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: 811-05379 | ||
Name of Registrant: Royce Focus Trust, Inc. | ||
Address of Registrant: 1414 Avenue of the Americas | ||
New York, NY 10019 | ||
Name and address of agent for service: | John E. Denneen, Esquire | |
1414 Avenue of the Americas | ||
New York, NY 10019 | ||
Registrants telephone number, including area code: (212) 486-1445 | ||
Date of fiscal year end: December 31 | ||
Date of reporting period: January 1, 2008 June 30, 2008 | ||
Item 1. Reports to Stockholders |
Royce Value Trust Royce Micro-Cap Trust Royce Focus Trust |
SEMIANNUAL REVIEW AND REPORT TO STOCKHOLDERS |
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www.roycefunds.com |
Royce & Associates, LLC manages three closed-end funds: Royce Value Trust, the first small-cap
value closed-end fund offering; Royce Micro-Cap Trust, the only micro-cap closed-end
fund; and Royce Focus Trust, a closed-end fund that invests in a limited number of primarily
small-cap companies. |
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A closed-end fund is an investment company whose shares are listed and traded on a stock exchange. Like all
investment companies, including open-end mutual funds, the assets of a closed-end fund are professionally managed
in accordance with the investment objectives and policies approved by the funds Board of Directors. A closed-end
fund raises cash for investment by issuing a fixed number of shares through initial and other public offerings that may
include shelf offerings and periodic rights offerings. Proceeds from the offerings are invested in an actively managed
portfolio of securities. Investors wanting to buy or sell shares of a publicly traded closed-end fund after the offerings
must do so on a stock exchange, as with any publicly traded stock. This is in contrast to open-end mutual funds, in
which the fund sells and redeems its shares on a continuous basis. |
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A Closed-End Fund Offers Several Distinct Advantages Not Available From An Open-End Fund Structure | |||||
n | Since a closed-end fund does not issue redeemable securities
or offer its securities on a continuous basis, it does not need to
liquidate securities or hold uninvested assets to meet investor
demands for cash redemptions, as an open-end fund must. |
n | The fixed capital structure allows permanent leverage to be
employed as a means to enhance capital appreciation potential. |
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n | In a closed-end fund, not having to meet investor redemption
requests or invest at inopportune times is ideal for value
managers who attempt to buy stocks when prices are
depressed and sell securities when prices are high. |
n | Unlike Royces open-end funds, our closed-end funds are
able to distribute capital gains on a quarterly basis. Each of
the Funds has adopted a quarterly distribution policy for its
common stock. |
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n | A closed-end fund may invest more freely in less liquid
portfolio securities because it is not subject to potential
stockholder redemption demands. This is particularly
beneficial for Royce-managed closed-end funds, which invest
in small- and micro-cap securities. |
We believe that the closed-end fund structure is very suitable for
the long-term investor who understands the benefits of a stable
pool of capital. |
Why Dividend Reinvestment Is Important |
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A very important component of an investors 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 13, 15 and 17. For additional information on the Funds Distribution Reinvestment and Cash Purchase Options and the benefits for stockholders, please see page 19 or visit our website at www.roycefunds.com. |
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This page is not part of the 2008 Semiannual Report to Stockholders |
Table of Contents | ||
Semiannual Review | ||||||||||||||||||||
Performance Table | 2 | |||||||||||||||||||
Letter to Our Stockholders | 3 | |||||||||||||||||||
Small-Cap Market Cycle Performance | 10 | |||||||||||||||||||
Postscript: Freeway Jam | Inside Back Cover | |||||||||||||||||||
Semiannual Report to Stockholders | 11 | |||||||||||||||||||
For more than 30 years, we have used a value approach to invest in smaller-cap securities. We focus primarily on the quality of a companys balance sheet, its ability to generate free cash flow and other measures of profitability or sound financial condition. At times, we may also look at other factors, such as a companys unrecognized asset values, its future growth prospects or its turnaround potential following an earnings disappointment or other business difficulties. We then use these factors to assess the companys current worth, basing the assessment on either what we believe a knowledgeable buyer might pay to acquire the entire company, or what we think the value of the company should be in the stock market.
This page is not part of the 2008 Semiannual Report to Stockholders | 1
Performance Table | ||
NAV Average Annual Total Returns | Through June 30, 2008 |
Royce | Royce | Royce | |||||||||||||||
Value Trust | Micro-Cap Trust | Focus Trust | Russell 2000 | ||||||||||||||
Second Quarter 2008* | -1.12 | % | -1.21 | % | 8.03 | % | 0.58 | % | |||||||||
Year-to-Date 2008* | -11.67 | -11.70 | 2.28 | -9.37 | |||||||||||||
One-Year | -15.53 | -18.64 | -1.01 | -16.19 | |||||||||||||
Three-Year | 7.05 | 5.62 | 17.18 | 3.79 | |||||||||||||
Five-Year | 12.55 | 12.44 | 20.52 | 10.29 | |||||||||||||
10-Year | 9.49 | 9.70 | 12.83 | 5.53 | |||||||||||||
15-Year | 11.68 | n/a | n/a | 8.92 | |||||||||||||
20-Year | 12.06 | n/a | n/a | 9.48 | |||||||||||||
Since Inception | 11.65 | 12.08 | 13.73 | | |||||||||||||
Inception Date | 11/26/86 | 12/14/93 | 11/1/96** | |
Letter to Our Stockholders | |||
Ballad of a Thin Market | |||
The first six months of 2008 gave even the most serene investor cause for anxiety, if not
outright panic. First, a long list of worries ushered in the new year: the credit crisis, housing
bubble, subprime implosion, falling dollar, stumbling equity prices, and an economy in
either a full-blown recession or merely stalled. By the end of June, one could add to this
list rapidly rising oil prices and associated energy costs. And we would be remiss if we
did not also mention that smaller-company stock prices, after rallying from mid-
March through early June, spent most of that latter month swooning. Indeed,
share price declines throughout the market were so severe that on July 1 several
media outlets were trotting out comparisons to the 1930s, since June saw the
worst respective one-month losses for both the Dow Jones Industrial Average
and the S&P 500 since the Great Depression. |
Both domestically and internationally, we have seen a large number of what we believe are superb values emerge in our asset class. As is often the case with value investing, patience and discipline will be critical as we wait for the markets to rebound. |
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Each of the formidable problems besetting the economy and financial
markets remained unsolved as the year crept nervously to its midpoint, with little in the way of solutions on the immediate horizon. For anyone expecting good news
soon about these matters, we can offer only sympathy. It will probably take some time
before genuine improvement begins. We do not mean to imply that we like being where we
are, only that a measured look at the current landscape suggests that most equities will need |
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This page is not part of the 2008 Semiannual Report to Stockholders | 3 |
We are contrarians. To us, the term has always been synonymous with value investor. Our research screens include searches for well-run businesses whose stock prices have fallen, which typically leads us to companies, and often entire industries, that others have recently fled or are otherwise happy to ignore. Searching among the neglected and broken in the smaller-company world for new investment ideas not only helps us to find potential hidden gems, it also helps to lower portfolio risk. Companies whose stock prices have been beaten up by mass sell-offs often carry very low expectations (and price risk), especially once the smoke has cleared and former stockholders have moved on. Although theres always the risk of additional stock price erosion if a companys fortunes worsen or an industrys prospects grow dimmer, we try to use falling stock prices to our advantage; it is common for us to add to positions at such times (provided, of course, that our long-term outlook for the company remains positive). While our hope is that any subsequent drops in share prices are temporary, it is also why we look for companies Continued on page 6... |
Letter to Our Stockholders
to log a few more miles of volatility and poor short-term performance prior to a sustained
recovery. The fact that this is not surprising does not make the news any easier to bear.
What it does mean for smaller-company bargain-hunters such as ourselves is opportunity.
Both domestically and internationally, we have seen a large number of what we believe are
superb values emerge in our asset class. As is often the case with value investing, patience
and discipline will be critical as we wait for the markets to rebound. While we wait, it is worth noting that many observers, including some for whom we have enormous respect, are arguing that the events of the past yearparticularly the housing crisis, the credit crunch and the slowing economysignal the end of the era of low interest rates and low-to-moderate inflation that began following the 1982 recession and ran, with some notable interruptions, through the stock market peaks in 2007. We agree in large part with this assessment. It seems plain to us that we have entered a period that will be characterized by higher inflation and rising interest rates. However, there is little agreement as to how pronounced an effect these changes will have on the U.S. economy and stock markets. So these recent travails put all of us in the position of Dylans Mr. Jones: there is something happening here, but we dont know what it is. Our take is that the short term will be challenging at best, but that solid recoveries for both the economy and equities will come in the next three to five years. As is our habit, we first look at history for future direction. In a Royce Fund 1989 Annual Report, we recalled a full-blown recession that led to a robust economic expansion, an epic crash in 1987 and mini-crash in 1989, and a market that saw speculative binges in oil, precious metals and real estate as well as stocks. In other words, it seems to us that nothing about the 90s or the current decade is unprecedented. Subterranean Small-Cap Blues As might be expected in such a tumultuous period, the current market leadership question also looks unsettled. Domestic small-caps, as measured by the Russell 2000 index, finished the year-to-date period ended 6/30/08 with a loss of 9.4%, which was better than the large-cap S&P 500 index (-11.9%), the more tech-laden Nasdaq Composite (-13.6%) and the global MSCI EAFE (Europe, Australasia and Far East) index (-11.0%). Small-caps performance advantage over large-cap stocks thus far in 2008 was primarily attributable to its advantage in the second quarter, in particular its strong relative showing in May, when the Russell 2000 gained 4.6% versus 1.3% for the S&P 500. (Smaller stocks finished the second quarter just barely in positive territory, up 0.6% versus -2.7% for their large-cap peers.) The strong rally from the current small-cap trough on 3/10/08 was followed by an almost equally strong decline in June that collapsed share prices across the globe. During the month, the Russell 2000 lost 7.7%, the S&P 500 fell 8.4%, the Nasdaq Composite was down 9.1% and the MSCI EAFE declined 8.2%. The relative resilience of smaller companies during June was a welcome development. Although it did not decisively shift market leadership back to our chosen asset class, it certainly helped the Russell 2000 lose less during the highly volatile first half of 2008. |
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However, the S&P 500 was slightly ahead of its small-cap counterpart in the first quarter of
2008 (-9.5% versus -9.9%) and decidedly better in the second half of 2007. These
outperformance periods allowed the S&P 500 to stay ahead of the Russell 2000 for both
the one-year (-13.1% versus -16.2%) and three-year (+4.4% versus +3.8%) periods ended
6/30/08, while over longer-term periods, smaller stocks held serve; the Russell 2000 beat
the S&P 500 for the five-, 10- and 15-year periods ended 6/30/08. |
Although we once believed that large-cap
would have an advantage, we now believe that quality-oriented companies, regardless of market cap, should outperform and that smaller companies may provide an edge during short-term market upswings. We also suspect that smaller stocks should lead when share prices eventually show some sustained recovery. |
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Tangled up in Value
Small-cap value stocks, as measured by the Russell 2000 Value index, have felt more than their share of pain recently after dominating the Russell 2000 Growth index during the first seven years of the current decade. During the last full small-cap market cycle, which lasted from 3/9/00 until 7/13/07, the Russell 2000 Value index substantially outperformed the Russell 2000 Growth index (+189.5% versus -14.8%). The small-cap value index also outpaced the small-cap growth index from the small-cap market trough on 10/9/02 through 7/13/07, up 183.9% versus 169.7%. However, the small-cap growth index began to chip away at this lead during 2007, when it beat small-cap value in each of that years four quarters. Small-cap growth hung on to its advantage through the year-to-date period ended 6/30/08 (-8.9% versus -9.8% for the small-cap value index), as well as from the recent small-cap peak on 7/13/07. Results for both small-cap style indices were close from |
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This page is not part of the 2008 Semiannual Report to Stockholders | 5 |
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Letter to Our Stockholders |
7/13/07 through the new small-cap trough on 3/10/08, a period in which the Russell 2000
Value index fell 25.4% and its small-cap growth sibling lost 23.0%, reversing small-cap
values usual edge during downturns. From the small-cap market peak on 7/13/07 through
6/30/08, the small-cap growth index enjoyed a larger performance edge, falling 13.8%
versus a loss of 23.1% for the small-cap value index.
While neither index has been exempt from the markets troubles over the past year, investors may be wondering what became of small-cap values typical performance edge in down-market periods. We think that the current reversal is not entirely a surprise when one considers just how thoroughly the Russell 2000 Value index prevailed over the Russell 2000 Growth index both from the previous small-cap market peak on 3/9/00 and from the small-cap market trough on 10/9/02 through the end of the last full market cycle in July 2007. That small-cap value has been struggling of late is therefore not unexpected, both in the context of reversion to the mean and in the context of an indiscriminate bear market. Of course, just as we spent much of the first several years of the decade looking for high-quality bargains in areas usually populated by smaller-company growth managers, we have spent much of the last year scrutinizing those places where value managers are thought to roam. Our Back Pages Performance during the first half of 2008 for our three closed-end portfolios was decidedly
mixed on both an absolute and relative basis, with a particularly wide margin separating the
terrific NAV (net asset value) results of Royce Focus Trust and the less inspiring showings for
both Royce Value Trust and Royce Micro-Cap Trust (see the chart below). Each Fund looks
at a slightly different area of the smaller-company universe: Royce Focus Trust typically holds
fewer positions, most of which are selected from the upper tier of the smaller-company world,
where market capitalizations run from $500 million to $2.5 billion. Royce Value Trust and
Royce Micro-Cap Trust are more diversified and make most of their respective selections
from the micro- and small-cap area (market caps up to $2.5 billion) and micro-cap area (market caps up to $500 million). Thus, we view a certain divergence as a healthy |
6 | This page is not part of the 2008 Semiannual Report to Stockholders |
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The Times They Are A-Changin | ||
As much as the current bearish period has convinced us that major changes are working
their way through the market, it seems to us that there is a significant element to the story
that has not received as much attention, namely, the shift in the status of the U.S. in the
global economy. The U.S. has gone from being by far the most dominant force, perhaps the
only truly dominant force, to being first among a small group of leading players, which
includes the European Union, China, Japan and India. The first sign of this change can be
traced back to late 2000, when the U.S. dollar first began to decline versus the Euro, a
decline that has lasted more than seven years and counting. Other factors also
contributedthe bursting Internet bubble, the events of 9/11, a war that has made the
U.S. unpopular abroad, the surging economies of China and India, and our own recent
struggles with housing, credit and an overall stalled economy. Each is a piece of a larger
puzzle that shows the global economy undergoing major changes, and we
believe that the shifting role of the U.S. within this system is the critical event.
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Interestingly, the degree of inefficiency that we are seeing today in many international smaller companies reminds us of the small-cap market in the United States 15 to 20 years ago. |
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Our thinking was that the industry
was both significant and robust
enough to eventually recover, though
we set no specific time table as
to when. |
Letter to Our Stockholders scale, as international smaller companies follow their U.S. peers and potentially evolve into
a professional asset class. |
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DEVELOPED UNIVERSE BY MARKET CAPITALIZATION (EXCLUDING USA) June 30, 2008 | |||||||||||||
Market Cap Range (Millions) |
Number of Companies |
Total Market Cap (Billions) |
Percent of Companies |
Percent of Total Market Cap |
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$0 - $500 | 14,148 |
1,235 |
81 | % | 6 | % | |||||||
$500 - $1,000 | 1,106 |
798 |
6 | 4 | |||||||||
$1,000 - $2,000 | 753 |
1,078 |
4 | 5 | |||||||||
$2,000 - $2,500 | 232 |
518 |
1 | 2 | |||||||||
$2,500 - $5,000 | 507 |
1,810 |
3 | 8 | |||||||||
$5,000 and over | 755 |
16,844 |
4 | 76 | |||||||||
Total | 17,501 |
22,283 |
100 | 100 | |||||||||
Source: Reuters | |||||||||||||
8 | This page is not part of the 2008 Semiannual Report to Stockholders |
weighted average yield of the international small-cap universe was more than a percentage
point higher than its domestic equivalent, 3.5% versus 2.1%.
Most importantly, we have found that quality is a truly international concept, an idea that recognizes no borders. The same attributes that attract us to domestic companiesstrong balance sheets, an established record of earnings, the ability to generate free cash flow and excellent growth prospectsare readily found in international businesses. It really is a small world after all. Bringing It all Back Home
However promising the future for global opportunities in smaller companies, we think that
far too much uncertainty currently exists here at home for the equity markets to settle down
and establish a consistent, forward-looking direction. Although there have been plenty of
pleasant surprises, we do not think the profit picture is strong enough to outweigh the
anxiety that so many investors are feeling, especially about inflation. We see the next year or
so being a very volatile period as the market continues to sort out the effects of the housing
and credit bubbles and adjusts to a more inflationary environment. It seems plain to us that investors will therefore be looking for lower risk in the form of company quality, especially if the bond markets begin to struggle, as many seem to expect. We see the next year or two as a time to prepare and position our portfolios for a market and economic rebound that looks at least a year or two away. We think that three to five years from now, investors will be mostly pleased with returns because we expect the economy to recover and think that the market will see it coming first. So while smaller companies should be all right in the short term, we suspect that the real action lies further ahead. In any case, we keep doing what we have always donebuying what we think are high-quality smaller companies trading at attractive prices. A volatile stock market has historically been a boon to value investors, and the current period will hopefully be no exception. Certain areas continue to offer what look to us like compelling bargains, both here and abroad. In addition, some industries have been doing very well, so we have been taking gains in some cases, holding in others and even building positions in companies that are managing their growth most effectively. Wide divergence in sector performance is something that we anticipate will be with us for a while, so we see ample opportunity out there on a global scale. |
We see the next year or two as a time to prepare and position our portfolios for a market and economic rebound that looks at least a year or two away. We think that three to five years from now, investors will be mostly pleased with returns because we expect the economy to recover and think that the market will see it coming first. |
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Sincerely, |
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Charles M. Royce | W. Whitney George | Jack E. Fockler, Jr. | |||||
President | Vice President | Vice President | |||||
July 31, 2008 |
This page is not part of the 2008 Semiannual Report to Stockholders | 9 |
We believe strongly in the idea that a long-term investment perspective is crucial for determining the success of a particular investment
approach. Flourishing in an up market is wonderful. Surviving a bear market by losing less (or not at all) is at least as good. However, the true
test of a portfolios mettle is performance over full market cycle periods, which include both up and down market periods. We believe that
providing full market cycle results is more appropriate even than showing three- to five-year standardized returns because the latter periods
may not include the up and down phases that constitute a full market cycle.
Since the Russell 2000s inception on 12/31/78, valueas measured by the Russell 2000 Value Indexoutperformed growthas measured
by the Russell 2000 Growth Indexin six of the small-cap indexs eight full market cycles. The most recently concluded cycle, which ran
from 3/9/00 through 7/13/07, was the longest in the indexs history, and represented what we believe was a return to more historically typical
performance in that value provided a significant advantage during its downturn (3/9/0010/9/02) and for the full cycle. In contrast, the new
market cycle that began on 7/13/07 has so far favored growth over value, an unsurprising development when one considers how thoroughly
value dominated growth in the previous full cycle.
Peak-to-Peak For the full cycle, value provided a sizeable margin over growth, which finished the period with a loss. Each of our closed-end funds held a sizeable performance advantage over the Russell 2000 on both an NAV (net asset value) and market price basis. On an NAV basis, Royce Focus Trust (+264.2%) was our best performer by a wide margin, followed by Royce Micro-Cap Trust (+175.9%) and Royce Value Trust (+161.3%). Peak-to-Trough In the new cycles somewhat brief peak-to-trough period, growth was ahead of value, though its advantage was slight and neither style index managed to provide positive performance during the downdraft. All of our closed-end funds outperformed the Russell 2000 in this period, with Royce Focus Trust again providing the best (albeit negative) performance for the period, followed by Royce Value Trust. Trough-to-Current We would caution against reading too much into a period that has lasted only slightly longer than a calendar quarter, but it is still worth noting that growths return more than tripled that of the value index. Only Royce Focus Trust outpaced the Russell 2000 during this period, with Royce Value Trust and Royce Micro-Cap Trust both underperforming. Peak-to-Current During this nearly year-long period, both value and growth posted negative returns, though growth lost less by a comfortable margin. Once again, Royce Focus Trust distinguished itself. Both it and Royce Value Trust outperformed the Russell 2000, while Royce Micro-Cap Trust lagged the small-cap index. |
ROYCE FUNDS NAV TOTAL RETURNS VS. RUSSELL 2000 INDEX: MARKET CYCLE RESULTS |
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Peak-to- Peak 3/9/00- 7/13/07 |
Peak-to- Trough 7/13/07- 3/10/08 |
Trough-to- Current 3/10/08- 6/30/08 |
Peak-to- Current 7/13/07- 6/30/08 |
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Russell 2000 | 54.9 | % | -24.1 | % | 7.6 | % | -18.4 | % | ||||
Russell 2000 Value | 189.5 | -25.4 | 3.0 | -23.1 | ||||||||
Russell 2000 Growth | -14.8 | -23.0 | 11.9 | -13.8 | ||||||||
Royce Value Trust | 161.3 | -20.9 | 3.9 | -17.8 | ||||||||
Royce Micro-Cap Trust | 175.9 | -22.6 | 2.8 | -20.4 | ||||||||
Royce Focus Trust | 264.2 | -15.3 | 11.8 | -5.3 | ||||||||
10 | This page is not part of the 2008 Semiannual Report to Stockholders |
Table of Contents |
Semiannual Report to Stockholders | ||||||||||
Managers Discussions of Fund Performance | ||||||||||
Royce Value Trust | 12 | |||||||||
Royce Micro-Cap Trust | 14 | |||||||||
Royce Focus Trust | 16 | |||||||||
History Since Inception | 18 | |||||||||
Distribution Reinvestment and Cash Purchase Options | 19 | |||||||||
Schedules of Investments and Other Financial Statements | ||||||||||
Royce Value Trust | 21 | |||||||||
Royce Micro-Cap Trust | 36 | |||||||||
Royce Focus Trust | 51 | |||||||||
Notes to Performance and Other Important Information | 60 | |||||||||
Directors and Officers | 61 | |||||||||
Board Approval of Investment Advisory Agreements | 62 | |||||||||
2008 Semiannual Report to Stockholders | 11 |
AVERAGE ANNUAL NAV TOTAL RETURNS Through 6/30/08 |
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Second Quarter 2008* | -1.12 | % | |||||||
Year-to-Date 2008* | -11.67 | ||||||||
One-Year | -15.53 | ||||||||
Three-Year | 7.05 | ||||||||
Five-Year | 12.55 | ||||||||
10-Year | 9.49 | ||||||||
15-Year | 11.68 | ||||||||
20-Year | 12.06 | ||||||||
Since Inception (11/26/86) | 11.65 | ||||||||
* Not annualized | |||||||||
CALENDAR YEAR NAV TOTAL RETURNS | |||||||||
Year | RVT | Year | RVT | ||||||
2007 | 5.0 | % | 1998 | 3.3 | % | ||||
2006 | 19.5 | 1997 | 27.5 | ||||||
2005 | 8.4 | 1996 | 15.5 | ||||||
2004 | 21.4 | 1995 | 21.6 | ||||||
2003 | 40.8 | 1994 | 0.1 | ||||||
2002 | -15.6 | 1993 | 17.3 | ||||||
2001 | 15.2 | 1992 | 19.3 | ||||||
2000 | 16.6 | 1991 | 38.4 | ||||||
1999 | 11.7 | 1990 | -13.8 | ||||||
TOP 10 POSITIONS % of Net Assets Applicable to Common Stockholders |
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AllianceBernstein Holding L.P. | 1.8 | % | |||||||
Ritchie Bros. Auctioneers | 1.5 | ||||||||
Lincoln Electric Holdings | 1.4 | ||||||||
Ash Grove Cement Cl. B | 1.2 | ||||||||
Nordson Corporation | 1.2 | ||||||||
SEACOR Holdings | 1.1 | ||||||||
PAREXEL International | 1.0 | ||||||||
Sothebys | 1.0 | ||||||||
Woodward Governor | 1.0 | ||||||||
Forward Air | 0.9 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets Applicable to Common Stockholders |
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Technology | 21.3 | % | |||||||
Industrial Products | 21.0 | ||||||||
Industrial Services | 16.3 | ||||||||
Financial Intermediaries | 13.1 | ||||||||
Financial Services | 12.3 | ||||||||
Natural Resources | 10.7 | ||||||||
Health | 6.2 | ||||||||
Consumer Products | 5.8 | ||||||||
Consumer Services | 3.9 | ||||||||
Diversified Investment Companies | 0.5 | ||||||||
Utilities | 0.2 | ||||||||
Miscellaneous | 2.6 | ||||||||
Bond and Preferred Stocks | 0.4 | ||||||||
Cash and Cash Equivalents | 7.3 | ||||||||
12 | 2008 Semiannual Report to Stockholders
FUND INFORMATION AND | ||||||||||||||
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization* | $1,063 million | |||||||||||||
Weighted Average P/E Ratio** | 15.2x | |||||||||||||
Weighted Average P/B Ratio | 1.7x | |||||||||||||
Weighted Average Portfolio Yield | 1.5% | |||||||||||||
Fund Net Assets | $1,238 million | |||||||||||||
Net Leverage | 14% | |||||||||||||
Turnover Rate | 14% | |||||||||||||
Symbol | ||||||||||||||
Market Price |
RVT | |||||||||||||
NAV |
XRVTX | |||||||||||||
CAPITAL STRUCTURE Publicly Traded Securities Outstanding at 6/30/08 at NAV or Liquidation Value |
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61.8 million shares of Common Stock |
$1,018 million | |||||||||||||
5.90% Cumulative Preferred Stock |
$220 million | |||||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/08 |
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Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RVT (NAV) | 12.55 | % | 14.05 | 0.89 | ||||||||||
Russell 2000 | 10.29 | 14.38 | 0.72 | |||||||||||
2008 Semiannual Report to Stockholders | 13
AVERAGE ANNUAL NAV TOTAL RETURNS
Through 6/30/08 |
|||||||||
Second Quarter 2008* | -1.21 | % | |||||||
Year-to-Date 2008* | -11.70 | ||||||||
One-Year | -18.64 | ||||||||
Three-Year | 5.62 | ||||||||
Five-Year | 12.44 | ||||||||
10-Year | 9.70 | ||||||||
Since Inception (12/14/93) | 12.08 | ||||||||
*Not annualized | |||||||||
CALENDAR YEAR NAV TOTAL RETURNS | |||||||||
Year | RMT | Year | RMT | ||||||
2007 | 0.6 | % | 2000 | 10.9 | % | ||||
2006 | 22.5 | 1999 | 12.7 | ||||||
2005 | 6.8 | 1998 | -4.1 | ||||||
2004 | 18.7 | 1997 | 27.1 | ||||||
2003 | 55.5 | 1996 | 16.6 | ||||||
2002 | -13.8 | 1995 | 22.9 | ||||||
2001 | 23.4 | 1994 | 5.0 | ||||||
TOP 10 POSITIONS
% of Net Assets Applicable to Common Stockholders |
|||||||||
Pegasystems | 1.7 | % | |||||||
ASA | 1.5 | ||||||||
Peerless Manufacturing | 1.4 | ||||||||
Seneca Foods Cl. B | 1.3 | ||||||||
Exponent | 1.3 | ||||||||
Dril-Quip | 1.2 | ||||||||
Pason Systems | 1.2 | ||||||||
GulfMark Offshore | 1.1 | ||||||||
Sapient Corporation | 1.1 | ||||||||
Weyco Group | 1.1 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets Applicable to Common Stockholders |
|||||||||
Technology | 22.6 | % | |||||||
Industrial Products | 17.4 | ||||||||
Industrial Services | 15.0 | ||||||||
Health | 14.5 | ||||||||
Natural Resources | 13.9 | ||||||||
Financial Intermediaries | 11.0 | ||||||||
Consumer Products | 7.6 | ||||||||
Financial Services | 6.4 | ||||||||
Consumer Services | 5.8 | ||||||||
Diversified Investment Companies | 2.4 | ||||||||
Miscellaneous | 2.6 | ||||||||
Preferred Stock | 0.5 | ||||||||
Cash and Cash Equivalents | 1.3 | ||||||||
14 | 2008 Semiannual Report to Stockholders
FUND INFORMATION AND | ||||||||||||||
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization* | $283 million | |||||||||||||
Weighted Average P/E Ratio** | 16.2x | |||||||||||||
Weighted Average P/B Ratio | 1.4x | |||||||||||||
Weighted Average Portfolio Yield | 1.0% | |||||||||||||
Fund Net Assets | $345 million | |||||||||||||
Net Leverage | 20% | |||||||||||||
Turnover Rate | 41% | |||||||||||||
Symbol | ||||||||||||||
Market Price |
RMT | |||||||||||||
NAV |
XOTCX | |||||||||||||
CAPITAL STRUCTURE
Publicly Traded Securities Outstanding at 6/30/08 at NAV or Liquidation Value |
||||||||||||||
25.4 million shares of Common Stock |
$285 million | |||||||||||||
6.00% Cumulative Preferred Stock |
$60 million | |||||||||||||
RISK/RETURN COMPARISON
Five-Year Period Ended 6/30/08 |
||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
RMT (NAV) | 12.44 | % | 14.16 | 0.88 | ||||||||||
Russell 2000 | 10.29 | 14.38 | 0.72 | |||||||||||
2008 Semiannual Report to Stockholders | 15
AVERAGE ANNUAL NAV TOTAL RETURNS
Through 6/30/08 |
|||||||||
Second Quarter 2008* | 8.03 | % | |||||||
Year-to-Date 2008* | 2.28 | ||||||||
One-Year | -1.01 | ||||||||
Three-Year | 17.18 | ||||||||
Five-Year | 20.52 | ||||||||
10-Year | 12.83 | ||||||||
Since Inception (11/1/96) | 13.73 | ||||||||
* Not annualized | |||||||||
Royce & Associates assumed investment management
responsibility for the Fund on 11/1/96. |
|||||||||
CALENDAR YEAR NAV TOTAL RETURNS | |||||||||
Year | FUND | Year | FUND | ||||||
2007 | 12.2 | % | 2001 | 10.0 | % | ||||
2006 | 16.3 | 2000 | 20.9 | ||||||
2005 | 13.3 | 1999 | 8.7 | ||||||
2004 | 29.2 | 1998 | -6.8 | ||||||
2003 | 54.3 | 1997 | 20.5 | ||||||
2002 | -12.5 | ||||||||
TOP 10 POSITIONS | |||||||||
% of Net Assets Applicable | |||||||||
to Common Stockholders | |||||||||
Australian Government 7.50% Bond | 5.8 | % | |||||||
Kennedy-Wilson Conv. | 5.5 | ||||||||
Reliance Steel & Aluminum | 4.6 | ||||||||
Unit Corporation | 4.5 | ||||||||
Sims Group ADR | 3.6 | ||||||||
Ensign Energy Services | 3.3 | ||||||||
Knight Capital Group Cl. A | 3.2 | ||||||||
Trican Well Service | 3.0 | ||||||||
Gammon Gold | 2.9 | ||||||||
Lincoln Electric Holdings | 2.8 | ||||||||
PORTFOLIO SECTOR BREAKDOWN % of Net Assets Applicable to Common Stockholders |
|||||||||
Natural Resources | 29.2 | % | |||||||
Industrial Products | 24.3 | ||||||||
Technology | 11.5 | ||||||||
Consumer Products | 10.0 | ||||||||
Industrial Services | 8.5 | ||||||||
Financial Intermediaries | 6.2 | ||||||||
Health | 3.4 | ||||||||
Financial Services | 2.3 | ||||||||
Bond and Preferred Stock | 11.1 | ||||||||
Cash and Cash Equivalents | 6.3 | ||||||||
16 | 2008 Semiannual Report to Stockholders
FUND INFORMATION AND | ||||||||||||||
PORTFOLIO DIAGNOSTICS | ||||||||||||||
Average Market Capitalization* | $1,386 million | |||||||||||||
Weighted Average P/E Ratio** | 13.0x | |||||||||||||
Weighted Average P/B Ratio | 2.2x | |||||||||||||
Weighted Average Portfolio Yield | 1.4% | |||||||||||||
Fund Net Assets | $193 million | |||||||||||||
Net Leverage | 9% | |||||||||||||
Turnover Rate | 62% | |||||||||||||
Symbol | ||||||||||||||
Market Price |
FUND | |||||||||||||
NAV |
XFUNX | |||||||||||||
CAPITAL STRUCTURE Publicly Traded Securities Outstanding at 6/30/08 at NAV or Liquidation Value |
||||||||||||||
18.9 million shares of Common Stock | $168 million | |||||||||||||
6.00% Cumulative Preferred Stock | $25 million | |||||||||||||
RISK/RETURN COMPARISON Five-Year Period Ended 6/30/08 |
||||||||||||||
Average Annual | Standard | Return | ||||||||||||
Total Return | Deviation | Efficiency* | ||||||||||||
FUND (NAV) | 20.52 | % | 15.16 | 1.35 | ||||||||||
Russell 2000 | 10.29 | 14.38 | 0.72 | |||||||||||
2008 Semiannual Report to Stockholders | 17
History Since Inception
The following table details the share accumulations by an initial investor in the Funds who reinvested all distributions (including fractional shares) 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.
Amount | Purchase | NAV | Market | ||||||||||||||||||
History | Invested | Price* | Shares | Value** | Value** | ||||||||||||||||
Royce Value Trust | |||||||||||||||||||||
11/26/86 | Initial Purchase | $ | 10,000 | $ | 10.000 | 1,000 | $ | 9,280 | $ | 10,000 | |||||||||||
10/15/87 | Distribution $0.30 | 7.000 | 42 | ||||||||||||||||||
12/31/87 | Distribution $0.22 | 7.125 | 32 | 8,578 | 7,250 | ||||||||||||||||
12/27/88 | Distribution $0.51 | 8.625 | 63 | 10,529 | 9,238 | ||||||||||||||||
9/22/89 | Rights Offering | 405 | 9.000 | 45 | |||||||||||||||||
12/29/89 | Distribution $0.52 | 9.125 | 67 | 12,942 | 11,866 | ||||||||||||||||
9/24/90 | Rights Offering | 457 | 7.375 | 62 | |||||||||||||||||
12/31/90 | Distribution $0.32 | 8.000 | 52 | 11,713 | 11,074 | ||||||||||||||||
9/23/91 | Rights Offering | 638 | 9.375 | 68 | |||||||||||||||||
12/31/91 | Distribution $0.61 | 10.625 | 82 | 17,919 | 15,697 | ||||||||||||||||
9/25/92 | Rights Offering | 825 | 11.000 | 75 | |||||||||||||||||
12/31/92 | Distribution $0.90 | 12.500 | 114 | 21,999 | 20,874 | ||||||||||||||||
9/27/93 | Rights Offering | 1,469 | 13.000 | 113 | |||||||||||||||||
12/31/93 | Distribution $1.15 | 13.000 | 160 | 26,603 | 25,428 | ||||||||||||||||
10/28/94 | Rights Offering | 1,103 | 11.250 | 98 | |||||||||||||||||
12/19/94 | Distribution $1.05 | 11.375 | 191 | 27,939 | 24,905 | ||||||||||||||||
11/3/95 | Rights Offering | 1,425 | 12.500 | 114 | |||||||||||||||||
12/7/95 | Distribution $1.29 | 12.125 | 253 | 35,676 | 31,243 | ||||||||||||||||
12/6/96 | Distribution $1.15 | 12.250 | 247 | 41,213 | 36,335 | ||||||||||||||||
1997 | Annual distribution total $1.21 | 15.374 | 230 | 52,556 | 46,814 | ||||||||||||||||
1998 | Annual distribution total $1.54 | 14.311 | 347 | 54,313 | 47,506 | ||||||||||||||||
1999 | Annual distribution total $1.37 | 12.616 | 391 | 60,653 | 50,239 | ||||||||||||||||
2000 | Annual distribution total $1.48 | 13.972 | 424 | 70,711 | 61,648 | ||||||||||||||||
2001 | Annual distribution total $1.49 | 15.072 | 437 | 81,478 | 73,994 | ||||||||||||||||
2002 | Annual distribution total $1.51 | 14.903 | 494 | 68,770 | 68,927 | ||||||||||||||||
1/28/03 | Rights Offering | 5,600 | 10.770 | 520 | |||||||||||||||||
2003 | Annual distribution total $1.30 | 14.582 | 516 | 106,216 | 107,339 | ||||||||||||||||
2004 | Annual distribution total $1.55 | 17.604 | 568 | 128,955 | 139,094 | ||||||||||||||||
2005 | Annual distribution total $1.61 | 18.739 | 604 | 139,808 | 148,773 | ||||||||||||||||
2006 | Annual distribution total $1.78 | 19.696 | 693 | 167,063 | 179,945 | ||||||||||||||||
2007 | Annual distribution total $1.85 | 19.687 | 787 | 175,469 | 165,158 | ||||||||||||||||
2008 | Year-to-date distribution total $0.92 | 16.116 | 515 | ||||||||||||||||||
6/30/08 | $ | 21,922 | 9,404 | $ | 154,978 | $ | 147,455 | ||||||||||||||
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 | Year-to-date distribution total $0.64 | 10.837 | 230 | ||||||||||||||||||
6/30/08 | $ | 8,900 | 4,066 | $ | 45,661 | $ | 42,164 | ||||||||||||||
Royce Focus Trust | |||||||||||||||||||||
10/31/96 | Initial Purchase | $ | 4,375 | $ | 4.375 | 1,000 | $ | 5,280 | $ | 4,375 | |||||||||||
12/31/96 | 5,520 | 4,594 | |||||||||||||||||||
12/5/97 | Distribution $0.53 | 5.250 | 101 | 6,650 | 5,574 | ||||||||||||||||
12/31/98 | 6,199 | 5,367 | |||||||||||||||||||
12/6/99 | Distribution $0.145 | 4.750 | 34 | 6,742 | 5,356 | ||||||||||||||||
12/6/00 | Distribution $0.34 | 5.563 | 69 | 8,151 | 6,848 | ||||||||||||||||
12/6/01 | Distribution $0.14 | 6.010 | 28 | 8,969 | 8,193 | ||||||||||||||||
12/6/02 | Distribution $0.09 | 5.640 | 19 | 7,844 | 6,956 | ||||||||||||||||
12/8/03 | Distribution $0.62 | 8.250 | 94 | 12,105 | 11,406 | ||||||||||||||||
2004 | Annual distribution total $1.74 | 9.325 | 259 | 15,639 | 16,794 | ||||||||||||||||
5/6/05 | Rights offering | 2,669 | 8.340 | 320 | |||||||||||||||||
2005 | Annual distribution total $1.21 | 9.470 | 249 | 21,208 | 20,709 | ||||||||||||||||
2006 | Annual distribution total $1.57 | 9.860 | 357 | 24,668 | 27,020 | ||||||||||||||||
2007 | Annual distribution total $2.01 | 9.159 | 573 | 27,679 | 27,834 | ||||||||||||||||
2008 | Year-to-date distribution total $0.25 | 8.497 | 92 | ||||||||||||||||||
6/30/08 | $ | 7,044 | 3,195 | $ | 28,308 | $ | 28,212 | ||||||||||||||
Distribution Reinvestment and Cash Purchase Options |
Why should I reinvest my distributions?
How does the reinvestment of distributions from the
Royce closed-end funds work? How does this apply to registered stockholders?
What if my shares are held by a brokerage firm or a bank? What other features are available for
registered stockholders? |
How do the Plans work for registered stockholders? How can I get more information on the Plans? |
2008 Semiannual Report to Stockholders | 19 |
This Page Left Intentionally Blank
Royce Value Trust | June 30, 2008 (unaudited) |
Schedule of Investments |
SHARES | VALUE | ||||
COMMON STOCKS 113.9% | |||||
Consumer Products 5.8% | |||||
Apparel, Shoes and Accessories - 1.8% | |||||
Columbia Sportswear |
34,600 | $ | 1,271,550 | ||
605,560 | 2,228,461 | ||||
K-Swiss Cl. A |
160,000 | 2,352,000 | |||
Lazare Kaplan International c |
103,600 | 922,040 | |||
Polo Ralph Lauren |
17,500 | 1,098,650 | |||
17,500 | 286,125 | ||||
Tods |
35,000 | 1,922,641 | |||
Weyco Group |
307,992 | 8,171,027 | |||
18,252,494 | |||||
Collectibles - 0.5% | |||||
175,000 | 1,456,000 | ||||
Russ Berrie & Company c |
417,000 | 3,323,490 | |||
4,779,490 | |||||
Consumer Electronics - 0.8% | |||||
Dolby Laboratories Cl. A c |
153,900 | 6,202,170 | |||
64,100 | 2,007,612 | ||||
8,209,782 | |||||
Food/Beverage/Tobacco - 0.6% | |||||
B&G Foods (Units) |
120,100 | 2,041,700 | |||
B&G Foods Cl. A |
51,300 | 479,142 | |||
Hershey Creamery |
709 | 1,488,900 | |||
80,000 | 1,668,000 | ||||
13,251 | 283,174 | ||||
5,960,916 | |||||
Health, Beauty and Nutrition - 0.0% | |||||
Nutraceutical International c |
22,800 | 273,600 | |||
Home Furnishing and Appliances - 1.1% | |||||
Aaron Rents |
4,500 | 100,485 | |||
American Woodmark |
123,335 | 2,606,069 | |||
Ekornes |
110,000 | 1,619,807 | |||
Ethan Allen Interiors |
65,800 | 1,618,680 | |||
Kimball International Cl. B |
286,180 | 2,369,570 | |||
La-Z-Boy |
68,200 | 521,730 | |||
25,000 | 1,602,500 | ||||
Nice |
215,000 | 953,743 | |||
10,000 | 209,000 | ||||
11,601,584 | |||||
Sports and Recreation - 1.0% | |||||
Beneteau |
81,000 | 1,773,950 | |||
47,700 | 101,124 | ||||
RC2 Corporation c |
132,600 | 2,461,056 | |||
Sturm, Ruger & Company c |
272,900 | 1,926,674 | |||
Thor Industries |
110,900 | 2,357,734 | |||
Winnebago Industries |
97,500 | 993,525 | |||
9,614,063 | |||||
Total (Cost $57,925,364) | 58,691,929 | ||||
Consumer Services 3.9% | |||||
Direct Marketing - 0.3% | |||||
Manutan International |
8,945 | 647,839 |
SHARES | VALUE | ||||
Consumer Services (continued) | |||||
Direct Marketing (continued) | |||||
Takkt |
130,000 | $ | 2,290,354 | ||
2,938,193 | |||||
Leisure and Entertainment - 0.0% | |||||
15,000 | 74,100 | ||||
Media and Broadcasting - 0.1% | |||||
23,000 | 271,400 | ||||
36,600 | 827,526 | ||||
1,098,926 | |||||
Online Commerce - 0.1% | |||||
CryptoLogic |
200 | 2,872 | |||
FTD Group b |
55,000 | 733,150 | |||
736,022 | |||||
Restaurants and Lodgings - 0.6% | |||||
3,300 | 20,658 | ||||
116,000 | 3,249,160 | ||||
Steak n Shake c |
198,000 | 1,253,340 | |||
Tim Hortons |
65,000 | 1,864,850 | |||
6,388,008 | |||||
Retail Stores - 2.8% | |||||
65,400 | 1,171,968 | ||||
AnnTaylor Stores c |
50,000 | 1,198,000 | |||
Bulgari |
322,000 | 3,252,233 | |||
120,000 | 1,702,800 | ||||
22,800 | 104,652 | ||||
Childrens Place Retail Stores c |
13,670 | 493,487 | |||
287,280 | 3,843,806 | ||||
Fielmann |
22,000 | 1,607,893 | |||
Gander Mountain c |
53,300 | 196,677 | |||
Lewis Group |
518,000 | 2,183,142 | |||
Pier 1 Imports c |
626,200 | 2,154,128 | |||
182,800 | 824,428 | ||||
Tiffany & Co. |
158,700 | 6,467,025 | |||
21,200 | 615,648 | ||||
27,000 | 842,130 | ||||
West Marine c |
131,100 | 537,510 | |||
Wet Seal (The) Cl. A c |
162,000 | 772,740 | |||
27,968,267 | |||||
Total (Cost $44,701,966) | 39,203,516 | ||||
Diversified Investment Companies 0.5% | |||||
Closed-End Funds - 0.5% | |||||
Central Fund of Canada Cl. A |
211,500 | 2,738,925 | |||
Kohlberg Capital |
209,884 | 2,098,840 | |||
Total (Cost $4,642,086) | 4,837,765 | ||||
Financial Intermediaries 13.1% | |||||
Banking - 5.5% | |||||
Abigail Adams National Bancorp |
160,500 | 1,500,675 | |||
Ameriana Bancorp |
40,000 | 380,000 | |||
Banca Finnat Euramerica |
500,000 | 577,036 | |||
Bank of N.T. Butterfield & Son |
446,875 | 6,613,750 | |||
Bank Sarasin & Cie Cl. B |
15,000 | 674,710 | |||
Banque Privee Edmond de Rothschild |
17 | 632,372 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | | | 21 |
Schedule of Investments |
SHARES | VALUE | ||||
Financial Intermediaries (continued) | |||||
Banking (continued) | |||||
BB Holdings c |
289,400 | $ | 1,311,404 | ||
BOK Financial |
164,227 | 8,777,933 | |||
Boston Private Financial Holdings |
203,000 | 1,151,010 | |||
Cadence Financial |
40,300 | 436,449 | |||
Center Bancorp |
66,811 | 584,596 | |||
Centrue Financial |
82,200 | 895,980 | |||
CFS Bancorp |
265,000 | 3,124,350 | |||
CNB Financial |
11,116 | 157,180 | |||
Commercial National Financial |
54,900 | 818,010 | |||
Farmers & Merchants Bank of Long |
|||||
Beach |
1,200 | 5,760,000 | |||
Fauquier Bankshares |
160,800 | 2,588,880 | |||
Hawthorn Bancshares |
44,400 | 1,121,988 | |||
Heritage Financial |
20,615 | 326,748 | |||
HopFed Bancorp |
112,500 | 1,549,125 | |||
Jefferson Bancshares |
32,226 | 295,835 | |||
Kearny Financial |
60,862 | 669,482 | |||
Mechanics Bank (The) |
200 | 3,410,000 | |||
Nexity Financial c |
109,999 | 511,495 | |||
Old Point Financial |
25,000 | 445,000 | |||
Peapack-Gladstone Financial |
10,000 | 219,700 | |||
Peoples Community Bancorp c |
179,310 | 408,827 | |||
Timberland Bancorp a |
469,200 | 3,762,984 | |||
Tompkins Financial |
17,545 | 652,674 | |||
Vontobel Holding |
15,600 | 532,955 | |||
W Holding Company |
935,400 | 795,090 | |||
Whitney Holding |
41,500 | 759,450 | |||
Wilber Corporation (The) |
103,900 | 880,033 | |||
Wilmington Trust |
131,000 | 3,463,640 | |||
Yadkin Valley Financial |
3,800 | 45,410 | |||
55,834,771 | |||||
Insurance - 4.5% | |||||
Alleghany Corporation c |
16,644 | 5,526,640 | |||
64,751 | 2,173,043 | ||||
Aspen Insurance Holdings |
64,000 | 1,514,880 | |||
130,600 | 1,650,784 | ||||
7,000 | 612,500 | ||||
Erie Indemnity Cl. A |
91,500 | 4,222,725 | |||
First American |
20,000 | 528,000 | |||
87,200 | 1,993,392 | ||||
230,000 | 2,371,300 | ||||
Independence Holding |
317,658 | 3,103,519 | |||
IPC Holdings |
27,000 | 716,850 | |||
LandAmerica Financial Group |
10,000 | 221,900 | |||
Leucadia National |
34,940 | 1,640,084 | |||
Markel Corporation c |
11,100 | 4,073,700 | |||
Montpelier Re Holdings |
66,000 | 973,500 | |||
NYMAGIC |
232,200 | 4,448,952 | |||
Old Republic International |
20,000 | 236,800 | |||
ProAssurance Corporation c |
33,070 | 1,590,998 | |||
RLI |
99,724 | 4,933,346 | |||
Stewart Information Services |
100,000 | 1,934,000 | |||
Wesco Financial |
4,750 | 1,814,500 | |||
46,281,413 | |||||
SHARES | VALUE | ||||
Financial Intermediaries (continued) | |||||
Real Estate Investment Trusts - 0.1% | |||||
Gladstone Commercial |
34,700 | $ | 601,351 | ||
Securities Brokers - 2.4% | |||||
200,100 | 400,200 | ||||
Close Brothers Group |
33,000 | 363,493 | |||
32,000 | 247,040 | ||||
DundeeWealth |
33,300 | 425,516 | |||
75,000 | 235,500 | ||||
Egyptian Financial Group-Hermes Holding |
|||||
GDR |
28,000 | 504,000 | |||
Evercore Partners Cl. A |
308,500 | 2,930,750 | |||
HQ |
26,000 | 429,559 | |||
Investcorp Bank GDR c |
22,000 | 561,000 | |||
30,400 | 1,017,184 | ||||
70,058 | 1,441,794 | ||||
137,000 | 969,960 | ||||
Lazard Cl. A |
176,700 | 6,034,305 | |||
145,500 | 918,105 | ||||
Oppenheimer Holdings Cl. A |
30,000 | 847,800 | |||
optionsXpress Holdings |
53,000 | 1,184,020 | |||
50,000 | 597,500 | ||||
Phatra Securities |
575,000 | 524,525 | |||
105,700 | 3,100,181 | ||||
Shinko Securities |
464,300 | 1,368,611 | |||
24,101,043 | |||||
Securities Exchanges - 0.0% | |||||
MarketAxess Holdings c |
67,000 | 506,520 | |||
Other Financial Intermediaries - 0.6% | |||||
KKR Financial Holdings |
481,404 | 5,054,742 | |||
KKR Private Equity Investors L.P. |
105,000 | 1,338,750 | |||
6,393,492 | |||||
Total (Cost $140,006,502) | 133,718,590 | ||||
Financial Services 12.3% | |||||
Diversified Financial Services - 0.6% | |||||
18,870 | 162,660 | ||||
Centerline Holding Company |
59,600 | 99,532 | |||
Discover Financial Services |
10,000 | 131,700 | |||
88,000 | 777,040 | ||||
Municipal Mortgage & Equityb |
40,300 | 118,885 | |||
173,600 | 807,240 | ||||
133,700 | 4,501,679 | ||||
6,598,736 | |||||
Information and Processing - 1.7% | |||||
Broadridge Financial Solutions |
30,000 | 631,500 | |||
Global Payments |
68,500 | 3,192,100 | |||
Interactive Data |
134,300 | 3,374,959 | |||
MoneyGram International c |
428,500 | 386,507 | |||
30,000 | 1,088,700 | ||||
Paychex |
30,000 | 938,400 | |||
14,420 | 135,692 | ||||
SEI Investments |
306,800 | 7,215,936 | |||
16,963,794 | |||||
Insurance Brokers - 0.9% | |||||
Brown & Brown |
206,800 | 3,596,252 |
22 | | | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
SHARES | VALUE | ||||
Financial Services (continued) | |||||
Insurance Brokers (continued) | |||||
Crawford & Company Cl. A c |
289,200 | $ | 1,807,500 | ||
162,300 | 1,296,777 | ||||
Gallagher (Arthur J.) & Co. |
111,200 | 2,679,920 | |||
9,380,449 | |||||
Investment Management - 7.8% | |||||
A.F.P. Provida ADR |
16,100 | 411,033 | |||
28,500 | 2,566,710 | ||||
AllianceBernstein Holding L.P. |
333,100 | 18,213,908 | |||
Anima |
736,402 | 1,669,578 | |||
AP Alternative Assets L.P. |
315,600 | 3,471,600 | |||
Ashmore Group |
80,000 | 344,988 | |||
Australian Wealth Management |
291,000 | 361,262 | |||
Azimut Holding |
53,000 | 466,880 | |||
227,050 | 467,723 | ||||
Calamos Asset Management Cl. A |
45,000 | 766,350 | |||
Candover Investments |
10,500 | 412,432 | |||
CapMan Cl. B |
632,000 | 2,487,633 | |||
Cockleshell c |
337,644 | 366,532 | |||
Coronation Fund Managers |
496,000 | 288,225 | |||
Deutsche Beteiligungs |
95,000 | 2,402,140 | |||
Eaton Vance |
172,800 | 6,870,528 | |||
Equity Trustees |
23,477 | 490,636 | |||
F&C Asset Management |
210,000 | 615,930 | |||
Federated Investors Cl. B |
145,700 | 5,014,994 | |||
Fiducian Portfolio Services |
227,000 | 500,511 | |||
GAMCO Investors Cl. A |
133,600 | 6,629,232 | |||
GIMV |
20,000 | 1,319,390 | |||
GP Investments BDR c |
15,000 | 181,898 | |||
JAFCO |
37,300 | 1,275,124 | |||
MVC Capital |
484,200 | 6,628,698 | |||
New Star Asset Management Group |
126,500 | 255,748 | |||
Onex Corporation |
50,000 | 1,472,492 | |||
Perpetual |
11,100 | 455,116 | |||
Pzena Investment Management Cl. A |
238,700 | 3,045,812 | |||
Rathbone Brothers |
28,000 | 517,283 | |||
RHJ International c |
177,500 | 2,235,720 | |||
Schroders |
150,000 | 2,730,825 | |||
SHUAA Capital |
320,000 | 659,506 | |||
SPARX Group |
7,020 | 2,426,275 | |||
Tasmanian Perpetual Trustees |
115,000 | 551,224 | |||
Trust Company |
65,500 | 533,728 | |||
Value Partners Group |
520,000 | 446,824 | |||
79,554,488 | |||||
Special Purpose Acquisition Corporation - 0.4% | |||||
Alternative Asset Management |
|||||
Acquisition (Units) c |
250,000 | 2,425,000 | |||
Prospect Acquisition (Units) c |
150,000 | 1,434,000 | |||
3,859,000 | |||||
Specialty Finance - 0.9% | |||||
214,601 | 5,485,201 | ||||
MCG Capital |
157,715 | 627,706 | |||
NGP Capital Resources |
50,000 | 770,500 |
SHARES | VALUE | ||||
Financial Services (continued) | |||||
Specialty Finance (continued) | |||||
Portfolio Recovery Associates c |
62,100 | $ | 2,328,750 | ||
9,212,157 | |||||
Total (Cost $130,560,196) | 125,568,624 | ||||
Health 6.2% | |||||
Commercial Services - 1.0% | |||||
384,400 | 10,113,564 | ||||
Drugs and Biotech - 1.6% | |||||
10,000 | 102,900 | ||||
Biovail Corporation |
41,200 | 397,580 | |||
155,000 | 3,749,450 | ||||
150,000 | 6,660 | ||||
90,000 | 468,900 | ||||
51,500 | 995,495 | ||||
20,000 | 396,400 | ||||
52,200 | 630,054 | ||||
50,000 | 2,276,000 | ||||
117,980 | 155,734 | ||||
Perrigo Company |
162,950 | 5,176,921 | |||
383,000 | 677,910 | ||||
QLT c |
114,070 | 391,260 | |||
37,400 | 121,550 | ||||
582,000 | 838,080 | ||||
16,384,894 | |||||
Health Services - 1.1% | |||||
Albany Molecular Research c |
85,000 | 1,127,950 | |||
Chem Rx (Units) c |
280,000 | 1,416,800 | |||
Cross Country Healthcare c |
30,000 | 432,300 | |||
Gentiva Health Services c |
30,150 | 574,357 | |||
50,000 | 1,073,500 | ||||
52,562 | 1,492,761 | ||||
MedQuist c |
73,893 | 580,060 | |||
375,400 | 3,010,708 | ||||
10,000 | 157,700 | ||||
65,460 | 1,163,879 | ||||
5,000 | 180,750 | ||||
11,210,765 | |||||
Medical Products and Devices - 2.5% | |||||
Allied Healthcare Products c |
180,612 | 1,228,161 | |||
10,000 | 408,100 | ||||
Atrion Corporation |
15,750 | 1,509,165 | |||
Bruker Corporation c |
370,200 | 4,757,070 | |||
Coloplast Cl. B |
17,000 | 1,482,287 | |||
81,500 | 2,163,825 | ||||
Golden Meditech c |
200,000 | 67,460 | |||
IDEXX Laboratories c |
158,000 | 7,700,920 | |||
STERIS Corporation |
98,600 | 2,835,736 | |||
Straumann Holding |
1,000 | 239,636 | |||
445,500 | 815,265 | ||||
Young Innovations |
62,550 | 1,302,291 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | | | 23 |
Schedule of Investments |
SHARES | VALUE | ||||
Health (continued) | |||||
Medical Products and Devices (continued) | |||||
40,400 | $ | 1,360,268 | |||
25,870,184 | |||||
Total (Cost $41,943,864) | 63,579,407 | ||||
Industrial Products 21.0% | |||||
Automotive - 2.2% | |||||
Copart c |
153,100 | 6,555,742 | |||
ElringKlinger |
15,000 | 1,421,493 | |||
22,500 | 866,250 | ||||
International Textile Group c |
85,000 | 29,750 | |||
375,000 | 6,776,250 | ||||
54,600 | 292,656 | ||||
Superior Industries International |
98,400 | 1,660,992 | |||
WABCO Holdings |
98,800 | 4,590,248 | |||
13,400 | 94,202 | ||||
22,287,583 | |||||
Building Systems and Components - 1.1% | |||||
Decker Manufacturing |
6,022 | 216,792 | |||
Heywood Williams Group c |
958,837 | 272,155 | |||
13,900 | 510,547 | ||||
Preformed Line Products |
91,600 | 3,692,396 | |||
Simpson Manufacturing |
293,400 | 6,965,316 | |||
11,657,206 | |||||
Construction Materials - 2.1% | |||||
Ash Grove Cement Cl. B |
50,518 | 12,073,802 | |||
Duratex |
45,300 | 834,451 | |||
25,000 | 568,750 | ||||
Pretoria Portland Cement |
375,000 | 1,374,042 | |||
232,500 | 4,559,325 | ||||
50,000 | 1,478,500 | ||||
20,888,870 | |||||
Industrial Components - 1.9% | |||||
CLARCOR |
113,500 | 3,983,850 | |||
Donaldson Company |
92,800 | 4,142,592 | |||
64,790 | 1,738,316 | ||||
II-VI c |
13,500 | 471,420 | |||
Mueller Water Products Cl. A |
72,500 | 585,075 | |||
PerkinElmer |
135,800 | 3,782,030 | |||
Powell Industries c |
92,400 | 4,657,884 | |||
19,361,167 | |||||
Machinery - 5.5% | |||||
20,000 | 642,800 | ||||
Baldor Electric |
62,900 | 2,200,242 | |||
Bell Equipment |
200,000 | 910,600 | |||
Burnham Holdings Cl. A |
117,964 | 1,557,125 | |||
Burnham Holdings Cl. B |
36,000 | 475,200 | |||
Franklin Electric |
104,800 | 4,064,144 | |||
Hardinge |
26,193 | 344,962 | |||
23,000 | 484,840 | ||||
Lincoln Electric Holdings |
177,980 | 14,007,026 | |||
Manitou BF |
65,000 | 1,947,517 | |||
Nordson Corporation |
162,200 | 11,822,758 | |||
OSG Corporation |
20,000 | 226,021 |
SHARES | VALUE | ||||
Industrial Products (continued) | |||||
Machinery (continued) | |||||
Rofin-Sinar Technologies c |
236,000 | $ | 7,127,200 | ||
Takatori Corporation |
40,000 | 192,118 | |||
37,499 | 475,112 | ||||
Woodward Governor |
274,600 | 9,792,236 | |||
56,269,901 | |||||
Metal Fabrication and Distribution - 1.4% | |||||
Central Steel & Wire |
6,062 | 4,000,920 | |||
Commercial Metals |
36,600 | 1,379,820 | |||
CompX International |
292,300 | 1,695,340 | |||
Gerdau Ameristeel |
61,100 | 1,179,230 | |||
NN |
197,100 | 2,747,574 | |||
45,000 | 1,499,400 | ||||
Reliance Steel & Aluminum |
25,920 | 1,998,173 | |||
14,500,457 | |||||
Miscellaneous Manufacturing - 3.5% | |||||
Barnes Group |
20,000 | 461,800 | |||
Brady Corporation Cl. A |
188,400 | 6,505,452 | |||
Matthews International Cl. A |
100,000 | 4,526,000 | |||
28,700 | 2,722,482 | ||||
Peerless Manufacturing c |
191,600 | 8,980,292 | |||
Rational |
15,200 | 3,065,645 | |||
Raven Industries |
86,200 | 2,825,636 | |||
Semperit AG Holding |
50,000 | 1,957,043 | |||
Somfy |
5,000 | 1,254,444 | |||
Synalloy Corporation |
198,800 | 3,065,496 | |||
35,364,290 | |||||
Paper and Packaging - 0.4% | |||||
Mayr-Melnhof Karton |
38,000 | 3,589,150 | |||
Pumps, Valves and Bearings - 1.5% | |||||
Graco |
143,625 | 5,467,804 | |||
IDEX Corporation |
54,000 | 1,989,360 | |||
Kaydon Corporation |
76,900 | 3,953,429 | |||
Pfeiffer Vacuum Technology |
35,000 | 3,630,369 | |||
15,040,962 | |||||
Specialty Chemicals and Materials - 1.2% | |||||
Aceto Corporation |
119,710 | 914,584 | |||
American Vanguard |
26,666 | 327,992 | |||
Cabot Corporation |
181,000 | 4,400,110 | |||
Hawkins |
206,878 | 3,094,895 | |||
Migao Corporation c |
12,700 | 105,117 | |||
1,000 | 5,270 | ||||
Schulman (A.) |
150,100 | 3,456,803 | |||
12,304,771 | |||||
Textiles - 0.0% | |||||
Unific |
145,100 | 365,652 | |||
Other Industrial Products - 0.2% | |||||
Vacon |
45,000 | 1,824,395 | |||
Total (Cost $117,039,891) | 213,454,404 | ||||
Industrial Services 16.3% | |||||
Advertising and Publishing - 0.5% | |||||
71,900 | 1,993,068 | ||||
Lamar Advertising Cl. A c |
45,000 | 1,621,350 |
24 | | | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
SHARES | VALUE | ||||
Industrial Services (continued) | |||||
Advertising and Publishing (continued) | |||||
60,000 | $ | 430,800 | |||
180,000 | 88,200 | ||||
45,000 | 681,750 | ||||
150,000 | 757,500 | ||||
5,572,668 | |||||
Commercial Services - 9.2% | |||||
30,000 | 186,900 | ||||
50,000 | 2,009,500 | ||||
35,700 | 149,583 | ||||
121,000 | 1,798,060 | ||||
106,500 | 1,236,465 | ||||
79,287 | 2,866,225 | ||||
Diamond Management & Technology Consultants |
80,400 | 418,884 | |||
Forrester Research c |
40,300 | 1,244,464 | |||
Gartner c |
213,000 | 4,413,360 | |||
3,900 | 59,202 | ||||
655,000 | 3,759,700 | ||||
205,720 | 7,885,248 | ||||
210,862 | 5,598,386 | ||||
ITT Educational Services c |
95,000 | 7,849,850 | |||
Landauer |
117,900 | 6,630,696 | |||
53,400 | 913,140 | ||||
Manpower |
3,100 | 180,544 | |||
119,400 | 5,745,528 | ||||
MAXIMUS |
127,900 | 4,453,478 | |||
Michael Page International |
397,000 | 1,848,411 | |||
24,800 | 511,128 | ||||
MPS Group c |
564,600 | 6,001,698 | |||
228,600 | 354,330 | ||||
Ritchie Bros. Auctioneers |
550,200 | 14,926,926 | |||
Robert Half International |
65,500 | 1,570,035 | |||
Sothebys |
371,600 | 9,799,092 | |||
53,000 | 244,860 | ||||
TRC Companies c |
3,600 | 14,472 | |||
30,000 | 744,000 | ||||
93,414,165 | |||||
Engineering and Construction - 1.2% | |||||
9,800 | 574,084 | ||||
Fleetwood Enterprises c |
234,300 | 613,866 | |||
109,120 | 571,789 | ||||
355,400 | 6,112,880 | ||||
KBR |
140,000 | 4,887,400 | |||
12,760,019 | |||||
Food, Tobacco and Agriculture - 0.4% | |||||
21,900 | 93,732 | ||||
Alico |
27,000 | 935,820 | |||
Astral Foods |
80,000 | 929,758 | |||
17,000 | 225,250 | ||||
MGP Ingredients |
127,400 | 738,920 | |||
105,100 | 628,498 | ||||
Zhongpin c |
9,400 | 117,500 | |||
3,669,478 | |||||
SHARES | VALUE | ||||
Industrial Services (continued) | |||||
Industrial Distribution - 0.7% | |||||
Lawson Products |
161,431 | $ | 4,000,260 | ||
MSC Industrial Direct Cl. A |
74,300 | 3,277,373 | |||
7,277,633 | |||||
Printing - 0.1% | |||||
Bowne & Co. |
68,100 | 868,275 | |||
Transportation and Logistics - 4.2% | |||||
Alexander & Baldwin |
60,000 | 2,733,000 | |||
17,000 | 840,820 | ||||
C.H. Robinson Worldwide |
80,000 | 4,387,200 | |||
Forward Air |
269,750 | 9,333,350 | |||
Frozen Food Express Industries |
286,635 | 1,934,786 | |||
174,400 | 5,952,272 | ||||
Landstar System |
96,200 | 5,312,164 | |||
Patriot Transportation Holding c |
72,300 | 5,784,000 | |||
Universal Truckload Services c |
115,100 | 2,534,502 | |||
UTI Worldwide |
175,000 | 3,491,250 | |||
42,303,344 | |||||
Total (Cost $102,643,264) | 165,865,582 | ||||
Natural Resources 10.7% | |||||
Energy Services - 5.3% | |||||
Cal Dive International c |
50,000 | 714,500 | |||
CARBO Ceramics |
135,200 | 7,888,920 | |||
10,000 | 1,423,500 | ||||
Ensign Energy Services |
126,300 | 2,752,168 | |||
103,600 | 7,406,364 | ||||
54,500 | 977,185 | ||||
34,226 | 1,425,171 | ||||
Helmerich & Payne |
53,700 | 3,867,474 | |||
464,500 | 8,105,525 | ||||
RPC |
25,000 | 420,000 | |||
127,300 | 11,394,623 | ||||
68,000 | 1,612,280 | ||||
Willbros Group c |
103,800 | 4,547,478 | |||
World Fuel Services |
60,000 | 1,316,400 | |||
53,851,588 | |||||
Oil and Gas - 2.0% | |||||
Bill Barrett c |
50,000 | 2,970,500 | |||
41,700 | 2,839,353 | ||||
Cimarex Energy |
115,490 | 8,046,188 | |||
326,900 | 1,761,991 | ||||
Penn Virginia |
32,880 | 2,479,810 | |||
61,400 | 0 | ||||
330,800 | 383,728 | ||||
W&T Offshore |
25,000 | 1,462,750 | |||
19,944,320 | |||||
Precious Metals and Mining - 2.3% | |||||
Centerra Gold c |
30,000 | 140,335 | |||
Endeavour Mining Capital |
150,000 | 1,088,555 | |||
Etruscan Resources c |
745,900 | 1,206,958 | |||
Gammon Gold c |
198,300 | 2,151,555 | |||
350,000 | 941,500 | ||||
Harry Winston Diamond |
10,000 | 287,900 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | | | 25 |
Schedule of Investments |
SHARES | VALUE | ||||
Natural Resources (continued) | |||||
Precious Metals and Mining (continued) | |||||
Hecla Mining c |
490,500 | $ | 4,542,030 | ||
IAMGOLD Corporation |
335,620 | 2,030,501 | |||
560,000 | 890,400 | ||||
Kinross Gold |
40,286 | 951,153 | |||
Metorex c |
800,000 | 2,360,153 | |||
Northam Platinum |
225,000 | 1,942,529 | |||
Northgate Minerals c |
90,000 | 247,500 | |||
45,000 | 335,250 | ||||
41,000 | 1,417,780 | ||||
Royal Gold |
34,400 | 1,078,784 | |||
Yamana Gold |
113,525 | 1,877,704 | |||
23,490,587 | |||||
Real Estate - 1.1% | |||||
Consolidated-Tomoka Land |
13,564 | 570,502 | |||
75,200 | 3,267,440 | ||||
SARE Holding Cl. B c |
730,000 | 956,288 | |||
132,100 | 4,533,672 | ||||
65,000 | 2,343,900 | ||||
11,671,802 | |||||
Total (Cost $58,192,473) | 108,958,297 | ||||
Technology 21.3% | |||||
Aerospace and Defense - 1.0% | |||||
45,000 | 568,350 | ||||
Astronics Corporation c |
52,400 | 728,884 | |||
1,000 | 34,300 | ||||
Ducommun c |
117,200 | 2,690,912 | |||
HEICO Corporation |
129,000 | 4,197,660 | |||
47,500 | 916,750 | ||||
Integral Systems c |
39,876 | 1,543,201 | |||
10,680,057 | |||||
Components and Systems - 6.2% | |||||
Analogic Corporation |
40,135 | 2,531,314 | |||
Belden |
57,800 | 1,958,264 | |||
Benchmark Electronics c |
208,200 | 3,401,988 | |||
Checkpoint Systems c |
56,060 | 1,170,533 | |||
China Security & Surveillance |
|||||
6,000 | 80,880 | ||||
Diebold |
73,600 | 2,618,688 | |||
Dionex Corporation c |
81,000 | 5,375,970 | |||
25,000 | 365,000 | ||||
84,500 | 6,222,580 | ||||
Excel Technology c |
168,500 | 3,760,920 | |||
97,500 | 1,310,400 | ||||
KEMET Corporation c |
95,600 | 309,744 | |||
4,000 | 133,720 | ||||
Methode Electronics |
50,000 | 522,500 | |||
Nam Tai Electronics |
23,400 | 306,072 | |||
592,200 | 6,745,158 | ||||
Perceptron c |
357,700 | 3,129,875 | |||
Plexus Corporation c |
300,700 | 8,323,376 | |||
Richardson Electronics |
520,712 | 3,087,822 | |||
Technitrol |
261,200 | 4,437,788 | |||
Vaisala Cl. A |
84,205 | 3,488,092 |
SHARES | VALUE | ||||
Technology (continued) | |||||
Components and Systems (continued) | |||||
186,000 | $ | 1,649,820 | |||
Zebra Technologies Cl. A c |
76,525 | 2,497,776 | |||
63,428,280 | |||||
Distribution - 0.9% | |||||
Agilysys |
165,125 | 1,872,517 | |||
Anixter International c |
61,795 | 3,676,185 | |||
China 3C Group c |
157,300 | 202,917 | |||
86,500 | 2,931,485 | ||||
8,683,104 | |||||
Internet Software and Services - 0.8% | |||||
Arbinet-thexchange |
21,700 | 84,413 | |||
173,500 | 1,839,100 | ||||
10,000 | 167,300 | ||||
55,200 | 477,480 | ||||
43,420 | 998,660 | ||||
525,000 | 735,000 | ||||
8,300 | 30,959 | ||||
Lionbridge Technologies c |
37,500 | 96,750 | |||
10,000 | 96,600 | ||||
245,400 | 1,619,640 | ||||
SkyTerra Communications c |
62,200 | 419,850 | |||
SupportSoft c |
220,000 | 715,000 | |||
24,800 | 937,440 | ||||
8,218,192 | |||||
IT Services - 2.3% | |||||
Alten c |
44,000 | 1,607,199 | |||
529,100 | 428,571 | ||||
Black Box |
67,300 | 1,829,887 | |||
Computer Task Group c |
101,100 | 517,632 | |||
5,000 | 275,250 | ||||
20,000 | 452,400 | ||||
806,602 | 5,178,385 | ||||
213,300 | 4,790,718 | ||||
Syntel |
152,679 | 5,148,336 | |||
Total System Services |
25,000 | 555,500 | |||
TriZetto Group (The) c |
107,600 | 2,300,488 | |||
13,500 | 151,065 | ||||
23,235,431 | |||||
Semiconductors and Equipment - 3.8% | |||||
46,600 | 160,770 | ||||
58,000 | 281,300 | ||||
Brooks Automation c |
5,152 | 42,607 | |||
CEVA c |
31,666 | 252,378 | |||
Cognex Corporation |
236,200 | 5,444,410 | |||
Coherent c |
243,500 | 7,278,215 | |||
Diodes c |
297,450 | 8,221,518 | |||
164,500 | 1,151,500 | ||||
232,576 | 1,753,623 | ||||
Fairchild Semiconductor International c |
51,200 | 600,576 | |||
Himax Technologies ADR |
100,000 | 512,000 | |||
8,310 | 106,950 | ||||
120,000 | 2,304,000 | ||||
57,450 | 648,036 | ||||
Jazz Technologies (Units) c |
805,000 | 966,000 |
26 | | | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
SHARES | VALUE | ||||
Technology (continued) | |||||
Semiconductors and Equipment (continued) | |||||
Jinpan International |
3,700 | $ | 136,900 | ||
Kulicke & Soffa Industries c |
105,800 | 771,282 | |||
12,000 | 254,280 | ||||
49,000 | 1,548,890 | ||||
200,000 | 256,000 | ||||
Semitool c |
50,000 | 375,500 | |||
221,400 | 2,924,694 | ||||
2,000 | 102,120 | ||||
65,000 | 1,045,200 | ||||
270,000 | 766,800 | ||||
120,000 | 859,200 | ||||
38,764,749 | |||||
Software - 3.9% | |||||
ACI Worldwide c |
233,150 | 4,101,109 | |||
187,900 | 6,779,432 | ||||
100,000 | 4,712,000 | ||||
Aspen Technology c |
42,100 | 589,400 | |||
96,000 | 1,631,040 | ||||
280,000 | 380,800 | ||||
China Fire & Security Group c |
16,300 | 131,215 | |||
Datasul |
150,000 | 2,138,045 | |||
79,900 | 552,109 | ||||
99,900 | 1,808,190 | ||||
MSC.Software c |
50,000 | 549,000 | |||
National Instruments |
72,900 | 2,068,173 | |||
50,000 | 1,215,000 | ||||
Pegasystems |
44,200 | 594,932 | |||
PLATO Learning c |
149,642 | 396,551 | |||
32,500 | 348,725 | ||||
Renaissance Learning |
15,000 | 168,150 | |||
SPSS c |
179,600 | 6,532,052 | |||
82,600 | 2,430,092 | ||||
Teradata Corporation c |
35,000 | 809,900 | |||
20,000 | 405,200 | ||||
40,000 | 920,800 | ||||
39,261,915 | |||||
Telecommunications - 2.4% | |||||
2,584,100 | 8,269,120 | ||||
ADTRAN |
65,000 | 1,549,600 | |||
Catapult Communications c |
87,100 | 620,152 | |||
8,700 | 39,672 | ||||
China Mobile Media Technology c |
160,200 | 3,204 | |||
204,200 | 2,736,280 | ||||
7,900 | 71,969 | ||||
Foundry Networks c |
298,600 | 3,529,452 | |||
50,000 | 141,500 | ||||
Globecomm Systems c |
233,700 | 1,930,362 | |||
IDT Corporation c |
108,400 | 163,684 | |||
IDT Corporation Cl. B c |
245,000 | 416,500 | |||
401,341 | 1,183,956 | ||||
380,000 | 421,800 | ||||
191,000 | 615,020 | ||||
Tandberg |
90,000 | 1,475,497 | |||
Tollgrade Communications c |
20,000 | 89,800 |
SHARES | VALUE | |||||
Technology (continued) | ||||||
Telecommunications (continued) | ||||||
UTStarcom c |
31,400 | $ | 171,758 | |||
Zhone Technologies c |
1,090,000 | 850,200 | ||||
24,279,526 | ||||||
Total (Cost $206,076,638) | 216,551,254 | |||||
Utilities 0.2% | ||||||
CH Energy Group |
44,500 | 1,582,865 | ||||
Southern Union |
11,576 | 312,784 | ||||
Total (Cost $2,127,413) | 1,895,649 | |||||
Miscellaneouse 2.6% | ||||||
Total (Cost $29,778,681) | 26,716,887 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $935,638,338) |
1,159,041,904 | |||||
PREFERRED STOCKS 0.4% | ||||||
Duratex |
130,000 | 2,757,158 | ||||
85,000 | 1,595,025 | |||||
TOTAL PREFERRED STOCKS | ||||||
(Cost $4,182,756) |
4,352,183 | |||||
PRINCIPAL | ||||||
AMOUNT | ||||||
CORPORATE BOND 0.0% | ||||||
Dixie Group 7.00% |
||||||
Conv. Sub. Deb. due 5/15/12 |
||||||
(Cost $264,314) |
$ | 307,000 | 286,661 | |||
REPURCHASE AGREEMENT 6.6% | ||||||
State Street Bank & Trust Company, | ||||||
2.05% dated 6/30/08, due 7/1/08, |
||||||
maturity value $67,473,842 (collateralized |
||||||
by obligations of various U.S. Government |
||||||
Agencies, valued at $69,159,350) |
||||||
(Cost $67,470,000) |
67,470,000 | |||||
COLLATERAL RECEIVED FOR SECURITIES | ||||||
LOANED 11.6% |
||||||
U.S. Treasury Bills | ||||||
due 11/13/08-11/20/08 |
37,368 | 37,368 | ||||
U.S. Treasury Bonds | ||||||
5.50%-8.875% |
||||||
due 5/15/17-8/15/28 |
1,275,121 | 1,302,986 | ||||
U.S. Treasury Notes | ||||||
4.50%-5.00% |
||||||
due 4/30/09-8/15/11 |
146,659 | 149,229 | ||||
U.S. Treasury Notes-TIPS | ||||||
1.875%-2.00% |
||||||
due 7/15/14-7/15/15 |
82,587 | 83,209 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | | | 27 |
Royce Value Trust | June 30, 2008 (unaudited) |
Schedule of Investments |
VALUE | ||||||
COLLATERAL RECEIVED FOR SECURITIES | ||||||
LOANED (continued) |
||||||
Money Market Funds | ||||||
State Street Navigator Securities Lending |
||||||
Prime Portfolio (7 day yield-2.6748%) |
$ | 116,161,736 | ||||
TOTAL COLLATERAL RECEIVED FOR | ||||||
SECURITIES LOANED |
||||||
(Cost $117,734,528) |
117,734,528 | |||||
TOTAL INVESTMENTS 132.5% | ||||||
(Cost $1,125,289,936) |
1,348,885,276 | |||||
LIABILITIES LESS CASH | ||||||
AND OTHER ASSETS (10.9)% |
(110,717,436 | ) | ||||
PREFERRED STOCK (21.6)% | (220,000,000 | ) | ||||
NET ASSETS APPLICABLE TO COMMON | ||||||
STOCKHOLDERS 100.0% |
$ | 1,018,167,840 | ||||
28 | | | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce Value Trust | June 30, 2008 (unaudited) |
Statement of Assets and Liabilities |
ASSETS: | ||||
Investments at value (including collateral on loaned securities)* | ||||
Non-Affiliated Companies (cost $1,047,784,334) |
$ | 1,275,423,831 | ||
Affiliated Companies (cost $10,035,602) |
5,991,445 | |||
Total investments at value | 1,281,415,276 | |||
Repurchase agreements (at cost and value) | 67,470,000 | |||
Cash and foreign currency | 48,083 | |||
Receivable for investments sold | 14,465,352 | |||
Receivable for dividends and interest | 1,087,014 | |||
Prepaid expenses and other assets | 220,593 | |||
Total Assets |
1,364,706,318 | |||
LIABILITIES: | ||||
Payable for collateral on loaned securities | 117,734,528 | |||
Payable for investments purchased | 6,876,866 | |||
Payable for investment advisory fee | 1,356,971 | |||
Preferred dividends accrued but not yet declared | 288,446 | |||
Accrued expenses | 281,667 | |||
Total Liabilities |
126,538,478 | |||
PREFERRED STOCK: | ||||
5.90% Cumulative Preferred Stock - $0.001 par value, $25 liquidation value per share; 8,800,000 shares outstanding | 220,000,000 | |||
Total Preferred Stock | 220,000,000 | |||
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS | $ | 1,018,167,840 | ||
ANALYSIS OF NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: | ||||
Common Stock paid-in capital - $0.001 par value per share; 61,776,913 shares outstanding (150,000,000 shares authorized) | $ | 798,626,791 | ||
Undistributed net investment income (loss) | 1,438,972 | |||
Accumulated net realized gain (loss) on investments and foreign currency | 56,907,336 | |||
Net unrealized appreciation (depreciation) on investments and foreign currency | 223,598,013 | |||
Quarterly and accrued distributions | (62,403,272 | ) | ||
Net Assets applicable to Common Stockholders (net asset value per share - $16.48) |
$ | 1,018,167,840 | ||
*Investments at identified cost (including $117,734,528 of collateral on loaned securities) | $ | 1,057,819,936 | ||
Market value of loaned securities | 112,828,640 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | | | 29 |
Royce Value Trust | Six Months Ended June 30, 2008 (unaudited) |
Statement of Operations |
INVESTMENT INCOME: | ||||
Income: | ||||
Dividends* |
||||
Non-Affiliated Companies |
$ | 8,931,086 | ||
Affiliated Companies |
103,224 | |||
Interest |
1,286,403 | |||
Securities lending |
798,937 | |||
Total income | 11,119,650 | |||
Expenses: | ||||
Investment advisory fees |
8,935,138 | |||
Stockholder reports |
244,964 | |||
Custody and transfer agent fees |
130,097 | |||
Directors fees |
63,720 | |||
Administrative and office facilities expenses |
56,362 | |||
Professional fees |
28,628 | |||
Other expenses |
69,227 | |||
Total expenses | 9,528,136 | |||
Compensating balance credits | (3,514 | ) | ||
Net expenses | 9,524,622 | |||
Net investment income (loss) | 1,595,028 | |||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | ||||
Net realized gain (loss) on investments and foreign currency | ||||
Non-Affiliated Companies |
39,652,598 | |||
Affiliated Companies |
| |||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (174,123,794 | ) | ||
Net realized and unrealized gain (loss) on investments and foreign currency | (134,471,196 | ) | ||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM INVESTMENT OPERATIONS | (132,876,168 | ) | ||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS | (6,490,000 | ) | ||
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS | ||||
RESULTING FROM INVESTMENT OPERATIONS |
$ | (139,366,168 | ) | |
* Net of foreign withholding tax of $447,399. |
30 | | | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Statement of Changes in Net Assets |
Six months ended | ||||||||
6/30/08 | Year ended | |||||||
(unaudited) | 12/31/07 | |||||||
INVESTMENT OPERATIONS: | ||||||||
Net investment income (loss) | $ | 1,595,028 | $ | 5,297,518 | ||||
Net realized gain (loss) on investments and foreign currency | 39,652,598 | 121,683,331 | ||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (174,123,794 | ) | (56,217,996 | ) | ||||
Net increase (decrease) in net assets resulting from investment operations | (132,876,168 | ) | 70,762,853 | |||||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: | ||||||||
Net investment income | | (613,954 | ) | |||||
Net realized gain on investments and foreign currency | | (12,366,046 | ) | |||||
Quarterly distributions * | (6,490,000 | ) | | |||||
Total distributions to Preferred Stockholders | (6,490,000 | ) | (12,980,000 | ) | ||||
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS |
||||||||
RESULTING FROM INVESTMENT OPERATIONS |
(139,366,168 | ) | 57,782,853 | |||||
DISTRIBUTIONS TO COMMON STOCKHOLDERS: | ||||||||
Net investment income | | (5,095,420 | ) | |||||
Net realized gain on investments and foreign currency | | (102,630,144 | ) | |||||
Quarterly distributions * | (55,624,823 | ) | | |||||
Total distributions to Common Stockholders | (55,624,823 | ) | (107,725,564 | ) | ||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Reinvestment of distributions to Common Stockholders | 28,489,506 | 54,184,473 | ||||||
Total capital stock transactions | 28,489,506 | 54,184,473 | ||||||
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS | (166,501,485 | ) | 4,241,762 | |||||
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: | ||||||||
Beginning of period |
1,184,669,325 | 1,180,427,563 | ||||||
End of period (including undistributed net investment income (loss) of $1,438,972 at 6/30/08 and |
||||||||
$(156,056) at 12/31/07) |
$ | 1,018,167,840 | $ | 1,184,669,325 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | | | 31 |
Financial Highlights |
This table is presented to show selected data for a share of Common Stock outstanding throughout each period, and to assist stockholders in evaluating the Funds performance for the periods presented.
Six months | Years ended December 31, | |||||||||||||||||||||||
ended | ||||||||||||||||||||||||
June 30, 2008 | ||||||||||||||||||||||||
(unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
NET ASSET VALUE, BEGINNING OF PERIOD | $ | 19.74 | $ | 20.62 | $ | 18.87 | $ | 18.95 | $ | 17.03 | $ | 13.22 | ||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||
Net investment
income (loss) |
0.03 | 0.09 | 0.13 | 0.01 | (0.08 | ) | (0.05 | ) | ||||||||||||||||
Net realized
and unrealized gain (loss) on investments and |
||||||||||||||||||||||||
foreign currency |
(2.22 | ) | 1.13 | 3.63 | 1.75 | 3.81 | 5.64 | |||||||||||||||||
Total investment
operations |
(2.19 | ) | 1.22 | 3.76 | 1.76 | 3.73 | 5.59 | |||||||||||||||||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: | ||||||||||||||||||||||||
Net investment
income |
| (0.01 | ) | (0.02 | ) | | | | ||||||||||||||||
Net realized
gain on investments and foreign currency |
| (0.21 | ) | (0.21 | ) | (0.24 | ) | (0.26 | ) | (0.26 | ) | |||||||||||||
Quarterly
distributions * |
(0.11 | ) | | | | | | |||||||||||||||||
Total distributions
to Preferred Stockholders |
(0.11 | ) | (0.22 | ) | (0.23 | ) | (0.24 | ) | (0.26 | ) | (0.26 | ) | ||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON |
||||||||||||||||||||||||
STOCKHOLDERS
RESULTING FROM INVESTMENT OPERATIONS |
(2.30 | ) | 1.00 | 3.53 | 1.52 | 3.47 | 5.33 | |||||||||||||||||
DISTRIBUTIONS TO COMMON STOCKHOLDERS: | ||||||||||||||||||||||||
Net investment
income |
| (0.09 | ) | (0.14 | ) | | | | ||||||||||||||||
Net realized
gain on investments and foreign currency |
| (1.76 | ) | (1.64 | ) | (1.61 | ) | (1.55 | ) | 1.30 | ||||||||||||||
Quarterly
distributions * |
(0.92 | ) | | | | | | |||||||||||||||||
Total distributions
to Common Stockholders |
(0.92 | ) | (1.85 | ) | (1.78 | ) | (1.61 | ) | (1.55 | ) | (1.30 | ) | ||||||||||||
CAPITAL STOCK TRANSACTIONS: | ||||||||||||||||||||||||
Effect of
reinvestment of distributions by Common Stockholders |
(0.04 | ) | (0.03 | ) | (0.00 | ) | 0.01 | 0.00 | (0.00 | ) | ||||||||||||||
Effect of
rights offering and Preferred Stock offering |
| | | | | (0.22 | ) | |||||||||||||||||
Total capital
stock transactions |
(0.04 | ) | (0.03 | ) | (0.00 | ) | 0.01 | 0.00 | (0.22 | ) | ||||||||||||||
NET ASSET VALUE, END OF PERIOD | $ | 16.48 | $ | 19.74 | $ | 20.62 | $ | 18.87 | $ | 18.95 | $ | 17.03 | ||||||||||||
MARKET VALUE, END OF PERIOD | $ | 15.68 | $ | 18.58 | $ | 22.21 | $ | 20.08 | $ | 20.44 | $ | 17.21 | ||||||||||||
TOTAL RETURN (a): | ||||||||||||||||||||||||
Market Value | (10.72 | )%*** | (8.21 | )% | 20.96 | % | 6.95 | % | 29.60 | % | 41.96 | % | ||||||||||||
Net Asset Value | (11.67 | )%*** | 5.04 | % | 19.50 | % | 8.41 | % | 21.42 | % | 40.80 | % | ||||||||||||
RATIOS BASED ON AVERAGE NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: | ||||||||||||||||||||||||
Total expenses (b,c) | 1.79 | %** | 1.38 | % | 1.29 | % | 1.49 | % | 1.51 | % | 1.49 | % | ||||||||||||
Management
fee expense (d) |
1.68 | %** | 1.29 | % | 1.20 | % | 1.37 | % | 1.39 | % | 1.34 | % | ||||||||||||
Other operating
expenses |
0.11 | %** | 0.09 | % | 0.09 | % | 0.12 | % | 0.12 | % | 0.15 | % | ||||||||||||
Net investment income (loss) | 0.30 | %** | 0.43 | % | 0.62 | % | 0.03 | % | (0.50 | )% | (0.36 | )% | ||||||||||||
SUPPLEMENTAL DATA: | ||||||||||||||||||||||||
Net Assets Applicable to Common Stockholders, | ||||||||||||||||||||||||
End of Period
(in thousands) |
$ | 1,018,168 | $ | 1,184,669 | $ | 1,180,428 | $ | 1,032,120 | $ | 993,304 | $ | 850,773 | ||||||||||||
Liquidation Value of Preferred Stock, End of Period (in thousands) | $220,000 | $220,000 | $220,000 | $220,000 | $220,000 | $220,000 | ||||||||||||||||||
Portfolio Turnover Rate | 14 | % | 26 | % | 21 | % | 31 | % | 30 | % | 23 | % | ||||||||||||
PREFERRED STOCK: | ||||||||||||||||||||||||
Total shares outstanding | 8,800,000 | 8,800,000 | 8,800,000 | 8,800,000 | 8,800,000 | 8,800,000 | ||||||||||||||||||
Asset coverage per share | $ | 140.70 | $ | 159.62 | $ | 159.14 | $ | 142.29 | $ | 137.88 | $ | 121.68 | ||||||||||||
Liquidation preference per share | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | ||||||||||||
Average market value per share (e): | ||||||||||||||||||||||||
5.90% Cumulative |
$ | 23.35 | $ | 23.68 | $ | 23.95 | $ | 24.75 | $ | 24.50 | $ | 25.04 | ||||||||||||
7.80% Cumulative |
| | | | | $ | 25.87 | |||||||||||||||||
7.30% Tax-Advantaged
Cumulative |
| | | | | $ | 25.53 |
32 | | | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Notes to Financial Statements (unaudited) |
Summary of Significant Accounting Policies: |
Royce Value Trust, Inc. (the Fund), was incorporated under the laws of
the State of Maryland on July 1, 1986 as a diversified closed-end investment
company. The Fund commenced operations on November 26, 1986. |
Valuation of Investments: |
Securities 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. Securities that
trade on an exchange, and securities traded on Nasdaqs Electronic Bulletin
Board, are valued at their last reported sales price or Nasdaq official closing
price taken from the primary market in which each security trades or, if no sale
is reported for such day, at their bid price. Other over-the-counter securities
for which market quotations are readily available are valued at their highest bid
price. Securities for which market quotations are not readily available are valued
at their fair value under procedures established by the Funds Board of Directors.
In addition, if, between the time trading ends on a particular security and the
close of the customary trading session on the NYSE, events occur that are significant
and may make the closing price unreliable, the Fund may fair value the security.
The Fund uses an independent pricing service to provide fair value estimates
for relevant non-U.S. equity securities on days when the 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 relevant non-U.S. securities. When fair value pricing
is employed, the price of securities used by the Fund may differ from quoted
or published prices for the same security. Bonds and other fixed income securities
may be valued by reference to other securities with comparable ratings, interest
rates and maturities, using established independent pricing services. Investments
in money market funds are valued at net asset value per share. |
Level 1 | Level 2 | Level 3 | Total | |||||
$1,018,972,228 | $328,318,023 | $1,595,025 | $1,348,885,276 | |||||
Level 3 Reconciliation: | ||||||||
Change in unrealized appreciation | ||||||||
Balance as of 12/31/07 | (depreciation) | Balance as of 6/30/08 | ||||||
$1,816,875 | $(221,850) | $1,595,025 | ||||||
Repurchase Agreements: |
The Fund may enter into repurchase agreements with institutions that the Funds 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. |
Foreign Currency: |
The Fund values its non-U.S. securities in U.S. dollars daily at the prevailing foreign currency exchange rates as quoted
by a major bank. The effects of changes in foreign exchange rates on investments
and other assets and liabilities are included with net realized and unrealized gains
and losses on investments. |
2008 Semiannual Report to Stockholders | 33
Notes to Financial Statements (unaudited) (continued) |
Securities Lending: |
The Fund loans securities to qualified institutional investors for the purpose of realizing additional income. Collateral on all securities loaned for the Fund is accepted in cash and cash equivalents and invested temporarily by the custodian. The collateral is equal to at least 100% of the current market value of the loaned securities. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. |
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 Income Tax Information . |
Distributions: |
The Fund currently has a policy of paying quarterly distributions on the Funds Common Stock. Distributions are currently being made at the annual rate of 9% of the rolling average of the prior four calendar quarter-end NAVs of the Funds Common Stock, with the fourth quarter distribution being the greater of 2.25% of the rolling average or the distribution required by IRS regulations. Distributions to Preferred Stockholders are accrued daily and paid quarterly and distributions to Common Stockholders are recorded on ex-dividend date. The Fund is required to allocate long-term capital gain distributions and other types of income proportionately to distributions made to holders of shares of Common Stock and Preferred Stock. To the extent that distributions 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. Non-cash dividend income is recorded at the fair market value of the securities received. Interest income is recorded on an accrual basis. Premium 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 Funds operations, while expenses applicable to more than one of the Royce Funds are allocated equitably. Allocated personnel and occupancy costs related to The Royce Funds are included in administrative and office facilities expenses. The Fund has adopted a deferred fee agreement that allows the Directors to defer the receipt of all or a portion of Directors Fees otherwise payable. The deferred fees are invested in certain Royce Funds until distributed in accordance with the agreement. |
Compensating Balance Credits: |
The Fund has an arrangement with its custodian bank, whereby a portion of the custodians fee is paid indirectly by credits earned on the Funds cash on deposit with the bank. This deposit arrangement is an alternative to purchasing overnight investments. Conversely, the Fund pays interest to the custodian on any cash overdrafts, to the extent they are not offset by credits earned on positive cash balances. |
Capital Stock: |
The Fund issued 1,768,501
and 2,749,591 shares of Common Stock as reinvestment of distributions by Common
Stockholders for the six months ended June 30, 2008 and the year ended December
31, 2007, respectively. |
34 | | | 2008 Semiannual Report to Stockholders |
Notes to Financial Statements (unaudited) (continued) |
Investment Advisory Agreement: |
As compensation for its services
under the Investment Advisory Agreement, Royce & Associates, LLC (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). |
Purchases and Sales of Investment Securities: |
For the six months ended June 30, 2008, the cost of purchases and proceeds from sales of investment securities, other than short-term securities and collateral received for securities loaned, amounted to $166,070,505 and $214,722,026, respectively. |
Transactions in Shares of Affiliated Companies: |
An Affiliated Company as defined in the Investment Company Act of 1940, is a company in which a Fund owns 5% or more of the companys outstanding voting securities at any time during the period. The Fund effected the following transactions in shares of such companies for the six months ended June 30, 2008: |
Shares | Market Value | Cost of | Cost of | Realized | Dividend | Shares | Market Value | ||||||||||||||||
Affiliated Company | 12/31/07 | 12/31/07 | Purchases | Sales | Gain (Loss) | Income | 6/30/08 | 6/30/08 | |||||||||||||||
Delta Apparel | 580,760 | $4,152,434 | $168,149 | - | - | - | 605,560 | $2,228,461 | |||||||||||||||
Timberland Bancorp | 469,200 | 5,714,856 | - | - | - | $103,224 | 469,200 | 3,762,984 | |||||||||||||||
$9,867,290 | - | $103,224 | $5,991,445 |
2008 Semiannual Report to Stockholders | 35
Schedule of Investments |
SHARES | VALUE | ||||
COMMON STOCKS 119.2% | |||||
Consumer Products 7.6% | |||||
Apparel, Shoes and Accessories - 2.2% | |||||
Cherokee |
18,500 | $ | 372,775 | ||
Fredericks of Hollywood Group a |
121,804 | 182,706 | |||
Hartmarx Corporation a |
70,000 | 151,900 | |||
14,200 | 0 | ||||
Lazare Kaplan International a |
151,700 | 1,350,130 | |||
Perry Ellis Internationala,c |
3,800 | 80,636 | |||
Steven Madden a |
23,332 | 428,842 | |||
5,200 | 138,580 | ||||
13,700 | 225,502 | ||||
Weyco Group |
120,000 | 3,183,600 | |||
Yamato International |
40,000 | 204,549 | |||
6,319,220 | |||||
Collectibles - 0.0% | |||||
13,000 | 108,160 | ||||
Consumer Electronics - 0.1% | |||||
7,000 | 219,240 | ||||
20,000 | 123,400 | ||||
342,640 | |||||
Food/Beverage/Tobacco - 1.9% | |||||
76,800 | 2,885,376 | ||||
20,000 | 237,800 | ||||
Seneca Foods Cl. A a |
62,500 | 1,303,125 | |||
42,500 | 908,225 | ||||
5,334,526 | |||||
Health, Beauty and Nutrition - 0.2% | |||||
Nutraceutical International a |
15,000 | 180,000 | |||
NutriSystem |
24,400 | 345,016 | |||
525,016 | |||||
Home Furnishing and Appliances - 2.3% | |||||
American Woodmark |
100,000 | 2,113,000 | |||
Cobra Electronics |
10,000 | 27,300 | |||
Flexsteel Industries |
213,500 | 2,401,875 | |||
20,000 | 322,400 | ||||
Lifetime Brands |
42,054 | 342,740 | |||
Natuzzi ADR a |
387,800 | 1,237,082 | |||
5,600 | 117,040 | ||||
6,561,437 | |||||
Household Products/Wares - 0.3% | |||||
100,000 | 833,000 | ||||
Sports and Recreation - 0.6% | |||||
Cybex International a |
61,700 | 210,397 | |||
Monaco Coach |
314,950 | 957,448 | |||
Steinway Musical Instruments a |
10,000 | 264,000 | |||
Sturm, Ruger & Company a |
45,000 | 317,700 | |||
1,749,545 | |||||
Total (Cost $18,158,712) | 21,773,544 | ||||
Consumer Services 5.8% | |||||
Leisure and Entertainment - 0.4% | |||||
Ambassadors Group a |
22,000 | 328,240 | |||
6,100 | 26,718 |
SHARES | VALUE | ||||
Consumer Services (continued) | |||||
Leisure and Entertainment (continued) | |||||
5,000 | $ | 31,300 | |||
GameTech International a |
17,500 | 83,125 | |||
25,000 | 171,000 | ||||
82,800 | 375,912 | ||||
1,016,295 | |||||
Media and Broadcasting - 0.1% | |||||
100,000 | 445,000 | ||||
Online Commerce - 1.3% | |||||
Alloy a |
65,702 | 475,026 | |||
CryptoLogic |
97,200 | 1,395,792 | |||
FTD Group c |
55,000 | 733,150 | |||
25,200 | 246,456 | ||||
17,100 | 159,201 | ||||
26,000 | 352,560 | ||||
Stamps.com a |
34,100 | 425,568 | |||
3,787,753 | |||||
Restaurants and Lodgings - 0.2% | |||||
39,700 | 251,698 | ||||
Cosi a |
43,800 | 109,938 | |||
Jamba a |
67,000 | 123,950 | |||
Noble Romans a |
60,200 | 72,240 | |||
557,826 | |||||
Retail Stores - 3.6% | |||||
59,000 | 415,950 | ||||
Americas Car-Mart a |
170,000 | 3,046,400 | |||
Buckle (The) |
23,500 | 1,074,655 | |||
131,900 | 958,913 | ||||
Cache a |
19,200 | 205,440 | |||
Casual Male Retail Group a |
2,000 | 6,100 | |||
Cato Corporation (The) Cl. A |
68,100 | 969,744 | |||
Cost Plus a |
51,100 | 127,750 | |||
67,300 | 135,273 | ||||
20,228 | 79,901 | ||||
13,900 | 177,225 | ||||
Freds Cl. A |
26,000 | 292,240 | |||
400 | 8,440 | ||||
New York & Company a |
29,600 | 270,248 | |||
223,291 | 1,007,042 | ||||
274,000 | 1,123,400 | ||||
Wet Seal (The) Cl. A a |
57,065 | 272,200 | |||
10,170,921 | |||||
Other Consumer Services - 0.2% | |||||
Collectors Universe |
33,200 | 269,252 | |||
9,200 | 137,908 | ||||
13,000 | 158,730 | ||||
565,890 | |||||
Total (Cost $18,050,920) | 16,543,685 | ||||
Diversified Investment Companies 2.4% | |||||
Closed-End Funds - 2.4% | |||||
ASA |
48,900 | 4,139,385 |
36 | | | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2008 (unaudited) |
SHARES | VALUE | ||||
Diversified Investment Companies (continued) | |||||
Closed-End Funds (continued) | |||||
Central Fund of Canada Cl. A | 207,000 | $ | 2,680,650 | ||
Total (Cost $2,675,077) | 6,820,035 | ||||
Financial Intermediaries 11.0% | |||||
Banking - 5.8% | |||||
Alliance Bancorp, Inc. of Pennsylvania |
50,420 | 453,276 | |||
100,000 | 739,000 | ||||
Bancorp (The) a |
50,000 | 381,000 | |||
BB Holdings a |
390,000 | 1,767,268 | |||
CFS Bancorp |
60,000 | 707,400 | |||
Chemung Financial |
40,000 | 1,030,000 | |||
CNB Financial |
30,000 | 424,200 | |||
Commercial National Financial |
20,000 | 298,000 | |||
Fauquier Bankshares |
160,800 | 2,588,880 | |||
Financial Institutions |
50,000 | 803,000 | |||
First Bancorp |
40,200 | 548,730 | |||
45,500 | 27,755 | ||||
HopFed Bancorp |
49,000 | 674,730 | |||
Lakeland Financial |
45,000 | 858,600 | |||
LCNB Corporation |
30,000 | 285,000 | |||
Meta Financial Group |
44,800 | 1,186,304 | |||
Nexity Financial a |
29,000 | 134,850 | |||
Peapack-Gladstone Financial |
29,000 | 637,130 | |||
Queen City Investments a |
948 | 1,185,000 | |||
Quest Capital |
30,000 | 52,074 | |||
Sterling Bancorp |
32,869 | 392,785 | |||
W Holding Company |
300,000 | 255,000 | |||
Wilber Corporation(The) |
103,150 | 873,680 | |||
114,200 | 188,430 | ||||
16,492,092 | |||||
Insurance - 1.8% | |||||
American Physicians Service Group |
10,000 | 220,400 | |||
American Safety Insurance Holdings a |
20,000 | 287,600 | |||
124,000 | 416,640 | ||||
First Acceptance a |
258,405 | 826,896 | |||
Independence Holding |
95,800 | 935,966 | |||
Navigators Group a |
15,200 | 821,560 | |||
NYMAGIC |
85,400 | 1,636,264 | |||
5,145,326 | |||||
Real Estate Investment Trusts - 0.1% | |||||
Vestin Realty Mortgage II |
74,230 | 223,432 | |||
Securities Brokers - 3.0% | |||||
95,000 | 190,000 | ||||
123,600 | 954,192 | ||||
5,000 | 417,500 | ||||
Evercore Partners Cl. A |
50,900 | 483,550 | |||
350,600 | 1,763,518 | ||||
International Assets Holding a |
6,400 | 192,384 | |||
Sanders Morris Harris Group |
199,000 | 1,349,220 | |||
53,899 | 1,853,587 | ||||
187,000 | 1,022,890 | ||||
30,000 | 304,500 | ||||
8,531,341 | |||||
SHARES | VALUE | ||||
Financial Intermediaries (continued) | |||||
Securities Exchanges - 0.3% | |||||
123,700 | $ | 935,172 | |||
Total (Cost $33,761,587) | 31,327,363 | ||||
Financial Services 6.4% | |||||
Diversified Financial Services - 1.0% | |||||
Advanta Corporation Cl. B |
37,500 | 235,875 | |||
98,000 | 865,340 | ||||
47,951 | 1,614,510 | ||||
2,715,725 | |||||
Insurance Brokers - 0.3% | |||||
50,000 | 312,500 | ||||
Health Benefits Direct a |
103,215 | 51,608 | |||
Western Financial Group |
148,000 | 510,895 | |||
875,003 | |||||
Investment Management - 3.1% | |||||
BKF Capital Group a |
387,000 | 797,220 | |||
Cockleshell a |
465,300 | 505,110 | |||
Epoch Holding Corporation |
211,500 | 1,926,765 | |||
Hennessy Advisors |
24,750 | 136,125 | |||
JZ Equity Partners b |
70,000 | 154,766 | |||
MVC Capital |
226,200 | 3,096,678 | |||
Sceptre Investment Counsel |
78,000 | 611,945 | |||
UTEK Corporation a |
20,100 | 201,000 | |||
Westwood Holdings Group |
38,280 | 1,523,544 | |||
8,953,153 | |||||
Special Purpose Acquisition Corporation - 1.5% | |||||
Alternative Asset Management |
|||||
Acquisition (Units) a |
250,000 | 2,425,000 | |||
Prospect Acquisition (Units) a |
50,000 | 478,000 | |||
Shellshock a |
47,200 | 61,580 | |||
Shermen WSC Acquisition a |
220,000 | 1,262,800 | |||
4,227,380 | |||||
Specialty Finance - 0.5% | |||||
ASTA Funding |
24,100 | 218,346 | |||
MRU Holdings a |
106,100 | 238,725 | |||
NGP Capital Resources |
68,080 | 1,049,113 | |||
1,506,184 | |||||
Total (Cost $15,692,368) | 18,277,445 | ||||
Health 14.5% | |||||
Commercial Services - 1.3% | |||||
25,700 | 135,182 | ||||
116,500 | 3,065,115 | ||||
PDI a |
66,800 | 581,828 | |||
3,782,125 | |||||
Drugs and Biotech - 2.8% | |||||
33,500 | 123,615 | ||||
53,600 | 370,376 | ||||
420,000 | 945,000 | ||||
200,000 | 560,000 | ||||
Cambrex Corporation a |
16,000 | 93,920 | |||
Caraco Pharmaceutical Laboratories a |
14,650 | 193,380 | |||
Cardiome Pharma a |
21,000 | 184,800 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | | | 37 |
Schedule of Investments |
SHARES | VALUE | ||||
Health (continued) | |||||
Drugs and Biotech (continued) | |||||
78,000 | $ | 202,800 | |||
44,100 | 161,847 | ||||
92,600 | 186,126 | ||||
Dyax Corporation a |
47,300 | 146,630 | |||
163,200 | 437,376 | ||||
401,000 | 25,303 | ||||
196,700 | 8,734 | ||||
10,000 | 315,500 | ||||
140,000 | 201,600 | ||||
Hi-Tech Pharmacal a |
19,430 | 194,300 | |||
24,000 | 73,440 | ||||
80,000 | 128,000 | ||||
10,000 | 30,000 | ||||
62,500 | 768,750 | ||||
Neuralstem a |
40,000 | 58,000 | |||
36,000 | 69,480 | ||||
78,000 | 202,800 | ||||
24,400 | 213,500 | ||||
10,000 | 99,500 | ||||
57,000 | 482,220 | ||||
57,000 | 281,010 | ||||
70,000 | 227,500 | ||||
Strategic Diagnostics a |
56,200 | 204,568 | |||
863,000 | 9,493 | ||||
145,800 | 529,254 | ||||
Trimeris |
81,000 | 382,320 | |||
8,111,142 | |||||
Health Services - 4.4% | |||||
13,300 | 332,500 | ||||
Albany Molecular Research a |
30,000 | 398,100 | |||
35,200 | 305,184 | ||||
Bio-Imaging Technologies a |
19,100 | 141,340 | |||
BML |
30,000 | 569,289 | |||
Computer Programs and Systems |
13,900 | 240,887 | |||
CorVel Corporation a |
40,125 | 1,359,034 | |||
eResearch Technology a |
165,000 | 2,877,600 | |||
Gentiva Health Services a |
23,000 | 438,150 | |||
28,900 | 620,483 | ||||
67,600 | 68,952 | ||||
18,000 | 323,640 | ||||
30,200 | 176,670 | ||||
73,700 | 591,074 | ||||
25,000 | 394,250 | ||||
100,000 | 2,259,000 | ||||
40,500 | 649,215 | ||||
41,000 | 548,990 | ||||
U.S. Physical Therapy a |
10,000 | 164,100 | |||
12,458,458 | |||||
Medical Products and Devices - 6.0% | |||||
15,000 | 266,250 | ||||
Allied Healthcare Products a |
246,998 | 1,679,586 | |||
14,000 | 190,680 | ||||
Anika Therapeutics a |
17,000 | 146,030 | |||
Atrion Corporation |
4,000 | 383,280 |
SHARES | VALUE | ||||
Health (continued) | |||||
Medical Products and Devices (continued) | |||||
Caliper Life Sciences a |
50,000 | $ | 129,500 | ||
26,243 | 215,193 | ||||
60,230 | 191,531 | ||||
20,212 | 77,816 | ||||
Cerus Corporation a |
109,600 | 448,264 | |||
CONMED Corporation a |
3,900 | 103,545 | |||
42,800 | 386,484 | ||||
15,000 | 297,300 | ||||
Del Global Technologies a |
461,301 | 691,952 | |||
24,666 | 42,672 | ||||
Exactech a |
110,000 | 2,828,100 | |||
61,700 | 201,759 | ||||
Kensey Nash a |
26,650 | 854,132 | |||
125,250 | 1,298,843 | ||||
Merit Medical Systems a |
8,700 | 127,890 | |||
21,500 | 30,100 | ||||
17,000 | 79,390 | ||||
28,000 | 810,600 | ||||
65,000 | 65,000 | ||||
28,000 | 279,440 | ||||
PLC Systems a |
105,200 | 37,872 | |||
SenoRx a |
40,100 | 309,572 | |||
Shamir Optical Industry |
17,500 | 121,625 | |||
Syneron Medical a |
80,400 | 1,321,776 | |||
20,000 | 376,600 | ||||
Thermage a |
145,400 | 415,844 | |||
Utah Medical Products |
42,300 | 1,209,357 | |||
16,300 | 202,772 | ||||
Young Innovations |
61,450 | 1,279,389 | |||
17,100,144 | |||||
Total (Cost $37,857,161) | 41,451,869 | ||||
Industrial Products 17.4% | |||||
Automotive - 1.1% | |||||
8,800 | 204,864 | ||||
24,000 | 224,400 | ||||
22,800 | 411,996 | ||||
50,600 | 271,216 | ||||
Spartan Motors |
6,300 | 47,061 | |||
Strattec Security |
28,300 | 996,726 | |||
225,900 | 817,758 | ||||
Wescast Industries Cl. A a |
12,900 | 85,519 | |||
3,059,540 | |||||
Building Systems and Components - 1.1% | |||||
AAON |
109,500 | 2,108,970 | |||
Bunka Shutter |
90,000 | 361,068 | |||
LSI Industries |
90,563 | 735,372 | |||
3,205,410 | |||||
Construction Materials - 2.2% | |||||
Ash Grove Cement |
8,000 | 1,912,000 | |||
Monarch Cement |
50,410 | 1,504,738 | |||
250,000 | 2,932,500 | ||||
6,349,238 | |||||
38 | | | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2008 (unaudited) |
SHARES | VALUE | ||||
Industrial Products (continued) | |||||
Industrial Components - 2.0% | |||||
53,000 | $ | 448,380 | |||
Deswell Industries |
105,300 | 595,998 | |||
103,600 | 1,178,968 | ||||
17,436 | 174,360 | ||||
Planar Systems a |
142,000 | 369,200 | |||
Powell Industries a |
26,800 | 1,350,988 | |||
Tech/Ops Sevcon |
76,200 | 560,070 | |||
97,500 | 958,425 | ||||
5,636,389 | |||||
Machinery - 3.6% | |||||
187,500 | 219,375 | ||||
Alamo Group |
38,600 | 794,774 | |||
Astec Industries a |
200 | 6,428 | |||
Burnham Holdings Cl. A |
95,000 | 1,254,000 | |||
4,900 | 117,992 | ||||
4,500 | 187,380 | ||||
Eastern Company (The) |
39,750 | 604,200 | |||
FreightCar America |
6,300 | 223,650 | |||
Gehl Company a |
20,000 | 295,800 | |||
Gorman-Rupp Company |
5,272 | 210,036 | |||
20,500 | 633,245 | ||||
16,600 | 375,160 | ||||
K-Tron International a |
1,500 | 194,400 | |||
Mueller (Paul) Company |
9,650 | 443,900 | |||
StockerYale a |
305,700 | 180,363 | |||
Sun Hydraulics |
58,425 | 1,885,375 | |||
Tennant Company |
88,200 | 2,652,174 | |||
10,278,252 | |||||
Metal Fabrication and Distribution - 1.4% | |||||
Central Steel & Wire |
1,088 | 718,080 | |||
Dynamic Materials |
4,300 | 141,685 | |||
Encore Wire |
15,000 | 317,850 | |||
Insteel Industries |
400 | 7,324 | |||
Ladish Company a |
10,000 | 205,900 | |||
NN |
114,300 | 1,593,342 | |||
Olympic Steel |
9,700 | 736,424 | |||
Universal Stainless & Alloy Products a |
7,700 | 285,208 | |||
4,005,813 | |||||
Miscellaneous Manufacturing - 3.2% | |||||
Peerless Manufacturing a |
84,400 | 3,955,828 | |||
Quixote Corporation |
245,400 | 2,019,642 | |||
Raven Industries |
73,000 | 2,392,940 | |||
Synalloy Corporation |
58,200 | 897,444 | |||
9,265,854 | |||||
Paper and Packaging - 0.1% | |||||
23,200 | 92,800 | ||||
Wausau Paper |
41,000 | 316,110 | |||
408,910 | |||||
Pumps, Valves and Bearings - 0.5% | |||||
CIRCOR International |
28,000 | 1,371,720 | |||
Specialty Chemicals and Materials - 2.1% | |||||
Aceto Corporation |
284,419 | 2,172,961 | |||
American Vanguard |
19,333 | 237,796 | |||
Balchem Corporation |
33,750 | 780,638 |
SHARES | VALUE | ||||
Industrial Products (continued) | |||||
Specialty Chemicals and Materials (continued) | |||||
Hawkins |
118,167 | $ | 1,767,778 | ||
6,000 | 58,800 | ||||
Park Electrochemical |
25,900 | 629,629 | |||
Symyx Technologies a |
29,000 | 202,420 | |||
5,850,022 | |||||
Textiles - 0.1% | |||||
Unifi a |
100,000 | 252,000 | |||
Total (Cost $35,299,492) | 49,683,148 | ||||
Industrial Services 15.0% | |||||
Advertising and Publishing - 0.3% | |||||
8,200 | 141,450 | ||||
Voyager Learning a |
125,000 | 631,250 | |||
772,700 | |||||
Commercial Services - 6.7% | |||||
84,450 | 378,336 | ||||
50,000 | 311,500 | ||||
25,000 | 1,004,750 | ||||
87,000 | 691,650 | ||||
CDI Corporation |
9,000 | 228,960 | |||
ClearPoint Business Resources a |
120,000 | 57,600 | |||
Diamond Management & Technology Consultants |
188,100 | 980,001 | |||
eTelecare Global Solutions ADR a |
78,500 | 419,190 | |||
Exponent a |
117,600 | 3,693,816 | |||
Forrester Research a |
101,500 | 3,134,320 | |||
General Finance a |
28,100 | 154,550 | |||
68,300 | 1,536,750 | ||||
Hudson Highland Group a |
29,400 | 307,818 | |||
Impellam Group a |
188,800 | 302,729 | |||
Kforce a |
55,000 | 466,950 | |||
Landauer |
21,300 | 1,197,912 | |||
Lincoln Educational Services a |
33,100 | 384,953 | |||
PeopleSupport a |
43,300 | 368,050 | |||
RCM Technologies a |
179,500 | 773,645 | |||
13,300 | 187,264 | ||||
SM&A a |
31,300 | 149,301 | |||
21,800 | 204,920 | ||||
Team a |
4,400 | 151,008 | |||
125,000 | 283,750 | ||||
74,600 | 888,486 | ||||
34,350 | 241,824 | ||||
Westaff a |
362,500 | 409,625 | |||
Willdan Group a |
40,100 | 192,881 | |||
19,102,539 | |||||
Engineering and Construction - 2.2% | |||||
Cavco Industries a |
9,400 | 307,662 | |||
Hanfeng Evergreen a |
17,900 | 229,960 | |||
20,000 | 328,800 | ||||
HLS Systems International a |
165,377 | 866,575 | |||
56,400 | 858,972 | ||||
132,000 | 2,270,400 | ||||
Nobility Homes |
13,800 | 220,110 | |||
Skyline Corporation |
32,100 | 754,350 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | | | 39 |
Schedule of Investments |
SHARES | VALUE | ||||
Industrial Services (continued) | |||||
Engineering and Construction (continued) | |||||
Sterling Construction a |
28,300 | $ | 562,038 | ||
6,398,867 | |||||
Food, Tobacco and Agriculture - 1.5% | |||||
Cal-Maine Foods |
45,000 | 1,484,550 | |||
Farmer Bros. |
42,400 | 896,760 | |||
Galaxy Nutritional Foods a |
4,700 | 705 | |||
Imperial Sugar |
20,120 | 312,464 | |||
ML Macadamia Orchards L.P. a |
120,200 | 411,084 | |||
185,788 | 1,111,012 | ||||
4,216,575 | |||||
Industrial Distribution - 0.9% | |||||
Houston Wire & Cable |
40,375 | 803,463 | |||
Lawson Products |
61,000 | 1,511,580 | |||
Toshin Group |
20,000 | 312,850 | |||
2,627,893 | |||||
Printing - 1.1% | |||||
Bowne & Co. |
66,500 | 847,875 | |||
Champion Industries |
23,500 | 108,805 | |||
Courier Corporation |
30,450 | 611,436 | |||
Ennis |
7,200 | 112,680 | |||
Multi-Color Corporation |
27,900 | 585,621 | |||
Schawk |
60,900 | 730,191 | |||
2,996,608 | |||||
Transportation and Logistics - 2.3% | |||||
100,000 | 100,000 | ||||
Euroseas |
38,000 | 492,860 | |||
Forward Air |
50,700 | 1,754,220 | |||
Frozen Food Express Industries |
92,000 | 621,000 | |||
8,600 | 34,830 | ||||
Marten Transport a |
21,450 | 342,556 | |||
Patriot Transportation Holding a |
3,000 | 240,000 | |||
Universal Truckload Services a |
134,200 | 2,955,084 | |||
6,540,550 | |||||
Other Industrial Services - 0.0% | |||||
Allen-Vanguard Corporation a |
7,700 | 19,256 | |||
Total (Cost $35,966,432) | 42,674,988 | ||||
Natural Resources 13.9% | |||||
Energy Services - 5.8% | |||||
Boots & Coots International Well Control a |
200,000 | 476,000 | |||
Bronco Drilling a |
25,200 | 463,176 | |||
31,450 | 315,443 | ||||
55,000 | 3,465,000 | ||||
115,000 | 479,550 | ||||
Foraco International |
40,000 | 117,682 | |||
Gulf Island Fabrication |
3,416 | 167,145 | |||
55,400 | 3,223,172 | ||||
43,500 | 759,075 | ||||
44,410 | 111,025 | ||||
Pason Systems |
209,200 | 3,385,113 | |||
Pioneer Drilling a |
7,500 | 141,075 | |||
600 | 47,682 |
SHARES | VALUE | ||||
Natural Resources (continued) | |||||
Energy Services (continued) | |||||
Willbros Group a |
54,100 | $ | 2,370,121 | ||
World Energy Solutions a |
875,300 | 1,115,907 | |||
16,637,166 | |||||
Oil and Gas - 2.3% | |||||
Approach Resources a |
12,000 | 321,480 | |||
Bonavista Energy Trust |
40,100 | 1,472,732 | |||
26,000 | 206,440 | ||||
75,000 | 711,000 | ||||
80,200 | 639,194 | ||||
45,000 | 497,700 | ||||
80,000 | 364,800 | ||||
Nuvista Energy a |
121,000 | 2,078,965 | |||
104,200 | 0 | ||||
102,500 | 118,900 | ||||
6,411,211 | |||||
Precious Metals and Mining - 4.0% | |||||
Allied Nevada Gold a |
136,050 | 801,335 | |||
Aquiline Resources a |
33,900 | 257,317 | |||
197,000 | 967,270 | ||||
15,500 | 378,510 | ||||
Central African Gold a |
89,790 | 33,534 | |||
Chesapeake Gold a |
20,000 | 147,102 | |||
Duluth Metals a |
87,500 | 218,814 | |||
Endeavour Mining Capital |
337,000 | 2,445,621 | |||
Endeavour Silver a |
50,000 | 156,000 | |||
Entree Gold a |
177,900 | 345,126 | |||
Etruscan Resources a |
20,000 | 32,363 | |||
Gammon Gold a |
83,836 | 909,621 | |||
Gateway Gold a |
400,000 | 92,184 | |||
168,100 | 452,189 | ||||
Great Basin Gold a |
13,500 | 45,940 | |||
Greystar Resources a |
11,900 | 45,163 | |||
Liberty Mines a |
182,900 | 121,969 | |||
Mercator Minerals a |
9,400 | 112,188 | |||
50,000 | 334,500 | ||||
Midway Gold a |
347,500 | 681,573 | |||
Minefinders Corporation a |
36,000 | 374,400 | |||
141,200 | 1,083,004 | ||||
Northgate Minerals a |
270,000 | 742,500 | |||
Quaterra Resources a |
40,000 | 127,488 | |||
18,565 | 68,505 | ||||
US Silver a |
79,700 | 35,172 | |||
50,000 | 182,500 | ||||
Yamana Gold |
8,145 | 134,718 | |||
11,326,606 | |||||
Real Estate - 1.7% | |||||
13,204 | 399,949 | ||||
HomeFed Corporation a |
11,352 | 532,977 | |||
21,500 | 919,125 | ||||
PICO Holdings a |
45,700 | 1,985,665 | |||
Pope Resources L.P. |
33,000 | 1,065,900 | |||
4,903,616 | |||||
40 | | | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2008 (unaudited) |
SHARES | VALUE | ||||
Natural Resources (continued) | |||||
Other Natural Resources - 0.1% | |||||
Neo Material Technologies a |
61,500 | $ | 265,372 | ||
Total (Cost $19,993,198) | 39,543,971 | ||||
Technology 22.6% | |||||
Aerospace and Defense - 2.3% | |||||
Aerovironment a |
11,100 | 301,698 | |||
American Science & Engineering |
2,400 | 123,672 | |||
Astronics Corporation a |
26,400 | 367,224 | |||
Ducommun a |
72,100 | 1,655,416 | |||
HEICO Corporation |
41,600 | 1,353,664 | |||
HEICO Corporation Cl. A |
24,160 | 642,173 | |||
Integral Systems a |
40,510 | 1,567,737 | |||
45,800 | 462,580 | ||||
6,474,164 | |||||
Components and Systems - 3.3% | |||||
Aladdin Knowledge Systems a |
40,500 | 546,750 | |||
122,581 | 729,357 | ||||
Evans & Sutherland Computer a |
96,272 | 97,235 | |||
Excel Technology a |
106,900 | 2,386,008 | |||
3,200 | 4,032 | ||||
InFocus Corporation a |
318,100 | 477,150 | |||
Keithley Instruments |
14,000 | 133,000 | |||
Maxwell Technologies a |
28,600 | 303,732 | |||
20,000 | 351,800 | ||||
MOCON |
15,600 | 169,884 | |||
MTS Systems |
10,000 | 358,800 | |||
OPTEX Company |
35,000 | 474,313 | |||
Richardson Electronics |
305,000 | 1,808,650 | |||
20,000 | 247,800 | ||||
34,000 | 102,000 | ||||
44,400 | 170,052 | ||||
41,400 | 339,480 | ||||
TransAct Technologies a |
78,600 | 650,808 | |||
9,350,851 | |||||
Distribution - 0.5% | |||||
Agilysys |
90,000 | 1,020,600 | |||
Alliance Distributors Holding a |
578,400 | 138,816 | |||
China 3C Group a |
181,300 | 233,877 | |||
40,000 | 194,400 | ||||
1,587,693 | |||||
Internet Software and Services - 0.6% | |||||
49,200 | 165,312 | ||||
190,000 | 393,300 | ||||
355,800 | 498,120 | ||||
NIC |
26,800 | 183,044 | |||
43,650 | 363,604 | ||||
1,603,380 | |||||
IT Services - 4.4% | |||||
182,662 | 1,134,331 | ||||
Computer Task Group a |
481,100 | 2,463,232 | |||
273,400 | 2,222,742 | ||||
2,000 | 5,860 | ||||
500,000 | 3,210,000 |
SHARES | VALUE | ||||
Technology (continued) | |||||
IT Services (continued) | |||||
Syntel |
54,300 | $ | 1,830,996 | ||
TriZetto Group (The) a |
72,600 | 1,552,188 | |||
4,500 | 50,355 | ||||
12,469,704 | |||||
Semiconductors and Equipment - 4.2% | |||||
Actions Semiconductor ADR a |
44,450 | 153,353 | |||
Cascade Microtech a |
55,037 | 362,143 | |||
Catalyst Semiconductor a |
269,800 | 1,170,932 | |||
CEVA a |
47,534 | 378,846 | |||
Cohu |
17,900 | 262,772 | |||
17,500 | 196,000 | ||||
281,700 | 535,230 | ||||
121,208 | 913,908 | ||||
GSI Technology a |
41,300 | 160,244 | |||
Ikanos Communications a |
98,700 | 332,619 | |||
40,550 | 457,404 | ||||
54,283 | 616,655 | ||||
2,000 | 17,840 | ||||
36,000 | 171,360 | ||||
Melco Holdings |
30,000 | 589,066 | |||
Nanometrics a |
37,000 | 215,340 | |||
85,000 | 505,750 | ||||
Photronics a |
29,750 | 209,440 | |||
24,500 | 188,650 | ||||
Semitool a |
25,500 | 191,505 | |||
20,600 | 88,992 | ||||
Trident Microsystems a |
82,400 | 300,760 | |||
TTM Technologies a |
159,500 | 2,106,995 | |||
38,000 | 302,480 | ||||
Virage Logic a |
180,000 | 1,288,800 | |||
Zarlink Semiconductor a |
188,700 | 166,075 | |||
11,883,159 | |||||
Software - 4.6% | |||||
ACI Worldwide a |
97,600 | 1,716,784 | |||
American Software Cl. A |
56,100 | 316,404 | |||
Bottomline Technologies a |
20,000 | 194,600 | |||
170,000 | 241,400 | ||||
DivX a |
23,200 | 170,288 | |||
Fundtech a |
51,000 | 733,890 | |||
35,000 | 346,500 | ||||
59,500 | 1,076,950 | ||||
239,600 | 313,876 | ||||
Pegasystems |
353,500 | 4,758,110 | |||
43,000 | 772,710 | ||||
PLATO Learning a |
160,000 | 424,000 | |||
Renaissance Learning |
2,365 | 26,512 | |||
20,000 | 143,200 | ||||
41,800 | 1,520,266 | ||||
TeleCommunication Systems Cl. A a |
10,000 | 46,300 | |||
82,700 | 191,037 | ||||
35,000 | 281,400 | ||||
13,274,227 | |||||
Telecommunications - 2.7% | |||||
Anaren a |
50,900 | 538,013 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | | | 41 |
Schedule of Investments |
SHARES | VALUE | |||||
Technology (continued) | ||||||
Telecommunications (continued) | ||||||
Atlantic Tele-Network |
4,100 | $ | 112,791 | |||
Captaris a |
43,300 | 175,365 | ||||
24,800 | 332,320 | |||||
Communications Systems |
10,700 | 115,025 | ||||
Diguang International Development a |
300,000 | 300,000 | ||||
9,400 | 166,474 | |||||
68,500 | 35,620 | |||||
Globecomm Systems a |
40,130 | 331,474 | ||||
NMS Communications a |
630,000 | 699,300 | ||||
Novatel Wireless a |
60,900 | 677,817 | ||||
28,700 | 207,501 | |||||
15,900 | 152,640 | |||||
PC-Tel |
44,100 | 422,919 | ||||
Performance Technologies a |
41,250 | 208,725 | ||||
Radyne Corporation a |
2,000 | 22,860 | ||||
REMEC |
143,387 | 172,064 | ||||
19,900 | 290,540 | |||||
81,982 | 314,811 | |||||
23,800 | 106,862 | |||||
76,812 | 1,552,371 | |||||
Zhone Technologies a |
931,600 | 726,648 | ||||
7,662,140 | ||||||
Total (Cost $51,756,471) | 64,305,318 | |||||
Miscellaneouse 2.6% | ||||||
Total (Cost $7,814,836) | 7,454,226 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $277,026,254) |
339,855,592 | |||||
PREFERRED STOCK 0.5% | ||||||
Seneca Foods Conv. a |
||||||
(Cost $943,607) |
75,409 | 1,511,950 | ||||
REPURCHASE AGREEMENT 2.0% | ||||||
State Street Bank & Trust Company, | ||||||
2.05% dated 6/30/08, due 7/1/08, |
||||||
maturity value $5,551,316 (collateralized |
||||||
by obligations of various U.S. Government |
||||||
Agencies, valued at $5,692,938) |
||||||
(Cost $5,551,000) |
5,551,000 | |||||
PRINCIPAL | ||||||
AMOUNT | ||||||
COLLATERAL RECEIVED FOR SECURITIES | ||||||
LOANED 12.0% |
||||||
Fannie Mae-Notes | ||||||
3.20%-5.38% |
||||||
due 5/6/10-10/30/14 |
$ | 155 | 158 | |||
Federal Home Loan Bank-Bonds | ||||||
5.125% |
||||||
due 8/8/08 |
669 | 682 |
PRINCIPAL AMOUNT |
VALUE | ||||||
Federal Home Loan Bank-Discount Notes | |||||||
due 8/1/08 |
$ | 153 | $ | 153 | |||
Freddie Mac-Bonds | |||||||
5.00% |
|||||||
due 12/14/18 |
202 | 203 | |||||
Freddie Mac-Notes | |||||||
3.30% |
|||||||
due 3/5/10 |
23,680 | 23,935 | |||||
U.S. Treasury Bonds | |||||||
2.00%-7.50% |
|||||||
due 11/15/16-2/15/31 |
6,715 | 6,758 | |||||
U.S. Treasury Notes | |||||||
3.50%-5.75% |
|||||||
due 7/15/09-6/30/12 |
38,526 | 39,201 | |||||
U.S. Treasury Notes-TIPS | |||||||
3.00% |
|||||||
due 7/15/12 |
3 | 3 | |||||
Money Market Funds | |||||||
State Street Navigator Securities Lending |
|||||||
Prime Portfolio (7 day yield-2.6748%) |
34,282,421 | ||||||
TOTAL COLLATERAL RECEIVED FOR | |||||||
SECURITIES LOANED |
|||||||
(Cost $34,353,514) |
34,353,514 | ||||||
TOTAL INVESTMENTS 133.7% | |||||||
(Cost $317,874,375) |
381,272,056 | ||||||
LIABILITIES LESS CASH | |||||||
AND OTHER ASSETS (12.7)% |
(36,026,961 | ) | |||||
PREFERRED STOCK (21.0)% | (60,000,000 | ) | |||||
NET ASSETS APPLICABLE TO COMMON | |||||||
STOCKHOLDERS 100.0% |
$ | 285,245,095 | |||||
42 | | | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
June 30, 2008 (unaudited) |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | | | 43 |
Royce Micro-Cap Trust | June 30, 2008 (unaudited) | |
Statement of Assets and Liabilities |
ASSETS: | ||||||||||||||||||||
Investments at value (including collateral on loaned securities)* | ||||||||||||||||||||
Non-Affiliated Companies (cost $311,209,826) |
$ | 375,711,563 | ||||||||||||||||||
Affiliated Companies (cost $1,113,549) |
9,493 | |||||||||||||||||||
Total investments at value | 375,721,056 | |||||||||||||||||||
Repurchase agreements (at cost and value) | 5,551,000 | |||||||||||||||||||
Cash and foreign currency | 34,866 | |||||||||||||||||||
Receivable for investments sold | 658,262 | |||||||||||||||||||
Receivable for dividends and interest | 341,838 | |||||||||||||||||||
Prepaid expenses and other assets | 10,198 | |||||||||||||||||||
Total Assets |
382,317,220 | |||||||||||||||||||
LIABILITIES: | ||||||||||||||||||||
Payable for collateral on loaned securities | 34,353,514 | |||||||||||||||||||
Payable for investments purchased | 2,159,947 | |||||||||||||||||||
Payable for investment advisory fee | 371,046 | |||||||||||||||||||
Preferred dividends accrued but not yet declared | 80,000 | |||||||||||||||||||
Accrued expenses | 107,618 | |||||||||||||||||||
Total Liabilities |
37,072,125 | |||||||||||||||||||
PREFERRED STOCK: | ||||||||||||||||||||
6.00% Cumulative Preferred Stock - $0.001 par value, $25 liquidation value per share; 2,400,000 shares outstanding | 60,000,000 | |||||||||||||||||||
Total Preferred Stock |
60,000,000 | |||||||||||||||||||
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS | $ | 285,245,095 | ||||||||||||||||||
ANALYSIS OF NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: | ||||||||||||||||||||
Common Stock paid-in capital - $0.001 par value per share; 25,397,380 shares outstanding (150,000,000 shares authorized) | $ | 230,792,944 | ||||||||||||||||||
Undistributed net investment income (loss) | (1,628,009 | ) | ||||||||||||||||||
Accumulated net realized gain (loss) on investments and foreign currency | 10,433,395 | |||||||||||||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 63,397,503 | |||||||||||||||||||
Quarterly and accrued distributions | (17,750,738 | ) | ||||||||||||||||||
Net Assets applicable to Common Stockholders (net asset value per share - $11.23) |
$ | 285,245,095 | ||||||||||||||||||
*Investments at identified cost (including $34,353,514 of collateral on loaned securities) | $ | 312,323,375 | ||||||||||||||||||
Market value of loaned securities | 32,319,901 |
44 | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce Micro-Cap Trust | Six Months Ended June 30, 2008 (unaudited) | |
Statement of Operations |
INVESTMENT INCOME: | |||||
Income: | |||||
Dividends* |
|||||
Non-Affiliated Companies |
$ | 1,755,968 | |||
Affiliated Companies |
| ||||
Interest |
206,016 | ||||
Securities lending |
253,438 | ||||
Total income | 2,215,422 | ||||
Expenses: | |||||
Investment advisory fees |
2,201,608 | ||||
Stockholder reports |
69,948 | ||||
Custody and transfer agent fees |
38,740 | ||||
Directors fees |
29,643 | ||||
Professional fees |
19,262 | ||||
Administrative and office facilities expenses |
15,972 | ||||
Other expenses |
32,750 | ||||
Total expenses | 2,407,923 | ||||
Net investment income (loss) | (192,501 | ) | |||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | |||||
Net realized gain (loss)on investments and foreign currency | |||||
Non-Affiliated Companies |
7,279,461 | ||||
Affiliated Companies |
(32,865 | ) | |||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (44,354,044 | ) | |||
Net realized and unrealized gain (loss) on investments and foreign currency | (37,107,448 | ) | |||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM INVESTMENT OPERATIONS | (37,299,949 | ) | |||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS | (1,800,000 | ) | |||
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS RESULTING FROM INVESTMENT OPERATIONS | $ | (39,099,949 | ) | ||
* Net of foreign withholding tax of $29,874. |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | 45 |
Royce Micro-Cap Trust | ||
Statement of Changes in Net Assets |
Six months ended | ||||||||
6/30/08 | Year ended | |||||||
(unaudited) | 12/31/07 | |||||||
INVESTMENT OPERATIONS: | ||||||||
Net investment income (loss) | $ | (192,501 | ) | $ | (234,430 | ) | ||
Net realized gain (loss) on investments and foreign currency | 7,246,596 | 32,803,797 | ||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (44,354,044 | ) | (27,184,286 | ) | ||||
Net increase (decrease) in net assets resulting from investment operations | (37,299,949 | ) | 5,385,081 | |||||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: | ||||||||
Net investment income | | (224,280 | ) | |||||
Net realized gain on investments and foreign currency | | (3,375,720 | ) | |||||
Quarterly distributions* | (1,800,000 | ) | | |||||
Total distributions to Preferred Stockholders | (1,800,000 | ) | (3,600,000 | ) | ||||
NET INCREASE
(DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS |
(39,099,949 | ) | 1,785,081 | |||||
DISTRIBUTIONS TO COMMON STOCKHOLDERS: | ||||||||
Net investment income | | (1,991,543 | ) | |||||
Net realized gain on investments and foreign currency | | (29,975,444 | ) | |||||
Quarterly distributions* | (15,870,738 | ) | | |||||
Total distributions to Common Stockholders | (15,870,738 | ) | (31,966,987 | ) | ||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Reinvestment of distributions to Common Stockholders | 8,740,266 | 17,975,152 | ||||||
Total capital stock transactions | 8,740,266 | 17,975,152 | ||||||
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS | (46,230,421 | ) | (12,206,754 | ) | ||||
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: | ||||||||
Beginning of period |
331,475,516 | 343,682,270 | ||||||
End of period (including undistributed net investment income (loss) of $(1,628,009) at 6/30/08 and $(1,435,509) at 12/31/07) |
$ | 285,245,095 | $ | 331,475,516 |
46 | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce Micro-Cap Trust | ||
Financial Highlights |
This table is presented to show selected data for a share of Common Stock outstanding throughout each period, and to assist stockholders in evaluating the Funds performance for the periods presented. | ||||||||||||||||||||||||
Six months | Years ended December 31, | |||||||||||||||||||||||
ended | ||||||||||||||||||||||||
June 30, 2008 | ||||||||||||||||||||||||
(unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
NET ASSET VALUE, BEGINNING OF PERIOD | $ | 13.48 | $ | 14.77 | $ | 13.43 | $ | 14.34 | $ | 13.33 | $ | 9.39 | ||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) |
(0.01 | ) | (0.00 | ) | 0.01 | (0.03 | ) | (0.08 | ) | (0.09 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments and |
||||||||||||||||||||||||
foreign currency |
(1.50 | ) | 0.24 | 3.04 | 1.14 | 2.62 | 5.28 | |||||||||||||||||
Total investment operations |
(1.51 | ) | 0.24 | 3.05 | 1.11 | 2.54 | 5.19 | |||||||||||||||||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: | ||||||||||||||||||||||||
Net investment income |
| (0.01 | ) | (0.02 | ) | | | | ||||||||||||||||
Net realized gain on investments and foreign currency |
| (0.14 | ) | (0.14 | ) | (0.17 | ) | (0.19 | ) | (0.18 | ) | |||||||||||||
Quarterly distributions* |
(0.07 | ) | | | | | | |||||||||||||||||
Total distributions to Preferred Stockholders |
(0.07 | ) | (0.15 | ) | (0.16 | ) | (0.17 | ) | (0.19 | ) | (0.18 | ) | ||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON | ||||||||||||||||||||||||
STOCKHOLDERS RESULTING FROM INVESTMENT OPERATIONS |
(1.58 | ) | 0.09 | 2.89 | 0.94 | 2.35 | 5.01 | |||||||||||||||||
DISTRIBUTIONS TO COMMON STOCKHOLDERS: | ||||||||||||||||||||||||
Net investment income |
| (0.08 | ) | (0.20 | ) | | | | ||||||||||||||||
Net realized gain on investments and foreign currency |
| (1.27 | ) | (1.35 | ) | (1.85 | ) | (1.33 | ) | (0.92 | ) | |||||||||||||
Quarterly distributions* |
(0.64 | ) | | | | | | |||||||||||||||||
Total distributions to Common Stockholders |
(0.64 | ) | (1.35 | ) | (1.55 | ) | (1.85 | ) | (1.33 | ) | (0.92 | ) | ||||||||||||
CAPITAL STOCK TRANSACTIONS: | ||||||||||||||||||||||||
Effect of reinvestment of distributions by Common Stockholders |
(0.03 | ) | (0.03 | ) | (0.00 | ) | 0.00 | (0.01 | ) | (0.04 | ) | |||||||||||||
Effect of Preferred Stock offering |
| | | | | (0.11 | ) | |||||||||||||||||
Total capital stock transactions |
(0.03 | ) | (0.03 | ) | (0.00 | ) | 0.00 | (0.01 | ) | (0.15 | ) | |||||||||||||
NET ASSET VALUE, END OF PERIOD | $ | 11.23 | $ | 13.48 | $ | 14.77 | $ | 13.43 | $ | 14.34 | $ | 13.33 | ||||||||||||
MARKET VALUE, END OF PERIOD | $ | 10.37 | $ | 11.94 | $ | 16.57 | $ | 14.56 | $ | 15.24 | $ | 12.60 | ||||||||||||
TOTAL RETURN (a): | ||||||||||||||||||||||||
Market Value | (7.94 | )%*** | (20.54 | )% | 26.72 | % | 8.90 | % | 33.44 | % | 63.58 | % | ||||||||||||
Net Asset Value | (11.70 | )%*** | 0.64 | % | 22.46 | % | 6.75 | % | 18.69 | % | 55.55 | % | ||||||||||||
RATIOS BASED ON AVERAGE NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: | ||||||||||||||||||||||||
Total expenses (b,c) | 1.61 | %** | 1.56 | % | 1.64 | % | 1.63 | % | 1.62 | % | 1.82 | % | ||||||||||||
Management fee expense (d) |
1.47 | %** | 1.44 | % | 1.49 | % | 1.43 | % | 1.43 | % | 1.59 | % | ||||||||||||
Other operating expenses |
0.14 | %** | 0.12 | % | 0.15 | % | 0.20 | % | 0.19 | % | 0.23 | % | ||||||||||||
Net investment income (loss) | (0.13 | )%** | (0.07 | )% | 0.05 | % | (0.27 | )% | (0.56 | )% | (0.82 | )% | ||||||||||||
SUPPLEMENTAL DATA: | ||||||||||||||||||||||||
Net Assets Applicable to Common Stockholders, | ||||||||||||||||||||||||
End of Period (in thousands) |
$285,245 | $331,476 | $343,682 | $293,719 | $290,364 | $253,425 | ||||||||||||||||||
Liquidation Value of Preferred Stock, End of Period (in thousands) | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 | ||||||||||||||||||
Portfolio Turnover Rate | 17 | % | 41 | % | 34 | % | 46 | % | 32 | % | 26 | % | ||||||||||||
PREFERRED STOCK: | ||||||||||||||||||||||||
Total shares outstanding | 2,400,000 | 2,400,000 | 2,400,000 | 2,400,000 | 2,400,000 | 2,400,000 | ||||||||||||||||||
Asset coverage per share | $ | 143.85 | $ | 163.11 | $ | 168.20 | $ | 147.38 | $ | 145.98 | $ | 130.59 | ||||||||||||
Liquidation preference per share | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | ||||||||||||
Average market value per share (e): | ||||||||||||||||||||||||
6.00% Cumulative |
$ | 24.17 | $ | 24.06 | $ | 24.15 | $ | 24.97 | $ | 24.66 | $ | 25.37 | ||||||||||||
7.75% Cumulative |
| | | | | $ | 25.70 | |||||||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | 47 |
Royce Micro-Cap Trust | ||
Notes to Financial Statements (unaudited) |
Various inputs are used in determining the value of the Funds investments. These inputs are summarized in the three broad levels below: | ||
Level 1 quoted prices in active markets for identical securities | ||
Level 2 other significant observable inputs (including quoted prices for similar securities, foreign securities that may be fair valued and repurchase agreements) | ||
Level 3 significant observable inputs (including the Funds own assumptions in determining the fair value of investments) | ||
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. | ||
The following is a summary of the inputs used to value the Funds investments as of June 30, 2008: |
Level 1 | Level 2 | Level 3 | Total | ||||
$310,781,325 | $70,335,964 | $154,767 | $381,272,056 | ||||
Level 3 Reconciliation: | |||||||
Change in unrealized appreciation | |||||||
Balance as of 12/31/07 | (depreciation) | Purchases | Balance as of 6/30/08 | ||||
$0 | $(2,568) | $157,335 | $154,767 | ||||
Repurchase Agreements:
The Fund
may enter into repurchase agreements with institutions that the Funds 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.
Foreign Currency:
The Fund values its non-U.S. securities
in U.S. dollars daily at the prevailing foreign currency exchange rates as quoted
by a major bank. The effects of changes in foreign exchange rates on investments
and other assets and liabilities are included with net realized and unrealized gains
and losses on investments.
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 Funds 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, including investments in securities at
the end of the reporting period, as a result of changes in foreign currency exchange
rates.
48 | 2008 Semiannual Report to Stockholders |
Royce Micro-Cap Trust | ||
Notes to Financial Statements (unaudited) (continued) |
Securities Lending:
The Fund loans
securities to qualified institutional investors for the purpose of realizing additional
income. Collateral on all securities loaned for the Fund is accepted in cash
and cash equivalents and invested temporarily by the custodian. The collateral is
equal to at least 100% of the current market value of the loaned securities.
The market value of the loaned securities is determined at the close of business
of the Fund and any additional required collateral is delivered to the Fund on
the next business day.
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 Income Tax Information.
Distributions:
The Fund currently has a policy of paying quarterly distributions on the
Funds Common Stock. Distributions are currently being made at the annual
rate of 9% of the rolling average of the prior four calendar quarter-end NAVs of
the Funds Common Stock, with the fourth quarter distribution being the
greater of 2.25% of the rolling average or the distribution required by IRS regulations.
Distributions to Preferred Stockholders are accrued daily and paid quarterly
and distributions to Common Stockholders are recorded on ex-dividend date. The Fund
is required to allocate long-term capital gain distributions and other types
of income proportionately to distributions made to holders of shares of Common Stock
and Preferred Stock. To the extent that distributions 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. Non-cash dividend income is recorded at the fair market
value of the securities received. Interest income is recorded on an accrual basis.
Premium 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 Funds operations, while expenses applicable to
more than one of the Royce Funds are allocated equitably. Allocated personnel and
occupancy costs related to The Royce Funds are included in administrative and
office facilities expenses. The Fund has adopted a deferred fee agreement that allows
the Directors to defer the receipt of all or a portion of Directors Fees
otherwise payable. The deferred fees are invested in certain Royce Funds until distributed
in accordance with the agreement.
Compensating Balance Credits:
The Fund has an arrangement with its custodian bank, whereby a portion of the custodians fee is paid indirectly by credits earned on the Funds cash on deposit
with the bank. This deposit arrangement is an alternative to purchasing overnight
investments. Conversely, the Fund pays interest to the custodian on any cash
overdrafts, to the extent they are not offset by credits earned on positive cash
balances.
Capital Stock:
The Fund issued 806,280 and 1,320,682 shares
of Common Stock as reinvestment of distributions by Common Stockholders for the
six months ended June 30, 2008 and the year ended December 31, 2007, respectively.
At June 30, 2008, 2,400,000 shares of 6.00% Cumulative Preferred Stock were outstanding.
Commencing October 16, 2008 and thereafter, the Fund, at its option, may redeem
the Cumulative Preferred Stock, in whole or in part, at the redemption price. The
Cumulative Preferred Stock is classified outside of permanent equity (net assets
applicable to Common Stockholders) in the accompanying financial statements in accordance
with Emerging Issues Task Force (EITF) Topic D-98, Classification and Measurement
of Redeemable Securities, that requires preferred securities that are redeemable
for cash or other assets to be classified outside of permanent equity to the extent
that the redemption is at a fixed or determinable price and at the option of
the holder or upon the occurrence of an event that is not solely within the control
of the issuer.
The Fund is required to meet certain asset coverage tests with
respect to the Cumulative Preferred Stock as required by the 1940 Act. In addition,
pursuant to the Rating Agency Guidelines established by Moodys, the Fund
is required to maintain a certain discounted asset coverage. If the Fund fails
to meet these requirements and does not correct such failure, the Fund may be required
to redeem, in part or in full, the Cumulative Preferred Stock at a redemption
price of $25.00 per share, plus an amount equal to the accumulated and unpaid dividends,
whether or not declared on such shares, in order to meet these requirements.
Additionally, failure to meet the foregoing asset coverage requirements could restrict
the Funds ability to pay dividends to Common Stockholders and could lead
to sales of portfolio securities at inopportune times. The Fund has met these requirements
since issuing the Cumulative Preferred Stock.
2008 Semiannual Report to Stockholders | 49 |
Royce Micro-Cap Trust | ||
Notes to Financial Statements (unaudited) (continued) |
Investment Advisory Agreement:
As compensation for its services under the Investment Advisory Agreement, Royce
& Associates, LLC (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 Basic Fee is a monthly fee equal to 1/12 of 1% (1% on an annualized basis)
of the average of the Funds month-end net assets applicable to Common Stockholders,
plus the liquidation value of Preferred Stock, 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.
Royce has voluntarily
committed to waive the portion of its investment advisory fee attributable to an
issue of the Funds Preferred Stock for any month in which the Funds
average annual NAV total return since issuance of the Preferred Stock fails to exceed
the applicable Preferred Stocks dividend rate.
For the six rolling 36-month
periods ended June 2008, the investment performance of the Fund exceeded the investment
performance of the Russell 2000 by 3% to 8%. Accordingly, the investment advisory
fee consisted of a Basic Fee of $1,928,494 and an upward adjustment of $273,114
for performance of the Fund above that of the Russell 2000. For the six months ended
June 30, 2008, the Fund accrued and paid Royce advisory fees totaling $2,201,608.
Purchases and Sales of Investment Securities:
For the six months ended
June 30, 2008, the cost of purchases and proceeds from sales of investment securities,
other than short-term securities and collateral received for securities loaned,
amounted to $66,394,531 and $60,554,146, respectively.
Transactions in Shares
of Affiliated Companies:
An Affiliated Company as defined in
the Investment Company Act of 1940, is a company in which a Fund owns 5% or more
of the companys outstanding voting securities at any time during the period.
The Fund effected the following transactions in shares of such companies for the
six months ended June 30, 2008:
Shares | Market Value | Cost of | Cost of | Realized | Dividend | Shares | Market Value | |||||||||||
Affiliated Company | 12/31/07 | 12/31/07 | Purchases | Sales | Gain (Loss) | Income | 6/30/08 | 6/30/08 | ||||||||||
BKF Capital Group* | 406,500 | $ | 902,430 | - | $73,854 | $(32,865) | - | |||||||||||
Tapestry Pharmaceuticals | 815,600 | 244,680 | $13,272 | - | - | - | 863,000 | $9,493 | ||||||||||
$ | 1,147,110 | $(32,865) | - | $9,493 | ||||||||||||||
*Not an Affiliated Company at June 30, 2008. |
50 | 2008 Semiannual Report to Stockholders |
Royce Focus Trust | June 30, 2008 (unaudited) | |
Schedule of Investments |
SHARES | VALUE | |||||
COMMON STOCKS 97.5% | ||||||
Consumer Products 10.0% | ||||||
Apparel, Shoes and Accessories - 3.5% | ||||||
120,000 | $ | 3,488,400 | ||||
Timberland Company (The) Cl. A b |
150,000 | 2,452,500 | ||||
5,940,900 | ||||||
Food/Beverage/Tobacco - 1.7% | ||||||
Sanderson Farms |
80,000 | 2,761,600 | ||||
Health, Beauty and Nutrition - 1.8% | ||||||
Nu Skin Enterprises Cl. A |
200,000 | 2,984,000 | ||||
Sports and Recreation - 3.0% | ||||||
Thor Industries |
150,000 | 3,189,000 | ||||
Winnebago Industries |
180,000 | 1,834,200 | ||||
5,023,200 | ||||||
Total (Cost $20,993,363) | 16,709,700 | |||||
Consumer Services 2.1% | ||||||
Retail Stores - 2.1% | ||||||
40,100 | 960,796 | |||||
Mens Wearhouse (The) |
100,000 | 1,629,000 | ||||
Williams-Sonoma |
50,000 | 992,000 | ||||
Total (Cost $3,832,878) | 3,581,796 | |||||
Financial Intermediaries 6.2% | ||||||
Banking - 1.1% | ||||||
BB Holdings b |
400,000 | 1,812,583 | ||||
Securities Brokers - 3.2% | ||||||
300,000 | 5,394,000 | |||||
Other Financial Intermediaries - 1.9% | ||||||
KKR Financial Holdings |
300,000 | 3,150,000 | ||||
Total (Cost $9,674,832) | 10,356,583 | |||||
Financial Services 2.3% | ||||||
Investment Management - 2.3% | ||||||
U.S. Global Investors Cl. A |
226,000 | 3,785,500 | ||||
Total (Cost $3,590,422) | 3,785,500 | |||||
Health 3.4% | ||||||
Drugs and Biotech - 2.8% | ||||||
120,000 | 2,902,800 | |||||
500,000 | 800,000 | |||||
1,200,000 | 1,020,000 | |||||
4,722,800 | ||||||
Medical Products and Devices - 0.6% | ||||||
352,300 | 912,457 | |||||
Total (Cost $8,570,584) | 5,635,257 | |||||
Industrial Products 24.3% | ||||||
Building Systems and Components - 1.8% | ||||||
Simpson Manufacturing |
130,000 | 3,086,200 | ||||
Machinery - 4.3% | ||||||
Lincoln Electric Holdings |
60,000 | 4,722,000 |
SHARES | VALUE | |||||
Industrial Products (continued) | ||||||
Machinery (continued) | ||||||
Woodward Governor |
70,000 | $ | 2,496,200 | |||
7,218,200 | ||||||
Metal Fabrication and Distribution - 13.1% | ||||||
Dynamic Materials |
30,000 | 988,500 | ||||
Kennametal |
118,600 | 3,860,430 | ||||
Reliance Steel & Aluminum |
100,000 | 7,709,000 | ||||
Schnitzer Steel Industries Cl. A |
30,000 | 3,438,000 | ||||
Sims Group ADR |
150,000 | 5,985,000 | ||||
21,980,930 | ||||||
Miscellaneous Manufacturing - 1.2% | ||||||
Rational |
10,000 | 2,016,872 | ||||
Pumps, Valves and Bearings - 3.9% | ||||||
60,000 | 3,408,000 | |||||
Pfeiffer Vacuum Technology |
30,000 | 3,111,745 | ||||
6,519,745 | ||||||
Total (Cost $18,348,521) | 40,821,947 | |||||
Industrial Services 8.5% | ||||||
Commercial Services - 5.0% | ||||||
149,900 | 1,740,339 | |||||
CRA International b |
40,000 | 1,446,000 | ||||
180,000 | 2,831,400 | |||||
30,000 | 1,443,600 | |||||
Universal Technical Institute b |
80,100 | 998,046 | ||||
8,459,385 | ||||||
Food, Tobacco and Agriculture - 1.8% | ||||||
Industrias Bachoco ADR |
100,000 | 2,960,000 | ||||
Transportation and Logistics - 1.7% | ||||||
Arkansas Best |
80,000 | 2,931,200 | ||||
Total (Cost $13,897,624) | 14,350,585 | |||||
Natural Resources 29.2% | ||||||
Energy Services - 14.7% | ||||||
Ensign Energy Services |
250,000 | 5,447,681 | ||||
Pason Systems |
180,000 | 2,912,621 | ||||
120,000 | 3,834,000 | |||||
Trican Well Service |
200,000 | 4,972,051 | ||||
Unit Corporation b |
90,000 | 7,467,300 | ||||
24,633,653 | ||||||
Precious Metals and Mining - 14.5% | ||||||
Allied Nevada Gold b |
350,000 | 2,061,500 | ||||
Endeavour Mining Capital |
550,000 | 3,991,370 | ||||
Fronteer Development Group b |
300,000 | 1,506,000 | ||||
Gammon Gold b |
450,000 | 4,882,500 | ||||
Ivanhoe Mines b |
320,000 | 3,491,200 | ||||
120,000 | 4,149,600 | |||||
150,000 | 4,297,500 | |||||
24,379,670 | ||||||
Total (Cost $29,799,872) | 49,013,323 | |||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | 51 |
Royce Focus Trust | June 30, 2008 (unaudited) | |
Schedule of Investments |
SHARES | VALUE | |||||
Technology 11.5% | ||||||
Aerospace and Defense - 1.4% | ||||||
70,000 | $ | 2,401,000 | ||||
Components and Systems - 2.6% | ||||||
200,000 | 4,380,000 | |||||
Semiconductors and Equipment - 3.2% | ||||||
80,100 | 2,895,615 | |||||
180,200 | 2,502,978 | |||||
5,398,593 | ||||||
Telecommunications - 4.3% | ||||||
ADTRAN |
150,000 | 3,576,000 | ||||
Foundry Networks b |
300,000 | 3,546,000 | ||||
7,122,000 | ||||||
Total (Cost $19,291,390) | 19,301,593 | |||||
TOTAL COMMON STOCKS | ||||||
(Cost $127,999,486) |
163,556,284 | |||||
PREFERRED STOCK 5.4% | ||||||
(Cost $9,000,000) |
9,000 | 9,160,740 | ||||
PRINCIPAL | ||||||
AMOUNT | ||||||
GOVERNMENT BOND 5.7% | ||||||
(Principal Amount shown in local currency) | ||||||
Australia Government Bond 7.50% |
||||||
due 9/15/09 |
||||||
(Cost $8,424,285) |
10,000,000 | 9,648,463 | ||||
VALUE | ||||
REPURCHASE AGREEMENT 6.2% | ||||
State Street Bank & Trust Company, | ||||
2.05% dated 6/30/08, due 7/1/08, |
||||
maturity value $10,372,591 (collateralized |
||||
by obligations of various U.S. Government |
||||
Agencies, valued at $10,633,838) |
||||
(Cost $10,372,000) |
$ | 10,372,000 | ||
COLLATERAL RECEIVED FOR SECURITIES | ||||
LOANED 11.0% |
||||
Money Market Funds | ||||
State Street Navigator Securities |
||||
Lending Prime Portfolio (7 day yield-2.6748%) |
||||
(Cost $18,418,888) |
18,418,888 | |||
TOTAL INVESTMENTS 125.8% | ||||
(Cost $174,214,659) |
211,156,375 | |||
LIABILITIES LESS CASH |
||||
AND OTHER ASSETS (10.9)% |
(18,353,594 | ) | ||
PREFERRED STOCK (14.9)% | (25,000,000 | ) | ||
NET ASSETS APPLICABLE TO COMMON | ||||
STOCKHOLDERS 100.0% |
$ | 167,802,781 | ||
| New additions in 2008. | |
a | All or a portion of these securities were on loan at June 30, 2008. Total market value of loaned securities at June 30, 2008 was $17,395,506. | |
b | Non-income producing. | |
c | A security for which market quotations are not readily available represents 5.4% of net assets. This security has been valued at its fair value under procedures established by the Funds Board of Directors. | |
d | This security,
and the common stock into which the security is convertible, are not and will not
be registered under the Securities Act of 1933 and related rules (restricted
security). Accordingly, such securities may not be offered, sold, transferred
or delivered, directly or indirectly, unless (i) such shares are registered under
the Securities Act and any other applicable state securities laws, or (ii) an exemption
from registration under the Securities Act and any other applicable state securities
laws is available. Bold indicates the Funds 20 largest equity holdings in terms of June 30, 2008 market value. |
|
TAX INFORMATION: The cost of total investments for Federal income tax purposes was $174,220,565. At June 30, 2008, net unrealized appreciation for all securities was $36,935,810, consisting of aggregate gross unrealized appreciation of $50,438,009 and aggregate gross unrealized depreciation of $13,502,199. The primary difference in book and tax basis cost is the timing of the recognition of losses on securities sold. | ||
52 | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce Focus Trust | June 30, 2008 (unaudited) | |
Statement of Assets and Liabilities |
ASSETS: | |||||
Investments at value (including collateral on loaned securities)* | $ | 200,784,375 | |||
Repurchase agreements (at cost and value) | 10,372,000 | ||||
Cash and foreign currency | 8,843 | ||||
Receivable for dividends and interest | 306,351 | ||||
Prepaid expenses and other assets | 20,353 | ||||
Total Assets |
211,491,922 | ||||
LIABILITIES: | |||||
Payable for collateral on loaned securities | 18,418,888 | ||||
Payable for investment advisory fee | 161,726 | ||||
Preferred dividends accrued but not yet declared | 33,331 | ||||
Accrued expenses | 75,196 | ||||
Total Liabilities |
18,689,141 | ||||
PREFERRED STOCK: | |||||
6.00% Cumulative Preferred Stock - $0.001 par value, $25 liquidation value per share; 1,000,000 shares outstanding | 25,000,000 | ||||
Total Preferred Stock |
25,000,000 | ||||
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS | $ | 167,802,781 | |||
ANALYSIS OF NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: | |||||
Common Stock paid-in capital - $0.001 par value per share; 18,937,817 shares outstanding (150,000,000 shares authorized) | $ | 132,308,692 | |||
Undistributed net investment income (loss) | (4,195,058 | ) | |||
Accumulated net realized gain (loss) on investments and foreign currency | 8,197,858 | ||||
Net unrealized appreciation (depreciation) on investments and foreign currency | 36,946,562 | ||||
Quarterly and accrued distributions | (5,455,273 | ) | |||
Net Assets applicable to Common Stockholders (net asset value per share - $8.86) |
$ | 167,802,781 | |||
*Investments at identified cost (including $18,418,888 of collateral on loaned securities) |
$ | 163,842,659 | |||
Market value of loaned securities | 17,395,306 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | 53 |
Royce Focus Trust | Six Months Ended June 30, 2008 (unaudited) | |
Statement of Operations |
INVESTMENT INCOME: | |||||
Income: | |||||
Dividends* |
$ | 969,069 | |||
Interest** |
669,024 | ||||
Securities lending |
38,767 | ||||
Total income | 1,676,860 | ||||
Expenses: | |||||
Investment advisory fees |
932,944 | ||||
Stockholder reports |
57,573 | ||||
Custody and transfer agent fees |
30,405 | ||||
Professional fees |
17,054 | ||||
Directors fees |
14,804 | ||||
Administrative and office facilities expenses |
7,958 | ||||
Other expenses |
31,116 | ||||
Total expenses | 1,091,854 | ||||
Compensating balance credits | (2,778 | ) | |||
Net expenses | 1,089,076 | ||||
Net investment income (loss) | 587,784 | ||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: | |||||
Net realized gain (loss) on investments and foreign currency | 5,544,654 | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (1,612,223 | ) | |||
Net realized and unrealized gain (loss) on investments and foreign currency | 3,932,431 | ||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM INVESTMENT OPERATIONS | 4,520,215 | ||||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS | (750,000 | ) | |||
NET INCREASE
(DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS |
$ | 3,770,215 | |||
* Net of foreign withholding tax of $47,764. |
|||||
**Net of foreign withholding tax of $34,458. |
54 | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce Focus Trust | ||
Statement of Changes in Net Assets |
Six months ended | |||||||||
6/30/08 | Year ended | ||||||||
(unaudited) | 12/31/07 | ||||||||
INVESTMENT OPERATIONS: | |||||||||
Net investment income (loss) | $ | 587,784 | $ | 1,988,494 | |||||
Net realized gain (loss) on investments and foreign currency | 5,544,654 | 29,154,418 | |||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency | (1,612,223 | ) | (10,391,522 | ) | |||||
Net increase (decrease) in net assets resulting from investment operations |
4,520,215 | 20,751,390 | |||||||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: | |||||||||
Net investment income | | (331,350 | ) | ||||||
Net realized gain on investments and foreign currency | | (1,168,650 | ) | ||||||
Quarterly distributions* | (750,000 | ) | | ||||||
Total distributions to Preferred Stockholders | (750,000 | ) | (1,500,000 | ) | |||||
NET INCREASE
(DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS |
3,770,215 | 19,251,390 | |||||||
DISTRIBUTIONS TO COMMON STOCKHOLDERS: | |||||||||
Net investment income | | (7,385,265 | ) | ||||||
Net realized gain on investments and foreign currency | | (26,047,361 | ) | ||||||
Quarterly distributions* | (4,671,940 | ) | | ||||||
Total distributions to Common Stockholders | (4,671,940 | ) | (33,432,626 | ) | |||||
CAPITAL SHARE TRANSACTIONS: | |||||||||
Reinvestment of distributions to Common Stockholders | 2,897,098 | 21,421,393 | |||||||
Total capital stock transactions | 2,897,098 | 21,421,393 | |||||||
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS | 1,995,373 | 7,240,157 | |||||||
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: | |||||||||
Beginning of period |
165,807,408 | 158,567,251 | |||||||
End of period (including undistributed net investment income (loss) of $(4,195,058) at 6/30/08 and $(4,782,842) at 12/31/07) |
$ | 167,802,781 | $ | 165,807,408 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. | 2008 Semiannual Report to Stockholders | 55 |
Royce Focus Trust | ||
Financial Highlights |
This table is presented to show selected data for a share of Common Stock outstanding throughout each period, and to assist stockholders in evaluating the Funds performance for the periods presented. | ||||||||||||||||||||||||
Six months | Years ended December 31, | |||||||||||||||||||||||
ended | ||||||||||||||||||||||||
June 30, 2008 | ||||||||||||||||||||||||
(unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
NET ASSET VALUE, BEGINNING OF PERIOD | $ | 8.92 | $ | 9.75 | $ | 9.76 | $ | 9.75 | $ | 9.00 | $ | 6.27 | ||||||||||||
INVESTMENT OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) |
0.04 | 0.15 | 0.16 | 0.06 | 0.02 | 0.08 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments and |
||||||||||||||||||||||||
foreign currency |
0.19 | 1.12 | 1.50 | 1.44 | 2.63 | 3.57 | ||||||||||||||||||
Total investment operations |
0.23 | 1.27 | 1.66 | 1.50 | 2.65 | 3.65 | ||||||||||||||||||
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: | ||||||||||||||||||||||||
Net investment income |
| (0.02 | ) | (0.01 | ) | (0.01 | ) | (0.00 | ) | (0.02 | ) | |||||||||||||
Net realized gain on investments and foreign currency |
| (0.07 | ) | (0.09 | ) | (0.11 | ) | (0.15 | ) | (0.14 | ) | |||||||||||||
Quarterly distributions* |
(0.04 | ) | | | | | | |||||||||||||||||
Total distributions to Preferred Stockholders |
(0.04 | ) | (0.09 | ) | (0.10 | ) | (0.12 | ) | (0.15 | ) | (0.16 | ) | ||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON | ||||||||||||||||||||||||
STOCKHOLDERS RESULTING FROM INVESTMENT OPERATIONS |
0.19 | 1.18 | 1.56 | 1.38 | 2.50 | 3.49 | ||||||||||||||||||
DISTRIBUTIONS TO COMMON STOCKHOLDERS: | ||||||||||||||||||||||||
Net investment income |
| (0.44 | ) | (0.20 | ) | (0.06 | ) | (0.02 | ) | (0.06 | ) | |||||||||||||
Net realized gain on investments and foreign currency |
| (1.57 | ) | (1.37 | ) | (1.15 | ) | (1.72 | ) | (0.56 | ) | |||||||||||||
Quarterly distributions* |
(0.25 | ) | | | | | | |||||||||||||||||
Total distributions to Common Stockholders |
(0.25 | ) | (2.01 | ) | (1.57 | ) | (1.21 | ) | (1.74 | ) | (0.62 | ) | ||||||||||||
CAPITAL STOCK TRANSACTIONS: | ||||||||||||||||||||||||
Effect of reinvestment of distributions by Common Stockholders |
(0.00 | ) | (0.00 | ) | (0.00 | ) | (0.03 | ) | (0.01 | ) | (0.03 | ) | ||||||||||||
Effect of rights offering and Preferred Stock offering |
| | | (0.13 | ) | | (0.11 | ) | ||||||||||||||||
Total capital stock transactions |
(0.00 | ) | (0.00 | ) | (0.00 | ) | (0.16 | ) | (0.01 | ) | (0.14 | ) | ||||||||||||
NET ASSET VALUE, END OF PERIOD | $ | 8.86 | $ | 8.92 | $ | 9.75 | $ | 9.76 | $ | 9.75 | $ | 9.00 | ||||||||||||
MARKET VALUE, END OF PERIOD | $ | 8.83 | $ | 8.97 | $ | 10.68 | $ | 9.53 | $ | 10.47 | $ | 8.48 | ||||||||||||
TOTAL RETURN (a): | ||||||||||||||||||||||||
Market Value | 1.37 | %*** | 3.02 | % | 30.50 | % | 3.03 | % | 47.26 | % | 63.98 | % | ||||||||||||
Net Asset Value | 2.28 | %*** | 12.22 | % | 16.33 | % | 13.31 | % | 29.21 | % | 54.33 | % | ||||||||||||
RATIOS BASED ON AVERAGE NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: |
||||||||||||||||||||||||
Total expenses (b,c) | 1.35 | %** | 1.31 | % | 1.36 | % | 1.48 | % | 1.53 | % | 1.57 | % | ||||||||||||
Management fee expense |
1.16 | %** | 1.14 | % | 1.16 | % | 1.21 | % | 1.27 | % | 1.14 | % | ||||||||||||
Other operating expenses |
0.19 | %** | 0.17 | % | 0.20 | % | 0.27 | % | 0.26 | % | 0.43 | % | ||||||||||||
Net investment income (loss) | 0.73 | %** | 1.13 | % | 1.54 | % | 0.63 | % | 0.24 | % | 1.07 | % | ||||||||||||
SUPPLEMENTAL DATA: | ||||||||||||||||||||||||
Net Assets Applicable to Common Stockholders, | ||||||||||||||||||||||||
End of Period (in thousands) |
$167,803 | $165,807 | $158,567 | $143,244 | $105,853 | $87,012 | ||||||||||||||||||
Liquidation Value of Preferred Stock, End of Period (in thousands) | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | ||||||||||||||||||
Portfolio Turnover Rate | 23 | % | 62 | % | 30 | % | 42 | % | 52 | % | 49 | % | ||||||||||||
PREFERRED STOCK: | ||||||||||||||||||||||||
Total shares outstanding | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||||||||
Asset coverage per share | $ | 192.80 | $ | 190.81 | $ | 183.57 | $ | 168.24 | $ | 130.85 | $ | 112.01 | ||||||||||||
Liquidation preference per share | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | ||||||||||||
Average market value per share (d): | ||||||||||||||||||||||||
6.00% Cumulative |
$ | 24.03 | $ | 24.37 | $ | 24.98 | $ | 25.38 | $ | 24.83 | $ | 25.45 | ||||||||||||
7.45% Cumulative |
| | | | | $ | 25.53 | |||||||||||||||||
56 | 2008 Semiannual Report to Stockholders | THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. |
Royce Focus Trust | ||
Notes to Financial Statements (unaudited) |
Various inputs are used in determining the value of the Funds investments. These inputs are summarized in the three broad levels below: | ||
Level 1 quoted prices in active markets for identical securities | ||
Level 2 other significant observable inputs (including quoted prices for similar securities, foreign securities that may be fair valued and repurchase agreements) | ||
Level 3 significant observable inputs (including the Funds own assumptions in determining the fair value of investments) | ||
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. | ||
The following is a summary of the inputs used to value the Funds investments as of June 30, 2008: |
Level 1 | Level 2 | Level 3 | Total | ||||
$139,291,361 | $62,704,274 | $9,160,740 | $211,156,375 | ||||
Level 3 Reconciliation: | |||||||
Change in unrealized appreciation | |||||||
Balance as of 12/31/07 | (depreciation) | Purchases | Balance as of 6/30/2008 | ||||
$0 | $160,740 | $9,000,000 | $9,160,740 | ||||
Repurchase Agreements:
The Fund may enter
into repurchase agreements with institutions that the Funds 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.
Foreign Currency:
The Fund values its non-U.S. securities
in U.S. dollars daily at the prevailing foreign currency exchange rates as quoted
by a major bank. The effects of changes in foreign exchange rates on investments
and other assets and liabilities are included with net realized and unrealized gains
and losses on investments.
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 Funds 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, including investments in securities at
the end of the reporting period, as a result of changes in foreign currency exchange
rates.
2008 Semiannual Report to Stockholders | 57 |
Royce Focus Trust | ||
Notes to Financial Statements (unaudited) (continued) |
Securities Lending:
The Fund loans
securities to qualified institutional investors for the purpose of realizing additional
income. Collateral on all securities loaned for the Fund is accepted in cash
and cash equivalents and invested temporarily by the custodian. The collateral is
equal to at least 100% of the current market value of the loaned securities.
The market value of the loaned securities is determined at the close of business
of the Fund and any additional required collateral is delivered to the Fund on
the next business day.
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 Income Tax Information.
Distributions:
The Fund currently has a policy of paying quarterly distributions on the
Funds Common Stock. Distributions are currently being made at the annual
rate of 5% of the rolling average of the prior four calendar quarter-end NAVs of
the Funds Common Stock, with the fourth quarter distribution being the
greater of 1.25% of the rolling average or the distribution required by IRS regulations.
Distributions to Preferred Stockholders are accrued daily and paid quarterly
and distributions to Common Stockholders are recorded on ex-dividend date. The Fund
is required to allocate long-term capital gain distributions and other types
of income proportionately to distributions made to holders of shares of Common Stock
and Preferred Stock. To the extent that distributions 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. Non-cash dividend income is recorded at the fair market
value of the securities received. Interest income is recorded on an accrual basis.
Premium 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 Funds operations, while expenses applicable to
more than one of the Royce Funds are allocated equitably. Allocated personnel and
occupancy costs related to The Royce Funds are included in administrative and
office facilities expenses. The Fund has adopted a deferred fee agreement that allows
the Directors to defer the receipt of all or a portion of Directors Fees
otherwise payable. The deferred fees are invested in certain Royce Funds until distributed
in accordance with the agreement.
Compensating Balance Credits:
The Fund has an arrangement with its custodian bank, whereby a portion of the custodians fee is paid indirectly by credits earned on the Funds cash on deposit
with the bank. This deposit arrangement is an alternative to purchasing overnight
investments. Conversely, the Fund pays interest to the custodian on any cash
overdrafts, to the extent they are not offset by credits earned on positive cash
balances.
Capital Stock:
The Fund issued 342,497 and 2,332,768 shares
of Common Stock as reinvestment of distributions by Common Stockholders for the
six months ended June 30, 2008 and the year ended December 31, 2007, respectively.
At June 30, 2008, 1,000,000 shares of 6.00% Cumulative Preferred Stock were outstanding.
Commencing October 17, 2008 and thereafter, the Fund, at its option, may redeem
the Cumulative Preferred Stock, in whole or in part, at the redemption price. The
Cumulative Preferred Stock is classified outside of permanent equity (net assets
applicable to Common Stockholders) in the accompanying financial statements in accordance
with Emerging Issues Task Force (EITF) Topic D-98, Classification and Measurement
of Redeemable Securities, that requires preferred securities that are redeemable
for cash or other assets to be classified outside of permanent equity to the extent
that the redemption is at a fixed or determinable price and at the option of
the holder or upon the occurrence of an event that is not solely within the control
of the issuer.
The Fund is required to meet certain asset coverage tests with
respect to the Cumulative Preferred Stock as required by the 1940 Act. In addition,
pursuant to the Rating Agency Guidelines established by Moodys, the Fund
is required to maintain a certain discounted asset coverage. If the Fund fails
to meet these requirements and does not correct such failure, the Fund may be required
to redeem, in part or in full, the Cumulative Preferred Stock at a redemption
price of $25.00 per share, plus an amount equal to the accumulated and unpaid dividends,
whether or not declared on such shares, in order to meet these requirements.
Additionally, failure to meet the foregoing asset coverage requirements could restrict
the Funds ability to pay dividends to Common Stockholders and could lead
to sales of portfolio securities at inopportune times. The Fund has met these requirements
since issuing the Cumulative Preferred Stock.
58 | 2008 Semiannual Report to Stockholders |
Royce Focus Trust | ||
Notes to Financial Statements (unaudited) (continued) |
Investment Advisory Agreement:
The Investment Advisory Agreement between Royce and the Fund provides for fees to
be paid at an annual rate of 1.0% of the Funds average daily net assets
applicable to Common Stockholders plus the liquidation value of Preferred Stock.
Royce has voluntarily committed to waive the portion of its investment advisory
fee attributable to an issue of the Funds Preferred Stock for any month in
which the Funds average annual NAV total return since issuance of the Preferred
Stock fails to exceed the applicable Preferred Stocks dividend rate. For the
six months ended June 30, 2008, the Fund accrued and paid Royce advisory fees
totaling $932,944.
Purchases and Sales of Investment Securities:
For
the six months ended June 30, 2008, the cost of purchases and proceeds from sales
of investment securities, other than short-term securities and collateral received
for securities loaned, amounted to $48,394,774 and $38,523,359, respectively.
2008 Semiannual Report to Stockholders | 59 |
Notes to Performance and Other Important Information | ||
The thoughts expressed in this Review and Report concerning recent market movements and future prospects for small company stocks are solely the opinion of Royce at June 30, 2008, and, of course, historical market trends are not necessarily indicative of future market movements. Statements regarding the future prospects for particular securities held in the Funds portfolios and Royces investment intentions with respect to those securities reflect Royces opinions as of June 30, 2008 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. The Funds invest primarily in securities of micro-, small- and mid-cap companies, that may involve considerably more risk than investments of larger-cap companies. All publicly released material information is always disclosed by the Funds on the website at www.roycefunds.com. |
Standard deviation is a statistical measure within which a funds total returns have varied over time. The greater the standard deviation, the greater a funds volatility. |
The Russell 2000 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 indices consist of the respective value and growth stocks within the Russell 2000 as determined by Russell Investments. The Russell Microcap Index measures the performance of the 1,000 smallest publicly traded U.S. companies in the Russell 2000 index. The S&P 500 and S&P SmallCap 600 are indices of U.S. large- and small-cap stocks, respectively, selected by Standard & Poors based on market size, liquidity and industry grouping, among other factors. The Nasdaq Composite is an index of the more than 3,000 common equities listed on the Nasdaq stock exchange. The MSCI EAFE Index (Europe, Australasia, Far East) is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. Returns for the market indices used in this Review and Report were based on information supplied to Royce by Russell Investments and Morningstar. Royce has not independently verified the above described information. The Royce Funds is a service mark of The Royce Funds. |
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. |
Authorized Share Transactions |
Royce Value
Trust, Royce Micro-Cap Trust and Royce Focus Trust may each repurchase up to 5%
of the issued and outstanding shares of its respective common stock and up to 10%
of the issued and outstanding shares of its respective preferred stock during the
year ending December 31, 2008. Any such repurchases would take place at then prevailing
prices in the open market or in other transactions. Common stock repurchases would
be effected at a price per share that is less than the shares then current
net asset value, and preferred stock repurchases would be effected at a price per
share that is less than the shares liquidation value. |
Proxy Voting | ||
A copy of the policies and procedures that The Royce Funds use to determine how to vote proxies relating to portfolio securities and information regarding how each of The Royce Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available, without charge, on the Royce Funds website at www.roycefunds.com, by calling 1-800-221-4268 (toll-free) and on the website of the Securities and Exchange Commission (SEC), at www.sec.gov. |
||
Form N-Q Filing | ||
The Funds file their complete schedules of investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds Forms N-Q are available on The Royce Funds website at www.roycefunds.com and on the SECs website at www.sec.gov. The Funds Forms N-Q may also be reviewed and copied at the SECs Public Reference Room in Washington, D.C. To find out more about this public service, call the SEC at 1-800-732-0330. The Funds complete schedules of investments are updated quarterly, and are available at www.roycefunds.com. |
||
60 | 2008 Semiannual Report to Stockholders |
Directors and Officers |
All Directors and Officers may be reached c/o The Royce Funds, 1414 Avenue of the Americas, New York, NY 10019 |
Charles M. Royce, Director*, President |
Age: 68 | Number of Funds Overseen: 28 | Tenure: Since 1986 |
Non-Royce Directorships: Director of Technology Investment Capital Corp. |
Principal
Occupation(s) During Past Five Years: President, Chief Investment Officer and Member
of Board of Managers of Royce & Associates, LLC (Royce), the Trusts investment adviser. |
Mark R. Fetting, Director* |
Age: 53 | Number of Funds Overseen: 42 | Tenure: Since 2001 |
Non-Royce
Directorships: Director/Trustee of registered investment companies constituting
the 14 Legg Mason Funds. |
Principal Occupation(s) During Past Five Years: President and Chief Executive
Officer of Legg Mason, Inc.; Member of Board of Managers of Royce. Mr.
Fettings prior business experience includes having served as Senior Executive
Vice President of Legg Mason, Inc.; Division President and Senior Officer,
Prudential Financial Group, Inc. and related companies; Partner, Greenwich
Associates and Vice President, T. Rowe Price Group, Inc. |
Donald R. Dwight, Director |
Age: 77 | Number of Funds Overseen: 28 | Tenure: Since 1998 |
Non-Royce Directorships: None |
Principal
Occupation(s) During Past Five Years: President of Dwight Partners, Inc., corporate
communications consultant; Chairman (from 1982 to March 1998) and Chairman Emeritus
(since March 1998) of Newspapers of New England, Inc. Mr. Dwights prior experience
includes having served as Lieutenant Governor of the Commonwealth of Massachusetts,
as President and Publisher of Minneapolis Star and Tribune Company and as a Trustee
of the registered investment companies constituting the Eaton Vance Funds. |
Richard M. Galkin, Director |
Age: 70 | Number of Funds Overseen: 28 | Tenure: Since 1986 |
Non-Royce Directorships: None |
Principal
Occupation(s) During Past Five Years: Private investor. Mr. Galkins prior
business experience includes having served as President of Richard M. Galkin Associates,
Inc., telecommunications consultants, President of Manhattan Cable Television (a
subsidiary of Time, Inc.), President of Haverhills Inc. (another Time, Inc. subsidiary),
President of Rhode Island Cable Television and Senior Vice President of Satellite
Television Corp. (a subsidiary of Comsat). |
Stephen L. Isaacs, Director |
Age: 69 | Number of Funds Overseen: 28 | Tenure: Since 1989 |
Non-Royce Directorships: None |
Principal
Occupation(s) During Past Five Years: President of The Center for Health and Social
Policy (since September 1996); Attorney and President of Health Policy Associates,
Inc., consultants. Mr. Isaacss prior business experience includes having served
as Director of Columbia University Development Law and Policy Program and Professor
at Columbia University (until August 1996). |
William L. Koke, Director |
Age: 74 | Number of Funds Overseen: 28 | Tenure: Since 1996 |
Non-Royce Directorships: None |
Principal
Occupation(s) During Past Five Years: Private investor. Mr. Kokes prior business
experience includes having served as President of Shoreline Financial Consultants,
Director of Financial Relations of SONAT, Inc., Treasurer of Ward Foods, Inc. and
President of CFC, Inc. |
Arthur S. Mehlman, Director |
Age: 66 | Number of Funds Overseen: 42 | Tenure: Since 2004 |
Non-Royce
Directorships: Director/Trustee of registered investment companies constituting
the 14 Legg Mason Funds and Director of Municipal Mortgage & Equity, LLC. |
Principal
Occupation(s) During Past Five Years: Director of The League for People with Disabilities,
Inc.; Director of University of Maryland Foundation (non-profits). Formerly: Director
of University of Maryland College Park Foundation (non-profit) (from 1998 to 2005);
Partner, KPMG LLP (international accounting firm) (from 1972 to 2002); Director
of Maryland Business Roundtable for Education (from July 1984 to June 2002). |
2008 Semiannual Report to Stockholders | 61 |
Board Approval of Investment Advisory Agreements | ||
At meetings held on June 4 5, 2008,
each of the Funds respective Boards of Directors, including all of the non-interested
directors, approved the continuance of the Investment Advisory Agreements between
Royce & Associates, LLC (R&A) and each of Royce Value Trust,
Royce Micro-Cap Trust and Royce Focus Trust (the Funds). In reaching
these decisions, the Board reviewed the materials provided by R&A, which included,
among other things, information prepared internally by R&A and independently
by Morningstar Associates, LLC (Morningstar) containing detailed expense
ratio and investment performance comparisons for the Funds with other funds in
their peer group, information regarding the past performance of Funds
managed by R&A and a memorandum outlining the legal duties of the Board
prepared by independent counsel to the non-interested directors. R&A also provided
the directors with an analysis of its profitability with respect to providing
investment advisory services to each of the Funds. In addition, the Board took into
account information furnished throughout the year at regular Board meetings,
including reports on investment performance, shareholder services, regulatory
compliance, brokerage commissions and research, brokerage and execution products
and services provided to the Funds. The Board also considered other matters they
deemed important to the approval process such as payments made to R&A or its
affiliates relating to allocation of Fund brokerage commissions, and other direct
and indirect benefits to R&A and its affiliates, from their relationship with
the Funds. The directors also met throughout the year with investment advisory
personnel from R&A. The Board, in its deliberations, recognized that, for many
of the Funds stockholders, the decision to purchase Fund shares included
a decision to select R&A as the investment adviser and that there was a strong
association in the minds of Fund stockholders between R&A and each Fund.
In considering factors relating to the approval of the continuance of the Investment
Advisory Agreements, the non-interested directors received assistance and advice
from, and met separately with, their independent counsel. While the Investment Advisory
Agreements for the Funds were considered at the same Board meetings, the Board
dealt with each agreement separately. Among other factors, the directors considered
the following:
The nature, extent and quality of services provided by R&A:
The Board considered the following factors to be of fundamental importance to
their consideration of whether to approve the continuance of the Funds
Investment Advisory Agreements: (i) R&As more than 30 years of small-cap
value investing experience and track record; (ii) the history of long-tenured
R&A portfolio managers managing the Funds; (iii) R&As sole focus
on mid-cap, small-cap and micro-cap value investing; (iv) the consistency of R&As
approach to managing both the Funds and open-end mutual funds over
more than 30 years; (v) the integrity and high ethical standards adhered to at
R&A; (vi) R&As specialized experience in the area of trading small-
and micro-cap securities; (vii) R&As historical ability to attract
and retain portfolio management talent and (viii) R&As focus on stockholder
interests as exemplified by its voluntary fee waiver policy on preferred stock
assets in certain circumstances where the Funds total return performance from
the issuance of the preferred may not exceed the coupon rate on the preferred,
and expansive stockholder reporting and communications. The Board reviewed the services
that R&A provides to the Funds, including, but not limited to, managing
each Funds investments in accordance with the stated policies of each Fund.
The Board considered the fact that during 2008 R&A provided certain administrative
services to the Funds at cost pursuant to the Administration Agreement between the
Funds and R&A which went into effect on January 1, 2008. The Board determined
that the services to be provided to each Fund by R&A would be the same as those
it previously provided to the Funds. They also took into consideration the histories,
reputations and backgrounds of R&As portfolio managers for the Funds,
finding that these would likely have an impact on the continued success of the
Funds. Lastly, the Board noted R&As ability to attract quality and
experienced personnel. The directors concluded that the services provided by R&A
to each Fund compared favorably to services provided by R&A to other R&A
client accounts, including other funds, in both nature and quality, and that the
scope of services provided by R&A would continue to be suitable for each
Fund.
Investment performance of the Funds and R&A: In light of
R&As risk-averse approach to investing, the Board believes that risk-adjusted
performance continues to be an appropriate measure of each Funds investment
performance. One measure of risk-adjusted performance the Board has historically
used in their review of the Funds 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 funds annualized excess
returns by its annualized standard deviation to determine reward per unit of risk.
The higher the Sharpe Ratio, the better a funds historical risk-adjusted
performance. The Board attaches primary importance to risk-adjusted performance
over relatively long periods of time, typically three, five and ten years. Morningstar
compared each of the Funds risk-adjusted performance to that of its applicable
open-end fund category. Royce Value Trusts Sharpe Ratio placed in the 1st
quartile within the small blend category assigned by Morningstar for the three-
and five-year periods and the 2nd quartile for the ten-year period ended December
31, 2007. Similarly, Royce Micro-Cap Trusts Sharpe Ratio placed in the
2nd quartile within the small blend, growth or value category assigned by Morningstar
for the three-year period and in the 1st quartile for the five- and ten-year
periods ended December 31, 2007. Finally, Royce Focus Trusts Sharpe Ratio
placed in the 1st quartile within the small growth category assigned by Morningstar
for the three-, five- and ten-year periods ended December 31, 2007.
The Board
noted that R&A manages a number of funds that invest in small-cap and micro-cap
issuers, many of which were outperforming the Russell 2000 Index and their competitors.
Although the Board recognized that past performance is not necessarily an indicator
of future results, they found that R&A had the necessary qualifications,
experience and track record in managing small-cap and micro-cap securities to manage
the Funds. The directors determined that R&A continued to be an appropriate
investment adviser for the Funds and concluded that each Funds performance
supported the renewal of its Investment Advisory Agreement.
Cost of the
services provided and profits realized by R&A from its relationship with each
Fund: The Board considered the cost of the services provided by R&A
and profits realized by R&A from its relationship with each Fund. As part of
the analysis, the Board discussed with R&A its methodology in allocating
its costs to each Fund and concluded that its allocations were reasonable. The Board
concluded that R&As profits were reasonable in relation to the nature
and quality of services provided.
62 | 2008 Semiannual Report to Stockholders |
Board Approval of Investment Advisory Agreements (continued) | ||
The extent to which economies of scale
would be realized as the Funds grow and whether fee levels would reflect such economies
of scale: The Board considered whether there have been economies of scale
in respect of the management of the Funds, whether the Funds have appropriately
benefited from any economies of scale and whether there is potential for realization
of any further economies of scale. The Board 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 Board concluded
that the current fee structure for each Fund was reasonable, 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: The Board reviewed
the investment advisory fee paid by each Fund and compared both the services to
be rendered and the fees to be paid under the Investment Advisory Agreements
to other contracts of R&A and to contracts of other investment advisers with
registered investment companies investing in small- and micro-cap stocks, as
provided by Morningstar. The Board noted that, in the case of Royce Value Trust,
the 1.00% basic fee that is subject to adjustment up or down (up to 0.50% in
either direction) based on the Funds performance versus the S&P 600 SmallCap
Index over rolling periods of 60 months. The fee is charged on average net assets
over those rolling periods. As a result, in a rising market, the fee will be
smaller than a fee calculated on the current years average net assets, and
visa versa. The Board determined that the performance adjustment feature continued
to serve as an appropriate incentive to R&A to manage the Fund for the benefit
of its long-term common stockholders. The Board noted that R&A had also
agreed to waive its management fee on Fund assets in an amount equal to the liquidation
preference of the Funds outstanding preferred stock if the Funds
total return from issuance of the preferred on such amount is less than the preferreds coupon rate. The Board also noted that the fee arrangement, which also
includes a provision for no fee in periods where the Funds trailing three-year
performance is negative, requires R&A to measure the Funds performance
monthly against the S&P 600, an unmanaged index. Instead of receiving a set
fee regardless of its performance, R&A is penalized for poor performance.
The Board noted that if the Funds expense ratio were based on total average
net assets including net assets applicable to Preferred Stock, it would place
in the 2nd quartile of its Morningstar-assigned open-end peer group.
In the case
of Royce Micro-Cap Trust, the directors noted that the Fund has a 1.00% basic fee
subject to adjustment up or down based on the Funds performance versus
the Russell 2000 Index over rolling 36-month periods. The fee is charged on average
net assets over those rolling periods. As a result, in a rising market, the fee
will be smaller than a fee calculated on the current years average net assets,
and visa versa. The Board determined that the performance adjustment feature
continued to serve as an incentive to R&A to manage the Fund for the benefit
of its long-term stockholders. The Board also noted R&As voluntarily
waiver of its fee on the liquidation value of the outstanding preferred stock in
circumstances where the Funds total return performance from the issuance
of the preferred is less than the coupon rate on the preferred for each month during
the year. The Board noted that if the Funds expense ratio were based on
total average net assets including net assets applicable to Preferred Stock, it
would fall effectively at the median when compared to its Morningstar-assigned
open-end peer group.
Finally, in the case of Royce Focus Trust, the Board noted
that R&A had agreed to waive its management fee on the liquidation value of
outstanding preferred stock if the Funds total return from issuance of
the preferred is less than the preferreds coupon rate. The Board noted that
if the Funds expense ratio were based on total average net assets including
net assets applicable to Preferred Stock, it would place in the 2nd quartile of
its Morningstar-assigned open-end peer group.
The Board also considered fees
charged by R&A to institutional and other clients and noted that the Funds base advisory fees compared favorably to those other accounts.
The entire
Board, including all the non-interested directors, approved the renewal of the existing
Investment Advisory Agreements, concluding that a contract renewal on the existing
terms was in the best interest of the stockholders of each Fund and that each investment
advisory fee rate was reasonable in relation to the services provided.
2008 Semiannual Report to Stockholders | 63 |
This Page Left Intentionally Blank
Postscript: Freeway Jam | |
Everyone can probably
think of one examplethat neighborhood restaurant only you and a few friends
seem aware of; an uncrowded, out-of-the-way vacation spot that you stumbled on accidentally
and have returned to each year since; maybe a band, a book or a film that you love
but that escaped most other peoples notice. Back in the 70s, and lasting
through much of the 80s, small-cap value investing was much like discovering,
and regularly returning to, a favorite place or thing that few others seemed to
know about. |
Over time, things began to change. Little by little, the road began to fill with others looking for the same sort of bargain-priced, high-quality smaller companies that we loved. Simply knowing about the existence of all these wonderful, out-of-the-way businesses was no longer an advantage in itself. By the 90s, we wondered whether or not our waning edge in obtaining information would be a problem. If more and more people had access to all of this information, how would we continue to find what we deemed high-quality companies in our increasingly crowded marketplace? In the era of the cell phone, GPS, PDA, satellite radio and multiple all-news stations with regular updates of traffic and weather, the kind of person-to-person communication that a CB provided is a relic from a simpler time. How would our approach avoid a similar fate? |
investment
horizon in the small-cap world was definitely a rarity, but we were more than content
to follow our own path. Aside from a few other kindred spirits, we were mostly alone
in choosing a long-term route to small-cap value, and we were happy to operate on
nearly empty roads. |
One key element was the wealth of knowledge that we had built (and continue to build) about thousands of smaller companies. Our years of investment experience give us an advantage that few in our industry can match. As the 90s gave way to the current decade, we began to see that access to information, while vital to any investment enterprise, would not be enough. It is one thing to have information, it is something else entirely to know how to best put it to use. This, it seems to us, remains one of our major competitive advantages. As experienced smaller-company investors, we feel confident about our knowledge of the marketplace and how to select securities within it. |
companies gave us similar advantages. Many of the companies that drew our attention received little, if any, coverage from Wall Street analysts. For some, there was very little public information available. This meant that when we saw an interesting business along the small-cap road, there were few others pulling over to take a close look. |
It is one thing to have information, it is something else entirely to know how to best put it to use. This, it seems to us, remains one of our major competitive advantages. |
In the last four decades, we have seen the smaller-company universe go from being the province of a few professional managers to a widely accepted domestic asset class in which many investment managers traffic. We have continued to enjoy long-term success because throughout this time we never strayed from our commitment to our approach or our chosen asset class. Today, as smaller-companies face the challenge of becoming an asset class with global acceptance, we are even more committed to the principles that have guided us thus far. And thats a big 10-4, buddy. |
This page is not part of the 2008 Semiannual Report to Stockholders |
Wealth Of Experience
With approximately $29 billion in open- and closed-end fund assets under management, Royce & Associates
is committed to the same smaller-company investing principles that have served us well for more than
35 years. Charles M. Royce, our Chief Investment Officer, enjoys one of the longest tenures of any active
mutual fund manager. Royces investment staff includes 12 Portfolio Managers, as well as nine assistant
portfolio managers and analysts, and eight traders.
Multiple Funds, Common Focus
Our goal is to offer both individual and institutional investors the best available smaller-cap value
portfolios. Unlike a lot of fund groups with broad product offerings, we have chosen to concentrate
on smaller-company value investing by providing investors with a range of funds that take full
advantage of this large and diverse sector.
Consistent Discipline
Our approach emphasizes paying close attention to risk and maintaining the same discipline, regardless
of market movements and trends. The price we pay for a security must be significantly below our appraisal
of its current worth. This requires a thorough analysis of the financial and business dynamics of an
enterprise, as though we were purchasing the entire company.
Co-Ownership Of Funds
It is important that our employees and shareholders share a common financial goal; our officers,
employees and their families currently have approximately $117 million invested in The Royce Funds. |
|||||
General Information | Advisor Services | ||||
Additional Report Copies | For Fund Materials, Performance Updates, | ||||
and Fund Inquiries | Account Inquiries | ||||
(800) 221-4268 | (800) 33-ROYCE (337-6923) | ||||
Computershare | Broker/Dealer Services | ||||
Transfer Agent and Registrar | For Fund Materials and Performance Updates | ||||
(800) 426-5523 | (800) 59-ROYCE (597-6923) | ||||
www.roycefunds.com |
|||||
TheRoyceFunds |
CE-REP-0608 | ||||
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. Schedule of Investments
(a) See Item 1.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies Not applicable to this semi-annual report.
Item 8. Portfolio Managers of Closed-End Management Investment Companies Not applicable to this semi-annual report.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders None.
Item 11. Controls and Procedures.
(a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrants Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.
(b) Internal Control over Financial Reporting. There were no significant changes in Registrants internal control over financial reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses during the second fiscal quarter of the period covered by this report.
Item 12. Exhibits attached hereto.
(a)(1) Not applicable.
(a)(2) Separate certifications by the Registrants Principal Executive Officer and Principal Financial Officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not Applicable
(b) Separate certifications by the Registrants Principal Executive Officer and Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ROYCE FOCUS TRUST, INC.
BY: /s/Charles M. Royce
Charles
M. Royce
President
Date: August 27, 2008
ROYCE FOCUS TRUST, INC.
BY: /s/Charles M. Royce
Charles
M. Royce
President
Date: August 27, 2008
ROYCE FOCUS TRUST, INC.
BY: /s/John D. Diederich
John
D. Diederich
Chief Financial Officer
Date: August 27, 2008