90

At a Glance

Why invest in Dividend Value?

  • Small/mid-cap value fund (generally market caps up to $15 billion) that invests primarily in dividend-paying companies with strong business fundamentals and attractive prospects
  • Focuses on quality businesses, both U.S. and foreign, with below-average debt and above-average profitability selling at prices that Royce believes do not fully reflect underlying quality
  • Has a long history of lower volatility and better risk-adjusted returns than its benchmark, the Russell 2000 Index

As of 06/30/16

  • Small/Mid-Cap
    Value Approach
    $3.11B
    Avg. Market Cap
  • Below Average
    Volatility
    97%
    Active Share
  • Lead Manager
    Tenure
    12+
    Years on Fund

Portfolio Management

"Capital preservation means as much to us as capital appreciation. Our absolute return orientation fosters realistic expectations for the stocks we buy. We have a long-term investment horizon for the companies that we own and the portfolio itself."
Chuck Royce

Performance

Average Annual Total Returns (%)

Outperformed Russell 2000 for the Year To Date, 1-Year, 10-Year and since inception (05/03/04) periods as of 06/30/16.
QTR YTD 1YR 3YR 5YR 10YR SINCE INCEPT. DATE
Dividend Value -0.43 4.51-4.034.636.346.927.97 05/03/04
Russell 2000 3.79 2.22-6.737.098.356.207.46 N/A

Annual Operating Expenses: Gross 1.01 Net 0.94

AUG YTD 1YR 3YR 5YR 10YR SINCE INCEPT. DATE
Dividend Value 0.27 9.577.265.189.677.198.27 05/03/04
Russell 2000 1.77 10.238.598.5312.857.048.01 N/A

Annual Operating Expenses: Gross 1.01 Net 0.94

SEP YTD 1YR 3YR 5YR 10YR SINCE INCEPT. DATE
Dividend Value -1.23 8.2210.152.8910.906.758.11 05/03/04
Russell 2000 N/A N/AN/AN/AN/AN/AN/A N/A

Annual Operating Expenses: Gross 1.01 Net 0.94

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. Gross operating expenses reflect the Fund's total gross operating expenses for the Institutional Class as of the Fund's most current prospectus and include management fees, other expenses, and acquired fund fees and expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. Royce & Associates has contractually agreed, without right of termination, to waive fees and/or reimburse expenses to the extent necessary to maintain the Institutional Class's net annual operating expenses (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business) at or below 1.04% through April 30, 2015. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies.

All performance and risk information presented in this material prior to the commencement date of Institutional Class shares on 8/31/12 reflects Service Class results. Each class would have substantially similar returns because all classes invest in the same portfolio of securities, differing only to the extent that the classes have different expenses.

Rolling Returns

On a monthly basis, the Fund outperformed the Russell 2000 in 100% of all 10-Year periods; 69% of all 5-Year periods; and 56% of all 1-Year periods.

For 100% of the periods, 10-year average annual total returns were greater than 5%.

Relative Returns: Monthly Rolling Average Annual Return Periods Since Inception Through 06/30/16

periods beating
the index(%)
fund
avg(%)
index
avg(%)
10-year
26/26
100 8.3 7.5
5-year
59/86
69 8.8 7.6
1-year
75/134
56 9.6 9.2

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% 4 15
> 5% and ≤ 10% 22 85
> 0% and ≤ 5% 0 0
≤ 0% 0 0

The Fund averaged a 8.3% return over all 26 10-year monthly rolling return periods.

Market Cycle Performance

The Fund outperformed the Russell 2000 from the 6/23/15 index peak through current (6/30/16) and in one of the two previous full market cycle periods.
Peak-Peak - 07/13/07 - 04/29/11
Dividend Value21.6%
Russell 20006.6%

Peak-Peak - 04/29/11 - 06/23/15
Dividend Value40.8%
Russell 200058.5%

Peak-Current - 06/23/15 - 06/30/16
Dividend Value-6.6%
Russell 2000-9.7%

Royce defines market cycles 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. 

Royce defines market cycles 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. 

Calendar Year Total Returns (%)

 

Growth of Investment

Value of $10,000 invested between 05/03/04 and 06/30/16

Dividend Value$25,393.56
Russell 2000$23,975.88

Portfolio Impactas of 06/30/16

SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Materials
10.57
10.95
1.11
Energy
1.99
11.66
0.23
Utilities
1.37
12.68
0.17
Health Care
3.85
1.85
0.03
Consumer Staples
2.98
0.89
0.01
Industrials
24.44
-0.36
-0.05
Telecommunication Services
1.56
-8.19
-0.14
Financials
28.70
-1.04
-0.27
Information Technology
11.09
-2.76
-0.30
Consumer Discretionary
10.53
-7.73
-0.89
Cash
2.92
0.06
0.00

Top Contributors

INDUSTRYSECTORGAIN (%)
Metals & MiningMaterials0.94
BanksFinancials0.36
Commercial Services & SuppliesIndustrials0.28
Energy Equipment & ServicesEnergy0.24
PharmaceuticalsHealth Care0.20

Top Detractors

INDUSTRYSECTORGAIN (%)
Capital MarketsFinancials-1.01
Specialty RetailConsumer Discretionary-0.48
Professional ServicesIndustrials-0.45
Food ProductsConsumer Staples-0.26
Electronic Equipment, Instruments & ComponentsInformation Technology-0.25

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Worthington IndustriesMetals & MiningMaterials0.26
Franco-Nevada CorporationMetals & MiningMaterials0.25
Ritchie Bros. AuctioneersCommercial Services & SuppliesIndustrials0.25
Reliance Steel & AluminumMetals & MiningMaterials0.23
RecordatiPharmaceuticalsHealth Care0.18

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Lazard Cl. ACapital MarketsFinancials-0.33
ManpowerGroupProfessional ServicesIndustrials-0.33
KKR & Co. L.P.Capital MarketsFinancials-0.26
Hormel FoodsFood ProductsConsumer Staples-0.26
DieboldTechnology Hardware, Storage & PeripheralsInformation Technology-0.24
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Materials
10.61
22.32
2.15
Industrials
26.02
4.45
1.11
Financials
26.55
2.51
0.88
Information Technology
12.04
3.44
0.49
Utilities
1.33
20.99
0.28
Health Care
4.15
6.23
0.23
Energy
2.13
9.08
0.20
Consumer Staples
3.05
5.22
0.17
Consumer Discretionary
10.46
1.41
0.16
Telecommunication Services
1.53
-5.41
-0.09
Cash
2.13
0.13
0.00

Top Contributors

INDUSTRYSECTORGAIN (%)
Metals & MiningMaterials2.01
MachineryIndustrials1.05
Air Freight & LogisticsIndustrials0.40
Electronic Equipment, Instruments & ComponentsInformation Technology0.38
BanksFinancials0.35

Top Detractors

INDUSTRYSECTORGAIN (%)
Professional ServicesIndustrials-0.55
Diversified Telecommunication ServicesTelecommunication Services-0.26
Technology Hardware, Storage & PeripheralsInformation Technology-0.25
Construction & EngineeringIndustrials-0.21
Capital MarketsFinancials-0.17

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Reliance Steel & AluminumMetals & MiningMaterials0.68
Franco-Nevada CorporationMetals & MiningMaterials0.57
Worthington IndustriesMetals & MiningMaterials0.50
Ritchie Bros. AuctioneersCommercial Services & SuppliesIndustrials0.37
Helmerich & PayneEnergy Equipment & ServicesEnergy0.30

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
SEI InvestmentsCapital MarketsFinancials-0.46
ManpowerGroupProfessional ServicesIndustrials-0.36
InmarsatDiversified Telecommunication ServicesTelecommunication Services-0.26
DieboldTechnology Hardware, Storage & PeripheralsInformation Technology-0.25
KBRConstruction & EngineeringIndustrials-0.21
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Materials
10.47
11.10
1.25
Health Care
4.46
19.38
0.76
Utilities
1.11
49.13
0.46
Consumer Staples
2.78
12.46
0.38
Industrials
25.58
0.68
0.25
Telecommunication Services
1.36
-5.98
-0.11
Information Technology
12.23
-2.58
-0.30
Energy
2.86
-20.46
-0.83
Financials
25.61
-7.43
-1.74
Consumer Discretionary
10.90
-15.85
-2.00
Cash
2.62
0.17
0.00
Unclassified
0.00
-42.29
0.00

Top Contributors

INDUSTRYSECTORGAIN (%)
Metals & MiningMaterials1.05
MachineryIndustrials0.80
InsuranceFinancials0.55
Water UtilitiesUtilities0.46
Containers & PackagingMaterials0.42

Top Detractors

INDUSTRYSECTORGAIN (%)
Capital MarketsFinancials-2.69
Specialty RetailConsumer Discretionary-1.61
Professional ServicesIndustrials-0.63
Energy Equipment & ServicesEnergy-0.61
Technology Hardware, Storage & PeripheralsInformation Technology-0.43

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Reliance Steel & AluminumMetals & MiningMaterials0.65
Franco-Nevada CorporationMetals & MiningMaterials0.55
Worthington IndustriesMetals & MiningMaterials0.55
John Bean TechnologiesMachineryIndustrials0.52
Aqua AmericaWater UtilitiesUtilities0.46

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Allegheny TechnologiesMetals & MiningMaterials-0.67
DieboldTechnology Hardware, Storage & PeripheralsInformation Technology-0.43
ManpowerGroupProfessional ServicesIndustrials-0.43
KKR & Co. L.P.Capital MarketsFinancials-0.38
Buckle (The)Specialty RetailConsumer Discretionary-0.37
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Financials
25.36
24.90
6.30
Industrials
21.93
25.49
5.41
Information Technology
12.01
29.85
3.06
Health Care
4.15
73.15
2.30
Materials
12.50
15.74
1.92
Consumer Staples
2.61
39.40
1.24
Utilities
0.64
58.27
0.50
Consumer Discretionary
11.02
2.20
0.37
Telecommunication Services
1.10
40.11
0.22
Energy
4.53
-42.87
-2.33
Cash
4.14
0.22
0.01
Unclassified
0.00
-45.86
0.00

Top Contributors

INDUSTRYSECTORGAIN (%)
InsuranceFinancials2.46
MachineryIndustrials2.45
Capital MarketsFinancials1.51
IT ServicesInformation Technology1.44
Electronic Equipment, Instruments & ComponentsInformation Technology1.37

Top Detractors

INDUSTRYSECTORGAIN (%)
Energy Equipment & ServicesEnergy-2.24
Specialty RetailConsumer Discretionary-0.87
Construction & EngineeringIndustrials-0.58
Technology Hardware, Storage & PeripheralsInformation Technology-0.35
Multiline RetailConsumer Discretionary-0.33

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
John Bean TechnologiesMachineryIndustrials0.83
Hormel FoodsFood ProductsConsumer Staples0.74
Cintas CorporationCommercial Services & SuppliesIndustrials0.69
Diamond Hill Investment GroupCapital MarketsFinancials0.67
Symetra FinancialInsuranceFinancials0.62

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
TransoceanEnergy Equipment & ServicesEnergy-0.94
TidewaterEnergy Equipment & ServicesEnergy-0.58
Allegheny TechnologiesMetals & MiningMaterials-0.56
KBRConstruction & EngineeringIndustrials-0.45
Artisan Partners Asset Management Cl. ACapital MarketsFinancials-0.42
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Financials
27.64
63.32
17.24
Industrials
22.51
52.52
12.25
Information Technology
10.62
58.15
5.78
Consumer Discretionary
11.03
30.30
4.11
Consumer Staples
2.81
122.31
3.40
Health Care
4.24
92.29
2.95
Utilities
0.40
78.37
0.50
Telecommunication Services
0.72
70.14
0.28
Materials
11.54
3.48
0.27
Energy
4.43
-39.06
-1.57
Cash
4.01
0.34
0.01
Unclassified
0.04
-48.56
-0.03

Top Contributors

INDUSTRYSECTORGAIN (%)
InsuranceFinancials6.57
Capital MarketsFinancials6.05
MachineryIndustrials5.18
Electronic Equipment, Instruments & ComponentsInformation Technology2.84
Textiles, Apparel & Luxury GoodsConsumer Discretionary2.05

Top Detractors

INDUSTRYSECTORGAIN (%)
Metals & MiningMaterials-1.33
Energy Equipment & ServicesEnergy-1.22
Oil, Gas & Consumable FuelsEnergy-0.35
Multiline RetailConsumer Discretionary-0.33
Diversified Consumer ServicesConsumer Discretionary-0.32

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
PandoraTextiles, Apparel & Luxury GoodsConsumer Discretionary2.09
Harleysville GroupInsuranceFinancials1.30
Nu Skin Enterprises Cl. APersonal ProductsConsumer Staples1.21
Hormel FoodsFood ProductsConsumer Staples1.09
John Bean TechnologiesMachineryIndustrials1.05

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
TransoceanEnergy Equipment & ServicesEnergy-0.94
Artio Global Investors Cl. ACapital MarketsFinancials-0.89
Allegheny TechnologiesMetals & MiningMaterials-0.87
Gold Fields ADRMetals & MiningMaterials-0.67
SprottCapital MarketsFinancials-0.64

Risk

Below Average Volatility vs. Peer Group as of 06/30/16

The Fund has a below average volatility within its peer group of 868 Small/Mid-Cap Funds based on 5-year rolling standard deviation.

Down Market Performance Comparisonas of 06/30/16

The Fund outperformed the Russell 2000 during all seven downturns of 10% or more from the index’s prior historical high since the Fund’s inception.

Market Downturns (%)

DownMarketImg
Outperformed in 13 out of 16 down quarters.

Russell 2000 Down Quarters

QUARTER ENDRUSSELL 2000 (%)DIVIDEND VALUE (%)SPREAD (%)
03/31/16-1.5+5.0+6.5
09/30/15-11.9-10.3+1.6
09/30/14-7.4-7.3+0.1
06/30/12-3.5-6.3-2.8
09/30/11-21.9-19.4+2.5
06/30/11-1.6-1.4+0.2
06/30/10-9.9-6.8+3.1
03/31/09-15.0-9.0+6.0
12/31/08-26.1-25.5+0.6
09/30/08-1.1-3.6-2.5
03/31/08-9.9-3.6+6.3
12/31/07-4.6-4.7-0.1
09/30/07-3.1-1.8+1.3
06/30/06-5.0-3.5+1.5
03/31/05-5.3-1.6+3.7
09/30/04-2.9+1.4+4.3

Capture Ratios Fund's First Full Quarter (06/30/04) to 06/30/16

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 06/30/16

Over the past 10 years, the Fund outperformed the Russell 2000 Index with lower volatility.
Over the past 5 years, the Fund produced lower volatility than the Russell 2000 Index.
Over the past 3 years, the Fund produced lower volatility than the Russell 2000 Index.
From the Fund's inception, the Fund outperformed the Russell 2000 Index with lower volatility.

Go to Relative Risk Spectrum Tool

Morningstar Statistical Measures as of 06/30/16

The Fund produced lower volatility than the Russell 2000 and 50% of small/mid-cap objective funds, as shown by its standard deviation.
The Fund produced lower volatility than the Russell 2000 and 50% of small/mid-cap objective funds, as shown by its standard deviation.
The Fund beat the Russell 2000 and performed within the top 50% of small/mid-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 75% of small/mid-cap objective funds, as shown by its standard deviation.
Sharpe RatioStandard Deviation
Dividend Value0.4217.21
Russell 20000.3619.83
Category Median0.3818.82
Best Quartile Breakpoint0.4417.77

Category Median and Best Quartile Breakpoint based on 719 small/mid-cap objective funds (oldest class only) with at least ten years of history.
Sharpe Ratio Standard Deviation
Dividend Value
Russell 2000
Category Median
Best Quartile Breakpoint

Composition

Morningstar Style Map™as of 06/30/16

mstar-RDIIX

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.

Portfolio Diagnosticsas of 06/30/16

  RDIIX Russell 2000
Average Market Cap
3.11B
1.37B
97%
-
2015 Portfolio Turnover
14%
-
Weighted Average P/E,
17.5x
19.6x
Weighted Average P/B
2.4x
2.0x
U.S. Investments (% of Net Assets)
73.8%
-
Non-U.S. Investments (% of Net Assets)
23.8%
-

Portfolio Allocation

  • Total
    Holdings
    142


SECTORS
RDIIX (%) RUSSELL
2000 (%)
Financials
30.2
25.8
Industrials
23.7
13.8
Information Technology
11.1
17.3
Materials
10.5
4.6
Consumer Discretionary
10.4
13.5
Health Care
3.8
13.6
Consumer Staples
2.9
3.1
Energy
1.7
3.0
Telecommunication Services
1.6
0.9
Utilities
1.5
4.3
Bonds & Preferreds
0.1
-
Cash and Cash Equivalents
2.5
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Reliance Steel & Aluminum
2.0
FLIR Systems
1.9
Expeditors International of Washington
1.8
National Instruments
1.7
AllianceBernstein Holding L.P.
1.7
Federated Investors Cl. B
1.6
Diebold
1.6
Worthington Industries
1.6
Oaktree Capital Group LLC Cl. A
1.6
Aqua America
1.5
KKR & Co. L.P.
1.5
Hormel Foods
1.4
Western Union
1.4
Dentsply Sirona
1.4
CLARCOR
1.4
AptarGroup
1.3
ManpowerGroup
1.3
Amerco
1.3
First Republic Bank
1.3
IDEX Corporation
1.3
Top 20 as % of Net Assets
30.6

SECTORS
RDIIX (%) RUSSELL
2000 (%)
Financials
30.9
-
Industrials
24.2
-
Information Technology
11.5
-
Consumer Discretionary
10.7
-
Materials
10.7
-
Health Care
4.0
-
Consumer Staples
2.8
-
Energy
1.6
-
Telecommunication Services
1.6
-
Utilities
1.5
-
Bonds & Preferreds
0.1
-
Cash and Cash Equivalents
0.5
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Reliance Steel & Aluminum
2.0
FLIR Systems
1.9
Diebold
1.8
Expeditors International of Washington
1.8
National Instruments
1.8
Federated Investors Cl. B
1.7
AllianceBernstein Holding L.P.
1.7
KKR & Co. L.P.
1.7
Worthington Industries
1.6
Oaktree Capital Group LLC Cl. A
1.6
Western Union
1.5
Aqua America
1.5
Dentsply Sirona
1.4
Hormel Foods
1.4
ManpowerGroup
1.4
CLARCOR
1.4
Lazard Cl. A
1.3
IDEX Corporation
1.3
Amerco
1.3
AptarGroup
1.3
Top 20 as % of Net Assets
31.4

Portfolio Holdings

View the complete list of holdings for this fund as of 06/30/16. Unaudited schedule of portfolio holdings is presented for informational purposes only.

Least Portfolio Overlap - U.S. Equity Funds

Greatest Portfolio Overlap - U.S. Equity Funds

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 ($) REINVEST
PRICE ($)
09/07/16 09/08/16 09/08/16 0.0300 - - - 0.0300 7.40
06/01/16 06/02/16 06/02/16 0.0400 - - - 0.0400 7.11
03/02/16 03/03/16 03/03/16 0.0250 - - - 0.0250 6.77
12/16/15 12/17/15 12/17/15 0.0613 0.0406 0.6568 - 0.7587 6.75
09/02/15 09/03/15 09/03/15 0.0250 - - - 0.0250 7.61
06/03/15 06/04/15 06/04/15 0.0350 - - - 0.0350 8.38
03/04/15 03/05/15 03/05/15 0.0400 - - - 0.0400 8.12
12/16/14 12/17/14 12/17/14 0.0547 0.1160 0.3807 - 0.5514 7.89
09/03/14 09/04/14 09/04/14 0.0200 - - - 0.0200 8.96
06/04/14 06/05/14 06/05/14 0.0250 - - - 0.0250 8.93
03/05/14 03/06/14 03/06/14 0.0250 - - - 0.0250 8.88
12/04/13 12/05/13 12/05/13 0.0404 0.1345 0.3995 - 0.5744 8.55
09/04/13 09/05/13 09/05/13 0.0250 - - - 0.0250 8.39
06/05/13 06/06/13 06/06/13 0.0300 - - - 0.0300 8.16
03/06/13 03/07/13 03/07/13 0.0250 - - - 0.0250 7.87
12/05/12 12/06/12 12/06/12 0.0637 - 0.0175 - 0.0812 7.11
09/05/12 09/06/12 09/06/12 0.0150 - - - 0.0150 6.97

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) 0.00

Annual Fund Operating Expenses (%)

(expenses that you pay each year as a percentage of the value of your investment)

Management fees 0.85
Distribution (12b-1) fees 0.00
Other expenses 0.11
Acquired fund fees and expenses 0.05
Total annual Fund operating expenses 1.01
Fee waivers and/or expense reimbursements (0.07)
Total annual Fund operating expenses after fee waivers and/or expense reimbursements0.94
Royce & Associates has contractually agreed, without right of termination, to waive fees and/or reimburse expenses to the extent necessary to maintain the Institutional Class's net annual operating expenses (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business) at or below 0.89% through April 30, 2017. Total annual Fund operating expenses may differ from the expense ratio in the Fund's Financial Highlights because they include only the Fund's direct operating expenses and do not include acquired fund fees and expenses, which reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies.

Important Disclosure Information

This material is not authorized for distribution unless preceded or accompanied by a current prospectus. Please read the prospectus carefuly before investing or sending money. The Fund invests primarily in micro-cap, 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’s broadly diversified portfolio does not ensure a profit or guarantee against loss. The Fund may invest up to 25% of its net assets (measured at the time of investment) in securities of companies headquartered in foreign countries, 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 Fund's P/E ratio calculation excludes companies with zero or negative earnings. 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. 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. 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. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.

Chuck Royce lead manager since 2007 (manager 2004-2007), Jay Kaplan since 2007

8/31/2012 12:00:00 AM

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