UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-04875
Name of Registrant: Royce Value Trust, Inc.
Address of Registrant: 745 Fifth Avenue
New York, NY 10151
Name and address of agent for service: John E. Denneen, Esquire 745 Fifth Avenue New York, NY 10151 |
Registrant's telephone number, including area code: (212) 508-4500
Date of fiscal year end: December 31
Date of reporting period: January 1, 2011 December 31, 2011
Item 1. Reports to Shareholders.
Royce Value Trust Royce Micro-Cap Trust Royce Focus Trust |
ANNUAL |
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REVIEW AND REPORT | ||||||
TO STOCKHOLDERS |
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A Few Words on Closed-End Funds |
Royce & Associates, LLC manages three closed-end funds: Royce Value Trust, the first small-cap value
closed-end fund offering; Royce Micro-Cap Trust, the only micro-cap closed-end fund; and Royce Focus
Trust, a closed-end fund that invests in a limited number of primarily small-cap companies. |
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A closed-end fund is an investment company whose shares are listed and traded on a stock exchange. Like all investment
companies, including open-end mutual funds, the assets of a closed-end fund are professionally managed in accordance
with the investment objectives and policies approved by the Funds Board of Directors. A closed-end fund raises cash for
investment by issuing a fixed number of shares through initial and other public offerings that may include shelf offerings
and periodic rights offerings. Proceeds from the offerings are invested in an actively managed portfolio of securities.
Investors wanting to buy or sell shares of a publicly traded closed-end fund after the offerings must do so on a stock
exchange, as with any publicly traded stock. This is in contrast to open-end mutual funds, in which the fund sells and
redeems its shares on a continuous basis. |
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A Closed-End Fund Offers Several Distinct Advantages Not Available from an Open-End Fund Structure
• | Since a closed-end fund does not issue redeemable
securities or offer its securities on a continuous basis, it
does not need to liquidate securities or hold uninvested
assets to meet investor demands for cash redemptions, as
an open-end fund must. |
• | In a closed-end fund, not having to meet investor
redemption requests or invest at inopportune times is ideal
for value managers who attempt to buy stocks when prices
are depressed and sell securities when prices are high. |
• | A closed-end fund may invest more freely in less liquid
portfolio securities because it is not subject to potential
stockholder redemption demands. This is particularly
beneficial for Royce-managed closed-end funds, which
invest in small- and micro-cap securities. |
• | The fixed capital structure allows permanent leverage to be
employed as a means to enhance capital appreciation potential. |
• | Unlike Royces open-end funds, our closed-end funds are
able to distribute capital gains on a quarterly basis. The
Funds resumed the quarterly distribution policies for their
common stock, at a 5% annual rate, in March 2011.
Please see page 18-20 for more details. |
We believe that the closed-end fund structure is very suitable
for the long-term investor who understands the benefits of a stable pool of capital. |
Why Dividend Reinvestment Is Important | ||
A very important component of an investors total return comes from the reinvestment of distributions. By reinvesting
distributions, our investors can maintain an undiluted investment in a Fund. To get a fair idea of the impact of reinvested
distributions, please see the charts on pages 13, 15 and 17. For additional information on the Funds Distribution
Reinvestment and Cash Purchase Options and the benefits for stockholders, please see page 20 or visit our website at www.roycefunds.com. |
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This page is not part of the 2011 Annual Report to Stockholders |
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Table of Contents |
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Annual Review |
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64 |
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11 |
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For more than 35 years, we have used a value approach to invest in small-cap securities. We focus primarily on the quality of a companys balance sheet, its ability to generate free cash flow and other measures of profitability or sound financial condition. We then use these factors to assess the companys current worth, basing the assessment on either what we believe a knowledgeable buyer might pay to acquire the entire company, or what we think the value of the company should be in the stock market.
This page is not part of the 2011 Annual Report to Stockholders | 1
Performance Table | |
NAV Average Annual Total Returns | Through December 31, 2011 |
Royce | Royce | Royce | Russell | |||||||||||||
Value Trust | Micro-Cap Trust | Focus Trust | 2000 Index | |||||||||||||
One-Year |
-10.06 | % | -7.69 | % | -10.51 | % | -4.18 | % | ||||||||
Three-Year |
19.21 | 20.22 | 18.83 | 15.63 | ||||||||||||
Five-Year |
-0.65 | -0.94 | 1.53 | 0.15 | ||||||||||||
10-Year |
6.10 | 7.09 | 9.51 | 5.62 | ||||||||||||
15-Year |
8.86 | 9.18 | 9.74 | 6.25 | ||||||||||||
20-Year |
10.24 | n.a. | n.a. | 8.52 | ||||||||||||
25-Year |
10.17 | n.a. | n.a. | 8.68 | ||||||||||||
Since Inception |
10.13 | 10.05 | 9.95 | n.a. | ||||||||||||
Inception Date |
11/26/86 | 12/14/93 | 11/1/96 1 | n.a. | ||||||||||||
1 | Date Royce & Associates, LLC assumed investment management responsibility for the Fund. |
2 | This page is not part of the 2011 Annual Report to Stockholders |
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Capitulation |
A few years ago, we wrote that markets resemble Tolstoys families: All the happy ones are
alike, and all the unhappy ones are unhappy in their own way. The past calendar years
stock market results, which place it mostly, but not entirely, in the unhappy category,
offer a striking example. One only has to compare it to recent years of poor performance
to see its singularity. In 2008, stock markets across the globe cratered as part of a global
financial crisis that saw once-mighty titans of Wall Street collapse. The crisis also had
the effect of worsening both a correction in housing prices and a worldwide recession.
(Of course, much of the globes current difficulties in capital markets and economies
can be traced back to this event.) The crisis saw a widespread exit from stocks, with
major indexes in the U.S. and elsewhere posting sizable double-digit losses for the year.
Earlier in the decade, 2002 saw mostly negative results as the exploding Internet Bubble
and the lingering effects of the events of 9/11 led many investors to sell equities. Results
were mostly negative, but within a much larger range, depending on ones
exposure to Technology and related areas. We suspect that, unlike those of 2002 and 2008, the stock market of 2011 will be remembered not for cataclysmic events or the severity of its losses, which werent nearly as bad as one might think, but for its daily drama of extreme volatility. The days between late April and the end of the year saw increasing numbers of investors opting to get out of equities, and stay out, which resulted in a large-scale capitulation that rivaled anything we have |
We suspect that, unlike those of 2002
and 2008, the stock market of 2011
will be remembered not for cataclysmic
events or the severity of its losses,
which werent nearly as bad as one
might think, but for its daily drama of
extreme volatility. |
This page is not part of the 2011 Annual Report to Stockholders | 3 |
Charles M. Royce, President | |
When used in a financial context, the technical definition of correlation is a statistical measure of how two securities move in relation to one another. Recently, this typically obscure data point has moved into the lexicon of mainstream investors as it aptly describes the sort of stock market returns that we have experienced over the last few years. That is, returns have been highly correlated as the majority of stocks, irrespective of sector, industry, market cap, nation of origin or ostensible investment profile (i.e., value or growth), have either done well, as in 2009 and 2010, or poorly, as they did in 2008 and 2011. Why is correlation important? Correlated markets present definite challenges for disciplined contrarian investors like ourselves. There is simply not much incremental reward for the contrary stance when share prices are rising or falling more or less indiscriminately throughout the worlds stock markets. Our practice is to go against the grain by investing in companies or industries that most investors are neglecting while we ignore trendy or fast-growing segments of the market that others are championing. Our fundamental analysis seeks to identify discounts |
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Continued on page 6... | |
Letter to Our Stockholders
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seen during other recent bearish periods, when results were far, far worse. This last
point made the past year as fascinating as it was frustrating. Investors fled or avoided
stocks for many reasons—because they lacked confidence in political leaders both here
at home and abroad to deal effectively with the challenges of stimulating the economy
and responsibly coping with enormous debt; because they couldnt bear the barrage of
headlines with their seemingly endless parade of bad news; and because they simply ran out
of patience with the daily jumps and dives of a market struggling to make sense of it all.
Absent from this list is the state of the companies themselves. We would humbly suggest that the most relevant reasons why one would choose to invest in a business—its merits as a company, its prospects and the relationship these have to its stock price—were largely, if not wholly neglected through the markets most tumultuous months. Again, this was unlike 2002, which for many Internet companies was an Emperors New Clothes moment, and 2008, when the threat was systemic and fundamentals were, at least at the most tense moments, irrelevant. The disconnect between stock prices and fundamentals for many companies, including many small-caps, remains wide as we enter 2012. While this created no end of short-term disappointments for us—2011 being one of the most challenging years for The Royce Funds in our history—it has also provided ample seeding for what we hope will be a bountiful harvest in the years to come. Following a recap of 2011 performance, we will offer a more detailed explanation of our optimism below. Correlation Perhaps the most notable thing about 2011 was how little returns shifted in the U.S. markets. High volatility was the order of the day through much of the year across most of the globe and was very much in evidence between August and the end of December. However, by the time the year ended, the major U.S. indexes posted returns that felt less like a bang than a whimper. After a solidly positive first half, the small-cap Russell 2000 Index came through the wild second half with a loss of 9.8%. For the same period, its large-cap counterparts, the Russell 1000 and S&P 500 Indexes, lost less, down 4.6% and 3.7%, respectively, while the more tech-laden Nasdaq Composite declined 6.1%. These single-digit declines belie the tortuous road of the years last six months. During the third quarter, each of the aforementioned indexes suffered significant double-digit losses, with the Russell 2000 down 21.9%, the Russell 1000 falling 14.7%, the S&P 500 off 13.9% and the Nasdaq losing 12.9%. Fears of European defaults and the possibility of a double-dip recession in the U.S. were factors, though U.S. and European investors may well have been more motivated to sell based on their utter lack of confidence in the abilities of the developed worlds political leaders to meet the challenges of economic stagnation and staggering government debt. When some progress seemed to be made on these fronts, share prices rebounded through much of the fourth quarter. The bull |
4 | This page is not part of the 2011 Annual Report to Stockholders |
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The ongoing possibility of government defaults in Portugal, Italy, Ireland, Greece, and Spain, as well as the resulting economic slowdown that gripped much of Europe, continued to weigh heavily on the minds of investors in the second half. This anxiety was reflected in the larger calendar-year losses for global, international and European indexes. The Russell Global ex-U.S. Small Cap Index finished the year down 18.7%, behind its large-cap sibling, the Russell Global ex-U.S. Large Cap Index, which declined 13.8%. Each enjoyed a modestly positive first half, up 0.8% and 4.1%, respectively, before succumbing to the same woes that afflicted the U.S. markets in the third quarter. The Russell Global ex-U.S. Small Cap was down 19.4% and its large-cap equivalent lost 20.1% in the third quarter. So far, so close to their U.S. compeers. Yet the non-U.S. markets lagged behind considerably in the fourth quarter, with the Russell Global ex-U.S. Small Cap gaining a paltry 0.1% and its large-cap sibling climbing 3.6%. It remains to be seen whether this was a temporary phenomenon, a sign that the global economy outside the U.S. remains weak, or was evidence that the U.S. economy, for all its struggles, remains fundamentally strong on both an absolute and relative basis. |
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U.S. mid-cap stocks acquitted themselves well enough, though they did not lead the market in the second half as they did in the first, when the Russell Midcap Index gained 8.1%. The mid-cap index slid 18.9% in the third quarter before rebounding 12.3% in the fourth. For the year as a whole, the Russell Midcap was down 1.6%. As measured by the Russell Microcap Index, domestic micro-cap stocks continued to struggle, which was unsurprising in a market that saw investors growing less and less comfortable with risk through the end of September. After finishing the first half with a 3.1% gain, the microcap index declined 22.7% in the third quarter. So while its fourth-quarter gain of 13.8% was strong, it was not enough to shore up earlier losses. The Russell Microcap Index closed out 2011 with a 9.3% loss. |
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This page is not part of the 2011 Annual Report to Stockholders | 5
when intrinsic value becomes meaningfully detached from stock prices. In general, we look for well- managed businesses with pristine financial profiles and histories of high returns on invested capital that are attractively priced on an absolute basis. To find these attributes in common often means that a company has disappointed a set of shareholders for any number of reasons such as poor management execution, challenging business conditions, increased competition or earnings misses. | |
While still in an environment that offers plenty of opportunity to locate these kinds of companies, often in industries that are falling out of favor and/or are nearing the bottom of a business cycle, our efforts are not being rewarded as distinctly. Markets where correlation is more historically normal often see us enjoying the fruits of earlier contrarian investments that fit the profile we described. This combination of reaping the benefits of previous efforts while repositioning for the future has historically led to long-term performance differentiation versus both small-cap indexes and peers. Yet a correlated market can constrict both kinds of opportunity. |
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There are two other, related challenges: Highly correlated up markets tend to reward passively managed index funds and ETFs (Exchange Traded Funds) because of their inherently lower fee structure and fully invested status. Correlated downturns can also foster greater demand for these same vehicles as investors become frustrated |
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Continued on page 8... | |
Letter to Our Stockholders
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Consternation Loss unfortunately looms rather large over this years Review and Report. We were disappointed that our closed-end portfolios did not do better, especially in a year that saw mostly poor results for smaller companies. For decades, we have made risk management a central part of what we do here at Royce, and in 2011 we did not meet that challenge successfully. So while we are encouraged by the large number of opportunities that we sought to take advantage of throughout the year, the sting of a poor showing will remain sharp until performance improves. Net losses were most significant in three sectors: Materials companies, particularly those in the metals & mining industry, were hurt by volatile gold and silver prices. The Financials sectors net losses came mostly from holdings in the capital markets group, including several asset management stocks, while many Information Technology companies failed to rebound in accordance with our expectations. Finally, results for Royce Value Trust and Royce Focus Trust, portfolios with greater exposure to non-U.S. stocks, suffered as both European and Asian markets posted more substantial losses than those in the U.S. |
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2011 NAV TOTAL RETURNS FOR THE ROYCE FUNDS VS. RUSSELL 2000 as of 12/31/11 | |
Even as we grapple with the years disappointments, we were struck by the inconsistent,
decidedly nonlinear direction of average annual total returns for the Funds and for the
major equity indexes over longer-term periods. The one- and five-year returns were low
to negative, while the three-year numbers were terrific. The difference between the three- and five-year results is attributable to the former period spanning all of the recovery that
ran from March 9, 2009 through April 29, 2011, along with just the tail end of the
2008 crisis and the volatile market of the last seven months of 2011. The five-year period
encompassed all of these events as well as the low returns of 2007 and the deep declines
of 2008. Most interesting to us is the 10-year period ended December 31, 2011, which
includes the full peak-to-peak cycle that ran from July 13, 2007 through April 29, 2011, |
6 | This page is not part of the 2011 Annual Report to Stockholders |
as well as the bulk of the previous cycle, which began on March 9, 2000 and lasted until
July 13, 2007. This cycle includes, then, a large part of one major market dislocation—the bursting Internet bubble—and the bear market that was intensified by the global
financial crisis in the fall of 2008. Even with these difficulties, small-cap results were
solid for the Russell 2000 and strong to solid for our closed-end portfolios. Each of our
closed-end funds outpaced the small-cap index on an NAV (net asset value) basis for the
10-year period ended December 31, 2011. Contention As we take the measure of the micro-cap, small-cap and mid-cap universe, we like much of what we see. We remain disciplined, bottom-up stock-pickers with a time horizon measured in years, so our sights are trained squarely on the long run. From that vantage point, we see a strong case to be made for investing in equities. What has gotten lost in all of the fiscal worry and political melodrama of the last couple of years is the fact that many companies across the globe, and certainly here in the U.S., successfully navigated the recession and have been effectively managing their way through the current slow-growth economy. The overall condition of corporate balance sheets and cash flows—two key metrics in our security analysis process—is excellent. So we expect that as the economy continues to grow and political leaders finally begin to implement workable policies, more investors will begin to notice that fundamentals are strong throughout the equity world, which should help to usher in a solid decade for stocks, one that we suspect will feature frequent leadership rotation between asset classes and between higher quality and more speculative stocks. In our estimation, small-caps look very well-positioned to bounce back strong as part of a general upward move for equities. More specifically, some recent research has shown that high-quality small-caps, as measured by returns on invested capital (ROIC), are not only cheap on an absolute basis, but relative to their large-cap counterparts as well. There has been a lot of recent analysis devoted to showing that small-caps are statistically more expensive than large-caps, yet many of the companies that have been drawing our interest are not. It comes as no surprise, then, that we think this is a very opportune time for active small-cap management. Historically, when returns are both highly correlated and underwhelming, inefficiencies develop that we seek to use to our long-term advantage. We are confident that active small-cap managers can generate satisfactory absolute results when returns begin to differentiate again. As we detailed in a research paper on the importance of active small-cap management, consistency, discipline and a long-term investment horizon are critical to realizing the goal of strong absolute long-term results that, as a byproduct of that effort, have also beaten small-cap benchmarks. The last several years have certainly underscored the poor track record of predictions for markets and economies, but as equity returns become less closely correlated, we see the potential for active and disciplined small-cap management to succeed. |
What has gotten lost in all of the fiscal worry and political melodrama of the last couple of years is the fact that many companies across the globe, and certainly here in the U.S., successfully navigated the recession and have been effectively managing their way through the current slow-growth economy. The overall condition of corporate balance sheets and cash flows—two key metrics in our security analysis process—is excellent. |
This page is not part of the 2011 Annual Report to Stockholders | 7 |
with mounting losses. In addition, investors, losing sight of the long view, also tend to lose their appetite for actively managed products when short-term performance differentiation is diminished. |
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Unsurprisingly, then, a correlated market usually indicates a low tolerance for risk. While this can help over the long run—the rampant selling during the last seven months of 2011 created as large a set of purchase opportunities as weve seen in nearly three years— it also equates to ample levels of emotional and undifferentiated selling, which hinders more established positions from rising to price levels that our analysis indicates they are capable of attaining. |
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Throughout much of 2011, we found ourselves building existing positions and revisiting old favorites at least as frequently as investing in new companies. In all cases, our purchases comprised high-conviction ideas as we sought to ultimately tap the inevitable differentiation that occurs between corporate performance and correlated investor sentiment. While not necessarily rewarding in the short run, taking advantage of such mispricings remains the best way we know of building strong, long-term performance. |
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Letter to Our Stockholders
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Conclusion This is the environment for which we have been preparing. We invested in 2011 in much the same way that we have since 1972—with a disciplined, long-term approach that searches far and wide for what we deem are attractive prices for great companies. Historically, we have sought to use volatility as part of our arsenal of tactics. Highly volatile markets tend to create even greater opportunities because they drive share prices lower, and they do so with little or no regard for a businesss fundamentals. While this helped to create a host of short-term disappointments last year, at the same time it presented us with a number of what we believe are very promising long-term opportunities. It is also important to point out that, though daily volatility was very high, monthly returns in 2011 were not as wildly out of sync with other years as the day-to-day drama might lead one to believe. We think that we are in a new era of high daily volatility that investors will better adjust to in 2012 and beyond. More important is our belief that fundamentals are much better than the headlines; that quality will continue to be an important driver of long-term outperformance; and that non-U.S. small-caps will enjoy improved performance in the years to come. Sincerely, |
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Charles M. Royce President |
W. Whitney George Vice President |
Jack E. Fockler, Jr. Vice President |
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8 | This page is not part of the 2011 Annual Report to Stockholders |
Why Volatility Is the Friend of Discipline | |
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Throughout much of Royces history, we have talked about our attempts to use stock market volatility to our advantage without offering a great deal of detail about precisely how that works. We have always made an implicit assumption that the bulk of our readers nod in agreement with statements, which tend to proliferate in our materials during bear markets, that describe market tumult as the value investors friend. With close to four years of particularly tumultuous markets in the books (and who- knows-what still to come), we reexamined this and concluded that volatility was a subject worth discussing at greater length, both for its own sake and |
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First, we have
an unshakeable conviction that entry price is a key constituent of attractive
long-term results. We also believe strongly in the idea that success in
equity investing is best and most consistently achieved with a disciplined
approach that values deep knowledge about companies, much of which focuses on
establishing the worth of a business. Our analysis of the intrinsic value of
a business is among the primary factors used in determining what we think we
should pay for a stock in order to potentially maximize our return while also
seeking to minimize risk. |
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for the sake of offering more details about how and why volatile stock prices
play such a crucial role in our quest
for strong absolute returns achieved over the long
term. |
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emotional
and/or short-sighted sellers tend to
keep on selling, allowing us to buy
opportunistically. As bottom- up, quality-centric investors, we like to see
stock prices with a pronounced downside disconnect between a companys
fundamentals (such as a strong balance sheet, long-term earnings history and
positive cash flow) and its share price. The greater the difference, the more
promising the opportunity. |
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and past market conditions. (The most popular measure of
stock market volatility is the Chicago Board Options Exchange Market Volatility
Index, commonly referred to as the VIX, which measures the implied
volatility of S&P 500 index options.) |
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world overburdened with debt and a thus-far fragile (and mostly jobless) economic recovery underway
here in the U.S., we find an investment horizon measured in years is even more
of a necessity than it usually is. |
This page is not part of the 2011 Annual Report to Stockholders | 9 |
We believe strongly in the idea that a long-term investment perspective is crucial for determining the success of a particular investment approach. While flourishing in an up market is wonderful, surviving a bear market by losing less (or not at all) is at least as good. However, the true test of a portfolios mettle is performance over full market cycle periods, which include both an up and down market period.
Since the Russell 2000s inception on 12/31/78, there have been
10 full market cycles, with the most recent peaking on 4/29/11.
Market cycles are defined 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. Each market cycle contains
a peak-to-trough and a trough-to-peak period. Interestingly,
over the small-cap indexs 30+ year history, each style index—
the Russell 2000 Value Index and the Russell 2000 Growth
Index—outperformed in five of the 10 full market cycles. In fact,
leadership has alternated between growth and value over the last
six cycles. If history were to adhere to this pattern, value would
lead in the current cycle that began on 4/29/11. |
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Peak-to-Peak (7/13/07-4/29/11) | The most recently completed cycle lasted approximately three
and a half years and saw a modest gain for the small-cap index.
Small-cap value was actually underwater for the full cycle,
while small-cap growth was marginally positive. Only Royce
Focus Trust outperformed the small-cap index for the just
completed cycle. |
Peak-to-Trough (7/13/07-3/9/09) | |
Performance during the peak-to-trough phase of the most
recent cycle was especially difficult, encompassing the financial
crisis of late 2008 and early 09. Surprisingly, growth narrowly
outperformed value during this phase. Once again, Royce Focus
Trust outpaced the Russell 2000 Index during this down phase. |
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Trough-to-Peak (3/9/09-4/29/11) | |
The dynamic market recovery lasted 25 months and saw the
small-cap index appreciate 159.3% (50%+ per annum). Both
value and growth saw substantial gains during this period,
although growth once again provided the advantage. Each of
our closed-end funds outperformed the small-cap index. |
SMALL-CAP MARKET CYCLE: RUSSELL 2000 INDEXES TOTAL RETURNS | ||||||||||||||||
ROYCE FUNDS NAV TOTAL RETURNS VS. RUSSELL 2000 INDEX: | ||||||||||||||||
MARKET CYCLE RESULTS | ||||||||||||||||
Peak-to- | Peak-to- | Trough-to- | Peak-to- | |||||||||||||
Peak | Trough | Peak | Current | |||||||||||||
7/13/07- | 7/13/07- | 3/9/09- | 4/29/11- | |||||||||||||
4/29/11 | 3/9/09 | 4/29/11 | 12/31/11 | |||||||||||||
Russell 2000 | 6.6 | % | -58.9 | % | 159.3 | % | -13.5 | % | ||||||||
Russell 2000 Value | -1.4 | -61.1 | 153.7 | -12.8 | ||||||||||||
Russell 2000 Growth | 14.3 | -56.8 | 164.4 | -14.2 | ||||||||||||
Royce Value Trust | 6.2 | -65.6 | 208.3 | -19.3 | ||||||||||||
Royce Micro-Cap Trust | -0.5 | -66.3 | 195.5 | -14.1 | ||||||||||||
Royce Focus Trust | 10.2 | -58.3 | 164.0 | -19.2 | ||||||||||||
All performance information above 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 performance may be higher or lower than performance quoted. See page 2 for important performance information for all of the above funds. |
10 | This page is not part of the 2011 Annual Report to Stockholders |
Table of Contents | ||
Managers’ Discussions of Fund Performance |
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Royce Value Trust | 12 | |
Royce Micro-Cap Trust | 14 | |
Royce Focus Trust | 16 | |
18 | ||
20 | ||
Schedules of Investments and Other Financial Statements |
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61 | ||
62 | ||
The Royce Funds 2011 Annual Report to Stockholders | 11 |
AVERAGE ANNUAL NAV TOTAL RETURNS | ||||||||||
Through 12/31/11 | ||||||||||
July-December 20111 | -14.66 | % | ||||||||
One-Year | -10.06 | |||||||||
Three-Year | 19.21 | |||||||||
Five-Year | -0.65 | |||||||||
10-Year | 6.10 | |||||||||
15-Year | 8.86 | |||||||||
20-Year | 10.24 | |||||||||
25-Year | 10.17 | |||||||||
Since Inception (11/26/86) | 10.13 | |||||||||
1Not annualized | ||||||||||
CALENDAR YEAR NAV TOTAL RETURNS | ||||||||||
Year | RVT | Year | RVT | |||||||
2011 | -10.1 | % | 2003 | 40.8 | % | |||||
2010 | 30.3 | 2002 | -15.6 | |||||||
2009 | 44.6 | 2001 | 15.2 | |||||||
2008 | -45.6 | 2000 | 16.6 | |||||||
2007 | 5.0 | 1999 | 11.7 | |||||||
2006 | 19.5 | 1998 | 3.3 | |||||||
2005 | 8.4 | 1997 | 27.5 | |||||||
2004 | 21.4 | 1996 | 15.5 | |||||||
TOP 10 POSITIONS % of Net Assets Applicable to Common Stockholders |
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Coherent | 1.3 | % | ||||||||
HEICO Corporation | 1.2 | |||||||||
Oil States International | 1.2 | |||||||||
Alleghany Corporation | 1.1 | |||||||||
Advisory Board (The) | 1.0 | |||||||||
Woodward | 1.0 | |||||||||
Carters | 1.0 | |||||||||
Mohawk Industries | 0.9 | |||||||||
Sapient Corporation | 0.9 | |||||||||
Simpson Manufacturing | 0.9 | |||||||||
PORTFOLIO SECTOR BREAKDOWN | ||||||||||
% of Net Assets Applicable to Common Stockholders |
||||||||||
Industrials | 27.9 | % | ||||||||
Information Technology | 22.3 | |||||||||
Financials | 20.6 | |||||||||
Consumer Discretionary | 12.2 | |||||||||
Materials | 9.9 | |||||||||
Health Care | 7.3 | |||||||||
Energy | 6.0 | |||||||||
Consumer Staples | 2.3 | |||||||||
Telecommunication Services | 0.6 | |||||||||
Diversified Investment Companies | 0.5 | |||||||||
Miscellaneous | 4.9 | |||||||||
Bond and Preferred Stock | 0.1 | |||||||||
Cash and Cash Equivalents | 8.2 | |||||||||
|
|||||||||||
Managers Discussion Results for Royce Value Trust (RVT) were disappointing on both an absolute and relative basis in 2011. For the calendar year, RVT fell 10.1% on an NAV (net asset value) basis and 10.5% on a market price basis, in both instances trailing its unleveraged benchmarks, the Russell 2000 Index, which fell 4.2%, and the S&P SmallCap 600 Index, which gained 1.0%, for the same period. In a year that was marked both by high volatility and close correlation, we were not pleased with performance, especially during periods which saw generally poor results, periods in which the Fund has often held its value more effectively. During the first half of the year, RVT was behind its benchmarks, climbing 5.4% on an NAV basis and 5.3% based on market price compared to gains of 6.2% for the Russell 2000 and 7.5% for the S&P SmallCap 600. Small-cap stocks reached a peak on April 29, 2011, though the worst of the years losses came later, during August and September. A combination of anxieties drove investors away from equities, including potential European defaults, the possibility of an economic slowdown in China, and the debt ceiling fiasco here in the U.S., which had the ripple effects of undermining confidence in our political leadership and stoking fears of a double-dip recession. These developments led to an extremely bearish third quarter, during which RVT suffered along with the rest of the market—there were mostly double-digit losses for indexes across the globe. The Fund fell 25.2% |
|||||||||||
on an NAV basis and 24.4% on a market price basis compared to respective declines of 21.9% and 19.8% for the Russell 2000 and S&P SmallCap 600.
When economic news improved in the U.S., it sparked a dynamic domestic rally following the small-cap low on October 3. The rest of October, while still volatile, was pleasantly bullish before the pace of the bull run slowed to a trot in November and December. In the years final quarter, RVT again trailed its benchmarks, gaining 14.2% based on NAV and 12.6% on a market price basis, while the Russell 2000 climbed 15.5% and the S&P SmallCap 600 rose 17.2%. We were more satisfied with the Funds longer-term results. On an NAV basis, RVT outpaced both its benchmarks for the three-, 15-, 25-year and since inception (11/26/86) periods ended December 31, 2011. The Fund also provided an edge over the Russell 2000 for the 10-year and 20-year periods. RVTs NAV average annual total return for the since inception period ended December 31, 2011 was 10.1%. |
|||||||||||
GOOD IDEAS THAT WORKED | |||||||||||
Top Contributors to 2011 Performance1 | |||||||||||
Advisory Board (The) | 0.33 | % | |||||||||
HEICO Corporation | 0.31 | ||||||||||
Sturm, Ruger & Co. | 0.30 | ||||||||||
Carters | 0.27 | ||||||||||
RLI | 0.22 | ||||||||||
1Includes dividends | |||||||||||
Only the Industrials sector finished the year in the black, and with a modest net contribution at that. The Funds top two contributors for the calendar year came from that sector and were also top-ten positions at the end of 2011. The Advisory Board offers various programs, services, and software that focus on best practices research services which include identifying both effective management practices and widely followed but ineffective practices, along with analyzing emerging trends in |
|||||||||||
Important Performance and Risk Information
All performance information reflects past performance, is presented on a total return basis and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month-end may be obtained at www.roycefunds.com. The market price of the Funds shares will fluctuate, so that shares may be worth more or less than their original cost when sold. The Fund invests primarily in securities of small- and micro-cap companies, which may involve considerably more risk than investing in a more diversified portfolio of larger-cap companies. Regarding the two Good Ideas tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Funds performance for 2011. |
12 | The Royce Funds 2011 Annual Report to Stockholders |
Performance and Portfolio Review
|
|||||||
healthcare and education. Growing revenues, earnings and cash flow helped the stock to enjoy a particularly robust second half, as some investors were looking past macro-driven headlines at what we see as a well-managed, efficiently run business. It was the Funds fifth-largest position at the end of the year. HEICO Corporation, the Funds second-largest holding at the end of December, manufactures electronic products primarily for the aerospace & defense industries. Growing global air traffic has helped to create robust demand for aftermarket airplane parts. Airlines have thus been increasing capacity, and their own improved financial condition made them more willing to spend on parts re-stocking as the economy slowly recovers. We still like its core business, steady earnings and strong balance sheet.
The Financials, Materials and Information Technology sectors were the years net loss leaders. The first of these three sectors saw the bulk of its declines come from holdings in the capital markets industry, which almost doubled that of RVTs next-worst-performing industry, the metals & mining group. The Financials sector was home to three of the Funds loss leaders, with two coming from the capital markets group. MF Global made headlines and caused embarrassment both for its well-known CEO and investors like ourselves, who had believed in the integrity, transparency, and capabilities of the company. For many years, we have had a high opinion of the business of asset manager AllianceBernstein Holding. Its business has endured difficulties in the current low-interest rate environment, while also experiencing steady outflows and earnings disappointments. We added shares between May and August. |
|||||||
Poor investment results hurt the performance of E-L Financial, a Toronto-based investment and insurance holding company. Believing in the businesss long-term prospects, we added to our position in August and September. We also built our stake in MoneyGram International, which provides money transfer and bill payment services. It was a comparably small holding that had an outsized negative effect on 2011 performance. Its stock price slid precipitously in July and again in November. The first slide was mostly the result of a hefty quarterly loss brought on by the firms attempts at restructuring and recapitalization. The second was an unhappy reaction to a reverse stock split—often seen as a company-driven attempt to invigorate a sluggish stock price—and a secondary offering, which investors usually regard as dilutive. |
|||||||
GOOD IDEAS AT THE TIME | |||||||
Top Detractors from 2011 Performance1 | |||||||
MF Global Holdings | -0.63 | % | |||||
E-L Financial | -0.34 | ||||||
AllianceBernstein Holding L.P. | -0.30 | ||||||
MoneyGram International | -0.29 | ||||||
Rofin-Sinar Technologies | -0.29 | ||||||
1Net of dividends | |||||||
MARKET PRICE PERFORMANCE HISTORY SINCE INCEPTION (11/26/86) through 12/31/11 |
|||||||
1 | Reflects the cumulative total return of an investment made by a stockholder who purchased one share at inception ($10.00 IPO), reinvested all annual distributions and fully participated in primary subscriptions of the Funds rights offerings. |
||||||
2 | Reflects the actual market price of one share as it traded on the NYSE. |
FUND INFORMATION AND | ||||||||||||||||
PORTFOLIO DIAGNOSTICS | ||||||||||||||||
Average Market Capitalization1 | $1,310 million | |||||||||||||||
Weighted Average P/E Ratio2 | 14.2x | |||||||||||||||
Weighted Average P/B Ratio | 1.6x | |||||||||||||||
U.S. Investments (% of Net Assets applicable to Common Stockholders) | 86.9% | |||||||||||||||
Non-U.S. Investments (% of Net Assets applicable to Common Stockholders) | 27.7% | |||||||||||||||
Fund Total Net Assets | $1,187 million | |||||||||||||||
Net Leverage3 | 15% | |||||||||||||||
Turnover Rate | 26% | |||||||||||||||
Number of Holdings | 550 | |||||||||||||||
Symbol | ||||||||||||||||
Market Price |
RVT | |||||||||||||||
NAV |
XRVTX | |||||||||||||||
1 Geometrically calculated | ||||||||||||||||
CAPITAL STRUCTURE | ||||||||||||||||
Publicly Traded Securities Outstanding at 12/31/11 at NAV or Liquidation Value |
||||||||||||||||
68.0 million shares |
$967 million | |||||||||||||||
5.90% Cumulative |
$220 million | |||||||||||||||
DOWN MARKET PERFORMANCE COMPARISON | ||||||||||||||||
All Down Periods of 7.5% or Greater Over the Last 7 Years, in Percentages(%) |
||||||||||||||||
The Royce Funds 2011 Annual Report to Stockholders | 13 |
AVERAGE ANNUAL NAV TOTAL RETURNS | ||||||||||
Through 12/31/11 | ||||||||||
July-December 20111 | -10.48 | % | ||||||||
One-Year | -7.69 | |||||||||
Three-Year | 20.22 | |||||||||
Five-Year | -0.94 | |||||||||
10-Year | 7.09 | |||||||||
15-Year | 9.18 | |||||||||
Since Inception (12/14/93) | 10.05 | |||||||||
1Not annualized | ||||||||||
CALENDAR YEAR NAV TOTAL RETURNS | ||||||||||
Year | RMT | Year | RMT | |||||||
2011 | -7.7 | % | 2003 | 55.5 | % | |||||
2010 | 28.5 | 2002 | -13.8 | |||||||
2009 | 46.5 | 2001 | 23.4 | |||||||
2008 | -45.5 | 2000 | 10.9 | |||||||
2007 | 0.6 | 1999 | 12.7 | |||||||
2006 | 22.5 | 1998 | -4.1 | |||||||
2005 | 6.8 | 1997 | 27.1 | |||||||
2004 | 18.7 | 1996 | 16.6 | |||||||
TOP 10 POSITIONS % of Net Assets Applicable to Common Stockholders |
||||||||||
Kennedy-Wilson Holdings | 1.8 | % | ||||||||
Sapient Corporation | 1.6 | |||||||||
Epoch Holding Corporation | 1.6 | |||||||||
Charming Shoppes | 1.3 | |||||||||
Americas Car-Mart | 1.3 | |||||||||
Raven Industries | 1.3 | |||||||||
Tennant Company | 1.3 | |||||||||
Drew Industries | 1.2 | |||||||||
Seneca Foods | 1.1 | |||||||||
Richardson Electronics | 1.1 | |||||||||
PORTFOLIO SECTOR BREAKDOWN | ||||||||||
% of Net Assets Applicable to Common Stockholders |
||||||||||
Industrials | 25.9 | % | ||||||||
Financials | 19.6 | |||||||||
Information Technology | 19.2 | |||||||||
Consumer Discretionary | 13.2 | |||||||||
Materials | 8.2 | |||||||||
Health Care | 6.1 | |||||||||
Energy | 4.0 | |||||||||
Consumer Staples | 3.7 | |||||||||
Utilities | 0.0 | |||||||||
Miscellaneous | 4.9 | |||||||||
Preferred Stock | 0.3 | |||||||||
Cash and Cash Equivalents | 16.4 | |||||||||
|
|||||||||||
Manager’s Discussion Following two years of outsized gains for micro-cap stocks in 2009 and 2010, our mean reversion tendencies anticipated at least some moderation in the torrid pace micro-caps had established prior to 2011. What we did not expect was a substantial mid-year decline eerily reminiscent of the most difficult periods in the midst of the financial crisis. Precipitated by Congresss inability to pass a usually routine increase in the debt ceiling, Standard & Poors took the historic step of downgrading the U.S. sovereign credit rating. While most bond investors dismissed the action, seeing nothing incremental to fear in the creditworthiness of the U.S. government, equity investors reacted far more negatively. In this challenging year for equities, Royce Micro-Cap Trust (RMT) declined 7.7% on an NAV (net asset value) basis, and 5.0% based on the market price of its shares, underperforming its unleveraged small-cap benchmark, the Russell 2000, which lost 4.2%, while outperforming the Russell Microcap index, which fell 9.3%. |
|||||||||||
During the years first half, RMT gained 3.1% on an NAV basis, and 3.3% based on the
market price of its shares. The Fund underperformed the small-cap index, which advanced
6.2%, and was in line with the micro-cap index, which rose 3.1%, for the same period. Volatility
began to creep into the markets during the second quarter, but that period looks quite placid
compared to the wildly volatile third quarter, a period that saw most stock indexes post steep
double-digit declines. RMT fell in step with
stocks as a whole, losing 20.8% (NAV) and
21.2% (market) compared to declines of 21.9%
for the Russell 2000 and 22.7% for the Russell
Microcap. The fourth quarter recouped largely
half of the third quarters decline, as better-than-expected
corporate earnings and resilience in the
U.S. economy somewhat rejuvenated investors
interest in stocks. The Fund was again closely
correlated with the performance of its benchmark and the micro-cap index, with gains of 13.0%
(NAV) and 16.7% (market) versus 15.5% for its benchmark and 13.8% for the Russell Microcap. |
|||||||||||
GOOD IDEAS THAT WORKED | |||||||||||
Top Contributors to 2011 Performance1 | |||||||||||
Epoch Holding Corporation | 0.60 | % | |||||||||
Charming Shoppes | 0.57 | ||||||||||
Virtus Investment Partners | 0.42 | ||||||||||
Americas Car-Mart | 0.38 | ||||||||||
Advisory Board (The) | 0.37 | ||||||||||
1Includes dividends | |||||||||||
Even with an relatively undistinguished year in 2011, the Fund maintained its impressive
lead from the small-cap low on March 9, 2009 through December 31, 2011. RMT advanced
153.8% on an NAV basis and 176.2% on a market price basis compared to the Russell 2000,
which was up 124.3%, and the Russell Microcap, which rose 117.4%. We also were very pleased
with the Funds longer-term NAV results. RMT outpaced the micro-cap index (for which
data only goes back to 2000) on an NAV basis for the three-, five- and 10-year periods ended
December 31, 2011. On an NAV basis, the Fund also outperformed the Russell 2000 for the
three-, 10-, 15-year and since inception (12/14/93) periods ended December 31, 2011. RMTs
NAV average annual total return since inception was 10.1%. Not surprising in this negatively correlated period for stocks, all of the Funds equity sectors were detractors from performance in 2011, with Information Technology having the largest |
|||||||||||
Important Performance and Risk Information
All performance information reflects past performance, is presented on a total return basis and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month-end may be obtained at www.roycefunds.com. The market price of the Funds shares will fluctuate, so that shares may be worth more or less than their original cost when sold. The Fund normally invests in micro-cap companies, which may involve considerably more risk than investing in a more diversified portfolio of larger-cap companies. Regarding the two Good Ideas tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Funds performance for 2011. |
14 | The Royce Funds 2011 Annual Report to Stockholders |
Performance and Portfolio Review
|
|||||||
negative impact, followed by Energy, Materials and Consumer Discretionary. These sectors were
among the most economically sensitive areas of the market and were hard hit in large part because
investors sought to protect themselves from the possibility of another recession. At the industry
level, results were more balanced, with three of the top four positive contributors coming from
the Industrials sector—professional services, commercial services & supplies, and industrial
conglomerates were joined by specialty retail from the Consumer Discretionary space to make
up the top four. Energy equipment & services, semiconductors & semiconductor equipment,
and metals & mining were the most significant detractors at the industry level. Epoch Holding, a publicly traded investment management company overseeing over $19 billion in assets, was the Funds top individual performer in 2011. A long-term holding of the Fund, this value-based equity asset manager continued to improve on its strong long-term performance record and saw a steady increase in its asset base. Charming Shoppes was another notable performer. This specialty retailer of womens plus size apparel made substantial progress in a long-anticipated restructuring. Following three years of losses, the company engaged new leadership, continued to close underperforming stores, divested a non-core brand, and retained Barclays Capital as its financial adviser to explore strategic alternatives, all of which helped lead to substantial appreciation in the shares. |
|||||||
Origin Agritech, the Funds leading detractor, is a U.S.-listed company headquartered in
China that manufactures hybrid and genetically
modified crop seeds. The company reported
earnings that fell short of expectations mostly
as a result of a drop in revenues due to farmers
changing planting schedules and higher-than-expected
R&D expenses. Another notable
loser was Willbros Group, an engineering and
construction company serving primarily the oil
and gas industry. Shares were weighed down by
substantial legal fees related to an ongoing dispute over the disposition of the companys Nigerian
assets from 2007, along with a drop in the companys backlog due to delays in large pipeline
construction projects. We continue to hold shares because we like the companys improving
balance sheet, the diminishing financial impact of legacy legal issues, and its potential to benefit
from improving trends in the energy infrastructure market. |
|||||||
GOOD IDEAS AT THE TIME | |||||||
Top Detractors from 2011 Performance1 | |||||||
Origin Agritech | -0.31 | % | |||||
Support.com | -0.29 | ||||||
Willbros Group | -0.28 | ||||||
Colony Financial | -0.27 | ||||||
Cogo Group | -0.27 | ||||||
1Net of dividends | |||||||
MARKET PRICE PERFORMANCE HISTORY SINCE INCEPTION (12/14/93) through 12/31/11 | |||||||
1 | Reflects the cumulative total return of an investment made by a stockholder who purchased one share at inception
($7.50 IPO), reinvested distributions and fully participated in the primary subscription of the 1994 rights offering. |
||||||
2 | Reflects the actual market price of one share as it traded on the NYSE and, prior to 12/1/03, on Nasdaq. |
FUND INFORMATION AND | ||||||||||||||||
PORTFOLIO DIAGNOSTICS | ||||||||||||||||
Average Market Capitalization1 |
$304 million | |||||||||||||||
Weighted Average P/E Ratio2 |
15.6x | |||||||||||||||
Weighted Average P/B Ratio |
1.3x | |||||||||||||||
U.S. Investments (% of Net Assets applicable to Common Stockholders) |
91.1% | |||||||||||||||
Non-U.S. Investments (% of Net Assets applicable to Common Stockholders) |
14.0% | |||||||||||||||
Fund Total Net Assets | $339 million | |||||||||||||||
Net Leverage3 | 5% | |||||||||||||||
Turnover Rate | 30% | |||||||||||||||
Number of Holdings | 328 | |||||||||||||||
Symbol | ||||||||||||||||
Market Price |
RMT | |||||||||||||||
NAV |
XOTCX | |||||||||||||||
1 Geometrically calculated | ||||||||||||||||
CAPITAL STRUCTURE | ||||||||||||||||
Publicly Traded Securities Outstanding at 12/31/11 at NAV or Liquidation Value |
||||||||||||||||
28 million shares of Common Stock |
$279 million | |||||||||||||||
6.00% Cumulative Preferred Stock |
$60 million | |||||||||||||||
DOWN MARKET PERFORMANCE COMPARISON | ||||||||||||||||
All Down Periods of 7.5% or Greater Over the Last 7 Years, in Percentages(%) |
||||||||||||||||
The Royce Funds 2011 Annual Report to Stockholders | 15 |
AVERAGE ANNUAL NAV TOTAL RETURNS | ||||||||||||
Through 12/31/11 | ||||||||||||
July-December 20111 | -13.71 | % | ||||||||||
One-Year | -10.51 | |||||||||||
Three-Year | 18.83 | |||||||||||
Five-Year | 1.53 | |||||||||||
10-Year | 9.51 | |||||||||||
15-Year | 9.74 | |||||||||||
Since Inception (11/1/96)2 | 9.95 | |||||||||||
1 Not annualized | ||||||||||||
2 Royce & Associates assumed investment management responsibility for the Fund on 11/1/96. |
||||||||||||
CALENDAR YEAR NAV TOTAL RETURNS | ||||||||||||
Year | FUND | Year | FUND | |||||||||
2011 | -10.5 | % | 2003 | 54.3 | % | |||||||
2010 | 21.8 | 2002 | -12.5 | |||||||||
2009 | 54.0 | 2001 | 10.0 | |||||||||
2008 | -42.7 | 2000 | 20.9 | |||||||||
2007 | 12.2 | 1999 | 8.7 | |||||||||
2006 | 15.8 | 1998 | -6.8 | |||||||||
2005 | 13.3 | 1997 | 20.5 | |||||||||
2004 | 29.3 | |||||||||||
TOP 10 POSITIONS % of Net Assets Applicable to Common Stockholders |
||||||||||||
Berkshire Hathaway Cl. B | 3.8 | % | ||||||||||
Microsoft Corporation | 3.4 | |||||||||||
Analog Devices | 3.4 | |||||||||||
Buckle (The) | 3.3 | |||||||||||
Allied Nevada Gold | 3.2 | |||||||||||
Franklin Resources | 3.2 | |||||||||||
Exxon Mobil | 3.1 | |||||||||||
Western Digital | 3.1 | |||||||||||
Newmont Mining | 3.0 | |||||||||||
Mosaic Company (The) | 2.8 | |||||||||||
PORTFOLIO SECTOR BREAKDOWN | ||||||||||||
% of Net Assets Applicable to Common Stockholders |
||||||||||||
Materials | 29.1 | % | ||||||||||
Financials | 19.8 | |||||||||||
Information Technology | 16.8 | |||||||||||
Energy | 13.4 | |||||||||||
Industrials | 8.0 | |||||||||||
Consumer Discretionary | 7.4 | |||||||||||
Consumer Staples | 6.8 | |||||||||||
Health Care | 1.3 | |||||||||||
Cash and Cash Equivalents | 14.0 | |||||||||||
|
|||||||||||
Manager’s Discussion Although equity results were highly correlated in 2011, some performances were worse than others, an observation that unfortunately includes the calendar-year results for Royce Focus Trust (FUND). In 2011, the Fund fell 10.5% on an NAV (net asset value) basis and 11.7% on a market price basis, in each case trailing its unleveraged small-cap benchmark, the Russell 2000 Index, which lost 4.2% for the same period. It was a disappointing year for FUND on both an absolute and relative basis. The Fund trailed its benchmark during the first half of the year on both an NAV and market price basis, finishing June with a 3.7% NAV gain and a 5.5% market price return versus an advance of 6.2% for the small-cap index. Volatility, which first gathered force in the second quarter, picked up momentum as temperatures heated up. Numerous fears drove investors away from stocks—anxiety over European sovereign defaults, a slowdown in China, the U.S. Congresss failure to pass a routine increase in the debt ceiling limit (and the subsequent downgrade to our nations credit rating), and the possibility of a double-dip recession all played a role in the dramatic summer sell-off. During this third-quarter downdraft, the Fund offered a slight edge, as it fell 20.5% on an NAV basis and 21.2% on a market price basis, while the Russell 2000 declined 21.9%. |
|||||||||||
Unfortunately, FUND was not able to hold or build on this relative advantage during the
bullish fourth quarter, when U.S. stocks staged a welcome rally. Between the beginning of
October and the end of December, the Fund
gained 8.5% on an NAV basis and 6.2%
on a market price basis, while its small-cap
benchmark rallied 15.5%. These results in the
years final quarter were particularly frustrating
because FUNDs struggles in the rally played
a large role in both its underperformance and
lackluster absolute result in 2011. We felt much better about the Funds longer-term returns, especially its NAV results, which remained strong on a relative basis while also showing key pockets of strength in the three-, 10-, 15-year and since inception of Royces management (11/1/96) periods ended December 31, 2011. During the most recent full market cycle period—from the previous small-cap peak on July 13, 2007 through the small-cap peak on April 29, 2011—the Fund gained 10.2% on an NAV basis versus 6.6% for the Russell 2000. (Please see page 10 for more market cycle results.) On a market price basis, FUND beat its |
|||||||||||
GOOD IDEAS THAT WORKED | |||||||||||
Top Contributors to 2011 Performance1 | |||||||||||
Varian Semiconductor Equipment Associates |
1.56 | % | |||||||||
Timberland Company (The) Cl. A | 0.71 | ||||||||||
Nu Skin Enterprises Cl. A | 0.60 | ||||||||||
Sanderson Farms | 0.50 | ||||||||||
Buckle (The) | 0.45 | ||||||||||
1Includes dividends | |||||||||||
benchmark for the 10-year, 15-year and since inception of
our management periods ended December 31, 2011. On an NAV basis, the Fund outpaced the
Russell 2000 for the three-, five-, 10-, 15-year and since inception of our management periods
ended December 31, 2011. FUNDs NAV average annual total return since inception was 9.9%.
Six of the Funds nine equity sectors finished the year with net losses. Of those three with net gains for the year—Consumer Discretionary, Consumer Staples and Health Care—the first two made solid contributions, while the third exited 2011 with very modest net gains. The Materials sector had the most substantial negative impact on annual results, with losses more than double |
|||||||||||
Important Performance and Risk Information
All performance information reflects past performance, is presented on a total return basis and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month-end may be obtained at www.roycefunds.com. The market price of the Funds shares will fluctuate, so that shares may be worth more or less than their original cost when sold. The Fund normally invests primarily in small-cap companies, which may involve considerably more risk than investing in a more diversified portfolio of larger-cap companies. Regarding the two Good Ideas tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Funds performance for 2011. |
16 | The Royce Funds 2011 Annual Report to Stockholders |
Performance and Portfolio Review
|
|||||||
that of Financials, the Funds next largest detractor on a sector basis. One industry within the
Materials sector, metals & mining, registered larger net losses than any of the portfolios remaining
sectors. After coping with various operational issues during the first half of the year, many gold
and silver miners faced the added headwind of increasingly volatile precious metals commodity
prices during the tumultuous third quarter. During that period, when increased mining expenses
and operational issues were still impacting the industry, especially its smaller businesses, share
prices began to decline even more sharply. Most of these companies also failed to participate in
any meaningful way in the fourth-quarter rally for stocks. The frustrations of 2011 aside, we continue to see great potential for many of these companies. The conditions for improved gold and silver prices remain in place. Historically, interest rates being below long-term inflation rates has provided a tailwind for gold, and this inspires confidence going forward. We increased our position in exploration company Seabridge Gold in March and added shares of Pan American Silver during April. The latter faced delays in an Argentinian mine of its own and had a few small production disappointments. In the first half of the year, it also had to tackle concerns, since resolved, about how newly elected leaders in Bolivia and Peru would treat mining operations in those nations. These issues were more than enough to keep investors selling. Seabridge Gold struggled in a market that was challenging for most gold and silver miners, but was even tougher on companies involved only in exploration. |
|||||||
We also held a good-sized stake in scrap
metal manufacturer and recycler Schnitzer Steel
Industries. A decline in scrap metal prices hurt
its share price, as did fears of a global industrial
slowdown that was particularly unkind to
commodity-based cyclicals. After bottoming
out in October, its stock rallied a bit through the
end of the year. We still like the core business of
two companies involved in high brightness light
emitting diodes (HB LEDs) equipment. Although we chose to hold shares of Veeco Instruments,
we parted ways with German firm Aixtron in October. On the other side of the ledger, Varian
Semiconductor Equipment Associates and The Timberland Company were, like many small-cap
businesses of late, subject to M&A (mergers & acquisitions) activity. We sold our shares in both
as their share prices rose on news of each respective acquisition. |
|||||||
GOOD IDEAS AT THE TIME | |||||||
Top Detractors from 2011 Performance1 | |||||||
Seabridge Gold | -1.50 | % | |||||
Pan American Silver | -1.28 | ||||||
Schnitzer Steel Industries Cl. A | -0.97 | ||||||
Veeco Instruments | -0.95 | ||||||
Aixtron ADR | -0.91 | ||||||
1 Net of dividends | |||||||
MARKET PRICE PERFORMANCE HISTORY SINCE INCEPTION (11/1/96)3 through 12/31/11 |
|||||||
1 | Reflects the cumulative total return experience of a continuous common stockholder who reinvested all
distributions and fully participated in the primary subscription of the 2005 rights offering. |
||||||
2 | Reflects the actual market price of one share as it traded on Nasdaq. |
||||||
3 | Royce & Associates assumed investment management responsibility for the Fund on 11/1/96. |
FUND INFORMATION AND | ||||||||||||||||
PORTFOLIO DIAGNOSTICS | ||||||||||||||||
Average Market Capitalization1 |
$4,754 million | |||||||||||||||
Weighted Average P/E Ratio2 | 12.2x | |||||||||||||||
Weighted Average P/B Ratio | 1.8x | |||||||||||||||
U.S. Investments (% of Net Assets applicable to Common Stockholders) | 77.8% | |||||||||||||||
Non-U.S. Investments (% of Net Assets applicable to Common Stockholders) | 24.8% | |||||||||||||||
Fund Total Net Assets | $176 million | |||||||||||||||
Net Leverage3 | 3% | |||||||||||||||
Turnover Rate | 33% | |||||||||||||||
Number of Holdings | 55 | |||||||||||||||
Symbol | ||||||||||||||||
Market Price |
FUND | |||||||||||||||
NAV |
XFUNX | |||||||||||||||
1 Geometrically calculated | ||||||||||||||||
CAPITAL STRUCTURE | ||||||||||||||||
Publicly Traded Securities Outstanding at 12/31/11 at NAV or Liquidation Value |
||||||||||||||||
20 million shares of Common Stock |
$151 million | |||||||||||||||
6.00% Cumulative Preferred Stock |
$25 million | |||||||||||||||
DOWN MARKET PERFORMANCE COMPARISON | ||||||||||||||||
All Down Periods of 7.5% or Greater Over the Last 7 Years, in Percentages(%) |
||||||||||||||||
The Royce Funds 2011 Annual Report to Stockholders | 17 |
|
History Since Inception |
The following table details the share accumulations by an initial investor in the Funds who reinvested all distributions and participated fully in primary subscriptions for each of the rights offerings. Full participation in distribution reinvestments and rights offerings can maximize the returns available to a long-term investor. This table should be read in conjunction with the Performance and Portfolio Reviews of the Funds.
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
History |
|
Amount |
|
Purchase |
|
Shares |
|
NAV |
|
Market |
|
||||||||
|
|
|
|
|
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|
|
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|
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|
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|
Royce Value Trust |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
11/26/86 |
|
|
Initial Purchase |
|
$ |
10,000 |
|
$ |
10.000 |
|
|
1,000 |
|
$ |
9,280 |
|
$ |
10,000 |
|
10/15/87 |
|
|
Distribution $0.30 |
|
|
|
|
|
7.000 |
|
|
42 |
|
|
|
|
|
|
|
12/31/87 |
|
|
Distribution $0.22 |
|
|
|
|
|
7.125 |
|
|
32 |
|
|
8,578 |
|
|
7,250 |
|
12/27/88 |
|
|
Distribution $0.51 |
|
|
|
|
|
8.625 |
|
|
63 |
|
|
10,529 |
|
|
9,238 |
|
9/22/89 |
|
|
Rights Offering |
|
|
405 |
|
|
9.000 |
|
|
45 |
|
|
|
|
|
|
|
12/29/89 |
|
|
Distribution $0.52 |
|
|
|
|
|
9.125 |
|
|
67 |
|
|
12,942 |
|
|
11,866 |
|
9/24/90 |
|
|
Rights Offering |
|
|
457 |
|
|
7.375 |
|
|
62 |
|
|
|
|
|
|
|
12/31/90 |
|
|
Distribution $0.32 |
|
|
|
|
|
8.000 |
|
|
52 |
|
|
11,713 |
|
|
11,074 |
|
9/23/91 |
|
|
Rights Offering |
|
|
638 |
|
|
9.375 |
|
|
68 |
|
|
|
|
|
|
|
12/31/91 |
|
|
Distribution $0.61 |
|
|
|
|
|
10.625 |
|
|
82 |
|
|
17,919 |
|
|
15,697 |
|
9/25/92 |
|
|
Rights Offering |
|
|
825 |
|
|
11.000 |
|
|
75 |
|
|
|
|
|
|
|
12/31/92 |
|
|
Distribution $0.90 |
|
|
|
|
|
12.500 |
|
|
114 |
|
|
21,999 |
|
|
20,874 |
|
9/27/93 |
|
|
Rights Offering |
|
|
1,469 |
|
|
13.000 |
|
|
113 |
|
|
|
|
|
|
|
12/31/93 |
|
|
Distribution $1.15 |
|
|
|
|
|
13.000 |
|
|
160 |
|
|
26,603 |
|
|
25,428 |
|
10/28/94 |
|
|
Rights Offering |
|
|
1,103 |
|
|
11.250 |
|
|
98 |
|
|
|
|
|
|
|
12/19/94 |
|
|
Distribution $1.05 |
|
|
|
|
|
11.375 |
|
|
191 |
|
|
27,939 |
|
|
24,905 |
|
11/3/95 |
|
|
Rights Offering |
|
|
1,425 |
|
|
12.500 |
|
|
114 |
|
|
|
|
|
|
|
12/7/95 |
|
|
Distribution $1.29 |
|
|
|
|
|
12.125 |
|
|
253 |
|
|
35,676 |
|
|
31,243 |
|
12/6/96 |
|
|
Distribution $1.15 |
|
|
|
|
|
12.250 |
|
|
247 |
|
|
41,213 |
|
|
36,335 |
|
1997 |
|
|
Annual distribution total $1.21 |
|
|
|
|
|
15.374 |
|
|
230 |
|
|
52,556 |
|
|
46,814 |
|
1998 |
|
|
Annual distribution total $1.54 |
|
|
|
|
|
14.311 |
|
|
347 |
|
|
54,313 |
|
|
47,506 |
|
1999 |
|
|
Annual distribution total $1.37 |
|
|
|
|
|
12.616 |
|
|
391 |
|
|
60,653 |
|
|
50,239 |
|
2000 |
|
|
Annual distribution total $1.48 |
|
|
|
|
|
13.972 |
|
|
424 |
|
|
70,711 |
|
|
61,648 |
|
2001 |
|
|
Annual distribution total $1.49 |
|
|
|
|
|
15.072 |
|
|
437 |
|
|
81,478 |
|
|
73,994 |
|
2002 |
|
|
Annual distribution total $1.51 |
|
|
|
|
|
14.903 |
|
|
494 |
|
|
68,770 |
|
|
68,927 |
|
1/28/03 |
|
|
Rights Offering |
|
|
5,600 |
|
|
10.770 |
|
|
520 |
|
|
|
|
|
|
|
2003 |
|
|
Annual distribution total $1.30 |
|
|
|
|
|
14.582 |
|
|
516 |
|
|
106,216 |
|
|
107,339 |
|
2004 |
|
|
Annual distribution total $1.55 |
|
|
|
|
|
17.604 |
|
|
568 |
|
|
128,955 |
|
|
139,094 |
|
2005 |
|
|
Annual distribution total $1.61 |
|
|
|
|
|
18.739 |
|
|
604 |
|
|
139,808 |
|
|
148,773 |
|
2006 |
|
|
Annual distribution total $1.78 |
|
|
|
|
|
19.696 |
|
|
693 |
|
|
167,063 |
|
|
179,945 |
|
2007 |
|
|
Annual distribution total $1.85 |
|
|
|
|
|
19.687 |
|
|
787 |
|
|
175,469 |
|
|
165,158 |
|
2008 |
|
|
Annual distribution total $1.723 |
|
|
|
|
|
12.307 |
|
|
1,294 |
|
|
95,415 |
|
|
85,435 |
|
3/11/09 |
|
|
Distribution $0.323 |
|
|
|
|
|
6.071 |
|
|
537 |
|
|
137,966 |
|
|
115,669 |
|
12/2/10 |
|
|
Distribution $0.03 |
|
|
|
|
|
13.850 |
|
|
23 |
|
|
179,730 |
|
|
156,203 |
|
2011 |
|
|
Annual distribution total $0.783 |
|
|
|
|
|
13.043 |
|
|
656 |
|
|
|
|
|
|
|
12/31/11 |
|
|
|
|
$ |
21,922 |
|
|
|
|
|
11,399 |
|
$ |
161,638 |
|
$ |
139,866 |
|
1 The purchase price used for annual
distribution totals is a weighted average of the distribution reinvestment
prices for the year.
2 Other than for initial purchase, values are
stated as of December 31 of the year indicated, after reinvestment of
distributions.
3 Includes a return of capital.
18 | The Royce Funds 2011 Annual Report to Stockholders
|
|
The following table details the share accumulations by an initial investor in the Funds who reinvested all distributions and participated fully in primary subscriptions for each of the rights offerings. Full participation in distribution reinvestments and rights offerings can maximize the returns available to a long-term investor. This table should be read in conjunction with the Performance and Portfolio Reviews of the Funds. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
History |
|
|
Amount |
|
|
Purchase |
|
|
Shares |
|
|
NAV |
|
|
Market |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Royce Micro-Cap Trust |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
12/14/93 |
|
|
Initial Purchase |
|
$ |
7,500 |
|
$ |
7.500 |
|
|
1,000 |
|
$ |
7,250 |
|
$ |
7,500 |
|
10/28/94 |
|
|
Rights Offering |
|
|
1,400 |
|
|
7.000 |
|
|
200 |
|
|
|
|
|
|
|
12/19/94 |
|
|
Distribution $0.05 |
|
|
|
|
|
6.750 |
|
|
9 |
|
|
9,163 |
|
|
8,462 |
|
12/7/95 |
|
|
Distribution $0.36 |
|
|
|
|
|
7.500 |
|
|
58 |
|
|
11,264 |
|
|
10,136 |
|
12/6/96 |
|
|
Distribution $0.80 |
|
|
|
|
|
7.625 |
|
|
133 |
|
|
13,132 |
|
|
11,550 |
|
12/5/97 |
|
|
Distribution $1.00 |
|
|
|
|
|
10.000 |
|
|
140 |
|
|
16,694 |
|
|
15,593 |
|
12/7/98 |
|
|
Distribution $0.29 |
|
|
|
|
|
8.625 |
|
|
52 |
|
|
16,016 |
|
|
14,129 |
|
12/6/99 |
|
|
Distribution $0.27 |
|
|
|
|
|
8.781 |
|
|
49 |
|
|
18,051 |
|
|
14,769 |
|
12/6/00 |
|
|
Distribution $1.72 |
|
|
|
|
|
8.469 |
|
|
333 |
|
|
20,016 |
|
|
17,026 |
|
12/6/01 |
|
|
Distribution $0.57 |
|
|
|
|
|
9.880 |
|
|
114 |
|
|
24,701 |
|
|
21,924 |
|
2002 |
|
|
Annual distribution total $0.80 |
|
|
|
|
|
9.518 |
|
|
180 |
|
|
21,297 |
|
|
19,142 |
|
2003 |
|
|
Annual distribution total $0.92 |
|
|
|
|
|
10.004 |
|
|
217 |
|
|
33,125 |
|
|
31,311 |
|
2004 |
|
|
Annual distribution total $1.33 |
|
|
|
|
|
13.350 |
|
|
257 |
|
|
39,320 |
|
|
41,788 |
|
2005 |
|
|
Annual distribution total $1.85 |
|
|
|
|
|
13.848 |
|
|
383 |
|
|
41,969 |
|
|
45,500 |
|
2006 |
|
|
Annual distribution total $1.55 |
|
|
|
|
|
14.246 |
|
|
354 |
|
|
51,385 |
|
|
57,647 |
|
2007 |
|
|
Annual distribution total $1.35 |
|
|
|
|
|
13.584 |
|
|
357 |
|
|
51,709 |
|
|
45,802 |
|
2008 |
|
|
Annual distribution total $1.193 |
|
|
|
|
|
8.237 |
|
|
578 |
|
|
28,205 |
|
|
24,807 |
|
3/11/09 |
|
|
Distribution $0.223 |
|
|
|
|
|
4.260 |
|
|
228 |
|
|
41,314 |
|
|
34,212 |
|
12/2/10 |
|
|
Distribution $0.08 |
|
|
|
|
|
9.400 |
|
|
40 |
|
|
53,094 |
|
|
45,884 |
|
2011 |
|
|
Annual distribution total $0.533 |
|
|
|
|
|
8.773 |
|
|
289 |
|
|
|
|
|
|
|
12/31/11 |
|
|
|
|
$ |
8,900 |
|
|
|
|
|
4,971 |
|
$ |
49,014 |
|
$ |
43,596 |
|
Royce Focus Trust |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
10/31/96 |
|
|
Initial Purchase |
|
$ |
4,375 |
|
$ |
4.375 |
|
|
1,000 |
|
$ |
5,280 |
|
$ |
4,375 |
|
12/31/96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,520 |
|
|
4,594 |
|
12/5/97 |
|
|
Distribution $0.53 |
|
|
|
|
|
5.250 |
|
|
101 |
|
|
6,650 |
|
|
5,574 |
|
12/31/98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,199 |
|
|
5,367 |
|
12/6/99 |
|
|
Distribution $0.145 |
|
|
|
|
|
4.750 |
|
|
34 |
|
|
6,742 |
|
|
5,356 |
|
12/6/00 |
|
|
Distribution $0.34 |
|
|
|
|
|
5.563 |
|
|
69 |
|
|
8,151 |
|
|
6,848 |
|
12/6/01 |
|
|
Distribution $0.14 |
|
|
|
|
|
6.010 |
|
|
28 |
|
|
8,969 |
|
|
8,193 |
|
12/6/02 |
|
|
Distribution $0.09 |
|
|
|
|
|
5.640 |
|
|
19 |
|
|
7,844 |
|
|
6,956 |
|
12/8/03 |
|
|
Distribution $0.62 |
|
|
|
|
|
8.250 |
|
|
94 |
|
|
12,105 |
|
|
11,406 |
|
2004 |
|
|
Annual distribution total $1.74 |
|
|
|
|
|
9.325 |
|
|
259 |
|
|
15,639 |
|
|
16,794 |
|
5/6/05 |
|
|
Rights offering |
|
|
2,669 |
|
|
8.340 |
|
|
320 |
|
|
|
|
|
|
|
2005 |
|
|
Annual distribution total $1.21 |
|
|
|
|
|
9.470 |
|
|
249 |
|
|
21,208 |
|
|
20,709 |
|
2006 |
|
|
Annual distribution total $1.57 |
|
|
|
|
|
9.860 |
|
|
357 |
|
|
24,668 |
|
|
27,020 |
|
2007 |
|
|
Annual distribution total $2.01 |
|
|
|
|
|
9.159 |
|
|
573 |
|
|
27,679 |
|
|
27,834 |
|
2008 |
|
|
Annual distribution total $0.473 |
|
|
|
|
|
6.535 |
|
|
228 |
|
|
15,856 |
|
|
15,323 |
|
3/11/09 |
|
|
Distribution $0.093 |
|
|
|
|
|
3.830 |
|
|
78 |
|
|
24,408 |
|
|
21,579 |
|
12/31/10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,726 |
|
|
25,806 |
|
2011 |
|
|
Annual distribution total $0.413 |
|
|
|
|
|
6.894 |
|
|
207 |
|
|
|
|
|
|
|
12/31/11 |
|
|
|
|
$ |
7,044 |
|
|
|
|
|
3,616 |
|
$ |
26,614 |
|
$ |
22,784 |
|
1 The purchase price used for annual
distribution totals is a weighted average of the distribution reinvestment
prices for the year.
2 Other than for initial purchase, values are
stated as of December 31 of the year indicated, after reinvestment of
distributions.
3 Includes a return of capital.
The Royce Funds 2011 Annual Report to Stockholders | 19
|
Have the Funds resumed their managed distribution policies for common stockholders?
The
Funds resumed their quarterly distribution policy for Common Stockholders in
March 2011, at the annual rate of 5%.
Why should I reinvest my distributions?
By
reinvesting distributions, a stockholder can maintain an undiluted investment
in the Fund. The regular reinvestment of distributions has a significant impact
on stockholder returns. In contrast, the stockholder who takes distributions in
cash is penalized when shares are issued below net asset value to other
stockholders.
How does the reinvestment of distributions from the Royce
closed-end funds work?
The
Funds automatically issue shares in payment of distributions unless you
indicate otherwise. The shares are generally issued at the lower of the market
price or net asset value on the valuation date.
How does this apply to registered stockholders?
If
your shares are registered directly with a Fund, your distributions are
automatically reinvested unless you have otherwise instructed the Funds
transfer agent, Computershare, in writing. A registered stockholder also has
the option to receive the distribution in the form of a stock certificate or in
cash if Computershare is properly notified.
What if my shares are held by a brokerage firm or a bank?
If
your shares are held by a brokerage firm, bank, or other intermediary as the
stockholder of record, you should contact your brokerage firm or bank to be
certain that it is automatically reinvesting distributions on your behalf. If
they are unable to reinvest distributions on your behalf, you should have your
shares registered in your name in order to participate.
What other features are available for registered stockholders?
The
Distribution Reinvestment and Cash Purchase Plans also allow registered
stockholders to make optional cash purchases of shares of a Funds common stock
directly through Computershare on a monthly basis, and to deposit certificates
representing your Fund shares with Computershare for safekeeping. The Funds
investment adviser is absorbing all commissions on optional cash purchases
under the Plans through December 31, 2011.
How do the Plans work for registered stockholders?
Computershare
maintains the accounts for registered stockholders in the Plans and sends
written confirmation of all transactions in the account. Shares in the account
of each participant will be held by Computershare in non-certificated form in
the name of the participant, and each participant will be able to vote those
shares at a stockholder meeting or by proxy. A participant may also send other
stock certificates held by them to Computershare to be held in non-certificated
form. There is no service fee charged to participants for reinvesting
distributions. If a participant elects to sell shares from a Plan account,
Computershare will deduct a $2.50 fee plus brokerage commissions from the sale
transaction. If a nominee is the registered owner of your shares, the nominee
will maintain the accounts on your behalf.
How can I get more information on the Plans?
You
can call an Investor Services Representative at (800) 221-4268 or you can
request a copy of the Plan for your Fund from Computershare. All correspondence
(including notifications) should be directed to: [Name of Fund] Distribution
Reinvestment and Cash Purchase Plan, c/o Computershare, PO Box 43010,
Providence, RI 02940-3010, telephone (800)
426-5523.
20 | The Royce Funds 2011 Annual Report to Stockholders
|
|
December 31, 2011 |
|
|
|
Schedule of Investments |
|
|
|
|
|
|
|
|
|
|
SHARES |
|
VALUE |
|
||
COMMON STOCKS 114.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Discretionary 12.2% |
|
|
|
|
|
|
|
Auto Components - 0.4% |
|
|
|
|
|
|
|
China XD Plastics 1 |
|
|
79,200 |
|
$ |
422,928 |
|
Gentex Corporation |
|
|
50,000 |
|
|
1,479,500 |
|
Minth Group |
|
|
1,693,200 |
|
|
1,587,116 |
|
|
|
524,000 |
|
|
24,626 |
|
|
Williams Controls |
|
|
37,499 |
|
|
414,739 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
3,928,909 |
|
|
|
|
|
|
|
||
Automobiles - 0.3% |
|
|
|
|
|
|
|
Thor Industries |
|
|
50,000 |
|
|
1,371,500 |
|
Winnebago Industries 1 |
|
|
222,500 |
|
|
1,642,050 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
3,013,550 |
|
|
|
|
|
|
|
||
Distributors - 1.0% |
|
|
|
|
|
|
|
|
|
230,000 |
|
|
6,918,400 |
|
|
Weyco Group |
|
|
97,992 |
|
|
2,405,704 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
9,324,104 |
|
|
|
|
|
|
|
||
Diversified Consumer Services - 1.5% |
|
|
|
|
|
|
|
Anhanguera Educacional Participacoes |
|
|
80,000 |
|
|
862,083 |
|
ChinaCast Education 1 |
|
|
135,642 |
|
|
830,129 |
|
|
|
59,500 |
|
|
129,115 |
|
|
MegaStudy |
|
|
13,700 |
|
|
1,308,160 |
|
Regis Corporation |
|
|
233,800 |
|
|
3,869,390 |
|
Sotheby's |
|
|
175,700 |
|
|
5,012,721 |
|
Steiner Leisure 1 |
|
|
15,042 |
|
|
682,756 |
|
Universal Technical Institute 1 |
|
|
153,021 |
|
|
1,955,608 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
14,649,962 |
|
|
|
|
|
|
|
||
Hotels, Restaurants & Leisure - 0.2% |
|
|
|
|
|
|
|
Benihana 1 |
|
|
3,300 |
|
|
33,759 |
|
CEC Entertainment |
|
|
64,100 |
|
|
2,208,245 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
2,242,004 |
|
|
|
|
|
|
|
||
Household Durables - 2.4% |
|
|
|
|
|
|
|
|
|
14,100 |
|
|
237,867 |
|
|
Ekornes |
|
|
55,000 |
|
|
901,210 |
|
Ethan Allen Interiors |
|
|
345,800 |
|
|
8,198,918 |
|
Hanssem |
|
|
39,100 |
|
|
690,699 |
|
Harman International Industries |
|
|
51,000 |
|
|
1,940,040 |
|
Mohawk Industries 1 |
|
|
150,200 |
|
|
8,989,470 |
|
NVR 1 |
|
|
500 |
|
|
343,000 |
|
Universal Electronics 1 |
|
|
10,000 |
|
|
168,700 |
|
Woongjin Coway |
|
|
50,000 |
|
|
1,588,541 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
23,058,445 |
|
|
|
|
|
|
|
||
Internet & Catalog Retail - 0.3% |
|
|
|
|
|
|
|
Manutan International |
|
|
40,573 |
|
|
1,774,893 |
|
Takkt |
|
|
106,000 |
|
|
1,168,863 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
2,943,756 |
|
|
|
|
|
|
|
||
Leisure Equipment & Products - 0.3% |
|
|
|
|
|
|
|
Beneteau |
|
|
65,000 |
|
|
680,750 |
|
Shimano |
|
|
53,000 |
|
|
2,575,289 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
3,256,039 |
|
|
|
|
|
|
|
||
Media - 1.1% |
|
|
|
|
|
|
|
Global Sources 1 |
|
|
49,171 |
|
|
238,480 |
|
Lamar Advertising Cl. A 1 |
|
|
51,000 |
|
|
1,402,500 |
|
Morningstar |
|
|
109,800 |
|
|
6,527,610 |
|
|
|
|
|
|
|
|
|
Consumer Discretionary (continued) |
|
SHARES |
|
VALUE |
|
||
Media (continued) |
|
|
|
|
|
|
|
Pico Far East Holdings |
|
|
13,679,000 |
|
$ |
2,448,151 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
10,616,741 |
|
|
|
|
|
|
|
||
Multiline Retail - 0.1% |
|
|
|
|
|
|
|
New World Department Store China |
|
|
1,754,700 |
|
|
998,606 |
|
|
|
|
|
|
|
||
Specialty Retail - 1.6% |
|
|
|
|
|
|
|
Ascena Retail Group 1 |
|
|
68,280 |
|
|
2,029,282 |
|
Dickson Concepts (International) |
|
|
434,300 |
|
|
225,912 |
|
|
|
17,821 |
|
|
70,927 |
|
|
|
|
24,400 |
|
|
588,772 |
|
|
Hengdeli Holdings |
|
|
1,660,250 |
|
|
540,833 |
|
Jos. A. Bank Clothiers 1 |
|
|
17,000 |
|
|
828,920 |
|
Lewis Group |
|
|
200,000 |
|
|
1,985,742 |
|
Luk Fook Holdings (International) |
|
|
202,000 |
|
|
704,839 |
|
Men's Wearhouse (The) |
|
|
31,000 |
|
|
1,004,710 |
|
Sa Sa International Holdings |
|
|
1,200,000 |
|
|
662,838 |
|
Stein Mart 1 |
|
|
167,800 |
|
|
1,142,718 |
|
Systemax 1 |
|
|
224,000 |
|
|
3,675,840 |
|
West Marine 1 |
|
|
131,100 |
|
|
1,524,693 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
14,986,026 |
|
|
|
|
|
|
|
||
Textiles, Apparel & Luxury Goods - 3.0% |
|
|
|
|
|
|
|
Anta Sports Products |
|
|
653,200 |
|
|
780,483 |
|
Carter's 1 |
|
|
236,000 |
|
|
9,395,160 |
|
|
|
45,700 |
|
|
91,400 |
|
|
Columbia Sportswear |
|
|
47,197 |
|
|
2,197,020 |
|
Daphne International Holdings |
|
|
1,400,800 |
|
|
1,560,132 |
|
Grendene |
|
|
300,000 |
|
|
1,236,831 |
|
J.G. Boswell Company 4 |
|
|
2,292 |
|
|
1,570,020 |
|
|
|
163,600 |
|
|
477,712 |
|
|
|
|
95,437 |
|
|
238,592 |
|
|
Pacific Textiles Holdings |
|
|
3,470,000 |
|
|
1,965,854 |
|
Stella International Holdings |
|
|
788,700 |
|
|
1,714,168 |
|
Texwinca Holdings |
|
|
301,000 |
|
|
334,074 |
|
Unifi 1 |
|
|
40,333 |
|
|
306,531 |
|
Van de Velde |
|
|
10,000 |
|
|
457,259 |
|
Warnaco Group (The) 1 |
|
|
55,700 |
|
|
2,787,228 |
|
Wolverine World Wide |
|
|
100,000 |
|
|
3,564,000 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
28,676,464 |
|
|
|
|
|
|
|
||
Total (Cost $99,807,989) |
|
|
|
|
|
117,694,606 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Consumer Staples 2.3% |
|
|
|
|
|
|
|
Beverages - 0.1% |
|
|
|
|
|
|
|
|
|
50,000 |
|
|
332,500 |
|
|
MGP Ingredients |
|
|
127,400 |
|
|
642,096 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
974,596 |
|
|
|
|
|
|
|
||
Food & Staples Retailing - 0.4% |
|
|
|
|
|
|
|
FamilyMart |
|
|
90,000 |
|
|
3,636,482 |
|
|
|
|
|
|
|
||
Food Products - 1.8% |
|
|
|
|
|
|
|
Alico |
|
|
27,000 |
|
|
522,990 |
|
Asian Citrus Holdings |
|
|
387,800 |
|
|
202,224 |
|
Binggrae |
|
|
23,296 |
|
|
1,205,244 |
|
BW Plantation |
|
|
875,100 |
|
|
108,091 |
|
Cal-Maine Foods |
|
|
41,400 |
|
|
1,513,998 |
|
First Resources |
|
|
1,204,800 |
|
|
1,402,604 |
|
|
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
2011 Annual Report to Stockholders | 21 |
|
|
|
|
Schedule of Investments |
|
|
|
|
|
|
|
|
|
|
SHARES |
|
VALUE |
|
||
Consumer Staples (continued) |
|
|
|
|
|
|
|
Food Products (continued) |
|
|
|
|
|
|
|
Hershey Creamery 4 |
|
|
709 |
|
$ |
1,205,300 |
|
|
|
76,800 |
|
|
181,248 |
|
|
|
|
110,000 |
|
|
2,840,200 |
|
|
Seneca Foods Cl. B 1 |
|
|
13,251 |
|
|
345,056 |
|
Super Group |
|
|
890,000 |
|
|
902,317 |
|
Tootsie Roll Industries |
|
|
278,566 |
|
|
6,593,657 |
|
|
|
598,676 |
|
|
83,695 |
|
|
Westway Group |
|
|
31,500 |
|
|
176,400 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
17,283,024 |
|
|
|
|
|
|
|
||
Total (Cost $20,158,826) |
|
|
|
|
|
21,894,102 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Diversified Investment Companies 0.5% |
|
|
|
|
|
|
|
Closed-End Funds - 0.5% |
|
|
|
|
|
|
|
Central Fund of Canada Cl. A |
|
|
226,000 |
|
|
4,429,600 |
|
|
|
|
|
|
|
||
Total (Cost $2,031,251) |
|
|
|
|
|
4,429,600 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Energy 6.0% |
|
|
|
|
|
|
|
Energy Equipment & Services - 5.3% |
|
|
|
|
|
|
|
|
|
15,300 |
|
|
608,787 |
|
|
|
|
456,250 |
|
|
1,026,563 |
|
|
CARBO Ceramics |
|
|
29,700 |
|
|
3,662,901 |
|
Ensco ADR |
|
|
57,600 |
|
|
2,702,592 |
|
Ensign Energy Services |
|
|
225,100 |
|
|
3,590,552 |
|
Helmerich & Payne |
|
|
98,000 |
|
|
5,719,280 |
|
ION Geophysical 1 |
|
|
361,500 |
|
|
2,215,995 |
|
Oceaneering International |
|
|
9,900 |
|
|
456,687 |
|
Oil States International 1 |
|
|
152,723 |
|
|
11,663,456 |
|
Pason Systems |
|
|
97,000 |
|
|
1,142,577 |
|
SEACOR Holdings 1 |
|
|
73,866 |
|
|
6,571,119 |
|
ShawCor Cl. A |
|
|
82,500 |
|
|
2,338,748 |
|
|
|
68,000 |
|
|
635,120 |
|
|
TGS-NOPEC Geophysical |
|
|
96,000 |
|
|
2,126,788 |
|
Tidewater |
|
|
36,000 |
|
|
1,774,800 |
|
Trican Well Service |
|
|
169,900 |
|
|
2,926,866 |
|
Unit Corporation 1 |
|
|
34,000 |
|
|
1,577,600 |
|
Willbros Group 1 |
|
|
103,800 |
|
|
380,946 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
51,121,377 |
|
|
|
|
|
|
|
||
Oil, Gas & Consumable Fuels - 0.7% |
|
|
|
|
|
|
|
Bill Barrett 1 |
|
|
50,000 |
|
|
1,703,500 |
|
Cimarex Energy |
|
|
61,300 |
|
|
3,794,470 |
|
|
|
141,134 |
|
|
1,524,247 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
7,022,217 |
|
|
|
|
|
|
|
||
Total (Cost $37,440,084) |
|
|
|
|
|
58,143,594 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Financials 20.6% |
|
|
|
|
|
|
|
Capital Markets - 9.7% |
|
|
|
|
|
|
|
A.F.P. Provida ADR |
|
|
22,100 |
|
|
1,445,782 |
|
ABG Sundal Collier Holding |
|
|
115,000 |
|
|
70,951 |
|
Affiliated Managers Group 1 |
|
|
47,600 |
|
|
4,567,220 |
|
AllianceBernstein Holding L.P. |
|
|
514,600 |
|
|
6,730,968 |
|
AP Alternative Assets L.P. |
|
|
233,200 |
|
|
1,970,540 |
|
Artio Global Investors Cl. A |
|
|
235,000 |
|
|
1,146,800 |
|
ASA Gold and Precious Metals |
|
|
40,000 |
|
|
1,047,600 |
|
|
|
|
|
|
|
|
|
|
|
SHARES |
|
VALUE |
|
||
Financials (continued) |
|
|
|
|
|
|
|
Capital Markets (continued) |
|
|
|
|
|
|
|
Ashmore Group |
|
|
868,000 |
|
$ |
4,502,333 |
|
Azimut Holding |
|
|
72,183 |
|
|
578,755 |
|
Banca Generali |
|
|
86,000 |
|
|
801,400 |
|
Bank Sarasin & Co. Cl. B |
|
|
33,120 |
|
|
967,895 |
|
Banque Privee Edmond de Rothschild |
|
|
23 |
|
|
587,672 |
|
|
|
130,000 |
|
|
144,300 |
|
|
BT Investment Management |
|
|
207,000 |
|
|
382,154 |
|
Close Brothers Group |
|
|
43,000 |
|
|
413,696 |
|
Coronation Fund Managers |
|
|
526,000 |
|
|
1,479,111 |
|
Cowen Group Cl. A 1 |
|
|
1,154,458 |
|
|
2,990,046 |
|
Daewoo Securities |
|
|
5,000 |
|
|
45,139 |
|
Eaton Vance |
|
|
85,300 |
|
|
2,016,492 |
|
Egyptian Financial Group-Hermes |
|
|
|
|
|
|
|
Holding 1 |
|
|
783,125 |
|
|
1,298,553 |
|
Epoch Holding Corporation |
|
|
25,000 |
|
|
555,750 |
|
Equity Trustees |
|
|
38,314 |
|
|
521,587 |
|
F&C Asset Management |
|
|
60,000 |
|
|
60,986 |
|
FBR & Co. 1 |
|
|
576,200 |
|
|
1,181,210 |
|
Federated Investors Cl. B |
|
|
224,700 |
|
|
3,404,205 |
|
Fiducian Portfolio Services |
|
|
227,000 |
|
|
239,141 |
|
GAMCO Investors Cl. A |
|
|
90,575 |
|
|
3,939,107 |
|
GFI Group |
|
|
166,247 |
|
|
684,938 |
|
GIMV |
|
|
22,500 |
|
|
1,073,969 |
|
|
|
200,000 |
|
|
336,000 |
|
|
GP Investments BDR 1 |
|
|
15,604 |
|
|
33,212 |
|
Investec |
|
|
118,000 |
|
|
621,231 |
|
IOOF Holdings |
|
|
123,592 |
|
|
647,219 |
|
Jupiter Fund Management |
|
|
75,000 |
|
|
252,867 |
|
KKR & Co. L.P. |
|
|
415,000 |
|
|
5,324,450 |
|
Lazard Cl. A |
|
|
317,700 |
|
|
8,295,147 |
|
MVC Capital |
|
|
234,200 |
|
|
2,714,378 |
|
Oppenheimer Holdings Cl. A |
|
|
75,000 |
|
|
1,207,500 |
|
Paris Orleans et Cie |
|
|
188,359 |
|
|
3,559,242 |
|
Partners Group Holding |
|
|
12,200 |
|
|
2,128,798 |
|
Perpetual |
|
|
14,085 |
|
|
294,317 |
|
Phatra Capital |
|
|
375,000 |
|
|
341,720 |
|
Platinum Asset Management |
|
|
149,000 |
|
|
536,438 |
|
Rathbone Brothers |
|
|
35,400 |
|
|
582,748 |
|
Reinet Investments 1 |
|
|
164,948 |
|
|
2,932,203 |
|
Schroders |
|
|
41,100 |
|
|
838,704 |
|
SEI Investments |
|
|
321,700 |
|
|
5,581,495 |
|
SHUAA Capital 1 |
|
|
485,000 |
|
|
72,622 |
|
SPARX Group 1 |
|
|
1,320 |
|
|
91,922 |
|
Sprott |
|
|
269,600 |
|
|
1,532,254 |
|
Teton Advisors Cl. A 4 |
|
|
723 |
|
|
9,761 |
|
Treasury Group |
|
|
51,500 |
|
|
191,207 |
|
Trust Company (The) |
|
|
100,584 |
|
|
516,444 |
|
UOB-Kay Hian Holdings |
|
|
190,000 |
|
|
224,856 |
|
Value Partners Group |
|
|
8,016,800 |
|
|
4,097,893 |
|
Vontobel Holding |
|
|
20,400 |
|
|
456,084 |
|
VZ Holding |
|
|
8,500 |
|
|
873,257 |
|
Waddell & Reed Financial Cl. A |
|
|
139,300 |
|
|
3,450,461 |
|
Westwood Holdings Group |
|
|
23,460 |
|
|
857,463 |
|
|
|
22 | 2011 Annual Report to Stockholders |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
|
|
December 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARES |
|
|
VALUE |
|
Financials (continued) |
|
|
|
|
|
|
|
Capital Markets (continued) |
|
|
|
|
|
|
|
Woori Investment & Securities |
|
|
14,911 |
|
$ |
137,202 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
93,587,395 |
|
|
|
|
|
|
|
||
Commercial Banks - 1.4% |
|
|
|
|
|
|
|
Ameriana Bancorp |
|
|
40,000 |
|
|
160,800 |
|
Bank of N.T. Butterfield & Son 1 |
|
|
882,304 |
|
|
1,014,650 |
|
BCB Holdings 1 |
|
|
598,676 |
|
|
251,031 |
|
Center Bancorp |
|
|
44,868 |
|
|
438,360 |
|
Commercial National Financial |
|
|
37,996 |
|
|
897,465 |
|
Farmers & Merchants Bank of Long |
|
|
|
|
|
|
|
Beach |
|
|
1,200 |
|
|
4,860,000 |
|
Fauquier Bankshares |
|
|
160,800 |
|
|
1,744,680 |
|
Hawthorn Bancshares |
|
|
27,458 |
|
|
168,318 |
|
M&T Bank |
|
|
16,927 |
|
|
1,292,207 |
|
Mauritius Commercial Bank |
|
|
40,000 |
|
|
227,598 |
|
Mechanics Bank |
|
|
200 |
|
|
2,280,000 |
|
Old Point Financial |
|
|
25,000 |
|
|
251,250 |
|
Peapack-Gladstone Financial |
|
|
10,500 |
|
|
112,770 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
13,699,129 |
|
|
|
|
|
|
|
||
Consumer Finance - 0.3% |
|
|
|
|
|
|
|
|
|
42,000 |
|
|
3,087,000 |
|
|
|
|
|
|
|
|
||
Diversified Financial Services - 0.5% |
|
|
|
|
|
|
|
Banca Finnat Euramerica |
|
|
1,060,000 |
|
|
394,972 |
|
Interactive Brokers Group Cl. A |
|
|
100,000 |
|
|
1,494,000 |
|
PICO Holdings 1 |
|
|
106,100 |
|
|
2,183,538 |
|
RHJ International 1 |
|
|
102,500 |
|
|
465,639 |
|
State Bank of Mauritius |
|
|
46,000 |
|
|
131,652 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
4,669,801 |
|
|
|
|
|
|
|
||
Insurance - 5.6% |
|
|
|
|
|
|
|
Alleghany Corporation 1 |
|
|
35,619 |
|
|
10,161,744 |
|
Argo Group International Holdings |
|
|
64,751 |
|
|
1,875,189 |
|
Brown & Brown |
|
|
291,800 |
|
|
6,603,434 |
|
Crawford & Company Cl. B |
|
|
1,160 |
|
|
7,146 |
|
Discovery Holdings |
|
|
120,000 |
|
|
646,636 |
|
|
|
32,000 |
|
|
470,400 |
|
|
E-L Financial |
|
|
19,900 |
|
|
6,641,472 |
|
Enstar Group 1 |
|
|
11,000 |
|
|
1,080,200 |
|
Erie Indemnity Cl. A |
|
|
50,000 |
|
|
3,908,000 |
|
Hilltop Holdings 1 |
|
|
290,400 |
|
|
2,453,880 |
|
Independence Holding |
|
|
317,658 |
|
|
2,582,560 |
|
Platinum Underwriters Holdings |
|
|
139,000 |
|
|
4,741,290 |
|
Primerica |
|
|
170,000 |
|
|
3,950,800 |
|
ProAssurance Corporation |
|
|
22,000 |
|
|
1,756,040 |
|
RLI |
|
|
80,724 |
|
|
5,881,551 |
|
Validus Holdings |
|
|
16,300 |
|
|
513,450 |
|
White Mountains Insurance Group |
|
|
1,050 |
|
|
476,133 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
53,749,925 |
|
|
|
|
|
|
|
||
Real Estate Investment Trusts (REITs) - 0.6% |
|
|
|
|
|
|
|
Colony Financial |
|
|
405,178 |
|
|
6,365,346 |
|
|
|
|
|
|
|
||
Real Estate Management & Development - 1.9% |
|
|
|
|
|
|
|
Altisource Portfolio Solutions 1 |
|
|
41,199 |
|
|
2,067,366 |
|
Consolidated-Tomoka Land |
|
|
63,564 |
|
|
1,720,677 |
|
E-House China Holdings ADR |
|
|
406,100 |
|
|
1,734,047 |
|
Forestar Group 1 |
|
|
180,000 |
|
|
2,723,400 |
|
Kennedy-Wilson Holdings |
|
|
150,000 |
|
|
1,587,000 |
|
|
|
|
|
|
|
|
|
|
|
SHARES |
|
VALUE |
|
||
Financials (continued) |
|
|
|
|
|
|
|
Real Estate Management & Development (continued) |
|
|
|
|
|
|
|
Midland Holdings |
|
|
1,927,800 |
|
$ |
1,002,796 |
|
|
|
127,000 |
|
|
1,861,820 |
|
|
|
|
222,000 |
|
|
5,434,560 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
18,131,666 |
|
|
|
|
|
|
|
||
Thrifts & Mortgage Finance - 0.6% |
|
|
|
|
|
|
|
CFS Bancorp |
|
|
150,000 |
|
|
649,500 |
|
HopFed Bancorp |
|
|
108,721 |
|
|
706,686 |
|
Kearny Financial |
|
|
70,862 |
|
|
673,189 |
|
MyState |
|
|
152,000 |
|
|
522,365 |
|
Ocwen Financial 1 |
|
|
123,600 |
|
|
1,789,728 |
|
|
|
444,200 |
|
|
1,710,170 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
6,051,638 |
|
|
|
|
|
|
|
||
Total (Cost $229,860,099) |
|
|
|
|
|
199,341,900 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Health Care 7.3% |
|
|
|
|
|
|
|
Biotechnology - 0.2% |
|
|
|
|
|
|
|
|
|
98,746 |
|
|
1,463,416 |
|
|
3SBio ADR 1 |
|
|
21,600 |
|
|
220,752 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
1,684,168 |
|
|
|
|
|
|
|
||
Health Care Equipment & Supplies - 2.3% |
|
|
|
|
|
|
|
Allied Healthcare Products 1 |
|
|
180,512 |
|
|
613,741 |
|
Analogic Corporation |
|
|
40,135 |
|
|
2,300,538 |
|
Atrion Corporation |
|
|
15,750 |
|
|
3,783,622 |
|
bioMerieux |
|
|
13,800 |
|
|
986,623 |
|
Carl Zeiss Meditec |
|
|
163,700 |
|
|
3,457,699 |
|
CONMED Corporation 1 |
|
|
81,500 |
|
|
2,092,105 |
|
DiaSorin |
|
|
30,000 |
|
|
756,748 |
|
|
|
55,000 |
|
|
200,200 |
|
|
IDEXX Laboratories 1 |
|
|
40,201 |
|
|
3,093,869 |
|
Kossan Rubber Industries |
|
|
700,600 |
|
|
718,281 |
|
Nihon Kohden |
|
|
25,100 |
|
|
619,266 |
|
Straumann Holding |
|
|
4,000 |
|
|
690,301 |
|
Top Glove |
|
|
700,000 |
|
|
1,104,101 |
|
Urologix 1 |
|
|
315,500 |
|
|
340,740 |
|
Young Innovations |
|
|
62,550 |
|
|
1,853,356 |
|
Zoll Medical 1 |
|
|
400 |
|
|
25,272 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
22,636,462 |
|
|
|
|
|
|
|
||
Health Care Providers & Services - 0.7% |
|
|
|
|
|
|
|
Cross Country Healthcare 1 |
|
|
30,000 |
|
|
166,500 |
|
Landauer |
|
|
75,500 |
|
|
3,888,250 |
|
|
|
28,100 |
|
|
209,907 |
|
|
MWI Veterinary Supply 1 |
|
|
10,000 |
|
|
664,400 |
|
VCA Antech 1 |
|
|
72,900 |
|
|
1,439,775 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
6,368,832 |
|
|
|
|
|
|
|
||
Life Sciences Tools & Services - 2.9% |
|
|
|
|
|
|
|
Affymetrix 1 |
|
|
10,000 |
|
|
40,900 |
|
Albany Molecular Research 1 |
|
|
85,000 |
|
|
249,050 |
|
|
|
21,888 |
|
|
2,102,124 |
|
|
EPS |
|
|
512 |
|
|
985,818 |
|
Furiex Pharmaceuticals 1 |
|
|
8,333 |
|
|
139,244 |
|
|
|
266,650 |
|
|
4,562,381 |
|
|
|
|
20,000 |
|
|
424,600 |
|
|
Mettler-Toledo International 1 |
|
|
33,500 |
|
|
4,948,285 |
|
|
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
2011 Annual Report to Stockholders | 23 |
|
|
|
|
Schedule of Investments |
|
|
|
|
|
|
|
|
|
|
SHARES |
|
VALUE |
|
||
Health Care (continued) |
|
|
|
|
|
|
|
Life Sciences Tools & Services (continued) |
|
|
|
|
|
|
|
|
|
312,400 |
|
$ |
6,479,176 |
|
|
PerkinElmer |
|
|
185,800 |
|
|
3,716,000 |
|
Techne Corporation |
|
|
71,000 |
|
|
4,846,460 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
28,494,038 |
|
|
|
|
|
|
|
||
Pharmaceuticals - 1.2% |
|
|
|
|
|
|
|
Adcock Ingram Holdings |
|
|
230,000 |
|
|
1,759,357 |
|
Almirall |
|
|
140,000 |
|
|
962,146 |
|
Boiron |
|
|
60,000 |
|
|
1,554,654 |
|
Daewoong Pharmaceutical |
|
|
17,582 |
|
|
442,602 |
|
Hikma Pharmaceuticals |
|
|
60,000 |
|
|
577,716 |
|
Kalbe Farma |
|
|
800,000 |
|
|
299,972 |
|
Recordati |
|
|
215,000 |
|
|
1,554,104 |
|
Santen Pharmaceutical |
|
|
72,000 |
|
|
2,965,311 |
|
Virbac |
|
|
9,000 |
|
|
1,396,626 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
11,512,488 |
|
|
|
|
|
|
|
||
Total (Cost $51,570,332) |
|
|
|
|
|
70,695,988 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Industrials 27.9% |
|
|
|
|
|
|
|
Aerospace & Defense - 2.0% |
|
|
|
|
|
|
|
Cubic Corporation |
|
|
8,600 |
|
|
374,874 |
|
Ducommun |
|
|
117,200 |
|
|
1,494,300 |
|
HEICO Corporation |
|
|
168,281 |
|
|
9,841,073 |
|
HEICO Corporation Cl. A |
|
|
51,718 |
|
|
2,035,103 |
|
Hexcel Corporation 1 |
|
|
47,500 |
|
|
1,149,975 |
|
Moog Cl. A 1 |
|
|
25,000 |
|
|
1,098,250 |
|
National Presto Industries |
|
|
3,000 |
|
|
280,800 |
|
|
|
62,430 |
|
|
3,424,286 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
19,698,661 |
|
|
|
|
|
|
|
||
Air Freight & Logistics - 1.8% |
|
|
|
|
|
|
|
C. H. Robinson Worldwide |
|
|
50,000 |
|
|
3,489,000 |
|
Forward Air |
|
|
209,750 |
|
|
6,722,488 |
|
|
|
149,400 |
|
|
4,845,042 |
|
|
UTi Worldwide |
|
|
175,000 |
|
|
2,325,750 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
17,382,280 |
|
|
|
|
|
|
|
||
Airlines - 0.0% |
|
|
|
|
|
|
|
|
|
11,200 |
|
|
174,720 |
|
|
|
|
|
|
|
|
||
Building Products - 1.1% |
|
|
|
|
|
|
|
American Woodmark |
|
|
123,335 |
|
|
1,684,756 |
|
Burnham Holdings Cl. B 4 |
|
|
36,000 |
|
|
484,200 |
|
Simpson Manufacturing |
|
|
258,400 |
|
|
8,697,744 |
|
Sung Kwang Bend |
|
|
15,700 |
|
|
258,941 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
11,125,641 |
|
|
|
|
|
|
|
||
Commercial Services & Supplies - 2.5% |
|
|
|
|
|
|
|
Brink's Company (The) |
|
|
206,320 |
|
|
5,545,882 |
|
Cintas Corporation |
|
|
25,000 |
|
|
870,250 |
|
CompX International Cl. A |
|
|
185,300 |
|
|
2,729,469 |
|
Copart 1 |
|
|
74,890 |
|
|
3,586,482 |
|
Kimball International Cl. B |
|
|
286,180 |
|
|
1,450,932 |
|
Moshi Moshi Hotline |
|
|
220,000 |
|
|
2,072,236 |
|
Ritchie Bros. Auctioneers |
|
|
337,700 |
|
|
7,456,416 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
23,711,667 |
|
|
|
|
|
|
|
||
Construction & Engineering - 1.6% |
|
|
|
|
|
|
|
EMCOR Group |
|
|
199,400 |
|
|
5,345,914 |
|
|
|
|
|
|
|
|
|
|
|
SHARES |
|
VALUE |
|
||
Industrials (continued) |
|
|
|
|
|
|
|
Construction & Engineering (continued) |
|
|
|
|
|
|
|
Integrated Electrical Services 1 |
|
|
266,349 |
|
$ |
511,390 |
|
Jacobs Engineering Group 1 |
|
|
81,400 |
|
|
3,303,212 |
|
KBR |
|
|
175,000 |
|
|
4,877,250 |
|
Raubex Group |
|
|
650,000 |
|
|
1,074,939 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
15,112,705 |
|
|
|
|
|
|
|
||
Electrical Equipment - 3.1% |
|
|
|
|
|
|
|
AZZ |
|
|
43,000 |
|
|
1,953,920 |
|
Belden |
|
|
57,800 |
|
|
1,923,584 |
|
Franklin Electric |
|
|
104,600 |
|
|
4,556,376 |
|
Fushi Copperweld 1 |
|
|
132,931 |
|
|
999,641 |
|
GrafTech International 1 |
|
|
395,090 |
|
|
5,392,978 |
|
Jinpan International |
|
|
138,384 |
|
|
1,127,138 |
|
Powell Industries 1 |
|
|
92,400 |
|
|
2,890,272 |
|
Preformed Line Products |
|
|
91,600 |
|
|
5,464,856 |
|
Regal-Beloit |
|
|
116,500 |
|
|
5,938,005 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
30,246,770 |
|
|
|
|
|
|
|
||
Industrial Conglomerates - 0.6% |
|
|
|
|
|
|
|
Raven Industries |
|
|
96,200 |
|
|
5,954,780 |
|
|
|
|
|
|
|
||
Machinery - 10.1% |
|
|
|
|
|
|
|
Armstrong Industrial |
|
|
2,776,100 |
|
|
481,572 |
|
Burckhardt Compression Holding |
|
|
18,400 |
|
|
4,603,428 |
|
China Automation Group |
|
|
594,800 |
|
|
172,315 |
|
CLARCOR |
|
|
92,500 |
|
|
4,624,075 |
|
Columbus McKinnon 1 |
|
|
133,100 |
|
|
1,689,039 |
|
Donaldson Company |
|
|
92,800 |
|
|
6,317,824 |
|
FAG Bearings India |
|
|
28,000 |
|
|
553,594 |
|
Flowserve Corporation |
|
|
9,200 |
|
|
913,744 |
|
Gardner Denver |
|
|
25,900 |
|
|
1,995,854 |
|
Graco |
|
|
116,376 |
|
|
4,758,615 |
|
Hardinge |
|
|
26,193 |
|
|
210,854 |
|
IDEX Corporation |
|
|
67,400 |
|
|
2,501,214 |
|
Industrea |
|
|
1,064,700 |
|
|
1,067,196 |
|
Kennametal |
|
|
155,000 |
|
|
5,660,600 |
|
Lincoln Electric Holdings |
|
|
216,760 |
|
|
8,479,651 |
|
Lindsay Corporation |
|
|
6,400 |
|
|
351,296 |
|
Mueller Water Products Cl. A |
|
|
72,500 |
|
|
176,900 |
|
NN 1 |
|
|
197,100 |
|
|
1,182,600 |
|
Nordson Corporation |
|
|
204,200 |
|
|
8,408,956 |
|
Pfeiffer Vacuum Technology |
|
|
31,000 |
|
|
2,713,034 |
|
|
|
255,352 |
|
|
4,981,917 |
|
|
Rational |
|
|
8,000 |
|
|
1,741,543 |
|
RBC Bearings 1 |
|
|
47,000 |
|
|
1,959,900 |
|
Rotork |
|
|
12,500 |
|
|
374,661 |
|
Semperit AG Holding |
|
|
72,500 |
|
|
2,791,536 |
|
Spirax-Sarco Engineering |
|
|
82,000 |
|
|
2,385,190 |
|
Valmont Industries |
|
|
53,800 |
|
|
4,884,502 |
|
WABCO Holdings 1 |
|
|
103,800 |
|
|
4,504,920 |
|
Wabtec Corporation |
|
|
103,325 |
|
|
7,227,584 |
|
Woodward |
|
|
231,600 |
|
|
9,479,388 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
97,193,502 |
|
|
|
|
|
|
|
||
Marine - 0.5% |
|
|
|
|
|
|
|
Kirby Corporation 1 |
|
|
80,000 |
|
|
5,267,200 |
|
|
|
|
|
|
|
||
Professional Services - 2.3% |
|
|
|
|
|
|
|
Advisory Board (The) 1 |
|
|
128,500 |
|
|
9,535,985 |
|
|
|
24 | 2011 Annual Report to Stockholders |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
|
December 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
SHARES |
|
VALUE |
|
||
Industrials (continued) |
|
|
|
|
|
|
|
Professional Services (continued) |
|
|
|
|
|
|
|
CRA International 1 |
|
|
64,187 |
|
$ |
1,273,470 |
|
FTI Consulting 1 |
|
|
7,850 |
|
|
332,997 |
|
JobStreet Corporation |
|
|
50,000 |
|
|
35,174 |
|
ManpowerGroup |
|
|
78,600 |
|
|
2,809,950 |
|
Michael Page International |
|
|
200,000 |
|
|
1,083,373 |
|
On Assignment 1 |
|
|
375,400 |
|
|
4,196,972 |
|
Robert Half International |
|
|
98,900 |
|
|
2,814,694 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
22,082,615 |
|
|
|
|
|
|
|
||
Road & Rail - 1.4% |
|
|
|
|
|
|
|
Arkansas Best |
|
|
100,500 |
|
|
1,936,635 |
|
Frozen Food Express Industries 1 |
|
|
286,635 |
|
|
369,759 |
|
Landstar System |
|
|
99,400 |
|
|
4,763,248 |
|
Patriot Transportation Holding 1 |
|
|
212,958 |
|
|
4,621,189 |
|
Universal Truckload Services |
|
|
114,976 |
|
|
2,086,814 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
13,777,645 |
|
|
|
|
|
|
|
||
Trading Companies & Distributors - 0.9% |
|
|
|
|
|
|
|
AerCap Holdings 1 |
|
|
45,000 |
|
|
508,050 |
|
|
|
40,700 |
|
|
964,997 |
|
|
Lawson Products |
|
|
161,431 |
|
|
2,490,880 |
|
MSC Industrial Direct Cl. A |
|
|
60,948 |
|
|
4,360,830 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
8,324,757 |
|
|
|
|
|
|
|
||
Total (Cost $164,936,029) |
|
|
|
|
|
270,052,943 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Information Technology 22.3% |
|
|
|
|
|
|
|
Communications Equipment - 2.4% |
|
|
|
|
|
|
|
AAC Technologies Holdings |
|
|
556,700 |
|
|
1,254,378 |
|
ADTRAN |
|
|
121,700 |
|
|
3,670,472 |
|
Arris Group 1 |
|
|
140,350 |
|
|
1,518,587 |
|
Bel Fuse Cl. A |
|
|
36,672 |
|
|
770,845 |
|
Black Box |
|
|
43,798 |
|
|
1,228,096 |
|
Cogo Group 1 |
|
|
107,515 |
|
|
193,527 |
|
Comba Telecom Systems Holdings |
|
|
812,128 |
|
|
655,633 |
|
Comtech Telecommunications |
|
|
30,000 |
|
|
858,600 |
|
|
|
579,000 |
|
|
3,971,940 |
|
|
EVS Broadcast Equipment |
|
|
37,298 |
|
|
1,906,299 |
|
Globecomm Systems 1 |
|
|
183,700 |
|
|
2,513,016 |
|
Sonus Networks 1 |
|
|
1,124,000 |
|
|
2,697,600 |
|
VTech Holdings |
|
|
105,550 |
|
|
1,058,680 |
|
Zhone Technologies 1 |
|
|
422,103 |
|
|
363,009 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
22,660,682 |
|
|
|
|
|
|
|
||
Computers & Peripherals - 1.0% |
|
|
|
|
|
|
|
China Digital TV Holding Co. ADR |
|
|
5,000 |
|
|
15,850 |
|
Diebold |
|
|
151,600 |
|
|
4,558,612 |
|
|
|
8,517 |
|
|
121,367 |
|
|
Intermec 1 |
|
|
23,000 |
|
|
157,780 |
|
Intevac 1 |
|
|
57,450 |
|
|
425,130 |
|
SanDisk Corporation 1 |
|
|
9,600 |
|
|
472,416 |
|
SMART Technologies Cl. A 1 |
|
|
75,000 |
|
|
276,750 |
|
|
|
156,880 |
|
|
3,765,120 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
9,793,025 |
|
|
|
|
|
|
|
||
Electronic Equipment, Instruments & Components - 9.9% |
|
|
|
|
|
|
|
Agilysys 1 |
|
|
165,125 |
|
|
1,312,744 |
|
Anixter International 1 |
|
|
61,795 |
|
|
3,685,454 |
|
|
|
|
|
|
|
|
|
|
|
SHARES |
|
VALUE |
|
||
Information Technology (continued) |
|
|
|
|
|
|
|
Electronic Equipment, Instruments & Components (continued) |
|
|
|
|
|
|
|
Benchmark Electronics 1 |
|
|
165,200 |
|
$ |
2,225,244 |
|
China 3C Group 1 |
|
|
6,600 |
|
|
396 |
|
China High Precision Automation Group 2 |
|
|
2,720,300 |
|
|
478,773 |
|
Chroma Ate |
|
|
519,982 |
|
|
1,020,078 |
|
Cognex Corporation |
|
|
236,200 |
|
|
8,453,598 |
|
Coherent 1 |
|
|
235,900 |
|
|
12,330,493 |
|
|
|
169,700 |
|
|
5,177,547 |
|
|
|
|
127,500 |
|
|
5,199,450 |
|
|
FLIR Systems |
|
|
105,000 |
|
|
2,632,350 |
|
Hana Microelectronics |
|
|
1,391,300 |
|
|
833,457 |
|
Hollysys Automation Technologies 1 |
|
|
65,727 |
|
|
546,849 |
|
Image Sensing Systems 1 |
|
|
8,310 |
|
|
54,140 |
|
IPG Photonics 1 |
|
|
73,600 |
|
|
2,492,832 |
|
Kingboard Chemical Holdings |
|
|
311,900 |
|
|
921,652 |
|
Mercury Computer Systems 1 |
|
|
40,500 |
|
|
538,245 |
|
Molex |
|
|
72,600 |
|
|
1,732,236 |
|
National Instruments |
|
|
251,850 |
|
|
6,535,507 |
|
Newport Corporation 1 |
|
|
523,500 |
|
|
7,124,835 |
|
Nice |
|
|
8,368 |
|
|
25,884 |
|
Perceptron 1 |
|
|
357,700 |
|
|
1,702,652 |
|
|
|
195,700 |
|
|
5,358,266 |
|
|
Pulse Electronics |
|
|
286,200 |
|
|
801,360 |
|
Richardson Electronics |
|
|
395,712 |
|
|
4,863,300 |
|
|
|
320,600 |
|
|
7,325,710 |
|
|
Tech Data 1 |
|
|
136,500 |
|
|
6,744,465 |
|
TTM Technologies 1 |
|
|
211,400 |
|
|
2,316,944 |
|
Vaisala Cl. A |
|
|
166,000 |
|
|
3,523,467 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
95,957,928 |
|
|
|
|
|
|
|
||
Internet Software & Services - 0.9% |
|
|
|
|
|
|
|
|
|
21,500 |
|
|
292,400 |
|
|
Perficient 1 |
|
|
10,000 |
|
|
100,100 |
|
RealNetworks |
|
|
61,350 |
|
|
460,125 |
|
ValueClick 1 |
|
|
145,000 |
|
|
2,362,050 |
|
|
|
175,000 |
|
|
5,355,000 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
8,569,675 |
|
|
|
|
|
|
|
||
IT Services - 3.6% |
|
|
|
|
|
|
|
Convergys Corporation 1 |
|
|
121,000 |
|
|
1,545,170 |
|
CoreLogic 1 |
|
|
94,000 |
|
|
1,215,420 |
|
Forrester Research 1 |
|
|
40,300 |
|
|
1,367,782 |
|
Gartner 1 |
|
|
101,000 |
|
|
3,511,770 |
|
Hackett Group 1 |
|
|
655,000 |
|
|
2,449,700 |
|
ManTech International Cl. A |
|
|
35,400 |
|
|
1,105,896 |
|
MAXIMUS |
|
|
188,400 |
|
|
7,790,340 |
|
|
|
164,962 |
|
|
2,928,075 |
|
|
NeuStar Cl. A 1 |
|
|
84,287 |
|
|
2,880,087 |
|
Sapient Corporation |
|
|
706,602 |
|
|
8,903,185 |
|
Total System Services |
|
|
47,200 |
|
|
923,232 |
|
Western Union |
|
|
7,000 |
|
|
127,820 |
|
Yucheng Technologies 1 |
|
|
83,946 |
|
|
188,879 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
34,937,356 |
|
|
|
|
|
|
|
||
Office Electronics - 0.1% |
|
|
|
|
|
|
|
Zebra Technologies Cl. A 1 |
|
|
28,100 |
|
|
1,005,418 |
|
|
|
|
|
|
|
||
Semiconductors & Semiconductor Equipment - 2.4% |
|
|
|
|
|
|
|
Aixtron ADR |
|
|
72,000 |
|
|
914,400 |
|
|
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
2011 Annual Report to Stockholders | 25 |
|
Royce Value Trust |
|
Schedule of Investments |
|
|
|
|
|
|
|
|
|
|
|
SHARES |
|
|
VALUE |
|
Information Technology (continued) |
|
|
|
|
|
|
|
Semiconductors & Semiconductor Equipment (continued) |
|
|
|
|
|
|
|
Analog Devices |
|
|
16,004 |
|
$ |
572,623 |
|
ASM Pacific Technology |
|
|
110,000 |
|
|
1,234,324 |
|
BE Semiconductor Industries 4 |
|
|
58,000 |
|
|
376,420 |
|
Cymer 1 |
|
|
105,700 |
|
|
5,259,632 |
|
|
|
262,850 |
|
|
5,598,705 |
|
|
Exar Corporation 1 |
|
|
157,576 |
|
|
1,024,244 |
|
International Rectifier 1 |
|
|
120,000 |
|
|
2,330,400 |
|
Power Integrations |
|
|
49,000 |
|
|
1,624,840 |
|
|
|
240,200 |
|
|
3,273,926 |
|
|
|
|
66,000 |
|
|
1,372,800 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
23,582,314 |
|
|
|
|
|
|
|
||
Software - 2.0% |
|
|
|
|
|
|
|
ACI Worldwide 1 |
|
|
131,150 |
|
|
3,756,136 |
|
Advent Software 1 |
|
|
68,500 |
|
|
1,668,660 |
|
ANSYS 1 |
|
|
105,600 |
|
|
6,048,768 |
|
Aspen Technology 1 |
|
|
42,100 |
|
|
730,435 |
|
Blackbaud |
|
|
41,890 |
|
|
1,160,353 |
|
JDA Software Group 1 |
|
|
49,900 |
|
|
1,616,261 |
|
|
|
36,255 |
|
|
88,462 |
|
|
|
|
50,000 |
|
|
383,500 |
|
|
NetScout Systems 1 |
|
|
66,000 |
|
|
1,161,600 |
|
SimCorp |
|
|
17,350 |
|
|
2,649,340 |
|
|
|
20,000 |
|
|
15,200 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
19,278,715 |
|
|
|
|
|
|
|
||
Total (Cost $191,860,117) |
|
|
|
|
|
215,785,113 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Materials 9.9% |
|
|
|
|
|
|
|
Chemicals - 1.4% |
|
|
|
|
|
|
|
Cabot Corporation |
|
|
58,000 |
|
|
1,864,120 |
|
CF Industries Holdings |
|
|
4,500 |
|
|
652,410 |
|
Fufeng Group |
|
|
3,029,100 |
|
|
1,388,458 |
|
Hanfeng Evergreen 1 |
|
|
7,700 |
|
|
20,785 |
|
Hawkins |
|
|
110,978 |
|
|
4,090,649 |
|
Huchems Fine Chemical |
|
|
40,056 |
|
|
693,678 |
|
Intrepid Potash 1 |
|
|
94,727 |
|
|
2,143,672 |
|
OM Group 1 |
|
|
90,000 |
|
|
2,015,100 |
|
Victrex |
|
|
70,000 |
|
|
1,191,462 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
14,060,334 |
|
|
|
|
|
|
|
||
Construction Materials - 0.8% |
|
|
|
|
|
|
|
Ash Grove Cement Cl. B 4 |
|
|
50,518 |
|
|
6,567,340 |
|
Mardin Cimento Sanayii |
|
|
325,000 |
|
|
1,026,270 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
7,593,610 |
|
|
|
|
|
|
|
||
Containers & Packaging - 1.3% |
|
|
|
|
|
|
|
Broadway Industrial Group |
|
|
1,677,200 |
|
|
381,461 |
|
Greif Cl. A |
|
|
119,444 |
|
|
5,440,674 |
|
Mayr-Melnhof Karton |
|
|
75,000 |
|
|
6,358,976 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
12,181,111 |
|
|
|
|
|
|
|
||
Metals & Mining - 6.2% |
|
|
|
|
|
|
|
Allegheny Technologies |
|
|
3,500 |
|
|
167,300 |
|
Aquarius Platinum |
|
|
350,000 |
|
|
851,743 |
|
AuRico Gold 1 |
|
|
218,300 |
|
|
1,748,583 |
|
Centamin 1 |
|
|
1,200,000 |
|
|
1,548,000 |
|
Central Steel & Wire 4 |
|
|
6,062 |
|
|
3,970,610 |
|
|
|
|
|
|
|
|
|
|
|
SHARES |
|
VALUE |
|
||
Materials (continued) |
|
|
|
|
|
|
|
Metals & Mining (continued) |
|
|
|
|
|
|
|
Cliffs Natural Resources |
|
|
37,200 |
|
$ |
2,319,420 |
|
Commercial Metals |
|
|
36,600 |
|
|
506,178 |
|
|
|
300,000 |
|
|
715,583 |
|
|
Endeavour Mining (Warrants) 1 |
|
|
75,000 |
|
|
51,534 |
|
Fresnillo |
|
|
40,000 |
|
|
948,572 |
|
Hecla Mining |
|
|
300,000 |
|
|
1,569,000 |
|
Hidili Industry International |
|
|
|
|
|
|
|
Development |
|
|
60,000 |
|
|
17,768 |
|
Hochschild Mining |
|
|
375,500 |
|
|
2,249,799 |
|
IAMGOLD Corporation |
|
|
95,620 |
|
|
1,515,577 |
|
|
|
560,000 |
|
|
481,600 |
|
|
Maharashtra Seamless |
|
|
265,000 |
|
|
1,590,349 |
|
Major Drilling Group International |
|
|
345,100 |
|
|
5,264,151 |
|
Medusa Mining |
|
|
525,000 |
|
|
2,389,517 |
|
New Gold 1 |
|
|
135,000 |
|
|
1,360,800 |
|
Northam Platinum |
|
|
460,000 |
|
|
1,709,497 |
|
Nucor Corporation |
|
|
166,050 |
|
|
6,570,598 |
|
Orbit Garant Drilling 1 |
|
|
36,100 |
|
|
183,911 |
|
Reliance Steel & Aluminum |
|
|
152,920 |
|
|
7,445,675 |
|
Royal Gold |
|
|
34,400 |
|
|
2,319,592 |
|
Schnitzer Steel Industries Cl. A |
|
|
100,000 |
|
|
4,228,000 |
|
Silvercorp Metals |
|
|
116,500 |
|
|
745,600 |
|
Sims Metal Management ADR |
|
|
232,383 |
|
|
2,986,122 |
|
Synalloy Corporation |
|
|
178,800 |
|
|
1,836,276 |
|
Worthington Industries |
|
|
185,000 |
|
|
3,030,300 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
60,321,655 |
|
|
|
|
|
|
|
||
Paper & Forest Products - 0.2% |
|
|
|
|
|
|
|
|
|
3,563,800 |
|
|
676,822 |
|
|
Duratex |
|
|
120,000 |
|
|
573,864 |
|
|
|
3,296,000 |
|
|
437,113 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
1,687,799 |
|
|
|
|
|
|
|
||
Total (Cost $82,708,352) |
|
|
|
|
|
95,844,509 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Telecommunication Services 0.6% |
|
|
|
|
|
|
|
Wireless Telecommunication Services - 0.6% |
|
|
|
|
|
|
|
Telephone & Data Systems |
|
|
210,000 |
|
|
5,436,900 |
|
|
|
|
|
|
|
||
Total (Cost $5,760,616) |
|
|
|
|
|
5,436,900 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Miscellaneous 6 4.9% |
|
|
|
|
|
|
|
Total (Cost $50,772,540) |
|
|
|
|
|
47,162,474 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
TOTAL COMMON STOCKS |
|
|
|
|
|
|
|
(Cost $936,906,235) |
|
|
|
|
|
1,106,481,729 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
PREFERRED STOCK 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Cost $796,469) |
|
|
55,000 |
|
|
1,278,090 |
|
|
|
|
|
|
|
|
|
26 | 2011 Annual Report to Stockholders |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
|
December 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
PRINCIPAL |
|
|
|
|
|
|
|
AMOUNT |
|
VALUE |
|
||
CORPORATE BOND 0.0% |
|
|
|
|
|
|
|
GAMCO Investors (Debentures) 0.00% |
|
|
|
|
|
|
|
due 12/31/15 |
|
|
|
|
|
|
|
(Cost $289,840) |
|
$ |
289,800 |
|
$ |
190,063 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
REPURCHASE AGREEMENT 8.7% |
|
|
|
|
|
|
|
Fixed Income Clearing Corporation, |
|
|
|
|
|
|
|
0.01% dated 12/30/11, due 1/3/12, |
|
|
|
|
|
|
|
maturity value $84,083,093 (collateralized |
|
|
|
|
|
|
|
by obligations of various U.S. Government |
|
|
|
|
|
|
|
Agencies, 4.25% due 9/30/12, valued at |
|
|
|
|
|
|
|
$86,188,947) |
|
|
|
|
|
|
|
(Cost $84,083,000) |
|
|
|
|
|
84,083,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALUE |
|
|
COLLATERAL RECEIVED FOR SECURITIES |
|
|
|
|
Money Market Funds |
|
|
|
|
Federated Government Obligations Fund |
|
|
|
|
(7 day yield-0.0098%) |
|
|
|
|
(Cost $18,943,423) |
|
$ |
18,943,423 |
|
|
|
|
||
|
|
|
|
|
TOTAL INVESTMENTS 125.3% |
|
|
|
|
(Cost $1,041,018,967) |
|
|
1,210,976,305 |
|
|
|
|
|
|
LIABILITIES LESS CASH |
|
|
(24,336,432 |
) |
|
|
|
|
|
PREFERRED STOCK (22.8)% |
|
|
(220,000,000 |
) |
|
|
|
||
|
|
|
|
|
NET ASSETS APPLICABLE TO COMMON |
|
$ |
966,639,873 |
|
|
|
|
|
|
New additions in 2011. |
|
Non-income producing. |
|
Securities for which market quotations are not readily available represent 0.3% of net assets. These securities have been valued at their fair value under procedures approved by the Fund's Board of Directors. These securities are defined as Level 3 securities due to the use of significant unobservable inputs in the determination of fair value. See Notes to Financial Statements. |
|
All or a portion of these securities were on loan at December 31, 2011. Total market value of loaned securities at December 31, 2011, was $18,351,690. |
|
These securities are defined as Level 2 securities due to fair value being based on quoted prices for similar securities. See Notes to Financial Statements. |
|
At December 31, 2011, the Fund owned 5% or more of the Company's outstanding voting securities thereby making the Company an Affiliated Company as that term is defined in the Investment Company Act of 1940. See Notes to Financial Statements. |
|
Includes securities first acquired in 2011 and less than 1% of net assets applicable to Common Stockholders. |
|
|
|
Bold indicates the Fund's 20 largest equity holdings in terms of December 31, 2011, market value. |
|
|
|
|
TAX INFORMATION: The cost of total investments for Federal income tax purposes was $1,036,798,390. At December 31, 2011, net unrealized appreciation for all securities was $174,177,915, consisting of aggregate gross unrealized appreciation of $315,126,090 and aggregate gross unrealized depreciation of $140,948,175. The primary difference between book and tax basis cost is the timing of the recognition of losses on securities sold. |
|
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
2011 Annual Report to Stockholders | 27 |
|
|
Royce Value Trust |
December 31, 2011 |
|
|
Statement of Assets and Liabilities |
|
|
|
|
|
|
ASSETS: |
|
|
|
|
Investments at value (including collateral on loaned securities) |
|
|
|
|
Non-Affiliated Companies (cost $951,503,401) |
|
$ |
1,125,183,135 |
|
Affiliated Companies (cost $5,432,566) |
|
|
1,710,170 |
|
Total investments at value |
|
|
1,126,893,305 |
|
Repurchase agreements (at cost and value) |
|
|
84,083,000 |
|
Cash and foreign currency |
|
|
157,955 |
|
Receivable for investments sold |
|
|
422,538 |
|
Receivable for dividends and interest |
|
|
1,223,901 |
|
Prepaid expenses and other assets |
|
|
438,826 |
|
Total Assets |
|
|
1,213,219,525 |
|
LIABILITIES: |
|
|
|
|
Payable for collateral on loaned securities |
|
|
18,943,423 |
|
Payable for investments purchased |
|
|
6,565,490 |
|
Payable for investment advisory fee |
|
|
495,287 |
|
Preferred dividends accrued but not yet declared |
|
|
288,451 |
|
Accrued expenses |
|
|
287,001 |
|
Total Liabilities |
|
|
26,579,652 |
|
PREFERRED STOCK: |
|
|
|
|
5.90% Cumulative Preferred Stock - $0.001 par value, $25 liquidation value per share; 8,800,000 shares outstanding |
|
|
220,000,000 |
|
Total Preferred Stock |
|
|
220,000,000 |
|
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS |
|
$ |
966,639,873 |
|
ANALYSIS OF NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: |
|
|
|
|
Common Stock paid-in capital - $0.001 par value per share; 68,171,494 shares outstanding (150,000,000 shares authorized) |
|
$ |
792,918,593 |
|
Undistributed net investment income (loss) |
|
|
2,529,467 |
|
Accumulated net realized gain (loss) on investments and foreign currency |
|
|
1,534,891 |
|
Net unrealized appreciation (depreciation) on investments and foreign currency |
|
|
169,945,371 |
|
Preferred dividends accrued but not yet declared |
|
|
(288,449 |
) |
Net Assets applicable to Common Stockholders (net asset value per share - $14.18) |
|
$ |
966,639,873 |
|
Investments at identified cost (including $18,943,423 of collateral on loaned securities) |
|
$ |
956,935,967 |
|
Market value of loaned securities |
|
|
18,351,690 |
|
|
|
28 | 2011 Annual Report to Stockholders |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
|
|
Royce Value Trust |
Year Ended December 31, 2011 |
|
|
Statement of Operations |
|
|
|
|
|
|
INVESTMENT INCOME: |
|
|
|
|
Income: |
|
|
|
|
Dividends1 |
|
$ |
16,894,268 |
|
Interest |
|
|
70,069 |
|
Securities lending |
|
|
291,553 |
|
Total income |
|
|
17,255,890 |
|
Expenses: |
|
|
|
|
Investment advisory fees |
|
|
9,250,388 |
|
Stockholder reports |
|
|
390,291 |
|
Custody and transfer agent fees |
|
|
353,506 |
|
Administrative and office facilities |
|
|
130,674 |
|
Directors' fees |
|
|
123,009 |
|
Professional fees |
|
|
93,940 |
|
Other expenses |
|
|
174,244 |
|
Total expenses |
|
|
10,516,052 |
|
Net investment income (loss) |
|
|
6,739,838 |
|
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: |
|
|
|
|
Net realized gain (loss): |
|
|
|
|
Investments in Non-Affiliated Companies |
|
|
36,155,485 |
|
Investments in Affiliated Companies |
|
|
(205,752 |
) |
Foreign currency transactions |
|
|
(235,955 |
) |
Net change in unrealized appreciation (depreciation): |
|
|
|
|
Investments and foreign currency translations |
|
|
(143,666,818 |
) |
Other assets and liabilities denominated in foreign currency |
|
|
(3,447 |
) |
Net realized and unrealized gain (loss) on investments and foreign currency |
|
|
(107,956,487 |
) |
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS |
|
|
(101,216,649 |
) |
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS |
|
|
(12,980,000 |
) |
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO
COMMON STOCKHOLDERS |
|
$ |
(114,196,649 |
) |
1 Net of foreign withholding tax of $586,096.
|
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
2011 Annual Report to Stockholders | 29 |
|
Royce Value Trust |
|
Statement of Changes in Net Assets Applicable to Common Stockholders |
|
|
|
|
|
|
|
|
|
|
Year ended |
|
Year ended |
|
||
|
|
12/31/11 |
|
12/31/10 |
|
||
INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
Net investment income (loss) |
|
$ |
6,739,838 |
|
$ |
15,554,527 |
|
Net realized gain (loss) on investments and foreign currency |
|
|
35,713,778 |
|
|
111,092,900 |
|
Net change in unrealized appreciation (depreciation) on investments and foreign currency |
|
|
(143,670,265 |
) |
|
143,429,334 |
|
Net increase (decrease) in net assets from investment operations |
|
|
(101,216,649 |
) |
|
270,076,761 |
|
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: |
|
|
|
|
|
|
|
Net investment income |
|
|
(2,024,508 |
) |
|
(12,980,000 |
) |
Net realized gain on investments and foreign currency |
|
|
(10,955,492 |
) |
|
|
|
Total distributions to Preferred Stockholders |
|
|
(12,980,000 |
) |
|
(12,980,000 |
) |
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO
COMMON STOCKHOLDERS |
|
|
(114,196,649 |
) |
|
257,096,761 |
|
DISTRIBUTIONS TO COMMON STOCKHOLDERS: |
|
|
|
|
|
|
|
Net investment income |
|
|
(5,275,650 |
) |
|
(1,980,699 |
) |
Net realized gain on investments and foreign currency |
|
|
(28,548,829 |
) |
|
|
|
Return of capital |
|
|
(18,288,444 |
) |
|
|
|
Total distributions to Common Stockholders |
|
|
(52,112,923 |
) |
|
(1,980,699 |
) |
CAPITAL STOCK TRANSACTIONS: |
|
|
|
|
|
|
|
Reinvestment of distributions to Common Stockholders |
|
|
27,070,308 |
|
|
986,327 |
|
Total capital stock transactions |
|
|
27,070,308 |
|
|
986,327 |
|
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS |
|
|
(139,239,264 |
) |
|
256,102,389 |
|
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: |
|
|
|
|
|
|
|
Beginning of year |
|
|
1,105,879,137 |
|
|
849,776,748 |
|
End of year (including undistributed net investment income (loss) of
$2,529,467 at 12/31/11 and |
|
$ |
966,639,873 |
|
$ |
1,105,879,137 |
|
|
|
30 | 2011 Annual Report to Stockholders |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
|
Royce Value Trust |
|
Financial Highlights |
This table is presented to show selected data for a share of Common Stock outstanding throughout each period, and to assist stockholders in evaluating the Fund's performance for the periods presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
|||||||||||||
|
|
|
||||||||||||||
|
|
2011 |
|
2010 |
|
2009 |
|
2008 |
|
2007 |
|
|||||