The Royce Funds
Video
Where Are Small-Caps Headed Next?
by The Royce Funds, 11/7/17
Co-CIO Francis Gannon on the state of the current small-cap market, the prospects for value's leadership, and why cyclical businesses with global exposure continue to look attractive.
Video
Will Amazon Kill All Retail?
Portfolio Manager Charlie Dreifus looks at the impact of e-commerce and how it’s affected his investments in small-cap retailers.
Commentary
The September Shift to Small-Cap Value + 5 More Observations on 3Q17
Co-CIO Francis Gannon on a September Shift for small-caps (and interest rates) and why it could mean good news for cyclical stocks.
Video
Why Asset Allocators Should Consider International Small-Cap
by The Royce Funds, 9/28/17
Portfolio Manager David Nadel describes why international small-cap is an asset class worth considering.
Commentary
Disconnected Defensives
Co-CIO Francis Gannon sizes up the small-cap market, which looks primed for a leadership shift to cyclicals.
Video
Is It Time for International Small-Cap?
by The Royce Funds, 8/23/17
Portfolio Manager David Nadel makes the case for international small-caps.
Commentary
Why Go Global with Small-Caps?
Co-CIO Francis Gannon looks at recent data and sees encouraging trends for small-caps cyclicals with growing earnings and global exposure.
Video
Where Chuck Royce Thinks Small-Caps are Headed
by The Royce Funds, 8/1/17
Portfolio Manager Chuck Royce discusses the first half of 2017 with Co-CIO Francis Gannon, and what he expects to happen next.
Commentary
Small-Cap's Road Back to Normal
Portfolio Manager Chuck Royce and Co-CIO Francis Gannon look at both 2Q17 and the year’s first half and see a consolidating asset class ready to make its next move up.
Commentary
Small-Cap: Healthy Rotation or Rally at Risk?
Co-CIO Francis Gannon looks at recent small-cap results and sees a consolidating asset class setting the stage for its next move up.
Video
Why The 'Amazon Effect' Matters
by The Royce Funds, 6/26/17
Portfolio Manager Steven McBoyle discusses the significance of the ‘Amazon Effect’ and its effects on e-commerce and small-cap retailers.
Video
Chuck Royce's Unique Approach to Financials
by The Royce Funds, 6/19/17
Portfolio Manager Chuck Royce discusses why financials continue to play an important role in his portfolios.
Commentary
Running in Place
Year-to-date through 6/9/17, the Russell 2000 Index advanced 5.3%. More than half of that result, however, has come during a so-far highly bullish June.
Video
A Long Runway for Small-Cap Value?
by The Royce Funds, 5/19/17
Co-CIO Francis Gannon explains what investors should know about the current state of small-caps.
Commentary
So Far, So Good for Small-Cap Earnings
Co-CIO Francis Gannon gives an update on the small-cap earnings season.
Video
Has There Been a Regime Change in Small-Cap?
by The Royce Funds, 5/10/17
Four small-cap specialists consider the change in leadership from growth to value within the asset class.
Video
Chuck Royce: What's Next for Small-Caps
by The Royce Funds, 4/27/17
Chuck Royce offers key takeaways from 1Q17 and a look at what's next for small-caps.
Commentary
Are Small-Cap Earnings in Trouble?
Co-CIO Francis Gannon looks at the earnings picture for small-caps versus large-caps and sees a silver lining for earnings-focused active managers.
Commentary
A Small-Cap Pause That Refreshes?
Co-CIO Francis Gannon analyzes the cross-currents and reversals in 1Q17 and details why the small-cap rally has room to run.
Video
Be Prepared for Increased Volatility
by The Royce Funds, 3/27/17
What increased volatility could mean for small-cap investors.
Video
Concerned About Interest Rate Risk? Consider Small-Caps
by The Royce Funds, 3/14/17
Senior Investment Strategist Steve Lipper looks at the correlation of small-cap stock performance with rising interest rates.
Commentary
High Prices, Low Volatility
The current environment, one marked by ample political volatility and but little market volatility, looks unsustainable to us.
Video
How Does a Deep Value Investor Find New Ideas and Manage Risk?
by The Royce Funds, 3/1/17
Portfolio Manager Bill Hench explains how he finds opportunities, avoids value traps, and manages risk using his deep value strategy.
Commentary
A Most Wonderful Year For Small-Caps
2016 was a terrific year for small-cap stocks—and an even better year for small-cap value and cyclical sectors.
Commentary
Are Small-Caps Getting Back to Normal?
Co-CIO Francis Gannon studies recent changes in the market, which seems to be consolidating, and how this could impact small-cap investors.
Video
Reassessing Investment Opportunities After a Strong Year
by The Royce Funds, 2/9/17
Portfolio Manager Charlie Dreifus discusses the strong 2016 for small-caps and what he thinks might come next in 2017.
Commentary
4 Small-Cap Specialists on 2017
by The Royce Funds, 1/19/17
Small-caps had a great run in 2016, but what should investors expect from 2017? Four veteran small-cap portfolio managers share how key developments in 2016 are shaping their 2017 outlook and portfolio positioning.
Commentary
2016: A Terrific Year for Small-Caps
Chairman Chuck Royce and Co-CIO Francis Gannon look at a terrific year for small-cap stocks, capped by a bullish 4Q16, and explain why they think the good times for value (and small-cap active management) are just beginning.
Commentary
A Dramatic Rebound for Small-Caps
2016 was a terrific year for small-cap stocks that included some key reversals: The Russell 2000 turned around 2015's negative result, value outperformed growth, and cyclicals beat defensives.
Video
2 Tools Experts Use to Measure Performance
by The Royce Funds, 12/14/16
Director of Risk Management Gunjan Banati explains why rolling returns and risk-adjusted returns are more robust ways to look at fund performance.
Commentary
Small-Caps Enjoy Their Best November Yet
Co-CIO Francis Gannon on the post-election run that gave small-caps their best November in the history of the Russell 2000.
Video
What Should Asset Allocators Know About Value-Led Markets?
by The Royce Funds, 11/30/16
Our recent research into the small-cap market shows a connection that many asset allocators may not be aware of.
Commentary
What Does a Post-Trump Market Mean for Investors?
Portfolio Manager Charlie Dreifus on the market's enthusiastic response to Trump's election and what to watch for going forward.
Video
The Small-Cap Bull Market Has Legs
by The Royce Funds, 11/4/16
Chuck Royce discusses the small-cap market today and why he believes the transition from growth to value will continue.
Commentary
Is the Current Small-Cap Cycle Different Than Large-Cap's?
Co-CIO Francis Gannon explains why the different cycles for small-cap and large-cap stocks should matter to investors.
Commentary
Is The Fed Out of Options?
Portfolio Manager Charlie Dreifus explains the Fed's conundrum, why there's too much hesitation in the market and economy, and the challenges to subsequent growth.
Video
How Are Leading Companies Adapting to a Low Return World?
by The Royce Funds, 10/18/16
Portfolio Manager Steven McBoyle explains why he likes high-moat businesses with sustainable earnings power that have the capacity to reinvest.
White Paper
When does active beat passive in small-cap?
by The Royce Funds, 10/17/16
Can the shift to value account for the improved relative results for many small-cap active managers in the last year?
Commentary
Small-Cap Strength Broadens in 3Q16
Chairman Chuck Royce and Co-CIO Francis Gannon look at broadening small-cap strength in the volatile third quarter, discuss why value should continue to lead in the current cycle, and explain where they are finding opportunities.
Commentary
The Stealth Bull Market for Small-Caps Rolls On
Co-CIO Francis Gannon discusses small-cap strength in 3Q16 and why, despite potential near-term volatility, history suggests the small-cap rally has room to run.
Video
What Is The Connection Between Value-Led Small-Cap Markets and Success for Active Management?
by The Royce Funds, 9/28/16
Senior Investment Strategist Steve Lipper takes a close look at the connection between value-led small-cap markets, success for active management, and what might explain the connection.
Commentary
The Small-Cap Rally Is Broadening
What's making this quarter so interesting for small-caps? Co-CIO Francis Gannon explains.
Video
The Benefits of a Lower Volatility Strategy in an Uncertain Market
by The Royce Funds, 9/20/16
Portfolio Manager Jay Kaplan explains the benefits of lower volatility stocks in uncertain markets, including downside protection, and why he finds dividend-paying companies attractive.
Commentary
Strong Rebound for Small-Cap Stocks as Fears Dissipate
From its year-to-date 2016 low on 2/11/16 through 8/11/16, the Russell 2000 Index was up an eye-catching 29.9%. While domestic small-caps are leading off that low so far, large-caps have also put up strong double-digit returns.
Video
3 Investment Ideas from Chuck Royce
by The Royce Funds, 8/15/16
Chuck Royce tells Co-CIO Francis Gannon why he is bullish on industrial automation, alternative asset managers, and select investment banks.
Commentary
A Bear, A Brexit, and A Welcome Start to 2016
The market's pronounced shift toward companies with attractive to reasonable valuations, solid balance sheets, and strong profitability in the first half of 2016 helped many active managers, ourselves included.
Video
Why Are the Markets Prone to Black Swans?
by The Royce Funds, 8/2/16
Portfolio Manager Charlie Dreifus discusses how the current climate of slow growth, high valuations, and interventionist monetary policy makes the markets potentially vulnerable to black swan events.
Video
Equity Market Highs, Bond Yields at Record Lows. Who's Right?
by The Royce Funds, 7/29/16
With the post-Brexit environment in the U.S. presenting a classic disconnect between the equity and bond markets, Co-CIO Francis Gannon looks at what might be happening in the U.S. economy.
Commentary
Small-Cap Value Leads 2Q16 Despite Brexit Interruption
A once mildly bullish quarter turned wildly volatile in the wake of Brexit. The small-cap indexes then rebounded, recouping their losses to finish the quarter with modest gains. Despite the volatility, we saw certain longer-term trends continue to progress throughout the quarter.
Video
Examining an Absolute Value Approach
by The Royce Funds, 7/7/16
Portfolio Manager Charlie Dreifus describes his absolute value approach and discusses why earnings play such a critical role.
Commentary
Investors: Mind the Gap in GAAP
The increased use of non-GAAP practices is a worrisome trend that occludes transparency and can have a meaningful effect on stock prices. Portfolio Managers Charlie Dreifus and Steven McBoyle explain why.
Commentary
The Economy's Journey into Uncharted Waters
With negative yields and financial experimentation ongoing and the world still dependent on monetary stimulus, Portfolio Manager Charlie Dreifus sees high-quality, inexpensive, and dividend-growing businesses as the best choice in a still challenging environment.
Video
Is M&A in Small-Caps Accelerating?
by The Royce Funds, 5/26/16
Portfolio Manager Bill Hench discusses the increase in M&A activity within small-cap and his outlook for this trend.
Video
Signs of a Market Rotating Back to Value
by The Royce Funds, 5/26/16
After a dramatic turnaround in performance in the first quarter, Royce's Co-CIOs, President Chris Clark and Managing Director Francis Gannon, discuss recent market dynamics and the strategic steps we've taken to enhance processes around our core investment discipline.
Video
Does the Shift to Value Signal a Shift to Active Management?
by The Royce Funds, 5/5/16
CEO Chuck Royce and Co-CIO Francis Gannon discuss the first quarter, which saw a correction and a powerful rally, and the prospects for active management following the transitions from growth to value and non-earners to earners.
Commentary
Small-Caps Shift in a Wild Quarter
In a volatile quarter full of downs and ups, equity returns wound up close to where we started in 2016. Underlying these unremarkable results was the real story—the leadership shift to small-cap value.
Video
4 Reversals in the Market
by The Royce Funds, 3/21/16
Royce Co-CIO Francis Gannon talks about the significance of four clear reversals in the market that have occurred within the past six months. How will the changing environment impact active investors?
Video
Royce Opportunity Fund Review and Outlook
by The Royce Funds, 2/19/16
Portfolio Manager Bill Hench looks at the factors that impacted Royce Opportunity Fund in 2015, and explains why he is optimistic about this broadly diverse, deep value portfolio for 2016.
Video
Chuck Royce & Francis Gannon: Small-Cap Review and Outlook
by The Royce Funds, 1/19/16
CEO Chuck Royce and Co-CIO Francis Gannon reflect on 2015 and discuss the importance of the market’s gradual return to a normal range of returns, the uneventful Fed rate increase, the impact of widening credit spreads, and the role of active management.
Video
Is Biotech in a Bubble?
by The Royce Funds, 12/22/15
Portfolio Manager Carl Brown discusses valuations in the biotech industry. What does he look for in an area that led the market before correcting in 2015's third quarter?
Video
Growth Themes Benefiting from a Steady Economy
by The Royce Funds, 12/22/15
Portfolio Manager Chip Skinner talks about the healthcare and business service sectors where he continues to see new ideas.
Video
How Does Market Volatility Usually Affect Investing in Small-Caps?
by The Royce Funds, 12/22/15
The post-Financial Crisis period has been an environment largely characterized by above-average returns with few meaningful corrections. Portfolio Manager Jay Kaplan talks about the importance of stock market volatility and the ways in which he attempts to manage risk by paying close attention to valuation and the expectations of Wall Street.
Video
Managing a Portfolio of Premier Businesses
by The Royce Funds, 11/25/15
Portfolio Managers Lauren Romeo and Steven McBoyle share the lessons they've learned from working with Chuck Royce and how they work together to build the portfolio of premier businesses in Royce Premier Fund.
Video
What Makes This Growth Fund Unique?
by The Royce Funds, 11/25/15
Portfolio Manager Chip Skinner describes the approach that he and assistant portfolio manager Carl Brown are using in Royce Smaller-Companies Growth Fund. Our version of a growth portfolio, the Fund uses a distinctive Growth at a Reasonable Price (“GARP”) approach to look for long-term growth opportunities.
Video
How Should an Asset Allocator Think About The Royce Funds Today?
by The Royce Funds, 11/25/15
Portfolio Manager Steve Lipper talks with Co-CIO Francis Gannon about why an important ingredient in any recipe for asset allocation is measured by one’s view of the economy. This is why in The Royce Funds, we not only emphasize consistency, discipline, and risk awareness in how we operate, but also offer distinctive strategies designed to perform differently in different market environments.
Video
3 Unusual Aspects of the Current Market
by The Royce Funds, 11/12/15
Co-CIO Francis Gannon talks about how abnormally high returns are unsustainable, why the fundamental laws of capitalism will once again reward profitable companies, and how investor preferences for lower quality and more speculative growth over the past several years have given the kinds of companies we want to own for the long term favorable valuations.
Video
Will Rate Increases Impact Investing in Dividend-Paying Companies?
by The Royce Funds, 11/12/15
Portfolio Manager Jay Kaplan talks about why he believes a rise in interest rates won't have as high an impact on those strategies that seek long-term total return as opposed to those that mostly focus on high yield.
Video
Chuck Royce on the Current State of the Small-Cap Market
by The Royce Funds, 11/2/15
The small-cap market finished 3Q15 with a double-digit decline, in many ways similar to the correction investors saw around this same time last year. CEO Chuck Royce sits down with Co-CIO Francis Gannon to discuss why he believes corrections are a sign of healthy market behavior, the importance of risk management in the small-cap space, and why he thinks a new market cycle will favor companies with earnings.
Video
Looking for Enduring Franchises
by The Royce Funds, 10/16/15
Royce Premier Fund seeks quality-oriented companies, those with a proven ability to compound wealth over long periods of time, structural advantages within their industry, and high, consistently strong returns on invested capital.
Video
Gain Exposure to Opportunities in the Global Financial Industry
by The Royce Funds, 10/16/15
CEO and Portfolio Manager Chuck Royce talks about taking a non-traditional approach to investing in financials and how we try to benefit from both secular trends and our own insights as asset managers.
Commentary
Recent Volatility Signals a Market in Transition
CEO Chuck Royce and Co-CIO Francis Gannon talk about why they believe the decline for equities in 3Q15 is part of the market transitioning back to more historically typical performance patterns, why a rate hike could be positive for small-caps and stocks as a whole, how history reveals the importance of discipline, the necessity of diversification within the small-cap asset class, and more.
Video
Exploiting Market Inefficiencies
by The Royce Funds, 9/28/15
While relatively more volatile than some of our other products and larger-cap peers, Bill Hench attempts to manage risk in his fund by utilizing four distinct investment themes that each focus, first and foremost, on valuation and a company's ability to turn around its business.
Commentary
Searching for Sustainable Growth in Malaysia
As an active manager with a value orientation, Portfolio Manager Dilip Badlani seeks to locate inexpensive companies helmed by management teams that have demonstrated an ability to consistently execute plans to grow their business irrespective of economic conditions. Though not without its challenges, Malaysia's history of perseverance makes it an attractive market for disciplined and patient investors.
Video
Near-Term Headwinds Offer Attractive Buying Opportunities
by The Royce Funds, 9/1/15
With many companies in more economically sensitive sectors of the small-cap market poised for incremental margin expansion and accelerated earnings growth as the U.S. economy continues down the path of normalization, Portfolio Managers Steven McBoyle and Lauren Romeo are trying to take advantage of current headwinds that should ultimately reverse with more robust economic growth.
Video
U.S. Small-Caps: A Look Forward and a Look Back
by The Royce Funds, 9/1/15
While we have recently witnessed extraordinary runs from certain sectors of the small-cap market, Portfolio Manager Bill Hench believes a rally for many stocks in the small-cap universe, especially those more closely tied to domestic GDP, is still in the offing.
Commentary
Is the Small-Cap Market Out of Joint?
While results for most stocks in the first half were decidedly bullish, the primary drivers of performance continue to be unsettling—especially for those with an active, risk-conscious approach who’ve lagged in an environment that has often shown favor to highly levered, non-earning, and more speculative businesses. The question is—when will the speculative bubble burst?
Video
Trying to Profit from Low Expectations
by The Royce Funds, 7/15/15
Portfolio Manager Jay Kaplan talks about how he manages risk, the advantages of knowing a company's history well, where he is currently finding value in the small-cap market, portfolio positioning, and more.
Commentary
More Volatility: A Positive Environment for Active Managers
Dating from the year-to-date low for the 10-Year Treasury on January 30 through the end of the first half, we have observed promising signs that the market may be taking greater strides toward normalization. CEO Chuck Royce and Co-CIO Francis Gannon discuss how higher rates might benefit bottom-up stock pickers, the potential for quality companies to regain leadership as volatility increases, the possible consequences of global economic recovery for both domestic and non-U.S. small-cap stocks, and the favorable landscape for consumers and its effect on our portfolio positioning.
Video
Managing Risk by Investing in Dividend-Paying Stocks
by The Royce Funds, 6/17/15
Small-cap is an asset class that has historically been associated with increased volatility. We have always believed that dividends, plentiful in the small-cap space, can help mitigate some of that risk. But what are we looking for in the dividend-paying companies in which we invest? Portfolio Manager Jay Kaplan and Co-CIO Francis Gannon discuss.
Video
Looking for Long-Term Growth
by The Royce Funds, 6/17/15
Royce Smaller-Companies Growth Fund (formerly Royce Value Plus Fund) looks for growth at a reasonable price. Portfolio Managers Chip Skinner and Carl Brown discuss their criteria and the themes in which they're currently interested.
Video
Can a Slow-Growth Environment Create Opportunities?
by The Royce Funds, 6/4/15
Portfolio Manager Bill Hench on areas of the small-cap consumer market that he currently finds attractive, using volatility to purchase stocks at highly attractive prices, the effect a rise in rates might have on some of his holdings, and more.
Video
Positioned for Increased Consumer Spending
by The Royce Funds, 6/4/15
Portfolio Managers Chip Skinner and Carl Brown on the potential benefits of current U.S. economic conditions and the investment opportunities they are creating.
Video
The Market and U.S. Economy from a Small-Cap Perspective
by The Royce Funds, 5/27/15
Portfolio Manager and Principal Jay Kaplan discusses current market and economic conditions and what he's hearing from company management teams, the effect energy prices are having on some of his holdings, and Royce's competitive advantage within the small-cap space.
Video
Collecting High-Quality Stocks for the Long Term
by The Royce Funds, 5/27/15
Royce Premier Fund, which has more than 20 years of history, represents the firm's highest conviction stocks. CEO Chuck Royce talks with Co-CIO Francis Gannon about how the portfolio is constructed and some of the characteristics prevalent in the portfolio today.
Video
What's Driving M&A in the Healthcare Space?
by The Royce Funds, 5/14/15
Portfolio Manager Carl Brown believes that cash-rich corporate balance sheets and increased competitiveness in the healthcare universe will make smaller companies attractive targets for M&A activity.
Video
Energy, Interest Rates, and Risk Management Today
by The Royce Funds, 5/13/15
Chuck Royce discusses some of the events that helped shape the first quarter and the prospects for risk management in a more normalized environment.
Commentary
The Long Reach of Technology in Taiwan
Taiwan is one of the high-tech epicenters of the world, and while it headquarters some of the industry's most dominant players, the country is also home to a large and diverse group of smaller companies that provide a vital supporting role to the growing demands of the global markets.
Commentary
Margin Levels Look Safe Despite Tepid Economic Growth
Portfolio Manager Charlie Dreifus comments on the Fed's March statements and the first quarter's economic lull, discusses why dividend-paying stocks remain an attractive investment option, and makes a case for risk management in the current climate.
Video
The Perfect Storm for Risk-Conscious Active Managers
by The Royce Funds, 4/2/15
Principal and Portfolio Manager Steve Lipper discusses three specific conditions that have shaped the current small-cap market and how, after five years, these developments all showed signs of reversing in the latter part of 2014.
Commentary
1Q15 Market: Slow Start Leads to Solid Gains
A bearish January gave way to solid first-quarter gains. The small-cap Russell 2000 was the leader among the broad-based domestic indexes, up 4.3% versus gains of 1.6% and 1.0% for the large-cap Russell 1000 and S&P 500 indexes, respectively. The more tech-oriented Nasdaq Composite was also strong with a 3.5% first-quarter return.
Commentary
How should we think about risk today in an investment world that has largely rewarded it?
The removal of "patience" from the Federal Reserve's vernacular might be as close as investors get to a more concrete timeframe for an increase in interest rates, at least for now.
Commentary
Chuck Royce on 1Q15: Will Rising Rates Benefit Active Stock Pickers?
With a rise in interest rates on the horizon, and economic recovery firmly underway, CEO Chuck Royce believes the market may be on the cusp of rewarding disciplined and risk-conscious approaches.
Commentary
Signs of a Normalizing Market
In the wake of the 2008 financial crisis, the Fed's monetary stimulus programs had the unintended effect of suspending the historically typical functioning of capital markets in terms of the productive and destructive uses of capital. Today, the fiscal climate is beginning to change. President and Co-Chief Investment Officer Chris Clark takes a look at what's happening in the current market and talks about why our discipline could be rewarded in the foreseeable future.
Video
Building a High-Conviction Portfolio of Superior Businesses
by The Royce Funds, 3/23/15
Portfolio Manager Lauren Romeo talks about how many holdings that populate this Royce portfolio are companies we have seen persevere through various economic cycles, changing industry conditions, and company-specific challenges.
Video
Special Equity Fund: Looking Back at 2014 and Ahead to 2015
by The Royce Funds, 3/23/15
Portfolio Manager Charlie Dreifus discusses the current state of Royce Special Equity Fund's portfolio and what he believes could be a potential tailwind for some of his holdings as the year develops.
Video
Royce Premier Fund: Reviewing 2014 and Positioning for 2015
by The Royce Funds, 3/2/15
Portfolio Manager Lauren Romeo talks about the relative performance challenges for Royce Premier Fund and the types of businesses we are emphasizing and avoiding.
Video
Bill Hench on Consumer and Tech Stocks
by The Royce Funds, 3/2/15
A bottom-up stock picker, Portfolio Manager Bill Hench is finding compelling valuations in the semiconductor industry. Bill also believes many Consumer Discretionary stocks are poised to benefit from the recent decline in energy prices.
Commentary
When Volatility Rises, So Have Active Management Results
For many investors, volatility is often synonymous with risk. We as value investors (and risk managers), on the other hand, have always viewed volatility as a crucial component of active stock selection. In our latest Royce Research piece, we explore the relationship between low- and high-volatility environments and the relative performance of active managers versus their respective benchmarks during these periods. This deep dive is especially important in a market that has recently seen more volatility and its largest correction in almost three years.
Commentary
Great Expectations for Small-Cap Active Management
Widening credit spreads, increasing volatility, and decreasing stock correlation should allow stock pickers the chance to emerge as performance leaders. We continue to see good times ahead for active managers who focus on business fundamentals.
Video
Why Equities Should Be in Your Portfolio
by The Royce Funds, 2/17/15
What kind of total return could the market produce this year? Portfolio Manager Charlie Dreifus believes owning a portfolio of high-quality companies looks more attractive than the alternatives.
Video
Surprises in 2014 and Expectations for 2015
by The Royce Funds, 2/9/15
Portfolio Manager and Principal Charlie Dreifus talks about the global slowdown in 2014 and its effects on interest rates in the U.S. and abroad, how data points for the U.S. economy and quantitative easing in the eurozone will play a big role in shaping the investment landscape in 2015, and how - with interest rates so low - wage inflation could have a positive impact on the markets.
Commentary
The Strange Case of the Current Small-Cap Cycle
For much of the past five years, small-cap stocks have generated returns well above their monthly rolling five-year averages. In addition, lower-than-usual volatility within the asset class and a decline in the cost of capital spurred by the Fed?s monetary stimulus programs have created an unfriendly environment for active stock pickers such as ourselves. Our latest research, however, suggests that some of these conditions were abating late in 2014, which might benefit those investors who focus on fundamentals and try to use volatility to create longer-term opportunities.
Video
What is a Deep Value Investor?
by The Royce Funds, 1/20/15
Deep value investors have a long-term focus and are not fixated on quarterly earnings. They're looking for companies with the ability to compound wealth over time.
Video
Avoiding Value Traps and Aggressive Growth
by The Royce Funds, 1/14/15
Portfolio Manager Jim Stoeffel talks about his investment criteria, what he looks for in management teams, how he tries to avoid value traps, and Royce’s approach to building conviction.
Video
Investing During Turbulent Markets
by The Royce Funds, 1/12/15
Portfolio Manager Chris Flynn explains why volatility plays such an important role in our investment process.
Commentary
Will Active Stock Picking Be More Relevant in 2015?
While active managers continued to struggle in 2014, we remain confident in our approach, which emphasizes discipline, patience, and absolute results. Portfolio Manager and Principal Charlie Dreifus discusses the performance of his small-cap portfolio, what sectors and industries he found most interesting at the end of 2014, conditions in place that may lead to a more robust M&A market in 2015, the state of the U.S. economy, and why he believes the value of active stock picking will increase in importance.
Video
Will Current M&A Activity Benefit Small-Caps?
by The Royce Funds, 1/7/15
With M&A total deal volumes running at their highest pace since 2007, what has spurred increased activity? Portfolio Manager Lauren Romeo and Director of Consultant Relations & Client Service Jeff Smith discuss the correlation between improving economic conditions and increased corporate spending.
Commentary
Chuck Royce on 4Q14: Positioning for a Normalizing Economy
Chief Executive Officer and Portfolio Manager Chuck Royce discusses the spread between large- and small-cap returns in 2014, the current case for active management in the small-cap space, the valuation picture as we enter 2015, and the impact lower energy prices are likely to have on stocks.
Video
A Healthy Skepticism is Key to Managing Risk
by The Royce Funds, 12/24/14
At Royce, our more-than-40-year investment approach is built on the idea that preserving capital is just as critical to successful long-term growth as growing it. Portfolio Manager Jim Stoeffel talks to Co-Chief Investment Officer Francis Gannon about his auditing background and how that experience influences the way he assesses risk.
Video
Why Should an Investor Consider International Small-Caps?
by The Royce Funds, 12/15/14
With approximately 25,000 international companies in our chosen asset class, we believe active management suits our search for businesses with the quality metrics that we typically look for in our domestic investments - high returns on invested capital, strong balance sheets, and sizable market shares.
Commentary
Germany and France: Looking for Quality in the Eurozone
While concerns over economic growth in Europe have been escalating, Royce International Micro-Cap Fund Portfolio Managers Jim Harvey and Dilip Badlani are finding small-cap opportunities with long-term benefits.
Video
Portfolio Replenishing During Bull Markets
by The Royce Funds, 12/8/14
Royce Opportunity Select and Opportunity Fund Portfolio Manager Bill Hench talks with Principal Dave Gruber about his buying and selling process, which—while more difficult to maintain during up-market periods—remains consistent regardless of market movements.
Video
Current Opportunities Built from Short-Term Headwinds
by The Royce Funds, 12/1/14
As bottom-up stock pickers who pay close attention to risk and valuation, we often see negative headlines as an opportunity to reevaluate our holdings and build our exposure to companies with long-term value at attractive entry points. Portfolio Manager Lauren Romeo provides her perspective on macro headwinds and how they affect our investment approach.
Video
Finding Small-Cap Opportunities in Technology and Energy
by The Royce Funds, 11/24/14
Despite the recent correction for small-caps, we have been finding compelling opportunities in those areas of the market not always discussed in the headlines. Portfolio Manager Jim Stoeffel sits down with Co-Chief Investment Officer Francis Gannon to talk about investment ideas that play on current trends but may be particularly interesting to value-oriented investors.
Video
Capital Allocation and Risk Management
by The Royce Funds, 11/17/14
Companies with little or no debt on their balance sheets can focus on capital allocation decisions that help the business to grow and/or return free cash back to shareholders. Especially during uncertain periods, a low-debt balance sheet also helps us to assess risk, which is crucial in the small-cap universe, where companies are often fragile.
Video
Maintaining a Consistent Portfolio Approach
by The Royce Funds, 11/10/14
Maintaining a consistent portfolio approach—even during times when our style of investing may fall out of favor with the market—is a critical element of the Royce philosophy.
Video
Building a Database of Quality Businesses
by The Royce Funds, 11/7/14
Small-cap equities form the largest domestic equity universe, accounting for approximately 80% of all publicly traded companies in the U.S. In such a large and diverse space, how do we attempt to identify companies with the quality characteristics we typically seek? Portfolio Manager Steven McBoyle explains how we uncover and monitor businesses within our chosen asset class based on three key investment tenets and careful due diligence.
Commentary
When Volatility Rises, So Have Active Management Relative Results
For many investors, volatility is often synonymous with risk. We as value investors (and risk managers), on the other hand, have always viewed volatility as a crucial component of active stock selection. In our latest Royce Research piece, we explore the relationship between low- and high-volatility environments and the relative performance of active managers versus their respective benchmarks during these periods. This deep dive is especially important in a market that has recently seen more volatility and its largest correction in almost three years.
Commentary
Hong Kong: Looking at Commercial Rental Prices and Automotive Demand
Hong Kong is a very important market to Royce's international efforts, though its economy has seen a significant slowdown over the past several years. Royce International Micro-Cap Fund Portfolio Manager Dilip Badlani discusses why he returned after having recently visited earlier in the year and what he learned from his meetings with company management teams.
Commentary
Trick or Treat? Slow Global Growth Hits Cyclical Sectors Hardest
As of October 13, the small-cap Russell 2000 Index was down 12.9% from its 2014 high on July 3a double-digit correction not seen in more than three years. With the U.S. economy slowly improving and Fed tapering winding down as scheduled, what is driving this pullback? Co-Chief Investment Officer Francis Gannon talks about economic growth beyond our borders and how it has been playing a role in shifting investor sentiment.
Commentary
Why Consider Brazil Now?
We see Brazil as a country whose investment appeal appears evident based on enduring themes, including burgeoning middle-class consumption, a young and unlevered population, business acumen in fields as diverse as agriculture and manufacturing, and more.
Commentary
Five Things You Should Know About U.S. Small-Caps
Co-Chief Investment Officer Francis Gannon offers five statistics we think every investor should know about U.S. small-caps in the current volatile investment environment.
Commentary
Japan: Changes in Sentiment and Tokyo's Property Market
In his second trip to Japan this year, Portfolio Manager Dilip Badlani observed a change in sentiment, though his bullishness on Japanese micro-caps remains unshaken.
Commentary
The State of Small-Cap Valuations and Holding High-Confidence Names
With the U.S. economy and employment rate slowly improving, small-cap valuations may not see a correction significant enough to offer attractively discounted share prices any time soonat least at the levels that Royce typically seeks. Portfolio Manager and Principal Jay Kaplan discusses how he's been managing his portfolios in a market environment that's been largely unkind to value investors and talks about some names he likes going forward.
Commentary
3Q14 Market: Small-Caps at a Relative Disadvantage
We believe that equities continue to represent an attractive option, that fundamentals matter, especially on a long-term basis, and that stock pickers, i.e., active managers, are uniquely positioned to add value in the current market environment and beyond.
Commentary
Chuck Royce on 3Q14: Is Volatility Ushering in a New Market Phase?
Volatility shook the markets in the last three months, halting the bullishand placidpace of returns in a market that has not seen a significant correction since 2011. Chief Executive Officer Chuck Royce talks about market events from the third quarter, the growing disparity between small-cap and large-cap performance, the continuing strength of the economy, the prospects for higher interest rates, the current case for small-cap quality, and more.
Commentary
The Long-Term Value of Active Management in the Small-Cap Space
As the ongoing debate about the effectiveness of active management, especially since the proliferation of ETFs and index funds, continues unresolved, it is difficult for us not to be biased. Our focus, however, remains solely on long-term outperformance and the interests of our shareholders, and we believe the best way of accomplishing this is through careful stock selection and having an absolute standard.
Commentary
Brazil: A Ripe Market for Bottom-Up Stock Pickers
Royce International Micro-Cap Fund Portfolio Managers Jim Harvey and Dilip Badlani talk about their recent trip to Brazil, the country's current challenges, the importance of careful stock selection, what insider ownership reveals, Brazil's real estate market, learning from experience, looking for competitive advantages and the importance of corporate governance, and where they've been finding opportunities.
Commentary
Drawing Parallels Between Company Quality and Economic Strength
First-half results were mildly bullish, and included a brief period where higher-quality companies reasserted themselves during the more volatile months of April and early May. Co-Chief Investment Officer Francis Gannon talks about how the market has responded to the Fed's monetary stimulus, the economically sensitive characteristics that populate most of our firm's portfolios, and where we have been finding opportunities.
Commentary
Does Active Management Succeed in International Small-Caps?
Divergent conclusions about the relative success of active management in the international small-cap universe prompted us to do our own examination, which stresses the importance of choosing the appropriate benchmark and evaluating the consistency of a fund's performance over long-term time periods.
Commentary
Equities Remain Resilient in Current Environment
While there was a brief shift towards higher quality from April through mid-May, low quality reasserted itself in June to mark a fairly mutedand mixedsecond-quarter performance for small-caps. Forty-plus-year industry veteran Charlie Dreifus discusses the market's behavior during this period, as well as the U.S. economy and stock market.
Commentary
Hong Kong: A Rich Market for Long-Term Investors
While largely out of favor, we are finding Hong Kong-listed Chinese companies that possess the characteristics we typically look for in our investmentshigh returns on invested capital, strong balance sheets, and attractive dividend yields. Portfolio Managers Jim Harvey and Dilip Badlani run through some names they currently like and talk about why the market is still appealing.
Commentary
Chuck Royce on 2Q14: Fundamentals Reassert Their Importance
Since the May 2013 low for the 10-year Treasury, we have seen the market shift its focus to more fundamentally and financially stronger companies with attractive long-term prospects—qualities that we have always championed at Royce.
Commentary
Stock Picking Matters in the Current Market Climate
Has the current market environment begun to favor less speculative companies and investment managers with a more active orientation? Director of Investments, Managing Director, and Portfolio Manager Whitney George talks about valuations, sectors and industries that he believes look promising, and some names in which he has high conviction.
Commentary
When is it Time to Sell: A WWE Case Study
As disciplined, contrarian investors, our take on a stock is often at odds with Wall Street's consensus. Portfolio Manager and Principal Jay Kaplan explains why we carefully assess the value of our holdings and why discipline and conviction are paramount to both buy and sell decisions.
Commentary
Why We're Often Bullish When the Market Turns Bearish
While economic anxiety has hit the market prior to the often bearish summer months, we continue to concentrate on matters less publicized: a shift in equity market leadership in favor of quality driven by rising interest rates.
Commentary
Will a Rise in Rates See a More Lasting Shift to Quality?
Late March saw signs of a re-emergence and shift back to the kind of quality names that we like. Portfolio Manager and Principal Charlie Dreifus discusses the recent Fed policies and their effects on the market, his outlook on the U.S. and global economy, current valuations, small-cap quality, and more.
Commentary
Looking at Current Long-Term Growth Plays
Portfolio Manager and Principal Chip Skinner talks about the market's more volatile behavior in the first quarter, potential growth areas that he finds interesting, ideas in which he has high confidence, and one stock that has recently done well for him.
Commentary
Chuck Royce on 1Q14: Despite Minor Pullback, Market Still Shows Strength
Despite the market's subdued first-quarter performance, annualized total returns for the major indexes remained in double-digit territory for the one-, three-, and five-year periods ended March 31, 2014. President, Director of Investments, and Portfolio Manager Chuck Royce offers his thoughts on the market's behavior during the first quarter and why he thinks investors can expect a major correction within the next twelve months.
Commentary
Gain International Exposure with Small-Caps
Portfolio Manager and Director of International Research David Nadel discusses our attraction to international small-caps, how our investment approach translates into the international small-cap universe, how we try to avoid value traps, the effect monetary policy has had on our approach and performance, and more.
Commentary
What Columbus Missed: Royce Rediscovers India
In 1492, Italian explorer Christopher Columbus set sail to discover India. He missed his mark, however, landing in America instead. The rest, as they say, is history-with the exception that more than 500 years later India is still worthy of discovery for many Western investors.
Commentary
The State of International Small-Cap
While some argue that domestic small-cap leadership in 2013 was a result of its heavy exposure to companies that tend to generate most of their income domestically, others contest that this greater focus on the U.S. may mean missing out on the benefits of faster-growing foreign economies. We, on the other hand, choose to focus our attentions on individual companies, particularly those in more cyclical areas of the market that are more closely tied to the global economy.
Commentary
From Micro-Caps to Mid-Caps, a Comprehensive Approach to Smaller Companies
As the small-cap asset class has grown in size, those companies just beyond the periphery of small-cap have become somewhat orphaned.
Commentary
Chuck Royce on 4Q13: Abnormally High Returns Reinforce Our Absolute Bias
In a market thats behaved far from normally, we are sticking with what we believe works best for our shareholders-finding quality small-caps at what we think are attractively inexpensive valuations that have the ability to generate strong long-term returns. President, Director of Investments, and Portfolio Manager Chuck Royce offers his thoughts on last years small-cap performance and the prospects for high-quality small-caps.
Commentary
Some Small-Caps Are More Global Than Others
How much of a contribution have overseas revenues made to this years dynamic domestic small-cap rally? Part of the answer lies in where portfolios invest and where they do not. Portfolio Manager and Principal Francis Gannon notes the emerging strength shown by those more economically sensitive sectors that are closely tied to global economic activity.
Commentary
GameStop and Our Long-Term, Contrarian Investment Approach
Because our contrarian approach emphasizes a long-term time horizon, we tend to invest in companies that we believe have the financial wherewithal to withstand out of favor periods. GameStop used trying times to build conviction and expand its core business rather than abandoning its discipline to meet outside expectations.
Commentary
Despite Uncertainty, the Market Still Looks Strong
Although it was an ugly battle, on Thursday morning October 17 President Obama signed a bill that reopened the government into January 2014 and raised the debt ceiling until early February of next year.
Commentary
The Market May Be Signaling a Return to a More Typical Recovery
Despite the Feds indecision about whether or not to taper, we see evidence that business activity is normalizing and the global economy is getting healthier. Co-CIO, Managing Director, and Portfolio Manager Whitney George talks about how economically sensitive sectors have begun to benefit from rising rates in the small-cap rally, how recent news coming out of China has affected certain portfolio investments, where he is currently seeing long-term opportunities, and stocks in which he has high confidence.
Commentary
Are Investors Paying More Attention to Quality Small-Caps?
Although it covers only a brief time period, recent research by Furey Research Partners showed that since the beginning of May 2013 through September 30 the lowest leveraged companies outperformed the highest leveraged companies within the Russell 2000to us a long-anticipated reversal and an encouraging signal that suggests investors have not abandoned quality despite an environment of easy money and near-zero interest rates.
Commentary
Chuck Royce on 3Q13: Quality Small-Caps Can Continue to Bear Fruit
Co-CIO, President, and Portfolio Manager Chuck Royce discusses his outlook on the current state of the small-cap market, his continued confidence in quality despite the Feds announcement in September to prolong its ongoing stimulus efforts, and the current case for active small-cap management.
Commentary
Opportunity Out of Uncertainty: Finding Investment Ideas in a Rising Market
Portfolio Manager and Principal Jay Kaplan talks about investing in a slow-growth, high-price environment and discusses where we are in the current retail cycle, companies in which he has high confidence, and his experience with a long-term holding.
Commentary
Hong Kong: A Gateway to Chinese Companies
While many investors and businesses in Hong Kong are struggling with Chinas slowed-growth policy, increased rates on commercial rentals, and government intervention to cool the residential property market, we at Royce are looking for opportunities in Hong Kong-listed companiesour primary entrance to gain access to Chinese companieswhose valuations are reflective of the macro challenges facing their economy.
Commentary
What Does an Improving Economy Mean for Stocks and Bonds?
With the economy improving, inflation tame, and a Federal Reserve meeting approaching in September, Portfolio Manager and Principal Charlie Dreifus believes that small-caps remain an attractive option within the equities market.
Commentary
Understanding Quality: The Crux of Long-Term Investing
While some experts believe that small-cap valuations are currently stretched, we see ample opportunities in what we think are high-quality smaller companies.
Commentary
Whitney George on 2Q13: Stocks Continue to Look More Appealing Than Fixed Income
In addition to detailing what sectors currently look attractive to him from a valuation standpoint, Co-CIO, Managing Director, and Portfolio Manager Whitney George discusses three stocks that exemplify his approach, the current case for active small-cap management, why stocks look more attractive than fixed income, and his opinions on the markets decline in late June.
Commentary
Why a Normalized Yield Environment Marks the Return of Capitalism
While market sentiment over the past few years has shifted between confidence and fear, the quality companies that we covetand never abandonedhave been relatively ignored. Portfolio Manager Francis Gannon suspects that, although a shift back to a more normalized environment will mean continued volatility, the landscape will be more favorable for active managers.
Commentary
Bullish on Quality and Active Management Over the Long Term
While solid on an absolute basis, quality stocksas measured by returns on invested capitalhave lagged their lower-quality peers. Chuck Royce explains why shifts in Fed policy should help to complete a reversal thats already begun.
Commentary
Are Actively Managed Funds About to Gain an Edge
Although 10-year Treasury rates rose last month, the strong performance of certain cyclical sectors within small-cap looks to us like investors may be showing a bit more confidence in areas favored by many active investment approaches.
Commentary
Searching for Super Small-Cap Companies Through the Macro Noise
While market pundits tell us to worry about everything from currency concerns and environmental challenges to the ongoing threat of nuclear assault and resource depletion, these ominous obstacles and the endless possibilities of their potential fallout have a tendency to draw attention away from what we believe really matters: the companies that have the ability to survive, adapt, and grow stronger in the wake of uncertainty.
Commentary
The Clock is Ticking for Passive Management
It may feel like only yesterday, but it has been four years since the equity market bottomed in March 2009. Much has changed since that timegovernment debt and the Feds balance sheet have exploded, bond yields have declined, and quantitative easing has become the norm.
Commentary
Chuck Royce on 1Q 2013: Conditions Remain Favorable for Equities
In stark contrast to what we saw in 2010, 2011, and most of the first half of 2012, the market tuned out a lot of seemingly ominous political news and enjoyed a strong first quarter.
Commentary
What Will Drive the Market?
The sequester adds to the economic headwinds caused by ending the payroll tax holiday and the boost in tax rates. However, even with the sequester, total federal government outlays will rise this fiscal year. Finally, after more than a month of daily increases for a gallon of unleaded gasoline, prices are now declining. This has been of concern as rising oil and gasoline prices were yet another headwind facing the U.S. economy. (Oil prices have also declined.)
Commentary
M&A and Dividends Likely Drivers of the Market
The sequester adds to the economic headwinds caused by ending the payroll tax holiday and the boost in tax rates. However, even with the sequester, total federal government outlays will rise this fiscal year. Finally, after more than a month of daily increases for a gallon of unleaded gasoline, prices are now declining. This has been of concern as rising oil and gasoline prices were yet another headwind facing the U.S. economy. (Oil prices have also declined.)
Commentary
Capex Revival
For some time now, we have been noting the defensive nature of the investment environment, one in which fear and uncertainty continue to be the major forces driving markets. Interestingly, this trend has held true for both investors and corporations alike of late. Even after a powerful move from the low of last November, for example, investors remain fearful about cyclical or economically sensitive sectors while at the same time embracing those very sectors that benefit from easy money, are defensive by nature, and are supposedly riskless.
Commentary
Chuck Royce on Q4 2012: Quality Rising
Do you think the market's strength in the year's second half marks the beginning of a more historically normal period for equities? I do. Of course, we've been calling for a more typical market environment for a while now, so our recent forecasting has been less than stellar. However, the market's second-half results were telling. In the third quarter we saw many quality stocks keep pace with the small-cap market as a whole. Many of these businesses then went on to outpace the Russell 2000 in the fourth quarter, particularly in October, when the rally began to cool.
Commentary
Another Look at Small-Cap Myths
A few years ago we wrote about several small-cap myths. As we begin the New Year, we thought it might be helpful to revisit some of the more prominent misconceptions about our chosen asset class and to examine how they have factored into recent performance.
Commentary
Japan: Abundant Opportunities Despite Debt-Induced Deleveraging Cycle
Over the last two decades, Japan has suffered under the malaise of deflationary deleveraging after its stunning growth between the 1960s through the end of the 1980s. In 1991, economists were predicting that Japan would overtake the U.S. as the world's largest economy by 2010. Instead, Japan's GDP has stayed largely stagnant over this time period as the country has been trapped in a debt-induced deleveraging cycle.
Commentary
High Uncertainty, Low Optimism
In these uncertain times, we continue to follow our discipline and to identify those ideas that we believe will be the beneficiaries of potentially better economic times ahead. Many of the economic events that the markets feared would pull the U.S. economy into recession have already occurred, including the rapid slowdown in China and the recession in Europe. As the saying goes, bull markets climb a wall of worrysurprisingly , the Russell 2000 gained 12.35% year-to-date, 13.09% over the one-year, 13.85% over the past three years, and 8.71% over the past 10 years through the end of November.
Commentary
Chuck Royce Remains Optimistic After the Election
The likelihood of fiscal and tax reform in 2013 gives us faith in the long-term viability of both the U.S. economy and equities.
Commentary
Charlie Dreifus on the Global Economy and Its Impact on Stocks
Portfolio Manager Charlie Dreifus examines the data from Europe, China, and the U.S. and discusses how it may affect domestic stock prices.
Commentary
2Q 2012: Why I Still Believe in the Long-Term Viability of Stocks
Royce's President and Co-CIO talks about recent volatility, correlation, and why he still has confidence in stocks...How long do you think the market will be caught in this volatile, range-bound pattern? I think it's impossible to say with any certainty, though obviously we'd all like it to be over soon. There's vast turmoil going on in Europe, which is having an effect on the equity markets, and that is a large part of this range-bound phenomenon that has characterized the markets.
Commentary
Are Small-Caps Overexposed to International Markets?
Frank Gannon looks at U.S. small-caps and how much revenue they derive from non-U.S. sources. According to a recent report by Steven DeSanctis of Bank of America-Merrill Lynch, small-caps derive less than 20% of their revenues from outside the U.S. but almost 45% of all companies in the Russell 2000 have overseas exposure.
Commentary
1Q 2012: Why The Rally Can Last
We're seeing one of those rare occasions when one of our predictions for the market as a whole worked out almost exactly the way we thought it would. For a while now, we have been noting the disjunct between the very negative and alarmist headlines and the more optimistic view our own analyses and contacts with managements were revealing. It seemed to us as early as last September that the economy was in better shape than the conventional wisdom was suggesting.
Commentary
The Real Debate: Preservation of Capital vs. Preservation of Purchasing Power
Investments in high-quality companies that have embedded pricing power and high returns on their invested capital look to us to be some of the best investments to protect and grow purchasing power, and we believe they need much broader representation in investors' asset allocation. We think that the period of exclusively focusing on the preservation of capital has passed and that now is the time to be focused on the preservation of future purchasing power.
Commentary
Royce Looks Back at 2011, a Year of Correlation, Capitulation, and Consternation
Twenty-eleven saw disasters both natural and human. There were threats of European default, failures of political leadership, worries over recession, and the ever-present specter of staggering debt. All of these events contributed to one of the wildest years for stocks in recent memory. It seems likely that 2011 will be remembered not for the severity of its losses, which weren't nearly as bad as one might think, but for its daily drama of extreme volatility.
Commentary
Africa: Opportunities and Challenges in a Growing Economy
As the South African economy continues to mature and other, even less developed, economies begin to thrive, we will keep our attention focused on company fundamentals, corporate governance, and what we think are attractively undervalued businesses with the potential to grow in the global economy. As the bulk of Africa's economies are frontier markets, still progressing toward the status of developing economies, the continent as a whole represents long-term opportunities that will require patience and diligence. Its resources and demographics are likely to make it well worth the wait.
Commentary
Chuck Royce on 4Q 2011: Quality Small-Caps Look Poised to Rebound
I think that the combination in 2012 of better economic news and more action on debt and deficits will encourage investors both to pay less attention to headlines and to look more closely at the actual condition of companies. My guess is that high volatility, at least on an intraday basis, will remain a fact of life in 2012, but that the overall movement of the market will be positive.
Commentary
What Does Risk Mean in Today's Market?
While many investors continue to focus on daily volatility, seizing on every piece of macroeconomic or political news to gain a sense of the overall shape of the economic futureand position their portfolio accordinglywe remain focused on individual companies and the opportunity each presents. From our perspective, the small-cap environment is fraught with opportunities. Today's attractive absolute valuations are an opening to find bargains that will drive results for the next three to five years.
Commentary
Style Investing Revisited: A Disciplined Approach Means More Than Adhering to a Style Universe
Over time much has been written about style investinggrowth versus valuewithin the small-cap universe. In fact, investors often rely on style indexes such as the Russell 2000 Value Index and Russell 2000 Growth Index as proxies for a particular style and/or performance pattern, such as moving to value in anticipation of a bear market or growth in expectation of a bull. While this is certainly easy and convenient, especially for performance comparisons, style indexes are often more about a particular type of company or narrow set of criteria as opposed to a specific investment approach.
Commentary
The Golden Mean? Looking at SMid-Caps
Our nearly four decades of asset management experience have led us to an interesting alternative to the typical combination of small-cap and large-cap allocations that exists somewhere in between in an often-underappreciated zone of the equity market. We think that the smid-capsmall-cap to mid-capuniverse, that zone with market caps currently between $2.5 billion to $15 billion, combines many of the attractive performance attributes of the small-cap segment with some of the liquidity and business stability characteristics more traditionally associated with larger enterprises.
Commentary
Into the Great Wide Open
Overall, our outlook is fairly positive. Corrections in the 10% or greater range should create opportunities for us on a global scale. We think that returns will remain positive and that volatility will remain a presence which we seek to use to our advantage in the months and years ahead.
Commentary
Chuck Royce on Fourth Quarter 2010
Why did the stock market have such a good year in 2010 amid the perception of so much economic trouble and uncertainty? Why do you think that small-caps across the globe outpaced large-cap stocks so decisively this past year, especially in the fourth quarter? Considering the performance edge small-cap stocks are enjoying, do you still see frequent leadership rotation between small-cap and large-cap stocks?
Commentary
Whitney George On Where We Are In Today's Market
Whitney George, Co-Chief Investment Officer of Royce & Associates, discusses the state of the stock market and the economy, looks at the possibility of inflation and details what he likes about precious metals and mining companies and the Technology sector.
Commentary
Chuck Royce on Third Quarter 2010
In his quarterly conversation, Chuck touches on dividends, quality, the strength of the economy and market volatility. He also talks about the state of small-cap opportunities here in the U.S. and abroad.
Commentary
Fear and Trembling Marked the Year's First Six Months
In roughly two years, we have moved from a market collapse to a market malaise driven by heightened fears concerning Greek debt. A slow-growth economy could lead investors to focus on two areas - high-quality companies and fast-growing companies. Any business that looks to be capable of swimming ahead of the pace of the economy as a whole is going to be in high demand, and this could benefit small-caps that boast strong balance sheets, high returns on invested capital and the ability to generate free cash flow.
Commentary
Whitney George and Review Spotlight
Royce co-chief investment officer Whitney George discusses in an interview why it's a good time to be an investor with a disciplined, long-term approach, even as the rally's pace continues to slacken. Plenty of companies are mispriced due to low expectations in the short run, but look promising over the long run. In addition, in a market review, Royce looks ahead to determine what level of returns investors can expect from equities over the course of the decade. Going forward, quality companies across all market caps should outperform in both up and down markets.
Commentary
Chuck Royce on the First-Quarter Rally
In this interview, Royce says the first phase of the bull market may be over and returns in the next phase are likely to lag those since March 9. He believes the next phase will favor high-quality stocks, and the US economic recovery will be well under way in the next year.
