Barron's Talks to Buzz Zaino: "Will Index Funds Share the Nifty 50's Fate?"
article 10-16-2017

Barron’s Talks to Buzz Zaino: "Will Index Funds Share the Nifty 50’s Fate?”

Barron's Jack Willoughby talks to Buzz Zaino: "Will Index Funds Share the Nifty 50's Fate?" about the potential risks of investment trends.

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Buzz Zaino spoke to Jack Willoughby of Barron’s to discuss the current "index-crazed investment world" and other passive investment events he has seen over his career, including the "Nifty 50" period of "one decision" stock-picking.

A "veteran value investor," Buzz recalls the "Nifty 50" period from over four decades ago, in which investors bought growth stocks despite price, resulting in a collapse of the stocks. He adds "Indexing produces the same kind of valuation logic that led to those horrific losses in the early '70s."

As for his own value portfolio, Buzz describes the qualities and themes he looks for in companies, such as turnarounds, unrecognized asset values, undervalued growth, and interrupted earnings, and he points out that he typically expects them to pay off 18 to 24 months after he and Portfolio Manager Bill Hench begin purchasing shares.

He then delves into several companies in Royce Opportunity Fund that he thinks can manage turnarounds and describes why he's currently bullish on the shipping business.

Watch the full Barron's article here.

Important Disclosure Information

The thoughts and opinions expressed in this piece 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 a company that currently pays a dividend will continue to do so in the future.

As of 6/30/17, these stocks mentioned in the Barron’s piece accounted for the following percentage of net assets:

As of 6/30/17, KEMET Corporation was 0.8% of Royce Opportunity Fund's assets, and 1.4% of Royce Micro-Cap Opportunity Fund's assets.

As of 6/30/17, Ultra Clean Holdings was 0.4% of Royce Opportunity Fund's assets, and 0.0% of Royce Micro-Cap Opportunity Fund's assets.

As of 6/30/17, Cohu was 0.3% of Royce Opportunity Fund's assets, and 0.0% of Royce Micro-Cap Opportunity Fund's assets.

As of 6/30/17, Diana Shipping was 0.1% of Royce Opportunity Fund's assets, and 0.5% of Royce Micro-Cap Opportunity Fund's assets.

As of 6/30/17, Ardmore Shipping was 0.2% of Royce Opportunity Fund's assets, and 0.0% of Royce Micro-Cap Opportunity Fund's assets.

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.

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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