Francis Gannon Talks PMs’ Portfolio Positionings on Real Vision—Royce
article 02-22-2022

Francis Gannon Talks Royce PMs’ Portfolio Positionings on Real Vision

Co-CIO Francis Gannon was a guest on Real Vision discussing three companies, inflation, earnings, and more.


Co-CIO Francis Gannon recently joined Real Vision to discuss with Maggie Lake if small caps can best weather inflation, the asset class’s recent performance, three stocks favored by the firm’s PMs, and more.

Watch the video here.

Francis Gannon detailed how small-caps, as measured by the CRSP 6-10 Index, are the only major asset class that’s beaten inflation in every decade since the 1930s. He also explained that, while the Russell 2000 posted its third consecutive year of double-digit positive returns in 2021, the small-cap index has never had a fourth consecutive year of positive double-digit returns. Additionally, he discussed why he thinks the Fed pivot toward raising rates and constraining liquidity are ultimately healthy signs, as was first-quarter earnings strength for many small-cap companies.

“So, the objective as an active manager in this space is to take advantage of that dislocation and think about the next three to five years and where the market and economy should be over that timeframe, and hopefully invest in good businesses that can withstand any type of economic slowdown, be it short term in nature, or a full-blown recession,” he said.

Watch the video here.

Learn more about Francis Gannon.

Important Disclosure Information

Average Annual Total Returns as of 12/31/21 (%) 

Micro-Cap 7.20 31.02 25.49 13.67 9.48 7.06 9.19 11.48 12/31/91
International Premier -1.37 6.06 18.27 15.20 12.17 N/A N/A 9.17 12/31/10
Russell Microcap -2.66 19.34 20.90 11.69 13.62 7.51 9.04 N/A N/A
Russell 2000 2.14 14.82 20.02 12.02 13.23 8.69 9.36 9.15 N/A
MSCI ACWI x USA SC 0.62 12.93 16.46 11.21 9.46 6.56 N/A N/A N/A

Annual Operating Expenses: Micro-Cap Fund: Gross 1.29; Net 1.24. International Premier Fund: Gross: 1.26; Net 1.19

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 for Royce Micro-Cap Fund and 2% redemption fee for Royce International Premier Fund, 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 Gross operating expenses reflect the Fund's total gross annual operating expenses for the Investment Class and include management fees and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund's most current prospectus. Royce & Associates has contractually agreed, without right of termination, to waive fees and/or reimburse expenses to the extent necessary to maintain the Investment Class's net annual operating expenses (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business) at or below 1.24% for Royce Micro-Cap Fund and 1.19% for Royce International Premier Fund through April 30, 2022. For Royce International Premier Fund all performance and risk information presented in this material prior to the commencement date of Investment Class shares on 1/22/14 reflects Service Class results. Service Class shares bear an annual distribution expense that is not borne by Investment Class shares.

The thoughts and opinions expressed in the video are solely those of the persons speaking as of February 7, 2022 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.

Percentage of Fund Holdings As of 12/31/2021 (%)

  BOK Financial Element Solutions TMX Group

Capital Micro-Cap

0.0 0.0 0.0

Capital Small-Cap

0.0 0.0 0.0

Dividend Value

2.1 0.0 0.0

Global Financial Services

2.9 0.0 0.0

International Premier

0.0 0.0 0.0


0.0 0.0 0.0


0.0 0.0 0.0

Pennsylvania Mutual

0.2 1.2 0.3


0.0 0.0 1.1

Small-Cap Value

0.0 0.0 0.0

Smaller-Companies Growth

0.0 0.0 0.0

Special Equity

0.0 0.0 0.0

Total Return

1.3 2.1 0.9

Global Value Trust

0.8 1.1 0.0

Micro-Cap Trust

0.0 0.0 0.0

Value Trust

0.0 1.1 0.3

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.

The (Center for Research in Security Prices) CRSP (Center for Research in Security Pricing) equally divides the companies listed on the NYSE into 10 deciles based on market capitalization. Deciles 1-5 represent the largest domestic equity companies and Deciles 6-10 represent the smallest. CRSP then sorts all listed domestic equity companies based on these market cap ranges. By way of comparison, the CRSP 1-5 would have similar capitalization parameters to the S&P 500 and the CRSP 6-10 would have similar capitalization parameters to those of the Russell 2000.

The S&P 500 is an index of U.S. large-cap stocks selected by Standard & Poor’s based on market size, liquidity, and industry grouping, among other factors, and includes reinvested dividends.

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 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. Investments in securities of micro-cap, small-cap, and/or mid-cap companies may involve considerably more risk than investments in securities of larger-cap companies. (Please see “Primary Risks for Fund Investors” in the prospectus.) Certain Funds invest a significant portion of their respective assets in foreign companies that may be subject to different risks than investments in securities of U.S. companies, including adverse political, social, economic, or other developments that are unique to a particular country or region. (Please see “Investing in Foreign Securities” in the prospectus.) Therefore, the prices of securities of foreign companies in particular countries or regions may, at times, move in a different direction than those of securities of U.S. companies. (Please see “Primary Risk of Fund Investors” in the prospectus.) Certain Funds generally invest a significant portion of their assets in a limited number of stocks, which may involve considerably more risk than a more broadly diversified portfolio because a decline in the value of any of these stocks would cause their overall value to decline to a greater degree. A broadly diversified portfolio, however, does not ensure a profit or guarantee against loss.



Sign Up