David Nadel on WealthTrack: International Small-Cap Stocks—an Asset Class Hiding in Plain Sight
article 05-15-2018

David Nadel on WealthTrack: International Small-Cap Stocks—an Asset Class Hiding in Plain Sight

In an exclusive interview with Consuelo Mack WealthTrack, David Nadel talks about the attributes of international small-cap stocks and three holdings he currently likes.


Courtesy of Consuelo Mack WealthTrack. All Rights Reserved.

On May 11, 2018 David Nadel was a guest on Consuelo Mack WealthTrack.

In the interview, David discussed a wide range of topics, including the long-term performance record of international small-caps versus their domestic cousins. He went on to detail some of the attributes he likes about non-U.S. small-caps such as the high number of companies that pay dividends.

Watch the Video here.

He and Consuelo also covered the ways in which many international small-cap businesses have developed to become global leaders, or among the global leaders, in their respective niches—largely by cultivating expertise in understanding markets beyond their borders.

Volatility is often an important part of the discussion when the topic is small-caps, regardless of geography, and David described some of the key factors that he sees as making international small-caps less volatile than their U.S. counterparts. He goes on to discuss a few holdings that he believes exemplify the attributes he wants in the Fund’s “Quality at a Reasonable Price” approach from the U.K., Australia, and Japan.

David Nadel 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. He is the lead portfolio manager for Royce International Premier Fund and assistant portfolio manager for Royce Global Value Trust, a closed-end offering.

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 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.

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, Spirax-Sarco Engineering was 2.0%, Coclear was 1.8%, and Meitec was 2.8% of the net assets of Royce International Premier Fund; as of 3/31/18, Spirax-Sarco Engineering was 1.2%, Cochlear was 0.6%, and Meitec 1.1% of the assets of Royce Global Value Trust. The company examples are for illustrative purposes only. They do 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.)

There can be no assurance that any of the securities mentioned in the video will be included in these portfolios in the future. References to specific securities in this video are not intended as recommendations and should not be relied upon as the basis for anyone to buy, sell, or hold any security.



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