How Distributions Affect Your Mutual Fund Investment

Which Royce Funds pay distributions, and when?

All of our open-end Funds pay year-end distributions from net realized capital gains in December, if they are available. (In addition, two of our open-end funds pay scheduled quarterly dividends derived from net investment income: Royce Total Return Fund and Royce Dividend Value Fund.)

Shareholders should carefully consider the tax implications of purchasing shares shortly before a distribution is about to be paid. At the time of your purchase, a Fund's net asset value (NAV) may include income or capital gains that have not yet been distributed. When the Fund then distributes these amounts, they are taxable to the shareholder, even though the distribution is economically a return of part of the shareholder's investment.

When these distributions are paid, three dates are important to keep in mind: Record, Ex and Payable Date.

Record Date — The distribution that an investor receives is calculated based on the number of shares that an investor owns on Record Date, typically using the share balance in an investor's account at the close of that day's business.

Ex Date — On "ex date," a Fund's net asset value (NAV) decreases by the amount of the total distribution (that is, the sum of dividends and long- and short-term capital gains) in addition to any market movement that would change the Fund's closing NAV. Occasionally, investors become a little anxious when they see the larger-than-usual decline in a fund's NAV on ex date, but typically most of the decrease is the total distribution being deducted from the fund's NAV. (Many publications that list closing NAVs place an 'x' after the fund's name on its Ex Date.) Ex Date is sometimes referred to as "Ex-Dividend Date."

Payable Date — The date on which distributions are posted to accounts for reinvestment or paid to shareholders who take distributions in cash.

At The Royce Funds, Ex and Payable Dates are usually one business day after Record Date.

Questions? Call Investor Services at (800) 221-4268.