Entering text into the input field will update the search result below

Reviewing Royce Closed End Funds

Sep. 12, 2019 10:33 AM ETRGT, RMT, RVT, RVVHX, RYOTX16 Comments
RockieK profile picture


  • Three small/micro cap funds, two with managed cash distributions.
  • Relatively low cost and leverage respective to most CEF's.
  • Most appropriate for dividend reinvestment and dollar cost averaging.

My son, PetieK is a self admitted hypebeast. Although he's is a savvy shopper and knows how to stretch a dollar when he needs to, when it comes to name brands, there is no compromise on what's hype. If it is not hype, then he's not wearing it. (Unless it is completely unbranded, and no one else knows where he bought it.)

Source: Tyler the Creator and Glenn O'Brien from Pinterest

Artist Tyler the Creator and Fashion Editor Glenn O

Supreme brand, BAPE hoodies, and Vans top the affordable list. But that doesn't mean there is not the desire for Gucci, Armani, or Off-White products. They are just not on the list of affordable brands. So, poor PetieK has to suffer with a Seiko rather than a Breitling, and Adidas rather than 10 Deep. Just don't suggest any "Dad-brands" or old stuff like Tommy Hilfiger or New Balance.

Some investors have similar attitudes when it comes to asset managers. There are "Brands" out there that have reputations that they find attractive, while others are to be avoided. Some management firms like State Street, BlackRock, PIMCO, or T. Rowe Price have good reputations while others, not so much. But when it comes to small and micro-cap, there is no more "hype" manager than Royce Funds.


You keep using that word. I do not think it means what you think it means" - Inigo Montoya

Princess Bride Poster by Matteo Doni from Flickr.comSource:Princess Bride Poster by Matteo Doni from Flickr.com

We think of hype as a marketing strategy that is used to exaggerate the utility or value of something. But in Gen-Z slang, it is subtly different. Hype is a collection of the most savage, or the most popular. So, in that sense, Royce is certainly "Hype"

For more than 40 years, Royce funds has invested in small and mid sized companies with high internal rates of return. These

This article was written by

RockieK profile picture
My name is G. "Rockie" Kennedy and although I am professionally licensed, I comment and submit articles as an individual for informational and entertainment purposes only.  I am a registered investment advisor and principal of Hanover Personal Financial Services.  I am experienced in the industry since 1997 with an education in finance and economics.  My degree is in finance with a concentration of financial planning.  Prior to financial services industry, was a veteran of the armed services experienced in engineering and nuclear power operations.  In the industry I have worked as an associate financial advisor, stock broker, and investment and tax consultant.  I have been publishing on Seeking Alpha anonymously since 2013.I am a student of Dow Theory in that I believe the markets are leading indicators for the U.S. Economy.  I follow a collection of individual stocks in my personal portfolios and select others in the transportation and industrial sectors.  Periodically I will submit an article on a stock or fund that has caught my attention for other reasons, but none of my articles are intended to be investment advice. I believe in modern portfolio theory, using a core and satellite approach in an attempt to generate alpha in a portfolio, and that individuals should be responsible for, and free to include individual securities in their portfolios.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

This information is not investment advice, nor is it a recommendation to either buy or sell any securities. Retail investors should do their own research and fully understand the risks associated with this company.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (16)

Held Royce Value Trust briefly before noticing how "dividends" were paid out--i.e. in shares, which struck me as extremely odd, given that it bills itself a CEF. From where did new shares come from? After 2 quarters of this, I bailed. Only reason for holding CEFs in my opinion is income. One does not buy CEFs for growth, value, dividend appreciation, etc. One must also be extremely selective as vast majority of CEFs lose share value over time. With that caveat, one buys them purely for the payout.
drdata profile picture
Receiving shares was optional. You could have received cash. Your choice. I speak as a long time shareholder. I chose shares on some occasions, and cash on others.
The shares option has not even been available for several years now.
RockieK profile picture
Thanks for the read and for the comment @Atomic Lobotomy. Yours proves that not all products in a category are appropriate or perfect substitutes.
RockieK profile picture
@drdata ,

Perhaps it is the broker/dealer who holds your shares that has discontinued the share option. To the best of my knowledge Royce DRIP is still available through direct registration at Computershare.


Not sure if you were interested, but thought I'd share nonetheless.
HsterInvestigates profile picture
@RockieK CEFs are worth investing for income and esp. if they beat their index counterpart like RQI beating VNQ. Since RVT underperforms Russell 1000/2000 ETFs VONE/VTWG significantly even after dripping. (Maybe VONV is a better comparison but still RVT underperforms. ) What am I missing?
RockieK profile picture
@HsterInvestigates . I don't think you are missing anything.

Closed end funds are unique investment vehicles that should not be directly compared to other ETP's like ETF's. However there are enough similarities that they may be substitutionary when we start talking about meeting the needs of an investor portfolio. That is where the role of individual suitability comes into play.

For one investor, the individual performance of each security relative to its benchmark is the most important metric when determining suitability. In this investor's case, selecting either of the ETF's would be more logical decision.

For another investor, uniformity and simplicity is of more importance than the bottom line; as long as that bottom line remains above a certain point. For this investor, DRIPPing the CEF at a firm where they already have assets may be a better alternative than "spreading oneself too thin" and bringing on a new/untried from/brand/manager.

For the second investor's case, the ETF is not a good substitute because it means additional accounting, record keeping, due diligence, etc. that may go well above and beyond what they deem necessary.

Hopefully that makes sense.

And, I would go so far as to say that CEF's are worth investing in if they beat their benchmark because:
- some are benchmarked wrong
- some are cleverly structured to... well let's just say that they ALWAYS make the house money, no matter what.
- some are so expensive that beating the benchmark is just not enough.
Including tax as a consideration for returns is not appropriate because each individuals tax circumstances are different. It leads me to believe that this is a hit piece.
RockieK profile picture
Not a hit job. But @ababich1, I made you think about taxes.

My job here is done.

Thanks for the read.
bobholt profile picture
I've held RVT since the end of May 2018. I calculate return per year for all of my holdings and RVT gives me 7.3%. It is one of my few small cap holdings and I'm going to hold.
RockieK profile picture
@Holtgraver, that's a very short holding period for an investment like this. If you are underweight in the asset class, is there anything holding you back in adding to it?
bobholt profile picture
Thanks for the thought. I probably will add to it significantly when I get some cash. (Retired and using Div Reinvest).
MathRulz profile picture
FYI—“Inigo” Not “Indigo”
RockieK profile picture
Thank you @MathRulz . My autocorrect keeps changing it from the name to the color, so I've asked SA to fix it for us.
Mr_Kurtz profile picture
to add to that last comment - soon the only investors left in roycefunds will be the employees themselves. future bagholders for sure.
Mr_Kurtz profile picture
fees are exorbitant compared to the value/service being offered. royce has lost more than 50% of its $AUM in the last 5 years, and the talent that was laid off hasnt been replaced by anything meaningful. not sure how they can still afford rent on 5th ave nyc. they own some good assets but they are managed extremely poorly. pass.
RockieK profile picture
Thanks for the read and comment @Mr_Kurtz . You are very correct that Brand does not equate to value. And I'm not sure how anyone can afford rent on 5th Ave.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

Related Stocks

SymbolLast Price% Chg
Royce Global Value Trust
Royce Micro Cap Trust
Royce Value Trust
Royce Small-Cap Value Fund Inv
Royce Micro Cap Series Fund Inv

Related Analysis

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.