Royce Micro-Cap Fund (RYOTX, RMCFX, RYMCX, RMCIX)
13

At a Glance

Why invest in Micro-Cap?

  • One of the oldest open-end funds dedicated to investing in micro-cap stocks, which Royce defines as companies with market caps no higher than that of the largest company in the Russell Microcap® Index.
  • Core approach that combines multiple investment themes and offers wide exposure to micro-cap stocks by investing in companies with strong fundamentals and/or prospects selling at prices that Royce believes do not fully reflect these attributes.
  • Average annual total return of 10.5% since inception (12/31/91) through 9/30/24.

As of 09/30/24

  • Micro-Cap
    Core Approach
    $619.2M
    Avg. Market Cap
  • High
    Volatility
    89%
    Active Share
  • Fund
    Longevity
    32+
    Years of History

Portfolio Management

"The micro-cap universe offers plenty of opportunities for us to find companies that are lightly researched or mispriced. Using multiple approaches gives us exposure to the entire asset class while our discipline keeps us focused on the fundamental business strengths that we think can create strong long-term performance."
—Jim Stoeffel

Manager Tenure

Manager Tenure

Performance

Average Annual Total Returns (%)

Outperformed Russell Microcap for the Year To Date, 3-Year, 5-Year, 10-Year and 20-Year periods as of 09/30/24. Outpaced Russell 2000 for the 3-Year, 5-Year, 30-Year and since inception (12/31/91) periods as of 09/30/24.
QTR YTD 1YR 3YR 5YR 10YR 15YR 20YR 25YR 30YR SINCE INCEPT.
(12/31/91)
Micro-Cap 5.23 8.0021.712.2712.917.567.617.439.399.5710.46
Russell Microcap 8.29 7.3824.63-3.748.457.299.356.83N/AN/AN/A
Russell 2000 9.27 11.1726.761.849.398.7810.598.498.278.959.30

Annual Operating Expenses: Gross 1.25 Net 1.24

OCT YTD 1YR 3YR 5YR 10YR 15YR 20YR 25YR 30YR SINCE INCEPT.
(12/31/91)
Micro-Cap -2.78 5.0027.60-0.5011.536.747.687.279.359.4610.34
Russell Microcap 0.68 8.1135.24-4.228.056.7210.126.80N/AN/AN/A
Russell 2000 -1.44 9.5634.07-0.058.507.9411.008.308.198.919.23

Annual Operating Expenses: Gross 1.25 Net 1.24

NOV YTD 1YR 3YR 5YR 10YR 15YR 20YR 25YR 30YR SINCE INCEPT.
(12/31/91)
Micro-Cap 7.79 13.1827.060.3812.787.687.867.399.349.8010.57
Russell 2000 N/A N/AN/AN/AN/AN/AN/AN/AN/AN/AN/A
Russell Microcap N/A N/AN/AN/AN/AN/AN/AN/AN/AN/AN/A

Annual Operating Expenses: Gross 1.25 Net 1.24

Important Performance and Expense Information

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. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.royceinvest.com. Gross operating expenses reflect the Fund's total gross annual operating expenses for the Investment Class and include management fees and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund's most current prospectus. Royce & Associates has contractually agreed, without right of termination, to waive fees and/or reimburse expenses to the extent necessary to maintain the Investment Class's net annual operating expenses (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business) at or below 1.24% through April 30, 2025.

Rolling Returns

On a monthly basis, the Fund outperformed the Russell Microcap in 56% of all 5-Year periods; and 58% of all 1-Year periods.

For 84% of the periods, 10-year average annual total returns were greater than 5%.

Relative Returns: Monthly Rolling Average Annual Return Periods Since Russell Microcap's Inception Through 09/30/24

periods beating
the index(%)		 fund
avg(%)		 index
avg(%)
10-year
68/172
 40 7.0 7.9
5-year
129/232
 56 8.0 8.0
1-year
163/280
 58 10.8 10.0

Absolute Returns: 10-Year Monthly Rolling Return PeriodsNumber of 10-Year Average Annual Return Periods Since the Fund’s Inception

Return Range Periods % in Range
> 10% 123 45
> 5% and ≤ 10% 107 39
> 0% and ≤ 5% 44 16
≤ 0% 0 0

The Fund averaged a 9.3% return over all 274 10-year monthly rolling return periods.

Market Cycle Performance

The Fund outperformed the Russell Microcap from the 3/12/21 index peak through current (9/30/24).
Peak-Peak - 06/23/15 - 08/31/18
Micro-Cap25.6%
Russell Microcap36.1%

Peak-Peak - 08/31/18 - 03/12/21
Micro-Cap47.7%
Russell Microcap48.9%

Peak-Current - 03/12/21 - 09/30/24
Micro-Cap4.6%
Russell Microcap-18.1%

Royce defines market cycles as those that have retreated at least 15% from a previous market peak and have rebounded to establish a new peak above the previous one. 

Royce defines market cycles as those that have retreated at least 15% from a previous market peak and have rebounded to establish a new peak above the previous one. 

Calendar Year Total Returns (%)

 

Growth of Investment

Value of $10,000 invested between 06/30/00 and 09/30/24

Micro-Cap$74,238.25
Russell Microcap$52,832.90

The since inception performance above dates to the inception of the Russell Microcap on 6/30/2000. The Fund's inception date (12/31/1991) preceded the inception of the index.

Risk

High Volatility vs. Peer Group as of 09/30/24

The Fund has a high volatility within its peer group of 512 Small-Cap Funds based on 5-year rolling standard deviation.

Down Market Performance Comparisonas of 09/30/24

The Fund outperformed the Russell Microcap during eight out of nine downturns of 15% or more from the index’s prior historical high since the index’s inception.

Market Downturns (%)

DownMarketImg
Outperformed in 14 out of 20 down quarters.

Russell Microcap Down Quarters

QUARTER ENDRUSSELL MICROCAP (%)MICRO-CAP (%)SPREAD (%)
06/30/24-5.3-1.7+3.6
09/30/23-7.9-3.2+4.7
03/31/23-2.8+2.5+5.3
09/30/22-0.5-3.7-3.2
06/30/22-19.0-17.9+1.1
03/31/22-7.6-12.3-4.7
12/31/21-2.7+7.2+9.9
09/30/21-5.0-2.4+2.6
03/31/20-32.0-31.8+0.2
09/30/19-5.5-2.8+2.7
12/31/18-22.1-19.6+2.5
03/31/16-5.4-1.1+4.3
09/30/15-13.8-15.7-1.9
09/30/14-8.2-10.0-1.8
06/30/14-1.4+1.8+3.2
06/30/12-2.0-8.6-6.6
09/30/11-22.7-22.1+0.6
06/30/11-3.5-4.3-0.8
06/30/10-8.9-5.8+3.1
12/31/09-0.5+6.5+7.0

Capture Ratios From 06/30/00 (Russell Microcap Inception) to 09/30/24

Upside Capture Ratio measures a manager's performance in up markets relative to the Fund's benchmark. It is calculated by measuring the Fund's performance in quarters when the benchmark goes up and dividing it by the benchmark's return in those quarters.

Downside Capture Ratio measures a manager's performance in down markets relative to the Fund's benchmark. It is calculated by measuring the Fund's performance in quarters when the benchmark goes down and dividing it by the benchmark's return in those quarters.

Long Term Risk Measurementas of 09/30/24

Over the past 10 years, the Fund outperformed the Russell Microcap Index with lower volatility.
Over the past 5 years, the Fund outperformed the Russell Microcap Index.
Over the past 3 years, the Fund outperformed the Russell Microcap Index.
From the Index's inception, the Fund outperformed the Russell Microcap Index with lower volatility.

Go to Relative Risk Spectrum Tool

Morningstar Statistical Measures as of 09/30/24

The Fund beat the Russell Microcap on a risk-adjusted basis, as shown by its Sharpe ratio. In addition, the Fund produced lower volatility than the Russell Microcap, as shown by its standard deviation.
Sharpe RatioStandard Deviation
Micro-Cap0.3621.82
Russell Microcap0.3522.02
Category Median0.4420.12
Best Quartile Breakpoint0.4919.29

Category Median and Best Quartile Breakpoint based on 432 small-cap objective funds (oldest class only) with at least ten years of history.
Sharpe Ratio Standard Deviation
Micro-Cap
Russell Microcap
Category Median
Best Quartile Breakpoint

Composition

Morningstar Style Map™as of 06/30/24

mstar-RYOTX

The Morningstar Style Map is the Morningstar Style Box™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone™. The Morningstar Style Box is designed to reveal a fund's investment strategy. The Morningstar Ownership Zone provides detail about a portfolio's investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. The shaded area represents the center 75% of the Fund's assets while the plot point in the middle represents the weighted average of its holdings. Over time, the shape and location of a fund's ownership zone may vary.

Portfolio Diagnosticsas of 09/30/24

  RYOTX Russell Microcap
Average Market Cap
619.2M
537.4M
Active Share
89%
-
2023 Portfolio Turnover
19%
-
Weighted Average P/B,
1.7x
1.6x
U.S. Investments (% of Net Assets)
87.4%
-
Non-U.S. Investments (% of Net Assets)
11.6%
-

Portfolio Allocation

  • Total
    Holdings
    127


SECTORS		RYOTX (%) RUSSELL
MICROCAP (%)
Industrials
26.1
13.6
Information Technology
24.0
12.1
Financials
12.9
23.1
Consumer Discretionary
12.6
8.2
Health Care
9.8
25.3
Communication Services
5.0
3.0
Energy
3.8
4.3
Materials
3.6
3.5
Consumer Staples
0.7
2.2
Real Estate
0.5
4.0
Utilities
-
0.8
Cash and Cash Equivalents
1.0
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
CareDx
1.3
Artivion
1.3
Northwest Pipe
1.3
Graham Corporation
1.3
Distribution Solutions Group
1.2
QuinStreet
1.2
CRA International
1.2
Shoe Carnival
1.2
VSE Corporation
1.2
Transcat
1.2
PAR Technology
1.2
IES Holdings
1.2
HomeTrust Bancshares
1.2
CECO Environmental
1.2
American Superconductor
1.2
Harrow
1.2
BayCom Corp.
1.2
Clarkson
1.2
Newpark Resources
1.1
Investar Holding
1.1
Top 20 as % of Net Assets
24.2

SECTORS		RYOTX (%) RUSSELL
MICROCAP (%)
Industrials
24.8
-
Information Technology
23.4
-
Financials
13.5
-
Consumer Discretionary
11.5
-
Health Care
9.1
-
Communication Services
5.1
-
Energy
4.5
-
Materials
3.3
-
Consumer Staples
0.8
-
Real Estate
0.5
-
Cash and Cash Equivalents
3.6
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
IMAX Corporation
1.3
QuinStreet
1.3
Artivion
1.3
VSE Corporation
1.3
BayCom Corp.
1.3
Northwest Pipe
1.3
Profire Energy
1.2
HomeTrust Bancshares
1.2
American Superconductor
1.2
Natural Gas Services Group
1.2
Distribution Solutions Group
1.2
nLIGHT
1.2
Newpark Resources
1.1
Applied Optoelectronics
1.1
Graham Corporation
1.1
Quanex Building Products
1.1
Investar Holding
1.1
StoneX Group
1.1
HBT Financial
1.1
Clarkson
1.1
Top 20 as % of Net Assets
23.8

Portfolio Holdings

Unaudited schedules of portfolio holdings are presented for informational purposes only.

View the complete list of holdings (unaudited) for this fund as of the previous quarter-end: 09/30/24.

Least Portfolio Overlap - U.S. Equity Funds

Greatest Portfolio Overlap - U.S. Equity Funds

Geographical Breakdown

Distributions

NAV & Distributions


Start DateEnd Date
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Distributions

RECORD
DATE		 EX-DATE PAYABLE
DATE		 INCOME ($) SHORT
TERM
GAINS ($)		 LONG
TERM
GAINS ($)		 RETURN OF
CAPITAL ($)		 TOTAL ($) REINVEST
PRICE ($)
12/13/23 12/14/23 12/14/23 0.0000 0.0000 0.7667 - 0.7667 10.71
12/14/22 12/15/22 12/15/22 0.0000 0.0685 0.4357 - 0.5042 9.85
12/15/21 12/16/21 12/16/21 0.0000 0.3705 2.7273 - 3.0978 12.66
12/09/20 12/10/20 12/10/20 0.0000 - 0.9431 - 0.9431 12.26
12/11/19 12/12/19 12/12/19 0.0000 - 0.3000 - 0.3000 10.72
12/12/18 12/13/18 12/13/18 0.0000 0.0000 1.3046 - 1.3046 9.76
12/13/17 12/14/17 12/14/17 0.0062 0.0906 0.8125 - 0.9093 11.42
12/14/16 12/15/16 12/15/16 0.0579 - 1.3023 - 1.3602 11.93
12/16/15 12/17/15 12/17/15 0.0000 - 1.4411 - 1.4411 11.00
12/16/14 12/17/14 12/17/14 0.0000 - 1.4830 - 1.4830 14.10
12/04/13 12/05/13 12/05/13 0.0185 - 1.1929 - 1.2114 16.20
12/27/12 12/28/12 12/28/12 0.0050 0.0259 - - 0.0309 14.48
12/05/12 12/06/12 12/06/12 0.0000 0.0273 0.8269 - 0.8542 14.17
12/07/11 12/08/11 12/08/11 0.2016 - 0.6977 - 0.8993 14.47
12/08/10 12/09/10 12/09/10 0.2533 - - - 0.2533 17.03
12/08/09 12/09/09 12/09/09 0.1842 - - - 0.1842 13.21

NAV History for

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Fees & Expenses

Shareholder Fees (%)

(fees paid directly from your investment)

Maximum sales charge (load) imposed on purchases 0.00
Maximum deferred sales charge 0.00
Maximum sales charge (load) imposed on reinvested dividends 0.00
Redemption fee (as a percentage of amount redeemed on shares held for less than 30 days) 1.00

Annual Fund Operating Expenses (%)

(expenses that you pay each year as a percentage of the value of your investment)

Management fees 1.00
Distribution (12b-1) fees 0.00
Other expenses 0.25
Total annual Fund operating expenses 1.25
Fee waivers and/or expense reimbursements (0.01)
Total annual Fund operating expenses after fee waivers and/or expense reimbursements1.24
Royce has contractually agreed, without right of termination, to waive fees and/or reimburse expenses to the extent necessary to maintain the Investment Class's net annual operating expenses (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business) at or below 1.24% through April 30, 2025.

Important Disclosure Information

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. The Fund invests primarily in 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.) The Fund’s broadly diversified portfolio does not ensure a profit or guarantee against loss. The Fund may invest up to 25% of its net assets (measured at the time of investment) in securities of companies headquartered in foreign countries, which may involve political, economic, currency, and other risks not encountered in U.S. investments. (Please see "Investing in Foreign Securities" in the prospectus.)

Sector weightings are determined using the Global Industry Classification Standard ("GICS"). GICS was developed by, and is the exclusive property of, Standard & Poor's Financial Services LLC ("S&P") and MSCI Inc. ("MSCI"). GICS is the trademark of S&P and MSCI. "Global Industry Classification Standard (GICS)" and "GICS Direct" are service marks of S&P and MSCI.

The Price-Earnings, or P/E, Ratio is calculated by dividing a company's share price by its trailing 12-month earnings-per-share (EPS). The Portfolio's P/E ratio calculation excludes cash holdings and companies with zero or negative earnings. The Price-to-Book, or P/B, Ratio is calculated by dividing a company's share price by its book value per share. Standard deviation is a statistical measure within which a client account’s total returns have varied over time. The greater the standard deviation, the greater a portfolio’s volatility.
Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. Source: MSCI.  MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein.  The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products.  This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. The Russell Microcap Index includes 1,000 of the smallest securities in the small-cap Russell 2000 Index, along with the next smallest eligible securities as determined by Russell. The Russell 2000 is an unmanaged, capitalization-weighted index of domestic small-cap stocks. It measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 index.  The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.

† Jim Stoeffel lead manager since 2015 (co-manager 2015), assistant Andrew Palen since 2024 

12/31/1991 12:00:00 AM

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