Royce Small-Cap Total Return Fund Share Classes Upgraded to Bronze in Morningstar’s Analyst Ratings
article 09-19-2022

Royce Small-Cap Total Return Fund Share Classes Upgraded to Bronze in Morningstar’s Analyst Ratings

Morningstar upgraded the Investment, Institutional, Service, and R Class shares of Royce Small-Cap Total Return Fund from Neutral to Bronze.

TELL US
WHAT YOU
THINK

On 9/13/22, Morningstar upgraded the Investment, Institutional, Service, and R Class shares of Royce Small-Cap Total Return Fund from Neutral to Bronze. Dan Culloton, the director of equity strategies for Morningstar, wrote that Lead Portfolio Manager Miles Lewis “has reinvigorated its old process, helping it earn a Morningstar Analyst Rating upgrade to Bronze from Neutral for all but one share class.” Culloton added that “Lewis and his team had put most of the fund’s holdings through his more exacting review. The portfolio owns fewer stocks—85 as of mid-2022 compared with almost 200 in 2020—and they are more profitable in terms of returns on assets and invested capital, on average, than the mean Russell 2000 Value Index stock,” while also noting that “Lewis has imposed more discipline and refocused the strategy on its best ideas while retaining the strategy’s moderate risk profile.”

He also wrote that “Yield isn't this strategy's primary objective, though. It uses dividends to find enduring, cash-rich businesses run by executives who are skilled capital allocators, and it tries to buy their shares when they look cheap or unappreciated” and that “Lewis’s temperament is suited for this strategy. Like Royce, he prefers to blend quality with valuation when picking stocks.”

https://www.morningstar.com/funds/xnas/rytrx/quote

About Morningstar’s Analyst Ratings

Morningstar’s Analyst Rating for funds is a forward-looking, qualitative rating that is designed to help investors find funds most likely to outperform their peers over a full market cycle. A fund that is most likely to outperform its peers receives a Morningstar Analyst Rating of Gold, followed by Silver, Bronze, Neutral, and Negative. Morningstar fund analysts assign Neutral or Negative ratings if they have little conviction in the fund’s ability to outperform.

The Morningstar Analyst Rating is based on three pillars: Process, People, and Parent. Funds receive scores of High, Above Average, Average, Below Average, or Low depending on their performance for each pillar.

“Process” refers to how managers execute their investment strategy. It also examines their investment research, decision making, and loyalty to their strategy—especially when it’s out of favor. “People” refers to the individuals who manage the fund. Managers with long tenures, qualified analysts, relevant investment experience, and diligent succession planning receive a high rating. “Parent” refers to the asset manager that offers the fund. Asset managers with a winning investment culture, detailed preparation, and fundholder-friendly processes earn a high rating.

Important Disclosure Information

Royce Small-Cap Total Return Fund Average Annual Total Returns as of 6/30/22 (%)

  QTD1 YTD1 1YR 3YR 5YR 10YR 15YR SINCE
INCEPT.
DATE
Investment -11.41 -13.63 -9.32 6.49 6.15 9.11 6.21 9.99 12/15/93
Institutional -11.39 -13.55 -9.26 6.58 6.27 9.23 6.33 10.07 12/15/93
Service -11.43 -13.78 -9.60 6.19 5.86 8.80 5.95 9.81 12/15/93
R -11.62 -14.02 -10.03 5.76 5.47 8.41 5.54 9.61 12/15/93
Russell 2000 Value
-15.28 -17.31 -16.28 6.18 4.89 9.05 5.58 9.28 N/A
Russell 2000
-17.20 -23.43 -25.20 4.21 5.17 9.35 6.33 8.41 N/A

Annual Operating Expenses: 1.25 (RYTRX), 1.15 (RTRIX), Gross 1.60 Net 1.54 (RYTFX), 1.90 (RTRRX)


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. (Institutional and R Class shares are not subject to the redemption fee.) 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 (RYTRX), Institutional (RTRIX), and R (RTRRX) Class and include management fees, other expenses, and acquired fund fees and expenses for the Investment or Institutional Class and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses for the R Class. Gross operating expenses for the Service (RYTFX) Class reflect the Fund’s gross total annual operating expenses and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and 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 has contractually agreed, without right of termination, to waive fees and/or reimburse expenses to the extent necessary to maintain the Service 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 1.49% through April 30, 2023. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investment in mutual funds, hedge funds, private equity funds, and other investment companies.


All performance and risk information presented in this material prior to the commencement date of Service Class shares on 1/3/02, Institutional Class shares on 3/4/03, and R Class shares on 5/21/07 reflects Investment Class results. Service Class shares bear an annual distribution expense that is not borne by Investment or Institutional Class shares. If Service Class's annual distribution expense had been reflected, total returns prior to 1/3/02 would have been lower. R Class shares bear annual expenses that are higher than those borne by Investment Class shares. If annual expenses for R Class had been reflected, total returns 5/21/07 would have been lower. The Investment and Institutional Classes would have substantially similar returns because all classes invest in the same portfolio of securities, differing only to the extent that the classes have different expenses.

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.

Share:

Subscribe:

Sign Up

Follow: