The Royce Funds

The Royce Funds is a family of mutual funds that focuses primarily on small-cap investing, and has been considered one of the industry's most experienced smaller-company stock pickers.[1] Royce & Associates, LLC serves as investment adviser to all Royce portfolios, including open-end mutual funds and closed-end funds.

As of December 31, 2014, Royce had approximately $32 billion in total assets under management.

Royce uses a bottom-up approach to invest in small-cap and micro-cap stocks. Royce's disciplined, value-oriented approach attempts to pay close attention to risk and company fundamentals.

History

Charles M. Royce assumed investment management of Pennsylvania Mutual Fund when he purchased Quest Advisory Corp. in 1972. (The firm's name was changed to Royce & Associates in 1997.) Mr. Royce, who has been described as a "small-company stock pioneer" by American business journalist Consuelo Mack,[2] enjoys one of the longest tenures of any active mutual fund manager.

After assuming management of Pennsylvania Mutual Fund, Mr. Royce began to shift his focus toward small-cap stocks that he believed were able to generate free cash flow and better survive down-market periods. This emphasis on downside protection would become one of the hallmarks of the firm’s investment approach.[3]

During the 1990s, Royce broadened its portfolio line-up and expanded its investment staff. On October 1, 2001, Royce became a wholly owned, independent subsidiary of Legg Mason, Inc.[4] In the 2000s, the company began to introduce global and international small-cap mutual fund portfolios.

Present

Today, the firm’s staff includes more than 30 investment professionals. Effective July 1, 2014, Co-Chief Investment Officer Christopher D. Clark assumed the role of President of Royce, a position held by Mr. Royce since he purchased the firm in 1972. Mr. Royce is Chairman and Chief Executive Officer.

Investment Approach

The Royce Funds invest in primarily micro-cap and small-cap companies using disciplined, value-oriented approaches. Royce portfolio managers look primarily at balance sheet strength, cash flow characteristics, and returns on invested capital when choosing stocks for the funds they manage.[5] Royce emphasizes long-term, absolute (as opposed to relative) performance.

See also

References

  1. ↑ "Can Legg Mason Bounce Back?". Barron's.
  2. ↑ "Charles Royce". Consuelo Mack WealthTrack.
  3. ↑ "Royce's Goal: Safety First". Financial Advisor.
  4. ↑ "Legg Mason to Buy Royce & Associates". Los Angeles Times.
  5. ↑ "Willing to Wait". Barron's.

External links

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