Royce Micro-Cap Trust (RMT)
20

At a Glance

Why invest in Micro-Cap Trust?

  • One of the only closed-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
  • Outperformed its benchmark, the Russell 2000 Index, in 63% of all monthly rolling 10-year NAV return periods for the 20 years ended 9/30/18

As of 09/30/18

  • Micro-Cap
    Core Approach
    $552.5M
    Avg. Market Cap
  • Active Share
    95%
  • Lead Manager
    Tenure
    24+
    Years on Fund
  • Domestic
    15%
    2017 Annual
    Turnover Rate
  • Daily Price 9.24-$0.02 (-0.22%) MKT $8.22-$0.01 (0.00%)
    $438.2M
    Net Assets

Portfolio Management

Assistant Portfolio Managers: Chris Flynn, Jim Stoeffel, Brendan Hartman

"Our task is to scour the large and diverse universe of micro-cap companies for businesses that look mispriced and underappreciated, with the caveat being that they must also have a discernible margin of safety. We are looking for stocks trading at a discount to our estimate of their worth as businesses."
Chuck Royce

Performance

Average Annual Total Returns (%)

Outperformed Russell 2000 for the 3-Year, 20-Year and since inception (12/14/93) periods as of 09/30/18. Outpaced Russell Microcap for the Quarter, 3-Year, 10-Year and 15-Year periods as of 09/30/18.
QTR YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
RMT 3.99 14.1017.2921.1311.9011.8110.0011.6310.71 12/14/93
XOTCX 2.22 10.2313.4617.6510.1010.9510.0311.1211.17 12/14/93
Russell 2000 3.58 11.5115.2417.1211.0711.1110.129.459.50 N/A
Russell Microcap 0.83 11.6413.6516.4110.5110.828.53N/AN/A N/A
NOV YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
RMT 0.35 -2.77-1.0113.356.7315.647.5510.179.92 12/14/93
XOTCX -0.71 -1.95-1.7310.835.7414.728.3310.1210.57 12/14/93
Russell 2000 1.59 0.980.5710.087.5014.048.558.419.00 N/A
Russell Microcap -0.64 -1.17-1.648.486.2313.656.76N/AN/A N/A
DEC YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
RMT -5.52 -8.14-4.7613.335.7415.037.369.879.66 12/14/93
XOTCX -5.13 -6.99-4.5410.685.4414.608.019.9110.33 12/14/93
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

Important Performance and Expense Information

All performance information reflects past performance, is presented on a total return basis, net of the Fund's investment advisory fee, and reflects the reinvestment of distributions. Past performance is no guarantee of future results Current performance may be higher or lower than performance quoted. Returns as of the recent month-end may be obtained at www.roycefunds.com. The market price of the Fund's shares will fluctuate, so that shares may be worth more or less than their original cost when sold.

The Fund normally invests in micro-cap companies, which may involve considerably more risk than investing in larger-cap companies. The Fund's broadly diversified portfolio does not ensure a profit or guarantee against loss.

Rolling Returns

For 97% of the periods, 10-year average annual total returns were greater than 5%.

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% 68 38
> 5% and ≤ 10% 105 59
> 0% and ≤ 5% 5 3
≤ 0% 0 0

The Fund averaged a 9.9% return over all 178 10-year monthly rolling return periods.

Market Cycle Performance

The Fund outperformed the Russell 2000 from the 8/31/18 index peak through current (9/30/18).
Peak-Peak - 07/13/07 - 04/29/11
Micro-Cap Trust-0.5%
Russell 20006.6%

Peak-Peak - 04/29/11 - 06/23/15
Micro-Cap Trust53.6%
Russell 200058.5%

Peak-Current - 06/23/15 - 09/30/18
Micro-Cap Trust37.1%
Russell 200037.0%

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 12/14/93 and 09/30/18

Micro-Cap Trust$138,149.62
Russell 2000$94,851.01

Market Price Performance History

Risk

Down Market Performance Comparisonas of 09/30/18

The Fund outperformed the Russell 2000 during four out of six downturns of 15% or more from the index’s prior historical high since the Fund’s inception.

Market Downturns (%)

DownMarketImg

Russell 2000 Down Quarters

QUARTER ENDRUSSELL 2000 (%)MICRO-CAP TRUST (%)SPREAD (%)
03/31/18-0.1+0.6+0.7
03/31/16-1.5+0.1+1.6
09/30/15-11.9-13.8-1.9
09/30/14-7.4-7.1+0.3
06/30/12-3.5-4.4-0.9
09/30/11-21.9-20.8+1.1
06/30/11-1.6-3.2-1.6
06/30/10-9.9-8.9+1.0
03/31/09-15.0-11.8+3.2
12/31/08-26.1-33.7-7.6
09/30/08-1.1-6.9-5.8
03/31/08-9.9-10.6-0.7
12/31/07-4.6-4.5+0.1
09/30/07-3.1-3.5-0.4
06/30/06-5.0-3.2+1.8
03/31/05-5.3-1.8+3.5
09/30/04-2.9-3.0-0.1

Long Term Risk Measurementas of 09/30/18

Over the past 5 years, the Fund produced lower volatility than the Russell 2000 Index.
Over the past 3 years, the Fund outperformed the Russell 2000 Index with lower volatility.
From the Fund's inception, the Fund outperformed the Russell 2000 Index with lower volatility.

Go to Relative Risk Spectrum Tool

Morningstar Statistical Measures as of 09/30/18

Sharpe RatioStandard Deviation
Micro-Cap Trust0.5920.62
Russell 20000.6319.39
Category MedianN/AN/A

Sharpe Ratio Standard Deviation
Micro-Cap Trust
Russell 2000
Category Median
Best Quartile Breakpoint

Composition

Morningstar Style Map™as of 09/30/18

mstar-XOTCX

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

  XOTCX Russell 2000
Average Market Cap
552.5M
1.93B
Net Leverage
1.3%
-
Market Price
$10.21
-
Net Asset Value
$10.95
-
95%
-
2017 Portfolio Turnover
15%
-
Weighted Average P/B
2.1x
2.3x
U.S. Investments (% of Net Assets)
82.7%
-
Non-U.S. Investments (% of Net Assets)
18.7%
-

Portfolio Allocation

  • Total
    Holdings
    344


SECTORS
XOTCX (%) RUSSELL
2000 (%)
Industrials
21.9
15.1
Information Technology
16.7
13.9
Health Care
14.5
16.5
Financials
12.9
17.4
Consumer Discretionary
11.7
12.2
Energy
8.1
4.8
Materials
5.8
4.2
Real Estate
3.3
6.9
Communication Services
2.8
3.3
Consumer Staples
2.6
2.6
Utilities
0.5
3.1
Bonds & Preferreds
0.5
-
Outstanding Line of Credit, Net of Cash and Cash Equivalents
-1.3
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Mesa Laboratories
2.1
Surmodics
1.9
CIRCOR International
1.7
Kadant
1.2
Zafgen
1.2
Cavco Industries
1.1
Quaker Chemical
1.1
FARO Technologies
1.1
Heritage-Crystal Clean
1.1
SEACOR Marine Holdings
1.0
Social Capital Hedosophia Holdings
1.0
Atrion Corporation
1.0
FRP Holdings
1.0
Raven Industries
1.0
Era Group
0.9
Chicken Soup For The Soul Entertainment
0.9
Sun Hydraulics
0.9
IES Holdings
0.9
Seneca Foods
0.9
Clarkson
0.9
Top 20 as % of Net Assets
22.9

SECTORS
XOTCX (%) RUSSELL
2000 (%)
Industrials
20.4
-
Information Technology
17.8
-
Health Care
13.4
-
Financials
12.5
-
Consumer Discretionary
11.4
-
Energy
8.1
-
Materials
6.1
-
Communication Services
2.9
-
Consumer Staples
2.7
-
Real Estate
1.8
-
Utilities
0.6
-
Bonds & Preferreds
0.5
-
Cash and Cash Equivalents, Net of Outstanding Line of Credit
1.9
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Mesa Laboratories
3.0
Heritage-Crystal Clean
1.5
Surmodics
1.5
CIRCOR International
1.4
Quaker Chemical
1.3
Atrion Corporation
1.2
Kadant
1.1
Social Capital Hedosophia Holdings Cl. A
1.1
FARO Technologies
1.1
nLIGHT
1.0
Seneca Foods
1.0
Ameresco Cl. A
1.0
SEACOR Marine Holdings
1.0
Era Group
1.0
Chicken Soup For The Soul Entertainment
1.0
IES Holdings
0.9
National Research
0.9
Value Line
0.9
Raven Industries
0.9
Lindblad Expeditions Holdings
0.9
Top 20 as % of Net Assets
23.7

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.

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 ($) REINVEST
PRICE ($)
12/13/18 12/12/18 12/27/18 EST 0.0007 EST 0.0111 EST 0.1982 EST 0.0000 0.2100 -
09/14/18 09/13/18 09/26/18 EST 0.0006 EST 0.0095 EST 0.1699 EST 0.0000 0.1800 10.27
06/11/18 06/08/18 06/27/18 EST 0.0006 EST 0.0095 EST 0.1699 EST 0.0000 0.1800 10.26
03/12/18 03/09/18 03/23/18 EST 0.0006 EST 0.0095 EST 0.1699 EST 0.0000 0.1800 9.51
12/13/17 12/12/17 12/27/17 0.0169 0.0245 0.1586 0.0000 0.2000 9.34
09/13/17 09/12/17 09/26/17 0.0143 0.0209 0.1348 0.0000 0.1700 8.91
06/13/17 06/09/17 06/27/17 0.0135 0.0196 0.1269 0.0000 0.1600 8.55
03/14/17 03/10/17 03/24/17 0.0135 0.0196 0.1269 0.0000 0.1600 8.11
12/13/16 12/09/16 12/27/16 0.0201 0.0157 0.1242 0.0000 0.1600 8.22
09/13/16 09/09/16 09/26/16 0.0189 0.0147 0.1164 0.0000 0.1500 7.59
06/13/16 06/09/16 06/27/16 0.0201 0.0157 0.1242 0.0000 0.1600 7.36
03/14/16 03/10/16 03/24/16 0.0214 0.0167 0.1319 0.0000 0.1700 6.98
12/14/15 12/10/15 12/28/15 0.0055 0.0986 0.5058 0.0000 0.6100 7.13
09/14/15 09/10/15 09/25/15 0.0018 0.0323 0.1658 0.0000 0.2000 8.01
06/15/15 06/11/15 06/26/15 0.0020 0.0356 0.1824 0.0000 0.2200 9.46
03/13/15 03/11/15 03/25/15 0.0021 0.0372 0.1907 0.0000 0.2300 9.73
12/15/14 12/11/14 12/26/14 0.0324 0.3352 1.8225 0.0000 2.1900 10.08
09/15/14 09/11/14 09/26/14 0.0035 0.0367 0.1997 0.0000 0.2400 11.75
06/16/14 06/12/14 06/27/14 0.0035 0.0367 0.1997 0.0000 0.2400 12.45
03/13/14 03/11/14 03/25/14 0.0034 0.0352 0.1914 0.0000 0.2300 12.53
12/13/13 12/11/13 12/27/13 0.0222 0.1774 0.7704 0.0000 0.9700 12.29
09/16/13 09/12/13 09/27/13 0.0032 0.0256 0.1112 0.0000 0.1400 11.66
06/14/13 06/12/13 06/27/13 0.0032 0.0256 0.1112 0.0000 0.1400 10.68
03/06/13 03/04/13 03/25/13 0.0030 0.0238 0.1032 0.0000 0.1300 10.60
12/06/12 12/04/12 12/24/12 0.0212 0.0324 0.0764 0.0000 0.1300 9.09
09/06/12 09/04/12 09/24/12 0.0196 0.0299 0.0705 0.0000 0.1200 9.25
06/06/12 06/04/12 06/25/12 0.0212 0.0324 0.0764 0.0000 0.1300 8.61
03/06/12 03/02/12 03/23/12 0.0212 0.0324 0.0764 0.0000 0.1300 9.31
12/06/11 12/02/11 12/23/11 0.0143 0.0000 0.0637 0.0620 0.1400 8.38
09/06/11 09/01/11 09/23/11 0.0143 0.0000 0.0637 0.0620 0.1400 8.19
06/06/11 06/02/11 06/23/11 0.0133 0.0000 0.0592 0.0575 0.1300 9.24
03/07/11 03/03/11 03/23/11 0.0123 0.0000 0.0546 0.0531 0.1200 9.67
12/06/10 12/02/10 12/23/10 0.0630 - 0.0170 - 0.0800 9.40
03/06/09 03/04/09 03/23/09 0.0000 0.0000 0.0000 0.2200 0.2200 4.26

NAV History for

Fees & Expenses

Annual Fund Operating Expenses (%)

(expenses that you pay each year as a percentage of the value of your investment)

Management fees 0.49
Other expenses 0.40
Total annual Fund operating expenses 0.89

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 is a closed-end registered investment company whose shares of common stock may trade at a discount to their net asset value. Shares of the Fund's common stock are also subject to the market risks of investing in the underlying portfolio securities held by the Fund.

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 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 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 performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.

Managed by Chuck Royce since 1993, assistants Chris Flynn since 2009, Brendan Hartman since 2018 and Jim Stoeffel since 2018

12/14/1993 12:00:00 AM

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