http://www.sec.gov/Archives/edgar/data/709364/000094937715000317/e36935_roh-isi.htm497 1 e36935_roh-isi.htm
The Royce Fund
Supplement to the Investment, Service, and Institutional Class Shares
Prospectus Dated May 1, 2015
Royce 100 Fund
(to be renamed Royce Small-Cap Leaders Fund effective September 15, 2015)
The Board of Trustees of The Royce Fund has approved the following name and related investment policy changes for Royce 100 Fund, to become effective as of September 15, 2015.
Royce 100 Fund
Royce 100 Fund will be renamed Royce Small-Cap Leaders Fund.
Principal Investment Strategy
The first and second paragraphs in this section are deleted in their entirety and replaced with the following:
Royce & Associates, LLC (“Royce”), the Fund’s investment adviser, invests the Fund’s assets primarily in a limited number (generally up to 100) of equity securities of small-cap companies with stock market capitalizations up to $3 billion. Royce selects securities of “leading” companies—those that in its view are trading at attractive valuations that also have excellent business strengths, strong balance sheets, and/or improved prospects for growth, as well as those with the potential for improvement in cash flow levels and internal rates of return.
Normally, the Fund invests at least 80% of its net assets in equity securities of companies with stock market capitalizations up to $3 billion at the time of investment. Although the Fund normally focuses on securities of U.S. companies, it may invest up to 25% of its net assets (measured at the time of investment) in securities of companies headquartered in foreign countries. The Fund may invest in other investment companies that invest in equity securities. The Fund may sell securities to, among other things, secure gains, limit losses, redeploy assets into what Royce deems to be more promising opportunities, and/or manage cash levels in the Fund’s portfolio.
Primary Risks for Fund Investors
The first sentence of the second paragraph in this section is deleted in its entirety and replaced with the following:
The prices of equity securities of companies with market capitalizations up to $3 billion are generally more volatile and their markets are less liquid relative to larger-cap securities.
The operations of the Fund will not change except as specifically described above.
September 11, 2015
Comments
Fully three Royce funds are now changing their names. Some make sense because the old names never made sense (Royce Value Plus, for example...where was the "plus" under Chip Skinner's stewardship ? Perhaps the plus was in the 6 or so share classes/ticker symbols for the fund).
A handful of funds have new managers/co-managers.
Royce selectively includes or excludes performance criteria on its funds to put funds in the best light (for example, some funds have upside/downside capture ratios for past 1 years reported, others do not, but have past 5- and 10-year, one newer fund doesn't have even a 1 year even though its been around since 2011, Royce Micro-Cap Disovery, ever the laggard which has been around since at least 2004 has no upside/downside reported; same for Royce Value Plus, I mean, Royce Smaller Companies Growth). Some funds have trailing 1-, 3-, 5-, 10-year performance reported, others only have 5- and 10-year. Typos ? Perhaps, but Royce has done this type of thing before, most notably during the depths of the great recession.
Share classes galore ! Six for Royce Opportunity, Royce Smaller/Small-ish Companies Growth Fund (formerly Royce Value Plus), Royce Small Cap Value (formerly Royce Value) and Royce Pennsylvania, seven for Royce Total Return and Royce Premier, three for Royce Micro Cap. You'll be relieved, no doubt, to learn that Royce Micro-Discovery (which was once Discovery) which rarely beat the benchmark and seemed to have very low active-management value-add under Mr. Necakov, has retained its one share class (but has a new co-manager).
And...my personal favorite for some time now...Royce allows several funds to have 10% or more of their holdings in international stocks (and handful are at or above 15-20%), but still benchmarks against all-US indexes.
Same old shenanigans at Royce. If you can't find `em, grind `em. Feed the beast.