article 07-20-2015

Steve Lipper on The Street: "Rising rates bring the balance sheet back into the discussion"

Portfolio Manager Steve Lipper talks to Gregg Greenberg about why fundamentally sound businesses look more attractive than what's been driving small-cap performance over the past several years.

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"Rising rates and certainly rising credit spreads are to the disadvantage of more levered portfolios," said Principal and Portfolio Manager Steve Lipper in his July 13, 2015 interview with Gregg Greenberg of The Street. "Rising rates bring the balance sheet back into the discussion."

In addition to discussing how an increase in interest rates might be a detriment to those companies that have disproportionately benefited from the ability to restructure their debt over the last several years, Steve discussed sectors within small-cap that he believes investors should pay attention to in the second half of the year and the attractiveness of economically sensitive stocks

"Growth, again, let's be wary of companies that aren't earning money," said Steve. "We would be a bit cautious on that."

Steve Lipper joined the firm in 2014. He has 30 years of investment industry experience.

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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.

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. Investments in securities of small-cap companies may involve considerably more risk than investments in securities of larger-cap companies. (Please see "Primary Risks for Fund Investors" in the prospectus.) 

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