 11,223,083 | ||||
196,439,689 | ||||||
CAPITAL MARKETS - 6.8% | ||||||
AGF Management Cl. B | 715,600 | 5,229,337 | ||||
AllianceBernstein Holding L.P. | 1,700,400 | 43,921,332 | ||||
Apollo Global Management LLC Cl. A | 595,600 | 14,044,248 | ||||
Apollo Investment | 1,161,400 | 8,617,588 | ||||
ASA Gold and Precious Metals | 578,892 | 5,852,598 | ||||
Ashmore Group | 1,704,000 | 7,387,673 | ||||
Banca Generali | 86,000 | 2,387,202 | ||||
Cohen & Steers | 285,337 | 12,006,981 | ||||
Coronation Fund Managers | 1,315,000 | 12,974,961 | ||||
Edmond de Rothschild (Suisse) | 205 | 3,149,643 | ||||
Egyptian Financial Group-Hermes Holding Company 1 | 1,032,032 | 2,224,266 | ||||
Federated Investors Cl. B | 800,423 | 26,357,929 | ||||
Fortress Investment Group LLC Cl. A | 237,530 | 1,904,991 | ||||
GAMCO Investors Cl. A | 278,300 | 24,752,002 | ||||
Janus Capital Group | 87,509 | 1,411,520 | ||||
KKR & Co. L.P. | 1,265,600 | 29,374,576 | ||||
Lazard Cl. A | 102,090 | 5,107,563 | ||||
Monroe Capital | 20,991 | 303,530 | ||||
MVC Capital | 475,000 | 4,669,250 | ||||
Oppenheimer Holdings Cl. A | 221,512 | 5,150,154 | ||||
Paris Orleans | 581,675 | 12,516,558 | ||||
Raymond James Financial | 418,525 | 23,977,297 | ||||
Schroders | 111,100 | 4,604,591 | ||||
SEI Investments | 554,670 | 22,208,987 | ||||
Teton Advisors Cl. A 4 | 1,297 | 67,444 | ||||
Value Partners Group | 12,112,900 | 10,116,404 | ||||
Vontobel Holding | 150,400 | 5,662,862 | ||||
Waddell & Reed Financial Cl. A | 365,400 | 18,204,228 | ||||
Westwood Holdings Group | 45,895 | 2,837,229 | ||||
317,022,944 | ||||||
CONSUMER FINANCE - 0.1% | ||||||
Cash America International | 66,300 | 1,499,706 | ||||
Nelnet Cl. A | 36,416 | 1,687,153 | ||||
3,186,859 | ||||||
DIVERSIFIED FINANCIAL SERVICES - 0.9% | ||||||
Leucadia National | 141,659 | 3,175,995 | ||||
Sofina | 279,572 | 29,385,941 | ||||
TMX Group | 184,000 | 8,013,772 | ||||
40,575,708 | ||||||
INSURANCE - 10.8% | ||||||
Alleghany Corporation 1 | 99,522 | 46,128,447 | ||||
Allied World Assurance Company Holdings | 521,914 | 19,790,979 | ||||
American Financial Group | 127,886 | 7,765,238 | ||||
American National Insurance | 159,593 | 18,235,096 | ||||
AmTrust Financial Services | 37,438 | 2,105,887 | ||||
Argo Group International Holdings | 16,600 | 920,802 | ||||
Aspen Insurance Holdings | 266,318 | 11,656,739 | ||||
Assurant | 37,512 | 2,566,946 | ||||
Assured Guaranty | 427,392 | 11,107,918 | ||||
Baldwin & Lyons Cl. B | 318,343 | 8,206,883 | ||||
Berkley (W.R.) | 34,347 | 1,760,627 | ||||
Cincinnati Financial | 280,000 | 14,512,400 | ||||
E-L Financial | 80,488 | 47,317,356 | ||||
EMC Insurance Group | 46,755 | 1,657,932 | ||||
Employers Holdings | 106,821 | 2,511,362 | ||||
Erie Indemnity Cl. A | 571,900 | 51,911,363 | ||||
Everest Re Group | 13,900 | 2,367,170 | ||||
First American Financial | 105,161 | 3,564,958 | ||||
FNF Group | 987,903 | 34,033,258 | ||||
Gallagher (Arthur J.) & Co. | 673,500 | 31,708,380 | ||||
HCI Group | 30,300 | 1,310,172 | ||||
Infinity Property & Casualty | 128,043 | 9,892,602 | ||||
Lancashire Holdings | 100,000 | 866,740 | ||||
Markel Corporation 1 | 67,900 | 46,364,836 | ||||
Mercury General | 177,300 | 10,047,591 | ||||
National Western Life Insurance Cl. A | 4,700 | 1,265,475 | ||||
Old Republic International | 799,820 | 11,701,367 | ||||
PartnerRe | 241,201 | 27,528,270 | ||||
Platinum Underwriters Holdings | 27,006 | 1,982,781 | ||||
ProAssurance Corporation | 182,000 | 8,217,300 | ||||
Reinsurance Group of America | 337,456 | 29,567,895 | ||||
RenaissanceRe Holdings | 22,209 | 2,159,159 | ||||
RLI Corp. | 182,070 | 8,994,258 | ||||
State Auto Financial | 392,000 | 8,710,240 | ||||
Symetra Financial | 175,800 | 4,052,190 | ||||
Torchmark Corporation | 53,200 | 2,881,844 | ||||
United Fire Group | 101,191 | 3,008,408 | ||||
White Mountains Insurance Group | 5,134 | 3,234,985 | ||||
501,615,854 | ||||||
INVESTMENT COMPANIES - 0.1% | ||||||
British Empire Securities and General Trust | 601,182 | 4,800,316 | ||||
RIT Capital Partners | 100,000 | 2,177,231 | ||||
6,977,547 | ||||||
REAL ESTATE INVESTMENT TRUSTS (REITS) - 1.7% | ||||||
Colony Financial | 411,049 | 9,791,187 | ||||
Cousins Properties | 421,710 | 4,815,929 | ||||
DCT Industrial Trust | 280,400 | 9,999,064 | ||||
Lexington Realty Trust | 707,006 | 7,762,926 | ||||
MFA Financial | 692,000 | 5,529,080 | ||||
National Health Investors | 159,570 | 11,163,517 | ||||
National Retail Properties | 600,000 | 23,622,000 | ||||
Rayonier | 315,000 | 8,801,100 | ||||
81,484,803 | ||||||
50 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Total Return Fund (continued) | ||||||
SHARES | VALUE | |||||
FINANCIALS (continued) | ||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.6% | ||||||
Alexander & Baldwin | 657,100 | $ | 25,797,746 | |||
Midland Holdings 1 | 1,500,000 | 757,871 | ||||
26,555,617 | ||||||
THRIFTS & MORTGAGE FINANCE - 1.2% | ||||||
Genworth MI Canada | 869,570 | 27,678,343 | ||||
TrustCo Bank Corp. NY | 3,691,044 | 26,796,979 | ||||
54,475,322 | ||||||
Total (Cost $799,745,467) | 1,228,334,343 | |||||
HEALTH CARE – 6.1% | ||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 3.1% | ||||||
Analogic Corporation | 243,300 | 20,585,613 | ||||
Atrion Corporation | 3,983 | 1,354,260 | ||||
Cantel Medical | 40,313 | 1,743,940 | ||||
DiaSorin | 30,000 | 1,209,823 | ||||
Hill-Rom Holdings | 534,570 | 24,387,083 | ||||
IDEXX Laboratories 1 | 141,400 | 20,965,378 | ||||
Meridian Bioscience | 26,800 | 441,128 | ||||
STERIS Corporation | 610,241 | 39,574,129 | ||||
Teleflex | 309,700 | 35,559,754 | ||||
145,821,108 | ||||||
HEALTH CARE PROVIDERS & SERVICES - 2.2% | ||||||
Chemed Corporation | 163,157 | 17,240,800 | ||||
Landauer 2 | 553,400 | 18,893,076 | ||||
MEDNAX 1 | 166,436 | 11,003,084 | ||||
Omnicare | 51,199 | 3,733,943 | ||||
Owens & Minor | 1,135,750 | 39,876,183 | ||||
U.S. Physical Therapy | 243,364 | 10,211,553 | ||||
100,958,639 | ||||||
HEALTH CARE TECHNOLOGY - 0.0% | ||||||
Computer Programs and Systems | 16,600 | 1,008,450 | ||||
LIFE SCIENCES TOOLS & SERVICES - 0.7% | ||||||
PerkinElmer | 712,600 | 31,161,998 | ||||
PHARMACEUTICALS - 0.1% | ||||||
Recordati | 110,000 | 1,710,180 | ||||
Santen Pharmaceutical | 15,000 | 802,739 | ||||
Vetoquinol | 26,811 | 1,164,617 | ||||
Virbac | 3,500 | 734,337 | ||||
4,411,873 | ||||||
Total (Cost $140,136,628) | 283,362,068 | |||||
INDUSTRIALS – 18.8% | ||||||
AEROSPACE & DEFENSE - 1.1% | ||||||
AAR Corporation | 43,200 | 1,200,096 | ||||
American Science and Engineering | 207,834 | 10,786,585 | ||||
Cubic Corporation | 29,299 | 1,542,299 | ||||
HEICO Corporation | 232,443 | 14,039,557 | ||||
HEICO Corporation Cl. A | 488,666 | 23,143,222 | ||||
National Presto Industries | 48,326 | 2,804,841 | ||||
53,516,600 | ||||||
AIR FREIGHT & LOGISTICS - 1.0% | ||||||
C. H. Robinson Worldwide | 256,000 | 19,171,840 | ||||
Expeditors International of Washington | 515,200 | 22,983,072 | ||||
UTi Worldwide 1 | 492,600 | 5,945,682 | ||||
48,100,594 | ||||||
BUILDING PRODUCTS - 0.6% | ||||||
A. O. Smith Corporation | 465,188 | 26,241,255 | ||||
AAON | 54,055 | 1,210,291 | ||||
27,451,546 | ||||||
COMMERCIAL SERVICES & SUPPLIES - 3.7% | ||||||
ABM Industries | 641,300 | 18,373,245 | ||||
Brady Corporation Cl. A | 1,443,235 | 39,458,045 | ||||
Ennis | 377,444 | 5,084,171 | ||||
Healthcare Services Group | 184,164 | 5,696,192 | ||||
HNI Corporation | 454,073 | 23,184,967 | ||||
Kimball International Cl. B | 724,600 | 6,608,352 | ||||
McGrath RentCorp | 291,300 | 10,446,018 | ||||
Ritchie Bros. Auctioneers | 1,384,820 | 37,237,810 | ||||
UniFirst Corporation | 158,204 | 19,213,876 | ||||
US Ecology | 40,305 | 1,617,037 | ||||
Viad Corporation | 208,906 | 5,569,434 | ||||
172,489,147 | ||||||
CONSTRUCTION & ENGINEERING - 0.5% | ||||||
Comfort Systems USA | 200,031 | 3,424,531 | ||||
EMCOR Group | 66,839 | 2,973,667 | ||||
Granite Construction | 182,175 | 6,926,294 | ||||
KBR | 523,572 | 8,874,545 | ||||
22,199,037 | ||||||
ELECTRICAL EQUIPMENT - 1.8% | ||||||
Acuity Brands | 11,668 | 1,634,337 | ||||
EnerSys | 19,800 | 1,222,056 | ||||
Franklin Electric | 733,800 | 27,539,514 | ||||
Hubbell Cl. B | 301,421 | 32,200,806 | ||||
LSI Industries | 1,047,551 | 7,112,871 | ||||
Preformed Line Products | 249,324 | 13,620,570 | ||||
83,330,154 | ||||||
INDUSTRIAL CONGLOMERATES - 0.2% | ||||||
Raven Industries | 283,502 | 7,087,550 | ||||
MACHINERY - 6.9% | ||||||
Actuant Corporation Cl. A | 35,800 | 975,192 | ||||
Alamo Group | 352,652 | 17,082,463 | ||||
American Railcar Industries | 234,309 | 12,066,913 | ||||
Briggs & Stratton | 655,340 | 13,382,043 | ||||
CIRCOR International | 25,700 | 1,549,196 | ||||
CLARCOR | 246,100 | 16,400,104 | ||||
Donaldson Company | 52,502 | 2,028,152 | ||||
Federal Signal | 258,869 | 3,996,937 | ||||
Foster (L.B.) Company | 25,000 | 1,214,250 | ||||
Gorman-Rupp Company (The) | 720,791 | 23,151,807 | ||||
Hillenbrand | 243,625 | 8,405,063 | ||||
Joy Global | 37,100 | 1,725,892 | ||||
Kadant | 15,700 | 670,233 | ||||
Kennametal | 156,075 | 5,585,924 | ||||
Lincoln Electric Holdings | 193,899 | 13,396,482 | ||||
Lindsay Corporation | 231,282 | 19,830,119 | ||||
Miller Industries | 384,649 | 7,996,853 | ||||
116,700 | 5,391,540 | |||||
Mueller Industries | 383,624 | 13,096,923 | ||||
Nordson Corporation | 276,900 | 21,587,124 | ||||
Oshkosh Corporation | 21,974 | 1,069,035 | ||||
Semperit AG Holding | 13,000 | 629,071 | ||||
Standex International | 49,531 | 3,826,765 | ||||
Starrett (L.S.) Company (The) Cl. A 2 | 529,400 | 10,550,942 | ||||
Sun Hydraulics | 19,349 | 761,964 | ||||
Tennant Company | 584,096 | 42,154,208 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 51 |
Schedules of Investments |
Royce Total Return Fund (continued) | ||||||
SHARES | VALUE | |||||
INDUSTRIALS (continued) | ||||||
MACHINERY (continued) | ||||||
Timken Company (The) | 13,632 | $ | 581,814 | |||
Toro Company (The) | 248,964 | 15,886,393 | ||||
Trinity Industries | 858,574 | 24,048,658 | ||||
Valmont Industries | 12,600 | 1,600,200 | ||||
Woodward | 609,200 | 29,990,916 | ||||
320,633,176 | ||||||
PROFESSIONAL SERVICES - 1.7% | ||||||
Corporate Executive Board | 236,000 | 17,117,080 | ||||
Exponent | 33,696 | 2,779,920 | ||||
Heidrick & Struggles International | 116,298 | 2,680,669 | ||||
Kelly Services Cl. A | 634,200 | 10,794,084 | ||||
ManpowerGroup | 433,252 | 29,534,789 | ||||
Michael Page International | 200,000 | 1,269,873 | ||||
Nihon M&A Center | 6,100 | 185,070 | ||||
Resources Connection | 81,633 | 1,342,863 | ||||
Towers Watson & Co. Cl. A | 107,800 | 12,199,726 | ||||
77,904,074 | ||||||
ROAD & RAIL - 0.2% | ||||||
ArcBest Corporation | 224,081 | 10,390,636 | ||||
TRADING COMPANIES & DISTRIBUTORS - 1.1% | ||||||
Aceto Corporation | 438,099 | 9,506,748 | ||||
Applied Industrial Technologies | 523,661 | 23,873,705 | ||||
Houston Wire & Cable 2 | 1,378,225 | 16,469,789 | ||||
MISUMI Group | 20,500 | 673,371 | ||||
Watsco | 9,702 | 1,038,114 | ||||
51,561,727 | ||||||
Total (Cost $459,320,177) | 874,664,241 | |||||
INFORMATION TECHNOLOGY – 8.2% | ||||||
COMMUNICATIONS EQUIPMENT - 2.0% | ||||||
ADTRAN | 402,429 | 8,772,952 | ||||
Bel Fuse Cl. A | 22,350 | 541,764 | ||||
Bel Fuse Cl. B | 74,000 | 2,023,160 | ||||
Black Box | 440,602 | 10,530,388 | ||||
Comtech Telecommunications | 40,684 | 1,282,360 | ||||
InterDigital | 21,400 | 1,132,060 | ||||
NETGEAR 1 | 812,056 | 28,892,952 | ||||
Plantronics | 519,376 | 27,537,316 | ||||
TESSCO Technologies | 333,659 | 9,676,111 | ||||
90,389,063 | ||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 2.5% | ||||||
AVX Corporation | 1,715,510 | 24,017,140 | ||||
Cognex Corporation 1 | 355,500 | 14,692,815 | ||||
CTS Corporation | 4,400 | 78,452 | ||||
Daktronics | 96,827 | 1,211,306 | ||||
Domino Printing Sciences | 110,000 | 1,124,335 | ||||
Electro Rent | 348,647 | 4,895,004 | ||||
FEI Company | 23,200 | 2,096,120 | ||||
FLIR Systems | 218,775 | 7,068,620 | ||||
Littelfuse | 49,323 | 4,768,054 | ||||
Methode Electronics | 534,096 | 19,499,845 | ||||
MTS Systems | 34,341 | 2,576,605 | ||||
Nam Tai Property | 580,500 | 2,757,375 | ||||
Park Electrochemical | 56,128 | 1,399,271 | ||||
Vishay Intertechnology | 2,266,638 | 32,072,928 | ||||
118,257,870 | ||||||
INTERNET SOFTWARE & SERVICES - 0.0% | ||||||
j2 Global | 21,800 | 1,351,600 | ||||
IT SERVICES - 2.0% | ||||||
Amdocs | 53,500 | 2,496,043 | ||||
Broadridge Financial Solutions | 621,800 | 28,714,724 | ||||
Calian Technologies | 274,004 | 4,162,653 | ||||
Convergys Corporation | 1,216,027 | 24,770,470 | ||||
Forrester Research | 42,804 | 1,684,765 | ||||
ManTech International Cl. A | 769,398 | 23,258,902 | ||||
MAXIMUS | 100,520 | 5,512,517 | ||||
Total System Services | 68,895 | 2,339,674 | ||||
92,939,748 | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.7% | ||||||
Brooks Automation | 84,581 | 1,078,408 | ||||
MKS Instruments | 751,919 | 27,520,236 | ||||
Power Integrations | 16,518 | 854,641 | ||||
Teradyne | 248,146 | 4,910,809 | ||||
34,364,094 | ||||||
SOFTWARE - 0.4% | ||||||
Ebix | 153,445 | 2,607,031 | ||||
Fair Isaac | 170,757 | 12,345,731 | ||||
Pegasystems | 132,508 | 2,752,191 | ||||
17,704,953 | ||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.6% | ||||||
Diebold | 842,018 | 29,167,503 | ||||
Total (Cost $304,220,672) | 384,174,831 | |||||
MATERIALS – 11.0% | ||||||
CHEMICALS - 5.1% | ||||||
Albemarle Corporation | 471,500 | 28,351,295 | ||||
Balchem Corporation | 641,549 | 42,752,826 | ||||
Cabot Corporation | 781,000 | 34,254,660 | ||||
Chase Corporation 2 | 773,974 | 27,855,324 | ||||
FutureFuel Corporation | 182,459 | 2,375,616 | ||||
Innophos Holdings | 6,985 | 408,273 | ||||
Innospec | 580,199 | 24,774,497 | ||||
International Flavors & Fragrances | 127,600 | 12,933,536 | ||||
Methanex Corporation | 310,710 | 14,239,839 | ||||
Minerals Technologies | 49,993 | 3,472,014 | ||||
NewMarket Corporation | 10,026 | 4,045,792 | ||||
Olin Corporation | 56,400 | 1,284,228 | ||||
Quaker Chemical | 433,029 | 39,855,989 | ||||
Victrex | 70,000 | 2,260,448 | ||||
Westlake Chemical | 21,399 | 1,307,265 | ||||
240,171,602 | ||||||
CONSTRUCTION MATERIALS - 0.2% | ||||||
Ash Grove Cement 4 | 39,610 | 7,981,415 | ||||
CONTAINERS & PACKAGING - 1.7% | ||||||
AptarGroup | 120,400 | 8,047,536 | ||||
Bemis Company | 489,800 | 22,143,858 | ||||
Greif Cl. A | 611,801 | 28,895,361 | ||||
Mayr-Melnhof Karton | 36,800 | 3,818,928 | ||||
Sonoco Products | 351,778 | 15,372,699 | ||||
78,278,382 | ||||||
METALS & MINING - 2.9% | ||||||
Agnico Eagle Mines | 787,000 | 19,588,430 | ||||
Ampco-Pittsburgh | 180,306 | 3,470,890 | ||||
Carpenter Technology | 315,675 | 15,546,994 | ||||
Commercial Metals | 85,000 | 1,384,650 | ||||
Franco-Nevada Corporation | 161,000 | 7,919,590 | ||||
Gold Fields ADR | 3,102,643 | 14,054,973 |
52 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Total Return Fund (continued) | ||||||
SHARES | VALUE | |||||
MATERIALS (continued) | ||||||
METALS & MINING (continued) | ||||||
1,056,620 | $ | 2,852,874 | ||||
Pan American Silver | 1,643,000 | 15,115,600 | ||||
Reliance Steel & Aluminum | 503,807 | 30,868,255 | ||||
†Sims Metal Management | 1,000,000 | 9,750,282 | ||||
Worthington Industries | 437,800 | 13,173,402 | ||||
133,725,940 | ||||||
PAPER & FOREST PRODUCTS - 1.1% | ||||||
Deltic Timber | 172,000 | 11,764,800 | ||||
Domtar Corporation | 526,100 | 21,159,742 | ||||
Schweitzer-Mauduit International | 466,754 | 19,743,694 | ||||
52,668,236 | ||||||
Total (Cost $346,269,483) | 512,825,575 | |||||
TELECOMMUNICATION SERVICES – 0.9% | ||||||
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.4% | ||||||
Atlantic Tele-Network | 275,703 | 18,634,766 | ||||
WIRELESS TELECOMMUNICATION SERVICES - 0.5% | ||||||
Spok Holdings | 91,666 | 1,591,322 | ||||
Telephone and Data Systems | 842,190 | �� | 21,265,297 | |||
22,856,619 | ||||||
Total (Cost $28,697,400) | 41,491,385 | |||||
UTILITIES – 2.8% | ||||||
ELECTRIC UTILITIES - 1.1% | ||||||
ALLETE | 175,747 | 9,690,690 | ||||
ITC Holdings | 750,000 | 30,322,500 | ||||
PNM Resources | 319,400 | 9,463,822 | ||||
49,477,012 | ||||||
GAS UTILITIES - 0.8% | ||||||
AGL Resources | 312,558 | 17,037,536 | ||||
National Fuel Gas | 16,826 | 1,169,912 | ||||
Piedmont Natural Gas | 539,500 | 21,261,695 | ||||
39,469,143 | ||||||
WATER UTILITIES - 0.9% | ||||||
Aqua America | 1,024,707 | 27,359,677 | ||||
SJW | 400,400 | 12,860,848 | ||||
40,220,525 | ||||||
Total (Cost $66,094,953) | 129,166,680 | |||||
MISCELLANEOUS5 – 3.4% | ||||||
Total (Cost $156,789,873) | 160,720,148 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $3,005,721,169) | 4,521,943,000 | |||||
REPURCHASE AGREEMENT – 2.3% | ||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $109,237,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% due 10/12/17, valued at $111,425,075) | ||||||
(Cost $109,237,000) | 109,237,000 | |||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 0.1% | ||||||
Money Market Funds | ||||||
Federated Government Obligations Fund (7 day yield-0.0099%) | ||||||
(Cost $5,893,087) | 5,893,087 | |||||
TOTAL INVESTMENTS – 99.5% | ||||||
(Cost $3,120,851,256) | $ | 4,637,073,087 | ||||
CASH AND OTHER ASSETS LESS LIABILITIES – 0.5% | 21,685,466 | |||||
NET ASSETS – 100.0% | $ | 4,658,758,553 | ||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 53 |
Schedules of Investments
Royce Heritage Fund | ||||||
Common Stocks – 96.7% | ||||||
SHARES | VALUE | |||||
CONSUMER DISCRETIONARY – 11.6% | ||||||
AUTO COMPONENTS - 2.1% | ||||||
BorgWarner | 11,600 | $ | 637,420 | |||
Drew Industries 1 | 54,900 | 2,803,743 | ||||
Gentex Corporation | 16,000 | 578,080 | ||||
Nokian Renkaat | 28,000 | 685,825 | ||||
Selamat Sempurna | 4,253,800 | 1,622,445 | ||||
Standard Motor Products | 31,183 | 1,188,696 | ||||
7,516,209 | ||||||
AUTOMOBILES - 0.6% | ||||||
Thor Industries | 39,450 | 2,204,072 | ||||
DISTRIBUTORS - 1.0% | ||||||
Core-Mark Holding Company | 57,100 | 3,536,203 | ||||
DIVERSIFIED CONSUMER SERVICES - 0.2% | ||||||
91,700 | 633,647 | |||||
HOUSEHOLD DURABLES - 2.4% | ||||||
Ethan Allen Interiors | 55,900 | 1,731,223 | ||||
Forbo Holding | 1,000 | 1,000,226 | ||||
Garmin | 25,500 | 1,347,165 | ||||
Mohawk Industries 1 | 17,900 | 2,780,944 | ||||
NVR 1 | 1,425 | 1,817,345 | ||||
8,676,903 | ||||||
INTERNET & CATALOG RETAIL - 0.3% | ||||||
Trade Me | 340,600 | 950,653 | ||||
MULTILINE RETAIL - 0.6% | ||||||
Dollar Tree 1 | 22,300 | 1,569,474 | ||||
New World Department Store China | 2,405,000 | 768,853 | ||||
2,338,327 | ||||||
SPECIALTY RETAIL - 3.6% | ||||||
Advance Auto Parts | 10,161 | 1,618,444 | ||||
Barnes & Noble 1 | 15,000 | 348,300 | ||||
Bed Bath & Beyond 1 | 60,200 | 4,585,434 | ||||
Destination Maternity | 42,100 | 671,495 | ||||
Luk Fook Holdings (International) | 250,000 | 936,211 | ||||
Matas | 54,400 | 1,240,790 | ||||
Monro Muffler Brake | 37,100 | 2,144,380 | ||||
USS | 86,300 | 1,328,070 | ||||
12,873,124 | ||||||
TEXTILES, APPAREL & LUXURY GOODS - 0.8% | ||||||
Forus | 113,800 | 473,804 | ||||
Wolverine World Wide | 80,200 | 2,363,494 | ||||
2,837,298 | ||||||
Total (Cost $31,415,561) | 41,566,436 | |||||
CONSUMER STAPLES – 0.6% | ||||||
FOOD & STAPLES RETAILING - 0.1% | ||||||
FamilyMart | 6,900 | 257,588 | ||||
FOOD PRODUCTS - 0.5% | ||||||
Darling Ingredients 1 | 95,500 | 1,734,280 | ||||
Total (Cost $1,463,374) | 1,991,868 | |||||
ENERGY – 4.2% | ||||||
ENERGY EQUIPMENT & SERVICES - 3.6% | ||||||
Core Laboratories | 8,200 | 986,788 | ||||
Ensign Energy Services | 24,800 | 217,731 | ||||
Helmerich & Payne | 33,300 | 2,245,086 | ||||
Pason Systems | 133,000 | 2,505,913 | ||||
TGS-NOPEC Geophysical | 68,000 | 1,471,271 | ||||
Tidewater | 30,600 | 991,746 | ||||
Transocean | 86,300 | 1,581,879 | ||||
Trican Well Service | 187,600 | 899,408 | ||||
Unit Corporation 1 | 64,600 | 2,202,860 | ||||
13,102,682 | ||||||
OIL, GAS & CONSUMABLE FUELS - 0.6% | ||||||
World Fuel Services | 43,500 | 2,041,455 | ||||
Total (Cost $19,986,020) | 15,144,137 | |||||
FINANCIALS – 17.1% | ||||||
CAPITAL MARKETS - 13.6% | ||||||
AllianceBernstein Holding L.P. | 139,641 | 3,606,927 | ||||
ARA Asset Management | 955,000 | 1,223,200 | ||||
Artisan Partners Asset Management Cl. A | 51,860 | 2,620,486 | ||||
Ashmore Group | 475,300 | 2,060,658 | ||||
Blackstone Group L.P. | 60,000 | 2,029,800 | ||||
CETIP - Mercados Organizados | 82,400 | 997,953 | ||||
Charles Schwab | 75,700 | 2,285,383 | ||||
Coronation Fund Managers | 200,000 | 1,973,378 | ||||
Egyptian Financial Group-Hermes Holding | ||||||
Company 1 | 298,500 | 643,336 | ||||
Federated Investors Cl. B | 89,000 | 2,930,770 | ||||
Invesco | 32,400 | 1,280,448 | ||||
Jupiter Fund Management | 455,600 | 2,557,830 | ||||
KKR & Co. L.P. | 211,000 | 4,897,310 | ||||
Lazard Cl. A | 39,500 | 1,976,185 | ||||
†Medley Management Cl. A | 202,700 | 2,979,690 | ||||
Partners Group Holding | 3,500 | 1,015,026 | ||||
SEI Investments | 94,900 | 3,799,796 | ||||
Sprott | 508,500 | 1,067,946 | ||||
State Street | 45,900 | 3,603,150 | ||||
TD Ameritrade Holding Corporation | 50,600 | 1,810,468 | ||||
Value Partners Group | 3,165,000 | 2,643,332 | ||||
WisdomTree Investments | 41,500 | 650,513 | ||||
48,653,585 | ||||||
CONSUMER FINANCE - 0.4% | ||||||
Shriram Transport Finance | 92,000 | 1,606,347 | ||||
DIVERSIFIED FINANCIAL SERVICES - 1.4% | ||||||
Bolsa Mexicana de Valores | 1,646,000 | 2,981,013 | ||||
JSE | 74,000 | 772,929 | ||||
Warsaw Stock Exchange | 114,000 | 1,468,924 | ||||
5,222,866 | ||||||
INSURANCE - 0.9% | ||||||
Marsh & McLennan | 53,900 | 3,085,236 | ||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.8% | ||||||
Brasil Brokers Participacoes | 605,000 | 575,363 | ||||
Jones Lang LaSalle | 2,800 | 419,804 | ||||
Kennedy-Wilson Holdings | 56,400 | 1,426,920 | ||||
LPS Brasil Consultoria de Imoveis | 121,000 | 292,471 | ||||
2,714,558 | ||||||
Total (Cost $46,271,081) | 61,282,592 | |||||
HEALTH CARE – 5.6% | ||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 3.3% | ||||||
Analogic Corporation | 16,660 | 1,409,603 | ||||
Atrion Corporation | 4,900 | 1,666,049 | ||||
DENTSPLY International | 101,500 | 5,406,905 | ||||
STERIS Corporation | 29,000 | 1,880,650 | ||||
Vascular Solutions 1 | 52,000 | 1,412,320 | ||||
11,775,527 | ||||||
54 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Heritage Fund (continued) | ||||||
SHARES | VALUE | |||||
HEALTH CARE (continued) | ||||||
HEALTH CARE PROVIDERS & SERVICES - 0.1% | ||||||
Raffles Medical Group | 158,000 | $ | 463,575 | |||
LIFE SCIENCES TOOLS & SERVICES - 1.8% | ||||||
Bio-Rad Laboratories Cl. A 1 | 6,400 | 771,584 | ||||
Bio-Techne | 20,200 | 1,866,480 | ||||
Mettler-Toledo International 1 | 8,200 | 2,480,172 | ||||
Waters Corporation 1 | 13,250 | 1,493,540 | ||||
6,611,776 | ||||||
PHARMACEUTICALS - 0.4% | ||||||
Recordati | 86,000 | 1,337,050 | ||||
Total (Cost $15,691,278) | 20,187,928 | |||||
INDUSTRIALS – 25.5% | ||||||
AEROSPACE & DEFENSE - 0.7% | ||||||
Curtiss-Wright | 8,500 | 600,015 | ||||
HEICO Corporation | 34,178 | 2,064,351 | ||||
2,664,366 | ||||||
AIR FREIGHT & LOGISTICS - 2.8% | ||||||
Expeditors International of Washington | 115,600 | 5,156,916 | ||||
Forward Air | 66,200 | 3,334,494 | ||||
UTi Worldwide 1 | 136,600 | 1,648,762 | ||||
10,140,172 | ||||||
COMMERCIAL SERVICES & SUPPLIES - 5.0% | ||||||
Cintas Corporation | 22,600 | 1,772,744 | ||||
Copart 1 | 175,380 | 6,399,616 | ||||
Healthcare Services Group | 31,700 | 980,481 | ||||
Heritage-Crystal Clean 1 | 144,327 | 1,779,552 | ||||
Kaba Holding | 2,400 | 1,210,160 | ||||
Ritchie Bros. Auctioneers | 208,508 | 5,606,780 | ||||
17,749,333 | ||||||
CONSTRUCTION & ENGINEERING - 1.9% | ||||||
Fluor Corporation | 17,100 | 1,036,773 | ||||
Jacobs Engineering Group 1 | 61,500 | 2,748,435 | ||||
KBR | 174,900 | 2,964,555 | ||||
6,749,763 | ||||||
ELECTRICAL EQUIPMENT - 0.2% | ||||||
EnerSys | 7,700 | 475,244 | ||||
Powell Industries | 2,700 | 132,489 | ||||
607,733 | ||||||
INDUSTRIAL CONGLOMERATES - 0.9% | ||||||
Carlisle Companies | 22,600 | 2,039,424 | ||||
Raven Industries | 50,400 | 1,260,000 | ||||
3,299,424 | ||||||
MACHINERY - 7.1% | ||||||
AGCO Corporation | 10,300 | 465,560 | ||||
Burckhardt Compression Holding | 2,000 | 765,745 | ||||
CIRCOR International | 21,000 | 1,265,880 | ||||
Donaldson Company | 82,400 | 3,183,112 | ||||
Foster (L.B.) Company | 33,700 | 1,636,809 | ||||
Graco | 30,400 | 2,437,472 | ||||
Kennametal | 62,600 | 2,240,454 | ||||
Mueller Industries | 32,500 | 1,109,550 | ||||
Pfeiffer Vacuum Technology | 12,000 | 996,096 | ||||
RBC Bearings | 65,700 | 4,239,621 | ||||
Rotork | 20,000 | 719,705 | ||||
Semperit AG Holding | 17,350 | 839,568 | ||||
Sun Hydraulics | 62,885 | 2,476,411 | ||||
Valmont Industries | 22,870 | 2,904,490 | ||||
16,600 | 134,792 | |||||
25,415,265 | ||||||
MARINE - 0.5% | ||||||
Clarkson | 57,100 | 1,685,455 | ||||
PROFESSIONAL SERVICES - 4.1% | ||||||
Advisory Board (The) 1 | 34,200 | 1,675,116 | ||||
Equifax | 24,150 | 1,953,011 | ||||
Exponent | 5,700 | 470,250 | ||||
Franklin Covey 1 | 31,000 | 600,160 | ||||
ManpowerGroup | 52,891 | 3,605,579 | ||||
RPX Corporation 1 | 46,500 | 640,770 | ||||
Towers Watson & Co. Cl. A | 32,500 | 3,678,025 | ||||
Verisk Analytics Cl. A 1 | 30,800 | 1,972,740 | ||||
14,595,651 | ||||||
ROAD & RAIL - 1.7% | ||||||
FRP Holdings 1 | 79,512 | 3,117,666 | ||||
Landstar System | 42,000 | 3,046,260 | ||||
6,163,926 | ||||||
TRADING COMPANIES & DISTRIBUTORS - 0.6% | ||||||
Applied Industrial Technologies | 33,062 | 1,507,297 | ||||
MSC Industrial Direct Cl. A | 9,070 | 736,937 | ||||
2,244,234 | ||||||
Total (Cost $75,141,671) | 91,315,322 | |||||
INFORMATION TECHNOLOGY – 18.5% | ||||||
COMMUNICATIONS EQUIPMENT - 0.5% | ||||||
ADTRAN | 28,650 | 624,570 | ||||
Plantronics | 22,100 | 1,171,742 | ||||
1,796,312 | ||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 8.4% | ||||||
Anixter International 1 | 48,800 | 4,316,848 | ||||
AVX Corporation | 211,963 | 2,967,482 | ||||
Coherent 1 | 59,500 | 3,612,840 | ||||
E2V Technologies | 362,000 | 973,917 | ||||
FEI Company | 31,100 | 2,809,885 | ||||
FLIR Systems | 92,800 | 2,998,368 | ||||
IPG Photonics 1 | 26,214 | 1,963,953 | ||||
LPKF Laser & Electronics 3 | 72,000 | 943,341 | ||||
National Instruments | 127,800 | 3,973,302 | ||||
Rogers Corporation 1 | 66,532 | 5,418,366 | ||||
29,978,302 | ||||||
INTERNET SOFTWARE & SERVICES - 0.4% | ||||||
Envestnet 1 | 30,200 | 1,484,028 | ||||
IT SERVICES - 2.6% | ||||||
Computer Task Group | 15,400 | 146,762 | ||||
eClerx Services | 72,000 | 1,488,646 | ||||
Fiserv 1 | 39,760 | 2,821,767 | ||||
MAXIMUS | 52,200 | 2,862,648 | ||||
Metrofile Holdings | 3,211,000 | 1,386,929 | ||||
Teradata Corporation 1 | 14,100 | 615,888 | ||||
9,322,640 | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.6% | ||||||
Diodes 1 | 179,700 | 4,954,329 | ||||
Lam Research | 19,500 | 1,547,130 | ||||
Silicon Image 1 | 65,500 | 361,560 | ||||
Teradyne | 83,600 | 1,654,444 | ||||
Veeco Instruments 1 | 27,400 | 955,712 | ||||
9,473,175 | ||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 55 |
Schedules of Investments
Royce Heritage Fund (continued) | ||||||
SHARES | VALUE | |||||
INFORMATION TECHNOLOGY (continued) | ||||||
SOFTWARE - 2.4% | ||||||
Advent Software | 12,700 | $ | 389,128 | |||
37,400 | 2,830,806 | |||||
Mentor Graphics | 77,600 | 1,700,992 | ||||
Rovi Corporation 1 | 75,000 | 1,694,250 | ||||
Silverlake Axis | 984,600 | 931,451 | ||||
Totvs | 73,900 | 972,351 | ||||
8,518,978 | ||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.6% | ||||||
†Diebold | 97,450 | 3,375,668 | ||||
Western Digital | 23,265 | 2,575,436 | ||||
5,951,104 | ||||||
Total (Cost $50,411,775) | 66,524,539 | |||||
MATERIALS – 8.6% | ||||||
CHEMICALS - 3.1% | ||||||
Airgas | 9,200 | 1,059,656 | ||||
Cabot Corporation | 48,700 | 2,135,982 | ||||
Innospec | 53,465 | 2,282,956 | ||||
Minerals Technologies | 19,100 | 1,326,495 | ||||
Quaker Chemical | 7,500 | 690,300 | ||||
Victrex | 45,700 | 1,475,749 | ||||
Westlake Chemical | 35,190 | 2,149,757 | ||||
11,120,895 | ||||||
CONTAINERS & PACKAGING - 0.8% | ||||||
Greif Cl. A | 57,800 | 2,729,894 | ||||
METALS & MINING - 3.3% | ||||||
Compass Minerals International | 29,600 | 2,570,168 | ||||
Fresnillo | 48,000 | 569,606 | ||||
Major Drilling Group International | 203,900 | 1,002,125 | ||||
Randgold Resources ADR | 31,600 | 2,130,156 | ||||
Reliance Steel & Aluminum | 71,880 | 4,404,088 | ||||
†Sims Metal Management | 131,800 | 1,285,087 | ||||
11,961,230 | ||||||
PAPER & FOREST PRODUCTS - 1.4% | ||||||
Glatfelter | 87,858 | 2,246,529 | ||||
Stella-Jones | 98,500 | 2,775,770 | ||||
5,022,299 | ||||||
Total (Cost $28,940,846) | 30,834,318 | |||||
UTILITIES – 0.5% | ||||||
GAS UTILITIES - 0.5% | ||||||
UGI Corporation | 44,400 | 1,686,312 | ||||
Total (Cost $1,314,777) | 1,686,312 | |||||
MISCELLANEOUS5 – 4.5% | ||||||
Total (Cost $16,946,532) | 16,327,660 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $287,582,915) | 346,861,112 | |||||
REPURCHASE AGREEMENT – 3.4% | ||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $12,085,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% due 10/12/17, valued at $12,328,050) | ||||||
(Cost $12,085,000) | $ | 12,085,000 | ||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 0.3% | ||||||
Money Market Funds | ||||||
Federated Government Obligations Fund (7 day yield-0.0099%) | ||||||
(Cost $964,385) | 964,385 | |||||
TOTAL INVESTMENTS – 100.4% | ||||||
(Cost $300,632,300) | 359,910,497 | |||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.4)% | (1,392,379) | |||||
NET ASSETS – 100.0% | $ | 358,518,118 | ||||
56 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Opportunity Fund | ||||||
Common Stocks – 93.0% | ||||||
SHARES | VALUE | |||||
CONSUMER DISCRETIONARY – 12.5% | ||||||
AUTO COMPONENTS - 1.9% | ||||||
Cooper Tire & Rubber | 274,600 | $ | 9,514,890 | |||
Dana Holding Corporation | 710,836 | 15,453,575 | ||||
Fuel Systems Solutions 1 | 566,700 | 6,199,698 | ||||
Spartan Motors | 809,117 | 4,255,955 | ||||
Tower International 1 | 318,154 | 8,128,835 | ||||
43,552,953 | ||||||
AUTOMOBILES - 0.1% | ||||||
Winnebago Industries | 149,000 | 3,242,240 | ||||
DISTRIBUTORS - 0.2% | ||||||
VOXX International Cl. A 1 | 489,413 | 4,287,258 | ||||
HOTELS, RESTAURANTS & LEISURE - 1.6% | ||||||
Belmond Cl. A 1 | 909,419 | 11,249,513 | ||||
Carrols Restaurant Group 1 | 1,119,405 | 8,541,060 | ||||
Krispy Kreme Doughnuts 1 | 411,061 | 8,114,344 | ||||
Ruby Tuesday 1 | 1,146,500 | 7,842,060 | ||||
35,746,977 | ||||||
HOUSEHOLD DURABLES - 2.7% | ||||||
845,735 | 7,755,390 | |||||
Ethan Allen Interiors | 186,500 | 5,775,905 | ||||
472,200 | 8,414,604 | |||||
M.D.C. Holdings | 385,950 | 10,216,096 | ||||
M/I Homes 1 | 378,500 | 8,690,360 | ||||
Standard Pacific 1 | 1,133,800 | 8,265,402 | ||||
TRI Pointe Homes 1 | 454,872 | 6,936,798 | ||||
ZAGG 1 | 748,381 | 5,081,507 | ||||
61,136,062 | ||||||
INTERNET & CATALOG RETAIL - 0.6% | ||||||
EVINE Live 1 | 1,265,406 | 8,339,026 | ||||
Gaiam Cl. A 1 | 853,962 | 6,088,749 | ||||
14,427,775 | ||||||
LEISURE PRODUCTS - 0.2% | ||||||
519,239 | 4,543,341 | |||||
MEDIA - 1.7% | ||||||
Ballantyne Strong 1 | 642,446 | 2,640,453 | ||||
Cinedigm Cl. A 1 | 894,686 | 1,449,391 | ||||
Entravision Communications Cl. A | 1,139,000 | 7,380,720 | ||||
Martha Stewart Living Omnimedia Cl. A 1 | 1,758,079 | 7,577,321 | ||||
McClatchy Company (The) Cl. A 1 | 2,360,769 | 7,837,753 | ||||
380,700 | 6,369,111 | |||||
New York Times Cl. A | 513,399 | 6,787,135 | ||||
40,041,884 | ||||||
MULTILINE RETAIL - 0.6% | ||||||
Bon-Ton Stores (The) | 241,765 | 1,791,479 | ||||
Hudson’s Bay | 212,200 | 4,485,825 | ||||
1,242,531 | 8,051,601 | |||||
14,328,905 | ||||||
SPECIALTY RETAIL - 2.3% | ||||||
Ascena Retail Group 1 | 410,560 | 5,156,634 | ||||
bebe stores | 1,440,284 | 3,154,222 | ||||
1,196,180 | 239,236 | |||||
Chico’s FAS | 415,600 | 6,736,876 | ||||
Destination Maternity | 250,037 | 3,988,090 | ||||
New York & Company 1 | 1,160,617 | 3,064,029 | ||||
923,701 | 2,013,668 | |||||
Rent-A-Center | 283,206 | 10,286,042 | ||||
315,245 | 4,145,472 | |||||
West Marine 1 | 1,070,924 | 13,836,338 | ||||
683,636 | 44,368 | |||||
52,664,975 | ||||||
TEXTILES, APPAREL & LUXURY GOODS - 0.6% | ||||||
1,006,782 | 2,224,988 | |||||
Unifi 1 | 418,067 | 12,429,132 | ||||
14,654,120 | ||||||
Total (Cost $257,901,830) | 288,626,490 | |||||
CONSUMER STAPLES – 1.2% | ||||||
FOOD & STAPLES RETAILING - 0.4% | ||||||
SUPERVALU 1 | 943,900 | 9,155,830 | ||||
HOUSEHOLD PRODUCTS - 0.3% | ||||||
Central Garden & Pet 1 | 902,664 | 7,925,390 | ||||
PERSONAL PRODUCTS - 0.5% | ||||||
511,020 | 10,930,718 | |||||
Total (Cost $25,164,765) | 28,011,938 | |||||
ENERGY – 2.1% | ||||||
ENERGY EQUIPMENT & SERVICES - 1.0% | ||||||
Basic Energy Services 1 | 197,395 | 1,383,739 | ||||
476,300 | 476,300 | |||||
Key Energy Services 1 | 1,075,500 | 1,796,085 | ||||
Matrix Service 1 | 216,128 | 4,823,977 | ||||
Newpark Resources 1 | 791,331 | 7,549,298 | ||||
Parker Drilling 1 | 532,000 | 1,633,240 | ||||
Willbros Group 1 | 800,200 | 5,017,254 | ||||
22,679,893 | ||||||
OIL, GAS & CONSUMABLE FUELS - 1.1% | ||||||
240,200 | 1,534,878 | |||||
Matador Resources 1 | 71,036 | 1,437,058 | ||||
Pengrowth Energy | 1,765,200 | 5,489,772 | ||||
Scorpio Tankers | 900,526 | 7,825,571 | ||||
173,218 | 446,902 | |||||
StealthGas 1 | 949,617 | 5,992,083 | ||||
671,951 | 2,721,402 | |||||
25,447,666 | ||||||
Total (Cost $75,080,917) | 48,127,559 | |||||
FINANCIALS – 10.3% | ||||||
BANKS - 4.8% | ||||||
BancorpSouth | 252,600 | 5,686,026 | ||||
BankUnited | 301,298 | 8,728,603 | ||||
Boston Private Financial Holdings | 917,446 | 12,357,998 | ||||
Capital Bank Financial Cl. A 1 | 277,800 | 7,445,040 | ||||
CenterState Banks | 341,541 | 4,067,753 | ||||
Columbia Banking System | 117,800 | 3,252,458 | ||||
Fidelity Southern | 217,140 | 3,498,125 | ||||
First Bancorp | 172,408 | 3,184,376 | ||||
First Internet Bancorp | 110,100 | 1,843,074 | ||||
Guaranty Bancorp | 232,258 | 3,353,806 | ||||
Hilltop Holdings 1 | 427,676 | 8,532,136 | ||||
Independent Bank Group | 64,600 | 2,523,276 | ||||
South State | 111,926 | 7,507,996 | ||||
Southern National Bancorp of Virginia | 218,015 | 2,463,569 | ||||
State Bank Financial | 383,959 | 7,671,501 | ||||
Trustmark Corporation | 389,900 | 9,568,146 | ||||
Umpqua Holdings | 568,800 | 9,675,288 | ||||
United Bankshares | 251,939 | 9,435,116 | ||||
110,794,287 | ||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 57 |
Schedules of Investments
Royce Opportunity Fund (continued) | ||||||
SHARES | VALUE | |||||
FINANCIALS (continued) | ||||||
CAPITAL MARKETS - 0.0% | ||||||
Harris & Harris Group 1 | 441,996 | $ | 1,303,888 | |||
CONSUMER FINANCE - 0.5% | ||||||
Cash America International | 135,300 | 3,060,486 | ||||
697,992 | 8,201,406 | |||||
11,261,892 | ||||||
INSURANCE - 1.8% | ||||||
Ambac Financial Group 1 | 296,546 | 7,265,377 | ||||
Assured Guaranty | 614,800 | 15,978,652 | ||||
MBIA 1 | 1,203,676 | 11,483,069 | ||||
Old Republic International | 488,238 | 7,142,922 | ||||
41,870,020 | ||||||
REAL ESTATE INVESTMENT TRUSTS (REITS) - 1.4% | ||||||
BRT Realty Trust 1 | 98,309 | 686,197 | ||||
LaSalle Hotel Properties | 199,600 | 8,077,812 | ||||
Mack-Cali Realty | 536,550 | 10,226,643 | ||||
RAIT Financial Trust | 274,000 | 2,101,580 | ||||
Rouse Properties | 630,933 | 11,684,879 | ||||
32,777,111 | ||||||
THRIFTS & MORTGAGE FINANCE - 1.8% | ||||||
Berkshire Hills Bancorp | 200,400 | 5,342,664 | ||||
Brookline Bancorp | 338,700 | 3,397,161 | ||||
MGIC Investment 1 | 619,485 | 5,773,600 | ||||
Radian Group | 704,000 | 11,770,880 | ||||
Walker & Dunlop 1 | 367,912 | 6,453,177 | ||||
Washington Federal | 392,400 | 8,691,660 | ||||
41,429,142 | ||||||
Total (Cost $184,397,582) | 239,436,340 | |||||
HEALTH CARE – 4.0% | ||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 2.3% | ||||||
872,900 | 6,590,395 | |||||
Alere 1 | 143,000 | 5,434,000 | ||||
AngioDynamics 1 | 478,840 | 9,102,748 | ||||
Exactech 1 | 294,283 | 6,936,250 | ||||
Invacare Corporation | 741,585 | 12,428,965 | ||||
Merit Medical Systems 1 | 537,028 | 9,306,695 | ||||
RTI Surgical 1 | 608,948 | 3,166,530 | ||||
52,965,583 | ||||||
HEALTH CARE PROVIDERS & SERVICES - 0.5% | ||||||
Kindred Healthcare | 125,400 | 2,279,772 | ||||
Owens & Minor | 192,100 | 6,744,631 | ||||
Select Medical Holdings | 182,414 | 2,626,762 | ||||
11,651,165 | ||||||
HEALTH CARE TECHNOLOGY - 0.4% | ||||||
Allscripts Healthcare Solutions 1 | 830,636 | 10,607,222 | ||||
LIFE SCIENCES TOOLS & SERVICES - 0.8% | ||||||
775,510 | 12,625,303 | |||||
Cambrex Corporation 1 | 257,567 | 5,568,598 | ||||
18,193,901 | ||||||
Total (Cost $62,988,564) | 93,417,871 | |||||
INDUSTRIALS – 20.1% | ||||||
AEROSPACE & DEFENSE - 0.7% | ||||||
Kratos Defense & Security Solutions 1 | 1,228,852 | 6,168,837 | ||||
702,037 | 9,898,722 | |||||
16,067,559 | ||||||
AIR FREIGHT & LOGISTICS - 1.4% | ||||||
Atlas Air Worldwide Holdings 1 | 347,462 | 17,129,876 | ||||
366,700 | 14,990,696 | |||||
32,120,572 | ||||||
AIRLINES - 0.7% | ||||||
267,432 | 6,966,603 | |||||
375,000 | 5,947,500 | |||||
Republic Airways Holdings 1 | 304,181 | 4,438,001 | ||||
17,352,104 | ||||||
BUILDING PRODUCTS - 3.5% | ||||||
Apogee Enterprises | 127,002 | 5,381,075 | ||||
Builders FirstSource 1 | 745,156 | 5,119,222 | ||||
Gibraltar Industries 1 | 403,887 | 6,567,202 | ||||
Griffon Corporation | 626,200 | 8,328,460 | ||||
Insteel Industries | 434,427 | 10,243,788 | ||||
NCI Building Systems 1 | 917,000 | 16,982,840 | ||||
PGT 1 | 729,108 | 7,021,310 | ||||
460,916 | 6,443,606 | |||||
Quanex Building Products | 790,586 | 14,847,205 | ||||
80,934,708 | ||||||
COMMERCIAL SERVICES & SUPPLIES - 1.5% | ||||||
ABM Industries | 355,700 | 10,190,805 | ||||
Interface | 836,416 | 13,775,772 | ||||
1,740,430 | 11,034,326 | |||||
35,000,903 | ||||||
CONSTRUCTION & ENGINEERING - 1.8% | ||||||
Aegion Corporation 1 | 679,289 | 12,641,568 | ||||
Ameresco Cl. A 1 | 159,569 | 1,116,983 | ||||
Furmanite Corporation 1 | 1,080,068 | 8,446,132 | ||||
705,117 | 6,726,816 | |||||
Northwest Pipe 1 | 386,556 | 11,643,067 | ||||
40,574,566 | ||||||
ELECTRICAL EQUIPMENT - 1.6% | ||||||
†Encore Wire | 342,540 | 12,787,018 | ||||
410,680 | 5,868,617 | |||||
General Cable | 833,943 | 12,425,751 | ||||
169,863 | 6,904,931 | |||||
37,986,317 | ||||||
MACHINERY - 6.4% | ||||||
Accuride Corporation 1 | 787,400 | 3,417,316 | ||||
Albany International Cl. A | 344,350 | 13,081,857 | ||||
Astec Industries | 388,928 | 15,288,760 | ||||
Barnes Group | 120,849 | 4,472,622 | ||||
Commercial Vehicle Group 1 | 1,246,240 | 8,299,958 | ||||
Dynamic Materials | 486,639 | 7,795,957 | ||||
Federal Signal | 1,074,132 | 16,584,598 | ||||
Hardinge | 597,497 | 7,122,164 | ||||
Hurco Companies | 206,791 | 7,049,505 | ||||
Lydall 1 | 142,297 | 4,670,188 | ||||
Meritor 1 | 742,621 | 11,250,708 | ||||
Mueller Industries | 552,121 | 18,849,411 | ||||
Mueller Water Products Cl. A | 1,789,076 | 18,320,138 | ||||
NN | 593,183 | 12,195,842 | ||||
148,399,024 | ||||||
MARINE - 0.6% | ||||||
Baltic Trading | 1,257,037 | 3,155,163 | ||||
Diana Shipping 1 | 959,600 | 6,438,916 | ||||
Navios Maritime Holdings | 1,154,749 | 4,746,018 | ||||
14,340,097 | ||||||
58 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Opportunity Fund (continued) | ||||||
SHARES | VALUE | |||||
INDUSTRIALS (continued) | ||||||
PROFESSIONAL SERVICES - 0.5% | ||||||
CTPartners Executive Search 1 | 216,725 | $ | 3,292,053 | |||
Hill International 1 | 538,407 | 2,067,483 | ||||
Hudson Global 1 | 382,822 | 1,186,748 | ||||
Kelly Services Cl. A | 266,300 | 4,532,426 | ||||
11,078,710 | ||||||
ROAD & RAIL - 0.6% | ||||||
Swift Transportation Cl. A 1 | 480,574 | 13,758,834 | ||||
TRADING COMPANIES & DISTRIBUTORS - 0.5% | ||||||
Kaman Corporation | 261,331 | 10,476,760 | ||||
TRANSPORTATION INFRASTRUCTURE - 0.3% | ||||||
Wesco Aircraft Holdings 1 | 556,800 | 7,784,064 | ||||
Total (Cost $352,114,066) | 465,874,218 | |||||
INFORMATION TECHNOLOGY – 29.6% | ||||||
COMMUNICATIONS EQUIPMENT - 2.6% | ||||||
ARRIS Group 1 | 337,100 | 10,177,049 | ||||
2,331,308 | 3,496,962 | |||||
479,500 | 9,307,095 | |||||
ClearOne 3 | 324,334 | 3,133,066 | ||||
Comtech Telecommunications | 197,100 | 6,212,592 | ||||
EMCORE Corporation 1 | 833,200 | 4,415,960 | ||||
Emulex Corporation 1 | 774,625 | 4,392,124 | ||||
Extreme Networks 1 | 1,884,576 | 6,652,553 | ||||
Harmonic 1 | 742,277 | 5,203,362 | ||||
Interphase Corporation 1 | 401,003 | 910,277 | ||||
1,283,277 | 2,284,233 | |||||
UTStarcom Holdings 1 | 1,172,528 | 3,318,254 | ||||
Westell Technologies Cl. A 1 | 309,057 | 463,586 | ||||
59,967,113 | ||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 8.9% | ||||||
Benchmark Electronics 1 | 580,700 | 14,773,008 | ||||
CTS Corporation | 428,180 | 7,634,449 | ||||
Daktronics | 651,125 | 8,145,574 | ||||
1,324,586 | 2,251,796 | |||||
Frequency Electronics 1 | 228,863 | 2,615,904 | ||||
GSI Group 1 | 518,825 | 7,637,104 | ||||
526,268 | 7,309,863 | |||||
II-VI 1 | 869,514 | 11,868,866 | ||||
Ingram Micro Cl. A 1 | 623,800 | 17,241,832 | ||||
KEMET Corporation 1 | 2,006,907 | 8,429,009 | ||||
333,000 | 7,842,150 | |||||
Maxwell Technologies 1 | 857,060 | 7,816,387 | ||||
Mercury Systems 1 | 854,678 | 11,897,118 | ||||
Newport Corporation 1 | 782,984 | 14,962,824 | ||||
Park Electrochemical | 351,234 | 8,756,264 | ||||
PCM 1 | 424,592 | 4,042,116 | ||||
Perceptron | 276,713 | 2,753,294 | ||||
1,079,499 | 9,035,407 | |||||
1,400,113 | 3,276,264 | |||||
Sanmina Corporation 1 | 827,323 | 19,466,910 | ||||
345,772 | 2,309,757 | |||||
TTM Technologies 1 | 906,925 | 6,829,145 | ||||
Vishay Intertechnology | 1,078,823 | 15,265,346 | ||||
Vishay Precision Group 1 | 191,542 | 3,286,861 | ||||
205,447,248 | ||||||
INTERNET SOFTWARE & SERVICES - 1.7% | ||||||
Bankrate 1 | 361,708 | 4,496,030 | ||||
Blucora 1 | 384,730 | 5,328,510 | ||||
EarthLink Holdings | 2,010,158 | 8,824,594 | ||||
Monster Worldwide 1 | 1,427,000 | 6,592,740 | ||||
Perficient 1 | 233,183 | 4,344,199 | ||||
QuinStreet 1 | 1,261,439 | 7,656,935 | ||||
Support.com 1 | 1,180,397 | 2,490,638 | ||||
39,733,646 | ||||||
IT SERVICES - 1.5% | ||||||
CIBER 1 | 1,741,873 | 6,183,649 | ||||
Computer Task Group | 710,314 | 6,769,293 | ||||
Datalink Corporation 1 | 751,309 | 9,691,886 | ||||
Unisys Corporation 1 | 410,300 | 12,095,644 | ||||
34,740,472 | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 11.2% | ||||||
Advanced Energy Industries 1 | 784,451 | 18,591,489 | ||||
Alpha & Omega Semiconductor 1 | 1,071,271 | 9,480,748 | ||||
Amtech Systems 1 | 252,710 | 2,565,006 | ||||
2,752,645 | 2,064,484 | |||||
Axcelis Technologies 1 | 1,345,794 | 3,445,233 | ||||
AXT 1 | 560,637 | 1,569,784 | ||||
Brooks Automation | 1,329,200 | 16,947,300 | ||||
806,549 | 2,653,546 | |||||
Cohu | 571,026 | 6,795,209 | ||||
200,700 | 6,466,554 | |||||
Exar Corporation 1 | 1,174,794 | 11,982,899 | ||||
Fairchild Semiconductor International 1 | 753,620 | 12,721,106 | ||||
FormFactor 1 | 902,761 | 7,763,745 | ||||
Integrated Silicon Solution | 263,275 | 4,362,467 | ||||
Intersil Corporation Cl. A | 868,899 | 12,572,968 | ||||
Kulicke & Soffa Industries 1 | 689,200 | 9,965,832 | ||||
Mattson Technology 1 | 795,800 | 2,705,720 | ||||
Microsemi Corporation 1 | 722,654 | 20,508,920 | ||||
Nanometrics 1 | 675,139 | 11,355,838 | ||||
983,558 | 3,324,426 | |||||
OmniVision Technologies 1 | 172,311 | 4,480,086 | ||||
1,221,199 | 16,535,034 | |||||
822,300 | 13,641,957 | |||||
800,506 | 3,658,312 | |||||
Rudolph Technologies 1 | 720,911 | 7,374,919 | ||||
956,840 | 1,052,524 | |||||
675,600 | 172,278 | |||||
537,478 | 10,486,196 | |||||
463,051 | 8,598,857 | |||||
97,453 | 2,517,211 | |||||
Ultra Clean Holdings 1 | 665,238 | 6,173,409 | ||||
Vitesse Semiconductor 1 | 906,078 | 3,424,975 | ||||
Xcerra Corporation 1 | 1,300,705 | 11,914,458 | ||||
257,873,490 | ||||||
SOFTWARE - 0.8% | ||||||
619,735 | 2,702,045 | |||||
Mentor Graphics | 519,719 | 11,392,240 | ||||
SeaChange International 1 | 560,700 | 3,577,266 | ||||
1,314,603 | 1,275,165 | |||||
18,946,716 | ||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 2.9% | ||||||
Avid Technology 1 | 1,078,780 | 15,329,464 | ||||
Cray 1 | 470,467 | 16,221,702 | ||||
Dot Hill Systems 1 | 1,501,671 | 6,637,386 | ||||
Intevac 1 | 744,247 | 5,782,799 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 59 |
Schedules of Investments
Royce Opportunity Fund (continued) | ||||||
SHARES | VALUE | |||||
INFORMATION TECHNOLOGY (continued) | ||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS (continued) | ||||||
QLogic Corporation 1 | 797,900 | $ | 10,628,028 | |||
1,150,473 | 13,092,383 | |||||
67,691,762 | ||||||
Total (Cost $574,993,145) | 684,400,447 | |||||
MATERIALS – 7.8% | ||||||
CHEMICALS - 1.9% | ||||||
Ferro Corporation 1 | 738,911 | 9,576,287 | ||||
Kraton Performance Polymers 1 | 641,200 | 13,330,548 | ||||
OM Group | 335,328 | 9,992,774 | ||||
Schulman (A.) | 247,819 | 10,044,104 | ||||
42,943,713 | ||||||
CONSTRUCTION MATERIALS - 0.2% | ||||||
U.S. Concrete 1 | 144,500 | 4,111,025 | ||||
METALS & MINING - 5.3% | ||||||
626,832 | 5,002,119 | |||||
1,278,300 | 7,593,102 | |||||
Carpenter Technology | 200,836 | 9,891,173 | ||||
Century Aluminum 1 | 470,904 | 11,490,058 | ||||
Commercial Metals | 1,137,061 | 18,522,724 | ||||
Haynes International | 274,687 | 13,322,319 | ||||
Kaiser Aluminum | 240,500 | 17,178,915 | ||||
422,211 | 371,799 | |||||
Noranda Aluminum Holding Corporation | 1,897,883 | 6,680,548 | ||||
Pan American Silver | 894,500 | 8,229,400 | ||||
RTI International Metals 1 | 728,269 | 18,396,075 | ||||
Synalloy Corporation | 324,567 | 5,715,625 | ||||
122,393,857 | ||||||
PAPER & FOREST PRODUCTS - 0.4% | ||||||
Louisiana-Pacific Corporation 1 | 628,400 | 10,406,304 | ||||
Total (Cost $144,807,919) | 179,854,899 | |||||
TELECOMMUNICATION SERVICES – 0.6% | ||||||
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.6% | ||||||
1,512,306 | 14,744,983 | |||||
Total (Cost $11,426,670) | 14,744,983 | |||||
MISCELLANEOUS5 – 4.8% | ||||||
Total (Cost $114,636,503) | 109,808,078 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $1,803,511,961) | 2,152,302,823 | |||||
REPURCHASE AGREEMENT – 7.1% | ||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $164,768,000 (collateralized by obligations of various U.S. Government Agencies, 1.10%- 2.625% due 12/18/17-1/31/18, valued at $168,065,400) | ||||||
(Cost $164,768,000) | 164,768,000 | |||||
PRINCIPAL | |||||||
AMOUNT | VALUE | ||||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 7.1% | |||||||
U.S. Treasury Bills | |||||||
due 1/8/15-11/12/15 | $ | 676 | 676 | ||||
U.S. Treasury Bonds | |||||||
0.75%-6.00% | |||||||
due 1/15/25-5/15/44 | 9,826 | 9,923 | |||||
U.S. Treasury Notes | |||||||
0.125%-4.25% | |||||||
due 2/28/15-8/15/24 | 760,390 | 764,795 | |||||
U.S. Treasury Strips-Interest | |||||||
due 8/15/18-11/15/25 | 2,221 | 2,218 | |||||
Money Market Funds | |||||||
Federated Government Obligations Fund (7 day yield- | |||||||
0.0099%) | 163,812,382 | ||||||
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED | |||||||
(Cost $164,589,994) | 164,589,994 | ||||||
TOTAL INVESTMENTS – 107.2% | |||||||
(Cost $2,132,869,955) | 2,481,660,817 | ||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (7.2)% | (166,291,527) | ||||||
NET ASSETS – 100.0% | $ | 2,315,369,290 | |||||
60 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Special Equity Fund | ||||||
Common Stocks – 94.6% | ||||||
SHARES | VALUE | |||||
CONSUMER DISCRETIONARY – 32.8% | ||||||
AUTO COMPONENTS - 4.7% | ||||||
†Dana Holding Corporation | 2,300,000 | $ | 50,002,000 | |||
Standard Motor Products 2 | 2,268,000 | 86,456,160 | ||||
136,458,160 | ||||||
HOTELS, RESTAURANTS & LEISURE - 0.7% | ||||||
Bowl America Cl. A 2 | 343,048 | 4,912,447 | ||||
Frisch’s Restaurants 2 | 505,100 | 13,536,680 | ||||
18,449,127 | ||||||
HOUSEHOLD DURABLES - 0.9% | ||||||
CSS Industries 2 | 972,385 | 26,876,721 | ||||
MEDIA - 7.9% | ||||||
Meredith Corporation 2 | 2,375,000 | 129,010,000 | ||||
Scholastic Corporation 2 | 2,725,000 | 99,244,500 | ||||
228,254,500 | ||||||
SPECIALTY RETAIL - 18.6% | ||||||
Bed Bath & Beyond 1 | 2,440,000 | 185,854,800 | ||||
Buckle (The) | 1,713,100 | 89,972,012 | ||||
Children’s Place 2 | 2,170,000 | 123,690,000 | ||||
Finish Line (The) Cl. A 2 | 4,775,000 | 116,080,250 | ||||
†Haverty Furniture | 985,163 | 21,683,438 | ||||
537,280,500 | ||||||
Total (Cost $736,006,208) | 947,319,008 | |||||
CONSUMER STAPLES – 6.6% | ||||||
FOOD & STAPLES RETAILING - 2.4% | ||||||
Weis Markets 2 | 1,486,100 | 71,065,302 | ||||
FOOD PRODUCTS - 1.3% | ||||||
Lancaster Colony | 390,000 | 36,519,600 | ||||
TOBACCO - 2.9% | ||||||
Universal Corporation 2 | 1,900,000 | 83,562,000 | ||||
Total (Cost $169,115,322) | 191,146,902 | |||||
ENERGY – 1.2% | ||||||
ENERGY EQUIPMENT & SERVICES - 1.2% | ||||||
RPC | 2,668,100 | 34,792,024 | ||||
Total (Cost $38,231,766) | 34,792,024 | |||||
FINANCIALS – 0.3% | ||||||
CAPITAL MARKETS - 0.3% | ||||||
†Waddell & Reed Financial Cl. A | 194,286 | 9,679,328 | ||||
Total (Cost $9,618,291) | 9,679,328 | |||||
HEALTH CARE – 2.5% | ||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 1.3% | ||||||
Atrion Corporation 2 | 115,000 | 39,101,150 | ||||
LIFE SCIENCES TOOLS & SERVICES - 1.2% | ||||||
Bio-Rad Laboratories Cl. A 1 | 280,000 | 33,756,800 | ||||
Total (Cost $23,339,995) | 72,857,950 | |||||
INDUSTRIALS – 23.2% | ||||||
AEROSPACE & DEFENSE - 1.3% | ||||||
National Presto Industries 2 | 656,500 | 38,103,260 | ||||
COMMERCIAL SERVICES & SUPPLIES - 6.5% | ||||||
UniFirst Corporation 2 | 1,542,278 | 187,309,663 | ||||
ELECTRICAL EQUIPMENT - 6.3% | ||||||
EnerSys | 1,175,000 | 72,521,000 | ||||
Hubbell Cl. B | 675,000 | 72,110,250 | ||||
Regal Beloit | 503,000 | 37,825,600 | ||||
182,456,850 | ||||||
INDUSTRIAL CONGLOMERATES - 1.5% | ||||||
Carlisle Companies | 490,000 | 44,217,600 | ||||
MACHINERY - 4.4% | ||||||
Foster (L.B.) Company 2 | 1,000,000 | 48,570,000 | ||||
Hurco Companies 2 | 479,319 | 16,339,985 | ||||
Valmont Industries | 480,300 | 60,998,100 | ||||
125,908,085 | ||||||
TRADING COMPANIES & DISTRIBUTORS - 3.2% | ||||||
Applied Industrial Technologies | 2,003,600 | 91,344,124 | ||||
Total (Cost $425,739,154) | 669,339,582 | |||||
INFORMATION TECHNOLOGY – 16.4% | ||||||
COMMUNICATIONS EQUIPMENT - 3.1% | ||||||
Plantronics | 1,675,000 | 88,808,500 | ||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 10.5% | ||||||
347,929 | 30,777,800 | |||||
AVX Corporation 2 | 9,900,000 | 138,600,000 | ||||
Park Electrochemical 2 | 1,458,382 | 36,357,463 | ||||
2,400,000 | 96,384,000 | |||||
302,119,263 | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.8% | ||||||
Teradyne | 4,115,100 | 81,437,829 | ||||
Total (Cost $380,963,033) | 472,365,592 | |||||
MATERIALS – 11.6% | ||||||
CHEMICALS - 5.4% | ||||||
Hawkins 2 | 955,432 | 41,398,869 | ||||
Minerals Technologies | 1,640,000 | 113,898,000 | ||||
155,296,869 | ||||||
METALS & MINING - 0.2% | ||||||
Central Steel & Wire 4 | 6,100 | 4,558,225 | ||||
PAPER & FOREST PRODUCTS - 6.0% | ||||||
1,272,808 | 76,712,138 | |||||
Schweitzer-Mauduit International 2 | 2,300,000 | 97,290,000 | ||||
174,002,138 | ||||||
Total (Cost $242,357,912) | 333,857,232 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $2,025,371,681) | 2,731,357,618 | |||||
REPURCHASE AGREEMENT – 5.9% | ||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $169,503,000 (collateralized by obligations of various U.S. Government Agencies, 0.75%- 2.125% due 10/31/17-6/30/21, valued at $172,897,723) | ||||||
(Cost $169,503,000) | 169,503,000 | |||||
TOTAL INVESTMENTS – 100.5% | ||||||
(Cost $2,194,874,681) | 2,900,860,618 | |||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.5)% | (13,154,222) | |||||
NET ASSETS – 100.0% | $ | 2,887,706,396 | ||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 61 |
Schedules of Investments
Royce Value Fund | ||||||
Common Stocks – 98.6% | ||||||
SHARES | VALUE | |||||
CONSUMER DISCRETIONARY – 28.2% | ||||||
AUTO COMPONENTS - 3.5% | ||||||
Dorman Products 1 | 107,913 | $ | 5,208,960 | |||
Gentex Corporation | 546,053 | 19,728,895 | ||||
†STRATTEC SECURITY | 75,500 | 6,234,790 | ||||
31,172,645 | ||||||
AUTOMOBILES - 2.0% | ||||||
Thor Industries | 321,260 | 17,948,796 | ||||
HOUSEHOLD DURABLES - 1.5% | ||||||
NVR 1 | 10,078 | 12,852,776 | ||||
MEDIA - 0.1% | ||||||
Saga Communications Cl. A | 22,479 | 977,387 | ||||
SPECIALTY RETAIL - 15.7% | ||||||
American Eagle Outfitters | 1,311,986 | 18,210,366 | ||||
Ascena Retail Group 1 | 1,549,264 | 19,458,756 | ||||
Buckle (The) | 529,347 | 27,801,304 | ||||
†DSW Cl. A | 553,855 | 20,658,791 | ||||
GameStop Corporation Cl. A | 629,107 | 21,263,817 | ||||
Genesco 1 | 339,514 | 26,013,563 | ||||
Stein Mart | 354,887 | 5,188,448 | ||||
138,595,045 | ||||||
TEXTILES, APPAREL & LUXURY GOODS - 5.4% | ||||||
G-III Apparel Group 1 | 125,002 | 12,626,452 | ||||
†Movado Group | 285,000 | 8,085,450 | ||||
Steven Madden 1 | 751,805 | 23,929,953 | ||||
Vera Bradley 1 | 136,253 | 2,776,836 | ||||
47,418,691 | ||||||
Total (Cost $179,940,659) | 248,965,340 | |||||
CONSUMER STAPLES – 2.8% | ||||||
FOOD & STAPLES RETAILING - 0.1% | ||||||
Village Super Market Cl. A | 14,871 | 407,019 | ||||
PERSONAL PRODUCTS - 2.7% | ||||||
Nu Skin Enterprises Cl. A | 551,107 | 24,083,376 | ||||
Total (Cost $34,545,897) | 24,490,395 | |||||
ENERGY – 8.6% | ||||||
ENERGY EQUIPMENT & SERVICES - 8.0% | ||||||
Atwood Oceanics 1 | 603,228 | 17,113,578 | ||||
Helmerich & Payne | 214,599 | 14,468,265 | ||||
436,369 | 9,739,756 | |||||
Oil States International 1 | 252,347 | 12,339,768 | ||||
Unit Corporation 1 | 503,326 | 17,163,417 | ||||
70,824,784 | ||||||
OIL, GAS & CONSUMABLE FUELS - 0.6% | ||||||
Cimarex Energy | 49,692 | 5,267,352 | ||||
Total (Cost $79,560,729) | 76,092,136 | |||||
FINANCIALS – 12.0% | ||||||
BANKS - 1.0% | ||||||
†City Holding Company | 194,848 | 9,066,278 | ||||
CAPITAL MARKETS - 0.6% | ||||||
Federated Investors Cl. B | 170,226 | 5,605,542 | ||||
INSURANCE - 7.6% | ||||||
Allied World Assurance Company Holdings | 383,523 | 14,543,192 | ||||
Aspen Insurance Holdings | 52,767 | 2,309,611 | ||||
PartnerRe | 200,974 | 22,937,163 | ||||
Reinsurance Group of America | 305,942 | 26,806,638 | ||||
66,596,604 | ||||||
THRIFTS & MORTGAGE FINANCE - 2.8% | ||||||
Genworth MI Canada | 773,000 | 24,604,528 | ||||
Total (Cost $68,586,902) | 105,872,952 | |||||
HEALTH CARE – 1.9% | ||||||
HEALTH CARE PROVIDERS & SERVICES - 1.9% | ||||||
Chemed Corporation | 68,879 | 7,278,444 | ||||
MEDNAX 1 | 143,028 | 9,455,581 | ||||
Total (Cost $6,506,533) | 16,734,025 | |||||
INDUSTRIALS – 8.1% | ||||||
COMMERCIAL SERVICES & SUPPLIES - 1.6% | ||||||
UniFirst Corporation | 119,394 | 14,500,401 | ||||
CONSTRUCTION & ENGINEERING - 1.6% | ||||||
514,909 | 14,108,507 | |||||
MACHINERY - 0.7% | ||||||
Kennametal | 160,193 | 5,733,307 | ||||
ROAD & RAIL - 0.9% | ||||||
Knight Transportation | 232,062 | 7,811,207 | ||||
TRADING COMPANIES & DISTRIBUTORS - 3.3% | ||||||
†Aceto Corporation | 324,233 | 7,035,856 | ||||
Applied Industrial Technologies | 478,198 | 21,801,047 | ||||
28,836,903 | ||||||
Total (Cost $55,818,134) | 70,990,325 | |||||
INFORMATION TECHNOLOGY – 26.1% | ||||||
COMMUNICATIONS EQUIPMENT - 8.1% | ||||||
†Brocade Communications Systems | 2,257,811 | 26,732,482 | ||||
NETGEAR 1 | 734,154 | 26,121,199 | ||||
Plantronics | 353,743 | 18,755,454 | ||||
71,609,135 | ||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 9.3% | ||||||
381,025 | 9,693,276 | |||||
1,117,227 | 19,819,607 | |||||
†PC Connection | 550,241 | 13,508,417 | ||||
Rofin-Sinar Technologies 1 | 160,800 | 4,626,216 | ||||
180,610 | 7,253,298 | |||||
Vishay Intertechnology | 1,892,943 | 26,785,143 | ||||
81,685,957 | ||||||
IT SERVICES - 5.0% | ||||||
Convergys Corporation | 1,097,605 | 22,358,214 | ||||
ManTech International Cl. A | 719,168 | 21,740,448 | ||||
44,098,662 | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 3.7% | ||||||
MKS Instruments | 578,823 | 21,184,922 | ||||
Synaptics 1 | 32,932 | 2,267,039 | ||||
Teradyne | 477,561 | 9,450,932 | ||||
32,902,893 | ||||||
Total (Cost $198,131,212) | 230,296,647 | |||||
MATERIALS – 9.1% | ||||||
CHEMICALS - 4.9% | ||||||
Innophos Holdings | 55,888 | 3,266,654 | ||||
Innospec | 567,519 | 24,233,061 | ||||
Westlake Chemical | 249,226 | 15,225,216 | ||||
42,724,931 | ||||||
METALS & MINING - 2.6% | ||||||
Reliance Steel & Aluminum | 375,343 | 22,997,266 | ||||
62 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Value Fund (continued) | |||||||
SHARES | VALUE | ||||||
MATERIALS (continued) | |||||||
PAPER & FOREST PRODUCTS - 1.6% | |||||||
Schweitzer-Mauduit International | $ | 340,100 | $ | 14,386,230 | |||
Total (Cost $65,472,628) | 80,108,427 | ||||||
MISCELLANEOUS5 – 1.8% | |||||||
Total (Cost $14,471,294) | 15,815,523 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $703,033,988) | 869,365,770 | ||||||
REPURCHASE AGREEMENT – 1.8% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $16,293,000 (collateralized by obligations of various U.S. Government Agencies, 0.625% due 9/30/17, valued at $16,622,100) | |||||||
(Cost $16,293,000) | 16,293,000 | ||||||
TOTAL INVESTMENTS – 100.4% | |||||||
(Cost $719,326,988) | 885,658,770 | ||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.4)% | (3,831,799 | ) | |||||
NET ASSETS – 100.0% | $ | 881,826,971 | |||||
Royce Value Plus Fund | |||||||
Common Stocks – 98.1% | |||||||
SHARES | VALUE | ||||||
CONSUMER DISCRETIONARY – 17.5% | |||||||
AUTO COMPONENTS - 1.5% | |||||||
†Gentherm1 | 372,900 | $ | 13,655,598 | ||||
HOTELS, RESTAURANTS & LEISURE - 1.3% | |||||||
Buffalo Wild Wings1 | 66,900 | 12,067,422 | |||||
HOUSEHOLD DURABLES - 1.6% | |||||||
264,000 | 9,166,080 | ||||||
UCP Cl. A1 | 580,000 | 6,090,000 | |||||
15,256,080 | |||||||
MEDIA - 1.8% | |||||||
307,000 | 9,486,300 | ||||||
†Rentrak Corporation1 | 102,345 | 7,452,763 | |||||
16,939,063 | |||||||
SPECIALTY RETAIL - 6.7% | |||||||
371,000 | 6,752,200 | ||||||
721,077 | 13,794,203 | ||||||
Monro Muffler Brake | 117,000 | 6,762,600 | |||||
Tractor Supply | 161,000 | 12,690,020 | |||||
Zumiez1 | 572,800 | 22,127,264 | |||||
62,126,287 | |||||||
TEXTILES, APPAREL & LUXURY GOODS - 4.6% | |||||||
Carter’s | 221,300 | 19,321,703 | |||||
†Columbia Sportswear | 238,000 | 10,600,520 | |||||
Gildan Activewear | 217,833 | 12,318,456 | |||||
42,240,679 | |||||||
Total (Cost $116,840,399) | 162,285,129 | ||||||
CONSUMER STAPLES – 3.6% | |||||||
FOOD & STAPLES RETAILING - 1.0% | |||||||
United Natural Foods1 | 118,617 | 9,172,059 | |||||
FOOD PRODUCTS - 2.4% | |||||||
Snyder’s-Lance | 300,000 | 9,165,000 | |||||
SunOpta1 | 1,056,000 | 12,513,600 | |||||
21,678,600 | |||||||
PERSONAL PRODUCTS - 0.2% | |||||||
Female Health3 | 506,000 | 1,983,520 | |||||
Total (Cost $24,644,432) | 32,834,179 | ||||||
ENERGY – 4.0% | |||||||
ENERGY EQUIPMENT & SERVICES - 2.4% | |||||||
Canadian Energy Services & Technology | 1,031,000 | 5,635,092 | |||||
Helmerich & Payne | 44,000 | 2,966,480 | |||||
Pason Systems | 474,000 | 8,930,849 | |||||
Trican Well Service | 279,200 | 1,338,564 | |||||
Unit Corporation1 | 93,200 | 3,178,120 | |||||
22,049,105 | |||||||
OIL, GAS & CONSUMABLE FUELS - 1.6% | |||||||
†Navigator Holdings1 | 356,000 | 7,497,360 | |||||
Sprott Resource1 | 1,475,000 | 2,386,814 | |||||
1,108,600 | 5,299,108 | ||||||
15,183,282 | |||||||
Total (Cost $51,019,518) | 37,232,387 | ||||||
FINANCIALS – 9.8% | |||||||
BANKS - 3.9% | |||||||
Associated Banc-Corp | 521,900 | 9,722,997 | |||||
Columbia Banking System | 287,500 | 7,937,875 | |||||
Enterprise Financial Services | 441,500 | 8,710,795 | |||||
Umpqua Holdings | 582,800 | 9,913,428 | |||||
36,285,095 | |||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 63 |
Schedules of Investments |
Royce Value Plus Fund (continued) | |||||||
SHARES | VALUE | ||||||
FINANCIALS (continued) | |||||||
CAPITAL MARKETS - 3.1% | |||||||
†Financial Engines | 311,800 | $ | 11,396,290 | ||||
Northern Trust | 167,000 | 11,255,800 | |||||
Oaktree Capital Group LLC Cl. A | 112,800 | 5,846,424 | |||||
28,498,514 | |||||||
DIVERSIFIED FINANCIAL SERVICES - 1.3% | |||||||
PICO Holdings1 | 636,222 | 11,992,785 | |||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.5% | |||||||
Jones Lang LaSalle | 91,000 | 13,643,630 | |||||
Total (Cost $76,851,148) | 90,420,024 | ||||||
HEALTH CARE – 15.2% | |||||||
BIOTECHNOLOGY - 6.6% | |||||||
Actelion | 144,800 | 16,658,832 | |||||
340,500 | 10,981,125 | ||||||
650,993 | 22,172,821 | ||||||
1,182,000 | 8,935,920 | ||||||
50,000 | 2,588,500 | ||||||
61,337,198 | |||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 2.7% | |||||||
1,939,500 | 12,102,480 | ||||||
†Inogen1 | 401,755 | 12,603,054 | |||||
24,705,534 | |||||||
HEALTH CARE PROVIDERS & SERVICES - 0.3% | |||||||
94,808 | 2,931,464 | ||||||
LIFE SCIENCES TOOLS & SERVICES - 1.2% | |||||||
†Cambrex Corporation1 | 499,500 | 10,799,190 | |||||
PHARMACEUTICALS - 4.4% | |||||||
143,000 | 4,174,170 | ||||||
†Avanir Pharmaceuticals1 | 164,000 | 2,779,800 | |||||
325,000 | 6,028,750 | ||||||
Medicines Company (The)1 | 183,100 | 5,066,377 | |||||
221,000 | 6,806,800 | ||||||
UCB | 215,000 | 16,316,396 | |||||
41,172,293 | |||||||
Total (Cost $100,473,471) | 140,945,679 | ||||||
INDUSTRIALS – 15.3% | |||||||
BUILDING PRODUCTS - 1.0% | |||||||
Apogee Enterprises | 213,398 | 9,041,673 | |||||
COMMERCIAL SERVICES & SUPPLIES - 2.1% | |||||||
Mobile Mini | 432,500 | 17,520,575 | |||||
Ritchie Bros. Auctioneers | 74,000 | 1,989,860 | |||||
19,510,435 | |||||||
ELECTRICAL EQUIPMENT - 3.6% | |||||||
Acuity Brands | 91,095 | 12,759,677 | |||||
3,485,000 | 2,576,460 | ||||||
EnerSys | 232,800 | 14,368,416 | |||||
302,295 | 4,017,501 | ||||||
33,722,054 | |||||||
MACHINERY - 5.5% | |||||||
†KUKA | 151,900 | 10,777,560 | |||||
†Middleby Corporation1 | 89,000 | 8,819,900 | |||||
Tennant Company | 216,937 | 15,656,344 | |||||
Wabtec Corporation | 181,464 | 15,767,407 | |||||
51,021,211 | |||||||
PROFESSIONAL SERVICES - 2.4% | |||||||
846,786 | 22,109,582 | ||||||
ROAD & RAIL - 0.7% | |||||||
Celadon Group | 279,600 | 6,344,124 | |||||
Total (Cost $107,458,130) | 141,749,079 | ||||||
INFORMATION TECHNOLOGY – 22.9% | |||||||
COMMUNICATIONS EQUIPMENT - 5.0% | |||||||
EXFO1 | 2,247,234 | 7,752,957 | |||||
Infinera Corporation1 | 928,233 | 13,663,590 | |||||
Numerex Corporation Cl. A1 | 909,300 | 10,056,858 | |||||
319,500 | 15,141,105 | ||||||
46,614,510 | |||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 10.0% | |||||||
FLIR Systems | 417,600 | 13,492,656 | |||||
IPG Photonics1 | 317,132 | 23,759,529 | |||||
Littelfuse | 132,744 | 12,832,363 | |||||
Mercury Systems1 | 1,196,749 | 16,658,746 | |||||
Rogers Corporation1 | 313,893 | 25,563,446 | |||||
92,306,740 | |||||||
INTERNET SOFTWARE & SERVICES - 2.4% | |||||||
HomeAway1 | 392,500 | 11,688,650 | |||||
†SPS Commerce1 | 178,600 | 10,114,118 | |||||
21,802,768 | |||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 1.7% | |||||||
†Cavium1 | 259,000 | 16,011,380 | |||||
SOFTWARE - 2.9% | |||||||
Absolute Software | 1,444,200 | 10,093,737 | |||||
Manhattan Associates1 | 292,000 | 11,890,240 | |||||
4,000 | 162,240 | ||||||
PTC1 | 127,000 | 4,654,550 | |||||
26,800,767 | |||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.9% | |||||||
Immersion Corporation1 | 880,595 | 8,339,235 | |||||
Total (Cost $135,541,186) | 211,875,400 | ||||||
MATERIALS – 4.7% | |||||||
CONSTRUCTION MATERIALS - 0.9% | |||||||
Eagle Materials | 107,500 | 8,173,225 | |||||
METALS & MINING - 3.8% | |||||||
839,853 | 13,294,873 | ||||||
Reliance Steel & Aluminum | 116,700 | 7,150,209 | |||||
Worthington Industries | 480,166 | 14,448,195 | |||||
34,893,277 | |||||||
Total (Cost $25,749,655) | 43,066,502 | ||||||
TELECOMMUNICATION SERVICES – 1.0% | |||||||
DIVERSIFIED TELECOMMUNICATION SERVICES - 1.0% | |||||||
ORBCOMM1 | 1,474,000 | 9,639,960 | |||||
Total (Cost $9,503,993) | 9,639,960 | ||||||
MISCELLANEOUS 5 – 4.1% | |||||||
Total (Cost $33,024,223) | 38,013,784 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $681,106,155) | 908,062,123 | ||||||
64 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Value Plus Fund (continued) | |||||||
VALUE | |||||||
REPURCHASE AGREEMENT – 2.4% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $22,541,000 (collateralized by obligations of various U.S. Government Agencies, 1.00% due 9/27/17, valued at $22,995,000) | |||||||
(Cost $22,541,000) | $ | 22,541,000 | |||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 11.3% | |||||||
Money Market Funds | |||||||
Federated Government Obligations Fund (7 day yield-0.0099%) | |||||||
(Cost $104,586,929) | 104,586,929 | ||||||
TOTAL INVESTMENTS – 111.8% | |||||||
(Cost $808,234,084) | 1,035,190,052 | ||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (11.8)% | (109,146,038 | ) | |||||
NET ASSETS – 100.0% | $ | 926,044,014 | |||||
Royce 100 Fund | |||||||
Common Stocks – 95.2% | |||||||
SHARES | VALUE | ||||||
CONSUMER DISCRETIONARY – 10.9% | |||||||
AUTO COMPONENTS - 1.6% | |||||||
Drew Industries 1 | 40,786 | $ | 2,082,941 | ||||
Gentex Corporation | 38,702 | 1,398,303 | |||||
3,481,244 | |||||||
DIVERSIFIED CONSUMER SERVICES - 1.4% | |||||||
†Liberty Tax 1 | 90,629 | 3,239,081 | |||||
HOUSEHOLD DURABLES - 1.4% | |||||||
Ethan Allen Interiors | 101,640 | 3,147,791 | |||||
INTERNET & CATALOG RETAIL - 0.3% | |||||||
FTD Companies 1 | 18,910 | 658,446 | |||||
MEDIA - 1.1% | |||||||
Morningstar | 17,712 | 1,146,144 | |||||
Wiley (John) & Sons Cl. A | 20,800 | 1,232,192 | |||||
2,378,336 | |||||||
SPECIALTY RETAIL - 4.0% | |||||||
Buckle (The) | 97,210 | 5,105,469 | |||||
Destination Maternity | 77,100 | 1,229,745 | |||||
†Genesco 1 | 33,360 | 2,556,043 | |||||
8,891,257 | |||||||
TEXTILES, APPAREL & LUXURY GOODS - 1.1% | |||||||
†Movado Group | 84,560 | 2,398,967 | |||||
Total (Cost $19,659,191) | 24,195,122 | ||||||
CONSUMER STAPLES – 1.1% | |||||||
FOOD PRODUCTS - 1.1% | |||||||
Darling Ingredients 1 | 63,390 | 1,151,162 | |||||
Sanderson Farms | 13,840 | 1,162,906 | |||||
Total (Cost $1,172,770) | 2,314,068 | ||||||
ENERGY – 8.3% | |||||||
ENERGY EQUIPMENT & SERVICES - 8.3% | |||||||
Helmerich & Payne | 28,655 | 1,931,920 | |||||
Oil States International 1 | 62,710 | 3,066,519 | |||||
Pason Systems | 199,780 | 3,764,146 | |||||
SEACOR Holdings 1 | 42,500 | 3,136,925 | |||||
†TGS-NOPEC Geophysical | 133,550 | 2,889,533 | |||||
Unit Corporation 1 | 104,500 | 3,563,450 | |||||
Total (Cost $15,686,160) | 18,352,493 | ||||||
FINANCIALS – 8.4% | |||||||
CAPITAL MARKETS - 7.4% | |||||||
AllianceBernstein Holding L.P. | 45,469 | 1,174,464 | |||||
†Artisan Partners Asset Management CI. A | 49,230 | 2,487,592 | |||||
Federated Investors Cl. B | 91,740 | 3,020,998 | |||||
Lazard Cl. A | 43,300 | 2,166,299 | |||||
SEI Investments | 71,000 | 2,842,840 | |||||
Silvercrest Asset Management Group Cl. A | 150,000 | 2,347,500 | |||||
Westwood Holdings Group | 38,900 | 2,404,798 | |||||
16,444,491 | |||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.0% | |||||||
†Marcus & Millichap 1 | 63,290 | 2,104,393 | |||||
Total (Cost $12,993,768) | 18,548,884 | ||||||
HEALTH CARE – 5.7% | |||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 1.3% | |||||||
Atrion Corporation | 8,400 | 2,856,084 | |||||
LIFE SCIENCES TOOLS & SERVICES - 3.6% | |||||||
Bio-Rad Laboratories Cl. A 1 | 20,000 | 2,411,200 | |||||
Bio-Techne | 39,000 | 3,603,600 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 65 |
Schedules of Investments |
Royce 100 Fund (continued) | |||||||
SHARES | VALUE | ||||||
HEALTH CARE (continued) | |||||||
LIFE SCIENCES TOOLS & SERVICES (continued) | |||||||
PerkinElmer | 43,400 | $ | 1,897,882 | ||||
7,912,682 | |||||||
PHARMACEUTICALS - 0.8% | |||||||
†Lannett Company1 | 43,620 | 1,870,426 | |||||
Total (Cost $10,033,717) | 12,639,192 | ||||||
INDUSTRIALS – 24.8% | |||||||
AEROSPACE & DEFENSE - 0.6% | |||||||
HEICO Corporation Cl. A | 27,010 | 1,279,194 | |||||
AIR FREIGHT & LOGISTICS - 0.8% | |||||||
Expeditors International of Washington | 40,020 | 1,785,292 | |||||
BUILDING PRODUCTS - 1.2% | |||||||
Simpson Manufacturing | 77,960 | 2,697,416 | |||||
COMMERCIAL SERVICES & SUPPLIES - 1.7% | |||||||
Heritage-Crystal Clean1 | 140,918 | 1,737,519 | |||||
Ritchie Bros. Auctioneers | 71,294 | 1,917,096 | |||||
3,654,615 | |||||||
CONSTRUCTION & ENGINEERING - 1.1% | |||||||
Jacobs Engineering Group1 | 55,300 | 2,471,357 | |||||
ELECTRICAL EQUIPMENT - 0.8% | |||||||
Global Power Equipment Group | 127,483 | 1,760,540 | |||||
MACHINERY - 10.2% | |||||||
CIRCOR International | 63,178 | 3,808,370 | |||||
Hyster-Yale Materials Handling Cl. A | 22,300 | 1,632,360 | |||||
John Bean Technologies | 95,300 | 3,131,558 | |||||
Kadant | 45,800 | 1,955,202 | |||||
Kennametal | 66,360 | 2,375,024 | |||||
Sun Hydraulics | 77,500 | 3,051,950 | |||||
Tennant Company | 19,600 | 1,414,532 | |||||
Valmont Industries | 29,780 | 3,782,060 | |||||
Wabtec Corporation | 16,300 | 1,416,307 | |||||
22,567,363 | |||||||
PROFESSIONAL SERVICES - 5.8% | |||||||
ICF International1 | 67,100 | 2,749,758 | |||||
ManpowerGroup | 68,266 | 4,653,693 | |||||
Robert Half International | 27,000 | 1,576,260 | |||||
†RPX Corporation1 | 133,600 | 1,841,008 | |||||
Towers Watson & Co. Cl. A | 18,400 | 2,082,328 | |||||
12,903,047 | |||||||
TRADING COMPANIES & DISTRIBUTORS - 2.6% | |||||||
Applied Industrial Technologies | 79,110 | 3,606,625 | |||||
MSC Industrial Direct Cl. A | 25,800 | 2,096,250 | |||||
5,702,875 | |||||||
Total (Cost $41,929,114) | 54,821,699 | ||||||
INFORMATION TECHNOLOGY – 23.2% | |||||||
COMMUNICATIONS EQUIPMENT - 1.0% | |||||||
ADTRAN | 102,690 | 2,238,642 | |||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 11.7% | |||||||
Coherent1 | 48,690 | 2,956,457 | |||||
FARO Technologies1 | 17,627 | 1,104,860 | |||||
FLIR Systems | 57,300 | 1,851,363 | |||||
IPG Photonics1 | 32,400 | 2,427,408 | |||||
Littelfuse | 19,400 | 1,875,398 | |||||
MTS Systems | 22,100 | 1,658,163 | |||||
National Instruments | 93,570 | 2,909,091 | |||||
Orbotech1 | 203,400 | 3,010,320 | |||||
Plexus Corporation1 | 74,800 | 3,082,508 | |||||
Rofin-Sinar Technologies1 | 122,388 | 3,521,103 | |||||
Rogers Corporation1 | 17,760 | 1,446,375 | |||||
25,843,046 | |||||||
INTERNET SOFTWARE & SERVICES - 1.5% | |||||||
Envestnet1 | 34,500 | 1,695,330 | |||||
† j2 Global | 27,600 | 1,711,200 | |||||
27,600 | 3,406,530 | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.4% | |||||||
†Brooks Automation | 215,890 | 2,752,597 | |||||
Cabot Microelectronics1 | 25,820 | 1,221,802 | |||||
Diodes1 | 52,900 | 1,458,453 | |||||
MKS Instruments | 108,200 | 3,960,120 | |||||
Nanometrics 1 | 182,430 | 3,068,473 | |||||
Veeco Instruments1 | 49,800 | 1,737,024 | |||||
14,198,469 | |||||||
SOFTWARE - 2.6% | |||||||
ANSYS1 | 15,500 | 1,271,000 | |||||
†ePlus 1 | 58,457 | 4,424,610 | |||||
5,695,610 | |||||||
Total (Cost $35,450,502) | 51,382,297 | ||||||
MATERIALS – 8.2% | |||||||
CHEMICALS - 2.1% | |||||||
Innospec | 51,950 | 2,218,265 | |||||
†Quaker Chemical | 27,160 | 2,499,806 | |||||
4,718,071 | |||||||
CONTAINERS & PACKAGING - 1.4% | |||||||
Greif Cl. A | 66,800 | 3,154,964 | |||||
METALS & MINING - 4.7% | |||||||
Compass Minerals International | 24,500 | 2,127,335 | |||||
Globe Specialty Metals | 105,310 | 1,814,491 | |||||
Haynes International | 33,033 | 1,602,101 | |||||
Major Drilling Group International | 136,450 | 670,623 | |||||
Reliance Steel & Aluminum | 66,200 | 4,056,074 | |||||
10,270,624 | |||||||
Total (Cost $14,515,618) | 18,143,659 | ||||||
MISCELLANEOUS 5 – 4.6% | |||||||
Total (Cost $9,388,957) | 10,232,893 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $160,829,797) | 210,630,307 | ||||||
REPURCHASE AGREEMENT – 4.2% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $9,261,000 (collateralized by obligations of various U.S. Government Agencies, 0.625%-1.06% due 9/30/17-10/12/17, valued at $9,446,775) | |||||||
(Cost $9,261,000) | 9,261,000 | ||||||
TOTAL INVESTMENTS – 99.4% | |||||||
(Cost $170,090,797) | 219,891,307 | ||||||
CASH AND OTHER ASSETS LESS LIABILITIES – 0.6% | 1,397,407 | ||||||
NET ASSETS – 100.0% | $ | 221,288,714 | |||||
66 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Dividend Value Fund | |||||||
Common Stocks – 99.9% | |||||||
SHARES | VALUE | ||||||
CONSUMER DISCRETIONARY – 10.5% | |||||||
AUTO COMPONENTS - 1.4% | |||||||
Autoliv | 33,300 | $ | 3,533,796 | ||||
Gentex Corporation | 96,148 | 3,473,827 | |||||
Selamat Sempurna | 911,800 | 347,770 | |||||
7,355,393 | |||||||
AUTOMOBILES - 0.2% | |||||||
Thor Industries | 16,740 | 935,264 | |||||
DIVERSIFIED CONSUMER SERVICES - 0.1% | |||||||
23,500 | 583,740 | ||||||
HOTELS, RESTAURANTS & LEISURE - 0.1% | |||||||
Abu Dhabi National Hotels | 642,000 | 699,147 | |||||
HOUSEHOLD DURABLES - 0.3% | |||||||
Forbo Holding | 150 | 150,034 | |||||
Harman International Industries | 3,000 | 320,130 | |||||
Hunter Douglas | 27,600 | 1,152,478 | |||||
1,622,642 | |||||||
INTERNET & CATALOG RETAIL - 0.0% | |||||||
Trade Me | 29,100 | 81,221 | |||||
MEDIA - 0.3% | |||||||
Global Mediacom | 650,000 | 74,841 | |||||
Media Chinese International | 322,600 | 69,187 | |||||
Media Prima | 155,000 | 77,481 | |||||
Pico Far East Holdings | 1,014,100 | 232,379 | |||||
Saga Communications Cl. A | 21,966 | 955,082 | |||||
Television Broadcasts | 26,600 | 154,404 | |||||
1,563,374 | |||||||
MULTILINE RETAIL - 0.1% | |||||||
New World Department Store China | 667,000 | 213,233 | |||||
SPECIALTY RETAIL - 6.6% | |||||||
American Eagle Outfitters | 251,600 | 3,492,208 | |||||
Ascena Retail Group1 | 270,284 | 3,394,767 | |||||
Buckle (The) | 114,579 | 6,017,689 | |||||
Cato Corporation (The) Cl. A | 43,810 | 1,847,906 | |||||
Fielmann | 6,400 | 437,781 | |||||
GameStop Corporation Cl. A | 127,430 | 4,307,134 | |||||
Genesco1 | 76,749 | 5,880,508 | |||||
Lewis Group | 196,000 | 1,254,136 | |||||
Luk Fook Holdings (International) | 472,200 | 1,768,316 | |||||
Shoe Carnival | 58,228 | 1,495,877 | |||||
Stein Mart | 181,196 | 2,649,085 | |||||
USS | 70,000 | 1,077,229 | |||||
33,622,636 | |||||||
TEXTILES, APPAREL & LUXURY GOODS - 1.4% | |||||||
Pandora | 17,000 | 1,378,914 | |||||
Stella International Holdings | 604,000 | 1,584,899 | |||||
Steven Madden1 | 133,608 | 4,252,743 | |||||
7,220 | 147,143 | ||||||
7,363,699 | |||||||
Total (Cost $47,028,333) | 54,040,349 | ||||||
CONSUMER STAPLES – 2.3% | |||||||
FOOD & STAPLES RETAILING - 0.4% | |||||||
FamilyMart | 11,750 | 438,646 | |||||
Village Super Market Cl. A | 55,167 | 1,509,921 | |||||
1,948,567 | |||||||
FOOD PRODUCTS - 1.1% | |||||||
First Resources | 142,400 | 200,793 | |||||
Hormel Foods | 70,300 | 3,662,630 | |||||
Industrias Bachoco ADR1 | 6,100 | 304,268 | |||||
J&J Snack Foods | 10,300 | 1,120,331 | |||||
Lancaster Colony | 3,000 | 280,920 | |||||
McLeod Russel India | 37,200 | 138,929 | |||||
5,707,871 | |||||||
PERSONAL PRODUCTS - 0.8% | |||||||
Nu Skin Enterprises Cl. A | 89,445 | 3,908,746 | |||||
Total (Cost $10,646,663) | 11,565,184 | ||||||
ENERGY – 3.8% | |||||||
ENERGY EQUIPMENT & SERVICES - 3.6% | |||||||
Ensco Cl. A | 66,600 | 1,994,670 | |||||
Ensign Energy Services | 25,300 | 222,121 | |||||
Helmerich & Payne | 83,954 | 5,660,178 | |||||
Oil States International1 | 39,393 | 1,926,318 | |||||
TGS-NOPEC Geophysical | 100,900 | 2,183,107 | |||||
Tidewater | 76,500 | 2,479,365 | |||||
Total Energy Services | 20,379 | 227,681 | |||||
Transocean | 209,400 | 3,838,302 | |||||
18,531,742 | |||||||
OIL, GAS & CONSUMABLE FUELS - 0.2% | |||||||
Cimarex Energy | 4,100 | 434,600 | |||||
Natural Resource Partners L.P. | 37,500 | 346,875 | |||||
781,475 | |||||||
Total (Cost $27,610,440) | 19,313,217 | ||||||
FINANCIALS – 27.3% | |||||||
BANKS - 1.4% | |||||||
Ames National | 32,739 | 849,250 | |||||
BLOM Bank GDR | 63,000 | 645,750 | |||||
BOK Financial | 22,114 | 1,327,725 | |||||
Camden National | 15,422 | 614,412 | |||||
City Holding Company | 22,101 | 1,028,359 | |||||
First Republic Bank | 48,100 | 2,506,972 | |||||
6,972,468 | |||||||
CAPITAL MARKETS - 15.5% | |||||||
Alaris Royalty | 33,000 | 1,004,373 | |||||
AllianceBernstein Holding L.P. | 155,100 | 4,006,233 | |||||
Apollo Global Management LLC Cl. A | 172,900 | 4,076,982 | |||||
ARA Asset Management | 1,388,200 | 1,778,058 | |||||
Artisan Partners Asset Management Cl. A | 87,200 | 4,406,216 | |||||
Ashmore Group | 504,250 | 2,186,170 | |||||
Aurelius | 6,400 | 243,671 | |||||
CETIP - Mercados Organizados | 12,000 | 145,333 | |||||
Close Brothers Group | 18,000 | 415,118 | |||||
Coronation Fund Managers | 415,000 | 4,094,760 | |||||
Diamond Hill Investment Group | 32,500 | 4,486,300 | |||||
Egyptian Financial Group-Hermes Holding Company1 | 159,000 | 342,682 | |||||
Federated Investors Cl. B | 144,700 | 4,764,971 | |||||
Gluskin Sheff + Associates | 51,700 | 1,232,203 | |||||
GMP Capital | 296,000 | 1,617,834 | |||||
Invesco | 39,800 | 1,572,896 | |||||
Investec | 108,500 | 906,383 | |||||
Jupiter Fund Management | 550,000 | 3,087,811 | |||||
KKR & Co. L.P. | 251,558 | 5,838,661 | |||||
Lazard Cl. A | 67,700 | 3,387,031 | |||||
Oaktree Capital Group LLC Cl. A | 32,900 | 1,705,207 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 67 |
Schedules of Investments |
Royce Dividend Value Fund (continued) | |||||||
SHARES | VALUE | ||||||
FINANCIALS (continued) | |||||||
CAPITAL MARKETS (continued) | |||||||
Och-Ziff Capital Management Group LLC Cl. A | 108,100 | $ | 1,262,608 | ||||
SEI Investments | 146,600 | 5,869,864 | |||||
Sprott | 735,700 | 1,545,109 | |||||
State Street | 70,200 | 5,510,700 | |||||
T. Rowe Price Group | 9,100 | 781,326 | |||||
Value Partners Group | 4,597,000 | 3,839,304 | |||||
VZ Holding | 8,300 | 1,483,456 | |||||
Waddell & Reed Financial Cl. A | 65,605 | 3,268,441 | |||||
Westwood Holdings Group | 78,473 | 4,851,201 | |||||
79,710,902 | |||||||
CONSUMER FINANCE - 0.1% | |||||||
†Ally Financial 1 | 15,100 | 356,662 | |||||
DIVERSIFIED FINANCIAL SERVICES - 1.2% | |||||||
Bolsa Mexicana de Valores | 1,443,000 | 2,613,367 | |||||
Hellenic Exchanges - Athens Stock Exchange | 158,000 | 888,116 | |||||
Inversiones La Construccion | 7,500 | 91,136 | |||||
Singapore Exchange | 140,000 | 823,156 | |||||
Warsaw Stock Exchange | 135,400 | 1,744,669 | |||||
6,160,444 | |||||||
INSURANCE - 6.6% | |||||||
Allied World Assurance Company Holdings | 34,894 | 1,323,181 | |||||
Brasil Insurance Participacoes e Administracao | 19,200 | 24,320 | |||||
Cincinnati Financial | 46,700 | 2,420,461 | |||||
E-L Financial | 5,500 | 3,233,345 | |||||
Erie Indemnity Cl. A | 24,200 | 2,196,634 | |||||
Marsh & McLennan | 85,900 | 4,916,916 | |||||
PartnerRe | 31,371 | 3,580,372 | |||||
Reinsurance Group of America | 67,955 | 5,954,217 | |||||
Symetra Financial | 181,100 | 4,174,355 | |||||
Willis Group Holdings | 139,400 | 6,246,514 | |||||
34,070,315 | |||||||
REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.8% | |||||||
DCT Industrial Trust | 24,600 | 877,236 | |||||
Essex Property Trust | 8,000 | 1,652,800 | |||||
National Health Investors | 19,300 | 1,350,228 | |||||
3,880,264 | |||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.3% | |||||||
Brasil Brokers Participacoes | 69,200 | 65,810 | |||||
Midland Holdings 1 | 3,100,900 | 1,566,722 | |||||
Relo Holdings | 2,300 | 163,299 | |||||
1,795,831 | |||||||
THRIFTS & MORTGAGE FINANCE - 1.4% | |||||||
Genworth MI Canada | 155,148 | 4,938,348 | |||||
TrustCo Bank Corp. NY | 305,660 | 2,219,092 | |||||
7,157,440 | |||||||
Total (Cost $101,466,697) | 140,104,326 | ||||||
HEALTH CARE – 3.7% | |||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 1.8% | |||||||
Atrion Corporation | 13,200 | 4,488,132 | |||||
DENTSPLY International | 92,500 | 4,927,475 | |||||
9,415,607 | |||||||
HEALTH CARE PROVIDERS & SERVICES - 1.4% | |||||||
Chemed Corporation | 9,508 | 1,004,710 | |||||
MEDNAX 1 | 13,700 | 905,707 | |||||
Owens & Minor | 150,800 | 5,294,588 | |||||
7,205,005 | |||||||
PHARMACEUTICALS - 0.5% | |||||||
Recordati | 82,300 | 1,279,526 | |||||
Santen Pharmaceutical | 20,800 | 1,113,131 | |||||
Unichem Laboratories | 35,000 | 133,309 | |||||
2,525,966 | |||||||
Total (Cost $14,011,596) | 19,146,578 | ||||||
INDUSTRIALS – 19.2% | |||||||
AEROSPACE & DEFENSE - 0.8% | |||||||
American Science and Engineering | 49,545 | 2,571,385 | |||||
HEICO Corporation Cl. A | 36,132 | 1,711,212 | |||||
4,282,597 | |||||||
AIR FREIGHT & LOGISTICS - 2.0% | |||||||
†C. H. Robinson Worldwide | 40,000 | 2,995,600 | |||||
Expeditors International of Washington | 156,600 | 6,985,926 | |||||
9,981,526 | |||||||
BUILDING PRODUCTS - 1.3% | |||||||
AAON | 138,787 | 3,107,441 | |||||
Geberit | 1,000 | 339,833 | |||||
Simpson Manufacturing | 57,600 | 1,992,960 | |||||
TOTO | 74,000 | 860,712 | |||||
Zehnder Group | 3,600 | 149,539 | |||||
6,450,485 | |||||||
COMMERCIAL SERVICES & SUPPLIES - 2.0% | |||||||
Brink’s Company (The) | 100 | 2,441 | |||||
Cintas Corporation | 51,700 | 4,055,348 | |||||
Collection House | 61,254 | 103,527 | |||||
Kaba Holding | 2,100 | 1,058,890 | |||||
Ritchie Bros. Auctioneers | 90,092 | 2,422,574 | |||||
Societe BIC | 6,600 | 875,914 | |||||
UniFirst Corporation | 12,655 | 1,536,950 | |||||
10,055,644 | |||||||
CONSTRUCTION & ENGINEERING - 0.3% | |||||||
KBR | 100,000 | 1,695,000 | |||||
ELECTRICAL EQUIPMENT - 2.1% | |||||||
AZZ | 64,100 | 3,007,572 | |||||
Hubbell Cl. B | 45,700 | 4,882,131 | |||||
Regal Beloit | 36,000 | 2,707,200 | |||||
10,596,903 | |||||||
MACHINERY - 7.2% | |||||||
Alamo Group | 9,202 | 445,745 | |||||
CB Industrial Product Holding | 258,200 | 148,275 | |||||
China Metal International Holdings | 352,000 | 121,612 | |||||
CLARCOR | 75,200 | 5,011,328 | |||||
Donaldson Company | 111,000 | 4,287,930 | |||||
Flowserve Corporation | 20,100 | 1,202,583 | |||||
Freund Corporation | 11,700 | 101,468 | |||||
Graco | 65,400 | 5,243,772 | |||||
IDEX Corporation | 44,500 | 3,463,880 | |||||
John Bean Technologies | 97,356 | 3,199,118 | |||||
Kennametal | 32,314 | 1,156,518 | |||||
Lincoln Electric Holdings | 30,050 | 2,076,154 | |||||
Lindsay Corporation | 32,800 | 2,812,272 | |||||
Luxfer Holdings ADR | 6,000 | 89,580 | |||||
Miller Industries | 36,414 | 757,047 | |||||
Pfeiffer Vacuum Technology | 13,500 | 1,120,607 | |||||
Spirax-Sarco Engineering | 35,148 | 1,561,996 | |||||
Tennant Company | 18,400 | 1,327,928 | |||||
Valmont Industries | 20,600 | 2,616,200 |
68 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Dividend Value Fund (continued) |
SHARES | VALUE | |||||||
INDUSTRIALS (continued) | ||||||||
MACHINERY (continued) | ||||||||
Zuiko Corporation | 6,300 | $ | 272,681 | |||||
37,016,694 | ||||||||
MARINE - 0.3% | ||||||||
Clarkson | 54,600 | 1,611,661 | ||||||
PROFESSIONAL SERVICES - 1.5% | ||||||||
ManpowerGroup | 52,300 | 3,565,291 | ||||||
Towers Watson & Co. Cl. A | 36,400 | 4,119,388 | ||||||
7,684,679 | ||||||||
ROAD & RAIL - 0.9% | ||||||||
Globaltrans Investment GDR | 10,400 | 52,807 | ||||||
Landstar System | 65,000 | 4,714,450 | ||||||
4,767,257 | ||||||||
TRADING COMPANIES & DISTRIBUTORS - 0.8% | ||||||||
Applied Industrial Technologies | 92,425 | 4,213,656 | ||||||
Total (Cost $67,896,853) | 98,356,102 | |||||||
INFORMATION TECHNOLOGY – 12.8% | ||||||||
COMMUNICATIONS EQUIPMENT - 0.8% | ||||||||
Ellies Holdings 1 | 171,900 | 19,266 | ||||||
Plantronics | 58,708 | 3,112,698 | ||||||
TESSCO Technologies | 27,949 | 810,521 | ||||||
3,942,485 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 6.6% | ||||||||
Amphenol Corporation Cl. A | 62,800 | 3,379,268 | ||||||
AVX Corporation | 142,300 | 1,992,200 | ||||||
Cognex Corporation 1 | 20,000 | 826,600 | ||||||
Domino Printing Sciences | 32,600 | 333,212 | ||||||
FLIR Systems | 255,100 | 8,242,281 | ||||||
Littelfuse | 32,063 | 3,099,530 | ||||||
MTS Systems | 50,293 | 3,773,484 | ||||||
National Instruments | 155,100 | 4,822,059 | ||||||
Vaisala Cl. A | 48,000 | 1,273,027 | ||||||
Vishay Intertechnology | 424,688 | 6,009,335 | ||||||
33,750,996 | ||||||||
IT SERVICES - 3.6% | ||||||||
Broadridge Financial Solutions | 99,100 | 4,576,438 | ||||||
Calian Technologies | 23,296 | 353,911 | ||||||
Convergys Corporation | 192,215 | 3,915,420 | ||||||
eClerx Services | 116,700 | 2,412,847 | ||||||
ManTech International Cl. A | 40,836 | 1,234,472 | ||||||
Metrofile Holdings | 1,517,000 | 655,239 | ||||||
Western Union | 300,900 | 5,389,119 | ||||||
18,537,446 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.3% | ||||||||
Eugene Technology | 11,664 | 170,953 | ||||||
MKS Instruments | 30,700 | 1,123,620 | ||||||
Teradyne | 20,000 | 395,800 | ||||||
1,690,373 | ||||||||
SOFTWARE - 0.7% | ||||||||
Computer Modelling Group | 140,000 | 1,438,802 | ||||||
Cyient | 12,400 | 101,263 | ||||||
Silverlake Axis | 87,800 | 83,061 | ||||||
Totvs | 150,000 | 1,973,648 | ||||||
3,596,774 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.8% | ||||||||
Diebold | 118,000 | 4,087,520 | ||||||
Total (Cost $52,138,326) | 65,605,594 | |||||||
MATERIALS – 14.2% | ||||||||
CHEMICALS - 3.3% | ||||||||
Balchem Corporation | 25,050 | $ | 1,669,332 | |||||
Cabot Corporation | 6,500 | 285,090 | ||||||
Innospec | 98,400 | 4,201,680 | ||||||
International Flavors & Fragrances | 27,100 | 2,746,856 | ||||||
Quaker Chemical | 28,800 | 2,650,752 | ||||||
†Rockwood Holdings | 29,400 | 2,316,720 | ||||||
Stepan Company | 60,600 | 2,428,848 | ||||||
Victrex | 7,500 | 242,191 | ||||||
Westlake Chemical | 5,700 | 348,213 | ||||||
16,889,682 | ||||||||
CONTAINERS & PACKAGING - 2.2% | ||||||||
AptarGroup | 86,200 | 5,761,608 | ||||||
Greif Cl. A | 115,400 | 5,450,342 | ||||||
Nampak | 30,000 | 112,881 | ||||||
11,324,831 | ||||||||
METALS & MINING - 8.4% | ||||||||
Agnico Eagle Mines | 97,500 | 2,426,775 | ||||||
Allegheny Technologies | 134,200 | 4,666,134 | ||||||
Carpenter Technology | 116,100 | 5,717,925 | ||||||
Commercial Metals | 18,700 | 304,623 | ||||||
Compass Minerals International | 47,900 | 4,159,157 | ||||||
Franco-Nevada Corporation | 2,400 | 118,056 | ||||||
Fresnillo | 254,000 | 3,014,163 | ||||||
Hecla Mining | 135,000 | 376,650 | ||||||
Hi-Crush Partners L.P. | 20,000 | 620,600 | ||||||
Imdex 1 | 169,600 | 65,755 | ||||||
Major Drilling Group International | 409,400 | 2,012,114 | ||||||
Pan American Silver | 284,000 | 2,612,800 | ||||||
Randgold Resources ADR | 50,000 | 3,370,500 | ||||||
Reliance Steel & Aluminum | 133,806 | 8,198,294 | ||||||
Royal Gold | 2,200 | 137,940 | ||||||
†Sims Metal Management | 172,000 | 1,677,048 | ||||||
Steel Dynamics | 21,000 | 414,540 | ||||||
Worthington Industries | 103,800 | 3,123,342 | ||||||
43,016,416 | ||||||||
PAPER & FOREST PRODUCTS - 0.3% | ||||||||
Schweitzer-Mauduit International | 43,900 | 1,856,970 | ||||||
Total (Cost $72,823,925) | 73,087,899 | |||||||
TELECOMMUNICATION SERVICES – 1.0% | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.5% | ||||||||
Inmarsat | 210,000 | 2,602,415 | ||||||
WIRELESS TELECOMMUNICATION SERVICES - 0.5% | ||||||||
Telephone and Data Systems | 109,200 | 2,757,300 | ||||||
Total (Cost $4,838,539) | 5,359,715 | |||||||
UTILITIES – 0.6% | ||||||||
WATER UTILITIES - 0.6% | ||||||||
Aqua America | 125,000 | 3,337,500 | ||||||
Total (Cost $3,005,880) | 3,337,500 | |||||||
MISCELLANEOUS5 – 4.5% | ||||||||
Total (Cost $22,770,111) | 23,198,330 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $424,237,363) | 513,114,794 | |||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 69 |
Schedules of Investments |
Royce Dividend Value Fund (continued) |
VALUE | ||||||||
REPURCHASE AGREEMENT – 0.3% | ||||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value | ||||||||
$1,561,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% | ||||||||
due 10/12/17, valued at $1,596,975) | ||||||||
(Cost $1,561,000) | $ | 1,561,000 | ||||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 0.2% | ||||||||
Money Market Funds | ||||||||
Federated Government Obligations Fund (7 day yield-0.0099%) | ||||||||
(Cost $753,190) | 753,190 | |||||||
TOTAL INVESTMENTS – 100.4% | ||||||||
(Cost $426,551,553) | 515,428,984 | |||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.4)% | (2,012,919 | ) | ||||||
NET ASSETS – 100.0% | $ | 513,416,065 | ||||||
Royce Global Value Fund |
Common Stocks – 92.7% | ||||||||
SHARES | VALUE | |||||||
AUSTRALIA – 0.5% | ||||||||
†TFS Corporation | 395,400 | $ | 496,363 | |||||
Total (Cost $475,256) | 496,363 | |||||||
AUSTRIA – 3.8% | ||||||||
Mayr-Melnhof Karton | 18,700 | 1,940,597 | ||||||
Semperit AG Holding | 25,597 | 1,238,641 | ||||||
†Zumtobel Group | 22,900 | 515,794 | ||||||
Total (Cost $4,184,266) | 3,695,032 | |||||||
BRAZIL – 3.5% | ||||||||
CETIP - Mercados Organizados | 117,500 | 1,423,053 | ||||||
†MAHLE Metal Leve | 100,000 | 788,313 | ||||||
Totvs | 85,100 | 1,119,716 | ||||||
Total (Cost $3,262,008) | 3,331,082 | |||||||
CANADA – 3.6% | ||||||||
†Magellan Aerospace | 117,700 | 1,369,688 | ||||||
†MTY Food Group | 12,100 | 351,085 | ||||||
†Richelieu Hardware | 9,800 | 480,806 | ||||||
†Ritchie Bros. Auctioneers | 19,900 | 535,111 | ||||||
†Total Energy Services | 28,700 | 320,646 | ||||||
†Western Forest Products | 177,600 | 412,739 | ||||||
Total (Cost $3,564,190) | 3,470,075 | |||||||
CHILE – 1.4% | ||||||||
Inversiones La Construccion | 81,000 | 984,275 | ||||||
†Sonda | 155,400 | 368,439 | ||||||
Total (Cost $1,531,787) | 1,352,714 | |||||||
CHINA – 1.9% | ||||||||
E-House (China) Holdings ADR | 141,600 | 1,025,184 | ||||||
†Haitian International Holdings | 167,000 | 351,025 | ||||||
7,080 | 76,181 | |||||||
†Xtep International Holdings | 864,400 | 348,181 | ||||||
Total (Cost $2,427,211) | 1,800,571 | |||||||
CYPRUS – 0.7% | ||||||||
†Globaltrans Investment GDR | 140,000 | 710,863 | ||||||
Total (Cost $948,791) | 710,863 | |||||||
FINLAND – 1.0% | ||||||||
Nokian Renkaat | 37,800 | 925,864 | ||||||
Total (Cost $1,031,521) | 925,864 | |||||||
FRANCE – 2.7% | ||||||||
Alten | 42,150 | 1,802,413 | ||||||
†Lectra | 26,500 | 293,114 | ||||||
Societe Internationale de Plantations d’Heveas | 11,805 | 470,611 | ||||||
Total (Cost $2,854,431) | 2,566,138 | |||||||
GERMANY – 2.5% | ||||||||
†Aurelius | 8,561 | 325,948 | ||||||
Carl Zeiss Meditec | 35,000 | 893,608 | ||||||
†CompuGroup Medical | 19,700 | 474,351 | ||||||
†Nemetschek | 3,500 | 355,335 | ||||||
†Schaltbau Holding | 7,200 | 366,418 | ||||||
Total (Cost $2,518,568) | 2,415,660 | |||||||
HONG KONG – 8.3% | ||||||||
†I.T | 1,329,100 | 383,110 | ||||||
Luk Fook Holdings (International) | 220,000 | 823,866 | ||||||
New World Department Store China | 7,090,000 | 2,266,598 |
70 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Global Value Fund (continued) | ||||||||
SHARES | VALUE | |||||||
HONG KONG (continued) | ||||||||
†Pacific Textiles Holdings | 233,000 | $ | 308,197 | |||||
†Pico Far East Holdings | 2,520,600 | 577,591 | ||||||
Television Broadcasts | 330,000 | 1,915,543 | ||||||
Value Partners Group | 2,040,000 | 1,703,759 | ||||||
Total (Cost $9,487,852) | 7,978,664 | |||||||
INDIA – 2.1% | ||||||||
†Apollo Tyres | 100,000 | 352,641 | ||||||
†Bajaj Holdings & Investment | 46,000 | 1,018,995 | ||||||
†eClerx Services | 12,500 | 258,446 | ||||||
†Grasim Industries | 7,574 | 405,193 | ||||||
Total (Cost $2,054,278) | 2,035,275 | |||||||
INDONESIA – 0.3% | ||||||||
†Selamat Sempurna | 710,000 | 270,802 | ||||||
Total (Cost $261,648) | 270,802 | |||||||
JAPAN – 13.2% | ||||||||
C. Uyemura & Co. | 18,900 | 884,130 | ||||||
EPS Corporation | 95,500 | 1,131,210 | ||||||
FamilyMart | 30,000 | 1,119,947 | ||||||
†GCA Savvian | 50,000 | 475,429 | ||||||
†Itoki Corporation | 52,700 | 269,971 | ||||||
82,400 | 519,639 | |||||||
Miraial | 44,000 | 616,840 | ||||||
MISUMI Group | 32,300 | 1,060,970 | ||||||
†Namura Shipbuilding | 35,300 | 378,342 | ||||||
†Nishikawa Rubber | 17,000 | 289,515 | ||||||
†Obara Group | 37,500 | 1,664,897 | ||||||
†SPARX Group | 226,300 | 380,858 | ||||||
†Sun Frontier Fudousan | 44,400 | 407,331 | ||||||
†Tokai Tokyo Financial Holdings | 56,400 | 385,898 | ||||||
†TOTO | 22,700 | 264,029 | ||||||
†Trancom | 6,600 | 265,863 | ||||||
USS | 71,300 | 1,097,235 | ||||||
Zuiko Corporation | 34,000 | 1,471,610 | ||||||
Total (Cost $12,541,438) | 12,683,714 | |||||||
LUXEMBOURG – 0.3% | ||||||||
32,600 | 340,670 | |||||||
Total (Cost $333,527) | 340,670 | |||||||
MALAYSIA – 0.2% | ||||||||
†CB Industrial Product Holding | 400,000 | 229,705 | ||||||
Total (Cost $269,837) | 229,705 | |||||||
MEXICO – 1.3% | ||||||||
105,600 | 311,137 | |||||||
Industrias Bachoco ADR 1 | 18,100 | 902,828 | ||||||
Total (Cost $663,334) | 1,213,965 | |||||||
NORWAY – 1.8% | ||||||||
†Borregaard | 40,000 | 297,320 | ||||||
TGS-NOPEC Geophysical | 47,300 | 1,023,399 | ||||||
†Tomra Systems | 54,000 | 415,765 | ||||||
Total (Cost $1,886,738) | 1,736,484 | |||||||
SINGAPORE – 1.6% | ||||||||
†First Resources | 310,500 | 437,824 | ||||||
†Parkson Retail Asia | 304,400 | 183,837 | ||||||
Silverlake Axis | 950,000 | $ | 898,719 | |||||
Total (Cost $1,259,458) | 1,520,380 | |||||||
SOUTH AFRICA – 1.3% | ||||||||
Lewis Group | 152,000 | 972,595 | ||||||
†Nampak | 70,000 | 263,389 | ||||||
Total (Cost $1,428,726) | 1,235,984 | |||||||
SOUTH KOREA – 0.9% | ||||||||
45,400 | 459,797 | |||||||
16,500 | 378,235 | |||||||
Total (Cost $892,558) | 838,032 | |||||||
SWEDEN – 0.5% | ||||||||
67,300 | 505,626 | |||||||
Total (Cost $512,976) | 505,626 | |||||||
SWITZERLAND – 2.1% | ||||||||
Garmin | 17,700 | 935,091 | ||||||
†VZ Holding | 6,000 | 1,072,378 | ||||||
Total (Cost $2,025,250) | 2,007,469 | |||||||
TAIWAN – 1.3% | ||||||||
†Kinik Company | 112,800 | 231,731 | ||||||
†Makalot Industrial | 50,200 | 268,175 | ||||||
†Taiwan Paiho | 382,300 | 515,115 | ||||||
†UDE Corporation | 96,300 | 237,729 | ||||||
Total (Cost $1,240,581) | 1,252,750 | |||||||
UNITED ARAB EMIRATES – 0.3% | ||||||||
†Al Noor Hospitals Group | 16,000 | 245,709 | ||||||
Total (Cost $251,562) | 245,709 | |||||||
UNITED KINGDOM – 8.3% | ||||||||
†Abcam | 128,500 | 930,555 | ||||||
Ashmore Group | 345,000 | 1,495,744 | ||||||
AVEVA Group | 43,000 | 880,227 | ||||||
†Brammer | 63,000 | 333,713 | ||||||
Clarkson | 50,500 | 1,490,639 | ||||||
†HellermannTyton Group | 180,000 | 880,102 | ||||||
†Rotork | 30,000 | 1,079,558 | ||||||
†Synthomer | 245,000 | 895,706 | ||||||
Total (Cost $8,803,478) | 7,986,244 | |||||||
UNITED STATES – 27.3% | ||||||||
†Advance Auto Parts | 3,600 | 573,408 | ||||||
†AGCO Corporation | 24,100 | 1,089,320 | ||||||
11,700 | 1,034,982 | |||||||
†Artisan Partners Asset Management CI. A | 20,500 | 1,035,865 | ||||||
17,500 | 1,332,975 | |||||||
†Carlisle Companies | 9,800 | 884,352 | ||||||
†Core-Mark Holding Company | 3,900 | 241,527 | ||||||
†DENTSPLY International | 16,600 | 884,282 | ||||||
22,000 | 606,540 | |||||||
12,800 | 900,864 | |||||||
8,000 | 386,160 | |||||||
11,000 | 561,770 | |||||||
†Finish Line (The) Cl. A | 41,100 | 999,141 | ||||||
†Globe Specialty Metals | 15,200 | 261,896 | ||||||
Helmerich & Payne | 14,300 | 964,106 | ||||||
Kennedy-Wilson Holdings | 49,200 | 1,244,760 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 71 |
Schedules of Investments |
Royce Global Value Fund (continued) |
SHARES | VALUE | |||||||
UNITED STATES (continued) | ||||||||
†ManpowerGroup | 18,400 | $ | 1,254,328 | |||||
†Mentor Graphics | 35,400 | 775,968 | ||||||
†Minerals Technologies | 3,500 | 243,075 | ||||||
6,000 | 932,160 | |||||||
†Monro Muffler Brake | 2,300 | 132,940 | ||||||
Myriad Genetics 1 | 15,100 | 514,306 | ||||||
†Oceaneering International | 3,800 | 223,478 | ||||||
†Quaker Chemical | 5,600 | 515,424 | ||||||
†RBC Bearings | 5,800 | 374,274 | ||||||
7,200 | 586,368 | |||||||
†SEI Investments | 6,700 | 268,268 | ||||||
†Standard Motor Products | 11,963 | 456,030 | ||||||
†Sun Hydraulics | 3,100 | 122,078 | ||||||
8,600 | 375,648 | |||||||
†Thor Industries | 26,000 | 1,452,620 | ||||||
Unit Corporation 1 | 11,400 | 388,740 | ||||||
Valmont Industries | 9,600 | 1,219,200 | ||||||
Western Digital | 11,300 | 1,250,910 | ||||||
†Westlake Chemical | 9,000 | 549,810 | ||||||
†Wolverine World Wide | 31,900 | 940,093 | ||||||
†World Fuel Services | 14,500 | 680,485 | ||||||
Total (Cost $24,957,682) | 26,258,151 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $91,668,952) | 89,103,986 | |||||||
REPURCHASE AGREEMENT – 8.7% | ||||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value | ||||||||
$8,407,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% | ||||||||
due 10/12/17, valued at $8,576,900) | ||||||||
(Cost $8,407,000) | 8,407,000 | |||||||
TOTAL INVESTMENTS – 101.4% | ||||||||
(Cost $100,075,952) | 97,510,986 | |||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (1.4)% | (1,341,567 | ) | ||||||
NET ASSETS – 100.0% | $ | 96,169,419 | ||||||
Royce International Smaller-Companies Fund |
Common Stocks – 98.4% | ||||||||
SHARES | VALUE | |||||||
AUSTRALIA – 0.8% | ||||||||
†Programmed Maintenance Services | 122,600 | $ | 256,283 | |||||
Total (Cost $314,805) | 256,283 | |||||||
AUSTRIA – 3.2% | ||||||||
Mayr-Melnhof Karton | 4,700 | 487,744 | ||||||
Semperit AG Holding | 12,000 | 580,681 | ||||||
Total (Cost $1,002,595) | 1,068,425 | |||||||
BRAZIL – 6.9% | ||||||||
Brasil Brokers Participacoes | 210,000 | 199,713 | ||||||
CETIP - Mercados Organizados | 41,000 | 496,554 | ||||||
Eternit | 245,300 | 299,965 | ||||||
Grendene | 63,600 | 365,802 | ||||||
†Guararapes Confeccoes | 5,500 | 170,794 | ||||||
†Kepler Weber | 18,600 | 350,239 | ||||||
†MAHLE Metal Leve | 50,000 | 394,157 | ||||||
Total (Cost $2,946,126) | 2,277,224 | |||||||
CANADA – 2.1% | ||||||||
†Magellan Aerospace | 40,000 | 465,484 | ||||||
†MTY Food Group | 8,200 | 237,926 | ||||||
Total (Cost $551,463) | 703,410 | |||||||
CHILE – 1.2% | ||||||||
Inversiones La Construccion | 34,000 | 413,153 | ||||||
Total (Cost $442,009) | 413,153 | |||||||
CHINA – 2.1% | ||||||||
2,500 | 26,900 | |||||||
Pacific Online | 840,300 | 391,526 | ||||||
Xtep International Holdings | 726,800 | 292,755 | ||||||
Total (Cost $781,420) | 711,181 | |||||||
CYPRUS – 0.8% | ||||||||
Globaltrans Investment GDR | 52,500 | 266,574 | ||||||
Total (Cost $643,022) | 266,574 | |||||||
FRANCE – 8.8% | ||||||||
Audika Groupe | 18,200 | 248,159 | ||||||
Gaztransport Et Technigaz | 6,200 | 366,164 | ||||||
Manutan International | 9,100 | 451,200 | ||||||
†Nexity | 10,000 | 378,309 | ||||||
†Robertet | 1,200 | 232,303 | ||||||
Societe Internationale de Plantations d’Heveas | 8,658 | 345,155 | ||||||
Stallergenes | 6,400 | 383,017 | ||||||
Vetoquinol | 11,441 | 496,974 | ||||||
Total (Cost $3,154,371) | 2,901,281 | |||||||
GERMANY – 3.6% | ||||||||
Bertrandt | 3,100 | 431,378 | ||||||
KWS Saat | 1,400 | 455,320 | ||||||
LPKF Laser & Electronics | 22,500 | 294,794 | ||||||
Total (Cost $1,185,982) | 1,181,492 | |||||||
HONG KONG – 8.7% | ||||||||
I.T | 953,900 | 274,960 | ||||||
Luk Fook Holdings (International) | 108,100 | 404,818 | ||||||
Midland Holdings 1 | 635,900 | 321,287 | ||||||
New World Department Store China | 1,362,700 | 435,640 | ||||||
Pico Far East Holdings | 2,315,200 | 530,524 | ||||||
Television Broadcasts | 72,700 | 422,000 |
72 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce International Smaller-Companies Fund (continued) |
SHARES | VALUE | |||||||
HONG KONG (continued) | ||||||||
Value Partners Group | 570,000 | $ | 476,050 | |||||
Total (Cost $2,902,529) | 2,865,279 | |||||||
INDIA – 8.5% | ||||||||
AIA Engineering | 18,200 | 312,440 | ||||||
†Apollo Tyres | 118,100 | 416,469 | ||||||
†Bajaj Holdings & Investment | 10,000 | 221,521 | ||||||
Graphite India | 125,000 | 180,014 | ||||||
†Grasim Industries | 2,324 | 124,329 | ||||||
Ipca Laboratories | 35,900 | 414,674 | ||||||
†KPIT Technologies | 134,000 | 430,129 | ||||||
Shriram Transport Finance | 25,500 | 445,237 | ||||||
Thomas Cook (India) | 104,500 | 265,816 | ||||||
Total (Cost $2,148,768) | 2,810,629 | |||||||
INDONESIA – 1.5% | ||||||||
†Ramayana Lestari Sentosa | 3,000,000 | 191,528 | ||||||
Selamat Sempurna | 817,600 | 311,841 | ||||||
Total (Cost $417,453) | 503,369 | |||||||
ITALY – 1.4% | ||||||||
DiaSorin | 11,400 | 459,733 | ||||||
Total (Cost $371,861) | 459,733 | |||||||
JAPAN – 17.5% | ||||||||
Benesse Holdings | 14,000 | 415,879 | ||||||
BML | 10,000 | 265,258 | ||||||
C. Uyemura & Co. | 8,700 | 406,980 | ||||||
EPS Corporation | 38,300 | 453,669 | ||||||
FamilyMart | 14,700 | 548,774 | ||||||
Milbon | 11,000 | 299,446 | ||||||
Miraial | 22,690 | 318,093 | ||||||
Moshi Moshi Hotline | 47,000 | 428,685 | ||||||
†Nishikawa Rubber | 23,600 | 401,914 | ||||||
†Obara Group | 9,500 | 421,774 | ||||||
†Relo Holdings | 4,400 | 312,398 | ||||||
Santen Pharmaceutical | 6,000 | 321,095 | ||||||
†Trancom | 9,100 | 366,569 | ||||||
USS | 25,200 | 387,803 | ||||||
Zuiko Corporation | 10,000 | 432,826 | ||||||
Total (Cost $5,712,810) | 5,781,163 | |||||||
JERSEY – 0.5% | ||||||||
Randgold Resources ADR | 2,700 | 182,007 | ||||||
Total (Cost $175,688) | 182,007 | |||||||
MALAYSIA – 2.5% | ||||||||
CB Industrial Product Holding | 599,600 | 344,328 | ||||||
Media Prima | 400,000 | 199,949 | ||||||
Padini Holdings | 726,800 | 302,394 | ||||||
Total (Cost $904,214) | 846,671 | |||||||
MEXICO – 1.4% | ||||||||
Grupo SIMEC Ser. B 1 | 72,700 | 249,827 | ||||||
Industrias Bachoco ADR 1 | 4,500 | 224,460 | ||||||
Total (Cost $344,071) | 474,287 | |||||||
NETHERLANDS – 0.6% | ||||||||
†Brunel International | 12,000 | 196,664 | ||||||
Total (Cost $278,685) | 196,664 | |||||||
NORWAY – 2.4% | ||||||||
†Eltek | 200,000 | $ | 310,643 | |||||
†Kongsberg Gruppen | 3,200 | 52,751 | ||||||
TGS-NOPEC Geophysical | 19,500 | 421,909 | ||||||
Total (Cost $809,494) | 785,303 | |||||||
SINGAPORE – 2.4% | ||||||||
ARA Asset Management | 299,800 | 383,995 | ||||||
Biosensors International Group 1 | 908,500 | 400,989 | ||||||
Total (Cost $954,045) | 784,984 | |||||||
SLOVENIA – 1.3% | ||||||||
†Krka d.d., Novo mesto | 5,900 | 425,669 | ||||||
Total (Cost $538,437) | 425,669 | |||||||
SOUTH AFRICA – 2.2% | ||||||||
Blue Label Telecoms | 454,200 | 345,357 | ||||||
Lewis Group | 30,000 | 191,959 | ||||||
Raubex Group | 99,900 | 189,569 | ||||||
Total (Cost $732,955) | 726,885 | |||||||
SWEDEN – 2.7% | ||||||||
†Industrivarden Cl. C | 22,700 | 394,268 | ||||||
Lundin Petroleum 1 | 34,500 | 493,320 | ||||||
Total (Cost $1,059,308) | 887,588 | |||||||
SWITZERLAND – 4.1% | ||||||||
Kaba Holding | 800 | 403,387 | ||||||
VZ Holding | 2,800 | 500,443 | ||||||
Zehnder Group | 10,900 | 452,771 | ||||||
Total (Cost $1,138,989) | 1,356,601 | |||||||
TURKEY – 0.6% | ||||||||
Mardin Cimento Sanayii | 99,900 | 203,142 | ||||||
Total (Cost $197,809) | 203,142 | |||||||
UNITED ARAB EMIRATES – 0.7% | ||||||||
†Aramex | 268,585 | 225,512 | ||||||
Total (Cost $221,066) | 225,512 | |||||||
UNITED KINGDOM – 9.9% | ||||||||
Ashmore Group | 100,000 | 433,549 | ||||||
Consort Medical | 31,800 | 427,927 | ||||||
Domino Printing Sciences | 27,300 | 279,040 | ||||||
E2V Technologies | 178,698 | 480,765 | ||||||
Elementis | 74,900 | 303,118 | ||||||
EnQuest 1 | 173,100 | 94,576 | ||||||
†Fenner | 50,000 | 166,825 | ||||||
†Kennedy Wilson Europe Real Estate | 29,470 | 484,118 | ||||||
†Polypipe Group | 50,000 | 191,609 | ||||||
Spirent Communications | 345,200 | 406,014 | ||||||
Total (Cost $3,707,701) | 3,267,541 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $33,637,676) | 32,562,050 | |||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 73 |
Schedules of Investments |
Royce International Smaller-Companies Fund (continued) |
VALUE | ||||||||
REPURCHASE AGREEMENT – 5.6% | ||||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value | ||||||||
$1,860,000 (collateralized by obligations of various U.S. Government Agencies, 0.625% | ||||||||
due 9/30/17, valued at $1,900,800) | ||||||||
(Cost $1,860,000) | $ | 1,860,000 | ||||||
TOTAL INVESTMENTS – 104.0% | ||||||||
(Cost $35,497,676) | 34,422,050 | |||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (4.0)% | (1,339,703 | ) | ||||||
NET ASSETS – 100.0% | $ | 33,082,347 | ||||||
Royce Special Equity Multi-Cap Fund |
Common Stocks – 91.4% | ||||||||
SHARES | VALUE | |||||||
CONSUMER DISCRETIONARY – 30.8% | ||||||||
AUTO COMPONENTS - 5.2% | ||||||||
Lear Corporation | 160,000 | $ | 15,692,800 | |||||
DISTRIBUTORS - 3.2% | ||||||||
Genuine Parts | 90,300 | 9,623,271 | ||||||
MEDIA - 6.2% | ||||||||
Scripps Networks Interactive Cl. A | 123,000 | 9,258,210 | ||||||
†Viacom Cl. B | 128,000 | 9,632,000 | ||||||
18,890,210 | ||||||||
MULTILINE RETAIL - 5.5% | ||||||||
Nordstrom | 212,000 | 16,830,680 | ||||||
SPECIALTY RETAIL - 10.7% | ||||||||
Bed Bath & Beyond 1 | 242,600 | 18,478,842 | ||||||
Gap (The) | 333,000 | 14,022,630 | ||||||
32,501,472 | ||||||||
Total (Cost $76,142,497) | 93,538,433 | |||||||
ENERGY – 8.0% | ||||||||
ENERGY EQUIPMENT & SERVICES - 4.1% | ||||||||
Helmerich & Payne | 187,000 | 12,607,540 | ||||||
OIL, GAS & CONSUMABLE FUELS - 3.9% | ||||||||
Occidental Petroleum | 145,300 | 11,712,633 | ||||||
Total (Cost $27,601,564) | 24,320,173 | |||||||
FINANCIALS – 8.6% | ||||||||
CAPITAL MARKETS - 8.6% | ||||||||
Franklin Resources | 252,000 | 13,953,240 | ||||||
†T. Rowe Price Group | 139,400 | 11,968,884 | ||||||
Total (Cost $24,171,020) | 25,922,124 | |||||||
HEALTH CARE – 4.8% | ||||||||
HEALTH CARE PROVIDERS & SERVICES - 4.8% | ||||||||
Quest Diagnostics | 218,800 | 14,672,728 | ||||||
Total (Cost $12,905,317) | 14,672,728 | |||||||
INDUSTRIALS – 19.6% | ||||||||
AEROSPACE & DEFENSE - 1.7% | ||||||||
Raytheon Company | 49,300 | 5,332,781 | ||||||
ELECTRICAL EQUIPMENT - 5.1% | ||||||||
Emerson Electric | 249,000 | 15,370,770 | ||||||
INDUSTRIAL CONGLOMERATES - 1.2% | ||||||||
3M | 21,700 | 3,565,744 | ||||||
MACHINERY - 7.9% | ||||||||
Dover Corporation | 99,000 | 7,100,280 | ||||||
Illinois Tool Works | 69,800 | 6,610,060 | ||||||
Parker Hannifin | 81,000 | 10,444,950 | ||||||
24,155,290 | ||||||||
PROFESSIONAL SERVICES - 3.7% | ||||||||
†ManpowerGroup | 163,000 | 11,111,710 | ||||||
Total (Cost $49,686,974) | 59,536,295 | |||||||
INFORMATION TECHNOLOGY – 19.6% | ||||||||
COMMUNICATIONS EQUIPMENT - 4.7% | ||||||||
Cisco Systems | 510,000 | 14,185,650 | ||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 1.0% | ||||||||
Avnet | 67,000 | 2,882,340 | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.3% | ||||||||
Intel Corporation | 194,200 | 7,047,518 | ||||||
SOFTWARE - 8.6% | ||||||||
Microsoft Corporation | 292,600 | 13,591,270 |
74 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Special Equity Multi-Cap Fund (continued) |
SHARES | VALUE | |||||||
INFORMATION TECHNOLOGY (continued) | ||||||||
SOFTWARE (continued) | ||||||||
†Symantec Corporation | 490,000 | $ | 12,570,950 | |||||
26,162,220 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 3.0% | ||||||||
†Apple | 83,500 | 9,216,730 | ||||||
Total (Cost $46,728,928) | 59,494,458 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $237,236,300) | 277,484,211 | |||||||
REPURCHASE AGREEMENT – 9.4% | ||||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value | ||||||||
$28,523,000 (collateralized by obligations of various U.S. Government Agencies, 0.625% | ||||||||
due 9/30/17, valued at $29,096,100) | ||||||||
(Cost $28,523,000) | 28,523,000 | |||||||
TOTAL INVESTMENTS – 100.8% | ||||||||
(Cost $265,759,300) | 306,007,211 | |||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.8)% | (2,419,959 | ) | ||||||
NET ASSETS – 100.0% | $ | 303,587,252 | ||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 75 |
Statements of Assets and Liabilities |
Royce | ||||||||||||||||
Pennsylvania | Royce Micro-Cap | Royce Premier | Royce Low-Priced | |||||||||||||
Mutual Fund | Fund | Fund | Stock Fund | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at value (including collateral on loaned securities) | ||||||||||||||||
Non-Affiliated Companies | $ | 5,550,946,465 | $ | 525,116,182 | $ | 4,072,312,384 | $ | 655,017,753 | ||||||||
Affiliated Companies | 178,343,677 | 5,107,624 | 1,299,076,954 | 3,730,758 | ||||||||||||
Repurchase agreements (at cost and value) | 109,019,000 | 20,212,000 | 185,743,000 | 35,516,000 | ||||||||||||
Cash and foreign currency | 880,144 | 15,061 | 883 | 923 | ||||||||||||
Receivable for investments sold | 65,302,267 | 4,075,898 | 43,549,486 | 17,614,625 | ||||||||||||
Receivable for capital shares sold | 77,564,885 | 781,370 | 4,890,378 | 427,182 | ||||||||||||
Receivable for dividends and interest | 3,921,057 | 439,699 | 5,538,011 | 669,838 | ||||||||||||
Prepaid expenses and other assets | 2,154,245 | 2,106 | 20,732 | 2,522 | ||||||||||||
Total Assets | 5,988,131,740 | 555,749,940 | 5,611,131,828 | 712,979,601 | ||||||||||||
LIABILITIES: | ||||||||||||||||
Payable for collateral on loaned securities | 62,985,137 | 22,089,668 | 84,024,012 | 20,346,322 | ||||||||||||
Payable for investments purchased | 12,259,480 | 1,352,743 | 1,502,901 | 5,326,402 | ||||||||||||
Payable for capital shares redeemed | 175,405,024 | 2,451,056 | 114,657,002 | 8,089,584 | ||||||||||||
Payable for investment advisory fees | 3,774,109 | 602,466 | 4,549,583 | 637,879 | ||||||||||||
Payable for trustees’ fees | 84,172 | 9,191 | 83,171 | 12,771 | ||||||||||||
Accrued expenses | 4,304,076 | 611,584 | 4,156,166 | 1,914,218 | ||||||||||||
Total Liabilities | 258,811,998 | 27,116,708 | 208,972,835 | 36,327,176 | ||||||||||||
Net Assets | $ | 5,729,319,742 | $ | 528,633,232 | $ | 5,402,158,993 | $ | 676,652,425 | ||||||||
ANALYSIS OF NET ASSETS: | ||||||||||||||||
Paid-in capital | $ | 3,718,548,891 | $ | 403,474,107 | $ | 3,222,867,307 | $ | 548,779,912 | ||||||||
Undistributed net investment income (loss) | (5,697,006 | ) | (149,122 | ) | 655,864 | (205,502 | ) | |||||||||
Accumulated net realized gain (loss) on investments and foreign currency | 224,504,362 | 18,320,809 | 15,143,216 | (6,771,313 | ) | |||||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 1,791,963,495 | 106,987,438 | 2,163,492,606 | 134,849,328 | ||||||||||||
Net Assets | $ | 5,729,319,742 | $ | 528,633,232 | $ | 5,402,158,993 | $ | 676,652,425 | ||||||||
Investment Class | $ | 3,869,578,713 | $ | 414,119,794 | $ | 4,097,960,698 | $ | 50,370,878 | ||||||||
Service Class | 333,548,022 | 38,645,551 | 172,810,100 | 520,905,355 | ||||||||||||
Consultant Class | 676,346,647 | 75,867,887 | 56,884,480 | |||||||||||||
Institutional Class | 802,516,796 | 594,462,532 | 101,473,343 | |||||||||||||
W Class | 446,379,746 | |||||||||||||||
R Class | 36,622,257 | 27,355,266 | 1,891,461 | |||||||||||||
K Class | 10,707,307 | 6,306,171 | 2,011,388 | |||||||||||||
SHARES OUTSTANDING (unlimited number of $.001 par value): | ||||||||||||||||
Investment Class | 297,755,941 | 28,622,186 | 207,808,832 | 5,324,782 | ||||||||||||
Service Class | 25,734,254 | 2,709,313 | 8,938,648 | 55,083,468 | ||||||||||||
Consultant Class | 60,624,974 | 6,205,342 | 3,327,572 | |||||||||||||
Institutional Class | 61,647,628 | 29,851,094 | 10,729,444 | |||||||||||||
W Class | 22,585,871 | |||||||||||||||
R Class | 2,930,060 | 1,453,633 | 208,270 | |||||||||||||
K Class | 947,897 | 1,093,930 | 681,104 | |||||||||||||
NET ASSET VALUES (Net Assets ÷ Shares Outstanding): | ||||||||||||||||
Investment Class1 | $13.00 | $14.47 | $19.72 | $9.46 | ||||||||||||
Service Class1 | 12.96 | 14.26 | 19.33 | 9.46 | ||||||||||||
Consultant Class2 | 11.16 | 12.23 | 17.09 | |||||||||||||
Institutional Class3 | 13.02 | 19.91 | 9.46 | |||||||||||||
W Class3 | 19.76 | |||||||||||||||
R Class3 | 12.50 | 18.82 | 9.08 | |||||||||||||
K Class3 | 11.30 | 5.76 | 2.95 | |||||||||||||
Investments at identified cost | $ | 3,937,324,044 | $ | 423,219,695 | $ | 3,207,767,466 | $ | 523,899,941 | ||||||||
Market value of loaned securities | 59,406,301 | 21,158,018 | 80,170,632 | 19,485,033 | ||||||||||||
76 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Total Return | Royce Heritage | Royce Opportunity | Royce Special | ||||||||||||||
Fund | Fund | Fund | Equity Fund | ||||||||||||||
ASSETS: | |||||||||||||||||
Investments at value (including collateral on loaned securities) | |||||||||||||||||
Non-Affiliated Companies | $ | 4,448,675,416 | $ | 347,825,497 | $ | 2,266,533,764 | $ | 1,160,757,030 | |||||||||
Affiliated Companies | 79,160,671 | – | 50,359,053 | 1,570,600,588 | |||||||||||||
Repurchase agreements (at cost and value) | 109,237,000 | 12,085,000 | 164,768,000 | 169,503,000 | |||||||||||||
Cash and foreign currency | 67,149 | 534 | 816 | 646 | |||||||||||||
Receivable for investments sold | 36,154,558 | – | 15,277,154 | 457,140 | |||||||||||||
Receivable for capital shares sold | 10,396,423 | 128,749 | 1,307,519 | 3,561,192 | |||||||||||||
Receivable for dividends and interest | 6,463,502 | 276,181 | 1,209,382 | 916,398 | |||||||||||||
Prepaid expenses and other assets | 16,390 | 1,234 | 8,421 | 13,677 | |||||||||||||
Total Assets | 4,690,171,109 | 360,317,195 | 2,499,464,109 | 2,905,809,671 | |||||||||||||
LIABILITIES: | |||||||||||||||||
Payable for collateral on loaned securities | 5,893,087 | 964,385 | 164,589,994 | – | |||||||||||||
Payable for investments purchased | 1,988,211 | – | 4,276,411 | 1,780,764 | |||||||||||||
Payable for capital shares redeemed | 16,203,750 | 295,300 | 12,171,496 | 12,178,946 | |||||||||||||
Payable for investment advisory fees | 3,824,141 | 304,305 | 1,932,401 | 2,437,228 | |||||||||||||
Payable for trustees’ fees | 64,892 | 4,560 | 31,231 | 41,012 | |||||||||||||
Accrued expenses | 3,438,475 | 230,527 | 1,093,286 | 1,665,325 | |||||||||||||
Total Liabilities | 31,412,556 | 1,799,077 | 184,094,819 | 18,103,275 | |||||||||||||
Net Assets | $ | 4,658,758,553 | $ | 358,518,118 | $ | 2,315,369,290 | $ | 2,887,706,396 | |||||||||
ANALYSIS OF NET ASSETS: | |||||||||||||||||
Paid-in capital | $ | 2,999,491,782 | $ | 297,151,138 | $ | 1,960,873,836 | $ | 2,131,035,141 | |||||||||
Undistributed net investment income (loss) | (2,595,297 | ) | 902,677 | (21,843 | ) | 405,823 | |||||||||||
Accumulated net realized gain (loss) on investments and foreign currency | 145,649,070 | 1,189,636 | 5,726,495 | 50,279,495 | |||||||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 1,516,212,998 | 59,274,667 | 348,790,802 | 705,985,937 | |||||||||||||
Net Assets | $ | 4,658,758,553 | $ | 358,518,118 | $ | 2,315,369,290 | $ | 2,887,706,396 | |||||||||
Investment Class | $ | 3,077,950,904 | $ | 160,557,972 | $ | 1,284,044,082 | $ | 1,950,210,523 | |||||||||
Service Class | 232,813,500 | 175,432,802 | 155,085,055 | 233,791,413 | |||||||||||||
Consultant Class | 356,731,299 | 13,338,424 | 20,517,623 | 63,981,363 | |||||||||||||
Institutional Class | 572,662,436 | 799,131,076 | 639,723,097 | ||||||||||||||
W Class | 261,828,594 | ||||||||||||||||
R Class | 65,500,847 | 3,726,885 | 33,698,862 | ||||||||||||||
K Class | 91,270,973 | 5,462,035 | 22,892,592 | ||||||||||||||
SHARES OUTSTANDING (unlimited number of $.001 par value): | |||||||||||||||||
Investment Class | 208,786,644 | 10,559,070 | 95,370,961 | 85,325,716 | |||||||||||||
Service Class | 15,539,869 | 11,566,979 | 12,119,764 | 10,249,892 | |||||||||||||
Consultant Class | 23,696,624 | 1,162,934 | 1,739,601 | 3,007,384 | |||||||||||||
Institutional Class | 39,201,610 | 58,568,995 | 28,170,775 | ||||||||||||||
W Class | 17,788,404 | ||||||||||||||||
R Class | 4,345,543 | 351,596 | 2,682,572 | ||||||||||||||
K Class | 8,519,686 | 510,469 | 1,979,435 | ||||||||||||||
NET ASSET VALUES (Net Assets ÷ Shares Outstanding): | |||||||||||||||||
Investment Class1 | $14.74 | $15.21 | $13.46 | $22.86 | |||||||||||||
Service Class1 | 14.98 | 15.17 | 12.80 | 22.81 | |||||||||||||
Consultant Class2 | 15.05 | 11.47 | 11.79 | 21.27 | |||||||||||||
Institutional Class3 | 14.61 | 13.64 | 22.71 | ||||||||||||||
W Class3 | 14.72 | ||||||||||||||||
R Class3 | 15.07 | 10.60 | 12.56 | ||||||||||||||
K Class3 | 10.71 | 10.70 | 11.57 | ||||||||||||||
Investments at identified cost | $ | 3,011,614,256 | $ | 288,547,300 | $ | 1,968,101,955 | $ | 2,025,371,681 | |||||||||
Market value of loaned securities | 5,965,208 | 922,167 | 157,890,407 | – | |||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 77 |
Statements of Assets and Liabilities |
Royce Value Plus | Royce Dividend | |||||||||||||||
Royce Value Fund | Fund | Royce 100 Fund | Value Fund | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at value (including collateral on loaned securities) | ||||||||||||||||
Non-Affiliated Companies | $ | 869,365,770 | $ | 1,012,649,052 | $ | 210,630,307 | $ | 513,867,984 | ||||||||
Repurchase agreements (at cost and value) | 16,293,000 | 22,541,000 | 9,261,000 | 1,561,000 | ||||||||||||
Cash and foreign currency | 811 | 247 | 553 | 11,965 | ||||||||||||
Receivable for investments sold | 1,836,972 | – | 7,228,211 | 726,676 | ||||||||||||
Receivable for capital shares sold | 539,932 | 708,848 | 216,320 | 930,372 | ||||||||||||
Receivable for dividends and interest | 394,396 | 271,940 | 100,711 | 548,239 | ||||||||||||
Prepaid expenses and other assets | 3,046 | 2,966 | 818 | 3,545 | ||||||||||||
Total Assets | 888,433,927 | 1,036,174,053 | 227,437,920 | 517,649,781 | ||||||||||||
LIABILITIES: | ||||||||||||||||
Payable for collateral on loaned securities | – | 104,586,929 | – | 753,190 | ||||||||||||
Payable for investments purchased | 581,528 | 26,787 | 4,940,493 | 171,327 | ||||||||||||
Payable for capital shares redeemed | 4,408,071 | 3,572,354 | 705,971 | 2,415,080 | ||||||||||||
Payable for investment advisory fees | 756,836 | 793,871 | 191,833 | 417,999 | ||||||||||||
Payable for trustees’ fees | 13,177 | 13,937 | 3,467 | 7,606 | ||||||||||||
Accrued expenses | 847,344 | 1,136,161 | 307,442 | 468,514 | ||||||||||||
Total Liabilities | 6,606,956 | 110,130,039 | 6,149,206 | 4,233,716 | ||||||||||||
Net Assets | $ | 881,826,971 | $ | 926,044,014 | $ | 221,288,714 | $ | 513,416,065 | ||||||||
ANALYSIS OF NET ASSETS: | ||||||||||||||||
Paid-in capital | $ | 693,715,879 | $ | 663,727,536 | $ | 163,508,467 | $ | 415,144,568 | ||||||||
Undistributed net investment income (loss) | 302,597 | – | (9,879 | ) | 2,098,387 | |||||||||||
Accumulated net realized gain (loss) on investments and foreign currency | 21,476,712 | 35,360,433 | 7,990,375 | 7,299,201 | ||||||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 166,331,783 | 226,956,045 | 49,799,751 | 88,873,909 | ||||||||||||
Net Assets | $ | 881,826,971 | $ | 926,044,014 | $ | 221,288,714 | $ | 513,416,065 | ||||||||
Investment Class | $ | 140,162,552 | $ | 295,412,242 | $ | 68,898,103 | $ | 176,002,080 | ||||||||
Service Class | 477,999,102 | 572,898,885 | 149,735,759 | 295,559,808 | ||||||||||||
Consultant Class | 26,715,810 | 17,157,650 | 911,950 | |||||||||||||
Institutional Class | 196,543,463 | 38,717,799 | 40,942,227 | |||||||||||||
R Class | 31,043,090 | 1,360,322 | 1,982,776 | |||||||||||||
K Class | 9,362,954 | 497,116 | 672,076 | |||||||||||||
SHARES OUTSTANDING (unlimited number of $.001 par value): | ||||||||||||||||
Investment Class | 11,869,989 | 20,574,694 | 7,881,365 | 21,679,163 | ||||||||||||
Service Class | 40,657,752 | 40,261,613 | 17,314,820 | 35,946,387 | ||||||||||||
Consultant Class | 2,458,873 | 1,307,958 | 98,861 | |||||||||||||
Institutional Class | 16,638,860 | 2,676,939 | 5,060,987 | |||||||||||||
R Class | 2,715,293 | 99,727 | 177,966 | |||||||||||||
K Class | 1,051,455 | 54,940 | 59,279 | |||||||||||||
NET ASSET VALUES (Net Assets ÷ Shares Outstanding): | ||||||||||||||||
Investment Class1 | $11.81 | $14.36 | $8.74 | $8.12 | ||||||||||||
Service Class1 | 11.76 | 14.23 | 8.65 | 8.22 | ||||||||||||
Consultant Class2 | 10.87 | 13.12 | 9.22 | |||||||||||||
Institutional Class3 | 11.81 | 14.46 | 8.09 | |||||||||||||
�� | ||||||||||||||||
R Class3 | 11.43 | 13.64 | 11.14 | |||||||||||||
K Class3 | 8.90 | 9.05 | 11.34 | |||||||||||||
Investments at identified cost | $ | 703,033,988 | $ | 785,693,084 | $ | 160,829,797 | $ | 424,990,553 | ||||||||
Market value of loaned securities | – | 100,732,000 | – | 723,558 | ||||||||||||
78 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce International | Royce Special | |||||||||||
Royce Global | Smaller-Companies | Equity Multi-Cap | ||||||||||
Value Fund | Fund | Fund | ||||||||||
ASSETS: | ||||||||||||
Investments at value | ||||||||||||
Non-Affiliated Companies | $ | 89,103,986 | $ | 32,562,050 | $ | 277,484,211 | ||||||
Repurchase agreements (at cost and value) | 8,407,000 | 1,860,000 | 28,523,000 | |||||||||
Cash and foreign currency | 336,573 | 5,495 | 535 | |||||||||
Receivable for investments sold | 527,536 | 34,943 | – | |||||||||
Receivable for capital shares sold | 74,120 | 244,253 | 237,812 | |||||||||
Receivable for dividends and interest | 275,550 | 54,431 | 390,984 | |||||||||
Prepaid expenses and other assets | 582 | 245 | 1,520 | |||||||||
Total Assets | 98,725,347 | 34,761,417 | 306,638,062 | |||||||||
LIABILITIES: | ||||||||||||
Payable for investments purchased | 1,558,666 | 959,325 | 2,504,837 | |||||||||
Payable for capital shares redeemed | 630,555 | 569,563 | 190,258 | |||||||||
Payable for investment advisory fees | 141,036 | – | 213,277 | |||||||||
Payable for trustees’ fees | 2,646 | 626 | 2,791 | |||||||||
Accrued expenses | 220,206 | 74,827 | 139,647 | |||||||||
Deferred capital gains tax | 2,819 | 74,729 | – | |||||||||
Total Liabilities | 2,555,928 | 1,679,070 | 3,050,810 | |||||||||
Net Assets | $ | 96,169,419 | $ | 33,082,347 | $ | 303,587,252 | ||||||
ANALYSIS OF NET ASSETS: | ||||||||||||
Paid-in capital | $ | 172,223,436 | $ | 37,172,401 | $ | 254,935,120 | ||||||
Undistributed net investment income (loss) | 58,999 | (32,823 | ) | 104,459 | ||||||||
Accumulated net realized gain (loss) on investments and foreign currency | (73,527,399 | ) | (2,903,366 | ) | 8,299,762 | |||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | (2,585,617 | ) | (1,153,865 | ) | 40,247,911 | |||||||
Net Assets | $ | 96,169,419 | $ | 33,082,347 | $ | 303,587,252 | ||||||
Investment Class | $ | 45,698,569 | $ | 1,118,777 | $ | 123,544,781 | ||||||
Service Class | 29,625,041 | 29,610,726 | 94,878,231 | |||||||||
Consultant Class | 20,706,953 | 9,223,608 | ||||||||||
Institutional Class | 2,352,844 | 75,940,632 | ||||||||||
R Class | 116,240 | |||||||||||
K Class | 22,616 | |||||||||||
SHARES OUTSTANDING (unlimited number of $.001 par value): | ||||||||||||
Investment Class | 3,633,168 | 141,479 | 7,943,221 | |||||||||
Service Class | 2,341,115 | 3,022,335 | 6,081,737 | |||||||||
Consultant Class | 1,654,081 | 860,575 | ||||||||||
Institutional Class | 289,867 | 4,879,325 | ||||||||||
R Class | 12,503 | |||||||||||
K Class | 2,431 | |||||||||||
NET ASSET VALUES (Net Assets ÷ Shares Outstanding): | ||||||||||||
Investment Class1, | $12.58 | $7.91 | $15.55 | |||||||||
Service Class1 | 12.65 | 9.80 | 15.60 | |||||||||
Consultant Class2 | 12.52 | 10.72 | ||||||||||
Institutional Class3 | 8.12 | 15.56 | ||||||||||
R Class3 | 9.30 | |||||||||||
K Class3 | 9.30 | |||||||||||
Investments at identified cost | $ | 91,668,952 | $ | 33,637,676 | $ | 237,236,300 | ||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 79 |
Statements of Changes in Net Assets |
Royce Pennsylvania Mutual Fund | Royce Micro-Cap Fund | Royce Premier Fund | ||||||||||||||||||||||
Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | |||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) | $ | 15,158,466 | $ | 7,661,265 | $ | (4,483,168 | ) | $ | (5,870,665 | ) | $ | 21,471,509 | $ | (452,026 | ) | |||||||||
Net realized gain (loss) on investments and foreign | ||||||||||||||||||||||||
currency | 850,882,031 | 471,075,967 | 67,181,821 | 80,848,944 | 509,484,795 | 873,083,934 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) | ||||||||||||||||||||||||
on investments and foreign currency | (941,232,232 | ) | 1,515,290,678 | (98,379,469 | ) | 90,069,276 | (571,494,932 | ) | 820,330,897 | |||||||||||||||
Net increase (decrease) in net assets from | ||||||||||||||||||||||||
investment operations | (75,191,735 | ) | 1,994,027,910 | (35,680,816 | ) | 165,047,555 | (40,538,628 | ) | 1,692,962,805 | |||||||||||||||
DISTRIBUTIONS: | ||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||
Investment Class | (12,703,277 | ) | (431,367 | ) | – | (699,816 | ) | (15,697,641 | ) | – | ||||||||||||||
Service Class | – | – | – | – | – | – | ||||||||||||||||||
Consultant Class | – | – | – | – | – | – | ||||||||||||||||||
Institutional Class | (3,678,635 | ) | (937,016 | ) | (3,363,878 | ) | – | |||||||||||||||||
W Class | (1,812,923 | ) | – | |||||||||||||||||||||
R Class | – | – | – | – | ||||||||||||||||||||
K Class | – | – | (36,229 | ) | – | |||||||||||||||||||
Net realized gain on investments and foreign | ||||||||||||||||||||||||
currency | ||||||||||||||||||||||||
Investment Class | (417,000,811 | ) | (260,021,200 | ) | (39,701,168 | ) | (45,125,296 | ) | (398,730,083 | ) | (488,208,024 | ) | ||||||||||||
Service Class | (49,712,548 | ) | (31,628,047 | ) | (3,907,041 | ) | (5,609,190 | ) | (17,256,962 | ) | (46,637,769 | ) | ||||||||||||
Consultant Class | (82,823,610 | ) | (45,624,009 | ) | (8,779,199 | ) | (9,087,282 | ) | (6,231,891 | ) | (6,977,329 | ) | ||||||||||||
Institutional Class | (86,408,552 | ) | (41,396,200 | ) | (65,714,517 | ) | (90,956,054 | ) | ||||||||||||||||
W Class | (44,052,112 | ) | (52,811,951 | ) | ||||||||||||||||||||
R Class | (4,018,570 | ) | (2,317,940 | ) | (2,717,731 | ) | (3,194,633 | ) | ||||||||||||||||
K Class | (1,293,456 | ) | (689,970 | ) | (1,653,995 | ) | (1,877,675 | ) | ||||||||||||||||
Total distributions | (657,639,459 | ) | (383,045,749 | ) | (52,387,408 | ) | (60,521,584 | ) | (557,267,962 | ) | (690,663,435 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Net capital share transactions | ||||||||||||||||||||||||
Investment Class | (689,872,693 | ) | (353,912,164 | ) | (170,862,529 | ) | (172,590,098 | ) | (547,373,395 | ) | (240,379,249 | ) | ||||||||||||
Service Class | (199,343,245 | ) | (15,357,868 | ) | (33,847,817 | ) | (39,264,005 | ) | (129,533,114 | ) | (309,788,929 | ) | ||||||||||||
Consultant Class | (14,396,432 | ) | (29,907,854 | ) | (26,840,854 | ) | (15,225,756 | ) | (2,535,012 | ) | (1,639,240 | ) | ||||||||||||
Institutional Class | 81,146,529 | 181,494,950 | (326,676,517 | ) | (11,316,540 | ) | ||||||||||||||||||
W Class | (56,736,703 | ) | (61,008,076 | ) | ||||||||||||||||||||
R Class | (2,792,539 | ) | 1,818,243 | (2,140,060 | ) | (437,535 | ) | |||||||||||||||||
K Class | 439,120 | 482,011 | (526,085 | ) | (1,286,771 | ) | ||||||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||
Investment Class | 66,223 | 75,224 | 6,501 | 35,746 | 68,382 | 190,877 | ||||||||||||||||||
Service Class | 44,289 | 52,548 | 45,360 | 27,157 | 3,900 | 8,112 | ||||||||||||||||||
Net increase (decrease) in net assets from capital | ||||||||||||||||||||||||
share transactions | (824,708,748 | ) | (215,254,910 | ) | (231,499,339 | ) | (227,016,956 | ) | (1,065,448,604 | ) | (625,657,351 | ) | ||||||||||||
Net Increase (Decrease) In Net Assets | (1,557,539,942 | ) | 1,395,727,251 | (319,567,563 | ) | (122,490,985 | ) | (1,663,255,194 | ) | 376,642,019 | ||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 7,286,859,684 | 5,891,132,433 | 848,200,795 | 970,691,780 | 7,065,414,187 | 6,688,772,168 | ||||||||||||||||||
End of year | $ | 5,729,319,742 | $ | 7,286,859,684 | $ | 528,633,232 | $ | 848,200,795 | $ | 5,402,158,993 | $ | 7,065,414,187 | ||||||||||||
Undistributed Net Investment Income (Loss) at End | ||||||||||||||||||||||||
of Year | $ | (5,697,006 | ) | $ | (1,998,921 | ) | $ | (149,122 | ) | $ | (3,027,856 | ) | $ | 655,864 | $ | (2 | ) | |||||||
80 | The Royce Funds 2014 Annual 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 | ||||||||||||||||||||||
Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | |||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) | $ | 2,857,398 | $ | 1,768,327 | $ | 43,476,286 | $ | 46,503,739 | $ | 1,470,971 | $ | 107,612 | ||||||||||||
Net realized gain (loss) on investments and foreign | ||||||||||||||||||||||||
currency | 178,888,358 | 338,510,647 | 599,509,277 | 516,234,642 | 16,802,002 | 42,713,139 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) | ||||||||||||||||||||||||
on investments and foreign currency | (201,991,166 | ) | (105,343,208 | ) | (593,275,861 | ) | 895,364,319 | (21,766,741 | ) | 28,856,933 | ||||||||||||||
Net increase (decrease) in net assets from | ||||||||||||||||||||||||
investment operations | (20,245,410 | ) | 234,935,766 | 49,709,702 | 1,458,102,700 | (3,493,768 | ) | 71,677,684 | ||||||||||||||||
DISTRIBUTIONS: | ||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||
Investment Class | (39,705 | ) | (323,323 | ) | (56,476,197 | ) | (30,314,036 | ) | (508,210 | ) | (349,578 | ) | ||||||||||||
Service Class | – | (379,805 | ) | (2,393,470 | ) | (2,207,261 | ) | – | (47,427 | ) | ||||||||||||||
Consultant Class | (759,635 | ) | – | – | – | |||||||||||||||||||
Institutional Class | (298,806 | ) | (1,777,124 | ) | (11,453,242 | ) | (6,005,663 | ) | ||||||||||||||||
W Class | (4,594,582 | ) | (1,936,210 | ) | ||||||||||||||||||||
R Class | – | – | (488,326 | ) | (134,138 | ) | – | – | ||||||||||||||||
K Class | – | (6,881 | ) | (1,252,049 | ) | (751,220 | ) | – | – | |||||||||||||||
Net realized gain on investments and foreign | ||||||||||||||||||||||||
currency | ||||||||||||||||||||||||
Investment Class | (14,919,772 | ) | (12,723,954 | ) | (307,872,630 | ) | (295,570,600 | ) | (8,225,023 | ) | (12,211,788 | ) | ||||||||||||
Service Class | (167,025,408 | ) | (131,337,387 | ) | (22,938,230 | ) | (42,384,314 | ) | (9,172,987 | ) | (23,990,047 | ) | ||||||||||||
Consultant Class | (34,858,344 | ) | (31,920,900 | ) | (903,116 | ) | (2,187,387 | ) | ||||||||||||||||
Institutional Class | (27,925,196 | ) | (63,367,740 | ) | (56,439,291 | ) | (47,200,579 | ) | ||||||||||||||||
W Class | (25,890,733 | ) | (19,766,304 | ) | ||||||||||||||||||||
R Class | (532,869 | ) | (414,282 | ) | (6,318,710 | ) | (5,693,320 | ) | (284,436 | ) | (994,363 | ) | ||||||||||||
K Class | (1,092,324 | ) | (832,746 | ) | (11,933,090 | ) | (20,859,671 | ) | (396,761 | ) | (1,055,146 | ) | ||||||||||||
Total distributions | (211,834,080 | ) | (211,163,242 | ) | (543,668,529 | ) | (504,744,216 | ) | (19,490,533 | ) | (40,835,736 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Net capital share transactions | ||||||||||||||||||||||||
Investment Class | (21,276,371 | ) | (170,583,797 | ) | (252,019,403 | ) | (16,146,326 | ) | 52,478,285 | 73,588,985 | ||||||||||||||
Service Class | (299,833,853 | ) | (804,469,884 | ) | (234,371,808 | ) | 147,512,588 | (36,442,055 | ) | (4,880,969 | ) | |||||||||||||
Consultant Class | (13,001,945 | ) | 4,827,235 | (1,382,087 | ) | 899,381 | ||||||||||||||||||
Institutional Class | (218,563,474 | ) | (631,338,844 | ) | 10,261,846 | 118,224,237 | ||||||||||||||||||
W Class | 39,625,519 | 38,979,851 | ||||||||||||||||||||||
R Class | (638,616 | ) | (2,714,812 | ) | (821,115 | ) | 12,568,863 | (2,676,572 | ) | 1,571,248 | ||||||||||||||
K Class | (694,975 | ) | (2,166,084 | ) | (91,917,398 | ) | 2,762,456 | (483,726 | ) | (1,331,961 | ) | |||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||
Investment Class | 2,035 | 17,171 | 62,578 | 75,527 | 411 | 669 | ||||||||||||||||||
Service Class | 7,803 | 48,913 | 19,546 | 45,568 | 2,709 | 11,734 | ||||||||||||||||||
Net increase (decrease) in net assets from capital | ||||||||||||||||||||||||
share transactions | (540,997,451 | ) | (1,611,207,337 | ) | (542,162,180 | ) | 308,849,999 | 11,496,965 | 69,859,087 | |||||||||||||||
Net Increase (Decrease) In Net Assets | (773,076,941 | ) | (1,587,434,813 | ) | (1,036,121,007 | ) | 1,262,208,483 | (11,487,336 | ) | 100,701,035 | ||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 1,449,729,366 | 3,037,164,179 | 5,694,879,560 | 4,432,671,077 | 370,005,454 | 269,304,419 | ||||||||||||||||||
End of year | $ | 676,652,425 | $ | 1,449,729,366 | $ | 4,658,758,553 | $ | 5,694,879,560 | $ | 358,518,118 | $ | 370,005,454 | ||||||||||||
Undistributed Net Investment Income (Loss) at End | ||||||||||||||||||||||||
of Year | $ | (205,502 | ) | $ | (3,745,157 | ) | $ | (2,595,297 | ) | $ | (5,494,463 | ) | $ | 902,677 | $ | 45,409 | ||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 81 |
Statements of Changes in Net Assets |
Royce Opportunity Fund | Royce Special Equity Fund | Royce Value Fund | ||||||||||||||||||||||
Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | |||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) | $ | (7,726,211 | ) | $ | (8,323,304 | ) | $ | 14,181,577 | $ | 3,797,163 | $ | 1,379,609 | $ | (1,046,544 | ) | |||||||||
Net realized gain (loss) on investments and foreign | ||||||||||||||||||||||||
currency | 270,749,921 | 324,683,300 | 282,154,386 | 366,833,496 | 127,638,267 | 104,447,215 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) | ||||||||||||||||||||||||
on investments and foreign currency | (282,435,370 | ) | 492,429,616 | (285,557,513 | ) | 485,484,439 | (130,516,990 | ) | 192,266,104 | |||||||||||||||
Net increase (decrease) in net assets from | ||||||||||||||||||||||||
investment operations | (19,411,660 | ) | 808,789,612 | 10,778,450 | 856,115,098 | (1,499,114 | ) | 295,666,775 | ||||||||||||||||
DISTRIBUTIONS: | ||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||
Investment Class | – | – | (9,502,532 | ) | (2,784,704 | ) | (331,391 | ) | (430,335 | ) | ||||||||||||||
Service Class | – | – | (460,707 | ) | – | – | – | |||||||||||||||||
Consultant Class | – | – | – | – | – | – | ||||||||||||||||||
Institutional Class | – | (506,976 | ) | (3,812,516 | ) | (1,484,535 | ) | (739,829 | ) | (801,517 | ) | |||||||||||||
R Class | – | – | – | – | ||||||||||||||||||||
K Class | – | – | – | – | ||||||||||||||||||||
Net realized gain on investments and foreign | ||||||||||||||||||||||||
currency | ||||||||||||||||||||||||
Investment Class | (163,669,872 | ) | (115,737,752 | ) | (179,944,282 | ) | (205,169,213 | ) | (18,283,548 | ) | (13,405,198 | ) | ||||||||||||
Service Class | (20,590,649 | ) | (33,239,063 | ) | (22,106,099 | ) | (27,558,217 | ) | (60,973,556 | ) | (47,070,978 | ) | ||||||||||||
Consultant Class | (2,830,608 | ) | (1,843,343 | ) | (6,200,641 | ) | (6,115,330 | ) | (3,553,425 | ) | (2,278,341 | ) | ||||||||||||
Institutional Class | (101,200,321 | ) | (77,841,147 | ) | (58,145,358 | ) | (57,360,331 | ) | (24,265,825 | ) | (14,980,670 | ) | ||||||||||||
R Class | (4,511,800 | ) | (2,051,002 | ) | (4,166,100 | ) | (2,587,581 | ) | ||||||||||||||||
K Class | (3,319,400 | ) | (1,712,998 | ) | (1,486,852 | ) | (1,401,823 | ) | ||||||||||||||||
Total distributions | (296,122,650 | ) | (232,932,281 | ) | (280,172,135 | ) | (300,472,330 | ) | (113,800,526 | ) | (82,956,443 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Net capital share transactions | ||||||||||||||||||||||||
Investment Class | 31,743,029 | 214,071,968 | (376,370,344 | ) | 74,313,256 | (37,927,661 | ) | (42,051,102 | ) | |||||||||||||||
Service Class | (31,618,193 | ) | (59,230,398 | ) | (78,674,569 | ) | 36,500,115 | (140,511,862 | ) | (280,452,969 | ) | |||||||||||||
Consultant Class | 4,875,799 | 3,337,411 | (949,433 | ) | 3,787,713 | (1,050,038 | ) | (6,913,766 | ) | |||||||||||||||
Institutional Class | 53,771,758 | (49,903,561 | ) | (4,835,990 | ) | 19,319,756 | 1,519,448 | (19,355,348 | ) | |||||||||||||||
R Class | 15,752,508 | 13,341,482 | (2,055,524 | ) | (6,762,442 | ) | ||||||||||||||||||
K Class | 8,646,557 | 6,241,844 | (5,355,597 | ) | (4,715,820 | ) | ||||||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||
Investment Class | 44,101 | 33,487 | 89,514 | 98,785 | 3,778 | 5,728 | ||||||||||||||||||
Service Class | 51,186 | 21,097 | 9,825 | 20,039 | 11,345 | 28,188 | ||||||||||||||||||
Net increase (decrease) in net assets from capital | ||||||||||||||||||||||||
share transactions | 83,266,745 | 127,913,330 | (460,730,997 | ) | 134,039,664 | (185,366,111 | ) | (360,217,531 | ) | |||||||||||||||
Net Increase (Decrease) In Net Assets | (232,267,565 | ) | 703,770,661 | (730,124,682 | ) | 689,682,432 | (300,665,751 | ) | (147,507,199 | ) | ||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 2,547,636,855 | 1,843,866,194 | 3,617,831,078 | 2,928,148,646 | 1,182,492,722 | 1,329,999,921 | ||||||||||||||||||
End of year | $ | 2,315,369,290 | $ | 2,547,636,855 | $ | 2,887,706,396 | $ | 3,617,831,078 | $ | 881,826,971 | $ | 1,182,492,722 | ||||||||||||
Undistributed Net Investment Income (Loss) at End | ||||||||||||||||||||||||
of Year | $ | (21,843 | ) | $ | 25,570 | $ | 405,823 | $ | – | $ | 302,597 | $ | (5,366 | ) | ||||||||||
82 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Value Plus Fund | Royce 100 Fund | Royce Dividend Value Fund | ||||||||||||||||||||||
Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | |||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) | $ | (5,084,731 | ) | $ | (8,792,263 | ) | $ | (807,160 | ) | $ | (899,035 | ) | $ | 6,568,248 | $ | 5,283,336 | ||||||||
Net realized gain (loss) on investments and foreign | ||||||||||||||||||||||||
currency | 185,659,073 | 236,175,134 | 34,836,525 | 42,762,789 | 31,074,320 | 37,699,702 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) | ||||||||||||||||||||||||
on investments and foreign currency | (144,652,002 | ) | 163,082,996 | (43,017,230 | ) | 37,488,379 | (51,255,088 | ) | 100,268,425 | |||||||||||||||
Net increase (decrease) in net assets from | ||||||||||||||||||||||||
investment operations | 35,922,340 | 390,465,867 | (8,987,865 | ) | 79,352,133 | (13,612,520 | ) | 143,251,463 | ||||||||||||||||
DISTRIBUTIONS: | ||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||
Investment Class | – | (47,920 | ) | – | (171,769 | ) | (2,211,322 | ) | (2,101,030 | ) | ||||||||||||||
Service Class | – | – | – | (134,400 | ) | (2,404,931 | ) | (2,644,407 | ) | |||||||||||||||
Consultant Class | – | – | (2,223 | ) | ||||||||||||||||||||
Institutional Class | – | (426,647 | ) | (561,238 | ) | (395,915 | ) | |||||||||||||||||
R Class | – | – | – | – | ||||||||||||||||||||
K Class | – | (525 | ) | – | – | |||||||||||||||||||
Net realized gain on investments and foreign | ||||||||||||||||||||||||
currency | ||||||||||||||||||||||||
Investment Class | (56,823,564 | ) | (18,415,039 | ) | (7,631,746 | ) | (7,553,032 | ) | (10,463,314 | ) | (12,036,485 | ) | ||||||||||||
Service Class | (111,290,311 | ) | (67,233,777 | ) | (16,718,190 | ) | (29,276,357 | ) | (17,175,104 | ) | (23,009,857 | ) | ||||||||||||
Consultant Class | (3,522,779 | ) | (1,776,890 | ) | (47,672 | ) | ||||||||||||||||||
Institutional Class | (7,260,689 | ) | (11,711,029 | ) | (2,354,384 | ) | (1,765,841 | ) | ||||||||||||||||
R Class | (271,992 | ) | (124,722 | ) | (168,762 | ) | (287,743 | ) | ||||||||||||||||
K Class | (242,326 | ) | (102,394 | ) | (64,553 | ) | (232,789 | ) | ||||||||||||||||
Total distributions | (179,411,661 | ) | (99,838,943 | ) | (24,583,251 | ) | (37,656,090 | ) | (35,220,188 | ) | (41,953,535 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Net capital share transactions | ||||||||||||||||||||||||
Investment Class | 97,261,344 | (32,018,470 | ) | 18,982,373 | (17,441,016 | ) | (18,740,722 | ) | 60,601,532 | |||||||||||||||
Service Class | (172,358,399 | ) | (327,083,427 | ) | (59,224,113 | ) | (20,217,752 | ) | (83,630,839 | ) | 91,250,464 | |||||||||||||
Consultant Class | (2,449,406 | ) | (921,317 | ) | 984,157 | |||||||||||||||||||
Institutional Class | (100,411,469 | ) | (116,016,594 | ) | 13,199,508 | 2,508,270 | ||||||||||||||||||
R Class | (21,676 | ) | 101,478 | (558,911 | ) | (129,512 | ) | |||||||||||||||||
K Class | (256,776 | ) | 376,308 | (1,510,299 | ) | (1,936,637 | ) | |||||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||
Investment Class | 2,387 | 18,252 | 1,028 | 3,349 | 2,284 | 9,399 | ||||||||||||||||||
Service Class | 9,262 | 27,203 | 7,417 | 10,454 | 10,514 | 33,408 | ||||||||||||||||||
Net increase (decrease) in net assets from capital | ||||||||||||||||||||||||
share transactions | (178,224,733 | ) | (475,516,567 | ) | (42,302,505 | ) | (39,711,114 | ) | (88,175,098 | ) | 154,403,073 | |||||||||||||
Net Increase (Decrease) In Net Assets | (321,714,054 | ) | (184,889,643 | ) | (75,873,621 | ) | 1,984,929 | (137,007,806 | ) | 255,701,001 | ||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 1,247,758,068 | 1,432,647,711 | 297,162,335 | 295,177,406 | 650,423,871 | 394,722,870 | ||||||||||||||||||
End of year | $ | 926,044,014 | $ | 1,247,758,068 | $ | 221,288,714 | $ | 297,162,335 | $ | 513,416,065 | $ | 650,423,871 | ||||||||||||
Undistributed Net Investment Income (Loss) at End | ||||||||||||||||||||||||
of Year | $ | – | $ | (1,324,204 | ) | $ | (9,879 | ) | $ | (10,102 | ) | $ | 2,098,387 | $ | 1,341,761 | |||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 83 |
Statements of Changes in Net Assets |
Royce Global Value Fund | Royce International Smaller- Companies Fund | Royce Special Equity Multi-Cap Fund | |||||||||||||||||||||||
Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | ||||||||||||||||||||
INVESTMENT OPERATIONS: | |||||||||||||||||||||||||
Net investment income (loss) | $ | 2,023,823 | $ | 2,504,441 | $ | 600,768 | $ | 358,526 | $ | 1,918,432 | $ | 1,342,234 | |||||||||||||
Net realized gain (loss) on investments and foreign currency | (18,859,829 | ) | (6,776,633 | ) | 271,690 | 2,832,920 | 17,012,232 | 12,335,278 | |||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | 6,433,800 | 18,965,587 | (4,257,707 | ) | 847,718 | 3,829,046 | 32,879,863 | ||||||||||||||||||
Net increase (decrease) in net assets from investment operations | (10,402,206 | ) | 14,693,395 | (3,385,249 | ) | 4,039,164 | 22,759,710 | 46,557,375 | |||||||||||||||||
DISTRIBUTIONS: | |||||||||||||||||||||||||
Net investment income | |||||||||||||||||||||||||
Investment Class | (2,001,782 | ) | (1,815,601 | ) | (18,814 | ) | (802,271 | ) | (479,420 | ) | |||||||||||||||
Service Class | (561,587 | ) | (410,885 | ) | (574,443 | ) | (426,886 | ) | (404,109 | ) | (469,302 | ) | |||||||||||||
Consultant Class | (264,812 | ) | (89,199 | ) | (44,315 | ) | |||||||||||||||||||
Institutional Class | (61,462 | ) | (566,069 | ) | (408,331 | ) | |||||||||||||||||||
R Class | (2,886 | ) | (1,123 | ) | |||||||||||||||||||||
K Class | (601 | ) | (603 | ) | |||||||||||||||||||||
Net realized gain on investments and foreign currency | |||||||||||||||||||||||||
Investment Class | – | – | (79,823 | ) | (4,729,740 | ) | (3,236,281 | ) | |||||||||||||||||
Service Class | – | – | (2,909,304 | ) | (1,677,475 | ) | �� | (3,852,466 | ) | (4,025,428 | ) | ||||||||||||||
Consultant Class | – | – | (504,045 | ) | |||||||||||||||||||||
Institutional Class | (260,563 | ) | (3,159,353 | ) | (2,507,671 | ) | |||||||||||||||||||
R Class | – | – | |||||||||||||||||||||||
K Class | – | – | |||||||||||||||||||||||
Total distributions | (2,831,668 | ) | (2,317,411 | ) | (3,904,409 | ) | (2,104,361 | ) | (14,062,368 | ) | (11,126,433 | ) | |||||||||||||
CAPITAL SHARE TRANSACTIONS: | |||||||||||||||||||||||||
Net capital share transactions | |||||||||||||||||||||||||
Investment Class | (104,088,063 | ) | (27,207,321 | ) | 1,265,297 | 59,033,956 | 16,706,332 | ||||||||||||||||||
Service Class | (16,686,150 | ) | (53,137,199 | ) | (1,737,936 | ) | 9,745,965 | 12,637,616 | 21,021,702 | ||||||||||||||||
Consultant Class | (3,254,422 | ) | 1,094,999 | 9,200,567 | |||||||||||||||||||||
Institutional Class | 2,778,811 | 25,321,547 | 6,547,957 | ||||||||||||||||||||||
R Class | 28,386 | 17,056 | |||||||||||||||||||||||
K Class | (19,399 | ) | 603 | ||||||||||||||||||||||
Shareholder redemption fees | |||||||||||||||||||||||||
Investment Class | 1,878 | 162,054 | 723 | 2,402 | 1,051 | ||||||||||||||||||||
Service Class | 3,732 | 14,010 | 5,977 | 7,479 | 10,760 | 5,239 | |||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | (124,014,038 | ) | (79,055,798 | ) | 2,312,872 | 9,753,444 | 106,206,848 | 44,282,281 | |||||||||||||||||
Net Increase (Decrease) In Net Assets | (137,247,912 | ) | (66,679,814 | ) | (4,976,786 | ) | 11,688,247 | 114,904,190 | 79,713,223 | ||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||
Beginning of year | 233,417,331 | 300,097,145 | 38,059,133 | 26,370,886 | 188,683,062 | 108,969,839 | |||||||||||||||||||
End of year | $ | 96,169,419 | $ | 233,417,331 | $ | 33,082,347 | $ | 38,059,133 | $ | 303,587,252 | $ | 188,683,062 | |||||||||||||
Undistributed Net Investment Income (Loss) at End of Year | $ | 58,999 | $ | 176,389 | $ | (32,823 | ) | $ | (19,501 | ) | $ | 104,459 | $ | 2,791 | |||||||||||
84 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Statements of Operations | Year Ended December 31, 2014 |
Royce Pennsylvania Mutual Fund | Royce Micro-Cap Fund | Royce Premier Fund | Royce Low-Priced Stock Fund | Royce Total Return Fund | |||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||
INCOME: | |||||||||||||||||||||
Dividends | |||||||||||||||||||||
Non-Affiliated Companies | $ | 80,697,918 | $ | 6,778,028 | $ | 53,655,695 | $ | 16,809,532 | $ | 103,665,848 | |||||||||||
Affiliated Companies | 1,923,347 | 208,410 | 32,297,761 | 1,061,451 | 3,278,676 | ||||||||||||||||
Foreign withholding tax | (1,280,737 | ) | (165,665 | ) | (2,875,416 | ) | (854,063 | ) | (1,607,902 | ) | |||||||||||
Interest | 169,686 | – | – | – | 32,500 | ||||||||||||||||
Securities lending | 1,911,901 | 400,122 | 9,917,872 | 1,015,339 | 326,739 | ||||||||||||||||
Total income | 83,422,115 | 7,220,895 | 92,995,912 | 18,032,259 | 105,695,861 | ||||||||||||||||
EXPENSES: | |||||||||||||||||||||
Investment advisory fees | 49,733,575 | 9,122,354 | 61,049,392 | 11,580,352 | 48,817,291 | ||||||||||||||||
Distribution fees | 8,821,224 | 1,167,963 | 1,436,558 | 2,058,557 | 5,288,387 | ||||||||||||||||
Shareholder servicing | 6,397,722 | 897,312 | 5,716,295 | 1,255,358 | 5,325,210 | ||||||||||||||||
Shareholder reports | 1,148,711 | 228,695 | 1,256,507 | 224,901 | 984,190 | ||||||||||||||||
Administrative and office facilities | 807,362 | 90,851 | 787,722 | 146,887 | 620,195 | ||||||||||||||||
Custody | 573,957 | 113,599 | 524,804 | 202,814 | 518,205 | ||||||||||||||||
Trustees’ fees | 312,369 | 34,360 | 304,291 | 51,180 | 239,437 | ||||||||||||||||
Registration | 117,950 | 44,434 | 108,521 | 61,545 | 133,562 | ||||||||||||||||
Audit | 93,257 | 43,394 | 91,712 | 39,723 | 98,347 | ||||||||||||||||
Legal | 68,508 | 7,016 | 60,414 | 11,703 | 47,380 | ||||||||||||||||
Other expenses | 190,304 | 24,375 | 189,371 | 47,254 | 148,448 | ||||||||||||||||
Total expenses | 68,264,939 | 11,774,353 | 71,525,587 | 15,680,274 | 62,220,652 | ||||||||||||||||
Compensating balance credits | (1,290 | ) | (352 | ) | (1,184 | ) | (280 | ) | (1,077 | ) | |||||||||||
Fees waived by distributor | – | – | – | (81,610 | ) | – | |||||||||||||||
Expenses reimbursed by investment adviser | – | (69,938 | ) | – | (423,523 | ) | – | ||||||||||||||
Net expenses | 68,263,649 | 11,704,063 | 71,524,403 | 15,174,861 | 62,219,575 | ||||||||||||||||
Net investment income (loss) | 15,158,466 | (4,483,168 | ) | 21,471,509 | 2,857,398 | 43,476,286 | |||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | |||||||||||||||||||||
NET REALIZED GAIN (LOSS): | |||||||||||||||||||||
Investments in Non-Affiliated Companies | 863,002,630 | 70,757,678 | 530,395,966 | 185,546,524 | 591,545,106 | ||||||||||||||||
Investments in Affiliated Companies | (12,079,904 | ) | (3,520,765 | ) | (21,006,198 | ) | (6,424,497 | ) | 8,029,453 | ||||||||||||
Foreign currency transactions | (40,695 | ) | (55,092 | ) | 95,027 | (233,669 | ) | (65,282 | ) | ||||||||||||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | |||||||||||||||||||||
Investments and foreign currency translations | (941,232,417 | ) | (98,355,468 | ) | (571,310,947 | ) | (201,994,537 | ) | (593,262,145 | ) | |||||||||||
Other assets and liabilities denominated in foreign currency | 185 | (24,001 | ) | (183,985 | ) | 3,371 | (13,716 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | (90,350,201 | ) | (31,197,648 | ) | (62,010,137 | ) | (23,102,808 | ) | 6,233,416 | ||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | (75,191,735 | ) | $ | (35,680,816 | ) | $ | (40,538,628 | ) | $ | (20,245,410 | ) | $ | 49,709,702 | |||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 85 |
Statements of Operations |
Royce Heritage Fund | Royce Opportunity Fund | Royce Special Equity Fund | Royce Value Fund | Royce Value Plus Fund | ||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||
INCOME: | ||||||||||||||||||||
Dividends | ||||||||||||||||||||
Non-Affiliated Companies | $ | 6,395,892 | $ | 18,389,192 | $ | 13,187,561 | $ | 15,358,733 | $ | 7,068,525 | ||||||||||
Affiliated Companies | – | 50,500 | 37,645,002 | – | – | |||||||||||||||
Foreign withholding tax | (218,873 | ) | (179,069 | ) | – | (153,302 | ) | (204,438 | ) | |||||||||||
Securities lending | 102,611 | 2,339,652 | 47,875 | 74,938 | 2,965,599 | |||||||||||||||
Total income | 6,279,630 | 20,600,275 | 50,880,438 | 15,280,369 | 9,829,686 | |||||||||||||||
EXPENSES: | �� | |||||||||||||||||||
Investment advisory fees | 3,626,249 | 24,483,790 | 31,513,578 | 10,195,490 | 10,730,642 | |||||||||||||||
Distribution fees | 679,138 | 848,565 | 1,371,372 | 1,936,667 | 1,961,661 | |||||||||||||||
Shareholder servicing | 242,979 | 1,809,083 | 2,399,493 | 1,144,455 | 1,583,139 | |||||||||||||||
Shareholder reports | 72,734 | 308,344 | 496,896 | 198,284 | 354,803 | |||||||||||||||
Administrative and office facilities | 41,971 | 295,500 | 394,094 | 126,845 | 135,957 | |||||||||||||||
Custody | 98,414 | 236,290 | 247,005 | 102,283 | 110,800 | |||||||||||||||
Trustees’ fees | 16,476 | 115,283 | 152,015 | 48,274 | 51,192 | |||||||||||||||
Registration | 53,544 | 93,046 | 84,577 | 73,222 | 73,018 | |||||||||||||||
Audit | 40,792 | 44,077 | 54,856 | 31,547 | 31,614 | |||||||||||||||
Legal | 3,186 | 24,617 | 30,125 | 9,775 | 10,511 | |||||||||||||||
Other expenses | 12,137 | 68,385 | 92,565 | 34,321 | 37,285 | |||||||||||||||
Total expenses | 4,887,620 | 28,326,980 | 36,836,576 | 13,901,163 | 15,080,622 | |||||||||||||||
Compensating balance credits | (224 | ) | (494 | ) | (768 | ) | (403 | ) | (295 | ) | ||||||||||
Fees waived by distributor | (59,007 | ) | – | – | – | (140,052 | ) | |||||||||||||
Expenses reimbursed by investment adviser | (19,730 | ) | – | (136,947 | ) | – | (25,858 | ) | ||||||||||||
Net expenses | 4,808,659 | 28,326,486 | 36,698,861 | 13,900,760 | 14,914,417 | |||||||||||||||
Net investment income (loss) | 1,470,971 | (7,726,211 | ) | 14,181,577 | 1,379,609 | (5,084,731 | ) | |||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | ||||||||||||||||||||
NET REALIZED GAIN (LOSS): | ||||||||||||||||||||
Investments in Non-Affiliated Companies | 16,841,565 | 275,173,693 | 175,403,964 | 127,638,693 | 185,739,662 | |||||||||||||||
Investments in Affiliated Companies | – | (4,414,614 | ) | 106,750,422 | – | (56,616 | ) | |||||||||||||
Foreign currency transactions | (39,563 | ) | (9,158 | ) | – | (426 | ) | (23,973 | ) | |||||||||||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | ||||||||||||||||||||
Investments and foreign currency translations | (21,802,458 | ) | (282,435,142 | ) | (285,557,513 | ) | (130,514,397 | ) | (144,649,021 | ) | ||||||||||
Other assets and liabilities denominated in foreign currency | 35,717 | (228 | ) | – | (2,593 | ) | (2,981 | ) | ||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | (4,964,739 | ) | (11,685,449 | ) | (3,403,127 | ) | (2,878,723 | ) | 41,007,071 | |||||||||||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | (3,493,768 | ) | $ | (19,411,660 | ) | $ | 10,778,450 | $ | (1,499,114 | ) | $ | 35,922,340 | |||||||
86 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Year Ended December 31, 2014 |
Royce International | Royce Special | |||||||||||||||||||
Royce Dividend | Royce Global Value | Smaller-Companies | Equity Multi-Cap | |||||||||||||||||
Royce 100 Fund | Value Fund | Fund | Fund | Fund | ||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||
INCOME: | ||||||||||||||||||||
Dividends | $ | 3,076,978 | $ | 14,796,215 | $ | 5,272,810 | $ | 1,528,390 | $ | 4,401,190 | ||||||||||
Foreign withholding tax | (38,266 | ) | (337,799 | ) | (379,044 | ) | (102,589 | ) | – | |||||||||||
Securities lending | 3,799 | 82,987 | 353,394 | – | – | |||||||||||||||
Total income | 3,042,511 | 14,541,403 | 5,247,160 | 1,425,801 | 4,401,190 | |||||||||||||||
EXPENSES: | ||||||||||||||||||||
Investment advisory fees | 2,686,076 | 5,977,690 | 2,422,039 | 614,951 | 1,964,886 | |||||||||||||||
Distribution fees | 502,711 | 912,936 | 354,881 | 114,949 | 272,194 | |||||||||||||||
Shareholder servicing | 369,704 | 674,111 | 213,741 | 80,080 | 158,455 | |||||||||||||||
Shareholder reports | 155,793 | 189,675 | 64,605 | 10,014 | 47,526 | |||||||||||||||
Administrative and office facilities | 33,185 | 72,214 | 24,237 | 5,542 | 23,147 | |||||||||||||||
Custody | 31,186 | 134,983 | 103,769 | 79,567 | 29,100 | |||||||||||||||
Trustees’ fees | 12,739 | 28,125 | 9,207 | 2,234 | 9,421 | |||||||||||||||
Registration | 47,576 | 70,077 | 68,438 | 58,729 | 73,298 | |||||||||||||||
Audit | 30,841 | 52,208 | 39,354 | 48,172 | 33,271 | |||||||||||||||
Legal | 2,551 | 5,482 | 1,898 | 1,501 | 8,476 | |||||||||||||||
Other expenses | 43,867 | 18,365 | 11,048 | 4,071 | 6,902 | |||||||||||||||
Total expenses | 3,916,229 | 8,135,866 | 3,313,217 | 1,019,810 | 2,626,676 | |||||||||||||||
Compensating balance credits | (112 | ) | (516 | ) | (73 | ) | (14 | ) | (22 | ) | ||||||||||
Fees waived by investment adviser and distributor | (38,989 | ) | (122,201 | ) | – | (84,408 | ) | (34,436 | ) | |||||||||||
Expenses reimbursed by investment adviser | (27,457 | ) | (39,994 | ) | (89,807 | ) | (110,355 | ) | (109,460 | ) | ||||||||||
Net expenses | 3,849,671 | 7,973,155 | 3,223,337 | 825,033 | 2,482,758 | |||||||||||||||
Net investment income (loss) | (807,160 | ) | 6,568,248 | 2,023,823 | 600,768 | 1,918,432 | ||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | ||||||||||||||||||||
NET REALIZED GAIN (LOSS): | ||||||||||||||||||||
Investments | 34,830,828 | 31,218,530 | (18,672,619 | ) | 429,710 | 17,012,232 | ||||||||||||||
Foreign currency transactions | 5,697 | (144,210 | ) | (187,210 | ) | (158,020 | ) | – | ||||||||||||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | ||||||||||||||||||||
Investments and foreign currency translations | (43,016,114 | ) | (51,287,450 | ) | 6,463,431 | (4,187,168 | ) | 3,829,046 | ||||||||||||
Other assets and liabilities denominated in foreign currency | (1,116 | ) | 32,362 | (29,631 | ) | (70,539 | ) | – | ||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | (8,180,705 | ) | (20,180,768 | ) | (12,426,029 | ) | (3,986,017 | ) | 20,841,278 | |||||||||||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | (8,987,865 | ) | $ | (13,612,520 | ) | $ | (10,402,206 | ) | $ | (3,385,249 | ) | $ | 22,759,710 | ||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 87 |
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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce Pennsylvania Mutual Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.73 | $ | 0.06 | $ | (0.21 | ) | $ | (0.15 | ) | $ | (0.04 | ) | $ | (1.54 | ) | $ | – | $ | (1.58 | ) | $ | – | $ | 13.00 | (0.70 | )% | $ | 3,869,579 | 0.91 | % | 0.91 | % | 0.91 | % | 0.35 | % | 21 | % | |||||||||||||||||||||
2013 | 11.50 | 0.03 | 3.99 | 4.02 | (0.00 | ) | (0.79 | ) | – | (0.79 | ) | – | 14.73 | 35.25 | 5,033,318 | 0.92 | 0.92 | 0.92 | 0.24 | 26 | ||||||||||||||||||||||||||||||||||||||||
2012 | 10.76 | 0.15 | 1.39 | 1.54 | (0.15 | ) | (0.65 | ) | – | (0.80 | ) | – | 11.50 | 14.58 | 4,232,988 | 0.89 | 0.89 | 0.89 | 1.19 | 22 | ||||||||||||||||||||||||||||||||||||||||
2011 | 11.65 | 0.01 | (0.50 | ) | (0.49 | ) | (0.02 | ) | (0.38 | ) | – | (0.40 | ) | – | 10.76 | (4.17 | ) | 4,266,754 | 0.90 | 0.90 | 0.90 | 0.11 | 20 | |||||||||||||||||||||||||||||||||||||
2010 | 9.45 | 0.06 | 2.19 | 2.25 | (0.05 | ) | – | – | (0.05 | ) | – | 11.65 | 23.86 | 4,735,403 | 0.90 | 0.90 | 0.90 | 0.63 | 25 | |||||||||||||||||||||||||||||||||||||||||
Royce Pennsylvania Mutual Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.69 | $ | 0.00 | $ | (0.19 | ) | $ | (0.19 | ) | $ | – | $ | (1.54 | ) | $ | – | $ | (1.54 | ) | $ | – | $ | 12.96 | (1.04 | )% | $ | 333,548 | 1.23 | % | 1.23 | % | 1.23 | % | 0.03 | % | 21 | % | ||||||||||||||||||||||
2013 | 11.51 | (0.01 | ) | 3.98 | 3.97 | – | (0.79 | ) | – | (0.79 | ) | – | 14.69 | 34.77 | 591,534 | 1.25 | 1.25 | 1.25 | (0.08 | ) | 26 | |||||||||||||||||||||||||||||||||||||||
2012 | 10.75 | 0.10 | 1.40 | 1.50 | (0.09 | ) | (0.65 | ) | – | (0.74 | ) | – | 11.51 | 14.15 | 473,624 | 1.24 | 1.24 | 1.24 | 0.90 | 22 | ||||||||||||||||||||||||||||||||||||||||
2011 | 11.65 | (0.02 | ) | (0.50 | ) | (0.52 | ) | – | (0.38 | ) | – | (0.38 | ) | – | 10.75 | (4.42 | ) | 406,052 | 1.19 | 1.19 | 1.19 | (0.18 | ) | 20 | ||||||||||||||||||||||||||||||||||||
2010 | 9.41 | 0.02 | 2.20 | 2.22 | – | – | – | – | 0.02 | 11.65 | 23.80 | 448,784 | 1.27 | 1.27 | 1.25 | 0.18 | 25 | |||||||||||||||||||||||||||||||||||||||||||
Royce Pennsylvania Mutual Fund–Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 12.96 | $ | (0.08 | ) | $ | (0.18 | ) | $ | (0.26 | ) | $ | – | $ | (1.54 | ) | $ | – | $ | (1.54 | ) | $ | – | $ | 11.16 | (1.72 | )% | $ | 676,347 | 1.91 | % | 1.91 | % | 1.91 | % | (0.64 | )% | 21 | % | |||||||||||||||||||||
2013 | 10.29 | (0.09 | ) | 3.55 | 3.46 | – | (0.79 | ) | – | (0.79 | ) | – | 12.96 | 33.94 | 788,017 | 1.94 | 1.94 | 1.94 | (0.78 | ) | 26 | |||||||||||||||||||||||||||||||||||||||
2012 | 9.69 | 0.01 | 1.25 | 1.26 | (0.01 | ) | (0.65 | ) | – | (0.66 | ) | – | 10.29 | 13.27 | 654,642 | 1.97 | 1.97 | 1.97 | 0.12 | 22 | ||||||||||||||||||||||||||||||||||||||||
2011 | 10.61 | (0.09 | ) | (0.45 | ) | (0.54 | ) | – | (0.38 | ) | – | (0.38 | ) | – | 9.69 | (5.05 | ) | 664,778 | 1.85 | 1.85 | 1.85 | (0.85 | ) | 20 | ||||||||||||||||||||||||||||||||||||
2010 | 8.65 | (0.03 | ) | 1.99 | 1.96 | – | – | – | – | – | 10.61 | 22.66 | 841,525 | 1.87 | 1.87 | 1.87 | (0.36 | ) | 25 | |||||||||||||||||||||||||||||||||||||||||
Royce Pennsylvania Mutual Fund–Institutional Classa | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.75 | $ | 0.07 | $ | (0.20 | ) | $ | (0.13 | ) | $ | (0.06 | ) | $ | (1.54 | ) | $ | – | $ | (1.60 | ) | $ | – | $ | 13.02 | (0.58 | )% | $ | 802,517 | 0.79 | % | 0.79 | % | 0.79 | % | 0.48 | % | 21 | % | |||||||||||||||||||||
2013 | 11.52 | 0.05 | 3.99 | 4.04 | (0.02 | ) | (0.79 | ) | – | (0.81 | ) | – | 14.75 | 35.34 | 818,212 | 0.79 | 0.79 | 0.79 | 0.40 | 26 | ||||||||||||||||||||||||||||||||||||||||
2012 | 10.79 | 0.13 | 1.43 | 1.56 | (0.18 | ) | (0.65 | ) | – | (0.83 | ) | – | 11.52 | 14.72 | 488,052 | 0.80 | 0.80 | 0.80 | 1.53 | 22 | ||||||||||||||||||||||||||||||||||||||||
2011 | 12.19 | 0.03 | (1.05 | ) | (1.02 | ) | – | (0.38 | ) | – | (0.38 | ) | – | 10.79 | (8.33 | )1 | 241,951 | 0.78 | 2 | 0.78 | 2 | 0.782 | 0.46 | 2 | 20 | |||||||||||||||||||||||||||||||||||
Royce Pennsylvania Mutual Fund–R Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.26 | $ | (0.03 | ) | $ | (0.19 | ) | $ | (0.22 | ) | $ | – | $ | (1.54 | ) | $ | – | $ | (1.54 | ) | $ | – | $ | 12.50 | (1.28 | )% | $ | 36,622 | 1.48 | % | 1.48 | % | 1.48 | % | (0.21 | )% | 21 | % | |||||||||||||||||||||
2013 | 11.22 | (0.05 | ) | 3.88 | 3.83 | – | (0.79 | ) | – | (0.79 | ) | – | 14.26 | 34.42 | 44,094 | 1.56 | 1.56 | 1.56 | (0.39 | ) | 26 | |||||||||||||||||||||||||||||||||||||||
2012 | 10.50 | 0.07 | 1.35 | 1.42 | (0.05 | ) | (0.65 | ) | – | (0.70 | ) | – | 11.22 | 13.79 | 32,977 | 1.50 | 1.50 | 1.50 | 0.70 | 22 | ||||||||||||||||||||||||||||||||||||||||
2011 | 11.43 | (0.05 | ) | (0.50 | ) | (0.55 | ) | – | (0.38 | ) | – | (0.38 | ) | – | 10.50 | (4.77 | ) | 22,542 | 1.51 | 1.51 | 1.51 | (0.47 | ) | 20 | ||||||||||||||||||||||||||||||||||||
2010 | 9.28 | 0.01 | 2.14 | 2.15 | (0.00 | ) | – | – | (0.00 | ) | – | 11.43 | 23.21 | 17,868 | 1.51 | 1.51 | 1.51 | 0.06 | 25 | |||||||||||||||||||||||||||||||||||||||||
Royce Pennsylvania Mutual Fund–K Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.04 | $ | (0.02 | ) | $ | (0.18 | ) | $ | (0.20 | ) | $ | – | $ | (1.54 | ) | $ | – | $ | (1.54 | ) | $ | – | $ | 11.30 | (1.24 | )% | $ | 10,707 | 1.42 | % | 1.42 | % | 1.42 | % | (0.15 | )% | 21 | % | |||||||||||||||||||||
2013 | 10.29 | (0.02 | ) | 3.56 | 3.54 | – | (0.79 | ) | – | (0.79 | ) | – | 13.04 | 34.72 | 11,685 | 1.37 | 1.37 | 1.37 | (0.19 | ) | 26 | |||||||||||||||||||||||||||||||||||||||
2012 | 9.68 | 0.09 | 1.24 | 1.33 | (0.07 | ) | (0.65 | ) | – | (0.72 | ) | – | 10.29 | 14.04 | 8,849 | 1.26 | 1.26 | 1.26 | 0.94 | 22 | ||||||||||||||||||||||||||||||||||||||||
2011 | 10.57 | (0.05 | ) | (0.46 | ) | (0.51 | ) | – | (0.38 | ) | – | (0.38 | ) | – | 9.68 | (4.78 | ) | 5,800 | 1.55 | 1.55 | 1.55 | (0.49 | ) | 20 | ||||||||||||||||||||||||||||||||||||
2010 | 8.59 | 0.00 | 1.98 | 1.98 | (0.00 | ) | – | – | (0.00 | ) | – | 10.57 | 23.11 | 3,760 | 1.61 | 1.61 | 1.59 | 0.01 | 25 | |||||||||||||||||||||||||||||||||||||||||
88 | The Royce Funds 2014 Annual 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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce Micro–Cap Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 16.68 | $ | (0.08 | ) | $ | (0.65 | ) | $ | (0.73 | ) | $ | – | $ | (1.48 | ) | $ | – | $ | (1.48 | ) | $ | – | $ | 14.47 | (4.13 | )% | $ | 414,120 | 1.52 | % | 1.52 | % | 1.52 | % | (0.49 | )% | 18 | % | |||||||||||||||||||||
2013 | 14.78 | (0.08 | ) | 3.19 | 3.11 | (0.02 | ) | (1.19 | ) | – | (1.21 | ) | – | 16.68 | 21.29 | 650,773 | 1.53 | 1.53 | 1.53 | (0.52 | ) | 22 | ||||||||||||||||||||||||||||||||||||||
2012 | 14.55 | 0.05 | 1.07 | 1.12 | (0.01 | ) | (0.88 | ) | – | (0.89 | ) | – | 14.78 | 7.93 | 740,364 | 1.47 | 1.47 | 1.47 | 0.29 | 15 | ||||||||||||||||||||||||||||||||||||||||
2011 | 17.57 | (0.07 | ) | (2.05 | ) | (2.12 | ) | (0.20 | ) | (0.70 | ) | – | (0.90 | ) | – | 14.55 | (12.04 | ) | 904,168 | 1.50 | 1.50 | 1.50 | (0.50 | ) | 35 | |||||||||||||||||||||||||||||||||||
2010 | 13.71 | (0.03 | ) | 4.14 | 4.11 | (0.25 | ) | – | – | (0.25 | ) | – | 17.57 | 30.06 | 1,085,782 | 1.50 | 1.50 | 1.50 | (0.27 | ) | 36 | |||||||||||||||||||||||||||||||||||||||
Royce Micro–Cap Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 16.48 | $ | (0.10 | ) | $ | (0.65 | ) | $ | (0.75 | ) | $ | – | $ | (1.48 | ) | $ | – | $ | (1.48 | ) | $ | 0.01 | $ | 14.26 | (4.24 | )% | $ | 38,645 | 1.77 | % | 1.77 | % | 1.66 | % | (0.63 | )% | 18 | % | |||||||||||||||||||||
2013 | 14.61 | (0.10 | ) | 3.16 | 3.06 | – | (1.19 | ) | – | (1.19 | ) | – | 16.48 | 21.20 | 79,890 | 1.74 | 1.74 | 1.66 | (0.66 | ) | 22 | |||||||||||||||||||||||||||||||||||||||
2012 | 14.41 | 0.02 | 1.06 | 1.08 | – | (0.88 | ) | – | (0.88 | ) | – | 14.61 | 7.76 | 109,457 | 1.74 | 1.74 | 1.66 | 0.14 | 15 | |||||||||||||||||||||||||||||||||||||||||
2011 | 17.43 | (0.10 | ) | (2.04 | ) | (2.14 | ) | (0.18 | ) | (0.70 | ) | – | (0.88 | ) | – | 14.41 | (12.23 | ) | 122,479 | 1.76 | 1.76 | 1.66 | (0.65 | ) | 35 | |||||||||||||||||||||||||||||||||||
2010 | 13.61 | (0.08 | ) | 4.14 | 4.06 | (0.24 | ) | – | – | (0.24 | ) | – | 17.43 | 29.85 | 139,911 | 1.78 | 1.78 | 1.66 | (0.41 | ) | 36 | |||||||||||||||||||||||||||||||||||||||
Royce Micro–Cap Fund–Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.48 | $ | (0.20 | ) | $ | (0.57 | ) | $ | (0.77 | ) | $ | – | $ | (1.48 | ) | $ | – | $ | (1.48 | ) | $ | – | $ | 12.23 | (5.03 | )% | $ | 75,868 | 2.48 | % | 2.48 | % | 2.48 | % | (1.45 | )% | 18 | % | |||||||||||||||||||||
2013 | 13.08 | (0.21 | ) | 2.80 | 2.59 | – | (1.19 | ) | – | (1.19 | ) | – | 14.48 | 20.08 | 117,538 | 2.52 | 2.52 | 2.52 | (1.51 | ) | 22 | |||||||||||||||||||||||||||||||||||||||
2012 | 13.11 | (0.10 | ) | 0.95 | 0.85 | – | (0.88 | ) | – | (0.88 | ) | – | 13.08 | 6.77 | 120,871 | 2.55 | 2.55 | 2.55 | (0.77 | ) | 15 | |||||||||||||||||||||||||||||||||||||||
2011 | 15.91 | (0.21 | ) | (1.84 | ) | (2.05 | ) | (0.05 | ) | (0.70 | ) | – | (0.75 | ) | – | 13.11 | (12.86 | ) | 134,752 | 2.42 | 2.42 | 2.42 | (1.41 | ) | 35 | |||||||||||||||||||||||||||||||||||
2010 | 12.45 | (0.15 | ) | 3.74 | 3.59 | (0.13 | ) | – | – | (0.13 | ) | – | 15.91 | 28.85 | 181,746 | 2.43 | 2.43 | 2.43 | (1.20 | ) | 36 | |||||||||||||||||||||||||||||||||||||||
Royce Premier Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 22.11 | $ | 0.08 | $ | (0.32 | ) | $ | (0.24 | ) | $ | (0.08 | ) | $ | (2.07 | ) | $ | – | $ | (2.15 | ) | $ | – | $ | 19.72 | (0.86 | )% | $ | 4,097,961 | 1.10 | % | 1.10 | % | 1.10 | % | 0.34 | % | 9 | % | |||||||||||||||||||||
2013 | 19.16 | 0.00 | 5.22 | 5.22 | – | (2.27 | ) | – | (2.27 | ) | – | 22.11 | 27.73 | 5,096,793 | 1.09 | 1.09 | 1.09 | 0.02 | 11 | |||||||||||||||||||||||||||||||||||||||||
2012 | 18.52 | 0.24 | 1.85 | 2.09 | (0.24 | ) | (1.21 | ) | – | (1.45 | ) | – | 19.16 | 11.45 | 4,629,272 | 1.06 | 1.06 | 1.06 | 1.19 | 7 | ||||||||||||||||||||||||||||||||||||||||
2011 | 20.35 | (0.02 | ) | (0.17 | ) | (0.19 | ) | (0.05 | ) | (1.59 | ) | – | (1.64 | ) | – | 18.52 | (0.86 | ) | 4,539,127 | 1.09 | 1.09 | 1.09 | (0.11 | ) | 18 | |||||||||||||||||||||||||||||||||||
2010 | 16.31 | (0.01 | ) | 4.32 | 4.31 | – | (0.27 | ) | – | (0.27 | ) | – | 20.35 | 26.46 | 4,961,891 | 1.12 | 1.12 | 1.12 | (0.07 | ) | 10 | |||||||||||||||||||||||||||||||||||||||
Royce Premier Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 21.70 | $ | 0.01 | $ | (0.31 | ) | $ | (0.30 | ) | $ | – | $ | (2.07 | ) | $ | – | $ | (2.07 | ) | $ | – | $ | 19.33 | (1.16 | )% | $ | 172,810 | 1.38 | % | 1.38 | % | 1.38 | % | 0.05 | % | 9 | % | ||||||||||||||||||||||
2013 | 18.89 | (0.07 | ) | 5.15 | 5.08 | – | (2.27 | ) | – | (2.27 | ) | – | 21.70 | 27.39 | 318,860 | 1.38 | 1.38 | 1.38 | (0.33 | ) | 11 | |||||||||||||||||||||||||||||||||||||||
2012 | 18.23 | 0.19 | 1.81 | 2.00 | (0.13 | ) | (1.21 | ) | – | (1.34 | ) | – | 18.89 | 11.14 | 560,553 | 1.33 | 1.33 | 1.32 | 0.92 | 7 | ||||||||||||||||||||||||||||||||||||||||
2011 | 20.07 | (0.07 | ) | (0.16 | ) | (0.23 | ) | (0.02 | ) | (1.59 | ) | – | (1.61 | ) | – | 18.23 | (1.07 | ) | 628,824 | 1.34 | 1.34 | 1.32 | (0.33 | ) | 18 | |||||||||||||||||||||||||||||||||||
2010 | 16.12 | (0.05 | ) | 4.27 | 4.22 | – | (0.27 | ) | – | (0.27 | ) | – | 20.07 | 26.22 | 584,817 | 1.39 | 1.39 | 1.37 | (0.30 | ) | 10 | |||||||||||||||||||||||||||||||||||||||
Royce Premier Fund–Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 19.58 | $ | (0.13 | ) | $ | (0.29 | ) | $ | (0.42 | ) | $ | – | $ | (2.07 | ) | $ | – | $ | (2.07 | ) | $ | – | $ | 17.09 | (1.92 | )% | $ | 56,884 | 2.10 | % | 2.10 | % | 2.10 | % | (0.66 | )% | 9 | % | |||||||||||||||||||||
2013 | 17.35 | (0.20 | ) | 4.70 | 4.50 | – | (2.27 | ) | – | (2.27 | ) | – | 19.58 | 26.47 | 66,712 | 2.13 | 2.13 | 2.13 | (1.02 | ) | 11 | |||||||||||||||||||||||||||||||||||||||
2012 | 16.87 | 0.02 | 1.69 | 1.71 | (0.02 | ) | (1.21 | ) | – | (1.23 | ) | – | 17.35 | 10.24 | 60,568 | 2.12 | 2.12 | 2.12 | 0.13 | 7 | ||||||||||||||||||||||||||||||||||||||||
2011 | 18.81 | (0.21 | ) | (0.14 | ) | (0.35 | ) | – | (1.59 | ) | – | (1.59 | ) | – | 16.87 | (1.80 | ) | 59,766 | 2.05 | 2.05 | 2.05 | (1.07 | ) | 18 | ||||||||||||||||||||||||||||||||||||
2010 | 15.24 | (0.17 | ) | 4.01 | 3.84 | – | (0.27 | ) | – | (0.27 | ) | – | 18.81 | 25.24 | 71,686 | 2.08 | 2.08 | 2.08 | (1.04 | ) | 10 | |||||||||||||||||||||||||||||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 89 |
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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce Premier Fund–Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 22.31 | $ | 0.12 | $ | (0.34 | ) | $ | (0.22 | ) | $ | (0.11 | ) | $ | (2.07 | ) | $ | – | $ | (2.18 | ) | $ | – | $ | 19.91 | (0.79 | )% | $ | 594,463 | 0.98 | % | 0.98 | % | 0.98 | % | 0.45 | % | 9 | % | |||||||||||||||||||||
2013 | 19.30 | 0.03 | 5.25 | 5.28 | – | (2.27 | ) | – | (2.27 | ) | – | 22.31 | 27.85 | 989,100 | 0.98 | 0.98 | 0.98 | 0.13 | 11 | |||||||||||||||||||||||||||||||||||||||||
2012 | 18.66 | 0.26 | 1.87 | 2.13 | (0.28 | ) | (1.21 | ) | – | (1.49 | ) | – | 19.30 | 11.57 | 866,277 | 0.98 | 0.98 | 0.98 | 1.30 | 7 | ||||||||||||||||||||||||||||||||||||||||
2011 | 20.49 | 0.00 | (0.16 | ) | (0.16 | ) | (0.08 | ) | (1.59 | ) | – | (1.67 | ) | – | 18.66 | (0.73 | ) | 813,837 | 0.97 | 0.97 | 0.97 | 0.02 | 18 | |||||||||||||||||||||||||||||||||||||
2010 | 16.40 | 0.01 | 4.35 | 4.36 | – | (0.27 | ) | – | (0.27 | ) | – | 20.49 | 26.62 | 706,870 | 0.99 | 0.99 | 0.99 | 0.07 | 10 | |||||||||||||||||||||||||||||||||||||||||
Royce Premier Fund–W Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 22.16 | $ | 0.09 | $ | (0.33 | ) | $ | (0.24 | ) | $ | (0.09 | ) | $ | (2.07 | ) | $ | – | $ | (2.16 | ) | $ | – | $ | 19.76 | (0.89 | )% | $ | 446,380 | 1.07 | % | 1.07 | % | 1.07 | % | 0.36 | % | 9 | % | |||||||||||||||||||||
2013 | 19.20 | 0.00 | 5.23 | 5.23 | – | (2.27 | ) | – | (2.27 | ) | – | 22.16 | 27.73 | 552,732 | 1.09 | 1.09 | 1.09 | 0.01 | 11 | |||||||||||||||||||||||||||||||||||||||||
2012 | 18.57 | 0.25 | 1.85 | 2.10 | (0.26 | ) | (1.21 | ) | – | (1.47 | ) | – | 19.20 | 11.46 | 533,763 | 1.05 | 1.05 | 1.05 | 1.19 | 7 | ||||||||||||||||||||||||||||||||||||||||
2011 | 20.40 | (0.01 | ) | (0.15 | ) | (0.16 | ) | (0.08 | ) | (1.59 | ) | – | (1.67 | ) | – | 18.57 | (0.75 | ) | 549,648 | 1.00 | 1.00 | 1.00 | (0.01 | ) | 18 | |||||||||||||||||||||||||||||||||||
2010 | 16.33 | 0.01 | 4.33 | 4.34 | – | (0.27 | ) | – | (0.27 | ) | – | 20.40 | 26.61 | 425,397 | 1.02 | 1.02 | 1.02 | 0.04 | 10 | |||||||||||||||||||||||||||||||||||||||||
Royce Premier Fund–R Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 21.25 | $ | (0.06 | ) | $ | (0.30 | ) | $ | (0.36 | ) | $ | – | $ | (2.07 | ) | $ | – | $ | (2.07 | ) | $ | – | $ | 18.82 | (1.48 | )% | $ | 27,355 | 1.71 | % | 1.71 | % | 1.71 | % | (0.28 | )% | 9 | % | |||||||||||||||||||||
2013 | 18.61 | (0.13 | ) | 5.04 | 4.91 | – | (2.27 | ) | – | (2.27 | ) | – | 21.25 | 26.88 | 32,577 | 1.74 | 1.74 | 1.74 | (0.63 | ) | 11 | |||||||||||||||||||||||||||||||||||||||
2012 | 17.99 | 0.11 | 1.80 | 1.91 | (0.08 | ) | (1.21 | ) | – | (1.29 | ) | – | 18.61 | 10.75 | 28,632 | 1.68 | 1.68 | 1.68 | 0.57 | 7 | ||||||||||||||||||||||||||||||||||||||||
2011 | 19.91 | (0.14 | ) | (0.15 | ) | (0.29 | ) | (0.04 | ) | (1.59 | ) | – | (1.63 | ) | – | 17.99 | (1.38 | ) | 23,653 | 1.66 | 1.66 | 1.66 | (0.63 | ) | 18 | |||||||||||||||||||||||||||||||||||
2010 | 16.07 | (0.11 | ) | 4.22 | 4.11 | – | (0.27 | ) | – | (0.27 | ) | – | 19.91 | 25.61 | 10,185 | 1.78 | 1.78 | 1.78 | (0.64 | ) | 10 | |||||||||||||||||||||||||||||||||||||||
Royce Premier Fund–K Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 8.04 | $ | (0.01 | ) | $ | (0.15 | ) | $ | (0.16 | ) | $ | (0.05 | ) | $ | (2.07 | ) | $ | – | $ | (2.12 | ) | $ | – | $ | 5.76 | (1.50 | )% | $ | 6,306 | 1.69 | % | 1.69 | % | 1.69 | % | (0.25 | )% | 9 | % | ||||||||||||||||||||
2013 | 8.19 | (0.04 | ) | 2.16 | 2.12 | – | (2.27 | ) | – | (2.27 | ) | – | 8.04 | 27.01 | 8,640 | 1.59 | 1.59 | 1.59 | (0.50 | ) | 11 | |||||||||||||||||||||||||||||||||||||||
2012 | 8.67 | 0.08 | 0.85 | 0.93 | (0.20 | ) | (1.21 | ) | – | (1.41 | ) | – | 8.19 | 11.00 | 9,707 | 1.47 | 1.47 | 1.47 | 0.79 | 7 | ||||||||||||||||||||||||||||||||||||||||
2011 | 10.46 | (0.05 | ) | (0.09 | ) | (0.14 | ) | (0.06 | ) | (1.59 | ) | – | (1.65 | ) | – | 8.67 | (1.20 | ) | 8,776 | 1.49 | 1.49 | 1.49 | (0.46 | ) | 18 | |||||||||||||||||||||||||||||||||||
2010 | 8.53 | (0.04 | ) | 2.24 | 2.20 | – | (0.27 | ) | – | (0.27 | ) | – | 10.46 | 25.86 | 3,845 | 1.63 | 1.63 | 1.59 | (0.47 | ) | 10 | |||||||||||||||||||||||||||||||||||||||
Royce Low-Priced Stock Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.60 | $ | 0.06 | $ | (0.58 | ) | $ | (0.52 | ) | $ | (0.01 | ) | $ | (3.61 | ) | $ | – | $ | (3.62 | ) | $ | – | $ | 9.46 | (3.15 | )% | $ | 50,371 | 1.25 | % | 1.25 | % | 1.24 | % | 0.46 | % | 29 | % | |||||||||||||||||||||
2013 | 13.83 | 0.05 | 1.71 | 1.76 | (0.05 | ) | (1.94 | ) | – | (1.99 | ) | – | 13.60 | 13.17 | 88,568 | 1.37 | 1.37 | 1.24 | 0.18 | 16 | ||||||||||||||||||||||||||||||||||||||||
2012 | 14.34 | 0.15 | 0.50 | 0.65 | (0.25 | ) | (0.91 | ) | – | (1.16 | ) | – | 13.83 | 4.79 | 255,335 | 1.26 | 1.26 | 1.24 | 0.86 | 8 | ||||||||||||||||||||||||||||||||||||||||
2011 | 18.31 | (0.06 | ) | (2.57 | ) | (2.63 | ) | (0.14 | ) | (1.20 | ) | – | (1.34 | ) | – | 14.34 | (14.37 | ) | 276,247 | 1.26 | 1.26 | 1.24 | (0.15 | ) | 22 | |||||||||||||||||||||||||||||||||||
2010 | 14.08 | (0.03 | ) | 4.50 | 4.47 | (0.10 | ) | (0.14 | ) | – | (0.24 | ) | – | 18.31 | 31.77 | 148,144 | 1.26 | 1.26 | 1.24 | (0.10 | ) | 24 | ||||||||||||||||||||||||||||||||||||||
Royce Low-Priced Stock Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.62 | $ | 0.03 | $ | (0.58 | ) | $ | (0.55 | ) | $ | – | $ | (3.61 | ) | $ | – | $ | (3.61 | ) | $ | – | $ | 9.46 | (3.37 | )% | $ | 520,905 | 1.55 | % | 1.55 | % | 1.49 | % | 0.21 | % | 29 | % | ||||||||||||||||||||||
2013 | 13.84 | (0.00 | ) | 1.72 | 1.72 | (0.00 | ) | (1.94 | ) | – | (1.94 | ) | – | 13.62 | 12.91 | 1,008,207 | 1.65 | 1.65 | 1.49 | (0.02 | ) | 16 | ||||||||||||||||||||||||||||||||||||||
2012 | 14.31 | 0.11 | 0.49 | 0.60 | (0.16 | ) | (0.91 | ) | – | (1.07 | ) | – | 13.84 | 4.48 | 1,800,089 | 1.57 | 1.57 | 1.49 | 0.54 | 8 | ||||||||||||||||||||||||||||||||||||||||
2011 | 18.26 | (0.06 | ) | (2.60 | ) | (2.66 | ) | (0.09 | ) | (1.20 | ) | – | (1.29 | ) | – | 14.31 | (14.58 | ) | 2,489,189 | 1.56 | 1.56 | 1.49 | (0.39 | ) | 22 | |||||||||||||||||||||||||||||||||||
2010 | 14.05 | (0.05 | ) | 4.47 | 4.42 | (0.07 | ) | (0.14 | ) | – | (0.21 | ) | – | 18.26 | 31.49 | 3,456,142 | 1.60 | 1.60 | 1.49 | (0.37 | ) | 24 | ||||||||||||||||||||||||||||||||||||||
90 | The Royce Funds 2014 Annual 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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce Low-Priced Stock Fund–Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.61 | $ | 0.08 | $ | (0.58 | ) | $ | (0.50 | ) | $ | (0.04 | ) | $ | (3.61 | ) | $ | – | $ | (3.65 | ) | $ | – | $ | 9.46 | (3.01 | )% | $ | 101,473 | 1.16 | % | 1.16 | % | 1.16 | % | 0.47 | % | 29 | % | |||||||||||||||||||||
2013 | 13.84 | 0.05 | 1.71 | 1.76 | (0.05 | ) | (1.94 | ) | – | (1.99 | ) | – | 13.61 | 13.20 | 345,983 | 1.22 | 1.22 | 1.22 | 0.26 | 16 | ||||||||||||||||||||||||||||||||||||||||
2012 | 14.36 | 0.16 | 0.49 | 0.65 | (0.26 | ) | (0.91 | ) | – | (1.17 | ) | – | 13.84 | 4.81 | 969,664 | 1.20 | 1.20 | 1.20 | 0.92 | 8 | ||||||||||||||||||||||||||||||||||||||||
2011 | 18.33 | (0.01 | ) | (2.61 | ) | (2.62 | ) | (0.15 | ) | (1.20 | ) | – | (1.35 | ) | – | 14.36 | (14.35 | ) | 991,706 | 1.17 | 1.17 | 1.17 | (0.07 | ) | 22 | |||||||||||||||||||||||||||||||||||
2010 | 14.09 | (0.02 | ) | 4.50 | 4.48 | (0.10 | ) | (0.14 | ) | – | (0.24 | ) | – | 18.33 | 31.82 | 1,077,659 | 1.18 | 1.18 | 1.18 | (0.04 | ) | 24 | ||||||||||||||||||||||||||||||||||||||
Royce Low-Priced Stock Fund–R Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.27 | $ | (0.02 | ) | $ | (0.56 | ) | $ | (0.58 | ) | $ | – | $ | (3.61 | ) | $ | – | $ | (3.61 | ) | $ | – | $ | 9.08 | (3.72 | )% | $ | 1,892 | 2.21 | % | 2.21 | % | 1.84 | % | (0.15 | )% | 29 | % | |||||||||||||||||||||
2013 | 13.58 | (0.05 | ) | 1.68 | 1.63 | – | (1.94 | ) | – | (1.94 | ) | – | 13.27 | 12.44 | 3,130 | 2.21 | 2.21 | 1.84 | (0.37 | ) | 16 | |||||||||||||||||||||||||||||||||||||||
2012 | 14.05 | 0.04 | 0.50 | 0.54 | (0.10 | ) | (0.91 | ) | – | (1.01 | ) | – | 13.58 | 4.10 | 5,823 | 2.05 | 2.05 | 1.84 | 0.22 | 8 | ||||||||||||||||||||||||||||||||||||||||
2011 | 18.05 | (0.19 | ) | (2.49 | ) | (2.68 | ) | (0.12 | ) | (1.20 | ) | – | (1.32 | ) | – | 14.05 | (14.86 | ) | 7,337 | 1.95 | 1.95 | 1.84 | (0.72 | ) | 22 | |||||||||||||||||||||||||||||||||||
2010 | 13.95 | (0.12 | ) | 4.44 | 4.32 | (0.08 | ) | (0.14 | ) | – | (0.22 | ) | – | 18.05 | 31.00 | 2,925 | 2.21 | 2.21 | 1.84 | (0.67 | ) | 24 | ||||||||||||||||||||||||||||||||||||||
Royce Low-Priced Stock Fund–K Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 6.89 | $ | 0.01 | $ | (0.34 | ) | $ | (0.33 | ) | $ | – | $ | (3.61 | ) | $ | – | $ | (3.61 | ) | $ | – | $ | 2.95 | (3.55 | )% | $ | 2,011 | 2.33 | % | 2.33 | % | 1.59 | % | 0.11 | % | 29 | % | ||||||||||||||||||||||
2013 | 7.90 | (0.00 | ) | 0.94 | 0.94 | (0.01 | ) | (1.94 | ) | – | (1.95 | ) | – | 6.89 | 12.74 | 3,841 | 1.92 | 1.92 | 1.59 | (0.12 | ) | 16 | ||||||||||||||||||||||||||||||||||||||
2012 | 8.65 | 0.07 | 0.27 | 0.34 | (0.18 | ) | (0.91 | ) | – | (1.09 | ) | – | 7.90 | 4.42 | 6,253 | 1.71 | 1.71 | 1.59 | 0.40 | 8 | ||||||||||||||||||||||||||||||||||||||||
2011 | 11.70 | (0.08 | ) | (1.63 | ) | (1.71 | ) | (0.14 | ) | (1.20 | ) | – | (1.34 | ) | – | 8.65 | (14.71 | ) | 8,719 | 1.68 | 1.68 | 1.59 | (0.48 | ) | 22 | |||||||||||||||||||||||||||||||||||
2010 | 9.09 | (0.08 | ) | 2.93 | 2.85 | (0.10 | ) | (0.14 | ) | – | (0.24 | ) | – | 11.70 | 31.44 | 4,782 | 1.78 | 1.78 | 1.59 | (0.40 | ) | 24 | ||||||||||||||||||||||||||||||||||||||
Royce Total Return Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 16.47 | $ | 0.17 | $ | 0.00 | $ | 0.17 | $ | (0.28 | ) | $ | (1.62 | ) | $ | – | $ | (1.90 | ) | $ | – | $ | 14.74 | 1.34 | % | $ | 3,077,951 | 1.13 | % | 1.13 | % | 1.13 | % | 0.95 | % | 18 | % | |||||||||||||||||||||||
2013 | 13.63 | 0.16 | 4.24 | 4.40 | (0.14 | ) | (1.42 | ) | – | (1.56 | ) | – | 16.47 | 32.76 | 3,657,904 | 1.13 | 1.13 | 1.13 | 1.00 | 21 | ||||||||||||||||||||||||||||||||||||||||
2012 | 12.68 | 0.26 | 1.54 | 1.80 | (0.23 | ) | (0.62 | ) | – | (0.85 | ) | – | 13.63 | 14.42 | 3,044,664 | 1.10 | 1.10 | 1.10 | 1.89 | 17 | ||||||||||||||||||||||||||||||||||||||||
2011 | 13.17 | 0.15 | (0.37 | ) | (0.22 | ) | (0.12 | ) | (0.15 | ) | – | (0.27 | ) | – | 12.68 | (1.68 | ) | 3,106,208 | 1.12 | 1.12 | 1.12 | 1.10 | 21 | |||||||||||||||||||||||||||||||||||||
2010 | 10.81 | 0.19 | 2.32 | 2.51 | (0.15 | ) | – | – | (0.15 | ) | – | 13.17 | 23.47 | 3,562,002 | 1.14 | 1.14 | 1.14 | 1.64 | 15 | |||||||||||||||||||||||||||||||||||||||||
Royce Total Return Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 16.61 | $ | 0.12 | $ | 0.01 | $ | 0.13 | $ | (0.14 | ) | $ | (1.62 | ) | $ | – | $ | (1.76 | ) | $ | – | $ | 14.98 | 1.08 | % | $ | 232,814 | 1.42 | % | 1.42 | % | 1.42 | % | 0.60 | % | 18 | % | |||||||||||||||||||||||
2013 | 13.72 | 0.11 | 4.27 | 4.38 | (0.07 | ) | (1.42 | ) | – | (1.49 | ) | – | 16.61 | 32.38 | 493,111 | 1.48 | 1.48 | 1.48 | 0.68 | 21 | ||||||||||||||||||||||||||||||||||||||||
2012 | 12.71 | 0.22 | 1.55 | 1.77 | (0.14 | ) | (0.62 | ) | – | (0.76 | ) | – | 13.72 | 14.11 | 264,528 | 1.39 | 1.39 | 1.39 | 1.58 | 17 | ||||||||||||||||||||||||||||||||||||||||
2011 | 13.19 | 0.11 | (0.38 | ) | (0.27 | ) | (0.06 | ) | (0.15 | ) | – | (0.21 | ) | – | 12.71 | (2.01 | ) | 282,704 | 1.41 | 1.41 | 1.41 | 0.82 | 21 | |||||||||||||||||||||||||||||||||||||
2010 | 10.81 | 0.16 | 2.32 | 2.48 | (0.10 | ) | – | – | (0.10 | ) | – | 13.19 | 23.11 | 295,656 | 1.42 | 1.42 | 1.42 | 1.39 | 15 | |||||||||||||||||||||||||||||||||||||||||
Royce Total Return Fund–Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 16.68 | $ | (0.00 | ) | $ | 0.02 | $ | 0.02 | $ | (0.03 | ) | $ | (1.62 | ) | $ | – | $ | (1.65 | ) | $ | – | $ | 15.05 | 0.37 | % | $ | 356,731 | 2.12 | % | 2.12 | % | 2.12 | % | (0.04 | )% | 18 | % | ||||||||||||||||||||||
2013 | 13.81 | (0.00 | ) | 4.29 | 4.29 | – | (1.42 | ) | – | (1.42 | ) | – | 16.68 | 31.38 | 404,498 | 2.15 | 2.15 | 2.15 | (0.02 | ) | 21 | |||||||||||||||||||||||||||||||||||||||
2012 | 12.77 | 0.11 | 1.56 | 1.67 | (0.01 | ) | (0.62 | ) | – | (0.63 | ) | – | 13.81 | 13.19 | 331,116 | 2.20 | 2.20 | 2.20 | 0.80 | 17 | ||||||||||||||||||||||||||||||||||||||||
2011 | 13.27 | 0.02 | (0.37 | ) | (0.35 | ) | – | (0.15 | ) | – | (0.15 | ) | – | 12.77 | (2.64 | ) | 328,610 | 2.07 | 2.07 | 2.07 | 0.15 | 21 | ||||||||||||||||||||||||||||||||||||||
2010 | 10.90 | 0.08 | 2.33 | 2.41 | (0.04 | ) | – | – | (0.04 | ) | – | 13.27 | 22.18 | 391,886 | 2.09 | 2.09 | 2.09 | 0.68 | 15 | |||||||||||||||||||||||||||||||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 91 |
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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce Total Return Fund–Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 16.35 | $ | 0.18 | $ | 0.02 | $ | 0.20 | $ | (0.32 | ) | $ | (1.62 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | 14.61 | 1.51 | % | $ | 572,662 | 1.00 | % | 1.00 | % | 1.00 | % | 1.09 | % | 18 | % | |||||||||||||||||||||||
2013 | 13.55 | 0.18 | 4.21 | 4.39 | (0.17 | ) | (1.42 | ) | – | (1.59 | ) | – | 16.35 | 32.93 | 621,447 | 1.00 | 1.00 | 1.00 | 1.15 | 21 | ||||||||||||||||||||||||||||||||||||||||
2012 | 12.64 | 0.27 | 1.54 | 1.81 | (0.28 | ) | (0.62 | ) | – | (0.90 | ) | – | 13.55 | 14.48 | 408,551 | 1.02 | 1.02 | 1.02 | 2.02 | 17 | ||||||||||||||||||||||||||||||||||||||||
2011 | 13.14 | 0.16 | (0.37 | ) | (0.21 | ) | (0.14 | ) | (0.15 | ) | – | (0.29 | ) | – | 12.64 | (1.55 | ) | 390,277 | 1.00 | 1.00 | 1.00 | 1.26 | 21 | |||||||||||||||||||||||||||||||||||||
2010 | 10.80 | 0.21 | 2.31 | 2.52 | (0.18 | ) | – | – | (0.18 | ) | – | 13.14 | 23.56 | 356,038 | 1.01 | 1.01 | 1.01 | 1.79 | 15 | |||||||||||||||||||||||||||||||||||||||||
Royce Total Return Fund–W Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 16.45 | $ | 0.15 | $ | 0.03 | $ | 0.18 | $ | (0.29 | ) | $ | (1.62 | ) | $ | – | $ | (1.91 | ) | $ | – | $ | 14.72 | 1.35 | % | $ | 261,829 | 1.13 | % | 1.13 | % | 1.13 | % | 0.97 | % | 18 | % | |||||||||||||||||||||||
2013 | 13.62 | 0.16 | 4.23 | 4.39 | (0.14 | ) | (1.42 | ) | – | (1.56 | ) | – | 16.45 | 32.71 | 249,035 | 1.15 | 1.15 | 1.15 | 0.99 | 21 | ||||||||||||||||||||||||||||||||||||||||
2012 | 12.69 | 0.26 | 1.54 | 1.80 | (0.25 | ) | (0.62 | ) | – | (0.87 | ) | – | 13.62 | 14.41 | 171,603 | 1.12 | 1.12 | 1.12 | 1.97 | 17 | ||||||||||||||||||||||||||||||||||||||||
2011 | 13.19 | 0.16 | (0.37 | ) | (0.21 | ) | (0.14 | ) | (0.15 | ) | – | (0.29 | ) | – | 12.69 | (1.58 | ) | 132,488 | 1.05 | 1.05 | 1.05 | 1.27 | 21 | |||||||||||||||||||||||||||||||||||||
2010 | 10.83 | 0.20 | 2.32 | 2.52 | (0.16 | ) | – | – | (0.16 | ) | – | 13.19 | 23.44 | 75,063 | 1.09 | 1.09 | 1.09 | 1.74 | 15 | |||||||||||||||||||||||||||||||||||||||||
Royce Total Return Fund–R Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 16.73 | $ | 0.07 | $ | 0.01 | $ | 0.08 | $ | (0.12 | ) | $ | (1.62 | ) | $ | – | $ | (1.74 | ) | $ | – | $ | 15.07 | 0.73 | % | $ | 65,501 | 1.72 | % | 1.72 | % | 1.72 | % | 0.37 | % | 18 | % | |||||||||||||||||||||||
2013 | 13.82 | 0.06 | 4.30 | 4.36 | (0.03 | ) | (1.42 | ) | – | (1.45 | ) | – | 16.73 | 31.95 | 72,541 | 1.75 | 1.75 | 1.75 | 0.39 | 21 | ||||||||||||||||||||||||||||||||||||||||
2012 | 12.79 | 0.18 | 1.55 | 1.73 | (0.08 | ) | (0.62 | ) | – | (0.70 | ) | – | 13.82 | 13.66 | 48,797 | 1.74 | 1.74 | 1.74 | 1.36 | 17 | ||||||||||||||||||||||||||||||||||||||||
2011 | 13.28 | 0.08 | (0.38 | ) | (0.30 | ) | (0.04 | ) | (0.15 | ) | – | (0.19 | ) | – | 12.79 | (2.23 | ) | 34,695 | 1.68 | 1.68 | 1.68 | 0.62 | 21 | |||||||||||||||||||||||||||||||||||||
2010 | 10.88 | 0.15 | 2.32 | 2.47 | (0.07 | ) | – | – | (0.07 | ) | – | 13.28 | 22.76 | 20,011 | 1.71 | 1.71 | 1.71 | 1.20 | 15 | |||||||||||||||||||||||||||||||||||||||||
Royce Total Return Fund–K Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 12.40 | $ | 0.11 | $ | (0.03 | ) | $ | 0.08 | $ | (0.15 | ) | $ | (1.62 | ) | $ | – | $ | (1.77 | ) | $ | – | $ | 10.71 | 1.01 | % | $ | 91,271 | 1.47 | % | 1.47 | % | 1.47 | % | 0.55 | % | 18 | % | ||||||||||||||||||||||
2013 | 10.53 | 0.07 | 3.27 | 3.34 | (0.05 | ) | (1.42 | ) | – | (1.47 | ) | – | 12.40 | 32.20 | 196,344 | 1.50 | 1.50 | 1.50 | 0.62 | 21 | ||||||||||||||||||||||||||||||||||||||||
2012 | 9.90 | 0.17 | 1.21 | 1.38 | (0.13 | ) | (0.62 | ) | – | (0.75 | ) | – | 10.53 | 14.08 | 163,412 | 1.43 | 1.43 | 1.43 | 1.51 | 17 | ||||||||||||||||||||||||||||||||||||||||
2011 | 10.31 | 0.09 | (0.30 | ) | (0.21 | ) | (0.05 | ) | (0.15 | ) | – | (0.20 | ) | – | 9.90 | (1.97 | ) | 177,812 | 1.44 | 1.44 | 1.44 | 0.90 | 21 | |||||||||||||||||||||||||||||||||||||
2010 | 8.47 | 0.13 | 1.81 | 1.94 | (0.10 | ) | – | – | (0.10 | ) | – | 10.31 | 23.08 | 95,319 | 1.43 | 1.43 | 1.43 | 1.46 | 15 | |||||||||||||||||||||||||||||||||||||||||
Royce Heritage Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 16.24 | $ | 0.10 | $ | (0.25 | ) | $ | (0.15 | ) | $ | (0.05 | ) | $ | (0.83 | ) | $ | – | $ | (0.88 | ) | $ | – | $ | 15.21 | (0.81 | )% | $ | 160,558 | 1.09 | % | 1.09 | % | 1.09 | % | 0.66 | % | 35 | % | |||||||||||||||||||||
2013 | 14.48 | 0.03 | 3.71 | 3.74 | (0.05 | ) | (1.93 | ) | – | (1.98 | ) | – | 16.24 | 26.37 | 117,306 | 1.13 | 1.13 | 1.13 | 0.36 | 79 | ||||||||||||||||||||||||||||||||||||||||
2012 | 13.07 | 0.10 | 1.80 | 1.90 | (0.13 | ) | (0.36 | ) | – | (0.49 | ) | – | 14.48 | 14.70 | 40,374 | 1.20 | 1.20 | 1.20 | 0.94 | 39 | ||||||||||||||||||||||||||||||||||||||||
2011 | 15.10 | 0.01 | (1.41 | ) | (1.40 | ) | (0.05 | ) | (0.59 | ) | – | (0.64 | ) | 0.01 | 13.07 | (9.16 | ) | 21,088 | 1.22 | 1.22 | 1.22 | 0.15 | 51 | |||||||||||||||||||||||||||||||||||||
2010 | 12.12 | 0.04 | 3.31 | 3.35 | (0.08 | ) | (0.29 | ) | – | (0.37 | ) | – | 15.10 | 27.71 | 13,313 | 1.25 | 1.25 | 1.24 | 0.35 | 66 | ||||||||||||||||||||||||||||||||||||||||
Royce Heritage Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 16.20 | $ | 0.05 | $ | (0.25 | ) | $ | (0.20 | ) | $ | – | $ | (0.83 | ) | $ | – | $ | (0.83 | ) | $ | – | $ | 15.17 | (1.14 | )% | $ | 175,433 | 1.43 | % | 1.43 | % | 1.40 | % | 0.32 | % | 35 | % | ||||||||||||||||||||||
2013 | 14.45 | 0.00 | 3.68 | 3.68 | (0.00 | ) | (1.93 | ) | – | (1.93 | ) | – | 16.20 | 25.99 | 223,533 | 1.45 | 1.45 | 1.42 | 0.02 | 79 | ||||||||||||||||||||||||||||||||||||||||
2012 | 13.00 | 0.08 | 1.78 | 1.86 | (0.05 | ) | (0.36 | ) | – | (0.41 | ) | – | 14.45 | 14.39 | 203,112 | 1.46 | 1.46 | 1.45 | 0.56 | 39 | ||||||||||||||||||||||||||||||||||||||||
2011 | 15.03 | (0.01 | ) | (1.40 | ) | (1.41 | ) | (0.03 | ) | (0.59 | ) | – | (0.62 | ) | – | 13.00 | (9.39 | ) | 218,770 | 1.47 | 1.47 | 1.44 | (0.07 | ) | 51 | |||||||||||||||||||||||||||||||||||
2010 | 12.07 | 0.03 | 3.28 | 3.31 | (0.06 | ) | (0.29 | ) | – | (0.35 | ) | – | 15.03 | 27.50 | 243,822 | 1.47 | 1.47 | 1.38 | 0.21 | 66 | ||||||||||||||||||||||||||||||||||||||||
92 | The Royce Funds 2014 Annual 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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce Heritage Fund–Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 12.57 | $ | (0.07 | ) | $ | (0.20 | ) | $ | (0.27 | ) | $ | – | $ | (0.83 | ) | $ | – | $ | (0.83 | ) | $ | – | $ | 11.47 | (2.02 | )% | $ | 13,338 | 2.31 | % | 2.31 | % | 2.31 | % | (0.59 | )% | 35 | % | |||||||||||||||||||||
2013 | 11.68 | (0.12 | ) | 2.94 | 2.82 | – | (1.93 | ) | – | (1.93 | ) | – | 12.57 | 24.73 | 15,942 | 2.37 | 2.37 | 2.37 | (0.93 | ) | 79 | |||||||||||||||||||||||||||||||||||||||
2012 | 10.64 | (0.04 | ) | 1.44 | 1.40 | – | (0.36 | ) | – | (0.36 | ) | – | 11.68 | 13.30 | 13,909 | 2.41 | 2.41 | 2.41 | (0.39 | ) | 39 | |||||||||||||||||||||||||||||||||||||||
2011 | 12.50 | (0.11 | ) | (1.16 | ) | (1.27 | ) | – | (0.59 | ) | – | (0.59 | ) | – | 10.64 | (10.14 | ) | 13,850 | 2.28 | 2.28 | 2.28 | (0.91 | ) | 51 | ||||||||||||||||||||||||||||||||||||
2010 | 10.14 | (0.08 | ) | 2.73 | 2.65 | – | (0.29 | ) | – | (0.29 | ) | – | 12.50 | 26.22 | 12,801 | 2.36 | 2.36 | 2.36 | (0.77 | ) | 66 | |||||||||||||||||||||||||||||||||||||||
Royce Heritage Fund–R Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 11.63 | $ | (0.02 | ) | $ | (0.18 | ) | $ | (0.20 | ) | $ | – | $ | (0.83 | ) | $ | – | $ | (0.83 | ) | $ | – | $ | 10.60 | (1.59 | )% | $ | 3,727 | 1.89 | % | 1.89 | % | 1.84 | % | (0.14 | )% | 35 | % | |||||||||||||||||||||
2013 | 10.86 | (0.05 | ) | 2.75 | 2.70 | – | (1.93 | ) | – | (1.93 | ) | – | 11.63 | 25.51 | 6,805 | 1.90 | 1.90 | 1.84 | (0.39 | ) | 79 | |||||||||||||||||||||||||||||||||||||||
2012 | 9.87 | 0.02 | 1.34 | 1.36 | (0.01) | (0.36 | ) | – | (0.37 | ) | – | 10.86 | 13.88 | 4,832 | 1.95 | 1.95 | 1.84 | 0.17 | 39 | |||||||||||||||||||||||||||||||||||||||||
2011 | 11.63 | (0.06 | ) | (1.07 | ) | (1.13 | ) | (0.04) | (0.59 | ) | – | (0.63 | ) | – | 9.87 | (9.73 | ) | 4,081 | 1.90 | 1.90 | 1.84 | (0.45 | ) | 51 | ||||||||||||||||||||||||||||||||||||
2010 | 9.43 | (0.03 | ) | 2.55 | 2.52 | (0.03) | (0.29 | ) | – | (0.32 | ) | – | 11.63 | 26.84 | 1,909 | 2.22 | 2.22 | 1.84 | (0.25 | ) | 66 | |||||||||||||||||||||||||||||||||||||||
Royce Heritage Fund–K Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 11.70 | $ | 0.02 | $ | (0.19 | ) | $ | (0.17 | ) | $ | – | $ | (0.83 | ) | $ | – | $ | (0.83 | ) | $ | – | $ | 10.70 | (1.32 | )% | $ | 5,462 | 1.87 | % | 1.87 | % | 1.59 | % | 0.14 | % | 35 | % | ||||||||||||||||||||||
2013 | 10.90 | (0.02 | ) | 2.75 | 2.73 | – | (1.93 | ) | – | (1.93 | ) | – | 11.70 | 25.69 | 6,419 | 1.70 | 1.70 | 1.59 | (0.15 | ) | 79 | |||||||||||||||||||||||||||||||||||||||
2012 | 9.93 | 0.04 | 1.36 | 1.40 | (0.07 | ) | (0.36 | ) | – | (0.43 | ) | – | 10.90 | 14.22 | 7,077 | 1.61 | 1.61 | 1.59 | 0.42 | 39 | ||||||||||||||||||||||||||||||||||||||||
2011 | 11.68 | (0.04 | ) | (1.08 | ) | (1.12 | ) | (0.04 | ) | (0.59 | ) | – | (0.63 | ) | – | 9.93 | (9.53 | ) | 7,787 | 1.66 | 1.66 | 1.59 | (0.24 | ) | 51 | |||||||||||||||||||||||||||||||||||
2010 | 9.46 | (0.03 | ) | 2.60 | 2.57 | (0.06 | ) | (0.29 | ) | – | (0.35 | ) | – | 11.68 | 27.29 | 5,214 | 1.67 | 1.67 | 1.59 | (0.00 | ) | 66 | ||||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 15.54 | $ | (0.05 | ) | $ | (0.09 | ) | $ | (0.14 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | 13.46 | (0.48 | )% | $ | 1,284,044 | 1.14 | % | 1.14 | % | 1.14 | % | (0.30 | )% | 36 | % | |||||||||||||||||||||
2013 | 11.95 | (0.05 | ) | 5.18 | 5.13 | – | (1.54 | ) | – | (1.54 | ) | – | 15.54 | 43.50 | 1,426,214 | 1.16 | 1.16 | 1.16 | (0.36 | ) | 39 | |||||||||||||||||||||||||||||||||||||||
2012 | 10.32 | 0.00 | 2.30 | 2.30 | – | (0.67 | ) | – | (0.67 | ) | – | 11.95 | 22.59 | 921,473 | 1.13 | 1.13 | 1.13 | 0.02 | 34 | |||||||||||||||||||||||||||||||||||||||||
2011 | 12.08 | (0.04 | ) | (1.53 | ) | (1.57 | ) | – | (0.19 | ) | – | (0.19 | ) | – | 10.32 | (12.95 | ) | 878,824 | 1.16 | 1.16 | 1.16 | (0.38 | ) | 35 | ||||||||||||||||||||||||||||||||||||
2010 | 9.03 | (0.04 | ) | 3.09 | 3.05 | – | – | – | – | – | 12.08 | 33.78 | 1,170,607 | 1.17 | 1.17 | 1.17 | (0.44 | ) | 47 | |||||||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.92 | $ | (0.09 | ) | $ | (0.09 | ) | $ | (0.18 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | 12.80 | (0.74 | )% | $ | 155,085 | 1.47 | % | 1.47 | % | 1.47 | % | (0.64 | )% | 36 | % | |||||||||||||||||||||
2013 | 11.55 | (0.09 | ) | 5.00 | 4.91 | – | (1.54 | ) | – | (1.54 | ) | – | 14.92 | 43.10 | 208,237 | 1.47 | 1.47 | 1.47 | (0.67 | ) | 39 | |||||||||||||||||||||||||||||||||||||||
2012 | 10.03 | (0.04 | ) | 2.23 | 2.19 | – | (0.67 | ) | – | (0.67 | ) | – | 11.55 | 22.14 | 205,084 | 1.46 | 1.46 | 1.46 | (0.32 | ) | 34 | |||||||||||||||||||||||||||||||||||||||
2011 | 11.78 | (0.08 | ) | (1.49 | ) | (1.57 | ) | – | (0.19 | ) | – | (0.19 | ) | 0.01 | 10.03 | (13.20 | ) | 160,496 | 1.48 | 1.48 | 1.48 | (0.73 | ) | 35 | ||||||||||||||||||||||||||||||||||||
2010 | 8.83 | (0.08 | ) | 3.03 | 2.95 | – | – | – | – | – | 11.78 | 33.41 | 312,728 | 1.46 | 1.46 | 1.46 | (0.78 | ) | 47 | |||||||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund–Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.02 | $ | (0.19 | ) | $ | (0.10 | ) | $ | (0.29 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | 11.79 | (1.61 | )% | $ | 20,518 | 2.24 | % | 2.24 | % | 2.24 | % | (1.40 | )% | 36 | % | |||||||||||||||||||||
2013 | 11.01 | (0.20 | ) | 4.75 | 4.55 | – | (1.54 | ) | – | (1.54 | ) | – | 14.02 | 41.93 | 18,643 | 2.31 | 2.31 | 2.31 | (1.51 | ) | 39 | |||||||||||||||||||||||||||||||||||||||
2012 | 9.67 | (0.13 | ) | 2.14 | 2.01 | – | (0.67 | ) | – | (0.67 | ) | – | 11.01 | 21.09 | 11,930 | 2.36 | 2.36 | 2.36 | (1.22 | ) | 34 | |||||||||||||||||||||||||||||||||||||||
2011 | 11.46 | (0.15 | ) | (1.45 | ) | (1.60 | ) | – | (0.19 | ) | – | (0.19 | ) | – | 9.67 | (13.91 | ) | 11,884 | 2.24 | 2.24 | 2.24 | (1.44 | ) | 35 | ||||||||||||||||||||||||||||||||||||
2010 | 8.66 | (0.15 | ) | 2.95 | 2.80 | – | – | – | – | – | 11.46 | 32.33 | 13,126 | 2.29 | 2.29 | 2.29 | (1.56 | ) | 47 | |||||||||||||||||||||||||||||||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 93 |
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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund–Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 15.71 | $ | (0.03 | ) | $ | (0.10 | ) | $ | (0.13 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | 13.64 | (0.41 | )% | $ | 799,131 | 1.03 | % | 1.03 | % | 1.03 | % | (0.20 | )% | 36 | % | |||||||||||||||||||||
2013 | 12.06 | (0.03 | ) | 5.23 | 5.20 | (0.01 | ) | (1.54 | ) | – | (1.55 | ) | – | 15.71 | 43.69 | 853,886 | 1.03 | 1.03 | 1.03 | (0.23 | ) | 39 | ||||||||||||||||||||||||||||||||||||||
2012 | 10.40 | 0.01 | 2.32 | 2.33 | – | (0.67 | ) | – | (0.67 | ) | – | 12.06 | 22.70 | 689,939 | 1.04 | 1.04 | 1.04 | 0.11 | 34 | |||||||||||||||||||||||||||||||||||||||||
2011 | 12.16 | (0.03 | ) | (1.54 | ) | (1.57 | ) | – | (0.19 | ) | – | (0.19 | ) | – | 10.40 | (12.86 | ) | 574,826 | 1.03 | 1.03 | 1.03 | (0.24 | ) | 35 | ||||||||||||||||||||||||||||||||||||
2010 | 9.07 | (0.03 | ) | 3.12 | 3.09 | – | – | – | – | – | 12.16 | 34.07 | 702,220 | 1.04 | 1.04 | 1.04 | (0.32 | ) | 47 | |||||||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund–R Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.73 | $ | (0.13 | ) | $ | (0.10 | ) | $ | (0.23 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | 12.56 | (1.12 | )% | $ | 33,699 | 1.78 | % | 1.78 | % | 1.78 | % | (0.93 | )% | 36 | % | |||||||||||||||||||||
2013 | 11.46 | (0.14 | ) | 4.95 | 4.81 | – | (1.54 | ) | – | (1.54 | ) | – | 14.73 | 42.56 | 22,730 | 1.82 | 1.82 | 1.82 | (1.02 | ) | 39 | |||||||||||||||||||||||||||||||||||||||
2012 | 9.98 | (0.07 | ) | 2.22 | 2.15 | – | (0.67 | ) | – | (0.67 | ) | – | 11.46 | 21.85 | 6,612 | 2.01 | 2.01 | 1.84 | (0.62 | ) | 34 | |||||||||||||||||||||||||||||||||||||||
2011 | 11.78 | (0.10 | ) | (1.51 | ) | (1.61 | ) | – | (0.19 | ) | – | (0.19 | ) | – | 9.98 | (13.62 | ) | 3,088 | 2.03 | 2.03 | 1.84 | (0.98 | ) | 35 | ||||||||||||||||||||||||||||||||||||
2010 | 8.86 | (0.11 | ) | 3.03 | 2.92 | – | – | – | – | – | 11.78 | 32.96 | 1,407 | 2.88 | 2.88 | 1.84 | (1.06 | ) | 47 | |||||||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund–K Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.70 | $ | (0.10 | ) | $ | (0.09 | ) | $ | (0.19 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | (1.94 | ) | $ | – | $ | 11.57 | (0.90 | )% | $ | 22,892 | 1.59 | % | 1.59 | % | 1.59 | % | (0.75 | )% | 36 | % | |||||||||||||||||||||
2013 | 10.70 | (0.08 | ) | 4.62 | 4.54 | – | (1.54 | ) | – | (1.54 | ) | – | 13.70 | 43.07 | 17,927 | 1.46 | 1.46 | 1.46 | (0.65 | ) | 39 | |||||||||||||||||||||||||||||||||||||||
2012 | 9.33 | (0.04 | ) | 2.08 | 2.04 | – | (0.67 | ) | – | (0.67 | ) | – | 10.70 | 22.19 | 8,828 | 1.52 | 1.52 | 1.52 | (0.36 | ) | 34 | |||||||||||||||||||||||||||||||||||||||
2011 | 10.98 | (0.07 | ) | (1.39 | ) | (1.46 | ) | – | (0.19 | ) | – | (0.19 | ) | – | 9.33 | (13.25 | ) | 6,484 | 1.46 | 1.46 | 1.46 | (0.68 | ) | 35 | ||||||||||||||||||||||||||||||||||||
2010 | 8.24 | (0.07 | ) | 2.81 | 2.74 | – | – | – | – | – | 10.98 | 33.25 | 6,657 | 1.63 | 1.63 | 1.59 | (0.76 | ) | 47 | |||||||||||||||||||||||||||||||||||||||||
Royce Special Equity Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 25.02 | $ | 0.13 | $ | 0.09 | $ | 0.22 | $ | (0.12 | ) | $ | (2.26 | ) | $ | – | $ | (2.38 | ) | $ | – | $ | 22.86 | 1.09 | % | $ | 1,950,211 | 1.12 | % | 1.12 | % | 1.12 | % | 0.47 | % | 21 | % | |||||||||||||||||||||||
2013 | 21.13 | 0.03 | 6.09 | 6.12 | (0.03 | ) | (2.20 | ) | – | (2.23 | ) | – | 25.02 | 29.36 | 2,510,346 | 1.13 | 1.13 | 1.13 | 0.13 | 28 | ||||||||||||||||||||||||||||||||||||||||
2012 | 19.70 | 0.46 | 2.53 | 2.99 | (0.46 | ) | (1.10 | ) | – | (1.56 | ) | – | 21.13 | 15.36 | 2,048,091 | 1.13 | 1.13 | 1.13 | 2.20 | 31 | ||||||||||||||||||||||||||||||||||||||||
2011 | 20.87 | 0.05 | (0.05 | ) | 0.00 | (0.09 | ) | (1.08 | ) | – | (1.17 | ) | – | 19.70 | 0.08 | 1,677,393 | 1.15 | 1.15 | 1.15 | 0.23 | 23 | |||||||||||||||||||||||||||||||||||||||
2010 | 17.50 | 0.14 | 3.29 | 3.43 | (0.06 | ) | – | – | (0.06 | ) | – | 20.87 | 19.61 | 1,487,632 | 1.17 | 1.16 | 1.16 | 0.78 | 21 | |||||||||||||||||||||||||||||||||||||||||
Royce Special Equity Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 24.97 | $ | 0.06 | $ | 0.09 | $ | 0.15 | $ | (0.05 | ) | $ | (2.26 | ) | $ | – | $ | (2.31 | ) | $ | – | $ | 22.81 | 0.80 | % | $ | 233,791 | 1.44 | % | 1.44 | % | 1.39 | % | 0.20 | % | 21 | % | |||||||||||||||||||||||
2013 | 21.12 | (0.03 | ) | 6.08 | 6.05 | – | (2.20 | ) | – | (2.20 | ) | – | 24.97 | 29.04 | 335,952 | 1.45 | 1.45 | 1.39 | (0.13 | ) | 28 | |||||||||||||||||||||||||||||||||||||||
2012 | 19.66 | 0.42 | 2.52 | 2.94 | (0.38 | ) | (1.10 | ) | – | (1.48 | ) | – | 21.12 | 15.10 | 250,915 | 1.43 | 1.43 | 1.39 | 1.90 | 31 | ||||||||||||||||||||||||||||||||||||||||
2011 | 20.83 | 0.00 | (0.05 | ) | (0.05 | ) | (0.05 | ) | (1.08 | ) | – | (1.13 | ) | 0.01 | 19.66 | (0.12 | ) | 216,143 | 1.45 | 1.45 | 1.39 | 0.00 | 23 | |||||||||||||||||||||||||||||||||||||
2010 | 17.48 | 0.10 | 3.27 | 3.37 | (0.03 | ) | – | – | (0.03 | ) | 0.01 | 20.83 | 19.33 | 160,870 | 1.48 | 1.48 | 1.39 | 0.56 | 21 | |||||||||||||||||||||||||||||||||||||||||
Royce Special Equity Fund–Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 23.57 | $ | (0.13 | ) | $ | 0.09 | $ | (0.04 | ) | $ | – | $ | (2.26 | ) | $ | – | $ | (2.26 | ) | $ | – | $ | 21.27 | 0.04 | % | $ | 63,981 | 2.14 | % | 2.14 | % | 2.14 | % | (0.56 | )% | 21 | % | ||||||||||||||||||||||
2013 | 20.20 | (0.21 | ) | 5.78 | 5.57 | – | (2.20 | ) | – | (2.20 | ) | – | 23.57 | 27.97 | 71,333 | 2.17 | 2.17 | 2.17 | (0.90 | ) | 28 | |||||||||||||||||||||||||||||||||||||||
2012 | 18.88 | 0.23 | 2.42 | 2.65 | (0.23 | ) | (1.10 | ) | – | (1.33 | ) | – | 20.20 | 14.20 | 57,755 | 2.18 | 2.18 | 2.18 | 1.13 | 31 | ||||||||||||||||||||||||||||||||||||||||
2011 | 20.16 | (0.15 | ) | (0.05 | ) | (0.20 | ) | – | (1.08 | ) | – | (1.08 | ) | – | 18.88 | (0.93 | ) | 50,253 | 2.16 | 2.16 | 2.16 | (0.77 | ) | 23 | ||||||||||||||||||||||||||||||||||||
2010 | 17.03 | (0.04 | ) | 3.17 | 3.13 | – | – | – | – | – | 20.16 | 18.38 | 38,497 | 2.17 | 2.17 | 2.17 | (0.22 | ) | 21 | |||||||||||||||||||||||||||||||||||||||||
94 | The Royce Funds 2014 Annual 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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce Special Equity Fund–Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 24.88 | $ | 0.14 | $ | 0.10 | $ | 0.24 | $ | (0.15 | ) | $ | (2.26 | ) | $ | – | $ | (2.41 | ) | $ | – | $ | 22.71 | 1.17 | % | $ | 639,723 | 1.02 | % | 1.02 | % | 1.02 | % | 0.56 | % | 21 | % | |||||||||||||||||||||||
2013 | 21.02 | 0.06 | 6.06 | 6.12 | (0.06 | ) | (2.20 | ) | – | (2.26 | ) | – | 24.88 | 29.51 | 700,200 | 1.01 | 1.01 | 1.01 | 0.26 | 28 | ||||||||||||||||||||||||||||||||||||||||
2012 | 19.63 | 0.49 | 2.51 | 3.00 | (0.51 | ) | (1.10 | ) | – | (1.61 | ) | – | 21.02 | 15.46 | 571,388 | 1.02 | 1.02 | 1.02 | 2.28 | 31 | ||||||||||||||||||||||||||||||||||||||||
2011 | 20.79 | 0.07 | (0.03 | ) | 0.04 | (0.12 | ) | (1.08 | ) | – | (1.20 | ) | – | 19.63 | 0.25 | 481,855 | 1.03 | 1.03 | 1.03 | 0.36 | 23 | |||||||||||||||||||||||||||||||||||||||
2010 | 17.44 | 0.16 | 3.27 | 3.43 | (0.08 | ) | – | – | (0.08 | ) | – | 20.79 | 19.69 | 445,168 | 1.04 | 1.04 | 1.04 | 0.91 | 21 | |||||||||||||||||||||||||||||||||||||||||
Royce Value Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.52 | $ | 0.04 | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (1.67 | ) | $ | – | $ | (1.70 | ) | $ | – | $ | 11.81 | 0.27 | % | $ | 140,163 | 1.18 | % | 1.18 | % | 1.18 | % | 0.32 | % | 38 | % | |||||||||||||||||||||
2013 | 11.37 | 0.02 | 3.13 | 3.15 | (0.03 | ) | (0.97 | ) | – | (1.00 | ) | – | 13.52 | 28.06 | 196,854 | 1.21 | 1.21 | 1.21 | 0.11 | 51 | ||||||||||||||||||||||||||||||||||||||||
2012 | 10.97 | 0.15 | 0.92 | 1.07 | (0.14 | ) | (0.53 | ) | – | (0.67 | ) | – | 11.37 | 9.88 | 206,316 | 1.19 | 1.19 | 1.19 | 1.22 | 25 | ||||||||||||||||||||||||||||||||||||||||
2011 | 12.70 | 0.00 | (0.92 | ) | (0.92 | ) | (0.07 | ) | (0.75 | ) | – | (0.82 | ) | 0.01 | 10.97 | (7.17 | ) | 218,126 | 1.17 | 1.17 | 1.17 | 0.09 | 35 | |||||||||||||||||||||||||||||||||||||
2010 | 10.16 | 0.03 | 2.55 | 2.58 | (0.04 | ) | – | – | (0.04 | ) | – | 12.70 | 25.42 | 115,007 | 1.16 | 1.16 | 1.16 | 0.32 | 35 | |||||||||||||||||||||||||||||||||||||||||
Royce Value Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.48 | $ | 0.01 | $ | (0.06 | ) | $ | (0.05 | ) | $ | – | $ | (1.67 | ) | $ | – | $ | (1.67 | ) | $ | – | $ | 11.76 | (0.02 | )% | $ | 477,999 | 1.45 | % | 1.45 | % | 1.45 | % | 0.04 | % | 38 | % | ||||||||||||||||||||||
2013 | 11.34 | (0.02 | ) | 3.13 | 3.11 | – | (0.97 | ) | – | (0.97 | ) | – | 13.48 | 27.76 | 680,674 | 1.48 | 1.48 | 1.48 | (0.17 | ) | 51 | |||||||||||||||||||||||||||||||||||||||
2012 | 10.94 | 0.12 | 0.91 | 1.03 | (0.10 | ) | (0.53 | ) | – | (0.63 | ) | – | 11.34 | 9.56 | 831,673 | 1.45 | 1.45 | 1.45 | 0.90 | 25 | ||||||||||||||||||||||||||||||||||||||||
2011 | 12.65 | (0.03 | ) | (0.92 | ) | (0.95 | ) | (0.02 | ) | (0.75 | ) | – | (0.77 | ) | 0.01 | 10.94 | (7.41 | ) | 1,083,903 | 1.45 | 1.45 | 1.44 | (0.23 | ) | 35 | |||||||||||||||||||||||||||||||||||
2010 | 10.13 | 0.00 | 2.53 | 2.53 | (0.01 | ) | – | – | (0.01 | ) | – | 12.65 | 24.97 | 1,415,766 | 1.46 | 1.46 | 1.44 | 0.04 | 35 | |||||||||||||||||||||||||||||||||||||||||
Royce Value Fund–Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 12.68 | $ | (0.09 | ) | $ | (0.05 | ) | $ | (0.14 | ) | $ | – | $ | (1.67 | ) | $ | – | $ | (1.67 | ) | $ | – | $ | 10.87 | (0.74 | )% | $ | 26,716 | 2.21 | % | 2.21 | % | 2.21 | % | (0.71 | )% | 38 | % | |||||||||||||||||||||
2013 | 10.81 | (0.12 | ) | 2.96 | 2.84 | – | (0.97 | ) | – | (0.97 | ) | – | 12.68 | 26.61 | 31,604 | 2.29 | 2.29 | 2.29 | (0.97 | ) | 51 | |||||||||||||||||||||||||||||||||||||||
2012 | 10.46 | 0.02 | 0.89 | 0.91 | (0.03 | ) | (0.53 | ) | – | (0.56 | ) | – | 10.81 | 8.77 | 33,480 | 2.26 | 2.26 | 2.26 | 0.15 | 25 | ||||||||||||||||||||||||||||||||||||||||
2011 | 12.21 | (0.11 | ) | (0.89 | ) | (1.00 | ) | – | (0.75 | ) | – | (0.75 | ) | – | 10.46 | (8.20 | ) | 36,104 | 2.17 | 2.17 | 2.17 | (0.94 | ) | 35 | ||||||||||||||||||||||||||||||||||||
2010 | 9.84 | (0.07 | ) | 2.44 | 2.37 | – | – | – | – | – | 12.21 | 24.09 | 35,167 | 2.18 | 2.18 | 2.18 | (0.69 | ) | 35 | |||||||||||||||||||||||||||||||||||||||||
Royce Value Fund–Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.53 | $ | 0.06 | $ | (0.06 | ) | $ | 0.00 | $ | (0.05 | ) | $ | (1.67 | ) | $ | – | $ | (1.72 | ) | $ | – | $ | 11.81 | 0.35 | % | $ | 196,543 | 1.05 | % | 1.05 | % | 1.05 | % | 0.46 | % | 38 | % | ||||||||||||||||||||||
2013 | 11.38 | 0.04 | 3.13 | 3.17 | (0.05 | ) | (0.97 | ) | – | (1.02 | ) | – | 13.53 | 28.22 | 219,667 | 1.05 | 1.05 | 1.05 | 0.27 | 51 | ||||||||||||||||||||||||||||||||||||||||
2012 | 10.98 | 0.17 | 0.92 | 1.09 | (0.16 | ) | (0.53 | ) | – | (0.69 | ) | – | 11.38 | 10.04 | 202,643 | 1.05 | 1.05 | 1.05 | 1.41 | 25 | ||||||||||||||||||||||||||||||||||||||||
2011 | 12.71 | 0.03 | (0.94 | ) | (0.91 | ) | (0.07 | ) | (0.75 | ) | – | (0.82 | ) | – | 10.98 | (7.12 | ) | 190,591 | 1.04 | 1.04 | 1.04 | 0.19 | 35 | |||||||||||||||||||||||||||||||||||||
2010 | 10.17 | 0.05 | 2.54 | 2.59 | (0.05 | ) | – | – | (0.05 | ) | – | 12.71 | 25.52 | 219,111 | 1.04 | 1.04 | 1.04 | 0.45 | 35 | |||||||||||||||||||||||||||||||||||||||||
Royce Value Fund–R Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.19 | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.09 | ) | $ | – | $ | (1.67 | ) | $ | – | $ | (1.67 | ) | $ | – | $ | 11.43 | (0.34 | )% | $ | 31,043 | 1.77 | % | 1.77 | % | 1.77 | % | (0.26 | )% | 38 | % | |||||||||||||||||||||
2013 | 11.16 | (0.06 | ) | 3.06 | 3.00 | – | (0.97 | ) | – | (0.97 | ) | – | 13.19 | 27.21 | 37,409 | 1.83 | 1.83 | 1.83 | (0.52 | ) | 51 | |||||||||||||||||||||||||||||||||||||||
2012 | 10.78 | 0.07 | 0.91 | 0.98 | (0.07 | ) | (0.53 | ) | – | (0.60 | ) | – | 11.16 | 9.18 | 37,679 | 1.85 | 1.85 | 1.85 | 0.59 | 25 | ||||||||||||||||||||||||||||||||||||||||
2011 | 12.54 | (0.06 | ) | (0.91 | ) | (0.97 | ) | (0.04 | ) | (0.75 | ) | – | (0.79 | ) | – | 10.78 | (7.75 | ) | 34,151 | 1.68 | 1.68 | 1.68 | (0.44 | ) | 35 | |||||||||||||||||||||||||||||||||||
2010 | 10.05 | (0.02 | ) | 2.51 | 2.49 | (0.00 | ) | – | – | (0.00 | ) | – | 12.54 | 24.81 | 26,524 | 1.68 | 1.67 | 1.67 | (0.16 | ) | 35 | |||||||||||||||||||||||||||||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 95 |
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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce Value Fund–K Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.65 | $ | (0.02 | ) | $ | (0.06 | ) | $ | (0.08 | ) | $ | – | $ | (1.67 | ) | $ | – | $ | (1.67 | ) | $ | – | $ | 8.90 | (0.32 | )% | $ | 9,363 | 1.67 | % | 1.67 | % | 1.67 | % | (0.18 | )% | 38 | % | |||||||||||||||||||||
2013 | 9.14 | (0.03 | ) | 2.51 | 2.48 | – | (0.97 | ) | – | (0.97 | ) | – | 10.65 | 27.55 | 16,285 | 1.62 | 1.62 | 1.62 | (0.30 | ) | 51 | |||||||||||||||||||||||||||||||||||||||
2012 | 8.95 | 0.09 | 0.75 | 0.84 | (0.12 | ) | (0.53 | ) | – | (0.65 | ) | – | 9.14 | 9.49 | 18,209 | 1.53 | 1.53 | 1.53 | 0.98 | 25 | ||||||||||||||||||||||||||||||||||||||||
2011 | 10.54 | (0.03 | ) | (0.77 | ) | (0.80 | ) | (0.04 | ) | (0.75 | ) | – | (0.79 | ) | – | 8.95 | (7.54 | ) | 14,079 | 1.54 | 1.54 | 1.54 | (0.33 | ) | 35 | |||||||||||||||||||||||||||||||||||
2010 | 8.46 | (0.00 | ) | 2.10 | 2.10 | (0.02 | ) | – | – | (0.02 | ) | – | 10.54 | 24.82 | 13,195 | 1.50 | 1.50 | 1.50 | 0.01 | 35 | ||||||||||||||||||||||||||||||||||||||||
Royce Value Plus Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 17.03 | $ | (0.07 | ) | $ | 0.68 | $ | 0.61 | $ | – | $ | (3.28 | ) | $ | – | $ | (3.28 | ) | $ | – | $ | 14.36 | 4.04 | % | $ | 295,412 | 1.33 | % | 1.33 | % | 1.33 | % | (0.40 | )% | 52 | % | |||||||||||||||||||||||
2013 | 13.90 | (0.09 | ) | 4.57 | 4.48 | (0.00 | ) | (1.35 | ) | – | (1.35 | ) | – | 17.03 | 32.59 | 244,269 | 1.37 | 1.37 | 1.37 | (0.59 | ) | 45 | ||||||||||||||||||||||||||||||||||||||
2012 | 12.04 | (0.02 | ) | 1.88 | 1.86 | – | – | – | – | – | 13.90 | 15.45 | 228,016 | 1.27 | 1.27 | 1.27 | (0.14 | ) | 32 | |||||||||||||||||||||||||||||||||||||||||
2011 | 13.52 | (0.06 | ) | (1.27 | ) | (1.33 | ) | (0.15 | ) | – | – | (0.15 | ) | – | 12.04 | (9.79 | ) | 298,073 | 1.13 | 1.13 | 1.13 | (0.42 | ) | 49 | ||||||||||||||||||||||||||||||||||||
2010 | 11.31 | (0.02 | ) | 2.31 | 2.29 | (0.08 | ) | – | – | (0.08 | ) | – | 13.52 | 20.25 | 305,161 | 1.08 | 1.08 | 1.08 | (0.14 | ) | 48 | |||||||||||||||||||||||||||||||||||||||
Royce Value Plus Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 16.93 | $ | (0.09 | ) | $ | 0.67 | $ | 0.58 | $ | – | $ | (3.28 | ) | $ | – | $ | (3.28 | ) | $ | – | $ | 14.23 | 3.89 | % | $ | 572,899 | 1.44 | % | 1.44 | % | 1.42 | % | (0.51 | )% | 52 | % | |||||||||||||||||||||||
2013 | 13.83 | (0.11 | ) | 4.56 | 4.45 | – | (1.35 | ) | – | (1.35 | ) | – | 16.93 | 32.52 | 835,379 | 1.48 | 1.48 | 1.46 | (0.69 | ) | 45 | |||||||||||||||||||||||||||||||||||||||
2012 | 12.00 | (0.04 | ) | 1.87 | 1.83 | – | – | – | – | – | 13.83 | 15.25 | 966,735 | 1.45 | 1.45 | 1.44 | (0.33 | ) | 32 | |||||||||||||||||||||||||||||||||||||||||
2011 | 13.42 | (0.08 | ) | (1.26 | ) | (1.34) | (0.08 | ) | – | – | (0.08 | ) | – | 12.00 | (9.98 | ) | 1,417,973 | 1.44 | 1.44 | 1.42 | (0.74 | ) | 49 | |||||||||||||||||||||||||||||||||||||
2010 | 11.24 | (0.06 | ) | 2.27 | 2.21 | (0.03 | ) | – | – | (0.03 | ) | – | 13.42 | 19.70 | 2,454,325 | 1.44 | 1.44 | 1.42 | (0.53 | ) | 48 | |||||||||||||||||||||||||||||||||||||||
Royce Value Plus Fund–Consultant Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 15.99 | $ | (0.22 | ) | $ | 0.63 | $ | 0.41 | $ | – | $ | (3.28 | ) | $ | – | $ | (3.28 | ) | $ | – | $ | 13.12 | 3.05 | % | $ | 17,158 | 2.29 | % | 2.29 | % | 2.29 | % | (1.37 | )% | 52 | % | |||||||||||||||||||||||
2013 | 13.24 | (0.24 | ) | 4.34 | 4.10 | – | (1.35 | ) | – | (1.35 | ) | – | 15.99 | 31.31 | 22,614 | 2.36 | 2.36 | 2.36 | (1.58 | ) | 45 | |||||||||||||||||||||||||||||||||||||||
2012 | 11.60 | (0.15 | ) | 1.79 | 1.64 | – | – | – | – | – | 13.24 | 14.14 | 19,618 | 2.37 | 2.37 | 2.37 | (1.21 | ) | 32 | |||||||||||||||||||||||||||||||||||||||||
2011 | 12.99 | (0.19 | ) | (1.20 | ) | (1.39 | ) | – | – | – | – | – | 11.60 | (10.70 | ) | 20,245 | 2.19 | 2.19 | 2.19 | (1.50 | ) | 49 | ||||||||||||||||||||||||||||||||||||||
2010 | 10.93 | (0.14 | ) | 2.20 | 2.06 | – | – | – | – | – | 12.99 | 18.85 | 30,279 | 2.16 | 2.16 | 2.16 | (1.26 | ) | 48 | |||||||||||||||||||||||||||||||||||||||||
Royce Value Plus Fund–Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 17.09 | $ | (0.03 | ) | $ | 0.68 | $ | 0.65 | $ | – | $ | (3.28 | ) | $ | – | $ | (3.28 | ) | $ | – | $ | 14.46 | 4.26 | % | $ | 38,718 | 1.06 | % | 1.06 | % | 1.06 | % | (0.16 | )% | 52 | % | |||||||||||||||||||||||
2013 | 13.94 | (0.03 | ) | 4.57 | 4.54 | (0.04 | ) | (1.35 | ) | – | (1.39 | ) | – | 17.09 | 32.99 | 142,923 | 1.07 | 1.07 | 1.07 | (0.30 | ) | 45 | ||||||||||||||||||||||||||||||||||||||
2012 | 12.05 | 0.01 | 1.88 | 1.89 | – | – | – | – | – | 13.94 | 15.68 | 216,572 | 1.06 | 1.06 | 1.06 | 0.08 | 32 | |||||||||||||||||||||||||||||||||||||||||||
2011 | 13.52 | (0.01 | ) | (1.30 | ) | (1.31 | ) | (0.16 | ) | – | – | (0.16 | ) | – | 12.05 | (9.70 | ) | 261,425 | 1.05 | 1.05 | 1.05 | (0.36 | ) | 49 | ||||||||||||||||||||||||||||||||||||
2010 | 11.31 | (0.01 | ) | 2.30 | 2.29 | (0.08 | ) | – | – | (0.08 | ) | – | 13.52 | 20.25 | 425,911 | 1.04 | 1.04 | 1.04 | (0.12 | ) | 48 | |||||||||||||||||||||||||||||||||||||||
Royce Value Plus Fund–R Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 16.43 | $ | (0.15 | ) | $ | 0.64 | $ | 0.49 | $ | – | $ | (3.28 | ) | $ | – | $ | (3.28 | ) | $ | – | $ | 13.64 | 3.45 | % | $ | 1,360 | 2.35 | % | 2.35 | % | 1.84 | % | (0.93 | )% | 52 | % | |||||||||||||||||||||||
2013 | 13.51 | (0.16 | ) | 4.43 | 4.27 | – | (1.35 | ) | – | (1.35 | ) | – | 16.43 | 31.95 | 1,605 | 2.41 | 2.41 | 1.84 | (1.06 | ) | 45 | |||||||||||||||||||||||||||||||||||||||
2012 | 11.77 | (0.09 | ) | 1.83 | 1.74 | – | – | – | – | – | 13.51 | 14.78 | 1,221 | 2.35 | 2.35 | 1.84 | (0.66 | ) | 32 | |||||||||||||||||||||||||||||||||||||||||
2011 | 13.24 | (0.15 | ) | (1.23 | ) | (1.38 | ) | (0.09 | ) | – | – | (0.09 | ) | – | 11.77 | (10.40 | ) | 1,079 | 2.45 | 2.45 | 1.84 | (1.12 | ) | 49 | ||||||||||||||||||||||||||||||||||||
2010 | 11.13 | (0.11 | ) | 2.26 | 2.15 | (0.04 | ) | – | – | (0.04 | ) | – | 13.24 | 19.34 | 942 | 2.75 | 2.75 | 1.84 | (0.90 | ) | 48 | |||||||||||||||||||||||||||||||||||||||
96 | The Royce Funds 2014 Annual 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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce Value Plus Fund–K Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 11.96 | $ | (0.08 | ) | $ | 0.45 | $ | 0.37 | $ | – | $ | (3.28 | ) | $ | – | $ | (3.28 | ) | $ | – | $ | 9.05 | 3.75 | % | $ | 497 | 3.63 | % | 3.63 | % | 1.59 | % | (0.67 | )% | 52 | % | |||||||||||||||||||||||
2013 | 10.10 | (0.10 | ) | 3.31 | 3.21 | (0.00 | ) | (1.35 | ) | – | (1.35 | ) | – | 11.96 | 32.31 | 968 | 2.62 | 2.62 | 1.59 | (0.82 | ) | 45 | ||||||||||||||||||||||||||||||||||||||
2012 | 8.78 | (0.04 | ) | 1.36 | 1.32 | – | – | – | – | – | 10.10 | 15.03 | 486 | 2.96 | 2.96 | 1.59 | (0.45 | ) | 32 | |||||||||||||||||||||||||||||||||||||||||
2011 | 9.77 | (0.08 | ) | (0.91 | ) | (0.99 | ) | – | – | – | – | – | 8.78 | (10.13 | ) | 501 | 1.86 | 1.86 | 1.59 | (0.86 | ) | 49 | ||||||||||||||||||||||||||||||||||||||
2010 | 8.22 | (0.06 | ) | 1.67 | 1.61 | (0.06 | ) | – | – | (0.06 | ) | – | 9.77 | 19.55 | 1,851 | 1.88 | 1.88 | 1.59 | (0.67 | ) | 48 | |||||||||||||||||||||||||||||||||||||||
Royce 100 Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.11 | $ | (0.00 | ) | $ | (0.32 | ) | $ | (0.32 | ) | $ | – | $ | (1.05 | ) | $ | – | $ | (1.05 | ) | $ | – | $ | 8.74 | (2.95 | )% | $ | 68,898 | 1.22 | % | 1.22 | % | 1.22 | % | (0.03 | )% | 39 | % | |||||||||||||||||||||
2013 | 8.85 | (0.00 | ) | 2.71 | 2.71 | (0.03 | ) | (1.42 | ) | – | (1.45 | ) | – | 10.11 | 31.24 | 60,156 | 1.20 | 1.20 | 1.20 | (0.07 | ) | 31 | ||||||||||||||||||||||||||||||||||||||
2012 | 8.74 | 0.12 | 0.88 | 1.00 | (0.15 | ) | (0.74 | ) | – | (0.89 | ) | – | 8.85 | 11.78 | 68,395 | 1.19 | 1.19 | 1.19 | 1.31 | 13 | ||||||||||||||||||||||||||||||||||||||||
2011 | 9.82 | (0.03 | ) | (0.60 | ) | (0.63 | ) | (0.00 | ) | (0.45 | ) | – | (0.45 | ) | – | 8.74 | (6.31 | ) | 63,012 | 1.17 | 1.17 | 1.17 | (0.27 | ) | 27 | |||||||||||||||||||||||||||||||||||
2010 | 7.94 | 0.03 | 1.96 | 1.99 | – | (0.11 | ) | – | (0.11 | ) | – | 9.82 | 25.06 | 66,011 | 1.17 | 1.17 | 1.17 | 0.33 | 27 | |||||||||||||||||||||||||||||||||||||||||
Royce 100 Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.05 | $ | (0.04 | ) | $ | (0.31 | ) | $ | (0.35 | ) | $ | – | $ | (1.05 | ) | $ | – | $ | (1.05 | ) | $ | – | $ | 8.65 | (3.26 | )% | $ | 149,736 | 1.52 | % | 1.52 | % | 1.50 | % | (0.39 | )% | 39 | % | |||||||||||||||||||||
2013 | 8.81 | (0.04 | ) | 2.70 | 2.66 | (0.00 | ) | (1.42 | ) | – | (1.42 | ) | – | 10.05 | 30.85 | 231,879 | 1.50 | 1.50 | 1.48 | (0.36 | ) | 31 | ||||||||||||||||||||||||||||||||||||||
2012 | 8.67 | 0.11 | 0.86 | 0.97 | (0.09 | ) | (0.74 | ) | – | (0.83 | ) | – | 8.81 | 11.52 | 220,674 | 1.46 | 1.46 | 1.42 | 1.03 | 13 | ||||||||||||||||||||||||||||||||||||||||
2011 | 9.76 | (0.05 | ) | (0.59 | ) | (0.64 | ) | – | (0.45 | ) | – | (0.45 | ) | – | 8.67 | (6.52 | ) | 310,825 | 1.47 | 1.47 | 1.42 | (0.53 | ) | 27 | ||||||||||||||||||||||||||||||||||||
2010 | 7.91 | 0.00 | 1.96 | 1.96 | – | (0.11 | ) | – | (0.11 | ) | – | 9.76 | 24.77 | 366,184 | 1.50 | 1.50 | 1.46 | 0.03 | 27 | |||||||||||||||||||||||||||||||||||||||||
Royce 100 Fund–R Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 12.67 | $ | (0.09 | ) | $ | (0.39 | ) | $ | (0.48 | ) | $ | – | $ | (1.05 | ) | $ | – | $ | (1.05 | ) | $ | – | $ | 11.14 | (3.61 | )% | $ | 1,983 | 2.23 | % | 2.23 | % | 1.84 | % | (0.73 | )% | 39 | % | |||||||||||||||||||||
2013 | 10.84 | (0.09 | ) | 3.34 | 3.25 | – | (1.42 | ) | – | (1.42 | ) | – | 12.67 | 30.45 | 2,807 | 2.28 | 2.28 | 1.84 | (0.72 | ) | 31 | |||||||||||||||||||||||||||||||||||||||
2012 | 10.46 | 0.05 | 1.07 | 1.12 | – | (0.74 | ) | – | (0.74 | ) | – | 10.84 | 10.95 | 2,554 | 2.57 | 2.57 | 1.84 | 0.46 | 13 | |||||||||||||||||||||||||||||||||||||||||
2011 | 11.72 | (0.10 | ) | (0.71 | ) | (0.81 | ) | – | (0.45 | ) | – | (0.45 | ) | – | 10.46 | (6.88 | ) | 3,469 | 2.70 | 2.69 | 1.84 | (0.88 | ) | 27 | ||||||||||||||||||||||||||||||||||||
2010 | 9.52 | (0.03 | ) | 2.34 | 2.31 | – | (0.11 | ) | – | (0.11 | ) | – | 11.72 | 24.26 | 1,358 | 2.22 | 2.21 | 1.84 | (0.29 | ) | 27 | |||||||||||||||||||||||||||||||||||||||
Royce 100 Fund–K Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 12.84 | $ | (0.07 | ) | $ | (0.38 | ) | $ | (0.45 | ) | $ | – | $ | (1.05 | ) | $ | – | $ | (1.05 | ) | $ | – | $ | 11.34 | (3.33 | )% | $ | 672 | 2.98 | % | 2.98 | % | 1.59 | % | (0.53 | )% | 39 | % | |||||||||||||||||||||
2013 | 10.95 | (0.06 | ) | 3.37 | 3.31 | – | (1.42 | ) | – | (1.42 | ) | – | 12.84 | 30.69 | 2,320 | 1.78 | 1.78 | 1.59 | (0.50 | ) | 31 | |||||||||||||||||||||||||||||||||||||||
2012 | 10.56 | 0.11 | 1.06 | 1.17 | (0.04 | ) | (0.74 | ) | – | (0.78 | ) | – | 10.95 | 11.37 | 3,554 | 1.68 | 1.68 | 1.59 | 0.88 | 13 | ||||||||||||||||||||||||||||||||||||||||
2011 | 11.81 | (0.08 | ) | (0.72 | ) | (0.80 | ) | – | (0.45 | ) | – | (0.45 | ) | – | 10.56 | (6.75 | ) | 4,447 | 1.66 | 1.66 | 1.59 | (0.68 | ) | 27 | ||||||||||||||||||||||||||||||||||||
2010 | 9.57 | 0.02 | 2.33 | 2.35 | – | (0.11 | ) | – | (0.11 | ) | – | 11.81 | 24.55 | 2,915 | 1.89 | 1.89 | 1.59 | 0.20 | 27 | |||||||||||||||||||||||||||||||||||||||||
Royce Dividend Value Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 8.90 | $ | 0.11 | $ | (0.29 | ) | $ | (0.18 | ) | $ | (0.10 | ) | $ | (0.50 | ) | $ | – | $ | (0.60 | ) | $ | – | $ | 8.12 | (1.90 | )% | $ | 176,002 | 1.21 | % | 1.21 | % | 1.19 | % | 1.25 | % | 22 | % | |||||||||||||||||||||
2013 | 7.29 | 0.09 | 2.15 | 2.24 | (0.10 | ) | (0.53 | ) | – | (0.63 | ) | – | 8.90 | 31.23 | 211,589 | 1.21 | 1.21 | 1.21 | 1.13 | 36 | ||||||||||||||||||||||||||||||||||||||||
2012 | 6.34 | 0.14 | 0.95 | 1.09 | (0.12 | ) | (0.02 | ) | – | (0.14 | ) | – | 7.29 | 17.26 | 118,820 | 1.19 | 1.19 | 1.19 | 1.99 | 28 | ||||||||||||||||||||||||||||||||||||||||
2011 | 6.80 | 0.07 | (0.37 | ) | (0.30 | ) | (0.07 | ) | (0.09 | ) | – | (0.16 | ) | – | 6.34 | (4.46 | ) | 85,188 | 1.20 | 1.20 | 1.20 | 1.14 | 14 | |||||||||||||||||||||||||||||||||||||
2010 | 5.31 | 0.09 | 1.51 | 1.60 | (0.08 | ) | (0.03 | ) | – | (0.11 | ) | – | 6.80 | 30.46 | 35,626 | 1.38 | 1.38 | 1.24 | 1.56 | 21 | ||||||||||||||||||||||||||||||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 97 |
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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce Dividend Value Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 8.98 | $ | 0.09 | $ | (0.29 | ) | $ | (0.20 | ) | $ | (0.06 | ) | $ | (0.50 | ) | $ | – | $ | (0.56 | ) | $ | – | $ | 8.22 | (2.14 | )% | $ | 295,560 | 1.47 | % | 1.47 | % | 1.44 | % | 0.98 | % | 22 | % | |||||||||||||||||||||
2013 | 7.35 | 0.07 | 2.16 | 2.23 | (0.07 | ) | (0.53 | ) | – | (0.60 | ) | – | 8.98 | 30.74 | 407,599 | 1.48 | 1.48 | 1.46 | 0.87 | 36 | ||||||||||||||||||||||||||||||||||||||||
2012 | 6.38 | 0.12 | 0.95 | 1.07 | (0.08 | ) | (0.02 | ) | – | (0.10 | ) | – | 7.35 | 16.95 | 252,443 | 1.48 | 1.48 | 1.46 | 1.74 | 28 | ||||||||||||||||||||||||||||||||||||||||
2011 | 6.82 | 0.05 | (0.36 | ) | (0.31 | ) | (0.04 | ) | (0.09 | ) | – | (0.13 | ) | – | 6.38 | (4.55 | ) | 201,634 | 1.48 | 1.48 | 1.46 | 0.84 | 14 | |||||||||||||||||||||||||||||||||||||
2010 | 5.33 | 0.08 | 1.51 | 1.59 | (0.07 | ) | (0.03 | ) | – | (0.10 | ) | – | 6.82 | 30.11 | 117,304 | 1.56 | 1.56 | 1.49 | 1.32 | 21 | ||||||||||||||||||||||||||||||||||||||||
Royce Dividend Value Fund–Consultant Classb | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.00 | $ | 0.01 | $ | (0.27 | ) | $ | (0.26 | ) | $ | (0.02 | ) | $ | (0.50 | ) | $ | – | $ | (0.52 | ) | $ | – | $ | 9.22 | (2.43 | )% | 1 | $ | 912 | 9.25 | %2 | 9.25 | %2 | 2.24 | %2 | 0.45 | %2 | 22 | % | ||||||||||||||||||||
Royce Dividend Value Fund–Institutional Classc | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 8.88 | $ | 0.12 | $ | (0.29 | ) | $ | (0.17 | ) | $ | (0.12 | ) | $ | (0.50 | ) | $ | – | $ | (0.62 | ) | $ | – | $ | 8.09 | (1.76 | )% | $ | 40,942 | 1.10 | % | 1.10 | % | 1.04 | % | 1.42 | % | 22 | % | |||||||||||||||||||||
2013 | 7.28 | 0.11 | 2.14 | 2.25 | (0.12 | ) | (0.53 | ) | – | (0.65 | ) | – | 8.88 | 31.46 | 31,236 | 1.11 | 1.11 | 1.04 | 1.29 | 36 | ||||||||||||||||||||||||||||||||||||||||
2012 | 6.80 | 0.08 | 0.50 | 0.58 | (0.08 | ) | (0.02 | ) | – | (0.10 | ) | – | 7.28 | 8.51 | 1 | 23,460 | 1.33 | 2 | 1.33 | 2 | 1.04 | 2 | 3.48 | 2 | 28 | |||||||||||||||||||||||||||||||||||
Royce Global Value Fund–Investment Classd | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.60 | $ | 0.22 | $ | (0.97 | ) | $ | (0.75 | ) | $ | (0.27 | ) | $ | – | $ | – | $ | (0.27 | ) | $ | – | $ | 12.58 | (5.49 | )% | $ | 45,698 | 1.50 | % | 1.50 | % | 1.50 | % | 1.20 | % | 54 | % | ||||||||||||||||||||||
2013 | 12.91 | 0.16 | 0.68 | 0.84 | (0.16 | ) | – | – | (0.16 | ) | 0.01 | 13.60 | 6.59 | 159,366 | 1.49 | 1.49 | 1.49 | 1.08 | 41 | |||||||||||||||||||||||||||||||||||||||||
2012 | 11.74 | 0.14 | 1.19 | 1.33 | (0.16 | ) | – | – | (0.16 | ) | – | 12.91 | 11.37 | 178,319 | 1.47 | 1.47 | 1.44 | 1.16 | 36 | |||||||||||||||||||||||||||||||||||||||||
2011 | 14.54 | 0.13 | (2.82 | ) | (2.69 | ) | (0.12 | ) | – | – | (0.12 | ) | 0.01 | 11.74 | (18.48 | ) | 141,180 | 1.42 | 1.42 | 1.42 | 0.80 | 77 | ||||||||||||||||||||||||||||||||||||||
2010 | 11.02 | (0.06 | ) | 3.68 | 3.62 | (0.10 | ) | – | – | (0.10 | ) | – | 14.54 | 32.88 | 1 | 6,626 | 2.07 | 2 | 2.07 | 2 | 1.44 | 2 | (0.58 | )2 | 42 | |||||||||||||||||||||||||||||||||||
Royce Global Value Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.68 | $ | 0.19 | $ | (0.98 | ) | $ | (0.79 | ) | $ | (0.24 | ) | $ | – | $ | – | $ | (0.24 | ) | $ | – | $ | 12.65 | (5.76 | )% | $ | 29,625 | 1.80 | % | 1.80 | % | 1.69 | % | 1.03 | % | 54 | % | ||||||||||||||||||||||
2013 | 12.98 | 0.15 | 0.66 | 0.81 | (0.11 | ) | – | – | (0.11 | ) | – | 13.68 | 6.28 | 48,244 | 1.83 | 1.83 | 1.69 | 0.84 | 41 | |||||||||||||||||||||||||||||||||||||||||
2012 | 11.77 | 0.12 | 1.18 | 1.30 | (0.09 | ) | – | – | (0.09 | ) | – | 12.98 | 11.03 | 98,274 | 1.80 | 1.80 | 1.69 | 0.88 | 36 | |||||||||||||||||||||||||||||||||||||||||
2011 | 14.56 | 0.07 | (2.80 | ) | (2.73 | ) | (0.07 | ) | – | – | (0.07 | ) | 0.01 | 11.77 | (18.69 | ) | 122,574 | 1.77 | 1.77 | 1.69 | 0.41 | 77 | ||||||||||||||||||||||||||||||||||||||
2010 | 10.79 | (0.03 | ) | 3.87 | 3.84 | (0.08 | ) | – | – | (0.08 | ) | 0.01 | 14.56 | 35.69 | 141,992 | 1.84 | 1.84 | 1.69 | 0.01 | 42 | ||||||||||||||||||||||||||||||||||||||||
Royce Global Value Fund–Consultant Classe | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 13.54 | $ | 0.04 | $ | (0.91 | ) | $ | (0.87 | ) | $ | (0.15 | ) | $ | – | $ | – | $ | (0.15 | ) | $ | – | $ | 12.52 | (6.41 | )% | $ | 20,707 | 2.51 | % | 2.51 | % | 2.44 | % | 0.29 | % | 54 | % | ||||||||||||||||||||||
2013 | 12.88 | 0.01 | 0.70 | 0.71 | (0.05 | ) | – | – | (0.05 | ) | – | 13.54 | 5.50 | 25,663 | 2.53 | 2.53 | 2.44 | 0.11 | 41 | |||||||||||||||||||||||||||||||||||||||||
2012 | 11.71 | 0.02 | 1.17 | 1.19 | (0.02 | ) | – | – | (0.02 | ) | – | 12.88 | 10.13 | 23,383 | 2.55 | 2.55 | 2.44 | 0.16 | 36 | |||||||||||||||||||||||||||||||||||||||||
2011 | 15.66 | (0.09 | ) | (3.80 | ) | (3.89 | ) | (0.06 | ) | – | – | (0.06 | ) | – | 11.71 | (24.82 | )1 | 18,585 | 2.642 | 2.64 | 2 | 2.44 | 2 | (0.77 | )2 | 77 | ||||||||||||||||||||||||||||||||||
Royce Global Value Fund–R Classf | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.15 | $ | 0.06 | $ | (0.67 | ) | $ | (0.61 | ) | $ | (0.24 | ) | $ | – | $ | – | $ | (0.24 | ) | $ | – | $ | 9.30 | (6.01 | )% | $ | 116 | 8.36 | % | 8.36 | % | 1.99 | % | 0.75 | % | 54 | % | ||||||||||||||||||||||
2013 | 9.69 | 0.05 | 0.53 | 0.58 | (0.12 | ) | – | – | (0.12 | ) | – | 10.15 | 5.98 | 100 | 9.50 | 9.50 | 1.99 | 0.48 | 41 | |||||||||||||||||||||||||||||||||||||||||
2012 | 10.00 | 0.02 | (0.21 | ) | (0.19 | ) | (0.12 | ) | – | – | (0.12 | ) | – | 9.69 | (1.90 | )1 | 80 | 19.19 | 2 | 19.19 | 2 | 1.99 | 2 | 0.70 | 2 | 36 | ||||||||||||||||||||||||||||||||||
Royce Global Value Fund–K Classf | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.15 | $ | 0.10 | $ | (0.70 | ) | $ | (0.60 | ) | $ | (0.25 | ) | $ | – | $ | – | $ | (0.25 | ) | $ | – | $ | 9.30 | (5.84 | )% | $ | 23 | 76.41 | % | 76.41 | % | 1.74 | % | 0.88 | % | 54 | % | ||||||||||||||||||||||
2013 | 9.69 | 0.08 | 0.52 | 0.60 | (0.14 | ) | – | – | (0.14 | ) | – | 10.15 | 6.24 | 44 | 19.21 | 19.21 | 1.74 | 0.80 | 41 | |||||||||||||||||||||||||||||||||||||||||
2012 | 10.00 | 0.09 | (0.27 | ) | (0.18 | ) | (0.13 | ) | – | – | (0.13 | ) | – | 9.69 | (1.74 | )1 | 41 | 29.99 | 2 | 29.98 | 2 | 1.74 | 2 | 1.20 | 2 | 36 | ||||||||||||||||||||||||||||||||||
98 | The Royce Funds 2014 Annual 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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce International Smaller-Companies Fund–Investment Classg | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.00 | $ | 0.14 | $ | (0.91 | ) | $ | (0.77 | ) | $ | (0.26 | ) | $ | (1.07 | ) | $ | – | $ | (1.33 | ) | $ | 0.01 | $ | 7.91 | (7.31 | )%1 | $ | 1,119 | 5.53 | %2 | 5.53 | %2 | 1.44 | %2 | 1.45 | %2 | 78 | % | |||||||||||||||||||||
Royce International Smaller-Companies Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 11.99 | $ | 0.21 | $ | (1.11 | ) | $ | (0.90 | ) | $ | (0.22 | ) | $ | (1.07 | ) | $ | – | $ | (1.29 | ) | $ | – | $ | 9.80 | (7.29 | )% | $ | 29,610 | 1.99 | % | 1.99 | % | 1.69 | % | 1.20 | % | 78 | % | |||||||||||||||||||||
2013 | 11.28 | 0.12 | 1.30 | 1.42 | (0.15 | ) | (0.56 | ) | – | (0.71 | ) | – | 11.99 | 12.73 | 38,059 | 2.07 | 2.07 | 1.69 | 1.13 | 64 | ||||||||||||||||||||||||||||||||||||||||
2012 | 9.58 | 0.14 | 1.70 | 1.84 | (0.15 | ) | – | – | (0.15 | ) | 0.01 | 11.28 | 19.39 | 26,371 | 2.13 | 2.13 | 1.69 | 1.29 | 44 | |||||||||||||||||||||||||||||||||||||||||
2011 | 12.85 | 0.10 | (2.51 | ) | (2.41 | ) | (0.08 | ) | (0.78 | ) | (0.01) | (0.87 | ) | 0.01 | 9.58 | (18.75 | ) | 20,103 | 2.15 | 2.15 | 1.69 | 0.88 | 38 | |||||||||||||||||||||||||||||||||||||
2010 | 10.49 | 0.03 | 2.72 | 2.75 | (0.10 | ) | (0.30 | ) | – | (0.40 | ) | 0.01 | 12.85 | 26.45 | 18,297 | 2.35 | 2.35 | 1.69 | 0.45 | 55 | ||||||||||||||||||||||||||||||||||||||||
Royce International Smaller-Companies Fund–Institutional Classh | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.00 | $ | 0.17 | $ | (0.72 | ) | $ | (0.55 | ) | $ | (0.26 | ) | $ | (1.07 | ) | $ | – | $ | (1.33 | ) | $ | – | $ | 8.12 | (5.22 | )%1 | $ | 2,353 | 2.63 | %2 | 2.63 | %2 | 1.44 | %2 | 1.58 | %2 | 78 | % | |||||||||||||||||||||
Royce Special Equity Multi-Cap Fund–Investment Classi | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.92 | $ | 0.10 | $ | 1.30 | $ | 1.40 | $ | (0.11 | ) | $ | (0.66 | ) | $ | – | $ | (0.77 | ) | $ | – | $ | 15.55 | 9.53 | % | $ | 123,545 | 0.97 | % | 0.97 | % | 0.96 | % | 0.95 | % | 39 | % | |||||||||||||||||||||||
2013 | 11.64 | 0.12 | 4.11 | 4.23 | (0.12 | ) | (0.83 | ) | – | (0.95 | ) | – | 14.92 | 36.62 | 62,387 | 1.16 | 1.16 | 1.15 | 0.93 | 44 | ||||||||||||||||||||||||||||||||||||||||
2012 | 11.54 | 0.12 | 0.22 | 0.34 | (0.14 | ) | (0.10 | ) | – | (0.24 | ) | – | 11.64 | 3.00 | 1 | 34,375 | 1.19 | 2 | 1.19 | 2 | 1.16 | 2 | 1.55 | 2 | 14 | |||||||||||||||||||||||||||||||||||
Royce Special Equity Multi-Cap Fund–Service Classj | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.96 | $ | 0.10 | $ | 1.27 | $ | 1.37 | $ | (0.07 | ) | $ | (0.66 | ) | $ | – | $ | (0.73 | ) | $ | – | $ | 15.60 | 9.28 | % | $ | 94,878 | 1.34 | % | 1.34 | % | 1.24 | % | 0.66 | % | 39 | % | |||||||||||||||||||||||
2013 | 11.68 | 0.09 | 4.12 | 4.21 | (0.10 | ) | (0.83 | ) | – | (0.93 | ) | – | 14.96 | 36.26 | 78,233 | 1.61 | 1.61 | 1.38 | 0.69 | 44 | ||||||||||||||||||||||||||||||||||||||||
2012 | 10.64 | 0.13 | 1.10 | 1.23 | (0.09 | ) | (0.10 | ) | – | (0.19 | ) | – | 11.68 | 11.62 | 43,690 | 1.51 | 1.51 | 1.36 | 1.15 | 14 | ||||||||||||||||||||||||||||||||||||||||
2011 | 10.00 | 0.06 | 0.65 | 0.71 | (0.06 | ) | (0.02 | ) | – | (0.08 | ) | 0.01 | 10.64 | 7.20 | 1 | 36,811 | 1.97 | 2 | 1.97 | 2 | 1.39 | 2 | 1.45 | 2 | 5 | |||||||||||||||||||||||||||||||||||
Royce Special Equity Multi-Cap Fund–Consultant Classh | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.00 | $ | (0.04 | ) | $ | 1.48 | $ | 1.44 | $ | (0.06 | ) | $ | (0.66 | ) | $ | – | $ | (0.72 | ) | $ | – | $ | 10.72 | 14.57 | %1 | $ | 9,223 | 2.54 | %2 | 2.54 | %2 | 1.99 | %2 | (0.05 | )%2 | 39 | % | ||||||||||||||||||||||
Royce Special Equity Multi-Cap Fund–Institutional Classk | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.92 | $ | 0.12 | $ | 1.30 | $ | 1.42 | $ | (0.12 | ) | $ | (0.66 | ) | $ | – | $ | (0.78 | ) | $ | – | $ | 15.56 | 9.64 | % | $ | 75,941 | 0.93 | % | 0.93 | % | 0.89 | % | 1.01 | % | 39 | % | |||||||||||||||||||||||
2013 | 11.64 | 0.15 | 4.10 | 4.25 | (0.14 | ) | (0.83 | ) | – | (0.97 | ) | – | 14.92 | 36.73 | 48,063 | 1.10 | 1.10 | 1.04 | 1.02 | 44 | ||||||||||||||||||||||||||||||||||||||||
2012 | 11.83 | 0.10 | (0.03 | ) | 0.07 | (0.16 | ) | (0.10 | ) | – | (0.26 | ) | – | 11.64 | 0.61 | 1 | 30,905 | 1.21 | 2 | 1.21 | 2 | 1.04 | 2 | 1.76 | 2 | 14 | ||||||||||||||||||||||||||||||||||
1 | Not annualized | |
2 | Annualized | |
a | The Class commenced operations on June 6, 2011. | |
b | The Class commenced operations on March 21, 2014. | |
c | The Class commenced operations on September 4, 2012. | |
d | The Class commenced operations on September 1, 2010. | |
e | The Class commenced operations on May 2, 2011. | |
f | The Class commenced operations on March 21, 2012. | |
g | The Class commenced operations on January 22, 2014. | |
h | The Class commenced operations on January 27, 2014. | |
i | The Class commenced operations on March 1, 2012. | |
j | The Class commenced operations on January 3, 2011. | |
k | The Class commenced operations on April 18, 2012. |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 99 |
Notes to Financial Statements
Royce International Smaller-Companies Fund 11%
Level 1 | – | quoted prices in active markets for identical securities. | ||
Level 2 | – | other significant observable inputs (including quoted prices for similar securities, foreign securities that may be fair valued and repurchase agreements). The table below includes all Level 2 securities. Level 2 securities with values based on quoted prices for similar securities are noted in the Schedules of Investments. | ||
Level 3 | – | significant unobservable inputs (including last trade price before trading was suspended, or at a discount thereto for lack of marketability or otherwise, market price information regarding other securities, information received from the company and/or published documents, including SEC filings and financial statements, or other publicly available information). |
LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | ||||||||||
Royce Pennsylvania Mutual Fund | |||||||||||||
Common Stocks | $5,557,087,646 | $109,217,359 | $– | $5,666,305,005 | |||||||||
Cash Equivalents | 62,985,137 | 109,019,000 | – | 172,004,137 | |||||||||
100 | The Royce Funds 2014 Annual Report to Shareholders
VALUATION OF INVESTMENTS (continued):
LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | ||||||||||||||
Royce Micro-Cap Fund | |||||||||||||||||
Common Stocks | $ | 484,994,602 | $ | 22,090,409 | $1,049,127 | $ | 508,134,138 | ||||||||||
Cash Equivalents | 22,089,668 | 20,212,000 | – | 42,301,668 | |||||||||||||
Royce Premier Fund | |||||||||||||||||
Common Stocks | 5,147,213,992 | 140,151,334 | – | 5,287,365,326 | |||||||||||||
Cash Equivalents | 84,024,012 | 185,743,000 | – | 269,767,012 | |||||||||||||
Royce Low-Priced Stock Fund | |||||||||||||||||
Common Stocks | 585,382,571 | 53,019,618 | – | 638,402,189 | |||||||||||||
Cash Equivalents | 20,346,322 | 35,516,000 | – | 55,862,322 | |||||||||||||
Royce Total Return Fund | |||||||||||||||||
Common Stocks | 4,337,588,529 | 184,354,471 | – | 4,521,943,000 | |||||||||||||
Cash Equivalents | 5,893,087 | 109,237,000 | – | 115,130,087 | |||||||||||||
Royce Heritage Fund | |||||||||||||||||
Common Stocks | 296,248,609 | 50,612,503 | – | 346,861,112 | |||||||||||||
Cash Equivalents | 964,385 | 12,085,000 | – | 13,049,385 | |||||||||||||
Royce Opportunity Fund | |||||||||||||||||
Common Stocks | 2,152,130,545 | 172,278 | – | 2,152,302,823 | |||||||||||||
Cash Equivalents | 164,589,994 | 164,768,000 | – | 329,357,994 | |||||||||||||
Royce Special Equity Fund | |||||||||||||||||
Common Stocks | 2,726,799,393 | 4,558,225 | – | 2,731,357,618 | |||||||||||||
Cash Equivalents | – | 169,503,000 | – | 169,503,000 | |||||||||||||
Royce Value Fund | |||||||||||||||||
Common Stocks | 869,365,770 | – | – | 869,365,770 | |||||||||||||
Cash Equivalents | – | 16,293,000 | – | 16,293,000 | |||||||||||||
Royce Value Plus Fund | |||||||||||||||||
Common Stocks | 856,108,736 | 51,953,387 | – | 908,062,123 | |||||||||||||
Cash Equivalents | 104,586,929 | 22,541,000 | – | 127,127,929 | |||||||||||||
Royce 100 Fund | |||||||||||||||||
Common Stocks | 207,740,774 | 2,889,533 | – | 210,630,307 | |||||||||||||
Cash Equivalents | – | 9,261,000 | – | 9,261,000 | |||||||||||||
Royce Dividend Value Fund | |||||||||||||||||
Common Stocks | 445,959,351 | 67,155,443 | – | 513,114,794 | |||||||||||||
Cash Equivalents | 753,190 | 1,561,000 | – | 2,314,190 | |||||||||||||
Royce Global Value Fund | |||||||||||||||||
Common Stocks | 33,503,153 | 55,600,833 | – | 89,103,986 | |||||||||||||
Cash Equivalents | – | 8,407,000 | – | 8,407,000 | |||||||||||||
Royce International Smaller-Companies Fund | |||||||||||||||||
Common Stocks | 1,386,605 | 31,175,445 | – | 32,562,050 | |||||||||||||
Cash Equivalents | – | 1,860,000 | – | 1,860,000 | |||||||||||||
Royce Special Equity Multi-Cap Fund | |||||||||||||||||
Common Stocks | 277,484,211 | – | – | 277,484,211 | |||||||||||||
Cash Equivalents | – | 28,523,000 | – | 28,523,000 | |||||||||||||
TRANSFERS FROM | TRANSFERS FROM | |||||||||
LEVEL 1 TO LEVEL 2 | LEVEL 1 TO LEVEL 2 | |||||||||
Royce Pennsylvania Mutual Fund | $ 74,235,654 | Royce Heritage Fund | $ 43,471,233 | |||||||
Royce Micro-Cap Fund | 20,980,619 | Royce Value Plus Fund | 32,975,227 | |||||||
Royce Premier Fund | 93,265,167 | Royce Dividend Value Fund | 60,871,159 | |||||||
Royce Low-Priced Stock Fund | 49,541,592 | Royce Global Value Fund | 28,726,001 | |||||||
Royce Total Return Fund | 120,427,853 | Royce International Smaller-Companies Fund | 23,326,705 | |||||||
The Royce Funds 2014 Annual Report to Shareholders | 101
Notes to Financial Statements (continued)
VALUATION OF INVESTMENTS (continued):
BALANCE AS OF 12/31/13 | UNREALIZED GAIN (LOSS)1 | BALANCE AS OF 12/31/14 | ||||||||
Royce Micro-Cap Fund | ||||||||||
Common Stocks | $411,368 | $637,759 | $1,049,127 | |||||||
The following table summarizes the valuation techniques used and unobservable inputs approved by the Valuation Committee to determine the fair value of certain, material Level 3 investments. The table does not include Level 3 investments with values derived utilizing prices from prior transactions or third party pricing information with adjustments (e.g. broker quotes, pricing services, net asset values).
FAIR VALUE AT | IMPACT TO VALUATION FROM | |||||||||||||||
12/31/14 | VALUATION TECHNIQUE(S) | UNOBSERVABLE INPUT(S) | RANGE AVERAGE | AN INCREASE IN INPUT1 | ||||||||||||
Royce Micro-Cap Fund | ||||||||||||||||
Common Stocks | $1,049,127 | Market Approach | Liquidity Discount | 30% | Decrease | |||||||||||
GROSS AMOUNT OF ASSETS AND | |||||||||||||
LIABILITIES IN THE STATEMENTS OF | |||||||||||||
ASSETS AND LIABILITIES1 | COLLATERAL RECEIVED AND PLEDGED | NET AMOUNT | |||||||||||
Royce Pennsylvania Mutual Fund | |||||||||||||
Securities on Loan/Collateral on Loaned Securities | $ 62,985,137 | $ (62,985,137) | $ – | ||||||||||
Royce Micro-Cap Fund | |||||||||||||
Securities on Loan/Collateral on Loaned Securities | 22,089,668 | (22,089,668) | – | ||||||||||
Royce Premier Fund | |||||||||||||
Securities on Loan/Collateral on Loaned Securities | 84,024,012 | (84,024,012) | – | ||||||||||
Royce Low-Priced Stock Fund | |||||||||||||
Securities on Loan/Collateral on Loaned Securities | 20,346,322 | (20,346,322) | – | ||||||||||
102 | The Royce Funds 2014 Annual Report to Shareholders
SECURITIES LENDING (continued):
GROSS AMOUNT OF ASSETS AND | ||||||||||||||||
LIABILITIES IN THE STATEMENTS OF | ||||||||||||||||
ASSETS AND LIABILITIES1 | COLLATERAL RECEIVED AND PLEDGED | NET AMOUNT | ||||||||||||||
Royce Total Return Fund | ||||||||||||||||
Securities on Loan/Collateral on Loaned Securities | $ 5,893,087 | $ (5,893,087) | – | |||||||||||||
Royce Heritage Fund | ||||||||||||||||
Securities on Loan/Collateral on Loaned Securities | 964,385 | (964,385) | – | |||||||||||||
Royce Opportunity Fund | ||||||||||||||||
Securities on Loan/Collateral on Loaned Securities | 164,589,994 | (164,589,994) | – | |||||||||||||
Royce Value Plus Fund | ||||||||||||||||
Securities on Loan/Collateral on Loaned Securities | 104,586,929 | (104,586,929) | – | |||||||||||||
Royce Dividend Value Fund | ||||||||||||||||
Securities on Loan/Collateral on Loaned Securities | 753,190 | (753,190) | – | |||||||||||||
1Absent an event of default, assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities. |
The Royce Funds 2014 Annual Report to Shareholders | 103
Notes to Financial Statements(continued) |
Capital Share Transactions (in dollars): |
SHARES ISSUED FOR REINVESTMENT OF | NET INCREASE (DECREASE) FROM | |||||||||||||||||||||||||||||||
SHARES SOLD | DISTRIBUTIONS | SHARES REDEEMED | CAPITAL SHARE TRANSACTIONS | |||||||||||||||||||||||||||||
Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | |||||||||||||||||||||||||
12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | |||||||||||||||||||||||||
Royce Pennsylvania Mutual Fund | ||||||||||||||||||||||||||||||||
Investment Class | $506,526,617 | $605,005,254 | $370,880,440 | $240,617,073 | $(1,567,279,750 | ) | $(1,199,534,491 | ) | $(689,872,693 | ) | $(353,912,164 | ) | ||||||||||||||||||||
Service Class | 99,828,552 | 158,543,673 | 28,968,181 | 31,528,901 | (328,139,978 | ) | (205,430,442 | ) | (199,343,245 | ) | (15,357,868 | ) | ||||||||||||||||||||
Consultant Class | 25,211,845 | 35,995,184 | 76,735,320 | 44,509,769 | (116,343,597 | ) | (110,412,807 | ) | (14,396,432 | ) | (29,907,854 | ) | ||||||||||||||||||||
Institutional Class | 343,125,813 | 227,429,558 | 89,605,015 | 42,182,078 | (351,584,299 | ) | (88,116,686 | ) | 81,146,529 | 181,494,950 | ||||||||||||||||||||||
R Class | 8,053,228 | 12,175,418 | 4,003,806 | 2,317,814 | (14,849,573 | ) | (12,674,989 | ) | (2,792,539 | ) | 1,818,243 | |||||||||||||||||||||
K Class | 2,508,960 | 3,353,854 | 1,293,444 | 615,573 | (3,363,284 | ) | (3,487,416 | ) | 439,120 | 482,011 | ||||||||||||||||||||||
Royce Micro-Cap Fund | ||||||||||||||||||||||||||||||||
Investment Class | 33,996,859 | 98,858,542 | 34,181,364 | 43,274,805 | (239,040,752 | ) | (314,723,445 | ) | (170,862,529 | ) | (172,590,098 | ) | ||||||||||||||||||||
Service Class | 11,050,878 | 24,900,898 | 3,280,443 | 5,561,270 | (48,179,138 | ) | (69,726,173 | ) | (33,847,817 | ) | (39,264,005 | ) | ||||||||||||||||||||
Consultant Class | 2,107,865 | 4,190,480 | 8,255,066 | 8,921,529 | (37,203,785 | ) | (28,337,765 | ) | (26,840,854 | ) | (15,225,756 | ) | ||||||||||||||||||||
Royce Premier Fund | ||||||||||||||||||||||||||||||||
Investment Class | 382,768,920 | 643,271,846 | 342,058,115 | 461,289,856 | (1,272,200,430 | ) | (1,344,940,951 | ) | (547,373,395 | ) | (240,379,249 | ) | ||||||||||||||||||||
Service Class | 37,616,729 | 91,471,655 | 16,483,596 | 46,476,184 | (183,633,439 | ) | (447,736,768 | ) | (129,533,114 | ) | (309,788,929 | ) | ||||||||||||||||||||
Consultant Class | 2,338,877 | 3,234,960 | 5,704,199 | 6,793,623 | (10,578,088 | ) | (11,667,823 | ) | (2,535,012 | ) | (1,639,240 | ) | ||||||||||||||||||||
Institutional Class | 111,264,468 | 171,612,186 | 67,113,888 | 88,971,062 | (505,054,873 | ) | (271,899,788 | ) | (326,676,517 | ) | (11,316,540 | ) | ||||||||||||||||||||
W Class | 48,647,645 | 67,696,518 | 33,267,513 | 41,113,353 | (138,651,861 | ) | (169,817,947 | ) | (56,736,703 | ) | (61,008,076 | ) | ||||||||||||||||||||
R Class | 4,881,491 | 7,171,068 | 2,707,987 | 3,194,633 | (9,729,538 | ) | (10,803,236 | ) | (2,140,060 | ) | (437,535 | ) | ||||||||||||||||||||
K Class | 1,286,179 | 1,843,765 | 1,673,519 | 1,872,975 | (3,485,783 | ) | (5,003,511 | ) | (526,085 | ) | (1,286,771 | ) | ||||||||||||||||||||
Royce Low-Priced Stock Fund | ||||||||||||||||||||||||||||||||
Investment Class | 26,094,517 | 25,018,884 | 13,502,147 | 11,573,545 | (60,873,035 | ) | (207,176,226 | ) | (21,276,371 | ) | (170,583,797 | ) | ||||||||||||||||||||
Service Class | 44,977,684 | 96,303,157 | 155,283,260 | 129,195,821 | (500,094,797 | ) | (1,029,968,862 | ) | (299,833,853 | ) | (804,469,884 | ) | ||||||||||||||||||||
Institutional Class | 17,984,583 | 52,909,521 | 28,211,899 | 65,125,731 | (264,759,956 | ) | (749,374,096 | ) | (218,563,474 | ) | (631,338,844 | ) | ||||||||||||||||||||
R Class | 345,884 | 710,708 | 532,842 | 412,286 | (1,517,342 | ) | (3,837,806 | ) | (638,616 | ) | (2,714,812 | ) | ||||||||||||||||||||
K Class | 311,506 | 1,531,364 | 1,081,444 | 838,644 | (2,087,925 | ) | (4,536,092 | ) | (694,975 | ) | (2,166,084 | ) | ||||||||||||||||||||
Royce Total Return Fund | ||||||||||||||||||||||||||||||||
Investment Class | 362,137,881 | 528,999,533 | 302,662,051 | 304,734,722 | (916,819,335 | ) | (849,880,581 | ) | (252,019,403 | ) | (16,146,326 | ) | ||||||||||||||||||||
Service Class | 64,225,061 | 269,258,191 | 22,994,953 | 44,274,371 | (321,591,822 | ) | (166,019,974 | ) | (234,371,808 | ) | 147,512,588 | |||||||||||||||||||||
Consultant Class | 17,101,346 | 28,057,748 | 32,433,723 | 30,943,470 | (62,537,014 | ) | (54,173,983 | ) | (13,001,945 | ) | 4,827,235 | |||||||||||||||||||||
Institutional Class | 140,092,526 | 215,408,392 | 63,750,942 | 52,099,575 | (193,581,622 | ) | (149,283,730 | ) | 10,261,846 | 118,224,237 | ||||||||||||||||||||||
W Class | 64,397,705 | 74,148,184 | 26,931,314 | 21,587,603 | (51,703,500 | ) | (56,755,936 | ) | 39,625,519 | 38,979,851 | ||||||||||||||||||||||
R Class | 13,541,789 | 21,893,247 | 6,802,388 | 5,827,458 | (21,165,292 | ) | (15,151,842 | ) | (821,115 | ) | 12,568,863 | |||||||||||||||||||||
K Class | 47,764,450 | 107,190,612 | 13,185,125 | 21,610,891 | (152,866,973 | ) | (126,039,047 | ) | (91,917,398 | ) | 2,762,456 | |||||||||||||||||||||
Royce Heritage Fund | ||||||||||||||||||||||||||||||||
Investment Class | 50,189,428 | 66,008,028 | 8,592,153 | 12,527,322 | (6,303,296 | ) | (4,946,365 | ) | 52,478,285 | 73,588,985 | ||||||||||||||||||||||
Service Class | 9,893,864 | 14,757,297 | 8,633,861 | 23,773,697 | (54,969,780 | ) | (43,411,963 | ) | (36,442,055 | ) | (4,880,969 | ) | ||||||||||||||||||||
Consultant Class | 682,067 | 1,263,011 | 844,425 | 2,151,535 | (2,908,579 | ) | (2,515,165 | ) | (1,382,087 | ) | 899,381 | |||||||||||||||||||||
R Class | 627,816 | 1,847,167 | 218,815 | 992,495 | (3,523,203 | ) | (1,268,414 | ) | (2,676,572 | ) | 1,571,248 | |||||||||||||||||||||
K Class | 809,955 | 1,250,136 | 396,754 | 1,055,146 | (1,690,435 | ) | (3,637,243 | ) | (483,726 | ) | (1,331,961 | ) | ||||||||||||||||||||
Royce Opportunity Fund | ||||||||||||||||||||||||||||||||
Investment Class | 193,304,142 | 332,616,686 | 146,112,723 | 109,717,251 | (307,673,836 | ) | (228,261,969 | ) | 31,743,029 | 214,071,968 | ||||||||||||||||||||||
Service Class | 44,181,047 | 143,463,729 | 19,076,365 | 33,163,722 | (94,875,605 | ) | (235,857,849 | ) | (31,618,193 | ) | (59,230,398 | ) | ||||||||||||||||||||
Consultant Class | 6,846,175 | 4,118,375 | 2,726,295 | 1,776,385 | (4,696,671 | ) | (2,557,349 | ) | 4,875,799 | 3,337,411 | ||||||||||||||||||||||
Institutional Class | 141,310,734 | 166,839,476 | 95,518,937 | 73,390,855 | (183,057,913 | ) | (290,133,892 | ) | 53,771,758 | (49,903,561 | ) | |||||||||||||||||||||
R Class | 16,193,270 | 13,143,525 | 4,486,685 | 2,051,002 | (4,927,447 | ) | (1,853,045 | ) | 15,752,508 | 13,341,482 | ||||||||||||||||||||||
K Class | 16,734,919 | 8,593,690 | 3,319,386 | 1,712,998 | (11,407,748 | ) | (4,064,844 | ) | 8,646,557 | 6,241,844 | ||||||||||||||||||||||
Royce Special Equity Fund | ||||||||||||||||||||||||||||||||
Investment Class | 251,091,597 | 493,764,184 | 155,219,704 | 187,724,022 | (782,681,645 | ) | (607,174,950 | ) | (376,370,344 | ) | 74,313,256 | |||||||||||||||||||||
Service Class | 39,990,897 | 80,216,174 | 17,667,281 | 25,988,233 | (136,332,747 | ) | (69,704,292 | ) | (78,674,569 | ) | 36,500,115 | |||||||||||||||||||||
Consultant Class | 3,371,625 | 5,375,063 | 5,815,732 | 6,011,027 | (10,136,790 | ) | (7,598,377 | ) | (949,433 | ) | 3,787,713 | |||||||||||||||||||||
Institutional Class | 71,641,743 | 125,908,328 | 59,595,359 | 56,838,996 | (136,073,092 | ) | (163,427,568 | ) | (4,835,990 | ) | 19,319,756 | |||||||||||||||||||||
Royce Value Fund | ||||||||||||||||||||||||||||||||
Investment Class | 40,123,987 | 39,278,557 | 16,598,054 | 13,139,768 | (94,649,702 | ) | (94,469,427 | ) | (37,927,661 | ) | (42,051,102 | ) | ||||||||||||||||||||
Service Class | 32,791,478 | 57,608,008 | 54,561,485 | 46,173,865 | (227,864,825 | ) | (384,234,842 | ) | (140,511,862 | ) | (280,452,969 | ) | ||||||||||||||||||||
Consultant Class | 3,022,082 | 2,142,085 | 3,337,468 | 2,179,045 | (7,409,588 | ) | (11,234,896 | ) | (1,050,038 | ) | (6,913,766 | ) | ||||||||||||||||||||
Institutional Class | 18,404,265 | 25,750,530 | 24,538,922 | 15,708,560 | (41,423,739 | ) | (60,814,438 | ) | 1,519,448 | (19,355,348 | ) | |||||||||||||||||||||
R Class | 5,066,775 | 8,633,738 | 4,166,100 | 2,587,581 | (11,288,399 | ) | (17,983,761 | ) | (2,055,524 | ) | (6,762,442 | ) | ||||||||||||||||||||
K Class | 2,640,410 | 5,372,313 | 1,486,836 | 1,401,823 | (9,482,843 | ) | (11,489,956 | ) | (5,355,597 | ) | (4,715,820 | ) | ||||||||||||||||||||
104 | The Royce Funds 2014 Annual Report to Shareholders |
Capital Share Transactions (in dollars)(continued): |
SHARES ISSUED FOR REINVESTMENT OF | NET INCREASE (DECREASE) FROM | |||||||||||||||||||||||||||||||
SHARES SOLD | DISTRIBUTIONS | SHARES REDEEMED | CAPITAL SHARE TRANSACTIONS | |||||||||||||||||||||||||||||
Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | |||||||||||||||||||||||||
12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | |||||||||||||||||||||||||
Royce Value Plus Fund | ||||||||||||||||||||||||||||||||
Investment Class | $130,967,883 | $ | 45,014,700 | $ | 46,641,316 | $ | 17,699,284 | $(80,347,855 | ) | $(94,732,454 | ) | $ | 97,261,344 | $ | (32,018,470 | ) | ||||||||||||||||
Service Class | 53,871,837 | 72,297,178 | 95,079,165 | 65,183,044 | (321,309,401 | ) | (464,563,649 | ) | (172,358,399 | ) | (327,083,427 | ) | ||||||||||||||||||||
Consultant Class | 591,354 | 1,097,991 | 3,226,909 | 1,733,762 | (6,267,669 | ) | (3,753,070 | ) | (2,449,406 | ) | (921,317 | ) | ||||||||||||||||||||
Institutional Class | 17,848,303 | 25,026,020 | 6,945,468 | 10,959,037 | (125,205,240 | ) | (152,001,651 | ) | (100,411,469 | ) | (116,016,594 | ) | ||||||||||||||||||||
R Class | 331,566 | 998,626 | 271,992 | 124,721 | (625,234 | ) | (1,021,869 | ) | (21,676 | ) | 101,478 | |||||||||||||||||||||
K Class | 157,920 | 453,654 | 238,115 | 102,901 | (652,811 | ) | (180,247 | ) | (256,776 | ) | 376,308 | |||||||||||||||||||||
Royce 100 Fund | ||||||||||||||||||||||||||||||||
Investment Class | 48,981,013 | 18,939,455 | 6,419,484 | 7,654,869 | (36,418,124 | ) | (44,035,340 | ) | 18,982,373 | (17,441,016 | ) | |||||||||||||||||||||
Service Class | 24,824,949 | 33,984,238 | 13,631,471 | 28,928,569 | (97,680,533 | ) | (83,130,559 | ) | (59,224,113 | ) | (20,217,752 | ) | ||||||||||||||||||||
R Class | 959,574 | 1,077,565 | 168,762 | 287,743 | (1,687,247 | ) | (1,494,820 | ) | (558,911 | ) | (129,512 | ) | ||||||||||||||||||||
K Class | 287,289 | 1,143,767 | 64,074 | 231,871 | (1,861,662 | ) | (3,312,275 | ) | (1,510,299 | ) | (1,936,637 | ) | ||||||||||||||||||||
Royce Dividend Value Fund | ||||||||||||||||||||||||||||||||
Investment Class | 53,534,161 | 95,594,378 | 10,979,129 | 13,847,962 | (83,254,012 | ) | (48,840,808 | ) | (18,740,722 | ) | 60,601,532 | |||||||||||||||||||||
Service Class | 44,423,724 | 133,082,533 | 16,719,515 | 23,778,109 | (144,774,078 | ) | (65,610,178 | ) | (83,630,839 | ) | 91,250,464 | |||||||||||||||||||||
Consultant Class | 965,582 | 47,956 | (29,381 | ) | 984,157 | |||||||||||||||||||||||||||
Institutional Class | 12,840,709 | 2,037,602 | 2,915,622 | 2,161,756 | (2,556,823 | ) | (1,691,088 | ) | 13,199,508 | 2,508,270 | ||||||||||||||||||||||
Royce Global Value Fund | ||||||||||||||||||||||||||||||||
Investment Class | 34,241,857 | 52,876,116 | 1,478,512 | 1,615,070 | (139,808,432 | ) | (81,698,507 | ) | (104,088,063 | ) | (27,207,321 | ) | ||||||||||||||||||||
Service Class | 4,434,044 | 11,030,665 | 463,969 | 397,892 | (21,584,163 | ) | (64,565,756 | ) | (16,686,150 | ) | (53,137,199 | ) | ||||||||||||||||||||
Consultant Class | 2,262,356 | 5,883,100 | 238,875 | 85,042 | (5,755,653 | ) | (4,873,143 | ) | (3,254,422 | ) | 1,094,999 | |||||||||||||||||||||
R Class | 25,500 | 48,059 | 2,886 | 1,123 | – | (32,126 | ) | 28,386 | 17,056 | |||||||||||||||||||||||
K Class | – | – | 601 | 603 | (20,000 | ) | – | (19,399 | ) | 603 | ||||||||||||||||||||||
Royce International Smaller-Companies Fund | ||||||||||||||||||||||||||||||||
Investment Class | 1,269,960 | 98,637 | (103,300 | ) | 1,265,297 | |||||||||||||||||||||||||||
Service Class | 24,538,927 | 15,275,210 | 3,268,187 | 2,054,964 | (29,545,050 | ) | (7,584,209 | ) | (1,737,936 | ) | 9,745,965 | |||||||||||||||||||||
Institutional Class | 2,956,787 | 322,024 | (500,000 | ) | 2,778,811 | |||||||||||||||||||||||||||
Royce Special Equity Multi-Cap Fund | ||||||||||||||||||||||||||||||||
Investment Class | 66,548,135 | 19,293,138 | 5,358,537 | 3,704,628 | (12,872,716 | ) | (6,291,434 | ) | 59,033,956 | 16,706,332 | ||||||||||||||||||||||
Service Class | 27,303,035 | 27,040,616 | 3,891,504 | 4,412,868 | (18,556,923 | ) | (10,431,782 | ) | 12,637,616 | 21,021,702 | ||||||||||||||||||||||
Consultant Class | 8,880,332 | 397,636 | (77,401 | ) | 9,200,567 | |||||||||||||||||||||||||||
Institutional Class | 35,830,108 | 10,145,425 | 3,725,422 | 2,916,002 | (14,233,983 | ) | (6,513,470 | ) | 25,321,547 | 6,547,957 | ||||||||||||||||||||||
Capital Share Transactions (in shares): |
SHARES ISSUED FOR REINVESTMENT OF | NET INCREASE (DECREASE) IN SHARES | ||||||||||||||||||||||||||||||||
SHARES SOLD | DISTRIBUTIONS | SHARES REDEEMED | OUTSTANDING | ||||||||||||||||||||||||||||||
Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | ||||||||||||||||||||||||||
12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | ||||||||||||||||||||||||||
Royce Pennsylvania Mutual Fund | |||||||||||||||||||||||||||||||||
Investment Class | 36,206,076 | 46,226,486 | 30,489,187 | 16,992,836 | (110,659,655 | ) | (89,595,361 | ) | (43,964,392 | ) | (26,376,039 | ) | |||||||||||||||||||||
Service Class | 6,949,807 | 12,154,062 | 2,824,174 | 2,231,345 | (24,303,578 | ) | (15,280,852 | ) | (14,529,597 | ) | (895,445 | ) | |||||||||||||||||||||
Consultant Class | 2,003,148 | 3,060,812 | 7,059,367 | 3,572,100 | (9,263,663 | ) | (9,417,039 | ) | (201,148 | ) | (2,784,127 | ) | |||||||||||||||||||||
Institutional Class | 23,994,962 | 16,645,215 | 7,066,642 | 2,974,759 | (24,871,748 | ) | (6,539,897 | ) | 6,189,856 | 13,080,077 | |||||||||||||||||||||||
R Class | 574,241 | 954,600 | 330,114 | 168,937 | (1,066,363 | ) | (969,814 | ) | (162,008 | ) | 153,723 | ||||||||||||||||||||||
K Class | 200,117 | 277,728 | 117,586 | 49,089 | (266,187 | ) | (290,287 | ) | 51,516 | 36,530 | |||||||||||||||||||||||
Royce Micro-Cap Fund | |||||||||||||||||||||||||||||||||
Investment Class | 2,121,398 | 6,259,092 | 2,528,680 | 2,671,284 | (15,045,118 | ) | (20,014,977 | ) | (10,395,040 | ) | (11,084,601 | ) | |||||||||||||||||||||
Service Class | 700,023 | 1,576,795 | 242,995 | 347,362 | (3,082,010 | ) | (4,567,474 | ) | (2,138,992 | ) | (2,643,317 | ) | |||||||||||||||||||||
Consultant Class | 153,824 | 305,187 | 692,539 | 633,631 | (2,758,901 | ) | (2,064,361 | ) | (1,912,538 | ) | (1,125,543 | ) | |||||||||||||||||||||
Royce Premier Fund | |||||||||||||||||||||||||||||||||
Investment Class | 17,298,122 | 30,376,140 | 19,065,823 | 21,769,221 | (59,032,600 | ) | (63,250,311 | ) | (22,668,655 | ) | (11,104,950 | ) | |||||||||||||||||||||
Service Class | 1,730,643 | 4,393,188 | 893,882 | 2,235,507 | (8,380,293 | ) | (21,601,163 | ) | (5,755,768 | ) | (14,972,468 | ) | |||||||||||||||||||||
Consultant Class | 119,767 | 172,593 | 340,548 | 361,940 | (540,506 | ) | (616,805 | ) | (80,191 | ) | (82,272 | ) | |||||||||||||||||||||
Institutional Class | 4,948,769 | 8,056,109 | 3,442,603 | 4,163,363 | (22,872,894 | ) | (12,779,832 | ) | (14,481,522 | ) | (560,360 | ) | |||||||||||||||||||||
W Class | 2,184,841 | 3,209,870 | 1,723,220 | 1,936,569 | (6,268,848 | ) | (8,004,577 | ) | (2,360,787 | ) | (2,858,138 | ) | |||||||||||||||||||||
R Class | 229,555 | 355,469 | 147,382 | 156,830 | (456,270 | ) | (518,060 | ) | (79,333 | ) | (5,761 | ) | |||||||||||||||||||||
K Class | 160,529 | 207,939 | 296,199 | 242,928 | (436,832 | ) | (562,131 | ) | 19,896 | (111,264 | ) | ||||||||||||||||||||||
The Royce Funds 2014 Annual Report to Shareholders | 105 |
Notes to Financial Statements(continued) |
Capital Share Transactions (in shares)(continued): |
SHARES ISSUED FOR REINVESTMENT OF | NET INCREASE (DECREASE) IN SHARES | ||||||||||||||||||||||||
SHARES SOLD | DISTRIBUTIONS | SHARES REDEEMED | OUTSTANDING | ||||||||||||||||||||||
Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | ||||||||||||||||||
12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | ||||||||||||||||||
Royce Low-Priced Stock Fund | |||||||||||||||||||||||||
Investment Class | 1,823,350 | 1,774,622 | 1,499,869 | 879,449 | (4,511,651 | ) | (14,606,981 | ) | (1,188,432 | ) | (11,952,910 | ) | |||||||||||||
Service Class | 3,328,649 | 6,805,969 | 17,589,337 | 9,802,415 | (39,870,593 | ) | (72,626,280 | ) | (18,952,607 | ) | (56,017,896 | ) | |||||||||||||
Institutional Class | 1,320,098 | 3,751,445 | 3,059,858 | 4,945,006 | (19,078,377 | ) | (53,328,942 | ) | (14,698,421 | ) | (44,632,491 | ) | |||||||||||||
R Class | 26,112 | 51,145 | 60,140 | 32,085 | (113,771 | ) | (276,221 | ) | (27,519 | ) | (192,991 | ) | |||||||||||||
K Class | 46,361 | 185,404 | 378,649 | 125,734 | (301,233 | ) | (545,525 | ) | 123,777 | (234,387 | ) | ||||||||||||||
Royce Total Return Fund | |||||||||||||||||||||||||
Investment Class | 22,372,344 | 34,008,791 | 22,430,864 | 19,177,169 | (58,160,964 | ) | (54,422,666 | ) | (13,357,756 | ) | (1,236,706 | ) | |||||||||||||
Service Class | 3,926,950 | 18,008,716 | 1,702,788 | 2,760,845 | (19,785,781 | ) | (10,349,897 | ) | (14,156,043 | ) | 10,419,664 | ||||||||||||||
Consultant Class | 1,048,627 | 1,777,940 | 2,209,382 | 1,916,004 | (3,805,888 | ) | (3,421,705 | ) | (547,879 | ) | 272,239 | ||||||||||||||
Institutional Class | 8,770,274 | 14,208,470 | 4,474,278 | 3,302,136 | (12,053,533 | ) | (9,643,829 | ) | 1,191,019 | 7,866,777 | |||||||||||||||
W Class | 3,975,782 | 4,762,342 | 1,864,392 | 1,360,229 | (3,193,929 | ) | (3,582,702 | ) | 2,646,245 | 2,539,869 | |||||||||||||||
R Class | 822,089 | 1,406,109 | 462,360 | 360,304 | (1,275,828 | ) | (960,345 | ) | 8,621 | 806,068 | |||||||||||||||
K Class | 3,906,869 | 8,917,924 | 1,258,739 | 1,801,787 | (12,482,664 | ) | (10,408,606 | ) | (7,317,056 | ) | 311,105 | ||||||||||||||
Royce Heritage Fund | |||||||||||||||||||||||||
Investment Class | 3,146,637 | 3,942,621 | 583,366 | 800,468 | (395,548 | ) | (306,338 | ) | 3,334,455 | 4,436,751 | |||||||||||||||
Service Class | 617,610 | 922,749 | 605,064 | 1,522,989 | (3,457,889 | ) | (2,701,430 | ) | (2,235,215 | ) | (255,692 | ) | |||||||||||||
Consultant Class | 55,109 | 97,007 | 75,463 | 177,373 | (235,654 | ) | (197,298 | ) | (105,082 | ) | 77,082 | ||||||||||||||
R Class | 55,045 | 157,302 | 27,482 | 88,537 | (316,179 | ) | (105,420 | ) | (233,652 | ) | 140,419 | ||||||||||||||
K Class | 70,201 | 103,658 | 38,003 | 93,541 | (146,342 | ) | (298,103 | ) | (38,138 | ) | (100,904 | ) | |||||||||||||
Royce Opportunity Fund | |||||||||||||||||||||||||
Investment Class | 12,687,041 | 23,132,726 | 11,528,908 | 7,393,346 | (20,605,360 | ) | (15,864,897 | ) | 3,610,589 | 14,661,175 | |||||||||||||||
Service Class | 3,006,071 | 10,451,801 | 1,657,147 | 2,327,279 | (6,502,632 | ) | (16,570,321 | ) | (1,839,414 | ) | (3,791,241 | ) | |||||||||||||
Consultant Class | 515,572 | 311,452 | 239,149 | 132,566 | (344,991 | ) | (197,400 | ) | 409,730 | 246,618 | |||||||||||||||
Institutional Class | 8,987,079 | 11,676,520 | 7,247,263 | 4,892,724 | (12,024,838 | ) | (19,424,495 | ) | 4,209,504 | (2,855,251 | ) | ||||||||||||||
R Class | 1,116,193 | 956,791 | 371,647 | 145,771 | (348,481 | ) | (136,455 | ) | 1,139,359 | 966,107 | |||||||||||||||
K Class | 1,233,120 | 657,201 | 296,904 | 130,963 | (859,545 | ) | (304,568 | ) | 670,479 | 483,596 | |||||||||||||||
Royce Special Equity Fund | |||||||||||||||||||||||||
Investment Class | 10,375,790 | 20,852,805 | 7,392,246 | 7,776,472 | (32,780,612 | ) | (25,209,775 | ) | (15,012,576 | ) | 3,419,502 | ||||||||||||||
Service Class | 1,657,860 | 3,403,756 | 891,296 | 1,078,798 | (5,755,208 | ) | (2,906,242 | ) | (3,206,052 | ) | 1,576,312 | ||||||||||||||
Consultant Class | 148,400 | 237,789 | 278,799 | 264,105 | (445,924 | ) | (335,357 | ) | (18,725 | ) | 166,537 | ||||||||||||||
Institutional Class | 2,968,109 | 5,326,316 | 2,677,947 | 2,368,292 | (5,620,871 | ) | (6,731,297 | ) | 25,185 | 963,311 | |||||||||||||||
Royce Value Fund | |||||||||||||||||||||||||
Investment Class | 2,962,049 | 3,135,123 | 1,489,706 | 1,007,651 | (7,141,129 | ) | (7,726,784 | ) | (2,689,374 | ) | (3,584,010 | ) | |||||||||||||
Service Class | 2,464,793 | 4,676,686 | 5,106,063 | 3,551,836 | (17,413,782 | ) | (31,037,970 | ) | (9,842,926 | ) | (22,809,448 | ) | |||||||||||||
Consultant Class | 245,055 | 183,439 | 316,348 | 178,027 | (594,530 | ) | (967,471 | ) | (33,127 | ) | (606,005 | ) | |||||||||||||
Institutional Class | 1,363,836 | 2,092,657 | 2,139,400 | 1,203,721 | (3,098,649 | ) | (4,871,428 | ) | 404,587 | (1,575,050 | ) | ||||||||||||||
R Class | 390,274 | 708,108 | 375,324 | 203,266 | (885,453 | ) | (1,452,191 | ) | (119,855 | ) | (540,817 | ) | |||||||||||||
K Class | 250,607 | 541,528 | 172,087 | 136,497 | (900,345 | ) | (1,140,643 | ) | (477,651 | ) | (462,618 | ) | |||||||||||||
Royce Value Plus Fund | |||||||||||||||||||||||||
Investment Class | 7,656,782 | 2,851,911 | 3,404,492 | 1,079,225 | (4,828,693 | ) | (5,994,135 | ) | 6,232,581 | (2,062,999 | ) | ||||||||||||||
Service Class | 3,129,248 | 4,643,803 | 7,488,175 | 3,998,960 | (19,711,434 | ) | (29,187,654 | ) | (9,094,011 | ) | (20,544,891 | ) | |||||||||||||
Consultant Class | 38,547 | 72,690 | 251,709 | 112,509 | (396,344 | ) | (252,539 | ) | (106,088 | ) | (67,340 | ) | |||||||||||||
Institutional Class | 1,030,329 | 1,576,410 | 491,639 | 666,203 | (7,208,614 | ) | (9,418,226 | ) | (5,686,646 | ) | (7,175,613 | ) | |||||||||||||
R Class | 20,086 | 66,892 | 20,404 | 7,884 | (38,468 | ) | (67,496 | ) | 2,022 | 7,280 | |||||||||||||||
K Class | 12,887 | 39,389 | 26,936 | 8,932 | (65,796 | ) | (15,469 | ) | (25,973 | ) | 32,852 | ||||||||||||||
Royce 100 Fund | |||||||||||||||||||||||||
Investment Class | 4,896,139 | 1,918,300 | 765,609 | 786,729 | (3,728,666 | ) | (4,481,066 | ) | 1,933,082 | (1,776,037 | ) | ||||||||||||||
Service Class | 2,533,436 | 3,419,533 | 1,899,069 | 2,991,579 | (10,198,107 | ) | (8,383,582 | ) | (5,765,602 | ) | (1,972,470 | ) | |||||||||||||
R Class | 77,893 | 85,981 | 15,511 | 23,585 | (137,046 | ) | (123,506 | ) | (43,642 | ) | (13,940 | ) | |||||||||||||
K Class | 22,709 | 92,262 | 5,788 | 18,760 | (149,939 | ) | (254,841 | ) | (121,442 | ) | (143,819 | ) | |||||||||||||
Royce Dividend Value Fund | |||||||||||||||||||||||||
Investment Class | 6,107,891 | 11,682,957 | 1,432,854 | 1,624,572 | (9,643,658 | ) | (5,819,566 | ) | (2,102,913 | ) | 7,487,963 | ||||||||||||||
Service Class | 5,033,545 | 15,995,933 | 2,128,903 | 2,758,492 | (16,596,059 | ) | (7,734,636 | ) | (9,433,611 | ) | 11,019,789 | ||||||||||||||
Consultant Class | 96,722 | 5,327 | (3,188 | ) | 98,861 | ||||||||||||||||||||
Institutional Class | 1,472,932 | 245,393 | 365,097 | 254,395 | (295,202 | ) | (202,230 | ) | 1,542,827 | 297,558 | |||||||||||||||
106 | The Royce Funds 2014 Annual Report to Shareholders |
Capital Share Transactions (in shares)(continued): |
SHARES ISSUED FOR REINVESTMENT OF | NET INCREASE (DECREASE) IN SHARES | |||||||||||||||||||||||
SHARES SOLD | DISTRIBUTIONS | SHARES REDEEMED | OUTSTANDING | |||||||||||||||||||||
Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | |||||||||||||||||
12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | |||||||||||||||||
Royce Global Value Fund | ||||||||||||||||||||||||
Investment Class | 2,430,818 | 4,055,905 | 133,403 | 122,354 | (10,653,392 | ) | (6,270,310 | ) | (8,089,171 | ) | (2,092,051 | ) | ||||||||||||
Service Class | 314,008 | 840,469 | 40,116 | 29,962 | (1,540,282 | ) | (4,915,611 | ) | (1,186,158 | ) | (4,045,180 | ) | ||||||||||||
Consultant Class | 168,211 | 452,132 | 19,342 | 6,467 | (428,708 | ) | (378,187 | ) | (241,155 | ) | 80,412 | |||||||||||||
R Class | 2,359 | 4,926 | 315 | 114 | – | (3,429 | ) | 2,674 | 1,611 | |||||||||||||||
K Class | – | – | 66 | 61 | (1,992 | ) | – | (1,926 | ) | 61 | ||||||||||||||
Royce International Smaller-Companies Fund | ||||||||||||||||||||||||
Investment Class | 138,719 | 12,760 | (10,000 | ) | 141,479 | |||||||||||||||||||
Service Class | 2,070,356 | 1,306,197 | 351,297 | 176,089 | (2,572,623 | ) | (646,447 | ) | (150,970 | ) | 835,839 | |||||||||||||
Institutional Class | 297,157 | 40,557 | (47,847 | ) | 289,867 | |||||||||||||||||||
Royce Special Equity Multi-Cap Fund | ||||||||||||||||||||||||
Investment Class | 4,256,073 | 1,419,512 | 356,996 | 256,021 | (852,315 | ) | (446,425 | ) | 3,760,754 | 1,229,108 | ||||||||||||||
Service Class | 1,800,024 | 1,938,884 | 267,339 | 303,917 | (1,215,439 | ) | (754,027 | ) | 851,924 | 1,488,774 | ||||||||||||||
Consultant Class | 829,645 | 38,088 | (7,158 | ) | 860,575 | |||||||||||||||||||
Institutional Class | 2,353,132 | 791,666 | 245,902 | 201,381 | (941,028 | ) | (426,933 | ) | 1,658,006 | 566,114 | ||||||||||||||
Investment Adviser and Distributor:
INVESTMENT ADVISER: Under the Trust’s investment advisory agreements with 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 class-specific expenses to the extent necessary to maintain certain Funds’ net annual operating expense ratios at specified levels through April 30, 2015, is shown below to the extent that it impacted net expenses for the year ended December 31, 2014. See the Prospectus for contractual waiver expiration dates.
ANNUAL CONTRACTUAL ADVISORY FEE AS A PERCENTAGE OF AVERAGE NET ASSETS1 | COMMITTED NET ANNUAL OPERATING EXPENSE RATIO CAP | YEAR ENDED DECEMBER 31, 2014 | ||||||||||||||||
Investment Class4 | Service Class4 | Consultant Class4 | Institutional Class4 | W Class4 | R Class4 | K Class4 | Net advisory fees | Advisory fees waived | ||||||||||
Royce Pennsylvania Mutual Fund | 0.75%2 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $ | 49,733,575 | $ | – | ||||||
Royce Micro-Cap Fund | 1.30% | N/A | 1.66% | N/A | N/A | N/A | N/A | N/A | 9,122,354 | – | ||||||||
Royce Premier Fund | 0.94% | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 61,049,392 | – | ||||||||
Royce Low-Priced Stock Fund | 1.08%3 | 1.24% | 1.49% | N/A | N/A | N/A | 1.84% | 1.59% | 11,580,352 | – | ||||||||
Royce Total Return Fund | 0.96% | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 48,817,291 | – | ||||||||
Royce Heritage Fund | 1.00% | N/A | N/A | N/A | N/A | N/A | 1.84% | 1.59% | 3,626,249 | – | ||||||||
Royce Opportunity Fund | 0.99% | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 24,483,790 | – | ||||||||
Royce Special Equity Fund | 0.98% | N/A | 1.39% | N/A | N/A | N/A | N/A | N/A | 31,513,578 | – | ||||||||
Royce Value Fund | 1.00% | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 10,195,490 | – | ||||||||
Royce Value Plus Fund | 1.00% | N/A | N/A | N/A | N/A | N/A | 1.84% | 1.59% | 10,730,642 | – | ||||||||
Royce 100 Fund | 1.00% | N/A | N/A | N/A | N/A | N/A | 1.84% | 1.59% | 2,686,076 | – | ||||||||
Royce Dividend Value Fund | 1.00% | N/A | N/A | 2.24% | 1.04% | N/A | N/A | N/A | 5,891,874 | 85,816 | ||||||||
Royce Global Value Fund | 1.25% | N/A | 1.69% | 2.44% | N/A | N/A | 1.99% | 1.74% | 2,422,039 | – | ||||||||
Royce International Smaller-Companies Fund | 1.25% | 1.44% | 1.69% | N/A | 1.44% | N/A | N/A | N/A | 530,543 | 84,408 | ||||||||
Royce Special Equity Multi-Cap Fund | 0.85% | N/A | 1.24% | 1.99% | 0.89% | N/A | N/A | N/A | 1,948,296 | 16,590 | ||||||||
1 | From a base annual rate of 1.00% (1.30% for Royce Micro-Cap Fund, 1.25% for Royce Global Value Fund and Royce International Smaller-Companies Fund and 0.85% for Royce Special Equity Multi-Cap Fund), the annual rates of investment advisory fees payable by each of the Funds, other than Royce Pennsylvania Mutual Fund, are reduced by the indicated amount at the following breakpoints applicable to a Fund’s net assets in excess of $2 billion: more than $2 billion to $4 billion – .05% per annum; more than $4 billion to $6 billion – .10% per annum; over $6 billion – .15% per annum. |
2 | Royce Pennsylvania Mutual Fund’s fees are calculated at the annual rate of 1.00% of the first $50 million of the Fund’s average net assets, 0.875% of the next $50 million of average net assets and 0.75% of average net assets in excess of $100 million. |
3 | Prior to July 1, 2014, the base annual contractual advisory fee for Royce Low-Priced Stock Fund was 1.15%. |
4 | Committed net annual operating expense ratio cap excludes acquired fund fees and expenses. |
DISTRIBUTOR: Royce Fund Services, Inc. (“RFS”), the distributor of the Trust’s shares, is a wholly owned subsidiary of Royce. RFS is entitled to receive distribution fees that are computed daily and payable monthly.
ANNUAL CONTRACTUAL DISTRIBUTION FEE AS A | PERIOD ENDED DECEMBER 31, 2014 | |||||||
PERCENTAGE OF AVERAGE NET ASSETS | Net distribution fees | Distribution fees waived | ||||||
Royce Pennsylvania Mutual Fund – Service Class | 0.25% | $ 1,296,760 | $ – | |||||
Royce Pennsylvania Mutual Fund – Consultant Class | 1.00% | 7,297,087 | – | |||||
Royce Pennsylvania Mutual Fund – R Class | 0.50% | 200,653 | – | |||||
Royce Pennsylvania Mutual Fund – K Class | 0.25% | 26,724 | – | |||||
The Royce Funds 2014 Annual Report to Shareholders | 107 |
Notes to Financial Statements(continued) |
DISTRIBUTOR (continued): |
ANNUAL CONTRACTUAL DISTRIBUTION FEE AS A | PERIOD ENDED DECEMBER 31, 2014 | ||||||
PERCENTAGE OF AVERAGE NET ASSETS | Net distribution fees | Distribution fees waived | |||||
Royce Micro-Cap Fund – Service Class | 0.25% | $ | 153,047 | $ | – | ||
Royce Micro-Cap Fund – Consultant Class | 1.00% | 1,014,916 | – | ||||
Royce Premier Fund – Service Class | 0.25% | 634,279 | – | ||||
Royce Premier Fund – Consultant Class | 1.00% | 631,726 | – | ||||
Royce Premier Fund – R Class | 0.50% | 152,285 | – | ||||
Royce Premier Fund – K Class | 0.25% | 18,268 | – | ||||
Royce Low-Priced Stock Fund – Service Class | 0.25% | 1,958,649 | 81,610 | ||||
Royce Low-Priced Stock Fund – R Class | 0.50% | 11,733 | – | ||||
Royce Low-Priced Stock Fund – K Class | 0.25% | 6,565 | – | ||||
Royce Total Return Fund – Service Class | 0.25% | 808,222 | – | ||||
Royce Total Return Fund – Consultant Class | 1.00% | 3,805,780 | – | ||||
Royce Total Return Fund – R Class | 0.50% | 337,249 | – | ||||
Royce Total Return Fund – K Class | 0.25% | 337,136 | – | ||||
Royce Heritage Fund – Service Class | 0.25% | 432,720 | 59,007 | ||||
Royce Heritage Fund – Consultant Class | 1.00% | 145,668 | – | ||||
Royce Heritage Fund – R Class | 0.50% | 26,355 | – | ||||
Royce Heritage Fund – K Class | 0.25% | 15,388 | – | ||||
Royce Opportunity Fund – Service Class | 0.25% | 459,522 | – | ||||
Royce Opportunity Fund – Consultant Class | 1.00% | 186,822 | – | ||||
Royce Opportunity Fund – R Class | 0.50% | 146,084 | – | ||||
Royce Opportunity Fund – K Class | 0.25% | 56,137 | – | ||||
Royce Special Equity Fund – Service Class | 0.25% | 707,407 | – | ||||
Royce Special Equity Fund – Consultant Class | 1.00% | 663,965 | – | ||||
Royce Value Fund – Service Class | 0.25% | 1,440,679 | – | ||||
Royce Value Fund – Consultant Class | 1.00% | 289,727 | – | ||||
Royce Value Fund – R Class | 0.50% | 175,601 | – | ||||
Royce Value Fund – K Class | 0.25% | 30,660 | – | ||||
Royce Value Plus Fund – Service Class | 0.25% | 1,610,600 | 140,052 | ||||
Royce Value Plus Fund – Consultant Class | 1.00% | 201,714 | – | ||||
Royce Value Plus Fund – R Class | 0.50% | 6,997 | – | ||||
Royce Value Plus Fund – K Class | 0.25% | 2,298 | – | ||||
Royce 100 Fund – Service Class | 0.25% | 448,378 | 38,989 | ||||
Royce 100 Fund – R Class | 0.50% | 12,103 | – | ||||
Royce 100 Fund – K Class | 0.25% | 3,241 | – | ||||
Royce Dividend Value Fund – Service Class | 0.25% | 873,246 | 36,385 | ||||
Royce Dividend Value Fund – Consultant Class | 1.00% | 3,305 | – | ||||
Royce Global Value Fund – Service Class | 0.25% | 102,079 | – | ||||
Royce Global Value Fund – Consultant Class | 1.00% | 252,144 | – | ||||
Royce Global Value Fund – R Class | 0.50% | 593 | – | ||||
Royce Global Value Fund – K Class | 0.25% | 65 | – | ||||
Royce International Smaller-Companies Fund – Service Class | 0.25% | 114,949 | – | ||||
Royce Special Equity Multi-Cap Fund – Service Class | 0.25% | 205,229 | 17,846 | ||||
Royce Special Equity Multi-Cap Fund – Consultant Class | 1.00% | 49,119 | – | ||||
PURCHASES | SALES | ||||
Royce Pennsylvania Mutual Fund | $ | 1,352,437,652 | $ | 2,702,348,724 | |
Royce Micro-Cap Fund | 122,535,915 | 396,180,960 | |||
Royce Premier Fund | 578,308,648 | 2,051,983,365 | |||
Royce Low-Priced Stock Fund | 298,542,865 | 1,070,511,968 | |||
Royce Total Return Fund | 882,786,749 | 1,674,872,153 | |||
Royce Heritage Fund | 143,313,015 | 117,480,267 | |||
Royce Opportunity Fund | 832,620,400 | 1,027,080,994 | |||
Royce Special Equity Fund | 592,678,869 | 1,032,364,015 | |||
Royce Value Fund | 385,359,251 | 669,561,268 | |||
Royce Value Plus Fund | 541,918,895 | 844,526,652 | |||
108 | The Royce Funds 2014 Annual Report to Shareholders |
Purchases and Sales of Investment Securities (continued): |
PURCHASES | SALES | ||||
Royce 100 Fund | $ | 95,911,946 | $ | 143,650,185 | |
Royce Dividend Value Fund | 126,115,389 | 189,821,401 | |||
Royce Global Value Fund | 98,414,719 | 224,179,841 | |||
Royce International Smaller-Companies Fund | 37,154,109 | 36,608,731 | |||
Royce Special Equity Multi-Cap Fund | 161,312,367 | 83,218,290 | |||
CLASS LEVEL | ||||||||||||||||||||||||||||
EXPENSES | ||||||||||||||||||||||||||||
REIMBURSED BY | ||||||||||||||||||||||||||||
NET DISTRIBUTION | SHAREHOLDER | SHAREHOLDER | TRANSFER AGENT | INVESTMENT | ||||||||||||||||||||||||
FEES | SERVICING | REPORTS | REGISTRATION | BALANCE CREDITS | TOTAL | ADVISER | ||||||||||||||||||||||
Royce Pennsylvania Mutual Fund – Investment Class | $ | – | $ | 4,730,742 | $ | 746,684 | $ | 50,998 | $ | (989 | ) | $ | 5,527,435 | $ | – | |||||||||||||
Royce Pennsylvania Mutual Fund – Service Class | 1,296,760 | 851,604 | 172,736 | 21,057 | (28 | ) | 2,342,129 | – | ||||||||||||||||||||
Royce Pennsylvania Mutual Fund – Consultant Class | 7,297,087 | 711,976 | 160,462 | 14,516 | (233 | ) | 8,183,808 | – | ||||||||||||||||||||
Royce Pennsylvania Mutual Fund – Institutional Class | – | 7,360 | 61,705 | 16,301 | (3 | ) | 85,363 | – | ||||||||||||||||||||
Royce Pennsylvania Mutual Fund – R Class | 200,653 | 69,878 | 5,087 | 1,700 | (13 | ) | 277,305 | – | ||||||||||||||||||||
Royce Pennsylvania Mutual Fund – K Class | 26,724 | 26,162 | 2,037 | 13,378 | (2 | ) | 68,299 | – | ||||||||||||||||||||
8,821,224 | 6,397,722 | 1,148,711 | 117,950 | (1,268 | ) | |||||||||||||||||||||||
Royce Micro-Cap Fund – Investment Class | – | 715,586 | 181,086 | 21,630 | (228 | ) | 918,074 | – | ||||||||||||||||||||
Royce Micro-Cap Fund – Service Class | 153,047 | 76,929 | 23,745 | 10,422 | (16 | ) | 264,127 | 69,938 | ||||||||||||||||||||
Royce Micro-Cap Fund – Consultant Class | 1,014,916 | 104,797 | 23,864 | 12,382 | (50 | ) | 1,155,909 | – | ||||||||||||||||||||
1,167,963 | 897,312 | 228,695 | 44,434 | (294 | ) | 69,938 | ||||||||||||||||||||||
Royce Premier Fund – Investment Class | – | 4,879,174 | 966,907 | 36,819 | (796 | ) | 5,882,104 | – | ||||||||||||||||||||
Royce Premier Fund – Service Class | 634,279 | 316,979 | 83,088 | 12,096 | (65 | ) | 1,046,377 | – | ||||||||||||||||||||
Royce Premier Fund – Consultant Class | 631,726 | 56,141 | 12,783 | 10,566 | (27 | ) | 711,189 | – | ||||||||||||||||||||
Royce Premier Fund – Institutional Class | – | 9,742 | 69,108 | 15,234 | (6 | ) | 94,078 | – | ||||||||||||||||||||
Royce Premier Fund – W Class | – | 367,934 | 118,213 | 18,713 | (127 | ) | 504,733 | – | ||||||||||||||||||||
Royce Premier Fund – R Class | 152,285 | 65,936 | 5,886 | 1,700 | (5 | ) | 225,802 | – | ||||||||||||||||||||
Royce Premier Fund – K Class | 18,268 | 20,389 | 522 | 13,393 | (1 | ) | 52,571 | – | ||||||||||||||||||||
1,436,558 | 5,716,295 | 1,256,507 | 108,521 | (1,027 | ) | |||||||||||||||||||||||
Royce Low-Priced Stock Fund – Investment Class | – | 59,398 | 13,322 | 11,856 | (6 | ) | 84,570 | 6,713 | ||||||||||||||||||||
Royce Low-Priced Stock Fund – Service Class | 1,958,649 | 1,167,388 | 180,897 | 20,670 | (260 | ) | 3,327,344 | 388,545 | ||||||||||||||||||||
Royce Low-Priced Stock Fund – Institutional Class | – | 6,820 | 29,009 | 13,757 | (1 | ) | 49,585 | – | ||||||||||||||||||||
Royce Low-Priced Stock Fund – R Class | 11,733 | 10,989 | 948 | 1,700 | (2 | ) | 25,368 | 8,682 | ||||||||||||||||||||
Royce Low-Priced Stock Fund – K Class | 6,565 | 10,763 | 725 | 13,562 | (1 | ) | 31,614 | 19,583 | ||||||||||||||||||||
1,976,947 | 1,255,358 | 224,901 | 61,545 | (270 | ) | 423,523 | ||||||||||||||||||||||
Royce Total Return Fund – Investment Class | – | 3,777,475 | 678,706 | 53,471 | (752 | ) | 4,508,900 | – | ||||||||||||||||||||
Royce Total Return Fund – Service Class | 808,222 | 477,039 | 94,205 | 18,062 | (29 | ) | 1,397,499 | – | ||||||||||||||||||||
Royce Total Return Fund – Consultant Class | 3,805,780 | 382,983 | 84,456 | 10,571 | (133 | ) | 4,283,657 | – | ||||||||||||||||||||
Royce Total Return Fund – Institutional Class | – | 10,187 | 25,547 | 13,901 | (10 | ) | 49,625 | – | ||||||||||||||||||||
Royce Total Return Fund – W Class | – | 252,375 | 82,269 | 21,768 | (6 | ) | 356,406 | – | ||||||||||||||||||||
Royce Total Return Fund – R Class | 337,249 | 141,847 | 9,168 | 1,701 | (18 | ) | 489,947 | – | ||||||||||||||||||||
Royce Total Return Fund – K Class | 337,136 | 283,304 | 9,839 | 14,088 | (6 | ) | 644,361 | – | ||||||||||||||||||||
5,288,387 | 5,325,210 | 984,190 | 133,562 | (954 | ) | |||||||||||||||||||||||
The Royce Funds 2014 Annual Report to Shareholders | 109 |
Notes to Financial Statements(continued) |
Class Specific Expenses (continued): |
CLASS LEVEL | ||||||||||||||||||||||||||||
EXPENSES | ||||||||||||||||||||||||||||
REIMBURSED BY | ||||||||||||||||||||||||||||
NET DISTRIBUTION | SHAREHOLDER | SHAREHOLDER | TRANSFER AGENT | INVESTMENT | ||||||||||||||||||||||||
FEES | SERVICING | REPORTS | REGISTRATION | BALANCE CREDITS | TOTAL | ADVISER | ||||||||||||||||||||||
Royce Heritage Fund – Investment Class | $ | – | $ | 21,290 | $ | 3,858 | $ | 14,283 | $ | (5 | ) | $ | 39,426 | $ | – | |||||||||||||
Royce Heritage Fund – Service Class | 432,720 | 165,970 | 58,635 | 16,207 | (155 | ) | 673,377 | – | ||||||||||||||||||||
Royce Heritage Fund – Consultant Class | 145,668 | 21,941 | 7,157 | 7,830 | (15 | ) | 182,581 | – | ||||||||||||||||||||
Royce Heritage Fund – R Class | 26,355 | 14,680 | 1,275 | 1,702 | (3 | ) | 44,009 | 2,702 | ||||||||||||||||||||
Royce Heritage Fund – K Class | 15,388 | 19,098 | 1,809 | 13,522 | (2 | ) | 49,815 | 17,028 | ||||||||||||||||||||
620,131 | 242,979 | 72,734 | 53,544 | (180 | ) | 19,730 | ||||||||||||||||||||||
Royce Opportunity Fund – Investment Class | – | 1,369,190 | 192,401 | 34,826 | (386 | ) | 1,596,031 | – | ||||||||||||||||||||
Royce Opportunity Fund – Service Class | 459,522 | 286,848 | 61,524 | 11,866 | (14 | ) | 819,746 | – | ||||||||||||||||||||
Royce Opportunity Fund – Consultant Class | 186,822 | 24,303 | 5,913 | 10,838 | (11 | ) | 227,865 | – | ||||||||||||||||||||
Royce Opportunity Fund – Institutional Class | – | 7,676 | 41,685 | 19,599 | (4 | ) | 68,956 | – | ||||||||||||||||||||
Royce Opportunity Fund – R Class | 146,084 | 67,161 | 4,200 | 1,701 | (7 | ) | 219,139 | – | ||||||||||||||||||||
Royce Opportunity Fund – K Class | 56,137 | 53,905 | 2,621 | 14,216 | (3 | ) | 126,876 | – | ||||||||||||||||||||
848,565 | 1,809,083 | 308,344 | 93,046 | (425 | ) | |||||||||||||||||||||||
Royce Special Equity Fund – Investment Class | – | 1,939,849 | 378,626 | 40,601 | (363 | ) | 2,358,713 | – | ||||||||||||||||||||
Royce Special Equity Fund – Service Class | 707,407 | 393,500 | 91,108 | 18,080 | (233 | ) | 1,209,862 | 136,947 | ||||||||||||||||||||
Royce Special Equity Fund – Consultant Class | 663,965 | 57,233 | 13,911 | 11,051 | (24 | ) | 746,136 | – | ||||||||||||||||||||
Royce Special Equity Fund – Institutional Class | – | 8,911 | 13,251 | 14,845 | (4 | ) | 37,003 | – | ||||||||||||||||||||
1,371,372 | 2,399,493 | 496,896 | 84,577 | (624 | ) | 136,947 | ||||||||||||||||||||||
Royce Value Fund – Investment Class | – | 181,364 | 41,485 | 12,595 | (96 | ) | 235,348 | – | ||||||||||||||||||||
Royce Value Fund – Service Class | 1,440,679 | 815,404 | 138,752 | 18,169 | (241 | ) | 2,412,763 | – | ||||||||||||||||||||
Royce Value Fund – Consultant Class | 289,727 | 33,955 | 7,006 | 11,194 | (9 | ) | 341,873 | – | ||||||||||||||||||||
Royce Value Fund – Institutional Class | – | 6,633 | 4,284 | 16,053 | (2 | ) | 26,968 | – | ||||||||||||||||||||
Royce Value Fund – R Class | 175,601 | 76,536 | 2,869 | 1,703 | (7 | ) | 256,702 | – | ||||||||||||||||||||
Royce Value Fund – K Class | 30,660 | 30,563 | 3,888 | 13,508 | (2 | ) | 78,617 | – | ||||||||||||||||||||
1,936,667 | 1,144,455 | 198,284 | 73,222 | (357 | ) | |||||||||||||||||||||||
Royce Value Plus Fund – Investment Class | – | 639,535 | 130,074 | 14,547 | (12 | ) | 784,144 | – | ||||||||||||||||||||
Royce Value Plus Fund – Service Class | 1,610,600 | 885,715 | 210,747 | 21,341 | (242 | ) | 2,728,161 | – | ||||||||||||||||||||
Royce Value Plus Fund – Consultant Class | 201,714 | 33,632 | 6,610 | 10,536 | (8 | ) | 252,484 | – | ||||||||||||||||||||
Royce Value Plus Fund – Institutional Class | – | 7,253 | 6,507 | 11,511 | (2 | ) | 25,269 | – | ||||||||||||||||||||
Royce Value Plus Fund – R Class | 6,997 | 9,033 | 636 | 1,700 | (1 | ) | 18,365 | 7,105 | ||||||||||||||||||||
Royce Value Plus Fund – K Class | 2,298 | 7,971 | 229 | 13,383 | (1 | ) | 23,880 | 18,753 | ||||||||||||||||||||
1,821,609 | 1,583,139 | 354,803 | 73,018 | (266 | ) | 25,858 | ||||||||||||||||||||||
Royce 100 Fund – Investment Class | – | 85,295 | 8,989 | 12,900 | (3 | ) | 107,181 | – | ||||||||||||||||||||
Royce 100 Fund – Service Class | 448,378 | 264,046 | 144,302 | 19,411 | (97 | ) | 876,040 | – | ||||||||||||||||||||
Royce 100 Fund – R Class | 12,103 | 12,689 | 1,975 | 1,701 | (10 | ) | 28,458 | 9,464 | ||||||||||||||||||||
Royce 100 Fund – K Class | 3,241 | 7,674 | 527 | 13,564 | (1 | ) | 25,005 | 17,993 | ||||||||||||||||||||
463,722 | 369,704 | 155,793 | 47,576 | (111 | ) | 27,457 | ||||||||||||||||||||||
Royce Dividend Value Fund – Investment Class | – | 225,346 | 52,831 | 17,618 | (14 | ) | 295,781 | – | ||||||||||||||||||||
Royce Dividend Value Fund – Service Class | 873,246 | 435,949 | 136,564 | 24,927 | (497 | ) | 1,470,189 | – | ||||||||||||||||||||
Royce Dividend Value Fund – Consultant Class | 3,305 | 6,809 | 140 | 16,810 | – | 27,064 | 23,126 | |||||||||||||||||||||
Royce Dividend Value Fund – Institutional Class | – | 6,007 | 140 | 10,722 | – | 16,869 | 16,868 | |||||||||||||||||||||
876,551 | 674,111 | 189,675 | 70,077 | (511 | ) | 39,994 | ||||||||||||||||||||||
Royce Global Value Fund – Investment Class | – | 127,032 | 44,722 | 27,342 | (5 | ) | 199,091 | – | ||||||||||||||||||||
Royce Global Value Fund – Service Class | 102,079 | 52,297 | 14,502 | 13,657 | (50 | ) | 182,485 | 44,201 | ||||||||||||||||||||
Royce Global Value Fund – Consultant Class | 252,144 | 22,417 | 5,371 | 12,119 | (18 | ) | 292,033 | 18,478 | ||||||||||||||||||||
Royce Global Value Fund – R Class | 593 | 6,002 | 11 | 1,700 | – | 8,306 | 7,552 | |||||||||||||||||||||
Royce Global Value Fund – K Class | 65 | 5,993 | (1 | ) | 13,620 | – | 19,677 | 19,576 | ||||||||||||||||||||
354,881 | 213,741 | 64,605 | 68,438 | (73 | ) | 89,807 | ||||||||||||||||||||||
110 | The Royce Funds 2014 Annual Report to Shareholders |
Class Specific Expenses (continued): |
CLASS LEVEL | ||||||||||||||||||||||||||||
EXPENSES | ||||||||||||||||||||||||||||
REIMBURSED BY | ||||||||||||||||||||||||||||
NET DISTRIBUTION | SHAREHOLDER | SHAREHOLDER | TRANSFER AGENT | INVESTMENT | ||||||||||||||||||||||||
FEES | SERVICING | REPORTS | REGISTRATION | BALANCE CREDITS | TOTAL | ADVISER | ||||||||||||||||||||||
Royce International Smaller-Companies Fund – Investment Class | $ | – | $ | 7,578 | $ | 45 | $ | 19,621 | $ | – | $ | 27,244 | $ | 27,243 | ||||||||||||||
Royce International Smaller-Companies Fund – Service Class | 114,949 | 65,007 | 9,942 | 19,225 | (14 | ) | 209,109 | 56,615 | ||||||||||||||||||||
Royce International Smaller-Companies Fund – Institutional Class | – | 7,495 | 27 | 19,883 | – | 27,405 | 26,497 | |||||||||||||||||||||
114,949 | 80,080 | 10,014 | 58,729 | (14 | ) | 110,355 | ||||||||||||||||||||||
Royce Special Equity Multi-Cap Fund – Investment Class | – | 27,150 | 8,927 | 21,473 | (4 | ) | 57,546 | – | ||||||||||||||||||||
Royce Special Equity Multi-Cap Fund – Service Class | 205,229 | 116,515 | 37,216 | 17,554 | (18 | ) | 376,496 | 63,745 | ||||||||||||||||||||
Royce Special Equity Multi-Cap Fund – Consultant Class | 49,119 | 8,729 | 1,324 | 21,385 | – | 80,557 | 26,709 | |||||||||||||||||||||
Royce Special Equity Multi-Cap Fund – Institutional Class | – | 6,061 | 59 | 12,886 | – | 19,006 | 19,006 | |||||||||||||||||||||
254,348 | 158,455 | 47,526 | 73,298 | (22 | ) | 109,460 | ||||||||||||||||||||||
NET UNREALIZED | GROSS UNREALIZED | |||||||||||||||
TAX BASIS COST | APPRECIATION (DEPRECIATION) | Appreciation | Depreciation | |||||||||||||
Royce Pennsylvania Mutual Fund | $ | 4,048,123,363 | $ | 1,790,185,779 | $ | 1,997,292,565 | $ | 207,106,786 | ||||||||
Royce Micro-Cap Fund | 447,760,188 | 102,675,618 | 152,399,495 | 49,723,877 | ||||||||||||
Royce Premier Fund | 3,393,510,466 | 2,163,621,872 | 2,253,259,079 | 89,637,207 | ||||||||||||
Royce Low-Priced Stock Fund | 562,137,803 | 132,126,708 | 164,627,810 | 32,501,102 | ||||||||||||
Royce Total Return Fund | 3,097,471,367 | 1,539,601,720 | 1,716,198,884 | 176,597,164 | ||||||||||||
Royce Heritage Fund | 301,088,050 | 58,822,447 | 76,614,441 | 17,791,994 | ||||||||||||
Royce Opportunity Fund | 2,140,105,292 | 341,555,525 | 553,364,572 | 211,809,047 | ||||||||||||
Royce Special Equity Fund | 2,194,897,108 | 705,963,510 | 730,644,012 | 24,680,502 | ||||||||||||
Royce Value Fund | 719,813,899 | 165,844,871 | 210,097,529 | 44,252,658 | ||||||||||||
Royce Value Plus Fund | 808,767,788 | 226,422,264 | 274,575,557 | 48,153,293 | ||||||||||||
Royce 100 Fund | 170,075,798 | 49,815,509 | 53,331,373 | 3,515,864 | ||||||||||||
Royce Dividend Value Fund | 427,613,909 | 87,815,075 | 119,887,926 | 32,072,851 | ||||||||||||
Royce Global Value Fund | 100,634,048 | (3,123,062 | ) | 5,301,910 | 8,424,972 | |||||||||||
Royce International Smaller-Companies Fund | 35,899,187 | (1,477,137 | ) | 2,438,224 | 3,915,361 | |||||||||||
Royce Special Equity Multi-Cap Fund | 265,768,803 | 40,238,408 | 44,526,441 | 4,288,033 | ||||||||||||
The primary difference between book and tax basis cost is the timing of the recognition of losses on securities sold, investments in Real Estate Investment Trusts, investments in publicly traded partnerships and Trusts and mark-to-market of Passive Foreign Investment Companies.
Distributions during the years ended December 31, 2014 and 2013, were characterized as follows for tax purposes:
ORDINARY INCOME | LONG-TERM CAPITAL GAINS | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Royce Pennsylvania Mutual Fund | $ | 43,932,360 | $ | 68,505,591 | $ | 613,707,099 | $ | 314,540,158 | |||||
Royce Micro-Cap Fund | – | 698,929 | 52,387,408 | 59,822,655 | |||||||||
Royce Premier Fund | 20,910,671 | – | 536,357,291 | 690,663,435 | |||||||||
Royce Low-Priced Stock Fund | 339,434 | 2,484,427 | 211,494,646 | 208,678,815 | |||||||||
Royce Total Return Fund | 90,578,976 | 86,549,887 | 453,089,553 | 418,194,329 | |||||||||
Royce Heritage Fund | 2,018,745 | 7,208,445 | 17,471,788 | 33,627,291 | |||||||||
Royce Opportunity Fund | 17,017,298 | 3,806,785 | 279,105,352 | 229,125,496 | |||||||||
Royce Special Equity Fund | 26,352,843 | 36,829,522 | 253,819,292 | 263,642,808 | |||||||||
Royce Value Fund | 28,228,550 | 45,747,747 | 85,571,976 | 37,208,696 | |||||||||
Royce Value Plus Fund | 15,742,439 | 474,414 | 163,669,222 | 99,364,529 | |||||||||
Royce 100 Fund | 316,884 | 1,704,252 | 24,266,367 | 35,951,838 | |||||||||
Royce Dividend Value Fund | 12,195,408 | 14,413,334 | 23,024,780 | 27,540,201 | |||||||||
The Royce Funds 2014 Annual Report to Shareholders | 111 |
Notes to Financial Statements(continued) |
TAX INFORMATION (continued): |
ORDINARY INCOME | LONG-TERM CAPITAL GAINS | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Royce Global Value Fund | $ | 2,831,668 | $ | 2,317,411 | $ | – | $ | – | ||||||||
Royce International Smaller-Companies Fund | 2,170,556 | 673,503 | 1,733,853 | 1,430,858 | ||||||||||||
Royce Special Equity Multi-Cap Fund | 4,109,218 | 3,019,600 | 9,953,150 | 8,106,833 | ||||||||||||
The tax basis components of distributable earnings at December 31, 2014, were as follows:
UNDISTRIBUTED | QUALIFIED | |||||||||||||||||||||||
LONG-TERM | LATE YEAR | |||||||||||||||||||||||
UNDISTRIBUTED | CAPITAL GAINS OR | CAPITAL LOSS | NET UNREALIZED | ORDINARY AND | TOTAL | CAPITAL LOSS | ||||||||||||||||||
ORDINARY | (CAPITAL LOSS | CARRYFORWARD | APPRECIATION | POST-OCTOBER LOSS | DISTRIBUTABLE | CARRYFORWARD | ||||||||||||||||||
INCOME | CARRYFORWARD) | TO 12/31/171 | (DEPRECIATION)2 | DEFERRALS3 | EARNINGS | UTILIZED | ||||||||||||||||||
Royce Pennsylvania Mutual Fund | $6,703,294 | $225,295,994 | $ | – | $1,779,213,598 | $ | (442,035 | ) | $2,010,770,851 | $ | – | |||||||||||||
Royce Micro-Cap Fund | – | 24,143,596 | – | 102,658,941 | (1,643,412 | ) | 125,159,125 | – | ||||||||||||||||
Royce Premier Fund | 655,865 | 15,143,216 | – | 2,163,492,605 | – | 2,179,291,686 | – | |||||||||||||||||
Royce Low-Priced Stock Fund | 26,688 | – | – | 132,130,606 | (4,284,781 | ) | 127,872,513 | – | ||||||||||||||||
Royce Total Return Fund | 9,066,236 | 128,341,838 | – | 1,525,851,995 | (3,993,298 | ) | 1,659,266,771 | – | ||||||||||||||||
Royce Heritage Fund | 1,055,752 | 1,500,100 | – | 58,818,918 | (7,790 | ) | 61,366,980 | – | ||||||||||||||||
Royce Opportunity Fund | – | 21,206,723 | – | 341,555,467 | (8,266,736 | ) | 354,495,454 | – | ||||||||||||||||
Royce Special Equity Fund | 405,822 | 50,301,924 | – | 705,963,509 | – | 756,671,255 | – | |||||||||||||||||
Royce Value Fund | 3,513,483 | 18,760,576 | – | 165,844,873 | (7,840 | ) | 188,111,092 | – | ||||||||||||||||
Royce Value Plus Fund | 6,249,842 | 29,644,292 | – | 226,422,344 | – | 262,316,478 | – | |||||||||||||||||
Royce 100 Fund | 538,577 | 8,665,568 | – | 48,576,102 | – | 57,780,247 | – | |||||||||||||||||
Royce Dividend Value Fund | 2,708,160 | 7,749,024 | – | 87,828,842 | (14,529 | ) | 98,271,497 | – | ||||||||||||||||
Royce Global Value Fund | 164,121 | (32,992,507 | ) | (7,981,106 | ) | (3,142,515 | ) | (32,102,010 | ) | (76,054,017 | ) | 8,900,665 | ||||||||||||
Royce International Smaller-Companies Fund | 8,181 | 86 | – | (1,555,310 | ) | (2,543,011 | ) | (4,490,054 | ) | – | ||||||||||||||
Royce Special Equity Multi-Cap Fund | 2,009,858 | 6,403,867 | – | 40,238,407 | – | 48,652,132 | – | |||||||||||||||||
1 | On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted. Under the Act, net capital losses may be carried forward indefinitely, and their character is retained as short term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short term losses. As a transition rule, the Act requires that postenactment net capital losses be used before pre-enactment net capital losses. As a result of this ordering rule, pre-enactment capital loss carryforwards may expire unused, whereas under the previous rules these losses may have been utilized. This change is effective for fiscal years beginning after the date of enactment. |
2 | Includes timing differences on foreign currency, recognition of losses on securities sold, investments in Real Estate Investment Trusts, investments in publicly traded partnerships and Trusts and mark-to-market of Passive Foreign Investment Companies. |
3 | Under the current tax law, capital losses and qualified late year ordinary losses incurred after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. |
For financial reporting purposes, capital accounts and distributions to shareholders are adjusted to reflect the tax character of permanent book/tax differences. For the year ended December 31, 2014, the Funds recorded the following permanent reclassifications, which relate primarily to current net operating losses, distribution reclassifications, Real Estate Investment Trusts, publicly traded partnerships and Trusts, foreign currency transactions, equalization, non-deductible excise taxes paid and gains from the sale of Passive Foreign Investment Companies. Results of operations and net assets were not affected by these reclassifications.
UNDISTRIBUTED | ACCUMULATED | |||||||||||
NET INVESTMENT | NET REALIZED | PAID-IN | ||||||||||
INCOME (LOSS) | GAIN (LOSS) | CAPITAL | ||||||||||
Royce Pennsylvania Mutual Fund | $ | (2,474,638 | ) | $ | (95,292,987 | ) | $ | 97,767,625 | ||||
Royce Micro-Cap Fund | 7,361,902 | (4,795,535 | ) | (2,566,367 | ) | |||||||
Royce Premier Fund | 95,027 | (121,229,609 | ) | 121,134,582 | ||||||||
Royce Low-Priced Stock Fund | 1,020,767 | 9,276,749 | (10,297,516 | ) | ||||||||
Royce Total Return Fund | 36,840,380 | (123,337,451 | ) | 86,497,071 | ||||||||
Royce Heritage Fund | (105,493 | ) | 105,493 | – | ||||||||
Royce Opportunity Fund | 7,678,798 | (33,251,307 | ) | 25,572,509 | ||||||||
Royce Special Equity Fund | – | (30,115,425 | ) | 30,115,425 | ||||||||
Royce Value Fund | (426 | ) | (10,027,484 | ) | 10,027,910 | |||||||
Royce Value Plus Fund | 6,408,934 | (15,649,525 | ) | 9,240,591 | ||||||||
Royce 100 Fund | 807,383 | (5,663,489 | ) | 4,856,106 | ||||||||
Royce Dividend Value Fund | (631,907 | ) | 631,986 | (79 | ) | |||||||
Royce Global Value Fund | 690,454 | (688,179 | ) | (2,275 | ) | |||||||
Royce International Smaller-Companies Fund | 40,629 | (39,798 | ) | (831 | ) | |||||||
Royce Special Equity Multi-Cap Fund | – | – | – | |||||||||
Management has analyzed the Funds’ tax positions taken on federal income tax returns for all open tax years (2011 - 2014) and has as concluded that as of December 31, 2014, no provision for income tax is required in the Funds’ financial statements.
112 | The Royce Funds 2014 Annual Report to Shareholders |
MARKET | REALIZED | MARKET | |||||||||||||||||||||||
SHARES | VALUE | COST OF | COST OF | GAIN | DIVIDEND | SHARES | VALUE | ||||||||||||||||||
AFFILIATED COMPANY | 12/31/13 | 12/31/13 | PURCHASES | SALES | (LOSS) | INCOME | 12/31/14 | 12/31/14 | |||||||||||||||||
Royce Pennsylvania Mutual Fund | |||||||||||||||||||||||||
America’s Car-Mart | 711,516 | $ | 30,047,321 | $ | – | $ | 8,609,535 | $ | 1,142,294 | $ | – | 500,900 | $ | 26,738,042 | |||||||||||
DTS | 1,044,829 | 25,054,999 | 1,651,960 | 3,333,760 | 339,259 | – | 1,007,929 | 30,993,817 | |||||||||||||||||
Fabrinet | 1,727,113 | 35,509,443 | 7,550,413 | 6,927,829 | 453,516 | – | 1,790,355 | 31,760,898 | |||||||||||||||||
Key Tronic | 697,735 | 7,689,040 | 1,117 | 190,546 | (60,441 | ) | – | 681,935 | 5,414,564 | ||||||||||||||||
Landauer1 | 492,200 | 25,894,642 | 2,610,163 | 4,963,394 | (1,625,394 | ) | 1,106,930 | ||||||||||||||||||
PICO Holdings | 1,056,784 | 24,422,278 | 6,427,984 | – | – | – | 1,319,011 | 24,863,357 | |||||||||||||||||
Preformed Line Products | 349,478 | 25,567,810 | 182,411 | – | – | 281,982 | 352,478 | 19,255,873 | |||||||||||||||||
Stanley Furniture1 | 962,235 | 3,694,982 | – | 14,879,061 | (12,329,138 | ) | – | ||||||||||||||||||
STRATTEC SECURITY | 150,000 | 6,700,500 | 8,613,062 | – | – | 91,560 | 263,950 | 21,796,991 | |||||||||||||||||
Weyco Group | 590,500 | 17,378,415 | – | – | – | 442,875 | 590,500 | 17,520,135 | |||||||||||||||||
201,959,430 | (12,079,904 | ) | 1,923,347 | 178,343,677 | |||||||||||||||||||||
Royce Micro-Cap Fund | |||||||||||||||||||||||||
Key Technology | 370,814 | 5,313,765 | – | 427,775 | (31,755 | ) | – | 339,814 | 4,349,619 | ||||||||||||||||
Lincoln Educational Services1 | 1,295,222 | 6,450,206 | – | 4,747,645 | (3,489,010 | ) | 208,410 | ||||||||||||||||||
Truett-Hurst Cl. A | 191,900 | 800,223 | – | – | – | – | 191,900 | 758,005 | |||||||||||||||||
12,564,194 | (3,520,765 | ) | 208,410 | 5,107,624 | |||||||||||||||||||||
Royce Premier Fund | |||||||||||||||||||||||||
Acacia Research | 3,152,289 | 45,834,282 | 9,171,957 | 16,101,906 | (3,824,021 | ) | 1,822,326 | 3,075,472 | 52,098,496 | ||||||||||||||||
Benchmark Electronics | 2,843,900 | 65,637,212 | – | 2,841,662 | 649,351 | – | 2,702,100 | 68,741,424 | |||||||||||||||||
Cabot Microelectronics | 1,720,272 | 78,616,431 | – | 11,750,935 | 5,073,978 | – | 1,321,074 | 62,513,222 | |||||||||||||||||
Cal-Maine Foods1 | 1,721,686 | 103,697,148 | – | 16,761,349 | 30,747,611 | 2,757,458 | |||||||||||||||||||
Cirrus Logic1 | 4,420,181 | 90,304,298 | 29,305,907 | 90,995,298 | 10,737,246 | – | |||||||||||||||||||
Fair Isaac1 | 1,732,600 | 108,876,584 | – | 14,409,789 | 12,420,243 | 132,278 | |||||||||||||||||||
Fairchild Semiconductor International1 | 6,833,112 | 91,222,045 | – | 53,861,575 | (2,890,574 | ) | – | ||||||||||||||||||
Globe Specialty Metals | 5,532,472 | 99,639,821 | 3,870,526 | 10,540,966 | 789,466 | 1,683,442 | 5,094,972 | 87,786,367 | |||||||||||||||||
Kennedy-Wilson Holdings | 3,073,344 | 68,381,904 | 55,729,986 | 2,015,600 | 855,970 | 1,867,802 | 5,318,014 | 134,545,754 | |||||||||||||||||
Medicines Company (The)1 | 2,753,525 | 106,341,135 | 31,672,063 | 24,997,116 | (4,522,381 | ) | – | ||||||||||||||||||
MKS Instruments | 3,071,910 | 91,972,985 | 9,053,800 | 9,113,747 | 2,965,211 | 2,128,421 | 3,028,910 | 110,858,106 | |||||||||||||||||
Myriad Genetics1 | 6,343,965 | 133,096,386 | – | 88,377,860 | 27,692,524 | – | |||||||||||||||||||
Pan American Silver1 | 8,194,097 | 95,870,935 | 6,059,630 | 131,885,142 | (51,530,159 | ) | 4,253,424 | ||||||||||||||||||
Ritchie Bros. Auctioneers | 4,697,750 | 107,719,408 | 20,009,769 | 309,208 | 2,272,702 | 2,797,107 | 5,442,714 | 146,354,580 | |||||||||||||||||
Sanderson Farms1 | 1,329,008 | 96,127,148 | – | 19,480,266 | 26,267,793 | 1,533,639 | |||||||||||||||||||
Schnitzer Steel Industries Cl. A | 2,008,038 | 65,602,602 | – | 11,955,932 | (6,531,251 | ) | 1,466,235 | 1,795,805 | 40,513,361 | ||||||||||||||||
SEACOR Holdings | 735,065 | 67,037,928 | 19,682,483 | 1,055,840 | 293,963 | – | 982,527 | 72,520,318 | |||||||||||||||||
Semperit AG Holding | 1,917,496 | 94,951,140 | 2,671,360 | 1,488,893 | 632,621 | 3,238,836 | 1,927,361 | 93,265,167 | |||||||||||||||||
Silver Standard Resources1 | 4,115,069 | 28,640,880 | – | 90,485,519 | (63,063,631 | ) | – | ||||||||||||||||||
Simpson Manufacturing | 2,705,933 | 99,388,919 | – | 926,432 | 1,561,206 | 1,082,603 | 2,630,933 | 91,030,282 | |||||||||||||||||
Strayer Education1 | 1,018,485 | 35,107,178 | – | 130,161,939 | (62,206,824 | ) | – | ||||||||||||||||||
Thor Industries | 4,216,757 | 232,891,489 | – | 14,683,128 | 10,440,049 | 4,072,795 | 3,761,457 | 210,152,602 | |||||||||||||||||
Trican Well Service | 8,077,100 | 98,696,878 | 6,725,525 | 768,458 | 1,786,808 | 2,300,003 | 8,450,100 | 40,512,186 | |||||||||||||||||
Unit Corporation | 2,810,073 | 145,055,968 | – | 9,710,900 | 4,871,679 | – | 2,586,073 | 88,185,089 | |||||||||||||||||
Woodward1 | 3,806,024 | 173,592,755 | – | 7,082,562 | 33,504,222 | 1,161,392 | |||||||||||||||||||
2,424,303,459 | (21,006,198 | ) | 32,297,761 | 1,299,076,954 | |||||||||||||||||||||
Royce Low-Priced Stock Fund | |||||||||||||||||||||||||
Gladstone Land1 | 501,200 | 8,119,440 | – | 3,925,812 | (1,385,277 | ) | 177,313 | ||||||||||||||||||
Seabridge Gold1 | 2,476,592 | 18,079,122 | – | 20,652,230 | (4,930,859 | ) | – | ||||||||||||||||||
Tecumseh Products | 3,651,516 | – | – | – | 1,207,365 | 3,730,758 | |||||||||||||||||||
Universal Technical Institute1 | 1,468,679 | 20,429,325 | – | 14,607,795 | (5,770,996 | ) | 476,888 | ||||||||||||||||||
WaterFurnace Renewable Energy1 | 814,500 | 18,394,780 | – | 18,639,052 | 5,662,635 | 407,250 | |||||||||||||||||||
65,022,667 | (6,424,497 | ) | 1,061,451 | 3,730,758 | |||||||||||||||||||||
Royce Total Return Fund | |||||||||||||||||||||||||
Barry (R.G.)1 | 1,045,808 | 20,184,094 | – | 11,439,507 | 8,450,294 | 104,581 | |||||||||||||||||||
Chase Corporation | 773,974 | 27,321,282 | – | – | – | 464,384 | 773,974 | 27,855,324 | |||||||||||||||||
Houston Wire & Cable | 1,216,073 | 16,271,057 | 2,633,615 | 564,364 | (76,892 | ) | 637,638 | 1,378,225 | 16,469,789 | ||||||||||||||||
The Royce Funds 2014 Annual Report to Shareholders | 113 |
Notes to Financial Statements(continued) |
Transactions in Affiliated Companies (continued): |
MARKET | REALIZED | MARKET | |||||||||||||||||||||||
SHARES | VALUE | COST OF | COST OF | GAIN | DIVIDEND | SHARES | VALUE | ||||||||||||||||||
AFFILIATED COMPANY | 12/31/13 | 12/31/13 | PURCHASES | SALES | (LOSS) | INCOME | 12/31/14 | 12/31/14 | |||||||||||||||||
Royce Total Return Fund (continued) | |||||||||||||||||||||||||
Landauer | 427,671 | $ | 22,499,771 | $ | 4,840,603 | $ | 232,090 | $ | (27,744 | ) | $ | 1,048,834 | 553,400 | $ | 18,893,076 | ||||||||||
Mueller (Paul) Company | 116,700 | 3,571,020 | – | – | – | – | 116,700 | 5,391,540 | |||||||||||||||||
Peapack-Gladstone Financial1 | 604,692 | 11,549,617 | – | – | – | 120,938 | |||||||||||||||||||
Starrett (L.S.) Company (The) Cl. A | 529,400 | 7,713,358 | – | – | – | 211,760 | 529,400 | 10,550,942 | |||||||||||||||||
Village Super Market Cl. A1 | 732,024 | 22,700,064 | 16,337 | 1,582,441 | (316,205 | ) | 690,541 | ||||||||||||||||||
131,810,263 | 8,029,453 | 3,278,676 | 79,160,671 | ||||||||||||||||||||||
Royce Opportunity Fund | |||||||||||||||||||||||||
BTU International | 723,141 | 2,111,572 | 268,303 | – | – | – | 806,549 | 2,653,546 | |||||||||||||||||
CTPartners Executive Search1 | 483,837 | 2,709,487 | 391,356 | 3,500,053 | 1,323,183 | – | |||||||||||||||||||
Dixie Group | 802,653 | 10,595,020 | 829,794 | 720,637 | 45,387 | – | 845,735 | 7,755,390 | |||||||||||||||||
Hardinge1 | 629,571 | 9,109,892 | 165,052 | 603,530 | (90,730 | ) | 50,500 | ||||||||||||||||||
Identiv1 | 1,684,292 | 969,647 | 3,491,987 | 36,976 | 753 | – | |||||||||||||||||||
Interphase Corporation1 | 384,001 | 1,488,004 | 154,213 | 44,383 | (5,685 | ) | – | ||||||||||||||||||
Kid Brands1 | 1,202,959 | 1,227,018 | – | 3,981,741 | (3,784,318 | ) | – | ||||||||||||||||||
LMI Aerospace | 651,335 | 9,600,678 | 968,258 | 446,867 | (169,187 | ) | – | 702,037 | 9,898,722 | ||||||||||||||||
Magnetek1 | 166,017 | 3,971,127 | 547,738 | 427,156 | 360,634 | – | |||||||||||||||||||
Pericom Semiconductor | 1,380,517 | 12,231,381 | 665,380 | 2,600,984 | 309,060 | – | 1,221,199 | 16,535,034 | |||||||||||||||||
Planar Systems1 | 1,625,599 | 4,129,021 | – | 5,458,938 | (2,364,104 | ) | – | ||||||||||||||||||
SigmaTron International | 354,872 | 3,140,617 | 32,261 | 195,671 | (34,313 | ) | – | 345,772 | 2,309,757 | ||||||||||||||||
Spire Corporation | 660,120 | 316,924 | 12,659 | 12,156 | (5,294 | ) | – | 675,600 | 172,278 | ||||||||||||||||
TRC Companies | 1,712,926 | 12,230,292 | 151,744 | – | – | – | 1,740,430 | 11,034,326 | |||||||||||||||||
73,830,680 | (4,414,614 | ) | 50,500 | 50,359,053 | |||||||||||||||||||||
Royce Special Equity Fund | |||||||||||||||||||||||||
Arden Group Cl. A1 | 243,000 | 30,741,930 | – | 17,835,615 | 12,903,784 | – | |||||||||||||||||||
Atrion Corporation | 167,000 | 49,473,750 | – | 8,198,182 | 8,657,628 | 416,164 | 115,000 | 39,101,150 | |||||||||||||||||
AVX Corporation | 9,298,500 | 129,528,105 | 16,890,942 | 9,446,541 | (745,386 | ) | 3,968,949 | 9,900,000 | 138,600,000 | ||||||||||||||||
Bowl America Cl. A | 343,047 | 4,912,433 | 14 | – | – | 229,842 | 343,048 | 4,912,447 | |||||||||||||||||
Children’s Place | 2,100,000 | 119,637,000 | 3,703,448 | – | – | 1,148,775 | 2,170,000 | 123,690,000 | |||||||||||||||||
CSS Industries | 974,000 | 27,934,320 | – | 45,301 | 7,073 | 584,400 | 972,385 | 26,876,721 | |||||||||||||||||
EnerSys1 | 2,391,000 | 167,585,190 | 570,479 | 47,447,150 | 34,187,454 | 1,001,268 | |||||||||||||||||||
Finish Line (The) Cl. A | 4,958,000 | 139,666,860 | – | 4,296,864 | 1,161,056 | 1,578,720 | 4,775,000 | 116,080,250 | |||||||||||||||||
Foster (L.B.) Company | 1,000,000 | 47,290,000 | – | – | – | 130,000 | 1,000,000 | 48,570,000 | |||||||||||||||||
Frisch’s Restaurants | 505,100 | 12,945,713 | – | – | – | 383,876 | 505,100 | 13,536,680 | |||||||||||||||||
Hawkins | 989,000 | 36,780,910 | 6,127,630 | 7,865,488 | (631,261 | ) | 662,192 | 955,432 | 41,398,869 | ||||||||||||||||
Hurco Companies | 471,000 | 11,779,710 | 585,768 | 305,806 | 75,039 | 132,849 | 479,319 | 16,339,985 | |||||||||||||||||
LeapFrog Enterprises Cl. A1 | 4,100,000 | 32,554,000 | 16,685,452 | 51,166,207 | (18,156,841 | ) | – | ||||||||||||||||||
Meredith Corporation | 1,544,000 | 79,979,200 | 47,921,759 | 10,010,885 | 1,315,430 | 3,562,298 | 2,375,000 | 129,010,000 | |||||||||||||||||
Minerals Technologies1 | 3,075,000 | 184,715,250 | 417,912 | 51,218,555 | 43,336,688 | 508,735 | |||||||||||||||||||
National Presto Industries | 656,500 | 52,848,250 | – | – | – | 3,315,325 | 656,500 | 38,103,260 | |||||||||||||||||
Neenah Paper | 64,025,617 | – | – | 798,102 | 1,272,808 | 76,712,138 | |||||||||||||||||||
Park Electrochemical | 2,011,000 | 57,755,920 | 243,858 | 17,139,117 | (410,342 | ) | 5,702,313 | 1,458,382 | 36,357,463 | ||||||||||||||||
Plantronics1 | 2,215,000 | 102,886,750 | 3,182,875 | 23,446,562 | 8,641,371 | 1,220,000 | |||||||||||||||||||
ScanSource | 930,000 | 39,459,900 | 58,723,468 | 3,378,875 | (178,305 | ) | – | 2,400,000 | 96,384,000 | ||||||||||||||||
Scholastic Corporation | 2,910,000 | 98,969,100 | 94,668 | 6,905,641 | (361,873 | ) | 1,746,450 | 2,725,000 | 99,244,500 | ||||||||||||||||
Schulman (A.)1 | 1,487,000 | 52,431,620 | – | 30,694,230 | 25,394,028 | 590,945 | |||||||||||||||||||
Schweitzer-Mauduit International | 2,638,557 | 135,806,529 | 2,118,151 | 22,152,135 | (6,840,232 | ) | 3,785,956 | 2,300,000 | 97,290,000 | ||||||||||||||||
Standard Motor Products | 2,250,000 | 82,800,000 | 625,137 | – | – | 1,177,020 | 2,268,000 | 86,456,160 | |||||||||||||||||
UniFirst Corporation | 1,481,570 | 158,527,990 | 5,827,556 | – | – | 229,271 | 1,542,278 | 187,309,663 | |||||||||||||||||
Universal Corporation | 1,296,000 | 70,761,600 | 36,785,603 | 6,869,208 | (1,604,889 | ) | 3,128,863 | 1,900,000 | 83,562,000 | ||||||||||||||||
Weis Markets | 1,144,500 | 60,154,920 | 15,704,763 | – | – | 1,642,689 | 1,486,100 | 71,065,302 | |||||||||||||||||
1,987,926,950 | 106,750,422 | 37,645,002 | 1,570,600,588 | ||||||||||||||||||||||
Royce Value Plus Fund | |||||||||||||||||||||||||
Numerex Corporation Cl. A1 | 1,030,200 | 13,341,090 | – | 1,440,299 | (56,616 | ) | – | ||||||||||||||||||
13,341,090 | (56,616 | ) | – | ||||||||||||||||||||||
1 | Not an Affiliated Company at December 31, 2014. |
114 | The Royce Funds 2014 Annual Report to Shareholders |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of The Royce Fund and the Shareholders of Royce 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 100 Fund, Royce Dividend Value Fund, Royce Global Value Fund, Royce International Smaller-Companies Fund and Royce Special Equity Multi-Cap Fund.
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Royce 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 100 Fund, Royce Dividend Value Fund, Royce Global Value Fund, Royce International Smaller-Companies Fund and Royce Special Equity Multi-Cap Fund (constituting The Royce Fund, hereafter referred to as the “Funds”) at December 31, 2014, the results of their operations for the year then ended, the changes in their net assets and their financial highlights for each of the fiscal periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2014, by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 19, 2015
The Royce Funds 2014 Annual Report to Shareholders | 115 |
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 July 1, 2014, and held for the entire six-month period ended December 31, 2014. Service, Consultant, R and K 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 | HYPOTHETICAL (5% PER YEAR RETURN BEFORE EXPENSES) | ||||||||||||||||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During the | Beginning Account Value | Ending Account Value | Expenses Paid During the | Annualized Expense | |||||||||||||||||
7/1/14 | 12/31/14 | Period1 | 7/1/14 | 12/31/14 | Period1 | Ratio2 | |||||||||||||||||
Investment Class Royce Pennsylvania Mutual Fund | $ | 1,000.00 | $ | 973.17 | $ | 4.53 | $ | 1,000.00 | $ | 1,020.62 | $ | 4.63 | 0.91% | ||||||||||
Royce Micro-Cap Fund | 1,000.00 | 949.08 | 7.42 | 1,000.00 | 1,017.59 | 7.68 | 1.51% | ||||||||||||||||
Royce Premier Fund | 1,000.00 | 923.68 | 5.43 | 1,000.00 | 1,019.56 | 5.70 | 1.12% | ||||||||||||||||
Royce Low-Priced Stock Fund | 1,000.00 | 886.95 | 5.90 | 1,000.00 | 1,018.95 | 6.31 | 1.24% | ||||||||||||||||
Royce Total Return Fund | 1,000.00 | 986.38 | 5.71 | 1,000.00 | 1,019.46 | 5.80 | 1.14% | ||||||||||||||||
Royce Heritage Fund3 | 1,000.00 | 962.26 | 5.39 | 1,000.00 | 1,019.71 | 5.55 | 1.09% | ||||||||||||||||
Royce Opportunity Fund | 1,000.00 | 965.99 | 5.75 | 1,000.00 | 1,019.36 | 5.90 | 1.16% | ||||||||||||||||
Royce Special Equity Fund | 1,000.00 | 1,009.31 | 5.62 | 1,000.00 | 1,019.61 | 5.65 | 1.11% | ||||||||||||||||
Royce Value Fund | 1,000.00 | 968.33 | 5.76 | 1,000.00 | 1,019.36 | 5.90 | 1.16% | ||||||||||||||||
Royce Value Plus Fund | 1,000.00 | 998.78 | 6.70 | 1,000.00 | 1,018.50 | 6.77 | 1.33% | ||||||||||||||||
Royce 100 Fund | 1,000.00 | 942.54 | 6.12 | 1,000.00 | 1,018.90 | 6.36 | 1.25% | ||||||||||||||||
Royce Dividend Value Fund | 1,000.00 | 948.86 | 5.89 | 1,000.00 | 1,019.16 | 6.11 | 1.20% | ||||||||||||||||
Royce Global Value Fund | 1,000.00 | 850.62 | 7.00 | 1,000.00 | 1,017.64 | 7.63 | 1.50% | ||||||||||||||||
Royce International Smaller- Companies Fund | 1,000.00 | 871.14 | 6.79 | 1,000.00 | 1,017.95 | 7.32 | 1.44% | ||||||||||||||||
Royce Special Equity Multi-Cap Fund | 1,000.00 | 1,038.28 | 4.93 | 1,000.00 | 1,020.37 | 4.89 | 0.96% | ||||||||||||||||
Service Class Royce Pennsylvania Mutual Fund | 1,000.00 | 971.76 | 6.21 | 1,000.00 | 1,018.90 | 6.36 | 1.25% | ||||||||||||||||
Royce Micro-Cap Fund | 1,000.00 | 947.83 | 8.15 | 1,000.00 | 1,016.84 | 8.44 | 1.66% | ||||||||||||||||
Royce Premier Fund | 1,000.00 | 922.88 | 6.30 | 1,000.00 | 1,018.65 | 6.61 | 1.30% | ||||||||||||||||
Royce Low-Priced Stock Fund | 1,000.00 | 886.28 | 7.08 | 1,000.00 | 1,017.69 | 7.58 | 1.49% | ||||||||||||||||
Royce Total Return Fund | 1,000.00 | 985.79 | 6.51 | 1,000.00 | 1,018.65 | 6.61 | 1.30% | ||||||||||||||||
Royce Heritage Fund3 | 1,000.00 | 960.77 | 6.87 | 1,000.00 | 1,018.20 | 7.07 | 1.39% | ||||||||||||||||
Royce Opportunity Fund | 1,000.00 | 966.02 | 6.69 | 1,000.00 | 1,018.40 | 6.87 | 1.35% | ||||||||||||||||
Royce Special Equity Fund | 1,000.00 | 1,007.95 | 7.03 | 1,000.00 | 1,018.20 | 7.07 | 1.39% | ||||||||||||||||
Royce Value Fund | 1,000.00 | 966.81 | 7.04 | 1,000.00 | 1,018.05 | 7.22 | 1.42% | ||||||||||||||||
Royce Value Plus Fund | 1,000.00 | 998.24 | 6.85 | 1,000.00 | 1,018.35 | 6.92 | 1.36% | ||||||||||||||||
Royce 100 Fund | 1,000.00 | 941.15 | 7.63 | 1,000.00 | 1,017.34 | 7.93 | 1.56% | ||||||||||||||||
Royce Dividend Value Fund | 1,000.00 | 946.90 | 7.12 | 1,000.00 | 1,017.90 | 7.38 | 1.45% | ||||||||||||||||
Royce Global Value Fund | 1,000.00 | 848.68 | 7.87 | 1,000.00 | 1,016.69 | 8.59 | 1.69% | ||||||||||||||||
116 | The Royce Funds 2014 Annual Report to Shareholders |
ACTUAL | HYPOTHETICAL (5% PER YEAR RETURN BEFORE EXPENSES) | ||||||||||||||||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During the | Beginning Account Value | Ending Account Value | Expenses Paid During the | Annualized Expense | |||||||||||||||||
7/1/14 | 12/31/14 | Period1 | 7/1/14 | 12/31/14 | Period1 | Ratio2 | |||||||||||||||||
Service Class (continued) Royce International Smaller- Companies Fund | $ | 1,000.00 | $ | 869.83 | $ | 8.01 | $ | 1,000.00 | $ | 1,016.64 | $ | 8.64 | 1.70% | ||||||||||
Royce Special Equity Multi-Cap Fund | 1,000.00 | 1,037.35 | 6.37 | 1,000.00 | 1,018.95 | 6.31 | 1.24% | ||||||||||||||||
Consultant Class Royce Pennsylvania Mutual Fund | 1,000.00 | 968.61 | 9.48 | 1,000.00 | 1,015.58 | 9.70 | 1.91% | ||||||||||||||||
Royce Micro-Cap Fund | 1,000.00 | 944.48 | 12.11 | 1,000.00 | 1,012.75 | 12.53 | 2.47% | ||||||||||||||||
Royce Premier Fund | 1,000.00 | 918.89 | 10.16 | 1,000.00 | 1,014.62 | 10.66 | 2.10% | ||||||||||||||||
Royce Total Return Fund | 1,000.00 | 981.37 | 10.59 | 1,000.00 | 1,014.52 | 10.76 | 2.12% | ||||||||||||||||
Royce Heritage Fund3 | 1,000.00 | 956.22 | 11.29 | 1,000.00 | 1,013.66 | 11.62 | 2.29% | ||||||||||||||||
Royce Opportunity Fund | 1,000.00 | 960.64 | 11.12 | 1,000.00 | 1,013.86 | 11.42 | 2.25% | ||||||||||||||||
Royce Special Equity Fund | 1,000.00 | 1,003.80 | 10.76 | 1,000.00 | 1,014.47 | 10.82 | 2.13% | ||||||||||||||||
Royce Value Fund | 1,000.00 | 963.03 | 10.79 | 1,000.00 | 1,014.22 | 11.07 | 2.18% | ||||||||||||||||
Royce Value Plus Fund | 1,000.00 | 993.84 | 11.41 | 1,000.00 | 1,013.76 | 11.52 | 2.27% | ||||||||||||||||
Royce Dividend Value Fund | 1,000.00 | 943.14 | 10.97 | 1,000.00 | 1,013.91 | 11.37 | 2.24% | ||||||||||||||||
Royce Global Value Fund | 1,000.00 | 845.90 | 11.35 | 1,000.00 | 1,012.91 | 12.38 | 2.44% | ||||||||||||||||
Royce Special Equity Multi-Cap Fund | 1,000.00 | 1,033.09 | 10.20 | 1,000.00 | 1,015.17 | 10.11 | 1.99% | ||||||||||||||||
Institutional Class Royce Pennsylvania Mutual Fund | 1,000.00 | 973.74 | 3.98 | 1,000.00 | 1,021.17 | 4.08 | 0.80% | ||||||||||||||||
Royce Premier Fund | 1,000.00 | 924.15 | 4.80 | 1,000.00 | 1,020.21 | 5.04 | 0.99% | ||||||||||||||||
Royce Low-Priced Stock Fund | 1,000.00 | 888.35 | 4.52 | 1,000.00 | 1,020.42 | 4.84 | 0.95% | ||||||||||||||||
Royce Total Return Fund | 1,000.00 | 987.86 | 5.01 | 1,000.00 | 1,020.16 | 5.09 | 1.00% | ||||||||||||||||
Royce Opportunity Fund | 1,000.00 | 967.01 | 5.16 | 1,000.00 | 1,019.96 | 5.30 | 1.04% | ||||||||||||||||
Royce Special Equity Fund | 1,000.00 | 1,009.71 | 5.17 | 1,000.00 | 1,020.06 | 5.19 | 1.02% | ||||||||||||||||
Royce Value Fund | 1,000.00 | 968.47 | 5.21 | 1,000.00 | 1,019.91 | 5.35 | 1.05% | ||||||||||||||||
Royce Value Plus Fund | 1,000.00 | 999.30 | 5.09 | 1,000.00 | 1,020.11 | 5.14 | 1.01% | ||||||||||||||||
Royce Dividend Value Fund | 1,000.00 | 949.09 | 5.11 | 1,000.00 | 1,019.96 | 5.30 | 1.04% | ||||||||||||||||
Royce International Smaller- Companies Fund | 1,000.00 | 871.17 | 6.79 | 1,000.00 | 1,017.95 | 7.32 | 1.44% | ||||||||||||||||
Royce Special Equity Multi-Cap Fund | 1,000.00 | 1,038.66 | 4.57 | 1,000.00 | 1,020.72 | 4.53 | 0.89% | ||||||||||||||||
W Class Royce Premier Fund | 1,000.00 | 923.96 | 5.19 | 1,000.00 | 1,019.81 | 5.45 | 1.07% | ||||||||||||||||
Royce Total Return Fund | 1,000.00 | 987.06 | 5.76 | 1,000.00 | 1,019.41 | 5.85 | 1.15% | ||||||||||||||||
R Class Royce Pennsylvania Mutual Fund | 1,000.00 | 970.20 | 7.15 | 1,000.00 | 1,017.95 | 7.32 | 1.44% | ||||||||||||||||
Royce Premier Fund | 1,000.00 | 921.05 | 8.28 | 1,000.00 | 1,016.59 | 8.69 | 1.71% | ||||||||||||||||
Royce Low-Priced Stock Fund | 1,000.00 | 884.22 | 8.74 | 1,000.00 | 1,015.93 | 9.35 | 1.84% | ||||||||||||||||
Royce Total Return Fund | 1,000.00 | 983.80 | 8.70 | 1,000.00 | 1,016.43 | 8.84 | 1.74% | ||||||||||||||||
Royce Heritage Fund | 1,000.00 | 958.57 | 9.08 | 1,000.00 | 1,015.93 | 9.35 | 1.84% | ||||||||||||||||
Royce Opportunity Fund | 1,000.00 | 962.69 | 9.20 | 1,000.00 | 1,015.83 | 9.45 | 1.86% | ||||||||||||||||
Royce Value Fund | 1,000.00 | 965.18 | 8.62 | 1,000.00 | 1,016.43 | 8.84 | 1.74% | ||||||||||||||||
Royce Value Plus Fund | 1,000.00 | 995.75 | 9.26 | 1,000.00 | 1,015.93 | 9.35 | 1.84% | ||||||||||||||||
Royce 100 Fund | 1,000.00 | 940.13 | 9.00 | 1,000.00 | 1,015.93 | 9.35 | 1.84% | ||||||||||||||||
Royce Global Value Fund | 1,000.00 | 848.01 | 9.22 | 1,000.00 | 1,015.22 | 10.06 | 1.98% | ||||||||||||||||
K Class Royce Pennsylvania Mutual Fund | 1,000.00 | 970.47 | 7.65 | 1,000.00 | 1,017.44 | 7.83 | 1.54% | ||||||||||||||||
Royce Premier Fund | 1,000.00 | 919.78 | 8.86 | 1,000.00 | 1,015.98 | 9.30 | 1.83% | ||||||||||||||||
Royce Low-Priced Stock Fund | 1,000.00 | 884.83 | 7.55 | 1,000.00 | 1,017.19 | 8.08 | 1.59% | ||||||||||||||||
Royce Total Return Fund | 1,000.00 | 985.40 | 7.11 | 1,000.00 | 1,018.05 | 7.22 | 1.42% | ||||||||||||||||
Royce Heritage Fund | 1,000.00 | 959.76 | 7.85 | 1,000.00 | 1,017.19 | 8.08 | 1.59% | ||||||||||||||||
Royce Opportunity Fund | 1,000.00 | 963.53 | 8.76 | 1,000.00 | 1,016.28 | 9.00 | 1.77% | ||||||||||||||||
Royce Value Fund | 1,000.00 | 965.10 | 8.57 | 1,000.00 | 1,016.48 | 8.79 | 1.73% | ||||||||||||||||
Royce Value Plus Fund | 1,000.00 | 997.51 | 8.01 | 1,000.00 | 1,017.19 | 8.08 | 1.59% | ||||||||||||||||
Royce 100 Fund | 1,000.00 | 941.08 | 7.78 | 1,000.00 | 1,017.19 | 8.08 | 1.59% | ||||||||||||||||
Royce Global Value Fund | 1,000.00 | 848.80 | 8.11 | 1,000.00 | 1,016.43 | 8.84 | 1.74% | ||||||||||||||||
The Royce Funds 2014 Annual Report to Shareholders | 117 |
Federal Tax Information
In January 2015, taxable shareholders were mailed a Form 1099-DIV reporting the federal tax status of all distributions paid during the calendar year 2014.
2014 Supplemental Tax Information:
% | % U.S. GOVT | % INCOME QUALIFYING | LONG-TERM CAPITAL GAIN DISTRIBUTION OR | |
FUND | QDI | INCOME | FOR DRD | MAXIMUM ALLOWABLE (000’S) |
Royce Pennsylvania Mutual Fund | 90.01% | N/A | 100.00% | $711,475 |
Royce Micro-Cap Fund | 0.00% | N/A | 0.00% | 52,387 |
Royce Premier Fund | 100.00% | N/A | 100.00% | 582,811 |
Royce Low-Priced Stock Fund | 100.00% | N/A | 100.00% | 211,495 |
Royce Total Return Fund | 67.82% | N/A | 80.36% | 508,503 |
Royce Heritage Fund | 63.07% | N/A | 100.00% | 17,472 |
Royce Opportunity Fund | 100.00% | N/A | 81.50% | 304,678 |
Royce Special Equity Fund | 72.89% | N/A | 100.00% | 283,935 |
Royce Value Fund | 51.39% | N/A | 44.53% | 95,600 |
Royce Value Plus Fund | 42.09% | N/A | 31.48% | 173,440 |
Royce 100 Fund | 100.00% | N/A | 100.00% | 29,156 |
Royce Dividend Value Fund | 79.15% | N/A | 60.87% | 23,025 |
Royce Global Value Fund | 100.00% | N/A | 4.93% | – |
Royce International Smaller-Companies Fund | 39.12% | N/A | 0.00% | 1,734 |
Royce Special Equity Multi-Cap Fund | 54.48% | N/A | 100.00% | 9,953 |
DEFINITIONS: | |
% | QDI: Qualified Dividend Income; % of net investment income and/or short-term capital gains distributions that qualify for treatment at long-term capital gain rates. |
% | U.S. Govt Income: % of investment income paid from U.S. Government obligations. |
% | Income Qualifying for DRD: % of investment income eligible for the corporate dividend received deduction. |
FUND | NET FOREIGN SOURCE INCOME | NET FOREIGN SOURCE INCOME PER SHARE | FOREIGN TAX | FOREIGN TAX PER SHARE | ||||
Royce Global Value Fund | $2,344,727 | $0.2023 | $378,832 | $0.0327 | ||||
Royce International Smaller-Companies Fund | 804,542 | 0.2661 | 101,186 | 0.0335 | ||||
118 | The Royce Funds 2014 Annual Report to Shareholders |
Trustees and Officers |
All Trustees and Officers may be reached c/o The Royce Funds, 745 Fifth Avenue, New York, NY 10151 |
Charles M. Royce, Trustee1, President |
Age: 75 | Number of Funds Overseen: 33 | Tenure: Since 1982 |
Non-Royce Directorships: Director of TICC Capital Corp. |
Principal Occupation(s) During Past Five Years: Chief Executive Officer and Chairman of Board of Managers of Royce & Associates, LLC (“Royce”), the Trust’s investment adviser. |
Christopher D. Clark, Trustee1, Vice President |
Age: 49 | Number of Funds Overseen: 32 | Tenure: Since 2014 |
Principal Occupation(s) During Past Five Years: President (since July 2014), Co-Chief Investment Officer (Since January 2014) and Managing Director of Royce, having been employed by Royce since May 2007. |
Patricia W. Chadwick, Trustee |
Age: 66 | Number of Funds Overseen: 33 | Tenure: Since 2009 |
Non-Royce Directorships: Trustee of ING Mutual Funds and Director of Wisconsin Energy Corp. |
Principal Occupation(s) During Past 5 Years: Consultant and President of Ravengate Partners LLC (since 2000). |
Richard M. Galkin, Trustee |
Age: 76 | Number of Funds Overseen: 33 | 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: 75 | Number of Funds Overseen: 33 | Tenure: Since 1989 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: Attorney and President of Health Policy Associates, Inc., consultants. Mr. Isaacs’s prior business experience includes having served as President of the Center for Health and Social Policy (from 1996 to 2012); Director of Columbia University Development Law and Policy Program and Professor at Columbia University (until August 1996). |
Arthur S. Mehlman, Trustee |
Age: 72 | Number of Funds Overseen: 51 | Tenure: Since 2004 |
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 18 Legg Mason Funds. |
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 Municipal Mortgage & Equity, LLC (from October 2004 to April 1, 2011); 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). |
David L. Meister, Trustee |
Age: 75 | Number of Funds Overseen: 33 | Tenure: Since 1982 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: Consultant. Chairman and Chief Executive Officer of The Tennis Channel (from June 2000 to March 2005). Mr. Meister’s prior business experience includes having served as Chief Executive Officer of Seniorlife.com, a consultant to the communications industry, President of Financial News Network, Senior Vice President of HBO, President of Time-Life Films, and Head of Broadcasting for Major League Baseball. |
G. Peter O’Brien, Trustee |
Age: 69 | Number of Funds Overseen: 51 | Tenure: Since 2001 |
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 18 Legg Mason Funds; Director of TICC Capital Corp. |
Principal Occupation(s) During Past Five Years: Trustee Emeritus of Colgate University (since 2005); Board Member of Hill House, Inc. (since 1999); Formerly: Trustee of Colgate University (from 1996 to 2005), President of Hill House, Inc. (from 2001 to 2005) and Managing Director/Equity Capital Markets Group of Merrill Lynch & Co. (from 1971 to 1999). |
John D. Diederich, Vice President and Treasurer |
Age: 63 | Tenure: Since 2001 |
Principal Occupation(s) During Past Five Years: Chief Operating Officer, Managing Director and member of the Board of Managers of Royce; Chief Financial Officer of Royce; Director of Administration of the Trust; and President of RFS, having been employed by Royce since April 1993. |
Jack E. Fockler, Jr., Vice President |
Age: 56 | Tenure: Since 1995 |
Principal Occupation(s) During Past Five Years: Managing Director and Vice President of Royce, and Vice President of RFS, having been employed by Royce since October 1989. |
Daniel A. O’Byrne, Vice President and Assistant Secretary |
Age: 52 | Tenure: Since 1994 |
Principal Occupation(s) During Past Five Years: Principal and Vice President of Royce, having been employed by Royce since October 1986. |
Francis D. Gannon, Vice President |
Age: 47 | Tenure: Since 2014 |
Principal Occupation(s) During Past Five Years: Co-Chief Investment Officer (Since January 2014) and Managing Director of Royce, having been employed by Royce since September 2006. |
John E. Denneen, Secretary and Chief Legal Officer |
Age: 47 | Tenure: 1996-2001 and Since April 2002 |
Principal Occupation(s) During Past Five Years: General Counsel, Chief Legal and Compliance Officer, and Secretary of Royce; Secretary and Chief Legal Officer of The Royce Funds. |
Lisa Curcio, Chief Compliance Officer |
Age: 55 | Tenure: Since 2004 |
Principal Occupation(s) During Past Five Years: Chief Compliance Officer of The Royce Funds (since October 2004) and Compliance Officer of Royce (since June 2004). |
The Royce Funds 2014 Annual Report to Shareholders | 119 |
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 December 31, 2014, 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 December 31, 2014 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.
Sector weightings are determined using the Global Industry Classification Standard (“GICS”). GICS was developed by, and is the exclusive property of, Standard & Poor’s Financial Services LLC (“S&P”) and MSCI Inc. (“MSCI”). GICS is the trademark of S&P and MSCI. “Global Industry Classification Standard (GICS)” and “GICS Direct” are service marks of S&P and MSCI.
All indexes referred to are unmanaged and capitalization weighted. Each index’s returns include net reinvested dividends and/or interest income. Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. The Russell 2000 is an index of domestic small-cap stocks. It measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 Index. The Russell 1000 Index is an index of domestic large-cap stocks. It measures the performance of the 1,000 largest publicly traded U.S. companies in the Russell 3000 Index. The Russell Microcap Index includes 1,000 of the smallest securities in the Russell 2000 Index, along with the next smallest eligible securities as determined by Russell. The Russell Mid-cap Index measures the performance of the mid-cap segment of the U.S. equity universe. It includes approximately 800 of the smallest securities in the Russell 1000 Index. The Russell Global Small Cap Index is an index of global small-cap stocks. The Russell Global ex-U.S. Small Cap Index is an index of global small-cap stocks, excluding the United States. The Russell Global ex-U.S. Large Cap Index is an index of global large-cap stocks, excluding the United States. The S&P 500 is an index of U.S. large-cap stocks, selected by Standard & Poor’s based on market size, liquidity, and industry grouping, among other factors. The Nasdaq Composite is an index of the more than 3,000 common equities listed on the Nasdaq stock exchange. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index. Returns for the market indexes used in this report were based on information supplied to Royce by Russell Investments. Royce has not independently verified the above described information.
The Price-Earnings, or P/E, Ratio is calculated by dividing a company’s share price by its trailing 12-month earnings-per share (EPS). The Price-to-Book, or P/B, Ratio is calculated by dividing a company’s share price by its book value per share. Standard deviation is a statistical measure within which a fund’s total returns have varied over time. The greater the standard deviation, the greater a fund’s volatility. The Morningstar Style Map uses proprietary scores of a stock’s value and growth characteristics to determine its placement in one of the five categories listed on the horizontal axis. These characteristics are then compared to those of other stocks within the same market capitalization band. Each is scored from zero to 100 for both value and growth attributes. The value score is subtracted from the growth score to determine the overall style score. For the vertical, market cap axis, Morningstar subdivides into size groups. Giant-cap stocks are defined as those that account for the top 40% of the capitalization of each style zone; large-cap stocks represent the next 30%; mid-cap stocks the next 20%; small-cap stocks the next 7%; micro-cap stocks the smallest 3%. Investments in securities of micro-cap, small-cap, and/ or mid-cap companies may involve considerably more risk than investments in securities of larger-cap companies. (Please see “Primary Risks for Fund Investors” in the prospectus.) Investments in foreign securities, which generally may involve political, economic, currency, and other risks not encountered in U.S. investments. (Please see “Investing in Foreign Securities” in the prospectus.) A Fund that invests a significant portion of its assets in a limited number of stocks may be subject to considerably more risk than a more broadly diversified Fund because a decline in the value of any of these stocks would cause that Fund’s overall value to decline to a greater degree. A broadly diversified portfolio does not, however, ensure a profit for a Fund or guarantee against loss. Please read the prospectus carefully before investing or sending money. A copy of the Funds’ current prospectus and Statement of Additional Information may be obtained by calling (800) 221-4268 or by visiting www.roycefunds.com. All publicly released material Fund information is disclosed by the Funds on their website at www.roycefunds.com. The Royce Funds is a service mark of The Royce Funds. Distributor: Royce Fund Services, Inc.
• | 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.
The Royce Funds have based the forward-looking statements included in this review and report on information available to us on the date of the report, and we assume no obligation to update any such forward-looking statements. Although The Royce Funds undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise, you are advised to consult any additional disclosures that we may make through future shareholder communications or reports.
120 | The Royce Funds 2014 Annual Report to Shareholders |
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About The Royce Funds | Contact Us | ||||
Wealth of Experience With approximately $32 billion in total assets under management, Royce & Associates is committed to the same investment principles that have served us well for more than 40 years. Chuck Royce, our Chief Executive Officer, enjoys one of the longest tenures of any active mutual fund manager. Royce’s investment staff also includes 24 portfolio managers and analysts and nine traders. | GENERAL INFORMATION General Royce Funds information including: • How to open an account • An overview of our firm and Funds • Ordering literature including Prospectuses (800) 221-4268 | ||||
Multiple Funds, Common Focus Our goal is to offer both individual and institutional investors the best available micro-cap, small-cap, and/or mid-cap portfolios. We have chosen to concentrate on smaller-company investing by providing investors with a range of funds that take full advantage of this large and diverse sector. | ACCOUNT INFORMATION Speak with a representative about: • Your account, transactions, and forms (800) 841-1180 | ||||
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 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. | FINANCIAL ADVISORS, CONSULTANTS, AND INSTITUTIONS Speak with your regional Royce contact regarding: • Scheduling a meeting or call • Information about our firm, strategies, and funds • Resources for financial professionals, such as portfolio attribution reports (800) 337-6923 | ||||
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 more than $185 million invested in The Royce Funds and are often among the largest individual shareholders. | AUTOMATED ACCOUNT INFORMATION 24-hour Automated Telephone Service (800) 878-6923 | ||||
roycefunds.com | |||||
DECEMBER 31, 2014 | ||
2014 Annual | ||
Review and Report to Shareholders | ||
Royce Select Fund I | ||||
Royce Select Fund II | ||||
Royce Enterprise Select Fund | ||||
Royce Opportunity Select Fund | ||||
Royce Micro-Cap Discovery Fund | ||||
Royce Financial Services Fund | ||||
Royce SMid-Cap Value Fund | ||||
Royce Partners Fund | ||||
Royce European | ||||
Smaller-Companies Fund | ||||
Royce Global Dividend Value Fund | ||||
Royce International Micro-Cap Fund | ||||
Royce International Premier Fund | ||||
roycefunds.com | ||||
Table of Contents | |||
Annual Review | |||
Letter to Our Shareholders | 1 | ||
Performance and Expenses | 5 | ||
Annual Report to Shareholders | |||
Manager’s Discussions of Fund Performance | |||
Royce Select Fund I | 6 | ||
Royce Select Fund II | 8 | ||
Royce Enterprise Select Fund | 10 | ||
Royce Opportunity Select Fund | 12 | ||
Royce Micro-Cap Discovery Fund | 14 | ||
Royce Financial Services Fund | 16 | ||
Royce SMid-Cap Value Fund | 18 | ||
Royce Partners Fund | 20 | ||
Royce European Smaller-Companies Fund | 22 | ||
Royce Global Dividend Value Fund | 24 | ||
Royce International Micro-Cap Fund | 26 | ||
Royce International Premier Fund | 28 | ||
Schedules of Investments and Financial Statements | 30 | ||
Notes to Financial Statements | 62 | ||
Report of Independent Registered Public Accounting Firm | 70 | ||
Understanding Your Fund’s Expenses | 71 | ||
Federal Tax Information | 72 | ||
Trustees and Officers | 73 | ||
Notes to Performance and Other Important Information | 74 |
This page is not part of the 2014 Annual Report to Shareholders |
LETTER TO OUR SHAREHOLDERS
Letter to Our Shareholders
A TALE OF TWO MARKETS
It wasn’t the best of times; it wasn’t the worst of times. As 2014 began, it all seemed just right, with small-caps easing into the year on a more mutedly bullish note following their extraordinary run in 2013. So relaxed was the pace of returns, and in such stark contrast to the eventful years of 2008-2013, that in our June 30 Semiannual Review we remarked on how agreeably peaceful and undramatic it all was. During the year’s first six months, inflation was nearly non-existent, most commodity prices were stable, and volatility, as measured by the VIX, reached the end of June at its lowest level since 2007. These factors, along with a sprightly M&A market, looked to us like clear signs of ongoing growth. The case appeared even stronger as the Federal Reserve moved further and further into the background of the U.S. economy. We were not alone in thinking that the anticipated end of QE (“quantitative easing”) and what looked like an inevitable rise in interest rates would set the stage for a more dynamic pace of economic expansion. We also thought an extension of the bull market that began off the March 9, 2009 bottom seemed likely, though we were expecting both lower returns and increased volatility. |
As it happens, this call was somewhat accurate: the economy did pick up speed in the second half while the bull market rolled on for large-cap stocks. More turbulent, small-caps (along with most Energy stocks) could not keep up. Of course, equity markets simply do not stay undisturbed for long, so the increased volatility in the second half of 2014 was not a surprise. Yet its highly selective reach was puzzling, even allowing for the historically higher volatility exhibited by smaller companies. Shortly after the Russell 2000 Index established a year-to-date high on July 3 (a high that would last into late December), small-cap prices began to fall. They slid most precipitously in July and September and rallied to varying degrees in August, October, November, and December. The downdrafts were sharper than the upswings, however—it took a furious rally in the final two weeks of the year’s closing month to shore up a modest positive return for the Russell 2000 in the second half. Meanwhile, the S&P 500 and Russell 1000 Indexes lost comparatively little in those two bearish months and posted solid gains during the other four. The upshot was such a strong year for large-cap companies that 2014 was the ninth-largest calendar-year |
This page is not part of the 2014 Annual Report to Shareholders | 1 |
LETTER TO OUR SHAREHOLDERS
spread between the Russell 2000 and the S&P 500 in the 36-year history of the small-cap index. Non-U.S. markets endured a greater struggle. Many European stocks experienced second-quarter declines while the U.S. and many Asian markets remained positive. Nearly all non-U.S. markets declined in the third-quarter and did not enjoy the fourth-quarter recovery that benefited so many U.S. stocks. What, then, to make of a year in which the Russell 2000 posted a relatively undistinguished single-digit gain of 4.9%, ceded leadership to its larger siblings, and still bested most actively managed small-cap portfolios? A few developments in particular stood out. First, the rotation in leadership from small-cap to large in 2014 looked very much like a classic case of reversion to the mean to us. The former led the market decisively from the bottom in March of 2009 through the end of 2013, a prolonged period of small-cap leadership that made a shift all but inevitable. The second trend was more worrisome. Within small-cap, more economically cyclical sectors continued to lag in spite of the growing economy. The same held true for what we define as quality companies—those with strong balance sheets and high returns on invested capital. Even with the economy accelerating, investors tended to ignore profitable companies with solid fundamentals while they continued to be drawn more to defensive and/or high-growth areas. This included utilities and REITs among the highly successful defensive areas of 2014, and social media, biotech, and pharmaceuticals among the speedy growth industries. In most instances, companies |
in these sectors and industries do not satisfy our purchase criteria because they lack the combination of balance-sheet strength and a long-term history of profitability that we find most attractive. Even with the economy accelerating, investors tended to ignore profitable companies with solid fundamentals while they continued to be drawn more to defensive and/or high-growth areas. We were hopeful that the end of QE (along with rising rates) would help to reverse this trend. But the strengthening U.S. dollar and monetary stimulus efforts in Japan and Europe conspired to make the October conclusion of QE something of a non-event, while interest rates fell through most of the year. On the whole, then, 2014 was an often confounding period for us, especially its second half. Indeed, if there is a theme that best captures the year, it might be “A Tale of Two Markets.” And we should point out that Dickens’s rubric covers not just the very different halves of the year for small-cap stocks but also the disparity in results and volatility between domestic small-caps and their bigger siblings as well as that between U.S. equities and any of those outside the U.S. (More index returns can be found in the table below.) VOLATILITY—OUR MUTUAL FRIEND Yet the level of conviction in our value-oriented approaches remains high. Although it may seem counterintuitive (or worse), the current extended period of relative underperformance for many |
Equity Indexes | ||
As of December 31, 2014 (%) | ||
• | The third quarter was the worst for the Russell 2000 since 9/30/11 and, relative to the S&P 500, was the index’s worst quarterly performance since 3/31/99. It also ended a streak of eight consecutive quarters of positive performance. | |
• | Small-caps rallied in October and December to outpace their large-cap counterparts in the fourth quarter. | |
• | 2014 marked just the fifth time since its inception in 1979 that the Russell 2000 had a gain in the single digits (+4.9%). Small-caps trailed large-caps by the widest margin since 1998. | |
• | Within the Russell 2000, Health Care, Utilities, and REITs were the best-performing areas in 2014 while Energy was by far the largest detractor. |
3Q14 | 1 | 4Q14 | 1 | 1-YR | 3-YR | 5-YR | 10-YR | ||||||
Russell 2000 | -7.36 | 9.73 | 4.89 | 19.21 | 15.55 | 7.77 | |||||||
S&P 500 | 1.13 | 4.93 | 13.69 | 20.41 | 15.45 | 7.67 | |||||||
Russell 1000 | 0.65 | 4.88 | 13.24 | 20.62 | 15.64 | 7.96 | |||||||
Nasdaq Composite | 1.93 | 5.40 | 13.40 | 22.05 | 15.85 | 8.09 | |||||||
Russell Midcap | -1.66 | 5.94 | 13.22 | 21.40 | 17.19 | 9.56 | |||||||
Russell Microcap | -8.21 | 11.19 | 3.65 | 21.81 | 16.14 | 5.96 | |||||||
Russell Global ex-U.S. Small Cap | -6.21 | -4.45 | -3.63 | 10.31 | 6.40 | 6.65 | |||||||
Russell Global ex-U.S. Large Cap | -5.35 | -3.72 | -3.57 | 9.41 | 4.80 | 5.36 | |||||||
1 Not annualized | |||||||||||||
For details on The Royce Funds’ performance in the period, please turn to the Managers’ Discussions that begin on page 8. |
2 | This page is not part of the 2014 Annual Report to Shareholders |
LETTER TO OUR SHAREHOLDERS
Royce-managed portfolios actually helps to fuel our confidence in the years to come. Let us explain why. First, we have always viewed volatility as an ally, agreeing with Warren Buffett’s statement: “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.” So while many investors think of volatility as being synonymous (or nearly so) with risk or even loss, we have never seen it that way. Instead, we try to take advantage of market movements—an essential skill for any successful active manager. Those times when the market cannot seem to make up its mind are exactly when securities tend to be most mispriced. And therein lies one of the keys to outperformance for active managers—the identification and purchase of mispriced securities. While many investors think of volatility as being synonymous (or nearly so) with risk or even loss, we have never seen it that way. We conducted research that looked at some of the market forces that have helped to shape the current U.S. cycle, in particular the years from 2011-2014 when many active approaches struggled on a relative basis. (The full results of this research are available on our website at www.roycefunds.com/4qresearch.) As we have previously argued, the Fed’s easy-money policies of QE and ZIRP (“zero-interest rates”) have had the unintentional effect of stoking appetites for high yield and creating too few (if any) consequences for companies carrying a lot of debt. This led many investors to relatively neglect businesses with more pristine balance sheets and/ or those with steady but smaller dividends. It also meant that from the beginning of 2011 through the end of 2014, the small-cap market was in a peculiar state, one characterized by a pile-up of anomalies—the combination of declining volatility with higher-than-average returns converging with contracting credit spreads. Needless to say, our risk-conscious, balance-sheet-centric approaches have been challenged in this setting, at least on a relative basis. Low volatility has arguably created the highest hurdle. We have always felt most comfortable in markets with higher levels of volatility, which usually create the differentiation that lies at the core of our active management styles. We analyze, assess, and evaluate multiple aspects of a company before determining whether or not the current stock price reflects the |
long-term prospects we see. Opportunities to purchase what we deem to be attractively undervalued companies tend to proliferate when stock prices are volatile rather than when markets are calm. Yet for most of the last four years, volatility has been falling, at least until the second half of 2014. This has made it far more difficult for our funds to outpace their respective benchmarks. GREAT EXPECTATIONS The questions are: How much longer is this going to last? More specifically, are interest rates going to remain at or near zero? Is the pace of economic growth likely to slacken? Are financial markets going to continue to behave atypically even as the economy continues to normalize? Will small-cap companies indefinitely gain an advantage by carrying more debt? Are three- and five-year average annual total returns for the Russell 2000 going to remain at levels higher than the index’s historical monthly rolling averages of 8.2% and 7.6%, respectively? For those who believe that most, or even some, of these things are likely to happen, then our approach would seem a bit at odds. We confess that we have been anticipating some of these shifts for nearly two years. This has meant re-learning the hard lesson that change seldom occurs when we most want it to. Yet we are convinced that markets remain cyclical (recent events notwithstanding). In our view, reversion to the mean is as close to an iron law as the capital markets allow. Most trends reverse, though they may linger for longer than initially anticipated (or desired). Widening credit spreads, increasing volatility, and decreasing stock correlation should all help active management and allow stock pickers the chance to emerge as performance leaders. We also expect equity returns to remain attractive, though we see a decrease from the high levels we have seen over the last three to five years. Cyclical companies across the globe appear due for a round of revenue acceleration, particularly those in the Consumer Discretionary and Industrials sectors, as do some industries in the Information Technology sector. The best-managed companies within these areas could also see solid margin expansion. Among other cyclical sectors, we also see a number of profitable, conservatively capitalized businesses that have either been ignored or whose returns have lagged. We expect this to change. |
This page is not part of the 2014 Annual Report to Shareholders | 3 |
LETTER TO OUR SHAREHOLDERS
On the valuation front, the picture looked admittedly tricky at the end of 2014. For example, an examination of trailing 12-month earnings for many U.S. companies suggests that small-cap share prices may be on the high side while there were a number of attractive opportunities in international small-caps at the end of 2014. If you believe, as we do, that the economy is going to keep growing, that credit spreads will continue to expand, and that a more robust CAPEX cycle is in the offing, then valuations seem pretty reasonable, if not attractive in certain areas, Energy in particular. Many U.S. stocks look fairly valued though not fully valued to us. So while we do not shrink from the sobering truth of relative underperformance through much of this now-long bullish cycle, we continue to see good times ahead for our risk-conscious, fundamentally based approach. |
While we do not shrink from the sobering truth of relative underperformance through much of this now-long bullish cycle, we continue to see good times ahead for our risk-conscious, fundamentally based approach. The argument that we have been making for more than four decades remains the same. Small-cap is an inefficient area of the market in which we search for qualitative advantages and valuation discrepancies. Our belief that fundamentally strong companies trading at discounts to their private worth can outperform over the long term, often with lower volatility, will not change. It is our core investment principle, and it has served us very, very well over most of the last 40+ years. |
Sincerely, |
Charles M. Royce | Christopher D. Clark | Francis D. Gannon | ||
Chairman and Chief Executive Officer, | President and Co-Chief Investment Officer, | Co-Chief Investment Officer, | ||
Royce & Associates, LLC | Royce & Associates, LLC | Royce & Associates, LLC | ||
January 26, 2015 |
4 | This page is not part of the 2014 Annual Report to Shareholders |
Performance and Expenses
Performance and Expenses As of December 31, 2014 | |||||||||||||||||||
AVERAGE ANNUAL TOTAL RETURNS (%) | ANNUAL OPERATING EXPENSES (%) | ||||||||||||||||||
FUND | 1-YR | 3-YR | 5-YR | 10-YR | SINCE INCEPTION | INCEPTION DATE | GROSS | NET | |||||||||||
Royce Select Fund I | 0.23 | 12.81 | 10.33 | 9.09 | 13.26 | 11/18/98 | 1.20 | 1.20 | |||||||||||
Royce Select Fund II | -0.24 | 11.92 | 7.83 | n.a. | 7.34 | 6/30/05 | 3.30 | 1.62 | |||||||||||
Royce Enterprise Select Fund | 5.22 | 16.13 | 13.07 | n.a. | 7.62 | 9/28/07 | 3.08 | 1.24 | |||||||||||
Royce Opportunity Select Fund | -4.97 | 22.92 | n.a. | n.a. | 17.33 | 8/31/10 | 1.78 | 1.29 | |||||||||||
Royce Micro-Cap Discovery Fund | 0.97 | 12.09 | 10.50 | 4.59 | 6.47 | 10/3/03 | 2.50 | 1.49 | |||||||||||
Royce Financial Services Fund | 3.45 | 21.04 | 13.26 | 7.82 | 8.46 | 12/31/03 | 1.97 | 1.57 | |||||||||||
Royce SMid-Cap Value Fund | -1.68 | 11.74 | 9.22 | n.a. | 4.93 | 9/28/07 | 2.20 | 1.35 | |||||||||||
Royce Partners Fund | -0.85 | 16.54 | 10.67 | n.a. | 12.16 | 4/27/09 | 3.97 | 1.26 | |||||||||||
Royce European Smaller-Companies Fund | -14.86 | 8.40 | 6.53 | n.a. | 2.06 | 12/29/06 | 2.27 | 1.70 | |||||||||||
Royce Global Dividend Value Fund | -6.84 | 9.74 | n.a. | n.a. | 2.84 | 12/31/10 | 2.99 | 1.70 | |||||||||||
Royce International Micro-Cap Fund | -2.37 | 9.67 | n.a. | n.a. | 0.87 | 12/31/10 | 3.88 | 1.71 | |||||||||||
Royce International Premier Fund | -8.22 | 10.25 | n.a. | n.a. | 2.77 | 12/31/10 | 2.82 | 1.69 | |||||||||||
INDEX | |||||||||||||||||||
Russell 2000 | 4.89 | 19.21 | 15.55 | 7.77 | n.a. | n.a. | n.a. | n.a. | |||||||||||
Russell Microcap | 3.65 | 21.81 | 16.14 | 5.96 | n.a. | n.a. | n.a. | n.a. | |||||||||||
Russell Global Small Cap | -0.28 | 13.57 | 9.56 | 6.87 | n.a. | n.a. | n.a. | n.a. | |||||||||||
Russell Global ex-U.S. Small Cap | -3.63 | 10.31 | 6.40 | 6.65 | n.a. | n.a. | n.a. | n.a. | |||||||||||
Russell 1000 | 13.24 | 20.62 | 15.64 | 7.96 | n.a. | n.a. | n.a. | n.a. | |||||||||||
Russell 2500 | 7.07 | 19.97 | 16.36 | 8.72 | n.a. | n.a. | n.a. | n.a. | |||||||||||
Russell Europe Small-Cap | -8.50 | 17.23 | 8.24 | 6.76 | n.a. | n.a. | n.a. | n.a. | |||||||||||
Important Performance, Expense, and Risk Information
All performance information in this Review and Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund (2% for Royce Select II, European Smaller-Companies, Global Dividend Value, International Micro-Cap, and International Premier Funds). Redemption fees are not reflected in the performance shown above; if they were, performance would be lower. Current performance may be higher or lower than performance quoted. Current month-end performance may be obtained at www.roycefunds.com. All performance and expense information reflects results of the Fund’s oldest share Class (Investment Class or Service Class, as the case may be). Price and total return information is based on net asset values calculated for shareholder transactions. Certain immaterial adjustments were made to the net assets of Royce International Premier Fund as of 6/30/14 for financial reporting purposes, and as a result the net asset values for shareholder transactions on that date and the total returns based on those net asset values differ from the adjusted net asset values and total returns reported in the financial highlights. Gross annual operating expenses reflect the Fund’s gross total annual operating expenses and include management fees, any 12b-1 distribution and service fees, other expenses, and any applicable acquired fund fees and expenses. Net annual operating expenses reflect contractual fee waivers and/or reimbursements. 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 (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business) to the extent necessary to maintain net operating expenses at or below: 1.20% for Royce Partners Fund; 1.49% for Royce Micro-Cap Discovery and Financial Services Funds; 1.69% for Royce European Smaller-Companies, Global Dividend Value, International Micro-Cap, and International Premier Funds: 1.24% for Royce Enterprise Select and Opportunity Select Funds; and 1.49% for Royce Select Fund II through April 30, 2015 and at or below: 1.84% for Royce Partners Fund, and 1.99% for Royce Select Fund II, Enterprise Select, Opportunity Select, Micro-Cap Discovery, Partners, European Smaller-Companies, Global Dividend Value, International Micro-Cap, and International Premier Funds through April 30, 2024. Acquired fund fees and expenses reflect the estimated amount of fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Shares of the Funds’ Service Class bear an annual distribution expense that is not borne by the Funds’ Investment Class. Investments in securities of micro-cap, small-cap, and/or mid-cap companies may involve considerably more risk than investments in securities of larger-cap companies. (Please see “Primary Risks for Fund Investors” in the prospectus.) Royce Select I, Select II, Enterprise Select, and Opportunity Select Funds may sell securities short, which involves selling a security it does not own in anticipation that the security’s price will decline. Short sales present unlimited risk on an individual stock basis since the Fund may be required to buy a security sold short at a time when the security has appreciated in value. Royce Select Fund II, European Smaller-Companies, Global Dividend Value, International Micro-Cap, and International Premier Funds invest a significant portion of their respective assets in foreign companies that may be subject to different risks than investments in securities of U.S. companies, including adverse political, social, economic, or other developments that are unique to a particular country or region. (Please see “Investing in Foreign Securities” in the prospectus.) Therefore, the prices of securities of foreign companies in particular countries or regions may, at times, move in a different direction than those of securities of U.S. companies. (Please see “Primary Risk of Fund Investors” in the prospectus.) Please read the prospectus carefully before investing or sending money. Distributor: Royce Fund Services, Inc.
This page is not part of the 2014 Annual Report to Shareholders | 5 |
MANAGER’S DISCUSSION | |
Royce Select Fund I |
Lauren Romeo, CFA |
FUND PERFORMANCE Royce Select Fund I (“RS1”) was up 0.2% in 2014, behind its small-cap benchmark, the Russell 2000 Index, which gained 4.9% for the same period. The Fund easily outpaced the small-cap index in the year’s first half, advancing 6.6% compared to 3.2% for the Russell 2000. However, small-caps corrected soon after making a high on July 3, and while the Fund has historically held its value more effectively than its benchmark during downdrafts, the third quarter provided an ill-timed exception. For the quarter as a whole, the Fund lost 8.1% versus 7.4% for the small-cap index. The Russell 2000 then rebounded in the fourth quarter. The Fund posted a comparably underwhelming 2.3% return for that period while the Russell 2000 rose 9.7%. We were pleased, however, with longer-term results. Although the Fund trailed the small-cap index for the three- and five-year periods ended December 31, 2014, it did so with strong absolute returns. It also merits mentioning that RS1’s average annual total return for the three-year period (+12.8%) was higher than both its own and its benchmark’s historical three-year monthly rolling average returns of 11.6% and 8.2%, respectively. The Fund’s average annual total return for the five-year period (+10.3%) was also better than the small-cap index’s five-year monthly rolling average return of 7.6%. Finally, RS1 outpaced the Russell 2000 for the 10-, 15-year, and since inception (11/18/98) periods ended December 31, 2014. The Fund’s average annual total return for the since inception period was 13.3%. WHAT WORKED... AND WHAT DIDN’T Energy was the Fund’s best-performing sector in the first half before oil prices abruptly plummeted—losing nearly 50%—and gave the portfolio its largest net losses for the calendar year. An overweight in Energy stocks—with all seven of our holdings in the equipment & services industry—did not help. The longstanding operational success of Unit Corporation did little to calm panicked investors fleeing energy stocks in the second half. Unit operates several businesses—it explores for oil and natural gas, acquires oil and gas properties, does contract drilling of onshore oil and natural gas wells, and gathers and processes natural gas. The company has shown expertise in all of them over the years, and its steady execution has made its hard-to-pigeonhole business a Royce favorite. We took the long view and held a sizable position at year end. We built our position in Nu Skin Enterprises in 2014 after first buying shares in May. A maker and distributor of personal care products, Nu Skin endured a litany of challenges over the last 18 months, including the restructuring of its debt and trouble in its previously fast-growing—but more recently stagnating—Asian business. It has been handling its difficulties with success, and we think it can engineer a reversal when sales in China improve. We were less sanguine about three other detractors, exiting all of them in 2014. The ongoing struggles of tween girl retailer Justice and plus-size women’s retailer Lane Bryant were major factors in our decision to sell our stake in multiline fashion business Ascena Retail Group. GrafTech International makes synthetic and natural graphite and carbon-based products used in steel production. Ongoing earnings disappointments, most recently resulting from graphite electrode order push-outs and weakening international business, pushed the stock down more than 50% in the third quarter. Shares of The Medicines Company fell earlier in the year when a court ruling held that a competitor could produce a generic version of Angiomax, the firm’s anticoagulant drug. Later, the FDA requested more data rather than approve Cangrelor, a new antiplatelet drug for intravenous application. On the positive side, we were pleased with the progress of molecular diagnostic company Myriad Genetics. A specialist in genetic testing for cancer, its share price fell rapidly in the second half of 2013 once the Supreme Court held that human genes cannot be patented. The stock then began to get healthy in the first six months of 2014. The first-half acquisition of Crescendo Bioscience diversified Myriad’s already promising pipeline, and its genetic panel test—MyRisk— looked promising. Its stock stumbled in the fourth quarter when the MyRisk adoption proved more expensive than expected, causing sales deferrals and higher operating costs. We took some gains in 2014, though we remained confident in Myriad’s long-term prospects. |
Top Contributors to Performance For 2014 (%)1 | ||
Myriad Genetics | 1.22 | |
MKS Instruments | 0.62 | |
Integrated Silicon Solution | 0.60 | |
Gentex Corporation | 0.45 | |
NVR | 0.42 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
Nu Skin Enterprises Cl. A | -0.95 | |
Unit Corporation | -0.82 | |
Ascena Retail Group | -0.78 | |
Medicines Company (The) | -0.77 | |
GrafTech International | -0.70 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK We are anticipating accelerated economic growth, with many holdings poised for margin expansion when revenue growth improves. While the near-term outlook for energy-related stocks is grim, we have confidence in the long-term prospects for our holdings. Rising capital spending and signs of an upturn in non-residential construction should help many holdings in Industrials, RS1’s second largest sector weighting at year end. We also believe that favorable secular spending trends in semiconductor capital equipment, factory automation, and telecom infrastructure should bode well for many tech-related positions. Finally, stocks in both consumer sectors should benefit, in our view, from the enhanced purchasing power lower energy prices are providing consumers. |
6 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYSFX |
Performance and Expenses | ||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | SINCE INCEPTION (11/18/98) | ||||||||
RS1 | -5.99 | 0.23 | 12.81 | 10.33 | 9.09 | 11.46 | 13.26 | |||||||
Annual Operating Expenses: 1.20% | ||||||||||||||
* Not Annualized |
Relative Returns: Monthly Rolling Average Annual Return Periods
15 Years Through 12/31/14
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 100% of all 10-year periods; 83% of all 5-year periods; 74% of all 3-year periods; and 62% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
10-year | 61/61 | 100% | 11.3 | 7.3 | |||||||
5-year | 101/121 | 83% | 11.4 | 7.6 | |||||||
3-year | 108/145 | 74% | 11.6 | 8.2 | |||||||
1-year | 107/169 | 62% | 13.2 | 9.6 | |||||||
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 74 for additional information. |
Value of $10,000
Top 10 Positions | ||
% of Net Assets | ||
Buckle (The) | 2.4 | |
Genesco | 2.4 | |
MKS Instruments | 2.2 | |
TGS-NOPEC Geophysical | 2.1 | |
John Bean Technologies | 2.0 | |
Bio-Techne | 2.0 | |
Reliance Steel & Aluminum | 2.0 | |
Integrated Silicon Solution | 2.0 | |
Sykes Enterprises | 1.9 | |
Valmont Industries | 1.9 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Information Technology | 20.4 | |
Industrials | 19.4 | |
Consumer Discretionary | 13.5 | |
Financials | 11.2 | |
Energy | 9.9 | |
Materials | 6.7 | |
Health Care | 6.7 | |
Consumer Staples | 2.5 | |
Miscellaneous | 2.9 | |
Cash and Cash Equivalents | 6.8 | |
Calendar Year Total Returns (%) | ||
YEAR | RS1 | |
2014 | 0.2 | |
2013 | 26.0 | |
2012 | 13.7 | |
2011 | -3.6 | |
2010 | 18.2 | |
2009 | 39.6 | |
2008 | -25.9 | |
2007 | 10.7 | |
2006 | 15.0 | |
2005 | 10.9 | |
2004 | 19.1 | |
2003 | 48.7 | |
2002 | -15.8 | |
2001 | 24.5 | |
2000 | 15.0 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 93 | 80 | ||
Fund‘s First Full Quarter | ||||
(12/31/98) | 103 | 75 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $39 million | |
Number of Holdings | 70 | |
Turnover Rate | 40% | |
Average Market Capitalization1 | $2,080 million | |
Weighted Average P/E Ratio2,3 | 17.5x | |
Weighted Average P/B Ratio2 | 2.1x | |
Holdings ≥ 75% of Total Investments | 41 | |
Active Share4 | 97% | |
U.S. Investments (% of Net Assets) | 83.0% | |
Non-U.S. Investments (% of Net Assets) | 10.2% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (7% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in performance shown above. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. 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. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 7 |
MANAGER’S DISCUSSION | |||
Royce Select Fund II |
Jim Harvey, CFA |
FUND PERFORMANCE Royce Select Fund II (“RS2”) was down 0.2% in 2014 compared to a 0.3% loss for the long only Russell Global Small Cap Index and a 4.9% gain for the long only, domestic small-cap Russell 2000 Index for the same period. During the less volatile, more straightforwardly bullish first half of the year, RS2 acquitted itself quite well. The Fund advanced 6.5% for the six-month period ended June 30, 2014, outpacing both the Russell Global Small Cap and the Russell 2000, which gained 5.7% and 3.2%, respectively, for the same period. |
During the third quarter, small-cap stock prices grew more volatile and fell into a bear mode following a year-to-date high for the Russell 2000 on July 3, with the downdraft persisting into the middle of October. The Fund was again ahead of its domestic and global benchmarks, losing less in a challenging period. For the third quarter, RS2 fell 4.3% while the Russell Global Small Cap was down 6.7% and the Russell 2000 declined 7.4%. This relatively strong turn not only kept the Fund ahead of each benchmark for the nine-month period ended September 30, 2014, but also had it in positive territory, up 2.0% versus respective losses of 1.4% and 4.4% for the global and domestic small-cap indexes. Domestic small-caps then came back strong, particularly in October and December, while many non-U.S. issues continued to struggle or treaded water. For the fourth quarter, RS2 lost 2.1% while the Russell Global Small Cap was up 1.1% and the Russell 2000 climbed 9.7%. The largest net losses came from companies in the Industrials sector—led by top-20 holding Freund Corporation, top holding Zuiko Corporation, and Horizon North Logistics, which we sold in December. Impactful net losses in the fourth quarter also came from the Financials sector and the IT services industry. This made for a frustrating end to what had been shaping up to be a solid year. The Fund outperformed the Russell Global Small Cap for the one-year and since inception (6/30/05) periods ended December 31, 2014. |
WHAT WORKED... AND WHAT DIDN’T Five of RS2’s nine equity sectors finished the calendar year in the black. Industrials (a major disappointment in the fourth quarter) led by a considerable margin. Four of the Fund’s 10-best performing companies came from the Industrials sector. The leading industry groups were semiconductors & semiconductor equipment companies (Information Technology) and the professional services group (from Industrials). Nautilus is a conservatively capitalized business that makes consumer fitness products including Bowflex exercise machines and nutritional supplements. We like its niche in a business with global growth potential and the way the company has seen healthy revenues while keeping expenses under control. It also won a patent claim suit in June. We took gains as its share price got stronger. We also reduced our stake in Magellan Aerospace in 2014 (before building it again in January 2015). Based in Ontario, the company serves the civil aerospace and defense market. Magellan has benefited from a strong aerospace and defense capital spending cycle as well as weakness in the Canadian dollar, which has increased its competitiveness versus U.S. suppliers. In addition, a strong management team that is focused on margins has helped to drive earnings improvement and an increase in the overall backlog. Brazil’s CETIP-Mercados Organizados offers an electronic platform for conducting online transactions, such as auctions and government bond trading, corporate bonds, and fixed-income securities. CETIP also provides central securities depository, outsourcing, market data, and risk management services. Its shares rose on what we suspect was a flight to quality in Brazil’s bear market. We began to reduce our position in April as its stock rose and sold the last of our shares in August. |
Financials, Consumer Discretionary, and Health Care posted net losses in 2014, though losses were modest in a third of these sectors. The Fund’s most significant detractor on a position level was Computer Task Group, which we sold between August and October. An IT services and staffing company, the firm saw its stock price decline steeply in early July after reporting lower-than expected earnings largely due to higher costs and lower revenues from its healthcare business. While the company claimed these higher expenses were likely anomalous, it also boosted its projected medical costs for the rest of 2014, thus revising guidance downward. Looming bankruptcy in early 2015 led us to sell our position in women’s apparel retailer Cache in January. Although we felt confident earlier in 2014 that the firm could eventually right itself, ongoing losses began to convince us otherwise. We chose to hold a reduced stake in SeaChange International at the end of 2014. The company specializes in cloud-based multiscreen video software products. Missed earnings and revised guidance seemed to turn investors off. |
Top Contributors to Performance For 2014 (%) 1 | ||||
Nautilus | 0.75 | |||
Magellan Aerospace | 0.73 | |||
CETIP-Mercados Organizados | 0.69 | |||
Selamat Sempurna | 0.65 | |||
Obara Group | 0.59 | |||
1 Includes dividends |
Top Detractors from Performance For 2014 (%) 2 | ||||
Computer Task Group | -1.18 | |||
Cache | -0.96 | |||
SeaChange International | -0.90 | |||
Brasil Brokers Participacoes | -0.84 | |||
Turtle Beach | -0.77 | |||
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK RS2 was significantly overweight relative to its benchmarks in the Industrials, Information Technology, and Consumer Discretionary sectors at the end of 2014 while it was largely underweight both indexes in Financials, Health Care, and Energy. We are confident that economically sensitive sectors can rebound in 2015. |
8 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOL RSFDX |
Performance and Expenses | |||||||||||
Average Annual Total Return (%) Through 12/31/14 | |||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | SINCE INCEPTION (6/30/05) | |||||||
RS2 | -6.35 | -0.24 | 11.92 | 7.83 | 7.34 | ||||||
Annual Gross Operating Expenses: 3.30% Annual Net Operating Expenses: 1.62% | |||||||||||
*Not Annualized |
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 74 for additional information. |
Invested on 6/30/05 as of 12/31/14 ($)
Top 10 Long Positions | ||
% of Net Assets | ||
Zuiko Corporation | 2.1 | |
Western Forest Products | 2.0 | |
Brooks Automation | 2.0 | |
QuinStreet | 1.9 | |
Acacia Research | 1.8 | |
Amtech Systems | 1.6 | |
Ashmore Group | 1.6 | |
Wabash National | 1.6 | |
Photronics | 1.5 | |
T4F Entretenimento | 1.5 | |
Short Positions | ||
% of Net Assets | ||
ProShares UltraShort Oil & Gas | -1.0 | |
Douglas Dynamics | -0.5 | |
Portfolio Sector Breakdown1 | ||
% of Net Assets | ||
Industrials | 30.1 | |
Information Technology | 23.0 | |
Consumer Discretionary | 17.3 | |
Financials | 9.7 | |
Materials | 6.1 | |
Consumer Staples | 3.8 | |
Health Care | 3.5 | |
Energy | 2.3 | |
Miscellaneous | 4.5 | |
Other Net Liabilities | -0.3 | |
1 Long positions only. |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
Fund’s First Full Quarter | ||||
(6/30/05) | 88 | 88 | ||
Calendar Year Total Returns (%) | ||
YEAR | RS2 | |
2014 | -0.2 | |
2013 | 23.5 | |
2012 | 13.8 | |
2011 | -14.0 | |
2010 | 21.0 | |
2009 | 66.6 | |
2008 | -33.4 | |
2007 | -5.5 | |
2006 | 19.8 | |
Portfolio Country Breakdown1,2 | ||
% of Net Assets | ||
United States | 33.6 | |
Japan | 14.8 | |
United Kingdom | 7.9 | |
Canada | 6.2 | |
Germany | 3.8 | |
Taiwan | 3.7 | |
Australia | 3.1 | |
1 Represents countries that are 3% or more of net assets. | ||
2 Securities are categorized by the country of their headquarters. |
Portfolio Diagnostics | ||
Fund Net Assets | $5 million | |
Number of Holdings | 104 | |
Turnover Rate | 200% | |
Average Market Capitalization1 | $402 million | |
Weighted Average P/E Ratio2,3 | 14.2x | |
Weighted Average P/B Ratio2 | 1.6x | |
Holdings ≥ 75% of Total Investments | 62 | |
Active Share4 | 100% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (20% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
5 | Long positions only. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 2% redemption fee, payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Price and total return information is based on net asset values calculated for shareholder transactions. Certain immaterial adjustments were made to the net assets of Royce Select Fund II at 12/30/11 for financial reporting purposes, and as a result the net asset values for shareholder transactions on that date and the calendar-year total returns based on those net asset values differ from the adjusted net asset values and calendar-year total returns reported in the Financial Highlights. Gross operating expenses reflect the Fund’s total gross annual operating expenses and include management fees, other expenses, and acquired fund fees and expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. 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 to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding dividend and interest expenses relating to short sale activities, brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.49% through April 30, 2015 and at or below 1.99% through April 30, 2024. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 9 |
MANAGER’S DISCUSSION | |||
Royce Enterprise Select Fund |
Steven McBoyle, CPA, CA |
FUND PERFORMANCE Royce Enterprise Select Fund (“RSS”) advanced 5.2% in 2014, trailing its small- and mid-cap benchmark, the Russell 2500 Index, which gained 7.1% for the same period. During the first half, RSS rose 5.8% compared to the 5.9% gain for its benchmark. Small-caps endured a bearish third quarter while mid-caps escaped with only minor bruises. For the quarter, the Fund was nearly even with the Russell 2500, which lost 5.3% while the Fund fell 5.4%. The fourth quarter then turned bullish for small-cap and mid-cap companies alike. RSS was up 5.1% in the year’s last quarter while the Russell 2500 rose 6.8%. |
The Fund continued to post strong absolute average annual total returns for the three-year (+16.1%) and five-year (+13.1%) periods ended December 31, 2014. |
WHAT WORKED... AND WHAT DIDN’T Six of the Fund’s nine equity sectors made a net contribution to calendar-year returns, with Consumer Discretionary leading by a wide margin and nearly doubling the net gains from the next-best performer, Information Technology. Financials, Utilities, Materials, and Health Care also ended the year in the black. The Fund was considerably underweight in three of these sectors (Materials being the exception). REITs were the benchmark’s top contributor in the Financials sector while RSS, on the other hand, had no exposure to them. Instead, the portfolio enjoyed success with holdings in the real estate management & development industry. Within Health Care, the Fund also had no exposure to top-performing biotech companies—they typically lack the sound fundamentals and earnings profiles we covet—but instead saw net gains from health care equipment & supplies companies. |
RSS’s best-performing position was Information Technology business Skyworks Solutions, a leading supplier of radio frequency (RF) chips to wireless smartphones. Its success has been driven by three industry tailwinds: continued smartphone adoption on a global basis, 4G network build outs in Europe and China, and increased RF chip content in 4G networks compared to 3G. We finished selling our shares in October. Advance Auto Parts, from Consumer Discretionary, is the largest automotive aftermarket parts provider in North America. Growth in revenues and earnings as well as improved year-over-year same store sales had its stock price revving for much of the year. Minerals Technologies is a resource- and technology-based business that develops and produces performance-enhancing minerals as well as synthetic mineral and mineral-based products. The company reported record third-quarter earnings in October, with each of its five business segments contributing double-digit operating income margins. Record earnings—this time for fiscal 2014—also boosted the share price of UGI Corporation. In the Utilities sector, UGI distributes and markets energy products and services. It also operates natural gas and electric utilities in Pennsylvania (via subsidiaries) and distributes propane. Rogers Corporation, RSS’s sixth-largest holding at the end of 2014, is a technology company that manufactures specialty materials and components, including printed circuit materials, high-performance foams, and power electronic solutions. Somewhat volatile into the third quarter, its stock price soared in October after it reported record quarterly revenues, which capped a seventh consecutive quarter of year-over-year revenue growth. We were pleased to see each of its three core businesses contributing to its growth. |
Industrials and Energy were the only sectors to detract from performance. Although net losses were comparatively modest, the Fund’s five largest detractors in 2014 all came from the Industrials sector. We built our position in ManpowerGroup as its shares slipped, making it the Fund’s third-largest holding at the end of 2014. The company provides temporary staffing services, contract services, and training and testing of temporary and permanent workers. Solid growth in revenues, better-than-expected earnings, a sunny outlook, and an improved employment picture here in the U.S. were somehow not enough to keep its shares from struggling, probably due to the firm’s exposure to the labor market in Europe, a locus of ongoing investor anxiety. |
Top Contributors to Performance For 2014 (%)1 | ||
Skyworks Solutions | 0.74 | |
Advance Auto Parts | 0.66 | |
Minerals Technologies | 0.64 | |
UGI Corporation | 0.63 | |
Rogers Corporation | 0.57 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
ManpowerGroup | -0.42 | |
Kennametal | -0.29 | |
EnerSys | -0.28 | |
AGCO Corporation | -0.28 | |
Semperit AG Holding | -0.24 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK At the end of 2014 RSS was substantially overweight in Consumer Discretionary based on our belief that the expanding economy, improved employment picture, and lower energy prices will all encourage consumption in 2015. Industrials—the Fund’s second-largest sector at year end and an overweight versus the Russell 2500—also remains an area of focus. As the year came to an end, we attempted to take advantage by buying shares of companies that saw their valuations disconnect from fundamentals due to concerns over European growth and more general deflation in basic materials. Finally, the Fund remains keenly focused on highly differentiated business models that exhibit sustainably improving returns due in part to some structural or secular change. |
10 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOL RMISX |
Performance and Expenses | ||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | SINCE INCEPTION (9/28/07) | ||||||
RSS | -0.53 | 5.22 | 16.13 | 13.07 | 7.62 | |||||
Annual Gross Operating Expenses: 3.08% Annual Net Operating Expenses: 1.24% | ||||||||||
*Not Annualized |
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 74 for additional information. |
Invested on 9/28/07 as of 12/31/14 ($)
Top 10 Positions | ||
% of Net Assets | ||
Thor Industries | 2.8 | |
Kennedy-Wilson Holdings | 2.8 | |
ManpowerGroup | 2.5 | |
Bed Bath & Beyond | 2.2 | |
Advance Auto Parts | 2.0 | |
Rogers Corporation | 2.0 | |
Dollar Tree | 2.0 | |
Copart | 2.0 | |
Carlisle Companies | 1.9 | |
Wolverine World Wide | 1.9 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Consumer Discretionary | 21.6 | |
Industrials | 17.0 | |
Information Technology | 13.2 | |
Materials | 5.7 | |
Financials | 5.4 | |
Energy | 3.5 | |
Utilities | 1.8 | |
Health Care | 1.6 | |
Miscellaneous | 2.3 | |
Government Bonds | 1.4 | |
Cash and Cash Equivalents | 26.5 | |
Calendar Year Total Returns (%) | ||
YEAR | RSS | |
2014 | 5.2 | |
2013 | 28.7 | |
2012 | 15.7 | |
2011 | 0.7 | |
2010 | 17.2 | |
2009 | 23.1 | |
2008 | -25.5 | |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
Fund’s First Full Quarter | ||||
(09/30/07) | 81 | 75 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $3 million | |
Number of Holdings | 74 | |
Turnover Rate | 81% | |
Average Market Capitalization1 | $4,024 million | |
Weighted Average P/E Ratio2,3 | 19.5x | |
Weighted Average P/B Ratio2 | 2.7x | |
Holdings ≥ 75% of Total Investments | 37 | |
Active Share4 | 96% | |
U.S. Investments (% of Net Assets) | 68.6% | |
Non-U.S. Investments (% of Net Assets) | 4.9% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (6% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee, payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Gross operating expenses reflect the Fund’s total gross annual operating expenses and include management fees and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. 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 to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding dividend and interest expenses relating to short sale activities, brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.24% through April 30, 2015 and at or below 1.99% through April 30, 2024. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2500). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 11 |
MANAGER’S DISCUSSION | |||
Royce Opportunity Select Fund |
Bill Hench |
FUND PERFORMANCE Royce Opportunity Select Fund (“ROS”) finished the year with a loss of 5.0% in 2014, underperforming its small-cap benchmark, the Russell 2000 Index, which increased 4.9% for the same period. After two consecutive calendar-year performances that were strong on both an absolute and relative basis, ROS finished much farther behind its benchmark than we would like. A year in the red is far from ideal, but we remain confident in the Fund’s distinctive opportunistic approach. |
For the first half, the Fund narrowly outpaced the Russell 2000, up 3.3% versus 3.2%. The bulk of ROS’s difficulties, on both a relative and absolute basis, thus began in the bearish third quarter when small-caps began to slide following a high on July 3. For the quarter, the Fund fell 10.7% compared to a loss of 7.4% for the small-cap index. While the Fund underperformed in the bullish fourth quarter, rising 3.0% while the Russell 2000 climbed 9.7%, the quarter included the end of the downturn, which bottomed out on October 13. From that date through the end of December, ROS did well on an absolute basis, advancing 12.3%. Longer-term results remained strong on an absolute basis though they were more mixed vis-à-vis the benchmark. The Fund outpaced the Russell 2000 for the three-year period ended December 31, 2014. ROS’s average annual total return since inception (8/31/10) was 17.3%. |
WHAT WORKED... AND WHAT DIDN’T The market hates uncertainty. So it was not surprising to see an exogenous event—in this case, the collapse of oil prices—sow the seeds of uncertainty and help to create both higher volatility and steep losses, at least among certain small-caps and most energy companies. ROS was overweight in Energy compared to the Russell 2000 at the end of June. Though otherwise modest, exposure was just large enough for the sector to register the largest net losses in 2014 (though net losses for Materials were nearly identical). Offshore drilling has higher costs, which usually means being hurt first and hardest in any decline for crude oil prices. This was bad news for Hercules Offshore, which provides shallow-water drilling and marine services to oil and natural gas companies. It also meant a rapidly plunging share price for Swift Energy, an onshore and offshore exploration & production (“E&P”) company. We sold our shares in each as part of the effort to significantly pare back the portfolio’s sector weighting, which stood at just 1.5% of the long portfolio at the end of December. We chose to hold a small position in Canadian E&P business Pengrowth Energy at year end, along with a handful of other Energy businesses. |
Extreme Networks provides switching solutions for local area networks (LAN). Disappointing earnings, based in part on lower-than-expected sales to government entities, and revised guidance drove investors away. We liked its acquisition of a complementary business, which we think can help the company to improve earnings, though this is admittedly taking longer than we anticipated. After building a position in the first half, we reduced it during the year’s last six months. We went the opposite way with Quiksilver, reducing our stake in the first half before adding shares in the second. An earnings miss in June sent its shares careening down more than 40%. The company makes and distributes youth-oriented branded apparel, footwear, and accessories. Its turnaround is also taking longer than we anticipated, but we like the management team that came on board in 2013 and the strong presence of its brands in high-profile spots such as Macy’s. |
In February 2014, RF Micro Devices and TriQuint Semiconductor agreed to merge, which seemed to help the shares of each semiconductor business to climb in 2014. Our attraction to RF Micro Devices, which makes radio frequency (or RF) chips primarily for wireless applications, was a play on the wireless flash segment in the mobile handset market. We sold the last of our shares of TriQuint in February while holding a large position in RF Micro Devices at year end. (In January 2015, the merged company became known as Qorvo.) Finally, the portfolio’s short positions had an aggregate negative effect on performance that was slightly larger than the net losses from the Information Technology sector, though well behind the net losses for Energy and Materials. |
Top Contributors to Performance For 2014 (%)1 | ||
RF Micro Devices | 1.92 | |
Zumiez | 0.71 | |
Carbonite | 0.58 | |
OraSure Technologies | 0.57 | |
Tower International | 0.54 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
Extreme Networks | -1.21 | |
Hercules Offshore | -1.02 | |
Swift Energy | -0.90 | |
Quiksilver | -0.90 | |
Pengrowth Energy | -0.82 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK In many ways a restocking year, 2014 saw us trimming or selling positions that had established momentum while looking to find or add to companies that will ideally furnish the next few years with strong performance. Looking ahead, we are constructive on several consumer and technology areas, as well as housing and non-residential construction. Lower energy prices and improved employment rates should help to keep the U.S. consumer active and confident. We anticipate that housing sales should gain momentum following the Super Bowl, as is often the case, and also expect non-residential construction and infrastructure activity to increase in 2015. |
12 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS ROSFX ROSSX |
Performance and Expenses | ||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||
JUL-DEC 2014* | 1-YR | 3-YR | SINCE INCEPTION (8/31/10) | |||||
ROS | -8.00 | -4.97 | 22.92 | 17.33 | ||||
Annual Gross Operating Expenses: 1.78% Annual Net Operating Expenses: 1.29% | ||||||||
*Not Annualized |
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 100% of all 3-year periods; and 63% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
3-year | 17/17 | 100% | 20.0 | 16.4 | |||||||
1-year | 26/41 | 63% | 18.2 | 15.0 | |||||||
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 74 for additional information. |
Invested on 8/31/10 as of 12/31/14 ($)
Top 10 Long Positions | ||
% of Net Assets | ||
MBIA | 2.2 | |
Exar Corporation | 2.1 | |
Logitech International | 2.1 | |
Zumiez | 2.0 | |
Owens & Minor | 2.0 | |
Mentor Graphics | 2.0 | |
RF Micro Devices | 2.0 | |
RTI International Metals | 2.0 | |
EarthLink Holdings | 2.0 | |
Carbonite | 1.9 | |
Top 10 Short Positions | ||
% of Net Assets | ||
Lumber Liquidators Holdings | -0.9 | |
Michael Kors Holdings | -0.6 | |
Dycom Industries | -0.5 | |
Life Time Fitness | -0.4 | |
Janus Capital Group | -0.4 | |
Men’s Wearhouse (The) | -0.4 | |
Trex Company | -0.3 | |
Fresh Market (The) | -0.3 | |
CIRCOR International | -0.3 | |
Stifel Financial | -0.3 | |
Calendar Year Total Returns (%) | ||
YEAR | ROS | |
2014 | -5.0 | |
2013 | 44.6 | |
2012 | 35.1 | |
2011 | -17.1 | |
Portfolio Sector Breakdown1 | ||
% of Net Assets | ||
Information Technology | 34.0 | |
Consumer Discretionary | 16.7 | |
Industrials | 14.4 | |
Materials | 9.7 | |
Health Care | 8.8 | |
Financials | 7.4 | |
Telecommunication Services | 1.7 | |
Energy | 1.5 | |
Miscellaneous | 4.5 | |
Cash and Cash Equivalents | 1.3 | |
1 Long positions only. |
Portfolio Diagnostics | ||
Fund Net Assets | $19 million | |
Number of Holdings | 102 | |
Turnover Rate | 131% | |
Average Market Capitalization1 | $757 million | |
Weighted Average P/B Ratio2 | 1.7x | |
Holdings ≥ 75% of Total Investments | 49 | |
Active Share3 | 102% | |
U.S. Investments (% of Net Assets)4 | 92.5% | |
Non-U.S. Investments (% of Net Assets)4 | 6.2% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
4 | Long positions only. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee, payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Gross operating expenses reflect the Fund’s total gross annual operating expenses and include management fees and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Funds most current prospectus. Royce & Associates has contractually agreed to waive fees and/or reimburse operating expenses to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding dividend and interest expenses relating to short sale activities, brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.24% through April 30, 2015. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. |
The Royce Funds 2014 Annual Report to Shareholders | 13 |
MANAGERS’ DISCUSSION | |||
Royce Micro-Cap Discovery Fund |
George Necakov, CFA Jim Harvey, CFA |
FUND PERFORMANCE Royce Micro-Cap Discovery Fund (“RDF”) rose 1.0% in 2014, lagging its benchmark, the Russell Microcap Index, which gained 3.6% for the same period. Micro-cap stocks have been among the equity market’s best-performing asset classes over the last several years. In addition, 2013 was the second-best calendar-year result for the Russell Microcap since its inception on June 30, 2000. A slackening of the pace of returns was therefore not unexpected, and this is what took place in 2014, beginning with the year’s first half in which the Fund was essentially flat and its benchmark was up 1.6%. |
The third quarter saw both an increase in volatility and a downdraft for small-cap and micro-cap stocks. RDF was down 7.9% for the quarter, losing less than the Russell Microcap, which declined 8.2% for the same period. We were pleased to see the portfolio hold its value a bit better than the index, though the Fund was still behind its benchmark for the nine-month period ended September 30, 2014. RDF then outpaced its benchmark in October and December but underperformed in November. The end result was that the Fund trailed the Russell Microcap in the fourth quarter, up 9.6% versus 11.2%. RDF underperformed its benchmark for the three-, five-, 10-year, and since inception (10/3/03) periods ended December 31, 2014, though the Fund’s average annual total returns for the three- and five-year periods were solid on an absolute basis. |
WHAT WORKED... AND WHAT DIDN’T The Consumer Discretionary and Energy sectors posted net losses in 2014 while seven of RDF’s nine equity sectors finished the year in the black. Industrials led by a wide margin, boosted by net gains in the machinery industry and, to a lesser degree, professional services companies. Two of the Fund’s top-five contributing stocks came from the machinery group. Two industries from the Information Technology sector also made strong net contributions. Software was the Fund’s top industry in 2014 while the semiconductors & semiconductor equipment group finished third behind it and machinery stocks. Two other industry groups within Information Technology, however, were RDF’s two biggest detractors in 2014—IT services and internet software & services. Net losses in the first of these groups were entirely attributable to Computer Task Group, an IT services and staffing company and the Fund’s largest-detracting position for the year. Its stock price began to decline steeply in early July after the firm reported lower-than-expected earnings largely due to higher costs and lower revenues from its healthcare business. While the company claimed these higher expenses were likely anomalous, it also boosted its projected medical costs for the rest of 2014, thus revising guidance downward. The Internet software & services industry was home to Liquidity Services, which runs online auction marketplaces for sellers and buyers of surplus, salvage, and scrap assets. Its stock endured its worst declines earlier in the year after the company missed earnings and revised guidance. We scrapped our position in the first half before reinitiating a position in July. |
VASCO Data Security International was RDF’s best-performing position in 2014. The company specializes in bank security and develops security systems to secure and manage access to user digital assets. Its stock made two significant upticks in the first half as earnings improved. Its stock climbed yet again in October after the company again beat estimates, this time for third-quarter revenue and earnings. We took gains as its shares moved up, selling the last of our stake in December. |
Top Contributors to Performance For 2014 (%)1 | ||
VASCO Data Security International | 1.65 | |
John B. Sanfilippo & Son | 0.95 | |
Symmetry Medical | 0.92 | |
Lydall | 0.61 | |
Standex International | 0.61 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
Computer Task Group | -1.40 | |
Liquidity Services | -0.93 | |
PhotoMedex | -0.76 | |
Big 5 Sporting Goods | -0.52 | |
Nam Tai Property | -0.51 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK To enhance the detection of potential portfolio candidates, RDF’s portfolio managers combine a proprietary quantitative screening model with traditional fundamental analysis to aid them in their effort to find companies that exhibit certain value-based characteristics. There are several key pieces to the Fund’s proprietary model: First, relative sector valuations are an important element in understanding outperformance patterns. The model’s output is sector adjusted so that companies are evaluated relative to their sector peers. Second, the model has historically been more effective in discriminating between over and undervalued companies as one moves down the market cap scale, which explains RDF’s emphasis on micro-cap stocks. Finally, the efficacy of each of these attributes can vary depending on what stage we are in within a particular economic cycle. While we believe the model is effective at generating a list of micro-cap investment candidates, fundamental scrutiny adds a level of refinement that does not exist in purely quantitative approaches. |
At the end of 2014 the Fund was substantially overweight the Industrials, Materials, and Consumer Staples sectors, the portfolio’s modest exposure to the last two sectors notwithstanding. RDF was also overweight Energy, Information Technology, and Consumer Discretionary while it was significantly underweight Financials and Health Care and had no exposure to Telecommunication Services at the end of 2014. |
14 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOL RYDFX |
Performance and Expenses | ||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | SINCE INCEPTION (10/3/03) | |||||||
RDF | 0.97 | 0.97 | 12.09 | 10.50 | 4.59 | 6.47 | ||||||
Annual Gross Operating Expenses: 2.50% Annual Net Operating Expenses: 1.49% | ||||||||||||
*Not Annualized |
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in portfolio within the proprietary Morningstar Style Box. Over time, shape and location of a fund’s ownership zone may vary. See page 74 additional information. |
Value of $10,000 |
Invested on 6/30/00 (Russell Microcap Inception) as of 12/31/14 ($) |
Top 10 Positions | ||
% of Net Assets | ||
Village Super Market Cl. A | 2.2 | |
Miller Industries | 2.2 | |
Utah Medical Products | 2.2 | |
National HealthCare | 2.1 | |
Invacare Corporation | 2.1 | |
United States Lime & Minerals | 2.1 | |
MYR Group | 2.0 | |
UFP Technologies | 1.7 | |
VSE Corporation | 1.7 | |
Exactech | 1.6 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Industrials | 19.1 | |
Information Technology | 16.3 | |
Health Care | 14.5 | |
Consumer Discretionary | 11.9 | |
Materials | 10.0 | |
Financials | 8.0 | |
Consumer Staples | 5.4 | |
Energy | 4.0 | |
Miscellaneous | 4.7 | |
Cash and Cash Equivalents | 6.1 | |
Calendar Year Total Returns (%) | ||
YEAR | RDF | |
2014 | 1.0 | |
2013 | 35.3 | |
2012 | 3.1 | |
2011 | -2.2 | |
2010 | 19.6 | |
2009 | 25.9 | |
2008 | -35.1 | |
2007 | -7.4 | |
2006 | 16.8 | |
2005 | 7.6 | |
2004 | 13.3 | |
Portfolio Diagnostics | ||
Fund Net Assets | $6 million | |
Number of Holdings | 100 | |
Turnover Rate | 85% | |
Average Market Capitalization1 | $397 million | |
Weighted Average P/E Ratio2,3 | 18.4x | |
Weighted Average P/B Ratio2 | 1.5x | |
Holdings ≥ 75% of Total Investments | 58 | |
Active Share4 | 94% | |
U.S. Investments (% of Net Assets) | 89.0% | |
Non-U.S. Investments (% of Net Assets) | 4.9% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (9% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Price and total return information is based on net asset values calculated for shareholder transactions. Certain immaterial adjustments were made to the net assets of Royce Micro-Cap Discovery Fund at 6/29/12 for financial reporting purposes, and as a result the net asset values for shareholder transactions on that date and calendar-year total returns based on those net asset values differ from the adjusted net asset values and calendar-year total returns reported in the Financial Highlights. Gross operating expenses reflect the Fund’s gross total annual operating expenses for the Service Class and include management fees, 12b-1 distribution and service fees, and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. 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 to the extent necessary to maintain the Service Class’s net annual operating expenses, (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.49% through April 30, 2015 and at or below 1.99% through April 30, 2024. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. |
The Royce Funds 2014 Annual Report to Shareholders | 15 |
MANAGER’S DISCUSSION | |||
Royce Financial Services Fund |
Chuck Royce |
FUND PERFORMANCE Royce Financial Services Fund (“RFS”) was up 3.5% in 2014, trailing both its small-cap benchmark, the Russell 2000 Index, which was up 4.9%, and the Russell 2500 Financial Services Index, which rose 11.2% for the same period. The market remained in a bull phase as 2014 began, though it moved at a much slower pace following the speedway clip of the previous year. Equity returns thus remained mostly positive amidst a lot of talk about whether or not valuations were unreasonably high. The Fund advanced 3.6% for the six-month period ended June 30, 2014 compared to respective gains of 3.2% and 5.8% for its benchmark and the Russell 2500 Financial Services Index. |
The next few months saw a temporary end to the bullish phase, though the downdraft was mostly confined to small-cap and, to a lesser extent, mid-cap stocks. After reaching a year-to-date high on July 3, and interrupted by an August rally, the Russell 2000 was mostly in decline into mid-October. This made for higher volatility as well as falling stock prices. For the third quarter, RFS was down 4.2%, holding its value better than its small-cap benchmark, which lost 7.4%, but losing some ground to the financial services component of the Russell 2500, which fell 3.9% for the same period. Share prices began to recover in October. For the fourth quarter the Fund gained 4.2% compared to respective gains of 9.7% and 9.5% for the small-cap index and the financial services companies in the Russell 2500. While 2014’s results were far from ideal, we were pleased with RFS’s longer-term results. The Fund outperformed the Russell 2000 for the three-year and 10-year periods ended December 31, 2014 and narrowly trailed the small-cap index for the since inception (12/31/03) period (+8.5% versus +8.7%). In addition, RFS was ahead of the Russell 2500 Financial Services Index for the three-year, 10-year, and since inception periods ended December 31, 2014. |
WHAT WORKED... AND WHAT DIDN’T The Fund’s largest-detracting position in 2014 was Ashmore Group, a London-based asset manager and global leader in emerging market investing. Its shares were challenged by worries about the debt cycle and bad news out of Russia and other emerging markets in 2014. Earnings have been adversely affected but revenues have remained fairly steady. We added shares early in 2014 (as well as in January 2015) and held a good-sized stake at year end. In June, we built our stake in Financial Engines, a large independent investment adviser specializing in retirement plan services. Earnings were a bit lower than expected, which seemed to be a factor in the descent of its stock price, as was the news in November that its founder-CEO would be retiring in 2015. We focused on the company’s ongoing financial and operating strength as well as its expertise in a niche that legions of retiring Baby Boomers should keep in high demand in the years ahead. |
Two industry groups—capital markets, which includes asset management businesses, and insurance companies—dominated calendar-year performance. Minneapolis-based asset manager Piper Jaffray led all of the portfolio’s net contributors. The firm enjoyed steady asset growth year-over-year in addition to revenue and earnings improvement, all of which seemed to draw investors to its stock. It was the Fund’s fourteenth-largest position at the end of 2014. CRISIL is an India-based global analytics company that provides ratings, research, and risk and policy advisory services. Its shares seemed to rise on the improved economic and market climate in India following the elections in May 2014, which helped to make it a top-20 holding at year end. Egyptian Financial Group-Hermes Holding Company is the leading investment bank in the Arab world. The company offers services such as asset management, securities brokerage, research, and private equity. Improved revenues seemed to draw more investors to its stock, especially in the first half of the year. |
Top Contributors to Performance For 2014 (%)1 | ||
Piper Jaffray | 0.58 | |
CRISIL | 0.44 | |
Egyptian Financial Group-Hermes Holding Company | 0.40 | |
Monroe Capital | 0.39 | |
SS&C Technologies | 0.38 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
Ashmore Group | -0.54 | |
Financial Engines | -0.51 | |
Dundee Corporation Cl. A | -0.35 | |
Hellenic Exchanges - Athens Stock Exchange | -0.31 | |
Xoom Corporation | -0.28 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK Throughout its history, RFS has at times been out of sync with the financial services companies in the Russell 2500 Index. (Being a sector fund, RFS has also frequently moved in a different direction than the Russell 2000.) We would expect this to continue, especially considering the portfolio’s comparatively low exposure to banks and REITs. The Banks were one of the larger, and REITS one of the better-performing, groups within the Russell 2500 Financial Services Index. Our preference is for conservatively capitalized, fundamentally strong financial services businesses that we think are both well managed and trading at attractively low valuations based on our estimate of the company’s intrinsic worth. This predisposition toward strong balance sheets and other metrics indicating financial health, such as high returns on invested capital, free cash flow generation, and a history of earnings, has led us historically to overweight asset management businesses and invest in an ample number of insurance companies and tech-related financial services businesses. This was the case at the end of 2014. |
16 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOL RYFSX |
Performance and Expenses | ||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | SINCE INCEPTION (12/31/03) | |||||||
RFS | -0.16 | 3.45 | 21.04 | 13.26 | 7.82 | 8.46 | ||||||
Annual Gross Operating Expenses: 1.97% Annual Net Operating Expenses: 1.57% | ||||||||||||
*Not Annualized |
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 74 for additional information. |
Invested on 12/31/10 as of 12/31/14 ($)
Top 10 Positions | ||
% of Net Assets | ||
Federated Investors Cl. B | 2.2 | |
WisdomTree Investments | 2.1 | |
Charles Schwab | 2.0 | |
Marsh & McLennan | 1.9 | |
RLI Corp. | 1.9 | |
Broadridge Financial Solutions | 1.9 | |
Northern Trust | 1.9 | |
Value Partners Group | 1.8 | |
Diamond Hill Investment Group | 1.8 | |
FirstService Corporation | 1.7 | |
Portfolio Industry Breakdown | ||
% of Net Assets | ||
Capital Markets | 53.8 | |
Insurance | 10.8 | |
Diversified Financial Services | 9.9 | |
Banks | 3.9 | |
Professional Services | 2.7 | |
Real Estate Management & Development | 2.6 | |
Software | 2.5 | |
IT Services | 2.5 | |
Internet Software & Services | 1.8 | |
Consumer Finance | 1.7 | |
Investment Companies | 1.4 | |
Media | 0.5 | |
Hotel, Restaurants & Leisure | 0.1 | |
Miscellaneous | 2.8 | |
Cash and Cash Equivalents | 3.0 | |
Calendar Year Total Returns (%) | ||||||||||||
YEAR | RFS | |||||||||||
2014 | 3.5 | |||||||||||
2013 | 42.0 | |||||||||||
2012 | 20.7 | |||||||||||
2011 | -11.3 | |||||||||||
2010 | 18.5 | |||||||||||
2009 | 32.1 | |||||||||||
2008 | -35.4 | |||||||||||
2007 | -4.7 | |||||||||||
2006 | 24.8 | |||||||||||
2005 | 12.2 | |||||||||||
2004 | 15.1 | |||||||||||
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/14 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 91 | 86 | ||
Fund’s First Full Quarter (12/31/03) | 89 | 84 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $54 million | |
Number of Holdings | 92 | |
Turnover Rate | 41% | |
Average Market Capitalization1 | $2,343 million | |
Weighted Average P/E Ratio2,3 | 18.8x | |
Weighted Average P/B Ratio2 | 2.1x | |
Holdings ≥ 75% of Total Investments | 50 | |
Active Share4 | 98% | |
U.S. Investments (% of Net Assets) | 66.2% | |
Non-U.S. Investments (% of Net Assets) | 30.8% | |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (12% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Gross operating expenses reflect the Fund’s gross total annual operating expenses for the Service Class and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive fees and/or reimburse expenses to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.49% through April 30, 2015. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 17 |
MANAGER’S DISCUSSION | |||
Royce SMid-Cap Value Fund |
Steven McBoyle, CPA, CA |
FUND PERFORMANCE Royce SMid-Cap Value Fund (“RSV”) was down 1.7% in 2014, substantially behind its small- and mid-cap benchmark, the Russell 2500 Index, which increased 7.1% for the same period. The Fund enjoyed a terrific first-half performance, which helped to keep it ahead of its benchmark on a year-to-date basis into late October. The Fund advanced an impressive 13.7% for the six-month period ended June 30, 2014, more than doubling the return of the Russell 2500, which gained 5.9% for the same period. RSV then lost 9.3% in the third quarter, falling behind its benchmark, which declined 5.3%. Quarterly underperformance was largely the result of poor performance from companies in the Energy sector and those in the metals & mining and machinery industries. Unfortunately, the downward trend for the Fund persisted into the fourth quarter at the same time that many small- and mid-cap stocks (at least those outside the energy industry) were recovering. RSV lost 4.6% in the fourth quarter compared to a gain of 6.8% for the Russell 2500. While these results were discouraging, we are confident that the Fund’s returns can improve when the market enters a historically more typical performance cycle in which company fundamentals matter more. Three- and five-year results for the Fund were solid. |
WHAT WORKED... AND WHAT DIDN’T Three of the Fund’s eight equity sectors posted net gains in 2014. Information Technology—lifted by top-10 holding Western Digital and top-20 holding SanDisk Corporation—led by a sizable margin, followed by Health Care (where the Fund was significantly underweight versus the Russell 2500) and Consumer Discretionary, where RSV was nearly even with the index at the end of 2014. Myriad Genetics made the largest positive contribution of all the Fund’s positions. We were pleased with its progress over the last 18 months. A molecular diagnostic company with a specialty in genetic testing for cancer, its share price fell rapidly in the second half of 2013 once the Supreme Court held that human genes cannot be patented. The stock then began to get healthy in 2014. The first-half acquisition of Crescendo Bioscience diversified Myriad’s already promising pipeline, and its genetic panel test—MyRisk—looked promising. Its stock stumbled in the fourth quarter when the MyRisk adoption proved more expensive than expected, causing sales deferrals and higher operating costs. We took some gains in 2014, though we remained confident in Myriad’s long-term prospects. Those words also summed up our thoughts about Western Digital, which develops and manufactures digital storage solutions. Its share price was somewhat volatile in 2014, especially through the year’s first nine months. However, it began to move up more steadily in October when the company announced strong revenues, earnings, and cash flows for its fiscal second quarter that were driven by gains in its capacity enterprise hard drive and flash platform solutions businesses. |
The nearly 50% decline in crude oil prices was the motive force behind net losses in the Energy sector, which went from being the Fund’s top contributor in the first half to its leading detractor in both the second half and the full year. The portfolio also had a substantial overweight in the sector. We like the long-term prospects for Trican Well Service, a Canadian oilfield services company and that nation’s largest pressure pumping service provider. It was trading below book value at the end of 2014. The longstanding operational success of Unit Corporation seemed to offer little comfort to anxious investors fleeing energy stocks. Unit operates several businesses—it explores for oil and natural gas, acquires oil and gas properties, does contract drilling of onshore oil and natural gas wells, and gathers and processes natural gas. We took the long view and held positions in these and other energy companies at year end. All but one were in the energy equipment & services industry. |
Ashmore Group was the Fund’s largest-detracting position in 2014. A London-based asset manager and a global leader in emerging market investing, its shares were challenged by worries about the debt cycle and bad news out of Russia and other emerging markets in 2014. Earnings have taken a hit but revenues have remained fairly steady. It was the Fund’s eleventh-largest position at the end of the period. We chose to part ways with Nu Skin Enterprises by selling our shares in September. A manufacturer and distributor of skin and other personal care products, the company met several challenges over the last year, which included settling some issues with the Chinese government by paying fines and improving training, restructuring its debt covenants, and reversing a cash flow problem. While these were positive developments, we thought its turnaround would likely take longer than we were prepared to wait. |
Top Contributors to Performance For 2014 (%)1 | ||
Myriad Genetics | 2.02 | |
Western Digital | 1.00 | |
SanDisk Corporation | 0.88 | |
Bed Bath & Beyond | 0.60 | |
Signet Jewelers | 0.60 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
Ashmore Group | -1.15 | |
Trican Well Service | -1.12 | |
Unit Corporation | -0.95 | |
TGS-NOPEC Geophysical | -0.85 | |
Nu Skin Enterprises Cl. A | -0.78 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK Effective November 10, 2014, Steven G. McBoyle manages the Fund after previously co-managing it since its inception. Industrials—the Fund’s largest sector at year end and an overweight versus the Russell 2500—remains an area of focus. Throughout 2014 we added to the Consumer Discretionary sector based on our belief that the expanding economy, improved employment picture, and lower energy prices will all encourage consumption in 2015. |
18 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOL RMVSX |
Performance and Expenses | ||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | SINCE INCEPTION (9/28/07) | ||||||||||
RSV | -13.53 | -1.68 | 11.74 | 9.22 | 4.93 | |||||||||
Annual Gross Operating Expenses: 2.20% | Annual Net Operating Expenses: 1.35% | |||||||||||||
*Not Annualized |
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 74 for additional information. |
Value of $10,000
Top 10 Positions | ||
% of Net Assets | ||
Thor Industries | 4.3 | |
Cirrus Logic | 4.1 | |
AGCO Corporation | 4.0 | |
Western Digital | 3.9 | |
Kennedy-Wilson Holdings | 3.8 | |
Globe Specialty Metals | 3.8 | |
Semperit AG Holding | 3.6 | |
Bed Bath & Beyond | 3.4 | |
ManpowerGroup | 3.4 | |
TGS-NOPEC Geophysical | 3.3 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Industrials | 17.9 | |
Materials | 16.1 | |
Financials | 15.0 | |
Consumer Discretionary | 14.6 | |
Energy | 13.4 | |
Information Technology | 12.2 | |
Health Care | 5.2 | |
Consumer Staples | 2.5 | |
Cash and Cash Equivalents | 3.1 | |
Calendar Year Total Returns (%) | ||
YEAR | RSV | |
2014 | -1.7 | |
2013 | 22.9 | |
2012 | 15.4 | |
2011 | -11.6 | |
2010 | 26.0 | |
2009 | 28.7 | |
2008 | -29.3 | |
Portfolio Diagnostics | |||
Fund Net Assets | $16 million | ||
Number of Holdings | 44 | ||
Turnover Rate | 41% | ||
Average Market Capitalization1 | $3,345 million | ||
Weighted Average P/E Ratio2,3 | 16.0x | ||
Weighted Average P/B Ratio2 | 2.1x | ||
Holdings ≥ 75% of Total Investments | 24 | ||
Active Share4 | 99% | ||
U.S. Investments (% of Net Assets) | 70.9% | ||
Non-U.S. Investments (% of Net Assets) | 26.0% | ||
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. | |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. | |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (11% of portfolio holdings as of 12/31/14). | |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Gross operating expenses reflect gross total annual operating expenses for the Service Class and include management fees, 12b-1 distribution and service fees, and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. 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 to the extent necessary to maintain the Service Class’s net annual operating expenses, (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.35% through April 30, 2015 and at or below 1.99% through April 30, 2021). Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. |
The Royce Funds 2014 Annual Report to Shareholders | 19
MANAGER’S DISCUSSION | |||
Royce Partners Fund |
Chuck Royce |
FUND PERFORMANCE Royce Partners Fund (“PTR”) was down 0.8% in 2014, significantly underperforming its small- and mid-cap benchmark, the Russell 2500 Index, which increased 7.1% for the same period. Results were frustrating for much of the year. The Fund gained 2.8% for the six-month period ended June 30, 2014 versus a 5.9% advance for the Russell 2500. These returns reflected the mildly bullish period that characterized most of the year’s first half. Both increased volatility and a bearish wave hit small-cap stocks in the third quarter. Mid-caps suffered fewer net losses as a group while U.S. large-cap stocks went largely unaffected. PTR lost fractionally less than its benchmark for the third quarter, losing 5.2% compared to a loss of 5.3% for the index. Small-cap share prices began to recover off a mid-October low, and a dynamic rally enlivened the last weeks of December. The Fund, unfortunately, could not keep pace. For the fourth quarter, PTR advanced 1.8% while the Russell 2500 rose 6.8%. The Fund’s three-year, five-year, and since inception (4/27/09) returns were solid on an absolute basis, though they fell short of both the benchmark and our own expectations. PTR’s average annual total return since inception was 12.2%. |
WHAT WORKED... AND WHAT DIDN’T Four of the Fund’s nine equity sectors posted net losses in 2014, with Energy having by far the largest negative impact. This was not a surprise. While PTR’s exposure to the sector was modest (and underweight versus the Russell 2500 at year end), a nearly 50% decline in crude prices in the second half was going to have a measurable drag on performance. Three of the Fund’s top five detractors from performance in 2014 were energy equipment & services companies. For the most part, we chose to hold our positions in the industry at the end of the year with the thought that fundamentally sound companies would be well positioned for a recovery. Many companies involved in offshore drilling were among the hardest and earliest hit when crude prices were first falling because of that activity’s inherently higher costs. Louisiana-based Tidewater provides marine service vessels to offshore energy companies. The short-term outlook for the industry was so poor that even the announcement in November of better-than-expected fiscal second-quarter earnings could not help its stock price. We held our shares in Tidewater as we did with London-based Ensco, an offshore contract driller. Like Tidewater, it has executed successfully and profitably and thus looked more than capable of rebounding. Sensing that Transocean’s recovery might take longer than we were willing to wait, we opted to sell our shares. A Swiss company, Transocean is the world’s largest offshore driller. Its stock price declined by nearly 60% in 2014 based on falling oil prices and an oversupplied ultra-deep water drilling market. |
Outside of Energy, we chose to hold our position in emerging markets asset manager Ashmore Group, another London-based business. Its shares struggled amidst worries about global debt, the ongoing problems in Russia, and anxieties about the pace of growth in other emerging markets. A stronger British pound and lower performance fees also hurt its performance. Heritage-Crystal Clean provides parts cleaning, used oil re-refining, and hazardous and non-hazardous waste services to small- and mid-sized customers in the manufacturing and vehicle service industries. Its shares took a hit in December when the firm announced that it was issuing more stock to pay down debt incurred to make two recent acquisitions. We were cautiously optimistic about its turnaround potential at the end of 2014. |
The Financials sector was the portfolio’s top contributor by a wide margin in 2014. It was followed by solid net gains for Information Technology and more modest contributions from Health Care, Consumer Staples, and Utilities. The Fund’s four top performers (and five of its top 10) came from the Financials sector. BBVA Banco Frances ADR is one of Argentina’s largest banks. Its strong revenue growth and terrific history of earnings per share growth helped to reassure investors otherwise anxious over the nation’s recent debt woes. It was a top-20 position at the end of 2014. Based in Chicago, Jones Lang LaSalle is a financial and professional services firm that specializes in commercial real estate services. The company saw its most impressive growth in fee revenues from the Americas, though it also experienced growth from EMEA (Europe, the Middle East, and Africa) and the Asia Pacific region. We like that the company increased the dividend that was paid in December. It was a top-10 holding at year end. |
Top Contributors to Performance For 2014 (%)1 | ||||
BBVA Banco Frances ADR | 0.79 | |||
Jones Lang LaSalle | 0.57 | |||
Monroe Capital | 0.44 | |||
Coronation Fund Managers | 0.43 | |||
Myriad Genetics | 0.42 | |||
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||||
Tidewater | -0.67 | |||
Heritage-Crystal Clean | -0.66 | |||
Ashmore Group | -0.58 | |||
Transocean | -0.54 | |||
Ensco Cl. A | -0.48 | |||
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK At the end of 2014, PTR had a substantial overweight in Financials. Most of the portfolio’s holdings in the sector were from the capital markets industry, which includes asset management businesses. The Fund was also overweight in Industrials and Materials, and had a sizable exposure to Information Technology. These weightings reflected our confidence in the growth potential for more economically cyclical sectors as well as our belief that we should see some recovery for commodity prices in the months ahead. |
20 | The Royce Funds 2014 Annual Report to Shareholders
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOL RPTRX |
Performance and Expenses | ||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | SINCE INCEPTION (4/27/09) | ||||||
PTR | -3.52 | -0.85 | 16.54 | 10.67 | 12.16 | |||||
Annual Gross Operating Expenses: 3.97% | Annual Net Operating Expenses: 1.26% | |||||||||
*Not Annualized |
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 74 for additional information. |
Value of $10,000
Invested on 12/15/93 as of 12/31/14 ($)
Top 10 Positions | ||||||||||||||
% of Net Assets | ||||||||||||||
E-L Financial | 2.6 | |||||||||||||
Value Partners Group | 2.5 | |||||||||||||
State Street | 2.5 | |||||||||||||
Atrion Corporation | 2.5 | |||||||||||||
MasterCard Cl. A | 2.2 | |||||||||||||
Bank of New York Mellon (The) | 2.0 | |||||||||||||
Moody’s Corporation | 1.8 | |||||||||||||
Charles Schwab | 1.8 | |||||||||||||
Monroe Capital | 1.8 | |||||||||||||
Jones Lang LaSalle | 1.7 | |||||||||||||
Portfolio Sector Breakdown | ||||||||||||||
% of Net Assets | ||||||||||||||
Financials | 32.8 | |||||||||||||
Industrials | 19.5 | |||||||||||||
Information Technology | 11.9 | |||||||||||||
Materials | 8.3 | |||||||||||||
Health Care | 4.2 | |||||||||||||
Energy | 3.1 | |||||||||||||
Consumer Discretionary | 2.0 | |||||||||||||
Consumer Staples | 1.2 | |||||||||||||
Miscellaneous | 2.0 | |||||||||||||
Cash and Cash Equivalents | 15.0 | |||||||||||||
Calendar Year Total Returns (%) | ||||||||||||||
YEAR | PTR | |||||||||||||
2014 | -0.8 | |||||||||||||
2013 | 32.2 | |||||||||||||
2012 | 20.7 | |||||||||||||
2011 | -11.7 | |||||||||||||
2010 | 18.7 | |||||||||||||
Portfolio Diagnostics | ||||||||||||||
Fund Net Assets | $3 million | |||||||||||||
Number of Holdings | 63 | |||||||||||||
Turnover Rate | 8% | |||||||||||||
Average Market Capitalization1 | $3,410 million | |||||||||||||
Weighted Average P/E Ratio2,3 | 17.0x | |||||||||||||
Weighted Average P/B Ratio2 | 2.1x | |||||||||||||
Holdings ≥ 75% of Total Investments | 40 | |||||||||||||
Active Share4 | 98% | |||||||||||||
U.S. Investments (% of Net Assets) | 58.2% | |||||||||||||
Non-U.S. Investments (% of Net Assets) | 26.8% | |||||||||||||
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (7% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Gross operating expenses reflect total gross annual operating expenses and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Net operating expenses reflect contractual fee waivers and/or reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive its fees and/or reimburse operating expenses to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.20% through April 30, 2015 and 1.84% through April 30, 2024. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. |
The Royce Funds 2014 Annual Report to Shareholders | 21 |
MANAGERS’ DISCUSSION |
Royce European Smaller-Companies Fund |
David Nadel Mark Rayner, CA |
FUND PERFORMANCE |
Royce European Smaller-Companies Fund (“RES”) was down 14.9% in 2014, lagging its benchmark, the Russell Europe Small Cap Index, which fell 8.5% for the same period. The Fund’s relative and absolute challenges were largely due to a poor second half. After generally outperforming their domestic counterparts in the last six months of 2013, European equities continued to build momentum. By the end of 2014’s first quarter many European stocks remained ahead of their U.S. peers. European equity performance then began to slow in the second quarter, with returns falling into the red while other international and U.S. markets stayed in positive territory. Though we were pleased with the Fund’s relative performance in the second quarter (+0.6% versus -1.0% for the Russell Europe Small Cap), RES was shy of the benchmark’s returns in the first half of 2014. For the six-month period ended June 30, 2014, the Fund gained 4.6% compared to 5.5% for its benchmark. |
Losses continued to mount in July, when stocks across the globe corrected (with the exception of U.S. large-caps). European shares were among the most adversely affected, and RES was no exception. For the third quarter the Fund fell 11.2%, trailing the Russell Europe Small Cap, which declined 10.7%. Portfolio holdings headquartered in France, the U.K., Norway, and Germany hurt most. The fourth quarter was equally unkind. U.S. small-caps rallied off a mid-October low, but many non-U.S. companies continued to struggle. Holdings headquartered in the U.K. had an outsized negative effect, while those in Cyprus and Germany also suffered large net losses in the fourth quarter. However, we were somewhat encouraged that our investments headquartered in Denmark were able to bounce back in the year’s final three months, as was the case with third-quarter detractors Austria and Turkey. Still, RES’s fourth-quarter performance on both a relative and absolute basis was dispiriting. For the quarter, RES was down 8.3% versus the European benchmark’s 2.9% loss. The Fund outpaced the Russell Europe Small Cap for the since inception (12/29/06) period ended December 31, 2014. |
WHAT WORKED... AND WHAT DIDN’T |
All but one of the Fund’s nine equity sectors posted net losses in 2014, and the net gain for Health Care was decidedly modest. A collapse in oil prices helped to make Energy RES’s top detractor for the calendar year after it posted generous net gains for the Fund in the first half. Industrials and Information Technology were also major trouble spots at year end. Globaltrans Investment GDR is a leading private freight rail transportation group with operations in Russia, the CIS (the Commonwealth of Independent States, including Ukraine), and the Baltics. Affected by tensions in Ukraine and the weakening ruble, Globaltrans lost about 70% of its value by year end. With more than 85% of freight transported by rail in Russia, we believe the company can improve its competitive position in the next couple of years. We added shares throughout the year. The second-half collapse in energy prices and pressure on other commodities thus took an enormous toll on results for both the second half and full year. Being overweight in Energy versus the Russell Europe Small Cap also hampered relative results. We are well aware of the near-term stresses on energy prices, which include surging supply from U.S. shale plays and weaker European and emerging market economies (the latter having been a key source of incremental demand). However, we have also been pleased with the way that most of the portfolio’s energy names have been executing. We have mostly chosen to hold positions in the belief that lower energy prices will ultimately spur demand and thus eventually start the next up cycle in commodity prices. EnQuest is a London-based oil and gas development and production company, and Fred. Olsen Energy is an offshore driller with activities in the mid- and deep-water floating drilling segment based in Oslo, Norway. The share prices of both companies suffered badly in the second half. The strengthening U.S. dollar was also a factor in the performance of European holdings. |
Shares of London-based design and engineering consultancy firm Hyder Consulting jumped early in the second half after being the center of a bidding war between Tokyo-based Nippon Koei and Dutch firm Arcadis. Following the announcement in late July that Hyder had reached an agreement with Arcadis, we sold our stake. Eltek, a Norwegian business which makes power systems and solutions for telecommunications and datacenters, power utilities, and other industries, was also the target of a take-out. In mid-December the company announced that Netherlands-based Deltronics, a subsidiary of Taiwanese company Delta Electronics, would be acquiring all its shares through a voluntary cash offer. We sold our stake on the news. |
Top Contributors to Performance For 2014 (%)1 | ||||||||||||||
Hyder Consulting | 0.67 | |||||||||||||
Eltek | 0.51 | |||||||||||||
Forbo Holding | 0.33 | |||||||||||||
Boiron | 0.33 | |||||||||||||
F-Secure | 0.31 | |||||||||||||
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||||||||||||||
Globaltrans Investment GDR | -1.56 | |||||||||||||
EnQuest | -1.44 | |||||||||||||
Fred. Olsen Energy | -1.36 | |||||||||||||
Nokian Renkaat | -1.07 | |||||||||||||
LPKF Laser & Electronics | -1.00 | |||||||||||||
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK |
At year end, RES was overweight in economically sensitive cyclical sectors such as Information Technology, Materials, and Energy. The Fund was also overweight in Health Care. As bottom-up stock pickers who focus on fundamentals, we are finding attractive valuations in the U.K., France, and Germany and continue to seek companies that we believe can remain competitive in the challenging European market. |
22 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RISCX RESNX |
Performance and Expenses | ||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | SINCE INCEPTION (12/29/06) | ||||||
RES | -18.60 | -14.86 | 8.40 | 6.53 | 2.06 | |||||
Annual Gross Operating Expenses: 2.27% Annual Net Operating Expenses: 1.70% | ||||||||||
*Not Annualized |
Relative Returns: Monthly Rolling Average Annual Return Periods |
On a monthly rolling basis, the Fund outperformed the Russell Euro SC in 73% of all 5-year periods; 67% of all 3-year periods; 52% of all 1-year periods; |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
5-year | 27/37 | 73% | 7.6 | 4.8 | |||||||
3-year | 41/61 | 67% | 7.7 | 4.9 | |||||||
1year | 44/85 | 52% | 7.9 | 6.9 | |||||||
*Average of monthly rolling average annual total returns over the specified periods. | |||||||||||
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 74 for additional information. |
Value of $10,000
Invested on 12/29/06 as of 12/31/14 ($)
Top 10 Positions | ||||||||||||||
% of Net Assets | ||||||||||||||
Mayr-Melnhof Karton | 2.8 | |||||||||||||
Ashmore Group | 2.8 | |||||||||||||
Semperit AG Holding | 2.6 | |||||||||||||
Stallergenes | 2.3 | |||||||||||||
VZ Holding | 2.3 | |||||||||||||
Kennedy Wilson Europe Real Estate | 2.2 | |||||||||||||
LPKF Laser & Electronics | 2.2 | |||||||||||||
Nokian Renkaat | 2.2 | |||||||||||||
Consort Medical | 2.2 | |||||||||||||
Senior | 2.1 | |||||||||||||
Portfolio Sector Breakdown | ||||||||||||||
% of Net Assets | ||||||||||||||
Industrials | 24.6 | |||||||||||||
Information Technology | 17.4 | |||||||||||||
Health Care | 17.2 | |||||||||||||
Financials | 13.5 | |||||||||||||
Materials | 9.3 | |||||||||||||
Consumer Discretionary | 8.0 | |||||||||||||
Energy | 7.1 | |||||||||||||
Consumer Staples | 1.3 | |||||||||||||
Cash and Cash Equivalents | 1.6 | |||||||||||||
Upside/Downside Capture Ratios | ||||||||||||||
Periods Ended 12/31/14 (%) | ||||||||||||||
UPSIDE | DOWNSIDE | |||||||||||||
Fund’s First Full Quarter | ||||||||||||||
(12/31/06) | 89 | 85 | ||||||||||||
Calendar Year Total Returns (%) | ||||||||||||||
YEAR | RES | |||||||||||||
2014 | -14.9 | |||||||||||||
2013 | 20.8 | |||||||||||||
2012 | 23.8 | |||||||||||||
2011 | -20.3 | |||||||||||||
2010 | 35.2 | |||||||||||||
2009 | 57.7 | |||||||||||||
2008 | -46.4 | |||||||||||||
2007 | 1.4 | |||||||||||||
Portfolio Country Breakdown1,2 | ||||||||||||||
% of Net Assets | ||||||||||||||
United Kingdom | 31.7 | |||||||||||||
France | 22.7 | |||||||||||||
Germany | 7.8 | |||||||||||||
Italy | 5.5 | |||||||||||||
Austria | 5.5 | |||||||||||||
Norway | 4.1 | |||||||||||||
Switzerland | 3.7 | |||||||||||||
1 | Represents countries that are 3% or more of net assets. |
2 | Securities are categorized by the country of their headquarters. |
Portfolio Diagnostics | ||||||||||||||
Fund Net Assets | $22 million | |||||||||||||
Number of Holdings | 63 | |||||||||||||
Turnover Rate | 65% | |||||||||||||
Average Market Capitalization1 | $889 million | |||||||||||||
Weighted Average P/E Ratio2,3 | 14.7x | |||||||||||||
Weighted Average P/B Ratio2 | 1.8x | |||||||||||||
Holdings ≥ 75% of Total Investments | 40 | |||||||||||||
Active Share4 | 96% | |||||||||||||
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (9% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 2% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Gross operating expenses reflect total gross annual operating expenses and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive its fees and/or reimburse operating expenses to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.69% through April 30, 2015 and at or below 1.99% through April 30, 2024. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell Europe Small Cap). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 23 |
MANAGER’S DISCUSSION | |||
Royce Global Dividend Value Fund |
Chuck Royce |
FUND PERFORMANCE |
Royce Global Dividend Value Fund (“RGD”) was down 6.8% in 2014, trailing its benchmark, the Russell Global Small Cap Index, which fell 0.3% for the same period. These results were disappointing on both a relative and absolute basis, especially considering the Fund’s competitiveness in the first half of the year when equities around the world—particularly those outside the U.S.—enjoyed positive returns. For the six-month period ended June 30, 2014, RGD gained 5.4%, narrowly behind the global small-cap benchmark’s 5.7% increase for the same period. |
In the third quarter, however, stocks across the globe corrected (with the exception of U.S. large-cap stocks). European shares, after exhibiting several months of strength, felt the brunt of the downturn. RGD fell 6.9% in the third quarter compared to the Russell Global Small Cap’s 6.7% decline. Portfolio holdings headquartered in Canada, the U.S., and the U.K. were the largest detractors from third-quarter performance while those headquartered in China and South Korea posted modest net gains. The performance spread between RGD and its benchmark would widen in the fourth quarter, a period in which U.S. small-caps rallied off a mid-October low while many non-U.S. companies saw additional losses or struggled to stay afloat. For the quarter, the Fund fell 5.0% compared to the Russell Global Small Cap’s 1.1% gain. Holdings headquartered in South Africa and, to a lesser degree, the U.S. made a positive impact on fourth-quarter results while those headquartered in Canada and the U.K. remained detractors, this time joined by holdings in Brazil and Malaysia. Long-term performance results were also disappointing, though we believe our disciplined value approach can eventually bear fruit. |
WHAT WORKED... AND WHAT DIDN’T |
Four of the Fund’s nine equity sectors posted net gains for the calendar year, with Information Technology leading the list. Consumer Staples, Utilities, and Health Care were also positive contributors, though net gains for the last two sectors were modest. Conversely, Consumer Discretionary was RGD’s worst-performing sector by a wide margin, followed by Energy and Industrials. (Financials and Materials posted modest net losses.) South Africa’s Coronation Fund Managers is a global asset management company that offers services to institutional and individual investors. The firm has seen robust growth in assets and revenues, with both its South African and international businesses growing. At the end of 2014 it was the twelfth-largest position in the portfolio. Shares of London-based design and engineering consultancy firm Hyder Consulting jumped early in the second half after being the center of a bidding war between Tokyo-based Nippon Koei and Dutch firm Arcadis. Following the announcement in late July that Hyder had reached an agreement with Arcadis, we sold our stake. Silverlake Axis is a Singapore-based company that provides customized software solutions to the banking and insurance industries. After reporting a more than 25% increase in year-over-year fiscal third-quarter revenues late in May, its stock took off. Late in August the stock jumped again when fiscal 2014 results were announced. The company reported robust profits and revenues driven in part by maintenance and enhancement services and software licensing. We trimmed our position in 2014. |
Globaltrans Investment GDR is a leading private freight rail transportation group with operations in Russia, the CIS (the Commonwealth of Independent States, including Ukraine), and the Baltics. Affected by tensions in Ukraine and the weakening ruble, Globaltrans lost about 70% of its value by year end. With more than 85% of freight transported by rail in Russia, we believe the company can improve its competitive position in the next couple of years. We added shares throughout the year. The second-half collapse in energy prices and pressure on other commodities in the second half hurt calendar-year results for Oslo-based Fred. Olsen Energy. The company, an offshore driller with activities in the mid- and deep-water floating drilling segment, predicted lower demand in the global rig market and reported lower-than-expected third-quarter profits in October. We reduced our position, though we think the company’s stock can eventually recover. Brazil’s weak economy, along with a slowdown in the real estate market and economic uncertainty over the re-election of President Dilma Rousseff, all hurt the share price of Brasil Brokers Participacoes, which remained a top detractor after a rough first half. We gradually trimmed our position in September and October. The strengthening U.S. dollar was also a factor in the performance of non-U.S. holdings. |
Top Contributors to Performance For 2014 (%)1 | ||||||||||||||
Coronation Fund Managers | 0.33 | |||||||||||||
Hyder Consulting | 0.28 | |||||||||||||
Silverlake Axis | 0.28 | |||||||||||||
Hanssem | 0.27 | |||||||||||||
Regent Manner International | ||||||||||||||
Holdings | 0.26 | |||||||||||||
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||||||||||||||
Globaltrans Investment GDR | -0.68 | |||||||||||||
Fred. Olsen Energy | -0.60 | |||||||||||||
Brasil Brokers Participacoes | -0.54 | |||||||||||||
Transocean | -0.47 | |||||||||||||
Nokian Renkaat | -0.40 | |||||||||||||
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK |
At the end of 2014, RGD was overweight in cyclical sectors such as Consumer Discretionary and Industrials. We continue to position the portfolio for an eventual recovery in global economic growth, and still believe that—despite the market’s preference for high yields in 2014—consistent dividend-payers have long-term advantages. |
24 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOL RGVDX |
Performance and Expenses | ||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||
JUL-DEC 2014* | 1-YR | 3-YR | SINCE INCEPTION (12/31/10) | |||||
RGD | -11.59 | -6.84 | 9.74 | 2.84 | ||||
Annual Gross Operating Expenses: 2.99% Annual Net Operating Expenses: 1.70% | ||||||||
*Not Annualized |
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 74 for additional information. |
Value of $10,000
Invested on 12/31/10 as of 12/31/14 ($)
Top 10 Positions | ||||||||||||||
% of Net Assets | ||||||||||||||
Value Partners Group | 1.5 | |||||||||||||
Television Broadcasts | 1.3 | |||||||||||||
Nexity | 1.3 | |||||||||||||
Xtep International Holdings | 1.2 | |||||||||||||
Afrimat | 1.2 | |||||||||||||
Pico Far East Holdings | 1.1 | |||||||||||||
Aramex | 1.1 | |||||||||||||
Selamat Sempurna | 1.1 | |||||||||||||
Kaba Holding | 1.1 | |||||||||||||
Forbo Holding | 1.1 | |||||||||||||
Portfolio Sector Breakdown | ||||||||||||||
% of Net Assets | ||||||||||||||
Consumer Discretionary | 24.5 | |||||||||||||
Industrials | 19.1 | |||||||||||||
Financials | 18.8 | |||||||||||||
Information Technology | 13.9 | |||||||||||||
Materials | 6.2 | |||||||||||||
Health Care | 5.8 | |||||||||||||
Consumer Staples | 3.9 | |||||||||||||
Energy | 2.0 | |||||||||||||
Cash and Cash Equivalents | 5.8 | |||||||||||||
Calendar Year Total Returns (%) | ||||||||||||||
YEAR | RGD | |||||||||||||
2014 | -6.8 | |||||||||||||
2013 | 15.8 | |||||||||||||
2012 | 22.5 | |||||||||||||
2011 | -15.4 | |||||||||||||
Portfolio Country Breakdown1,2 | ||||||||||||||
% of Net Assets | ||||||||||||||
Hong Kong | 10.9 | |||||||||||||
United Kingdom | 10.0 | |||||||||||||
South Africa | 8.1 | |||||||||||||
Canada | 5.8 | |||||||||||||
Switzerland | 5.2 | |||||||||||||
United States | 5.0 | |||||||||||||
Brazil | 4.9 | |||||||||||||
France | 4.6 | |||||||||||||
Germany | 4.4 | |||||||||||||
Japan | 4.3 | |||||||||||||
Singapore | 3.2 | |||||||||||||
1 | Represents countries that are 3% or more of net assets. |
2 | Securities are categorized by the country of their headquarters. |
Portfolio Diagnostics | ||||||||||||||
Fund Net Assets | $7 million | |||||||||||||
Number of Holdings | 154 | |||||||||||||
Turnover Rate | 33% | |||||||||||||
Average Market Capitalization1 | $983 million | |||||||||||||
Weighted Average P/E Ratio2,3 | 15.8x | |||||||||||||
Weighted Average P/B Ratio2 | 2.0x | |||||||||||||
Holdings ≥ 75% of Total Investments | 85 | |||||||||||||
Active Share4 | 98% | |||||||||||||
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (7% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 2% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Gross operating expenses reflect total gross annual operating expenses and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive its fees and/or reimburse operating expenses to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.69% through April 30, 2015 and at or below 1.99% through April 30, 2024. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. |
25 | The Royce Funds 2014 Annual Report to Shareholders |
MANAGERS’ DISCUSSION | |||
Royce International Micro-Cap Fund |
Dilip Badlani, CFA Jim Harvey, CFA |
FUND PERFORMANCE |
Royce International Micro-Cap Fund (“RMI”) was down 2.4% in 2014, losing less than its benchmark, the Russell Global ex-U.S. Small Cap Index, which lost 3.6% for the same period. For the six-month period ended June 30, 2014, RMI advanced 7.9% compared to the international small-cap index’s 7.5% gain. |
These first six months saw many smaller non-U.S. companies mount a comeback and outpace their domestic counterparts. This picture began to shift with the arrival of more volatility and mostly falling stock prices in the third quarter. The correction found stocks across the globe—with the exception of U.S. large-caps—mostly in the red. Among the most adversely affected were European equities, which had already begun to pull back slightly in the second quarter after a terrific first-quarter showing. During the third-quarter down phase, the Fund outperformed its benchmark’s 6.2% decline with a loss of 3.0%. RMI, however, was unable to add to this advantage in the last three months of the year. While U.S. small-caps rallied off a mid-October low, their non-U.S. counterparts mostly continued to struggle. In the fourth quarter RMI was down 6.6%, trailing its benchmark, which fell 4.5%. Although holdings in South Korea, Austria, and India contributed to fourth-quarter performance, holdings headquartered in Japan, Brazil, Hong Kong, Australia, and China were significant detractors. Longer-term results on an absolute and relative basis were also not in line with our expectations. |
WHAT WORKED... AND WHAT DIDN’T |
During the second half of 2014, we were pleased to see portfolio holdings headquartered in India build on first-half net gains while those in Canada, Germany, and South Korea suffered only minor slippage. Holdings in Brazil and Hong Kong remained top detractors through the end of the year while the portfolio’s holdings in Japan corrected sharply after posting solid net gains in the first half. Brazil-based T4F Entretenimento is the biggest live entertainment promoter in South America and one of the largest in the world. Brazil’s weak consumer sentiment drove reductions in discretionary spending on concerts which, coupled with the pressure the World Cup put on consumers’ wallets, negatively affected its stock price. We believe that the share price should react favorably as business conditions normalize and added to our position throughout the second half. Brazil’s weak economy, along with a slowdown in the real estate market and economic uncertainty over the re-election of President Dilma Rousseff , all hurt the share price of Brasil Brokers Participacoes, which remained a top detractor after a rough first half. The company is one of the country’s two leading real estate brokerages. We like its ability to generate cash, its generous dividend policy, and its large degree of insider ownership. Brasil Insurance Participacoes e Administracao—another top detractor from the semiannual period—is a collection of insurance brokers that have been acquired over the years. New management is working on implementing a turnaround, but in the process of deploying their plan, they had to make significant cuts to guidance to reposition the company for future growth, which hurt its stock price. We re-built our position in July, adding shares in August. The strength of the U.S. dollar also played a role in the performance of non-U.S. holdings. |
Three of RMI’s top contributors to performance in the first half remained so for the full year. Ontario-based Magellan Aerospace serves the civil aerospace and defense market. Magellan has benefited from a strong aerospace and defense capital spending cycle as well as weakness in the Canadian dollar, which has increased its competitiveness versus U.S. suppliers significantly. In addition, a strong management team that is focused on margins has helped drive improvement in earnings and an increase in the overall backlog. We think the stock has the potential for additional growth, so we bought shares in August and September (after reducing our position in the second quarter). Global automotive demand coupled with automation in the industrial supply chain has driven demand for Japanese manufacturer Obara Group’s products. A weakening yen has also helped its position versus foreign competitors. Australia-based TFS Corporation owns and manages sustainable sandalwood plantations. A long-tailed asset that is seeing the benefit of the work that has been put in over the past decade, the company’s plantations are in harvest mode, which should help it to start generating cash flow. An off-take agreement with pharmaceutical company Galderma also helped give proof of concept for the company’s sandalwood oil. |
Top Contributors to Performance For 2014 (%)1 | ||||||||||||||
Magellan Aerospace | 1.06 | |||||||||||||
Obara Group | 0.63 | |||||||||||||
RIB Software | 0.55 | |||||||||||||
TFS Corporation | 0.48 | |||||||||||||
Comba Telecom Systems | ||||||||||||||
Holdings | 0.47 | |||||||||||||
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
T4F Entretenimento | -0.71 | |
Brasil Insurance Participacoes e Administracao | -0.71 | |
Ellies Holdings | -0.61 | |
Brasil Brokers Participacoes | -0.60 | |
Freund Corporation | -0.54 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK |
Anticipating an eventual turnaround in the global economy, we were substantially overweight economically cyclical sectors such as Industrials, Consumer Discretionary, and Information Technology at the end of December. We remain bullish on the prospects for a rebound in Japan and Hong Kong—and had significantly more exposure than the benchmark to the latter nation. |
26 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOL ROIMX |
Performance and Expenses | ||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | SINCE INCEPTION (12/31/10) | |||||||||||
RMI | -9.49 | -2.37 | 9.67 | 0.87 | ||||||||||
Annual Gross Operating Expenses: 3.88% Annual Net Operating Expenses: 1.71% | ||||||||||||||
*Not Annualized |
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 74 for additional information. |
Value of $10,000
Invested on 12/31/10 as of 12/31/14 ($)
Top 10 Positions | ||||||||||||||
% of Net Assets | ||||||||||||||
Trancom | 2.6 | |||||||||||||
Zuiko Corporation | 2.0 | |||||||||||||
Magellan Aerospace | 1.9 | |||||||||||||
Collection House | 1.5 | |||||||||||||
eClerx Services | 1.5 | |||||||||||||
MTY Food Group | 1.4 | |||||||||||||
Pacific Online | 1.4 | |||||||||||||
I.T | 1.3 | |||||||||||||
Imdex | 1.3 | |||||||||||||
Nitto Kohki | 1.3 | |||||||||||||
Portfolio Sector Breakdown | ||||||||||||||
% of Net Assets | ||||||||||||||
Industrials | 33.2 | |||||||||||||
Consumer Discretionary | 22.7 | |||||||||||||
Information Technology | 19.6 | |||||||||||||
Materials | 7.2 | |||||||||||||
Financials | 6.7 | |||||||||||||
Health Care | 3.3 | |||||||||||||
Consumer Staples | 2.9 | |||||||||||||
Energy | 2.1 | |||||||||||||
Cash and Cash Equivalents | 2.3 | |||||||||||||
Calendar Year Total Returns (%) | ||||||||||||||
YEAR | RMI | |||||||||||||
2014 | -2.4 | |||||||||||||
2013 | 18.9 | |||||||||||||
2012 | 13.6 | |||||||||||||
2011 | -21.5 | |||||||||||||
Portfolio Country Breakdown1,2 | ||||||||||||||
% of Net Assets | ||||||||||||||
Japan | 20.1 | |||||||||||||
Hong Kong | 8.3 | |||||||||||||
Canada | 8.1 | |||||||||||||
United Kingdom | 6.1 | |||||||||||||
Australia | 6.0 | |||||||||||||
South Korea | 5.6 | |||||||||||||
Germany | 5.1 | |||||||||||||
Taiwan | 4.4 | |||||||||||||
China | 3.6 | |||||||||||||
France | 3.6 | |||||||||||||
India | 3.3 | |||||||||||||
1 | Represents countries that are 3% or more of net assets. |
2 | Securities are categorized by the country of their headquarters. |
Portfolio Diagnostics | ||||||||||||||
Fund Net Assets | $6 million | |||||||||||||
Number of Holdings | 123 | |||||||||||||
Turnover Rate | 91% | |||||||||||||
Average Market Capitalization1 | $306 million | |||||||||||||
Weighted Average P/E Ratio2,3 | 13.4x | |||||||||||||
Weighted Average P/B Ratio2 | 1.4x | |||||||||||||
Holdings ≥ 75% of Total Investments | 74 | |||||||||||||
Active Share4 | 99% | |||||||||||||
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (9% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 2% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Gross operating expenses reflect total gross annual operating expenses and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive its fees and/or reimburse operating expenses, to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.69% through April 30, 2015 and at or below 1.99% though April 30, 2024. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. |
The Royce Funds 2014 Annual Report to Shareholders | 27 |
MANAGER’S DISCUSSION | |||
Royce International Premier Fund |
David Nadel |
FUND PERFORMANCE |
Royce International Premier Fund (“RIP”) was down 8.2% in 2014, behind its benchmark, the Russell Global ex-U.S. Small Cap Index, which fell 3.6% for the same period. Europe’s renewed strength in 2014’s first quarter, which mitigated corrections for many Asian markets, also helped to give international small-caps a brief run of leadership over their domestic peers. European small-cap performance in the second quarter, though, fell back into negative territory while certain key Asian markets mounted a recovery. Amid these shifts, RIP was in the black for the six-month period ended June 30, 2014, though its 3.3% gain trailed the benchmark’s 7.5% advance. |
Fortunes reversed again for many U.S. and non-U.S. small-caps in the third quarter, which was an especially tough time for smaller European companies. We were pleased with RIP’s relative performance during this period in which the Fund lost 5.8% versus a decline of 6.2% for the international small-cap index. Holdings in the U.K. had an outsized negative impact on third-quarter performance, while those headquartered in India and China helped to moderate net losses. Domestic small-caps then bounced back off a mid-October low, but many non-U.S. companies continued to decline. For the fourth quarter RIP was down 5.6% compared to a 4.5% drop for the Russell Global ex-U.S. Small Cap. Holdings in U.K.-based companies remained the Fund’s top detractors, followed closely by Brazil, while India continued to contribute. Longer-term results were also disappointing on both an absolute and relative basis, though RIP outpaced its benchmark index for the since inception (12/31/10) period ended December 31, 2014. |
WHAT WORKED... AND WHAT DIDN’T |
All eight of the Fund’s equity sectors were in the red at year end, though Materials, Energy, Health Care, Financials, and Consumer Staples had varying levels of modest net losses. Information Technology was the largest detractor by a significant margin, with a negative impact more than double that of Industrials, the Fund’s second-largest detracting sector. At the country level, holdings headquartered in the U.K., Brazil, and Finland were sore spots for the calendar year. Nokian Renkaat is a Finnish company that manufactures and sells tires. Russia accounts for half of the company’s sales. A thus-far mild winter, the devalued ruble, the crisis in Ukraine, and other geopolitical concerns all weakened its share price. We believe the company’s headwinds are temporary and added to our position in 2014. Late in 2013 we also built a position in Brazil’s leading real estate brokerage firm LPS Brasil Consultoria de Imoveis. Mired in a weak housing market, the company also struggled with low consumer confidence and the country’s stagnant economy. |
From the Industrials sector, Latchways is a U.K.-based protective equipment maker specializing in fall protection systems for people working from heights. A profit warning in October led to a precipitous drop in its shares as the slumping European economy led to delayed capital projects. The company also contended with de-stocking by a large North American customer. However, with its balance sheet and its U.K. business still strong, Latchways appeared more than capable of recovering when Europe’s economy does the same. We added to our position throughout the year, and it was RIP’s second-largest holding at year end. AVEVA Group is a British multinational IT company headquartered in Cambridge, U.K. The firm’s exposure to the energy industry—it provides technology to the marine, oil & gas, power, and process industries—combined with a profit warning (driven by contract delays) and a restructuring of its sales force combined to push its share price down. We like its mission-critical software and history of not running in sync with oil prices. Germany’s LPKF Laser & Electronics develops specialized mechanical engineering products for electronics production, the automotive industry, and in the manufacture of solar cells. A revised outlook for 2014 kept investors selling, but we believe the case for long-term growth remained intact. The strength of the U.S. dollar also played a role in the performance of many non-U.S. holdings. |
Holdings headquartered in India made the largest positive impact on performance in 2014. RIP’s top contributor to performance was Bajaj Finance, an Indian business offering an array of services including wealth management, commercial lending, and consumer finance. Improved profitability and earnings, as well as the more optimistic outlook for the Indian economy in the wake of May’s elections, seemed to draw attention to the stock. We reduced our position as its shares climbed. |
Top Contributors to Performance For 2014 (%)1 | ||
Bajaj Finance | 1.67 | |
Motherson Sumi Systems | 0.62 | |
Signet Jewelers | 0.61 | |
Silverlake Axis | 0.48 | |
STRATEC Biomedical | 0.44 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
LPS Brasil Consultoria | ||
de Imoveis | -1.38 | |
Nokian Renkaat | -1.24 | |
Latchways | -1.10 | |
AVEVA Group | -0.95 | |
LPKF Laser & Electronics | -0.79 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK |
At the end of 2014, the portfolio was overweight in cyclical sectors such as Industrials, Consumer Discretionary, and Information Technology. It also had a significant overweight in Health Care. At the country level, the Fund had greater exposure than the benchmark to companies headquartered in the U.K., Switzerland, India, Hong Kong, Brazil, and Germany. |
28 | The Royce Funds 2014 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW | TICKER SYMBOLS RYIPX RIPNX |
Performance and Expenses | ||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||
JUL-DEC 2014* | 1-YR | 3-YR | SINCE INCEPTION (12/31/10) | |||||
RIP | -11.11 | -8.22 | 10.25 | 2.77 | ||||
Annual Gross Operating Expenses: 2.82% Annual Net Operating Expenses: 1.69% | ||||||||
*Not Annualized |
On a monthly rolling basis, the Fund outperformed the Russell Glo x US SC in 69% of all 3-year periods; and 68% of all 1-year periods. |
PERIODS BEATING THE INDEX | FUND AVG (%)* | INDEX AVG (%)* | |||||||||
3-year | 9/13 | 69% | 7.7 | 6.9 | |||||||
1-year | 25/37 | 68% | 7.7 | 7.1 | |||||||
Morningstar Style MapTM As of 12/31/14
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 74 for additional information. |
Value of $10,000
Invested on 12/31/10 as of 12/31/14 ($)
Top 10 Positions | ||||||||||||||
% of Net Assets | ||||||||||||||
Bajaj Finance | 3.1 | |||||||||||||
Latchways | 2.9 | |||||||||||||
Pico Far East Holdings | 2.9 | |||||||||||||
VZ Holding | 2.7 | |||||||||||||
Consort Medical | 2.7 | |||||||||||||
Clarkson | 2.7 | |||||||||||||
Totvs | 2.6 | |||||||||||||
Motherson Sumi Systems | 2.6 | |||||||||||||
Semperit AG Holding | 2.5 | |||||||||||||
Abcam | 2.5 | |||||||||||||
Portfolio Sector Breakdown | ||||||||||||||
% of Net Assets | ||||||||||||||
Industrials | 20.1 | |||||||||||||
Consumer Discretionary | 20.1 | |||||||||||||
Information Technology | 17.6 | |||||||||||||
Financials | 15.9 | |||||||||||||
Health Care | 13.9 | |||||||||||||
Materials | 6.7 | |||||||||||||
Consumer Staples | 4.7 | |||||||||||||
Energy | 2.1 | |||||||||||||
Cash and Cash Equivalents | -1.1 | |||||||||||||
Upside/Downside Capture Ratios | ||||||||||||||
Periods Ended 12/31/14 (%) | ||||||||||||||
UPSIDE | DOWNSIDE | |||||||||||||
Fund’s First Full Quarter | ||||||||||||||
(12/31/10) | 89 | 83 | ||||||||||||
Calendar Year Total Returns (%) | ||||||||||||||
YEAR | RIP | |||||||||||||
2014 | -8.2 | |||||||||||||
2013 | 18.3 | |||||||||||||
2012 | 23.4 | |||||||||||||
2011 | -16.8 | |||||||||||||
Portfolio Country Breakdown1,2 | ||||||||||||||
% of Net Assets | ||||||||||||||
United Kingdom | 30.6 | |||||||||||||
Switzerland | 16.7 | |||||||||||||
India | 7.5 | |||||||||||||
Japan | 7.0 | |||||||||||||
Hong Kong | 6.7 | |||||||||||||
Brazil | 6.3 | |||||||||||||
Germany | 6.1 | |||||||||||||
Austria | 5.0 | |||||||||||||
Italy | 4.0 | |||||||||||||
1 | Represents countries that are 3% or more of net assets. |
2 | Securities are categorized by the country of their headquarters. |
Portfolio Diagnostics | ||||||||||||||
Fund Net Assets | $8 million | |||||||||||||
Number of Holdings | 46 | |||||||||||||
Turnover Rate | 62% | |||||||||||||
Average Market Capitalization1 | $1,545 million | |||||||||||||
Weighted Average P/E Ratio2,3 | 18.6x | |||||||||||||
Weighted Average P/B Ratio2 | 2.9x | |||||||||||||
Holdings ≥ 75% of Total Investments | 32 | |||||||||||||
Active Share4 | 99% | |||||||||||||
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (0% of portfolio holdings as of 12/31/14). |
4 | Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two. |
Important Performance and Expense Information |
All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. Shares redeemed within 30 days of purchase may be subject to a 2% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Price and total return information is based on net asset values for shareholder transactions. Certain immaterial adjustments were made to the net assets of Royce International Premier Fund at 6/30/14 for financial reporting purposes, and as a result the net asset values for shareholder transactions and the calendar year total returns based on those net assets values differ from the adjusted net values and calendar year total returns reported in the Financial Highlights. Gross operating expenses reflect total gross annual operating expenses and include management fees, 12b-1 distribution and service fees, and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive its fees and/ or reimburse operating expenses to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.69% through April 30, 2015 and at or below 1.99% through April 30, 2024. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s performance for 2014. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a Managers’ performance in down markets relative to the Fund’s benchmark (Russell Global ex-U.S. Small Cap). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters. |
The Royce Funds 2014 Annual Report to Shareholders | 29 |
Common Stocks – 93.2%
SHARES | VALUE | ||||||
CONSUMER DISCRETIONARY – 13.5% | |||||||
AUTO COMPONENTS - 2.6% | |||||||
Drew Industries 1 | 6,286 | $ | 321,026 | ||||
Gentex Corporation | 19,050 | 688,277 | |||||
1,009,303 | |||||||
AUTOMOBILES - 1.6% | |||||||
Thor Industries | 11,445 | 639,432 | |||||
HOUSEHOLD DURABLES - 1.8% | |||||||
NVR 1 | 570 | 726,938 | |||||
MEDIA - 1.5% | |||||||
E.W. Scripps Company Cl. A 1 | 15,170 | 339,050 | |||||
Wiley (John) & Sons Cl. A | 3,900 | 231,036 | |||||
570,086 | |||||||
SPECIALTY RETAIL - 4.8% | |||||||
†Buckle (The) | 18,185 | 955,076 | |||||
Genesco 1 | 12,065 | 924,420 | |||||
1,879,496 | |||||||
TEXTILES, APPAREL & LUXURY GOODS - 1.2% | |||||||
†Movado Group | 16,276 | 461,750 | |||||
Total (Cost $4,197,385) | 5,287,005 | ||||||
CONSUMER STAPLES – 2.5% | |||||||
FOOD PRODUCTS - 0.9% | |||||||
Cal-Maine Foods | 9,008 | 351,582 | |||||
PERSONAL PRODUCTS - 1.6% | |||||||
†Nu Skin Enterprises Cl. A | 14,620 | 638,894 | |||||
Total (Cost $1,159,229) | 990,476 | ||||||
ENERGY – 9.9% | |||||||
ENERGY EQUIPMENT & SERVICES - 9.9% | |||||||
Helmerich & Payne | 9,230 | 622,287 | |||||
Oil States International 1 | 13,380 | 654,282 | |||||
Pason Systems | 37,870 | 713,526 | |||||
SEACOR Holdings 1 | 5,319 | 392,595 | |||||
TGS-NOPEC Geophysical | 37,670 | 815,041 | |||||
Unit Corporation 1 | 20,095 | 685,239 | |||||
Total (Cost $3,774,198) | 3,882,970 | ||||||
FINANCIALS – 11.2% | |||||||
CAPITAL MARKETS - 6.1% | |||||||
†Artisan Partners Asset Management Cl. A | 9,460 | 478,014 | |||||
Federated Investors Cl. B | 21,690 | 714,252 | |||||
Lazard Cl. A | 13,040 | 652,391 | |||||
SEI Investments | 13,665 | 547,147 | |||||
2,391,804 | |||||||
INSURANCE - 3.4% | |||||||
Alleghany Corporation 1 | 1,530 | 709,155 | |||||
Validus Holdings | 14,970 | 622,153 | |||||
1,331,308 | |||||||
THRIFTS & MORTGAGE FINANCE - 1.7% | |||||||
†Genworth MI Canada | 20,330 | 647,102 | |||||
Total (Cost $3,074,176) | 4,370,214 | ||||||
HEALTH CARE – 6.7% | |||||||
BIOTECHNOLOGY - 1.8% | |||||||
Myriad Genetics 1 | 20,615 | 702,147 | |||||
LIFE SCIENCES TOOLS & SERVICES - 3.6% | |||||||
Bio-Rad Laboratories Cl. A 1 | 5,035 | 607,019 | |||||
Bio-Techne | 8,514 | 786,694 | |||||
1,393,713 | |||||||
PHARMACEUTICALS - 1.3% | |||||||
†Lannett Company 1 | 11,835 | 507,485 | |||||
Total (Cost $1,994,163) | 2,603,345 | ||||||
INDUSTRIALS – 19.4% | |||||||
COMMERCIAL SERVICES & SUPPLIES - 0.9% | |||||||
Ritchie Bros. Auctioneers | 13,540 | 364,091 | |||||
ELECTRICAL EQUIPMENT - 2.3% | |||||||
EnerSys | 9,415 | 581,094 | |||||
Global Power Equipment Group | 24,048 | 332,103 | |||||
913,197 | |||||||
INDUSTRIAL CONGLOMERATES - 1.2% | |||||||
Carlisle Companies | 4,990 | 450,297 | |||||
MACHINERY - 9.6% | |||||||
CIRCOR International | 11,352 | 684,299 | |||||
Columbus McKinnon | 16,455 | 461,398 | |||||
John Bean Technologies | 23,959 | 787,293 | |||||
Kennametal | 10,500 | 375,795 | |||||
Timken Company (The) | 9,845 | 420,185 | |||||
Valmont Industries | 5,835 | 741,045 | |||||
Wabtec Corporation | 3,468 | 301,334 | |||||
3,771,349 | |||||||
PROFESSIONAL SERVICES - 3.5% | |||||||
ICF International 1 | 17,273 | 707,847 | |||||
Robert Half International | 4,383 | 255,880 | |||||
Towers Watson & Co. Cl. A | 3,500 | 396,095 | |||||
1,359,822 | |||||||
TRADING COMPANIES & DISTRIBUTORS - 1.9% | |||||||
†Aceto Corporation | 17,800 | 386,260 | |||||
MSC Industrial Direct Cl. A | 4,567 | 371,069 | |||||
757,329 | |||||||
Total (Cost $5,903,816) | 7,616,085 | ||||||
INFORMATION TECHNOLOGY – 20.4% | |||||||
COMMUNICATIONS EQUIPMENT - 1.6% | |||||||
ADTRAN | 28,619 | 623,894 | |||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 4.1% | |||||||
Coherent 1 | 6,836 | 415,082 | |||||
Dolby Laboratories Cl. A | 4,545 | 195,980 | |||||
IPG Photonics 1 | 5,480 | 410,562 | |||||
Rofin-Sinar Technologies 1 | 20,992 | 603,940 | |||||
1,625,564 | |||||||
INTERNET SOFTWARE & SERVICES - 1.8% | |||||||
†j2 Global | 11,235 | 696,570 | |||||
IT SERVICES - 1.9% | |||||||
Sykes Enterprises 1 | 32,445 | 761,484 | |||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 9.5% | |||||||
Cabot Microelectronics 1 | 3,996 | 189,091 | |||||
Integrated Silicon Solution | 46,434 | 769,411 | |||||
MKS Instruments | 23,445 | 858,087 | |||||
Nanometrics 1 | 41,928 | 705,229 | |||||
Teradyne | 27,750 | 549,172 | |||||
Tessera Technologies | 5,805 | 207,587 | |||||
Veeco Instruments 1 | 12,500 | 436,000 | |||||
3,714,577 | |||||||
SOFTWARE - 0.5% | |||||||
Mentor Graphics | 8,840 | 193,773 | |||||
30 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014
Royce Select Fund I (continued) | |||||||
SHARES | VALUE | ||||||
INFORMATION TECHNOLOGY (continued) | |||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.0% | |||||||
Silicon Graphics International1 | 34,450 | $ | 392,041 | ||||
Total (Cost $5,992,108) | 8,007,903 | ||||||
MATERIALS – 6.7% | |||||||
CHEMICALS - 3.5% | |||||||
Innospec | 14,847 | 633,967 | |||||
Minerals Technologies | 10,436 | 724,780 | |||||
1,358,747 | |||||||
METALS & MINING - 2.4% | |||||||
Major Drilling Group International | 35,890 | 176,392 | |||||
Reliance Steel & Aluminum | 12,570 | 770,164 | |||||
946,556 | |||||||
PAPER & FOREST PRODUCTS - 0.8% | |||||||
Schweitzer-Mauduit International | 7,955 | 336,496 | |||||
Total (Cost $2,019,476) | 2,641,799 | ||||||
MISCELLANEOUS 3 – 2.9% | |||||||
Total (Cost $1,041,103) | 1,141,726 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $29,155,654) | 36,541,523 | ||||||
REPURCHASE AGREEMENT – 2.6% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $1,020,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% due 10/12/17, valued at $1,044,750) | |||||||
(Cost $1,020,000) | 1,020,000 | ||||||
TOTAL INVESTMENTS – 95.8% | |||||||
(Cost $30,175,654) | 37,561,523 | ||||||
CASH AND OTHER ASSETS LESS LIABILITIES – 4.2% | 1,658,827 | ||||||
NET ASSETS – 100.0% | $ | 39,220,350 | |||||
Royce Micro-Cap Discovery Fund | |||||||
Common Stocks – 93.9% | |||||||
SHARES | VALUE | ||||||
CONSUMER DISCRETIONARY – 11.9% | |||||||
AUTO COMPONENTS - 1.9% | |||||||
†Remy International | 1,900 | $ | 39,748 | ||||
Standard Motor Products | 1,800 | 68,616 | |||||
108,364 | |||||||
DISTRIBUTORS - 0.5% | |||||||
VOXX International Cl. A1 | 3,100 | 27,156 | |||||
DIVERSIFIED CONSUMER SERVICES - 1.6% | |||||||
Steiner Leisure1 | 1,900 | 87,799 | |||||
HOTELS, RESTAURANTS & LEISURE - 1.3% | |||||||
Monarch Casino & Resort1 | 4,200 | 69,678 | |||||
HOUSEHOLD DURABLES - 1.5% | |||||||
†Flexsteel Industries | 1,700 | 54,825 | |||||
Hooker Furniture | 1,800 | 30,906 | |||||
85,731 | |||||||
LEISURE PRODUCTS - 1.2% | |||||||
Arctic Cat | 1,843 | 65,427 | |||||
MEDIA - 1.2% | |||||||
Harte-Hanks | 8,800 | 68,112 | |||||
MULTILINE RETAIL - 0.8% | |||||||
Fred’s Cl. A | 2,500 | 43,525 | |||||
TEXTILES, APPAREL & LUXURY GOODS - 1.9% | |||||||
Culp | 2,400 | 52,032 | |||||
†Perry Ellis International1 | 2,100 | 54,453 | |||||
106,485 | |||||||
Total (Cost $615,627) | 662,277 | ||||||
CONSUMER STAPLES – 5.4% | |||||||
FOOD & STAPLES RETAILING - 2.2% | |||||||
Village Super Market Cl. A | 4,500 | 123,165 | |||||
FOOD PRODUCTS - 2.0% | |||||||
John B. Sanfilippo & Son | 1,600 | 72,800 | |||||
†SunOpta 1 | 3,300 | 39,105 | |||||
111,905 | |||||||
HOUSEHOLD PRODUCTS - 0.7% | |||||||
†Central Garden & Pet1 | 4,700 | 41,266 | |||||
PERSONAL PRODUCTS - 0.5% | |||||||
†Medifast 1 | 800 | 26,840 | |||||
Total (Cost $274,595) | 303,176 | ||||||
ENERGY – 4.0% | |||||||
ENERGY EQUIPMENT & SERVICES - 2.1% | |||||||
†Gulf Island Fabrication | 2,000 | 38,780 | |||||
Matrix Service1 | 1,900 | 42,408 | |||||
†Tesco Corporation | 2,900 | 37,178 | |||||
118,366 | |||||||
OIL, GAS & CONSUMABLE FUELS - 1.9% | |||||||
†Pacific Ethanol1 | 3,900 | 40,287 | |||||
REX American Resources1 | 400 | 24,788 | |||||
TransGlobe Energy | 4,000 | 16,560 | |||||
VAALCO Energy1 | 4,800 | 21,888 | |||||
103,523 | |||||||
Total (Cost $284,078) | 221,889 | ||||||
FINANCIALS – 8.0% | |||||||
CONSUMER FINANCE - 1.5% | |||||||
†Regional Management1 | 3,400 | 53,754 | |||||
World Acceptance1 | 400 | 31,780 | |||||
85,534 | |||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 31 |
Schedules of Investments
Royce Micro-Cap Discovery Fund (continued) | |||||||
SHARES | VALUE | ||||||
FINANCIALS (continued) | |||||||
INSURANCE - 6.5% | |||||||
EMC Insurance Group | 1,500 | $ | 53,190 | ||||
Employers Holdings | 2,800 | 65,828 | |||||
Hallmark Financial Services1 | 2,800 | 33,852 | |||||
†Investors Title Company | 800 | 57,888 | |||||
Kansas City Life Insurance | 500 | 24,015 | |||||
Safety Insurance Group | 700 | 44,807 | |||||
United Fire Group | 1,400 | 41,622 | |||||
†Universal Insurance Holdings | 2,000 | 40,900 | |||||
362,102 | |||||||
Total (Cost $378,354) | 447,636 | ||||||
HEALTH CARE – 14.5% | |||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 10.9% | |||||||
AngioDynamics 1 | 3,600 | 68,436 | |||||
Atrion Corporation | 200 | 68,002 | |||||
CryoLife | 5,200 | 58,916 | |||||
Cynosure Cl. A1 | 1,000 | 27,420 | |||||
Exactech1 | 3,800 | 89,566 | |||||
Invacare Corporation | 7,000 | 117,320 | |||||
Meridian Bioscience | 3,400 | 55,964 | |||||
Utah Medical Products | 2,000 | 120,100 | |||||
605,724 | |||||||
HEALTH CARE PROVIDERS & SERVICES - 2.1% | |||||||
National HealthCare | 1,900 | 119,396 | |||||
LIFE SCIENCES TOOLS & SERVICES - 1.5% | |||||||
†Affymetrix 1 | 4,000 | 39,480 | |||||
Harvard Bioscience1 | 7,700 | 43,659 | |||||
83,139 | |||||||
Total (Cost $694,034) | 808,259 | ||||||
INDUSTRIALS – 19.1% | |||||||
AEROSPACE & DEFENSE - 0.6% | |||||||
American Science and Engineering | 700 | 36,330 | |||||
BUILDING PRODUCTS - 1.1% | |||||||
American Woodmark1 | 1,500 | 60,660 | |||||
COMMERCIAL SERVICES & SUPPLIES - 1.6% | |||||||
Courier Corporation | 2,500 | 37,300 | |||||
†Kimball International Cl. B | 5,800 | 52,896 | |||||
90,196 | |||||||
CONSTRUCTION & ENGINEERING - 4.1% | |||||||
Aegion Corporation1 | 2,200 | 40,942 | |||||
Comfort Systems USA | 4,489 | 76,851 | |||||
MYR Group1 | 4,000 | 109,600 | |||||
227,393 | |||||||
ELECTRICAL EQUIPMENT - 1.8% | |||||||
†Jinpan International | 8,000 | 51,520 | |||||
†SL Industries1 | 1,300 | 50,700 | |||||
102,220 | |||||||
MACHINERY - 4.1% | |||||||
Alamo Group | 1,100 | 53,284 | |||||
Miller Industries | 5,920 | 123,077 | |||||
†Supreme Industries Cl. A | 7,100 | 50,126 | |||||
226,487 | |||||||
PROFESSIONAL SERVICES - 4.7% | |||||||
CDI Corporation | 2,200 | 38,962 | |||||
Heidrick & Struggles International | 1,600 | 36,880 | |||||
ICF International1 | 1,200 | 49,176 | |||||
Resources Connection | 2,800 | 46,060 | |||||
VSE Corporation | 1,400 | 92,260 | |||||
263,338 | |||||||
TRADING COMPANIES & DISTRIBUTORS - 1.1% | |||||||
Willis Lease Finance1 | 2,800 | 61,320 | |||||
Total (Cost $914,656) | 1,067,944 | ||||||
INFORMATION TECHNOLOGY – 16.3% | |||||||
COMMUNICATIONS EQUIPMENT - 4.7% | |||||||
Comtech Telecommunications | 2,600 | 81,952 | |||||
Digi International1 | 3,700 | 34,373 | |||||
†Harmonic 1 | 4,300 | 30,143 | |||||
PCTEL | 6,300 | 54,558 | |||||
TESSCO Technologies | 2,200 | 63,800 | |||||
264,826 | |||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 5.0% | |||||||
Daktronics | 6,400 | 80,064 | |||||
Fabrinet 1 | 2,900 | 51,446 | |||||
PC Connection | 3,400 | 83,470 | |||||
†Vishay Precision Group1 | 3,600 | 61,776 | |||||
276,756 | |||||||
INTERNET SOFTWARE & SERVICES - 0.9% | |||||||
Liquidity Services1 | 3,000 | 24,510 | |||||
†Monster Worldwide1 | 6,200 | 28,644 | |||||
53,154 | |||||||
IT SERVICES - 3.3% | |||||||
Computer Task Group | 7,900 | 75,287 | |||||
†Global Cash Access Holdings1 | 4,400 | 31,460 | |||||
†Hackett Group (The) | 4,300 | 37,797 | |||||
Sykes Enterprises1 | 1,700 | 39,899 | |||||
184,443 | |||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.7% | |||||||
Pericom Semiconductor1 | 2,800 | 37,912 | |||||
SOFTWARE - 1.7% | |||||||
American Software Cl. A | 5,342 | 48,666 | |||||
Ebix | 2,600 | 44,174 | |||||
92,840 | |||||||
Total (Cost $872,307) | 909,931 | ||||||
MATERIALS – 10.0% | |||||||
CHEMICALS - 2.9% | |||||||
FutureFuel Corporation | 4,900 | 63,798 | |||||
KMG Chemicals | 1,100 | 22,000 | |||||
Trecora Resources1 | 5,300 | 77,910 | |||||
163,708 | |||||||
CONSTRUCTION MATERIALS - 2.1% | |||||||
United States Lime & Minerals | 1,600 | 116,576 | |||||
CONTAINERS & PACKAGING - 1.8% | |||||||
†UFP Technologies1 | 3,940 | 96,865 | |||||
METALS & MINING - 3.2% | |||||||
Ampco-Pittsburgh | 2,600 | 50,050 | |||||
Haynes International | 1,400 | 67,900 | |||||
Materion Corporation | 1,100 | 38,753 | |||||
Universal Stainless & Alloy Products1 | 900 | 22,635 | |||||
179,338 | |||||||
Total (Cost $485,818) | 556,487 | ||||||
32 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014
Royce Micro-Cap Discovery Fund (continued) | |||||||
SHARES | VALUE | ||||||
MISCELLANEOUS 3 – 4.7% | |||||||
Total (Cost $274,350) | $ | 260,474 | |||||
TOTAL COMMON STOCKS | |||||||
(Cost $4,793,819) | 5,238,073 | ||||||
REPURCHASE AGREEMENT – 6.5% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $361,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% due 10/12/17, valued at $373,125) | |||||||
(Cost $361,000) | 361,000 | ||||||
TOTAL INVESTMENTS – 100.4% | |||||||
(Cost $5,154,819) | 5,599,073 | ||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.4)% | (23,925 | ) | |||||
NET ASSETS – 100.0% | $ | 5,575,148 | |||||
Royce Financial Services Fund | |||||||
Common Stocks – 97.0% | |||||||
SHARES | VALUE | ||||||
BANKS - 3.9% | |||||||
BLOM Bank GDR | 8,000 | $ | 82,000 | ||||
CIT Group | 19,500 | 932,685 | |||||
First Citizens BancShares Cl. A | 1,900 | 480,301 | |||||
First Republic Bank | 11,600 | 604,592 | |||||
Total (Cost $1,815,698) | 2,099,578 | ||||||
CAPITAL MARKETS - 53.8% | |||||||
AllianceBernstein Holding L.P. | 16,500 | 426,195 | |||||
Apollo Global Management LLC Cl. A | 30,200 | 712,116 | |||||
†ARA Asset Management | 470,000 | 601,994 | |||||
Artisan Partners Asset Management Cl. A | 15,900 | 803,427 | |||||
Ashmore Group | 145,000 | 628,646 | |||||
CETIP - Mercados Organizados | 40,700 | 492,921 | |||||
Charles Schwab | 34,800 | 1,050,612 | |||||
Coronation Fund Managers | 62,000 | 611,747 | |||||
Cowen Group1 | 117,600 | 564,480 | |||||
Diamond Hill Investment Group | 6,900 | 952,476 | |||||
†Dundee Corporation Cl. A1 | 42,100 | 464,194 | |||||
Edmond de Rothschild (Suisse) | 20 | 307,282 | |||||
Egyptian Financial Group-Hermes Holding | |||||||
Company 1 | 255,000 | 549,584 | |||||
Federated Investors Cl. B | 35,600 | 1,172,308 | |||||
Financial Engines | 22,400 | 818,720 | |||||
GMP Capital | 108,000 | 590,291 | |||||
Interactive Brokers Group Cl. A | 12,800 | 373,248 | |||||
Invesco | 8,000 | 316,160 | |||||
IOOF Holdings | 11,528 | 83,140 | |||||
Jupiter Fund Management | 147,000 | 825,288 | |||||
Manning & Napier Cl. A | 15,800 | 218,356 | |||||
†Medley Management Cl. A | 52,200 | 767,340 | |||||
Monroe Capital | 58,050 | 839,403 | |||||
MVC Capital | 47,100 | 462,993 | |||||
Northern Trust | 14,900 | 1,004,260 | |||||
Oaktree Capital Group LLC Cl. A | 4,700 | 243,601 | |||||
Och-Ziff Capital Management | |||||||
Group LLC Cl. A | 73,300 | 856,144 | |||||
Oppenheimer Holdings Cl. A | 10,000 | 232,500 | |||||
Piper Jaffray1 | 15,300 | 888,777 | |||||
Qalaa Holdings1 | 150,000 | 60,209 | |||||
Raymond James Financial | 14,600 | 836,434 | |||||
Reinet Investments | 5,500 | 117,786 | |||||
RHJ International1 | 99,000 | 553,016 | |||||
SEI Investments | 14,200 | 568,568 | |||||
SHUAA Capital1 | 580,000 | 102,250 | |||||
Silvercrest Asset Management Group Cl. A | 41,600 | 651,040 | |||||
SPARX Group | 220,000 | 370,255 | |||||
Sprott | 391,500 | 822,224 | |||||
State Street | 10,150 | 796,775 | |||||
Stifel Financial1 | 17,873 | 911,881 | |||||
TD Ameritrade Holding Corporation | 19,300 | 690,554 | |||||
Tokai Tokyo Financial Holdings | 9,400 | 64,316 | |||||
U.S. Global Investors Cl. A | 225,200 | 698,120 | |||||
UOB-Kay Hian Holdings | 99,122 | 113,442 | |||||
Value Partners Group | 1,176,000 | 982,167 | |||||
Vontobel Holding | 16,500 | 621,258 | |||||
Westwood Holdings Group | 15,000 | 927,300 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 33 |
Schedules of Investments
Royce Financial Services Fund (continued) | |||||||
SHARES | VALUE | ||||||
CAPITAL MARKETS (continued) | |||||||
WisdomTree Investments | 72,800 | $ | 1,141,140 | ||||
Total (Cost $25,073,946) | 28,886,938 | ||||||
CONSUMER FINANCE - 1.7% | |||||||
†Ally Financial1 | 33,200 | 784,184 | |||||
Credit Acceptance1 | 848 | 115,676 | |||||
Total (Cost $817,548) | 899,860 | ||||||
DIVERSIFIED FINANCIAL SERVICES - 9.9% | |||||||
Bolsa Mexicana de Valores | 248,000 | 449,144 | |||||
Bolsas y Mercados Espanoles | 15,500 | 597,478 | |||||
Bursa Malaysia | 160,000 | 369,377 | |||||
CRISIL | 28,000 | 842,122 | |||||
Hellenic Exchanges - Athens Stock Exchange | 36,000 | 202,355 | |||||
JSE | 61,000 | 637,144 | |||||
Leucadia National | 23,801 | 533,618 | |||||
†MarketAxess Holdings | 9,200 | 659,732 | |||||
MSCI | 8,700 | 412,728 | |||||
Singapore Exchange | 63,000 | 370,420 | |||||
Warsaw Stock Exchange | 19,000 | 244,821 | |||||
Total (Cost $4,646,022) | 5,318,939 | ||||||
HOTELS, RESTAURANTS & LEISURE - 0.1% | |||||||
Thomas Cook (India) | 30,600 | 77,837 | |||||
Total (Cost $28,633) | 77,837 | ||||||
INSURANCE - 10.8% | |||||||
E-L Financial | 800 | 470,305 | |||||
First American Financial | 5,000 | 169,500 | |||||
Greenlight Capital Re Cl. A1 | 18,600 | 607,290 | |||||
Infinity Property & Casualty | 10,000 | 772,600 | |||||
Jardine Lloyd Thompson Group | 11,900 | 165,077 | |||||
Marsh & McLennan | 17,800 | 1,018,872 | |||||
†ProAssurance Corporation | 18,000 | 812,700 | |||||
RLI Corp. | 20,600 | 1,017,640 | |||||
State Auto Financial | 33,800 | 751,036 | |||||
Total (Cost $4,919,617) | 5,785,020 | ||||||
INTERNET SOFTWARE & SERVICES - 1.8% | |||||||
†Envestnet1 | 15,200 | 746,928 | |||||
Xoom Corporation1 | 11,900 | 208,369 | |||||
Total (Cost $961,394) | 955,297 | ||||||
INVESTMENT COMPANIES - 1.4% | |||||||
RIT Capital Partners | 33,500 | 729,372 | |||||
Total (Cost $682,554) | 729,372 | ||||||
IT SERVICES - 2.5% | |||||||
Broadridge Financial Solutions | 21,900 | 1,011,342 | |||||
Vantiv Cl. A1 | 10,000 | 339,200 | |||||
Total (Cost $859,980) | 1,350,542 | ||||||
MEDIA - 0.5% | |||||||
Morningstar | 4,600 | 297,666 | |||||
Total (Cost $181,190) | 297,666 | ||||||
PROFESSIONAL SERVICES - 2.7% | |||||||
Towers Watson & Co. Cl. A | 5,500 | 622,435 | |||||
Verisk Analytics Cl. A1 | 12,800 | 819,840 | |||||
Total (Cost $1,006,145) | 1,442,275 | ||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 2.6% | |||||||
†FirstService Corporation | 18,400 | 935,824 | |||||
Midland Holdings1 | 800,000 | 404,198 | |||||
Novation Companies1,2 | 223,459 | 62,569 | |||||
Total (Cost $1,361,248) | 1,402,591 | ||||||
SOFTWARE - 2.5% | |||||||
Fair Isaac | 7,400 | 535,020 | |||||
†SS&C Technologies Holdings | 14,200 | 830,558 | |||||
Total (Cost $783,892) | 1,365,578 | ||||||
MISCELLANEOUS 3 - 2.8% | |||||||
Total (Cost $1,419,161) | 1,494,238 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $44,557,028) | 52,105,731 | ||||||
REPURCHASE AGREEMENT – 3.3% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $1,739,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% due 10/12/17, valued at $1,776,075) | |||||||
(Cost $1,739,000) | 1,739,000 | ||||||
TOTAL INVESTMENTS – 100.3% | |||||||
(Cost $46,296,028) | 53,844,731 | ||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.3)% | (137,702 | ) | |||||
NET ASSETS – 100.0% | $ | 53,707,029 | |||||
34 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014
Royce Select Fund II | |||||||
Common Stocks – 100.3% | |||||||
SHARES | VALUE | ||||||
CONSUMER DISCRETIONARY – 17.3% | |||||||
AUTO COMPONENTS - 3.0% | |||||||
†Nishikawa Rubber | 3,400 | $ | 57,903 | ||||
Selamat Sempurna | 118,900 | 45,350 | |||||
Standard Motor Products | 900 | 34,308 | |||||
137,561 | |||||||
DIVERSIFIED CONSUMER SERVICES - 1.2% | |||||||
Lincoln Educational Services | 19,300 | 54,426 | |||||
HOUSEHOLD DURABLES - 0.7% | |||||||
†Turtle Beach1 | 10,600 | 33,814 | |||||
INTERNET & CATALOG RETAIL - 2.3% | |||||||
†Blue Nile1 | 1,571 | 56,572 | |||||
†Trade Me | 17,200 | 48,007 | |||||
104,579 | |||||||
LEISURE PRODUCTS - 2.0% | |||||||
†Arctic Cat | 1,000 | 35,500 | |||||
Nautilus 1 | 3,800 | 57,684 | |||||
93,184 | |||||||
MEDIA - 4.3% | |||||||
†McClatchy Company (The) Cl. A 1 | 16,500 | 54,780 | |||||
†Pico Far East Holdings | 128,500 | 29,445 | |||||
†Rentrak Corporation1 | 600 | 43,692 | |||||
†T4F Entretenimento1 | 61,200 | 66,315 | |||||
194,232 | |||||||
MULTILINE RETAIL - 1.3% | |||||||
New World Department Store China | 100,400 | 32,097 | |||||
†Parkson Retail Asia | 42,200 | 25,486 | |||||
57,583 | |||||||
SPECIALTY RETAIL - 0.4% | |||||||
Cache1 | 100,000 | 20,000 | |||||
TEXTILES, APPAREL & LUXURY GOODS - 2.1% | |||||||
Daphne International Holdings | 1,500 | 544 | |||||
†Taiwan Paiho | 44,400 | 59,825 | |||||
†Xtep International Holdings | 88,000 | 35,446 | |||||
95,815 | |||||||
Total (Cost $788,903) | 791,194 | ||||||
CONSUMER STAPLES – 3.8% | |||||||
FOOD & STAPLES RETAILING - 0.8% | |||||||
†Grupo Comercial Chedraui1 | 12,600 | 37,124 | |||||
FOOD PRODUCTS - 3.0% | |||||||
Farmer Bros.1,5 | 1,523 | 44,852 | |||||
First Resources | 39,200 | 55,275 | |||||
SunOpta 1,5 | 3,181 | 37,695 | |||||
137,822 | |||||||
Total (Cost $158,200) | 174,946 | ||||||
ENERGY – 2.3% | |||||||
ENERGY EQUIPMENT & SERVICES - 2.3% | |||||||
†Canyon Services Group | 4,800 | 37,142 | |||||
Matrix Service1 | 1,700 | 37,944 | |||||
Total Energy Services | 2,500 | 27,931 | |||||
Total (Cost $111,008) | 103,017 | ||||||
FINANCIALS – 9.7% | |||||||
CAPITAL MARKETS - 8.6% | |||||||
Ashmore Group | 16,900 | 73,270 | |||||
†Aurelius | 700 | 26,651 | |||||
†FXCM Cl. A | 1,900 | 31,483 | |||||
†Mattioli Woods | 6,100 | 42,740 | |||||
†Medley Management Cl. A | 3,300 | 48,510 | |||||
†Newtek Business Services1 | 3,300 | 48,708 | |||||
†SPARX Group | 33,500 | 56,380 | |||||
†Tokai Tokyo Financial Holdings | 9,500 | 65,000 | |||||
392,742 | |||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.1% | |||||||
†Sun Frontier Fudousan | 5,600 | 51,375 | |||||
Total (Cost $468,125) | 444,117 | ||||||
HEALTH CARE – 3.5% | |||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 1.3% | |||||||
†Meridian Bioscience | 3,600 | 59,256 | |||||
HEALTH CARE PROVIDERS & SERVICES - 1.4% | |||||||
†Al Noor Hospitals Group | 4,300 | 66,035 | |||||
PHARMACEUTICALS - 0.8% | |||||||
†Recipharm 1 | 2,000 | 34,345 | |||||
Total (Cost $165,707) | 159,636 | ||||||
INDUSTRIALS – 30.1% | |||||||
AEROSPACE & DEFENSE - 2.0% | |||||||
†FLYHT Aerospace Solutions1 | 129,800 | 41,337 | |||||
†Magellan Aerospace | 4,200 | 48,876 | |||||
90,213 | |||||||
AIR FREIGHT & LOGISTICS - 1.3% | |||||||
Aramex | 71,300 | 59,866 | |||||
BUILDING PRODUCTS - 1.8% | |||||||
†Norcros | 141,700 | 39,690 | |||||
†Patrick Industries1 | 1,000 | 43,980 | |||||
83,670 | |||||||
COMMERCIAL SERVICES & SUPPLIES - 4.4% | |||||||
†Atento 1,5 | 5,200 | 54,340 | |||||
†Collection House | 11 | 18 | |||||
†Programmed Maintenance Services | 19,500 | 40,763 | |||||
†Steelcase Cl. A | 3,100 | 55,645 | |||||
†Tomra Systems | 6,400 | 49,276 | |||||
200,042 | |||||||
CONSTRUCTION & ENGINEERING - 0.8% | |||||||
†Furmanite Corporation1 | 4,700 | 36,754 | |||||
MACHINERY - 9.9% | |||||||
CB Industrial Product Holding | 55,800 | 32,044 | |||||
Freund Corporation | 6,800 | 58,973 | |||||
†Kinik Company | 16,000 | 32,870 | |||||
†Mincon Group | 35,900 | 28,256 | |||||
Obara Group | 1,000 | 44,397 | |||||
†Tecumseh Products1 | 12,000 | 37,080 | |||||
†Trifast | 31,800 | 53,332 | |||||
†Wabash National1 | 5,900 | 72,924 | |||||
Zuiko Corporation | 2,200 | 95,222 | |||||
455,098 | |||||||
MARINE - 1.2% | |||||||
Clarkson | 1,900 | 56,083 | |||||
PROFESSIONAL SERVICES - 5.1% | |||||||
Acacia Research5 | 4,850 | 82,159 | |||||
†Franklin Covey1,5 | 2,310 | 44,722 | |||||
Nihon M&A Center | 1,800 | 54,611 | |||||
†YAMADA Consulting Group | 2,000 | 51,450 | |||||
232,942 | |||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 35 |
Schedules of Investments
Royce Select Fund II (continued) | |||||||
SHARES | VALUE | ||||||
INDUSTRIALS (continued) | |||||||
ROAD & RAIL - 1.4% | |||||||
†Trancom | 1,600 | $ | 64,452 | ||||
TRADING COMPANIES & DISTRIBUTORS - 2.2% | |||||||
†Brammer | 11,000 | 58,268 | |||||
†Bufab Holding1 | 5,400 | 40,570 | |||||
98,838 | |||||||
Total (Cost $1,371,744) | 1,377,958 | ||||||
INFORMATION TECHNOLOGY – 23.0% | |||||||
COMMUNICATIONS EQUIPMENT - 1.6% | |||||||
CalAmp Corporation1 | 2,600 | 47,580 | |||||
Comba Telecom Systems Holdings | 74,860 | 26,487 | |||||
74,067 | |||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 3.4% | |||||||
Hollysys Automation Technologies1,5 | 2,200 | 53,746 | |||||
†Suprema 1 | 2,100 | 48,139 | |||||
†UDE Corporation | 20,800 | 51,348 | |||||
153,233 | |||||||
INTERNET SOFTWARE & SERVICES - 5.2% | |||||||
†aufeminin 1 | 1,200 | 36,923 | |||||
†Care.com 1 | 5,600 | 46,368 | |||||
†QuinStreet1 | 14,000 | 84,980 | |||||
†Tomorrow Focus | 5,800 | 26,505 | |||||
400 | 44,917 | ||||||
239,693 | |||||||
IT SERVICES - 0.7% | |||||||
Metrofile Holdings | 74,300 | 32,092 | |||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 8.6% | |||||||
†Amtech Systems1 | 7,257 | 73,659 | |||||
Brooks Automation5 | 7,065 | 90,079 | |||||
Eugene Technology | 4,025 | 58,992 | |||||
Kulicke & Soffa Industries1 | 3,500 | 50,610 | |||||
Photronics 1,5 | 8,440 | 70,136 | |||||
†Suss MicroTec1 | 8,500 | 48,330 | |||||
391,806 | |||||||
SOFTWARE - 3.5% | |||||||
†Cyient | 2,900 | 23,683 | |||||
†Globo 1 | 60,500 | 37,640 | |||||
†KPIT Technologies | 10,300 | 33,062 | |||||
†Lectra | 2,900 | 32,077 | |||||
SeaChange International1 | 5,000 | 31,900 | |||||
158,362 | |||||||
Total (Cost $963,144) | 1,049,253 | ||||||
MATERIALS – 6.1% | |||||||
CHEMICALS - 0.7% | 1,100 | 30,745 | |||||
†Fujimori Kogyo | |||||||
CONTAINERS & PACKAGING - 1.2% | |||||||
†UFP Technologies1 | 2,239 | 55,046 | |||||
METALS & MINING - 1.4% | |||||||
Imdex 1 | 160,500 | 62,226 | |||||
PAPER & FOREST PRODUCTS - 2.8% | |||||||
†TFS Corporation | 30,300 | 38,037 | |||||
†Western Forest Products | 39,900 | 92,727 | |||||
130,764 | |||||||
Total (Cost $283,118) | 278,781 | ||||||
MISCELLANEOUS3– 4.5% | |||||||
Total (Cost $248,679) | 206,061 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $4,558,628) | 4,584,963 | ||||||
REPURCHASE AGREEMENT – 3.7% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $169,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% due 10/12/17, valued at $174,125) | |||||||
(Cost $169,000) | 169,000 | ||||||
TOTAL INVESTMENTS – 104.0% | |||||||
(Cost $4,727,628) | 4,753,963 | ||||||
LIABILITIES LESS CASH AND OTHER ASSETS - (4.0)% | (180,934 | ) | |||||
NET ASSETS – 100.0% | $ | 4,573,029 | |||||
Securities Sold Short | |||||||
Common Stocks – 1.6% | |||||||
ENERGY – 1.1% | |||||||
OIL, GAS & CONSUMABLE FUELS - 1.1% | |||||||
ProShares UltraShort Oil & Gas | 900 | $ | 48,006 | ||||
Total (Proceeds $55,503) | 48,006 | ||||||
INDUSTRIALS – 0.5% | |||||||
MACHINERY - 0.5% | |||||||
Douglas Dynamics | 1,100 | 23,573 | |||||
Total (Proceeds $25,359) | 23,573 | ||||||
TOTAL SECURITIES SOLD SHORT | |||||||
(Proceeds $80,862) | $ | 71,579 | |||||
36 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014
Royce European Smaller-Companies Fund | |||||||
Common Stocks – 98.4% | |||||||
SHARES | VALUE | ||||||
AUSTRIA – 5.5% | |||||||
Mayr-Melnhof Karton | 6,000 | $ | 622,651 | ||||
Semperit AG Holding | 12,000 | 580,681 | |||||
Total (Cost $1,233,410) | 1,203,332 | ||||||
BELGIUM – 2.4% | |||||||
Sipef | 5,000 | 288,476 | |||||
Van de Velde | 5,000 | 235,560 | |||||
Total (Cost $655,807) | 524,036 | ||||||
CHINA – 1.3% | |||||||
†Joyou 1 | 20,000 | 281,014 | |||||
Total (Cost $331,138) | 281,014 | ||||||
CYPRUS – 1.7% | |||||||
Globaltrans Investment GDR | 75,000 | 380,819 | |||||
Total (Cost $856,903) | 380,819 | ||||||
DENMARK – 1.0% | |||||||
†Zealand Pharma1 | 16,600 | 223,867 | |||||
Total (Cost $219,936) | 223,867 | ||||||
FINLAND – 2.2% | |||||||
Nokian Renkaat | 20,000 | 489,875 | |||||
Total (Cost $811,245) | 489,875 | ||||||
FRANCE – 22.7% | |||||||
Altamir | 35,000 | 436,910 | |||||
Alten | 8,550 | 365,614 | |||||
Audika Groupe | 25,000 | 340,877 | |||||
Boiron | 4,000 | 337,501 | |||||
Gaztransport Et Technigaz | 3,000 | 177,176 | |||||
†Lectra | 30,000 | 331,827 | |||||
Manutan International | 9,000 | 446,242 | |||||
†Nexity | 10,000 | 378,309 | |||||
Parrot 1 | 12,000 | 307,651 | |||||
†SEB | 3,000 | 223,257 | |||||
Societe Internationale de Plantations | |||||||
d’Heveas | 10,000 | 398,654 | |||||
Stallergenes | 8,500 | 508,695 | |||||
Vetoquinol | 8,500 | 369,223 | |||||
Virbac | 1,700 | 356,678 | |||||
Total (Cost $5,308,265) | 4,978,614 | ||||||
GERMANY – 7.8% | |||||||
Aixtron1 | 17,500 | 198,377 | |||||
Amadeus Fire | 3,000 | 225,665 | |||||
Bertrandt | 2,300 | 320,054 | |||||
LPKF Laser & Electronics | 37,500 | 491,324 | |||||
SNP Schneider-Neureither & Partner | 17,500 | 295,491 | |||||
Takkt | 11,000 | 181,077 | |||||
Total (Cost $2,026,876) | 1,711,988 | ||||||
IRELAND – 1.1% | |||||||
†Mincon Group | 294,000 | 231,405 | |||||
Total (Cost $389,318) | 231,405 | ||||||
ITALY – 5.5% | |||||||
Azimut Holding | 15,000 | 323,599 | |||||
De’Longhi | 10,000 | 181,109 | |||||
DiaSorin | 11,500 | 463,765 | |||||
Recordati | 16,000 | 248,754 | |||||
Total (Cost $888,941) | 1,217,227 | ||||||
NETHERLANDS – 2.5% | |||||||
†Brunel International | 15,000 | 245,830 | |||||
Fugro | 15,000 | 309,399 | |||||
Total (Cost $888,315) | 555,229 | ||||||
NORWAY – 4.1% | |||||||
†Borregaard | 40,000 | 297,320 | |||||
Fred. Olsen Energy | 25,000 | 227,886 | |||||
TGS-NOPEC Geophysical | 17,500 | 378,636 | |||||
Total (Cost $1,388,669) | 903,842 | ||||||
POLAND – 1.7% | |||||||
†Elektrobudowa | 17,500 | 364,788 | |||||
Total (Cost $478,047) | 364,788 | ||||||
SLOVENIA – 2.0% | |||||||
Krka d.d., Novo mesto | 6,000 | 432,884 | |||||
Total (Cost $512,898) | 432,884 | ||||||
SWEDEN – 1.5% | |||||||
Lundin Petroleum1 | 23,000 | 328,880 | |||||
Total (Cost $480,174) | 328,880 | ||||||
SWITZERLAND – 3.7% | |||||||
†Carlo Gavazzi Holding | 1,500 | 318,071 | |||||
VZ Holding | 2,800 | 500,443 | |||||
Total (Cost $717,382) | 818,514 | ||||||
UNITED KINGDOM – 31.7% | |||||||
Ashmore Group | 140,000 | 606,968 | |||||
AVEVA Group | 19,500 | 399,173 | |||||
Clarkson | 14,000 | 413,246 | |||||
Consort Medical | 36,000 | 484,446 | |||||
Domino Printing Sciences | 37,500 | 383,296 | |||||
E2V Technologies | 165,000 | 443,913 | |||||
Elementis | 100,000 | 404,697 | |||||
EnQuest 1 | 264,500 | 144,515 | |||||
Jupiter Fund Management | 40,000 | 224,568 | |||||
Keller Group | 10,000 | 135,687 | |||||
†Kennedy Wilson Europe Real Estate | 29,970 | 492,331 | |||||
Latchways | 35,000 | 392,694 | |||||
Polypipe Group | 70,000 | 268,252 | |||||
Rotork | 6,300 | 226,707 | |||||
†Senior | 100,000 | 468,015 | |||||
Severfield1 | 300,000 | 317,903 | |||||
Spirax-Sarco Engineering | 5,300 | 235,535 | |||||
Spirent Communications | 325,000 | 382,255 | |||||
†Synthomer | 85,000 | 310,755 | |||||
†Xaar | 37,500 | 225,205 | |||||
Total (Cost $7,796,956) | 6,960,161 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $24,984,280) | 21,606,475 | ||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 37 |
Schedules of Investments
Royce European Smaller-Companies Fund (continued) | |||||||
VALUE | |||||||
REPURCHASE AGREEMENT – 2.3% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $515,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% due 10/12/17, valued at $527,350) | |||||||
(Cost $515,000) | $ | 515,000 | |||||
TOTAL INVESTMENTS – 100.7% | |||||||
(Cost $25,499,280) | 22,121,475 | ||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.7)% | (148,899 | ) | |||||
NET ASSETS – 100.0% | $ | 21,972,576 | |||||
Royce Enterprise Select Fund | |||||||
Common Stocks – 72.1% | |||||||
SHARES | VALUE | ||||||
CONSUMER DISCRETIONARY – 21.6% | |||||||
AUTO COMPONENTS - 3.4% | |||||||
BorgWarner | 400 | $ | 21,980 | ||||
†Dorman Products1 | 460 | 22,204 | |||||
†Drew Industries1 | 460 | 23,492 | |||||
Standard Motor Products | 740 | 28,209 | |||||
95,885 | |||||||
AUTOMOBILES - 2.8% | |||||||
Thor Industries | 1,400 | 78,218 | |||||
DISTRIBUTORS - 0.2% | |||||||
Core-Mark Holding Company | 110 | 6,812 | |||||
HOUSEHOLD DURABLES - 4.1% | |||||||
Garmin | 920 | 48,604 | |||||
Mohawk Industries1 | 190 | 29,518 | |||||
NVR 1 | 30 | 38,260 | |||||
116,382 | |||||||
MULTILINE RETAIL - 2.0% | |||||||
Dollar Tree1 | 790 | 55,600 | |||||
SPECIALTY RETAIL - 7.2% | |||||||
Advance Auto Parts | 360 | 57,341 | |||||
†Bed Bath & Beyond1 | 800 | 60,936 | |||||
Finish Line (The) Cl. A | 2,040 | 49,592 | |||||
Monro Muffler Brake | 140 | 8,092 | |||||
Ross Stores | 260 | 24,508 | |||||
200,469 | |||||||
TEXTILES, APPAREL & LUXURY GOODS - 1.9% | |||||||
Wolverine World Wide | 1,780 | 52,457 | |||||
Total (Cost $497,496) | 605,823 | ||||||
ENERGY – 3.5% | |||||||
ENERGY EQUIPMENT & SERVICES - 2.2% | |||||||
Helmerich & Payne | 690 | 46,520 | |||||
Unit Corporation1 | 480 | 16,368 | |||||
62,888 | |||||||
OIL, GAS & CONSUMABLE FUELS - 1.3% | |||||||
†World Fuel Services | 770 | 36,136 | |||||
Total (Cost $114,315) | 99,024 | ||||||
FINANCIALS – 5.4% | |||||||
CAPITAL MARKETS - 2.0% | |||||||
Artisan Partners Asset Management Cl. A | 440 | 22,233 | |||||
†Ashmore Group | 5,500 | 23,845 | |||||
SEI Investments | 240 | 9,610 | |||||
55,688 | |||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.4% | |||||||
Jones Lang LaSalle | 120 | 17,992 | |||||
Kennedy-Wilson Holdings | 3,080 | 77,924 | |||||
95,916 | |||||||
Total (Cost $130,161) | 151,604 | ||||||
HEALTH CARE – 1.6% | |||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 1.6% | |||||||
DENTSPLY International | 810 | 43,149 | |||||
Total (Cost $35,226) | 43,149 | ||||||
INDUSTRIALS – 17.0% | |||||||
AEROSPACE & DEFENSE - 0.8% | |||||||
Curtiss-Wright | 310 | 21,883 | |||||
COMMERCIAL SERVICES & SUPPLIES - 4.7% | |||||||
Copart1 | 1,500 | 54,735 | |||||
Ritchie Bros. Auctioneers | 1,600 | 43,024 |
38 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Enterprise Select Fund (continued) |
SHARES | VALUE | ||||||
INDUSTRIALS (continued) | |||||||
COMMERCIAL SERVICES & SUPPLIES (continued) | |||||||
UniFirst Corporation | 140 | $ | 17,003 | ||||
†Waste Connections | 400 | 17,596 | |||||
132,358 | |||||||
ELECTRICAL EQUIPMENT - 0.8% | |||||||
EnerSys | 50 | 3,086 | |||||
Powell Industries | 70 | 3,435 | |||||
300 | 15,723 | ||||||
22,244 | |||||||
INDUSTRIAL CONGLOMERATES - 1.9% | |||||||
Carlisle Companies | 600 | 54,144 | |||||
MACHINERY - 4.9% | |||||||
AGCO Corporation | 230 | 10,396 | |||||
Donaldson Company | 371 | 14,332 | |||||
Kennametal | 240 | 8,589 | |||||
Mueller Industries | 1,440 | 49,162 | |||||
Mueller Water Products Cl. A | 1,570 | 16,077 | |||||
†RBC Bearings | 280 | 18,068 | |||||
†Semperit AG Holding | 130 | 6,291 | |||||
Valmont Industries | 100 | 12,700 | |||||
135,615 | |||||||
PROFESSIONAL SERVICES - 2.5% | |||||||
ManpowerGroup | 1,040 | 70,897 | |||||
TRADING COMPANIES & DISTRIBUTORS - 1.4% | |||||||
†Applied Industrial Technologies | 304 | 13,859 | |||||
MSC Industrial Direct Cl. A | 320 | 26,000 | |||||
39,859 | |||||||
Total (Cost $442,354) | 477,000 | ||||||
INFORMATION TECHNOLOGY – 13.2% | |||||||
COMMUNICATIONS EQUIPMENT - 0.0% | |||||||
Plantronics | 10 | 530 | |||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 7.0% | |||||||
Anixter International 1 | 500 | 44,230 | |||||
Avnet | 800 | 34,416 | |||||
AVX Corporation | 1,660 | 23,240 | |||||
Coherent 1 | 640 | 38,861 | |||||
Rogers Corporation 1 | 686 | 55,868 | |||||
196,615 | |||||||
IT SERVICES - 1.9% | |||||||
Fiserv 1 | 200 | 14,194 | |||||
Sykes Enterprises 1 | 660 | 15,490 | |||||
500 | 21,840 | ||||||
51,524 | |||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 1.4% | |||||||
Diodes 1 | 920 | 25,364 | |||||
Lam Research | 180 | 14,281 | |||||
39,645 | |||||||
SOFTWARE - 1.1% | |||||||
Mentor Graphics | 1,330 | 29,154 | |||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.8% | |||||||
Diebold | 800 | 27,712 | |||||
Western Digital | 210 | 23,247 | |||||
50,959 | |||||||
Total (Cost $315,558) | 368,427 | ||||||
MATERIALS – 5.7% | |||||||
CHEMICALS - 4.1% | |||||||
Cabot Corporation | 591 | 25,921 | |||||
Minerals Technologies | 404 | 28,058 | |||||
†Sensient Technologies | 390 | 23,532 | |||||
Westlake Chemical | 610 | 37,265 | |||||
114,776 | |||||||
METALS & MINING - 0.4% | |||||||
Reliance Steel & Aluminum | 170 | 10,416 | |||||
PAPER & FOREST PRODUCTS - 1.2% | |||||||
Glatfelter | 1,323 | 33,829 | |||||
Total (Cost $152,361) | 159,021 | ||||||
UTILITIES – 1.8% | |||||||
GAS UTILITIES - 1.8% | |||||||
UGI Corporation | 1,350 | 51,273 | |||||
Total (Cost $28,437) | 51,273 | ||||||
MISCELLANEOUS 3- 2.3% | |||||||
Total (Cost $66,284) | 65,301 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $1,782,192) | 2,020,622 | ||||||
FIXED INCOME -1.4% | |||||||
GOVERNMENT BONDS – 1.4% | |||||||
iShares 1-3 Year Treasury Bond ETF | 470 | 39,691 | |||||
TOTAL FIXED INCOME | |||||||
(Cost $39,703) | 39,691 | ||||||
REPURCHASE AGREEMENT – 27.1% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $758,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% due 10/12/17, valued at $776,100) | |||||||
(Cost $758,000) | 758,000 | ||||||
TOTAL INVESTMENTS – 100.6% | |||||||
(Cost $2,579,895) | 2,818,313 | ||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.6)% | (16,307 | ) | |||||
NET ASSETS – 100.0% | $ | 2,802,006 | |||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 39 |
Schedules of Investments |
Royce SMid-Cap Value Fund | |||||||
Common Stocks – 96.9% | |||||||
SHARES | VALUE | ||||||
CONSUMER DISCRETIONARY – 14.6% | |||||||
AUTOMOBILES - 4.3% | |||||||
Thor Industries | 12,020 | $ | 671,557 | ||||
HOUSEHOLD DURABLES - 1.5% | |||||||
Garmin | 4,320 | 228,226 | |||||
SPECIALTY RETAIL - 8.8% | |||||||
7,040 | 536,237 | ||||||
Chico’s FAS | 8,600 | 139,406 | |||||
†Finish Line (The) Cl. A | 17,400 | 422,994 | |||||
GameStop Corporation Cl. A | 8,320 | 281,216 | |||||
1,379,853 | |||||||
Total (Cost $2,077,076) | 2,279,636 | ||||||
CONSUMER STAPLES – 2.5% | |||||||
FOOD PRODUCTS - 2.5% | |||||||
Cal-Maine Foods | 3,480 | 135,824 | |||||
Sanderson Farms | 3,000 | 252,075 | |||||
Total (Cost $314,237) | 387,899 | ||||||
ENERGY – 13.4% | |||||||
ENERGY EQUIPMENT & SERVICES - 10.9% | |||||||
Helmerich & Payne | 7,400 | 498,908 | |||||
Pason Systems | 13,420 | 252,852 | |||||
†TGS-NOPEC Geophysical | 24,120 | 521,869 | |||||
Trican Well Service | 29,700 | 142,390 | |||||
Unit Corporation 1 | 8,360 | 285,076 | |||||
1,701,095 | |||||||
OIL, GAS & CONSUMABLE FUELS - 2.5% | |||||||
HollyFrontier Corporation | 10,580 | 396,539 | |||||
Total (Cost $2,843,281) | 2,097,634 | ||||||
FINANCIALS – 15.0% | |||||||
CAPITAL MARKETS - 11.2% | |||||||
Artisan Partners Asset Management Cl. A | 8,560 | 432,537 | |||||
Ashmore Group | 119,740 | 519,131 | |||||
Federated Investors Cl. B | 6,000 | 197,580 | |||||
Sprott | 89,800 | 188,597 | |||||
Value Partners Group | 497,780 | 415,734 | |||||
1,753,579 | |||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.8% | |||||||
Kennedy-Wilson Holdings | 23,680 | 599,104 | |||||
Total (Cost $2,443,653) | 2,352,683 | ||||||
HEALTH CARE – 5.2% | |||||||
BIOTECHNOLOGY - 3.2% | |||||||
Myriad Genetics 1 | 14,560 | 495,914 | |||||
PHARMACEUTICALS - 2.0% | |||||||
Medicines Company (The)1 | 11,360 | 314,331 | |||||
Total (Cost $701,586) | 810,245 | ||||||
INDUSTRIALS – 17.9% | |||||||
CONSTRUCTION & ENGINEERING - 1.0% | |||||||
Jacobs Engineering Group 1 | 3,620 | 161,778 | |||||
MACHINERY - 12.8% | |||||||
AGCO Corporation | 13,920 | 629,184 | |||||
Kennametal | 3,200 | 114,528 | |||||
Lincoln Electric Holdings | 1,500 | 103,635 | |||||
Lindsay Corporation | 2,600 | 222,924 | |||||
Semperit AG Holding | 11,700 | 566,164 | |||||
Valmont Industries | 2,885 | 366,395 | |||||
2,002,830 | |||||||
MARINE - 0.8% | |||||||
†Clarkson | 4,000 | 118,070 | |||||
PROFESSIONAL SERVICES - 3.3% | |||||||
ManpowerGroup | 7,700 | 524,909 | |||||
Total (Cost $3,001,411) | 2,807,587 | ||||||
INFORMATION TECHNOLOGY – 12.2% | |||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.8% | |||||||
Cirrus Logic 1 | 27,120 | 639,219 | |||||
Lam Research | 1,100 | 87,274 | |||||
Teradyne | 8,990 | 177,912 | |||||
904,405 | |||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 6.4% | |||||||
SanDisk Corporation | 4,140 | 405,637 | |||||
Western Digital | 5,480 | 606,636 | |||||
1,012,273 | |||||||
Total (Cost $1,156,239) | 1,916,678 | ||||||
MATERIALS – 16.1% | |||||||
CHEMICALS - 2.8% | |||||||
Westlake Chemical | 7,100 | 433,739 | |||||
METALS & MINING - 12.2% | |||||||
†Franco-Nevada Corporation | 5,100 | 250,869 | |||||
†Fresnillo | 13,200 | 156,641 | |||||
Globe Specialty Metals | 34,660 | 597,192 | |||||
Pan American Silver | 34,000 | 312,800 | |||||
Randgold Resources ADR | 3,300 | 222,453 | |||||
Reliance Steel & Aluminum | 5,900 | 361,493 | |||||
1,901,448 | |||||||
PAPER & FOREST PRODUCTS - 1.1% | |||||||
Stella-Jones | 6,300 | 177,537 | |||||
Total (Cost $2,556,393) | 2,512,724 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $15,093,876) | 15,165,086 | ||||||
REPURCHASE AGREEMENT – 3.4% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $539,000 (collateralized by obligations of various U.S. Government Agencies, 0.625% due 9/30/17, valued at $554,400) | |||||||
(Cost $539,000) | 539,000 | ||||||
TOTAL INVESTMENTS – 100.3% | |||||||
(Cost $15,632,876) | 15,704,086 | ||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.3)% | (52,128 | ) | |||||
NET ASSETS – 100.0% | $ | 15,651,958 | |||||
40 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Partners Fund | |||||||
Common Stocks – 85.0% | |||||||
SHARES | VALUE | ||||||
CONSUMER DISCRETIONARY – 2.0% | |||||||
HOUSEHOLD DURABLES - 0.9% | |||||||
Hunter Douglas | 600 | $ | 25,054 | ||||
MEDIA - 1.1% | |||||||
Morningstar | 480 | 31,061 | |||||
Total (Cost $38,308) | 56,115 | ||||||
CONSUMER STAPLES – 1.2% | |||||||
FOOD PRODUCTS - 1.2% | |||||||
†Fresh Del Monte Produce | 1,000 | 33,550 | |||||
Total (Cost $25,212) | 33,550 | ||||||
ENERGY – 3.1% | |||||||
ENERGY EQUIPMENT & SERVICES - 2.3% | |||||||
Ensco Cl. A | 560 | 16,772 | |||||
Schlumberger | 288 | 24,598 | |||||
Tidewater | 720 | 23,335 | |||||
64,705 | |||||||
OIL, GAS & CONSUMABLE FUELS - 0.8% | |||||||
†Cameco Corporation | 1,300 | 21,333 | |||||
Total (Cost $103,354) | 86,038 | ||||||
FINANCIALS – 32.8% | |||||||
BANKS - 1.7% | |||||||
†BBVA Banco Frances ADR | 3,300 | 45,507 | |||||
CAPITAL MARKETS - 23.8% | |||||||
ASA Gold and Precious Metals | 2,700 | 27,297 | |||||
Ashmore Group | 8,000 | 34,684 | |||||
Aurelius | 900 | 34,266 | |||||
Bank of New York Mellon (The) | 1,360 | 55,175 | |||||
Charles Schwab | 1,656 | 49,995 | |||||
Coronation Fund Managers | 4,300 | 42,428 | |||||
Jupiter Fund Management | 7,300 | 40,984 | |||||
KKR & Co. L.P. | 1,040 | 24,138 | |||||
Monroe Capital | 3,390 | 49,019 | |||||
Northern Trust | 448 | 30,195 | |||||
RHJ International 1 | 8,000 | 44,688 | |||||
SEI Investments | 1,152 | 46,126 | |||||
Sprott | 18,200 | 38,224 | |||||
State Street | 886 | 69,551 | |||||
Value Partners Group | 84,000 | 70,155 | |||||
656,925 | |||||||
DIVERSIFIED FINANCIAL SERVICES - 1.8% | |||||||
Moody’s Corporation | 525 | 50,300 | |||||
INSURANCE - 2.6% | |||||||
E-L Financial | 120 | 70,546 | |||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 2.9% | |||||||
Jones Lang LaSalle | 320 | 47,977 | |||||
Midland Holdings 1 | 64,000 | 32,336 | |||||
80,313 | |||||||
Total (Cost $658,408) | 903,591 | ||||||
HEALTH CARE – 4.2% | |||||||
BIOTECHNOLOGY - 1.1% | |||||||
Myriad Genetics 1 | 880 | 29,973 | |||||
HEALTH CARE EQUIPMENT & SUPPLIES - 2.5% | |||||||
Atrion Corporation | 200 | 68,002 | |||||
HEALTH CARE PROVIDERS & SERVICES - 0.6% | |||||||
Landauer | 500 | 17,070 | |||||
Total (Cost $96,536) | 115,045 | ||||||
INDUSTRIALS – 19.5% | |||||||
AIR FREIGHT & LOGISTICS - 1.7% | |||||||
Expeditors International of Washington | 1,040 | 46,394 | |||||
COMMERCIAL SERVICES & SUPPLIES - 1.1% | |||||||
Heritage-Crystal Clean 1 | 2,400 | 29,592 | |||||
CONSTRUCTION & ENGINEERING - 1.6% | |||||||
†KBR | 2,600 | 44,070 | |||||
MACHINERY - 6.4% | |||||||
Foster (L.B.) Company | 640 | 31,085 | |||||
Graco | 576 | 46,183 | |||||
RBC Bearings | 560 | 36,137 | |||||
Spirax-Sarco Engineering | 770 | 34,219 | |||||
Valmont Industries | 240 | 30,480 | |||||
178,104 | |||||||
PROFESSIONAL SERVICES - 4.6% | |||||||
ManpowerGroup | 560 | 38,175 | |||||
Towers Watson & Co. Cl. A | 392 | 44,363 | |||||
Verisk Analytics Cl. A 1 | 698 | 44,707 | |||||
127,245 | |||||||
ROAD & RAIL - 3.0% | |||||||
FRP Holdings 1 | 960 | 37,642 | |||||
Landstar System | 640 | 46,419 | |||||
84,061 | |||||||
TRADING COMPANIES & DISTRIBUTORS - 1.1% | |||||||
Applied Industrial Technologies | 640 | 29,178 | |||||
Total (Cost $358,909) | 538,644 | ||||||
INFORMATION TECHNOLOGY – 11.9% | |||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 8.1% | |||||||
Amphenol Corporation Cl. A | 600 | 32,286 | |||||
Anixter International 1 | 400 | 35,384 | |||||
FARO Technologies 1 | 600 | 37,608 | |||||
IPG Photonics 1 | 440 | 32,965 | |||||
National Instruments | 1,200 | 37,308 | |||||
Orbotech 1 | 1,000 | 14,800 | |||||
Sutron Corporation 1 | 6,700 | 33,500 | |||||
223,851 | |||||||
IT SERVICES - 2.2% | |||||||
MasterCard Cl. A | 710 | 61,173 | |||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.6% | |||||||
Western Digital | 400 | 44,280 | |||||
Total (Cost $189,365) | 329,304 | ||||||
MATERIALS – 8.3% | |||||||
CHEMICALS - 0.7% | |||||||
Airgas | 160 | 18,429 | |||||
CONTAINERS & PACKAGING - 2.6% | |||||||
Greif Cl. A | 704 | 33,250 | |||||
Mayr-Melnhof Karton | 375 | 38,916 | |||||
72,166 | |||||||
METALS & MINING - 3.6% | |||||||
Fresnillo | 2,000 | 23,734 | |||||
Pan American Silver | 3,200 | 29,440 | |||||
Reliance Steel & Aluminum | 760 | 46,565 | |||||
99,739 | |||||||
PAPER & FOREST PRODUCTS - 1.4% | |||||||
Stella-Jones | 1,400 | 39,452 | |||||
Total (Cost $232,747) | 229,786 | ||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 41 |
Schedules of Investments |
Royce Partners Fund (continued) | |||||||
VALUE | |||||||
MISCELLANEOUS3 – 2.0% | |||||||
Total (Cost $56,069) | $ | 54,701 | |||||
TOTAL COMMON STOCKS | |||||||
(Cost $1,758,908) | 2,346,774 | ||||||
REPURCHASE AGREEMENT – 15.7% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $433,000 (collateralized by obligations of various U.S. Government Agencies, 0.625% due 9/30/17, valued at $445,500) | |||||||
(Cost $433,000) | 433,000 | ||||||
TOTAL INVESTMENTS – 100.7% | |||||||
(Cost $2,191,908) | 2,779,774 | ||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.7)% | (19,278 | ) | |||||
NET ASSETS – 100.0% | $ | 2,760,496 | |||||
Royce Opportunity Select Fund | |||||||
Common Stocks – 98.7% | |||||||
SHARES | VALUE | ||||||
CONSUMER DISCRETIONARY – 16.7% | |||||||
AUTO COMPONENTS - 1.2% | |||||||
15,000 | 235,950 | ||||||
HOTELS, RESTAURANTS & LEISURE - 1.0% | |||||||
Belmond Cl. A 1 | 16,000 | 197,920 | |||||
HOUSEHOLD DURABLES - 5.4% | |||||||
Dixie Group 1,5 | 25,500 | 233,835 | |||||
17,000 | 302,940 | ||||||
M.D.C. Holdings | 7,800 | 206,466 | |||||
20,000 | 289,600 | ||||||
1,032,841 | |||||||
MEDIA - 1.8% | |||||||
Ballantyne Strong 1,5 | 28,000 | 115,080 | |||||
68,000 | 225,760 | ||||||
340,840 | |||||||
MULTILINE RETAIL - 0.5% | |||||||
J.C. Penney Company 1 | 16,000 | 103,680 | |||||
SPECIALTY RETAIL - 4.8% | |||||||
†American Eagle Outfitters | 26,500 | 367,820 | |||||
bebe stores | 40,000 | 87,600 | |||||
Pacific Sunwear of California 1,5 | 35,000 | 76,300 | |||||
Zumiez 1 | 10,000 | 386,300 | |||||
918,020 | |||||||
TEXTILES, APPAREL & LUXURY GOODS - 2.0% | |||||||
Quiksilver 1 | 41,000 | 90,610 | |||||
9,000 | 286,470 | ||||||
377,080 | |||||||
Total (Cost $3,091,729) | 3,206,331 | ||||||
ENERGY – 1.5% | |||||||
OIL, GAS & CONSUMABLE FUELS - 1.5% | |||||||
†Pengrowth Energy | 25,000 | 77,750 | |||||
Scorpio Tankers | 25,000 | 217,250 | |||||
Total (Cost $384,268) | 295,000 | ||||||
FINANCIALS – 7.4% | |||||||
BANKS - 1.6% | |||||||
TriState Capital Holdings 1 | 15,000 | 153,600 | |||||
Trustmark Corporation | 6,500 | 159,510 | |||||
313,110 | |||||||
CONSUMER FINANCE - 1.0% | |||||||
9,000 | 184,410 | ||||||
INSURANCE - 2.3% | |||||||
MBIA 1 | 45,000 | 429,300 | |||||
REAL ESTATE INVESTMENT TRUSTS (REITS) - 2.5% | |||||||
42,000 | 289,800 | ||||||
RAIT Financial Trust | 25,000 | 191,750 | |||||
481,550 | |||||||
Total (Cost $1,471,116) | 1,408,370 | ||||||
HEALTH CARE – 8.8% | |||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 4.4% | |||||||
Accuray 1 | 40,000 | 302,000 | |||||
OraSure Technologies 1 | 25,000 | 253,500 | |||||
†Trinity Biotech ADR Cl. A | 16,792 | 294,028 | |||||
849,528 | |||||||
HEALTH CARE PROVIDERS & SERVICES - 2.0% | |||||||
†Owens & Minor | 11,000 | 386,210 | |||||
HEALTH CARE TECHNOLOGY - 1.5% | |||||||
22,500 | 287,325 | ||||||
42 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Opportunity Select Fund (continued) | |||||||
SHARES | VALUE | ||||||
HEALTH CARE (continued) | |||||||
LIFE SCIENCES TOOLS & SERVICES - 0.9% | |||||||
7,500 | $ | 162,150 | |||||
Total (Cost $1,507,472) | 1,685,213 | ||||||
INDUSTRIALS – 14.4% | |||||||
AEROSPACE & DEFENSE - 1.0% | |||||||
Kratos Defense & Security Solutions 1 | 37,500 | 188,250 | |||||
AIR FREIGHT & LOGISTICS - 3.1% | |||||||
Atlas Air Worldwide Holdings 1 | 7,000 | 345,100 | |||||
XPO Logistics 1 | 6,200 | 253,456 | |||||
598,556 | |||||||
BUILDING PRODUCTS - 2.7% | |||||||
Builders FirstSource 1 | 41,000 | 281,670 | |||||
3,000 | 70,740 | ||||||
Quanex Building Products | 9,000 | 169,020 | |||||
521,430 | |||||||
CONSTRUCTION & ENGINEERING - 0.6% | |||||||
Ameresco Cl. A 1 | 15,000 | 105,000 | |||||
MACHINERY - 1.6% | |||||||
Commercial Vehicle Group 1 | 8,000 | 53,280 | |||||
Mueller Water Products Cl. A | 24,000 | 245,760 | |||||
299,040 | |||||||
MARINE - 0.6% | |||||||
Baltic Trading | 48,000 | 120,480 | |||||
ROAD & RAIL - 2.9% | |||||||
ArcBest Corporation | 1,800 | 83,466 | |||||
Covenant Transport Group Cl. A 1 | 5,000 | 135,550 | |||||
Swift Transportation Cl. A 1 | 12,000 | 343,560 | |||||
562,576 | |||||||
TRADING COMPANIES & DISTRIBUTORS - 1.9% | |||||||
Air Lease Cl. A | 10,500 | 360,255 | |||||
Total (Cost $2,445,204) | 2,755,587 | ||||||
INFORMATION TECHNOLOGY – 34.0% | |||||||
COMMUNICATIONS EQUIPMENT - 1.4% | |||||||
Extreme Networks 1 | 70,000 | 247,100 | |||||
Interphase Corporation 1 | 6,500 | 14,755 | |||||
261,855 | |||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 2.9% | |||||||
II-VI 1 | 15,000 | 204,750 | |||||
Newport Corporation 1 | 14,000 | 267,540 | |||||
36,300 | 84,942 | ||||||
557,232 | |||||||
INTERNET SOFTWARE & SERVICES - 6.3% | |||||||
30,000 | 306,600 | ||||||
Carbonite 1 | 26,000 | 371,020 | |||||
†EarthLink Holdings | 85,500 | 375,345 | |||||
Limelight Networks 1 | 56,000 | 155,120 | |||||
1,208,085 | |||||||
IT SERVICES - 1.0% | |||||||
Datalink Corporation 1 | 15,000 | 193,500 | |||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 15.9% | |||||||
Alpha & Omega Semiconductor 1,5 | 18,000 | 159,300 | |||||
Brooks Automation | 9,503 | 121,163 | |||||
Exar Corporation 1 | 40,000 | 408,000 | |||||
Inphi Corporation 1 | 18,000 | 332,640 | |||||
Integrated Silicon Solution | 11,000 | 182,270 | |||||
Intersil Corporation Cl. A | 21,000 | 303,870 | |||||
Mattson Technology 1 | 85,000 | 289,000 | |||||
NeoPhotonics Corporation 1 | 24,666 | 83,371 | |||||
OmniVision Technologies 1 | 6,500 | 169,000 | |||||
23,000 | 381,570 | ||||||
Rubicon Technology 1 | 17,000 | 77,690 | |||||
Rudolph Technologies 1,5 | 13,003 | 133,021 | |||||
36,000 | 9,180 | ||||||
SunEdison 1 | 8,000 | 156,080 | |||||
13,014 | 241,670 | ||||||
3,047,825 | |||||||
SOFTWARE - 3.4% | |||||||
40,000 | 174,400 | ||||||
†Mentor Graphics | 17,500 | 383,600 | |||||
Smith Micro Software 1,5 | 84,000 | 81,480 | |||||
639,480 | |||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 3.1% | |||||||
Logitech International | 30,200 | 405,586 | |||||
QLogic Corporation 1 | 14,500 | 193,140 | |||||
598,726 | |||||||
Total (Cost $5,685,152) | 6,506,703 | ||||||
MATERIALS – 9.7% | |||||||
CHEMICALS - 2.4% | |||||||
Kraton Performance Polymers 1 | 10,000 | 207,900 | |||||
18,000 | 248,580 | ||||||
456,480 | |||||||
CONSTRUCTION MATERIALS - 1.8% | |||||||
12,000 | 341,400 | ||||||
METALS & MINING - 5.5% | |||||||
AK Steel Holding Corporation 1,5 | 34,000 | 201,960 | |||||
Commercial Metals | 20,000 | 325,800 | |||||
†Noranda Aluminum Holding Corporation | 45,000 | 158,400 | |||||
RTI International Metals 1 | 15,000 | 378,900 | |||||
1,065,060 | |||||||
Total (Cost $1,854,213) | 1,862,940 | ||||||
TELECOMMUNICATION SERVICES – 1.7% | |||||||
DIVERSIFIED TELECOMMUNICATION SERVICES - 1.7% | |||||||
Iridium Communications 1 | 34,000 | 331,500 | |||||
Total (Cost $333,643) | 331,500 | ||||||
MISCELLANEOUS 3 – 4.5% | |||||||
Total (Cost $833,390) | 867,075 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $17,606,187) | 18,918,719 | ||||||
REPURCHASE AGREEMENT – 2.8% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $536,000 (collateralized by obligations of various U.S. Government Agencies, 0.625% due 9/30/17, valued at $549,450) | |||||||
(Cost $536,000) | 536,000 | ||||||
TOTAL INVESTMENTS – 101.5% | |||||||
(Cost $18,142,187) | 19,454,719 | ||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (1.5)% | (294,380 | ) | |||||
NET ASSETS – 100.0% | $ | 19,160,339 | |||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 43 |
Schedules of Investments |
Royce Opportunity Select Fund (continued) | |||||||
Securities Sold Short | |||||||
Common Stocks – 4.9% | |||||||
SHARES | VALUE | ||||||
CONSUMER DISCRETIONARY – 2.5% | |||||||
HOTELS, RESTAURANTS & LEISURE - 0.6% | |||||||
Life Time Fitness | 1,500 | $ | 84,930 | ||||
Popeyes Louisiana Kitchen | 500 | 28,135 | |||||
113,065 | |||||||
SPECIALTY RETAIL - 1.3% | |||||||
Lumber Liquidators Holdings | 2,500 | 165,775 | |||||
Men’s Wearhouse (The) | 1,700 | 75,055 | |||||
Vitamin Shoppe | 500 | 24,290 | |||||
265,120 | |||||||
TEXTILES, APPAREL & LUXURY GOODS - 0.6% | |||||||
Michael Kors Holdings | 1,500 | 112,650 | |||||
Total (Proceeds $499,921) | 490,835 | ||||||
CONSUMER STAPLES – 0.3% | |||||||
FOOD & STAPLES RETAILING - 0.3% | |||||||
Fresh Market (The) | 1,500 | 61,800 | |||||
Total (Proceeds $57,821) | 61,800 | ||||||
FINANCIALS – 0.7% | |||||||
CAPITAL MARKETS - 0.7% | |||||||
Janus Capital Group | 5,000 | 80,650 | |||||
Stifel Financial | 1,000 | 51,020 | |||||
Total (Proceeds $118,208) | 131,670 | ||||||
INDUSTRIALS – 1.2% | |||||||
BUILDING PRODUCTS - 0.3% | |||||||
Trex Company | 1,500 | 63,870 | |||||
CONSTRUCTION & ENGINEERING - 0.5% | |||||||
Dycom Industries | 2,500 | 87,725 | |||||
MACHINERY - 0.3% | |||||||
CIRCOR International | 1,000 | 60,280 | |||||
TRADING COMPANIES & DISTRIBUTORS - 0.1% | |||||||
Beacon Roofing Supply | 500 | 13,900 | |||||
Total (Proceeds $201,505) | 225,775 | ||||||
INFORMATION TECHNOLOGY – 0.2% | |||||||
INTERNET SOFTWARE & SERVICES - 0.2% | |||||||
Zillow Cl. A | 300 | 31,767 | |||||
Total (Proceeds $34,368) | 31,767 | ||||||
TOTAL SECURITIES SOLD SHORT | |||||||
(Proceeds $911,823) | $ | 941,847 | |||||
Royce Global Dividend Value Fund | |||||||
Common Stocks – 94.2% | |||||||
SHARES | VALUE | ||||||
AUSTRALIA – 0.9% | |||||||
†ALS | 10,200 | $ | 44,136 | ||||
Imdex 1 | 48,300 | 18,726 | |||||
Total (Cost $103,348) | 62,862 | ||||||
AUSTRIA – 1.0% | |||||||
Mayr-Melnhof Karton | 350 | 36,322 | |||||
†Zumtobel Group | 1,400 | 31,533 | |||||
Total (Cost $68,952) | 67,855 | ||||||
BRAZIL – 4.9% | |||||||
Brasil Brokers Participacoes | 45,150 | 42,938 | |||||
†Brasil Insurance Participacoes e Administracao | 4,700 | 5,953 | |||||
CETIP - Mercados Organizados | 4,800 | 58,133 | |||||
Eternit | 28,000 | 34,240 | |||||
Grendene | 9,000 | 51,765 | |||||
Iguatemi Empresa de Shopping Centers | 2,000 | 18,372 | |||||
MAHLE Metal Leve | 4,500 | 35,474 | |||||
†Mills Estruturas e Servicos de Engenharia | 2,300 | 8,259 | |||||
16,700 | 18,096 | ||||||
Totvs | 4,500 | 59,210 | |||||
Total (Cost $507,722) | 332,440 | ||||||
CANADA – 5.8% | |||||||
Aimia | 3,000 | 37,726 | |||||
Alaris Royalty | 2,000 | 60,871 | |||||
Canadian Energy Services & Technology | 1,812 | 9,904 | |||||
Computer Modelling Group | 1,300 | 13,360 | |||||
GMP Capital | 7,500 | 40,993 | |||||
†Holloway Lodging | 7,100 | 38,440 | |||||
KP Tissue | 3,000 | 43,794 | |||||
Major Drilling Group International | 3,750 | 18,430 | |||||
†MTY Food Group | 1,200 | 34,818 | |||||
Pan American Silver | 1,350 | 12,420 | |||||
Sprott | 22,500 | 47,254 | |||||
Trican Well Service | 1,386 | 6,645 | |||||
†Western Forest Products | 13,800 | 32,071 | |||||
Total (Cost $533,535) | 396,726 | ||||||
CHILE – 2.3% | |||||||
Forus | 11,700 | 48,713 | |||||
Inversiones La Construccion | 5,000 | 60,758 | |||||
Sonda | 20,000 | 47,418 | |||||
Total (Cost $189,240) | 156,889 | ||||||
CHINA – 3.0% | |||||||
Daphne International Holdings | 118,300 | 42,915 | |||||
E-House (China) Holdings ADR | 1,900 | 13,756 | |||||
95 | 1,022 | ||||||
Pacific Online | 132,400 | 61,690 | |||||
Xtep International Holdings | 205,000 | 82,574 | |||||
Total (Cost $261,733) | 201,957 | ||||||
CYPRUS – 0.7% | |||||||
Globaltrans Investment GDR | 9,500 | 48,237 | |||||
Total (Cost $107,674) | 48,237 | ||||||
DENMARK – 0.9% | |||||||
Matas | 2,600 | 59,302 | |||||
Total (Cost $63,396) | 59,302 | ||||||
44 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce Global Dividend Value Fund (continued) | ||||||||
SHARES | VALUE | |||||||
FINLAND – 2.0% | ||||||||
F-Secure | 10,000 | $ | 27,222 | |||||
Nokian Renkaat | 1,950 | 47,763 | ||||||
Tieto | 2,500 | 65,056 | ||||||
Total (Cost $164,722) | 140,041 | |||||||
FRANCE – 4.6% | ||||||||
Alten | 1,300 | 55,590 | ||||||
bioMerieux | 400 | 41,465 | ||||||
Gaztransport Et Technigaz | 900 | 53,153 | ||||||
†Lectra | 1,400 | 15,485 | ||||||
†Nexity | 2,300 | 87,011 | ||||||
Vetoquinol | 1,403 | 60,944 | ||||||
Total (Cost $311,901) | 313,648 | |||||||
GERMANY – 4.4% | ||||||||
Amadeus Fire | 750 | 56,416 | ||||||
Aurelius | 1,900 | 72,340 | ||||||
†CompuGroup Medical | 1,100 | 26,487 | ||||||
Fuchs Petrolub | 400 | 15,264 | ||||||
†Hawesko Holding | 300 | 15,067 | ||||||
Nemetschek | 600 | 60,914 | ||||||
Pfeiffer Vacuum Technology | 400 | 33,203 | ||||||
200 | 22,459 | |||||||
Total (Cost $258,583) | 302,150 | |||||||
HONG KONG – 10.9% | ||||||||
Bonjour Holdings | 118,250 | 12,939 | ||||||
Bosideng International Holdings | 275,000 | 36,731 | ||||||
Dickson Concepts (International) | 52,500 | 25,946 | ||||||
†Giordano International | 20,000 | 8,867 | ||||||
Le Saunda Holdings | 120,000 | 45,094 | ||||||
†Luen Thai Holdings | 80,200 | 14,667 | ||||||
†Luk Fook Holdings (International) | 6,400 | 23,967 | ||||||
Midland Holdings 1 | 92,500 | 46,735 | ||||||
New World Department Store China | 189,300 | 60,517 | ||||||
Oriental Watch Holdings | 103,500 | 19,985 | ||||||
Pacific Textiles Holdings | 26,250 | 34,722 | ||||||
Pico Far East Holdings | 343,100 | 78,621 | ||||||
Stella International Holdings | 27,500 | 72,160 | ||||||
Television Broadcasts | 15,000 | 87,070 | ||||||
Value Partners Group | 120,000 | 100,221 | ||||||
VTech Holdings | 3,000 | 43,003 | ||||||
Win Hanverky Holdings | 276,000 | 31,500 | ||||||
Total (Cost $777,890) | 742,745 | |||||||
INDIA – 0.6% | ||||||||
Graphite India | 29,000 | 41,763 | ||||||
Total (Cost $36,199) | 41,763 | |||||||
INDONESIA – 1.1% | ||||||||
Selamat Sempurna | 200,000 | 76,282 | ||||||
Total (Cost $30,635) | 76,282 | |||||||
ISRAEL – 1.0% | ||||||||
Hilan | 10,000 | 71,429 | ||||||
Total (Cost $73,037) | 71,429 | |||||||
ITALY – 1.2% | ||||||||
DiaSorin | 1,350 | 54,442 | ||||||
Recordati | 2,000 | 31,094 | ||||||
Total (Cost $74,032) | 85,536 | |||||||
JAPAN – 4.3% | ||||||||
Dr.Ci:Labo | 800 | 27,333 | ||||||
EPS Corporation | 3,000 | 35,535 | ||||||
Hogy Medical | 700 | 31,924 | ||||||
†Itoki Corporation | 6,100 | 31,249 | ||||||
Moshi Moshi Hotline | 3,700 | 33,747 | ||||||
†Obara Group | 700 | 31,078 | ||||||
Santen Pharmaceutical | 350 | 18,731 | ||||||
†Tokai Tokyo Financial Holdings | 2,700 | 18,474 | ||||||
TOTO | 4,000 | 46,525 | ||||||
USS | 1,300 | 20,006 | ||||||
Total (Cost $269,159) | 294,602 | |||||||
MALAYSIA – 2.7% | ||||||||
CB Industrial Product Holding | 116,200 | 66,729 | ||||||
6,866 | 933 | |||||||
Media Chinese International | 178,600 | 38,304 | ||||||
Media Prima | 102,500 | 51,237 | ||||||
Padini Holdings | 62,500 | 26,004 | ||||||
Total (Cost $206,325) | 183,207 | |||||||
MEXICO – 2.4% | ||||||||
Bolsa Mexicana de Valores | 40,000 | 72,443 | ||||||
Fresnillo | 3,400 | 40,347 | ||||||
Industrias Bachoco ADR1 | 1,000 | 49,880 | ||||||
Total (Cost $158,815) | 162,670 | |||||||
NETHERLANDS – 0.8% | ||||||||
Exact Holding | 1,500 | 57,501 | ||||||
Total (Cost $33,946) | 57,501 | |||||||
NEW ZEALAND – 0.3% | ||||||||
†Trade Me | 7,000 | 19,538 | ||||||
Total (Cost $23,652) | 19,538 | |||||||
NORWAY – 2.6% | ||||||||
Ekornes | 5,000 | 63,737 | ||||||
Fred. Olsen Energy | 1,250 | 11,394 | ||||||
Oslo Bors VPS Holding | 5,500 | 56,085 | ||||||
TGS-NOPEC Geophysical | 1,250 | 27,046 | ||||||
†Tomra Systems | 2,700 | 20,788 | ||||||
Total (Cost $196,440) | 179,050 | |||||||
POLAND – 0.8% | ||||||||
Warsaw Stock Exchange | 4,000 | 51,541 | ||||||
Total (Cost $57,360) | 51,541 | |||||||
SINGAPORE – 3.2% | ||||||||
ARA Asset Management | 39,050 | 50,017 | ||||||
ComfortDelGro Corporation | 20,000 | 39,155 | ||||||
†First Resources | 19,800 | 27,919 | ||||||
Pan-United Corporation | 47,000 | 29,801 | ||||||
†Parkson Retail Asia | 35,400 | 21,379 | ||||||
Silverlake Axis | 53,800 | 50,896 | ||||||
Total (Cost $187,155) | 219,167 | |||||||
SOUTH AFRICA – 8.1% | ||||||||
Afrimat | 55,600 | 81,209 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 45 |
Schedules of Investments |
Royce Global Dividend Value Fund (continued) | ||||||||
SHARES | VALUE | |||||||
SOUTH AFRICA (continued) | ||||||||
AVI | 6,400 | $ | 42,892 | |||||
Blue Label Telecoms | 50,000 | 38,018 | ||||||
Cashbuild | 4,000 | 56,684 | ||||||
Coronation Fund Managers | 7,400 | 73,015 | ||||||
Foschini Group (The) | 6,000 | 68,751 | ||||||
Investec | 2,500 | 20,884 | ||||||
JSE | 5,800 | 60,581 | ||||||
Lewis Group | 7,000 | 44,791 | ||||||
Raubex Group | 36,000 | 68,313 | ||||||
Total (Cost $467,056) | 555,138 | |||||||
SOUTH KOREA – 1.3% | ||||||||
†Eugene Technology | 1,545 | 22,644 | ||||||
GS Home Shopping | 167 | 33,634 | ||||||
Hanssem | 300 | 30,963 | ||||||
Total (Cost $53,318) | 87,241 | |||||||
SWITZERLAND – 5.2% | ||||||||
Belimo Holding | 10 | 23,237 | ||||||
Forbo Holding | 75 | 75,017 | ||||||
Kaba Holding | 150 | 75,635 | ||||||
LEM Holding | 40 | 29,668 | ||||||
Transocean | 1,600 | 29,328 | ||||||
VZ Holding | 335 | 59,874 | ||||||
Zehnder Group | 1,500 | 62,308 | ||||||
Total (Cost $322,840) | 355,067 | |||||||
TURKEY – 0.9% | ||||||||
Mardin Cimento Sanayii | 30,000 | 61,004 | ||||||
Total (Cost $98,421) | 61,004 | |||||||
UNITED ARAB EMIRATES – 1.3% | ||||||||
†Al Noor Hospitals Group | 800 | 12,285 | ||||||
Aramex | 92,000 | 77,246 | ||||||
Total (Cost $69,654) | 89,531 | |||||||
UNITED KINGDOM – 10.0% | ||||||||
Ashmore Group | 13,900 | 60,263 | ||||||
AVEVA Group | 2,000 | 40,941 | ||||||
†Brammer | 5,000 | 26,485 | ||||||
Clarkson | 1,900 | 56,084 | ||||||
Close Brothers Group | 1,200 | 27,675 | ||||||
Consort Medical | 2,500 | 33,642 | ||||||
De La Rue | 1,350 | 10,890 | ||||||
Diploma | 2,500 | 27,598 | ||||||
E2V Technologies | 10,750 | 28,922 | ||||||
Fidessa Group | 1,800 | 66,598 | ||||||
Homeserve | 14,000 | 73,201 | ||||||
Jupiter Fund Management | 12,050 | 67,651 | ||||||
Latchways | 3,600 | 40,391 | ||||||
†Mattioli Woods | 1,900 | 13,312 | ||||||
Michael Page International | 3,500 | 22,223 | ||||||
Spirax-Sarco Engineering | 1,275 | 56,662 | ||||||
Victrex | 1,000 | 32,292 | ||||||
Total (Cost $625,990) | 684,830 | |||||||
UNITED STATES – 5.0% | ||||||||
†Diebold | 1,300 | 45,032 | ||||||
Expeditors International of Washington | 1,100 | 49,071 | ||||||
Fresh Del Monte Produce | 1,840 | 61,732 | ||||||
Haynes International | 900 | 43,650 | ||||||
KBR | 2,200 | 37,290 | ||||||
National Instruments | 2,000 | 62,180 | ||||||
†National Research Cl. B | 1,280 | 45,862 | ||||||
Total (Cost $357,553) | 344,817 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $6,690,283) | 6,444,766 | |||||||
REPURCHASE AGREEMENT – 1.9% | ||||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $128,000 (collateralized by obligations of various U.S. Government Agencies, 0.625% due 9/30/17, valued at $133,650) | ||||||||
(Cost $128,000) | 128,000 | |||||||
TOTAL INVESTMENTS –96.1% | ||||||||
(Cost $6,818,283) | 6,572,766 | |||||||
CASH AND OTHER ASSETS LESS LIABILITIES – 3.9% | 267,256 | |||||||
NET ASSETS – 100.0% | $ | 6,840,022 | ||||||
46 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce International Micro-Cap Fund | ||||||||
Common Stocks – 97.7% | ||||||||
SHARES | VALUE | |||||||
AUSTRALIA – 6.0% | ||||||||
Collection House | 55,331 | $ | 93,517 | |||||
Imdex 1 | 220,900 | 85,644 | ||||||
Medusa Mining 1 | 37,500 | 19,955 | ||||||
Programmed Maintenance Services | 33,550 | 70,133 | ||||||
TFS Corporation | 64,651 | 81,159 | ||||||
†Webjet | 14,650 | 34,394 | ||||||
Total (Cost $451,338) | 384,802 | |||||||
AUSTRIA – 1.1% | ||||||||
†Zumtobel Group | 3,100 | 69,824 | ||||||
Total (Cost $57,634) | 69,824 | |||||||
BELGIUM – 1.3% | ||||||||
3,650 | 63,320 | |||||||
Picanol Group 1 | 700 | 22,481 | ||||||
Total (Cost $79,265) | 85,801 | |||||||
BERMUDA – 0.7% | ||||||||
21,500 | 46,673 | |||||||
Total (Cost $41,447) | 46,673 | |||||||
BRAZIL – 2.1% | ||||||||
Brasil Brokers Participacoes | 34,200 | 32,525 | ||||||
†Brasil Insurance Participacoes e Administracao | 10,100 | 12,793 | ||||||
†Contax Participacoes | 5,000 | 20,675 | ||||||
T4F Entretenimento 1 | 61,700 | 66,857 | ||||||
Total (Cost $272,337) | 132,850 | |||||||
CANADA – 8.1% | ||||||||
AirBoss of America | 4,750 | 49,961 | ||||||
†Canyon Services Group | 5,000 | 38,690 | ||||||
†COM DEV International | 12,550 | 43,101 | ||||||
61,150 | 19,474 | |||||||
HNZ Group | 2,550 | 45,390 | ||||||
†Horizon North Logistics | 19,200 | 43,629 | ||||||
Magellan Aerospace | 10,200 | 118,698 | ||||||
MTY Food Group | 3,050 | 88,497 | ||||||
Total Energy Services | 2,400 | 26,814 | ||||||
†Western Forest Products | 17,900 | 41,599 | ||||||
Total (Cost $523,267) | 515,853 | |||||||
CHILE – 0.7% | ||||||||
†Forus | 10,700 | 44,549 | ||||||
Total (Cost $46,223) | 44,549 | |||||||
CHINA – 3.6% | ||||||||
Daphne International Holdings | 141,300 | 51,259 | ||||||
1,200 | 31,608 | |||||||
†Hopefluent Group Holdings | 116,000 | 36,000 | ||||||
Pacific Online | 188,500 | 87,829 | ||||||
41,000 | 529 | |||||||
Xtep International Holdings | 60,000 | 24,168 | ||||||
Total (Cost $268,548) | 231,393 | |||||||
DENMARK – 0.6% | ||||||||
2,750 | 37,086 | |||||||
Total (Cost $37,639) | 37,086 | |||||||
FINLAND – 0.4% | ||||||||
†BasWare | 500 | 24,835 | ||||||
Total (Cost $25,276) | 24,835 | |||||||
FRANCE – 3.6% | ||||||||
aufeminin 1 | 1,400 | 43,076 | ||||||
†Lectra | 5,100 | 56,411 | ||||||
Neurones | 2,750 | 46,113 | ||||||
6,450 | 54,625 | |||||||
Tessi | 250 | 27,710 | ||||||
Total (Cost $244,788) | 227,935 | |||||||
GERMANY – 5.1% | ||||||||
Amadeus Fire | 900 | 67,699 | ||||||
†GFT Technologies | 2,950 | 43,966 | ||||||
†Hawesko Holding | 700 | 35,156 | ||||||
†mutares | 400 | 34,314 | ||||||
†Schaltbau Holding | 600 | 30,535 | ||||||
†Tomorrow Focus | 18,500 | 84,542 | ||||||
300 | 33,688 | |||||||
Total (Cost $323,251) | 329,900 | |||||||
GREECE – 0.6% | ||||||||
5,800 | 36,598 | |||||||
Total (Cost $63,721) | 36,598 | |||||||
HONG KONG – 8.3% | ||||||||
China Metal International Holdings | 221,000 | 76,353 | ||||||
†Comba Telecom Systems Holdings | 154,170 | 54,548 | ||||||
I.T | 297,400 | 85,725 | ||||||
Le Saunda Holdings | 130,100 | 48,890 | ||||||
†Luen Thai Holdings | 221,000 | 40,415 | ||||||
†New World Department Store China | 139,700 | 44,661 | ||||||
Oriental Watch Holdings | 360,800 | 69,667 | ||||||
Pico Far East Holdings | 322,200 | 73,832 | ||||||
Tse Sui Luen Jewellery (International) | 95,000 | 35,490 | ||||||
Total (Cost $634,815) | 529,581 | |||||||
INDIA – 3.3% | ||||||||
Cyient | 4,000 | 32,666 | ||||||
eClerx Services | 4,500 | 93,040 | ||||||
†KPIT Technologies | 15,650 | 50,235 | ||||||
McLeod Russel India | 1,800 | 6,722 | ||||||
†Persistent Systems | 1,100 | 28,867 | ||||||
Total (Cost $174,362) | 211,530 | |||||||
INDONESIA – 1.0% | ||||||||
Selamat Sempurna | 168,200 | 64,153 | ||||||
Total (Cost $62,459) | 64,153 | |||||||
IRELAND – 0.4% | ||||||||
†Mincon Group | 35,200 | 27,706 | ||||||
Total (Cost $44,376) | 27,706 | |||||||
ISRAEL – 0.5% | ||||||||
†Fox Wizel | 1,300 | 30,734 | ||||||
Total (Cost $29,365) | 30,734 | |||||||
JAPAN – 20.1% | ||||||||
Freund Corporation | 7,000 | 60,707 | ||||||
†Fujimori Kogyo | 1,500 | 41,925 | ||||||
†GCA Savvian | 3,700 | 35,182 | ||||||
G-Tekt Corporation | 4,800 | 45,508 | ||||||
†Itoki Corporation | 15,500 | 79,403 | ||||||
Mandom Corporation | 900 | 29,561 | ||||||
Milbon | 1,600 | 43,556 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 47 |
Schedules of Investments
Royce International Micro-Cap Fund (continued) | ||||||||
SHARES | VALUE | |||||||
JAPAN (continued) | ||||||||
†Namura Shipbuilding | 4,400 | $ | 47,159 | |||||
Nishikawa Rubber | 4,000 | 68,121 | ||||||
Nitto Kohki | 4,700 | 84,855 | ||||||
Obara Group | 1,766 | 78,406 | ||||||
Relo Holdings | 700 | 49,700 | ||||||
Ryobi | 16,200 | 43,896 | ||||||
†SPARX Group | 40,900 | 68,834 | ||||||
†Sun Frontier Fudousan | 3,500 | 32,109 | ||||||
†T Hasegawa | 2,800 | 39,321 | ||||||
Tokai Corporation/Gifu | 2,100 | 62,624 | ||||||
Trancom | 4,100 | 165,157 | ||||||
†YAMADA Consulting Group | 3,100 | 79,748 | ||||||
Zuiko Corporation | 3,000 | 129,848 | ||||||
Total (Cost $1,411,987) | 1,285,620 | |||||||
LUXEMBOURG – 0.8% | ||||||||
4,700 | 49,115 | |||||||
Total (Cost $47,542) | 49,115 | |||||||
MALAYSIA – 2.1% | ||||||||
Asia Brands | 37,700 | 32,086 | ||||||
CB Industrial Product Holding | 66,000 | 37,902 | ||||||
11,000 | 1,495 | |||||||
†Media Prima | 93,400 | 46,688 | ||||||
†NTPM Holdings | 112,500 | 19,909 | ||||||
Total (Cost $154,953) | 138,080 | |||||||
NORWAY – 1.6% | ||||||||
†Borregaard | 7,350 | 54,633 | ||||||
†Oslo Bors VPS Holding | 4,900 | 49,966 | ||||||
Total (Cost $103,909) | 104,599 | |||||||
PHILIPPINES – 1.4% | ||||||||
†Asian Terminals | 164,300 | 42,312 | ||||||
GMA Holdings PDR | 328,000 | 49,141 | ||||||
Total (Cost $95,228) | 91,453 | |||||||
SINGAPORE – 1.7% | ||||||||
Hour Glass (The) | 60,000 | 28,940 | ||||||
†Parkson Retail Asia | 127,700 | 77,122 | ||||||
Total (Cost $113,385) | 106,062 | |||||||
SOUTH AFRICA – 1.0% | ||||||||
Metrofile Holdings | 150,550 | 65,027 | ||||||
Total (Cost $72,611) | 65,027 | |||||||
SOUTH KOREA – 5.6% | ||||||||
Eugene Technology | 5,358 | 78,529 | ||||||
Handsome | 1,600 | 47,417 | ||||||
†Hankuk Carbon | 8,850 | 46,448 | ||||||
Huvis Corporation1 | 8,250 | 83,554 | ||||||
†Koh Young Technology | 1,900 | 73,794 | ||||||
1,300 | 29,801 | |||||||
Total (Cost $346,480) | 359,543 | |||||||
SRI LANKA – 0.7% | ||||||||
Distilleries Company of Sri Lanka | 29,500 | 47,331 | ||||||
Total (Cost $38,877) | 47,331 | |||||||
SWEDEN – 2.6% | ||||||||
9,800 | 73,628 | |||||||
Nolato Cl. B | 2,050 | 46,320 | ||||||
2,700 | 46,366 | |||||||
Total (Cost $165,288) | 166,314 | |||||||
SWITZERLAND – 0.9% | ||||||||
Zehnder Group | 1,450 | 60,231 | ||||||
Total (Cost $63,186) | 60,231 | |||||||
TAIWAN – 4.4% | ||||||||
†Kinik Company | 22,000 | 45,196 | ||||||
†Lumax International | 21,000 | 43,004 | ||||||
Makalot Industrial | 8,160 | 43,592 | ||||||
†Shih Her Technologies | 23,000 | 42,464 | ||||||
†Taiwan Paiho | 43,000 | 57,939 | ||||||
†UDE Corporation | 19,400 | 47,891 | ||||||
Total (Cost $263,291) | 280,086 | |||||||
UNITED ARAB EMIRATES – 0.7% | ||||||||
Aramex | 52,000 | 43,661 | ||||||
Total (Cost $25,530) | 43,661 | |||||||
UNITED KINGDOM – 6.1% | ||||||||
†Brammer | 6,300 | 33,371 | ||||||
Clarkson | 2,000 | 59,035 | ||||||
61,150 | 38,045 | |||||||
†Hargreaves Services | 3,500 | 35,120 | ||||||
Luxfer Holdings ADR | 2,200 | 32,846 | ||||||
†Mattioli Woods | 4,800 | 33,631 | ||||||
†Norcros | 230,700 | 64,618 | ||||||
†Pendragon | 63,400 | 32,450 | ||||||
†Trifast | 38,700 | 64,905 | ||||||
Total (Cost $413,458) | 394,021 | |||||||
UNITED STATES – 0.6% | ||||||||
Century Casinos 1 | 7,500 | 37,875 | ||||||
Total (Cost $38,210) | 37,875 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $6,734,046) | 6,260,821 | |||||||
REPURCHASE AGREEMENT – 1.7% | ||||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $111,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% due 10/12/17, valued at $114,425) | ||||||||
(Cost $111,000) | 111,000 | |||||||
TOTAL INVESTMENTS – 99.4% | ||||||||
(Cost $6,845,046) | 6,371,821 | |||||||
CASH AND OTHER ASSETS LESS LIABILITIES – 0.6% | 38,129 | |||||||
NET ASSETS – 100.0% | $ | 6,409,950 | ||||||
48 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014
Royce International Premier Fund | ||||||||
Common Stocks – 101.1% | ||||||||
SHARES | VALUE | |||||||
AUSTRIA – 5.0% | ||||||||
Mayr-Melnhof Karton | 1,800 | $ | 186,796 | |||||
Semperit AG Holding | 3,900 | 188,721 | ||||||
Total (Cost $362,919) | 375,517 | |||||||
BRAZIL – 6.3% | ||||||||
CETIP - Mercados Organizados | 15,100 | 182,877 | ||||||
LPS Brasil Consultoria de Imoveis | 40,000 | 96,685 | ||||||
Totvs | 15,000 | 197,365 | ||||||
Total (Cost $590,996) | 476,927 | |||||||
FINLAND – 2.4% | ||||||||
Nokian Renkaat | 7,500 | 183,703 | ||||||
Total (Cost $324,155) | 183,703 | |||||||
FRANCE – 2.1% | ||||||||
Virbac | 750 | 157,358 | ||||||
Total (Cost $134,367) | 157,358 | |||||||
GERMANY – 6.1% | ||||||||
Carl Zeiss Meditec | 6,700 | 171,062 | ||||||
KWS Saat | 500 | 162,615 | ||||||
LPKF Laser & Electronics | 9,300 | 121,848 | ||||||
Total (Cost $524,187) | 455,525 | |||||||
HONG KONG – 6.7% | ||||||||
†Pico Far East Holdings | 940,100 | 215,422 | ||||||
Stella International Holdings | 48,900 | 128,314 | ||||||
Television Broadcasts | 27,000 | 156,726 | ||||||
Total (Cost $530,317) | 500,462 | |||||||
INDIA – 7.5% | ||||||||
Bajaj Finance | 4,200 | 234,584 | ||||||
†Kewal Kiran Clothing | 4,480 | 137,402 | ||||||
†Motherson Sumi Systems | 26,900 | 195,657 | ||||||
Total (Cost $368,158) | 567,643 | |||||||
ITALY – 4.0% | ||||||||
DiaSorin | 3,805 | 153,446 | ||||||
Recordati | 9,300 | 144,588 | ||||||
Total (Cost $217,062) | 298,034 | |||||||
JAPAN – 7.0% | ||||||||
FamilyMart | 5,000 | 186,658 | ||||||
MISUMI Group | 5,300 | 174,091 | ||||||
USS | 11,000 | 169,279 | ||||||
Total (Cost $448,522) | 530,028 | |||||||
MALAYSIA – 2.0% | ||||||||
Media Prima | 300,000 | 149,962 | ||||||
Total (Cost $214,191) | 149,962 | |||||||
NORWAY – 2.1% | ||||||||
†TGS-NOPEC Geophysical | 7,300 | 157,945 | ||||||
Total (Cost $173,638) | 157,945 | |||||||
SINGAPORE – 2.2% | ||||||||
Silverlake Axis | 176,400 | 166,878 | ||||||
Total (Cost $116,959) | 166,878 | |||||||
SWEDEN – 0.4% | ||||||||
†Elekta | 3,000 | 30,618 | ||||||
Total (Cost $31,008) | 30,618 | |||||||
SWITZERLAND – 16.7% | ||||||||
Belimo Holding | 80 | 185,892 | ||||||
Forbo Holding | 175 | 175,039 | ||||||
†Inficon Holding | 574 | 177,964 | ||||||
Kaba Holding | 350 | 176,482 | ||||||
LEM Holding | 253 | 187,650 | ||||||
Partners Group Holding | 500 | 145,004 | ||||||
VZ Holding | 1,150 | 205,539 | ||||||
Total (Cost $1,012,612) | 1,253,570 | |||||||
UNITED KINGDOM – 30.6% | ||||||||
Abcam | 26,000 | 188,284 | ||||||
Ashmore Group | 39,700 | 172,119 | ||||||
AVEVA Group | 8,600 | 176,045 | ||||||
Clarkson | 6,832 | 201,664 | ||||||
Consort Medical | 15,000 | 201,852 | ||||||
Domino Printing Sciences | 14,700 | 150,252 | ||||||
Elementis | 42,800 | 173,210 | ||||||
Fidessa Group | 4,000 | 147,996 | ||||||
†HellermannTyton Group | 26,500 | 129,571 | ||||||
Lancashire Holdings | 18,500 | 160,347 | ||||||
Latchways | 19,500 | 218,787 | ||||||
Rotork | 3,200 | 115,153 | ||||||
Spirax-Sarco Engineering | 2,800 | 124,433 | ||||||
Victrex | 4,400 | 142,085 | ||||||
Total (Cost $2,497,821) | 2,301,798 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $7,546,912) | 7,605,968 | |||||||
TOTAL INVESTMENTS – 101.1% | ||||||||
(Cost $7,546,912) | 7,605,968 | |||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (1.1)% | (79,505 | ) | ||||||
NET ASSETS – 100.0% | $ | 7,526,463 | ||||||
† | New additions in 2014. |
1 | Non-income producing. |
2 | These securities are defined as Level 2 securities due to fair value being based on quoted prices for similar securities. See Notes to Financial Statements. |
3 | Includes securities first acquired in 2014 and less than 1% of net assets. |
4 | A security for which market quotations are not readily available represents 0.0% of net assets for Royce International Micro-Cap Fund. This security has been valued at its fair value under procedures approved by the Fund’s Board of Trustees. This security is defined as a Level 3 security due to the use of significant unobservable inputs in the determination of fair value. See Notes to Financial Statements. |
5 | All or a portion of these securities have been segregated as collateral for short sales. |
Securities of Global/International Funds are categorized by the country of their headquarters, with the exception of exchange-traded funds. | |
Bold indicates a Fund’s 20 largest equity holdings in terms of December 31, 2014, market value. | |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 49 |
Statements of Assets and Liabilities
Royce Select | Royce Micro-Cap | Royce Financial | Royce Select | |||||||||||||
Fund I | Discovery Fund | Services Fund | Fund II | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at value | $ | 36,541,523 | $ | 5,238,073 | $ | 52,105,731 | $ | 4,584,963 | ||||||||
Repurchase agreements (at cost and value) | 1,020,000 | 361,000 | 1,739,000 | 169,000 | ||||||||||||
Cash and foreign currency | 632 | 583 | 4,764 | 873 | ||||||||||||
Receivable for investments sold | 1,897,406 | – | 4 | 44,253 | ||||||||||||
Receivable for capital shares sold | 47,610 | 502 | 109,739 | – | ||||||||||||
Receivable for dividends and interest | 11,919 | 3,283 | 121,543 | 3,505 | ||||||||||||
Prepaid expenses and other assets | 187 | 23 | 341 | 12 | ||||||||||||
Total Assets | 39,519,277 | 5,603,464 | 54,081,122 | 4,802,606 | ||||||||||||
LIABILITIES: | ||||||||||||||||
Securities sold short, at fair value | – | – | – | 71,579 | ||||||||||||
Payable for investments purchased | 217,942 | – | – | 20,131 | ||||||||||||
Payable for capital shares redeemed | – | – | 252,966 | – | ||||||||||||
Payable for dividends and interest | – | – | – | 500 | ||||||||||||
Payable for investment advisory fees | 35,687 | 1,309 | 14,432 | – | ||||||||||||
Payable for trustees’ fees | 577 | 69 | 730 | 18 | ||||||||||||
Payable to brokers for securities sold short | – | – | – | 121,621 | ||||||||||||
Accrued expenses | 44,721 | 26,938 | 105,965 | 13,307 | ||||||||||||
Deferred capital gains tax | – | – | – | 2,421 | ||||||||||||
Total Liabilities | 298,927 | 28,316 | 374,093 | 229,577 | ||||||||||||
Net Assets | $ | 39,220,350 | $ | 5,575,148 | $ | 53,707,029 | $ | 4,573,029 | ||||||||
ANALYSIS OF NET ASSETS: | ||||||||||||||||
Paid-in capital | $ | 31,253,463 | $ | 5,065,991 | $ | 44,922,171 | $ | 4,576,643 | ||||||||
Undistributed net investment income (loss) | – | 84 | 131,205 | (25,157 | ) | |||||||||||
Accumulated net realized gain (loss) on investments and foreign currency | 581,019 | 64,819 | 1,106,223 | (11,757 | ) | |||||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 7,385,868 | 444,254 | 7,547,430 | 33,300 | ||||||||||||
Net Assets | $ | 39,220,350 | $ | 5,575,148 | $ | 53,707,029 | $ | 4,573,029 | ||||||||
Investment Class | $ | 39,220,350 | $ | 4,573,029 | ||||||||||||
Service Class | $ | 5,575,148 | $ | 53,707,029 | ||||||||||||
SHARES OUTSTANDING (unlimited number of $.001 par value): | ||||||||||||||||
Investment Class | 2,270,788 | 459,249 | ||||||||||||||
Service Class | 927,030 | 5,784,542 | ||||||||||||||
NET ASSET VALUES (Net Assets ÷ Shares Outstanding): | ||||||||||||||||
Investment Class1 | $17.27 | $9.96 | ||||||||||||||
Service Class1 | $6.01 | $9.28 | ||||||||||||||
Investments at identified cost | $ | 29,155,654 | $ | 4,793,819 | $ | 44,557,028 | $ | 4,558,628 | ||||||||
Proceeds of short sales | – | – | – | 80,862 | ||||||||||||
Aggregate value of segregated securities | – | – | – | 437,804 | ||||||||||||
1 | Offering and redemption price per share; shares held less than 180 days may be subject to a 1% redemption fee, or a 2% redemption fee (Royce Select Fund II), payable to the Fund. |
50 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Royce European Smaller- | Royce Enterprise | Royce SMid-Cap | Royce Partners | |||||||||||||
Companies Fund | Select Fund | Value Fund | Fund | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at value | $ | 21,606,475 | $ | 2,060,313 | $ | 15,165,086 | $ | 2,346,774 | ||||||||
Repurchase agreements (at cost and value) | 515,000 | 758,000 | 539,000 | 433,000 | ||||||||||||
Cash and foreign currency | 489 | 567 | 965 | 127 | ||||||||||||
Receivable for capital shares sold | 2,133 | – | 141 | 32 | ||||||||||||
Receivable for dividends and interest | 33,815 | 1,768 | 16,177 | 2,851 | ||||||||||||
Prepaid expenses and other assets | 129 | 17 | 51 | 14 | ||||||||||||
Total Assets | 22,158,041 | 2,820,665 | 15,721,420 | 2,782,798 | ||||||||||||
LIABILITIES: | ||||||||||||||||
Payable for capital shares redeemed | 120,926 | – | 25,145 | – | ||||||||||||
Payable for investment advisory fees | – | – | 2,573 | – | ||||||||||||
Payable for trustees’ fees | 391 | 34 | 207 | 35 | ||||||||||||
Accrued expenses | 64,148 | 18,625 | 41,537 | 22,267 | ||||||||||||
Total Liabilities | 185,465 | 18,659 | 69,462 | 22,302 | ||||||||||||
Net Assets | $ | 21,972,576 | $ | 2,802,006 | $ | 15,651,958 | $ | 2,760,496 | ||||||||
ANALYSIS OF NET ASSETS: | ||||||||||||||||
Paid-in capital | $ | 25,788,676 | $ | 2,549,095 | $ | 19,910,147 | $ | 2,171,384 | ||||||||
Undistributed net investment income (loss) | (27,179 | ) | (68 | ) | (1,401 | ) | 2,750 | |||||||||
Accumulated net realized gain (loss) on investments and foreign currency | (407,482 | ) | 14,573 | (4,327,625 | ) | (1,412 | ) | |||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | (3,381,439 | ) | 238,406 | 70,837 | 587,774 | |||||||||||
Net Assets | $ | 21,972,576 | $ | 2,802,006 | $ | 15,651,958 | $ | 2,760,496 | ||||||||
Investment Class | $ | 1,937,881 | $ | 2,802,006 | ||||||||||||
Service Class | 20,034,695 | $ | 15,651,958 | $ | 2,760,496 | |||||||||||
SHARES OUTSTANDING (unlimited number of $.001 par value): | ||||||||||||||||
Investment Class | 237,569 | 241,717 | ||||||||||||||
Service Class | 1,939,744 | 1,116,322 | 199,353 | |||||||||||||
NET ASSET VALUES (Net Assets ÷ Shares Outstanding): | ||||||||||||||||
Investment Class1 | $8.16 | $11.59 | ||||||||||||||
Service Class1 | 10.33 | $14.02 | $13.85 | |||||||||||||
Investments at identified cost | $ | 24,984,280 | $ | 1,821,895 | $ | 15,093,876 | $ | 1,758,908 | ||||||||
1 | Offering and redemption price per share; shares held less than 180 days may be subject to a 1% redemption fee, or a 2% redemption fee (Royce European Smaller-Companies Fund), payable to the Fund. |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 51 |
Statements of Assets and Liabilities
Royce Global | Royce | Royce | ||||||||||||||
Royce Opportunity | Dividend Value | International | International | |||||||||||||
Select Fund | Fund | Micro-Cap Fund | Premier Fund | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at value | $ | 18,918,719 | $ | 6,444,766 | $ | 6,260,821 | $ | 7,605,968 | ||||||||
Repurchase agreements (at cost and value) | 536,000 | 128,000 | 111,000 | – | ||||||||||||
Deposits with brokers for securities sold short | 318,188 | – | – | – | ||||||||||||
Cash and foreign currency | – | – | 21,045 | 35,519 | ||||||||||||
Receivable for investments sold | 262,052 | 287,069 | 31,815 | 39,997 | ||||||||||||
Receivable for capital shares sold | 213,672 | 28 | 148 | 14,040 | ||||||||||||
Receivable for dividends and interest | 9,971 | 16,791 | 10,505 | 22,657 | ||||||||||||
Prepaid expenses and other assets | 115 | 48 | 20 | 82 | ||||||||||||
Total Assets | 20,258,717 | 6,876,702 | 6,435,354 | 7,718,263 | ||||||||||||
LIABILITIES: | ||||||||||||||||
Securities sold short, at fair value | 941,847 | – | – | – | ||||||||||||
Payable for investments purchased | 102,146 | – | – | 31,369 | ||||||||||||
Payable for capital shares redeemed | 10,327 | – | – | 112,792 | ||||||||||||
Payable for investment advisory fees | 12,210 | – | – | – | ||||||||||||
Payable for trustees’ fees | 262 | 119 | 71 | 165 | ||||||||||||
Payable to custodian for overdrawn balance | 8,749 | 5,764 | – | – | ||||||||||||
Accrued expenses | 22,837 | 30,797 | 20,752 | 26,620 | ||||||||||||
Deferred capital gains tax | – | – | 4,581 | 20,854 | ||||||||||||
Total Liabilities | 1,098,378 | 36,680 | 25,404 | 191,800 | ||||||||||||
Net Assets | $ | 19,160,339 | $ | 6,840,022 | $ | 6,409,950 | $ | 7,526,463 | ||||||||
ANALYSIS OF NET ASSETS: | ||||||||||||||||
Paid-in capital | $ | 18,065,698 | $ | 7,268,317 | $ | 7,347,123 | $ | 8,130,716 | ||||||||
Undistributed net investment income (loss) | (46 | ) | (690 | ) | (33,864 | ) | (6,992 | ) | ||||||||
Accumulated net realized gain (loss) on investments and foreign currency | (187,820 | ) | (181,454 | ) | (425,837 | ) | (633,203 | ) | ||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 1,282,507 | (246,151 | ) | (477,472 | ) | 35,942 | ||||||||||
Net Assets | $ | 19,160,339 | $ | 6,840,022 | $ | 6,409,950 | $ | 7,526,463 | ||||||||
Investment Class | $ | 18,221,213 | $ | 3,481,708 | ||||||||||||
Service Class | 939,126 | $ | 6,840,022 | $ | 6,409,950 | 4,044,755 | ||||||||||
SHARES OUTSTANDING (unlimited number of $.001 par value): | ||||||||||||||||
Investment Class | 1,102,687 | 399,805 | ||||||||||||||
Service Class | 112,253 | 689,486 | 663,391 | 393,346 | ||||||||||||
NET ASSET VALUES (Net Assets ÷ Shares Outstanding): | ||||||||||||||||
Investment Class1 | $16.52 | $8.71 | ||||||||||||||
Service Class1 | 8.37 | $9.92 | $9.66 | 10.28 | ||||||||||||
Investments at identified cost | $ | 17,606,187 | $ | 6,690,283 | $ | 6,734,046 | $ | 7,546,912 | ||||||||
Proceeds of short sales | 911,823 | – | – | – | ||||||||||||
Aggregate value of segregated securities | 1,750,133 | – | – | – | ||||||||||||
1 | Offering and redemption price per share; shares held less than 180 days may be subject to a 1% redemption fee (Royce Opportunity Select Fund), or a 2% redemption fee, payable to the Fund. |
52 | The Royce Funds 2014 Annual 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 Micro-Cap Discovery Fund | Royce Financial Services Fund | ||||||||||||||||||||||||||
Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | |||||||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||||||
Net investment income (loss) | $ | (66,508 | ) | $ | (173,025 | ) | $ | (2,759 | ) | $ | (17,307 | ) | $ | 534,686 | $ | 174,781 | ||||||||||||
Net realized gain (loss) on investments and foreign currency | 5,543,536 | 5,751,191 | 646,262 | 751,485 | 3,400,962 | 1,875,121 | ||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (5,445,016 | ) | 5,364,056 | (593,485 | ) | 853,810 | (1,908,778 | ) | 7,876,724 | |||||||||||||||||||
Net increase (decrease) in net assets from investment operations | 32,012 | 10,942,222 | 50,018 | 1,587,988 | 2,026,870 | 9,926,626 | ||||||||||||||||||||||
DISTRIBUTIONS: | ||||||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||||
Investment Class | – | (6,345 | ) | |||||||||||||||||||||||||
Service Class | – | – | (368,093 | ) | (82,981 | ) | ||||||||||||||||||||||
Net realized gain on investments and foreign currency | ||||||||||||||||||||||||||||
Investment Class | (5,238,043 | ) | (4,865,772 | ) | ||||||||||||||||||||||||
Service Class | (725,446 | ) | (164,762 | ) | (3,550,372 | ) | – | |||||||||||||||||||||
Total distributions | (5,238,043 | ) | (4,872,117 | ) | (725,446 | ) | (164,762 | ) | (3,918,465 | ) | (82,981 | ) | ||||||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||||||
Net capital share transactions | ||||||||||||||||||||||||||||
Investment Class | (2,812,871 | ) | (8,691,735 | ) | ||||||||||||||||||||||||
Service Class | 433,264 | (75,668 | ) | 7,978,123 | 20,843,034 | |||||||||||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||||||
Investment Class | 1,411 | 3,350 | ||||||||||||||||||||||||||
Service Class | 1,114 | 414 | 27,684 | 17,751 | ||||||||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | (2,811,460 | ) | (8,688,385 | ) | 434,378 | (75,254 | ) | 8,005,807 | 20,860,785 | |||||||||||||||||||
Net Increase (Decrease) In Net Assets | (8,017,491 | ) | (2,618,280 | ) | (241,050 | ) | 1,347,972 | 6,114,212 | 30,704,430 | |||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||||||
Beginning of year | 47,237,841 | 49,856,121 | 5,816,198 | 4,468,226 | 47,592,817 | 16,888,387 | ||||||||||||||||||||||
End of year | $ | 39,220,350 | $ | 47,237,841 | $ | 5,575,148 | $ | 5,816,198 | $ | 53,707,029 | $ | 47,592,817 | ||||||||||||||||
Undistributed Net Investment Income (Loss) at End of Year | $ | – | $ | (122 | ) | $ | 84 | $ | – | $ | 131,205 | $ | 128,921 | |||||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 53 |
Statements of Changes in Net Assets
Royce European Smaller- | ||||||||||||||||||||||||||||
Royce Select Fund II | Companies Fund | Royce Enterprise Select Fund | ||||||||||||||||||||||||||
Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | |||||||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||||||
Net investment income (loss) | $ | 34,712 | $ | 38,380 | $ | 241,006 | $ | 119,035 | $ | (8,948 | ) | $ | (8,011 | ) | ||||||||||||||
Net realized gain (loss) on investments and foreign currency | 376,792 | 710,266 | 1,470,960 | 1,143,566 | 212,359 | 301,701 | ||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (429,515 | ) | 163,490 | (6,684,254 | ) | 2,645,740 | (64,251 | ) | 192,389 | |||||||||||||||||||
Net increase (decrease) in net assets from investment operations | (18,011 | ) | 912,136 | (4,972,288 | ) | 3,908,341 | 139,160 | 486,079 | ||||||||||||||||||||
DISTRIBUTIONS: | ||||||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||||
Investment Class | (93,463 | ) | (85,215 | ) | (40,603 | ) | – | (2,071 | ) | |||||||||||||||||||
Service Class | (248,801 | ) | (232,856 | ) | ||||||||||||||||||||||||
Net realized gain on investments and foreign currency | ||||||||||||||||||||||||||||
Investment Class | (611,541 | ) | (416,296 | ) | (27,878 | ) | (256,485 | ) | (228,780 | ) | ||||||||||||||||||
Service Class | (220,072 | ) | – | |||||||||||||||||||||||||
Total distributions | (705,004 | ) | (501,511 | ) | (537,354 | ) | (232,856 | ) | (256,485 | ) | (230,851 | ) | ||||||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||||||
Net capital share transactions | ||||||||||||||||||||||||||||
Investment Class | 413,997 | 850,978 | 2,436,957 | 289,352 | 1,075,981 | |||||||||||||||||||||||
Service Class | (3,017,743 | ) | 8,500,963 | |||||||||||||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||||||
Investment Class | 352 | 34 | – | 47 | – | |||||||||||||||||||||||
Service Class | 17,034 | 15,318 | ||||||||||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 414,349 | 851,012 | (563,752 | ) | 8,516,281 | 289,399 | 1,075,981 | |||||||||||||||||||||
Net Increase (Decrease) In Net Assets | (308,666 | ) | 1,261,637 | (6,073,394 | ) | 12,191,766 | 172,074 | 1,331,209 | ||||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||||||
Beginning of year | 4,881,695 | 3,620,058 | 28,045,970 | 15,854,204 | 2,629,932 | 1,298,723 | ||||||||||||||||||||||
End of year | $ | 4,573,029 | $ | 4,881,695 | $ | 21,972,576 | $ | 28,045,970 | $ | 2,802,006 | $ | 2,629,932 | ||||||||||||||||
Undistributed Net Investment Income (Loss) at End of Year | $ | (25,157 | ) | $ | (26,152 | ) | $ | (27,179 | ) | $ | (183,963 | ) | $ | (68 | ) | $ | (884 | ) | ||||||||||
54 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014
Royce SMid-Cap Value Fund | Royce Partners Fund | Royce Opportunity Select Fund | ||||||||||||||||||||||||||
Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | |||||||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||||||
Net investment income (loss) | $ | 59,730 | $ | 15,704 | $ | 11,288 | $ | 16,343 | $ | (126,420 | ) | $ | (66,078 | ) | ||||||||||||||
Net realized gain (loss) on investments and foreign currency | 1,126,610 | 488,966 | 32,246 | 276,797 | 217,534 | 755,058 | ||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (1,954,626 | ) | 1,788,073 | (66,198 | ) | 389,385 | (1,518,331 | ) | 2,394,936 | |||||||||||||||||||
Net increase (decrease) in net assets from investment operations | (768,286 | ) | 2,292,743 | (22,664 | ) | 682,525 | (1,427,217 | ) | 3,083,916 | |||||||||||||||||||
DISTRIBUTIONS: | ||||||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||||
Investment Class | – | – | ||||||||||||||||||||||||||
Service Class | (59,401 | ) | (16,014 | ) | (8,247 | ) | (20,237 | ) | – | |||||||||||||||||||
Net realized gain on investments and foreign | ||||||||||||||||||||||||||||
currency | ||||||||||||||||||||||||||||
Investment Class | (557,908 | ) | (510,854 | ) | ||||||||||||||||||||||||
Service Class | – | – | (83,955 | ) | (225,475 | ) | (46,594 | ) | ||||||||||||||||||||
Total distributions | (59,401 | ) | (16,014 | ) | (92,202 | ) | (245,712 | ) | (604,502 | ) | (510,854 | ) | ||||||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||||||
Net capital share transactions | ||||||||||||||||||||||||||||
Investment Class | 2,700,474 | 11,683,077 | ||||||||||||||||||||||||||
Service Class | 4,921,123 | (1,897,564 | ) | 74,254 | 280,953 | 1,008,378 | ||||||||||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||||||
Investment Class | 20,852 | 6,573 | ||||||||||||||||||||||||||
Service Class | 38,269 | 647 | 75 | 218 | 1,239 | |||||||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 4,959,392 | (1,896,917 | ) | 74,329 | 281,171 | 3,730,943 | 11,689,650 | |||||||||||||||||||||
Net Increase (Decrease) In Net Assets | 4,131,705 | 379,812 | (40,537 | ) | 717,984 | 1,699,224 | 14,262,712 | |||||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||||||
Beginning of year | 11,520,253 | 11,140,441 | 2,801,033 | 2,083,049 | 17,461,115 | 3,198,403 | ||||||||||||||||||||||
End of year | $ | 15,651,958 | $ | 11,520,253 | $ | 2,760,496 | $ | 2,801,033 | $ | 19,160,339 | $ | 17,461,115 | ||||||||||||||||
Undistributed Net Investment Income (Loss) at End of Year | $ | (1,401 | ) | $ | – | $ | 2,750 | $ | 235 | $ | (46 | ) | $ | 294 | ||||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 55 |
Statements of Changes in Net Assets
Royce International | ||||||||||||||||||||||||||||
Royce Global Dividend Value Fund | Micro-Cap Fund | Royce International Premier Fund | ||||||||||||||||||||||||||
Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | Year Ended 12/31/14 | Year Ended 12/31/13 | |||||||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||||||
Net investment income (loss) | $ | 171,242 | $ | 144,174 | $ | 47,007 | $ | 56,707 | $ | 156,675 | $ | 81,523 | ||||||||||||||||
Net realized gain (loss) on investments and foreign currency | 118,429 | 319,945 | 406,568 | 186,907 | (79,151 | ) | 340,325 | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (915,746 | ) | 726,373 | (732,114 | ) | 556,066 | (1,127,130 | ) | 852,808 | |||||||||||||||||||
Net increase (decrease) in net assets from investment operations | (626,075 | ) | 1,190,492 | (278,539 | ) | 799,680 | (1,049,606 | ) | 1,274,656 | |||||||||||||||||||
DISTRIBUTIONS: | ||||||||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||||
Investment Class | (64,490 | ) | ||||||||||||||||||||||||||
Service Class | (183,211 | ) | (207,184 | ) | (91,072 | ) | (100,087 | ) | (80,804 | ) | (129,813 | ) | ||||||||||||||||
Net realized gain on investments and foreign | ||||||||||||||||||||||||||||
currency | ||||||||||||||||||||||||||||
Investment Class | (126,090 | ) | ||||||||||||||||||||||||||
Service Class | (233,603 | ) | (182,756 | ) | – | – | (214,622 | ) | – | |||||||||||||||||||
Total distributions | (416,814 | ) | (389,940 | ) | (91,072 | ) | (100,087 | ) | (486,006 | ) | (129,813 | ) | ||||||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||||||
Net capital share transactions | ||||||||||||||||||||||||||||
Investment Class | 4,170,312 | |||||||||||||||||||||||||||
Service Class | (1,673,700 | ) | 2,041,765 | 1,569,954 | (98,141 | ) | (4,578,287 | ) | 1,879,090 | |||||||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||||||
Investment Class | 103 | |||||||||||||||||||||||||||
Service Class | 182 | 5,944 | 945 | 3,765 | 367 | 1,734 | ||||||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | (1,673,518 | ) | 2,047,709 | 1,570,899 | (94,376 | ) | (407,505 | ) | 1,880,824 | |||||||||||||||||||
Net Increase (Decrease) In Net Assets | (2,716,407 | ) | 2,848,261 | 1,201,288 | 605,217 | (1,943,117 | ) | 3,025,667 | ||||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||||||
Beginning of year | 9,556,429 | 6,708,168 | 5,208,662 | 4,603,445 | 9,469,580 | 6,443,913 | ||||||||||||||||||||||
End of year | $ | 6,840,022 | $ | 9,556,429 | $ | 6,409,950 | $ | 5,208,662 | $ | 7,526,463 | $ | 9,469,580 | ||||||||||||||||
Undistributed Net Investment Income (Loss) at End of Year | $ | (690 | ) | $ | (58,505 | ) | $ | (33,864 | ) | $ | (33,960 | ) | $ | (6,992 | ) | $ | (75,124 | ) | ||||||||||
56 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Statements of Operations | Year Ended December 31, 2014 |
Royce European | ||||||||||||||||||||
Royce Select | Royce Micro-Cap | Royce Financial | Royce Select | Smaller-Companies | ||||||||||||||||
Fund I | Discovery Fund | Services Fund | Fund II | Fund | ||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||
INCOME: | ||||||||||||||||||||
Dividends | $ | 510,861 | $ | 78,378 | $ | 1,441,009 | $ | 116,110 | $ | 861,938 | ||||||||||
Foreign withholding tax | (18,120 | ) | (169 | ) | (34,626 | ) | (4,956 | ) | (107,234 | ) | ||||||||||
Total income | 492,741 | 78,209 | 1,406,383 | 111,154 | 754,704 | |||||||||||||||
EXPENSES: | ||||||||||||||||||||
Investment advisory fees | 453,215 | 54,341 | 585,032 | 61,525 | 382,771 | |||||||||||||||
Distribution fees | – | 13,585 | 146,258 | – | 71,959 | |||||||||||||||
Audit | 30,241 | 16,006 | 27,170 | 22,630 | 33,099 | |||||||||||||||
Shareholder servicing | 29,088 | 10,841 | 92,437 | 8,580 | 60,428 | |||||||||||||||
Registration | 16,404 | 15,018 | 20,562 | 8,358 | 40,067 | |||||||||||||||
Custody | 14,670 | 9,260 | 41,276 | 42,849 | 40,989 | |||||||||||||||
Shareholder reports | 6,033 | 2,811 | 55,409 | 325 | 27,627 | |||||||||||||||
Administrative and office facilities | 5,347 | 639 | 6,507 | 559 | 3,606 | |||||||||||||||
Trustees’ fees | 2,077 | 249 | 2,634 | 178 | 1,434 | |||||||||||||||
Legal | 410 | 49 | 486 | 43 | 814 | |||||||||||||||
Dividends on securities sold short | – | – | – | 1,099 | – | |||||||||||||||
Interest expense | – | – | – | 2,005 | – | |||||||||||||||
Other expenses | 1,770 | 705 | 2,377 | 6,423 | 1,878 | |||||||||||||||
Total expenses | 559,255 | 123,504 | 980,148 | 154,574 | 664,672 | |||||||||||||||
Compensating balance credits | (6 | ) | (9 | ) | (42 | ) | (1 | ) | (29 | ) | ||||||||||
Fees waived by investment adviser and distributor | – | (42,527 | ) | (108,409 | ) | (61,525 | ) | (39,450 | ) | |||||||||||
Expenses reimbursed by investment adviser | – | – | – | (16,606 | ) | (111,495 | ) | |||||||||||||
Net expenses | 559,249 | 80,968 | 871,697 | 76,442 | 513,698 | |||||||||||||||
Net investment income (loss) | (66,508 | ) | (2,759 | ) | 534,686 | 34,712 | 241,006 | |||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | ||||||||||||||||||||
NET REALIZED GAIN (LOSS): | ||||||||||||||||||||
Investments | 5,543,084 | 646,262 | 3,443,518 | 387,892 | 1,486,631 | |||||||||||||||
Foreign currency transactions | 452 | – | (42,556 | ) | (11,100 | ) | (15,671 | ) | ||||||||||||
NET CHANGE IN UNREALIZED APPRECIATION | ||||||||||||||||||||
(DEPRECIATION): | ||||||||||||||||||||
Investments and foreign currency translations | (5,445,007 | ) | (593,485 | ) | (1,929,383 | ) | (427,191 | ) | (6,680,978 | ) | ||||||||||
Other assets and liabilities denominated in foreign currency | (9 | ) | – | 20,605 | (2,324 | ) | (3,276 | ) | ||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | 98,520 | 52,777 | 1,492,184 | (52,723 | ) | (5,213,294 | ) | |||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | 32,012 | $ | 50,018 | $ | 2,026,870 | $ | (18,011 | ) | $ | (4,972,288 | ) | ||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 57 |
Statements of Operations
Royce Global | ||||||||||||||||||||
Royce Enterprise | Royce SMid-Cap | Royce Partners | Royce Opportunity | Dividend Value | ||||||||||||||||
Select Fund | Value Fund | Fund | Select Fund | Fund | ||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||
INCOME: | ||||||||||||||||||||
Dividends | $ | 25,920 | $ | 299,458 | $ | 46,833 | $ | 146,348 | $ | 356,838 | ||||||||||
Foreign withholding tax | (782 | ) | (15,176 | ) | (1,955 | ) | (2,518 | ) | (27,336 | ) | ||||||||||
Total income | 25,138 | 284,282 | 44,878 | 143,830 | 329,502 | |||||||||||||||
EXPENSES: | ||||||||||||||||||||
Investment advisory fees | 27,488 | 166,335 | 23,793 | 210,763 | 117,056 | |||||||||||||||
Distribution fees | – | 41,584 | 6,998 | 817 | 23,411 | |||||||||||||||
Audit | 16,003 | 16,016 | 19,169 | 28,848 | 22,515 | |||||||||||||||
Shareholder servicing | 6,280 | 18,784 | 6,415 | 29,253 | 16,296 | |||||||||||||||
Registration | 7,496 | 21,809 | 7,758 | 34,812 | 18,639 | |||||||||||||||
Custody | 9,966 | 22,802 | 20,138 | 17,754 | 39,839 | |||||||||||||||
Shareholder reports | 416 | 12,176 | 830 | 12,857 | 4,901 | |||||||||||||||
Administrative and office facilities | 311 | 1,626 | 324 | 2,366 | 1,102 | |||||||||||||||
Trustees’ fees | 123 | 671 | 127 | 950 | 434 | |||||||||||||||
Legal | 23 | 123 | 24 | 183 | 84 | |||||||||||||||
Dividends on securities sold short | – | – | – | 4,347 | – | |||||||||||||||
Interest expense | 1 | – | – | 3,139 | – | |||||||||||||||
Other expenses | 630 | 885 | 638 | 10,944 | 850 | |||||||||||||||
Total expenses | 68,737 | 302,811 | 86,214 | 357,033 | 245,127 | |||||||||||||||
Compensating balance credits | (1 | ) | (7 | ) | (1 | ) | (12 | ) | (4 | ) | ||||||||||
Fees waived by investment adviser and distributor | (27,488 | ) | (78,252 | ) | (23,793 | ) | (9,238 | ) | (86,863 | ) | ||||||||||
Expenses reimbursed by investment adviser | (7,162 | ) | – | (28,830 | ) | (77,533 | ) | – | ||||||||||||
Net expenses | 34,086 | 224,552 | 33,590 | 270,250 | 158,260 | |||||||||||||||
Net investment income (loss) | (8,948 | ) | 59,730 | 11,288 | (126,420 | ) | 171,242 | |||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | ||||||||||||||||||||
NET REALIZED GAIN (LOSS): | ||||||||||||||||||||
Investments | 212,614 | 1,128,340 | 32,525 | 217,652 | 122,079 | |||||||||||||||
Foreign currency transactions | (255 | ) | (1,730 | ) | (279 | ) | (118 | ) | (3,650 | ) | ||||||||||
NET CHANGE IN UNREALIZED APPRECIATION | ||||||||||||||||||||
(DEPRECIATION): | ||||||||||||||||||||
Investments and foreign currency translations | (64,239 | ) | (1,954,105 | ) | (66,080 | ) | (1,518,330 | ) | (915,065 | ) | ||||||||||
Other assets and liabilities denominated in foreign currency | (12 | ) | (521 | ) | (118 | ) | (1 | ) | (681 | ) | ||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | 148,108 | (828,016 | ) | (33,952 | ) | (1,300,797 | ) | (797,317 | ) | |||||||||||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | 139,160 | $ | (768,286 | ) | $ | (22,664 | ) | $ | (1,427,217 | ) | $ | (626,075 | ) | ||||||
58 | The Royce Funds 2014 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Year Ended December 31, 2014
Royce International | Royce International | |||||||
Micro-Cap Fund | Premier Fund | |||||||
INVESTMENT INCOME: | ||||||||
INCOME: | ||||||||
Dividends | $ | 152,220 | $ | 393,260 | ||||
Foreign withholding tax | (8,252 | ) | (23,035 | ) | ||||
Total income | 143,968 | 370,225 | ||||||
EXPENSES: | ||||||||
Investment advisory fees | 74,585 | 162,869 | ||||||
Distribution fees | 14,344 | 25,834 | ||||||
Audit | 27,605 | 37,235 | ||||||
Shareholder servicing | 11,946 | 27,543 | ||||||
Registration | 18,689 | 38,217 | ||||||
Custody | 49,143 | 36,979 | ||||||
Shareholder reports | 3,056 | 5,816 | ||||||
Administrative and office facilities | 610 | 1,503 | ||||||
Trustees’ fees | 244 | 601 | ||||||
Legal | 46 | 655 | ||||||
Other expenses | 837 | 1,465 | ||||||
Total expenses | 201,105 | 338,717 | ||||||
Compensating balance credits | (5 | ) | (5 | ) | ||||
Fees waived by investment adviser and distributor | (75,159 | ) | (72,039 | ) | ||||
Expenses reimbursed by investment adviser | (28,980 | ) | (53,123 | ) | ||||
Net expenses | 96,961 | 213,550 | ||||||
Net investment income (loss) | 47,007 | 156,675 | ||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | ||||||||
NET REALIZED GAIN (LOSS): | ||||||||
Investments | 420,111 | (56,036 | ) | |||||
Foreign currency transactions | (13,543 | ) | (23,115 | ) | ||||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | ||||||||
Investments and foreign currency translations | (730,940 | ) | (1,104,632 | ) | ||||
Other assets and liabilities denominated in foreign currency | (1,174 | ) | (22,498 | ) | ||||
Net realized and unrealized gain (loss) on investments and foreign currency | (325,546 | ) | (1,206,281 | ) | ||||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | (278,539 | ) | $ | (1,049,606 | ) | ||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 59 |
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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce Select Fund I–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 19.66 | $ | (0.03 | ) | $ | 0.02 | $ | (0.01 | ) | $ | – | $ | (2.38 | ) | $ | – | $ | (2.38 | ) | $ | – | $ | 17.27 | 0.23 | % | $ | 39,220 | 1.23 | % | 1.23 | % | 1.23 | % | (0.15 | )% | 40 | % | ||||||||||||||||||||||
2013 | 17.40 | (0.07 | ) | 4.48 | 4.41 | (0.00 | ) | (2.15 | ) | – | (2.15 | ) | – | 19.66 | 25.99 | 47,238 | 1.20 | 1.20 | 1.20 | (0.36 | ) | 56 | ||||||||||||||||||||||||||||||||||||||
2012 | 16.93 | 0.31 | 1.95 | 2.26 | (0.30 | ) | (1.49 | ) | – | (1.79 | ) | – | 17.40 | 13.68 | 49,856 | 0.00 | 0.00 | 0.00 | 1.68 | 54 | ||||||||||||||||||||||||||||||||||||||||
2011 | 20.32 | (0.16 | ) | (0.67 | ) | (0.83 | ) | – | (2.56 | ) | – | (2.56 | ) | – | 16.93 | (3.61 | ) | 47,345 | 1.45 | 1.45 | 1.45 | (0.78 | ) | 63 | ||||||||||||||||||||||||||||||||||||
2010 | 17.42 | (0.23 | ) | 3.39 | 3.16 | – | (0.26 | ) | – | (0.26 | ) | – | 20.32 | 18.15 | 58,788 | 2.37 | 2.37 | 2.37 | (1.26 | ) | 49 | |||||||||||||||||||||||||||||||||||||||
Royce Micro-Cap Discovery Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 6.87 | $ | (0.00 | ) | $ | 0.04 | $ | 0.04 | $ | – | $ | (0.90 | ) | $ | – | $ | (0.90 | ) | $ | – | $ | 6.01 | 0.97 | % | $ | 5,575 | 2.27 | % | 2.27 | % | 1.49 | % | (0.05 | )% | 85 | % | |||||||||||||||||||||||
2013 | 5.23 | (0.02 | ) | 1.86 | 1.84 | – | (0.20 | ) | – | (0.20 | ) | – | 6.87 | 35.29 | 5,816 | 2.50 | 2.50 | 1.49 | (0.33 | ) | 81 | |||||||||||||||||||||||||||||||||||||||
2012 | 5.12 | 0.04 | 0.12 | 0.16 | (0.05 | ) | – | – | (0.05 | ) | – | 5.23 | 3.10 | 4,468 | 2.94 | 2.94 | 1.49 | 0.85 | 87 | |||||||||||||||||||||||||||||||||||||||||
2011 | 5.24 | (0.04 | ) | (0.09 | ) | (0.13 | ) | (0.00 | ) | – | – | (0.00 | ) | 0.01 | 5.12 | (2.24 | ) | 3,621 | 2.99 | 2.99 | 1.49 | (0.71 | ) | 72 | ||||||||||||||||||||||||||||||||||||
2010 | 4.38 | (0.01 | ) | 0.87 | 0.86 | – | – | – | – | – | 5.24 | 19.63 | 3,637 | 3.04 | 3.04 | 1.49 | (0.19 | ) | 105 | |||||||||||||||||||||||||||||||||||||||||
Royce Financial Services Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 9.68 | $ | 0.09 | $ | 0.22 | $ | 0.31 | $ | (0.06 | ) | $ | (0.65 | ) | $ | – | $ | (0.71 | ) | $ | – | $ | 9.28 | 3.45 | % | $ | 53,707 | 1.68 | % | 1.68 | % | 1.49 | % | 0.91 | % | 41 | % | |||||||||||||||||||||||
2013 | 6.83 | 0.04 | 2.82 | 2.86 | (0.02 | ) | – | – | (0.02 | ) | 0.01 | 9.68 | 42.00 | 47,593 | 1.89 | 1.89 | 1.49 | 0.59 | 23 | |||||||||||||||||||||||||||||||||||||||||
2012 | 5.71 | 0.10 | 1.08 | 1.18 | (0.06 | ) | – | – | (0.06 | ) | – | 6.83 | 20.72 | 16,888 | 1.87 | 1.87 | 1.49 | 1.53 | 26 | |||||||||||||||||||||||||||||||||||||||||
2011 | 6.50 | 0.05 | (0.78 | ) | (0.73 | ) | (0.06 | ) | – | – | (0.06 | ) | – | 5.71 | (11.29 | ) | 14,096 | 1.84 | 1.84 | 1.49 | 0.73 | 23 | ||||||||||||||||||||||||||||||||||||||
2010 | 5.57 | 0.07 | 0.96 | 1.03 | (0.10 | ) | – | – | (0.10 | ) | – | 6.50 | 18.45 | 14,688 | 1.94 | 1.94 | 1.49 | 1.14 | 16 | |||||||||||||||||||||||||||||||||||||||||
Royce Select Fund II–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 11.79 | $ | 0.09 | $ | (0.18 | ) | $ | (0.09 | ) | $ | (0.23 | ) | $ | (1.51 | ) | $ | – | $ | (1.74 | ) | $ | – | $ | 9.96 | (0.24 | )% | $ | 4,573 | 3.14 | % | 3.14 | % | 1.55 | % | 0.71 | % | 200 | % | |||||||||||||||||||||
2013 | 10.68 | 0.10 | 2.35 | 2.45 | (0.23 | ) | (1.11 | ) | – | (1.34 | ) | – | 11.79 | 23.51 | 4,882 | 1.65 | 1.65 | 0.91 | 0.89 | 159 | ||||||||||||||||||||||||||||||||||||||||
2012 | 9.95 | 0.20 | 1.19 | 1.39 | (0.17 | ) | (0.49 | ) | – | (0.66 | ) | – | 10.68 | 14.23 | 3,620 | 0.19 | 0.19 | 0.19 | 1.86 | 123 | ||||||||||||||||||||||||||||||||||||||||
2011 | 13.90 | (0.01 | ) | (2.04 | ) | (2.05 | ) | – | (1.90 | ) | – | (1.90 | ) | – | 9.95 | (14.35 | ) | 3,420 | 1.29 | 1.29 | 1.29 | (0.09 | ) | 153 | ||||||||||||||||||||||||||||||||||||
2010 | 11.62 | (0.18 | ) | 2.60 | 2.42 | (0.00 | ) | (0.15 | ) | – | (0.15 | ) | 0.01 | 13.90 | 20.96 | 5,141 | 2.77 | 2.77 | 2.77 | (1.47 | ) | 126 | ||||||||||||||||||||||||||||||||||||||
Royce European Smaller-Companies Fund–Investment Class a | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.00 | $ | 0.07 | $ | (1.63 | ) | $ | (1.56 | ) | $ | (0.17 | ) | $ | (0.11 | ) | $ | – | $ | (0.28 | ) | $ | – | $ | 8.16 | (15.58 | )%1 | $ | 1,938 | 3.13 | %2 | 3.13 | %2 | 1.44 | %2 | 1.17 | %2 | 65 | % | |||||||||||||||||||||
Royce European Smaller-Companies Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 12.42 | $ | 0.11 | $ | (1.97 | ) | $ | (1.86 | ) | $ | (0.13 | ) | $ | (0.11 | ) | $ | – | $ | (0.24 | ) | $ | 0.01 | $ | 10.33 | (14.86 | )% | $ | 20,035 | 2.11 | % | 2.11 | % | 1.69 | % | 0.76 | % | 65 | % | |||||||||||||||||||||
2013 | 10.37 | 0.04 | 2.11 | 2.15 | (0.11 | ) | – | – | (0.11 | ) | 0.01 | 12.42 | 20.83 | 28,046 | 2.26 | 2.26 | 1.69 | 0.58 | 53 | |||||||||||||||||||||||||||||||||||||||||
2012 | 8.50 | 0.14 | 1.88 | 2.02 | (0.15 | ) | – | – | (0.15 | ) | – | 10.37 | 23.83 | 15,854 | 2.13 | 2.13 | 1.69 | 1.29 | 22 | |||||||||||||||||||||||||||||||||||||||||
2011 | 10.79 | 0.10 | (2.31 | ) | (2.21 | ) | (0.10 | ) | – | – | (0.10 | ) | 0.02 | 8.50 | (20.32 | ) | 15,918 | 2.09 | 2.09 | 1.69 | 0.95 | 36 | ||||||||||||||||||||||||||||||||||||||
2010 | 8.06 | 0.03 | 2.79 | 2.82 | (0.10 | ) | – | – | (0.10 | ) | 0.01 | 10.79 | 35.20 | 15,369 | 2.57 | 2.57 | 1.69 | 0.70 | 32 | |||||||||||||||||||||||||||||||||||||||||
Royce Enterprise Select Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 12.12 | $ | (0.04 | ) | $ | 0.65 | $ | 0.61 | $ | – | $ | (1.14 | ) | $ | – | $ | (1.14 | ) | $ | – | $ | 11.59 | 5.22 | % | $ | 2,802 | 2.50 | % | 2.50 | % | 1.24 | % | (0.33 | )% | 81 | % | |||||||||||||||||||||||
2013 | 10.36 | (0.05 | ) | 2.98 | 2.93 | (0.01 | ) | (1.16 | ) | – | (1.17 | ) | – | 12.12 | 28.68 | 2,630 | 3.08 | 3.08 | 1.24 | (0.40 | ) | 154 | ||||||||||||||||||||||||||||||||||||||
2012 | 9.88 | 0.02 | 1.51 | 1.53 | (0.00 | ) | (1.05 | ) | – | (1.05 | ) | – | 10.36 | 15.68 | 1,299 | 0.98 | 2 | 0.98 | 2 | 0.81 | 2 | 0.18 | 2 | 127 | ||||||||||||||||||||||||||||||||||||
2011 | 10.43 | (0.04 | ) | 0.09 | 0.05 | – | (0.60 | ) | – | (0.60 | ) | – | 9.88 | 0.66 | 1,123 | 1.31 | 1.31 | 1.31 | (0.42 | ) | 136 | |||||||||||||||||||||||||||||||||||||||
2010 | 8.95 | 0.05 | 1.49 | 1.54 | (0.06 | ) | – | – | (0.06 | ) | – | 10.43 | 17.22 | 1,158 | 0.70 | 0.70 | 0.70 | 0.50 | 166 | |||||||||||||||||||||||||||||||||||||||||
60 | The Royce Funds 2014 Annual 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 and | Ratio of Expenses to Average Net Assets | Ratio of Net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Unrealized Gain (Loss) on Investments and Foreign Currency | Total from Investment Operations | Distributions from Net Investment Income | Distributions from Net Realized Gain on Investments and Foreign Currency | Distributions from Return of Capital | 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 | Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||||||||||||||||||
Royce SMid-Cap Value Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.31 | $ | 0.05 | $ | (0.32 | ) | $ | (0.27 | ) | $ | (0.05 | ) | $ | – | $ | – | $ | (0.05 | ) | $ | 0.03 | $ | 14.02 | (1.68 | )% | $ | 15,652 | 1.82 | % | 1.82 | % | 1.35 | % | 0.36 | % | 41 | % | ||||||||||||||||||||||
2013 | 11.66 | 0.02 | 2.65 | 2.67 | (0.02 | ) | – | – | (0.02 | ) | – | 14.31 | 22.91 | 11,520 | 2.20 | 2.20 | 1.35 | 0.14 | 31 | |||||||||||||||||||||||||||||||||||||||||
2012 | 10.10 | (0.00 | ) | 1.55 | 1.55 | – | – | – | – | 0.01 | 11.66 | 15.45 | 11,140 | 1.90 | 1.90 | 1.35 | (0.03 | ) | 46 | |||||||||||||||||||||||||||||||||||||||||
2011 | 11.44 | (0.06 | ) | (1.27 | ) | (1.33 | ) | (0.02 | ) | – | – | (0.02 | ) | 0.01 | 10.10 | (11.57 | ) | 10,327 | 1.95 | 1.95 | 1.49 | (0.54 | ) | 54 | ||||||||||||||||||||||||||||||||||||
2010 | 9.08 | (0.03 | ) | 2.39 | 2.36 | – | – | – | – | – | 11.44 | 25.99 | 6,195 | 2.40 | 2.40 | 1.49 | (0.26 | ) | 126 | |||||||||||||||||||||||||||||||||||||||||
Royce Partners Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 14.46 | $ | 0.06 | $ | (0.19 | ) | $ | (0.13 | ) | $ | (0.04 | ) | $ | (0.44 | ) | $ | – | $ | (0.48 | ) | $ | – | $ | 13.85 | (0.85 | )% | $ | 2,760 | 3.08 | % | 3.08 | % | 1.20 | % | 0.40 | % | 8 | % | |||||||||||||||||||||
2013 | 12.04 | 0.09 | 3.73 | 3.82 | (0.12 | ) | (1.28 | ) | – | (1.40 | ) | – | 14.46 | 32.22 | 2,801 | 4.06 | 4.06 | 1.35 | 0.66 | 53 | ||||||||||||||||||||||||||||||||||||||||
2012 | 10.37 | 0.04 | 2.10 | 2.14 | (0.01 | ) | (0.46 | ) | – | (0.47 | ) | – | 12.04 | 20.74 | 2,083 | 4.83 | 4.83 | 1.35 | 0.33 | 31 | ||||||||||||||||||||||||||||||||||||||||
2011 | 13.15 | (0.03 | ) | (1.52 | ) | (1.55 | ) | (0.05 | ) | (1.18 | ) | – | (1.23 | ) | – | 10.37 | (11.66 | ) | 1,682 | 4.25 | 4.25 | 1.49 | (0.25 | ) | 44 | |||||||||||||||||||||||||||||||||||
2010 | 11.56 | 0.01 | 2.14 | 2.15 | (0.16 | ) | (0.41 | ) | – | (0.57 | ) | 0.01 | 13.15 | 18.74 | 1,771 | 3.72 | 3.72 | 1.49 | 0.10 | 38 | ||||||||||||||||||||||||||||||||||||||||
Royce Opportunity Select Fund–Investment Class b | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 17.93 | $ | (0.11 | ) | $ | (0.81 | ) | $ | (0.92 | ) | $ | – | $ | (0.51 | ) | $ | – | $ | (0.51 | ) | $ | 0.02 | $ | 16.52 | (4.97 | )% | $ | 18,221 | 1.56 | % | 1.56 | % | 1.28 | % | (0.60 | )% | 131 | % | |||||||||||||||||||||
2013 | 12.81 | (0.13 | ) | 5.79 | 5.66 | – | (0.55 | ) | – | (0.55 | ) | 0.01 | 17.93 | 44.61 | 17,461 | 1.78 | 1.78 | 1.29 | (0.80 | ) | 129 | |||||||||||||||||||||||||||||||||||||||
2012 | 10.33 | 0.07 | 3.50 | 3.57 | (0.13 | ) | (0.96 | ) | – | (1.09 | ) | – | 12.81 | 35.14 | 3,198 | 0.29 | 2 | 0.29 | 2 | 0.25 | 2 | 0.64 | 2 | 196 | ||||||||||||||||||||||||||||||||||||
2011 | 12.99 | 0.01 | (2.26 | ) | (2.25 | ) | (0.02 | ) | (0.39 | ) | – | (0.41 | ) | – | 10.33 | (17.14 | ) | 2,102 | 1.14 | 1.14 | 1.14 | 0.08 | 299 | |||||||||||||||||||||||||||||||||||||
2010 | 10.00 | (0.43 | ) | 3.42 | 2.99 | – | – | – | – | – | 12.99 | 29.90 | 1 | 1,913 | 4.01 | 1 | 4.01 | 1 | 4.01 | 1 | (3.79 | )1 | 95 | |||||||||||||||||||||||||||||||||||||
Royce Opportunity Select Fund–Service Class c | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.00 | $ | (0.04 | ) | $ | (1.11 | ) | $ | (1.15 | ) | $ | – | $ | (0.51 | ) | $ | – | $ | (0.51 | ) | $ | 0.03 | $ | 8.37 | (11.11 | )%1 | $ | 939 | 10.50 | %2 | 10.50 | %2 | 1.53 | %2 | (0.65 | )%2 | 131 | % | |||||||||||||||||||||
Royce Global Dividend Value Fund–Service Class d | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 11.19 | $ | 0.21 | $ | (0.97 | ) | $ | (0.76 | ) | $ | (0.22 | ) | $ | (0.29 | ) | $ | – | $ | (0.51 | ) | $ | – | $ | 9.92 | (6.84 | )% | $ | 6,840 | 2.62 | % | 2.62 | % | 1.69 | % | 1.83 | % | 33 | % | |||||||||||||||||||||
2013 | 10.10 | 0.18 | 1.38 | 1.56 | (0.26 | ) | (0.22 | ) | – | (0.48 | ) | 0.01 | 11.19 | 15.78 | 9,556 | 2.98 | 2.98 | 1.69 | 1.75 | 82 | ||||||||||||||||||||||||||||||||||||||||
2012 | 8.39 | 0.17 | 1.71 | 1.88 | (0.17 | ) | – | – | (0.17 | ) | – | 10.10 | 22.52 | 6,708 | 2.86 | 2.86 | 1.69 | 1.72 | 36 | |||||||||||||||||||||||||||||||||||||||||
2011 | 10.00 | 0.08 | (1.62 | ) | (1.54 | ) | (0.07 | ) | (0.01 | ) | – | (0.08 | ) | 0.01 | 8.39 | (15.37 | )1 | 6,135 | 3.47 | 2 | 3.47 | 2 | 1.69 | 2 | 1.10 | 2 | 20 | |||||||||||||||||||||||||||||||||
Royce International Micro-Cap Fund–Service Class d | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.04 | $ | 0.06 | $ | (0.30 | ) | $ | (0.24 | ) | $ | (0.14 | ) | $ | – | $ | – | $ | (0.14 | ) | $ | – | $ | 9.66 | (2.37 | )% | $ | 6,410 | 3.51 | % | 3.51 | % | 1.69 | % | 0.82 | % | 91 | % | ||||||||||||||||||||||
2013 | 8.61 | 0.11 | 1.51 | 1.62 | (0.20 | ) | – | – | (0.20 | ) | 0.01 | 10.04 | 18.95 | 5,209 | 3.86 | 3.86 | 1.69 | 1.22 | 103 | |||||||||||||||||||||||||||||||||||||||||
2012 | 7.72 | 0.13 | 0.92 | 1.05 | (0.16 | ) | – | – | (0.16 | ) | – | 8.61 | 13.59 | 4,603 | 3.90 | 3.90 | 1.69 | 1.63 | 62 | |||||||||||||||||||||||||||||||||||||||||
2011 | 10.00 | 0.10 | (2.26 | ) | (2.16 | ) | (0.12 | ) | – | (0.01 | ) | (0.13 | ) | 0.01 | 7.72 | (21.51 | )1 | 3,572 | 3.92 | 2 | 3.92 | 2 | 1.69 | 2 | 1.08 | 2 | 71 | |||||||||||||||||||||||||||||||||
Royce International Premier Fund–Investment Class a | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 10.00 | $ | 0.03 | $ | (0.85 | ) | $ | (0.82 | ) | $ | (0.16 | ) | $ | (0.31 | ) | $ | – | $ | (0.47 | ) | $ | – | $ | 8.71 | (8.16 | )%1 | $ | 3,481 | 3.17 | %2 | 3.17 | %2 | 1.44 | %2 | 1.00 | %2 | 62 | % | |||||||||||||||||||||
Royce International Premier Fund–Service Class e | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 11.67 | $ | 0.17 | $ | (1.13 | ) | $ | (0.96 | ) | $ | (0.12 | ) | $ | (0.31 | ) | $ | – | $ | (0.43 | ) | $ | – | $ | 10.28 | (8.22 | )% | $ | 4,045 | 2.45 | % | 2.45 | % | 1.69 | % | 1.26 | % | 62 | % | |||||||||||||||||||||
2013 | 10.01 | 0.10 | 1.73 | 1.83 | (0.17 | ) | – | – | (0.17 | ) | – | 11.67 | 18.31 | 9,470 | 2.82 | 2.82 | 1.69 | 1.09 | 51 | |||||||||||||||||||||||||||||||||||||||||
2012 | 8.26 | 0.12 | 1.81 | 1.93 | (0.18 | ) | – | – | (0.18 | ) | – | 10.01 | 23.40 | 6,444 | 3.54 | 3.54 | 1.69 | 1.18 | 103 | |||||||||||||||||||||||||||||||||||||||||
2011 | 10.00 | 0.05 | (1.73 | ) | (1.68 | ) | (0.06 | ) | (0.00 | ) | (0.01 | ) | (0.07 | ) | 0.01 | 8.26 | (16.75 | )1 | 4,090 | 3.77 | 2 | 3.77 | 2 | 1.69 | 2 | 0.67 | 2 | 42 | ||||||||||||||||||||||||||||||||
1 | Not annualized |
2 | Annualized |
a | The Class commenced operations on January 22, 2014. |
b | The Class commenced operations on September 1, 2010. |
c | The Class commenced operations on March 21, 2014. |
d | The Fund commenced operations on January 3, 2011. |
e | The Class commenced operations on January 3, 2011. |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2014 Annual Report to Shareholders | 61 |
Notes to Financial Statements
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 and shareholder reports, and receive different compensating balance credits and 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 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.
At December 31, 2014, officers, employees of Royce & Associates, LLC (“Royce”), Fund trustees, the Royce retirement plans and other affiliates owned more than 10% of the following Funds:
Royce Select Fund I | 15 | % | Royce Partners Fund | 79 | % | |||
Royce Micro-Cap Discovery Fund | 71 | % | Royce Opportunity Select Fund | 20 | % | |||
Royce Select Fund II | 46 | % | Royce Global Dividend Value Fund | 18 | % | |||
Royce Enterprise Select Fund | 51 | % | Royce International Micro-Cap Fund | 46 | % | |||
Royce SMid-Cap Value Fund | 47 | % | Royce International Premier Fund | 13 | % |
Various inputs are used in determining the value of each Fund’s investments, as noted above. These inputs are summarized in the three broad levels below:
Level 1 – | quoted prices in active markets for identical securities. | ||
Level 2 – | other significant observable inputs (including quoted prices for similar securities, foreign securities that may be fair valued and repurchase agreements). The table below includes all Level 2 securities. Level 2 securities with values based on quoted prices for similar securities are noted in the Schedules of Investments. | ||
Level 3 – | significant unobservable inputs (including last trade price before trading was suspended, or at a discount thereto for lack of marketability or otherwise, market price information regarding other securities, information received from the company and/or published documents, including SEC filings and financial statements, or other publicly available information). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
62 | The Royce Funds 2014 Annual Report to Shareholders |
LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | ||||||||||
Royce Select Fund I | |||||||||||||
Common Stocks | $ | 35,726,482 | $ | 815,041 | $ | – | $ | 36,541,523 | |||||
Cash Equivalents | – | 1,020,000 | – | 1,020,000 | |||||||||
Royce Micro-Cap Discovery Fund | |||||||||||||
Common Stocks | 5,238,073 | – | – | 5,238,073 | |||||||||
Cash Equivalents | – | 361,000 | – | 361,000 | |||||||||
Royce Financial Services Fund | |||||||||||||
Common Stocks | 40,624,942 | 11,480,789 | – | 52,105,731 | |||||||||
Cash Equivalents | – | 1,739,000 | – | 1,739,000 | |||||||||
Royce Select Fund II | |||||||||||||
Common Stocks | 2,090,206 | 2,494,757 | – | 4,584,963 | |||||||||
Cash Equivalents | – | 169,000 | – | 169,000 | |||||||||
Royce European Smaller-Companies Fund | |||||||||||||
Common Stocks | 231,406 | 21,375,069 | – | 21,606,475 | |||||||||
Cash Equivalents | – | 515,000 | – | 515,000 | |||||||||
Royce Enterprise Select Fund | |||||||||||||
Common Stocks | 1,990,486 | 30,136 | – | 2,020,622 | |||||||||
Fixed Income | 39,691 | – | – | 39,691 | |||||||||
Cash Equivalents | – | 758,000 | – | 758,000 | |||||||||
Royce SMid-Cap Value Fund | |||||||||||||
Common Stocks | 12,867,476 | 2,297,610 | – | 15,165,086 | |||||||||
Cash Equivalents | – | 539,000 | – | 539,000 | |||||||||
Royce Partners Fund | |||||||||||||
Common Stocks | 1,925,311 | 421,463 | – | 2,346,774 | |||||||||
Cash Equivalents | – | 433,000 | – | 433,000 | |||||||||
Royce Opportunity Select Fund | |||||||||||||
Common Stocks | 18,909,539 | 9,180 | – | 18,918,719 | |||||||||
Cash Equivalents | – | 536,000 | – | 536,000 | |||||||||
Royce Global Dividend Value Fund | |||||||||||||
Common Stocks | 985,436 | 5,459,330 | – | 6,444,766 | |||||||||
Cash Equivalents | – | 128,000 | – | 128,000 | |||||||||
Royce International Micro-Cap Fund | |||||||||||||
Common Stocks | 901,002 | 5,359,290 | 529 | 6,260,821 | |||||||||
Cash Equivalents | – | 111,000 | – | 111,000 | |||||||||
Royce International Premier Fund | |||||||||||||
Common Stocks | – | 7,605,968 | – | 7,605,968 | |||||||||
Short positions: | |||||||||||||
LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | ||||||||||
Royce Select Fund II | |||||||||||||
Common Stocks | $ | (71,579 | ) | $ | – | $ | – | $ | (71,579 | ) | |||
Royce Opportunity Select Fund | |||||||||||||
Common Stocks | (941,847 | ) | – | – | (941,847 | ) | |||||||
For the year ended December 31, 2014, certain securities have transferred in and out of Level 1 and Level 2 measurements. The Funds recognize transfers between levels as of the end of the reporting period. At December 31, 2014, the following Funds had securities transfer from Level 1 to Level 2 within the fair value hierarchy:
TRANSFERS FROM | TRANSFERS FROM | |||||||||
LEVEL 1 TO LEVEL 2 | LEVEL 1 TO LEVEL 2 | |||||||||
Royce Select Fund I | $ | 815,041 | Royce Partners Fund | $ | 421,463 | |||||
Royce Financial Services Fund | 10,445,971 | Royce Global Dividend Value Fund | 4,780,483 | |||||||
Royce Select Fund II | 728,945 | Royce International Micro-Cap Fund | 2,962,428 | |||||||
Royce European Smaller-Companies Fund | 16,633,365 | Royce International Premier Fund | 6,561,389 | |||||||
Royce SMid-Cap Value Fund | 1,501,029 | |||||||||
The Royce Funds 2014 Annual Report to Shareholders | 63
Notes to Financial Statements (continued)
VALUATION OF INVESTMENTS (continued):
Level 3 Reconciliation:
REALIZED AND UNREALIZED | |||||||||||||
BALANCE AS OF 12/31/13 | SALES | GAIN (LOSS)1 | BALANCE AS OF 12/31/14 | ||||||||||
Royce Financial Services Fund | |||||||||||||
Common Stocks | $ | 0 | $ | 0 | $ | 0 | $ | – | |||||
Royce International Micro-Cap Fund | |||||||||||||
Common Stocks | 529 | – | – | 529 | |||||||||
1 | The net change in unrealized appreciation (depreciation) is included in the accompanying Statement of Operations. Change in unrealized appreciation (depreciation) includes net unrealized appreciation (depreciation) resulting from changes in investment values during the reporting period and the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized. Net realized gain (loss) from investments and foreign currency transactions is included in the accompanying Statement of Operations. |
64 | The Royce Funds 2014 Annual Report to Shareholders
Capital Share Transactions (in dollars):
SHARES ISSUED FOR REINVESTMENT OF | NET INCREASE (DECREASE) FROM | |||||||||||||||||||||||||||||||||
SHARES SOLD | DISTRIBUTIONS | SHARES REDEEMED | CAPITAL SHARE TRANSACTIONS | |||||||||||||||||||||||||||||||
Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | |||||||||||||||||||||||||||
12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | |||||||||||||||||||||||||||
Royce Select Fund I | ||||||||||||||||||||||||||||||||||
Investment Class | $3,917,901 | $4,142,661 | $3,322,753 | $4,632,626 | $(10,053,525 | ) | $(17,467,022 | ) | $ | (2,812,871 | ) | $ | (8,691,735 | ) | ||||||||||||||||||||
Royce Micro-Cap Discovery Fund | ||||||||||||||||||||||||||||||||||
Service Class | 140,729 | 1,631,092 | 690,513 | 158,366 | (397,978 | ) | (1,865,126 | ) | 433,264 | (75,668 | ) | |||||||||||||||||||||||
Royce Financial Services Fund | ||||||||||||||||||||||||||||||||||
Service Class | 27,931,624 | 26,878,008 | 3,487,173 | 81,782 | (23,440,674 | ) | (6,116,756 | ) | 7,978,123 | 20,843,034 | ||||||||||||||||||||||||
Royce Select Fund II | ||||||||||||||||||||||||||||||||||
Investment Class | 55,611 | 962,146 | 691,073 | 484,786 | (332,687 | ) | (595,954 | ) | 413,997 | 850,978 | ||||||||||||||||||||||||
Royce European Smaller-Companies Fund | ||||||||||||||||||||||||||||||||||
Investment Class | 2,976,525 | 23,074 | (562,642 | ) | 2,436,957 | |||||||||||||||||||||||||||||
Service Class | 10,432,098 | 12,749,215 | 418,765 | 225,822 | (13,868,606 | ) | (4,474,074 | ) | (3,017,743 | ) | 8,500,963 | |||||||||||||||||||||||
Royce Enterprise Select Fund | ||||||||||||||||||||||||||||||||||
Investment Class | 137,298 | 1,042,236 | 256,485 | 230,142 | (104,431 | ) | (196,397 | ) | 289,352 | 1,075,981 | ||||||||||||||||||||||||
Royce SMid-Cap Value Fund | ||||||||||||||||||||||||||||||||||
Service Class | 13,031,077 | 918,483 | 56,994 | 15,362 | (8,166,948 | ) | (2,831,409 | ) | 4,921,123 | (1,897,564 | ) | |||||||||||||||||||||||
Royce Partners Fund | ||||||||||||||||||||||||||||||||||
Service Class | 110,784 | 159,415 | 90,755 | 243,024 | (127,285 | ) | (121,486 | ) | 74,254 | 280,953 | ||||||||||||||||||||||||
Royce Opportunity Select Fund | ||||||||||||||||||||||||||||||||||
Investment Class | 9,262,133 | 12,259,644 | 511,788 | 502,868 | (7,073,447 | ) | (1,079,435 | ) | 2,700,474 | 11,683,077 | ||||||||||||||||||||||||
Service Class | 1,177,953 | 46,594 | (216,169 | ) | 1,008,378 | |||||||||||||||||||||||||||||
Royce Global Dividend Value Fund | ||||||||||||||||||||||||||||||||||
Service Class | 1,124,982 | 3,160,309 | 391,000 | 387,794 | (3,189,682 | ) | (1,506,338 | ) | (1,673,700 | ) | 2,041,765 | |||||||||||||||||||||||
Royce International Micro-Cap Fund | ||||||||||||||||||||||||||||||||||
Service Class | 3,084,632 | 1,892,877 | 86,844 | 98,903 | (1,601,522 | ) | (2,089,921 | ) | 1,569,954 | (98,141 | ) | |||||||||||||||||||||||
Royce International Premier Fund | ||||||||||||||||||||||||||||||||||
Investment Class | 5,574,827 | 188,340 | (1,592,855 | ) | 4,170,312 | |||||||||||||||||||||||||||||
Service Class | 6,044,190 | 2,799,696 | 286,437 | 128,291 | (10,908,914 | ) | (1,048,897 | ) | (4,578,287 | ) | 1,879,090 | |||||||||||||||||||||||
The Royce Funds 2014 Annual Report to Shareholders | 65
Notes to Financial Statements (continued)
Capital Share Transactions (in shares):
SHARES ISSUED FOR REINVESTMENT OF | NET INCREASE (DECREASE) IN SHARES | |||||||||||||||||||||||||||||||
SHARES SOLD | DISTRIBUTIONS | SHARES REDEEMED | OUTSTANDING | |||||||||||||||||||||||||||||
Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | Period ended | |||||||||||||||||||||||||
12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | |||||||||||||||||||||||||
Royce Select Fund I | ||||||||||||||||||||||||||||||||
Investment Class | 194,816 | 220,662 | 290,480 | 247,999 | (616,828 | ) | (931,946 | ) | (131,532 | ) | (463,285 | ) | ||||||||||||||||||||
Royce Micro-Cap Discovery Fund | ||||||||||||||||||||||||||||||||
Service Class | 21,073 | 272,296 | 119,500 | 23,995 | (60,104 | ) | (304,432 | ) | 80,469 | (8,141 | ) | |||||||||||||||||||||
Royce Financial Services Fund | ||||||||||||||||||||||||||||||||
Service Class | 2,899,740 | 3,162,045 | 417,602 | 8,765 | (2,448,965 | ) | (728,338 | ) | 868,377 | 2,442,472 | ||||||||||||||||||||||
Royce Select Fund II | ||||||||||||||||||||||||||||||||
Investment Class | 4,635 | 82,539 | 71,912 | 42,863 | (31,377 | ) | (50,269 | ) | 45,170 | 75,133 | ||||||||||||||||||||||
Royce European Smaller-Companies Fund | ||||||||||||||||||||||||||||||||
Investment Class | 297,124 | 2,880 | (62,436 | ) | 237,568 | |||||||||||||||||||||||||||
Service Class | 826,782 | 1,112,607 | 43,605 | 18,850 | (1,188,428 | ) | (403,204 | ) | (318,041 | ) | 728,253 | |||||||||||||||||||||
Royce Enterprise Select Fund | ||||||||||||||||||||||||||||||||
Investment Class | 11,117 | 88,545 | 22,479 | 19,654 | (8,844 | ) | (16,561 | ) | 24,752 | 91,638 | ||||||||||||||||||||||
Royce SMid-Cap Value Fund | ||||||||||||||||||||||||||||||||
Service Class | 846,746 | 69,873 | 4,176 | 1,118 | (539,576 | ) | (221,303 | ) | 311,346 | (150,312 | ) | |||||||||||||||||||||
Royce Partners Fund | ||||||||||||||||||||||||||||||||
Service Class | 7,707 | 11,894 | 6,678 | 17,559 | (8,798 | ) | (8,706 | ) | 5,587 | 20,747 | ||||||||||||||||||||||
Royce Opportunity Select Fund | ||||||||||||||||||||||||||||||||
Investment Class | 512,765 | 763,033 | 33,180 | 30,076 | (417,105 | ) | (68,900 | ) | 128,840 | 724,209 | ||||||||||||||||||||||
Service Class | 131,427 | 5,703 | (24,877 | ) | 112,253 | |||||||||||||||||||||||||||
Royce Global Dividend Value Fund | ||||||||||||||||||||||||||||||||
Service Class | 100,739 | 294,486 | 39,248 | 35,717 | (304,353 | ) | (140,394 | ) | (164,366 | ) | 189,809 | |||||||||||||||||||||
Royce International Micro-Cap Fund | ||||||||||||||||||||||||||||||||
Service Class | 290,430 | 205,642 | 9,432 | 10,123 | (155,454 | ) | (231,571 | ) | 144,408 | (15,806 | ) | |||||||||||||||||||||
Royce International Premier Fund | ||||||||||||||||||||||||||||||||
Investment Class | 547,336 | 21,875 | (169,405 | ) | 399,806 | |||||||||||||||||||||||||||
Service Class | 517,826 | 254,662 | 28,675 | 11,434 | (964,831 | ) | (97,880 | ) | (418,330 | ) | 168,216 | |||||||||||||||||||||
INVESTMENT ADVISER: Under the Trust’s investment advisory agreements with 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 class-specific expenses to the extent necessary to maintain certain Funds’ net annual operating expense ratios at specified levels through April 30, 2015, is shown below to the extent that it impacted net expenses for the year ended December 31, 2014. See the Prospectus for contractual waiver expiration dates.
COMMITTED NET ANNUAL | YEAR ENDED | ||||||||||||||||||
ANNUAL CONTRACTUAL | OPERATING EXPENSE RATIO CAP | DECEMBER 31, 2014 | |||||||||||||||||
ADVISORY FEE AS A PERCENTAGE | Investment | Service | Advisory fees | ||||||||||||||||
OF AVERAGE NET ASSETS1 | Class2 | Class2 | Net advisory fees | waived | |||||||||||||||
Royce Select Fund I | 1.00 | % | N/A | N/A | $ | 453,215 | $ | – | |||||||||||
Royce Micro-Cap Discovery Fund | 1.00 | % | N/A | 1.49% | 11,814 | 42,527 | |||||||||||||
Royce Financial Services Fund | 1.00 | % | N/A | 1.49% | 488,324 | 96,708 | |||||||||||||
Royce Select Fund II | 1.25 | % | 1.49% | N/A | – | 61,525 | |||||||||||||
Royce European Smaller-Companies Fund | 1.25 | % | 1.44% | 1.69% | 343,321 | 39,450 | |||||||||||||
Royce Enterprise Select Fund | 1.00 | % | 1.24% | N/A | – | 27,488 | |||||||||||||
Royce SMid-Cap Value Fund | 1.00 | % | N/A | 1.35% | 88,083 | 78,252 | |||||||||||||
Royce Partners Fund | 0.85 | % | N/A | 1.20% | – | 23,793 | |||||||||||||
Royce Opportunity Select Fund | 1.00 | % | 1.24% | 1.49% | 201,525 | 9,238 | |||||||||||||
Royce Global Dividend Value Fund | 1.25 | % | N/A | 1.69% | 30,193 | 86,863 | |||||||||||||
Royce International Micro-Cap Fund | 1.30 | % | N/A | 1.69% | – | 74,585 | |||||||||||||
Royce International Premier Fund | 1.25 | % | 1.44% | 1.69% | 93,930 | 68,939 | |||||||||||||
1 | From a base annual rate of 1.00% (1.25% for Royce Select Fund II, Royce European Smaller-Companies Fund, Royce Global Dividend Value Fund and Royce International Premier Fund, 0.85% for Royce Partners Fund and 1.30% for Royce International Micro-Cap Fund), the annual rates of investment advisory fees payable by each of the Funds are reduced by the indicated amount at the following breakpoints applicable to a Fund’s net assets in excess of $2 billion: more than $2 billion to $4 billion - .05% per annum; more than $4 billion to $6 billion - .10% per annum; over $6 billion - .15% per annum. |
2 | Committed net annual operating expense ratio cap excludes acquired fund fees and expenses, dividends on securities sold short and other expenses related to short sales. |
66 | The Royce Funds 2014 Annual Report to Shareholders
DISTRIBUTOR: Royce Fund Services, Inc. (“RFS”), the distributor of the Trust’s shares, is a wholly owned subsidiary of Royce. RFS is entitled to receive distribution fees that are computed daily and payable monthly.
ANNUAL CONTRACTUAL DISTRIBUTION FEE AS A | PERIOD ENDED DECEMBER 31, 2014 | ||||||||||||
PERCENTAGE OF AVERAGE NET ASSETS | Net distribution fees | Distribution fees waived | |||||||||||
Royce Micro-Cap Discovery Fund – Service Class | 0.25 | % | $ | 13,585 | $ | – | |||||||
Royce Financial Services Fund – Service Class | 0.25 | % | 134,557 | 11,701 | |||||||||
Royce European Smaller-Companies Fund – Service Class | 0.25 | % | 71,959 | – | |||||||||
Royce SMid-Cap Value Fund – Service Class | 0.25 | % | 41,584 | – | |||||||||
Royce Partners Fund – Service Class | 0.25 | % | 6,998 | – | |||||||||
Royce Opportunity Select Fund – Service Class | 0.25 | % | 817 | – | |||||||||
Royce Global Dividend Value Fund – Service Class | 0.25 | % | 23,411 | – | |||||||||
Royce International Micro-Cap Fund – Service Class | 0.25 | % | 13,770 | 574 | |||||||||
Royce International Premier Fund – Service Class | 0.25 | % | 22,734 | 3,100 | |||||||||
PURCHASES TO COVER | ||||||||||||||||
PURCHASES | SALES | SHORT SALES | SHORT SALES | |||||||||||||
Royce Select Fund I | $ | 16,483,115 | $ | 25,103,992 | $ | – | $ | – | ||||||||
Royce Micro-Cap Discovery Fund | 4,460,577 | 4,711,634 | – | – | ||||||||||||
Royce Financial Services Fund | 32,909,601 | 21,348,727 | – | – | ||||||||||||
Royce Select Fund II | 8,468,077 | 8,794,679 | 694,639 | 976,075 | ||||||||||||
Royce European Smaller-Companies Fund | 19,534,291 | 18,993,580 | – | – | ||||||||||||
Royce Enterprise Select Fund | 1,633,206 | 1,686,553 | – | – | ||||||||||||
Royce SMid-Cap Value Fund | 11,476,080 | 6,155,736 | – | – | ||||||||||||
Royce Partners Fund | 185,337 | 227,675 | – | – | ||||||||||||
Royce Opportunity Select Fund | 22,060,301 | 19,325,952 | 5,907,126 | 6,377,397 | ||||||||||||
Royce Global Dividend Value Fund | 2,888,781 | 3,931,530 | – | – | ||||||||||||
Royce International Micro-Cap Fund | 6,618,574 | 4,891,621 | – | – | ||||||||||||
Royce International Premier Fund | 7,508,323 | 7,645,627 | – | – | ||||||||||||
CLASS LEVEL | |||||||||||||||||||||||
EXPENSES | |||||||||||||||||||||||
REIMBURSED BY | |||||||||||||||||||||||
NET DISTRIBUTION | SHAREHOLDER | SHAREHOLDER | TRANSFER AGENT | INVESTMENT | |||||||||||||||||||
FEES | SERVICING | REPORTS | REGISTRATION | BALANCE CREDITS | TOTAL | ADVISER | |||||||||||||||||
Royce European Smaller-Companies Fund – | |||||||||||||||||||||||
Investment Class | $ | – | $ | 9,080 | $ | 141 | $ | 20,106 | $ | – | $ | 29,327 | $ | 29,327 | |||||||||
Royce European Smaller-Companies Fund – | |||||||||||||||||||||||
Service Class | 71,959 | 51,348 | 27,486 | 19,961 | (16 | ) | 170,738 | 82,168 | |||||||||||||||
71,959 | 60,428 | 27,627 | 40,067 | (16 | ) | 111,495 | |||||||||||||||||
Royce Opportunity Select Fund – | |||||||||||||||||||||||
Investment Class | – | 21,595 | 12,666 | 14,006 | (6 | ) | 48,261 | 48,261 | |||||||||||||||
Royce Opportunity Select Fund – | |||||||||||||||||||||||
Service Class | 817 | 7,658 | 191 | 20,806 | – | 29,472 | 29,272 | ||||||||||||||||
817 | 29,253 | 12,857 | 34,812 | (6 | ) | 77,533 | |||||||||||||||||
Royce International Premier Fund – | |||||||||||||||||||||||
Investment Class | – | 10,102 | 79 | 20,406 | – | 30,587 | 30,587 | ||||||||||||||||
Royce International Premier Fund – | |||||||||||||||||||||||
Service Class | 22,734 | 17,441 | 5,737 | 17,811 | (3 | ) | 63,720 | 22,536 | |||||||||||||||
22,734 | 27,543 | 5,816 | 38,217 | (3 | ) | 53,123 | |||||||||||||||||
The Royce Funds 2014 Annual Report to Shareholders | 67
Notes to Financial Statements (continued)
NET UNREALIZED | GROSS UNREALIZED | |||||||||||||||||||||
TAX BASIS COST | APPRECIATION (DEPRECIATION) | Appreciation | Depreciation | |||||||||||||||||||
Royce Select Fund I | $30,185,150 | $ | 7,376,373 | $ | 8,796,564 | $ | 1,420,191 | |||||||||||||||
Royce Micro-Cap Discovery Fund | 5,154,819 | 444,254 | 717,780 | 273,526 | ||||||||||||||||||
Royce Financial Services Fund | 46,447,385 | 7,397,346 | 9,485,051 | 2,087,705 | ||||||||||||||||||
Royce Select Fund II | 4,659,858 | 22,526 | 389,707 | 367,181 | ||||||||||||||||||
Royce European Smaller-Companies Fund | 25,706,571 | (3,585,096 | ) | 1,255,700 | 4,840,796 | |||||||||||||||||
Royce Enterprise Select Fund | 2,579,895 | 238,418 | 298,016 | 59,598 | ||||||||||||||||||
Royce SMid-Cap Value Fund | 15,646,308 | 57,778 | 2,106,361 | 2,048,583 | ||||||||||||||||||
Royce Partners Fund | 2,193,163 | 586,611 | 680,851 | 94,240 | ||||||||||||||||||
Royce Opportunity Select Fund | 17,244,038 | 1,268,834 | 2,518,770 | 1,249,936 | ||||||||||||||||||
Royce Global Dividend Value Fund | 6,861,346 | (288,580 | ) | 807,430 | 1,096,010 | |||||||||||||||||
Royce International Micro-Cap Fund | 6,878,510 | (506,689 | ) | 368,426 | 875,115 | |||||||||||||||||
Royce International Premier Fund | 7,626,952 | (20,984 | ) | 852,419 | 873,403 | |||||||||||||||||
ORDINARY INCOME | LONG-TERM CAPITAL GAINS | RETURN OF CAPITAL | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||
Royce Select Fund I | $ | 1,056,669 | $ | 817,571 | $ | 4,181,374 | $ | 4,054,546 | $ | – | $ | – | |||||||
Royce Micro-Cap Discovery Fund | 195,733 | – | 529,713 | 164,762 | – | – | |||||||||||||
Royce Financial Services Fund | 859,068 | 82,981 | 3,059,397 | – | – | – | |||||||||||||
Royce Select Fund II | 236,887 | 291,068 | 467,557 | 210,443 | 560 | – | |||||||||||||
Royce European Smaller-Companies Fund | 289,517 | 232,856 | 247,837 | – | – | – | |||||||||||||
Royce Enterprise Select Fund | 155,352 | 155,551 | 101,133 | 75,300 | – | – | |||||||||||||
Royce SMid-Cap Value Fund | 59,401 | 16,014 | – | – | – | – | |||||||||||||
Royce Partners Fund | 40,340 | 58,459 | 51,862 | 187,253 | – | – | |||||||||||||
Royce Opportunity Select Fund | 163,809 | 186,736 | 440,693 | 324,118 | – | – | |||||||||||||
Royce Global Dividend Value Fund | 340,693 | 389,940 | 76,121 | – | – | – | |||||||||||||
Royce International Micro-Cap Fund | 91,072 | 100,087 | – | – | – | – | |||||||||||||
Royce International Premier Fund | 330,888 | 129,813 | 152,974 | – | 2,144 | – | |||||||||||||
The tax basis components of distributable earnings at December 31, 2014, were as follows:
UNDISTRIBUTED | ||||||||||||||||||||||||||||
LONG-TERM | QUALIFIED | |||||||||||||||||||||||||||
CAPITAL GAINS OR | LATE YEAR | |||||||||||||||||||||||||||
UNDISTRIBUTED | (CAPITAL LOSSES | CAPITAL LOSS | NET UNREALIZED | ORDINARY AND | TOTAL | CAPITAL LOSS | ||||||||||||||||||||||
ORDINARY | NOT SUBJECT TO | CARRYFORWARD | APPRECIATION | POST-OCTOBER LOSS | DISTRIBUTABLE | CARRYFORWARD | ||||||||||||||||||||||
INCOME | EXPIRATION) | TO 12/31/171 | (DEPRECIATION)2 | DEFERRALS3 | EARNINGS | UTILIZED | ||||||||||||||||||||||
Royce Select Fund I | $ | – | $ | 590,514 | $ | – | $ | 7,376,373 | $ | – | $ | 7,966,887 | $ | – | ||||||||||||||
Royce Micro-Cap Discovery Fund | 19,810 | 45,833 | – | 444,256 | (742 | ) | 509,157 | – | ||||||||||||||||||||
Royce Financial Services Fund | 435,624 | 1,117,430 | – | 7,255,238 | (23,434 | ) | 8,784,858 | – | ||||||||||||||||||||
Royce Select Fund II | – | – | – | 20,208 | (23,822 | ) | (3,614 | ) | – | |||||||||||||||||||
Royce European Smaller-Companies Fund | 7,784 | – | – | (3,588,731 | ) | (235,153 | ) | (3,816,100 | ) | 1,361,060 | ||||||||||||||||||
Royce Enterprise Select Fund | 4,188 | 10,384 | – | 238,407 | (68 | ) | 252,911 | – | ||||||||||||||||||||
Royce SMid-Cap Value Fund | 3,798 | – | (4,319,392 | ) | 57,405 | – | (4,258,189 | ) | 1,122,805 | |||||||||||||||||||
Royce Partners Fund | 2,681 | – | – | 586,518 | (87 | ) | 589,112 | – | ||||||||||||||||||||
Royce Opportunity Select Fund | – | 595 | – | 1,268,835 | (174,789 | ) | 1,094,641 | – | ||||||||||||||||||||
Royce Global Dividend Value Fund | 11 | – | – | (288,512 | ) | (139,794 | ) | (428,295 | ) | – | ||||||||||||||||||
68 | The Royce Funds 2014 Annual Report to Shareholders
TAX INFORMATION (continued): | |||||||||||||||||||||
UNDISTRIBUTED | |||||||||||||||||||||
LONG-TERM | QUALIFIED | ||||||||||||||||||||
CAPITAL GAINS OR | LATE YEAR | ||||||||||||||||||||
UNDISTRIBUTED | (CAPITAL LOSSES | CAPITAL LOSS | NET UNREALIZED | ORDINARY AND | TOTAL | CAPITAL LOSS | |||||||||||||||
ORDINARY | NOT SUBJECT TO | CARRYFORWARD | APPRECIATION | POST-OCTOBER LOSS | DISTRIBUTABLE | CARRYFORWARD | |||||||||||||||
INCOME | EXPIRATION) | TO 12/31/171 | (DEPRECIATION)2 | DEFERRALS3 | EARNINGS | UTILIZED | |||||||||||||||
Royce International Micro-Cap Fund | $93 | $(415,411 | ) | $ – | $(510,937 | ) | $ (10,918 | ) | $(937,173 | ) | $280,445 | ||||||||||
Royce International Premier Fund | – | – | – | (44,097 | ) | (560,156 | ) | (604,253 | ) | 112,378 | |||||||||||
1 | For Royce SMid-Cap Value Fund, this amount represents $449,274 expiring 12/31/16 and $3,870,118 expiring 12/31/17. On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted. Under the Act, net capital losses may be carried forward indefinitely, and their character is retained as short term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short term losses. As a transition rule, the Act requires that postenactment net capital losses be used before pre-enactment net capital losses. As a result of this ordering rule, pre-enactment capital loss carryforwards may expire unused, whereas under the previous rules these losses may have been utilized. This change is effective for fiscal years beginning after the date of enactment. | |
2 | Includes timing differences on foreign currency, recognition of losses on securities sold, investments in Real Estate Investment Trusts, investments in publicly traded partnerships and mark-to-market of Passive Foreign Investment Companies. | |
3 | Under the current tax law, capital losses and qualified late year ordinary losses incurred after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. |
For financial reporting purposes, capital accounts and distributions to shareholders are adjusted to reflect the tax character of permanent book/tax differences. For the year ended December 31, 2014, the Funds recorded the following permanent reclassifications, which relate primarily to current net operating losses, distribution reclassifications, Real Estate Investment Trusts, publicly traded partnerships, foreign currency transactions, non-deductible excise taxes paid, return of capital, dividend expense on short sales and gains from the sale of Passive Foreign Investment Companies. Results of operations and net assets were not affected by these reclassifications.
UNDISTRIBUTED NET | ACCUMULATED NET | PAID–IN | |||||||||||
INVESTMENT INCOME (LOSS) | REALIZED GAIN (LOSS) | CAPITAL | |||||||||||
Royce Select Fund I | $ | 66,630 | $ | (66,630 | ) | $ | – | ||||||
Royce Micro-Cap Discovery Fund | 2,843 | (2,843 | ) | – | |||||||||
Royce Financial Services Fund | (164,309 | ) | 164,900 | (591 | ) | ||||||||
Royce Select Fund II | 59,745 | (59,185 | ) | (560 | ) | ||||||||
Royce European Smaller-Companies Fund | 205,183 | (205,183 | ) | – | |||||||||
Royce Enterprise Select Fund | 9,764 | (9,764 | ) | – | |||||||||
Royce SMid-Cap Value Fund | (1,730 | ) | 1,730 | – | |||||||||
Royce Partners Fund | (525 | ) | 1,758 | (1,233 | ) | ||||||||
Royce Opportunity Select Fund | 126,080 | 15,728 | (141,808 | ) | |||||||||
Royce Global Dividend Value Fund | 69,784 | (69,738 | ) | (46 | ) | ||||||||
Royce International Micro-Cap Fund | 44,162 | (44,024 | ) | (138 | ) | ||||||||
Royce International Premier Fund | 56,752 | (54,608 | ) | (2,144 | ) | ||||||||
The Royce Funds 2014 Annual Report to Shareholders | 69
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of The Royce Fund and the Shareholders of
Royce Select Fund I, Royce Micro-Cap Discovery Fund, Royce Financial Services Fund, Royce Select Fund II, Royce European Smaller-Companies Fund, Royce Enterprise Select Fund, Royce SMid-Cap Value Fund, Royce Partners Fund, Royce Opportunity Select Fund, Royce Global Dividend Value Fund, Royce International Micro-Cap Fund and Royce International Premier Fund.
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Royce Select Fund I, Royce Micro-Cap Discovery Fund, Royce Financial Services Fund, Royce Select Fund II, Royce European Smaller-Companies Fund, Royce Enterprise Select Fund, Royce SMid-Cap Value Fund, Royce Partners Fund, Royce Opportunity Select Fund, Royce Global Dividend Value Fund, Royce International Micro-Cap Fund and Royce International Premier Fund (constituting The Royce Fund, hereafter referred to as the “Funds”) at December 31, 2014, the results of their operations for the year then ended, the changes in their net assets and their financial highlights for each of the fiscal periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2014, by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 24, 2015
70 | The Royce Funds 2014 Annual 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 July 1, 2014, and held for the entire six-month period ended December 31, 2014. Service 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.
Hypothetical Example for Comparison Purposes
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 BEORE EXPENSES) | |||||||||||||||||||||
Beginning Account | Ending Account Value | Expenses Paid During the | Beginning Account | Ending Account Value | Expenses Paid During | Annualized Expense | ||||||||||||||||
Value 7/1/14 | 12/31/14 | Period1 | Value 7/1/14 | 12/31/14 | the Period1 | Ratio2 | ||||||||||||||||
Investment Class | ||||||||||||||||||||||
Royce Select Fund I | $ | 1,000.00 | $ | 940.15 | $ | 6.11 | $ | 1,000.00 | $ | 1,018.90 | $ | 6.36 | 1.25 | % | ||||||||
Royce Select Fund II | 1,000.00 | 936.47 | 7.57 | 1,000.00 | 1,017.39 | 7.88 | 1.55 | % | ||||||||||||||
Royce European Smaller- | 1,000.00 | 814.84 | 6.59 | 1,000.00 | 1,017.95 | 7.32 | 1.44 | % | ||||||||||||||
Royce Enterprise Select Fund | 1,000.00 | 994.72 | 6.23 | 1,000.00 | 1,018.95 | 6.31 | 1.24 | % | ||||||||||||||
Royce Opportunity Select Fund | 1,000.00 | 920.05 | 6.19 | 1,000.00 | 1,018.75 | 6.51 | 1.28 | % | ||||||||||||||
Royce International Premier Fund | 1,000.00 | 890.74 | 6.86 | 1,000.00 | 1,017.95 | 7.32 | 1.44 | % | ||||||||||||||
Service Class | ||||||||||||||||||||||
Royce Micro-Cap Discovery Fund | 1,000.00 | 1,009.69 | 7.55 | 1,000.00 | 1,017.69 | 7.58 | 1.49 | % | ||||||||||||||
Royce Financial Services Fund | 1,000.00 | 998.41 | 7.51 | 1,000.00 | 1,017.69 | 7.58 | 1.49 | % | ||||||||||||||
Royce European Smaller- | 1,000.00 | 814.02 | 7.86 | 1,000.00 | 1,016.53 | 8.74 | 1.72 | % | ||||||||||||||
Royce SMid-Cap Value Fund | 1,000.00 | 864.75 | 6.35 | 1,000.00 | 1,018.40 | 6.87 | 1.35 | % | ||||||||||||||
Royce Partners Fund | 1,000.00 | 964.85 | 5.94 | 1,000.00 | 1,019.16 | 6.11 | 1.20 | % | ||||||||||||||
Royce Opportunity Select Fund | 1,000.00 | 921.18 | 7.41 | 1,000.00 | 1,017.49 | 7.78 | 1.53 | % | ||||||||||||||
Royce Global Dividend Value Fund | 1,000.00 | 884.05 | 8.03 | 1,000.00 | 1,016.69 | 8.59 | 1.69 | % | ||||||||||||||
Royce International Micro-Cap Fund | 1,000.00 | 905.06 | 8.12 | 1,000.00 | 1,016.69 | 8.59 | 1.69 | % | ||||||||||||||
Royce International Premier Fund | 1,000.00 | 887.40 | 10.47 | 1,000.00 | 1,014.12 | 11.17 | 2.20 | % | ||||||||||||||
1 | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value for the period, multiplied by 184 days in the most recent fiscal half-year divided by 365 days (to reflect the half-year period). |
2 | Annualized expense ratio used to derive figures in the table is based on the most recent fiscal half-year. |
The Royce Funds 2014 Annual Report to Shareholders | 71 |
Federal Tax Information |
In January 2015, taxable shareholders were mailed a Form 1099-DIV reporting the federal tax status of all distributions paid during the calendar year 2014.
2014 Supplemental Tax Information:
LONG-TERM CAPITAL | ||||
% U.S. | % INCOME | GAIN DISTRIBUTION OR | ||
FUND | % QDI | GOVT INCOME | QUALIFYING FOR DRD | MAXIMUM ALLOWABLE (OOO’S) |
Royce Select Fund I | 42.62% | N/A | 32.60% | $4,181 |
Royce Micro-Cap Discovery Fund | 39.28% | N/A | 38.75% | 530 |
Royce Financial Services Fund | 100.00% | N/A | 74.65% | 3,059 |
Royce Select Fund II | 27.96% | N/A | 6.01% | 468 |
Royce European Smaller-Companies Fund | 100.00% | N/A | 0.00% | 248 |
Royce Enterprise Select Fund | 16.48% | N/A | 11.89% | 101 |
Royce SMid-Cap Value Fund | 100.00% | N/A | 100.00% | – |
Royce Partners Fund | 42.99% | N/A | 47.75% | 52 |
Royce Opportunity Select Fund | 0.01% | N/A | 55.17% | 441 |
Royce Global Dividend Value Fund | 66.08% | N/A | 3.63% | 76 |
Royce International Micro-Cap Fund | 71.34% | N/A | 0.00% | – |
Royce International Premier Fund | 75.79% | N/A | 0.00% | 153 |
DEFINITIONS: | |
% | QDI: Qualified Dividend Income; % of net investment income and/or short-term capital gains distributions that qualify for treatment at long-term capital gain rates. |
% | U.S. Govt Income: % of investment income paid from U.S. Government obligations. |
% | Income Qualifying for DRD: % of investment income eligible for the corporate dividend received deduction. |
NET FOREIGN | NET FOREIGN SOURCE | |||||||
FUND | SOURCE INCOME | INCOME PER SHARE | FOREIGN TAX | FOREIGN TAX PER SHARE | ||||
Royce European Smaller-Companies Fund | $455,474 | $0.2068 | $107,233 | $0.0487 | ||||
Royce Global Dividend Value Fund | 218,014 | 0.2695 | 27,272 | 0.0337 | ||||
Royce International Micro-Cap Fund | 63,421 | 0.0964 | 8,161 | 0.0124 | ||||
Royce International Premier Fund | 202,692 | 0.1842 | 22,980 | 0.0209 | ||||
72 | The Royce Funds 2014 Annual Report to Shareholders |
Trustees and Officers |
All Trustees and Officers may be reached c/o The Royce Funds, 745 Fifth Avenue, New York, NY 10151 |
Charles M. Royce, Trustee1, President |
Age: 75 | Number of Funds Overseen: 33 | Tenure: Since 1982 |
Non-Royce Directorships: Director of TICC Capital Corp. |
Principal Occupation(s) During Past Five Years: Chief Executive Officer and Chairman of Board of Managers of Royce & Associates, LLC (“Royce”), the Trust’s investment adviser. |
Christopher D. Clark, Trustee1, Vice President |
Age: 49 | Number of Funds Overseen: 32 | Tenure: Since 2014 |
Principal Occupation(s) During Past Five Years: President (since July 2014), Co-Chief Investment Officer (Since January 2014) and Managing Director of Royce, having been employed by Royce since May 2007. |
Patricia W. Chadwick, Trustee |
Age: 66 | Number of Funds Overseen: 33 | Tenure: Since 2009 |
Non-Royce Directorships: Trustee of ING Mutual Funds and Director of Wisconsin Energy Corp. |
Principal Occupation(s) During Past 5 Years: Consultant and President of Ravengate Partners LLC (since 2000). |
Richard M. Galkin, Trustee |
Age: 76 | Number of Funds Overseen: 33 | 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: 75 | Number of Funds Overseen: 33 | Tenure: Since 1989 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: Attorney and President of Health Policy Associates, Inc., consultants. Mr. Isaacs’s prior business experience includes having served as President of the Center for Health and Social Policy (from 1996 to 2012); Director of Columbia University Development Law and Policy Program and Professor at Columbia University (until August 1996). |
Arthur S. Mehlman, Trustee |
Age: 72 | Number of Funds Overseen: 51 | Tenure: Since 2004 |
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 18 Legg Mason Funds. |
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 Municipal Mortgage & Equity, LLC (from October 2004 to April 1, 2011); 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). |
David L. Meister, Trustee |
Age: 75 | Number of Funds Overseen: 33 | Tenure: Since 1982 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: Consultant. Chairman and Chief Executive Officer of The Tennis Channel (from June 2000 to March 2005). Mr. Meister’s prior business experience includes having served as Chief Executive Officer of Seniorlife.com, a consultant to the communications industry, President of Financial News Network, Senior Vice President of HBO, President of Time-Life Films, and Head of Broadcasting for Major League Baseball. |
G. Peter O’Brien, Trustee |
Age: 69 | Number of Funds Overseen: 51 | Tenure: Since 2001 |
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 18 Legg Mason Funds; Director of TICC Capital Corp. |
Principal Occupation(s) During Past Five Years: Trustee Emeritus of Colgate University (since 2005); Board Member of Hill House, Inc. (since 1999); Formerly: Trustee of Colgate University (from 1996 to 2005), President of Hill House, Inc. (from 2001 to 2005) and Managing Director/Equity Capital Markets Group of Merrill Lynch & Co. (from 1971 to 1999). |
John D. Diederich, Vice President and Treasurer |
Age: 63 | Tenure: Since 2001 |
Principal Occupation(s) During Past Five Years: Chief Operating Officer, Managing Director and member of the Board of Managers of Royce; Chief Financial Officer of Royce; Director of Administration of the Trust; and President of RFS, having been employed by Royce since April 1993. |
Jack E. Fockler, Jr., Vice President |
Age: 56 | Tenure: Since 1995 |
Principal Occupation(s) During Past Five Years: Managing Director and Vice President of Royce, and Vice President of RFS, having been employed by Royce since October 1989. |
Daniel A. O’Byrne, Vice President and Assistant Secretary |
Age: 52 | Tenure: Since 1994 |
Principal Occupation(s) During Past Five Years: Principal and Vice President of Royce, having been employed by Royce since October 1986. |
Francis D. Gannon, Vice President |
Age: 47 | Tenure: Since 2014 |
Principal Occupation(s) During Past Five Years: Co-Chief Investment Officer (Since January 2014) and Managing Director of Royce, having been employed by Royce since September 2006. |
John E. Denneen, Secretary and Chief Legal Officer |
Age: 47 | Tenure: 1996-2001 and Since April 2002 |
Principal Occupation(s) During Past Five Years: General Counsel, Chief Legal and Compliance Officer, and Secretary of Royce; Secretary and Chief Legal Officer of The Royce Funds. |
Lisa Curcio, Chief Compliance Officer |
Age: 55 | Tenure: Since 2004 |
Principal Occupation(s) During Past Five Years: Chief Compliance Officer of The Royce Funds (since October 2004) and Compliance Officer of Royce (since June 2004). |
1 | Interested Trustee. |
Trustees will hold office until their successors have been duly elected and qualified or until their earlier resignation or removal. The Statement of Additional Information, which contains additional information about the Trust’s trustees and officers, is available and can be obtained without charge at www.roycefunds.com or by calling (800) 221-4268. |
The Royce Funds 2014 Annual Report to Shareholders | 73 |
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 December 31, 2014, 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 December 31, 2014 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. |
Sector weightings are determined using the Global Industry Classification Standard (“GICS”). GICS was developed by, and is the exclusive property of, Standard & Poor’s Financial Services LLC (“S&P”) and MSCI Inc. (“MSCI”). GICS is the trademark of S&P and MSCI. “Global Industry Classification Standard (GICS)” and “GICS Direct” are service marks of S&P and MSCI. |
All indexes referred to are unmanaged and capitalization weighted. Each index’s returns include net reinvested dividends and/or interest income. Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. The Russell 2000 is an index of domestic small-cap stocks. It measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 Index. The Russell 1000 Index is an index of domestic large-cap stocks. It measures the performance of the 1,000 largest publicly traded U.S. companies in the Russell 3000 Index. The Russell Microcap Index includes 1,000 of the smallest securities in the Russell 2000 Index, along with the next smallest eligible securities as determined by Russell. The Russell 2500 is an index of domestic small- to mid-cap stocks. It includes approximately 2,500 of the smallest securities in the Russell 3000 Index. The returns for the Russell 2500—Financial Services Sector represent those of the financial services companies within the Russell 2500 Index. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. It includes approximately 800 of the smallest securities in the Russell 1000 Index. The Russell Global Small Cap Index is an index of global small-cap stocks. The Russell Global ex-U.S. Large Cap Index is an index of global large-cap stocks, excluding the United States. The Russell Global ex-U.S. Small Cap Index is an index of global small-cap stocks, excluding the United States. The Russell Europe Small Cap Index is an index of European small-cap stocks. The S&P 500 is an index of U.S. large-cap stocks, selected by Standard & Poor’s based on market size, liquidity, and industry grouping, among other factors. The CBOE Volatility Index (VIX) measures market expectations of near-term volatility conveyed by S&P 500 Stock Index option prices. The Nasdaq Composite is an index of the more than 3,000 common equities listed on the Nasdaq stock exchange. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index. Returns for the market indexes used in this report were based on information supplied to Royce by Russell Investments. Royce has not independently verified the above described information. |
The Price-Earnings, or P/E, Ratio is calculated by dividing a company’s share price by its trailing 12-month earnings-per share (EPS). The Price-to-Book, or P/B, Ratio is calculated by dividing a company’s share price by its book value per share. The Morningstar Style Map uses proprietary scores of a stock’s value and growth characteristics to determine its placement in one of the five categories listed on the horizontal axis. These characteristics are then compared to those of other stocks within the same market capitalization band. Each is scored from zero to 100 for both value and growth attributes. The value score is subtracted from the growth score to determine the overall style score. For the vertical, market cap axis, Morningstar subdivides into size groups. Giant-cap stocks are defined as those that account for the top 40% of the capitalization of each style zone; large-cap stocks represent the next 30%; mid-cap stocks the next 20%; small-cap stocks the next 7%; micro-cap stocks the smallest 3%. |
Investments in securities of micro-cap, small-cap, and/or mid-cap companies may involve considerably more risk than investments in securities of larger-cap companies. (Please see “Primary Risks for Fund Investors” in the prospectus.) Certain Royce Funds may invest up to 25% (100% for Royce Select Fund II, European Smaller-Companies, Global Dividend Value, International Micro-Cap, and International Premier Fund, 35% of Partners, Financial Services and SMid-Cap Value Funds, and 10% of Select Fund I) of their respective assets in foreign securities, which generally may involve political, economic, currency and other risks not encountered in U.S. investments. (Please see “Investing in Foreign Securities” in the prospectus.) Royce Select I, Select II, Enterprise Select, and Opportunity Select Funds may sell securities short which involves selling a security it does not own in anticipation that the security’s price will decline. Short sales present unlimited risk on an individual stock basis since the Fund may be required to buy security sold short at a time when the security has appreciated in value. A Fund that invests a significant portion of its assets in a limited number of stocks may be subject to considerably more risk than a more broadly diversified Fund because a decline in the value of any of these stocks would cause that Fund’s overall value to decline to a greater degree. A broadly diversified portfolio does not, however, ensure a profit for a Fund or guarantee against loss. Please read the prospectus carefully before investing or sending money. A copy of the Funds’ current prospectus and Statement of Additional Information may be obtained by calling (800) 221-4268, or by visiting www.roycefunds.com. All publicly released material Fund information is disclosed by the Funds on their website at www.roycefunds.com. The Royce Funds is a service mark of The Royce Funds. Distributor: Royce Fund Services, Inc. |
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. |
The Royce Funds have based the forward-looking statements included in this review and report on information available to us on the date of the report, and we assume no obligation to update any such forward-looking statements. Although The Royce Funds undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make through future shareholder communications or reports. |
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 (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 SEC’s website at www.sec.gov. The Royce Funds’ holdings are also on the Funds’ website approximately 15 to 20 days after each calendar quarter end and remain available until the next quarter’s holdings are posted. 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 (202) 942-8090. The Funds’ complete schedules of investments are updated quarterly, and are available at www.roycefunds.com. |
74 | The Royce Funds 2014 Annual Report to Shareholders |
About The Royce Funds | Contact Us | ||||
Wealth of Experience With approximately $32 billion in total assets under management, Royce & Associates is committed to the same investment principles that have served us well for more than 40 years. Chuck Royce, our Chief Executive Officer, enjoys one of the longest tenures of any active mutual fund manager. Royce’s investment staff also includes 24 portfolio managers and analysts and nine traders. | GENERAL INFORMATION General Royce Funds information including: • How to open an account • An overview of our firm and Funds • Ordering literature including Prospectuses (800) 221-4268 | ||||
Multiple Funds, Common Focus Our goal is to offer both individual and institutional investors the best available micro-cap, small-cap, and/or mid-cap portfolios. We have chosen to concentrate on smaller-company investing by providing investors with a range of funds that take full advantage of this large and diverse sector. | ACCOUNT INFORMATION Speak with a representative about: • Your account, transactions, and forms (800) 841-1180 | ||||
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 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. | FINANCIAL ADVISORS, CONSULTANTS, AND INSTITUTIONS Speak with your regional Royce contact regarding: • Scheduling a meeting or call • Information about our firm, strategies, and funds • Resources for financial professionals, such as portfolio attribution reports (800) 337-6923 | ||||
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 more than $185 million invested in The Royce Funds and are often among the largest individual shareholders. | AUTOMATED ACCOUNT INFORMATION 24-hour Automated Telephone Service (800) 878-6923 | ||||
roycefunds.com | |||||
Item 2. Code(s) of Ethics. As of the end of the period covered by this report, the Registrant had adopted a code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of this code of ethics is filed as an exhibit to this Form N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the period covered by this report.
Item 3. Audit Committee Financial Expert.
(a)(1) | The Board of Trustees of the Registrant has determined that it has an audit committee financial expert. | ||
(a)(2) | Arthur S. Mehlman and Patricia W. Chadwick were designated by the Board of Trustees as the Registrant’s Audit Committee Financial Experts, effective April 15, 2004 and April 8, 2010, respectively. Mr. Mehlman and Ms. Chadwick are “independent” as defined under Item 3 of Form N-CSR. |
Item 4. Principal Accountant Fees and Services.
(a) | Audit Fees: | |
Year ended December 31, 2014 - $580,234 | ||
Year ended December 31, 2013 - $573,835 | ||
(b) | Audit-Related Fees: | |
Year ended December 31, 2014 - $0 | ||
Year ended December 31, 2013 - $0 | ||
(c) | Tax Fees: | |
Year ended December 31, 2014 - $256,143 – Preparation of tax returns and excise tax review | ||
Year ended December 31, 2013 - $253,050 – Preparation of tax returns and excise tax review | ||
(d) | All Other Fees: | |
Year ended December 31, 2014 - $0 | ||
Year ended December 31, 2013 - $0 |
(e)(1) Annual Pre-Approval: On an annual basis, the Registrant’s independent auditor submits to the Audit Committee a schedule of proposed audit, audit-related, tax and other non-audit services to be rendered to the Registrant and/or investment adviser(s) for the following year that require pre-approval by the Audit Committee. This schedule provides a description of each type of service that is expected to require pre-approval and the maximum fees that can be paid for each such service without further Audit Committee approval. The Audit Committee then reviews and determines whether to approve the types of scheduled services and the projected fees for them. Any subsequent revision to already pre-approved services or fees (including fee increases) are presented for consideration at the next regularly scheduled Audit Committee meeting, as needed.
If subsequent to the annual pre-approval of services and fees by the Audit Committee, the Registrant or one of its affiliates determines that it would like to engage the Registrant’s independent auditor to perform a service not already pre-approved, the request is to be submitted to the Registrant’s Chief Financial Officer, and if he or she determines that the service fits within the independence guidelines (e.g., it is not a prohibited service), he or she will then arrange for a discussion of the proposed service and fee to be included on the agenda for the next regularly scheduled Audit Committee meeting so that pre-approval can be considered.
Interim Pre-Approval: If, in the judgment of the Registrant’s Chief Financial Officer, a proposed engagement needs to commence before the next regularly scheduled Audit Committee meeting, he or she shall submit a written summary of the proposed engagement to all members of the Audit Committee, outlining the services, the estimated maximum cost, the category of the services (e.g., audit, audit-related, tax or other) and the rationale for engaging the Registrant’s independent auditor to perform the services. To the extent the proposed engagement involves audit, audit-related or tax services, any individual member of the Audit Committee who is an independent Board member is authorized to pre-approve the engagement. To the extent the proposed engagement involves non-audit services other than audit-related or tax, the Chairman of the Audit Committee is authorized to
pre-approve the engagement. The Registrant’s Chief Financial Officer will arrange for this interim review and coordinate with the appropriate member(s) of the Committee. The independent auditor may not commence the engagement under consideration until the Registrant’s Chief Financial Officer has informed the auditor in writing that pre-approval has been obtained from the Audit Committee or an individual member who is an independent Board member. The member of the Audit Committee who pre-approves any engagements in between regularly scheduled Audit Committee meetings is to report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next regularly scheduled meeting.
(e)(2) | Not Applicable | ||
(f) | Not Applicable | ||
(g) | Year ended December 31, 2014 - $256,143 | ||
Year ended December 31, 2013 - $253,050 | |||
(h) | No such services were rendered during 2014 or 2013. |
Item 5. Audit Committee of Listed Registrants. Not Applicable.
Item 6. Investments.
(a) See Item 1.
(b) Not Applicable
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. Not Applicable.
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.
Item 12. Exhibits. Attached hereto.
(a)(1) The Registrant’s code of ethics pursuant to Item 2 of Form N-CSR.
(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: March 6, 2015 |
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: March 6, 2015 | Date: March 6, 2015 |