(PUB) Investing 2016

6

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

Investment Style Equity

Historical Profile Return Risk Rating Average Low QQQQ Above Avg

6 9 6 6 6 3 3 3

20.0

Growth of $10,000

Investment Values of Fund Investment Values of Benchmark 1

15.0

Morningstar Pillars Process

10.0

∞ Positive ∞ Positive ∞ Positive ∞ Positive ¶ Neutral

Performance

People Parent

Performance Quartile (within Category)

( & & ( ) & * ) ) ) & 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 01-16 19.72 18.27 13.69 17.50 20.87 19.70 21.13 25.02 22.86 17.94 17.37 14.00 4.74 -19.62 28.38 19.61 0.08 15.36 29.36 1.09 -12.36 -3.18 -9.48 14.52 9.31 7.80 -4.89 5.58 -2.69 -5.16 -3.12 -4.89 3.54 -1.80 -0.75 17.38 1.91 4.55 -2.03 -0.64 -3.03 -12.60 -13.74 1.79 0.60 0.61 1.15 0.53 0.35 0.45 2.37 0.14 0.48 1.05 0.00 13.40 4.14 -20.77 27.85 19.26 -0.37 13.00 29.22 0.61 -13.40 -3.18

Price

History

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

NAV

Total Return % +/- Bmark 1 +/- Bmark 2 Income Return % Capital Return % Capital Gains $ Expense Ratio % Income Ratio % Turnover Rate % Net Assets $mil Total Rtn % Rank Cat Income $

Pillar Spectrum ∞ Positive

68

6

2

51

90

15

50

93

79

89

3

§ Negative

¶ Neutral

0.11 0.12 0.21 0.07 0.06 0.09 0.46 0.03 0.12 0.24 0.00 1.51 2.32 0.75 0.00 0.00 1.08 1.10 2.20 2.26 1.86 0.00

Performance 01-31-16 1st Qtr 2nd Qtr

. . . . . .

1.13 1.12 1.15 1.17 1.17 1.15 1.13 1.13 1.12 0.51 0.57 1.32 0.62 0.78 0.23 2.20 0.13 0.47

3rd Qtr

4th Qtr

Total

2011 2012 2013 2014 2015

5.65 -2.40 -14.73 13.83 0.08 10.91 -4.44 5.65 3.02 15.36 8.66 3.44 8.25 6.32 29.36 -0.76 0.93 -7.06 8.60 1.09 2.41 -2.86 -11.35 -0.62 -12.36

16

29

27

10

21

23

31

28

21

438

386

316

841 1,485 1,677 2,049 2,510 1,957 1,105 1,045

Rating and Risk Time Period Load-Adj Return %

Portfolio Analysis 12-31-15 Total Stocks: 43 Share change since 09-30-15

Morningstar Rtn vs Cat

Morningstar Risk vs Cat

Morningstar Risk-Adj Rating

Sector

YTD Ret % % Assets 1.06 9.61 -5.44 6.96 -10.53 5.64 17.93 4.90 -2.17 4.90 -3.19 4.87 -1.94 4.75 -10.58 4.31 -10.50 4.18 -8.31 3.67 -6.00 3.61 -5.06 3.16 4.76 3.03 10.53 2.59 -4.55 2.53 4.75 2.03 -10.62 1.87 8.10 1.83 -3.61 1.81

Trailing

Total Return%

+/- Bmark 1

+/- Bmark 2

%Rank Cat

Growth of $10,000

Y UniFirst Corp

Cnsmr Cyc Technology Cnsmr Cyc Cnsmr Cyc Cnsmr Cyc Basic Mat Cnsmr Cyc Cnsmr Cyc Cnsmr Def Technology Industrl

1 Yr 3 Yr 5 Yr

-11.22

3 Mo 6 Mo

-8.50 0.62 -2.31 -12.14 -0.23 -5.37 -11.22 -1.28 -10.55 2.09 -2.44 -9.22 5.21 -0.96 -5.69 5.99 1.98 -0.49 9.52 2.05 1.59

29 9,150 46 8,786 76 8,878 86 10,639 70 12,893 15 17,897 12 39,144

Y AVX Corp

-Avg QQ -Avg QQQ

2.09 5.21 5.99 8.14

-Avg

Y Bed Bath & Beyond Inc Y Children's Place Inc Y Meredith Corp Y Neenah Paper Inc T Scholastic Corp T Hubbell Inc Class B Y Weis Markets Inc Y Standard Motor Products I

Avg

1 Yr

Low QQQQQ

10 Yr Incept

+Avg

3 Yr Avg 5 Yr Avg 10 Yr Avg 15 Yr Avg

Other Measures

Standard Index

Best Fit Index

Alpha

-7.7 0.93

-4.5 0.94

Beta

Tax Analysis

Tax Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat

R-Squared

59

90

3 Yr (estimated) 5 Yr (estimated) 10 Yr (estimated)

-0.44 3.14 4.44

80 66 16

2.47 1.97 1.47

63 68 64

Teradyne Inc

Standard Deviation

13.34

Y Applied Industrial Techno

Industrl

Mean

2.09 0.22

Y Finish Line Inc

Cnsmr Cyc

Sharpe Ratio

Y EnerSys

Technology -13.41 2.66

Potential Capital Gain Exposure: 11% of assets

T Cal-Maine Foods Inc Y National Presto Industrie Y Minerals Technologies Inc T Park Electrochemical Corp Y Hawkins Inc

Cnsmr Def

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

Industrl

Basic Mat Basic Mat Technology Cnsmr Cyc

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.

Y Buckle Inc

Current Investment Style

Sector Weightings h Cyclical r BasicMat t CnsmrCyc y FinanSvcs u Real Est j Sensitive i CommSrvs o Energy p Industrl a Technlgy k Defensive s CnsmrDef d Hlthcare f Utilities

% of Stocks

Rel Bmark 1

Market Cap % Giant 0.0 Large 0.0 Mid 14.6 Small 49.8 Micro 35.7 Avg $mil: 1,481

Value Blend Growth

Large Mid Small

61.04 1.07 11.41 3.54 48.07 4.83 0.99 0.04 0.57 0.03 30.27 1.16 0.00 0.00 0.00 0.00 13.22 1.15 17.05 1.68 8.68 0.52 8.68 2.05 0.00 0.00 0.00 0.00

Value Measures

Rel Category

Price/Earnings 14.52

0.95 1.22 1.14 1.35 1.04 0.95 1.17 3.26 -1.81 0.68

Price/Book Price/Sales

1.68 0.89

Price/Cash Flow 9.24 Dividend Yield % 2.25

Growth Measures

% Rel Category

Long-Term Erngs 9.88

Book Value

4.93 3.96 3.20

Composition - Net

Sales

Cash 1.9 Stocks 98.1 Bonds 0.0 Other 0.0 Foreign 0.0 (% of Stock)

Address:

Royce Fund

Minimum Purchase: Min Auto Inv Plan:

$2000 $1000

Add: $50 IRA: $1000

Cash Flow

New York, NY 10151

Add: $50

Historical Erngs 2.93

800-221-4268

Sales Fees:

No-load, 1.00%R

Web Address:

www.roycefunds.com

Management Fee:

1.00% mx./0.85% mn. Mgt:0.98% Dist:0.00%

Profitability

%

Inception:

05-01-98

Actual Fees:

Return on Equity Return on Assets

14.40

Advisor:

Royce & Associates, LLC

Expense Projections: Income Distribution:

3Yr:$356 5Yr:$617 10Yr:$1363

8.56 7.39

Subadvisor:

None

Annually

Net Margin

A

ß ® Mutual Funds

©2016Morningstar, Inc.All rights reserved. The information herein is not represented orwarranted to be accurate, complete or timely. Past performance is no guarantee of future results.Access updated reports at www.morningstar.com . To order reprints, email reprints@morningstar.com