Royce Pennsylvania Mutual Fund (PENNX, RYPFX, RYPCX, RPMIX, RPMKX, RPMRX)
77

At a Glance

Why invest in Pennsylvania Mutual?

  • One of the first open-end small-cap funds, managed for more than 40 years by the same portfolio manager—a recognized pioneer of small-cap investing
  • Multi-discipline approach that offers exposure to strategies that have tended to perform well in different market environments, including High Quality, Traditional Value, and Special Situation, as well as Growth at a Reasonable Price and Deep Value
  • Provided average annual total returns of 10% or higher in 75% of all monthly rolling 10-year periods ended 9/30/18 since Chuck Royce began to manage the Fund in November 1972

As of 09/30/18

  • Small-Cap
    Core Approach
    $2.13B
    Avg. Market Cap
  • Below Average
    Volatility
    89%
    Active Share
  • Lead Manager
    Tenure
    46+
    Years on Fund

Portfolio Management

Assistant Portfolio Managers: Jim Stoeffel, Chris Flynn, Andrew Palen

"Our task is to scour the large and diverse universe of small-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, 3-Year, 20-Year and 30-Year periods as of 09/30/18.
QTR YTD 1YR 3YR 5YR 10YR 15YR 20YR 30YR 45YR
Pennsylvania Mutual 4.58 10.32 14.74 17.91 9.06 9.95 9.88 10.73 10.67 12.24
Russell 2000 3.58 11.51 15.24 17.12 11.07 11.11 10.12 9.45 10.01 N/A

Annual Operating Expenses: 1.27

OCT YTD 1YR 3YR 5YR 10YR 15YR 20YR 30YR 45YR
Pennsylvania Mutual -9.87 -0.57 1.35 11.57 6.12 11.59 8.66 9.98 10.29 12.84
Russell 2000 -10.86 -0.60 1.85 10.68 8.01 12.44 8.69 8.60 9.63 N/A

Annual Operating Expenses: 1.27

NOV YTD 1YR 3YR 5YR 10YR 15YR 20YR 30YR 45YR
Pennsylvania Mutual 0.67 0.09 3.34 12.83 6.04 12.68 8.53 9.86 10.37 12.70
Russell 2000 0.27 -0.33 4.01 11.24 7.82 13.47 8.53 8.46 9.73 N/A

Annual Operating Expenses: 1.27

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. Operating expenses reflect the Fund's total annual operating expenses for the Service Class as of the Fund's most current prospectus and include management fees, 12b-1 distribution and service fees, and other expenses.

All performance and risk information presented in this material prior to the commencement date of Service Class shares on 11/8/05 reflects Investment Class results. Service Class shares bear an annual distribution expense that is not borne by Investment Class shares. If Service Class's annual distribution expense had been reflected, total returns prior to 11/8/05 would have been lower.

Rolling Returns

On a monthly basis, the Fund outperformed the Russell 2000 in 62% of all 10-Year periods; 60% of all 5-Year periods; and 53% of all 1-Year periods.

For 99% of the periods, 10-year average annual total returns were greater than 5%; For 75% of the periods, 10-year average annual total returns were greater than 10%.

Relative Returns: Monthly Rolling Average Annual Return Periods 20 Years Through 09/30/18

periods beating
the index(%)
fund
avg(%)
index
avg(%)
10-year
75/121
62 8.2 7.0
5-year
109/181
60 10.1 8.8
1-year
121/229
53 12.0 10.5

Absolute Returns: 10-Year Monthly Rolling Return PeriodsNumber of 10-Year Average Annual Return Periods Since 11/30/72

Return Range Periods % in Range
> 10% 322 75
> 5% and ≤ 10% 105 24
> 0% and ≤ 5% 4 1
≤ 0% 0 0

The Fund averaged a 13.3% return over all 431 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
Pennsylvania Mutual11.0%
Russell 20006.6%

Peak-Peak - 04/29/11 - 06/23/15
Pennsylvania Mutual34.3%
Russell 200058.5%

Peak-Current - 06/23/15 - 09/30/18
Pennsylvania Mutual38.5%
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 12/31/78 and 09/30/18

Pennsylvania Mutual$1,226,143.25
Russell 2000$842,390.78

The since inception performance above dates to the inception of the Russell 2000 on 12/31/1978.

Risk

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

The Fund has a below 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 2000 during 10 out of 12 downturns of 15% or more from the index’s prior historical high since the index’s inception.

Market Downturns (%)

DownMarketImg

Russell 2000 Down Quarters

QUARTER ENDRUSSELL 2000 (%)PENNSYLVANIA MUTUAL (%)SPREAD (%)
03/31/18-0.1+0.6+0.7
03/31/16-1.5+6.2+7.7
09/30/15-11.9-13.0-1.1
09/30/14-7.4-7.6-0.2
06/30/12-3.5-7.2-3.7
09/30/11-21.9-21.1+0.8
06/30/11-1.6-1.8-0.2
06/30/10-9.9-8.6+1.3
03/31/09-15.0-11.7+3.3
12/31/08-26.1-26.2-0.1
09/30/08-1.1-7.2-6.1
03/31/08-9.9-6.3+3.6
12/31/07-4.6-3.8+0.8
09/30/07-3.1-3.0+0.1
06/30/06-5.0-5.4-0.4
03/31/05-5.3-0.7+4.6
09/30/04-2.9+0.9+3.8

Capture Ratios From 12/31/78 (Russell 2000 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 2000 Index.
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 Index'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

The Fund beat the Russell 2000 and performed within the top 25% of small-cap objective funds on a risk-adjusted basis, as shown by its Sharpe ratio. In addition, the Fund produced lower volatility than the Russell 2000 and 50% of small-cap objective funds, as shown by its standard deviation.
The Fund produced lower volatility than the Russell 2000 and 50% of small-cap objective funds, as shown by its standard deviation.
The Fund produced lower volatility than the Russell 2000 and 50% of small-cap objective funds, as shown by its standard deviation.
Sharpe RatioStandard Deviation
Pennsylvania Mutual0.5818.76
Russell 20000.6319.39
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
Pennsylvania Mutual
Russell 2000
Category Median
Best Quartile Breakpoint

Composition

Morningstar Style Map™as of 09/30/18

mstar-RYPFX

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

  RYPFX Russell 2000
Average Market Cap
2.13B
1.93B
89%
-
2017 Portfolio Turnover
27%
-
Weighted Average P/E,
19.0x
19.2x
Weighted Average P/B
2.5x
2.3x
U.S. Investments (% of Net Assets)
87.6%
-
Non-U.S. Investments (% of Net Assets)
9.8%
-

Portfolio Allocation

  • Total
    Holdings
    286

Top 200 holdings represented 94% of the Fund's equity investments as of 09/30/18.

SECTORS
RYPFX (%) RUSSELL
2000 (%)
Industrials
28.0
15.1
Information Technology
20.6
13.9
Financials
16.1
17.4
Materials
8.4
4.2
Health Care
7.7
16.5
Consumer Discretionary
6.8
12.2
Energy
4.2
4.8
Real Estate
2.5
6.9
Consumer Staples
1.7
2.6
Communication Services
1.6
3.3
Utilities
-
3.1
Cash and Cash Equivalents
2.5
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
FLIR Systems
2.3
HEICO Corporation
1.8
Sun Hydraulics
1.7
First Citizens BancShares Cl. A
1.4
Quaker Chemical
1.3
Raven Industries
1.3
U.S. Physical Therapy
1.1
FRP Holdings
1.0
E-L Financial
1.0
CIRCOR International
0.9
FARO Technologies
0.9
Landstar System
0.9
Stella-Jones
0.9
Air Lease Cl. A
0.9
Valmont Industries
0.9
Tennant Company
0.9
Universal Logistics Holdings
0.9
Bio-Techne
0.9
Ares Management L.P.
0.9
Advanced Energy Industries
0.9
Top 20 as % of Net Assets
22.8

SECTORS
RYPFX (%) RUSSELL
2000 (%)
Industrials
27.2
-
Information Technology
21.0
-
Financials
17.2
-
Materials
8.6
-
Health Care
7.4
-
Consumer Discretionary
7.0
-
Energy
4.2
-
Real Estate
3.1
-
Communication Services
1.6
-
Consumer Staples
1.5
-
Cash and Cash Equivalents
1.2
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
FLIR Systems
1.9
HEICO Corporation
1.8
Sun Hydraulics
1.6
First Citizens BancShares Cl. A
1.5
Raven Industries
1.3
Quaker Chemical
1.3
E-L Financial
1.1
U.S. Physical Therapy
1.1
Electro Scientific Industries
1.1
Stella-Jones
1.0
Genworth MI Canada
1.0
Marcus & Millichap
0.9
Valmont Industries
0.9
Air Lease Cl. A
0.9
Medidata Solutions
0.9
Pason Systems
0.9
Landstar System
0.8
FRP Holdings
0.8
Ares Management L.P.
0.8
National Instruments
0.8
Top 20 as % of Net Assets
22.4

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.

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 - 2.1715 - 2.1715 10.32
12/14/16 12/15/16 12/15/16 0.0104 - 0.7481 - 0.7585 11.15
12/16/15 12/17/15 12/17/15 0.0203 0.0124 2.0662 - 2.0989 9.30
12/16/14 12/17/14 12/17/14 0.0400 0.0600 1.4500 - 1.5500 -
12/16/14 12/17/14 12/17/14 0.0000 0.0660 1.4702 - 1.5362 12.62
12/04/13 12/05/13 12/05/13 0.0000 0.1391 0.6517 - 0.7908 14.13
12/27/12 12/28/12 12/28/12 0.0071 - - - 0.0071 11.28
12/05/12 12/06/12 12/06/12 0.0807 0.0344 0.6141 - 0.7292 11.14
12/07/11 12/08/11 12/08/11 0.0000 - 0.3797 - 0.3797 10.61

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 0.76
Distribution (12b-1) fees 0.25
Other expenses 0.26
Total annual Fund operating expenses 1.27

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 small 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 that 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 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.

Chuck Royce lead manager since 2016 (manager 2005-2016), Jay Kaplan (assistant portfolio manager 2003-2016) and Lauren Romeo since 2016 (assistant portfolio manager 2006-2016), assistants Chris Flynn since 2017, Jim Stoeffel since 2017 and Andrew Palen since 2018

11/8/2005 12:00:00 AM

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