21

At a Glance

Why invest in International Premier?

  • Focuses on a limited number of “premier” non-U.S. small-cap companies (generally market caps up to $3 billion) with discernible competitive advantages, high returns on invested capital, and sustainable, moat-like franchises
  • Seeks to identify companies with notable strengths in industry structure, competitive positioning, operational efficiency, financial track record, and corporate governance
  • Outperformed its benchmark, the Russell Global ex-U.S. Small Cap Index, for the 3-, 5-year, and since inception (12/31/10) periods ended 12/31/16

As of 12/31/16

  • Small-Cap
    Core Approach
    $1.81B
    Avg. Market Cap
  • Below Average
    Volatility
    Active Share
  • Fund
    Longevity
    6+
    Years of History

Portfolio Management

    "We're seeking to build a portfolio of very high-quality, world-class businesses–those that are a-cyclical growers, can generate plentiful free cash, and have a genuine and defensible moat."
    David Nadel

    Performance

    Average Annual Total Returns (%)

    QTR YTD 1YR 3YR 5YR SINCE INCEPT. DATE
    -6.75 -1.65-1.651.618.904.13 01/01/01

    Annual Operating Expenses: Gross 2.52 Net 2.19

    DEC YTD 1YR 3YR 5YR SINCE INCEPT. DATE
    1.86 -1.65-1.651.618.904.13 01/01/01

    Annual Operating Expenses: Gross 2.52 Net 2.19

    JAN YTD 1YR 3YR 5YR SINCE INCEPT. DATE
    2.44 2.4412.982.498.034.51 01/01/01

    Annual Operating Expenses: Gross 2.52 Net 2.19

    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 2% 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 annual operating expenses and include management fees, and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund's prospectus dated 1/15/14. Royce & Associates has contractually agreed, without right of termination, to waive fees and/or reimburse expenses to the extent necessary to maintain the Investment Classes' 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 2.19% through April 30, 2017.

    All performance and risk information presented in this material prior to the commencement date of Investment Class shares on 1/15/14 reflects Service Class results. Shares of RIP's Service Class bear an annual distribution expense that is not borne by the Investment Class.

    Cumulative Performance since Inception (12/31/10) and Market Cycle Peak

    The Fund outperformed the Russell Glo x US SC from the 7/3/14 index peak through current (12/31/16).
    Inception-Current - 12/31/10 - 12/31/16
    International Premier27.5%
    Russell Glo x US SC15.2%

    Peak-Current - 07/03/14 - 12/31/16
    International Premier0.7%
    Russell Glo x US SC-6.2%

    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. 

    Growth of Investment

    Value of $10,000 invested between 12/31/10 and 12/31/16

    International Premier$12,750.51
    Russell Glo x US SC$11,523.88

    Portfolio Impactas of 12/31/16

    SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
    Materials
    10.17
    5.62
    0.59
    Consumer Staples
    2.62
    -10.21
    -0.25
    Real Estate
    2.75
    -13.75
    -0.40
    Consumer Discretionary
    6.60
    -9.48
    -0.59
    Financials
    11.50
    -5.48
    -0.67
    Information Technology
    10.68
    -9.50
    -1.02
    Health Care
    19.33
    -8.96
    -1.61
    Industrials
    32.09
    -5.66
    -1.76
    Cash
    4.26
    0.11
    0.00

    Top Contributors

    INDUSTRYSECTORGAIN (%)
    ChemicalsMaterials0.68
    Building ProductsIndustrials0.03
    Health Care Providers & ServicesHealth Care0.01
    Electrical EquipmentIndustrials0.01
    MarineIndustrials-0.01

    Top Detractors

    INDUSTRYSECTORGAIN (%)
    Health Care Equipment & SuppliesHealth Care-1.36
    Commercial Services & SuppliesIndustrials-0.67
    Consumer FinanceFinancials-0.57
    Electronic Equipment, Instruments & ComponentsInformation Technology-0.55
    Specialty RetailConsumer Discretionary-0.50

    Top Contributors

    COMPANYINDUSTRYSECTORGAIN (%)
    VictrexChemicalsMaterials0.42
    Meitec CorporationProfessional ServicesIndustrials0.35
    ARA Asset ManagementCapital MarketsFinancials0.32
    ElementisChemicalsMaterials0.25
    VZ HoldingCapital MarketsFinancials0.24

    Top Detractors

    COMPANYINDUSTRYSECTORGAIN (%)
    Bajaj FinanceConsumer FinanceFinancials-0.57
    BerendsenCommercial Services & SuppliesIndustrials-0.54
    SeniorAerospace & DefenseIndustrials-0.45
    Santen PharmaceuticalPharmaceuticalsHealth Care-0.44
    Relo GroupReal Estate Management & DevelopmentReal Estate-0.40
    SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
    Information Technology
    14.05
    9.78
    1.33
    Financials
    11.59
    12.29
    1.02
    Industrials
    32.89
    -0.07
    0.28
    Health Care
    19.17
    -3.87
    0.10
    Consumer Staples
    2.35
    0.55
    0.09
    Real Estate
    1.39
    4.57
    -0.11
    Materials
    7.86
    -11.07
    -0.43
    Energy
    0.15
    -34.55
    -0.67
    Consumer Discretionary
    6.82
    -7.51
    -0.83
    Cash
    3.71
    0.31
    0.01
    Unclassified
    0.02
    -0.88
    -0.01

    Top Contributors

    INDUSTRYSECTORGAIN (%)
    Health Care Providers & ServicesHealth Care1.22
    Electronic Equipment, Instruments & ComponentsInformation Technology0.89
    Consumer FinanceFinancials0.71
    IT ServicesInformation Technology0.59
    Trading Companies & DistributorsIndustrials0.55

    Top Detractors

    INDUSTRYSECTORGAIN (%)
    PharmaceuticalsHealth Care-1.33
    Oil, Gas & Consumable FuelsEnergy-0.67
    Aerospace & DefenseIndustrials-0.61
    Commercial Services & SuppliesIndustrials-0.53
    Auto ComponentsConsumer Discretionary-0.51

    Top Contributors

    COMPANYINDUSTRYSECTORGAIN (%)
    OdontoPrevHealth Care Providers & ServicesHealth Care1.22
    Partners Group HoldingCapital MarketsFinancials0.73
    Bajaj FinanceConsumer FinanceFinancials0.71
    LEM HoldingElectronic Equipment, Instruments & ComponentsInformation Technology0.53
    Meitec CorporationProfessional ServicesIndustrials0.53

    Top Detractors

    COMPANYINDUSTRYSECTORGAIN (%)
    VirbacPharmaceuticalsHealth Care-0.73
    Gaztransport Et TechnigazOil, Gas & Consumable FuelsEnergy-0.67
    Santen PharmaceuticalPharmaceuticalsHealth Care-0.64
    SeniorAerospace & DefenseIndustrials-0.61
    Value Partners GroupCapital MarketsFinancials-0.59
    SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
    Information Technology
    14.05
    9.78
    1.33
    Financials
    11.59
    12.29
    1.02
    Industrials
    32.89
    -0.07
    0.28
    Health Care
    19.17
    -3.87
    0.10
    Consumer Staples
    2.35
    0.55
    0.09
    Real Estate
    1.39
    4.57
    -0.11
    Materials
    7.86
    -11.07
    -0.43
    Energy
    0.15
    -34.55
    -0.67
    Consumer Discretionary
    6.82
    -7.51
    -0.83
    Cash
    3.71
    0.31
    0.01
    Unclassified
    0.02
    -0.88
    -0.01

    Top Contributors

    INDUSTRYSECTORGAIN (%)
    Health Care Providers & ServicesHealth Care1.22
    Electronic Equipment, Instruments & ComponentsInformation Technology0.89
    Consumer FinanceFinancials0.71
    IT ServicesInformation Technology0.59
    Trading Companies & DistributorsIndustrials0.55

    Top Detractors

    INDUSTRYSECTORGAIN (%)
    PharmaceuticalsHealth Care-1.33
    Oil, Gas & Consumable FuelsEnergy-0.67
    Aerospace & DefenseIndustrials-0.61
    Commercial Services & SuppliesIndustrials-0.53
    Auto ComponentsConsumer Discretionary-0.51

    Top Contributors

    COMPANYINDUSTRYSECTORGAIN (%)
    OdontoPrevHealth Care Providers & ServicesHealth Care1.22
    Partners Group HoldingCapital MarketsFinancials0.73
    Bajaj FinanceConsumer FinanceFinancials0.71
    LEM HoldingElectronic Equipment, Instruments & ComponentsInformation Technology0.53
    Meitec CorporationProfessional ServicesIndustrials0.53

    Top Detractors

    COMPANYINDUSTRYSECTORGAIN (%)
    VirbacPharmaceuticalsHealth Care-0.73
    Gaztransport Et TechnigazOil, Gas & Consumable FuelsEnergy-0.67
    Santen PharmaceuticalPharmaceuticalsHealth Care-0.64
    SeniorAerospace & DefenseIndustrials-0.61
    Value Partners GroupCapital MarketsFinancials-0.59
    SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
    Financials
    12.63
    57.40
    6.18
    Health Care
    15.69
    33.31
    5.05
    Industrials
    23.72
    15.97
    3.64
    Consumer Staples
    3.49
    4.93
    0.36
    Consumer Discretionary
    13.61
    -2.61
    0.29
    Information Technology
    15.36
    0.41
    -0.05
    Materials
    6.57
    -15.58
    -0.41
    Energy
    1.24
    -52.83
    -1.07
    Real Estate
    1.11
    -70.43
    -2.21
    Cash
    4.05
    0.38
    0.02
    Unclassified
    2.53
    48.82
    1.75

    Top Contributors

    INDUSTRYSECTORGAIN (%)
    Consumer FinanceFinancials4.34
    Health Care Equipment & SuppliesHealth Care2.53
    Building ProductsIndustrials2.21
    Trading Companies & DistributorsIndustrials2.20
    Capital MarketsFinancials2.17

    Top Detractors

    INDUSTRYSECTORGAIN (%)
    Real Estate Management & DevelopmentReal Estate-2.21
    MediaConsumer Discretionary-1.89
    Aerospace & DefenseIndustrials-1.07
    Oil, Gas & Consumable FuelsEnergy-1.01
    Electronic Equipment, Instruments & ComponentsInformation Technology-0.43

    Top Contributors

    COMPANYINDUSTRYSECTORGAIN (%)
    Bajaj FinanceConsumer FinanceFinancials4.34
    VZ HoldingCapital MarketsFinancials1.93
    Partners Group HoldingCapital MarketsFinancials1.74
    RecordatiPharmaceuticalsHealth Care1.49
    MISUMI GroupTrading Companies & DistributorsIndustrials1.41

    Top Detractors

    COMPANYINDUSTRYSECTORGAIN (%)
    LPS Brasil Consultoria de ImoveisReal Estate Management & DevelopmentReal Estate-2.10
    TOTVSSoftwareInformation Technology-1.39
    LPKF Laser & ElectronicsElectronic Equipment, Instruments & ComponentsInformation Technology-1.17
    Ashmore GroupCapital MarketsFinancials-1.15
    SeniorAerospace & DefenseIndustrials-1.07
    SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
    Health Care
    18.10
    120.37
    20.53
    Industrials
    21.06
    89.71
    16.08
    Financials
    10.59
    190.86
    12.99
    Materials
    7.27
    48.94
    8.62
    Information Technology
    12.47
    74.83
    6.25
    Consumer Discretionary
    17.10
    11.04
    4.85
    Consumer Staples
    3.97
    48.38
    3.38
    Telecommunication Services
    0.03
    38.93
    0.24
    Energy
    0.74
    -52.83
    -1.07
    Real Estate
    0.76
    -74.39
    -2.31
    Cash
    4.88
    0.51
    0.03
    Unclassified
    3.02
    128.59
    4.33

    Top Contributors

    INDUSTRYSECTORGAIN (%)
    MachineryIndustrials8.28
    PharmaceuticalsHealth Care7.77
    Health Care Equipment & SuppliesHealth Care7.75
    Capital MarketsFinancials7.07
    Building ProductsIndustrials4.70

    Top Detractors

    INDUSTRYSECTORGAIN (%)
    Real Estate Management & DevelopmentReal Estate-2.31
    Aerospace & DefenseIndustrials-1.07
    MediaConsumer Discretionary-1.05
    Diversified Consumer ServicesConsumer Discretionary-1.01
    Oil, Gas & Consumable FuelsEnergy-1.01

    Top Contributors

    COMPANYINDUSTRYSECTORGAIN (%)
    Bajaj FinanceConsumer FinanceFinancials4.45
    RecordatiPharmaceuticalsHealth Care4.09
    VZ HoldingCapital MarketsFinancials3.64
    DiaSorinHealth Care Equipment & SuppliesHealth Care3.17
    Partners Group HoldingCapital MarketsFinancials2.46

    Top Detractors

    COMPANYINDUSTRYSECTORGAIN (%)
    Daphne International HoldingsTextiles, Apparel & Luxury GoodsConsumer Discretionary-2.51
    LPS Brasil Consultoria de ImoveisReal Estate Management & DevelopmentReal Estate-2.44
    TOTVSSoftwareInformation Technology-1.45
    SeniorAerospace & DefenseIndustrials-1.07
    Media Chinese InternationalMediaConsumer Discretionary-1.04

    Risk

    Below Average Volatility vs. Peer Group as of 12/31/16

    The Fund has a below average volatility within its peer group of 78 International Small-Cap Funds based on 5-year rolling standard deviation.

    Down Market Performance Comparisonas of 12/31/16

    The Fund outperformed the Russell Glo x US SC during all one downturns of 10% or more from the index’s prior historical high since the Fund’s inception.

    Market Downturns (%)

    DownMarketImg
    Outperformed in 5 out of 7 down quarters.

    Russell Glo x US SC Down Quarters

    QUARTER ENDRUSSELL GLO X US SC (%)INTERNATIONAL PREMIER (%)SPREAD (%)
    09/30/15-11.2-5.8+5.4
    12/31/14-4.5-5.6-1.1
    09/30/14-6.2-5.8+0.4
    06/30/13-4.5+0.5+5.0
    06/30/12-8.5-5.4+3.1
    09/30/11-19.4-20.4-1.0
    06/30/11-0.2+1.4+1.6

    Capture Ratios Fund's First Full Quarter (12/31/10) to 12/31/16

    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 12/31/16

    Over the past 5 years, the Fund outperformed the Russell Global ex-U.S. Small Cap Index with lower volatility.
    Over the past 3 years, the Fund outperformed the Russell Global ex-U.S. Small Cap Index with lower volatility.
    From the Fund's inception, the Fund outperformed the Russell Global ex-U.S. Small Cap Index with lower volatility.

    Go to Relative Risk Spectrum Tool

    Morningstar Statistical Measures as of 12/31/16

    The Fund beat the Russell Glo x US SC and performed within the top 50% of international small-cap objective funds on a risk-adjusted basis, as shown by its Sharpe ratio. In addition, the Fund produced lower volatility than the Russell Glo x US SC and 50% of international small-cap objective funds, as shown by its standard deviation.
    The Fund beat the Russell Glo x US SC and performed within the top 50% of international small-cap objective funds on a risk-adjusted basis, as shown by its Sharpe ratio. In addition, the Fund produced lower volatility than the Russell Glo x US SC and 75% of international small-cap objective funds, as shown by its standard deviation.
    Sharpe RatioStandard Deviation
    International Premier0.7512.19
    Russell Glo x US SC0.5912.99
    Category Median0.7213.04
    Best Quartile Breakpoint0.8012.27

    Category Median and Best Quartile Breakpoint based on 78 international small-cap objective funds (oldest class only) with at least five years of history.
    Sharpe Ratio Standard Deviation
    International Premier
    Russell Glo x US SC
    Category Median
    Best Quartile Breakpoint

    Composition

    Morningstar Style Map™as of 09/30/16

    mstar-RINPX

    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 Label

      Russell Glo x US SC
    Average Market Cap
    N/A
    1.05B
    Label
    -
    Portfolio Turnover
    Label
    -
    Weighted Average P/B
    Label
    1.6x
    Non-U.S. Investments (% of Net Assets)
    97.0%
    -
    U.S. Investments (% of Net Assets)
    0.0%
    -

    Geographical Breakdown

    Distributions

    NAV & Distributions


    Start DateEnd Date
    to

    Learn more about distributions

    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 on purchases held for less than 365 days 1.00
    Maximum sales charge (load) imposed on reinvested dividends 0.00

    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 1.00
    Other expenses 0.52
    Total annual Fund operating expenses 2.52
    Fee waivers and/or expense reimbursements (0.33)
    Total annual Fund operating expenses after fee waivers and/or expense reimbursements2.19
    Royce & Associates has contractually agreed, without right of termination, to waive fees and/or reimburse expenses to the extent necessary to maintain the Investment Classes' 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 2.19% through April 30, 2017.

    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 small-cap stocks, which may involve considerably more risk than investing in larger-cap stocks The Fund also invests primarily in a limited number of stocks, which may involve considerably more risk than a less concentrated portfolio because a decline in the value of any one of these stocks would cause the Fund's overall value to decline to a greater degree. (Please see "Primary Risks for Fund Investors" in the prospectus.) The Fund may invest a significant portion of its assets in securities of companies headquartered in foreign countries, which may be subject to different risks than investments in securities of U.S. companies, including adverse political, social, economic, or other developments that are unique to a particular country or region. (Please see "Investing in Foreign Securities" in the prospectus.) Therefore, the prices of the securities of foreign companies in particular countries or regions may, at times, move in a different direction than those of the securities of U.S. companies. (Please see "Primary Risks for Fund Investors" 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. The Russell Global ex-U.S. Small Cap Index is an unmanaged, capitalization-weighted index of global small-cap stocks, excluding the United States. Index returns include net reinvested dividends and/or interest income. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.

    2/26/2016 12:00:00 AM

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