Royce Micro-Cap Trust (NYSE: RMT) as of Nov 30, 2023
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Insights
The disclosed performance metrics of Royce Micro-Cap Trust provide a comprehensive overview of the fund's recent financial health and investment strategy effectiveness. The average weekly trading volume suggests a moderate level of liquidity, which could influence the stock's volatility and investor interest. The fund's focus on micro-cap companies introduces higher risk due to the inherent volatility and less predictable nature of smaller companies' stocks. However, this risk is somewhat mitigated by the fund's diversified portfolio, which is designed to reduce unsystematic risk.
From a sector allocation perspective, the significant investment in Information Technology and Industrials indicates a focus on sectors that could benefit from long-term trends such as digital transformation and infrastructure development. However, investors should be mindful of sector-specific risks and the potential impact of economic cycles on these industries.
The Price-to-Book (P/B) ratio of 1.8x for the Royce Micro-Cap Trust's portfolio is a critical indicator of valuation. This ratio suggests that the portfolio is trading at a premium relative to book value, which could imply an expectation of future growth or potentially overvalued assets, depending on the industry average. The fund's net asset value (NAV) compared to its market price (MKT) reveals a discount in the market price, which could attract investors looking for potential bargains but also reflects the market's undervaluation of the underlying assets.
When analyzing the fund's performance, the one-year returns are modest, with NAV outperforming MKT, indicating potential inefficiencies in market pricing. The three-year and five-year returns are more robust, suggesting that the fund's long-term investment strategy may be yielding results, albeit with the usual caveats of past performance not being indicative of future results.
Investing in micro-cap companies carries significant risks due to their smaller size, lower liquidity and higher susceptibility to market shocks. The Royce Micro-Cap Trust's approach involves a high degree of risk, which could lead to substantial gains or losses. The fund's diversification across sectors and individual stocks does provide a level of protection against the volatility of individual stock performance, but it does not eliminate the systemic risks associated with the micro-cap segment.
Investors should also consider the expense ratios and management fees associated with the fund, as these can erode returns over time. The performance information, net of the fund's investment advisory fee, gives a realistic picture of investor returns, but the impact of fees becomes more pronounced during periods of lower returns.
- Average weekly trading volume of approximately 507,454 shares
- Fund's adviser has more than 40 years of small- and micro-cap investment experience
CLOSING PRICES AS OF 11/30/23 | ||
NAV | 9.64 | |
MKT | 8.53 | |
AVERAGE ANNUAL TOTAL RETURN AS OF 11/30/23 | NAV (%) | MKT (%) |
One-Month* | 7.95 | 9.22 |
Year to Date* | 4.81 | 4.38 |
One-Year | 1.75 | -0.06 |
Three-Year | 3.95 | 5.35 |
Five-Year | 8.89 | 8.68 |
10-Year | 7.30 | 7.70 |
*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 | 1.8x |
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 | 2.8 |
PAR Technology | 2.2 |
nLIGHT | 1.9 |
EVI Industries | 1.9 |
Major Drilling Group International | 1.9 |
Sprott | 1.8 |
Camtek | 1.8 |
Mesa Laboratories | 1.5 |
Richardson Electronics | 1.5 |
Haynes International | 1.4 |
TOP FIVE SECTORS | % OF NET ASSETS (SUBJECT TO CHANGE) |
Information Technology | 22.5 |
Industrials | 19.2 |
Financials | 15.4 |
Health Care | 11.6 |
Materials | 8.7 |
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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