Now two years into the COVID-19 pandemic, we face a radically changed world from before the onset of this global public health crisis. The human toll, both in terms of the loss of life and the lack of any sense of normalcy, has been extraordinary, to say the least. That said, there is a growing sense of optimism that, through an unprecedented global vaccination initiative and the natural degradation in the severity of the virus, the worst may be behind us. Perhaps the transition from pandemic to endemic has at last begun, and we can look forward to reestablishing our routines as we return to normal activities, including our vitally important social and community engagements.

I continue to be very proud of the way that Royce has handled the challenges COVID presented and am pleased to report several important initiatives over the past year that I believe are adding meaningfully to the outcomes we provide our constituents. Royce informally reopened our offices on 9/13/21 and returned to a more normal schedule a month later in October, after nearly eighteen months of our employees working remotely. Those months taught us a great deal about the evolving possibilities of our work environment, in particular how to maximize productivity and best serve our clients. I believe strongly that a hybrid approach, implemented over time, best allows our firm to continue executing at the highest level of business potential and drive the best outcomes for our investors and clients. The creativity, idea sharing, and learning that come with both purposeful and coincidental contact in an office setting remain vitally important and serve as a guidepost as we balance in office and remote work schedules going forward.

The strength of our firm and our competitive advantage has, and always will, rest on the quality, depth, and commitment of our people. On that basis, I am thrilled to report that we continued to make substantial investments across our organization over the past year, with particular focus on our investment and sales and client service teams. In fact, these past two years have seen us make the most significant additions to our investment capabilities in Royce’s history, reinforcing our longstanding objective to have the deepest and most experienced team of portfolio managers and analysts focusing exclusively on the small-cap asset class, both in the U.S. and abroad. Over the past year, our continued emphasis on expanding our investment teams led to several important additions that touch many of our core strategies:

• Kavitha Venkatraman joined Royce from Alpine Peaks as an Assistant Portfolio Manager working on the Royce Opportunity Strategy
• Joe Hintz came aboard from American Century Investments as a Senior Analyst working on the Royce Total Return Strategy
• Ronak Jain began working with us from Axiom Investors as a Senior Analyst working on the Royce Smaller Companies Growth Strategy
• Tim Hipskind joined from CFRA Research working on the Royce Special Equity strategy
• Yutetsu Ametani signed on as an analyst from Barings Asset Management to work on the Royce International Premier strategy
• Maureen McCarthy began working with us from ISS as a dedicated ESG analyst Finally, and most recently, Janet Lewis joined us from Macquarie Group as a generalist research analyst who will be working closely with Chuck Royce on the strategies he leads.

Most recently, we were excited to announce that Lauren Romeo and Steven McBoyle will succeed Chuck Royce as Co-Lead Portfolio Managers on the team that manages Royce Premier Fund and Royce’s other portfolios that follow the same Strategy, effective on 4/1/22. Chuck will continue on the Strategy as Portfolio Manager. In addition, Andrew Palen, who works as an Analyst on the Strategy, has been elevated to Assistant Portfolio Manager. Our firm has been executing a methodical, multi-year succession planning roadmap for our strategies that provides for a multi-generational approach, supporting consistent implementation of our investment disciplines over time. We made a similar move in May 2021, when Miles Lewis became lead portfolio manager on Royce Total Return Fund and related Strategies after joining Royce in May 2020 as portfolio manager on this Strategy. Our Sales and Client Service team is another vital part of our firm. Under the leadership of Lindsay Cobb and Steve Clark, our Co-Heads of Distribution, we rounded out our sales team with several important additions: Tristan Camp is a Global Portfolio Specialist based in London, Michael Kaufmann joined as an Institutional Portfolio Specialist and will work alongside Regional Portfolio Specialist, Jared Overlee, covering our Eastern region. Michael Komori is an Institutional Portfolio Specialist and, along with Anthony Jennings, who also joined Royce in 2022 as a Regional Investment Specialist, will cover the Western region. (Steve Clark and Justin Tapper, Regional Portfolio Specialist, continue to service the Midwest.

Our status as an autonomous Specialist Investment Manager (SIMs) within the Franklin Templeton family continues to go as well as we could have hoped. Franklin is an important resource and supportive partner, and its global distribution team is providing increased reach for our products as more and more clients across the globe are looking to, or considering, Royce to meet their small-cap allocation needs. We now sub-advise portfolios for clients in the U.K., Europe, Japan, Australia, and Canada.

We are also benefiting from Franklin’s deep institutional resources across other important areas—including ESG, diversity & inclusion, and cybersecurity. Equally important, Franklin recognizes the critical importance of our unique brand in the marketplace and the value our clients place on our intellectual and investment independence.

Finally, I want to reiterate how highly we value the trust and partnership we have with our clients and reaffirm our commitment to the highest standards of investment excellence and transparency during these extraordinary times. Please do not hesitate to reach out to us with any questions. We look forward to continuing to serve your investment needs in the global small cap asset class.

Most importantly, we wish you and your families all the best in the days and weeks ahead.

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