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Data through January 31, 2016 FINRA members: For internal or institutional use only.
Royce Special Equity Invmt Ticker
RYSEX
Yield
1.2%
Total Assets
$1,402 mil
Mstar Category
Small Value
Benchmark 1: Russell 2000 Value TR USD
Benchmark 2: S&P 500 TR USD
Morningstar Analyst Rating 01-15-16
Œ
Morningstar Pillars
Process ∞ Positive
Performance ∞ Positive
People ∞ Positive
Parent ∞ Positive
Price ¶ Neutral
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which its
analysts believe lead to funds that are more likely to outperform over the
long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ ‰ Á
Pillar Spectrum
∞ Positive § Negative ¶ Neutral
10.0
15.0
20.0
Historical Profile
Return
Risk
Rating
Average
Low
QQQQ
Above Avg
6 9 6 6 6 3 3 3 Investment Style
Equity
Growth of $10,000
Investment Values of
Fund
Investment Values of
Benchmark 1
( & & ( ) & * ) ) ) & Performance Quartile
(within Category)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 01-16 History
19.72 18.27 13.69 17.50 20.87 19.70 21.13 25.02 22.86 17.94 17.37 NAV
14.00 4.74 -19.62 28.38 19.61 0.08 15.36 29.36 1.09 -12.36 -3.18 Total Return %
-9.48 14.52 9.31 7.80 -4.89 5.58 -2.69 -5.16 -3.12 -4.89 3.54 +/- Bmark 1
-1.80 -0.75 17.38 1.91 4.55 -2.03 -0.64 -3.03 -12.60 -13.74 1.79 +/- Bmark 2
0.60 0.61 1.15 0.53 0.35 0.45 2.37 0.14 0.48 1.05 0.00 Income Return %
13.40 4.14 -20.77 27.85 19.26 -0.37 13.00 29.22 0.61 -13.40 -3.18 Capital Return %
68 6 2 51 90 15 50 93 79 89 3 Total Rtn % Rank Cat
0.11 0.12 0.21 0.07 0.06 0.09 0.46 0.03 0.12 0.24 0.00 Income $
1.51 2.32 0.75 0.00 0.00 1.08 1.10 2.20 2.26 1.86 0.00 Capital Gains $
1.13 1.12 1.15 1.17 1.17 1.15 1.13 1.13 1.12 . . Expense Ratio %
0.51 0.57 1.32 0.62 0.78 0.23 2.20 0.13 0.47 . . Income Ratio %
16 29 27 10 21 23 31 28 21 . . Turnover Rate %
438 386 316 841 1,485 1,677 2,049 2,510 1,957 1,105 1,045 Net Assets $mil
Performance 01-31-16
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
2011 5.65 -2.40 -14.73 13.83 0.08
2012 10.91 -4.44 5.65 3.02 15.36
2013 8.66 3.44 8.25 6.32 29.36
2014 -0.76 0.93 -7.06 8.60 1.09
2015 2.41 -2.86 -11.35 -0.62 -12.36
Trailing Total
Return%
+/- Bmark
1
+/- Bmark
2
%Rank
Cat
Growth of
$10,000
3 Mo -8.50 0.62 -2.31 29 9,150
6 Mo -12.14 -0.23 -5.37 46 8,786
1 Yr -11.22 -1.28 -10.55 76 8,878
3 Yr Avg 2.09 -2.44 -9.22 86 10,639
5 Yr Avg 5.21 -0.96 -5.69 70 12,893
10 Yr Avg 5.99 1.98 -0.49 15 17,897
15 Yr Avg 9.52 2.05 1.59 12 39,144
Tax Analysis Tax Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated) -0.44 80 2.47 63
5 Yr (estimated) 3.14 66 1.97 68
10 Yr (estimated) 4.44 16 1.47 64
Potential Capital Gain Exposure: 11% of assets
Rating and Risk
Time
Period
Load-Adj
Return %
Morningstar
Rtn vs Cat
Morningstar
Risk vs Cat
Morningstar
Risk-Adj Rating
1 Yr -11.22
3 Yr 2.09 -Avg -Avg QQ
5 Yr 5.21 Avg -Avg QQQ
10 Yr 5.99 +Avg Low QQQQQ
Incept 8.14
Other Measures Standard Index Best Fit Index
Alpha -7.7 -4.5
Beta 0.93 0.94
R-Squared 59 90
Standard Deviation 13.34
Mean 2.09
Sharpe Ratio 0.22
Portfolio Analysis 12-31-15
Total Stocks: 43
Share change since 09-30-15 Sector YTD Ret % % Assets
YUniFirst Corp Cnsmr Cyc 1.06 9.61
YAVX Corp Technology -5.44 6.96
YBed Bath & Beyond Inc Cnsmr Cyc -10.53 5.64
YChildren's Place Inc Cnsmr Cyc 17.93 4.90
YMeredith Corp Cnsmr Cyc -2.17 4.90
YNeenah Paper Inc Basic Mat -3.19 4.87
YStandard Motor Products I Cnsmr Cyc -1.94 4.75
TScholastic Corp Cnsmr Cyc -10.58 4.31
THubbell Inc Class B Industrl -10.50 4.18
YWeis Markets Inc Cnsmr Def -8.31 3.67
Teradyne Inc Technology -6.00 3.61
YApplied Industrial Techno Industrl -5.06 3.16
YFinish Line Inc Cnsmr Cyc 4.76 3.03
YEnerSys Technology -13.41 2.66
TCal-Maine Foods Inc Cnsmr Def 10.53 2.59
YNational Presto Industrie Industrl -4.55 2.53
YHawkins Inc Basic Mat 4.75 2.03
YMinerals Technologies Inc Basic Mat -10.62 1.87
TPark Electrochemical Corp Technology 8.10 1.83
YBuckle Inc Cnsmr Cyc -3.61 1.81
Current Investment Style
Large Mid Small
Value Blend Growth Market Cap %
Giant 0.0
Large 0.0
Mid 14.6
Small 49.8
Micro 35.7
Avg $mil:
1,481
Value Measures Rel Category
Price/Earnings 14.52 0.95
Price/Book 1.68 1.22
Price/Sales 0.89 1.14
Price/Cash Flow 9.24 1.35
Dividend Yield % 2.25 1.04
Growth Measures % Rel Category
Long-Term Erngs 9.88 0.95
Book Value 4.93 1.17
Sales 3.96 3.26
Cash Flow 3.20 -1.81
Historical Erngs 2.93 0.68
Profitability %
Return on Equity 14.40
Return on Assets 8.56
Net Margin 7.39
Sector
Weightings
% of
Stocks
Rel
Bmark 1
h Cyclical 61.04 1.07
r BasicMat 11.41 3.54
t CnsmrCyc 48.07 4.83
y FinanSvcs 0.99 0.04
u Real Est 0.57 0.03
j Sensitive 30.27 1.16
i CommSrvs 0.00 0.00
o Energy 0.00 0.00
p Industrl 13.22 1.15
a Technlgy 17.05 1.68
k Defensive 8.68 0.52
s CnsmrDef 8.68 2.05
d Hlthcare 0.00 0.00
f Utilities 0.00 0.00
Composition - Net
Cash 1.9
Stocks 98.1
Bonds 0.0
Other 0.0
Foreign 0.0
(% of Stock)
Morningstar's Take by Alex Bryan 01-15-16
Royce Special Equity’s robust investment process and
record of success, particularly during market downturns,
support its Morningstar Analyst Rating of Gold.
Charles Dreifus and comanager Steven McBoyle
target stocks with high returns on capital, strong balance
sheets, attractive valuations, and conservative
accounting practices. The managers’ preference for
profitable, conservatively managed businesses is evident
in the portfolio’s high average return on invested capital
and low debt/capital relative to the Russell 2000 Index.
They won't pay up for future earnings growth. Instead,
they look for companies that are generating attractive
earnings before interest and taxes relative to enterprise
value, using the lower of trailing one-year EBIT or
estimated EBIT over the next year. They aren’t afraid to
make concentrated bets and will allow the portfolio’s
cash balance to climb when they can’t find bargains.
Because the fund sticks to highly profitable and
conservatively financed businesses and often carries
sizable cash reserves, it should lag its small-cap peers
during strong bull markets, but weather market
downturns better than most. Over the past 15 years, the
fund lost considerably less than the Russell 2000 Index
during market downturns and exhibited much lower
volatility, despite its concentrated portfolio.
Yet, in 2015 the fund lost 12.4% while the Russell
2000 Value Index was down 7.5%. This unexpected
underperformance was partially due to the fund’s relative
lack of financial stocks and large helpings of consumer
cyclical and materials sector shares. Stock selection also
detracted from performance. Bed Bath & Beyond,
Waddell & Reed Financial, Buckle, and Finish Line each
hurt returns. However, Dreifus’s long-term record
suggests that this year was atypical.
After losing assets over the past few years, the
managers reopened the fund to new investors at the
beginning of 2016. There are certainly capacity
constraints in a small-cap portfolio as concentrated as
this one, but the managers' contrarian, low-turnover style
can accommodate a larger asset base.
Address: Royce Fund Minimum Purchase: $2000 Add: $50 IRA: $1000
New York, NY 10151 Min Auto Inv Plan: $1000 Add: $50
800-221-4268 Sales Fees: No-load, 1.00%R
Web Address: Management Fee: 1.00% mx./0.85% mn.
Inception: 05-01-98 Actual Fees: Mgt:0.98% Dist:0.00%
Advisor: Royce & Associates, LLC Expense Projections: 3Yr:$356 5Yr:$617 10Yr:$1363
Subadvisor: None Income Distribution: Annually
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