Morningstar’s Russ Kinnel looks at Royce Special Equity Fund in a discussion of "3 Key Themes for Investors in 2018"
article 01-17-2018

Morningstar’s Russ Kinnel looks at Royce Special Equity Fund in a discussion of "3 Key Themes for Investors in 2018"

Morningstar’s Russ Kinnel, the firm’s director of manager research, discusses 3 key themes for investors in 2018—one is not to give up on small-cap value funds such as Royce Special Equity.

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Morningstar recently asked Russ Kinnel, the firm’s director of manager research, to list 3 key themes for investors in 2018.

Among the topics Russ discussed, he encouraged investors to take a look at small-cap value, which underperformed in 2017, and Royce Special Equity Fund, managed by Charlie Dreifus, along with assistant PM Steve McBoyle.

In discussing the strong long-term history for small value, Kinnel noted that small-cap value is “an area that tends not to excite because they are kind of boring little companies…” that nonetheless also has many “very steady businesses.”

He went on to praise Charlie as an investor who “really pays attention to accounting and that attention, that level of detail often comes through in having fewer blow-ups. It gives the fund really good downside protection.”

Watch the video here.

Charlie Dreifus, who has 49 years of investment experience, manages Royce Special Equity Fund and Royce Special Equity Multi-Cap Fund. Steven McBoyle, who has 27 years of investment experience, serves as assistant portfolio manager for Special Equity and Special Equity Multi-Cap. Steven is a portfolio manager on Royce Premier and Small/Mid-Cap Premier Funds.

Important Disclosure Information

Average Annual Total Returns as of 12/31/17 (%)

  QTR1 YTD 1YR 3YR 5YR 10YR 15YR SINCE
INCEPT.
DATE
Special Equity 4.59 7.87 7.87 7.72 10.33 8.82 9.69 9.46 05/01/98
Russell 2000 3.34 14.65 14.65 9.96 14.12 8.71 11.17 7.45 N/A
Annual Operating Expenses: 1.17%

1Not 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 and other expenses.

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 Special Equity 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.) As of 12/31/17 the Fund invested a significant portion of its assets in a limited number of stocks, which may involve considerably more risk than more broadly diversified portfolio because a decline in the value of any one of these stocks would cause the Fund's overall value to decline to a greater degree. (Please see "Primary Risks for Fund Investors" in the prospectus.)

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