UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-03599
Name of Registrant: The Royce Fund
Address of Registrant: 745 Fifth Avenue
New York, NY 10151
Name and address of agent for service: | John E. Denneen, Esquire | |
745 Fifth Avenue | ||
New York, NY 10151 |
Registrant's telephone number, including area code: (212) 508-4500
Date of fiscal year end: December 31
Date of reporting period: January 1, 2020 - December 31, 2020
Item 1. Reports to Shareholders.
The Royce Funds 2020 Annual
Review and Report to Shareholders
December 31, 2020
Royce Dividend Value Fund
Royce Global Financial Services Fund
Royce International Premier 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
Table of Contents
This page is not part of the The Royce Funds 2020 Annual Report to Shareholders | 1 |
2020’S MARKET: DICKENSIAN DAYS
In a year that saw so much sorrow met by equal amounts of quiet heroism, it seems almost fitting that the market was subject to extremes of its own. For equity investors, particularly for those in small-cap stocks, the timing of these excesses was fortuitous, going from the worst of times through February and March to the best in 2020’s last three months. After beginning the year with the largest ever quarterly loss in its more than 40-year history (-30.6%), the small-cap Russell 2000 Index proceeded through two positive quarters before enjoying its best showing ever in the fourth quarter, when it gained 31.4%. While we have witnessed many extremes and oddities in our nearly five decades of small cap investing, we have never seen a year quite like 2020.
Prior to 2020, small cap had never experienced record-setting extremes in the same year during any decline and rebound period. The speed with which the market crashed and recovered was truly extraordinary. Moreover, from its 3/18/20 low through the end of December, the Russell 2000 rallied 101.3%, though deeper-than-average declines have always been followed by steeper than average recoveries. When all was said and done, the small-cap index rose a more than respectable 20.0% for the calendar year.
2020 also saw the striking contrast of the public health crisis with the buoyant stock market, which left many wondering if the market was detached from reality and therefore sure to fall.
However, it’s important to remember that the market is forward looking and often sees past difficulties, even formidable ones, that it deems temporary. And as we have often reminded investors, stocks are financial instruments. The level of support they receive from the Federal Reserve can often impact valuations as much as, if not more than, current economic conditions. During the pandemic, the Fed took several aggressively supportive steps to shore up the economy and financial system. These unprecedented efforts also led U.S. Treasury yields to all-time lows while pushing stock valuations close to all-time highs. This explains why, when viewed through the lens of 1% 10-year Treasury yields, small cap valuations in general look relatively reasonable to us—and thus may have farther to climb.
Having said that, we are also mindful that 2020 was a much better year for the markets than the economy or corporate profits, and that 2021 may well be its mirror image. The triple-digit advance for the Russell 2000 off the March trough has assuredly priced in much, though we think not all, of the improvement in profits many companies are likely to experience in 2021. To be sure, the U.S. economy appears to be decidedly in coiled spring mode. Numerous comparisons have already been made to the Roaring Twenties, when a wave of spending and other economic activity was spurred by the nearly coterminous ends of the flu epidemic and World War I. As vaccinations continue to roll out, 2021 may see more positive headlines for the economy than we do for the stock market.
2 | This page is not part of the The Royce Funds 2020 Annual Report to Shareholders |
LETTER TO OUR SHAREHOLDERS
Russell 2000 Peak-to-Peak Returns for Market Cycles Following Drawdowns of 15% or More from 12/31/78-12/31/20 |
Past performance is no guarantee of future results.
THE OLD CURIOSITY SHOP: WHERE ARE WE IN THE SMALL-CAP CYCLE?
Long-time readers will recall that we like to compare the current small cap market cycle to the patterns of the past to provide some guidance about potential returns. A historical analysis of small-cap cycles also signals the likelihood of further small cap advances. Going back to the Russell 2000’s 1979 inception, we looked at the 12 previous small-cap market cycles to get a sense of where we may be in the current one. We looked at the returns from the peak of one cycle to the next. While we found considerable variance in these peak-to-peak performances, they did cluster within a fairly narrow return range. The chart above shows the peak-to-peak returns for all 12 full market cycles (as well as what the Russell 2000 gained in the current cycle through the end of 2020). The average return for the 12 peak-to-peak periods was 43.8%, with seven of those 12 periods enjoying returns in the range of 38-59%. Contrasting those performances with the current small cap cycle’s 17.3% return since the most recent index peak suggests to us that the current small cap cycle has room to run—especially in a period of economic expansion.
To contextualize our optimistic outlook, it is worth noting that we expect the pace of small-cap’s advance to slow markedly. Although the average first-year return for the 12 previous market troughs was 58.1%, the average return for the subsequent 12 months was 13.6% for the eight peak-to-peak periods that lasted two years or more—still a historically high result.
A TALE OF TWO ASSET CLASSES
Small caps pulled ahead of large caps in 2020’s bullish fourth quarter after lagging by a wide margin through the first three. We see this as a sustainable leadership shift. While small-cap valuations sit at the high end of their historical range, they are nonetheless lower than average when compared with interest rates and notably less expensive than large caps. The chart below uses one of our preferred valuation metrics—LTM EV/EBIT (the last 12 months earnings versus earnings before interest and taxes, excluding companies with no earnings). This chart shows one crucial result of small cap’s long-term underperformance versus large caps: at the end of 2020, small caps were trading versus large caps at one of the cheapest relative valuations we have seen in 20 years. You would need to go back to the 2000 Internet Bubble to find a wider valuation disparity between the two.
Russell 2000 vs. Russell 1000 Median LTM EV/EBIT1 (ex. Negative EBIT Companies) from 12/31/00 to 12/31/20 |
1 Earnings before interest and taxes.
Past performance is no guarantee of future results.
Source: FactSet
This page is not part of the The Royce Funds 2020 Annual Report to Shareholders | 3 |
LETTER TO OUR SHAREHOLDERS
In addition, the long-running demand for stocks in the NASDAQ-100 Index, in particular the well-known FAAMG (Facebook, Apple, Amazon, Microsoft, and Google) group, has led to an unprecedented level of market capitalization concentration. If investors reallocated even a relatively small percentage of their assets out of these current favorites and into small cap, it would bring significant buying power to the asset class. Along with the prospect of a rebounding global economy, these factors underpin our optimism.
Finally, in addition to the relative valuation discount and the potential benefit from a rebalancing of investor interest, there is data to support the case for small-cap superiority during periods of robust economic growth. Small caps are more sensitive to economic cycles than large caps and thus often outperform their larger siblings in strengthening economies. We compared performance for the Russell 2000 and Russell 1000 when nominal GDP growth was 5% or higher over the last 20 years and found that small caps beat large caps 63% of the time in these periods—and did so by an average return margin of 4.4%. The current consensus for 2021 forecasts that nominal GDP growth will exceed 6%, which should be a supportive environment for small caps.
GREAT EXPECTATIONS FOR SMALL-CAP LEADERSHIP
If small-caps do lead large caps, which areas look likely to lead within the small-cap universe? For some time, many market observers have been expecting value stocks to take the leadership reins of small cap. Yet even as the Russell 2000 Value Index enjoyed a highly impressive fourth quarter in 2020, edging past the Russell 2000 Growth Index (+33.4% versus +29.6%), it also trailed its growth counterpart in calendar 2020 by one of the largest margins on record, up 4.6% versus 34.6%. 2020 marked the tenth of the last 12 calendar years of growth’s superiority.
However, we do see some signs that a change may be coming. The same robust economic conditions that tend to favor small caps also have historically rewarded value. Specifically, when nominal GDP growth has exceeded 5% (the current consensus expectation for 2021 and 2022), small-cap value outperformed small-cap growth 68% of the time by an average of more than 4%. We would welcome such a leadership shift. At the same time, however, we are more confident in the likelihood of ongoing leadership for cyclicals (a status they assumed within small cap in May 2020) than we are in a sustained leadership stint for small-cap value.
Rolling 12 Month Returns of Russell 2000 Pure Value vs Russell 2000 Pure Growth Indexes From 12/31/00 to 12/31/20 |
Past performance is no guarantee of future results.
When we talk to companies, they tell us about growing order books, scarcity of inventory, and strong, low-debt balance sheets, all of which support the idea that a cyclical rebound is under way. In addition to these supportive cyclical conditions, value will also need market leadership from Financials, Materials, and perhaps Energy to pull ahead of growth. These three, often referred to as the “reflationary” sectors, would benefit from sustained inflation and/or commodity price strength, both of which might occur if the dollar continues to weaken. While all of that seems plausible to us, this sort of macro projection lies beyond our core competencies. So while it’s true that there is substantial overlap between value and cyclicals, we feel more secure about the prospects for the latter. More important for our investors, the small-cap value index is not the best proxy for how our own value-oriented strategies invest, and we think these portfolios should be able to do well regardless of how the value index performs.
With all of this in mind, we have been actively investing in a variety of diverse cyclical companies. For example, we have been focusing on those businesses that look poised to benefit from those changes in consumer behaviors that have been precipitated or accelerated by the coronavirus. We also continue to invest in companies that help to manage the increased complexity of logistics for other businesses. The increased popularity of outdoor leisure activities, specifically for recreational vehicles and boating, has led us to manufacturers that should benefit from the sustainably higher demand for products and aftermarket services. Ongoing strength in the housing market is seeding opportunities across several of our strategies as more and more people can live farther from their employers, particularly in the absence of a daily commute. Workers requiring additional or reworked space for home offices is creating demand for new homes and home remodeling as well as consistently reliable connectivity. We therefore hold homebuilding, building
4 | This page is not part of the The Royce Funds 2020 Annual Report to Shareholders
LETTER TO OUR SHAREHOLDERS
Taking the long view, 88% of all rolling three-year return periods since 1945 have produced positive returns for small caps. The current probability might be even higher, due to below average valuations for small caps in the context of 1% Treasury bond yields, an accommodative Federal Reserve, and a recovering economy in the U.S . and for most of the globe.
products, and manufactured housing companies. We also own a number of companies in the semiconductor capital equipment space across several of our strategies as the secular shift toward work from home is intersecting fortuitously with both the longstanding trend toward more widespread use of semis and current highly favorable supply/demand dynamics.
HARD TIMES OR GOOD TIMES AHEAD?
Our outlook hinges on two percentages, 84% and 88%. Each can help to answer two of the most relevant investor questions for 2021. The first is, do we think that small caps will see a correction during the year? This seems probable. Taking the long view (as is our wont), in 84% of the past 25 calendar years, small caps have experienced a decline of at least 10%. It’s important to keep this in perspective by recalling two aspects of volatility: it is a regularly recurring feature of the small-cap landscape, one that investors should expect, and its sudden movements can benefit a disciplined active manager. The current environment somewhat increases our expectations for volatility. Needless to say, the market endured above-average volatility in 2020, and stocks do not typically transition seamlessly from high volatility periods to more placid ones. The three years that followed the wildly tumultuous 2008, for example, each experienced volatility spikes of their own. In addition, as we write this letter in late January, we note that the small-cap market is seeing elements of
frothiness, including a surge in SPAC (Special Purpose Acquisition Corporations) issuance and considerable intra-day volatility in certain stocks favored by day traders. While not a reason for any long-term concern, these developments echo past excesses.
The second question is, do we think that small caps can advance over the next several years? That seems likely to us. Again, taking the long view, 88% of all rolling three-year return periods since 1945 have produced positive returns for small caps, according to data from Center for Research into Security Prices, where the CRSP 6-10 serves as the small-cap proxy. The current probability might be even higher, due to the aforementioned below average valuations for small caps in the context of 1% Treasury bond yields, an accommodative Federal Reserve, and a recovering economy in the U.S. and for most of the globe. Even against this constructive backdrop, we expect selectivity to be key. The economy is likely to continue rebounding in an uneven fashion as growth revs up and ultimately stabilizes. Regardless, however, of the shape our collective “new normal” takes, we think 2021 will not only be different enough from pre-2020 to create potential advantages for disciplined active management but should also be a rewarding one for select cyclicals in the small-cap universe.
Sincerely,
Charles M. Royce Chairman, Royce Investment Partners
| Christopher D. Clark Chief Executive Officer, and Co-Chief Investment Officer, Royce Investment Partners | Francis D. Gannon Co-Chief Investment Officer, Royce Investment Partners |
February 1, 2021
This page is not part of the The Royce Funds 2020 Annual Report to Shareholders | 5 |
Performance and Expenses | ||||||||||
As of December 31, 2020 | ANNUAL OPERATING EXPENSES (%) | |||||||||
1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | 45-YR/SINCE INCEPTION | INCEPTION DATE | GROSS | NET | |
Royce Dividend Value Fund | 4.47 | 4.33 | 9.96 | 8.03 | 8.03 | N/A | 8.45 | 5/3/04 | 1.52 | 1.34 |
Royce Global Financial Services Fund | 15.25 | 7.41 | 11.37 | 9.89 | 7.81 | N/A | 8.48 | 12/31/03 | 1.84 | 1.52 |
Royce International Premier Fund | 15.74 | 10.67 | 13.40 | 9.29 | N/A | N/A | 9.29 | 12/31/10 | 1.58 | 1.44 |
Royce Micro-Cap Fund | 24.50 | 11.16 | 11.64 | 5.20 | 6.57 | 8.86 | 10.86 | 12/31/91 | 1.34 | 1.24 |
Royce Opportunity Fund | 26.52 | 9.09 | 15.49 | 10.47 | 9.13 | 10.73 | 12.26 | 11/19/96 | 1.22 | 1.22 |
Royce Pennsylvania Mutual Fund | 14.08 | 9.26 | 13.90 | 9.61 | 8.18 | 9.92 | 13.681 | N/A | 0.94 | 0.94 |
Royce Premier Fund | 11.50 | 10.25 | 15.33 | 9.91 | 9.33 | 10.74 | 11.76 | 12/31/91 | 1.19 | 1.19 |
Royce Small-Cap Value Fund | -6.47 | 0.87 | 5.51 | 4.14 | 5.27 | N/A | 8.20 | 6/14/01 | 1.55 | 1.49 |
Royce Smaller-Companies Growth Fund | 49.26 | 18.34 | 16.38 | 11.59 | 9.07 | N/A | 12.47 | 6/14/01 | 1.54 | 1.49 |
Royce Special Equity Fund | 7.43 | 2.93 | 9.24 | 7.49 | 7.68 | 9.88 | 8.57 | 5/1/98 | 1.21 | 1.21 |
Royce Total Return Fund | 3.82 | 3.91 | 9.92 | 8.47 | 7.20 | 8.69 | 10.23 | 12/15/93 | 1.23 | 1.23 |
INDEX | ||||||||||
Russell 2000 | 19.96 | 10.25 | 13.26 | 11.20 | 8.91 | 8.74 | N/A | N/A | N/A | N/A |
Russell Microcap | 20.96 | 8.78 | 11.89 | 10.55 | 7.34 | 8.95 | N/A | N/A | N/A | N/A |
Russell 2000 Value | 4.63 | 3.72 | 9.65 | 8.66 | 6.92 | 8.54 | N/A | N/A | N/A | N/A |
Russell 2500 | 19.99 | 11.33 | 13.64 | 11.97 | 9.55 | 9.44 | N/A | N/A | N/A | N/A |
MSCI ACWI ex USA Small Cap | 14.24 | 4.59 | 9.37 | 5.95 | 6.42 | 8.50 | N/A | N/A | N/A | N/A |
1For Royce Pennsylvania Mutual Fund, the average annual total return shown is for the 45-year period ended 12/31/20.
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.royceinvest.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. 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, Small-Cap Value, and Smaller-Companies Growth Funds through April 30, 2021. 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.
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. Each series of The Royce Fund is subject to market risk–the possibility that common stock prices will decline, sometimes sharply and unpredictably, over short or extended periods of time. Such declines may be caused by various factors, including market, financial, and economic conditions, governmental or central bank actions, and other factors, such as the recent COVID-19 pandemic, that may not be directly related to the issuer of a security held by a Fund. This pandemic could adversely affect global market, financial, and economic conditions in ways that cannot necessarily be foreseen. 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 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.
6 | This page is not part of the The Royce Funds 2020 Annual Report to Shareholders
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.
We prefer to examine results that include up and down market phases—primarily by looking at rolling return periods. Our rationale for doing so 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.
We believe the success of an investment approach is best evaluated by 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 respective benchmarks. We calculate the Sharpe Ratio for each relevant Fund and the appropriate 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.
Royce Funds Relative Risk Adjusted Returns: Monthly Rolling Sharpe Ratios
5- and 10-Year Monthly Rolling Sharpe Ratios–20 Years through 12/31/20
Included are all Royce Funds with at least 20 years of history.
Royce Micro-Cap Fund’s primary benchmark is the Russell Microcap Index. Royce Opportunity and Special Equity Funds’ primary benchmark is the Russell 2000 Value. Royce Pennsylvania Mutual, Premier, and Total Return Funds’ primary benchmark is the Russell 2000.
The Sharpe 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.
This page is not part of the The Royce Funds 2020 Annual Report to Shareholders | 7
MANAGERS’ DISCUSSION (UNAUDITED)
Royce Dividend Value Fund (RDV)
Chuck Royce
Miles Lewis, CFA
FUND PERFORMANCE
Royce Dividend Value Fund gained 4.5% for 2020, an underwhelming result that lagged each of its benchmarks as the Russell 2000 and Russell 2500 Indexes both advanced 20.0% for the calendar year. For context, we note that dividend payers as a group underperformed for the full year within each of these indexes. Nonetheless, we were disappointed by the Fund’s results for 2020.
WHAT WORKED… AND WHAT DIDN’T
Four of the Fund’s 10 equity sectors finished 2020 in the black, with Materials and Industrials making the biggest positive impacts by a wide margin. Conversely, Energy and Consumer Discretionary detracted most. At the industry level, capital markets (Financials) and metals & mining (Materials) were the biggest contributors while energy equipment & services (Energy) and airlines (Industrials) were the biggest detractors.
The portfolio’s top contributor was KKR& Co., a leading alternative asset manager offering investment strategies such as private equity, energy, credit, infrastructure, real estate, and hedge funds. Its shares began to rebound in March before receiving a lift from the August announcement of strong earnings and increased fee-paying assets under management. Franco-Nevada is a Canada-based royalty company that focuses mainly on gold, as well as platinum, oil and gas, and other assets. As a gold streaming and royalty company, it does not mine or extract. Instead, Franco-Nevada funds mining companies upfront in exchange for buying gold and other precious metals from them at pre-set prices and percentages—usually at a much lower prices than the spot price. With ample reserves and rising commodity prices, the company is well positioned for a sustained rally in precious metals prices, a view buttressed by its strong second-quarter earnings and optimistic guidance from management for 2021. Quaker Chemical, a global leader in industrial process fluids, followed in third place. Its business benefited from the global industrial recovery toward the end of 2020, when all of its business segments returned to growth, driven primarily by the global rebound in automotive production.
After positioning the portfolio for accelerating growth at the beginning of 2020, we had to quickly shift gears when the coronavirus outbreak and resulting lockdowns and other constraints plunged the U.S. and much of the globe rapidly into recession—and the equity markets into bear territory. Each of the Fund’s five top-detracting positions comes from an industry that sustained especially negative and prolonged impacts from the pandemic. Norway’s TGS-NOPEC Geophysical, which provides geophysical seismic data to oil exploration companies, was the largest detractor for 2020. We like its business model but also believe that structural changes in oil & gas exploration, as well as secular shifts toward cleaner energy, may ultimately crimp its long-term growth, so we reduced our stake in 2020. Our decision to exit oil and gas contract driller Helmerich & Payne was largely rooted in the company’s downbeat outlook for the energy industry and the likely negative effect the downturn would have on its business through the next several quarters. Plummeting sales led us to sell our positions in footwear manufacturer Caleres and women’s dress shoe retailer Designer Brands, as neither looked capable of a complete recovery to us given the challenges afflicting brick-and-mortar retailers. We also sold our position in low-cost carrier Allegiant Travel for similar reasons as few industries were harder hit than airlines in 2020—and a rebound could take a considerable amount of time.
Relative underperformance for 2020 was due to stock selection and sector allocation, with the former having a slightly larger impact. Because of our lower exposure and, to a lesser degree, stock selection, Health Care detracted most while our lower exposure and stock selection negatively impacted Information Technology. Dividend-payers are scarce in both sectors. Ineffective stock picks and lower exposure also hurt relative results in Consumer Discretionary. Conversely, our lower exposure to Real Estate helped versus the small-cap benchmark, as did our lower weighting and savvy stock selection in Utilities and our larger weighting in Materials.
Top Contributors to Performance | Top Detractors from Performance | |||||
For 2020 (%)1 | For 2020 (%)2 | |||||
KKR & Co. | 1.89 | TGS-NOPEC Geophysical | -1.50 | |||
Franco-Nevada | 1.82 | Caleres | -1.26 | |||
Quaker Chemical | 1.79 | Helmerich & Payne | -1.19 | |||
Evercore Cl. A | 1.68 | Designer Brands Cl. A | -1.07 | |||
Graco | 1.16 | Allegiant Travel | -1.03 | |||
1 Includes dividends | 2 Net of dividends | |||||
CURRENT POSITIONING AND OUTLOOK
Despite a strong run by small caps, we remain optimistic about the asset class and believe that dividend-paying small- and smid-cap stocks represent attractive relative value. Our optimism is also rooted in what we anticipate will be a stronger economic recovery than many think due to pent up services demand, limited excess capacity, a healthy U.S. consumer, and strong corporate balance sheets. Stronger-than-expected operating leverage should also aid this recovery as many companies have permanently reduced their cost structures. Our overall outlook for cyclicals is therefore bright. The vaccine roll-out should spur economic growth, though we suspect it will initially be unevenly distributed—and that is where we think active managers can offer an edge. The ability to recognize patterns, understand industry dynamics, and evaluate management teams should all prove crucial in such a climate. We continue to look for what we see as strong divided-paying businesses trading at attractive valuations due to what appear to be temporary issues.
8 | The Royce Funds 2020 Annual Report to Shareholders
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) | TICKER SYMBOLS RYDVX RDVIX RDIIX RDVCX |
Performance and Expenses
Average Annual Total Return (%) Through 12/31/20
JUL-DEC 20201 | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | SINCE INCEPTION (5/3/04) | |
RDV | 23.76 | 4.47 | 4.33 | 9.96 | 8.03 | 8.03 | 8.45 |
Annual Gross Operating Expenses: 1.52% Annual Net Operating Expenses: 1.34% |
1Not annualized
Relative Risk Adjusted Returns: Monthly Rolling Sharpe Ratios
Since Inception Through 12/31/20
On a monthly rolling risk-adjusted basis, the Fund outperformed the Russell 2000 in 75% of all 10-year periods and 48% of all 5-year periods.
PERIODS BEATING THE INDEX | FUND AVG1 | INDEX AVG1 | ||||
10-year | 60/80 | 75% | 0.54 | 0.52 | ||
5-year | 67/140 | 48% | 0.54 | 0.52 |
1Average of monthly rolling Sharpe Ratios over the specified periods.
Morningstar Style Map™ As of 12/31/20
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 89 for additional information.
Value of $10,000
Invested on 5/3/04 as of 12/31/20 ($)
Top 10 Positions
% of Net Assets
KBR | 4.2 |
HEICO Corporation Cl. A | 4.0 |
FLIR Systems | 3.8 |
AptarGroup | 3.7 |
Carlyle Group | 3.3 |
Applied Industrial Technologies | 3.3 |
Quaker Chemical | 3.2 |
Franco-Nevada | 3.1 |
Worthington Industries | 3.0 |
Lindsay Corporation | 3.0 |
Portfolio Sector Breakdown
% of Net Assets
Financials | 29.0 |
Industrials | 28.6 |
Materials | 16.4 |
Information Technology | 10.0 |
Consumer Discretionary | 8.0 |
Health Care | 3.5 |
Energy | 1.7 |
Real Estate | 0.6 |
Consumer Staples | 0.1 |
Cash and Cash Equivalents | 2.1 |
Calendar Year Total Returns (%)
YEAR | RDV |
2020 | 4.5 |
2019 | 29.8 |
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 |
Upside/Downside Capture Ratios
Periods Ended 12/31/20 (%)
UPSIDE | DOWNSIDE | |
10-Year | 81 | 91 |
From 6/30/04 (Start of Fund’s First Full Quarter) | 86 | 82 |
Portfolio Diagnostics
Fund Net Assets | $75 million |
Number of Holdings | 67 |
Turnover Rate | 4% |
Average Market Capitalization1 | $5,150 million |
Weighted Average P/E Ratio2,3 | 21.8x |
Weighted Average P/B Ratio2 | 2.8x |
Active Share4 | 98% |
U.S. Investments (% of Net Assets) | 67.8% |
Non-U.S. Investments (% of Net Assets) | 30.1% |
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 (12% of portfolio holdings as of 12/31/20). |
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.royceinvest.com. All performance and risk information reflects results of the Service Class (its oldest class). 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, 2021. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to-date performance for 2020. 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 (Russell 2000). 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. 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 2020 Annual Report to Shareholders | 9
MANAGERS’ DISCUSSION (UNAUDITED)
Royce Global Financial Services Fund (RFS)
Chuck Royce
Chris Flynn
FUND PERFORMANCE
Royce Global Financial Services Fund gained 15.3% in 2020, a fine absolute return that nonetheless lagged the 20.0% advance for its primary benchmark, the Russell 2000 Index, and the 16.3% increase for its global small-cap benchmark, the MSCI ACWI Small Cap Index, for the same period. The Fund ceded the relative advantage it had over both indexes during the more bullish second half of 2020 after losing less than each benchmark for the year-to-date period ended 6/30/20 (down 7.0% compared to a loss of 13.0% for the Russell 2000 and a decline of 12.8% for the MSCI ACWI Small Cap). In the second half of 2020, the Fund advanced 23.9%—again, a strong absolute return—versus respective gains of 37.9% and 33.5% for the domestic and global small-cap indexes.
WHAT WORKED… AND WHAT DIDN’T
The portfolio’s top-contributing position in 2020 was U.S. Global Investors, an asset manager that primarily runs international and domestic equities, fixed income, and precious metals focused portfolios. Like most asset managers, US Global’s business rebounded strongly through the dynamic upswing for most of the globe’s equity markets following the March lows. This rebound featured a risk-on mentality that helped to lift the company’s stock as its unrealized losses have narrowed materially through 9/30/20 to a nearly negligible amount. The second top contributor was MarketAxess Holdings, which operates an electronic, multi-dealer trading platform for investment grade and high-yield corporate and emerging market bonds. Its business benefited from robust year-over-year increases in the average daily volume of high-yield and investment grade bond trading as well as from strong network benefits, especially in open trading. We also think the firm can continue to reap the rewards of credit market dislocation, which seems to have driven market share gains for the company.
The top detractor on a position basis was Air Lease. As a lessor of aircraft, Air Lease���s business suffered greatly as flights ground to a halt, an unprecedented event, even for the firm’s highly experienced management team. The drying up of the asset-backed securities market further hindered Air Lease’s ability to sell its aging aircraft to its joint ventures, making it more difficult for the firm to manage the age of its fleet and to strategically retain clients from its competitors. Concerned about the likelihood of a prolonged road to recovery for the airline industry, we opted to exit our position in June.
Also detracting was Capital City Bank Group, which operates Capital City Bank, a regional player with branches in Florida, Georgia, and Alabama. Its net interest margin declined steadily throughout 2020, and its ratio of reserves to loans held for investment was much lower than its industry peers, both of which appeared to keep investors selling its stock. Although we reduced our stake in March, we held shares in the hope of a recovery rooted in our confidence that regional banks should bounce back in 2021. We maintained our position in BOK Financial for similar reasons. This leading Oklahoma-based bank saw its business suffer from exposure to the oil & gas, retail commercial real estate, and healthcare industries.
Top Contributors to Performance | Top Detractors from Performance | |||||
For 2020 (%)1 | For 2020 (%)2 | |||||
U.S. Global Investors Cl. A | 2.83 | Air Lease Cl. A | -1.27 | |||
MarketAxess Holdings | 2.69 | Capital City Bank Group | -0.94 | |||
Sprott | 2.65 | BOK Financial | -0.76 | |||
Tel Aviv Stock Exchange | 2.55 | Eagle Point Income | -0.74 | |||
Canaccord Genuity Group | 2.45 | Garrison Capital | -0.72 | |||
1 Includes dividends | 2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK
We continued to prune the number of positions in the portfolio throughout 2020, moving from 68 to 61 holdings as we focused on the business models in which we had the highest conviction. The portfolio has always leaned more toward capital markets businesses, including traditional and alternative asset managers, as well as having exposure to insurance and companies that specialize in financial technology. While these industries have faced challenges of their own over the last several years, near-zero interest rates have created even more significant difficulties for banks, as have increased loan loss provisions caused by the pandemic. However, we are cautiously optimistic about our bank holdings. Regional banks in particular have held up very well during the pandemic, consistent with our thesis that the industry’s risk profile was reduced dramatically following the Financial Crisis and that robust capital levels would prove a source of strength. We expect earnings to be strong in 2021 as provisions for credit losses drop sharply, loan growth resumes, and stronger economic growth steepens the yield curve.
More generally, we are optimistic about the prospects for global small caps, including those in financial services. Three factors underpin our optimism: First, we expect a stronger recovery than many think due to pent up services demand, limited excess capacity, a healthy U.S. consumer, and strong corporate balance sheets; second, stronger-than-expected operating leverage should accentuate the recovery as many companies have permanently reduced their cost structures; and finally, we see reasonable, and in some cases quite attractive, valuations for many of our holdings. The vaccine roll-out should spur economic growth, though we suspect it will initially be unevenly distributed—and that is where we think active managers can offer an edge. The ability to recognize patterns, understand industry dynamics, and evaluate management teams should all prove crucial in such a climate.
10 | The Royce Funds 2020 Annual Report to Shareholders
|
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) | TICKER SYMBOLS RYFSX RGFIX |
Performance and Expenses
Average Annual Total Return (%) Through 12/31/20
JUL-DEC 20201 | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | SINCE INCEPTION (12/31/03) | |
RFS | 23.88 | 15.25 | 7.41 | 11.37 | 9.89 | 7.81 | 8.48 |
Annual Gross Operating Expenses: 1.84% | Annual Net Operating Expenses: 1.52% |
1Not annualized
Morningstar Style Map™ As of 12/31/20
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 89 for additional information.
Value of $10,000
Invested on 12/31/03 as of 12/31/20 ($)
Top 10 Positions
% of Net Assets
Tel Aviv Stock Exchange | 4.1 |
Sprott | 3.9 |
Popular | 3.7 |
Franco-Nevada | 3.5 |
FirstService Corporation | 3.4 |
Canaccord Genuity Group | 3.3 |
First Citizens BancShares Cl. A | 3.1 |
Altus Group | 3.0 |
U.S. Global Investors Cl. A | 3.0 |
E-L Financial | 2.9 |
Portfolio Industry Breakdown
% of Net Assets
Capital Markets | 53.2 |
Banks | 14.4 |
Real Estate Management & Development | 8.7 |
Insurance | 4.6 |
Metals & Mining | 3.6 |
Software | 3.5 |
IT Services | 3.1 |
Professional Services | 2.4 |
Diversified Financial Services | 2.3 |
Health Care Providers & Services | 0.9 |
Thrifts & Mortgage Finance | 0.9 |
Closed-End Funds | 0.8 |
Investment Companies | 0.0 |
Cash and Cash Equivalents | 1.6 |
Upside/Downside Capture Ratios
Periods Ended 12/31/20 (%)
UPSIDE | DOWNSIDE | |
10-Year | 85 | 83 |
Fund’s First Full Quarter (12/31/03) | 85 | 81 |
Calendar Year Total Returns (%)
YEAR | RFS |
2020 | 15.3 |
2019 | 24.2 |
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 |
Portfolio Country Breakdown1,2
% of Net Assets
United States | 47.4 |
Canada | 23.8 |
United Kingdom | 6.7 |
Israel | 4.1 |
New Zealand | 2.4 |
Brazil | 2.2 |
Bermuda | 1.7 |
South Africa | 1.7 |
India | 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 | $34 million |
Number of Holdings | 61 |
Turnover Rate | 4% |
Average Market Capitalization1 | $2,592 million |
Weighted Average P/E Ratio2,3 | 20.2x |
Weighted Average P/B Ratio2 | 1.9x |
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 (15% of portfolio holdings as of 12/31/20). |
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.royceinvest.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, 2021. 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 2020. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark (Russell 2000). 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. 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 2020 Annual Report to Shareholders | 11
|
MANAGER’S DISCUSSION (UNAUDITED)
Royce International Premier Fund (RIP)
Mark Rayner, CA
FUND PERFORMANCE
Royce International Premier Fund advanced 15.7% for 2020, beating its benchmark, the MSCI ACWI ex-US Small Cap Index, which gained 14.2% for the same period. The Fund also outpaced the benchmark for the three-, five-, and matching 10-year/since inception (12/31/10) periods ended 12/31/20. We are happy to celebrate the Fund’s 10-year anniversary during another year of strong absolute and relative performance.
WHAT WORKED… AND WHAT DIDN’T
Seven of the Fund’s nine equity sectors made positive impacts on 2020’s performance, with Information Technology and Industrials leading by wide margins. Energy and Communication Services were the only detractors, and each was a low weighting throughout the year.
The top contributor for 2020 was Japan’s Daifuku, which makes material handling equipment, such as automated storage systems, conveyors, and automatic sorters. It has six main segments whose aggregate revenues have made Daifuku the global number one in material handling. During 2020, investors seemed to selectively focus on certain end market exposures, most notably e-commerce in its intralogistics segment, one of the few areas to benefit from the global economic lockdown. More recently, its semiconductor warehousing segment attracted attention as semis saw renewed demand. Yet other areas of the business were weak in 2020, such as its airport segment. So while the company posted a 14% increase in operating profits on 10% higher revenues at mid-year, we did not think this was enough to justify the performance of its stock, which led us to trim our position.
Japan’s TKC Corporation provides tax-related software and services to smaller companies and their tax accountants. The company’s solutions convert customers’ financial data into financial statements, accounting records, and tax return data to ensure that their returns are fully compliant and filed on time. TKC’s solutions free its customers from tedious bookkeeping, allowing them to spend more time growing their business, and its clients are 50% more likely to be profitable than other companies. TKC delivered robust results for the fiscal year ended 9/30/20, with operating profits up 22% year-over-year. The company also benefited from digitalization, where intensifying requirements to file taxes electronically and the creation of ‘smart municipalities’ in Japan provide growing demand for its services. Yet we believe the market has not fully caught on to TKC’s quality and long-term potential—it remains virtually uncovered by the sell-side, for example—as evidenced by its low valuation.
The top detracting position was the U.K.’s Hyve Group, an event organizing company that we exited in March. Given our preference for what we think are quality companies with strong balance sheets, we typically choose to remain invested when temporary negative events unfold. However, we had begun to exit our position in Hyve during February 2020. With revenues set to fall dramatically, Hyve’s negative working capital requirement—a key asset when the business is growing—would work against it. We also feared that its trade conference business would suffer longstanding negative effects from a business world less keen to travel and more used to developing virtual relationships.
TGS-NOPEC Geophysical is the world’s largest geoscience data company, producing, developing, and procuring primarily offshore seismic data that it sells to oil and gas companies. A well-managed, asset light business, TGS was nevertheless adversely affected by the dramatically reduced demand for energy in 2020. Yet the company will end its fiscal year with a substantial cash balance and continued to pay dividends in 2020, factors that drove us to add shares.
Looking at attribution for the calendar year, sector selection had the most significant impact on outperformance. In particular, the Fund’s low relative exposure and strong stock selection in Real Estate, as well as in Financials (though to a lesser extent), had the largest positive impact on relative results. Conversely, Materials and Communication Services detracted from relative performance due to the Fund’s lower relative exposures and stock performance.
Top Contributors to Performance | Top Detractors from Performance | |||||
For 2020 (%)1 | For 2020 (%)2 | |||||
Daifuku | 1.95 | Hyve Group | -1.31 | |||
TKC Corporation | 1.82 | TGS-NOPEC Geophysical | -1.26 | |||
IMCD | 1.64 | Loomis | -1.13 | |||
As One | 1.44 | OdontoPrev | -0.95 | |||
Benefit One | 1.33 | Restore | -0.94 | |||
1 Includes dividends | 2 Net of dividends | |||||
CURRENT POSITIONING AND OUTLOOK
During 2020, most investors gravitated toward companies offering either ‘thematic growth’ or ‘cyclical value’ as the effects of the pandemic unfolded. Our modest outperformance against the benchmark was achieved even though our quality-oriented businesses typically do not fit this bill. We stuck to our core belief that long-run investment strategies should focus on companies with high and consistent returns on capital that enable investors to benefit from the long-term effects of compounding. We therefore sought to use pandemic-driven volatility to build existing positions and, equally important, to add new high-quality companies to the portfolio. We also believe that certain pandemic-driven changes will be structural, such as the increased digitalization of corporate work flows, and we will continue investing in companies poised to benefit from these changes. More important, we will continue using the same bottom-up discipline, rooted in our belief that high-quality companies that compound shareholder value are the most powerful and reliable long-term drivers of strong performance.
12 | The Royce Funds 2020 Annual Report to Shareholders
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) | TICKER SYMBOLS RYIPX RIPNX RINPX RIPIX |
Performance and Expenses
Average Annual Total Return (%) Through 12/31/20
JUL-DEC 20201 | 1-YR | 3-YR | 5-YR | 10-YR | SINCE INCEPTION (12/31/10) | |
RIP | 25.00 | 15.74 | 10.67 | 13.40 | 9.29 | 9.29 |
Annual Gross Operating Expenses: 1.58% | Annual Net Operating Expenses: 1.44% |
1Not annualized
Relative Returns: Monthly Rolling Average Annual Return Periods
Since Inception Through 12/31/20
On a monthly rolling basis, The Fund outperformed the MSCI ACWI x USA SC in 100% of all 10-year periods; 100% of all 5-year periods; and 74% of all 1-year periods.
PERIODS BEATING THE INDEX | FUND AVG (%)1 | INDEX AVG (%)1 | ||||
10-year | 1/1 | 100% | 9.3 | 5.9 | ||
5-year | 61/61 | 100% | 9.1 | 5.6 | ||
1-year | 81/109 | 74% | 8.9 | 5.2 |
1Average of monthly rolling average annual total returns over the specified periods.
Morningstar Style Map™ As of 12/31/20
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 89 for additional information.
Value of $10,000
Invested on 12/31/10 as of 12/31/20 ($)
Top 10 Positions
% of Net Assets
TKC Corporation | 3.1 |
IPH | 2.9 |
IMCD | 2.5 |
Meitec Corporation | 2.5 |
Croda International | 2.5 |
Victrex | 2.5 |
Bravura Solutions | 2.5 |
Intertrust | 2.4 |
Hansen Technologies | 2.2 |
Restore | 2.2 |
Portfolio Sector Breakdown
% of Net Assets
Industrials | 42.0 |
Information Technology | 22.0 |
Health Care | 10.1 |
Materials | 7.6 |
Financials | 4.9 |
Communication Services | 2.5 |
Energy | 1.5 |
Consumer Discretionary | 1.3 |
Real Estate | 1.2 |
Preferred Stock | 1.8 |
Cash and Cash Equivalents | 5.1 |
Upside/Downside Capture Ratios
Periods Ended 12/31/20 (%)
UPSIDE | DOWNSIDE | |
10-Year | 104 | 80 |
Fund’s First Full Quarter | ||
(12/31/10) | 104 | 80 |
Calendar Year Total Returns (%)
YEAR | RIP |
2020 | 15.7 |
2019 | 34.2 |
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 | 18.6 |
United Kingdom | 15.3 |
Australia | 11.6 |
Switzerland | 10.0 |
Sweden | 9.4 |
Germany | 6.7 |
Netherlands | 4.9 |
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 | $1,133 million |
Number of Holdings | 61 |
Turnover Rate | 21% |
Average Market Capitalization1 | $2,387 million |
Weighted Average P/E Ratio2,3 | 34.7x |
Weighted Average P/B Ratio2 | 3.9x |
Active Share4 | 98% |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (3% of portfolio holdings as of 12/31/20). |
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.royceinvest.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 12/31/19 and 12/31/20 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 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, 2021. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to-date performance for 2020. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark (MSCI ACWI x USA SC). 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. 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 2020 Annual Report to Shareholders | 13
MANAGERS’ DISCUSSION (UNAUDITED)
Jim Stoeffel
Brendan Hartman
FUND PERFORMANCE
Royce Micro-Cap Fund delivered a strong absolute and relative return of 24.5% for 2020, outpacing both of its benchmarks, the Russell Microcap and the Russell 2000 Indexes, which returned 21.0% and 20.0%, respectively, for the same period. This year’s strong performance also allowed the Fund to beat both indexes for the three-year period ended 12/31/20.
WHAT WORKED… AND WHAT DIDN’T
Five of the 10 equity sectors in which the Fund held investments finished 2020 in the black. Information Technology, the Fund’s largest weighting, generated the largest positive impact by far, followed by Health Care and Consumer Discretionary. Conversely, Energy, Financials, and Consumer Staples detracted most. At the industry level, two of the top contributors were in Information Technology—semiconductors & semiconductor equipment and electronic equipment, instruments & components—while construction & engineering (Industrials) followed. On the other hand, banks and thrifts & mortgage (both in Financials) detracted, with energy equipment & services (Energy) sandwiched in the middle.
The top contributing security was Ameresco. The company provides services for energy efficiency, asset sustainability, infrastructure upgrades, and renewable energy. Its strong performance was driven by the maturation of a number of early-stage projects, the addition of a new CFO, exceeding earnings expectations, and widespread support for sustainability projects. Ameresco is considered the premier company that provides green energy, efficiency, and sustainability solutions. Also contributing to results was online advertising technology firm Magnite. The company was created this year following a merger between digital online advertising exchange platform Rubicon and Telaria. Magnite benefited from increased advertising spending in online channels, particularly in the growing connected television sector. Diagnostic blood testing company Chembio Diagnostics was also additive. The company’s performance was driven by its receipt of FDA Emergency Use Authorization for its rapid COVID-19 antibody finger prick blood test. However, we reduced our position meaningfully after its shares appreciated sharply due to uncertainty regarding the effectiveness and accuracy of COVID-19 tests.
The position that detracted most for the year was Newpark Resources, which provides drilling fluid systems and composite matting systems used in oilfield and other commercial markets. The company was negatively impacted by collapsing oil prices as economic activity declined due to the pandemic. We exited the position earlier this year as the company had financial leverage at the top end of our comfort level. Astronics Corporation also hampered results for the calendar year. Astronics is a New York based aerospace electronics corporation known for its lighting and electronics integrations on military, commercial, and business aircraft and semiconductor test systems. The company’s shares underperformed in 2020 due to the prospects for aerospace suppliers being severely impacted by both the COVID-19 travel shutdown and the grounding of the Boeing 737 MAX airplane. Investar Holding, which provides commercial banking products to individuals and small- to medium-sized south Louisiana businesses, negatively impacted performance. The company was hurt by a combination of the public health crisis and its exposure to the energy industry, which suffered through most of 2020.
Sector allocation decisions contributed to relative outperformance versus the Russell Microcap Index for 2020—stock selection was marginally negative. Our lower exposure and savvy stock selection in Financials gave the Fund a sizable relative advantage, as did our higher exposure and, to a lesser degree, stock selection in Information Technology. In addition, our lower weighting and stock picks aided in Real Estate. Conversely, our lower exposure to Health Care and, to a lesser degree, our ineffective stock selection hurt in the sector. Stock picking also hampered relative results for Industrials and Materials.
Top Contributors to Performance | Top Detractors from Performance | |||||
For 2020 (%)1 | For 2020 (%)2 | |||||
Ameresco Cl. A | 1.90 | Newpark Resources | -1.08 | |||
Magnite | 1.85 | Astronics Corporation | -0.85 | |||
Chembio Diagnostics | 1.80 | Investar Holding | -0.79 | |||
LightPath Technologies Cl. A | 1.66 | TriState Capital Holdings | -0.77 | |||
American Superconductor | 1.64 | Ardmore Shipping | -0.73 | |||
1 Includes dividends | 2 Net of dividends | |||||
CURRENT POSITIONING AND OUTLOOK
The country has made its way through a contentious election, and, despite the tumultuous transition, we expect policy priorities to rapidly become clear. We are hopeful that the most arduous tax proposals on profits and capital will be difficult to implement. However, we do expect that priorities will shift to infrastructure, with an emphasis on environmental concerns, as regulatory burdens and spending increase. Although our investment decisions remain company specific, we will continue to take into account the rapidly changing political environment as an important investment consideration. We are pleased that the news on effective treatments for COVID-19 remains increasingly positive as numerous vaccines have been approved. Despite the fits and starts in distribution, we believe the effect will be highly positive. The bottom line: Our value orientation tends to make our portfolio pro cyclical. We believe the combination of the gradual reopening of the world’s economies and an increase in fiscal stimulus will provide a cyclical tailwind to the positive attributes in our portfolio investments.
14 | The Royce Funds 2020 Annual Report to Shareholders
|
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) | TICKER SYMBOLS RYOTX RMCFX RYMCX |
Performance and Expenses
Average Annual Total Return (%) Through 12/31/20
JUL-DEC 20201 | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | 25-YR | SINCE INCEPTION (12/31/91) | |
RMC | 40.86 | 24.50 | 11.16 | 11.64 | 5.20 | 6.57 | 8.86 | 9.68 | 10.86 |
Annual Gross Operating Expenses: 1.34% Annual Net Operating Expenses: 1.24% |
1Not annualized
Morningstar Style Map™ As of 12/31/20
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 89 for additional information.
Value of $10,000
Invested on 6/30/00 (Russell Microcap Index Inception) as of 12/31/20 ($)
Top 10 Positions | ||
% of Net Assets | ||
Magnite | 1.9 | |
Citi Trends | 1.7 | |
B. Riley Financial | 1.7 | |
American Superconductor | 1.6 | |
Ameresco Cl. A | 1.4 | |
PAR Technology | 1.4 | |
AXT | 1.3 | |
CIRCOR International | 1.3 | |
Agilysys | 1.3 | |
Cohu | 1.3 | |
|
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Information Technology | 26.6 | |
Industrials | 23.3 | |
Consumer Discretionary | 13.5 | |
Financials | 13.2 | |
Health Care | 13.1 | |
Communication Services | 3.1 | |
Materials | 2.9 | |
Energy | 1.7 | |
Real Estate | 1.4 | |
Consumer Staples | 0.1 | |
Cash and Cash Equivalents | 1.1 |
Calendar Year Total Returns (%) | ||
YEAR | RMC | |
2020 | 24.5 | |
2019 | 21.2 | |
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 |
Upside/Downside Capture Ratios | ||||
Periods Ended 12/31/20 (%) | ||||
UPSIDE | DOWNSIDE | |||
10-Year | 77 | 98 | ||
From 6/30/00 (Russell Microcap Index Inception) | 92 | 83 | ||
Portfolio Diagnostics | ||
Fund Net Assets | $357 million | |
Number of Holdings | 130 | |
Turnover Rate | 25% | |
Average Market Capitalization1 | $605 million | |
Weighted Average P/B Ratio2 | 2.4x | |
Active Share3 | 90% | |
U.S. Investments (% of Net Assets) | 86.1% | |
Non-U.S. Investments (% of Net Assets) | 12.8% |
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 | 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.royceinvest.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 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 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, 2021. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to-date performance for 2020. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark (Russell Microcap Index). 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. 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 2020 Annual Report to Shareholders | 15
MANAGERS’ DISCUSSION (UNAUDITED) |
Royce Opportunity Fund (ROF) |
Bill Hench Suzanne Franks Rob Kosowsky, CFA |
FUND PERFORMANCE |
Royce Opportunity Fund advanced 26.5% in 2020 outpacing its primary benchmarks, the Russell 2000 Value (+4.6%) and the Russell 2000 (+20.0%) Indexes for the calendar year. The Fund’s performance edge in 2020 also helped it to maintain impressive long-term relative advantages. Opportunity outperformed the Russell 2000 Value for the three-, five-, 10-, 15-, 20-year, and since inception (11/19/96) periods ended 12/31/20 while also outperforming the Russell 2000 for each of these spans except the three- and 10-year periods. |
WHAT WORKED... AND WHAT DIDN’T |
Eight of the portfolio’s 11 equity sectors were positive contributors to 2020’s performance, with Information Technology, Consumer Discretionary, and Health Care making especially outsized impacts. Energy, Financials, and Utilities each detracted from performance. Semiconductors & semiconductor equipment, a perennially large weighting in Information Technology, led the portfolio’s industry groups, followed by health care providers & services (Health Care), household durables (Consumer Discretionary), and electronic equipment, instruments & components, another industry in Information Technology. Conversely, two groups a piece in Energy and Financials were the top detractors at the industry level: oil, gas & consumable fuels, banks, energy equipment & services, and thrifts & mortgage finance.
Owens & Minor was the top-contributing position for 2020. The company distributes medical and surgical supplies throughout the U.S. It also provides supply chain management, logistics, technology services, and testing and monitoring supplies for diabetics. The company saw high demand in 2020, particularly for its PPE products, while executing effectively. Each of these factors helped Owens & Minor to post significant gains in adjusted net income and revenues. Magnite, the world’s largest independent sell-side advertising platform, provides technology for businesses to monetize their content across all screens and formats, including desktop, mobile, and audio. The market was highly enthusiastic about the company’s success in the growth of OTT, or ‘over the top,’ media, which bypasses the cable, broadcast, and satellite TV platforms that traditionally control or distribute this kind of content. Optoelectronics specialist II-VI was another success in 2020. The company makes lasers and optical components chiefly for telecommunication and data center applications. II-VI reported a positive quarter in May 2020, driven both by new products, such as facial recognition lasers, and higher demand for data communications equipment spurred by the dramatic increase in people working from home. Its shares rose further in November after profits exceeded expectations.
Car and truck rental specialist Hertz Global Holdings was the biggest detractor at the position level for the year. Our initial analysis showed strong turnaround potential, an evaluation that changed significantly with the outbreak of the coronavirus. The pandemic’s negative impact further exposed the risks of Hertz’s cash-poor balance sheet and its heavy reliance on business at airports. We began to exit our position in the spring before the firm filed for Chapter 11. Astronics Corporation manufactures specialized lighting, control systems, and electronics for aircraft. While we are confident in the long-term prospects for the aerospace industry—increasing our exposure in 2020—we reduced our position in Astronics as its price declined. We also exited our position in retail store operator Stage Stores in January 2020 following poor holiday season sales for most of its outlets in 2019.
For the calendar year, both sector allocation decisions and stock selection contributed to relative outperformance, with the former making the larger positive impact versus the Russell 2000 Value. Both our overweight and effective stock picking in Information Technology gave the Fund a sizable relative advantage, as did our lower exposure and, to a lesser degree, stock selection in Financials. Our larger weighting in Health Care, along with savvy stock picks, also helped. On the other hand, the portfolio’s exposure to Energy, its lower weighting in Consumer Staples, and its cash holdings all hurt relative results in 2020.
Top Contributors to Performance | Top Detractors from Performance | |||||
For 2020 (%)1 | For 2020 (%)2 | |||||
Owens & Minor | 3.14 | Hertz Global Holdings | -1.22 | |||
Magnite | 1.82 | Astronics Corporation | -0.86 | |||
II-VI | 1.62 | Stage Stores | -0.70 | |||
Lumber Liquidators Holdings | 1.39 | Independent Bank Group | -0.68 | |||
CareDx | 1.32 | Cross Country Healthcare | -0.66 | |||
1 Includes dividends | 2 Net of dividends | |||||
CURRENT POSITIONING AND OUTLOOK |
As we head into 2021, many are crediting liquidity, solely or mostly, for higher prices in stocks, commodities, and a host of other assets. Yet when we closely analyze individual companies and the overall environment, we also see tight inventories, significant pent-up demand in certain end markets, and the possible continuation of better employment numbers, the combination of which paints a brighter picture for small-cap prospects. At the same time, we face a number of less attractive challenges: contentious politics, indiscriminate money printing, and thorny trade issues top the list of risks. As always, we look for stocks that will improve over the life of our investment from the not-so-rosy condition in which we first find them to a better state (and higher price), typically via earnings improvement or recovery. A backdrop that includes better GDP growth, low rates, and ample liquidity should prove helpful in this task. |
16 | The Royce Funds 2020 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) | TICKER SYMBOLS RYPNX RYOFX ROFCX ROFIX ROFRX |
Performance and Expenses
Average Annual Total Return (%) Through 12/31/20
JUL-DEC 20201 | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | SINCE INCEPTION (11/19/96) | |
ROF | 54.39 | 26.52 | 9.09 | 15.49 | 10.47 | 9.13 | 10.73 | 12.26 |
Annual Operating Expenses: 1.22%
1 Not annualized
Relative Returns: Monthly Rolling Average Annual Return Periods
20 Years Through 12/31/20
On a monthly rolling basis, The Fund outperformed the Russell 2000 Value in 99% of all 10-year periods; 74% of all 5-year periods; and 53% of all 1-year periods.
PERIODS BEATING THE INDEX | FUND AVG (%)1 | INDEX AVG (%)1 | ||||
10-year | 120/121 | 99% | 9.5 | 8.0 | ||
5-year | 134/181 | 74% | 9.5 | 8.3 | ||
1-year | 121/229 | 53% | 11.9 | 9.1 |
1Average of monthly rolling average annual total returns over the specified periods.
Morningstar Style Map™ As of 12/31/20
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 89 for additional information.
Value of $10,000
Invested on 11/19/96 as of 12/31/20 ($)
Top 10 Positions | |
% of Net Assets | |
Magnite | 1.2 |
Alpha & Omega Semiconductor | 1.0 |
B. Riley Financial | 1.0 |
Air Lease Cl. A | 1.0 |
Herc Holdings | 0.9 |
Avid Technology | 0.9 |
Walker & Dunlop | 0.9 |
Livent Corporation | 0.9 |
Olin Corporation | 0.8 |
Owens & Minor | 0.8 |
Portfolio Sector Breakdown | |
% of Net Assets | |
Industrials | 21.9 |
Information Technology | 20.1 |
Consumer Discretionary | 14.0 |
Health Care | 11.8 |
Materials | 9.3 |
Financials | 8.7 |
Real Estate | 3.2 |
Energy | 2.4 |
Consumer Staples | 1.7 |
Communication Services | 1.5 |
Utilities | 0.4 |
Cash and Cash Equivalents | 5.0 |
Calendar Year Total Returns (%)
YEAR | ROF |
2020 | 26.5 |
2019 | 28.2 |
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 |
Upside/Downside Capture Ratios
Periods Ended 12/31/20 (%)
UPSIDE | DOWNSIDE | |
10-Year | 119 | 116 |
From 12/31/96 (Start of Fund’s First Full Quarter) | 126 | 117 |
Portfolio Diagnostics
Fund Net Assets | $1,309 million | |
Number of Holdings | 268 | |
Turnover Rate | 53% | |
Average Market Capitalization1 | $1,215 million | |
Weighted Average P/B Ratio 2 | 2.0x | |
Weighted Average P/S Ratio 3 | 1.0x | |
Active Share 4 | 87% | |
U.S. Investments (% of Net Assets) | 91.8% | |
Non-U.S. Investments (% of Net Assets) | 3.2% |
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 | 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.royceinvest.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 2020. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark (Russell 2000 Value). 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. 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 2020 Annual Report to Shareholders | 17
MANAGERS’ DISCUSSION (UNAUDITED)
Royce Pennsylvania Mutual Fund® (PMF)
Chuck Royce
Jay Kaplan, CFA
Lauren Romeo, CFA
Steven McBoyle
Miles Lewis, CFA
FUND PERFORMANCE
After beating its small-cap benchmark in each of the four previous calendar years, our flagship portfolio Royce Pennsylvania Mutual Fund fell behind the Russell 2000 in 2020, advancing 14.1% versus 20.0% for its small-cap benchmark. The Fund held on to certain long-term relative advantages, beating the Russell 2000 for the five-, 20-, 25-, 30-, 35-, and 40-year periods ended 12/31/20. Penn’s average annual total return for the 45-year period ended 12/31/20 was 13.7%, all under the portfolio management of Chuck Royce.
WHAT WORKED… AND WHAT DIDN’T
Seven of the portfolio’s 10 equity sectors finished 2020 in the black. Information Technology led by a large margin, followed by notably positive contributions for Health Care and Materials. Energy led the three sectors that detracted, followed by Financials and Real Estate. At the industry level, the top three contributors came from Information Technology: semiconductors & semiconductor equipment, software, and electronic equipment, instruments & components. Conversely, energy equipment & services (Energy) detracted most for the year, followed by banks and the thrifts & mortgage finance group, which are both in Financials.
The portfolio’s top-contributing position for 2020 was e-commerce retailer Etsy, which focuses on handmade or vintage items and craft supplies. Its business was growing at a steady pace prior to 2020, but revenues reached triple-digit rates in 2020’s fiscal second quarter and stayed enviably high in the third quarter. While much of its sales were attributable to face masks, the company also had success with several other major categories in 2020, including apparel, personal care, and homewares. Next came Alamos Gold, a Canadian gold mining company with operations at the development stage in Canada, Mexico, Turkey, and the U.S. Its stock began to recover in March and was later supported by improved fiscal third-quarter revenues and earnings as the company held the line on costs and enjoyed a sizable increase in its realized sales price of gold. We also like that Alamos paid off all of its debt in 2020 and increased its dividend, though we trimmed our stake as its price rose.
Offshore transport solutions specialist SEACOR Marine Holdings detracted most at the position level. In May, the company reported that it was anticipating a significant negative impact on revenues through the rest of 2020 as a result of the pandemic, which, along with plummeting oil and gas prices, greatly reduced demand for its services. We opted to sell our position in May. Another significant detractor, G-III Apparel Group sells outerwear and sportswear, has licensing agreements with several sports leagues and universities, and operates retail stores. Faced with rapidly declining sales in this last segment, the company has been restructuring operations, permanently closing Wilsons Leather and G.H. Bass stores. Uncertain about its ability to rebound, we sold our shares between April and August.
Relative to the Russell 2000, the Fund’s disadvantage in 2020 came solely from stock selection—sector allocation decisions were additive. However, our lower weighting in Health Care, along with a lower impact from poor stock picks, hurt relative results most on a sector basis. The portfolio’s very low weighting in biotechnology, a stalwart performer within the index, was a major source of underperformance in Health Care. Ineffective stock selection hindered relative performance in Industrials—where our higher weighting was a positive—as well as in Consumer Discretionary, where our lower exposure hurt.
Conversely, stock picking in Financials had an appreciably positive effect, bolstered by our lower weighting in this lagging sector—especially in the underperforming banks group. The Fund’s low weighting in Real Estate, another lagging sector within the Russell 2000, helped as well, as did our stock selection in the sector (albeit to a lesser degree). The portfolio’s lack of exposure to Utilities provided another advantage versus the benchmark.
Top Contributors to Performance | Top Detractors from Performance | |||||
For 2020 (%)1 | For 2020 (%)2 | |||||
Etsy | 1.03 | SEACOR Marine Holdings | -0.74 | |||
Alamos Gold Cl. A | 0.95 | G-III Apparel Group | -0.59 | |||
PAR Technology | 0.79 | Genworth MI Canada | -0.59 | |||
Bandwidth Cl. A | 0.78 | Webster Financial | -0.56 | |||
Trupanion | 0.66 | TGS-NOPEC Geophysical | -0.54 | |||
1 Includes dividends | 2 Net of dividends | |||||
CURRENT POSITIONING AND OUTLOOK
The positive news on vaccines was the critical element in the recent small-cap surge. The reality of vaccines has allowed investors to see past the current economic uncertainty to a tangible return to something like normal. These very encouraging developments seem to have led them to take a fresh look at those companies, particularly in more cyclical areas, that had been relatively neglected for the last few years. Many of these companies should receive an additional boost from ongoing monetary and fiscal stimulus, in particular from the anticipated increase in the latter. These measures will only add to the strength of the global economy, which was beginning to accelerate before the pandemic. Our outlook for cyclicals in 2021 and 2022 is therefore brighter than it was at the beginning of last year. Following the vaccine roll-out, all of these developments should support higher growth rates than we were looking for a year ago. However, growth is likely to be unevenly distributed—and that is where we think active managers can offer an edge. The ability to recognize patterns, understand industry dynamics, and evaluate management teams should all prove crucial in such a climate.
18 | The Royce Funds 2020 Annual Report to Shareholders
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) | TICKER SYMBOLS PENNX RYPFX RPMIX RYPCX RPMRX |
Performance and Expenses
Average Annual Total Return (%) Through 12/31/20
JUL-DEC 20201 | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | 25-YR | 30-YR | 35-YR | 45-YR | |
PMF | 31.97 | 14.08 | 9.26 | 13.90 | 9.61 | 8.18 | 9.92 | 10.53 | 11.26 | 10.74 | 13.68 |
Annual Operating Expenses: 0.94%
1 Not annualized
Morningstar Style Map™ As of 12/31/20
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 89 for additional information.
Value of $10,000
Invested on 12/29/78 (Russell 2000 Inception) as of 12/31/20 ($)
Top 10 Positions
% of Net Assets
First Citizens BancShares Cl. A | 1.2 |
Quaker Chemical | 1.2 |
MKS Instruments | 1.1 |
Morningstar | 1.0 |
Stella-Jones | 1.0 |
HEICO | 1.0 |
FLIR Systems | 0.9 |
PAR Technology | 0.9 |
KBR | 0.9 |
Colfax Corporation | 0.9 |
Portfolio Sector Breakdown
% of Net Assets
Industrials | 25.4 |
Information Technology | 24.7 |
Financials | 14.9 |
Health Care | 9.7 |
Consumer Discretionary | 9.1 |
Materials | 8.3 |
Real Estate | 2.4 |
Consumer Staples | 1.6 |
Communication Services | 1.5 |
Energy | 1.0 |
Cash and Cash Equivalents | 1.4 |
Calendar Year Total Returns (%)
YEAR | PMF |
2020 | 14.1 |
2019 | 26.6 |
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 |
Upside/Downside Capture Ratios
Periods Ended 12/31/20 (%)
UPSIDE | DOWNSIDE | |
10-Year | 90 | 94 |
From 12/31/78 (Russell 2000 Inception) | 89 | 73 |
Portfolio Diagnostics
Fund Net Assets | $1,916 million |
Number of Holdings | 278 |
Turnover Rate | 32% |
Average Market Capitalization1 | $2,724 million |
Weighted Average P/E Ratio 2,3 | 24.9x |
Weighted Average P/B Ratio 2 | 2.7x |
Active Share 4 | 87% |
U.S. Investments (% of Net Assets) | 89.1% |
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 (20% of portfolio holdings as of 12/31/20). |
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.royceinvest.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 2020. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark (Russell 2000). 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. 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 2020 Annual Report to Shareholders | 19
MANAGERS’ DISCUSSION (UNAUDITED)
Chuck Royce
Lauren Romeo, CFA
Steven McBoyle
FUND PERFORMANCE
Royce Premier Fund did well on an absolute basis in 2020, though it lagged its benchmark for the year, advancing 11.5% compared to 20.0% for the Russell 2000 Index, snapping a streak of four consecutive years of beating its benchmark. Relative results over longer-term periods were better as Premier tied its benchmark for the three-year period, while beating the small-cap index for the five-, 15-, 20-, 25-year, and since inception (12/31/91) periods ended 12/31/20. The leadership of low-quality stocks since the market’s mid-March bottom, including those with low returns on equity and/or no earnings, created a difficult environment for the Fund’s high-quality strategy.
WHAT WORKED… AND WHAT DIDN’T
For the full year, the largest sector contributor by far was Information Technology, followed by Health Care, a duo that led seven equity sectors with positive performance. Energy and Real Estate were the only two of the nine sectors where the Fund held investments that posted losses for the year.
Investment information specialist Morningstar was the top individual contributor for the year, though much of its advance came in the fourth quarter when its shares climbed more than 50% after the company reported solid quarterly operating results with expanding operating margins and notable revenue growth from recent acquisitions. We believe Morningstar’s leadership position in providing data, software, and other tools designed to improve investment decision making and serve advisors and financial institutions should only increase with a growing global investment class.
Quaker Chemical, a global leader in industrial process fluids, followed in second place. Its business was a direct beneficiary of the global industrial recovery toward the end of 2020, when all of its business segments returned to growth, driven primarily by the global rebound in automotive production. We believe the company is still in the early stages of a multi-year opportunity, especially because Quaker serves diverse industrial end markets on a global scale and is thus poised to benefit from a worldwide economic recovery as well as from its ongoing efforts to pay down debt and a possible return to the M&A market.
In a very difficult year for energy-related stocks, Canada’s Pason Systems was the portfolio’s largest individual detractor. The company, which provides oil field instrumentation largely for onshore rigs, suffered as U.S. rig counts plummeted along with the price of oil in the second quarter before managing a modest recovery in the fourth quarter. The company has a solid balance sheet, a pipeline of new products in the early stages of roll-out, and an excellent competitive position, which lead us to believe it can gain market share in the next energy rebound. We had less confidence in the long-term prospects for Norway’s TGS-NOPEC Geophysical, which we exited in October. The company provides geophysical marine seismic data to oil exploration companies and was the second-largest detractor on a position basis. While we like TGS-NOPEC’s business model, we believe that structural changes in oil & gas exploration, as well as secular shifts toward cleaner energy, will ultimately reduce its long-term growth and consequently the rate at which it can compound value.
The Fund’s relative disadvantage in 2020 was due entirely to lagging stock selection as sector allocation decisions were additive. Health Care led the detractors, mostly due to our underweight in this leading sector, though stock selection also hurt. The bulk of our underperformance came from having no exposure to the biotechnology industry, one of the best performing areas within small cap. Industrials was the second largest source of underperformance, owing to lackluster stock selection—sector allocation was positive. Conversely, Financials helped performance versus the Russell 2000 in 2020, largely due to superior stock selection, though underweighting this lagging sector also helped. The top relative industry contribution came from having no exposure to banks, which posted negative results for the year. Real Estate also contributed to relative results as we also were underweighted in that trailing sector.
Top Contributors to Performance | Top Detractors from Performance | |||||
For 2020 (%)1 | For 2020 (%)2 | |||||
Morningstar | 1.70 | Pason Systems | -1.77 | |||
Quaker Chemical | 1.45 | TGS-NOPEC Geophysical | -1.66 | |||
Cognex Corporation | 1.42 | CIRCOR International | -1.48 | |||
MKS Instruments | 1.36 | Kirby Corporation | -1.46 | |||
Ritchie Bros. Auctioneers | 1.30 | Genworth MI Canada | -1.22 | |||
1 Includes dividends | 2 Net of dividends | |||||
CURRENT POSITIONING AND OUTLOOK
We are guardedly optimistic about small caps enjoying a positive year in 2021. Based on history, it is rare for the asset class to see major declines in the absence of a recession or aggressive Fed actions, and neither looks likely in 2021. At the same time, highly positive expectations have driven the recent rally. While we suspect that this small-cap cycle has further to go, we also know that history suggests a 10-15% correction is more probable than not at some point in 2021. We are equally aware that the Fund lagged its benchmark in 2020, though that too follows a typical historical pattern. In the first year of market rebounds, the lowest profitability companies often outshine those with higher profitability. However, as market cycles progress, leadership often rotates to the type of higher profitability companies that Premier favors. We look forward to taking advantage of whatever volatility the market provides and are ready to invest in what we regard as superior businesses at temporarily depressed prices.
20 | The Royce Funds 2020 Annual Report to Shareholders
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) | TICKER SYMBOLS | RYPRX RPFFX RPFIX RPRCX RPRRX |
Performance and Expenses
Average Annual Total Return (%) Through 12/31/20
JUL-DEC 20201 | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | 25-YR | SINCE INCEPTION (12/31/91) | |
RPR | 28.57 | 11.50 | 10.25 | 15.33 | 9.91 | 9.33 | 10.74 | 11.44 | 11.76 |
Annual Operating Expenses: 1.19% |
1 Not annualized
Relative Returns: Monthly Rolling Average Annual Return Periods
20 Years Through 12/31/20
On a monthly rolling basis, The Fund outperformed the Russell 2000 in 71% of all 10-year periods; 59% of all 5-year periods; and 62% of all 1-year periods.
PERIODS BEATING THE INDEX | FUND AVG (%)1 | INDEX AVG (%)1 | |||||||
10-year | 86/121 | 71% | 10.1 | 8.8 | |||||
5-year | 106/181 | 59% | 10.3 | 8.8 | |||||
1-year | 143/229 | 62% | 11.4 | 9.5 |
1 Average of monthly rolling average annual total returns over the specified periods.
Morningstar Style Map™ As of 12/31/20
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 89 for additional information.
Value of $10,000
Invested on 12/31/91 as of 12/31/20 ($)
Top 10 Positions | |
% of Net Assets | |
Morningstar | 3.1 |
MKS Instruments | 3.0 |
Quaker Chemical | 2.8 |
Lincoln Electric Holdings | 2.8 |
Manhattan Associates | 2.7 |
John Bean Technologies | 2.7 |
Colfax Corporation | 2.6 |
Stella-Jones | 2.5 |
Cognex Corporation | 2.4 |
Haemonetics | 2.3 |
Portfolio Sector Breakdown | |
% of Net Assets | |
Industrials | 34.7 |
Information Technology | 24.4 |
Financials | 13.2 |
Materials | 9.4 |
Health Care | 6.5 |
Consumer Discretionary | 6.1 |
Real Estate | 1.9 |
Consumer Staples | 1.4 |
Cash and Cash Equivalents | 2.4 |
Calendar Year Total Returns (%)
YEAR | RPR |
2020 | 11.5 |
2019 | 34.1 |
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 |
Upside/Downside Capture Ratios
Periods Ended 12/31/20 (%)
UPSIDE | DOWNSIDE | |
10-Year | 87 | 86 |
From 12/31/91 (Start of | ||
Fund’s First Full Quarter) | 92 | 73 |
Portfolio Diagnostics
Fund Net Assets | $1,736 million |
Number of Holdings | 54 |
Turnover Rate | 23% |
Average Market Capitalization1 | $4,247 million |
Weighted Average P/E Ratio 2,3 | 34.6x |
Weighted Average P/B Ratio 2 | 3.4x |
Active Share 4 | 98% |
U.S. Investments (% of Net Assets) | 89.5% |
Non-U.S. Investments (% of Net Assets) | 8.1% |
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 (14% of portfolio holdings as of 12/31/20). |
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.royceinvest.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 2020. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark (Russell 2000). 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. 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 2020 Annual Report to Shareholders | | 21 |
MANAGER’S DISCUSSION (UNAUDITED)
Royce Small-Cap Value Fund (RVV)
Jay Kaplan, CFA
FUND PERFORMANCE
Royce Small-Cap Value Fund was down 6.5% in 2020, lagging both of its small-cap benchmarks, the Russell 2000 Value Index (+4.6%) and the Russell 2000 Index (+20.0%) for the same period.
WHAT WORKED… AND WHAT DIDN’T
Three of the Fund’s nine equity sectors detracted from performance in 2020, with Financials having the largest negative impact. Energy and Consumer Discretionary also hampered results. The largest positive contribution came from Information Technology, which led by a wide margin. Health Care and Industrials, the Fund’s largest weighting, were also additive. At the industry level, airlines (Industrials) detracted most, followed by banks and thrifts & mortgage finance (both in Financials). Conversely, two of the Fund’s top three contributing industries were from Industrials: construction & engineering and road & rail. Rounding out the top three was electronic equipment, instruments & components in Information Technology.
At the beginning of 2020, we positioned the portfolio for the possibility of accelerating growth. However, the coronavirus soon unraveled this thesis, with lockdowns and other constraints plunging the U.S. and much of the globe rapidly into recession. Each of the Fund’s five top-detracting positions was in an industry that was hit especially hard by the effects of the pandemic (and each was also a holdover from the top five detractors for the six-month period ended 6/30/20). Low-cost carrier Spirit Airlines detracted most at the security level as few industries were hurt more by the substantial travel restrictions caused by the coronavirus. These same reasons also caused major problems for discount carrier Allegiant Travel. As a result, we excited both positions during 2020’s first half.
Another area hit particularly hard by the contracting economic activity was retailers. Plummeting sales, coupled with challenges afflicting brick-and-mortar retailers, caused us to sell our positions in footwear manufacturer Caleres and women’s dress shoe retailer Designer Brands, as we thought that neither looked capable of a complete recovery. Dramatic declines in sales also prompted us to exit G-III Apparel Group, which sells outerwear and sportswear, has licensing agreements with several sports leagues and universities, and operates retail stores. By selling these holdings we were able to purchase companies in areas such as health care services & providers, biotech, and pharmaceuticals, where we believe we found businesses with solid revenues and profits, ample cash, and promising progress in their respective pipelines. We also added or built positions in insurance, banking, and engineering & construction.
On the contribution side, BMC Stock Holdings made the largest positive impact in 2020. BMC Stock Holdings is a building products company that merged with Builders FirstSource in the summer, creating more scale and a bigger footprint in its industry. We were also pleased with results in MYR Group, a national electrical contractor specializing in transmission and distribution, substation, and commercial and industrial construction. We were initially attracted to its very low valuation and were happy to see its shares rise as the effects of COVID-19 only slightly impacted its business. Rounding out the top three was Evercore, a global independent investment banking advisory firm that’s seen as a leader in large-scale M&A transactions. The business ground to a halt in the spring before experiencing a strong rebound, lifting Evercore’s stock.
Relative to the Russell 2000 Value in 2020, the Fund’s disadvantage was caused by stock selection—sector allocation was additive, but not enough to outweigh the effects of stock selection. Consumer Discretionary was the largest source of underperformance due to ineffective stock picks. Stock selection hurt in Health Care and Industrials, with the former also being hurt by our lower exposure, though to a lesser degree. Conversely, our savvy stock selection in Financials gave the sector an edge, as did our lower weighting. Our lower exposure and stock picks benefited Real Estate, while our lack of exposure to Utilities was additive.
Top Contributors to Performance | Top Detractors from Performance | |||||
For 2020 (%)1 | For 2020 (%)2 | |||||
BMC Stock Holdings | 1.73 | Spirit Airlines | -3.40 | |||
MYR Group | 1.64 | Designer Brands Cl. A | -2.59 | |||
Evercore Cl. A | 1.57 | Caleres | -2.23 | |||
Rent-A-Center | 1.52 | G-III Apparel Group | -2.06 | |||
Ensign Group (The) | 1.51 | Allegiant Travel | -2.02 | |||
1 Includes dividends | 2 Net of dividends | |||||
CURRENT POSITIONING AND OUTLOOK
While it’s impossible to predict what 2021 has in store, we remain hopeful that the economy will recover. The question is, how much of this optimism is priced into current valuations? We are already seeing the market reflect considerable confidence in the form of share prices for many companies that are ahead—in some cases significantly so—of what even a robustly rebounding economy may provide. The result is a tension between what looks like unsustainably high stock prices on the one hand and the likelihood of a fast-growing U.S. economy on the other—with record low interest rates being an additional factor, one that will probably encourage investors to continue looking toward equities in the absence of viable alternatives. Wide distribution of the vaccine should, in our view, spur a global rally that should benefit cyclical U.S. small caps, which are very economically sensitive. We have positioned the portfolio towards industrial, financial, and technology stocks as we believe they should fare well in a vibrant economy. As is typical with the strategy, we also continue to seek contrarian investments, some of which we currently see in small regional banks.
22 | The Royce Funds 2020 Annual Report to Shareholders |
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) | TICKER SYMBOLS RYVFX RVVHX RVFCX RVVRX |
Performance and Expenses | |||||||
Average Annual Total Return (%) Through 12/31/20 | |||||||
JUL-DEC 20201 | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | SINCE INCEPTION (6/14/01) | |
RVV | 30.07 | -6.47 | 0.87 | 5.51 | 4.14 | 5.27 | 8.20 |
Annual Gross Operating Expenses: 1.55% Annual Net Operating Expenses: 1.49% |
1 Not annualized
Morningstar Style Map™ As of 12/31/20
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 89 for additional information.
Value of $10,000
Invested on 6/14/01 as of 12/31/20 ($)
Top 10 Positions | |
% of Net Assets | |
Insight Enterprises | 2.5 |
Miller Industries | 2.5 |
Rent-A-Center | 2.4 |
Primoris Services | 2.3 |
Great Lakes Dredge & Dock | 2.2 |
Shoe Carnival | 2.2 |
ArcBest | 2.2 |
PulteGroup | 2.1 |
Molina Healthcare | 2.1 |
Evercore Cl. A | 2.1 |
Portfolio Sector Breakdown | |
% of Net Assets | |
Industrials | 30.0 |
Financials | 22.2 |
Information Technology | 20.2 |
Consumer Discretionary | 15.5 |
Health Care | 7.0 |
Communication Services | 1.7 |
Real Estate | 0.7 |
Energy | 0.4 |
Consumer Staples | 0.3 |
Cash and Cash Equivalents | 2.0 |
Calendar Year Total Returns (%) | |
YEAR | RVV |
2020 | -6.5 |
2019 | 18.2 |
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 |
Upside/Downside Capture Ratios | ||
Periods Ended 12/31/20 (%) | ||
UPSIDE | DOWNSIDE | |
10-Year | 81 | 105 |
From 6/30/01 (Start of Fund’s First Full Quarter) | 94 | 92 |
Portfolio Diagnostics | |
Fund Net Assets | $121 million |
Number of Holdings | 87 |
Turnover Rate | 61% |
Average Market Capitalization1 | $1,447 million |
Weighted Average P/E Ratio2,3 | 15.6x |
Weighted Average P/B Ratio2 | 1.8x |
Active Share4 | 95% |
U.S. Investments (% of Net Assets) | 94.4% |
Non-U.S. Investments (% of Net Assets) | 3.6% |
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 (7% of portfolio holdings as of 12/31/20). |
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.royceinvest.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, 2021. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to-date performance for 2020. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark (Russell 2000 Value). 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. 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 2020 Annual Report to Shareholders | 23
MANAGER’S DISCUSSION (UNAUDITED)
Royce Smaller-Companies Growth Fund (RVP)
Chip Skinner, CFA
FUND PERFORMANCE
A very impressive 2020 gave Royce Smaller-Companies Growth Fund an advantage over its benchmark, the Russell 2000 Index, for the one-, three-, five, 10-, 15-year, and since inception (6/14/01) periods ended 12/31/20. The Fund advanced 49.3% for 2020, more than doubling the 20.0% gain for the Russell 2000. We were particularly pleased that the Fund outpaced the small-cap index in all four quarters of 2020, including the very bearish first quarter (-23.8% versus -30.6%)—the worst in the index’s history—and the very bullish fourth quarter (+33.4% versus +31.4%)—which saw the highest quarterly return in its history.
WHAT WORKED... AND WHAT DIDN’T
Seven of the 10 equity sectors in which the Fund held investments finished 2020 in the black. Information Technology and Health Care—its two largest weightings—made by far the biggest positive contributions, followed by Communication Services, where our comparatively low weighting was no bar to a terrific year. Financials, Energy, and Real Estate detracted, and each had relatively low weightings.
Cryoport is a biologic/live cell transportation company that provides specialized temperature-controlled containers known as dewars for drug discovery companies during FDA trials—and at higher volumes after drug approval. This is a “picks and shovels” type of company, in this case supplying a burgeoning, early-stage segment of biotherapeutics, including gene therapies, where the visibility is high given the large number of drug candidates currently under development and in trials. We reduced our position in the latter half of 2020 given the run-up in its shares and the potential business/integration risk from two large acquisitions that were recently announced as part of a horizontal integration effort.
Headquartered in Singapore, Sea has two established businesses—mobile game platform Garena and e-commerce site Shopee—and an emerging online payments platform/electronic wallet. The company has a leading market share in Southeast Asia, including Indonesia, Malaysia, and the Philippines. With approximately $4 billion in annual revenues, the high margin cash flow from the gaming platform is helping to fund the loss-making e-commerce business. Despite an already strong revenue base for a small company, Sea is still growing about 100% year over year, and its e-commerce business has drawn favorable comparisons to Amazon. It remains a top holding based on what we see as a long potential runway for growth.
The top detractor in the portfolio was GP Strategies, an enterprise training services provider for both classrooms and online instruction. Its business has been in turnaround mode since our original purchase. Built on acquisitions, GPX had to pause M&A growth in order to focus on stabilizing its existing segments and expanding margins—both before the onset of COVID-19. In mid-2020, the company handed over the CEO mantle to a dynamic young executive. While we have seen some signs of improvement, investors have so far not been convinced. Despite what we see as an extreme under-valuation, we chose to reduce our once sizable position as our own confidence in a recovery for the classroom training market has waned. Paylocity Holdings is a human resources/payroll services software-as-a-service company that we have owned since its IPO. Its shares underperformed in 2020 given its focus on small businesses as well as workforce contraction in the U.S.—Paylocity’s revenues are based on a per-member per month formula. While we continue to think very highly of many aspects of Paylocity’s business, its high multiple and decelerating revenue growth led us to reduce our weighting.
The Fund’s advantage versus the Russell 2000 in 2020 came mostly from stock selection, though sector allocation was also additive. Both savvy stock picking and our larger weight helped in Information Technology while stock selection drove our advantage in Communication Services. Conversely, our cash position hurt relative results, as did stock picks and a very low weighting in Materials.
Top Contributors to Performance | Top Detractors from Performance | |||||
For 2020 (%)1 | For 2020 (%)2 | |||||
CryoPort | 4.13 | GP Strategies | -2.01 | |||
Sea Cl. A ADR | 3.75 | Paylocity Holding Corporation | -1.27 | |||
Lovesac Company (The) | 3.08 | Apyx Medical | -1.21 | |||
Unisys Corporation | 2.62 | TriState Capital Holdings | -1.01 | |||
Celsius Holdings | 2.40 | uniQure | -0.89 | |||
1 Includes dividends | 2 Net of dividends | |||||
CURRENT POSITIONING AND OUTLOOK
We exited or reduced what we thought were expensive holdings in the second half of 2020, including certain cloud software and other technology companies. We added shares of semiconductors & semiconductor equipment companies, including MagnaChip Semiconductor, Advanced Energy Industries, and Onto Innovation. We also built positions in a new theme of online consumer entertainment, specifically those involved in e-gaming and sports betting. We based these decisions on the growing number of states that are expected to approve gaming and gambling legislation for tax revenue reasons, and so we see this as a multi-year theme. Expecting an industrial recovery in 2021, we also added exposure to companies that specialize in industrial automation and robotics. Many small-cap growth companies look very pricey to us, and valuation compression looks likely for certain segments in 2021. While not wishing for an extreme pullback, a correction would be a positive for our search for growth companies selling at reasonable prices. Having said that, we also believe that the high rates of innovation in multiple areas of the economy continue to provide a favorable backdrop for our theme-based style of investing.
24 | The Royce Funds 2020 Annual Report to Shareholders
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) | TICKER SYMBOLS RYVPX RVPHX RVPCX RVPIX |
Performance and Expenses |
Average Annual Total Return (%) Through 12/31/20 |
JUL DEC 20201 | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | SINCE INCEPTION (6/14/01) | ||||||||
RVP | 46.15 | 49.26 | 18.34 | 16.38 | 11.59 | 9.07 | 12.47 | |||||||
Annual Gross Operating Expenses: 1.54% Annual Net Operating Expenses: 1.49% |
1 Not annualized
Morningstar Style Map™ As of 12/31/20
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 89 for additional information.
Value of $10,000
Invested on 6/14/01 as of 12/31/20 ($)
Top 10 Positions | |
% of Net Assets | |
Unisys Corporation | 5.3 |
NEOGAMES | 2.8 |
Lawson Products | 2.6 |
Iteris | 2.5 |
MagnaChip Semiconductor | 1.8 |
Enthusiast Gaming Holdings | 1.6 |
American Superconductor | 1.6 |
Ambarella | 1.5 |
Sea Cl. A ADR | 1.5 |
USA Technologies | 1.5 |
Portfolio Sector Breakdown | |
% of Net Assets | |
Information Technology | 32.9 |
Health Care | 29.2 |
Industrials | 11.5 |
Consumer Discretionary | 8.9 |
Communication Services | 5.3 |
Financials | 3.9 |
Consumer Staples | 1.5 |
Real Estate | 1.4 |
Diversified Investment Companies | 0.9 |
Materials | 0.1 |
Cash and Cash Equivalents | 4.4 |
Calendar Year Total Returns (%) | |
YEAR | RVP |
2020 | 49.3 |
2019 | 23.7 |
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 |
Upside/Downside Capture Ratios | ||
Periods Ended 12/31/20 (%) | ||
UPSIDE | DOWNSIDE | |
10-Year | 104 | 104 |
From 6/30/01 (Start of Fund’s First Full Quarter) | 115 | 99 |
Portfolio Diagnostics | |
Fund Net Assets | $308 million |
Number of Holdings | 113 |
Turnover Rate | 61% |
Average Market Capitalization1 | $1,324 million |
Weighted Average P/B Ratio 2 | 4.4x |
3-5 Year EPS Growth (est.)3 | 20.8% |
Active Share 4 | 94% |
U.S. Investments (% of Net Assets) | 76.8% |
Non-U.S. Investments (% of Net Assets) | 18.8% |
1 Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median.
2 Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks.
3 The 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.royceinvest.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, 2021. Regarding the “Top Contributors” and “Top Detractors” tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to-date performance for 2020. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark (Russell 2000). 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. 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 2020 Annual Report to Shareholders | | 25 |
MANAGERS’ DISCUSSION (UNAUDITED)
Royce Special Equity Fund (RSE)
Charlie Dreifus, CFA
Steven McBoyle
FUND PERFORMANCE
Royce Special Equity Fund gained 7.4% in 2020, outperforming its primary benchmark, the Russell 2000 Value Index, which was up 4.6%, while lagging the Russell 2000 Index, which advanced 20.0% for the same period.
WHAT WORKED… AND WHAT DIDN’T
Six of the nine equity sectors in which the Fund held investments in 2020 contributed positively to performance, with Consumer Discretionary and Information Technology—two of its three largest sectors—leading by a wide margin while Communication Services detracted the most by far, followed by Real Estate and Materials. Household durables (Consumer Discretionary) and IT services (Information Technology) contributed most at the industry level while the top detractors were media (Communication Services), which led by a substantial margin, and specialty retail (Consumer Discretionary).
The top-contributing positions in 2020 were recreational product manufacturer Johnson Outdoors and Computer Services. The latter provides banking, payment processing, and related services and was a strong performer through much of the year. Also contributing notably to 2020’s performance was Cooper Tire & Rubber, which manufactures replacement tires for automobiles and trucks, with subsidiaries that specialize in medium truck, motorcycle, and racing tires. Furniture makers Flexsteel Industries and Hooker Furniture rounded out the portfolio’s top five contributors.
Conversely, the two biggest detractors at the position level were media conglomerate Meredith Corporation and children’s publishing, education, and media company Scholastic Corporation. They were followed by apparel retailer Children’s Place; Standard Motor Products, which manufactures and distributes automotive parts in the automotive aftermarket industry; and Mercer International, which owns and operates three pulp mills that produce bleached softwood kraft pulp for use in tissues, hygiene products, and high-end printing and writing paper.
For the calendar year, the Fund’s outperformance came from sector allocation decisions—stock selection was a negative. At the sector level, lower exposure to Financials (along with a modest contribution from stock selection), no exposure to Energy, and a combination of our underweight and savvy stock picks in Real Estate all helped versus the benchmark. By contrast, ineffective stock picks and our overweight in Communication Services hampered relative performance. The positive effect of our higher weight in Materials was undone by poor stock selection while our lower exposure to Health Care overwhelmed the success of our stock picks in the sector.
Top Contributors to Performance | Top Detractors from Performance | |||||
For 2020 (%)1 | For 2020 (%)2 | |||||
Johnson Outdoors Cl. A | 2.34 | Meredith Corporation | -4.50 | |||
Computer Services | 2.14 | Scholastic Corporation | -2.38 | |||
Cooper Tire & Rubber | 1.97 | Children’s Place | -1.65 | |||
Flexsteel Industries | 1.52 | Standard Motor Products | -1.24 | |||
Hooker Furniture | 1.27 | Mercer International | -0.86 | |||
1 Includes dividends | 2 Net of dividends | |||||
CURRENT POSITIONING AND OUTLOOK
We are very mindful that we could be in for tougher times over the next several months due to the spike in coronavirus cases. However, once we are past this, with more of the population vaccinated and barring a new black swan event, economic improvement should arrive, coinciding with easy earnings comparisons in the second quarter versus 2020’s. In our view, however, this has already been amply discounted into most earnings estimates and thus into valuations. In markets that are fully or highly priced, pro risk-taking behavior resulting from low risk-free returns leaves every market vulnerable to any form of shock. Assets with high valuations that resulted from being discounted at near zero interest rates will therefore not be immune to the laws of gravity.
The rolling 10-year Russell 2000 return spread between value and growth is still historically elevated at over two standard deviations. While there have been several false starts in favor of value over recent years, the steepening yield curve, rising commodity prices, and anti-‘big-tech’ rhetoric all suggest that the fourth-quarter rotation toward small-cap value may prove to be the real thing. In fact, we feel confident that the rotation towards value and cyclicals that materialized later in 2020 has further to run. It seems reasonable to expect that a growing economy, especially if accompanied by the possible fiscal stimulus such as infrastructure improvements, broadband buildout, etc. all have large multiplier effects and allow investors to buy earnings growth via value and/or cyclical names at more reasonable valuations than the growth names they initially sought out. The removal, or even reduction, of policy uncertainty should help.
At the same time, the primary force supporting high equity valuations at the end of 2020 was low interest rates, including negative real 10-year Treasury yields and $18 billion in negative-yielding sovereign debt around the globe, which has made equities and other assets appear inexpensive. Ultimately, the durability of high valuations will be determined in large part by the speed and direction of interest rates. And for as long as the pandemic remains a threat—and probably for a good while after—rate increases seem unlikely. Using the same consistent methodology for picking stocks in the portfolio, our tried-and-true indicators are predicting lower market returns, as they have accurately done in the past (though admittedly not always in a timely manner). This simple yet logical comparison of cap rate to cost of capital has proven hard to beat. Simplicity has its virtues. We are therefore advising caution and raising cash.
26 | The Royce Funds 2020 Annual Report to Shareholders |
|
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) | TICKER SYMBOLS RYSEX RSEFX RSEIX RSQCX |
Performance and Expenses
Average Annual Total Return (%) Through 12/31/20
JUL-DEC 20201 | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | SINCE INCEPTION (5/1/98) | |
RSE | 19.37 | 7.43 | 2.93 | 9.24 | 7.49 | 7.68 | 9.88 | 8.57 |
Annual Operating Expenses: 1.21%
1 Not annualized
Relative Risk Adjusted Returns: Monthly Rolling Sharpe Ratios
20 Years Through 12/31/20
On a monthly rolling risk-adjusted basis, the Fund outperformed the Russell 2000 Value in 89% of all 10-year periods and 61% of all 5-year periods.
PERIODS BEATING THE INDEX | FUND AVG1 | INDEX AVG1 | ||||
10-year | 108/121 | 89% | 0.57 | 0.44 | ||
5-year | 111/181 | 61% | 0.56 | 0.51 |
1Average of monthly rolling Sharpe Ratios over the specified periods.
Morningstar Style Map™ As of 12/31/20
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 89 for additional information.
Value of $10,000
Invested on 5/1/98 as of 12/31/20 ($)
Top 10 Positions | |
% of Net Assets | |
Computer Services | 6.3 |
Johnson Outdoors Cl. A | 5.0 |
Huntsman Corporation | 4.3 |
John B Sanfilippo & Son | 4.1 |
Hooker Furniture | 3.8 |
Cooper Tire & Rubber | 3.7 |
National Presto Industries | 3.6 |
Standard Motor Products | 3.5 |
Kulicke & Soffa Industries | 3.3 |
Hubbell Incorporated | 3.3 |
Portfolio Sector Breakdown | |
% of Net Assets | |
Consumer Discretionary | 24.8 |
Industrials | 21.8 |
Information Technology | 17.1 |
Materials | 6.9 |
Consumer Staples | 4.1 |
Real Estate | 2.9 |
Financials | 1.9 |
Health Care | 1.5 |
Communication Services | 0.2 |
Cash and Cash Equivalents | 18.8 |
Calendar Year Total Returns (%) | |
YEAR | RSE |
2020 | 7.4 |
2019 | 12.6 |
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 |
Upside/Downside Capture Ratios
Periods Ended 12/31/20 (%)
UPSIDE | DOWNSIDE | |
10-Year | 79 | 76 |
From 6/30/98 (Start of Fund’s First Full Quarter) | 80 | 66 |
Portfolio Diagnostics | |
Fund Net Assets | $963 million |
Number of Holdings | 37 |
Turnover Rate | 39% |
Average Market Capitalization1 | $1,230 million |
Weighted Average P/E Ratio 2,3 | 19.0x |
Weighted Average P/B Ratio 2 | 2.0x |
Active Share 4 | 99% |
U.S. Investments (% of Net Assets) | 77.9% |
Non-U.S. Investments (% of Net Assets) | 3.3% |
1 Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median.
2 Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks.
3 The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (11% of portfolio holdings as of 12/31/20).
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.royceinvest.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 2020. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark (Russell 2000 Value). 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. 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 2020 Annual Report to Shareholders | 27
Chuck Royce
Miles Lewis, CFA
FUND PERFORMANCE
Royce Total Return Fund gained 3.8% for 2020, trailing each of its benchmarks as the Russell 2000 Index advanced 20.0% and the Russell 2000 Value Index rose 4.6% for the same period. For context, we note that dividend payers as a group underperformed for the full year within the Russell 2000. The Fund nonetheless maintained certain long-term relative advantages, beating the Russell 2000 Value for the three-, five-, 15-, 20-, 25-year, and since inception (12/15/93) periods ended 12/31/20, while it outpaced the Russell 2000 for the 25-year and since inception periods.
WHAT WORKED… AND WHAT DIDN’T
Seven of the Fund’s 11 equity sectors finished 2020 in the black, with Materials making the largest positive impact, with Information Technology and Consumer Discretionary following. Of the four sectors that detracted, Energy hampered performance most, followed by Utilities and Real Estate. At the industry level, capital markets (Financials) and chemicals (Materials) were the biggest contributors while energy equipment & services (Energy) and thrifts & mortgage finance (Financials) hurt performance most.
The Fund’s top-contributing position was Texas-based regional bank Independent Bank Group, which reaped the benefits of joining the S&P SmallCap 600 stock index in June before lower loan deferral rates appeared to help its shares rise in September. Investment management firm Artisan Partners Asset Management reported higher assets under management and a consequent boost in performance fees rooted in the recovery for global equity markets and outperformance for many of its equity funds.
Bank and financial holding company CIT Group was the top detractor on a position basis. Pandemic-driven challenges hurt its fiscal first- and second-quarter results, and we sold our shares in October just before the announcement of its merger with First Citizens BancShares, which we also hold. Norway’s TGS-NOPEC Geophysical, which provides geophysical seismic data to oil exploration companies, was the second-largest detractor. Although we like its business model, we believe that structural changes in oil & gas exploration, as well as secular shifts toward cleaner energy, may ultimately reduce its long-term growth and consequently the rate at which it can compound value, an analysis that led us to reduce our stake in 2020. We also exited our position in Bank of Hawaii as the bank reported increased provision expenses related to the pandemic and its negative impact on the state’s tourism-driven economy.
Relative underperformance for 2020 was due to sector allocation and stock selection, with the former having a much larger impact. Health Care was the largest source of relative underperformance because of our lower exposure and, to a lesser degree, stock selection. Dividend-payers are scarce in this sector. Ineffective stock picks in Industrials also hindered relative results, while our lower exposure and stock selection negatively impacted Information Technology. Conversely, our lower exposure to Real Estate made it the top relative contributor while a lower weighting and savvy stock selection were beneficial in both Utilities and Consumer Staples.
Top Contributors to Performance | Top Detractors from Performance | |||||
For 2020 (%)1 | For 2020 (%)2 | |||||
Independent Bank Group | 1.08 | CIT Group | -0.86 | |||
Artisan Partners Asset | TGS-NOPEC Geophysical | -0.72 | ||||
Management Cl. A | 0.88 | Bank of Hawaii | -0.71 | |||
BankUnited | 0.84 | Kimball International Cl. B | -0.69 | |||
Watsco | 0.79 | Alleghany Corporation | -0.64 | |||
Ares Management Cl. A | 0.78 | 2 Net of dividends | ||||
1 Includes dividends | ||||||
CURRENT POSITIONING AND OUTLOOK
Despite a strong run by small caps, we remain optimistic about the asset class for three reasons: First, we expect a strong recovery due to pent up services demand, limited excess capacity, a healthy U.S. consumer, and strong corporate balance sheets; second, stronger-than-expected operating leverage should accentuate the recovery as many companies have permanently reduced their cost structures; and finally, we see reasonable, and in some cases quite attractive, valuations for many of our holdings. The vaccine roll-out should spur economic growth, though we suspect it will initially be unevenly distributed—and that is where we think active managers can offer an edge. The ability to recognize patterns, understand industry dynamics, and evaluate management teams should all prove crucial in such a climate.
We continue to look for what we see as strong divided-paying businesses trading at attractive valuations. We are particularly optimistic about two areas within Financials that lagged in 2020: regional banks and property & casualty (P&C) insurance. Regional banks have held up well during the pandemic, consistent with our thesis that the industry’s risk profile was reduced dramatically following the Financial Crisis and that robust capital levels would prove a source of strength. We expect earnings to be strong in 2021 as provisions for credit losses drop sharply, loan growth resumes, and stronger economic growth steepens the yield curve. The P&C insurance industry has experienced an unwillingness to commit capital due to higher than normal levels of uncertainty. However, demand for insurance is relatively consistent and when capital becomes scarce, the incumbent insurers see pricing power shift in their favor, and prices begin to rise, which has historically portended a multi-year period of strong fundamentals. The P&C insurance industry had seen rising prices for several quarters prior to the pandemic, which has further accelerated these increases to the point where they look sustainable through at least the end of 2021.
28 | The Royce Funds 2020 Annual Report to Shareholders
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) | TICKER SYMBOLS RYTRX RYTFX RTRIX RYTCX RTRRX |
Performance and Expenses
Average Annual Total Return (%) Through 12/31/20
JUL-DEC 20201 | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | 25-YR | SINCE INCEPTION (12/15/93) | |
RTR | 25.58 | 3.82 | 3.91 | 9.92 | 8.47 | 7.20 | 8.69 | 9.84 | 10.23 |
Annual Operating Expenses: 1.23% |
1 Not annualized
Relative Risk Adjusted Returns: Monthly Rolling Sharpe Ratios
20 Years Through 12/31/20
On a monthly rolling risk-adjusted basis, the Fund outperformed the Russell 2000 in 83% of all 10-year periods and 72% of all 5-year periods.
PERIODS BEATING THE INDEX | FUND AVG1 | INDEX AVG1 | |||||
10-year | 101/121 | 83% | 0.52 | 0.48 | |||
5-year | 131/181 | 72% | 0.58 | 0.52 |
1Average of monthly rolling Sharpe Ratios over the specified periods.
Morningstar Style Map™ As of 12/31/20
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 89 for additional information.
Value of $10,000
Invested on 12/15/93 as of 12/31/20 ($)
Top 10 Positions
% of Net Assets
Signature Bank | 1.9 |
Ralph Lauren Cl. A | 1.9 |
Independent Bank Group | 1.9 |
Home BancShares | 1.9 |
Healthcare Services Group | 1.9 |
Axis Capital Holdings | 1.7 |
First Citizens BancShares Cl. A | 1.7 |
Triumph Bancorp | 1.7 |
First Hawaiian | 1.6 |
James River Group Holdings | 1.5 |
Portfolio Sector Breakdown
% of Net Assets
Financials | 38.7 |
Industrials | 21.0 |
Materials | 12.0 |
Information Technology | 8.9 |
Consumer Discretionary | 7.8 |
Consumer Staples | 2.2 |
Communication Services | 2.0 |
Real Estate | 1.9 |
Health Care | 1.5 |
Utilities | 1.1 |
Energy | 1.0 |
Diversified Investment Companies | 0.1 |
Preferred Stock | 0.1 |
Cash and Cash Equivalents | 1.7 |
Calendar Year Total Returns (%)
YEAR | RTR |
2020 | 3.8 |
2019 | 23.5 |
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 |
Upside/Downside Capture Ratios
Periods Ended 12/31/20 (%)
UPSIDE | DOWNSIDE | |
10-Year | 78 | 81 |
From 12/31/93 (Start of Fund’s First Full Quarter) | 80 | 62 |
Portfolio Diagnostics
Fund Net Assets | $1,312 million |
Number of Holdings | 118 |
Turnover Rate | 61% |
Average Market Capitalization1 | $3,230 million |
Weighted Average P/E Ratio 2,3 | 20.5x |
Weighted Average P/B Ratio 2 | 2.0x |
Active Share 4 | 96% |
U.S. Investments (% of Net Assets) | 85.6% |
Non-U.S. Investments (% of Net Assets) | 12.7% |
1 | Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median. |
2 | Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks. |
3 | The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (14% of portfolio holdings as of 12/31/20). |
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.royceinvest.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 2020. 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 (Russell 2000). 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. 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 2020 Annual Report to Shareholders | 29
Royce Dividend Value Fund | |||||||
Common Stocks – 97.9% | |||||||
SHARES | VALUE | ||||||
CONSUMER DISCRETIONARY – 8.0% | |||||||
AUTO COMPONENTS - 1.2% | |||||||
Gentex Corporation | 8,101 | $ | 274,867 | ||||
Nokian Renkaat 2 | 18,000 | 629,036 | |||||
903,903 | |||||||
HOUSEHOLD DURABLES - 2.6% | |||||||
Hunter Douglas 1,2 | 18,000 | 1,409,167 | |||||
La-Z-Boy | 1,915 | 76,293 | |||||
†PulteGroup | 10,900 | 470,008 | |||||
1,955,468 | |||||||
SPECIALTY RETAIL - 4.2% | |||||||
American Eagle Outfitters | 30,445 | 611,031 | |||||
Rent-A-Center | 36,466 | 1,396,283 | |||||
USS 2 | 56,000 | 1,132,838 | |||||
3,140,152 | |||||||
Total (Cost $3,301,230) | 5,999,523 | ||||||
CONSUMER STAPLES – 0.1% | |||||||
HOUSEHOLD PRODUCTS - 0.1% | |||||||
Spectrum Brands Holdings | 1,496 | 118,154 | |||||
Total (Cost $74,800) | 118,154 | ||||||
ENERGY – 1.7% | |||||||
ENERGY EQUIPMENT & SERVICES - 0.7% | |||||||
TGS-NOPEC Geophysical 2 | 32,400 | 494,653 | |||||
OIL, GAS & CONSUMABLE FUELS - 1.0% | |||||||
Gaztransport Et Technigaz 2 | 7,800 | 754,797 | |||||
Total (Cost $1,196,477) | 1,249,450 | ||||||
FINANCIALS – 29.0% | |||||||
BANKS - 3.6% | |||||||
Bank of Georgia Group 1,2 | 39,500 | 659,410 | |||||
BOK Financial | 15,414 | 1,055,550 | |||||
City Holding Company | 4,089 | 284,390 | |||||
†Triumph Bancorp 1 | 15,000 | 728,250 | |||||
2,727,600 | |||||||
CAPITAL MARKETS - 23.2% | |||||||
Ashmore Group 2 | 244,300 | 1,441,933 | |||||
AURELIUS Equity Opportunities 1,2 | 7,200 | 153,068 | |||||
B3-Brasil, Bolsa, Balcao 2 | 112,200 | 1,345,832 | |||||
Bolsa Mexicana de Valores | 444,000 | 1,058,264 | |||||
Carlyle Group | 79,420 | 2,496,965 | |||||
Coronation Fund Managers 2 | 153,700 | 448,765 | |||||
Evercore Cl. A | 13,500 | 1,480,140 | |||||
Federated Hermes Cl. B | 21,200 | 612,468 | |||||
Houlihan Lokey Cl. A | 2,846 | 191,337 | |||||
Jupiter Fund Management 2 | 225,700 | 866,520 | |||||
KKR & Co. | 32,676 | 1,323,051 | |||||
Moelis & Company Cl. A | 19,359 | 905,227 | |||||
SEI Investments | 37,900 | 2,178,113 | |||||
Sprott | 58,860 | 1,709,063 | |||||
State Street | 16,800 | 1,222,704 | |||||
17,433,450 | |||||||
INSURANCE - 1.1% | |||||||
Reinsurance Group of America | 7,205 | 835,060 | |||||
THRIFTS & MORTGAGE FINANCE - 1.1% | |||||||
Genworth MI Canada | 23,648 | 806,473 | |||||
Total (Cost $13,410,628) | 21,802,583 |
HEALTH CARE – 3.5% | |||||||
HEALTH CARE PROVIDERS & SERVICES - 0.6% | |||||||
Ensign Group (The) | 5,951 | 433,947 | |||||
PHARMACEUTICALS - 2.9% | |||||||
Recordati Industria Chimica e Farmaceutica 2 | 26,910 | 1,487,328 | |||||
Santen Pharmaceutical 2 | 41,600 | 675,772 | |||||
2,163,100 | |||||||
Total (Cost $645,254) | 2,597,047 | ||||||
INDUSTRIALS – 28.6% | |||||||
AEROSPACE & DEFENSE - 4.0% | |||||||
HEICO Corporation Cl. A | 25,859 | 3,027,054 | |||||
BUILDING PRODUCTS - 1.0% | |||||||
Geberit 2 | 800 | 500,540 | |||||
†UFP Industries | 4,200 | 233,310 | |||||
733,850 | |||||||
COMMERCIAL SERVICES & SUPPLIES - 0.8% | |||||||
†Healthcare Services Group | 15,700 | 441,170 | |||||
Herman Miller | 3,976 | 134,389 | |||||
575,559 | |||||||
CONSTRUCTION & ENGINEERING - 0.6% | |||||||
Comfort Systems USA | 8,959 | 471,781 | |||||
ELECTRICAL EQUIPMENT - 2.4% | |||||||
Hubbell Incorporated | 11,462 | 1,797,127 | |||||
MACHINERY - 10.2% | |||||||
Alamo Group | 588 | 81,115 | |||||
Federal Signal | 4,729 | 156,861 | |||||
Graco | 26,552 | 1,921,037 | |||||
Lincoln Electric Holdings | 10,022 | 1,165,057 | |||||
Lindsay Corporation | 17,400 | 2,235,204 | |||||
Spirax-Sarco Engineering 2 | 13,478 | 2,083,109 | |||||
7,642,383 | |||||||
MARINE - 2.2% | |||||||
Clarkson 2 | 43,740 | 1,615,797 | |||||
PROFESSIONAL SERVICES - 3.5% | |||||||
Korn Ferry | 10,023 | 436,001 | |||||
ManpowerGroup | 20,300 | 1,830,654 | |||||
Robert Half International | 5,994 | 374,505 | |||||
2,641,160 | |||||||
ROAD & RAIL - 0.7% | |||||||
Old Dominion Freight Line | 1,050 | 204,939 | |||||
Werner Enterprises | 8,643 | 338,978 | |||||
543,917 | |||||||
TRADING COMPANIES & DISTRIBUTORS - 3.2% | |||||||
Applied Industrial Technologies | 31,294 | 2,440,619 | |||||
Total (Cost $7,637,730) | 21,489,247 | ||||||
INFORMATION TECHNOLOGY – 10.0% | |||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 5.0% | |||||||
FLIR Systems | 65,800 | 2,884,014 | |||||
Vishay Intertechnology | 42,497 | 880,113 | |||||
3,764,127 | |||||||
IT SERVICES - 4.2% | |||||||
†CSG Systems International | 400 | 18,028 | |||||
KBR | 100,890 | 3,120,528 | |||||
3,138,556 | |||||||
SOFTWARE - 0.8% | |||||||
SimCorp 2 | 4,200 | 623,838 | |||||
Total (Cost $4,038,610) | 7,526,521 |
30 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2020
Royce Dividend Value Fund (continued) | |||||||
SHARES | VALUE | ||||||
MATERIALS – 16.4% | |||||||
CHEMICALS - 3.2% | |||||||
Quaker Chemical | 9,618 | $ | 2,437,105 | ||||
CONTAINERS & PACKAGING - 3.7% | |||||||
AptarGroup | 20,396 | 2,792,008 | |||||
METALS & MINING - 9.5% | |||||||
Franco-Nevada | 18,335 | 2,297,926 | |||||
Reliance Steel & Aluminum | 10,830 | 1,296,893 | |||||
Royal Gold | 11,600 | 1,233,776 | |||||
Worthington Industries | 44,460 | 2,282,576 | |||||
7,111,171 | |||||||
Total (Cost $3,803,277) | 12,340,284 | ||||||
REAL ESTATE – 0.6% | |||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.6% | |||||||
Relo Group 2 | 18,400 | 446,276 | |||||
Total (Cost $85,795) | 446,276 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $34,193,801) | 73,569,085 | ||||||
REPURCHASE AGREEMENT– 1.8% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/20, due 1/4/21, maturity value $1,314,454 (collateralized by obligations of various U.S. Government Agencies, 2.125% due 12/31/22, valued at $1,340,761) | |||||||
(Cost $1,314,454) | 1,314,454 | ||||||
TOTAL INVESTMENTS – 99.7% | |||||||
(Cost $35,508,255) | 74,883,539 | ||||||
CASH AND OTHER ASSETS LESS LIABILITIES – 0.3% | 228,279 | ||||||
NET ASSETS – 100.0% | $ | 75,111,818 |
Royce Global Financial Services Fund | |||||||
Common Stocks – 98.4% | |||||||
SHARES | VALUE | ||||||
BANKS - 14.4% | |||||||
BOK Financial | 10,450 | $ | 715,616 | ||||
Bryn Mawr Bank | 10,000 | 305,950 | |||||
Cadence Bancorporation Cl. A | 15,887 | 260,865 | |||||
Capital City Bank Group | 16,988 | 417,565 | |||||
First Citizens BancShares Cl. A | 1,828 | 1,049,766 | |||||
First Republic Bank | 2,599 | 381,871 | |||||
Popular | 22,292 | 1,255,485 | |||||
TriState Capital Holdings 1 | 11,600 | 201,840 | |||||
Umpqua Holdings | 17,400 | 263,436 | |||||
Total (Cost $3,239,540) | 4,852,394 | ||||||
CAPITAL MARKETS - 53.2% | |||||||
Ares Management Cl. A | 16,651 | 783,430 | |||||
Ashmore Group 2 | 157,000 | 926,662 | |||||
Associated Capital Group Cl. A | 7,000 | 245,840 | |||||
B3-Brasil, Bolsa, Balcao 2 | 61,000 | 731,691 | |||||
Bolsa Mexicana de Valores | 174,000 | 414,725 | |||||
Canaccord Genuity Group | 126,350 | 1,107,759 | |||||
Carlyle Group | 22,300 | 701,112 | |||||
Charles Schwab | 14,671 | 778,150 | |||||
Coronation Fund Managers 2 | 61,200 | 178,689 | |||||
CRISIL 2 | 14,000 | 368,014 | |||||
Egyptian Financial Group-Hermes Holding Company 1,2 | 153,993 | 140,975 | |||||
Hellenic Exchanges - Athens Stock Exchange 2 | 50,000 | 238,666 | |||||
Intermediate Capital Group 2 | 39,111 | 924,209 | |||||
IOOF Holdings 2 | 55,000 | 149,451 | |||||
JSE 2 | 51,000 | 388,783 | |||||
Jupiter Fund Management 2 | 106,900 | 410,417 | |||||
KKR & Co. | 19,120 | 774,169 | |||||
MarketAxess Holdings | 1,581 | 902,055 | |||||
NZX 2 | 580,000 | 818,741 | |||||
RF Capital Group | 108,000 | 147,631 | |||||
Rothschild & Co 1,2 | 13,900 | 437,737 | |||||
SEI Investments | 7,950 | 456,886 | |||||
Silvercrest Asset Management Group Cl. A | 20,800 | 288,912 | |||||
Sprott | 45,000 | 1,306,623 | |||||
StoneX Group 1 | 9,846 | 570,083 | |||||
Tel Aviv Stock Exchange 2 | 273,000 | 1,391,451 | |||||
U.S. Global Investors Cl. A | 183,900 | 1,002,255 | |||||
Value Partners Group 2 | 772,000 | 409,888 | |||||
Virtu Financial Cl. A | 23,700 | 596,529 | |||||
Warsaw Stock Exchange 2 | 9,500 | 116,191 | |||||
Westaim Corporation 1 | 105,000 | 205,397 | |||||
Total (Cost $10,352,004) | 17,913,121 | ||||||
CLOSED-END FUNDS - 0.8% | |||||||
Eagle Point Income | 19,341 | 278,704 | |||||
Total (Cost $384,692) | 278,704 | ||||||
DIVERSIFIED FINANCIAL SERVICES - 2.3% | |||||||
†Banco Latinoamericano de Comercio | |||||||
Exterior Cl. E | 25,700 | 406,831 | |||||
ECN Capital | 75,000 | 381,216 | |||||
Total (Cost $557,932) | 788,047 | ||||||
HEALTH CARE PROVIDERS & SERVICES - 0.9% | |||||||
†Great Elm Group 1 | 115,545 | 316,593 | |||||
Total (Cost $419,653) | 316,593 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders| 31 |
Schedules of Investments
Royce Global Financial Services Fund (continued) | |||||||
SHARES | VALUE | ||||||
INSURANCE - 4.6% | |||||||
†Axis Capital Holdings | 11,554 | $ | 582,206 | ||||
E-L Financial | 1,638 | 981,205 | |||||
Total (Cost $1,367,523) | 1,563,411 | ||||||
INVESTMENT COMPANIES - 0.0% | |||||||
†Morgan Group Holding Company 1,2 | 156 | 1,092 | |||||
Total (Cost $1,160) | 1,092 | ||||||
IT SERVICES - 3.1% | |||||||
Cass Information Systems | 4,013 | 156,146 | |||||
PayPal Holdings 1 | 3,851 | 901,904 | |||||
Total (Cost $306,529) | 1,058,050 | ||||||
METALS & MINING - 3.6% | |||||||
Franco-Nevada | 9,523 | 1,193,518 | |||||
Total (Cost $430,881) | 1,193,518 | ||||||
PROFESSIONAL SERVICES - 2.4% | |||||||
†Dun & Bradstreet Holdings 1 | 5,000 | 124,500 | |||||
People Corporation 1 | 45,300 | 535,600 | |||||
Quess Corp 1,2 | 17,756 | 132,615 | |||||
Total (Cost $459,177) | 792,715 | ||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 8.7% | |||||||
Altus Group | 26,400 | 1,019,166 | |||||
FirstService Corporation | 8,379 | 1,145,912 | |||||
FRP Holdings 1 | 7,957 | 362,441 | |||||
RMR Group (The) Cl. A | 10,000 | 386,200 | |||||
Total (Cost $1,531,399) | 2,913,719 | ||||||
SOFTWARE - 3.5% | |||||||
Benefitfocus 1 | 10,600 | 153,488 | |||||
Bottomline Technologies 1 | 9,800 | 516,852 | |||||
Envestnet 1 | 6,000 | 493,740 | |||||
Total (Cost $836,700) | 1,164,080 | ||||||
THRIFTS & MORTGAGE FINANCE - 0.9% Provident Bancorp | 25,000 | 300,000 | |||||
Total (Cost $313,394) | 300,000 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $20,200,584) | 33,135,444 | ||||||
REPURCHASE AGREEMENT– 1.7% | |||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/20, due 1/4/21, maturity value $561,698 (collateralized by obligations of various U.S. Government Agencies, 2.125% due 12/31/22, valued at $573,022) | |||||||
(Cost $561,698) | 561,698 | ||||||
TOTAL INVESTMENTS – 100.1% | |||||||
(Cost $20,762,282) | 33,697,142 | ||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.1)% | (32,023) | ||||||
NET ASSETS – 100.0% | $ | 33,665,119 |
Royce International Premier Fund | ||||||
Common Stocks – 93.1% | ||||||
SHARES | VALUE | |||||
AUSTRALIA – 11.6% | ||||||
Bravura Solutions 2 | 11,180,629 | $ | 27,783,984 | |||
Cochlear 2 | 99,000 | 14,436,338 | ||||
Hansen Technologies 2 | 8,660,555 | 24,889,398 | ||||
IPH 2 | 6,600,801 | 32,738,655 | ||||
†IRESS 2 | 2,049,183 | 16,778,962 | ||||
Technology One 2 | 2,298,300 | 14,518,225 | ||||
Total (Cost $116,827,908) | 131,145,562 | |||||
BRAZIL – 2.2% | ||||||
OdontoPrev 2 | 5,581,200 | 15,691,599 | ||||
TOTVS 2 | 1,711,200 | 9,473,138 | ||||
Total (Cost $24,768,831) | 25,164,737 | |||||
CANADA – 2.9% | ||||||
Altus Group | 364,700 | 14,079,156 | ||||
Morneau Shepell | 780,600 | 19,029,003 | ||||
Total (Cost $23,821,135) | 33,108,159 | |||||
DENMARK – 2.5% | ||||||
†Chr. Hansen Holding 1,2 | 120,500 | 12,398,088 | ||||
SimCorp 2 | 104,000 | 15,447,429 | ||||
Total (Cost $17,415,391) | 27,845,517 | |||||
GERMANY – 4.9% | ||||||
Amadeus Fire 1,2 | 113,698 | 16,701,017 | ||||
Carl Zeiss Meditec 2 | 92,700 | 12,335,073 | ||||
†New Work 2 | 14,651 | 5,013,515 | ||||
Norma Group 2 | 418,700 | 21,426,302 | ||||
Total (Cost $38,973,700) | 55,475,907 | |||||
ICELAND – 2.9% | ||||||
†Marel | 2,828,670 | 17,443,982 | ||||
†Ossur 2 | 1,976,500 | 15,713,792 | ||||
Total (Cost $25,048,088) | 33,157,774 | |||||
INDIA – 1.3% | ||||||
AIA Engineering 2 | 542,411 | 14,815,732 | ||||
Total (Cost $12,812,039) | 14,815,732 | |||||
ITALY – 2.1% | ||||||
†Carel Industries 2 | 433,653 | 10,169,769 | ||||
DiaSorin 2 | 46,900 | 9,764,512 | ||||
†GVS 1,2 | 200,000 | 3,725,571 | ||||
Total (Cost $13,939,244) | 23,659,852 | |||||
JAPAN – 18.6% | ||||||
As One 2 | 100,900 | 17,252,154 | ||||
Benefit One 2 | 564,600 | 16,720,977 | ||||
Cosel 2 | 813,300 | 9,920,372 | ||||
Daifuku 2 | 120,700 | 14,939,765 | ||||
Fukui Computer Holdings 2 | 619,600 | 24,071,140 | ||||
Medikit 2 | 345,000 | 11,473,137 | ||||
Meitec Corporation 2 | 547,100 | 28,446,541 | ||||
NSD 2 | 714,000 | 15,406,186 | ||||
†OBIC Business Consultants 2 | 50,500 | 3,491,614 | ||||
TechnoPro Holdings 2 | 220,500 | 18,302,660 | ||||
TKC Corporation 2 | 474,000 | 35,571,250 | ||||
USS 2 | 741,200 | 14,993,913 | ||||
Total (Cost $138,231,446) | 210,589,709 |
32 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2020
Royce International Premier Fund (continued)
| |||||||
SHARES | VALUE | ||||||
NETHERLANDS – 4.9% | |||||||
IMCD 2 | 225,800 | $ | 28,690,010 | ||||
Intertrust 1,2 | 1,615,591 | 27,416,496 | |||||
Total (Cost $45,164,905) | 56,106,506 | ||||||
NEW ZEALAND – 1.3% | |||||||
Fisher & Paykel Healthcare 2 | 605,000 | 14,367,058 | |||||
Total (Cost $4,868,369) | 14,367,058 | ||||||
NORWAY – 1.5% | |||||||
TGS-NOPEC Geophysical 2 | 1,103,600 | 16,848,751 | |||||
Total (Cost $22,995,640) | 16,848,751 | ||||||
SINGAPORE – 1.7% | |||||||
XP Power 2 | 293,116 | 18,856,544 | |||||
Total (Cost $7,894,565) | 18,856,544 | ||||||
SWEDEN – 9.4% | |||||||
Alimak Group 2 | 1,377,600 | 21,926,759 | |||||
Bravida Holding 2 | 1,262,128 | 16,820,467 | |||||
Hexpol 2 | 1,589,900 | 16,991,433 | |||||
Karnov Group 2 | 3,167,757 | 22,847,007 | |||||
Lagercrantz Group 2 | 888,800 | 8,208,096 | |||||
Loomis 2 | 726,400 | 19,956,911 | |||||
Total (Cost $83,140,329) | 106,750,673 | ||||||
SWITZERLAND – 10.0% | |||||||
Bossard Holding 2 | 76,540 | 15,454,360 | |||||
dormakaba Holding 2 | 42,100 | 23,888,753 | |||||
Kardex Holding 2 | 83,300 | 18,203,610 | |||||
LEM Holding 2 | 8,000 | 15,615,077 | |||||
Partners Group Holding 2 | 17,000 | 19,857,558 | |||||
VZ Holding 2 | 224,385 | 20,489,843 | |||||
Total (Cost $79,785,590) | 113,509,201 | ||||||
UNITED KINGDOM – 15.3% | |||||||
Ashmore Group 2 | 2,465,850 | 14,554,201 | |||||
AVEVA Group 2 | 221,095 | 9,652,243 | |||||
Croda International 2 | 312,000 | 28,187,960 | |||||
Diploma 2 | 229,080 | 6,873,825 | |||||
FDM Group Holdings 2 | 1,181,638 | 18,195,051 | |||||
Marlowe 1,2 | 2,056,206 | 18,360,970 | |||||
Restore 1,2 | 4,396,239 | 24,724,551 | |||||
Spirax-Sarco Engineering 2 | 157,400 | 24,327,148 | |||||
Victrex 2 | 869,445 | 27,918,821 | |||||
Total (Cost $128,373,280) | 172,794,770 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $784,060,460) | 1,054,196,452 | ||||||
PREFERRED STOCK – 1.8% | |||||||
GERMANY – 1.8% | |||||||
FUCHS PETROLUB 2 | 371,100 | 21,065,692 | |||||
(Cost $15,902,659) | 21,065,692 |
REPURCHASE AGREEMENT– 5.1% Fixed Income Clearing Corporation, 0.00% dated 12/31/20, due 1/4/21, maturity value $57,608,157 (collateralized by obligations of various U.S. Government Agencies, 2.125% due 12/31/22, valued at $58,760,389) | ||||
(Cost $57,608,157) | $ | 57,608,157 | ||
TOTAL INVESTMENTS – 100.0% | ||||
(Cost $857,571,276) | 1,132,870,301 | |||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.0)% | (279,287) | |||
NET ASSETS – 100.0% | $ | 1,132,591,014 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 33 |
Schedules of Investments
Royce Micro-Cap Fund | |||||||
Common Stocks – 98.9% |
SHARES | VALUE | |||||||
COMMUNICATION SERVICES – 3.1% | ||||||||
ENTERTAINMENT - 1.8% | ||||||||
†Chicken Soup For The Soul Entertainment Cl. A 1 | 101,900 | $ | 2,036,981 | |||||
Gaia Cl. A 1 | 233,100 | 2,303,028 | ||||||
†IMAX Corporation 1 | 48,700 | 877,574 | ||||||
†Score Media and Gaming Cl. A 1 | 1,092,000 | 1,286,826 | ||||||
6,504,409 | ||||||||
INTERACTIVE MEDIA & SERVICES - 1.3% | ||||||||
QuinStreet 1 | 206,846 | 4,434,778 | ||||||
Total (Cost $6,253,275) | 10,939,187 | |||||||
CONSUMER DISCRETIONARY – 13.5% | ||||||||
AUTO COMPONENTS - 2.1% | ||||||||
Modine Manufacturing 1 | 133,600 | 1,678,016 | ||||||
Stoneridge 1 | 134,100 | 4,053,843 | ||||||
Unique Fabricating 1 | 347,251 | 1,909,638 | ||||||
7,641,497 | ||||||||
DIVERSIFIED CONSUMER SERVICES - 0.7% | ||||||||
Collectors Universe | 32,200 | 2,427,880 | ||||||
HOTELS, RESTAURANTS & LEISURE - 2.2% | ||||||||
Century Casinos 1 | 412,100 | 2,633,319 | ||||||
†GAN 1,3 | 93,600 | 1,898,208 | ||||||
Lindblad Expeditions Holdings 1,3 | 186,600 | 3,194,592 | ||||||
7,726,119 | ||||||||
HOUSEHOLD DURABLES - 0.3% | ||||||||
†Legacy Housing 1 | 70,900 | 1,071,299 | ||||||
INTERNET & DIRECT MARKETING RETAIL - 1.9% | ||||||||
Magnite 1,3 | 216,000 | 6,633,360 | ||||||
LEISURE PRODUCTS - 1.1% | ||||||||
MasterCraft Boat Holdings 1 | 156,400 | 3,884,976 | ||||||
SPECIALTY RETAIL - 4.4% | ||||||||
Citi Trends | 121,924 | 6,057,184 | ||||||
†OneWater Marine Cl. A 1 | 106,500 | 3,098,085 | ||||||
Shoe Carnival | 99,011 | 3,879,251 | ||||||
Zumiez 1 | 77,500 | 2,850,450 | ||||||
15,884,970 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS - 0.8% | ||||||||
Vera Bradley 1,3 | 340,500 | 2,710,380 | ||||||
Total (Cost $26,535,970) | 47,980,481 | |||||||
CONSUMER STAPLES – 0.1% | ||||||||
BEVERAGES - 0.1% | ||||||||
Eastside Distilling 1 | 256,800 | 328,704 | ||||||
Total (Cost $868,971) | 328,704 | |||||||
ENERGY – 1.7% | ||||||||
ENERGY EQUIPMENT & SERVICES - 1.7% | ||||||||
†Aspen Aerogels 1 | 120,200 | 2,006,138 | ||||||
Natural Gas Services Group 1 | 314,187 | 2,978,492 | ||||||
Profire Energy 1 | 1,389,432 | 1,184,491 | ||||||
Total (Cost $6,749,930) | 6,169,121 | |||||||
FINANCIALS – 13.2% | ||||||||
BANKS - 4.8% | ||||||||
Allegiance Bancshares | 82,800 | 2,825,964 | ||||||
BayCom Corporation 1 | 118,800 | 1,802,196 | ||||||
Caribbean Investment Holdings 2 | 1,858,138 | 1,010,075 | ||||||
County Bancorp | 92,400 | 2,040,192 | ||||||
HarborOne Bancorp | 261,253 | 2,837,208 | ||||||
†HBT Financial | 91,600 | 1,387,740 | ||||||
Investar Holding | 128,400 | 2,123,736 |
Midway Investments 1,4 | 1,858,170 | 0 | ||||||
TriState Capital Holdings 1 | 182,757 | 3,179,972 | ||||||
17,207,083 | ||||||||
CAPITAL MARKETS - 5.3% | ||||||||
B. Riley Financial | 133,700 | 5,912,214 | ||||||
Canaccord Genuity Group | 469,900 | 4,119,792 | ||||||
Silvercrest Asset Management Group Cl. A | 204,000 | 2,833,560 | ||||||
Sprott | 108,480 | 3,149,832 | ||||||
StoneX Group 1,3 | 50,200 | 2,906,580 | ||||||
18,921,978 | ||||||||
DIVERSIFIED FINANCIAL SERVICES - 0.2% | ||||||||
Waterloo Investment Holdings 1,4 | 2,760,000 | 690,000 | ||||||
THRIFTS & MORTGAGE FINANCE - 2.9% | ||||||||
Meridian Bancorp | 197,500 | 2,944,725 | ||||||
PCSB Financial | 174,400 | 2,779,936 | ||||||
Territorial Bancorp | 98,000 | 2,354,940 | ||||||
Western New England Bancorp | 334,100 | 2,301,949 | ||||||
10,381,550 | ||||||||
Total (Cost $41,873,680) | 47,200,611 | |||||||
HEALTH CARE – 13.1% | ||||||||
BIOTECHNOLOGY - 2.6% | ||||||||
†CareDx 1 | 46,800 | 3,390,660 | ||||||
Dynavax Technologies 1 | 261,300 | 1,162,785 | ||||||
†MeiraGTx Holdings 1 | 117,100 | 1,772,894 | ||||||
Zealand Pharma 1,2 | 83,000 | 3,015,079 | ||||||
9,341,418 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 6.3% | ||||||||
Apyx Medical 1,3 | 348,300 | 2,507,760 | ||||||
AtriCure 1 | 52,400 | 2,917,108 | ||||||
Chembio Diagnostics 1 | 240,253 | 1,141,202 | ||||||
CryoLife 1 | 167,455 | 3,953,613 | ||||||
Cutera 1 | 55,600 | 1,340,516 | ||||||
Mesa Laboratories | 4,700 | 1,347,208 | ||||||
†Misonix 1 | 115,000 | 1,437,500 | ||||||
OrthoPediatrics Corporation 1 | 57,400 | 2,367,750 | ||||||
Profound Medical 1 | 117,700 | 2,421,685 | ||||||
Surmodics 1 | 65,822 | 2,864,573 | ||||||
22,298,915 | ||||||||
HEALTH CARE PROVIDERS & SERVICES - 0.6% | ||||||||
†Sharps Compliance 1,3 | 232,600 | 2,198,070 | ||||||
LIFE SCIENCES TOOLS & SERVICES - 3.2% | ||||||||
Harvard Bioscience 1 | 850,779 | 3,649,842 | ||||||
NeoGenomics 1 | 75,700 | 4,075,688 | ||||||
Quanterix Corporation 1 | 82,700 | 3,845,550 | ||||||
11,571,080 | ||||||||
PHARMACEUTICALS - 0.4% | ||||||||
Axsome Therapeutics 1,3 | 17,400 | 1,417,578 | ||||||
Total (Cost $24,153,330) | 46,827,061 | |||||||
INDUSTRIALS – 23.3% | ||||||||
AEROSPACE & DEFENSE - 1.0% | ||||||||
CPI Aerostructures 1 | 398,684 | 1,527,359 | ||||||
Kratos Defense & Security Solutions 1 | 75,100 | 2,059,993 | ||||||
3,587,352 | ||||||||
BUILDING PRODUCTS - 0.5% | ||||||||
Quanex Building Products | 78,200 | 1,733,694 | ||||||
COMMERCIAL SERVICES & SUPPLIES - 1.2% | ||||||||
Acme United | 49,800 | 1,500,474 |
34 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2020
Royce Micro-Cap Fund (continued) | ||||||||
SHARES | VALUE | |||||||
INDUSTRIALS (continued) | ||||||||
COMMERCIAL SERVICES & SUPPLIES (continued) | ||||||||
Heritage-Crystal Clean 1 | 124,474 | $ | 2,622,667 | |||||
4,123,141 | ||||||||
CONSTRUCTION & ENGINEERING - 5.4% | ||||||||
Ameresco Cl. A 1 | 96,900 | 5,062,056 | ||||||
Construction Partners Cl. A 1 | 138,100 | 4,020,091 | ||||||
IES Holdings 1 | 84,900 | 3,908,796 | ||||||
Northwest Pipe 1 | 124,200 | 3,514,860 | ||||||
†NV5 Global 1 | 36,200 | 2,851,836 | ||||||
19,357,639 | ||||||||
ELECTRICAL EQUIPMENT - 1.7% | ||||||||
American Superconductor 1 | 243,600 | 5,705,112 | ||||||
Power Solutions International 1,2 | 99,900 | 309,690 | ||||||
6,014,802 | ||||||||
MACHINERY - 6.4% | ||||||||
Alimak Group 2 | 182,300 | 2,901,603 | ||||||
CIRCOR International 1 | 121,400 | 4,666,616 | ||||||
Graham Corporation | 168,588 | 2,559,166 | ||||||
Porvair 2 | 313,000 | 2,266,124 | ||||||
Shyft Group | 142,100 | 4,032,798 | ||||||
Wabash National | 211,900 | 3,651,037 | ||||||
Westport Fuel Systems 1 | 535,200 | 2,852,616 | ||||||
22,929,960 | ||||||||
MARINE - 0.9% | ||||||||
Clarkson 2 | 89,831 | 3,318,442 | ||||||
PROFESSIONAL SERVICES - 4.2% | ||||||||
CRA International | 52,483 | 2,672,959 | ||||||
Forrester Research 1 | 43,300 | 1,814,270 | ||||||
GP Strategies 1 | 239,418 | 2,839,497 | ||||||
Heidrick & Struggles International | 99,540 | 2,924,485 | ||||||
Kforce | 55,932 | 2,354,178 | ||||||
Resources Connection | 200,252 | 2,517,168 | ||||||
15,122,557 | ||||||||
TRADING COMPANIES & DISTRIBUTORS - 2.0% | ||||||||
Lawson Products 1 | 76,900 | 3,914,979 | ||||||
Transcat 1 | 87,500 | 3,034,500 | ||||||
6,949,479 | ||||||||
Total (Cost $49,445,487) | 83,137,066 | |||||||
INFORMATION TECHNOLOGY – 26.6% | ||||||||
COMMUNICATIONS EQUIPMENT - 2.4% | ||||||||
Digi International 1 | 194,600 | 3,677,940 | ||||||
EMCORE Corporation 1 | 481,100 | 2,621,995 | ||||||
Harmonic 1 | 306,600 | 2,265,774 | ||||||
8,565,709 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 7.9% | ||||||||
Fabrinet 1 | 21,349 | 1,656,469 | ||||||
FARO Technologies 1 | 46,300 | 3,270,169 | ||||||
LightPath Technologies Cl. A 1 | 789,784 | 3,095,953 | ||||||
Luna Innovations 1 | 447,600 | 4,422,288 | ||||||
nLIGHT 1 | 106,600 | 3,480,490 | ||||||
PAR Technology 1 | 78,700 | 4,941,573 | ||||||
PC Connection 1 | 52,300 | 2,473,267 | ||||||
†PowerFleet 1 | 186,900 | 1,388,667 | ||||||
Vishay Precision Group 1 | 112,100 | 3,528,908 | ||||||
28,257,784 | ||||||||
IT SERVICES - 0.6% | ||||||||
Cass Information Systems | 36,016 | 1,401,383 | ||||||
Computer Task Group 1 | 137,600 | 842,112 | ||||||
2,243,495 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 12.6% | ||||||||
Aehr Test Systems 1 | 699,800 | 1,770,494 | ||||||
Axcelis Technologies 1 | 95,400 | 2,778,048 | ||||||
AXT 1 | 490,200 | 4,691,214 | ||||||
Camtek 1 | 201,900 | 4,423,629 | ||||||
Cirrus Logic 1 | 31,600 | 2,597,520 | ||||||
Cohu | 116,900 | 4,463,242 | ||||||
CyberOptics Corporation 1 | 86,700 | 1,967,223 | ||||||
Everspin Technologies 1,3 | 33,500 | 154,100 | ||||||
FormFactor 1 | 97,200 | 4,181,544 | ||||||
Ichor Holdings 1 | 89,800 | 2,707,021 | ||||||
Nova Measuring Instruments 1 | 54,100 | 3,819,460 | ||||||
NVE Corporation | 19,400 | 1,089,892 | ||||||
PDF Solutions 1 | 142,600 | 3,080,160 | ||||||
Photronics 1 | 284,800 | 3,178,368 | ||||||
Ultra Clean Holdings 1 | 125,800 | 3,918,670 | ||||||
44,820,585 | ||||||||
SOFTWARE - 2.5% | ||||||||
Agilysys 1 | 116,900 | 4,486,622 | ||||||
QAD Cl. A | 66,413 | 4,195,973 | ||||||
8,682,595 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.6% | ||||||||
AstroNova | 194,100 | 2,067,165 | ||||||
Total (Cost $50,000,504) | 94,637,333 | |||||||
MATERIALS – 2.9% | ||||||||
METALS & MINING - 2.9% | ||||||||
Altius Minerals | 165,400 | 1,778,872 | ||||||
Ferroglobe (Warranty Insurance Trust) 1,4 | 205,763 | 0 | ||||||
Haynes International | 100,130 | 2,387,099 | ||||||
Major Drilling Group International 1 | 687,900 | 4,155,826 | ||||||
Universal Stainless & Alloy Products 1 | 286,200 | 2,140,776 | ||||||
Total (Cost $11,103,212) | 10,462,573 | |||||||
REAL ESTATE – 1.4% | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.6% | ||||||||
Postal Realty Trust Cl. A | 120,100 | 2,027,288 | ||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.8% | ||||||||
FRP Holdings 1 | 38,975 | 1,775,311 | ||||||
Marcus & Millichap 1 | 33,800 | 1,258,374 | ||||||
3,033,685 | ||||||||
Total (Cost $3,874,102) | 5,060,973 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $220,858,461) | 352,743,110 | |||||||
REPURCHASE AGREEMENT– 1.2% | ||||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/20, due 1/4/21, maturity value $4,230,876 (collateralized by obligations of various U.S. Government Agencies, 0.125% due 12/31/22, valued at $4,315,500) | ||||||||
(Cost $4,230,876) | 4,230,876 | |||||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 0.4% | ||||||||
Money Market Funds | ||||||||
Federated Government Obligations Fund – Institutional Shares (7 day yield-0.01%) | ||||||||
(Cost $1,299,188) | 1,299,188 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 35 |
Schedules of Investments
Royce Micro-Cap Fund (continued) | ||||
VALUE | ||||
TOTAL INVESTMENTS – 100.5% | ||||
(Cost $226,388,525) | $ | 358,273,174 | ||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.5)% | (1,624,508 | ) | ||
NET ASSETS – 100.0% | $ | 356,648,666 |
Royce Opportunity Fund |
Common Stocks – 95.0% |
SHARES | VALUE | |||||||
COMMUNICATION SERVICES – 1.5% | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.5% | ||||||||
Iridium Communications 1,3 | 60,493 | $ | 2,378,888 | |||||
Ooma 1 | 261,378 | 3,763,843 | ||||||
6,142,731 | ||||||||
INTERACTIVE MEDIA & SERVICES - 0.8% | ||||||||
†Cars.com 1,3 | 204,900 | 2,315,370 | ||||||
Eventbrite Cl. A 1,3 | 173,400 | 3,138,540 | ||||||
QuinStreet 1 | 268,100 | 5,748,064 | ||||||
11,201,974 | ||||||||
MEDIA - 0.2% | ||||||||
comScore 1,3 | 924,582 | 2,302,209 | ||||||
Total (Cost $13,762,613) | 19,646,914 | |||||||
CONSUMER DISCRETIONARY – 14.0% | ||||||||
AUTO COMPONENTS - 2.2% | ||||||||
Dana | 230,037 | 4,490,322 | ||||||
Horizon Global 1 | 1,040,880 | 8,941,159 | ||||||
Modine Manufacturing 1 | 609,668 | 7,657,430 | ||||||
†Patrick Industries | 25,300 | 1,729,255 | ||||||
†Stoneridge 1 | 186,117 | 5,626,317 | ||||||
†Unique Fabricating 1 | 36,200 | 199,075 | ||||||
28,643,558 | ||||||||
AUTOMOBILES - 0.3% | ||||||||
Winnebago Industries | 57,200 | 3,428,568 | ||||||
DIVERSIFIED CONSUMER SERVICES - 0.8% | ||||||||
frontdoor 1 | 131,399 | 6,597,544 | ||||||
†Regis Corporation 1 | 501,400 | 4,607,866 | ||||||
11,205,410 | ||||||||
HOTELS, RESTAURANTS & LEISURE - 3.9% | ||||||||
†BJ's Restaurants 1 | 205,901 | 7,925,129 | ||||||
Carrols Restaurant Group 1 | 979,392 | 6,150,582 | ||||||
†Cedar Fair LP | 147,900 | 5,818,386 | ||||||
Century Casinos 1 | 226,140 | 1,445,035 | ||||||
†Chuy's Holdings 1,3 | 292,093 | 7,737,543 | ||||||
†J Alexander's Holdings 1 | 56,540 | 412,177 | ||||||
Kura Sushi USA Cl. A 1,3 | 89,997 | 1,754,941 | ||||||
Noodles & Company Cl. A 1 | 700,554 | 5,534,377 | ||||||
Red Robin Gourmet Burgers 1,3 | 112,700 | 2,167,221 | ||||||
†Ruth's Hospitality Group | 333,700 | 5,916,501 | ||||||
Six Flags Entertainment | 180,900 | 6,168,690 | ||||||
51,030,582 | ||||||||
HOUSEHOLD DURABLES - 2.7% | ||||||||
Beazer Homes USA 1 | 320,106 | 4,849,606 | ||||||
†Cavco Industries 1 | 23,200 | 4,070,440 | ||||||
Century Communities 1 | 51,100 | 2,237,158 | ||||||
Dixie Group (The) 1 | 150,100 | 382,755 | ||||||
Ethan Allen Interiors | 141,900 | 2,867,799 | ||||||
Installed Building Products 1,3 | 19,100 | 1,946,863 | ||||||
LGI Homes 1,3 | 50,470 | 5,342,250 | ||||||
M.D.C. Holdings | 7,034 | 341,852 | ||||||
New Home 1 | 411,659 | 1,930,681 | ||||||
Skyline Champion 1 | 110,200 | 3,409,588 | ||||||
†Taylor Morrison Home 1,3 | 113,554 | 2,912,660 | ||||||
Toll Brothers | 37,186 | 1,616,475 | ||||||
TRI Pointe Group 1 | 176,106 | 3,037,829 | ||||||
34,945,956 | ||||||||
INTERNET & DIRECT MARKETING RETAIL - 1.3% | ||||||||
Lands' End 1,3 | 45,100 | 972,807 | ||||||
Leaf Group 1 | 53,426 | 248,431 |
36 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2020
Royce Opportunity Fund (continued) |
SHARES | VALUE | |||||||
CONSUMER DISCRETIONARY (continued) | ||||||||
INTERNET & DIRECT MARKETING RETAIL (continued) | ||||||||
Magnite 1,3 | 523,722 | $ | 16,083,502 | |||||
17,304,740 | ||||||||
SPECIALTY RETAIL - 1.9% | ||||||||
†America's Car-Mart 1 | 68,600 | 7,535,024 | ||||||
Lithia Motors Cl. A | 17,400 | 5,092,458 | ||||||
Lumber Liquidators Holdings 1,3 | 249,756 | 7,677,499 | ||||||
Sonic Automotive Cl. A | 116,200 | 4,481,834 | ||||||
24,786,815 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS - 0.9% | ||||||||
Jerash Holdings (US) | 55,769 | 333,499 | ||||||
†Tapestry | 112,400 | 3,493,392 | ||||||
†Under Armour Cl. A 1 | 249,200 | 4,278,764 | ||||||
Unifi 1 | 215,054 | 3,815,058 | ||||||
11,920,713 | ||||||||
Total (Cost $113,668,659) | 183,266,342 | |||||||
CONSUMER STAPLES – 1.7% | ||||||||
BEVERAGES - 0.5% | ||||||||
Eastside Distilling 1 | 13,000 | 16,640 | ||||||
MGP Ingredients | 110,703 | 5,209,683 | ||||||
Reed's 1 | 1,928,894 | 1,139,977 | ||||||
6,366,300 | ||||||||
FOOD & STAPLES RETAILING - 0.7% | ||||||||
†Chefs Warehouse 1 | 232,700 | 5,978,063 | ||||||
Natural Grocers by Vitamin Cottage | 285,857 | 3,927,675 | ||||||
9,905,738 | ||||||||
FOOD PRODUCTS - 0.4% | ||||||||
SunOpta 1 | 411,127 | 4,797,852 | ||||||
HOUSEHOLD PRODUCTS - 0.1% | ||||||||
Central Garden & Pet Cl. A 1 | 32,300 | 1,173,459 | ||||||
Total (Cost $16,306,671) | 22,243,349 | |||||||
ENERGY – 2.4% | ||||||||
ENERGY EQUIPMENT & SERVICES - 0.7% | ||||||||
Archrock | 490,800 | 4,250,328 | ||||||
Aspen Aerogels 1 | 201,570 | 3,364,203 | ||||||
Newpark Resources 1 | 86,526 | 166,130 | ||||||
Ranger Energy Services Cl. A 1,3 | 123,489 | 449,500 | ||||||
TETRA Technologies 1 | 57,930 | 49,907 | ||||||
U.S. Silica Holdings | 158,302 | 1,111,280 | ||||||
9,391,348 | ||||||||
OIL, GAS & CONSUMABLE FUELS - 1.7% | ||||||||
Baytex Energy 1,2 | 1,354,100 | 721,735 | ||||||
Dorian LPG 1 | 496,693 | 6,054,688 | ||||||
Earthstone Energy Cl. A 1 | 230,804 | 1,230,185 | ||||||
Matador Resources 1 | 286,883 | 3,459,809 | ||||||
Navigator Holdings 1 | 543,184 | 5,947,865 | ||||||
†Southwestern Energy 1 | 443,981 | 1,323,063 | ||||||
Teekay LNG Partners L.P. | 249,436 | 2,858,537 | ||||||
21,595,882 | ||||||||
Total (Cost $29,391,490) | 30,987,230 | |||||||
FINANCIALS – 8.7% | ||||||||
BANKS - 1.5% | ||||||||
First Foundation | 118,000 | 2,360,000 | ||||||
Hilltop Holdings | 310,808 | 8,550,328 | ||||||
Seacoast Banking Corporation of Florida 1 | 168,750 | 4,969,688 | ||||||
TriState Capital Holdings 1 | 196,187 | 3,413,654 | ||||||
19,293,670 |
CAPITAL MARKETS - 2.6% | ||||||||
B. Riley Financial | 289,917 | 12,820,130 | ||||||
Evercore Cl. A | 78,900 | 8,650,596 | ||||||
†Houlihan Lokey Cl. A | 68,389 | 4,597,792 | ||||||
†JMP Group 1 | 62,560 | 240,856 | ||||||
†Moelis & Company Cl. A | 180,626 | 8,446,072 | ||||||
34,755,446 | ||||||||
INSURANCE - 2.5% | ||||||||
†Brighthouse Financial 1 | 149,600 | 5,416,268 | ||||||
HCI Group | 103,776 | 5,427,485 | ||||||
Heritage Insurance Holdings | 486,591 | 4,929,167 | ||||||
Old Republic International | 255,900 | 5,043,789 | ||||||
Stewart Information Services | 176,440 | 8,532,638 | ||||||
†United Fire Group | 115,903 | 2,909,165 | ||||||
32,258,512 | ||||||||
MORTGAGE REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.2% | ||||||||
†Exantas Capital 1 | 533,891 | 2,130,225 | ||||||
THRIFTS & MORTGAGE FINANCE - 1.9% | ||||||||
Axos Financial 1 | 70,600 | 2,649,618 | ||||||
NMI Holdings Cl. A 1 | 260,763 | 5,906,282 | ||||||
Radian Group | 226,698 | 4,590,634 | ||||||
Walker & Dunlop | 126,228 | 11,615,501 | ||||||
24,762,035 | ||||||||
Total (Cost $88,315,025) | 113,199,888 | |||||||
HEALTH CARE – 11.8% | ||||||||
BIOTECHNOLOGY - 1.3% | ||||||||
CareDx 1,3 | 75,996 | 5,505,910 | ||||||
Emergent BioSolutions 1 | 85,826 | 7,690,010 | ||||||
Flexion Therapeutics 1,3 | 282,351 | 3,258,330 | ||||||
16,454,250 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 4.4% | ||||||||
Accuray 1 | 886,708 | 3,697,572 | ||||||
Alphatec Holdings 1 | 304,100 | 4,415,532 | ||||||
†Cutera 1 | 211,910 | 5,109,150 | ||||||
IntriCon Corporation 1,3 | 395,910 | 7,165,971 | ||||||
Invacare Corporation | 530,638 | 4,749,210 | ||||||
†Neuronetics 1,3 | 367,740 | 4,085,592 | ||||||
Orthofix Medical 1 | 186,296 | 8,007,002 | ||||||
Ra Medical Systems 1,3 | 96,588 | 717,649 | ||||||
†Sientra 1,3 | 851,916 | 3,313,953 | ||||||
SmileDirectClub Cl. A 1,3 | 442,894 | 5,288,154 | ||||||
Surgalign Holdings 1,3 | 805,645 | 1,764,363 | ||||||
Varex Imaging 1,3 | 282,446 | 4,711,199 | ||||||
†ViewRay 1 | 1,128,370 | 4,310,374 | ||||||
57,335,721 | ||||||||
HEALTH CARE PROVIDERS & SERVICES - 5.4% | ||||||||
Acadia Healthcare 1,3 | 89,972 | 4,521,993 | ||||||
BioTelemetry 1 | 28,900 | 2,083,112 | ||||||
Community Health Systems 1 | 1,346,514 | 10,004,599 | ||||||
Cross Country Healthcare 1 | 769,820 | 6,828,303 | ||||||
Option Care Health 1,3 | 499,371 | 7,810,163 | ||||||
Owens & Minor | 404,268 | 10,935,449 | ||||||
R1 RCM 1,3 | 388,743 | 9,337,607 | ||||||
RadNet 1 | 121,700 | 2,381,669 | ||||||
Select Medical Holdings 1 | 211,300 | 5,844,558 | ||||||
Surgery Partners 1,3 | 368,414 | 10,687,690 | ||||||
70,435,143 | ||||||||
HEALTH CARE TECHNOLOGY - 0.4% | ||||||||
Castlight Health Cl. B 1,3 | 1,199,760 | 1,559,688 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 37 |
Schedules of Investments
Royce Opportunity Fund (continued) |
SHARES | VALUE | |||||||
HEALTH CARE (continued) | ||||||||
HEALTH CARE TECHNOLOGY (continued) | ||||||||
Evolent Health Cl. A 1,3 | 264,200 | $ | 4,235,126 | |||||
5,794,814 | ||||||||
PHARMACEUTICALS - 0.3% | ||||||||
†Pacira BioSciences 1,3 | 73,500 | 4,398,240 | ||||||
Total (Cost $107,365,712) | 154,418,168 | |||||||
INDUSTRIALS – 21.9% | ||||||||
AEROSPACE & DEFENSE - 1.4% | ||||||||
AAR Corporation | 165,700 | 6,001,654 | ||||||
Astronics Corporation 1 | 32,300 | 427,329 | ||||||
Cubic Corporation | 31,700 | 1,966,668 | ||||||
Ducommun 1 | 68,564 | 3,681,887 | ||||||
Hexcel Corporation | 4,800 | 233,704 | ||||||
Spirit AeroSystems Holdings Cl. A | 62,000 | 2,423,580 | ||||||
Triumph Group | 257,416 | 3,233,145 | ||||||
17,967,967 | ||||||||
AIR FREIGHT & LOGISTICS - 1.3% | ||||||||
Atlas Air Worldwide Holdings 1 | 170,086 | 9,276,491 | ||||||
†Hub Group Cl. A 1 | 93,300 | 5,318,100 | ||||||
†Radiant Logistics 1 | 446,469 | 2,589,520 | ||||||
17,184,111 | ||||||||
AIRLINES - 2.5% | ||||||||
Alaska Air Group | 146,100 | 7,597,200 | ||||||
†Allegiant Travel | 54,192 | 10,255,294 | ||||||
JetBlue Airways 1 | 625,200 | 9,090,408 | ||||||
Mesa Air Group 1,3 | 778,346 | 5,207,135 | ||||||
32,150,037 | ||||||||
BUILDING PRODUCTS - 2.4% | ||||||||
American Woodmark 1 | 88,100 | 8,268,185 | ||||||
Apogee Enterprises | 42,100 | 1,333,728 | ||||||
Builders FirstSource 1 | 34,795 | 1,419,984 | ||||||
Gibraltar Industries 1 | 47,800 | 3,438,732 | ||||||
Griffon Corporation | 193,067 | 3,934,705 | ||||||
Insteel Industries | 125,450 | 2,793,772 | ||||||
†JELD-WEN Holding 1 | 166,000 | 4,209,760 | ||||||
PGT Innovations 1 | 176,143 | 3,582,749 | ||||||
Resideo Technologies 1 | 85,316 | 1,813,818 | ||||||
30,795,433 | ||||||||
COMMERCIAL SERVICES & SUPPLIES - 1.6% | ||||||||
†CECO Environmental 1 | 135,999 | 946,553 | ||||||
†Covanta Holding Corporation | 344,800 | 4,527,224 | ||||||
†Heritage-Crystal Clean 1 | 27,100 | 570,997 | ||||||
Interface | 294,167 | 3,088,753 | ||||||
†KAR Auction Services | 226,700 | 4,218,887 | ||||||
Pitney Bowes | 1,188,294 | 7,319,891 | ||||||
20,672,305 | ||||||||
CONSTRUCTION & ENGINEERING - 2.5% | ||||||||
Aegion Corporation 1 | 66,916 | 1,270,735 | ||||||
Ameresco Cl. A 1 | 126,826 | 6,625,390 | ||||||
Arcosa | 159,125 | 8,740,736 | ||||||
Concrete Pumping Holdings 1,3 | 401,010 | 1,535,868 | ||||||
Construction Partners Cl. A 1 | 184,959 | 5,384,156 | ||||||
Great Lakes Dredge & Dock 1 | 52,516 | 691,636 | ||||||
Northwest Pipe 1 | 197,010 | 5,575,383 | ||||||
†Orion Group Holdings 1 | 258,259 | 1,280,965 | ||||||
Primoris Services | 63,780 | 1,760,966 | ||||||
32,865,835 | ||||||||
ELECTRICAL EQUIPMENT - 1.3% | ||||||||
Bloom Energy Cl. A 1,3 | 309,200 | 8,861,672 | ||||||
Encore Wire | 71,333 | 4,320,640 | ||||||
LSI Industries | 426,753 | 3,653,005 | ||||||
Power Solutions International 1,2 | 235,970 | 731,507 | ||||||
17,566,824 | ||||||||
MACHINERY - 5.7% | ||||||||
Commercial Vehicle Group 1 | 632,377 | 5,470,061 | ||||||
EnPro Industries | 60,000 | 4,531,200 | ||||||
Gencor Industries 1 | 30,579 | 376,122 | ||||||
Hurco Companies | 71,765 | 2,152,950 | ||||||
Hyster-Yale Materials Handling Cl. A | 79,760 | 4,749,708 | ||||||
LiqTech International 1,3 | 447,155 | 3,577,240 | ||||||
Lydall 1 | 320,374 | 9,620,831 | ||||||
Manitex International 1 | 379,172 | 1,956,528 | ||||||
Meritor 1 | 194,008 | 5,414,763 | ||||||
Park-Ohio Holdings | 124,829 | 3,857,216 | ||||||
Shyft Group | 245,038 | 6,954,178 | ||||||
TriMas Corporation 1 | 118,810 | 3,762,713 | ||||||
Trinity Industries | 178,115 | 4,700,455 | ||||||
Wabash National | 449,300 | 7,741,439 | ||||||
Westport Fuel Systems 1 | 1,947,233 | 10,378,752 | ||||||
75,244,156 | ||||||||
PROFESSIONAL SERVICES - 0.8% | ||||||||
GP Strategies 1 | 314,645 | 3,731,690 | ||||||
Heidrick & Struggles International | 14,535 | 427,038 | ||||||
Korn Ferry | 30,945 | 1,346,107 | ||||||
Mistras Group 1 | 175,351 | 1,360,724 | ||||||
†TrueBlue 1 | 219,236 | 4,097,521 | ||||||
10,963,080 | ||||||||
TRADING COMPANIES & DISTRIBUTORS - 2.4% | ||||||||
Air Lease Cl. A | 287,838 | 12,785,764 | ||||||
†Boise Cascade | 52,500 | 2,509,500 | ||||||
Fortress Transportation & Infrastructure | ||||||||
Investors LLC Cl. A | 47,700 | 1,119,042 | ||||||
General Finance 1 | 301,150 | 2,562,787 | ||||||
Herc Holdings 1 | 186,542 | 12,388,254 | ||||||
31,365,347 | ||||||||
Total (Cost $197,691,011) | 286,775,095 | |||||||
INFORMATION TECHNOLOGY – 20.1% | ||||||||
COMMUNICATIONS EQUIPMENT - 4.1% | ||||||||
†ADTRAN | 415,200 | 6,132,504 | ||||||
Aviat Networks 1 | 137,889 | 4,708,909 | ||||||
CalAmp Corporation 1 | 658,300 | 6,530,336 | ||||||
†Ceragon Networks 1,3 | 562,516 | 1,563,795 | ||||||
Ciena Corporation 1 | 38,473 | 2,033,298 | ||||||
Comtech Telecommunications | 266,296 | 5,509,664 | ||||||
Digi International 1 | 393,102 | 7,429,628 | ||||||
DZS 1,3 | 380,804 | 5,891,038 | ||||||
Infinera Corporation 1,3 | 912,946 | 9,567,674 | ||||||
PCTEL | 586,462 | 3,853,055 | ||||||
53,219,901 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 2.7% | ||||||||
CTS Corporation | 146,014 | 5,012,661 | ||||||
Fabrinet 1 | 18,229 | 1,414,388 | ||||||
Frequency Electronics 1 | 321,193 | 3,472,096 | ||||||
Identiv 1 | 332,420 | 2,825,570 | ||||||
II-VI 1 | 114,468 | 8,694,989 | ||||||
†Iteris 1,3 | 648,200 | 3,662,330 | ||||||
Knowles Corporation 1,3 | 183,420 | 3,380,431 |
38 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2020
Royce Opportunity Fund (continued) |
SHARES | VALUE | |||||||
INFORMATION TECHNOLOGY (continued) | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (continued) | ||||||||
†VIA optronics ADR 1 | 78,918 | $ | 1,062,236 | |||||
Vishay Intertechnology | 255,324 | 5,287,760 | ||||||
34,812,461 | ||||||||
IT SERVICES - 0.4% | ||||||||
Limelight Networks 1 | 749,683 | 2,991,235 | ||||||
Perspecta | 99,559 | 2,397,381 | ||||||
5,388,616 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 7.2% | ||||||||
Advanced Energy Industries 1 | 90,903 | 8,814,864 | ||||||
Alpha & Omega Semiconductor 1 | 559,851 | 13,234,878 | ||||||
Amkor Technology | 556,140 | 8,386,591 | ||||||
Amtech Systems 1 | 214,548 | 1,368,816 | ||||||
Cohu | 181,976 | 6,947,844 | ||||||
FormFactor 1 | 140,613 | 6,049,171 | ||||||
Ichor Holdings 1 | 164,294 | 4,952,643 | ||||||
Kulicke & Soffa Industries | 186,465 | 5,931,452 | ||||||
MACOM Technology Solutions Holdings 1,3 | 124,134 | 6,832,335 | ||||||
†MKS Instruments | 30,700 | 4,618,815 | ||||||
Onto Innovation 1 | 213,319 | 10,143,319 | ||||||
SunPower Corporation 1 | 126,900 | 3,253,716 | ||||||
Ultra Clean Holdings 1 | 258,427 | 8,050,001 | ||||||
Veeco Instruments 1,3 | 361,387 | 6,273,678 | ||||||
94,858,123 | ||||||||
SOFTWARE - 4.1% | ||||||||
A10 Networks 1 | 750,126 | 7,396,242 | ||||||
Avaya Holdings 1 | 491,054 | 9,403,684 | ||||||
Cloudera 1,3 | 457,100 | 6,358,261 | ||||||
Ebix | 211,300 | 8,023,061 | ||||||
†InterDigital | 77,500 | 4,702,700 | ||||||
†Kaleyra 1,3 | 555,157 | 5,473,848 | ||||||
†New Relic 1 | 92,300 | 6,036,420 | ||||||
SecureWorks Corporation Cl. A 1 | 437,362 | 6,219,288 | ||||||
53,613,504 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.6% | ||||||||
Avid Technology 1 | 762,554 | 12,101,732 | ||||||
Intevac 1 | 574,062 | 4,138,987 | ||||||
3D Systems 1 | 503,987 | 5,281,784 | ||||||
21,522,503 | ||||||||
Total (Cost $159,517,917) | 263,415,108 | |||||||
MATERIALS – 9.3% | ||||||||
CHEMICALS - 4.6% | ||||||||
†AdvanSix 1 | 79,997 | 1,599,140 | ||||||
American Vanguard | 282,204 | 4,379,806 | ||||||
Ferro Corporation 1 | 457,467 | 6,692,742 | ||||||
Huntsman Corporation | 284,300 | 7,147,302 | ||||||
Intrepid Potash 1,3 | 282,952 | 6,833,291 | ||||||
Kraton Corporation 1 | 256,218 | 7,120,298 | ||||||
Livent Corporation 1,3 | 600,400 | 11,311,536 | ||||||
LSB Industries 1 | 176,600 | 598,674 | ||||||
Olin Corporation | 452,113 | 11,103,895 | ||||||
Trecora Resources 1 | 400,231 | 2,797,615 | ||||||
Tronox Holdings | 102,500 | 1,498,550 | ||||||
61,082,849 | ||||||||
CONSTRUCTION MATERIALS - 1.1% | ||||||||
Forterra 1 | 474,365 | 8,156,706 | ||||||
U.S. Concrete 1 | 148,731 | 5,944,778 | ||||||
14,101,484 |
METALS & MINING - 2.9% | ||||||||
†Alcoa Corporation 1 | 265,993 | 6,131,139 | ||||||
Allegheny Technologies 1 | 410,314 | 6,880,966 | ||||||
Century Aluminum 1 | 490,110 | 5,405,913 | ||||||
Cleveland-Cliffs | 677,349 | 9,862,201 | ||||||
Ferroglobe 1 | 1,282,071 | 2,102,596 | ||||||
Haynes International | 190,824 | 4,549,244 | ||||||
Noranda Aluminum Holding Corporation 1,2 | 488,157 | 7,811 | ||||||
Synalloy Corporation 1 | 204,561 | 1,595,576 | ||||||
Universal Stainless & Alloy Products 1 | 150,141 | 1,123,055 | ||||||
37,658,501 | ||||||||
PAPER & FOREST PRODUCTS - 0.7% | ||||||||
Glatfelter | 259,045 | 4,243,157 | ||||||
Louisiana-Pacific | 137,400 | 5,107,158 | ||||||
9,350,315 | ||||||||
Total (Cost $87,874,426) | 122,193,149 | |||||||
REAL ESTATE – 3.2% | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 2.7% | ||||||||
†Alexander & Baldwin | 299,100 | 5,138,538 | ||||||
Armada Hoffler Properties | 445,034 | 4,993,282 | ||||||
CatchMark Timber Trust Cl. A | 257,100 | 2,406,456 | ||||||
†Diversified Healthcare Trust | 304,200 | 1,253,304 | ||||||
†Kimco Realty | 480,500 | 7,212,305 | ||||||
Ryman Hospitality Properties | 148,873 | 10,087,634 | ||||||
†Tanger Factory Outlet Centers | 479,400 | 4,774,824 | ||||||
35,866,343 | ||||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.5% | ||||||||
Realogy Holdings 1 | 331,920 | 4,354,790 | ||||||
Tejon Ranch 1 | 106,206 | 1,534,677 | ||||||
5,889,467 | ||||||||
Total (Cost $34,636,451) | 41,755,810 | |||||||
UTILITIES – 0.4% | ||||||||
ELECTRIC UTILITIES - 0.1% | ||||||||
Hawaiian Electric Industries | 28,500 | 1,008,615 | ||||||
MULTI-UTILITIES - 0.2% | ||||||||
Black Hills | 42,800 | 2,630,060 | ||||||
WATER UTILITIES - 0.1% | ||||||||
Pure Cycle 1 | 150,901 | 1,694,618 | ||||||
Total (Cost $4,426,748) | 5,333,293 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $852,956,723) | 1,243,234,346 | |||||||
REPURCHASE AGREEMENT– 6.1% | ||||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/20, due 1/4/21, maturity value $80,411,649 (collateralized by obligations of various U.S. Government Agencies, 1.625% due 8/31/22, valued at $82,019,888) | ||||||||
(Cost $80,411,649) | 80,411,649 | |||||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 0.4% | ||||||||
Money Market Funds | ||||||||
Federated Government Obligations Fund – Institutional Shares (7 day yield-0.01%) | ||||||||
(Cost $5,268,397) | 5,268,397 | |||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 39 |
Schedules of Investments
Royce Opportunity Fund (continued) |
VALUE | ||||
TOTAL INVESTMENTS – 101.5% | ||||
(Cost $938,636,769) | $ | 1,328,914,392 | ||
LIABILITIES LESS CASH AND OTHER ASSETS – (1.5)% | (19,920,564) | |||
NET ASSETS – 100.0% | $ | 1,308,993,828 |
Royce Pennsylvania Mutual Fund | ||||||||
Common Stocks – 98.6% | ||||||||
SHARES | VALUE | |||||||
COMMUNICATION SERVICES – 1.5% | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.8% | ||||||||
Bandwidth Cl. A 1,3 | 73,135 | $ | 11,238,655 | |||||
Liberty Latin America Cl. C 1 | 343,365 | 3,807,918 | ||||||
15,046,573 | ||||||||
ENTERTAINMENT - 0.3% | ||||||||
†Manchester United Cl. A | 250,290 | 4,189,855 | ||||||
†SciPlay Corporation Cl. A 1 | 159,834 | 2,213,701 | ||||||
6,403,556 | ||||||||
INTERACTIVE MEDIA & SERVICES - 0.2% | ||||||||
†Eventbrite Cl. A 1,3 | 201,200 | 3,641,720 | ||||||
MEDIA - 0.2% | ||||||||
Media General (Rights) 1,4 | 102,272 | 0 | ||||||
Meredith Corporation | 81,420 | 1,563,264 | ||||||
Saga Communications Cl. A | 93,535 | 2,246,711 | ||||||
3,809,975 | ||||||||
Total (Cost $27,481,094) | 28,901,824 | |||||||
CONSUMER DISCRETIONARY – 9.1% | ||||||||
AUTO COMPONENTS - 2.3% | ||||||||
Dorman Products 1 | 89,246 | 7,748,338 | ||||||
Gentex Corporation | 258,552 | 8,772,670 | ||||||
LCI Industries | 123,852 | 16,061,127 | ||||||
Patrick Industries | 128,121 | 8,757,070 | ||||||
Stoneridge 1 | 105,227 | 3,181,012 | ||||||
44,520,217 | ||||||||
AUTOMOBILES - 0.4% | ||||||||
Winnebago Industries | 142,749 | 8,556,375 | ||||||
DISTRIBUTORS - 0.2% | ||||||||
LKQ Corporation 1 | 101,823 | 3,588,242 | ||||||
HOTELS, RESTAURANTS & LEISURE - 0.1% | ||||||||
†Scientific Games 1 | 47,100 | 1,954,179 | ||||||
HOUSEHOLD DURABLES - 1.0% | ||||||||
La-Z-Boy | 72,210 | 2,876,846 | ||||||
Legacy Housing 1,3 | 192,025 | 2,901,498 | ||||||
†PulteGroup | 119,300 | 5,144,216 | ||||||
Skyline Champion 1 | 300,500 | 9,297,470 | ||||||
20,220,030 | ||||||||
INTERNET & DIRECT MARKETING RETAIL - 0.5% | ||||||||
Etsy 1 | 49,499 | 8,806,367 | ||||||
LEISURE PRODUCTS - 1.3% | ||||||||
†Brunswick Corporation | 132,500 | 10,101,800 | ||||||
Johnson Outdoors Cl. A | 25,965 | 2,924,438 | ||||||
†Malibu Boats Cl. A 1 | 45,300 | 2,828,532 | ||||||
MasterCraft Boat Holdings 1,3 | 342,939 | 8,518,605 | ||||||
24,373,375 | ||||||||
SPECIALTY RETAIL - 2.6% | ||||||||
†Aaron's Company (The) 3 | 139,129 | 2,637,886 | ||||||
America's Car-Mart 1 | 85,779 | 9,421,965 | ||||||
Asbury Automotive Group 1 | 49,743 | 7,249,545 | ||||||
†OneWater Marine Cl. A 1 | 252,882 | 7,356,338 | ||||||
Rent-A-Center | 391,372 | 14,985,634 | ||||||
Shoe Carnival | 205,291 | 8,043,301 | ||||||
49,694,669 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS - 0.7% | ||||||||
Canada Goose Holdings 1,3 | 238,779 | 7,108,451 | ||||||
Ralph Lauren Cl. A | 13,200 | 1,369,368 | ||||||
Wolverine World Wide | 137,155 | 4,286,094 | ||||||
12,763,913 | ||||||||
Total (Cost $97,082,250) | 174,477,367 |
40 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2020
Royce Pennsylvania Mutual Fund (continued) |
SHARES | VALUE | |||||||
CONSUMER STAPLES – 1.6% | ||||||||
FOOD PRODUCTS - 0.4% | ||||||||
Nomad Foods 1 | 154,056 | $ | 3,916,103 | |||||
Seneca Foods Cl. A 1 | 104,533 | 4,170,867 | ||||||
8,086,970 | ||||||||
HOUSEHOLD PRODUCTS - 0.1% | ||||||||
†Central Garden & Pet 1 | 22,000 | 849,420 | ||||||
PERSONAL PRODUCTS - 1.1% | ||||||||
†e.l.f. Beauty 1 | 392,900 | 9,897,151 | ||||||
Inter Parfums | 187,676 | 11,352,521 | ||||||
21,249,672 | ||||||||
Total (Cost $14,410,171) | 30,186,062 | |||||||
ENERGY – 1.0% | ||||||||
ENERGY EQUIPMENT & SERVICES - 1.0% | ||||||||
Pason Systems | 1,468,449 | 9,090,563 | ||||||
TGS-NOPEC Geophysical2 | 629,570 | 9,611,697 | ||||||
Total (Cost $19,498,270) | 18,702,260 | |||||||
FINANCIALS – 14.9% | ||||||||
BANKS - 4.6% | ||||||||
†BankUnited | 110,700 | 3,850,146 | ||||||
Camden National | 41,012 | 1,467,409 | ||||||
CIT Group | 100,000 | 3,590,000 | ||||||
City Holding Company | 38,180 | 2,655,419 | ||||||
CNB Financial | 60,932 | 1,297,242 | ||||||
Financial Institutions | 75,545 | 1,699,763 | ||||||
†First Bancshares | 125,390 | 3,872,043 | ||||||
First Citizens BancShares Cl. A | 41,586 | 23,881,592 | ||||||
†First Hawaiian | 162,600 | 3,834,108 | ||||||
†German American Bancorp | 58,300 | 1,929,147 | ||||||
Glacier Bancorp | 83,709 | 3,851,451 | ||||||
†Home BancShares | 195,000 | 3,798,600 | ||||||
Independent Bank Group | 61,564 | 3,848,981 | ||||||
National Bankshares | 103,767 | 3,248,945 | ||||||
†Origin Bancorp | 68,667 | 1,906,883 | ||||||
Popular | 204,049 | 11,492,040 | ||||||
†Signature Bank | 28,500 | 3,855,765 | ||||||
TriState Capital Holdings 1 | 128,261 | 2,231,741 | ||||||
†Triumph Bancorp 1 | 78,100 | 3,791,755 | ||||||
Unity Bancorp | 88,673 | 1,556,211 | ||||||
87,659,241 | ||||||||
CAPITAL MARKETS - 6.3% | ||||||||
Ares Management Cl. A | 186,169 | 8,759,251 | ||||||
Artisan Partners Asset Management Cl. A | 125,202 | 6,302,669 | ||||||
†Associated Capital Group Cl. A | 32,940 | 1,156,853 | ||||||
B. Riley Financial | 69,658 | 3,080,277 | ||||||
Evercore Cl. A | 48,741 | 5,343,963 | ||||||
†GCM Grosvenor Cl. A 1,3 | 710,450 | 9,463,194 | ||||||
Houlihan Lokey Cl. A | 193,794 | 13,028,771 | ||||||
Lazard Cl. A | 269,200 | 11,387,160 | ||||||
Moelis & Company Cl. A | 86,424 | 4,041,186 | ||||||
Morningstar | 83,137 | 19,252,035 | ||||||
†Open Lending 1 | 223,100 | 7,799,576 | ||||||
SEI Investments | 173,119 | 9,949,149 | ||||||
Sprott | 169,894 | 4,933,052 | ||||||
TMX Group | 69,920 | 6,983,761 | ||||||
Virtu Financial Cl. A | 388,823 | 9,786,675 | ||||||
121,267,572 | ||||||||
CONSUMER FINANCE - 0.2% | ||||||||
PROG Holdings | 59,400 | 3,199,878 |
INSURANCE - 2.8% | ||||||||
Alleghany Corporation | 8,775 | 5,297,380 | ||||||
Assured Guaranty | 96,982 | 3,053,963 | ||||||
†Axis Capital Holdings | 25,000 | 1,259,750 | ||||||
†CNO Financial Group | 203,931 | 4,533,386 | ||||||
E-L Financial | 21,818 | 13,069,546 | ||||||
FBL Financial Group Cl. A | 43,812 | 2,300,568 | ||||||
†Kemper Corporation | 52,100 | 4,002,843 | ||||||
†Palomar Holdings 1,3 | 74,000 | 6,574,160 | ||||||
ProAssurance Corporation | 52,698 | 937,497 | ||||||
†ProSight Global 1 | 120,500 | 1,546,015 | ||||||
RLI Corp. | 68,753 | 7,160,625 | ||||||
Selective Insurance Group | 62,800 | 4,206,344 | ||||||
53,942,077 | ||||||||
INVESTMENT COMPANIES - 0.0% | ||||||||
†Fintech Acquisition Corp IV Cl. A 1 | 50,000 | 564,520 | ||||||
THRIFTS & MORTGAGE FINANCE - 1.0% | ||||||||
Axos Financial 1 | 122,961 | 4,614,726 | ||||||
Genworth MI Canada | 203,349 | 6,934,858 | ||||||
Southern Missouri Bancorp | 57,683 | 1,755,871 | ||||||
Timberland Bancorp | 95,593 | 2,319,086 | ||||||
TrustCo Bank Corp. NY | 276,430 | 1,843,788 | ||||||
WSFS Financial | 30,264 | 1,358,248 | ||||||
18,826,577 | ||||||||
Total (Cost $200,643,837) | 285,459,865 | |||||||
HEALTH CARE – 9.7% | ||||||||
BIOTECHNOLOGY - 1.2% | ||||||||
CareDx 1,3 | 157,220 | 11,390,589 | ||||||
†Coherus BioSciences 1,3 | 82,303 | 1,430,426 | ||||||
†Natera 1 | 72,800 | 7,245,056 | ||||||
Zealand Pharma 1,2 | 63,722 | 2,314,782 | ||||||
22,380,853 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 4.3% | ||||||||
AtriCure 1 | 33,343 | 1,856,205 | ||||||
Atrion Corporation | 8,442 | 5,421,790 | ||||||
BioLife Solutions 1 | 310,116 | 12,370,527 | ||||||
CryoLife 1 | 71,758 | 1,694,206 | ||||||
†CryoPort 1 | 105,217 | 4,616,922 | ||||||
Haemonetics 1 | 98,069 | 11,645,694 | ||||||
Hill-Rom Holdings | 35,976 | 3,524,569 | ||||||
Meridian Bioscience 1 | 268,300 | 5,014,527 | ||||||
Mesa Laboratories | 60,145 | 17,239,963 | ||||||
OrthoPediatrics Corporation 1,3 | 106,800 | 4,405,500 | ||||||
†SI-BONE 1 | 257,800 | 7,708,220 | ||||||
Tandem Diabetes Care 1 | 67,086 | 6,418,788 | ||||||
81,916,911 | ||||||||
HEALTH CARE PROVIDERS & SERVICES - 1.8% | ||||||||
Encompass Health | 139,160 | 11,507,140 | ||||||
Ensign Group (The) | 52,508 | 3,828,883 | ||||||
Molina Healthcare 1 | 26,600 | 5,657,288 | ||||||
National Research | 56,919 | 2,433,287 | ||||||
Pennant Group 1,3 | 24,527 | 1,424,038 | ||||||
U.S. Physical Therapy | 89,950 | 10,816,488 | ||||||
35,667,124 | ||||||||
HEALTH CARE TECHNOLOGY - 0.7% | ||||||||
†Phreesia 1 | 134,900 | 7,319,674 | ||||||
Simulations Plus | 95,410 | 6,861,887 | ||||||
14,181,561 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 41 |
Schedules of Investments
Royce Pennsylvania Mutual Fund (continued) |
SHARES | VALUE | |||||||
HEALTH CARE (continued) | ||||||||
LIFE SCIENCES TOOLS & SERVICES - 1.5% | ||||||||
Bio-Techne | 45,816 | $ | 14,548,871 | |||||
ICON 1 | 30,255 | 5,899,120 | ||||||
NeoGenomics 1 | 62,083 | 3,342,549 | ||||||
Quanterix Corporation 1,3 | 97,379 | 4,528,123 | ||||||
28,318,663 | ||||||||
PHARMACEUTICALS - 0.2% | ||||||||
Supernus Pharmaceuticals 1,3 | 125,367 | 3,154,234 | ||||||
Total (Cost $103,430,569) | 185,619,346 | |||||||
INDUSTRIALS – 25.4% | ||||||||
AEROSPACE & DEFENSE - 1.4% | ||||||||
HEICO Corporation | 99,264 | 13,142,553 | ||||||
HEICO Corporation Cl. A | 45,180 | 5,288,771 | ||||||
Magellan Aerospace | 152,171 | 1,048,425 | ||||||
Vectrus 1 | 154,739 | 7,693,623 | ||||||
27,173,372 | ||||||||
AIR FREIGHT & LOGISTICS - 0.7% | ||||||||
Forward Air | 100,469 | 7,720,038 | ||||||
Hub Group Cl. A 1 | 107,918 | 6,151,326 | ||||||
13,871,364 | ||||||||
BUILDING PRODUCTS - 0.9% | ||||||||
†Advanced Drainage Systems | 20,000 | 1,671,600 | ||||||
Gibraltar Industries 1 | 83,017 | 5,972,243 | ||||||
Simpson Manufacturing | 69,562 | 6,500,569 | ||||||
UFP Industries | 39,300 | 2,183,115 | ||||||
16,327,527 | ||||||||
COMMERCIAL SERVICES & SUPPLIES - 0.9% | ||||||||
Healthcare Services Group | 163,811 | 4,603,089 | ||||||
Heritage-Crystal Clean 1 | 154,283 | 3,250,743 | ||||||
PICO Holdings 1 | 208,021 | 1,944,996 | ||||||
UniFirst Corporation | 33,285 | 7,046,102 | ||||||
16,844,930 | ||||||||
CONSTRUCTION & ENGINEERING - 3.2% | ||||||||
Arcosa | 303,917 | 16,694,161 | ||||||
Comfort Systems USA | 71,648 | 3,772,984 | ||||||
Construction Partners Cl. A 1,3 | 121,391 | 3,533,692 | ||||||
Great Lakes Dredge & Dock 1 | 415,925 | 5,477,732 | ||||||
MasTec 1 | 58,400 | 3,981,712 | ||||||
MYR Group 1 | 66,706 | 4,009,031 | ||||||
†Primoris Services | 211,272 | 5,833,220 | ||||||
Valmont Industries | 76,725 | 13,421,504 | ||||||
†WillScot Mobile Mini Holdings 1,3 | 199,150 | 4,614,305 | ||||||
61,338,341 | ||||||||
ELECTRICAL EQUIPMENT - 0.9% | ||||||||
Bloom Energy Cl. A 1,3 | 50,000 | 1,433,000 | ||||||
Preformed Line Products | 201,075 | 13,761,573 | ||||||
Sensata Technologies Holding 1 | 28,700 | 1,513,638 | ||||||
16,708,211 | ||||||||
INDUSTRIAL CONGLOMERATES - 0.9% | ||||||||
Carlisle Companies | 44,813 | 6,998,894 | ||||||
Raven Industries | 296,749 | 9,819,425 | ||||||
16,818,319 | ||||||||
MACHINERY - 8.7% | ||||||||
Alamo Group | 9,001 | 1,241,688 | ||||||
Allison Transmission Holdings | 35,200 | 1,518,176 | ||||||
Colfax Corporation 1,3 | 456,134 | 17,442,564 | ||||||
ESCO Technologies | 81,609 | 8,423,681 | ||||||
Graco | 180,999 | 13,095,278 | ||||||
Graham Corporation | 72,292 | 1,097,393 |
Helios Technologies | 311,039 | 16,575,268 | ||||||
John Bean Technologies | 116,550 | 13,271,549 | ||||||
Kadant | 111,736 | 15,752,541 | ||||||
Lincoln Electric Holdings | 141,436 | 16,441,935 | ||||||
Lindsay Corporation | 106,590 | 13,692,551 | ||||||
Meritor 1 | 312,610 | 8,724,945 | ||||||
Middleby Corporation 1 | 60,500 | 7,799,660 | ||||||
Miller Industries | 205,051 | 7,796,039 | ||||||
Nordson Corporation | 37,227 | 7,480,766 | ||||||
RBC Bearings 1 | 54,522 | 9,761,619 | ||||||
Tennant Company | 94,890 | 6,658,431 | ||||||
166,774,084 | ||||||||
MARINE - 1.0% | ||||||||
Clarkson 2 | 297,500 | 10,989,931 | ||||||
SEACOR Holdings 1 | 174,595 | 7,236,963 | ||||||
18,226,894 | ||||||||
PROFESSIONAL SERVICES - 2.3% | ||||||||
Barrett Business Services | 43,549 | 2,970,477 | ||||||
Exponent | 74,566 | 6,713,177 | ||||||
Forrester Research 1 | 203,708 | 8,535,365 | ||||||
GP Strategies 1 | 103,013 | 1,221,734 | ||||||
Heidrick & Struggles International | 217,271 | 6,383,422 | ||||||
†Insperity | 20,700 | 1,685,394 | ||||||
Kforce | 58,600 | 2,466,474 | ||||||
ManpowerGroup | 30,147 | 2,718,657 | ||||||
Morneau Shepell | 53,600 | 1,306,629 | ||||||
Upwork 1,3 | 298,460 | 10,302,839 | ||||||
44,304,168 | ||||||||
ROAD & RAIL - 2.1% | ||||||||
ArcBest | 125,547 | 5,357,090 | ||||||
Landstar System | 118,854 | 16,004,880 | ||||||
Saia 1 | 44,809 | 8,101,467 | ||||||
†Schneider National Cl. B | 172,400 | 3,568,680 | ||||||
Universal Logistics Holdings | 365,775 | 7,531,307 | ||||||
40,563,424 | ||||||||
TRADING COMPANIES & DISTRIBUTORS - 2.4% | ||||||||
Air Lease Cl. A | 137,462 | 6,106,062 | ||||||
Applied Industrial Technologies | 121,091 | 9,443,887 | ||||||
BMC Stock Holdings 1 | 148,785 | 7,986,779 | ||||||
EVI Industries 1,3 | 409,609 | 12,255,501 | ||||||
Richelieu Hardware | 303,941 | 7,889,238 | ||||||
†Transcat 1 | 37,100 | 1,286,628 | ||||||
Watsco | 8,349 | 1,891,466 | ||||||
46,859,561 | ||||||||
Total (Cost $240,943,502) | 485,810,195 | |||||||
INFORMATION TECHNOLOGY – 24.7% | ||||||||
COMMUNICATIONS EQUIPMENT - 0.3% | ||||||||
Digi International 1 | 287,193 | 5,427,948 | ||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 9.1% | ||||||||
Badger Meter | 73,340 | 6,898,361 | ||||||
Cognex Corporation | 94,043 | 7,550,242 | ||||||
Coherent 1 | 88,191 | 13,230,414 | ||||||
Dolby Laboratories Cl. A | 84,640 | 8,221,083 | ||||||
ePlus 1 | 45,021 | 3,959,597 | ||||||
Fabrinet 1 | 140,582 | 10,907,757 | ||||||
FARO Technologies 1 | 177,388 | 12,528,915 | ||||||
FLIR Systems | 413,001 | 18,101,834 | ||||||
Insight Enterprises 1 | 178,893 | 13,611,968 |
42 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2020
Royce Pennsylvania Mutual Fund (continued) |
SHARES | VALUE | |||||||
INFORMATION TECHNOLOGY (continued) | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (continued) | ||||||||
IPG Photonics 1 | 31,631 | $ | 7,078,702 | |||||
Kimball Electronics 1 | 186,492 | 2,982,007 | ||||||
Littelfuse | 10,133 | 2,580,470 | ||||||
†Luna Innovations 1 | 847,799 | 8,376,254 | ||||||
Methode Electronics | 65,900 | 2,522,652 | ||||||
National Instruments | 261,316 | 11,482,225 | ||||||
PAR Technology 1 | 285,655 | 17,936,278 | ||||||
PC Connection 1 | 137,015 | 6,479,439 | ||||||
Plexus Corporation 1 | 16,500 | 1,290,465 | ||||||
Rogers Corporation 1 | 38,100 | 5,916,549 | ||||||
Sanmina Corporation 1 | 154,060 | 4,912,973 | ||||||
†SYNNEX Corporation 1 | 36,700 | 2,988,848 | ||||||
Vishay Intertechnology | 138,090 | 2,859,844 | ||||||
Vishay Precision Group 1 | 75,915 | 2,389,804 | ||||||
174,806,681 | ||||||||
IT SERVICES - 3.1% | ||||||||
Computer Services 2 | 42,975 | 2,544,979 | ||||||
†Concentrix 1 | 33,100 | 3,266,970 | ||||||
CSG Systems International | 32,600 | 1,469,282 | ||||||
Hackett Group (The) | 119,284 | 1,716,497 | ||||||
†International Money Express 1 | 488,563 | 7,582,498 | ||||||
KBR | 566,361 | 17,517,546 | ||||||
MAXIMUS | 53,150 | 3,890,048 | ||||||
†Repay Holdings Cl. A 1,3 | 261,000 | 7,112,250 | ||||||
†Shift4 Payments Cl. A 1 | 120,700 | 9,100,780 | ||||||
Sykes Enterprises 1 | 72,900 | 2,746,143 | ||||||
Unisys Corporation 1 | 125,000 | 2,460,000 | ||||||
59,406,993 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 7.3% | ||||||||
Advanced Energy Industries 1 | 35,601 | 3,452,229 | ||||||
Axcelis Technologies 1 | 223,916 | 6,520,434 | ||||||
Brooks Automation | 117,408 | 7,966,133 | ||||||
Cirrus Logic 1 | 197,140 | 16,204,908 | ||||||
CMC Materials | 105,678 | 15,989,081 | ||||||
Cohu | 122,418 | 4,673,919 | ||||||
Diodes 1 | 175,764 | 12,391,362 | ||||||
Entegris | 63,016 | 6,055,838 | ||||||
FormFactor 1 | 152,566 | 6,563,389 | ||||||
Kulicke & Soffa Industries | 363,251 | 11,555,014 | ||||||
Lattice Semiconductor 1 | 209,571 | 9,602,543 | ||||||
MKS Instruments | 140,280 | 21,105,126 | ||||||
Nova Measuring Instruments 1,3 | 76,854 | 5,425,893 | ||||||
Onto Innovation 1,3 | 180,520 | 8,583,726 | ||||||
Photronics 1 | 142,794 | 1,593,581 | ||||||
Ultra Clean Holdings 1 | 78,971 | 2,459,947 | ||||||
140,143,123 | ||||||||
SOFTWARE - 4.9% | ||||||||
ACI Worldwide 1 | 213,837 | 8,217,756 | ||||||
Agilysys 1 | 108,087 | 4,148,379 | ||||||
†Avalara 1 | 40,900 | 6,744,001 | ||||||
Blackbaud | 13,600 | 782,816 | ||||||
†ChannelAdvisor Corporation 1 | 49,800 | 795,804 | ||||||
Cloudflare Cl. A 1 | 117,311 | 8,914,463 | ||||||
Descartes Systems Group (The) 1 | 161,047 | 9,418,029 | ||||||
Fair Isaac 1 | 14,329 | 7,322,692 | ||||||
Five9 1 | 40,218 | 7,014,019 | ||||||
j2 Global 1 | 76,347 | 7,458,338 | ||||||
Manhattan Associates 1 | 47,432 | 4,988,898 | ||||||
QAD Cl. A | 42,941 | 2,713,012 |
SVMK 1,3 | 400,145 | 10,223,705 | ||||||
Upland Software 1 | 328,415 | 15,070,964 | ||||||
93,812,876 | ||||||||
Total (Cost $235,620,721) | 473,597,621 | |||||||
MATERIALS – 8.3% | ||||||||
CHEMICALS - 4.8% | ||||||||
Balchem Corporation | 122,572 | 14,122,746 | ||||||
Element Solutions | 969,074 | 17,181,682 | ||||||
Huntsman Corporation | 160,805 | 4,042,638 | ||||||
Innospec | 133,242 | 12,089,046 | ||||||
Minerals Technologies | 215,484 | 13,385,866 | ||||||
†Mosaic Company (The) | 369,000 | 8,490,690 | ||||||
Quaker Chemical | 90,202 | 22,856,285 | ||||||
92,168,953 | ||||||||
CONSTRUCTION MATERIALS - 0.1% | ||||||||
Imerys 2 | 36,000 | 1,701,405 | ||||||
CONTAINERS & PACKAGING - 0.6% | ||||||||
AptarGroup | 88,495 | 12,114,081 | ||||||
METALS & MINING - 1.8% | ||||||||
Alamos Gold Cl. A | 1,987,600 | 17,363,589 | ||||||
IAMGOLD Corporation 1 | 795,894 | 2,920,931 | ||||||
Reliance Steel & Aluminum | 113,468 | 13,587,793 | ||||||
33,872,313 | ||||||||
PAPER & FOREST PRODUCTS - 1.0% | ||||||||
Stella-Jones | 516,411 | 18,775,631 | ||||||
Total (Cost $69,140,411) | 158,632,383 | |||||||
REAL ESTATE – 2.4% | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.2% | ||||||||
†OUTFRONT Media | 175,000 | 3,423,000 | ||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 2.2% | ||||||||
Colliers International Group | 34,300 | 3,057,159 | ||||||
FRP Holdings 1 | 188,149 | 8,570,187 | ||||||
Kennedy-Wilson Holdings | 607,521 | 10,868,551 | ||||||
Marcus & Millichap 1 | 260,332 | 9,692,160 | ||||||
St. Joe Company (The) | 188,554 | 8,004,117 | ||||||
Tejon Ranch 1 | 235,407 | 3,401,631 | ||||||
43,593,805 | ||||||||
Total (Cost $33,422,281) | 47,016,805 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $1,041,673,106) | 1,888,403,728 | |||||||
REPURCHASE AGREEMENT– 1.4% | ||||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/20, due 1/4/21, maturity value $27,699,276 (collateralized by obligations of various U.S. Government Agencies, 0.125% due 12/31/22, valued at $28,253,300) | ||||||||
(Cost $27,699,276) | 27,699,276 | |||||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 1.1% | ||||||||
Money Market Funds | ||||||||
Federated Government Obligations Fund – Institutional Shares (7 day yield-0.01%) | ||||||||
(Cost $21,820,570) | 21,820,570 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 43 |
Schedules of Investments
Royce Pennsylvania Mutual Fund (continued) |
VALUE | ||||
TOTAL INVESTMENTS – 101.1% | ||||
(Cost $1,091,192,952) | $ | 1,937,923,574 | ||
LIABILITIES LESS CASH AND OTHER ASSETS – (1.1)% | (22,002,151 | ) | ||
NET ASSETS – 100.0% | $ | 1,915,921,423 |
Royce Premier Fund |
Common Stocks – 97.6% |
SHARES | VALUE | |||||||
CONSUMER DISCRETIONARY – 6.1% | ||||||||
AUTO COMPONENTS - 2.6% | ||||||||
Dorman Products 1 | 215,725 | $ | 18,729,244 | |||||
LCI Industries | 201,716 | 26,158,531 | ||||||
44,887,775 | ||||||||
DISTRIBUTORS - 1.6% | ||||||||
Pool Corporation | 74,715 | 27,831,338 | ||||||
LEISURE PRODUCTS - 0.3% | ||||||||
†Brunswick Corporation | 71,700 | 5,466,408 | ||||||
TEXTILES, APPAREL & LUXURY GOODS - 1.6% | ||||||||
Ralph Lauren Cl. A | 265,103 | 27,501,785 | ||||||
Total (Cost $53,847,112) | 105,687,306 | |||||||
CONSUMER STAPLES – 1.4% | ||||||||
PERSONAL PRODUCTS - 1.4% | ||||||||
†Inter Parfums | 390,641 | 23,629,874 | ||||||
Total (Cost $17,960,499) | 23,629,874 | |||||||
FINANCIALS – 13.2% | ||||||||
CAPITAL MARKETS - 11.1% | ||||||||
Ares Management Cl. A | 747,770 | 35,182,578 | ||||||
Ashmore Group 2 | 6,228,701 | 36,763,698 | ||||||
†GCM Grosvenor Cl. A 1,3 | 1,675,215 | 22,313,864 | ||||||
Lazard Cl. A | 518,583 | 21,936,061 | ||||||
Morningstar | 230,810 | 53,448,672 | ||||||
TMX Group | 227,583 | 22,731,481 | ||||||
192,376,354 | ||||||||
INSURANCE - 1.7% | ||||||||
Alleghany Corporation | 50,004 | 30,186,915 | ||||||
THRIFTS & MORTGAGE FINANCE - 0.4% | ||||||||
Genworth MI Canada | 193,079 | 6,584,617 | ||||||
Total (Cost $95,608,691) | 229,147,886 | |||||||
HEALTH CARE – 6.5% | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 4.4% | ||||||||
Haemonetics 1 | 338,962 | 40,251,737 | ||||||
Mesa Laboratories | 124,595 | 35,713,911 | ||||||
75,965,648 | ||||||||
LIFE SCIENCES TOOLS & SERVICES - 2.1% | ||||||||
Bio-Techne | 113,921 | 36,175,614 | ||||||
Total (Cost $71,722,926) | 112,141,262 | |||||||
INDUSTRIALS – 34.7% | ||||||||
AIR FREIGHT & LOGISTICS - 1.7% | ||||||||
Forward Air | 394,958 | 30,348,573 | ||||||
BUILDING PRODUCTS - 1.5% | ||||||||
Simpson Manufacturing | 273,295 | 25,539,418 | ||||||
COMMERCIAL SERVICES & SUPPLIES - 1.8% | ||||||||
Ritchie Bros. Auctioneers | 455,546 | 31,683,224 | ||||||
CONSTRUCTION & ENGINEERING - 3.6% | ||||||||
†Arcosa | 489,123 | 26,867,526 | ||||||
Valmont Industries | 207,379 | 36,276,809 | ||||||
63,144,335 | ||||||||
INDUSTRIAL CONGLOMERATES - 0.7% | ||||||||
Raven Industries | 356,449 | 11,794,898 | ||||||
MACHINERY - 18.5% | ||||||||
Colfax Corporation 1,3 | 1,201,470 | 45,944,213 | ||||||
†ESCO Technologies | 237,273 | 24,491,319 | ||||||
Helios Technologies | 429,647 | 22,895,889 | ||||||
John Bean Technologies | 406,428 | 46,279,956 | ||||||
Kadant | 225,188 | 31,747,004 |
44 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2020
Royce Premier Fund (continued) |
SHARES | VALUE | |||||||
INDUSTRIALS (continued) | ||||||||
MACHINERY (continued) | ||||||||
Lincoln Electric Holdings | 422,082 | $ | 49,067,032 | |||||
Lindsay Corporation | 312,311 | 40,119,471 | ||||||
RBC Bearings 1 | 126,370 | 22,625,285 | ||||||
Woodward | 311,726 | 37,884,061 | ||||||
321,054,230 | ||||||||
MARINE - 1.8% | ||||||||
Kirby Corporation 1 | 587,376 | 30,443,698 | ||||||
PROFESSIONAL SERVICES - 1.6% | ||||||||
Forrester Research 1 | 661,850 | 27,731,515 | ||||||
ROAD & RAIL - 1.7% | ||||||||
Landstar System | 213,185 | 28,707,492 | ||||||
TRADING COMPANIES & DISTRIBUTORS - 1.8% | ||||||||
Air Lease Cl. A | 717,105 | 31,853,804 | ||||||
Total (Cost $305,037,565) | 602,301,187 | |||||||
INFORMATION TECHNOLOGY – 24.4% | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 11.6% | ||||||||
Cognex Corporation | 511,378 | 41,055,983 | ||||||
Coherent 1 | 228,337 | 34,255,117 | ||||||
FARO Technologies 1 | 446,148 | 31,511,433 | ||||||
IPG Photonics 1 | 109,409 | 24,484,640 | ||||||
National Instruments | 873,865 | 38,397,628 | ||||||
†Rogers Corporation 1 | 205,866 | 31,968,931 | ||||||
201,673,732 | ||||||||
IT SERVICES - 2.0% | ||||||||
†Computer Services 2 | 307,400 | 18,204,228 | ||||||
Jack Henry & Associates | 99,987 | 16,196,894 | ||||||
34,401,122 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.5% | ||||||||
Cirrus Logic 1 | 297,024 | 24,415,373 | ||||||
CMC Materials | 248,800 | 37,643,440 | ||||||
MKS Instruments | 340,788 | 51,271,555 | ||||||
113,330,368 | ||||||||
SOFTWARE - 4.3% | ||||||||
Fair Isaac 1 | 50,464 | 25,789,122 | ||||||
Manhattan Associates 1 | 453,571 | 47,706,598 | ||||||
73,495,720 | ||||||||
Total (Cost $174,898,742) | 422,900,942 | |||||||
MATERIALS – 9.4% | ||||||||
CHEMICALS - 4.9% | ||||||||
Innospec | 403,701 | 36,627,792 | ||||||
Quaker Chemical | 193,969 | 49,149,805 | ||||||
85,777,597 | ||||||||
METALS & MINING - 2.0% | ||||||||
Reliance Steel & Aluminum | 291,755 | 34,937,661 | ||||||
PAPER & FOREST PRODUCTS - 2.5% | ||||||||
Stella-Jones | 1,184,391 | 43,061,996 | ||||||
Total (Cost $99,272,141) | 163,777,254 | |||||||
REAL ESTATE – 1.9% | ||||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.9% | ||||||||
Kennedy-Wilson Holdings | 1,877,469 | 33,587,920 | ||||||
Total (Cost $31,800,529) | 33,587,920 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $850,148,205) | 1,693,173,631 |
REPURCHASE AGREEMENT– 2.6% | ||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/20, due 1/4/21, maturity value $45,555,851 (collateralized by obligations of various U.S. Government Agencies, 2.125% due 12/31/22, valued at $46,466,993) | ||||
(Cost $45,555,851) | 45,555,851 | |||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 1.2% | ||||
Money Market Funds | ||||
Federated Government Obligations Fund – Institutional Shares (7 day yield-0.01%) | ||||
(Cost $21,146,208) | 21,146,208 | |||
TOTAL INVESTMENTS – 101.4% | ||||
(Cost $916,850,264) | 1,759,875,690 | |||
LIABILITIES LESS CASH AND OTHER ASSETS – (1.4)% | (23,879,071 | ) | ||
NET ASSETS – 100.0% | $ | 1,735,996,619 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 45 |
Schedules of Investments
Royce Small-Cap Value Fund |
Common Stocks – 98.0% |
SHARES | VALUE | |||||||
COMMUNICATION SERVICES – 1.7% | ||||||||
ENTERTAINMENT - 1.0% | ||||||||
†SciPlay Corporation Cl. A 1 | 87,667 | $ | 1,214,188 | |||||
MEDIA - 0.7% | ||||||||
Saga Communications Cl. A | 33,786 | 811,539 | ||||||
Total (Cost $2,523,464) | 2,025,727 | |||||||
CONSUMER DISCRETIONARY – 15.5% | ||||||||
AUTO COMPONENTS - 0.8% | ||||||||
Gentex Corporation | 27,240 | 924,253 | ||||||
HOUSEHOLD DURABLES - 3.4% | ||||||||
La-Z-Boy | 37,802 | 1,506,032 | ||||||
†PulteGroup | 59,800 | 2,578,576 | ||||||
4,084,608 | ||||||||
LEISURE PRODUCTS - 2.6% | ||||||||
†Malibu Boats Cl. A 1 | 22,138 | 1,382,297 | ||||||
†MasterCraft Boat Holdings 1 | 70,067 | 1,740,464 | ||||||
3,122,761 | ||||||||
SPECIALTY RETAIL - 8.7% | ||||||||
†Aaron's Company (The) | 87,375 | 1,656,630 | ||||||
American Eagle Outfitters | 82,845 | 1,662,699 | ||||||
†OneWater Marine Cl. A 1 | 60,020 | 1,745,982 | ||||||
Rent-A-Center | 76,266 | 2,920,225 | ||||||
Shoe Carnival | 66,918 | 2,621,847 | ||||||
10,607,383 | ||||||||
Total (Cost $13,819,033) | 18,739,005 | |||||||
CONSUMER STAPLES – 0.3% | ||||||||
FOOD & STAPLES RETAILING - 0.3% | ||||||||
Village Super Market Cl. A | 16,600 | 366,196 | ||||||
Total (Cost $367,691) | 366,196 | |||||||
ENERGY – 0.4% | ||||||||
OIL, GAS & CONSUMABLE FUELS - 0.4% | ||||||||
Dorchester Minerals L.P. | 46,334 | 505,504 | ||||||
Total (Cost $628,857) | 505,504 | |||||||
FINANCIALS – 22.2% | ||||||||
BANKS - 6.3% | ||||||||
Ames National | 30,293 | 727,638 | ||||||
Camden National | 18,776 | 671,805 | ||||||
City Holding Company | 17,771 | 1,235,973 | ||||||
CNB Financial | 27,715 | 590,053 | ||||||
Financial Institutions | 35,762 | 804,645 | ||||||
Landmark Bancorp | 14,051 | 321,065 | ||||||
MidWestOne Financial Group | 41,067 | 1,006,142 | ||||||
National Bankshares | 46,432 | 1,453,786 | ||||||
Unity Bancorp | 46,997 | 824,797 | ||||||
7,635,904 | ||||||||
CAPITAL MARKETS - 4.3% | ||||||||
Evercore Cl. A | 22,944 | 2,515,580 | ||||||
Houlihan Lokey Cl. A | 14,195 | 954,330 | ||||||
Moelis & Company Cl. A | 36,219 | 1,693,601 | ||||||
5,163,511 | ||||||||
CONSUMER FINANCE - 1.3% | ||||||||
†PROG Holdings | 28,600 | 1,540,682 | ||||||
INSURANCE - 7.5% | ||||||||
†CNO Financial Group | 100,429 | 2,232,537 | ||||||
†Heritage Insurance Holdings | 64,872 | 657,153 | ||||||
James River Group Holdings | 30,205 | 1,484,576 | ||||||
†Kemper Corporation | 23,600 | 1,813,188 |
Reinsurance Group of America | 8,936 | 1,035,682 | ||||||
†Selective Insurance Group | 28,500 | 1,908,930 | ||||||
9,132,066 | ||||||||
THRIFTS & MORTGAGE FINANCE - 2.8% | ||||||||
Southern Missouri Bancorp | 28,349 | 862,944 | ||||||
Timberland Bancorp | 41,471 | 1,006,086 | ||||||
TrustCo Bank Corp. NY | 134,647 | 898,095 | ||||||
WSFS Financial | 13,226 | 593,583 | ||||||
3,360,708 | ||||||||
Total (Cost $21,993,919) | 26,832,871 | |||||||
HEALTH CARE – 7.0% | ||||||||
BIOTECHNOLOGY - 1.9% | ||||||||
Catalyst Pharmaceuticals 1,3 | 408,282 | 1,363,662 | ||||||
†Coherus BioSciences 1,3 | 36,887 | 641,096 | ||||||
†Vanda Pharmaceuticals 1 | 24,638 | 323,743 | ||||||
2,328,501 | ||||||||
HEALTH CARE PROVIDERS & SERVICES - 3.9% | ||||||||
Ensign Group (The) | 22,465 | 1,638,148 | ||||||
Molina Healthcare 1 | 12,100 | 2,573,428 | ||||||
Pennant Group 1 | 8,413 | 488,459 | ||||||
4,700,035 | ||||||||
PHARMACEUTICALS - 1.2% | ||||||||
Supernus Pharmaceuticals 1 | 59,700 | 1,502,052 | ||||||
Total (Cost $6,831,382) | 8,530,588 | |||||||
INDUSTRIALS – 30.0% | ||||||||
AEROSPACE & DEFENSE - 2.1% | ||||||||
Vectrus 1 | 50,578 | 2,514,738 | ||||||
BUILDING PRODUCTS - 1.0% | ||||||||
†UFP Industries | 21,200 | 1,177,660 | ||||||
COMMERCIAL SERVICES & SUPPLIES - 1.2% | ||||||||
Herman Miller | 18,699 | 632,026 | ||||||
†IBEX Holdings 1 | 45,568 | 852,122 | ||||||
1,484,148 | ||||||||
CONSTRUCTION & ENGINEERING - 9.3% | ||||||||
Comfort Systems USA | 11,238 | 591,793 | ||||||
†Great Lakes Dredge & Dock 1 | 204,504 | 2,693,318 | ||||||
†MasTec 1 | 23,612 | 1,609,866 | ||||||
MYR Group 1 | 27,793 | 1,670,359 | ||||||
†Northwest Pipe 1 | 67,798 | 1,918,683 | ||||||
†Primoris Services | 102,134 | 2,819,920 | ||||||
11,303,939 | ||||||||
MACHINERY - 3.4% | ||||||||
Alamo Group | 4,163 | 574,286 | ||||||
Federal Signal | 16,410 | 544,320 | ||||||
Miller Industries | 79,606 | 3,026,620 | ||||||
4,145,226 | ||||||||
PROFESSIONAL SERVICES - 5.8% | ||||||||
†Barrett Business Services | 19,849 | 1,353,900 | ||||||
Heidrick & Struggles International | 55,856 | 1,641,049 | ||||||
Kforce | 27,629 | 1,162,905 | ||||||
Korn Ferry | 27,244 | 1,185,114 | ||||||
Resources Connection | 91,388 | 1,148,747 | ||||||
Robert Half International | 8,816 | 550,824 | ||||||
7,042,539 | ||||||||
ROAD & RAIL - 5.8% | ||||||||
ArcBest | 61,038 | 2,604,492 | ||||||
Old Dominion Freight Line | 2,646 | 516,446 |
46 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2020
Royce Small-Cap Value Fund (continued) |
SHARES | VALUE | |||||||
INDUSTRIALS (continued) | ||||||||
ROAD & RAIL (continued) | ||||||||
Saia 1 | 3,253 | $ | 588,142 | |||||
†Schneider National Cl. B | 74,447 | 1,541,053 | ||||||
Werner Enterprises | 46,084 | 1,807,415 | ||||||
7,057,548 | ||||||||
TRADING COMPANIES & DISTRIBUTORS - 1.4% | ||||||||
BMC Stock Holdings 1 | 30,355 | 1,629,456 | ||||||
Total (Cost $25,334,194) | 36,355,254 | |||||||
INFORMATION TECHNOLOGY – 20.2% | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 13.4% | ||||||||
†ePlus 1 | 20,510 | 1,803,855 | ||||||
Fabrinet 1 | 7,854 | 609,392 | ||||||
Insight Enterprises 1 | 40,223 | 3,060,568 | ||||||
†Kimball Electronics 1 | 94,161 | 1,505,634 | ||||||
Methode Electronics | 31,800 | 1,217,304 | ||||||
PC Connection 1 | 32,612 | 1,542,221 | ||||||
†Plexus Corporation 1 | 7,453 | 582,899 | ||||||
Sanmina Corporation 1 | 76,641 | 2,444,082 | ||||||
†SYNNEX Corporation 1 | 19,666 | 1,601,599 | ||||||
Vishay Intertechnology | 87,304 | 1,808,066 | ||||||
16,175,620 | ||||||||
IT SERVICES - 3.5% | ||||||||
†Concentrix 1 | 15,300 | 1,510,110 | ||||||
†CSG Systems International | 14,800 | 667,036 | ||||||
†Hackett Group (The) | 58,472 | 841,412 | ||||||
†Sykes Enterprises 1 | 32,400 | 1,220,508 | ||||||
4,239,066 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 3.3% | ||||||||
Advanced Energy Industries 1 | 9,465 | 917,821 | ||||||
Kulicke & Soffa Industries | 70,258 | 2,234,907 | ||||||
MKS Instruments | 6,080 | 914,736 | ||||||
4,067,464 | ||||||||
Total (Cost $16,222,718) | 24,482,150 | |||||||
REAL ESTATE – 0.7% | ||||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.7% | ||||||||
Marcus & Millichap 1 | 22,414 | 834,473 | ||||||
Total (Cost $610,753) | 834,473 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $88,332,011) | 118,671,768 | |||||||
REPURCHASE AGREEMENT– 1.6% | ||||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/20, due 1/4/21, maturity value $1,955,624 (collateralized by obligations of various U.S. Government Agencies, 2.125% due 12/31/22, valued at $1,994,811) | ||||||||
(Cost $1,955,624) | 1,955,624 | |||||||
TOTAL INVESTMENTS – 99.6% | ||||||||
(Cost $90,287,635) | 120,627,392 | |||||||
CASH AND OTHER ASSETS LESS LIABILITIES – 0.4% | 438,125 | |||||||
NET ASSETS – 100.0% | $ | 121,065,517 |
Royce Smaller-Companies Growth Fund |
Common Stocks – 95.6% |
SHARES | VALUE | |||||||
COMMUNICATION SERVICES – 5.3% | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.5% | ||||||||
Bandwidth Cl. A 1 | 9,000 | $ | 1,383,030 | |||||
ENTERTAINMENT - 3.2% | ||||||||
†CuriosityStream Cl. A 1,3 | 117,700 | 1,641,915 | ||||||
†Score Media and Gaming Cl. A 1 | 3,207,000 | 3,779,166 | ||||||
Sea Cl. A ADR 1 | 23,000 | 4,578,150 | ||||||
9,999,231 | ||||||||
INTERACTIVE MEDIA & SERVICES - 1.6% | ||||||||
†Enthusiast Gaming Holdings 1 | 1,389,800 | 4,946,024 | ||||||
Total (Cost $5,022,714) | 16,328,285 | |||||||
CONSUMER DISCRETIONARY – 8.9% | ||||||||
DIVERSIFIED CONSUMER SERVICES - 1.2% | ||||||||
†Aspen Group 1 | 331,000 | 3,684,030 | ||||||
HOTELS, RESTAURANTS & LEISURE - 5.2% | ||||||||
†DraftKings Cl. A 1,3 | 27,000 | 1,257,120 | ||||||
†GAN 1,3 | 121,900 | 2,472,132 | ||||||
†NEOGAMES 1,3 | 226,000 | 8,585,740 | ||||||
Papa John's International | 22,000 | 1,866,700 | ||||||
Texas Roadhouse | 23,000 | 1,797,680 | ||||||
15,979,372 | ||||||||
HOUSEHOLD DURABLES - 1.3% | ||||||||
Lovesac Company (The) 1,3 | 69,666 | 3,001,908 | ||||||
†Purple Innovation 1,3 | 27,000 | 889,380 | ||||||
3,891,288 | ||||||||
INTERNET & DIRECT MARKETING RETAIL - 0.1% | ||||||||
†CarParts.com 1,3 | 20,000 | 247,800 | ||||||
LEISURE PRODUCTS - 0.4% | ||||||||
Callaway Golf | 58,000 | 1,392,580 | ||||||
SPECIALTY RETAIL - 0.7% | ||||||||
†Lithia Motors Cl. A | 8,000 | 2,341,360 | ||||||
Total (Cost $15,900,137) | 27,536,430 | |||||||
CONSUMER STAPLES – 1.5% | ||||||||
BEVERAGES - 0.9% | ||||||||
†Celsius Holdings 1 | 57,000 | 2,867,670 | ||||||
FOOD PRODUCTS - 0.6% | ||||||||
Freshpet 1,3 | 13,000 | 1,845,870 | ||||||
Total (Cost $664,997) | 4,713,540 | |||||||
DIVERSIFIED INVESTMENT COMPANIES – 0.9% | ||||||||
CLOSED-END FUNDS - 0.9% | ||||||||
†Rush Street Interactive Cl. A 1,3 | 130,000 | 2,814,500 | ||||||
Total (Cost $1,628,987) | 2,814,500 | |||||||
FINANCIALS – 3.9% | ||||||||
BANKS - 2.1% | ||||||||
Enterprise Financial Services | 48,500 | 1,695,075 | ||||||
Seacoast Banking Corporation of Florida 1 | 82,000 | 2,414,900 | ||||||
Southern National Bancorp of Virginia | 4,000 | 48,440 | ||||||
TriState Capital Holdings 1 | 124,057 | 2,158,592 | ||||||
6,317,007 | ||||||||
CAPITAL MARKETS - 1.2% | ||||||||
MarketAxess Holdings | 3,000 | 1,711,680 | ||||||
PJT Partners Cl. A | 28,000 | 2,107,000 | ||||||
3,818,680 | ||||||||
INVESTMENT COMPANIES - 0.2% | ||||||||
†Golden Nugget Online Gaming Cl. A 1 | 30,000 | 591,000 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 47 |
Schedules of Investments
Royce Smaller-Companies Growth Fund (continued) |
SHARES | VALUE | |||||||
FINANCIALS (continued) | ||||||||
THRIFTS & MORTGAGE FINANCE - 0.4% | ||||||||
†Meridian Bancorp | 81,000 | $ | 1,207,710 | |||||
Total (Cost $7,968,847) | 11,934,397 | |||||||
HEALTH CARE – 29.2% | ||||||||
BIOTECHNOLOGY - 6.9% | ||||||||
Avid Bioservices 1,3 | 257,000 | 2,965,780 | ||||||
CareDx 1 | 50,000 | 3,622,500 | ||||||
†Centogene 1,3 | 200,000 | 2,156,000 | ||||||
†MeiraGTx Holdings 1 | 128,000 | 1,937,920 | ||||||
Natera 1 | 37,000 | 3,682,240 | ||||||
Oxford Biomedica 1,2 | 224,000 | 3,150,589 | ||||||
uniQure 1 | 54,000 | 1,951,020 | ||||||
†Vivos Therapeutics 1 | 300,000 | 1,773,000 | ||||||
21,239,049 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 10.0% | ||||||||
Alphatec Holdings 1 | 304,000 | 4,414,080 | ||||||
†Axonics Modulation Technologies 1,3 | 47,000 | 2,346,240 | ||||||
†BioLife Solutions 1 | 77,000 | 3,071,530 | ||||||
CryoPort 1 | 23,198 | 1,017,928 | ||||||
†CytoSorbents 1 | 137,000 | 1,091,890 | ||||||
†InMode 1 | 87,000 | 4,130,760 | ||||||
Itamar Medical ADR 1,3 | 103,000 | 2,045,580 | ||||||
†Neuronetics 1,3 | 171,000 | 1,899,810 | ||||||
†Profound Medical 1 | 92,000 | 1,892,755 | ||||||
†SI-BONE 1 | 82,000 | 2,451,800 | ||||||
STAAR Surgical 1,3 | 54,000 | 4,277,880 | ||||||
West Pharmaceutical Services | 6,000 | 1,699,860 | ||||||
†Zynex 1 | 27,000 | 363,420 | ||||||
30,703,533 | ||||||||
HEALTH CARE PROVIDERS & SERVICES - 7.2% | ||||||||
Addus HomeCare 1,3 | 25,000 | 2,927,250 | ||||||
†Castle Biosciences 1,3 | 35,000 | 2,350,250 | ||||||
Joint Corp. (The) 1 | 126,000 | 3,308,760 | ||||||
†Ontrak 1,3 | 13,000 | 803,270 | ||||||
Pennant Group 1 | 61,000 | 3,541,660 | ||||||
PetIQ Cl. A 1,3 | 36,000 | 1,384,200 | ||||||
†Progyny 1,3 | 41,000 | 1,737,990 | ||||||
Providence Service 1 | 23,000 | 3,188,490 | ||||||
†Sharps Compliance 1,3 | 257,000 | 2,428,650 | ||||||
Viemed Healthcare 1 | 63,600 | 497,148 | ||||||
22,167,668 | ||||||||
HEALTH CARE TECHNOLOGY - 2.2% | ||||||||
†MedAvail Holdings 1,3 | 52,649 | 792,368 | ||||||
†MTBC 1,3 | 240,000 | 2,176,800 | ||||||
†Phreesia 1 | 25,720 | 1,395,567 | ||||||
†Schrodinger 1 | 29,000 | 2,296,220 | ||||||
6,660,955 | ||||||||
LIFE SCIENCES TOOLS & SERVICES - 2.9% | ||||||||
Harvard Bioscience 1 | 213,600 | 916,344 | ||||||
Medpace Holdings 1,3 | 15,000 | 2,088,000 | ||||||
PureTech Health 1,2 | 696,000 | 3,829,691 | ||||||
Quanterix Corporation 1 | 47,600 | 2,213,400 | ||||||
9,047,435 | ||||||||
Total (Cost $51,881,866) | 89,818,640 | |||||||
INDUSTRIALS – 11.5% | ||||||||
AEROSPACE & DEFENSE - 1.8% | ||||||||
AeroVironment 1 | 31,000 | 2,693,900 | ||||||
Kratos Defense & Security Solutions 1 | 101,000 | 2,770,430 | ||||||
5,464,330 | ||||||||
ELECTRICAL EQUIPMENT - 3.9% | ||||||||
American Superconductor 1 | 205,349 | 4,809,274 | ||||||
†Beam Global 1,3 | 49,000 | 3,615,220 | ||||||
EnerSys | 25,000 | 2,076,500 | ||||||
†Eos Energy Enterprises 1,3 | 74,000 | 1,542,160 | ||||||
12,043,154 | ||||||||
MACHINERY - 1.5% | ||||||||
†ATS Automation Tooling Systems 1 | 124,000 | 2,177,233 | ||||||
Chart Industries 1 | 20,000 | 2,355,800 | ||||||
4,533,033 | ||||||||
PROFESSIONAL SERVICES - 1.7% | ||||||||
ASGN 1 | 26,000 | 2,171,780 | ||||||
†Atlas Technical Consultants Cl. A 1 | 256,000 | 1,799,680 | ||||||
GP Strategies 1 | 117,282 | 1,390,964 | ||||||
5,362,424 | ||||||||
TRADING COMPANIES & DISTRIBUTORS - 2.6% | ||||||||
Lawson Products 1 | 157,000 | 7,992,870 | ||||||
Total (Cost $22,060,170) | 35,395,811 | |||||||
INFORMATION TECHNOLOGY – 32.9% | ||||||||
COMMUNICATIONS EQUIPMENT - 1.9% | ||||||||
Lumentum Holdings 1,3 | 42,000 | 3,981,600 | ||||||
Viavi Solutions 1 | 126,000 | 1,886,850 | ||||||
5,868,450 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 3.8% | ||||||||
Iteris 1 | 1,359,000 | 7,678,350 | ||||||
nLIGHT 1 | 66,000 | 2,154,900 | ||||||
Rogers Corporation 1 | 12,000 | 1,863,480 | ||||||
11,696,730 | ||||||||
IT SERVICES - 6.7% | ||||||||
Unisys Corporation 1 | 827,000 | 16,275,360 | ||||||
USA Technologies 1 | 428,996 | 4,495,878 | ||||||
20,771,238 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 11.3% | ||||||||
Advanced Energy Industries 1 | 46,000 | 4,460,620 | ||||||
Ambarella 1 | 50,000 | 4,591,000 | ||||||
AXT 1 | 216,400 | 2,070,948 | ||||||
†Canadian Solar 1,3 | 68,000 | 3,484,320 | ||||||
CEVA 1 | 53,000 | 2,411,500 | ||||||
CyberOptics Corporation 1 | 75,000 | 1,701,750 | ||||||
†Impinj 1,3 | 46,000 | 1,926,020 | ||||||
Lattice Semiconductor 1 | 51,000 | 2,336,820 | ||||||
MagnaChip Semiconductor 1 | 403,461 | 5,454,793 | ||||||
Onto Innovation 1 | 57,000 | 2,710,350 | ||||||
Silicon Laboratories 1 | 29,000 | 3,692,860 | ||||||
34,840,981 | ||||||||
SOFTWARE - 9.2% | ||||||||
†Agilysys 1 | 99,000 | 3,799,620 | ||||||
Blue Prism Group 1,2 | 109,000 | 2,565,057 | ||||||
Cerence 1,3 | 20,000 | 2,009,600 | ||||||
†Cloudera 1,3 | 174,000 | 2,420,340 | ||||||
Coupa Software 1 | 5,000 | 1,694,550 | ||||||
Descartes Systems Group (The) 1 | 50,033 | 2,925,930 | ||||||
†fuboTV 1,3 | 53,000 | 1,484,000 | ||||||
LivePerson 1,3 | 43,000 | 2,675,890 | ||||||
Materialise ADR 1,3 | 10,577 | 573,379 | ||||||
Paylocity Holding Corporation 1 | 9,786 | 2,015,035 |
48 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2020
Royce Smaller-Companies Growth Fund (continued) |
SHARES | VALUE | |||||||
INFORMATION TECHNOLOGY (continued) | ||||||||
SOFTWARE (continued) | ||||||||
RingCentral Cl. A 1 | 4,000 | $ | 1,515,880 | |||||
†SharpSpring 1 | 137,000 | 2,230,360 | ||||||
†Telos 1 | 37,500 | 1,236,750 | ||||||
†Veritone 1 | 40,000 | 1,138,000 | ||||||
28,284,391 | ||||||||
Total (Cost $61,508,520) | 101,461,790 | |||||||
MATERIALS – 0.1% | ||||||||
CHEMICALS - 0.1% | ||||||||
†NanoXplore 1 | 70,000 | 230,419 | ||||||
Total (Cost $193,084) | 230,419 | |||||||
REAL ESTATE – 1.4% | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 1.4% | ||||||||
Community Healthcare Trust | 28,000 | 1,319,080 | ||||||
Postal Realty Trust Cl. A | 170,000 | 2,869,600 | ||||||
Total (Cost $3,290,951) | 4,188,680 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $170,120,273) | 294,422,492 | |||||||
WARRANTS – 0.0% | ||||||||
FINANCIALS – 0.0% | ||||||||
INVESTMENT COMPANIES - 0.0% | ||||||||
†Golden Nugget Online Gaming (Warrants) 1 | 9,999 | 89,991 | ||||||
Total (Cost $62,878) | 89,991 | |||||||
TOTAL WARRANTS | ||||||||
(Cost $62,878) | 89,991 | |||||||
REPURCHASE AGREEMENT– 4.7% | ||||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/20, due 1/4/21, maturity value $14,322,595 (collateralized by obligations of various U.S. Government Agencies, 2.125% due 12/31/22, valued at $14,609,095) | ||||||||
(Cost $14,322,595) | 14,322,595 | |||||||
COLLATERAL RECEIVED FOR SECURITIES LOANED – 6.2% | ||||||||
Money Market Funds | ||||||||
Federated Government Obligations Fund – Institutional Shares (7 day yield-0.01%) | ||||||||
(Cost $19,077,010) | 19,077,010 | |||||||
TOTAL INVESTMENTS – 106.5% | ||||||||
(Cost $203,582,756) | 327,912,088 | |||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (6.5)% | (19,927,471 | ) | ||||||
NET ASSETS – 100.0% | $ | 307,984,617 |
Royce Special Equity Fund |
Common Stocks – 81.2% |
SHARES | VALUE | |||||||
COMMUNICATION SERVICES – 0.2% | ||||||||
MEDIA - 0.2% | ||||||||
Meredith Corporation | 89,700 | $ | 1,722,240 | |||||
Total (Cost $1,627,478) | 1,722,240 | |||||||
CONSUMER DISCRETIONARY – 24.8% | ||||||||
AUTO COMPONENTS - 10.2% | ||||||||
Cooper Tire & Rubber | 870,000 | 35,235,000 | ||||||
Gentex Corporation | 865,000 | 29,349,450 | ||||||
Standard Motor Products | 827,500 | 33,480,650 | ||||||
98,065,100 | ||||||||
AUTOMOBILES - 1.9% | ||||||||
Winnebago Industries | 305,000 | 18,281,700 | ||||||
DIVERSIFIED CONSUMER SERVICES - 0.8% | ||||||||
†Graham Holdings Cl. B | 13,700 | 7,307,306 | ||||||
HOTELS, RESTAURANTS & LEISURE - 0.3% | ||||||||
Bowl America Cl. A 5 | 347,000 | 3,270,475 | ||||||
HOUSEHOLD DURABLES - 6.6% | ||||||||
Flexsteel Industries 5 | 767,500 | 26,839,475 | ||||||
Hooker Furniture 5 | 1,130,000 | 36,442,500 | ||||||
63,281,975 | ||||||||
LEISURE PRODUCTS - 5.0% | ||||||||
Johnson Outdoors Cl. A | 429,000 | 48,318,270 | ||||||
Total (Cost $167,244,728) | 238,524,826 | |||||||
CONSUMER STAPLES – 4.1% | ||||||||
FOOD PRODUCTS - 4.1% | ||||||||
John B Sanfilippo & Son | 503,800 | 39,729,668 | ||||||
Total (Cost $36,613,111) | 39,729,668 | |||||||
FINANCIALS – 1.9% | ||||||||
CAPITAL MARKETS - 1.9% | ||||||||
†Diamond Hill Investment Group | 120,500 | 17,987,035 | ||||||
Total (Cost $14,363,194) | 17,987,035 | |||||||
HEALTH CARE – 1.5% | ||||||||
BIOTECHNOLOGY - 1.5% | ||||||||
†United Therapeutics 1 | 96,500 | 14,647,735 | ||||||
Total (Cost $11,025,486) | 14,647,735 | |||||||
INDUSTRIALS – 21.8% | ||||||||
AEROSPACE & DEFENSE - 3.6% | ||||||||
National Presto Industries 5 | 393,100 | 34,761,833 | ||||||
BUILDING PRODUCTS - 0.4% | ||||||||
Insteel Industries | 197,600 | 4,400,552 | ||||||
COMMERCIAL SERVICES & SUPPLIES - 1.8% | ||||||||
Ennis | 968,000 | 17,278,800 | ||||||
CONSTRUCTION & ENGINEERING - 0.8% | ||||||||
Argan | 170,500 | 7,585,545 | ||||||
ELECTRICAL EQUIPMENT - 3.7% | ||||||||
Encore Wire | 64,000 | 3,876,480 | ||||||
Hubbell Incorporated | 202,000 | 31,671,580 | ||||||
35,548,060 | ||||||||
MACHINERY - 7.1% | ||||||||
Gencor Industries 1,5 | 1,065,000 | 13,099,500 | ||||||
Hurco Companies 5 | 580,000 | 17,400,000 | ||||||
Miller Industries 5 | 575,500 | 21,880,510 | ||||||
Mueller Industries | 322,500 | 11,322,975 | ||||||
†Oshkosh Corporation | 55,000 | 4,733,850 | ||||||
68,436,835 | ||||||||
PROFESSIONAL SERVICES - 1.8% | ||||||||
Resources Connection | 1,375,000 | 17,283,750 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 49 |
Schedules of Investments
Royce Special Equity Fund (continued) | ||||||||
SHARES | VALUE | |||||||
INDUSTRIALS (continued) | ||||||||
TRADING COMPANIES & DISTRIBUTORS - 2.6% | ||||||||
MSC Industrial Direct Cl. A | 294,000 | $ | 24,810,660 | |||||
Total (Cost $154,822,786) | 210,106,035 | |||||||
INFORMATION TECHNOLOGY – 17.1% | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 3.4% | ||||||||
Vishay Intertechnology | 1,230,000 | 25,473,300 | ||||||
†Vishay Precision Group 1 | 242,000 | 7,618,160 | ||||||
33,091,460 | ||||||||
IT SERVICES - 7.8% | ||||||||
Computer Services 2 | 1,023,000 | 60,582,060 | ||||||
†International Money Express 1 | 929,000 | 14,418,080 | ||||||
75,000,140 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.9% | ||||||||
Axcelis Technologies 1 | 595,000 | 17,326,400 | ||||||
Kulicke & Soffa Industries | 1,010,000 | 32,128,100 | ||||||
†NVE Corporation | 124,000 | 6,966,320 | ||||||
56,420,820 | ||||||||
Total (Cost $91,882,889) | 164,512,420 | |||||||
MATERIALS – 6.9% | ||||||||
CHEMICALS - 4.3% | ||||||||
Huntsman Corporation | 1,662,000 | 41,782,680 | ||||||
CONSTRUCTION MATERIALS - 1.1% | ||||||||
†United States Lime & Minerals | 88,500 | 10,089,000 | ||||||
PAPER & FOREST PRODUCTS - 1.5% | ||||||||
Verso Corporation Cl. A | 1,200,000 | 14,424,000 | ||||||
Total (Cost $62,100,215) | 66,295,680 | |||||||
REAL ESTATE – 2.9% | ||||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 2.9% | ||||||||
Marcus & Millichap 1 | 765,000 | 28,480,950 | ||||||
Total (Cost $19,319,338) | 28,480,950 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $558,999,225) | 782,006,589 | |||||||
REPURCHASE AGREEMENT– 18.9% | ||||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/20, due 1/4/21, maturity value $182,027,632 (collateralized by obligations of various U.S. Government Agencies, 0.125% due 12/31/22, valued at $185,668,200) | ||||||||
(Cost $182,027,632) | 182,027,632 | |||||||
TOTAL INVESTMENTS – 100.1% | ||||||||
(Cost $741,026,857) | 964,034,221 | |||||||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.1)% | (1,044,298 | ) | ||||||
NET ASSETS – 100.0% | $ | 962,989,923 |
Royce Total Return Fund | ||||||||
Common Stocks – 98.2% | ||||||||
SHARES | VALUE | |||||||
COMMUNICATION SERVICES – 2.0% | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.6% | ||||||||
ATN International | 202,193 | $ | 8,443,580 | |||||
ENTERTAINMENT - 1.4% | ||||||||
World Wrestling Entertainment Cl. A | 369,751 | 17,766,535 | ||||||
Total (Cost $22,489,694) | 26,210,115 | |||||||
CONSUMER DISCRETIONARY – 7.8% | ||||||||
AUTO COMPONENTS - 1.9% | ||||||||
Gentex Corporation | 394,084 | 13,371,270 | ||||||
LCI Industries | 86,685 | 11,241,311 | ||||||
24,612,581 | ||||||||
HOTELS, RESTAURANTS & LEISURE - 0.5% | ||||||||
†Hyatt Hotels Cl. A | 92,453 | 6,864,635 | ||||||
HOUSEHOLD DURABLES - 1.3% | ||||||||
Ethan Allen Interiors | 207,283 | 4,189,190 | ||||||
Leggett & Platt | 259,740 | 11,506,482 | ||||||
PulteGroup | 38,986 | 1,681,076 | ||||||
17,376,748 | ||||||||
SPECIALTY RETAIL - 0.9% | ||||||||
Shoe Carnival | 279,404 | 10,947,049 | ||||||
TEXTILES, APPAREL & LUXURY GOODS - 3.2% | ||||||||
†Levi Strauss & Co. Cl. A | 860,231 | 17,273,438 | ||||||
Ralph Lauren Cl. A | 238,936 | 24,787,221 | ||||||
42,060,659 | ||||||||
Total (Cost $69,279,634) | 101,861,672 | |||||||
CONSUMER STAPLES – 2.2% | ||||||||
FOOD PRODUCTS - 0.7% | ||||||||
Flowers Foods | 319,597 | 7,232,480 | ||||||
Hershey Creamery 2 | 666 | 2,164,500 | ||||||
9,396,980 | ||||||||
HOUSEHOLD PRODUCTS - 1.5% | ||||||||
†Reynolds Consumer Products | 145,165 | 4,360,757 | ||||||
Spectrum Brands Holdings | 190,026 | 15,008,253 | ||||||
19,369,010 | ||||||||
Total (Cost $18,369,336) | 28,765,990 | |||||||
DIVERSIFIED INVESTMENT COMPANIES – 0.1% | ||||||||
CLOSED-END FUNDS - 0.1% | ||||||||
Eagle Point Income | 75,652 | 1,090,145 | ||||||
Total (Cost $1,504,718) | 1,090,145 | |||||||
ENERGY – 1.0% | ||||||||
ENERGY EQUIPMENT & SERVICES - 0.9% | ||||||||
Computer Modelling Group | 923,456 | 3,540,314 | ||||||
Pason Systems | 397,676 | 2,461,848 | ||||||
TGS-NOPEC Geophysical 2 | 409,468 | 6,251,381 | ||||||
12,253,543 | ||||||||
OIL, GAS & CONSUMABLE FUELS - 0.1% | ||||||||
†Unit Corporation 1,4 | 69,143 | 506,127 | ||||||
Total (Cost $19,588,157) | 12,759,670 | |||||||
FINANCIALS – 38.7% | ||||||||
BANKS - 20.2% | ||||||||
Bank of N.T. Butterfield & Son | 424,812 | 13,237,142 | ||||||
†BankUnited | 532,372 | 18,515,898 | ||||||
BOK Financial | 248,695 | 17,030,634 | ||||||
†Eastern Bankshares 1 | 373,153 | 6,086,125 | ||||||
First Citizens BancShares Cl. A | 38,003 | 21,823,983 | ||||||
†First Financial Bankshares | 115,296 | 4,170,833 | ||||||
†First Hawaiian | 874,275 | 20,615,404 |
50 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2020
Royce Total Return Fund (continued) | ||||||||
SHARES | VALUE | |||||||
FINANCIALS (continued) | ||||||||
BANKS (continued) | ||||||||
First National Bank Alaska 2 | 12,574 | $ | 2,338,764 | |||||
†German American Bancorp | 154,959 | 5,127,593 | ||||||
†Glacier Bancorp | 164,850 | 7,584,748 | ||||||
†HBT Financial | 358,244 | 5,427,397 | ||||||
†Heritage Financial | 171,056 | 4,001,000 | ||||||
†Home BancShares | 1,263,160 | 24,606,357 | ||||||
†Independent Bank Group | 394,991 | 24,694,837 | ||||||
†OceanFirst Financial | 603,370 | 11,240,783 | ||||||
†Prosperity Bancshares | 52,459 | 3,638,556 | ||||||
†Signature Bank | 185,313 | 25,070,996 | ||||||
†South State | 99,299 | 7,179,318 | ||||||
†Triumph Bancorp 1 | 447,096 | 21,706,511 | ||||||
†UMB Financial | 86,011 | 5,933,899 | ||||||
†Valley National Bancorp | 1,539,423 | 15,009,374 | ||||||
265,040,152 | ||||||||
CAPITAL MARKETS - 7.2% | ||||||||
AllianceBernstein Holding L.P. | 233,008 | 7,868,680 | ||||||
Ares Management Cl. A | 253,133 | 11,909,908 | ||||||
Artisan Partners Asset Management Cl. A | 298,669 | 15,034,998 | ||||||
Ashmore Group 2 | 1,619,222 | 9,557,143 | ||||||
Lazard Cl. A | 274,987 | 11,631,950 | ||||||
Moelis & Company Cl. A | 319,326 | 14,931,684 | ||||||
Sprott | 338,231 | 9,820,895 | ||||||
TMX Group | 101,404 | 10,128,450 | ||||||
Virtu Financial Cl. A | 127,491 | 3,208,949 | ||||||
94,092,657 | ||||||||
DIVERSIFIED FINANCIAL SERVICES - 1.8% | ||||||||
†Compass Diversified Holdings | 691,693 | 13,453,429 | ||||||
†Equitable Holdings | 395,254 | 10,114,550 | ||||||
23,567,979 | ||||||||
INSURANCE - 9.5% | ||||||||
AMERISAFE | 116,256 | 6,676,582 | ||||||
Assured Guaranty | 455,100 | 14,331,099 | ||||||
Axis Capital Holdings | 444,500 | 22,398,355 | ||||||
Erie Indemnity Cl. A | 27,343 | 6,715,441 | ||||||
First American Financial | 362,160 | 18,698,321 | ||||||
†Hanover Insurance Group | 62,931 | 7,357,892 | ||||||
James River Group Holdings | 412,277 | 20,263,414 | ||||||
ProAssurance Corporation | 741,134 | 13,184,774 | ||||||
RenaissanceRe Holdings | 91,000 | 15,089,620 | ||||||
124,715,498 | ||||||||
INVESTMENT COMPANIES - 0.0% | ||||||||
†Morgan Group Holding Company 1,2 | 1,391 | 9,737 | ||||||
Total (Cost $372,743,556) | 507,426,023 | |||||||
HEALTH CARE – 1.5% | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 0.7% | ||||||||
Hill-Rom Holdings | 92,249 | 9,037,635 | ||||||
HEALTH CARE PROVIDERS & SERVICES - 0.8% | ||||||||
Patterson Companies | 375,942 | 11,139,161 | ||||||
Total (Cost $8,959,364) | 20,176,796 | |||||||
INDUSTRIALS – 21.0% | ||||||||
BUILDING PRODUCTS - 1.6% | ||||||||
†Fortune Brands Home & Security | 109,092 | 9,351,366 | ||||||
UFP Industries | 210,216 | 11,677,499 | ||||||
21,028,865 | ||||||||
COMMERCIAL SERVICES & SUPPLIES - 4.2% | ||||||||
Deluxe Corporation | 555,531 | 16,221,505 | ||||||
Healthcare Services Group | 865,509 | 24,320,803 | ||||||
McGrath RentCorp | 208,008 | 13,957,337 | ||||||
54,499,645 | ||||||||
CONSTRUCTION & ENGINEERING - 0.6% | ||||||||
Arcosa | 149,230 | 8,197,204 | ||||||
ELECTRICAL EQUIPMENT - 1.3% | ||||||||
Hubbell Incorporated | 110,498 | 17,324,982 | ||||||
INDUSTRIAL CONGLOMERATES - 1.2% | ||||||||
Carlisle Companies | 103,867 | 16,221,948 | ||||||
MACHINERY - 6.2% | ||||||||
Crane Company | 257,886 | 20,027,427 | ||||||
Gorman-Rupp Company (The) | 271,440 | 8,808,228 | ||||||
Lincoln Electric Holdings | 117,244 | 13,629,615 | ||||||
Lindsay Corporation | 95,257 | 12,236,714 | ||||||
Mueller Industries | 351,565 | 12,343,447 | ||||||
Timken Company (The) | 191,711 | 14,830,763 | ||||||
81,876,194 | ||||||||
MARINE - 1.2% | ||||||||
Clarkson 2 | 405,893 | 14,994,071 | ||||||
PROFESSIONAL SERVICES - 1.2% | ||||||||
ManpowerGroup | 133,478 | 12,037,046 | ||||||
Resources Connection | 292,259 | 3,673,696 | ||||||
15,710,742 | ||||||||
ROAD & RAIL - 0.6% | ||||||||
Werner Enterprises | 190,737 | 7,480,705 | ||||||
TRADING COMPANIES & DISTRIBUTORS - 2.9% | ||||||||
MSC Industrial Direct Cl. A | 205,480 | 17,340,457 | ||||||
Systemax | 241,933 | 8,682,975 | ||||||
Watsco | 52,368 | 11,863,971 | ||||||
37,887,403 | ||||||||
Total (Cost $160,696,176) | 275,221,759 | |||||||
INFORMATION TECHNOLOGY – 8.9% | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 5.2% | ||||||||
Avnet | 524,030 | 18,398,693 | ||||||
Methode Electronics | 431,158 | 16,504,728 | ||||||
National Instruments | 233,485 | 10,259,331 | ||||||
PC Connection 1 | 273,744 | 12,945,354 | ||||||
Vishay Intertechnology | 491,672 | 10,182,527 | ||||||
68,290,633 | ||||||||
IT SERVICES - 1.9% | ||||||||
†EVERTEC | 158,000 | 6,212,560 | ||||||
†Hackett Group (The) | 155,832 | 2,242,422 | ||||||
KBR | 541,050 | 16,734,677 | ||||||
25,189,659 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 1.8% | ||||||||
Kulicke & Soffa Industries | 467,553 | 14,872,861 | ||||||
MKS Instruments | 58,601 | 8,816,521 | ||||||
23,689,382 | ||||||||
Total (Cost $72,246,048) | 117,169,674 | |||||||
MATERIALS – 12.0% | ||||||||
CHEMICALS - 6.9% | ||||||||
Albemarle Corporation | 84,951 | 12,531,972 | ||||||
Chase Corporation | 99,556 | 10,056,152 | ||||||
†Element Solutions | 1,052,802 | 18,666,179 | ||||||
FutureFuel Corporation | 105,133 | 1,335,189 | ||||||
Innospec | 191,271 | 17,354,018 | ||||||
Minerals Technologies | 289,897 | 18,008,402 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 51 |
Schedules of Investments | December 31, 2020
|
Royce Total Return Fund (continued) |
SHARES | VALUE | |||||||
MATERIALS (continued) | ||||||||
CHEMICALS (continued) | ||||||||
Quaker Chemical | 49,373 | $ | 12,510,624 | |||||
90,462,536 | ||||||||
CONTAINERS & PACKAGING - 4.2% | ||||||||
AptarGroup | 75,487 | 10,333,415 | ||||||
†Graphic Packaging Holding Company | 860,934 | 14,584,222 | ||||||
Packaging Corporation of America | 37,819 | 5,215,618 | ||||||
†Silgan Holdings | 223,954 | 8,304,214 | ||||||
Sonoco Products | 275,010 | 16,294,343 | ||||||
54,731,812 | ||||||||
METALS & MINING - 0.9% | ||||||||
Ferroglobe (Warranty Insurance Trust) 1,4 | 569,803 | 0 | ||||||
Gold Fields ADR | 1,057,201 | 9,800,253 | ||||||
Royal Gold | 19,719 | 2,097,313 | ||||||
Worthington Industries | 10,181 | 522,693 | ||||||
12,420,259 | ||||||||
Total (Cost $94,442,738) | 157,614,607 | |||||||
REAL ESTATE – 1.9% | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.2% | ||||||||
Lexington Realty Trust | 266,479 | 2,830,007 | ||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.7% | ||||||||
Kennedy-Wilson Holdings | 775,605 | 13,875,573 | ||||||
†RMR Group (The) Cl. A | 231,193 | 8,928,674 | ||||||
22,804,247 | ||||||||
Total (Cost $23,098,812) | 25,634,254 | |||||||
UTILITIES – 1.1% | ||||||||
ELECTRIC UTILITIES - 0.6% | ||||||||
ALLETE | 117,824 | 7,298,019 | ||||||
WATER UTILITIES - 0.5% | ||||||||
Essential Utilities | 64,875 | 3,067,939 | ||||||
SJW Group | 53,520 | 3,712,147 | ||||||
6,780,086 | ||||||||
Total (Cost $5,760,348) | 14,078,105 | |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $869,178,581) | 1,288,008,810 | |||||||
PREFERRED STOCK - 0.1% | ||||||||
Chicken Soup For The Soul Entertainment | ||||||||
9.75% Ser. A | 74,883 | 1,834,633 | ||||||
(Cost $1,884,655) | 1,834,633 |
REPURCHASE AGREEMENT– 1.8% | ||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/20, due 1/4/21, maturity value $23,370,926 (collateralized by obligations of various U.S. Government Agencies, 2.125% due 12/31/22, valued at $23,838,399) | ||||
(Cost $23,370,926) | $ | 23,370,926 | ||
TOTAL INVESTMENTS – 100.1% | ||||
(Cost $894,434,162) | 1,313,214,369 | |||
LIABILITIES LESS CASH AND OTHER ASSETS – (0.1)% | (902,943 | ) | ||
NET ASSETS – 100.0% | $ | 1,312,311,426 |
ADR- American Depository Receipt
† | New additions in 2020. |
1 | Non-income producing. |
2 | These securities are defined as Level 2 securities due to fair value being based on quoted prices for similar securities and/or due to the application of fair value factors. See Notes to Financial Statements. |
3 | All or a portion of these securities were on loan at December 31, 2020. |
4 | Securities for which market quotations are not readily available represent 0.2%, 0.0% and 0.0% of net assets for Royce Micro-Cap Fund, Royce Pennsylvania Mutual 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 December 31, 2020, 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. |
Bold indicates a Fund’s 20 largest equity holdings in terms of December 31, 2020, market value.
52 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Statements of Assets and Liabilities | December 31, 2020 |
Royce Dividend Value Fund | Royce Global Financial Services Fund | Royce International Premier Fund | Royce Micro-Cap Fund | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at value (including collateral on loaned securities)1 | ||||||||||||||||
Non-Affiliated Companies | $ | 73,569,085 | $ | 33,135,444 | $ | 1,075,262,144 | $ | 354,042,298 | ||||||||
Repurchase agreements (at cost and value) | 1,314,454 | 561,698 | 57,608,157 | 4,230,876 | ||||||||||||
Foreign currency2 | – | 1,254 | 261,118 | – | ||||||||||||
Receivable for investments sold | 427,679 | – | – | 359,039 | ||||||||||||
Receivable for capital shares sold | 65,809 | 23,373 | 2,655,964 | 31,885 | ||||||||||||
Receivable for dividends | 100,947 | 52,499 | 1,527,862 | 36,765 | ||||||||||||
Receivable for securities lending income | – | – | – | 1,739 | ||||||||||||
Prepaid expenses and other assets | 1,102 | 420 | 9,725 | 4,071 | ||||||||||||
Total Assets | 75,479,076 | 33,774,688 | 1,137,324,970 | 358,706,673 | ||||||||||||
LIABILITIES: | ||||||||||||||||
Payable for collateral on loaned securities | – | – | – | 1,299,188 | ||||||||||||
Payable for investments purchased | – | – | 2,689,249 | 46,406 | ||||||||||||
Payable for capital shares redeemed | 241,361 | 38,538 | 854,502 | 205,177 | ||||||||||||
Payable for investment advisory fees | 54,170 | 27,906 | 845,308 | 295,981 | ||||||||||||
Payable for trustees' fees | 3,122 | 1,232 | 32,448 | 10,945 | ||||||||||||
Accrued expenses | 68,605 | 41,893 | 312,449 | 200,310 | ||||||||||||
Total Liabilities | 367,258 | 109,569 | 4,733,956 | 2,058,007 | ||||||||||||
Net Assets | $ | 75,111,818 | $ | 33,665,119 | $ | 1,132,591,014 | $ | 356,648,666 | ||||||||
ANALYSIS OF NET ASSETS: | ||||||||||||||||
Paid-in capital | $ | 34,305,961 | $ | 21,046,293 | $ | 896,077,028 | $ | 219,945,075 | ||||||||
Total distributable earnings (loss) | 40,805,857 | 12,618,826 | 236,513,986 | 136,703,591 | ||||||||||||
Net Assets | $ | 75,111,818 | $ | 33,665,119 | $ | 1,132,591,014 | $ | 356,648,666 | ||||||||
Investment Class | $ | 53,420,693 | $ | 486,377,565 | $ | 174,338,836 | ||||||||||
Service Class | 19,686,536 | $ | 25,918,621 | 69,153,073 | 168,285,171 | |||||||||||
Consultant Class | 1,228,149 | 9,182,534 | 14,024,659 | |||||||||||||
Institutional Class | 776,440 | 7,746,498 | 567,877,842 | |||||||||||||
SHARES OUTSTANDING (unlimited number of $.001 par value): | ||||||||||||||||
Investment Class | 8,738,125 | 27,576,016 | 13,680,404 | |||||||||||||
Service Class | 3,104,543 | 2,432,034 | 3,277,380 | 13,513,648 | ||||||||||||
Consultant Class | 168,862 | 408,136 | 1,457,362 | |||||||||||||
Institutional Class | 129,078 | 560,930 | 32,186,663 | |||||||||||||
NET ASSET VALUES (Net Assets ÷ Shares Outstanding): | ||||||||||||||||
Investment Class3 | $ | 6.11 | $ | 17.64 | $ | 12.74 | ||||||||||
Service Class3 | 6.34 | $ | 10.66 | 21.10 | 12.45 | |||||||||||
Consultant Class4 | 7.27 | 22.50 | 9.62 | |||||||||||||
Institutional Class5 | 6.02 | 13.81 | 17.64 | |||||||||||||
Investments at identified cost | $ | 34,193,801 | $ | 20,200,584 | $ | 799,963,119 | $ | 222,157,649 | ||||||||
Market value of loaned securities6 | – | – | – | 14,178,211 |
1 | See Notes to Financial Statements for information on non-cash collateral on loaned securities. |
2 | The cost of foreign currency is $1,252 for Royce Global Financial Services Fund and $261,965 for Royce International Premier Fund. |
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. |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 53 |
Statements of Assets and Liabilities
Royce Opportunity Fund | Royce Pennsylvania Mutual Fund | Royce Premier Fund | Royce Small-Cap Value Fund | |||||||||||||
ASSETS: | ||||||||||||||||
Investments at value (including collateral on loaned securities)1 | ||||||||||||||||
Non-Affiliated Companies | $ | 1,248,502,743 | $ | 1,910,224,298 | $ | 1,714,319,839 | $ | 118,671,768 | ||||||||
Repurchase agreements (at cost and value) | 80,411,649 | 27,699,276 | 45,555,851 | 1,955,624 | ||||||||||||
Foreign currency2 | – | 10,669 | – | – | ||||||||||||
Receivable for investments sold | 3,270,871 | 7,550,658 | – | 1,566,970 | ||||||||||||
Receivable for capital shares sold | 2,763,505 | 396,132 | 1,220,918 | 111,734 | ||||||||||||
Receivable for dividends | 309,258 | 1,066,230 | 1,037,521 | 85,849 | ||||||||||||
Receivable for securities lending income | 19,092 | 101,588 | 256,314 | 84 | ||||||||||||
Prepaid expenses and other assets | 10,326 | 3,271,847 | 20,644 | 1,777 | ||||||||||||
Total Assets | 1,335,287,444 | 1,950,320,698 | 1,762,411,087 | 122,393,806 | ||||||||||||
LIABILITIES: | ||||||||||||||||
Payable for collateral on loaned securities | 5,268,397 | 21,820,570 | 21,146,208 | – | ||||||||||||
Payable for investments purchased | 9,177,472 | 9,147,384 | – | 472,033 | ||||||||||||
Payable for capital shares redeemed | 10,389,760 | 1,442,969 | 3,215,324 | 645,433 | ||||||||||||
Payable for investment advisory fees | 1,060,973 | 1,217,637 | 1,457,331 | 102,577 | ||||||||||||
Payable for trustees' fees | 30,616 | 63,140 | 60,300 | 4,674 | ||||||||||||
Accrued expenses | 366,398 | 707,575 | 535,305 | 103,572 | ||||||||||||
Total Liabilities | 26,293,616 | 34,399,275 | 26,414,468 | 1,328,289 | ||||||||||||
Net Assets | $ | 1,308,993,828 | $ | 1,915,921,423 | $ | 1,735,996,619 | $ | 121,065,517 | ||||||||
ANALYSIS OF NET ASSETS: | ||||||||||||||||
Paid-in capital | $ | 917,454,582 | $ | 1,043,413,296 | $ | 840,419,558 | $ | 107,395,445 | ||||||||
Total distributable earnings (loss) | 391,539,246 | 872,508,127 | 895,577,061 | 13,670,072 | ||||||||||||
Net Assets | $ | 1,308,993,828 | $ | 1,915,921,423 | $ | 1,735,996,619 | $ | 121,065,517 | ||||||||
Investment Class | $ | 786,849,175 | $ | 1,426,471,757 | $ | 1,414,717,832 | $ | 34,523,064 | ||||||||
Service Class | 131,724,934 | 78,789,122 | 29,588,101 | 75,501,709 | ||||||||||||
Consultant Class | 13,476,975 | 238,595,460 | 15,686,037 | 3,898,631 | ||||||||||||
Institutional Class | 340,877,286 | 163,943,851 | 266,587,017 | |||||||||||||
R Class | 36,065,458 | 8,121,233 | 9,417,632 | 7,142,113 | ||||||||||||
SHARES OUTSTANDING (unlimited number of $.001 par value): | ||||||||||||||||
Investment Class | 49,659,512 | 139,326,205 | 104,135,232 | 4,008,292 | ||||||||||||
Service Class | 8,987,167 | 7,702,452 | 2,238,967 | 8,796,343 | ||||||||||||
Consultant Class | 1,068,459 | 29,570,833 | 1,479,838 | 514,733 | ||||||||||||
Institutional Class | 21,021,635 | 15,957,797 | 19,324,387 | |||||||||||||
R Class | 2,571,084 | 849,709 | 754,059 | 868,627 | ||||||||||||
NET ASSET VALUES (Net Assets ÷ Shares Outstanding): | ||||||||||||||||
Investment Class3 | $ | 15.84 | $ | 10.24 | $ | 13.59 | $ | 8.61 | ||||||||
Service Class3 | 14.66 | 10.23 | 13.22 | 8.58 | ||||||||||||
Consultant Class4 | 12.61 | 8.07 | 10.60 | 7.57 | ||||||||||||
Institutional Class5 | 16.22 | 10.27 | 13.80 | |||||||||||||
R Class5 | 14.03 | 9.56 | 12.49 | 8.22 | ||||||||||||
Investments at identified cost | $ | 858,225,120 | $ | 1,063,493,676 | $ | 871,294,413 | $ | 88,332,011 | ||||||||
Market value of loaned securities6 | 84,537,141 | 52,199,500 | 64,135,947 | 570,629 |
1 | See Notes to Financial Statements for information on non-cash collateral on loaned securities. |
2 | The cost of foreign currency is $10,640 for Royce Pennsylvania Mutual Fund. |
3 | Offering and redemption price per share; shares held less than 30 days may be subject to a 1% redemption fee, 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. |
54 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2020
Royce Smaller-Companies Growth Fund | Royce Special Equity Fund | Royce Total Return Fund | ||||||||||
ASSETS: | ||||||||||||
Investments at value (including collateral on loaned securities)1 | ||||||||||||
Non-Affiliated Companies | $ | 313,589,493 | $ | 628,312,296 | $ | 1,289,843,443 | ||||||
Affiliated Companies | – | 153,694,293 | – | |||||||||
Repurchase agreements (at cost and value) | 14,322,595 | 182,027,632 | 23,370,926 | |||||||||
Cash | – | – | 5,861 | |||||||||
Receivable for investments sold | 32,336 | 303,045 | 1,217,472 | |||||||||
Receivable for capital shares sold | 103,687 | 1,640,832 | 1,390,151 | |||||||||
Receivable for dividends | 6,480 | 219,430 | 1,353,166 | |||||||||
Receivable for securities lending income | 78,463 | – | – | |||||||||
Prepaid expenses and other assets | 3,120 | 12,454 | 16,727 | |||||||||
Total Assets | 328,136,174 | 966,209,982 | 1,317,197,746 | |||||||||
LIABILITIES: | ||||||||||||
Payable for collateral on loaned securities | 19,077,010 | – | – | |||||||||
Payable for investments purchased | – | 663,197 | – | |||||||||
Payable for capital shares redeemed | 638,166 | 1,367,776 | 3,172,541 | |||||||||
Payable for investment advisory fees | 250,798 | 806,561 | 1,114,775 | |||||||||
Payable for trustees' fees | 9,229 | 33,850 | 48,267 | |||||||||
Accrued expenses | 176,354 | 348,675 | 550,737 | |||||||||
Total Liabilities | 20,151,557 | 3,220,059 | 4,886,320 | |||||||||
Net Assets | $ | 307,984,617 | $ | 962,989,923 | $ | 1,312,311,426 | ||||||
ANALYSIS OF NET ASSETS: | ||||||||||||
Paid-in capital | $ | 161,228,455 | $ | 724,708,310 | $ | 847,899,674 | ||||||
Total distributable earnings (loss) | 146,756,162 | 238,281,613 | 464,411,752 | |||||||||
Net Assets | $ | 307,984,617 | $ | 962,989,923 | $ | 1,312,311,426 | ||||||
Investment Class | $ | 112,667,805 | $ | 702,555,864 | $ | 893,867,556 | ||||||
Service Class | 181,591,078 | 46,670,750 | 69,633,518 | |||||||||
Consultant Class | 8,080,167 | 18,852,328 | 110,179,059 | |||||||||
Institutional Class | 5,645,567 | 194,910,981 | 208,604,707 | |||||||||
R Class | 30,026,586 | |||||||||||
SHARES OUTSTANDING (unlimited number of $.001 par value): | ||||||||||||
Investment Class | 10,187,738 | 38,567,582 | 95,739,515 | |||||||||
Service Class | 16,911,671 | 2,565,888 | 7,236,617 | |||||||||
Consultant Class | 890,231 | 1,135,694 | 11,301,323 | |||||||||
Institutional Class | 502,845 | 10,794,154 | 22,751,512 | |||||||||
R Class | 3,077,155 | |||||||||||
NET ASSET VALUES (Net Assets ÷ Shares Outstanding): | ||||||||||||
Investment Class2 | $ | 11.06 | $ | 18.22 | $ | 9.34 | ||||||
Service Class2 | 10.74 | 18.19 | 9.62 | |||||||||
Consultant Class3 | 9.08 | 16.60 | 9.75 | |||||||||
Institutional Class4 | 11.23 | 18.06 | 9.17 | |||||||||
R Class4 | 9.76 | |||||||||||
Investments at identified cost | $ | 189,260,161 | $ | 558,999,225 | $ | 871,063,236 | ||||||
Market value of loaned securities5 | 43,644,185 | – | – |
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 2020 Annual Report to Shareholders | 55 |
Statements of Operations
Royce Dividend Value Fund | Royce Global Financial Services Fund | Royce International Premier Fund | Royce Micro-Cap Fund | |||||||||||||
INVESTMENT INCOME: | ||||||||||||||||
INCOME: | ||||||||||||||||
Dividends | $ | 1,903,323 | $ | 759,318 | $ | 14,214,228 | $ | 2,228,431 | ||||||||
Foreign withholding tax | (78,911 | ) | (43,786 | ) | (1,300,918 | ) | (39,345 | ) | ||||||||
Interest | 1,649 | 327 | 27,875 | 8,213 | ||||||||||||
Securities lending | – | – | – | 35,616 | ||||||||||||
Total income | 1,826,061 | 715,859 | 12,941,185 | 2,232,915 | ||||||||||||
EXPENSES: | ||||||||||||||||
Investment advisory fees | 657,615 | 312,578 | 8,724,300 | 2,875,184 | ||||||||||||
Distribution fees | 59,848 | 62,236 | 244,932 | 461,546 | ||||||||||||
Shareholder servicing | 129,881 | 46,568 | 714,752 | 457,232 | ||||||||||||
Administrative and office facilities | 60,691 | 34,525 | 403,818 | 159,741 | ||||||||||||
Registration | 53,482 | 32,868 | 97,151 | 47,423 | ||||||||||||
Custody | 34,014 | 32,375 | 291,672 | 37,241 | ||||||||||||
Audit | 33,474 | 34,471 | 41,839 | 35,115 | ||||||||||||
Shareholder reports | 24,126 | 8,458 | 309,641 | 116,921 | ||||||||||||
Trustees’ fees | 11,964 | 4,541 | 119,019 | 41,245 | ||||||||||||
Legal | 4,911 | 1,788 | 39,260 | 16,116 | ||||||||||||
Other expenses | 11,292 | 4,198 | 52,998 | 23,749 | ||||||||||||
Total expenses | 1,081,298 | 574,606 | 11,039,382 | 4,271,513 | ||||||||||||
Compensating balance credits | (223 | ) | (216 | ) | (16,059 | ) | (5,411 | ) | ||||||||
Fees waived by investment adviser and distributor | – | (7,468 | ) | (604,622 | ) | – | ||||||||||
Expenses reimbursed by investment adviser | (177,933 | ) | (101,181 | ) | (420,865 | ) | (219,389 | ) | ||||||||
Net expenses | 903,142 | 465,741 | 9,997,836 | 4,046,713 | ||||||||||||
Net investment income (loss) | 922,919 | 250,118 | 2,943,349 | (1,813,798 | ) | |||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | ||||||||||||||||
NET REALIZED GAIN (LOSS): | ||||||||||||||||
Investments | 2,396,503 | 1,469,997 | 22,331,582 | 23,331,124 | ||||||||||||
Foreign currency transactions | (28,705 | ) | (4,783 | ) | 146,883 | (11,134 | ) | |||||||||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | ||||||||||||||||
Investments | (4,378,659 | ) | 2,114,354 | 134,588,584 | 44,800,444 | |||||||||||
Other assets and liabilities denominated in foreign currency | 13,422 | 1,572 | 101,755 | 3,405 | ||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | (1,997,439 | ) | 3,581,140 | 157,168,804 | 68,123,839 | |||||||||||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | (1,074,520 | ) | $ | 3,831,258 | $ | 160,112,153 | $ | 66,310,041 |
56 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Year Ended December 31, 2020
Royce Opportunity Fund | Royce Pennsylvania Mutual Fund | Royce Premier Fund | Royce Small-Cap Value Fund | |||||||||||||
INVESTMENT INCOME: | ||||||||||||||||
INCOME: | ||||||||||||||||
Dividends | $ | 7,011,844 | $ | 21,624,544 | $ | 25,840,283 | $ | 2,379,379 | ||||||||
Foreign withholding tax | – | (824,849 | ) | (1,227,614 | ) | (65,517 | ) | |||||||||
Interest | 19,086 | 448,594 | 48,895 | 4,695 | ||||||||||||
Securities lending | 925,373 | 377,282 | 297,895 | 1,602 | ||||||||||||
Total income | 7,956,303 | 21,625,571 | 24,959,459 | 2,320,159 | ||||||||||||
EXPENSES: | ||||||||||||||||
Investment advisory fees | 8,376,701 | 12,464,882 | 15,499,282 | 1,162,272 | ||||||||||||
Distribution fees | 362,341 | 2,420,448 | 251,968 | 253,916 | ||||||||||||
Shareholder servicing | 764,124 | 1,185,177 | 1,238,280 | 197,859 | ||||||||||||
Administrative and office facilities | 397,763 | 829,003 | 788,965 | 82,314 | ||||||||||||
Registration | 77,679 | 76,761 | 74,232 | 49,843 | ||||||||||||
Custody | 124,913 | 158,478 | 160,713 | 26,144 | ||||||||||||
Audit | 42,421 | 50,364 | 46,578 | 30,676 | ||||||||||||
Shareholder reports | 145,939 | 363,340 | 390,442 | 45,568 | ||||||||||||
Trustees’ fees | 110,869 | 237,294 | 225,697 | 17,874 | ||||||||||||
Legal | 82,511 | 121,223 | 87,791 | 7,675 | ||||||||||||
Other expenses | 67,253 | 134,025 | 129,275 | 14,286 | ||||||||||||
Total expenses | 10,552,514 | 18,040,995 | 18,893,223 | 1,888,427 | ||||||||||||
Compensating balance credits | (4,547 | ) | (9,638 | ) | (1,403 | ) | (958 | ) | ||||||||
Fees waived by distributor | – | (110,275 | ) | – | – | |||||||||||
Expenses reimbursed by investment adviser | (29,445 | ) | – | (20,445 | ) | (154,473 | ) | |||||||||
Net expenses | 10,518,522 | 17,921,082 | 18,871,375 | 1,732,996 | ||||||||||||
Net investment income (loss) | (2,562,219 | ) | 3,704,489 | 6,088,084 | 587,163 | |||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | ||||||||||||||||
NET REALIZED GAIN (LOSS): | ||||||||||||||||
Investments | 9,918,591 | 35,726,298 | 116,311,487 | (14,598,187 | ) | |||||||||||
Foreign currency transactions | – | (104,398 | ) | (164,091 | ) | (7,509 | ) | |||||||||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | ||||||||||||||||
Investments | 256,040,438 | 163,876,287 | 47,699,548 | (4,160,439 | ) | |||||||||||
Other assets and liabilities denominated in foreign currency | – | 1,879 | 61,389 | 18 | ||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | 265,959,029 | 199,500,066 | 163,908,333 | (18,766,117 | ) | |||||||||||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | 263,396,810 | $ | 203,204,555 | $ | 169,996,417 | $ | (18,178,954 | ) |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 57 |
Statements of Operations | Year Ended December 31, 2020 |
Royce Smaller- Companies Growth Fund | Royce Special | Royce Total | ||||||||||
INVESTMENT INCOME: INCOME: | ||||||||||||
Dividends | ||||||||||||
Non-Affiliated Companies | $ | 500,887 | $ | 13,429,242 | $ | 38,947,577 | ||||||
Affiliated Companies | – | 11,743,465 | – | |||||||||
Foreign withholding tax | – | – | (800,498 | ) | ||||||||
Interest | 4,256 | 67,638 | 95,885 | |||||||||
Securities lending | 408,464 | – | 1,022 | |||||||||
Total income | 913,607 | 25,240,345 | 38,243,986 | |||||||||
EXPENSES: | ||||||||||||
Investment advisory fees | 2,415,038 | 8,631,588 | 12,277,706 | |||||||||
Distribution fees | 415,688 | 297,687 | 1,429,773 | |||||||||
Shareholder servicing | 306,836 | 781,516 | 1,131,545 | |||||||||
Administrative and office facilities | 133,080 | 459,938 | 642,368 | |||||||||
Registration | 55,811 | 70,585 | 87,103 | |||||||||
Custody | 29,241 | 79,578 | 120,013 | |||||||||
Audit | 31,337 | 43,432 | 52,071 | |||||||||
Shareholder reports | 68,872 | 210,198 | 402,092 | |||||||||
Trustees' fees | 33,500 | 127,293 | 180,723 | |||||||||
Legal | 11,380 | 52,237 | 105,616 | |||||||||
Other expenses | 21,612 | 79,792 | 117,091 | |||||||||
Total expenses | 3,522,395 | 10,833,844 | 16,546,101 | |||||||||
Compensating balance credits | (1,768 | ) | (1,867 | ) | (5,689 | ) | ||||||
Expenses reimbursed by investment adviser | (110,941 | ) | (85,115 | ) | (64,901 | ) | ||||||
Net expenses | 3,409,686 | 10,746,862 | 16,475,511 | |||||||||
Net investment income (loss) | (2,496,079 | ) | 14,493,483 | 21,768,475 | ||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: NET REALIZED GAIN (LOSS): | ||||||||||||
Investments in Non-Affiliated Companies | 48,701,149 | 31,496,369 | 255,146,653 | |||||||||
Investments in Affiliated Companies | – | 21,651,344 | – | |||||||||
Foreign currency transactions | (12,667 | ) | – | (29,151 | ) | |||||||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | ||||||||||||
Investments in Non-Affiliated Companies | 57,485,325 | (7,366,220 | ) | (248,650,381 | ) | |||||||
Investments in Affiliated Companies | – | (8,653,552 | ) | – | ||||||||
Other assets and liabilities denominated in foreign currency | 72 | – | 14,229 | |||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | 106,173,879 | 37,127,941 | 6,481,350 | |||||||||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | 103,677,800 | $ | 51,621,424 | $ | 28,249,825 |
58 | The Royce Funds 2020 Annual 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 | ||||||||||||||||||||||
Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | |||||||||||||||||||
INVESTMENT OPERATIONS: Net investment income (loss) | $ | 922,919 | $ | 1,440,582 | $ | 250,118 | $ | 345,084 | $ | 2,943,349 | $ | 3,847,785 | ||||||||||||
Net realized gain (loss) on investments and foreign currency | 2,367,798 | 13,569,493 | 1,465,214 | 999,600 | 22,478,465 | 312,405 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (4,365,237 | ) | 15,522,268 | 2,115,926 | 7,080,133 | 134,690,339 | 161,767,592 | |||||||||||||||||
Net increase (decrease) in net assets from investment operations | (1,074,520 | ) | 30,532,343 | 3,831,258 | 8,424,817 | 160,112,153 | 165,927,782 | |||||||||||||||||
DISTRIBUTIONS: Total distributable earnings | ||||||||||||||||||||||||
Investment Class | (3,240,413 | ) | (11,256,453 | ) | (1,247,887 | ) | (1,519,599 | ) | ||||||||||||||||
Service Class | (1,079,729 | ) | (3,520,064 | ) | (1,687,634 | ) | (725,690 | ) | – | (136,306 | ) | |||||||||||||
Consultant Class | (50,593 | ) | (211,294 | ) | – | – | ||||||||||||||||||
Institutional Class | (45,009 | ) | (135,321 | ) | (490,704 | ) | (144,374 | ) | (1,995,035 | ) | (2,094,953 | ) | ||||||||||||
Total distributions | (4,415,744 | ) | (15,123,132 | ) | (2,178,338 | ) | (870,064 | ) | (3,242,922 | ) | (3,750,858 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: Net capital share transactions | ||||||||||||||||||||||||
Investment Class | (18,600,025 | ) | (22,891,835 | ) | 55,751,664 | (27,120,594 | ) | |||||||||||||||||
Service Class | (4,485,993 | ) | (6,605,916 | ) | (5,406,864 | ) | (8,137,121 | ) | (10,968,052 | ) | 19,225,102 | |||||||||||||
Consultant Class | (320,764 | ) | 99,037 | (1,726,782 | ) | (1,266,625 | ) | |||||||||||||||||
Institutional Class | (30,118 | ) | (2,500,925 | ) | 478,106 | (1,542,523 | ) | 123,907,508 | 293,459,479 | |||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||
Investment Class | 6,074 | 1,850 | 15,694 | 8,159 | ||||||||||||||||||||
Service Class | 1 | 152 | 833 | 1,009 | 4,735 | 617 | ||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | (23,430,825 | ) | (31,897,637 | ) | (4,927,925 | ) | (9,678,635 | ) | 166,984,767 | 284,306,138 | ||||||||||||||
Net Increase (Decrease) In Net Assets | (28,921,089 | ) | (16,488,426 | ) | (3,275,005 | ) | (2,123,882 | ) | 323,853,998 | 446,483,062 | ||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 104,032,907 | 120,521,333 | 36,940,124 | 39,064,006 | 808,737,016 | 362,253,954 | ||||||||||||||||||
End of year | $ | 75,111,818 | $ | 104,032,907 | $ | 33,665,119 | $ | 36,940,124 | $ | 1,132,591,014 | $ | 808,737,016 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 59 |
Statements of Changes in Net Assets
Royce Micro-Cap Fund | Royce Opportunity Fund | Royce Pennsylvania Mutual Fund | ||||||||||||||||||||||
Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | |||||||||||||||||||
INVESTMENT OPERATIONS: Net investment income (loss) | $ | (1,813,798 | ) | $ | (960,477 | ) | $ | (2,562,219 | ) | $ | (4,817,101 | ) | $ | 3,704,489 | $ | 4,049,696 | ||||||||
Net realized gain (loss) on investments and foreign currency | 23,319,990 | 16,396,186 | 9,918,591 | 1,127,436 | 35,621,900 | 130,352,100 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | 44,803,849 | 30,251,809 | 256,040,438 | 232,030,066 | 163,878,166 | 283,908,906 | ||||||||||||||||||
Net increase (decrease) in net assets from investment operations | 66,310,041 | 45,687,518 | 263,396,810 | 228,340,401 | 203,204,555 | 418,310,702 | ||||||||||||||||||
DISTRIBUTIONS: Total distributable earnings | ||||||||||||||||||||||||
Investment Class | (12,180,419 | ) | (4,262,534 | ) | – | (9,526,035 | ) | (69,231,208 | ) | (53,721,411 | ) | |||||||||||||
Service Class | (11,758,124 | ) | (4,422,915 | ) | – | (733,734 | ) | (3,611,159 | ) | (5,169,309 | ) | |||||||||||||
Consultant Class | (980,127 | ) | (383,826 | ) | – | (136,771 | ) | (10,246,820 | ) | (9,327,862 | ) | |||||||||||||
Institutional Class | – | (3,585,669 | ) | (8,012,607 | ) | (4,072,855 | ) | |||||||||||||||||
R Class | – | (483,977 | ) | (345,468 | ) | (314,939 | ) | |||||||||||||||||
Total distributions | (24,918,670 | ) | (9,069,275 | ) | – | (14,466,186 | ) | (91,447,262 | ) | (72,606,376 | ) | |||||||||||||
CAPITAL SHARE TRANSACTIONS: Net capital share transactions | ||||||||||||||||||||||||
Investment Class | (5,433,235 | ) | (30,491,304 | ) | 24,573,263 | (104,388,520 | ) | (88,625,855 | ) | (121,858,940 | ) | |||||||||||||
Service Class | (14,965,795 | ) | (15,609,902 | ) | 55,823,736 | (14,001,010 | ) | (63,518,198 | ) | (20,865,625 | ) | |||||||||||||
Consultant Class | (1,616,260 | ) | (4,905,556 | ) | 2,345,556 | (3,323,961 | ) | (35,210,467 | ) | (44,014,764 | ) | |||||||||||||
Institutional Class | 40,046,884 | (51,379,957 | ) | 43,371,094 | 4,153,231 | |||||||||||||||||||
R Class | (2,834,479 | ) | (1,709,300 | ) | (1,187,456 | ) | (3,040,572 | ) | ||||||||||||||||
Value of shares issued in connection with fund mergers | 209,887,857 | 17,332,098 | 210,165,813 | |||||||||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||
Investment Class | 731 | 12 | 4,415 | 4,899 | 5,223 | 2,134 | ||||||||||||||||||
Service Class | 2 | – | 94 | 553 | 19 | 5 | ||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | (22,014,557 | ) | 158,881,107 | 119,959,469 | (157,465,198 | ) | (145,165,640 | ) | 24,541,282 | |||||||||||||||
Net Increase (Decrease) In Net Assets | 19,376,814 | 195,499,350 | 383,356,279 | 56,409,017 | (33,408,347 | ) | 370,245,608 | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 337,271,852 | 141,772,502 | 925,637,549 | 869,228,532 | 1,949,329,770 | 1,579,084,162 | ||||||||||||||||||
End of year | $ | 356,648,666 | $ | 337,271,852 | $ | 1,308,993,828 | $ | 925,637,549 | $ | 1,915,921,423 | $ | 1,949,329,770 |
60 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Premier Fund | Royce Small-Cap Value Fund | Royce Smaller-Companies Growth Fund | ||||||||||||||||||||||
Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | |||||||||||||||||||
INVESTMENT OPERATIONS: Net investment income (loss) | $ | 6,088,084 | $ | 5,452,740 | $ | 587,163 | $ | 1,144,474 | $ | (2,496,079 | ) | $ | (2,366,065 | ) | ||||||||||
Net realized gain (loss) on investments and foreign currency | 116,147,396 | 277,034,817 | (14,605,696 | ) | 2,866,985 | 48,688,482 | 7,149,630 | |||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | 47,760,937 | 251,378,198 | (4,160,421 | ) | 26,275,487 | 57,485,397 | 53,476,679 | |||||||||||||||||
Net increase (decrease) in net assets from investment operations | 169,996,417 | 533,865,755 | (18,178,954 | ) | 30,286,946 | 103,677,800 | 58,260,244 | |||||||||||||||||
DISTRIBUTIONS: Total distributable earnings | ||||||||||||||||||||||||
Investment Class | (75,818,358 | ) | (270,134,126 | ) | (1,397,547 | ) | (1,802,865 | ) | (10,744,144 | ) | (3,105,680 | ) | ||||||||||||
Service Class | (1,489,604 | ) | (5,059,792 | ) | (2,901,432 | ) | (3,228,412 | ) | (17,138,595 | ) | (5,286,102 | ) | ||||||||||||
Consultant Class | (723,891 | ) | (3,012,350 | ) | (118,304 | ) | (192,647 | ) | (754,437 | ) | (215,621 | ) | ||||||||||||
Institutional Class | (14,256,624 | ) | (41,871,825 | ) | (526,528 | ) | (269,713 | ) | ||||||||||||||||
R Class | (449,228 | ) | (1,855,165 | ) | (253,771 | ) | (220,872 | ) | ||||||||||||||||
Total distributions | (92,737,705 | ) | (321,933,258 | ) | (4,671,054 | ) | (5,444,796 | ) | (29,163,704 | ) | (8,877,116 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: Net capital share transactions | ||||||||||||||||||||||||
Investment Class | (144,735,583 | ) | (70,768,449 | ) | (11,132,948 | ) | (10,616,728 | ) | (6,812,104 | ) | (12,626,574 | ) | ||||||||||||
Service Class | (1,348,855 | ) | (18,247,575 | ) | (13,760,257 | ) | (24,440,364 | ) | (16,079,760 | ) | (31,562,938 | ) | ||||||||||||
Consultant Class | (2,305,819 | ) | (6,917,899 | ) | (2,225,129 | ) | (3,382,618 | ) | (75,431 | ) | (1,180,143 | ) | ||||||||||||
Institutional Class | 488,982 | 22,849,733 | (3,787,896 | ) | (551,637 | ) | ||||||||||||||||||
R Class | (1,755,980 | ) | 45,596 | (234,297 | ) | (1,317,046 | ) | |||||||||||||||||
Shareholder redemption fees | ||||||||||||||||||||||||
Investment Class | 1,373 | 15,132 | – | 1 | 4 | 495 | ||||||||||||||||||
Service Class | 83 | 67 | 94 | 29 | 257 | 96 | ||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | (149,655,799 | ) | (73,023,395 | ) | (27,352,537 | ) | (39,756,726 | ) | (26,754,930 | ) | (45,920,701 | ) | ||||||||||||
Net Increase (Decrease) In Net Assets | (72,397,087 | ) | 138,909,102 | (50,202,545 | ) | (14,914,576 | ) | 47,759,166 | 3,462,427 | |||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 1,808,393,706 | 1,669,484,604 | 171,268,062 | 186,182,638 | 260,225,451 | 256,763,024 | ||||||||||||||||||
End of year | $ | 1,735,996,619 | $ | 1,808,393,706 | $ | 121,065,517 | $ | 171,268,062 | $ | 307,984,617 | $ | 260,225,451 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 61 |
Statements of Changes in Net Assets
Royce Special Equity Fund | Royce Total Return Fund | |||||||||||||||
Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | |||||||||||||
INVESTMENT OPERATIONS: Net investment income (loss) | $ | 14,493,483 | $ | 11,546,470 | $ | 21,768,475 | $ | 20,423,300 | ||||||||
Net realized gain (loss) on investments and foreign currency | 53,147,713 | 108,663,278 | 255,117,502 | 114,925,703 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (16,019,772 | ) | 16,963,326 | (248,636,152 | ) | 196,976,208 | ||||||||||
Net increase (decrease) in net assets from investment operations | 51,621,424 | 137,173,074 | 28,249,825 | 332,325,211 | ||||||||||||
DISTRIBUTIONS: Total distributable earnings | ||||||||||||||||
Investment Class | (24,875,767 | ) | (88,177,876 | ) | (163,088,384 | ) | (93,615,989 | ) | ||||||||
Service Class | (1,595,055 | ) | (6,161,502 | ) | (12,587,274 | ) | (6,498,298 | ) | ||||||||
Consultant Class | (513,029 | ) | (2,409,822 | ) | (18,324,601 | ) | (11,752,705 | ) | ||||||||
Institutional Class | (7,057,430 | ) | (20,029,031 | ) | (37,383,740 | ) | (21,255,144 | ) | ||||||||
R Class | (5,028,388 | ) | (2,882,429 | ) | ||||||||||||
Total distributions | (34,041,281 | ) | (116,778,231 | ) | (236,412,387 | ) | (136,004,565 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: Net capital share transactions | ||||||||||||||||
Investment Class | (128,578,387 | ) | (107,269,970 | ) | 9,353,382 | (141,611,166 | ) | |||||||||
Service Class | (15,238,819 | ) | (3,843,977 | ) | 3,463,014 | (17,455,317 | ) | |||||||||
Consultant Class | (6,046,446 | ) | (6,019,051 | ) | (19,183,979 | ) | (31,214,004 | ) | ||||||||
Institutional Class | 3,602,098 | (15,974,413 | ) | 5,823,751 | (12,344,314 | ) | ||||||||||
R Class | (1,232,394 | ) | (14,978,169 | ) | ||||||||||||
Shareholder redemption fees | ||||||||||||||||
Investment Class | 6,740 | 4,063 | 607 | 279 | ||||||||||||
Service Class | 1,954 | 920 | 17 | 10 | ||||||||||||
Net increase (decrease) in net assets from capital share transactions | (146,252,860 | ) | (133,102,428 | ) | (1,775,602 | ) | (217,602,681 | ) | ||||||||
Net Increase (Decrease) In Net Assets | (128,672,717 | ) | (112,707,585 | ) | (209,938,164 | ) | (21,282,035 | ) | ||||||||
NET ASSETS: | ||||||||||||||||
Beginning of year | 1,091,662,640 | 1,204,370,225 | 1,522,249,590 | 1,543,531,625 | ||||||||||||
End of year | $ | 962,989,923 | $ | 1,091,662,640 | $ | 1,312,311,426 | $ | 1,522,249,590 |
62 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Financial Highlights
This table is presented to show selected data for a share outstanding throughout each 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 | 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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 6.21 | $ | 0.07 | $ | 0.20 | $ | 0.27 | $ | (0.11 | ) | $ | (0.26 | ) | $ | (0.37 | ) | $ | 6.11 | 4.57 | % | $ | 53,421 | 1.26 | % | 1.26 | % | 1.09 | % | 1.27 | % | 4 | % | ||||||||||||||||||||||||||||
2019 | 5.56 | 0.09 | 1.58 | 1.67 | (0.10 | ) | (0.92 | ) | (1.02 | ) | 6.21 | 30.34 | 76,273 | 1.21 | 1.20 | 1.09 | 1.37 | 8 | |||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||
Royce Dividend Value Fund–Service Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 6.42 | $ | 0.06 | $ | 0.21 | $ | 0.27 | $ | (0.08 | ) | $ | (0.27 | ) | $ | (0.35 | ) | $ | 6.34 | 4.47 | % | $ | 19,687 | 1.60 | % | 1.60 | % | 1.34 | % | 1.02 | % | 4 | % | ||||||||||||||||||||||||||||
2019 | 5.73 | 0.08 | 1.61 | 1.69 | (0.06 | ) | (0.94 | ) | (1.00 | ) | 6.42 | 29.78 | 25,256 | 1.53 | 1.52 | 1.34 | 1.14 | 8 | |||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||
Royce Dividend Value Fund–Consultant Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 7.33 | $ | 0.02 | $ | 0.23 | $ | 0.25 | $ | (0.01 | ) | $ | (0.30 | ) | $ | (0.31 | ) | $ | 7.27 | 3.55 | % | $ | 1,228 | 3.32 | % | 3.32 | % | 2.09 | % | 0.30 | % | 4 | % | ||||||||||||||||||||||||||||
2019 | 6.53 | 0.03 | 1.85 | 1.88 | (0.01 | ) | (1.07 | ) | (1.08 | ) | 7.33 | 29.03 | 1,621 | 3.30 | 3.29 | 2.09 | 0.40 | 8 | |||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||
Royce Dividend Value Fund–Institutional Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 6.10 | $ | 0.07 | $ | 0.21 | $ | 0.28 | $ | (0.11 | ) | $ | (0.25 | ) | $ | (0.36 | ) | $ | 6.02 | 4.82 | % | $ | 776 | 3.75 | % | 3.75 | % | 1.09 | % | 1.27 | % | 4 | % | ||||||||||||||||||||||||||||
2019 | 5.48 | 0.15 | 1.48 | 1.63 | (0.11 | ) | (0.90 | ) | (1.01 | ) | 6.10 | 30.08 | 883 | 1.98 | 1.98 | 0.97 | 1.62 | 8 | |||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||
Royce Global Financial Services Fund–Service Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9.91 | $ | 0.07 | $ | 1.42 | $ | 1.49 | $ | (0.04 | ) | $ | (0.70 | ) | $ | (0.74 | ) | $ | 10.66 | 15.25 | % | $ | 25,919 | 1.88 | % | 1.88 | % | 1.49 | % | 0.80 | % | 4 | % | ||||||||||||||||||||||||||||
2019 | 8.18 | 0.10 | 1.87 | 1.97 | (0.15 | ) | (0.09 | ) | (0.24 | ) | 9.91 | 24.17 | 30,202 | 1.82 | 1.81 | 1.49 | 0.86 | 5 | |||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||
Royce Global Financial Services Fund–Institutional Class a | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 12.83 | $ | 0.10 | $ | 1.82 | $ | 1.92 | $ | (0.04 | ) | $ | (0.90 | ) | $ | (0.94 | ) | $ | 13.81 | 15.18 | % | $ | 7,746 | 1.67 | % | 1.67 | % | 1.49 | % | 0.81 | % | 4 | % | ||||||||||||||||||||||||||||
2019 | 10.55 | 0.14 | 2.42 | 2.56 | (0.16 | ) | (0.12 | ) | (0.28 | ) | 12.83 | 24.35 | 6,738 | 1.60 | 1.60 | 1.33 | 1.04 | 5 | |||||||||||||||||||||||||||||||||||||||||||
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 | 6,47 | 4 | 1.85 | 2 | 1.85 | 2 | 1.04 | 2 | 1.82 | 2 | 37 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 63 |
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 | 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 International Premier Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 15.25 | $ | 0.04 | $ | 2.40 | $ | 2.44 | $ | (0.05 | ) | $ | – | $ | (0.05 | ) | $ | 17.64 | 15.99 | % | $ | 486,378 | 1.26 | % | 1.26 | % | 1.19 | % | 0.30 | % | 21 | % | ||||||||||||||||||||||||
2019 | 11.39 | 0.11 | 3.82 | 3.93 | (0.07 | ) | – | (0.07 | ) | 15.25 | 34.49 | 360,623 | 1.26 | 1.26 | 1.18 | 0.74 | 40 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||
Royce International Premier Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 18.24 | $ | 0.01 | $ | 2.85 | $ | 2.86 | $ | – | $ | – | $ | – | $ | 21.10 | 15.68 | % | $ | 69,153 | 1.57 | % | 1.57 | % | 1.44 | % | 0.04 | % | 21 | % | ||||||||||||||||||||||||||
2019 | 13.61 | 0.10 | 4.57 | 4.67 | (0.04 | ) | – | (0.04 | ) | 18.24 | 34.29 | 71,350 | 1.58 | 1.58 | 1.41 | 0.63 | 40 | |||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||
Royce International Premier Fund–Consultant Class b | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 19.60 | $ | (0.13 | ) | $ | 3.03 | $ | 2.90 | $ | – | $ | – | $ | – | $ | 22.50 | 14.80 | % | $ | 9,182 | 2.42 | % | 2.41 | % | 2.19 | % | (0.70 | )% | 21 | % | |||||||||||||||||||||||||
2019 | 14.71 | (0.03 | ) | 4.92 | 4.89 | – | – | – | 19.60 | 33.24 | 9,894 | 2.41 | 2.41 | 2.18 | (0.17 | ) | 40 | |||||||||||||||||||||||||||||||||||||||
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 c | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 15.25 | $ | 0.06 | $ | 2.39 | $ | 2.45 | $ | (0.06 | ) | $ | – | $ | (0.06 | ) | $ | 17.64 | 16.12 | % | $ | 567,878 | 1.20 | % | 1.20 | % | 1.04 | % | 0.44 | % | 21 | % | ||||||||||||||||||||||||
2019 | 11.39 | (0.03 | ) | 3.98 | 3.95 | (0.09 | ) | – | (0.09 | ) | 15.25 | 34.68 | 366,870 | 1.19 | 1.19 | 1.04 | 0.57 | 40 | ||||||||||||||||||||||||||||||||||||||
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 Micro-Cap Fund–Investment Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 11.02 | $ | (0.05 | ) | $ | 2.71 | $ | 2.66 | $ | – | $ | (0.94 | ) | $ | (0.94 | ) | $ | 12.74 | 24.50 | % | $ | 174,339 | 1.29 | % | 1.29 | % | 1.24 | % | (0.46 | )% | 25 | % | |||||||||||||||||||||||
2019 | 9.35 | (0.05 | ) | 2.02 | 1.97 | – | (0.30 | ) | (0.30 | ) | 11.02 | 21.16 | 158,112 | 1.51 | 1.50 | 1.36 | (0.46 | ) | 21 | |||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||
Royce Micro-Cap Fund–Service Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 10.79 | $ | (0.07 | ) | $ | 2.65 | $ | 2.58 | $ | – | $ | (0.92 | ) | $ | (0.92 | ) | $ | 12.45 | 24.26 | % | $ | 168,285 | 1.60 | % | 1.60 | % | 1.49 | % | (0.71 | )% | 25 | % | |||||||||||||||||||||||
2019 | 9.15 | (0.01 | ) | 1.94 | 1.93 | – | (0.29 | ) | (0.29 | ) | 10.79 | 21.22 | 164,956 | 1.51 | 1.51 | 1.50 | (0.09 | ) | 21 | |||||||||||||||||||||||||||||||||||||
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 |
64 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Financial Highlights
This table is presented to show selected data for a share outstanding throughout each 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 | 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 Micro-Cap Fund–Consultant Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 8.42 | $ | (0.13 | ) | $ | 2.04 | $ | 1.91 | $ | – | $ | (0.71 | ) | $ | (0.71 | ) | $ | 9.62 | 23.04 | % | $ | 14,025 | 2.41 | % | 2.41 | % | 2.41 | % | (1.63 | )% | 25 | % | ||||||||||||||||||||||
2019 | 7.23 | (0.13 | ) | 1.55 | 1.42 | – | (0.23 | ) | (0.23 | ) | 8.42 | 19.72 | 14,204 | 2.59 | 2.59 | 2.58 | (1.69 | ) | 21 | ||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund–Investment Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 12.52 | $ | (0.03 | ) | $ | 3.35 | $ | 3.32 | $ | – | $ | – | $ | – | $ | 15.84 | 26.52 | % | $ | 786,849 | 1.24 | % | 1.23 | % | 1.23 | % | (0.28 | )% | 53 | % | ||||||||||||||||||||||||
2019 | 9.92 | (0.06 | ) | 2.86 | 2.80 | – | (0.20 | ) | (0.20 | ) | 12.52 | 28.21 | 609,316 | 1.23 | 1.22 | 1.22 | (0.50 | ) | 47 | ||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund–Service Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 11.61 | $ | (0.06 | ) | $ | 3.11 | $ | 3.05 | $ | – | $ | – | $ | – | $ | 14.66 | 26.27 | % | $ | 131,725 | 1.54 | % | 1.54 | % | 1.49 | % | (0.54 | )% | 53 | % | ||||||||||||||||||||||||
2019 | 9.23 | (0.09 | ) | 2.65 | 2.56 | – | (0.18 | ) | (0.18 | ) | 11.61 | 27.79 | 46,032 | 1.55 | 1.55 | 1.49 | (0.77 | ) | 47 | ||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund–Consultant Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 10.09 | $ | (0.14 | ) | $ | 2.66 | $ | 2.52 | $ | – | $ | – | $ | – | $ | 12.61 | 24.98 | % | $ | 13,477 | 2.45 | % | 2.45 | % | 2.45 | % | (1.50 | )% | 53 | % | ||||||||||||||||||||||||
2019 | 8.09 | (0.16 | ) | 2.32 | 2.16 | – | (0.16 | ) | (0.16 | ) | 10.09 | 26.70 | 8,621 | 2.41 | 2.41 | 2.41 | (1.67 | ) | 47 | ||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund–Institutional Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 12.80 | $ | (0.02 | ) | $ | 3.44 | $ | 3.42 | $ | – | $ | – | $ | – | $ | 16.22 | 26.72 | % | $ | 340,877 | 1.12 | % | 1.12 | % | 1.12 | % | (0.17 | )% | 53 | % | ||||||||||||||||||||||||
2019 | 10.13 | (0.05 | ) | 2.92 | 2.87 | – | (0.20 | ) | (0.20 | ) | 12.80 | 28.36 | 230,439 | 1.12 | 1.12 | 1.12 | (0.39 | ) | 47 | ||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||
Royce Opportunity Fund–R Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 11.16 | $ | (0.09 | ) | $ | 2.96 | $ | 2.87 | $ | – | $ | – | $ | – | $ | 14.03 | 25.72 | % | $ | 36,065 | 1.88 | % | 1.87 | % | 1.87 | % | (0.93 | )% | 53 | % | ||||||||||||||||||||||||
2019 | 8.90 | (0.12 | ) | 2.55 | 2.43 | – | (0.17 | ) | (0.17 | ) | 11.16 | 27.38 | 31,230 | 1.86 | 1.85 | 1.85 | (1.13 | ) | 47 | ||||||||||||||||||||||||||||||||||||
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 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual Report to Shareholders | 65 |
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 | 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–Investment Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9.44 | $ | 0.03 | $ | 1.29 | $ | 1.32 | $ | (0.06 | ) | $ | (0.46 | ) | $ | (0.52 | ) | $ | 10.24 | 14.08 | % | $ | 1,426,472 | 0.95 | % | 0.95 | % | 0.95 | % | 0.37 | % | 32 | % | ||||||||||||||||||||||
2019 | 7.75 | 0.04 | 2.01 | 2.05 | (0.02 | ) | (0.34 | ) | (0.36 | ) | 9.44 | 26.56 | 1,429,042 | 0.95 | 0.94 | 0.94 | 0.39 | 30 | |||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Royce Pennsylvania Mutual Fund–Service Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9.42 | $ | 0.02 | $ | 1.28 | $ | 1.30 | $ | (0.03 | ) | $ | (0.46 | ) | $ | (0.49 | ) | $ | 10.23 | 13.88 | % | $ | 78,789 | 1.25 | % | 1.24 | % | 1.13 | % | 0.23 | % | 32 | % | ||||||||||||||||||||||
2019 | 7.77 | (0.00 | ) | 2.00 | 2.00 | (0.01 | ) | (0.34 | ) | (0.35 | ) | 9.42 | 25.75 | 142,864 | 1.31 | 1.30 | 1.30 | (0.01 | ) | 30 | |||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Royce Pennsylvania Mutual Fund–Consultant Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 7.47 | $ | (0.04 | ) | $ | 1.00 | $ | 0.96 | $ | – | $ | (0.36 | ) | $ | (0.36 | ) | $ | 8.07 | 12.94 | % | $ | 238,595 | 1.96 | % | 1.96 | % | 1.96 | % | (0.64 | )% | 32 | % | ||||||||||||||||||||||
2019 | 6.18 | (0.04 | ) | 1.60 | 1.56 | – | (0.27 | ) | (0.27 | ) | 7.47 | 25.25 | 262,007 | 1.96 | 1.95 | 1.95 | (0.62 | ) | 30 | ||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||
Royce Pennsylvania Mutual Fund–Institutional Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9.47 | $ | 0.04 | $ | 1.28 | $ | 1.32 | $ | (0.06 | ) | $ | (0.46 | ) | $ | (0.52 | ) | $ | 10.27 | 14.10 | % | $ | 163,944 | 0.89 | % | 0.89 | % | 0.89 | % | 0.42 | % | 32 | % | ||||||||||||||||||||||
2019 | 7.78 | 0.04 | 2.02 | 2.06 | (0.03 | ) | (0.34 | ) | (0.37 | ) | 9.47 | 26.53 | 106,564 | 0.89 | 0.89 | 0.89 | 0.45 | 30 | |||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Royce Pennsylvania Mutual Fund–R Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 8.84 | $ | (0.04 | ) | $ | 1.19 | $ | 1.15 | $ | – | $ | (0.43 | ) | $ | (0.43 | ) | $ | 9.56 | 13.07 | % | $ | 8,121 | 1.83 | % | 1.83 | % | 1.83 | % | (0.51 | )% | 32 | % | ||||||||||||||||||||||
2019 | 7.30 | (0.03 | ) | 1.89 | 1.86 | – | (0.32 | ) | (0.32 | ) | 8.84 | 25.48 | 8,853 | 1.75 | 1.74 | 1.74 | (0.41 | ) | 30 | ||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||
Royce Premier Fund–Investment Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 12.88 | $ | 0.05 | $ | 1.41 | $ | 1.46 | $ | (0.12 | ) | $ | (0.63 | ) | $ | (0.75 | ) | $ | 13.59 | 11.50 | % | $ | 1,414,718 | 1.21 | % | 1.21 | % | 1.21 | % | 0.41 | % | 23 | % | ||||||||||||||||||||||
2019 | 11.62 | 0.05 | 3.87 | 3.92 | (0.05 | ) | (2.61 | ) | (2.66 | ) | 12.88 | 34.13 | 1,505,821 | 1.20 | 1.19 | 1.19 | 0.32 | 19 | |||||||||||||||||||||||||||||||||||||
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 |
66 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Financial Highlights
This table is presented to show selected data for a share outstanding throughout each 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 | 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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 12.54 | $ | 0.01 | $ | 1.37 | $ | 1.38 | $ | (0.09 | ) | $ | (0.61 | ) | $ | (0.70 | ) | $ | 13.22 | 11.16 | % | $ | 29,588 | 1.57 | % | 1.57 | % | 1.49 | % | 0.12 | % | 23 | % | ||||||||||||||||||||||
2019 | 11.31 | (0.01 | ) | 3.78 | 3.77 | – | (2.54 | ) | (2.54 | ) | 12.54 | 33.65 | 29,696 | 1.57 | 1.57 | 1.46 | (0.06 | ) | 19 | ||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||
Royce Premier Fund–Consultant Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 10.09 | $ | (0.07 | ) | $ | 1.09 | $ | 1.02 | $ | (0.02 | ) | $ | (0.49 | ) | $ | (0.51 | ) | $ | 10.60 | 10.19 | % | $ | 15,686 | 2.34 | % | 2.34 | % | 2.34 | % | (0.72 | )% | 23 | % | |||||||||||||||||||||
2019 | 9.17 | (0.10 | ) | 3.05 | 2.95 | – | (2.03 | ) | (2.03 | ) | 10.09 | 32.55 | 17,585 | 2.26 | 2.26 | 2.26 | (0.91 | ) | 19 | ||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||
Royce Premier Fund–Institutional Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 13.08 | $ | 0.05 | $ | 1.44 | $ | 1.49 | $ | (0.13 | ) | $ | (0.64 | ) | $ | (0.77 | ) | $ | 13.80 | 11.53 | % | $ | 266,587 | 1.15 | % | 1.15 | % | 1.15 | % | 0.44 | % | 23 | % | ||||||||||||||||||||||
2019 | 11.79 | 0.05 | 3.94 | 3.99 | (0.05 | ) | (2.65 | ) | (2.70 | ) | 13.08 | 34.23 | 244,343 | 1.15 | 1.15 | 1.15 | 0.33 | 19 | |||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Royce Premier Fund–R Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 11.86 | $ | (0.04 | ) | $ | 1.29 | $ | 1.25 | $ | (0.04 | ) | $ | (0.58 | ) | $ | (0.62 | ) | $ | 12.49 | 10.64 | % | $ | 9,418 | 1.95 | % | 1.95 | % | 1.95 | % | (0.33 | )% | 23 | % | |||||||||||||||||||||
2019 | 10.73 | (0.05 | ) | 3.57 | 3.52 | – | (2.39 | ) | (2.39 | ) | 11.86 | 33.17 | 10,949 | 1.90 | 1.90 | 1.90 | (0.43 | ) | 19 | ||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||
Royce Small-Cap Value Fund–Investment Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9.57 | $ | 0.06 | $ | (0.66 | ) | $ | (0.60 | ) | $ | (0.17 | ) | $ | (0.19 | ) | $ | (0.36 | ) | $ | 8.61 | (6.25 | )% | $ | 34,523 | 1.39 | % | 1.39 | % | 1.24 | % | 0.76 | % | 61 | % | ||||||||||||||||||||
2019 | 8.35 | 0.09 | 1.46 | 1.55 | (0.08 | ) | (0.25 | ) | (0.33 | ) | 9.57 | 18.60 | 53,234 | 1.30 | 1.30 | 1.24 | 0.84 | 64 | |||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Royce Small-Cap Value Fund–Service Class | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9.54 | $ | 0.04 | $ | (0.66 | ) | $ | (0.62 | ) | $ | (0.15 | ) | $ | (0.19 | ) | $ | (0.34 | ) | $ | 8.58 | (6.47 | )% | $ | 75,502 | 1.62 | % | 1.62 | % | 1.49 | % | 0.50 | % | 61 | % | ||||||||||||||||||||
2019 | 8.33 | 0.07 | 1.44 | 1.51 | (0.05 | ) | (0.25 | ) | (0.30 | ) | 9.54 | 18.21 | 102,465 | 1.56 | 1.55 | 1.49 | 0.65 | 64 | |||||||||||||||||||||||||||||||||||||
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 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual 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 | 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–Consultant Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 8.44 | $ | (0.05 | ) | $ | (0.60 | ) | $ | (0.65 | ) | $ | (0.06 | ) | $ | (0.16 | ) | $ | (0.22 | ) | $ | 7.57 | (7.71 | )% | $ | 3,899 | 2.74 | % | 2.73 | % | 2.73 | % | (0.71 | )% | 61 | % | |||||||||||
2019 | 7.40 | (0.04 | ) | 1.30 | 1.26 | – | (0.22 | ) | (0.22 | ) | 8.44 | 17.03 | 7,486 | 2.44 | 2.44 | 2.44 | (0.50 | ) | 64 | ||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||
Royce Small-Cap Value Fund–R Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9.16 | $ | (0.00 | ) | $ | (0.64 | ) | $ | (0.64 | ) | $ | (0.12 | ) | $ | (0.18 | ) | $ | (0.30 | ) | $ | 8.22 | (6.95 | )% | $ | 7,142 | 2.10 | % | 2.10 | % | 1.99 | % | (0.02 | )% | 61 | % | |||||||||||
2019 | 8.00 | 0.01 | 1.40 | 1.41 | (0.01 | ) | (0.24 | ) | (0.25 | ) | 9.16 | 17.68 | 8,083 | 1.98 | 1.98 | 1.97 | 0.11 | 64 | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||
Royce Smaller-Companies Growth Fund–Investment Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 8.21 | $ | (0.07 | ) | $ | 4.06 | $ | 3.99 | $ | – | $ | (1.14 | ) | $ | (1.14 | ) | $ | 11.06 | 49.61 | % | $ | 112,668 | 1.25 | % | 1.25 | % | 1.24 | % | (0.86 | )% | 61 | % | ||||||||||||||
2019 | 6.86 | (0.05 | ) | 1.68 | 1.63 | – | (0.28 | ) | (0.28 | ) | 8.21 | 23.92 | 91,670 | 1.25 | 1.24 | 1.24 | (0.69 | ) | 53 | ||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||
Royce Smaller-Companies Growth Fund–Service Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 7.99 | $ | (0.09 | ) | $ | 3.95 | $ | 3.86 | $ | – | $ | (1.11 | ) | $ | (1.11 | ) | $ | 10.74 | 49.26 | % | $ | 181,591 | 1.54 | % | 1.54 | % | 1.49 | % | (1.11 | )% | 61 | % | ||||||||||||||
2019 | 6.69 | (0.07 | ) | 1.65 | 1.58 | – | (0.28 | ) | (0.28 | ) | 7.99 | 23.67 | 154,236 | 1.55 | 1.54 | 1.49 | (0.93 | ) | 53 | ||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||
Royce Smaller-Companies Growth Fund–Consultant Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 6.81 | $ | (0.13 | ) | $ | 3.34 | $ | 3.21 | $ | – | $ | (0.94 | ) | $ | (0.94 | ) | $ | 9.08 | 48.05 | % | $ | 8,080 | 2.54 | % | 2.54 | % | 2.24 | % | (1.86 | )% | 61 | % | ||||||||||||||
2019 | 5.74 | (0.11 | ) | 1.42 | 1.31 | – | (0.24 | ) | (0.24 | ) | 6.81 | 22.85 | 6,298 | 2.52 | 2.51 | 2.11 | (1.71 | ) | 53 | ||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||
Royce Smaller-Companies Growth Fund–Institutional Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 8.33 | $ | (0.07 | ) | $ | 4.13 | $ | 4.06 | $ | – | $ | (1.16 | ) | $ | (1.16 | ) | $ | 11.23 | 49.70 | % | $ | 5,646 | 1.44 | % | 1.44 | % | 1.23 | % | (0.85 | )% | 61 | % | ||||||||||||||
2019 | 6.95 | (0.05 | ) | 1.72 | 1.67 | – | (0.29 | ) | (0.29 | ) | 8.33 | 24.10 | 8,021 | 1.35 | 1.35 | 1.17 | (0.62 | ) | 53 | ||||||||||||||||||||||||||||
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 |
68 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Financial Highlights
This table is presented to show selected data for a share outstanding throughout each 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 | 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–Investment Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 17.59 | $ | 0.27 | $ | 1.03 | $ | 1.30 | $ | (0.26 | ) | $ | (0.41 | ) | $ | (0.67 | ) | $ | 18.22 | 7.43 | % | $ | 702,556 | 1.23 | % | 1.23 | % | 1.23 | % | 1.68 | % | 39 | % | ||||||||||||||
2019 | 17.43 | 0.21 | 1.98 | 2.19 | (0.21 | ) | (1.82 | ) | (2.03 | ) | 17.59 | 12.63 | 819,015 | 1.21 | 1.21 | 1.21 | 0.99 | 20 | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||
Royce Special Equity Fund–Service Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 17.56 | $ | 0.24 | $ | 1.04 | $ | 1.28 | $ | (0.24 | ) | $ | (0.41 | ) | $ | (0.65 | ) | $ | 18.19 | 7.29 | % | $ | 46,671 | 1.60 | % | 1.60 | % | 1.39 | % | 1.49 | % | 39 | % | ||||||||||||||
2019 | 17.41 | 0.16 | 1.99 | 2.15 | (0.17 | ) | (1.83 | ) | (2.00 | ) | 17.56 | 12.40 | 60,070 | 1.58 | 1.58 | 1.39 | 0.80 | 20 | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||
Royce Special Equity Fund–Consultant Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 16.05 | $ | 0.09 | $ | 0.92 | $ | 1.01 | $ | (0.09 | ) | $ | (0.37 | ) | $ | (0.46 | ) | $ | 16.60 | 6.27 | % | $ | 18,852 | 2.31 | % | 2.31 | % | 2.31 | % | 0.59 | % | 39 | % | ||||||||||||||
2019 | 15.90 | (0.02 | ) | 1.82 | 1.80 | (0.00 | ) | (1.65 | ) | (1.65 | ) | 16.05 | 11.38 | 24,793 | 2.25 | 2.25 | 2.25 | (0.12 | ) | 20 | |||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||
Royce Special Equity Fund–Institutional Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 17.43 | $ | 0.30 | $ | 1.01 | $ | 1.31 | $ | (0.28 | ) | $ | (0.40 | ) | $ | (0.68 | ) | $ | 18.06 | 7.52 | % | $ | 194,911 | 1.15 | % | 1.15 | % | 1.15 | % | 1.84 | % | 39 | % | ||||||||||||||
2019 | 17.28 | 0.22 | 1.96 | 2.18 | (0.22 | ) | (1.81 | ) | (2.03 | ) | 17.43 | 12.65 | 187,785 | 1.14 | 1.14 | 1.14 | 1.04 | 20 | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||
Royce Total Return Fund–Investment Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 10.93 | $ | 0.17 | $ | 0.19 | $ | 0.36 | $ | (0.21 | ) | $ | (1.74 | ) | $ | (1.95 | ) | $ | 9.34 | 3.82 | % | $ | 893,868 | 1.24 | % | 1.24 | % | 1.24 | % | 1.88 | % | 61 | % | ||||||||||||||
2019 | 9.71 | 0.16 | 2.10 | 2.26 | (0.15 | ) | (0.89 | ) | (1.04 | ) | 10.93 | 23.45 | 1,026,074 | 1.21 | 1.21 | 1.21 | 1.42 | 21 | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||
Royce Total Return Fund–Service Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 11.27 | $ | 0.16 | $ | 0.18 | $ | 0.34 | $ | (0.19 | ) | $ | (1.80 | ) | $ | (1.99 | ) | $ | 9.62 | 3.51 | % | $ | 69,634 | 1.55 | % | 1.55 | % | 1.49 | % | 1.64 | % | 61 | % | ||||||||||||||
2019 | 9.97 | 0.13 | 2.16 | 2.29 | (0.08 | ) | (0.91 | ) | (0.99 | ) | 11.27 | 23.08 | 77,177 | 1.52 | 1.52 | 1.49 | 1.13 | 21 | |||||||||||||||||||||||||||||
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 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | The Royce Funds 2020 Annual 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 | 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–Consultant Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 11.31 | $ | 0.09 | $ | 0.18 | $ | 0.27 | $ | (0.03 | ) | $ | (1.80 | ) | $ | (1.83 | ) | $ | 9.75 | 2.76 | % | $ | 110,179 | 2.22 | % | 2.22 | % | 2.22 | % | 0.88 | % | 61 | % | ||||||||||||||
2019 | 10.02 | 0.05 | 2.17 | 2.22 | (0.02 | ) | (0.91 | ) | (0.93 | ) | 11.31 | 22.18 | 150,175 | 2.20 | 2.20 | 2.20 | 0.43 | 21 | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||
Royce Total Return Fund–Institutional Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 10.77 | $ | 0.18 | $ | 0.18 | $ | 0.36 | $ | (0.24 | ) | $ | (1.72 | ) | $ | (1.96 | ) | $ | 9.17 | 3.87 | % | $ | 208,605 | 1.13 | % | 1.13 | % | 1.13 | % | 1.98 | % | 61 | % | ||||||||||||||
2019 | 9.58 | 0.17 | 2.07 | 2.24 | (0.18 | ) | (0.87 | ) | (1.05 | ) | 10.77 | 23.59 | 232,479 | 1.13 | 1.13 | 1.13 | 1.49 | 21 | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||
Royce Total Return Fund–R Class | |||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 11.38 | $ | 0.12 | $ | 0.18 | $ | 0.30 | $ | (0.12 | ) | $ | (1.80 | ) | $ | (1.92 | ) | $ | 9.76 | 3.08 | % | $ | 30,027 | 1.89 | % | 1.88 | % | 1.88 | % | 1.23 | % | 61 | % | ||||||||||||||
2019 | 10.06 | 0.09 | 2.18 | 2.27 | (0.03 | ) | (0.92 | ) | (0.95 | ) | 11.38 | 22.66 | 36,345 | 1.85 | 1.84 | 1.84 | 0.76 | 21 | |||||||||||||||||||||||||||||
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 |
a The Class commenced operations on January 5, 2016.
b The Class commenced operations on February 26, 2016.
c The Class commenced operations on May 2, 2018.
70 | The Royce Funds 2020 Annual Report to Shareholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Summary of Significant Accounting Policies:
Royce Dividend Value Fund, Royce Global Financial Services Fund, Royce International Premier 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 eleven 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.”
Royce & Associates, LP, the Funds’ investment adviser, primarily conducts business using the name Royce Investment Partners (“Royce”). At December 31, 2020, officers, employees of Royce, Fund trustees, the Royce retirement plans and other affiliates owned more than 10% of the following Fund:
Royce Global Financial Services Fund 12%
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 and foreign securities that were fair valued 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.
The Royce Funds 2020 Annual Report to Shareholders | 71 |
Notes to Financial Statements (continued)
VALUATION OF INVESTMENTS (continued):
The following is a summary of the inputs used to value each Fund’s investments as of December 31, 2020. 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 | $ | 56,800,406 | $ | 16,768,679 | $ | – | $ | 73,569,085 | |||||
Repurchase Agreement | – | 1,314,454 | – | 1,314,454 | |||||||||
Royce Global Financial Services Fund | |||||||||||||
Common Stocks | 25,370,172 | 7,765,272 | – | 33,135,444 | |||||||||
Repurchase Agreement | – | 561,698 | – | 561,698 | |||||||||
Royce International Premier Fund | |||||||||||||
Common Stocks | 50,552,141 | 1,003,644,311 | – | 1,054,196,452 | |||||||||
Preferred Stocks | – | 21,065,692 | – | 21,065,692 | |||||||||
Repurchase Agreement | – | 57,608,157 | – | 57,608,157 | |||||||||
Royce Micro-Cap Fund | |||||||||||||
Common Stocks | 339,232,097 | 12,821,013 | 690,000 | 352,743,110 | |||||||||
Repurchase Agreement | – | 4,230,876 | – | 4,230,876 | |||||||||
Money Market Fund/Collateral Received for Securities Loaned | 1,299,188 | – | – | 1,299,188 | |||||||||
Royce Opportunity Fund | |||||||||||||
Common Stocks | 1,241,773,293 | 1,461,053 | – | 1,243,234,346 | |||||||||
Repurchase Agreement | – | 80,411,649 | – | 80,411,649 | |||||||||
Money Market Fund/Collateral Received for Securities Loaned | 5,268,397 | – | – | 5,268,397 | |||||||||
Royce Pennsylvania Mutual Fund | |||||||||||||
Common Stocks | 1,861,240,934 | 27,162,794 | 0 | 1,888,403,728 | |||||||||
Repurchase Agreement | – | 27,699,276 | – | 27,699,276 | |||||||||
Money Market Fund/Collateral Received for Securities Loaned | 21,820,570 | – | – | 21,820,570 | |||||||||
Royce Premier Fund | |||||||||||||
Common Stocks | 1,638,205,705 | 54,967,926 | – | 1,693,173,631 | |||||||||
Repurchase Agreement | – | 45,555,851 | – | 45,555,851 | |||||||||
Money Market Fund/Collateral Received for Securities Loaned | 21,146,208 | – | – | 21,146,208 | |||||||||
Royce Small-Cap Value Fund | |||||||||||||
Common Stocks | 118,671,768 | – | – | 118,671,768 | |||||||||
Repurchase Agreement | – | 1,955,624 | – | 1,955,624 | |||||||||
Royce Smaller-Companies Growth Fund | |||||||||||||
Common Stocks | 284,877,155 | 9,545,337 | – | 294,422,492 | |||||||||
Warrants | 89,991 | – | – | 89,991 | |||||||||
Repurchase Agreement | – | 14,322,595 | – | 14,322,595 | |||||||||
Money Market Fund/Collateral Received for Securities Loaned | 19,077,010 | – | – | 19,077,010 | |||||||||
Royce Special Equity Fund | |||||||||||||
Common Stocks | 721,424,529 | 60,582,060 | – | 782,006,589 | |||||||||
Repurchase Agreement | – | 182,027,632 | – | 182,027,632 | |||||||||
Royce Total Return Fund | |||||||||||||
Common Stocks | 1,252,187,087 | 35,315,596 | 506,127 | 1,288,008,810 | |||||||||
Preferred Stocks | 1,834,633 | – | – | 1,834,633 | |||||||||
Repurchase Agreement | – | 23,370,926 | – | 23,370,926 |
Level 3 Reconciliation:
BALANCE AS OF 12/31/19 | Transfers IN1 | SALES | REALIZED GAIN (LOSS) | UNREALIZED GAIN (LOSS)2 | BALANCE AS OF 12/31/20 | ||||||||||||||
Royce Micro-Cap Fund | |||||||||||||||||||
Common Stocks | $ | 828,000 | $ | – | $ | – | $ | – | $ | (138,000) | $ | 690,000 | |||||||
Royce Pennsylvania Mutual Fund | |||||||||||||||||||
Common Stocks | 0 | – | – | – | – | 0 | |||||||||||||
Royce Total Return Fund | |||||||||||||||||||
Common Stocks | 0 | 506,127 | – | – | �� | – | 506,127 |
1 | Transfers into Level 3 represent securities for which there were no longer readily available market quotations at December 31, 2020. |
2 | 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. |
72 | The Royce Funds 2020 Annual Report to Shareholders |
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 December 31, 2020 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, State Street Bank and Trust Company, to qualified institutional investors for the purpose of earning additional income. The lending agent receives and holds collateral from such borrowers to secure their obligations to the Funds. Such loans must be secured at all times by collateral in an amount at least equal to the market value of the loaned securities. The market values of the loaned securities and the collateral fluctuate and are determined at the close of each business day by the lending agent. Borrowers are required to post additional collateral to the lending agent on the next succeeding business day in the event of a collateral shortfall. Counterparty risk is further reduced by loaning securities only to parties that participate in a Global Securities Lending Program organized and monitored by the lending agent and that are deemed by it to satisfy its requirements and by having the lending agent enter into securities lending agreements with such borrowers. The lending agent is not affiliated with Royce.
Collateral may be in the form of cash or U.S. Treasuries. Cash collateral is invested in certain money market pooled investment vehicles. The Funds record a liability in their respective Statements of Assets and Liabilities for the return of such cash collateral during periods in which securities are on loan. The Funds bear the risk of loss for any decrease in the market value of the loaned securities or the investments purchased with cash collateral received from the borrowers.
Pursuant to the agreement in place between the Funds and the lending agent, if a borrower fails to return loaned securities, and the cash collateral being maintained by the lending agent on behalf of such 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 shall, at its option, either replace the loaned securities or pay the amount of the shortfall to the Funds. In the event of the bankruptcy of a 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. Pursuant to the agreement in place between the Funds and the lending agent, the Funds are responsible for any shortfall in the event the value of the investments purchased with cash collateral is insufficient to pay the rebate fee to the borrower.
The following table presents cash collateral and the market value of securities on loan collateralized by cash collateral held by the Funds at December 31, 2020:
CASH COLLATERAL1 | SECURITIES ON LOAN COLLATERALIZED BY CASH COLLATERAL | NET AMOUNT | ||||||||
Royce Micro-Cap Fund | $ | 1,299,188 | $ | (1,258,371 | ) | $ | 40,817 | |||
Royce Opportunity Fund | 5,268,397 | (5,164,429 | ) | 103,968 | ||||||
Royce Pennsylvania Mutual Fund | 21,820,570 | (20,875,888 | ) | 944,682 | ||||||
Royce Premier Fund | 21,146,208 | (20,484,908 | ) | 661,300 | ||||||
Royce Smaller-Companies Growth Fund | 19,077,010 | (18,521,632 | ) | 555,378 |
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. |
The Royce Funds 2020 Annual Report to Shareholders | 73 |
Notes to Financial Statements (continued)
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 December 31, 2020:
NON-CASH COLLATERAL | SECURITIES ON LOAN COLLATERALIZED BY NON-CASH COLLATERAL | NET AMOUNT | ||||||||||
Royce Micro-Cap Fund | $ | 13,240,896 | $ | (12,919,840 | ) | $ | 321,056 | |||||
Royce Opportunity Fund | 81,547,379 | (79,372,712 | ) | 2,174,667 | ||||||||
Royce Pennsylvania Mutual Fund | 32,178,341 | (31,323,612 | ) | 854,729 | ||||||||
Royce Premier Fund | 44,559,184 | (43,651,039 | ) | 908,145 | ||||||||
Royce Small-Cap Value Fund | 597,523 | (570,629 | ) | 26,894 | ||||||||
Royce Smaller-Companies Growth Fund | 25,789,207 | (25,122,553 | ) | 666,654 |
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 may be subject to a tax imposed on 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.
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.
74 | The Royce Funds 2020 Annual Report to Shareholders
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 8, 2021. 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 variable rate equal to the Applicable Rate plus the Applicable Margin. The term Applicable Rate means, for any day, a rate equal to the sum of (a) 0.10%, plus (b) the higher of (i) the Federal Funds Effective Rate for such day, or (ii) the Overnight Bank Funding Rate for such day. The term Applicable Margin means 1.25%. The Funds did not utilize the line of credit during the year ended December 31, 2020.
Capital Share Transactions (in dollars):
SHARES SOLD | SHARES ISSUED FOR REINVESTMENT OF DISTRIBUTIONS | SHARES REDEEMED | NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS | |||||||||||||||||||||||||||||
Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | |||||||||||||||||||||||||
Royce Dividend Value Fund | ||||||||||||||||||||||||||||||||
Investment Class | $ | 7,191,951 | $ | 14,951,419 | $ | 2,949,058 | $ | 9,876,525 | $ | (28,741,034 | ) | $ | (47,719,779 | ) | $ | (18,600,025 | ) | $ | (22,891,835 | ) | ||||||||||||
Service Class | 644,642 | 1,022,313 | 948,324 | 3,110,695 | (6,078,959 | ) | (10,738,924 | ) | (4,485,993 | ) | (6,605,916 | ) | ||||||||||||||||||||
Consultant Class | 11,980 | 60,887 | 46,021 | 200,251 | (378,765 | ) | (162,101 | ) | (320,764 | ) | 99,037 | |||||||||||||||||||||
Institutional Class | 185,589 | 110,655 | 44,783 | 134,514 | (260,490 | ) | (2,746,094 | ) | (30,118 | ) | (2,500,925 | ) | ||||||||||||||||||||
Royce Global Financial Services Fund | ||||||||||||||||||||||||||||||||
Service Class | 3,804,511 | 3,520,923 | 1,530,984 | 664,311 | (10,742,359 | ) | (12,322,355 | ) | (5,406,864 | ) | (8,137,121 | ) | ||||||||||||||||||||
Institutional Class | – | – | 490,704 | 144,374 | (12,598 | ) | (1,686,897 | ) | 478,106 | (1,542,523 | ) | |||||||||||||||||||||
Royce International Premier Fund | ||||||||||||||||||||||||||||||||
Investment Class | 204,010,079 | 218,606,733 | 916,927 | 1,179,927 | (149,175,342 | ) | (246,907,254 | ) | 55,751,664 | (27,120,594 | ) | |||||||||||||||||||||
Service Class | 26,685,353 | 34,586,615 | – | 111,744 | (37,653,405 | ) | (15,473,257 | ) | (10,968,052 | ) | 19,225,102 | |||||||||||||||||||||
Consultant Class | 576,990 | 1,130,565 | – | – | (2,303,772 | ) | (2,397,190 | ) | (1,726,782 | ) | (1,266,625 | ) | ||||||||||||||||||||
Institutional Class | 187,478,073 | 305,727,657 | 1,123,513 | 1,133,061 | (64,694,078 | ) | (13,401,239 | ) | 123,907,508 | 293,459,479 | ||||||||||||||||||||||
Royce Micro-Cap Fund | ||||||||||||||||||||||||||||||||
Investment Class | 7,333,691 | 6,921,267 | 11,024,344 | 3,856,739 | (23,791,270 | ) | (41,269,310 | ) | (5,433,235 | ) | (30,491,304 | ) | ||||||||||||||||||||
Service Class | 2,833,711 | 3,725,977 | 11,018,041 | 4,187,631 | (28,817,547 | ) | (23,523,510 | ) | (14,965,795 | ) | (15,609,902 | ) | ||||||||||||||||||||
Consultant Class | 215,088 | 68,408 | 907,664 | 356,880 | (2,739,012 | ) | (5,330,844 | ) | (1,616,260 | ) | (4,905,556 | ) | ||||||||||||||||||||
Royce Opportunity Fund | ||||||||||||||||||||||||||||||||
Investment Class | 171,205,300 | 63,473,524 | – | 8,305,468 | (146,632,037 | ) | (176,167,512 | ) | 24,573,263 | (104,388,520 | ) | |||||||||||||||||||||
Service Class | 74,701,884 | 9,904,077 | – | 662,956 | (18,878,148 | ) | (24,568,043 | ) | 55,823,736 | (14,001,010 | ) | |||||||||||||||||||||
Consultant Class | 4,354,940 | 565,245 | – | 121,025 | (2,009,384 | ) | (4,010,231 | ) | 2,345,556 | (3,323,961 | ) | |||||||||||||||||||||
Institutional Class | 159,214,915 | 39,658,834 | – | 2,972,533 | (119,168,031 | ) | (94,011,324 | ) | 40,046,884 | (51,379,957 | ) | |||||||||||||||||||||
R Class | 5,428,658 | 2,947,587 | – | 483,977 | (8,263,137 | ) | (5,140,864 | ) | (2,834,479 | ) | (1,709,300 | ) | ||||||||||||||||||||
Royce Pennsylvania Mutual Fund | ||||||||||||||||||||||||||||||||
Investment Class | 129,712,233 | 65,649,301 | 62,415,440 | 48,352,103 | (280,753,528 | ) | (235,860,344 | ) | (88,625,855 | ) | (121,858,940 | ) | ||||||||||||||||||||
Service Class | 11,914,461 | 4,005,041 | 3,351,244 | 4,949,810 | (78,783,903 | ) | (29,820,476 | ) | (63,518,198 | ) | (20,865,625 | ) | ||||||||||||||||||||
Consultant Class | 4,275,481 | 5,577,749 | 9,558,258 | 8,757,411 | (49,044,206 | ) | (58,349,924 | ) | (35,210,467 | ) | (44,014,764 | ) | ||||||||||||||||||||
Institutional Class | 66,450,769 | 31,436,891 | 7,982,989 | 4,025,072 | (31,062,664 | ) | (31,308,732 | ) | 43,371,094 | 4,153,231 | ||||||||||||||||||||||
R Class | 762,130 | 1,063,963 | 345,260 | 314,800 | (2,294,846 | ) | (4,419,335 | ) | (1,187,456 | ) | (3,040,572 | ) | ||||||||||||||||||||
Royce Premier Fund | ||||||||||||||||||||||||||||||||
Investment Class | 180,850,254 | 144,090,535 | 61,454,622 | 225,067,779 | (387,040,459 | ) | (439,926,763 | ) | (144,735,583 | ) | (70,768,449 | ) | ||||||||||||||||||||
Service Class | 8,349,210 | 8,630,787 | 1,387,591 | 4,715,600 | (11,085,656 | ) | (31,593,962 | ) | (1,348,855 | ) | (18,247,575 | ) | ||||||||||||||||||||
Consultant Class | 779,765 | 832,801 | 689,259 | 2,925,141 | (3,774,843 | ) | (10,675,841 | ) | (2,305,819 | ) | (6,917,899 | ) | ||||||||||||||||||||
Institutional Class | 87,405,548 | 105,506,582 | 13,980,733 | 41,651,701 | (100,897,299 | ) | (124,308,550 | ) | 488,982 | 22,849,733 | ||||||||||||||||||||||
R Class | 597,038 | 495,012 | 449,228 | 1,855,165 | (2,802,246 | ) | (2,304,581 | ) | (1,755,980 | ) | 45,596 | |||||||||||||||||||||
Royce Small-Cap Value Fund | ||||||||||||||||||||||||||||||||
Investment Class | 3,457,167 | 4,471,832 | 1,216,083 | 1,639,034 | (15,806,198 | ) | (16,727,594 | ) | (11,132,948 | ) | (10,616,728 | ) | ||||||||||||||||||||
Service Class | 2,271,024 | 2,929,944 | 2,650,395 | 2,948,814 | (18,681,676 | ) | (30,319,122 | ) | (13,760,257 | ) | (24,440,364 | ) | ||||||||||||||||||||
Consultant Class | 248,256 | 148,760 | 112,639 | 184,165 | (2,586,024 | ) | (3,715,543 | ) | (2,225,129 | ) | (3,382,618 | ) | ||||||||||||||||||||
R Class | 1,341,968 | 931,036 | 253,771 | 220,872 | (1,830,036 | ) | (2,468,954 | ) | (234,297 | ) | (1,317,046 | ) |
The Royce Funds 2020 Annual Report to Shareholders | 75
Notes to Financial Statements (continued)
Capital Share Transactions (in dollars) (continued):
SHARES SOLD | SHARES ISSUED FOR REINVESTMENT OF DISTRIBUTIONS | SHARES REDEEMED | NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS | |||||||||||||||||||||||||||||
Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | |||||||||||||||||||||||||
Royce Smaller-Companies Growth Fund | ||||||||||||||||||||||||||||||||
Investment Class | $ | 4,059,712 | $ | 6,186,917 | $ | 8,872,763 | $ | 2,606,452 | $ | (19,744,579 | ) | $ | (21,419,943 | ) | $ | (6,812,104 | ) | $ | (12,626,574 | ) | ||||||||||||
Service Class | 4,157,959 | 4,934,901 | 16,456,391 | 5,048,550 | (36,694,110 | ) | (41,546,389 | ) | (16,079,760 | ) | (31,562,938 | ) | ||||||||||||||||||||
Consultant Class | 72,295 | 25,144 | 730,139 | 208,839 | (877,865 | ) | (1,414,126 | ) | (75,431 | ) | (1,180,143 | ) | ||||||||||||||||||||
Institutional Class | 648,706 | 477,056 | 520,741 | 241,367 | (4,957,343 | ) | (1,270,060 | ) | (3,787,896 | ) | (551,637 | ) | ||||||||||||||||||||
Royce Special Equity Fund | ||||||||||||||||||||||||||||||||
Investment Class | 175,354,994 | 131,799,238 | 21,056,949 | 75,485,588 | (324,990,330 | ) | (314,554,796 | ) | (128,578,387 | ) | (107,269,970 | ) | ||||||||||||||||||||
Service Class | 20,262,269 | 13,920,271 | 1,314,464 | 5,811,061 | (36,815,552 | ) | (23,575,309 | ) | (15,238,819 | ) | (3,843,977 | ) | ||||||||||||||||||||
Consultant Class | 748,171 | 713,644 | 454,137 | 2,162,200 | (7,248,754 | ) | (8,894,895 | ) | (6,046,446 | ) | (6,019,051 | ) | ||||||||||||||||||||
Institutional Class | 173,759,435 | 85,607,154 | 4,804,761 | 17,428,965 | (174,962,098 | ) | (119,010,532 | ) | 3,602,098 | (15,974,413 | ) | |||||||||||||||||||||
Royce Total Return Fund | ||||||||||||||||||||||||||||||||
Investment Class | 152,290,416 | 116,694,245 | 141,179,953 | 78,223,473 | (284,116,987 | ) | (336,528,884 | ) | 9,353,382 | (141,611,166 | ) | |||||||||||||||||||||
Service Class | 18,551,062 | 11,398,903 | 11,684,426 | 5,938,201 | (26,772,474 | ) | (34,792,421 | ) | 3,463,014 | (17,455,317 | ) | |||||||||||||||||||||
Consultant Class | 2,633,113 | 3,348,914 | 16,711,733 | 10,654,155 | (38,528,825 | ) | (45,217,073 | ) | (19,183,979 | ) | (31,214,004 | ) | ||||||||||||||||||||
Institutional Class | 75,965,309 | 101,415,320 | 35,429,144 | 20,099,865 | (105,570,702 | ) | (133,859,499 | ) | 5,823,751 | (12,344,314 | ) | |||||||||||||||||||||
R Class | 3,797,612 | 5,018,902 | 5,028,346 | 2,882,429 | (10,058,352 | ) | (22,879,500 | ) | (1,232,394 | ) | (14,978,169 | ) |
Capital Share Transactions (in shares):
SHARES SOLD | SHARES ISSUED FOR REINVESTMENT OF DISTRIBUTIONS | SHARES REDEEMED | NET INCREASE (DECREASE) IN SHARES OUTSTANDING | |||||||||||||||||||||||||||||
Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | |||||||||||||||||||||||||
Royce Dividend Value Fund | ||||||||||||||||||||||||||||||||
Investment Class | 1,491,917 | 2,364,642 | 505,159 | 1,614,615 | (5,548,817 | ) | (7,517,404 | ) | (3,551,741 | ) | (3,538,147 | ) | ||||||||||||||||||||
Service Class | 110,691 | 151,423 | 155,513 | 488,966 | (1,092,901 | ) | (1,617,085 | ) | (826,697 | ) | (976,696 | ) | ||||||||||||||||||||
Consultant Class | 1,626 | 8,708 | 6,502 | 27,613 | (60,476 | ) | (21,585 | ) | (52,348 | ) | 14,736 | |||||||||||||||||||||
Institutional Class | 35,276 | 17,296 | 7,729 | 22,238 | (58,716 | ) | (444,665 | ) | (15,711 | ) | (405,131 | ) | ||||||||||||||||||||
Royce Global Financial Services Fund | ||||||||||||||||||||||||||||||||
Service Class | 404,322 | 385,405 | 148,495 | 68,840 | (1,167,633 | ) | (1,331,073 | ) | (614,816 | ) | (876,828 | ) | ||||||||||||||||||||
Institutional Class | – | – | 36,729 | 11,559 | (962 | ) | (145,047 | ) | 35,767 | (133,488 | ) | |||||||||||||||||||||
Royce International Premier Fund | ||||||||||||||||||||||||||||||||
Investment Class | 14,592,460 | 16,346,057 | 54,906 | 79,349 | (10,718,019 | ) | (17,814,511 | ) | 3,929,347 | (1,389,105 | ) | |||||||||||||||||||||
Service Class | 1,574,067 | 2,205,839 | – | 6,285 | (2,208,142 | ) | (968,096 | ) | (634,075 | ) | 1,244,028 | |||||||||||||||||||||
Consultant Class | 30,314 | 66,520 | – | – | (127,076 | ) | (142,639 | ) | (96,762 | ) | (76,119 | ) | ||||||||||||||||||||
Institutional Class | 12,732,043 | 22,112,617 | 67,236 | 76,198 | (4,668,427 | ) | (972,608 | ) | 8,130,852 | 21,216,207 | ||||||||||||||||||||||
Royce Micro-Cap Fund | ||||||||||||||||||||||||||||||||
Investment Class1 | 796,798 | 5,534,664 | 899,213 | 359,770 | (2,365,898 | ) | (4,056,845 | ) | (669,887 | ) | 1,837,589 | |||||||||||||||||||||
Service Class1 | 296,175 | 16,336,340 | 919,703 | 399,583 | (2,986,275 | ) | (2,331,513 | ) | (1,770,397 | ) | 14,404,410 | |||||||||||||||||||||
Consultant Class | 25,771 | 8,631 | 98,020 | 43,522 | (353,855 | ) | (671,085 | ) | (230,064 | ) | (618,932 | ) | ||||||||||||||||||||
Royce Opportunity Fund | ||||||||||||||||||||||||||||||||
Investment Class2 | 14,661,281 | 7,115,781 | – | 671,420 | (13,657,249 | ) | (15,254,758 | ) | 1,004,032 | (7,467,557 | ) | |||||||||||||||||||||
Service Class | 6,849,928 | 933,331 | – | 57,799 | (1,826,392 | ) | (2,315,305 | ) | 5,023,536 | (1,324,175 | ) | |||||||||||||||||||||
Consultant Class | 454,655 | 59,509 | – | 12,127 | (240,344 | ) | (432,321 | ) | 214,311 | (360,685 | ) | |||||||||||||||||||||
Institutional Class | 13,611,720 | 3,422,144 | – | 234,983 | (10,590,136 | ) | (8,081,501 | ) | 3,021,584 | (4,424,374 | ) | |||||||||||||||||||||
R Class | 565,983 | 290,546 | – | 43,878 | (793,591 | ) | (495,232 | ) | (227,608 | ) | (160,808 | ) | ||||||||||||||||||||
Royce Pennsylvania Mutual Fund | ||||||||||||||||||||||||||||||||
Investment Class3 | 15,208,886 | 17,135,747 | 6,235,307 | 5,187,994 | (33,501,741 | ) | (26,216,826 | ) | (12,057,548 | ) | (3,893,085 | ) | ||||||||||||||||||||
Service Class3 | 1,396,869 | 13,777,776 | 335,124 | 531,666 | (9,188,921 | ) | (3,294,387 | ) | (7,456,928 | ) | 11,015,055 | |||||||||||||||||||||
Consultant Class3 | 641,767 | 1,758,010 | 1,211,439 | 1,186,641 | (7,355,627 | ) | (8,156,766 | ) | (5,502,421 | ) | (5,212,115 | ) | ||||||||||||||||||||
Institutional Class | 7,639,708 | 3,448,798 | 795,118 | 430,489 | (3,728,269 | ) | (3,415,712 | ) | 4,706,557 | 463,575 | ||||||||||||||||||||||
R Class | 101,253 | 129,815 | 36,926 | 36,060 | (290,280 | ) | (536,743 | ) | (152,101 | ) | (370,868 | ) | ||||||||||||||||||||
Royce Premier Fund | ||||||||||||||||||||||||||||||||
Investment Class | 16,310,049 | 10,661,184 | 4,620,630 | 17,749,825 | (33,679,066 | ) | (31,948,702 | ) | (12,748,387 | ) | (3,537,693 | ) | ||||||||||||||||||||
Service Class | 750,092 | 643,620 | 107,233 | 382,139 | (986,464 | ) | (2,349,430 | ) | (129,139 | ) | (1,323,671 | ) | ||||||||||||||||||||
Consultant Class | 85,497 | 81,778 | 66,403 | 294,280 | (414,639 | ) | (963,591 | ) | (262,739 | ) | (587,533 | ) | ||||||||||||||||||||
Institutional Class | 7,594,039 | 7,151,202 | 1,035,610 | 3,236,340 | (7,985,684 | ) | (8,470,440 | ) | 643,965 | 1,917,102 | ||||||||||||||||||||||
R Class | 57,807 | 38,838 | 36,732 | 158,833 | (263,346 | ) | (180,025 | ) | (168,807 | ) | 17,646 |
76 | The Royce Funds 2020 Annual Report to Shareholders
Capital Share Transactions (in shares) (continued):
SHARES SOLD | SHARES ISSUED FOR REINVESTMENT OF DISTRIBUTIONS | SHARES REDEEMED | NET INCREASE (DECREASE) IN SHARES OUTSTANDING | |||||||||||||||||||||||||||||
Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | Year Ended 12/31/20 | Year Ended 12/31/19 | |||||||||||||||||||||||||
Royce Small-Cap Value Fund | ||||||||||||||||||||||||||||||||
Investment Class | 506,019 | 491,082 | 143,745 | 172,712 | (2,203,807 | ) | (1,856,300 | ) | (1,554,043 | ) | (1,192,506 | ) | ||||||||||||||||||||
Service Class | 330,143 | 316,985 | 314,400 | 311,714 | (2,585,606 | ) | (3,327,197 | ) | (1,941,063 | ) | (2,698,498 | ) | ||||||||||||||||||||
Consultant Class | 38,081 | 18,053 | 15,140 | 21,977 | (425,583 | ) | (455,254 | ) | (372,362 | ) | (415,224 | ) | ||||||||||||||||||||
R Class | 207,737 | 107,199 | 31,408 | 24,298 | (252,973 | ) | (280,913 | ) | (13,828 | ) | (149,416 | ) | ||||||||||||||||||||
Royce Smaller-Companies Growth Fund | ||||||||||||||||||||||||||||||||
Investment Class | 490,453 | 795,238 | 858,101 | 324,589 | (2,323,038 | ) | (2,675,412 | ) | (974,484 | ) | (1,555,585 | ) | ||||||||||||||||||||
Service Class | 481,738 | 631,242 | 1,639,083 | 646,422 | (4,507,093 | ) | (5,305,904 | ) | (2,386,272 | ) | (4,028,240 | ) | ||||||||||||||||||||
Consultant Class | 10,070 | 3,867 | 86,000 | 31,357 | (131,084 | ) | (212,170 | ) | (35,014 | ) | (176,946 | ) | ||||||||||||||||||||
Institutional Class | 75,338 | 58,868 | 49,642 | 29,615 | (584,614 | ) | (156,168 | ) | (459,634 | ) | (67,685 | ) | ||||||||||||||||||||
Royce Special Equity Fund | ||||||||||||||||||||||||||||||||
Investment Class | 10,858,599 | 7,136,926 | 1,158,248 | 4,308,538 | (20,023,301 | ) | (17,035,695 | ) | (8,006,454 | ) | (5,590,231 | ) | ||||||||||||||||||||
Service Class | 1,282,416 | 759,604 | 72,382 | 332,061 | (2,209,225 | ) | (1,272,328 | ) | (854,427 | ) | (180,663 | ) | ||||||||||||||||||||
Consultant Class | 50,624 | 42,622 | 27,391 | 135,137 | (487,054 | ) | (534,211 | ) | (409,039 | ) | (356,452 | ) | ||||||||||||||||||||
Institutional Class | 11,083,103 | 4,577,817 | 266,635 | 1,003,395 | (11,328,678 | ) | (6,517,702 | ) | 21,060 | (936,490 | ) | |||||||||||||||||||||
Royce Total Return Fund | ||||||||||||||||||||||||||||||||
Investment Class | 17,443,229 | 10,644,890 | 15,382,416 | 7,198,720 | (30,941,230 | ) | (30,673,054 | ) | 1,884,415 | (12,829,444 | ) | |||||||||||||||||||||
Service Class | 1,967,665 | 1,033,705 | 1,235,560 | 530,268 | (2,812,704 | ) | (3,078,129 | ) | 390,521 | (1,514,156 | ) | |||||||||||||||||||||
Consultant Class | 294,027 | 297,041 | 1,743,701 | 945,606 | (4,014,620 | ) | (3,993,278 | ) | (1,976,892 | ) | (2,750,631 | ) | ||||||||||||||||||||
Institutional Class | 7,809,989 | 9,223,771 | 3,929,141 | 1,874,917 | (10,576,324 | ) | (12,289,410 | ) | 1,162,806 | (1,190,722 | ) | |||||||||||||||||||||
R Class | 418,932 | 447,819 | 524,317 | 254,355 | (1,061,005 | ) | (1,996,603 | ) | (117,756 | ) | (1,294,429 | ) |
1 | Includes shares issued in connection with the merger of Royce Low-Priced Stock Fund (4,874,935 for Investment Class and 15,964,843 for Service Class) for the year ended 12/31/19. |
2 | Includes shares issued in connection with the merger of Royce Micro-Cap Opportunity Fund (1,587,186 for Investment Class) for the year ended 12/31/19. |
Investment Adviser and Distributor:
INVESTMENT ADVISER:
On July 31, 2020, Franklin Resources, Inc. (“Franklin Resources”) acquired Legg Mason, Inc. in an all-cash transaction. As a result of the transaction, Royce, the investment adviser to each Fund, became an indirect, majority-owned subsidiary of Franklin Resources. Under the Investment Company Act of 1940 (the “1940 Act”), consummation of the transaction automatically terminated each Fund’s investment advisory agreement with Royce that was in place prior to the transaction (each referred to herein as a “Prior Agreement”).
The shareholders of each of Royce Dividend Value Fund, Royce Global Financial Services Fund, Royce Opportunity Fund, Royce Pennsylvania Mutual Fund, Royce Premier Fund, Royce Small-Cap Value Fund and Royce Special Equity Fund (each, an “Initial Approving Fund” and collectively, the “Initial Approving Funds”) approved a new investment advisory agreement with Royce (each referred to herein as a “New Agreement”) in accordance with the requirements of the 1940 Act at special meetings of their respective shareholders held prior to the completion of the transaction. Each New Agreement went into effect with respect to the corresponding Initial Approving Fund upon completion of the transaction.
Because the shareholders of each of Royce International Premier Fund, Royce Micro-Cap Fund, Royce Smaller-Companies Growth Fund and Royce Total Return Fund (each, a “Subsequent Approving Fund” and collectively, the “Subsequent Approving Funds”) did not approve a New Agreement in accordance with the requirements of the 1940 Act prior to the completion of the transaction, an interim investment advisory agreement between each Subsequent Approving Fund and Royce (the “Interim Agreement”) went into effect upon the closing of the transaction. Each Interim Agreement, which was approved by the Board of Trustees of The Royce Fund, allowed Royce to continue providing services to the corresponding Subsequent Approving Fund for another 150 days while such Funds continued to seek shareholder approval of its New Agreement. The material terms of each Interim Agreement, including the contractual investment advisory fee rate thereunder for the relevant Subsequent Approving Fund, were identical to those of the corresponding Prior Agreement. Pursuant to each Interim Agreement, investment advisory fees payable by the relevant Subsequent Approving Fund were deposited to an escrow account rather than paid directly to Royce.
Shareholders of the Subsequent Approving Funds approved the corresponding New Agreements in accordance with the requirements of the 1940 Act at special meetings of their respective shareholders held on August 31, 2020 and September 11, 2020. Each Interim Agreement terminated, and the corresponding New Agreement went into effect, upon completion of the relevant meeting.
The terms and conditions of each New Agreement are substantially identical to those of the corresponding Prior Agreement. Each Fund’s contractual investment advisory fee rate under its New Agreement did not change from the corresponding Prior Agreement. Any investment advisory fees that were deposited to an escrow account under an Interim Agreement were paid to Royce.
The Royce Funds 2020 Annual Report to Shareholders | 77
Notes to Financial Statements (continued)
INVESTMENT ADVISER (continued):
Royce has continued to operate as an independent investment organization with its own brand after completion of the transaction. There have been no changes to the management or investment teams at Royce as a result of the transaction.
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, 2021, and is shown below to the extent that it impacted net expenses for the year ended December 31, 2020. See the Prospectus for contractual waiver expiration dates.
ANNUAL CONTRACTUAL ADVISORY FEE AS A | COMMITTED NET ANNUAL OPERATING EXPENSE RATIO CAP3 | YEAR ENDED DECEMBER 31, 2020 | ||||||||||||||||
PERCENTAGE OF AVERAGE NET ASSETS1 | Investment Class3 | Service Class3 | Consultant Class3 | Institutional Class3 | R Class3 | Net advisory fees | Advisory fees waived | |||||||||||
Royce Dividend Value Fund | 0.85% | 1.09% | 1.34% | 2.09% | 1.09% | N/A | $ | 657,615 | $ | – | ||||||||
Royce Global Financial Services Fund | 1.00% | N/A | 1.49% | N/A | 1.49% | N/A | 312,578 | – | ||||||||||
Royce International Premier Fund | 1.00% | 1.19% | 1.44% | 2.19% | 1.04% | N/A | 8,119,678 | 604,622 | ||||||||||
Royce Micro-Cap Fund | 1.00% | 1.24% | 1.49% | N/A | N/A | N/A | 2,875,184 | – | ||||||||||
Royce Opportunity Fund | 1.00% | N/A | 1.49% | N/A | N/A | N/A | 8,376,701 | – | ||||||||||
Royce Pennsylvania Mutual Fund | 0.76%2 | N/A | N/A | N/A | N/A | N/A | 12,464,882 | – | ||||||||||
Royce Premier Fund | 1.00% | N/A | 1.49% | N/A | N/A | N/A | 15,499,282 | – | ||||||||||
Royce Small-Cap Value Fund | 1.00% | 1.24% | 1.49% | N/A | N/A | 1.99% | 1,162,272 | – | ||||||||||
Royce Smaller-Companies Growth Fund | 1.00% | 1.24% | 1.49% | 2.24% | 1.24%4 | N/A | 2,415,038 | – | ||||||||||
Royce Special Equity Fund | 1.00% | N/A | 1.39% | N/A | N/A5 | N/A | 8,631,588 | – | ||||||||||
Royce Total Return Fund | 1.00% | 1.24% | 1.49% | N/A | N/A | N/A | 12,277,706 | – |
1 | From a base annual rate of 1.00% (0.85% for Royce Dividend Value 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 Pennsylvania Mutual Fund's fees are calculated at the annual rate of 1.00% of the first $50 million of the Fund's average net assets, 0.875% of the next $50 million of average net assets and 0.75% of average net assets in excess of $100 million. |
3 | Committed net annual operating expense ratio cap excludes acquired fund fees and expenses. |
4 | Royce Smaller-Companies Growth Fund's committed net annual operating expense ratio cap was increased from 1.21% to 1.24% for Institutional Class, effective May 1, 2020. |
5 | Royce Special Equity Fund's committed net annual operating expense ratio cap is 1.15% for Institutional Class, effective July 1, 2020. |
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 PERCENTAGE OF | YEAR ENDED DECEMBER 31, 2020 | ||||||||||
AVERAGE NET ASSETS | Net distribution fees | Distribution fees waived | |||||||||
Royce Dividend Value Fund – Service Class | 0.25% | $ | 47,900 | $ | – | ||||||
Royce Dividend Value Fund – Consultant Class | 1.00% | 11,948 | – | ||||||||
Royce Global Financial Services Fund – Service Class | 0.25% | 54,768 | 7,468 | ||||||||
Royce International Premier Fund – Service Class | 0.25% | 158,826 | – | ||||||||
Royce International Premier Fund – Consultant Class | 1.00% | 86,106 | – | ||||||||
Royce Micro-Cap Fund – Service Class | 0.25% | 342,892 | – | ||||||||
Royce Micro-Cap Fund – Consultant Class | 1.00% | 118,654 | – | ||||||||
Royce Opportunity Fund – Service Class | 0.25% | 143,212 | – | ||||||||
Royce Opportunity Fund – Consultant Class | 1.00% | 80,549 | – | ||||||||
Royce Opportunity Fund – R Class | 0.50% | 138,580 | – | ||||||||
Royce Pennsylvania Mutual Fund – Service Class | 0.25% | 140,349 | 110,275 | ||||||||
Royce Pennsylvania Mutual Fund – Consultant Class | 1.00% | 2,135,135 | – | ||||||||
Royce Pennsylvania Mutual Fund – R Class | 0.50% | 34,689 | – | ||||||||
Royce Premier Fund – Service Class | 0.25% | 64,757 | – | ||||||||
Royce Premier Fund – Consultant Class | 1.00% | 143,848 | – | ||||||||
Royce Premier Fund – R Class | 0.50% | 43,363 | – | ||||||||
Royce Small-Cap Value Fund – Service Class | 0.25% | 177,626 | – | ||||||||
Royce Small-Cap Value Fund – Consultant Class | 1.00% | 45,556 | – | ||||||||
Royce Small-Cap Value Fund – R Class | 0.50% | 30,734 | – | ||||||||
Royce Smaller-Companies Growth Fund – Service Class | 0.25% | 354,887 | – | ||||||||
Royce Smaller-Companies Growth Fund – Consultant Class | 1.00% | 60,801 | – | ||||||||
Royce Special Equity Fund – Service Class | 0.25% | 102,214 | – | ||||||||
Royce Special Equity Fund – Consultant Class | 1.00% | 195,473 | – | ||||||||
Royce Total Return Fund – Service Class | 0.25% | 153,651 | – | ||||||||
Royce Total Return Fund – Consultant Class | 1.00% | 1,133,792 | – | ||||||||
Royce Total Return Fund – R Class | 0.50% | 142,330 | – |
78 | The Royce Funds 2020 Annual Report to Shareholders
Purchases and Sales of Investment Securities:
For the year ended December 31, 2020, 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 | $ | 3,206,613 | $ | 27,690,892 | ||||
Royce Global Financial Services Fund | 1,156,208 | 7,832,768 | ||||||
Royce International Premier Fund | 342,737,658 | 171,802,620 | ||||||
Royce Micro-Cap Fund | 71,214,924 | 99,445,406 | ||||||
Royce Opportunity Fund | 515,144,195 | 426,014,936 | ||||||
Royce Pennsylvania Mutual Fund | 514,490,686 | 697,391,076 | ||||||
Royce Premier Fund | 350,081,868 | 547,080,071 | ||||||
Royce Small-Cap Value Fund | 68,480,961 | 88,790,201 | ||||||
Royce Smaller-Companies Growth Fund | 142,264,981 | 205,181,203 | ||||||
Royce Special Equity Fund | 282,605,973 | 409,532,602 | ||||||
Royce Total Return Fund | 740,607,230 | 896,261,981 |
1 | Excludes 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 year ended December 31, 2020, were as follows:
COSTS OF PURCHASES | PROCEEDS FROM SALES | REALIZED GAIN (LOSS) | ||||||||||
Royce Global Financial Services Fund | $ | – | $ | 446,632 | $ | (146,954 | ) | |||||
Royce International Premier Fund | 3,485,578 | – | – | |||||||||
Royce Micro-Cap Fund | 807,760 | 764,745 | 142,955 | |||||||||
Royce Pennsylvania Mutual Fund | 6,998,625 | 7,150,440 | (5,521,790 | ) | ||||||||
Royce Premier Fund | 806,786 | 20,391,149 | (37,099,243 | ) | ||||||||
Royce Special Equity Fund | 3,092,132 | 1,352,565 | 807,881 | |||||||||
Royce Total Return Fund | 6,163,672 | 11,857,921 | (201,847 | ) |
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 year ended December 31, 2020, the following funds had redemptions-in-kind:
AMOUNT REDEEMED IN-KIND | REALIZED GAIN | |||||||
Royce Premier Fund | $ | 19,181,887 | $ | 10,563,937 | ||||
Royce Special Equity Fund | 81,271,431 | 25,102,408 | ||||||
Royce Total Return Fund | 35,684,978 | 15,741,854 |
Class Specific Expenses:
Class specific expenses were as follows for the year ended December 31, 2020:
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 | $ | – | $ | 80,467 | $ | 16,520 | $ | 20,640 | $ | (112 | ) | $ | 117,515 | $ | 96,074 | |||||||||||||
Royce Dividend Value Fund – Service Class | 47,900 | 35,514 | 6,182 | 14,771 | (6 | ) | 104,361 | 49,174 | ||||||||||||||||||||
Royce Dividend Value Fund – Consultant Class | 11,948 | 7,203 | 1,185 | 6,812 | (4 | ) | 27,144 | 14,749 | ||||||||||||||||||||
Royce Dividend Value Fund – Institutional Class | – | 6,697 | 239 | 11,259 | (2 | ) | 18,193 | 17,936 | ||||||||||||||||||||
59,848 | 129,881 | 24,126 | 53,482 | (124 | ) | 177,933 | ||||||||||||||||||||||
Royce Global Financial Services Fund – Service Class | 54,768 | 39,946 | 8,427 | 19,740 | (211 | ) | 122,670 | 89,577 | ||||||||||||||||||||
Royce Global Financial Services Fund – Institutional Class | – | 6,622 | 31 | 13,128 | (1 | ) | 19,780 | 11,604 | ||||||||||||||||||||
54,768 | 46,568 | 8,458 | 32,868 | (212 | ) | 101,181 |
The Royce Funds 2020 Annual Report to Shareholders | 79
Notes to Financial Statements (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 International Premier Fund – Investment Class | $ | – | $ | 429,491 | $ | 100,478 | $ | 45,005 | $ | (611 | ) | $ | 574,363 | $ | – | |||||||||||||
Royce International Premier Fund – Service Class | 158,826 | 102,260 | 14,640 | 16,336 | (48 | ) | 292,014 | 36,098 | ||||||||||||||||||||
Royce International Premier Fund – Consultant Class | 86,106 | 12,913 | 1,868 | 11,867 | (19 | ) | 112,735 | 13,462 | ||||||||||||||||||||
Royce International Premier Fund – Institutional Class | – | 170,088 | 192,655 | 23,943 | (15,381 | ) | 371,305 | 371,305 | ||||||||||||||||||||
244,932 | 714,752 | 309,641 | 97,151 | (16,059 | ) | 420,865 | ||||||||||||||||||||||
Royce Micro-Cap Fund – Investment Class | – | 156,095 | 75,325 | 17,398 | (4,322 | ) | 244,496 | 63,016 | ||||||||||||||||||||
Royce Micro-Cap Fund – Service Class | 342,892 | 282,554 | 36,870 | 17,733 | (979 | ) | 679,070 | 156,373 | ||||||||||||||||||||
Royce Micro-Cap Fund – Consultant Class | 118,654 | 18,583 | 4,726 | 12,292 | (110 | ) | 154,145 | – | ||||||||||||||||||||
461,546 | 457,232 | 116,921 | 47,423 | (5,411 | ) | 219,389 | ||||||||||||||||||||||
Royce Opportunity Fund – Investment Class | – | 584,839 | 111,828 | 27,613 | (3,859 | ) | 720,421 | – | ||||||||||||||||||||
Royce Opportunity Fund – Service Class | 143,212 | 88,419 | 10,498 | 12,553 | (93 | ) | 254,589 | 29,445 | ||||||||||||||||||||
Royce Opportunity Fund – Consultant Class | 80,549 | 14,417 | 2,322 | 11,574 | (47 | ) | 108,815 | – | ||||||||||||||||||||
Royce Opportunity Fund – Institutional Class | – | 12,950 | 18,807 | 15,203 | (286 | ) | 46,674 | – | ||||||||||||||||||||
Royce Opportunity Fund – R Class | 138,580 | 63,499 | 2,484 | 10,736 | (82 | ) | 215,217 | – | ||||||||||||||||||||
362,341 | 764,124 | 145,939 | 77,679 | (4,367 | ) | 29,445 | ||||||||||||||||||||||
Royce Pennsylvania Mutual Fund – Investment Class | – | 902,304 | 241,265 | 27,785 | (4,649 | ) | 1,166,705 | – | ||||||||||||||||||||
Royce Pennsylvania Mutual Fund – Service Class | 140,349 | 83,848 | 48,685 | 12,428 | (4,242 | ) | 281,068 | – | ||||||||||||||||||||
Royce Pennsylvania Mutual Fund – Consultant Class | 2,135,135 | 167,889 | 51,951 | 14,177 | (665 | ) | 2,368,487 | – | ||||||||||||||||||||
Royce Pennsylvania Mutual Fund – Institutional Class | – | 9,319 | 18,475 | 14,076 | (53 | ) | 41,817 | – | ||||||||||||||||||||
Royce Pennsylvania Mutual Fund – R Class | 34,689 | 21,817 | 2,964 | 8,295 | (29 | ) | 67,736 | – | ||||||||||||||||||||
2,310,173 | 1,185,177 | 363,340 | 76,761 | (9,638 | ) | – | ||||||||||||||||||||||
Royce Premier Fund – Investment Class | – | 1,147,367 | 266,766 | 31,134 | (1,315 | ) | 1,443,952 | – | ||||||||||||||||||||
Royce Premier Fund – Service Class | 64,757 | 37,076 | 10,818 | 10,582 | (13 | ) | 123,220 | 20,445 | ||||||||||||||||||||
Royce Premier Fund – Consultant Class | 143,848 | 20,095 | 3,773 | 11,863 | (23 | ) | 179,556 | – | ||||||||||||||||||||
Royce Premier Fund – Institutional Class | – | 9,497 | 107,143 | 15,917 | (51 | ) | 132,506 | – | ||||||||||||||||||||
Royce Premier Fund – R Class | 43,363 | 24,245 | 1,942 | 4,736 | (1 | ) | 74,285 | – | ||||||||||||||||||||
251,968 | 1,238,280 | 390,442 | 74,232 | (1,403 | ) | 20,445 | ||||||||||||||||||||||
Royce Small-Cap Value Fund – Investment Class | – | 55,072 | 13,604 | 13,690 | (714 | ) | 81,652 | 51,963 | ||||||||||||||||||||
Royce Small-Cap Value Fund – Service Class | 177,626 | 110,140 | 27,704 | 18,866 | (88 | ) | 334,248 | 95,541 | ||||||||||||||||||||
Royce Small-Cap Value Fund – Consultant Class | 45,556 | 12,577 | 2,100 | 11,858 | (84 | ) | 72,007 | – | ||||||||||||||||||||
Royce Small-Cap Value Fund – R Class | 30,734 | 20,070 | 2,160 | 5,429 | (72 | ) | 58,321 | 6,969 | ||||||||||||||||||||
253,916 | 197,859 | 45,568 | 49,843 | (958 | ) | 154,473 | ||||||||||||||||||||||
Royce Smaller-Companies Growth Fund – Investment Class | – | 78,032 | 32,878 | 14,012 | (1,480 | ) | 123,442 | 7,585 | ||||||||||||||||||||
Royce Smaller-Companies Growth Fund – Service Class | 354,887 | 209,677 | 32,755 | 18,403 | (207 | ) | 615,515 | 72,844 | ||||||||||||||||||||
Royce Smaller-Companies Growth Fund – Consultant Class | 60,801 | 12,061 | 2,149 | 11,958 | (52 | ) | 86,917 | 18,079 | ||||||||||||||||||||
Royce Smaller-Companies Growth Fund – Institutional Class | – | 7,066 | 1,090 | 11,438 | (29 | ) | 19,565 | 12,433 | ||||||||||||||||||||
415,688 | 306,836 | 68,872 | 55,811 | (1,768 | ) | 110,941 |
80 | The Royce Funds 2020 Annual 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 Special Equity Fund – Investment Class | $ | – | $ | 666,506 | $ | 132,020 | $ | 29,884 | $ | (613 | ) | $ | 827,797 | $ | – | |||||||||||||
Royce Special Equity Fund – Service Class | 102,214 | 75,629 | 13,759 | 13,644 | – | 205,246 | 85,115 | |||||||||||||||||||||
Royce Special Equity Fund – Consultant Class | 195,473 | 24,221 | 5,812 | 11,911 | (61 | ) | 237,356 | – | ||||||||||||||||||||
Royce Special Equity Fund – Institutional Class | – | 15,160 | 58,607 | 15,146 | – | 88,913 | – | |||||||||||||||||||||
297,687 | 781,516 | 210,198 | 70,585 | (674 | ) | 85,115 | ||||||||||||||||||||||
Royce Total Return Fund – Investment Class | – | 855,204 | 318,575 | 38,135 | (4,454 | ) | 1,207,460 | 25,248 | ||||||||||||||||||||
Royce Total Return Fund – Service Class | 153,651 | 99,087 | 14,173 | 13,080 | (144 | ) | 279,847 | 39,653 | ||||||||||||||||||||
Royce Total Return Fund – Consultant Class | 1,133,792 | 99,224 | 26,823 | 15,166 | (625 | ) | 1,274,380 | – | ||||||||||||||||||||
Royce Total Return Fund – Institutional Class | – | 10,226 | 36,126 | 13,354 | (172 | ) | 59,534 | – | ||||||||||||||||||||
Royce Total Return Fund – R Class | 142,330 | 67,804 | 6,395 | 7,368 | (136 | ) | 223,761 | – | ||||||||||||||||||||
1,429,773 | 1,131,545 | 402,092 | 87,103 | (5,531 | ) | 64,901 |
Tax Information:
At December 31, 2020, 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 | $ | 36,103,655 | $ | 38,779,884 | $ | 39,501,784 | $ | 721,900 | ||||||||
Royce Global Financial Services Fund | 21,482,365 | 12,214,777 | 13,839,625 | 1,624,848 | ||||||||||||
Royce International Premier Fund | 857,924,407 | 274,945,894 | 290,876,428 | 15,930,534 | ||||||||||||
Royce Micro-Cap Fund | 226,936,532 | 131,336,642 | 144,815,105 | 13,478,463 | ||||||||||||
Royce Opportunity Fund | 947,009,131 | 381,905,261 | 406,666,118 | 24,760,857 | ||||||||||||
Royce Pennsylvania Mutual Fund | 1,097,697,877 | 840,225,697 | 860,702,302 | 20,476,605 | ||||||||||||
Royce Premier Fund | 919,141,770 | 840,733,920 | 841,812,780 | 1,078,860 | ||||||||||||
Royce Small-Cap Value Fund | 90,366,699 | 30,260,693 | 32,314,393 | 2,053,700 | ||||||||||||
Royce Smaller-Companies Growth Fund | 203,860,618 | 124,051,470 | 124,968,553 | 917,083 | ||||||||||||
Royce Special Equity Fund | 741,086,473 | 222,947,748 | 236,948,672 | 14,000,924 | ||||||||||||
Royce Total Return Fund | 895,536,069 | 417,678,300 | 432,721,358 | 15,043,058 |
The primary causes of the difference between book and tax basis cost are the timing of the recognition of losses on securities sold, investments in Real Estate Investment Trusts, investments in publicly traded partnerships and Trusts, underlying investments and mark-to-market of Passive Foreign Investment Companies.
Distributions during the years ended December 31, 2020 and 2019, were characterized as follows for tax purposes:
ORDINARY INCOME | LONG-TERM CAPITAL GAINS | RETURN OF CAPITAL | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Royce Dividend Value Fund | $ | 1,343,015 | $ | 1,454,404 | $ | 3,072,729 | $ | 13,668,728 | $ | – | $ | – | ||||||||||||
Royce Global Financial Services Fund | 118,498 | 531,381 | 2,059,840 | 338,683 | – | – | ||||||||||||||||||
Royce International Premier Fund | 3,194,667 | 3,750,858 | – | – | 48,255 | – | ||||||||||||||||||
Royce Micro-Cap Fund | – | – | 24,918,670 | 9,069,275 | – | – | ||||||||||||||||||
Royce Opportunity Fund | – | – | – | 14,461,640 | – | 4,546 | ||||||||||||||||||
Royce Pennsylvania Mutual Fund | 9,295,173 | 3,770,922 | 82,152,089 | 68,835,454 | – | – | ||||||||||||||||||
Royce Premier Fund | 14,872,440 | 5,706,644 | 77,865,265 | 316,226,614 | – | – | ||||||||||||||||||
Royce Small-Cap Value Fund | 2,100,141 | 2,060,443 | 2,570,913 | 3,384,353 | – | – | ||||||||||||||||||
Royce Smaller-Companies Growth Fund | – | – | 29,163,704 | 8,877,116 | – | – | ||||||||||||||||||
Royce Special Equity Fund | 13,517,035 | 11,726,391 | 20,524,246 | 105,051,840 | – | – | ||||||||||||||||||
Royce Total Return Fund | 24,529,558 | 18,888,956 | 211,882,829 | 117,115,609 | – | – |
The Royce Funds 2020 Annual Report to Shareholders | 81
Notes to Financial Statements (continued)
Tax Information (continued):
The tax basis components of distributable earnings at December 31, 2020, were as follows:
UNDISTRIBUTED ORDINARY INCOME | UNDISTRIBUTED LONG-TERM CAPITAL GAINS OR (CAPITAL LOSS CARRYFORWARD) | NET UNREALIZED APPRECIATION (DEPRECIATION)1 | QUALIFIED LATE YEAR ORDINARY AND POST-OCTOBER LOSS DEFERRALS2 | TOTAL DISTRIBUTABLE EARNINGS | CAPITAL LOSS CARRYFORWARD UTILIZED | |||||||||||||||||||
Royce Dividend Value Fund | $ | 23,850 | $ | 1,989,332 | $ | 38,792,675 | $ | – | $ | 40,805,857 | $ | – | ||||||||||||
Royce Global Financial Services Fund | 329,373 | 81,117 | 12,217,629 | (9,293 | ) | 12,618,826 | – | |||||||||||||||||
Royce International Premier Fund | – | (38,522,307 | )3 | 275,036,525 | (232 | ) | 236,513,986 | 25,425,502 | ||||||||||||||||
Royce Micro-Cap Fund | – | 5,366,954 | 131,336,637 | – | 136,703,591 | – | ||||||||||||||||||
Royce Opportunity Fund | – | 9,633,987 | 381,905,259 | – | 391,539,246 | 783,070 | ||||||||||||||||||
Royce Pennsylvania Mutual Fund | 228,756 | 32,053,317 | 840,226,054 | – | 872,508,127 | – | ||||||||||||||||||
Royce Premier Fund | 911,926 | 54,013,510 | 840,733,918 | (82,293 | ) | 895,577,061 | – | |||||||||||||||||
Royce Small-Cap Value Fund | 28,001 | (16,617,039 | ) | 30,260,691 | (1,581 | ) | 13,670,072 | – | ||||||||||||||||
Royce Smaller-Companies Growth Fund | – | 22,723,091 | 124,037,462 | (4,391 | ) | 146,756,162 | – | |||||||||||||||||
Royce Special Equity Fund | 11,330,027 | 4,003,841 | 222,947,745 | – | 238,281,613 | – | ||||||||||||||||||
Royce Total Return Fund | 66,936 | 46,616,488 | 417,699,682 | 28,646 | 464,411,752 | – |
1 | Includes timing differences on foreign currency, recognition of losses on securities sold, investments in Real Estate Investment Trusts, investments in publicly traded partnerships and Trusts, underlying investments and mark-to-market of Passive Foreign Investment Companies. |
2 | Under the current tax law, capital losses and qualified late year ordinary losses incurred after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. This column also includes passive activity losses and 857 (b)(9) adjustments. |
3 | A portion of this amount ($760,187) is comprised of capital loss carryforwards from business combinations, which may be limited in future years under the Internal Revenue Code Sections 381-384. |
For financial reporting purposes, capital accounts and distributions to shareholders are adjusted to reflect the tax character of permanent book/tax differences. For the year ended December 31, 2020, the Funds recorded the following permanent reclassifications, which relate primarily to current net operating losses, distribution reclassifications, investments in Real Estate Investment Trusts, publicly traded partnerships and Trusts, foreign currency transactions, foreign capital gains tax, redemptions-in-kind, return of capital distributions and gains from the sale of Passive Foreign Investment Companies. Results of operations and net assets were not affected by these reclassifications.
TOTAL DISTRIBUTABLE EARNINGS (LOSS) | PAID-IN CAPITAL | |||||||
Royce Dividend Value Fund | $ | 175 | $ | (175 | ) | |||
Royce Global Financial Services Fund | – | – | ||||||
Royce International Premier Fund | 48,255 | (48,255 | ) | |||||
Royce Micro-Cap Fund | 1,654,948 | (1,654,948 | ) | |||||
Royce Opportunity Fund | 3,070,948 | (3,070,948 | ) | |||||
Royce Pennsylvania Mutual Fund | (30,599 | ) | 30,599 | |||||
Royce Premier Fund | (10,504,545 | ) | 10,504,545 | |||||
Royce Small-Cap Value Fund | 1,145 | (1,145 | ) | |||||
Royce Smaller-Companies Growth Fund | 2,540,787 | (2,540,787 | ) | |||||
Royce Special Equity Fund | (25,053,054 | ) | 25,053,054 | |||||
Royce Total Return Fund | (15,540,712 | ) | 15,540,712 |
Management has analyzed the Funds’ tax positions taken on federal income tax returns for all open tax years (2017 – 2020) and has concluded that as of December 31, 2020, no provision for income tax is required in the Funds’ financial statements.
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 year ended December 31, 2020:
AFFILIATED COMPANY | SHARES 12/31/19 | MARKET VALUE 12/31/19 | COSTS OF PURCHASES | PROCEEDS FROM SALES | REALIZED GAIN (LOSS) | CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) | DIVIDEND INCOME | SHARES 12/31/20 | MARKET VALUE 12/31/20 | |||||||||||||||||
Royce Special Equity Fund | ||||||||||||||||||||||||||
CONSUMER DISCRETIONARY – 10.4% | ||||||||||||||||||||||||||
AUTO COMPONENTS – 3.5% | ||||||||||||||||||||||||||
Standard Motor Products 1 | 1,229,000 | $ | 65,407,380 | $ | 1,795,131 | $ | 20,952,497 | $ | 7,463,570 | $ | (20,232,934 | ) | $ | 477,500 | ||||||||||||
HOTELS, RESTAURANTS & LEISURE - 0.3% | ||||||||||||||||||||||||||
Bowl America Cl. A 2 | 374,000 | 5,797,000 | 132,406 | 490,253 | 49,962 | (2,218,640 | ) | 65,450 | 347,000 | $ | 3,270,475 |
82 | The Royce Funds 2020 Annual Report to Shareholders
Transactions in Affiliated Companies (continued):
AFFILIATED COMPANY | SHARES 12/31/19 | MARKET VALUE 12/31/19 | COSTS OF PURCHASES | PROCEEDS FROM SALES | REALIZED GAIN (LOSS) | CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) | DIVIDEND INCOME | SHARES 12/31/20 | MARKET VALUE 12/31/20 | |||||||||||||||||
Royce Special Equity Fund (continued) | ||||||||||||||||||||||||||
CONSUMER DISCRETIONARY (continued) | ||||||||||||||||||||||||||
HOUSEHOLD DURABLES – 6.6% | ||||||||||||||||||||||||||
Flexsteel Industries 2 | 720,000 | $ | 14,342,400 | $ | 1,750,771 | $ | 1,006,140 | $ | (387,297 | ) | $ | 12,139,741 | $ | 307,025 | 767,500 | $ | 26,839,475 | |||||||||
Hooker Furniture 2 | 1,000,000 | 25,690,000 | 4,364,321 | 2,390,008 | (398,163 | ) | 9,176,350 | 705,576 | 1,130,000 | 36,442,500 | ||||||||||||||||
40,032,400 | (785,460 | ) | 21,316,091 | 1,012,601 | 63,281,975 | |||||||||||||||||||||
111,236,780 | 6,728,072 | (1,135,483 | ) | 1,555,551 | 66,552,450 | |||||||||||||||||||||
INDUSTRIALS - 9.5% | ||||||||||||||||||||||||||
AEROSPACE & DEFENSE - 3.6% | ||||||||||||||||||||||||||
National Presto Industries 2 | 409,000 | 36,151,510 | 4,410,646 | 5,927,599 | 3,191,846 | (3,064,570 | ) | 2,278,704 | 393,100 | 34,761,833 | ||||||||||||||||
BUILDING PRODUCTS – 0.5% | ||||||||||||||||||||||||||
Insteel Industries 1 | 969,000 | 20,823,810 | 94,031 | 17,340,558 | (1,640,020 | ) | 2,463,289 | 340,421 | ||||||||||||||||||
MACHINARY – 5.4% | ||||||||||||||||||||||||||
Gencor Industries 2,3 | 1,130,000 | 13,187,100 | 622,652 | 1,290,843 | (72,178 | ) | 652,769 | – | 1,065,000 | 13,099,500 | ||||||||||||||||
Hurco Companies 2 | 623,600 | 23,921,296 | 657,597 | 1,978,764 | 982,115 | (6,182,244 | ) | 228,150 | 580,000 | 17,400,000 | ||||||||||||||||
Miller Industries 2 | 381,500 | 14,165,095 | 8,429,635 | 2,423,860 | 148,435 | 1,561,205 | 362,646 | 575,500 | 21,880,510 | |||||||||||||||||
51,273,491 | 1,058,372 | (3,968,270 | ) | 590,796 | 52,380,010 | |||||||||||||||||||||
108,248,811 | 2,610,198 | (4,569,551 | ) | 3,209,921 | 87,141,843 | |||||||||||||||||||||
INFORMATION TECHNOLOGY – 6.3% | ||||||||||||||||||||||||||
IT SERVICES – 6.3% | ||||||||||||||||||||||||||
Computer Services 1,4 | 1,463,000 | 65,103,500 | – | 23,210,256 | 14,948,027 | 3,740,789 | 2,013,173 | |||||||||||||||||||
65,103,500 | 14,948,027 | 3,740,789 | 2,013,173 | |||||||||||||||||||||||
MATERIALS – 1.5% | ||||||||||||||||||||||||||
PAPER & FOREST PRODUCTS – 1.5% | ||||||||||||||||||||||||||
Verso Corporation Cl. A 1 | 1,722,000 | 31,047,660 | 3,222,820 | 10,522,220 | (2,634,953 | ) | (6,689,307 | ) | 4,964,820 | |||||||||||||||||
31,047,660 | (2,634,953 | ) | (6,689,307 | ) | 4,964,820 | |||||||||||||||||||||
$ | 315,636,751 | $ | 21,651,344 | $ | (8,653,552 | ) | $ | 11,743,465 | $ | 153,694,293 |
1 | Not an Affiliated Company at December 31, 2020. |
2 | At December 31, 2020, 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. |
3 | Non-income producing. |
4 | These securities are defined as Level 2 securities due to fair value being based on quoted prices for similar securities. |
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. Assuming the acquisition had been completed on January 1, 2019, the pro forma results of operations for the year ended December 31, 2019 for Royce Opportunity Fund, are as follows:
Net investment income (loss): $(4,901,614)
Net realized and change in unrealized gain (loss) on investments and foreign currency: $235,031,362
Net increase (decrease) in net assets resulting from investment operations: $230,129,748
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 acquisitions of $1,907,630,569. Assuming the acquisitions had been completed on January 1, 2019, the pro forma results of operations for the year ended December 31, 2019 for Royce Pennsylvania Mutual Fund, are as follows:
Net investment income (loss): $4,098,369
Net realized and change in unrealized gain (loss) on investments and foreign currency: $441,964,475
Net increase (decrease) in net assets resulting from investment operations: $446,062,844
The Royce Funds 2020 Annual Report to Shareholders | 83
Notes to Financial Statements (continued)
Merger Information (continued):
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. Assuming the acquisition had been completed on January 1, 2019, the pro forma results of operations for the year ended December 31, 2019 for Royce Micro-Cap Fund, are as follows:
Net investment income (loss): $(1,688,214)
Net realized and change in unrealized gain (loss) on investments and foreign currency: $75,449,738
Net increase (decrease) in net assets resulting from investment operations: $73,761,524
Subsequent Events:
Subsequent events have been evaluated through the date the financial statements were issued.
84 | The Royce Funds 2020 Annual Report to Shareholders
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of The Royce Fund and Shareholders of Royce Dividend Value Fund, Royce Global Financial Services Fund, Royce International Premier 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:
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Royce Dividend Value Fund, Royce Global Financial Services Fund, Royce International Premier 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 (constituting The Royce Fund, hereafter collectively referred to as the “Funds”) as of December 31, 2020, the related statements of operations for the year ended December 31, 2020, the statements of changes in net assets for each of the two years in the period ended December 31, 2020, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of December 31, 2020, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended December 31, 2020 and each of the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
/s/PricewaterhouseCoopers LLP
New York, New York
February 18, 2021
We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.
The Royce Funds 2020 Annual Report to Shareholders | 85
Understanding Your Fund’s Expenses (unaudited)
As a shareholder of a mutual fund, you pay ongoing expenses, including management fees and other Fund expenses including, for some funds, distribution and/or service (12b-1) fees. Using the information below, you can estimate how these ongoing expenses (in dollars) affect your investment and compare them with the ongoing expenses of other funds. You may also incur one-time transaction expenses, including redemption fees, which are not shown in this section and would result in higher total costs. The example is based on an investment of $1,000 invested at July 1, 2020, and held for the entire six-month period ended December 31, 2020. 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 December 31, 2020, 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 7/1/20 | Ending Account Value 12/31/20 | Expenses Paid During the Period1 | Beginning Account Value 7/1/20 | Ending Account Value 12/31/20 | Expenses Paid During the Period1 | Annualized Expense Ratio2 | ||||||||||||||||
Investment Class | �� | |||||||||||||||||||||
Royce Dividend Value Fund | $ | 1,000.00 | $ | 1,239.59 | $ | 6.14 | $ | 1,000.00 | $ | 1,019.66 | $ | 5.53 | 1.09 | % | ||||||||
Royce International Premier Fund | 1,000.00 | 1,251.80 | 6.79 | 1,000.00 | 1,019.10 | 6.09 | 1.20 | % | ||||||||||||||
Royce Micro-Cap Fund | 1,000.00 | 1,408.63 | 7.51 | 1,000.00 | 1,018.90 | 6.29 | 1.24 | % | ||||||||||||||
Royce Opportunity Fund | 1,000.00 | 1,543.86 | 7.87 | 1,000.00 | 1,018.95 | 6.24 | 1.23 | % | ||||||||||||||
Royce Pennsylvania Mutual Fund3 | 1,000.00 | 1,319.73 | 5.48 | 1,000.00 | 1,020.41 | 4.77 | 0.94 | % | ||||||||||||||
Royce Premier Fund | 1,000.00 | 1,285.68 | 6.84 | 1,000.00 | 1,019.15 | 6.04 | 1.19 | % | ||||||||||||||
Royce Small-Cap Value Fund | 1,000.00 | 1,302.19 | 7.18 | 1,000.00 | 1,018.90 | 6.29 | 1.24 | % | ||||||||||||||
Royce Smaller-Companies Growth Fund | 1,000.00 | 1,463.96 | 7.68 | 1,000.00 | 1,018.90 | 6.29 | 1.24 | % | ||||||||||||||
Royce Special Equity Fund | 1,000.00 | 1,193.69 | 6.67 | 1,000.00 | 1,019.05 | 6.14 | 1.21 | % | ||||||||||||||
Royce Total Return Fund | 1,000.00 | 1,255.80 | 7.03 | 1,000.00 | 1,018.90 | 6.29 | 1.24 | % | ||||||||||||||
Service Class | ||||||||||||||||||||||
Royce Dividend Value Fund | 1,000.00 | 1,237.64 | 7.54 | 1,000.00 | 1,018.40 | 6.80 | 1.34 | % | ||||||||||||||
Royce Global Financial Services Fund | 1,000.00 | 1,238.75 | 8.38 | 1,000.00 | 1,017.65 | 7.56 | 1.49 | % | ||||||||||||||
Royce International Premier Fund | 1,000.00 | 1,250.00 | 8.14 | 1,000.00 | 1,017.90 | 7.30 | 1.44 | % | ||||||||||||||
Royce Micro-Cap Fund | 1,000.00 | 1,406.88 | 9.01 | 1,000.00 | 1,017.65 | 7.56 | 1.49 | % | ||||||||||||||
Royce Opportunity Fund | 1,000.00 | 1,541.54 | 9.52 | 1,000.00 | 1,017.65 | 7.56 | 1.49 | % | ||||||||||||||
Royce Pennsylvania Mutual Fund3 | 1,000.00 | 1,317.87 | 6.23 | 1,000.00 | 1,019.76 | 5.43 | 1.07 | % | ||||||||||||||
Royce Premier Fund | 1,000.00 | 1,283.58 | 8.55 | 1,000.00 | 1,017.65 | 7.56 | 1.49 | % | ||||||||||||||
Royce Small-Cap Value Fund | 1,000.00 | 1,300.67 | 8.62 | 1,000.00 | 1,017.65 | 7.56 | 1.49 | % | ||||||||||||||
Royce Smaller-Companies Growth Fund | 1,000.00 | 1,461.52 | 9.22 | 1,000.00 | 1,017.65 | 7.56 | 1.49 | % | ||||||||||||||
Royce Special Equity Fund | 1,000.00 | 1,192.46 | 7.66 | 1,000.00 | 1,018.15 | 7.05 | 1.39 | % | ||||||||||||||
Royce Total Return Fund | 1,000.00 | 1,253.39 | 8.44 | 1,000.00 | 1,017.65 | 7.56 | 1.49 | % | ||||||||||||||
Consultant Class | ||||||||||||||||||||||
Royce Dividend Value Fund | 1,000.00 | 1,233.17 | 11.73 | 1,000.00 | 1,014.63 | 10.58 | 2.09 | % | ||||||||||||||
Royce International Premier Fund | 1,000.00 | 1,245.16 | 12.36 | 1,000.00 | 1,014.13 | 11.09 | 2.19 | % | ||||||||||||||
Royce Micro-Cap Fund | 1,000.00 | 1,399.96 | 14.36 | 1,000.00 | 1,013.17 | 12.04 | 2.38 | % | ||||||||||||||
Royce Opportunity Fund | 1,000.00 | 1,534.06 | 15.29 | 1,000.00 | 1,013.07 | 12.14 | 2.40 | % | ||||||||||||||
Royce Pennsylvania Mutual Fund3 | 1,000.00 | 1,314.09 | 11.28 | 1,000.00 | 1,015.38 | 9.83 | 1.94 | % | ||||||||||||||
Royce Premier Fund | 1,000.00 | 1,277.98 | 13.40 | 1,000.00 | 1,013.37 | 11.84 | 2.34 | % | ||||||||||||||
Royce Small-Cap Value Fund | 1,000.00 | 1,291.70 | 16.07 | 1,000.00 | 1,011.11 | 14.10 | 2.79 | % | ||||||||||||||
Royce Smaller-Companies Growth Fund | 1,000.00 | 1,456.94 | 13.83 | 1,000.00 | 1,013.88 | 11.34 | 2.24 | % | ||||||||||||||
Royce Special Equity Fund | 1,000.00 | 1,186.94 | 12.64 | 1,000.00 | 1,013.57 | 11.64 | 2.30 | % | ||||||||||||||
Royce Total Return Fund | 1,000.00 | 1,249.71 | 12.55 | 1,000.00 | 1,013.98 | 11.24 | 2.22 | % |
86 | The Royce Funds 2020 Annual Report to Shareholders
ACTUAL | HYPOTHETICAL (5% PER YEAR BEFORE EXPENSES) | |||||||||||||||||||||
Beginning Account Value 7/1/20 | Ending Account Value 12/31/20 | Expenses Paid During the Period1 | Beginning Account Value 7/1/20 | Ending Account Value 12/31/20 | Expenses Paid During the Period1 | Annualized Expense Ratio2 | ||||||||||||||||
Institutional Class | ||||||||||||||||||||||
Royce Dividend Value Fund | $ | 1,000.00 | $ | 1,241.86 | $ | 6.14 | $ | 1,000.00 | $ | 1,019.66 | $ | 5.53 | 1.09 | % | ||||||||
Royce Global Financial Services Fund | 1,000.00 | 1,238.69 | 8.38 | 1,000.00 | 1,017.65 | 7.56 | 1.49 | % | ||||||||||||||
Royce International Premier Fund | 1,000.00 | 1,252.30 | 5.89 | 1,000.00 | 1,019.91 | 5.28 | 1.04 | % | ||||||||||||||
Royce Opportunity Fund | 1,000.00 | 1,544.76 | 7.10 | 1,000.00 | 1,019.56 | 5.63 | 1.11 | % | ||||||||||||||
Royce Pennsylvania Mutual Fund | 1,000.00 | 1,319.36 | 5.13 | 1,000.00 | 1,020.71 | 4.47 | 0.88 | % | ||||||||||||||
Royce Premier Fund | 1,000.00 | 1,285.34 | 6.61 | 1,000.00 | 1,019.36 | 5.84 | 1.15 | % | ||||||||||||||
Royce Smaller-Companies Growth Fund | 1,000.00 | 1,463.62 | 7.68 | 1,000.00 | 1,018.90 | 6.29 | 1.24 | % | ||||||||||||||
Royce Special Equity Fund | 1,000.00 | 1,194.47 | 6.29 | 1,000.00 | 1,019.41 | 5.79 | 1.14 | % | ||||||||||||||
Royce Total Return Fund | 1,000.00 | 1,256.78 | 6.35 | 1,000.00 | 1,019.51 | 5.69 | 1.12 | % | ||||||||||||||
R Class | ||||||||||||||||||||||
Royce Opportunity Fund | 1,000.00 | 1,540.07 | 11.75 | 1,000.00 | 1,015.89 | 9.32 | 1.84 | % | ||||||||||||||
Royce Pennsylvania Mutual Fund | 1,000.00 | 1,315.19 | 10.42 | 1,000.00 | 1,016.14 | 9.07 | 1.79 | % | ||||||||||||||
Royce Premier Fund | 1,000.00 | 1,280.23 | 11.06 | 1,000.00 | 1,015.43 | 9.78 | 1.93 | % | ||||||||||||||
Royce Small-Cap Value Fund | 1,000.00 | 1,297.29 | 11.49 | 1,000.00 | 1,015.13 | 10.08 | 1.99 | % | ||||||||||||||
Royce Total Return Fund | 1,000.00 | 1,252.16 | 10.53 | 1,000.00 | 1,015.79 | 9.42 | 1.86 | % |
1 Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value for the period, multiplied by 184 days in the most recent fiscal half-year divided by 366 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.
Federal Tax Information
In January 2021, taxable shareholders were mailed a Form 1099-DIV reporting the federal tax status of all distributions paid during the calendar year 2020.
2020 Supplemental Tax Information:
FUND | % QDI | % U.S. GOVT INCOME | % INCOME QUALIFYING FOR DRD | LONG-TERM CAPITAL GAIN DISTRIBUTION OR MAXIMUM ALLOWABLE (OOO’S) | ||||
Royce Dividend Value Fund | 100.00% | N/A | 81.26% | $ | 3,073 | |||
Royce Global Financial Services Fund | 100.00% | N/A | 100.00% | 2,060 | ||||
Royce International Premier Fund | 100.00% | N/A | 0.00% | – | ||||
Royce Micro-Cap Fund | 0.00% | N/A | 0.00% | 24,919 | ||||
Royce Opportunity Fund | 0.00% | N/A | 0.00% | – | ||||
Royce Pennsylvania Mutual Fund | 100.00% | N/A | 100.00% | 82,152 | ||||
Royce Premier Fund | 100.00% | N/A | 100.00% | 77,865 | ||||
Royce Small-Cap Value Fund | 100.00% | N/A | 88.30% | 2,571 | ||||
Royce Smaller-Companies Growth Fund | 0.00% | N/A | 0.00% | 29,164 | ||||
Royce Special Equity Fund | 100.00% | N/A | 100.00% | 20,524 | ||||
Royce Total Return Fund | 100.00% | N/A | 100.00% | 211,883 |
Definitions:
% QDI: Qualified Dividend Income; % of net investment income and/or short-term capital gains distributions that qualify for treatment at long-term capital gain rates.
% U.S. Govt Income: % of investment income paid from U.S. Government obligations.
% Income Qualifying for DRD: % of investment income eligible for the corporate dividend received deduction.
Foreign Tax Credit:
For the year ended December 31, 2020, Royce International Premier Fund had elected to pass through the credit for tax paid in foreign countries. The net foreign source income and foreign tax per share outstanding on the dividend distribution date are as follows:
NET FOREIGN SOURCE INCOME | NET FOREIGN SOURCE INCOME PER SHARE | FOREIGN TAX | FOREIGN TAX PER SHARE |
$4,191,294 | $0.0715 | $1,300,918 | $0.0222 |
The Royce Funds 2020 Annual Report to Shareholders | 87
All Trustees and Officers may be reached c/o The Royce Funds, 745 Fifth Avenue, New York, NY 10151
Christopher D. Clark, Trustee1, President
Age: 55 | 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: 72 | 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: 59 | Number of Funds Overseen: 16 | Tenure: Since 2017
Non-Royce Directorships: None
Principal Occupation(s) During Past Five Years: Chief Equity Strategist and Senior Portfolio Manager at MAI Capital Management LLC, an investment advisory firm (since May 2020). Previously, Mr. Grisanti was Co-Founder and Chief Executive Officer of Grisanti Capital Management LLC, an investment advisory firm (from 1999 to 2020). Mr. Grisanti’s prior business experience also 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).
Cecile B. Harper, Trustee2
Age: 57 | Number of Funds Overseen: 16 | Tenure: Since 2020
Non-Royce Directorships: None
Principal Occupation(s) During Past Five Years: Board Member of Pyramid Peak Foundation (since January 2012); and Chief Operating Officer at the College Foundation at the University of Virginia (since October 2019). Ms. Harper’s prior business experience includes serving as Principal of Southeastern Asset Management (from December 1993 to September 2019); and a Board Member of Regional One Health Foundation (from June 2013 to September 2019).
Arthur S. Mehlman, Trustee
Age: 78 | 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).
G. Peter O’Brien, Trustee
Age: 74 | 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: 62 | 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: 53 | 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: 58 | 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: 54 | 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: 53 | 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: 61 | 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).
2 Became a trustee effective as of the close of business on September 24, 2020.
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.royceinvest.com or by calling (800) 221-4268.
88 | The Royce Funds 2020 Annual 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 December 31, 2020, and, of course, historical market trends are not necessarily indicative of future market movements. Statements regarding the future prospects for particular securities held in the Funds’ portfolios and Royce’s investment intentions with respect to those securities reflect Royce’s opinions as of December 31, 2020 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. There can be no assurance that companies that currently pay a dividend will continue to do so 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 2000 Pure Value Index is an unmanaged index composed of securities with strong value characteristics selected from the Russell 2000 Index. Securities are weighted based on their style score. The Russell 2000 Pure Growth Index is an unmanaged index composed of securities with strong growth characteristics selected from the Russell 2000 Index. Securities are weighted based on their style score. 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. The MSCI ACWI ex USA Small Cap Index is an unmanaged, capitalization-weighted index of global small-cap stocks, excluding the United States. The MSCI ACWI ex USA Large Cap Index is an unmanaged, capitalization-weighted index of global large-cap stocks, excluding the United States. The CRSP (Center for Research in Security Pricing) equally divides the companies listed on the NYSE into 10 deciles based on market capitalization. Deciles 1-5 represent the largest domestic equity companies and Deciles 6-10 represent the smallest. CRSP then sorts all listed domestic equity companies based on these market cap ranges. By way of comparison, the CRSP 1-5 would have similar capitalization parameters to the S&P 500 and the CRSP 6-10 would have similar capitalization parameters to those of the Russell 2000. The Nasdaq 100 is an unmanaged, capitalization-weighted index. It measures the performance of the 100 largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization. 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. 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.royceinvest.com. All publicly released material Fund information is disclosed by the Funds on their website at www.royceinvest.com. The Royce Funds is a service mark of The Royce Funds. Distributor: Royce Fund Services, LLC.
The Royce Funds 2020 Annual Report to Shareholders | 89
Notes to Performance and Other Important Information (continued)
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.
90 | The Royce Funds 2020 Annual Report to Shareholders
Results of Shareholders Meetings
At a Special Meeting of Shareholders convened virtually on July 14, 2020, the following Funds’ shareholders approved a new investment advisory agreement between the Fund and Royce & Associates, LP.
FOR | AGAINST | ABSTAIN | |
Royce Dividend Value Fund | 8,832,172 | 54,773 | 176,878 |
Royce Global Financial Services Fund | 1,702,529 | 37,796 | 38,078 |
Royce Opportunity Fund | 35,313,222 | 717,037 | 1,153,522 |
Royce Premier Fund | 66,612,347 | 1,001,606 | 2,271,132 |
At a Special Meeting of Shareholders originally scheduled to be held on July 14, 2020, and adjourned to and convened virtually on July 30, 2020, the following Funds’ shareholders approved a new investment advisory agreement between the Fund and Royce & Associates, LP.
FOR | AGAINST | ABSTAIN | |
Royce Pennsylvania Mutual Fund | 96,286,319 | 2,561,161 | 7,119,385 |
Royce Small-Cap Value Fund | 8,145,953 | 157,949 | 746,227 |
Royce Special Equity Fund | 25,464,889 | 315,773 | 1,620,188 |
At a Special Meeting of Shareholders originally scheduled to be held on July 14, 2020, and adjourned to and convened virtually on August 31, 2020, the following Funds’ shareholders approved a new investment advisory agreement between the Fund and Royce & Associates, LP.
FOR | AGAINST | ABSTAIN | |
Royce International Premier Fund | 27,008,272 | 396,382 | 1,909,592 |
Royce Micro-Cap Fund | 13,296,840 | 517,606 | 1,554,098 |
Royce Smaller Companies Growth Fund | 12,966,057 | 439,768 | 1,655,077 |
At a Special Meeting of Shareholders originally scheduled to be held on July 14, 2020, and adjourned to and convened virtually on September 11, 2020, the Fund’s shareholders approved a new investment advisory agreement between the Fund and Royce & Associates, LP.
FOR | AGAINST | ABSTAIN | |
Royce Total Return Fund | 57,747,289 | 1,708,968 | 8,352,228 |
At the 2020 Annual Meeting of Shareholders convened virtually on September 24, 2020, the Funds’ shareholders elected seven Trustees, consisting of:
VOTES FOR | VOTES WITHHELD | |
Christopher D. Clark | 469,138,127 | 13,311,893 |
Patricia W. Chadwick | 469,041,260 | 13,408,760 |
Christopher C. Grisanti | 469,541,109 | 12,908,911 |
Cecile B. Harper | 469,498,600 | 12,951,419 |
Arthur S. Mehlman | 468,573,130 | 13,876,889 |
G. Peter O’Brien | 468,647,638 | 13,802,382 |
Michael K. Shields | 469,643,370 | 12,806,649 |
The Royce Funds 2020 Annual Report to Shareholders | 91
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92 | The Royce Funds 2020 Annual Report to Shareholders
About Royce Investment Partners | Contact Us | |||
Unparalleled Knowledge + Experience | GENERAL INFORMATION | |||
Pioneers in small-cap investing, with 45+ years | General Royce Funds information including: | |||
of experience, depth of knowledge, and focus. | ● How to open an account | |||
● An overview of our firm and Funds | ||||
Independent Thinking | ● Ordering literature including Prospectuses | |||
The confidence to go against consensus, the insight | (800) 221-4268 | |||
to uncover opportunities others might miss, and the | ||||
tenacity to stay the course through market cycles. | ACCOUNT INFORMATION | |||
Speak with a representative about: | ||||
Specialized Approaches | ● Your account, transactions, and forms | |||
U.S., international, and global investment strategies | (800) 841-1180 | |||
that pursue approaches with different risk profiles. | ||||
FINANCIAL ADVISORS, CONSULTANTS, AND INSTITUTIONS | ||||
Unwavering Commitment | Speak with your regional Royce contact regarding: | |||
Our team of 18 portfolio managers has significant | ● Scheduling a meeting or call | |||
personal investments in the strategies they manage. | ● 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 | ||||
OE-REP-1220 | ||||
Item 2. Code(s) of Ethics. As of the end of the period covered by this report, the Registrant had adopted a code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of this code of ethics is filed as an exhibit to this Form N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the period covered by this report.
Item 3. Audit Committee Financial Expert.
(a)(1) | The Board of Trustees of the Registrant has determined that it has an audit committee financial expert. |
(a)(2) | Arthur S. Mehlman and Patricia W. Chadwick were designated by the Board of Trustees as the Registrant’s Audit Committee Financial Experts, effective April 15, 2004 and April 8, 2010, respectively. Mr. Mehlman and Ms. Chadwick are “independent” as defined under Item 3 of Form N-CSR. |
Item 4. Principal Accountant Fees and Services.
(a) | Audit Fees: |
Year ended December 31, 2020 - $282,915
Year ended December 31, 2019 - $297,369
(b) | Audit-Related Fees: |
Year ended December 31, 2020 - $0
Year ended December 31, 2019 - $0
(c) | Tax Fees: |
Year ended December 31, 2020 - $119,075 – Preparation of tax returns and excise tax review
Year ended December 31, 2019 - $160,058 – Preparation of tax returns and excise tax review
(d) | All Other Fees: |
Year ended December 31, 2020 - $0
Year ended December 31, 2019 - $0
(e)(1) Annual Pre-Approval: On an annual basis, the Registrant’s independent auditor submits to the Audit Committee a schedule of proposed audit, audit-related, tax and other non-audit services to be rendered to the Registrant and/or investment adviser(s) for the following year that require pre-approval by the Audit Committee. This schedule provides a description of each type of service that is expected to require pre-approval and the maximum fees that can be paid for each such service without further Audit Committee approval. The Audit Committee then reviews and determines whether to approve the types of scheduled services and the projected fees for them. Any subsequent revision to already pre-approved services or fees (including fee increases) are presented for consideration at the next regularly scheduled Audit Committee meeting, as needed.
If subsequent to the annual pre-approval of services and fees by the Audit Committee, the Registrant or one of its affiliates determines that it would like to engage the Registrant’s independent auditor to perform a service not already pre-approved, the request is to be submitted to the Registrant’s Chief Financial Officer, and if he or she determines that the service fits within the independence guidelines (e.g., it is not a prohibited service), he or she will then arrange for a discussion of the proposed service and fee to be included on the agenda for the next regularly scheduled Audit Committee meeting so that pre-approval can be considered.
Interim Pre-Approval: If, in the judgment of the Registrant's Chief Financial Officer, a proposed engagement needs to commence before the next regularly scheduled Audit Committee meeting, he or she shall submit a written summary of the proposed engagement to all members of the Audit Committee, outlining the services, the estimated maximum cost, the category of the services (e.g., audit, audit-related, tax or other) and the rationale for engaging the Registrant’s independent auditor to perform the services. To the extent the proposed engagement involves audit, audit-related or tax services, any individual member of the Audit Committee who is an independent Board member is authorized to pre-approve the engagement. To the extent the proposed engagement involves non-audit services other than audit-related or tax, the Chairman of the Audit Committee is authorized to pre-approve the engagement. The Registrant’s Chief Financial Officer will arrange for this interim review and coordinate with the appropriate member(s) of the Committee. The independent auditor may not commence the engagement under consideration until the Registrant’s Chief Financial Officer has informed the auditor in writing that pre-approval has been obtained from the Audit Committee or an individual member who is an independent Board member. The member of the Audit Committee who pre-approves any engagements in between regularly scheduled Audit Committee meetings is to report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next regularly scheduled meeting.
(e)(2) | Not Applicable |
(f) | Not Applicable |
(g) | Year ended December 31, 2020 - $119,075 |
Year ended December 31, 2019 - $160,058
(h) | No such services were rendered during 2020 or 2019. |
Item 5. Audit Committee of Listed Registrants. Not Applicable.
Item 6. Investments.
(a) See Item 1.
(b) Not Applicable
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not Applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not Applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not Applicable
Item 10. Submission of Matters to a Vote of Security Holders. Not Applicable.
Item 11. Controls and Procedures.
(a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant's Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.
(b) Internal Control over Financial Reporting. There were no significant changes in Registrant's internal control over financial reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses during the second fiscal quarter of the period covered by this report.
Item 12. Exhibits. Attached hereto.
(a)(1) The Registrant’s code of ethics pursuant to Item 2 of Form N-CSR.
(a)(3) Not Applicable
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: March 1, 2021 |
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 | Treasurer | |||||
Date: March 1, 2021 | Date: March 1, 2021 |