Morningstar’s Russ Kinnel again looks at Royce Special Equity Fund in "12 Funds for 2018 and Beyond"
article 02-14-2018

Morningstar’s Russ Kinnel again looks at Royce Special Equity Fund in "12 Funds for 2018 and Beyond"

Morningstar’s Russ Kinnel on Royce Special Equity Fund in the context of the shift in market dynamics in 2018: “It is not clear whether this change is bullish or bearish for equities or for bonds.”


Morningstar’s Russ Kinnel, the firm’s director of manager research, recently discussed the portfolios he likes in a piece entitled, “12 Funds for 2018 and Beyond.”

Seeing a major shift in market dynamics this year and into the future, Kinnel lists the factors that he sees as game changing, including new tax laws, changes in Fed leadership, and increased volatility.

With so much changing, Kinnel looks at the recent underperformance for small value strategies and says that it “certainly reminds me of 1999 when small-value stocks just looked stodgy and boring in comparison with the dynamic Internet and technology companies powering the markets.”

This leads him to highlight Royce Special Equity Fund. He describes Portfolio Manager Charlie Dreifus as “an accounting stickler who likes cheap stocks,” and the portfolio’s approach as “a style that does OK in market rallies and brilliantly in downturns (because it loses less than peers and the market).”

Read the full article.

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

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%

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 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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