News

On June 5, 2008, Royce Financial Services Fund’s Board of Trustees approved a change to the Fund’s non-fundamental investment restrictions that, effective August 15, 2008, will allow the Fund to invest up to 35% of its net assets in non-U.S. securities. The Fund’s investments in non-U.S. securities were previously limited to no more than 25% of its net assets. We believe that this change is consistent with the Fund’s expanding global reach in security selection.

We believe that international markets can be less efficient than those of the U.S., which creates potential investment opportunities. To us, the international small-cap market looks very similar to the U.S. small-cap market of 10-20 years ago. We think that our disciplined style, which emphasizes intrinsic value and strong balance sheets, can work well in the international stock markets.

Before making the change, the Board considered its impact and weighed the potential advantages of expanded investment flexibility with the possibility that the changes would cause the Fund to engage in investment strategies that involve increased risk and/or could result in lower returns. The Board concluded that passing the proposal was in the best interest of the shareholders because it potentially benefits shareholders by allowing Royce to seek broader investment opportunities to achieve the Fund’s investment goal of long-term growth of capital.

If you have any questions, please email us or call Investor Services at 1-800-221-4268.

The Fund may invest up to 35% of its net assets in foreign securities, which may involve political, economic, currency and other risks not encountered in U.S. investments (Please see “Investing in Foreign Securities” in the prospectus).

This material is not authorized for distribution unless preceded or accompanied by a current prospectus for the Fund. Please read the prospectus carefully before investing or sending money. Distributor: Royce Fund Services, Inc.