Royce Fund N-CSRS Certified semi-annual shareholder report (management investment company)

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, Esq.

745 Fifth Avenue

New York, NY 10151

Registrant's telephone number, including area code: (212) 508-4500

Date of fiscal year end: December 31, 2019

Date of reporting period: January 1, 2019 – June 30, 2019

Item 1. Reports to Shareholders.

JUNE 30, 2019

2019 Semiannual

Review and Report to Shareholders

Royce Dividend Value Fund
Royce Global Financial Services Fund
Royce International Premier Fund
Royce Low-Priced Stock Fund
Royce Micro-Cap Fund
Royce Opportunity Fund
Royce Pennsylvania Mutual Fund
Royce Premier Fund
Royce Small-Cap Value Fund
Royce Smaller-Companies Growth Fund
Royce Special Equity Fund
Royce Total Return Fund
Beginning on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Funds’ shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Funds or from your financial intermediary (such as a broker-dealer or bank). Instead, the reports will be made available on the Funds’ website (www.roycefunds.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Funds electronically anytime by contacting your financial intermediary or, if you are a direct investor with the Funds, by calling 1-800-841-1180. Beginning on January 1, 2019, you may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly with the Funds, you can call 1-800-841-1180 to let the Funds know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Funds held in your account if you invest through your financial intermediary or all Funds held with our fund complex if you invest directly with the Funds.
roycefunds.com

Table of Contents
Semiannual Review
Letter to Our Shareholders	2
Performance and Expenses	6
The Royce Funds and Relative Risk-Adjusted Rolling Returns	7
Semiannual Report to Shareholders
Managers’ Discussions of Fund Performance
Royce Dividend Value Fund	8
Royce Global Financial Services Fund	10
Royce International Premier Fund	12
Royce Low-Priced Stock Fund	14
Royce Micro-Cap Fund	16
Royce Opportunity Fund	18
Royce Pennsylvania Mutual Fund	20
Royce Premier Fund	22
Royce Small-Cap Value Fund	24
Royce Smaller-Companies Growth Fund	26
Royce Special Equity Fund	28
Royce Total Return Fund	30
Schedules of Investments and Financial Statements	32
Notes to Financial Statements	78
Understanding Your Fund’s Expenses	90
Trustees and Officers	92
Board Approval of Investment Advisory Agreements	93
Results of Shareholders Meetings	96
Notes to Performance and Other Important Information	97

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Letter to Our Shareholders

A SMOOTH ASCENT AMID HIGH ANXIETY

The first six months of 2019 offered equity investors almost everything they could have hoped for following the high anxiety of a recession scare and the bearish fourth quarter of 2018, when the small-cap Russell 2000 Index fell 20.2%. Stocks immediately showed great resilience, and then some, by roaring back in the first half of the year. A highly welcome double-digit rebound in the first quarter was followed by a seesawing second quarter that saw more motion than progress. This was an understandable pause that gave the market time to digest the prior advance. The upshot was a solid advance rise in the year’s first six months, a period that saw low trading volumes and little volatility, which was mostly confined to a small decline in May. During the first half, the Russell 2000 advanced 17.0% while its large-cap sibling, the Russell 1000 Index, was even better, up 18.8%. In fact, performance in the first half generally trended higher the further up the market capitalization scale you traveled.

Equity Indexes
Total Returns
Year-to-Date
through 6/30/19

    Some questioned the substance of this rally, observing that the same risks that fueled last year’s decline were still with us. The list is long and, by now, familiar. Most of the anxiety continues to circulate around the issue of global growth—or the widely rumored imminent lack of it—and its probable negative impact on corporate profits. There wasn’t much in the way of fresh answers to these concerns at the end of June beyond the admittedly consequential Fed pivot to a more dovish stance (as well as subsequent and similar actions promised from the European Central Bank). Yet, while the Fed’s words and actions went some way to reassuring investors that it was prepared to give the markets a dose of stimulus, the effect on economic growth was pretty much nil. Moreover, the increasing tensions around trade and tariffs remain an issue at this writing. With no resolution forthcoming, many companies were lowering expectations and/or offering a more muted outlook, with predictably negative effects on the stocks of many economically sensitive businesses.

    It’s not surprising, then, that equity investors showed a marked preference for safety in the form of large-cap stocks, or chose to bet on better times further down the road by vacuuming up shares of growth issues regardless of capitalization size. Some additional context is also important: large-caps, growth stocks, and defensive areas (that is, bond proxies) have historically done better in low or declining interest rate environments, an atmosphere that has characterized much of the decade following the Financial Crisis, with its record-low interest rates (and the

For details on The Royce Funds’ performance in the period, please turn to the Managers’ Discussions that begin on page 8. Past performance is no guarantee of future results.

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LETTER TO OUR SHAREHOLDERS

‘easy money’ that came with them). With rates still near historic lows, these same stocks have led the market over the last two-plus years. All of this notwithstanding, we believe that the long-term case for small-cap stocks is strong, as we will explain through the course of this letter.

PESSIMISTS, OPTIMISTS—AND US

By periodically inverting the otherwise mostly flat yield curve, the bond market maintained its saturnine insistence that the economy was slowing and potentially, perhaps inevitably, moving toward recession. To be sure, many observers point to the inverted yield curve as iron-clad proof that the current slackening momentum in the pace of growth in the U.S., along with the advanced age of the expansion, is a prelude to a recession. More optimistic voices argue that large-cap stocks spent much of the first half making new all-time highs, that the labor market continues to strengthen, and that the economy continues to expand in spite of a raft of dismal headlines.

    Our own cautiously constructive view is rooted not so much in the macro factors that dominate the headlines but in our own research into companies, their industry dynamics, and our conversations with management teams. We do, however, agree with those who think the U.S. economy is not heading toward recession; we see periodic slowdowns and accelerations in the pace of growth as historically typical. As for the yield curve, the market appears to have figured out before the Fed that persistently low inflation exerts a powerful flattening effect on the curve. To make our case, we have taken up arms—or at least data points—against this sea of troubles to argue for the long-term appeal of fundamentally sound small-cap cyclicals. We see good reasons for investors to be optimistic about the prospects for small-cap stocks, specifically those cyclical areas that populate our portfolios.

THE CASE FOR SMALL-CAP LEADERSHIP

Our first argument is in favor of small-cap returning to market leadership. We make it on the grounds of reversion to the mean, one of our longest-held investment principles. Looking at first-half performance, the resilience of small-cap stocks seemed both apropos and encouraging to us given that we continue to see solid fundamentals for many companies, attractively joined with historically average, or below average, valuation levels. However, small-caps lagged large-caps not only in the first half but also for the one-year period ended June 30, 2019, when the Russell 2000 fell 3.3% versus a gain of 10.0% for the large-cap index. This performance divergence has created a historical oddity that can be seen in the spread between small- and large-cap

returns. It rarely happens over the course of a 12-month period that small-caps are in the red while large-caps are in the black. In fact, it’s happened less than 7% of the time over the past 20 years—in 16 out of 229 monthly rolling 12-month periods.

    What are the implications of this peculiar divergence in performance? In 93% of the following 12-month periods—only 13 of the 14 currently have subsequent periods to measure—small-caps bounced back to outpace large-caps. It’s true that small-caps have historically tended to lag their large-cap siblings when yields are falling—and have often done the same when economic growth is slowing. The resumption of small-cap leadership, then, is contingent on these conditions changing. When rates rise (or simply normalize) and/or the economy reaccelerates, and history strongly suggests that both should, we would expect small-cap to recapture leadership.

What Happened After 12-Month Periods When Large-Caps Rose and Small-Caps Fell?
16 out of 229 Trailing 1-Year Periods from 6/30/99 to 6/30/19

    One additional observation on relative performance: From December 31, 1978 through June 30, 2019, the five-year monthly rolling average return was 10.6% for the Russell 2000 and 11.7% for the Russell 1000, while the five-year average annual total returns for the small- and large-cap indexes for the period ended June 30, 2019 were 7.1% and 10.5%, respectively. With small-caps well below their long-term average, we expect performance to improve to a greater degree than for large-caps, which finished June much closer to their long-term average.

    Our confidence in mean reversion is further grounded in the relative valuation spread between the Russell 2000 and the Russell 1000 at the end of June, which was significantly below its long-term average based on each index’s median last 12-months’ EV/EBIT (enterprise value over earnings before interest and taxes). In fact, small-caps have lagged large-caps for such an extended period of time that they finished June at their cheapest relative to large-caps since 2001.

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LETTER TO OUR SHAREHOLDERS    

    So while no one thinks that stocks are currently bargain priced, it’s also true that the vast and diverse universe of small-cap stocks contains a considerable number of attractive risk/reward opportunities based on the combination of reasonable to attractive valuations (again measured by median EV/EBIT) and profitability.

THE VALUATION SITUATION
When looking for investment candidates, we typically survey the small-cap market for what looks to us like excess pessimism—which is precisely what we’ve been seeing in certain cyclical areas over the last couple of years. Our practice is to then investigate how much of that negative sentiment is already reflected in the current stock price of a given company. So it was significant that at the end of June, cyclical stocks were selling at a greater discount to the Russell 2000 than they had during the fall of 2008—in the teeth of the Financial Crisis. To us, that is the very definition of excess pessimism.

Small-Cap Cyclical Discount
Russell 2000 Relative Median
EV/EBIT¹ (Ex Negative EBIT)
Cyclical/Russell 2000

Source: FactSet

    We suspect that these relatively inexpensive valuations are in large part the result of investors placing undue emphasis on daily macro headlines when trying to understand or anticipate small-cap market movements. (The frequently missed distinction between slower economic growth and a recession is an example of the trouble this can lead to.) We think that investors often fail to fully appreciate the “reaction function,” the response of businesses, central banks, and governments to slowdowns. While we are by no means macro forecasters, it would not surprise us if the global economy grew a little faster over the next year. If history is any guide, this reacceleration could boost small-cap stocks, which have done well on both an absolute and relative basis, especially versus large-caps, when the ISM Manufacturing Index (a common proxy for economic conditions) is on the rise. As unlikely as it currently seems, additional growth could come from a U.S.-China

Small-Cap’s Relative Valuation Is Significantly Below Its Long-Term Average
Russell 2000 vs. Russell 1000 Median LTM EV/EBIT¹ (ex. Negative EBIT Companies) from 12/31/01 to 6/30/19

Source: FactSet

trade deal that addresses tariffs and stokes even modest growth in China, which would likely spur increased activity in Europe as well.

    Moreover, we expect profitable companies in select cyclical areas to do better regardless of which route the global economy takes in the short term. For example, and in spite of reports of revisions, earnings prospects for the second half of 2019 look solid for many of our small-cap cyclical holdings, especially given the relatively weaker third and fourth quarters of 2018 with which 2019’s two second-half quarters will be compared.

    We often seek to identify opportunities at the intersection of quality and value—that is, companies with average or better profitability and lower-than-average valuations. There were three cyclical sectors that had higher-than-average profitability and lower-than-average valuations at the end of June—Industrials, Consumer Discretionary, and Materials.² The relative attractiveness of these and other cyclical areas dovetails nicely with our bottom-up approaches, where the search for fundamentally sound, well-managed companies with solid growth potential has more recently led us overwhelmingly to cyclical businesses.

SMALL-CAP STOCKS AND THE URGE TO MERGE
The appeal of small-cap stocks can also be seen in recent merger & acquisition (M&A) activity. The number of small-cap M&A deals in the U.S. hit a 10-year high in June, with 503 transactions announced for the trailing four quarters through the end of that month, according to Bloomberg data. This is the largest number of deals in the asset class since before the Financial Crisis. We anticipate that this trend will

1	Enterprise Value/Earnings before interest and taxes.
2	Based on the relation between each sector’s average return on equity (ROE) for the five years ended 6/30/19 (excluding companies with negative ROE) and median EV/EBIT (excluding companies with negative earnings).
Cyclicals are defined as follows: Communication Services, Consumer Discretionary, Energy, Financials, Industrials, Information Technology, and Materials.

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LETTER TO OUR SHAREHOLDERS    

continue for a variety of reasons. CEO’s are under relentless pressure to grow profits. If they believe organic growth opportunities are limited, then inorganic paths such as acquisitions begin to make sense. Along similar lines, the CEO of a small-cap company might look more favorably on a buyout offer at a significant stock price premium if he or she sees limited opportunities for their own organic growth. However paradoxical, we can see how a further deceleration in economic growth could lead to an acceleration in M&A deals. With their attractive relative valuations, many small-cap companies should continue to be attractive takeover targets. We also think that many better-managed small-cap businesses will continue to be active as acquirers. We meet with many management teams that run companies with strong balance sheets and are eager to find ways to grow. With interest rates so low, many acquisitions are likely to be accretive, which increases their attraction to a potential buyer.

THE NEXT LEG OF THE JOURNEY
Disagreements about the condition of the market and state of the economy have created opportunities for active managers and other discerning stock pickers because there’s so little consensus about what constitutes value or quality. Somewhat counterintuitively, this has made us generally quite comfortable with what we’re holding in each of our strategies.

    Of course, our overall cyclical tilt would not immunize any of our portfolios from a recession. However, the market has provided opportunities to build portfolios that we think are not only inexpensive, but that we think should also provide healthy returns going forward in our most valuation-sensitive strategies. We also expect that many of our high-quality holdings (specifically those in Industrials and Information Technology) could outperform cyclicals in general in the event of a recession thanks to their status as market leaders in global niches as opposed to being one of many players in a highly fragmented commodity business.

    Across all of our strategies, we’ve been adding or holding positions in areas such as technology, industrials, and many other areas that we

think should do well under present or improved conditions. Equally important, many of these holdings already have valuations that seem to reflect a high probability of an imminent recession. Any economic news that shows improvement—or simply the absence of worsening conditions—may lift these stocks.

    In framing this promising picture of the long-term possibilities for small-cap cyclicals, we also recognize that the lengthy list of current risks is creating an even higher level of uncertainty than usual. However, having done this for as long as we have—four decades and counting—we are also highly aware that the markets seldom do what’s most expected. Given today’s widespread concerns about slowing growth, increasing trade tensions, and the extended economic cycle, the most surprising outcome—as we’ve suggested—might be a rally catalyzed by improved growth.

    When looking forward, we believe it’s appropriate to be humble about our own forecasts and respectful of those that differ from ours. With what seems like ever increasing tariff and trade tensions, there is a plausible negative scenario of slowing Chinese growth that tips languishing European economies into recession and pushes global yields even lower. This would in all likelihood lead to greater instability in global financial markets as well as breeding heightened risk aversion. While we think this outcome is less likely than others, we also believe that investors should remain mindful of the reaction function we mentioned earlier. Additionally, environments that feature increased uncertainty, turbulence, and market volatility often provide opportunities for companies with leading market positions and strong balance sheets to solidify or expand market share. Volatile environments have also been historically favorable for active small-cap managers. We also see four favorable factors in the current market environment—low inflation, modest valuations, moderate growth, and increased access to capital—that we think support solid-to-strong small-cap performance in the intermediate term regardless of current anxieties. These four factors paint an attractive picture in our view, one that small-cap investors might be at risk of missing if they pay more attention to the macro picture than to company fundamentals, where we think the real action is.

Sincerely,

Charles M. Royce	Christopher D. Clark	Francis D. Gannon
Chairman,	Chief Executive Officer, and	Co-Chief Investment Officer,
Royce & Associates, LP	Co-Chief Investment Officer,	Royce & Associates, LP
	Royce & Associates, LP
July 31, 2019

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Performance and Expenses

Performance and Expenses
									ANNUAL OPERATING EXPENSES (%)
	YTD1	1-YR	5-YR	10-YR	15-YR	20-YR	45-YR/SINCE INCEPTION	INCEPTION DATE		GROSS	NET
Royce Dividend Value Fund	20.71	3.19	5.02	11.97	8.54	N/A	8.49	5/3/04		1.43	1.34
Royce Global Financial Services Fund	16.26	-1.92	5.78	11.11	8.08	N/A	7.88	12/31/03		1.77	1.58
Royce International Premier Fund	21.38	9.26	8.64	N/A	N/A	N/A	7.84	12/31/10		1.59	1.44
Royce Low-Priced Stock Fund	14.53	-5.00	0.98	7.14	5.20	8.16	9.61	12/15/93		1.53	1.49
Royce Micro-Cap Fund	10.59	-8.64	0.90	7.31	5.74	8.55	10.24	12/31/91		1.25	1.24
Royce Opportunity Fund	15.63	-11.06	4.11	13.38	7.69	10.63	11.44	11/19/96		1.20	1.20
Royce Pennsylvania Mutual Fund	17.81	0.68	6.16	12.29	8.32	9.77	14.14	N/A		0.92	0.92
Royce Premier Fund	21.69	6.28	6.68	12.47	9.59	10.70	11.60	12/31/91		1.17	1.17
Royce Small-Cap Value Fund	8.88	-5.64	1.96	8.76	7.30	N/A	8.82	6/14/01		1.53	1.49
Royce Smaller-Companies Growth Fund	21.08	-1.53	6.54	11.09	7.79	N/A	10.95	6/14/01		1.52	1.49
Royce Special Equity Fund	4.59	-5.42	3.53	9.66	6.89	9.25	8.46	5/1/98		1.18	1.18
Royce Total Return Fund	15.32	0.36	5.74	11.83	7.72	9.06	10.40	12/15/93		1.20	1.20
INDEX
Russell 2000	16.98	-3.31	7.06	13.45	8.15	7.77	N/A	N/A		N/A	N/A
Russell Microcap	14.15	-10.39	5.52	12.54	6.28	N/A	N/A	N/A		N/A	N/A
Russell 2000 Value	13.47	-6.24	5.39	12.40	7.28	8.64	N/A	N/A		N/A	N/A
Russell 2500	19.25	1.77	7.66	14.44	9.07	8.92	N/A	N/A		N/A	N/A
MSCI ACWI ex USA Small Cap	11.60	-5.94	2.77	8.48	7.40	6.89	N/A	N/A		N/A	N/A

¹ Not annualized.

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. Investment and Service Class shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund (2% for Royce International Premier 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. Certain immaterial adjustments were made to the net assets of Royce Pennsylvania Mutual and Premier Funds at 6/30/19 for financial reporting purposes, and as a result 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 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 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, 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: 1.24% for Royce Micro-Cap Fund; 1.34% for Royce Dividend Value Fund; 1.44% for Royce International Premier Fund; 1.49% for Royce Global Financial Services, Low-Priced Stock, Small-Cap Value, and Smaller-Companies Growth Funds through April 30, 2020.

Service Class shares bear an annual distribution expense that is not borne by the Funds’ Investment Class. If such distribution expenses had been reflected for Funds showing Investment Class performance, returns would have been lower. 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 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.) Certain Funds generally invest a significant portion of their assets in a limited number of stocks, which may involve considerably more risk than a more broadly diversified portfolio because a decline in the value of any of these stocks would cause their overall value to decline to a greater degree. A broadly diversified portfolio, however, does not ensure a profit or guarantee against loss. This Review and Report must be preceded or accompanied by a prospectus. Please read the prospectus carefully before investing or sending money. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. 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 small-cap Russell 2000 Index along with the next smallest eligible securities as determined by Russell. The Russell 2000 Value Index consists of the respective value stocks within the Russell 2000 as determined by Russell Investments. The Russell 2500 is an unmanaged, capitalization-weighted index of the 2,500 smallest publicly traded U.S. companies in the Russell 3000 index. 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 MSCI ACWI ex USA Small Cap Index is an unmanaged, capitalization-weighted index of global small-cap stocks, excluding the United States. The performance of an index does not represent exactly any particular investment as you cannot invest directly in an index. Distributor: Royce Fund Services, LLC.

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The Royce Funds and Relative Risk-Adjusted Rolling Returns

We have always believed that a long-term perspective is crucial for determining the success of an investment approach.

Flourishing in an up market is wonderful, but surviving a bear market by losing less (or not at all) is equally desirable, making results over bull and bear periods the true tests of a portfolio’s mettle. This is why we prefer to examine results that include up and down market phases—primarily by looking at rolling return periods.

    Our rationale for using long-term rolling periods is based on the fact that investors buy and sell at many times throughout any given year. In our view, examining performance over a larger series of dates using rolling returns provides a more comprehensive picture of performance, providing a more in-depth measure than calendar-based annualized periods. This allows an investor to evaluate the consistency of performance over time—including the ups and downs of market cycles.

    Closely related to this preference for rolling period analysis is the idea that the success of an investment approach should also be evaluated based on the return it generates compared with the amount

of risk taken. We aim to achieve strong, long-term absolute and relative returns on both a traditional and risk-adjusted basis. We use Sharpe ratios, a widely used measure of return per unit of risk that measures the volatility of returns to gauge how our major domestic strategies with more than 20 years of history have fared versus their benchmark, the Russell 2000 Index. We calculate the Sharpe Ratio for each relevant Fund and the index for each rolling five- and 10-year period over the past 20 years and then show both the average Sharpe ratio for these periods as well as each Fund’s batting average—that is, the number and percentage of times the Fund beat the index over the total number of periods—as a measure of that Fund’s success.

    We are very pleased that on a monthly rolling risk-adjusted basis, our four largest Funds had higher average Sharpe Ratios than the Russell 2000 for the majority of both the 10- and 5-year periods for the 20 years ended 6/30/19.

Royce Funds Relative Risk Adjusted Returns: Monthly Rolling Sharpe Ratios

5- and 10-Year Monthly Rolling Sharpe Ratios–20 Years through 6/30/19

FUND	PERIODS BEATING THE INDEX		FUND AVERAGE	RUSSELL 2000 AVERAGE
Royce Special Equity Fund
10-Year	114/121	94%	0.58	0.41
5-Year	113/181	62%	0.65	0.51
Royce Total Return Fund
10-Year	112/121	93%	0.49	0.41
5-Year	147/181	81%	0.64	0.51
Royce Premier Fund
10-Year	105/121	87%	0.55	0.41
5-Year	115/181	64%	0.65	0.51
Royce Pennsylvania Mutual Fund
10-Year	67/121	55%	0.47	0.41
5-Year	106/181	59%	0.59	0.51
Royce Opportunity Fund
10-Year	53/121	44%	0.43	0.41
5-Year	106/181	59%	0.53	0.51

Included are all Royce Funds benchmarked against the Russell 2000 with at least 20 years of history.

TheSharpe Ratio is calculated for a specified period by dividing the fund or index’s average excess returns by its annualized standard deviation. The higher the Sharpe Ratio, the better the fund or index’s historical risk-adjusted performance.Standard Deviation is a statistical measure within which a fund or index’s total returns have varied over time. The greater the standard deviation, the greater a fund or index’s volatility. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.

Past performance is no guarantee of future results. For more information on performance please see page 6.

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MANAGERS’ DISCUSSION

Royce Dividend Value Fund (RDV)

Chuck Royce
Jay Kaplan, CFA

FUND PERFORMANCE

Royce Dividend Value Fund gained 20.7% for the year-to-date period ended June 30, 2019, outperforming its benchmarks, the Russell 2000 and Russell 2500 Indexes, which rose 17.0% and 19.2%, respectively, for the same period.

WHAT WORKED... AND WHAT DIDN’T

Nine of the 10 equity sectors in which the Fund had investments finished the first half in the black. Industrials and Financials were the portfolio’s biggest sectors at the end of June, accounting for nearly 60% of its total assets. Unsurprisingly, then, they were also the top-contributing sectors for 2019’s first half by a comfortable margin. Materials and Information Technology also made solid positive impacts, while Consumer Staples detracted modestly, and Utilities and Real Estate made the smallest contribution.

    At the industry level, we were happy to see sector diversity among the largest contributors, with the top five groups coming from four different sectors. Capital markets (Financials) made an outsized impact consistent with its status as our largest industry weight during the first half. Machinery and aerospace & defense (both from Industrials), metals & mining (Materials), and electronic equipment, instruments & components (Information Technology) followed. Only two of the portfolio’s 36 industries detracted from performance—food & staples retailing (Consumer Staples) and specialty retail (Consumer Discretionary) while a third—hotels, restaurants & leisure (also from Consumer Discretionary)—was essentially flat.

    Each of the Fund’s five top-contributing positions finished June as one if its 10 biggest holdings. HEICO Corporation, which manufacturers replacement aerospace parts, saw its shares reach higher altitudes after the company reported strong organic sales and expanding margins, lifted by strength in its flight support and electronics segments. These developments led HEICO to raise guidance for the rest of the year. Technology and services provider KBR operates in three segments: Government Services, Technology, and Hydrocarbons Services. Its shares benefited from improved revenues that were chiefly driven by its government-facing and technology businesses. Consumer dispensing systems specialist AptarGroup acquired a packing technology company late in 2018. Along with impressive growth in its core business, the acquisition has helped the company to post improved sales and earnings so far in 2019.
    Agricultural equipment supplier Lindsay Corporation was the only one of the portfolio’s nine machinery holdings to finish the first half in the red. The company faced several challenges, including lower farming incomes that have crimped capital spending and led to ongoing weakness in its core market, excess rainfall and flooding in the Midwest, and tariff and trade war woes. In early July, however, Lindsay noted an uptick in domestic irrigation sales, while recent improvement in key crop prices such as corn have brightened agricultural sentiment. In addition, the outlook for international irrigation demand remains favorable. We trimmed our stake in the first half. We acted similarly with our position in FamilyMart UNY Holdings, a Japanese convenience store franchise chain. While the Japanese economy has been improving, its pace has not been vigorous enough to help many retailers. Intensifying competition, skittish consumer confidence, and labor shortages at stores and in logistics also played a role in the decline of its shares during the first half. The stock of footwear manufacturer and retailer Caleres was itself hurt by several factors, including reduced traffic and same-store sales growth at the firm’s Famous Footwear retailer. Our long-term perspective and high regard for its stable of well-known brands, such as Sam Edelman and Allen-Edmonds, led us to begin adding shares in June.
    Relative to the Russell 2000, the Fund’s advantage came almost entirely from stock selection, though sector allocation made a small contribution. Boosted mostly by stock picking (with our overweight helping to a lesser degree), Industrials was the biggest source of outperformance in the first half. Stock selection in aerospace & defense was especially additive. Financials followed with an advantage driven by stock selection in capital markets. Conversely, our cash position was the largest source of underperformance. With equity returns running high, even the Fund’s 3.0% average weight was enough to hamper relative results. Consumer Discretionary also detracted, as ineffective stock picks in household durables and specialty retail hurt results versus the Russell 2000.

Top Contributors to Performance
Year-to-Date Through 6/30/191
HEICO Corporation Cl. A	1.87
KBR	1.07
AptarGroup	0.90
KKR & Co. Cl. A	0.84
IDEX Corporation	0.84
1 Includes dividends

Top Detractors from Performance
Year-to-Date Through 6/30/192
Lindsay Corporation	-0.31
FamilyMart UNY Holdings	-0.15
Caleres	-0.10
State Street	-0.08
American Eagle Outfitters	-0.07
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

Markets are very good at surprising most investors. Today, given widespread concerns about slowing growth, increasing trade tensions, and the extended economic cycle, the most surprising outcome might be a rally. We see four favorable factors in the current market environment—low inflation, modest valuations, moderate growth, and increasing liquidity. When taken together, we see these factors as painting an attractive picture for small-cap investors. With so much attention on negative macro issues, we think investors may be missing this positive picture. We see highly promising select opportunities in dividend-paying small-cap cyclicals, particularly in Industrials, Financials, and Materials.

8 | The Royce Funds 2019 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS   RYDVX RDVIX RDIIX RDVCX

Performance and Expenses Average Annual Total Return (%) Through 6/30/19
	JAN-JUN 20191	1-YR	3-YR	5-YR	10-YR	15-YR	SINCE INCEPTION (5/3/04)
RDV	20.71	3.19	11.09	5.02	11.97	8.54	8.49
Annual Gross Operating Expenses: 1.43% Annual Net Operating Expenses: 1.34%
1 Not annualized

Relative Risk Adjusted Returns: Monthly Rolling Sharpe Ratios
Since Inception Through 6/30/19
On a monthly rolling risk-adjusted basis, the Fund outperformed the Russell 2000 in 94% of all 10-year periods and 53% of all 5-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	58/62	94%	0.53	0.49
5-year	65/122	53%	0.57	0.54

¹Average of monthly rolling Sharpe Ratios over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^TM with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^TM. 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 97 for additional information.

Value of $10,000

Invested on 5/3/04 as of 6/30/19 ($)

Top 10 Positions
% of Net Assets
HEICO Corporation Cl. A	4.3
AptarGroup	3.3
FLIR Systems	3.2
KKR & Co. Cl. A	3.1
Quaker Chemical	3.0
IDEX Corporation	2.7
Reliance Steel & Aluminum	2.4
KBR	2.4
Spirax-Sarco Engineering	2.3
Graco	2.3

Portfolio Sector Breakdown
% of Net Assets
Industrials	29.3
Financials	28.2
Materials	14.3
Information Technology	9.0
Consumer Discretionary	7.3
Energy	6.2
Health Care	2.2
Utilities	1.5
Real Estate	0.4
Consumer Staples	0.4
Cash and Cash Equivalents	1.2

Calendar Year Total Returns (%)
YEAR	RDV
2018	-16.2
2017	21.7
2016	16.4
2015	-5.7
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 6/30/19 (%)

	UPSIDE	DOWNSIDE
10-Year	87	84
From 6/30/04 (Start of Fund’s First Full Quarter)	89	78

Portfolio Diagnostics
Fund Net Assets	$110 million
Number of Holdings	86
Turnover Rate	6%
Average Market Capitalization1	$4,420 million
Weighted Average P/E Ratio2,3	17.4x
Weighted Average P/B Ratio2	2.6x
Active Share4	97%
U.S. Investments (% of Net Assets)	67.6%
Non-U.S. Investments (% of Net Assets)	31.2%

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 (2% of portfolio holdings as of 6/30/19).
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). Certain immaterial adjustments were made to the net assets of Royce Dividend Value Fund at 6/30/15 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 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, without right of termination, to waive fees and/or reimburse 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 1.34% through April 30, 2020. 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 year-to-date performance for 2019. 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. 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 manager’s 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 2019 Semiannual Report to Shareholders | 9

MANAGERS’ DISCUSSION

Royce Global Financial Services Fund (RFS)

Chuck Royce
Chris Flynn

FUND PERFORMANCE

Royce Global Financial Services Fund enjoyed a strong first half on an absolute basis, though it trailed its benchmarks for the period. For the year-to-date period ended June 30, 2019, the Fund increased 16.3%, while its U.S.-based benchmarks, the Russell 2000 Index and the Russell 2500 Financial Services Index, posted respective gains of 17.0% and 17.5% for the same period. For additional context in light of the Fund’s global embrace, the MSCI ACWI Small Cap Index was up 15.0% in the first half of 2019.

WHAT WORKED... AND WHAT DIDN’T

Relative results notwithstanding, we were pleased that gains were widespread through the portfolio. Seventeen of the 22 subindustries in which the Fund had investments contributed to year-to-date returns. As is often the case, the two largest subindustries, asset management & custody banks and regional banks, were the two largest contributors. At the other end of the scale, application software and diversified capital markets were the largest subindustry detractors. A somewhat similar level of broad gains could be found at the country level, where 12 of 18 countries made positive contributions to first-half returns. Outside the U.S.—our largest weighting and the biggest contributor by country— notable positive impacts came from holdings headquartered in Canada and the U.K. while positions headquartered in France, India, and South Africa detracted most, though on a modest scale.

    MarketAxess Holdings, which operates an electronic, multi-dealer trading platform for investment grade and high-yield corporate and emerging market bonds, was the largest contributor at the position level in the first half. Recent results demonstrated an acceleration in market share gains in high-yield and emerging market bonds, which suggested that the company’s total addressable market may be larger than previously thought. The next two contributors reflected the Fund’s positioning pivot a few years ago within asset management stocks. Seeing certain seismic shifts in the industry, we trained our sights on traditional managers with specialties that we thought were sustainable over the long term while also beginning to research and investigate alternative asset management companies. An example of the latter, Ares Management is a market leader in managing private credit pools. Its stock advanced during the first half as it continued to benefit from strong fundraising and yield-hungry investors favoring investments that deliver attractive amounts in a period with generally low interest rates. Based in London but with a global investment reach, Ashmore Group is the leader in emerging market debt investing and an example of a specialist asset manager with a core business that we really like. So far this year, the company has seen strong inflows for its products while also benefiting from an investment rebound in its asset class.
    Benefitfocus, a cloud-based software provider of benefits solutions to employers and brokers, was the largest detractor for the year-to-date period. The company reported two consecutive disappointing quarters, particularly regarding expectations in achieving profitability. Along with a large insider sale and the resignation of the CFO, all of this spooked investors. We retained our shares because we are optimistic about the company’s long-term prospects to help its customers manage benefits costs efficiently. Virtu Financial, a market maker and liquidity provider, suffered through a difficult market environment for its business model, which tends to do best when equity trading volumes are rising and volatility levels are moderate to high, which was precisely the opposite of what happened in the first half, which featured both low trading volumes and (aside from May) low volatility. We expect these market conditions to normalize, ultimately supporting growing profits for Virtu. National Western Life Group, a life insurer, also detracted. The company reported a decline in fourth-quarter revenue due to shuttering their international insurance operations.

Top Contributors to Performance
Year-to-Date Through 6/30/19 (%)1
MarketAxess Holdings	1.30
Ares Management Cl. A	0.97
Ashmore Group	0.97
Sprott	0.96
FirstService Corporation	0.95
1 Includes dividends

Top Detractors from Performance
Year-to-Date Through 6/30/19 (%)2
Benefitfocus	-0.48
Virtu Financial Cl. A	-0.42
National Western Life Group Cl. A	-0.22
Rothschild & Co	-0.16
JSE	-0.13
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

The financial sector is undergoing meaningful change due to the convergence of several important factors, such as persistently low interest rates, the increasing popularity of passive investment vehicles, low equity market volatility, and low equity trading volumes. These conditions have created difficulties for many traditional financial business models, including banks, insurers, brokerages, and traditional asset managers. As a result, we have evolved our positioning to include companies that we believe can prosper if current conditions persist. One example is the preference we mentioned earlier for both traditional asset managers with a sustainable specialty and alternative asset managers. We are also attracted to certain specialty lenders that look capable of thriving in the current low-rate environment and selected service companies that are using technology to deliver superior service or lower prices. While we still expect an eventual return to normalization, one that will include higher rates and higher volatility that should benefit many of the Fund’s holdings, we also want to own stocks that can do well if “normal” takes a longer time to arrive than we initially anticipated.

10 | The Royce Funds 2019 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYFSX RGFIX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/19
	JAN-JUN 20191	1-YR	3-YR	5-YR	10-YR	15-YR	SINCE INCEPTION (12/31/03)
RFS	16.26	-1.92	11.47	5.78	11.11	8.08	7.88
Annual Gross Operating Expenses: 1.77%    Annual Net Operating Expenses: 1.58%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box^TM with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^TM. 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 97 for additional information.

Value of $10,000

Invested on 12/31/03 as of 6/30/19 ($)

Top 10 Positions
% of Net Assets
MarketAxess Holdings	3.6
Franco-Nevada	3.6
Sprott	3.3
Popular	3.2
FirstService Corporation	3.1
First Citizens BancShares Cl. A	2.9
E-L Financial	2.6
Virtu Financial Cl. A	2.6
Ares Management Cl. A	2.6
Ashmore Group	2.6

Portfolio Industry Breakdown
% of Net Assets (Subject to Change)
Capital Markets	48.6
Banks	18.8
Real Estate Management & Development	7.4
Insurance	6.6
Metals & Mining	3.5
Software	2.9
Professional Services	2.5
Trading Companies & Distributors	2.0
IT Services	1.8
Diversified Financial Services	1.4
Hotels, Restaurants & Leisure	0.8
Consumer Finance	0.5
Cash and Cash Equivalents	3.2

Upside/Downside Capture Ratios
Periods Ended 6/30/19 (%)
	UPSIDE	DOWNSIDE
10-Year	83	85
Fund’s First Full Quarter (12/31/03)	85	78

Calendar Year Total Returns (%)
YEAR	RFS
2018	-13.4
2017	22.5
2016	12.9
2015	-4.7
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

Portfolio Country Breakdown1,2
% of Net Assets
United States	55.3
Canada	19.8
United Kingdom	7.7
India	2.6
France	2.3
South Africa	1.8
Brazil	1.5

1	Represents countries that are 1.5% or more of net assets.
2	Securities are categorized by the country of their headquarters.

Portfolio Diagnostics
Fund Net Assets	$39 million
Number of Holdings	70
Turnover Rate	1%
Average Market Capitalization1	$2,205 million
Weighted Average P/E Ratio2,3	14.7x
Weighted Average P/B Ratio2	1.8x
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 (11% of portfolio holdings as of 6/30/19).
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, 2020. 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 year-to-date performance for 2019. 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 manager’s 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 2019 Semiannual Report to Shareholders | 11

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	MANAGERS’ DISCUSSION
Royce International Premier Fund (RIP)

David Nadel
Mark Rayner, CA

FUND PERFORMANCE
Royce International Premier Fund gained 21.4% for the year-to-date period ended June 30, 2019, significantly ahead of its benchmark, the MSCI ACWI ex-US Small Cap Index, which was up 11.6% for the same period. This strong absolute and relative performance helped our Quality-at-a-Reasonable-Price strategy to outpace the benchmark for the one-, three-, five-year, and since inception (12/31/10) periods ended June 30, 2019.

WHAT WORKED... AND WHAT DIDN’T

All eight equity sectors in which the Fund had investments made a positive impact on first-half returns, as did 16 of 18 countries. Industrials was by far the top-contributing sector, followed by Information Technology, while Materials and Consumer Discretionary contributed least. Based on each country’s headquarters, stocks in Japan and Switzerland made the largest contributions, while only China and India detracted from portfolio returns.

    Based in Brazil—and buoyed in part by that nation’s economic and market recoveries—TOTVS provides enterprise resource planning and supply chain management software solutions. The company made the biggest positive contribution to first-half returns on the position level as analysts showed more confidence in its growth opportunities in FinTech. In addition, TOTVS recently completed a follow-on equity raise that strengthened its seemingly fortress-like balance sheet, providing the company with more-than-ample capital for strategic acquisitions. Kardex is a Swiss intralogistics company that manufactures automated storage and materials handling systems. Its stock began to climb in early March following the report of strong full-year earnings, which helped its shares to recover from a steep price decline in 2018’s fourth quarter. Spirax-Sarco is a U.K. company that makes steam management systems and peristaltic pumps whose outstanding record of consistent long-term organic growth and profitability first drew our attention. Its shares rose in May when it announced impressive organic growth rates so far in 2019 despite some softening in global industrial production.
    The Fund’s top detractor in the first half was TravelSky Technology, a Hong Kong listed company that dominates Global Distribution Systems (GDS) services to the Chinese aviation and travel industry primarily by connecting airline ticket suppliers, hotels, rental cars, etc. with the agencies making customer reservations. The company announced disappointing earnings for fiscal 2018 in March. While its revenues grew robustly, net profits were disappointing due to increased costs. Thinking that these were solvable, short-term issues, we added shares. Consort Medical is a U.K.-based Contract Development & Manufacturing Organization that makes high-volume, disposable drug delivery devices primarily for respiratory treatments. Full-year results announced in June showed revenues and operating profits both down, but in line with the reduced expectations set by management in December 2018. The company has also reported mixed news on the development of a relatively narrow, though expanding, portfolio of commercialized and in-development projects, which has made the stock disappointingly volatile for some time. Adding to its challenges was an explosion in its Northumberland facility in July, though we began to reduce our position in June. We chose to exit our position in SH Kelkar & Company, as this India-based, family-run fragrance producer continued to struggle.
    The Fund’s outperformance versus the MSCI ACWI ex USA Small Cap came largely from stock selection, though sector allocation was also positive. Industrials contributed most, with professional services as its leading industry. Information Technology also had a notably strong impact on first-half outperformance, courtesy of strong results for the software industry, where the Fund had seven holdings and was significantly overweight versus the benchmark. The Fund’s cash position was the largest source of relative underperformance. While our 5.7% average cash level in the first half was not high, almost any amount is a meaningful drag on performance when returns are as strong as they were. Materials also detracted from relative returns, as stock selection had a negative impact.

Top Contributors to Performance Year-to-Date Through 6/30/19 (%)1
TOTVS	1.12
Kardex	1.11
Spirax-Sarco Engineering	0.92
IMCD	0.89
Partners Group Holding	0.83
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/19 (%)2
TravelSky Technology	-0.40
Consort Medical	-0.15
SH Kelkar & Company	-0.15
Burkhalter Holding	-0.04
Croda International	-0.01
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

After peaking in January 2018, the MSCI ACWI ex USA Small Cap Index declined to a point 15% shy of its prior high at the end of June. Global Manufacturing PMI’s were in decline over this same period, and sat at less than 50 on June 30, reflecting a contraction in global manufacturing. While we are grateful that the Fund delivered a modest positive return during this difficult 18-month period, we would also welcome more hospitable conditions for international small-cap stocks. That scenario may be approaching. Central banks appear ready to resume their accommodative positions, which will likely include increasing financial market liquidity, a development that should help small-caps. It seemed reasonable at the end of June to conclude that most, if not all, of the recent macroeconomic pessimism is fully reflected in valuations. In the absence of worsening global macroeconomic conditions, we suspect that the combination of increased central bank support, continued modest inflation, and low interest rates may all be supportive for international small-caps.

12 | The Royce Funds 2019 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYIPX RIPNX RINPX RIPIX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/19
	JAN-JUN 20191	1-YR	3-YR	5-YR	SINCE INCEPTION (12/31/10)
RIP	21.38	9.26	13.28	8.64	7.84
Annual Gross Operating Expenses: 1.59%  Annual Net Operating Expenses: 1.44%
1 Not annualized

Relative Returns: Monthly Rolling Average Annual Return Periods
Since Inception Through 6/30/19
On a monthly rolling basis, the Fund outperformed the MSCI ACWI x USA SC in 100% of all 5-year periods; 84% of all 3-year periods; and 69% of all 1-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
5-year	43/43	100%	8.5	6.1
3-year	56/67	84%	9.1	6.8
1-year	63/91	69%	8.6	5.9

¹Average of monthly rolling average annual total returns over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^TM with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^TM. 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 97 for additional information.

Value of $10,000

Invested on 12/31/10 as of 6/30/19 ($)

Top 10 Positions
% of Net Assets
IMCD	3.0
Meitec Corporation	2.9
Partners Group Holding	2.8
Victrex	2.7
Daifuku	2.7
Hexpol	2.7
Intertrust	2.5
Spirax-Sarco Engineering	2.4
Loomis Cl. B	2.4
TKC Corporation	2.3

Portfolio Sector Breakdown
% of Net Assets
Industrials	36.9
Information Technology	22.0
Health Care	13.0
Materials	7.4
Financials	7.0
Energy	4.2
Real Estate	3.6
Preferred Stock	2.1
Cash and Cash Equivalents	3.8

Upside/Downside Capture Ratios
Periods Ended 6/30/19 (%)
	UPSIDE	DOWNSIDE
Fund’s First Full Quarter (12/31/10)	108	76

Calendar Year Total Returns (%)
YEAR	RIP
2018	-12.8
2017	39.8
2016	-1.1
2015	16.2
2014	-8.2
2013	18.3
2012	23.4
2011	-16.8

Portfolio Country Breakdown1,2
% of Net Assets
Japan	18.1
United Kingdom	11.7
Switzerland	8.8
Australia	8.7
Sweden	8.5
Germany	7.3
Canada	5.9
Netherlands	5.5
France	4.7
Brazil	4.4

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	$606 million
Number of Holdings	51
Turnover Rate	14%
Average Market Capitalization1	$2,042 million
Weighted Average P/E Ratio2,3	24.7x
Weighted Average P/B Ratio2	3.7x
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 (2% of portfolio holdings as of 6/30/19).
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 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 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 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 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 1.44% through April 30, 2020. 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 year-to-date performance for 2019. 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 manager’s performance in down markets relative to the Fund’s benchmark (MSCI ACWI ex USA 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 2019 Semiannual Report to Shareholders | 13

	MANAGER’S DISCUSSION
Royce Low-Priced Stock Fund (RLP)

Jim Stoeffel

IMPORTANT NEWS FOR SHAREHOLDERS
The shareholders of Royce Low-Priced Stock Fund approved a reorganization plan that combined that Fund with Royce Micro-Cap Fund. As part of the reorganization, all of the assets and liabilities of Low-Priced Stock were exchanged for shares of Micro-Cap, with all values expected to be determined as of the closing of the NYSE (generally 4:00 pm) on Friday, July 12, 2019. Upon completion of the reorganization, shareholders of Low-Priced Stock became shareholders of Micro-Cap.

FUND PERFORMANCE
For the year-to-date period ended June 30, 2019, Royce Low-Priced Stock Fund underperformed its benchmark, gaining 14.5%, while the Russell 2000 Index advanced 17.0% for the same period.

WHAT WORKED... AND WHAT DIDN’T

Six of the Fund’s 10 equity sectors finished 2019’s first half in the black. Our historic overweight in Information Technology worked in our favor as it was the top contributor in the portfolio. We also saw strong performance by Industrials and Health Care. Consumer Staples, however, was the top detractor for the year-to-date period ended June 30, 2019. The other three sectors that detracted—Real Estate, Communication Services, and Energy—did so modestly.
    At the industry level, the largest positive contribution came from semiconductors & semiconductor equipment (Information Technology), mostly due to strong results for data movement interconnect specialist Inphi Corporation. Machinery (Industrials) and pharmaceuticals (Health Care) followed as top contributors. The portfolio’s top contributor overall was pharmaceutical company Axsome Therapeutics, which develops therapies for neurological disorders. Its shares grew healthy on news of solid clinical results for a drug that treats major depressive disorder (MDD), which led the FDA to give this treatment Breakthrough Therapy Designation, which speeds its pace to market. Quanterix Corporation is a medical technology provider that offers ultra-high sensitivity immunoassay platforms used in testing protein biomarkers. Its stock benefited from the company’s leading edge technology, which drove significant growth in critical life sciences research applications in areas such neurology, oncology, and cardiology, among others.
    Conversely, specialty retail and leisure products, both in Consumer Discretionary, were the largest detractors at the industry level. Health and fitness company Nautilus suffered through two consecutive failed product launches, with a resulting decision to remove the CEO. This led the company to be the largest detracting position for the first half of 2019. While we like a number of the strategic decisions made by the company over the past several years, we sold our position as we expect it will take at least a year to rebuild its new product pipeline. Equally important, our confidence in management’s ability to effectively navigate the rapidly changing fitness markets was shaken. Oil field services company Mammoth Energy Services was the next top detracting position, as depressed revenues and earnings and an uncertain outlook for its industry hurt its stock.

Top Contributors to Performance Year-to-Date Through 6/30/19 (%)1
Axsome Therapeutics	2.24
Quanterix Corporation	0.81
ASV Holdings	0.74
Kornit Digital	0.74
Amber Road	0.70
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/19 (%)2
Nautilus	-0.55
Mammoth Energy Services	-0.42
Kirkland’s	-0.41
Harvard Bioscience	-0.29
Dynavax Technologies	-0.28
2 Net of dividends

    Relative to the Russell 2000 Index, poor stock selection was the source of first-half underperformance—sector allocation contributed modestly. Consumer Discretionary was the largest detractor due to poor stock picking in specialty retail and leisure products. Energy also hampered results due to our stock selection in energy equipment & services. Our cash position also detracted from overall relative performance as almost any amount of cash in a strong market will create a drag on relative performance.
    Health Care generated the strongest relative results, mostly driven by our savvy stock selection in pharmaceuticals. Industrials boasted the next-best positive result. This was particularly driven by machinery where we saw strong results for ASV Holdings, a company that engineers compact truck loads and skid steers.
    If you would like to know more about James P. Stoeffel’s outlook on the market, please read the Manager’s Discussion for Royce Micro-Cap Fund on page 16.

14 | The Royce Funds 2019 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYLPX RLPHX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/19
	JAN-JUN 20191	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	SINCE INCEPTION (12/15/93)
RLP	14.53	-5.00	10.67	0.98	7.14	5.20	8.16	9.61
Annual Operating Expenses: 1.53%  Annual Net Operating Expenses: 1.49%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box^TM with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^TM. 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 97 for additional information.

Value of $10,000

Invested on 12/15/93 as of 6/30/19 ($)

Top 10 Positions
% of Net Assets
Stoneridge	1.8
Century Casinos	1.7
Northwest Pipe	1.5
FormFactor	1.4
Axsome Therapeutics	1.4
Quanterix Corporation	1.4
Ameresco Cl. A	1.4
Kornit Digital	1.3
Rudolph Technologies	1.3
QAD Cl. A	1.3

Portfolio Sector Breakdown
% of Net Assets
Information Technology	23.9
Industrials	20.1
Consumer Discretionary	13.5
Health Care	11.7
Financials	11.6
Energy	4.9
Communication Services	2.9
Materials	2.3
Consumer Staples	1.1
Real Estate	0.5
Cash and Cash Equivalents	7.5

Calendar Year Total Returns (%)
YEAR	RLP
2018	-9.3
2017	9.7
2016	16.1
2015	-10.4
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

Upside/Downside Capture Ratios
Periods Ended 6/30/19 (%)
	UPSIDE	DOWNSIDE
10-Year	79	115
From 12/31/93 (Start of the Fund’s First Full Quarter)	100	93

Portfolio Diagnostics
Fund Net Assets	$213 million
Number of Holdings	115
Turnover Rate	8%
Average Market Capitalization1	$539 million
Weighted Average P/B Ratio2	2.0x
Active Share3	97%
U.S. Investments (% of Net Assets)	79.8%
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	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 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 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 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, 2020. 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 year-to-date performance for 2019. 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 manager’s 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 2019 Semiannual Report to Shareholders  |  15

	MANAGERS’ DISCUSSION
Royce Micro-Cap Fund (RMC)

Jim Stoeffel
Brendan Hartman

FUND PERFORMANCE
Royce Micro-Cap Fund underperformed its benchmarks for the year-to-date period ended June 30, 2019. The Fund returned 10.6% while the Russell Microcap and Russell 2000 Indexes returned 14.1% and 17.0%, respectively, for the same period. We were pleased, however, that the Fund outpaced the micro-cap index for the one-year period ended June 30, 2019.

WHAT WORKED... AND WHAT DIDN’T

Eight of the Fund’s 10 equity sectors generated positive returns in 2019’s first half. Our persistently large weighting in Information Technology worked in our favor as it was the top contributor at the sector level, followed by Industrials and Health Care. Conversely, Communication Services and Consumer Staples detracted, though only by a modest amount. At the industry level, semiconductors & semiconductor equipment (Information Technology) provided the biggest positive contribution, with positive results for Adesto Technologies, which was the second-largest contributing position in the overall portfolio. Adesto has transformed itself from a niche memory provider to a more comprehensive systems provider targeting industrial “Internet-of-Things” applications through a series of acquisitions. Recent results have exceeded expectations as management has successfully integrated its acquisitions and is beginning to garner new product wins. We maintained our position in the shares as we believe the transformation is in the very early stages.

    We also saw positive results from machinery (Industrials) and software (Information Technology) in the first half. The Fund’s top performing position for the year-to-date period was Quanterix Corporation, a medical technology provider that offers ultra-high sensitivity immunoassay platforms used in testing protein biomarkers. Its stock benefited as the company’s leading edge technology drove significant growth in critical life sciences research applications in areas such neurology, oncology, and cardiology, among others. In addition, we got a strong contribution from machinery company Kornit Digital, a digital printing specialist for the apparel and textile industries that reported record revenue growth in the first half.

    Specialty retail and leisure products, both in Consumer Discretionary, were the largest detractors at the industry level. After a series of successful new product offerings, health and fitness company Nautilus suffered through two consecutive failed product launches, with a resulting decision to remove the CEO. While we like a number of the strategic decisions made by the company over the past several years, we sold our position as we expect it will take at least a year to rebuild its new product pipeline. Equally important, our confidence in management’s ability to effectively navigate the rapidly changing fitness markets was shaken. Independence Contract Drilling operates a fleet of state-of the-art drilling rigs throughout North America. Its shares have been hurt by the ongoing slowdown in drilling activity in the U.S. While the outlook for the industry remains cloudy given volatile oil prices, we held our position as we believe its shares trade well below the underlying asset value of its high-end rigs.
    Relative to the Russell Microcap, both our poor stock picking and sector allocation detracted from first-half results. Health Care was the largest detractor from performance both because of poor stock selection, most notably in biotechnology, and our underexposure, particularly in pharmaceuticals. Consumer Discretionary was the next largest detractor, almost entirely due to ineffective stock picking. Within the sector, specialty retail hampered results most, as Kirkland’s suffered a setback in its efforts to redefine itself as an omnichannel retailer capable of competing with the likes of Amazon and Wayfair. While we believe there is an opportunity for well-managed retailers to effectively reimagine their business models in the e-commerce age, we moved on from Kirkland’s given the struggles management has endured to execute toward their vision. The Fund’s top contributor to relative returns in the first half was Information Technology because of our overweight in the sector, most notably in semiconductors & semiconductor equipment. Industrials followed, with construction & engineering the strongest industry due to savvy stock selection.

Top Contributors to Performance Year-to-Date Through 6/30/19 (%)1
Quanterix Corporation	0.63
Adesto Technologies	0.58
Kornit Digital	0.57
NeoGenomics	0.56
Zealand Pharma	0.54
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/19 (%)2
Nautilus	-0.46
Kirkland’s	-0.41
Independence Contract Drilling	-0.32
Harvard Bioscience	-0.27
NeoPhotonics Corporation	-0.24
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

Despite the increasing uncertainty around trade and late cycle economic concerns, we remain generally constructive on the U.S. economy, a stance that gained additional support via the recent end of the Fed tightening cycle. We think this should help portfolio holdings that we think have underlying growth potential and attractive valuations, especially in our overweight sectors—Information Technology and Industrials—as well as for certain pockets of medical technology, where we have been increasingly active. We also continued to incrementally build our exposure to Information Technology in the first half. In fact, we remain optimistic about the overall prospects for micro-cap stocks in the current environment. Anticipating better growth in the U.S. relative to the rest of the globe, we stayed primarily focused on companies that derive most of their revenues from domestic activities.

16 | The Royce Funds 2019 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS   RYOTX RMCFX RYMCX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/19
	JAN-JUN 20191	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	25-YR	SINCE INCEPTION (12/31/91)
RMC	10.59	-8.64	8.59	0.90	7.31	5.74	8.55	9.28	10.24
Annual Gross Operating Expenses: 1.25%    Annual Net Operating Expenses: 1.24%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box^TM with the center 75% of fund holdings plotted as theMorningstar Ownership Zone^TM. 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 97 for additional information.

Value of $10,000

Invested on 6/30/00 (Russell Microcap Index Inception) as of 6/30/19 ($)

Top 10 Positions
% of Net Assets
Stoneridge	1.4
NeoGenomics	1.3
Adesto Technologies	1.2
Northwest Pipe	1.2
Quanterix Corporation	1.1
Ultra Clean Holdings	1.1
Rudolph Technologies	1.1
B. Riley Financial	1.1
Construction Partners Cl. A	1.0
Kornit Digital	1.0

Portfolio Sector Breakdown
% of Net Assets
Industrials	22.7
Information Technology	21.6
Financials	14.2
Health Care	12.5
Consumer Discretionary	10.4
Energy	4.3
Materials	4.2
Real Estate	3.1
Communication Services	2.6
Consumer Staples	2.0
Cash and Cash Equivalents	2.4

Calendar Year Total Returns (%)
YEAR	RMC
2018	-8.9
2017	5.4
2016	19.7
2015	-13.3
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

Upside/Downside Capture Ratios
Periods Ended 6/30/19 (%)
	UPSIDE	DOWNSIDE
10-Year	73	90
From 6/30/00 (Russell Microcap Index Inception)	90	82

Portfolio Diagnostics
Fund Net Assets	$135 million
Number of Holdings	140
Turnover Rate	6%
Average Market Capitalization1	$455 million
Weighted Average P/E Ratio2, 3	17.9x
Weighted Average P/B Ratio2	1.8x
Active Share4	90%
U.S. Investments (% of Net Assets)	84.7%
Non-U.S. Investments (% of Net Assets)	12.9%

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 (23% of portfolio holdings as of 6/30/19).
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 12/31/17 for financial reporting purposes, and as a result 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 the Fund’s total gross annual operating expenses for the Investment Class and include management fee 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, without right of termination, to waive fees and/or reimburse expenses to the extent necessary to maintain the Investment 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 1.24% through April 30, 2020. 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 year-to-date performance for 2019. 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 manager’s 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 2019 Semiannual Report to Shareholders |  17

	MANAGERS’ DISCUSSION
Royce Opportunity Fund (ROF)

Bill Hench
Suzanne Franks
Rob Kosowsky, CFA

FUND PERFORMANCE
Our deep value strategy performed well on an absolute basis in 2019’s first half, though it lagged one of its benchmarks. Royce Opportunity Fund advanced 15.6% for the year-to-date period ended June 30, 2019, compared to respective gains of 17.0% and 13.5% for its small-cap benchmarks, the Russell 2000 and Russell 2000 Value Indexes, for the same period. The portfolio’s consistent and time-tested deep value approach gave it an advantage over the small-cap value index for the three-, 10-, 15-, 20-year, and since inception (11/19/96) periods ended June 30, 2019. The Fund also beat the Russell 2000 for the three-, 20-year, and since inception periods ended June 30, 2019, while finishing even with it for the 10-year period.

WHAT WORKED... AND WHAT DIDN’T

Ten of the Fund’s 11 equity sectors finished the first half in the black, led by our two largest weightings, Industrials—which made an outsized positive contribution—and Information Technology. Only Real Estate detracted, doing so on a very minor scale, while the smallest positive contribution came from Utilities, our lowest sector weighting at the end of June and one to which we’ve had very little exposure historically. At the industry level, machinery (Industrials) made the biggest contribution to first-half results, followed by semiconductors & semiconductor equipment (Information Technology) and aerospace & defense (Industrials).

    The top-contributing position was Herc Holdings, a large equipment rental company in the Industrial sector’s trading companies & distributors group. After finishing 2018 as one of the Fund’s biggest detractors, Herc rebounded in the first half, reporting increased revenues, improved pricing, and an optimistic outlook for the rest of 2019. It was the Fund’s largest holding at the end of June. Two other top contributors were takeover targets: cosmetics company Avon Products was bought by a large Brazilian competitor, while Cray, which provides high-end supercomputing and data solutions, was acquired by Hewlett Packard Enterprises. They joined nine other holdings that were M&A targets during the first half.
    The largest detractors at the industry level were media (Communication Services) and hotels, restaurants & leisure (Consumer Discretionary), though their impact was modest. Evolent Health, which we first purchased late in 2018, detracted most at the position level. This medical technology specialist partners with providers and health plans to offer clinical and financial assistance and mitigate financial risk. An acquisition in May was greeted with skepticism—and a flurry of selling—as investors seemed unconvinced of its accretive value. We, on the other hand, continued to add shares before and after the purchase, consistent with our interest in a number of healthcare companies that are trying to bend the cost curve. We chose a different course with turnaround candidate Tupperware Brands, a global direct seller of consumer products, and began to exit our position in March. Reductions in its sales force and weakness in non-U.S. consumer markets, especially in the emerging markets that have become key to its business, led us to reevaluate its long-term prospects. We also sold our position in oilfield services company Mammoth Energy Services. Depressed revenues and earnings, an uncertain outlook for its industry, and what we saw as better values elsewhere in the market all influenced our decision.

Relative to the Russell 2000, stock selection in Health Care and in several industries within Information Technology hurt performance most, as did our cash position. However, savvy stock selection and an overweight helped to drive outperformance in Industrials, where aerospace & defense and trading companies & distributors contributed most. We also saw outperformance on a smaller, but still notable, scale from Consumer Staples, helped by both stock selection and our underweight in the sector.

Top Contributors to Performance Year-to-Date Through 6/30/19 (%)1
Herc Holdings	0.54
Avon Products	0.43
Triumph Group	0.42
Cray	0.42
Westport Fuel Systems	0.39
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/19 (%)2
Evolent Health Cl. A	-0.22
Tupperware Brands	-0.22
Mammoth Energy Services	-0.19
Owens & Minor	-0.18
NeoPhotonics Corporation	-0.15
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

Another quarter passed with a familiar ring as macro issues regarding trade, growth, and central bank interventions dominated the headlines. In the U.S. market, growth continued to outpace value, and now more and more players are hinting of a “permanent” change in which value would be a perennial underperformer. Needless to say, we differ. We see the world of small-cap value as one full of companies with very attractive valuations and terrific growth prospects. Strategic and financial buyers appear to agree—M&A activity continues unabated, with healthy premiums being paid. Investors, pundits, and strategists continue to warn about the length of the recovery in the U.S. while the market continues to humble those with such fears by providing consumers and companies alike with ever lower interest rates, cheap energy, and ample public spending. The market has provided us with the opportunity to build a portfolio of stocks that we think are not only cheap, but that we think should also provide healthy returns going forward. We’ve added positions in areas such as health care, consumer, and a host of others that we think should do well under present conditions. We have no idea what will bring better fortune to value investing, but do believe that disciplined stock picking in the small- and micro-cap equity market will pay off in the future.

18 | The Royce Funds 2019 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYPNX RYOFX ROFCX ROFIX ROFRX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/19
	JAN-JUN 20191	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	SINCE INCEPTION (11/19/96)
ROF	15.63	-11.06	12.37	4.11	13.38	7.69	10.63	11.44
Annual Operating Expenses: 1.20%
1 Not annualized

Relative Returns: Monthly Rolling Average Annual Return Periods

20 Years Through 6/30/19

On a monthly rolling basis, the Fund outperformed the Russell 2000 in 78% of all 10-year periods; 64% of all 5-year periods; and 62% of all 1-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	94/121	78%	9.4	7.8
5-year	115/181	64%	10.5	8.8
1-year	143/229	62%	13.7	9.6

¹Average of monthly rolling average annual total returns over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^TM with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^TM. 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 97 for additional information.

Value of $10,000

Invested on 11/19/96 as of 6/30/19 ($)

Top 10 Positions
% of Net Assets
Herc Holdings	1.0
Comtech Telecommunications	0.9
Air Lease Cl. A	0.9
Kraton Corporation	0.9
Northwest Pipe	0.9
LGI Homes	0.9
Alpha & Omega Semiconductor	0.8
frontdoor	0.8
Granite Construction	0.8
M.D.C. Holdings	0.8

Portfolio Sector Breakdown
% of Net Assets
Industrials	24.9
Information Technology	20.0
Consumer Discretionary	10.6
Health Care	9.7
Materials	8.3
Financials	7.8
Energy	7.4
Communication Services	1.1
Real Estate	0.8
Consumer Staples	0.6
Utilities	0.3
Cash and Cash Equivalents	8.5

Calendar Year Total Returns (%)
YEAR	ROF
2018	-20.0
2017	21.9
2016	29.9
2015	-13.6
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

Upside/Downside Capture Ratios
Periods Ended 6/30/19 (%)
	UPSIDE	DOWNSIDE
10-Year	112	127
From 12/31/96 (Start of Fund’s First Full Quarter)	122	111

Portfolio Diagnostics
Fund Net Assets	$939 million
Number of Holdings	259
Turnover Rate	22%
Average Market Capitalization1	$854 million
Weighted Average P/B Ratio2	1.4x
Weighted Average P/S Ratio3	0.8x
Active Share4	91%
U.S. Investments (% of Net Assets)	87.7%
Non-U.S. Investments (% of Net Assets)	3.8%

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	Price to Sales is calculated by dividing the company’s market cap by the revenue in the most recent year.
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. 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 year-to-date performance for 2019. 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 manager’s 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 2019 Semiannual Report to Shareholders | 19

	MANAGERS’ DISCUSSION
Royce Pennsylvania Mutual Fund® (PMF)

Chuck Royce
Jay Kaplan, CFA
Lauren Romeo, CFA
Steven McBoyle

FUND PERFORMANCE
Royce Pennsylvania Mutual Fund advanced 17.8% in the first half of 2019, nosing ahead of its small-cap benchmark, the Russell 2000 Index, which was up 17.0% for the same period. Penn also outperformed the small-cap index for the one-, three-, 15-, 20-, 25-, 30-, 35-, 40-year, and since index inception (12/31/78) periods ended June 30, 2019. The Fund’s average annual total return for the 45-year period ended June 30, 2019—all under the management of Chuck Royce—was 14.1%, a long-term record in which we take great pride.

WHAT WORKED... AND WHAT DIDN’T

The portfolio’s breadth of advance was evidenced by each of its 11 sectors contributing to first-half performance. The Fund’s two largest—Industrials and Information Technology—which accounted for almost half of its assets at the end of June, were also its top contributors. Similarly, its two smallest sectors, Utilities and Consumer Staples, delivered the most modest contributions. Machinery (Industrials) was the top contributor at the industry level, followed by electronic equipment, instruments & components, semiconductors & semiconductor equipment (both from Information Technology), and aerospace & defense (Industrials).
    HEICO Corporation, the Fund’s top contributor, manufacturers replacement aerospace parts. Its shares reached higher altitudes in June, after the company reported strong organic sales and expanding margins, boosted by strength in its flight support and electronics segments. These developments led HEICO to raise guidance for the rest of the year. Helios Technologies (a machinery company formerly known as Sun Hydraulics), which manufactures hydraulic and electronic controls systems for industrial and recreational equipment, reported a 51% increase in sales over 2018’s first quarter, driven by its Faster and Custom Fluidpower (or CFP) acquisitions. From the tech sector’s electronic equipment, instruments & components group, FLIR Systems has a global business manufacturing thermal imaging and infrared camera systems. In late April, the company announced increased bookings, strong year-over-year margin expansion, and double-digit earnings growth. It also expects revenues to remain robust through the end of 2019. Shares of CIRCOR International, which makes precision valves, rose sharply after receiving a takeover offer from a larger industrial company. We were very pleased to see strong results from these and many other cyclical holdings in the first half.
    Textiles, apparel & luxury goods and leisure products, both from Consumer Dictionary, were among a small group of industries that detracted in 2019’s first half. They did so on a comparatively minor scale. In fact, the four largest industry detractors came from Consumer Discretionary, demonstrating the widespread disruption that continues to create challenges in this diverse sector. Interestingly, of the portfolio’s five positions that detracted most, only the fifth came from Consumer Discretionary—footwear manufacturer and distributor Caleres. The Fund’s top-detracting position in the first half was FutureFuel, which provides custom chemicals and biofuels. The company reported solid results for its chemical business but disappointing ones for its biofuels segment, which was hurt by both falling energy prices and an anticipated tax credit that remained stalled in Congress. Wary of its long-term prospects, we sold our position during June. We took the opposite tack with Virtu Financial, adding shares of this company that uses its technology to act as a market maker and liquidity provider to the global financial markets. Its business endured a recent slump, which we see as short term. We also like a recent acquisition Virtu made. We chose to hold our stake in Lindsay Corporation. A rare detractor in the machinery group, the company supplies agricultural equipment. It faced ongoing weakness in its core market and the negative impact of floods in the Midwest, both of which put pressure on its stock.
    The Fund’s first-half relative outperformance was driven by sector allocation. Industrials was the biggest source of strength, due to both our overweight and savvy stock selection. Health Care was another source of outperformance as we avoided struggling pharmaceuticals and benefited from stock selection and an overweight in life sciences tools & services. Conversely, Real Estate detracted from relative results in the first half period, largely due to the share price decline for commercial real estate broker Marcus & Millichap. Ineffective stock picking also hurt in Consumer Discretionary, where six of 11 industries detracted, led by household durables and auto components.

Top Contributors to Performance Year-to-Date Through 6/30/19 (%)1
HEICO Corporation	0.86
Helios Technologies	0.49
FLIR Systems	0.47
CIRCOR International	0.47
Ares Management Cl. A	0.45
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/19 (%)2
FutureFuel Corporation	-0.16
Virtu Financial Cl. A	-0.11
Lindsay Corporation	-0.11
ArcBest	-0.09
Caleres	-0.08
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

Markets are very good at surprising most investors. Today, with widespread concerns about slowing growth, increasing trade tensions, and the extended economic cycle, the most surprising outcome might be a rally. We see four favorable factors in the current market environment—low inflation, modest valuations, moderate growth, and increasing liquidity. When taken together, we see these factors as painting an attractive picture for small-cap investors. With so much attention on negative macro issues, we think investors may be missing this positive picture, especially with regard to profitable cyclical businesses.

20 | The Royce Funds 2019 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  PENNX RYPFX RPMIX RYPCX RPMRX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/19
	JAN-JUN 20191	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	25-YR	30-YR	35-YR	45-YR
PMF	17.81	0.68	13.29	6.16	12.29	8.32	9.77	10.50	10.16	11.09	14.14
Annual Operating Expenses: 0.92%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box^TM with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^TM. 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 97 for additional information.

Value of $10,000

Invested on 12/29/78 (Russell 2000 Inception) as of 6/30/19 ($)

Top 10 Positions
% of Net Assets
HEICO Corporation	2.4
FLIR Systems	1.9
Helios Technologies	1.3
Stella-Jones	1.3
Quaker Chemical	1.2
SEACOR Holdings	1.2
First Citizens BancShares Cl. A	1.1
MKS Instruments	1.1
Ares Management Cl. A	1.0
Meritor	1.0

Portfolio Sector Breakdown
% of Net Assets
Industrials	27.4
Information Technology	20.6
Financials	14.9
Materials	8.4
Consumer Discretionary	7.5
Health Care	7.1
Energy	3.9
Real Estate	2.8
Communication Services	1.4
Consumer Staples	1.2
Utilities	0.1
Cash and Cash Equivalents	4.7

Calendar Year Total Returns (%)
YEAR	PMF
2018	-9.7
2017	16.2
2016	26.5
2015	-11.4
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

Upside/Downside Capture Ratios
Periods Ended 6/30/19 (%)
	UPSIDE	DOWNSIDE
10-Year	91	92
From 12/31/78 (Russell 2000 Inception)	89	71

Portfolio Diagnostics
Fund Net Assets	$1,963 million
Number of Holdings	295
Turnover Rate	13%
Average Market Capitalization1	$2,248 million
Weighted Average P/E Ratio2,3	19.6x
Weighted Average P/B Ratio2	2.3x
Active Share4	88%
U.S. Investments (% of Net Assets)	85.8%
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 6/30/19).
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). Certain immaterial adjustments were made to the net assets of Royce Pennsylvania Mutual Fund at 6/30/19 for financial reporting purposes, and as a result the net asset values 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 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 year-to-date performance for 2019. 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 manager’s 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 2019 Semiannual Report to Shareholders | 21

	MANAGERS’ DISCUSSION
Royce Premier Fund (RPR)

Chuck Royce
Lauren Romeo, CFA
Steven McBoyle

FUND PERFORMANCE
Royce Premier Fund stayed ahead of its small-cap benchmark, the Russell 2000 Index, for the year-to-date, one-, three-, 15-, 20-, 25-year, and since inception (12/31/91) periods ended June 30, 2019. The Fund increased 21.7% in the first half of 2019, outperforming the Russell 2000, which gained 17.0% for the same period. In spite of challenges for some cyclical sectors and most value stocks, our quality strategy has performed well over the last few years.

WHAT WORKED... AND WHAT DIDN’T

We were pleased to see all nine of the portfolio’s equity sectors and, perhaps more impressively, each of its 29 industries contribute to positive first-half returns. The Fund’s largest sector weighting at the end of June—Industrials– also made the largest positive impact on first-half performance by a sizable margin. Information Technology and Financials also made notable positive contributions, while Real Estate and Consumer Staples had the smallest positive effect. Machinery (Industrials) and capital markets (Financials), the Fund’s two largest industry weights, contributed most with market-beating returns, while two groups from these same two sectors, industrial conglomerates and insurance, contributed least.
    Fair Isaac was the portfolio’s top contributor at the position level. The company continues to reap the rewards of recent initiatives that have reaccelerated revenue growth in its core, high-margin credit score business, the ubiquitous, industry-standard FICO score. Fair Isaac is also broadening its addressable market, which is aimed at assessing the creditworthiness of borrowers with little or no credit history, while also growing its financial software business. Precision valve maker CIRCOR International benefited from some global recession fears receding with the result that, by mid-May, CIRCOR’s stock price had rallied 47% from the multi-year low with which it began 2019. Its shares then spiked again in May after a takeover offer from a larger engineered industrial products company. Before the end of June, this company raised its equity offer, and we continue to evaluate the situation.
    The Fund’s biggest detractor at the position level was agricultural equipment supplier, Lindsay Corporation, the only one of the portfolio’s 10 machinery holdings to finish the first half in the red. The company faced several challenges, including lower farming incomes that have crimped capital spending and led to ongoing weakness in its core market, excess rainfall and flooding in the Midwest, and tariff and trade war woes. In early July, however, Lindsay noted an uptick in domestic irrigation sales, while recent improvement in key crop prices such as corn have improved agricultural sentiment. In addition, the outlook for international irrigation demand remains favorable. We trimmed our stake slightly in the first half. We did the same with National Instruments, which supplies instrumentation hardware and software products for engineers and scientists. The company posted disappointing first-quarter sales, with broad weakness across much of its global business, including softening demand in Europe. The company is focusing its resources on higher-growth applications benefiting from key technology trends such as 5G and Advanced Driver Assist Systems, but it will take time for these initiatives to manifest in accelerated revenue growth and margin expansion—and we are prepared to be patient.
    Industrials was the largest source of relative outperformance in the year-to-date period, with both our overweight and superior stock selection boosting performance. Financials also contributed as alternative asset manager Ares Management gained steadily throughout the first half. A market leader in managing private credit pools, Ares continues to benefit from strong fundraising, as investors favor investments delivering attractive yields in a period with generally low interest rates. The largest source of relative underperformance was the Fund’s cash holdings. The average level of cash in the first half was not high at 3%, but in a period with strong absolute returns, almost any amount is a meaningful drag on performance. The second-biggest relative detractor was Real Estate, where the Fund’s lack of exposure to the equity REIT industry hampered relative results, as this was an index-beating group within the overall small-cap market in the first half.

Top Contributors to Performance Year-to-Date Through 6/30/19 (%)1
Fair Isaac	1.55
CIRCOR International	1.40
John Bean Technologies	1.33
Ares Management Cl. A	1.28
Woodward	1.20
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/19 (%)2
Lindsay Corporation	-0.41
National Instruments	-0.16
Wolverine World Wide	-0.11
Dorman Products	-0.10
nLIGHT	-0.08
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

With much of the portfolio invested in cyclical sectors, it would not be immune to a further global economic slowdown or recession. However, in the event of a recession we would expect many of these holdings, specifically those in Industrials and Information Technology, to outperform cyclicals in general because of their status as market leaders in global niches as opposed to being one of many players in a highly fragmented commodity business. Many are also asset light companies, such as those in commercial and professional services, and so do not face the same degree of margin contraction if their sales decline. Additionally, several of our cyclical holdings generate a meaningful percentage of their revenues from after-market sales, which tend to be more recurring and thus better at surviving a slowdown or contraction. Finally, valuations for many of our holdings have already discounted some level of concern about the pace of global growth and thus still look reasonably valued.

22 | The Royce Funds 2019 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYPRX RPFFX RPFIX RPRCX RPRRX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/19
	JAN-JUN 20191	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	25-YR	SINCE INCEPTION (12/31/91)
RPR	21.69	6.28	15.94	6.68	12.47	9.59	10.70	11.41	11.60
Annual Operating Expenses: 1.17%
1 Not annualized

Relative Returns: Monthly Rolling Average Annual Return Periods

20 Years Through 6/30/19

On a monthly rolling basis, the Fund outperformed the Russell 2000 in 84% of all 10-year periods; 59% of all 5-year periods; and 64% of all 1-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	102/121	84%	10.2	7.8
5-year	107/181	59%	10.8	8.8
1-year	146/229	64%	12.2	9.6

¹Average of monthly rolling average annual total returns over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^TM with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^TM. 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 97 for additional information.

Value of $10,000

Invested on 12/31/91 as of 6/30/19 ($)

Top 10 Positions
% of Net Assets
Air Lease Cl. A	3.3
Kirby Corporation	2.9
John Bean Technologies	2.9
Lincoln Electric Holdings	2.8
Fair Isaac	2.7
Woodward	2.7
Ashmore Group	2.7
Ares Management Cl. A	2.6
Morningstar	2.6
Manhattan Associates	2.5

Portfolio Sector Breakdown
% of Net Assets
Industrials	34.4
Information Technology	18.7
Financials	14.5
Materials	8.8
Consumer Discretionary	5.8
Energy	4.2
Health Care	2.6
Real Estate	1.2
Consumer Staples	1.1
Cash and Cash Equivalents	8.7

Calendar Year Total Returns (%)
YEAR	RPR
2018	-10.4
2017	23.8
2016	23.0
2015	-9.9
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

Upside/Downside Capture Ratios
Periods Ended 6/30/19 (%)
	UPSIDE	DOWNSIDE
10-Year	91	89
From 12/31/91 (Start of Fund’s First Full Quarter)	93	72

Portfolio Diagnostics
Fund Net Assets	$1,864 million
Number of Holdings	56
Turnover Rate	7%
Average Market Capitalization1	$3,442 million
Weighted Average P/E Ratio2,3	22.4x
Weighted Average P/B Ratio2	2.6x
Active Share4	97%
U.S. Investments (% of Net Assets)	78.7%
Non-U.S. Investments (% of Net Assets)	12.6%

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 (1% of portfolio holdings as of 6/30/19).
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). Certain immaterial adjustments were made to the net assets of Royce Premier Fund at 6/30/19 for financial reporting purposes, and as a result the net asset values 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 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 year-to-date performance for 2019. 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 manager’s 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 2019 Semiannual Report to Shareholders | 23

	MANAGER’S DISCUSSION
Royce Small-Cap Value Fund (RVV)

Jay Kaplan, CFA

FUND PERFORMANCE
Royce Small-Cap Value Fund increased 8.9% for the year-to-date period ended June 30, 2019, trailing respective gains of 17.0% and 13.5% for its small-cap benchmarks, the Russell 2000 and Russell 2000 Value Indexes, for the same period.

WHAT WORKED... AND WHAT DIDN’T

Five of the portfolio’s 11 equity sectors finished the year-to-date period in the black. Industrials, Information Technology, and Financials were the strongest contributors, while Materials and Health Care were more muted. Five sectors finished in the red, with Consumer Discretionary making the biggest detraction, followed by much smaller negative impacts from Energy, Communication Services, Consumer Staples, and Real Estate. (Utilities was essentially flat.)
    At the industry level, electronic equipment, instruments & components (Information Technology) was the strongest positive contributor in 2019’s first half. The rising shares of Insight Enterprises, which provides information technology hardware and software for large and small enterprises, helped both this industry and the portfolio as a whole. Investors seemed drawn to its improved margins and earnings, along with its solid outlook for the rest of the year. We took some gains as its stock rose. Machinery (Industrials) was the second-biggest industry contributor, boosted by Meritor, which supplies drivetrain, braking, and other aftermarket solutions for commercial and industrial vehicles. Improved revenues and better-than-expected earnings were driven largely by higher North American truck production. It was the portfolio’s second-largest holding at the end of June.
    Specialty retail (Consumer Discretionary) detracted most at the industry level, due in part to poor performance from Caleres and top-10 holding, Shoe Carnival. Several factors hurt Caleres, such as reduced traffic and same-store sales growth at the firm’s Famous Footwear retailer (which accounts for about half of its profits); near-term margin pressure from having to clear excess inventory at hefty discounts in advance of new, much improved back-to-school styles from Famous Footwear’s largest vendor; and the negative impact that the threatened next round of U.S. tariffs on China-made goods would have on consumer prices and demand. Few retailers were immune from these anxieties, but it seemed to us that the shares of apparel and footwear companies, which also included Shoe Carnival, were among the hardest hit. Ever contrarian and always thinking about the long run, we began to build our stake in Caleres in late June.
    G-III Apparel Group lost most in the textiles, apparel & luxury goods group, the second-biggest industry detractor. Its stock suffered from the same tariff worries that helped hurt Caleres and Shoe Carnival, as well as from poor results in its retail arm. We like that G-III is preparing to move some production out of China. It also maintains a strong wholesale business, powered by popular brands such as DKNY, Donna Karan, and Tommy Hilfiger. ArcBest is a freight and logistics solutions specialist that saw its business stall in the first quarter. Believing in its long-term prospects and thinking that its shares were punished disproportionately by recession fears, we held our position at the end of June.
    Relative to the Russell 2000, poor stock picking was the main source of first-half underperformance. Stock selection in Consumer Discretionary hurt most, particularly in specialty retail. Stock selection also hurt in Information Technology, primarily in electronic equipment, instruments & components, and in Industrials, where professional services and road & rail detracted most. Materials was the sole source of first-half outperformance, thanks mostly to savvy stock selection in metals & mining—the only industry in this sector where we had exposure.

Top Contributors to Performance Year-to-Date Through 6/30/19 (%)1
Insight Enterprises	0.91
Meritor	0.86
Advanced Energy Industries	0.51
Camden National	0.51
Apogee Enterprises	0.50
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/19 (%)2
G-III Apparel Group	-0.62
ArcBest	-0.53
Caleres	-0.39
Tower International	-0.33
Shoe Carnival	-0.32
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

There’s been an ongoing slugfest among investors: in one corner, large-cap indexes have been routinely reaching new highs, the labor market is strong, and the economy is growing; on the opposite side of the ring, small-caps have been lagging large-caps—which seldom happens in a vibrant economy—the yield curve was flat or inverted through much of the first half, and economies outside the U.S. are slowing more quickly and appreciably than our own. So optimism, including the more cautious variety, is facing off against a pessimism that sees recession as imminent. Needless to say, only one of these combatants will be able to claim victory. For our part, we are squarely in the guarded optimism camp. The first half saw widespread concerns over trade tensions, the extended economic cycle, and slowing growth. There was also talk that the Fed would continue to lower rates—possibly later this year—which the market seemed to price in immediately. And while the Fed has historically reduced rates when the economy is slowing, we see growth slowing at a marginal pace—and certainly not contracting, which is the key distinction. Many of our holdings finished June at prices that looked to us like a recession had already been priced in. We have therefore been adding to positions in select cyclical areas such as trucking, trucks and automobile components, and footwear manufactures and retailers. We have not found many new opportunities, however, due to the otherwise mostly elevated state of many small-cap valuations. Recent relative performance challenges notwithstanding, we are comfortable with how we’ve positioned the portfolio in the face of ongoing uncertainty.

24 | The Royce Funds 2019 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYVFX RVVHX RVFCX RVVRX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/19
	JAN-JUN 20191	1-YR	3-YR	5-YR	10-YR	15-YR	SINCE INCEPTION (6/14/01)
RVV	8.88	-5.64	7.62	1.96	8.76	7.30	8.82
Annual Gross Operating Expenses: 1.53%   Annual Net Operating Expenses: 1.49%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box^TM with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^TM. 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 97 for additional information.

Value of $10,000

Invested on 6/14/01 as of 6/30/19 ($)

Top 10 Positions
% of Net Assets
Miller Industries	2.5
Meritor	2.5
Insight Enterprises	2.5
Designer Brands Cl. A	2.2
Allegiant Travel	2.2
Hilton Grand Vacations	2.2
Shoe Carnival	2.1
Camden National	2.0
WSFS Financial	2.0
Kulicke & Soffa Industries	1.9

Portfolio Sector Breakdown
% of Net Assets
Industrials	30.2
Financials	25.0
Information Technology	15.4
Consumer Discretionary	14.8
Energy	2.6
Consumer Staples	1.5
Communication Services	1.2
Health Care	1.0
Real Estate	1.0
Materials	0.5
Cash and Cash Equivalents	6.8

Calendar Year Total Returns (%)
YEAR	RVV
2018	-7.2
2017	5.3
2016	21.1
2015	-11.5
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

Upside/Downside Capture Ratios
Periods Ended 6/30/19 (%)
	UPSIDE	DOWNSIDE
10-Year	74	86
From 6/30/01 (Start of Fund’s First Full Quarter)	96	89

Portfolio Diagnostics
Fund Net Assets	$179 million
Number of Holdings	81
Turnover Rate	38%
Average Market Capitalization1	$1,118 million
Weighted Average P/E Ratio2,3	12.4x
Weighted Average P/B Ratio2	1.7x
Active Share4	96%
U.S. Investments (% of Net Assets)	86.6%
Non-U.S. Investments (% of Net Assets)	6.6%

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 (4% of portfolio holdings as of 6/30/19).
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). Certain immaterial adjustments were made to the net assets of Royce Small-Cap Value Fund at 6/30/16 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 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, without right of termination, to waive fees and/or reimburse 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, 2020. 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 year-to-date performance for 2019. 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 manager’s 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 2019 Semiannual Report to Shareholders | 25

MANAGER’S DISCUSSION

Royce Smaller-Companies Growth Fund (RVP)

Chip Skinner, CFA

FUND PERFORMANCE

The strength of small-cap growth stocks in the first half was reflected in strong absolute and relative performance for our GARP (“Growth at a Reasonable Price”) strategy. For the year-to-date period ended June 30, 2019, Royce Smaller-Companies Growth Fund gained 21.1%, outpacing the Russell 2000 Index, its small-cap benchmark, which was up 17.0% for the same period. This impressive result also helped the Fund to outperform the small-cap index for the one-, three-year, and since inception (6/14/01) periods ended June 30, 2019.

WHAT WORKED... AND WHAT DIDN’T

Eight of the portfolio’s 10 equity sectors finished the first half of 2019 in the black. The most significant positive contribution by far came from Information Technology, our largest sector and biggest overweight versus the Russell 2000 at the end of June. Health Care and Industrials also made notable positive impacts on performance while Materials and Energy detracted, but only marginally.
    Some of the largest contributions at the industry level came from three groups in Information Technology—software (which led by a wide margin), semiconductors & semiconductor equipment, and electronic equipment, instruments & components. Three groups in Health Care were also sizable contributors—biotechnology, health care equipment & supplies, and life sciences tools & services. They were joined by strong gains from aerospace & defense (Industrials). Only 11 of the Fund’s 44 industries had a negative impact on performance, led by health care technology and pharmaceuticals (both in Health Care), as well as Internet & direct marketing retail (Consumer Discretionary). The remaining eight groups, including electrical equipment (Industrials), insurance (Financials), and personal products (Consumer Staples), detracted at more modest levels.
    The top-contributing position in the first half was Veracyte, a global genomic diagnostics company. In April, the company reported substantial growth in product revenue and genomic volume as well as a positive Medicare coverage decision for its Envisia Genomic Classifier. It was therefore no surprise that its CEO gave a favorable outlook for short- and long-term growth. Paylocity Holding Corporation, another top contributor, makes cloud-based human resources software primarily for smaller businesses’ payroll applications. With its SaaS (software as a service) model and expertise in user-friendly products, the firm continues to take market share in a growing industry primarily by executing more effectively than its larger competitors and newer players. In our view, this gives Paylocity ongoing growth opportunities. It was the portfolio’s top holding at the end of June. KeyW Holding Corporation is an intelligence, cyber and mission IT, and analytics solutions provider that agreed to a buyout offer in April, which led us to begin selling our stake at an attractive gain.
    In March, we initiated a position in the portfolio’s biggest first-half detractor, Waitr Holdings. We proceeded to build our stake as its stock price was cut in half. Waitr runs an on-demand food ordering and delivery business that serves smaller markets in the U.S. A former SPAC—special purpose acquisition company—the firm reported terrific revenue growth in May but also faces competition from more established players such as Door Dash and Uber. We think its beachhead in smaller, underserved markets should help it survive, perhaps as a takeover target. Inogen makes portable oxygen concentrators for people suffering from chronic respiratory conditions. After growing robustly for a number of years, its shares fell sharply after the company significantly lowered its expectations for net income growth, which led us to exit our position.
    Relative outperformance in the first half came largely from stock selection, though sector allocation also contributed. Stock picks in Information Technology were the biggest drivers, most notably in the semiconductors & semiconductor equipment and electronic equipment, instruments & components groups. Our significant overweight in software also boosted relative results, as did stock picking in the Communication Services sector. Conversely, our cash position was the largest source of underperformance. With equity returns so strong, even our modest 5.1% average weight was enough to drag relative results. Ineffective stock selection in Materials also hurt in the first half.

Top Contributors to Performance
Year-to-Date Through 6/30/19 (%)1
Veracyte	1.41
Paylocity Holding Corporation	1.15
KEYW Holding Corporation	1.09
uniQure	1.09
Quanterix Corporation	1.05
1 Includes dividends

Top Detractors from Performance
Year-to-Date Through 6/30/19 (%)2
Waitr Holdings	-0.37
Inogen	-0.33
Unisys Corporation	-0.29
Evolus	-0.28
Apyx Medical	-0.24
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

The risks for stocks remain real, and mostly unchanged from the end of 2018: weakness in China and Europe, the extended economic cycle here in the U.S., and slowing growth. We can add to this list the related item of intensified rhetoric around trade wars and tariffs, which we suspect has done as much to erode confidence as the tariffs themselves. One likely outcome of this, which we’ve already seen in some instances, is decelerating earnings growth and/or downward-trending guidance. Still, we’re reasonably confident that the U.S. economy will continue to grow, however slowly, with the consequence that select small-caps can keep running. We are especially confident in the ongoing long-term prospects for other SaaS holdings such as Everbridge, Avalara, and Coupa Software, as well positions involved in genetic diagnostics and drug discovery. In other areas, we continue to find companies that we believe look capable of ongoing earnings growth on a stock-by-stock basis. While some of these names carried high multiples at the end of June, we think their steady growth makes them worth holding.

26 | The Royce Funds 2019 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYVPX RVPHX RVPCX RVPIX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/19
	JAN-JUN 20191	1-YR	3-YR	5-YR	10-YR	15-YR	SINCE INCEPTION (6/14/01)
RVP	21.08	-1.53	13.21	6.54	11.09	7.79	10.95
Annual Gross Operating Expenses: 1.52%    Annual Net Operating Expenses: 1.49%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box^TM with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^TM. 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 97 for additional information.

Value of $10,000

Invested on 6/14/01 as of 6/30/19 ($)

Top 10 Positions
% of Net Assets
Paylocity Holding Corporation	2.9
Iteris	2.9
GP Strategies	2.1
Quanterix Corporation	2.1
Monro	1.8
Materialise ADR	1.8
Lovesac Company (The)	1.8
TriState Capital Holdings	1.8
Community Healthcare Trust	1.8
Veracyte	1.7

Portfolio Sector Breakdown
% of Net Assets
Information Technology	36.1
Health Care	24.0
Consumer Discretionary	10.1
Industrials	8.6
Financials	7.5
Communication Services	2.8
Real Estate	2.6
Consumer Staples	1.6
Energy	0.9
Cash and Cash Equivalents	5.8

Calendar Year Total Returns (%)
YEAR	RVP
2018	-10.2
2017	17.8
2016	9.4
2015	-1.8
2014	3.9
2013	32.5
2012	15.3
2011	-10.0
2010	19.7
2009	41.4
2008	-41.1
2007	3.2
2006	19.3
2005	13.2
2004	28.2

Upside/Downside Capture Ratios
Periods Ended 6/30/19 (%)
	UPSIDE	DOWNSIDE
10-Year	94	109
From 6/30/01 (Start of Fund’s First Full Quarter)	114	101

Portfolio Diagnostics
Fund Net Assets	$287 million
Number of Holdings	113
Turnover Rate	32%
Average Market Capitalization1	$1,429 million
Weighted Average P/B Ratio2	3.9x
3-5 Year EPS Growth (est.)3	21.7%
Active Share4	94%
U.S. Investments (% of Net Assets)	85.9%
Non-U.S. Investments (% of Net Assets)	8.3%

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 3-5 Year EPS Growth (est.) is calculated as a simple weighted average of the pre-calculated mean long-term EPS growth rate estimates by brokerage analysts. Long Term Growth (LTG) is the annual EPS growth that the company can sustain over the next 3 or 5 years. Source: Factset
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 the Fund’s gross total 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, without right of termination, to waive fees and/or reimburse 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, 2020. 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 year-to-date performance for 2019. 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 manager’s 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 2019 Semiannual Report to Shareholders  |  27

	MANAGERS’ DISCUSSION
Royce Special Equity Fund (RSE)

Charlie Dreifus, CFA
Steven McBoyle

FUND PERFORMANCE
Royce Special Equity Fund rose 4.6% for the year-to-date period ended June 30, 2019, trailing its small-cap benchmarks, the Russell 2000 and Russell 2000 Value Indexes, which advanced 17.0% and 13.5%, respectively, over the same period. Much of this underperformance was the result of ineffective stock selection and sector allocation, as investors largely ignored those companies and industries that we like best. Below, we detail how we think this can change.
    The more dovish Fed stance that resulted in lower interest rates has not created any real economic benefits, and this has boosted growth stocks. The Fed’s pivot also caused a record drop in volatility. We have on occasion shared information about how the portfolio has underperformed when volatility is low and done better when it is high. Additionally—and likely related to these factors—for the quarter, year-to-date, and one-year periods ended June 30, 2019, investors favored fast-growing companies, which are underrepresented in our portfolio because of our exacting valuation constraints.

WHAT WORKED... AND WHAT DIDN’T

Five of the Fund’s eight equity sectors finished the first half in the black. Information Technology made by far the biggest positive contribution, with Industrials and Consumer Staples following. While its negative impact was comparatively small, Communication Services detracted most, followed by even more modest detractions from Real Estate and Energy. With the market’s strong rebound, the Fund’s cash level again rose during the first half in light of what we saw as elevated valuations throughout much of the asset class.
    Snack food company John B. Sanfilippo & Son was the biggest positive contributor at the position level, followed by Computer Services—which offers bank, payment processing, and related services—and Hubbell Incorporated, which manufactures, designs, and sells electrical and electronic products. Children’s publishing company Scholastic Corporation was the top detractor, followed by supermarket operator Weis Markets, diversified manufacturing company National Presto Industries, and furniture maker Hooker Furniture.
    Ineffective stock selection drove underperformance relative to the Russell 2000 in the first half of 2019, though sector allocation also detracted. Consumer Discretionary hurt results most, largely due to poor stock picking in household durables and auto components as well as our larger sector exposure. Industrials also hampered results, largely due to poor stock selection in aerospace & defense. The media group in the Communications Services sector was another notable source of underperformance while the portfolio received a relative advantage from our lack of exposure to Financials, which lagged the Russell 2000 as a whole. Our lack of exposure to Utilities was a second source of outperformance, albeit a very modest one.

Top Contributors to Performance Year-to-Date Through 6/30/19 (%)1
John B. Sanfilippo & Son	1.73
Computer Services	1.47
Hubbell Incorporated	1.37
AVX Corporation	0.66
Winnebago Industries	0.59
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/19 (%)2
Scholastic Corporation	-0.85
Weis Markets	-0.75
National Presto Industries	-0.57
Hooker Furniture	-0.53
Marcus & Millichap	-0.27
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

The state of our economy remains the center of attention. Most forward-looking measures are flashing at least yellow. The lack of inflation clearly remains a major concern for the Fed. The core personal consumption expenditures (PCE) price index—the Fed’s favorite indicator of inflation—is running at 1.5%. The U.S. is not alone; other central banks have remained accommodative with the result that $13 trillion of negative yielding debt is currently outstanding. While virtually all asset classes seem richly priced, lower interest rates could allow them to climb higher until the day of reckoning arrives. Excess liquidity is driving asset prices up again. Volatility has been low, and speculators are betting on this continuing. The current sentiment is similar to January and September of 2018 before market declines—more evidence of the complacency that’s so common these days. We must remember that if the economy experiences a substantial downturn, policymakers are starting from a weaker position in terms of response. They’ve already used rate and tax cuts to little or no avail.
    We believe that more fiscal actions, such as infrastructure spending and targeted tax incentives for housing or automobile purchases, are necessary to help the economy grow, make interest rates rise, and push inflation higher. These actions would also have a potentially positive impact on our portfolio. We see two other potential catalysts for higher returns. The first would be if the economy continues its modest growth track. Profit margins would come under pressure as they are already at all-time highs, and most if not all costs that could be removed were removed following the Great Financial Crisis. In this modest growth environment, we would likely see more intra-industry transactions. Our holdings would be prime targets as we believe they offer incremental earnings due to their low valuation, synergistic opportunities to improve earnings, and (unique to our holdings) the ability of the acquirer to use the strength and resources of our holdings to finance their own acquisition. The second would be a move toward tightening regulations regarding the use of non-GAAP earnings. If the Public Companies Accounting Oversight Board (PCAOB) and the SEC were to restrict the use of this pernicious form of reporting and implementation, we believe our portfolio would benefit because investors would seek out non-abusers such as our holdings. (Something similar occurred in 2002 after the Enron episode.) We like what we own and remain optimistic about the future results for the strategy.

28 | The Royce Funds 2019 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS   RYSEX RSEFX RSEIX RSQCX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/19
	JAN-JUN 20191	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	SINCE INCEPTION (5/1/98)
RSE	4.59	-5.42	7.47	3.53	9.66	6.89	9.25	8.46
Annual Operating Expenses: 1.18%
1 Not annualized

Relative Risk Adjusted Returns: Monthly Rolling Sharpe Ratios

20 Years Through 6/30/19

On a monthly rolling risk-adjusted basis, the Fund outperformed the Russell 2000 in 94% of all 10-year periods and 62% of all 5-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	114/121	94%	0.58	0.41
5-year	113/181	62%	0.65	0.51

¹Average of monthly rolling Sharpe Ratios over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^TM with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^TM. 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 97 for additional information.

Value of $10,000
Invested on 5/1/98 as of 6/30/19 ($)

Top 10 Positions
% of Net Assets
Meredith Corporation	6.1
Hubbell Incorporated	5.7
John B. Sanfilippo & Son	5.6
Standard Motor Products	5.2
Computer Services	4.9
Scholastic Corporation	4.4
Marcus & Millichap	3.5
National Presto Industries	3.3
AVX Corporation	3.3
Weis Markets	2.9

Portfolio Sector Breakdown
% of Net Assets
Consumer Discretionary	20.0
Industrials	17.9
Information Technology	12.9
Communication Services	10.5
Consumer Staples	8.5
Materials	5.3
Real Estate	3.5
Energy	0.6
Cash and Cash Equivalents	20.8

Calendar Year Total Returns (%)
YEAR	RSE
2018	-9.9
2017	7.9
2016	32.2
2015	-12.4
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

Upside/Downside Capture Ratios
Periods Ended 6/30/19 (%)
	UPSIDE	DOWNSIDE
10-Year	73	75
From 6/30/98 (Start of Fund’s First Full Quarter)	71	50

Portfolio Diagnostics
Fund Net Assets	$1,210 million
Number of Holdings	35
Turnover Rate	8%
Average Market Capitalization1	$1,207 million
Weighted Average P/E Ratio2,3	15.0x
Weighted Average P/B Ratio2	1.7x
Active Share4	99%
U.S. Investments (% of Net Assets)	76.5%
Non-U.S. Investments (% of Net Assets)	2.7%

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 (9% of portfolio holdings as of 6/30/19).
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. 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. 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 year-to-date performance for 2019. 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 manager’s 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 2019 Semiannual Report to Shareholders |  29

	MANAGERS’ DISCUSSION
Royce Total Return Fund (RTR)

Chuck Royce
Jay Kaplan, CFA

FUND PERFORMANCE
For the year-to-date period ended June 30, 2019, Royce Total Return Fund rose 15.3%, trailing the Russell 2000 Index, which was up 17.0% for the same period. In contrast, Total Return’s historic pattern of delivering better relative returns in difficult periods for stocks was evident in the trailing one-year period, when the Fund advanced 0.4% while the small-cap index declined 3.3%.

WHAT WORKED... AND WHAT DIDN’T

At the end of June, Financials and Industrials were the portfolio’s biggest sectors, accounting for more than half of its total assets. Unsurprisingly, then, they were the top-contributing sectors for 2019’s first half—and by a wide margin, leading 10 of the Fund’s 11 equity sectors that made positive impacts on performance. Only Communication Services detracted from results—and did so marginally—while Consumer Staples and Health Care made the smallest contributions. All three were among our lowest sector weightings at the end of June.
    The industries which made the three biggest positive contributions came from Financials—capital markets, the portfolio’s second-largest industry weighting at the end of June; insurance, its third largest; and banks, its biggest. Following these, four of the next five top-contributing industries were in Industrials—machinery, commercial services & supplies, aerospace & defense, and professional services. We were pleased to see such widespread strength from mostly cyclical areas, many of which did best in the more volatile second quarter, a period that also saw dividend-paying small-caps outpace non-dividend payers, 3.2% versus 1.0%. Detractions at the industry level were modest in comparison and included only eight groups. Specialty retail (Consumer Discretionary), diversified telecommunication services (Communication Services), road & rail (Industrials), and distributors (Consumer Discretionary) detracted most. Their combined effect, however, was decidedly modest.
    Similarly, individual positions that detracted made a comparatively minor impact on performance. Lancaster Colony produces specialty foods and other products for the retail and food service markets. While sales and earnings remained positive in the first half, expectations were for fatter margins and higher earnings. Its shares fell most precipitously in January following the announcement of fiscal second-quarter results. We reduced our stake in the first half. Agricultural equipment supplier Lindsay Corporation was the only one of the portfolio’s 19 machinery holdings to finish the first half in the red. The company faced several challenges, including lower farming incomes that have crimped capital spending and led to ongoing weakness in its core market, excess rainfall and flooding in the Midwest, and tariff and trade war woes. In early July, however, Lindsay noted an uptick in domestic irrigation sales, while recent improvement in key crop prices such as corn have improved agricultural sentiment. We trimmed our stake slightly in the first half.
    The Fund’s top contributor at the position level was Erie Indemnity, a property and casualty insurer with an attractive and uncommon corporate structure. Erie Insurance Exchange, an affiliated policyholder-owned company, issues and owns the policies, while Erie Indemnity provides management services to the Exchange. This gives it little direct liability, so it has low capital requirements and high returns on capital. Erie’s stock advanced steadily through the first half year as the company reported consistent growth and expanding margins. HEICO Corporation, which manufacturers replacement aerospace parts, saw its shares reach higher altitudes in June, after the company reported strong organic sales and expanding margins, boosted by strength in its flight support and electronics segments. These developments led HEICO to raise guidance for the rest of the year.
    The Fund lagged its benchmark mostly due to sector allocation, though stock selection was also slightly negative in the first half. Information Technology detracted most as both our underweight and stock selection miscues hampered relative results in this top-performing sector, where dividend-paying companies are scarce in many areas. Our overweight in Consumer Staples, along with some lagging stock selection in the food products industry, detracted from relative returns, though to a lesser degree, as did stock selection in Consumer Discretionary. The largest source of outperformance in the year-to-date period came from Financials and was entirely due to superior stock selection, as overweighting this sector detracted. Health Care also contributed positively—and quite modestly—to relative results.

Top Contributors to Performance Year-to-Date Through 6/30/19 (%)1
Erie Indemnity Cl. A	1.49
HEICO Corporation	0.71
Ares Management Cl. A	0.65
ManpowerGroup	0.53
Cohen & Steers	0.34
1Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/19 (%)2
Lancaster Colony	-0.15
Lindsay Corporation	-0.13
ATN International	-0.12
ArcBest	-0.11
Caleres	-0.10
2Net of dividends

CURRENT POSITIONING AND OUTLOOK

Markets are very good at surprising most investors. Today, given widespread concerns about slowing growth, increasing trade tensions, and the extended economic cycle, the most surprising outcome might be a rally. We see four favorable factors in the current market environment—low inflation, modest valuations, moderate growth, and increasing liquidity. When taken together, we see these factors as painting an attractive picture for small-cap investors. With so much attention on negative macro issues, we think investors may be missing this positive picture. We see highly promising select opportunities in dividend-paying small-cap cyclicals, particularly in Financials, Industrials, and Materials.

30 | The Royce Funds 2019 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYTRX RYTFX RTRIX RYTCX RTRRX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/19
	JAN-JUN 20191	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	SINCE INCEPTION (12/15/93)
RTR	15.32	0.36	9.95	5.74	11.83	7.72	9.06	10.40
Annual Operating Expenses: 1.20%
1Not annualized

Relative Risk Adjusted Returns: Monthly Rolling Sharpe Ratios

20 Years Through 6/30/19

On a monthly rolling risk-adjusted basis, the Fund outperformed the Russell 2000 in 93% of all 10-year periods and 81% of all 5-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	112/121	93%	0.49	0.41
5-year	147/181	81%	0.64	0.51

¹Average of monthly rolling Sharpe Ratios over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 97 for additional information.

Value of $10,000

Invested on 12/15/93 as of 6/30/19 ($)

Top 10 Positions
% of Net Assets
Erie Indemnity Cl. A	2.8
Quaker Chemical	1.9
First Citizens BancShares Cl. A	1.7
Ares Management Cl. A	1.7
HEICO Corporation	1.6
E-L Financial	1.5
Bank of Hawaii	1.3
Hubbell Incorporated	1.3
BOK Financial	1.3
Meredith Corporation	1.2

Portfolio Sector Breakdown
% of Net Assets
Financials	34.5
Industrials	25.9
Materials	10.4
Consumer Discretionary	6.2
Information Technology	5.4
Consumer Staples	3.9
Energy	3.7
Utilities	3.1
Communication Services	2.4
Health Care	1.3
Real Estate	1.2
Corporate Bonds	0.3
Cash and Cash Equivalents	1.7

Calendar Year Total Returns (%)
YEAR	RTR
2018	-12.5
2017	13.7
2016	25.9
2015	-7.2
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

Upside/Downside Capture Ratios
Periods Ended 6/30/19 (%)
	UPSIDE	DOWNSIDE
10-Year	82	75
From 12/31/93 (Start of Fund’s First Full Quarter)	81	57

Portfolio Diagnostics
Fund Net Assets	$1,558 million
Number of Holdings	241
Turnover Rate	7%
Average Market Capitalization1	$2,139 million
Weighted Average P/E Ratio2,3	17.2x
Weighted Average P/B Ratio2	1.9x
Active Share4	91%
U.S. Investments (% of Net Assets)	84.2%
Non-U.S. Investments (% of Net Assets)	14.1%

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 6/30/19).
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). Certain immaterial adjustments were made to the net assets of Royce Total Return Fund at 6/30/17 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. 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 year-to-date performance for 2019. 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. 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 manager’s 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 2019 Semiannual Report to Shareholders | 31

Schedules of Investments

Royce Dividend Value Fund
Common Stocks – 98.8%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 7.3%
AUTO COMPONENTS - 1.3%
Gentex Corporation	12,196	$	300,143
Nokian Renkaat	35,600		1,111,602
			1,411,745
HOTELS, RESTAURANTS & LEISURE - 0.1%
Cheesecake Factory	2,329		101,824
HOUSEHOLD DURABLES - 1.5%
Hunter Douglas	20,000		1,396,359
La-Z-Boy	8,415		258,004
			1,654,363
SPECIALTY RETAIL - 3.7%
American Eagle Outfitters	43,231		730,604
Caleres	53,778		1,071,258
Designer Brands Cl. A	59,215		1,135,151
USS	56,000		1,102,704
			4,039,717
TEXTILES, APPAREL & LUXURY GOODS - 0.7%
HUGO BOSS	9,800		651,900
Steven Madden	2,978		101,103
			753,003
Total (Cost $6,384,322)			7,960,652
CONSUMER STAPLES – 0.4%
FOOD & STAPLES RETAILING - 0.4%
FamilyMart UNY Holdings	19,200		458,029
Total (Cost $179,751)			458,029
ENERGY – 6.2%
ENERGY EQUIPMENT & SERVICES - 3.2%
Helmerich & Payne	29,504		1,493,492
TGS-NOPEC Geophysical	72,700		2,038,561
			3,532,053
OIL, GAS & CONSUMABLE FUELS - 3.0%
†Alliance Resource Partners L.P.	25,464		432,379
Cimarex Energy	17,300		1,026,409
Gaztransport Et Technigaz	18,200		1,824,284
			3,283,072
Total (Cost $6,309,149)			6,815,125
FINANCIALS – 28.2%
BANKS - 2.2%
Bank of Georgia Group	39,500		751,442
BOK Financial	17,114		1,291,765
City Holding Company	4,289		327,079
			2,370,286
CAPITAL MARKETS - 22.2%
Ashmore Group	367,200		2,375,928
AURELIUS Equity Opportunities	7,200		341,894
B3-Brasil, Bolsa, Balcao	220,000		2,146,174
Bolsa Mexicana de Valores	987,300		1,863,107
Carlyle Group L.P.	97,800		2,211,258
Coronation Fund Managers	153,700		487,780
Federated Investors Cl. B	33,200		1,079,000
Houlihan Lokey Cl. A	2,334		103,933
Jupiter Fund Management	225,700		1,211,001
KKR & Co. Cl. A	132,500		3,348,275
Lazard Cl. A	23,700		815,043
Moelis & Company Cl. A	21,059		736,012
Northern Trust	18,600		1,674,000
SEI Investments	37,900		2,126,190
Sprott	588,600		1,514,705
State Street	18,600		1,042,716
Value Partners Group	1,818,100		1,212,579
			24,289,595
DIVERSIFIED FINANCIAL SERVICES - 1.0%
Jefferies Financial Group	59,700		1,148,031
INSURANCE - 0.9%
Reinsurance Group of America	6,305		983,769
THRIFTS & MORTGAGE FINANCE - 1.9%
Genworth MI Canada	33,348		1,055,280
WSFS Financial	25,901		1,069,711
			2,124,991
Total (Cost $21,412,960)			30,916,672
HEALTH CARE – 2.2%
HEALTH CARE PROVIDERS & SERVICES - 0.1%
Ensign Group (The)	2,151		122,435
PHARMACEUTICALS - 2.1%
Recordati	39,100		1,629,926
Santen Pharmaceutical	41,600		688,735
			2,318,661
Total (Cost $608,345)			2,441,096
INDUSTRIALS – 29.3%
AEROSPACE & DEFENSE - 4.3%
HEICO Corporation Cl. A	45,420		4,695,065
AIRLINES - 2.0%
Allegiant Travel	7,371		1,057,739
Hawaiian Holdings	40,156		1,101,479
			2,159,218
BUILDING PRODUCTS - 1.6%
Apogee Enterprises	5,400		234,576
Geberit	800		373,694
TOTO	29,600		1,168,186
			1,776,456
COMMERCIAL SERVICES & SUPPLIES - 0.5%
Herman Miller	11,276		504,037
CONSTRUCTION & ENGINEERING - 0.1%
Comfort Systems USA	2,092		106,671
ELECTRICAL EQUIPMENT - 1.7%
EnerSys	3,256		223,036
Hubbell Incorporated	12,700		1,656,080
			1,879,116
MACHINERY - 12.3%
Alamo Group	1,088		108,724
Federal Signal	3,929		105,100
Graco	50,400		2,529,072
IDEX Corporation	17,100		2,943,594
Lincoln Electric Holdings	10,550		868,476
Lindsay Corporation	21,400		1,759,294
Pfeiffer Vacuum Technology	9,600		1,408,185
Spirax-Sarco Engineering	21,900		2,554,522
Wabash National	71,392		1,161,548
			13,438,515
MARINE - 1.4%
Clarkson	48,600		1,549,160
PROFESSIONAL SERVICES - 2.5%
Korn Ferry	8,001		320,600
ManpowerGroup	22,600		2,183,160

32 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce Dividend Value Fund (continued)
	SHARES		VALUE
INDUSTRIALS (continued)
PROFESSIONAL SERVICES (continued)
Robert Half International	3,994	$	227,698
			2,731,458
ROAD & RAIL - 0.9%
Old Dominion Freight Line	700		104,482
Werner Enterprises	29,343		911,981
			1,016,463
TRADING COMPANIES & DISTRIBUTORS - 2.0%
Applied Industrial Technologies	36,500		2,245,845
Total (Cost $15,579,109)			32,102,004
INFORMATION TECHNOLOGY – 9.0%
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 5.2%
Benchmark Electronics	4,268		107,212
FLIR Systems	65,800		3,559,780
Methode Electronics	32,838		938,182
Vishay Intertechnology	66,917		1,105,469
			5,710,643
IT SERVICES - 2.4%
KBR	106,200		2,648,628
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.9%
MKS Instruments	12,622		983,128
SOFTWARE - 0.5%
SimCorp	5,600		541,730
Total (Cost $7,084,123)			9,884,129
MATERIALS – 14.3%
CHEMICALS - 3.1%
Quaker Chemical	16,400		3,327,232
CONTAINERS & PACKAGING - 3.5%
AptarGroup	29,500		3,668,030
Greif Cl. A	6,300		205,065
			3,873,095
METALS & MINING - 7.7%
Franco-Nevada	26,400		2,240,832
Reliance Steel & Aluminum	28,300		2,677,746
Royal Gold	15,500		1,588,595
Worthington Industries	46,800		1,884,168
			8,391,341
Total (Cost $6,412,041)			15,591,668
REAL ESTATE – 0.4%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.4%
Relo Group	18,400		463,008
Total (Cost $85,795)			463,008
UTILITIES – 1.5%
WATER UTILITIES - 1.5%
Aqua America	39,800		1,646,526
Total (Cost $953,083)			1,646,526
TOTAL COMMON STOCKS
(Cost $65,008,678)			108,278,909
REPURCHASE AGREEMENT – 1.2%
Fixed Income Clearing Corporation, 0.50% dated 6/28/19, due 7/1/19, maturity value $1,286,054 (collateralized by obligations of various U.S. Government Agencies, 1.75% due 5/31/22, valued at $1,312,112)
(Cost $1,286,000)			1,286,000
TOTAL INVESTMENTS – 100.0%
(Cost $66,294,678)			109,564,909
LIABILITIES LESS CASH AND OTHER ASSETS – (0.0)%			(20,635	)
NET ASSETS – 100.0%		$	109,544,274

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 33

Schedules of Investments

Royce Global Financial Services Fund
Common Stocks – 96.8%
	SHARES		VALUE
BANKS - 18.8%
BOK Financial		10,450	$	788,766
Bryn Mawr Bank		10,000		373,200
†Cadence Bancorporation Cl. A		15,887		330,450
Canadian Western Bank		14,000		319,331
Capital City Bank Group		25,481		633,203
Chemung Financial		14,512		701,510
County Bancorp		15,895		271,645
First Citizens BancShares Cl. A		2,538		1,142,785
First Republic Bank		6,498		634,530
Live Oak Bancshares		22,500		385,875
Popular		23,465		1,272,742
TriState Capital Holdings 1		11,600		247,544
Umpqua Holdings		17,400		288,666
Total (Cost $5,394,543)				7,390,247
CAPITAL MARKETS - 48.6%
Ares Management Cl. A		38,950		1,019,321
Ashmore Group		157,000		1,015,852
Associated Capital Group Cl. A		7,000		261,800
B3-Brasil, Bolsa, Balcao		61,000		595,075
Bolsa Mexicana de Valores		174,000		328,351
Canaccord Genuity Group		133,000		609,370
Carlyle Group L.P.		33,400		755,174
Charles Schwab		8,400		337,596
Coronation Fund Managers		61,200		194,224
CRISIL		14,000		298,345
Edelweiss Financial Services		155,000		381,956
Egyptian Financial Group-Hermes
Holding Company		307,987		317,303
GMP Capital		108,000		187,209
Great Elm Capital Group 1		115,545		496,843
Hamilton Lane Cl. A		11,500		656,190
Hellenic Exchanges - Athens Stock Exchange		50,000		278,590
Intermediate Capital Group		39,111		685,929
INTL FCStone 1		12,870		509,523
IOOF Holdings		55,000		199,628
JSE		51,000		506,922
Jupiter Fund Management		106,900		573,576
KKR & Co. Cl. A		23,900		603,953
MarketAxess Holdings		4,370		1,404,605
Northern Trust		3,770		339,300
NZX		580,000		436,401
Rothschild & Co		27,700		897,684
SEI Investments		7,950		445,995
Silvercrest Asset Management Group Cl. A		41,600		583,648
Sprott		500,000		1,286,702
TD Ameritrade Holding Corporation		8,680		433,306
U.S. Global Investors Cl. A		183,900		332,859
Value Partners Group		772,000		514,884
Virtu Financial Cl. A		47,400		1,032,372
Warsaw Stock Exchange		19,000		218,566
Westaim Corporation 1		105,000		212,478
WisdomTree Investments		27,100		167,207
Total (Cost $13,618,140)				19,118,737
CONSUMER FINANCE - 0.5%
Currency Exchange International 1		13,000		218,495
Total (Cost $268,728)				218,495
DIVERSIFIED FINANCIAL SERVICES - 1.4%
ECN Capital		75,000		241,686
Onex Corporation		5,000		301,592
Total (Cost $570,788)				543,278
HOTELS, RESTAURANTS & LEISURE - 0.8%
Thomas Cook (India)		94,000		330,775
Total (Cost $270,518)				330,775
INSURANCE - 6.6%
E-L Financial		1,820		1,035,394
First American Financial		3,900		209,430
MBIA 1		95,300		887,243
National Western Life Group Cl. A		1,782		457,974
Total (Cost $2,362,021)				2,590,041
IT SERVICES - 1.8%
Cass Information Systems		5,016		243,175
PayPal Holdings 1		4,054		464,021
Total (Cost $357,571)				707,196
METALS & MINING - 3.5%
Franco-Nevada		16,500		1,400,520
Total (Cost $900,426)				1,400,520
PROFESSIONAL SERVICES - 2.5%
IHS Markit 1		11,900		758,268
People Corporation 1		35,000		216,487
Total (Cost $412,944)				974,755
REAL ESTATE MANAGEMENT & DEVELOPMENT - 7.4%
Altus Group		32,000		783,658
FirstService Corporation		12,600		1,208,592
FRP Holdings 1		7,957		443,762
RMR Group (The) Cl. A		10,000		469,800
Total (Cost $1,804,823)				2,905,812
SOFTWARE - 2.9%
Benefitfocus 1		10,600		287,790
Bottomline Technologies 1		9,800		433,552
Envestnet 1		6,000		410,220
Total (Cost $836,700)				1,131,562
TRADING COMPANIES & DISTRIBUTORS - 2.0%
Air Lease Cl. A		19,500		806,130
Total (Cost $854,965)				806,130
TOTAL COMMON STOCKS
(Cost $27,652,167)				38,117,548
REPURCHASE AGREEMENT – 3.2%
Fixed Income Clearing Corporation, 0.50% dated 6/28/19, due 7/1/19, maturity value $1,238,052 (collateralized by obligations of various U.S. Government Agencies, 1.75% due 5/31/22, valued at $1,267,039)
(Cost $1,238,000)				1,238,000
TOTAL INVESTMENTS – 100.0%
(Cost $28,890,167)				39,355,548
CASH AND OTHER ASSETS LESS LIABILITIES – 0.0%				15,710
NET ASSETS – 100.0%			$	39,371,258

34 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce International Premier Fund
Common Stocks – 94.1%
	SHARES		VALUE
AUSTRALIA – 8.7%
Bravura Solutions		2,830,000	$	9,655,855
Cochlear		72,500		10,527,871
Hansen Technologies		4,750,000		13,105,518
IPH		1,900,000		9,950,857
Technology One		1,740,000		9,625,948
Total (Cost $40,603,148)				52,866,049
BRAZIL – 4.4%
OdontoPrev		2,642,950		12,567,941
TOTVS		1,203,000		13,775,156
Total (Cost $20,369,113)				26,343,097
CANADA – 5.9%
Altus Group		518,000		12,685,472
Computer Modelling Group		2,300,000		12,786,072
Morneau Shepell		462,000		10,432,087
Total (Cost $34,165,490)				35,903,631
CHINA – 1.8%
TravelSky Technology		5,525,000		11,104,177
Total (Cost $13,059,271)				11,104,177
DENMARK – 1.7%
SimCorp		104,000		10,060,709
Total (Cost $7,490,349)				10,060,709
FRANCE – 4.7%
Lectra		377,000		9,666,886
Neurones		346,300		8,623,734
Thermador Groupe		158,590		10,315,031
Total (Cost $27,187,026)				28,605,651
GERMANY – 5.2%
Amadeus Fire		81,154		11,055,171
Carl Zeiss Meditec		103,000		10,160,274
†Norma Group		250,000		10,358,983
Total (Cost $26,670,889)				31,574,428
INDIA – 1.9%
AIA Engineering 1		390,000		10,147,260
†Cyient		149,000		1,167,997
Total (Cost $10,533,503)				11,315,257
ITALY – 1.8%
DiaSorin		94,000		10,913,205
Total (Cost $8,022,158)				10,913,205
JAPAN – 18.1%
As One		135,000		11,206,697
Benefit One		625,000		10,770,765
Cosel		1,100,000		11,722,859
Daifuku		287,000		16,104,902
EPS Holdings		94,900		1,471,713
Medikit		104,800		5,754,450
Meitec Corporation		340,000		17,439,132
NSD		400,000		11,556,833
Relo Group		370,000		9,310,485
TKC Corporation		320,400		14,175,282
Total (Cost $96,258,252)				109,513,118
NETHERLANDS – 5.5%
IMCD		198,000		18,146,754
Intertrust		725,000		14,979,305
Total (Cost $28,360,385)				33,126,059
NEW ZEALAND – 1.6%
Fisher & Paykel Healthcare		950,000		9,866,728
Total (Cost $8,116,335)				9,866,728
NORWAY – 2.0%
TGS-NOPEC Geophysical		440,000		12,337,919
Total (Cost $12,117,915)				12,337,919
SINGAPORE – 1.8%
XP Power		377,000		10,580,837
Total (Cost $11,526,418)				10,580,837
SWEDEN – 8.5%
Bravida Holding		1,270,000		11,255,580
Hexpol		1,970,000		16,048,685
Lagercrantz Group		700,000		9,995,531
Loomis Cl. B		415,000		14,265,115
Total (Cost $47,936,674)				51,564,911
SWITZERLAND – 8.8%
Kardex		70,000		12,218,808
LEM Holding		7,500		10,540,873
Partners Group Holding		21,500		16,892,542
VZ Holding		50,000		13,701,086
Total (Cost $45,450,075)				53,353,309
UNITED KINGDOM – 11.7%
Ashmore Group		1,845,000		11,937,873
Consort Medical		600,000		6,476,741
Croda International		195,000		12,679,174
†Restore		1,745,000		8,864,246
Spirax-Sarco Engineering		125,000		14,580,606
Victrex		595,000		16,351,613
Total (Cost $64,740,401)				70,890,253
TOTAL COMMON STOCKS
(Cost $502,607,402)				569,919,338
PREFERRED STOCK – 2.1%
GERMANY – 2.1%
FUCHS PETROLUB		330,000		12,975,905
(Cost $14,481,005)				12,975,905
REPURCHASE AGREEMENT – 4.9%
Fixed Income Clearing Corporation, 0.50% dated 6/28/19, due 7/1/19, maturity value $29,374,224 (collateralized by obligations of various U.S. Government Agencies, 1.75% due 5/31/22, valued at $29,963,223)
(Cost $29,373,000)				29,373,000
TOTAL INVESTMENTS – 101.1%
(Cost $546,461,407)				612,268,243
LIABILITIES LESS CASH AND OTHER ASSETS – (1.1)%				(6,735,690	)
NET ASSETS – 100.0%			$	605,532,553

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 35

Schedules of Investments

Royce Low-Priced Stock Fund
Common Stocks – 92.5%
	SHARES		VALUE
COMMUNICATION SERVICES – 2.9%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.8%
ORBCOMM 1		214,500	$	1,555,125
ENTERTAINMENT - 0.6%
Gaia Cl. A 1		166,500		1,262,070
INTERACTIVE MEDIA & SERVICES - 1.0%
QuinStreet 1		137,042		2,172,116
MEDIA - 0.5%
Marchex Cl. B 1		232,700		1,093,690
Total (Cost $5,356,450)				6,083,001
CONSUMER DISCRETIONARY – 13.5%
AUTO COMPONENTS - 4.4%
Fox Factory Holding 1,2		28,800		2,376,288
Modine Manufacturing 1		183,900		2,631,609
Stoneridge 1		122,500		3,864,875
Unique Fabricating 1		216,141		585,742
				9,458,514
HOTELS, RESTAURANTS & LEISURE - 3.5%
Century Casinos 1		368,300		3,572,510
Lindblad Expeditions Holdings 1		114,000		2,046,300
Red Lion Hotels 1,2		265,400		1,886,994
				7,505,804
HOUSEHOLD DURABLES - 0.9%
Lovesac Company (The) 1,2		61,100		1,898,377
INTERNET & DIRECT MARKETING RETAIL - 1.2%
Rubicon Project (The) 1		388,500		2,470,860
LEISURE PRODUCTS - 0.7%
MasterCraft Boat Holdings 1		76,700		1,502,553
SPECIALTY RETAIL - 2.1%
Buckle (The)		62,675		1,084,904
Designer Brands Cl. A		85,400		1,637,118
Shoe Carnival		63,100		1,741,560
				4,463,582
TEXTILES, APPAREL & LUXURY GOODS - 0.7%
Vera Bradley 1,2		130,200		1,562,400
Total (Cost $21,666,301)				28,862,090
CONSUMER STAPLES – 1.1%
BEVERAGES - 0.7%
Primo Water 1,2		124,500		1,531,350
FOOD PRODUCTS - 0.4%
Farmer Bros. 1		54,739		896,077
Total (Cost $3,391,478)				2,427,427
ENERGY – 4.9%
ENERGY EQUIPMENT & SERVICES - 4.1%
Gulf Island Fabrication 1		51,375		364,763
Natural Gas Services Group 1		90,800		1,498,200
Newpark Resources 1		276,800		2,053,856
Pason Systems		70,250		1,018,170
Profire Energy 1		684,920		1,034,229
TGS-NOPEC Geophysical		52,000		1,458,118
Total Energy Services		215,500		1,359,268
				8,786,604
OIL, GAS & CONSUMABLE FUELS - 0.8%
Ardmore Shipping 1		194,600		1,585,990
Total (Cost $9,412,206)				10,372,594
FINANCIALS – 11.6%
BANKS - 4.1%
Allegiance Bancshares 1,2		45,200		1,506,968
BayCom Corporation 1		62,000		1,357,800
County Bancorp		17,300		295,657
HarborOne Bancorp 1		97,600		1,828,048
Investar Holding		73,000		1,741,050
TriState Capital Holdings 1		90,700		1,935,538
†Two River Bancorp		14,700		211,092
				8,876,153
CAPITAL MARKETS - 4.9%
B. Riley Financial		109,400		2,282,084
†Canaccord Genuity Group		295,600		1,354,358
Hamilton Lane Cl. A		34,488		1,967,885
Silvercrest Asset Management Group Cl. A		164,300		2,305,129
Sprott		971,000		2,498,775
				10,408,231
INSURANCE - 0.5%
Health Insurance Innovations Cl. A 1,2		40,000		1,036,800
THRIFTS & MORTGAGE FINANCE - 2.1%
Meridian Bancorp		23,400		418,626
PCSB Financial		114,600		2,320,650
Western New England Bancorp		187,800		1,754,052
				4,493,328
Total (Cost $24,219,823)				24,814,512
HEALTH CARE – 11.7%
BIOTECHNOLOGY - 2.7%
Heron Therapeutics 1		70,000		1,301,300
Progenics Pharmaceuticals 1		310,074		1,913,156
Zealand Pharma 1		119,400		2,595,672
				5,810,128
HEALTH CARE EQUIPMENT & SUPPLIES - 4.2%
†Apyx Medical 1,2		28,200		189,504
AtriCure 1		83,100		2,479,704
CryoLife 1		82,700		2,475,211
OrthoPediatrics Corporation 1,2		59,100		2,304,900
Surmodics 1		36,600		1,580,022
				9,029,341
HEALTH CARE TECHNOLOGY - 0.2%
†HTG Molecular Diagnostics 1,2		197,900		328,514
LIFE SCIENCES TOOLS & SERVICES - 3.1%
Harvard Bioscience 1		562,400		1,124,800
NeoGenomics 1		117,300		2,573,562
Quanterix Corporation 1		87,300		2,949,867
				6,648,229
PHARMACEUTICALS - 1.5%
Axsome Therapeutics 1		114,700		2,953,525
Paratek Pharmaceuticals 1		46,100		183,939
				3,137,464
Total (Cost $15,653,470)				24,953,676
INDUSTRIALS – 20.1%
AEROSPACE & DEFENSE - 2.1%
CPI Aerostructures 1		246,766		2,075,302
Kratos Defense & Security Solutions 1		105,700		2,419,473
				4,494,775
COMMERCIAL SERVICES & SUPPLIES - 0.7%
Heritage-Crystal Clean 1		60,000		1,578,600
CONSTRUCTION & ENGINEERING - 4.4%
Ameresco Cl. A 1		199,500		2,938,635

36 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce Low-Priced Stock Fund (continued)
	SHARES		VALUE
INDUSTRIALS (continued)
CONSTRUCTION & ENGINEERING (continued)
Construction Partners Cl. A 1		104,700	$	1,572,594
IES Holdings 1		89,800		1,692,730
Northwest Pipe 1		122,000		3,145,160
				9,349,119
ELECTRICAL EQUIPMENT - 0.6%
American Superconductor 1		39,400		365,632
Power Solutions International 1,3		99,900		969,030
				1,334,662
INDUSTRIAL CONGLOMERATES - 0.8%
Raven Industries		45,300		1,625,364
MACHINERY - 7.3%
ASV Holdings 1		146,390		1,002,771
Graham Corporation		126,900		2,564,649
Kornit Digital 1,2		88,900		2,814,574
Luxfer Holdings		68,900		1,689,428
Lydall 1		54,000		1,090,800
Porvair		344,400		2,545,497
Spartan Motors		139,100		1,524,536
Wabash National		140,500		2,285,935
				15,518,190
MARINE - 0.9%
Clarkson		60,931		1,942,220
PROFESSIONAL SERVICES - 3.3%
GP Strategies 1		122,500		1,847,300
Heidrick & Struggles International		36,640		1,098,101
Kforce		53,674		1,883,421
Resources Connection		144,700		2,316,647
				7,145,469
Total (Cost $29,628,511)				42,988,399
INFORMATION TECHNOLOGY – 23.9%
COMMUNICATIONS EQUIPMENT - 1.6%
Digi International 1		139,200		1,765,056
Harmonic 1		282,400		1,567,320
				3,332,376
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 5.1%
Fabrinet 1		36,200		1,798,054
LightPath Technologies Cl. A 1		890,384		810,249
nLIGHT 1		84,300		1,618,560
Novanta 1		22,500		2,121,750
PC Connection		60,800		2,126,784
Vishay Precision Group 1		59,900		2,433,737
				10,909,134
IT SERVICES - 1.1%
Carbonite 1		92,200		2,400,888
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 13.6%
Adesto Technologies 1,2		197,400		1,608,810
Aehr Test Systems 1,2		590,400		974,160
AXT 1		237,200		939,312
Brooks Automation		66,582		2,580,053
†Camtek		49,800		420,810
Cirrus Logic 1		31,600		1,380,920
Cohu		89,900		1,387,157
CyberOptics Corporation 1		58,700		952,701
FormFactor 1		191,500		3,000,805
†Ichor Holdings 1		56,700		1,340,388
Inphi Corporation 1		48,400		2,424,840
NeoPhotonics Corporation 1		171,400		716,452
Nova Measuring Instruments 1,2		86,300		2,208,417
PDF Solutions 1		123,200		1,616,384
Photronics 1		270,000		2,214,000
Rudolph Technologies 1		100,500		2,776,815
Ultra Clean Holdings 1		182,500		2,540,400
				29,082,424
SOFTWARE - 2.5%
Agilysys 1		121,000		2,597,870
QAD Cl. A		66,513		2,674,488
				5,272,358
Total (Cost $38,167,373)				50,997,180
MATERIALS – 2.3%
CHEMICALS - 0.8%
Trecora Resources 1		168,401		1,611,598
METALS & MINING - 1.5%
Ferroglobe (Warranty Insurance Trust) 1,4		205,763		0
Major Drilling Group International 1		468,500		1,513,310
Superior Gold 1		532,000		292,497
Universal Stainless & Alloy Products 1,2		86,200		1,379,200
				3,185,007
Total (Cost $6,533,044)				4,796,605
REAL ESTATE – 0.5%
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.5%
†Postal RealtyTrust Cl. A		72,600		1,143,450
Total (Cost $1,206,970)				1,143,450
TOTAL COMMON STOCKS
(Cost $155,235,626)				197,438,934
REPURCHASE AGREEMENT – 6.8%
Fixed Income Clearing Corporation, 0.50% dated 6/28/19, due 7/1/19, maturity value $14,612,609 (collateralized by obligations of various U.S. Government Agencies, 1.75% due 5/31/22, valued at $14,908,995)
(Cost $14,612,000)				14,612,000
COLLATERAL RECEIVED FOR SECURITIES LOANED – 0.8%
Money Market Funds
Federated Government Obligations Fund (7 day yield-2.2655%)
(Cost $1,601,437)				1,601,437
TOTAL INVESTMENTS – 100.1%
(Cost $171,449,063)				213,652,371
LIABILITIES LESS CASH AND OTHER ASSETS – (0.1)%				(274,765	)
NET ASSETS – 100.0%			$	213,377,606

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 37

Schedules of Investments

Royce Micro-Cap Fund
Common Stocks – 97.6%
	SHARES		VALUE
COMMUNICATION SERVICES – 2.6%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.6%
ORBCOMM 1		115,300	$	835,925
ENTERTAINMENT - 0.6%
Gaia Cl. A 1		102,900		779,982
INTERACTIVE MEDIA & SERVICES - 1.0%
QuinStreet 1		83,904		1,329,878
MEDIA - 0.4%
Marchex Cl. B 1		111,500		524,050
Total (Cost $2,784,817)				3,469,835
CONSUMER DISCRETIONARY – 10.4%
AUTO COMPONENTS - 2.6%
Fox Factory Holding 1		14,800		1,221,148
Stoneridge 1		58,600		1,848,830
Unique Fabricating 1		172,900		468,559
				3,538,537
HOTELS, RESTAURANTS & LEISURE - 2.5%
Century Casinos 1		121,800		1,181,460
Lindblad Expeditions Holdings 1		62,500		1,121,875
Red Lion Hotels 1,2		152,300		1,082,853
				3,386,188
HOUSEHOLD DURABLES - 1.5%
Cavco Industries 1		5,210		820,783
Lovesac Company (The) 1		37,200		1,155,804
				1,976,587
LEISURE PRODUCTS - 0.8%
MasterCraft Boat Holdings 1		55,500		1,087,245
SPECIALTY RETAIL - 1.8%
Citi Trends		48,724		712,345
Haverty Furniture		48,500		825,955
Shoe Carnival		35,111		969,064
				2,507,364
TEXTILES, APPAREL & LUXURY GOODS - 1.2%
Culp		31,474		598,006
Vera Bradley 1		87,600		1,051,200
				1,649,206
Total (Cost $10,472,257)				14,145,127
CONSUMER STAPLES – 2.0%
BEVERAGES - 0.6%
Primo Water 1,2		70,600		868,380
FOOD PRODUCTS - 1.4%
Farmer Bros. 1		44,500		728,465
John B. Sanfilippo & Son		14,100		1,123,629
				1,852,094
Total (Cost $2,881,726)				2,720,474
ENERGY – 4.3%
ENERGY EQUIPMENT & SERVICES - 3.6%
Gulf Island Fabrication 1		96,518		685,278
Independence Contract Drilling 1		305,386		482,510
Natural Gas Services Group 1		56,187		927,085
Newpark Resources 1		157,200		1,166,424
Profire Energy 1		485,812		733,576
Total Energy Services		131,900		831,961
				4,826,834
OIL, GAS & CONSUMABLE FUELS - 0.7%
Ardmore Shipping 1		125,275		1,020,991
Total (Cost $6,409,912)				5,847,825
FINANCIALS – 14.2%
BANKS - 6.5%
Allegiance Bancshares 1		29,700		990,198
BayCom Corporation 1		41,900		917,610
Caribbean Investment Holdings 1		1,858,138		377,559
County Bancorp		54,200		926,278
HarborOne Bancorp 1		61,500		1,151,895
HomeTrust Bancshares		45,500		1,143,870
Investar Holding		47,600		1,135,260
Midway Investments 1,4		1,858,170		0
TriState Capital Holdings 1		52,757		1,125,834
Two River Bancorp		71,100		1,020,996
				8,789,500
CAPITAL MARKETS - 3.7%
B. Riley Financial		68,400		1,426,824
Canaccord Genuity Group		252,000		1,154,595
INTL FCStone 1,2		12,000		475,080
Silvercrest Asset Management Group Cl. A		84,700		1,188,341
Westwood Holdings Group		22,572		794,535
				5,039,375
DIVERSIFIED FINANCIAL SERVICES - 0.6%
Waterloo Investment Holdings 1,4		2,760,000		828,000
INSURANCE - 0.6%
Health Insurance Innovations Cl. A 1,2		27,800		720,576
THRIFTS & MORTGAGE FINANCE - 2.8%
Meridian Bancorp		15,800		282,662
PCSB Financial		56,700		1,148,175
Territorial Bancorp		40,800		1,260,720
Western New England Bancorp		119,300		1,114,262
				3,805,819
Total (Cost $17,960,413)				19,183,270
HEALTH CARE – 12.5%
BIOTECHNOLOGY - 3.0%
BioSpecifics Technologies 1,2		20,300		1,212,113
Dynavax Technologies 1		64,000		255,360
Progenics Pharmaceuticals 1		205,900		1,270,403
Zealand Pharma 1		62,700		1,363,054
				4,100,930
HEALTH CARE EQUIPMENT & SUPPLIES - 5.6%
†Apyx Medical 1		19,300		129,696
AtriCure 1		37,400		1,116,016
Chembio Diagnostics 1		136,053		828,563
CryoLife 1		38,455		1,150,958
Mesa Laboratories		4,700		1,148,398
OrthoPediatrics Corporation 1		32,000		1,248,000
Surmodics 1		24,822		1,071,566
Tactile Systems Technology 1		14,800		842,416
				7,535,613
HEALTH CARE TECHNOLOGY - 0.2%
†HTG Molecular Diagnostics 1,2		135,500		224,930
LIFE SCIENCES TOOLS & SERVICES - 3.0%
Harvard Bioscience 1		348,079		696,158
NeoGenomics 1		81,000		1,777,140
Quanterix Corporation 1		45,800		1,547,582
				4,020,880
PHARMACEUTICALS - 0.7%
Correvio Pharma 1		252,700		545,832
Paratek Pharmaceuticals 1		91,600		365,484

38 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce Micro-Cap Fund (continued)
	SHARES		VALUE
HEALTH CARE (continued)
PHARMACEUTICALS (continued)
Tetraphase Pharmaceuticals 1,2		253,300	$	121,660
				1,032,976
Total (Cost $12,697,276)				16,915,329
INDUSTRIALS – 22.7%
AEROSPACE & DEFENSE - 1.8%
Astronics Corporation 1		28,091		1,129,820
CPI Aerostructures 1		159,018		1,337,341
				2,467,161
COMMERCIAL SERVICES & SUPPLIES - 1.6%
Acme United		49,800		1,124,484
Heritage-Crystal Clean 1		41,774		1,099,074
				2,223,558
CONSTRUCTION & ENGINEERING - 2.2%
Construction Partners Cl. A 1		94,200		1,414,884
Northwest Pipe 1		61,600		1,588,048
				3,002,932
ELECTRICAL EQUIPMENT - 1.7%
American Superconductor 1		114,400		1,061,632
Encore Wire		20,200		1,183,316
				2,244,948
INDUSTRIAL CONGLOMERATES - 0.6%
Raven Industries		23,700		850,356
MACHINERY - 9.2%
Alimak Group		78,200		1,200,855
Exco Technologies		143,300		848,059
FreightCar America 1		86,209		506,047
Graham Corporation		59,388		1,200,231
Greenbrier Companies (The)		15,800		480,320
Helios Technologies		19,100		886,431
Kadant		12,276		1,114,784
Kornit Digital 1,2		44,100		1,396,206
Lindsay Corporation		12,000		986,520
Luxfer Holdings		46,500		1,140,180
Lydall 1		38,100		769,620
Spartan Motors		94,500		1,035,720
Westport Fuel Systems 1		314,800		853,108
				12,418,081
MARINE - 0.9%
Clarkson		36,500		1,163,464
PROFESSIONAL SERVICES - 3.8%
CRA International		20,183		773,614
GP Strategies 1		84,218		1,270,008
Heidrick & Struggles International		23,500		704,295
Kforce		30,258		1,061,753
Resources Connection		80,952		1,296,042
				5,105,712
ROAD & RAIL - 0.7%
Marten Transport		50,955		924,833
TRADING COMPANIES & DISTRIBUTORS - 0.2%
†Transcat 1		10,300		263,577
Total (Cost $22,160,870)				30,664,622
INFORMATION TECHNOLOGY – 21.6%
COMMUNICATIONS EQUIPMENT - 1.4%
Digi International 1		95,900		1,216,012
EMCORE Corporation 1		146,800		482,972
Harmonic 1		24,200		134,310
				1,833,294
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 5.0%
ePlus 1		12,734		877,882
Fabrinet 1		22,549		1,120,009
†LightPath Technologies Cl. A 1		225,600		205,296
†Luna Innovations 1		28,100		126,450
nLIGHT 1		43,400		833,280
Novanta 1		11,442		1,078,980
PC Connection		33,300		1,164,834
Vishay Precision Group 1		33,800		1,373,294
				6,780,025
IT SERVICES - 0.9%
Cass Information Systems		24,216		1,173,992
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 11.7%
Adesto Technologies 1		200,800		1,636,520
Aehr Test Systems 1		279,300		460,845
AXT 1		146,100		578,556
Brooks Automation		27,800		1,077,250
†Camtek		50,300		425,035
Cohu		46,100		711,323
CyberOptics Corporation 1		35,200		571,296
Everspin Technologies 1,2		97,900		638,308
†Ichor Holdings 1		32,900		777,756
Nanometrics 1		8,600		298,506
NeoPhotonics Corporation 1		190,500		796,290
Nova Measuring Instruments 1		52,200		1,335,798
PDF Solutions 1		88,700		1,163,744
Photronics 1		150,000		1,230,000
Rudolph Technologies 1		53,451		1,476,851
Silicon Motion Technology ADR		25,800		1,145,004
Ultra Clean Holdings 1		106,500		1,482,480
				15,805,562
SOFTWARE - 1.8%
Agilysys 1		62,000		1,331,140
QAD Cl. A		29,200		1,174,132
				2,505,272
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.8%
AstroNova		43,100		1,113,704
Total (Cost $22,048,411)				29,211,849
MATERIALS – 4.2%
CHEMICALS - 2.1%
FutureFuel Corporation		62,500		730,625
Quaker Chemical		5,260		1,067,149
Trecora Resources 1		113,900		1,090,023
				2,887,797
METALS & MINING - 2.1%
Haynes International		35,430		1,127,028
Major Drilling Group International 1		241,700		780,719
Universal Stainless & Alloy Products 1		58,200		931,200
				2,838,947
Total (Cost $5,910,984)				5,726,744
REAL ESTATE – 3.1%
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 1.4%
Community Healthcare Trust		28,600		1,127,126
†Postal Realty Trust Cl. A		47,500		748,125
				1,875,251
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.7%
FRP Holdings 1		22,975		1,281,316

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 39

Schedules of Investments

Royce Micro-Cap Fund (continued)
	SHARES		VALUE
REAL ESTATE (continued)
REAL ESTATE MANAGEMENT & DEVELOPMENT (continued)
Marcus & Millichap 1		33,800	$	1,042,730
				2,324,046
Total (Cost $2,498,150)				4,199,297
TOTAL COMMON STOCKS
(Cost $105,824,816)				132,084,372
REPURCHASE AGREEMENT – 2.9%
Fixed Income Clearing Corporation, 0.50% dated 6/28/19, due 7/1/19, maturity value $3,919,163 (collateralized by obligations of various U.S. Government Agencies, 1.75% due 5/31/22, valued at $4,001,440)
(Cost $3,919,000)				3,919,000
COLLATERAL RECEIVED FOR SECURITIES LOANED – 0.9%
Money Market Funds
Federated Government Obligations Fund (7 day yield-2.2655%)
(Cost $1,260,590)				1,260,590
TOTAL INVESTMENTS – 101.4%
(Cost $111,004,406)				137,263,962
LIABILITIES LESS CASH AND OTHER ASSETS – (1.4)%				(1,947,026	)
NET ASSETS – 100.0%			$	135,316,936

Royce Opportunity Fund
Common Stocks – 91.5%
	SHARES		VALUE
COMMUNICATION SERVICES – 1.1%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.5%
Iridium Communications 1,2		106,693	$	2,481,679
Ooma 1		214,078		2,243,538
				4,725,217
INTERACTIVE MEDIA & SERVICES - 0.6%
†Eventbrite Cl. A 1,2		136,500		2,211,300
EverQuote Cl. A 1,2		250,000		3,250,000
				5,461,300
MEDIA - 0.0%
†comScore 1		118,800		613,008
Total (Cost $8,285,031)				10,799,525
CONSUMER DISCRETIONARY – 10.6%
AUTO COMPONENTS - 1.1%
Dana		66,135		1,318,732
Horizon Global 1,2		940,871		3,377,727
Modine Manufacturing 1		398,737		5,705,926
				10,402,385
AUTOMOBILES - 0.3%
Winnebago Industries		80,600		3,115,190
DIVERSIFIED CONSUMER SERVICES - 0.8%
frontdoor 1		173,999		7,577,657
HOTELS, RESTAURANTS & LEISURE - 1.4%
Carrols Restaurant Group 1		566,995		5,119,965
Century Casinos 1		218,140		2,115,958
El Pollo Loco Holdings 1,2		241,406		2,573,388
†Playa Hotels & Resorts 1		129,851		1,001,151
†Scientific Games 1,2		112,600		2,231,732
				13,042,194
HOUSEHOLD DURABLES - 4.7%
Beazer Homes USA 1		597,641		5,743,330
†Century Communities 1,2		124,900		3,319,842
LGI Homes 1,2		116,800		8,343,024
Libbey 1		701,798		1,305,344
M.D.C. Holdings		219,716		7,202,290
M/I Homes 1		201,148		5,740,764
New Home 1,2		235,150		905,328
TRI Pointe Group 1,2		200,206		2,396,466
Tupperware Brands		115,900		2,205,577
VOXX International Cl. A 1		546,954		2,275,329
William Lyon Homes Cl. A 1		256,519		4,676,341
				44,113,635
INTERNET & DIRECT MARKETING RETAIL - 0.5%
Leaf Group 1		137,972		1,022,372
Rubicon Project (The) 1		555,266		3,531,492
				4,553,864
MULTILINE RETAIL - 0.1%
Tuesday Morning 1		346,949		586,344
SPECIALTY RETAIL - 0.9%
Lumber Liquidators Holdings 1,2		317,066		3,662,113
†Party City Holdco 1,2		262,400		1,923,392
RTW Retailwinds 1,2		564,423		959,519
Stage Stores 1		882,334		679,397
Zumiez 1		60,700		1,584,270
				8,808,691
TEXTILES, APPAREL & LUXURY GOODS - 0.8%
Fossil Group 1,2		102,900		1,183,350
Jerash Holdings (US)		61,704		442,418
Unifi 1		236,854		4,303,637

40 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce Opportunity Fund (continued)
	SHARES		VALUE
CONSUMER DISCRETIONARY (continued)
TEXTILES, APPAREL & LUXURY GOODS (continued)
Vince Holding 1		101,496	$	1,415,869
				7,345,274
Total (Cost $97,187,583)				99,545,234
CONSUMER STAPLES – 0.6%
BEVERAGES - 0.1%
†Eastside Distilling 1		67,850		305,325
†Reed’s 1		251,903		952,193
				1,257,518
FOOD & STAPLES RETAILING - 0.1%
United Natural Foods 1		75,154		674,131
FOOD PRODUCTS - 0.4%
Landec Corporation 1		134,110		1,256,611
SunOpta 1		701,727		2,308,682
				3,565,293
Total (Cost $9,966,152)				5,496,942
ENERGY – 7.4%
ENERGY EQUIPMENT & SERVICES - 2.8%
Archrock		286,800		3,040,080
Aspen Aerogels 1		342,019		2,438,595
Independence Contract Drilling 1,2		686,060		1,083,975
KLX Energy Services Holdings 1,2		161,626		3,302,019
Newpark Resources 1		958,668		7,113,317
Patterson-UTI Energy		297,785		3,427,505
Ranger Energy Services Cl. A 1		163,254		1,314,195
U.S. Silica Holdings		361,201		4,619,761
				26,339,447
OIL, GAS & CONSUMABLE FUELS - 4.6%
Ardmore Shipping 1		444,399		3,621,852
Baytex Energy 1		697,000		1,073,380
Bonanza Creek Energy 1		85,500		1,785,240
Dorian LPG 1,2		753,124		6,793,178
GasLog		245,404		3,533,818
GasLog Partners L.P.		168,580		3,578,953
Matador Resources 1		313,783		6,238,006
Navigator Holdings 1		445,184		4,166,922
StealthGas 1		167,340		575,650
Talos Energy 1		200,823		4,829,793
Teekay LNG Partners L.P.		318,800		4,495,080
Whiting Petroleum 1		115,568		2,158,810
				42,850,682
Total (Cost $82,137,894)				69,190,129
FINANCIALS – 7.8%
BANKS - 4.5%
Allegiance Bancshares 1		59,100		1,970,394
CenterState Bank		246,766		5,683,021
First Foundation		193,300		2,597,952
Franklin Financial Network		161,514		4,499,780
Hilltop Holdings		338,599		7,202,001
Independent Bank Group		111,135		6,107,979
Renasant Corporation		14,400		517,536
Seacoast Banking Corporation of Florida 1		125,400		3,190,176
Southern National Bancorp of Virginia		170,190		2,605,609
Texas Capital Bancshares 1		58,300		3,577,871
TriState Capital Holdings 1		107,161		2,286,816
Umpqua Holdings		123,582		2,050,225
				42,289,360
CAPITAL MARKETS - 0.5%
B. Riley Financial		207,017		4,318,375
INSURANCE - 1.2%
HCI Group		77,876		3,151,641
Heritage Insurance Holdings		318,007		4,900,488
MBIA 1		370,500		3,449,355
				11,501,484
THRIFTS & MORTGAGE FINANCE - 1.6%
Axos Financial 1		29,200		795,700
MGIC Investment 1		112,572		1,479,196
NMI Holdings Cl. A 1		21,763		617,852
Radian Group		222,498		5,084,079
Walker & Dunlop		127,628		6,791,086
				14,767,913
Total (Cost $67,794,149)				72,877,132
HEALTH CARE – 9.7%
BIOTECHNOLOGY - 0.9%
AMAG Pharmaceuticals 1		216,000		2,157,840
†CareDx 1,2		15,241		548,524
†Emergent BioSolutions 1		104,531		5,049,893
†Flexion Therapeutics 1,2		46,424		571,015
				8,327,272
HEALTH CARE EQUIPMENT & SUPPLIES - 2.2%
Accuray 1,2		691,002		2,674,178
Alphatec Holdings 1		163,600		742,744
AngioDynamics 1		282,312		5,558,723
†Conformis 1,2		18,920		82,491
†GenMark Diagnostics 1		45,000		292,050
Invacare Corporation		933,616		4,845,467
†RA Medical Systems 1,2		114,300		413,766
RTI Surgical Holdings 1		342,428		1,455,319
†SeaSpine Holdings 1		17,088		226,416
Varex Imaging 1		151,600		4,646,540
				20,937,694
HEALTH CARE PROVIDERS & SERVICES - 4.4%
AAC Holdings 1		750,465		645,400
Acadia Healthcare 1,2		166,579		5,821,936
†Addus HomeCare 1		36,989		2,772,326
BioScrip 1		1,020,345		2,652,897
†BioTelemetry 1		11,100		534,465
Brookdale Senior Living 1		251,509		1,813,380
Community Health Systems 1		978,714		2,613,166
Cross Country Healthcare 1		620,441		5,819,737
†Fulgent Genetics 1		40,961		273,619
Owens & Minor		824,923		2,639,754
R1 RCM 1,2		440,418		5,540,458
RadNet 1		231,900		3,197,901
Select Medical Holdings 1		183,200		2,907,384
Surgery Partners 1,2		539,875		4,394,582
				41,627,005
HEALTH CARE TECHNOLOGY - 1.5%
Allscripts Healthcare Solutions 1		344,628		4,008,024
Castlight Health Cl. B 1		840,597		2,715,128
Evolent Health Cl. A 1,2		320,600		2,548,770
†Tabula Rasa HealthCare 1,2		98,300		4,908,119
				14,180,041
LIFE SCIENCES TOOLS & SERVICES - 0.7%
Cambrex Corporation 1		137,420		6,432,630
Total (Cost $111,243,730)				91,504,642

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 41

Schedules of Investments

Royce Opportunity Fund (continued)
	SHARES		VALUE
INDUSTRIALS – 24.9%
AEROSPACE & DEFENSE - 1.9%
Aerojet Rocketdyne Holdings 1,2		26,154	$	1,170,915
Kratos Defense & Security Solutions 1		197,113		4,511,916
Triumph Group		249,101		5,704,413
Wesco Aircraft Holdings 1		544,420		6,043,062
				17,430,306
AIR FREIGHT & LOGISTICS - 0.4%
Atlas Air Worldwide Holdings 1,2		94,804		4,232,051
AIRLINES - 0.4%
Hawaiian Holdings		81,600		2,238,288
Mesa Air Group 1		126,200		1,153,468
				3,391,756
BUILDING PRODUCTS - 3.8%
American Woodmark 1		69,400		5,872,628
Apogee Enterprises		104,566		4,542,347
Builders FirstSource 1		100,795		1,699,404
Cornerstone Building Brands 1		213,194		1,242,921
Griffon Corporation		345,159		5,840,090
Insteel Industries		174,611		3,635,401
PGT Innovations 1		192,995		3,226,877
Quanex Building Products		275,888		5,211,524
Resideo Technologies 1		211,400		4,633,888
				35,905,080
COMMERCIAL SERVICES & SUPPLIES - 1.1%
Herman Miller		34,033		1,521,275
Interface		164,495		2,521,708
Pitney Bowes		481,700		2,061,676
Team 1		294,486		4,511,526
				10,616,185
CONSTRUCTION & ENGINEERING - 3.8%
Aegion Corporation 1		241,285		4,439,644
Ameresco Cl. A 1		295,176		4,347,942
Arcosa		119,300		4,489,259
Construction Partners Cl. A 1		171,579		2,577,117
Granite Construction		150,074		7,230,565
Great Lakes Dredge & Dock 1		142,916		1,577,793
Northwest Pipe 1		326,600		8,419,748
†Primoris Services		115,900		2,425,787
				35,507,855
ELECTRICAL EQUIPMENT - 1.3%
†Bloom Energy Cl. A 1,2		379,400		4,655,238
†Generac Holdings 1		86,900		6,031,729
†LSI Industries		45,613		166,487
Power Solutions International 1,3		146,143		1,417,587
				12,271,041
MACHINERY - 8.0%
Astec Industries		211,835		6,897,348
Commercial Vehicle Group 1		596,374		4,782,919
FreightCar America 1		405,687		2,381,383
†Gencor Industries 1		26,199		340,587
Hurco Companies		88,997		3,164,733
Hyster-Yale Materials Handling Cl. A		98,413		5,438,302
Lydall 1		118,918		2,402,144
†Manitex International 1		131,300		802,243
Meritor 1		153,108		3,712,869
Milacron Holdings 1,2		404,688		5,584,694
Mueller Industries		123,237		3,607,147
Mueller Water Products		513,072		5,038,367
NN		544,391		5,313,256
Park-Ohio Holdings		46,590		1,518,368
Spartan Motors		462,838		5,072,704
TriMas Corporation 1		216,110		6,692,927
Trinity Industries		142,500		2,956,875
Wabash National		188,300		3,063,641
Westport Fuel Systems 1		2,339,974		6,341,330
				75,111,837
MARINE - 0.4%
Diana Shipping 1		99,652		329,848
Eagle Bulk Shipping 1		316,433		1,658,109
Scorpio Bulkers		321,028		1,476,729
				3,464,686
PROFESSIONAL SERVICES - 0.3%
†GP Strategies 1		51,845		781,823
†Mistras Group 1		110,100		1,582,137
				2,363,960
ROAD & RAIL - 0.6%
Celadon Group 1,3		482,331		569,151
Hertz Global Holdings 1,2		344,565		5,499,257
				6,068,408
TRADING COMPANIES & DISTRIBUTORS - 2.9%
Air Lease Cl. A		208,538		8,620,961
CAI International 1,2		145,038		3,599,843
†General Finance 1		49,925		417,872
Herc Holdings 1		207,598		9,514,216
Textainer Group Holdings 1		124,330		1,253,247
Univar 1,2		190,252		4,193,154
				27,599,293
Total (Cost $207,181,809)				233,962,458
INFORMATION TECHNOLOGY – 20.0%
COMMUNICATIONS EQUIPMENT - 3.0%
Applied Optoelectronics 1,2		213,300		2,192,724
Aviat Networks 1		57,099		782,256
Ciena Corporation 1		120,373		4,950,941
Comtech Telecommunications		309,660		8,704,543
Digi International 1		156,300		1,981,884
EMCORE Corporation 1		157,316		517,570
Finisar Corporation 1		170,607		3,901,782
Infinera Corporation 1,2		408,300		1,188,153
PCTEL		77,291		342,399
Ribbon Communications 1,2		686,885		3,358,868
				27,921,120
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 3.0%
Fabrinet 1		44,505		2,210,563
Frequency Electronics 1		273,194		3,111,680
Identiv 1		480,837		2,461,885
II-VI 1		150,168		5,490,142
KEMET Corporation		369,505		6,950,389
Perceptron 1		226,146		1,006,350
SigmaTron International 1		9,774		24,924
TTM Technologies 1		188,657		1,924,301
Vishay Intertechnology		271,524		4,485,577
				27,665,811
IT SERVICES - 1.4%
†CoreLogic 1		113,700		4,756,071
Limelight Networks 1		546,457		1,475,434
Perspecta		302,400		7,079,184
				13,310,689

42 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce Opportunity Fund (continued)
	SHARES		VALUE
INFORMATION TECHNOLOGY (continued)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 8.0%
Advanced Energy Industries 1		50,000	$	2,813,500
Alpha & Omega Semiconductor 1,2		816,892		7,629,771
Amkor Technology 1		286,400		2,136,544
Amtech Systems 1		369,775		2,033,762
AXT 1		652,514		2,583,955
Brooks Automation		97,920		3,794,400
Cohu		172,176		2,656,676
Cypress Semiconductor		295,961		6,582,173
FormFactor 1		415,513		6,511,089
Ichor Holdings 1		200,094		4,730,222
Kulicke & Soffa Industries		274,965		6,200,461
MACOM Technology Solutions Holdings 1,2		437,285		6,616,122
Nanometrics 1		126,264		4,382,623
NeoPhotonics Corporation 1		80,461		336,327
Rudolph Technologies 1		233,555		6,453,125
Ultra Clean Holdings 1		366,727		5,104,840
Veeco Instruments 1,2		373,687		4,566,455
				75,132,045
SOFTWARE - 2.2%
A10 Networks 1		654,626		4,464,550
†Asure Software 1		317,349		2,611,782
Avaya Holdings 1,2		401,754		4,784,890
†eGain Corporation 1		15,080		122,751
SecureWorks Corporation Cl. A 1,2		260,428		3,461,088
Telaria 1		750,867		5,646,520
				21,091,581
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 2.4%
Avid Technology 1		697,491		6,361,118
Cray 1		68,018		2,368,387
Intevac 1		618,230		2,992,233
NCR Corporation 1		146,600		4,559,260
Stratasys 1,2		144,726		4,250,603
3D Systems 1		217,662		1,980,724
				22,512,325
Total (Cost $152,830,736)				187,633,571
MATERIALS – 8.3%
CHEMICALS - 3.2%
†Cabot Corporation		68,100		3,249,051
Ferro Corporation 1		298,866		4,722,083
Huntsman Corporation		235,600		4,815,664
Intrepid Potash 1		996,400		3,347,904
Kraton Corporation 1		274,545		8,530,113	��
LSB Industries 1		123,671		482,317
Olin Corporation		176,500		3,867,115
†Trecora Resources 1		136,740		1,308,602
				30,322,849
CONSTRUCTION MATERIALS - 0.5%
Forterra 1,2		945,037		4,696,834
METALS & MINING - 4.4%
AK Steel Holding Corporation 1		226,885		537,717
Allegheny Technologies 1		119,014		2,999,153
Carpenter Technology		99,912		4,793,778
Century Aluminum 1		434,160		3,000,045
Cleveland-Cliffs		477,752		5,097,614
Commercial Metals		310,509		5,542,586
Ferroglobe 1		853,000		1,450,100
Haynes International		206,116		6,556,550
Noranda Aluminum Holding Corporation 1,3		488,157		5,614
Synalloy Corporation		346,522		5,412,674
TimkenSteel Corporation 1		294,735		2,396,195
Universal Stainless & Alloy Products 1		227,941		3,647,056
				41,439,082
PAPER & FOREST PRODUCTS - 0.2%
Glatfelter (P. H.)		84,300		1,422,984
Total (Cost $71,305,922)				77,881,749
REAL ESTATE – 0.8%
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.3%
†Armada Hoffler Properties		76,563		1,267,118
CatchMark Timber Trust Cl. A		158,700		1,658,415
				2,925,533
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.5%
†Realogy Holdings		291,200		2,108,288
Tejon Ranch 1		167,106		2,772,288
				4,880,576
Total (Cost $9,300,281)				7,806,109
UTILITIES – 0.3%
WATER UTILITIES - 0.3%
Pure Cycle 1		232,499		2,464,489
Total (Cost $971,846)				2,464,489
TOTAL COMMON STOCKS
(Cost $818,205,133)				859,161,980
REPURCHASE AGREEMENT – 8.5%
Fixed Income Clearing Corporation, 0.50% dated 6/28/19, due 7/1/19, maturity value $79,842,327 (collateralized by obligations of various U.S. Government Agencies, 1.75% due 5/31/22, valued at $81,436,064)
(Cost $79,839,000)				79,839,000
COLLATERAL RECEIVED FOR SECURITIES LOANED – 3.0%
Money Market Funds
Federated Government Obligations Fund (7 day yield-2.2655%)
(Cost $28,337,338)				28,337,338
TOTAL INVESTMENTS – 103.0%
(Cost $926,381,471)				967,338,318
LIABILITIES LESS CASH AND OTHER ASSETS – (3.0)%				(28,586,304	)
NET ASSETS – 100.0%			$	938,752,014

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 43

Schedules of Investments

Royce Pennsylvania Mutual Fund
Common Stocks – 95.3%
	SHARES		VALUE
COMMUNICATION SERVICES – 1.4%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.2%
†Bandwidth Cl. A 1		53,400	$	4,006,068
MEDIA - 1.2%
Liberty Latin America Cl. C 1		282,593		4,857,774
†Media General (Rights) 1,4		102,272		0
Meredith Corporation		213,891		11,776,838
†Nexstar Media Group Cl. A		26,260		2,652,260
Saga Communications Cl. A		116,258		3,631,900
				22,918,772
Total (Cost $26,633,204)				26,924,840
CONSUMER DISCRETIONARY – 7.5%
AUTO COMPONENTS - 2.2%
Dorman Products 1		123,893		10,796,036
Gentex Corporation		270,439		6,655,504
LCI Industries		129,535		11,658,150
Standard Motor Products		129,987		5,893,610
Stoneridge 1		162,263		5,119,398
†Tower International		176,442		3,440,619
				43,563,317
AUTOMOBILES - 0.3%
Winnebago Industries		158,610		6,130,276
DISTRIBUTORS - 0.4%
LKQ Corporation 1		132,000		3,512,520
Weyco Group		161,705		4,319,141
				7,831,661
HOTELS, RESTAURANTS & LEISURE - 1.0%
†Aramark		65,750		2,370,945
†Century Casinos 1		338,300		3,281,510
Hilton Grand Vacations 1,2		266,562		8,482,003
Lindblad Expeditions Holdings 1		367,713		6,600,448
				20,734,906
HOUSEHOLD DURABLES - 0.4%
Ethan Allen Interiors		14,000		294,840
La-Z-Boy		103,321		3,167,822
†LGI Homes 1,2		51,500		3,678,645
				7,141,307
INTERNET & DIRECT MARKETING RETAIL - 0.4%
Etsy 1		80,389		4,933,473
zooplus 1		15,983		2,177,278
				7,110,751
LEISURE PRODUCTS - 0.2%
Johnson Outdoors Cl. A		3,600		268,452
MasterCraft Boat Holdings 1		193,114		3,783,103
				4,051,555
SPECIALTY RETAIL - 2.2%
American Eagle Outfitters		196,313		3,317,690
America’s Car-Mart 1		95,536		8,223,739
†Asbury Automotive Group 1		50,000		4,217,000
Caleres		179,692		3,579,464
CarMax 1		70,400		6,112,832
Children’s Place		26,878		2,563,624
Designer Brands Cl. A		179,394		3,438,983
Monro		73,379		6,259,229
Shoe Carnival		218,806		6,039,045
				43,751,606
TEXTILES, APPAREL & LUXURY GOODS - 0.4%
G-III Apparel Group 1		29,340		863,183
Movado Group		15,000		405,000
Steven Madden		46,506		1,578,879
Wolverine World Wide		159,145		4,382,853
				7,229,915
Total (Cost $102,387,941)				147,545,294
CONSUMER STAPLES – 1.2%
FOOD PRODUCTS - 0.6%
Cal-Maine Foods		51,014		2,128,304
Industrias Bachoco ADR Cl. B		9,000		456,030
John B. Sanfilippo & Son		20,126		1,603,841
Nomad Foods 1		171,173		3,656,255
Seneca Foods Cl. A 1		105,072		2,924,154
Tootsie Roll Industries		14,099		520,676
				11,289,260
PERSONAL PRODUCTS - 0.6%
Inter Parfums		186,442		12,396,529
Total (Cost $11,090,289)				23,685,789
ENERGY – 3.9%
ENERGY EQUIPMENT & SERVICES - 3.6%
†Core Laboratories		25,000		1,307,000
Era Group 1		547,711		4,567,910
Helmerich & Payne		101,880		5,157,166
Oil States International 1		9,800		179,340
Pason Systems		1,098,349		15,918,952
RPC		260,074		1,875,133
SEACOR Holdings 1		502,939		23,894,632
SEACOR Marine Holdings 1		481,549		7,203,973
TGS-NOPEC Geophysical		381,270		10,691,087
				70,795,193
OIL, GAS & CONSUMABLE FUELS - 0.3%
†Alliance Resource Partners L.P.		178,000		3,022,440
†Brigham Minerals Cl. A 1,2		100,000		2,146,000
				5,168,440
Total (Cost $60,122,594)				75,963,633
FINANCIALS – 14.9%
BANKS - 4.5%
Bar Harbor Bankshares		48,324		1,284,935
BOK Financial		98,634		7,444,894
Camden National		125,182		5,742,098
City Holding Company		46,054		3,512,078
CNB Financial		194,335		5,488,020
Financial Institutions		101,588		2,961,290
First Citizens BancShares Cl. A		47,277		21,287,415
MidWestOne Financial Group		96,140		2,688,074
National Bankshares		119,455		4,650,383
Northrim BanCorp		94,983		3,387,094
Popular		205,102		11,124,733
TriState Capital Holdings 1		99,069		2,114,133
Unity Bancorp		61,075		1,386,403
Webster Financial		321,555		15,360,682
				88,432,232
CAPITAL MARKETS - 5.4%
Ares Management Cl. A		781,781		20,459,209
Artisan Partners Asset Management Cl. A		117,533		3,234,508
B. Riley Financial		70,017		1,460,555
Diamond Hill Investment Group		47,318		6,705,907
Houlihan Lokey Cl. A		279,619		12,451,434
Lazard Cl. A		176,685		6,076,197

44 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce Pennsylvania Mutual Fund (continued)
	SHARES		VALUE
FINANCIALS (continued)
CAPITAL MARKETS (continued)
Moelis & Company Cl. A		132,970	$	4,647,301
Morningstar		92,494		13,378,332
Oaktree Capital Group LLC Cl. A		32,700		1,619,958
Pzena Investment Management Cl. A		83,089		713,735
SEI Investments		196,176		11,005,474
Sprott		1,716,948		4,418,399
†Tradeweb Markets Cl. A		134,500		5,892,445
Virtu Financial Cl. A		653,654		14,236,584
				106,300,038
INSURANCE - 3.1%
Alleghany Corporation 1		8,820		6,007,390
Berkley (W.R.)		30,465		2,008,558
eHealth 1,2		51,800		4,459,980
E-L Financial		26,318		14,972,250
†FBL Financial Group Cl. A		1,400		89,320
James River Group Holdings		32,536		1,525,938
Kingstone Companies		209,656		1,813,524
MBIA 1		692,387		6,446,123
ProAssurance Corporation		290,713		10,497,647
RLI Corp.		69,108		5,923,247
Trupanion 1,2		154,792		5,592,635
				59,336,612
INVESTMENT COMPANIES - 0.1%
Social Capital Hedosophia Holdings (Units) 1		177,515		1,895,860
THRIFTS & MORTGAGE FINANCE - 1.8%
Axos Financial 1,2		167,208		4,556,418
Genworth MI Canada		488,229		15,449,742
Southern Missouri Bancorp		41,188		1,434,578
Timberland Bancorp		96,733		2,890,382
TrustCo Bank Corp. NY		764,730		6,056,662
WSFS Financial		120,855		4,991,311
				35,379,093
Total (Cost $228,363,705)				291,343,835
HEALTH CARE – 7.1%
BIOTECHNOLOGY - 0.2%
Eagle Pharmaceuticals 1,2		7,400		412,032
†Pfenex 1		19,700		132,778
Progenics Pharmaceuticals 1		230,365		1,421,352
Zealand Pharma 1		84,222		1,830,927
				3,797,089
HEALTH CARE EQUIPMENT & SUPPLIES - 2.8%
AtriCure 1		165,859		4,949,232
Atrion Corporation		8,486		7,236,352
†BioLife Solutions 1		186,655		3,163,802
Cardiovascular Systems 1		77,117		3,310,633
CryoLife 1		198,217		5,932,635
Hill-Rom Holdings		45,811		4,792,747
Lantheus Holdings 1		122,532		3,467,656
Merit Medical Systems 1		203,088		12,095,921
Mesa Laboratories		42,404		10,360,993
				55,309,971
HEALTH CARE PROVIDERS & SERVICES - 1.9%
AMN Healthcare Services 1,2		89,566		4,858,956
Encompass Health		121,685		7,709,962
Ensign Group (The)		29,764		1,694,167
HealthEquity 1		42,628		2,787,871
National Research		126,613		7,291,643
R1 RCM 1		40,000		503,200
Tivity Health 1,2		77,826		1,279,459
U.S. Physical Therapy		95,172		11,665,232
				37,790,490
HEALTH CARE TECHNOLOGY - 0.4%
Medidata Solutions 1		48,070		4,350,816
†Simulations Plus		16,826		480,550
†Tabula Rasa HealthCare 1,2		50,000		2,496,500
				7,327,866
LIFE SCIENCES TOOLS & SERVICES - 1.8%
Bio-Rad Laboratories Cl. A 1		36,579		11,434,230
Bio-Techne		66,391		13,841,859
ICON 1		31,848		4,903,636
NeoGenomics 1		62,403		1,369,122
Quanterix Corporation 1,2		130,130		4,397,093
				35,945,940
Total (Cost $68,827,199)				140,171,356
INDUSTRIALS – 27.4%
AEROSPACE & DEFENSE - 2.8%
HEICO Corporation		245,668		32,872,835
HEICO Corporation Cl. A		138,234		14,289,249
Hexcel Corporation		40,540		3,278,875
Magellan Aerospace		150,171		1,869,182
Teledyne Technologies 1		6,600		1,807,542
				54,117,683
AIR FREIGHT & LOGISTICS - 0.7%
Forward Air		157,115		9,293,352
Hub Group Cl. A 1		108,475		4,553,781
				13,847,133
AIRLINES - 0.6%
Allegiant Travel		31,895		4,576,932
Hawaiian Holdings		60,700		1,665,001
Spirit Airlines 1,2		97,830		4,669,426
				10,911,359
BUILDING PRODUCTS - 1.3%
Apogee Enterprises		165,037		7,169,207
Gibraltar Industries 1		166,576		6,723,008
Patrick Industries 1		92,300		4,540,237
Simpson Manufacturing		115,492		7,675,598
				26,108,050
COMMERCIAL SERVICES & SUPPLIES - 1.9%
Copart 1		37,600		2,810,224
Healthcare Services Group		164,656		4,992,370
Heritage-Crystal Clean 1		155,079		4,080,128
Kimball International Cl. B		440,057		7,670,194
Mobile Mini		83,234		2,532,811
PICO Holdings 1		326,703		3,796,289
Ritchie Bros. Auctioneers		39,233		1,303,320
Steelcase Cl. A		16,316		279,004
Team 1		60,710		930,077
UniFirst Corporation		44,988		8,483,387
				36,877,804
CONSTRUCTION & ENGINEERING - 1.5%
Arcosa		398,038		14,978,170
Comfort Systems USA		24,200		1,233,958
†Construction Partners Cl. A 1,2		53,438		802,639
Sterling Construction 1		9,014		120,968
Valmont Industries		103,145		13,079,817
				30,215,552

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 45

Schedules of Investments

Royce Pennsylvania Mutual Fund (continued)
	SHARES		VALUE
INDUSTRIALS (continued)
ELECTRICAL EQUIPMENT - 1.0%
Encore Wire		80,517	$	4,716,686
EnerSys		700		47,950
Hubbell Incorporated		12,600		1,643,040
Preformed Line Products		219,278		12,174,314
Sensata Technologies Holding 1,2		16,000		784,000
				19,365,990
INDUSTRIAL CONGLOMERATES - 1.2%
Carlisle Companies		36,500		5,124,965
Raven Industries		520,810		18,686,663
				23,811,628
MACHINERY - 9.5%
Alamo Group		15,365		1,535,424
†Allison Transmission Holdings		9,000		417,150
CIRCOR International 1		144,635		6,653,210
Colfax Corporation 1,2		411,864		11,544,548
Franklin Electric		218,223		10,365,592
Graco		181,933		9,129,398
Graham Corporation		44,465		898,638
Greenbrier Companies (The)		900		27,360
Helios Technologies		570,464		26,475,234
John Bean Technologies		126,681		15,344,870
Kadant		124,366		11,293,676
Kennametal		118,740		4,392,193
Kornit Digital 1,2		44,926		1,422,357
Lincoln Electric Holdings		162,250		13,356,420
Lindsay Corporation		119,403		9,816,121
Meritor 1		772,748		18,739,139
Miller Industries		218,218		6,710,203
Nordson Corporation		67,360		9,518,642
Proto Labs 1		13,000		1,508,260
RBC Bearings 1		57,718		9,627,940
Tennant Company		224,274		13,725,569
Wabash National		209,020		3,400,755
				185,902,699
MARINE - 1.4%
Clarkson		405,000		12,909,670
Eagle Bulk Shipping 1		379,836		1,990,340
Kirby Corporation 1		166,433		13,148,207
				28,048,217
PROFESSIONAL SERVICES - 1.7%
Exponent		184,649		10,809,353
GP Strategies 1		80,727		1,217,363
Heidrick & Struggles International		261,069		7,824,238
Kforce		76,476		2,683,543
Korn Ferry		107,843		4,321,269
ManpowerGroup		15,800		1,526,280
Resources Connection		191,040		3,058,550
TrueBlue 1		70,534		1,555,980
				32,996,576
ROAD & RAIL - 2.1%
ArcBest		182,612		5,133,223
Landstar System		151,427		16,352,602
Saia 1		95,905		6,202,176
Universal Logistics Holdings		432,495		9,718,163
Werner Enterprises		147,896		4,596,608
				42,002,772
TRADING COMPANIES & DISTRIBUTORS - 1.7%
Air Lease Cl. A		392,767		16,236,988
Applied Industrial Technologies		121,716		7,489,185
†BMC Stock Holdings 1		129,041		2,735,669
†Diploma		13,585		264,305
Richelieu Hardware		280,741		4,731,361
Watsco		9,900		1,618,947
				33,076,455
Total (Cost $315,206,917)				537,281,918
INFORMATION TECHNOLOGY – 20.6%
COMMUNICATIONS EQUIPMENT - 0.2%
ADTRAN		61,782		942,176
Digi International 1		288,675		3,660,399
NetScout Systems 1,2		12,000		304,680
				4,907,255
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 9.2%
Badger Meter		245,792		14,671,324
Benchmark Electronics		62,542		1,571,055
Cognex Corporation		157,547		7,559,105
Coherent 1		117,069		15,964,699
Dolby Laboratories Cl. A		95,028		6,138,809
Fabrinet 1		175,887		8,736,307
FARO Technologies 1		293,203		15,416,614
FLIR Systems		677,961		36,677,690
HollySys Automation Technologies		71,900		1,366,100
Insight Enterprises 1		189,378		11,021,800
IPG Photonics 1		42,449		6,547,758
Kimball Electronics 1		187,454		3,044,253
Littelfuse		13,000		2,299,830
Methode Electronics		10,100		288,557
MTS Systems		43,935		2,571,516
National Instruments		306,234		12,858,766
nLIGHT 1,2		536,192		10,294,886
PC Connection		207,190		7,247,506
Sanmina Corporation 1		188,213		5,699,090
Vishay Intertechnology		362,545		5,989,243
Vishay Precision Group 1		99,879		4,058,084
				180,022,992
IT SERVICES - 0.8%
†Computer Services 3		600		22,140
KBR		470,489		11,733,996
†Switch Cl. A		246,000		3,220,140
†WEX 1		4,215		877,141
				15,853,417
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.4%
Advanced Energy Industries 1		187,070		10,526,429
†Axcelis Technologies 1		23,800		358,190
Brooks Automation		394,652		15,292,765
Cabot Microelectronics		150,027		16,514,972
Cirrus Logic 1		305,910		13,368,267
Cohu		258,282		3,985,291
Diodes 1		196,302		7,139,504
Entegris		292,999		10,934,723
FormFactor 1		184,111		2,885,020
Kulicke & Soffa Industries		424,035		9,561,989
MKS Instruments		272,357		21,213,887
Nanometrics 1		75,608		2,624,354
Nova Measuring Instruments 1,2		80,704		2,065,215
Photronics 1		168,861		1,384,660
Silicon Motion Technology ADR		145,939		6,476,773

46 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce Pennsylvania Mutual Fund (continued)
	SHARES		VALUE
INFORMATION TECHNOLOGY (continued)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (continued)
Ultra Clean Holdings 1		101,433	$	1,411,947
				125,743,986
SOFTWARE - 4.0%
ACI Worldwide 1		349,413		11,998,842
Altair Engineering Cl. A 1,2		109,654		4,428,925
Benefitfocus 1,2		63,000		1,710,450
Descartes Systems Group (The) 1		170,362		6,294,876
Everbridge 1		46,744		4,179,849
Fair Isaac 1		40,164		12,612,299
Five9 1,2		79,616		4,083,505
j2 Global 1		80,063		7,116,800
Manhattan Associates 1		88,430		6,130,852
QAD Cl. A		46,077		1,852,756
Qualys 1		44,664		3,889,341
Upland Software 1,2		170,718		7,772,791
Varonis Systems 1		44,227		2,739,420
†Zuora Cl. A 1,2		248,000		3,799,360
				78,610,066
Total (Cost $262,288,626)				405,137,716
MATERIALS – 8.4%
CHEMICALS - 4.2%
Balchem Corporation		136,488		13,644,705
Element Solutions 1		858,846		8,880,468
Ingevity Corporation 1		70,197		7,382,619
Innospec		131,901		12,034,647
Minerals Technologies		220,664		11,807,731
Quaker Chemical		119,990		24,343,571
Sensient Technologies		31,342		2,303,010
Westlake Chemical		38,600		2,681,156
				83,077,907
CONSTRUCTION MATERIALS - 0.1%
Imerys		40,000		2,120,465
CONTAINERS & PACKAGING - 0.7%
AptarGroup		94,539		11,754,979
†Packaging Corporation of America		16,100		1,534,652
				13,289,631
METALS & MINING - 2.1%
Alamos Gold Cl. A		2,135,448		12,882,318
Franco-Nevada		93,216		7,912,174
Haynes International		37,643		1,197,424
IAMGOLD Corporation 1		800,000		2,704,000
†Mayville Engineering 1,2		82,639		1,140,418
Pretium Resources 1		89,701		896,633
Reliance Steel & Aluminum		141,877		13,424,402
				40,157,369
PAPER & FOREST PRODUCTS - 1.3%
Stella-Jones		731,301		26,391,726
Total (Cost $87,572,648)				165,037,098
REAL ESTATE – 2.8%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 2.8%
FRP Holdings 1		256,203		14,288,441
Jones Lang LaSalle		16,600		2,335,454
Kennedy-Wilson Holdings		693,000		14,255,010
Marcus & Millichap 1		444,470		13,711,899
St. Joe Company (The) 1		247,725		4,280,688
Tejon Ranch 1		409,408		6,792,079
Total (Cost $46,083,622)				55,663,571
UTILITIES – 0.1%
GAS UTILITIES - 0.1%
UGI Corporation		34,300		1,831,963
Total (Cost $1,012,504)				1,831,963
TOTAL COMMON STOCKS
(Cost $1,209,589,249)				1,870,587,013
REPURCHASE AGREEMENT – 4.9%
Fixed Income Clearing Corporation, 0.50% dated 6/28/19, due 7/1/19, maturity value $95,121,963 (collateralized by obligations of various U.S. Government Agencies, 0.125% due 4/15/22, valued at $97,022,494)
(Cost $95,118,000)				95,118,000
COLLATERAL RECEIVED FOR SECURITIES LOANED – 0.3%
Money Market Funds
Federated Government Obligations Fund (7 day yield-2.2655%)
(Cost $6,580,014)				6,580,014
TOTAL INVESTMENTS – 100.5%
(Cost $1,311,287,263)				1,972,285,027
LIABILITIES LESS CASH AND OTHER ASSETS – (0.5)%				(9,447,297	)
NET ASSETS – 100.0%			$	1,962,837,730

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 47

Schedules of Investments

Royce Premier Fund
Common Stocks – 91.3%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 5.8%
AUTO COMPONENTS - 2.7%
Dorman Products 1	344,003	$	29,976,421
LCI Industries	227,740		20,496,600
			50,473,021
DISTRIBUTORS - 1.3%
Pool Corporation	122,400		23,378,400
DIVERSIFIED CONSUMER SERVICES - 0.3%
Sotheby’s 1	100,000		5,813,000
TEXTILES, APPAREL & LUXURY GOODS - 1.5%
Columbia Sportswear	126,600		12,680,256
Wolverine World Wide	586,100		16,141,194
			28,821,450
Total (Cost $51,480,794)			108,485,871
CONSUMER STAPLES – 1.1%
FOOD PRODUCTS - 1.1%
Cal-Maine Foods	511,100		21,323,092
Total (Cost $14,752,280)			21,323,092
ENERGY – 4.2%
ENERGY EQUIPMENT & SERVICES - 4.2%
Pason Systems	2,695,145		39,062,160
SEACOR Holdings 1	603,935		28,692,952
TGS-NOPEC Geophysical	350,000		9,814,254
Total (Cost $70,581,141)			77,569,366
FINANCIALS – 14.5%
CAPITAL MARKETS - 9.7%
Ares Management Cl. A	1,886,400		49,367,088
Ashmore Group	7,820,400		50,601,052
Lazard Cl. A	537,316		18,478,297
Morningstar	330,647		47,824,782
TMX Group	203,694		14,170,153
			180,441,372
INSURANCE - 3.0%
Alleghany Corporation 1	53,143		36,196,229
ProAssurance Corporation	547,865		19,783,405
			55,979,634
THRIFTS & MORTGAGE FINANCE - 1.8%
Genworth MI Canada	1,092,965		34,586,285
Total (Cost $148,167,916)			271,007,291
HEALTH CARE – 2.6%
HEALTH CARE TECHNOLOGY - 1.1%
Medidata Solutions 1	217,346		19,671,986
LIFE SCIENCES TOOLS & SERVICES - 1.5%
Bio-Techne	138,500		28,875,865
Total (Cost $27,562,227)			48,547,851
INDUSTRIALS – 34.4%
AIR FREIGHT & LOGISTICS - 1.7%
Forward Air	538,549		31,855,173
BUILDING PRODUCTS - 1.7%
Simpson Manufacturing	479,400		31,860,924
COMMERCIAL SERVICES & SUPPLIES - 1.6%
Ritchie Bros. Auctioneers	879,509		29,217,289
CONSTRUCTION & ENGINEERING - 1.6%
Valmont Industries	242,800		30,789,468
INDUSTRIAL CONGLOMERATES - 0.9%
†Raven Industries	456,100		16,364,868
MACHINERY - 18.1%
CIRCOR International 1	499,287		22,967,202
†Colfax Corporation 1,2	1,243,500		34,855,305
Franklin Electric	261,983		12,444,192
Helios Technologies	757,372		35,149,635
John Bean Technologies	445,623		53,978,314
Kadant	157,444		14,297,490
Lincoln Electric Holdings	643,117		52,941,391
Lindsay Corporation	419,570		34,492,850
RBC Bearings 1	145,900		24,337,579
Woodward	450,786		51,010,944
			336,474,902
MARINE - 3.8%
Clarkson	510,106		16,260,000
Kirby Corporation 1	684,400		54,067,600
			70,327,600
ROAD & RAIL - 1.7%
Landstar System	287,700		31,068,723
TRADING COMPANIES & DISTRIBUTORS - 3.3%
Air Lease Cl. A	1,504,800		62,208,432
Total (Cost $362,202,819)			640,167,379
INFORMATION TECHNOLOGY – 18.7%
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 7.9%
Anixter International 1	231,882		13,845,674
Cognex Corporation	572,394		27,463,464
Coherent 1	271,145		36,976,044
IPG Photonics 1	114,024		17,588,202
National Instruments	959,700		40,297,803
†nLIGHT 1	615,844		11,824,205
			147,995,392
IT SERVICES - 1.0%
Jack Henry & Associates	140,763		18,850,981
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 4.6%
Cabot Microelectronics	406,583		44,756,657
MKS Instruments	513,769		40,017,467
			84,774,124
SOFTWARE - 5.2%
Fair Isaac 1	162,711		51,094,508
Manhattan Associates 1	663,400		45,993,522
			97,088,030
Total (Cost $155,348,534)			348,708,527
MATERIALS – 8.8%
CHEMICALS - 4.5%
†Innospec	177,030		16,152,217
Minerals Technologies	481,785		25,780,315
Quaker Chemical	207,579		42,113,628
			84,046,160
METALS & MINING - 2.0%
Reliance Steel & Aluminum	401,528		37,992,580
PAPER & FOREST PRODUCTS - 2.3%
Stella-Jones	1,163,000		41,971,196
Total (Cost $116,477,848)			164,009,936

48 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce Premier Fund (continued)
	SHARES		VALUE
REAL ESTATE – 1.2%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.2%
Kennedy-Wilson Holdings		1,057,100	$	21,744,547
Total (Cost $19,986,735)				21,744,547
TOTAL COMMON STOCKS
(Cost $966,560,294)				1,701,563,860
REPURCHASE AGREEMENT – 8.5%
Fixed Income Clearing Corporation, 0.50% dated 6/28/19, due 7/1/19, maturity value $158,700,612 (collateralized by obligations of various U.S. Government Agencies, 1.75%- 1.875% due 4/30/22-5/31/22, valued at $161,870,673)
(Cost $158,694,000)				158,694,000
TOTAL INVESTMENTS – 99.8%
(Cost $1,125,254,294)				1,860,257,860
CASH AND OTHER ASSETS LESS LIABILITIES – 0.2%				3,458,102
NET ASSETS – 100.0%			$	1,863,715,962

Royce Small-Cap Value Fund
Common Stocks – 93.2%
	SHARES		VALUE
COMMUNICATION SERVICES – 1.2%
MEDIA - 1.2%
Saga Communications Cl. A		66,959	$	2,091,799
Total (Cost $2,987,385)				2,091,799
CONSUMER DISCRETIONARY – 14.8%
AUTO COMPONENTS - 2.8%
Gentex Corporation		57,927		1,425,583
Stoneridge 1		26,798		845,477
†Tower International		141,108		2,751,606
				5,022,666
HOTELS, RESTAURANTS & LEISURE - 2.6%
Cheesecake Factory		19,200		839,424
Hilton Grand Vacations 1		121,423		3,863,680
				4,703,104
HOUSEHOLD DURABLES - 0.5%
La-Z-Boy		29,498		904,409
INTERNET & DIRECT MARKETING RETAIL - 0.2%
†Points International 1		22,700		280,345
SPECIALTY RETAIL - 6.4%
American Eagle Outfitters		113,645		1,920,600
Caleres		90,091		1,794,613
Designer Brands Cl. A		204,240		3,915,281
Shoe Carnival		138,920		3,834,192
				11,464,686
TEXTILES, APPAREL & LUXURY GOODS - 2.3%
G-III Apparel Group 1		111,000		3,265,620
Steven Madden		26,049		884,363
				4,149,983
Total (Cost $28,219,105)				26,525,193
CONSUMER STAPLES – 1.5%
FOOD & STAPLES RETAILING - 1.5%
Village Super Market Cl. A		100,115		2,654,049
Total (Cost $2,858,090)				2,654,049
ENERGY – 2.6%
ENERGY EQUIPMENT & SERVICES - 1.4%
Helmerich & Payne		48,584		2,459,322
OIL, GAS & CONSUMABLE FUELS - 1.2%
†Alliance Resource Partners L.P.		131,792		2,237,828
Total (Cost $3,557,496)				4,697,150
FINANCIALS – 25.0%
BANKS - 12.1%
Ames National		98,189		2,660,922
Bar Harbor Bankshares		41,471		1,102,714
Camden National		78,721		3,610,932
City Holding Company		23,242		1,772,435
CNB Financial		97,401		2,750,604
Codorus Valley Bancorp		35,165		808,795
Financial Institutions		44,425		1,294,989
Landmark Bancorp		24,629		589,865
MidWestOne Financial Group		31,993		894,524
National Bankshares		64,363		2,505,652
Northrim BanCorp		54,688		1,950,174
Unity Bancorp		72,512		1,646,022
				21,587,628
CAPITAL MARKETS - 2.9%
Houlihan Lokey Cl. A		19,036		847,673
Moelis & Company Cl. A		74,495		2,603,600

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 49

Schedules of Investments

Royce Small-Cap Value Fund (continued)
	SHARES		VALUE
FINANCIALS (continued)
CAPITAL MARKETS (continued)
Pzena Investment Management Cl. A		206,553	$	1,774,291
				5,225,564
INSURANCE - 2.6%
James River Group Holdings		18,622		873,372
Kingstone Companies		136,623		1,181,789
Reinsurance Group of America		17,036		2,658,127
				4,713,288
THRIFTS & MORTGAGE FINANCE - 7.4%
Genworth MI Canada		109,389		3,461,555
Southern Missouri Bancorp		46,154		1,607,544
Timberland Bancorp		51,174		1,529,079
TrustCo Bank Corp. NY		397,150		3,145,428
WSFS Financial		85,226		3,519,834
				13,263,440
Total (Cost $35,982,318)				44,789,920
HEALTH CARE – 1.0%
HEALTH CARE PROVIDERS & SERVICES - 1.0%
AMN Healthcare Services 1		14,817		803,822
Ensign Group (The)		19,165		1,090,872
Total (Cost $1,014,421)				1,894,694
INDUSTRIALS – 30.2%
AEROSPACE & DEFENSE - 0.9%
Magellan Aerospace		127,700		1,589,485
AIRLINES - 5.3%
Allegiant Travel		27,080		3,885,980
Hawaiian Holdings		103,714		2,844,875
Spirit Airlines 1,2		58,198		2,777,791
				9,508,646
BUILDING PRODUCTS - 1.1%
Apogee Enterprises		44,487		1,932,515
COMMERCIAL SERVICES & SUPPLIES - 2.6%
Herman Miller		46,399		2,074,035
Kimball International Cl. B		149,574		2,607,075
				4,681,110
CONSTRUCTION & ENGINEERING - 0.5%
Comfort Systems USA		17,138		873,867
ELECTRICAL EQUIPMENT - 1.0%
EnerSys		26,920		1,844,020
MACHINERY - 7.4%
Alamo Group		8,663		865,694
†Commercial Vehicle Group 1		316,315		2,536,846
Federal Signal		32,810		877,667
Meritor 1		182,168		4,417,574
Miller Industries		144,301		4,437,256
Wabash National		3,626		58,995
				13,194,032
PROFESSIONAL SERVICES - 5.7%
Heidrick & Struggles International		85,545		2,563,784
Kforce		42,541		1,492,764
Korn Ferry		63,293		2,536,150
Resources Connection		106,885		1,711,229
Robert Half International		18,416		1,049,896
TrueBlue 1		39,500		871,370
				10,225,193
ROAD & RAIL - 4.7%
ArcBest		99,756		2,804,141
Old Dominion Freight Line		5,964		890,187
Saia 1		28,041		1,813,412
Werner Enterprises		91,154		2,833,066
				8,340,806
TRADING COMPANIES & DISTRIBUTORS - 1.0%
†BMC Stock Holdings 1		86,207		1,827,588
Total (Cost $46,680,385)				54,017,262
INFORMATION TECHNOLOGY – 15.4%
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 10.1%
Benchmark Electronics		35,084		881,310
Fabrinet 1		32,454		1,611,990
Insight Enterprises 1		75,583		4,398,931
PC Connection		86,676		3,031,927
Sanmina Corporation 1		109,941		3,329,013
Vishay Intertechnology		188,939		3,121,272
†Vishay Precision Group 1		44,981		1,827,578
				18,202,021
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.3%
Advanced Energy Industries 1		34,852		1,961,122
Kulicke & Soffa Industries		154,469		3,483,276
MKS Instruments		43,980		3,425,602
Silicon Motion Technology ADR		13,001		576,985
				9,446,985
Total (Cost $20,764,117)				27,649,006
MATERIALS – 0.5%
METALS & MINING - 0.5%
†Mayville Engineering 1		63,574		877,321
Total (Cost $917,999)				877,321
REAL ESTATE – 1.0%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.0%
Marcus & Millichap 1		57,900		1,786,215
Total (Cost $1,669,470)				1,786,215
TOTAL COMMON STOCKS
(Cost $144,650,786)				166,982,609
REPURCHASE AGREEMENT – 6.7%
Fixed Income Clearing Corporation, 0.50% dated 6/28/19, due 7/1/19, maturity value $11,918,497 (collateralized by obligations of various U.S. Government Agencies, 1.75% due 5/31/22, valued at $12,159,570)
(Cost $11,918,000)				11,918,000
TOTAL INVESTMENTS – 99.9%
(Cost $156,568,786)				178,900,609
CASH AND OTHER ASSETS LESS LIABILITIES – 0.1%				194,514
NET ASSETS – 100.0%			$	179,095,123

50 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce Smaller-Companies Growth Fund
Common Stocks – 94.2%
	SHARES		VALUE
COMMUNICATION SERVICES – 2.8%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.9%
Bandwidth Cl. A 1		35,000	$	2,625,700
ENTERTAINMENT - 1.2%
†Sea Cl. A ADR 1,2		108,000		3,587,760
MEDIA - 0.7%
Marchex Cl. B 1		413,099		1,941,565
Total (Cost $3,575,056)				8,155,025
CONSUMER DISCRETIONARY – 10.1%
DIVERSIFIED CONSUMER SERVICES - 0.8%
†Bright Horizons Family Solutions 1		15,000		2,263,050
HOTELS, RESTAURANTS & LEISURE - 0.7%
Texas Roadhouse		36,000		1,932,120
HOUSEHOLD DURABLES - 3.1%
†Cavco Industries 1		10,000		1,575,400
Lovesac Company (The) 1		167,666		5,209,383
†Skyline Champion 1		72,000		1,971,360
				8,756,143
INTERNET & DIRECT MARKETING RETAIL - 1.1%
†Etsy 1		32,000		1,963,840
†Waitr Holdings 1,2		189,400		1,191,326
				3,155,166
LEISURE PRODUCTS - 0.5%
Callaway Golf		85,000		1,458,600
MULTILINE RETAIL - 0.5%
Ollies Bargain Outlet Holdings 1		16,000		1,393,760
SPECIALTY RETAIL - 2.9%
Carvana Cl. A 1,2		28,000		1,752,520
Five Below 1		11,000		1,320,220
Monro		62,000		5,288,600
				8,361,340
TEXTILES, APPAREL & LUXURY GOODS - 0.5%
Columbia Sportswear		15,000		1,502,400
Total (Cost $22,043,699)				28,822,579
CONSUMER STAPLES – 1.6%
FOOD PRODUCTS - 1.2%
Freshpet 1,2		73,000		3,322,230
PERSONAL PRODUCTS - 0.4%
†CV Sciences 1,2,3		300,000		1,221,000
Total (Cost $2,814,464)				4,543,230
ENERGY – 0.9%
OIL, GAS & CONSUMABLE FUELS - 0.9%
Magnolia Oil & Gas Cl. A 1,2		128,000		1,482,240
Viper Energy Partners L.P.		35,000		1,078,700
Total (Cost $2,619,610)				2,560,940
FINANCIALS – 7.5%
BANKS - 3.9%
Enterprise Financial Services		41,500		1,726,400
Seacoast Banking Corporation of Florida 1		82,000		2,086,080
Southern National Bancorp of Virginia		59,000		903,290
TriState Capital Holdings 1		240,057		5,122,816
Webster Financial		26,000		1,242,020
				11,080,606
CAPITAL MARKETS - 2.0%
MarketAxess Holdings		9,000		2,892,780
Northern Trust		22,000		1,980,000
PJT Partners Cl. A		18,000		729,360
				5,602,140
DIVERSIFIED FINANCIAL SERVICES - 0.2%
†Black Ridge Acquisition 1,2		68,000		698,360
THRIFTS & MORTGAGE FINANCE - 1.4%
LendingTree 1		8,000		3,360,240
OceanFirst Financial		29,000		720,650
				4,080,890
Total (Cost $15,921,544)				21,461,996
HEALTH CARE – 24.0%
BIOTECHNOLOGY - 8.1%
†Avid Bioservices 1		300,000		1,680,000
CareDx 1		25,000		899,750
Myriad Genetics 1		176,000		4,889,280
†Natera 1,2		37,000		1,020,460
Oxford Biomedica 1		224,000		1,965,678
REGENXBIO 1,2		60,000		3,082,200
uniQure 1		60,000		4,689,000
Veracyte 1		172,150		4,907,997
				23,134,365
HEALTH CARE EQUIPMENT & SUPPLIES - 6.7%
Apyx Medical 1		272,415		1,830,629
CONMED Corporation		29,000		2,481,530
CryoPort 1		240,198		4,400,427
Penumbra 1		17,000		2,720,000
ViewRay 1		463,000		4,079,030
West Pharmaceutical Services		29,000		3,629,350
				19,140,966
HEALTH CARE PROVIDERS & SERVICES - 3.9%
Addus HomeCare 1		30,000		2,248,500
†Ensign Group (The)		25,000		1,423,000
HealthEquity 1		19,000		1,242,600
†Joint Corp. (The) 1		140,000		2,548,000
PetIQ Cl. A 1,2		77,000		2,537,920
†Providence Service 1		22,000		1,261,480
				11,261,500
HEALTH CARE TECHNOLOGY - 0.2%
Tabula Rasa HealthCare 1,2		15,000		748,950
LIFE SCIENCES TOOLS & SERVICES - 3.8%
Fluidigm Corporation 1,2		185,400		2,284,128
Harvard Bioscience 1		508,600		1,017,200
†Medpace Holdings 1		4,000		261,680
†PureTech Health 1		492,170		1,425,070
Quanterix Corporation 1		177,600		6,001,104
				10,989,182
PHARMACEUTICALS - 1.3%
†Evolus 1,2		128,000		1,871,360
Intersect ENT 1		77,000		1,752,520
				3,623,880
Total (Cost $51,073,883)				68,898,843
INDUSTRIALS – 8.6%
AEROSPACE & DEFENSE - 1.7%
AeroVironment 1,2		9,500		539,315
BWX Technologies		33,000		1,719,300
Cubic Corporation		43,000		2,772,640
				5,031,255

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 51

Schedules of Investments

Royce Smaller-Companies Growth Fund (continued)
	SHARES		VALUE
INDUSTRIALS (continued)
AIR FREIGHT & LOGISTICS - 0.7%
Atlas Air Worldwide Holdings 1		43,000	$	1,919,520
BUILDING PRODUCTS - 0.8%
DIRTT Environmental Solutions 1		388,000		2,207,323
ELECTRICAL EQUIPMENT - 0.9%
American Superconductor 1		202,349		1,877,799
†Vicor 1		22,000		683,100
				2,560,899
MACHINERY - 0.9%
Proto Labs 1		7,000		812,140
Woodward		15,000		1,697,400
				2,509,540
MARINE - 0.5%
Clarkson		46,976		1,497,394
PROFESSIONAL SERVICES - 2.1%
GP Strategies 1		398,282		6,006,093
TRADING COMPANIES & DISTRIBUTORS - 1.0%
Lawson Products 1		83,000		3,048,590
Total (Cost $23,326,872)				24,780,614
INFORMATION TECHNOLOGY – 36.1%
COMMUNICATIONS EQUIPMENT - 1.2%
Lumentum Holdings 1,2		63,000		3,364,830
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 6.2%
Airgain 1,2		156,411		2,213,216
FLIR Systems		48,600		2,629,260
Iteris 1,2		1,607,000		8,308,190
Knowles Corporation 1,2		132,000		2,416,920
Rogers Corporation 1		5,000		862,900
†Vishay Precision Group 1		36,000		1,462,680
				17,893,166
IT SERVICES - 3.1%
Twilio Cl. A 1,2		10,000		1,363,500
Unisys Corporation 1		503,000		4,889,160
USA Technologies 1		345,000		2,563,350
				8,816,010
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 7.6%
Ambarella 1		14,000		617,820
AXT 1		393,000		1,556,280
Brooks Automation		81,000		3,138,750
CyberOptics Corporation 1		137,000		2,223,510
Enphase Energy 1,2		139,000		2,533,970
†First Solar 1,2		23,000		1,510,640
MagnaChip Semiconductor 1		249,961		2,587,096
†Nanometrics 1		61,000		2,117,310
Silicon Laboratories 1		29,000		2,998,600
Universal Display		13,000		2,444,780
				21,728,756
SOFTWARE - 18.0%
Alarm.com Holdings 1,2		32,000		1,712,000
Avalara 1		38,000		2,743,600
†Blue Prism Group 1		38,000		666,927
†Coupa Software 1,2		27,000		3,418,470
†Descartes Systems Group (The) 1		38,000		1,404,100
Envestnet 1,2		22,000		1,504,140
Everbridge 1		41,000		3,666,220
Five9 1		40,000		2,051,600
ForeScout Technologies 1		59,000		1,997,740
LivePerson 1		90,000		2,523,600
Manhattan Associates 1		42,000		2,911,860
Materialise ADR 1,2		270,577		5,281,663
†Mimecast 1		31,000		1,448,010
†Mitek Systems 1,2		206,000		2,047,640
Paylocity Holding Corporation 1		89,786		8,423,722
Pluralsight Cl. A 1,2		65,000		1,970,800
QAD Cl. A		45,000		1,809,450
RingCentral Cl. A 1		31,000		3,562,520
†Workiva Cl. A 1		28,000		1,626,520
Yext 1,2		47,000		944,230
				51,714,812
Total (Cost $74,904,576)				103,517,574
REAL ESTATE – 2.6%
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 2.6%
Community Healthcare Trust		128,000		5,044,480
†Postal Realty Trust Cl. A		155,000		2,441,250
Total (Cost $4,718,217)				7,485,730
TOTAL COMMON STOCKS
(Cost $200,997,921)				270,226,531
REPURCHASE AGREEMENT – 6.7%
Fixed Income Clearing Corporation, 0.50% dated 6/28/19, due 7/1/19, maturity value $19,267,803 (collateralized by obligations of various U.S. Government Agencies, 1.75% due 5/31/22, valued at $19,656,636)
(Cost $19,267,000)				19,267,000
COLLATERAL RECEIVED FOR SECURITIES LOANED – 3.9%
Money Market Funds
Federated Government Obligations Fund (7 day yield-2.2655%)
(Cost $11,043,679)				11,043,679
TOTAL INVESTMENTS – 104.8%
(Cost $231,308,600)				300,537,210
LIABILITIES LESS CASH AND OTHER ASSETS – (4.8)%				(13,629,391	)
NET ASSETS – 100.0%			$	286,907,819

52 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce Special Equity Fund
Common Stocks – 79.2%
	SHARES		VALUE
COMMUNICATION SERVICES – 10.5%
MEDIA - 10.5%
Meredith Corporation		1,350,000	$	74,331,000
Scholastic Corporation		1,590,000		52,851,600
Total (Cost $99,960,281)				127,182,600
CONSUMER DISCRETIONARY – 20.0%
AUTO COMPONENTS - 9.9%
Cooper Tire & Rubber		1,005,000		31,707,750
Gentex Corporation		1,020,000		25,102,200
Standard Motor Products 5		1,380,000		62,569,200
				119,379,150
AUTOMOBILES - 1.3%
Winnebago Industries		420,000		16,233,000
HOTELS, RESTAURANTS & LEISURE - 0.5%
Bowl America Cl. A 5		375,000		5,962,500
HOUSEHOLD DURABLES - 3.7%
Bassett Furniture Industries		511,000		7,792,750
Flexsteel Industries 5		775,000		13,221,500
Hooker Furniture 5		1,155,000		23,816,100
				44,830,350
LEISURE PRODUCTS - 0.9%
Johnson Outdoors Cl. A		146,845		10,950,232
SPECIALTY RETAIL - 3.7%
Children’s Place		325,000		30,998,500
Haverty Furniture		811,000		13,811,330
				44,809,830
Total (Cost $219,661,445)				242,165,062
CONSUMER STAPLES – 8.5%
FOOD & STAPLES RETAILING - 2.9%
Weis Markets		955,000		34,771,550
FOOD PRODUCTS - 5.6%
John B. Sanfilippo & Son 5		845,000		67,338,050
Total (Cost $83,051,551)				102,109,600
ENERGY – 0.6%
ENERGY EQUIPMENT & SERVICES - 0.6%
RPC		1,048,300		7,558,243
Total (Cost $14,156,500)				7,558,243
INDUSTRIALS – 17.9%
AEROSPACE & DEFENSE - 3.3%
National Presto Industries 5		423,000		39,461,670
BUILDING PRODUCTS - 1.9%
Insteel Industries 5		1,094,417		22,785,762
COMMERCIAL SERVICES & SUPPLIES - 1.4%
Ennis		850,900		17,460,468
CONSTRUCTION & ENGINEERING - 1.0%
Argan		312,500		12,675,000
ELECTRICAL EQUIPMENT - 5.7%
Hubbell Incorporated		529,000		68,981,600
MACHINERY - 3.9%
Gencor Industries 1,5		1,148,225		14,926,925
Hurco Companies 5		630,000		22,402,800
Miller Industries		316,000		9,717,000
				47,046,725
PROFESSIONAL SERVICES - 0.7%
Resources Connection		529,269		8,473,596
Total (Cost $142,753,442)				216,884,821
INFORMATION TECHNOLOGY – 12.9%
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 5.1%
AVX Corporation		2,370,000		39,342,000
Vishay Intertechnology		1,355,000		22,384,600
				61,726,600
IT SERVICES - 4.9%
Computer Services 3,5		1,600,000		59,040,000
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.9%
Axcelis Technologies 1		502,500		7,562,625
Kulicke & Soffa Industries		1,200,000		27,060,000
				34,622,625
Total (Cost $109,040,540)				155,389,225
MATERIALS – 5.3%
CHEMICALS - 2.2%
Huntsman Corporation		1,295,000		26,469,800
PAPER & FOREST PRODUCTS - 3.1%
Louisiana-Pacific		650,000		17,043,000
†Mercer International		340,000		5,259,800
†Verso Corporation Cl. A 1		820,000		15,621,000
				37,923,800
Total (Cost $63,461,917)				64,393,600
REAL ESTATE – 3.5%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.5%
Marcus & Millichap 1		1,375,000		42,418,750
Total (Cost $37,589,909)				42,418,750
TOTAL COMMON STOCKS
(Cost $769,675,585)				958,101,901
REPURCHASE AGREEMENT – 20.8%
Fixed Income Clearing Corporation, 0.50% dated 6/28/19, due 7/1/19, maturity value $251,974,499 (collateralized by obligations of various U.S. Government Agencies, 1.75% due 5/31/22, valued at $257,003,623)
(Cost $251,964,000)				251,964,000
TOTAL INVESTMENTS – 100.0%
(Cost $1,021,639,585)				1,210,065,901
LIABILITIES LESS CASH AND OTHER ASSETS – (0.0)%				(418,609	)
NET ASSETS – 100.0%			$	1,209,647,292

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 53

Schedules of Investments

Royce Total Return Fund
Common Stocks – 98.0%
	SHARES		VALUE
COMMUNICATION SERVICES – 2.4%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.6%
ATN International		153,681	$	8,872,004
IDT Corporation Cl. B 1		113,033		1,070,423
				9,942,427
MEDIA - 1.7%
Gannett Company		179,006		1,460,689
Meredith Corporation		352,935		19,432,601
Saga Communications Cl. A		170,341		5,321,453
				26,214,743
WIRELESS TELECOMMUNICATION SERVICES - 0.1%
Telephone and Data Systems		46,859		1,424,513
Total (Cost $32,782,544)				37,581,683
CONSUMER DISCRETIONARY – 6.2%
AUTO COMPONENTS - 2.2%
Gentex Corporation		568,414		13,988,669
LCI Industries		86,470		7,782,300
Nokian Renkaat		142,529		4,450,435
Standard Motor Products		75,682		3,431,422
Superior Industries International		118,569		410,249
†Tower International		205,758		4,012,281
				34,075,356
AUTOMOBILES - 0.3%
Thor Industries		82,313		4,811,195
DISTRIBUTORS - 0.4%
†Core-Mark Holding		16,260		645,847
Weyco Group		218,847		5,845,404
				6,491,251
HOTELS, RESTAURANTS & LEISURE - 0.1%
Cheesecake Factory		58,439		2,554,953
HOUSEHOLD DURABLES - 0.8%
Ethan Allen Interiors		404,341		8,515,421
La-Z-Boy		122,733		3,762,994
				12,278,415
MULTILINE RETAIL - 0.1%
Big Lots		14,422		412,613
Dillard’s Cl. A		12,385		771,338
				1,183,951
SPECIALTY RETAIL - 2.1%
Aaron’s		32,580		2,000,738
American Eagle Outfitters		251,623		4,252,429
Bed Bath & Beyond		129,024		1,499,259
Buckle (The)		91,404		1,582,203
Caleres		270,145		5,381,288
Cato Corporation (The) Cl. A		67,507		831,686
Chico’s FAS		132,453		446,367
Designer Brands Cl. A		321,519		6,163,519
Penske Automotive Group		89,968		4,255,486
Shoe Carnival		222,341		6,136,612
				32,549,587
TEXTILES, APPAREL & LUXURY GOODS - 0.2%
J.G. Boswell Company 3		982		588,218
Movado Group		40,033		1,080,891
Steven Madden		42,651		1,448,001
				3,117,110
Total (Cost $81,704,231)				97,061,818
CONSUMER STAPLES – 3.9%
BEVERAGES - 0.1%
Compania Cervecerias Unidas ADR		82,206		2,322,320
FOOD & STAPLES RETAILING - 1.0%
Village Super Market Cl. A		564,625		14,968,209
FOOD PRODUCTS - 2.6%
Flowers Foods		260,538		6,062,720
Fresh Del Monte Produce		181,935		4,903,148
Hershey Creamery 3		677		2,775,700
Lancaster Colony		47,107		7,000,100
Tootsie Roll Industries		514,354		18,995,093
				39,736,761
HOUSEHOLD PRODUCTS - 0.1%
WD-40 Company		9,107		1,448,377
PERSONAL PRODUCTS - 0.1%
Nu Skin Enterprises Cl. A		29,448		1,452,375
Total (Cost $40,072,549)				59,928,042
ENERGY – 3.7%
ENERGY EQUIPMENT & SERVICES - 2.5%
Core Laboratories		47,800		2,498,984
Helmerich & Payne		149,331		7,559,135
Pason Systems		598,496		8,674,319
RPC		166,558		1,200,883
SEACOR Marine Holdings 1		252,849		3,782,621
TGS-NOPEC Geophysical		530,159		14,866,043
				38,581,985
OIL, GAS & CONSUMABLE FUELS - 1.2%
Alliance Resource Partners L.P.		245,211		4,163,683
†Arch Coal		9,444		889,719
†Brigham Minerals Cl. A 1		50,000		1,073,000
Dorchester Minerals L.P.		249,438		4,567,210
PBF Energy Cl. A		69,310		2,169,403
Permian Basin Royalty Trust		659,344		4,015,405
Sabine Royalty Trust		8,810		424,378
San Juan Basin Royalty Trust		534,344		2,046,537
				19,349,335
Total (Cost $56,067,564)				57,931,320
FINANCIALS – 34.5%
BANKS - 11.9%
Ames National		256,157		6,941,855
Associated Banc-Corp		375,194		7,931,601
Bank of Hawaii		238,655		19,786,886
Bank of N.T. Butterfield & Son		46,729		1,586,917
Bank OZK		111,620		3,358,646
Bar Harbor Bankshares		159,013		4,228,156
BLOM Bank Cl. B GDR		225,597		1,635,578
BOK Financial		259,091		19,556,189
†Cadence Bancorporation Cl.		45,902		954,762
Camden National		177,950		8,162,567
Canadian Western Bank		498,441		11,369,121
City Holding Company		56,435		4,303,733
CNB Financial		208,572		5,890,073
Codorus Valley Bancorp		105,097		2,417,231
Farmers & Merchants Bank of Long Beach 3		403		3,344,900
Financial Institutions		172,953		5,041,580
First Citizens BancShares Cl. A		58,797		26,474,525
First National Bank Alaska 3		24,310		5,737,160
First of Long Island (The)		82,656		1,659,733
Hanmi Financial		113,832		2,535,039
Landmark Bancorp		97,118		2,325,976
MidWestOne Financial Group		120,865		3,379,385

54 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce Total Return Fund (continued)
	SHARES		VALUE
FINANCIALS (continued)
BANKS (continued)
National Bankshares		123,865	$	4,822,064
Northrim BanCorp		128,900		4,596,574
Peapack-Gladstone Financial		403,576		11,348,557
Popular		223,226		12,107,778
Unity Bancorp		153,942		3,494,483
				184,991,069
CAPITAL MARKETS - 10.8%
AllianceBernstein Holding L.P.		371,187		11,031,678
Ares Management Cl. A		1,007,713		26,371,849
Artisan Partners Asset Management Cl. A		179,935		4,951,811
Ashmore Group		2,259,996		14,623,060
Associated Capital Group Cl. A		158,592		5,931,341
Bolsa Mexicana de Valores		4,831,182		9,116,791
Cohen & Steers		301,740		15,521,506
Coronation Fund Managers		470,890		1,494,411
Egyptian Financial Group-Hermes Holding Company		1,298,385		1,337,659
Federated Investors Cl. B		318,615		10,354,988
GAMCO Investors Cl. A		155,498		2,980,897
Houlihan Lokey Cl. A		31,068		1,383,458
Moelis & Company Cl. A		125,643		4,391,223
Morningstar		10,252		1,482,849
MVC Capital		271,389		2,499,493
Och-Ziff Capital Management Group Cl. A		57,638		1,323,368
Pzena Investment Management Cl. A		369,841		3,176,934
Rothschild & Co		56,542		1,832,377
Sprott		3,448,362		8,874,025
TMX Group		266,024		18,506,194
Value Partners Group		9,631,870		6,423,959
Virtu Financial Cl. A		373,089		8,125,878
Vontobel Holding		64,993		3,615,161
Waddell & Reed Financial Cl. A		85,811		1,430,469
Westwood Holdings Group		34,794		1,224,749
				168,006,128
DIVERSIFIED FINANCIAL SERVICES - 0.2%
First Pacific		638,477		259,095
Jefferies Financial Group		163,003		3,134,547
				3,393,642
INSURANCE - 9.3%
Alleghany Corporation 1		24,880		16,946,017
Assured Guaranty		254,266		10,699,513
E-L Financial		41,252		23,468,168
Employers Holdings		65,753		2,779,379
Erie Indemnity Cl. A		171,214		43,536,296
First American Financial		65,911		3,539,421
Horace Mann Educators		16,191		652,335
James River Group Holdings		29,569		1,386,786
Kingstone Companies		213,240		1,844,526
Mercury General		61,295		3,830,938
National Western Life Group Cl. A		5,120		1,315,840
ProAssurance Corporation		306,323		11,061,324
Reinsurance Group of America		27,754		4,330,457
RLI Corp.		109,744		9,406,158
State Auto Financial		170,867		5,980,345
Universal Insurance Holdings		43,073		1,201,737
White Mountains Insurance Group		2,042		2,085,821
				144,065,061
THRIFTS & MORTGAGE FINANCE - 2.3%
Genworth MI Canada		341,750		10,814,494
New York Community Bancorp		380,167		3,794,067
Southern Missouri Bancorp		109,788		3,823,916
Timberland Bancorp		149,242		4,459,351
TrustCo Bank Corp. NY		882,333		6,988,077
WSFS Financial		161,188		6,657,064
				36,536,969
Total (Cost $339,724,858)				536,992,869
HEALTH CARE – 1.3%
HEALTH CARE EQUIPMENT & SUPPLIES - 1.0%
Atrion Corporation		5,195		4,429,984
Hill-Rom Holdings		96,796		10,126,798
Meridian Bioscience 1		70,141		833,275
				15,390,057
HEALTH CARE PROVIDERS & SERVICES - 0.3%
Chemed Corporation		7,870		2,839,811
Ensign Group (The)		29,849		1,699,005
				4,538,816
Total (Cost $6,342,070)				19,928,873
INDUSTRIALS – 25.9%
AEROSPACE & DEFENSE - 1.8%
HEICO Corporation		186,333		24,933,219
Magellan Aerospace		206,621		2,571,816
				27,505,035
AIRLINES - 0.8%
Allegiant Travel		47,808		6,860,448
Hawaiian Holdings		197,734		5,423,844
				12,284,292
BUILDING PRODUCTS - 0.2%
Apogee Enterprises		71,874		3,122,206
COMMERCIAL SERVICES & SUPPLIES - 5.9%
ABM Industries		335,937		13,437,480
†ACCO Brands		102,401		805,896
Ennis		79,697		1,635,383
Herman Miller		73,660		3,292,602
HNI Corporation		302,138		10,689,642
Kimball International Cl. B		789,026		13,752,723
McGrath RentCorp		233,734		14,526,568
MSA Safety		110,691		11,665,725
Ritchie Bros. Auctioneers		548,937		18,235,687
Tetra Tech		19,208		1,508,788
UniFirst Corporation		14,196		2,676,940
				92,227,434
CONSTRUCTION & ENGINEERING - 1.4%
Arcosa		159,334		5,995,738
Argan		175,250		7,108,140
Comfort Systems USA		87,414		4,457,240
EMCOR Group		48,130		4,240,253
				21,801,371
ELECTRICAL EQUIPMENT - 2.0%
EnerSys		43,556		2,983,586
†GrafTech International		70,887		815,201
Hubbell Incorporated		150,653		19,645,151
Preformed Line Products		144,119		8,001,487
				31,445,425
INDUSTRIAL CONGLOMERATES - 0.9%
Raven Industries		383,640		13,765,003

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 55

Schedules of Investments

Royce Total Return Fund (continued)
	SHARES		VALUE
INDUSTRIALS (continued)
MACHINERY - 8.5%
Alamo Group		20,373	$	2,035,874
Federal Signal		52,872		1,414,326
Franklin Electric		329,956		15,672,910
Gorman-Rupp Company (The)		289,740		9,512,164
Helios Technologies		131,474		6,101,708
Hillenbrand		22,552		892,383
Kadant		21,227		1,927,624
Lincoln Electric Holdings		125,101		10,298,314
Lindsay Corporation		134,781		11,080,346
Miller Industries		279,767		8,602,835
Mueller Industries		217,867		6,376,967
Nordson Corporation		33,295		4,704,917
Standex International		29,164		2,133,055
Starrett (L.S.) Company (The) Cl. A 1		300,499		1,989,303
Tennant Company		246,943		15,112,912
Trinity Industries		478,003		9,918,562
Wabash National		599,192		9,748,854
Woodward		135,353		15,316,546
				132,839,600
MARINE - 1.0%
Clarkson		473,771		15,101,795
PROFESSIONAL SERVICES - 2.1%
Exponent		29,651		1,735,769
Forrester Research 1		28,805		1,354,699
Heidrick & Struggles International		172,748		5,177,258
Kforce		66,394		2,329,765
Korn Ferry		113,041		4,529,553
ManpowerGroup		123,533		11,933,288
Resources Connection		172,665		2,764,367
Robert Half International		50,585		2,883,851
				32,708,550
ROAD & RAIL - 0.6%
ArcBest		194,138		5,457,219
Werner Enterprises		144,436		4,489,071
				9,946,290
TRADING COMPANIES & DISTRIBUTORS - 0.7%
Air Lease Cl. A		108,346		4,479,024
Applied Industrial Technologies		38,846		2,390,194
Systemax		175,754		3,894,709
				10,763,927
Total (Cost $187,769,034)				403,510,928
INFORMATION TECHNOLOGY – 5.4%
COMMUNICATIONS EQUIPMENT - 0.1%
ADTRAN		118,908		1,813,347
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 3.4%
AVX Corporation		781,325		12,969,995
Bel Fuse Cl. A		18,080		265,776
Benchmark Electronics		57,483		1,443,973
Methode Electronics		497,870		14,224,146
National Instruments		210,741		8,849,014
PC Connection		175,961		6,155,116
Vishay Intertechnology		511,605		8,451,715
				52,359,735
IT SERVICES - 0.8%
KBR		428,746		10,692,925
MAXIMUS		34,023		2,468,029
				13,160,954
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.7%
Kulicke & Soffa Industries		223,826		5,047,276
MKS Instruments		56,852		4,428,202
Silicon Motion Technology ADR		33,921		1,505,414
				10,980,892
SOFTWARE - 0.4%
Ebix		32,270		1,620,599
j2 Global 1		53,039		4,714,637
				6,335,236
Total (Cost $58,067,577)				84,650,164
MATERIALS – 10.4%
CHEMICALS - 5.5%
Albemarle Corporation		89,218		6,281,839
Balchem Corporation		117,521		11,748,574
Cabot Corporation		276,359		13,185,088
Chase Corporation		123,178		13,258,880
FutureFuel Corporation		86,343		1,009,350
Minerals Technologies		175,307		9,380,678
Quaker Chemical		144,546		29,325,493
Trinseo		41,027		1,737,083
				85,926,985
CONTAINERS & PACKAGING - 1.8%
AptarGroup		70,061		8,711,385
Mayr-Melnhof Karton		40,544		5,098,946
Sonoco Products		230,885		15,086,026
				28,896,357
METALS & MINING - 2.6%
Carpenter Technology		108,024		5,182,991
Ferroglobe (Warranty Insurance Trust) 1,4		569,803		0
Franco-Nevada		64,859		5,505,232
Gold Fields ADR		1,181,593		6,392,418
Haynes International		225,684		7,179,008
Royal Gold		16,191		1,659,416
Schnitzer Steel Industries Cl. A		97,989		2,564,372
Worthington Industries		284,773		11,464,961
				39,948,398
PAPER & FOREST PRODUCTS - 0.5%
Domtar Corporation		91,213		4,061,715
Neenah		31,558		2,131,743
Schweitzer-Mauduit International		42,551		1,411,842
				7,605,300
Total (Cost $76,624,801)				162,377,040
REAL ESTATE – 1.2%
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.2%
Lexington Realty Trust		284,440		2,676,580
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.0%
Kennedy-Wilson Holdings		779,908		16,042,708
Total (Cost $16,740,467)				18,719,288
UTILITIES – 3.1%
ELECTRIC UTILITIES - 0.7%
ALLETE		125,812		10,468,816
†Spark Energy Cl. A		72,101		806,810
				11,275,626
WATER UTILITIES - 2.4%
Aqua America		356,185		14,735,373
SJW Group		286,362		17,402,219

56 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

Royce Total Return Fund (continued)
	SHARES		VALUE
UTILITIES (continued)
WATER UTILITIES (continued)
York Water		129,330	$	4,619,668
				36,757,260
Total (Cost $16,202,043)				48,032,886
TOTAL COMMON STOCKS
(Cost $912,097,738)				1,526,714,911
	PRINCIPAL
	AMOUNT
CORPORATE BONDS – 0.3%
Meritor 6.25%
due 2/15/24	$	825,000		848,719
Unit Corporation 6.625%
due 5/15/21		4,269,155		3,863,585
TOTAL CORPORATE BONDS
(Cost $4,734,733)				4,712,304
REPURCHASE AGREEMENT – 1.6%
Fixed Income Clearing Corporation, 0.50% dated 6/28/19, due 7/1/19, maturity value $24,773,032 (collateralized by obligations of various U.S. Government Agencies, 1.75% due 5/31/22, valued at $25,270,671)
(Cost $24,772,000)				24,772,000
TOTAL INVESTMENTS – 99.9%
(Cost $941,604,471)				1,556,199,215
CASH AND OTHER ASSETS LESS LIABILITIES – 0.1%				1,583,620
NET ASSETS – 100.0%			$	1,557,782,835

ADR- American Depository Receipt
†	New additions in 2019.
1	Non-income producing.
2	All or a portion of these securities were on loan at June 30, 2019.
3	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.
4	Securities for which market quotations are not readily available represent 0.0%, 0.6%, 0.0% and 0.0% of net assets for Royce Low-Priced Stock Fund, Royce Micro-Cap Fund, Royce Pennsylvania Mututal Fund and Royce Total Return Fund. These securities have been valued at their fair value under procedures approved by the Fund’s Board of Trustees. These securities are defined as Level 3 securities due to the use of significant unobservable inputs in the determination of fair value. See Notes to Financial Statements.
5	At June 30, 2019, the Fund owned 5% or more of the Company’s outstanding voting securities thereby making the Company an Affiliated Company as that term is defined in the Investment Company Act of 1940. See Notes to Financial Statements.
	Securities of Royce International Premier Fund 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 June 30, 2019, market value.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 57

Statements of Assets and Liabilities

			Royce Global
	Royce Dividend		Financial Services		Royce International		Royce Low-Priced
	Value Fund		Fund		Premier Fund		Stock Fund
ASSETS:
Investments at value (including collateral on loaned securities)1
Non-Affiliated Companies	$	108,278,909	$	38,117,548	$	582,895,243	$	199,040,371
Repurchase agreements (at cost and value)		1,286,000		1,238,000		29,373,000		14,612,000
Cash and foreign currency2		45,263		27		141,189		8,394
Receivable for investments sold		13,973		–		5,182,957		2,099,600
Receivable for capital shares sold		21,336		9,776		10,586,181		8,105
Receivable for dividends and interest		131,537		116,135		1,105,887		80,091
Receivable for securities lending income		–		–		–		28,796
Prepaid expenses and other assets		2,161		1,184		5,784		–
Total Assets		109,779,179		39,482,670		629,290,241		215,877,357
LIABILITIES:
Payable for collateral on loaned securities		–		–		–		1,601,437
Payable for investments purchased		–		–		22,996,137		–
Payable for capital shares redeemed		78,772		31,147		251,693		153,519
Payable for investment advisory fees		74,297		31,623		432,779		170,076
Payable for trustees’ fees		6,007		1,930		14,273		8,617
Accrued expenses		75,829		46,712		62,806		566,102
Total Liabilities		234,905		111,412		23,757,688		2,499,751
Net Assets	$	109,544,274	$	39,371,258	$	605,532,553	$	213,377,606
ANALYSIS OF NET ASSETS:
Paid-in capital	$	56,206,138	$	29,928,904	$	600,647,682	$	171,237,632
Total distributable earnings (loss)		53,338,136		9,442,354		4,884,871		42,139,974
Net Assets	$	109,544,274	$	39,371,258	$	605,532,553	$	213,377,606
Investment Class	$	80,163,063			$	374,280,682	$	50,438,997
Service Class		27,046,786	$	33,063,154		59,628,996		162,938,609
Consultant Class		1,556,251				9,620,893
Institutional Class		778,174		6,308,104		162,001,982
SHARES OUTSTANDING (unlimited number of $.001 par value):
Investment Class		11,992,917				27,042,126		6,905,293
Service Class		3,923,914		3,476,578		3,609,942		22,475,937
Consultant Class		198,221				540,948
Institutional Class		118,266		513,604		11,697,686
NET ASSET VALUES (Net Assets ÷ Shares Outstanding):
Investment Class3	$	6.68			$	13.84	$	7.30
Service Class3		6.89	$	9.51		16.52		7.25
Consultant Class4		7.85				17.79
Institutional Class5		6.58		12.28		13.85
Investments at identified cost	$	65,008,678	$	27,652,167	$	517,088,407	$	156,837,063
Market value of loaned securities6		–		–		–		9,782,086

1	See Notes to Financial Statements for information on non-cash collateral on loaned securities.
2	Royce International Premier Fund includes $626 in cash and $140,563 (cost $140,482) in foreign currency.
3	Offering and redemption price per share; shares held less than 30 days may be subject to a 1% redemption fee, or a 2% redemption fee (Royce International Premier Fund), payable to the Fund.
4	Offering and redemption price per share; shares held less than 365 days may be subject to a 1% contingent deferred sales charge, payable to Royce Fund Services, LLC.
5	Offering and redemption price per share.
6	Market value of loaned securities backed by non-cash collateral is as of prior business day.

58 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2019 (unaudited)

	Royce Micro-Cap		Royce Opportunity		Royce Pennsylvania			Royce
	Fund		Fund		Mutual Fund		Premier Fund
ASSETS:
Investments at value (including collateral on loaned securities)1
Non-Affiliated Companies	$	133,344,962	$	887,499,318	$	1,877,167,027	$	1,701,563,860
Repurchase agreements (at cost and value)		3,919,000		79,839,000		95,118,000		158,694,000
Cash and foreign currency		9,681		–		786,406		1,999,839
Receivable for investments sold		27,802		5,530,250		1,459,859		3,213,685
Receivable for capital shares sold		24,172		782,486		443,258		444,950
Receivable for dividends and interest		106,900		302,450		1,276,606		2,313,862
Receivable for securities lending income		15,757		31,192		32,838		3,124
Prepaid expenses and other assets		192		19,407		2,884,097		10,281
Total Assets		137,448,466		974,004,103		1,979,168,091		1,868,243,601
LIABILITIES:
Payable for collateral on loaned securities		1,260,590		28,337,338		6,580,014		–
Payable to custodian for cash and foreign currency overdrawn		–		502,303		–		–
Payable for investments purchased		244,801		4,223,363		5,340,269		–
Payable for capital shares redeemed		357,629		988,193		2,249,886		1,616,676
Payable for investment advisory fees		144,531		744,280		1,201,120		1,495,745
Payable for trustees’ fees		7,010		48,174		85,394		82,959
Accrued expenses		116,969		408,438		873,678		1,332,259
Total Liabilities		2,131,530		35,252,089		16,330,361		4,527,639
Net Assets	$	135,316,936	$	938,752,014	$	1,962,837,730	$	1,863,715,962
ANALYSIS OF NET ASSETS:
Paid-in capital	$	104,774,909	$	896,141,578	$	1,258,095,182	$	865,172,708
Total distributable earnings (loss)		30,542,027		42,610,436		704,742,548		998,543,254
Net Assets	$	135,316,936	$	938,752,014	$	1,962,837,730	$	1,863,715,962
Investment Class	$	112,886,916	$	607,774,932	$	1,429,922,501	$	1,559,791,497
Service Class		6,010,070		47,581,976		150,084,900		42,551,676
Consultant Class		16,419,950		9,033,911		275,503,281		23,321,898
Institutional Class				244,398,577		97,577,941		226,798,370
R Class				29,962,618		9,749,107		11,252,521
SHARES OUTSTANDING (unlimited number of $.001 par value):
Investment Class		10,921,916		52,980,519		156,495,734		110,201,116
Service Class		594,498		4,466,239		16,451,312		3,093,511
Consultant Class		2,067,401		971,599		38,009,918		2,098,135
Institutional Class				20,849,923		10,640,694		15,779,692
R Class				2,922,040		1,138,410		863,597
NET ASSET VALUES (Net Assets ÷ Shares Outstanding):
Investment Class2	$	10.34	$	11.47	$	9.14	$	14.15
Service Class2		10.11		10.65		9.12		13.76
Consultant Class3		7.94		9.30		7.25		11.12
Institutional Class4				11.72		9.17		14.37
R Class4				10.25		8.56		13.03
Investments at identified cost	$	107,085,406	$	846,542,471	$	1,216,169,263	$	966,560,294
Market value of loaned securities5		2,153,391		80,792,482		43,183,798		32,262,973

1	See Notes to Financial Statements for information on non-cash collateral on loaned securities.
2	Offering and redemption price per share; shares held less than 30 days may be subject to a 1% redemption fee, payable to the Fund.
3	Offering and redemption price per share; shares held less than 365 days may be subject to a 1% contingent deferred sales charge, payable to Royce Fund Services, LLC.
4	Offering and redemption price per share.
5	Market value of loaned securities backed by non-cash collateral is as of prior business day.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 59

Statements of Assets and Liabilities June 30, 2019 (unaudited)

	Royce Small-Cap		Royce Smaller-Companies Growth		Royce Special Equity		Royce Total Return
	Value Fund		Fund		Fund		Fund
ASSETS:
Investments at value (including collateral on loaned securities)1
Non-Affiliated Companies	$	166,982,609	$	281,270,210	$	626,577,394	$	1,531,427,215
Affiliated Companies		–		–		331,524,507		–
Repurchase agreements (at cost and value)		11,918,000		19,267,000		251,964,000		24,772,000
Cash and foreign currency		37,207		527		503		179,583
Receivable for investments sold		951,437		296,970		–		2,779,184
Receivable for capital shares sold		26,039		98,345		1,734,466		583,950
Receivable for dividends and interest		172,773		22,190		661,986		1,759,231
Receivable for securities lending income		169		28,479		–		32
Prepaid expenses and other assets		109		323		18,453		21,495
Total Assets		180,088,343		300,984,044		1,212,481,309		1,561,522,690
LIABILITIES:
Payable for collateral on loaned securities		–		11,043,679		–		–
Payable for investments purchased		183,011		2,165,978		44,217		129,537
Payable for capital shares redeemed		480,683		434,030		1,257,123		1,423,982
Payable for investment advisory fees		146,318		231,187		979,447		1,280,782
Payable for trustees’ fees		9,437		13,060		54,922		78,684
Accrued expenses		173,771		188,291		498,308		826,870
Total Liabilities		993,220		14,076,225		2,834,017		3,739,855
Net Assets	$	179,095,123	$	286,907,819	$	1,209,647,292	$	1,557,782,835
ANALYSIS OF NET ASSETS:
Paid-in capital	$	150,923,079	$	215,849,442	$	920,779,935	$	811,412,726
Total distributable earnings (loss)		28,172,044		71,058,377		288,867,357		746,370,109
Net Assets	$	179,095,123	$	286,907,819	$	1,209,647,292	$	1,557,782,835
Investment Class	$	55,789,393	$	98,628,230	$	899,182,678	$	1,051,106,924
Service Class		105,538,299		173,068,116		59,871,454		81,604,145
Consultant Class		9,327,709		6,800,853		28,087,281		160,492,952
Institutional Class				8,410,620		222,505,879		227,957,705
R Class		8,439,722						36,621,109
SHARES OUTSTANDING (unlimited number of $.001 par value):
Investment Class		6,121,018		11,866,396		49,327,356		94,496,331
Service Class		11,634,652		21,372,064		3,290,031		7,144,069
Consultant Class		1,161,836		982,222		1,697,352		13,982,148
Institutional Class				997,305		12,307,335		20,783,123
R Class		970,695						3,177,912
NET ASSET VALUES (Net Assets ÷ Shares Outstanding):
Investment Class2	$	9.11	$	8.31	$	18.23	$	11.12
Service Class2		9.07		8.10		18.20		11.42
Consultant Class3		8.03		6.92		16.55		11.48
Institutional Class4				8.43		18.08		10.97
R Class4		8.69						11.52
Investments at identified cost	$	144,650,786	$	212,041,600	$	769,675,585	$	916,832,471
Market value of loaned securities5		211,745		33,711,858		–		–

1	See Notes to Financial Statements for information on non-cash collateral on loaned securities.
2	Offering and redemption price per share; shares held less than 30 days may be subject to a 1% redemption fee, payable to the Fund.
3	Offering and redemption price per share; shares held less than 365 days may be subject to a 1% contingent deferred sales charge, payable to Royce Fund Services, LLC.
4	Offering and redemption price per share.
5	Market value of loaned securities backed by non-cash collateral is as of prior business day.

60 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Royce Dividend Value Fund						Royce Global Financial Services Fund						Royce International Premier Fund
	Six Months Ended						Six Months Ended						Six Months Ended
	6/30/19 (unaudited)			Year Ended 12/31/18			6/30/19 (unaudited)			Year Ended 12/31/18			6/30/19 (unaudited)			Year Ended 12/31/18
INVESTMENT OPERATIONS:
Net investment income (loss)	$	846,346		$	2,012,643		$	243,167		$	367,171		$	3,917,536		$	2,263,660
Net realized gain (loss) on investments and foreign currency		7,213,833			12,616,968			(936,073	)		2,979,071			(3,322,726	)		8,070,741
Net change in unrealized appreciation (depreciation) on investments and foreign currency		15,039,059			(40,185,073	)		6,724,407			(9,527,242	)		86,870,673			(49,866,583	)
Net increase (decrease) in net assets from investment operations		23,099,238			(25,555,462	)		6,031,501			(6,181,000	)		87,465,483			(39,532,182	)
DISTRIBUTIONS:
Total distributable earnings
Investment Class		(524,861	)		(12,605,262	)								–			(1,380,251	)
Service Class		(106,981	)		(3,997,819	)		–			(3,729,655	)		–			–
Consultant Class		(1,993	)		(122,078	)								–			–
Institutional Class		(11,171	)		(380,526	)		–			(783,011	)		–			(136,828	)
R Class																	–
Total distributions		(645,006	)		(17,105,685	)		–			(4,512,666	)		–			(1,517,079	)
CAPITAL SHARE TRANSACTIONS:
Net capital share transactions
Investment Class		(24,268,349	)		(1,874,541	)								26,360,286			213,971,721
Service Class		(6,433,011	)		(21,458,903	)		(4,037,465	)		(6,175,338	)		13,974,736			(6,987,199	)
Consultant Class		(65,733	)		146,686									(653,522	)		613,402
Institutional Class		(2,665,105	)		2,872,340			(1,686,897	)		126,326			116,129,797			34,743,935
R Class																	(72,570	)
Shareholder redemption fees
Investment Class		907			354									1,694			2,207
Service Class		–			65			113			1,770			125			4,049
Net increase (decrease) in net assets from capital share transactions		(33,431,291	)		(20,313,999	)		(5,724,249	)		(6,047,242	)		155,813,116			242,275,545
Net Increase (Decrease) In Net Assets		(10,977,059	)		(62,975,146	)		307,252			(16,740,908	)		243,278,599			201,226,284
NET ASSETS:
Beginning of period		120,521,333			183,496,479			39,064,006			55,804,914			362,253,954			161,027,670
End of period	$	109,544,274		$	120,521,333		$	39,371,258		$	39,064,006		$	605,532,553		$	362,253,954

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 61

Statements of Changes in Net Assets

	Royce Low-Priced Stock Fund						Royce Micro-Cap Fund						Royce Opportunity Fund
	Six Months Ended						Six Months Ended						Six Months Ended
	6/30/19 (unaudited)			Year Ended 12/31/18			6/30/19 (unaudited)			Year Ended 12/31/18			6/30/19 (unaudited)			Year Ended 12/31/18
INVESTMENT OPERATIONS:
Net investment income (loss)	$	(686,424	)	$	(1,133,831	)	$	(591,978	)	$	(1,071,296	)	$	(2,379,745	)	$	(4,033,771	)
Net realized gain (loss) on investments and foreign currency		(440,755	)		35,163,344			4,106,315			17,269,067			(404,998	)		191,294,014
Net change in unrealized appreciation (depreciation) on investments and foreign currency		29,886,433			(52,982,915	)		10,987,322			(28,935,176	)		138,749,730			(410,163,454	)
Net increase (decrease) in net assets from investment operations		28,759,254			(18,953,402	)		14,501,659			(12,737,405	)		135,964,987			(222,903,211	)
DISTRIBUTIONS:
Total distributable earnings
Investment Class		–			(8,649,166	)		–			(14,965,777	)		–			(54,326,168	)
Service Class		–			(28,763,572	)		–			(1,066,109	)		–			(4,760,005	)
Consultant Class								–			(2,112,496	)		–			(996,034	)
Institutional Class					–									–			(22,358,870	)
R Class					–									–			(2,423,347	)
K Class																	–
Total distributions		–			(37,412,738	)		–			(18,144,382	)		–			(84,864,424	)
CAPITAL SHARE TRANSACTIONS:
Net capital share transactions
Investment Class		(2,653,256	)		7,272,812			(16,222,475	)		(24,536,300	)		(54,498,884	)		(48,887,275	)
Service Class		(14,754,534	)		(10,675,180	)		(2,842,292	)		(4,025,626	)		(8,578,781	)		(30,180,961	)
Consultant Class								(1,892,462	)		(3,995,491	)		(2,228,435	)		(6,974,656	)
Institutional Class					(5,851,516	)								(18,039,277	)		(334,335,230	)
R Class					(1,044,390	)								(433,101	)		(3,932,968	)
K Class																	(7,623,085	)
Value of shares issued in connection with the merger of Royce Micro-Cap Opportunity Fund														17,332,098
Shareholder redemption fees
Investment Class		–			–			4			25			4,333			1,927
Service Class		14			371			–			400			542			4,255
Net increase (decrease) in net assets from capital share transactions		(17,407,776	)		(10,297,903	)		(20,957,225	)		(32,556,992	)		(66,441,505	)		(431,927,993	)
Net Increase (Decrease) In Net Assets		11,351,478			(66,664,043	)		(6,455,566	)		(63,438,779	)		69,523,482			(739,695,628	)
NET ASSETS:
Beginning of period		202,026,128			268,690,171			141,772,502			205,211,281			869,228,532			1,608,924,160
End of period	$	213,377,606		$	202,026,128		$	135,316,936		$	141,772,502		$	938,752,014		$	869,228,532

62 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

	Royce Pennsylvania Mutual Fund						Royce Premier Fund						Royce Small-Cap Value Fund
	Six Months Ended						Six Months Ended						Six Months Ended
	6/30/19 (unaudited)			Year Ended 12/31/18			6/30/19 (unaudited)			Year Ended 12/31/18			6/30/19 (unaudited)			Year Ended 12/31/18
INVESTMENT OPERATIONS:
Net investment income (loss)	$	1,975,606		$	2,940,631		$	1,059,114		$	2,121,899		$	637,154		$	447,552
Net realized gain (loss) on investments and foreign currency		20,485,696			300,733,207			166,315,337			429,412,796			1,750,935			20,466,232
Net change in unrealized appreciation (depreciation) on investments and foreign currency		262,052,631			(476,364,644	)		191,070,696			(629,691,624	)		14,107,171			(34,834,657	)
Net increase (decrease) in net assets from investment operations		284,513,933			(172,690,806	)		358,445,147			(198,156,929	)		16,495,260			(13,920,873	)
DISTRIBUTIONS:
Total distributable earnings
Investment Class		–			(250,290,314	)		–			(343,875,339	)		–			(7,078,045	)
Service Class		–			(6,860,517	)		–			(9,798,555	)		–			(13,404,578	)
Consultant Class		–			(50,324,521	)		–			(4,962,544	)		–			(1,153,070	)
Institutional Class		–			(12,015,566	)		–			(45,506,838	)					–
W Class											–
R Class		–			(1,931,480	)		–			(2,176,396	)		–			(944,360	)
K Class					–												–
Total distributions		–			(321,422,398	)		–			(406,319,672	)		–			(22,580,053	)
CAPITAL SHARE TRANSACTIONS:
Net capital share transactions
Investment Class		(76,098,598	)		(35,970,327	)		(139,835,574	)		(68,385,184	)		(5,669,080	)		2,085,467
Service Class		(9,057,330	)		(12,430,134	)		(7,779,993	)		1,871,516			(16,242,792	)		(19,031,191	)
Consultant Class		(22,710,138	)		(33,550,757	)		(2,452,657	)		(2,498,476	)		(1,125,035	)		(1,459,212	)
Institutional Class		(1,180,264	)		49,826,835			(13,656,511	)		15,591,155						(3,864,348	)
W Class											(32,627,052	)
R Class		(1,880,543	)		(2,160,705	)		(514,255	)		192,909			(545,873	)		(4,756,940	)
K Class					(2,826,318	)											(1,969,073	)
Value of shares issued in connection with the mergers of Royce Small-Cap Leaders Fund and Royce Small/Mid-Cap Premier Fund		210,165,813
Shareholder redemption fees
Investment Class		695			1,208			25,139			3,844			–			2
Service Class		–			1,416			62			37			5			473
Net increase (decrease) in net assets from capital share transactions		99,239,635			(37,108,782	)		(164,213,789	)		(85,851,251	)		(23,582,775	)		(28,994,822	)
Net Increase (Decrease) In Net Assets		383,753,568			(531,221,986	)		194,231,358			(690,327,852	)		(7,087,515	)		(65,495,748	)
NET ASSETS:
Beginning of period		1,579,084,162			2,110,306,148			1,669,484,604			2,359,812,456			186,182,638			251,678,386
End of period	$	1,962,837,730		$	1,579,084,162		$	1,863,715,962		$	1,669,484,604		$	179,095,123		$	186,182,638

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 63

Statements of Changes in Net Assets

	Royce Smaller-Companies Growth Fund						Royce Special Equity Fund						Royce Total Return Fund
	Six Months Ended						Six Months Ended						Six Months Ended
	6/30/19 (unaudited)			Year Ended 12/31/18			6/30/19 (unaudited)			Year Ended 12/31/18			6/30/19 (unaudited)			Year Ended 12/31/18
INVESTMENT OPERATIONS:
Net investment income (loss)	$	(1,277,212	)	$	(2,871,983	)	$	5,813,778		$	14,296,007		$	10,891,450		$	28,615,219
Net realized gain (loss) on investments and foreign currency		(1,431,557	)		59,623,708			84,558,110			128,379,606			75,397,372			350,348,950
Net change in unrealized appreciation (depreciation) on investments and foreign currency		55,861,277			(83,719,682	)		(33,637,494	)		(286,833,332	)		144,137,679			(622,350,876	)
Net increase (decrease) in net assets from investment operations		53,152,508			(26,967,957	)		56,734,394			(144,157,719	)		230,426,501			(243,386,707	)
DISTRIBUTIONS:
Total distributable earnings
Investment Class		–			(29,890,884	)		–			(113,623,179	)		(7,542,058	)		(225,309,236	)
Service Class		–			(51,970,195	)		–			(7,307,745	)		(461,954	)		(16,161,811	)
Consultant Class		–			(2,217,718	)		–			(3,348,220	)		(219,864	)		(31,360,737	)
Institutional Class		–			(2,394,890	)		–			(22,075,060	)		(1,787,602	)		(44,088,716	)
W Class																	(278,190	)
R Class					–									(129,512	)		(8,404,156	)
K Class																	(58,255	)
Total distributions		–			(86,473,687	)		–			(146,354,204	)		(10,140,990	)		(325,661,101	)
CAPITAL SHARE TRANSACTIONS:
Net capital share transactions
Investment Class		(6,888,965	)		6,715,178			(53,618,278	)		(11,589,585	)		(133,102,141	)		(123,762,427	)
Service Class		(15,078,539	)		(3,929,820	)		(5,992,781	)		(29,107,261	)		(13,903,577	)		13,551,539
Consultant Class		(790,391	)		(834,711	)		(3,440,177	)		(8,996,204	)		(22,945,601	)		(28,831,097	)
Institutional Class		(250,406	)		1,069,284			11,591,020			686,503			(20,970,340	)		(14,128,910	)
W Class																	(98,540,528	)
R Class					(595,855	)								(15,112,786	)		5,579,991
K Class																	(37,154,510	)
Shareholder redemption fees
Investment Class		493			–			2,390			4,643			136			1,812
Service Class		95			370			499			1,015			8			6,244
Net increase (decrease) in net assets from capital share transactions		(23,007,713	)		2,424,446			(51,457,327	)		(49,000,889	)		(206,034,301	)		(283,277,886	)
Net Increase (Decrease) In Net Assets		30,144,795			(111,017,198	)		5,277,067			(339,512,812	)		14,251,210			(852,325,694	)
NET ASSETS:
Beginning of period		256,763,024			367,780,222			1,204,370,225			1,543,883,037			1,543,531,625			2,395,857,319
End of period	$	286,907,819		$	256,763,024		$	1,209,647,292		$	1,204,370,225		$	1,557,782,835		$	1,543,531,625

64 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Statements of Operations Six Months Ended June 30, 2019 (unaudited)

	Royce Dividend			Royce Global Financial Services			Royce International			Royce Low-Priced
	Value Fund			Fund			Premier Fund			Stock Fund
INVESTMENT INCOME:
INCOME:
Dividends	$	1,597,815		$	571,500		$	7,391,802		$	786,368
Foreign withholding tax		(80,071	)		(44,657	)		(789,889	)		(25,005	)
Interest		4,196			1,693			66,423			23,487
Securities lending		–			–			–			65,525
Total income		1,521,940			528,536			6,668,336			850,375
EXPENSES:
Investment advisory fees		494,396			199,099			2,348,819			1,073,172
Distribution fees		43,841			40,615			110,597			206,065
Shareholder servicing		101,595			33,923			172,122			180,590
Administrative and office facilities		35,063			15,450			74,316			53,018
Registration		26,981			15,452			54,285			17,471
Custody		23,981			20,795			87,701			16,100
Shareholder reports		20,594			6,300			28,757			34,861
Audit		16,499			14,891			21,341			14,017
Trustees’ fees		10,227			3,312			28,242			17,116
Legal		2,659			854			6,012			4,423
Other expenses		7,208			2,578			10,864			97,442
Total expenses		783,044			353,269			2,943,056			1,714,275
Compensating balance credits		(1,090	)		(507	)		(1,389	)		(4,245	)
Fees waived by investment adviser and distributor		(48,190	)		(35,824	)		(157,190	)		–
Expenses reimbursed by investment adviser		(58,170	)		(31,569	)		(33,677	)		(173,231	)
Net expenses		675,594			285,369			2,750,800			1,536,799
Net investment income (loss)		846,346			243,167			3,917,536			(686,424	)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
NET REALIZED GAIN (LOSS):
Investments		7,196,611			(939,373	)		(3,214,405	)		(438,562	)
Foreign currency transactions		17,222			3,300			(108,321	)		(2,193	)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):
Investments		15,039,027			6,723,283			86,850,126			29,886,387
Other assets and liabilities denominated in foreign currency		32			1,124			20,547			46
Net realized and unrealized gain (loss) on investments and foreign currency		22,252,892			5,788,334			83,547,947			29,445,678
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS	$	23,099,238		$	6,031,501		$	87,465,483		$	28,759,254

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 65

Statements of Operations

							Royce
	Royce Micro-Cap			Royce Opportunity			Pennsylvania			Royce Premier
	Fund			Fund			Mutual Fund			Fund
INVESTMENT INCOME:
INCOME:
Dividends	$	570,551		$	3,287,091		$	11,713,688		$	12,569,748
Foreign withholding tax		(13,822	)		–			(261,534	)		(399,369	)
Interest		12,013			141,906			123,336			128,457
Securities lending		44,784			150,781			142,224			11,360
Total income		613,526			3,579,778			11,717,714			12,310,196
EXPENSES:
Investment advisory fees		918,619			4,759,960			6,634,155			9,204,817
Distribution fees		94,285			187,229			1,422,261			196,608
Shareholder servicing		89,398			471,623			763,493			855,361
Administrative and office facilities		39,596			230,327			374,795			404,261
Registration		21,244			37,225			39,006			38,091
Custody		12,568			60,775			88,994			81,847
Shareholder reports		36,891			80,844			163,556			216,936
Audit		13,769			20,284			20,980			20,293
Trustees’ fees		12,052			79,643			135,459			145,301
Legal		3,135			20,668			33,827			36,614
Other expenses		95,063			47,104			87,675			78,609
Total expenses		1,336,620			5,995,682			9,764,201			11,278,738
Compensating balance credits		(6,139	)		(8,455	)		(22,093	)		(11,294	)
Fees waived by investment adviser and distributor		(359	)		–			–			(10,737	)
Expenses reimbursed by investment adviser		(124,618	)		(27,704	)		–			(5,625	)
Net expenses		1,205,504			5,959,523			9,742,108			11,251,082
Net investment income (loss)		(591,978	)		(2,379,745	)		1,975,606			1,059,114
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
NET REALIZED GAIN (LOSS):
Investments in Non-Affiliated Companies		4,105,982			(404,998	)		20,488,196			171,695,460
Investments in Affiliated Companies		–			–			–			(5,330,368	)
Foreign currency transactions		333			–			(2,500	)		(49,755	)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):
Investments in Non-Affiliated Companies		10,987,853			138,749,730			262,053,434			162,706,111
Investments in Affiliated Companies		–			–			–			28,372,793
Other assets and liabilities denominated in foreign currency		(531	)		–			(803	)		(8,208	)
Net realized and unrealized gain (loss) on investments and foreign currency		15,093,637			138,344,732			282,538,327			357,386,033
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS	$	14,501,659		$	135,964,987		$	284,513,933		$	358,445,147

66 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Six Months Ended June 30, 2019 (unaudited)

				Royce Smaller-
	Royce Small-Cap			Companies Growth			Royce Special			Royce Total Return
	Value Fund			Fund			Equity Fund			Fund
INVESTMENT INCOME:
INCOME:
Dividends
Non-Affiliated Companies	$	2,064,953		$	481,634		$	8,185,157		$	22,160,916
Affiliated Companies		–			–			4,802,239			–
Foreign withholding tax		(20,568	)		(23	)		–			(594,292	)
Interest		38,531			35,772			556,343			286,776
Securities lending		401			187,058			–			588
Total income		2,083,317			704,441			13,543,739			21,853,988
EXPENSES:
Investment advisory fees		975,433			1,410,763			6,303,636			8,120,928
Distribution fees		216,782			246,932			231,080			1,057,110
Shareholder servicing		159,904			200,764			572,820			851,255
Administrative and office facilities		49,209			67,971			273,706			380,517
Registration		23,834			29,314			37,170			36,316
Custody		18,977			18,763			55,048			102,246
Shareholder reports		23,878			42,042			124,967			192,453
Audit		14,493			16,419			18,612			22,328
Trustees’ fees		15,842			22,443			99,072			134,015
Legal		3,913			5,686			24,358			34,540
Other expenses		9,499			12,961			48,136			79,464
Total expenses		1,511,764			2,074,058			7,788,605			11,011,172
Compensating balance credits		(2,459	)		(3,906	)		(10,421	)		(12,197	)
Fees waived by investment adviser and distributor		–			(19,380	)		–			–
Expenses reimbursed by investment adviser		(63,142	)		(69,119	)		(48,223	)		(36,437	)
Net expenses		1,446,163			1,981,653			7,729,961			10,962,538
Net investment income (loss)		637,154			(1,277,212	)		5,813,778			10,891,450
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
NET REALIZED GAIN (LOSS):
Investments in Non-Affiliated Companies		1,751,905			(1,442,479	)		84,021,286			76,362,860
Investments in Affiliated Companies		–			–			536,824			(951,302	)
Foreign currency transactions		(970	)		10,922			–			(14,186	)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):
Investments in Non-Affiliated Companies		14,107,226			55,861,282			(48,899,174	)		142,536,899
Investments in Affiliated Companies		–			–			15,261,680			1,597,675
Other assets and liabilities denominated in foreign currency		(55	)		(5	)		–			3,105
Net realized and unrealized gain (loss) on investments and foreign currency		15,858,106			54,429,720			50,920,616			219,535,051
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS	$	16,495,260		$	53,152,508		$	56,734,394		$	230,426,501

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 67

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated 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.

																													Ratio of Expenses to Average Net Assets
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)		Net Realized and 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			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers, Expense Reimbursements and Balance Credits			Prior to Fee Waivers and Expense Reimbursements			Net of Fee Waivers and Expense Reimbursements			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Dividend Value Fund–Investment Class
2019†	$	5.56	$	0.05	$	1.11		$	1.16		$	(0.04	)	$	–		$	(0.04	)	$	–	$	6.68		20.90	%1	$	80,163		1.22	%2		1.22	%2		1.09	%2		1.52	%2		6	%
2018		7.56		0.10		(1.27	)		(1.17	)		(0.10	)		(0.73	)		(0.83	)		–		5.56		(16.06	)		88,036		1.13			1.13			1.04			1.29			13
2017		7.18		0.10		1.43			1.53			(0.13	)		(1.02	)		(1.15	)		–		7.56		21.91			121,209		1.13			1.13			1.06			1.24			16
2016		6.84		0.12		1.02			1.14			(0.11	)		(0.69	)		(0.80	)		–		7.18		16.75			99,462		1.16			1.16			1.11			1.64			21
2015		8.12		0.12		(0.57	)		(0.45	)		(0.13	)		(0.70	)		(0.83	)		–		6.84		(5.54	)		116,053		1.24			1.24			1.22			1.49			14
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
Royce Dividend Value Fund–Service Class
2019†	$	5.73	$	0.04	$	1.15		$	1.19		$	(0.03	)	$	–		$	(0.03	)	$	–	$	6.89		20.71	%1	$	27,047		1.58	%2		1.57	%2		1.34	%2		1.29	%2		6	%
2018		7.76		0.07		(1.29	)		(1.22	)		(0.06	)		(0.75	)		(0.81	)		–		5.73		(16.24	)		28,120		1.43			1.43			1.34			1.01			13
2017		7.33		0.08		1.46			1.54			(0.07	)		(1.04	)		(1.11	)		–		7.76		21.66			59,641		1.40			1.39			1.31			1.04			16
2016		6.96		0.10		1.04			1.14			(0.08	)		(0.69	)		(0.77	)		–		7.33		16.36			115,547		1.43			1.43			1.37			1.39			21
2015		8.22		0.10		(0.57	)		(0.47	)		(0.09	)		(0.70	)		(0.79	)		–		6.96		(5.72	)		167,165		1.49			1.49			1.47			1.25			14
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
Royce Dividend Value Fund–Consultant Class a
2019†	$	6.53	$	0.02	$	1.31		$	1.33		$	(0.01	)	$	–		$	(0.01	)	$	–	$	7.85		20.37	%1	$	1,556		3.28	%2		3.28	%2		2.09	%2		0.58	%2		6	%
2018		8.87		0.02		(1.48	)		(1.46	)		(0.03	)		(0.85	)		(0.88	)		–		6.53		(16.93	)		1,349		3.44			3.44			2.09			0.24			13
2017		8.39		0.02		1.68			1.70			(0.03	)		(1.19	)		(1.22	)		–		8.87		20.71			1,534		3.26			3.26			2.09			0.23			16
2016		7.90		0.05		1.17			1.22			(0.04	)		(0.69	)		(0.73	)		–		8.39		15.44			1,572		3.26			3.26			2.14			0.58			21
2015		9.22		0.04		(0.63	)		(0.59	)		(0.03	)		(0.70	)		(0.73	)		–		7.90		(6.39	)		1,886		3.78			3.78			2.24			0.46			14
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 Class
2019†	$	5.48	$	0.07	$	1.07		$	1.14		$	(0.04	)	$	–		$	(0.04	)	$	–	$	6.58		20.85	%1	$	778		1.62	%2		1.62	%2		0.94	%2		1.73	%2		6	%
2018		7.46		0.09		(1.23	)		(1.14	)		(0.12	)		(0.72	)		(0.84	)		–		5.48		(15.94	)		3,016		1.89			1.89			0.89			1.28			13
2017		7.09		0.11		1.42			1.53			(0.15	)		(1.01	)		(1.16	)		–		7.46		22.21			1,112		2.79			2.79			0.89			1.43			16
2016		6.78		0.13		1.00			1.13			(0.13	)		(0.69	)		(0.82	)		–		7.09		16.70			823		3.30			3.30			0.93			1.81			21
2015		8.09		0.17		(0.62	)		(0.45	)		(0.16	)		(0.70	)		(0.86	)		–		6.78		(5.61	)		658		1.11			1.11			1.04			1.60			14
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
Royce Global Financial Services Fund–Service Class
2019†	$	8.18	$	0.05	$	1.28		$	1.33		$	–		$	–		$	–		$	–	$	9.51		16.26	%1	$	33,063		1.83	%2		1.82	%2		1.49	%2		1.17	%2		1	%
2018		10.57		0.07		(1.45	)		(1.38	)		(0.09	)		(0.92	)		(1.01	)		–		8.18		(13.41	)		32,113		1.68			1.68			1.49			0.61			8
2017		8.95		0.10		1.90			2.00			(0.23	)		(0.15	)		(0.38	)		–		10.57		22.46			47,197		1.68			1.68			1.49			0.83			19
2016		7.99		0.11		0.92			1.03			(0.05	)		(0.02	)		(0.07	)		–		8.95		12.93			43,629		1.67			1.67			1.49			1.25			37
2015		9.28		0.11		(0.55	)		(0.44	)		(0.11	)		(0.74	)		(0.85	)		–		7.99		(4.71	)		52,013		1.65			1.65			1.49			1.19			46
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

68 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated 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.

																														Ratio of Expenses to Average Net Assets
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and 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			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers, Expense Reimbursements and Balance Credits			Prior to Fee Waivers and Expense Reimbursements			Net of Fee Waivers and Expense Reimbursements			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Global Financial Services Fund–Institutional Class b
2019†	$	10.55	$	0.09		$	1.64		$	1.73		$	–		$	–		$	–		$	–	$	12.28		16.40	%1	$	6,308		1.55	%2		1.55	%2		1.18	%2		1.47	%2		1	%
2018		13.58		0.15			(1.85	)		(1.70	)		(0.14	)		(1.19	)		(1.33	)		–		10.55		(12.87	)		6,951		1.43			1.43			1.04			1.06			8
2017		11.43		0.15			2.47			2.62			(0.27	)		(0.20	)		(0.47	)		–		13.58		23.01			8,608		1.44			1.44			1.04			1.29			19
2016		10.00		0.18			1.36			1.54			(0.09	)		(0.02	)		(0.11	)		–		11.43		15.41	1		6,474		1.85	2		1.85	2		1.04	2		1.82	2		37
Royce International Premier Fund–Investment Class c
2019†	$	11.39	$	0.11		$	2.34		$	2.45		$	–		$	–		$	–		$	–	$	13.84		21.51	%1	$	374,281		1.20	%2		1.20	%2		1.13	%2		1.66	%2		14	%
2018		13.07		0.09			(1.72	)		(1.63	)		(0.05	)		–			(0.05	)		–		11.39		(12.45	)		285,065		1.27			1.26			1.16			1.00			65
2017		9.44		(0.10	)		3.88			3.78			(0.15	)		–			(0.15	)		–		13.07		40.08			103,032		1.37			1.37			1.19			0.32			41
2016		9.82		0.10			(0.19	)		(0.09	)		(0.28	)		(0.01	)		(0.29	)		–		9.44		(0.79	)		19,556		1.59			1.59			1.19			0.96			67
2015		8.71		0.16			1.27			1.43			(0.32	)		–			(0.32	)		–		9.82		16.42			3,623		2.80			2.80			1.38			1.72			67
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
2019†	$	13.61	$	0.11		$	2.80		$	2.91		$	–		$	–		$	–		$	–	$	16.52		21.38	%1	$	59,629		1.54	%2		1.54	%2		1.44	%2		1.47	%2		14	%
2018		15.60		0.11			(2.10	)		(1.99	)		–			–			–			–		13.61		(12.76	)		36,303		1.59			1.59			1.44			0.71			65
2017		11.24		0.05			4.42			4.47			(0.11	)		–			(0.11	)		–		15.60		39.81			48,642		1.65			1.65			1.44			0.28			41
2016		11.64		0.06			(0.19	)		(0.13	)		(0.26	)		(0.01	)		(0.27	)		–		11.24		(1.06	)		38,884		1.84			1.84			1.44			0.66			67
2015		10.28		(0.00	)		1.66			1.66			(0.30	)		–			(0.30	)		–		11.64		16.22			9,015		2.65			2.65			1.60			1.10			67
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
Royce International Premier Fund–Consultant Class d
2019†	$	14.71	$	0.05		$	3.03		$	3.08		$	–		$	–		$	–		$	–	$	17.79		20.94	%1	$	9,621		2.40	%2		2.40	%2		2.19	%2		0.60	%2		14	%
2018		16.99		(0.00	)		(2.28	)		(2.28	)		–			–			–			–		14.71		(13.42	)		8,546		2.33			2.32			2.19			(0.00	)		65
2017		12.27		(0.08	)		4.83			4.75			(0.03	)		–			(0.03	)		–		16.99		38.73			9,281		2.73			2.73			2.19			(0.52	)		41
2016		11.59		0.01			0.85			0.86			(0.17	)		(0.01	)		(0.18	)		–		12.27		7.49	1		5,086		2.70	2		2.70	2		2.19	2		(0.04	)2		67
Royce International Premier Fund–Institutional Class e
2019†	$	11.39	$	0.12		$	2.34		$	2.46		$	–		$	–		$	–		$	–	$	13.85		21.60	%1	$	162,002		1.16	%2		1.16	%2		1.04	%2		1.94	%2		14	%
2018		12.98		(0.00	)		(1.53	)		(1.53	)		(0.06	)		–			(0.06	)		–		11.39		(11.78	)1		32,340		1.34	2		1.34	2		1.04	2		0.84	2		65
Royce Low-Priced Stock Fund–Investment Class
2019†	$	6.37	$	(0.02	)	$	0.95		$	0.93		$	–		$	–		$	–		$	–	$	7.30		14.60	%1	$	50,439		1.42	%2		1.41	%2		1.24	%2		(0.45	)%2		8	%
2018		8.49		(0.02	)		(0.70	)		(0.72	)		–			(1.40	)		(1.40	)		–		6.37		(9.04	)		46,430		1.32			1.31			1.24			(0.27	)		58
2017		8.26		(0.00	)		0.80			0.80			(0.02	)		(0.55	)		(0.57	)		–		8.49		9.86			52,912		1.30			1.30			1.24			0.12			26
2016		7.77		0.04			1.24			1.28			(0.06	)		(0.73	)		(0.79	)		–		8.26		16.42			22,852		1.31			1.31			1.24			0.39			34
2015		9.46		0.00			(0.97	)		(0.97	)		–			(0.72	)		(0.72	)		–		7.77		(10.21	)		28,732		1.28			1.28			1.24			0.03			53
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

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 69

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated 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.

																														Ratio of Expenses to Average Net Assets
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and 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			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers, Expense Reimbursements and Balance Credits			Prior to Fee Waivers and Expense Reimbursements			Net of Fee Waivers and Expense Reimbursements			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Low-Priced Stock Fund–Service Class
2019†	$	6.33	$	(0.02	)	$	0.94		$	0.92		$	–		$	–		$	–		$	–	$	7.25		14.53	%1	$	162,939		1.65	%2		1.65	%2		1.49	%2		(0.70	)%2		8	%
2018		8.46		(0.04	)		(0.70	)		(0.74	)		–			(1.39	)		(1.39	)		–		6.33		(9.31	)		155,596		1.53			1.53			1.49			(0.49	)		58
2017		8.23		(0.01	)		0.79			0.78			–			(0.55	)		(0.55	)		–		8.46		9.67			209,369		1.52			1.52			1.49			(0.13	)		26
2016		7.75		0.02			1.23			1.25			(0.04	)		(0.73	)		(0.77	)		–		8.23		16.09			281,873		1.52			1.52			1.49			0.14			34
2015		9.46		(0.02	)		(0.97	)		(0.99	)		–			(0.72	)		(0.72	)		–		7.75		(10.42	)		316,475		1.49			1.49			1.47			(0.20	)		53
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
Royce Micro-Cap Fund–Investment Class
2019†	$	9.35	$	(0.03	)	$	1.02		$	0.99		$	–		$	–		$	–		$	–	$	10.34		10.59	%1	$	112,887		1.67	%2		1.66	%2		1.49	%2		(0.65	)%2		6	%
2018		11.64		(0.05	)		(0.94	)		(0.99	)		–			(1.30	)		(1.30	)		–		9.35		(8.94	)		117,040		1.50			1.50			1.49			(0.43	)		24
2017		11.92		(0.03	)		0.66			0.63			(0.01	)		(0.90	)		(0.91	)		–		11.64		5.43			166,935		1.51			1.51			1.49			(0.28	)		26
2016		11.09		0.01			2.18			2.19			(0.06	)		(1.30	)		(1.36	)		–		11.92		19.74			192,731		1.48			1.48			1.48			0.03			38
2015		14.47		0.02			(1.96	)		(1.94	)		–			(1.44	)		(1.44	)		–		11.09		(13.32	)		219,272		1.51			1.51			1.51			0.15			41
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
Royce Micro-Cap Fund–Service Class
2019†	$	9.15	$	(0.04	)	$	1.00		$	0.96		$	–		$	–		$	–		$	–	$	10.11		10.49	%1	$	6,010		2.21	%2		2.21	%2		1.61	%2		(0.80	)%2		6	%
2018		11.41		(0.07	)		(0.91	)		(0.98	)		–			(1.28	)		(1.28	)		–		9.15		(9.09	)		8,053		1.90			1.89			1.61			(0.56	)		24
2017		11.69		(0.05	)		0.65			0.60			–			(0.88	)		(0.88	)		–		11.41		5.32			13,880		1.86			1.86			1.61			(0.40	)		26
2016		10.90		(0.01	)		2.15			2.14			(0.05	)		(1.30	)		(1.35	)		–		11.69		19.59			17,343		1.83			1.83			1.61			(0.11	)		38
2015		14.26		0.00			(1.92	)		(1.92	)		–			(1.44	)		(1.44	)		–		10.90		(13.37	)		20,538		1.80			1.80			1.63			0.01			41
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
Royce Micro-Cap Fund–Consultant Class
2019†	$	7.23	$	(0.07	)	$	0.78		$	0.71		$	–		$	–		$	–		$	–	$	7.94		9.82	%1	$	16,420		2.74	%2		2.73	%2		2.73	%2		(1.90	)%2		6	%
2018		9.10		(0.14	)		(0.72	)		(0.86	)		–			(1.01	)		(1.01	)		–		7.23		(9.93	)		16,680		2.56			2.56			2.56			(1.50	)		24
2017		9.41		(0.13	)		0.53			0.40			–			(0.71	)		(0.71	)		–		9.10		4.35			24,396		2.54			2.54			2.54			(1.34	)		26
2016		9.04		(0.09	)		1.76			1.67			–			(1.30	)		(1.30	)		–		9.41		18.48			33,622		2.53			2.53			2.53			(1.02	)		38
2015		12.23		(0.10	)		(1.65	)		(1.75	)		–			(1.44	)		(1.44	)		–		9.04		(14.21	)		41,024		2.54			2.54			2.54			(0.90	)		41
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
Royce Opportunity Fund–Investment Class
2019†	$	9.92	$	(0.03	)	$	1.58		$	1.55		$	–		$	–		$	–		$	–	$	11.47		15.63	%1	$	607,775		1.24	%2		1.24	%2		1.24	%2		(0.49	)%2		22	%
2018		13.58		(0.04	)		(2.61	)		(2.65	)		–			(1.01	)		(1.01	)		–		9.92		(19.97	)		557,003		1.20			1.20			1.20			(0.30	)		47
2017		12.85		(0.04	)		2.79			2.75			–			(2.02	)		(2.02	)		–		13.58		21.88			805,660		1.18			1.18			1.18			(0.28	)		43
2016		10.57		(0.02	)		3.19			3.17			–			(0.89	)		(0.89	)		–		12.85		29.86			751,184		1.19			1.19			1.19			(0.18	)		26
2015		13.46		(0.03	)		(1.80	)		(1.83	)		–			(1.06	)		(1.06	)		–		10.57		(13.57	)		746,052		1.17			1.17			1.17			(0.27	)		27
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

70 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated 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.

																														Ratio of Expenses to Average Net Assets
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and 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			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers, Expense Reimbursements and Balance Credits			Prior to Fee Waivers and Expense Reimbursements			Net of Fee Waivers and Expense Reimbursements			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Opportunity Fund–Service Class
2019†	$	9.23	$	(0.04	)	$	1.46		$	1.42		$	–		$	–		$	–		$	–	$	10.65		15.38	%1	$	47,582		1.60	%2		1.60	%2		1.49	%2		(0.74	)%2		22	%
2018		12.66		(0.07	)		(2.42	)		(2.49	)		–			(0.94	)		(0.94	)		–		9.23		(20.14	)		48,797		1.52			1.52			1.49			(0.59	)		47
2017		12.02		(0.08	)		2.61			2.53			–			(1.89	)		(1.89	)		–		12.66		21.46			96,663		1.53			1.53			1.49			(0.61	)		43
2016		9.95		(0.05	)		3.01			2.96			–			(0.89	)		(0.89	)		–		12.02		29.61			73,517		1.53			1.53			1.49			(0.48	)		26
2015		12.80		(0.07	)		(1.72	)		(1.79	)		–			(1.06	)		(1.06	)		–		9.95		(13.96	)		100,918		1.49			1.49			1.49			(0.59	)		27
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
Royce Opportunity Fund–Consultant Class
2019†	$	8.09	$	(0.08	)	$	1.29		$	1.21		$	–		$	–		$	–		$	–	$	9.30		14.96	%1	$	9,034		2.44	%2		2.44	%2		2.44	%2		(1.69	)%2		22	%
2018		11.19		(0.16	)		(2.12	)		(2.28	)		–			(0.82	)		(0.82	)		–		8.09		(20.81	)		9,831		2.30			2.29			2.29			(1.39	)		47
2017		10.71		(0.16	)		2.31			2.15			–			(1.67	)		(1.67	)		–		11.19		20.50			20,574		2.27			2.27			2.27			(1.37	)		43
2016		9.01		(0.12	)		2.71			2.59			–			(0.89	)		(0.89	)		–		10.71		28.59			21,116		2.28			2.28			2.28			(1.27	)		26
2015		11.79		(0.15	)		(1.57	)		(1.72	)		–			(1.06	)		(1.06	)		–		9.01		(14.56	)		19,464		2.26			2.26			2.26			(1.34	)		27
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
Royce Opportunity Fund–Institutional Class
2019†	$	10.13	$	(0.02	)	$	1.61		$	1.59		$	–		$	–		$	–		$	–	$	11.72		15.70	%1	$	244,398		1.11	%2		1.11	%2		1.11	%2		(0.36	)%2		22	%
2018		13.84		(0.02	)		(2.66	)		(2.68	)		–			(1.03	)		(1.03	)		–		10.13		(19.83	)		227,261		1.08			1.08			1.08			(0.17	)		47
2017		13.08		(0.02	)		2.84			2.82			–			(2.06	)		(2.06	)		–		13.84		22.02			639,057		1.07			1.07			1.07			(0.17	)		43
2016		10.74		(0.01	)		3.24			3.23			–			(0.89	)		(0.89	)		–		13.08		29.94			583,975		1.07			1.07			1.07			(0.06	)		26
2015		13.64		(0.02	)		(1.82	)		(1.84	)		–			(1.06	)		(1.06	)		–		10.74		(13.46	)		600,945		1.05			1.05			1.05			(0.15	)		27
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
Royce Opportunity Fund–R Class
2019†	$	8.90	$	(0.06	)	$	1.41		$	1.35		$	–		$	–		$	–		$	–	$	10.25		15.17	%1	$	29,963		1.88	%2		1.88	%2		1.88	%2		(1.12	)%2		22	%
2018		12.25		(0.11	)		(2.33	)		(2.44	)		–			(0.91	)		(0.91	)		–		8.90		(20.42	)		26,337		1.84			1.84			1.84			(0.93	)		47
2017		11.67		(0.12	)		2.53			2.41			–			(1.83	)		(1.83	)		–		12.25		21.06			39,311		1.82			1.82			1.82			(0.92	)		43
2016		9.72		(0.08	)		2.92			2.84			–			(0.89	)		(0.89	)		–		11.67		29.08			38,902		1.82			1.82			1.82			(0.81	)		26
2015		12.56		(0.11	)		(1.67	)		(1.78	)		–			(1.06	)		(1.06	)		–		9.72		(14.15	)		32,599		1.82			1.82			1.82			(0.90	)		27
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
Royce Pennsylvania Mutual Fund–Investment Class
2019†	$	7.75	$	0.02		$	1.37		$	1.39		$	–		$	–		$	–		$	–	$	9.14		17.94	%1	$	1,429,923		0.95	%2		0.95	%2		0.95	%2		0.39	%2		13	%
2018		10.52		0.04			(0.97	)		(0.93	)		(0.02	)		(1.82	)		(1.84	)		–		7.75		(9.66	)		1,203,967		0.92			0.92			0.92			0.33			35
2017		11.02		0.06			1.68			1.74			(0.06	)		(2.18	)		(2.24	)		–		10.52		16.24			1,622,523		0.92			0.92			0.92			0.47			27
2016		9.33		0.07			2.41			2.48			(0.04	)		(0.75	)		(0.79	)		–		11.02		26.47			1,671,848		0.92			0.92			0.92			0.60			18
2015		13.00		0.09			(1.58	)		(1.49	)		(0.10	)		(2.08	)		(2.18	)		–		9.33		(11.43	)		1,925,419		0.92			0.92			0.92			0.58			21
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

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 71

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated 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.

																														Ratio of Expenses to Average Net Assets
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and 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			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers, Expense Reimbursements and Balance Credits			Prior to Fee Waivers and Expense Reimbursements			Net of Fee Waivers and Expense Reimbursements			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Pennsylvania Mutual Fund–Service Class
2019†	$	7.77	$	(0.00	)	$	1.35		$	1.35		$	–		$	–		$	–		$	–	$	9.12		17.37	%1	$	150,085		1.32	%2		1.32	%2		1.32	%2		(0.09	)%2		13	%
2018		10.56		(0.01	)		(0.96	)		(0.97	)		–			(1.82	)		(1.82	)		–		7.77		(9.96	)		32,191		1.30			1.30			1.30			(0.07	)		35
2017		11.03		0.01			1.69			1.70			–			(2.17	)		(2.17	)		–		10.56		15.88			54,938		1.27			1.27			1.27			0.07			27
2016		9.35		0.03			2.41			2.44			(0.01	)		(0.75	)		(0.76	)		–		11.03		25.99			100,598		1.26			1.26			1.26			0.27			18
2015		12.96		0.05			(1.56	)		(1.51	)		(0.02	)		(2.08	)		(2.10	)		–		9.35		(11.57	)		102,341		1.23			1.23			1.23			0.29			21
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
Royce Pennsylvania Mutual Fund–Consultant Class
2019†	$	6.18	$	(0.02	)	$	1.09		$	1.07		$	–		$	–		$	–		$	–	$	7.25		17.31	%1	$	275,503		1.96	%2		1.96	%2		1.96	%2		(0.61	)%2		13	%
2018		8.46		(0.06	)		(0.77	)		(0.83	)		–			(1.45	)		(1.45	)		–		6.18		(10.56	)		249,004		1.93			1.93			1.93			(0.69	)		35
2017		8.90		(0.05	)		1.35			1.30			–			(1.74	)		(1.74	)		–		8.46		15.06			361,569		1.93			1.92			1.92			(0.54	)		27
2016		7.70		(0.03	)		1.98			1.95			–			(0.75	)		(0.75	)		–		8.90		25.20			402,114		1.94			1.94			1.94			(0.42	)		18
2015		11.16		(0.05	)		(1.33	)		(1.38	)		–			(2.08	)		(2.08	)		–		7.70		(12.31	)		416,862		1.94			1.94			1.94			(0.44	)		21
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
Royce Pennsylvania Mutual Fund–Institutional Class
2019†	$	7.78	$	0.02		$	1.37		$	1.39		$	–		$	–		$	–		$	–	$	9.17		17.87	%1	$	97,578		0.88	%2		0.88	%2		0.88	%2		0.47	%2		13	%
2018		10.55		0.04			(0.97	)		(0.93	)		(0.02	)		(1.82	)		(1.84	)		–		7.78		(9.56	)		83,908		0.88			0.88			0.88			0.40			35
2017		11.04		0.09			1.67			1.76			(0.07	)		(2.18	)		(2.25	)		–		10.55		16.44			53,367		0.83			0.83			0.83			0.42			27
2016		9.34		0.09			2.41			2.50			(0.05	)		(0.75	)		(0.80	)		–		11.04		26.65			245,009		0.83			0.83			0.83			0.63			18
2015		13.02		0.11			(1.60	)		(1.49	)		(0.11	)		(2.08	)		(2.19	)		–		9.34		(11.34	)		498,374		0.81			0.81			0.81			0.68			21
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
Royce Pennsylvania Mutual Fund–R Class
2019†	$	7.30	$	(0.02	)	$	1.28		$	1.26		$	–		$	–		$	–		$	–	$	8.56		17.26	%1	$	9,749		1.76	%2		1.75	%2		1.75	%2		(0.42	)%2		13	%
2018		9.94		(0.03	)		(0.91	)		(0.94	)		–			(1.70	)		(1.70	)		–		7.30		(10.15	)		10,014		1.58			1.57			1.57			(0.34	)		35
2017		10.44		(0.04	)		1.58			1.54			–			(2.04	)		(2.04	)		–		9.94		15.25			15,136		1.73			1.73			1.73			(0.36	)		27
2016		8.90		(0.01	)		2.30			2.29			–			(0.75	)		(0.75	)		–		10.44		25.62			17,059		1.63			1.63			1.63			(0.11	)		18
2015		12.50		(0.02	)		(1.50	)		(1.52	)		–			(2.08	)		(2.08	)		–		8.90		(12.10	)		18,675		1.65			1.65			1.65			(0.15	)		21
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
Royce Premier Fund–Investment Class
2019†	$	11.62	$	0.01		$	2.52		$	2.53		$	–		$	–		$	–		$	–	$	14.15		21.77	%1	$	1,559,791		1.21	%2		1.21	%2		1.21	%2		0.13	%2		7	%
2018		16.60		0.02			(1.60	)		(1.58	)		(0.01	)		(3.39	)		(3.40	)		–		11.62		(10.40	)		1,398,965		1.17			1.17			1.17			0.11			23
2017		15.51		0.00			3.63			3.63			(0.02	)		(2.52	)		(2.54	)		–		16.60		23.77			1,978,847		1.16			1.16			1.16			0.00			8
2016		14.28		0.06			3.25			3.31			(0.04	)		(2.04	)		(2.08	)		–		15.51		23.00			1,768,580		1.16			1.16			1.16			0.35			15
2015		19.72		0.13			(2.11	)		(1.98	)		(0.13	)		(3.33	)		(3.46	)		–		14.28		(9.90	)		2,015,905		1.13			1.13			1.13			0.49			13
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

72 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated 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.

																														Ratio of Expenses to Average Net Assets
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and 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			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers, Expense Reimbursements and Balance Credits			Prior to Fee Waivers and Expense Reimbursements			Net of Fee Waivers and Expense Reimbursements			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Premier Fund–Service Class
2019†	$	11.31	$	(0.01	)	$	2.46		$	2.45		$	–		$	–		$	–		$	–	$	13.76		21.66	%1	$	42,552		1.57	%2		1.57	%2		1.49	%2		(0.16	)%2		7	%
2018		16.15		(0.03	)		(1.55	)		(1.58	)		–			(3.26	)		(3.26	)		–		11.31		(10.66	)		41,738		1.52			1.52			1.48			(0.19	)		23
2017		15.13		(0.06	)		3.53			3.47			–			(2.45	)		(2.45	)		–		16.15		23.32			54,557		1.53			1.53			1.49			(0.34	)		8
2016		13.98		0.00			3.19			3.19			–			(2.04	)		(2.04	)		–		15.13		22.63			46,550		1.50			1.50			1.49			0.02			15
2015		19.33		0.06			(2.04	)		(1.98	)		(0.04	)		(3.33	)		(3.37	)		–		13.98		(10.13	)		61,969		1.44			1.43			1.43			0.23			13
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
Royce Premier Fund–Consultant Class
2019†	$	9.17	$	(0.05	)	$	2.00		$	1.95		$	–		$	–		$	–		$	–	$	11.12		21.26	%1	$	23,322		2.26	%2		2.26	%2		2.26	%2		(0.92	)%2		7	%
2018		13.21		(0.12	)		(1.27	)		(1.39	)		–			(2.65	)		(2.65	)		–	��	9.17		(11.41	)		21,370		2.21			2.21			2.21			(0.93	)		23
2017		12.46		(0.14	)		2.89			2.75			–			(2.00	)		(2.00	)		–		13.21		22.49			31,489		2.21			2.21			2.21			(1.06	)		8
2016		11.89		(0.09	)		2.70			2.61			–			(2.04	)		(2.04	)		–		12.46		21.72			31,353		2.22			2.22			2.22			(0.72	)		15
2015		17.09		(0.09	)		(1.78	)		(1.87	)		–			(3.33	)		(3.33	)		–		11.89		(10.80	)		32,982		2.17			2.17			2.17			(0.55	)		13
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
Royce Premier Fund–Institutional Class
2019†	$	11.79	$	0.01		$	2.57		$	2.58		$	–		$	–		$	–		$	–	$	14.37		21.88	%1	$	226,798		1.15	%2		1.15	%2		1.15	%2		0.20	%2		7	%
2018		16.82		0.03			(1.63	)		(1.60	)		(0.02	)		(3.41	)		(3.43	)		–		11.79		(10.41	)		197,697		1.12			1.12			1.12			0.16			23
2017		15.72		0.01			3.68			3.69			(0.03	)		(2.56	)		(2.59	)		–		16.82		23.85			250,119		1.09			1.09			1.09			0.07			8
2016		14.44		0.08			3.30			3.38			(0.06	)		(2.04	)		(2.10	)		–		15.72		23.20			250,826		1.07			1.07			1.07			0.44			15
2015		19.91		0.16			(2.14	)		(1.98	)		(0.16	)		(3.33	)		(3.49	)		–		14.44		(9.82	)		294,477		1.02			1.02			1.02			0.60			13
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
Royce Premier Fund–R Class
2019†	$	10.73	$	(0.03	)	$	2.33		$	2.30		$	–		$	–		$	–		$	–	$	13.03		21.44	%1	$	11,253		1.91	%2		1.91	%2		1.91	%2		(0.56	)%2		7	%
2018		15.39		(0.08	)		(1.48	)		(1.56	)		–			(3.10	)		(3.10	)		–		10.73		(11.01	)		9,715		1.80			1.80			1.80			(0.52	)		23
2017		14.47		(0.12	)		3.37			3.25			–			(2.33	)		(2.33	)		–		15.39		22.88			12,841		1.90			1.90			1.90			(0.75	)		8
2016		13.49		(0.05	)		3.07			3.02			–			(2.04	)		(2.04	)		–		14.47		22.18			13,889		1.84			1.84			1.84			(0.33	)		15
2015		18.82		(0.03	)		(1.97	)		(2.00	)		–			(3.33	)		(3.33	)		–		13.49		(10.50	)		16,129		1.78			1.78			1.78			(0.16	)		13
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
Royce Small-Cap Value Fund–Investment Class
2019†	$	8.35	$	0.04		$	0.72		$	0.76		$	–		$	–		$	–		$	–	$	9.11		9.10	%1	$	55,789		1.30	%2		1.30	%2		1.24	%2		0.90	%2		38	%
2018		10.16		0.05			(0.73	)		(0.68	)		(0.04	)		(1.09	)		(1.13	)		–		8.35		(7.05	)	$	56,433		1.26			1.26			1.24			0.45			64
2017		10.03		0.04			0.50			0.54			(0.06	)		(0.35	)		(0.41	)		–		10.16		5.49			66,094		1.26			1.25			1.24			0.44			61
2016		8.74		0.08			1.79			1.87			(0.08	)		(0.50	)		(0.58	)		–		10.03		21.37			72,863		1.24			1.24			1.24			0.72			56
2015		11.81		0.10			(1.43	)		(1.33	)		(0.09	)		(1.65	)		(1.74	)		–		8.74		(11.25	)		77,821		1.23			1.23			1.23			0.69			60
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

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 73

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated 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.

																														Ratio of Expenses to Average Net Assets
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and 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			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers, Expense Reimbursements and Balance Credits			Prior to Fee Waivers and Expense Reimbursements			Net of Fee Waivers and Expense Reimbursements			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Small-Cap Value Fund–Service Class
2019†	$	8.33	$	0.03		$	0.71		$	0.74		$	–		$	–		$	–		$	–	$	9.07		8.88	%1	$	105,538		1.57	%2		1.57	%2		1.49	%2		0.65	%2		38	%
2018		10.12		0.02			(0.72	)		(0.70	)		(0.01	)		(1.08	)		(1.09	)		–		8.33		(7.17	)		111,855		1.53			1.53			1.49			0.19			64
2017		9.98		0.02			0.50			0.52			(0.03	)		(0.35	)		(0.38	)		–		10.12		5.27			152,232		1.51			1.51			1.49			0.17			61
2016		8.70		0.05			1.79			1.84			(0.06	)		(0.50	)		(0.56	)		–		9.98		21.06			213,067		1.49			1.49			1.48			0.48			56
2015		11.76		0.06			(1.41	)		(1.35	)		(0.06	)		(1.65	)		(1.71	)		–		8.70		(11.51	)		252,814		1.48			1.48			1.48			0.45			60
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
Royce Small-Cap Value Fund–Consultant Class
2019†	$	7.40	$	(0.01	)	$	0.64		$	0.63		$	–		$	–		$	–		$	–	$	8.03		8.51	%1	$	9,328		2.42	%2		2.42	%2		2.42	%2		(0.29	)%2		38	%
2018		9.06		(0.06	)		(0.64	)		(0.70	)		–			(0.96	)		(0.96	)		–		7.40		(8.07	)		9,641		2.35			2.34			2.34			(0.66	)		64
2017		8.98		(0.06	)		0.45			0.39			–			(0.31	)		(0.31	)		–		9.06		4.44			13,111		2.32			2.32			2.32			(0.66	)		61
2016		7.89		(0.03	)		1.62			1.59			–			(0.50	)		(0.50	)		–		8.98		20.10			16,484		2.28			2.28			2.28			(0.33	)		56
2015		10.87		(0.04	)		(1.29	)		(1.33	)		–			(1.65	)		(1.65	)		–		7.89		(12.24	)		18,404		2.27			2.27			2.27			(0.36	)		60
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
Royce Small-Cap Value Fund–R Class
2019†	$	8.00	$	0.01		$	0.68		$	0.69		$	–		$	–		$	–		$	–	$	8.69		8.63	%1	$	8,440		2.00	%2		1.99	%2		1.99	%2		0.15	%2		38	%
2018		9.75		(0.03	)		(0.68	)		(0.71	)		–			(1.04	)		(1.04	)		–		8.00		(7.62	)		8,254		1.92			1.92			1.92			(0.26	)		64
2017		9.63		(0.02	)		0.48			0.46			–			(0.34	)		(0.34	)		–		9.75		4.81			14,620		1.88			1.88			1.88			(0.21	)		61
2016		8.42		0.01			1.73			1.74			(0.03	)		(0.50	)		(0.53	)		–		9.63		20.60			18,059		1.85			1.85			1.85			0.11			56
2015		11.43		0.01			(1.35	)		(1.34	)		(0.02	)		(1.65	)		(1.67	)		–		8.42		(11.71	)		19,200		1.83			1.83			1.83			0.09			60
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
Royce Smaller-Companies Growth Fund–Investment Class
2019†	$	6.86	$	(0.03	)	$	1.48		$	1.45		$	–		$	–		$	–		$	–	$	8.31		21.14	%1	$	98,628		1.24	%2		1.23	%2		1.22	%2		(0.72	)%2		32	%
2018		10.93		(0.07	)		(0.86	)		(0.93	)		–			(3.14	)		(3.14	)		–		6.86		(9.94	)		87,213		1.21			1.21			1.21			(0.62	)		61
2017		11.22		(0.09	)		2.08			1.99			–			(2.28	)		(2.28	)		–		10.93		18.20			119,745		1.19			1.19			1.19			(0.67	)		64
2016		11.36		(0.05	)		1.17			1.12			–			(1.26	)		(1.26	)		–		11.22		9.67			98,962		1.15			1.15			1.15			(0.41	)		59
2015		14.36		(0.06	)		(0.19	)		(0.25	)		–			(2.75	)		(2.75	)		–		11.36		(1.59	)		139,979		1.32			1.32			1.24			(0.38	)		45
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
Royce Smaller-Companies Growth Fund–Service Class
2019†	$	6.69	$	(0.04	)	$	1.45		$	1.41		$	–		$	–		$	–		$	–	$	8.10		21.08	%1	$	173,068		1.57	%2		1.57	%2		1.49	%2		(0.99	)%2		32	%
2018		10.69		(0.10	)		(0.85	)		(0.95	)		–			(3.05	)		(3.05	)		–		6.69		(10.22	)		156,057		1.52			1.52			1.49			(0.90	)		61
2017		11.01		(0.12	)		2.03			1.91			–			(2.23	)		(2.23	)		–		10.69		17.80			228,008		1.49			1.49			1.47			(0.96	)		64
2016		11.20		(0.08	)		1.15			1.07			–			(1.26	)		(1.26	)		–		11.01		9.37			284,640		1.51			1.51			1.49			(0.74	)		59
2015		14.23		(0.08	)		(0.20	)		(0.28	)		–			(2.75	)		(2.75	)		–		11.20		(1.82	)		408,744		1.47			1.47			1.45			(0.58	)		45
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

74 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated 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.

																														Ratio of Expenses to Average Net Assets
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and 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			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers, Expense Reimbursements and Balance Credits			Prior to Fee Waivers and Expense Reimbursements			Net of Fee Waivers and Expense Reimbursements			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Smaller-Companies Growth Fund–Consultant Class
2019†	$	5.74	$	(0.06	)	$	1.24		$	1.18		$	–		$	–		$	–		$	–	$	6.92		20.56	%1	$	6,801		2.52	%2		2.51	%2		2.24	%2		(1.74	)%2		32	%
2018		9.28		(0.16	)		(0.72	)		(0.88	)		–			(2.66	)		(2.66	)		–		5.74		(10.95	)		6,328		2.40			2.40			2.24			(1.66	)		61
2017		9.63		(0.18	)		1.77			1.59			–			(1.94	)		(1.94	)		–		9.28		16.92			10,119		2.36			2.36			2.24			(1.73	)		64
2016		10.01		(0.14	)		1.02			0.88			–			(1.26	)		(1.26	)		–		9.63		8.58			10,593		2.35			2.35			2.24			(1.50	)		59
2015		13.12		(0.18	)		(0.18	)		(0.36	)		–			(2.75	)		(2.75	)		–		10.01		(2.61	)		14,411		2.32			2.32			2.24			(1.36	)		45
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
Royce Smaller-Companies Growth Fund–Institutional Class
2019†	$	6.95	$	(0.02	)	$	1.50		$	1.48		$	–		$	–		$	–		$	–	$	8.43		21.29	%1	$	8,411		1.34	%2		1.34	%2		1.13	%2		(0.62	)%2		32	%
2018		11.06		(0.06	)		(0.88	)		(0.94	)		–			(3.17	)		(3.17	)		–		6.95		(9.94	)		7,165		1.28			1.28			1.08			(0.49	)		61
2017		11.35		(0.09	)		2.11			2.02			–			(2.31	)		(2.31	)		–		11.06		18.23			9,315		1.21			1.21			1.21			(0.70	)		64
2016		11.48		(0.05	)		1.18			1.13			–			(1.26	)		(1.26	)		–		11.35		9.66			20,523		1.15			1.15			1.15			(0.41	)		59
2015		14.46		(0.03	)		(0.20	)		(0.23	)		–			(2.75	)		(2.75	)		–		11.48		(1.45	)		39,763		1.10			1.10			1.10			(0.22	)		45
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
Royce Special Equity Fund–Investment Class
2019†	$	17.43	$	0.09		$	0.71		$	0.80		$	–		$	–		$	–		$	–	$	18.23		4.59	%1	$	899,183		1.21	%2		1.21	%2		1.21	%2		0.94	%2		8	%
2018		21.79		0.23			(2.31	)		(2.08	)		(0.22	)		(2.06	)		(2.28	)		–		17.43		(9.86	)		909,113		1.18			1.18			1.18			1.04			21
2017		22.02		0.13			1.56			1.69			(0.12	)		(1.80	)		(1.92	)		–		21.79		7.87			1,142,224		1.17			1.17			1.17			0.54			15
2016		17.94		0.21			5.57			5.78			(0.21	)		(1.49	)		(1.70	)		–		22.02		32.21			1,225,095		1.17			1.17			1.17			0.99			29
2015		22.86		0.22			(3.04	)		(2.82	)		(0.24	)		(1.86	)		(2.10	)		–		17.94		(12.36	)		1,098,106		1.15			1.15			1.15			0.80			15
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
Royce Special Equity Fund–Service Class
2019†	$	17.41	$	0.07		$	0.72		$	0.79		$	–		$	–		$	–		$	–	$	18.20		4.54	%1	$	59,871		1.55	%2		1.55	%2		1.39	%2		0.77	%2		8	%
2018		21.76		0.20			(2.33	)		(2.13	)		(0.18	)		(2.04	)		(2.22	)		–		17.41		(10.13	)		62,706		1.51			1.50			1.39			0.88			21
2017		21.98		0.08			1.56			1.64			(0.07	)		(1.79	)		(1.86	)		–		21.76		7.66			108,001		1.50			1.50			1.39			0.32			15
2016		17.92		0.16			5.56			5.72			(0.17	)		(1.49	)		(1.66	)		–		21.98		31.92			128,102		1.50			1.50			1.39			0.77			29
2015		22.81		0.17			(3.03	)		(2.86	)		(0.17	)		(1.86	)		(2.03	)		–		17.92		(12.55	)		112,315		1.47			1.47			1.39			0.57			15
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
Royce Special Equity Fund–Consultant Class
2019†	$	15.90	$	(0.01	)	$	0.66		$	0.65		$	–		$	–		$	–		$	–	$	16.55		4.09	%1	$	28,087		2.25	%2		2.25	%2		2.25	%2		(0.10	)%2		8	%
2018		19.86		0.01			(2.10	)		(2.09	)		(0.01	)		(1.86	)		(1.87	)		–		15.90		(10.83	)		30,234		2.19			2.19			2.19			0.04			21
2017		20.16		(0.10	)		1.43			1.33			–			(1.63	)		(1.63	)		–		19.86		6.77			46,654		2.21			2.20			2.20			(0.49	)		15
2016		16.57		(0.01	)		5.13			5.12			(0.04	)		(1.49	)		(1.53	)		–		20.16		30.91			50,514		2.20			2.20			2.20			(0.04	)		29
2015		21.27		(0.05	)		(2.76	)		(2.81	)		(0.03	)		(1.86	)		(1.89	)		–		16.57		(13.23	)		42,427		2.18			2.18			2.18			(0.24	)		15
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

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 75

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated 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.

																														Ratio of Expenses to Average Net Assets
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and 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			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers, Expense Reimbursements and Balance Credits			Prior to Fee Waivers and Expense Reimbursements			Net of Fee Waivers and Expense Reimbursements			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Special Equity Fund–Institutional Class
2019†	$	17.28	$	0.09		$	0.71		$	0.80		$	–		$	–		$	–		$	–	$	18.08		4.63	%1	$	222,506		1.13	%2		1.12	%2		1.12	%2		1.04	%2		8	%
2018		21.61		0.25			(2.30	)		(2.05	)		(0.24	)		(2.04	)		(2.28	)		–		17.28		(9.81	)		202,317		1.11			1.11			1.11			1.14			21
2017		21.84		0.14			1.55			1.69			(0.14	)		(1.78	)		(1.92	)		–		21.61		7.96			247,004		1.09			1.09			1.09			0.60			15
2016		17.80		0.23			5.53			5.76			(0.23	)		(1.49	)		(1.72	)		–		21.84		32.35			206,270		1.07			1.07			1.07			1.10			29
2015		22.71		0.33			(3.12	)		(2.79	)		(0.26	)		(1.86	)		(2.12	)		–		17.80		(12.27	)		208,952		1.04			1.04			1.04			1.02			15
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
Royce Total Return Fund–Investment Class
2019†	$	9.71	$	0.08		$	1.41		$	1.49		$	(0.08	)	$	–		$	(0.08	)	$	–	$	11.12		15.32	%1	$	1,051,107		1.23	%2		1.23	%2		1.23	%2		1.46	%2		7	%
2018		13.58		0.20			(1.78	)		(1.58	)		(0.19	)		(2.10	)		(2.29	)		–		9.71		(12.46	)		1,036,211		1.18			1.18			1.18			1.45			22
2017		13.68		0.14			1.67			1.81			(0.12	)		(1.79	)		(1.91	)		–		13.58		13.65			1,550,893		1.19			1.19			1.19			1.00			12
2016		11.91		0.15			2.93			3.08			(0.22	)		(1.09	)		(1.31	)		–		13.68		25.86			1,835,927		1.19			1.19			1.19			1.08			16
2015		14.74		0.17			(1.23	)		(1.06	)		(0.12	)		(1.65	)		(1.77	)		–		11.91		(7.19	)		1,850,309		1.15			1.15			1.15			1.18			11
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
Royce Total Return Fund–Service Class
2019†	$	9.97	$	0.07		$	1.44		$	1.51		$	(0.06	)	$	–		$	(0.06	)	$	–	$	11.42		15.17	%1	$	81,604		1.57	%2		1.57	%2		1.49	%2		1.19	%2		7	%
2018		13.88		0.16			(1.82	)		(1.66	)		(0.11	)		(2.14	)		(2.25	)		–		9.97		(12.71	)		83,368		1.52			1.52			1.48			1.15			22
2017		13.98		0.10			1.69			1.79			(0.07	)		(1.82	)		(1.89	)		–		13.88		13.24			97,854		1.49			1.48			1.48			0.72			12
2016		12.12		0.11			3.00			3.11			(0.16	)		(1.09	)		(1.25	)		–		13.98		25.60			142,606		1.46			1.46			1.46			0.80			16
2015		14.98		0.13			(1.25	)		(1.12	)		(0.09	)		(1.65	)		(1.74	)		–		12.12		(7.48	)		137,594		1.43			1.43			1.43			0.90			11
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
Royce Total Return Fund–Consultant Class
2019†	$	10.02	$	0.03		$	1.45		$	1.48		$	(0.02	)	$	–		$	(0.02	)	$	–	$	11.48		14.73	%1	$	160,493		2.22	%2		2.21	%2		2.21	%2		0.48	%2		7	%
2018		13.95		0.06			(1.82	)		(1.76	)		(0.02	)		(2.15	)		(2.17	)		–		10.02		(13.26	)		160,540		2.17			2.17			2.17			0.45			22
2017		14.07		0.01			1.70			1.71			–			(1.83	)		(1.83	)		–		13.95		12.53			247,914		2.16			2.16			2.16			0.04			12
2016		12.15		0.01			3.01			3.02			(0.01	)		(1.09	)		(1.10	)		–		14.07		24.73			267,083		2.16			2.16			2.16			0.11			16
2015		15.05		0.03			(1.26	)		(1.23	)		(0.02	)		(1.65	)		(1.67	)		–		12.15		(8.15	)		262,131		2.16			2.16			2.16			0.18			11
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
Royce Total Return Fund–Institutional Class
2019†	$	9.58	$	0.08		$	1.40		$	1.48		$	(0.09	)	$	–		$	(0.09	)	$	–	$	10.97		15.43	%1	$	227,958		1.13	%2		1.13	%2		1.13	%2		1.55	%2		7	%
2018		13.40		0.21			(1.76	)		(1.55	)		(0.21	)		(2.06	)		(2.27	)		–		9.58		(12.39	)		218,268		1.09			1.09			1.09			1.53			22
2017		13.52		0.16			1.64			1.80			(0.15	)		(1.77	)		(1.92	)		–		13.40		13.80			310,603		1.06			1.06			1.06			1.13			12
2016		11.78		0.18			2.90			3.08			(0.25	)		(1.09	)		(1.34	)		–		13.52		26.13			420,375		1.05			1.05			1.05			1.22			16
2015		14.61		0.18			(1.22	)		(1.04	)		(0.14	)		(1.65	)		(1.79	)		–		11.78		(7.17	)		374,555		1.03			1.03			1.03			1.28			11
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

76 | The Royce Funds 2019 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated 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.

																													Ratio of Expenses to Average Net Assets
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)		Net Realized and 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			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers, Expense Reimbursements and Balance Credits			Prior to Fee Waivers and Expense Reimbursements			Net of Fee Waivers and Expense Reimbursements			Ratio of Net Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Total Return Fund–R Class
2019†	$	10.06	$	0.05	$	1.45		$	1.50		$	(0.04	)	$	–		$	(0.04	)	$	–	$	11.52		14.87	%1	$	36,621		1.88	%2		1.88	%2		1.88	%2		0.78	%2		7	%
2018		13.99		0.11		(1.83	)		(1.72	)		(0.06	)		(2.15	)		(2.21	)		–		10.06		(12.96	)		45,145		1.81			1.81			1.81			0.82			22
2017		14.09		0.06		1.71			1.77			(0.03	)		(1.84	)		(1.87	)		–		13.99		12.97			54,979		1.80			1.80			1.80			0.40			12
2016		12.19		0.07		3.00			3.07			(0.08	)		(1.09	)		(1.17	)		–		14.09		25.14			53,896		1.78			1.78			1.78			0.49			16
2015		15.07		0.08		(1.25	)		(1.17	)		(0.06	)		(1.65	)		(1.71	)		–		12.19		(7.79	)		50,684		1.77			1.77			1.77			0.56			11
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

^† Six months ended June 30, 2019 (unaudited).

¹ Not annualized

² Annualized

^a The Class commenced operations on March 21, 2014.

^b The Class commenced operations on January 5, 2016.

^c The Class commenced operations on January 22, 2014.

^d The Class commenced operations on February 26, 2016.

^e The Class commenced operations on May 2, 2018.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2019 Semiannual Report to Shareholders | 77

Notes to Financial Statements (unaudited)

Summary of Significant Accounting Policies:

Royce Dividend Value Fund, Royce Global Financial Services Fund, Royce International Premier Fund, Royce Low-Priced Stock Fund, Royce Micro-Cap Fund, Royce Opportunity Fund, Royce Pennsylvania Mutual Fund, Royce Premier Fund, Royce Small-Cap Value Fund, Royce Smaller-Companies Growth Fund, Royce Special Equity Fund and Royce Total Return Fund (the “Fund” or “Funds”), are the twelve series of The Royce Fund (the “Trust”), an open-end management investment company organized as a Delaware statutory trust.

Classes of shares have equal rights as to earnings and assets, except that each class may bear different fees and expenses for distribution, shareholder servicing, registration 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.

Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 “Financial Services-Investment Companies”.

At June 30, 2019, officers, employees of Royce & Associates (“Royce”), Fund trustees, the Royce retirement plans and other affiliates owned more than 10% of the following Funds:

Royce Global Financial Services Fund 10%

VALUATION OF INVESTMENTS:

Securities are valued as of the close of trading on the New York Stock Exchange (NYSE) (generally 4:00 p.m. Eastern time) on the valuation date. Securities that trade on an exchange, and securities traded on Nasdaq’s Electronic Bulletin Board, are valued at their last reported sales price or Nasdaq official closing price taken from the primary market in which each security trades or, if no sale is reported for such day, at their highest bid price. Other over-the-counter securities for which market quotations are readily available are valued at their highest bid price, except in the case of some bonds and other fixed income securities which may be valued by reference to other securities with comparable ratings, interest rates and maturities, using established independent pricing services. The Funds value their non-U.S. dollar denominated securities in U.S. dollars daily at the prevailing foreign currency exchange rates as quoted by a major bank. Securities for which market quotations are not readily available are valued at their fair value in accordance with the provisions of the 1940 Act, under procedures approved by the Trust’s Board of Trustees, and are reported as Level 3 securities. As a general principle, the fair value of a security is the amount which the Fund might reasonably expect to receive for the security upon its current sale. However, in light of the judgment involved in fair valuations, there can be no assurance that a fair value assigned to a particular security will be the amount which the Fund might be able to receive upon its current sale. In addition, if, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and may make the closing price unreliable, a Fund may fair value the security. The Funds use an independent pricing service to provide fair value estimates for relevant non-U.S. equity securities on days when the U.S. market volatility exceeds a certain threshold. This pricing service uses proprietary correlations it has developed between the movement of prices of non-U.S. equity securities and indices of U.S.-traded securities, futures contracts and other indications to estimate the fair value of relevant non-U.S. securities. When fair value pricing is employed, the prices of securities used by a Fund may differ from quoted or published prices for the same security. Investments in money market funds are valued at net asset value per share.

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.

78 | The Royce Funds 2019 Semiannual Report to Shareholders

VALUATION OF INVESTMENTS (continued):

The following is a summary of the inputs used to value each Fund’s investments as of June 30, 2019. For a detailed breakout of common stocks by sector classification or country, please refer to the Schedules of Investments.

	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Royce Dividend Value Fund
Common Stocks	$	108,278,909	$	–	$	–	$	108,278,909
Repurchase Agreement		–		1,286,000		–		1,286,000
Royce Global Financial Services Fund
Common Stocks		38,117,548		–		–		38,117,548
Repurchase Agreement		–		1,238,000		–		1,238,000
Royce International Premier Fund
Common Stocks		569,919,338		–		–		569,919,338
Preferred Stocks		12,975,905		–		–		12,975,905
Repurchase Agreement		–		29,373,000		–		29,373,000
Royce Low-Priced Stock Fund
Common Stocks		196,469,904		969,030		0		197,438,934
Repurchase Agreement		–		14,612,000		–		14,612,000
Money Market Fund/Collateral Received for Securities Loaned		1,601,437		–		–		1,601,437
Royce Micro-Cap Fund
Common Stocks		131,256,372		–		828,000		132,084,372
Repurchase Agreement		–		3,919,000		–		3,919,000
Money Market Fund/Collateral Received for Securities Loaned		1,260,590		–		–		1,260,590
Royce Opportunity Fund
Common Stocks		857,169,629		1,992,351		–		859,161,980
Repurchase Agreement		–		79,839,000		–		79,839,000
Money Market Fund/Collateral Received for Securities Loaned		28,337,338		–		–		28,337,338
Royce Pennsylvania Mutual Fund
Common Stocks		1,870,564,873		22,140		0		1,870,587,013
Repurchase Agreement		–		95,118,000		–		95,118,000
Money Market Fund/Collateral Received for Securities Loaned		6,580,014		–		–		6,580,014
Royce Premier Fund
Common Stocks		1,701,563,860		–		–		1,701,563,860
Repurchase Agreement		–		158,694,000		–		158,694,000
Royce Small-Cap Value Fund
Common Stocks		166,982,609		–		–		166,982,609
Repurchase Agreement		–		11,918,000		–		11,918,000
Royce Smaller-Companies Growth Fund
Common Stocks		269,005,531		1,221,000		–		270,226,531
Repurchase Agreement		–		19,267,000		–		19,267,000
Money Market Fund/Collateral Received for Securities Loaned		11,043,679		–		–		11,043,679
Royce Special Equity Fund
Common Stocks		899,061,901		59,040,000		–		958,101,901
Repurchase Agreement		–		251,964,000		–		251,964,000
Royce Total Return Fund		��
Common Stocks		1,514,268,933		12,445,978		0		1,526,714,911
Corporate Bonds		–		4,712,304		–		4,712,304
Repurchase Agreement		–		24,772,000		–		24,772,000

Level 3 Reconciliation:

REALIZED

UNREALIZED

BALANCE AS OF 12/31/18

PURCHASES

SALES

GAIN (LOSS)

GAIN (LOSS)1

BALANCE AS OF 6/30/19

Royce Low-Priced Stock Fund

Common Stocks

$

0

$

–

$

–

$

–

$

–

$

0

Royce Micro-Cap Fund

Common Stocks

828,000

–

–

–

–

828,000

Royce Pennsylvania Mutual Fund

Common Stocks

–

0

–

–

–

0

Royce Total Return Fund

Common Stocks

0

–

–

–

–

0

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.

The Royce Funds 2019 Semiannual Report to Shareholders | 79

Notes to Financial Statements (unaudited) (continued)

VALUATION OF INVESTMENTS (continued):

The following table summarizes the valuation techniques used and unobservable inputs approved by the Valuation Committee to determine the fair value of certain 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
	6/30/19	VALUATION TECHNIQUE(S)	UNOBSERVABLE INPUT(S)	RANGE AVERAGE	AN INCREASE IN INPUT1
Royce Micro-Cap Fund
Common Stocks	$828,000	Discounted Present Value Balance Sheet Analysis	Liquidity Discount	30%-40%	Decrease

¹ This column represents the directional change in the fair value of the Level 3 investments that would result in an increase from the corresponding unobservable input. A decrease to the unobservable input would have the opposite effect. Significant increases and decreases in these unobservable inputs in isolation could result in significantly higher or lower fair value measurements.

REPURCHASE AGREEMENTS:

The Funds may enter into repurchase agreements with institutions that the Funds’ investment adviser has determined are creditworthy. Each Fund restricts repurchase agreements to maturities of no more than seven days. Securities pledged as collateral for repurchase agreements, which are held until maturity of the repurchase agreements, are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). Repurchase agreements could involve certain risks in the event of default or insolvency of the counter-party, including possible delays or restrictions upon the ability of each Fund to dispose of its underlying securities. The remaining contractual maturities of repurchase agreements held by the Funds at June 30, 2019 are overnight and continuous.

FOREIGN CURRENCY:

Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, expiration of currency forward contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on each Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, other than investments in securities at the end of the reporting period, as a result of changes in foreign currency exchange rates.

The Funds do not isolate that portion of the results of operations resulting from fluctuations in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

SECURITIES LENDING:

The Funds loan securities through a lending agent to qualified institutional investors for the purpose of realizing additional income. Collateral for the Funds on all securities loaned is accepted in cash and cash equivalents, which are invested temporarily by the custodian, as well as non-cash collateral, which includes short and long-term U.S. Treasuries. The collateral maintained is at least 100% of the current market value of the loaned securities. The market value of the loaned securities is determined at the close of business of the Funds and any additional required collateral is delivered to the Funds on the next business day. The Funds retain the risk of any loss on the securities on loan as well as incurring the potential loss on investments purchased with cash collateral received for securities lending. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. If the borrower fails to return loaned securities, and cash collateral being maintained by the borrower is insufficient to cover the value of loaned securities and provided such collateral insufficiency is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Funds or, at the option of the lending agent, to replace the securities. In the event of the bankruptcy of the borrower, the Funds could experience delay in recovering the loaned securities or only recover cash or a security of equivalent value. Loans of securities generally do not have stated maturity dates, and the Funds may recall a security at any time. The Funds’ securities lending income consists of the income earned on investing cash collateral, plus any premium payments received for lending certain securities, less any rebates paid to borrowers and lending agent fees associated with the loan. The lending agent is not affiliated with Royce. The following table presents cash collateral and the market value of securities on loan collateralized by cash collateral held by the Funds at June 30, 2019:

	CASH COLLATERAL1		SECURITIES ON LOAN COLLATERALIZED BY CASH COLLATERAL		NET AMOUNT
Royce Low-Priced Stock Fund	$	1,601,437	$	(1,598,444)	$	2,993
Royce Micro-Cap Fund		1,260,590		(1,190,465)		70,125
Royce Opportunity Fund		28,337,338		(27,526,906)		810,432
Royce Pennsylvania Mutual Fund		6,580,014		(6,645,048)		(65,034)
Royce Smaller-Companies Growth Fund		11,043,679		(11,147,221)		(103,542)

¹ Absent an event of default, assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities. The remaining contractual maturity of cash collateral is overnight and continuous.

80 | The Royce Funds 2019 Semiannual Report to Shareholders

SECURITIES LENDING (continued):

The following table presents non-cash collateral and the market value of securities on loan collateralized by non-cash collateral held by the Funds’ custodian at June 30, 2019:

			SECURITIES ON LOAN
	NON-CASH COLLATERAL		COLLATERALIZED BY NON-CASH COLLATERAL		NET AMOUNT
Royce Low-Priced Stock Fund	$	8,363,068	$	(8,183,642)	$	179,426
Royce Micro-Cap Fund		982,284		(962,926)		19,358
Royce Opportunity Fund		54,405,031		(53,265,576)		1,139,455
Royce Pennsylvania Mutual Fund		37,298,730		(36,538,750)		759,980
Royce Premier Fund		32,914,911		(32,262,973)		651,938
Royce Small-Cap Value Fund		216,024		(211,745)		4,279
Royce Smaller-Companies Growth Fund		23,037,821		(22,564,637)		473,184

DISTRIBUTIONS AND TAXES:

As qualified regulated investment companies under Subchapter M of the Internal Revenue Code, the Funds are not subject to income taxes to the extent that each Fund distributes substantially all of its taxable income for its fiscal year.

Royce Dividend Value Fund and Royce Total Return Fund pay any dividends from net investment income quarterly and make any distributions from net realized gains annually in December. The other Funds pay any dividends and capital gain distributions annually in December. Dividends from net investment income and distributions from capital gains are determined at a class level. Because federal income tax regulations differ from generally accepted accounting principles, income and capital gain distributions determined in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Accordingly, the character of distributions and composition of net assets for tax purposes differ from those reflected in the accompanying financial statements.

CAPITAL GAINS TAXES:

The Funds are subject to a tax imposed on short-term capital gains on securities of issuers domiciled in certain countries. The Funds record an estimated deferred tax liability for gains in these securities that have been held for less than one year. This amount, if any, is reported as deferred capital gains tax in the accompanying Statements of Assets and Liabilities, assuming those positions were disposed of at the end of the period, and accounted for as a reduction in the market value of the security.

INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME:

Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Non-cash dividend income is recorded at the fair market value of the securities received. Interest income is recorded on an accrual basis. Premiums and discounts on debt securities are amortized using the effective yield-to-maturity method. Realized gains and losses from investment transactions are determined on the basis of identified cost for book and tax purposes.

EXPENSES:

The Funds incur direct and indirect expenses. Expenses directly attributable to a Fund are charged to the Fund’s operations, while expenses applicable to more than one of the Royce Funds are allocated equitably. Certain personnel, occupancy costs and other administrative expenses related to the Funds are allocated by Royce under an administration agreement and are included in administrative and office facilities and legal expenses. The Trust has adopted a deferred fee agreement that allows the Trustees to defer the receipt of all or a portion of trustees’ fees otherwise payable. The deferred fees are invested in certain Royce Funds until distributed in accordance with the agreement.

COMPENSATING BALANCE CREDITS:

The Funds have arrangements with their custodian bank and transfer agent, whereby a portion of the custodian’s fee and transfer agent’s fee is paid indirectly by credits earned on a Fund’s cash on deposit with the bank and transfer agent. These deposit arrangements are an alternative to purchasing overnight investments. Conversely, a Fund pays interest to the custodian on any cash overdrafts, to the extent they are not offset by credits earned on positive cash balances.

LINE OF CREDIT:

The Funds, along with certain other Royce Funds, participate in a $65 million line of credit (“Credit Agreement”) with State Street Bank and Trust Company to be used for temporary or emergency purposes. This revolving Credit Agreement expires on October 11, 2019. Pursuant to the Credit Agreement, each participating Fund is liable for a portion of the commitment fee for the credit facility and for principal and interest payments related to borrowings made by that Fund. Borrowings under the Credit Agreement bear interest at a rate equal to the higher of the federal funds rate or One-Month LIBOR rate, plus 1.25%. The Funds did not utilize the line of credit during the six months ended June 30, 2019.

The Royce Funds 2019 Semiannual Report to Shareholders | 81

Notes to Financial Statements (unaudited) (continued)

Capital Share Transactions (in dollars):

					SHARES ISSUED FOR
					REINVESTMENT															NET INCREASE (DECREASE) FROM
	SHARES SOLD				OF DISTRIBUTIONS				SHARES REDEEMED						SHARE CLASS CONVERSIONS					CAPITAL SHARE TRANSACTIONS
	Six Months				Six Months				Six Months						Six Months					Six Months
	Ended 6/30/19		Period Ended		Ended 6/30/19		Period Ended		Ended 6/30/19			Period Ended			Ended 6/30/19		Period Ended			Ended 6/30/19			Period Ended
	(unaudited)		12/31/18		(unaudited)		12/31/18		(unaudited)			12/31/18			(unaudited)		12/31/181			(unaudited)			12/31/18
Royce Dividend Value Fund
Investment Class	$	10,715,755	$	25,972,222	$	437,325	$	11,367,989	$	(35,421,429	)	$	(39,214,752	)						$	(24,268,349	)	$	(1,874,541	)
Service Class		304,161		1,385,407		91,815		3,493,185		(6,828,987	)		(26,337,495	)							(6,433,011	)		(21,458,903	)
Consultant Class		60,887		493,061		1,822		114,313		(128,442	)		(460,688	)							(65,733	)		146,686
Institutional Class		35,315		2,912,358		11,171		380,526		(2,711,591	)		(420,544	)							(2,665,105	)		2,872,340
Royce Global Financial Services Fund
Service Class		2,823,122		11,314,172		–		3,421,029		(6,860,587	)		(20,910,539	)							(4,037,465	)		(6,175,338	)
Institutional Class		–		4,000		–		783,011		(1,686,897	)		(660,685	)							(1,686,897	)		126,326
Royce International Premier Fund
Investment Class		113,005,289		285,246,637		–		848,230		(86,645,003	)		(72,123,146	)							26,360,286			213,971,721
Service Class		20,558,785		21,039,927		–		–		(6,584,049	)		(28,042,214	)			$	15,088			13,974,736			(6,987,199	)
Consultant Class		614,879		3,320,267		–		–		(1,268,401	)		(2,706,865	)							(653,522	)		613,402
Institutional Class		120,164,804		35,603,235		–		62,839		(4,035,007	)		(922,139	)							116,129,797			34,743,935
R Class				200				–					(57,682	)				(15,088	)					(72,570	)
Royce Low-Priced Stock Fund
Investment Class		1,487,833		5,908,132		–		8,242,747		(4,141,089	)		(11,942,721	)				5,064,654			(2,653,256	)		7,272,812
Service Class		1,071,925		5,416,151		–		27,201,978		(15,826,459	)		(43,586,859	)				293,550			(14,754,534	)		(10,675,180	)
Institutional Class				247,714				–					(1,034,576	)				(5,064,654	)					(5,851,516	)
R Class				15,465				–					(766,305	)				(293,550	)					(1,044,390	)
Royce Micro-Cap Fund
Investment Class		1,668,332		5,230,274		–		13,468,098		(17,890,807	)		(43,234,672	)							(16,222,475	)		(24,536,300	)
Service Class		386,630		3,844,992		–		957,677		(3,228,922	)		(8,828,295	)							(2,842,292	)		(4,025,626	)
Consultant Class		44,621		190,964		–		1,971,129		(1,937,083	)		(6,157,584	)							(1,892,462	)		(3,995,491	)
Royce Opportunity Fund
Investment Class		37,926,915		93,500,228		–		46,105,025		(92,425,799	)		(188,492,528	)							(54,498,884	)		(48,887,275	)
Service Class		6,866,673		27,214,604		–		4,309,945		(15,445,454	)		(69,306,409	)				7,600,899			(8,578,781	)		(30,180,961	)
Consultant Class		267,335		991,331		–		888,800		(2,495,770	)		(8,854,787	)							(2,228,435	)		(6,974,656	)
Institutional Class		24,645,163		43,463,191		–		18,881,233		(42,684,440	)		(396,679,654	)							(18,039,277	)		(334,335,230	)
R Class		1,575,009		3,509,170		–		2,423,347		(2,008,110	)		(9,865,485	)							(433,101	)		(3,932,968	)
K Class				748,866				–					(771,052	)				(7,600,899	)					(7,623,085	)
Royce Pennsylvania Mutual Fund
Investment Class		37,538,151		92,452,580		–		222,270,728		(113,636,749	)		(350,693,635	)							(76,098,598	)		(35,970,327	)
Service Class		2,401,749		8,411,192		–		4,802,081		(11,459,079	)		(27,674,585	)				2,031,178			(9,057,330	)		(12,430,134	)
Consultant Class		3,042,289		7,715,097		–		47,076,762		(25,752,427	)		(88,342,616	)							(22,710,138	)		(33,550,757	)
Institutional Class		8,799,524		97,962,498		–		11,826,618		(9,979,788	)		(59,962,281	)							(1,180,264	)		49,826,835
R Class		693,267		1,591,148		–		1,930,873		(2,573,810	)		(5,682,726	)							(1,880,543	)		(2,160,705	)
K Class				55,427				–					(850,567	)				(2,031,178	)					(2,826,318	)
Royce Premier Fund
Investment Class		96,267,259		151,864,129		–		282,874,055		(236,102,833	)		(523,969,418	)				20,846,050			(139,835,574	)		(68,385,184	)
Service Class		4,516,168		12,416,438		–		8,910,292		(12,296,161	)		(19,455,214	)							(7,779,993	)		1,871,516
Consultant Class		408,318		1,534,237		–		4,818,150		(2,860,975	)		(8,850,863	)							(2,452,657	)		(2,498,476	)
Institutional Class		12,147,545		104,457,137		–		45,360,949		(25,804,056	)		(134,226,931	)							(13,656,511	)		15,591,155
W Class				152,877				–					(11,933,879	)				(20,846,050	)					(32,627,052	)
R Class		367,384		692,268		–		2,176,396		(881,639	)		(2,675,755	)							(514,255	)		192,909
Royce Small-Cap Value Fund
Investment Class		2,438,140		7,444,311		–		6,296,922		(8,107,220	)		(15,135,406	)				3,479,640			(5,669,080	)		2,085,467
Service Class		1,316,765		4,541,944		–		11,996,003		(17,559,557	)		(37,125,376	)				1,556,238			(16,242,792	)		(19,031,191	)
Consultant Class		57,311		466,673		–		1,108,696		(1,182,346	)		(3,034,581	)							(1,125,035	)		(1,459,212	)
Institutional Class				172,026				–					(556,734	)				(3,479,640	)					(3,864,348	)
R Class		555,813		1,381,891		–		944,360		(1,101,686	)		(7,083,191	)		��					(545,873	)		(4,756,940	)
K Class				323,211				–					(736,046	)				(1,556,238	)					(1,969,073	)

82 | The Royce Funds 2019 Semiannual Report to Shareholders

Capital Share Transactions (in dollars) (continued):

					SHARES ISSUED FOR
					REINVESTMENT														NET INCREASE (DECREASE) FROM
	SHARES SOLD				OF DISTRIBUTIONS				SHARES REDEEMED						SHARE CLASS CONVERSIONS				CAPITAL SHARE TRANSACTIONS
	Six Months				Six Months				Six Months						Six Months				Six Months
	Ended 6/30/19		Period Ended		Ended 6/30/19		Period Ended		Ended 6/30/19			Period Ended			Ended 6/30/19	Period Ended			Ended 6/30/19			Period Ended
	(unaudited)		12/31/18		(unaudited)		12/31/18		(unaudited)			12/31/18			(unaudited)	12/31/181			(unaudited)			12/31/18
Royce Smaller-Companies Growth Fund
Investment Class	$	4,118,882	$	14,761,046	$	–	$	24,904,985	$	(11,007,847	)	$	(32,950,853	)					$	(6,888,965	)	$	6,715,178
Service Class		2,732,766		8,483,893		–		49,014,107		(17,811,305	)		(62,051,370	)		$	623,550			(15,078,539	)		(3,929,820	)
Consultant Class		16,287		339,101		–		2,118,800		(806,678	)		(3,292,612	)						(790,391	)		(834,711	)
Institutional Class		217,359		898,827		–		2,073,085		(467,765	)		(1,902,628	)						(250,406	)		1,069,284
R Class				139,588				–					(111,893	)			(623,550	)					(595,855	)
Royce Special Equity Fund
Investment Class		89,446,430		222,486,956		–		94,473,851		(143,064,708	)		(328,550,392	)						(53,618,278	)		(11,589,585	)
Service Class		8,661,718		43,284,766		–		6,535,526		(14,654,499	)		(78,927,553	)						(5,992,781	)		(29,107,261	)
Consultant Class		532,476		2,381,819		–		3,028,564		(3,972,653	)		(14,406,587	)						(3,440,177	)		(8,996,204	)
Institutional Class		44,975,939		77,996,165		–		20,150,304		(33,384,919	)		(97,459,966	)						11,591,020			686,503
Royce Total Return Fund
Investment Class		46,649,151		172,331,070		6,156,953		185,080,886		(185,908,245	)		(486,165,820	)			4,991,437			(133,102,141	)		(123,762,427	)
Service Class		7,827,029		17,605,970		420,685		14,354,667		(22,151,291	)		(53,275,300	)			34,866,202			(13,903,577	)		13,551,539
Consultant Class		2,225,477		7,766,358		193,688		28,157,591		(25,364,766	)		(64,755,046	)						(22,945,601	)		(28,831,097	)
Institutional Class		66,945,545		133,802,754		1,676,619		38,645,065		(89,592,504	)		(186,576,729	)						(20,970,340	)		(14,128,910	)
W Class				3,384,456				153,879					(97,087,426	)			(4,991,437	)					(98,540,528	)
R Class		3,591,194		11,526,424		129,512		8,367,129		(18,833,492	)		(14,313,562	)						(15,112,786	)		5,579,991
K Class				4,184,983				58,255					(6,531,546	)			(34,866,202	)					(37,154,510	)

Capital Share Transactions (in shares):

					SHARES ISSUED FOR
					REINVESTMENT														NET INCREASE (DECREASE) IN
	SHARES SOLD				OF DISTRIBUTIONS				SHARES REDEEMED						SHARE CLASS CONVERSIONS				SHARES OUTSTANDING
	Six Months				Six Months				Six Months						Six Months				Six Months
	Ended 6/30/19		Period Ended		Ended 6/30/19		Period Ended		Ended 6/30/19			Period Ended			Ended 6/30/19	Period Ended			Ended 6/30/19			Period Ended
	(unaudited)		12/31/18		(unaudited)		12/31/18		(unaudited)			12/31/18			(unaudited)	12/31/181			(unaudited)			12/31/18
Royce Dividend Value Fund
Investment Class		1,721,039		3,612,556		72,201		1,926,261		(5,628,336	)		(5,740,059	)						(3,835,096	)		(201,242	)
Service Class		47,486		182,554		14,621		572,558		(1,046,129	)		(3,528,363	)						(984,022	)		(2,773,251	)
Consultant Class		8,708		72,025		243		16,665		(17,204	)		(55,073	)						(8,253	)		33,617
Institutional Class		5,664		389,716		1,805		66,051		(439,123	)		(54,927	)						(431,654	)		400,840
Royce Global Financial Services Fund
Service Class		312,501		1,032,931		–		402,001		(759,601	)		(1,977,301	)						(447,100	)		(542,369	)
Institutional Class		–		281		–		71,378		(145,047	)		(46,913	)						(145,047	)		24,746
Royce International Premier Fund
Investment Class		8,764,661		22,969,262		–		72,747		(6,758,309	)		(5,886,292	)						2,006,352			17,155,717
Service Class		1,363,861		1,367,064		–		–		(421,346	)		(1,818,416	)			964			942,515			(450,388	)
Consultant Class		37,226		203,769		–		–		(77,295	)		(169,091	)						(40,069	)		34,678
Institutional Class		9,168,420		2,916,865		–		5,389		(310,338	)		(82,650	)						8,858,082			2,839,604
R Class				16				–					(4,618	)			(1,202	)					(5,804	)
Royce Low-Priced Stock Fund
Investment Class		206,599		664,694		–		1,247,011		(584,818	)		(1,402,203	)			544,002			(378,219	)		1,053,504
Service Class		152,831		627,095		–		4,140,332		(2,239,641	)		(4,994,573	)			33,703			(2,086,810	)		(193,443	)
Institutional Class				28,573				–					(114,370	)			(543,255	)					(629,052	)
R Class				1,925				–					(97,337	)			(35,709	)					(131,121	)
Royce Micro-Cap Fund
Investment Class		162,106		442,085		–		1,379,928		(1,752,892	)		(3,650,567	)						(1,590,786	)		(1,828,554	)
Service Class		38,488		312,618		–		100,175		(323,625	)		(750,133	)						(285,137	)		(337,340	)
Consultant Class		5,618		20,513		–		261,077		(244,575	)		(657,240	)						(238,957	)		(375,650	)
Royce Opportunity Fund
Investment Class2		4,934,772		7,069,808		–		4,353,638		(8,077,290	)		(14,641,615	)						(3,142,518	)		(3,218,169	)
Service Class		654,179		2,128,949		–		437,558		(1,475,746	)		(5,517,655	)			601,813			(821,567	)		(2,349,335	)
Consultant Class		28,948		97,465		–		102,870		(272,182	)		(824,172	)						(243,234	)		(623,837	)
Institutional Class		2,158,669		3,124,242		–		1,745,031		(3,733,171	)		(28,617,157	)						(1,574,502	)		(23,747,884	)
R Class		159,157		289,556		–		255,089		(196,617	)		(794,614	)						(37,460	)		(249,969	)
K Class				66,744				–					(70,091	)			(684,679	)					(688,026	)

The Royce Funds 2019 Semiannual Report to Shareholders | 83

Notes to Financial Statements (unaudited) (continued)

Capital Share Transactions (in shares) (continued):

					SHARES ISSUED FOR
					REINVESTMENT														NET INCREASE (DECREASE) IN
	SHARES SOLD				OF DISTRIBUTIONS				SHARES REDEEMED						SHARE CLASS CONVERSIONS				SHARES OUTSTANDING
	Six Months				Six Months				Six Months						Six Months				Six Months
	Ended 6/30/19		Period Ended		Ended 6/30/19		Period Ended		Ended 6/30/19			Period Ended			Ended 6/30/19	Period Ended			Ended 6/30/19			Period Ended
	(unaudited)		12/31/18		(unaudited)		12/31/18		(unaudited)			12/31/18			(unaudited)	12/31/181			(unaudited)			12/31/18
Royce Pennsylvania Mutual Fund
Investment Class3		14,080,965		9,032,724		–		27,406,995		(12,862,069	)		(35,352,581	)						1,218,896			1,087,138
Service Class3		13,602,644		758,686		–		591,389		(1,295,657	)		(2,597,089	)			188,596			12,306,987			(1,058,418	)
Consultant Class3		1,410,978		1,042,114		–		7,276,161		(3,686,429	)		(10,773,630	)						(2,275,451	)		(2,455,355	)
Institutional Class		993,086		10,176,610		–		1,454,689		(1,140,057	)		(5,904,434	)						(146,971	)		5,726,865
R Class		86,167		154,050		–		253,063		(320,435	)		(556,956	)						(234,268	)		(149,843	)
K Class				6,293				–					(96,193	)			(230,227	)					(320,127	)
Royce Premier Fund
Investment Class		7,273,205		9,774,025		–		23,300,993		(17,493,401	)		(33,088,705	)			1,246,773			(10,220,196	)		1,233,086
Service Class		347,683		762,638		–		753,832		(945,949	)		(1,202,121	)						(598,266	)		314,349
Consultant Class		40,140		132,860		–		502,414		(272,115	)		(689,765	)						(231,975	)		(54,491	)
Institutional Class		907,218		6,477,889		–		3,678,909		(1,890,846	)		(8,262,556	)						(983,628	)		1,894,242
W Class				8,969				–					(683,832	)			(1,239,921	)					(1,914,784	)
R Class		28,951		49,442		–		193,975		(70,574	)		(172,520	)						(41,623	)		70,897
Royce Small-Cap Value Fund
Investment Class		267,405		720,316		–		732,200		(901,228	)		(1,521,627	)			319,820			(633,823	)		250,709
Service Class		142,974		433,604		–		1,399,767		(1,944,226	)		(3,589,532	)			152,722			(1,801,252	)		(1,603,439	)
Consultant Class		6,974		56,074		–		145,498		(147,457	)		(346,507	)						(140,483	)		(144,935	)
Institutional Class				16,201				–					(54,436	)			(316,248	)					(354,483	)
R Class		64,187		138,804		–		114,607		(125,363	)		(720,582	)						(61,176	)		(467,171	)
K Class				46,711				–					(106,029	)			(221,047	)					(280,365	)
Royce Smaller-Companies Growth Fund
Investment Class		540,538		1,409,407		–		3,454,228		(1,391,949	)		(3,097,890	)						(851,411	)		1,765,745
Service Class		355,574		746,094		–		6,972,135		(2,309,693	)		(5,772,215	)			57,897			(1,954,119	)		2,003,911
Consultant Class		2,533		47,341		–		350,795		(122,502	)		(386,332	)						(119,969	)		11,804
Institutional Class		27,481		74,788		–		283,596		(60,340	)		(170,523	)						(32,859	)		187,861
R Class				13,782				–					(11,097	)			(62,268	)					(59,583	)
Royce Special Equity Fund
Investment Class		4,798,706		10,606,597		–		5,245,633		(7,635,617	)		(16,096,361	)						(2,836,911	)		(244,131	)
Service Class		468,162		2,028,507		–		363,287		(779,109	)		(3,754,389	)						(310,947	)		(1,362,595	)
Consultant Class		31,527		129,355		–		184,219		(235,360	)		(761,826	)						(203,833	)		(448,252	)
Institutional Class		2,393,390		3,801,951		–		1,128,868		(1,795,639	)		(4,649,863	)						597,751			280,956
Royce Total Return Fund
Investment Class		4,350,591		13,088,971		582,234		17,953,975		(17,121,038	)		(38,922,836	)			376,428			(12,188,213	)		(7,503,462	)
Service Class		721,977		1,289,618		39,025		1,367,521		(1,977,185	)		(3,895,252	)			2,550,563			(1,216,183	)		1,312,450
Consultant Class		199,850		621,031		17,436		2,684,766		(2,263,984	)		(5,045,159	)						(2,046,698	)		(1,739,362	)
Institutional Class		6,196,478		10,380,153		157,869		3,797,631		(8,350,652	)		(14,578,110	)						(1,996,305	)		(400,326	)
W Class				248,431				11,258					(6,960,700	)			(375,375	)					(7,076,386	)
R Class		323,923		834,627		11,594		791,987		(1,646,945	)		(1,066,832	)						(1,311,428	)		559,782
K Class				468,780				6,516					(724,647	)			(3,926,286	)					(4,175,637	)

1	On April 13, 2018, R Class shares converted to Service Class shares for the following funds: Royce Low-Priced Stock Fund and Royce Smaller-Companies Growth Fund and K Class shares converted to Service Class shares for the following funds: Royce Opportunity Fund, Royce Pennsylvania Mutual Fund, Royce Small-Cap Value Fund and Royce Total Return Fund. On April 16, 2018, Royce International Premier Fund R Class shares converted to Service Class shares. On June 27, 2018, Institutional Class shares converted to Investment Class shares for Royce Low-Priced Stock Fund and Royce Small-Cap Value Fund. On October 10, 2018, W Class shares converted to Investment Class shares for Royce Premier Fund and Royce Total Return Fund.
2	Includes shares issued in connection with the merger of Royce Micro-Cap Opportunity Fund (1,587,186 for Investment Class) for the six months ended 6/30/19.
3	Includes shares issued in connection with the mergers of Royce Small-Cap Leaders Fund and Royce Small/Mid-Cap Premier Fund (9,793,096 for Investment Class, 13,319,368 for Service Class and 969,311 for Consultant Class) for the six months ended 6/30/19.

84 | The Royce Funds 2019 Semiannual Report to Shareholders

Investment Adviser and Distributor:

INVESTMENT ADVISER:
    Under the Trust’s investment advisory agreements with Royce, Royce is entitled to receive investment advisory fees in respect of each Fund that are computed daily and payable monthly. Royce has contractually agreed, without right of termination, to waive fees and/or reimburse 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 certain Funds’ net annual operating expense ratios at specified levels through April 30, 2020, and is shown below to the extent that it impacted net expenses for the six months ended June 30, 2019. See the Prospectus for contractual waiver expiration dates.

	ANNUAL CONTRACTUAL ADVISORY FEE AS A				COMMITTED NET ANNUAL OPERATING EXPENSE RATIO CAP4															SIX MONTHS ENDED JUNE 30, 2019
	PERCENTAGE OF AVERAGE NET ASSETS1			Investment Class4			Service Class4			Consultant Class4			Institutional Class4			R Class4			Net advisory fees			Advisory fees waived
Royce Dividend Value Fund		0.85	%		1.09	%		1.34	%		2.09	%		1.09	%7		N/A		$	446,206	$	48,190
Royce Global Financial Services Fund		1.00	%		N/A			1.49	%		N/A			1.49	%8		N/A			166,524		32,575
Royce International Premier Fund		1.00	%		1.19	%		1.44	%		2.19	%		1.04	%		N/A			2,191,629		157,190
Royce Low-Priced Stock Fund		1.00	%		1.24	%		1.49	%		N/A			N/A			N/A			1,073,172		–
Royce Micro-Cap Fund		1.25	%2		1.49	%5		1.61	%6		N/A			N/A			N/A			918,260		359
Royce Opportunity Fund		1.00	%		N/A			1.49	%		N/A			N/A			N/A			4,759,960		–
Royce Pennsylvania Mutual Fund		0.76	%3		N/A			N/A			N/A			N/A			N/A			6,634,155		–
Royce Premier Fund		1.00	%		N/A			1.49	%		N/A			N/A			N/A			9,204,817		–
Royce Small-Cap Value Fund		1.00	%		1.24	%		1.49	%		N/A			N/A			1.99	%		975,433		–
Royce Smaller-Companies Growth Fund		1.00	%		N/A			1.49	%		2.24	%		1.21	%9		N/A			1,391,383		19,380
Royce Special Equity Fund		1.00	%		N/A			1.39	%		N/A			N/A			N/A			6,303,636		–
Royce Total Return Fund		1.00	%		N/A			1.49	%		N/A			N/A			N/A			8,120,928		–

1	From a base annual rate of 1.00% (0.85% for Royce Dividend Value Fund and 1.25% for Royce Micro-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 $3 billion – .05% per annum; more than $3 billion to $4 billion – .10% per annum; over $4 billion – .15% per annum.
2	Royce Micro-Cap Fund’s base annual contractual advisory fee was reduced from 1.25% to 1.00%, effective July 15, 2019.
3	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.
4	Committed net annual operating expense ratio cap excludes acquired fund fees and expenses.
5	Royce Micro-Cap Fund’s committed net annual operating expense ratio cap was reduced from 1.49% to 1.24% for Investment Class, effective July 15, 2019.
6	Royce Micro-Cap Fund’s committed net annual operating expense ratio cap was reduced from 1.61% to 1.49% for Service Class, effective July 15, 2019.
7	Royce Dividend Value Fund’s committed net annual operating expense ratio cap was increased from 0.89% to 1.09% for Institutional Class, effective May 1, 2019.
8	Royce Global Financial Services Fund’s committed net annual operating expense ratio cap was eliminated from 1.04% for Institutional Class, effective May 1, 2019.
9	Royce Smaller-Companies Growth Fund’s committed net annual operating expense ratio cap was increased from 1.08% to 1.21% for Institutional Class, effective May 1, 2019.

DISTRIBUTOR:
    Royce Fund Services, LLC (“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					SIX MONTHS ENDED JUNE 30, 2019
	PERCENTAGE OF AVERAGE NET ASSETS			Net distribution fees			Distribution fees waived
Royce Dividend Value Fund – Service Class		0.25	%		$	36,139		$	–
Royce Dividend Value Fund – Consultant Class		1.00	%			7,702			–
Royce Global Financial Services Fund – Service Class		0.25	%			37,366			3,249
Royce International Premier Fund – Service Class		0.25	%			64,945			–
Royce International Premier Fund – Consultant Class		1.00	%			45,652			–
Royce Low-Priced Stock Fund – Service Class		0.25	%			206,065			–
Royce Micro-Cap Fund – Service Class		0.25	%			8,647			–
Royce Micro-Cap Fund – Consultant Class		1.00	%			85,638			–
Royce Opportunity Fund – Service Class		0.25	%			63,869			–
Royce Opportunity Fund – Consultant Class		1.00	%			48,858			–
Royce Opportunity Fund – R Class		0.50	%			74,502			–
Royce Pennsylvania Mutual Fund – Service Class		0.25	%			52,795			–
Royce Pennsylvania Mutual Fund – Consultant Class		1.00	%			1,343,561			–
Royce Pennsylvania Mutual Fund – R Class		0.50	%			25,905			–
Royce Premier Fund – Service Class		0.25	%			42,949			10,737
Royce Premier Fund – Consultant Class		1.00	%			115,903			–
Royce Premier Fund – R Class		0.50	%			27,019			–
Royce Small-Cap Value Fund – Service Class		0.25	%			145,570			–
Royce Small-Cap Value Fund – Consultant Class		1.00	%			49,333			–
Royce Small-Cap Value Fund ��� R Class		0.50	%			21,879			–

The Royce Funds 2019 Semiannual Report to Shareholders | 85

Notes to Financial Statements (unaudited) (continued)

DISTRIBUTOR (continued):

	ANNUAL CONTRACTUAL DISTRIBUTION FEE AS A					SIX MONTHS ENDED JUNE 30, 2019
	PERCENTAGE OF AVERAGE NET ASSETS			Net distribution fees			Distribution fees waived
Royce Smaller-Companies Growth Fund – Service Class		0.25	%		$	213,093		$	–
Royce Smaller-Companies Growth Fund – Consultant Class		1.00	%			33,839			–
Royce Special Equity Fund – Service Class		0.25	%			77,457			–
Royce Special Equity Fund – Consultant Class		1.00	%			153,623			–
Royce Total Return Fund – Service Class		0.25	%			109,708			–
Royce Total Return Fund – Consultant Class		1.00	%			835,638			–
Royce Total Return Fund – R Class		0.50	%			111,764			–

Purchases and Sales of Investment Securities:
    For the six months ended June 30, 2019, the costs of purchases and the proceeds from sales of investment securities, other than short-term securities and collateral received for securities loaned, were as follows:

	PURCHASES		SALES1
Royce Dividend Value Fund	$	6,246,392	$	35,159,925
Royce Global Financial Services Fund		201,966		5,942,099
Royce International Premier Fund		218,779,973		61,899,451
Royce Low-Priced Stock Fund		16,972,468		40,282,529
Royce Micro-Cap Fund		9,060,421		30,135,647
Royce Opportunity Fund		192,087,164		313,764,787
Royce Pennsylvania Mutual Fund		224,438,860		359,887,098
Royce Premier Fund		125,248,810		421,154,786
Royce Small-Cap Value Fund		67,617,520		97,509,924
Royce Smaller-Companies Growth Fund		86,167,919		118,765,982
Royce Special Equity Fund		83,642,175		269,266,416
Royce Total Return Fund		108,482,049		282,524,772

¹Excludes the value of securities delivered as a result of redemptions-in-kind.

    Cross trades were executed by the Funds pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds to which Royce serves as investment adviser. The Trust’s Chief Compliance Officer reviews such transactions each quarter for compliance with the requirements and restrictions set forth by Rule 17a-7, and reports the results of her review to the Board of Trustees. Cross trades for the six months ended June 30, 2019, were as follows:

	COSTS OF PURCHASES			PROCEEDS FROM SALES			REALIZED GAIN (LOSS)
Royce Dividend Value Fund		$	–		$	339,662		$	(703,063	)
Royce International Premier Fund			606,363			–			–
Royce Pennsylvania Mutual Fund			–			19,546,992			(12,951,825	)
Royce Premier Fund			2,809,632			–			–
Royce Total Return Fund			2,574,721			8,429,871			(2,026,061	)

Redemptions-In-Kind:
    The Funds may make payment for Fund shares redeemed wholly or in part by distributing portfolio securities to shareholders. The net realized gain will not be realized for tax purposes. For the six months ended June 30, 2019, the following fund had redemptions in kind:

	PROCEEDS		REALIZED GAIN
Royce Total Return Fund	$	45,131,138	$	22,359,398

Class Specific Expenses:

    Class specific expenses were as follows for the six months ended June 30, 2019:

	NET DISTRIBUTION FEES		SHAREHOLDER SERVICING		SHAREHOLDER REPORTS		REGISTRATION		TRANSFER AGENT BALANCE CREDITS			TOTAL		CLASS LEVEL EXPENSES REIMBURSED BY INVESTMENT ADVISER
Royce Dividend Value Fund – Investment Class	$	–	$	62,228	$	14,677	$	8,673	$	(525	)	$	85,053	$	19,226
Royce Dividend Value Fund – Service Class		36,139		32,691		5,371		6,899		(526	)		80,574		21,808
Royce Dividend Value Fund – Consultant Class		7,702		3,484		484		5,751		(29	)		17,392		8,508
Royce Dividend Value Fund – Institutional Class		–		3,192		62		5,658		(10	)		8,902		8,628
		43,841		101,595		20,594		26,981		(1,090	)				58,170

86 | The Royce Funds 2019 Semiannual Report to Shareholders

Class Specific Expenses (continued):

	NET DISTRIBUTION FEES		SHAREHOLDER SERVICING		SHAREHOLDER REPORTS		REGISTRATION		TRANSFER AGENT BALANCE CREDITS			TOTAL		CLASS LEVEL EXPENSES REIMBURSED BY INVESTMENT ADVISER
Royce Global Financial Services Fund – Service Class	$	37,366	$	30,753	$	6,252	$	9,224	$	(499	)	$	83,096	$	24,248
Royce Global Financial Services Fund – Institutional Class		–		3,170		48		6,228		(8	)		9,438		7,321
		37,366		33,923		6,300		15,452		(507	)				31,569
Royce International Premier Fund – Investment Class		–		128,330		20,396		23,336		(826	)		171,236		–
Royce International Premier Fund – Service Class		64,945		33,570		4,194		12,176		(264	)		114,621		8,107
Royce International Premier Fund – Consultant Class		45,652		7,070		1,016		5,864		(69	)		59,533		6,444
Royce International Premier Fund – Institutional Class		–		3,152		3,151		12,909		(86	)		19,126		19,126
		110,597		172,122		28,757		54,285		(1,245	)				33,677
Royce Low-Priced Stock Fund – Investment Class		–		36,954		14,365		6,835		(3,305	)		54,849		42,170
Royce Low-Priced Stock Fund – Service Class		206,065		143,636		20,496		10,636		(887	)		379,946		131,061
		206,065		180,590		34,861		17,471		(4,192	)				173,231
Royce Micro-Cap Fund – Investment Class		–		68,790		31,704		9,131		(5,806	)		103,819		103,819
Royce Micro-Cap Fund – Service Class		8,647		8,820		2,079		5,888		(45	)		25,389		20,799
Royce Micro-Cap Fund – Consultant Class		85,638		11,788		3,108		6,225		(271	)		106,488		–
		94,285		89,398		36,891		21,244		(6,122	)				124,618
Royce Opportunity Fund – Investment Class		–		371,020		62,112		11,413		(6,517	)		438,028		–
Royce Opportunity Fund – Service Class		63,869		51,411		6,745		6,728		(306	)		128,447		27,704
Royce Opportunity Fund – Consultant Class		48,858		9,384		1,891		5,697		(266	)		65,564		–
Royce Opportunity Fund – Institutional Class		–		4,096		8,842		8,475		(202	)		21,211		–
Royce Opportunity Fund – R Class		74,502		35,712		1,254		4,912		(168	)		116,212		–
		187,229		471,623		80,844		37,225		(7,459	)				27,704
Royce Pennsylvania Mutual Fund – Investment Class		–		591,105		119,457		13,300		(18,065	)		705,797		–
Royce Pennsylvania Mutual Fund – Service Class		52,795		36,929		6,839		6,409		(286	)		102,686		–
Royce Pennsylvania Mutual Fund – Consultant Class		1,343,561		115,807		30,986		7,817		(3,231	)		1,494,940		–
Royce Pennsylvania Mutual Fund – Institutional Class		–		4,228		4,631		7,262		(251	)		15,870		–
Royce Pennsylvania Mutual Fund – R Class		25,905		15,424		1,643		4,218		(260	)		46,930		–
		1,422,261		763,493		163,556		39,006		(22,093	)				–
Royce Premier Fund – Investment Class		–		785,137		152,273		15,902		(10,586	)		942,726		–
Royce Premier Fund – Service Class		42,949		38,854		5,102		6,543		(234	)		93,214		5,625
Royce Premier Fund – Consultant Class		115,903		12,600		2,344		5,786		(242	)		136,391		–
Royce Premier Fund – Institutional Class		–		4,269		56,615		7,501		(163	)		68,222		–
Royce Premier Fund – R Class		27,019		14,501		602		2,359		(69	)		44,412		–
		185,871		855,361		216,936		38,091		(11,294	)				5,625
Royce Small-Cap Value Fund – Investment Class		–		40,898		7,819		6,868		(1,310	)		54,275		16,681
Royce Small-Cap Value Fund – Service Class		145,570		97,782		13,936		8,423		(754	)		264,957		46,331
Royce Small-Cap Value Fund – Consultant Class		49,333		8,048		1,321		5,881		(163	)		64,420		–
Royce Small-Cap Value Fund – R Class		21,879		13,176		802		2,662		(137	)		38,382		130
		216,782		159,904		23,878		23,834		(2,364	)				63,142

The Royce Funds 2019 Semiannual Report to Shareholders | 87

Notes to Financial Statements (unaudited) (continued)

Class Specific Expenses (continued):

	NET DISTRIBUTION FEES		SHAREHOLDER SERVICING		SHAREHOLDER REPORTS		REGISTRATION		TRANSFER AGENT BALANCE CREDITS			TOTAL		CLASS LEVEL EXPENSES REIMBURSED BY INVESTMENT ADVISER
Royce Smaller-Companies Growth Fund – Investment Class	$	–	$	38,989	$	19,534	$	7,485	$	(2,582	)	$	63,426	$	–
Royce Smaller-Companies Growth Fund – Service Class		213,093		151,718		20,618		10,254		(847	)		394,836		52,367
Royce Smaller-Companies Growth Fund – Consultant Class		33,839		6,786		1,415		5,851		(162	)		47,729		8,742
Royce Smaller-Companies Growth Fund – Institutional Class		–		3,271		475		5,724		(36	)		9,434		8,010
		246,932		200,764		42,042		29,314		(3,627	)				69,119
Royce Special Equity Fund – Investment Class		–		498,977		81,851		15,349		(8,360	)		587,817		–
Royce Special Equity Fund – Service Class		77,457		51,734		9,004		6,164		(686	)		143,673		48,223
Royce Special Equity Fund – Consultant Class		153,623		16,895		3,580		5,922		(509	)		179,511		–
Royce Special Equity Fund – Institutional Class		–		5,214		30,532		9,735		(559	)		44,922		–
		231,080		572,820		124,967		37,170		(10,114	)				48,223
Royce Total Return Fund – Investment Class		–		631,040		129,942		12,807		(9,373	)		764,416		–
Royce Total Return Fund – Service Class		109,708		80,901		14,739		6,024		(426	)		210,946		36,437
Royce Total Return Fund – Consultant Class		835,638		77,192		17,930		7,535		(1,500	)		936,795		–
Royce Total Return Fund – Institutional Class		–		5,012		26,330		6,473		(308	)		37,507		–
Royce Total Return Fund – R Class		111,764		57,110		3,512		3,477		(590	)		175,273		–
		1,057,110		851,255		192,453		36,316		(12,197	)				36,437

Tax Information:
    At June 30, 2019, net unrealized appreciation (depreciation) based on identified cost for tax purposes was as follows:

			NET UNREALIZED		GROSS UNREALIZED
	TAX BASIS COST		APPRECIATION (DEPRECIATION)		Appreciation		Depreciation
Royce Dividend Value Fund	$	66,528,448	$	43,036,461	$	45,457,950	$	2,421,489
Royce Global Financial Services Fund		28,890,175		10,465,373		11,840,543		1,375,170
Royce International Premier Fund		546,602,329		65,665,914		76,444,118		10,778,204
Royce Low-Priced Stock Fund		171,749,912		41,902,459		56,124,563		14,222,104
Royce Micro-Cap Fund		111,011,170		26,252,792		40,383,781		14,130,989
Royce Opportunity Fund		928,075,146		39,263,172		146,749,821		107,486,649
Royce Pennsylvania Mutual Fund		1,312,564,525		659,720,502		695,672,740		35,952,238
Royce Premier Fund		1,126,125,912		734,131,948		747,368,230		13,236,282
Royce Small-Cap Value Fund		156,936,281		21,964,328		29,589,583		7,625,255
Royce Smaller-Companies Growth Fund		232,047,113		68,490,097		76,965,540		8,475,443
Royce Special Equity Fund		1,021,900,017		188,165,884		239,293,602		51,127,718
Royce Total Return Fund		943,381,113		612,818,102		652,947,289		40,129,187

    The primary cause of the difference between book and tax basis cost is the timing of the recognition of losses on securities sold.

88 | The Royce Funds 2019 Semiannual Report to Shareholders

Transactions in Affiliated Companies:
    An “Affiliated Company,” as defined in the Investment Company Act of 1940, is a company in which a fund owns 5% or more of the company’s outstanding voting securities at any time during the period. The following transactions were effected in shares of such companies for the six months ended June 30, 2019:

AFFILIATED COMPANY	SHARES 12/31/18		MARKET VALUE 12/31/18		COSTS OF PURCHASES		PROCEEDS FROM SALES		REALIZED GAIN (LOSS)			CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION)			DIVIDEND INCOME		SHARES 6/30/19		MARKET VALUE 6/30/19
Royce Premier Fund CIRCOR International1		1,024,687	$	21,825,833	$	–	$	21,901,056	$	(5,330,368	)	$	28,372,793		$	–
				21,825,833						(5,330,368	)		28,372,793			–
Royce Special Equity Fund Bowl America Cl. A		343,000		5,230,750		456,501		–		–			275,249			120,050		375,000	$	5,962,500
Computer Services		779,000		38,950,000		1,461,346		–		–			18,628,654			561,947		1,600,000		59,040,000
Flexsteel Industries		775,000		17,112,000		–		–		–			(3,890,500	)		341,000		775,000		13,221,500
Gencor Industries		1,033,500		11,337,495		1,338,656		–		–			2,250,774			–		1,148,225		14,926,925
Hooker Furniture		1,155,000		30,422,700		–		–		–			(6,606,600	)		346,500		1,155,000		23,816,100
Hurco Companies		580,400		20,720,280		1,827,921		–		–			(145,401	)		209,092		630,000		22,402,800
Insteel Industries		605,500		14,701,540		10,461,049		–		–			(2,376,827	)		58,050		1,094,417		22,785,762
John B. Sanfilippo & Son		911,500		50,734,090		–		5,306,204		536,824			21,373,340			–		845,000		67,338,050
National Presto Industries		421,800		49,316,856		127,623		–		–			(9,982,809	)		2,530,800		423,000		39,461,670
Standard Motor Products		1,380,000		66,833,400		–		–		–			(4,264,200	)		634,800		1,380,000		62,569,200
				305,359,111						536,824			15,261,680			4,802,239				331,524,507
Royce Total Return Fund Starrett (L.S.) Company (The) Cl. A1		387,817		2,028,283		–		685,353		(951,302	)		1,597,675			–
				2,028,283						(951,302	)		1,597,675			–

¹ Not an Affiliated Company at June 30, 2019.

Merger Information:
    As of the close of business on the New York Stock Exchange on June 14, 2019, Royce Opportunity Fund acquired all of the assets and assumed all of the liabilities of Royce Micro-Cap Opportunity Fund. Based on the opinion of counsel delivered to Royce Opportunity Fund, the acquisition, which was approved by shareholders of Royce Micro-Cap Opportunity Fund on May 28, 2019, qualified as a tax-free reorganization for federal income tax purposes with no gain or loss recognized to the Funds or their shareholders. Royce Micro-Cap Opportunity Fund’s net assets of $17,332,098, including $3,256,310 of unrealized appreciation, were combined with Royce Opportunity Fund for total net assets after the acquisition of $903,239,970.
    As of the close of business on the New York Stock Exchange on June 14, 2019, Royce Pennsylvania Mutual Fund acquired all of the assets and assumed all of the liabilities of Royce Small-Cap Leaders Fund and Royce Small/Mid-Cap Premier Fund. Based on the opinions of counsel delivered to Royce Pennsylvania Mutual Fund, the acquisitions, which were approved by shareholders of Royce Small-Cap Leaders Fund and Royce Small/Mid-Cap Premier Fund on May 28, 2019, qualified as tax-free reorganizations for federal income tax purposes with no gain or loss recognized to the Funds or their respective shareholders. Royce Small-Cap Leaders Fund’s net assets of $44,751,244, including $9,113,761 of unrealized appreciation, and Royce Small/Mid-Cap Premier Fund’s net assets of $165,414,569, including $17,832,090 of unrealized appreciation, were combined with Royce Pennsylvania Mutual Fund for total net assets after the acquisition of $1,907,630,569.

Subsequent Events:
    As of the close of business on the New York Stock Exchange on July 12, 2019, Royce Micro-Cap Fund acquired all of the assets and assumed all of the liabilities of Royce Low-Priced Stock Fund. Based on the opinion of counsel delivered to Royce Micro-Cap Fund, the acquisition, which was approved by shareholders of Royce Low-Priced Stock Fund at a special meeting that was originally opened on May 28, 2019 and adjourned to June 27, 2019, qualified as a tax-free reorganization for federal income tax purposes with no gain or loss recognized to the Funds or their shareholders. Royce Low-Priced Stock Fund’s net assets of $209,887,857, including $41,559,475 of unrealized appreciation, were combined with Royce Micro-Cap Fund for total net assets after the acquisition of $344,553,391.

The Royce Funds 2019 Semiannual Report to Shareholders | 89

Understanding Your Fund’s Expenses (unaudited)

    As a shareholder of a mutual fund, you pay ongoing expenses, including management fees and other Fund expenses including, for some funds, distribution and/or service (12b-1) fees. Using the information below, you can estimate how these ongoing expenses (in dollars) affect your investment and compare them with the ongoing expenses of other funds. You may also incur one-time transaction expenses, including redemption fees, which are not shown in this section and would result in higher total costs. The example is based on an investment of $1,000 invested at January 1, 2019, and held for the entire six-month period ended June 30, 2019. Service, Consultant and R Class shares are generally available only through certain brokers or retirement plan administrators who receive distribution and/or service fees from the Fund for services that they perform. Institutional Class shares are generally available only to institutions or intermediaries with a minimum account size of $1 million.

Actual Expenses
    The first part of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value at June 30, 2019, by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes
    The second part of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
    Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, this section is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	ACTUAL						HYPOTHETICAL (5% PER YEAR BEFORE EXPENSES)
	Beginning Account Value 1/1/19		Ending Account Value 6/30/19		Expenses Paid During the Period1		Beginning Account Value 1/1/19		Ending Account Value 6/30/19		Expenses Paid During the Period1		Annualized Expense Ratio2
Investment Class
Royce Dividend Value Fund	$	1,000.00	$	1,209.05	$	5.97	$	1,000.00	$	1,019.39	$	5.46		1.09%
Royce International Premier Fund		1,000.00		1,215.10		6.21		1,000.00		1,019.19		5.66		1.13%
Royce Low-Priced Stock Fund		1,000.00		1,146.00		6.60		1,000.00		1,018.65		6.21		1.24%
Royce Micro-Cap Fund		1,000.00		1,105.88		7.78		1,000.00		1,017.41		7.45		1.49%
Royce Opportunity Fund		1,000.00		1,156.25		6.63		1,000.00		1,018.65		6.21		1.24%
Royce Pennsylvania Mutual Fund3		1,000.00		1,179.35		5.13		1,000.00		1,020.08		4.76		0.95%
Royce Premier Fund		1,000.00		1,217.73		6.65		1,000.00		1,018.79		6.06		1.21%
Royce Small-Cap Value Fund		1,000.00		1,091.02		6.43		1,000.00		1,018.65		6.21		1.24%
Royce Smaller-Companies Growth Fund		1,000.00		1,211.37		6.69		1,000.00		1,018.74		6.11		1.22%
Royce Special Equity Fund		1,000.00		1,045.90		6.14		1,000.00		1,018.79		6.06		1.21%
Royce Total Return Fund		1,000.00		1,153.20		6.57		1,000.00		1,018.70		6.16		1.23%
Service Class
Royce Dividend Value Fund		1,000.00		1,207.06		7.33		1,000.00		1,018.15		6.71		1.34%
Royce Global Financial Services Fund		1,000.00		1,162.59		7.99		1,000.00		1,017.41		7.45		1.49%
Royce International Premier Fund		1,000.00		1,213.81		7.90		1,000.00		1,017.65		7.20		1.44%
Royce Low-Priced Stock Fund		1,000.00		1,145.34		7.93		1,000.00		1,017.41		7.45		1.49%
Royce Micro-Cap Fund		1,000.00		1,104.92		8.40		1,000.00		1,016.81		8.05		1.61%
Royce Opportunity Fund		1,000.00		1,153.85		7.96		1,000.00		1,017.41		7.45		1.49%
Royce Pennsylvania Mutual Fund3		1,000.00		1,173.75		7.11		1,000.00		1,018.25		6.61		1.32%
Royce Premier Fund		1,000.00		1,216.62		8.19		1,000.00		1,017.41		7.45		1.49%
Royce Small-Cap Value Fund		1,000.00		1,088.84		7.72		1,000.00		1,017.41		7.45		1.49%
Royce Smaller-Companies Growth Fund		1,000.00		1,210.76		8.17		1,000.00		1,017.41		7.45		1.49%
Royce Special Equity Fund		1,000.00		1,045.38		7.05		1,000.00		1,017.90		6.95		1.39%
Royce Total Return Fund		1,000.00		1,151.66		7.95		1,000.00		1,017.41		7.45		1.49%
Consultant Class
Royce Dividend Value Fund		1,000.00		1,203.75		11.42		1,000.00		1,014.43		10.44		2.09%
Royce International Premier Fund		1,000.00		1,209.38		12.00		1,000.00		1,013.93		10.94		2.19%
Royce Micro-Cap Fund		1,000.00		1,098.20		14.20		1,000.00		1,011.26		13.61		2.73%
Royce Opportunity Fund		1,000.00		1,149.57		13.00		1,000.00		1,012.69		12.18		2.44%
Royce Pennsylvania Mutual Fund3		1,000.00		1,173.14		10.56		1,000.00		1,015.08		9.79		1.96%
Royce Premier Fund		1,000.00		1,212.65		12.40		1,000.00		1,013.59		11.28		2.26%
Royce Small-Cap Value Fund		1,000.00		1,085.14		12.51		1,000.00		1,012.79		12.08		2.42%
Royce Smaller-Companies Growth Fund		1,000.00		1,205.57		12.25		1,000.00		1,013.69		11.18		2.24%
Royce Special Equity Fund		1,000.00		1,040.88		11.39		1,000.00		1,013.64		11.23		2.25%
Royce Total Return Fund		1,000.00		1,147.26		11.77		1,000.00		1,013.84		11.04		2.21%

90 | The Royce Funds 2019 Semiannual Report to Shareholders

	ACTUAL						HYPOTHETICAL (5% PER YEAR BEFORE EXPENSES)
	Beginning Account Value 1/1/19		Ending Account Value 6/30/19		Expenses Paid During the Period1		Beginning Account Value 1/1/19		Ending Account Value 6/30/19		Expenses Paid During the Period1		Annualized Expense Ratio2
Institutional Class
Royce Dividend Value Fund	$	1,000.00	$	1,208.45	$	5.15	$	1,000.00	$	1,020.13	$	4.71		0.94%
Royce Global Financial Services Fund		1,000.00		1,163.98		6.33		1,000.00		1,018.94		5.91		1.18%
Royce International Premier Fund		1,000.00		1,215.98		5.71		1,000.00		1,019.64		5.21		1.04%
Royce Opportunity Fund		1,000.00		1,156.96		5.94		1,000.00		1,019.29		5.56		1.11%
Royce Pennsylvania Mutual Fund		1,000.00		1,178.66		4.75		1,000.00		1,020.43		4.41		0.88%
Royce Premier Fund		1,000.00		1,218.83		6.33		1,000.00		1,019.09		5.76		1.15%
Royce Smaller-Companies Growth Fund		1,000.00		1,212.95		6.20		1,000.00		1,019.19		5.66		1.13%
Royce Special Equity Fund		1,000.00		1,046.30		5.68		1,000.00		1,019.24		5.61		1.12%
Royce Total Return Fund		1,000.00		1,154.28		6.04		1,000.00		1,019.19		5.66		1.13%
R Class
Royce Opportunity Fund		1,000.00		1,151.69		10.03		1,000.00		1,015.47		9.39		1.88%
Royce Pennsylvania Mutual Fund		1,000.00		1,172.60		9.43		1,000.00		1,016.12		8.75		1.75%
Royce Premier Fund		1,000.00		1,214.35		10.49		1,000.00		1,015.32		9.54		1.91%
Royce Small-Cap Value Fund		1,000.00		1,086.25		10.29		1,000.00		1,014.93		9.94		1.99%
Royce Total Return Fund		1,000.00		1,148.72		10.02		1,000.00		1,015.47		9.39		1.88%

1	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value for the period, multiplied by 181 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.
3	GiftShare accounts pay an annual $50 trustee fee to Alliance Trust Company, as trustee. If these fees were included above, your costs would be higher.

The Royce Funds 2019 Semiannual Report to Shareholders | 91

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

Age: 79 | Number of Funds Overseen: 16 | Tenure: Since 1982

Non-Royce Directorships: Director of Oxford Square Capital Corp.

Principal Occupation(s) During Past Five Years: A member of the Board of Managers of Royce & Associates, LP (“Royce”), the Trust’s investment adviser; Chief Executive Officer (1972–June 2016), President (1972-June 2014) of Royce.

Christopher D. Clark, Trustee¹, President

Age: 54 | Number of Funds Overseen: 16 | Tenure: Since 2014

Principal Occupation(s) During Past Five Years: Chief Executive Officer (since July 2016), President (since July 2014), Co-Chief Investment Officer (Since January 2014), Managing Director of Royce, a Member of the Board of Managers of Royce, having been employed by Royce since May 2007.

Patricia W. Chadwick, Trustee

Age: 70 | Number of Funds Overseen: 16 | Tenure: Since 2009

Non-Royce Directorships: Trustee of Voya Mutual Funds and Director of Wisconsin Energy Corp.

Principal Occupation(s) During Past 5 Years: Consultant and President of Ravengate Partners LLC (since 2000).

Christopher C. Grisanti, Trustee

Age: 57 | Number of Funds Overseen: 16 | Tenure: Since 2017

Non-Royce Directorships: None

Principal Occupation(s) During Past Five Years: Co-Founder and Chief Executive Officer of Grisanti Capital Management LLC, an investment advisory firm (since 1999). Mr. Grisanti’s prior business experience includes serving as Director of Research and Portfolio Manager at Spears Benzak, Salomon & Farrell (from 1994 to 1999) and a senior associate at the law firm of Simpson, Thacher & Bartlett (from 1988 to 1994).

Stephen L. Isaacs, Trustee

Age: 79 | Number of Funds Overseen: 16 | 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: 76 | Number of Funds Overseen: 36 | Tenure: Since 2004

Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 20 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: 79 | Number of Funds Overseen: 16 | 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: 73 | Number of Funds Overseen: 36 | Tenure: Since 2001

Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 20 Legg Mason Funds.

Principal Occupation(s) During Past Five Years: Trustee Emeritus of Colgate University (since 2005); Board Member of Hill House, Inc. (since 1999); Formerly Director of TICC Capital Corp (from 2003-2017): 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).

Michael K. Shields, Trustee

Age: 61 | Number of Funds Overseen: 16 | Tenure: Since 2015

Principal Occupation(s) During Past Five Years: President and Chief Executive Officer of Piedmont Trust Company, a private North Carolina trust company (since May 2012). Mr. Shields’s prior business experience includes owning Shields Advisors, an investment consulting firm (from April 2010 to June 2012).

Francis D. Gannon, Vice President

Age: 51 | 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.

Daniel A. O’Byrne, Vice President
Age: 57 | Tenure: Since 1994
Principal Occupation(s) During Past Five Years: Principal and Vice President of Royce, having been employed by Royce since October 1986.

Peter K. Hoglund, Treasurer

Age: 53 | Tenure: Since 2015

Principal Occupation(s) During Past Five Years: Chief Financial Officer, Chief Administrative Officer, and Managing Director of Royce, having been employed by Royce since December 2014. Prior to joining Royce, Mr. Hoglund spent more than 20 years with Munder Capital Management in Birmingham, MI, serving as Managing Director and Chief Financial Officer and overseeing all financial aspects of the firm. He began his career at Munder as a portfolio manager.

John E. Denneen, Secretary and Chief Legal Officer

Age: 52 | Tenure: 1996-2001 and Since 2002

Principal Occupation(s) During Past Five Years: General Counsel, Managing Director, and, since June 2015, a Member of the Board of Managers of Royce. Chief Legal and Compliance Officer and Secretary of Royce.

Lisa Curcio, Chief Compliance Officer

Age: 59 | 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.

92 | The Royce Funds 2019 Semiannual Report to Shareholders

Board Approval of Investment Advisory Agreements

At meetings held on June 4-5, 2019, the Board of Trustees of The Royce Fund (the “Board”), including all of the non-interested trustees, approved the continuation of investment advisory agreements between Royce & Associates, LP (“R&A”) and The Royce Fund (“TRF”) relating to each of Royce Pennsylvania Mutual Fund, Royce Micro-Cap Fund, Royce Premier Fund, Royce Low-Priced Stock Fund¹, Royce Total Return Fund, Royce Opportunity Fund, Royce Special Equity Fund, Royce Small-Cap Value Fund, Royce Smaller-Companies Growth Fund, Royce Dividend Value Fund, Royce Global Financial Services Fund, and Royce International Premier Fund (each, an “Investment Advisory Agreement” and collectively, the “Investment Advisory Agreements”) In reaching these decisions, the Board reviewed, among other things, information prepared internally by R&A and independently by Broadridge Financial Solutions, Inc. (“Broadridge”) using the database and methodology of Morningstar Associates, LLC (“Morningstar”) containing detailed investment advisory fee, expense ratio, and investment performance comparisons for each series of TRF listed above (each, a “Fund” and collectively, the “Funds”) with other mutual funds in its “peer group” and “category”, information regarding the past performance of the Funds and other registered investment companies managed by R&A and a memorandum outlining the legal duties of the Board prepared by independent counsel to the non-interested trustees. R&A also provided the trustees with an analysis of its profitability with respect to providing investment advisory services to each Fund. In addition, the Board took into account information furnished throughout the year at regular Board meetings, including reports on investment performance, shareholder services, distribution fees and expenses, regulatory compliance, brokerage commissions and research, brokerage and other execution products and services provided to the Funds. The Board also considered other matters it deemed important to the approval process, such as allocation of Fund brokerage commissions, “soft dollar” research services R&A receives, payments made to affiliates of R&A, as well as payments made by R&A relating to distribution of Fund shares and other direct and indirect benefits to R&A and its affiliates from their relationship with the Funds. The trustees also met throughout the year with investment advisory personnel from R&A. The Board also noted R&A’s efforts to provide enhanced analytical tools to its investment staff along with the ongoing meetings conducted by R&A’s Co-Chief Investment Officers with portfolio managers experiencing performance challenges in an attempt to address such challenges. The Board, in its deliberations, recognized that, for many of the Funds’ shareholders, the decision to purchase Fund shares included a decision to select R&A as the investment adviser and that there was a strong association in the minds of Fund shareholders between R&A and each of the Funds. In considering factors relating to the approval of the continuance of the Investment Advisory Agreement for each Fund, the non-interested trustees received assistance and advice from, and met separately with, their independent legal counsel. While continuation of the investment advisory and administrative arrangements for each Fund was considered at the same Board meeting, the trustees dealt with each Fund separately. Among other factors, the trustees considered the following:

The nature, extent and quality of services provided by R&A:

The Board considered the following factors to be of fundamental importance to its consideration of whether to approve the continuance of the Investment Advisory Agreement for each Fund: (i) R&A’s more than 40 years of value investing experience and track record; (ii) the history of long-tenured R&A portfolio managers managing many of the Funds; (iii) R&A’s focus on mid-cap, small-cap and micro-cap value investing; (iv) the consistency of R&A’s approach to managing each Fund, other open-end mutual funds, and closed-end funds over more than 40 years; (v) the integrity and high ethical standards adhered to at R&A; (vi) R&A’s specialized experience in the area of trading small- and micro-cap securities; (vii) R&A’s historical ability to attract and retain portfolio management talent; and (viii) R&A’s focus on shareholder interests as exemplified by capping expenses on smaller funds, closing funds to new investors when R&A believed such closings were in the best interests of existing shareholders, establishing breakpoints for a number of funds and providing expansive shareholder reporting and communications. The Board also noted that R&A’s compensation policy arrangements strongly encourage portfolio manager investment in each Fund that they manage. The Board also reviewed the services that R&A provides to each Fund, including, but not limited to, managing each Fund’s investments in accordance with the stated policies of each Fund. The Board considered the fact that R&A provided certain administrative services to the Funds at cost pursuant to the Administration Agreement between TRF and R&A. The Board determined that the services to be provided to the Funds by R&A would be the same as those that it previously provided to the Funds. The Board also took into consideration the histories, reputations and backgrounds of R&A’s portfolio managers for each Fund, finding that these would likely have an impact on the continued success of such Fund. The Board also noted R&A’s ability to attract and retain qualified and experienced personnel. Lastly, the Board noted that R&A officers, employees, and their families had substantial amounts invested in various Funds. The Board concluded that the investment advisory services provided by R&A to each Fund compared favorably to services provided by R&A to other R&A client accounts, including other funds, in both nature and quality, and that the scope of services provided by R&A would continue to be suitable for each Fund.

Investment performance of the Funds and R&A:

Although the Funds currently span a wider risk spectrum than they have historically, R&A generally emphasizes a risk-averse approach to investing. In light of that approach, the trustees believe that risk-adjusted performance continues to be the most appropriate measure of each Fund’s investment performance. One measure of risk-adjusted performance the trustees have historically used in their review of each Fund’s performance is the Sharpe Ratio. The Sharpe Ratio is a risk-adjusted measure of performance developed by Nobel Laureate William Sharpe. It is calculated by dividing a Fund’s annualized excess returns by its annualized standard deviation to determine reward per unit of risk. The higher the Sharpe Ratio, the better a Fund’s historical risk-adjusted performance. The Board attaches primary importance to risk-adjusted performance over relatively long periods of time, typically 3 to 10 years.
    The Board noted that 2018 proved to be a turbulent year for financial markets in general and for the small-cap equity market in particular. For much of 2018, the small-cap market experienced positive returns and low volatility, with the Russell 2000 Index reaching an all-time high on August 31, 2018. Small-cap markets then experienced declines along with increased volatility from September through mid-December. Those declines accelerated from mid-December through the end of 2018. Overall, the Russell 2000 Index declined 11.01% in 2018. Within the small-cap market, the Board noted that value stocks outperformed growth stocks, dividend payers outperformed non-dividend payers, earners held up better than non-earners, and defensive stocks outpaced cyclical stocks in 2018. Notwithstanding the overall decline within the small-cap market in 2018, the Board noted that: (i) six Funds (50%) ranked within the 1st Sharpe Ratio quartile in their respective Morningstar categories for the 1-year period ended December 31, 2018; (ii) nine Funds (75%) ranked within the 1st or 2nd Sharpe Ratio quartile in their respective Morningstar categories for the 3-year period ended December 31, 2018; and (iii) ten Funds (83.3%) had improved Sharpe Ratio percentile rankings within their respective Morningstar categories for the 3-year period ended December 31, 2018 compared to the 3-year period ended December 31, 2017, with many of those Funds achieving significant improvements. Overall, the average 3-year Morningstar percentile rank across the Funds improved by 16.3 percentile points on a year-over-year comparison basis. The average 3-year Morningstar percentile rank for the five largest Funds improved by 24 percentile points on a year-over-year comparison basis. These improvements are on top of percentile rank improvements of 14 basis points and 22 basis points, respectively, that were recorded for the various Funds during the 3-year period

¹ Royce Low-Priced Stock Fund was reorganized into Royce Micro-Cap Fund, effective July 15, 2019.

The Royce Funds 2019 Semiannual Report to Shareholders | 93

Board Approval of Investment Advisory Agreements

ended December 31, 2017. The Board noted that the last few years have been marked by increased return dispersion, declining correlation, and a steepening yield curve. While not dispositive, the trustees noted that such improved relative risk-adjusted performance during the more historically customary market environment that has recently prevailed was also not insignificant.
    The Board further noted that the Funds also generally underperformed their peers, as evidenced by their respective Sharpe Ratios, from approximately March 2009 through the end of 2015. This post-2008 market period was marked by historically low interest rates and significant U.S. Federal Reserve market intervention. During this period, highly leveraged, non-earning companies and yield-oriented securities (e.g., master limited partnerships, real estate investment trusts, and utilities) generally outperformed the higher quality companies (e.g., those with solid balance sheets, low leverage, the ability to generate and effectively allocate free cash flow, and strong returns on invested capital) and cyclical companies generally favored by the Funds. The trustees also noted, however, that the relative performance for certain Funds during the more historically customary market cycle preceding the 2008 financial crisis was quite strong.
    The general trend of stronger 1-year and 3-year relative risk-adjusted performance and weaker 5-year and 10-year relative risk-adjusted performance manifested itself for Royce Pennsylvania Mutual Fund (“PMF”), Royce Small-Cap Value Fund (“RVV”), Royce Micro-Cap Fund (“RMC”), and Royce Low-Priced Stock Fund (“RLP”). For example, the Sharpe Ratios for PMF ranked in the 1st, 1st, 3rd, and 3rd quartiles in its Morningstar category for the 1-year, 3-year, 5-year, and 10-year periods, respectively, ended December 31, 2018. In addition, the Sharpe Ratios for RVV ranked in the 1st, 2nd, 4th, and 4th quartiles in its Morningstar category during the applicable time periods. Finally, the Sharpe Ratios for both RMC and RLP ranked in the 1st, 3rd, 4th, and 4th quartiles in their respective Morningstar categories for the 1-year, 3-year, 5-year, and 10-year periods, respectively, ended December 31, 2018.
    Royce Special Equity Fund (“RSE”), on the other hand, produced strong relative risk-adjusted performance during each of the 1-year, 3-year, 5-year, and 10-year periods ended December 31, 2018, ranking within the 1st Sharpe Ratio quartile in its Morningstar category for the applicable 1-year and 3-year periods and within the 2nd Sharpe Ratio quartile in its Morningstar category for the applicable 5-year and 10-year periods.
    Royce Total Return Fund (“RTR”) and Royce Opportunity Fund (“ROF”) differed from the general trend by producing weaker relative risk-adjusted performance during the 1-year period (RTR: 3rd quartile; ROF: 4th quartile) ended December 31, 2018 and stronger relative risk-adjusted performance during the 3-year (RTR and ROF: 1st quartile), 5-year (RTR: 2nd quartile; ROF: 3rd quartile), and 10-year (RTR and ROF: 2nd quartile) periods ended December 31, 2018.
    Royce Global Financial Services Fund (“RFS”) also differed from the general trend by producing stronger relative risk-adjusted performance during the 3-year and 10-year periods (i.e., 1st quartile) ended December 31, 2018 and weaker relative risk-adjusted performance during the 1-year and 5-year periods (i.e., 3rd quartile) ended December 31, 2018.
    Royce Premier Fund (“RPR”) and Royce Dividend Value Fund (“RDV”) produced stronger relative risk-adjusted performance during the 3-year period (RPR: 1st quartile; RDV: 2nd quartile) ended December 31, 2018 and weaker relative risk-adjusted performance during the 1-year (RPR and RDV: 4th quartile), 5-year (RPR: 3rd quartile; RDV: 4th quartile), and 10-year periods (RPR: 4th quartile; RDV: 3rd quartile) ended December 31, 2018.
    Royce Smaller-Companies Growth Fund (“RVP”) also differed from the above-referenced trends, with its Sharpe Ratio ranking in the 4th quartile in its Morningstar category for the 1-year, 3-year, 5-year, and 10-year periods ended December 31, 2018.
    Although Royce International Premier Fund (“RIP”) has been in existence for less than 10 years, it demonstrated extremely strong relative risk-adjusted performance for the 1-year, 3-year, and 5-year periods ended December 31, 2018, with its Sharpe Ratio ranking within the 1st quartile in its Morningstar category during such periods.

    The Board also noted that the peer groups included in the Broadridge materials provided to them for a number of Funds may not be appropriate for performance comparisons and that R&A had augmented the data provided to the Board throughout the years by including performance information for other funds that R&A believes are more comparable to those Funds.
    In addition to the risk–adjusted performance of each Fund, the Board also reviewed and considered the absolute total returns for each Fund, down market performance and, for Funds in existence for such periods, long-term performance records over periods of 10 years or longer. The Board also considered it important to look beyond the current snapshot of performance as of December 31, 2018 and therefore examined extended performance histories for each Fund using monthly rolling average return periods through March 31, 2019. The Board also noted that a majority of the Funds outperformed their respective benchmarks for at least a majority of the monthly rolling average annual return periods during the 3-year, 5-year, and 10-year periods ended March 31, 2019.
    The Board noted that R&A manages a number of funds that invest in micro-cap, small-cap, and mid-cap issuers, many of which had outperformed their benchmark indexes and their competitors during the periods prior to the U.S. Federal Reserve’s near zero interest rate policy and related market interventions as well as in more recent periods as referenced above. Although the Board recognized that past performance is not necessarily an indicator of future results, it found that R&A had the necessary qualifications, experience and track record in managing equity mutual funds to manage each Fund. The Board determined that R&A continued to be an appropriate investment adviser for each Fund and concluded that the performance of PMF supported the approval of the continuance of the Investment Advisory Agreement for each Fund.

Cost of the services provided and profits realized by R&A from its relationship with each Fund:

The Board considered the cost of the services provided by R&A and the profits realized by R&A from its relationship with each Fund. As part of the analysis, the Board discussed with R&A its methodology in allocating its costs to each Fund and concluded that R&A’s allocations were reasonable. The Board noted that at times in the past R&A had closed certain of the Funds to new investors because of the rate of growth in Fund assets. The Board concluded that R&A’s profits with respect to each Fund were reasonable in relation to the nature and quality of services provided.

The extent to which economies of scale would be realized as the Funds grow and whether fee levels would reflect such economies of scale:

The Board considered whether there have been economies of scale in respect of the management of each Fund, whether each Fund has appropriately benefited from any economies of scale and whether there is potential for realization of any further economies of scale. The Board noted the time and effort involved in managing portfolios of small- and micro-cap stocks and that they did not involve the same efficiencies as do portfolios of large-cap stocks. The Board also noted that in 2004 breakpoints were added to the investment advisory fees for all of the then-existing Funds except PMF (PMF’s fee schedule already had breakpoints) and that the investment advisory fees for all Funds organized since 2004 included breakpoints. The Board further noted the reduced contractual breakpoint levels for each Fund, other than PMF, that became effective as of July 1, 2017. The trustees concluded that the current fee structure for each Fund was reasonable and that the relevant shareholders sufficiently participated in economies of scale.

Comparison of services to be rendered and fees to be paid to those under other investment advisory contracts, such as contracts of the same and other investment advisers or other clients:

The Board reviewed the investment advisory fee paid by each Fund and compared both the services to be rendered and the fees to be paid under the Investment Advisory Agreements to other contracts

94 | The Royce Funds 2019 Semiannual Report to Shareholders

Board Approval of Investment Advisory Agreements

of R&A and to contracts of other investment advisers to registered investment companies investing in micro-, small-, and mid-cap stocks, as provided by Broadridge. The trustees noted that, except for PMF and RIP, the contractual advisory fee rate for each Fund exceeded the median of its Broadridge-assigned peers. The Board noted the importance of the net expense ratio in measuring a fund’s efficiency, particularly in light of the variations in the mutual fund industry as to which entity is responsible for particular types of expenses.
    The Board noted that the net expense ratios for RLP, RDV, and RIP ranked within the 2nd quintile among their respective Broadridge-assigned peers. The trustees further noted that the net expense ratios for PMF and ROF ranked within the middle quintile among their respective Broadridge-assigned peers.
    Although the net expense ratio for the Investment Class shares for RTR, RSE, RVP, and RVV fell within the 4th quintile among their respective Broadridge-assigned peers, the trustees noted that the net expense ratios for RTR (6 basis points), RSE (9 basis points), and RVV (11 basis points) were not significantly higher than their respective peer group medians. The trustees further noted that the average net expense ratio for the 274 small-cap funds in the Morningstar small-cap category (oldest share class only, non-institutional, non-index, non-ETF funds with Rule 12b-1 fees of 0.25% or less) was 1.17%. Such average net expense ratio was only 1 basis point lower than those of RTR and RSE, 4 basis points lower than that of RVP, and 7 basis points lower than that of RVV. Overall, the trustees believed that the net expense ratios for these 4th quintile Funds were reasonable in light of these factors.
    The Board noted that the remaining Funds (i.e., RPR, RMC, and RFS) had 5th quintile net expense ratios among their respective Broadridge-assigned peers. Although these rankings can be attributed in large part to the investment advisory fees for these Funds, such fees are consistent with those of other R&A-advised open-end funds.
    While the trustees noted that RPR’s net expense ratio of 1.17% was 16 basis points higher than the median of its Broadridge-assigned peer group, they emphasized that such net expense ratio was actually equal to the average net expense ratio for the 274 small-cap funds in the Morningstar small-cap category (oldest share class only, non-institutional, non-index, non-ETF funds with Rule 12b-1 fees of 0.25% or less). With respect to RMC, the Board noted that its net expense ratio of 1.49% was 21 basis points higher than the median of its Broadridge-assigned peer group but only 8 basis points higher than the average net expense ratio for the 35 non-institutional, non-ETF, domestic funds with weighted average market capitalizations of less than $1 billion within the Morningstar database. With respect to RFS, the trustees noted that its net expense ratio of 1.49% was 21 basis points higher than the median of its Broadridge-assigned peer group. The trustees further noted that RFS was the only Fund that did not offer Investment Class shares and that the Service Class shares used for purposes of this expense analysis are subject to a Rule 12b-1 fee of 25 basis points, which skews the resulting comparisons. In light of the foregoing, the trustees noted that the net expense ratio of RFS was very much in line with those of its Broadridge-assigned peers. The Board further noted that the contractual investment advisory fee rate for each of RPR, RMC, and RFS is consistent with those of other Funds that invest primarily in small-cap equity securities. After taking into consideration that the level of work necessary to invest in domestic and/or international micro-cap and small-cap equity securities is significantly greater than that necessary to invest in larger-cap securities, the Board noted that the basis point differentials in investment advisory fees, which in large measure give rise to the generally higher net expense ratios for RPR, RMC, and RFS, were appropriate for those Funds.
    The Board also noted that R&A manages each Fund in an active fashion. The industry accepted metric for measuring how actively an equity portfolio is managed is called “active share.” In particular, active share measures how much the holdings of an equity portfolio differ from the holdings of its appropriate passive benchmark index. At the extremes, a portfolio with no holdings in common with the benchmark would have 100% active share, while a portfolio that is identical to the benchmark would have 0% active share. R&A presented several analyses to the Board which demonstrated that mutual funds with high active share scores had higher expense ratios than mutual funds with lower active share scores due to the resources required for the active management of those funds. The trustees noted that PMF had an active share of 88%, four Funds had active shares between 90% and 94%, and seven Funds had active shares of 96% or greater for the year ended December 31, 2018.
    The Board further noted that R&A has waived, both during the year ended December 31, 2018 and during earlier periods, investment advisory fees for numerous Funds in order to maintain expense ratios at competitive levels and acknowledged R&A’s intention to continue this expense limitation practice. The Board also noted lower contractual asset breakpoints for each Fund other than PMF became effective as of July 1, 2017. The trustees also considered fees charged by R&A to institutional and other clients and noted that, given the greater levels of services that R&A provides to registered investment companies such as the Funds as compared to other accounts, each Fund’s advisory fees compared favorably to these other accounts.
    No single factor was cited as determinative to the decision of the trustees. Rather, after weighing all of the considerations and conclusions discussed above, the entire Board, including all the non-interested trustees, determined to approve the continuation of the Investment Advisory Agreement for each Fund, concluding that a contract continuation on the existing terms for each Fund was in the best interests of the shareholders of each Fund and that each Fund’s investment advisory fee rate was reasonable in relation to the services provided.

The Royce Funds 2019 Semiannual Report to Shareholders | 95

Results of Shareholders Meetings

Royce Micro-Cap Opportunity Fund
At a Special Meeting of Shareholders held on May 28, 2019, Royce Micro-Cap Opportunity Fund’s (“Micro-Cap Opportunity”) shareholders approved the following:

PROPOSAL	FOR	AGAINST	ABSTAIN
to approve a Plan of Reorganization of The Royce Fund, on behalf of Micro-Cap Opportunity and Royce Opportunity Fund (“Opportunity”), whereby all of the assets of Micro-Cap Opportunity would be transferred to Opportunity in exchange for Opportunity’s assumption of all of the liabilities of Micro-Cap Opportunity and Opportunity’s issuance to Micro-Cap Opportunity of shares of beneficial interest of Opportunity.	808,688	600	4,978

Royce Small-Cap Leaders Fund
At a Special Meeting of Shareholders held on May 28, 2019, Royce Small-Cap Leaders Fund’s (“Small-Cap Leaders”) shareholders approved the following:

PROPOSAL	FOR	AGAINST	ABSTAIN
to approve a Plan of Reorganization of The Royce Fund, on behalf of Small-Cap Leaders and Royce Pennsylvania Mutual Fund (“Pennsylvania Mutual”), whereby all of the assets of Small-Cap Leaders would be transferred to Pennsylvania Mutual in exchange for Pennsylvania Mutual’s assumption of all of the liabilities of Small-Cap Leaders and Pennsylvania Mutual’s issuance to Small-Cap Leaders of shares of beneficial interest of Pennsylvania Mutual.	4,073,109	686,796	133,059

Royce Small/Mid-Cap Premier Fund
At a Special Meeting of Shareholders held on May 28, 2019, Royce Small/Mid-Cap Premier Fund’s (“Small/Mid-Cap Premier”) shareholders approved the following:

PROPOSAL	FOR	AGAINST	ABSTAIN
to approve a Plan of Reorganization of The Royce Fund, on behalf of Small/Mid-Cap Premier and Royce Pennsylvania Mutual Fund (“Pennsylvania Mutual”), whereby all of the assets of Small/Mid-Cap Premier would be transferred to Pennsylvania Mutual in exchange for Pennsylvania Mutual’s assumption of all of the liabilities of Small/Mid-Cap Premier and Pennsylvania Mutual’s issuance to Small/Mid-Cap Premier of shares of beneficial interest of Pennsylvania Mutual.	7,155,817	93,139	415,423

Royce Low-Priced Stock Fund
At a Special Meeting of Shareholders that was originally opened on May 28, 2019 and adjourned to June 27, 2019, Royce Low-Priced Stock Fund’s (“Low-Priced Stock”) shareholders approved the following:

PROPOSAL	FOR	AGAINST	ABSTAIN
to approve a Plan of Reorganization of The Royce Fund, on behalf of Low-Priced Stock and Royce Micro-Cap Fund (“Micro-Cap”), whereby all of the assets of Low-Priced Stock would be transferred to Micro-Cap in exchange for Micro-Cap’s assumption of all of the liabilities of Low-Priced Stock and Micro-Cap’s issuance to Low-Priced Stock of shares of beneficial interest of Micro-Cap.	12,464,159	1,372,300	1,993,730

96 | The Royce Funds 2019 Semiannual Report to Shareholders

Notes to Performance and Other Important Information

The thoughts expressed in this report concerning recent market movements and future prospects for small company stocks are solely the opinion of Royce at June 30, 2019, and, of course, historical market trends are not necessarily indicative of future market movements. Statements regarding the future prospects for particular securities held in the Funds’ portfolios and Royce’s investment intentions with respect to those securities reflect Royce’s opinions as of June 30, 2019 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. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and /or Russell ratings or underlying data and no party may rely on any Russell Indexes and / or Russell ratings and / or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. The Russell 2000 Index 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 2000 Value and Growth Indexes consist of the respective value and growth stocks within the Russell 2000 as determined by Russell Investments. 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 unmanaged, capitalization-weighted index of the 2,500 smallest publicly traded U.S. companies in the Russell 3000 index. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. The MSCI ACWI Small Cap Index is an unmanaged, capitalization-weighted index of global small-cap stocks. Index returns include net reinvested dividends and/or interest income. The MSCI ACWI ex USA Large Cap Index is an unmanaged, capitalization-weighted index of global large-cap stocks, excluding the United States. Index returns include net reinvested dividends and/or interest income. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index. Returns for the Russell 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. For the Morningstar Small Blend Category: ^© 2019 Morningstar. All Rights Reserved. The information regarding the category in this piece is: (1) is proprietary to Morningstar and/ or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. 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, LLC.

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.

Disclosure of Portfolio Holdings

The Funds’ complete portfolio holdings are also available on Exhibit F to Form N-PORT, which filings are made with the SEC within 60 days of the end of the first and third fiscal quarters. The Funds’ Form N-PORT filings are available on the SEC’s website at http://www.sec.gov.

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About The Royce Funds	Contact Us
Unparalleled Knowledge + Experience Pioneers in small-cap investing, with 45+ years of experience, depth of knowledge, and focus. Independent Thinking The confidence to go against consensus, the insight to uncover opportunities others might miss, and the tenacity to stay the course through market cycles.	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
Specialized Approaches US, international, and global investment strategies that pursue approaches with different risk profiles. Unwavering Commitment Our team of 18 portfolio managers have significant personal investments in the strategies they manage.	ACCOUNT INFORMATION Speak with a representative about: • Your account, transactions, and forms (800) 841-1180
	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
	AUTOMATED ACCOUNT INFORMATION 24-hour Automated Telephone Service (800) 787-6923

Item 2. Code(s) of Ethics.Not applicable to this semi-annual report.

Item 3. Audit Committee Financial Expert.Not applicable to this semi-annual report.

Item 4. Principal Accountant Fees and Services.Not applicable to this semi-annual report.

Item 5. Audit Committee of Listed Registrants.Not Applicable.

Item 6. 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 period covered by this report.

Item 12. Exhibits.Attached hereto.

(a)(1) Not applicable to this semi-annual report.

(a)(2) Separate certifications by the Registrant’s Principal Executive Officer and Principal Financial Officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.

(a)(3) Not Applicable

(b) Separate certifications by the Registrant’s Principal Executive Officer and Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE ROYCE FUND

BY:/s/ Christopher D. Clark

Christopher D. Clark

President

Date: August 27, 2019

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/ Christopher D. Clark BY: /s/ Peter K. Hoglund

Christopher D. Clark Peter K. Hoglund

President Chief Financial Officer

Date: August 27, 2019 Date: August 27, 2019