Insights

Did May’s sector shift signal that active managers will begin to assert themselves over their passive counterparts?

In an asset class where research coverage is limited, we go to great lengths to get a full picture of our investments.

What happens to stock prices if interest rates rise?

While many investors feared that equities would suffer the same slow-growth fate as the global economy during the past 10 years, few saw that the overall performance of the market for the 10-year period as of March 31, 2013 was actually quite good.

Portfolio Manager Charlie Dreifus offers his thoughts on topics such as the importance of managing risk in the current market environment and how the T.I.N.A. Principle (There Is No Alternative) might potentially push equities higher.

Mid-cap investing is a logical extension of Royce’s 40-year experience with the small-cap asset class. Portfolio Manager Steven McBoyle talks about our approach to mid-caps, as well as his thoughts on current market opportunities and portfolio positioning.

Charlie Dreifus talks about his classic value and accounting-oriented investment approach and the differences in finding opportunity between small- and large-cap businesses.

“Dividend policy is likely more important now than it ever has been in the entire history of U.S. equities.”

Portfolio Manager Bill Hench discusses how he's been positioning Royce Opportunity Select Fund in 2013 and what distinguishes his Fund from Buzz Zaino's Opportunity Fund.

At Royce, the practice of paying dividends is not only a key indicator of shareholder-friendly corporate governance but a crucial component of our long-term investment approach.

As the ongoing effects of anemic economic growth continue to play out, one has to wonder when investors will resume viewing stocks as businesses.

The ongoing evolution of the asset class, which includes the entrance of new companies and IPOs, makes small companies an evergreen source of investment opportunities.

Our focus has always been on seeking to provide our shareholders with above-average long-term results on both an absolute and risk-adjusted basis—not on beating our respective benchmarks.

Are some kinds of inflation good for the economy?

After becoming sole portfolio manager of Royce Value Fund in March, Jay Kaplan talks about re-positioning the portfolio, the current market, and the potential value of dividends.

Co-CIO Whitney George discusses current valuations, equities and fixed income, and sticking with patience and discipline during an unpredictable market period.

See how The Royce Funds have fared in the most recent small-cap market cycles.

While the Fed’s policies have leveled the playing field for lower quality, PM Francis Gannon believes that time is running out for passive strategies.

Whitney George discusses the current state of the market and finding opportunities in a challenging period for patient and disciplined bottom-up stock pickers.

While Chile is often overshadowed by Brazil and currently faces its share of challenges, the underlying economy has potential.

In stark contrast to what we saw in 2010, 2011, and most of the first half of 2012, the market tuned out a lot of seemingly ominous political news and enjoyed a strong first quarter.

Jay Kaplan talks about value traps and uncovering great value with Consuelo Mack.

Though technology has benefited the investment world in part by making access to information instantaneous, meetings with management still provide an unparalleled research advantage.

Jay Kaplan talks with Consuelo Mack about our love affair with dividends.

While Portfolio Manager Charlie Dreifus's disciplined value approach is fundamentally based and strictly bottom-up, his process involves keeping a close eye on the big picture with regard to the economy and the stock market.

Jay Kaplan shares what quality means at Royce with Consuelo Mack.

While both investors and businesses remain defensive, they may be missing out on growth opportunities in the current investment environment.

After multiple rounds of quantitative easing and indications that the U.S. economy is improving, Portfolio Manager Lauren Romeo believes that the recent focus on financial engineering will shift back to a focus on business fundamentals.

Although the market has undergone dramatic changes over the past four decades, three things at Royce remain the same—our attention to risk, our emphasis on the long term, and our patience.

Portfolio Manager and Principal Chris Clark discusses the correlation between high equity risk and rising interest rates, and why this time around they may not signal immediate inflation but improvements in the stock market and economic activity.

Keeping a long-term investment horizon in mind, PMs Boniface "Buzz" Zaino and Bill Hench turned certain 2011 stock-picks into portfolio successes in 2012.

Do declining levels of correlation mean a new dawn for the market or another round of spring-time declines?

See how The Royce Funds have fared in the most recent small-cap market cycles.

Europe’s sovereign debt issues and Japan and China’s slowing economies have been fundamental to inconsistent market performance, but quality companies are still plentiful.

The light at the end of the recent market’s tunnel looks bright to us as the wall of worry has been scaled, macro anxieties have cooled, and correlation continues to subside.

The second half of 2012 for investors saw a shift in confidence from fixed-income options to the equity market. Portfolio Manager Jay Kaplan discusses why he thinks investors are returning to dividend-paying stocks.

From economic reforms to dealing with the slowdown in Europe, China’s economy takes on new challenges as the country restructures.

Although macro headlines paint a dismal picture of the global economy, we are still finding quality companies abroad that present us with unique opportunities.

Despite being a year of uncertainty, the U.S. equity market in 2012 posted impressive gains for the year. As political tension continues, will investors stick with equities and return to quality?

Although the correlated market of the past two years has invited much uncertainty for investors, Co-CIO Whitney George has confidence in equities going into 2013.

Portfolio Manager Jen Taylor looks back at the micro-cap market and its effect on Royce Micro-Cap Fund’s 2012 performance and talks about her plans for fine-tuning the Fund’s portfolio in 2013.

Director of International Research David Nadel and London-based Senior Analyst Mark Rayner are finding quality companies in Europe despite a slow-growth global economy.

Francis Gannon debunks some of the misconceptions and dislocations that affect the small-cap asset class.

We believe that our absolute return focus provides the greatest opportunity to build wealth.

At Royce, our stock selection is based on trying to generate a desired long-term rate of return for each company that we select, not on beating the return of an index.

Beating the market doesn't come easy, but some managers find a way over the long term.

We have long maintained that dividends can be an integral part of a successful long-term investment strategy in the small-cap asset class.

Chuck Royce sees the solid fourth quarter as evidence of a more stable, quality-centric period for equities.

Although its growth has slowed, Japan remains the world’s third-largest economy, with several potentially attractive investment opportunities for patient investors.

Join us for a trip down memory lane with a decade-by-decade look at the firm and the markets over the last 40 years.

Quantitative easing, declining volatility, and low interest rates have contributed to the outperformance of low-quality small-caps, but will this era soon end?

Francis Gannon makes the case for ongoing value in the small-cap market.

Portfolio Manager Chip Skinner discusses some of the investment ideas that have helped Royce Value Plus Fund’s year-to-date results.

Portfolio Manager Jim Harvey explains why he doesn’t fear the fiscal cliff and why current economic conditions make the whole globe a stock-pickers’ market.

Conservative capital allocation decisions have been hindering M&A activity. Chris Clark explains why that could soon change.

The likelihood of fiscal and tax reform in 2013 gives us faith in the long-term viability of both the U.S. economy and equities.

With the market on the move and the economy slowly improving, are investors forgetting that good things still happen to stocks?

While market cycles have remained consistently volatile, Royce’s smid-cap funds—SMid-Cap Value and Enterprise Select—find reasons for celebration on their five-year anniversaries.

While the adoption of small-cap is now widespread, there remain differences in how the category is defined in the U.S. and abroad.

By ignoring equities, too many investors are fighting the Fed—and missing a dynamic rally.

See how The Royce Funds have fared in the most recent small-cap market cycles.

Portfolio Manager David Nadel takes a look at opportunities in Singapore, a country distinguished by historically stellar growth and a prime location.

Co-CIOs Chuck Royce and Whitney George share their thoughts on the current market rally, how interest in equities might be reignited, and the prospects for Europe and China.

Francis Gannon explains why small-caps are still statistically cheap.

Co-CIO Whitney George examines the third-quarter bull run and explains why today’s market looks a lot like that of the late ‘90s.

Co-CIO Chuck Royce discusses the current rally and looks at what it might take to bring investors back to stocks.

With the market on the move and the economy slowly improving, are investors forgetting that good things still happen to stocks?

Royce Special Equity Fund’s Charlie Dreifus examines the data from Europe, China, and the U.S., and discusses how it may affect domestic stock prices.

Is Turkey worthy of the MIST (Mexico, Indonesia, South Korea, Turkey) moniker, or are Turkish opportunities better "missed" by us and our mutual fund investors?

Francis Gannon looks at why being risk averse in today’s market carries risks of its own.

Portfolio Manager Lauren Romeo explains why uncertainty can be beneficial for long-term equity investors.

Though currently out of favor, we believe small-cap cyclicals seem to have the most compelling valuations.

While on a trip in Montana, Chris Clark reflects on the remarkable challenges of investing in today’s world and how investors seem to have lost sight of the promise of the future.

While the markets have been sluggish for the third straight year, we have been focusing on patience and fundamentals.

Francis Gannon looks at another season of negative sentiment and plentiful small-cap opportunities.

Portfolio Manager Bill Hench shares his thoughts on portfolio diversification, buying and selling stocks, and where he’s finding compelling micro-cap and small-cap valuations for his opportunistic value approach to investing.

Low expectations, a history of strong, above-average returns, and solid near-term results may mean the start of something good for the underfollowed and underappreciated micro-cap asset class.

See how The Royce Funds have fared in the most recent small-cap market cycles.

Shorter business cycles have caused short-term disappointments that could lead to long-term opportunity.

Frank Gannon looks at another season of negative sentiment and plentiful small-cap opportunities.

Co-CIOs Chuck Royce and Whitney George discuss how ongoing volatility is affecting fund performance, the importance of the firm’s patient and disciplined approach, and the viability of equity investing.

Co-CIO Whitney George looks at the disappointing second quarter and discusses why patience and fundamentals are so critical in today’s uncertain market.

Co-CIO Chuck Royce examines the recent range-bound market and why he still has confidence in stocks.

Why concentrating portfolio holdings can work as effectively as broad diversification in uncertain markets.

While equity markets react to headline news and other short-term noise with price volatility, Royce Opportunity Fund portfolio managers Buzz Zaino and Bill Hench seek to use the noise to their advantage by purchasing small-cap companies at moments of distress.

Chip Skinner has been repositioning Royce Value Plus Fund by de-emphasizing special situations and turnarounds and re-focusing on what he sees as high-quality, undervalued growth companies.

Whitney talks about why the portfolio’s positioning has remained mostly unchanged over the last few years and why he remains bullish on mining and energy stocks.

Frank Gannon looks at U.S. small-caps and how much revenue they derive from non-U.S. sources.

While the pace of growth is slowing in China, the quality of growth is improving. The Chinese government is recalibrating the economy towards the consumer, which makes for more interesting investment opportunities at attractive valuations.

Over time, companies tend to have more influence on their own success or failure than do the broader economic trends around them.

Investors may be spooked by ominous economic headlines for a third consecutive spring, but we’re still seeing plenty of well-run small-caps with confident, capable management.

Quality is not only plentiful within the small-cap universe, but it is also attractively valued right now across the market cap spectrum.

Royce’s Director of International Research David Nadel sees compelling small-cap opportunities outside the U.S. and thinks that 2012 could prove to be a year when international equities come storming back.

Patience is an increasingly rare commodity in equity investing, one that we believe has also become a contrarian characteristic.

As we have always done during difficult periods, we are adding risk as the market is removing it by reducing valuations.

Portfolio Managers Buzz Zaino and Bill Hench reflect on 15–year old Royce Opportunity Fund and their unique and disciplined opportunistic value approach.

As we have seen and heard in many third-quarter earnings reports, fundamentals are clearly better than the dire daily headlines.

Portfolio Managers George Necakov and Jim Harvey discuss how Royce performs quantitative analysis and how the changes we made to Royce Discovery Fund in August 2010 have affected its portfolio of micro-cap stocks.

There are important differences between a disciplined value approach and style index investing. We think that long-term performance has more to do with finding attractively priced companies than it does with constructing a particular investment universe using a limited set of metrics.

See how The Royce Funds have fared in the most recent small-cap market cycles.

Royce examines China's economic growth, how environmental issues may play a role in its future, the real estate boom and its focus on education.

Co-CIO Chuck Royce looks at the third quarter and details why active small-cap management can be successful in the long run.

Whitney George discusses the prospects for a market turnaround and looks at what it might take for the economy to grow more robustly.

We continue to believe that high-quality smaller companies are inexpensive and the source of great potential value.

David Nadel and Mark Rayner examine the European sovereign debt crisis, providing insight on the state of the euro, currency unions, Europe’s options and how Royce is positioning its European investments.

We continue to believe that inexpensive high-quality companies are under owned, especially within the small-cap space, so we are using the declines as an opportunity to refresh our portfolios.

Charlie Dreifus is applying his tried and true investment process to Large-Cap companies.

Royce traders discuss the nuances involved with trading small-caps domestically and internationally and how they handled the recent market plunge.

Listen to a replay of Whitney's take on the tumultuous events of the last several days of market mayhem from Legg Mason's August 9 conference call.

Co-CIOs Chuck Royce and Whitney George discuss the market’s plunging prices and the importance of maintaining our discipline at a major stress point for equities.

Portfolio Manager Jay Kaplan offers his thoughts on the impact of a U.S. credit downgrade, the impact of U.S. debt and investing in this economy.

Current economic conditions are quite dynamic and so much more fluid than the daily headlines portend.

In an environment of political and economic uncertainty, our bullishness and optimism are real, but low key.

We are intrigued by Russia's economic recovery and access to natural resources, though we remain concerned with corruption.

Whitney George talks about the current state of the market and why he still sees value in technology and commodity stocks.

See how The Royce Funds have fared in the most recent small-cap market cycles.

Co-CIO Chuck Royce and Portfolio Managers Jay Kaplan, David Nadel and Frank Gannon detail why we think having exposure to dividend-paying small-cap companies is important for investors.

For some time now, we have espoused the view that we are in a more normalized market environment, where one should see positive longer-term returns for equities with normal corrections.

Co-CIO Chuck Royce is "modestly bullish and cautiously optimistic". He thinks the market’s recent volatility is a normal part of a generally bullish cycle.

"We’re happy to see these relative youngsters in our portfolio line-up off to such a strong start in their first decade," said Co-CIO Whitney George.

"The practice of paying a dividend is typically a long-term commitment, like a marriage, whereas a stock buy back is more like dating: you can get in and get out on a moment’s notice, without the same level of commitment."

Stocks began to shift direction in May. Is it a sign that investors are worried about the sustainability of share values?

The Association of Southeast Asian Nations (ASEAN), which includes Indonesia and Malaysia, is the third-largest economy in Asia behind China and Japan, which makes it interesting for investors.

With a GDP of more than one trillion dollars, South Korea is the world’s fifteenth largest economy and the fourth largest in Asia—making it impossible to ignore for a global investor.

American investors typically think of dividends as an afterthought, but abroad dividends in smaller companies are commonly accepted and expected.

"After identifying what appears to be a quality company based on its financial metrics, our real work begins—applying our bottom-up, business-buyer’s research approach."

By doing our research first and patiently waiting for the right opportunity, we have been able to take advantage of many of the market dislocations over the past several years.

Whitney George looks at the events in 2011’s first quarter and discusses why Japan’s future may be brighter than many think.

For some time, we have been arguing that higher-quality companies would lead in the market recovery regardless of market capitalization and especially as the economic recovery matures.

See how The Royce Funds have fared in the most recent small-cap market cycles.

A look at our security selection process including the balance sheet, cash flow, and cap rate.

Quality may be the most overused word in the investment community today. After all, who thinks that their portfolio isn’t high quality?

Co-CIO Whitney George and Portfolio Managers Steven McBoyle and Brendan Hartman discuss Royce’s natural progression of investing in the smid-cap/mid-cap space, and where we see advantages to both asset classes.

David Nadel, Director of International Research and Portfolio Manager, and Jim Harvey, Portfolio Manager, recently returned from Japan and with some compelling insights about what the future may hold.

Chuck Royce looks at why the market was so placid while the world was so wild.

An interesting alternative to typical allocations of small-cap and large-cap stocks lies in the smid-cap zone, that space with market capitalizations between $2.5 billion through $15 billion.

Royce seeks the same attributes abroad that we look for domestically: strong balance sheets, an established record of earnings, the ability to generate free cash flow, and excellent growth prospects.

Adhering to our discipline is as vital to our success as the approach itself. This is especially relevant during market extremes such as those we have seen over the last several years.

Tech stocks have recently begun to emerge from a 10-year bear market, but we think the sector still offers compelling opportunities.

Analyst Dilip Badlani shares insights on Hong Kong and discusses the potential growth in Mainland Chinese companies.

Chip Skinner is looking for companies with what he believes are top-notch growth prospects to position Royce Value Plus Fund for the nascent economic recovery.

While the headlines were focusing on unemployment and housing, we were seeing an economy on the mend. So the market’s strength through much of 2010 was not a surprise to us.

If the market’s results in January 2011 had a familiar feel, there was a good reason. Twenty-eleven already feels eerily like 2010.

Our long-term perspective involves an attempt to understand what a business is worth, which is why we think like owners, not renters.

Whitney George discusses 2010, including where he was focusing on both domestic and non-U.S. small-cap stocks.

See how The Royce Funds have fared in the most recent small-cap market cycles.

This quarter's Review Spotlight examines the age-old "value" versus "growth" debate. Do investors without these style constraints have a better chance of achieving strong long-term results? Our analysis found some interesting points to ponder regarding this so-far unwinnable battle.

Senior Analyst Mark Rayner offers his thoughts on investment opportunities in Poland, which fared well during the global economic downturn and boasts low levels of consumer, government, and corporate debt.

A bullish market in an uncertain economy—Chuck Royce discusses the fourth quarter and recaps the year in stocks.

Our goal is to take advantage of small-cap myths to uncover high-quality smaller companies trading at significant discounts to our estimate of their worth as a business.

Co-CIO Whitney George and Director of International Research David Nadel discuss global opportunities and the challenges of investing in foreign markets.