Royce Micro-Cap InvmtRYOTX

Morningstar Rating

Fund Research and Analysis

by Greg Brown

Royce Micro-Cap's whipsaw performance comes with the territory.

This fund can turn on a dime. It lost 41% of its value in 2008's rocky market, much more than the typical small-blend fund. But with the strong spring 2009 rally, the fund has rocketed back, propelled by many of the sectors that pulled the fund down last year. Read more

Kudos

Strong long-term results.

A unique focus on micro-cap stocks. Read more

Risks

Liquidity in micro-cap stocks can be limited, especially during downturns.

Micro-cap stocks have historically been more volatile than larger stocks. Read more

Strategy

Comanagers Whitney George, Jenifer Taylor, and David Nadel hunt down micro-cap companies with solid balance sheets that are trading at reasonable valuations. To balance the risks inherent in the micro-cap universe, management holds a large number of stocks and maintains a three- to five-year time horizon for its picks. Read more

Management

Whitney George took over as lead manager here in January 2001 after assisting former manager Chuck Royce for several years. He has also managed Royce Low-Priced Stock RYLPX with excellent results. As of May 1, 2006, Jenifer Taylor is a comanager here. Read more

Inside Scoop

Micro-cap investing usually entails significant volatility, but this fund hasn't been as volatile as might be expected. Manager Whitney George spreads his bets over a large number of stocks with little turnover. Read more

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