The Case for Small-Cap Value: Miles Lewis on Asset TV’s Small-Cap Masterclass—Royce
article 12-27-2021

The Case for Small-Cap Value: Miles Lewis on Asset TV’s Small-Cap Masterclass

PM Miles Lewis was a panelist on Asset TV’s Small-Cap Masterclass discussing why he believes small-cap value will continue to lead, how he’s positioning his portfolio for inflation, and more.


Portfolio Manager Miles Lewis joined host Jenna Dagenhart and another investment professional on Asset TV’s Small-Cap Masterclass, which aired December 21, 2021, to talk about why he believes small-cap value will outperform small-cap growth, how he is positioning Royce Total Return Fund for inflation, and more.

Watch Miles’s appearance here.

Miles said that the valuation spread between small-cap growth and small-cap value is very favorable, wider than it was before the bubble. In addition, he said that relative performance sometimes matters a lot, as small-cap value is well below its long-term average return while small-cap growth is well above. He also made his case for active management, noting that fewer people analyze small-cap stocks and that active management has historically done well in positive single digit return markets.

“I think small caps as an asset class are poised for a good run” he said. “I think that we've had an environment where the market has kind of risen in unison and usually those environments are not followed by hugely up markets again in the subsequent years. So I think stock picking and active management becomes even more important in the next few years.”

Watch Miles’s appearance here.

Learn more about Miles Lewis.

Important Disclosure Information

Average Annual Total Returns as of 9/30/21 (%) 

Total Return -1.75 47.42 8.50 10.44 11.73 7.89 9.60 10.59 12/15/93
Russell 2000 Value -2.98 63.92 8.58 11.03 13.22 7.50 9.79 10.13 N/A
Russell 2000 -4.36 47.68 10.54 13.45 14.63 9.16 10.29 9.61 N/A

Annual Operating Expenses: 1.25

1 Not annualized.

All performance information reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, so that shares may be worth more or less than their original cost when redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee, payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at Operating expenses reflect the Fund's total annual operating expenses for the Investment Class as of the Fund's most current prospectus and include management fees, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies.

The thoughts and opinions expressed in the video are solely those of the persons speaking as of December 1, 2021 and may differ from those of other Royce investment professionals, or the firm as a whole. There can be no assurance with regard to future market movements.

The performance data and trends outlined in this presentation are presented for illustrative purposes only. Past performance is no guarantee of future results. Historical market trends are not necessarily indicative of future market movements. There can be no assurance that companies that currently pay a dividend will continue to do so in the future.

Sector weightings are determined using the Global Industry Classification Standard ("GICS"). GICS was developed by, and is the exclusive property of, Standard & Poor's Financial Services LLC ("S&P") and MSCI Inc. ("MSCI"). GICS is the trademark of S&P and MSCI. "Global Industry Classification Standard (GICS)" and "GICS Direct" are service marks of S&P and MSCI.

Percentage of Fund Holdings As of 9/30/2021 (%)

  Royce Total Return

Minerals Technologies


Company examples are for illustrative purposes only. This does not constitute a recommendation to buy or sell any stock. There can be no assurance that the securities mentioned in this piece will be included in any Fund’s portfolio in the future.

There can be no assurance that companies that currently pay a dividend will continue to do so in the future.

The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The Nasdaq Stock Market. It is a broad based Index and is calculated under a market capitalization weighted methodology index.

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and / or Russell ratings or underlying data and no party may rely on any Russell Indexes and / or Russell ratings and / or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. All indexes referenced are unmanaged and capitalization weighted. 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 2000 Value and Growth indexes consist of the respective value and growth stocks within the Russell 2000 as determined by Russell Investments. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.

This material is not authorized for distribution unless preceded or accompanied by a current prospectus. Please read the prospectus carefully before investing or sending money. The Fund invests primarily in small-cap stocks, which may involve considerably more risk than investing in larger-cap stocks. (Please see "Primary Risks for Fund Investors" in the prospectus.) The Fund’s broadly diversified portfolio does not ensure a profit or guarantee against loss. The Fund may invest up to 25% of its net assets (measured at the time of investment) in securities of companies headquartered in foreign countries, which may involve political, economic, currency, and other risks not encountered in U.S. investments. (Please see "Investing Foreign Securities" in the prospectus.)



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