5 Questions with Buzz Zaino—Royce
article 04-27-2021

Five Questions with Buzz Zaino

Boniface “Buzz” Zaino recently resumed leading the portfolio management responsibilities for Royce Opportunity Fund and our other offerings that are managed with the same disciplined approach he developed.


We are very pleased that Buzz Zaino will once more lead the portfolio management team of Royce Opportunity Fund and our other portfolios that are run with the unique opportunistic value strategy that Buzz first developed. Three other experienced Royce portfolio managers are joining him on the new investment team: James P. Stoeffel and Brendan J. Hartman, who also manage Royce Micro-Cap Fund, and James Harvey, who spent a decade as an analyst with Buzz working on the Opportunity strategy.

How do you feel to be back leading the portfolio management team for the Opportunistic Value Strategy?

My years of experience in this business have taught me that life can take unexpected twists and turns, but I’m very happy to be back. I want to let our investors know—and I would add that I’m a significant investor in this strategy myself—that I’m also deeply committed to keeping the portfolio in good shape. Of course, I’ve been closely involved with the portfolio since I joined Royce in 1998—including the period when I served as Senior Advisor, which ran from October 2018 until April of this year.

Will there be changes to the approach?

The process will remain the same. It’s always been very important to me to maintain the consistency and integrity of the strategy, so the team will be using the same process that’s been in place for decades. We’ll be focusing on companies with low price-to-sales and price-to-book ratios where we’ve identified catalysts for growth. I think one advantage of the strategy is that it’s very straightforward. However, it also requires a considerable amount of research and a lot of discipline. Our goal is to use the process to continue delivering a good long-term performance experience for our investors and clients.

“It’s always been very important to me to maintain the consistency and integrity of the strategy, so the team will be using the same process that’s been in place for decades.” — Buzz Zaino

How do you feel about working with Jim Stoeffel, Brendan, and Jim Harvey?

I feel very positive about it. It’s been an easy transition because we’ve all known each other for a long time. All three of them have worked right down the hall from me for the last five years. We’ve been in countless company meetings together. And, of course, Jim Harvey worked with me as an analyst for 10 years.

Our deep bench of investment professionals here at Royce is a very important attribute. So while the approach Jim and Brendan use in Royce Micro-Cap Fund differs from what we’re doing in Opportunity Fund, we all share ample experience analyzing micro-cap stocks from a value perspective. And many micro-caps receive little or no analyst coverage, so they’re also highly experienced doing the sort of in-depth research into companies and industries that this strategy entails. So we know each other as people and as investors, and I’m excited to be working more closely with them.

How do you see the opportunities in today’s market where valuations are high but the economy is recovering?

I think this is both a wonderful and challenging time to be an investor. All of the change and uncertainty that we’ve seen over the last year or so have created considerable shifts at the sector, industry, and company levels. I can understand why some people don’t like this kind of climate—uncertain and/or volatile periods are often difficult for some investors to stomach, but in my experience that’s when I’ve found some of the most rewarding long-term investment opportunities.

What’s your overall outlook for the Strategy?

We’re confident. This is a strategy that has historically done well during periods of economic expansion. Both Fed Chair Powell and Treasury Secretary Yellen have made it very clear that they will keep liquidity high by keeping interest rates low in order to for the economic recovery to keep going strong. So in some ways, the stage is set for the kind of small- and micro-cap companies we like to perform well. Valuations are obviously higher than value investors like us would like to see, however, so a certain degree of economic recovery has been priced into many stocks. It’s our job to select those companies that we see as most likely to continue benefiting from the rebounding economy.




Important Disclosure Information

Average Annual Total Returns as of 3/31/21 (%) 

Opportunity Fund 25.06 151.72 18.53 20.28 12.24 9.64 11.75 13.16 11/19/96
Russell 2000 Value 21.17 97.05 11.57 13.56 10.06 7.38 9.53 9.82 N/A
Russell 2000 12.70 94.85 14.76 16.35 11.68 8.83 9.76 9.36 N/A

Annual Operating Expenses: 1.22

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 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.

Mr. Zaino’s thoughts and opinions concerning the stock market are solely their own and, of course, there can be no assurance with regard to future market movements. No assurance can be given that the past performance trends as outlined above will continue in the future.

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.

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. Smaller-cap stocks may involve considerably more risk than larger-cap stocks. (Please see "Primary Risks for Fund Investors" in the prospectus.)



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