Charlie Dreifus Talks Winning by Losing Less on WealthTrack—Royce
article 02-08-2021

Charlie Dreifus Talks Winning by Losing Less on WealthTrack

PM Charlie Dreifus was a guest on Consuelo Mack WealthTrack discussing how he positions his portfolio to beat bear markets.

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PM Charlie Dreifus was recently a guest on Consuelo Mack WealthTrack discussing how purchasing absolute value companies helps Royce Special Equity Fund in bear markets.

Watch Charlie’s appearance here.

Charlie explained that he looks at the cap rate, or the return he would earn if he bought a whole business, and compares it against the junk bond yield when looking for absolute value companies. “I’m looking for the convergence of economic logic, accounting logic, and capitalistic logic,” he said. “So it’s as simple as saying, ‘would I buy the entire business? Would I have a positive return?’” Charlie said that this process, along with purchasing investments with less volatility, helps his portfolio lose less on the downside.

He also explained how his portfolio is concentrated with 36 names, meaning he has “high convictions” in the names he buys.

Watch Charlie’s appearance here.

Learn more about Charlie Dreifus here.

Important Disclosure Information

Average Annual Total Returns as of 12/31/20 (%) 

  4Q201 1YR 3YR 5YR 10YR 15YR 20YR SINCE INCEPT. DATE
Special Equity 16.43 7.43 2.93 9.24 7.49 7.68 9.88 8.57 05/01/98
Russell 2000 Value 33.36 4.63 3.72 9.65 8.66 6.92 8.54 7.65 N/A
Russell 2000 31.37 19.96 10.25 13.26 11.20 8.91 8.74 7.82 N/A

Annual Operating Expenses: 1.21

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.

The thoughts and opinions expressed in the video are solely those of the persons speaking as of February 4, 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.

Percentage of Fund Holdings As of 12/31/2020 (%)

  Royce Special
Equity Fund

Sears Roebuck

0.0

Eastman Kodak

0.0

JCPenney

0.0

Polaroid

0.0

Burroughs Corporation

0.0

Johnson & Johnson

0.0

Triple M

0.0

GameStop

0.0

Standard Motor Products, Inc.

3.5

iShares Core Dividend Growth ETF

0.0

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.

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 12/31/20, 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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