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Note: Profile written for different share class.
The fund has returned 18.37 percent over the past year, 7.80 percent over the past three years, 25.51 percent over the past five years, and 9.49 percent over the past decade.
|Trailing Returns||Updated 02.28.2014|
|Year to date||-0.2%|
|3 Years (Annualized)||7.8%|
|5 Years (Annualized)||25.5%|
|10 Years (Annualized)||9.5%|
Modeled after Royce’s oldest offering—the Pennsylvania Mutual Fund—Royce Heritage has a broader outlook and reach than its ancestor, investing in slightly larger companies and venturing internationally to find opportunities.
As of March 05, 2014, the fund has assets totaling almost $365.16 million invested in 164 different holdings. Its portfolio primarily consists of small- and mid-cap stocks of U.S. companies, with a smaller portion of foreign holdings, mostly in the United Kingdom and developed Europe.
In late 2010, management increased the fund’s position in Toronto stock exchange operator TMX Group, making it the fifth largest holding as of the end of 2010. TMX Group is the listing vehicle for many natural resource companies, so it benefits from growth in energy-rich Canada, fund manager Chuck Royce says. “We believe that’s going to continue for some time and very much benefit the shareholders of the stock exchange,” he added. The fund has returned 18.37 percent over the past year and 7.80 percent over the past three years.
Over the long term, the fund has performed well, with five-year trailing returns ranking it in the top 9 percent of the Morningstar small-blend category. Its 10-year trailing returns place it in the top 8 percent of the category as of the end of March. The fund has returned 25.51 percent over the past five years and 9.49 percent over the past decade.
According to Morningstar, manager Chuck Royce looks for financially sound companies afflicted with a temporary issue that has caused its stock to trade significantly below its actual worth. The fund can invest in any size of company, Royce but tends to stick with those that have market capitalizations of $5 billion or less. Royce takes a bottom-up investing approach, relying on fundamental analysis to whittle down the fund’s investable universe. Under its charter, the fund can hold up to 25 percent of total assets in foreign companies.
Role in Portfolio
Morningstar calls this fund a “supporting player.”
Chuck Royce, president and co-CIO of Royce & Associates, manages the fund with James Harvey. Royce, who is also president of Royce Funds, manages several other Royce funds, including the Total Return and Pennsylvania Mutual Fund. Harvey joined Royce & Associates in 1998 and serves as the lead manager or co-manager for several other Royce funds, including the Royce Select II and Asia-Pacific Select fund.
Royce Heritage Fund has an expense ratio of 1.20 percent.
The fund’s exposure to international small-cap companies might increase volatility. “Small companies, almost by definition, are more fragile,” Royce says. “Sometimes they’re more volatile, sometimes they’re not, but in general these are more fragile companies.”