2
9/30/2014
10/31/2014
11/21/2014
11/19/1996

At a Glance

Why invest in
Opportunity?

  • Investment goal of long-term growth of capital
  • Broadly diversified portfolio, theme-based, opportunistic value approach
  • Invests primarily in small-cap stocks, up to $2.5 billion
  • Managed by Buzz Zaino, lead manager since 2013 (manager 1998-2013), and Bill Hench since 2013 (assistant portfolio manager 2004-2013)

As of 9/30/2014

Portfolio Management





Performance

Average Annual Total Returns (%)

Outperformed Russell 2000 for the 3-Year, 5-Year, 10-Year, 15-Year and since inception (11/19/1996) periods as of 9/30/2014
QTR YTD 1YR 3YR 5YR 10YR 15YR SINCE INCEPT. DATE
Opportunity -8.99 -6.243.7924.8114.619.0012.2112.82 11/19/1996
Russell 2000 -7.36 -4.413.9321.2614.298.197.938.09 N/A

Annual Operating Expenses: 1.17

OCT YTD 1YR 3YR 5YR 10YR 15YR SINCE INCEPT. DATE
Opportunity 3.09 -3.353.9819.4117.259.2312.4812.94 11/19/1996
Russell 2000 6.59 1.908.0618.1817.398.678.368.44 N/A

Annual Operating Expenses: 1.17

NOV YTD 1YR 3YR 5YR 10YR 15YR SINCE INCEPT. DATE
Opportunity 0.20 -3.151.9522.0616.508.5511.8212.91 11/19/1996
Russell 2000 -0.02 1.886.0820.3016.488.127.838.41 N/A

Annual Operating Expenses: 1.17

Important Performance and Expense Information

All performance information 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 180 days of purchase may be subject to a 1 redemption fee, payable to the Fund which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. 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.

Rolling Returns

On a monthly basis, the Fund outperformed the Russell 2000 in 100% of all 10-Year periods; 84% of all 5-Year periods; 79% of all 3-Year periods; and 69% of all 1-Year periods.

For 100% of the periods, 10-year average annual total returns were greater than 5%; For 52% of the periods, 10-year average annual total returns were greater than 10%.

Relative Returns: Monthly Rolling Average Annual Return Periods 15 Years Through 9/30/2014

periods beating
the index(%)
fund
avg(%)
index
avg(%)
10-year
61/61
100 9.9 7.1
5-year
102/121
84 10.4 7.4
3-year
115/145
79 11.0 7.7
1-year
117/169
69 15.5 9.7

Absolute Returns: 10-Year Monthly Rolling Return PeriodsNumber of 10-Year Average Annual Return Periods Since the Fund’s Inception

Return Range Periods % in Range
> 10% 49 52
> 5% and ≤ 10% 46 48
> 0% and ≤ 5% 0 0
≤ 0% 0 0

The Fund averaged a 11.1% return over all 95 10-year monthly rolling return periods.

Market Cycle Performance

The Fund outperformed the Russell 2000 from the 3/9/00 index peak through 9/30/14 and in each of the two previous full market cycle periods.
Peak-Peak - 03/09/2000 - 07/13/2007
Opportunity191.8%
Russell 200054.8%

Peak-Peak - 07/13/2007 - 04/29/2011
Opportunity6.9%
Russell 20006.6%

Peak-Current - 04/29/2011 - 09/30/2014
Opportunity33.1%
Russell 200033.5%

Calendar Year Total Returns (%)

 

Growth of Investment

Value of $10,000 invested between 11/19/1996 and 9/30/2014

Opportunity$86,209.07
Russell 2000$40,161.56

Portfolio Impactas of 9/30/2014

SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Telecommunication Services
0.6
4.3
0.0
Consumer Staples
1.0
-9.9
-0.1
Health Care
4.3
-11.8
-0.5
Materials
9.6
-5.9
-0.6
Financials
10.4
-7.2
-0.7
Energy
4.9
-24.5
-1.3
Industrials
20.3
-8.1
-1.6
Consumer Discretionary
13.1
-14.3
-1.9
Information Technology
28.5
-7.7
-2.2
Cash
7.4
0.0
0.0

Top Contributors

INDUSTRYSECTORGAIN (%)
Air Freight & LogisticsIndustrials0.1
Building ProductsIndustrials0.0
Professional ServicesIndustrials0.0
Internet & Catalog RetailConsumer Discretionary0.0
Life Sciences Tools & ServicesHealth Care0.0

Top Detractors

INDUSTRYSECTORGAIN (%)
Electronic Equipment, Instruments & ComponentsInformation Technology-0.9
Oil, Gas & Consumable FuelsEnergy-0.7
MachineryIndustrials-0.6
Energy Equipment & ServicesEnergy-0.6
MediaConsumer Discretionary-0.5

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Century AluminumMetals & MiningMaterials0.4
XPO LogisticsAir Freight & LogisticsIndustrials0.1
CTPartners Executive SearchProfessional ServicesIndustrials0.1
Avid TechnologyTechnology Hardware Storage & PeripheralsInformation Technology0.1
Planar SystemsElectronic Equipment, Instruments & ComponentsInformation Technology0.1

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
General CableElectrical EquipmentIndustrials-0.3
Invacare CorporationHealth Care Equipment & SuppliesHealth Care-0.2
Commercial Vehicle GroupMachineryIndustrials-0.2
McClatchy Company (The) Cl. AMediaConsumer Discretionary-0.2
Furmanite CorporationConstruction & EngineeringIndustrials-0.2
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Health Care
4.6
2.8
0.2
Telecommunication Services
0.5
33.7
0.1
Consumer Staples
0.9
-4.6
0.0
Energy
5.5
-5.3
-0.1
Financials
11.0
-6.2
-0.6
Materials
8.8
-9.2
-0.9
Information Technology
27.7
-3.0
-0.9
Industrials
19.9
-6.0
-1.2
Consumer Discretionary
13.8
-16.5
-2.3
Cash
7.2
0.0
0.0

Top Contributors

INDUSTRYSECTORGAIN (%)
Semiconductors & Semiconductor EquipmentInformation Technology0.8
Life Sciences Tools & ServicesHealth Care0.5
Energy Equipment & ServicesEnergy0.2
PharmaceuticalsHealth Care0.1
AirlinesIndustrials0.1

Top Detractors

INDUSTRYSECTORGAIN (%)
Specialty RetailConsumer Discretionary-0.7
Internet Software & ServicesInformation Technology-0.7
Household DurablesConsumer Discretionary-0.5
Metals & MiningMaterials-0.5
Communications EquipmentInformation Technology-0.4

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Century AluminumMetals & MiningMaterials0.6
Albany Molecular ResearchLife Sciences Tools & ServicesHealth Care0.4
SunEdisonSemiconductors & Semiconductor EquipmentInformation Technology0.3
RF Micro DevicesSemiconductors & Semiconductor EquipmentInformation Technology0.2
Spansion Cl. ASemiconductors & Semiconductor EquipmentInformation Technology0.2

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
QuiksilverTextiles, Apparel & Luxury GoodsConsumer Discretionary-0.4
General CableElectrical EquipmentIndustrials-0.3
Invacare CorporationHealth Care Equipment & SuppliesHealth Care-0.3
ITT Educational ServicesDiversified Consumer ServicesConsumer Discretionary-0.2
OM GroupChemicalsMaterials-0.2
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Information Technology
27.2
6.4
1.5
Industrials
20.1
6.4
1.3
Health Care
4.7
24.6
1.2
Financials
11.3
6.4
0.9
Energy
5.6
4.2
0.5
Materials
8.7
4.2
0.2
Telecommunication Services
0.4
19.7
0.1
Consumer Staples
0.8
-6.1
0.0
Consumer Discretionary
13.9
-8.2
-0.9
Cash
7.3
0.0
0.0

Top Contributors

INDUSTRYSECTORGAIN (%)
Semiconductors & Semiconductor EquipmentInformation Technology1.9
MachineryIndustrials0.7
Life Sciences Tools & ServicesHealth Care0.6
Building ProductsIndustrials0.5
Energy Equipment & ServicesEnergy0.5

Top Detractors

INDUSTRYSECTORGAIN (%)
Specialty RetailConsumer Discretionary-0.6
Internet Software & ServicesInformation Technology-0.5
Construction & EngineeringIndustrials-0.4
Household DurablesConsumer Discretionary-0.3
Electrical EquipmentIndustrials-0.3

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Century AluminumMetals & MiningMaterials0.7
SunEdisonSemiconductors & Semiconductor EquipmentInformation Technology0.6
Spansion Cl. ASemiconductors & Semiconductor EquipmentInformation Technology0.3
AerCap HoldingsTrading Companies & DistributorsIndustrials0.3
Matrix ServiceEnergy Equipment & ServicesEnergy0.3

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
General CableElectrical EquipmentIndustrials-0.4
QuiksilverTextiles, Apparel & Luxury GoodsConsumer Discretionary-0.3
Rubicon TechnologySemiconductors & Semiconductor EquipmentInformation Technology-0.3
Layne ChristensenConstruction & EngineeringIndustrials-0.3
MolycorpMetals & MiningMaterials-0.3
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Consumer Discretionary
17.1
135.3
26.2
Industrials
19.9
135.2
25.1
Information Technology
24.6
70.4
17.6
Financials
12.4
94.9
11.9
Materials
9.2
106.4
11.0
Health Care
3.8
160.5
4.8
Energy
5.0
80.5
4.2
Consumer Staples
0.9
17.9
0.5
Telecommunication Services
0.5
30.2
0.3
Diversified Investment Companies
0.0
6.1
0.0
Cash
6.7
0.2
0.0
Unclassified
0.0
-2.6
0.0

Top Contributors

INDUSTRYSECTORGAIN (%)
Semiconductors & Semiconductor EquipmentInformation Technology8.0
MachineryIndustrials7.7
Specialty RetailConsumer Discretionary6.8
ChemicalsMaterials6.7
Building ProductsIndustrials6.3

Top Detractors

INDUSTRYSECTORGAIN (%)
Electrical EquipmentIndustrials-0.4
Diversified Financial ServicesFinancials-0.3
Personal ProductsConsumer Staples-0.1
MarineIndustrials-0.1
Diversified Consumer ServicesConsumer Discretionary0.0

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Cost PlusSpecialty RetailConsumer Discretionary1.6
Apogee EnterprisesBuilding ProductsIndustrials1.6
Cambrex CorporationLife Sciences Tools & ServicesHealth Care1.4
Louisiana-Pacific CorporationPaper & Forest ProductsMaterials1.3
United RentalsTrading Companies & DistributorsIndustrials1.2

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Walter EnergyMetals & MiningMaterials-0.6
General CableElectrical EquipmentIndustrials-0.4
Overseas Shipholding GroupOil, Gas & Consumable FuelsEnergy-0.3
Tower Group InternationalInsuranceFinancials-0.3
Furniture Brands InternationalHousehold DurablesConsumer Discretionary-0.3
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Industrials
18.9
178.8
29.3
Consumer Discretionary
18.5
132.2
26.8
Information Technology
25.5
72.8
22.9
Materials
9.8
137.8
13.7
Financials
11.2
58.6
7.8
Energy
4.8
68.6
4.4
Health Care
3.4
121.5
3.9
Consumer Staples
0.9
56.6
0.4
Telecommunication Services
0.5
61.6
0.4
Utilities
0.0
20.1
0.1
Diversified Investment Companies
0.0
6.1
0.0
Cash
6.3
0.3
0.0
Unclassified
0.2
-71.5
-0.1

Top Contributors

INDUSTRYSECTORGAIN (%)
MachineryIndustrials12.5
Semiconductors & Semiconductor EquipmentInformation Technology10.7
Specialty RetailConsumer Discretionary7.6
ChemicalsMaterials7.4
Electronic Equipment, Instruments & ComponentsInformation Technology6.8

Top Detractors

INDUSTRYSECTORGAIN (%)
MarineIndustrials-0.9
Diversified Financial ServicesFinancials-0.5
Electrical EquipmentIndustrials-0.5
Internet & Catalog RetailConsumer Discretionary-0.4
Professional ServicesIndustrials-0.3

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Dillard's Cl. AMultiline RetailConsumer Discretionary2.5
Cost PlusSpecialty RetailConsumer Discretionary2.1
United RentalsTrading Companies & DistributorsIndustrials1.9
NanometricsSemiconductors & Semiconductor EquipmentInformation Technology1.5
PolyOne CorporationChemicalsMaterials1.4

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Network Equipment TechnologiesCommunications EquipmentInformation Technology-1.1
Overseas Shipholding GroupOil, Gas & Consumable FuelsEnergy-1.0
Furniture Brands InternationalHousehold DurablesConsumer Discretionary-0.9
Aviat NetworksCommunications EquipmentInformation Technology-0.7
Walter EnergyMetals & MiningMaterials-0.6

Risk

Down Market Performance Comparisonas of 9/30/2014

The Fund outperformed the Russell 2000 during five out of 11 downturns of 7.5% or more from the index’s prior historical high over the last 15 years.

Market Downturns (%)

Russell 2000 Down Quarters

QUARTER ENDRUSSELL 2000 (%)OPPORTUNITY (%)SPREAD (%)
9/30/2014-7.4-9.0-1.6
6/30/2012-3.5-5.3-1.8
9/30/2011-21.9-28.0-6.1
6/30/2011-1.6-3.9-2.3
6/30/2010-9.9-12.0-2.1
3/31/2009-15.0-12.9+2.1
12/31/2008-26.1-36.3-10.2
9/30/2008-1.1-4.0-2.9
3/31/2008-9.9-9.3+0.6
12/31/2007-4.6-7.7-3.1
9/30/2007-3.1-5.9-2.8
6/30/2006-5.0-5.9-0.9
3/31/2005-5.3-4.4+0.9
9/30/2004-2.9-4.5-1.6
3/31/2003-4.5-6.1-1.6
9/30/2002-21.4-27.8-6.4
6/30/2002-8.4-5.9+2.5
9/30/2001-20.8-19.0+1.8
3/31/2001-6.5+4.2+10.7
12/31/2000-6.9-5.8+1.1
6/30/2000-3.8-1.7+2.1

Capture Ratios Fund's First Full Quarter (12/31/1996) to 12/31/2013

Upside Capture Ratio measures a manager's performance in up markets relative to the Fund's benchmark. It is calculated by measuring the Fund's performance in quarters when the benchmark goes 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.

Long Term Risk Measurementas of

Over the past 10 years, the Fund outperformed the Russell 2000.
Over the past 5 years, the Fund outperformed the Russell 2000.
Over the past 3 years, the Fund outperformed the Russell 2000.

Go to Relative Risk Spectrum Tool

Morningstar Statistical Measures as of 9/30/2014

Sharpe RatioStandard Deviation
Opportunity0.4124.56
Russell 20000.4219.83
Category Median0.4419.38
Best Quartile Breakpoint0.4918.54

Category Median and Best Quartile Breakpoint based on 292 small-cap objective funds (oldest class only) with at least ten years of history.
Sharpe Ratio Standard Deviation
Opportunity
Russell 2000
Category Median
Best Quartile Breakpoint

Composition

Morningstar Style Map™ as of 6/30/2014

mstar-RYPNX

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. The shaded area represents the center 75% of the Fund's assets while the plot point in the middle represents the weighted average of its holdings. Over time, the shape and location of a fund's ownership zone may vary.

Market Cap Exposureas of 9/30/2014

  • Avg.
    Market Cap
    $739.0M

Diagnosticsas of 9/30/2014

Weighted Avg. P/B
1.3x
2013 Portfolio Turnover
39%
89%

Portfolio Allocation

  • Broadly
    Diversified
     
  • Total
    Holdings
    313
  • Holdings ≥ 75%
    of Total Investments
    158


SECTORS
RYPNX (%) RUSSELL
2000 (%)
Information Technology
28.8
18.0
Industrials
20.7
13.8
Consumer Discretionary
12.6
13.3
Financials
10.6
23.8
Materials
9.7
5.0
Energy
4.6
5.5
Health Care
4.0
13.4
Consumer Staples
0.9
3.3
Telecommunication Services
0.6
0.8
Utilities
-
3.2
Cash and Cash Equivalents
7.5
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
NCI Building Systems
0.9
Sanmina Corporation
0.8
Microsemi Corporation
0.8
Kaiser Aluminum
0.8
Commercial Metals
0.8
Century Aluminum
0.8
RTI International Metals
0.8
Mueller Industries
0.7
Ingram Micro Cl. A
0.7
Advanced Energy Industries
0.7
Albany Molecular Research
0.7
Vishay Intertechnology
0.7
Mueller Water Products Cl. A
0.7
Federal Signal
0.7
Aegion Corporation
0.6
Apogee Enterprises
0.6
XPO Logistics
0.6
Dana Holding Corporation
0.6
Quanex Building Products
0.6
Benchmark Electronics
0.6
Top 20 as % of Net Assets
14.2

SECTORS
RYPNX (%) RUSSELL
2000 (%)
Information Technology
28.8
18.0
Industrials
20.7
13.8
Consumer Discretionary
12.6
13.3
Financials
10.6
23.8
Materials
9.7
5.0
Energy
4.6
5.5
Health Care
4.0
13.4
Consumer Staples
0.9
3.3
Telecommunication Services
0.6
0.8
Utilities
-
3.2
Cash and Cash Equivalents
7.5
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
NCI Building Systems
0.9
Sanmina Corporation
0.8
Microsemi Corporation
0.8
Kaiser Aluminum
0.8
Commercial Metals
0.8
Century Aluminum
0.8
RTI International Metals
0.8
Mueller Industries
0.7
Ingram Micro Cl. A
0.7
Advanced Energy Industries
0.7
Albany Molecular Research
0.7
Vishay Intertechnology
0.7
Mueller Water Products Cl. A
0.7
Federal Signal
0.7
Aegion Corporation
0.6
Apogee Enterprises
0.6
XPO Logistics
0.6
Dana Holding Corporation
0.6
Quanex Building Products
0.6
Benchmark Electronics
0.6
Top 20 as % of Net Assets
14.2

Portfolio Holdings

View the complete list of holdings for this fund as of 9/30/2014. Unaudited schedule of portfolio holdings is presented for informational purposes only.

Least Portfolio Overlap

Greatest Portfolio Overlap

Investment Themes as a Percentage of Assets

Geographical Breakdown

Distributions

NAV & Distributions


Start DateEnd Date
to

Learn more about distributions

Distributions

RECORD
DATE
EX-DATE PAYABLE
DATE
INCOME ($) SHORT
TERM
GAINS ($)
LONG
TERM
GAINS ($)
RETURN OF
CAPITAL ($)
TOTAL ($) REINVEST
PRICE ($)
12/16/2014 12/17/2014 12/17/2014 - EST 0.1100 EST 1.8000 - EST 1.9100 -
12/4/2013 12/5/2013 12/5/2013 0.0000 0.0218 1.5136 - 1.5354 14.84
12/5/2012 12/6/2012 12/6/2012 0.0000 0.1317 0.5382 - 0.6699 11.42
12/7/2011 12/8/2011 12/8/2011 0.0000 - 0.1887 - 0.1887 9.96
12/8/2009 12/9/2009 12/9/2009 0.0010 - - - 0.0010 8.56

NAV History for

Fees & Expenses

Shareholder Fees (%)

(fees paid directly from your investment)

Maximum sales charge (load) imposed on purchases 0.00
Maximum deferred sales charge 0.00
Maximum sales charge (load) imposed on reinvested dividends 0.00
Redemption fee (as a percentage of amount redeemed on shares held for less than 180 days) 1.00

Annual Fund Operating Expenses (%)

(expenses that you pay each year as a percentage of the value of your investment)

Management fees 0.99
Distribution (12b-1) fees 0.00
Other expenses 0.17
Acquired fund fees and expenses 0.01
Total annual Fund operating expenses 1.17
Total annual Fund operating expenses may differ from the expense ratio in the Fund's Financial Highlights because they include only the Fund's direct operating expenses and do not include acquired fund fees and expenses, which 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.

Important Disclosure Information

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. The Fund invests primarily in small-cap stocks, which may involve considerably more risk than investing in larger-cap stocks. (Please see "Primary Risks for Fund Investors" in the prospectus.) The Fund’s broadly diversified portfolio does not ensure a profit or guarantee against loss.

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.

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. Please read the prospectus for a more complete discussion of risk. 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 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 performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.

Managed by Buzz Zaino, lead manager since 2013 (manager 1998-2013), and Bill Hench since 2013 (assistant portfolio manager 2004-2013)

11/19/1996 12:00:00 AM
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