MAY 2008 What’s New > The Royce Funds Win Seven Lipper Awards Commentaries > 05/01/08: Whitney George on Royce Value Fund We have clearly been in a phase that favors our style of stock-picking, that is, one which starts with strong balance sheets. Within small-cap, higher quality, upper-end companies have worked well for qualitative reasons and because of liquidity concerns. > 04/15/08: Charlie Dreifus on the Importance of Capital Preservation “The mathematics of loss are always unfavorable. Consider, for example, that a 30% loss requires a nearly 43% rebound just to be even again.” The Gannon Report > Technical Difficulties? Frank Gannon: “From our perspective, years of dramatic underperformance has led to compelling valuations and more importantly extremely low expectations for the technology sector... it is our contention that it is now ripe with opportunity.” Making Headlines > WSJ Features Royce Micro–Cap Fund (RYOTX) > Fool.com Likes the Strategy of Royce Low–Priced Stock Fund (RYLPX) > Morningstar Highlights Royce Premier Fund (RYPRX) > April Fund Performance > Have you helped Lighten the Load? eDelivery means less paper’s been hitting mailboxes. Do your part and sign-up now. > Important Prospectus Changes for 2008 New prospectuses dated May 1, 2008, are now available. Two key changes were put into place: 1) Our flagship fund has an enhanced name, Royce Pennsylvania Mutual Fund 2) Lauren Romeo has been added to the Royce Value Fund team as Assistant Portfolio Manager. > Advisor’s Corner Check out our First Quarter 2008 Advisor Review Book for an in–depth recap of the first quarter and the Advisor Flash for quarterly commentary and performance highlights. Log in to our Financial Advisor site to learn more. Please Read the Prospectus Please read the Fund's prospectus carefully and consider a Fund’s investment goals, risks, fees and expenses before investing or sending money. You may obtain a current prospectus for any series of The Royce Funds that contains this and other information. © 2008 Royce & Associates, LLC, 1414 Avenue of the Americas, New York, NY 10019. All rights reserved. Distributor of The Royce Fund and Royce Capital Fund: Royce Fund Services, Inc. View our Policies & Procedures, including, among others, our Sarbanes-Oxley Code of Ethics, Privacy Policy and Proxy Voting Guidelines and Procedures.