5
9/30/2014
10/31/2014
11/25/2014
11/18/1998

At a Glance

Why invest in
Select I?

  • Investment goal of long-term growth of capital
  • May invest in both long and short positions
Long portfolio: Focused portfolio, disciplined value approach
  • Invests primarily in small-cap and mid-cap stocks, up to $5 billion
  • Managed by Lauren Romeo since 2009 (co-manager 2006-2009 and assistant portfolio manager 2005-2006), assistant Chuck Royce since 2009 (co-manager 2006-2009 and portfolio manager 1998-2006)

As of 9/30/2014

Portfolio Management




Performance

Average Annual Total Returns (%)

Outperformed Russell 2000 for the 1-Year, 10-Year, 15-Year and since inception (11/18/1998) periods as of 9/30/2014
QTR YTD 1YR 3YR 5YR 10YR 15YR SINCE INCEPT. DATE
Select I -8.11 -2.036.5317.2510.719.8412.0513.32 11/18/1998
Russell 2000 -7.36 -4.413.9321.2614.298.197.938.15 N/A

Annual Operating Expenses: 1.20

OCT YTD 1YR 3YR 5YR 10YR 15YR SINCE INCEPT. DATE
Select I 3.22 1.126.7813.1512.1810.1912.4313.47 11/18/1998
Russell 2000 6.59 1.908.0618.1817.398.678.368.53 N/A

Annual Operating Expenses: 1.20

NOV YTD 1YR 3YR 5YR 10YR 15YR SINCE INCEPT. DATE
Select I 0.50 1.635.0916.8511.359.4612.1313.44 11/18/1998
Russell 2000 N/A N/AN/AN/AN/AN/AN/AN/A N/A

Annual Operating Expenses: 1.20

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 and other expenses.

Rolling Returns

On a monthly basis, the Fund outperformed the Russell 2000 in 100% of all 10-Year periods; 86% of all 5-Year periods; 77% of all 3-Year periods; and 63% of all 1-Year periods.

For 100% of the periods, 10-year average annual total returns were greater than 5%; For 93% 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 11.4 7.1
5-year
104/121
86 11.6 7.4
3-year
111/145
77 11.5 7.7
1-year
107/169
63 13.5 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% 66 93
> 5% and ≤ 10% 5 7
> 0% and ≤ 5% 0 0
≤ 0% 0 0

The Fund averaged a 11.4% return over all 71 10-year monthly rolling return periods.

Market Cycle Performance

The Fund outperformed the Russell 2000 from the 3/9/00 and 7/13/07 index peaks through 9/30/14 and in each of the two previous full market cycle periods.
Peak-Peak - 03/09/2000 - 07/13/2007
Select I188.2%
Russell 200054.8%

Peak-Peak - 07/13/2007 - 04/29/2011
Select I32.8%
Russell 20006.6%

Peak-Current - 04/29/2011 - 09/30/2014
Select I22.6%
Russell 200033.5%

Calendar Year Total Returns (%)

 

Growth of Investment

Value of $10,000 invested between 11/18/1998 and 9/30/2014

Select I$72,681.83
Russell 2000$34,641.85

Portfolio Impactas of 9/30/2014

SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Financials
11.5
-2.2
-0.2
Health Care
8.1
-6.8
-0.5
Information Technology
17.9
-3.6
-0.6
Consumer Staples
2.8
-20.5
-0.7
Materials
7.9
-9.0
-0.7
Energy
11.2
-11.4
-1.3
Consumer Discretionary
10.5
-11.3
-1.3
Industrials
20.6
-11.7
-2.4
Cash
9.4
0.0
0.0

Top Contributors

INDUSTRYSECTORGAIN (%)
Food ProductsConsumer Staples0.2
BanksFinancials0.0
Aerospace & DefenseIndustrials0.0
BiotechnologyHealth Care0.0
Household DurablesConsumer Discretionary0.0

Top Detractors

INDUSTRYSECTORGAIN (%)
Energy Equipment & ServicesEnergy-1.3
MachineryIndustrials-1.2
Personal ProductsConsumer Staples-0.9
Electrical EquipmentIndustrials-0.9
Specialty RetailConsumer Discretionary-0.6

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Cal-Maine FoodsFood ProductsConsumer Staples0.2
MKS InstrumentsSemiconductors & Semiconductor EquipmentInformation Technology0.2
SEI InvestmentsCapital MarketsFinancials0.1
Tessera TechnologiesSemiconductors & Semiconductor EquipmentInformation Technology0.1
TimkenSteel CorporationMetals & MiningMaterials0.1

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Nu Skin Enterprises Cl. APersonal ProductsConsumer Staples-0.9
GrafTech InternationalElectrical EquipmentIndustrials-0.6
Unit CorporationEnergy Equipment & ServicesEnergy-0.5
TGS-NOPEC GeophysicalEnergy Equipment & ServicesEnergy-0.4
Medicines Company (The)PharmaceuticalsHealth Care-0.4
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Energy
12.1
12.4
1.7
Health Care
8.1
13.0
1.1
Financials
10.7
5.3
0.5
Information Technology
18.2
0.7
0.1
Consumer Staples
2.1
-9.4
-0.4
Materials
7.9
-11.1
-1.0
Consumer Discretionary
9.9
-8.1
-1.0
Industrials
21.5
-10.2
-2.1
Cash
9.5
0.0
0.0

Top Contributors

INDUSTRYSECTORGAIN (%)
Energy Equipment & ServicesEnergy1.7
BiotechnologyHealth Care1.4
Semiconductors & Semiconductor EquipmentInformation Technology1.0
Food ProductsConsumer Staples0.5
Capital MarketsFinancials0.5

Top Detractors

INDUSTRYSECTORGAIN (%)
Electrical EquipmentIndustrials-1.2
Personal ProductsConsumer Staples-0.9
MachineryIndustrials-0.8
Specialty RetailConsumer Discretionary-0.8
ChemicalsMaterials-0.6

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Myriad GeneticsBiotechnologyHealth Care1.4
Helmerich & PayneEnergy Equipment & ServicesEnergy0.7
Pason SystemsEnergy Equipment & ServicesEnergy0.6
Cal-Maine FoodsFood ProductsConsumer Staples0.5
Unit CorporationEnergy Equipment & ServicesEnergy0.5

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Nu Skin Enterprises Cl. APersonal ProductsConsumer Staples-0.9
Medicines Company (The)PharmaceuticalsHealth Care-0.7
GrafTech InternationalElectrical EquipmentIndustrials-0.7
Ascena Retail GroupSpecialty RetailConsumer Discretionary-0.7
CIRCOR InternationalMachineryIndustrials-0.4
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Energy
12.4
19.9
2.6
Information Technology
18.9
11.4
2.4
Health Care
8.2
25.6
2.1
Financials
10.3
16.4
1.5
Consumer Discretionary
9.7
3.6
0.2
Consumer Staples
2.0
13.7
-0.1
Industrials
21.1
-1.4
-0.1
Materials
8.0
-6.1
-0.5
Cash
9.4
0.0
0.0

Top Contributors

INDUSTRYSECTORGAIN (%)
Energy Equipment & ServicesEnergy2.6
Semiconductors & Semiconductor EquipmentInformation Technology2.1
Capital MarketsFinancials1.3
BiotechnologyHealth Care1.2
Food ProductsConsumer Staples0.8

Top Detractors

INDUSTRYSECTORGAIN (%)
Personal ProductsConsumer Staples-0.9
Electrical EquipmentIndustrials-0.7
Specialty RetailConsumer Discretionary-0.5
Technology Hardware Storage & PeripheralsInformation Technology-0.4
Communications EquipmentInformation Technology-0.3

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Helmerich & PayneEnergy Equipment & ServicesEnergy1.4
Myriad GeneticsBiotechnologyHealth Care1.2
Cal-Maine FoodsFood ProductsConsumer Staples0.8
Jazz PharmaceuticalsPharmaceuticalsHealth Care0.8
Unit CorporationEnergy Equipment & ServicesEnergy0.8

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Nu Skin Enterprises Cl. APersonal ProductsConsumer Staples-0.9
Medicines Company (The)PharmaceuticalsHealth Care-0.6
Ascena Retail GroupSpecialty RetailConsumer Discretionary-0.6
Silicon Graphics InternationalTechnology Hardware Storage & PeripheralsInformation Technology-0.4
InnospecChemicalsMaterials-0.4
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Industrials
21.9
69.9
16.7
Information Technology
19.3
72.7
13.8
Energy
11.9
113.3
11.5
Financials
8.2
103.7
6.8
Consumer Discretionary
9.2
75.5
6.7
Health Care
5.7
122.4
5.4
Materials
11.3
14.4
3.5
Consumer Staples
1.6
87.2
1.2
Cash
10.9
0.2
0.0

Top Contributors

INDUSTRYSECTORGAIN (%)
Energy Equipment & ServicesEnergy11.5
Semiconductors & Semiconductor EquipmentInformation Technology7.0
MachineryIndustrials6.4
Electronic Equipment, Instruments & ComponentsInformation Technology5.5
Capital MarketsFinancials4.6

Top Detractors

INDUSTRYSECTORGAIN (%)
Personal ProductsConsumer Staples-0.9
Specialty RetailConsumer Discretionary-0.7
Technology Hardware Storage & PeripheralsInformation Technology-0.4
Communications EquipmentInformation Technology-0.3
Paper & Forest ProductsMaterials-0.1

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Helmerich & PayneEnergy Equipment & ServicesEnergy3.6
Reliance Steel & AluminumMetals & MiningMaterials2.6
Oil States InternationalEnergy Equipment & ServicesEnergy2.6
Robert Half InternationalProfessional ServicesIndustrials2.3
AZZElectrical EquipmentIndustrials2.2

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
GrafTech InternationalElectrical EquipmentIndustrials-1.2
Nu Skin Enterprises Cl. APersonal ProductsConsumer Staples-0.9
Major Drilling Group InternationalMetals & MiningMaterials-0.8
ArcBest CorporationRoad & RailIndustrials-0.6
Intrepid PotashChemicalsMaterials-0.6
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Industrials
22.4
81.3
19.1
Energy
11.1
154.2
15.7
Information Technology
16.8
78.3
14.4
Consumer Discretionary
9.8
69.8
6.8
Health Care
4.9
160.3
6.0
Materials
11.3
33.0
6.0
Financials
9.2
85.9
5.7
Consumer Staples
2.2
233.4
4.7
Government Bonds
0.3
-28.2
-0.9
Cash
12.0
0.3
0.1

Top Contributors

INDUSTRYSECTORGAIN (%)
Energy Equipment & ServicesEnergy15.7
MachineryIndustrials8.3
Semiconductors & Semiconductor EquipmentInformation Technology6.9
Food ProductsConsumer Staples5.6
Textiles, Apparel & Luxury GoodsConsumer Discretionary4.9

Top Detractors

INDUSTRYSECTORGAIN (%)
Diversified Consumer ServicesConsumer Discretionary-2.9
Road & RailIndustrials-1.3
Communications EquipmentInformation Technology-1.1
Specialty RetailConsumer Discretionary-1.0
Government BondsGovernment Bonds-0.9

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Oil States InternationalEnergy Equipment & ServicesEnergy4.2
Helmerich & PayneEnergy Equipment & ServicesEnergy4.1
AZZElectrical EquipmentIndustrials2.9
Wabtec CorporationMachineryIndustrials2.6
Warnaco Group (The)Textiles, Apparel & Luxury GoodsConsumer Discretionary2.5

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Corinthian CollegesDiversified Consumer ServicesConsumer Discretionary-3.4
ArcBest CorporationRoad & RailIndustrials-2.0
Sims Metal Management ADRMetals & MiningMaterials-1.4
GrafTech InternationalElectrical EquipmentIndustrials-1.0
ProShares UltraShort 20+ Year TreasuryGovernment BondsGovernment Bonds-0.9

Risk

Down Market Performance Comparisonas of 9/30/2014

The Fund outperformed the Russell 2000 during 10 out of 11 downturns of 7.5% or more from the index’s prior historical high over the last 15 years.

Market Downturns (%)

Outperformed in 17 out of 21 down quarters.

Russell 2000 Down Quarters

QUARTER ENDRUSSELL 2000 (%)SELECT I (%)SPREAD (%)
9/30/2014-7.4-8.1-0.7
6/30/2012-3.5-7.8-4.3
9/30/2011-21.9-21.5+0.4
6/30/2011-1.6-1.2+0.4
6/30/2010-9.9-9.90.0
3/31/2009-15.0-7.2+7.8
12/31/2008-26.1-21.9+4.2
9/30/2008-1.1-1.0+0.1
3/31/2008-9.9-5.5+4.4
12/31/2007-4.6-1.0+3.6
9/30/2007-3.1+1.9+5.0
6/30/2006-5.0-4.4+0.6
3/31/2005-5.3-3.9+1.4
9/30/2004-2.9-0.2+2.7
3/31/2003-4.5+0.3+4.8
9/30/2002-21.4-19.9+1.5
6/30/2002-8.4-12.0-3.6
9/30/2001-20.8-15.9+4.9
3/31/2001-6.5-1.4+5.1
12/31/2000-6.9-2.4+4.5
6/30/2000-3.8-1.4+2.4

Capture Ratios Fund's First Full Quarter (12/31/1998) 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 with lower volatility.
Over the past 5 years, the Fund produced lower volatility than the Russell 2000.
Over the past 3 years, the Fund produced lower volatility than the Russell 2000.

Go to Relative Risk Spectrum Tool

The Fund produced lower volatility than the Russell 2000 and 50% of small-cap objective funds, as shown by its standard deviation.
The Fund produced lower volatility than the Russell 2000 and 50% of small-cap objective funds, as shown by its standard deviation.
The Fund beat the Russell 2000 and performed within the top 50% of small-cap objective funds on a risk-adjusted basis, as shown by its Sharpe ratio. In addition, the Fund produced lower volatility than the Russell 2000 and 90% of small-cap objective funds, as shown by its standard deviation.

Morningstar Statistical Measures as of 9/30/2014

Sharpe RatioStandard Deviation
Select I0.5417.22
Russell 20000.4219.83
Category Median0.4419.38
Best Decile Breakpoint0.5417.59

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

Composition

Morningstar Style Map™ as of 6/30/2014

mstar-RYSFX

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
    $2.10B

Diagnosticsas of 9/30/2014

Weighted Avg. P/E,
17.5x
Weighted Avg. P/B
1.9x
2013 Portfolio Turnover
56%
97%

Portfolio Allocation as of 9/30/2014

  • Focused 
  • Total
    Holdings
    71
  • Holdings ≥ 75%
    of Total Investments
    40


SECTORS
RYSFX (%) RUSSELL
2000 (%)
Industrials
18.2
13.8
Information Technology
18.0
18.0
Financials
12.0
23.8
Consumer Discretionary
11.8
13.3
Energy
11.3
5.5
Health Care
8.7
13.4
Materials
7.4
5.0
Consumer Staples
2.8
3.3
Telecommunication Services
-
0.8
Utilities
-
3.2
Cash and Cash Equivalents
9.9
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
MKS Instruments
3.1
Unit Corporation
3.0
Federated Investors Cl. B
2.3
CIRCOR International
2.3
John Bean Technologies
2.2
Myriad Genetics
2.2
Genesco
2.1
TGS-NOPEC Geophysical
2.1
Techne Corporation
2.0
Reliance Steel & Aluminum
1.9
Top 10 as % of Net Assets
23.2

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

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 0.4700 EST 1.8400 - EST 2.3100 -
12/11/2013 12/12/2013 12/12/2013 0.0028 0.3580 1.7893 - 2.1501 18.68
12/12/2012 12/13/2012 12/13/2012 0.2984 0.0999 1.3945 - 1.7928 16.90
12/14/2011 12/15/2011 12/15/2011 0.0000 - 2.5624 - 2.5624 16.33
12/15/2010 12/16/2010 12/16/2010 0.0000 0.1332 0.1279 - 0.2611 20.25
12/15/2009 12/16/2009 12/16/2009 0.1536 - - - 0.1536 17.28

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 1.00
Distribution (12b-1) fees 0.00
Dividends on securities sold short 0.00
Other expenses 0.20
Total annual Fund operating expenses 1.20

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 and mid-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 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 generally invests a significant portion of its assets in a limited number of stocks, which may involve considerably more risk than a more broadly diversified portfolio because a decline in the value of any 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 invest up to 15% 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-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 Lauren Romeo since 2009 (co-manager 2006-2009 and assistant portfolio manager 2005-2006), assistant Chuck Royce since 2009 (co-manager 2006-2009 and portfolio manager 1998-2006)

11/18/1998 12:00:00 AM
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