Tools

Print Page

Tells Us What You Think

Market Perspective Trends: Volatility Trends: Value

1Q'12 Small-Cap Market Cycle Performance

Last updated April 15, 2012

We believe strongly in the idea that a long-term investment perspective is crucial for determining the success of a particular investment approach. While flourishing in an up market is wonderful, surviving a bear market by losing less (or not at all) is at least as good. However, the true test of a portfolio's mettle is performance over full market cycle periods, which include both an up and down market period.

Since the Russell 2000's inception on 12/31/78, there have been 10 full market cycles, with the most recent peaking on 4/29/11. Market cycles are defined as those that have retreated at least 15% from a previous market peak and have rebounded to establish a new peak above the previous one. Each market cycle contains a peak-to-trough and a trough-to-peak period. Interestingly, over the small-cap index's 30+ year history, each style index — the Russell 2000 Value Index and the Russell 2000 Growth Index — outperformed in five of the 10 full market cycles. In fact, leadership has alternated between growth and value over the last six cycles. If history were to adhere to this pattern, value would lead in the current cycle that began on 4/29/11.

Russell 2000 Index's Total Returns

For the 10-year period ended 3/31/12, all 11 Royce Funds with 10 years of history outperformed the Russell 2000, and all did so with better risk-adjusted returns and Sharpe ratios.

In addition, six of the 11 Royce Funds outperformed the Index with lower volatility.

Risk/ Return Profile

Royce US Equity Funds vs. Russell 2000 Index:
Market Cycle Results

FundPeak-to-Peak
3/9/00 -
7/13/07		Peak-to-Trough
7/13/07 -
4/29/11		Trough-to-Current
4/29/11 -
3/31/12
Royce Pennsylvania Mutual Fund 207.1% 11.6% -3.7%
Royce Heritage Fund 150.4 25.3 -7.3
Royce Total Return Fund 193.9 6.8 -1.5
Royce Dividend Value Fund N/A 21.6 -1.3
Royce Premier Fund 198.1 29.9 -1.8
Royce Special Equity Fund 227.4 20.8 3.5
Royce Value Fund N/A 17.4 -8.4
Royce 100 Fund N/A 27.6 -4.1
Royce Special Equity Multi-Cap Fund N/A N/A 8.9
Royce Low-Priced Stock Fund 198.9 27.2 -12.7
Royce Opportunity Fund 191.8 6.9 -5.2
Royce Value Plus Fund N/A -3.0 -5.6
Royce Micro-Cap Fund 197.4 24.9 -10.2
Royce Micro-Cap Discovery Fund N/A -6.1 1.1
Royce SMid-Cap Value Fund N/A N/A -7.8
Royce Select Fund I 188.2 32.8 -2.6
Index
Russell 2000 Index 54.8 6.6 -2.8
Russell 2000 Value Index 189.4 -1.4 -2.7
Russell 2000 Growth Index -14.8 14.3 -2.8

For one-, five-, 10-year, and since inception returns for The Royce Funds please visit our Prices and Performance page. Past performance is no guarantee of future results.

Important Disclosure Information

All performance information above 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. Current performance may be higher or lower than performance quoted.

The thoughts concerning recent market movements and future prospects for smaller-company stocks are solely those of Royce & Associates and, of course, there can be no assurance with regard to future market movements. Smaller-company stocks may involve considerably more risk than larger-cap stocks.

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. All indexes referenced are unmanaged and capitalization weighted. The Russell 2000 is an 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 Russell 2000 Value and Growth indexes consist of the respective value and growth stocks within the Russell 2000 as determined by Russell Investments. The S&P 500 is an index of U.S. large-cap stocks selected by Standard & Poor's based on market size, liquidity and industry grouping, among other factors. The Nasdaq Composite is an index of the more than 3,000 common equities listed on the Nasdaq stock exchange.


Tools

Print Page

Tells Us What You Think

Insights & News

More Insights

May 10Morningstar Calls Royce Opportunity a “Long-Term Standout”
May 09Consuelo Mack WealthTrack: Exclusive Interview with The Royce Funds’ “Great Investor”
May 07Morningstar: Analyst Report for Royce Low-Priced Stock Fund

More News

Share This Page