26

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 1-, 3-, 5-year, and since inception (12/31/10) periods ended 6/30/16

As of 06/30/16

  • Small-Cap
    Core Approach
    $2.02B
    Avg. Market Cap
  • Below Average
    Volatility
    99%
    Active Share
  • Fund
    Longevity
    5+
    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

Cumulative Total Returns (%)

Outperformed Russell Global ex-U.S. Small Cap for the Quarter, 1-Year, 3-Year, 5-Year and since inception (12/31/10) periods as of 06/30/16.
QTR YTD 1YR 3YR 5YR SINCE INCEPT. DATE
International Premier 1.93 0.712.936.714.634.97 12/31/10
Russell Glo x US SC 0.09 1.01-5.774.061.911.89 N/A

Annual Operating Expenses: Gross 11.53 Net 1.74

AUG YTD 1YR 3YR 5YR SINCE INCEPT. DATE
International Premier -0.71 3.1410.426.956.525.26 12/31/10
Russell Glo x US SC -0.25 6.388.845.004.702.76 N/A

Annual Operating Expenses: Gross 11.53 Net 1.74

SEP YTD 1YR 3YR 5YR SINCE INCEPT. DATE
International Premier 2.98 6.2117.075.8910.555.74 12/31/10
Russell Glo x US SC 2.86 9.4214.373.338.243.24 N/A

Annual Operating Expenses: Gross 11.53 Net 1.74

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 1.74% through April 30, 2015 and at or below 1.99% through April 30, 2026.

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 (6/30/16).
Inception-Current - 12/31/10 - 06/30/16
International Premier30.6%
Russell Glo x US SC10.8%

Peak-Current - 07/03/14 - 06/30/16
International Premier3.1%
Russell Glo x US SC-9.8%

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 06/30/16

International Premier$13,056.62
Russell Glo x US SC$11,082.02

Portfolio Impactas of 06/30/16

SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Health Care
20.80
12.64
2.53
Financials
12.10
6.93
0.75
Information Technology
15.97
2.89
0.50
Consumer Staples
2.29
1.25
0.04
Consumer Discretionary
6.05
-2.25
-0.15
Industrials
32.87
-2.46
-0.81
Materials
6.66
-12.18
-0.89
Cash
3.25
0.06
0.00

Top Contributors

INDUSTRYSECTORGAIN (%)
Health Care Equipment & SuppliesHealth Care1.59
Health Care Providers & ServicesHealth Care0.76
Electronic Equipment, Instruments & ComponentsInformation Technology0.45
Trading Companies & DistributorsIndustrials0.43
Real Estate Management & DevelopmentFinancials0.41

Top Detractors

INDUSTRYSECTORGAIN (%)
ChemicalsMaterials-0.63
Professional ServicesIndustrials-0.40
Aerospace & DefenseIndustrials-0.27
Containers & PackagingMaterials-0.26
MediaConsumer Discretionary-0.17

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
OdontoPrevHealth Care Providers & ServicesHealth Care0.76
Carl Zeiss MeditecHealth Care Equipment & SuppliesHealth Care0.66
MISUMI GroupTrading Companies & DistributorsIndustrials0.58
STRATEC BiomedicalHealth Care Equipment & SuppliesHealth Care0.45
Relo HoldingsReal Estate Management & DevelopmentFinancials0.41

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
BertrandtProfessional ServicesIndustrials-0.44
VictrexChemicalsMaterials-0.36
Azimut HoldingCapital MarketsFinancials-0.36
FDM Group HoldingsIT ServicesInformation Technology-0.32
ElementisChemicalsMaterials-0.27
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Health Care
18.55
7.06
1.95
Financials
12.21
8.62
0.74
Information Technology
16.45
2.77
0.35
Consumer Staples
2.28
9.95
0.30
Industrials
33.57
-0.42
0.11
Energy
0.30
-34.55
-0.67
Consumer Discretionary
6.95
-5.88
-0.78
Materials
6.49
-15.91
-1.04
Cash
3.20
0.13
0.00

Top Contributors

INDUSTRYSECTORGAIN (%)
Health Care Equipment & SuppliesHealth Care1.41
Health Care Providers & ServicesHealth Care1.29
Electronic Equipment, Instruments & ComponentsInformation Technology0.50
Consumer FinanceFinancials0.43
MachineryIndustrials0.43

Top Detractors

INDUSTRYSECTORGAIN (%)
PharmaceuticalsHealth Care-0.79
ChemicalsMaterials-0.72
Oil, Gas & Consumable FuelsEnergy-0.67
Auto ComponentsConsumer Discretionary-0.51
Textiles, Apparel & Luxury GoodsConsumer Discretionary-0.32

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
OdontoPrevHealth Care Providers & ServicesHealth Care1.29
Carl Zeiss MeditecHealth Care Equipment & SuppliesHealth Care0.68
MISUMI GroupTrading Companies & DistributorsIndustrials0.62
Partners Group HoldingCapital MarketsFinancials0.50
Fidessa GroupSoftwareInformation Technology0.45

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
VirbacPharmaceuticalsHealth Care-0.77
Gaztransport Et TechnigazOil, Gas & Consumable FuelsEnergy-0.67
Motherson Sumi SystemsAuto ComponentsConsumer Discretionary-0.51
VictrexChemicalsMaterials-0.50
Azimut HoldingCapital MarketsFinancials-0.46
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Health Care
16.71
34.24
5.54
Financials
13.54
14.35
1.63
Industrials
31.04
2.45
1.27
Information Technology
16.70
2.53
0.39
Consumer Staples
2.09
0.55
0.14
Materials
6.32
-19.90
-1.28
Energy
0.98
-57.38
-1.29
Consumer Discretionary
8.55
-10.53
-1.38
Cash
4.05
0.17
0.01

Top Contributors

INDUSTRYSECTORGAIN (%)
Health Care Equipment & SuppliesHealth Care3.37
Commercial Services & SuppliesIndustrials1.60
Health Care Providers & ServicesHealth Care1.29
Trading Companies & DistributorsIndustrials1.06
Electrical EquipmentIndustrials0.90

Top Detractors

INDUSTRYSECTORGAIN (%)
ChemicalsMaterials-1.24
Oil, Gas & Consumable FuelsEnergy-1.07
MarineIndustrials-0.78
Aerospace & DefenseIndustrials-0.77
Auto ComponentsConsumer Discretionary-0.63

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
OdontoPrevHealth Care Providers & ServicesHealth Care1.29
Carl Zeiss MeditecHealth Care Equipment & SuppliesHealth Care1.22
Partners Group HoldingCapital MarketsFinancials1.10
LatchwaysCommercial Services & SuppliesIndustrials1.06
HellermannTyton GroupElectrical EquipmentIndustrials0.94

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Motherson Sumi Systems 1Auto ComponentsConsumer Discretionary-1.09
Gaztransport Et TechnigazOil, Gas & Consumable FuelsEnergy-1.07
TOTVSSoftwareInformation Technology-0.96
ClarksonMarineIndustrials-0.78
SeniorAerospace & DefenseIndustrials-0.77
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Health Care
16.06
71.91
11.05
Industrials
23.01
43.38
9.22
Financials
12.83
55.52
5.44
Information Technology
16.60
21.19
3.34
Consumer Discretionary
16.31
1.73
1.44
Consumer Staples
3.76
18.42
0.77
Materials
6.01
-5.56
0.21
Energy
1.25
-52.83
-1.08
Cash
4.16
0.22
0.01
Unclassified
0.00
0.00
0.00

Top Contributors

INDUSTRYSECTORGAIN (%)
Health Care Equipment & SuppliesHealth Care5.13
Consumer FinanceFinancials4.26
Capital MarketsFinancials3.28
PharmaceuticalsHealth Care3.02
Specialty RetailConsumer Discretionary2.81

Top Detractors

INDUSTRYSECTORGAIN (%)
MediaConsumer Discretionary-2.32
Real Estate Management & DevelopmentFinancials-2.05
Textiles, Apparel & Luxury GoodsConsumer Discretionary-1.89
Oil, Gas & Consumable FuelsEnergy-1.01
Aerospace & DefenseIndustrials-0.77

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Bajaj FinanceConsumer FinanceFinancials4.22
VZ HoldingCapital MarketsFinancials2.52
RecordatiPharmaceuticalsHealth Care2.28
dorma+kaba HoldingCommercial Services & SuppliesIndustrials2.01
MISUMI GroupTrading Companies & DistributorsIndustrials1.98

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
LPS Brasil Consultoria de ImoveisReal Estate Management & DevelopmentFinancials-2.46
Daphne International HoldingsTextiles, Apparel & Luxury GoodsConsumer Discretionary-1.83
TOTVSSoftwareInformation Technology-1.39
Media PrimaMediaConsumer Discretionary-1.28
Gaztransport Et TechnigazOil, Gas & Consumable FuelsEnergy-1.01
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Health Care
17.83
103.97
17.62
Industrials
21.29
60.67
14.75
Financials
10.90
85.01
7.12
Consumer Staples
4.17
62.87
3.54
Information Technology
13.34
5.42
2.42
Materials
7.75
7.32
0.25
Telecommunication Services
0.07
21.28
0.13
Energy
0.75
-52.83
-1.08
Consumer Discretionary
18.96
-16.00
-4.90
Cash
4.94
0.34
0.02
Unclassified
0.00
0.00
0.00

Top Contributors

INDUSTRYSECTORGAIN (%)
Health Care Equipment & SuppliesHealth Care7.21
PharmaceuticalsHealth Care5.95
MachineryIndustrials5.50
Capital MarketsFinancials5.30
Consumer FinanceFinancials4.26

Top Detractors

INDUSTRYSECTORGAIN (%)
Textiles, Apparel & Luxury GoodsConsumer Discretionary-3.86
Diversified Consumer ServicesConsumer Discretionary-3.33
Real Estate Management & DevelopmentFinancials-2.68
Semiconductors & Semiconductor EquipmentInformation Technology-2.23
MediaConsumer Discretionary-1.24

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Bajaj FinanceConsumer FinanceFinancials4.22
VZ HoldingCapital MarketsFinancials3.55
RecordatiPharmaceuticalsHealth Care3.36
DiaSorinHealth Care Equipment & SuppliesHealth Care2.44
MISUMI GroupTrading Companies & DistributorsIndustrials2.35

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
MegaStudyDiversified Consumer ServicesConsumer Discretionary-3.33
Daphne International HoldingsTextiles, Apparel & Luxury GoodsConsumer Discretionary-2.50
LPS Brasil Consultoria de ImoveisReal Estate Management & DevelopmentFinancials-2.46
TOTVSSoftwareInformation Technology-1.47
AixtronSemiconductors & Semiconductor EquipmentInformation Technology-1.22

Risk

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

The Fund has a below average volatility within its peer group of 67 International Small-Cap Funds based on 5-year rolling standard deviation.

Down Market Performance Comparisonas of 06/30/16

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 index’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 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 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 06/30/16

The Fund beat the Russell Glo x US SC and performed within the top 25% 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.
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.
Sharpe RatioStandard Deviation
International Premier0.3814.56
Russell Glo x US SC0.2015.15
Category Median0.3214.98
Best Quartile Breakpoint0.4414.00

Category Median and Best Quartile Breakpoint based on 67 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 06/30/16

mstar-RINRX

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

  RINRX Russell Glo x US SC
Average Market Cap
2.02B
985.8M
99%
-
2015 Portfolio Turnover
67%
-
Weighted Average P/E,
20.7x
14.0x
Weighted Average P/B
3.4x
1.5x
Non-U.S. Investments (% of Net Assets)
96.6%
-
U.S. Investments (% of Net Assets)
0.0%
-

Portfolio Allocation

  • Total
    Holdings
    48


SECTORS
RINRX (%) RUSSELL
GLO X US SC (%)
Industrials
32.0
18.4
Health Care
21.5
7.5
Information Technology
13.9
11.7
Financials
13.0
20.7
Materials
7.4
10.6
Consumer Discretionary
6.7
16.6
Consumer Staples
2.2
7.5
Energy
-
3.7
Utilities
-
2.4
Telecommunication Services
-
0.9
Cash and Cash Equivalents
3.4
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
VZ Holding
3.3
Mayr-Melnhof Karton
3.2
USS
3.1
Meitec Corporation
3.1
Bajaj Finance
2.8
MISUMI Group
2.8
Partners Group Holding
2.7
OdontoPrev
2.7
Thermador Groupe
2.7
Santen Pharmaceutical
2.6
Top 10 as % of Net Assets
29.0

SECTORS
RINRX (%) RUSSELL
GLO X US SC (%)
Industrials
32.0
-
Health Care
19.9
-
Financials
14.0
-
Information Technology
13.7
-
Materials
7.9
-
Consumer Discretionary
7.1
-
Consumer Staples
2.1
-
Cash and Cash Equivalents
3.3
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Bajaj Finance
3.3
Mayr-Melnhof Karton
3.2
USS
3.2
VZ Holding
3.2
Meitec Corporation
3.1
Thermador Groupe
2.8
Bertrandt
2.8
Partners Group Holding
2.6
MISUMI Group
2.6
Santen Pharmaceutical
2.5
Top 10 as % of Net Assets
29.3

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.

Geographical Breakdown

Portfolio Country Breakdownas of 06/30/16

Countries% of net assets
(subject to change)
Japan22.4
United Kingdom19.5
Switzerland12.9
Germany10.8
France4.9
Austria3.2
Sweden3.0
India2.8
Brazil2.7
Canada2.3
New Zealand2.1
Hong Kong2.0
Denmark1.8
Italy1.7
China1.6
Australia1.6
Singapore1.4

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 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 1.00
Distribution (12b-1) fees 0.50
Other expenses 10.03
Total annual Fund operating expenses 11.53
Fee waivers and/or expense reimbursements (9.79)
Total annual Fund operating expenses after fee waivers and/or expense reimbursements1.74
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 1.74% through April 30, 2017 and at or below 1.99% through April 30, 2026.

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.

Managed by David Nadel since 2010, assistant Mark Rayner since 2014

2/26/2016 12:00:00 AM

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