Royce Micro-Cap Fund (RYOTX, RMCFX, RYMCX, RMCIX)
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At a Glance

Why invest in Micro-Cap?

  • One of the oldest open-end funds dedicated to investing in micro-cap stocks (generally market caps up to $1 billion)
  • Core approach that combines multiple investment themes and offers wide exposure to micro-cap stocks by investing in companies with strong fundamentals and/or prospects selling at prices that Royce believes do not fully reflect these attributes
  • Approach emphasizes the intersection of valuation with fundamental strength and/or excellent growth or turnaround potential

As of 09/30/18

  • Micro-Cap
    Core Approach
    $494.0M
    Avg. Market Cap
  • Average
    Volatility
    90%
    Active Share
  • Fund
    Longevity
    26+
    Years of History

Portfolio Management

"The micro-cap universe offers plenty of opportunities for us to find companies that are lightly researched or mispriced. Using multiple approaches gives us exposure to the entire asset class while our discipline keeps us focused on the fundamental business strengths that we think can create strong long-term performance."
Jim Stoeffel

Manager Tenure

Manager Tenure

Performance

Average Annual Total Returns (%)

Outperformed Russell Microcap for the Quarter and Year To Date periods as of 09/30/18. Outpaced Russell 2000 for the Year To Date and since inception (12/31/91) periods as of 09/30/18.
QTR YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Micro-Cap 2.51 12.4310.7213.033.846.156.899.0210.20 12/31/91
Russell Microcap 0.83 11.6413.6516.4110.5110.828.53N/AN/A N/A
Russell 2000 3.58 11.5115.2417.1211.0711.1110.129.4510.03 N/A

Annual Operating Expenses: 2.63

NOV YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Micro-Cap -0.55 0.33-0.606.340.209.015.297.859.67 12/31/91
Russell Microcap -0.64 -1.17-1.648.486.2313.656.76N/AN/A N/A
Russell 2000 1.59 0.980.5710.087.5014.048.558.419.56 N/A

Annual Operating Expenses: 2.63

DEC YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Micro-Cap -5.70 -5.39-4.335.10-0.328.385.107.629.42 12/31/91
Russell 2000 N/A N/AN/AN/AN/AN/AN/AN/AN/A N/A
Russell Microcap N/A N/AN/AN/AN/AN/AN/AN/AN/A N/A

Annual Operating Expenses: 2.63

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. Consultant Class shares redeemed within 365 days of purchase may be subject to a 1% contingent deferred sales charge, payable to the Fund's distributor, Royce Fund Services, LLC, 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. Operating expenses reflect the Fund's total annual operating expenses for the Consultant Class as of the Fund's most current prospectus and include management fees, 12b-1 distribution and service 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 Consultant Class shares on 5/1/98 reflects Investment Class results. Consultant Class shares bear an annual distribution expense that is not borne by Investment Class shares. If Consultant Class's annual distribution expense had been reflected, total returns prior to 5/1/98 would have been lower.

Rolling Returns

On a monthly basis, the Fund outperformed the Russell Microcap in 51% of all 10-Year periods; and 56% of all 5-Year periods.

For 82% of the periods, 10-year average annual total returns were greater than 5%.

Relative Returns: Monthly Rolling Average Annual Return Periods Since Russell Microcap's Inception Through 09/30/18

periods beating
the index(%)
fund
avg(%)
index
avg(%)
10-year
51/100
51 6.4 6.5
5-year
89/160
56 7.1 8.4
1-year
96/208
46 9.6 11.0

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% 102 50
> 5% and ≤ 10% 63 31
> 0% and ≤ 5% 37 18
≤ 0% 0 0

The Fund averaged a 9.4% return over all 202 10-year monthly rolling return periods.

Market Cycle Performance

The Fund outperformed the Russell Microcap from the 8/31/18 index peak through current (9/30/18).
Peak-Peak - 07/12/07 - 03/05/14
Micro-Cap24.3%
Russell Microcap44.7%

Peak-Peak - 03/05/14 - 06/23/15
Micro-Cap-5.4%
Russell Microcap6.4%

Peak-Current - 06/23/15 - 09/30/18
Micro-Cap18.3%
Russell Microcap31.6%

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 06/30/00 and 09/30/18

Micro-Cap$39,119.45
Russell Microcap$41,906.79

The since inception performance above dates to the inception of the Russell Microcap on 6/30/2000. The Fund's inception date (12/31/1991) preceded the inception of the index.

Risk

Average Volatility vs. Peer Group as of 09/30/18

The Fund has a average volatility within its peer group of 522 Small-Cap Funds based on 5-year rolling standard deviation.

Down Market Performance Comparisonas of 09/30/18

The Fund outperformed the Russell Microcap during six out of seven downturns of 15% or more from the index’s prior historical high since the index’s inception.

Market Downturns (%)

DownMarketImg
Outperformed in 14 out of 21 down quarters.

Russell Microcap Down Quarters

QUARTER ENDRUSSELL MICROCAP (%)MICRO-CAP (%)SPREAD (%)
03/31/16-5.4-1.4+4.0
09/30/15-13.8-15.9-2.1
09/30/14-8.2-10.2-2.0
06/30/14-1.4+1.5+2.9
06/30/12-2.0-8.8-6.8
09/30/11-22.7-22.3+0.4
06/30/11-3.5-4.5-1.0
06/30/10-8.9-6.0+2.9
12/31/09-0.5+6.2+6.7
03/31/09-15.2-7.2+8.0
12/31/08-28.1-27.6+0.5
09/30/08-0.8-12.6-11.8
06/30/08-3.5+0.7+4.2
03/31/08-12.4-8.1+4.3
12/31/07-7.5-2.1+5.4
09/30/07-4.6-1.2+3.4
09/30/06-0.7-2.5-1.8
06/30/06-6.8-3.4+3.4
03/31/05-7.4-4.1+3.3
09/30/04-5.6-2.0+3.6
06/30/04-1.8-2.1-0.3

Capture Ratios From 06/30/00 ( Inception) to 09/30/18

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 09/30/18

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

Go to Relative Risk Spectrum Tool

Morningstar Statistical Measures as of 09/30/18

The Fund produced lower volatility than the Russell Microcap, as shown by its standard deviation.
The Fund produced lower volatility than the Russell Microcap, as shown by its standard deviation.
The Fund produced lower volatility than the Russell Microcap, as shown by its standard deviation.
Sharpe RatioStandard Deviation
Micro-Cap0.3919.10
Russell Microcap0.5920.48
Category Median0.6518.98
Best Quartile Breakpoint0.7118.06

Category Median and Best Quartile Breakpoint based on 424 small-cap objective funds (oldest class only) with at least ten years of history.
Sharpe Ratio Standard Deviation
Micro-Cap
Russell Microcap
Category Median
Best Quartile Breakpoint

Composition

Morningstar Style Map™as of 09/30/18

mstar-RYMCX

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 09/30/18

  RYMCX Russell Microcap
Average Market Cap
494.0M
513.4M
90%
-
2017 Portfolio Turnover
26%
-
Weighted Average P/E,
19.6x
-
Weighted Average P/B
2.1x
2.1x
U.S. Investments (% of Net Assets)
84.9%
-
Non-U.S. Investments (% of Net Assets)
12.1%
-

Portfolio Allocation

  • Total
    Holdings
    151


SECTORS
RYMCX (%) RUSSELL
MICROCAP (%)
Industrials
20.6
11.1
Information Technology
19.7
10.2
Financials
15.2
23.2
Consumer Discretionary
14.4
10.8
Health Care
11.8
25.2
Energy
5.7
5.0
Materials
3.6
3.2
Real Estate
2.2
4.1
Consumer Staples
2.2
2.3
Communication Services
1.5
3.7
Utilities
-
1.1
Cash and Cash Equivalents
3.0
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Attunity
1.1
Health Insurance Innovations Cl. A
1.1
Red Lion Hotels
1.0
MCBC Holdings
1.0
Graham Corporation
1.0
Stoneridge
1.0
Photronics
1.0
Surmodics
1.0
Kornit Digital
1.0
CryoLife
0.9
AtriCure
0.9
Blue Hills Bancorp
0.9
QAD Cl. A
0.9
PC Connection
0.9
NeoPhotonics Corporation
0.9
BioSpecifics Technologies
0.9
Shoe Carnival
0.9
Harvard Bioscience
0.9
Northwest Pipe
0.9
Lydall
0.8
Top 20 as % of Net Assets
19.0

SECTORS
RYMCX (%) RUSSELL
MICROCAP (%)
Industrials
20.2
-
Information Technology
20.1
-
Financials
14.7
-
Consumer Discretionary
14.5
-
Health Care
11.9
-
Energy
5.5
-
Materials
3.5
-
Consumer Staples
2.3
-
Real Estate
2.2
-
Communication Services
1.7
-
Cash and Cash Equivalents
3.4
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Electro Scientific Industries
1.4
QuinStreet
1.1
Attunity
1.1
Photronics
1.1
Shoe Carnival
1.0
Stoneridge
1.0
Graham Corporation
1.0
AtriCure
1.0
NeoPhotonics Corporation
1.0
NeoGenomics
1.0
Red Lion Hotels
0.9
CryoLife
0.9
BioSpecifics Technologies
0.9
Surmodics
0.9
Blue Hills Bancorp
0.9
Kornit Digital
0.9
Resources Connection
0.9
Corium International
0.9
Mesa Laboratories
0.9
Northwest Pipe
0.9
Top 20 as % of Net Assets
19.7

Portfolio Holdings

View the complete list of holdings for this fund as of 09/30/18. Unaudited schedule of portfolio holdings is presented for informational purposes only.
View the 09/30/18 holdings on SEC Form N-Q (unaudited) for the quarter ending 09/30/18.

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 ($) REINVEST
PRICE ($)
12/13/17 12/14/17 12/14/17 0.0000 0.0708 0.6349 - 0.7057 8.93
12/14/16 12/15/16 12/15/16 0.0000 - 1.3023 - 1.3023 9.42
12/16/15 12/17/15 12/17/15 0.0000 - 1.4411 - 1.4411 8.97
12/16/14 12/17/14 12/17/14 - - 1.4000 - 1.4000 -
12/16/14 12/17/14 12/17/14 0.0000 - 1.4830 - 1.4830 11.92
12/04/13 12/05/13 12/05/13 0.0000 - 1.1929 - 1.1929 14.08
12/27/12 12/28/12 12/28/12 0.0000 0.0259 - - 0.0259 12.82
12/05/12 12/06/12 12/06/12 0.0000 0.0273 0.8269 - 0.8542 12.56
12/07/11 12/08/11 12/08/11 0.0531 - 0.6977 - 0.7508 13.05
12/08/10 12/09/10 12/09/10 0.1274 - - - 0.1274 15.43
12/08/09 12/09/09 12/09/09 0.0938 - - - 0.0938 12.01

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 1.25
Distribution (12b-1) fees 1.00
Other expenses 0.29
Acquired fund fees and expenses 0.09
Total annual Fund operating expenses 2.63
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 carefully before investing or sending money. The Fund invests primarily in 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 (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. 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 Microcap Index includes 1,000 of the smallest securities in the small-cap Russell 2000 Index, along with the next smallest eligible securities as determined by Russell. 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.

Jim Stoeffel lead manager since 2015 (co-manager 2015), Brendan Hartman since 2016 (manager 2015-2016 and assistant portfolio manager 2013-2015)

5/1/1998 12:00:00 AM

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