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: 811-08030
Name
of Registrant: Royce Micro-Cap Trust, Inc.
Address
of Registrant: 745 Fifth Avenue
New
York, NY 10151
Name
and address of agent for service: John E. Denneen, Esq.
745 Fifth Avenue
New York, NY 10151
Registrant’s
telephone number, including area code: (212) 508-4500
Date
of fiscal year end: December 31, 2023
Date
of reporting period: January 1, 2024 – June 30, 2024
Item
1. Reports to Shareholders.
![](https://www.sec.gov/Archives/edgar/data/912147/000094937724000126/img001_v1.jpg)
royceinvest.com
Royce Closed-End Funds 2024 Semiannual
Review and Report to Stockholders
June 30, 2024
Royce Global Trust
Royce Micro-Cap Trust
Royce Small-Cap Trust
A Few Words on Closed-End Funds
Royce Investment Partners (“Royce”) manages three closed-end funds: Royce Global Trust, which primarily invests
in both U.S. and non-U.S. companies with market capitalization below $10 billion; Royce Micro-Cap Trust, which primarily invests
in micro-cap securities; and Royce Small-Cap Trust, which primarily invests in small-cap securities. 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 fund’s 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 initial and any subsequent 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.
A Closed-End Fund Can Offer Several Distinct Advantages
• | A closed-end fund does not issue redeemable securities or offer its securities on a continuous basis, so it does not need
to liquidate securities or hold uninvested assets to meet investor demands for cash redemptions. |
• | In a closed-end fund, not having to meet investor redemption requests or invest at inopportune times can be effective for
value managers who attempt to buy stocks when prices are depressed and sell securities when prices are high. |
• | A closed-end fund may invest in less liquid portfolio securities because it is not subject to potential stockholder redemption
demands. This is potentially beneficial for Royce-managed closed-end funds, with significant investments in small- and micro-cap
securities. |
• | The fixed capital structure allows permanent leverage to be employed as a means to enhance capital appreciation potential. |
• | Royce Micro-Cap Trust and Royce Small-Cap Trust distribute capital gains, if any, on a quarterly basis. Each of these Funds
has adopted a quarterly distribution policy for its common stock. |
We believe that the closed-end fund structure can be an appropriate investment for a long-term investor who understands the
benefits of a more stable pool of capital.
Why Dividend Reinvestment Is Important
A very important component of an investor’s total return comes from the reinvestment of distributions. By reinvesting
distributions, our investors can maintain an undiluted investment in a Fund. To get a fair idea of the impact of reinvested
distributions, please see the charts on pages 56 and 57. For additional information on the Funds’ Distribution Reinvestment
and Cash Purchase Options and the benefits for stockholders, please see page 58 or visit our website at www.royceinvest.com.
Managed Distribution Policy
The Board of Directors of each of Royce Micro-Cap Trust and Royce Small-Cap Trust has authorized a managed distribution policy
(MDP). Under the MDP, Royce Micro-Cap Trust and Royce Small-Cap Trust pay quarterly distributions at an annual rate of 7%
of the average of the prior four quarter-end net asset values, with the fourth quarter being the greater of these annualized
rates or the distribution required by IRS regulations. With each distribution, the Fund will issue a notice to its stockholders
and an accompanying press release that provides detailed information regarding the amount and composition of the distribution
(including whether any portion of the distribution represents a return of capital) and other information required by a Fund’s
MDP. You should not draw any conclusions about a Fund’s investment performance from the amount of distributions or from
the terms of a Fund’s MDP. A Fund’s Board of Directors may amend or terminate the MDP at any time without prior
notice to stockholders; however, at this time there are no reasonably foreseeable circumstances that might cause the termination
of any of the MDPs.
This
page is not part of the 2024 Annual Report to Stockholders
Table
of Contents
This
page is not part of the 2024 Semiannual Report to Stockholders | 1
Letter
to Our Stockholders
![](https://www.sec.gov/Archives/edgar/data/912147/000094937724000126/img003_v1.jpg)
SIZING
UP THE CANDIDATES
The
first half of 2024 was one of those periods that look fairly placid when judged by the returns for the major stock
indexes—yet the first six months had their share of volatility—as well as a short-lived leadership shift in favor
of small-cap. Extending the discussion to include July and early August shows even more interesting news—which we
discuss in more detail below. For now, we’ll stick to the market events of the year’s first six months and look
at each asset class’s candidacy for longer-term outperformance.
The
year began with small-caps riding a strong fourth quarter of 2023 on both an absolute and relative basis. In fact, from the most
recent small-cap low on 10/27/23—when large-cap indexes were also scuffling—through 3/31/24, the small-cap Russell
2000 Index advanced 30.7% and the large-cap Russell 1000 Index gained 28.9%. (Moreover, from that low through 2023’s small-cap
high on 12/27/23, the small-cap index rose a heady 26.6% versus 17.2% for the Russell 1000. The Russell Microcap Index was also
quite strong, rising 30.8% over this 61-day span, while the mega-cap Russell Top 50 Index “eked out” a 14.8% advance.)
Yet sustaining this lead
proved
too tall a task for small- and micro-cap stocks—and our hopes for a more lasting leadership shift were dashed. Large- and
mega-cap companies soon recaptured market leadership while small- and micro-caps struggled on both an absolute and relative basis.
The upshot was that for the year-to-date period ended 6/30/24, the Russell Microcap Index was down -0.8%, and the Russell 2000
gained 1.7%—while the Russell 1000 was up 14.2%, the mega-cap Russell Top 50 Index advanced 22.1%, and the Nasdaq Composite
rose 18.6% for the same period.
Bigger
Was (Still) Better in 2024’s First Half
Returns
for Russell Indexes, 12/31/23-6/30/24
Past
performance is no guarantee of future results.
2
| This page is not part of the 2024 Semiannual Report to Stockholders
LETTER
TO OUR STOCKHOLDERS
The
first half of 2024 was one of those periods that look fairly placid when judged by the returns for the major stock indexes—yet
the first six months had their share of volatility—as well as a short-lived leadership shift in favor of small-cap.
Needless
to say, the last decade-plus has been a difficult period for most small-cap investors. Over the last 10 calendar years, the Russell
2000 outperformed the Russell 1000 only once—in 2016. The current extended period of small-cap underperformance is comparatively
rare, though not without precedent. As we always do when looking farther back than the 12/31/78 inception date for the Russell
2000 and Russell 1000, we use the Center for Research in Security Prices 6-10 (“CRSP 6-10”) and CRSP 1-5 Indexes as
our respective proxies for small- and large-cap stocks. Going back nearly a century to 12/31/31 through 6/30/24, we see eight
market capitalization-based outperformance cycles, with the most recent period, which began in 2014, still in effect. The four
small-cap cycles lasted longer on average, running 14, 11, 10, and 15 years, while large-cap cycles lasted 12, 5, and 16 years,
with the current cycle running for just over 10.
We
think it’s also important to keep the events that have characterized the current cycle in context. After all, these mostly
lengthy relative performance cycles do not occur in a vacuum. The current period encompasses the bulk of the zero interest rate,
easy money epoch, the covid pandemic and its aftermath, and the fastest rate of increase in interest rates in U.S. history. In
other words, the cycle has featured not one, not
two,
but three anomalous occurrences—along with a larger-than-usual dose of uncertainty that can most vividly be seen in the
specter of recession that has loomed over the economy through much of the last three-plus years. To this already long list we
could add the constant thrum of expectations that the Fed would lower interest rates—which has been the insistent
backbeat of the first several months of 2024.
THE
JULY SURPRISE—IS SMALL-CAP A WORTHY CANDIDATE?
Against
this exceptionally atypical backdrop, we can now layer in the market’s results in July—which were so pronounced (to
say nothing of being long overdue in our view) that market observers quickly christened it “The Great Rotation.” So,
what created all of this attention? In July, the Russell 2000 advanced 10.2% and the Russell Microcap increased 11.9% versus a
gain of 1.5% for the Russell 1000 and respective losses of -0.4% and -0.7% for the Russell Top 50 and Nasdaq. Additionally, the
Russell 2000 Value Index finished July ahead of the Russell 2000 Growth Index, up 12.2% versus 8.2%. The Russell 2000’s
edge versus the Nasdaq was the fourth widest spread since the inception of the small-cap index after November 2000, December 2000
and February 2001. Relative to both the Russell 1000 and S&P 500, it was small-cap’s third largest spread after January
1992 and February 2000.
Historically
Small-Cap Cycles Have Averaged More Than a Decade
Average
Monthly Relative Performance for CRSP 6-10 and CRSP 1-5, 12/31/31-6/30/24 (%)
Past
performance is no guarantee of future results.
This
page is not part of the 2024 Semiannual Report to Stockholders | 3
LETTER
TO OUR STOCKHOLDERS
The
obvious question is, why are we seeing leadership shifts in favor of small-cap and to value (regardless of market cap size)
happening now? The reason most frequently ventured has been the increased likelihood of a rate reduction in September. While
we have no doubts that many small-cap stocks would receive a bump from lower rates, we also don’t see the likelihood of
a September rate cut having been the catalyst (and in any case, we think that lower rates would likely fuel only a short-term
spike). There is also the issue of timing. Fed Chair Jerome Powell alluded to a September rate cut as a strong possibility
late in July—that is, after the nascent shifts were already well underway. Some have also pointed to the seemingly
non-stop series of odd and unprecedented political events here in the U.S., though this, too, seems unconvincing. Markets
dislike uncertainty more than almost anything else. From our perspective as experienced small-cap specialists and long-time
market observers, it seems that the shift may be the product of one asset class—and style—giving way because
investors began to recognize that there were other worthy candidates populating the investment landscape. Markets have been
highly volatile of late.
It
is also important to keep in mind that we have seen the market equivalent of head fakes numerous times over the last several
years—short-term swings in favor of small-cap that inspired optimism that was quashed almost as quickly as it had
arisen. The end of 2023 offered just the most recent example. Additionally, small-cap is not yet out of the woods. Even after
its brief and decisive outperformance, the Russell 2000 remained -4.0% shy of its previous peak on 11/8/21 at the end of
July. The markets has been highly volatile of late, with the hellacious downturn in early August offered a sobering reminder
of the speed with which market dynamics can reverse.
CANVASSING
THE PRECINCTS TO GAUGE SMALL-CAP’S SUPPORT
But
recent volatility notwithstanding, we continue to see earnings acceleration as being the candidate most likely to ignite and sustain
a small-cap leadership cycle, as we have been arguing for much of the last twelve months (though prior to July, the market admittedly
kept insisting on disagreeing with us). Psychology and momentum can drive market returns over the short and even intermediate
terms, but sooner or later,
stocks
tend to rise or fall based on an enterprise’s earnings. We think this is especially relevant now. At the end of June, the
Russell 2000 had a near-record number of companies with no earnings, a total of 43.2%. At first glance, this may seem to run counter
to our point. However, earnings acceleration is still expected to be higher for small-cap companies than for large-cap businesses
through the end of 2024.
Small-Cap’s
Estimated Earnings Growth is Expected to Be Higher in 2024 and 2025 Than Large-Cap’s
One
Year EPS Growth
![](https://www.sec.gov/Archives/edgar/data/912147/000094937724000126/img006_v1.jpg)
Earnings
per share (EPS) is calculated as a company’s profit divided by the outstanding shares of its common stock. The EPS Growth
Estimates are the pre-calculated mean one-year EPS growth rate estimates by brokerage analysts. Estimates are the average of those
provided by analysts working for brokerage firms who provide research coverage on each individual security as reported by FactSet.
All non-equity securities, investment companies, companies without brokerage analyst coverage are excluded. Source: FactSet.
As
active managers who focus on companies with steady earnings growth and/or high growth prospects, we are encouraged by this forecast,
having identified many worthy candidates in our portfolios who appear poised to benefit from strong earnings, improved profitability,
or earnings recovery. We think the case for our chosen asset class gains additional credence from the substantially more attractive
valuations for small-caps compared to their larger peers, based on our preferred index valuation metric of EV/EBIT or enterprise
value over earnings before interest & taxes.
We
are admittedly biased in favor of our own candidate for market leadership but at the same time see the combination of cheaper
relative valuations and better earnings as powerful arguments in favor of small-cap re-taking—and holding onto—market
leadership in the comings months.
Amid
the difficulties of volatile markets and economic uncertainty, we think it’s crucial to remind investors of the opportunity
to build their small-cap allocation at attractively low and/or reasonable prices—and we see these unsettled and at times
unsettling days as an opportune time to invest in select small-caps for the long run.
4
| This page is not part of the 2024 Semiannual Report to Stockholders
LETTER
TO OUR STOCKHOLDERS
Relative
Valuations for Small Caps vs. Large Caps Are Near Their Lowest in 25 Years
Russell
2000 vs. Russell 1000 Median LTM EV/EBIT¹ (ex. Negative EBIT Companies), 6/30/99- 6/30/24
1
Earnings Before Interest and Taxes
Past
performance is no guarantee of future results. Source: FactSet
ALL
MARKET CYCLES HAVE TERM LIMITS
To
that end, we think it’s worth pointing out (as we often do) that all market cycles are finite. Neither the most
bullish phases nor the most bearish downturns last forever. The same is true of flat markets or those more volatile periods
in which investors can’t seem to make up their minds. Throughout the recent extended period of leadership for large-
and mega-cap stocks, however, we recognize that it’s been easy to forget that market cycles have their kind of term
limits. Indeed, we have been small-cap specialists with a long-term investment horizon for long enough to know that patience
is a critical investment virtue—and that finding attractively valued opportunities during periods of relative
underperformance creates the foundation for rewarding long-term results. So, while we have not been entirely happy with where
the market has been over the last several years, we also understand that none of us gets an ideal set of market or economic
conditions, at least not for very long. We thus always seek to make the best of the conditions we are given, secure in the
knowledge that what we as a firm have been doing for the last 50-plus years should continue to stand us in good stead over
full market cycles and other long-term spans. And even factoring in the formidable challenges of ongoing geopolitical and
economic uncertainty, along with our own ideologically fraught politics, our conviction in the long-term prospects for
small-cap investing remains strong and
undiminished.
In fact, our research shows that presidential election years have historically signaled good times for small-cap stocks.
Average
Total Returns for the Russell 2000 and Russell 1000 After the Last 10 Presidential Elections
As
of 6/30/24
![](https://www.sec.gov/Archives/edgar/data/912147/000094937724000126/img008_v1.jpg)
Past
performance is no guarantee of future results.
We
understand that, while investment outcomes are perennially uncertain, the challenges we listed above are almost guaranteed to
test the mettle, if not the blood pressure, of even the most sanguine and experienced investment hands. We also understand that
more volatile markets lead many investors to press the ‘pause’ button as
This
page is not part of the 2024 Semiannual Report to Stockholders | 5
LETTER
TO OUR STOCKHOLDERS
Russell
2000 Calendar-Returns and Intra-Calendar-Year Largest Declines
From
12/31/99-6/30/24 (%)
1Year-to-date
data is not included in averages.
Past performance is no guarantee of future results.
they
await better days. With that said, there are two charts that sum up our thinking at this writing as to why waiting is seldom a
sound strategy. The first shows how common deep intra-year declines have been over the last quarter century.
The
second shows what we might call the missed opportunities created by waiting too long to re-enter the market.
Average
12 Month Returns for the Russell 2000 During a Recovery Depending on Various Entry Points
From
10/5/79 through 6/30/24
Past
performance is no guarantee of future results.
Against
the backdrop of moderating inflation, normalized interest rates, and a still growing U.S. economy, we believe that, as the economy
continues to stabilize, valuations for businesses that have lagged or largely sat out the mega-cap outperformance administration
remain likeliest to rise. With no recession having materialized nearly three years after its imminent arrival being predicted,
we see the probability of a soft landing for the resilient U.S. economy—which, we don’t hesitate to repeat, will begin
to see more tangible benefits of reshoring, the CHIPS Act, and numerous infrastructure projects in the second half of 2024. Amid
the difficulties of volatile markets and economic uncertainty (to say nothing of the incessant media noise that always accompanies
election years), we think it’s crucial to remind investors of the opportunity to build their small-cap allocation at attractively
low and/or reasonable prices—and we see these unsettled and at times unsettling days as an opportune time to invest in select
small-caps for the long run.
Sincerely
![](https://www.sec.gov/Archives/edgar/data/912147/000094937724000126/img011_v1.jpg) |
![](https://www.sec.gov/Archives/edgar/data/912147/000094937724000126/img012_v1.jpg) |
![](https://www.sec.gov/Archives/edgar/data/912147/000094937724000126/img013_v1.jpg) |
Charles M. Royce |
Christopher
D. Clark |
Francis
D. Gannon |
Portfolio Manager |
Chief Executive
Officer, and |
Co-Chief Investment
Officer |
|
Co-Chief Investment
Officer |
|
|
|
|
August 12, 2024 |
|
|
6
| This page is not part of the 2024 Semiannual Report to Stockholders
Performance
NAV
Average Annual Total Returns
As
of June 30, 2024 (%)
|
|
|
|
|
|
|
|
|
|
SINCE |
INCEPTION |
|
YTD¹ |
1-YR |
3-YR |
5-YR |
10-YR |
15-YR |
20-YR |
25-YR |
30-YR |
INCEPTION |
DATE |
Royce
Global Trust |
7.08 |
16.63 |
-1.21 |
6.82 |
5.68 |
N/A |
N/A |
N/A |
N/A |
6.10 |
10/17/13 |
Royce
Micro-Cap Trust |
4.79 |
14.79 |
-0.02 |
11.69 |
8.34 |
12.31 |
8.72 |
10.32 |
10.80 |
10.64 |
12/14/93 |
Royce
Small-Cap Trust |
4.67 |
13.94 |
0.99 |
9.85 |
8.34 |
11.87 |
8.31 |
9.28 |
10.17 |
10.31 |
11/26/86 |
INDEX |
|
|
|
|
|
|
|
|
|
|
|
MSCI
ACWI Small Cap Index |
2.29 |
10.64 |
-0.75 |
7.31 |
6.23 |
10.07 |
8.16 |
7.84 |
7.55 |
N/A |
N/A |
Russell
Microcap Index |
-0.84 |
5.96 |
-7.85 |
5.55 |
5.53 |
10.16 |
6.10 |
N/A |
N/A |
N/A |
N/A |
Russell
2000 Index |
1.73 |
10.06 |
-2.58 |
6.94 |
7.00 |
11.24 |
7.85 |
7.60 |
8.87 |
N/A |
N/A |
1
Not annualized. |
|
|
|
|
|
|
|
|
|
|
|
Important
Performance and Risk Information
All
performance information in this Review and Report reflects past performance, is presented on a total return basis, net of the
Fund’s investment advisory fee, reflects the reinvestment of distributions and does not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the sale of Fund shares. Past performance is no guarantee of future results. Investment return and
principal value of an investment will fluctuate, so that shares may be worth more or less than their original cost when sold. Current
performance may be higher or lower than performance quoted. Current month-end performance may be obtained at www.royceinvest.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 Fund’s common stock are also subject to the market risk of investing in the underlying portfolio securities
held by each Fund. Each Fund is subject to market risk-the possibility that common stock prices will decline, sometimes sharply
and unpredictably, over short or extended periods of time. Such declines may be caused by various factors, including market, financial,
and economic conditions, governmental or central bank actions, and other factors, such as the recent Covid pandemic or the recent conflicts
in Ukraine and the Middle East, that may not be directly related to the issuer of a security held by a Fund. These conflicts and the
recent pandemic could adversely affect global market, financial, and economic conditions in ways that cannot necessarily be foreseen.
Investments in securities of micro-cap or small-cap companies may involve considerably more risk than investments in securities of larger-cap
companies. Investments in securities of foreign issuers may be subject to different risks than investments in securities of U.S. companies,
including adverse political, social, economic, or other developments that are unique to a particular country or region. Therefore, the
prices of securities of foreign companies in particular countries or regions may, at times, move in a different direction than those
of securities of U.S. companies. Because such investments are usually denominated in foreign currencies and the Funds do not intend to
hedge their foreign currency exposures, the U.S. dollar value of such investments may be harmed by declines in the value of foreign currencies
in relation to the U.S. dollar. Royce Global Trust invests a significant portion of its assets in foreign companies. A broadly diversified
portfolio does not ensure a profit or guarantee against loss. All indexes referenced are unmanaged and capitalization-weighted. Each
index’s returns include net reinvested dividends and/or interest income. Source: MSCI. MSCI makes no express or implied warranties
or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further
redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, endorsed, reviewed
or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making)
any kind of investment decision and may not be relied on as such. 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 MSCI ACWI 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 Global, Micro-Cap, and Small-Cap Trust
shares of common stock trade on the NYSE. Royce Fund Services, LLC (“RFS”) is a member of FINRA and files certain material
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 2024 Semiannual Report to Stockholders | 7
MANAGER’S
DISCUSSION (UNAUDITED)
Royce Global
Trust (RGT)
Chuck
Royce
FUND
PERFORMANCE
For
the year-to-date period ended 6/30/24, Royce Global Trust advanced 7.1% on a net asset value (NAV) basis and an impressive 14.1%
based on its market price, well ahead of the 2.3% gain for its unleveraged benchmark, the MSCI ACWI Small Cap Index, for the same
period. The Fund also beat its benchmark on an NAV basis for the 1-year period while trailing for the 3-, 5- and 10-year periods
ended 6/30/24.
WHAT
WORKED… AND WHAT DIDN’T
Eight
of the Fund’s 10 equity sectors made positive contributions to performance in 2024’s first half, led by Financials,
Industrials, and Information Technology. Health Care and Communication Services detracted while Energy made the smallest contribution.
At the industry level, capital markets (Financials), trading companies & distributors (Industrials), and semiconductors &
semiconductor equipment (Information Technology) were the biggest contributors while the top detractors were building products
(Industrials), media (Communication Services), and specialty retail (Consumer Discretionary).
At
the position level, the top contributor was FTAI Aviation, an aircraft engine lessor that also offers a cost-effective
engine maintenance, repair, and exchange program that is eagerly sought by smaller airlines. FTAI’s shares rose
largely because of strong industry fundamentals—the company beat earnings estimates for 1Q24 and announced large
multi-year deals for its workhorse V2500 engines with LATAM Airlines Chile and International Aero Engines—increased
earnings power from the internalization of a management agreement, and the purchase of a key manufacturing facility from
Lockheed Martin. Vistry Group designs, builds, and sells new homes for both private customers and social landlords. It offers
a portfolio of properties ranging from one- and two-bedroom apartments to five and six bedroom detached family homes. We like
its asset-light business model and its ongoing prospects as lower mortgage rates in the U.K. should help to stoke demand. In
its 2023 annual report, Vistry announced the successful integration of an acquisition, implemented a strategy to focus
exclusively on its resilient Partnerships model, and delivered a robust performance relative to its peers. Headquartered in
Israel, Nova develops, produces, and markets
monitoring and measurement systems for the semiconductor manufacturing industry. In May, Nova reported better than expected revenue
and earnings, as well as record operating and free cash flow, driven by high demand for its cutting-edge applications in logic,
memory, and advanced semiconductor packaging.
|
|
|
|
|
|
|
|
Top Contributors to Performance |
|
Top Detractors from Performance |
|
|
Year-to-Date
Through 6/30/24 (%)1 |
|
|
Year-to-Date
Through 6/30/24 (%)2 |
|
|
|
FTAI Aviation |
1.55 |
|
EVI Industries |
-0.47 |
|
|
Vistry Group |
0.90 |
|
Carel Industries |
-0.41 |
|
|
Nova |
0.70 |
|
MarketWise Cl. A |
-0.25 |
|
|
Protector Forsikring |
0.63 |
|
IMCD |
-0.24 |
|
|
Tel Aviv Stock Exchange |
0.58 |
|
YouGov |
-0.23 |
|
|
1
Includes dividends |
|
|
2
Net of dividends |
|
|
|
|
|
|
|
|
|
EVI
Industries, which distributes commercial laundry and dry cleaning equipment, industrial boilers, and related parts for its U.S.
customer base, was the top-detracting position in 2024’s first half. While continuing to operate effectively, both its business
and stock have faced challenges, including declining profits, increased operating costs and interest expenses, competitive pressures,
and environmental regulations. Listed in Italy, Carel Industries is a family owned, global leader in the manufacturing of niche
electronic components such as controllers, sensors, and software for original equipment manufacturers in the HVAC and refrigeration
sectors. Its products help air conditioners, humidifiers, and heat exchangers work more intelligently and effectively, resulting
in improved energy efficiency and lower total cost of ownership. Tough comparables and a slowdown in the European heat pump market
put pressure on its stock price in the first half. MarketWise offers a platform of subscription businesses that provides premium
financial research, software, education, and tools for U.S. customers. Its business continues to normalize following a Covid-induced
growth spurt that saw many people becoming first-time investors—and sustaining this level of growth has proven elusive.
The company has reduced costs and staff while also getting rid of poorly performing products. We held a stake in each of these
businesses at the end of June.
The
Fund’s advantage over the MSCI ACWI Small Cap in the first half of 2024 was attributable to both stock selection and sector
allocation decisions, with the former making the bigger impact. At the sector level, stock selection in Financials, Information
Technology, and Consumer Discretionary did most to boost relative results. Conversely, stock selection detracted in Health Care,
as did our lower weight in Energy and higher weight in Communication Services.
CURRENT
POSITIONING AND OUTLOOK
The
Fund’s focus remains on identifying and owning companies with durable competitive advantages that enable them to generate
and sustain above-average returns on invested capital and compound stockholder value well into the future. While their stock prices
are not immune to near-term market sentiments, over the long run quality companies within small cap have historically offered
solid capital preservation in down markets while also participating strongly when small-caps flourish. Of course, we believe our
companies boast generally strong long-term growth prospects, low debt, positive free cash flows, high ROIC, and/or proven management
expertise. Overall, they appear well positioned for a market that at this writing appears more focused on fundamentals and/or
from a reaccelerating global economy.
8
| 2024 Semiannual Report to Stockholders
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) |
SYMBOLS MARKET
PRICE RGT NAV XRGTX |
Performance
Average
Annual Total Return (%) Through 6/30/24
|
JAN-JUN
20241 |
1-YR |
3-YR |
5-YR |
10-YR |
SINCE
INCEPTION (10/17/13) |
RGT
(NAV) |
7.08 |
16.63 |
-1.21 |
6.82 |
5.68 |
6.10 |
1
Not Annualized |
|
|
|
|
|
|
Market
Price Performance History Since Inception (10/17/13)
Cumulative
Performance of Investment through 6/30/24 1
|
1-YR |
5-YR |
10-YR |
15-YR |
20-YR |
SINCE
INCEPTION (10/17/13) |
RGT
(NAV) |
22.2% |
45.0% |
73.5% |
N/A |
N/A |
81.9% |
|
|
|
|
|
|
|
![](https://www.sec.gov/Archives/edgar/data/912147/000094937724000126/img015_v1.jpg)
1 | Reflects
the cumulative performance experience of a continuous common stockholder who purchased
one share at inception ($8.975 IPO) and reinvested all distributions. |
2 | Reflects
the actual month-end market price movement of one share as it has traded on NYSE. |
Morningstar
Style Map™As of 6/30/24
The
Morningstar Style Map is the Morningstar Style Box™ with the center 75% of fund holdings plotted as the Morningstar
Ownership Zone™. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar
Ownership Zone provides detail about a portfolio’s 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 fund's ownership zone may vary. See page 63 for additional information.
Value
of $10,000
Invested
on 10/17/13 as of 6/30/24 ($)
Top
10 Positions
%
of Net Assets
Vistry
Group |
3.8 |
FTAI
Aviation |
2.8 |
Transcat |
2.5 |
Sprott |
2.4 |
APi Group |
2.2 |
Protector
Forsikring |
2.1 |
Tel Aviv
Stock Exchange |
2.0 |
SEI Investments |
1.9 |
Morningstar |
1.9 |
EVI
Industries |
1.9 |
Portfolio
Sector Breakdown
%
of Net Assets
Industrials |
36.2 |
Financials |
23.1 |
Information
Technology |
15.0 |
Materials |
7.6 |
Consumer Discretionary |
7.1 |
Health
Care |
5.7 |
Communication
Services |
4.0 |
Energy |
2.7 |
Consumer
Staples |
1.1 |
Real
Estate |
0.7 |
Outstanding
Line of Credit, Net of Cash and Cash Equivalents |
-3.2 |
Calendar
Year Total Returns (%)
YEAR |
RGT |
2023 |
16.1 |
2022 |
-27.0 |
2021 |
16.3 |
2020 |
19.7 |
2019 |
31.2 |
2018 |
-16.1 |
2017 |
31.1 |
2016 |
11.1 |
2015 |
-3.4 |
2014 |
-6.2 |
Portfolio
Country Breakdown 1,2
%
of Net Assets
United
States |
41.8 |
Canada |
16.0 |
United
Kingdom |
11.8 |
Sweden |
5.8 |
Israel |
5.7 |
Australia |
3.3 |
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 |
$80
million |
Number
of Holdings |
116 |
Turnover
Rate |
8% |
Net Asset
Value |
$12.55 |
Market
Price |
$11.12 |
Net Leverage1 |
3.2% |
Average
Market Capitalization2 |
$2,204
million |
Weighted
Average P/E Ratio3,4 |
22.2x |
Weighted
Average P/B Ratio3 |
2.8x |
Active
Share5 |
98% |
1 | Net
leverage is the percentage, in excess of 100%, of the total value of equity type
investments, divided by net assets. |
2 | Geometric
Average. This weighted calculation uses each portfolio holding’s market cap
in a way designed to not skew the effect of very large or small holdings; instead, it
aims to better identify the portfolio’s center, which Royce believes offers a more
accurate measure of average market cap than a simple mean or median. |
3 | Harmonic
Average. This weighted calculation evaluates a portfolio as if it were a single stock
and measures it overall. It compares the total market value of the portfolio to the portfolio’s
share in the earnings or book value, as the case may be, of its underlying stocks. |
4 | The
Fund’s P/E Ratio calculation excludes companies with zero or negative earnings
(15% of portfolio holdings as of 6/30/24). |
5 | Active
Share is the sum of the absolute values of the different weightings of each holding
in the Fund versus each holding in the benchmark, divided by two. |
Important
Performance and Risk Information
All
performance information reflects past performance, is presented on a total return basis, net of the Fund’s investment advisory
fee, reflects the reinvestment of distributions and does not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the sale of Fund shares. 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.royceinvest.com. The market price
of the Fund’s 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 mid-cap companies, which may involve considerably more risk than investments in
securities of larger-cap companies. The Fund’s broadly diversified portfolio does not ensure a profit or guarantee against
loss. The Fund generally invests 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 above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would
approximate the Fund’s year-to-date performance for 2024.
2024
Semiannual Report to Stockholders | 9
Royce
Global Trust
Schedule
of Investments
Common
Stocks – 102.5%
| |
SHARES | | |
VALUE |
AUSTRALIA
– 3.3% | |
| | | |
| |
Cochlear
1 | |
| 4,000 | | |
$ | 883,323 |
IPH 1 | |
| 253,881 | | |
| 1,058,748 |
Steadfast
Group 1 | |
| 53,300 | | |
| 219,628 |
Technology
One 1 | |
| 40,400 | | |
| 499,023 |
Total
(Cost $1,471,790) | |
| | | |
| 2,660,722 |
BERMUDA
– 0.9% | |
| | | |
| |
Bank
of N.T. Butterfield & Son | |
| 21,000 | | |
| 737,520 |
Total
(Cost $745,408) | |
| | | |
| 737,520 |
BRAZIL
– 1.1% | |
| | | |
| |
Odontoprev | |
| 171,600 | | |
| 348,719 |
TOTVS | |
| 97,885 | | |
| 532,842 |
Total
(Cost $750,794) | |
| | | |
| 881,561 |
CANADA
– 16.0% | |
| | | |
| |
Alamos
Gold Cl. A | |
| 94,100 | | |
| 1,476,106 |
Altus
Group | |
| 14,760 | | |
| 545,064 |
AutoCanada 2 | |
| 45,840 | | |
| 644,350 |
Canaccord
Genuity Group | |
| 97,143 | | |
| 600,731 |
Computer
Modelling Group | |
| 101,500 | | |
| 978,608 |
Descartes
Systems Group (The) 2,3 | |
| 8,424 | | |
| 815,780 |
IMAX
Corporation 2 | |
| 51,171 | | |
| 858,138 |
Major
Drilling Group International 2 | |
| 194,300 | | |
| 1,289,605 |
Onex
Corporation | |
| 13,300 | | |
| 904,328 |
Pan
American Silver 3 | |
| 12,700 | | |
| 252,476 |
Pason
Systems | |
| 71,300 | | |
| 960,534 |
Sprott | |
| 45,635 | | |
| 1,892,382 |
TELUS
Corporation | |
| 16,311 | | |
| 246,921 |
TMX
Group | |
| 47,600 | | |
| 1,324,958 |
Total
(Cost $8,700,909) | |
| | | |
| 12,789,981 |
FRANCE
– 0.7% | |
| | | |
| |
Ayvens 1 | |
| 39,000 | | |
| 227,909 |
Esker
1 | |
| 1,800 | | |
| 338,559 |
Total
(Cost $516,235) | |
| | | |
| 566,468 |
GERMANY
– 0.6% | |
| | | |
| |
Carl
Zeiss Meditec 1 | |
| 3,400 | | |
| 239,075 |
CompuGroup
Medical 1 | |
| 3,300 | | |
| 84,108 |
STRATEC
1 | |
| 3,300 | | |
| 161,087 |
Total
(Cost $626,695) | |
| | | |
| 484,270 |
GREECE
– 0.9% | |
| | | |
| |
Sarantis
1 | |
| 64,500 | | |
| 746,196 |
Total
(Cost $554,222) | |
| | | |
| 746,196 |
ICELAND
– 0.3% | |
| | | |
| |
Embla
Medical 1,2 | |
| 51,000 | | |
| 216,107 |
Total
(Cost $321,244) | |
| | | |
| 216,107 |
INDIA
– 3.0% | |
| | | |
| |
AIA
Engineering 1 | |
| 28,440 | | |
| 1,427,431 |
†BSE
1 | |
| 7,232 | | |
| 222,950 |
Dish
TV India 1,2 | |
| 3,777,000 | | |
| 701,278 |
Total
(Cost $1,613,622) | |
| | | |
| 2,351,659 |
INDONESIA
– 0.3% | |
| | | |
| |
Aspirasi
Hidup Indonesia 1 | |
| 4,000,000 | | |
| 208,557 |
Total
(Cost $169,716) | |
| | | |
| 208,557 |
IRELAND
– 0.6% | |
| | | |
| |
†Avadel
Pharmaceuticals 2 | |
| 35,460 | | |
| 498,568 |
Total
(Cost $590,636) | |
| | | |
| 498,568 |
ISRAEL
– 5.7% | |
| | | |
| |
Cellebrite
DI 2 | |
| 80,868 | | |
| 966,373 |
Global-e
Online 2 | |
| 5,200 | | |
| 188,604 |
Nova
2,3,4 | |
| 5,700 | | |
| 1,336,821 |
Phoenix
Holdings 1 | |
| 48,500 | | |
| 442,437 |
Tel
Aviv Stock Exchange 1 | |
| 222,300 | | |
| 1,590,189 |
Total
(Cost $2,262,187) | |
| | | |
| 4,524,424 |
ITALY
– 0.8% | |
| | | |
| |
Carel
Industries 1 | |
| 35,800 | | |
| 663,265 |
Total
(Cost $434,504) | |
| | | |
| 663,265 |
JAPAN
– 1.6% | |
| | | |
| |
As One 1 | |
| 11,200 | | |
| 200,226 |
Fukui
Computer Holdings 1 | |
| 10,800 | | |
| 169,892 |
NSD 1 | |
| 12,200 | | |
| 233,802 |
TechnoPro
Holdings 1 | |
| 7,200 | | |
| 118,068 |
TKC
Corporation 1 | |
| 25,500 | | |
| 550,516 |
Total
(Cost $1,109,922) | |
| | | |
| 1,272,504 |
MEXICO
– 0.1% | |
| | | |
| |
Becle | |
| 63,000 | | |
| 113,638 |
Total
(Cost $100,233) | |
| | | |
| 113,638 |
NETHERLANDS
– 1.0% | |
| | | |
| |
IMCD
1 | |
| 5,500 | | |
| 761,389 |
Total
(Cost $387,492) | |
| | | |
| 761,389 |
NEW
ZEALAND – 0.4% | |
| | | |
| |
Fisher
& Paykel Healthcare 1 | |
| 17,000 | | |
| 311,440 |
Total
(Cost $101,973) | |
| | | |
| 311,440 |
NORWAY
– 2.1% | |
| | | |
| |
Protector
Forsikring 1 | |
| 70,000 | | |
| 1,680,710 |
Total
(Cost $521,854) | |
| | | |
| 1,680,710 |
PANAMA
– 0.5% | |
| | | |
| |
†Banco
Latinoamericano de Comercio | |
| | | |
| |
Exterior
Cl. E | |
| 13,716 | | |
| 406,954 |
Total
(Cost $379,574) | |
| | | |
| 406,954 |
SINGAPORE
– 0.0% | |
| | | |
| |
Midas
Holdings 2,5 | |
| 400,000 | | |
| 0 |
Total
(Cost $50,439) | |
| | | |
| 0 |
SOUTH
AFRICA – 2.4% | |
| | | |
| |
CA
Sales Holdings 1 | |
| 147,597 | | |
| 101,728 |
Curro
Holdings 1 | |
| 258,594 | | |
| 160,066 |
KAL
Group 1 | |
| 17,606 | | |
| 45,919 |
PSG
Financial Services 1 | |
| 550,976 | | |
| 524,128 |
Stadio
Holdings 1 | |
| 3,686,928 | | |
| 1,066,257 |
Total
(Cost $1,162,114) | |
| | | |
| 1,898,098 |
SWEDEN
– 5.8% | |
| | | |
| |
Biotage 1 | |
| 37,900 | | |
| 581,703 |
Bravida
Holding 1 | |
| 68,900 | | |
| 513,042 |
CDON 1,2 | |
| 25,000 | | |
| 305,749 |
Karnov
Group 1,2 | |
| 145,381 | | |
| 970,501 |
OEM
International Cl. B 1 | |
| 118,850 | | |
| 1,306,695 |
10 |
2024 Semiannual Report to Stockholders |
THE ACCOMPANYING
NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
June
30, 2024 (unaudited)
Schedule of Investments (continued) |
| |
SHARES | | |
VALUE |
SWEDEN (continued) | |
| | | |
| |
†Teqnion
1,2 | |
| 47,800 | | |
$ | 908,422 |
Total
(Cost $3,739,649) | |
| | | |
| 4,586,112 |
SWITZERLAND – 1.5% | |
| | | |
| |
Kardex
Holding 1 | |
| 2,400 | | |
| 607,796 |
LEM
Holding 1 | |
| 150 | | |
| 238,707 |
VZ
Holding 1 | |
| 2,900 | | |
| 371,520 |
Total
(Cost $482,877) | |
| | | |
| 1,218,023 |
UNITED KINGDOM
– 11.8% | |
| | | |
| |
Diploma 1 | |
| 8,200 | | |
| 427,856 |
DiscoverIE
Group 1 | |
| 60,800 | | |
| 516,163 |
FDM
Group Holdings 1 | |
| 46,800 | | |
| 242,497 |
Genuit
Group 1 | |
| 54,600 | | |
| 297,642 |
Halma 1 | |
| 18,700 | | |
| 636,638 |
Judges
Scientific 1 | |
| 7,600 | | |
| 975,680 |
Keystone
Law Group 1 | |
| 95,940 | | |
| 822,238 |
Marlowe 1 | |
| 112,600 | | |
| 612,417 |
Mortgage
Advice Bureau Holdings 1 | |
| 36,100 | | |
| 373,225 |
Restore 1 | |
| 83,000 | | |
| 281,236 |
RWS
Holdings 1 | |
| 45,100 | | |
| 107,162 |
SThree 1 | |
| 146,600 | | |
| 760,847 |
Team
Internet Group 1 | |
| 137,427 | | |
| 311,882 |
Vistry
Group 1,2 | |
| 201,008 | | |
| 2,992,878 |
YouGov
1 | |
| 18,600 | | |
| 95,449 |
Total
(Cost $6,902,355) | |
| | | |
| 9,453,810 |
UNITED STATES
– 41.1% | |
| | | |
| |
ACV
Auctions Cl. A 2 | |
| 39,200 | | |
| 715,400 |
Air
Lease Cl. A 3 | |
| 26,023 | | |
| 1,236,873 |
APi
Group 2,3,4 | |
| 46,008 | | |
| 1,731,281 |
Arcosa | |
| 14,060 | | |
| 1,172,745 |
Artisan Partners Asset Management
Cl. A | |
| 33,200 | | |
| 1,370,164 |
†Atmus
Filtration Technologies 2 | |
| 25,370 | | |
| 730,149 |
Blue Owl Capital Cl. A | |
| 49,752 | | |
| 883,098 |
Diodes 2,3,4 | |
| 7,000 | | |
| 503,510 |
Element
Solutions 3 | |
| 36,400 | | |
| 987,168 |
Enovis
Corporation 2 | |
| 9,573 | | |
| 432,700 |
ESAB Corporation | |
| 15,120 | | |
| 1,427,782 |
EVI
Industries 3 | |
| 79,273 | | |
| 1,499,845 |
FormFactor
2,3,4 | |
| 20,000 | | |
| 1,210,600 |
FTAI Aviation | |
| 21,360 | | |
| 2,204,993 |
GCM Grosvenor Cl. A | |
| 101,682 | | |
| 992,416 |
Griffon
Corporation 3 | |
| 11,250 | | |
| 718,425 |
Hagerty
Cl. A 2 | |
| 39,300 | | |
| 408,720 |
Innospec 3 | |
| 6,228 | | |
| 769,719 |
Kadant 3 | |
| 2,664 | | |
| 782,630 |
KBR 3 | |
| 18,240 | | |
| 1,169,914 |
Lindsay
Corporation 3 | |
| 5,047 | | |
| 620,175 |
MarketWise
Cl. A | |
| 123,100 | | |
| 142,796 |
Mesa
Laboratories | |
| 3,829 | | |
| 332,242 |
Morningstar
3 | |
| 5,090 | | |
| 1,505,876 |
NewtekOne | |
| 22,650 | | |
| 284,710 |
nLIGHT 2 | |
| 73,100 | | |
| 798,983 |
PAR Technology 2,3,4 | |
| 24,241 | | |
| 1,141,509 |
PureTech
Health 1,2 | |
| 20,000 | | |
| 46,292 |
Reddit
Cl. A 2 | |
| 100 | | |
| 6,389 |
Repligen
Corporation 2 | |
| 1,286 | | |
| 162,113 |
Richardson
Electronics | |
| 11,356 | | |
| 135,023 |
Royal
Gold | |
| 6,320 | | |
| 791,011 |
SEI
Investments 3 | |
| 24,050 | | |
| 1,555,795 |
Transcat
2,3 | |
| 16,377 | | |
| 1,959,999 |
†Viper
Energy | |
| 32,049 | | |
| 1,202,799 |
Vontier
Corporation 3 | |
| 29,889 | | |
| 1,141,760 |
Total
(Cost $21,914,646) | |
| | | |
| 32,775,604 |
TOTAL
COMMON STOCKS | |
| | | |
| |
(Cost
$55,611,090) | |
| | | |
| 81,807,580 |
INVESTMENT
COMPANIES – 0.7% | |
| | | |
| |
UNITED
STATES – 0.7% | |
| | | |
| |
VanEck
Junior Gold Miners ETF | |
| 12,500 | | |
| 526,500 |
(Cost
$547,814) | |
| | | |
| 526,500 |
REPURCHASE
AGREEMENT– 1.2% | |
| | | |
| |
Fixed
Income Clearing Corporation, 4.75% dated 6/28/24, due 7/1/24, maturity value
$980,793 (collateralized by obligations of U.S.
Government Agencies,
0.125% due 4/15/27, valued at $1,000,047) | |
| | | |
| |
(Cost $980,405) | |
| 980,405 |
TOTAL INVESTMENTS – 104.4% | |
| |
(Cost $57,139,309) | |
| 83,314,485 |
LIABILITIES LESS CASH AND OTHER ASSETS – (4.4)% | |
| (3,505,677) |
| |
| |
NET ASSETS – 100.0% | |
$ | 79,808,808 |
THE ACCOMPANYING NOTES ARE
AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
2024 Semiannual
Report to Stockholders | 11 |
Royce Global Trust |
June 30,
2024 (unaudited) |
1 | These
securities are defined as Level 2 securities due to fair value being based on quoted
prices for similar securities and/or due to the application of fair value factors. See
Notes to Financial Statements. |
3 | All
or a portion of these securities were pledged as collateral in connection with the Fund's
revolving credit agreement as of June 30, 2024. Total market value of pledged securities
as of June 30, 2024, was $9,150,099. |
4 | As
of June 30, 2024, a portion of these securities, in the aggregate amount of $2,763,987,
were rehypothecated by BNP Paribas Prime Brokerage International, Limited in connection
with the Fund's revolving credit agreement. See Notes to Financial Statements. |
5 | A
security for which market quotations are not readily available represents 0.0% of net
assets. This security has been valued at its fair value under procedures approved by
the Fund's Board of Directors. This security is defined as a Level 3 security due to
the use of significant unobservable inputs in the determination of fair value. See Notes
to Financial Statements. |
Securities
are categorized by the country of their headquarters.
Bold
indicates the Fund’s 20 largest equity holdings in terms of June 30, 2024, market value.
TAX
INFORMATION: The cost of total investments for Federal income tax purposes was $57,320,176. As of June 30, 2024, net unrealized
appreciation for all securities was $25,994,309 consisting of aggregate gross unrealized appreciation of $29,712,582 and aggregate
gross unrealized depreciation of $3,718,273. The primary cause of the difference between book and tax basis cost is the timing
of the recognition of losses on securities sold.
12 | 2024 Semiannual
Report to Stockholders |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS |
Royce Global Trust |
June 30, 2024 (unaudited) |
Statement
of Assets and Liabilities
ASSETS: | |
| | |
Investments at value | |
$ | 82,334,080 | |
Repurchase agreements (at cost and value) | |
| 980,405 | |
Cash | |
| 266,087 | |
Foreign currency (cost $16,991) | |
| 16,972 | |
Receivable for dividends and interest | |
| 376,649 | |
Receivable for insurance reimbursement | |
| 667,836 | |
Prepaid expenses and other assets | |
| 15,114 | |
Total Assets | |
| 84,657,143 | |
LIABILITIES: | |
| | |
Revolving credit agreement | |
| 4,000,000 | |
Payable for investments purchased | |
| 29,658 | |
Payable for investment advisory fee | |
| 65,465 | |
Payable for directors’ fees | |
| 6,381 | |
Payable for interest expense | |
| 21,733 | |
Accrued legal expense | |
| 667,836 | |
Accrued other expenses | |
| 15,139 | |
Deferred capital gains tax | |
| 42,123 | |
Total Liabilities | |
| 4,848,335 | |
Contingent
Liabilities1 | |
| | |
Net Assets | |
$ | 79,808,808 | |
ANALYSIS OF NET ASSETS: | |
| | |
Paid-in capital - $0.001 par value per share; 6,361,220 shares outstanding (150,000,000 shares authorized) | |
$ | 56,154,829 | |
Total distributable earnings (loss) | |
| 23,653,979 | |
Net Assets (net asset value per share - $12.55) | |
$ | 79,808,808 | |
Investments at identified cost | |
$ | 56,158,904 | |
| 1 | See Notes to Financial Statements. |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
STATEMENTS |
2024 Semiannual Report to Stockholders | 13 |
Royce Global Trust |
Six
Months Ended June 30, 2024 (unaudited) |
Statement of Operations
INVESTMENT INCOME: | |
| | |
INCOME: | |
| | |
Dividends | |
$ | 974,200 | |
Foreign withholding tax | |
| (63,183 | ) |
Interest | |
| 27,295 | |
Rehypothecation income | |
| 16 | |
Total
income | |
| 938,328 | |
EXPENSES: | |
| | |
Investment advisory fees | |
| 384,598 | |
Legal
expense 1 | |
| 667,836 | |
Interest expense | |
| 131,818 | |
Custody and transfer
agent fees | |
| 36,555 | |
Stockholder reports | |
| 34,346 | |
Administrative and office
facilities | |
| 23,719 | |
Professional fees | |
| 21,396 | |
Directors’ fees | |
| 12,247 | |
Other expenses | |
| 15,987 | |
Insurance
reimbursement of legal expense 1 | |
| (667,836 | ) |
Total
expenses | |
| 660,666 | |
Net investment
income (loss) | |
| 277,662 | |
REALIZED
AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | |
| | |
NET REALIZED GAIN (LOSS): | |
| | |
Investments | |
| (1,017,010 | ) |
Foreign currency transactions | |
| (1,627 | ) |
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION): | |
| | |
Investments | |
| 5,976,878 | |
Other assets and liabilities
denominated in foreign currency | |
| (5,214 | ) |
Net realized
and unrealized gain (loss) on investments and foreign currency | |
| 4,953,027 | |
NET INCREASE
(DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | |
$ | 5,230,689 | |
| 1 | The Fund incurred $667,836 in legal fees and expenses
in connection with an action filed on June 29, 2023 against the Fund and numerous unrelated funds in Saba Capital Master Funds.,
Ltd., et al. v. Clearbridge Energy Midstream Opportunity Fund, Inc., et al., No. 1:23-cv-05568 (S.D.N.Y.). The Fund was reimbursed
under its insurance policy. See Notes to Financial Statements. |
14 | 2024 Semiannual Report to Stockholders |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Statement of Changes in Net Assets
| |
SIX MONTHS ENDED
6/30/24 (UNAUDITED) | | |
YEAR ENDED 12/31/23 | |
| |
| | |
| |
INVESTMENT OPERATIONS: | |
| | | |
| | |
Net investment income (loss) | |
$ | 277,662 | | |
$ | (307,034 | ) |
Net realized gain (loss) on investments and foreign currency | |
| (1,018,637 | ) | |
| 170,469 | |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | |
| 5,971,664 | | |
| 10,485,406 | |
Net increase (decrease) in net assets from investment operations | |
| 5,230,689 | | |
| 10,348,841 | |
DISTRIBUTIONS: | |
| | | |
| | |
Total distributable earnings | |
| – | | |
| (946,548 | ) |
Total distributions | |
| – | | |
| (946,548 | ) |
CAPITAL STOCK TRANSACTIONS: | |
| | | |
| | |
Reinvestment of distributions | |
| – | | |
| 483,560 | |
Total capital stock transactions | |
| – | | |
| 483,560 | |
Net Increase (Decrease) In Net Assets | |
| 5,230,689 | | |
| 9,885,853 | |
NET ASSETS: | |
| | | |
| | |
Beginning of period | |
| 74,578,119 | | |
| 64,692,266 | |
End of period | |
$ | 79,808,808 | | |
$ | 74,578,119 | |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
STATEMENTS |
2024 Semiannual Report to Stockholders | 15 |
Royce Global Trust |
Six
Months Ended June 30, 2024 (unaudited) |
Statement of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | |
Net increase (decrease) in net assets from investment operations | |
$ | 5,230,689 | |
Adjustments to reconcile net increase (decrease) in net assets from investment operations to net cash provided by operating activities: | |
| | |
Purchases of long-term investments | |
| (6,882,245 | ) |
Proceeds from sales and maturities of long-term investments | |
| 6,111,407 | |
Net purchases, sales and maturities of short-term investments | |
| 892,319 | |
Net (increase) decrease in dividends and interest receivable and other assets | |
| (138,014 | ) |
Net increase (decrease) in interest expense payable, accrued expenses and other liabilities | |
| (112,874 | ) |
Net change in unrealized appreciation (depreciation) on investments | |
| (5,976,878 | ) |
Net realized gain (loss) on investments | |
| 1,017,010 | |
Net cash provided by operating activities | |
| 141,414 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | |
Distributions | |
| – | |
Net cash used for financing activities | |
| – | |
INCREASE (DECREASE) IN CASH: | |
| 141,414 | |
Cash and foreign currency at beginning of period | |
| 141,645 | |
Cash and foreign currency at end of period | |
$ | 283,059 | |
Supplemental disclosure of cash flow information:
For the six months ended June 30, 2024, the Fund paid $132,543
in interest expense.
16 | 2024 Semiannual Report to Stockholders |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce Global 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 Fund’s performance for the
periods presented.
| |
SIX MONTHS | | |
YEARS ENDED | |
| |
ENDED 6/30/24 | | |
| | |
| | |
| | |
| | |
| |
| |
(UNAUDITED) | | |
12/31/23 | | |
12/31/22 | | |
12/31/21 | | |
12/31/20 | | |
12/31/19 | |
Net
Asset Value, Beginning of Period | |
$ | 11.72 | | |
$ | 10.25 | | |
$ | 14.26 | | |
$ | 14.95 | | |
$ | 13.60 | | |
$ | 10.42 | |
INVESTMENT OPERATIONS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net investment income (loss) | |
| 0.04 | | |
| (0.05 | )1,2 | |
| 0.09 | | |
| (0.01 | ) | |
| (0.05) | | |
| 0.06 | |
Net realized and unrealized gain (loss) on investments and foreign
currency | |
| 0.79 | | |
| 1.69 | | |
| (3.96 | ) | |
| 2.19 | | |
| 2.63 | | |
| 3.18 | |
Net increase
(decrease) in net assets from investment operations | |
| 0.83 | | |
| 1.64 | | |
| (3.87 | ) | |
| 2.18 | | |
| 2.58 | | |
| 3.24 | |
DISTRIBUTIONS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net investment income | |
| – | | |
| – | | |
| (0.10 | ) | |
| (0.09 | ) | |
| –
| | |
| (0.06 | ) |
Net realized gain on investments and foreign currency | |
| – | | |
| (0.15 | ) | |
| (0.03 | ) | |
| (2.66 | ) | |
| (1.19 | ) | |
| – | |
Return of capital | |
| – | | |
| – | | |
| (0.00 | ) | |
| – | | |
| – | | |
| – | |
Total distributions | |
| – | | |
| (0.15 | ) | |
| (0.13 | ) | |
| (2.75 | ) | |
| (1.19 | ) | |
| (0.06 | ) |
CAPITAL STOCK TRANSACTIONS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Effect of reinvestment of distributions by Common Stockholders | |
| – | | |
| (0.02 | ) | |
| (0.01 | ) | |
| (0.12 | ) | |
| (0.04 | ) | |
| (0.00 | ) |
Total capital
stock transactions | |
| – | | |
| (0.02 | ) | |
| (0.01 | ) | |
| (0.12 | ) | |
| (0.04 | ) | |
| (0.00 | ) |
Net Asset Value, End of Period | |
$ | 12.55 | | |
$ | 11.72 | | |
$ | 10.25 | | |
$ | 14.26 | | |
$ | 14.95 | | |
$ | 13.60 | |
Market Value, End of Period | |
$ | 11.12 | | |
$ | 9.75 | | |
$ | 8.65 | | |
$ | 13.12 | | |
$ | 13.36 | | |
$ | 11.69 | |
TOTAL RETURN:3 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net Asset Value | |
| 7.08 | %4 | |
| 16.15 | % | |
| (27.04 | )% | |
| 16.34 | % | |
| 19.67 | % | |
| 31
.20 | % |
Market Value | |
| 14.05 | %4 | |
| 14.50 | % | |
| (33.08 | )% | |
| 19.77 | % | |
| 24.42 | % | |
| 32
.33 | % |
RATIOS BASED ON AVERAGE NET ASSETS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Investment advisory fee expense | |
| 1.00 | %5 | |
| 1.00 | % | |
| 1.00 | % | |
| 1.00 | % | |
| 1.00 | % | |
| 1
.00 | % |
Other operating expenses | |
| 0.72 | %5 | |
| 1.52 | %1 | |
| 0.54 | % | |
| 0.39 | % | |
| 0.34 | % | |
| 0
.50 | % |
Total expenses (net) | |
| 1.72 | %5 | |
| 2.52 | %1 | |
| 1.54 | % | |
| 1.39 | % | |
| 1.34 | % | |
| 1
.50 | % |
Expenses excluding interest expense | |
| 1.38 | %5 | |
| 2.15 | %1 | |
| 1.38 | % | |
| 1.33 | % | |
| 1.24 | % | |
| 1
.29 | % |
Expenses prior to balance credits | |
| 1.72 | %5 | |
| 2.52 | %1 | |
| 1.54 | % | |
| 1.39 | % | |
| 1.34 | % | |
| 1
.50 | % |
Net investment income (loss) | |
| 0.72 | %5 | |
| (0.45 | )%1,2 | |
| 0.79 | % | |
| (0.13 | )% | |
| (0.15 | )% | |
| 0
.46 | % |
SUPPLEMENTAL DATA: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net Assets, End of Period (in thousands) | |
$ | 79,809 | | |
$ | 74,578 | | |
$ | 64,692 | | |
$ | 89,394 | | |
$ | 83,752 | | |
$ | 142,810 | |
Portfolio Turnover Rate | |
| 8 | % | |
| 14 | % | |
| 24 | % | |
| 52 | % | |
| 54 | % | |
| 48 | % |
REVOLVING CREDIT AGREEMENT: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Asset coverage | |
| 2095 | % | |
| 1964 | % | |
| 1717 | % | |
| 2335 | % | |
| 1147 | % | |
| 1885 | % |
Asset coverage per $1,000 | |
$ | 20,952 | | |
$ | 19,645 | | |
$ | 17,173 | | |
$ | 23,349 | | |
$ | 11,469 | | |
$ | 18,851 | |
| 1 | Due to an action filed against the Fund and numerous unrelated
funds in Saba Capital Master Funds., Ltd., et al. v. Clearbridge Energy Midstream Opportunity Fund, Inc., et al., No.1:23-cv-05568 (S.D.N.Y.), the Fund accrued net $500,000 in legal fees and expenses which resulted in a decrease in net investment income
(loss) per share of $0.08, a decrease in the ratio of net investment income (loss) to average net assets of 0.73% and an increase
in the noted expense ratios to average net assets of 0.73%. |
| 2 | A special distribution from Tel Aviv Stock Exchange resulted
in an increase in net investment income (loss) per share of $0.02 and an increase in the ratio of net investment income (loss)
to average net assets of 0.17%. |
| 3 | The Market Value Total Return is calculated assuming a
purchase of Common Stock on the opening of the first business day and a sale on the closing of the last business day of each period.
Dividends and distributions are assumed for the purposes of this calculation to be reinvested at prices obtained under the Fund’s
Distribution Reinvestment and Cash Purchase Plan. Net Asset Value Total Return is calculated on the same basis, except that the
Fund’s net asset value is used on the purchase, sale and dividend reinvestment dates instead of market value. |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
STATEMENTS |
2024 Semiannual Report to Stockholders | 17 |
Royce
Global Trust
Notes
to Financial Statements (unaudited)
Summary
of Significant Accounting Policies
Royce
Global Trust, Inc. (formerly Royce Global Value Trust, Inc.) (the “Fund”), is a diversified closed-end investment
company that was incorporated under the laws of the State of Maryland on February 14, 2011. The Fund commenced operations
on October 18, 2013.
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of income and expenses during the reporting period. Actual results could differ from those estimates.
The
Fund is an investment company registered under the Investment Company Act of 1940 (the “1940 Act”) and accordingly
follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting
Standard Codification Topic 946 “Financial Services-Investment Companies.”
Royce
& Associates, LP, the Fund’s investment adviser, is a majority-owned subsidiary of Franklin Resources, Inc.
and primarily conducts business using the name Royce Investment Partners (“Royce”). As of June 30, 2024, officers
and employees of Royce, Fund directors, the Royce retirement plans and other affiliates owned more than 16% of the Fund.
VALUATION
OF INVESTMENTS:
Portfolio
securities held by the Fund are valued as of the close of trading on the New York Stock Exchange (“NYSE”)
(generally 4:00 p.m. Eastern time) on the valuation date. Investments in money market funds are valued at net asset value
per share. Values for non-U.S. dollar denominated equity securities are converted to U.S. dollars daily based upon prevailing
foreign currency exchange rates as quoted by a major bank.
Portfolio
securities that are listed on an exchange or Nasdaq, or traded on OTC Market Group Inc.’s OTC Link ATS or other
alternative trading system, are valued: (i) on the basis of their last reported sales prices or official closing prices,
as applicable, on a valuation date; or (ii) at their highest reported bid prices in the event such equity securities did
not trade on a valuation date. Such inputs are generally referred to as “Level 1” inputs because they represent
reliable quoted prices in active markets for identical securities.
If
the value of a portfolio security held by the Fund cannot be determined solely by reference to Level 1 inputs, such portfolio
security will be “fair valued.” The Fund’s Board of Directors has designated Royce as valuation designee
to perform fair value determinations for such portfolio securities in accordance with Rule 2a-5 under the 1940 Act (“Rule
2a-5”). Pursuant to Rule 2a-5, fair values are determined in accordance with policies and procedures approved by
the Fund's Board of Directors and policies and procedures adopted by Royce in its capacity as valuation designee for the
Fund. Fair valued securities are reported as either “Level 2” or “Level 3” securities.
As
a general principle, the fair value of a security is the amount which the Fund might reasonably expect to receive for
the security upon its current sale. However, in light of the judgment involved in fair valuations, no assurance can be
given that a fair value assigned to a particular portfolio security will be the amount which the Fund might be able to
receive upon its current sale. When a fair value pricing methodology is used, the fair value prices used by the Fund for
such securities will likely differ from the quoted or published prices for the same securities.
Level
2 inputs are other significant observable inputs (e.g., dealer bid side quotes and quoted prices for securities with comparable
characteristics). Examples of situations in which Level 2 inputs are used to fair value portfolio securities held by the
Fund on a particular valuation date include:
| ● | Over-the-counter
equity securities other than those traded on OTC Market Group Inc.’s OTC Link ATS
or other alternative trading system (collectively referred to herein as “Other
OTC Equity Securities”) are fair valued at their highest bid price when Royce receives
at least two bid side quotes from dealers who make markets in such securities; |
| ● | Certain
bonds and other fixed income securities may be fair valued by reference to other securities
with comparable ratings, interest rates, and maturities in accordance with valuation
methodologies maintained by certain independent pricing services; and |
| ● | The
Fund uses an independent pricing service to fair value certain non-U.S. equity securities
when U.S. market volatility exceeds a certain threshold. This pricing service uses proprietary
correlations it has developed between the movement of prices of non-U.S. equity securities
and indices of U.S.-traded securities, futures contracts, and other indications to estimate
the fair value of such non-U.S. securities. |
Level
3 inputs are significant unobservable inputs. Examples of Level 3 inputs include (without limitation) the last trade price
for a security before trading was suspended or terminated; discounts to last trade price for lack of marketability or
otherwise; market price information regarding other securities; information received from the issuer and/or published
documents, including SEC filings and financial statements; and other publicly available information. Pursuant to the above-referenced
policies and procedures, Royce may use various techniques in making fair value determinations based upon Level 3 inputs,
which techniques may include (without limitation): (i) workout valuation methods (e.g., earnings multiples, discounted
cash flows, liquidation values, derivations of book value, firm or probable
18
| 2024 Semiannual Report to Stockholders |
Royce Global
Trust
Notes
to Financial Statements (unaudited) (continued)
VALUATION
OF INVESTMENTS (continued):
offers
from qualified buyers for the issuer’s ongoing business, etc.); (ii) discount or premium from market, or compilation
of other observable market information, for other similar freely traded securities; (iii) conversion from the readily
available market price of a security into which an affected security is convertible or exchangeable; and (iv) pricing
models or other formulas. In the case of restricted securities, fair value determinations generally start with the inherent
or intrinsic worth of the relevant security, without regard to the restrictive feature, and are reduced for any diminution
in value resulting from the restrictive feature. Due to the inherent uncertainty of such valuations, these fair values
may differ significantly from the values that would have been used had an active market existed.
A
security that is valued by reference to Level 1 or Level 2 inputs may drop to Level 3 on a particular valuation date for
several reasons, including if:
| ● | an
equity security that is listed on an exchange or Nasdaq, or traded on OTC Market Group
Inc.’s OTC Link ATS or other alternative trading system, has not traded and there
are no bids; |
| ● | Royce
does not receive at least two bid side quotes for an Other OTC Equity Security; |
| ● | the
independent pricing services are unable to supply fair value prices; or |
| ● | the
Level 1 or Level 2 inputs become otherwise unreliable for any reason (e.g., a significant
event occurs after the close of trading for a security but prior to the time the Fund
prices its shares). |
The
table below shows the aggregate value of the various Level 1, Level 2, and Level 3 securities held by the Fund as of June
30, 2024. Any Level 2 or Level 3 securities held by the Fund are noted in its Schedule of Investments. The inputs or methodology
used for valuing securities are not necessarily an indication of the risk associated with owning those securities.
|
LEVEL
1 |
LEVEL
2 |
LEVEL
3 |
TOTAL |
Common
Stocks |
$50,649,330 |
$31,158,250 |
$0 |
$81,807,580 |
Investment
Companies |
526,500 |
- |
- |
526,500 |
Repurchase
Agreement |
- |
980,405 |
- |
980,405 |
REPURCHASE
AGREEMENTS:
The
Fund may enter into repurchase agreements with institutions that the Fund’s investment adviser has determined are
creditworthy. The Fund restricts repurchase agreements to maturities of no more than seven days. Securities pledged as
collateral for repurchase agreements, which are held until maturity of the repurchase agreements, are marked-to-market
daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued
interest). Repurchase agreements could involve certain risks in the event of default or insolvency of the counter-party,
including possible delays or restrictions upon the ability of the Fund to dispose of its underlying securities. The remaining
contractual maturity of the repurchase agreement held by the Fund as of June 30, 2024, is next business day and continuous.
FOREIGN
CURRENCY:
Net
realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies,
expiration of currency forward contracts, currency gains or losses realized between the trade and settlement dates on
securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and liabilities, other than investments in securities
at the end of the reporting period, as a result of changes in foreign currency exchange rates.
The
Fund does not isolate that portion of the results of operations resulting from fluctuations in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included
with the net realized and unrealized gain or loss on investments.
The
Fund invests a significant portion of its assets in foreign companies that may be subject to different risks than investments
in securities of U.S. companies, including adverse political, social, economic, or other developments that are unique
to a particular country or region. Therefore, the prices of securities of foreign companies in particular countries or
regions may, at times, move in a different direction than those of securities of U.S. companies. Because such investments
in securities of foreign companies are usually denominated in foreign currencies and the Fund does not intend to hedge
its foreign currency exposure, the U.S. dollar value of such investments may be harmed by declines in the value of foreign
currencies in relation to the U.S. dollar.
For
the purposes of the Statement of Cash Flows, the Fund defines Cash as cash, including foreign currency.
2024
Semiannual Report to Stockholders | 19 |
Royce
Global Trust
Notes
to Financial Statements (unaudited) (continued)
DISTRIBUTIONS
AND TAXES:
As
a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the Fund is not subject to income
taxes to the extent that it distributes substantially all of its taxable income for its fiscal year. The Schedule of Investments
includes information regarding income taxes under the caption “Tax Information.”
The
Fund pays any dividends and capital gain distributions annually in December. Because federal income tax regulations differ
from generally accepted accounting principles, income and capital gain distributions determined in accordance with tax
regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Accordingly,
the character of distributions and composition of net assets for tax purposes differ from those reflected in the accompanying
financial statements.
CAPITAL
GAINS TAXES:
The
Fund may be subject to a tax imposed on capital gains on securities of issuers domiciled in certain countries. The Fund
records an estimated deferred tax liability for gains in these securities that have been held for less than one year.
This amount, if any, is reported as deferred capital gains tax in the accompanying Statement of Assets and Liabilities,
assuming those positions were disposed of at the end of the period, and accounted for as a reduction in the market value
of the security.
INVESTMENT
TRANSACTIONS AND RELATED INVESTMENT INCOME:
Investment
transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date except for certain
dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as
the information is received by the Fund. Non-cash dividend income is recorded at the fair market value of the securities
received. Interest income is recorded on an accrual basis. Premiums and discounts on debt securities are amortized using
the effective yield-to-maturity method. Realized gains and losses from investment transactions are determined on the basis
of identified cost for book and tax purposes.
EXPENSES:
The
Fund incurs direct and indirect expenses. Expenses directly attributable to the Fund are charged to the Fund, while expenses
applicable to more than one of the Royce Funds are allocated equitably. Certain personnel, occupancy costs and other administrative
expenses related to all of the Royce Funds are allocated by Royce under an administration agreement and are included in
administrative and office facilities and professional fees.
INDEMNIFICATION
PROVISIONS:
Reference
is made to Maryland law, the Fund’s Articles of Incorporation, as amended and supplemented, and the Fund’s
Amended and Restated By-laws, each of which provides for the indemnification by the Fund of the Fund’s officers
and directors under the circumstances and to the extent set forth therein. Reference is also made to the investment advisory
agreement between the Fund and Royce which provides for the indemnification by the Fund of Royce under the circumstances
and to the extent set forth therein. Additionally, in the normal course of business, the Fund enters into contracts with
service providers that contain general indemnification provisions in favor of such service providers and other covered
persons. The amount of any potential Fund liability under these indemnification arrangements, if any, currently cannot
be determined with any degree of specificity. The Fund is not currently in possession of any information that would cause
it to believe that the Fund is reasonably likely to be subject to any material adverse impact from the operation of these
indemnification arrangements. No assurance can be given, however, that the Fund will not incur any liability from the
operation of these indemnification arrangements. Any future liability to the Fund that may arise from the operation of
such arrangements will be publicly disclosed to the extent required by relevant accounting guidance and applicable laws,
rules, and regulations.
Capital
Stock:
The
Fund issued 50,902 shares of Common Stock as reinvestment of distributions for the year ended December 31, 2023.
Borrowings:
The
Fund is party to a revolving credit agreement (the “credit agreement”) with BNP Paribas Prime Brokerage International,
Limited (BNPPI). The Fund pays a commitment fee of 0.50% per annum on the unused portion of the then-current maximum amount
that may be borrowed by the Fund under the credit agreement. The credit agreement has a 179-day rolling term that resets
daily. The Fund pledges eligible portfolio securities as collateral and has granted a security interest in such pledged
securities to, and in favor of, BNPPI as security for the loan balance outstanding. The amount of eligible portfolio securities
required to be pledged as collateral is determined by BNPPI in accordance with the credit agreement. In determining collateral
requirements, the value of eligible securities pledged as collateral is subject to discount by BNPPI based upon a variety
of factors set forth in the credit agreement. As of June 30, 2024, the market value of eligible securities pledged as
collateral exceeded two times the loan balance outstanding.
20
| 2024 Semiannual Report to Stockholders |
Royce Global
Trust
Notes
to Financial Statements (unaudited) (continued)
Borrowings
(continued):
If
the Fund fails to meet certain requirements, or comply with other financial covenants set forth in the credit agreement,
the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the credit agreement,
which may necessitate the sale of portfolio securities at potentially inopportune times. BNPPI may terminate the credit
agreement upon certain ratings downgrades of its corporate parent, which would result in the Fund’s entire loan
balance becoming immediately due and payable. The occurrence of such ratings downgrades may necessitate the sale of portfolio
securities at potentially inopportune times. BNPPI may also terminate the credit agreement upon sixty (60) calendar days’
prior written notice to the Fund in the event the Fund’s net asset value per share as of the close of business on
the last business day of any calendar month declines by thirty-five percent (35%) or more from the Fund’s net asset
value per share as of the close of business on the last business day of the immediately preceding calendar month.
The
credit agreement also permits, subject to certain conditions, BNPPI to rehypothecate portfolio securities pledged by the
Fund up to the amount of the loan balance outstanding. The Fund continues to receive payments in lieu of dividends and
interest on rehypothecated securities. The Fund also has the right under the credit agreement to recall the rehypothecated
securities from BNPPI on demand. If BNPPI fails to deliver the recalled security in a timely manner, the Fund is compensated
by BNPPI for any fees or losses related to the failed delivery or, in the event a recalled security is not returned by
BNPPI, the Fund, upon notice to BNPPI, may reduce the loan balance outstanding by the value of the recalled security failed
to be returned. The Fund receives a portion of the fees earned by BNPPI in connection with the rehypothecation of portfolio
securities.
The
current maximum amount the Fund may borrow under the credit agreement is $4,000,000. The Fund has the right to reduce
the maximum amount it can borrow under the credit agreement upon one (1) business day’s prior written notice to
BNPPI. In addition, the Fund and BNPPI may agree to increase the maximum amount the Fund can borrow under the credit agreement,
which amount may not exceed $15,000,000.
As
of June 30, 2024, the Fund had outstanding borrowings of $4,000,000. During the six-month period ended June 30, 2024,
the Fund had an average daily loan balance of $4,000,000 at a weighted average borrowing cost of 6.52%. The maximum loan
balance outstanding during the six-month period ended June 30, 2024, was $4,000,000. As of June 30, 2024, the aggregate
value of rehypothecated securities was $2,763,987. During the six-month period ended June 30, 2024, the Fund earned $16
in fees from rehypothecated securities.
Investment
Advisory Agreement:
The
investment advisory agreement between Royce and the Fund provides for fees to be paid at an annual rate of 1.00% of the
Fund’s average daily net assets, computed daily and payable monthly. For the six months ended June 30, 2024, the
Fund expensed Royce investment advisory fees totaling $384,598.
Purchases
and Sales of Investment Securities:
For
the six months ended June 30, 2024, the costs of purchases and proceeds from sales of investment securities, other than
short-term securities, amounted to $6,911,696, and $6,109,780, respectively.
Commitments/Contingencies:
On
June 29, 2023, an action was filed against the Fund and numerous unrelated funds in Saba Capital Master Funds., Ltd.,
et al. v. Clearbridge Energy Midstream Opportunity Fund, Inc., et al., No. 1:23-cv-05568 (S.D.N.Y.) that sought rescission
of the defendants’ election to opt into the provisions of the Maryland Control Share Acquisition Act (the “MCSAA”).
On January 4, 2024, the U.S. District Court for the Southern District of New York issued an opinion and order that, among
other things, declared that the resolutions opting into the MCSAA violate a provision of the Investment Company Act of
1940 and ordered that those resolutions “be rescinded forthwith.” Following an appeal by the Fund and the
other remaining defendants, the district court’s judgment was affirmed in full by the United States Court of Appeals
for the Second Circuit on June 26, 2024. The Fund is evaluating its options in light of these decisions.
For
the six months ended June 30, 2024, the Fund incurred $667,836 (which was payable as of June 30, 2024 and was paid by
the Fund in July 2024) in legal fees and expenses in connection with this action. The Fund was subsequently reimbursed
such amount under its insurance policy. The deductible amount for this action under the Fund’s insurance policy
is $500,000 and was met in 2023. Any additional amounts incurred for legal fees and expenses for this action are also
expected to be reimbursed to the Fund by the insurer.
Subsequent
Events:
Subsequent
events have been evaluated through the date the financial statements were issued and it has been determined that no events
have occurred that require disclosure, other than as disclosed within.
2024
Semiannual Report to Stockholders | 21 |
MANAGERS’
DISCUSSION (UNAUDITED)
Royce
Micro-Cap Trust (RMT)
![](https://www.sec.gov/Archives/edgar/data/912147/000094937724000126/img018_v1.jpg)
Chuck
Royce, Jim Stoeffel,
Brendan
Hartmann
FUND
PERFORMANCE
Royce
Micro-Cap Trust (RMT) advanced 4.8% on an NAV (net asset value) basis and 3.3% on a market price basis in the year-to-date period
ended 6/30/24, a gain of 1.7% for its primary unleveraged benchmark, the small-cap Russell 2000 Index, and a loss of -0.8%
for its secondary benchmark, the unleveraged Russell Microcap Index, for the same period. The Fund beat the Russell 2000 on
both an NAV and market price basis for the 1-, 3-, 5-, 10-, 15-, 20-, 25-, 30-year, and since inception (12/14/93) periods ended
6/30/24.
WHAT
WORKED... AND WHAT DIDN’T
Seven
of RMT’s 11 equity sectors had a positive effect on performance in 2024’s first half, with the biggest positive
contributions coming from Industrials, Information Technology, and Energy. Health Care, Consumer Discretionary, and Real
Estate were the detractors. At the industry level, semiconductors & semiconductor equipment (Information Technology),
construction & engineering (Industrials), and chemicals (Materials) were the top contributors while the biggest detractors
were life sciences tools & services (Health Care), electronic equipment, instruments & components (Information
Technology), and professional services (Industrials).
The
Fund’s top contributor at the position level was Camtek, which designs and manufactures high-end metrology and inspection
systems for the semiconductor industry. Accelerated demand for High Band Width Memory chips for Artificial Intelligence
(“AI”) applications has boosted demand for its technology. IES Holdings designs and installs electrical and
technology systems into numerous infrastructure segments. Through a thoughtful growth strategy, IES has slowly built scale
in each of its four business segments, resulting in rapidly improving operating profitability. Aspen Aerogels manufactures
aerogel insulation products that have many applications for industrial uses, but most importantly for use in electric
vehicles (“EVs”). “Thermal runaway” is the phenomenon in which the lithium-ion battery cell enters
an uncontrollable, self-heating state causing a vehicle to catch on fire. Aspen’s PyroThin Technology has earned
a reputation for preventing thermal runaway, which has been reflected in the number of critical wins for its products
in the EV space. After a period of significant investment in building out manufacturing capacity, the company is beginning
to ramp up production at scale, which in turn is driving strong growth in revenues and operating profitability.
RMT’s
biggest detractor at the position level was Quanterix Corporation, which offers an ultra-sensitive digital immunoassay
platform that’s used in research and in-vitro diagnostics. Its shares fell sharply in March due to the FDA’s
concerns about another company’s similar technology and increased competition in Quanterix’s total addressable
market. Luna Innovations provides optical test and measurement services. Luna had serious accounting issues that resulted
in a rapid share price decline. Normally, we would be sellers after such a dramatic and unexpected turn. However, Luna’s
Board of Directors acted decisively, bringing in an experienced management team. Moreover, our underlying investment case
centered on what we believe is highly promising technology that should ultimately provide asset support to the shares,
so we are holding our position until we have more clarity on the underlying accounting issues.
Forrester
Research is a subscription-based information technology research company geared toward helping businesses maximize the
use of emerging technologies. Declines in IT spending during 2023, as well as Forrester’s ongoing change to its
go-to-market strategy, which includes culling smaller clients and retraining its existing sales force, are weighing on
contract value and sales growth in 2024. Although the pace of progress is testing investor patience, we acted in a contrarian
fashion by adding shares in 2024’s first half.
|
|
|
|
|
|
|
|
Top Contributors to Performance |
|
|
Top Detractors from Performance |
|
|
|
Year-to-Date Through 6/30/24 (%)1 |
|
|
Year-to-Date Through 6/30/24 (%)2 |
|
|
|
|
|
|
|
|
|
|
Camtek |
1.17 |
|
Quanterix
Corporation |
-0.56 |
|
|
IES
Holdings |
0.83 |
|
Luna
Innovations |
-0.41 |
|
|
Aspen
Aerogels |
0.78 |
|
Forrester
Research |
-0.37 |
|
|
Nova |
0.63 |
|
Mesa
Laboratories |
-0.36 |
|
|
Onto
Innovation |
0.54 |
|
nLIGHT |
-0.34 |
|
|
1 Includes dividends |
|
|
2 Net of dividends |
|
|
CURRENT
POSITIONING AND OUTLOOK
Being
a micro-cap investor has recently felt like being in an extended production of Waiting for Godot. The market remains
focused on when—or if—the Fed will begin to lower rates, and by how much. While earnings for the companies
in the portfolio have remained generally solid, it is increasingly clear to us the economy and inflation are slowing.
The market remains hyper-focused on each day-to-day release of economic data, but we remain focused on what we see as
significant intermediate-term opportunities for our holdings. We believe we are in the early innings of secular changes
related to opportunities such as the reshoring of U.S. industrial capacity, increased infrastructure spending, and the
increased use cases around artificial intelligence, among other technologies. We expect these trends to benefit the “pick
and shovel” providers in our portfolio for years to come. Lastly, we would be remiss if we ignored the increasing
political uncertainty in the U.S. and throughout the world. As noted, we generally embrace short-term volatility as a
longer-term investment opportunity, but the unsettled political environment seems to be increasing the potential of black
swan events.
22
| 2024 Semiannual Report to Stockholders |
PERFORMANCE AND PORTFOLIO REVIEW (UNAUDITED) |
SYMBOLS
MARKET PRICE RMT
NAV XOTCX |
|
|
Performance
Average
Annual Total Return (%) Through 6/30/24
|
JAN-JUN 20241 |
1-YR |
3-YR |
5-YR |
10-YR |
15-YR |
20-YR |
25-YR |
30-YR |
SINCE INCEPTION
(12/14/93) |
RMT (NAV) |
4.79 |
14.79 |
-0.02 |
11.69 |
8.34 |
12.31 |
8.72 |
10.32 |
10.80 |
10.64 |
Market
Price Performance History Since Inception (12/14/93)
Cumulative Performance of Investment through 6/30/241
|
1-YR |
5-YR |
10-YR |
15-YR |
20-YR |
SINCE
INCEPTION (12/14/93) |
RMT |
14.1% |
71.5% |
115.4% |
495.3% |
379.1% |
1754.4% |
![](https://www.sec.gov/Archives/edgar/data/912147/000094937724000126/img019_v1.jpg)
1 | Reflects the cumulative
performance experience of a continuous common stockholder who purchased one share at
inception ($7.50 IPO), reinvested all distributions and fully participated in the primary
subscription of the Fund's 1994 rights offering. |
2 | Reflects
the actual month-end market price movement of one share as it has traded on NYSE and,
prior to 12/1/03, on the Nasdaq. |
Morningstar
Style Map™ As of 6/30/24
The
Morningstar Style Map is the Morningstar Style Box™ with the center 75% of fund holdings plotted as the Morningstar
Ownership Zone™. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar
Ownership Zone provides detail about a portfolio’s 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 fund’s ownership zone may vary. See page 63 for additional information.
Value
of $10,000
Invested on 6/30/2000 (Russell Microcap
Inception)
as of 6/30/24 ($)
Top
10 Positions
%
of Net Assets
Transcat |
3.3 |
PAR Technology |
2.5 |
Sprott |
2.2 |
Camtek |
2.2 |
Major
Drilling Group International |
1.9 |
Mesa
Laboratories |
1.9 |
Aspen
Aerogels |
1.8 |
IES Holdings |
1.5 |
Onto Innovation |
1.5 |
nLIGHT |
1.4 |
Portfolio
Sector Breakdown
%
of Net Assets
Information
Technology |
24.4 |
Industrials |
21.4 |
Financials |
14.9 |
Health
Care |
10.4 |
Materials |
7.4 |
Consumer
Discretionary |
7.0 |
Energy |
5.6 |
Communication
Services |
3.1 |
Real
Estate |
1.7 |
Consumer
Staples |
0.6 |
Utilities |
0.2 |
Investment
Companies |
0.6 |
Preferred
Stock |
0.0 |
Cash
and Cash Equivalents, Net of Outstanding Line of Credit |
2.7 |
Calendar
Year Total Returns (%)
YEAR |
RMT |
2023 |
16.6 |
2022 |
-16.9 |
2021 |
19.2 |
2020 |
33.6 |
2019 |
22.4 |
2018 |
-11.6 |
2017 |
17.7 |
2016 |
22.0 |
2015 |
-11.7 |
2014 |
3.5 |
2013 |
44.5 |
2012 |
17.3 |
2011 |
-7.7 |
2010 |
28.5 |
2009 |
46.5 |
Portfolio Diagnostics |
|
|
|
Fund Net Assets |
$535
million |
Number
of Holdings |
251 |
Turnover Rate |
16% |
Net Asset Value |
$10.56 |
Market Price |
$9.19 |
Average
Market Capitalization1 |
$816 million |
Weighted Average P/B Ratio 2 |
2.0x |
Active
Share 3 |
95% |
U.S. Investments (% of Net Assets) |
73.6% |
Non-U.S.
Investments (% of Net Assets) |
23.7% |
1 | Geometric
Average. This weighted calculation uses each portfolio
holding’s market cap in a way designed to not skew the effect of
very large or small holdings; instead, it aims to better identify
the portfolio’s center, which Royce believes offers a more accurate
measure of average market cap than a simple mean or median. |
2 | Harmonic
Average. This weighted calculation evaluates a portfolio
as if it were a single stock and measures it overall. It compares the
total market value of the portfolio to the portfolio’s share in the
earnings or book value, as the case may be, of its underlying stocks. |
3 | Active Share is the sum of the absolute values of the different
weightings of each holding in the Fund versus each holding in the
benchmark, divided by two. |
Important
Performance and Expense Information
All performance information reflects past
performance, is presented on a total return basis, net of the Fund’s investment advisory fee, reflects the reinvestment of
distributions and does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the sale of Fund
shares. 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.royceinvest.com. The market price of the Fund’s 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 investments in securities of larger-cap companies. The Fund’s 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 above, the sum
of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s
year-to-date performance for 2024.
2024
Semiannual Report to Stockholders | 23
Royce Micro-Cap Trust
Schedule of Investments |
Common Stocks – 96.7% |
| |
SHARES | | |
VALUE | |
COMMUNICATION SERVICES – 3.1% | |
| | | |
| | |
ENTERTAINMENT - 1.0% | |
| | | |
| | |
Chicken Soup for the Soul Entertainment Cl. A 1 | |
| 346,930 | | |
$ | 67,305 | |
IMAX Corporation 1 | |
| 321,900 | | |
| 5,398,263 | |
| |
| | | |
| 5,465,568 | |
INTERACTIVE MEDIA & SERVICES - 1.0% | |
| | | |
| | |
QuinStreet 1 | |
| 271,200 | | |
| 4,499,208 | |
†Vimeo
1 | |
| 240,558 | | |
| 897,281 | |
ZipRecruiter Cl. A 1 | |
| 11,378 | | |
| 103,426 | |
| |
| | | |
| 5,499,915 | |
MEDIA - 1.1% | |
| | | |
| | |
Magnite 1 | |
| 298,173 | | |
| 3,962,719 | |
TechTarget 1 | |
| 50,000 | | |
| 1,558,500 | |
| |
| | | |
| 5,521,219 | |
Total (Cost
$14,482,088) | |
| | | |
| 16,486,702 | |
CONSUMER DISCRETIONARY – 7.0% | |
| | | |
| | |
AUTOMOBILE COMPONENTS - 1.3% | |
| | | |
| | |
Patrick Industries 2 | |
| 8,360 | | |
| 907,478 | |
Sebang Global Battery 3 | |
| 50,500 | | |
| 3,806,355 | |
Standard Motor Products 2 | |
| 47,460 | | |
| 1,316,066 | |
Stoneridge 1,2 | |
| 56,200 | | |
| 896,952 | |
| |
| | | |
| 6,926,851 | |
DIVERSIFIED CONSUMER SERVICES - 1.2% | |
| | | |
| | |
Park Lawn | |
| 50,000 | | |
| 950,623 | |
Universal
Technical Institute 1 | |
| 355,500 | | |
| 5,592,015 | |
| |
| | | |
| 6,542,638 | |
HOTELS, RESTAURANTS & LEISURE - 1.6% | |
| | | |
| | |
Century Casinos 1 | |
| 222,500 | | |
| 616,325 | |
Inspired Entertainment 1 | |
| 150,000 | | |
| 1,372,500 | |
Lindblad
Expeditions Holdings 1,2 | |
| 629,194 | | |
| 6,071,722 | |
Nathan's Famous | |
| 5,984 | | |
| 405,596 | |
| |
| | | |
| 8,466,143 | |
HOUSEHOLD DURABLES - 1.4% | |
| | | |
| | |
†Beazer
Homes USA 1 | |
| 26,864 | | |
| 738,223 | |
Cavco Industries 1,2,4 | |
| 6,210 | | |
| 2,149,715 | |
Legacy Housing 1 | |
| 162,038 | | |
| 3,717,152 | |
Lifetime Brands 2 | |
| 119,294 | | |
| 1,024,735 | |
| |
| | | |
| 7,629,825 | |
LEISURE PRODUCTS - 0.3% | |
| | | |
| | |
Clarus Corporation | |
| 254,903 | | |
| 1,715,497 | |
SPECIALTY RETAIL - 1.2% | |
| | | |
| | |
AutoCanada 1 | |
| 321,700 | | |
| 4,521,977 | |
†Leslie's
1 | |
| 132,179 | | |
| 553,830 | |
Shoe Carnival 2 | |
| 34,632 | | |
| 1,277,575 | |
| |
| | | |
| 6,353,382 | |
Total
(Cost $30,316,381) | |
| | | |
| 37,634,336 | |
CONSUMER STAPLES – 0.6% | |
| | | |
| | |
CONSUMER STAPLES DISTRIBUTION & RETAIL - 0.0% | |
| | | |
| | |
Rite Aid 1,3 | |
| 200,000 | | |
| 2,000 | |
FOOD PRODUCTS - 0.6% | |
| | | |
| | |
CubicFarm Systems 1 | |
| 40,000 | | |
| 6,140 | |
J G Boswell Company 3 | |
| 2,490 | | |
| 1,406,875 | |
John B. Sanfilippo & Son 2 | |
| 7,900 | | |
| 767,643 | |
Seneca Foods Cl. A 1 | |
| 14,474 | | |
| 830,808 | |
| |
| | | |
| 3,011,466 | |
Total
(Cost $3,667,677) | |
| | | |
| 3,013,466 | |
| |
| | |
| |
ENERGY - 5.6% | |
| | | |
| | |
ENERGY EQUIPMENT & SERVICES - 3.1% | |
| | | |
| | |
Bristow
Group 1,2 | |
| 177,900 | | |
| 5,964,987 | |
Newpark Resources 1 | |
| 219,184 | | |
| 1,821,419 | |
Pason Systems | |
| 280,983 | | |
| 3,785,327 | |
SEACOR Marine Holdings 1,2 | |
| 216,957 | | |
| 2,926,750 | |
†Select Water Solutions Cl. A | |
| 129,104 | | |
| 1,381,413 | |
TerraVest Industries | |
| 11,952 | | |
| 631,563 | |
| |
| | | |
| 16,511,459 | |
OIL, GAS & CONSUMABLE FUELS - 2.5% | |
| | | |
| | |
Dorchester Minerals L.P. | |
| 76,981 | | |
| 2,374,864 | |
Dorian LPG | |
| 72,669 | | |
| 3,049,191 | |
Kimbell Royalty Partners L.P. | |
| 55,724 | | |
| 911,645 | |
Navigator Holdings | |
| 175,000 | | |
| 3,055,500 | |
Northern Oil & Gas 2 | |
| 34,200 | | |
| 1,271,214 | |
REX American Resources 1 | |
| 13,750 | | |
| 626,863 | |
†Riley Exploration Permian | |
| 28,533 | | |
| 807,769 | |
StealthGas 1 | |
| 229,664 | | |
| 1,688,030 | |
| |
| | | |
| 13,785,076 | |
Total
(Cost $22,603,418) | |
| | | |
| 30,296,535 | |
FINANCIALS - 14.9% | |
| | | |
| | |
BANKS - 2.5% | |
| | | |
| | |
Bank of N.T. Butterfield & Son | |
| 21,867 | | |
| 767,969 | |
Chemung Financial 2 | |
| 31,000 | | |
| 1,488,000 | |
Citizens Bancshares 3 | |
| 3,615 | | |
| 164,338 | |
CNB Financial | |
| 20,766 | | |
| 423,834 | |
†Coastal
Financial 1 | |
| 9,963 | | |
| 459,693 | |
†Dime Community Bancshares | |
| 21,304 | | |
| 434,601 | |
First Bancshares (The) | |
| 16,393 | | |
| 425,890 | |
†First Foundation | |
| 72,814 | | |
| 476,932 | |
First National Bank Alaska 3 | |
| 787 | | |
| 153,662 | |
HBT Financial | |
| 66,916 | | |
| 1,366,425 | |
†Hingham Institution for Savings | |
| 2,497 | | |
| 446,663 | |
Live Oak Bancshares 2 | |
| 30,900 | | |
| 1,083,354 | |
Midway Investments 1,5 | |
| 735,647 | | |
| 0 | |
OP Bancorp | |
| 38,163 | | |
| 365,983 | |
†Origin Bancorp | |
| 13,238 | | |
| 419,909 | |
United Bancorporation of Alabama 3 | |
| 3,919 | | |
| 188,700 | |
†Unity Bancorp | |
| 14,582 | | |
| 431,190 | |
Virginia National Bankshares 2 | |
| 89,910 | | |
| 2,949,048 | |
WSFS Financial | |
| 22,500 | | |
| 1,057,500 | |
| |
| | | |
| 13,103,691 | |
CAPITAL MARKETS - 9.3% | |
| | | |
| | |
B. Riley Financial 2 | |
| 44,633 | | |
| 787,326 | |
Barings BDC | |
| 215,300 | | |
| 2,094,869 | |
Bolsa Mexicana de Valores | |
| 1,068,000 | | |
| 1,805,588 | |
Bridge Investment Group Holdings Cl. A | |
| 108,821 | | |
| 807,452 | |
Canaccord Genuity Group | |
| 621,067 | | |
| 3,840,669 | |
Donnelley Financial Solutions 1,2 | |
| 59,464 | | |
| 3,545,244 | |
GCM Grosvenor Cl. A | |
| 224,300 | | |
| 2,189,168 | |
Great Elm Group 1 | |
| 682,245 | | |
| 1,228,041 | |
MarketWise Cl. A | |
| 500,000 | | |
| 580,000 | |
Open Lending 1 | |
| 191,038 | | |
| 1,065,992 | |
OTC Markets Group 3 | |
| 55,446 | | |
| 2,708,537 | |
Perella Weinberg Partners Cl. A | |
| 140,676 | | |
| 2,285,985 | |
Silvercrest Asset Management Group Cl. A 2 | |
| 289,589 | | |
| 4,514,692 | |
Sprott | |
| 290,119 | | |
| 12,030,592 | |
StoneX Group 1,2 | |
| 45,997 | | |
| 3,464,034 | |
Tel Aviv Stock Exchange 3 | |
| 343,000 | | |
| 2,453,599 | |
24 |
2024 Semiannual Report to Stockholders |
THE ACCOMPANYING
NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
June
30, 2024 (unaudited)
Schedule of Investments (continued) |
| |
SHARES | | |
VALUE | |
FINANCIALS (continued) | |
| | | |
| | |
CAPITAL MARKETS (continued) | |
| | | |
| | |
U.S. Global Investors Cl. A | |
| 439,454 | | |
$ | 1,146,975 | |
Urbana Corporation | |
| 237,600 | | |
| 979,543 | |
Value Line | |
| 18,570 | | |
| 799,810 | |
Westaim Corporation (The) 1 | |
| 500,000 | | |
| 1,480,209 | |
| |
| | | |
| 49,808,325 | |
CONSUMER FINANCE - 0.6% | |
| | | |
| | |
EZCORP Cl. A 1,2,4 | |
| 310,902 | | |
| 3,255,144 | |
FINANCIAL SERVICES - 2.4% | |
| | | |
| | |
Acacia Research 1,2,4 | |
| 455,920 | | |
| 2,284,159 | |
Cass Information Systems | |
| 14,065 | | |
| 563,584 | |
ECN Capital | |
| 1,031,200 | | |
| 1,258,802 | |
International Money Express 1 | |
| 43,969 | | |
| 916,314 | |
NewtekOne | |
| 378,975 | | |
| 4,763,716 | |
Repay Holdings Cl. A 1 | |
| 273,271 | | |
| 2,885,742 | |
Waterloo Investment Holdings 1,5 | |
| 806,000 | | |
| 225,680 | |
| |
| | | |
| 12,897,997 | |
INSURANCE - 0.1% | |
| | | |
| | |
†International General Insurance Holdings | |
| 41,627 | | |
| 582,778 | |
Total
(Cost $72,812,948) | |
| | | |
| 79,647,935 | |
HEALTH CARE – 10.4% | |
| | | |
| | |
BIOTECHNOLOGY - 1.5% | |
| | | |
| | |
Absci Corporation 1 | |
| 192,493 | | |
| 592,878 | |
Actinium Pharmaceuticals 1 | |
| 50,000 | | |
| 370,000 | |
Arcturus Therapeutics Holdings 1 | |
| 129,836 | | |
| 3,161,507 | |
Avid Bioservices 1 | |
| 7,116 | | |
| 50,808 | |
CareDx 1 | |
| 100,000 | | |
| 1,553,000 | |
Caribou Biosciences 1 | |
| 142,912 | | |
| 234,376 | |
MeiraGTx Holdings 1 | |
| 137,025 | | |
| 576,875 | |
Prime Medicine 1 | |
| 60,999 | | |
| 313,535 | |
Relay Therapeutics 1 | |
| 48,381 | | |
| 315,444 | |
Travere Therapeutics 1 | |
| 47,573 | | |
| 391,050 | |
†Werewolf
Therapeutics 1 | |
| 125,484 | | |
| 306,181 | |
| |
| | | |
| 7,865,654 | |
HEALTH CARE EQUIPMENT & SUPPLIES - 1.8% | |
| | | |
| | |
Artivion 1 | |
| 62,700 | | |
| 1,608,255 | |
AtriCure 1,2 | |
| 35,503 | | |
| 808,403 | |
Atrion Corporation | |
| 1,200 | | |
| 542,916 | |
Inogen 1 | |
| 19,409 | | |
| 157,795 | |
Profound Medical 1 | |
| 189,100 | | |
| 1,620,008 | |
Semler Scientific 1,2 | |
| 22,400 | | |
| 770,560 | |
Surmodics 1,2 | |
| 23,900 | | |
| 1,004,756 | |
UFP Technologies 1,2 | |
| 8,949 | | |
| 2,361,373 | |
Utah Medical Products | |
| 15,114 | | |
| 1,009,767 | |
| |
| | | |
| 9,883,833 | |
HEALTH CARE PROVIDERS & SERVICES - 1.7% | |
| | | |
| | |
Castle Biosciences 1 | |
| 15,365 | | |
| 334,496 | |
Cross Country Healthcare 1,2 | |
| 58,900 | | |
| 815,176 | |
Hims & Hers Health Cl. A 1 | |
| 200,000 | | |
| 4,038,000 | |
Joint Corp. (The) 1 | |
| 127,484 | | |
| 1,792,425 | |
ModivCare 1 | |
| 25,000 | | |
| 656,000 | |
National Research 2 | |
| 59,221 | | |
| 1,359,122 | |
| |
| | | |
| 8,995,219 | |
HEALTH CARE TECHNOLOGY - 0.7% | |
| | | |
| | |
Simulations Plus 2 | |
| 72,770 | | |
| 3,538,077 | |
LIFE SCIENCES TOOLS & SERVICES - 4.4% | |
| | | |
| | |
Azenta 1,2 | |
| 15,700 | | |
| 826,134 | |
BioLife
Solutions 1 | |
| 313,712 | | |
| 6,722,848 | |
Cytek Biosciences 1 | |
| 108,128 | | |
| 603,354 | |
Harvard Bioscience 1 | |
| 358,391 | | |
| 1,021,415 | |
MaxCyte 1 | |
| 202,652 | | |
| 794,396 | |
Mesa
Laboratories 2 | |
| 115,965 | | |
| 10,062,283 | |
OmniAb 1 | |
| 133,323 | | |
| 499,961 | |
Quanterix Corporation 1 | |
| 199,800 | | |
| 2,639,358 | |
†Standard
BioTools 1 | |
| 304,231 | | |
| 538,489 | |
| |
| | | |
| 23,708,238 | |
PHARMACEUTICALS - 0.3% | |
| | | |
| | |
Knight Therapeutics 1 | |
| 237,000 | | |
| 982,267 | |
Theravance Biopharma 1,2 | |
| 59,009 | | |
| 500,396 | |
| |
| | | |
| 1,482,663 | |
Total
(Cost $54,604,242) | |
| | | |
| 55,473,684 | |
INDUSTRIALS – 21.4% | |
| | | |
| | |
AEROSPACE & DEFENSE - 0.9% | |
| | | |
| | |
Astronics Corporation 1 | |
| 84,767 | | |
| 1,697,883 | |
CPI Aerostructures 1 | |
| 189,700 | | |
| 468,559 | |
Innovative Solutions and Support 1 | |
| 78,828 | | |
| 472,968 | |
Park Aerospace | |
| 165,311 | | |
| 2,261,454 | |
| |
| | | |
| 4,900,864 | |
AIR FREIGHT & LOGISTICS - 0.2% | |
| | | |
| | |
†Radiant
Logistics 1 | |
| 171,704 | | |
| 976,996 | |
BUILDING PRODUCTS - 0.7% | |
| | | |
| | |
Burnham Holdings Cl. A 3 | |
| 117,000 | | |
| 1,480,050 | |
Insteel Industries 2 | |
| 49,700 | | |
| 1,538,712 | |
Quanex Building Products | |
| 18,198 | | |
| 503,175 | |
| |
| | | |
| 3,521,937 | |
COMMERCIAL SERVICES & SUPPLIES - 1.3% | |
| | | |
| | |
Acme United | |
| 25,000 | | |
| 876,750 | |
Civeo Corporation | |
| 74,998 | | |
| 1,868,950 | |
Montrose Environmental Group 1 | |
| 29,475 | | |
| 1,313,406 | |
VSE Corporation | |
| 33,140 | | |
| 2,925,599 | |
| |
| | | |
| 6,984,705 | |
CONSTRUCTION & ENGINEERING - 3.7% | |
| | | |
| | |
†Argan | |
| 23,914 | | |
| 1,749,548 | |
†Bowman
Consulting Group 1 | |
| 40,000 | | |
| 1,271,600 | |
Construction Partners Cl. A 1 | |
| 38,973 | | |
| 2,151,699 | |
Granite Construction | |
| 13,500 | | |
| 836,595 | |
IES
Holdings 1,2 | |
| 56,587 | | |
| 7,884,267 | |
Limbach Holdings 1 | |
| 32,691 | | |
| 1,861,099 | |
MasTec 1 | |
| 11,958 | | |
| 1,279,386 | |
Matrix Service 1,2 | |
| 61,915 | | |
| 614,816 | |
Northwest Pipe 1,2 | |
| 68,151 | | |
| 2,315,090 | |
| |
| | | |
| 19,964,100 | |
ELECTRICAL EQUIPMENT - 1.9% | |
| | | |
| | |
American Superconductor 1 | |
| 114,244 | | |
| 2,672,167 | |
Hammond Power Solutions Cl. A | |
| 15,405 | | |
| 1,255,439 | |
LSI Industries | |
| 199,970 | | |
| 2,893,566 | |
Powell Industries | |
| 18,070 | | |
| 2,591,238 | |
Preformed Line Products | |
| 6,298 | | |
| 784,353 | |
| |
| | | |
| 10,196,763 | |
GROUND TRANSPORTATION - 1.3% | |
| | | |
| | |
Covenant Logistics Group Cl. A | |
| 17,440 | | |
| 859,617 | |
FTAI Infrastructure | |
| 96,930 | | |
| 836,506 | |
Universal Logistics Holdings 2 | |
| 125,240 | | |
| 5,083,492 | |
| |
| | | |
| 6,779,615 | |
THE ACCOMPANYING NOTES ARE
AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
2024 Semiannual
Report to Stockholders | 25 |
Royce Micro-Cap
Trust
Schedule of Investments (continued) |
| |
SHARES | | |
VALUE | |
| |
| | | |
| | |
INDUSTRIALS (continued) | |
| | | |
| | |
MACHINERY - 2.7% | |
| | | |
| | |
Graham Corporation 1 | |
| 149,850 | | |
$ | 4,219,776 | |
Hurco Companies 2 | |
| 16,566 | | |
| 252,797 | |
L B Foster Company 1,2 | |
| 95,300 | | |
| 2,050,856 | |
Lindsay Corporation 2 | |
| 43,118 | | |
| 5,298,340 | |
Luxfer Holdings 2 | |
| 45,561 | | |
| 528,052 | |
Shyft Group (The) | |
| 44,983 | | |
| 533,498 | |
Standex International | |
| 5,700 | | |
| 918,555 | |
Tennant Company | |
| 9,370 | | |
| 922,383 | |
| |
| | | |
| 14,724,257 | |
MARINE TRANSPORTATION - 1.1% | |
| | | |
| | |
Algoma Central | |
| 40,000 | | |
| 415,190 | |
Clarkson 3 | |
| 52,700 | | |
| 2,759,206 | |
†Star Bulk Carriers | |
| 119,143 | | |
| 2,904,706 | |
| |
| | | |
| 6,079,102 | |
PROFESSIONAL SERVICES - 1.2% | |
| | | |
| | |
Forrester Research 1,2 | |
| 212,876 | | |
| 3,635,922 | |
Franklin Covey 1,2 | |
| 14,287 | | |
| 542,906 | |
Heidrick & Struggles International | |
| 16,683 | | |
| 526,849 | |
NV5 Global 1 | |
| 11,400 | | |
| 1,059,858 | |
Resources Connection | |
| 59,300 | | |
| 654,672 | |
| |
| | | |
| 6,420,207 | |
TRADING COMPANIES & DISTRIBUTORS - 6.4% | |
| | | |
| | |
†Alta Equipment Group | |
| 160,119 | | |
| 1,287,357 | |
Distribution
Solutions Group 1 | |
| 184,590 | | |
| 5,537,700 | |
EVI
Industries 2 | |
| 352,409 | | |
| 6,667,578 | |
†Teqnion
1,3 | |
| 167,400 | | |
| 3,181,378 | |
Transcat
1,2 | |
| 147,282 | | |
| 17,626,710 | |
| |
| | | |
| 34,300,723 | |
Total (Cost $81,627,169) | |
| | | |
| 114,849,269 | |
INFORMATION TECHNOLOGY – 24.4% | |
| | | |
| | |
COMMUNICATIONS EQUIPMENT - 1.5% | |
| | | |
| | |
Applied Optoelectronics 1 | |
| 35,829 | | |
| 297,022 | |
Aviat Networks 1 | |
| 1,785 | | |
| 51,212 | |
Clearfield 1,2 | |
| 106,866 | | |
| 4,120,753 | |
Digi International 1,2 | |
| 70,000 | | |
| 1,605,100 | |
Harmonic 1 | |
| 68,206 | | |
| 802,785 | |
Ituran Location and Control | |
| 50,000 | | |
| 1,232,000 | |
| |
| | | |
| 8,108,872 | |
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 8.3% | |
| | | |
| | |
Bel Fuse Cl. A | |
| 18,805 | | |
| 1,521,512 | |
†Bel Fuse Cl. B | |
| 27,811 | | |
| 1,814,390 | |
†Climb Global Solutions | |
| 7,552 | | |
| 474,341 | |
Evolv Technologies Holdings 1 | |
| 318,000 | | |
| 810,900 | |
Fabrinet 1 | |
| 1,980 | | |
| 484,684 | |
FARO Technologies 1,2,4 | |
| 107,169 | | |
| 1,714,704 | |
Luna Innovations 1 | |
| 715,745 | | |
| 2,290,384 | |
nLIGHT 1,2 | |
| 698,185 | | |
| 7,631,162 | |
PAR Technology 1,2 | |
| 287,024 | | |
| 13,515,960 | |
Powerfleet NJ 1 | |
| 1,191,159 | | |
| 5,443,597 | |
Richardson Electronics | |
| 593,664 | | |
| 7,058,665 | |
Vishay Precision Group 1,2 | |
| 45,600 | | |
| 1,388,064 | |
| |
| | | |
| 44,148,363 | |
IT SERVICES - 0.5% | |
| | | |
| | |
†Applied
Digital 1 | |
| 48,847 | | |
| 290,640 | |
Hackett Group (The) 2 | |
| 77,700 | | |
| 1,687,644 | |
Liberated Syndication 1,5 | |
| 56,000 | | |
| 0 | |
†Thoughtworks
Holding 1 | |
| 295,062 | | |
| 837,976 | |
| |
| | | |
| 2,816,260 | |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 9.0% | |
| | | |
| | |
Alpha & Omega Semiconductor 1,2 | |
| 17,900 | | |
| 668,923 | |
Amtech Systems 1,2 | |
| 92,184 | | |
| 540,198 | |
AXT 1 | |
| 200,909 | | |
| 679,072 | |
Camtek | |
| 94,775 | | |
| 11,869,621 | |
Cohu 1,2 | |
| 38,990 | | |
| 1,290,569 | |
FormFactor 1,2,4 | |
| 20,582 | | |
| 1,245,829 | |
Ichor Holdings 1 | |
| 67,620 | | |
| 2,606,751 | |
inTEST Corporation 1 | |
| 147,941 | | |
| 1,461,657 | |
Nova 1,2 | |
| 31,500 | | |
| 7,387,695 | |
NVE Corporation 2 | |
| 36,900 | | |
| 2,756,061 | |
Onto
Innovation 1,2,4 | |
| 35,766 | | |
| 7,852,783 | |
PDF Solutions 1,2 | |
| 29,700 | | |
| 1,080,486 | |
Photronics 1 | |
| 183,100 | | |
| 4,517,077 | |
Ultra Clean Holdings 1,2 | |
| 81,000 | | |
| 3,969,000 | |
| |
| | | |
| 47,925,722 | |
SOFTWARE - 4.4% | |
| | | |
| | |
Alkami Technology 1 | |
| 100,156 | | |
| 2,852,443 | |
American Software Cl. A 2 | |
| 111,152 | | |
| 1,014,818 | |
Cellebrite
DI 1 | |
| 629,619 | | |
| 7,523,947 | |
Computer Modelling Group | |
| 629,875 | | |
| 6,072,915 | |
†Coveo
Solutions 1 | |
| 117,000 | | |
| 666,226 | |
Digital Turbine 1 | |
| 241,500 | | |
| 400,890 | |
Enfusion Cl. A 1 | |
| 73,670 | | |
| 627,668 | |
Mitek Systems 1 | |
| 73,449 | | |
| 821,160 | |
Optiva 1,5 | |
| 28,000 | | |
| 129,966 | |
PROS Holdings 1,2,4 | |
| 83,537 | | |
| 2,393,335 | |
Riskified Cl. A 1 | |
| 46,724 | | |
| 298,566 | |
†TeraWulf
1 | |
| 69,116 | | |
| 307,566 | |
Upland Software 1 | |
| 244,100 | | |
| 607,809 | |
| |
| | | |
| 23,717,309 | |
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.7% | |
| | | |
| | |
AstroNova 1 | |
| 115,860 | | |
| 1,788,878 | |
Intevac 1 | |
| 539,400 | | |
| 2,082,084 | |
| |
| | | |
| 3,870,962 | |
Total
(Cost $93,879,756) | |
| | | |
| 130,587,488 | |
MATERIALS – 7.4% | |
| | | |
| | |
CHEMICALS - 2.5% | |
| | | |
| | |
Aspen
Aerogels 1 | |
| 414,856 | | |
| 9,894,316 | |
Bioceres Crop Solutions 1 | |
| 50,000 | | |
| 560,500 | |
LSB Industries 1 | |
| 176,540 | | |
| 1,444,097 | |
Orion | |
| 59,420 | | |
| 1,303,675 | |
| |
| | | |
| 13,202,588 | |
METALS & MINING - 4.9% | |
| | | |
| | |
Alamos Gold Cl. A | |
| 261,044 | | |
| 4,094,883 | |
†Alphamin Resources | |
| 468,951 | | |
| 363,355 | |
Altius Minerals | |
| 171,100 | | |
| 2,650,202 | |
†Compass Minerals International | |
| 67,609 | | |
| 698,401 | |
Haynes International 2 | |
| 23,799 | | |
| 1,397,001 | |
MAG Silver 1 | |
| 154,050 | | |
| 1,797,763 | |
Major
Drilling Group International 1 | |
| 1,547,872 | | |
| 10,273,512 | |
Olympic Steel 2 | |
| 14,897 | | |
| 667,833 | |
Sandstorm Gold 2 | |
| 810,000 | | |
| 4,406,400 | |
| |
| | | |
| 26,349,350 | |
Total
(Cost $26,087,877) | |
| | | |
| 39,551,938 | |
26 |
2024 Semiannual Report to Stockholders |
THE ACCOMPANYING
NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
June
30, 2024 (unaudited)
Schedule of Investments (continued) |
| |
SHARES | | |
VALUE | |
REAL ESTATE – 1.7% | |
| | | |
| | |
OFFICE REITS - 0.3% | |
| | | |
| | |
Postal Realty Trust Cl. A | |
| 114,000 | | |
$ | 1,519,620 | |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.4% | |
| | | |
| | |
Altus Group | |
| 73,400 | | |
| 2,710,550 | |
Real Matters 1 | |
| 229,500 | | |
| 1,053,514 | |
RMR Group (The) Cl. A 2 | |
| 108,200 | | |
| 2,445,320 | |
Tejon Ranch 1,2 | |
| 80,828 | | |
| 1,378,926 | |
| |
| | | |
| 7,588,310 | |
Total
(Cost $10,718,807) | |
| | | |
| 9,107,930 | |
UTILITIES – 0.2% | |
| | | |
| | |
WATER UTILITIES - 0.2% | |
| | | |
| | |
Global Water Resources | |
| 106,000 | | |
| 1,282,600 | |
Total
(Cost $678,400) | |
| | | |
| 1,282,600 | |
TOTAL COMMON STOCKS | |
| | | |
| | |
(Cost $411,478,763) | |
| | | |
| 517,931,883 | |
INVESTMENT COMPANIES – 0.6% | |
| | | |
| | |
FINANCIALS – 0.6% | |
| | | |
| | |
CAPITAL MARKETS - 0.6% | |
| | | |
| | |
ASA Gold and Precious Metals | |
| 171,150 | | |
| 3,001,971 | |
(Cost $2,914,814) | |
| | | |
| 3,001,971 | |
PREFERRED STOCK – 0.0% | |
| | |
| |
ENERGY – 0.0% | |
| | |
| |
OIL, GAS & CONSUMABLE FUELS - 0.0% | |
| | | |
| | |
Imperial Petroleum 8.75% Series A | |
| 4,784 | | |
| 118,165 | |
(Cost $71,808) | |
| | | |
| 118,165 | |
REPURCHASE
AGREEMENT– 3.2% Fixed Income Clearing Corporation, 4.75% dated 6/28/24, due 7/1/24, maturity value
$16,835,682 (collateralized by obligations of various U.S. Government Agencies,
0.125%-3.625% due 5/15/26-4/15/27, valued at $17,165,604) | |
| |
(Cost $16,829,020) | |
| 16,829,020 | |
TOTAL INVESTMENTS – 100.5% | |
| | |
(Cost $431,294,405) | |
| 537,881,039 | |
LIABILITIES LESS CASH AND OTHER ASSETS – (0.5)% | |
| (2,453,859 | ) |
| |
| | |
NET
ASSETS – 100.0% | |
$ | 535,427,180 | |
| 2 | All
or a portion of these securities were pledged as collateral in connection with the Fund's revolving credit agreement as of June
30, 2024. Total market value of pledged securities as of June 30, 2024, was $5,865,055. |
| 3 | These
securities are defined as Level 2 securities due to fair value being based on quoted prices for similar securities and/or due
to the application of fair value factors. See Notes to Financial Statements. |
| 4 | As
of June 30, 2024, a portion of these securities, in the aggregate amount of $1,227,822, were rehypothecated by BNP Paribas Prime
Brokerage International, Limited in connection with the Fund's revolving credit agreement. See Notes to Financial Statements. |
| 5 | Securities
for which market quotations are not readily available represent 0.1% of net assets. These securities have been valued at their
fair value under procedures approved by the Fund's Board of Directors. These securities are defined as Level 3 securities due
to the use of significant unobservable inputs in the determination of fair value. See Notes to Financial Statements. |
Bold
indicates the Fund’s 20 largest equity holdings in terms of June 30, 2024, market value.
TAX
INFORMATION: The cost of total investments for Federal income tax purposes was $431,981,138. As of June 30, 2024, net unrealized
appreciation for all securities was $105,899,901 consisting of aggregate gross unrealized appreciation of $162,245,044 and aggregate
gross unrealized depreciation of $56,345,143. The primary cause of the difference between book and tax basis cost is the timing
of the recognition of losses on securities sold.
THE ACCOMPANYING NOTES ARE
AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
2024 Semiannual
Report to Stockholders | 27 |
Royce
Micro-Cap Trust |
June
30, 2024 (unaudited) |
Statement
of Assets and Liabilities
ASSETS: | |
|
Investments at value | |
$ | 521,052,019 | |
Repurchase agreements (at cost and value) | |
| 16,829,020 | |
Foreign currency (cost $22,672) | |
| 22,695 | |
Receivable for investments sold | |
| 646,963 | |
Receivable for dividends and interest | |
| 151,368 | |
Prepaid expenses and other assets | |
| 47,904 | |
Total Assets | |
| 538,749,969 | |
LIABILITIES: | |
| | |
Revolving credit agreement | |
| 2,000,000 | |
Payable for investments purchased | |
| 701,599 | |
Payable for investment advisory fee | |
| 508,406 | |
Payable for directors’ fees | |
| 21,605 | |
Payable for interest expense | |
| 10,867 | |
Accrued expenses | |
| 80,312 | |
Total Liabilities | |
| 3,322,789 | |
Net Assets | |
$ | 535,427,180 | |
ANALYSIS OF NET ASSETS: | |
| | |
Paid-in capital - $0.001 par value per share; 50,682,108 shares outstanding (150,000,000 shares authorized) | |
$ | 427,222,353 | |
Total distributable earnings (loss) | |
| 125,691,682 | |
Quarterly distributions | |
| (17,486,855 | ) |
Net Assets (net asset value per share - $10.56) | |
$ | 535,427,180 | |
Investments at identified cost | |
$ | 414,465,385 | |
28 | 2024 Semiannual
Report to Stockholders |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS |
Royce
Micro-Cap Trust |
Six
Months Ended June 30, 2024 (unaudited) |
Statement
of Operations
INVESTMENT INCOME: | |
|
INCOME: | |
|
Dividends | |
$ | 3,061,399 | |
Foreign withholding tax | |
| (142,187 | ) |
Interest | |
| 343,793 | |
Rehypothecation income | |
| 40 | |
Total income | |
| 3,263,045 | |
EXPENSES: | |
| | |
Investment advisory fees | |
| 3,098,297 | |
Administrative and office facilities | |
| 128,312 | |
Interest expense | |
| 65,909 | |
Stockholder reports | |
| 63,413 | |
Custody and transfer agent fees | |
| 52,228 | |
Directors’ fees | |
| 43,051 | |
Professional fees | |
| 40,012 | |
Other expenses | |
| 36,020 | |
Total expenses | |
| 3,527,242 | |
Net investment income (loss) | |
| (264,197 | ) |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | |
| | |
NET REALIZED GAIN (LOSS): | |
| | |
Investments | |
| 16,724,571 | |
Foreign currency transactions | |
| 6,726 | |
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | |
| | |
Investments | |
| 7,224,961 | |
Other assets and liabilities denominated in foreign currency | |
| 224 | |
Net realized and unrealized gain (loss) on investments and foreign currency | |
| 23,956,482 | |
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS | |
$ | 23,692,285 | |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS |
2024 Semiannual Report to Stockholders |
29 |
Royce Micro-Cap Trust
Statement
of Changes in Net Assets
| |
SIX MONTHS ENDED 6/30/24 (UNAUDITED) |
|
YEAR ENDED 12/31/23 |
|
| |
| | | |
| | |
INVESTMENT OPERATIONS: | |
| | | |
| | |
Net investment income (loss) | |
$ | (264,197 | ) | |
$ | (587,854 | ) |
Net realized gain (loss) on investments and foreign currency | |
| 16,731,297 | | |
| 67,119,219 | |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | |
| 7,225,185 | | |
| 6,362,921 | |
Net increase (decrease) in net assets from investment operations | |
| 23,692,285 | | |
| 72,894,286 | |
DISTRIBUTIONS: | |
| | | |
| | |
Total distributable earnings | |
| (17,486,855 | ) | |
| (35,849,605 | ) |
Total distributions | |
| (17,486,855 | ) | |
| (35,849,605 | ) |
CAPITAL STOCK TRANSACTIONS: | |
| | | |
| | |
Reinvestment of distributions | |
| 8,728,408 | | |
| 17,559,078 | |
Total capital stock transactions | |
| 8,728,408 | | |
| 17,559,078 | |
Net Increase (Decrease) In Net Assets | |
| 14,933,838 | | |
| 54,603,759 | |
NET ASSETS: | |
| | | |
| | |
Beginning of period | |
| 520,493,342 | | |
| 465,889,583 | |
End of period | |
$ | 535,427,180 | | |
$ | 520,493,342 | |
30 | 2024 Semiannual
Report to Stockholders |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS |
Royce
Micro-Cap Trust |
Six
Months Ended June 30, 2024 (unaudited) |
Statement
of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES: | |
|
Net increase (decrease) in net assets from investment operations | |
$ | 23,692,285 | |
Adjustments to reconcile net increase (decrease) in net assets from investment operations to net cash provided by operating activities: | |
| | |
Purchases of long-term investments | |
| (81,415,383 | ) |
Proceeds from sales and maturities of long-term investments | |
| 94,587,702 | |
Net purchases, sales and maturities of short-term investments | |
| (4,379,016 | ) |
Net (increase) decrease in dividends and interest receivable and other assets | |
| 233,477 | |
Net increase (decrease) in interest expense payable, accrued expenses and other liabilities | |
| (83,787 | ) |
Net change in unrealized appreciation (depreciation) on investments | |
| (7,224,961 | ) |
Net realized gain (loss) on investments | |
| (16,724,571 | ) |
Net cash provided by operating activities | |
| 8,685,746 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | |
Distributions net of reinvestment (reinvestment $8,728,408) | |
| (8,758,447 | ) |
Net cash used for financing activities | |
| (8,758,447 | ) |
INCREASE (DECREASE) IN CASH: | |
| (72,701 | ) |
Cash and foreign currency at beginning of period | |
| 95,396 | |
Cash and foreign currency at end of period | |
$ | 22,695 | |
Supplemental
disclosure of cash flow information:
For
the six months ended June 30, 2024, the Fund paid $66,271 in interest expense.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS |
2024 Semiannual Report to Stockholders |
31 |
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 Fund’s performance for the periods presented.
| |
SIX MONTHS | |
YEARS ENDED |
| |
ENDED 6/30/24 (UNAUDITED) | |
12/31/23 | |
12/31/22 | |
12/31/21 | |
12/31/20 | |
12/31/19 |
Net Asset Value, Beginning of Period | |
$ | 10.47 | | |
$ | 9.77 | | |
$ | 13.06 | | |
$ | 11.79 | | |
$ | 9.63 | | |
$ | 8.53 | |
INVESTMENT OPERATIONS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net investment income (loss) | |
| (0.00 | ) | |
| (0.01 | ) | |
| (0.02 | ) | |
| 0.04 | 1 | |
| (0.03 | ) | |
| 0.01 | |
Net realized and unrealized gain (loss) on investments and foreign currency | |
| 0.46 | | |
| 1.50 | | |
| (2.26 | ) | |
| 2.12 | | |
| 2.86 | | |
| 1.81 | |
Net increase (decrease) in net assets from investment operations | |
| 0.46 | | |
| 1.49 | | |
| (2.28 | ) | |
| 2.16 | | |
| 2.83 | | |
| 1.82 | |
DISTRIBUTIONS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net investment income | |
| –2 | | |
| – | | |
| (0.05 | ) | |
| – | | |
| (0.08 | ) | |
| (0.03 | ) |
Net realized gain on investments and foreign currency | |
| (0.35 | )2 | |
| (0.74 | ) | |
| (0.89 | ) | |
| (0.84 | ) | |
| (0.53 | ) | |
| (0.65 | ) |
Return of capital | |
| –2 | | |
| – | | |
| (0.01 | ) | |
| – | | |
| – | | |
| – | |
Total distributions | |
| (0.35 | ) | |
| (0.74 | ) | |
| (0.95 | ) | |
| (0.84 | ) | |
| (0.61 | ) | |
| (0.68 | ) |
CAPITAL STOCK TRANSACTIONS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Effect of reinvestment of distributions by Common Stockholders | |
| (0.02 | ) | |
| (0.05 | ) | |
| (0.06 | ) | |
| (0.05 | ) | |
| (0.06 | ) | |
| (0.04 | ) |
Total capital stock transactions | |
| (0.02 | ) | |
| (0.05 | ) | |
| (0.06 | ) | |
| (0.05 | ) | |
| (0.06 | ) | |
| (0.04 | ) |
Net Asset Value, End of Period | |
$ | 10.56 | | |
$ | 10.47 | | |
$ | 9.77 | | |
$ | 13.06 | | |
$ | 11.79 | | |
$ | 9.63 | |
Market Value, End of Period | |
$ | 9.19 | | |
$ | 9.24 | | |
$ | 8.68 | | |
$ | 11.55 | | |
$ | 10.12 | | |
$ | 8.54 | |
TOTAL RETURN:3 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net Asset Value | |
| 4.79 | %4 | |
| 16.64 | % | |
| (16.89 | )% | |
| 19.17 | % | |
| 33.60% | | |
| 22.44 | % |
Market Value | |
| 3.34 | %4 | |
| 15.86 | % | |
| (16.51 | )% | |
| 22.78 | % | |
| 29.32% | | |
| 24.82 | % |
RATIOS BASED ON AVERAGE NET ASSETS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Investment advisory fee expense5 | |
| 1.18 | %6 | |
| 1.46 | % | |
| 1.47 | % | |
| 1.04 | % | |
| 1.19% | | |
| 0.85 | % |
Other operating expenses | |
| 0.17 | %6 | |
| 0.39 | % | |
| 0.29 | % | |
| 0.16 | % | |
| 0.24% | | |
| 0.35 | % |
Total expenses (net) | |
| 1.35 | %6 | |
| 1.85 | % | |
| 1.76 | % | |
| 1.20 | % | |
| 1.43% | | |
| 1.20 | % |
Expenses excluding interest expense | |
| 1.32 | %6 | |
| 1.62 | % | |
| 1.63 | % | |
| 1.16 | % | |
| 1.34% | | |
| 1.01 | % |
Expenses prior to balance credits | |
| 1.35 | %6 | |
| 1.85 | % | |
| 1.76 | % | |
| 1.20 | % | |
| 1.43% | | |
| 1.20 | % |
Net investment income (loss) | |
| (0.10 | )%6 | |
| (0.12 | )% | |
| (0.21 | )% | |
| 0.30 | %1 | |
| (0.34)% | | |
| 0.10 | % |
SUPPLEMENTAL DATA: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net Assets, End of Period (in thousands) | |
$ | 535,427 | | |
$ | 520,493 | | |
$ | 465,890 | | |
$ | 590,313 | | |
$ | 515,916 | | |
$ | 404,807 | |
Portfolio Turnover Rate | |
| 16 | % | |
| 30 | % | |
| 26 | % | |
| 15 | % | |
| 17 | % | |
| 15 | % |
REVOLVING CREDIT AGREEMENT: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Asset coverage | |
| 26871 | % | |
| 26125 | % | |
| 4335 | % | |
| 2783 | % | |
| 2445 | % | |
| 1940 | % |
Asset coverage per $1,000 | |
$ | 268,714 | | |
$ | 261,247 | | |
$ | 43,354 | | |
$ | 27,832 | | |
$ | 24,451 | | |
$ | 19,400 | |
1 |
A special distribution
from ECN Capital resulted in an increase in net investment income (loss) per share of $0.07 and an increase in the ratio of
net investment income (loss) to average net assets of 0.51%. |
2 |
Amounts are subject to change and recharacterization
at year end. |
3 | The
Market Value Total Return is calculated assuming a purchase of Common Stock on the opening
of the first business day and a sale on the closing of the last business day of each
period. Dividends and distributions are assumed for the purposes of this calculation
to be reinvested at prices obtained under the Fund’s Distribution Reinvestment and Cash
Purchase Plan. Net Asset Value Total Return is calculated on the same basis, except that
the Fund’s net asset value is used on the purchase, sale and dividend reinvestment dates
instead of market value. |
4 |
Not annualized |
5 | The
investment advisory fee is calculated based on average net assets over a rolling 36-month
basis, while the above ratios of investment advisory fee expenses are based on the average
net assets over a 6-month basis for the six months ended 6/30/24, and a 12-month basis
for the years shown. |
6 |
Annualized |
32 |
2024 Semiannual Report to Stockholders |
THE ACCOMPANYING
NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
Royce
Micro-Cap Trust
Notes
to Financial Statements (unaudited)
Summary
of Significant Accounting Policies
Royce
Micro-Cap Trust, Inc. (the “Fund”), is a diversified closed-end investment company that was incorporated under
the laws of the State of Maryland on September 9, 1993. The Fund commenced operations on December 14, 1993.
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of income and expenses during the reporting period. Actual results could differ from those estimates.
The
Fund is an investment company registered under the Investment Company Act of 1940 (the “1940 Act”) and accordingly
follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting
Standard Codification Topic 946 “Financial Services-Investment Companies.”
Royce
& Associates, LP, the Fund’s investment adviser, is a majority-owned subsidiary of Franklin Resources, Inc.
and primarily conducts business using the name Royce Investment Partners (“Royce”).
VALUATION
OF INVESTMENTS:
Portfolio
securities held by the Fund are valued as of the close of trading on the New York Stock Exchange (“NYSE”)
(generally 4:00 p.m. Eastern time) on the valuation date. Investments in money market funds are valued at net asset value
per share. Values for non-U.S. dollar denominated equity securities are converted to U.S. dollars daily based upon prevailing
foreign currency exchange rates as quoted by a major bank.
Portfolio
securities that are listed on an exchange or Nasdaq, or traded on OTC Market Group Inc.’s OTC Link ATS or other alternative
trading system, are valued: (i) on the basis of their last reported sales prices or official closing prices, as applicable, on
a valuation date; or (ii) at their highest reported bid prices in the event such equity securities did not trade on a valuation
date. Such inputs are generally referred to as “Level 1” inputs because they represent reliable quoted prices in active
markets for identical securities.
If
the value of a portfolio security held by the Fund cannot be determined solely by reference to Level 1 inputs, such portfolio
security will be “fair valued.” The Fund’s Board of Directors has designated Royce as valuation designee
to perform fair value determinations for such portfolio securities in accordance with Rule 2a-5 under the 1940 Act (“Rule
2a-5”). Pursuant to Rule 2a-5, fair values are determined in accordance with policies and procedures approved by
the Fund’s Board of Directors and policies and procedures adopted by Royce in its capacity as valuation designee for the
Fund. Fair valued securities are reported as either “Level 2” or “Level 3” securities.
As
a general principle, the fair value of a security is the amount which the Fund might reasonably expect to receive for
the security upon its current sale. However, in light of the judgment involved in fair valuations, no assurance can be
given that a fair value assigned to a particular portfolio security will be the amount which the Fund might be able to
receive upon its current sale. When a fair value pricing methodology is used, the fair value prices used by the Fund for
such securities will likely differ from the quoted or published prices for the same securities.
Level
2 inputs are other significant observable inputs (e.g., dealer bid side quotes and quoted prices for securities with comparable
characteristics). Examples of situations in which Level 2 inputs are used to fair value portfolio securities held by the
Fund on a particular valuation date include:
| ● | Over-the-counter
equity securities other than those traded on OTC Market Group Inc.’s OTC Link ATS or other alternative trading system (collectively
referred to herein as “Other OTC Equity Securities”) are fair valued at their highest bid price when Royce receives
at least two bid side quotes from dealers who make markets in such securities; |
| ● | Certain
bonds and other fixed income securities may be fair valued by reference to other securities with comparable ratings, interest
rates, and maturities in accordance with valuation methodologies maintained by certain independent pricing services; and |
| ● | The
Fund uses an independent pricing service to fair value certain non-U.S. equity securities when U.S. market volatility exceeds
a certain threshold. This pricing service uses proprietary correlations it has developed between the movement of prices of non-U.S.
equity securities and indices of U.S.-traded securities, futures contracts, and other indications to estimate the fair value of
such non-U.S. securities. |
Level
3 inputs are significant unobservable inputs. Examples of Level 3 inputs include (without limitation) the last trade price
for a security before trading was suspended or terminated; discounts to last trade price for lack of marketability or
otherwise; market price information regarding other securities; information received from the issuer and/or published
documents, including SEC filings and financial statements; and other publicly available information. Pursuant to the above-referenced
policies and procedures, Royce may use
2024
Semiannual Report to Stockholders | 33 |
Notes to
Financial Statements (unaudited) (continued)
VALUATION
OF INVESTMENTS (continued):
various
techniques in making fair value determinations based upon Level 3 inputs, which techniques may include (without limitation):
(i) workout valuation methods (e.g., earnings multiples, discounted cash flows, liquidation values, derivations of book
value, firm or probable offers from qualified buyers for the issuer’s ongoing business, etc.); (ii) discount or
premium from market, or compilation of other observable market information, for other similar freely traded securities;
(iii) conversion from the readily available market price of a security into which an affected security is convertible
or exchangeable; and (iv) pricing models or other formulas. In the case of restricted securities, fair value determinations
generally start with the inherent or intrinsic worth of the relevant security, without regard to the restrictive feature,
and are reduced for any diminution in value resulting from the restrictive feature. Due to the inherent uncertainty of
such valuations, these fair values may differ significantly from the values that would have been used had an active market
existed.
A
security that is valued by reference to Level 1 or Level 2 inputs may drop to Level 3 on a particular valuation date for
several reasons, including if:
| ● | an
equity security that is listed on an exchange or Nasdaq, or traded on OTC Market Group Inc.’s OTC Link ATS or other alternative
trading system, has not traded and there are no bids; |
| ● | Royce
does not receive at least two bid side quotes for an Other OTC Equity Security; |
| ● | the
independent pricing services are unable to supply fair value prices; or |
| ● | the
Level 1 or Level 2 inputs become otherwise unreliable for any reason (e.g., a significant event occurs after the close of trading
for a security but prior to the time the Fund prices its shares). |
The
table below shows the aggregate value of the various Level 1, Level 2, and Level 3 securities held by the Fund as of June
30, 2024. Any Level 2 or Level 3 securities held by the Fund are noted in its Schedule of Investments. The inputs or methodology
used for valuing securities are not necessarily an indication of the risk associated with owning those securities.
|
LEVEL
1 |
LEVEL
2 |
LEVEL
3 |
TOTAL |
Common
Stocks |
$499,271,538 |
$18,304,699 |
$355,646 |
$517,931,883 |
Investment
Companies |
3,001,971 |
– |
– |
3,001,971 |
Preferred
Stock |
118,165 |
– |
– |
118,165 |
Repurchase
Agreement |
– |
16,829,020 |
– |
16,829,020 |
|
|
|
|
|
UNREALIZED
GAIN (LOSS) 2 |
|
|
BALANCE
AS OF
12/31/23 |
PURCHASES |
TRANSFERS
IN1 |
REALIZED
GAIN (LOSS) 2 |
CURRENTLY
HELD
SECURITIES |
SECURITIES
NO
LONGER HELD |
BALANCE
AS OF
6/30/24
|
Common
Stocks |
$225,680 |
$
– |
$129,966 |
$
– |
$0 |
$
– |
$355,646 |
| 1 | Transfers
into Level 3 represents a security for which there were no longer readily available market quotations at June 30, 2024. |
| 2 | The
net change in unrealized appreciation (depreciation) is included in the accompanying Statement of Operations. Change in unrealized
appreciation (depreciation) includes net unrealized appreciation (depreciation) resulting from changes in investment values during
the reporting period and the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized.
Net realized gain (loss) from investments and foreign currency transactions is included in the accompanying Statement of Operations. |
REPURCHASE
AGREEMENTS:
The
Fund may enter into repurchase agreements with institutions that the Fund’s investment adviser has determined are
creditworthy. The Fund restricts repurchase agreements to maturities of no more than seven days. Securities pledged as
collateral for repurchase agreements, which are held until maturity of the repurchase agreements, are marked-to-market
daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued
interest). Repurchase agreements could involve certain risks in the event of default or insolvency of the counter-party,
including possible delays or restrictions upon the ability of the Fund to dispose of its underlying securities. The remaining
contractual maturity of the repurchase agreement held by the Fund as of June 30, 2024, is next business day and continuous.
FOREIGN
CURRENCY:
Net
realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies,
expiration of currency forward contracts, currency gains or losses realized between the trade and settlement dates on
securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and liabilities, other than investments in securities
at the end of the reporting period, as a result of changes in foreign currency exchange rates.
The
Fund does not isolate that portion of the results of operations resulting from fluctuations in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included
with the net realized and unrealized gain or loss on investments.
For
the purposes of the Statement of Cash Flows, the Fund defines Cash as cash, including foreign currency.
34
| 2024 Semiannual Report to Stockholders |
Royce
Micro-Cap Trust
Notes
to Financial Statements (unaudited) (continued)
TAXES:
As
a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the Fund is not subject to income
taxes to the extent that it distributes substantially all of its taxable income for its fiscal year. The Schedule of Investments
includes information regarding income taxes under the caption “Tax Information.”
DISTRIBUTIONS:
The
Fund pays quarterly distributions on the Fund’s Common Stock at the annual rate of 7% of the rolling average of
the prior four calendar quarter-end NAVs of the Fund’s Common Stock, with the fourth quarter distribution being
the greater of 1.75% of the rolling average or the distribution required by IRS regulations. Distributions to Common Stockholders
are recorded on ex-dividend date. To the extent that distributions in any year are not paid from long-term capital gains,
net investment income or net short-term capital gains, they will represent a return of capital. Distributions are determined
in accordance with income tax regulations that may differ from accounting principles generally accepted in the United
States of America. Permanent book and tax differences relating to stockholder distributions will result in reclassifications
within the capital accounts. Undistributed net investment income may include temporary book and tax basis differences,
which will reverse in a subsequent period. Any taxable income or gain remaining undistributed at fiscal year end is distributed
in the following year.
INVESTMENT
TRANSACTIONS AND RELATED INVESTMENT INCOME:
Investment
transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date except for certain
dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as
the information is received by the Fund. Non-cash dividend income is recorded at the fair market value of the securities
received. Interest income is recorded on an accrual basis. Premiums and discounts on debt securities are amortized using
the effective yield-to-maturity method. Realized gains and losses from investment transactions are determined on the basis
of identified cost for book and tax purposes.
EXPENSES:
The
Fund incurs direct and indirect expenses. Expenses directly attributable to the Fund are charged to the Fund, while expenses
applicable to more than one of the Royce Funds are allocated equitably. Certain personnel, occupancy costs and other administrative
expenses related to all of the Royce Funds are allocated by Royce under an administration agreement and are included in
administrative and office facilities and professional fees.
INDEMNIFICATION
PROVISIONS:
Reference
is made to Maryland law, the Fund’s Articles of Incorporation, as amended and supplemented, and the Fund’s
Amended and Restated By-laws, each of which provides for the indemnification by the Fund of the Fund’s officers
and directors under the circumstances and to the extent set forth therein. Reference is also made to the investment advisory
agreement between the Fund and Royce which provides for the indemnification by the Fund of Royce under the circumstances
and to the extent set forth therein. Additionally, in the normal course of business, the Fund enters into contracts with
service providers that contain general indemnification provisions in favor of such service providers and other covered
persons. The amount of any potential Fund liability under these indemnification arrangements, if any, currently cannot
be determined with any degree of specificity. The Fund is not currently in possession of any information that would cause
it to believe that the Fund is reasonably likely to be subject to any material adverse impact from the operation of these
indemnification arrangements. No assurance can be given, however, that the Fund will not incur any liability from the
operation of these indemnification arrangements. Any future liability to the Fund that may arise from the operation of
such arrangements will be publicly disclosed to the extent required by relevant accounting guidance and applicable laws,
rules, and regulations.
Capital
Stock:
The
Fund issued 963,314 and 2,030,423 shares of Common Stock as reinvestment of distributions for the six months ended June
30, 2024, and the year ended December 31, 2023, respectively.
Borrowings:
The
Fund is party to a revolving credit agreement (the “credit agreement”) with BNP Paribas Prime Brokerage International,
Limited (BNPPI). The Fund pays a commitment fee of 0.50% per annum on the unused portion of the then-current maximum amount
that may be borrowed by the Fund under the credit agreement. The credit agreement has a 179-day rolling term that resets
daily. The Fund pledges eligible portfolio securities as collateral and has granted a security interest in such pledged
securities to, and in favor of, BNPPI as security for the loan balance outstanding. The amount of eligible portfolio securities
required to be pledged as collateral is determined by BNPPI in accordance with the credit agreement. In determining collateral
requirements, the value of eligible securities pledged as collateral is subject to discount by BNPPI based upon a variety
of factors set forth in the credit agreement. As of June 30, 2024, the market value of eligible securities pledged as
collateral exceeded two times the loan balance outstanding.
2024
Semiannual Report to Stockholders | 35 |
Royce
Micro-Cap Trust
Notes
to Financial Statements (unaudited) (continued)
Borrowings
(continued):
If
the Fund fails to meet certain requirements, or comply with other financial covenants set forth in the credit agreement,
the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the credit agreement,
which may necessitate the sale of portfolio securities at potentially inopportune times. BNPPI may terminate the credit
agreement upon certain ratings downgrades of its corporate parent, which would result in the Fund’s entire loan
balance becoming immediately due and payable. The occurrence of such ratings downgrades may necessitate the sale of portfolio
securities at potentially inopportune times. BNPPI may also terminate the credit agreement upon sixty (60) calendar days’
prior written notice to the Fund in the event the Fund’s net asset value per share as of the close of business on
the last business day of any calendar month declines by thirty-five percent (35%) or more from the Fund’s net asset
value per share as of the close of business on the last business day of the immediately preceding calendar month.
The
credit agreement also permits, subject to certain conditions, BNPPI to rehypothecate portfolio securities pledged by the
Fund up to the amount of the loan balance outstanding. The Fund continues to receive payments in lieu of dividends and
interest on rehypothecated securities. The Fund also has the right under the credit agreement to recall the rehypothecated
securities from BNPPI on demand. If BNPPI fails to deliver the recalled security in a timely manner, the Fund is compensated
by BNPPI for any fees or losses related to the failed delivery or, in the event a recalled security is not returned by
BNPPI, the Fund, upon notice to BNPPI, may reduce the loan balance outstanding by the value of the recalled security failed
to be returned. The Fund receives a portion of the fees earned by BNPPI in connection with the rehypothecation of portfolio
securities.
The
current maximum amount the Fund may borrow under the credit agreement is $22,000,000. The Fund has the right to further
reduce the maximum amount it can borrow under the credit agreement upon one (1) business day’s prior written notice
to BNPPI. In addition, the Fund and BNPPI may agree to increase the maximum amount the Fund can borrow under the credit
agreement, which amount may not exceed $60,000,000.
As
of June 30, 2024, the Fund had outstanding borrowings of $2,000,000. During the six-month period ended June 30, 2024,
the Fund had an average daily loan balance of $2,000,000 at a weighted average borrowing cost of 6.52%. The maximum loan
balance outstanding during the six-month period ended June 30, 2024, was $2,000,000. As of June 30, 2024, the aggregate
value of rehypothecated securities was $1,227,822. During the six-month period ended June 30, 2024, the Fund earned $40
in fees from rehypothecated securities.
Investment
Advisory Agreement:
As
compensation for its services under the investment advisory agreement, Royce receives a fee comprised of a Basic Fee (“Basic
Fee”) and an adjustment to the Basic Fee based on the investment performance of the Fund in relation to the investment
record of the Russell 2000. The fee is payable monthly.
The
Basic Fee is a monthly fee equal to 1/12 of 1% (1% on an annualized basis) of the average of the Fund’s month-end
net assets for the rolling 36-month period ending with such month (the “performance period”). The Basic Fee
for each month is increased or decreased at the rate of 1/12 of .05% for each percentage point that the investment performance
of the Fund exceeds, or is exceeded by, the percentage change in the investment record of the Russell 2000 for the performance
period by more than two percentage points. The performance period for each such month is a rolling 36-month period ending
with such month. The maximum increase or decrease in the Basic Fee for any month may not exceed 1/12 of .5%. Accordingly,
for each month, the maximum monthly fee rate as adjusted for performance is 1/12 of 1.5% and is payable if the investment
performance of the Fund exceeds the percentage change in the investment record of the Russell 2000 by 12 or more percentage
points for the performance period, and the minimum monthly fee rate as adjusted for performance is 1/12 of .5% and is
payable if the percentage change in the investment record of the Russell 2000 exceeds the investment performance of the
Fund by 12 or more percentage points for the performance period.
For
the six rolling 36-month periods ended June 2024, the Fund’s investment performance ranged from 2% above to 9% above
the investment performance of the Russell 2000. Accordingly, the net investment advisory fee consisted of a Basic Fee
of $2,564,466 and a net upward adjustment of $533,831 for the performance of the Fund relative to that of the Russell
2000. For the six months ended June 30, 2024, the Fund expensed Royce investment advisory fees totaling $3,098,297.
Purchases
and Sales of Investment Securities:
For
the six months ended June 30, 2024, the costs of purchases and proceeds from sales of investment securities, other than
short-term securities, amounted to $81,458,351 and $94,375,348, respectively.
Subsequent
Events:
Subsequent
events have been evaluated through the date the financial statements were issued and it has been determined that no events
have occurred that require disclosure.
36
| 2024 Semiannual Report to Stockholders |
This
page is intentionally left blank.
2024
Semiannual Report to Stockholders | 37 |
MANAGERS’
DISCUSSION (UNAUDITED)
Royce
Small-Cap Trust (RVT)
Chuck Royce,
Lauren Romeo, CFA®,
Steven McBoyle,
Andrew Palen,
George Necakov,
CFA®
FUND
PERFORMANCE
Royce
Small-Cap Trust (RVT) advanced 4.7% on an NAV (net asset value) basis and 3.3% on a market price basis for the year-to-date
period ended 6/30/24, versus respective returns of 1.7% and -0.7% for its primary small-cap benchmark, the unleveraged
Russell 2000 Index, and the unleveraged S&P SmallCap 600 Index, for the same period. The Fund also maintained
its longer-term relative advantages over the Russell 2000, beating it on both an NAV and market price basis for the 1-,
3-, 5-, 10-, 15-, 25-, 30-, 35-year, and since inception (11/26/86) periods ended 6/30/24.
WHAT
WORKED... AND WHAT DIDN’T
Six
of RVT’s 11 equity sectors contributed to 2024’s first-half performance, led by Industrials, Information Technology,
and Financials. The top detractors were Real Estate, Communication Services, and Consumer Discretionary. At the industry
level, semiconductors & semiconductor equipment (Information Technology) contributed most, followed by two groups
in Industrials: construction & engineering and trading companies & distributors. The top detractors were real
estate management & development (Real Estate), life sciences tools & services (Health Care), and diversified telecommunication
services (Communication Services).
The
Fund’s top contributor at the position level was IES Holdings, which designs and installs electrical and technology
systems into numerous infrastructure segments. Through a thoughtful growth strategy focused on both internal and external
opportunities, IES has slowly built scale in each of its four business segments. This has resulted in rapidly improving
operating profitability, driving strong growth in earnings before interest, taxes, depreciation & amortization (“EBITDA”).
Impinj manufactures radio-frequency identification chips that are used for location and authentication, which go into
readers and a variety of retail items and which help companies manage, track, and secure their inventories. Starting in
the apparel industry, Impinj has won customers in the larger categories of general merchandise and package logistics,
thereby extending its growth runway. Its share rebounded following excess channel inventory overhang and slower retail
apparel spending just as many companies have been affected by similar supply chain issues. Given its valuation expansion
in recent months, we trimmed our position but still like its longer-term prospects.
|
|
|
|
|
|
|
|
Top
Contributors to Performance |
|
|
Top Detractors from Performance |
|
|
|
Year-to-Date
Through 6/30/24 (%)1 |
|
|
Year-to-Date Through 6/30/24 (%)2 |
|
|
|
IES
Holdings |
0.77 |
|
Enovis Corporation |
-0.26 |
|
|
Impinj |
0.61 |
|
Globalstar |
-0.25 |
|
|
TransMedics
Group |
0.57 |
|
Quaker Houghton |
-0.20 |
|
|
FTAI
Aviation |
0.50 |
|
Forward Air |
-0.19 |
|
|
Coherent
Corp. |
0.26 |
|
Ziff Davis |
-0.18 |
|
|
1
Includes dividends |
|
|
2 Net of dividends |
|
|
|
|
|
|
|
|
|
The
portfolio’s top detractor at the position level was Enovis Corporation, an orthopedic-focused, medical technology
company with a global market share in Prevention & Recovery, including braces and rehabilitation products, as well
as a growing Reconstruction segment. Its stock has been under pressure since closing its acquisition of LimaCorporate
earlier this year. The strategic fit and valuation of the deal make sense to us, but near-term integration is always a
risky process, especially with new leadership in Enovis Reconstruction segment. Investors appear to be waiting for evidence
that product line rationalization, salesforce integration, cost synergies, and, ultimately, revenue growth from cross-selling
the combined company’s product are materializing consistent with management’s expectations. We chose to hold
our position in Globalstar in the first half of this year. The company offers a low earth orbit satellite constellation
for satellite phone, data, and earth observations and offers services to various industries and users in more than 120
countries. The company issued guidance for 2024 that disappointed some investors and analysts, which was a major factor
in its share price decline in the first half. We are confident that the company’s long-term prospects remain sound.
RVT’s
advantage over the Russell 2000 in the first half of 2024 was mostly attributable to stock selection, though sector allocation
was also additive. At the sector level, stock selection in Industrials, Financials, and Information Technology (where
our overweight also helped) did most to boost relative performance. Conversely, relative results were most hampered by
a much lower weight in Energy, stock selection in Communication Services, and stock selection and a lower weight in Consumer
Staples.
CURRENT
POSITIONING AND OUTLOOK
We
anticipate that active managers who focus on earnings growth remain best positioned for strong performance going forward.
Our
outlook is rooted first in the fact that the Russell 2000 ended June with a near-record number of companies with no earnings.
Second, earnings acceleration is expected to be higher for small-cap companies than for large-cap businesses through the
end of 2024. This encouraging earnings picture is buttressed by a growing U.S. economy that we expect to see more and
more tangible benefits from reshoring, the CHIPS Act, and infrastructure improvements in the coming months. Along with
increasing recognition for the small-cap companies that are providing the ‘pick and shovel’ for AI applications,
we feel these activities should foster advantages for active small-cap managers who focus on profitable companies and
other fundamental measures of financial and operational strength. Needless to say, we think the Fund is very well positioned
to continue outperforming the overall small-cap market in this kind of environment.
38
| 2024 Semiannual Report to Stockholders |
PERFORMANCE
AND PORTFOLIO REVIEW (UNAUDITED) |
SYMBOLS MARKET
PRICE RVT NAV XRVTX |
Performance
Average
Annual Total Return (%) Through 6/30/24
|
JAN-JUN
20241 |
1-YR |
3-YR |
5-YR |
10-YR |
15-YR |
20-YR |
25-YR |
30-YR |
35-YR |
SINCE
INCEPTION
(11/26/86) |
RVT (NAV) |
4.67 |
13.94 |
0.99 |
9.85 |
8.34 |
11.87 |
8.31 |
9.28 |
10.17 |
10.26 |
10.31 |
Market
Price Performance History Since Inception (11/26/86)
Cumulative
Performance of Investment through 6/30/241
|
1-YR |
5-YR |
10-YR |
15-YR |
20-YR |
SINCE
INCEPTION (11/26/86) |
RVT |
13.4% |
58.4% |
119.5% |
457.8% |
340.0% |
3203.6% |
| 1 | Reflects
the cumulative performance of an investment made by a stockholder who purchased one share
at inception ($10.00 IPO), reinvested all distributions and fully participated in primary
subscriptions of the Fund's rights offerings. |
| 2 | Reflects
the actual month-end market price movement of one share as it has traded on the NYSE. |
Morningstar
Style Map™As of 6/30/24
The
Morningstar Style Map is the Morningstar Style Box™ with the center 75% of fund holdings plotted as the Morningstar
Ownership Zone™. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar
Ownership Zone provides detail about a portfolio’s 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 fund's ownership zone may vary. See page 63 for additional information.
Value
of $10,000
Invested
on 11/26/86 as of 6/30/24 ($)
Top
10 Positions
%
of Net Assets
Alamos
Gold Cl. A |
1.6 |
Impinj |
1.3 |
Enovis
Corporation |
1.2 |
IES
Holdings |
1.2 |
Assured
Guaranty |
1.2 |
TransMedics
Group |
1.2 |
Air
Lease Cl. A |
1.1 |
Haemonetics
Corporation |
1.1 |
SEI
Investments |
1.1 |
VanEck
Junior Gold Miners ETF |
1.0 |
Portfolio
Sector Breakdown
%
of Net Assets
Industrials |
24.3 |
Financials |
18.8 |
Information
Technology |
18.7 |
Health
Care |
10.7 |
Consumer
Discretionary |
8.8 |
Materials |
7.6 |
Real
Estate |
3.1 |
Communication
Services |
2.9 |
Energy |
2.1 |
Consumer
Staples |
2.0 |
Utilities |
0.1 |
Investment
Companies |
1.1 |
Outstanding
Line of Credit, Net of Cash and Cash Equivalents |
-0.2 |
Calendar
Year Total Returns (%)
YEAR |
RVT |
2023 |
21.6 |
2022 |
-21.2 |
2021 |
20.0 |
2020 |
21.9 |
2019 |
30.5 |
2018 |
-14.4 |
2017 |
19.4 |
2016 |
26.8 |
2015 |
-8.1 |
2014 |
0.8 |
2013 |
34.1 |
2012 |
15.4 |
2011 |
-10.1 |
2010 |
30.3 |
2009 |
44.6 |
Portfolio
Diagnostics
Fund
Net Assets |
$1,908
million |
Number
of Holdings |
445 |
Turnover Rate |
22% |
Net
Asset Value |
$16.54 |
Market
Price |
$14.47 |
Net
Leverage1 |
0.2% |
Average
Market Capitalization 2 |
$3,013
million |
Weighted
Average P/E Ratio 3,4 |
16.5x |
Weighted
Average P/B Ratio 3 |
2.1x |
Active
Share 5 |
81% |
U.S.
Investments (% of Net Assets) |
85.0% |
Non-U.S.
Investments (% of Net Assets) |
15.2% |
| 1 | Net
leverage is the percentage, in excess of 100%, of the total value of equity type
investments, divided by net assets. |
| 2 | Geometric
Average. This weighted calculation uses each portfolio holding’s market cap
in a way designed to not skew the effect of very large or small holdings; instead, it
aims to better identify the portfolio’s center, which Royce believes offers a more
accurate measure of average market cap than a simple mean or median. |
| 3 | Harmonic
Average. This weighted calculation evaluates a portfolio as if it were a single stock
and measures it overall. It compares the total market value of the portfolio to the portfolio’s
share in the earnings or book value, as the case may be, of its underlying stocks. |
| 4 | The
Fund’s P/E Ratio calculation excludes companies with zero or negative earnings
(21% of portfolio holdings as of 6/30/24). |
| 5 | Active
Share is the sum of the absolute values of the different weightings of each holding
in the Fund versus each holding in the benchmark, divided by two. |
Important
Performance and Risk Information
All
performance information reflects past performance, is presented on a total return basis, net of the Fund’s investment advisory
fee, reflects the reinvestment of distributions and does not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the sale of Fund shares. 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.royceinvest.com. Certain immaterial
adjustments were made to the net assets of Royce Small-Cap Trust at 12/31/22 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 Fund’s 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 Fund’s 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 above, the sum
of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s
year-to-date performance for 2024.
2024
Semiannual Report to Stockholders | 39
Royce
Small-Cap Trust
Schedule
of Investments | |
| | |
| |
Common
Stocks – 99.1% | |
| | |
| |
| |
SHARES | | |
VALUE | |
| |
| | | |
| | |
COMMUNICATION SERVICES – 2.9% | |
| | | |
| | |
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.5% | |
| | | |
| | |
Cogent Communications Holdings 1 | |
| 254 | | |
$ | 14,336 | |
Globalstar 2 | |
| 5,535,611 | | |
| 6,199,884 | |
IDT Corporation Cl. B | |
| 62,622 | | |
| 2,249,382 | |
Liberty Latin America Cl. C 1,2,3 | |
| 83,228 | | |
| 800,653 | |
| |
| | | |
| 9,264,255 | |
ENTERTAINMENT - 0.2% | |
| | | |
| | |
IMAX Corporation 2 | |
| 262,660 | | |
| 4,404,808 | |
INTERACTIVE MEDIA & SERVICES - 1.7% | |
| | | |
| | |
Cars.com 2 | |
| 182,200 | | |
| 3,589,340 | |
QuinStreet 1,2 | |
| 203,754 | | |
| 3,380,279 | |
†Reddit
Cl. A 2 | |
| 40,000 | | |
| 2,555,600 | |
Shutterstock | |
| 93,629 | | |
| 3,623,442 | |
TripAdvisor 2 | |
| 32,499 | | |
| 578,807 | |
Yelp 2 | |
| 35,349 | | |
| 1,306,146 | |
Ziff Davis 1,2 | |
| 326,737 | | |
| 17,986,872 | |
| |
| | | |
| 33,020,486 | |
MEDIA - 0.4% | |
| | | |
| | |
AMC Networks Cl. A 2 | |
| 62,312 | | |
| 601,934 | |
John Wiley & Sons Cl. A | |
| 47,134 | | |
| 1,918,354 | |
Scholastic Corporation | |
| 22,939 | | |
| 813,646 | |
TechTarget 1,2,3 | |
| 30,000 | | |
| 935,100 | |
Thryv Holdings 2 | |
| 144,539 | | |
| 2,575,685 | |
| |
| | | |
| 6,844,719 | |
WIRELESS TELECOMMUNICATION SERVICES - 0.1% | |
| | | |
| | |
Gogo 2 | |
| 88,885 | | |
| 855,074 | |
Total (Cost $64,428,360) | |
| | | |
| 54,389,342 | |
| |
| | | |
| | |
CONSUMER DISCRETIONARY – 8.8% | |
| | | |
| | |
AUTOMOBILE COMPONENTS - 1.3% | |
| | | |
| | |
Dorman Products 1,2,3 | |
| 110,708 | | |
| 10,127,568 | |
Gentex Corporation 1 | |
| 75,634 | | |
| 2,549,622 | |
LCI Industries 1 | |
| 71,860 | | |
| 7,428,887 | |
†Modine
Manufacturing 2 | |
| 23,474 | | |
| 2,351,860 | |
Patrick Industries 1 | |
| 6,981 | | |
| 757,788 | |
Standard Motor Products | |
| 23,061 | | |
| 639,481 | |
Visteon Corporation 2 | |
| 17,399 | | |
| 1,856,473 | |
| |
| | | |
| 25,711,679 | |
BROADLINE RETAIL - 0.1% | |
| | | |
| | |
Ollie's Bargain Outlet Holdings 2 | |
| 15,388 | | |
| 1,510,640 | |
DIVERSIFIED CONSUMER SERVICES - 0.8% | |
| | | |
| | |
Adtalem Global Education 2 | |
| 10,330 | | |
| 704,609 | |
Perdoceo Education | |
| 77,889 | | |
| 1,668,383 | |
Stride 2 | |
| 27,589 | | |
| 1,945,025 | |
Universal Technical Institute 2 | |
| 639,032 | | |
| 10,051,973 | |
| |
| | | |
| 14,369,990 | |
HOTELS, RESTAURANTS & LEISURE - 0.3% | |
| | | |
| | |
Bloomin' Brands 1 | |
| 8,506 | | |
| 163,570 | |
†DraftKings
Cl. A 2 | |
| 19,000 | | |
| 725,230 | |
Lindblad Expeditions Holdings 2 | |
| 373,700 | | |
| 3,606,205 | |
Monarch Casino & Resort | |
| 21,766 | | |
| 1,482,918 | |
| |
| | | |
| 5,977,923 | |
HOUSEHOLD DURABLES - 1.4% | |
| | | |
| | |
Cavco Industries 1,2,3 | |
| 16,722 | | |
| 5,788,655 | |
Ethan Allen Interiors 1 | |
| 26,870 | | |
| 749,404 | |
Helen of Troy 2 | |
| 26,298 | | |
| 2,438,877 | |
Installed Building Products | |
| 27,667 | | |
| 5,690,549 | |
M/I Homes 2 | |
| 15,550 | | |
| 1,899,277 | |
Meritage Homes | |
| 10,424 | | |
| 1,687,124 | |
Skyline Champion 2 | |
| 59,742 | | |
| 4,047,520 | |
TopBuild Corp. 2 | |
| 5,151 | | |
| 1,984,526 | |
Tri Pointe Homes 2 | |
| 53,242 | | |
| 1,983,265 | |
Worthington Enterprises | |
| 19,353 | | |
| 915,977 | |
| |
| | | |
| 27,185,174 | |
LEISURE PRODUCTS - 0.4% | |
| | | |
| | |
Brunswick Corporation 1 | |
| 51,021 | | |
| 3,712,798 | |
Vista Outdoor 2 | |
| 17,827 | | |
| 671,187 | |
YETI Holdings 2 | |
| 60,263 | | |
| 2,299,033 | |
| |
| | | |
| 6,683,018 | |
SPECIALTY RETAIL - 3.7% | |
| | | |
| | |
Abercrombie & Fitch Cl. A 2 | |
| 6,541 | | |
| 1,163,251 | |
Academy Sports & Outdoors | |
| 156,431 | | |
| 8,329,951 | |
Advance Auto Parts | |
| 145,359 | | |
| 9,205,586 | |
American Eagle Outfitters | |
| 59,361 | | |
| 1,184,846 | |
America's Car-Mart 1,2,3 | |
| 87,700 | | |
| 5,280,417 | |
Asbury Automotive Group 2 | |
| 15,500 | | |
| 3,531,985 | |
AutoCanada 2 | |
| 625,600 | | |
| 8,793,749 | |
Guess? | |
| 15,373 | | |
| 313,609 | |
Monro | |
| 51,648 | | |
| 1,232,321 | |
Murphy USA | |
| 15,803 | | |
| 7,418,876 | |
ODP Corporation (The) 2 | |
| 42,390 | | |
| 1,664,655 | |
1-800-FLOWERS.COM Cl. A 2 | |
| 76,000 | | |
| 723,520 | |
OneWater Marine Cl. A 2 | |
| 156,687 | | |
| 4,319,861 | |
Signet Jewelers | |
| 88,967 | | |
| 7,969,664 | |
Valvoline 2 | |
| 230,377 | | |
| 9,952,286 | |
| |
| | | |
| 71,084,577 | |
TEXTILES, APPAREL & LUXURY GOODS - 0.8% | |
| | | |
| | |
Carter's | |
| 55,880 | | |
| 3,462,884 | |
G-III Apparel Group 2 | |
| 29,649 | | |
| 802,598 | |
Kontoor Brands | |
| 6,561 | | |
| 434,010 | |
Movado Group | |
| 74,572 | | |
| 1,853,860 | |
Ralph Lauren Cl. A | |
| 14,350 | | |
| 2,512,111 | |
Steven Madden | |
| 141,088 | | |
| 5,968,022 | |
| |
| | | |
| 15,033,485 | |
Total (Cost $138,165,803) | |
| | | |
| 167,556,486 | |
| |
| | | |
| | |
CONSUMER STAPLES – 2.0% | |
| | | |
| | |
BEVERAGES - 0.0% | |
| | | |
| | |
Celsius Holdings 2 | |
| 1,000 | | |
| 57,090 | |
CONSUMER STAPLES DISTRIBUTION & RETAIL - 0.1% | |
| | | |
| | |
PriceSmart | |
| 23,782 | | |
| 1,931,098 | |
FOOD PRODUCTS - 1.3% | |
| | | |
| | |
Cal-Maine Foods | |
| 7,633 | | |
| 466,453 | |
Freshpet 1,2,3 | |
| 28,000 | | |
| 3,622,920 | |
John B. Sanfilippo & Son | |
| 16,405 | | |
| 1,594,074 | |
Nomad Foods 1 | |
| 486,865 | | |
| 8,023,535 | |
Seneca Foods Cl. A 2 | |
| 183,460 | | |
| 10,530,604 | |
†WK Kellogg | |
| 24,014 | | |
| 395,270 | |
| |
| | | |
| 24,632,856 | |
HOUSEHOLD PRODUCTS - 0.1% | |
| | | |
| | |
Central Garden & Pet2 | |
| 34,174 | | |
| 1,315,699 | |
†Central
Garden & Pet Cl. A 2 | |
| 4,837 | | |
| 159,766 | |
WD-40 Company | |
| 1,799 | | |
| 395,133 | |
| |
| | | |
| 1,870,598 | |
PERSONAL CARE PRODUCTS - 0.5% | |
| | | |
| | |
Inter Parfums 1 | |
| 64,547 | | |
| 7,489,388 | |
40 |
2024 Semiannual Report to Stockholders |
THE ACCOMPANYING
NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
June
30, 2024 (unaudited)
Schedule of Investments
(continued) | |
| | |
| |
| |
| | |
| |
| |
SHARES | | |
VALUE | |
| |
| | | |
| | |
CONSUMER STAPLES (continued) | |
| | | |
| | |
PERSONAL CARE PRODUCTS (continued) | |
| | | |
| | |
USANA Health Sciences 2 | |
| 24,861 | | |
$ | 1,124,712 | |
| |
| | | |
| 8,614,100 | |
TOBACCO - 0.0% | |
| | | |
| | |
Universal Corporation | |
| 11,105 | | |
| 535,150 | |
Vector Group | |
| 15,048 | | |
| 159,057 | |
| |
| | | |
| 694,207 | |
Total (Cost $26,682,936) | |
| | | |
| 37,799,949 | |
| |
| | | |
| | |
ENERGY – 2.1% | |
| | | |
| | |
ENERGY EQUIPMENT & SERVICES - 1.3% | |
| | | |
| | |
Bristow Group 1,2 | |
| 219,464 | | |
| 7,358,628 | |
Core Laboratories 1 | |
| 101,045 | | |
| 2,050,203 | |
Helmerich & Payne | |
| 31,688 | | |
| 1,145,204 | |
†Liberty Energy Cl. A | |
| 47,855 | | |
| 999,691 | |
Pason Systems | |
| 812,611 | | |
| 10,947,276 | |
RPC | |
| 178,640 | | |
| 1,116,500 | |
Tidewater 2 | |
| 5,500 | | |
| 523,655 | |
| |
| | | |
| 24,141,157 | |
OIL, GAS & CONSUMABLE FUELS - 0.8% | |
| | | |
| | |
California Resources | |
| 21,286 | | |
| 1,132,841 | |
CONSOL Energy 1,2 | |
| 2,362 | | |
| 240,995 | |
CVR Energy | |
| 56,536 | | |
| 1,513,469 | |
Dorchester Minerals L.P. 1 | |
| 279,148 | | |
| 8,611,716 | |
Northern Oil & Gas | |
| 6,371 | | |
| 236,810 | |
Par Pacific Holdings 2 | |
| 20,451 | | |
| 516,388 | |
REX American Resources 2 | |
| 27,719 | | |
| 1,263,709 | |
World Kinect 1 | |
| 112,613 | | |
| 2,905,415 | |
| |
| | | |
| 16,421,343 | |
Total (Cost $30,641,174) | |
| | | |
| 40,562,500 | |
| |
| | | |
| | |
FINANCIALS – 18.8% | |
| | | |
| | |
BANKS - 4.0% | |
| | | |
| | |
Atlantic Union Bankshares | |
| 25,000 | | |
| 821,250 | |
Axos Financial 2 | |
| 25,096 | | |
| 1,434,236 | |
Banc of California | |
| 240,768 | | |
| 3,077,015 | |
Bank of N.T. Butterfield & Son 1 | |
| 226,503 | | |
| 7,954,785 | |
BankUnited 1 | |
| 312,019 | | |
| 9,132,796 | |
Cathay General Bancorp | |
| 34,783 | | |
| 1,312,015 | |
Central Pacific Financial | |
| 33,406 | | |
| 708,207 | |
Customers Bancorp 2 | |
| 25,156 | | |
| 1,206,985 | |
Dime Community Bancshares | |
| 39,215 | | |
| 799,986 | |
Eagle Bancorp | |
| 79,463 | | |
| 1,501,851 | |
First Bancorp | |
| 14,000 | | |
| 446,880 | |
First Bancshares (The) | |
| 102,569 | | |
| 2,664,743 | |
First Citizens BancShares Cl. A | |
| 5,087 | | |
| 8,564,524 | |
First Financial Bancorp | |
| 49,628 | | |
| 1,102,734 | |
Fulton Financial | |
| 80,366 | | |
| 1,364,615 | |
Hanmi Financial | |
| 183,623 | | |
| 3,070,176 | |
HBT Financial | |
| 40,400 | | |
| 824,968 | |
Hingham Institution for Savings | |
| 18,257 | | |
| 3,265,812 | |
Home BancShares | |
| 167,005 | | |
| 4,001,440 | |
Hope Bancorp | |
| 101,294 | | |
| 1,087,898 | |
Independent Bank Group | |
| 15,833 | | |
| 720,718 | |
OFG Bancorp | |
| 6,513 | | |
| 243,912 | |
Origin Bancorp | |
| 213,912 | | |
| 6,785,289 | |
Pathward Financial | |
| 12,614 | | |
| 713,574 | |
Preferred Bank | |
| 22,002 | | |
| 1,660,931 | |
S&T Bancorp | |
| 51,852 | | |
| 1,731,338 | |
TowneBank | |
| 20,000 | | |
| 545,400 | |
TrustCo Bank Corp NY | |
| 15,835 | | |
| 455,573 | |
Veritex Holdings | |
| 47,057 | | |
| 992,432 | |
WaFd | |
| 50,703 | | |
| 1,449,092 | |
†Westamerica Bancorporation | |
| 7,176 | | |
| 348,251 | |
Western Alliance Bancorp 1 | |
| 85,651 | | |
| 5,380,596 | |
| |
| | | |
| 75,370,022 | |
CAPITAL MARKETS - 6.4% | |
| | | |
| | |
Ares Management Cl. A 1 | |
| 34,800 | | |
| 4,638,144 | |
Artisan Partners Asset Management Cl. A 1 | |
| 247,672 | | |
| 10,221,423 | |
Blue Owl Capital Cl. A | |
| 44,720 | | |
| 793,780 | |
Bolsa Mexicana de Valores | |
| 1,723,106 | | |
| 2,913,128 | |
BrightSphere Investment Group | |
| 47,992 | | |
| 1,063,983 | |
†Brookfield Asset Management Cl. A | |
| 7,378 | | |
| 280,733 | |
Donnelley Financial Solutions 1,2,3 | |
| 35,500 | | |
| 2,116,510 | |
Evercore Cl. A | |
| 26,511 | | |
| 5,525,688 | |
GCM Grosvenor Cl. A | |
| 801,494 | | |
| 7,822,581 | |
Houlihan Lokey Cl. A 1 | |
| 38,585 | | |
| 5,203,573 | |
Lazard 1 | |
| 127,853 | | |
| 4,881,428 | |
†Marex
Group 2 | |
| 223,441 | | |
| 4,468,820 | |
MarketWise Cl. A | |
| 500,000 | | |
| 580,000 | |
Morningstar 1 | |
| 15,956 | | |
| 4,720,583 | |
Onex Corporation | |
| 168,900 | | |
| 11,484,286 | |
†Perella Weinberg Partners Cl. A | |
| 64,991 | | |
| 1,056,104 | |
SEI Investments 1 | |
| 324,994 | | |
| 21,023,862 | |
Sprott | |
| 230,880 | | |
| 9,574,082 | |
Tel Aviv Stock Exchange 4 | |
| 221,179 | | |
| 1,582,170 | |
TMX Group | |
| 478,421 | | |
| 13,316,963 | |
Tradeweb Markets Cl. A | |
| 58,557 | | |
| 6,207,042 | |
Virtu Financial Cl. A | |
| 65,000 | | |
| 1,459,250 | |
| |
| | | |
| 120,934,133 | |
CONSUMER FINANCE - 0.9% | |
| | | |
| | |
Bread Financial Holdings 1 | |
| 117,748 | | |
| 5,246,851 | |
Encore Capital Group 1,2,3 | |
| 25,000 | | |
| 1,043,250 | |
Enova International 2 | |
| 71,708 | | |
| 4,463,823 | |
†FirstCash Holdings | |
| 29,276 | | |
| 3,070,467 | |
PRA Group 2 | |
| 104,469 | | |
| 2,053,861 | |
PROG Holdings | |
| 46,058 | | |
| 1,597,291 | |
| |
| | | |
| 17,475,543 | |
FINANCIAL SERVICES - 1.8% | |
| | | |
| | |
Banco Latinoamericano de Comercio | |
| | | |
| | |
Exterior Cl. E | |
| 73,446 | | |
| 2,179,143 | |
Burford Capital | |
| 175,000 | | |
| 2,283,750 | |
Compass Diversified Holdings 1 | |
| 99,872 | | |
| 2,186,198 | |
ECN Capital | |
| 888,800 | | |
| 1,084,972 | |
EVERTEC | |
| 19,483 | | |
| 647,810 | |
†Jackson Financial | |
| 9,318 | | |
| 691,955 | |
NewtekOne | |
| 336,358 | | |
| 4,228,020 | |
NMI Holdings 2 | |
| 133,684 | | |
| 4,550,603 | |
†Payoneer
Global 2 | |
| 132,693 | | |
| 735,119 | |
Radian Group | |
| 85,363 | | |
| 2,654,789 | |
Repay Holdings Cl. A 2 | |
| 710,161 | | |
| 7,499,300 | |
Shift4 Payments Cl. A 2 | |
| 50,000 | | |
| 3,667,500 | |
Waterloo Investment Holdings 2,5 | |
| 2,972,000 | | |
| 832,160 | |
WEX 2 | |
| 10,370 | | |
| 1,836,942 | |
| |
| | | |
| 35,078,261 | |
INSURANCE - 5.7% | |
| | | |
| | |
Ambac Financial Group 2 | |
| 36,919 | | |
| 473,302 | |
THE ACCOMPANYING
NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
2024
Semiannual Report to Stockholders | 41 |
Royce
Small-Cap Trust
Schedule of Investments
(continued) | |
| | |
| |
| |
| | |
| |
| |
SHARES | | |
VALUE | |
| |
| | | |
| | |
FINANCIALS (continued) | |
| | | |
| | |
INSURANCE (continued) | |
| | | |
| | |
Assured Guaranty | |
| 300,336 | | |
$ | 23,170,922 | |
Axis Capital Holdings | |
| 48,839 | | |
| 3,450,475 | |
Berkley (W.R.) | |
| 83,903 | | |
| 6,593,098 | |
E-L Financial | |
| 21,650 | | |
| 17,491,073 | |
Employers Holdings | |
| 27,587 | | |
| 1,176,034 | |
Erie Indemnity Cl. A | |
| 22,600 | | |
| 8,190,240 | |
First American Financial | |
| 20,000 | | |
| 1,079,000 | |
Genworth Financial 2 | |
| 335,467 | | |
| 2,026,221 | |
Hagerty Cl. A 2 | |
| 485,700 | | |
| 5,051,280 | |
International General Insurance Holdings | |
| 568,316 | | |
| 7,956,424 | |
ProAssurance Corporation 1,2,3 | |
| 298,675 | | |
| 3,649,808 | |
RenaissanceRe Holdings | |
| 31,299 | | |
| 6,995,639 | |
RLI Corp. 1 | |
| 35,507 | | |
| 4,995,480 | |
Safety Insurance Group | |
| 40,945 | | |
| 3,072,103 | |
SiriusPoint 2 | |
| 80,318 | | |
| 979,880 | |
White Mountains Insurance Group | |
| 7,155 | | |
| 13,003,855 | |
| |
| | | |
| 109,354,834 | |
Total (Cost $295,261,316) | |
| | | |
| 358,212,793 | |
| |
| | | |
| | |
HEALTH CARE – 10.7% | |
| | | |
| | |
BIOTECHNOLOGY - 1.4% | |
| | | |
| | |
†Alkermes
2 | |
| 30,272 | | |
| 729,555 | |
†ARS
Pharmaceuticals 2 | |
| 79,000 | | |
| 672,290 | |
Avid Bioservices 2 | |
| 263,000 | | |
| 1,877,820 | |
Catalyst Pharmaceuticals 2 | |
| 498,211 | | |
| 7,717,288 | |
Dynavax Technologies 2 | |
| 121,016 | | |
| 1,359,010 | |
Halozyme Therapeutics 2 | |
| 38,691 | | |
| 2,025,861 | |
†Insmed
2 | |
| 50,735 | | |
| 3,399,245 | |
Ironwood Pharmaceuticals Cl. A 2 | |
| 585,889 | | |
| 3,819,996 | |
PureTech Health 2,4 | |
| 120,000 | | |
| 277,755 | |
United Therapeutics 2 | |
| 10,000 | | |
| 3,185,500 | |
Vir Biotechnology 2 | |
| 102,900 | | |
| 915,810 | |
| |
| | | |
| 25,980,130 | |
HEALTH CARE EQUIPMENT & SUPPLIES - 4.5% | |
| | | |
| | |
Alphatec Holdings 2 | |
| 479,297 | | |
| 5,008,654 | |
Embecta Corp. | |
| 70,008 | | |
| 875,100 | |
Enovis Corporation 2 | |
| 522,768 | | |
| 23,629,114 | |
†Envista
Holdings 2 | |
| 76,374 | | |
| 1,270,100 | |
Haemonetics Corporation 2 | |
| 256,873 | | |
| 21,251,103 | |
Insulet Corporation 2 | |
| 9,512 | | |
| 1,919,522 | |
Integer Holdings 1,2,3 | |
| 45,700 | | |
| 5,291,603 | |
OraSure Technologies 2 | |
| 99,036 | | |
| 421,893 | |
†RxSight
2 | |
| 47,762 | | |
| 2,873,839 | |
TransMedics Group 2 | |
| 150,000 | | |
| 22,593,000 | |
UFP Technologies 2 | |
| 2,176 | | |
| 574,181 | |
Varex Imaging 2 | |
| 37,500 | | |
| 552,375 | |
| |
| | | |
| 86,260,484 | |
HEALTH CARE PROVIDERS & SERVICES - 1.4% | |
| | | |
| | |
Addus HomeCare 1,2 | |
| 7,675 | | |
| 891,144 | |
AMN Healthcare Services 1,2 | |
| 24,240 | | |
| 1,241,815 | |
†Astrana
Health 2 | |
| 11,940 | | |
| 484,287 | |
CorVel Corporation 2 | |
| 960 | | |
| 244,099 | |
Cross Country Healthcare 2 | |
| 127,100 | | |
| 1,759,064 | |
Hims & Hers Health Cl. A 2 | |
| 9,500 | | |
| 191,805 | |
Owens & Minor 2 | |
| 21,874 | | |
| 295,299 | |
Pediatrix Medical Group 2 | |
| 152,346 | | |
| 1,150,212 | |
Premier Cl. A | |
| 38,432 | | |
| 717,526 | |
Privia Health Group 2 | |
| 292,400 | | |
| 5,081,912 | |
Select Medical Holdings | |
| 95,900 | | |
| 3,362,254 | |
†Surgery
Partners 2 | |
| 243,039 | | |
| 5,781,898 | |
U.S. Physical Therapy | |
| 62,300 | | |
| 5,757,766 | |
| |
| | | |
| 26,959,081 | |
HEALTH CARE TECHNOLOGY - 0.3% | |
| | | |
| | |
Simulations Plus 1 | |
| 64,377 | | |
| 3,130,009 | |
Veradigm 2,5 | |
| 256,379 | | |
| 2,309,975 | |
| |
| | | |
| 5,439,984 | |
LIFE SCIENCES TOOLS & SERVICES - 2.1% | |
| | | |
| | |
Azenta 1,2,3 | |
| 261,896 | | |
| 13,780,968 | |
BioLife Solutions 2 | |
| 177,621 | | |
| 3,806,418 | |
Bio-Techne 1 | |
| 132,922 | | |
| 9,523,861 | |
Maravai LifeSciences Holdings Cl. A 2 | |
| 202,453 | | |
| 1,449,563 | |
Mesa Laboratories 1 | |
| 121,115 | | |
| 10,509,149 | |
Stevanato Group | |
| 115,524 | | |
| 2,118,710 | |
| |
| | | |
| 41,188,669 | |
PHARMACEUTICALS - 1.0% | |
| | | |
| | |
Amphastar Pharmaceuticals 2 | |
| 6,630 | | |
| 265,200 | |
Collegium Pharmaceutical 2 | |
| 41,984 | | |
| 1,351,885 | |
Corcept Therapeutics 2 | |
| 267,800 | | |
| 8,700,822 | |
Harmony Biosciences Holdings 1,2,3 | |
| 86,483 | | |
| 2,609,192 | |
Innoviva 2 | |
| 36,213 | | |
| 593,893 | |
Intra-Cellular Therapies 2 | |
| 10,000 | | |
| 684,900 | |
Ligand Pharmaceuticals 2 | |
| 9,655 | | |
| 813,530 | |
Prestige Consumer Healthcare 2 | |
| 56,300 | | |
| 3,876,255 | |
| |
| | | |
| 18,895,677 | |
Total (Cost $197,276,005) | |
| | | |
| 204,724,025 | |
| |
| | | |
| | |
INDUSTRIALS – 24.3% | |
| | | |
| | |
AEROSPACE & DEFENSE - 1.6% | |
| | | |
| | |
HEICO Corporation 1 | |
| 31,030 | | |
| 6,938,618 | |
HEICO Corporation Cl. A 1 | |
| 36,533 | | |
| 6,485,338 | |
Leonardo DRS 2 | |
| 411,943 | | |
| 10,508,666 | |
Magellan Aerospace | |
| 943,092 | | |
| 5,611,468 | |
National Presto Industries | |
| 9,977 | | |
| 749,572 | |
| |
| | | |
| 30,293,662 | |
AIR FREIGHT & LOGISTICS - 0.2% | |
| | | |
| | |
Forward Air 1,2 | |
| 84,684 | | |
| 1,612,383 | |
Hub Group Cl. A | |
| 45,929 | | |
| 1,977,244 | |
| |
| | | |
| 3,589,627 | |
BUILDING PRODUCTS - 1.7% | |
| | | |
| | |
American Woodmark 2 | |
| 17,931 | | |
| 1,409,376 | |
Apogee Enterprises | |
| 13,608 | | |
| 855,059 | |
AZZ 1 | |
| 20,000 | | |
| 1,545,000 | |
Carlisle Companies | |
| 11,600 | | |
| 4,700,436 | |
CSW Industrials | |
| 45,000 | | |
| 11,938,950 | |
Gibraltar Industries 2 | |
| 17,487 | | |
| 1,198,734 | |
Insteel Industries | |
| 13,432 | | |
| 415,855 | |
Janus International Group 2 | |
| 219,203 | | |
| 2,768,534 | |
†MasterBrand 2 | |
| 32,600 | | |
| 478,568 | |
Resideo Technologies 2 | |
| 20,988 | | |
| 410,525 | |
Simpson Manufacturing 1 | |
| 19,200 | | |
| 3,235,776 | |
UFP Industries | |
| 36,841 | | |
| 4,126,192 | |
| |
| | | |
| 33,083,005 | |
COMMERCIAL SERVICES & SUPPLIES - 1.9% | |
| | | |
| | |
ACV Auctions Cl. A 2 | |
| 128,800 | | |
| 2,350,600 | |
Brady Corporation Cl. A 1 | |
| 259,866 | | |
| 17,156,353 | |
CompX International Cl. A 1 | |
| 183,197 | | |
| 4,519,470 | |
42 | 2024 Semiannual Report
to Stockholders |
THE ACCOMPANYING
NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
June
30, 2024 (unaudited)
Schedule
of Investments (continued) | |
| | |
| |
| |
| | |
| |
| |
SHARES | | |
VALUE | |
| |
| | | |
| | |
INDUSTRIALS (continued) | |
| | | |
| | |
COMMERCIAL SERVICES & SUPPLIES (continued) | |
| | | |
| | |
Healthcare Services Group 2 | |
| 335,089 | | |
$ | 3,545,242 | |
Montrose Environmental Group 2 | |
| 64,840 | | |
| 2,889,271 | |
RB Global 1 | |
| 55,437 | | |
| 4,233,169 | |
†Vestis Corporation | |
| 98,001 | | |
| 1,198,552 | |
VSE Corporation | |
| 11,500 | | |
| 1,015,220 | |
| |
| | | |
| 36,907,877 | |
CONSTRUCTION & ENGINEERING - 4.8% | |
| | | |
| | |
APi Group 1,2,3 | |
| 492,120 | | |
| 18,518,476 | |
Arcosa 1 | |
| 202,841 | | |
| 16,918,968 | |
†Badger Infrastructure Solutions | |
| 25,000 | | |
| 752,714 | |
†Bowman
Consulting Group 2 | |
| 26,705 | | |
| 848,952 | |
Comfort Systems USA 1 | |
| 14,516 | | |
| 4,414,606 | |
EMCOR Group | |
| 12,958 | | |
| 4,730,707 | |
IES Holdings 1,2,3 | |
| 168,638 | | |
| 23,496,332 | |
MasTec 2 | |
| 78,980 | | |
| 8,450,070 | |
Valmont Industries 1 | |
| 31,492 | | |
| 8,642,979 | |
WillScot Mobile Mini Holdings Corp. 2 | |
| 127,012 | | |
| 4,780,732 | |
| |
| | | |
| 91,554,536 | |
ELECTRICAL EQUIPMENT - 2.0% | |
| | | |
| | |
Atkore | |
| 38,245 | | |
| 5,160,398 | |
Encore Wire | |
| 15,651 | | |
| 4,536,129 | |
LSI Industries | |
| 496,657 | | |
| 7,186,627 | |
nVent Electric | |
| 53,554 | | |
| 4,102,772 | |
Powell Industries | |
| 63,521 | | |
| 9,108,911 | |
Preformed Line Products | |
| 32,816 | | |
| 4,086,905 | |
Vertiv Holdings Cl. A | |
| 53,506 | | |
| 4,632,014 | |
| |
| | | |
| 38,813,756 | |
GROUND TRANSPORTATION - 0.2% | |
| | | |
| | |
ArcBest Corporation | |
| 2,153 | | |
| 230,543 | |
Landstar System 1 | |
| 22,092 | | |
| 4,075,532 | |
| |
| | | |
| 4,306,075 | |
MACHINERY - 5.1% | |
| | | |
| | |
Atmus Filtration Technologies 2 | |
| 237,321 | | |
| 6,830,098 | |
Chart Industries 2 | |
| 9,083 | | |
| 1,311,040 | |
Enpro | |
| 41,016 | | |
| 5,970,699 | |
ESAB Corporation 1 | |
| 133,941 | | |
| 12,648,049 | |
ESCO Technologies 1 | |
| 95,306 | | |
| 10,010,942 | |
Helios Technologies 1 | |
| 44,900 | | |
| 2,143,975 | |
John Bean Technologies 1 | |
| 155,958 | | |
| 14,811,331 | |
Kadant 1 | |
| 34,746 | | |
| 10,207,680 | |
Lincoln Electric Holdings 1 | |
| 5,225 | | |
| 985,644 | |
Lindsay Corporation 1 | |
| 63,313 | | |
| 7,779,902 | |
Miller Industries | |
| 59,406 | | |
| 3,268,518 | |
Mueller Industries 1 | |
| 39,513 | | |
| 2,249,870 | |
RBC Bearings 2 | |
| 5,200 | | |
| 1,402,856 | |
Standex International | |
| 2,692 | | |
| 433,816 | |
Tennant Company 1 | |
| 80,500 | | |
| 7,924,420 | |
Titan International 2 | |
| 114,640 | | |
| 849,483 | |
Wabash National | |
| 40,645 | | |
| 887,687 | |
Watts Water Technologies Cl. A 1 | |
| 46,400 | | |
| 8,508,368 | |
| |
| | | |
| 98,224,378 | |
MARINE TRANSPORTATION - 0.5% | |
| | | |
| | |
Kirby Corporation 2 | |
| 67,260 | | |
| 8,053,040 | |
Matson | |
| 8,586 | | |
| 1,124,508 | |
| |
| | | |
| 9,177,548 | |
PASSENGER AIRLINES - 0.1% | |
| | | |
| | |
†SkyWest
2 | |
| 5,090 | | |
| 417,736 | |
Sun Country Airlines Holdings2 | |
| 88,126 | | |
| 1,106,863 | |
| |
| | | |
| 1,524,599 | |
PROFESSIONAL SERVICES - 2.3% | |
| | | |
| | |
CBIZ 1,2 | |
| 104,465 | | |
| 7,740,856 | |
CSG Systems International | |
| 7,045 | | |
| 290,043 | |
Dun & Bradstreet Holdings | |
| 388,765 | | |
| 3,599,964 | |
Exponent | |
| 22,706 | | |
| 2,159,795 | |
Forrester Research 1,2,3 | |
| 359,802 | | |
| 6,145,418 | |
Heidrick & Struggles International | |
| 6,241 | | |
| 197,091 | |
Jacobs Solutions 1 | |
| 22,500 | | |
| 3,143,475 | |
KBR 1 | |
| 139,154 | | |
| 8,925,338 | |
Korn Ferry 1 | |
| 124,759 | | |
| 8,376,319 | |
Paylocity Holding 2 | |
| 3,000 | | |
| 395,550 | |
Resources Connection | |
| 103,159 | | |
| 1,138,875 | |
†Verra
Mobility Cl. A 2 | |
| 29,397 | | |
| 799,598 | |
| |
| | | |
| 42,912,322 | |
TRADING COMPANIES & DISTRIBUTORS - 3.9% | |
| | | |
| | |
Air Lease Cl. A 1 | |
| 450,403 | | |
| 21,407,655 | |
Applied Industrial Technologies | |
| 30,658 | | |
| 5,947,652 | |
Boise Cascade 1 | |
| 18,665 | | |
| 2,225,241 | |
Distribution Solutions Group 2 | |
| 96,456 | | |
| 2,893,680 | |
FTAI Aviation | |
| 134,581 | | |
| 13,892,797 | |
GMS 2 | |
| 6,826 | | |
| 550,244 | |
Hudson Technologies 2 | |
| 122,137 | | |
| 1,073,584 | |
MSC Industrial Direct Cl. A | |
| 26,306 | | |
| 2,086,329 | |
SiteOne Landscape Supply 2 | |
| 666 | | |
| 80,859 | |
†Teqnion
2,4 | |
| 191,300 | | |
| 3,635,589 | |
Transcat 2 | |
| 130,431 | | |
| 15,609,982 | |
†WESCO International | |
| 25,492 | | |
| 4,040,992 | |
| |
| | | |
| 73,444,604 | |
Total (Cost $286,132,743) | |
| | | |
| 463,831,989 | |
| |
| | | |
| | |
INFORMATION TECHNOLOGY – 18.7% | |
| | | |
| | |
COMMUNICATIONS EQUIPMENT - 0.3% | |
| | | |
| | |
Calix 2 | |
| 2,544 | | |
| 90,134 | |
Digi International 2 | |
| 38,250 | | |
| 877,072 | |
Extreme Networks 2 | |
| 85,589 | | |
| 1,151,172 | |
Harmonic 2 | |
| 275,132 | | |
| 3,238,304 | |
NetScout Systems 2 | |
| 82,752 | | |
| 1,513,534 | |
| |
| | | |
| 6,870,216 | |
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 8.0% | |
| | | |
| | |
Bel Fuse Cl. B | |
| 34,676 | | |
| 2,262,262 | |
Benchmark Electronics | |
| 9,912 | | |
| 391,128 | |
Cognex Corporation 1 | |
| 344,453 | | |
| 16,106,622 | |
Coherent Corp. 1,2 | |
| 117,304 | | |
| 8,499,848 | |
Crane NXT | |
| 143,109 | | |
| 8,789,755 | |
CTS Corporation | |
| 20,837 | | |
| 1,054,977 | |
ePlus 2 | |
| 9,933 | | |
| 731,863 | |
Fabrinet 1,2,3 | |
| 58,195 | | |
| 14,245,554 | |
FARO Technologies 1,2,3 | |
| 228,848 | | |
| 3,661,568 | |
Insight Enterprises 2 | |
| 12,564 | | |
| 2,492,195 | |
IPG Photonics 2 | |
| 51,100 | | |
| 4,312,329 | |
Kimball Electronics 1,2 | |
| 109,972 | | |
| 2,417,185 | |
Littelfuse 1 | |
| 32,350 | | |
| 8,268,336 | |
Luna Innovations 2 | |
| 657,869 | | |
| 2,105,181 | |
Methode Electronics | |
| 8,005 | | |
| 82,852 | |
Mirion Technologies Cl. A 2 | |
| 266,000 | | |
| 2,856,840 | |
NAPCO Security Technologies | |
| 181,430 | | |
| 9,425,288 | |
THE ACCOMPANYING NOTES ARE
AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
2024 Semiannual
Report to Stockholders | 43 |
Royce
Small-Cap Trust
Schedule of Investments (continued) | |
| | |
| |
| |
| | |
| |
| |
SHARES | | |
VALUE | |
| |
| | |
| |
INFORMATION TECHNOLOGY (continued) | |
| | |
| |
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (continued) | |
| | | |
| | |
PAR Technology 1,2,3 | |
| 379,239 | | |
$ | 17,858,365 | |
PC Connection | |
| 27,247 | | |
| 1,749,257 | |
Richardson Electronics | |
| 433,407 | | |
| 5,153,209 | |
Rogers Corporation 2 | |
| 120,795 | | |
| 14,569,085 | |
Sanmina Corporation 2 | |
| 42,121 | | |
| 2,790,516 | |
ScanSource 2 | |
| 7,729 | | |
| 342,472 | |
Teledyne Technologies 2 | |
| 9,660 | | |
| 3,747,887 | |
†Trimble
2 | |
| 16,200 | | |
| 905,904 | |
TTM Technologies 1,2 | |
| 341,192 | | |
| 6,629,361 | |
Vishay Intertechnology | |
| 40,000 | | |
| 892,000 | |
Vishay Precision Group 2 | |
| 102,468 | | |
| 3,119,126 | |
Vontier Corporation | |
| 172,365 | | |
| 6,584,343 | |
| |
| | | |
| 152,045,308 | |
IT SERVICES - 0.9% | |
| | | |
| | |
†DXC
Technology Company 2 | |
| 30,288 | | |
| 578,198 | |
Hackett Group (The) 1 | |
| 405,798 | | |
| 8,813,933 | |
Kyndryl Holdings 2 | |
| 274,824 | | |
| 7,230,619 | |
| |
| | | |
| 16,622,750 | |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 7.1% | |
| | | |
| | |
†Allegro
MicroSystems 2 | |
| 55,660 | | |
| 1,571,838 | |
Axcelis Technologies 2 | |
| 39,785 | | |
| 5,657,029 | |
Camtek | |
| 46,264 | | |
| 5,794,103 | |
Cirrus Logic 1,2 | |
| 79,268 | | |
| 10,119,353 | |
Cohu 1,2,3 | |
| 86,376 | | |
| 2,859,046 | |
Diodes 1,2,3 | |
| 87,960 | | |
| 6,326,963 | |
FormFactor 2 | |
| 194,866 | | |
| 11,795,239 | |
Impinj 1,2,3 | |
| 158,364 | | |
| 24,826,724 | |
Kulicke & Soffa Industries 1 | |
| 90,658 | | |
| 4,459,467 | |
MaxLinear 2 | |
| 120,734 | | |
| 2,431,583 | |
MKS Instruments | |
| 97,381 | | |
| 12,716,011 | |
Onto Innovation 1,2,3 | |
| 63,673 | | |
| 13,980,044 | |
Photronics 2 | |
| 239,629 | | |
| 5,911,647 | |
Rambus 2 | |
| 105,318 | | |
| 6,188,486 | |
Semtech Corporation 2 | |
| 13,500 | | |
| 403,380 | |
Silicon Motion Technology ADR | |
| 76,251 | | |
| 6,175,569 | |
SiTime Corporation 2 | |
| 36,900 | | |
| 4,589,622 | |
SMART Global Holdings 2 | |
| 13,670 | | |
| 312,633 | |
Synaptics 2 | |
| 19,051 | | |
| 1,680,298 | |
Ultra Clean Holdings 2 | |
| 149,471 | | |
| 7,324,079 | |
| |
| | | |
| 135,123,114 | |
SOFTWARE - 2.4% | |
| | | |
| | |
Adeia 1 | |
| 83,681 | | |
| 935,972 | |
Agilysys 1,2 | |
| 69,787 | | |
| 7,267,618 | |
Alkami Technology 1,2,3 | |
| 119,488 | | |
| 3,403,018 | |
Consensus Cloud Solutions 1,2,3 | |
| 77,729 | | |
| 1,335,384 | |
†Coveo
Solutions 2 | |
| 127,000 | | |
| 723,168 | |
†CyberArk
Software 2 | |
| 2,500 | | |
| 683,550 | |
Descartes Systems Group (The) 2 | |
| 10,000 | | |
| 968,400 | |
†Five9
2 | |
| 57,425 | | |
| 2,532,443 | |
†Intapp
2 | |
| 64,666 | | |
| 2,371,302 | |
InterDigital 1 | |
| 12,307 | | |
| 1,434,504 | |
JFrog 2 | |
| 226,500 | | |
| 8,505,075 | |
NCR Voyix 2 | |
| 34,618 | | |
| 427,532 | |
†NextNav
2 | |
| 69,000 | | |
| 559,590 | |
Progress Software | |
| 62,873 | | |
| 3,411,489 | |
PROS Holdings 2 | |
| 126,222 | | |
| 3,616,260 | |
Q2 Holdings 2 | |
| 4,385 | | |
| 264,547 | |
Sapiens International | |
| 118,679 | | |
| 4,026,779 | |
Teradata Corporation 2 | |
| 94,646 | | |
| 3,270,966 | |
| |
| | | |
| 45,737,597 | |
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.0% | |
| | | |
| | |
†Xerox Holdings | |
| 36,854 | | |
| 428,244 | |
Total
(Cost $265,011,796) | |
| | | |
| 356,827,229 | |
| |
| | | |
| | |
MATERIALS – 7.6% | |
| | | |
| | |
CHEMICALS - 3.6% | |
| | | |
| | |
AdvanSix 1 | |
| 25,292 | | |
| 579,693 | |
Aspen Aerogels 2 | |
| 118,727 | | |
| 2,831,639 | |
†Bioceres
Crop Solutions 2 | |
| 26,647 | | |
| 298,713 | |
Element Solutions 1 | |
| 563,910 | | |
| 15,293,239 | |
Hawkins 1 | |
| 112,517 | | |
| 10,239,047 | |
Ingevity Corporation 2 | |
| 166,802 | | |
| 7,290,916 | |
Innospec 1 | |
| 104,726 | | |
| 12,943,086 | |
NewMarket Corporation | |
| 8,000 | | |
| 4,124,560 | |
Quaker Houghton | |
| 84,747 | | |
| 14,381,566 | |
| |
| | | |
| 67,982,459 | |
CONTAINERS & PACKAGING - 0.1% | |
| | | |
| | |
Silgan Holdings | |
| 52,391 | | |
| 2,217,711 | |
METALS & MINING - 3.3% | |
| | | |
| | |
Alamos Gold Cl. A | |
| 1,976,000 | | |
| 30,996,645 | |
†Arch Resources | |
| 3,331 | | |
| 507,078 | |
Gold Fields ADR | |
| 536,500 | | |
| 7,993,850 | |
Haynes International 1 | |
| 102,500 | | |
| 6,016,750 | |
IAMGOLD Corporation 2 | |
| 500,000 | | |
| 1,875,000 | |
Major Drilling Group International 2 | |
| 1,496,691 | | |
| 9,933,814 | |
Materion Corporation | |
| 25,000 | | |
| 2,703,250 | |
Olympic Steel | |
| 25,187 | | |
| 1,129,133 | |
Reliance 1 | |
| 4,701 | | |
| 1,342,606 | |
Warrior Met Coal | |
| 13,716 | | |
| 860,953 | |
| |
| | | |
| 63,359,079 | |
PAPER & FOREST PRODUCTS - 0.6% | |
| | | |
| | |
Clearwater Paper 2 | |
| 6,753 | | |
| 327,318 | |
Louisiana-Pacific | |
| 51,710 | | |
| 4,257,284 | |
Stella-Jones | |
| 64,375 | | |
| 4,200,692 | |
Sylvamo Corporation 1 | |
| 37,829 | | |
| 2,595,069 | |
| |
| | | |
| 11,380,363 | |
Total
(Cost $78,562,703) | |
| | | |
| 144,939,612 | |
| |
| | | |
| | |
REAL ESTATE – 3.1% | |
| | | |
| | |
DIVERSIFIED REITS - 0.0% | |
| | | |
| | |
New York REIT 2,5 | |
| 15,000 | | |
| 163,200 | |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.1% | |
| | | |
| | |
Colliers International Group | |
| 66,011 | | |
| 7,370,128 | |
DigitalBridge Group Cl. A | |
| 44,900 | | |
| 615,130 | |
FirstService Corporation | |
| 106,829 | | |
| 16,277,535 | |
FRP Holdings 1,2 | |
| 108,661 | | |
| 3,099,011 | |
Kennedy-Wilson Holdings 1 | |
| 1,208,258 | | |
| 11,744,268 | |
Marcus & Millichap 1 | |
| 320,775 | | |
| 10,110,828 | |
St. Joe Company (The) 1 | |
| 78,800 | | |
| 4,310,360 | |
Tejon Ranch 1,2,3 | |
| 313,818 | | |
| 5,353,735 | |
| |
| | | |
| 58,880,995 | |
Total
(Cost $49,882,708) | |
| | | |
| 59,044,195 | |
| |
| | | |
| | |
UTILITIES – 0.1% | |
| | | |
| | |
ELECTRIC UTILITIES - 0.1% | |
| | | |
| | |
†MGE Energy | |
| 4,569 | | |
| 341,396 | |
44 | 2024 Semiannual Report
to Stockholders |
THE ACCOMPANYING NOTES ARE
AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
June
30, 2024 (unaudited)
Schedule of Investments (continued) | |
| | |
| |
| |
| | |
| |
| |
SHARES | | |
VALUE | |
| |
| | | |
| | |
UTILITIES (continued) | |
| | | |
| | |
ELECTRIC UTILITIES (continued) | |
| | | |
| | |
Otter Tail | |
| 23,106 | | |
$ | 2,023,854 | |
| |
| | | |
| 2,365,250 | |
GAS UTILITIES - 0.0% | |
| | | |
| | |
Chesapeake Utilities | |
| 4,708 | | |
| 499,990 | |
Total (Cost $2,645,105) | |
| | | |
| 2,865,240 | |
| |
| | | |
| | |
TOTAL COMMON STOCKS | |
| | | |
| | |
(Cost $1,434,690,649) | |
| | | |
| 1,890,753,360 | |
| |
| | | |
| | |
INVESTMENT COMPANIES – 1.1% | |
| | | |
| | |
DIVERSIFIED INVESTMENT COMPANIES – 0.0% | |
| | | |
| | |
CLOSED-END FUNDS - 0.0% | |
| | | |
| | |
Eagle Point Credit | |
| 54 | | |
| 543 | |
Total (Cost $669) | |
| | | |
| 543 | |
| |
| | | |
| | |
MATERIALS – 1.1% | |
| | | |
| | |
METALS & MINING - 1.1% | |
| | | |
| | |
VanEck Junior Gold Miners ETF | |
| 469,426 | | |
| 19,772,223 | |
Total (Cost $16,747,857) | |
| | | |
| 19,772,223 | |
| |
| | | |
| | |
TOTAL INVESTMENT COMPANIES | |
| | | |
| | |
(Cost $16,748,526) | |
| | | |
| 19,772,766 | |
| |
| | | |
| | |
REPURCHASE AGREEMENT – 1.7% | |
| | | |
| | |
Fixed Income Clearing Corporation, 4.75% dated 6/28/24, due 7/1/24, maturity value
$32,777,320 (collateralized by obligations of U.S. Government Agencies, 3.625%
due 5/15/26, valued at $33,419,658) | |
(Cost $32,764,351) | |
| | | |
| 32,764,351 | |
| |
| | | |
| | |
TOTAL INVESTMENTS – 101.9 % | |
| | | |
| | |
(Cost $1,484,203,526) | |
| | | |
| 1,943,290,477 | |
| |
| | | |
| | |
LIABILITIES LESS CASH AND OTHER ASSETS –
(1.9)% | |
| | | |
| (35,439,755 | ) |
| |
| | | |
| | |
NET ASSETS 100.0% | |
| | | |
$ | 1,907,850,722 | |
ADR
– American Depository Receipt
| 1 | All
or a portion of these securities were pledged as collateral in connection with the Fund's revolving credit agreement as of June
30, 2024. Total market value of pledged securities as of June 30, 2024, was $74,593,360. |
| 3 | As
of June 30, 2024, a portion of these securities, in the aggregate amount of $32,182,602, were rehypothecated by BNP Paribas Prime
Brokerage International, Limited in connection with the Fund's revolving credit agreement. See Notes to Financial Statements. |
| 4 | These
securities are defined as Level 2 securities due to fair value being based on quoted prices for similar securities and/or due
to the application of fair value factors. See Notes to Financial Statements. |
| 5 | Securities
for which market quotations are not readily available represent 0.2% of net assets. These securities have been valued at their
fair value under procedures approved by the Fund's Board of Directors. These securities are defined as Level 3 securities due
to the use of significant unobservable inputs in the determination of fair value. See Notes to Financial Statements. |
Bold
indicates the Fund’s 20 largest equity holdings in terms of June 30, 2024, market value.
TAX
INFORMATION: The cost of total investments for Federal income tax purposes was $1,488,527,045. As of June 30, 2024, net unrealized
appreciation for all securities was $454,763,432 consisting of aggregate gross unrealized appreciation of $586,337,627 and aggregate
gross unrealized depreciation of $131,574,195. The primary cause of the difference between book and tax basis cost is the timing
of the recognition of losses on securities sold.
THE ACCOMPANYING NOTES ARE
AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
2024 Semiannual
Report to Stockholders | 45 |
Royce
Small-Cap Trust
|
June
30, 2024 (unaudited)
|
Statement
of Assets and Liabilities
ASSETS: | |
| |
Investments
at value | |
$ | 1,910,526,126 | |
Repurchase
agreements (at cost and value) | |
| 32,764,351 | |
Foreign
currency (cost $83,574) | |
| 83,660 | |
Receivable
for investments sold | |
| 5,763,163 | |
Receivable
for dividends and interest | |
| 664,170 | |
Prepaid
expenses and other assets | |
| 503,336 | |
Total
Assets | |
| 1,950,304,806 | |
LIABILITIES: | |
| | |
Revolving
credit agreement | |
| 35,000,000 | |
Payable
to custodian for cash overdrawn | |
| 39,568 | |
Payable
for investments purchased | |
| 5,054,991 | |
Payable
for investment advisory fee | |
| 1,978,548 | |
Payable
for directors’ fees | |
| 41,461 | |
Payable
for interest expense | |
| 190,167 | |
Accrued
expenses | |
| 149,349 | |
Total
Liabilities | |
| 42,454,084 | |
Net
Assets | |
$ | 1,907,850,722 | |
ANALYSIS
OF NET ASSETS: | |
| | |
Paid-in
capital - $0.001 par value per share; 115,346,169 shares outstanding (150,000,000 shares authorized) | |
$ | 1,436,138,554 | |
Total
distributable earnings (loss) | |
| 534,396,564 | |
Quarterly
distributions | |
| (62,684,396 | ) |
Net
Assets (net asset value per share - $16.54) | |
$ | 1,907,850,722 | |
Investments
at identified cost | |
$ | 1,451,439,175 | |
46
| 2024 Semiannual Report to Stockholders |
THE
ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
|
Royce
Small-Cap Trust
|
Six
Months Ended June 30, 2024 (unaudited) |
Statement
of Operations
INVESTMENT
INCOME: | |
| |
INCOME: | |
| |
Dividends | |
$ | 11,151,206 | |
Foreign
withholding tax | |
| (342,854 | ) |
Interest | |
| 1,051,090 | |
Rehypothecation
income | |
| 176 | |
Total
income | |
| 11,859,618 | |
EXPENSES: | |
| | |
Investment
advisory fees | |
| 10,080,254 | |
Interest
expense | |
| 1,153,415 | |
Administrative
and office facilities | |
| 442,092 | |
Stockholder
reports | |
| 197,397 | |
Custody
and transfer agent fees | |
| 112,434 | |
Directors’
fees | |
| 89,361 | |
Professional
fees | |
| 80,603 | |
Other
expenses | |
| 95,595 | |
Total
expenses | |
| 12,251,151 | |
Net
investment income (loss) | |
| (391,533 | ) |
REALIZED
AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | |
| | |
NET
REALIZED GAIN (LOSS): | |
| | |
Investments | |
| 85,616,928 | |
Foreign
currency transactions | |
| (12,368 | ) |
NET
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | |
| | |
Investments | |
| (4,732,067 | ) |
Other
assets and liabilities denominated in foreign currency | |
| 278 | |
Net
realized and unrealized gain (loss) on investments and foreign currency |
|
|
80,872,771 |
|
NET
INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS |
|
$ |
80,481,238 |
|
THE
ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
2024
Semiannual Report to Stockholders | 47 |
Royce Small-Cap Trust
Statement of Changes in Net Assets
| |
SIX
MONTHS ENDED
6/30/24
(UNAUDITED) | | |
YEAR
ENDED 12/31/23 | |
| |
| | |
| |
INVESTMENT OPERATIONS: | |
| | |
| |
Net
investment income (loss) | |
$ | (391,533 | ) | |
$ | (1,838,039 | ) |
Net
realized gain (loss) on investments and foreign currency | |
| 85,604,560 | | |
| 115,048,691 | |
Net
change in unrealized appreciation (depreciation) on investments and foreign currency | |
| (4,731,789 | ) | |
| 216,427,271 | |
Net
increase (decrease) in net assets from investment operations | |
| 80,481,238 | | |
| 329,637,923 | |
DISTRIBUTIONS: | |
| | | |
| | |
Total
distributable earnings | |
| (62,684,396 | ) | |
| (119,069,508 | ) |
Total
distributions | |
| (62,684,396 | ) | |
| (119,069,508 | ) |
CAPITAL
STOCK TRANSACTIONS: | |
| | | |
| | |
Reinvestment
of distributions | |
| 26,075,480 | | |
| 48,230,613 | |
Total
capital stock transactions | |
| 26,075,480 | | |
| 48,230,613 | |
Net
Increase (Decrease) In Net Assets | |
| 43,872,322 | | |
| 258,799,028 | |
NET
ASSETS: | |
| | | |
| | |
Beginning
of period | |
| 1,863,978,400 | | |
| 1,605,179,372 | |
End
of period | |
$ | 1,907,850,722 | | |
$ | 1,863,978,400 | |
48
| 2024 Semiannual Report to Stockholders |
THE
ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
|
Royce
Small-Cap Trust
|
Six
Months Ended June 30, 2024 (unaudited) |
Statement
of Cash Flows
CASH FLOWS FROM OPERATING
ACTIVITIES: | |
| |
Net
increase (decrease) in net assets from investment operations | |
$ | 80,481,238 | |
Adjustments
to reconcile net increase (decrease) in net assets from investment operations to net cash provided by operating activities: | |
| | |
Purchases
of long-term investments | |
| (402,947,236 | ) |
Proceeds
from sales and maturities of long-term investments | |
| 413,616,453 | |
Net
purchases, sales and maturities of short-term investments | |
| 26,060,327 | |
Net
(increase) decrease in dividends and interest receivable and other assets | |
| 443,112 | |
Net
increase (decrease) in interest expense payable, accrued expenses and other liabilities | |
| (199,116 | ) |
Net
change in unrealized appreciation (depreciation) on investments | |
| 4,732,067 | |
Net
realized gain (loss) on investments | |
| (85,616,928 | ) |
Net
cash provided by operating activities | |
| 36,569,917 | |
CASH
FLOWS FROM FINANCING ACTIVITIES: | |
| | |
Distributions
net of reinvestment (reinvestment $26,075,480) | |
| (36,608,916 | ) |
Increase
in payable to custodian for cash overdrawn and foreign currency | |
| 38,727 | |
Net
cash used for financing activities | |
| (36,570,189 | ) |
INCREASE
(DECREASE) IN CASH: | |
| (272 | ) |
Cash
and foreign currency at beginning of period | |
| 83,932 | |
Cash
and foreign currency at end of period | |
$ | 83,660 | |
Supplemental
disclosure of cash flow information:
For
the six months ended June 30, 2024, the Fund paid $1,159,754 in interest expense.
THE
ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS |
2024
Semiannual Report to Stockholders | 49 |
Royce Small-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 Fund’s performance for the periods presented.
| |
SIX
MONTHS | |
YEARS
ENDED | |
| |
ENDED
6/30/24 | |
| | |
| | |
| | |
| | |
| |
| |
(UNAUDITED) | |
12/31/23 | | |
12/31/22 | | |
12/31/21 | | |
12/31/20 | | |
12/31/19 | |
Net
Asset Value, Beginning of Period | |
$ | 16.42 | | |
$ | 14.60 | | |
$ | 20.29 | | |
$ | 18.52 | | |
$ | 16.58 | | |
$ | 13.73 | |
INVESTMENT OPERATIONS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
investment income (loss) | |
| 0.00 | | |
| (0.01 | ) | |
| 0.06 | | |
| 0.04 | 1 | |
| 0.03 | | |
| 0.11 | |
Net
realized and unrealized gain (loss) on investments and foreign currency | |
| 0.70 | | |
| 2.96 | | |
| (4.40 | ) | |
| 3.46 | | |
| 3.02 | | |
| 3.90 | |
Net
increase (decrease) in net assets from investment operations | |
| 0.70 | | |
| 2.95 | | |
| (4.34 | ) | |
| 3.50 | | |
| 3.05 | | |
| 4.01 | |
DISTRIBUTIONS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
investment income | |
| (0.02 | )2 | |
| – | | |
| (0.12 | ) | |
| (0.02 | ) | |
| (0.09 | ) | |
| (0.11 | ) |
Net
realized gain on investments and foreign currency | |
| (0.53 | )2 | |
| (1.07 | ) | |
| (1.01 | ) | |
| (1.65 | ) | |
| (0.95 | ) | |
| (0.99 | ) |
Return
of capital | |
| –2 | | |
| – | | |
| (0.19 | ) | |
| – | | |
| – | | |
| – | |
Total
distributions | |
| (0.55 | ) | |
| (1.07 | ) | |
| (1.32 | ) | |
| (1.67 | ) | |
| (1.04 | ) | |
| (1.10 | ) |
CAPITAL STOCK TRANSACTIONS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Effect
of reinvestment of distributions by Common Stockholders | |
| (0.03 | ) | |
| (0.06 | ) | |
| (0.03 | ) | |
| (0.06 | ) | |
| (0.07 | ) | |
| (0.06 | ) |
Total
capital stock transactions | |
| (0.03 | ) | |
| (0.06 | ) | |
| (0.03 | ) | |
| (0.06 | ) | |
| (0.07 | ) | |
| (0.06 | ) |
Net
Asset Value, End of Period | |
$ | 16.54 | | |
$ | 16.42 | | |
$ | 14.60 | | |
$ | 20.29 | | |
$ | 18.52 | | |
$ | 16.58 | |
Market
Value, End of Period | |
$ | 14.47 | | |
$ | 14.56 | | |
$ | 13.26 | | |
$ | 19.59 | | |
$ | 16.14 | | |
$ | 14.77 | |
TOTAL RETURN:3 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
Asset Value | |
| 4.67 | %4 | |
| 21.71 | % | |
| (21.29 | )% | |
| 19.97 | % | |
| 21.85 | % | |
| 30.46 | % |
Market
Value | |
| 3.27 | %4 | |
| 18.83 | % | |
| (25.96 | )% | |
| 32.91 | % | |
| 19.20 | % | |
| 35.23 | % |
RATIOS BASED ON AVERAGE
NET ASSETS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Investment
advisory fee expense5 | |
| 1.08 | %6 | |
| 1.17 | % | |
| 0.74 | % | |
| 1.02 | % | |
| 1.15 | % | |
| 0.49 | % |
Other
operating expenses | |
| 0.23 | %6 | |
| 0.24 | % | |
| 0.23 | % | |
| 0.13 | % | |
| 0.19 | % | |
| 0.27 | % |
Total
expenses (net) | |
| 1.31 | %6 | |
| 1.41 | % | |
| 0.97 | % | |
| 1.15 | % | |
| 1.34 | % | |
| 0.76 | % |
Expenses
excluding interest expense | |
| 1.19 | %6 | |
| 1.29 | % | |
| 0.86 | % | |
| 1.11 | % | |
| 1.26 | % | |
| 0.61 | % |
Expenses
prior to balance credits | |
| 1.31 | %6 | |
| 1.41 | % | |
| 0.97 | % | |
| 1.15 | % | |
| 1.34 | % | |
| 0.76 | % |
Net
investment income (loss) | |
| (0.04 | )%6 | |
| (0.11 | )% | |
| 0.39 | % | |
| 0.21 | %1 | |
| 0.16 | % | |
| 0.69 | % |
SUPPLEMENTAL DATA: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
Assets, End of Period (in thousands) | |
$ | 1,907,851 | | |
$ | 1,863,978 | | |
$ | 1,605,179 | | |
$ | 2,149,870 | | |
$ | 1,888,606 | | |
$ | 1,628,039 | |
Portfolio
Turnover Rate | |
| 22 | % | |
| 67 | % | |
| 60 | % | |
| 44 | % | |
| 36 | % | |
| 30 | % |
REVOLVING CREDIT AGREEMENT: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Asset
coverage | |
| 5551 | % | |
| 5426 | % | |
| 4686 | % | |
| 3171 | % | |
| 2798 | % | |
| 2426 | % |
Asset
coverage per $1,000 | |
$ | 55,510 | | |
$ | 54,257 | | |
$ | 46,862 | | |
$ | 31,712 | | |
$ | 27,980 | | |
$ | 24,258 | |
1 | A
special distribution from ECN Capital resulted in an increase in net investment income
(loss) per share of $0.05 and an increase in the ratio of net investment income (loss)
to average net assets of 0.26%. |
2 | Amounts
are subject to change and recharacterization at year end. |
3 | The
Market Value Total Return is calculated assuming a purchase of Common Stock on the opening
of the first business day and a sale on the closing of the last business day of each
period. Dividends and distributions are assumed for the purposes of this calculation
to be reinvested at prices obtained under the Fund’s Distribution Reinvestment and Cash
Purchase Plan. Net Asset Value Total Return is calculated on the same basis, except that
the Fund’s net asset value is used on the purchase, sale and dividend reinvestment dates
instead of market value. |
5 | The
investment advisory fee is calculated based on average net assets over a rolling 60-month
basis, while the above ratios of investment advisory fee expenses are based on the average
net assets over a 6- month basis for the six months ended 6/30/24, and a 12-month basis
for the years shown. |
50
| 2024 Semiannual Report to Stockholders |
THE
ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
|
Royce
Small-Cap Trust
Notes
to Financial Statements (unaudited)
Summary
of Significant Accounting Policies:
Royce
Small-Cap Trust, Inc. (formerly Royce Value Trust, Inc.) (the “Fund”), is a diversified closed-end investment company
that was incorporated under the laws of the State of Maryland on July 1, 1986. The Fund commenced operations on November 26, 1986.
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from those estimates.
The
Fund is an investment company registered under the Investment Company Act of 1940 (the “1940 Act”) and accordingly
follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting
Standard Codification Topic 946 “Financial Services-Investment Companies.”
Royce
& Associates, LP, the Fund’s investment adviser, is a majority-owned subsidiary of Franklin Resources, Inc. and primarily
conducts business using the name Royce Investment Partners (“Royce”).
VALUATION
OF INVESTMENTS:
Portfolio
securities held by the Fund are valued as of the close of trading on the New York Stock Exchange (“NYSE”) (generally
4:00 p.m. Eastern time) on the valuation date. Investments in money market funds are valued at net asset value per share. Values
for non-U.S. dollar denominated equity securities are converted to U.S. dollars daily based upon prevailing foreign currency exchange
rates as quoted by a major bank.
Portfolio
securities that are listed on an exchange or Nasdaq, or traded on OTC Market Group Inc.’s OTC Link ATS or other alternative
trading system, are valued: (i) on the basis of their last reported sales prices or official closing prices, as applicable, on
a valuation date; or (ii) at their highest reported bid prices in the event such equity securities did not trade on a valuation
date. Such inputs are generally referred to as “Level 1” inputs because they represent reliable quoted prices in active
markets for identical securities.
If
the value of a portfolio security held by the Fund cannot be determined solely by reference to Level 1 inputs, such portfolio
security will be “fair valued.” The Fund’s Board of Directors has designated Royce as valuation designee to
perform fair value determinations for such portfolio securities in accordance with Rule 2a-5 under the 1940 Act (“Rule 2a-5").
Pursuant to Rule 2a-5, fair values are determined in accordance with policies and procedures approved by the Fund’s Board of Directors
and policies and procedures adopted by Royce in its capacity as valuation designee for the Fund. Fair valued securities are reported
as either “Level 2” or “Level 3” securities.
As
a general principle, the fair value of a security is the amount which the Fund might reasonably expect to receive for the security
upon its current sale. However, in light of the judgment involved in fair valuations, no assurance can be given that a fair value
assigned to a particular portfolio security will be the amount which the Fund might be able to receive upon its current sale.
When a fair value pricing methodology is used, the fair value prices used by the Fund for such securities will likely differ from
the quoted or published prices for the same securities.
Level
2 inputs are other significant observable inputs (e.g., dealer bid side quotes and quoted prices for securities with comparable
characteristics). Examples of situations in which Level 2 inputs are used to fair value portfolio securities held by the Fund
on a particular valuation date include:
| ● | Over-the-counter
equity securities other than those traded on OTC Market Group Inc.’s OTC Link ATS
or other alternative trading system (collectively referred to herein as “Other
OTC Equity Securities”) are fair valued at their highest bid price when Royce receives
at least two bid side quotes from dealers who make markets in such securities; |
| ● | Certain
bonds and other fixed income securities may be fair valued by reference to other securities
with comparable ratings, interest rates, and maturities in accordance with valuation
methodologies maintained by certain independent pricing services; and |
| ● | The
Fund uses an independent pricing service to fair value certain non-U.S. equity securities
when U.S. market volatility exceeds a certain threshold. This pricing service uses proprietary
correlations it has developed between the movement of prices of non-U.S. equity securities
and indices of U.S.-traded securities, futures contracts, and other indications to estimate
the fair value of such non-U.S. securities. |
Level
3 inputs are significant unobservable inputs. Examples of Level 3 inputs include (without limitation) the last trade price for
a security before trading was suspended or terminated; discounts to last trade price for lack of marketability or otherwise; market
price information regarding other securities; information received from the issuer and/or published documents, including SEC filings
and financial statements; and other publicly available information. Pursuant to the above-referenced policies and procedures,
Royce may use
|
2024
Semiannual Report to Stockholders | 51 |
Royce
Small-Cap Trust
Notes
to Financial Statements (unaudited) (continued)
VALUATION
OF INVESTMENTS (continued):
various
techniques in making fair value determinations based upon Level 3 inputs, which techniques may include (without limitation): (i)
workout valuation methods (e.g., earnings multiples, discounted cash flows, liquidation values, derivations of book value, firm
or probable offers from qualified buyers for the issuer’s ongoing business, etc.); (ii) discount or premium from market,
or compilation of other observable market information, for other similar freely traded securities; (iii) conversion from the readily
available market price of a security into which an affected security is convertible or exchangeable; and (iv) pricing models or
other formulas. In the case of restricted securities, fair value determinations generally start with the inherent or intrinsic
worth of the relevant security, without regard to the restrictive feature, and are reduced for any diminution in value resulting
from the restrictive feature. Due to the inherent uncertainty of such valuations, these fair values may differ significantly from
the values that would have been used had an active market existed.
A
security that is valued by reference to Level 1 or Level 2 inputs may drop to Level 3 on a particular valuation date for several
reasons, including if:
| ● | an
equity security that is listed on an exchange or Nasdaq, or traded on OTC Market Group
Inc.’s OTC Link ATS or other alternative trading system, has not traded and there
are no bids; |
| ● | Royce
does not receive at least two bid side quotes for an Other OTC Equity Security; |
| ● | the
independent pricing services are unable to supply fair value prices; or |
| ● | the
Level 1 or Level 2 inputs become otherwise unreliable for any reason (e.g., a significant
event occurs after the close of trading for a security but prior to the time the Fund
prices its shares). |
The
table below shows the aggregate value of the various Level 1, Level 2, and Level 3 securities held by the Fund as of June 30,
2024. Any Level 2 or Level 3 securities held by the Fund are noted in its Schedule of Investments. The inputs or methodology used
for valuing securities are not necessarily an indication of the risk associated with owning those securities.
|
LEVEL
1 |
LEVEL
2 |
LEVEL
3 |
TOTAL |
Common
Stocks |
$1,881,952,511 |
$
5,495,514 |
$3,305,335 |
$1,890,753,360 |
Investment
Companies |
19,772,766 |
– |
– |
19,772,766 |
Repurchase
Agreement |
– |
32,764,351 |
– |
32,764,351 |
Level
3 Reconciliation:
|
|
|
|
|
UNREALIZED
GAIN (LOSS) 2 |
|
|
BALANCE
AS OF
12/31/23 |
PURCHASES |
TRANSFERS
IN 1 |
REALIZED
GAIN (LOSS) 2 |
CURRENTLY
HELD
SECURITIES |
SECURITIES
NO
LONGER
HELD |
BALANCE
AS OF
6/30/24 |
Common
Stocks |
$995,360 |
$
– |
$2,309,975 |
$
– |
$0 |
$
– |
$3,305,335 |
1 | Transfers
into Level 3 represents a security for which there were no longer readily available market
quotations at June 30, 2024. |
2 | The
net change in unrealized appreciation (depreciation) is included in the accompanying
Statement of Operations. Change in unrealized appreciation (depreciation) includes net
unrealized appreciation (depreciation) resulting from changes in investment values during
the reporting period and the reversal of previously recorded unrealized appreciation
(depreciation) when gains or losses are realized. Net realized gain (loss) from investments
and foreign currency transactions is included in the accompanying Statement of Operations. |
REPURCHASE
AGREEMENTS:
The
Fund may enter into repurchase agreements with institutions that the Fund’s investment adviser has determined are creditworthy.
The Fund restricts repurchase agreements to maturities of no more than seven days. Securities pledged as collateral for repurchase
agreements, which are held until maturity of the repurchase agreements, are marked-to-market daily and maintained at a value at
least equal to the principal amount of the repurchase agreement (including accrued interest). Repurchase agreements could involve
certain risks in the event of default or insolvency of the counter-party, including possible delays or restrictions upon the ability
of the Fund to dispose of its underlying securities. The remaining contractual maturity of the repurchase agreement held by the
Fund as of June 30, 2024, is next business day and continuous.
FOREIGN
CURRENCY:
Net
realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies,
expiration of currency forward contracts, currency gains or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s
books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities, other than investments in securities at the end of the reporting period,
as a result of changes in foreign currency exchange rates.
The
Fund does not isolate that portion of the results of operations resulting from fluctuations in foreign exchange rates on investments
from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized
and unrealized gain or loss on investments.
For the purposes of the Statement
of Cash Flows, the Fund defines Cash as cash, including foreign currency.
52
| 2024 Semiannual Report to Stockholders |
|
Royce
Small-Cap Trust
Notes
to Financial Statements (unaudited) (continued)
TAXES:
As
a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the Fund is not subject to income taxes
to the extent that it distributes substantially all of its taxable income for its fiscal year. The Schedule of Investments includes
information regarding income taxes under the caption “Tax Information.”
DISTRIBUTIONS:
The
Fund pays quarterly distributions on the Fund’s Common Stock at the annual rate of 7% of the rolling average of the prior
four calendar quarter-end NAVs of the Fund’s Common Stock, with the fourth quarter distribution being the greater of 1.75%
of the rolling average or the distribution required by IRS regulations. Distributions to Common Stockholders are recorded on ex-dividend
date. To the extent that distributions in any year are not paid from long-term capital gains, net investment income or net short-term
capital gains, they will represent a return of capital. Distributions are determined in accordance with income tax regulations
that may differ from accounting principles generally accepted in the United States of America. Permanent book and tax differences
relating to stockholder distributions will result in reclassifications within the capital accounts. Undistributed net investment
income may include temporary book and tax basis differences, which will reverse in a subsequent period. Any taxable income or
gain remaining undistributed at fiscal year end is distributed in the following year.
INVESTMENT
TRANSACTIONS AND RELATED INVESTMENT INCOME:
Investment
transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date except for certain dividends
from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is
received by the Fund. Non-cash dividend income is recorded at the fair market value of the securities received. Interest income
is recorded on an accrual basis. Premiums and discounts on debt securities are amortized using the effective yield-to-maturity
method. Realized gains and losses from investment transactions are determined on the basis of identified cost for book and tax
purposes.
EXPENSES:
The
Fund incurs direct and indirect expenses. Expenses directly attributable to the Fund are charged to the Fund, while expenses applicable
to more than one of the Royce Funds are allocated equitably. Certain personnel, occupancy costs and other administrative expenses
related to all of the Royce Funds are allocated by Royce under an administration agreement and are included in administrative
and office facilities and professional fees.
INDEMNIFICATION
PROVISIONS:
Reference
is made to Maryland law, the Fund’s Articles of Incorporation, as amended and supplemented, and the Fund’s Amended
and Restated By-laws, each of which provides for the indemnification by the Fund of the Fund’s officers and directors
under the circumstances and to the extent set forth therein. Reference is also made to the investment advisory agreement between
the Fund and Royce which provides for the indemnification by the Fund of Royce under the circumstances and to the extent
set forth therein. Additionally, in the normal course of business, the Fund enters into contracts with service providers that
contain general indemnification provisions in favor of such service providers and other covered persons. The amount of any
potential Fund liability under these indemnification arrangements, if any, currently cannot be determined with any degree
of specificity. The Fund is not currently in possession of any information that would cause it to believe that the Fund
is reasonably likely to be subject to any material adverse impact from the operation of these indemnification arrangements.
No assurance can be given, however, that the Fund will not incur any liability from the operation of these indemnification
arrangements. Any future liability to the Fund that may arise from the operation of such arrangements will be publicly disclosed
to the extent required by relevant accounting guidance and applicable laws, rules, and regulations.
Capital
Stock:
The
Fund issued 1,836,956 and 3,593,871 shares of Common Stock as reinvestment of distributions for the six months ended June 30,
2024, and the year ended December 31, 2023, respectively.
Borrowings:
The
Fund is party to a revolving credit agreement (the “credit agreement”) with BNP Paribas Prime Brokerage International,
Limited (BNPPI). The Fund pays a commitment fee of 0.50% per annum on the unused portion of the then-current maximum amount that
may be borrowed by the Fund under the credit agreement. The credit agreement has a 179-day rolling term that resets daily. The
Fund pledges eligible portfolio securities as collateral and has granted a security interest in such pledged securities to, and
in favor of, BNPPI as security for the loan balance outstanding. The amount of eligible portfolio securities required to be pledged
as collateral is determined by BNPPI in accordance with the credit agreement. In determining collateral requirements, the value
of eligible securities pledged as collateral is subject to discount by BNPPI based upon a variety of factors set forth in the
credit agreement. As of June 30, 2024, the market value of eligible securities pledged as collateral exceeded two times the loan
balance outstanding.
|
2024
Semiannual Report to Stockholders | 53 |
Royce
Small-Cap Trust
Notes
to Financial Statements (unaudited) (continued)
Borrowings
(continued):
If
the Fund fails to meet certain requirements, or comply with other financial covenants set forth in the credit agreement, the Fund
may be required to repay immediately, in part or in full, the loan balance outstanding under the credit agreement, which may necessitate
the sale of portfolio securities at potentially inopportune times. BNPPI may terminate the credit agreement upon certain ratings
downgrades of its corporate parent, which would result in the Fund’s entire loan balance becoming immediately due and payable.
The occurrence of such ratings downgrades may necessitate the sale of portfolio securities at potentially inopportune times. BNPPI
may also terminate the credit agreement upon sixty (60) calendar days’ prior written notice to the Fund in the event the
Fund’s net asset value per share as of the close of business on the last business day of any calendar month declines by
thirty-five percent (35%) or more from the Fund’s net asset value per share as of the close of business on the last business
day of the immediately preceding calendar month.
The
credit agreement also permits, subject to certain conditions, BNPPI to rehypothecate portfolio securities pledged by the Fund
up to the amount of the loan balance outstanding. The Fund continues to receive payments in lieu of dividends and interest on
rehypothecated securities. The Fund also has the right under the credit agreement to recall the rehypothecated securities from
BNPPI on demand. If BNPPI fails to deliver the recalled security in a timely manner, the Fund is compensated by BNPPI for any
fees or losses related to the failed delivery or, in the event a recalled security is not returned by BNPPI, the Fund, upon notice
to BNPPI, may reduce the loan balance outstanding by the value of the recalled security failed to be returned. The Fund receives
a portion of the fees earned by BNPPI in connection with the rehypothecation of portfolio securities.
The
Fund and BNPPI have agreed that the current maximum amount the Fund may borrow under the credit agreement is $70,000,000. The
Fund has the right to further reduce the maximum amount it can borrow under the credit agreement upon one (1) business day’s
prior written notice to BNPPI. In addition, the Fund and BNPPI may agree to increase the maximum amount the Fund can borrow under
the credit agreement, which amount may not exceed $150,000,000.
As
of June 30, 2024, the Fund had outstanding borrowings of $35,000,000. During the six-month period ended June 30, 2024, the Fund
had an average daily loan balance of $35,000,000 at a weighted average borrowing cost of 6.52%. The maximum loan balance outstanding
during the six-month period ended June 30, 2024, was $35,000,000. As of June 30, 2024, the aggregate value of rehypothecated securities
was $32,182,602. During the six-month period ended June 30, 2024, the Fund earned $176 in fees from rehypothecated securities.
Investment
Advisory Agreement:
As
compensation for its services under the investment advisory agreement, Royce receives a fee comprised of a Basic Fee (“Basic
Fee”) and an adjustment to the Basic Fee based on the investment performance of the Fund in relation to the investment record
of the S&P SmallCap 600 Index (“S&P 600"). The fee is payable monthly.
The
Basic Fee is a monthly fee equal to 1/12 of 1% (1% on an annualized basis) of the average of the Fund’s month-end net assets
for the rolling 60-month period ending with such month (the “performance period”). The Basic Fee for each month is increased
or decreased at the rate of 1/12 of .05% for each percentage point that the investment performance of the Fund exceeds, or is
exceeded by, the percentage change in the investment record of the S&P 600 for the performance period by more than two percentage
points. The performance period for each such month is a rolling 60-month period ending with such month. The maximum increase or
decrease in the Basic Fee for any month may not exceed 1/12 of .5%. Accordingly, for each month, the maximum monthly fee rate
as adjusted for performance is 1/12 of 1.5% and is payable if the investment performance of the Fund exceeds the percentage change
in the investment record of the S&P 600 by 12 or more percentage points for the performance period, and the minimum monthly
fee rate as adjusted for performance is 1/12 of .5% and is payable if the percentage change in the investment record of the S&P
600 exceeds the investment performance of the Fund by 12 or more percentage points for the performance period.
Notwithstanding
the foregoing, Royce is not entitled to receive any fee for any month when the investment performance of the Fund for the rolling
36-month period ending with such month is negative. In the event that the Fund’s investment performance for such a performance
period is less than zero, Royce will not be required to refund to the Fund any fee earned in respect of any prior performance
period.
For
the six rolling 60-month periods ended June 2024, the Fund’s investment performance ranged from 8% above to 11% above the
investment performance of the S&P 600. Accordingly, the net investment advisory fee consisted of a Basic Fee of $7,253,177
and a net upward adjustment of $2,827,077 for the performance of the Fund relative to that of the S&P 600. For the six months
ended June 30, 2024, the Fund expensed Royce investment advisory fees totaling $10,080,254.
Purchases
and Sales of Investment Securities:
For
the six months ended June 30, 2024, the costs of purchases and proceeds from sales of investment securities, other than short-
term securities, amounted to $405,590,278 and $411,003,726, respectively.
54
| 2024 Semiannual Report to Stockholders |
|
Royce
Small-Cap Trust
Notes
to Financial Statements (unaudited) (continued)
Purchases
and Sales of Investment Securities (continued):
Cross
trades were executed by the Fund pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio
securities between funds to which Royce or an affiliate of Franklin Resources, Inc. serves as investment adviser. The Fund’s
Chief Compliance Officer reviews such transactions each quarter for compliance with the requirements and restrictions set forth
by Rule 17a-7, and reports the results of that review to the Board of Directors. Cross trades for the six months ended June 30,
2024, were as follows:
COSTS
OF PURCHASES |
PROCEEDS
FROM SALES |
REALIZED
GAIN (LOSS) |
$225,000 |
$372,299 |
$(667,890) |
Subsequent
Events:
Subsequent
events have been evaluated through the date the financial statements were issued and it has been determined that no events have
occurred that require disclosure.
|
2024
Semiannual Report to Stockholders | 55 |
History Since
Inception (unaudited)
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
PRICE 1 |
| |
SHARES |
| |
NAV
VALUE 2 |
| |
MARKET
VALUE 2 |
|
Royce
Global 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 | | |
| 9,426 | | |
| 8,193 | |
12/10/15 | |
Distribution $0.10 | |
| | | |
| 7.230 | | |
| 14 | | |
| 9,101 | | |
| 7,696 | |
12/9/16 | |
Distribution $0.14 | |
| | | |
| 7.940 | | |
| 18 | | |
| 10,111 | | |
| 8,446 | |
12/12/17 | |
Distribution $0.11 | |
| | | |
| 10.610 | | |
| 11 | | |
| 13,254 | | |
| 11,484 | |
12/12/18 | |
Distribution $0.04 | |
| | | |
| 8.500 | | |
| 5 | | |
| 11,118 | | |
| 9,475 | |
12/11/19 | |
Distribution $0.06 | |
| | | |
| 10.670 | | |
| 6 | | |
| 14,593 | | |
| 12,543 | |
12/17/20 | |
Distribution $1.19 | |
| | | |
| 13.441 | | |
| 95 | | |
| 17,462 | | |
| 15,604 | |
12/10/21 | |
Distribution $2.75 | |
| | | |
| 12.498 | | |
| 257 | | |
| 20,321 | | |
| 18,696 | |
12/9/22 | |
Distribution $0.133 | |
| | | |
| 8.821 | | |
| 21 | | |
| 14,822 | | |
| 12,508 | |
12/8/23 | |
Distribution $0.15 | |
| | | |
| 9.430 | | |
| 23 | | |
| 17,217 | | |
| 14,323 | |
6/30/24 | |
| |
$ | 8,975 | | |
| | | |
| 1,469 | | |
$ | 18,436 | | |
$ | 16,335 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
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 | | |
| 86,071 | | |
| 76,507 | |
2015 | |
Annual distribution total $1.26 | |
| | | |
| 7.974 | | |
| 1,256 | | |
| 75,987 | | |
| 64,222 | |
2016 | |
Annual distribution total $0.64 | |
| | | |
| 7.513 | | |
| 779 | | |
| 92,689 | | |
| 78,540 | |
2017 | |
Annual distribution total $0.69 | |
| | | |
| 8.746 | | |
| 783 | | |
| 109,076 | | |
| 98,254 | |
2018 | |
Annual distribution total $0.75 | |
| | | |
| 8.993 | | |
| 893 | | |
| 96,398 | | |
| 83,853 | |
2019 | |
Annual distribution total $0.68 | |
| | | |
| 8.297 | | |
| 955 | | |
| 118,025 | | |
| 104,666 | |
2020 | |
Annual distribution total $0.61 | |
| | | |
| 6.944 | | |
| 1,120 | | |
| 128,811 | | |
| 135,365 | |
2021 | |
Annual distribution total $0.84 | |
| | | |
| 11.377 | | |
| 1,014 | | |
| 187,933 | | |
| 166,205 | |
2022 | |
Annual distribution total
$0.953 | |
| | | |
| 8.887 | | |
| 1,598 | | |
| 156,203 | | |
| 138,776 | |
2023 | |
Annual distribution total $0.74 | |
| | | |
| 8.648 | | |
| 1,413 | | |
| 182,188 | | |
| 160,785 | |
2024 | |
Year-to-Date distribution total $0.35 | |
| | | |
| 9.070 | | |
| 678 | | |
| | | |
| | |
6/30/24 | |
| |
$ | 8,900 | | |
| | | |
| 18,079 | | |
$ | 190,914 | | |
$ | 166,146 | |
1 | The
purchase price used for annual distribution totals is a weighted average of the distribution
reinvestment prices for the year. |
2 | Values
are stated as of December 31 of the year indicated, after reinvestment of distributions,
other than for initial purchase. |
3 | Includes
a return of capital. |
56
| This page is not part of the 2024 Semiannual Report to Stockholders
History
Since Inception (unaudited) (continued)
HISTORY | |
AMOUNT INVESTED |
| |
PURCHASE PRICE 1 |
| |
SHARES |
| |
NAV VALUE2 |
| |
MARKET VALUE2 |
|
Royce Small-Cap 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 | | |
| 252,175 | | |
| 222,516 | |
2015 | |
Annual distribution total $1.24 | |
| | | |
| 12.725 | | |
| 1,565 | | |
| 231,781 | | |
| 201,185 | |
2016 | |
Annual distribution total $1.02 | |
| | | |
| 12.334 | | |
| 1,460 | | |
| 293,880 | | |
| 248,425 | |
2017 | |
Annual distribution total $1.16 | |
| | | |
| 14.841 | | |
| 1,495 | | |
| 350,840 | | |
| 324,176 | |
2018 | |
Distribution through 6/30/18 $0.59 | |
| | | |
| 15.962 | | |
| 748 | | |
| | | |
| | |
2018 | |
Rights Offering | |
| 31,289 | | |
| 15.330 | | |
| 2,041 | | |
| | | |
| | |
2018 | |
Distribution after 6/30/18 $0.67 | |
| | | |
| 12.706 | | |
| 1,168 | | |
| 329,589 | | |
| 283,259 | |
2019 | |
Annual distribution total $1.10 | |
| | | |
| 14.100 | | |
| 1,929 | | |
| 429,986 | | |
| 383,045 | |
2020 | |
Annual distribution total $1.04 | |
| | | |
| 11.888 | | |
| 2,357 | | |
| 523,949 | | |
| 456,617 | |
2021 | |
Annual distribution total $1.67 | |
| | | |
| 18.124 | | |
| 2,690 | | |
| 628,604 | | |
| 609,918 | |
2022 | |
Annual distribution total
$1.323 | |
| | | |
| 14.525 | | |
| 2,907 | | |
| 495,104 | | |
| 449,355 | |
2023 | |
Annual distribution total $1.07 | |
| | | |
| 13.427 | | |
| 2,784 | | |
| 602,154 | | |
| 533,944 | |
2024 | |
Year-to-Date distribution total $0.55 | |
| | | |
| 14.201 | | |
| 1,434 | | |
| | | |
| | |
6/30/24 | |
| |
$ | 53,211 | | |
| | | |
| 38,106 | | |
$ | 630,273 | | |
$ | 551,394 | |
1 | The
purchase price used for annual distribution totals is a weighted average of the distribution
reinvestment prices for the year. |
2 | Values
are stated as of December 31 of the year indicated, after reinvestment of distributions,
other than for initial purchase. |
3 | Includes
a return of capital. |
4 | Includes
Royce Global Trust spin-off of $1.40 per share. |
This
page is not part of the 2024 Semiannual Report to Stockholders | 57
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 your 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 Fund’s 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 June 30, 2024.
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
June 30, 2024. 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.).
58
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Directors
and Officers
All
Directors and Officers may be reached c/o The Royce Funds, 745 Fifth Avenue, New York, NY 10151
Christopher
D. Clark, Director 1, President
Age:
59 | Number of Funds Overseen: 16 | Tenure: Since
2014
Principal
Occupation(s) During Past Five Years: Chief Executive Officer (since July 2016), President (since July 2014), Co-Chief Investment
Officer (since January 2014), Managing Director of Royce, a Member of the Board of Managers of Royce, having been employed by
Royce since May 2007.
Patricia
W. Chadwick, Director
Age:
75 | Number of Funds Overseen: 16 | Tenure: Since
2009
Non-Royce Directorships: Director of Voya Mutual Funds
Principal
Occupation(s) During Past 5 Years: Consultant and President, Ravengate Partners LLC (since 2000). Formerly Director, Wisconsin
Energy Corp. (until 2022).
Christopher
C. Grisanti, Director
Age:
62 | Number of Funds Overseen: 16 | Tenure: Since
2017
Non-Royce
Directorships: None
Principal
Occupation(s) During Past Five Years: Chief Equity Strategist and Senior Portfolio Manager, MAI Capital Management LLC (investment
advisory firm) (since May 2020). Formerly Co-Founder and Chief Executive Officer, Grisanti Capital Management LLC (investment
advisory firm) (from 1999 to 2020); Director of Research and Portfolio Manager, Spears Benzak, Salomon & Farrell (from 1994
to 1999); and Senior Associate, Simpson, Thacher & Bartlett (law firm) (from 1988 to 1994).
Cecile
B. Harper, Director
Age:
61 | Number of Funds Overseen: 16 | Tenure: Since
2020
Non-Royce Directorships: Director of Alarm.com Holdings, Inc. (since May 2024)
Principal
Occupation(s) During Past Five Years: Chief Financial Officer and Chief Operating Officer, College Foundation at the University
of Virginia (since October 2019). Formerly Board Member, Pyramid Peak Foundation (January 2012 to 2022); Board Member, Regional
One Health Foundation (from June 2013 to September 2019); and Principal, Southeastern Asset Management (from December 1993 to
September 2019).
G.
Peter O’Brien, Director
Age:
78 | Number of Funds Overseen: 69 | Tenure: Since
2001
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 53 Legg Mason Funds.
Principal
Occupation(s) During Past Five Years: Trustee Emeritus, Colgate University (since 2005); and Emeritus Board Member, Hill House,
Inc. (since 2019). Formerly Director, TICC Capital Corp. (from 2003-2017); Trustee, Colgate University (from 1996 to 2005);
President, Hill House, Inc. (from 2001 to 2005); Board Member, Hill House, Inc. (from 1999 to 2019); Director, Bridges School
(from 2006 to 2018); and Managing Director/ Equity Capital Markets Group, Merrill Lynch & Co. (from 1971 to 1999).
Julia
W. Poston, Director
Age:
64 | Number of Funds Overseen: 16 | Tenure: Since
2023
Non-Royce Directorships: AuguStar Variable Insurance Products Fund, Inc. and The James Advantage Funds
Principal
Occupation(s) During Past Five Years: Director, Member of Nominating/Governance Committee, and Chair of Audit Committee,
Al. Neyer Corporation (since 2020); Director, Member of Governance Committee, and Chair of Audit Committee, Master
Fluid Solutions (since 2021); Trustee and Chair of Finance/Audit Committee, Cincinnati Museum Center (non-profit) (since
2015); and Director and Founder, Cincinnati Women’s Executive Forum (non-profit) (since 2010). Formerly Senior Client
Partner (2002-2020) and Assurance Practice Group Leader for Ohio Valley Region (2014-2019), Ernst & Young, LLP
(international accounting and services firm); and Audit Partner, Arthur Andersen LLP (international accounting and services
firm) (1982-2002).
Michael
K. Shields, Director
Age:
66 | Number of Funds Overseen: 16 | Tenure: Since
2015
Non-Royce
Directorships: None
Principal
Occupation(s) During Past Five Years: Chairman, UNC Charlotte Investment Fund Board (since February 2016); and Chairman,
Halftime Carolinas Board (since February 2011). Formerly President and Chief Executive Officer, Piedmont Trust Company
(privately owned North Carolina trust company) (from February 2012 to December 2023); Owner, Shields Advisors
(investment consulting firm) (from April 2010 to June 2012); President and Chief Executive Officer, Eastover Capital
Management (2005-2007); President and Chief Executive Officer, Campbell, Cowperthwait & Co. (investment subsidiary of
U.S. Trust Corporation) (1997-2002); and equity portfolio manager and co-manager of Quality Growth Team, Scudder, Stevens
& Clark (1992-1997).
Francis
D. Gannon, Vice President
Age:
56 | 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.
Daniel
A. O’Byrne, Vice President
Age:
62 | Tenure: Since 1994
Principal
Occupation(s) During Past Five Years: Principal and Vice President of Royce, having been employed by Royce since October 1986.
Peter
K. Hoglund, Treasurer
Age:
58 | Tenure: Since 2015
Principal
Occupation(s) During Past Five Years: Chief Financial Officer, Chief Administrative Officer, and Managing Director of Royce,
having been employed by Royce since December 2014. Prior to joining Royce, Mr. Hoglund spent more than 20 years with Munder
Capital Management in Birmingham, MI, serving as Managing Director and Chief Financial Officer and overseeing all financial aspects
of the firm. He began his career at Munder as a portfolio manager.
John
E. Denneen, Secretary and Chief Legal Officer
Age:
57 | Tenure: 1996-2001 and Since 2002
Principal
Occupation(s) During Past Five Years: General Counsel, Managing Director, and, since June 2015, a Member of the Board of Managers
of Royce. Chief Legal and Compliance Officer and Secretary of Royce.
John
P. Schwartz, Chief Compliance Officer
Age:
53 | Tenure: Since 2022
Principal
Occupation(s) During Past Five Years: Chief Compliance Officer of The Royce Funds (since May 2022) and Associate General Counsel
and Compliance Officer of Royce (since March 2013).
1 Interested
Director.
Directors
will hold office until their successors have been duly elected and qualified or until their earlier resignation or removal. The
Statement of Additional Information, which contains additional information about the Trust’s directors and officers, is
available and can be obtained without charge at www.royceinvest. com or by calling (800) 221-4268.
This
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Board Approval
of Investment Advisory Agreements
At
meetings held on June 17-18, 2024, the Board of Directors (each, a “Board” and collectively, the
“Boards”), including all of the non-interested directors, of each of Royce Small-Cap Trust, Inc., Royce Micro-Cap
Trust, Inc., and Royce Global Trust, Inc. (each, a “Fund” and collectively, the “Funds”) approved the
continuation of the investment advisory agreement between Royce & Associates, LP (“Royce”) and the
relevant Fund (each, an “Agreement” and collectively, the “Agreements”). In reaching these decisions,
each Board reviewed the materials provided by Royce, which included, among other things, information prepared internally by
Royce and independently by Broadridge Financial Solutions, Inc. (“Broadridge”) using the database and methodology
of Morningstar Associates, LLC (“Morningstar”). Such materials contained detailed investment advisory fee,
expense ratio, and investment performance comparisons for each of the Funds with other funds in its Broadridge-assigned
“peer group” and Morningstar “category,” information regarding the past performance of each Fund and
other registered investment companies managed by Royce and a memorandum outlining the legal duties of each Board prepared by
independent legal counsel to the non-interested directors. Royce also provided each Board with an analysis of its
profitability with respect to providing investment advisory services to the relevant Fund. In addition, each Board took into
account information furnished throughout the year at regular Board meetings, including reports on investment performance,
stockholder services, regulatory compliance, brokerage commissions and research, and brokerage and other execution products
and services provided to the relevant Fund. Each Board also took into account information furnished by Royce in response to
various director questions regarding Royce operations and the Funds. Each Board also considered other matters it deemed
important to the approval process, such as allocation of brokerage commissions, “soft dollar” research services
Royce receives, and other direct and indirect benefits Royce and its affiliates receive from their relationship with the
relevant Fund. The Boards also met throughout the year with investment advisory personnel from Royce. Each Board also noted
Royce’s efforts to provide enhanced analytical tools to its investment staff. Each Board, in its deliberations,
recognized that, for many of the relevant Fund’s stockholders, the decision to purchase Fund shares included a decision
to select Royce as the investment adviser and that there was a strong association in the minds of Fund stockholders between
Royce and the relevant Fund. In considering factors relating to the approval of the continuation of the Agreement for each
Fund, the non-interested directors received assistance and advice from, and met separately with, their independent legal
counsel. While continuation of the investment advisory and administrative arrangements for the Funds was considered at the
same Board meetings, the Boards considered the circumstances and interests of each Fund separately. Among other factors, the
Boards noted that they considered the following:
The
nature, extent, and quality of services provided by Royce:
Each
Board considered the following factors to be of fundamental importance to its consideration of whether to approve the
continuation of the Agreement for the relevant Fund: (i) Royce’s more than 50 years of value investing experience and
track record; (ii) the history of long-tenured Royce portfolio managers managing the Funds; (iii) Royce’s focus
on micro-, small-, and mid-cap value investing; (iv) the consistency of Royce’s approach to managing the relevant Fund,
the other Funds, and open-end mutual funds over more than 50 years; (v) the integrity and high ethical standards adhered to
at Royce; (vi) Royce’s specialized experience in the area of trading small- and micro-cap securities; (vii)
Royce’s historical ability to attract and retain portfolio management, research, and analytical talent (and, in this
regard, considered the effort and resources Royce had committed to acquiring portfolio management, research, and analytical
talent in recent years); and (viii) Royce’s focus on stockholder interests as exemplified by expansive stockholder
reporting and communications. The Boards also noted that Royce’s compensation policy arrangements strongly encourage
portfolio manager investment in each fund that they manage. Each Board reviewed the services that Royce provides to the
relevant Fund, including, but not limited to, managing each Fund’s investments in accordance with the stated policies
of each Fund. Each Board considered the fact that Royce provided certain administrative services to the relevant Fund at cost
pursuant to the Administration Agreement between Royce and the relevant Fund. Each Board determined that the services to be
provided to the relevant Fund by Royce would be the same as those that Royce previously provided to such Fund. The Boards
also took into consideration the histories, reputations, and backgrounds of Royce’s portfolio managers for the Funds,
finding that these would likely have an impact on the continued success of the Funds. Each Board concluded that the
investment advisory services provided by Royce to the relevant Fund compared favorably to services provided by Royce to other
Royce client accounts, including other funds, in both nature and quality, and that the scope of services provided by Royce
continues to be suitable for the relevant Fund.
Investment
performance of the Funds and Royce:
Each
Board believes that risk-adjusted performance continues to be an appropriate measure of the relevant Fund’s
investment performance. One measure of risk-adjusted performance historically used by the directors in their review of
each Fund’s performance is the Sharpe Ratio. The Sharpe Ratio is a risk-adjusted measure of performance developed by
Nobel Laureate William Sharpe. It is calculated by dividing a fund’s annualized excess returns by its annualized
standard deviation to determine reward per unit of risk. The higher the Sharpe Ratio, the better a fund’s historical
risk-adjusted performance. The Boards attach importance to risk-adjusted performance over relatively long periods of time,
typically 3 to 10 years, because such periods tend to encompass different market environments and cycles, unlike shorter time
periods.
U.S.
small- and large-cap stocks overcame multiple macro-economic and political headwinds in 2023, including the ongoing war in Ukraine,
stubborn inflation, a hawkish Fed which continued to raise interest rates through June and promoted a “higher for longer”
approach to interest rates for much of the year, several high-profile bank failures, and the terrorist attacks on Israel and resulting
Middle East conflict, to post positive returns for the year. After experiencing a downward trend from February through late October
2023, the Russell 2000 Index rallied 22.4% in November and December. Overall, the Russell 2000 Index and the Russell Micro-Cap
Index rose 16.9% and 9.3%, respectively, during 2023. Within the U.S. small-cap market, the Board noted that small-cap growth
stocks fared better than small-cap value stocks during 2023, with the Russell 2000 Growth Index posting a return of 18.66% compared
to a gain of 14.65% for the Russell 2000 Value Index. Despite the solid absolute returns for the Russell 2000 Index and the
Russell Micro-Cap Index in 2023, the Russell 1000 Index gained 26.5% during the period and outperformed its smaller-cap siblings.
It
was also noted that a large portion of the post-2008 market period for RVT and RMT and, with respect to RGT, a large portion of
its existence, was marked by historically low interest rates and significant U.S. Federal Reserve market intervention. During
this period, highly leveraged, non-earning companies and yield-oriented securities (e.g., master limited partnerships, real
estate investment trusts, and utilities) generally outperformed those companies with more conservative balance sheets, low leverage,
the ability to generate and effectively allocate free cash flow, and strong returns on invested capital and cyclical companies
generally favored by the Funds. Each Board noted that the relative risk-adjusted investment performance of the relevant Fund
was adversely affected during periods in which the above-described market factors were prevalent.
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Board Approval
of Investment Advisory Agreements (continued)
The
directors noted that Royce Small-Cap Trust, Inc. (formerly Royce Value Trust, Inc.) (“RVT”) ranked in the 1st, 4th,
3rd, and 3rd Sharpe Ratio quartiles within its Morningstar category for the 1-, 3-, 5-, and 10-year periods, respectively, ended
December 31, 2023. The directors also noted that the Sharpe Ratio for Royce Global Trust, Inc. (formerly Royce Global Value
Trust, Inc.) (“RGT”) ranked in the 2nd Sharpe Ratio quartile within its Morningstar category for the 1-, 3-, and
10-year periods ended December 31, 2023, and in the 3rd Sharpe Ratio quartile within its Morningstar category for the 5-year
period ended December 31, 2023. The directors further noted that Royce Micro-Cap Trust, Inc. (“RMT”) ranked in the
3rd, 4th, 2nd and 3rd Sharpe Ratio quartiles within its Morningstar category for the 1-, 3-, 5-, and 10-year periods, respectively,
ended December 31, 2023.
The
relevant Boards also received an analysis that compared the Sharpe Ratios of RVT and RMT with the arithmetic average of the
Sharpe Ratios of the funds within their respective Morningstar categories for each of the 1-, 3-, 5-, and 10-year periods
ended December 31, 2023. The relevant Boards noted that: (i) RVT’s Sharpe Ratio exceeded the arithmetic average
of the Sharpe Ratios of the funds within its Morningstar category for the applicable 1-, 5-, and 10-year periods; and (ii)
RMT’s Sharpe Ratio exceeded the arithmetic average of the Sharpe Ratios of the funds within its Morningstar category
for the applicable 5-year period.
The
relevant Boards also received an analysis that compared the Sharpe Ratios of RVT and RMT with the Sharpe Ratios of various broad-based
benchmark indexes for each of the 1-, 3-, 5- , and 10-year periods ended December 31, 2023. The relevant Boards noted that: (i)
RVT’s Sharpe Ratio equaled or exceeded the Sharpe Ratio of the Russell 2000 Index for all four of the applicable time periods;
and (ii) RMT’s Sharpe Ratio exceeded the Sharpe Ratio of the Russell Microcap Index for all four of the applicable time
periods.
In
addition to the relative risk–adjusted performance of each Fund, the Boards also reviewed and considered each
Fund’s absolute total returns and down-market performance and long-term performance records for periods exceeding ten
years for RMT and RVT. (RGT commenced operations on or about October 18, 2013, and did not have more than ten full calendar
year of performance as of December 31, 2023.) In reviewing the long-term performance records for RVT and RMT, it was noted
that such Funds had generally outperformed their respective benchmark indexes and competitors during the periods prior to the
U.S. Federal Reserve’s near zero interest rate policy and related market interventions that followed the 2008
financial crisis. The directors also received detailed information from Royce comparing the Funds’ average annual total
returns to those of various broad-based benchmark indexes and noted that: (i) RVT outperformed the Russell 2000 Index for
each of the 1-, 3-, 5-, and 10-year periods ended December 31, 2023; (ii) RMT outperformed the Russell Microcap Index for
each of the 1- , 3-, 5-, and 10-year periods ended December 31, 2023; and (iii) RGT underperformed the MSCI ACWI Small Cap
Index for each of the 1-, 3-, 5-, and 10-year periods ended December 31, 2023.
The
Board also considered it important to look beyond “snapshot” performance as of December 31, 2023, and therefore examined
monthly rolling average returns for the Funds relative to various broad- based benchmark indexes for the 3-, 5 -, and 10-year
periods ended March 31, 2024. The Board noted that: (i) RMT outperformed the Russell Microcap Index for a majority of the monthly
rolling average annual return periods during all three of the 3-, 5-, and 10-year periods ended March 31, 2024; (ii) RVT outperformed
the Russell 2000 Index for a majority of the monthly rolling average annual return periods during the 3- and 5-year periods ended
March 31, 2024; and (iii) RGT outperformed the MSCI ACWI Small Cap Index for a majority of the monthly rolling average annual
return periods during the 3- and 5-year periods ended March 31, 2024.
Although
each Board recognized that past performance is not necessarily an indicator of future results, it found that Royce had the necessary
qualifications, experience and track record in managing micro-cap, small-cap, and mid-cap securities to manage the relevant
Fund. Each Board determined that Royce continues to be an appropriate investment adviser for the relevant Fund.
Cost
of the services provided and profits realized by Royce from its relationship with each Fund:
Each
Board considered the cost of the services provided by Royce and the profits realized by Royce from its relationship with the relevant
Fund. As part of the analysis, each Board discussed with Royce its methodology in allocating its costs to the relevant Fund and
concluded that Royce’s allocations were reasonable. The directors also received information on how the fulcrum investment
advisory fees for RMT and RVT affect Royce’s profitability with respect to those Funds. Each Board concluded that Royce’s
profits with respect to the relevant Fund during the calendar year ended December 31, 2023, were reasonable in relation to the
nature and quality of services provided.
The
extent to which economies of scale would be realized as the Funds grow and whether fee levels would reflect such economies of
scale:
While
acknowledging that the presence or absence of economies of scale in fund management businesses can be debated and is, in any
event, difficult to measure and directly assess, each Board considered whether there have been economies of scale in
respect of the management of the relevant Fund, whether the relevant Fund has appropriately benefited from any economies of
scale and whether there is potential for realization of any further economies of scale.
The
Boards noted the time and effort involved in managing portfolios of small- and micro-cap stocks and that they did not
involve the same efficiencies as do portfolios of large-cap stocks. The Boards noted that, as closed-end funds, the Funds
generally would not be expected to have significant inflows of capital that might produce increasing economies of scale. Each
Board concluded that the current fee structure for the relevant Fund is reasonable, that stockholders sufficiently
participated in economies of scale (while again noting the various potential issues with assessing such economies of scale
both in general and under the facts at hand) and that no changes were currently necessary.
Comparison
of services to be rendered and fees to be paid to those under other investment advisory contracts, such as contracts of the same
and other investment advisers or other clients:
Each
Board reviewed the investment advisory fee paid by the relevant Fund and compared both the services to be rendered and the
fees to be paid under the relevant Agreement to other contracts of Royce and to contracts of other investment advisers to
registered investment companies investing in micro-, small -, and mid-cap stocks, as provided by Broadridge. With respect to
RVT, its Board noted that although the Fund’s effective investment advisory fee rate ranked in the 4th (most expensive)
quartile within its Broadridge -assigned peer group for 2023, the amount of investment advisory fees paid by the Fund to
Royce was subject to a significant net upward adjustment in 2023 due to the Fund’s investment performance exceeding
that of the S&P 600 SmallCap Index during the relevant trailing 60-month periods. With respect to RGT, its Board
noted that noted that although the Fund’s effective investment advisory fee rate ranked in the 4th (most expensive)
quartile within its Broadridge-assigned peer group for 2023, such fee was only three basis points higher than the median for
such Broadridge-assigned peer group. With respect to RMT, its Board
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Board
Approval of Investment Advisory Agreements (continued)
noted
that noted that although the Fund’s effective investment advisory fee rate ranked in the 4th (most expensive) quartile within
its Broadridge-assigned peer group for 2023, the amount of investment advisory fees paid by the Fund to Royce was subject to
a significant net upward adjustment in 2023 due to the Fund’s investment performance exceeding that of the Russell 2000
Index during the relevant trailing 36-month periods.
In
the case of RVT, its Board noted that it had a 1.00% basic fee that is subject to adjustment up or down (up to 0.50% in either
direction) based on its performance versus the S&P 600 SmallCap Index over a rolling period of 60 months. The fee is charged
on average net assets over that rolling period. As a result, in a rising market, the fee will be smaller than a fee calculated
on the current year’s average net assets, and vice versa. As noted above, the amount of investment advisory fees paid by
RVT to Royce was subject to a significant net upward adjustment in 2023 due to the Fund’s investment performance exceeding
that of the S&P SmallCap 600 Index during the relevant trailing 60-month periods. The RVT Board determined that the performance
adjustment feature continues to serve as an appropriate incentive to Royce to manage RVT for the benefit of its long-term common
stockholders. The RVT Board also noted that the fee arrangement, which also includes a provision for no fee to be paid to Royce
in periods during which RVT’s trailing three-year performance is negative, requires Royce to measure RVT’s performance
monthly against the S&P 600 SmallCap Index, an unmanaged index. Therefore, instead of receiving a set fee regardless of its
performance, Royce is penalized for poor performance. The RVT Board noted that the Fund’s net annual operating expense
ratio of 1.41%, which includes interest expense for amounts borrowed for investment purposes and the net upward adjustment in
the amount of investment advisory fees paid by RVT to Royce, placed in the 4th (most expensive) quartile within its Broadridge-assigned
peer group for 2023, 45 basis points higher than the median for such peer group. Excluding such interest expense and such net
upward fee adjustment, RVT’s net annual operating expense ratio for 2023 would have been 1.11%, 15 basis points higher
than the median for its Broadridge-assigned peer group.
In
the case of RMT, its Board noted that it had a 1.00% basic fee subject to adjustment up or down based on its performance
versus the Russell 2000 Index over a rolling 36-month period. The fee is charged on average net assets over that rolling
period. As a result, in a rising market, the fee will be smaller than a fee calculated on the current year’s average
net assets, and vice versa. As noted above, the amount of investment advisory fees paid by RMT to Royce was subject to
a significant net upward adjustment in 2023 due to the Fund’s investment performance exceeding that of the Russell 2000
Index during the relevant trailing 36-month periods. The RMT Board determined that the performance adjustment feature
continues to serve as an appropriate incentive to Royce to manage RMT for the benefit of its long-term common stockholders.
The RMT Board noted that the Fund’s net annual operating expense ratio of 1.85%, which includes interest expense for
amounts borrowed for investment purposes and the net upward adjustment in the amount of investment advisory fees paid by RMT
to Royce, placed in the 4th (most expensive) quartile within its Broadridge-assigned peer group for 2023, 60 basis points
higher than the median for such peer group. Excluding such interest expense and such net upward fee adjustment, RMT’s
net annual operating expense ratio for 2023 would have been 1.22%, 3 basis points lower than the median for its
Broadridge-assigned peer group.
Finally,
in the case of RGT, its Board noted that the Fund’s net annual operating expense ratio of 2.52%, which includes interest
expense for amounts borrowed for investment purposes and the effect of certain fees and expenses relating to litigation involving
RGT that were accrued in 2023, placed in the 4th (most expensive) quartile within its Broadridge-assigned peer group for 2023,
119 basis points higher than the median of such peer group. Excluding such interest expense and the effect of such accrued litigation-related
fees and expenses, RMT’s net annual operating expense ratio for 2023 would have been 1.42%, 9 basis points higher than
the median for its Broadridge-assigned peer group. The RGT Board further noted that the completion of a tender offer in December
2020 substantially reduced the amount of net assets over which Fund expenses could be spread, which resulted in an increase in
its net annual operating expense ratio going forward.
The
Boards also noted that Royce manages the Funds in an active fashion. The industry accepted metric for measuring how actively
an equity portfolio is managed is called “active share.” In particular, active share measures how much the
holdings of an equity portfolio differ from the holdings of its appropriate passive benchmark index. At the extremes, a
portfolio with no holdings in common with the benchmark would have 100% active share, while a portfolio that is
identical to the benchmark would have 0% active share. Royce presented several analyses to the Boards which demonstrated that
mutual funds with high active share scores had higher expense ratios than mutual funds with lower active share scores due to
the resources required for the active management of those funds. The Boards noted that the active share for RVT, RGT, and RMT
were 81%, 98%, and 95%, respectively, for the calendar year ended December 31, 2023.
The
Boards also considered investment advisory fees charged by Royce to institutional and other clients and noted that, given the
greater levels of services that Royce provides to registered investment companies such as the Funds as compared to other accounts,
the base investment advisory fee for RVT and RMT and the advisory fee for RGT, compared favorably to the investment advisory fees
charged to those other accounts.
No
single factor was cited as determinative to the decision of the Boards. Rather, after weighing all of the considerations and
conclusions discussed above, the entirety of each Board, including all the non-interested directors, determined to approve the
continuation of the existing Agreement for each Fund, concluding that continuation of the Agreement for each Fund is in the best
interest of the stockholders of the relevant Fund and that each Fund’s investment advisory fee rate is reasonable in relation
to the services provided.
62
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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 June 30, 2024, 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 Royce’s investment intentions with respect to those securities reflect Royce’s opinions as of June
30, 2024 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.royceinvest.com.
Sector
weightings are determined using the Global Industry Classification Standard (“GICS”). GICS was developed by, and
is the exclusive property of, Standard & Poor’s 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 index’s returns include net reinvested dividends and/or
interest income. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights
related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors
accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party
may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution
of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the
content of this communication. 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 2000 Value and Growth Indexes consist
of the respective value and growth stocks within the Russell 2000 as determined by Russell Investments. 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 1000 Index is an index of domestic large-cap stocks. It measures the performance of the
1,000 largest publicly traded U.S. companies in the Russell 3000 Index. Source: MSCI. MSCI makes no express or implied warranties
or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not
be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved,
endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation
to make (or refrain from making) any kind of investment decision and may not be relied on as such. The MSCI ACWI Small Cap Index
is an unmanaged, capitalization-weighted index of global small-cap stocks. Index returns include net reinvested dividends and/or
interest income. The S&P SmallCap 600 Index is an index of U.S. small-cap stocks selected by Standard & Poor’s based
on market size, liquidity, and industry grouping, among other factors. The S&P 500 Index tracks the stock performance of 500
of the largest companies listed on stock exchanges in the U.S. The Nasdaq Composite Index is a market capitalization weighted
index of more than 3,700 stocks 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. Index returns used in this Report were based on information
supplied to Royce by Russell for the Russell market indexes and by MSCI for the MSCI market indexes. Royce has not independently
verified the above described information.
The
Price-Earnings, or P/E, Ratio is calculated by dividing a company’s share price by its trailing 12-month
earnings-per-share (EPS). The Price-to-Book, or P/B, Ratio is calculated by dividing a company’s share price by
its book value per share. Beta is a measure of the volatility or risk of an investment compared to the market as a whole.
Alpha describes an investment strategy’s ability to beat the market. The Morningstar Style Map uses proprietary scores
of a stock’s 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%. For the
Morningstar Small Blend Category: © 2024 Morningstar. All Rights Reserved. The information regarding the category in
this piece is: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3)
is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any
damages or losses arising from any use of this information. Cyclical and Defensive are defined as follows: Cyclical:
Communication Services, Consumer Discretionary, Energy, Financials, Industrials, Information Technology, and Materials.
Defensive: Consumer Staples, Health Care, Real Estate, and Utilities. Return on Invested Capital is calculated by dividing a
company’s past 12 months of operating income (earnings before interest and taxes) by its average invested capital
(total equity, less cash and cash equivalents, plus total debt, minority interest, and preferred stock). The Royce Funds is a
service mark of The Royce Funds.
Investment
Objectives
The
investment objective of each Fund is long-term growth of capital.
Investment
Policies
Royce
Global Trust, Inc. (“RGT”). Under normal circumstances, RGT will invest at least 80% of its net assets in equity
securities, such as common stock and preferred stock. RGT generally invests a significant portion of its assets U.S. and non-U.S.
small/mid-cap stocks (generally market caps up to $10 billion). Under normal circumstances, at least 40% of RGT’s net assets
will be invested in the equity securities of companies headquartered in at least three countries outside the United States. From
time to time, a substantial portion of RGT’s assets may be invested in companies located in a single country. Although there
are no geographic limits on RGT’s investments, no more than 35% of RGT’s net assets may be invested in the
securities of companies headquartered in “developing countries,” also known as emerging markets. Generally, developing
countries include every country in the world other than the United States, Canada, Japan, Australia, New Zealand, Hong Kong, Singapore,
South Korea, Taiwan, Bermuda, and Western European countries (which include, Austria, Belgium, Denmark, France, Finland, Germany,
Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom).
Royce
Micro-Cap Trust, Inc. (“RMT”). RMT normally invests at least 80% of its net assets in the equity securities of
micro-cap companies. Micro-cap companies are those that have a market capitalization not greater than that of the largest company
in the Russell Microcap® Index at the time of its most recent reconstitution. Royce employs a core approach
that combines multiple investment themes and focuses on companies with strong fundamentals and/ or prospects selling at prices
that Royce believes do not fully reflect
This
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Notes to
Performance and Other Important Information (continued)
these
attributes. RMT may invest up to 25% of its assets in securities of issuers headquartered outside the United States.
Royce
Small-Cap Trust, Inc. (“RVT”). RVT normally invests at least 80% of its assets in the equity securities of small-cap
companies. Such companies are those that have a market capitalization not greater than that of the largest company in the Russell 2000®
Index at the time of its most recent reconstitution. Royce employs a core approach that combines multiple investment themes and
focuses on companies with high returns on invested capital or those with strong fundamentals and/or prospects trading at what Royce believes
are attractive valuations. A portion of the Fund’s assets is managed using a systematic multi-factor selection process that is
derived from the investment philosophies used by the Fund’s Portfolio Managers in managing the remainder of the Fund. While this
multi-factor process provides guidance, a Portfolio Manager has discretion for which buys and sells are executed. RVT may invest up to
25% of its assets in securities of issuers headquartered outside the United States.
Primary
Risks
As
with any closed-end fund that invests in common stocks, each Fund is subject to market risk—the possibility that common
stock prices will decline over short and/or extended periods of time due to overall market, financial, and economic conditions,
trends or events, governmental or central bank actions and/or interventions, changes in investor sentiment, armed conflicts, economic
sanctions and countermeasures in response to sanctions, market disruptions caused by trade disputes or other factors, political
developments, major cybersecurity events and acts of terrorism, the global and domestic effects of a pandemic or epidemic, contagion
effects on the finance sector and the overall economy from banking industry instability, and other factors that may or may not
be directly related to the issuer of a security held by a Fund. Economies and financial markets throughout the world are increasingly
interconnected, and economic, financial, or political events in one country or region could have profound impacts on global economies
or markets. Armed conflicts in Europe and the Middle East, as well as any banking industry instability, may adversely affect
global economies, markets, industries, and individual companies in ways that cannot necessarily be foreseen. As a result, the
value of your investment in a Fund will fluctuate, sometimes sharply and unpredictably, and you could lose money over short and/or
long periods of time.
Investors
wanting to buy or sell shares of a Fund 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.
The
prices of equity securities of the smaller companies in which the Funds invest are generally more volatile than those of larger-cap
securities. In addition, because these securities tend to have significantly lower trading volumes than larger-cap securities,
the Funds may have difficulty selling holdings or may only be able to sell holdings at prices substantially lower than what Royce
believes they are worth. Therefore, each Fund may involve considerably more risk of loss and its returns may differ significantly
from funds investing in larger-cap companies or other asset classes. No assurance can be given that there will be net investment
income to distribute and/or that the Funds will achieve their investment goals.
Investment
in foreign securities involves risks that may not be encountered in U.S. investments, including adverse political, social,
economic, or other developments that are unique to a particular region or country. Prices of foreign securities in particular
countries or regions may, at times, move in a different direction and/or be more volatile than those of U.S. securities. Each
Fund’s investments are usually denominated in or tied to the currencies of the countries in which they are primarily
traded. Because the Funds do not intend to hedge their foreign currency exposure, the U.S. dollar value of the
Funds’ investments may be harmed by declines in the value of foreign currencies in relation to the U.S. dollar. This
may occur even if the value of the investment in the currency’s home country has not declined. These risk factors may
affect the prices of foreign securities issued by companies headquartered in developing countries more than those
headquartered in developed countries. For example, many developing countries have in the past experienced high rates of
inflation or sharply devalued their currencies against the U.S. dollar, thereby causing the value of investments in companies
located in those countries to decline. Transaction costs are often higher in developing countries, and there may be delays in
settlement procedures. To the extent that a Fund’s investments in the securities of international companies consists of
non-U.S. headquartered companies that trade on a U.S. exchange, some or all of the above stated risks of investing in
international companies may not apply.
Each
Fund may, from time to time, invest a significant portion of its assets in companies from a single sector or a limited
number of sectors. Such an investment approach may involve considerably more risk to investors than one that is more broadly
diversified across economic sectors because it may be more susceptible to corporate, economic, political, regulatory, or
market events that adversely affect the relevant sector(s). As of June 30, 2024, RGT invested a significant portion of its
assets in companies from the Industrials and Financials sectors, RMT invested a significant portion of its assets in
companies from the Information Technology and Industrials sectors, and RVT invested a significant portion of its assets in
companies from the Industrials sector. Industrials sector companies can be significantly affected by general economic trends,
commodity prices, legislation, government regulation and spending, import and export controls, worldwide competition, changes
in consumer sentiment and spending, and liability for environmental damage, depletion of resources, and mandated expenditures
for safety and pollution control. Companies from the Financials sector are subject to extensive government regulation, can be
significantly affected by changes in interest rates, the availability and cost of capital, the rate of corporate and consumer
debt defaults, and price competition, and can be subject to relatively rapid change due to government interventions in
capital, credit, and currency markets. Information Technology sector companies can be significantly affected by the
obsolescence of existing technology, short product cycles, falling prices and profits, competition from new market entrants,
and general economic conditions.
Royce’s
estimate of a company’s current worth may prove to be inaccurate, or this estimate may not be recognized by other investors,
which could lead to portfolio losses or underperformance relative to similar funds and/or a Fund’s benchmark index(es)
.. Securities in the Funds’ portfolios may not increase as much as the market as a whole and some securities may
continue to be undervalued for long periods of time or may never reach what Royce believes are their full market values.
Investments in a Fund are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
Environmental,
Social, and Governance (“ESG”) Investment Considerations and Risks
Royce
believes certain material ESG factors have the potential to contribute to a stock’s long-term performance, and
therefore Royce may evaluate potential ESG considerations when assessing a company’s financial condition and
profitability. This analysis allows Royce’s portfolio managers to determine whether a company’s ESG profile poses
a material financial risk or creates an opportunity for investment. The Funds’ investments in cash and cash equivalents
and any securities rehypothecation activities will not be assessed for ESG factors. Evaluation of ESG risk is only one
component of Royce’s assessment of potential investments and, as with its consideration of other factors and risks, may
not be a determinative factor in any
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Notes to
Performance and Other Important Information (continued)
decision
to purchase, sell, or hold a security. In addition, where ESG factors are considered, the weight given to ESG factors may
vary between Funds and across different types of investments, sectors, industries, regions, and issuers; and ESG factors and
weights considered may change over time. Royce may not assess every investment for ESG factors and, when it does, not every
ESG factor may be identified or evaluated. Royce’s assessment of a company’s ESG factors is subjective and may
differ from that of institutional investors, third-party service providers (e.g., ratings providers), and/or other funds,
and may be dependent on the availability of timely, complete, and accurate ESG data reports from issuers and/ or third-party
research providers, the timeliness, completeness, and accuracy of which is outside of Royce’s control. ESG factors are
often not uniformly measured or defined, which could impact Royce’s ability to evaluate a company. While Royce
views certain ESG factors as having the potential to contribute to a stock’s long-term performance, there is no
guarantee that such results will be achieved.
Pending
Portfolio Management Changes for the Funds
Effective
after the close of business on September 30, 2024, Charles M. Royce will no longer serve as a portfolio manager of RGT, RMT,
and RVT. The following additional portfolio management changes for the Funds will also take place as of such time:
| • | Steven
McBoyle will become the portfolio manager of RGT; |
| • | Jim
Stoeffel will be elevated to lead portfolio manager of RMT, with Brendan Hartman remaining
as portfolio manager, and Andrew Palen joining as assistant portfolio manager; and |
| • | Francis
Gannon will join Portfolio Managers Lauren Romeo, Steven McBoyle, Andrew Palen, and George
Necakov in managing RVT. |
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
Global Trust, Royce Micro-Cap Trust, and Royce Small-Cap Trust may each repurchase up to 5% of the issued and outstanding shares
of its respective common stock during the year ending December 31, 2024. 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 share’s then current net asset value.
Royce
Global Trust, Royce Micro-Cap Trust, and Royce Small-Cap 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
share’s then current net asset value. The timing and terms of any such offerings are within each Board’s discretion.
Annual
Certifications
As
required, the Funds have submitted to the New York Stock Exchange (“NYSE”) for the annual certification of the
Funds’ Chief Executive Officer that he is not aware of any violation of the NYSE’s 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, 2023, 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.royceinvest.com, by calling (800)
221-4268 (toll-free) and on the website of the Securities and Exchange Commission (“SEC”), at www.sec.gov.
Disclosure
of Portfolio Holdings
The
Funds’ complete portfolio holdings are also available on Exhibit F to Form N-PORT, which filings are made with the SEC
within 60 days of the end of the first and third fiscal quarters. The Funds’ Form N-PORT filings are available on the SEC’s
website at http://www.sec.gov.
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About
Royce Investment Partners |
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Contact
Us |
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Unparalleled Knowledge + Experience |
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GENERAL
INFORMATION |
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Pioneers in small-cap investing, with 50+ years |
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General Royce Funds information including an |
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of experience, depth of knowledge, and focus. |
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overview of our firm and Funds |
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(800) 221-4268 |
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Independent Thinking |
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COMPUTERSHARE |
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The confidence to go against consensus, the insight |
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Transfer Agent and Registrar |
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to uncover opportunities others might miss, and the |
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Speak with a representative about: |
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tenacity to stay the course through market cycles. |
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• Your account, transactions, and forms |
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(800) 426-5523 |
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Specialized Approaches |
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FINANCIAL ADVISORS AND BROKER-DEALERS |
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U.S., international, and global investment strategies |
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Speak with your regional Royce contact regarding: |
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that pursue approaches with different risk profiles. |
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• Information about our firm, strategies, and Funds |
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• Fund Materials |
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(800) 337-6923 |
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Unwavering Commitment |
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Our team of 19 portfolio managers has significant |
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personal investments in the strategies they manage. |
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CE-REP-0624 |
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Item
2. Code(s) of Ethics. Not applicable to this semi-annual report.
Item
3. Audit Committee Financial Expert. Not applicable to this semi-annual report.
Item
4. Principal Accountant Fees and Services. Not applicable to this semi-annual report.
Item
5. Audit Committee of Listed Registrants. Not applicable to this semi-annual report.
Item
6. Investments.
(a)
The Schedule of Investments is included as part of the Report to Stockholders included under Item 1 of this Form N-CSR.
(b)
Not Applicable.
Item
7. Financial Statements and Financial Highlights for Open-End Management Investment Companies. Not Applicable.
Item
8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies. Not Applicable.
Item
9. Proxy Disclosures for Open-End Management Investment Companies. Not Applicable.
Item
10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies. Not Applicable.
Item
11. Statement Regarding Basis for Approval of Investment Advisory Contract. This information is disclosed as part of the Report
to Stockholders included under Item 1 of this Form N-CSR.
Item
12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable to this
semi-annual report.
Item
13. Portfolio Managers of Closed-End Management Investment Companies. Not applicable to this semi-annual report.
Item
14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. No such purchases this
period.
Item
15. Submission of Matters to a Vote of Security Holders. Not Applicable.
Item
16. Controls and Procedures.
(a)
Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant’s 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 changes in Registrant’s internal control over financial reporting (as
defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that
has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial
reporting.
17.
Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
(a)(1)
Gross income from securities lending activities for the six-month period ended June 30, 2024, was $21.82.
(a)(2)
Compensation paid related to the securities lending program for the six-month period ended June 30, 2024, was $3.27. All compensation
was paid pursuant to a revenue split.
(a)(3)
Aggregate compensation paid related to the securities lending program for the six-month period ended June 30, 2024, was $3.27.
(a)(4)
Net income from securities lending activities for the six-month period ended June 30, 2024, was $18.55.
(b)
Please see the section entitled “Borrowing” in the Notes to the Financial Statements contained in the Report to Stockholders
included under Item 1 of this Form N-CSR.
Item
18. Recovery of Erroneously Awarded Compensation. Not Applicable.
Item
19. Exhibits. Attached hereto.
(a)(1)
Not applicable to this semi-annual report.
(a)(2)
Not applicable to this semi-annual report.
(a)(3)(a)
Separate certifications by the Registrant’s Principal Executive Officer and Principal Financial Officer as required by Rule
30a-2(a) under the Investment Company Act of 1940.
(a)(3)(b)
Not Applicable.
(b)
Separate certifications by the Registrant’s 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 MICRO-CAP TRUST, INC. |
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BY: |
/s/ Christopher
D. Clark |
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Christopher D. Clark |
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President |
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Date: August 8, 2024 |
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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 MICRO-CAP TRUST, INC. |
ROYCE MICRO-CAP TRUST, INC. |
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BY: |
/s/ Christopher
D. Clark |
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BY: |
/s/ Peter
K. Hoglund |
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Christopher D. Clark |
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Peter K. Hoglund |
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President |
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Chief Financial Officer |
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Date: August 8, 2024 |
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Date: August 8, 2024 |
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Item
19(a)(3):
CERTIFICATIONS
I,
Christopher D. Clark, certify that:
| 1. | I
have reviewed this report on Form N-CSR of Royce Micro-Cap 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
registrant’s other certifying officer(s) 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 registrant’s 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 registrant’s internal control over financial reporting
that occurred during the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and |
| 5. | The
registrant’s other certifying officer(s) and I have disclosed to the registrant’s
auditors and the audit committee of the registrant’s 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
registrant’s 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 registrant’s internal control over financial reporting. |
Date: August 8, 2024 |
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/s/ Christopher
D. Clark |
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Christopher D. Clark |
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President |
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Item
19(a)(3):
CERTIFICATIONS
I,
Peter K. Hoglund, certify that:
| 1. | I
have reviewed this report on Form N-CSR of Royce Micro-Cap 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
registrant’s other certifying officer(s) 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 registrant’s 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 registrant’s internal control over financial reporting
that occurred during the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and |
| 5. | The
registrant’s other certifying officer(s) and I have disclosed to the registrant’s
auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s
internal control over financial reporting. |
Date: August 8, 2024 |
|
|
|
|
|
/s/
Peter K. Hoglund |
|
|
Peter K. Hoglund |
|
|
Chief Financial Officer |
|
Item
19(b):
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350,
AS
ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
Name
of Issuer: ROYCE MICRO-CAP 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:
August 8, 2024 |
|
|
|
/s/ Christopher
D. Clark |
|
Christopher D. Clark |
|
President |
|
Item
19(b):
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350,
AS
ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
Name
of Issuer: ROYCE MICRO-CAP 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: August 8, 2024 |
|
|
|
/s/
Peter K. Hoglund |
|
Peter K. Hoglund |
|
Chief Financial Officer |
|
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