546

At a Glance

Why invest in Total Return?

  • Small-cap value fund (generally market caps up to $3 billion) that invests primarily in dividend-paying companies with high returns on invested capital and strong fundamentals
  • Focuses on quality businesses with the ability to generate excess cash flow and attractive prospects that are selling at prices Royce believes do not fully reflect these attributes
  • Has a long-term history of low volatility and better risk-adjusted returns than its benchmark, the Russell 2000 Index

As of 12/31/16

  • Small-Cap
    Value Approach
    $2.11B
    Avg. Market Cap
  • Low
    Volatility
    90%
    Active Share
  • Lead Manager
    Tenure
    23+
    Years on Fund

Portfolio Management

Assistant Portfolio Managers: George Necakov, CFA, Chris Flynn

"The process consists of three key elements: We devote as much attention to risk as we do to potential returns—capital preservation means as much as capital appreciation; we have an absolute return orientation that fosters realistic expectations for the stocks we buy; and we have a long-term investment horizon for the dividend-paying companies that we own and the portfolio itself."
Chuck Royce

Performance

Average Annual Total Returns (%)

Outperformed Russell 2000 for the Quarter, Year To Date, 1-Year, 15-Year, 20-Year and since inception (12/15/93) periods as of 12/31/16.
QTR YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Total Return 9.41 25.4125.415.4112.056.548.739.6710.78 12/15/93
Russell 2000 8.83 21.3121.316.7414.467.078.498.259.09 N/A

Annual Operating Expenses: 1.56

DEC YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Total Return 2.81 25.4125.415.4112.056.548.739.6710.78 12/15/93
Russell 2000 2.80 21.3121.316.7414.467.078.498.259.09 N/A

Annual Operating Expenses: 1.56

JAN YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Total Return -0.33 -0.3336.495.6111.496.448.699.5910.75 12/15/93
Russell 2000 -0.32 -0.3236.246.4713.637.018.558.159.05 N/A

Annual Operating Expenses: 1.56

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. 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 K 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 K Class shares on 5/1/08 reflects Investment Class results. K Class shares bear annual expenses that are higher than those borne by Investment Class shares. If K Class's annual expenses had been reflected, total returns prior to 5/1/08 would have been lower.

Rolling Returns

On a monthly basis, the Fund outperformed the Russell 2000 in 55% of all 10-Year periods; 64% of all 5-Year periods; and 51% of all 1-Year periods.

For 98% of the periods, 10-year average annual total returns were greater than 5%.

Relative Returns: Monthly Rolling Average Annual Return Periods 20 Years Through 12/31/16

periods beating
the index(%)
fund
avg(%)
index
avg(%)
10-year
67/121
55 8.3 6.9
5-year
116/181
64 9.3 7.6
1-year
116/229
51 10.0 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% 54 34
> 5% and ≤ 10% 100 64
> 0% and ≤ 5% 3 2
≤ 0% 0 0

The Fund averaged a 9.7% return over all 157 10-year monthly rolling return periods.

Market Cycle Performance

The Fund outperformed the Russell 2000 from the 6/23/15 index peak through current (12/31/16).
Peak-Peak - 07/13/07 - 04/29/11
Total Return5.7%
Russell 20006.6%

Peak-Peak - 04/29/11 - 06/23/15
Total Return42.8%
Russell 200058.5%

Peak-Current - 06/23/15 - 12/31/16
Total Return11.7%
Russell 20007.2%

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 12/15/93 and 12/31/16

Total Return$105,926.73
Russell 2000$74,191.00

Portfolio Impactas of 12/31/16

SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Industrials
25.30
12.60
3.33
Financials
26.14
11.17
2.85
Consumer Discretionary
12.33
8.38
1.07
Information Technology
6.78
14.28
0.93
Materials
12.96
5.87
0.76
Energy
3.02
17.23
0.43
Utilities
1.94
13.61
0.26
Consumer Staples
3.66
4.37
0.16
Telecommunication Services
1.02
14.99
0.14
Health Care
4.90
1.12
-0.01
Real Estate
0.37
6.61
-0.01
Cash
1.57
0.11
0.00

Top Contributors

INDUSTRYSECTORGAIN (%)
BanksFinancials1.63
MachineryIndustrials1.15
InsuranceFinancials0.82
Professional ServicesIndustrials0.79
Commercial Services & SuppliesIndustrials0.65

Top Detractors

INDUSTRYSECTORGAIN (%)
Health Care Equipment & SuppliesHealth Care-0.18
Personal ProductsConsumer Staples-0.04
Multiline RetailConsumer Discretionary-0.02
Real Estate Management & DevelopmentReal Estate-0.02
PharmaceuticalsHealth Care-0.02

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Quaker ChemicalChemicalsMaterials0.35
ManpowerGroupProfessional ServicesIndustrials0.27
Thor IndustriesAutomobilesConsumer Discretionary0.26
HNI CorporationCommercial Services & SuppliesIndustrials0.26
First Citizens BancShares Cl. ABanksFinancials0.23

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
Ashmore GroupCapital MarketsFinancials-0.11
Cohen & SteersCapital MarketsFinancials-0.11
Gold Fields ADRMetals & MiningMaterials-0.10
Value Partners GroupCapital MarketsFinancials-0.10
TeleflexHealth Care Equipment & SuppliesHealth Care-0.09
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Industrials
23.72
30.67
7.43
Financials
26.41
24.14
6.08
Materials
12.33
47.54
5.75
Consumer Discretionary
12.65
18.22
2.60
Information Technology
7.27
35.07
2.42
Consumer Staples
4.04
25.61
0.98
Energy
2.93
33.19
0.90
Utilities
1.98
38.60
0.79
Health Care
5.79
8.90
0.52
Telecommunication Services
1.07
8.91
0.08
Real Estate
0.27
39.28
0.05
Cash
1.54
0.31
0.01

Top Contributors

INDUSTRYSECTORGAIN (%)
ChemicalsMaterials3.11
MachineryIndustrials2.85
BanksFinancials2.53
Commercial Services & SuppliesIndustrials2.21
InsuranceFinancials1.96

Top Detractors

INDUSTRYSECTORGAIN (%)
Technology Hardware, Storage & PeripheralsInformation Technology-0.16
Life Sciences Tools & ServicesHealth Care-0.10
Multiline RetailConsumer Discretionary-0.04
MarineIndustrials-0.03
Health Care TechnologyHealth Care-0.03

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Quaker ChemicalChemicalsMaterials0.87
Thor IndustriesAutomobilesConsumer Discretionary0.87
Chase CorporationChemicalsMaterials0.85
TMX GroupCapital MarketsFinancials0.69
Ritchie Bros. AuctioneersCommercial Services & SuppliesIndustrials0.61

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
SEI InvestmentsCapital MarketsFinancials-0.21
Value Partners GroupCapital MarketsFinancials-0.19
Diebold NixdorfTechnology Hardware, Storage & PeripheralsInformation Technology-0.18
Flowers FoodsFood ProductsConsumer Staples-0.13
Artisan Partners Asset Management Cl. ACapital MarketsFinancials-0.13
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Industrials
23.72
30.67
7.43
Financials
26.41
24.14
6.08
Materials
12.33
47.54
5.75
Consumer Discretionary
12.65
18.22
2.60
Information Technology
7.27
35.07
2.42
Consumer Staples
4.04
25.61
0.98
Energy
2.93
33.19
0.90
Utilities
1.98
38.60
0.79
Health Care
5.79
8.90
0.52
Telecommunication Services
1.07
8.91
0.08
Real Estate
0.27
39.28
0.05
Cash
1.54
0.31
0.01

Top Contributors

INDUSTRYSECTORGAIN (%)
ChemicalsMaterials3.11
MachineryIndustrials2.85
BanksFinancials2.53
Commercial Services & SuppliesIndustrials2.21
InsuranceFinancials1.96

Top Detractors

INDUSTRYSECTORGAIN (%)
Technology Hardware, Storage & PeripheralsInformation Technology-0.16
Life Sciences Tools & ServicesHealth Care-0.10
Multiline RetailConsumer Discretionary-0.04
MarineIndustrials-0.03
Health Care TechnologyHealth Care-0.03

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Quaker ChemicalChemicalsMaterials0.87
Thor IndustriesAutomobilesConsumer Discretionary0.87
Chase CorporationChemicalsMaterials0.85
TMX GroupCapital MarketsFinancials0.69
Ritchie Bros. AuctioneersCommercial Services & SuppliesIndustrials0.61

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
SEI InvestmentsCapital MarketsFinancials-0.21
Value Partners GroupCapital MarketsFinancials-0.19
Diebold NixdorfTechnology Hardware, Storage & PeripheralsInformation Technology-0.18
Flowers FoodsFood ProductsConsumer Staples-0.13
Artisan Partners Asset Management Cl. ACapital MarketsFinancials-0.13
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Financials
25.43
29.15
7.08
Industrials
21.28
20.24
5.13
Materials
11.27
31.47
4.21
Information Technology
8.12
39.20
2.78
Health Care
6.26
41.62
2.62
Utilities
2.45
86.21
1.79
Consumer Discretionary
12.62
7.46
0.89
Consumer Staples
3.46
12.27
0.72
Real Estate
1.32
45.28
0.33
Telecommunication Services
0.93
34.02
0.29
Energy
3.97
-34.98
-2.82
Cash
2.89
0.38
0.01
Unclassified
0.01
17.93
0.01

Top Contributors

INDUSTRYSECTORGAIN (%)
InsuranceFinancials4.09
ChemicalsMaterials3.01
BanksFinancials2.47
Commercial Services & SuppliesIndustrials1.87
MachineryIndustrials1.58

Top Detractors

INDUSTRYSECTORGAIN (%)
Energy Equipment & ServicesEnergy-2.74
Specialty RetailConsumer Discretionary-1.23
Personal ProductsConsumer Staples-0.37
Multiline RetailConsumer Discretionary-0.34
Trading Companies & DistributorsIndustrials-0.25

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
Chase CorporationChemicalsMaterials1.00
Thor IndustriesAutomobilesConsumer Discretionary0.93
Quaker ChemicalChemicalsMaterials0.86
MKS InstrumentsSemiconductors & Semiconductor EquipmentInformation Technology0.71
Erie Indemnity Cl. AInsuranceFinancials0.70

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
TidewaterEnergy Equipment & ServicesEnergy-0.77
CARBO CeramicsEnergy Equipment & ServicesEnergy-0.67
Ascena Retail GroupSpecialty RetailConsumer Discretionary-0.50
Buckle (The)Specialty RetailConsumer Discretionary-0.43
Nu Skin Enterprises Cl. APersonal ProductsConsumer Staples-0.36
SECTOR NAMEAVERAGE WEIGHT (%)TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)
Financials
25.27
114.25
26.64
Industrials
20.30
97.48
19.68
Consumer Discretionary
12.53
68.11
9.46
Materials
9.69
96.11
8.94
Information Technology
7.38
113.00
7.10
Health Care
6.07
113.11
6.39
Consumer Staples
3.61
112.22
4.79
Utilities
2.55
145.71
3.02
Real Estate
2.01
108.40
2.75
Energy
5.34
-0.76
1.67
Telecommunication Services
0.83
82.11
0.66
Cash
4.20
0.51
0.02
Unclassified
0.22
151.57
0.76

Top Contributors

INDUSTRYSECTORGAIN (%)
InsuranceFinancials12.17
MachineryIndustrials8.27
Capital MarketsFinancials7.55
ChemicalsMaterials6.25
BanksFinancials4.67

Top Detractors

INDUSTRYSECTORGAIN (%)
Energy Equipment & ServicesEnergy-0.74
Multiline RetailConsumer Discretionary-0.29
Technology Hardware, Storage & PeripheralsInformation Technology-0.22
Investment CompaniesFinancials-0.07
Health Care TechnologyHealth Care-0.06

Top Contributors

COMPANYINDUSTRYSECTORGAIN (%)
A. O. Smith CorporationBuilding ProductsIndustrials1.55
Chase CorporationChemicalsMaterials1.50
Quaker ChemicalChemicalsMaterials1.43
Thor IndustriesAutomobilesConsumer Discretionary1.39
Federated Investors Cl. BCapital MarketsFinancials1.27

Top Detractors

COMPANYINDUSTRYSECTORGAIN (%)
CARBO CeramicsEnergy Equipment & ServicesEnergy-0.76
TidewaterEnergy Equipment & ServicesEnergy-0.70
Atwood OceanicsEnergy Equipment & ServicesEnergy-0.35
Meadowbrook Insurance GroupInsuranceFinancials-0.29
Citadel CapitalCapital MarketsFinancials-0.29

Risk

Low Volatility vs. Peer Group as of 12/31/16

The Fund has a low volatility within its peer group of 525 Small-Cap Funds based on 5-year rolling standard deviation.

Down Market Performance Comparisonas of 12/31/16

The Fund outperformed the Russell 2000 during all 11 downturns of 10% or more from the index’s prior historical high over the last 20 years.

Market Downturns (%)

DownMarketImg
Outperformed in 17 out of 19 down quarters.

Russell 2000 Down Quarters

QUARTER ENDRUSSELL 2000 (%)TOTAL RETURN (%)SPREAD (%)
03/31/16-1.5+5.1+6.6
09/30/15-11.9-9.7+2.2
09/30/14-7.4-6.5+0.9
06/30/12-3.5-4.4-0.9
09/30/11-21.9-17.1+4.8
06/30/11-1.6-1.0+0.6
06/30/10-9.9-7.6+2.3
03/31/09-15.0-12.1+2.9
12/31/08-26.1-23.2+2.9
09/30/08-1.1-5.0-3.9
03/31/08-9.9-5.6+4.3
12/31/07-4.6-3.5+1.1
09/30/07-3.1-2.5+0.6
06/30/06-5.0-3.5+1.5
03/31/05-5.3-1.1+4.2
09/30/04-2.9+0.1+3.0
03/31/03-4.5-4.3+0.2
09/30/02-21.4-11.9+9.5
06/30/02-8.4-3.4+5.0

Capture Ratios Fund's First Full Quarter (12/31/93) to 12/31/16

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 12/31/16

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 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 12/31/16

The Fund produced lower volatility than the Russell 2000 and 90% of small-cap objective funds, as shown by its standard deviation.
The Fund performed within the top 50% 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 90% of small-cap objective funds, as shown by its standard deviation.
The Fund beat the Russell 2000 and performed within the top 50% 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 90% of small-cap objective funds, as shown by its standard deviation.
Sharpe RatioStandard Deviation
Total Return0.4216.54
Russell 20000.4120.14
Category Median0.4119.83
Best Decile Breakpoint0.5117.87

Category Median and Best Decile Breakpoint based on 419 small-cap objective funds (oldest class only) with at least ten years of history.
Sharpe Ratio Standard Deviation
Total Return
Russell 2000
Category Median
Best Quartile Breakpoint

Composition

Morningstar Style Map™as of 09/30/16

mstar-RTRKX

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 12/31/16

  RTRKX Russell 2000
Average Market Cap
2.11B
1.66B
90%
-
2015 Portfolio Turnover
11%
-
Weighted Average P/E,
20.0x
22.9x
Weighted Average P/B
2.2x
2.2x
U.S. Investments (% of Net Assets)
88.6%
-
Non-U.S. Investments (% of Net Assets)
10.3%
-

Portfolio Allocation

  • Total
    Holdings
    288

Top 200 holdings represented 95% of the Fund's equity investments as of 12/31/16.

SECTORS
RTRKX (%) RUSSELL
2000 (%)
Financials
26.2
19.9
Industrials
25.3
14.6
Consumer Discretionary
13.0
12.6
Materials
12.5
4.9
Information Technology
6.6
17.0
Health Care
4.8
12.1
Consumer Staples
3.7
3.0
Energy
3.2
3.8
Utilities
2.0
3.5
Telecommunication Services
1.1
0.7
Real Estate
0.4
7.9
Bonds & Preferreds
0.1
-
Cash and Cash Equivalents
1.1
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Quaker Chemical
1.8
HEICO Corporation
1.6
Balchem Corporation
1.5
Thor Industries
1.5
Erie Indemnity Cl. A
1.4
E-L Financial
1.4
Woodward
1.3
Tennant Company
1.3
Gentex Corporation
1.2
ManpowerGroup
1.2
SEACOR Holdings
1.1
Alleghany Corporation
1.1
Albemarle Corporation
1.1
Methode Electronics
1.0
BOK Financial
1.0
First Citizens BancShares Cl. A
1.0
Hubbell Cl. B
1.0
Ethan Allen Interiors
1.0
Bank of Hawaii
1.0
Nordson Corporation
0.9
Top 20 as % of Net Assets
24.4

SECTORS
RTRKX (%) RUSSELL
2000 (%)
Financials
26.2
19.9
Industrials
25.3
14.6
Consumer Discretionary
13.0
12.6
Materials
12.5
4.9
Information Technology
6.6
17.0
Health Care
4.8
12.1
Consumer Staples
3.7
3.0
Energy
3.2
3.8
Utilities
2.0
3.5
Telecommunication Services
1.1
0.7
Real Estate
0.4
7.9
Bonds & Preferreds
0.1
-
Cash and Cash Equivalents
1.1
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Quaker Chemical
1.8
HEICO Corporation
1.6
Balchem Corporation
1.5
Thor Industries
1.5
Erie Indemnity Cl. A
1.4
E-L Financial
1.4
Woodward
1.3
Tennant Company
1.3
Gentex Corporation
1.2
ManpowerGroup
1.2
SEACOR Holdings
1.1
Alleghany Corporation
1.1
Albemarle Corporation
1.1
Methode Electronics
1.0
BOK Financial
1.0
First Citizens BancShares Cl. A
1.0
Hubbell Cl. B
1.0
Ethan Allen Interiors
1.0
Bank of Hawaii
1.0
Nordson Corporation
0.9
Top 20 as % of Net Assets
24.4

Portfolio Holdings

View the complete list of holdings for this fund as of 12/31/16. 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 ($) REINVEST
PRICE ($)
12/14/16 12/15/16 12/15/16 0.0822 - 1.0906 - 1.1728 9.17
09/07/16 09/08/16 09/08/16 0.0050 - - - 0.0050 9.41
06/01/16 06/02/16 06/02/16 0.0200 - - - 0.0200 8.87
03/02/16 03/03/16 03/03/16 0.0100 - - - 0.0100 8.20
12/16/15 12/17/15 12/17/15 0.0000 - 1.6504 - 1.6504 8.16
09/02/15 09/03/15 09/03/15 0.0150 - - - 0.0150 9.94
06/03/15 06/04/15 06/04/15 0.0200 - - - 0.0200 10.85
03/04/15 03/05/15 03/05/15 0.0250 - - - 0.0250 10.74
12/16/14 12/17/14 12/17/14 0.1227 0.0456 1.5698 - 1.7381 10.43
09/03/14 09/04/14 09/04/14 0.0100 - - - 0.0100 12.51
06/04/14 06/05/14 06/05/14 0.0100 - - - 0.0100 12.44
03/05/14 03/06/14 03/06/14 0.0100 - - - 0.0100 12.46
12/04/13 12/05/13 12/05/13 0.0035 0.1382 1.2786 - 1.4203 12.00
09/04/13 09/05/13 09/05/13 0.0100 - - - 0.0100 12.24
06/05/13 06/06/13 06/06/13 0.0200 - - - 0.0200 11.90
03/06/13 03/07/13 03/07/13 0.0150 - - - 0.0150 11.43
12/05/12 12/06/12 12/06/12 0.0618 0.0273 0.5909 - 0.6800 10.32
09/05/12 09/06/12 09/06/12 0.0200 - - - 0.0200 10.82
06/06/12 06/07/12 06/07/12 0.0250 - - - 0.0250 9.98
03/07/12 03/08/12 03/08/12 0.0200 - - - 0.0200 10.56
12/07/11 12/08/11 12/08/11 0.0121 - 0.1465 - 0.1586 9.70
09/07/11 09/08/11 09/08/11 0.0150 - - - 0.0150 9.49
06/08/11 06/09/11 06/09/11 0.0200 - - - 0.0200 10.48
03/09/11 03/10/11 03/10/11 0.0100 - - - 0.0100 10.50
12/08/10 12/09/10 12/09/10 0.0260 - - - 0.0260 10.17
09/08/10 09/09/10 09/09/10 0.0150 - - - 0.0150 8.80
06/09/10 06/10/10 06/10/10 0.0400 - - - 0.0400 8.65
03/10/10 03/11/10 03/11/10 0.0200 - - - 0.0200 8.98
12/08/09 12/09/09 12/09/09 0.0166 - - - 0.0166 8.19
09/08/09 09/09/09 09/09/09 0.0200 - - - 0.0200 7.90
06/09/09 06/10/09 06/10/09 0.0200 - - - 0.0200 7.22
03/10/09 03/11/09 03/11/09 0.0250 - - - 0.0250 5.22

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 180 days) 0.00

Annual Fund Operating Expenses (%)

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

Management fees 0.97
Distribution (12b-1) fees 0.25
Other expenses 0.27
Acquired fund fees and expenses 0.07
Total annual Fund operating expenses 1.56
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 carefuly before investing or sending money. The Fund invests primarily in small-cap 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 (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 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. 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.

Chuck Royce lead manager since 2013 (co-manager 2011-2013 and manager 1993-2011), Jay Kaplan since 2011 (assistant portfolio manager 2005-2011), assistants George Necakov since 2005 and Chris Flynn since 2007

5/1/2008 12:00:00 AM

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