article 12-31-2014

Royce Global Value Trust Manager Commentary

Fund Performance

Royce Global Value Trust fell 6.2% on an NAV (net asset value) basis and 7.9% on a market price basis in 2014, results that considerably trailed its benchmark, the Russell Global Small Cap Index, which lost 0.3% for the same period. The Fund's difficulties on both a relative and absolute basis were mostly attributable to a poor second half. The year began on a solidly bullish note. For the six-month period ended June 30, 2014 Global Value Trust climbed 5.6% on an NAV basis and 5.8% on a market price basis, essentially sandwiching its benchmark, which was up 5.7% for the same period. A strengthening Europe helped to compensate for a generally less robust Asia during the first few months of 2014. There were notable contributions from portfolio holdings in Canada, France, and Japan in the first half as well as trouble spots for positions headquartered in Hong Kong and the U.S.

Stocks across the globe corrected (with the exception of U.S. large-caps) in the third quarter, with European shares among the most adversely affected. The Fund lost 7.1% on an NAV basis and 7.4% on a market price basis versus a decline of 6.7% for the Russell Global Small Cap Index. Portfolio holdings headquartered in the U.S., Canada, Hong Kong, and France were the largest detractors from quarterly results. Unfortunately, the Fund fell farther behind in the fourth quarter, a period in which U.S. smallcaps rallied off a mid-October low while many non-U.S. companies saw additional losses or treaded water. For the fourth quarter, the Fund was down 4.4% on an NAV basis and 6.0% based on market price compared to a 1.1% increase for its global benchmark. In contrast to the third quarter, holdings headquartered in Japan, Brazil, and the U.K. had the most significant negative impact. While we were not pleased with the Fund's thus-far brief since inception (10/17/13) results, we are confident that our disciplined, value-oriented approach can be successful.

What Worked... And What Didn't

For the full year, those countries with the greatest positive impact were South Africa, Argentina, and the Philippines while holdings headquartered in Hong Kong, the U.S., the U.K., and Brazil detracted most from Global Value Trust's calendar-year results. On a sector basis, only Information Technology and Consumer Staples finished 2014 in the black, though their respective net gains were modest. Industrials posted the largest net losses, nearly doubling the negative impact of the Fund's next-biggest loser, Materials. The Consumer Discretionary sector also registered a decent-sized net loss for the year. BBVA Banco Frances is one of Argentina's largest banks. Its strong revenue growth and terrific history of earnings per share growth helped to reassure investors otherwise anxious over the nation's recent debt woes. We reduced our position as its stock price climbed. We chose to hold our position in food distribution business Universal Robina, one of the largest food companies in the Philippines. Improved domestic and international sales helped to move its shares higher.

LPS Brasil Consultoria de Imoveis provides integrated solutions in the real estate brokerage industry as well as consulting and financing promotion services in Brazil. A weak real estate market and depressed consumer sentiment contributed to the company's fading share price, which was also hampered by Brazil's overall sluggish economy. Not entirely sure of the timing for a turnaround, we began to reduce our stake in September. We were more confident in the long-term prospects for retailer New World Department Store China. We like how the company is positioned for a pick-up in the Chinese economy as well as its management and very generous dividend policy. LPKF Laser & Electronics develops specialized mechanical engineering products for electronics production, the automotive industry, and the manufacture of solar cells. A revised outlook for 2014 kept investors selling, but we believe the case for long-term growth remained intact. Its financing is solid and its profitability remains above-average, despite the recent revenue downturn. We think it can resume growth in 2015. Freund Corporation manufactures and sells granulation and coating equipment for the pharmaceutical, food, and chemical industries in Japan and internationally. Contracting demand for equipment shipments, surging prices in raw materials, and a rise in operating expenses all hurt its stock price. We added shares in the first half. The strength of the U.S. dollar was also a factor in the performance of non-U.S. holdings.

Top Contributors to Performance
For 2014 (%)

BBVA Banco Frances ADR 0.49
Universal Robina 0.46
Relo Holdings 0.42
Shimano 0.38
Regent Manner International Holdings 0.31
1 Includes dividends

Top Detractors from Performance
For 2014 (%)

LPS Brasil Consultoria de Imoveis -0.58
New World Department Store China -0.57
LPKF Laser & Electronics -0.54
Freund Corporation -0.41
Pico Far East Holdings -0.39
1 Net of dividends

Current Positioning and Outlook

The Fund invests in a broadly diversified portfolio of both U.S. and non-U.S. small-cap stocks. At the end of 2014, Global Value Trust was overweight in cyclical sectors such as Consumer Discretionary and Industrials. We significantly added to our exposure in the latter during 2014. The portfolio also had reasonable exposure to Financials and Information Technology. The former group was underweight versus the benchmark, but was built up considerably in 2014. The Fund's sector weightings reflect our belief in the recovery of global economic growth.

Average Annual Total Returns as of Quarter-End 12/31/14 (%)

RGT -5.96 -7.86 -7.30 10/17/2013
XRGTX -4.42 -6.23 -3.03 10/17/2013
Russell Global SC 1.10 -0.28 2.47 N/A

* Not Annualized

Current month-end performance may be obtained at our Prices and Performance page.

Important Performance, Expense, and Disclosure Information

All performance information reflects past performance, is presented on a total return basis, 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 most recent month-end may be obtained here. 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 invests primarily in securities of small- and micro-cap companies, which may involve considerably more risk than investments in securities of larger-cap companies. The Fund's broadly diversified portfolio does not ensure a profit or guarantee against loss. From time to time, the Fund may invest a significant portion of its net assets in foreign securities, which may involve political, economic, currency, and other risks not encountered in U.S. investments. Regarding the "Top Contributors" and "Top Detractors" tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund's performance for 2014.

The thoughts expressed in this piece concerning recent market movements and future prospects for small company stocks are solely the opinion of Royce at December 31, 2014, and, of course, historical market trends are not necessarily indicative of future market movements. Statements regarding the future prospects for particular securities held in the Funds' portfolios and Royce's investment intentions with respect to those securities reflect Royce's opinions as of December 31, 2014 and are subject to change at any time without notice. There can be no assurance that securities mentioned above will be included in any Royce-managed portfolio in the future.

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 portoflio securities held by the Fund. This Fund is a closed-end fund whose shares of common stock trade on the NYSE. Royce Fund Services, Inc. ("RFS") is a member of FINRA and has filed this material with FINRA on behalf of the Fund. RFS does not serve as a distributor or as an underwriter to the Fund. 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 Global Small Cap Index is an unmanaged, capitalization-weighted index of global small-cap stocks. Index returns include net reinvested dividends and/or interest income. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.



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