RYSEX On Morningstar.com—Royce
article 03-16-2020

Morningstar Highlights Royce’s Special Equity Strategy

“Stock Funds With the Best and Worst Down Capture During the Sell-Off,” on Morningstar.com, listed our Special Equity Strategy as one that has done relatively well in the market’s recent sell-off.


On March 11, 2020, David Carey published a piece on Morningstar.com, “Stock Funds With the Best and Worst Down Capture During the Sell-Off,” that mentioned Royce Special Equity Fund. The article aimed to help investors find funds that have done a better or worse job protecting investors in the recent sell-off.

The criteria used to determine this was Morningstar’s down-capture measure, which assesses how a fund's share-price decline compares with the fall in its respective Morningstar Category benchmark. Carey used the Morningstar 500, selected from the company’s coverage universe. Each fund was then compared against its respective Morningstar Category index. The article focused on the list’s U.S. and international stock funds, tracking performance from February 19- March 9. U.S. diversified stock funds mainly registered down-market capture ratios between 90% and 110% during this time frame.

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When discussing Special Equity, Carey quoted Tony Thomas, PhD, a senior manager research analyst at Morningstar, who said that PM Charlie Dreifus, “tends to avoid heavily indebted companies. He’s long been concerned about leverage and the availability of cheap money. As we saw Monday with the leveraged oil companies, a stock can plummet when there’s doubt about a company’s ability to pay its bills.”

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Learn more about Charlie Dreifus here.

Important Disclosure Information

Average Annual Total Returns as of 12/31/19 (%) 

Special Equity 7.63 12.63 3.07 4.88 8.65 7.09 10.32 8.62 05/01/98
Russell 2000 9.94 25.52 8.59 8.23 11.83 7.92 7.59 9.57 N/A
Russell 2000 Value 8.49 22.39 4.77 6.99 10.56 6.92 9.41 7.80 N/A

Annual Operating Expenses: 1.18

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.

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.) As of 12/31/19, the Fund invested a significant portion of its assets in a limited number of stocks, which may involve considerably more risk than more broadly diversified portfolio because a decline in the value of any one of these stocks would cause the Fund's overall value to decline to a greater degree. (Please see "Primary Risks for Fund Investors" in the prospectus.)



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