Royce Opportunity Fund (RYPNX, RYOFX, ROFCX, ROFIX, ROFRX)
2

At a Glance

Why invest in Opportunity?

  • Small-cap value fund that uses an opportunistic approach to invest in companies are categorized into themes: Turnarounds, Unrecognized Asset Values, Undervalued Growth, and Interrupted Earnings. Small-cap stocks' market caps are less than the largest stock in the Russell 2000® Index.
  • Identifies a catalyst for future earnings growth in the form of new management, more favorable business cycle, product innovation, and/or margin improvement
  • Outperformed its benchmark, the Russell 2000 Value Index, for the 1-, 3-, 5-, 10-, 15-, 20-year, and since inception (11/19/96) periods ended 9/30/20

Morningstar Overall Rating TM

Based on risk-adjusted returns out of 385 Small Value Funds as of 9/30/20

As of 09/30/20

  • Small-Cap
    Value Approach
    $842.5M
    Avg. Market Cap
  • High
    Volatility
    89%
    Active Share
  • Lead Manager
    Tenure
    16+
    Years on Fund

Portfolio Management

"We look for very cheap companies, and then ask ourselves what looks likely to change—is there new management? A shift in the sector or the broader economy? In other words, we need to see an event or events that can turn a cheap value stock into one that gives us better returns."
Bill Hench

Performance

Average Annual Total Returns (%)

Outperformed Russell 2000 Value for the Quarter, Year To Date, 1-Year, 3-Year, 5-Year, 10-Year, 15-Year, 20-Year and since inception (11/19/96) periods as of 09/30/20. Outpaced Russell 2000 for the Quarter, 5-Year, 20-Year and since inception (11/19/96) periods as of 09/30/20.
QTR YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Opportunity 11.11 -8.950.10-1.118.488.796.918.6010.86 11/19/96
Russell 2000 Value 2.56 -21.54-14.88-5.134.117.094.937.407.85 N/A
Russell 2000 4.93 -8.690.391.778.009.857.036.887.78 N/A

Annual Operating Expenses: 1.22

SEP YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Opportunity -2.23 -8.950.10-1.118.488.796.918.6010.86 11/19/96
Russell 2000 Value -4.65 -21.54-14.88-5.134.117.094.937.407.85 N/A
Russell 2000 -3.34 -8.690.391.778.009.857.036.887.78 N/A

Annual Operating Expenses: 1.22

OCT YTD 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Opportunity 2.28 -6.87-0.71-0.737.418.707.439.1310.92 11/19/96
Russell 2000 Value 2.84 -19.31-15.25-4.523.257.025.427.767.95 N/A
Russell 2000 2.40 -6.49-0.432.177.039.717.557.457.86 N/A

Annual Operating Expenses: 1.22

Important Performance and Expense Information

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 www.royceinvest.com. 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 and other expenses.

Rolling Returns

On a monthly basis, the Fund outperformed the Russell 2000 Value in 99% of all 10-Year periods; 73% of all 5-Year periods; and 52% of all 1-Year periods.

For 97% of the periods, 10-year average annual total returns were greater than 5%.

Relative Returns: Monthly Rolling Average Annual Return Periods 20 Years Through 09/30/20

periods beating
the index(%)
fund
avg(%)
index
avg(%)
10-year
120/121
99 9.5 8.0
5-year
132/181
73 9.6 8.4
1-year
118/229
52 11.8 9.3

Absolute Returns: 10-Year Monthly Rolling Return PeriodsNumber of 10-Year Average Annual Return Periods Since the Fund’s Inception

Return Range Periods % in Range
> 10% 73 44
> 5% and ≤ 10% 89 53
> 0% and ≤ 5% 5 3
≤ 0% 0 0

The Fund averaged a 10.2% return over all 167 10-year monthly rolling return periods.

Market Cycle Performance

The Fund outperformed the Russell 2000 Value from the 8/22/18 index peak through current (9/30/20) and in each of the two previous full market cycle periods.
Peak-Peak - 06/04/07 - 06/23/15
Opportunity62.3%
Russell 2000 Value45.9%

Peak-Peak - 06/23/15 - 08/22/18
Opportunity41.8%
Russell 2000 Value39.0%

Peak-Current - 08/22/18 - 09/30/20
Opportunity-13.7%
Russell 2000 Value-24.0%

Royce defines market cycles as those that have retreated at least 15% from a previous market peak and have rebounded to establish a new peak above the previous one. 

Royce defines market cycles as those that have retreated at least 15% from a previous market peak and have rebounded to establish a new peak above the previous one. 

Calendar Year Total Returns (%)

 

Growth of Investment

Value of $10,000 invested between 11/19/96 and 09/30/20

Opportunity$116,964.30
Russell 2000 Value$60,671.29

Risk

High Volatility vs. Peer Group as of 09/30/20

The Fund has a high volatility within its peer group of 492 Small-Cap Funds based on 5-year rolling standard deviation.

Up Market Performance Comparisonas of 09/30/20

The Fund outperformed the Russell 2000 Value during all five trough-to-peak periods since the Fund’s inception (11/19/96).
UpMarketImg

Capture Ratios Fund's First Full Quarter (12/31/96) to 09/30/20

Upside Capture Ratio measures a manager's performance in up markets relative to the Fund's benchmark. It is calculated by measuring the Fund's performance in quarters when the benchmark goes up and dividing it by the benchmark's return in those quarters.

Downside Capture Ratio measures a manager's performance in down markets relative to the Fund's benchmark. It is calculated by measuring the Fund's performance in quarters when the benchmark goes down and dividing it by the benchmark's return in those quarters.

Long Term Risk Measurementas of 09/30/20

Over the past 10 years, the Fund outperformed the Russell 2000 Value Index.
Over the past 5 years, the Fund outperformed the Russell 2000 Value Index.
Over the past 3 years, the Fund outperformed the Russell 2000 Value Index.
From the Fund's inception, the Fund outperformed the Russell 2000 Value Index.

Go to Relative Risk Spectrum Tool

Morningstar Statistical Measures as of 09/30/20

Sharpe RatioStandard Deviation
Opportunity0.4721.53
Category Median0.5518.18
Best Quartile Breakpoint0.6817.47

Category Median and Best Quartile Breakpoint based on 398 small-cap objective funds (oldest class only) with at least ten years of history.
Sharpe Ratio Standard Deviation
Opportunity
Russell 2000 Value
Category Median
Best Quartile Breakpoint

Composition

Morningstar Style Map™as of 06/30/20

mstar-RYPNX

The Morningstar Style Map is the Morningstar Style Box™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone™. The Morningstar Style Box is designed to reveal a fund's investment strategy. The Morningstar Ownership Zone provides detail about a portfolio's investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. The shaded area represents the center 75% of the Fund's assets while the plot point in the middle represents the weighted average of its holdings. Over time, the shape and location of a fund's ownership zone may vary.

Portfolio Diagnosticsas of 09/30/20

  RYPNX Russell 2000 Value
Average Market Cap
842.5M
1.37B
89%
-
2019 Portfolio Turnover
47%
-
Weighted Average P/B,
1.6x
1.2x
Weighted Average P/S
0.8x
1.0x
U.S. Investments (% of Net Assets)
89.6%
-
Non-U.S. Investments (% of Net Assets)
2.7%
-

Portfolio Allocation

  • Total
    Holdings
    251

Top 200 holdings represented 95% of the Fund's equity investments as of 09/30/20.

SECTORS
RYPNX (%) RUSSELL
2000 VALUE (%)
Industrials
21.4
16.8
Information Technology
19.0
6.0
Consumer Discretionary
14.4
13.3
Health Care
13.7
6.9
Materials
8.0
5.6
Financials
7.5
26.6
Energy
2.7
3.9
Real Estate
2.3
9.9
Consumer Staples
1.8
3.7
Communication Services
1.4
2.4
Utilities
0.1
5.0
Cash and Cash Equivalents
7.7
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Owens & Minor
1.3
Alpha & Omega Semiconductor
1.0
R1 RCM
1.0
Surgery Partners
0.9
Air Lease Cl. A
0.9
Herc Holdings
0.9
Stewart Information Services
0.8
Magnite
0.8
Ameresco Cl. A
0.8
Avaya Holdings
0.8
Avid Technology
0.8
B. Riley Financial
0.8
Carrols Restaurant Group
0.8
Walker & Dunlop
0.8
Atlas Air Worldwide Holdings
0.8
Arcosa
0.7
Lumber Liquidators Holdings
0.7
Beazer Homes USA
0.7
Community Health Systems
0.7
Forterra
0.7
Top 20 as % of Net Assets
16.7

SECTORS
RYPNX (%) RUSSELL
2000 VALUE (%)
Industrials
21.4
16.8
Information Technology
19.0
6.0
Consumer Discretionary
14.4
13.3
Health Care
13.7
6.9
Materials
8.0
5.6
Financials
7.5
26.6
Energy
2.7
3.9
Real Estate
2.3
9.9
Consumer Staples
1.8
3.7
Communication Services
1.4
2.4
Utilities
0.1
5.0
Cash and Cash Equivalents
7.7
-
POSITIONS% OF NET ASSETS
(SUBJECT TO CHANGE)
Owens & Minor
1.3
Alpha & Omega Semiconductor
1.0
R1 RCM
1.0
Surgery Partners
0.9
Air Lease Cl. A
0.9
Herc Holdings
0.9
Stewart Information Services
0.8
Magnite
0.8
Ameresco Cl. A
0.8
Avaya Holdings
0.8
Avid Technology
0.8
B. Riley Financial
0.8
Carrols Restaurant Group
0.8
Walker & Dunlop
0.8
Atlas Air Worldwide Holdings
0.8
Arcosa
0.7
Lumber Liquidators Holdings
0.7
Beazer Homes USA
0.7
Community Health Systems
0.7
Forterra
0.7
Top 20 as % of Net Assets
16.7

Portfolio Holdings

View the complete list of holdings for this fund as of 09/30/20. Unaudited schedule of portfolio holdings is presented for informational purposes only.

Least Portfolio Overlap - U.S. Equity Funds

Greatest Portfolio Overlap - U.S. Equity Funds

Geographical Breakdown

Distributions

NAV & Distributions


Start DateEnd Date
to

Learn more about distributions

Distributions

RECORD
DATE
EX-DATE PAYABLE
DATE
INCOME ($) SHORT
TERM
GAINS ($)
LONG
TERM
GAINS ($)
RETURN OF
CAPITAL ($)
TOTAL ($) REINVEST
PRICE ($)
12/11/19 12/12/19 12/12/19 0.0000 - 0.1964 - 0.1964 12.37
12/12/18 12/13/18 12/13/18 0.0000 0.2209 0.7919 - 1.0128 10.59
12/13/17 12/14/17 12/14/17 0.0000 0.1329 1.8917 - 2.0246 13.21
12/14/16 12/15/16 12/15/16 0.0000 - 0.8860 - 0.8860 12.99
12/16/15 12/17/15 12/17/15 0.0000 - 1.0617 - 1.0617 10.55
12/16/14 12/17/14 12/17/14 0.0000 0.1123 1.8262 - 1.9385 13.01
12/04/13 12/05/13 12/05/13 0.0000 0.0218 1.5136 - 1.5354 14.84
12/05/12 12/06/12 12/06/12 0.0000 0.1317 0.5382 - 0.6699 11.42
12/07/11 12/08/11 12/08/11 0.0000 - 0.1887 - 0.1887 9.96
12/08/09 12/09/09 12/09/09 0.0010 - - - 0.0010 8.56

NAV History for

Fees & Expenses

Shareholder Fees (%)

(fees paid directly from your investment)

Maximum sales charge (load) imposed on purchases 0.00
Maximum deferred sales charge 0.00
Maximum sales charge (load) imposed on reinvested dividends 0.00
Redemption fee (as a percentage of amount redeemed on shares held for less than 30 days) 1.00

Annual Fund Operating Expenses (%)

(expenses that you pay each year as a percentage of the value of your investment)

Management fees 1.00
Distribution (12b-1) fees 0.00
Other expenses 0.22
Total annual Fund operating expenses 1.22

Important Disclosure Information

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 and micro-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.

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.

The Price-Earnings, or P/E, Ratio is calculated by dividing a company's share price by its trailing 12-month earnings-per-share (EPS). The Portfolio's P/E ratio calculation excludes cash holdings and companies with zero or negative earnings. The Price-to-Book, or P/B, Ratio is calculated by dividing a company's share price by its book value per share. Standard deviation is a statistical measure within which a client account’s total returns have varied over time. The greater the standard deviation, the greater a portfolio’s volatility.
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.
Source: MSCI.  MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein.  The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products.  This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. The Russell 2000 Value and Growth indices consist of the respective value and growth stocks within the Russell 2000 as determined by Russell Investments. The Russell 2000 is an unmanaged, capitalization-weighted index of domestic small-cap stocks. It 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.

Managed by Bill Hench since 2013 (assistant portfolio manager 2004-2013), assistants Rob Kosowsky since 2018 and Suzanne Franks since 2018

11/19/1996 12:00:00 AM

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