Royce Value Trust (NYSE: RVT) as of Nov 30, 2023
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The reported average annual total returns for Royce Value Trust indicate a performance consistency, with a notable one-month uptick in both NAV and market price. The discrepancy between NAV and market price suggests the presence of a discount, which could be of interest to investors seeking value opportunities within the small-cap sector. The diversification across sectors and the inclusion of foreign securities could mitigate some risk, although the inherent volatility of small- and micro-cap investments remains a factor.
Examining the weighted average P/E and P/B ratios provides insight into the valuation of the portfolio's holdings relative to their earnings and book value, respectively. These metrics, particularly the exclusion of companies with zero or negative earnings in the P/E calculation, may suggest a cautious approach to valuation. The net leverage being at a minimal 1.5% indicates a conservative use of borrowing, which could appeal to risk-averse investors.
Long-term investors might be encouraged by the ten-year return figures, which, while not guaranteeing future performance, suggest a historical resilience. However, the one-year figures reflect recent market challenges and the negative market return over the past year could indicate short-term pressures or market undervaluation.
The sector allocation of Royce Value Trust’s portfolio, with a heavy emphasis on industrials and financials, is reflective of a traditional small-cap value investment strategy. The current market conditions and economic outlook will play a significant role in the performance of these sectors. For instance, industrials may be sensitive to economic cycles, while financials could be impacted by interest rate changes.
Investor sentiment towards small-cap funds like Royce Value Trust can be influenced by macroeconomic factors such as inflation, currency fluctuations and geopolitical events, especially given the fund's exposure to foreign securities. The fund's ability to navigate these complexities will be critical to its performance and could be a point of analysis for potential investors.
The top ten positions and sector compositions offer a window into the fund's strategic focus. Investors might look for alignment between the fund's holdings and emerging trends or sectors poised for growth. The presence of gold and technology-related companies could be interpreted as a balance between defensive and growth-oriented investments.
The performance of a small-cap fund such as Royce Value Trust is often seen as an indicator of investor confidence in the broader economy, as small-cap stocks may react more sensitively to economic shifts. The positive year-to-date NAV returns in contrast to the negative one-year market returns could suggest a recovery phase or a market correction in progress.
The fund's international exposure introduces additional complexity, including currency risk and differing economic conditions abroad, which could either contribute to diversification benefits or amplify losses. The fund's performance should be assessed in the context of global economic trends, currency exchange rates and international trade policies.
Given the current economic climate, marked by concerns over inflation and potential interest rate hikes, the resilience of the fund's portfolio in maintaining positive long-term returns could be a sign of effective management strategy in navigating economic cycles.
- Oldest and largest small-cap closed-end fund
- Average weekly trading volume of approximately 1,259,254 shares
- Fund's adviser has more than 50 years of small- and micro-cap investment experience
CLOSING PRICES AS OF 11/30/23 | |
NAV | 15.11 |
MKT | 13.40 |
AVERAGE ANNUAL TOTAL RETURN AS OF 11/30/23 | NAV (%) | MKT (%) |
One-Month* | 9.10 | 11.67 |
Year to Date* | 9.66 | 7.15 |
One-Year | 4.38 | -2.58 |
Three-Year | 3.75 | 4.12 |
Five-Year | 7.87 | 7.79 |
10-Year | 7.33 | 7.62 |
*Not Annualized |
Important Performance and Expense Information
All performance information reflects past performance, is presented on a total return basis, net of the Fund's investment advisory fee, and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the recent month-end may be obtained at www.royceinvest.com. The market price of the Fund's shares will fluctuate, so that shares may be worth more or less than their original cost when sold.
The Fund invests primarily in securities of small-cap and micro-cap companies, which may involve considerably more risk than investing in larger-cap companies. The Fund's broadly diversified portfolio does not ensure a profit or guarantee against loss. From time to time, the Fund may invest a significant portion of its net assets in foreign securities, which may involve political, economic, currency, and other risks not encountered in
PORTFOLIO DIAGNOSTICS | |
Average Market Cap1 | |
Weighted Average P/E2 | 14.6x |
Weighted Average P/B2 | 1.9x |
Net Assets | |
Net Leverage | 1.5 % |
1Geometric Average: This weighted calculation uses each portfolio holding's market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio's center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median.
2Harmonic Average: This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio's share in the earnings of its underlying stocks.
The Price-Earnings, or P/E, ratio is calculated by dividing a company's share price by its trailing 12-month earnings-per-share (EPS). The Fund's P/E ratio calculation excludes companies with zero or negative earnings (
The Price-to-Book, or P/B, Ratio is calculated by dividing a company's share price by its book value per share.
Net leverage is the percentage, in excess of 100 %, of the total value of equity type investments, divided by net assets.
Portfolio Composition
TOP 10 POSITIONS | % OF NET ASSETS (SUBJECT TO |
Alamos Gold Cl. A | 1.7 |
Enovis Corporation | 1.4 |
SEI Investments | 1.1 |
Assured Guaranty | 1.1 |
Fabrinet | 1.1 |
Ziff Davis | 1.0 |
Haemonetics Corporation | 1.0 |
Arcosa | 1.0 |
IES Holdings | 1.0 |
APi Group | 1.0 |
TOP FIVE SECTORS | % OF NET ASSETS (SUBJECT TO |
Industrials | 25.3 |
Financials | 19.3 |
Information Technology | 16.3 |
Health Care | 10.9 |
Consumer Discretionary | 10.0 |
Recent Developments
Royce Value Trust is a closed-end diversified management investment company whose shares of Common Stock (RVT) are listed and traded on the New York Stock Exchange. Its primary investment goal is long-term capital growth, which it seeks by investing at least
Daily net asset values (NAVs) for Royce Value Trust are now available on our website and online through most ticker symbol lookup services and on broker terminals under the symbol XRVTX. For more information, please call The Royce Funds at (800) 221-4268 or visit our website at www.royceinvest.com.
An investor in Royce Value Trust should consider the Fund's investment goals, risks, fees, and expenses carefully before investing.
Important Disclosure Information
Closed-End Funds are registered investment companies whose shares of common stock may trade at a discount to their net asset value. Shares of each Fund's common stock are also subject to the market risks of investing in the underlying portfolio securities held by the Fund. Royce Fund Services, LLC. ("RFS") is a member of FINRA and has filed this material with FINRA on behalf of each Fund. RFS does not serve as a distributor or as an underwriter to the closed-end funds.
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SOURCE Royce Value Trust, Inc.
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