Royce Global Financial Services Fund (RYFSX)
18

At a Glance

Why invest in Global Financial Services?

  • Seeks to benefit from the long-term structural changes in the global financial sector, such as the growth of investment management, non-traditional lenders, exchange traded financial instruments, and professional wealth management
  • Uses a bottom-up approach to invest in U.S. and non-U.S. companies with strong competitive positions that are benefiting from these trends, including those in asset management, diversified financial services, and specialized technology companies with financial expertise
  • Managed since inception by small-cap pioneer, Chuck Royce.

As of 09/30/17

  • Small/Mid-Cap
    Core Approach
    $2.14B
    Avg. Market Cap
  • Below Average
    Volatility
    99%
    Active Share
  • Lead Manager
    Tenure
    13+
    Years on Fund

Portfolio Management

"What we do in the global financial space is distinctly different. We invest primarily in non-leveraged financials–the agents, the asset managers, the insurance brokers, and the service and tech suppliers to this sector."
Chuck Royce

Performance

Average Annual Total Returns (%)

Outperformed Russell 2000 for the Year To Date period as of 09/30/17. Outpaced Russell 2500 Financial Services for the Quarter, Year To Date, 1-Year and since inception (12/31/03) periods as of 09/30/17.
QTR YTD 1YR 3YR 5YR 10YR SINCE INCEPT. DATE
Global Financial Services 4.27 14.5320.028.7013.626.638.35 12/31/03
Russell 2000 5.67 10.9420.7412.1813.797.858.87 N/A
Russell 2500 Fnl Svc 3.22 6.6118.2713.8614.936.827.78 N/A

Annual Operating Expenses: Gross 1.78 Net 1.60

NOV YTD 1YR 3YR 5YR 10YR SINCE INCEPT. DATE
Global Financial Services 3.87 20.0023.329.0614.317.328.61 12/31/03
Russell 2000 2.88 15.1118.3411.1415.028.759.04 N/A
Russell 2500 Fnl Svc 3.19 11.2216.6412.6715.898.018.01 N/A

Annual Operating Expenses: Gross 1.78 Net 1.60

DEC YTD 1YR 3YR 5YR 10YR SINCE INCEPT. DATE
Global Financial Services -0.65 19.2218.348.6014.157.118.54 12/31/03
Russell 2000 -1.42 13.4711.2310.7914.678.348.92 N/A
Russell 2500 Fnl Svc -0.50 10.6610.5312.2015.677.727.96 N/A

Annual Operating Expenses: Gross 1.78 Net 1.60

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 30 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 gross total annual operating expenses for the Service Class and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed, without right of termination, to waive fees and/or reimburse expenses to the extent necessary to maintain the Service 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 1.49% through April 30, 2018. 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.

Rolling Returns

For 93% of the periods, 10-year average annual total returns were greater than 5%.

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% 0 0
> 5% and ≤ 10% 43 93
> 0% and ≤ 5% 3 7
≤ 0% 0 0

The Fund averaged a 7.0% return over all 46 10-year monthly rolling return periods.

Market Cycle Performance

The Fund outperformed the Russell 2000 in one of the two previous full market cycle periods.
Peak-Peak - 07/13/07 - 04/29/11
Global Financial Services1.1%
Russell 20006.6%

Peak-Peak - 04/29/11 - 06/23/15
Global Financial Services60.6%
Russell 200058.5%

Peak-Current - 06/23/15 - 09/30/17
Global Financial Services12.6%
Russell 200018.9%

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 12/31/03 and 09/30/17

Global Financial Services$30,108.15
Russell 2000$32,157.31

Risk

Below Average Volatility vs. Peer Group as of 09/30/17

The Fund has a below average volatility within its peer group of 51 Financial Funds based on 5-year rolling standard deviation.

Down Market Performance Comparisonas of 09/30/17

The Fund outperformed the Russell 2000 during two out of three downturns of 15% or more from the index’s prior historical high since the Fund’s inception.

Market Downturns (%)

DownMarketImg
Outperformed in 11 out of 16 down quarters.

Russell 2000 Down Quarters

QUARTER ENDRUSSELL 2000 (%)GLOBAL FINANCIAL SERVICES (%)SPREAD (%)
03/31/16-1.5+1.9+3.4
09/30/15-11.9-10.2+1.7
09/30/14-7.4-4.2+3.2
06/30/12-3.5-6.2-2.7
09/30/11-21.9-20.1+1.8
06/30/11-1.6-2.8-1.2
06/30/10-9.9-12.8-2.9
03/31/09-15.0-8.7+6.3
12/31/08-26.1-25.1+1.0
09/30/08-1.1-0.5+0.6
03/31/08-9.9-10.4-0.5
12/31/07-4.6-3.1+1.5
09/30/07-3.1-3.10.0
06/30/06-5.0+1.5+6.5
03/31/05-5.3-2.3+3.0
09/30/04-2.9+0.8+3.7

Capture Ratios Fund's First Full Quarter (12/31/03) to 09/30/17

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 09/30/17

Over the past 10 years, the Fund produced lower volatility than the Russell 2000 Index.
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 produced lower volatility than the Russell 2000 Index.

Go to Relative Risk Spectrum Tool

Morningstar Statistical Measures as of 09/30/17

The Fund produced lower volatility than the Russell 2000 and 75% of financial objective funds, as shown by its standard deviation.
The Fund beat the Russell 2000 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 financial objective funds, as shown by its standard deviation.
The Fund performed within the top 25% of financial 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 financial objective funds, as shown by its standard deviation.
Sharpe RatioStandard Deviation
Global Financial Services0.4218.83
Russell 20000.4620.06
Category Median0.2722.25
Best Quartile Breakpoint0.3720.22

Category Median and Best Quartile Breakpoint based on 41 financial objective funds (oldest class only) with at least ten years of history.
Sharpe Ratio Standard Deviation
Global Financial Services
Russell 2000
Category Median
Best Quartile Breakpoint

Composition

Morningstar Style Map™as of 06/30/17

mstar-RYFSX

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 09/30/17

  RYFSX Russell 2000
Average Market Cap
2.14B
1.76B
99%
-
2016 Portfolio Turnover
37%
-
Weighted Average P/E,
18.1x
22.6x
Weighted Average P/B
2.0x
2.3x
Non-U.S. Investments (% of Net Assets)
41.7%
-
U.S. Investments (% of Net Assets)
56.7%
-

Portfolio Allocation

  • Total
    Holdings
    94


SECTORS
RYFSX (%) RUSSELL
2000 (%)
Financials
78.8
18.1
Real Estate
8.1
7.2
Information Technology
5.3
16.8
Industrials
3.6
15.1
Materials
2.2
4.4
Consumer Discretionary
0.3
11.9
Health Care
-
15.5
Energy
-
3.7
Utilities
-
3.6
Consumer Staples
-
2.7
Telecommunication Services
-
0.8
Cash and Cash Equivalents
1.6
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
E-L Financial
3.1
FirstService Corporation
2.9
First Citizens BancShares Cl. A
2.4
SEI Investments
2.3
Franco-Nevada Corporation
2.2
Popular
2.2
Sprott
2.2
Ashmore Group
2.1
BOK Financial
2.0
First Republic Bank
2.0
Northern Trust
2.0
Gluskin Sheff + Associates
2.0
B3
1.9
Virtu Financial Cl. A
1.9
Carlyle Group L.P.
1.9
Ares Management L.P.
1.8
National Western Life Group Cl. A
1.8
Fair Isaac
1.8
Charles Schwab (The) Corporation
1.7
Rothschild & Co
1.7
Top 20 as % of Net Assets
41.9

SECTORS
RYFSX (%) RUSSELL
2000 (%)
Financials
78.8
-
Real Estate
7.9
-
Information Technology
5.2
-
Industrials
3.4
-
Materials
2.4
-
Consumer Discretionary
0.7
-
Cash and Cash Equivalents
1.6
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
E-L Financial
3.0
FirstService Corporation
2.6
First Citizens BancShares Cl. A
2.6
SEI Investments
2.5
Sprott
2.5
Franco-Nevada Corporation
2.4
Virtu Financial Cl. A
2.1
Popular
2.1
VZ Holding
2.0
Ashmore Group
2.0
Rothschild & Co
1.9
BOK Financial
1.9
Clarkson
1.8
National Western Life Group Cl. A
1.8
Northern Trust
1.8
U.S. Global Investors Cl. A
1.7
Ares Management L.P.
1.6
MarketAxess Holdings
1.6
Altus Group
1.6
B3
1.6
Top 20 as % of Net Assets
41.1

Portfolio Holdings

View the complete list of holdings for this fund as of 09/30/17. Unaudited schedule of portfolio holdings is presented for informational purposes only.

Geographical Breakdown

Portfolio Country Breakdownas of 09/30/17

Countries% of net assets
(subject to change)
United States56.7
Canada15.6
United Kingdom8.7
Switzerland2.6
India2.2
Brazil1.9
France1.7
Hong Kong1.6
South Africa1.5
Singapore1.3
New Zealand0.7
Bermuda0.6
Australia0.6
Egypt0.6
Greece0.5
Poland0.4
United Arab Emirates (U.A.E.)0.3
Luxembourg0.3
Lebanon0.2
Japan0.1

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 ($) REINVEST
PRICE ($)
12/14/16 12/15/16 12/15/16 0.0483 0.0062 0.0180 - 0.0725 8.90
12/16/15 12/17/15 12/17/15 0.1085 0.0626 0.6778 - 0.8489 7.95
12/16/14 12/17/14 12/17/14 0.0671 0.0895 0.5577 - 0.7143 9.03
12/04/13 12/05/13 12/05/13 0.0177 - - - 0.0177 9.33
12/27/12 12/28/12 12/28/12 0.0284 - - - 0.0284 6.75
12/05/12 12/06/12 12/06/12 0.0335 - - - 0.0335 6.66
12/07/11 12/08/11 12/08/11 0.0559 - - - 0.0559 5.69
12/08/10 12/09/10 12/09/10 0.0959 - - - 0.0959 6.38
12/08/09 12/09/09 12/09/09 0.0442 - - - 0.0442 5.43

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 30 days) 1.00

Annual Fund Operating Expenses (%)

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

Management fees 1.00
Distribution (12b-1) fees 0.25
Other expenses 0.42
Acquired fund fees and expenses 0.11
Total annual Fund operating expenses 1.78
Fee waivers and/or expense reimbursements (0.18)
Total annual Fund operating expenses after fee waivers and/or expense reimbursements1.60

Royce & Associates has contractually agreed, without right of termination, to waive fees and/or reimburse expenses to the extent necessary to maintain the Service 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 1.49% through April 30, 2018.

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 equity securities that are "principally" engaged in the financial services industry. The Fund is not a complete investment program. It is designed for long-term investors who can accept the risks of investing in a fund with common stock holdings primarily in small-cap and mid-cap financial services small- and mid-cap companies. Therefore, the Fund is subject to certain risks associated with the industry, including, among other things, changes in government regulations, interest rate levels, and general economic conditions. The Fund invests primarily in small-cap and/or 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.) As of 09/30/17 the Fund invested a significant portion of its assets in a limited number of stocks, which may involve considerably more risk than a more broadly diversified portfolio because a decline in the value of any of these stocks would cause the Fund’s overall value to decline to a greater degree. The Fund may invest up to 50% of its net assets in foreign securities (measured at the time of investment), 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. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. 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 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.

Managed by Chuck Royce since 2003, assistant portfolio manager Chris Flynn since 2005

12/31/2003 12:00:00 AM

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