Royce Micro-Cap Trust (NYSE: RMT) as of Jan 31, 2024
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Insights
The reported average weekly trading volume for Royce Micro-Cap Trust provides a snapshot of investor interest and liquidity in the fund's shares. The volume indicates the ease with which investors can enter or exit positions. Furthermore, the fund's investment in micro-cap companies is a strategy that typically involves higher risk but can offer higher returns, appealing to a specific investor demographic. The fund's historical performance, with a five-year annual total return of over 10%, suggests resilience and potential for growth, despite the inherent volatility of the micro-cap sector.
However, the recent one-month negative returns highlight the short-term volatility that can affect such investments. The discrepancy between NAV and market prices indicates that the shares may be trading at a discount, which could attract investors looking for undervalued opportunities but also signals a potential lack of confidence among investors.
The disclosed expense information and past performance metrics are critical for evaluating the fund's efficiency and historical growth. The total return basis, net of the fund's investment advisory fee, provides transparency into the actual gains investors might have realized, which is a vital consideration for potential investors. The fund's focus on reinvestment of distributions is a strategy that can compound growth over time, a key factor for long-term investment consideration.
Additionally, the fund's broadly diversified portfolio across sectors such as Information Technology and Industrials could mitigate some of the risks associated with micro-cap investing. Nevertheless, the fund's warning about the higher risk of micro-cap investing compared to larger-cap companies is a reminder of the potential for significant losses, which should be weighed against the long-term growth objectives.
The Royce Micro-Cap Trust's focus on micro-cap companies reflects a particular economic viewpoint that emphasizes the growth potential of smaller firms. These firms often have the ability to adapt quickly to changing economic conditions, which can be advantageous during times of economic growth. However, they may also be more susceptible to market downturns and liquidity issues. The fund's average market cap and weighted average P/B ratio provide insight into the valuation and market sentiment toward the portfolio's holdings.
The harmonic and geometric averages used in portfolio diagnostics are sophisticated metrics that offer a more nuanced view of the fund's position than simple averages. Understanding these metrics is crucial for investors who are assessing the fund's strategy and the potential risk-reward balance of their investment.
- Average weekly trading volume of approximately 526,428 shares
- Fund's adviser has more than 50 years of small- and micro-cap investment experience
CLOSING PRICES AS OF 01/31/24 | |
NAV | 10.14 |
MKT | 9.01 |
AVERAGE ANNUAL TOTAL RETURN AS OF 01/31/24 | NAV (%) | MKT (%) |
One-Month* | -3.15 | -2.49 |
One-Year | 3.43 | 3.55 |
Three-Year | 2.30 | 3.34 |
Five-Year | 10.80 | 10.82 |
10-Year | 8.17 | 8.37 |
*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 normally invests in 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.
PORTFOLIO DIAGNOSTICS | |
Average Market Cap1 | |
Weighted Average P/B2 | 1.9x |
Net Assets |
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-to-Book, or P/B, Ratio is calculated by dividing a company's share price by its book value per share.
Portfolio Composition
TOP 10 POSITIONS | % OF NET ASSETS (SUBJECT TO CHANGE) |
Transcat | 3.1 |
PAR Technology | 2.6 |
Major Drilling Group International | 2.0 |
Sprott | 1.8 |
nLIGHT | 1.8 |
Mesa Laboratories | 1.6 |
EVI Industries | 1.6 |
Camtek | 1.6 |
Haynes International | 1.5 |
Cellebrite DI | 1.3 |
TOP FIVE SECTORS | % OF NET ASSETS (SUBJECT TO CHANGE) |
Information Technology | 23.1 |
Industrials | 19.4 |
Financials | 16.2 |
Health Care | 11.9 |
Materials | 8.3 |
Recent Developments
Royce Micro-Cap Trust, Inc. is a closed-end diversified investment company whose shares of Common Stock (RMT) are listed and traded on the New York Stock Exchange. The Fund's investment goal is long-term capital growth, which it seeks by investing primarily in equity securities of companies that, at the time of investment, have market capitalization of
Daily net asset values (NAVs) for Royce Micro-Cap Trust, Inc. are now available on our website and online through most ticker symbol lookup services and on broker terminals under the symbol XOTCX. For more information, please call The Royce Funds at (800) 221-4268 or visit our website at www.royceinvest.com
An investor in Royce Micro-Cap 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 Micro-Cap Trust, Inc.
FAQ
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