Royce International Micro-Cap Returns -21.5% in 2011

Royce International Micro-Cap Fund (RMI) seeks long-term growth of capital. The Fund invests primarily in equity securities of micro-cap companies, those with stock market capitalizations up to $500 million, issued by non- U.S. (“international”) companies—i.e. companies located outside of the United States. Using its value approach, Royce generally focuses on micro-cap companies that it believes have excellent business strengths and/or prospects for growth, high internal rates of return and low leverage, and that are trading significantly below its estimate of their current worth. The Fund may invest in other investment companies that invest in equity securities. We believe that investors in the Fund should have a long-term investment horizon of at least three years. David Nadel manages the Fund assisted by James Harvey and Jenifer Taylor.