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 75% of all monthly rolling 10-year NAV return periods for the 20 years ended 6/30/17

As of 06/30/17

  • Micro-Cap
    Core Approach
    $415.9M
    Avg. Market Cap
  • Active Share
    94%
  • Lead Manager
    Tenure
    23+
    Years on Fund
  • Domestic
    26%
    2016 Annual
    Turnover Rate
  • Daily Price 9.36-$0.05 (-0.53%) MKT $8.21-$0.02 (0.00%)
    $377.1M
    Net Assets

Portfolio Management

"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 Quarter, Year To Date, 15-Year, 20-Year and since inception (12/14/93) periods as of 06/30/17.
QTR YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
RMT 5.03 10.1227.273.9013.644.448.6310.1210.09 12/14/93
XOTCX 3.45 5.9322.604.6513.475.759.239.9610.84 12/14/93
Russell 2000 2.46 4.9924.607.3613.706.929.197.989.11 N/A
JUL YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
RMT 0.00 10.1219.765.3114.135.3310.0610.0710.05 12/14/93
XOTCX -0.51 5.3915.316.4313.946.1310.489.7010.78 12/14/93
Russell 2000 0.74 5.7718.459.8914.197.7610.447.789.11 N/A
AUG YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
RMT -5.09 4.5213.242.7012.305.149.479.569.78 12/14/93
XOTCX -4.20 0.9710.233.6812.156.119.989.3710.55 12/14/93
Russell 2000 -4.71 0.7911.246.8512.277.069.827.488.87 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

On a monthly basis, the Fund outperformed the Russell 2000 in 75% of all 10-Year periods; 59% of all 5-Year periods; and 60% of all 1-Year periods.

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

Relative Returns: Monthly Rolling Average Annual Return Periods 20 Years Through 06/30/17

periods beating
the index(%)
fund
avg(%)
index
avg(%)
10-year
91/121
75 8.4 6.7
5-year
106/181
59 10.1 7.7
1-year
138/229
60 11.7 9.2

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% 67 41
> 5% and ≤ 10% 91 56
> 0% and ≤ 5% 5 3
≤ 0% 0 0

The Fund averaged a 10.0% return over all 163 10-year monthly rolling return periods.

Market Cycle Performance

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 - 06/30/17
Micro-Cap Trust12.0%
Russell 200012.5%

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 12/14/93 and 06/30/17

Micro-Cap Trust$112,822.36
Russell 2000$77,893.25

Portfolio Impactas of 06/30/17

SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Industrials
18.68
6.89
1.28
Health Care
13.51
7.14
0.96
Information Technology
18.59
2.86
0.58
Consumer Discretionary
14.15
2.51
0.36
Materials
5.90
5.30
0.31
Financials
10.70
1.43
0.15
Real Estate
3.58
3.36
0.12
Utilities
0.34
12.71
0.04
Telecommunication Services
0.16
18.32
0.03
Consumer Staples
2.91
-3.16
-0.10
Energy
4.49
-14.40
-0.72
Cash
6.99
0.22
0.02

Top Contributors

INDUSTRYSECTORGAIN (%)
MachineryIndustrials1.01
Health Care Equipment & SuppliesHealth Care0.63
Internet Software & ServicesInformation Technology0.46
Household DurablesConsumer Discretionary0.36
Electronic Equipment, Instruments & ComponentsInformation Technology0.33

Top Detractors

INDUSTRYSECTORGAIN (%)
Energy Equipment & ServicesEnergy-0.63
Technology Hardware, Storage & PeripheralsInformation Technology-0.14
DistributorsConsumer Discretionary-0.13
Electrical EquipmentIndustrials-0.13
IT ServicesInformation Technology-0.10

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Atrion CorporationHealth Care Equipment & SuppliesHealth Care0.30
Major Drilling Group InternationalMetals & MiningMaterials0.25
Sangamo TherapeuticsBiotechnologyHealth Care0.24
KadantMachineryIndustrials0.22
Foster (L.B.) CompanyMachineryIndustrials0.22

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Era GroupEnergy Equipment & ServicesEnergy-0.27
Fenix PartsDistributorsConsumer Discretionary-0.11
BioCryst PharmaceuticalsBiotechnologyHealth Care-0.10
Aquinox PharmaceuticalsBiotechnologyHealth Care-0.10
Houston Wire & CableTrading Companies & DistributorsIndustrials-0.09
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Information Technology
18.22
11.97
2.17
Industrials
18.19
9.09
1.66
Health Care
12.99
12.11
1.57
Materials
5.97
11.92
0.69
Consumer Discretionary
14.03
0.99
0.15
Real Estate
3.37
3.52
0.13
Telecommunication Services
0.15
36.64
0.05
Utilities
0.33
7.72
0.03
Financials
10.74
-0.33
-0.05
Consumer Staples
2.87
-7.66
-0.23
Energy
4.76
-19.11
-1.02
Cash
8.37
0.37
0.03

Top Contributors

INDUSTRYSECTORGAIN (%)
MachineryIndustrials1.08
BiotechnologyHealth Care0.96
Semiconductors & Semiconductor EquipmentInformation Technology0.67
Health Care Equipment & SuppliesHealth Care0.60
Metals & MiningMaterials0.51

Top Detractors

INDUSTRYSECTORGAIN (%)
Energy Equipment & ServicesEnergy-1.07
DistributorsConsumer Discretionary-0.28
Food ProductsConsumer Staples-0.22
Specialty RetailConsumer Discretionary-0.18
Consumer FinanceFinancials-0.15

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Sangamo TherapeuticsBiotechnologyHealth Care0.39
Care.comInternet Software & ServicesInformation Technology0.34
Exeter ResourceMetals & MiningMaterials0.28
IntevacTechnology Hardware, Storage & PeripheralsInformation Technology0.27
Major Drilling Group InternationalMetals & MiningMaterials0.25

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Era GroupEnergy Equipment & ServicesEnergy-0.54
Fenix PartsDistributorsConsumer Discretionary-0.25
Dundee Corporation Cl. ACapital MarketsFinancials-0.24
Matrix ServiceEnergy Equipment & ServicesEnergy-0.18
AlcobraPharmaceuticalsHealth Care-0.17
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Industrials
17.12
35.08
5.64
Information Technology
18.45
27.89
4.88
Health Care
13.05
31.74
4.12
Consumer Discretionary
14.41
13.14
2.04
Financials
10.91
13.13
1.55
Materials
5.92
17.00
0.97
Real Estate
3.26
15.53
0.57
Consumer Staples
2.77
18.15
0.53
Energy
4.72
0.68
0.11
Utilities
0.34
12.86
0.03
Telecommunication Services
0.12
13.57
0.02
Cash
8.92
0.55
0.05

Top Contributors

INDUSTRYSECTORGAIN (%)
MachineryIndustrials2.42
BiotechnologyHealth Care2.25
Electronic Equipment, Instruments & ComponentsInformation Technology1.61
Semiconductors & Semiconductor EquipmentInformation Technology1.41
Health Care Equipment & SuppliesHealth Care1.21

Top Detractors

INDUSTRYSECTORGAIN (%)
DistributorsConsumer Discretionary-0.37
SoftwareInformation Technology-0.30
Energy Equipment & ServicesEnergy-0.15
MediaConsumer Discretionary-0.15
Electrical EquipmentIndustrials-0.05

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
IntevacTechnology Hardware, Storage & PeripheralsInformation Technology0.56
IES HoldingsConstruction & EngineeringIndustrials0.54
Raven IndustriesIndustrial ConglomeratesIndustrials0.48
Abeona TherapeuticsBiotechnologyHealth Care0.45
Quaker ChemicalChemicalsMaterials0.43

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Dundee Corporation Cl. ACapital MarketsFinancials-0.42
Fenix PartsDistributorsConsumer Discretionary-0.38
Rubicon ProjectSoftwareInformation Technology-0.23
AlcobraPharmaceuticalsHealth Care-0.22
Manning & Napier Cl. ACapital MarketsFinancials-0.19
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Information Technology
20.06
30.43
5.82
Health Care
11.62
51.45
5.44
Industrials
17.37
23.39
3.54
Materials
5.87
22.64
1.44
Real Estate
2.92
20.27
0.91
Consumer Staples
2.63
21.95
0.62
Utilities
0.27
85.32
0.22
Telecommunication Services
0.10
215.62
0.17
Consumer Discretionary
14.71
-1.66
-0.29
Financials
12.62
-4.80
-1.93
Energy
3.35
-71.43
-2.40
Cash
8.28
0.73
0.07
Unclassified
0.19
11.39
0.05

Top Contributors

INDUSTRYSECTORGAIN (%)
Electronic Equipment, Instruments & ComponentsInformation Technology2.70
BiotechnologyHealth Care2.17
Health Care Equipment & SuppliesHealth Care1.74
Semiconductors & Semiconductor EquipmentInformation Technology1.74
Construction & EngineeringIndustrials1.61

Top Detractors

INDUSTRYSECTORGAIN (%)
Capital MarketsFinancials-2.62
Energy Equipment & ServicesEnergy-2.07
Specialty RetailConsumer Discretionary-0.99
Diversified Consumer ServicesConsumer Discretionary-0.75
Consumer FinanceFinancials-0.64

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
IES HoldingsConstruction & EngineeringIndustrials1.74
Frontier Services GroupAir Freight & LogisticsIndustrials0.80
OrbotechElectronic Equipment, Instruments & ComponentsInformation Technology0.71
Atrion CorporationHealth Care Equipment & SuppliesHealth Care0.67
Quaker ChemicalChemicalsMaterials0.66

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Fenix PartsDistributorsConsumer Discretionary-0.82
ZAIS Group Holdings Cl. ACapital MarketsFinancials-0.80
Mothers WorkSpecialty RetailConsumer Discretionary-0.73
Fifth Street Asset Management Cl. ACapital MarketsFinancials-0.63
Computer Task GroupIT ServicesInformation Technology-0.62
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Industrials
20.05
103.32
21.20
Information Technology
20.20
92.54
17.89
Health Care
10.02
258.45
15.04
Financials
12.37
70.99
8.59
Consumer Discretionary
13.41
53.20
7.06
Real Estate
3.67
103.06
4.77
Materials
6.03
45.92
3.05
Consumer Staples
2.63
98.63
2.63
Utilities
0.20
219.79
0.30
Telecommunication Services
0.07
213.81
0.12
Energy
3.35
-57.58
-0.54
Cash
7.54
0.85
0.08
Unclassified
0.47
34.57
0.25

Top Contributors

INDUSTRYSECTORGAIN (%)
Electronic Equipment, Instruments & ComponentsInformation Technology6.76
MachineryIndustrials6.67
BiotechnologyHealth Care6.66
Building ProductsIndustrials5.10
Real Estate Management & DevelopmentReal Estate4.58

Top Detractors

INDUSTRYSECTORGAIN (%)
Diversified Consumer ServicesConsumer Discretionary-0.56
Consumer FinanceFinancials-0.54
Metals & MiningMaterials-0.52
Specialty RetailConsumer Discretionary-0.45
DistributorsConsumer Discretionary-0.34

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
IES HoldingsConstruction & EngineeringIndustrials3.27
Universal ElectronicsHousehold DurablesConsumer Discretionary1.84
Virtus Investment PartnersCapital MarketsFinancials1.68
Quaker ChemicalChemicalsMaterials1.60
LCI IndustriesAuto ComponentsConsumer Discretionary1.57

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Fenix PartsDistributorsConsumer Discretionary-0.82
ZAIS Group Holdings Cl. ACapital MarketsFinancials-0.79
Mothers WorkSpecialty RetailConsumer Discretionary-0.71
SeaChange InternationalSoftwareInformation Technology-0.66
Fifth Street Asset Management Cl. ACapital MarketsFinancials-0.63

Market Price Performance History

Risk

Down Market Performance Comparisonas of 06/30/17

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 (%)
03/31/16-1.5+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
03/31/03-4.5-6.4-1.9
09/30/02-21.4-24.6-3.2

Long Term Risk Measurementas of 03/31/15

Over the past 3 years, the Fund produced lower volatility than the Russell 2000 Index.
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 06/30/17

Sharpe RatioStandard Deviation
Micro-Cap Trust0.3521.38
Russell 20000.4120.13
Category MedianN/AN/A

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

Composition

Morningstar Style Map™as of 03/31/17

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 06/30/17

  XOTCX Russell 2000
Average Market Cap
415.9M
1.63B
Net Leverage
5.5%
-
Market Price
$8.65
-
Net Asset Value
$9.82
-
94%
-
2016 Portfolio Turnover
26%
-
Weighted Average P/B
1.9x
2.2x
U.S. Investments (% of Net Assets)
84.0%
-
Non-U.S. Investments (% of Net Assets)
21.5%
-

Portfolio Allocation

  • Total
    Holdings
    365


SECTORS
XOTCX (%) RUSSELL
2000 (%)
Industrials
21.4
14.6
Information Technology
20.1
17.0
Health Care
16.2
15.0
Consumer Discretionary
15.5
12.5
Financials
12.8
18.2
Materials
6.8
4.4
Energy
4.9
3.6
Real Estate
4.1
7.5
Consumer Staples
3.1
2.7
Utilities
0.4
3.7
Telecommunication Services
0.2
0.9
Outstanding Line of Credit, Net of Cash and Cash Equivalents
-5.5
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Major Drilling Group International
1.5
Mesa Laboratories
1.3
Surmodics
1.1
IES Holdings
1.1
Atrion Corporation
1.1
Kadant
1.1
Zealand Pharma
1.1
Heritage-Crystal Clean
1.0
Quaker Chemical
1.0
Seneca Foods
1.0
Raven Industries
1.0
Clarkson
1.0
MVC Capital
0.9
FRP Holdings
0.9
CIRCOR International
0.9
Sun Hydraulics
0.9
Exactech
0.9
Intevac
0.9
FARO Technologies
0.8
Orbotech
0.8
Top 20 as % of Net Assets
20.3

SECTORS
XOTCX (%) RUSSELL
2000 (%)
Information Technology
21.0
-
Industrials
20.7
-
Health Care
15.7
-
Consumer Discretionary
15.0
-
Financials
12.9
-
Materials
6.8
-
Energy
5.0
-
Real Estate
3.9
-
Consumer Staples
3.0
-
Utilities
0.4
-
Telecommunication Services
0.2
-
Outstanding Line of Credit, Net of Cash and Cash Equivalents
-4.4
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Major Drilling Group International
1.5
Mesa Laboratories
1.3
Heritage-Crystal Clean
1.2
Kadant
1.1
Atrion Corporation
1.0
Clarkson
1.0
Surmodics
1.0
IES Holdings
1.0
Zealand Pharma
1.0
MVC Capital
1.0
FRP Holdings
0.9
Raven Industries
0.9
Quaker Chemical
0.9
Seneca Foods
0.9
Intevac
0.9
Orbotech
0.8
Exactech
0.8
Sun Hydraulics
0.8
FARO Technologies
0.8
CIRCOR International
0.8
Top 20 as % of Net Assets
19.6

Portfolio Holdings

View the complete list of holdings for this fund as of 06/30/17. Unaudited schedule of portfolio holdings is presented for informational purposes only.

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 ($) REINVEST
PRICE ($)
06/13/17 06/09/17 06/27/17 EST 0.0067 EST 0.0335 EST 0.1106 EST 0.0091 0.1600 8.55
03/14/17 03/10/17 03/24/17 EST 0.0067 EST 0.0335 EST 0.1106 EST 0.0091 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 0.93
Other expenses 0.24
Total annual Fund operating expenses 1.17

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 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. 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 Chuck Royce since 1993, assistant portfolio managers Chris Flynn and Jim Harvey since 2009

12/14/1993 12:00:00 AM

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