article 11-09-2016

Morningstar Spotlights Royce Total Return Fund

Morningstar analyst Andrew Daniels describes Royce Total Return Fund as a "solid option for conservative investors seeking exposure to small-cap stocks."

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Morningstar analyst Andrew Daniels highlights Royce Total Return Fund in the company's weekly fund spotlight for the week of November 1.

"Royce Total Return's solid managers, distinct approach, and predictable risk/reward profile make the fund a sensible option for conservative investors."

Daniels describes the Fund's investment strategy: "The managers look for micro- and small-cap dividend-paying stocks to hold for three to five years, emphasizing businesses with solid balance sheets and high profitability ratios trading at reasonable valuations."

He also elaborates on its approach, saying it is "sensible and long-term oriented…it emphasizes sound businesses trading at reasonable valuations with strong balance sheets and profitability ratios--such as return on invested capital and return on assets--to mitigate financial risk."

"Quality businesses that offer these types of valuations are often experiencing difficulties. The managers spend considerable time trying to identify whether these difficulties are transient or structural and to understand firms' risk/reward profiles. Once the managers buy, they hold on for the long term. The intended investment horizon is three to five years."

Regarding performance, the article says, "The fund has bounced back during the last 12 months, outperforming the benchmark by 3.5 percentage points. Strong stock selection in industrials and basic materials--as well as its lack of poor-performing biotech stocks--drove results."

Last, Andrew discusses the Fund's management and succession, saying: "Although Royce is in the advanced stage of his career, the fund will remain in good hands when he ultimately steps down. The managers' extensive experience and long tenure with the fund support a Positive People rating."

You can read Morningstar's entire fund analyst report here.

Important Disclosure Information

Average Annual Total Returns as of 9/30/16 (%)

  QTR* YTD* 1YR 3YR 5YR 10YR 20YR SINCE
INCEPT.
DATE
Total Return 5.87 14.99 17.13 5.54 13.04 6.64 9.75 10.62 12/15/93
Russell 2000 9.05 11.46 15.47 6.71 15.82 7.07 8.06 8.79 N/A
Annual Operating Expenses: 1.22%
*Not Annualized

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 Investment Class as of the Fund's most current prospectus and include management 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.

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.)

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. Smaller-cap stocks may involve considerably more risk than larger-cap stocks. (Please see "Primary Risks for Fund Investors" in the prospectus.) Royce Opportunity 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.

© 2016 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

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