article 03-14-2017

Jay Kaplan on MarketWatch: Small-Cap Opportunities in Human Capital Companies

Portfolio Manager Jay Kaplan tells MarketWatch why the improving job market and other factors have him interested in the small-cap recruiting and staffing space.    

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Portfolio Manager Jay Kaplan spoke with MarketWatch about where he is finding opportunities in the small-cap space.

In the article "'Human capital' stocks come to life as the economy nears full employment," Jay tells author Philip Van Doorn that he currently likes companies in the human capital space, saying, "With the U.S. at full employment ... it is harder to find people, so the companies that help with this are likely to do well."

Jay cites Korn/Ferry International, which provides executive recruiting and other related services, saying: "They are generating a lot of free cash flow like they did in the old days. You have industrywide trends looking up and when you put it all together, it is very interesting."

He also highlights Heidrick & Struggles International: "They have been adding a lot of recruiters over the past year and have done some (smaller) acquisitions in their consulting business. The consultants they have added over the past year or so, are getting traction. In addition, Jay likes TrueBlue, a temporary labor provider, describing the company as "a turnaround-type restructuring story."

Read the full MarketWatch interview with Jay Kaplan here.

Important Disclosure Information

The thoughts and opinions expressed in the video are solely those of the persons speaking as of March 9, 2017 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.

As of 12/31/16, Korn/Ferry International was 0.2% of Royce Total Return Fund's net assets, Heidrick & Struggles International was 0.0%, and TrueBlue was 0.0%.

As of 12/31/16, Korn/Ferry International was 0.2% of Royce Small-Cap Value Fund's net assets, Heidrick & Struggles International was 0.0%, and TrueBlue was 0.0%.

As of 12/31/16, Korn/Ferry International was 0.2% of Royce Pennsylvania Mutual Fund's net assets, Heidrick & Struggles International was 0.0%, and TrueBlue was 0.0%.

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.

Past performance is no guarantee of future results.

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.) 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.)

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