Bloomberg Talks to David Nadel about International Small-Caps
article 05-01-2018

Bloomberg Talks to David Nadel about International Small-Caps

Portfolio Manager David Nadel sat down with Julie Hyman on “Bloomberg Markets” on 4/27/18 to discuss what’s driving international small-cap results and his recent research trip to Japan.


Portfolio Manager David Nadel sat down with Julie Hyman on “Bloomberg Markets” to talk about what’s been driving recent results for international small-cap stocks.

Watch the Video here.

Among the contributing factors, David discussed rising interest rates and the notion that international small-caps are thought to be more cyclical than their large-cap siblings to account for the strong results the asset class has enjoyed over the last 15-plus months.

Julie also asked David about a recent research trip that he and PM Mark Rayner made to Japan. Davis detailed what he likes about the Japanese economy, including cuts to corporate tax rates, the government’s ample foreign currency reserves, and improving corporate governance.

He went on to talk about Meitec, which provides high-end engineering outsourcing services targeting the R&D sector. He and Mark like the company’s strong position as the leader in engineering outsourcing in a tight labor market, its gradual margin improvement, and high returns on invested capital. The company is currently a large holding in Royce International Premier Fund.

David joined Royce in 2006 and previously was a Senior Portfolio Manager at Neuberger Berman Inc. (2004-2006) and a Senior Analyst at Pequot Capital Management Inc. (2001-2003). He was also named to the 1999 and 2000 Institutional Investor All-American Research Teams. He started his career at Lazard Frerès & Co. and also worked in Hong Kong for Value Partners Group Ltd, Asia's largest hedge fund manager. He holds a bachelor's degree from Williams College and a master's degree from Harvard University, as well as a Master of Business Administration from Harvard Business School.

Important Disclosure Information

Average Annual Total Returns as of 3/31/18 (%) 

International Premier 0.38 28.50 15.50 11.21 8.61 12/31/10
Russell Global x US SC -0.34 19.33 9.82 7.79 5.74 N/A

Annual Operating Expenses:Gross 1.37% Net 1.19%

1 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 2% 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.

The thoughts and opinions expressed in the video are solely those of the persons speaking as of April 27, 2018 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.

The performance data and trends outlined in this presentation are presented for illustrative purposes only. Past performance is no guarantee of future results. Historical market trends are not necessarily indicative of future market movements.

As of 3/31/18, Meitec was 2.8% of the net assets of Royce International Premier Fund and 1.1% of the asset of Royce Global Value Trust. The company example is for illustrative purposes only. This does not constitute a recommendation to buy or sell any stock. There can be no assurance that the securities mentioned in this piece will be included in any Fund’s portfolio in the future.

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 International Premier Fund invests a significant portion of its assets in foreign companies, which may be subject to different risks than investments in securities of U.S. companies, including adverse political, social, economic, or other developments that are unique to a particular country or region. These risk factors may affect the prices of foreign securities issued by companies headquartered in developing countries more than those headquartered in developed countries. (Please see "Investing in Foreign Securities" in the prospectus.) Therefore, the prices of the securities of foreign companies in particular countries or regions may, at times, move in a different direction than those of the securities of U.S. companies. (Please see “Primary Risks for Fund Investors” in the prospectus.) The Fund invests primarily in small-cap stocks, which may involve considerably more risk than investing in larger-cap stocks. The Fund also generally invests a significant portion of its assets in a limited number of stocks, which may involve considerably more risk than a 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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