UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04875
Name of Registrant: Royce Value Trust, Inc.
Address of
Registrant: 745 Fifth Avenue
New York, NY 10151
Name and address of agent for service: | John E. Denneen,
Esquire 745 Fifth Avenue New York, NY 10151 |
Registrants telephone number, including area code: (212) 508-4500
Date of fiscal
year end: December 31
Date of reporting period: January 1, 2014 December
31, 2014
Item 1. Reports to Shareholders. |
DECEMBER 31, 2014 | ||
2014 Annual | ||
Review and Report to Stockholders | ||
Royce Value Trust | |||
Royce Micro-Cap Trust | |||
Royce Global Value Trust | |||
roycefunds.com | |||
A Few Words on Closed-End Funds |
Royce &
Associates, LLC manages three closed-end funds: Royce Value Trust, which invests
primarily in small-cap securities; Royce Micro-Cap Trust, which invests primarily
in micro-cap securities; and Royce Global Value Trust, which invests in both U.S.
and non-U.S. small-cap stocks. A closed-end fund is an investment company whose
shares are listed and traded on a stock exchange. Like all investment companies,
including open-end mutual funds, the assets of a closed-end fund are professionally
managed in accordance with the investment objectives and policies approved by the
funds Board of Directors. A closed-end fund raises cash for investment by
issuing a fixed number of shares through initial and other public offerings that
may include shelf offerings and periodic rights offerings. Proceeds from the offerings
are invested in an actively managed portfolio of securities. Investors wanting to
buy or sell shares of a publicly traded closed-end fund after the offerings must
do so on a stock exchange, as with any publicly traded stock. Shares of closed-end
funds frequently trade at a discount to their net asset value. This is in contrast
to open-end mutual funds, which sell and redeem their shares at net asset value
on a continuous basis. |
This page is not part of the 2014 Annual Report to Stockholders |
Table of Contents | |||
Annual Review | |||
Letter to Our Stockholders | 2 | ||
Performance | 5 | ||
Annual Report to Stockholders | |||
Managers Discussions of Fund Performance | |||
Royce Value Trust |
6 | ||
Royce Micro-Cap Trust |
8 | ||
Royce Global Value Trust |
10 | ||
History Since Inception | 12 | ||
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Distribution Reinvestment and Cash Purchase Options | 14 | ||
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Schedules of Investments and Other Financial Statements | |||
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Royce Value Trust |
15 | ||
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Royce Micro-Cap Trust |
32 | ||
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Royce Global Value Trust |
47 | ||
Directors and Officers | 59 | ||
Notes to Performance and Other Important Information | 60 | ||
Results of Stockholders Meeting | Inside Back Cover |
This page is not part of the 2014 Annual Report to Stockholders | 1 |
Letter to Our Stockholders
A TALE OF TWO MARKETS
2 | This page is not part of the 2014 Annual Report to Stockholders |
LETTER TO OUR STOCKHOLDERS |
drawn more to defensive and/or high-growth areas. This included utilities and REITs among the highly successful defensive areas of 2014, and social media, biotech, and pharmaceuticals among the speedy growth industries. In most instances, companies in these sectors and industries do not satisfy our purchase criteria because they lack the combination of balance-sheet strength and a long-term history of profitability that we find most attractive. | volatility as an ally, agreeing with Warren Buffetts statement: Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it. So while many investors think of volatility as being synonymous (or nearly so) with risk or even loss, we have never seen it that way. Instead, we try to take advantage of market movementsan essential skill for any successful active manager. Those times when the market cannot seem to make up its mind are exactly when securities tend to be most mispriced. And therein lies one of the keys to outperformance for active managersthe identification and purchase of mispriced securities. | ||
Even with the economy accelerating, investors tended to ignore profitable companies with solid fundamentals while they continued to be drawn more to defensive and/or high-growth areas. | While many investors think of volatility as being synonymous (or nearly so) with risk or even loss, we have never seen it that way. | ||
We were hopeful that the end of QE (along with rising rates) would help to reverse this trend. But the strengthening U.S. dollar and monetary stimulus efforts in Japan and Europe conspired to make the October conclusion of QE something of a non-event, while interest rates fell through most of the year. On the whole, then, 2014 was an often confounding period for us, especially its second half. Indeed, if there is a theme that best captures the year, it might be A Tale of Two Markets.And we should point out that Dickenss rubric covers not just the very different halves of the year for small-cap stocks but also the disparity in results and volatility between small-caps and their bigger siblings. (More index returns can be found in the table below.) |
We conducted research that looked at some of the market forces that have helped to shape the current cycle, in particular the years from 2011-2014 when many active approaches struggled on a relative basis. (The full results of this research are available on our website at www.roycefunds.com/4qresearch.) As we have previously argued, the Feds easy-money policies of QE and ZIRP (zero-interest rates) have had the unintentional effect of stoking appetites for high yield and creating too few (if any) consequences for companies carrying a lot of debt. This led many investors to relatively neglect businesses with more pristine balance sheets and/or those with steady but smaller dividends. It also meant that from the beginning of 2011 through the end of 2014, the small-cap market was in a peculiar state, one characterized by a pile-up of anomaliesthe combination of declining volatility with higher-than-average returns converging with contracting credit spreads. |
||
VOLATILITYOUR MUTUAL FRIEND | |||
Yet the level of conviction in our value-oriented approaches remains high. Although it may seem counterintuitive (or worse), the current extended period of relative underperformance for many Royce-managed portfolios actually helps to fuel our confidence in the years to come. Let us explain why. First, we have always viewed |
Equity
Indexes As of December 31, 2014 (%) |
||
| The third quarter was the worst for the Russell 2000 since 9/30/11 and, relative to the S&P 500, was the indexs worst quarterly performance since 3/31/99. It also ended a streak of eight consecutive quarters of positive performance. | |
| Small-caps rallied in October and December to outpace their large-cap counterparts in the fourth quarter. | |
| 2014 marked just the fifth time since its inception in 1979 that the Russell 2000 had a gain in the single digits (+4.9%). Small-caps trailed large-caps by the widest margin since 1998. | |
| Within the Russell 2000, Health Care, Utilities, and REITs were the best-performing areas in 2014 while Energy was by far the largest detractor. |
3Q14 | 1 | 4Q14 | 1 | 1-YR | 3-YR | 5-YR | 10-YR | ||||||
Russell 2000 | -7.36 | 9.73 | 4.89 | 19.21 | 15.55 | 7.77 | |||||||
S&P 500 | 1.13 | 4.93 | 13.69 | 20.41 | 15.45 | 7.67 | |||||||
Russell 1000 | 0.65 | 4.88 | 13.24 | 20.62 | 15.64 | 7.96 | |||||||
Nasdaq Composite | 1.93 | 5.40 | 13.40 | 22.05 | 15.85 | 8.09 | |||||||
Russell Midcap | -1.66 | 5.94 | 13.22 | 21.40 | 17.19 | 9.56 | |||||||
Russell Microcap | -8.21 | 11.19 | 3.65 | 21.81 | 16.14 | 5.96 | |||||||
Russell Global ex-U.S. Small Cap | -6.21 | -4.45 | -3.63 | 10.31 | 6.40 | 6.65 | |||||||
Russell Global ex-U.S. Large Cap | -5.35 | -3.72 | -3.57 | 9.41 | 4.80 | 5.36 | |||||||
1Not annualized |
For details on The Royce Funds performance in the period, please turn to the Managers Discussions that begin on page 8. |
This page is not part of the 2014 Annual Report to Stockholders | 3 |
LETTER TO OUR STOCKHOLDERS |
Needless to
say, our risk-conscious, balance-sheet-centric approaches have been challenged in
this setting, at least on a relative basis. Low volatility has arguably created
the highest hurdle. We have always felt most comfortable in markets with higher
levels of volatility, which usually create the differentiation that lies at the
core of our active management styles. We analyze, assess, and evaluate multiple
aspects of a company before determining whether or not the current stock price reflects
the long-term prospects we see. Opportunities to purchase what we deem to be attractively
undervalued companies tend to proliferate when stock prices are volatile rather
than when markets are calm. Yet for most of the last four years, volatility has
been falling, at least until the second half of 2014. This has made it far more
difficult for our funds to outpace their respective benchmarks. GREAT EXPECTATIONS The questions are: How much longer is this going to last? More specifically, are interest rates going to remain at or near zero? Is the pace of economic growth likely to slacken? Are financial markets going to continue to behave atypically even as the economy continues to normalize? Will small-cap companies indefinitely gain an advantage by carrying more debt? Are three- and five-year average annual total returns for the Russell 2000 going to remain at levels higher than the indexs historical monthly rolling averages of 8.2% and 7.6%, respectively? For those who believe that most, or even some, of these things are likely to happen, then our approach would seem a bit at odds. We confess that we have been anticipating some of these shifts for nearly two years.
This has meant re-learning the hard lesson that change seldom occurs when we most
want it to. Yet we are convinced that markets remain cyclical (recent events notwithstanding).
In our view, reversion to the mean is as close to an iron law as the capital
markets allow. Most trends reverse, though they may linger for longer than initially
anticipated (or desired). Widening credit spreads, increasing volatility, and
decreasing stock correlation should all help active management and allow stock pickers
the chance to emerge as performance leaders.
|
We also expect
equity returns to remain attractive, though we see a decrease from the high levels
we have seen over the last three to five years. Cyclical companies appear due for
a round of revenue acceleration, particularly those in the Consumer Discretionary
and Industrials sectors, as do some industries in the Information Technology sector.
The best-managed companies within these areas could also see solid margin expansion.
Among other cyclical sectors, we also see a number of profitable, conservatively
capitalized businesses that have either been ignored or whose returns have lagged.
We expect this to change. On the valuation
front, the picture looked admittedly tricky at the end of 2014. For example, an
examination of trailing 12-month earnings for many companies suggests that small-cap
share prices may be on the high side. But if you believe, as we do, that the economy
is going to keep growing, that credit spreads will continue to expand, and that
a more robust CAPEX cycle is in the offing, then valuations seem pretty reasonable,
if not attractive in certain areas, Energy in particular. Many stocks look fairly
valued though not fully valued to us. So while we do not shrink from the sobering
truth of relative underperformance through much of this now-long bullish cycle,
we continue to see good times ahead for our risk-conscious, fundamentally based
approach. While we do not shrink from the sobering truth of relative underperformance through much of this now-long bullish cycle, we continue to see good times ahead for our risk-conscious, fundamentally based approach. The argument
that we have been making for more than four decades remains the same. Small-cap
is an inefficient area of the market in which we search for qualitative advantages
and valuation discrepancies. Our belief that fundamentally strong companies trading
at discounts to their private worth can outperform over the long term, often with
lower volatility, will not change. It is our core investment principle, and it has
served us very, very well over most of the last 40+ years.
|
Sincerely, |
Charles M. Royce | Christopher D. Clark | Francis D. Gannon | ||
Chairman and Chief Executive Officer, | President and Co-Chief Investment Officer, | Co-Chief Investment Officer, | ||
Royce & Associates, LLC | Royce & Associates, LLC | Royce & Associates, LLC | ||
January 26, 2015 |
4 | This page is not part of the 2014 Annual Report to Stockholders |
LETTER TO OUR STOCKHOLDERS | ||
Performance | ||
NAV Average Annual Total Returns | ||||||||||||||||||
As of December 31, 2014 (%) | ||||||||||||||||||
FUND | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | 25-YR | SINCE INCEPTION | INCEPTION DATE | |||||||||
Royce Value Trust | 0.78 | 15.98 | 12.82 | 6.94 | 9.29 | 10.84 | 10.84 | 10.74 | 11/26/86 | |||||||||
Royce Micro-Cap Trust | 3.55 | 20.64 | 15.81 | 8.15 | 10.97 | 11.85 | n.a. | 11.50 | 12/14/93 | |||||||||
Royce Global Value Trust | -6.23 | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | -3.03 | 10/17/13 | |||||||||
INDEX | ||||||||||||||||||
Russell 2000 | 4.89 | 19.21 | 15.55 | 7.77 | 7.38 | 9.63 | 9.75 | n.a. | n.a. | |||||||||
Russell Microcap | 3.65 | 21.81 | 16.14 | 5.96 | n.a. | n.a. | n.a. | n.a. | n.a. | |||||||||
Russell Global Small Cap | -0.28 | 13.57 | 9.56 | 6.87 | 6.88 | n.a. | n.a. | n.a. | n.a. | |||||||||
Important Performance and Risk Information All performance information in this Review and Report reflects past performance, is presented on a total return basis, and reflects the reinvestment of distributions. 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 sold. Current performance may be higher or lower than performance quoted. Current month-end performance may be obtained at www.roycefunds.com. The Funds are closed-end registered investment companies whose respective shares of common stock may trade at a discount to the net asset value. Shares of each Funds common stock are also subject to the market risk of investing in the underlying portfolio securities held by each Fund. Certain immaterial adjustments were made to the net assets of Royce Global Value Trust at 12/31/14 and Royce Micro-Cap Trust at 12/31/12, as well as 12/31/14, for financial reporting purposes, and as a result the net asset value originally calculated on that date and the total return based on that net asset value differs from the adjusted net asset value and total return reported in the Financial Highlights. All indexes referenced are unmanaged and capitalization-weighted. Each indexs returns include net reinvested dividends and/or interest income. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. 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 Microcap Index includes 1,000 of the smallest securities in the small-cap Russell 2000 Index, along with the next smallest eligible securities as determined by Russell. The Russell Global Small Cap Index is an unmanaged, capitalization-weighted index of global small-cap stocks. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index. Index returns include net reinvested dividends and/or interest income. Royce Value, Micro-Cap and Global Value Trust shares of common stock trade on the NYSE. Royce Fund Services, Inc (RFS) is a member of FINRA and has filed this Review and Report with FINRA on behalf of each Fund. RFS is not an underwriter or distributor of any of the Funds. |
This page is not part of the 2014 Annual Report to Stockholders | 5 |
MANAGERS DISCUSSION | ||
Royce Value Trust | ||
Chuck Royce |
FUND PERFORMANCE |
In what was a solid year for small-caps overall, we were disappointed that Royce Value Trust (RVT) was unable to keep pace on a relative scale. The Fund was up 0.8% on an NAV (net asset value) basis and 0.9% on a market price basis in 2014 versus respective gains of 4.9% and 5.7% for its small-cap benchmarks, the Russell 2000 and the S&P 600 Indexes, for the same period. Equally frustrating was the fact that RVT was more competitive for the six-month period ended June 30, 2014, in which it outperformed both the Russell 2000 and S&P 600s 3.2% advance on a market price basis (+3.9%) and narrowly lagged on a NAV basis (+3.0%). |
Unlike the first half of the year when equity returns were placid yet decidedly bullish, the last six months were a more volatile period for small-caps. Historically, the Fund has exhibited an ability to hold more value than its benchmarks during down markets. However, this was not the case in the third quarter of 2014, when RVT fell 7.5% on a NAV basis and 7.4% on a market price basis. (The Russell 2000 lost 7.4% and the S&P 600 lost 6.7%.) The Funds relative performance woes would continue into the fourth quarter, though its absolute results were respectable. During this period small-caps had a prominent upward bias, especially in the last few weeks of December when they rallied to finish the year well in the black. RVT gained 5.8% on an NAV basis and 4.9% on a market price basis while the Russell 2000 advanced 9.7% and the S&P 600 climbed 9.8%. Despite the Funds near- and intermediate-term struggles, we remain proud of RVTs longer-term performance. On an NAV and market price basis, RVT outperformed the Russell 2000 for the 15-, 20-, 25-year, and since inception (11/26/86) periods ended December 30, 2014. The Funds average annual NAV total return since inception was 10.7%. |
WHAT WORKED... AND WHAT DIDNT |
Six of the Funds 10 equity sectors posted net gains in 2014, with Information Technology leading the list by a solid margin. Health Care also made a sizable contribution to performance at the sector level, followed by a modest net gain for Financials. The top contributor to first-half performance, Idenix Pharmaceuticals focuses on the development of drugs for the treatment of infections caused by HIV, hepatitis B, and hepatitis C. In early June, news of pharmaceutical giant Mercks acquisition of the company helped the stock price to more than triple. By the middle of the month we had sold our stake. RVT also benefited from IT services company Sapient Corporations takeout by French advertising giant Publicis Groupe in early November. A long-time holding in the portfolio, Sapient provides integrated management consulting services, Internet commerce solutions, and systems implementation services. While the acquisition confirmed Sapients value and the increasing importance (and share gains) of digital marketing for more traditional advertising businesses, the companys valuation exceeded our sell targets and we sold our shares shortly after the announcement. Miami-based technology consulting firm The Hackett Group provides executive advisory programs, best practice research, and benchmarking services. Its stock price was generally flat for much of 2014 until the company announced third-quarter earnings that topped Wall Street expectations in early November. We took some gains in early December and decided to hold our position. |
Conversely,
net losses from Industrials, Energy, and Materials detracted from 2014 performance.
Three of RVTs top detractors came from the Industrials sector, including Houston-based
engineering and construction firm KBR. Further execution delivery issues on several
fixed-price projects, as well as a decline in bookings and cautious commentary regarding
possible delays in oil and gas work in light of the oil price decline, continued
to weigh on results. Later in the quarter, the companys relatively new CEO
unveiled a restructuring plan after strategic review of the business that includes
streamlining operations and reducing overhead costs, refocusing on core E&C
areas where it has had traditional strength, and exiting four non-core businesses.
Bullish on the companys prospects and an eventual turnaround in Energy, we
last added to our position in mid-December. It was a top-40 holding at year end.
Persistent weakness in the mining sector continued to stifle a sustained return
to organic sales growth for cutting tools manufacturer Kennametal. Having some exposure
to the oil and gas drilling market created some near-term headwinds for its business.
Interested to hear what initial strategic priorities the companys recently
appointed CEO may implement, we held on to our remaining shares after trimming a
bit in April, October, and November. |
Top Contributors to Performance For 2014 (%)1 | ||
Idenix Pharmaceuticals | 0.44 | |
Sapient Corporation | 0.31 | |
Hackett Group (The) | 0.29 | |
Nautilus | 0.29 | |
Mechanics Bank | 0.21 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
KBR | -0.31 | |
Kennametal | -0.24 | |
Steel Excel | -0.23 | |
Raven Industries | -0.22 | |
Qalaa Holdings | -0.19 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK |
We remain overweight in more economically sensitive areas such as Industrials and Information Technology. Despite recent headwinds in Energy, we believe the U.S. economy is still growing (albeit slowly), credit spreads will continue to expand, and that increasing volatility and decreasing stock correlation can help stock pickers to emerge as performance leaders. |
6 | 2014 Annual Report to Stockholders |
PERFORMANCE AND PORTFOLIO REVIEW | SYMBOLS MARKET PRICE RVT NAV XRVTX |
Performance | ||||||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | 25-YR | SINCE INCEPTION (11/26/86) | ||||||||||
RVT (NAV) | -2.15 | 0.78 | 15.98 | 12.82 | 6.94 | 9.29 | 10.84 | 10.84 | 10.74 | |||||||||
*Not Annualized |
1-YR | 5-YR | 10-YR | 15-YR | 20-YR | SINCE INCEPTION (11/26/86) | |||||||||
RVT | 0.9% | 92.4% | 60.0% | 305.4% | 679.2% | 1361.9% | ||||||||
Morningstar Style MapTM | As of 12/31/14 |
The Morningstar
Style Map is the Morningstar Style BoxTM with the center 75% of fund
holdings plotted as the Morningstar Ownership ZoneTM.
The Morningstar
Style Box is designed to reveal a funds investment strategy. The Morningstar
Ownership Zone provides detail about a portfolios investment style by showing
the range of stock sizes and styles. The Ownership Zone is derived by plotting each
stock in the portfolio within the proprietary Morningstar Style Box. Over time,
the shape and location of a funds ownership zone may vary. See page 60 for
additional information. |
Portfolio Diagnostics | ||
Fund Net Assets | $1,232 million | |
Number of Holdings | 567 | |
Turnover Rate | 40% | |
Net Asset Value | $16.24 | |
Market Price | $14.33 | |
Average Market Capitalization1 | $1,289 million | |
Weighted Average P/E Ratio2,3 | 19.7x | |
Weighted Average P/B Ratio2 | 1.8x | |
Holdings ≥ 75% of Total Investments | 182 | |
Active Share4 | 88% | |
U.S. Investments (% of Net Assets) | 84.9% | |
Non-U.S. Investments (% of Net Assets) | 18.0% | |
Calendar Year Total Returns (%) | ||
YEAR | RVT (NAV) | |
2014 | 0.8 | |
2013 | 34.1 | |
2012 | 15.4 | |
2011 | -10.1 | |
2010 | 30.3 | |
2009 | 44.6 | |
2008 | -45.6 | |
2007 | 5.0 | |
2006 | 19.5 | |
2005 | 8.4 | |
2004 | 21.4 | |
2003 | 40.8 | |
2002 | -15.6 | |
2001 | 15.2 | |
2000 | 16.6 | |
Top 10 Positions | ||
% of Net Assets | ||
HEICO Corporation | 1.5 | |
Ritchie Bros. Auctioneers | 1.0 | |
Hackett Group (The) | 0.9 | |
On Assignment | 0.9 | |
Newport Corporation | 0.9 | |
Forward Air | 0.9 | |
SEACOR Holdings | 0.8 | |
Nautilus | 0.8 | |
Tejon Ranch | 0.8 | |
Woodward | 0.8 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Industrials | 29.9 | |
Information Technology | 20.6 | |
Financials | 15.7 | |
Consumer Discretionary | 11.8 | |
Materials | 7.5 | |
Health Care | 5.9 | |
Energy | 3.6 | |
Consumer Staples | 2.2 | |
Telecommunication Services | 0.7 | |
Miscellaneous | 4.9 | |
Preferred Stock | 0.1 | |
Outstanding Line of Credit, Net of Cash and Cash Equivalents | -2.9 | |
Important Performance and Risk Information |
All performance information reflects past performance, is presented on a total return basis, and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month-end may be obtained at www.roycefunds.com. The market price of the Funds shares will fluctuate, so that shares may be worth more or less than their original cost when sold. The Fund invests primarily in securities of small- and micro-cap companies, which may involve considerably more risk than investing in larger-cap companies. The Funds broadly diversified portfolio does not ensure a profit or guarantee against loss. Regarding the Top Contributors and Top Detractors tables shown on page 6, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Funds performance for 2014. |
2014 Annual Report to Stockholders | 7 |
MANAGERS DISCUSSION | ||
Royce Micro-Cap Trust |
Chuck Royce |
FUND PERFORMANCE |
Royce Micro-Cap Trust (RMT) gained 3.5% on an NAV (net asset value) basis and 3.1% on a market price basis in 2014, trailing its benchmarks, the Russell 2000 Index and Russell Microcap Index, which had respective returns of 4.9% and 3.6% for the same period. We were frustrated that RMT gave up its first-half advantage, a period in which RMT advanced 3.1% on an NAV basis and 3.9% on a market price basis compared to the small-cap indexs 3.2% advance and the Russell Microcaps 1.6% advance. Following a small-cap high on July 3, small-caps entered a volatile phase that saw July and September in the red. RMT outperformed both benchmarks for the third quarter as a whole, losing 7.1% on an NAV basis and 4.8% on a market price basis against the Russell 2000s 7.4% decline and the Russell Microcaps 8.2% decrease. The Funds absolute performance in the fourth quarter was fine, though RMT was short of both indexes during this bullish swing. During the final quarter of the year, RMT was up 8.2% on an NAV basis and 4.2% on a market price basis, falling behind respective increases of 9.7% and 11.2% for the Russell 2000 and Russell Microcap. |
We were pleased with the Funds absolute and relative performance results over longer-term periods. On an NAV basis, RMT outperformed the Russell 2000 for the three-, five-, 10-, 15-, 20-year, and since inception (12/14/93) periods ended December 31, 2014. RMT also outperformed the Russell Microcap on an NAV basis during the 10-year period. (Data for the Russell Microcap only goes back to June 2000.) On a market price basis, the Fund bested the Russell 2000 for the three-, five-, 15-, 20-year, and since inception periods and beat the Russell Microcap for the five- and 10-year periods. RMTs average annual NAV total return for the since inception period was 11.5%, a long-term performance record that gives us great pride. |
WHAT WORKED... AND WHAT DIDNT |
Seven of the Funds 10 equity sectors made a positive impact on 2014 performance. Health Care was RMTs largest contributor by more than 160 basis points, followed by Consumer Discretionary and Information Technology. Energy and Industrials were the Funds largest detractors, with Materials posting modest net losses. A developer of drugs for the treatment of infections caused by HIV, hepatitis B, and hepatitis C, Idenix Pharmaceuticals was a take-out target by pharmaceutical giant Merck in early June. News of the acquisition helped triple the companys stock price, and we gradually sold our stake by the middle of the month. We also sold our shares of Medical Action Industries in June. A Virginia-based manufacturer and distributor of disposable medical products, including operating room supplies, custom procedure trays, sterilizing products, and patient apparel, Medical Action Industries was acquired by Owens & Minor for a 95% premium. Outside of Health Care, long-time holding and a top contributor to first-half performance Rentrak Corporation is a digital media measurement and research company that serves the entertainment, television, and advertising industries. Its share price began to really take off in early September. Investors seemed to like the healthy revenue growth and optimistic outlook the company reported in June. The company cemented a deal to expand its alliance with ABC while also establishing new agreements with CBS and Fox. In October, the firm announced its purchase of Kantar Media, the U.S. television measurement arm of advertising conglomerate WPP. In addition, Rentrak acquired new patents that solidified its position as a leading viewership data provider. We started reducing our position in October. |
Computer Task
Group is an IT services and staffing company. Its stock price began to decline steeply
in early July after reporting lower-than-expected earnings largely due to higher
costs and lower revenues from its healthcare business. While the company claimed
these higher expenses were likely anomalous, it also boosted its projected medical
costs for the rest of 2014, thus revising guidance downward. Heritage-Crystal Clean
provides parts cleaning, used oil re-refining, and hazardous and non-hazardous waste
services to small and mid-sized customers in the manufacturing and vehicle service
industries. Its shares took a hit in December when the firm announced that it was
issuing more stock to pay down debt incurred to make two recent acquisitions. We
added shares in the hope of a rebound. Earnings misses hindered the performance
of Sioux Falls-based Raven Industries. Softening demand for agricultural equipment
put pressure on its shares. |
Top Contributors to Performance For 2014 (%)1 | ||
Rentrak Corporation | 0.79 | |
Idenix Pharmaceuticals | 0.66 | |
Medical Action Industries | 0.56 | |
Universal Electronics | 0.49 | |
Integrated Electrical Services | 0.42 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
Computer Task Group | -0.36 | |
Heritage-Crystal Clean | -0.33 | |
Raven Industries | -0.31 | |
Le Chateau Cl. A | -0.28 | |
Cache | -0.26 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK |
We remain overweight in economically sensitive cyclical sectors such as Industrials, Information Technology, and Consumer Discretionaryareas where we have seen a number of profitable, conservatively capitalized businesses trading at attractive valuations. As the U.S. economy continues to grow and normalize, we believe fundamentals will matter more to investors, especially in an inefficient asset class such as micro-cap. |
8 | 2014 Annual Report to Stockholders |
PERFORMANCE AND PORTFOLIO REVIEW | SYMBOLS MARKET PRICE RMT NAV XOTCX |
Performance | ||||||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||||||
JUL-DEC 2014* | 1-YR | 3-YR | 5-YR | 10-YR | 15-YR | 20-YR | SINCE INCEPTION (12/14/93) | |||||||||||
RMT (NAV) | 0.47 | 3.55 | 20.64 | 15.81 | 8.15 | 10.97 | 11.85 | 11.50 | ||||||||||
*Not Annualized |
1-YR | 5-YR | 10-YR | 15-YR | 20-YR | SINCE INCEPTION (12/14/93) | |||||||||
RMT | 3.1% | 123.6% | 83.1% | 418.0% | 803.9% | 754.0% | ||||||||
Morningstar Style MapTM | As of 12/31/14 |
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a funds investment strategy. The Morningstar Ownership Zone provides detail about a portfolios investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a funds ownership zone may vary. See page 60 for additional information. |
Portfolio Diagnostics | ||
Fund Net Assets | $387 million | |
Number of Holdings | 387 | |
Turnover Rate | 41% | |
Net Asset Value | $11.34 | |
Market Price | $10.08 | |
Average Market Capitalization1 | $348 million | |
Weighted Average P/E Ratio2,3 | 19.6x | |
Weighted Average P/B Ratio2 | 1.6x | |
Holdings ≥ 75% of Total Investments | 160 | |
Active Share4 | 94% | |
U.S. Investments (% of Net Assets) | 98.2% | |
Non-U.S. Investments (% of Net Assets) | 11.5% | |
Calendar Year Total Returns (%) | ||
YEAR | RMT (NAV) | |
2014 | 3.5 | |
2013 | 44.5 | |
2012 | 17.3 | |
2011 | -7.7 | |
2010 | 28.5 | |
2009 | 46.5 | |
2008 | -45.5 | |
2007 | 0.6 | |
2006 | 22.5 | |
2005 | 6.8 | |
2004 | 18.7 | |
2003 | 55.5 | |
2002 | -13.8 | |
2001 | 23.4 | |
2000 | 10.9 | |
Top 10 Positions | ||
% of Net Assets | ||
Newport Corporation | 1.2 | |
Integrated Electrical Services | 1.1 | |
FRP Holdings | 1.1 | |
Atrion Corporation | 1.1 | |
Seneca Foods | 1.0 | |
Permian Basin Royalty Trust | 1.0 | |
Diamond Hill Investment Group | 1.0 | |
Universal Truckload Services | 1.0 | |
MVC Capital | 1.0 | |
Silvercrest Asset Management Group Cl. A | 0.9 | |
Portfolio sector Breakdown | ||
% of Net Assets | ||
Industrials | 23.1 | |
Information Technology | 23.0 | |
Consumer Discretionary | 18.9 | |
Financials | 18.0 | |
Health Care | 10.4 | |
Materials | 6.9 | |
Energy | 2.4 | |
Consumer Staples | 1.8 | |
Utilities | 0.0 | |
Miscellaneous | 4.9 | |
Preferred Stock | 0.3 | |
Outstanding Line of Credit, Net of Cash and Cash Equivalents | -9.7 | |
Important Performance and Risk Information |
All performance information reflects past performance, is presented on a total return basis, and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month-end may be obtained at www.roycefunds.com. Certain immaterial adjustments were made to the net assets of Royce Micro-Cap Trust at 12/31/12 and 12/31/14 for financial reporting purposes, and as a result the net asset value originally calculated on that date and the total return based on that net asset value differs from the adjusted net asset value and total return reported in the Financial Highlights. The market price of the Funds shares will fluctuate, so that shares may be worth more or less than their original cost when sold. The Fund normally invests in micro-cap companies, which may involve considerably more risk than investing in larger-cap companies. The Funds broadly diversified portfolio does not ensure a profit or guarantee against loss. Regarding the Top Contributors and Top Detractors tables shown on page 8, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Funds performance for 2014. |
2014 Annual Report to Stockholders | 9 |
MANAGERS DISCUSSION | ||
Royce Global Value Trust | ||
Chuck Royce |
FUND PERFORMANCE |
Royce Global
Value Trust (RGT) fell 6.2% on an NAV (net asset value) basis and 7.9%
on a market price basis in 2014, results that considerably trailed its
benchmark, the Russell Global Small Cap Index, which lost 0.3% for the same period.
The Funds difficulties on both a relative and absolute basis were mostly
attributable to a poor second half. The year began on a solidly bullish note. For
the six-month period ended June 30, 2014 RGT climbed 5.6% on an NAV basis and 5.8%
on a market price basis, essentially sandwiching its benchmark, which was up 5.7%
for the same period. A strengthening Europe helped to compensate for a generally
less robust Asia during the first few months of 2014. There were notable contributions
from portfolio holdings in Canada, France, and Japan in the first half as well as
trouble spots for positions headquartered in Hong Kong and the U.S.
Stocks across the globe corrected (with the exception of U.S. large-caps) in the third quarter, with European shares among the most adversely affected. The Fund lost 7.1% on an NAV basis and 7.4% on a market price basis versus a decline of 6.7% for the Russell Global Small Cap Index. Portfolio holdings headquartered in the U.S., Canada, Hong Kong, and France were the largest detractors from quarterly results. Unfortunately, the Fund fell farther behind in the fourth quarter, a period in which U.S. small-caps rallied off a mid-October low while many non-U.S. companies saw additional losses or treaded water. For the fourth quarter, the Fund was down 4.4% on an NAV basis and 6.0% based on market price compared to a 1.1% increase for its global benchmark. In contrast to the third quarter, holdings headquartered in Japan, Brazil, and the U.K. had the most significant negative impact. While we were not pleased with the Funds thus-far brief since inception (10/17/13) results, we are confident that our disciplined, value-oriented approach can be successful. |
WHAT WORKED... AND WHAT DIDNT |
For the full year, those countries with the greatest positive impact were South Africa, Argentina, and the Philippines while holdings headquartered in Hong Kong, the U.S., the U.K., and Brazil detracted most from RGTs calendar-year results. On a sector basis, only Information Technology and Consumer Staples finished 2014 in the black, though their respective net gains were modest. Industrials posted the largest net losses, nearly doubling the negative impact of the Funds next-biggest loser, Materials. The Consumer Discretionary sector also registered a decent-sized net loss for the year. BBVA Banco Frances is one of Argentinas largest banks. Its strong revenue growth and terrific history of earnings per share growth helped to reassure investors otherwise anxious over the nations recent debt woes. We reduced our position as its stock price climbed. We chose to hold our position in food distribution business Universal Robina, one of the largest food companies in the Philippines. Improved domestic and international sales helped to move its shares higher. |
LPS Brasil Consultoria de Imoveis provides integrated solutions in the real estate brokerage industry as well as consulting and financing promotion services in Brazil. A weak real estate market and depressed consumer sentiment contributed to the companys fading share price, which was also hampered by Brazils overall sluggish economy. Not entirely sure of the timing for a turnaround, we began to reduce our stake in September. We were more confident in the long-term prospects for retailer New World Department Store China. We like how the company is positioned for a pick-up in the Chinese economy as well as its management and very generous dividend policy. LPKF Laser & Electronics develops specialized mechanical engineering products for electronics production, the automotive industry, and the manufacture of solar cells. A revised outlook for 2014 kept investors selling, but we believe the case for long-term growth remained intact. Its financing is solid and its profitability remains above-average, despite the recent revenue downturn. We think it can resume growth in 2015. Freund Corporation manufactures and sells granulation and coating equipment for the pharmaceutical, food, and chemical industries in Japan and internationally. Contracting demand for equipment shipments, surging prices in raw materials, and a rise in operating expenses all hurt its stock price. We added shares in the first half. The strength of the U.S. dollar was also a factor in the performance of non-U.S. holdings. |
Top Contributors to Performance For 2014 (%)1 | ||
BBVA Banco Frances ADR | 0.49 | |
Universal Robina | 0.46 | |
Relo Holdings | 0.42 | |
Shimano | 0.38 | |
Regent Manner International Holdings | 0.31 | |
1 Includes dividends |
Top Detractors from Performance For 2014 (%)2 | ||
LPS Brasil Consultoria de Imoveis | -0.58 | |
New World Department Store China | -0.57 | |
LPKF Laser & Electronics | -0.54 | |
Freund Corporation | -0.41 | |
Pico Far East Holdings | -0.39 | |
2 Net of dividends |
CURRENT POSITIONING AND OUTLOOK |
The Fund invests in a broadly diversified portfolio of both U.S. and non-U.S. small-cap stocks. At the end of 2014, RGT was overweight in cyclical sectors such as Consumer Discretionary and Industrials. We significantly added to our exposure in the latter during 2014. The portfolio also had reasonable exposure to Financials and Information Technology. The former group was underweight versus the benchmark, but was built up considerably in 2014. The Funds sector weightings reflect our belief in the recovery of global economic growth. |
10 | 2014 Annual Report to Stockholders |
PERFORMANCE AND PORTFOLIO REVIEW | SYMBOLS MARKET PRICE RGT NAV XRGTX |
Performance | ||||||||||||||||||
Average Annual Total Return (%) Through 12/31/14 | ||||||||||||||||||
JUL-DEC 2014* | 1-YR | SINCE INCEPTION (10/17/13) | ||||||||||||||||
RGT (NAV) | -11.18 | -6.23 | -3.03 | |||||||||||||||
*Not Annualized |
Morningstar Style MapTM | As of 12/31/14 |
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a funds investment strategy. The Morningstar Ownership Zone provides detail about a portfolios investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a funds ownership zone may vary. See page 60 for additional information. |
Top 10 Positions | ||
% of Net Assets | ||
Pico Far East Holdings | 1.5 | |
Ritchie Bros. Auctioneers | 1.5 | |
Lazard Cl. A | 1.5 | |
Relo Holdings | 1.5 | |
EPS Corporation | 1.4 | |
Clarkson | 1.4 | |
Silverlake Axis | 1.4 | |
Consort Medical | 1.3 | |
CETIP - Mercados Organizados | 1.3 | |
TGS-NOPEC Geophysical | 1.2 | |
Portfolio Sector Breakdown | ||
% of Net Assets | ||
Industrials | 22.3 | |
Financials | 19.6 | |
Consumer Discretionary | 17.5 | |
Materials | 14.2 | |
Information Technology | 13.5 | |
Health Care | 7.3 | |
Energy | 3.2 | |
Consumer Staples | 2.7 | |
Other Net Liabilities | -0.3 | |
Calendar Year Total Returns (%) | ||
YEAR | RGT (NAV) | |
2014 | -6.2 | |
Portfolio Country Breakdown1,2 | ||
% of Net Assets | ||
United States | 14.8 | |
Japan | 11.0 | |
Hong Kong | 10.0 | |
United Kingdom | 9.6 | |
Canada | 7.9 | |
France | 6.8 | |
South Africa | 5.1 | |
Brazil | 3.8 | |
1 | Represents countries that are 3% or more of net assets. |
2 | Securities are categorized by the country of their headquarters. |
Portfolio Diagnostics | ||
Fund Net Assets | $95 million | |
Number of Holdings | 229 | |
Turnover Rate | 43% | |
Net Asset Value | $9.25 | |
Market Price | $8.04 | |
Average Market Capitalization1 | $953 million | |
Weighted Average P/E Ratio2,3 | 16.3x | |
Weighted Average P/B Ratio2 | 1.7x | |
Holdings ≥ 75% of Total Investments | 91 | |
Active Share4 | 98% | |
Important
Performance and Risk Information All performance information reflects past performance, is presented on a total return basis, and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month-end may be obtained at www.roycefunds.com. Certain immaterial adjustments were made to the net assets of Royce Global Value Trust at 12/31/14 for financial reporting purposes, and as a result the net asset value originally calculated on that date and the total return based on that net asset value differs from the adjusted net asset value and total return reported in the Financial Highlights. The market price of the Funds shares will fluctuate, so that shares may be worth more or less than their original cost when sold. The Fund invests primarily in securities of small- and micro-cap companies, which may involve considerably more risk than investments in securities of larger-cap companies. The Funds broadly diversified portfolio does not ensure a profit or guarantee against loss. From time to time, the Fund may invest a significant portion of its net assets in foreign securities, which may involve political, economic, currency and other risks not encountered in U.S. investments. Regarding the Top Contributors and Top Detractors tables shown on page 10, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Funds performance for 2014. |
2014 Annual Report to Stockholders | 11 |
History Since Inception
The following table details the share accumulations by an initial investor in the Funds who reinvested all distributions and participated fully in primary subscriptions for each of the rights offerings. Full participation in distribution reinvestments and rights offerings can maximize the returns available to a long-term investor. This table should be read in conjunction with the Performance and Portfolio Reviews of the Funds.
HISTORY | AMOUNT INVESTED | PURCHASE PRICE1 | SHARES | NAV VALUE2 | MARKET VALUE3 | |||||||||||||
Royce Value Trust | ||||||||||||||||||
11/26/86 | Initial Purchase | $ | 10,000 | $ | 10.000 | 1,000 | $ | 9,280 | $ | 10,000 | ||||||||
10/15/87 | Distribution $0.30 | 7.000 | 42 | |||||||||||||||
12/31/87 | Distribution $0.22 | 7.125 | 32 | 8,578 | 7,250 | |||||||||||||
12/27/88 | Distribution $0.51 | 8.625 | 63 | 10,529 | 9,238 | |||||||||||||
9/22/89 | Rights Offering | 405 | 9.000 | 45 | ||||||||||||||
12/29/89 | Distribution $0.52 | 9.125 | 67 | 12,942 | 11,866 | |||||||||||||
9/24/90 | Rights Offering | 457 | 7.375 | 62 | ||||||||||||||
12/31/90 | Distribution $0.32 | 8.000 | 52 | 11,713 | 11,074 | |||||||||||||
9/23/91 | Rights Offering | 638 | 9.375 | 68 | ||||||||||||||
12/31/91 | Distribution $0.61 | 10.625 | 82 | 17,919 | 15,697 | |||||||||||||
9/25/92 | Rights Offering | 825 | 11.000 | 75 | ||||||||||||||
12/31/92 | Distribution $0.90 | 12.500 | 114 | 21,999 | 20,874 | |||||||||||||
9/27/93 | Rights Offering | 1,469 | 13.000 | 113 | ||||||||||||||
12/31/93 | Distribution $1.15 | 13.000 | 160 | 26,603 | 25,428 | |||||||||||||
10/28/94 | Rights Offering | 1,103 | 11.250 | 98 | ||||||||||||||
12/19/94 | Distribution $1.05 | 11.375 | 191 | 27,939 | 24,905 | |||||||||||||
11/3/95 | Rights Offering | 1,425 | 12.500 | 114 | ||||||||||||||
12/7/95 | Distribution $1.29 | 12.125 | 253 | 35,676 | 31,243 | |||||||||||||
12/6/96 | Distribution $1.15 | 12.250 | 247 | 41,213 | 36,335 | |||||||||||||
1997 | Annual distribution total $1.21 | 15.374 | 230 | 52,556 | 46,814 | |||||||||||||
1998 | Annual distribution total $1.54 | 14.311 | 347 | 54,313 | 47,506 | |||||||||||||
1999 | Annual distribution total $1.37 | 12.616 | 391 | 60,653 | 50,239 | |||||||||||||
2000 | Annual distribution total $1.48 | 13.972 | 424 | 70,711 | 61,648 | |||||||||||||
2001 | Annual distribution total $1.49 | 15.072 | 437 | 81,478 | 73,994 | |||||||||||||
2002 | Annual distribution total $1.51 | 14.903 | 494 | 68,770 | 68,927 | |||||||||||||
1/28/03 | Rights Offering | 5,600 | 10.770 | 520 | ||||||||||||||
2003 | Annual distribution total $1.30 | 14.582 | 516 | 106,216 | 107,339 | |||||||||||||
2004 | Annual distribution total $1.55 | 17.604 | 568 | 128,955 | 139,094 | |||||||||||||
2005 | Annual distribution total $1.61 | 18.739 | 604 | 139,808 | 148,773 | |||||||||||||
2006 | Annual distribution total $1.78 | 19.696 | 693 | 167,063 | 179,945 | |||||||||||||
2007 | Annual distribution total $1.85 | 19.687 | 787 | 175,469 | 165,158 | |||||||||||||
2008 | Annual distribution total $1.723 | 12.307 | 1,294 | 95,415 | 85,435 | |||||||||||||
3/11/09 | Distribution $0.323 | 6.071 | 537 | 137,966 | 115,669 | |||||||||||||
12/2/10 | Distribution $0.03 | 13.850 | 23 | 179,730 | 156,203 | |||||||||||||
2011 | Annual distribution total $0.783 | 13.043 | 656 | 161,638 | 139,866 | |||||||||||||
2012 | Annual distribution total $0.80 | 13.063 | 714 | 186,540 | 162,556 | |||||||||||||
2013 | Annual distribution total $2.194 | 16.647 | 1,658 | 250,219 | 220,474 | |||||||||||||
2014 | Annual distribution total $1.82 | 14.840 | 1,757 | |||||||||||||||
12/31/14 | $ | 21,922 | 15,528 | $ | 252,175 | $ | 222,516 | |||||||||||
12 | 2014 Annual Report to Stockholders |
HISTORY | AMOUNT INVESTED | PURCHASE PRICE1 | SHARES | NAV VALUE2 | MARKET VALUE2 | |||||||||||||
Royce Micro-Cap Trust | ||||||||||||||||||
12/14/93 | Initial Purchase | $ | 7,500 | $ | 7.500 | 1,000 | $ | 7,250 | $ | 7,500 | ||||||||
10/28/94 | Rights Offering | 1,400 | 7.000 | 200 | ||||||||||||||
12/19/94 | Distribution $0.05 | 6.750 | 9 | 9,163 | 8,462 | |||||||||||||
12/7/95 | Distribution $0.36 | 7.500 | 58 | 11,264 | 10,136 | |||||||||||||
12/6/96 | Distribution $0.80 | 7.625 | 133 | 13,132 | 11,550 | |||||||||||||
12/5/97 | Distribution $1.00 | 10.000 | 140 | 16,694 | 15,593 | |||||||||||||
12/7/98 | Distribution $0.29 | 8.625 | 52 | 16,016 | 14,129 | |||||||||||||
12/6/99 | Distribution $0.27 | 8.781 | 49 | 18,051 | 14,769 | |||||||||||||
12/6/00 | Distribution $1.72 | 8.469 | 333 | 20,016 | 17,026 | |||||||||||||
12/6/01 | Distribution $0.57 | 9.880 | 114 | 24,701 | 21,924 | |||||||||||||
2002 | Annual distribution total $0.80 | 9.518 | 180 | 21,297 | 19,142 | |||||||||||||
2003 | Annual distribution total $0.92 | 10.004 | 217 | 33,125 | 31,311 | |||||||||||||
2004 | Annual distribution total $1.33 | 13.350 | 257 | 39,320 | 41,788 | |||||||||||||
2005 | Annual distribution total $1.85 | 13.848 | 383 | 41,969 | 45,500 | |||||||||||||
2006 | Annual distribution total $1.55 | 14.246 | 354 | 51,385 | 57,647 | |||||||||||||
2007 | Annual distribution total $1.35 | 13.584 | 357 | 51,709 | 45,802 | |||||||||||||
2008 | Annual distribution total $1.193 | 8.237 | 578 | 28,205 | 24,807 | |||||||||||||
3/11/09 | Distribution $0.223 | 4.260 | 228 | 41,314 | 34,212 | |||||||||||||
12/2/10 | Distribution $0.08 | 9.400 | 40 | 53,094 | 45,884 | |||||||||||||
2011 | Annual distribution total $0.533 | 8.773 | 289 | 49,014 | 43,596 | |||||||||||||
2012 | Annual distribution total $0.51 | 9.084 | 285 | 57,501 | 49,669 | |||||||||||||
2013 | Annual distribution total $1.38 | 11.864 | 630 | 83,110 | 74,222 | |||||||||||||
2014 | Annual distribution total $2.90 | 10.513 | 1,704 | |||||||||||||||
12/31/14 | $ | 8,900 | 7,590 | $ | 86,071 | $ | 76,507 | |||||||||||
Royce Global Value Trust | ||||||||||||||||||
10/17/13 | Initial Purchase | $ | 8,975 | $ | 8.975 | 1,000 | $ | 9,780 | $ | 8,975 | ||||||||
12/11/14 | Distribution $0.15 | 7.970 | 19 | |||||||||||||||
12/31/14 | $ | 8,975 | 1,019 | $ | 9,426 | $ | 8,193 | |||||||||||
2014 Annual Report to Stockholders | 13 |
Distribution Reinvestment and Cash Purchase Options
Why should
I reinvest my distributions? By reinvesting distributions, a stockholder can maintain an undiluted investment in the Fund. The regular reinvestment of distributions has a significant impact on stockholder returns. In contrast, the stockholder who takes distributions in cash is penalized when shares are issued below net asset value to other stockholders. How does the reinvestment of distributions from the Royce closed-end funds work? The Funds automatically issue shares in payment of distributions unless you indicate otherwise. The shares are generally issued at the lower of the market price or net asset value on the valuation date. How does this apply to registered stockholders? If your shares are registered directly with a Fund, your distributions are automatically reinvested unless you have otherwise instructed the Funds transfer agent, Computershare, in writing, in which case you will receive your distribution in cash. A registered stockholder also may have the option to receive the distribution in the form of a stock certificate. What if my shares are held by a brokerage firm or a bank? If your shares are held by a brokerage firm, bank, or other intermediary as the stockholder of record, you should contact your brokerage firm or bank to be certain that it is automatically reinvesting distributions on your behalf. If they are unable to reinvest distributions on behalf, you should have your shares registered in your name in order to participate. What other features are available for registered stockholders? The Distribution Reinvestment and Cash Purchase Plans also allow registered stockholders to make optional cash purchases of shares of a Funds common stock directly through Computershare on a monthly basis, and to deposit certificates representing your RVT and RMT shares with Computershare for safekeeping. (RGT does not issue shares in certificated form). Plan participants are subject to a $0.75 service fee for each voluntary cash purchase under the Plans. The Funds investment adviser absorbed all commissions on optional cash purchases under the Plans through December 31, 2014. |
How do the
Plans work for registered stockholders? Computershare maintains the accounts for registered stockholders in the Plans and sends written confirmation of all transactions in the account. Shares in the account of each participant will be held by Computershare in non-certificated form in the name of the participant, and each participant will be able to vote those shares at a stockholder meeting or by proxy. A participant may also send stock certificates for RVT and RMT held by them to Computershare to be held in non-certificated form. RGT does not issue shares in certificated form. There is no service fee charged to participants for reinvesting distributions. If a participant elects to sell shares from a Plan account, Computershare will deduct a $2.50 service fee from the sale transaction. The Funds investment adviser absorbed all commissions on optional sales under the Plans through December 31, 2014. If a nominee is the registered owner of your shares, the nominee will maintain the accounts on your behalf. How can I get more information on the Plans? You can call an Investor Services Representative at (800) 221-4268 or you can request a copy of the Plan for your Fund from Computershare. All correspondence (including notifications) should be directed to: [Name of Fund] Distribution Reinvestment and Cash Purchase Plan, c/o Computershare, PO Box 43078, Providence, RI 02940-3078, telephone (800) 426-5523 (from 9:00 A.M. to 5:00 P.M.). |
14 | 2014 Annual Report to Stockholders |
Royce Value Trust | December 31, 2014 |
Schedule of Investments Common Stocks 102.8% |
||||||
SHARES | VALUE | |||||
CONSUMER DISCRETIONARY 11.8% | ||||||
AUTO COMPONENTS - 0.9% | ||||||
Drew
Industries 1 |
29,206 | $ | 1,491,551 | |||
Fuel
Systems Solutions 1 |
122,000 | 1,334,680 | ||||
Gentex
Corporation |
122,740 | 4,434,596 | ||||
Global & Yuasa Battery |
35,500 | 1,275,040 | ||||
Selamat
Sempurna |
6,867,400 | 2,619,299 | ||||
Standard
Motor Products |
15,052 | 573,782 | ||||
11,728,948 | ||||||
AUTOMOBILES - 0.9% | ||||||
Thor
Industries 2 |
124,980 | 6,982,633 | ||||
Winnebago
Industries |
211,400 | 4,600,064 | ||||
11,582,697 | ||||||
DISTRIBUTORS - 0.2% | ||||||
Weyco
Group |
97,992 | 2,907,423 | ||||
DIVERSIFIED CONSUMER SERVICES - 1.5% | ||||||
American
Public Education 1 |
36,100 | 1,331,007 | ||||
Benesse
Holdings |
35,000 | 1,039,698 | ||||
Career
Education 1 |
20,000 | 139,200 | ||||
Collectors
Universe |
72,300 | 1,508,178 | ||||
Lincoln Educational Services |
721,700 | 2,035,194 | ||||
MegaStudy |
15,000 | 725,406 | ||||
233,800 | 3,918,488 | |||||
Sothebys |
138,200 | 5,967,476 | ||||
Universal
Technical Institute |
130,432 | 1,283,451 | ||||
17,948,098 | ||||||
HOTELS, RESTAURANTS & LEISURE - 0.0% | ||||||
Ambassadors
Group 1 |
32,100 | 80,250 | ||||
8,000 | 134,800 | |||||
215,050 | ||||||
HOUSEHOLD DURABLES - 2.4% | ||||||
DeLonghi |
20,000 | 362,219 | ||||
Ethan
Allen Interiors |
320,800 | 9,935,176 | ||||
Flexsteel
Industries |
24,800 | 799,800 | ||||
Harman
International Industries |
28,600 | 3,051,906 | ||||
Lifetime
Brands |
54,426 | 936,127 | ||||
28,000 | 4,350,080 | |||||
Natuzzi
ADR 1 |
2,096,300 | 3,249,265 | ||||
NVR
1 |
2,600 | 3,315,858 | ||||
1,012,235 | 2,773,524 | |||||
184,782 | 589,454 | |||||
29,363,409 | ||||||
INTERNET & CATALOG RETAIL - 0.2% | ||||||
34,800 | 1,253,148 | |||||
Manutan
International |
26,000 | 1,289,144 | ||||
2,542,292 | ||||||
LEISURE PRODUCTS - 1.2% | ||||||
Arctic
Cat |
15,800 | 560,900 | ||||
Beneteau 1 |
55,000 | 770,204 | ||||
LeapFrog
Enterprises Cl. A 1 |
240,100 | 1,133,272 | ||||
Nautilus 1 |
676,100 | 10,263,198 | ||||
Shimano |
11,000 | 1,422,852 | ||||
Smith
& Wesson Holding Corporation 1 |
39,300 | 372,171 | ||||
14,522,597 | ||||||
MEDIA - 1.2% | ||||||
E.W.
Scripps Company Cl. A 1 |
53,300 | 1,191,255 | ||||
Media
Chinese International |
7,650,000 | 1,640,664 | ||||
Morningstar |
84,600 | 5,474,466 | ||||
Pico
Far East Holdings |
6,575,000 | 1,506,650 | ||||
RLJ Entertainment 1 |
35,600 | 71,200 | ||||
SinoMedia Holding |
500,000 | 278,852 | ||||
T4F Entretenimento 1 |
141,800 | 153,651 | ||||
Television Broadcasts |
308,400 | 1,790,162 | ||||
Wiley (John) & Sons Cl. A |
48,200 | 2,855,368 | ||||
14,962,268 | ||||||
MULTILINE RETAIL - 0.2% | ||||||
New World Department Store China |
6,427,200 | 2,054,707 | ||||
SPECIALTY RETAIL - 1.5% | ||||||
Aeropostale 1 |
110,000 | 255,200 | ||||
Ascena Retail Group 1 |
109,485 | 1,375,132 | ||||
Buckle (The) 2 |
59,615 | 3,130,980 | ||||
Genesco 1 |
42,785 | 3,278,187 | ||||
I.T |
1,127,000 | 324,855 | ||||
Lewis Group |
200,000 | 1,279,730 | ||||
Oriental Watch Holdings |
543,000 | 104,848 | ||||
Sears Hometown and Outlet Stores 1 |
10,400 | 136,760 | ||||
Signet Jewelers |
8,000 | 1,052,560 | ||||
Stein Mart |
167,800 | 2,453,236 | ||||
Systemax 1 |
194,000 | 2,619,000 | ||||
TravelCenters of America LLC 1 |
62,500 | 788,750 | ||||
West Marine 1 |
131,100 | 1,693,812 | ||||
18,493,050 | ||||||
TEXTILES, APPAREL & LUXURY GOODS - 1.6% | ||||||
Asia Brands |
117,100 | 99,663 | ||||
Crown Crafts |
247,241 | 1,903,756 | ||||
Culp |
55,500 | 1,203,240 | ||||
Daphne International Holdings |
4,412,800 | 1,600,804 | ||||
Grendene |
200,000 | 1,150,320 | ||||
Huvis Corporation |
18,600 | 188,375 | ||||
J.G. Boswell Company 4 |
2,292 | 2,159,087 | ||||
Movado Group |
75,161 | 2,132,317 | ||||
Pacific Textiles Holdings |
550,000 | 727,505 | ||||
Stella International Holdings |
300,000 | 787,202 | ||||
Van de Velde |
22,500 | 1,060,022 | ||||
Wolverine World Wide 2 |
123,500 | 3,639,545 | ||||
YGM Trading |
1,382,600 | 2,505,446 | ||||
19,157,282 | ||||||
Total (Cost $121,593,230) | 145,477,821 | |||||
CONSUMER STAPLES 2.2% | ||||||
BEVERAGES - 0.0% | ||||||
11,876 | 111,635 | |||||
FOOD & STAPLES RETAILING - 0.1% | ||||||
FamilyMart |
37,000 | 1,381,268 | ||||
FOOD PRODUCTS - 1.5% | ||||||
Alico |
51,000 | 2,551,530 | ||||
Cal-Maine Foods |
29,176 | 1,138,739 | ||||
Farmer Bros. 1 |
28,900 | 851,105 | ||||
Industrias Bachoco ADR 1 |
41,865 | 2,088,226 | ||||
Lancaster Colony |
10,700 | 1,001,948 | ||||
Seneca Foods Cl. A 1 |
219,255 | 5,926,463 | ||||
Seneca Foods Cl. B 1 |
13,840 | 445,648 | ||||
Sipef |
3,700 | 213,472 | ||||
Tootsie Roll Industries 2 |
124,135 | 3,804,738 | ||||
598,676 | 227,497 | |||||
18,249,366 | ||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 15 |
Royce Value Trust |
Schedule of Investments (continued) | ||||||
SHARES | VALUE | |||||
CONSUMER STAPLES (continued) | ||||||
PERSONAL PRODUCTS - 0.6% | ||||||
161,310 | $ | 7,049,247 | ||||
Total (Cost $24,078,392) | 26,791,516 | |||||
ENERGY 3.6% | ||||||
ENERGY EQUIPMENT & SERVICES - 3.2% | ||||||
276,250 | 19,337 | |||||
63,000 | 2,523,150 | |||||
Ensign Energy Services |
134,000 | 1,176,450 | ||||
Helmerich & Payne |
49,710 | 3,351,448 | ||||
ION Geophysical 1 |
361,500 | 994,125 | ||||
Oil States International 1 |
48,713 | 2,382,066 | ||||
Pason Systems |
359,480 | 6,773,125 | ||||
SEACOR Holdings 1 |
141,092 | 10,414,001 | ||||
156,880 | 3,922,000 | |||||
TGS-NOPEC Geophysical |
125,070 | 2,706,057 | ||||
Tidewater |
24,000 | 777,840 | ||||
Trican Well Service |
45,200 | 216,702 | ||||
Unit Corporation 1 |
116,000 | 3,955,600 | ||||
39,211,901 | ||||||
OIL, GAS & CONSUMABLE FUELS - 0.4% | ||||||
Contango Oil & Gas 1 |
7,000 | 204,680 | ||||
Green Plains |
19,000 | 470,820 | ||||
Harvest Natural Resources 1 |
13,000 | 23,530 | ||||
Permian Basin Royalty Trust |
276,000 | 2,635,800 | ||||
273,134 | 360,537 | |||||
World Fuel Services |
16,600 | 779,038 | ||||
WPX Energy 1 |
110,000 | 1,279,300 | ||||
5,753,705 | ||||||
Total (Cost $58,282,707) | 44,965,606 | |||||
FINANCIALS 15.7% | ||||||
BANKS - 2.2% | ||||||
Bank of N.T. Butterfield & Son |
1,784,161 | 3,550,480 | ||||
BCB Holdings 1 |
209,426 | 39,169 | ||||
Farmers & Merchants Bank of Long Beach 4 |
1,200 | 7,219,200 | ||||
Fauquier Bankshares |
160,800 | 3,035,904 | ||||
First Citizens BancShares Cl. A 2 |
29,026 | 7,337,483 | ||||
Mechanics Bank 4 |
200 | 5,200,000 | ||||
26,382,236 | ||||||
CAPITAL MARKETS - 7.2% | ||||||
AllianceBernstein Holding L.P. |
102,000 | 2,634,660 | ||||
Artisan Partners Asset Management Cl. A |
86,960 | 4,394,089 | ||||
ASA Gold and Precious Metals |
346,821 | 3,506,360 | ||||
Ashmore Group |
899,800 | 3,901,073 | ||||
Aurelius |
9,300 | 354,084 | ||||
CETIP - Mercados Organizados |
430,000 | 5,207,767 | ||||
Cowen Group 1 |
731,158 | 3,509,558 | ||||
182,800 | 2,015,552 | |||||
Eaton Vance 2 |
40,500 | 1,657,665 | ||||
Edmond de Rothschild (Suisse) |
123 | 1,889,786 | ||||
Federated Investors Cl. B |
308,400 | 10,155,612 | ||||
GAMCO Investors Cl. A |
20,200 | 1,796,588 | ||||
Jupiter Fund Management |
230,000 | 1,291,266 | ||||
Lazard Cl. A |
105,775 | 5,291,923 | ||||
Medley Management Cl. A |
105,300 | 1,547,910 | ||||
MVC Capital |
324,200 | 3,186,886 | ||||
86,100 | 1,270,836 | |||||
Paris Orleans |
346,893 | 7,464,488 | ||||
Qalaa Holdings 1 |
11,799,921 | 4,736,439 | ||||
9,500 | 116,280 | |||||
RHJ International 1 |
440,000 | 2,457,848 | ||||
SEI Investments |
225,675 | 9,036,027 | ||||
Sprott |
590,000 | 1,239,112 | ||||
U.S. Global Investors Cl. A |
661,751 | 2,051,428 | ||||
Value Partners Group |
6,703,000 | 5,598,185 | ||||
Virtus Investment Partners |
7,040 | 1,200,250 | ||||
Westwood Holdings Group |
23,460 | 1,450,297 | ||||
88,961,969 | ||||||
CONSUMER FINANCE - 0.2% | ||||||
EZCORP Cl. A 1 |
211,000 | 2,479,250 | ||||
DIVERSIFIED FINANCIAL SERVICES - 1.2% | ||||||
Banca Finnat Euramerica |
1,060,000 | 518,149 | ||||
HF2 Financial Management Cl. A 1 |
292,300 | 3,031,151 | ||||
MarketAxess Holdings |
100,000 | 7,171,000 | ||||
PICO Holdings 1 |
100,400 | 1,892,540 | ||||
Sofina |
19,698 | 2,070,466 | ||||
14,683,306 | ||||||
INSURANCE - 2.0% | ||||||
Alleghany Corporation 1 |
6,149 | 2,850,061 | ||||
E-L Financial |
16,500 | 9,700,034 | ||||
Erie Indemnity Cl. A |
25,000 | 2,269,250 | ||||
Greenlight Capital Re Cl. A 1 |
21,061 | 687,642 | ||||
Independence Holding Company |
349,423 | 4,874,451 | ||||
Lancashire Holdings |
115,000 | 996,751 | ||||
Primerica |
53,000 | 2,875,780 | ||||
ProAssurance Corporation |
17,139 | 773,826 | ||||
25,027,795 | ||||||
INVESTMENT COMPANIES - 0.2% | ||||||
RIT Capital Partners |
121,500 | 2,645,335 | ||||
REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.2% | ||||||
OUTFRONT Media |
95,339 | 2,558,899 | ||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.9% | ||||||
9,000 | 304,110 | |||||
Brasil Brokers Participacoes |
91,400 | 86,923 | ||||
Consolidated-Tomoka Land |
42,868 | 2,392,034 | ||||
155,700 | 1,127,268 | |||||
Forestar Group 1 |
102,000 | 1,570,800 | ||||
Hopefluent Group Holdings |
850,000 | 263,796 | ||||
Kennedy-Wilson Holdings |
101,300 | 2,562,890 | ||||
Midland Holdings 1 |
2,500,000 | 1,263,119 | ||||
197,000 | 3,622,830 | |||||
Tejon Ranch 1 |
342,600 | 10,092,996 | ||||
Tejon Ranch (Warrants) 1 |
96,561 | 168,982 | ||||
23,455,748 | ||||||
THRIFTS & MORTGAGE FINANCE - 0.6% | ||||||
Genworth MI Canada |
69,755 | 2,220,296 | ||||
Timberland Bancorp 5 |
444,200 | 4,708,520 | ||||
Vestin Realty Mortgage II 1 |
53,557 | 200,839 | ||||
7,129,655 | ||||||
Total (Cost $173,324,236) | 193,324,193 | |||||
HEALTH CARE 5.9% | ||||||
BIOTECHNOLOGY - 0.5% | ||||||
185,250 | 1,272,667 | |||||
ArQule 1 |
130,000 | 158,600 | ||||
Coronado Biosciences 1 |
170,000 | 414,800 |
16 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Schedule of Investments (continued) | ||||||
SHARES | VALUE | |||||
HEALTH CARE (continued) | ||||||
BIOTECHNOLOGY (continued) | ||||||
Genomic Health 1 |
33,000 | $ | 1,055,010 | |||
Green Cross |
6,000 | 745,925 | ||||
800 | 46,136 | |||||
78,093 | 2,659,848 | |||||
Rigel Pharmaceuticals 1 |
63,000 | 143,010 | ||||
6,495,996 | ||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 2.4% | ||||||
Allied Healthcare Products 1 |
63,225 | 116,334 | ||||
Analogic Corporation |
38,135 | 3,226,602 | ||||
67,028 | 1,274,202 | |||||
17,079 | 5,807,031 | |||||
bioMerieux |
7,000 | 725,636 | ||||
Cerus Corporation 1 |
240,000 | 1,497,600 | ||||
CONMED Corporation |
81,500 | 3,664,240 | ||||
DENTSPLY International |
21,618 | 1,151,591 | ||||
Derma Sciences 1 |
87,142 | 811,292 | ||||
DiaSorin |
32,500 | 1,310,641 | ||||
57,411 | 8,512,329 | |||||
Invacare Corporation |
61,200 | 1,025,712 | ||||
123,565 | 537,508 | |||||
29,660,718 | ||||||
HEALTH CARE PROVIDERS & SERVICES - 0.4% | ||||||
49,000 | 1,189,230 | |||||
12,000 | 385,560 | |||||
Landauer |
50,000 | 1,707,000 | ||||
MWI Veterinary Supply 1 |
10,000 | 1,699,100 | ||||
4,980,890 | ||||||
HEALTH CARE TECHNOLOGY - 0.2% | ||||||
Medidata Solutions 1 |
40,000 | 1,910,000 | ||||
LIFE SCIENCES TOOLS & SERVICES - 1.4% | ||||||
Bio-Rad Laboratories Cl. A 1 |
19,048 | 2,296,427 | ||||
Bio-Techne |
37,843 | 3,496,693 | ||||
PAREXEL International 1 |
165,800 | 9,211,848 | ||||
PerkinElmer |
39,000 | 1,705,470 | ||||
16,710,438 | ||||||
PHARMACEUTICALS - 1.0% | ||||||
Adcock Ingram Holdings 1 |
28,300 | 119,536 | ||||
Boiron |
10,000 | 843,751 | ||||
46,050 | 1,974,624 | |||||
Medicines Company (The) 1 |
147,518 | 4,081,823 | ||||
122,000 | 1,216,340 | |||||
Santen Pharmaceutical |
20,000 | 1,070,318 | ||||
Stallergenes |
18,000 | 1,077,235 | ||||
83,000 | 1,238,360 | |||||
Vetoquinol |
25,000 | 1,085,951 | ||||
12,707,938 | ||||||
Total (Cost $44,198,051) | 72,465,980 | |||||
INDUSTRIALS 29.9% | ||||||
AEROSPACE & DEFENSE - 2.3% | ||||||
Curtiss-Wright |
6,550 | 462,365 | ||||
Ducommun 1 |
117,200 | 2,962,816 | ||||
HEICO Corporation |
236,638 | 14,292,935 | ||||
HEICO Corporation Cl. A |
80,808 | 3,827,067 | ||||
Hexcel Corporation 1 |
47,500 | 1,970,775 | ||||
Magellan Aerospace |
117,700 | 1,369,688 | ||||
Moog Cl. A 1 |
25,000 | 1,850,750 | ||||
Teledyne Technologies 1 |
20,600 | 2,116,444 | ||||
28,852,840 | ||||||
AIR FREIGHT & LOGISTICS - 2.7% | ||||||
Expeditors International of Washington |
158,900 | 7,088,529 | ||||
Forward Air |
209,750 | 10,565,108 | ||||
149,400 | 5,689,152 | |||||
UTi Worldwide 1 |
635,400 | 7,669,278 | ||||
50,000 | 2,044,000 | |||||
33,056,067 | ||||||
BUILDING PRODUCTS - 1.2% | ||||||
American Woodmark 1 |
117,135 | 4,736,939 | ||||
Burnham Holdings Cl. B 4 |
36,000 | 720,000 | ||||
Simpson Manufacturing |
275,300 | 9,525,380 | ||||
14,982,319 | ||||||
COMMERCIAL SERVICES & SUPPLIES - 2.3% | ||||||
Brady Corporation Cl. A |
45,900 | 1,254,906 | ||||
CompX International Cl. A |
211,100 | 2,490,980 | ||||
Copart 1 |
178,360 | 6,508,356 | ||||
Heritage-Crystal Clean 1 |
102,527 | 1,264,158 | ||||
71,100 | 278,001 | |||||
Kaba Holding |
2,400 | 1,210,160 | ||||
Kimball International Cl. B |
376,880 | 3,437,146 | ||||
Ritchie Bros. Auctioneers |
438,324 | 11,786,532 | ||||
Societe BIC |
1,500 | 199,071 | ||||
28,429,310 | ||||||
CONSTRUCTION & ENGINEERING - 2.4% | ||||||
149,400 | 6,646,806 | |||||
Integrated Electrical Services 1 |
677,482 | 5,284,360 | ||||
174,900 | 7,816,281 | |||||
KBR |
438,192 | 7,427,354 | ||||
326,671 | 2,087,428 | |||||
29,262,229 | ||||||
ELECTRICAL EQUIPMENT - 2.5% | ||||||
Elektrobudowa |
20,000 | 416,901 | ||||
EnerSys |
40,155 | 2,478,366 | ||||
Franklin Electric |
209,200 | 7,851,276 | ||||
Global Power Equipment Group |
253,389 | 3,499,302 | ||||
GrafTech International 1 |
1,046,603 | 5,295,811 | ||||
Powell Industries |
94,500 | 4,637,115 | ||||
Preformed Line Products |
91,600 | 5,004,108 | ||||
Vicor 1 |
104,808 | 1,268,177 | ||||
30,451,056 | ||||||
INDUSTRIAL CONGLOMERATES - 1.0% | ||||||
Carlisle Companies 2 |
28,615 | 2,582,218 | ||||
4,727,500 | 1,536,889 | |||||
Hopewell Holdings |
1,040,000 | 3,793,030 | ||||
Raven Industries |
192,400 | 4,810,000 | ||||
12,722,137 | ||||||
MACHINERY - 9.3% | ||||||
Astec Industries |
20,000 | 786,200 | ||||
Burckhardt Compression Holding |
8,400 | 3,216,128 | ||||
CB Industrial Product Holding |
136,800 | 78,559 | ||||
Chen Hsong Holdings |
1,159,000 | 304,273 | ||||
CIRCOR International |
50,262 | 3,029,793 | ||||
CLARCOR |
92,500 | 6,164,200 | ||||
Columbus McKinnon |
56,535 | 1,585,241 | ||||
Donaldson Company |
193,559 | 7,477,184 | ||||
Eastern Company (The) |
22,000 | 377,300 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 17 |
Royce Value Trust |
Schedule of Investments (continued) | ||||||
SHARES | VALUE | |||||
INDUSTRIALS (continued) | ||||||
MACHINERY (continued) | ||||||
Graco |
104,776 | $ | 8,400,940 | |||
Hurco Companies |
45,952 | 1,566,504 | ||||
Hyster-Yale Materials Handling Cl. A |
11,335 | 829,722 | ||||
IDEX Corporation |
67,400 | 5,246,416 | ||||
John Bean Technologies |
162,866 | 5,351,777 | ||||
Kennametal |
191,100 | 6,839,469 | ||||
Lincoln Electric Holdings |
46,360 | 3,203,012 | ||||
45,000 | 3,858,300 | |||||
Lydall 1 |
27,730 | 910,099 | ||||
Mueller Water Products Cl. A |
33,600 | 344,064 | ||||
NN |
197,100 | 4,052,376 | ||||
Nordson Corporation |
24,296 | 1,894,116 | ||||
Pfeiffer Vacuum Technology |
14,000 | 1,162,111 | ||||
PMFG 1 |
378,352 | 1,978,781 | ||||
Rational |
2,000 | 628,589 | ||||
RBC Bearings |
53,200 | 3,432,996 | ||||
Rotork |
18,000 | 647,735 | ||||
Semperit AG Holding |
25,640 | 1,240,722 | ||||
Spirax-Sarco Engineering |
19,500 | 866,591 | ||||
Sun Hydraulics |
71,018 | 2,796,689 | ||||
Tecumseh Products 1 |
46,700 | 144,303 | ||||
Tennant Company |
41,900 | 3,023,923 | ||||
Timken Company (The) |
29,795 | 1,271,651 | ||||
Valmont Industries 2 |
68,795 | 8,736,965 | ||||
Wabash National 1 |
99,100 | 1,224,876 | ||||
WABCO Holdings 1 |
43,400 | 4,547,452 | ||||
Wabtec Corporation |
83,050 | 7,216,214 | ||||
Woodward |
208,400 | 10,259,532 | ||||
114,694,803 | ||||||
MARINE - 0.1% | ||||||
10,100 | 815,474 | |||||
PROFESSIONAL SERVICES - 3.7% | ||||||
Acacia Research 2 |
47,300 | 801,262 | ||||
150,277 | 7,360,568 | |||||
CRA International 1 |
3,910 | 118,551 | ||||
Exponent |
12,700 | 1,047,750 | ||||
65,500 | 1,268,080 | |||||
Heidrick & Struggles International |
76,480 | 1,762,864 | ||||
ICF International 1 |
66,696 | 2,733,202 | ||||
Insperity |
105,000 | 3,558,450 | ||||
ManpowerGroup |
98,658 | 6,725,516 | ||||
On Assignment 1 |
334,995 | 11,118,484 | ||||
Robert Half International |
16,942 | 989,074 | ||||
RPX Corporation 1 |
30,500 | 420,290 | ||||
Towers Watson & Co. Cl. A |
69,200 | 7,831,364 | ||||
Volt Information Sciences 1 |
19,000 | 203,870 | ||||
45,939,325 | ||||||
ROAD & RAIL - 1.6% | ||||||
FRP Holdings 1 |
212,958 | 8,350,084 | ||||
20,000 | 1,798,400 | |||||
Landstar System |
99,400 | 7,209,482 | ||||
Trancom |
8,000 | 322,258 | ||||
Universal Truckload Services |
78,916 | 2,249,895 | ||||
19,930,119 | ||||||
TRADING COMPANIES & DISTRIBUTORS - 0.7% | ||||||
Aceto Corporation |
61,475 | 1,334,008 | ||||
Kloeckner & Co 1 |
31,300 | 337,317 | ||||
MISUMI Group |
36,200 | 1,189,075 | ||||
MSC Industrial Direct Cl. A 2 |
65,833 | $ | 5,348,931 | |||
8,209,331 | ||||||
TRANSPORTATION INFRASTRUCTURE - 0.1% | ||||||
Wesco Aircraft Holdings 1 |
68,400 | 956,232 | ||||
Total (Cost $216,941,192) | 368,301,242 | |||||
INFORMATION TECHNOLOGY 20.6% | ||||||
COMMUNICATIONS EQUIPMENT - 0.9% | ||||||
ADTRAN |
345,428 | 7,530,330 | ||||
Bel Fuse Cl. B |
30,238 | 826,707 | ||||
Comba Telecom Systems Holdings |
1,035,290 | 366,306 | ||||
Comtech Telecommunications |
44,200 | 1,393,184 | ||||
Ellies Holdings 1 |
643,300 | 72,099 | ||||
EVS Broadcast Equipment |
15,000 | 541,946 | ||||
UTStarcom Holdings 1 |
59,900 | 169,517 | ||||
10,900,089 | ||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 9.7% | ||||||
Agilysys 1 |
165,125 | 2,078,924 | ||||
70,895 | 6,271,372 | |||||
Avnet |
16,400 | 705,528 | ||||
AVX Corporation |
44,600 | 624,400 | ||||
Benchmark Electronics 1 |
221,900 | 5,645,136 | ||||
Cognex Corporation 1 |
69,800 | 2,884,834 | ||||
Coherent 1 |
164,376 | 9,980,911 | ||||
Dolby Laboratories Cl. A |
80,200 | 3,458,224 | ||||
Domino Printing Sciences |
95,000 | 971,017 | ||||
DTS 1 |
207,000 | 6,365,250 | ||||
FEI Company |
82,100 | 7,417,735 | ||||
FLIR Systems |
262,600 | 8,484,606 | ||||
GSI Group 1 |
51,000 | 750,720 | ||||
Hollysys Automation Technologies 1 |
44,582 | 1,089,138 | ||||
68,380 | 5,123,030 | |||||
214,635 | 2,579,913 | |||||
548,244 | 1,480,259 | |||||
National Instruments |
251,850 | 7,830,016 | ||||
Newport Corporation 1 |
570,200 | 10,896,522 | ||||
Oxford Instruments |
8,000 | 158,026 | ||||
PC Connection |
16,301 | 400,189 | ||||
Perceptron |
357,700 | 3,559,115 | ||||
Plexus Corporation 1 |
176,100 | 7,257,081 | ||||
Richardson Electronics |
573,732 | 5,737,320 | ||||
Rofin-Sinar Technologies 1 |
252,281 | 7,258,124 | ||||
Rogers Corporation 1 |
57,066 | 4,647,455 | ||||
496,400 | 3,737,892 | |||||
Vaisala Cl. A |
30,320 | 804,129 | ||||
Vishay Precision Group 1 |
74,826 | 1,284,014 | ||||
119,480,880 | ||||||
INTERNET SOFTWARE & SERVICES - 1.6% | ||||||
298,900 | 2,474,892 | |||||
24,000 | 1,796,160 | |||||
8,147,000 | 1,164,194 | |||||
j2 Global |
42,960 | 2,663,520 | ||||
QuinStreet 1 |
508,132 | 3,084,361 | ||||
RealNetworks 1 |
376,750 | 2,652,320 | ||||
107,000 | 384,130 | |||||
Support.com 1 |
1,452,099 | 3,063,929 | ||||
55,800 | 1,588,626 |
18 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Schedule of Investments (continued) | ||||||
SHARES | VALUE | |||||
INFORMATION TECHNOLOGY (continued) | ||||||
INTERNET SOFTWARE & SERVICES (continued) | ||||||
United Online 1 |
59,771 | $ | 869,668 | |||
19,741,800 | ||||||
IT SERVICES - 2.8% | ||||||
Computer Task Group |
105,000 | 1,000,650 | ||||
Convergys Corporation |
121,000 | 2,464,770 | ||||
eClerx Services |
35,000 | 723,647 | ||||
Hackett Group (The) |
1,270,596 | 11,168,539 | ||||
Innodata 1 |
314,314 | 917,797 | ||||
MAXIMUS |
179,000 | 9,816,360 | ||||
Metrofile Holdings |
2,311,228 | 998,290 | ||||
MoneyGram International 1 |
75,000 | 681,750 | ||||
NeuStar Cl. A 1 |
29,287 | 814,179 | ||||
Sykes Enterprises 1 |
142,584 | 3,346,446 | ||||
Unisys Corporation 1 |
94,000 | 2,771,120 | ||||
34,703,548 | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 3.0% | ||||||
Advanced Energy Industries 1 |
35,000 | 829,500 | ||||
142,571 | 1,447,096 | |||||
Brooks Automation |
128,000 | 1,632,000 | ||||
Cabot Microelectronics 1 |
13,734 | 649,893 | ||||
CEVA 1 |
58,000 | 1,052,120 | ||||
Cirrus Logic 1 |
20,201 | 476,138 | ||||
Diodes 1 |
260,850 | 7,191,634 | ||||
Entropic Communications 1 |
105,000 | 265,650 | ||||
Exar Corporation 1 |
157,576 | 1,607,275 | ||||
Fairchild Semiconductor International 1 |
124,000 | 2,093,120 | ||||
Integrated Silicon Solution |
148,955 | 2,468,184 | ||||
Kopin Corporation 1 |
282,200 | 1,021,564 | ||||
Microsemi Corporation 1 |
25,000 | 709,500 | ||||
MKS Instruments |
103,620 | 3,792,492 | ||||
337,000 | 630,190 | |||||
Nanometrics 1 |
142,590 | 2,398,364 | ||||
Photronics 1 |
143,700 | 1,194,147 | ||||
Silicon Image 1 |
115,000 | 634,800 | ||||
STR Holdings 1 |
90,000 | 123,300 | ||||
Teradyne |
228,000 | 4,512,120 | ||||
Tessera Technologies |
22,235 | 795,124 | ||||
42,000 | 1,464,960 | |||||
36,989,171 | ||||||
SOFTWARE - 1.6% | ||||||
American Software Cl. A |
165,990 | 1,512,169 | ||||
95,000 | 7,790,000 | |||||
Aspen Technology 1 |
42,100 | 1,474,342 | ||||
Blackbaud |
31,400 | 1,358,364 | ||||
40,000 | 1,160,800 | |||||
Computer Modelling Group |
20,000 | 205,543 | ||||
Envivio 1 |
292,532 | 391,993 | ||||
ePlus 1 |
17,200 | 1,301,868 | ||||
Mentor Graphics |
71,493 | 1,567,127 | ||||
SeaChange International 1 |
353,369 | 2,254,494 | ||||
SimCorp |
18,000 | 475,204 | ||||
TeleNav 1 |
24,197 | 161,394 | ||||
19,653,298 | ||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.0% | ||||||
Avid Technology 1 |
38,000 | 539,980 | ||||
10,000 | 109,800 | |||||
230,300 | 7,977,592 | |||||
Intevac 1 |
188,800 | 1,466,976 | ||||
Silicon Graphics International 1 |
133,500 | 1,519,230 | ||||
Western Digital 2 |
7,290 | 807,003 | ||||
12,420,581 | ||||||
Total (Cost $184,774,817) | 253,889,367 | |||||
MATERIALS 7.5% | ||||||
CHEMICALS - 2.2% | ||||||
Cabot Corporation |
13,709 | 601,277 | ||||
FutureFuel Corporation |
94,000 | 1,223,880 | ||||
Hawkins |
86,178 | 3,734,093 | ||||
Innospec |
94,378 | 4,029,941 | ||||
KMG Chemicals |
71,700 | 1,434,000 | ||||
Minerals Technologies |
63,123 | 4,383,892 | ||||
OM Group |
28,185 | 839,913 | ||||
Quaker Chemical |
36,479 | 3,357,527 | ||||
Umicore |
176,000 | 7,088,770 | ||||
26,693,293 | ||||||
CONSTRUCTION MATERIALS - 0.9% | ||||||
Ash Grove Cement Cl. B 4 |
50,518 | 10,179,377 | ||||
Mardin Cimento Sanayii |
491,700 | 999,849 | ||||
11,179,226 | ||||||
CONTAINERS & PACKAGING - 0.8% | ||||||
Greif Cl. A |
112,344 | 5,306,007 | ||||
Mayr-Melnhof Karton |
44,000 | 4,566,110 | ||||
9,872,117 | ||||||
METALS & MINING - 3.4% | ||||||
AuRico Gold |
132,000 | 432,960 | ||||
Centerra Gold |
160,000 | 831,813 | ||||
Central Steel & Wire 4 |
4,862 | 3,633,129 | ||||
Exeter Resource 1 |
475,000 | 280,108 | ||||
Fresnillo |
22,500 | 267,003 | ||||
Gold Fields ADR |
865,000 | 3,918,450 | ||||
Haynes International |
23,000 | 1,115,500 | ||||
Hecla Mining |
660,000 | 1,841,400 | ||||
IAMGOLD Corporation 1 |
510,000 | 1,377,000 | ||||
Imdex 1 |
1,591,766 | 617,134 | ||||
Kirkland Lake Gold 1 |
90,000 | 259,511 | ||||
640,000 | 3,150,973 | |||||
Maharashtra Seamless |
150,000 | 567,216 | ||||
Major Drilling Group International |
380,973 | 1,872,401 | ||||
Medusa Mining 1 |
75,600 | 40,230 | ||||
Pan American Silver |
130,430 | 1,199,956 | ||||
Pretium Resources 1 |
246,000 | 1,420,778 | ||||
Reliance Steel & Aluminum |
158,760 | 9,727,225 | ||||
Saracen Mineral Holdings 1 |
237,072 | 49,468 | ||||
282,000 | 2,129,100 | |||||
Synalloy Corporation |
178,800 | 3,148,668 | ||||
Victoria Gold 1 |
550,000 | 52,074 | ||||
Vista Gold 1 |
124,000 | 35,352 | ||||
Worthington Industries |
148,000 | 4,453,320 | ||||
42,420,769 | ||||||
PAPER & FOREST PRODUCTS - 0.2% | ||||||
Glatfelter |
28,400 | 726,188 | ||||
3,296,000 | 42,504 | |||||
Schweitzer-Mauduit International |
30,238 | 1,279,067 | ||||
2,047,759 | ||||||
Total (Cost $78,777,226) | 92,213,164 | |||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 19 |
Royce Value Trust | December 31, 2014 |
Schedule of Investments (continued) | ||||||
SHARES | VALUE | |||||
TELECOMMUNICATION SERVICES 0.7% | ||||||
WIRELESS TELECOMMUNICATION SERVICES - 0.7% | ||||||
Spok Holdings |
31,300 | $ | 543,368 | |||
Telephone and Data Systems |
348,270 | 8,793,818 | ||||
Total (Cost $8,979,901) | 9,337,186 | |||||
MISCELLANEOUS7 4.9% | ||||||
Total (Cost $59,802,486) | 60,190,696 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $970,752,238) | 1,266,956,771 | |||||
PREFERRED STOCK - 0.1% | ||||||
50,000 | 1,216,350 | |||||
(Cost $724,063) |
1,216,350 | |||||
REPURCHASE AGREEMENT 2.4% | ||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $29,555,000 (collateralized by obligations of various U.S. Government Agencies, 1.06% due 10/12/17, valued at $30,148,500) | ||||||
(Cost $29,555,000) | 29,555,000 | |||||
TOTAL INVESTMENTS 105.3% | ||||||
(Cost $1,001,031,301) | 1,297,728,121 | |||||
LIABILITIES LESS CASH AND OTHER ASSETS (5.3)% | (65,773,483) | |||||
NET ASSETS 100.0% | $ | 1,231,954,638 | ||||
20 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Value Trust | December 31, 2014 | |
Statement of Assets and Liabilities |
ASSETS: Investments at value |
||||
Non-Affiliated Companies (cost $963,292,576) |
$ | 1,260,691,077 | ||
Affiliated Companies (cost $8,183,725) |
7,482,044 | |||
Total investments at value | 1,268,173,121 | |||
Repurchase agreements (at cost and value) | 29,555,000 | |||
Cash and foreign currency | 125,821 | |||
Receivable for investments sold | 6,523,614 | |||
Receivable for dividends and interest | 1,041,165 | |||
Prepaid expenses and other assets | 497,204 | |||
Total Assets | 1,305,915,925 | |||
LIABILITIES:
Revolving credit agreement |
70,000,000 | |||
Payable for investments purchased | 2,955,646 | |||
Payable for investment advisory fee | 482,515 | |||
Payable for directors fees | 43,955 | |||
Payable for interest expense | 4,623 | |||
Accrued expenses | 233,712 | |||
Deferred capital gains tax | 240,836 | |||
Total Liabilities | 73,961,287 | |||
Net Assets | $ | 1,231,954,638 | ||
ANALYSIS OF NET ASSETS: | ||||
Paid-in capital - $0.001 par value per share; 75,868,548 shares outstanding (150,000,000 shares authorized) | $ | 887,979,480 | ||
Undistributed net investment income (loss) | 2,286,303 | |||
Accumulated net realized gain (loss) on investments and foreign currency | 45,251,984 | |||
Net unrealized appreciation (depreciation) on investments and foreign currency | 296,436,871 | |||
Net Assets (net asset value per share - $16.24) | $ | 1,231,954,638 | ||
Investments at identified cost | $ | 971,476,301 | ||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 21 |
Royce Value Trust | Year Ended December 31, 2014 | |
Statement of Operations |
INVESTMENT INCOME: | ||||
INCOME: Dividends |
||||
Non-Affiliated Companies |
$ | 16,916,493 | ||
Affiliated Companies |
79,956 | |||
Foreign withholding tax | (486,916 | ) | ||
Interest | 34,754 | |||
Rehypothecation income | 332,075 | |||
Securities lending | 7,320 | |||
Total income | 16,883,682 | |||
EXPENSES: | ||||
Investment advisory fees | 5,791,677 | |||
Interest expense | 772,938 | |||
Stockholder reports | 421,365 | |||
Custody and transfer agent fees | 261,357 | |||
Directors fees | 159,539 | |||
Administrative and office facilities | 145,403 | |||
Professional fees | 84,114 | |||
Other expenses | 123,321 | |||
Total expenses | 7,759,714 | |||
Compensating balance credits | (9 | ) | ||
Net expenses | 7,759,705 | |||
Net investment income (loss) | 9,123,977 | |||
REALIZED
AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: |
||||
NET REALIZED GAIN (LOSS): | ||||
Investments | 131,095,322 | |||
Foreign currency transactions | (140,661 | ) | ||
Net realized foreign capital gains tax | (99,135 | ) | ||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | ||||
Investments and foreign currency translations | (140,123,494 | ) | ||
Net change in deferred foreign capital gain taxes on unrealized appreciation | (240,836 | ) | ||
Other assets and liabilities denominated in foreign currency | (24,644 | ) | ||
Net realized and unrealized gain (loss) on investments and foreign currency | (9,533,448 | ) | ||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | (409,471 | ) | |
22 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Value Trust | ||
Statement of Changes in Net Assets |
YEAR ENDED 12/31/14 | YEAR ENDED 12/31/13 | |||||||
INVESTMENT
OPERATIONS: Net investment income (loss) |
$ | 9,123,977 | $ | 8,567,535 | ||||
Net realized gain (loss) on investments and foreign currency | 130,855,526 | 171,436,021 | ||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (140,388,974 | ) | 191,177,592 | |||||
Net increase (decrease) in net assets from investment operations | (409,471 | ) | 371,181,148 | |||||
DISTRIBUTIONS:
Net investment income |
(10,008,114 | ) | (7,723,525 | ) | ||||
Net realized gain on investments and foreign currency | (123,263,927 | ) | (148,307,278 | ) | ||||
Total distributions | (133,272,041 | ) | (156,030,803 | ) | ||||
CAPITAL STOCK
TRANSACTIONS: Reinvestment of distributions |
57,806,861 | 26,224,892 | ||||||
Depreciation of securities contributed to Royce Global Value Trust spinoff | | (15,972,444 | ) | |||||
Total capital stock transactions | 57,806,861 | 10,252,448 | ||||||
Net Increase (Decrease) In Net Assets | (75,874,651 | ) | 225,402,793 | |||||
NET ASSETS: | ||||||||
Beginning of year | 1,307,829,289 | 1,082,426,496 | ||||||
End of year (including undistributed net investment income (loss) of $2,286,303 at 12/31/14 and $6,453,789 at 12/31/13) | $ | 1,231,954,638 | $ | 1,307,829,289 | ||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 23 |
Royce Value Trust | December 31, 2014 | |
Statement of Cash Flows |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net increase (decrease) in net assets from investment operations | $ | (409,471 | ) | |
Adjustments to reconcile net increase (decrease) in net assets from investment operations to net cash provided by operating activities: | ||||
Purchases of long-term investments |
(549,096,900 | ) | ||
Proceeds from sales and maturities of long-term investments |
492,983,075 | |||
Net purchases, sales and maturities of short-term investments |
162,354,000 | |||
Net (increase) decrease in dividends and interest receivable and other assets |
566,854 | |||
Net increase (decrease) in interest expense payable, accrued expenses and other liabilities |
(92,610 | ) | ||
Net change in unrealized appreciation (depreciation) on investments |
140,123,494 | |||
Net realized gain on investments and foreign currency |
(130,855,526 | ) | ||
Net cash provided by operating activities | 115,572,916 | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Net increase (decrease) in revolving credit agreement | (40,000,000 | ) | ||
Distributions | (133,272,041 | ) | ||
Reinvestment of distributions | 57,806,861 | |||
Net cash used for financing activities | (115,465,180 | ) | ||
INCREASE (DECREASE) IN CASH: | 107,736 | |||
Cash and foreign currency at beginning of year | 18,085 | |||
Cash and foreign currency at end of year | $ | 125,821 | ||
24 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Value Trust
Financial Highlights |
This table is presented to show selected data for a share of Common Stock outstanding throughout each period, and to assist stockholders in evaluating the Funds performance for the periods presented. |
YEARS ENDED | ||||||||||||||||||||
12/31/14 | 12/31/13 | 12/31/12 | 12/31/11 | 12/31/10 | ||||||||||||||||
Net Asset Value, Beginning of Period | $ | 18.17 | $ | 15.40 | $ | 14.18 | $ | 16.73 | $ | 12.87 | ||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||
Net investment income (loss) | 0.12 | 0.12 | 0.23 | 0.10 | 0.24 | |||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency |
(0.13 | ) | 4.89 | 2.02 | (1.62 | ) | 3.85 | |||||||||||||
Total investment operations | (0.01 | ) | 5.01 | 2.25 | (1.52 | ) | 4.09 | |||||||||||||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: | ||||||||||||||||||||
Net investment income | | | (0.04 | ) | (0.03 | ) | (0.20 | ) | ||||||||||||
Net realized gain on investments and foreign currency | | | (0.13 | ) | (0.16 | ) | | |||||||||||||
Total distributions to Preferred Stockholders | | | (0.17 | ) | (0.19 | ) | (0.20 | ) | ||||||||||||
Net Increase (Decrease) in Net Assets Applicable to Common Stockholders from Investment Operations |
(0.01 | ) | 5.01 | 2.08 | (1.71 | ) | 3.89 | |||||||||||||
DISTRIBUTIONS TO COMMON STOCKHOLDERS: | ||||||||||||||||||||
Net investment income | (0.14 | ) | (0.11 | ) | (0.17 | ) | (0.08 | ) | (0.03 | ) | ||||||||||
Net realized gain on investments and foreign currency | (1.68 | ) | (2.08 | ) | (0.63 | ) | (0.43 | ) | | |||||||||||
Return of capital | | | | (0.27 | ) | | ||||||||||||||
Total distributions to Common Stockholders | (1.82 | ) | (2.19 | ) | (0.80 | ) | (0.78 | ) | (0.03 | ) | ||||||||||
CAPITAL STOCK TRANSACTIONS: | ||||||||||||||||||||
Effect of reinvestment of distributions by Common Stockholders | (0.10 | ) | (0.05 | ) | (0.06 | ) | (0.06 | ) | (0.00 | ) | ||||||||||
Total capital stock transactions | (0.10 | ) | (0.05 | ) | (0.06 | ) | (0.06 | ) | (0.00 | ) | ||||||||||
Net Asset Value, End of Period | $ | 16.24 | $ | 18.17 | $ | 15.40 | $ | 14.18 | $ | 16.73 | ||||||||||
Market Value, End of Period | $ | 14.33 | $ | 16.01 | $ | 13.42 | $ | 12.27 | $ | 14.54 | ||||||||||
TOTAL RETURN: 1 | ||||||||||||||||||||
Net Asset Value | 0.78 | % | 34.14 | % | 15.41 | % | (10.06 | )% | 30.27 | % | ||||||||||
Market Value | 0.93 | % | 35.63 | % | 16.22 | % | (10.46 | )% | 35.05 | % | ||||||||||
RATIOS BASED ON AVERAGE NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: | ||||||||||||||||||||
Investment advisory fee expense2 | 0.46 | % | 0.54 | % | 0.56 | % | 0.86 | % | 0.11 | % | ||||||||||
Other operating expenses | 0.15 | % | 0.25 | % | 0.15 | % | 0.12 | % | 0.12 | % | ||||||||||
Total expenses (net)3 | 0.61 | % | 0.79 | % | 0.71 | % | 0.98 | % | 0.23 | % | ||||||||||
Expenses net of fee waivers and excluding interest expense | 0.55 | % | 0.65 | % | 0.68 | % | 0.98 | % | 0.23 | % | ||||||||||
Expenses prior to fee waivers and balance credits | 0.61 | % | 0.79 | % | 0.71 | % | 0.98 | % | 0.23 | % | ||||||||||
Expenses prior to fee waivers | 0.61 | % | 0.79 | % | 0.71 | % | 0.98 | % | 0.23 | % | ||||||||||
Net investment income (loss) | 0.72 | % | 0.70 | % | 1.57 | % | 0.63 | % | 1.69 | % | ||||||||||
SUPPLEMENTAL DATA: | ||||||||||||||||||||
Net Assets Applicable to Common Stockholders, End of Period (in thousands) | $ | 1,231,955 | $ | 1,307,829 | $ | 1,082,426 | $ | 966,640 | $ | 1,105,879 | ||||||||||
Liquidation Value of Preferred Stock, End of Period (in thousands) | $ | 220,000 | $ | 220,000 | ||||||||||||||||
Portfolio Turnover Rate | 40 | % | 33 | % | 25 | % | 26 | % | 30 | % | ||||||||||
PREFERRED STOCK: | ||||||||||||||||||||
Total shares outstanding | 8,800,000 | 8,800,000 | ||||||||||||||||||
Asset coverage per share | $ | 134.88 | $ | 150.67 | ||||||||||||||||
Liquidation preference per share | $ | 25.00 | $ | 25.00 | ||||||||||||||||
Average month-end market value per share | $ | 25.37 | $ | 25.06 | ||||||||||||||||
REVOLVING CREDIT AGREEMENT: | ||||||||||||||||||||
Asset coverage | 1860 | % | 1289 | % | 822 | % | ||||||||||||||
Asset coverage per $1,000 | $ | 18,599 | $ | 12,889 | $ | 8,216 | ||||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 25 |
Royce Value Trust
Notes to Financial Statements
Level 1 | quoted
prices in active markets for identical securities. |
|
Level 2 | other
significant observable inputs (including quoted prices for similar securities, foreign
securities that may be fair valued and repurchase agreements). The table below includes
all Level 2 securities. Level 2 securities with values based on quoted prices for
similar securities are noted in the Schedule of Investments. |
|
Level 3 | significant
unobservable inputs (including last trade price before trading was suspended, or
at a discount thereto for lack of marketability or otherwise, market price information
regarding other securities, information received from the company and/or published
documents, including SEC filings and financial statements, or other publicly available
information). |
LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | ||||||||||
Common Stocks | $1,098,540,403 | $168,146,367 | $270,001 | $1,266,956,771 | |||||||||
Preferred Stocks | | | 1,216,350 | 1,216,350 | |||||||||
Cash Equivalents | | 29,555,000 | | 29,555,000 | |||||||||
For the year ended December 31, 2014, certain securities have transferred in and out of Level
1 and Level 2 measurements. The Fund recognizes transfers between levels as of the
end of the reporting period. At December 31, 2014, securities valued at $85,574,953
were transferred from Level 1 to Level 2 within the fair value hierarchy. |
26 | 2014 Annual Report to Stockholders |
Royce Value Trust
Notes to Financial Statements (continued)
VALUATION OF INVESTMENTS (continued):
Level 3 Reconciliation:
REALIZED AND UNREALIZED | |||||||||||||
BALANCE AS OF 12/31/13 | SALES | GAIN (LOSS)1 | BALANCE AS OF 12/31/14 | ||||||||||
Common Stocks | $ 131,709 | $ | $ 138,292 | $ 270,001 | |||||||||
Preferred Stocks | 1,578,555 | 72,406 | (289,799) | 1,216,350 | |||||||||
2014 Annual Report to Stockholders | 27 |
Royce Value Trust
Notes to Financial Statements (continued)
28 | 2014 Annual Report to Stockholders |
Royce Value Trust
Notes to Financial Statements (continued)
DISTRIBUTIONS PAID FROM: | 2014 | 2013 | ||||||
Ordinary income | $ | 29,761,905 | $ | 32,048,727 | ||||
Long-term capital gain | 103,510,136 | 123,982,076 | ||||||
$ | 133,272,041 | $ | 156,030,803 | |||||
Net unrealized appreciation (depreciation) | $ | 295,416,299 | ||
Post October loss* | (22,786 | ) | ||
Undistributed ordinary income | 3,495,452 | |||
Undistributed capital gains | 45,086,193 | |||
$ | 343,975,158 | |||
UNDISTRIBUTED NET | ACCUMULATED NET | ||
INVESTMENT INCOME | REALIZED GAIN (LOSS) | ||
$(3,283,348) | $3,283,348 | ||
2014 Annual Report to Stockholders | 29 |
Royce Value Trust
Notes to Financial Statements (continued)
SHARES | MARKET VALUE | COST OF | COST OF | REALIZED | DIVIDEND | SHARES | MARKET VALUE | |||||||||||||||
AFFILIATED COMPANY | 12/31/13 | 12/31/13 | PURCHASES | SALES | GAIN (LOSS) | INCOME | 12/31/14 | 12/31/14 | ||||||||||||||
Stanley Furniture | 50,000 | $ 192,000 | $2,549,923 | | | | 1,012,235 | $2,773,524 | ||||||||||||||
Timberland Bancorp | 444,200 | 4,273,204 | | | | $79,956 | 444,200 | 4,708,520 | ||||||||||||||
$4,465,204 | $79,956 | $7,482,044 | ||||||||||||||||||||
30 | 2014 Annual Report to Stockholders |
Royce Value Trust
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
of
Royce Value Trust, Inc.
New York, New York
We have audited the accompanying statement of assets and liabilities of Royce Value Trust, Inc., (Fund) including the schedule of investments, as of December 31, 2014, and the related statement of operations and statement of cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Royce Value Trust, Inc. at December 31, 2014, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
TAIT, WELLER, & BAKER LLP
Philadelphia, Pennsylvania
February 23,
2015
2014 Annual Report to Stockholders | 31 |
Royce Micro-Cap Trust |
Schedule of Investments | ||||||
Common Stocks 109.4% | ||||||
SHARES | VALUE | |||||
CONSUMER DISCRETIONARY 18.9% | ||||||
AUTO COMPONENTS - 2.6% | ||||||
China Zenix Auto International ADR 1 |
32,182 | $ | 46,020 | |||
68,300 | 3,488,081 | |||||
Fuel Systems Solutions 1 |
171,000 | 1,870,740 | ||||
Global & Yuasa Battery |
53,800 | 1,932,315 | ||||
Motorcar Parts of America 1 |
50,000 | 1,554,500 | ||||
Spartan Motors |
55,500 | 291,930 | ||||
Standard Motor Products |
26,000 | 991,120 | ||||
10,174,706 | ||||||
DISTRIBUTORS - 0.9% | ||||||
Core-Mark Holding Company |
25,200 | 1,560,636 | ||||
Weyco Group |
59,600 | 1,768,332 | ||||
3,328,968 | ||||||
DIVERSIFIED CONSUMER SERVICES - 1.8% | ||||||
American Public Education 1 |
61,700 | 2,274,879 | ||||
Capella Education |
2,700 | 207,792 | ||||
Collectors Universe |
76,000 | 1,585,360 | ||||
45,100 | 1,611,874 | |||||
Lincoln Educational Services |
476,300 | 1,343,166 | ||||
7,023,071 | ||||||
HOTELS, RESTAURANTS & LEISURE - 0.5% | ||||||
Monarch Casino & Resort 1 |
31,997 | 530,830 | ||||
MTY Food Group |
41,700 | 1,209,939 | ||||
1,740,769 | ||||||
HOUSEHOLD DURABLES - 3.7% | ||||||
Cavco Industries 1 |
3,091 | 245,024 | ||||
Ethan Allen Interiors 2 |
73,400 | 2,273,198 | ||||
Flexsteel Industries 2 |
90,600 | 2,921,850 | ||||
15,000 | 520,800 | |||||
Lifetime Brands |
188,494 | 3,242,097 | ||||
Skullcandy 1 |
78,200 | 718,658 | ||||
Skyline Corporation 1 |
183,400 | 742,770 | ||||
Stanley Furniture 1 |
93,468 | 256,102 | ||||
235,218 | 750,345 | |||||
Universal Electronics 1 |
39,900 | 2,594,697 | ||||
14,265,541 | ||||||
INTERNET & CATALOG RETAIL - 1.0% | ||||||
41,600 | 1,498,016 | |||||
FTD Companies 1 |
69,700 | 2,426,954 | ||||
3,924,970 | ||||||
LEISURE PRODUCTS - 1.9% | ||||||
Arctic Cat |
31,500 | 1,118,250 | ||||
384,300 | 1,813,896 | |||||
Nautilus 1 |
195,900 | 2,973,762 | ||||
155,900 | 1,476,373 | |||||
7,382,281 | ||||||
MEDIA - 1.4% | ||||||
Rentrak Corporation 1 |
25,800 | 1,878,756 | ||||
Saga Communications Cl. A |
12,100 | 526,108 | ||||
Value Line |
169,000 | 2,813,850 | ||||
5,218,714 | ||||||
MULTILINE RETAIL - 0.1% | ||||||
Tuesday Morning 1 |
23,600 | 512,120 | ||||
SPECIALTY RETAIL - 2.9% | ||||||
Aeropostale 1 |
165,000 | 382,800 | ||||
33,500 | 1,788,230 | |||||
Destination Maternity |
206,100 | 3,287,295 | ||||
Kirklands 1 |
12,300 | 290,772 | ||||
Le Chateau Cl. A 1 |
685,000 | 471,682 | ||||
Lewis Group |
57,000 | 364,723 | ||||
Shoe Carnival 2 |
31,628 | 812,523 | ||||
Stage Stores 2 |
25,000 | 517,500 | ||||
44,000 | 594,000 | |||||
Tandy Leather Factory |
44,233 | 399,424 | ||||
TravelCenters of America LLC 1 |
106,363 | 1,342,301 | ||||
West Marine 1 |
86,000 | 1,111,120 | ||||
11,362,370 | ||||||
TEXTILES, APPAREL & LUXURY GOODS - 2.1% | ||||||
Crown Crafts |
216,259 | 1,665,194 | ||||
Culp |
70,500 | 1,528,440 | ||||
J.G. Boswell Company 4 |
2,490 | 2,345,605 | ||||
Movado Group 2 |
44,374 | 1,258,891 | ||||
YGM Trading |
781,000 | 1,415,271 | ||||
8,213,401 | ||||||
Total (Cost $58,260,440) | 73,146,911 | |||||
CONSUMER STAPLES 1.8% | ||||||
BEVERAGES - 0.1% | ||||||
58,124 | 546,365 | |||||
FOOD PRODUCTS - 1.5% | ||||||
Alico |
20,000 | 1,000,600 | ||||
Farmer Bros. 1 |
40,500 | 1,192,725 | ||||
John B. Sanfilippo & Son |
3,500 | 159,250 | ||||
Seneca Foods Cl. A 1 |
51,400 | 1,389,342 | ||||
Seneca Foods Cl. B 1 |
42,500 | 1,368,500 | ||||
SunOpta 1 |
48,900 | 579,465 | ||||
806,207 | 306,359 | |||||
5,996,241 | ||||||
PERSONAL PRODUCTS - 0.2% | ||||||
Inter Parfums 2 |
24,800 | 680,760 | ||||
Total (Cost $4,272,416) | 7,223,366 | |||||
ENERGY 2.4% | ||||||
ENERGY EQUIPMENT & SERVICES - 1.1% | ||||||
Dawson Geophysical |
53,213 | 650,795 | ||||
9,500 | 251,750 | |||||
Gulf Island Fabrication |
29,116 | 564,559 | ||||
38,100 | 850,392 | |||||
Newpark Resources 1 |
63,400 | 604,836 | ||||
North American Energy Partners |
50,000 | 157,000 | ||||
57,500 | 318,550 | |||||
Tesco Corporation 2 |
58,000 | 743,560 | ||||
4,141,442 | ||||||
OIL, GAS & CONSUMABLE FUELS - 1.3% | ||||||
12,000 | 76,680 | |||||
Harvest Natural Resources 1 |
13,176 | 23,849 | ||||
Permian Basin Royalty Trust |
406,333 | 3,880,480 | ||||
102,100 | 134,772 | |||||
Sprott Resource 1 |
91,800 | 148,549 | ||||
StealthGas 1 |
74,500 | 470,095 | ||||
79,100 | 360,696 | |||||
5,095,121 | ||||||
Total (Cost $10,971,336) | 9,236,563 | |||||
FINANCIALS 18.0% | ||||||
BANKS - 1.9% | ||||||
Bank of N.T. Butterfield & Son |
438,100 | 871,819 | ||||
BCB Holdings 1 |
906,207 | 169,490 |
32 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Schedule of Investments (continued) | ||||||
SHARES | VALUE | |||||
FINANCIALS (continued) | ||||||
BANKS (continued) | ||||||
Bryn Mawr Bank |
25,000 | $ | 782,500 | |||
Chemung Financial |
31,000 | 858,390 | ||||
Fauquier Bankshares 2 |
140,200 | 2,646,976 | ||||
First Bancorp (The) |
40,200 | 727,218 | ||||
First Internet Bancorp |
28,500 | 477,090 | ||||
Peapack-Gladstone Financial |
53,606 | 994,927 | ||||
7,528,410 | ||||||
CAPITAL MARKETS - 8.6% | ||||||
ASA Gold and Precious Metals |
206,150 | 2,084,177 | ||||
Cowen Group 1 |
353,900 | 1,698,720 | ||||
Diamond Hill Investment Group |
27,879 | 3,848,417 | ||||
Equity Trustees |
42,229 | 665,624 | ||||
FBR & Co. 1 |
51,684 | 1,270,910 | ||||
Fiera Capital Cl. A |
78,000 | 852,642 | ||||
60,980 | 1,010,439 | |||||
26,310 | 541,197 | |||||
JZ Capital Partners |
253,999 | 1,593,464 | ||||
Medley Management Cl. A |
145,800 | 2,143,260 | ||||
MVC Capital 2 |
387,400 | 3,808,142 | ||||
78,100 | 1,152,756 | |||||
OHA Investment |
230,820 | 1,082,546 | ||||
Queen City Investments 4 |
948 | 1,033,320 | ||||
RHJ International 1 |
230,000 | 1,284,784 | ||||
Silvercrest Asset Management Group Cl. A |
228,600 | 3,577,590 | ||||
Sprott |
622,200 | 1,306,738 | ||||
U.S. Global Investors Cl. A |
651,254 | 2,018,887 | ||||
Urbana Corporation |
237,600 | 409,020 | ||||
Westwood Holdings Group 2 |
29,800 | 1,842,236 | ||||
33,224,869 | ||||||
CONSUMER FINANCE - 1.3% | ||||||
234,400 | 2,754,200 | |||||
J.G. Wentworth Company Cl. A 1 |
160,000 | 1,705,600 | ||||
Regional Management 1 |
51,400 | 812,634 | ||||
5,272,434 | ||||||
DIVERSIFIED FINANCIAL SERVICES - 1.4% | ||||||
Banca Finnat Euramerica |
1,310,000 | 640,355 | ||||
GAIN Capital Holdings |
25,000 | 225,500 | ||||
HF2 Financial Management Cl. A 1 |
292,160 | 3,029,699 | ||||
45,700 | 861,445 | |||||
Warsaw Stock Exchange |
52,900 | 681,632 | ||||
5,438,631 | ||||||
INSURANCE - 2.2% | ||||||
Hallmark Financial Services 1 |
120,782 | 1,460,255 | ||||
Independence Holding Company |
105,380 | 1,470,051 | ||||
National Western Life Insurance Cl. A 2 |
7,033 | 1,893,635 | ||||
109,264 | 2,427,846 | |||||
United Fire Group 2 |
38,603 | 1,147,667 | ||||
8,399,454 | ||||||
REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.4% | ||||||
BRT Realty Trust 1 |
230,331 | 1,607,710 | ||||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 2.0% | ||||||
AV Homes 1 |
36,400 | 530,348 | ||||
Consolidated-Tomoka Land |
28,844 | 1,609,495 | ||||
53,000 | 816,200 | |||||
Griffin Land & Nurseries |
47,746 | 1,435,245 | ||||
112,162 | 3,304,293 | |||||
Tejon Ranch (Warrants) 1 |
13,146 | 23,005 | ||||
7,718,586 | ||||||
THRIFTS & MORTGAGE FINANCE - 0.2% | ||||||
Alliance Bancorp, Inc. of Pennsylvania |
40,162 | 716,892 | ||||
Total (Cost $62,464,037) | 69,906,986 | |||||
HEALTH CARE 10.4% | ||||||
BIOTECHNOLOGY - 0.7% | ||||||
134,102 | 921,281 | |||||
ArQule 1 |
70,000 | 85,400 | ||||
Celsion Corporation 1 |
115,555 | 269,243 | ||||
ChemoCentryx 1 |
70,000 | 478,100 | ||||
Coronado Biosciences 1 |
297,400 | 725,656 | ||||
Rigel Pharmaceuticals 1 |
152,392 | 345,930 | ||||
2,825,610 | ||||||
HEALTH CARE EQUIPMENT & SUPPLIES - 5.1% | ||||||
Allied Healthcare Products 1 |
61,772 | 113,661 | ||||
70,163 | 1,333,799 | |||||
Atrion Corporation |
12,132 | 4,125,001 | ||||
140,000 | 873,600 | |||||
CryoLife |
54,473 | 617,179 | ||||
Cynosure Cl. A 1 |
6,500 | 178,230 | ||||
Derma Sciences 1 |
74,958 | 697,859 | ||||
137,200 | 3,233,804 | |||||
Invacare Corporation 2 |
126,300 | 2,116,788 | ||||
Meridian Bioscience |
71,500 | 1,176,890 | ||||
RTI Surgical 1 |
10,000 | 52,000 | ||||
STRATEC Biomedical |
14,000 | 774,800 | ||||
156,435 | 680,492 | |||||
Syneron Medical 1 |
69,200 | 645,636 | ||||
Trinity Biotech ADR Cl. A |
55,800 | 977,058 | ||||
Utah Medical Products |
38,100 | 2,287,905 | ||||
19,884,702 | ||||||
HEALTH CARE PROVIDERS & SERVICES - 2.7% | ||||||
Addus HomeCare 1 |
66,000 | 1,601,820 | ||||
14,900 | 478,737 | |||||
40,000 | 1,488,800 | |||||
Cross Country Healthcare 1 |
250,498 | 3,126,215 | ||||
PDI 1 |
65,383 | 117,035 | ||||
40,000 | 828,400 | |||||
Psychemedics Corporation |
77,900 | 1,173,953 | ||||
U.S. Physical Therapy |
33,257 | 1,395,464 | ||||
10,210,424 | ||||||
HEALTH CARE TECHNOLOGY - 0.3% | ||||||
Computer Programs and Systems |
5,000 | 303,750 | ||||
HealthStream 1 |
24,227 | 714,212 | ||||
1,017,962 | ||||||
PHARMACEUTICALS - 1.6% | ||||||
80,000 | 491,200 | |||||
87,000 | 2,679,600 | |||||
129,000 | 1,286,130 | |||||
124,000 | 1,850,080 | |||||
6,307,010 | ||||||
Total (Cost $30,358,622) | 40,245,708 | |||||
INDUSTRIALS 23.1% | ||||||
AEROSPACE & DEFENSE - 1.8% | ||||||
Astronics Corporation 1 |
6,444 | 356,418 | ||||
764 | 41,997 | |||||
Breeze-Eastern Corporation 1 |
24,233 | 245,965 | ||||
CPI Aerostructures 1 |
81,021 | 849,910 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 33 |
Royce Micro-Cap Trust |
Schedule of Investments (continued) | ||||||
SHARES | VALUE | |||||
INDUSTRIALS (continued) | ||||||
AEROSPACE & DEFENSE (continued) | ||||||
Ducommun 1 |
93,800 | $ | 2,371,264 | |||
Innovative Solutions and Support 1 |
142,828 | 454,193 | ||||
Kratos Defense & Security Solutions 1 |
72,324 | 363,066 | ||||
SIFCO Industries |
45,800 | 1,335,070 | ||||
35,700 | 1,011,738 | |||||
7,029,621 | ||||||
AIR FREIGHT & LOGISTICS - 0.1% | ||||||
Echo Global Logistics 1 |
16,100 | 470,120 | ||||
BUILDING PRODUCTS - 2.0% | ||||||
AAON 2 |
30,300 | 678,417 | ||||
46,600 | 1,884,504 | |||||
Apogee Enterprises |
31,900 | 1,351,603 | ||||
Burnham Holdings Cl. A 4 |
117,000 | 2,340,000 | ||||
Griffon Corporation 2 |
36,300 | 482,790 | ||||
Insteel Industries |
39,000 | 919,620 | ||||
7,656,934 | ||||||
COMMERCIAL SERVICES & SUPPLIES - 1.3% | ||||||
CompX International Cl. A |
107,500 | 1,268,500 | ||||
Heritage-Crystal Clean 1 |
226,377 | 2,791,228 | ||||
Intersections |
88,900 | 347,599 | ||||
17,500 | 708,050 | |||||
5,115,377 | ||||||
CONSTRUCTION & ENGINEERING - 3.0% | ||||||
Ameresco Cl. A 1 |
295,700 | 2,069,900 | ||||
Integrated Electrical Services 1 |
570,682 | 4,451,320 | ||||
50,000 | 477,000 | |||||
107,100 | 2,934,540 | |||||
Orbit Garant Drilling 1 |
1,512,500 | 1,809,584 | ||||
11,742,344 | ||||||
ELECTRICAL EQUIPMENT - 1.6% | ||||||
AZZ |
16,494 | 773,899 | ||||
Encore Wire 2 |
15,000 | 559,950 | ||||
Global Power Equipment Group |
60,449 | 834,801 | ||||
LSI Industries |
93,012 | 631,551 | ||||
Orion Energy Systems 1 |
100,000 | 550,000 | ||||
Powell Industries |
28,400 | 1,393,588 | ||||
Preformed Line Products |
18,143 | 991,152 | ||||
Vicor 1 |
30,000 | 363,000 | ||||
6,097,941 | ||||||
INDUSTRIAL CONGLOMERATES - 0.6% | ||||||
Raven Industries 2 |
93,400 | 2,335,000 | ||||
MACHINERY - 6.3% | ||||||
Alamo Group |
14,200 | 687,848 | ||||
39,250 | 397,995 | |||||
CIRCOR International 2 |
1,100 | 66,308 | ||||
Columbus McKinnon |
24,350 | 682,774 | ||||
Douglas Dynamics |
50,000 | 1,071,500 | ||||
Eastern Company (The) |
39,750 | 681,712 | ||||
21,200 | 111,724 | |||||
59,200 | 2,875,344 | |||||
Graham Corporation 2 |
107,050 | 3,079,829 | ||||
Hurco Companies |
57,266 | 1,952,198 | ||||
Kadant |
24,400 | 1,041,636 | ||||
Luxfer Holdings ADR |
45,100 | 673,343 | ||||
NN |
164,300 | 3,378,008 | ||||
Pfeiffer Vacuum Technology |
21,000 | 1,743,167 | ||||
PMFG 1 |
223,245 | 1,167,571 | ||||
Sun Hydraulics |
17,100 | 673,398 |
37,200 | 2,684,724 | ||||||||
125,500 | 1,551,180 | ||||||||
24,520,259 | |||||||||
MARINE - 0.3% | |||||||||
Clarkson |
32,700 | 965,226 | |||||||
PROFESSIONAL SERVICES - 2.3% | |||||||||
58,800 | 996,072 | ||||||||
CBIZ 1 |
47,000 | 402,320 | |||||||
Franklin Covey 1 |
84,100 | 1,628,176 | |||||||
GP Strategies 1 |
2,000 | 67,860 | |||||||
Heidrick & Struggles International |
73,468 | 1,693,437 | |||||||
ICF International 1 |
15,700 | 643,386 | |||||||
Kforce 2 |
71,000 | 1,713,230 | |||||||
Mistras Group 1 |
4,100 | 75,153 | |||||||
Resources Connection |
20,000 | 329,000 | |||||||
RPX Corporation 1 |
104,900 | 1,445,522 | |||||||
8,994,156 | |||||||||
ROAD & RAIL - 2.1% | |||||||||
109,081 | 4,277,066 | ||||||||
Marten Transport |
5,200 | 113,672 | |||||||
Universal Truckload Services 2 |
134,200 | 3,826,042 | |||||||
8,216,780 | |||||||||
TRADING COMPANIES & DISTRIBUTORS - 1.4% | |||||||||
Aceto Corporation |
72,219 | 1,567,152 | |||||||
Houston Wire & Cable |
162,075 | 1,936,796 | |||||||
Lawson Products 1 |
50,269 | 1,335,648 | |||||||
MFC Industrial |
70,000 | 495,600 | |||||||
5,335,196 | |||||||||
TRANSPORTATION INFRASTRUCTURE - 0.3% | |||||||||
Touax |
53,197 | 947,166 | |||||||
Total (Cost $62,550,925) | 89,426,120 | ||||||||
INFORMATION TECHNOLOGY 23.0% | |||||||||
COMMUNICATIONS EQUIPMENT - 1.4% | |||||||||
7,500 | 84,150 | ||||||||
Bel Fuse Cl. A |
67,705 | 1,641,169 | |||||||
CalAmp Corporation 1 |
60,200 | 1,101,660 | |||||||
Ceragon Networks 1 |
29,700 | 29,997 | |||||||
ClearOne |
25,000 | 241,500 | |||||||
Comtech Telecommunications |
17,300 | 545,296 | |||||||
Extreme Networks 1 |
320,000 | 1,129,600 | |||||||
KVH Industries 1 |
8,900 | 112,585 | |||||||
PCTEL |
44,100 | 381,906 | |||||||
Sandvine Corporation 1 |
22,700 | 63,892 | |||||||
UTStarcom Holdings 1 |
75,200 | 212,816 | |||||||
5,544,571 | |||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 7.7% | |||||||||
Agilysys 1 |
170,587 | 2,147,690 | |||||||
Deswell Industries |
544,371 | 979,868 | |||||||
DTS 1 |
66,500 | 2,044,875 | |||||||
Identiv 1 |
39,900 | 554,211 | |||||||
Inficon Holding |
3,600 | 1,116,153 | |||||||
LRAD Corporation 1 |
401,756 | 1,084,741 | |||||||
Mercury Systems 1 |
10,900 | 151,728 | |||||||
Mesa Laboratories |
42,789 | 3,308,018 | |||||||
236,623 | 4,521,865 | ||||||||
Orbotech 1 |
127,800 | 1,891,440 | |||||||
PC Connection |
43,716 | 1,073,228 |
34 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Schedule of Investments (continued) | ||||||
SHARES | VALUE | |||||
INFORMATION TECHNOLOGY (continued) | ||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (continued) | ||||||
251,793 | $ | 276,972 | ||||
Richardson Electronics |
330,900 | 3,309,000 | ||||
Rofin-Sinar Technologies 1 |
71,100 | 2,045,547 | ||||
14,700 | 1,197,168 | |||||
179,400 | 1,350,882 | |||||
Vishay Precision Group 1 |
154,000 | 2,642,640 | ||||
29,696,026 | ||||||
INTERNET SOFTWARE & SERVICES - 4.5% | ||||||
284,254 | 2,353,623 | |||||
10,253,000 | 1,465,138 | |||||
177,960 | 2,354,411 | |||||
LivePerson 1 |
3,700 | 52,170 | ||||
Marchex Cl. B |
95,000 | 436,050 | ||||
QuinStreet 1 |
387,700 | 2,353,339 | ||||
RealNetworks 1 |
244,000 | 1,717,760 | ||||
Reis |
25,000 | 654,250 | ||||
Stamps.com 1 |
3,100 | 148,769 | ||||
Support.com 1 |
1,212,763 | 2,558,930 | ||||
66,700 | 1,898,949 | |||||
United Online 1 |
58,400 | 849,720 | ||||
World Energy Solutions 1 |
100,000 | 550,000 | ||||
17,393,109 | ||||||
IT SERVICES - 1.5% | ||||||
Cass Information Systems 2 |
29,150 | 1,552,238 | ||||
Computer Task Group 2 |
189,900 | 1,809,747 | ||||
Hackett Group (The) |
103,500 | 909,765 | ||||
Higher One Holdings 1 |
17,500 | 73,675 | ||||
Innodata 1 |
437,275 | 1,276,843 | ||||
Sykes Enterprises 1 |
6,300 | 147,861 | ||||
5,770,129 | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 4.4% | ||||||
49,900 | 1,182,630 | |||||
Amtech Systems 1 |
153,500 | 1,558,025 | ||||
Brooks Automation |
153,600 | 1,958,400 | ||||
Cascade Microtech 1 |
29,300 | 428,073 | ||||
CEVA 1 |
98,122 | 1,779,933 | ||||
Entropic Communications 1 |
235,247 | 595,175 | ||||
Exar Corporation 1 |
233,208 | 2,378,722 | ||||
Integrated Silicon Solution |
26,967 | 446,843 | ||||
IXYS Corporation |
18,800 | 236,880 | ||||
Kulicke & Soffa Industries 1 |
67,900 | 981,834 | ||||
402,275 | 752,254 | |||||
Nanometrics 1 |
50,800 | 854,456 | ||||
PDF Solutions 1 |
6,050 | 89,903 | ||||
Photronics 1 |
177,000 | 1,470,870 | ||||
76,899 | 351,428 | |||||
52,500 | 537,075 | |||||
Silicon Image 1 |
60,600 | 334,512 | ||||
Silicon Motion Technology ADR 2 |
18,200 | 430,430 | ||||
Ultra Clean Holdings 1 |
68,800 | 638,464 | ||||
Xcerra Corporation 1 |
22,400 | 205,184 | ||||
17,211,091 | ||||||
SOFTWARE - 1.6% | ||||||
American Software Cl. A |
170,252 | 1,550,996 | ||||
BSQUARE Corporation 1 |
98,675 | 448,971 | ||||
Envivio 1 |
489,376 | 655,764 | ||||
31,299 | 2,369,021 | |||||
SeaChange International 1 |
204,000 | 1,301,520 | ||||
6,326,272 | ||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.9% | ||||||
51,900 | 737,499 | |||||
Intevac 1 |
279,500 | 2,171,715 | ||||
Kortek |
135,007 | 1,218,828 | ||||
Qumu Corporation 1 |
202,200 | 2,764,074 | ||||
TransAct Technologies |
78,600 | 422,082 | ||||
7,314,198 | ||||||
Total (Cost $78,794,174) | 89,255,396 | |||||
MATERIALS 6.9% | ||||||
CHEMICALS - 2.3% | ||||||
Balchem Corporation 2 |
11,775 | 784,686 | ||||
FutureFuel Corporation |
126,700 | 1,649,634 | ||||
Hawkins 2 |
29,697 | 1,286,771 | ||||
KMG Chemicals |
58,300 | 1,166,000 | ||||
Landec Corporation 1 |
75,610 | 1,044,174 | ||||
Quaker Chemical |
30,400 | 2,798,016 | ||||
8,729,281 | ||||||
CONSTRUCTION MATERIALS - 0.6% | ||||||
Ash Grove Cement 4 |
8,000 | 1,612,000 | ||||
Monarch Cement 4 |
28,803 | 792,082 | ||||
2,404,082 | ||||||
CONTAINERS & PACKAGING - 0.3% | ||||||
UFP Technologies 1 |
44,336 | 1,090,001 | ||||
METALS & MINING - 3.7% | ||||||
AuRico Gold |
91,250 | 299,300 | ||||
Central Steel & Wire 4 |
788 | 588,833 | ||||
Comstock Mining 1 |
565,000 | 429,400 | ||||
Exeter Resource 1 |
196,500 | 115,876 | ||||
Geodrill 1 |
252,300 | 125,955 | ||||
Haynes International 2 |
48,801 | 2,366,848 | ||||
Hecla Mining |
44,518 | 124,205 | ||||
11,900 | 188,377 | |||||
Imdex 1 |
633,900 | 245,766 | ||||
MAG Silver 1 |
96,050 | 782,808 | ||||
Major Drilling Group International |
460,857 | 2,265,014 | ||||
Materion Corporation |
50,000 | 1,761,500 | ||||
Midway Gold 1 |
345,000 | 255,300 | ||||
Olympic Steel |
103,100 | 1,833,118 | ||||
Pretium Resources 1 |
90,000 | 519,797 | ||||
25,000 | 631,500 | |||||
Universal Stainless & Alloy Products 1 |
74,800 | 1,881,220 | ||||
14,414,817 | ||||||
PAPER & FOREST PRODUCTS - 0.0% | ||||||
1,500,000 | 19,343 | |||||
Total (Cost $25,330,529) | 26,657,524 | |||||
UTILITIES 0.0% | ||||||
INDEPENDENT POWER & RENEWABLE ELECTRICITY PRODUCER - 0.0% | ||||||
Alterra Power 1 |
450,000 | 125,882 | ||||
Total (Cost $200,516) | 125,882 | |||||
MISCELLANEOUS6 4.9% | ||||||
Total (Cost $19,329,253) | 18,888,585 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $352,532,248) | 424,113,041 | |||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 35 |
Royce Micro-Cap Trust | December 31, 2014 |
Schedule of Investments (continued) | ||||||
SHARES | VALUE | |||||
PREFERRED STOCK 0.3% | ||||||
Seneca Foods Conv.1,4 |
45,409 | $ | 1,181,996 | |||
(Cost $578,719) |
1,181,996 | |||||
REPURCHASE AGREEMENT 0.7% | ||||||
Fixed Income Clearing Corporation, 0.00% dated 12/31/14, due 1/2/15, maturity value $2,656,000 (collateralized by obligations of various U.S. Government Agencies, 0.75% due 10/31/17, valued at $2,709,563) | ||||||
(Cost $2,656,000) | 2,656,000 | |||||
TOTAL INVESTMENTS 110.4% | ||||||
(Cost $355,766,967) | 427,951,037 | |||||
LIABILITIES LESS CASH AND OTHER ASSETS (10.4)% | (40,463,062 | ) | ||||
NET ASSETS 100.0% | $ | 387,487,975 | ||||
36 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Micro-Cap Trust | December 31, 2014 |
Statement of Assets and Liabilities | ||||
ASSETS: | ||||
Total investments at value | $ | 425,295,037 | ||
Repurchase agreements (at cost and value) | 2,656,000 | |||
Cash and foreign currency | 186 | |||
Receivable for investments sold | 20,320,036 | |||
Receivable for dividends and interest | 340,072 | |||
Prepaid expenses and other assets | 25,699 | |||
Total Assets | 448,637,030 | |||
LIABILITIES: | ||||
Revolving credit agreement | 60,000,000 | |||
Payable for investments purchased | 665,684 | |||
Payable for investment advisory fee | 351,353 | |||
Payable for directors fees | 23,147 | |||
Payable for interest expense | 3,962 | |||
Accrued expenses | 104,909 | |||
Total Liabilities | 61,149,055 | |||
Net Assets | $ | 387,487,975 | ||
ANALYSIS OF NET ASSETS: | ||||
Paid-in capital - $0.001 par value per share; 34,185,464 shares outstanding (150,000,000 shares authorized) | $ | 289,687,913 | ||
Undistributed net investment income (loss) | (1,763,387 | ) | ||
Accumulated net realized gain (loss) on investments and foreign currency | 27,385,489 | |||
Net unrealized appreciation (depreciation) on investments and foreign currency | 72,177,960 | |||
Net Assets (net asset value per share - $11.33) | $ | 387,487,975 | ||
Investments at identified cost | $ | 353,110,967 | ||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 37 |
Royce Micro-Cap Trust | Year Ended December 31, 2014 |
Statement of Operations | ||||
INVESTMENT INCOME: | ||||
INCOME: | ||||
Dividends | $ | 4,549,037 | ||
Foreign withholding tax | (91,626 | ) | ||
Rehypothecation income | 116,882 | |||
Total income | 4,574,293 | |||
EXPENSES: | ||||
Investment advisory fees | 3,921,649 | |||
Interest expense | 541,552 | |||
Stockholder reports | 150,861 | |||
Custody and transfer agent fees | 98,826 | |||
Directors fees | 83,171 | |||
Professional fees | 53,558 | |||
Administrative and office facilities | 48,144 | |||
Other expenses | 59,471 | |||
Total expenses | 4,957,232 | |||
Compensating balance credits | (7 | ) | ||
Net expenses | 4,957,225 | |||
Net investment income (loss) | (382,932 | ) | ||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | ||||
NET REALIZED GAIN (LOSS): | ||||
Investments in Non-Affiliated Companies | 92,315,444 | |||
Investments in Affiliated Companies | 2,201,756 | |||
Foreign currency transactions | (13,142 | ) | ||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | ||||
Investments and foreign currency translations | (85,893,164 | ) | ||
Other assets and liabilities denominated in foreign currency | (9,910 | ) | ||
Net realized and unrealized gain (loss) on investments and foreign currency | 8,600,984 | |||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | 8,218,052 | ||
38 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Micro-Cap Trust
Statement of Changes in Net Assets | ||||||||
YEAR ENDED 12/31/14 | YEAR ENDED 12/31/13 | |||||||
INVESTMENT OPERATIONS: | ||||||||
Net investment income (loss) | $ | (382,932 | ) | $ | 290,965 | |||
Net realized gain (loss) on investments and foreign currency | 94,504,058 | 56,051,091 | ||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (85,903,074 | ) | 80,679,878 | |||||
Net increase (decrease) in net assets from investment operations | 8,218,052 | 137,021,934 | ||||||
DISTRIBUTIONS: | ||||||||
Net investment income | (1,343,094 | ) | (933,371 | ) | ||||
Net realized gain on investments and foreign currency | (89,530,419 | ) | (39,825,192 | ) | ||||
Total distributions | (90,873,513 | ) | (40,758,563 | ) | ||||
CAPITAL STOCK TRANSACTIONS: | ||||||||
Reinvestment of distributions | 37,022,256 | 18,312,849 | ||||||
Total capital stock transactions | 37,022,256 | 18,312,849 | ||||||
Net Increase (Decrease) In Net Assets | (45,633,205 | ) | 114,576,220 | |||||
NET ASSETS: | ||||||||
Beginning of year | 433,121,180 | 318,544,960 | ||||||
End of year (including undistributed net investment income (loss) of $(1,763,387) at 12/31/14 and $(612,327) at 12/31/13) |
$ | 387,487,975 | $ | 433,121,180 | ||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 39 |
Royce Micro-Cap Trust | December 31, 2014 |
Statement of Cash Flows | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net increase (decrease) in net assets from investment operations | $ | 8,218,052 | ||
Adjustments to reconcile net increase (decrease) in net assets from investment operations to net cash provided by operating activities: | ||||
Purchases of long-term investments |
(177,191,465 | ) | ||
Proceeds from sales and maturities of long-term investments |
202,364,759 | |||
Net purchases, sales and maturities of short-term investments |
13,745,000 | |||
Net (increase) decrease in dividends and interest receivable and other assets |
258,460 | |||
Net increase (decrease) in interest expense payable, accrued expenses and other liabilities |
58,681 | |||
Net change in unrealized appreciation (depreciation) on investments |
85,893,164 | |||
Net realized gain on investments and foreign currency |
(94,504,058 | ) | ||
Net cash provided by operating activities | 38,842,593 | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Net increase (decrease) in revolving credit agreement | 15,000,000 | |||
Distributions | (90,873,513 | ) | ||
Reinvestment of distributions | 37,022,256 | |||
Net cash used for financing activities | (38,851,257 | ) | ||
INCREASE (DECREASE) IN CASH: | (8,664 | ) | ||
Cash and foreign currency at beginning of year | 8,850 | |||
Cash and foreign currency at end of year | $ | 186 | ||
40 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Micro-Cap Trust
Financial Highlights |
This table
is presented to show selected data for a share of Common Stock outstanding throughout
each period, and to assist stockholders in evaluating the Funds performance
for the periods presented. |
YEARS ENDED | ||||||||||||||||||||
12/31/14 | 12/31/13 | 12/31/12 | 12/31/11 | 12/31/10 | ||||||||||||||||
Net Asset Value, Beginning of Period | $ | 14.12 | $ | 10.93 | $ | 9.86 | $ | 11.34 | $ | 8.90 | ||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||
Net investment income (loss) | (0.01 | ) | 0.01 | 0.15 | 0.04 | 0.08 | ||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | 0.25 | 4.64 | 1.58 | (0.82 | ) | 2.58 | ||||||||||||||
Total investment operations | 0.24 | 4.65 | 1.73 | (0.78 | ) | 2.66 | ||||||||||||||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: | ||||||||||||||||||||
Net investment income | | | (0.02 | ) | (0.02 | ) | (0.10 | ) | ||||||||||||
Net realized gain on investments and foreign currency | | | (0.09 | ) | (0.11 | ) | (0.03 | ) | ||||||||||||
Total distributions to Preferred Stockholders | | | (0.11 | ) | (0.13 | ) | (0.13 | ) | ||||||||||||
Net Increase (Decrease) in Net Assets Applicable to Common Stockholders from Investment Operations |
0.24 | 4.65 | 1.62 | (0.91 | ) | 2.53 | ||||||||||||||
DISTRIBUTIONS TO COMMON STOCKHOLDERS: | ||||||||||||||||||||
Net investment income | (0.04 | ) | (0.03 | ) | (0.08 | ) | (0.05 | ) | (0.06 | ) | ||||||||||
Net realized gain on investments and foreign currency | (2.86 | ) | (1.35 | ) | (0.43 | ) | (0.24 | ) | (0.02 | ) | ||||||||||
Return of capital | | | | (0.24 | ) | | ||||||||||||||
Total distributions to Common Stockholders | (2.90 | ) | (1.38 | ) | (0.51 | ) | (0.53 | ) | (0.08 | ) | ||||||||||
CAPITAL STOCK TRANSACTIONS: | ||||||||||||||||||||
Effect of reinvestment of distributions by Common Stockholders | (0.13 | ) | (0.08 | ) | (0.04 | ) | (0.04 | ) | (0.01 | ) | ||||||||||
Total capital stock transactions | (0.13 | ) | (0.08 | ) | (0.04 | ) | (0.04 | ) | (0.01 | ) | ||||||||||
Net Asset Value, End of Period | $ | 11.33 | $ | 14.12 | $ | 10.93 | $ | 9.86 | $ | 11.34 | ||||||||||
Market Value, End of Period | $ | 10.08 | $ | 12.61 | $ | 9.45 | $ | 8.77 | $ | 9.80 | ||||||||||
TOTAL RETURN:1 | ||||||||||||||||||||
Net Asset Value | 3.46 | % | 44.66 | % | 17.23 | % | (7.69 | )% | 28.50 | % | ||||||||||
Market Value | 3.06 | % | 49.42 | % | 13.95 | % | (4.99 | )% | 34.10 | % | ||||||||||
RATIOS BASED ON AVERAGE NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: |
||||||||||||||||||||
Investment advisory fee expense2 | 0.93 | % | 0.82 | % | 1.12 | % | 0.97 | % | 0.97 | % | ||||||||||
Other operating expenses | 0.25 | % | 0.29 | % | 0.18 | % | 0.15 | % | 0.15 | % | ||||||||||
Total expenses (net)3 | 1.18 | % | 1.11 | % | 1.30 | % | 1.12 | % | 1.12 | % | ||||||||||
Expenses net of fee waivers and excluding interest expense | 1.05 | % | 0.96 | % | 1.27 | % | 1.12 | % | 1.12 | % | ||||||||||
Expenses prior to fee waivers and balance credits | 1.18 | % | 1.11 | % | 1.32 | % | 1.15 | % | 1.17 | % | ||||||||||
Expenses prior to fee waivers | 1.18 | % | 1.11 | % | 1.32 | % | 1.15 | % | 1.17 | % | ||||||||||
Net investment income (loss) | (0.09 | )% | 0.08 | % | 1.46 | % | 0.40 | % | 0.84 | % | ||||||||||
SUPPLEMENTAL DATA: | ||||||||||||||||||||
Net Assets Applicable to Common Stockholders, End of Period (in thousands) | $ | 387,488 | $ | 433,121 | $ | 318,545 | $ | 279,292 | $ | 311,279 | ||||||||||
Liquidation Value of Preferred Stock, End of Period (in thousands) | $ | 60,000 | $ | 60,000 | ||||||||||||||||
Portfolio Turnover Rate | 41 | % | 29 | % | 28 | % | 30 | % | 27 | % | ||||||||||
PREFERRED STOCK: | ||||||||||||||||||||
Total shares outstanding | 2,400,000 | 2,400,000 | ||||||||||||||||||
Asset coverage per share | $ | 141.37 | $ | 154.70 | ||||||||||||||||
Liquidation preference per share | $ | 25.00 | $ | 25.00 | ||||||||||||||||
Average month-end market value per share | $ | 25.41 | $ | 25.11 | ||||||||||||||||
REVOLVING CREDIT AGREEMENT: | ||||||||||||||||||||
Asset coverage | 746 | % | 1062 | % | 808 | % | ||||||||||||||
Asset coverage per $1,000 | $ | 7,458 | $ | 10,625 | $ | 8,079 | ||||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 41 |
Royce Micro-Cap Trust
Notes to Financial Statements
Level 1 | | quoted prices in active markets for identical securities. | |
Level 2 | | other significant
observable inputs (including quoted prices for similar securities, foreign securities
that may be fair valued and repurchase agreements). The table below includes all
Level 2 securities. Level 2 securities with values based on quoted prices for similar
securities are noted in the Schedule of Investments. |
|
Level 3 | | significant
unobservable inputs (including last trade price before trading was suspended, or
at a discount thereto for lack of marketability or otherwise, market price information
regarding other securities, information received from the company and/or published
documents, including SEC filings and financial statements, or other publicly available
information). |
LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | ||||||||||
Common Stocks | $ | 396,037,385 | $ | 27,749,954 | $ | 325,702 | $ | 424,113,041 | |||||
Preferred Stocks | | 1,181,996 | | 1,181,996 | |||||||||
Cash Equivalents | | 2,656,000 | | 2,656,000 | |||||||||
For the year ended December 31, 2014, certain securities have transferred in and out of Level 1 and Level 2 measurements. The Fund recognizes transfers between levels as of the end of the reporting period. At December 31, 2014, securities valued at $9,556,664 were transferred from Level 1 to Level 2 within the fair value hierarchy.
42 | 2014 Annual Report to Stockholders |
Royce Micro-Cap Trust
Notes to Financial Statements (continued)
VALUATION OF INVESTMENTS (continued):
Level 3 Reconciliation: | |||||||||
BALANCE AS OF 12/31/13 | UNREALIZED GAIN (LOSS)1 | BALANCE AS OF 12/31/14 | |||||||
Common Stocks | $139,469 | $186,233 | $325,702 | ||||||
2014 Annual Report to Stockholders | 43 |
Royce Micro-Cap Trust
Notes to Financial Statements (continued)
44 | 2014 Annual Report to Stockholders |
Royce Micro-Cap Trust
Notes to Financial Statements (continued)
DISTRIBUTIONS PAID FROM: | 2014 | 2013 | ||||
Ordinary income | $15,250,124 | $ 8,388,113 | ||||
Long-term capital gain | 75,623,389 | 32,370,450 | ||||
$90,873,513 | $40,758,563 | |||||
As of December 31, 2014, the tax basis components of distributable earnings included in stockholders equity were as follows:
Net unrealized appreciation (depreciation) | $69,746,151 | ||
Undistributed ordinary income | 3,465,207 | ||
Undistributed capital gains | 24,588,704 | ||
$97,800,062 | |||
UNDISTRIBUTED NET | ACCUMULATED NET | PAID-IN | |||
INVESTMENT INCOME | REALIZED GAIN (LOSS) | CAPITAL | |||
$574,967 | $(793,139) | $218,172 | |||
Management has analyzed the Funds tax positions taken on federal income tax returns for all open tax years (2011-2014) and has concluded that as of December 31, 2014, no provision for income tax is required in the Funds financial statements.
SHARES | MARKET VALUE | COST OF | COST OF | REALIZED | DIVIDEND | SHARES | MARKET VALUE | |||||||||
AFFILIATED COMPANY | 12/31/13 | 12/31/13 | PURCHASES | SALES | GAIN (LOSS) | INCOME | 12/31/14 | 12/31/14 | ||||||||
Integrated Electrical Services1 | 934,200 | $5,035,338 | $1,038,268 | $1,738,234 | $2,201,756 | | ||||||||||
$5,035,338 | $2,201,756 | |||||||||||||||
1 Not an Affiliated Company at December 31, 2014. |
2014 Annual Report to Stockholders | 45 |
Royce Micro-Cap Trust
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
of
Royce Micro-Cap Trust, Inc.
New York, New York
We have audited the accompanying statement of assets and liabilities of Royce Micro-Cap Trust, Inc., (Fund) including the schedule of investments, as of December 31, 2014, and the related statement of operations and statement of cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Royce Micro-Cap Trust, Inc. at December 31, 2014, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
TAIT, WELLER, & BAKER LLP
Philadelphia, Pennsylvania
February 23,
2015
46 | 2014 Annual Report to Stockholders |
Royce Global Value Trust | December 31, 2014 |
Schedule of Investments | ||||||
Common Stocks 100.3% | ||||||
SHARES | VALUE | |||||
ARGENTINA 0.6% | ||||||
BBVA Banco Frances ADR |
44,000 | $ | 606,760 | |||
Total (Cost $277,917) | 606,760 | |||||
AUSTRALIA 1.3% | ||||||
ALS |
45,300 | 196,017 | ||||
Collection House |
137,821 | 232,936 | ||||
Imdex 1 |
1,174,100 | 455,204 | ||||
82,600 | 43,955 | |||||
Programmed Maintenance Services |
71,600 | 149,673 | ||||
TFS Corporation |
85,000 | 106,704 | ||||
Webjet |
31,300 | 73,482 | ||||
Total (Cost $1,916,986) | 1,257,971 | |||||
AUSTRIA 2.0% | ||||||
Mayr-Melnhof Karton |
7,500 | 778,314 | ||||
Semperit AG Holding |
19,300 | 933,929 | ||||
Zumtobel Group |
8,200 | 184,695 | ||||
Total (Cost $1,911,857) | 1,896,938 | |||||
BELGIUM 1.9% | ||||||
20,300 | 352,161 | |||||
1,400 | 44,963 | |||||
RHJ International 1 |
153,000 | 854,661 | ||||
Van de Velde |
10,936 | 515,218 | ||||
Total (Cost $3,492,887) | 1,767,003 | |||||
BERMUDA 1.6% | ||||||
47,500 | 103,116 | |||||
Lazard Cl. A |
29,000 | 1,450,870 | ||||
Total (Cost $1,301,527) | 1,553,986 | |||||
BRAZIL 3.8% | ||||||
Brasil Brokers Participacoes |
292,500 | 278,172 | ||||
Brasil Insurance Participacoes e Administracao |
26,100 | 33,060 | ||||
CETIP - Mercados Organizados |
102,000 | 1,235,331 | ||||
LPS Brasil Consultoria de Imoveis |
152,000 | 367,402 | ||||
MAHLE Metal Leve |
25,000 | 197,078 | ||||
Mills Estruturas e Servicos de Engenharia |
12,800 | 45,963 | ||||
190,500 | 206,421 | |||||
Totvs |
63,000 | 828,932 | ||||
Valid Solucoes |
25,000 | 396,321 | ||||
Total (Cost $4,863,695) | 3,588,680 | |||||
CANADA 7.9% | ||||||
Agnico Eagle Mines |
20,000 | 497,800 | ||||
AirBoss of America |
10,300 | 108,337 | ||||
Alamos Gold |
38,000 | 271,475 | ||||
Canyon Services Group |
10,900 | 84,344 | ||||
COM DEV International |
27,000 | 92,727 | ||||
Computer Modelling Group |
43,300 | 445,001 | ||||
E-L Financial |
900 | 529,093 | ||||
140,000 | 44,586 | |||||
Franco-Nevada Corporation |
16,000 | 787,040 | ||||
HNZ Group |
5,700 | 101,460 | ||||
Horizon North Logistics |
41,100 | 93,393 | ||||
Magellan Aerospace |
34,000 | 395,662 | ||||
Major Drilling Group International |
155,500 | 764,249 | ||||
MTY Food Group |
6,800 | 197,304 | ||||
Pan American Silver |
63,700 | 586,040 | ||||
Ritchie Bros. Auctioneers |
54,300 | 1,460,127 | ||||
Sprott |
430,600 | 904,341 | ||||
Total Energy Services |
5,200 | 58,096 | ||||
Western Forest Products |
39,100 | 90,868 | ||||
Total (Cost $9,723,869) | 7,511,943 | |||||
CHILE 0.1% | ||||||
Forus |
23,000 | 95,760 | ||||
Total (Cost $100,215) | 95,760 | |||||
CHINA 1.4% | ||||||
Daphne International Holdings |
1,696,500 | 615,429 | ||||
1,800 | 47,412 | |||||
Hopefluent Group Holdings |
280,000 | 86,898 | ||||
16,700 | 349,030 | |||||
Pacific Online |
402,700 | 187,632 | ||||
Xtep International Holdings |
213,000 | 85,796 | ||||
Total (Cost $2,059,730) | 1,372,197 | |||||
CYPRUS 0.2% | ||||||
Globaltrans Investment GDR |
42,000 | 213,259 | ||||
Total (Cost $480,518) | 213,259 | |||||
DENMARK 0.7% | ||||||
Chr Hansen |
12,500 | 556,186 | ||||
6,200 | 83,613 | |||||
Total (Cost $530,284) | 639,799 | |||||
FINLAND 1.3% | ||||||
BasWare |
1,100 | 54,637 | ||||
Nokian Renkaat |
9,000 | 220,444 | ||||
Vaisala Cl. A |
35,000 | 928,249 | ||||
Total (Cost $1,721,960) | 1,203,330 | |||||
FRANCE 6.8% | ||||||
3,000 | 92,307 | |||||
Gaztransport Et Technigaz |
16,000 | 944,939 | ||||
Lectra |
8,700 | 96,230 | ||||
Manutan International |
12,700 | 629,697 | ||||
Neurones |
6,200 | 103,964 | ||||
Nexity |
18,500 | 699,871 | ||||
Paris Orleans |
30,755 | 661,790 | ||||
13,600 | 115,177 | |||||
Societe Internationale de Plantations dHeveas |
6,500 | 259,125 | ||||
Stallergenes |
17,800 | 1,065,266 | ||||
Vetoquinol |
27,200 | 1,181,514 | ||||
Virbac |
3,000 | 629,432 | ||||
Total (Cost $7,253,276) | 6,479,312 | |||||
GERMANY 2.7% | ||||||
Aixtron ADR 1 |
53,300 | 597,493 | ||||
Amadeus Fire |
2,000 | 150,443 | ||||
GFT Technologies |
6,300 | 93,893 | ||||
Hawesko Holding |
1,500 | 75,334 | ||||
KUKA |
9,000 | 638,565 | ||||
LPKF Laser & Electronics |
50,500 | 661,649 | ||||
mutares |
900 | 77,206 | ||||
Schaltbau Holding |
1,400 | 71,248 | ||||
Tomorrow Focus |
39,600 | 180,967 | ||||
406 | 45,591 | |||||
Total (Cost $3,585,984) | 2,592,389 | |||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 47 |
Royce Global Value Trust
Schedule of Investments (continued) | ||||||
SHARES | VALUE | |||||
GREECE 0.4% | ||||||
Hellenic Exchanges - Athens Stock Exchange |
48,000 | $ | 269,807 | |||
12,800 | 80,768 | |||||
Total (Cost $624,880) | 350,575 | |||||
HONG KONG 10.0% | ||||||
Anxin-China Holdings |
2,500,000 | 158,646 | ||||
China Metal International Holdings |
430,000 | 148,561 | ||||
Comba Telecom Systems Holdings |
332,540 | 117,659 | ||||
First Pacific |
180,000 | 177,448 | ||||
Great Eagle Holdings |
240,000 | 776,985 | ||||
I.T |
500,000 | 144,124 | ||||
Le Saunda Holdings |
268,600 | 100,936 | ||||
Luen Thai Holdings |
475,000 | 86,865 | ||||
Luk Fook Holdings (International) |
120,100 | 449,756 | ||||
Midland Holdings 1 |
2,150,000 | 1,086,282 | ||||
New World Department Store China |
3,319,700 | 1,061,273 | ||||
Oriental Watch Holdings |
2,223,000 | 429,241 | ||||
Pico Far East Holdings |
6,396,400 | 1,465,724 | ||||
Sitoy Group Holdings |
425,000 | 343,951 | ||||
Television Broadcasts |
161,000 | 934,553 | ||||
Texwinca Holdings |
1,052,000 | 908,457 | ||||
Tse Sui Luen Jewellery (International) |
215,000 | 80,320 | ||||
Value Partners Group |
896,700 | 748,902 | ||||
YGM Trading |
169,400 | 306,974 | ||||
Total (Cost $11,941,500) | 9,526,657 | |||||
INDONESIA 1.0% | ||||||
Ramayana Lestari Sentosa |
3,500,000 | 223,449 | ||||
Selamat Sempurna |
591,800 | 225,719 | ||||
Supra Boga Lestari 1 |
13,945,000 | 500,833 | ||||
Total (Cost $1,167,542) | 950,001 | |||||
ISRAEL 0.1% | ||||||
Fox Wizel |
2,900 | 68,560 | ||||
Total (Cost $63,203) | 68,560 | |||||
ITALY 0.7% | ||||||
DeLonghi |
37,000 | 670,105 | ||||
Total (Cost $565,971) | 670,105 | |||||
JAPAN 11.0% | ||||||
EPS Corporation |
112,500 | 1,332,578 | ||||
FamilyMart |
8,200 | 306,119 | ||||
Freund Corporation |
72,200 | 626,153 | ||||
Fujimori Kogyo |
3,300 | 92,234 | ||||
GCA Savvian |
8,300 | 78,921 | ||||
G-Tekt Corporation |
11,000 | 104,290 | ||||
Itoki Corporation |
34,300 | 175,712 | ||||
Mandom Corporation |
2,000 | 65,691 | ||||
Milbon |
3,100 | 84,389 | ||||
Miraial |
20,000 | 280,382 | ||||
MISUMI Group |
11,600 | 381,030 | ||||
Moshi Moshi Hotline |
100,000 | 912,096 | ||||
Namura Shipbuilding |
9,600 | 102,892 | ||||
Nishikawa Rubber |
28,200 | 480,254 | ||||
Nitto Kohki |
26,600 | 480,245 | ||||
Obara Group |
3,900 | 173,149 | ||||
Relo Holdings |
20,000 | 1,419,988 | ||||
Ryobi |
36,000 | 97,546 | ||||
Santen Pharmaceutical |
10,000 | 535,159 | ||||
Shimano |
5,600 | 724,361 | ||||
SPARX Group |
66,400 | 111,750 | ||||
Sun Frontier Fudousan |
8,000 | 73,393 | ||||
T Hasegawa |
7,000 | 98,303 | ||||
Tokai Corporation/Gifu |
14,400 | 429,420 | ||||
Trancom |
22,200 | 894,266 | ||||
YAMADA Consulting Group |
6,400 | 164,642 | ||||
Zuiko Corporation |
5,500 | 238,054 | ||||
Total (Cost $10,487,292) | 10,463,017 | |||||
LUXEMBOURG 0.1% | ||||||
12,000 | 125,400 | |||||
Total (Cost $180,000) | 125,400 | |||||
MALAYSIA 1.6% | ||||||
Asia Brands |
82,000 | 69,789 | ||||
CB Industrial Product Holding |
1,000,000 | 574,263 | ||||
166,666 | 22,642 | |||||
Media Chinese International |
2,000,000 | 428,932 | ||||
Media Prima |
199,500 | 99,725 | ||||
NTPM Holdings |
1,742,300 | 308,334 | ||||
Total (Cost $1,689,993) | 1,503,685 | |||||
MEXICO 1.9% | ||||||
Bolsa Mexicana de Valores |
650,000 | 1,177,192 | ||||
Fresnillo |
55,000 | 652,673 | ||||
Total (Cost $2,160,619) | 1,829,865 | |||||
NEW ZEALAND 0.2% | ||||||
Trade Me |
83,000 | 231,662 | ||||
Total (Cost $280,441) | 231,662 | |||||
NORWAY 2.1% | ||||||
Borregaard |
15,200 | 112,982 | ||||
Ekornes |
45,000 | 573,636 | ||||
Oslo Bors VPS Holding |
10,200 | 104,012 | ||||
TGS-NOPEC Geophysical |
55,000 | 1,189,999 | ||||
Total (Cost $2,516,422) | 1,980,629 | |||||
PHILIPPINES 1.5% | ||||||
Asian Terminals |
375,000 | 96,574 | ||||
GMA Holdings PDR |
775,000 | 116,110 | ||||
Universal Robina |
270,000 | 1,175,997 | ||||
Total (Cost $1,025,229) | 1,388,681 | |||||
SINGAPORE 2.8% | ||||||
Hour Glass (The) |
1,458,000 | 703,232 | ||||
Pan-United Corporation |
800,000 | 507,251 | ||||
Parkson Retail Asia |
277,700 | 167,712 | ||||
Silverlake Axis |
1,360,000 | 1,286,587 | ||||
Total (Cost $2,509,157) | 2,664,782 | |||||
SOUTH AFRICA 5.1% | ||||||
Blue Label Telecoms |
690,000 | 524,650 | ||||
Cashbuild |
30,000 | 425,131 | ||||
Coronation Fund Managers |
59,000 | 582,147 | ||||
JSE |
67,500 | 705,037 | ||||
Lewis Group |
100,000 | 639,865 | ||||
Metrofile Holdings |
321,700 | 138,952 | ||||
Nampak |
200,000 | 752,541 |
48 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
December 31, 2014 |
Schedule of Investments (continued) | ||||||
SHARES | VALUE | |||||
SOUTH AFRICA (continued) | ||||||
PSG Group |
36,500 | $ | 402,585 | |||
Raubex Group |
375,000 | 711,594 | ||||
Total (Cost $4,926,311) | 4,882,502 | |||||
SOUTH KOREA 1.5% | ||||||
Eugene Technology |
11,536 | 169,077 | ||||
Handsome |
11,400 | 337,847 | ||||
Hankuk Carbon |
10,000 | 52,484 | ||||
22,100 | 223,822 | |||||
Koh Young Technology |
5,400 | 209,731 | ||||
Sung Kwang Bend |
30,000 | 374,247 | ||||
2,800 | 64,185 | |||||
Total (Cost $1,567,275) | 1,431,393 | |||||
SRI LANKA 0.1% | ||||||
Distilleries Company of Sri Lanka |
65,700 | 105,411 | ||||
Total (Cost $108,837) | 105,411 | |||||
SWEDEN 0.4% | ||||||
18,800 | 141,245 | |||||
Nolato Cl. B |
4,400 | 99,419 | ||||
5,800 | 99,601 | |||||
Total (Cost $350,620) | 340,265 | |||||
SWITZERLAND 0.8% | ||||||
Forbo Holding |
675 | 675,152 | ||||
Zehnder Group |
3,100 | 128,770 | ||||
Total (Cost $655,051) | 803,922 | |||||
TAIWAN 0.6% | ||||||
Kinik Company |
31,500 | 64,712 | ||||
Lumax International |
45,000 | 92,152 | ||||
Makalot Industrial |
21,759 | 116,240 | ||||
Shih Her Technologies |
50,000 | 92,314 | ||||
Taiwan Paiho |
91,900 | 123,827 | ||||
UDE Corporation |
41,400 | 102,201 | ||||
Total (Cost $598,625) | 591,446 | |||||
TURKEY 1.0% | ||||||
Mardin Cimento Sanayii |
475,000 | 965,890 | ||||
Total (Cost $1,478,000) | 965,890 | |||||
UNITED ARAB EMIRATES 0.7% | ||||||
Aramex |
750,000 | 629,723 | ||||
Total (Cost $652,528) | 629,723 | |||||
UNITED KINGDOM 9.6% | ||||||
Ashmore Group |
232,500 | 1,008,001 | ||||
Brammer |
14,000 | 74,159 | ||||
Clarkson |
44,000 | 1,298,775 | ||||
Consort Medical |
95,000 | 1,278,399 | ||||
E2V Technologies |
274,500 | 738,509 | ||||
Elementis |
134,000 | 542,293 | ||||
Fenner |
50,000 | 166,825 | ||||
140,000 | 87,101 | |||||
Hargreaves Services |
7,500 | 75,257 | ||||
HellermannTyton Group |
50,000 | 244,473 | ||||
Jupiter Fund Management |
93,600 | 525,489 | ||||
Kennedy Wilson Europe Real Estate |
54,956 | 902,788 | ||||
Luxfer Holdings ADR |
4,500 | 67,185 | ||||
Mattioli Woods |
10,600 | 74,269 | ||||
Norcros |
492,900 | 138,060 | ||||
Pendragon |
135,700 | 69,455 | ||||
Polypipe Group |
57,000 | 218,434 | ||||
Rotork |
8,900 | 320,269 | ||||
Senior |
95,000 | 444,614 | ||||
Spirax-Sarco Engineering |
17,100 | 759,933 | ||||
Trifast |
82,700 | 138,698 | ||||
Total (Cost $10,192,875) | 9,172,986 | |||||
UNITED STATES 14.8% | ||||||
Artisan Partners Asset Management Cl. A |
5,000 | 252,650 | ||||
Bel Fuse Cl. A |
26,672 | 646,529 | ||||
Brooks Automation |
18,100 | 230,775 | ||||
Cabot Corporation |
10,200 | 447,372 | ||||
Commercial Metals |
42,000 | 684,180 | ||||
Diebold |
21,100 | 730,904 | ||||
Diodes 1 |
20,500 | 565,185 | ||||
EnerSys |
11,000 | 678,920 | ||||
Expeditors International of Washington |
19,300 | 860,973 | ||||
Fairchild Semiconductor International1 |
49,200 | 830,496 | ||||
Globe Specialty Metals |
42,900 | 739,167 | ||||
GrafTech International1 |
48,600 | 245,916 | ||||
Greif Cl. A |
13,400 | 632,882 | ||||
Hallador Energy |
18,600 | 204,786 | ||||
Innospec |
12,457 | 531,914 | ||||
KBR |
37,000 | 627,150 | ||||
Nanometrics 1 |
44,500 | 748,490 | ||||
Quaker Chemical |
8,400 | 773,136 | ||||
12,000 | 977,280 | |||||
Schnitzer Steel Industries Cl. A |
19,100 | 430,896 | ||||
5,000 | 369,050 | |||||
Sensient Technologies |
12,100 | 730,114 | ||||
Sun Hydraulics |
15,139 | 596,174 | ||||
84,900 | 262,341 | |||||
Tennant Company |
4,700 | 339,199 | ||||
Total (Cost $15,199,376) | 14,136,479 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $110,162,452) | 95,592,963 | |||||
TOTAL INVESTMENTS 100.3% | ||||||
(Cost $110,162,452) | 95,592,963 | |||||
LIABILITIES LESS CASH AND OTHER ASSETS (0.3)% | (308,225) | |||||
NET ASSETS 100.0% | $ | 95,284,738 | ||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 49 |
Royce Global Value Trust | December 31, 2014 |
50 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Global Value Trust | December 31, 2014 |
Statement of Assets and Liabilities | ||||
ASSETS: | ||||
Total investments at value | $ | 95,592,963 | ||
Receivable for investments sold | 21,169 | |||
Receivable for dividends and interest | 106,911 | |||
Prepaid expenses and other assets | 48,933 | |||
Total Assets | 95,769,976 | |||
LIABILITIES: | ||||
Payable to custodian for cash overdrawn and foreign currency | 315,505 | |||
Payable for investment advisory fee | 100,899 | |||
Payable for directors fees | 7,102 | |||
Accrued expenses | 61,732 | |||
Total Liabilities | 485,238 | |||
Net Assets | $ | 95,284,738 | ||
ANALYSIS OF NET ASSETS: | ||||
Paid-in capital - $0.001 par value per share; 10,295,972 shares outstanding (150,000,000 shares authorized) | $ | 116,575,937 | ||
Undistributed net investment income (loss) | (199,302 | ) | ||
Accumulated net realized gain (loss) on investments and foreign currency | (6,520,094 | ) | ||
Net unrealized appreciation (depreciation) on investments and foreign currency | (14,571,803 | ) | ||
Net Assets (net asset value per share - $9.25) | $ | 95,284,738 | ||
Investments at identified cost | $ | 110,162,452 | ||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 51 |
Royce Global Value Trust | Year Ended December 31, 2014 |
Statement of Operations | ||||
INVESTMENT INCOME: | ||||
INCOME: | ||||
Dividends | $ | 3,092,530 | ||
Foreign withholding tax | (248,298 | ) | ||
Securities lending | 21,376 | |||
Total income | 2,865,608 | |||
EXPENSES: | ||||
Investment advisory fees | 1,283,193 | |||
Custody and transfer agent fees | 109,583 | |||
Stockholder reports | 39,358 | |||
Professional fees | 28,004 | |||
Directors fees | 26,158 | |||
Administrative and office facilities | 11,622 | |||
Other expenses | 32,630 | |||
Total expenses | 1,530,548 | |||
Net investment income (loss) | 1,335,060 | |||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | ||||
NET REALIZED GAIN (LOSS): | ||||
Investments | (6,171,852 | ) | ||
Foreign currency transactions | (54,989 | ) | ||
Net realized foreign capital gains tax | (3,700 | ) | ||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | ||||
Investments and foreign currency translations | (1,573,195 | ) | ||
Other assets and liabilities denominated in foreign currency | (738 | ) | ||
Net realized and unrealized gain (loss) on investments and foreign currency | (7,804,474 | ) | ||
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | $ | (6,469,414 | ) | |
52 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Global Value Trust
Statement of Changes in Net Assets | |||||||||
YEAR ENDED 12/31/14 | PERIOD ENDED 12/31/131 | ||||||||
INVESTMENT OPERATIONS: | |||||||||
Net investment income (loss) | $ | 1,335,060 | $ | (26,704 | ) | ||||
Net realized gain (loss) on investments and foreign currency | (6,230,541 | ) | (264,173 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency |
(1,573,933 | ) | 2,974,575 | ||||||
Net increase (decrease) in net assets from investment operations | (6,469,414 | ) | 2,683,698 | ||||||
DISTRIBUTIONS: | |||||||||
Net investment income | (1,533,038 | ) | | ||||||
Net realized gain on investments and foreign currency | | | |||||||
Total distributions | (1,533,038 | ) | | ||||||
CAPITAL STOCK TRANSACTIONS: | |||||||||
Reinvestment of distributions | 603,492 | | |||||||
Common shares issued in spinoff from Royce Value Trust | | 100,000,000 | |||||||
Total capital stock transactions | 603,492 | 100,000,000 | |||||||
Net Increase (Decrease) In Net Assets | (7,398,960 | ) | 102,683,698 | ||||||
NET ASSETS: | |||||||||
Beginning of year | 102,683,698 | | |||||||
End of year (including undistributed net investment income (loss) of $(199,302) at 12/31/14 and $(16,988) at 12/31/13) |
$ | 95,284,738 | $ | 102,683,698 | |||||
1 | The Fund commenced operations on October 18, 2013. |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS | 2014 Annual Report to Stockholders | 53 |
Royce Global Value Trust |
Financial Highlights |
This table is presented to show selected data for a share outstanding throughout each period, and to assist stockholders in evaluating the Funds performance for the periods presented. |
YEAR ENDED | PERIOD ENDED | ||||||||
12/31/2014 | 12/31/20131 | ||||||||
Net Asset Value, Beginning of Period | $ | 10.05 | $ | 9.78 | |||||
INVESTMENT OPERATIONS: | |||||||||
Net investment income (loss) | 0.13 | (0.00 | ) | ||||||
Net realized and unrealized gain (loss) on investments and foreign currency | (0.77 | ) | 0.27 | ||||||
Net increase (decrease) in net assets from investment operations | (0.64 | ) | 0.27 | ||||||
DISTRIBUTIONS: | |||||||||
Net investment income | (0.15 | ) | | ||||||
Net realized gain on investments and foreign currency | | | |||||||
Total distributions | (0.15 | ) | | ||||||
CAPITAL STOCK TRANSACTIONS: | |||||||||
Effect of reinvestment of distributions by Common Stockholders | (0.01 | ) | | ||||||
Total capital stock transactions | (0.01 | ) | | ||||||
Net Asset Value, End of Period | $ | 9.25 | $ | 10.05 | |||||
Market Value, End of Period | $ | 8.04 | $ | 8.89 | |||||
TOTAL RETURN:2 | |||||||||
Net Asset Value | (6.23 | )% | 2.76 | %3 | |||||
Market Value | (7.86 | )% | (0.95 | )%3 | |||||
RATIOS BASED ON AVERAGE NET ASSETS: | |||||||||
Investment advisory fee expense | 1.25 | % | 1.25 | %4 | |||||
Other operating expenses | 0.24 | % | 0.37 | %4 | |||||
Total expenses (net) | 1.49 | % | 1.62 | %4 | |||||
Expenses prior to balance credits | 1.49 | % | 1.62 | %4 | |||||
Net investment income (loss) | 1.30 | % | (0.13 | )%4 | |||||
SUPPLEMENTAL DATA: | |||||||||
Net Assets End of Period (in thousands) | $ | 95,285 | $ | 102,684 | |||||
Portfolio Turnover Rate | 43 | % | 7 | % | |||||
54 | 2014 Annual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Global Value Trust
Notes to Financial Statements
Level 1 | | quoted prices in active markets for identical securities. | |
Level 2 | | other significant
observable inputs (including quoted prices for similar securities, foreign securities
that may be fair valued and repurchase agreements). The table below includes all
Level 2 securities. Level 2 securities with values based on quoted prices for similar
securities would be noted in the Schedule of Investments. |
|
Level 3 | | significant
unobservable inputs (including last trade price before trading was suspended, or
at a discount thereto for lack of marketability or otherwise, market price information
regarding other securities, information received from the company and/or published
documents, including SEC filings and financial statements, or other publicly available
information). |
LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | ||||||||||
Common Stocks | $ | 26,518,831 | $ | 69,074,132 | $ | | $ | 95,592,963 | |||||
For the year ended December 31, 2014, certain securities have transferred in and out of Level 1 and Level 2 measurements. The Fund recognizes transfers between levels as of the end of the reporting period. At December 31, 2014, securities valued at $45,476,963 were transferred from Level 1 to Level 2 within the fair value hierarchy.
2014 Annual Report to Stockholders | 55
Royce Global Value Trust
Notes to Financial Statements (continued)
56 | 2014 Annual Report to Stockholders
Royce Global Value Trust
Notes to Financial Statements (continued)
DISTRIBUTIONS PAID FROM: | 2014 | |||
Ordinary income | $ | 1,533,038 | ||
Long-term capital gain | | |||
$ | 1,533,038 | |||
As of December 31, 2014, the tax basis components of distributable earnings included in stockholders equity were as follows:
Net unrealized appreciation (depreciation) | $(15,449,610 | ) | ||
Post October loss* | (2,014,245 | ) | ||
Capital loss carryforward** | (3,827,344 | ) | ||
$(21,291,199 | ) | |||
UNDISTRIBUTED NET | ACCUMULATED NET | |||
INVESTMENT INCOME | REALIZED GAIN (LOSS) | |||
$15,664 | $(15,664) | |||
Management has analyzed the Funds tax positions taken on federal income tax returns for all open tax years (2013-2014) and has concluded that as of December 31, 2014, no provision for income tax is required in the Funds financial statements.
2014 Annual Report to Stockholders | 57
Royce Global Value Trust
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
of
Royce Global Value Trust, Inc.
New York, New York
We have audited the accompanying statement of assets and liabilities of Royce Global Value Trust, Inc., (Fund) including the schedule of investments, as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for the year then ended and for the period October 18, 2013 (commencement of operations) through December 31, 2013. These financial statements and financial highlights are the responsibility of the Funds management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Royce Global Value Trust, Inc. at December 31, 2014, the results of its operations for the year then ended, the changes in its net assets and the financial highlights for the year then ended and for the period October 18, 2013 (commencement of operations) through December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.
TAIT, WELLER, & BAKER LLP
Philadelphia, Pennsylvania
February 23,
2015
58 | 2014 Annual Report to Stockholders
Directors and Officers |
All Directors and Officers may be reached c/o The Royce Funds, 745 Fifth Avenue, New York, NY 10151
Charles M. Royce, Director1, President |
Age: 75 | Number of Funds Overseen: 33 | Tenure: Since 1982 |
Non-Royce Directorships: Director of TICC Capital Corp. |
Principal Occupation(s) During Past Five Years: Chief Executive Officer and Chairman of Board of Managers of Royce & Associates, LLC (Royce), the Trusts investment adviser. |
Christopher D. Clark, Director1, Vice President |
Age: 49 | Number of Funds Overseen: 32 | Tenure: Since 2014 |
Principal Occupation(s) During Past Five Years: President (since July 2014), Co-Chief Investment Officer (Since January 2014) and Managing Director of Royce, having been employed by Royce since May 2007. |
Patricia W. Chadwick, Director |
Age: 66 | Number of Funds Overseen: 33 | Tenure: Since 2009 |
Non-Royce
Directorships: Trustee of ING Mutual Funds and Director of Wisconsin Energy
Corp. Principal Occupation(s) During Past 5 Years: Consultant and President of Ravengate Partners LLC (since 2000). |
Richard M. Galkin, Director |
Age: 76 | Number of Funds Overseen: 33 | Tenure: Since 1982 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: Private investor. Mr. Galkins prior business experience includes having served as President of Richard M. Galkin Associates, Inc., telecommunications consultants, President of Manhattan Cable Television (a subsidiary of Time, Inc.), President of Haverhills Inc. (another Time, Inc. subsidiary), President of Rhode Island Cable Television, and Senior Vice President of Satellite Television Corp. (a subsidiary of Comsat). |
Stephen L. Isaacs, Director |
Age: 75 | Number of Funds Overseen: 33 | Tenure: Since 1989 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: Attorney and President of Health Policy Associates, Inc., consultants. Mr. Isaacss prior business experience includes having served as President of the Center for Health and Social Policy (from 1996 to 2012); Director of Columbia University Development Law and Policy Program and Professor at Columbia University (until August 1996). |
Arthur S. Mehlman, Director |
Age: 72 | Number of Funds Overseen: 51 | Tenure: Since 2004 |
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 18 Legg Mason Funds. |
Principal Occupation(s) During Past Five Years: Director of The League for People with Disabilities, Inc.; Director of University of Maryland Foundation (non-profits). Formerly: Director of Municipal Mortgage & Equity, LLC (from October 2004 to April 1, 2011); Director of University of Maryland College Park Foundation (non-profit) (from 1998 to 2005); Partner, KPMG LLP (international accounting firm) (from 1972 to 2002); Director of Maryland Business Roundtable for Education (from July 1984 to June 2002). |
David L. Meister, Director |
Age: 75 | Number of Funds Overseen: 33 | Tenure: Since 1982 |
Non-Royce Directorships: None |
Principal Occupation(s) During Past Five Years: Consultant. Chairman and Chief Executive Officer of The Tennis Channel (from June 2000 to March 2005). Mr. Meisters prior business experience includes having served as Chief Executive Officer of Seniorlife.com, a consultant to the communications industry, President of Financial News Network, Senior Vice President of HBO, President of Time-Life Films, and Head of Broadcasting for Major League Baseball. |
G. Peter OBrien, Director |
Age: 69 | Number of Funds Overseen: 51 | Tenure: Since 2001 |
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 18 Legg Mason Funds; Director of TICC Capital Corp. |
Principal Occupation(s) During Past Five Years: Trustee Emeritus of Colgate University (since 2005); Board Member of Hill House, Inc. (since 1999); Formerly: Trustee of Colgate University (from 1996 to 2005), President of Hill House, Inc. (from 2001 to 2005) and Managing Director/Equity Capital Markets Group of Merrill Lynch & Co. (from 1971 to 1999). |
John D. Diederich, Vice President and Treasurer |
Age: 63 | Tenure: Since 2001 |
Principal Occupation(s) During Past Five Years: Chief Operating Officer, Managing Director and member of the Board of Managers of Royce; Chief Financial Officer of Royce; Director of Administration of the Trust; and President of RFS, having been employed by Royce since April 1993. |
Jack E. Fockler, Jr., Vice President |
Age: 56 | Tenure: Since 1995 |
Principal Occupation(s) During Past Five Years: Managing Director and Vice President of Royce, and Vice President of RFS, having been employed by Royce since October 1989. |
Daniel A. OByrne, Vice President and Assistant Secretary |
Age: 52 | Tenure: Since 1994 |
Principal Occupation(s) During Past Five Years: Principal and Vice President of Royce, having been employed by Royce since October 1986. |
Francis D. Gannon, Vice President |
Age: 47 | Tenure: Since 2014 |
Principal Occupation(s) During Past Five Years: Co-Chief Investment Officer (Since January 2014) and Managing Director of Royce, having been employed by Royce since September 2006. |
John E. Denneen, Secretary and Chief Legal Officer |
Age: 47 | Tenure: 1996-2001 and Since April 2002 |
Principal Occupation(s) During Past Five Years: General Counsel, Chief Legal and Compliance Officer, and Secretary of Royce; Secretary and Chief Legal Officer of The Royce Funds. |
Lisa Curcio, Chief Compliance Officer |
Age: 55 | Tenure: Since 2004 |
Principal Occupation(s) During Past Five Years: Chief Compliance Officer of The Royce Funds (since October 2004) and Compliance Officer of Royce (since June 2004). |
1 | Interested Director. |
Director will hold office until their successors have been duly elected and qualified or until their earlier resignation or removal. |
2014 Annual Report to Stockholders | 59 |
Notes to Performance and Other Important Information
The thoughts expressed in this Review and Report concerning recent market movements and future prospects for small company stocks are solely the opinion of Royce at December 31, 2014, and, of course, historical market trends are not necessarily indicative of future market movements. Statements regarding the future prospects for particular securities held in the Funds portfolios and Royces investment intentions with respect to those securities reflect Royces opinions as of December 31, 2014 and are subject to change at any time without notice. There can be no assurance that securities mentioned in this Review and Report will be included in any Royce-managed portfolio in the future. Investments in securities of micro-cap, small-cap and/or mid-cap companies may involve considerably more risk than investments in securities of larger-cap companies. All publicly released material information is always disclosed by the Funds on the website at www.roycefunds.com. |
Sector weightings are determined using the Global Industry Classification Standard (GICS). GICS was developed by, and is the exclusive property of, Standard & Poors Financial Services LLC (S&P) and MSCI Inc. (MSCI). GICS is the trademark of S&P and MSCI. Global Industry Classification Standard (GICS) and GICS Direct are service marks of S&P and MSCI. |
All indexes referred to are unmanaged and capitalization weighted. Each indexs returns include net reinvested dividends and/or interest income. Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. The Russell 2000 Index is an index of domestic small-cap stocks. It measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 Index. The Russell Microcap Index includes 1,000 of the smallest securities in the Russell 2000 Index along with the next smallest eligible securities as determined by Russell. The Russell 1000 Index is an index of domestic large-cap stocks. It measures the performance of the 1,000 largest publicly traded companies in the Russell 3000 Index. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. It includes approximately 800 of the smallest securities in the Russell 1000 Index. The Russell Global Small Cap Index is an unmanaged, capitalization-weighted index of global small-cap stocks. The Russell Global ex-U.S. Large Cap Index is an index of global large-cap stocks, excluding the United States. The Russell Global ex-U.S. Small Cap Index is an index of global small-cap stocks, excluding the United States. The S&P 500 and SmallCap 600 are indexes of U.S. large- and small-cap stocks, respectively, selected by Standard & Poors based on market size, liquidity, and industry grouping, among other factors. The Nasdaq Composite is an index of the more than 3,000 common equities listed on the Nasdaq stock exchange. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index. Returns for the market indexes used in this report were based on information supplied to Royce by Russell Investments. |
The Price-Earnings, or P/E, Ratio is calculated by dividing a companys share price by its trailing 12-month earnings-per share (EPS). The Price- to- Book, or P/B, Ratio is calculated by dividing a companys share price by its book value per share. The Morningstar Style Map uses proprietary scores of a stocks value and growth characteristics to determine its placement in one of the five categories listed on the horizontal axis. These characteristics are then compared to those of other stocks within the same market capitalization band. Each is scored from zero to 100 for both value and growth attributes. The value score is subtracted from the growth score to determine the overall style score. For the vertical, market cap axis, Morningstar subdivides into size groups. Giant-cap stocks are defined as those that account for the top 40% of the capitalization of each style zone; large-cap stocks represent the next 30%; mid-cap stocks the next 20%; small-cap stocks the next 7%; micro-cap stocks the smallest 3%. The Royce Funds is a service mark of The Royce Funds. Distributor: Royce Fund Services, Inc. |
Forward-Looking Statements |
This material contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended (the Exchange Act), that involve risks and uncertainties, including, among others, statements as to: |
the Funds future operating results |
the prospects of the Funds portfolio companies |
the impact of investments that the Funds have made or may make |
the dependence of the Funds future success on the general economy and its impact on the companies and industries in which the Funds invest, and |
the ability of the Funds portfolio companies to achieve their objectives. |
This Review and Report uses words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Actual results may differ materially from those projected in the forward-looking statements for any reason. |
The Royce Funds have based the forward-looking statements included in this Review and Report on information available to us on the date of the report, and we assume no obligation to update any such forward-looking statements. Although The Royce Funds undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make through future stockholder communications or reports. |
Authorized Share Transactions |
Royce Value Trust, Royce Micro-Cap Trust, and Royce Global Value Trust may each repurchase up to 5% of the issued and outstanding shares of its respective common stock during the year ending December 31, 2015. Any such repurchases would take place at then prevailing prices in the open market or in other transactions. Common stock repurchases would be effected at a price per share that is less than the shares then current net asset value. |
Royce Value Trust, Royce Micro-Cap Trust, and Royce Global Value Trust are also authorized to offer their common stockholders an opportunity to subscribe for additional shares of their common stock through rights offerings at a price per share that may be less than the shares then current net asset value. The timing and terms of any such offerings are within each Boards discretion. |
Annual Certifications |
As required, the Funds have submitted to the New York Stock Exchange (NYSE) for Royce Value Trust, Royce Micro-Cap Trust, and Royce Global Value Trust the annual certification of the Funds Chief Executive Officer that he is not aware of any violation of the NYSEs listing standards. The Funds also have included the certification of the Funds Chief Executive Officer and Chief Financial Officer required by section 302 of the Sarbanes-Oxley Act of 2002 as exhibits to the Funds form N-CSR for the period ended December 31, 2014, filed with the Securities and Exchange Commission. |
Proxy Voting |
A copy of the policies and procedures that The Royce Funds use to determine how to vote proxies relating to portfolio securities and information regarding how each of The Royce Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available, without charge, on The Royce Funds website at www.roycefunds.com, by calling (800) 221-4268 (toll-free) and on the website of the Securities and Exchange Commission (SEC), at www.sec.gov. |
Form N-Q Filing |
The Funds file their complete schedules of investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds Forms N-Q are available on the SECs website at www.sec.gov. The Royce Funds holdings are also on the Funds website approximately 15 to 20 days after each calendar quarter end and remain available until the next quarters holdings are posted. The Funds Forms N-Q may also be reviewed and copied at the SECs Public Reference Room in Washington, D.C. To find out more about this public service, call the SEC at (800) 732-0330. The Funds complete schedules of investments are updated quarterly, and are available at www.roycefunds.com. |
60 | 2014 Annual Report to Stockholders |
Results of Stockholders Meeting
Royce Value Trust, Inc.
At the 2014 Annual Meeting of Stockholders held on September 24, 2014, the Funds stockholders elected two Directors, consisting of:
VOTES FOR | VOTES WITHHELD | |
Richard M. Galkin | 57,579,578 | 1,907,416 |
Stephen L. Isaacs | 57,521,207 | 1,965,788 |
Royce Micro-Cap Trust, Inc.
At the 2014 Annual Meeting of Stockholders held on September 24, 2014, the Funds stockholders elected two Directors, consisting of:
VOTES FOR | VOTES WITHHELD | |
Richard M. Galkin | 24,533,941 | 553,234 |
Stephen L. Isaacs | 24,495,075 | 592,101 |
Royce Global Value Trust, Inc.
At the 2014 Annual Meeting of Stockholders held on September 24, 2014, the Funds stockholders elected two Directors, consisting of:
VOTES FOR | VOTES WITHHELD | |
Richard M. Galkin | 8,706,251 | 200,627 |
Stephen L. Isaacs | 8,713,552 | 193,327 |
2014 Annual Report to Stockholders |
About The Royce Funds | Contact Us | ||||
Wealth
of Experience With approximately $32 billion in total assets under management, Royce & Associates is committed to the same investment principles that have served us well for more than 40 years. Chuck Royce, our Chief Executive Officer, enjoys one of the longest tenures of any active mutual fund manager. Royces investment staff also includes 24 portfolio managers and analysts and nine traders. |
GENERAL INFORMATION General Royce Funds information including an overview of our firm and Funds (800) 221-4268 |
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Multiple
Funds, Common Focus Our goal is to offer both individual and institutional investors the best available micro-cap, small-cap, and/or mid-cap portfolios. We have chosen to concentrate on smaller-company investing by providing investors with a range of funds that take full advantage of this large and diverse sector. |
COMPUTERSHARE Transfer Agent and Registrar Speak with a representative about: Your account, transactions, and forms (800) 426-5523 |
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Consistent
Discipline Our approach emphasizes paying close attention to risk and maintaining the same discipline, regardless of market movements and trends. The price we pay for a security must be below our appraisal of its current worth. This requires a thorough analysis of the financial and business dynamics of an enterprise, as though we were purchasing the entire company. |
FINANCIAL ADVISORS AND BROKER-DEALERS Speak with your regional Royce contact regarding: Information about our firm, strategies, and Funds Fund Materials (800) 337-6923 |
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Co-Ownership
of Funds It is important that our employees and shareholders share a common financial goal. Our officers, employees, and their families currently have more than $185 million invested in The Royce Funds and are often among the largest individual shareholders. |
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roycefunds.com | |||||
Item 2. Code(s) of Ethics. As of
the end of the period covered by this report, the Registrant had adopted a code
of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive
officer, principal financial officer, principal accounting officer or controller,
or persons performing similar functions. A copy of this code of ethics is filed
as an exhibit to this Form N-CSR. No substantive amendments were approved or waivers
were granted to this code of ethics during the period covered by this report.
Item 3. Audit Committee Financial Expert.
(a)(1) | The Board
of Directors of the Registrant has determined that it has an audit committee financial
expert. |
|
(a)(2) |
Arthur S.
Mehlman and Patricia W. Chadwick were designated by the Board of Directors as the |
|
Registrants Audit Committee Financial Experts, effective April 15, 2004 and April 8,
2010, respectively. |
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Mr. Mehlman
and Ms. Chadwick are independent as defined under Item 3 of Form N-CSR. |
Item 4. Principal Accountant Fees and Services.
(a) |
Audit Fees: |
|
Year ended
December 31, 2014 -$43,500 |
||
Year ended
December 31, 2013 -$42,500 |
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(b) |
Audit-Related Fees: |
|
Year ended
December 31, 2014 -$0 |
||
Year ended
December 31, 2013 -$0 |
||
(c) |
Tax Fees: |
|
Year ended
December 31, 2014 -$7,200 - Preparation of tax returns |
||
Year ended
December 31, 2013 -$7,100 - Preparation of tax returns |
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(d) |
All Other Fees: |
|
Year ended
December 31, 2014 -$0 |
||
Year ended
December 31, 2013 -$0 |
(e)(1) Annual Pre-Approval: On an annual basis, the Registrants independent auditor submits to the Audit Committee a schedule of proposed audit, audit-related, tax and other non-audit services to be rendered to the Registrant and/or investment adviser(s) for the following year that require pre-approval by the Audit Committee. This schedule provides a description of each type of service that is expected to require pre-approval and the maximum fees that can be paid for each such service without further Audit Committee approval. The Audit Committee then reviews and determines whether to approve the types of scheduled services and the projected fees for them. Any subsequent revision to already pre-approved services or fees (including fee increases) are presented for consideration at the next regularly scheduled Audit Committee meeting, as needed.
If subsequent
to the annual pre-approval of services and fees by the Audit Committee, the Registrant
or one of its affiliates determines that it would like to engage the Registrants independent auditor to perform a service not already pre-approved, the request
is to be submitted to the Registrants Chief Financial Officer, and if he or
she determines that the service fits within the independence guidelines (e.g., it
is not a prohibited service), he or she will then arrange for a discussion of the
proposed service and fee to be included on the agenda for the next regularly scheduled
Audit Committee meeting so that pre-approval can be considered.
Interim Pre-Approval:
If, in the judgment of the Registrants Chief Financial Officer, a proposed
engagement needs to commence before the next regularly scheduled Audit Committee
meeting, he or she shall submit a written summary of the proposed engagement to
all members of the Audit Committee, outlining the services, the estimated maximum
cost, the category of the services (e.g., audit, audit-related, tax or other) and
the rationale for engaging the Registrants independent auditor to perform
the services. To the extent the proposed engagement involves audit, audit-related
or tax services, any individual member of the Audit Committee who is an independent
Board member is authorized to pre-approve the engagement. To the extent the proposed
engagement involves non-audit services other than audit-related or tax, the Chairman
of the Audit Committee is authorized to pre-approve the engagement. The Registrants Chief Financial Officer will arrange for this interim review and
coordinate with the appropriate member(s) of the Committee. The independent auditor may not commence the engagement under consideration until the Registrants Chief Financial Officer has informed the auditor in writing that pre-approval has been obtained from the Audit Committee or an individual member who is an independent Board member. The member of the Audit Committee who pre-approves any engagements in between regularly scheduled Audit Committee meetings is to report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next regularly scheduled meeting.
(e)(2) |
Not Applicable |
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(f) |
Not Applicable |
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(g) |
Year ended
December 31, 2014 -$7,200 |
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Year ended
December 31, 2013 -$7,100 |
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(h) |
No such services
were rendered during 2014 or 2013. |
Item 5. Audit Committee of Listed Registrants.
The Registrant has a separately designated standing audit committee established
in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. Patricia
W. Chadwick, Richard M. Galkin, Stephen L. Isaacs, Arthur S. Mehlman, David L. Meister
and G. Peter OBrien are members of the Registrants audit committee.
Item 6. Investments.
(a) See Item 1.
(b) Not applicable.
Item
7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management
Investment Companies.
June 5, 2003, as amended
through October 22, 2009
Royce & Associates Proxy Voting Guidelines and Procedures
These procedures apply to Royce & Associates, LLC (Royce) and all funds and other client accounts for which it is responsible for voting proxies, including all open and closed-end registered investment companies (The Royce Funds), limited partnerships, limited liability companies, separate accounts, other accounts for which it acts as investment adviser and any accounts for which it acts as sub-adviser that have delegated proxy voting authority to Royce. Such authority is determined at the inception of each client account and generally: (i) is specifically authorized in the applicable investment management agreement or other written instrument or (ii) where not specifically authorized, is granted to Royce where general investment discretion is given to it in the applicable investment management agreement. The Boards of Trustees/Directors of The Royce Funds (the Boards) have delegated all proxy voting decisions to Royce subject to these policies and procedures. Notwithstanding the above, from time to time the Boards may reserve voting authority for specific securities.
Receipt of Proxy Material. Under the continuous oversight of the Head of Administration, an Administrative Assistant designated by him is responsible for monitoring receipt of all proxies and ensuring that proxies are received for all securities for which Royce has proxy voting responsibility. All proxy materials are logged in upon receipt by Royces Librarian.
Voting of Proxies. Once proxy material has been logged in by Royces Librarian, it is then promptly reviewed by the designated Administrative Assistant to evaluate the issues presented. Regularly recurring matters are usually voted as recommended by the issuers board of directors or management. The Head of Administration or his designee, in consultation with the Chief Investment Officer, develops and updates a list of matters Royce treats as regularly recurring and is responsible for ensuring that the designated Administrative Assistant has an up-to-date list of these matters at all times, including instructions from Royces Chief Investment Officer on how to vote on
those matters on behalf of Royce clients. Examples of regularly recurring matters include non-contested elections of directors and non-contested approval of independent auditors. Non-regularly recurring matters are brought to the attention of the portfolio manager(s) for the account(s) involved by the designated Administrative Assistant, and, after giving some consideration to advisories from Glass Lewis & Co., an independent third party research firm, the portfolio manager directs that such matters be voted in a way that he or she believes should better protect or enhance the value of the investment. If the portfolio manager determines that information concerning any proxy requires analysis, is missing or incomplete, he or she then gives the proxy to an analyst or another portfolio manager for review and analysis.
a. | From time
to time, it is possible that one Royce portfolio manager will decide (i) to vote
shares held in client accounts he or she manages differently from the vote of another
Royce portfolio manager whose client accounts hold the same security or (ii) to
abstain from voting on behalf of client accounts he or she manages when another
Royce portfolio manager is casting votes on behalf of other Royce client accounts. |
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The designated
Administrative Assistant reviews all proxy votes collected from Royces portfolio
managers prior to such votes being cast. If any difference exists among the voting
instructions given by Royces portfolio managers, as described above, the designated
Administrative Assistant then presents these proposed votes to the Head of Administration,
or his designee, and the Chief Investment Officer. The Chief Investment Officer,
after consulting with the relevant portfolio managers, either reconciles the votes
or authorizes the casting of differing votes by different portfolio managers. The
Head of Administration, or his designee, maintains a log of all votes for which
different portfolio managers have cast differing votes, that describes the rationale
for allowing such differing votes and contains the initials of both the Chief Investment
Officer and Head of Administration, or his designee, allowing such differing votes.
The Head of Administration, or his designee, performs a weekly review of all votes
cast by Royce to confirm that any conflicting votes were properly handled in accordance
with the above-described procedures. |
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b. | There are
many circumstances that might cause Royce to vote against an issuers board
of directors or management proposal. These would include, among others,
excessive compensation, unusual management stock options, preferential voting and
poison pills. The portfolio managers decide these issues on a case-by-case basis
as described above. |
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c. | A portfolio
manager may, on occasion, determine to abstain from voting a proxy or a specific
proxy item when he or she concludes that the potential benefit of voting is outweighed
by the cost, when it is not in the client accounts best interest to vote. |
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d. | When a client
has authorized Royce to vote proxies on its behalf, Royce will generally not accept
instructions from the clients regarding how to vote proxies. |
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e. | If a security
is on loan under The Royce Funds Securities Lending Program with State Street
Bank and Trust Company (Loaned Securities), the Head of Administration,
or his designee, will recall the Loaned Securities and request that they be delivered
within the customary settlement period after the notice, to permit the exercise
of their voting rights if the number of shares of the security on loan would have
a material effect on The Royce Funds voting power at the up-coming stockholder
meeting. A material effect is defined as any case where the Loaned Securities are
1% or more of a class of a companys outstanding equity securities. Monthly,
the Head of Administration or his designee will review the summary of this activity
by State Street. A quarterly report detailing any exceptions that occur in recalling
Loaned Securities will be given to the Boards. |
Custodian banks are authorized to release all proxy ballots held for Royce client account portfolios to Glass Lewis & Co. for voting, utilizing the Viewpoint proxy voting platform. Substantially all portfolio companies utilize Broadridge to collect their proxy votes.
Under the continuous oversight of the Head of Administration, or his designee, the designated Administrative Assistant is responsible for voting all proxies in a timely manner. Votes are returned to Broadridge using Viewpoint
as ballots are received, generally two weeks before the scheduled meeting date. The issuer can thus see that the shares were voted, but the actual vote cast is not released to the company until 4:00 pm on the day before the meeting. If proxies must be mailed, they go out at least ten business days before the meeting date.
Conflicts of Interest. The designated Administrative Assistant reviews reports generated by Royces portfolio management system (Quest PMS) that set forth by record date, any security held in a Royce client account which is issued by a (i) public company that is, or a known affiliate of which is, a separate account client of Royce (including sub-advisory relationships), (ii) public company, or a known affiliate of a public company, that has invested in a privately-offered pooled vehicle managed by Royce or (iii) public company, or a known affiliate of a public company, by which the spouse of a Royce employee or an immediate family member of a Royce employee living in the household of such employee is employed, for the purpose of identifying any potential proxy votes that could present a conflict of interest for Royce. The Head of Administration, or his designee, develops and updates the list of such public companies or their known affiliates which is used by Quest PMS to generate these daily reports. This list also contains information regarding the source of any potential conflict relating to such companies. Potential conflicts identified on the conflicts reports are brought to the attention of the Head of Administration or his designee by the designated Administrative Assistant. An R&A Compliance Officer then reviews them to determine if business or personal relationships exist between Royce, its officers, managers or employees and the company that could present a material conflict of interest. Any such identified material conflicts are voted by Royce in accordance with the recommendation given by an independent third party research firm (Glass Lewis & Co.). The Head of Administration or his designee maintains a log of all such conflicts identified, the analysis of the conflict and the vote ultimately cast. Each entry in this log is signed by the Chief Investment Officer before the relevant votes are cast.
Recordkeeping. A record of the issues and how they are voted is stored in the Viewpoint system. Copies of all physically executed proxy cards, all proxy statements (with it being permissible to rely on proxy statements filed and available on Edgar) and any other documents created or reviewed that are material to making a decision on how to vote proxies are retained in the Company File maintained by Royces Librarian in an easily accessible place for a period of not less than six years from the end of the fiscal year during which the last entry was made on such record, the first two years at Royces office. In addition, copies of each written client request for information on how Royce voted proxies on behalf of that client, and a copy of any written response by Royce to any (written or oral) client request for information on how Royce voted proxies on behalf of that client will be maintained by Royces Head of Administration and/or Royces Director of Alternative Investments, or their designee (depending on who received such request) for a period of not less than six years from the end of the fiscal year during which the last entry was made on such record, the first two years at Royces office. Royces Compliance Department shall maintain a copy of any proxy voting policies and procedures in effect at any time within the last five years.
- | The Royce
Funds proxy voting records are disclosed annually on Form N-PX (with such
voting records also available at www.roycefunds.com). Proxy voting procedures are
available in the Statement of Additional Information for the open-end funds, in
the annual report on Form N-CSR for the closed-end funds and at www.roycefunds.com. |
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- | Limited Liability
Company and Limited Partnership Accounts proxy voting records are disclosed
to members/partners upon request and proxy voting procedures (along with a summary
thereof) are provided to members/partners annually (and are available at www.roycefunds.com). |
||
- | Separate Accounts
proxy voting records and procedures are disclosed to separate account clients
annually. |
Item 8. Portfolio Managers of Closed-End
Management Investment Companies.
(a)(1) Portfolio Managers of Closed-End
Management Investment Companies (information as of December 31, 2014)
Name | Title | Length of Service | Principal Occupation(s) During Past 5 Years |
Charles M. Royce | President
and member of the Board of Directors of the Registrant |
Since 1986 | Chief Executive
Officer and member of the Board of Managers of Royce & Associates, LLC
(Royce), investment adviser to the Registrant, President and member
of the boards of directors/trustees of the Registrant, Royce Focus Trust, Inc.,
Royce Micro-Cap Trust, Inc. ("RMT"), Royce Global Value Trust, Inc. ,The Royce Fund
, and Royce Capital Fund (collectively, "The Royce Funds"). |
Chris E. Flynn | Assistant
Portfolio Manager* |
Since April 1, 2007 | Assistant
Portfolio Manager of the Registrant (since April 1, 2007); and Principal, Portfolio
Manager and Senior Analyst at Royce (since 1993). |
David A. Nadel | Assistant
Portfolio Manager* |
Since April 1, 2007 | Assistant
Portfolio Manager of the Registrant (since April 1, 2007); Director of International
Research at Royce (since 2010); Portfolio Manager and Senior Analyst at Royce( since
2006); Senior Portfolio Manager at Neuberger Berman Inc. (2004-2006); and Senior
Analyst at Pequot Capital Management, Inc. (2001-2003). |
Lauren A. Romeo | Assistant
Portfolio Manager* |
Since May 1, 2009 | Assistant
Portfolio of the Registrant (since May 1, 2009); Portfolio Manager and Analyst at
Royce (since 2004); Portfolio Manager at Dalton, Grenier, Hartman & Maher
(since 2001); an Analyst with Legg Mason Funds Management (2000-2001); and an Analyst
with T. Rowe Price Group (1996-2000). |
* Assistant Portfolio Managers may have investment discretion over a portion of the Registrants portfolio subject to the supervision of Registrants Portfolio Manager.
(a)(2) Other Accounts Managed by Portfolio Manager and Potential Conflicts of Interest (information as of December 31, 2014)
Name of
Portfolio Manager |
Type of Account | Number
of Accounts Managed |
Total Assets Managed |
Number
of Accounts Managed for which Advisory Fee is Performance-Based |
Value of
Managed Accounts for which Advisory Fee is Performance Based |
Charles M. Royce | |||||
Registered
investment companies |
16 | $18,713,665,670 | 2 | $1,619,442,612 | |
Private pooled
investment vehicles |
1 | $26,347,186 | 1 | $26,347,186 | |
Other accounts* | 12 | $62,833,243 | - | - | |
Chris E. Flynn | |||||
Registered
investment companies |
5 | $6,427,192,932 | 2 | $1,619,442,612 | |
Private pooled
investment vehicles |
- | - | - | - | |
Other accounts* | - | - | - | - | |
David A. Nadel | |||||
Registered
investment companies |
8 | $1,499,239,064 | 1 | $1,231,954,638 | |
Private pooled
investment vehicles |
- | - | - | - | |
Other accounts* | - | - | - | - | |
Lauren A. Romeo | |||||
Registered
investment companies |
6 | $13,505,769,408 | 1 | $1,231,954,638 | |
Private pooled
investment vehicles |
3 | $819,156,888 | - | - | |
Other accounts* | - | - | - | - |
*Other accounts
include all other accounts managed by the Portfolio Manager in either a professional
or personal capacity except for personal accounts subject to pre-approval and reporting
requirements under the Registrants Rule 17j-1 Code of Ethics. |
Conflicts of Interest
The fact that a Portfolio Manager has day-to-day management responsibility for more than one client account may create actual, potential or only apparent conflicts of interest. For example, the Portfolio Manager may have an opportunity to purchase securities of limited availability. In this circumstance, the Portfolio Manager is expected to review each accounts investment guidelines, restrictions, tax considerations, cash balances, liquidity needs and other factors to determine the suitability of the investment for each account and to ensure that his or her managed accounts are treated equitably. The Portfolio Manager may also decide to purchase or sell the same security for multiple managed accounts at approximately the same time. To address any conflicts that this situation may create, the Portfolio Manager will generally combine managed account orders (i.e., enter a "bunched" order) in an effort to obtain best execution or a more favorable commission rate. In addition, if orders to buy or sell a security for multiple accounts managed by common Portfolio Managers on the same day are executed at different prices or commission rates, the transactions will generally be allocated by Royce & Associates, LLC (Royce) to each of such managed accounts at the weighted average execution price and commission. In circumstances where a pre-allocated bunched order is not completely filled, each account will normally receive a pro-rated portion of the securities based upon the accounts level of participation in the order. Royce may under certain circumstances allocate securities in a manner other than pro-rata if it determines that the allocation is fair and equitable under the circumstances and does not discriminate against any account.
As described below, there is a revenue-based component of each Portfolio Managers Performance-Related Variable Compensation and the Portfolio Managers also receive Firm-Related Variable Compensation based on revenues (adjusted for certain imputed expenses) generated by Royce. In addition, Charles M. Royce receives variable compensation based on Royces retained pre-tax profits from operations. As a result, the Portfolio Managers may receive a greater relative benefit from activities that increase the value to Royce of The Royce Funds and/or other Royce client accounts, including, but not limited to, increases in sales of Registrants shares and assets under management.
Also, as described above, the Portfolio Managers generally manage more than one client account, including, among others, registered investment company accounts, separate accounts and private pooled accounts managed on behalf of institutions (e.g., pension funds, endowments and foundations) and for high-net-worth individuals. The appearance of a conflict of interest may arise where Royce has an incentive, such as a performance-based management fee (or any other variation in the level of fees payable by the Registrant or other Royce client accounts to Royce), which relates to the management of one or more of The Royce Funds or accounts with respect to which the same Portfolio Manager has day-to-day management responsibilities. Except as described below, no Royce Portfolio Managers compensation is tied to performance fees earned by Royce for the management of any one client account. Although variable and other compensation derived from Royce revenues or profits is impacted to some extent, the impact is relatively minor given the small percentage of Royce firm assets under management for which Royce receives performance-measured revenue. Notwithstanding the above, the Performance-Related Variable Compensation paid to Charles M. Royce as Portfolio Manager of two registered investment company accounts (the Registrant and RMT) is based, in part, on performance-based fee revenues. The Registrant and RMT pay Royce a fulcrum fee that is adjusted up or down depending on the performance of the Fund relative to its benchmark index.
Finally, conflicts of interest may arise when a Portfolio Manager personally buys, holds or sells securities held or to be purchased or sold for the Registrant or other Royce client account or personally buys, holds or sells the shares of one or more of The Royce Funds. To address this, Royce has adopted a written Code of Ethics designed to prevent and detect personal trading activities that may interfere or conflict with client interests (including Registrants stockholders interests). Royce generally does not permit its Portfolio Managers to purchase small- or micro-cap securities for their personal investment portfolios.
Royce and The Royce Funds have adopted certain compliance procedures which are designed to address the above-described types of conflicts. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises.
(a)(3) Description
of Portfolio Manager Compensation Structure (information as of December 31, 2014) |
Royce seeks to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment professionals. All Portfolio Managers, receive from Royce a base salary, Performance-Related Variable Compensation (generally the largest element of each Portfolio Managers compensation with the exception of Charles M. Royce), Firm-Related Variable Compensation based primarily on registered investment company and other client account revenues generated by Royce and a benefits package. Portfolio Manager compensation is reviewed and may be modified from time to time as appropriate to reflect changes in the market, as well as to adjust the factors used to determine variable compensation. Except as described below, each Portfolio Managers compensation consists of the following elements:
- | BASE SALARY.
Each Portfolio Manager is paid a base salary. In setting the base salary, Royce
seeks to be competitive in light of the particular Portfolio Managers experience
and responsibilities. |
||
- | PERFORMANCE-RELATED
VARIABLE COMPENSATION. Each Portfolio Manager receives quarterly Performance-Related
Variable Compensation that is either asset-based, or revenue-based and therefore
in part based on the value of the net assets of the account for which he or she
is being compensated, determined with reference to each of the registered investment
company and other client accounts they are managing. The revenue used to determine
the quarterly Performance-Related Variable Compensation received by Charles M. Royce
that relates to each of the Registrant and RMT is performance-based fee revenue.
For all Portfolio Managers, the Performance-Related Variable Compensation applicable
to the registered investment company accounts managed by the Portfolio Manager is
subject to downward adjustment or elimination based on a combination of 3-year,
5-year risk and 10-year risk-adjusted pre-tax returns of such accounts relative
to all small-cap objective funds with three years of history tracked by Morningstar
(as of December 31, 2014 there were 395 such Funds tracked by Morningstar), the 5-year
absolute returns of such accounts relative to 5-year U.S. Treasury Notes and absolute
returns over the prior full market cycle and current cycle to date vs. the accounts benchmark. The Performance-Related Variable Compensation applicable to non-registered
investment company accounts managed by a Portfolio Manager is not subject to performance-related
adjustment. |
Payment of the Performance-Related Variable Compensation may be deferred, and any amounts deferred are forfeitable, if the Portfolio Manager is terminated by Royce with or without cause or resigns. The amount of the deferred Performance-Related Variable Compensation will appreciate or depreciate during the deferral period, based on the total return performance of one or more Royce-managed registered investment company accounts selected by the Portfolio Manager at the beginning of the deferral period. The amount deferred will depend on the Portfolio Managers total direct, indirect beneficial and deferred unvested investments in the Royce registered investment company account for which he or she is receiving portfolio management compensation.
- |
FIRM-RELATED
VARIABLE COMPENSATION. Each Portfolio Manager receives quarterly variable compensation
based on Royces net revenues. |
||
- |
BENEFIT PACKAGE.
Each Portfolio Manager also receives benefits standard for all Royce employees,
including health care and other insurance benefits, and participation in Royces
401(k) Plan and Money Purchase Pension Plan. From time to time, on a purely discretionary
basis, Portfolio Managers may also receive options to acquire stock in Royces
parent company, Legg Mason, Inc. Those options typically represent a relatively
small portion of a Portfolio Managers overall compensation. |
Charles M. Royce, in addition to the above-described compensation, also receive variable compensation based on Royces retained pre-tax operating profit. This variable compensation, along with the Performance-Related Variable Compensation and Firm-Related Variable Compensation, generally represents the most significant element of Mr. Royces compensation. A portion of the above-described compensation payable to Mr. Royce relates to his responsibilities as Royces Chief Executive Officer and President of The Royce Funds.
(a)(4) Dollar Range of Equity Securities in Registrant Beneficially Owned by Portfolio Manager (information as of December 31, 2014)
The following table shows the dollar range of the Registrants shares owned beneficially and of record by the Portfolio Managers, including investments by his immediate family members sharing the same household and amounts invested through retirement and deferred compensation plans.
Portfolio
Manager |
Dollar
Range of Registrants Shares Beneficially Owned |
Charles M. Royce |
Over $1,000,000 |
Chris E. Flynn |
$100,001 to $500,000 |
David A. Nadel |
None |
Lauren A. Romeo |
$100,001 to $500,000 |
(b) Not Applicable
Item 9. Purchases of Equity Securities
by Closed-End Management Investment Company and Affiliated Purchasers. Not Applicable
Item 10. Submission of Matters to a Vote of Security Holders. Not Applicable.
Item 11. Controls and Procedures.
(a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrants Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.
(b) Internal Control over Financial Reporting. There were no significant changes in Registrants internal control over financial reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses during the second fiscal quarter of the period covered by this report.
(a)(2) Separate certifications by the Registrants Principal Executive Officer and Principal Financial Officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not Applicable
(b) Separate certifications by the Registrants Principal Executive Officer and Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ROYCE VALUE TRUST, INC.
BY: |
/s/ Charles
M. Royce |
Charles
M. Royce |
|
President
|
Date: March 5, 2015
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
ROYCE VALUE TRUST, INC. | ROYCE VALUE TRUST, INC. | ||
BY: |
/s/ Charles
M. Royce |
BY: | /s/ John D.
Diederich |
Charles
M. Royce |
John D.
Diederich |
||
President
|
Chief Financial
Officer |
||
Date: |
March 5,
2015 |
Date: March
5, 2015 |
EXHIBITS
Item 12(a)(1):
September 2003, as revised
through February 16, 2011
CODE OF ETHICS
FOR COVERED OFFICERS OF THE ROYCE FUNDS
The Boards of Directors/Trustees of The Royce Fund, Royce Capital Fund, Royce Value Trust, Inc., Royce Micro-Cap Trust, Inc., Royce Focus Trust, Inc. and Royce Global Value Trust, Inc. (each, a Fund and collectively, The Royce Funds) have adopted the following Code of Ethics (the Code) applicable to its President, Chief Financial Officer and Manager of Fund Accounting (Covered Officers) of The Royce Funds to ensure the continuing integrity of financial reporting and transactions. The names of the Covered Officers covered by the Code are listed on Schedule A hereto.
I. |
Separate
Code |
This Code is the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act of 2002. The Funds and Royce & Associates, LLCs (R&A), the investment adviser to The Royce Funds, code of ethics under Rule 17j-1 under the Investment Company Act of 1940 (the Investment Company Act) are separate requirements applying to the Covered Officers and others, and are not part of this Code. In addition to this Code, the Investment Company Act, and the Investment Advisers Act of 1940 (the Advisers Act) and rules promulgated thereunder contain numerous specific provisions designed to protect the Funds from conflicts of interest and overreaching. Any conduct by Covered Officers required by specific Investment Company Act or Advisers Act provisions or the rules thereunder is presumed to be in compliance with this Code. Each Covered Officer is accountable for his or her adherence to this Code. Any violation of this Code by a Covered Officer may result in disciplinary action, including immediate dismissal.
II. |
Requirements
|
All Covered Officers must:
1. |
Engage in
and promote honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional relationships; |
||
2. |
Act responsibly
in producing and produce, full, fair, accurate, timely and understandable disclosure
in reports and documents that the Funds file with, or submit to, the Securities
and Exchange Commission (the SEC) and in other public communications
made by each of the Funds; |
||
3. |
Comply with
applicable governmental laws, rules and regulations; |
||
4. |
Promptly report
suspected material violations of this Code, including violations of securities laws
or other laws, rules and regulations applicable to a Fund, to R&As
General Counsel and the Funds Audit Committee. |
Each Covered Officer must act with integrity, including being honest and candid while still maintaining the confidentiality of information where required by law, and place the interests of The Royce Funds before the Covered Officers own personal interests.
Each Covered Officer is required to familiarize himself or herself with the disclosure requirements applicable to each of the Funds and must not knowingly misrepresent or fail to disclose, or cause others to misrepresent or fail to disclose, material facts about a Fund to others, including but not limited to officers of and counsel to The Royce Funds, and their respective independent directors, independent auditors and governmental regulators.
III. |
Avoidance
of Conflicts |
The overarching principle of this Code is that the personal interests of a Covered Officer should not be placed improperly before the interests of The Royce Funds. As a result, each Covered Officer must: (i) handle any actual or apparent conflict of interest in an ethical manner, (ii) not use his or her personal influence or personal relationships to influence investment decisions or financial reporting by a Fund whereby the Covered Officer would benefit personally (directly or indirectly) to the detriment of the Fund; (iii) not cause a Fund to take action, or fail to take action, for the personal benefit of the Covered Officer rather than the benefit of such Fund; and (iv) not use for his or her personal benefit (directly or indirectly) any material non-public knowledge pertaining to a Fund.
Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between The Royce Funds and R&A, of which the Covered Officers are also officers and/or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for a Fund or for R&A, or for both), be involved in establishing policies and implementing decisions that will have different effects on R&A and the Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationship between each of The Royce Funds and R&A and is consistent with the performance by the Covered Officers of their duties as officers and/or employees of The Royce Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Advisers Act, such activities will be deemed to have been handled ethically.
The following conflict of interest situations must be disclosed by a Covered Officer to, and pre-approved in writing by, the General Counsel if material. Examples of these include:
|
service as
a director on the board of any public company; |
||
|
any ownership
interest in, or any consulting or employment relationship with, any of The Royce
Funds service providers, other than its investment adviser, principal underwriter,
administrator or any affiliated person thereof; or |
||
|
a direct or
indirect financial interest in commissions, transaction charges or spreads paid
by any Fund for effecting portfolio transactions. |
IV. |
Materiality
|
In the event a Covered Officer has any doubt as to (i) whether a suspected violation of this Code would be considered material, (ii) whether information relating to a Fund is of a material nature and therefore subject to public disclosure, (iii) whether non-public knowledge pertaining to a Fund is material in nature, or (iv) whether a particular conflict of interest is material, he or she should seek the advice of R&As General Counsel.
V. |
Compliance
and Annual Acknowledgment |
Each Covered Officer is required: (i) upon receipt of the Code, to sign and submit to R&As General Counsel an acknowledgment stating that he or she has received, read and understands the Code; (ii) annually thereafter to submit a statement to R&As General Counsel confirming that he or she has received, read and understands the Code and has complied with the requirements of the Code; (iii) not to retaliate against any employee subordinate to the Covered Officer for reports of potential violations that are made in good faith; and (iv) to notify R&As General Counsel, as appropriate, if the Covered Officer observes any irregularities or violations of this Code.
VI. |
Enforcement
of the Code |
The Royce Funds will adhere to the following procedures when investigating and enforcing this Code: (i) R&As General Counsel will take all appropriate action to investigate any potential violations reported to him or her; (ii) if R&As General Counsel determines that a violation has occurred, he or she will take all appropriate disciplinary or preventive action and inform the Funds Board of Directors/Trustees of his or her decision; (iii) all changes to or waivers of this Code will, to the extent required, be disclosed on Form N-CSR or otherwise as required by SEC rules; and (iv) any waiver sought by the President of The Royce Funds will be considered by The Royce Funds Audit Committees prior to approval of the waiver.
VII. |
Amendments
|
Except with respect to Schedule A hereto, which may be updated at any time, this Code may be amended only by the Board of Directors/Trustees of each Fund at a meeting of such Board duly called for that purpose.
VIII.
|
Confidentiality
|
All reports and records prepared or maintained pursuant to this Code will be considered confidential and will be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the appropriate Board and its counsel and R&A and its affiliated persons.
IX. |
Internal
Use |
The Code is intended solely for internal use by The Royce Funds and does not constitute the admission, by or on behalf of any Fund, as to any fact, circumstances or legal conclusion.
Date: |
September
17, 2003, as revised through |
February 16,
2011 |
SCHEDULE A
Charles M. Royce
John D. Diederich
Mary Macchia
I, Charles M. Royce, certify that:
1. I have reviewed this report on Form N-CSR of Royce Value Trust, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
d) disclosed in this report any change in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: March 5, 2015
/s/ Charles
M. Royce |
Charles M.
Royce |
President |
I, John D. Diederich, certify that:
1. I have reviewed this report on Form N-CSR of Royce Value Trust, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
d) disclosed in this report any change in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: March 5, 2015
/s/ John
D. Diederich |
John D. Diederich |
Chief Financial
Officer |
Name of Issuer: ROYCE VALUE TRUST, INC.
In connection with the Report on Form N-CSR of the above-named issuer that is accompanied by this certification, the undersigned hereby certifies, to his knowledge, that:
1. The Report fully complies with the requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all materials respects, the financial condition and results of operations of the issuer.
Date: March 5, 2015
/s/ Charles
M. Royce |
|
Charles M.
Royce |
|
President |
Name of Issuer: ROYCE VALUE TRUST, INC.
In connection with the Report on Form N-CSR of the above-named issuer that is accompanied by this certification, the undersigned hereby certifies, to his knowledge, that:
1. The Report fully complies with the requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all materials respects, the financial condition and results of operations of the issuer.
Date: March 5, 2015
/s/ John
D. Diederich |
|
John D. Diederich |
|
Chief Financial
Officer |