Jay Kaplan on Dividends and "Special" Dividends for Small-Caps on CNBC

When asked by Co-Anchor Melissa Lee of CNBC's "Squawk on the Street" if he was concerned investors would potentially steer themselves in a direction away from dividend-paying mutual funds should taxes on dividends increase in the upcoming year, Portfolio Manager and Principal Jay Kaplan answered that he believed the weakening market prior to the election was evidence that the marketplace had already anticipated higher rates and the prospect for increases in capital gains taxes.

Jay also stated in the December 4, 2012 video interview, "For us at Royce, most of our companies that are paying special dividends tend to be over capitalized. They have cash on their balance sheets that at the moment is earning zero and really has no impact on the underlying day-to-day business one way or the other, and we've been for quite some time urging companies in a zero interest rate environment to try and give some of that money back… so we can reinvest it in places where we think we can actually get a higher return."

Jay Kaplan is the portfolio manager of Royce Total Return Fund and Royce Dividend Value Fund (with Chuck Royce), Royce Value Fund, and Royce Capital Fund – Small-Cap Portfolio. He also serves as assistant portfolio manager of Royce Pennsylvania Mutual Fund. Jay has 24 years of investment industry experience, 12 of which at Royce.

Important Disclosure Information

The thoughts expressed in the video are solely those of the person speaking and may differ from those of other Royce investment professionals, or the firm as a whole. There can be no assurance with regard to future market movements.

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.

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