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

   
     

REVIEW AND REPORT

     

TO STOCKHOLDERS

   
             
             
           
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
     


             
             
             
 
 
   
             
             
             
             




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.
     
 
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 Fund’s 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.
     

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 Royce’s 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 investor’s 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.
 
     

This page is not part of the 2011 Annual Report to Stockholders




 

 

Table of Contents

 

 

 

 

Annual Review

 

   

 

 

Performance Table

2

 

 

Letter to Our Stockholders

3

 

 

Postscript: Why Volatility Is the Friend of Discipline

9

 

 

Small-Cap Market Cycle Performance

10

 

 

2011: In Quotes

64

 

 

   

 

 

Annual Report to Stockholders

11

 

 

   

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 company’s 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 company’s 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.





(MESSAGE)

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.

Important Performance and Risk Information

All performance information in this Review and Report reflects past performance, is presented on a total return basis and reflects the reinvestment of distributions. 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 sold. Current performance may be higher or lower than performance quoted. Current month-end performance may be obtained at www.roycefunds.com. Investments in securities of micro-cap, small-cap and/or mid-cap companies may involve considerably more risk than investments in securities of larger-cap companies.

2  |  This page is not part of the 2011 Annual Report to Stockholders



Letter to Our Stockholders

 
 
Capitulation
A few years ago, we wrote that markets resemble Tolstoy’s families: All the happy ones are alike, and all the unhappy ones are unhappy in their own way. The past calendar year’s 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 globe’s 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 one’s 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 weren’t 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 weren’t 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
world’s 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
 
 
Continued on page 6...





     
Letter to Our Stockholders

 
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 couldn’t 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 market’s most tumultuous months. Again, this was unlike 2002, which for many Internet companies was an “Emperor’s 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 year’s 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 world’s 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




 

 

 

 

 

 


run was dominated by an October rally just as the third-quarter downturn was primarily driven by a disastrous August and September. Each major index finished the fourth quarter with double-digit gains. Small-caps led the way in this dynamic period, gaining 15.5%, compared to a gain of 11.8% for both the Russell 1000 and S&P 500 Indexes, and 7.9% for the Nasdaq. Yet after all the Sturm und Drang in 2011—in its second half in particular—here is where the four domestic indexes wound up for the calendar year: The Russell 2000 fell 4.2%, the Russell 1000 gained 1.5%, the S&P 500 climbed 2.1%, and the Nasdaq lost 1.8%. After a year of prices leaping and crashing, the U.S. stock markets did not move much at all. Were the bullish October and the less wildly volatile months of November and December positive signs that investors were beginning to pay less attention to headlines and more to company fundamentals? We would like to think so, but this remains an open question.

 










The disconnect between stock prices and fundamentals for many companies, including many small-caps, remains wide as we enter 2012.

     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.

 

     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.

 

 

 

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.
 
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
 
 
Continued on page 8...





     
Letter to Our Stockholders

 
Consternation
Loss unfortunately looms rather large over this year’s 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 sector’s 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.
 
   2011 NAV TOTAL RETURNS FOR THE ROYCE FUNDS VS. RUSSELL 2000 as of 12/31/11
 
          Even as we grapple with the year’s 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.
 
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 we’ve 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.
 
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.
 
 




     
Letter to Our Stockholders

 
 
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 business’s 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,
 
   
Charles M. Royce
President
  W. Whitney George
Vice President
  Jack E. Fockler, Jr.
Vice President
 


January 31, 2012


 
8  |  This page is not part of the 2011 Annual Report to Stockholders



Why Volatility Is the Friend of Discipline  


 

 

 

Throughout much of Royce’s 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 investor’s 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

 

     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. 
     This is where volatility becomes key. In highly volatile markets, increasingly


 

 

 

 

 

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.
      The term ‘volatile’ originally derives from Chemistry, defined in that discipline by the American Heritage Dictionary as “evaporating readily at normal temperatures and pressures” or “capable of being readily vaporized,” which unfortunately may describe some investors’ experiences with equity returns over the last few years. In a more general sense, it means (among other related things), “tending to vary often, as in price: the ups and downs of volatile stocks.” In one sense, then, the globe’s equity markets are volatile every day as each day’s trading brings changing prices. However, there is a range of price movement that is widely viewed as “normal” or “typical,“ though that range is admittedly flexible depending on current

 

image

 

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 company’s 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.
      The bulk of our purchases throughout 2011 (and large swaths of the last four years) have followed this pattern. Of course, few of the purchases made in 2011 have borne fruit to date. Since we typically hold stocks for two to five years, this is not troubling. If anything, the turbulence of the last few years has only solidified the importance of our long-term outlook. As we wade through a still unsettled global economy, governments throughout the developed


 

 

 

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.)
     Over the last few years, certainly since the fall of 2008, market volatility has seen frequent and often dramatic spikes, with the just-ended 2011 adding several more heart-stopping sessions, especially between August and November. It is not our task here to determine whether or not the market’s extreme behavior during this period was good, bad or otherwise. Instead, we want to offer our take on the market’s recent activity as an illustration of how we seek to use dramatic swings in share prices to help us build wealth for our shareholders over the long run.

 

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.
      So while last year was highly challenging and at times very frustrating, we have been pleased with the values that we have found in micro-cap, small-cap and mid-cap companies across the globe. Along with the slowly improving U.S. economy, these opportunities, which high volatility has been instrumental in creating, give us a quiet optimism about the years ahead, a sense of confidence made possible by the market’s wild swings.


 

This page is not part of the 2011 Annual Report to Stockholders  |  9



Small-Cap Market Cycle Performance

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 portfolio’s mettle is performance over full market cycle periods, which include both an up and down market period.

Since the Russell 2000’s 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 index’s 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.
 
 
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.
 
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    

     

Annual Report to Stockholders

   

Managers’ Discussions of Fund Performance

   
     
Royce Value Trust   12
     
Royce Micro-Cap Trust   14
     
Royce Focus Trust   16

History Since Inception

  18
     

Distribution Reinvestment and Cash Purchase Options

  20
     

Schedules of Investments and Other Financial Statements

   
     

Royce Value Trust

  21
     

Royce Micro-Cap Trust

  37
     

Royce Focus Trust

  51
     

Directors and Officers

  61
     

Notes to Performance and Other Important Information

  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

Coherent   1.3 %

HEICO Corporation   1.2  

Oil States International   1.2  

Alleghany Corporation   1.1  

Advisory Board (The)   1.0  

Woodward   1.0  

Carter’s   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  

                     
 

       
 
Royce Value Trust

 
Manager’s 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 year’s 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 year’s 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 Fund’s 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. RVT’s 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  
 
  Carter’s   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 Fund’s 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 Fund’s 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 Fund’s 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 Fund’s fifth-largest position at the end of the year. HEICO Corporation, the Fund’s 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 year’s 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 RVT’s next-worst-performing industry, the metals & mining group. The Financials sector was home to three of the Fund’s 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 business’s 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 firm’s 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 Fund’s 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
 
2 The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (7% of portfolio holdings as of 12/31/11).
 
3 Net leverage is the percentage, in excess of 100%, of the total value of equity type investments, divided by net assets applicable to Common Stockholders.
                             
       
  CAPITAL STRUCTURE
  Publicly Traded Securities Outstanding
at 12/31/11 at NAV or Liquidation Value
 
 

68.0 million shares
of Common Stock

  $967 million  
 
 

5.90% Cumulative
Preferred Stock

  $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  

America’s 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  

                     
 

   
 
     
Royce Micro-Cap Trust

 
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 Congress’s inability to pass a usually routine increase in the debt ceiling, Standard & Poor’s 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 year’s 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 quarter’s 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  
 
  America’s 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 Fund’s 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. RMT’s NAV average annual total return since inception was 10.1%.
     Not surprising in this negatively correlated period for stocks, all of the Fund’s 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 Fund’s 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 Fund’s 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 Fund’s 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 women’s 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 Fund’s 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 company’s Nigerian assets from 2007, along with a drop in the company’s backlog due to delays in large pipeline construction projects. We continue to hold shares because we like the company’s 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
Capitalization
1
$304 million  
 
  Weighted Average
P/E Ratio
2
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
 
2 The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (21% of portfolio holdings as of 12/31/11).
 
3 Net leverage is the percentage, in excess of 100%, of the total value of equity type investments, divided by net assets applicable to Common Stockholders.
                             
  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  

                     
 

       
 
Royce Focus Trust

 
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. Congress’s failure to pass a routine increase in the debt ceiling limit (and the subsequent downgrade to our nation’s 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 year’s final quarter were particularly frustrating because FUND’s struggles in the rally played a large role in both its underperformance and lackluster absolute result in 2011.
     We felt much better about the Fund’s 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 Royce’s 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. FUND’s NAV average annual total return since inception was 9.9%.
     Six of the Fund’s 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 Fund’s 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 Fund’s performance for 2011.

 
16  |  The Royce Funds 2011 Annual Report to Stockholders



               
           
           
           
Performance and Portfolio Review

           
that of Financials, the Fund’s next largest detractor on a sector basis. One industry within the Materials sector, metals & mining, registered larger net losses than any of the portfolio’s 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
Capitalization
1
$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
 
2 The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (6% of portfolio holdings as of 12/31/11).
 
3 Net leverage is the percentage, in excess of 100%, of the total value of equity type investments, divided by net assets applicable to Common Stockholders.
                             
  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.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

History

 

Amount
Invested

 

Purchase
Price
1

 

Shares

 

NAV
Value
2

 

Market
Value
2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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
Invested

 

 

Purchase
Price
1

 

 

Shares

 

 

NAV
Value
2

 

 

Market
Value
2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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



 

Distribution Reinvestment and Cash Purchase Options

 

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 Fund’s 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



 

 

Royce Value Trust

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

 

Norstar Founders Group 1,2

 

 

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%

 

 

 

 

 

 

 

LKQ Corporation 1,3

 

 

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

 

Corinthian Colleges 1,3

 

 

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%

 

 

 

 

 

 

 

Desarrolladora Homex ADR 1,3

 

 

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

 

Dover Saddlery 1,3

 

 

17,821

 

 

70,927

 

GameStop Corporation Cl. A 1,3

 

 

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

 

China Xiniya Fashion ADR 1,3

 

 

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

 

K-Swiss Cl. A 1,3

 

 

163,600

 

 

477,712

 

Lazare Kaplan International 1,4

 

 

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%

 

 

 

 

 

 

 

Heckmann Corporation 1,3

 

 

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



 

 

 

Royce Value Trust

   

 

   Schedule of Investments


 

 

 

 

 

 

 

 

 

 

SHARES

 

VALUE

 

Consumer Staples (continued)

 

 

 

 

 

 

 

Food Products (continued)

 

 

 

 

 

 

 

Hershey Creamery 4

 

 

709

 

$

1,205,300

 

Origin Agritech 1,3

 

 

76,800

 

 

181,248

 

Seneca Foods Cl. A 1,3

 

 

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

 

Waterloo Investment Holdings 1,2

 

 

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%

 

 

 

 

 

 

 

Atwood Oceanics 1,3

 

 

15,300

 

 

608,787

 

Cal Dive International 1,3

 

 

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

 

TETRA Technologies 1,3

 

 

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

 

Resolute Energy 1,3

 

 

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

 

BKF Capital Group 1,4

 

 

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

 

Gleacher & Company 1,3

 

 

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%

 

 

 

 

 

 

 

World Acceptance 1,3

 

 

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

 

eHealth 1,3

 

 

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

 

St. Joe Company (The) 1,3

 

 

127,000

 

 

1,861,820

 

Tejon Ranch 1,3

 

 

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

 

Timberland Bancorp 1,5

 

 

444,200

 

 

1,710,170

 

 

 

 

 

 

   

 

 

 

 

 

 

 

6,051,638

 

 

 

 

 

 

   

 

Total (Cost $229,860,099)

 

 

 

 

 

199,341,900

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

Health Care – 7.3%

 

 

 

 

 

 

 

Biotechnology - 0.2%

 

 

 

 

 

 

 

Pharmacyclics 1,3

 

 

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

 

DynaVox Cl. A 1,3

 

 

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

 

Metropolitan Health Networks 1,3

 

 

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

 

Bio-Rad Laboratories Cl. A 1

 

 

21,888

 

 

2,102,124

 

EPS

 

 

512

 

 

985,818

 

Furiex Pharmaceuticals 1

 

 

8,333

 

 

139,244

 

ICON ADR 1,3

 

 

266,650

 

 

4,562,381

 

Luminex Corporation 1,3

 

 

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




 

 

Royce Value Trust

   

 

   Schedule of Investments


 

 

 

 

 

 

 

 

 

 

SHARES

 

VALUE

 

Health Care (continued)

 

 

 

 

 

 

 

Life Sciences Tools & Services (continued)

 

 

 

 

 

 

 

PAREXEL International 1,3

 

 

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

 

Teledyne Technologies 1,3

 

 

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

 

Hub Group Cl. A 1,3

 

 

149,400

 

 

4,845,042

 

UTi Worldwide

 

 

175,000

 

 

2,325,750

 

 

 

 

 

 

   

 

 

 

 

 

 

 

17,382,280

 

 

 

 

 

 

   

 

Airlines - 0.0%

 

 

 

 

 

 

 

Spirit Airlines 1,3

 

 

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

 

PMFG 1,3

 

 

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

 

Air Lease Cl. A 1,3

 

 

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

 

Emulex Corporation 1,3

 

 

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

 

Electronics for Imaging 1,3

 

 

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

 

Steel Excel 1,4

 

 

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

 

Dolby Laboratories Cl. A 1,3

 

 

169,700

 

 

5,177,547

 

FEI Company 1

 

 

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

 

Plexus Corporation 1,3

 

 

195,700

 

 

5,358,266

 

Pulse Electronics

 

 

286,200

 

 

801,360

 

Richardson Electronics

 

 

395,712

 

 

4,863,300

 

Rofin-Sinar Technologies 1,3

 

 

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%

 

 

 

 

 

 

 

Active Network 1,3

 

 

21,500

 

 

292,400

 

Perficient 1

 

 

10,000

 

 

100,100

 

RealNetworks

 

 

61,350

 

 

460,125

 

ValueClick 1

 

 

145,000

 

 

2,362,050

 

VistaPrint 1,3

 

 

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

 

MoneyGram International 1,3

 

 

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

 

Diodes 1,3

 

 

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

 

Teradyne 1

 

 

240,200

 

 

3,273,926

 

Veeco Instruments 1,3

 

 

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

 

Majesco Entertainment 1,3

 

 

36,255

 

 

88,462

 

Net 1 UEPS Technologies 1,3

 

 

50,000

 

 

383,500

 

NetScout Systems 1

 

 

66,000

 

 

1,161,600

 

SimCorp

 

 

17,350

 

 

2,649,340

 

THQ 1,3

 

 

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

 

Endeavour Mining 1,3

 

 

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

 

Kimber Resources 1,3

 

 

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%

 

 

 

 

 

 

 

China Forestry Holdings 1,2

 

 

3,563,800

 

 

676,822

 

Duratex

 

 

120,000

 

 

573,864

 

Qunxing Paper Holdings 2

 

 

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%

 

 

 

 

 

 

 

Seneca Foods Conv. 1,2

 

 

 

 

 

 

 

(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
LOANED – 2.0%

 

 

 

 

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
AND OTHER ASSETS – (2.5)%

 

 

(24,336,432

)

 

 

 

 

 

PREFERRED STOCK – (22.8)%

 

 

(220,000,000

)

 

 

   

 

 

 

 

 

 

NET ASSETS APPLICABLE TO COMMON
STOCKHOLDERS – 100.0%

 

$

966,639,873

 

 

 

   

 



 

 

   

New additions in 2011.

1

Non-income producing.

2

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.

3

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.

4

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.

5

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.

6

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
FROM INVESTMENT OPERATIONS

 

$

(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
FROM INVESTMENT OPERATIONS

 

 

(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
$2,347,906 at 12/31/10)

 

$

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