71

At a Glance

Why invest in Low-Priced Stock?

  • Invests primarily in low-priced stocks (those with an average cost per share in the portfolio of less than $25), a historically inefficient, institutionally neglected area of the market ripe with potential opportunities
  • Small-cap core fund (generally market caps up to $3 billion) that combines multiple investment themes by investing in low-priced companies with solid fundamentals and/or prospects selling at prices that Royce believes do not fully reflect these attributes
  • Averaged an 10.6% return over all 160 10-year monthly rolling return periods ended 3/31/17 from inception (12/15/93)

As of 03/31/17

  • Small-Cap
    Core Approach
    $687.7M
    Avg. Market Cap
  • High
    Volatility
    95%
    Active Share
  • Fund
    Longevity
    23+
    Years of History

Portfolio Management

"Our stock selection process is strictly bottom up and fundamentally based. We are highly disciplined about buying companies at what we think is the right price and selling them at the right time, too."
Jim Stoeffel

Performance

Average Annual Total Returns (%)

Outperformed Russell 2000 for the 20-Year and since inception (12/15/93) periods as of 03/31/17.
QTR YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Low-Priced Stock 0.00 0.0017.40-0.161.562.805.679.5010.13 12/15/93
Russell 2000 2.47 2.4726.227.2212.357.128.388.679.10 N/A

Annual Operating Expenses: 1.12

MAR YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Low-Priced Stock 0.49 0.0017.40-0.161.562.805.679.5010.13 12/15/93
Russell 2000 0.13 2.4726.227.2212.357.128.388.679.10 N/A

Annual Operating Expenses: 1.12

APR YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Low-Priced Stock 0.00 0.0015.90-0.111.822.365.809.6210.10 12/15/93
Russell 2000 1.10 3.5924.589.3612.716.858.538.829.12 N/A

Annual Operating Expenses: 1.12

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. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Operating expenses reflect the Fund's total annual 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. 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 1/3/06 reflects Service Class results. Shares of the Fund’s Service Class bear an annual distribution expense that is not borne by the Institutional Class.

Rolling Returns

On a monthly basis, the Fund outperformed the Russell 2000 in 58% of all 10-Year periods; 70% of all 5-Year periods; and 55% of all 1-Year periods.

For 88% of the periods, 10-year average annual total returns were greater than 5%.

Relative Returns: Monthly Rolling Average Annual Return Periods 20 Years Through 03/31/17

periods beating
the index(%)
fund
avg(%)
index
avg(%)
10-year
70/121
58 8.8 6.8
5-year
126/181
70 9.2 7.7
1-year
126/229
55 11.0 9.3

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% 84 53
> 5% and ≤ 10% 56 35
> 0% and ≤ 5% 20 13
≤ 0% 0 0

The Fund averaged a 10.6% return over all 160 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
Low-Priced Stock28.6%
Russell 20006.6%

Peak-Peak - 04/29/11 - 06/23/15
Low-Priced Stock-3.6%
Russell 200058.5%

Peak-Current - 06/23/15 - 03/31/17
Low-Priced Stock-1.9%
Russell 20009.8%

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. 

Calendar Year Total Returns (%)

 

Growth of Investment

Value of $10,000 invested between 12/15/93 and 03/31/17

Low-Priced Stock$94,651.01
Russell 2000$76,020.44

Portfolio Impactas of 03/31/17

SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Information Technology
24.09
8.76
2.01
Health Care
6.65
12.42
0.77
Industrials
19.29
1.85
0.35
Real Estate
0.54
9.15
0.05
Financials
13.06
0.30
0.01
Utilities
0.36
-3.65
-0.01
Telecommunication Services
0.78
-1.65
-0.04
Energy
7.44
-2.29
-0.16
Consumer Staples
1.00
-30.98
-0.36
Materials
4.89
-8.38
-0.40
Consumer Discretionary
17.31
-10.88
-1.94
Cash
4.59
0.15
0.01
Unclassified
0.00
0.00
0.00

Top Contributors

INDUSTRYSECTORGAIN (%)
Semiconductors & Semiconductor EquipmentInformation Technology1.15
Electronic Equipment Instruments & ComponentsInformation Technology0.52
PharmaceuticalsHealth Care0.47
Communications EquipmentInformation Technology0.46
Electrical EquipmentIndustrials0.23

Top Detractors

INDUSTRYSECTORGAIN (%)
Specialty RetailConsumer Discretionary-1.44
ChemicalsMaterials-0.49
Food ProductsConsumer Staples-0.36
Aerospace & DefenseIndustrials-0.30
Commercial Services & SuppliesIndustrials-0.16

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
LightPath Technologies Cl. AElectronic Equipment Instruments & ComponentsInformation Technology0.24
Medicines Company (The)PharmaceuticalsHealth Care0.23
Wabash NationalMachineryIndustrials0.21
Brooks AutomationSemiconductors & Semiconductor EquipmentInformation Technology0.20
Power Solutions InternationalElectrical EquipmentIndustrials0.20

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
BioAmberChemicalsMaterials-0.35
Stein MartSpecialty RetailConsumer Discretionary-0.29
Inventure FoodsFood ProductsConsumer Staples-0.27
Build-A-Bear WorkshopSpecialty RetailConsumer Discretionary-0.24
CPI AerostructuresAerospace & DefenseIndustrials-0.21
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Information Technology
24.09
8.76
2.01
Health Care
6.65
12.42
0.77
Industrials
19.29
1.85
0.35
Real Estate
0.54
9.15
0.05
Financials
13.06
0.30
0.01
Utilities
0.36
-3.65
-0.01
Telecommunication Services
0.78
-1.65
-0.04
Energy
7.44
-2.29
-0.16
Consumer Staples
1.00
-30.98
-0.36
Materials
4.89
-8.38
-0.40
Consumer Discretionary
17.31
-10.88
-1.94
Cash
4.59
0.15
0.01
Unclassified
0.00
0.00
0.00

Top Contributors

INDUSTRYSECTORGAIN (%)
Semiconductors & Semiconductor EquipmentInformation Technology1.15
Electronic Equipment Instruments & ComponentsInformation Technology0.52
PharmaceuticalsHealth Care0.47
Communications EquipmentInformation Technology0.46
Electrical EquipmentIndustrials0.23

Top Detractors

INDUSTRYSECTORGAIN (%)
Specialty RetailConsumer Discretionary-1.44
ChemicalsMaterials-0.49
Food ProductsConsumer Staples-0.36
Aerospace & DefenseIndustrials-0.30
Commercial Services & SuppliesIndustrials-0.16

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
LightPath Technologies Cl. AElectronic Equipment Instruments & ComponentsInformation Technology0.24
Medicines Company (The)PharmaceuticalsHealth Care0.23
Wabash NationalMachineryIndustrials0.21
Brooks AutomationSemiconductors & Semiconductor EquipmentInformation Technology0.20
Power Solutions InternationalElectrical EquipmentIndustrials0.20

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
BioAmberChemicalsMaterials-0.35
Stein MartSpecialty RetailConsumer Discretionary-0.29
Inventure FoodsFood ProductsConsumer Staples-0.27
Build-A-Bear WorkshopSpecialty RetailConsumer Discretionary-0.24
CPI AerostructuresAerospace & DefenseIndustrials-0.21
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Information Technology
24.97
38.58
8.59
Industrials
18.36
27.77
5.09
Financials
13.96
17.15
2.34
Energy
6.86
33.81
2.13
Materials
4.53
25.81
1.14
Health Care
7.16
10.14
0.49
Utilities
0.31
43.37
0.13
Real Estate
0.56
4.34
0.03
Consumer Staples
1.13
-11.35
-0.06
Telecommunication Services
0.58
-19.71
-0.15
Consumer Discretionary
17.90
-10.34
-1.76
Cash
3.45
0.39
0.02
Unclassified
0.24
107.02
0.74

Top Contributors

INDUSTRYSECTORGAIN (%)
Semiconductors & Semiconductor EquipmentInformation Technology5.21
Electronic Equipment Instruments & ComponentsInformation Technology2.74
Energy Equipment & ServicesEnergy1.87
Internet Software & ServicesInformation Technology1.51
Professional ServicesIndustrials1.37

Top Detractors

INDUSTRYSECTORGAIN (%)
Specialty RetailConsumer Discretionary-2.67
SoftwareInformation Technology-1.27
Textiles Apparel & Luxury GoodsConsumer Discretionary-0.50
DistributorsConsumer Discretionary-0.36
Health Care Providers & ServicesHealth Care-0.30

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
TTM TechnologiesElectronic Equipment Instruments & ComponentsInformation Technology0.93
Progenics PharmaceuticalsBiotechnologyHealth Care0.77
CarboniteInternet Software & ServicesInformation Technology0.69
Unit CorporationEnergy Equipment & ServicesEnergy0.66
Brooks AutomationSemiconductors & Semiconductor EquipmentInformation Technology0.62

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Rubicon ProjectSoftwareInformation Technology-0.69
Ascena Retail GroupSpecialty RetailConsumer Discretionary-0.62
SeaChange InternationalSoftwareInformation Technology-0.57
Vera BradleyTextiles Apparel & Luxury GoodsConsumer Discretionary-0.50
Stein MartSpecialty RetailConsumer Discretionary-0.44
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Information Technology
25.54
49.41
11.05
Industrials
16.72
7.97
1.98
Financials
11.85
8.64
1.14
Telecommunication Services
0.61
22.73
0.18
Utilities
0.16
53.27
0.14
Health Care
5.80
14.20
-0.04
Real Estate
1.20
-11.84
-0.12
Consumer Staples
2.12
-39.73
-0.95
Consumer Discretionary
15.65
-8.79
-0.97
Materials
6.54
-43.77
-4.29
Energy
8.03
-51.80
-7.25
Cash
3.96
0.52
0.02
Unclassified
1.81
246.29
2.82

Top Contributors

INDUSTRYSECTORGAIN (%)
Semiconductors & Semiconductor EquipmentInformation Technology9.53
Electronic Equipment Instruments & ComponentsInformation Technology3.09
MachineryIndustrials1.29
BanksFinancials1.17
Leisure ProductsConsumer Discretionary1.14

Top Detractors

INDUSTRYSECTORGAIN (%)
Energy Equipment & ServicesEnergy-6.58
Metals & MiningMaterials-3.40
Specialty RetailConsumer Discretionary-1.89
Electrical EquipmentIndustrials-1.14
IT ServicesInformation Technology-1.03

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Cirrus LogicSemiconductors & Semiconductor EquipmentInformation Technology1.60
Value Partners GroupCapital MarketsFinancials1.08
MKS InstrumentsSemiconductors & Semiconductor EquipmentInformation Technology1.02
Inphi CorporationSemiconductors & Semiconductor EquipmentInformation Technology0.99
OrbotechElectronic Equipment Instruments & ComponentsInformation Technology0.86

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Unit CorporationEnergy Equipment & ServicesEnergy-1.25
Trican Well ServiceEnergy Equipment & ServicesEnergy-1.20
Hochschild MiningMetals & MiningMaterials-1.09
C&J Energy ServicesEnergy Equipment & ServicesEnergy-0.98
Dundee Corporation Cl. ACapital MarketsFinancials-0.83
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Information Technology
22.90
78.12
15.46
Industrials
15.00
46.79
6.36
Health Care
5.75
64.49
2.79
Consumer Discretionary
13.20
20.47
2.29
Financials
10.56
19.28
1.59
Consumer Staples
2.81
-17.59
1.18
Real Estate
1.46
27.06
0.75
Utilities
0.16
-31.75
0.01
Telecommunication Services
0.42
-57.03
-0.08
Energy
9.77
-42.80
-4.69
Materials
10.95
-62.78
-13.00
Cash
3.36
0.64
0.03
Unclassified
3.66
285.76
3.39

Top Contributors

INDUSTRYSECTORGAIN (%)
Semiconductors & Semiconductor EquipmentInformation Technology11.22
Electronic Equipment Instruments & ComponentsInformation Technology3.41
Professional ServicesIndustrials1.83
BiotechnologyHealth Care1.75
AutomobilesConsumer Discretionary1.72

Top Detractors

INDUSTRYSECTORGAIN (%)
Metals & MiningMaterials-12.45
Energy Equipment & ServicesEnergy-3.77
Diversified Consumer ServicesConsumer Discretionary-0.94
SoftwareInformation Technology-0.93
Electrical EquipmentIndustrials-0.89

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Cirrus LogicSemiconductors & Semiconductor EquipmentInformation Technology1.78
Thor IndustriesAutomobilesConsumer Discretionary1.69
Industrias Bachoco ADRFood ProductsConsumer Staples1.66
Value Partners GroupCapital MarketsFinancials1.38
MKS InstrumentsSemiconductors & Semiconductor EquipmentInformation Technology1.25

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Allied Nevada GoldMetals & MiningMaterials-2.34
Hochschild MiningMetals & MiningMaterials-2.20
Lamprell 1Energy Equipment & ServicesEnergy-1.66
Major Drilling Group InternationalMetals & MiningMaterials-1.43
SprottCapital MarketsFinancials-1.28

Risk

High Volatility vs. Peer Group as of 03/31/17

The Fund has a high volatility within its peer group of 525 Small-Cap Funds based on 5-year rolling standard deviation.

Down Market Performance Comparisonas of 03/31/17

The Fund outperformed the Russell 2000 during six out of 11 downturns of 10% or more from the index’s prior historical high over the last 20 years.

Market Downturns (%)

DownMarketImg

Russell 2000 Down Quarters

QUARTER ENDRUSSELL 2000 (%)LOW-PRICED STOCK (%)SPREAD (%)
03/31/16-1.5-0.8+0.7
09/30/15-11.9-15.6-3.7
09/30/14-7.4-9.8-2.4
06/30/12-3.5-11.2-7.7
09/30/11-21.9-23.3-1.4
06/30/11-1.6-3.4-1.8
06/30/10-9.9-8.5+1.4
03/31/09-15.0-7.7+7.3
12/31/08-26.1-25.8+0.3
09/30/08-1.1-11.8-10.7
03/31/08-9.9-5.2+4.7
12/31/07-4.6-3.7+0.9
09/30/07-3.1-3.3-0.2
06/30/06-5.0-5.4-0.4
03/31/05-5.3-4.6+0.7
09/30/04-2.9-0.3+2.6
03/31/03-4.5-8.2-3.7
09/30/02-21.4-21.3+0.1
06/30/02-8.4-9.6-1.2

Capture Ratios Fund's First Full Quarter (12/31/93) to 03/31/17

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 03/31/17

From the Fund's inception, the Fund outperformed the Russell 2000 Index.

Go to Relative Risk Spectrum Tool

Morningstar Statistical Measures as of 03/31/17

Sharpe RatioStandard Deviation
Low-Priced Stock0.1714.97
Russell 20000.8814.36
Category Median0.8614.02
Best Quartile Breakpoint0.9613.18

Category Median and Best Quartile Breakpoint based on 525 small-cap objective funds (oldest class only) with at least five years of history.
Sharpe Ratio Standard Deviation
Low-Priced Stock
Russell 2000
Category Median
Best Quartile Breakpoint

Composition

Morningstar Style Map™as of 12/31/16

mstar-RLPIX

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 03/31/17

  RLPIX Russell 2000
Average Market Cap
687.7M
1.74B
95%
-
2016 Portfolio Turnover
34%
-
Weighted Average P/B
1.8x
2.3x
U.S. Investments (% of Net Assets)
81.2%
-
Non-U.S. Investments (% of Net Assets)
15.4%
-

Portfolio Allocation

  • Total
    Holdings
    166


SECTORS
RLPIX (%) RUSSELL
2000 (%)
Information Technology
23.2
17.5
Industrials
19.4
14.3
Consumer Discretionary
18.1
12.2
Financials
13.7
19.4
Energy
7.5
3.4
Health Care
7.4
13.0
Materials
4.3
5.2
Telecommunication Services
1.1
0.7
Consumer Staples
1.0
2.9
Real Estate
0.6
7.8
Utilities
0.4
3.7
Cash and Cash Equivalents
3.4
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
LSI Industries
0.9
Nautilus
0.9
Zealand Pharma
0.9
Ardmore Shipping
0.9
CryoLife
0.9
AV Homes
0.9
Pason Systems
0.9
American Outdoor Brands
0.9
Orbotech
0.9
Allscripts Healthcare Solutions
0.8
Cirrus Logic
0.8
Super Micro Computer
0.8
FormFactor
0.8
PC Connection
0.8
KBR
0.8
Value Partners Group
0.8
Clarkson
0.8
Ameresco Cl. A
0.8
Steelcase Cl. A
0.8
Photronics
0.8
Top 20 as % of Net Assets
16.9

SECTORS
RLPIX (%) RUSSELL
2000 (%)
Information Technology
23.2
17.5
Industrials
19.4
14.3
Consumer Discretionary
18.1
12.2
Financials
13.7
19.4
Energy
7.5
3.4
Health Care
7.4
13.0
Materials
4.3
5.2
Telecommunication Services
1.1
0.7
Consumer Staples
1.0
2.9
Real Estate
0.6
7.8
Utilities
0.4
3.7
Cash and Cash Equivalents
3.4
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
LSI Industries
0.9
Nautilus
0.9
Zealand Pharma
0.9
Ardmore Shipping
0.9
CryoLife
0.9
AV Homes
0.9
Pason Systems
0.9
American Outdoor Brands
0.9
Orbotech
0.9
Allscripts Healthcare Solutions
0.8
Cirrus Logic
0.8
Super Micro Computer
0.8
FormFactor
0.8
PC Connection
0.8
KBR
0.8
Value Partners Group
0.8
Clarkson
0.8
Ameresco Cl. A
0.8
Steelcase Cl. A
0.8
Photronics
0.8
Top 20 as % of Net Assets
16.9

Portfolio Holdings

View the complete list of holdings for this fund as of 03/31/17. 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 ($) REINVEST
PRICE ($)
12/14/16 12/15/16 12/15/16 0.0564 - 0.7289 - 0.7853 8.30
12/16/15 12/17/15 12/17/15 0.0040 - 0.7205 - 0.7245 7.73
12/16/14 12/17/14 12/17/14 0.0386 - 3.6074 - 3.6460 9.22
12/04/13 12/05/13 12/05/13 0.0543 - 1.9362 - 1.9905 13.17
12/27/12 12/28/12 12/28/12 0.0597 - - - 0.0597 13.54
12/05/12 12/06/12 12/06/12 0.2031 - 0.9089 - 1.1120 13.44
12/07/11 12/08/11 12/08/11 0.1503 0.0087 1.1869 - 1.3459 14.42
12/08/10 12/09/10 12/09/10 0.0991 - 0.1379 - 0.2370 17.86
12/08/09 12/09/09 12/09/09 0.0426 - - - 0.0426 13.55

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 0.00
Other expenses 0.11
Acquired fund fees and expenses 0.01
Total annual Fund operating expenses 1.12
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 higher-priced or low-priced small-cap and micro-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 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. 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.

Managed by Jim Stoeffel since 2014 (assistant portfolio manager 2013-2014), assistant portfolio managers Bill Hench since 2014, and Brendan Hartman since 2016

1/3/2006 12:00:00 AM

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