At a Glance

Overview

Investment Objective

Long-term growth of capital — may invest in both long and short positions

Portfolio Approach

Focused portfolio, theme-based, opportunistic value approach

Primary Market Cap Range

Small-cap stocks, up to $2.5 billion

Manager Tenure

Bill Hench since 2010, assistant Buzz Zaino since 2010

As of 6/30/2014

Portfolio Manager




Performance

Average Annual Total Returns (%)

Outperformed Russell 2000 for the 1-Year, 3-Year and since inception (8/31/2010) periods as of 6/30/2014
QTR YTD 1YR 3YR SINCE INCEPT. DATE
Opportunity Select -2.47 3.2926.7219.1622.46 8/31/2010
Russell 2000 2.05 3.1923.6414.5721.19 N/A

Annual Operating Expenses: Gross 1.78% Net 1.29%

AUG YTD 1YR 3YR SINCE INCEPT. DATE
Opportunity Select 5.51 1.4519.4025.6820.86 8/31/2010
Russell 2000 4.96 1.7517.6819.0019.79 N/A

Annual Operating Expenses: Gross 1.78% Net 1.29%

SEP YTD 1YR 3YR SINCE INCEPT. DATE
Opportunity Select -3.52 -2.128.9724.9719.57 8/31/2010
Russell 2000 -2.31 -0.6010.1918.7718.88 N/A

Annual Operating Expenses: Gross 1.78% Net 1.29%

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. Gross operating expenses reflect the Fund's total gross annual operating expenses and include management fees, dividends on securities sold short, 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 Funds most current prospectus. Royce & Associates has contractually agreed to waive fees and/or reimburse operating expenses to the extent necessary to maintain the Fund's net annual operating expenses, other than dividends on securities sold short, and interest expense on borrowing, at or below 1.24% through April 30, 2015.

Rolling Returns

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

Monthly Rolling Average Annual Return Periods Since Inception Through 6/30/2014

periods beating
the index(%)
fund
avg(%)
index
avg(%)
3-year
11/11
100 18.4 15.4
1-year
24/35
69 20.7 16.2

Market Cycle Performance

The Fund outperformed the Russell 2000 from its inception and the 4/29/11 index peak through 6/30/14.
Inception-Current - 08/31/2010 - 06/30/2014
Opportunity Select117.3%
Russell 2000108.8%

Peak-Current - 04/29/2011 - 06/30/2014
Opportunity Select55.0%
Russell 200044.2%

Calendar Year Total Returns (%)

 

Growth of Investment

Value of $10,000 invested between 8/31/2010 and 6/30/2014

Opportunity Select$21,727.06
Russell 2000$20,880.41

Portfolio Impactas of 6/30/2014

SECTOR NAMEAVERAGE WEIGHT(%)TOTAL RETURN(%)CONTRIBUTION TO RETURN(%)
Energy9.817.61.7
Health Care2.5-5.60.1
Financials9.90.00.0
Consumer Staples0.4-6.30.0
Consumer Discretionary12.6-2.5-0.4
Materials10.0-4.2-0.4
Industrials18.8-2.3-0.5
Information Technology28.3-5.6-1.8
Cash7.90.00.0

Top Contributors

INDUSTRYSECTORGAIN(%)
Oil, Gas & Consumable FuelsEnergy1.6
Auto ComponentsConsumer Discretionary0.3
AirlinesIndustrials0.3
Real Estate Management & DevelopmentFinancials0.3
Internet Software & ServicesInformation Technology0.2

Top Detractors

INDUSTRYSECTORGAIN(%)
Electrical EquipmentIndustrials-1.0
Communications EquipmentInformation Technology-0.8
Textiles, Apparel & Luxury GoodsConsumer Discretionary-0.6
Semiconductors & Semiconductor EquipmentInformation Technology-0.3
SoftwareInformation Technology-0.3

Top Contributors

COMPANYINDUSTRYSECTORGAIN(%)
Goodrich PetroleumOil, Gas & Consumable FuelsEnergy0.8
Tower InternationalAuto ComponentsConsumer Discretionary0.3
JetBlue AirwaysAirlinesIndustrials0.3
Swift EnergyOil, Gas & Consumable FuelsEnergy0.3
Kennedy-Wilson HoldingsReal Estate Management & DevelopmentFinancials0.3

Top Detractors

COMPANYINDUSTRYSECTORGAIN(%)
PowerSecure InternationalElectrical EquipmentIndustrials-1.0
NeoPhotonics CorporationSemiconductors & Semiconductor EquipmentInformation Technology-0.7
QuiksilverTextiles, Apparel & Luxury GoodsConsumer Discretionary-0.6
Extreme NetworksCommunications EquipmentInformation Technology-0.4
Datalink CorporationIT ServicesInformation Technology-0.3
SECTOR NAMEAVERAGE WEIGHT(%)TOTAL RETURN(%)CONTRIBUTION TO RETURN(%)
Energy9.818.71.9
Industrials19.65.81.2
Financials10.05.30.5
Information Technology28.42.90.5
Health Care2.112.10.4
Consumer Staples0.54.80.1
Consumer Discretionary13.0-1.7-0.2
Materials8.6-6.1-0.5
Cash8.10.00.0
Unassigned---0.6
Total--3.3

Top Contributors

INDUSTRYSECTORGAIN(%)
Oil, Gas & Consumable FuelsEnergy1.7
Semiconductors & Semiconductor EquipmentInformation Technology1.5
MachineryIndustrials0.9
Auto ComponentsConsumer Discretionary0.7
Health Care Equipment & SuppliesHealth Care0.4

Top Detractors

INDUSTRYSECTORGAIN(%)
Communications EquipmentInformation Technology-1.0
Textiles, Apparel & Luxury GoodsConsumer Discretionary-0.8
Electrical EquipmentIndustrials-0.7
InsuranceFinancials-0.4
Paper & Forest ProductsMaterials-0.3

Top Contributors

COMPANYINDUSTRYSECTORGAIN(%)
RF Micro DevicesSemiconductors & Semiconductor EquipmentInformation Technology0.8
Goodrich PetroleumOil, Gas & Consumable FuelsEnergy0.8
Tower InternationalAuto ComponentsConsumer Discretionary0.7
SunEdisonSemiconductors & Semiconductor EquipmentInformation Technology0.6
Warren ResourcesOil, Gas & Consumable FuelsEnergy0.6

Top Detractors

COMPANYINDUSTRYSECTORGAIN(%)
Extreme NetworksCommunications EquipmentInformation Technology-0.8
QuiksilverTextiles, Apparel & Luxury GoodsConsumer Discretionary-0.8
PowerSecure InternationalElectrical EquipmentIndustrials-0.6
Hercules OffshoreEnergy Equipment & ServicesEnergy-0.6
NeoPhotonics CorporationSemiconductors & Semiconductor EquipmentInformation Technology-0.5
SECTOR NAMEAVERAGE WEIGHT(%)TOTAL RETURN(%)CONTRIBUTION TO RETURN(%)
Information Technology28.528.58.2
Industrials18.433.75.9
Financials12.036.44.6
Energy9.256.14.3
Consumer Discretionary13.613.82.0
Materials7.326.81.5
Health Care1.862.71.1
Consumer Staples0.6-7.0-0.1
Cash8.40.00.0
Unassigned---0.7
Total--26.7

Top Contributors

INDUSTRYSECTORGAIN(%)
Semiconductors & Semiconductor EquipmentInformation Technology5.3
Oil, Gas & Consumable FuelsEnergy3.1
BanksFinancials2.0
MachineryIndustrials2.0
Energy Equipment & ServicesEnergy1.2

Top Detractors

INDUSTRYSECTORGAIN(%)
Electrical EquipmentIndustrials-0.6
InsuranceFinancials-0.4
MarineIndustrials-0.2
BeveragesConsumer Staples-0.1
Internet & Catalog RetailConsumer Discretionary-0.1

Top Contributors

COMPANYINDUSTRYSECTORGAIN(%)
SunEdisonSemiconductors & Semiconductor EquipmentInformation Technology1.3
Goodrich PetroleumOil, Gas & Consumable FuelsEnergy1.2
Independent Bank GroupBanksFinancials1.2
Intersil Corporation Cl. ASemiconductors & Semiconductor EquipmentInformation Technology1.1
Kennedy-Wilson HoldingsReal Estate Management & DevelopmentFinancials1.0

Top Detractors

COMPANYINDUSTRYSECTORGAIN(%)
Hercules OffshoreEnergy Equipment & ServicesEnergy-0.7
NeoPhotonics CorporationSemiconductors & Semiconductor EquipmentInformation Technology-0.6
PowerSecure InternationalElectrical EquipmentIndustrials-0.5
QuiksilverTextiles, Apparel & Luxury GoodsConsumer Discretionary-0.4
MBIAInsuranceFinancials-0.3
SECTOR NAMEAVERAGE WEIGHT(%)TOTAL RETURN(%)CONTRIBUTION TO RETURN(%)
Consumer Discretionary14.0154.719.5
Industrials16.480.814.3
Information Technology26.040.314.2
Financials11.8118.612.4
Energy9.673.04.8
Materials7.919.62.4
Health Care1.173.40.3
Diversified Investment Companies0.14.30.1
Telecommunication Services0.1-34.1-0.5
Consumer Staples1.6-38.5-3.0
Cash11.40.20.0
Unassigned--4.9
Total--69.2

Top Contributors

INDUSTRYSECTORGAIN(%)
Semiconductors & Semiconductor EquipmentInformation Technology12.7
Household DurablesConsumer Discretionary7.4
Specialty RetailConsumer Discretionary6.0
SoftwareInformation Technology5.8
Building ProductsIndustrials5.5

Top Detractors

INDUSTRYSECTORGAIN(%)
Communications EquipmentInformation Technology-5.1
Food & Staples RetailingConsumer Staples-3.3
Construction & EngineeringIndustrials-1.4
Internet Software & ServicesInformation Technology-1.4
Paper & Forest ProductsMaterials-1.4

Top Contributors

COMPANYINDUSTRYSECTORGAIN(%)
Ellie MaeSoftwareInformation Technology5.8
Standard PacificHousehold DurablesConsumer Discretionary5.2
Lithia Motors Cl. ASpecialty RetailConsumer Discretionary4.0
Radian GroupThrifts & Mortgage FinanceFinancials3.2
SunEdisonSemiconductors & Semiconductor EquipmentInformation Technology3.0

Top Detractors

COMPANYINDUSTRYSECTORGAIN(%)
Century AluminumMetals & MiningMaterials-2.6
SUPERVALUFood & Staples RetailingConsumer Staples-2.3
Powerwave TechnologiesCommunications EquipmentInformation Technology-2.2
Smith Micro SoftwareSoftwareInformation Technology-2.1
Alpha & Omega SemiconductorSemiconductors & Semiconductor EquipmentInformation Technology-1.7
SECTOR NAMEAVERAGE WEIGHT(%)TOTAL RETURN(%)CONTRIBUTION TO RETURN(%)
Total--0.0

Top Contributors

INDUSTRYSECTORGAIN(%)

Top Detractors

INDUSTRYSECTORGAIN(%)

Top Contributors

COMPANYINDUSTRYSECTORGAIN(%)

Top Detractors

COMPANYINDUSTRYSECTORGAIN(%)

Risk

Down Market Performance Comparisonas of 6/30/2014

The Fund outperformed the Russell 2000 during one out of three downturns of 7.5% or more from the index’s prior historical high since the Fund’s inception.

Market Downturns (%)

Russell 2000 Down Quarters

QUARTER ENDRUSSELL 2000 (%)OPPORTUNITY SELECT (%)SPREAD (%)
6/30/2012-3.5-1.1+2.4
9/30/2011-21.9-26.2-4.3
6/30/2011-1.6-6.9-5.3

Capture Ratios

DATE UP DOWN
From Fund's First Full Quarter
(9/30/2010 - 6/30/2014)
121% 128%

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 3 years, the Fund outperformed the Russell 2000.

Go to Relative Risk Spectrum Tool

Morningstar Statistical Measures as of 6/30/2014

Sharpe RatioStandard Deviation

Sharpe Ratio Standard Deviation
Opportunity Select
Russell 2000
Category Median
Best Quartile Breakpoint

Composition

Market Cap Exposureas of 6/30/2014

  • Micro-Cap
    $849.6M
    Avg. Market Cap

Diagnosticsas of 6/30/2014

Weighted Avg. P/B
1.7x
2013 Portfolio Turnover
129%
101%

Portfolio Exposureas of 6/30/2014

EXPOSURE(%) NUMBER OF POSITIONS
Long 99.2 99
Short -5.1 14
Net 94.0 113
Gross 104.3

Portfolio Allocation as of 6/30/2014

  • Focused
    113
    Positions

SECTORSLONG(%)SHORT(%)NET(%)Russell 2000(%)
Information Technology30.6-0.330.317.9
Industrials19.2-0.219.013.8
Materials12.5-0.512.05.1
Energy10.6-10.66.4
Consumer Discretionary13.1-3.29.913.3
Financials9.3-9.323.0
Health Care4.0-4.013.3
Telecommunication Services---0.8
Utilities---3.4
Diversified Investment Companies--0.3-0.3-
Consumer Staples--0.6-0.63.1
Cash and Cash Equivalents6.0-6.0-
LONG POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Extreme Networks
2.1
M.D.C. Holdings
2.1
AK Steel Holding Corporation
1.9
Air Lease Cl. A
1.9
OM Group
1.8
Swift Energy
1.8
RTI International Metals
1.8
Orient-Express Hotels Cl. A
1.6
Louisiana-Pacific Corporation
1.6
Kennedy-Wilson Holdings
1.6
Top 10 as % of Net Assets
18.3
SHORT POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Lumber Liquidators Holdings
-0.6
Vitamin Shoppe
-0.6
CF Industries Holdings
-0.5
Popeyes Louisiana Kitchen
-0.5
Life Time Fitness
-0.4
Fresh Market (The)
-0.3
iShares Russell 2000 ETF
-0.3
Buffalo Wild Wings
-0.3
Zillow Cl. A
-0.3
Fiesta Restaurant Group
-0.3
Top 10 as % of Net Assets
-4.2

Portfolio Holdings

View the complete list of holdings for this fund as of 6/30/2014. Unaudited schedule of portfolio holdings is presented for informational purposes only.

Least Portfolio Overlap

Greatest Portfolio Overlap

Investment Themes as a Percentage of Assets

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 ($) REINVEST
PRICE ($)
12/11/2013 12/12/2013 12/12/2013 0.0000 0.2028 0.3520 - 0.5548 16.72
12/12/2012 12/13/2012 12/13/2012 0.1271 0.8221 0.1382 - 1.0874 12.11
12/14/2011 12/15/2011 12/15/2011 0.0171 0.3955 - - 0.4126 9.84

NAV History for

Fees & Expenses

Shareholder Fees (%)

(fees paid directly from your investment)

Maximum sales charge (load) imposed on purchases0.00
Maximum deferred sales charge on purchases held for less than 365 days1.00
Maximum deferred sales charge0.00
Maximum sales charge (load) imposed on reinvested dividends0.00
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 1.00
Distribution (12b-1) fees 0.00
Dividends on securities sold short 0.05
Other expenses 0.73
Total annual Fund operating expenses 1.78
Fee waivers and/or expense reimbursements (0.49)
Total annual Fund operating expenses after fee waivers and/or expense reimbursements1.29

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 companies, which may involve considerably more risk than investing in larger-cap stocks. The Fund also invests primarily in a limited number of stocks, which may involve considerably more risk than a less concentrated portfolio because a decline in the value of these stocks would cause the Fund's overall value to decline to a greater degree. (Please see "Primary Risks for Fund Investors" in the prospectus.) The Fund may sell securities short which involves selling a security it does not own in anticipation that the security's price will decline. Short sales present unlimited risk on an individual stock basis since the Fund may be required to buy the security sold short at a time when the security has appreciated in value. The Fund may invest up to 25% of its net assets in foreign securities (measured at the time of investment), which may involve political, economic, currency, and other risks not encountered in U.S. investments. (Please see "Investing in Foreign Securities" in the prospectus.)

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-to-Book, or P/B, Ratio is calculated by dividing a company's share price by its book value per share. 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.

8/31/2010 12:00:00 AM
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