Royce Small-Cap Special Equity Fund (RYSEX, RSEFX, RSQCX, RSEIX)
3

At a Glance

Why invest in Small-Cap Special Equity?

  • Small-cap value fund that looks for conservatively managed companies with transparent accounting that have a viable niche or franchise whose stock can be bought below its economic value. Small-cap stocks' market caps are less than the largest stock in the Russell 2000® Index.
  • Seeks companies with superior balance sheets, sustainable returns on invested capital, and strong levels of free cash flow from operations, among other attributes.
  • Average annual total return of 8.5% since inception (5/1/98) through 9/30/24.

Morningstar Overall Rating TM

Based on risk-adjusted returns out of 445 Small Value Funds as of 9/30/24

As of 09/30/24

  • Small-Cap
    Value Approach
    $1.44B
    Avg. Market Cap
  • Low
    Volatility
    98%
    Active Share
  • Portfolio Manager
    Tenure
    26+
    Years on Fund†

Portfolio Management

"A deep understanding of accounting principles gives me a chance to get at the veracity of a company’s finances by scrutinizing the financial reports… I spend a lot of time going over the numbers. Frankly, I benefit, because I don’t believe everyone does this kind of work."
—Charlie Dreifus

Manager Tenure

Manager Tenure

Performance

Average Annual Total Returns (%)

Outperformed Russell 2000 Value for the 3-Year and since inception (05/01/98) periods as of 09/30/24. Outpaced Russell 2000 for the 3-Year and since inception (05/01/98) periods as of 09/30/24.
QTR YTD 1YR 3YR 5YR 10YR 15YR 20YR 25YR SINCE INCEPT.
(05/01/98)
Small-Cap Special Equity 4.82 3.3412.575.829.127.078.567.619.488.50
Russell 2000 Value 10.15 9.2225.883.779.298.229.807.749.107.82
Russell 2000 9.27 11.1726.761.849.398.7810.598.498.277.37

Annual Operating Expenses: 1.22

OCT YTD 1YR 3YR 5YR 10YR 15YR 20YR 25YR SINCE INCEPT.
(05/01/98)
Small-Cap Special Equity -1.82 1.4713.913.678.066.148.647.529.598.40
Russell 2000 Value -1.56 7.5131.771.958.427.3310.197.579.127.73
Russell 2000 -1.44 9.5634.07-0.058.507.9411.008.308.197.29

Annual Operating Expenses: 1.22

NOV YTD 1YR 3YR 5YR 10YR 15YR 20YR 25YR SINCE INCEPT.
(05/01/98)
Small-Cap Special Equity 3.58 5.1013.393.458.916.528.687.559.678.52
Russell 2000 N/A N/AN/AN/AN/AN/AN/AN/AN/AN/A
Russell 2000 Value N/A N/AN/AN/AN/AN/AN/AN/AN/AN/A

Annual Operating Expenses: 1.22

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. 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.

Rolling Returns

For 99% of the periods, 10-year average annual total returns were greater than 5%.

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% 43 22
> 5% and ≤ 10% 153 78
> 0% and ≤ 5% 1 1
≤ 0% 0 0

The Fund averaged a 8.8% return over all 197 10-year monthly rolling return periods.

Market Cycle Performance

The Fund outperformed the Russell 2000 Value from the 11/8/21 index peak through current (9/30/24).
Peak-Peak - 06/23/15 - 08/22/18
Small-Cap Special Equity27.6%
Russell 2000 Value39.0%

Peak-Peak - 08/22/18 - 11/08/21
Small-Cap Special Equity29.0%
Russell 2000 Value37.6%

Peak-Current - 11/08/21 - 09/30/24
Small-Cap Special Equity8.7%
Russell 2000 Value1.2%

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 05/01/98 and 09/30/24

Small-Cap Special Equity$86,258.69
Russell 2000 Value$73,103.39

Risk

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

The Fund has a low 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 2000 Value during all six downturns of 15% or more from the index’s prior historical high since the Fund’s inception.

Market Downturns (%)

DownMarketImg
Outperformed in 12 out of 19 down quarters.

Russell 2000 Value Down Quarters

QUARTER ENDRUSSELL 2000 VALUE (%)SMALL-CAP SPECIAL EQUITY (%)SPREAD (%)
06/30/24-3.6-3.5+0.1
09/30/23-3.0-4.0-1.0
03/31/23-0.7+3.4+4.1
09/30/22-4.6-3.6+1.0
06/30/22-15.3-7.6+7.7
03/31/22-2.4-5.7-3.3
09/30/21-3.0-1.1+1.9
03/31/20-35.7-24.6+11.1
09/30/19-0.6+0.1+0.7
12/31/18-18.7-9.8+8.9
03/31/18-2.6-5.0-2.4
03/31/17-0.1-0.3-0.2
09/30/15-10.7-11.3-0.6
06/30/15-1.2-2.9-1.7
09/30/14-8.6-7.1+1.5
06/30/12-3.0-4.4-1.4
09/30/11-21.5-14.7+6.8
06/30/11-2.6-2.4+0.2
06/30/10-10.6-9.8+0.8

Capture Ratios Fund's First Full Quarter (06/30/98) 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 produced lower volatility than the Russell 2000 Value Index.
Over the past 5 years, the Fund produced lower volatility than the Russell 2000 Value Index.
Over the past 3 years, the Fund outperformed the Russell 2000 Value Index with lower volatility.
From the Fund's inception, the Fund outperformed the Russell 2000 Value Index with lower volatility.

Go to Relative Risk Spectrum Tool

Morningstar Statistical Measures as of 09/30/24

The Fund beat the Russell 2000 Value and performed within the top 50% of small-cap objective funds on a risk-adjusted basis, as shown by its Sharpe ratio. In addition, the Fund produced lower volatility than the Russell 2000 Value and 90% of small-cap objective funds, as shown by its standard deviation.
The Fund beat the Russell 2000 Value and performed within the top 50% of small-cap objective funds on a risk-adjusted basis, as shown by its Sharpe ratio. In addition, the Fund produced lower volatility than the Russell 2000 Value and 90% of small-cap objective funds, as shown by its standard deviation.
The Fund beat the Russell 2000 Value on a risk-adjusted basis, as shown by its Sharpe ratio. In addition, the Fund produced lower volatility than the Russell 2000 Value and 90% of small-cap objective funds, as shown by its standard deviation.
Sharpe RatioStandard Deviation
Small-Cap Special Equity0.4115.58
Russell 2000 Value0.4020.95
Category Median0.4420.12
Best Decile Breakpoint0.5418.34

Category Median and Best Decile Breakpoint based on 432 small-cap objective funds (oldest class only) with at least ten years of history.
Sharpe Ratio Standard Deviation
Small-Cap Special Equity
Russell 2000 Value
Category Median
Best Quartile Breakpoint

Composition

Morningstar Style Map™as of 06/30/24

mstar-RYSEX

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

  RYSEX Russell 2000 Value
Average Market Cap
1.44B
2.13B
Active Share
98%
-
2023 Portfolio Turnover
14%
-
Weighted Average P/E,
13.6x
13.9x
Weighted Average P/B,
1.7x
1.4x
U.S. Investments (% of Net Assets)
75.7%
-
Non-U.S. Investments (% of Net Assets)
0.0%
-

Portfolio Allocation

  • Total
    Holdings
    32


SECTORS		RYSEX (%) RUSSELL
2000 VALUE (%)
Industrials
22.0
12.2
Consumer Discretionary
13.8
10.0
Materials
9.6
5.1
Consumer Staples
8.6
2.3
Information Technology
8.0
5.8
Financials
5.1
28.1
Communication Services
4.2
3.4
Real Estate
3.6
11.4
Energy
0.8
7.2
Health Care
-
9.3
Utilities
-
5.3
Cash and Cash Equivalents
24.3
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Mueller Industries
5.8
Standard Motor Products
4.8
Ennis
4.3
Vishay Intertechnology
4.3
TEGNA
4.2
United States Lime & Minerals
4.2
John B. Sanfilippo & Son
3.7
NVE Corporation
3.7
Ingles Markets Cl. A
3.6
Marcus & Millichap
3.6
Top 10 as % of Net Assets
42.2

SECTORS		RYSEX (%) RUSSELL
2000 VALUE (%)
Industrials
22.9
-
Consumer Discretionary
14.3
-
Materials
10.4
-
Consumer Staples
8.0
-
Information Technology
7.6
-
Financials
5.3
-
Communication Services
4.6
-
Real Estate
3.6
-
Energy
0.6
-
Cash and Cash Equivalents
22.7
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Mueller Industries
6.7
Standard Motor Products
4.9
United States Lime & Minerals
4.8
TEGNA
4.6
Vishay Intertechnology
4.0
Ennis
3.8
NVE Corporation
3.6
Marcus & Millichap
3.6
John B. Sanfilippo & Son
3.4
Sylvamo Corporation
3.3
Top 10 as % of Net Assets
42.7

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 0.2530 0.0012 0.6527 - 0.9069 16.95
12/14/22 12/15/22 12/15/22 0.1961 0.1970 1.5713 - 1.9644 15.95
12/15/21 12/16/21 12/16/21 0.2025 0.8576 2.0962 - 3.1563 18.66
12/09/20 12/10/20 12/10/20 0.2625 0.0058 0.4063 - 0.6746 18.18
12/11/19 12/12/19 12/12/19 0.2076 0.0021 1.8236 - 2.0333 17.52
12/12/18 12/13/18 12/13/18 0.2271 0.0105 2.0467 - 2.2843 18.01
12/13/17 12/14/17 12/14/17 0.1229 0.0430 1.7520 - 1.9179 21.29
12/14/16 12/15/16 12/15/16 0.2106 - 1.4903 - 1.7009 22.04
12/16/15 12/17/15 12/17/15 0.2393 - 1.8558 - 2.0951 17.94
12/16/14 12/17/14 12/17/14 0.1196 0.1069 2.1579 - 2.3844 22.40
12/04/13 12/05/13 12/05/13 0.0299 0.2421 1.9603 - 2.2323 24.14
12/27/12 12/28/12 12/28/12 0.0343 - - - 0.0343 20.73
12/05/12 12/06/12 12/06/12 0.4294 - 1.0981 - 1.5275 20.70
12/07/11 12/08/11 12/08/11 0.0932 - 1.0775 - 1.1707 19.43
12/08/10 12/09/10 12/09/10 0.0617 - - - 0.0617 20.68
12/08/09 12/09/09 12/09/09 0.0725 - - - 0.0725 16.95

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 0.22
Total annual Fund operating expenses 1.22

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 small-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 09/30/24, 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.)

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 2000 Value and Growth indices consist of the respective value and growth stocks within the Russell 2000 as determined by Russell Investments. 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.

† Managed by Charlie Dreifus since 1998, assistant Steven McBoyle since 2014, and assistant Tim Hipskind since 2024

5/1/1998 12:00:00 AM

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