Archived Material: Important Performance Information

Archived material may contain dated performance, risk and other information; please view returns as of the most recent quarter end and month end. Due to changing circumstances over time, statements made in archived material may or may not have continued applicability or relevance in today's environment. Any thoughts concerning market movements and future prospects for small-company stocks are solely those of Royce & Associates, LLC, and, of course, there can be no assurance with regard to future market movements. Small- and micro-cap stocks may involve considerably more risk than larger-cap stocks.

All performance information reflects past performance, is presented on a total return basis and reflects reinvestment of distributions. Current performance may be higher or lower than performance quoted. Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares may be worth more or less than their original cost when redeemed. Please read the fund's prospectus carefully and consider a fund's investment goals, risks, fees and expenses before investing or sending money. The prospectus contains this and other information. The Russell 2000, Russell 2000 Value, Russell 2000 Growth, S&P 500, S&P 600, NASDAQ Composite and DJIA are unmanaged indexes of domestic common stocks. Distributor: Royce Fund Services, Inc.

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    1. News & Commentary
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      • Prices & Performance
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      Financial Professional & Media Contact
      • Joanne NewgardJoanne Newgard
        Director of Client Services & Media Relations


        Contact (800) 562-0880 or joanne@roycefunds.com

    2. Commentary

      Small-Cap Market Cycle Performance

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      intro-top

      We believe strongly in the idea that a long-term investment perspective is crucial for determining the success of a particular investment approach. While flourishing in an up market is wonderful, surviving a bear market by losing less (or not at all) is at least as good. However, the true test of a portfolio's mettle is performance over full market cycle periods, which include both an up and down market period.

      intro-bottom

      Since the Russell 2000's inception on 12/31/78, there have been 10 full market cycles, with the most recent peaking on 4/29/11. Market cycles are defined as those that have retreated at least 15% from a previous market peak and have rebounded to establish a new peak above the previous one. Each market cycle contains a peak-to-trough and a trough-to-peak period. Interestingly, over the small-cap index's 30+ year history, each style index — the Russell 2000 Value Index and the Russell 2000 Growth Index — outperformed in five of the 10 full market cycles. In fact, leadership has alternated between growth and value over the last six cycles. If history were to adhere to this pattern, value would lead in the current cycle that began on 4/29/11.

      Russell 2000 Index's Total Returns

      Peak-to-Peak (7/13/07-4/29/11)

      The most recently completed cycle lasted approximately three and a half years and saw a modest gain for the small-cap index. Small-cap value was actually underwater for the full cycle, while small-cap growth was marginally positive. All but two of The Royce Funds in this table outperformed the small-cap index for the just-completed cycle.

      Peak-to-Trough (7/13/07-3/9/09)

      Performance during the peak-to-trough phase of the most recent cycle was especially difficult, encompassing the financial crisis of late 2008 and early '09. Surprisingly, growth narrowly outperformed value during this phase. Of The Royce Funds in this table, all but one either matched or outperformed the index during this down phase.

      Trough-to-Peak (3/9/09-4/29/11)

      The dynamic market recovery lasted 25 months and saw the small-cap index appreciate almost 160% (50%+ per annum). Both value and growth saw substantial gains during this period, although growth once again provided the advantage. Six of The Royce Funds in the table outperformed their respective benchmarks.

      ROYCE US EQUITY FUNDS VS. RUSSELL 2000 INDEX: MARKET CYCLE RESULTS
      Fund Peak-to-Peak
      7/13/07-
      4/29/11      		 Peak-to-Trough
      7/13/07-
      3/9/09      		 Trough-to-Peak
      3/9/09-
      4/29/11      		 Peak-to-Current
      4/29/11-
      12/31/11
      CORE
      Royce Pennsylvania Mutual Fund 11.6% -57.0% 159.4% -14.1%
      Royce Heritage Fund 25.3% -56.6% 188.6% -17.9%
      CORE + DIVIDENDS
      Royce Total Return Fund 6.8% -54.2% 133.4% -9.5%
      Royce Dividend Value Fund 21.6% -53.1% 159.5% -11.8%
      FOCUSED
      Royce Premier Fund 29.9% -49.0% 154.5% -12.1%
      Royce Special Equity Fund 20.8% -42.7% 110.8% -6.7%
      Royce Value Fund 17.4% -54.1% 156.1% -17.2%
      Royce 100 Fund 27.6% -49.7% 153.9% -15.3%
      Royce Special Equity Multi-Cap Fund N/A% N/A% N/A% -2.9%
      OPPORTUNISTIC THEMES
      Royce Low-Priced Stock Fund 27.2% -55.9% 188.3% -21.7%
      Royce Opportunity Fund 6.9% -69.2% 247.5% -19.3%
      Royce Value Plus Fund -3.0% -58.9% 136.1% -17.9%
      MICRO-CAP
      Royce Micro-Cap Fund 24.9% -56.2% 184.9% -20.0%
      Royce Micro-Cap Discovery Fund -6.1% -58.7% 127.5% -8.8%
      MID-CAP
      Royce SMid-Cap Value Fund N/A% N/A% 140.3% -20.0%
      QUALIFIED INVESTOR
      Royce Select Fund I 32.8% -43.5% 135.0% -12.6%
      Index
      Russell 2000 Index 6.6% -58.9% 159.3% -13.5%
      Russell 2000 Value Index -1.4% -61.1% 153.7% -12.8%
      Russell 2000 Growth Index 14.3% -56.8% 164.4% -14.2%

      Important Disclosure Information

      All performance information above reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, so that shares may be worth more or less than their original cost when redeemed. Current performance may be higher or lower than performance quoted.

      For 1-year, 5-year, 10-year and since inception returns for The Royce Funds please visit our Prices and Performance page. Past performance is no guarantee of future results.

      The thoughts concerning recent market movements and future prospects for smaller-company stocks are solely those of Royce & Associates and, of course, there can be no assurance with regard to future market movements. Smaller-company stocks may involve considerably more risk than larger-cap stocks.

      This material is not authorized for distribution unless preceded or accompanied by a current prospectus. Please read the prospectus carefully before investing or sending money.

      All indexes referenced are unmanaged and capitalization weighted. The Russell 2000 is an index of domestic small-cap stocks. It measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 index. The Russell 2000 Value and Growth indexes consist of the respective value and growth stocks within the Russell 2000 as determined by Russell Investments. The S&P 500 is an index of U.S. large-cap stocks selected by Standard & Poor's based on market size, liquidity and industry grouping, among other factors. The Nasdaq Composite is an index of the more than 3,000 common equities listed on the Nasdaq stock exchange.

       

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  • © Royce & Associates, LLC, 745 Fifth Avenue, New York, NY 10151, (800) 221-4268. All rights reserved. Distributor of The Royce Fund and Royce Capital Fund: Royce Fund Services, Inc., a wholly owned subsidiary of Royce & Associates. The Royce Funds are offered and sold only to persons residing in the United States and are offered by prospectus only. The prospectuses include investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing. View our Policies & Procedures, including, among others, our Sarbanes-Oxley Code of Ethics, Privacy Policy and Proxy Voting Guidelines and Procedures.