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, Esq. | |
745 Fifth Avenue | ||
New York, NY 10151 |
Registrants telephone number, including
area code: (212) 508-4500
Date of fiscal year end: December 31, 2012
Date
of reporting period: January 1, 2013 June 30, 2013
Item 1. Reports to Shareholders.
SEMIANNUAL
REVIEW AND REPORT
TO STOCKHOLDERS
Royce Value Trust Royce Micro-Cap Trust Royce Focus Trust |
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www.roycefunds.com |
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 Funds Board of Directors. A closed-end fund raises cash for investment by issuing a fixed number of shares through initial and other public offerings that may include shelf offerings and periodic rights offerings. Proceeds from the offerings are invested in an actively managed portfolio of securities. Investors wanting to buy or sell shares of a publicly traded closed-end fund after the offerings must do so on a stock exchange, as with any publicly traded stock. This is in contrast to open-end mutual funds, in which the fund sells and redeems its shares on a continuous basis. |
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. |
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| 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. |
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| 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. |
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| The fixed capital structure allows permanent leverage to be employed as a means to enhance capital appreciation potential. |
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| Unlike Royces open-end funds, our closed-end funds are able to distribute capital gains on a quarterly basis. Each of the Funds has adopted a quarterly distribution policy for its common stock. Please see page 16-18 for more details. |
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We believe that the closed-end fund structure is very suitable for the long-term investor who understands the benefits of a stable pool of capital. |
Why Dividend Reinvestment is Important A very important component of an investors total return comes from the reinvestment of distributions. By reinvesting distributions, our investors can maintain an undiluted investment in a Fund. To get a fair idea of the impact of reinvested distributions, please see the charts on pages 11, 13, and 15. For additional information on the Funds Distribution Reinvestment and Cash Purchase Options and the benefits for stockholders, please see page 18 or visit our website at www.roycefunds.com. Each of the Boards of Directors of Royce Value Trust, Royce Micro-Cap Trust and Royce Focus Trust have authorized a managed distribution policy (MDP) paying quarterly distributions at an annual rate of 5% of the average of the prior four quarter-end net asset values. With each distribution, the Funds will issue a notice to stockholders and an accompanying press release which will provide detailed information regarding the amount and composition of the distribution and other information required by a Funds MDP. You should not draw any conclusions about a Funds investment performance from the amount of distributions or from the terms of a Funds MDP. A Funds Board of Directors may amend or terminate the MDP at any time without prior notice to stockholders; however, at this time, there are no reasonably foreseeable circumstances that might cause the termination of any of the MDPs. |
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Table of Contents | |
Semiannual Review | |
Performance Table | 2 |
Letter to Our Stockholders | 3 |
Postscript: Searching for Super Small-Cap Companies Through the Macro Noise |
Inside Back Cover |
Semiannual Report to Stockholders | 9 |
For 40 years, we have used a value approach to invest in small-cap securities. We focus primarily on the quality of a companys balance sheet, its ability to generate free cash flow, and other measures of profitability or sound financial condition. We then use these factors to assess the companys current worth, basing the assessment on either what we believe a knowledgeable buyer might pay to acquire the entire company or what we think the value of the company should be in the stock market. |
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Performance Table | ||||||||||||||||||||||||
NAV Average Annual Total Returns | Through June 30, 2013 | |||||||||||||||||||||||
Royce | Royce | Royce | Russell | Russell | Russell | |||||||||||||||||||
Value Trust | Micro-Cap Trust | Focus Trust | 2000 Index | Microcap Index | 2500 Index | |||||||||||||||||||
Year-to-Date1 | 12.42 | % | 13.43 | % | 2.60 | % | 15.86 | % | 18.32 | % | 15.42 | % | ||||||||||||
One-Year | 24.64 | 25.00 | 14.40 | 24.21 | 25.38 | 25.61 | ||||||||||||||||||
Three-Year | 16.17 | 17.06 | 10.57 | 18.67 | 18.28 | 19.57 | ||||||||||||||||||
Five-Year | 6.24 | 7.39 | 1.45 | 8.77 | 8.53 | 9.21 | ||||||||||||||||||
10-Year | 9.35 | 9.89 | 10.57 | 9.53 | 7.81 | 10.34 | ||||||||||||||||||
15-Year | 8.39 | 8.92 | 8.90 | 6.60 | n.a. | 8.07 | ||||||||||||||||||
20-Year | 10.30 | n.a. | n.a. | 8.88 | n.a. | 10.31 | ||||||||||||||||||
25-Year | 10.87 | n.a. | n.a. | 9.34 | n.a. | 10.83 | ||||||||||||||||||
Since Inception | 10.61 | 10.86 | 9.90 | n.a. | n.a. | n.a. | ||||||||||||||||||
Inception Date | 11/26/86 | 12/14/93 | 11/1/962 | n.a. | n.a. | n.a. | ||||||||||||||||||
1 Not annualized | ||||||||||||||||||||||||
2 Date Royce & Associates, LLC assumed investment management responsibility for the Fund. |
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.
Certain immaterial adjustments were made to the net assets of Royce Micro-Cap Trust at 12/31/12 for financial reporting purposes, and as a result the net asset value originally
calculated on that date and the total return based on that net asset value differs from the adjusted net asset value and total return reported in the Financial Highlights. All
indexes referenced are unmanaged and capitalization-weighted. Each indexs returns include net reinvested dividends and/or interest income. Russell Investment Group
is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. The Russell
2000 Index is an index of domestic small-cap stocks that measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 Index. The
Russell Microcap Index includes 1,000 of the smallest securities in the small-cap Russell 2000 Index, along with the next smallest eligible securities as determined by Russell.
The Russell 2500 Index is an index of the 2,500 smallest publicly traded U.S. companies in the Russell 3000 Index. |
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Letter to Our Stockholders |
Exile on Wall Street |
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The small-cap market reached peaks in July 2007 and April 2011 before surging to its most
recent record highs. Surveying the small-cap landscape from the vantage points of these
respective summits shows that each cycle (the second of which is still going on) has presented
a difficult environment for active managers such as the parties penning this letter. This has been particularly true of the most recent period, which has seen solid
results for the major small-cap indexes, ETFs, and other passive investment
vehicles, while the active managers who once routinely outperformed all of them
have achieved more muted results. The current phase has favored more defensive
sectors and investments with high dividend yields, such as REITs and MLPs.
Strong balance sheets and higher-quality metrics such as returns on invested
capital (ROIC) have also been out of favor in this world of easy money and zero
interest rates that tends to be more supportive of lower-quality businesses. And
we have not even mentioned the flight to fixed income, which, along with the
proliferation of ETFs, has been one of the most significant developments in the
investment world during the last three-plus years. These events took shape in a market that has featured regular spasms of high volatility and periods of declining stock prices, some of them of a historically extreme nature. These are periods in which fundamentally driven active management approaches such as ours have historically proven their worth. That many of our portfolios struggled to preserve their value as effectively as they have done historically during the market downturns since the pre-crisis peak in July 2007 has been frustrating and humbling, to say the least. Yet investing is a routinely humbling business. This is not the first time (and almost certainly wont be the last) |
By buying out-of-favor companies and rooting around beaten down sectors and industries, we do things every day that may not look particularly savvy to many on Wall Street, at least in the short run. After 40 years, we are used to doing things according to our own principles and long-term time frame and do not mind being something akin to exiles on Wall Street. |
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Charles M. Royce, President As it has for the past few years, sentiment once again shifted dramatically in the second quarter and volatility returned to the markets. However, unlike the previous few years, it was the bond market that felt the brunt of the pain as speculation that the Federal Reserve may soon pull back from its unprecedented stimulus efforts fueled a one percentage point jump in 10-year Treasury yields during the final two months of the quarter. After gaining 12.4% in the first quarter of 2013, the Russell 2000 Index advanced 3.1% in the second quarter, finishing the first half of the year with a 15.9% gain. At the same time, the CBOE Volatility Index (VIX), after hitting a fresh 2013 low in March 2013, spiked 33% in the second quarterthe largest quarterly increase since the third quarter of 2011. In the span of one quarter, we have transitioned from a world in which the idea that interest rates would remain indefinitely low to one in which the shift back to a more normalized yield environment is now center stage. Continued on page 6... |
Letter to Our Stockholders in which we have endured a prolonged relative slump versus the small-cap market as a whole.
But behind every contrarian, especially an out-of-sync one, is a disciplined investor. By buying
out-of-favor companies and rooting around beaten down sectors and industries, we do things
every day that may not look particularly savvy to many on Wall Street, at least in the short run. After
40 years, we are used to doing things according to our own principles and long-term time
frame and do not mind being something akin to exiles on Wall Street. It should come as no surprise, then, that we are not persuadedor even botheredby those voices suggesting that active management has perhaps seen its day in the sun. With ETFs and high-frequency trading seemingly making markets that much more efficient, with so many investors disenchanted with equities, and with sustained periods of relative underperformance in the books, perhaps (so the argument runs) active managers should simply switch to indexing or find another line of work. To be sure, the last several years have given us little to crow about (while serving up plenty of crow to eat). However, we remain as enthusiastic as ever about active management in general and value-oriented small-cap investing in particular. To paraphrase Mark Twain, we find reports of the death of active management to be greatly exaggerated. So while lower-quality stocks have dominated the market and outperformed many of our holdings through the current cycle, we are undeterred in our conviction that well-run, cash-rich businesses with high returns on invested capital remain the best route to building long-term wealth. It is also important to remember that many stocks possessing these attributes have done very well on an absolute basis through the current cycle even as they have suffered in comparison to their more defensive or higher-yielding cohorts. Finally, we have already seen signs of a change in which we think the kind of higher-quality companies that we favor can assume a leadership role. There were encouraging signals in May and in the second half of 2012 that investors were giving more thought to fundamentals. In short, we are excited about the days ahead. We are bullish not only on stocks but, more important, on our specific approach to quality and active management. Tumbling Dice When 2012 drew to a close, we were equally optimistic. The second half of 2012 offered much that was good for what ailed quality-centric investors. The last few months in particular saw a brief resurgence of quality as many companies with strong balance sheets, high ROIC, and strong cash flow characteristics outpaced the rest of the small-cap market. This rally did not last long into 2013, however, as more highly levered and lower-ROIC businesses soon resumed leadership. Quality stocks for the most part acquitted themselves well in the bullish first quarter; they simply did not attract as much interest as more defensive areas. The strongest sectors for the small-cap Russell 2000 Index during the first quarter were Health Care, Consumer Discretionary, and Financials, the latter drawing much of its strength from REITs. More cyclical sectors such as Technology and Energy, which we see as featuring some of the most attractively valued, high-quality companies available over the last couple of years, lagged. The result was a strong opening quarter for stocks across the board. Small-caps led, showing positive returns for the third consecutive quarter. The Russell 2000 gained 12.4% compared |
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to respective gains of 11.0% and 10.6% for the large-cap Russell 1000 and S&P 500 Indexes, while the more tech-oriented Nasdaq Composite rose 8.2%. Quality stocks resuming their back seat was not entirely surprising. Stocks as a whole have been on an encouraging roll since the low on June 2, 2012, so some give-back was not entirely unexpected, even if it was somewhat disappointing. |
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Going into the second quarter, we were confident that the rally could last, though we
also assumed that a correction would be a natural part of a longer-term bullish trend, as
has been the case over the past several years. While share prices all over the globe were
more volatile in the second quarter, on the domestic front a rocky market still resulted in
positive returns, with strength across all asset classes. The tech-oriented Nasdaq Composite
led for the quarter with a 4.2% advance. Small-cap edged out the large-cap indexes, with the
Russell 2000 up 3.1% for the quarter compared to respective gains of 2.9% and 2.7% for
the S&P 500 and Russell 1000 Indexes. |
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One-year results were also strong for the major indexes, with the Russell 2000 leading
(+24.2%), followed by the Russell 1000 (+21.2%), S&P 500 (+20.6%), and Nasdaq
(+16.0%). Three-year results were even more closely aligned, offering compelling evidence
of just how tightly correlated equity returns have been. Average annual total returns for the
three-year period ended June 30, 2013 for the Russell 2000 (+18.7%), the Russell 1000
(+18.6%), and S&P 500 (+18.5%) were within two-tenths of one another while the Nasdaq
rose 17.3% over the same span. That stocks continue to perform well could be seen by the fact
that trailing one-, five-, and 10-year results for the small-cap and two large-cap indexes were
well ahead of their returns for the same periods ended one year prior. Micro-cap returns also continued their ascent. The Russell Microcap Index gained 18.3% year-to-date through June 30, 2013. Its one-year result was also strong, up 25.4%. The micro-cap indexs trailing three-, five-, and 10-year results were also fine, though it trailed the Russell 2000 in these periods. By contrast, mid-caps narrowly underperformed year-to-datethe Russell Midcap Index rose 15.5% through the end of Junebut outpaced their small-cap peers for the one-, three-, 10-, 15-, 20-, and 25-year periods ended June 30, 2013. This impressive long-term record helps to explain why we think of mid-caps as the markets stealth asset class. Outside the U.S., short- and intermediate-term results were far less bullish. The first quarter saw positive, though lower, returns for the Russell ex-U.S. Small Cap Index, which climbed 6.5% while the Russell ex-U.S. Large Cap Index was up 3.1%. Second-quarter results slipped into the red as the Russell ex-U.S. Small Cap Index fell 4.5% and the Russell Global ex-U.S. Large Cap Index was down 2.9%. This resulted in considerably lower year-to-date results through June 30, 2013: the Russell ex-U.S. Small Cap Index was up 1.8% while its large-cap sibling managed only a 0.1% advance. In this context it was hardly surprising that one-, three-, and five-year results for the non-U.S. indexes were also well behind their U.S. equivalents for the periods ended June 30, 2013. |
We are bullish not only on stocks but, more important, on our specific approach to quality and active management. |
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From our perspective, the end to the
easy money bias that has been in place for several years presents an attractive environment for active managers with an absolute orientation like us, as underlying fundamentals and less-leveraged balance sheets should become increasingly more important. We have long thought that the ongoing efforts to reflate the economy through numerous quantitative easings and a zero interest rate policy would have unintended consequences. To be sure, the actions of the Fed have been distorting asset pricing and valuations in the equity market in a number of ways. Many of the fundamental qualities we hold so dear, for example, seem temporarily suspended in an investment world where highly-leveraged businesses are benefiting from the ability to restructure their debt, lower funding costs, and extend maturities. The unintended consequence of leveling the playing field has given lower-quality companies the luxury of time, which in a normal environment they would not have. It would not surprise us to see these trends reverse as tapering is implemented and monetary stimulus is slowly trimmed back and ultimately withdrawn. To be clear, our balance sheet scrutiny is paramount to our process, particularly our focus on risk. To that end, we have always chosen to focus on companies with high operating leverage. Our measure of financial leverage centers on the ratio of assets to stockholders equity, looking for a two-to-one ratio for non-financial companies. Continued on page 8... |
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Letter to Our Stockholders | ||
Shine a Light On an NAV (net asset value) basis, each of our three closed-end portfoliosRoyce Value Trust, Micro-Cap Trust, and Focus Trustunderperformed their respective benchmarks for the year-to-date period through the end of June (see table on opposite page). Market price results for Royce Value Trust and Royce Micro-Cap Trust were better on a relative basis. These two portfolios also posted strong absolute results on an NAV basis in the first half, which somewhat mitigated our disappointment with falling behind our benchmarks. Royce Focus Trust suffered in part from a relatively high exposure to metals & mining companies, many of which struggled in the first half. As a group, the Funds featured in this Semiannual Review and Report had strong results from several sectors, most notably Information Technology, Financials, Industrials, and Consumer Discretionary. Royce Focus Trust and, to a lesser extent, Royce Micro-Cap Trust each paid a price for their respective exposures to the Materials sector in the form of sizable net losses. Declines for the sector in both portfolios came overwhelmingly from the metals & mining industry, and especially from precious metals mining companies, a once sterling industry that has recently become a persistent trouble spot. In the first quarter cyclical companies mostly lagged defensive sectors, but the second quarter offered a more eclectic, and thus encouraging, mix. Within the Russell 2000, both Consumer-oriented sectors remained strong, as did Health Care, Information Technology, and Telecommunications Services. However, the more cyclical Energy, Materials, and Industrials sectors fell, as did more high-yielding areas such as REITs and Utilities. The S&P 500 showed a similarly scrambled pattern among large-cap sector returns. Although painful in the short term, we see this growing differentiation as a very positive sign that the market is beginning to break out of its correlation groove. |
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Let it Loose During the first half of 2013 the stock market displayed a broadly similar pattern of results to the first halves of 2010, 2011, and 2012. This was a model in which a robustly bullish first quarter gave way to a far more volatile second quarter, with a sudden shift in market sentiment driven primarily by global macro issues. However, this years first half also showed some notable differences that suggest a break with the markets previously unyielding pattern of the last three calendar yearsa pattern marked by closely correlated returns and, as a result, relatively uninspired results for many active managers. For example, during the first quarter of 2013 the market was remarkably good at tuning out a great deal of ominous political news. When Congress and the President failed to produce a long-term plan to tackle the deficit, the market mostly shrugged and continued to climb. When sequestration began to take effect in the aftermath of the stalled budget negotiations, stocks once again paused then resumed moving upward. This stood in stark contrast to what we saw in 2010, 2011, and most of the first half of 2012, when the markets seemed to react to little other than macro headlines that were themselves largely driven by political events. In addition, when macro issues did inspire a sell-off, year-to-date |
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2013 NAV YEAR-TO-DATE TOTAL RETURNS FOR THE ROYCE FUNDS VS. RUSSELL 2000, RUSSELL MICROCAP AND THE RUSSELL 2500 as of 6/30/13 |
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returns were not too adversely affected, with most stocks and domestic indexes
escaping the more uncertain second quarter of 2013 in the black despite a 33%
second-quarter spike in the CBOE Volatility Index (VIX). This increase was the
largest quarterly advance for the VIX, which hit a fresh 2013 low in March before
spiking higher, since the third quarter of 2011. Another significant deviation from
the pattern of previous years was the pain born by the bond market. Speculation
that the Fed would taper its stimulus efforts fueled a full one percentage point jump
in 10-year Treasury yields during May and June. We saw an encouraging variation
in performance at the stock, industry, and sector levels, which was especially pronounced in these same two months, as signals that the economy was slowly finding its way
back to more historically normalthat is, less Fed-dependentlevels of growth and activity. Happy? All of this makes us optimistic. Our contention is that the unusual performance pattern spurred by the effects of multiple rounds of QE and zero interest rates has begun to unwind, which will set the stage for more fundamentally based value-oriented approaches to take hold of market leadership. One sign that the process has already begun is that in the space of roughly three months we have moved from an environment in which many believed that interest rates would remain low indefinitely to one in which more historically normal yields are inching closer and closer. We have argued that an unintended consequence of QE and zero interest rates has been to make life a little too easy for lower-quality companies. Highly levered businesses have been able to re-finance their obligations at record low rates and thus not pay the usual economic cost for being over-levered. This unnatural and (we believe) temporary advantage reduced the attractiveness of the conservatively capitalized businesses that have been our portfolio mainstays since the early 1970s. However, with Fed policy changing, we are moving closer to a market in which strong fundamentals are likely to be in high demand once more. |
Our contention is that the unusual performance pattern spurred by the effects of multiple rounds of QE and zero interest rates has begun to unwind, which will set the stage for more fundamentally based value- oriented approaches to take hold of market leadership. |
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This is an important part of our ongoing search for a companys margin of safety. If a company is carrying too much debt, it impedes its own ability to meet the challenge of out-of-left-field occurrences such as lawsuits, the loss of a major customer, or overseas currency crises. A conservatively capitalized company, especially a smaller company, can better weather these storms because it has the necessary financial reserves to do so, while a company with too much debt on the balance sheet runs a greater risk that stormy weather will turn into a hurricane. We also view financially strong companies as well-positioned to grow. The assets of these companies are derived more from retained earnings than paid-in capital, i.e., they have the ability to self-fund their own success as a business. Of course, transitions are never easy. Shifting back to a more normalized yield environment is likely to be marked by increased volatility and pockets of uncertainty. Stock prices have begun the transition from their reliance on monetary policy to fundamentals, which is a process we believe will stress the importance of companies with strong, less-leveraged balance sheets, excess cash flow generation, and the ability to self-finance. We look forward to a more normalized yield environment that could usher in that long-awaited flight to quality. |
Letter to Our Stockholders What Ben Bernanke actually said back in June about the Fed potentially tapering its bond purchases seemed entirely positive. Many of us have been waiting for the economy and the markets to return to more historically normal conditions for some time. We have been especially eager to see interest rates normalize, which would be as sure a sign as any that the economy and markets are operating at something like business as usual (and this period of QE and zero interest rates has been anything but that). We suspect an environment in which the Fed is not as intimately involved in the economy will be a healthy one for stocks. So while many investors saw the Feds plans to taper bond purchases as a cause for alarm, we saw it as an affirmation that the economy is healing as it grows. Within the next couple of years, it should grow even stronger. Along with more historically normalthat is, higherrates, this would be a very welcome development for equities in our view, particularly the kind of attractively valued, well-run, financially strong small-cap businesses that remain our favorites. Guarded optimism may be as close to bliss as we can usually get, but we have seldom felt more confident about our investment approach than we do right now, looking out on the months and years to come. Sincerely, |
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Charles M. Royce | W. Whitney George | Jack E. Fockler, Jr. | |||||||
President | Vice President | Vice President | |||||||
July 31, 2013 |
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Table of Contents | ||
Semiannual Report to Stockholders | ||
Managers Discussions of Fund Performance | ||
Royce Value Trust | 10 | |
Royce Micro-Cap Trust | 12 | |
Royce Focus Trust | 14 | |
History Since Inception | 16 | |
Distribution Reinvestment and Cash Purchase Options | 18 | |
Schedules of Investments and Other Financial Statements | ||
Royce Value Trust | 19 | |
Royce Micro-Cap Trust | 35 | |
Royce Focus Trust | 48 | |
Directors and Officers | 57 | |
Board Approval of Investment Advisory Agreements | 58 | |
Notes to Performance and Other Important Information | 60 | |
The Royce Funds 2013 Semiannual Report to Stockholders | 9 |
Royce Value Trust |
AVERAGE ANNUAL NAV TOTAL RETURNS Through 6/30/13 |
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JanuaryJune 20131 | 12.42 | % | |||||||||
One-Year | 24.64 | ||||||||||
Three-Year | 16.17 | ||||||||||
Five-Year | 6.24 | ||||||||||
10-Year | 9.35 | ||||||||||
15-Year | 8.39 | ||||||||||
20-Year | 10.30 | ||||||||||
25-Year | 10.87 | ||||||||||
Since Inception (11/26/86) | 10.61 | ||||||||||
1 Not annualized | |||||||||||
CALENDAR YEAR NAV TOTAL RETURNS | |||||||||||
Year | RVT | Year | RVT | ||||||||
2012 | 15.4 | % | 2004 | 21.4 | % | ||||||
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 | ||||||||
TOP 10 POSITIONS % of Net Assets | |||||||||||
Carters | 1.2 | % | |||||||||
HEICO Corporation | 1.1 | ||||||||||
PAREXEL International | 1.0 | ||||||||||
Coherent | 1.0 | ||||||||||
Lincoln Electric Holdings | 1.0 | ||||||||||
Reliance Steel & Aluminum | 0.9 | ||||||||||
E-L Financial | 0.9 | ||||||||||
Federated Investors Cl. B | 0.9 | ||||||||||
On Assignment | 0.8 | ||||||||||
Ethan Allen Interiors | 0.8 | ||||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||||
Industrials | 28.3 | % | |||||||||
Information Technology | 21.4 | ||||||||||
Financials | 16.6 | ||||||||||
Consumer Discretionary | 13.9 | ||||||||||
Materials | 6.7 | ||||||||||
Health Care | 6.6 | ||||||||||
Energy | 5.0 | ||||||||||
Consumer Staples | 1.8 | ||||||||||
Telecommunication Services | 0.7 | ||||||||||
Diversified Investment Companies | 0.7 | ||||||||||
Miscellaneous | 4.9 | ||||||||||
Preferred Stock | 0.1 | ||||||||||
Outstanding Line of Credit, Net of Cash and Cash Equivalents |
-6.7 | ||||||||||
Managers Discussion
For the year-to-date period ended June 30, 2013, Royce Value Trust (RVT) gained 12.4% on an NAV (net asset value) basis and 15.9% on a market price basis compared to respective gains of 15.9% and 16.2% for its unleveraged small-cap benchmarks, the Russell 2000 and S&P SmallCap 600 Indexes, for the same period. For the bullish first quarter the Fund rose 10.6% on an NAV basis and 13.7% on a market price basis, in the latter case outperforming both of its unleveraged benchmarks as the Russell 2000 was up 12.4% and the S&P 600 SmallCap advanced 11.8%. The second quarter was more volatile and uncertain. The globes capital markets fell precipitously in late June following the announcement by Fed Chairman Ben Bernanke that the central bank was likely to slow the pace of its monthly bond purchases later in the year. Along with less-than-stellar news out of China, Brazil, Turkey, and Europe, stock prices slipped for several sessions before beginning to stabilize here in the U.S. The Fund trailed both of its benchmarks in the second quarter, gaining 1.7% on an NAV basis and 1.9% on a market price basis versus 3.1% for the Russell 2000 and 3.9% for the S&P SmallCap 600. Longer-term results were a bit better on a relative basis. On an NAV and market price basis, RVT outperformed the Russell 2000 for the 15-, 20-, 25-year, and since inception (11/26/86) periods ended June 30, 2013 while outpacing the S&P 600 Small-Cap for each of those periods save the 20-year span (and on a market price basis for the 15-year period). RVTs average annual NAV total return for the since inception period ended June 30, 2013 was 10.6%. Ten of the Funds 11 equity sectors made positive contributions in the first half of 2013. Information Technology led by a sizable margin, followed by the Industrials and Financials sectors. Detracting from performance for the year-to-date period were the Materials and Diversified Investment Companies sectors, with net losses for the latter sector being relatively modest. At the industry level, capital markets, electronic equipment, instruments & components, and machinery were the top performers. Conversely, metals & mining, closed-end funds, and commercial services & supplies were the Funds top three detracting industries. At the company level, the Funds top performer came from the Health Care sector. PAREXEL International is a biopharmaceutical services company that provides clinical research and consulting products and services to the biotech and med-tech device industries. We first bought shares in May of 1998 and have owned shares continuously since 1999. For many years we have liked the companys quality characteristics and its competitive advantage in the life sciences tools & services industry. The company has been moving through a previously built-up backlog, which has improved revenues and fueled interest in the stock. We took gains in April. |
GOOD IDEAS THAT WORKED
Top Contributors to Performance Year-to-Date through 6/30/131 |
|||||||||||
PAREXEL International | 0.38% | ||||||||||
Carters | 0.28 | ||||||||||
VistaPrint | 0.24 | ||||||||||
E-L Financial | 0.24 | ||||||||||
Mohawk Industries | 0.21 | ||||||||||
1 Includes dividends | |||||||||||
Important Performance and Risk Information
All performance information reflects past performance, is presented on a total return basis, and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month-end may be obtained at www.roycefunds.com. The market price of the Funds shares will fluctuate, so that shares may be worth more or less than their original cost when sold. The Fund invests primarily in securities of small- and micro-cap companies, which may involve considerably more risk than investing in a more diversified portfolio of larger-cap companies. Regarding the two Good Ideas tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Funds year-to-date performance for 2013. |
10 | The Royce Funds 2013 Semiannual Report to Stockholders |
Performance and Portfolio Review Holdings in the metals & mining industry, which is part of the Materials sector, accounted for the majority of the Funds net losses in the first half of the year. Four out of 10 of the Funds largest detractors were metals & mining companies. Additionally, 10 of the Funds largest 20 detractors for the period were metals & mining businesses. Several factors worked against precious metals miners in the first half. Gold and silver prices declined significantly, mine operating costs were climbing, and several firms went through management changes. For the mining industry, it has often looked as if a recovery would never happen. In many cases, valuations have reached levels that we have not seen since the late 2008-early 2009 lows. We chose to add shares of two closed-end fundsCentral Fund of Canada, which invests primarily in gold and silver bullion, and ASA Gold and Precious Metals, which invests primarily in companies involved in gold mining. We parted ways with Hochschild Mining and reduced our position in Major Drilling Group International, a contract drilling services business. The Board of Directors of the Fund (the Board) has approved, subject to stockholder approval, the contribution of a portion of the Funds assets to a newly formed closed-end investment company, Royce Global Value Trust, Inc. (Royce Global Value Trust) in exchange for Royce Global Value Trusts common shares. The Fund would contribute to the Royce Global Value Trust approximately $100 million of its cash and/or securities, and would then distribute all of the shares of Royce Global Value Trust pro rata to the Common Stockholders of the Fund. The transaction is expected to be voted upon at a Special Meeting of the Funds Common Stockholders on September 5, 2013. The amount of capital and the number of Royce Global Value Trusts shares to be distributed and the record and distribution dates will be announced at a later time. The distribution will be made only by means of a prospectus and this stockholder report does not constitute an offer of any securities for sale. |
GOOD
IDEAS AT THE TIME
|
|
Central Fund of Canada Cl. A | -0.15% |
ASA Gold and Precious Metals | -0.12 |
GrafTech International | -0.11 |
Hochschild Mining | -0.11 |
Major Drilling Group International | -0.09 |
1 Net of dividends | |
MARKET PRICE PERFORMANCE HISTORY SINCE INCEPTION (11/26/86) through 6/30/13 | |
1 Reflects the cumulative total return of an investment made by a stockholder who purchased one share at
inception ($10.00 IPO), reinvested all annual distributions and fully participated in primary subscriptions of the
Funds rights offerings. |
|||
2 Reflects the actual market price of one share as it traded on the NYSE. |
FUND INFORMATION AND PORTFOLIO DIAGNOSTICS |
|||
Fund Total Net Assets | $1,201 million | ||
Number of Holdings | 532 | ||
Turnover Rate | 18% | ||
Symbol | |||
Market Price | RVT | ||
NAV | XRVTX | ||
Net Leverage1 | 7% | ||
Average Market Capitalization2 | $1,590 million | ||
Weighted Average P/E Ratio3,4 | 17.3x | ||
Weighted Average P/B Ratio3 | 1.8x | ||
U.S. Investments (% of Net Assets) | 83.3% | ||
Non-U.S. Investments (% of Net Assets) | 23.4% | ||
1 Net leverage is the percentage, in excess of 100%, of the total
value of equity type investments, divided by net assets. |
|||
2 Geometric Average. This weighted calculation uses each portfolio
holdings market cap in a way designed to not skew the effect of
very large or small holdings; instead, it aims to better identify the
portfolios center, which Royce believes offers a more accurate
measure of average market cap than a simple mean or median. |
|||
3 Harmonic Average. This weighted calculation evaluates a portfolio
as if it were a single stock and measures it overall. It compares the
total market value of the portfolio to the portfolios share in the
earnings or book value, as the case may be, of its underlying stocks. |
|||
4 The Funds P/E ratio calculation excludes companies with zero
or negative earnings (9% of portfolio holdings as of 6/30/13). |
|||
DOWN MARKET PERFORMANCE COMPARISON |
|||
The Royce Funds 2013 Semiannual Report to Stockholders | 11 |
Royce Micro-Cap Trust |
AVERAGE ANNUAL NAV TOTAL RETURNS Through 6/30/13 |
||||||||||
JanuaryJune 20131 | 13.43 | % | ||||||||
One-Year | 25.00 | |||||||||
Three-Year | 17.06 | |||||||||
Five-Year | 7.39 | |||||||||
10-Year | 9.89 | |||||||||
15-Year | 8.92 | |||||||||
Since Inception (12/14/93) | 10.86 | |||||||||
1 Not annualized | ||||||||||
CALENDAR YEAR NAV TOTAL RETURNS | ||||||||||
Year | RMT | Year | RMT | |||||||
2012 | 17.3 | % | 2004 | 18.7 | % | |||||
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 | |||||||
TOP 10 POSITIONS % of Net Assets | ||||||||||
Quaker Chemical | 1.3 | % | ||||||||
Tennant Company | 1.2 | |||||||||
Integrated Electrical Services | 1.2 | |||||||||
Flexsteel Industries | 1.2 | |||||||||
Exponent | 1.2 | |||||||||
Seneca Foods | 1.2 | |||||||||
Computer Task Group | 1.2 | |||||||||
Drew Industries | 1.1 | |||||||||
Kennedy-Wilson Holdings | 1.1 | |||||||||
Universal Electronics | 1.1 | |||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | ||||||||||
Industrials | 29.4 | % | ||||||||
Information Technology | 23.5 | |||||||||
Financials | 18.3 | |||||||||
Consumer Discretionary | 11.8 | |||||||||
Health Care | 7.6 | |||||||||
Materials | 7.1 | |||||||||
Energy | 3.8 | |||||||||
Consumer Staples | 2.9 | |||||||||
Utilities | 0.1 | |||||||||
Miscellaneous | 5.0 | |||||||||
Preferred Stock | 0.4 | |||||||||
Outstanding Line of Credit, Net of Cash and Cash Equivalents |
-9.9 | |||||||||
Managers Discussion Micro-cap stocks as a whole enjoyed a solid performance in the first half of 2013. For the period ended June 30, 2013, Royce Micro-Cap Trust (RMT) gained 13.4% on an NAV (net asset value) basis and 17.3% on a market price basis compared to its unleveraged benchmarks, the Russell 2000 Index and Russell Microcap Index, which had respective gains of 15.9% and 18.3%, for the same period. During the first quarter, RMT gained 12.8% on an NAV basis, falling behind both the Russell 2000 and the Russell Microcap, which rose 12.4% and 12.6%, respectively. On a market price basis, RMT outpaced both unleveraged benchmark indexes, gaining 16.0% during the first quarter. Unlike the bullish first quarter, the second quarter was more volatile. Market sentiment soured in late June after the Fed announced that it would likely begin winding down its quantitative easing policies later in the year. Adding to the uncertainty was the less-than-stellar news out of China, Brazil, Turkey, and Europe, which led to a drop in stock prices for several sessions before showing signs of stabilization here in the U.S. just before the end of June. RMT trailed both the Russell 2000 and Russell Microcap indexes in the second quarter, gaining 1.8% on an NAV basis and 2.4% on a market price basis compared to respective gains of 3.1% and 5.1%. On a long-term NAV basis, we were pleased that the Fund outperformed the Russell 2000 for the 10-, 15-year, and since inception (12/14/93) periods ended June 30, 2013. The Fund also outpaced the Russell Microcap for the 10-year period on an NAV basis. On a market price basis, RMT outperformed the Russell 2000 for the one-, three-, 10-, 15-year, and since inception (12/14/93) periods ended June 30, 2013. The Fund also outpaced the Russell Microcap for the one-, three-, and 10-year periods. (Data for the Russell Microcap only goes back to 2000.) RMTs average annual NAV total return for the since inception period ended June 30, 2013 was 10.9%. Eight of the Funds 10 equity sectors made positive contributions in the first half of 2013, with Materials being the lone detractor. (Utilities and Telecommunication Services were basically flat.) Industrials, Information Technology, and Financials were the Funds top contributing sectors, followed by the Consumer Discretionary sector, which also posted notable net gains. At the industry level, building products, electronic equipment, instruments & components, and real estate management & development were the top year-to-date performers. We have long believed that the capital markets area is an under-appreciated industry within the Financials sector. Over the past several years, money managers have traded at very attractive valuations, largely because of the risk-averse attitude of the market. Top-five holding Virtus Investment Partners is an investment management firm that provides services to individual and institutional clients. Being in the business ourselves, we like the companys customer- and product- |
GOOD IDEAS THAT WORKED
Top Contributors to Performance Year-to-Date through 6/30/131 |
|||||||||||
Virtus Investment Partners | 0.59% | ||||||||||
comScore | 0.42 | ||||||||||
BofI Holding | 0.38 | ||||||||||
Kennedy-Wilson Holdings | 0.38 | ||||||||||
AAON | 0.36 | ||||||||||
1 Includes dividends | |||||||||||
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. Certain immaterial adjustments were made to the net assets of Royce Micro-Cap Trust at 12/31/12 for financial reporting purposes, and as a result the net asset value originally calculated on that date and the total return based on that net asset value differs from the adjusted net asset value and total return reported in the Financial Highlights. The market price of the Funds shares will fluctuate, so that shares may be worth more or less than their original cost when sold. The Fund normally invests in micro-cap companies, which may involve considerably more risk than investing in a more diversified portfolio of larger-cap companies. Regarding the two Good Ideas tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Funds year-to-date performance for 2013. |
12 | The Royce Funds 2013 Semiannual Report to Stockholders |
Performance and Portfolio Review
|
centric business model. We began purchasing shares at the tail end of 2010 and began significantly
reducing our position in March and late June after its share price began to hit our sell targets.
Information Technology is another sector where we are seeing broad-based opportunities. An Internet software & services company that provides digital analytics solutions domestically and in Europe through its proprietary databases, comScore has a competitive position within its industry (some of its clients include Microsoft, Comcast, and BrightRoll). The company announced healthy fiscal first-quarter revenue growth in early May from both new and existing clients. This helped to drive its share price higher, as did news in June when the company detailed its strategy to drive growth, announced a $50 million share repurchase program, and revealed that it would be launching a new analytics product. As more and more businesses increase their digital presence, the accelerated demand for real-time data will become crucial. We began trimming our position later in June. San Diego-based BofI Holding has been a holding in the portfolio since late August of 2006. BofI acts as the holding company for BofI Federal Bank, an Internet-based bank that provides financing for residential properties and small businesses. The company saw its web-based banking services in both the consumer and commercial markets in high demand. We were initially attracted to its online business model and steady growth. We took gains in the first half. Celsion Corporation develops heat-based cancer treatments, currently focused on breast and liver cancer. Although we reduced our stake between July 2012 and January 2013, we still held a small position at the end of the first half. Its stock price cratered late in January on news that an experimental treatment for liver cancer had failed. We liked its core business and were reasonably hopeful that it could recover. Our exposure to the metals & mining industry created notable net losses for the Fund in the first half. Five out of the Funds top-10 detractors were from the metals & mining industry. A decline in gold and silver prices and an increase in mine operating costs were some of the major reasons why the industry has descended to valuation levels close to those we saw in late 2008-early 2009. Confident in an eventual turnaround, we added shares of gold miner Vista Gold and closed-end fund ASA Gold and Precious Metals, which invests primarily in companies involved in gold mining. |
GOOD IDEAS AT THE TIME
|
|
Celsion Corporation | -0.32% |
Vista Gold | -0.30 |
ASA Gold and Precious Metals | -0.20 |
Golden Star Resources | -0.18 |
PMFG | -0.14 |
1 Net of dividends | |
MARKET PRICE PERFORMANCE HISTORY SINCE INCEPTION (12/14/93) through 6/30/13 | |
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 the Nasdaq. |
FUND INFORMATION AND PORTFOLIO DIAGNOSTICS |
|||
Fund Total Net Assets | $357 million | ||
Number of Holdings | 363 | ||
Turnover Rate | 16% | ||
Symbol | |||
Market Price | RMT | ||
NAV | XOTCX | ||
Net Leverage1 | 10% | ||
Average Market Capitalization2 | $372 million | ||
Weighted Average P/E Ratio3,4 | 18.5x | ||
Weighted Average P/B Ratio3 | 1.6x | ||
U.S. Investments (% of Net Assets) | 96.6% | ||
Non-U.S. Investments (% of Net Assets) | 13.3% | ||
1 Net leverage is the percentage, in excess of 100%, of the total
value of equity type investments, divided by net assets. |
|||
2 Geometric Average. This weighted calculation uses each portfolio
holdings market cap in a way designed to not skew the effect of
very large or small holdings; instead, it aims to better identify the
portfolios center, which Royce believes offers a more accurate
measure of average market cap than a simple mean or median. |
|||
3 Harmonic Average. This weighted calculation evaluates a portfolio
as if it were a single stock and measures it overall. It compares the
total market value of the portfolio to the portfolios share in the
earnings or book value, as the case may be, of its underlying stocks. |
|||
4 The Funds P/E ratio calculation excludes companies with zero
or negative earnings (21% of portfolio holdings as of 6/30/13). |
|||
DOWN MARKET PERFORMANCE COMPARISON |
|||
The Royce Funds 2013 Semiannual Report to Stockholders | 13 |
Royce Focus Trust |
AVERAGE ANNUAL NAV TOTAL RETURNS Through 6/30/13 |
|||||||||||
JanuaryJune 20131 | 2.60 | % | |||||||||
One-Year | 14.40 | ||||||||||
Three-Year | 10.57 | ||||||||||
Five-Year | 1.45 | ||||||||||
10-Year | 10.57 | ||||||||||
15-Year | 8.90 | ||||||||||
Since Inception (11/1/96)2 | 9.90 | ||||||||||
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 | ||||||||
2012 | 11.4 | % | 2004 | 29.3 | % | ||||||
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 | ||||||||
TOP 10 POSITIONS % of Net Assets | |||||||||||
Western Digital | 4.9 | % | |||||||||
Microsoft Corporation | 4.2 | ||||||||||
Berkshire Hathaway Cl. B | 4.0 | ||||||||||
Franklin Resources | 3.3 | ||||||||||
Helmerich & Payne | 3.2 | ||||||||||
Buckle (The) | 3.1 | ||||||||||
Exxon Mobil | 3.0 | ||||||||||
Mosaic Company (The) | 2.9 | ||||||||||
Myriad Genetics | 2.9 | ||||||||||
Thor Industries | 2.7 | ||||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets | |||||||||||
Materials | 19.5 | % | |||||||||
Information Technology | 19.1 | ||||||||||
Financials | 17.7 | ||||||||||
Energy | 12.8 | ||||||||||
Consumer Discretionary | 11.6 | ||||||||||
Industrials | 7.4 | ||||||||||
Consumer Staples | 6.4 | ||||||||||
Health Care | 2.9 | ||||||||||
Cash and Cash Equivalents | 2.6 | ||||||||||
Managers Discussion
For the six-month period ended June 30, 2013, Royce Focus Trust (FUND) gained 2.6% on an NAV (net asset value) basis and 8.6% on a market price basis compared to gains of 15.4% for the small- and mid-cap Russell 2500 Index and 15.9% for the small-cap Russell 2000 Index, for the same period. The Fund could not keep pace through the first quarter of 2013, a more or less consistently bullish period that lifted share prices across asset classes. The Fund climbed 2.3% on an NAV basis and 7.3% on a market price basis in the first quarter, lagging behind gains of 12.8% for the Russell 2500 and 12.4% for the Russell 2000. Following this bull run, the markets shifted to a more volatile and unsettled mode. The second quarter saw declines in the emerging markets and a slowdown in China that, combined with Fed Chairman Ben Bernankes announcement that the pace of the central banks $85 billion monthly bond purchase program was likely to slow by the end of the year, further distorted valuations and depressed asset prices. The markets reaction to these macro headlines was swift and dramatic, though U.S. stocks generally did a better job of pushing through these challenges than many non-U.S. stocks. Most U.S. indexes finished the quarter in the black. FUND lagged both its benchmarks in the second quarter, gaining 0.2% on an NAV basis and 1.3% on a market price basis versus respective gains of 2.3% and 3.1% for the Russell 2500 and Russell 2000. While we were disappointed by FUNDs intermediate-term performance on a relative scale, we were generally pleased with its returns on an absolute basis, with the exception of its five-year results through the end of June. On an NAV and market price basis, FUND outperformed the Russell 2500 and the Russell 2000 for the 10-, 15-year, and since inception of our management (11/1/96) periods ended June 30, 2013. The Funds average annual NAV total return for the since inception period ended June 30, 2013 was 9.9%. Seven of the Funds eight equity sectors contributed positively to the Funds year-to-date performance, with Information Technology, Consumer Discretionary, Consumer Staples, and Financials leading by a wide margin. Computers & peripherals, specialty retail, and personal products positively impacted the Funds performance at the industry level, with the metals & mining industry being a large and significant detractor. Precious metals miners accounted for eight of the Funds tenand nine of its 20largest detractors for the period. Several factors worked against these holdings in the first half. Gold and silver prices declined significantly, mine operating costs were climbing, and several firms went through management changes. Warren Buffett once said, Only when the tide goes out do you discover whos been swimming naked. For the mining industry, it has often looked as if the tide was never coming back in. In many cases, valuations have reached what we view as rock-bottom levels that have not been seen since the late 2008-early 2009 lows. For the most part, we have chosen to hold those companies that we think look best positioned |
GOOD IDEAS THAT WORKED
Top Contributors to Performance Year-to-Date through 6/30/131 |
|||||||||||
Western Digital | 1.75% | ||||||||||
GameStop Corporation Cl. A | 1.17 | ||||||||||
Nu Skin Enterprises Cl. A | 1.10 | ||||||||||
Microsoft Corporation | 1.05 | ||||||||||
Berkshire Hathaway Cl. B | 0.81 | ||||||||||
1 Includes dividends | |||||||||||
Important Performance and Risk Information
All performance information reflects past performance, is presented on a total return basis, and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month-end may be obtained at www.roycefunds.com. The market price of the Funds shares will fluctuate, so that shares may be worth more or less than their original cost when sold. The Fund normally invests primarily in small-cap companies, which may involve considerably more risk than investing in a more diversified portfolio of larger-cap companies. Regarding the two Good Ideas tables shown above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Funds year-to-date performance for 2013. |
14 | The Royce Funds 2013 Semiannual Report to Stockholders |
Performance and Portfolio Review for an eventual turnaround. We held our positions in Allied Nevada Gold, Pretium Resources, and
Seabridge Gold while we doubled our stake in Fresnillo in May.
Outside the metals & mining industry, we also added shares of Apple in January. We first purchased shares following Steve Jobs death in October 2011. Near the end of 2012, we were struck by how attractive its valuation appeared, which led us to buy more shares. We are confident in the ability of this iconic, global brand to continue to surprise and delight consumers with new products, some of which we may see before the end of 2013. The Funds top contributor for the period was Irvine, CA.-based Western Digital, a manufacturer of hard disk drives. Its core business, which involves solutions for the collection, storage, management, and protection of digital content, has long interested us. The company is also one of two firms that dominate disk drive production worldwide. We began purchasing shares at the end of April 2010 when its valuation began to reach levels that we found attractive and continued to slowly add to our position as share prices remained compelling. It seemed that during this time many investors were selling based on the idea that a decline in the need for PCs would hurt its business. However, we saw opportunities in the need that cloud computing server farms would have for its products. Its shares began to gradually rebound in February 2013, following news in January of solid EPS (earnings per share) growth, and again in March on reports that global demand for data storage would remain strong. GameStop Corporation is a video game retailer that sells new and pre-owned gaming products, hardware, and software. Over the last couple of years there have been concerns over the viability of its business model as downloadable games and mobile applications have become more and more available. However, announcements from Microsoft and Sony that each would be introducing updated gaming consoles mollified worries. In addition to the updated consoles, the companys video game exchange business should continue to thrive as new games are introduced with the release of the new consoles and older games from outdated systems should be harder to find. We began significantly trimming our position in early February and mid-April. |
GOOD
IDEAS AT THE TIME
|
|
Allied Nevada Gold | -1.73% |
Pretium Resources | -0.78 |
Apple | -0.72 |
Fresnillo | -0.70 |
Seabridge Gold | -0.70 |
1 Net of dividends | |
MARKET PRICE PERFORMANCE HISTORY SINCE INCEPTION (11/1/96)3 through 6/30/13 | |
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 |
|||
Fund Total Net Assets | $166 million | ||
Number of Holdings | 54 | ||
Turnover Rate | 13% | ||
Symbol | |||
Market Price | FUND | ||
NAV | XFUNX | ||
Average Market Capitalization1 | $6,326 million | ||
Weighted Average P/E Ratio2,3 | 14.8x | ||
Weighted Average P/B Ratio2 | 1.8x | ||
U.S. Investments (% of Net Assets) | 71.6% | ||
Non-U.S. Investments (% of Net Assets) | 25.8% | ||
1 Geometric Average. This weighted calculation uses each portfolio
holdings market cap in a way designed to not skew the effect of
very large or small holdings; instead, it aims to better identify the
portfolios center, which Royce believes offers a more accurate
measure of average market cap than a simple mean or median. |
|||
2 Harmonic Average. This weighted calculation evaluates a portfolio
as if it were a single stock and measures it overall. It compares the
total market value of the portfolio to the portfolios share in the
earnings, or book value, as the case may be, of its underlying stocks. |
|||
3 The Funds P/E ratio calculation excludes companies with zero
or negative earnings (10% of portfolio holdings as of 6/30/13). |
|||
DOWN MARKET PERFORMANCE COMPARISON |
|||
The Royce Funds 2013 Semiannual Report to Stockholders | 15 |
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.
Amount | Purchase | NAV | Market | |||||||||||||
History | Invested | Price1 | Shares | Value2 | Value2 | |||||||||||
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 | 161,638 | 139,866 | |||||||||||
2012 | Annual distribution total $0.80 | 13.063 | 714 | 186,540 | 162,556 | |||||||||||
2013 | Year-to-Date distribution total $0.38 | 14.943 | 310 | |||||||||||||
6/30/13 | $ | 21,922 | 12,423 | $ | 209,700 | $ | 188,333 | |||||||||
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. |
16 | The Royce Funds 2013 Semiannual 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.
Amount | Purchase | NAV | Market | |||||||||||||||||||
History | Invested | Price1 | Shares | Value2 | Value2 | |||||||||||||||||
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 | 49,014 | 43,596 | |||||||||||||||||
2012 | Annual distribution total $0.51 | 9.084 | 285 | 57,501 | 49,669 | |||||||||||||||||
2013 | Year-to-Date distribution total $0.27 | 10.657 | 134 | |||||||||||||||||||
6/30/13 | $ | 8,900 | 5,390 | $ | 65,219 | $ | 58,266 | |||||||||||||||
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 | 26,614 | 22,784 | |||||||||||||||||
2012 | Annual distribution total $0.46 | 6.686 | 255 | 29,652 | 25,549 | |||||||||||||||||
2013 | Year-to-Date distribution total $0.19 | 6.985 | 106 | |||||||||||||||||||
6/30/13 | $ | 7,044 | 3,977 | $ | 30,424 | $ | 27,759 |
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 2013 Semiannual Report to Stockholders | 17
Distribution Reinvestment and Cash Purchase Options |
Why should I reinvest my distributions?
By reinvesting distributions, a stockholder can maintain an undiluted investment
in the Fund. The regular reinvestment of distributions has a significant impact
on stockholder returns. In contrast, the stockholder who takes distributions in
cash is penalized when shares are issued below net asset value to other stockholders.
How does the reinvestment of distributions
from the Royce closed-end funds work?
The Funds automatically issue shares
in payment of distributions unless you indicate otherwise. The shares are generally
issued at the lower of the market price or net asset value on the valuation date.
How does this apply to registered stockholders?
If your shares are registered directly with a Fund, your distributions are
automatically reinvested unless you have otherwise instructed the Funds transfer
agent, Computershare, in writing. A registered stockholder also has the option to
receive the distribution in the form of a stock certificate or in cash if Computershare
is properly notified.
What if my shares are held by a brokerage
firm or a bank?
If your shares are held by a brokerage firm, bank, or other
intermediary as the stockholder of record, you should contact your brokerage firm
or bank to be certain that it is automatically reinvesting distributions on your
behalf. If they are unable to reinvest distributions on your behalf, you should
have your shares registered in your name in order to participate.
What other features are available for
registered stockholders?
The Distribution Reinvestment and Cash Purchase
Plans also allow registered stockholders to make optional cash purchases of shares
of a Funds common stock directly through Computershare on a monthly basis,
and to deposit certificates representing your Fund shares with Computershare for
safekeeping. The Funds investment adviser is absorbing all commissions on
optional cash purchases under the Plans through December 31, 2013.
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.
18 | The Royce Funds 2013 Semiannual Report to Stockholders
Royce Value Trust | June 30, 2013 (unaudited) |
Schedule of Investments | ||||||||
SHARES | VALUE | |||||||
COMMON STOCKS 106.6% | ||||||||
Consumer Discretionary 13.9% | ||||||||
Auto Components - 0.4% | ||||||||
China XD Plastics 1 |
109,700 | $ | 450,867 | |||||
Drew Industries |
40,991 | 1,611,766 | ||||||
Gentex Corporation 2 |
97,400 | 2,245,070 | ||||||
Minth Group |
356,100 | 560,133 | ||||||
4,867,836 | ||||||||
Automobiles - 0.9% | ||||||||
Thor Industries 2 |
114,500 | 5,631,110 | ||||||
Winnebago Industries 1 |
222,500 | 4,670,275 | ||||||
10,301,385 | ||||||||
Distributors - 1.0% | ||||||||
Genuine Parts |
7,700 | 601,139 | ||||||
LKQ Corporation 1 |
368,000 | 9,476,000 | ||||||
Weyco Group |
97,992 | 2,469,398 | ||||||
12,546,537 | ||||||||
Diversified Consumer Services - 1.1% | ||||||||
Career Education 1 |
28,900 | 83,810 | ||||||
MegaStudy |
52,150 | 2,817,438 | ||||||
Regis Corporation 2 |
233,800 | 3,838,996 | ||||||
156,500 | 5,932,915 | |||||||
Universal Technical Institute |
110,432 | 1,140,763 | ||||||
13,813,922 | ||||||||
Hotels, Restaurants & Leisure - 0.4% | ||||||||
Ambassadors Group |
32,100 | 113,955 | ||||||
CEC Entertainment |
64,100 | 2,630,664 | ||||||
Lotto24 1 |
74,716 | 495,996 | ||||||
Net Holding |
142,000 | 184,062 | ||||||
Tak Sing Alliance Holdings |
1,178,500 | 243,113 | ||||||
Tipp24 1 |
16,300 | 938,423 | ||||||
4,606,213 | ||||||||
Household Durables - 2.6% | ||||||||
Blyth |
29,600 | 413,216 | ||||||
Desarrolladora Homex ADR 1 |
14,100 | 52,593 | ||||||
Ekornes |
125,000 | 1,996,099 | ||||||
Ethan Allen Interiors |
345,800 | 9,959,040 | ||||||
Hanssem |
49,100 | 1,317,731 | ||||||
151,600 | 8,216,720 | |||||||
79,700 | 8,965,453 | |||||||
30,920,852 | ||||||||
Internet & Catalog Retail - 0.3% | ||||||||
Manutan International |
45,000 | 1,927,092 | ||||||
NutriSystem |
63,000 | 742,140 | ||||||
Takkt |
75,000 | 1,132,435 | ||||||
3,801,667 | ||||||||
Leisure Equipment & Products - 0.5% | ||||||||
Arctic Cat |
7,000 | 314,860 | ||||||
Beneteau 1 |
175,000 | 1,933,925 | ||||||
Nautilus 1 |
119,200 | 1,035,848 | ||||||
Shimano |
32,000 | 2,716,677 | ||||||
6,001,310 | ||||||||
Media - 1.2% | ||||||||
Global Mediacom |
4,044,000 | 876,030 |
Media Chinese International |
2,650,000 | 964,551 | ||||||
Morningstar 2 |
98,900 | 7,672,662 | ||||||
Pico Far East Holdings |
4,985,000 | 1,703,219 | ||||||
Television Broadcasts |
197,800 | 1,370,769 | ||||||
Wiley (John) & Sons Cl. A |
35,000 | 1,403,150 | ||||||
13,990,381 | ||||||||
Multiline Retail - 0.5% |
||||||||
Dollar Tree 1 |
43,750 | 2,224,250 | ||||||
New World Department Store China |
7,715,700 | 3,899,607 | ||||||
6,123,857 | ||||||||
Specialty Retail - 1.7% | ||||||||
Advance Auto Parts |
7,400 | 600,658 | ||||||
Asahi Company |
7,100 | 104,374 | ||||||
Ascena Retail Group 1,2 |
118,600 | 2,069,570 | ||||||
bebe stores |
15,300 | 85,833 | ||||||
Beter Bed Holding |
49,300 | 903,532 | ||||||
Bonjour Holdings |
5,892,000 | 1,078,724 | ||||||
Dickson Concepts (International) |
331,300 | 185,810 | ||||||
Hour Glass (The) |
400,000 | 550,690 | ||||||
Kirklands 1 |
29,800 | 514,050 | ||||||
Lewis Group |
400,000 | 2,549,304 | ||||||
LOccitane International |
150,000 | 403,234 | ||||||
Luk Fook Holdings (International) |
168,500 | 391,050 | ||||||
OSIM International |
1,200,000 | 1,860,355 | ||||||
Ross Stores |
4,330 | 280,627 | ||||||
Sa Sa International Holdings |
886,000 | 873,886 | ||||||
Stein Mart |
167,800 | 2,290,470 | ||||||
Systemax |
194,000 | 1,825,540 | ||||||
TravelCenters of America LLC 1 |
18,500 | 202,390 | ||||||
USS |
12,000 | 1,523,291 | ||||||
West Marine 1 |
131,100 | 1,442,100 | ||||||
Wet Seal (The) Cl. A 1 |
63,200 | 297,672 | ||||||
20,033,160 | ||||||||
Textiles, Apparel & Luxury Goods - 3.3% | ||||||||
Anta Sports Products |
1,188,200 | 1,041,736 | ||||||
194,600 | 14,414,022 | |||||||
10,597 | 663,902 | |||||||
Daphne International Holdings |
4,991,500 | 4,266,817 | ||||||
Gildan Activewear |
13,500 | 546,885 | ||||||
Grendene |
175,000 | 1,588,948 | ||||||
J.G. Boswell Company 4 |
2,292 | 1,959,660 | ||||||
Makalot Industrial |
345,000 | 1,646,091 | ||||||
Pacific Textiles Holdings |
3,670,000 | 4,135,585 | ||||||
Stella International Holdings |
265,100 | 733,156 | ||||||
Texwinca Holdings |
1,128,300 | 1,050,319 | ||||||
Van de Velde |
50,000 | 2,183,517 | ||||||
Wolverine World Wide 2 |
108,700 | 5,936,107 | ||||||
40,166,745 | ||||||||
Total (Cost $119,252,596) | 167,173,865 | |||||||
Consumer Staples 1.8% | ||||||||
Food & Staples Retailing - 0.3% | ||||||||
FamilyMart |
76,000 | 3,241,379 | ||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2013 Semiannual Report to Stockholders | 19 |
Royce Value Trust |
Schedule of Investments | ||||||||
SHARES | VALUE | |||||||
Consumer Staples (continued) | ||||||||
Food Products - 1.5% | ||||||||
Alico |
27,000 | $ | 1,082,970 | |||||
Amira Nature Foods 1 |
111,461 | 936,272 | ||||||
Cal-Maine Foods |
37,148 | 1,727,753 | ||||||
First Resources |
1,165,900 | 1,632,720 | ||||||
Industrias Bachoco ADR |
3,000 | 104,100 | ||||||
Seneca Foods Cl. A 1 |
110,000 | 3,374,800 | ||||||
Seneca Foods Cl. B 1 |
13,251 | 371,426 | ||||||
Super Group |
480,000 | 1,685,207 | ||||||
Tootsie Roll Industries |
225,520 | 7,167,026 | ||||||
598,676 | 81,959 | |||||||
18,164,233 | ||||||||
Total (Cost $15,775,797) | 21,405,612 | |||||||
Diversified Investment Companies 0.7% | ||||||||
Closed-End Funds - 0.7% | ||||||||
British Empire Securities and General Trust |
174,909 | 1,266,292 | ||||||
389,800 | 5,301,280 | |||||||
RIT Capital Partners |
64,658 | 1,140,762 | ||||||
10,160 | 100,076 | |||||||
Total (Cost $7,039,516) | 7,808,410 | |||||||
Energy 5.0% | ||||||||
Energy Equipment & Services - 4.2% | ||||||||
Cal Dive International 1 |
456,250 | 857,750 | ||||||
17,200 | 1,159,796 | |||||||
132,866 | 3,474,446 | |||||||
118,400 | 7,394,080 | |||||||
ION Geophysical 1 |
361,500 | 2,176,230 | ||||||
88,823 | 8,228,563 | |||||||
Pason Systems |
115,500 | 2,099,800 | ||||||
108,875 | 9,042,069 | |||||||
156,880 | 4,549,520 | |||||||
55,900 | 1,450,046 | |||||||
TGS-NOPEC Geophysical |
78,500 | 2,280,943 | ||||||
Tidewater |
64,300 | 3,663,171 | ||||||
Trican Well Service |
139,200 | 1,850,353 | ||||||
Unit Corporation 1 |
60,200 | 2,563,316 | ||||||
50,790,083 | ||||||||
Oil, Gas & Consumable Fuels - 0.8% | ||||||||
Africa Oil 1 |
74,800 | 501,417 | ||||||
50,000 | 1,011,000 | |||||||
Cimarex Energy 2 |
61,300 | 3,983,887 | ||||||
Contango Oil & Gas |
12,300 | 415,125 | ||||||
Green Plains Renewable Energy 1 |
59,100 | 787,212 | ||||||
Lundin Petroleum 1 |
24,100 | 477,968 | ||||||
248,334 | 1,981,705 | |||||||
9,158,314 | ||||||||
Total (Cost $49,419,996) | 59,948,397 | |||||||
Financials 16.6% | ||||||||
Capital Markets - 8.4% | ||||||||
42,200 | 6,918,268 |
324,600 | 6,758,172 | |||||||
AP Alternative Assets L.P. 1 |
124,555 | 2,621,883 | ||||||
ASA Gold and Precious Metals |
205,501 | 2,609,863 | ||||||
Ashmore Group |
746,000 | 3,899,718 | ||||||
Aurelius |
14,400 | 346,010 | ||||||
Cowen Group 1 |
1,274,458 | 3,695,928 | ||||||
Dubai Investments |
8,500,000 | 3,008,440 | ||||||
Eaton Vance 2 |
85,300 | 3,206,427 | ||||||
FBR & Co. 1 |
144,050 | 3,638,703 | ||||||
390,100 | 10,692,641 | |||||||
GAMCO Investors Cl. A |
40,300 | 2,233,023 | ||||||
Jupiter Fund Management |
75,000 | 330,464 | ||||||
KKR & Co. L.P. |
415,000 | 8,158,900 | ||||||
Lazard Cl. A |
169,800 | 5,459,070 | ||||||
MVC Capital |
254,200 | 3,200,378 | ||||||
Oppenheimer Holdings Cl. A |
75,000 | 1,428,000 | ||||||
Paris Orleans |
226,496 | 5,365,695 | ||||||
Partners Group Holding |
10,200 | 2,761,791 | ||||||
Reinet Investments 1 |
164,948 | 2,943,598 | ||||||
Reinet Investments DR 1 |
500,000 | 954,472 | ||||||
SEI Investments |
303,900 | 8,639,877 | ||||||
Sprott |
1,045,600 | 2,783,759 | ||||||
Value Partners Group |
4,089,900 | 2,204,187 | ||||||
Waddell & Reed Financial Cl. A 2 |
139,300 | 6,059,550 | ||||||
Westwood Holdings Group |
23,460 | 1,006,903 | ||||||
100,925,720 | ||||||||
Commercial Banks - 1.9% | ||||||||
Bank of N.T. Butterfield & Son |
1,784,161 | 2,497,826 | ||||||
BCB Holdings 1 |
309,426 | 91,771 | ||||||
Farmers & Merchants Bank of Long Beach |
1,200 | 5,881,200 | ||||||
Fauquier Bankshares |
160,800 | 1,950,504 | ||||||
First Citizens BancShares Cl. A |
45,527 | 8,743,460 | ||||||
Huntington Bancshares |
76,000 | 598,880 | ||||||
Mechanics Bank |
200 | 2,560,000 | ||||||
22,323,641 | ||||||||
Diversified Financial Services - 1.1% | ||||||||
Banca Finnat Euramerica |
1,060,000 | 365,633 | ||||||
Pargesa Holding |
4,300 | 287,031 | ||||||
PICO Holdings 1 |
67,500 | 1,414,800 | ||||||
RHJ International 1 |
622,500 | 2,933,202 | ||||||
Sofina |
89,000 | 8,064,096 | ||||||
Texas Pacific Land Trust |
3,800 | 322,088 | ||||||
13,386,850 | ||||||||
Insurance - 2.9% | ||||||||
10,399 | 3,986,041 | |||||||
Berkley (W.R.) |
5,700 | 232,902 | ||||||
eHealth 1 |
38,850 | 882,672 | ||||||
E-L Financial |
18,000 | 10,868,118 | ||||||
Erie Indemnity Cl. A 2 |
50,000 | 3,984,500 | ||||||
Independence Holding Company |
349,423 | 4,130,180 | ||||||
Platinum Underwriters Holdings |
91,900 | 5,258,518 | ||||||
Primerica |
135,000 | 5,054,400 | ||||||
34,397,331 | ||||||||
20 | 2013 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2013 (unaudited) |
SHARES | VALUE | |||||||
Financials (continued) | ||||||||
Real Estate Management & Development - 2.0% | ||||||||
Consolidated-Tomoka Land |
60,564 | $ | 2,311,122 | |||||
E-House China Holdings ADR |
231,861 | 1,006,277 | ||||||
102,000 | 2,046,120 | |||||||
Kennedy-Wilson Holdings |
191,000 | 3,178,240 | ||||||
Midland Holdings |
7,571,100 | 2,830,847 | ||||||
167,000 | 3,515,350 | |||||||
Tejon Ranch 1 |
342,600 | 9,760,674 | ||||||
24,648,630 | ||||||||
Thrifts & Mortgage Finance - 0.3% | ||||||||
Timberland Bancorp 6 |
444,200 | 3,740,164 | ||||||
Vestin Realty Mortgage II 1 |
214,230 | 351,337 | ||||||
4,091,501 | ||||||||
Total (Cost $179,595,212) | 199,773,673 | |||||||
Health Care 6.6% | ||||||||
Biotechnology - 0.4% | ||||||||
Genomic Health 1 |
33,000 | 1,046,430 | ||||||
Green Cross |
12,600 | 1,351,517 | ||||||
Myriad Genetics 1 |
111,750 | 3,002,722 | ||||||
5,400,669 | ||||||||
Health Care Equipment & Supplies - 2.2% | ||||||||
Abaxis 2 |
23,100 | 1,097,481 | ||||||
Allied Healthcare Products 1 |
140,512 | 386,408 | ||||||
Analogic Corporation 2 |
44,035 | 3,207,069 | ||||||
81,950 | 924,396 | |||||||
Atrion Corporation |
17,225 | 3,767,280 | ||||||
bioMerieux |
17,000 | 1,647,211 | ||||||
Carl Zeiss Meditec |
50,000 | 1,659,603 | ||||||
CONMED Corporation |
81,500 | 2,546,060 | ||||||
DiaSorin |
50,000 | 1,996,079 | ||||||
42,211 | 3,789,704 | |||||||
Kossan Rubber Industries |
647,568 | 1,022,746 | ||||||
Nihon Kohden |
20,100 | 768,088 | ||||||
Straumann Holding |
15,000 | 2,251,866 | ||||||
Top Glove |
475,000 | 938,123 | ||||||
142,648 | 21,412 | |||||||
West Pharmaceutical Services |
1,300 | 91,338 | ||||||
26,114,864 | ||||||||
Health Care Providers & Services - 0.6% | ||||||||
Accretive Health 1 |
160,000 | 1,729,600 | ||||||
Bangkok Chain Hospital |
50,000 | 12,655 | ||||||
Landauer 2 |
75,500 | 3,647,405 | ||||||
10,000 | 1,232,400 | |||||||
Schein (Henry) 1 |
900 | 86,175 | ||||||
27,800 | 725,302 | |||||||
7,433,537 | ||||||||
Life Sciences Tools & Services - 2.0% | ||||||||
Bio-Rad Laboratories Cl. A 1 |
22,888 | 2,568,034 | ||||||
EPS Corporation |
1,224 | 1,362,468 | ||||||
PAREXEL International 1 |
265,500 | 12,197,070 | ||||||
PerkinElmer 2 |
185,800 | 6,038,500 | ||||||
Techne Corporation |
19,900 | 1,374,692 | ||||||
23,540,764 | ||||||||
Pharmaceuticals - 1.4% | ||||||||
Adcock Ingram Holdings |
389,000 | 2,557,903 | ||||||
Boiron |
47,500 | 2,473,134 | ||||||
Hi-Tech Pharmacal |
17,700 | 587,640 | ||||||
Kalbe Farma |
4,000,000 | 580,353 | ||||||
Questcor Pharmaceuticals |
10,200 | 463,692 | ||||||
Recordati |
275,000 | 3,051,554 | ||||||
Santen Pharmaceutical |
58,500 | 2,518,602 | ||||||
Vetoquinol |
91,100 | 3,100,874 | ||||||
Virbac |
6,000 | 1,241,774 | ||||||
16,575,526 | ||||||||
Total (Cost $49,555,914) | 79,065,360 | |||||||
Industrials 28.3% | ||||||||
Aerospace & Defense - 1.9% | ||||||||
AeroVironment 1 |
13,200 | 266,376 | ||||||
Alliant Techsystems 2 |
3,200 | 263,456 | ||||||
Cubic Corporation |
45,054 | 2,167,097 | ||||||
Ducommun 1 |
117,200 | 2,491,672 | ||||||
HEICO Corporation 2 |
210,351 | 10,595,380 | ||||||
HEICO Corporation Cl. A |
64,647 | 2,386,121 | ||||||
Hexcel Corporation 1 |
47,500 | 1,617,375 | ||||||
Moog Cl. A 1 |
25,000 | 1,288,250 | ||||||
Teledyne Technologies 1 |
24,300 | 1,879,605 | ||||||
22,955,332 | ||||||||
Air Freight & Logistics - 2.0% | ||||||||
34,000 | 224,740 | |||||||
Expeditors International of Washington |
175,500 | 6,670,755 | ||||||
Forward Air |
209,750 | 8,029,230 | ||||||
149,400 | 5,441,148 | |||||||
UTi Worldwide |
175,000 | 2,882,250 | ||||||
23,248,123 | ||||||||
Building Products - 1.1% | ||||||||
American Woodmark 1 |
123,335 | 4,279,725 | ||||||
Apogee Enterprises 2 |
21,600 | 518,400 | ||||||
Burnham Holdings Cl. B 4 |
36,000 | 639,000 | ||||||
Simpson Manufacturing |
275,300 | 8,099,326 | ||||||
13,536,451 | ||||||||
Commercial Services & Supplies - 2.3% | ||||||||
Brinks Company (The) |
206,320 | 5,263,223 | ||||||
CompX International Cl. A |
211,100 | 2,946,956 | ||||||
Copart 1 |
149,780 | 4,613,224 | ||||||
Kaba Holding |
8,000 | 3,000,370 | ||||||
Kimball International Cl. B |
286,180 | 2,778,808 | ||||||
Moshi Moshi Hotline |
35,600 | 444,372 | ||||||
297,800 | 5,723,716 | |||||||
Tetra Tech 1 |
106,600 | 2,506,166 | ||||||
27,276,835 | ||||||||
Construction & Engineering - 1.7% | ||||||||
EMCOR Group |
149,400 | 6,073,110 | ||||||
Foster Wheeler 1 |
15,000 | 325,650 | ||||||
Integrated Electrical Services 1 |
351,960 | 1,566,222 | ||||||
92,620 | 5,106,141 | |||||||
KBR |
180,000 | 5,850,000 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2013 Semiannual Report to Stockholders | 21 |
Royce Value Trust |
Schedule of Investments | ||||||||
SHARES | VALUE | |||||||
Industrials (continued) | ||||||||
Construction & Engineering (continued) | ||||||||
Northwest Pipe 1 |
13,200 | $ | 368,280 | |||||
Raubex Group |
375,300 | 827,668 | ||||||
20,117,071 | ||||||||
Electrical Equipment - 3.1% | ||||||||
AZZ |
48,599 | 1,873,977 | ||||||
Belden |
57,800 | 2,885,954 | ||||||
Franklin Electric |
209,200 | 7,039,580 | ||||||
Global Power Equipment Group |
111,082 | 1,790,642 | ||||||
GrafTech International 1 |
654,287 | 4,763,209 | ||||||
Graphite India |
250,000 | 309,213 | ||||||
Hubbell Cl. B 2 |
7,000 | 693,000 | ||||||
Powell Industries 1 |
101,953 | 5,265,873 | ||||||
Preformed Line Products |
91,600 | 6,073,996 | ||||||
Regal-Beloit |
100,000 | 6,484,000 | ||||||
Vicor 1 |
54,950 | 376,408 | ||||||
37,555,852 | ||||||||
Industrial Conglomerates - 0.5% | ||||||||
Carlisle Companies 2 |
10,400 | 648,024 | ||||||
Raven Industries 2 |
192,400 | 5,768,152 | ||||||
6,416,176 | ||||||||
Machinery - 9.1% | ||||||||
Armstrong Industrial |
1,514,500 | 412,231 | ||||||
Astec Industries |
32,000 | 1,097,280 | ||||||
Burckhardt Compression Holding |
12,400 | 4,936,107 | ||||||
CB Industrial Product Holding |
189,000 | 156,727 | ||||||
Chen Hsong Holdings |
1,159,000 | 351,165 | ||||||
CLARCOR 2 |
92,500 | 4,829,425 | ||||||
Columbus McKinnon 1 |
93,900 | 2,001,948 | ||||||
Donaldson Company 2 |
185,600 | 6,618,496 | ||||||
EVA Precision Industrial Holdings |
3,476,000 | 470,575 | ||||||
FAG Bearings India |
29,500 | 704,599 | ||||||
Graco |
116,376 | 7,356,127 | ||||||
Haitian International Holdings |
530,000 | 774,905 | ||||||
IDEX Corporation |
67,400 | 3,626,794 | ||||||
205,200 | 7,967,916 | |||||||
Lincoln Electric Holdings |
204,585 | 11,716,583 | ||||||
NN |
197,100 | 2,248,911 | ||||||
Nordson Corporation |
74,296 | 5,149,456 | ||||||
Pfeiffer Vacuum Technology |
10,000 | 1,036,113 | ||||||
PMFG 1 |
388,352 | 2,687,396 | ||||||
Rational |
4,000 | 1,340,959 | ||||||
RBC Bearings 1 |
47,000 | 2,441,650 | ||||||
Rotork |
30,000 | 1,218,281 | ||||||
Sarin Technologies |
1,018,600 | 1,245,625 | ||||||
Semperit AG Holding |
70,000 | 2,514,787 | ||||||
Spirax-Sarco Engineering |
38,518 | 1,574,150 | ||||||
Sun Hydraulics |
8,600 | 269,008 | ||||||
Timken Company (The) |
45,600 | 2,566,368 | ||||||
Valmont Industries |
47,900 | 6,854,011 | ||||||
WABCO Holdings 1 |
103,800 | 7,752,822 | ||||||
165,850 | 8,861,365 | |||||||
Woodward |
220,700 | 8,828,000 | ||||||
109,609,780 | ||||||||
Marine - 0.7% | ||||||||
Clarkson |
42,900 | 1,109,881 | ||||||
94,200 | 7,492,668 | |||||||
8,602,549 | ||||||||
Professional Services - 3.9% | ||||||||
Acacia Research-Acacia Technologies |
60,800 | 1,358,880 | ||||||
165,700 | 9,055,505 | |||||||
CRA International 1 |
64,187 | 1,185,534 | ||||||
Equifax |
7,200 | 424,296 | ||||||
Heidrick & Struggles International |
300,831 | 5,029,894 | ||||||
JobStreet Corporation |
723,400 | 892,945 | ||||||
ManpowerGroup |
85,700 | 4,696,360 | ||||||
Michael Page International |
350,000 | 1,974,953 | ||||||
Nihon M&A Center |
42,100 | 2,347,378 | ||||||
On Assignment 1 |
375,400 | 10,030,688 | ||||||
Robert Half International |
63,472 | 2,109,175 | ||||||
Towers Watson & Company Cl. A |
86,000 | 7,046,840 | ||||||
TrueBlue 1 |
30,300 | 637,815 | ||||||
46,790,263 | ||||||||
Road & Rail - 1.1% | ||||||||
99,400 | 5,119,100 | |||||||
Patriot Transportation Holding 1 |
212,958 | 6,397,258 | ||||||
Universal Truckload Services 1 |
68,916 | 1,661,565 | ||||||
13,177,923 | ||||||||
Trading Companies & Distributors - 0.8% | ||||||||
45,000 | 785,700 | |||||||
Lawson Products 1 |
161,431 | 2,072,774 | ||||||
MISUMI Group |
81,600 | 2,243,630 | ||||||
MSC Industrial Direct Cl. A 2 |
56,948 | 4,411,192 | ||||||
9,513,296 | ||||||||
Transportation Infrastructure - 0.1% | ||||||||
Wesco Aircraft Holdings 1 |
83,400 | 1,548,738 | ||||||
Total (Cost $194,014,034) | 340,348,389 | |||||||
Information Technology 21.4% | ||||||||
Communications Equipment - 1.5% | ||||||||
AAC Technologies Holdings |
177,600 | 998,364 | ||||||
ADTRAN 2 |
212,700 | 5,234,547 | ||||||
Bel Fuse Cl. A |
36,672 | 508,641 | ||||||
Bel Fuse Cl. B |
14,063 | 189,147 | ||||||
Comba Telecom Systems Holdings 1 |
450,000 | 143,888 | ||||||
Comtech Telecommunications 2 |
30,000 | 806,700 | ||||||
Emulex Corporation 1 |
50,000 | 326,000 | ||||||
EVS Broadcast Equipment |
35,000 | 2,430,049 | ||||||
Globecomm Systems 1 |
183,700 | 2,321,968 | ||||||
Plantronics |
16,100 | 707,112 | ||||||
Sonus Networks 1 |
574,000 | 1,727,740 | ||||||
Tellabs |
700,000 | 1,386,000 | ||||||
VTech Holdings |
47,050 | 711,569 | ||||||
17,491,725 | ||||||||
Computers & Peripherals - 1.4% | ||||||||
Asustek Computer |
50,000 | 430,416 | ||||||
Catcher Technology |
84,600 | 440,346 | ||||||
Diebold |
251,600 | 8,476,404 |
22 | 2013 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2013 (unaudited) |
SHARES | VALUE | |||||||
Information Technology (continued) | ||||||||
Computers & Peripherals (continued) | ||||||||
Intevac 1 |
20,000 | $ | 113,200 | |||||
STEC 1 |
320,500 | 2,153,760 | ||||||
Western Digital 2 |
93,200 | 5,786,788 | ||||||
17,400,914 | ||||||||
Electronic Equipment, Instruments & Components - 8.5% | ||||||||
Agilysys 1 |
175,125 | 1,977,161 | ||||||
61,795 | 4,684,679 | |||||||
165,200 | 3,320,520 | |||||||
Broadway Industrial Group |
923,400 | 211,271 | ||||||
Chroma ATE |
219,982 | 374,331 | ||||||
Cognex Corporation |
69,800 | 3,156,356 | ||||||
Coherent |
217,540 | 11,979,928 | ||||||
128,900 | 4,311,705 | |||||||
Domino Printing Sciences |
185,000 | 1,755,784 | ||||||
DTS 1 |
207,000 | 4,260,060 | ||||||
33,100 | 1,119,442 | |||||||
FEI Company 2 |
88,900 | 6,488,811 | ||||||
FLIR Systems |
268,240 | 7,234,433 | ||||||
Hollysys Automation Technologies 1 |
42,227 | 524,037 | ||||||
82,720 | 5,023,585 | |||||||
Maxwell Technologies 1 |
53,000 | 378,950 | ||||||
Methode Electronics |
40,500 | 688,905 | ||||||
Molex 2 |
72,600 | 2,130,084 | ||||||
National Instruments |
251,850 | 7,036,689 | ||||||
Newport Corporation 1 |
523,500 | 7,292,355 | ||||||
Perceptron |
357,700 | 2,822,253 | ||||||
Plexus Corporation 1 |
176,100 | 5,263,629 | ||||||
Richardson Electronics |
427,332 | 5,016,878 | ||||||
Rofin-Sinar Technologies 1 |
289,000 | 7,207,660 | ||||||
67,800 | 3,192,702 | |||||||
211,400 | 1,775,760 | |||||||
Vaisala Cl. A |
90,320 | 2,324,260 | ||||||
101,552,228 | ||||||||
Internet Software & Services - 1.5% | ||||||||
Akamai Technologies 1 |
7,300 | 310,615 | ||||||
comScore 1 |
123,000 | 2,999,970 | ||||||
QuinStreet 1 |
93,428 | 806,284 | ||||||
RealNetworks 1 |
165,851 | 1,253,833 | ||||||
Support.com 1 |
111,100 | 507,727 | ||||||
ValueClick 1 |
145,000 | 3,578,600 | ||||||
177,000 | 8,738,490 | |||||||
18,195,519 | ||||||||
IT Services - 2.7% | ||||||||
Computer Task Group |
3,400 | 78,098 | ||||||
Convergys Corporation |
121,000 | 2,109,030 | ||||||
CSE Global |
949,400 | 636,679 | ||||||
eClerx Services |
35,900 | 433,760 | ||||||
Fiserv 1 |
1,900 | 166,079 | ||||||
Hackett Group |
655,000 | 3,399,450 | ||||||
Innodata 1 |
89,973 | 287,914 | ||||||
ManTech International Cl. A |
35,400 | 924,648 | ||||||
MAXIMUS |
94,200 | 7,016,016 | ||||||
157,462 | 3,566,514 | |||||||
NeuStar Cl. A 1 |
29,287 | 1,425,691 |
Sapient Corporation 1 |
706,602 | 9,228,222 | ||||||
Sykes Enterprises 1 |
91,124 | 1,436,114 | ||||||
Teradata Corporation 1 |
4,700 | 236,081 | ||||||
Unisys Corporation 1 |
94,000 | 2,074,580 | ||||||
33,018,876 | ||||||||
Office Electronics - 0.1% | ||||||||
23,058 | 1,001,639 | |||||||
Semiconductors & Semiconductor Equipment - 3.9% | ||||||||
Aixtron ADR 1 |
118,858 | 1,994,437 | ||||||
Analog Devices 2 |
8,900 | 401,034 | ||||||
ASM Pacific Technology |
15,000 | 165,838 | ||||||
ATMI 1 |
110,815 | 2,620,775 | ||||||
Cabot Microelectronics 1 |
41,609 | 1,373,513 | ||||||
Diodes 1 |
252,450 | 6,556,127 | ||||||
Entegris 1 |
48,700 | 457,293 | ||||||
Entropic Communications 1 |
102,000 | 435,540 | ||||||
Exar Corporation 1 |
157,576 | 1,697,094 | ||||||
Integrated Silicon Solution 1 |
190,700 | 2,090,072 | ||||||
International Rectifier 1 |
330,000 | 6,910,200 | ||||||
Miraial |
26,170 | 410,572 | ||||||
MKS Instruments |
108,200 | 2,871,628 | ||||||
149,200 | 2,188,764 | |||||||
OmniVision Technologies 1 |
24,900 | 464,385 | ||||||
Power Integrations 2 |
49,000 | 1,987,440 | ||||||
RDA Microelectronics ADR |
72,000 | 797,760 | ||||||
246,000 | 4,322,220 | |||||||
TriQuint Semiconductor 1 |
809,967 | 5,613,071 | ||||||
94,200 | 3,336,564 | |||||||
46,694,327 | ||||||||
Software - 1.8% | ||||||||
131,150 | 6,095,852 | |||||||
105,600 | 7,719,360 | |||||||
Aspen Technology 1 |
42,100 | 1,212,059 | ||||||
Blackbaud 2 |
31,400 | 1,022,698 | ||||||
97,600 | 4,211,440 | |||||||
SimCorp |
50,000 | 1,483,395 | ||||||
TeleNav 1 |
43,597 | 228,012 | ||||||
21,972,816 | ||||||||
Total (Cost $196,192,377) | 257,328,044 | |||||||
Materials 6.7% | ||||||||
Chemicals - 1.2% | ||||||||
Cabot Corporation 2 |
58,000 | 2,170,360 | ||||||
Hawkins |
86,178 | 3,394,552 | ||||||
Huchems Fine Chemical |
62,256 | 1,003,030 | ||||||
Intrepid Potash 2 |
34,966 | 666,102 | ||||||
LSB Industries 1 |
31,810 | 967,342 | ||||||
Minerals Technologies 2 |
67,060 | 2,772,260 | ||||||
OM Group 1 |
22,200 | 686,424 | ||||||
Tronox Cl. A |
23,500 | 473,525 | ||||||
Valspar Corporation (The) |
1,200 | 77,604 | ||||||
Victrex |
60,000 | 1,409,008 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2013 Semiannual Report to Stockholders | 23 |
Royce Value Trust |
Schedule of Investments | |||||||||
SHARES | VALUE | ||||||||
Materials (continued) | |||||||||
Chemicals (continued) | |||||||||
5,900 | $ | 495,836 | |||||||
14,116,043 | |||||||||
Construction Materials - 0.9% | |||||||||
Ash Grove Cement Cl. B 4 |
50,518 | 9,487,280 | |||||||
Eternit |
120,000 | 508,212 | |||||||
Mardin Cimento Sanayii |
600,000 | 1,368,798 | |||||||
11,364,290 | |||||||||
Containers & Packaging - 0.9% | |||||||||
Greif Cl. A 2 |
90,844 | 4,784,753 | |||||||
Mayr-Melnhof Karton |
60,000 | 6,450,975 | |||||||
11,235,728 | |||||||||
Metals & Mining - 3.6% | |||||||||
AuRico Gold |
132,000 | 576,840 | |||||||
Central Steel & Wire 4 |
6,050 | 4,319,700 | |||||||
Endeavour Mining 1 |
300,000 | 159,741 | |||||||
Fresnillo |
22,500 | 301,833 | |||||||
Gabriel Resources 1 |
550,000 | 732,148 | |||||||
Hecla Mining |
410,000 | 1,221,800 | |||||||
IAMGOLD Corporation |
510,000 | 2,208,300 | |||||||
Kimber Resources 1 |
560,000 | 52,528 | |||||||
Kinross Gold |
24,600 | 125,460 | |||||||
Kirkland Lake Gold 1 |
90,000 | 378,245 | |||||||
Maharashtra Seamless |
511,300 | 1,763,845 | |||||||
Major Drilling Group International |
354,900 | 2,416,168 | |||||||
Pan American Silver |
243,730 | 2,837,017 | |||||||
Pretium Resources 1 |
211,000 | 1,392,600 | |||||||
173,420 | 11,369,415 | ||||||||
Saracen Mineral Holdings 1 |
200,600 | 21,098 | |||||||
Schnitzer Steel Industries Cl. A 2 |
100,000 | 2,338,000 | |||||||
Sims Metal Management ADR |
186,567 | 1,410,447 | |||||||
Synalloy Corporation |
178,800 | 2,776,764 | |||||||
Village Main Reef |
986,600 | 44,913 | |||||||
Worthington Industries |
194,500 | 6,167,595 | |||||||
42,614,457 | |||||||||
Paper & Forest Products - 0.1% | |||||||||
Qunxing Paper Holdings 5 |
3,296,000 | 42,496 | |||||||
Schweitzer-Mauduit International |
22,300 | 1,112,324 | |||||||
1,154,820 | |||||||||
Total (Cost $72,326,510) | 80,485,338 | ||||||||
Telecommunication Services 0.7% | |||||||||
Wireless Telecommunication Services - 0.7% | |||||||||
Telephone and Data Systems |
338,270 | 8,338,356 | |||||||
Total (Cost $8,279,046) | 8,338,356 | ||||||||
Miscellaneous 7 4.9% | |||||||||
Total (Cost $55,133,774) | 58,480,564 | ||||||||
TOTAL COMMON STOCKS | |||||||||
(Cost $946,584,772) | 1,280,156,008 | ||||||||
PREFERRED STOCK 0.1% | |||||||||
(Cost $796,468) |
55,000 | 1,518,660 | |||||||
REPURCHASE AGREEMENT 6.1% | |||||||||
Fixed Income Clearing Corporation, | |||||||||
0.01% dated 6/28/13, due 7/1/13, |
|||||||||
maturity value $72,466,060 (collateralized |
|||||||||
by obligations of various U.S. Government |
|||||||||
Agencies, 0.125%-1.50% due 12/31/13, valued at |
|||||||||
$73,918,050) (Cost $72,466,000) |
72,466,000 | ||||||||
TOTAL INVESTMENTS 112.8% | |||||||||
(Cost $1,019,847,240) |
1,354,140,668 | ||||||||
LIABILITIES LESS CASH AND OTHER ASSETS (12.8)% | (153,575,048 | ) | |||||||
NET ASSETS 100.0% | $ 1,200,565,620 | ||||||||
24 | 2013 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2013 (unaudited) |
| New additions in 2013. |
1 | Non-income producing. |
2 | All or a portion of these securities were pledged as collateral in connection with the revolving credit agreement at June 30, 2013. Total market value of pledged securities at June 30, 2013, was $339,962,479. |
3 | At June 30, 2013, a portion of these securities were rehypothecated in connection with the Funds revolving credit agreement in the aggregate amount of $146,033,748. |
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 | Securities for which market quotations are not readily available represent 0.1% of net assets. These securities have been valued at their fair value under procedures approved by the Funds 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. |
6 | At June 30, 2013, the Fund owned 5% or more of the Companys 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. |
7 | Includes securities first acquired in 2013 and less than 1% of net assets. |
Bold indicates the Funds 20 largest equity holdings in terms of June 30, 2013, market value. | |
TAX INFORMATION: The cost of total investments for Federal income tax purposes was $1,021,803,853. At June 30, 2013, net unrealized appreciation for all securities was $332,336,815, consisting of aggregate gross unrealized appreciation of $405,550,776 and aggregate gross unrealized depreciation of $73,213,961. 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. | 2013 Semiannual Report to Stockholders | 25 |
Royce Value Trust | June 30, 2013 (unaudited) | |
Statement of Assets and Liabilities | |||||
ASSETS: | |||||
Investments at value | |||||
Non-Affiliated Companies (cost $941,848,598) |
$ | 1,277,834,428 | |||
Affiliated Companies (cost $5,532,642) |
3,840,240 | ||||
Total investments at value | 1,281,674,668 | ||||
Repurchase agreements (at cost and value) | 72,466,000 | ||||
Cash and foreign currency | 42,650 | ||||
Receivable for investments sold | 2,072,666 | ||||
Receivable for dividends and interest | 908,269 | ||||
Prepaid expenses and other assets | 481,299 | ||||
Total Assets |
1,357,645,552 | ||||
LIABILITIES: | |||||
Revolving credit agreement | 150,000,000 | ||||
Payable for investments purchased | 6,301,898 | ||||
Payable for investment advisory fee | 472,327 | ||||
Payable for interest expense | 20,400 | ||||
Accrued expenses | 285,307 | ||||
Total Liabilities |
157,079,932 | ||||
Net Assets |
$ | 1,200,565,620 | |||
ANALYSIS OF NET ASSETS: | |||||
Paid-in capital - $0.001 par value per share; 71,115,120 shares outstanding (150,000,000 shares authorized) | $ | 832,908,853 | |||
Undistributed net investment income (loss) | 6,661,363 | ||||
Accumulated net realized gain (loss) on investments and foreign currency | 53,499,501 | ||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 334,279,920 | ||||
Quarterly distributions | (26,784,017 | ) | |||
Net Assets (net asset value per share - $16.88) |
$ | 1,200,565,620 | |||
Investments at identified cost |
$ | 947,381,240 |
26 | 2013 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce Value Trust | Six Months Ended June 30, 2013 (unaudited) | |
Statement of Operations | |||||
INVESTMENT INCOME: | |||||
Income: | |||||
Dividends |
|||||
Non-Affiliated Companies |
$ | 8,330,764 | |||
Affiliated Companies |
26,652 | ||||
Foreign withholding tax |
(423,192 | ) | |||
Interest |
47,580 | ||||
Rehypothecation income |
220,756 | ||||
Total income | 8,202,560 | ||||
Expenses: | |||||
Investment advisory fees |
2,843,074 | ||||
Interest expense |
930,181 | ||||
Stockholder reports |
199,242 | ||||
Custody and transfer agent fees |
159,517 | ||||
Administrative and office facilities |
67,761 | ||||
Directors fees |
63,292 | ||||
Professional fees |
29,721 | ||||
Other expenses |
66,604 | ||||
Total expenses | 4,359,392 | ||||
Compensating balance credits | (10 | ) | |||
Net expenses | 4,359,382 | ||||
Net investment income (loss) | 3,843,178 | ||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | |||||
Net realized gain (loss): | |||||
Investments |
39,996,189 | ||||
Foreign currency transactions |
(87,864 | ) | |||
Net change in unrealized appreciation (depreciation): | |||||
Investments and foreign currency translations |
88,632,732 | ||||
Other assets and liabilities denominated in foreign currency |
(1,065 | ) | |||
Net realized and unrealized gain (loss) on investments and foreign currency | 128,539,992 | ||||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | 132,383,170 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2013 Semiannual Report to Stockholders | 27 |
Royce Value Trust |
Statement of Changes in Net Assets Applicable to Common Stockholders | |||||||||||
Six months ended | |||||||||||
6/30/13 | Year ended | ||||||||||
(unaudited) | 12/31/12 | ||||||||||
INVESTMENT OPERATIONS: | |||||||||||
Net investment income (loss) | $ | 3,843,178 | $ | 16,207,117 | |||||||
Net realized gain (loss) on investments and foreign currency | 39,908,325 | 62,897,553 | |||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | 88,631,667 | 75,702,882 | |||||||||
Net increase (decrease) in net assets from investment operations | 132,383,170 | 154,807,552 | |||||||||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: | |||||||||||
Net investment income | | (2,356,525 | ) | ||||||||
Net realized gain on investments and foreign currency | | (9,000,970 | ) | ||||||||
Total distributions to Preferred Stockholders | | (11,357,495 | ) | ||||||||
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS FROM INVESTMENT OPERATIONS |
132,383,170 | 143,450,057 | |||||||||
DISTRIBUTIONS TO COMMON STOCKHOLDERS: | |||||||||||
Net investment income | | (11,444,608 | ) | ||||||||
Net realized gain on investments and foreign currency | | (43,713,673 | ) | ||||||||
Quarterly distributions1 | (26,784,017 | ) | | ||||||||
Total distributions to Common Stockholders | (26,784,017 | ) | (55,158,281 | ) | |||||||
CAPITAL STOCK TRANSACTIONS: | |||||||||||
Reinvestment of distributions to Common Stockholders | 12,539,971 | 27,494,847 | |||||||||
Total capital stock transactions | 12,539,971 | 27,494,847 | |||||||||
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS | 118,139,124 | 115,786,623 | |||||||||
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: | |||||||||||
Beginning of period |
1,082,426,496 | 966,639,873 | |||||||||
End of period (including undistributed net investment income (loss) of $6,661,363 at 6/30/13 and $2,818,184 at 12/31/12) |
$ | 1,200,565,620 | $ | 1,082,426,496 |
1 To be allocated to net investment income, net realized gains and/or return of capital at year end.
28 | 2013 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce Value Trust | June 30, 2013 (unaudited) | |
Statement of Cash Flows | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net increase (decrease) in net assets from investment operations |
$ | 132,383,170 | |||
Adjustments to reconcile net increase (decrease) in net assets from operations to net cash provided by operating activities: |
|||||
Purchases of long-term investments |
(225,830,118 | ) | |||
Proceeds from sales and maturities of long-term investments |
233,433,209 | ||||
Net purchases, sales and maturities of short-term investments |
2,181,000 | ||||
Net (increase) decrease in dividends and interest receivable and other assets |
44,358 | ||||
Net increase (decrease) in interest expense payable, accrued expenses and other liabilities |
24,199 | ||||
Net change in unrealized appreciation (depreciation) on investments |
(88,632,732 | ) | |||
Net realized gain on investments and foreign currency |
(39,908,325 | ) | |||
Cash provided by operating activities | 13,694,761 | ||||
CASH FLOW FROM FINANCING ACTIVITIES: | |||||
Distributions paid to Common Stockholders | (26,784,017 | ) | |||
Reinvestment of distributions to Common Stockholders | 12,539,971 | ||||
Cash used for financing activities | (14,244,046 | ) | |||
INCREASE (DECREASE) IN CASH: | (549,285 | ) | |||
Cash and foreign currency at beginning of period |
591,935 | ||||
Cash and foreign currency at end of period |
$ | 42,650 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2013 Semiannual Report to Stockholders | 29 |
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 Funds performance for the periods presented.
Six months ended | ||||||||||||||||||||||||||||||
June 30, 2013 | Years ended December 31, | |||||||||||||||||||||||||||||
(unaudited) | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||||||
NET ASSET VALUE, BEGINNING OF PERIOD | $ | 15.40 | $ | 14.18 | $ | 16.73 | $ | 12.87 | $ | 9.37 | $ | 19.74 | ||||||||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||||||||
Net investment income (loss) |
0.05 | 0.23 | 0.10 | 0.24 | 0.17 | 0.14 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency |
1.83 | 2.02 | (1.62 | ) | 3.85 | 3.87 | (8.50 | ) | ||||||||||||||||||||||
Total investment operations |
1.88 | 2.25 | (1.52 | ) | 4.09 | 4.04 | (8.36 | ) | ||||||||||||||||||||||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: | ||||||||||||||||||||||||||||||
Net investment income |
| (0.04 | ) | (0.03 | ) | (0.20 | ) | (0.18 | ) | (0.01 | ) | |||||||||||||||||||
Net realized gain on investments and foreign currency |
| (0.13 | ) | (0.16 | ) | | | (0.20 | ) | |||||||||||||||||||||
Return of capital |
| | | | (0.02 | ) | | |||||||||||||||||||||||
Total distributions to Preferred Stockholders |
| (0.17 | ) | (0.19 | ) | (0.20 | ) | (0.20 | ) | (0.21 | ) | |||||||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS FROM INVESTMENT OPERATIONS |
1.88 | 2.08 | (1.71 | ) | 3.89 | 3.84 | (8.57 | ) | ||||||||||||||||||||||
DISTRIBUTIONS TO COMMON STOCKHOLDERS: | ||||||||||||||||||||||||||||||
Net investment income |
| (0.17 | ) | (0.08 | ) | (0.03 | ) | | (0.06 | ) | ||||||||||||||||||||
Net realized gain on investments and foreign currency |
| (0.63 | ) | (0.43 | ) | | | (1.18 | ) | |||||||||||||||||||||
Return of capital |
| | (0.27 | ) | | (0.32 | ) | (0.48 | ) | |||||||||||||||||||||
Quarterly distributions1 |
(0.38 | ) | | | | | | |||||||||||||||||||||||
Total distributions to Common Stockholders |
(0.38 | ) | (0.80 | ) | (0.78 | ) | (0.03 | ) | (0.32 | ) | (1.72 | ) | ||||||||||||||||||
CAPITAL STOCK TRANSACTIONS: | ||||||||||||||||||||||||||||||
Effect of reinvestment of distributions by Common Stockholders |
(0.02 | ) | (0.06 | ) | (0.06 | ) | (0.00 | ) | (0.02 | ) | (0.08 | ) | ||||||||||||||||||
Total capital stock transactions |
(0.02 | ) | (0.06 | ) | (0.06 | ) | (0.00 | ) | (0.02 | ) | (0.08 | ) | ||||||||||||||||||
NET ASSET VALUE, END OF PERIOD | $ | 16.88 | $ | 15.40 | $ | 14.18 | $ | 16.73 | $ | 12.87 | $ | 9.37 | ||||||||||||||||||
MARKET VALUE, END OF PERIOD | $ | 15.16 | $ | 13.42 | $ | 12.27 | $ | 14.54 | $ | 10.79 | $ | 8.39 | ||||||||||||||||||
TOTAL RETURN: 2 | ||||||||||||||||||||||||||||||
Market Value | 15.86 | %3 | 16.22 | % | (10.46 | )% | 35.05 | % | 35.39 | % | (48.27 | )% | ||||||||||||||||||
Net Asset Value | 12.42 | %3 | 15.41 | % | (10.06 | )% | 30.27 | % | 44.59 | % | (45.62 | )% | ||||||||||||||||||
RATIOS BASED ON AVERAGE NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: |
||||||||||||||||||||||||||||||
Investment advisory fee expense 4 |
0.49 | %5 | 0.56 | % | 0.86 | % | 0.11 | % | 0.00 | % | 1.27 | % | ||||||||||||||||||
Other operating expenses |
0.26 | %5 | 0.15 | % | 0.12 | % | 0.12 | % | 0.16 | % | 0.12 | % | ||||||||||||||||||
Total expenses (net) 6 | 0.75 | %5 | 0.71 | % | 0.98 | % | 0.23 | % | 0.16 | % | 1.39 | % | ||||||||||||||||||
Expenses net of fee waivers and excluding interest expense |
0.59 | %5 | 0.68 | % | 0.98 | % | 0.23 | % | 0.16 | % | 1.39 | % | ||||||||||||||||||
Expenses prior to fee waivers and balance credits |
0.75 | %5 | 0.71 | % | 0.98 | % | 0.23 | % | 0.16 | % | 1.39 | % | ||||||||||||||||||
Expenses prior to fee waivers | 0.75 | %5 | 0.71 | % | 0.98 | % | 0.23 | % | 0.16 | % | 1.39 | % | ||||||||||||||||||
Net investment income (loss) | 0.66 | %5 | 1.57 | % | 0.63 | % | 1.69 | % | 1.66 | % | 0.94 | % | ||||||||||||||||||
SUPPLEMENTAL DATA: | ||||||||||||||||||||||||||||||
Net Assets Applicable to Common Stockholders, | ||||||||||||||||||||||||||||||
End of Period (in thousands) |
$ | 1,200,566 | $ | 1,082,426 | $ | 966,640 | $ | 1,105,879 | $ | 849,777 | $ | 603,234 | ||||||||||||||||||
Liquidation Value of Preferred Stock, End of Period (in thousands) | $ | 220,000 | $ | 220,000 | $ | 220,000 | $ | 220,000 | ||||||||||||||||||||||
Portfolio Turnover Rate | 18 | % | 25 | % | 26 | % | 30 | % | 31 | % | 25 | % | ||||||||||||||||||
PREFERRED STOCK: | ||||||||||||||||||||||||||||||
Total shares outstanding | 8,800,000 | 8,800,000 | 8,800,000 | 8,800,000 | ||||||||||||||||||||||||||
Asset coverage per share | $ | 134.88 | $ | 150.67 | $ | 121.57 | $ | 93.55 | ||||||||||||||||||||||
Liquidation preference per share | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | ||||||||||||||||||||||
Average month-end market value per share | $ | 25.37 | $ | 25.06 | $ | 23.18 | $ | 22.51 | ||||||||||||||||||||||
REVOLVING CREDIT AGREEMENT: | ||||||||||||||||||||||||||||||
Asset coverage | 900 | % | 822 | % | ||||||||||||||||||||||||||
Asset coverage per $1,000 | $ | 9,004 | $ | 8,216 | ||||||||||||||||||||||||||
1 | To be allocated to net investment income, net realized gains and/or return of capital at year end. |
2 | The Market Value Total Return is calculated assuming a purchase of Common Stock on the opening of the first business day and a sale on the closing of the last business day of each period. Dividends and distributions are assumed for the purposes of this calculation to be reinvested at prices obtained under the Funds Distribution Reinvestment and Cash Purchase Plan. Net Asset Value Total Return is calculated on the same basis, except that the Funds net asset value is used on the purchase and sale dates instead of market value. |
3 | Not annualized |
4 | The investment advisory fee is calculated based on average net assets over a rolling 60-month basis, while the above ratios of investment advisory fee expenses are based on the average net assets applicable to Common Stockholders over a 12-month basis. |
5 | Annualized |
6 | Expense ratios based on total average net assets including liquidation value of Preferred Stock were 0.60%, 0.82%, 0.18%, 0.12% and 1.13% for the years ended December 31, 2012, 2011, 2010, 2009 and 2008, respectively. |
30 | 2013 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce Value Trust | ||
Notes to Financial Statements (unaudited) |
Summary of Significant Accounting Policies:
Royce Value
Trust, Inc. (the "Fund"), was incorporated under the laws of the State of Maryland
on July 1, 1986, as a diversified closed-end investment company. The Fund commenced
operations on November 26, 1986.
The Board of Directors of the Fund (the Board) has approved, subject to stockholder approval, the contribution of a portion
of the Funds assets to a newly formed closed-end investment company, Royce
Global Value Trust, Inc. (RGT). All of the RGTs common shares
would then be distributed to the Common Stockholders of the Fund.
The Fund would
contribute to RGT approximately $100 million of its cash and/or securities, and
would then distribute all of the shares of RGT pro rata to the Common Stockholders of
the Fund.
RGT is a closed-end management investment company, organized as a Maryland
corporation and registered under the 1940 Act, whose objective is long-term growth
of capital. RGT had no operations prior to June 30, 2013, other than the sale of
10,160 common shares for $100,076 to the Fund on June 19, 2013.
The preparation
of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Actual results
could differ from those estimates.
Level | 1 quoted prices in active markets for identical securities. |
|
Level | 2 other significant observable inputs (including quoted prices for similar securities, foreign securities that may be fair valued and repurchase agreements). The table below includes all Level 2 securities. Level 2 securities with values based on quoted prices for similar securities are noted in the Schedule of Investments. |
|
Level | 3 significant unobservable inputs (including last trade price before trading was suspended, or at a discount thereto for lack of marketability or otherwise, market price information regarding other securities, information received from the company and/or published documents, including SEC filings and financial statements, or other publicly available information). |
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Common Stocks | $1,258,954,905 | $20,976,572 | $ | 224,531 | $1,280,156,008 | |||||||||||
Preferred Stocks | | | 1,518,660 | 1,518,660 | ||||||||||||
Cash Equivalents | | 72,466,000 | | 72,466,000 |
For the six months ended June 30, 2013, certain securities have transferred in and out of Level 1 and Level 2 measurements as a result of the fair value pricing procedures for international equities. The Fund recognizes transfers between levels as of the end of the reporting period. At June 30, 2013, securities valued at $207,379,737 were transferred from Level 2 to Level 1 and securities valued at $21,411 were transferred from Level 1 to Level 2 within the fair value hierarchy.
2013 Semiannual Report to Stockholders | 31 |
Royce Value Trust | ||
Notes to Financial Statements (unaudited) (continued) |
Valuation of Investments (continued):
Level 3 Reconciliation:
Realized and Unrealized | ||||||||||||||||
Balance as of 12/31/12 | Purchases | Gain (Loss)1 | Balance as of 6/30/13 | |||||||||||||
Common Stocks | $ | 263,067 | $ | 100,076 | $ | (138,612 | ) | $ | 224,531 | |||||||
Preferred Stocks | 1,504,800 | | 13,860 | 1,518,660 |
1 | The net change in unrealized appreciation (depreciation) is included in the accompanying Statement of Operations. Change in unrealized appreciation (depreciation) includes net unrealized appreciation (depreciation) resulting from changes in investment values during the reporting period and the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized. Net realized gain (loss) from investments and foreign currency transactions is included in the accompanying Statement of Operations. |
Repurchase Agreements:
The Fund may
enter into repurchase agreements with institutions that the Funds investment
adviser has determined are creditworthy. The Fund restricts repurchase agreements
to maturities of no more than seven days. Securities pledged as collateral for repurchase
agreements, which are held until maturity of the repurchase agreements, are marked-to-market
daily and maintained at a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). Repurchase agreements could involve certain
risks in the event of default or insolvency of the counter-party, including possible
delays or restrictions upon the ability of the Fund to dispose of its underlying
securities.
Foreign Currency:
Net realized
foreign exchange gains or losses arise from sales and maturities of short-term securities,
sales of foreign currencies, expiration of currency forward contracts, currency
gains or losses realized between the trade and settlement dates on securities transactions,
and the difference between the amounts of dividends, interest, and foreign withholding
taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses arise
from changes in the value of assets and liabilities, including investments in securities
at the end of the reporting period, as a result of changes in foreign currency exchange
rates.
Taxes:
As a qualified
regulated investment company under Subchapter M of the Internal Revenue Code, the
Fund is not subject to income taxes to the extent that it distributes substantially
all of its taxable income for its fiscal year. The Schedule of Investments includes
information regarding income taxes under the caption Tax Information.
Distributions:
The Fund pays
quarterly distributions on the Funds Common Stock at the annual rate of 5%
of the rolling average of the prior four calendar quarter-end NAVs of the Funds
Common Stock, with the fourth quarter distribution being the greater of 1.25% of
the rolling average or the distribution required by IRS regulations. Prior to November
15, 2012, distributions to Preferred Stockholders were accrued daily and paid quarterly.
Distributions to Common Stockholders are recorded on ex-dividend date. Distributable
capital gains and/or net investment income were first allocated to Preferred Stockholder
distributions, with any excess allocable to Common Stockholders. If capital gains
and/or net investment income were allocated to both Preferred and Common Stockholders,
the tax character of such allocations was proportional. To the extent that distributions
are not paid from long-term capital gains, net investment income or net short-term
capital gains, they will represent a return of capital. Distributions are determined
in accordance with income tax regulations that may differ from accounting principles
generally accepted in the United States of America. Permanent book and tax differences
relating to stockholder distributions will result in reclassifications within the
capital accounts. Undistributed net investment income may include temporary book
and tax basis differences, which will reverse in a subsequent period. Any taxable
income or gain remaining undistributed at fiscal year end is distributed in the
following year.
Investment Transactions and Related Investment
Income:
Investment
transactions are accounted for on the trade date. Dividend income is recorded on
the ex-dividend date. Non-cash dividend income is recorded at the fair market value
of the securities received. Interest income is recorded on an accrual basis. Premium
and discounts on debt securities are amortized using the effective yield-to-maturity
method. Realized gains and losses from investment transactions are determined on
the basis of identified cost for book and tax purposes.
Expenses:
The Fund incurs direct
and indirect expenses. Expenses directly attributable to the Fund are charged to
the Funds operations, while expenses applicable to more than one of the Royce
Funds are allocated equitably. Certain personnel, occupancy costs and other administrative
expenses related to the Royce Funds are allocated by Royce & Associates, LLC
(Royce) under an administration agreement and are included in administrative
and office facilities and professional fees. The Fund has adopted a deferred fee
agreement that allows the Directors to defer the receipt of all or a portion of
directors fees otherwise payable. The deferred fees are invested in certain
Royce Funds until distributed in accordance with the agreement.
32 | 2013 Semiannual Report to Stockholders |
Royce Value Trust | ||
Notes to Financial Statements (unaudited) (continued) |
Compensating Balance Credits:
The Fund has
an arrangement with its custodian bank, whereby a portion of the custodians
fee is paid indirectly by credits earned on the Funds cash on deposit with
the bank. This deposit arrangement is an alternative to purchasing overnight investments.
Conversely, the Fund pays interest to the custodian on any cash overdrafts, to the
extent they are not offset by credits earned on positive cash balances.
Capital Stock:
The Fund issued
839,889 and 2,103,737 shares of Common Stock as reinvestment of distributions by
Common Stockholders for the six months ended June 30, 2013 and the year ended December
31, 2012, respectively.
Borrowings:
The Fund entered
into a $150,000,000 revolving credit agreement (the credit agreement) with BNP Paribas
Prime Brokerage Inc. (BNPP) on November 14, 2012. The Fund pays a commitment fee
of 0.50% per annum on the unused portion of the credit agreement. The credit agreement
has a 360-day rolling term that resets daily; however, if the Fund exceeds certain
net asset value triggers, the credit agreement may convert to a 60-day rolling term
that resets daily. The Fund is required to pledge portfolio securities as collateral
in an amount up to two times the loan balance outstanding and has granted a security
interest in the securities pledged to, and in favor of, BNPP as security for the
loan balance outstanding. If the Fund fails to meet certain requirements, or maintain
other financial covenants required under the credit agreement, the Fund may be required
to repay immediately, in part or in full, the loan balance outstanding under the
credit agreement necessitating the sale of portfolio securities at potentially inopportune
times. The credit agreement also permits, subject to certain conditions, BNPP to
rehypothecate portfolio securities pledged by the Fund up to the amount of the loan
balance outstanding. The Fund continues to receive payments in lieu of dividends
and interest on rehypothecated securities. The Fund also has the right under the
credit agreement to recall the rehypothecated securities from BNPP on demand. If
BNPP fails to deliver the recalled security in a timely manner, the Fund will be
compensated by BNPP for any fees or losses related to the failed delivery or, in
the event a recalled security will not be returned by BNPP, the Fund, upon notice
to BNPP, may reduce the loan balance outstanding by the amount of the recalled security
failed to be returned. The Fund will receive a portion of the fees earned by BNPP
in connection with the rehypothecation of portfolio securities.
As of June 30, 2013,
the Fund has outstanding borrowings of $150,000,000. During the six months ended
June 30, 2013, the Fund borrowed an average
daily balance of $150,000,000 at a weighted average borrowing cost of 1.23%. As
of June 30, 2013, the aggregate value of rehypothecated securities was $146,033,748.
During the six months ended June 30, 2013, the Fund earned $220,756 in fees from
rehypothecated securities.
Investment Advisory Agreement:
As compensation
for its services under the Investment Advisory Agreement, Royce receives a fee comprised
of a Basic Fee (Basic Fee) and an adjustment to the Basic Fee based
on the investment performance of the Fund in relation to the investment record of
the S&P SmallCap 600 Index (S&P 600").
The Basic Fee is a monthly
fee equal to 1/12 of 1% (1% on an annualized basis) of the average of the Funds
month-end net assets applicable to Common Stockholders, plus the liquidation value
of outstanding Preferred Stock, for the rolling 60-month period ending with such
month (the "performance period"). The Basic Fee for each month is increased or decreased
at the rate of 1/12 of .05% for each percentage point that the investment performance
of the Fund exceeds, or is exceeded by, the percentage change in the investment
record of the S&P 600 for the performance period by more than two percentage
points. The performance period for each such month is a rolling 60-month period
ending with such month. The maximum increase or decrease in the Basic Fee for any
month may not exceed 1/12 of .5%. Accordingly, for each month, the maximum monthly
fee rate as adjusted for performance is 1/12 of 1.5% and is payable if the investment
performance of the Fund exceeds the percentage change in the investment record of
the S&P 600 by 12 or more percentage points for the performance period, and
the minimum monthly fee rate as adjusted for performance is 1/12 of .5% and is payable
if the percentage change in the investment record of the S&P 600 exceeds the
investment performance of the Fund by 12 or more percentage points for the performance
period.
Notwithstanding the foregoing, Royce is not entitled to receive any fee
for any month when the investment performance of the Fund for the rolling 36-month
period ending with such month is negative. In the event that the Funds investment
performance for such a performance period is less than zero, Royce will not be required
to refund to the Fund any fee earned in respect of any prior performance period.
For the six rolling 60-month periods ended June 2013, the Funds investment
performance ranged from 20% to 28% below the investment performance of the S&P
600. Accordingly, the net investment advisory fee consisted of a Basic Fee of $5,686,148
and a net downward adjustment of $2,843,074 for the performance of the Fund relative
to that of the S&P 600. For the six months ended June 30, 2013, the Fund accrued
and paid Royce investment advisory fees totaling $2,843,074.
2013 Semiannual Report to Stockholders | 33 |
Royce Value Trust | ||
Notes to Financial Statements (unaudited) (continued) |
Purchases and Sales of Investment Securities:
For the six
months ended June 30, 2013, the costs of purchases and proceeds from sales of investment
securities, other than short-term securities, amounted to $231,788,925 and $221,192,129,
respectively.
Transactions in Affiliated Companies:
An Affiliated Company as defined in the Investment Company Act of 1940, is a company in which a
fund owns 5% or more of the companys outstanding voting securities at any
time during the period. The Fund effected the following transactions in shares of
such companies for the six months ended June 30, 2013:
Shares | Market Value | Cost of | Cost of | Realized | Dividend | Shares | Market Value | |||||||||||||||
Affiliated Company | 12/31/12 | 12/31/12 | Purchases | Sales | Gain (Loss) | Income | 6/30/13 | 6/30/13 | ||||||||||||||
Royce Global Value Trust | $ | 100,076 | | | $ | | 10,160 | $ | 100,076 | |||||||||||||
Timberland Bancorp |