Royce Micro-Cap Opportunity Fund (ROSFX, ROSSX)
639

At a Glance

Why invest in Micro-Cap Opportunity?

  • Invests in a limited number of micro-cap companies (generally market caps up to $1 billion) with low P/B and P/S ratios categorized into one of four themes: Turnarounds, Unrecognized Asset Values, Undervalued Growth, and Interrupted Earnings
  • Identifies a catalyst for future earnings growth in the form of new management, more favorable business cycle, product innovation, and/or margin improvement
  • Average annual total return of 14.1% since inception (8/31/10) through 6/30/18

As of 06/30/18

  • Micro-Cap
    Value Approach
    $430.6M
    Avg. Market Cap
  • High
    Volatility
    93%
    Active Share
  • Fund
    Longevity
    7+
    Years of History

Portfolio Management

"I look for turnarounds where the process already appears to be under way or the firm's sector or industry looks close to rebounding. It's important for me to see evidence of positive change beginning to happen, so I like businesses that look like they're on the road to earnings recovery."
Bill Hench

Performance

Average Annual Total Returns (%)

Outperformed Russell Microcap for the 1-Year period as of 06/30/18. Outpaced Russell 2000 for the Quarter, Year To Date and 1-Year periods as of 06/30/18.
QTR YTD 1YR 3YR 5YR SINCE INCEPT. DATE
Micro-Cap Opportunity 8.78 7.7922.7310.3610.3214.07 08/31/10
Russell Microcap 9.97 10.7120.2110.4912.7815.71 N/A
Russell 2000 7.75 7.6617.5710.9612.4615.25 N/A

Annual Operating Expenses: Gross 1.28 Net 1.24

JUN YTD 1YR 3YR 5YR SINCE INCEPT. DATE
Micro-Cap Opportunity 0.33 7.7922.7310.3610.3214.07 08/31/10
Russell Microcap 1.30 10.7120.2110.4912.7815.71 N/A
Russell 2000 0.72 7.6617.5710.9612.4615.25 N/A

Annual Operating Expenses: Gross 1.28 Net 1.24

JUL YTD 1YR 3YR 5YR SINCE INCEPT. DATE
Micro-Cap Opportunity 2.77 10.7723.7711.989.3514.37 08/31/10
Russell Microcap 1.63 12.5221.0610.9111.4915.84 N/A
Russell 2000 2.72 10.6019.3611.5611.6115.54 N/A

Annual Operating Expenses: Gross 1.28 Net 1.24

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 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 Funds 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 Investment 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 1.24% through April 30, 2019.

Market Cycle Performance

Peak-Peak - 03/05/14 - 06/23/15
Micro-Cap Opportunity-3.9%
Russell Microcap6.4%

Peak-Current - 06/23/15 - 06/30/18
Micro-Cap Opportunity29.2%
Russell Microcap30.5%

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 08/31/10 and 06/30/18

Micro-Cap Opportunity$28,023.89
Russell Microcap$31,337.03

Risk

High Volatility vs. Peer Group as of 06/30/18

The Fund has a high volatility within its peer group of 524 Small-Cap Funds based on 5-year rolling standard deviation.

Down Market Performance Comparisonas of 06/30/18

Market Downturns (%)

DownMarketImg

Russell Microcap Down Quarters

QUARTER ENDRUSSELL MICROCAP (%)MICRO-CAP OPPORTUNITY (%)SPREAD (%)
03/31/16-5.4-0.9+4.5
09/30/15-13.8-19.8-6.0
09/30/14-8.2-10.7-2.5
06/30/14-1.4-2.5-1.1
06/30/12-2.0-1.1+0.9
09/30/11-22.7-26.2-3.5
06/30/11-3.5-6.9-3.4

Capture Ratios Fund's First Full Quarter (09/30/10) to 06/30/18

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 06/30/18

Morningstar Statistical Measures as of 06/30/18

Sharpe RatioStandard Deviation
Micro-Cap Opportunity0.6516.56
Russell Microcap0.8415.17
Category Median0.8613.60
Best Quartile Breakpoint0.9612.75

Category Median and Best Quartile Breakpoint based on 524 small-cap objective funds (oldest class only) with at least five years of history.
Sharpe Ratio Standard Deviation
Micro-Cap Opportunity
Russell Microcap
Category Median
Best Quartile Breakpoint

Composition

Morningstar Style Map™as of 03/31/18

mstar-ROSFX

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 06/30/18

  ROSFX Russell Microcap
Average Market Cap
430.6M
482.1M
93%
-
2017 Portfolio Turnover
70%
-
Weighted Average P/B
1.7x
2.0x
Weighted Average P/S
1.0x
1.5x
U.S. Investments (% of Net Assets)
94.1%
-
Non-U.S. Investments (% of Net Assets)
1.5%
-

Portfolio Allocation

  • Total
    Holdings
    100


SECTORS
ROSFX (%) RUSSELL
MICROCAP (%)
Information Technology
25.0
11.6
Industrials
18.1
11.3
Health Care
14.9
23.0
Financials
9.6
24.5
Energy
8.6
5.4
Materials
8.2
3.4
Consumer Discretionary
7.0
12.6
Consumer Staples
2.7
2.1
Telecommunication Services
0.9
0.9
Real Estate
0.7
4.0
Utilities
-
1.1
Cash and Cash Equivalents
4.4
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
CareDx
2.9
eGain Corporation
2.1
Ducommun
2.0
KEMET Corporation
1.9
Forterra
1.9
Castlight Health Cl. B
1.9
Ameresco Cl. A
1.9
Ribbon Communications
1.9
Hamilton Lane Cl. A
1.7
Alpha & Omega Semiconductor
1.7
Heritage Insurance Holdings
1.7
SeaSpine Holdings
1.6
Intrepid Potash
1.6
Surgery Partners
1.6
Gencor Industries
1.5
Ranger Energy Services Cl. A
1.5
New Home
1.5
Newpark Resources
1.5
Quantenna Communications
1.5
Electro Scientific Industries
1.5
Top 20 as % of Net Assets
35.4

SECTORS
ROSFX (%) RUSSELL
MICROCAP (%)
Information Technology
25.0
11.6
Industrials
18.1
11.3
Health Care
14.9
23.0
Financials
9.6
24.5
Energy
8.6
5.4
Materials
8.2
3.4
Consumer Discretionary
7.0
12.6
Consumer Staples
2.7
2.1
Telecommunication Services
0.9
0.9
Real Estate
0.7
4.0
Utilities
-
1.1
Cash and Cash Equivalents
4.4
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
CareDx
2.9
eGain Corporation
2.1
Ducommun
2.0
KEMET Corporation
1.9
Forterra
1.9
Castlight Health Cl. B
1.9
Ameresco Cl. A
1.9
Ribbon Communications
1.9
Hamilton Lane Cl. A
1.7
Alpha & Omega Semiconductor
1.7
Heritage Insurance Holdings
1.7
SeaSpine Holdings
1.6
Intrepid Potash
1.6
Surgery Partners
1.6
Gencor Industries
1.5
Ranger Energy Services Cl. A
1.5
New Home
1.5
Newpark Resources
1.5
Quantenna Communications
1.5
Electro Scientific Industries
1.5
Top 20 as % of Net Assets
35.4

Portfolio Holdings

View the complete list of holdings for this fund as of 06/30/18. 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

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 - 1.6650 - 1.6650 19.19
12/16/15 12/17/15 12/17/15 0.0000 - 0.0003 - 0.0003 14.08
12/16/14 12/17/14 12/17/14 0.0000 0.1374 0.3696 - 0.5070 16.13
12/11/13 12/12/13 12/12/13 0.0000 0.2028 0.3520 - 0.5548 16.72
12/12/12 12/13/12 12/13/12 0.1271 0.8221 0.1382 - 1.0874 12.11
12/14/11 12/15/11 12/15/11 0.0171 0.3955 - - 0.4126 9.84

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 0.00
Other expenses 0.28
Total annual Fund operating expenses 1.28
Fee waivers and/or expense reimbursements (0.04)
Total annual Fund operating expenses after fee waivers and/or expense reimbursements1.24
Royce & Associates has contractually agreed, without right of termination, to waive fees and/or reimburse expenses to the extent necessary to maintain the Investment 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 1.24% through April 30, 2019.

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. The Fund invests primarily 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 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 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. 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.

Managed by Bill Hench since 2010, assistant Buzz Zaino since 2010

8/31/2010 12:00:00 AM

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