article 01-08-2015

David Nadel on WealthTrack: Small-Cap Opportunities in Brazil and India

Why is Portfolio Manager David Nadel bullish on these two developing markets?

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On December 19, 2014, Portfolio Manager and Director of International Research David Nadel was a guest on public television's WealthTrack, where both he and Kenneth Lowe—a portfolio manager at Matthews International Capital Management, LLC—discussed the BRIC (Brazil, Russia, India, China) markets with host Consuelo Mack.

In addition to giving examples of companies that he is currently investing in, David talked about the economic and political conditions in India and Brazil, arguing the latter's room for reform and the former's rising middle class.

"We're just very excited about this longer-term consumer story [in India]," said David about India's market penetration. "I think there are a number of small-caps that will give you a very operationally leveraged play on these trends," he added.

David Nadel joined the firm in 2006, and has 22 years of investment industry experience. He is the portfolio manager of Royce International Smaller-Companies Fund, Royce International Premier Fund, Royce European Smaller-Companies Fund (with Mark Rayner), and Royce Global Value Fund (with Steven McBoyle, Jim Harvey, and Dilip Badlani).

Important Disclosure Information

David Nadel is Director of International Research and a Portfolio Manager of Royce & Associates, LLC, investment adviser to The Royce Funds. He is the portfolio manager of Royce International Smaller-Companies Fund (RIS), Royce European Smaller-Companies Fund (RES), Royce International Premier Fund (RIP), and Royce Global Value Fund (RGV). He also assists Royce Global Dividend Value Fund (RGD), Royce International Micro-Cap Fund (RMI), Royce Global Value Trust (RGT), and Royce Value Trust (RVT). The thoughts and opinions expressed in the video are solely those of the person speaking and may differ from those of other Royce investment professionals, or the firm as a whole. There can be no assurance with regard to future market movements. There can be no assurance that companies that currently pay a dividend will continue to do so in the future.

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. Royce International Smaller-Companies Fund may invest a significant portion of its assets in foreign companies, which may be subject to different risks than investments in securities of U.S. companies, including adverse political, social, economic, currency or other developments that are unique to a particular country or region. These risk factors may affect the prices of foreign securities issued by companies headquartered in developing countries more than those headquartered in developed countries. (Please see "Investing in Foreign Securities" in the prospectus.) Therefore, the prices of the securities of foreign companies in particular countries or regions may, at times, move in a different direction than those of the securities of U.S. companies. (Please see "Primary Risks for Fund Investors" in the prospectus.) In addition, as of 9/30/14 the Fund invested a significant portion of its assets in a limited number of stocks, which may involve considerably more risk than a more broadly diversified portfolio because a decline in the value of any of these stocks would cause the Fund's overall value to decline to a greater degree. The Fund invests primarily in small-cap and/or mid-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 Bovespa Index tracks approximately 50 stocks traded on the Sao Paulo Stock, Mercantile & Futures Exchange. It is composed by a theoretical portfolio with the stocks that accounted for 80% of the volume traded in the last 12 months and that were traded at least on 80% of the trading days. The S&P BSE Sensex Index measures the performance of the 30 largest, most liquid, and financially sound companies across key sectors of the Indian economy that are listed on the Bombay Stock Exchange. The Shanghai Stock Exchange Composite Index is an unmanaged, capitalization-weighted index of A-share and B-share stocks listed on the Shanghai Stock Exchange. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.

Percentage of Fund Holdings as of 12/31/14 (%)

  RIS RES RIP RGV RGD RMI RGT RVT
Shriram Transport Finance 1.34 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Kepler Weber 1.06 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Ashmore Group 1.31 2.79 2.28 1.55 0.88 0.00 1.05 0.32

There can be no assurance that any of the securities mentioned in this piece will be included in these portfolios in the future. References to specific securities in this piece are not intended as recommendations and should not be relied upon as the basis for anyone to buy, sell, or hold any security.

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