Royce Funds
Charles Royce

I am a shareholder in several Royce Funds, and receive their newsletters periodically. I like to follow what is happening at the fund family to gain better insight into small cap value investing. I hope to start a regular series with useful updates from the newsletters.

For the first of my series I will sum up a Q and A with Charles Royce. Charles M. Royce is President and Co-Chief Investment Officer of Royce & Associates, LLC and President of The Royce Funds, a position he has held since 1972. Charles Royce’s flagship fund The Royce Pennsylvania Mutual Fund has returned 16.5% per annum over the past 35 years.


Mr. Royce believes that the case is getting stronger that the worst of the financial crisis is behind us.  Charles is concerned about the unemployment rate and believes that it may not significantly improve for as long as a year, however he is focusing on increasing consumer savings, corporate liquidity and stock market gains as better barometers of the country’s economic health.


Mr. Royce is concerned about the disconnect between Main Street and Wall Street due to the current economic crisis. He explains that most people tend to distrust Wall Street due to its involvement in the current financial crisis. This distrust truly started during the Tech bubble when some firms gave buy recommendations on tech stocks, even if their research did not support that conclusion. However, we have had various bear markets, scandals and events like 9/11 and the market has survived. Mr. Royce states “I think that stocks will remain consistent with their historical role of building wealth over the long term and that diversified investments are the soundest method for investors to try to realize their goals. Charles Royce believes the massive stock rise since March is ending. In the future stocks will provide returns in the high single digits. Although this rally was marked by low quality stocks producing high gains, Mr. Royce believes that in the future investors will be more discriminating with their stocks and choose higher quality companies

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