UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549FORM N-CSR
CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIESInvestment Company Act file number: 811-22532
Name of Registrant: Royce Global Value Trust, Inc.
Address of Registrant: 745 Fifth Avenue
Name and address of agent for service: John E. Denneen, Esq.
New York, NY 10151
745 Fifth Avenue
New York, NY 10151Registrant’s telephone number, including area code: (212) 508-4500
Date of fiscal year end: December 31, 2015
Date of reporting period: January 1, 2015 – June 30, 2015
Item 1. Reports to Shareholders.
JUNE 30, 2015 2015 Semiannual Review and Report to Stockholders Royce Value Trust Royce Micro-Cap Trust Royce Global Value Trust roycefunds.com
A Few Words on Closed-End FundsRoyce & Associates, LLC manages three closed-end funds: Royce Value Trust, which invests primarily in small-cap securities; Royce Micro-Cap Trust, which invests primarily in micro-cap securities; and Royce Global Value Trust, which invests in both U.S. and non-U.S. small-cap stocks. A closed-end fund is an investment company whose shares are listed and traded on a stock exchange. Like all investment companies, including open-end mutual funds, the assets of a closed-end fund are professionally managed in accordance with the investment objectives and policies approved by the fund’s Board of Directors. A closed-end fund raises cash for investment by issuing a fixed number of shares through initial and other public offerings that may include shelf offerings and periodic rights offerings. Proceeds from the offerings are invested in an actively managed portfolio of securities. Investors wanting to buy or sell shares of a publicly traded closed-end fund after the offerings must do so on a stock exchange, as with any publicly traded stock. Shares of closed-end funds frequently trade at a discount to their net asset value. This is in contrast to open-end mutual funds, which sell and redeem their shares at net asset value on a continuous basis.
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Table of Contents Semiannual Review Letter to Our Stockholders 2 Performance 5 Semiannual Report to Stockholders Managers’ Discussions of Fund PerformanceRoyce Value Trust
6Royce Micro-Cap Trust
8Royce Global Value Trust
10 History Since Inception 12Distribution Reinvestment and Cash Purchase Options 14
Schedules of Investments and Other Financial Statements
Royce Value Trust
15
Royce Micro-Cap Trust
30
Royce Global Value Trust
43 Directors and Officers 55 Board Approval of Investment Advisory Agreements 56 Notes to Performance and Other Important Information 58This page is not part of the 2015 Semiannual Report to Stockholders
Letter to Our Stockholders
“THE TIME IS OUT OF JOINT”
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LETTER TO OUR STOCKHOLDERS
effect of creating decidedly narrow market leadership within the small-cap space. Outside of biotech, strong first-half performances were mostly limited to a handful of other Health Care industries, software companies, and a few outliers such as construction materials and tobacco. The small-cap market has thus moved from the tightly correlated markets of 2011-2013 into a new phase of wide divergence and constricted leadership. From our perspective, then, the market is indeed out of joint.
“MORE THINGS IN HEAVEN AND EARTH…”
We have actually been arguing that the market has been disjointed for some time now. Fed policies designed to keep the economy and capital markets above water, which included multiple rounds of QE and keeping interest rates at or near zero, had other, unintended consequences that had an outsized effect on the small-cap market. For example, it became both easy and affordable for businesses to add debt, essentially eroding the risk differential between lower- and higher-quality businesses. Lower-quality and more highly levered companies then began a historically atypical period of outperformance in which our funds mostly did not participate. The Fed’s zero-interest-rate policy (“ZIRP”) also stoked an intense hunger for yield, which drove up values for bond-proxy equities such as REITs and Utilities, regardless of their underlying quality or profitability, that have only recently begun to correct. These actions also boosted stock correlations and reduced volatility, making it harder to find the kind of mispriced opportunities that have always been our stock in trade. Finally, there were significant runs for high-growth, non-earning, and more speculative businesses, many with negative EBIT. This continues into the present day with the recent contraction of small-cap leadership, which represents more of a bet on long-duration assets than current profitability. In each of these cases, our more qualitative, risk-conscious approaches have in general kept us away from these areas. While we are confident that this trend will fade and that speculative bubbles will burst, we also understand the frustrations that have built over the last few years as active managers such as ourselves have continued to lag our respective benchmarks. So do these challenges mean that something is rotten in the state of small-cap, if only in some of its actively managed precincts? That is the question, more or less, that we have been wrestling with of late. To be sure, we ran the gamut in the first half from disappointment to optimism to frustration as investor preferences moved around. They first showed favor to long-duration assets, then looked, if only briefly, toward consistently profitable and/or conservatively capitalized companies before shifting back again. However, we have seen enough signs, both economically and in the market, which suggest that stocks are slowly moving back to what we would call their historical norm—lower overall returns, higher volatility, and long-term advantages for companies with consistent profits and high returns on invested capital.
Most notably, there was a positive directional trend dating from the first-half low for the 10-year Treasury on January 30
Equity Indexes
As of June 30, 2015 (%) • Greek Drama Creates Underwhelming Results—The Greek default late in June eroded gains—giving equities second-quarter results that more closely hugged the flat line. The tech-oriented Nasdaq Composite was the leader, up 1.8%, followed by the small-cap Russell 2000 Index, which finished the quarter with a gain of 0.4%. The large-cap S&P 500 and Russell 1000 Indexes rose 0.3% and 0.1%, respectively. • Long-Term Returns in Excess—Both large-cap and small-cap indexes’ three- and five-year average annual total returns for the periods ended 6/30/15 were above 17%, well in excess of each index’s historical average. • Healthy and Informed—Health Care and Information Technology were the best performing sectors in the Russell 2000 year-to-date through 6/30/15—the former led by a wide margin—while Utilities and Materials were the worst performers in the year’s first half. YTD1 1-YR 3-YR 5-YR 10-YR Russell 2000 4.75 6.49 17.81 17.08 8.40 S&P Small Cap 600 4.15 6.70 18.81 18.44 9.28 S&P 500 1.23 7.42 17.31 17.34 7.89 Russell 1000 1.71 7.37 17.73 17.58 8.13 Nasdaq Composite 5.30 13.13 19.33 18.78 9.26 Russell Midcap 2.35 6.63 19.26 18.23 9.40 Russell Microcap 6.03 8.21 19.25 17.48 7.07 Russell Global ex-U.S. Small Cap 7.74 -3.46 11.35 8.99 7.07 Russell Global ex-U.S. Large Cap 4.23 -5.02 9.96 8.13 5.80 1Not annualized For details on The Royce Funds’ performance in the period, please turn to the Managers’ Discussions that begin on page 6.
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LETTER TO OUR STOCKHOLDERS
through the end of the first half. During this period, which included the bearish month of April, we were pleased with the way many of our portfolios either outperformed their benchmarks or began to narrow the gap. This was very clear during the growth scare engendered by (at the time) negative first-quarter GDP numbers, which led many companies to begin revising their earnings expectations downward. Of course, when it became clear that much of what put a drag on first-quarter numbers was temporary, including such factors as the awful winter weather, the West Coast port strike, and the plunge in oil prices, things began to pick up again fairly quickly, at least for the more speculative areas within Health Care and a few other narrow equity locales.
“THE READINESS IS ALL”
Yet this period also offered a potential preview of how the landscape for stocks will look when short-term interest rates begin to rise—which is likely to be later this year. We see higher rates breeding more uncertainty, be it about inflation, the cost of capital, or a number of other issues. This in turn typically leads to more mispricing in the short run, which creates precisely the opportunities that we crave as risk-conscious bargain hunters. To us, high rates are synonymous with higher risk. A higher-risk environment also tends to benefit quality companies (by which we mean conservatively capitalized, profitable businesses with high returns on invested capital and effective, shareholder-friendly management). So we have no worries about rising rates or greater volatility in the markets. In fact, we welcome both.
We see quality differentiating itself when risk premiums rise because quality businesses are better businesses—as profitable, financially sound enterprises, they are purpose-built and run to survive periods of higher risk and/or greater uncertainty, which helps to explain why the market of the last several years has seen many of these companies disadvantaged in the easy-money,
ZIRP environment. In a phase in which few if any of the traditional penalties were paid for larding leverage onto corporate balance sheets, there were also scant advantages that have historically accrued to higher-quality, more conservatively capitalized companies.
We feel confident that this era is over. Our expectation is for lower returns for stocks as a whole, but relatively better returns for both high-quality companies and more cyclical, less defensive sectors. We suspect that in a few years market observers will look back at 2015—and perhaps the longer span covering 2013-2015—as a hinge period in which the gradual sun-setting of interventionist Fed policies, coupled with the steady growth of the economy, restored the capital markets to something closer to more familiar historical patterns of performance and volatility. This is why we have been patiently holding so many companies in cyclical sectors, such as Industrials, Materials, and, more recently, Energy—they boast many attractive characteristics that the market has not yet fully recognized, a phenomenon we expect will change as the economy heats up. In our estimation their profitability, growth prospects, and reasonable to attractive valuations make them coiled springs. Until then, we wait.
To be sure, it has been a cycle of, at times, seemingly endless challenges for our active and risk-conscious approaches. Our collective patience has been sorely tested as we have waited (and waited) for many of our highest-confidence holdings to turn around. Of course, transitions are never easy, and the turn we have been anticipating has taken longer, after a few false starts, than any of us initially anticipated. Change, however, can take time—and we are often aware that a dramatic turn has occurred only in retrospect. We are content, then, to continue investing in the same way that we have for more than four decades—with a close eye on risk as we look for the intersection of attractive valuation and organic growth potential.
Sincerely,
Charles M. Royce Christopher D. Clark Francis D. Gannon Chief Executive Officer, President and Co-Chief Investment Officer, Co-Chief Investment Officer, Royce & Associates, LLC Royce & Associates, LLC Royce & Associates, LLC July 31, 2015
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Performance
NAV Average Annual Total Returns As of June 30, 2015 (%) YTD1 1-YR 3-YR 5-YR 10-YR 15-YR 20-YR 25-YR SINCE INCEPTION INCEPTION DATE Royce Value Trust 1.69 -0.49 15.08 13.90 7.34 8.87 10.26 10.77 10.61 11/26/86 Royce Micro-Cap Trust -0.52 -0.05 17.94 16.05 8.25 10.15 11.16 n.a. 11.20 12/14/93 Royce Global Value Trust 5.62 -6.18 n.a. n.a. n.a. n.a. n.a. n.a. 1.04 10/17/13 INDEX Russell 2000 Index 4.75 6.49 17.81 17.08 8.40 7.50 9.15 9.89 n.a. n.a. Russell Microcap Index 6.03 8.21 19.25 17.48 7.07 7.79 n.a. n.a. n.a. n.a. Russell Global Small Cap Index 6.37 0.34 13.69 11.77 7.36 7.30 n.a. n.a. n.a. n.a. 1 Not annualizedImportant Performance and Risk Information
All performance information in this Review and Report reflects past performance, is presented on a total return basis, and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, so that shares may be worth more or less than their original cost when sold. Current performance may be higher or lower than performance quoted. Current month-end performance may be obtained at www.roycefunds.com. The Funds are closed-end registered investment companies whose respective shares of common stock may trade at a discount to the net asset value. Shares of each Fund’s common stock are also subject to the market risk of investing in the underlying portfolio securities held by each Fund. Certain immaterial adjustments were made to the net assets of Royce Micro-Cap Trust at 12/31/12, as well as 12/31/14, for financial reporting purposes, and as a result the net asset value originally calculated on that date and the total return based on that net asset value differs from the adjusted net asset value and total return reported in the Financial Highlights. All indexes referenced are unmanaged and capitalization-weighted. Each index’s returns include net reinvested dividends and/or interest income. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. The Russell 2000 Index is an index of domestic small-cap stocks that measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 Index. The Russell Microcap Index includes 1,000 of the smallest securities in the small-cap Russell 2000 Index, along with the next smallest eligible securities as determined by Russell. The Russell Global Small Cap Index is an unmanaged, capitalization-weighted index of global small-cap stocks. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index. Index returns include net reinvested dividends and/or interest income. Royce Value, Micro-Cap and Global Value Trust shares of common stock trade on the NYSE. Royce Fund Services, Inc (“RFS”) is a member of FINRA and has filed this Review and Report with FINRA on behalf of each Fund. RFS is not an underwriter or distributor of any of the Funds.
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MANAGER’S DISCUSSION Royce Value Trust (RVT)
Chuck Royce
FUND PERFORMANCE Royce Value Trust (NYSE: RVT) gained 1.7% on an NAV (net asset value) basis and 0.3% on a market price basis for the year-to-date period ended June 30, 2015, lagging each of its unleveraged small-cap benchmarks. For the same period, the Russell 2000 Index rose 4.8% while the S&P SmallCap 600 climbed 4.2%. Equities got off to a slow start in 2015 but soon righted themselves, with a bearish January giving way to solid first-quarter gains that were driven mostly by a strong rebound in February. RVT was up 1.0% on an NAV basis and 2.0% on a market price basis during the first quarter, trailing the Russell 2000, which gained 4.3%, and the S&P SmallCap 600, which advanced 4.0%.
A similar pattern could be seen in the second quarter, as small-cap share prices stumbled through a downturn in April (when RVT lost less than both small-cap indexes on an NAV and market price basis) before rallying in May. June wound up being a volatile month, though this was not fully felt until its second-to-last day when the Greek default sent global stock prices into a tailspin. On an NAV basis, the Fund felt the brunt less than its benchmarks, which helped to make the second quarter a relatively strong one. RVT was up 0.7% based on NAV but fell 1.7% based on market price, while the Russell 2000 was up 0.4% and the S&P Small Cap 600 rose 0.2%. This was not enough, however, to overcome the portfolio’s first-quarter disadvantage. On an NAV and market price basis, the Fund outperformed the Russell 2000 for the 15-, 20-, 25-year, and since inception (11/26/86) periods ended June 30, 2015 while trailing the S&P SmallCap 600. RVT’s average annual NAV total return for the since inception period was 10.6%.
WHAT WORKED… AND WHAT DIDN’T
On a relative basis versus the Russell 2000, two sectors made a significant negative impact for the semiannual period. Health Care was the clear leader within the small-cap market as a whole, driven by highly impressive results for biotech stocks. The Fund was significantly underweight this sector and had very limited exposure to biotech companies, which hurt relative performance. RVT was slightly overweight in Information Technology during the first half but was also meaningfully underweight in software companies, which dominated overall small-cap returns in a fashion similar to what biotech did in Health Care.
RVT’s first-half results were also affected by net losses in the Energy and Materials sectors. In the former, the energy equipment & services group had a sizable negative impact while the metals & mining group in Materials detracted most out of all the Fund’s industry groups. Net losses at the position level were relatively modest. ADTRAN manufactures telecommunications networking equipment and internetworking products. We began reducing our position in the first half, primarily due to our frustration with waiting several quarters for revenues from a telecom equipment deal with AT&T to produce revenue. ADTRAN then announced that this project had been effectively scrapped because AT&T was rethinking its capital spending plans. Absent this business, which we thought would be a key revenue driver going forward, ADTRAN’s outlook looked far less attractive relative to other opportunities. We chose to hold our shares of Anixter International as its stock slipped. The company provides security systems and solutions, makes enterprise cabling, and also distributes electrical and electronic wire. Its stock was hurt when the company reduced its organic growth outlook for the year in two of its core distribution businesses—the enterprise cabling and security solutions line and its electronic wire and cable segment. Still, we like its prospects for recovery. We also held shares of another detractor, Qalaa Holdings (formerly Citadel Capital), a leading investment company in Africa and the Middle East. Its stock suffered from fears that lower oil prices would result in a reduction in Egyptian investment by the oil-producing countries of the Persian Gulf. Turning to those areas that contributed to first-half returns, Industrials topped all of RVT’s 10 equity sectors and was positive relative to the Russell 2000. Top-contributing positions included The Hackett Group, which offers business consulting and technology implementation services. The firm’s shares moved higher in mid-May following the announcement of sterling results for its fiscal first quarter. Value Partners Group is a Hong Kong-based asset manager. Its stock rose sharply into May before correcting with the decline in Chinese stocks. We were pleased to see growth in its assets under management and improved performance and management fees, all of which helped its earnings. Nautilus, like The Hackett Group a top-10 holding at the end of June, makes branded health and fitness products such as Schwinn, Bowflex, and Nautilus itself. Its stock grew stronger after the firm reported double-digit earnings growth for its fiscal first quarter.
Top Contributors to Performance
Year-to-Date Through 6/30/15 (%)1 Hackett Group (The) 0.37 Value Partners Group 0.34 Nautilus 0.33 Insperity 0.18 On Assignment 0.17 1 Includes dividends
Top Detractors from Performance
Year-to-Date Through 6/30/15 (%)2 ADTRAN -0.14 Anixter International -0.13 Citadel Capital -0.13 Preformed Line Products -0.12 Ethan Allen Interiors -0.11 2 Net of dividends
CURRENT POSITIONING AND OUTLOOK At the end of June, RVT remained overweight in Industrials, Materials, and Information Technology—substantially so in the first two of the three sectors. Our focus remains on companies that look poised for profit margin expansion as their revenue growth normalizes in concert with a faster-moving U.S. economy.
6 | 2015 Semiannual Report to Stockholders
PERFORMANCE AND PORTFOLIO REVIEW SYMBOLS MARKET PRICE RVT NAV XRVTX
Performance Average Annual Total Return (%) Through 6/30/15 JAN-JUN 2015** 1-YR 3-YR 5-YR 10-YR 15-YR 20-YR 25-YR SINCE INCEPTION (11/26/86) RVT (NAV) 1.69 -0.49 15.08 13.90 7.34 8.87 10.26 10.77 10.61 *Not Annualized
Market Price Performance History Since Inception (11/26/86)Cumulative Performance of Investment through 6/30/1511 Reflects the cumulative performance of an investment made by a stockholder who purchased one share at inception ($10.00 IPO), reinvested all distributions and fully participated in primary subscriptions of the Fund’s rights offerings. 2 Reflects the actual month-end market price movement of one share as it has traded on the NYSE.
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 58 for additional information.
Top 10 Positions % of Net Assets Nautilus 1.2 Hackett Group (The) 1.1 Ritchie Bros. Auctioneers 1.1 HEICO Corporation 1.1 On Assignment 1.1 Woodward 0.9 SEI Investments 0.9 Forward Air 0.9 Newport Corporation 0.8 Reliance Steel & Aluminum 0.8
Portfolio Sector Breakdown % of Net Assets Industrials 28.4 Information Technology 19.7 Financials 17.1 Consumer Discretionary 12.4 Materials 7.3 Health Care 5.0 Energy 2.8 Consumer Staples 2.5 Telecommunication Services 0.5 Utilities 0.1 Miscellaneous 3.0 Cash and Cash Equivalents, Net of
Outstanding Line of Credit 1.2
Calendar Year Total Returns (%) YEAR RVT (NAV) 2014 0.8 2013 34.1 2012 15.4 2011 -10.1 2010 30.3 2009 44.6 2008 -45.6 2007 5.0 2006 19.5 2005 8.4 2004 21.4 2003 40.8 2002 -15.6 2001 15.2 2000 16.6
Portfolio Diagnostics Fund Net Assets $1,224 million Number of Holdings 503 Turnover Rate 17% Net Asset Value $15.85 Market Price $13.79 Average Market Capitalization1 $1,344 million Weighted Average P/E Ratio2,3 20.4x Weighted Average P/B Ratio2 2.6x Holdings ≥ 75% of Total Investments 159 Active Share4 90% U.S. Investments (% of Net Assets) 81.8% Non-U.S. Investments (% of Net Assets) 17.0% 1 Geometric 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. 2 Harmonic 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 or book value, as the case may be, of its underlying stocks. 3 The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (12% of portfolio holdings as of 6/30/15). 4 Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two.
Important Performance and Risk Information All performance information reflects past performance, is presented on a total return basis, 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 most recent month-end may be obtained at www.roycefunds.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- 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. Regarding the “Top Contributors” and “Top Detractors” tables shown on page 6, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to date performance for 2015.
2015 Semiannual Report to Stockholders | 7
MANAGER’S DISCUSSION Royce Micro-Cap Trust (RMT)
Chuck Royce
FUND PERFORMANCE For the year-to-date period ended June 30, 2015, Royce Micro-Cap Trust (NYSE: RMT) was down 0.5% on an NAV (net asset value) basis and fell 4.2% on a market price basis, trailing both of its unleveraged benchmarks. The small-cap Russell 2000 Index gained 4.8% while the Russell Microcap Index increased 6.0% for the same period. The Fund got off to a difficult start, losing more than each benchmark during the bearish January and underperforming for the first quarter as a whole—RMT lost 0.8% on an NAV basis and was down 0.6% on a market price basis compared to a gain of 4.3% for the Russell 2000 and an increase of 3.1% for the Russell Microcap in the opening quarter of 2015.The second quarter was similarly underwhelming. RMT was up 0.3% on an NAV basis but slipped 3.6% based on market price versus respective second-quarter gains of 0.4% and 2.8% for the small-cap and micro-cap indexes. Long-term results offered more encouragement. The Fund outperformed the Russell 2000 on an NAV basis for the three-, 15-, 20-year, and since inception (12/14/93) periods ended June 30, 2015 while also beating the Russell Microcap for the 10- and 15-year periods ended June 30, 2015. (Returns for the Russell Microcap only go back to 2000.) RMT’s average annual NAV total return since inception was 11.2%.
WHAT WORKED... AND WHAT DIDN’T When comparing the Fund’s results for the semiannual period to those of its benchmarks, three sectors stand out as problem areas—Consumer Discretionary, Health Care, and Information Technology. Only the first of these sectors, however, posted a net loss in the portfolio, mostly due to dismal results for five industries: the diversified consumer services, media, specialty retail, household durables, and textile, apparel & luxury goods groups. Health Care cut both ways in the first half. It led all of the portfolio’s 10 equity sectors by a good-sized margin, yet its performance paled before that area’s results within the Russell 2000 and Microcap indexes. Much of this can be traced to the Fund being significantly underweight the sector as a whole as well as having very little exposure to biotech stocks, which dominated first-half results for both of RMT’s benchmarks. Most biotech companies, however, lack the fundamental attributes we seek in our holdings. While Information Technology showed a net gain in the Fund for the first half, it also came up short versus that same sector’s results in the small-cap and micro-cap indexes. Two industry groups—Internet software & services and software—fared poorly versus the indexes. As was the case with Consumer Discretionary, we were overweight Information Technology at the end of June and believed that many holdings in both sectors can continue to rebound in concert with a more robustly recovering economy.The Industrials sector posted respectable net gains on both an absolute and relative basis, keyed by a terrific performance from the Fund’s top contributor, Frontier Services Group. The Hong Kong-based company provides logistical services in Africa and benefited from a large capital gain on a portfolio investment and investor perception that its enhanced liquidity position will help fund FSG’s plan to expand its logistics network. Two of RMT’s top-10 holdings also made solid contributions. Shares of Ohio-based investment management firm Diamond Hill Investment Group climbed over much of the last few years, boosted most recently by strong earnings and growing revenues. Nautilus offers branded health and fitness products such as Schwinn, Bowflex, and Nautilus itself. Its stock gained strength after the firm reported double-digit earnings growth for its fiscal first quarter, part of a multi-year turnaround that kicked off when new management came on board four years ago. New products and operational discipline helped to improve profitability.
As for those positions that detracted from results, we added shares of LeapFrog Enterprises early in the year when its stock was falling. The company makes technology-based educational platforms with curriculum interactive software content and standalone products. Around the same time the firm reported a fiscal third-quarter loss (caused primarily by poor sales and late product shipments), a class action suit was announced. We like its solid brand and think its business has value. EZCORP owns and operates pawn shops. Its stock fell sharply in the first quarter as the firm revised earnings downward before it declined further on news in April that it would delay its fiscal second-quarter earnings release because of an ongoing review of a loan portfolio. We reduced our position in March. Value Line produces investment-related periodical publications and also provides investment advisory services to mutual funds, institutions, and individuals. While the company remained solidly profitable and pays a dividend, its shares trended downward through much of the first half. We were happy to hold shares at the end of June.
Top Contributors to Performance
Year-to-Date Through 6/30/15 (%)1 Frontier Services Group 0.97 Diamond Hill Investment Group 0.39 Nautilus 0.27 Smith & Wesson Holding Corporation 0.24 GTT Communications 0.22 1 Includes dividends
Top Detractors from Performance
Year-to-Date Through 6/30/15 (%)2 LeapFrog Enterprises Cl. A -0.32 EZCORP Cl. A -0.24 Value Line -0.22 Qumu Corporation -0.20 Graham Corporation -0.20 2 Net of dividends
CURRENT POSITIONING AND OUTLOOK The Fund had a significant overweight in Industrials and was also overweight in Consumer Discretionary, Information Technology, and Materials at the end of the semiannual period. We continue to believe that economic growth will accelerate, which should help portfolio holdings in these more cyclical sectors.
8 | 2015 Semiannual Report to Stockholders
PERFORMANCE AND PORTFOLIO REVIEW SYMBOLS MARKET PRICE RMT NAV XOTCX
Performance Average Annual Total Return (%) Through 6/30/15 JAN-JUN 2015* 1-YR 3-YR 5-YR 10-YR 15-YR 20-YR SINCE INCEPTION (12/14/93) RMT (NAV) -0.52 -0.05 17.94 16.05 8.25 10.15 11.16 11.20 *Not Annualized
Market Price Performance History Since Inception (12/14/93)Cumulative Performance of Investment11 Reflects the cumulative performance experience of a continuous common stockholder who purchased one share at inception ($7.50 IPO), reinvested all distributions and fully participated in the primary subscription of the Fund’s 1994 rights offering. 2 Reflects the actual month-end market price movement of one share as it has traded on NYSE and, prior to 12/1/03, on the Nasdaq.
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 58 for additional information.
Top 10 Positions % of Net Assets Diamond Hill Investment Group 1.2 Integrated Electrical Services 1.1 Atrion Corporation 1.1 MVC Capital 1.1 Seneca Foods 1.0 Nautilus 1.0 Newport Corporation 1.0 NN 1.0 Heritage-Crystal Clean 0.9 Mesa Laboratories 0.9
Portfolio Sector Breakdown % of Net Assets Information Technology 22.6 Industrials 20.7 Financials 19.8 Consumer Discretionary 16.6 Health Care 10.7 Materials 6.4 Consumer Staples 2.8 Energy 1.7 Utilities 0.3 Telecommunication Services 0.1 Miscellaneous 4.2 Preferred Stock 0.3 Outstanding Line of Credit, Net of Cash
and Cash Equivalents -6.2
Calendar Year Total Returns (%) YEAR RVT (NAV) 2014 3.5 2013 44.5 2012 17.3 2011 -7.7 2010 28.5 2009 46.5 2008 -45.5 2007 0.6 2006 22.5 2005 6.8 2004 18.7 2003 55.5 2002 -13.8 2001 23.4 2000 10.9
Portfolio Diagnostics Fund Net Assets $376 million Number of Holdings 358 Turnover Rate 17% Net Asset Value $10.77 Market Price $9.22 Net Leverage1 6% Average Market Capitalization2 $349 million Weighted Average P/E Ratio3,4 19.6x Weighted Average P/B Ratio3 2.1x Holdings ≥ 75% of Total Investments 155 Active Share5 95% U.S. Investments (% of Net Assets) 90.8% Non-U.S. Investments (% of Net Assets) 15.4% 1Net leverage is the percentage, in excess of 100%, of the total value of equity type investments, divided by net assets.2Geometric 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.3Harmonic 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 or book value, as the case may be, of its underlying stocks.4The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (25% of portfolio holdings as of 6/30/15).5Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two.
Important Performance and Risk InformationAll performance information reflects past performance, is presented on a total return basis, 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 most recent month-end may be obtained at www.roycefunds.com. Certain immaterial adjustments were made to the net assets of Royce Micro-Cap Trust at 12/31/12 and 12/31/14 for financial reporting purposes, and as a result the net asset value originally calculated on that date and the total return based on that net asset value differs from the adjusted net asset value and total return reported in the Financial Highlights. 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 investments in securities of 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 U.S. investments. Regarding the “Top Contributors” and “Top Detractors” tables shown on page 8, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to-date performance for 2015.
2015 Semiannual Report to Stockholders | 9
MANAGER’S DISCUSSION Royce Global Value Trust (RGT)
Chuck Royce
FUND PERFORMANCE Royce Global Value Trust gained 5.6% on an NAV (net asset value) basis and 3.4% on a market price basis for the year-to-date period ended June 30, 2015, lagging its benchmark, the Russell Global Small Cap Index, which advanced 6.4% for the same period. For most U.S. stocks, 2015 started on a discouraging note while non-U.S. equities had more mixed results. We were disappointed to see the Fund shed more value than the benchmark in January, lag in the bullish February, in which results were driven largely by U.S. and European equities, and fall back into the red in March. In the first quarter, Global Value Trust was up 0.6% on an NAV basis and 0.1% on a market price basis versus 3.9% for the index.The Fund’s fortunes shifted in the opening month of the second quarter, when it held a generous lead over the global small-cap index on an NAV basis (+5.7% versus +2.3%). Unfortunately, this advantage did not last, and the Fund fell behind during May, when returns were lower though positive, and June, which turned decidedly bearish late in the month thanks to the Greek default and the quickening pace of decline for Chinese stocks. Global Value Trust, however, hung on to its relative edge thanks to its terrific April. For the second quarter, the Fund rose 4.9% on an NAV basis and 3.2% on a market price basis, outpacing the benchmark, which advanced 2.4% for the same period. While the Fund’s initial results have been underwhelming on both an absolute and relative basis, we remain confident that our disciplined, bottom-up approach can be successful.
WHAT WORKED... AND WHAT DIDN’T Of the Fund’s eight equity sectors, Financials and Industrials—followed by Consumer Discretionary—led performance in the semiannual period. We were pleased that the first of these groups also achieved better results than the sector did within the portfolio’s benchmark while the second had a modestly negative impact relative to the benchmark. Three other sectors—Information Technology, Materials, and Health Care—had a more pronounced adverse effect on relative results. The first two were the largest detractors on an absolute basis as well. The Fund’s two biggest net losses at the position level came from Information Technology and are based in Germany. Aixtron engineers and manufactures metal organic chemical vapor deposition (MOVD) systems used to produce compound semiconductor layer structures for use in LED, laser, solar cell, and other applications. Its stock has been mostly trending downward over the last couple of years and began to fall more steadily late in 2014 and into 2015 as growth in revenues and earnings remained poor. We sold our position in mid-March. LPKF Laser & Electronics develops specialized mechanical engineering products for electronics production, the automotive industry, and in the manufacture of solar cells. After a disappointing 2014, its shares rallied briefly in February only to begin falling again in March after a disappointing first-quarter report led to a wave of selling. We reduced our position in the first half.
At the country level, holdings in the U.S. and Brazil had the largest negative impact on results in the first half. Net losses were somewhat mitigated, however, by holdings in Japan, the U.K., and Hong Kong. The advantage for the third of those nations was largely due to a position in the capital markets industry. Also a top-10 position at the end of June, Value Partners Group is a Hong Kong-based asset manager with a value orientation similar to our own. Its shares benefited from the meteoric rise in the Hong Kong and Shanghai markets in early May before cooling off with the bear market for Chinese stocks in June. We were pleased to see growth in its assets under management and improved performance and management fees, all of which helped its earnings. We trimmed our position before the correction. London-based Clarkson was the Fund’s biggest position at the end of June and second-largest contributor to performance in the first six months of 2015. An investment holding company whose subsidiaries provide integrated shipping services worldwide, its stock began to rise in February and did well through the remainder of 2015’s first half. Strong results for fiscal 2014, which were well ahead of market expectations, and a double-digit growth outlook helped drive performance. The company’s entrance into the FTSE 250 index on the London Stock Exchange in mid-April, a move which mandates that U.K. index funds invest in the stock, also played a part.
Top Contributors to Performance
Year-to-Date Through 6/30/15 (%)1 Value Partners Group 0.80 Clarkson 0.64 Relo Holdings 0.49 Pico Far East Holdings 0.41 Trancom 0.31 1 Includes dividends
Top Detractors from Performance
Year-to-Date Through 6/30/15 (%)2 Aixtron ADR -0.22 LPKF Laser & Electronics -0.20 New World Department Store China -0.19 Daphne International Holdings -0.19 RHJ International -0.19 2 Net of dividends
CURRENT POSITIONING AND OUTLOOK As the global economy continues to recover, we continue to look for opportunities in several sectors and regions. At the end of the semiannual period Global Value Trust had substantial overweights in Industrials and Materials while also having greater exposure than its benchmark to Consumer Discretionary and Financials. At the country level the portfolio had far less exposure to the U.S. while having significantly greater exposure to the U.K., Canada, France, Hong Kong, Switzerland, Germany, and Brazil.
10 | 2015 Semiannual Report to Stockholders
PERFORMANCE AND PORTFOLIO REVIEW SYMBOLS MARKET PRICE RGT NAV XRGTX
Performance Average Annual Total Return (%) Through 6/30/15 JAN-JUN 2015* 1-YR SINCE INCEPTION (10/17/13) RGT (NAV) 5.62 -6.18 1.04 *Not Annualized
The Morningstar Style Map is the Morningstar Style BoxTM with the center 75% of fund holdings plotted as the Morningstar Ownership ZoneTM. The Morningstar Style Box is designed to reveal a fund’s investment strategy. The Morningstar Ownership Zone provides detail about a portfolio’s investment style by showing the range of stock sizes and styles. The Ownership Zone is derived by plotting each stock in the portfolio within the proprietary Morningstar Style Box. Over time, the shape and location of a fund’s ownership zone may vary. See page 58 for additional information.
Top 10 Positions % of Net Assets Clarkson 2.0 Genworth MI Canada 2.0 Value Partners Group 1.6 CETIP - Mercados Organizados 1.5 Relo Holdings 1.4 Consort Medical 1.3 TGS-NOPEC Geophysical 1.3 New World Department Store China 1.2 Shimano 1.2 Ashmore Group 1.2
Portfolio Sector Breakdown % of Net Assets Industrials 25.9 Financials 23.0 Consumer Discretionary 17.1 Information Technology 13.5 Materials 11.6 Health Care 9.3 Energy 3.5 Consumer Staples 1.9 Outstanding Line of Credit, Net of Cash
and Cash Equivalents -5.8
Calendar Year Total Returns (%) YEAR RGT (NAV) 2014 -6.2
Portfolio Country Breakdown1,2 % of Net Assets United States 14.8 United Kingdom 13.4 Japan 11.9 Canada 10.1 France 8.7 Hong Kong 7.4 Switzerland 5.3 Germany 4.1 Brazil 3.6 1 Represents countries that are 3% or more of net assets. 2 Securities are categorized by the country of their headquarters.
Portfolio Diagnostics Fund Net Assets $101 million Number of Holdings 269 Turnover Rate 34% Net Asset Value $9.77 Market Price $8.31 Net Leverage1 6% Average Market Capitalization2 $1,330 million Weighted Average P/E Ratio3,4 18.6x Weighted Average P/B Ratio3 2.7x Holdings ≥ 75% of Total Investments 111 Active Share5 98% 1 Net leverage is the percentage, in excess of 100%, of the total value of equity type investments, divided by net assets. 2 Geometric 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. 3 Harmonic 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 or book value, as the case may be, of its underlying stocks. 4 The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (6% of portfolio holdings as of 6/30/15). 5 Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two.
Important Performance and Risk Information
All performance information reflects past performance, is presented on a total return basis, 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 most recent month-end may be obtained at www.roycefunds.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- and micro-cap companies, which may involve considerably more risk than investments in securities of 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 U.S. investments. Regarding the “Top Contributors” and “Top Detractors” tables shown on page 10, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to-date performance for 2015.
2015 Semiannual Report to Stockholders | 11
History Since Inception
The following table details the share accumulations by an initial investor in the Funds who reinvested all distributions and participated fully in primary subscriptions for each of the rights offerings. Full participation in distribution reinvestments and rights offerings can maximize the returns available to a long-term investor. This table should be read in conjunction with the Performance and Portfolio Reviews of the Funds.
HISTORY AMOUNT INVESTED PURCHASE PRICE1 SHARES NAV VALUE2 MARKET VALUE2 Royce Value Trust 11/26/86 Initial Purchase $ 10,000 $ 10.000 1,000 $ 9,280 $ 10,000 10/15/87 Distribution $0.30 7.000 42 12/31/87 Distribution $0.22 7.125 32 8,578 7,250 12/27/88 Distribution $0.51 8.625 63 10,529 9,238 9/22/89 Rights Offering 405 9.000 45 12/29/89 Distribution $0.52 9.125 67 12,942 11,866 9/24/90 Rights Offering 457 7.375 62 12/31/90 Distribution $0.32 8.000 52 11,713 11,074 9/23/91 Rights Offering 638 9.375 68 12/31/91 Distribution $0.61 10.625 82 17,919 15,697 9/25/92 Rights Offering 825 11.000 75 12/31/92 Distribution $0.90 12.500 114 21,999 20,874 9/27/93 Rights Offering 1,469 13.000 113 12/31/93 Distribution $1.15 13.000 160 26,603 25,428 10/28/94 Rights Offering 1,103 11.250 98 12/19/94 Distribution $1.05 11.375 191 27,939 24,905 11/3/95 Rights Offering 1,425 12.500 114 12/7/95 Distribution $1.29 12.125 253 35,676 31,243 12/6/96 Distribution $1.15 12.250 247 41,213 36,335 1997 Annual distribution total $1.21 15.374 230 52,556 46,814 1998 Annual distribution total $1.54 14.311 347 54,313 47,506 1999 Annual distribution total $1.37 12.616 391 60,653 50,239 2000 Annual distribution total $1.48 13.972 424 70,711 61,648 2001 Annual distribution total $1.49 15.072 437 81,478 73,994 2002 Annual distribution total $1.51 14.903 494 68,770 68,927 1/28/03 Rights Offering 5,600 10.770 520 2003 Annual distribution total $1.30 14.582 516 106,216 107,339 2004 Annual distribution total $1.55 17.604 568 128,955 139,094 2005 Annual distribution total $1.61 18.739 604 139,808 148,773 2006 Annual distribution total $1.78 19.696 693 167,063 179,945 2007 Annual distribution total $1.85 19.687 787 175,469 165,158 2008 Annual distribution total $1.723 12.307 1,294 95,415 85,435 3/11/09 Distribution $0.323 6.071 537 137,966 115,669 12/2/10 Distribution $0.03 13.850 23 179,730 156,203 2011 Annual distribution total $0.783 13.043 656 161,638 139,866 2012 Annual distribution total $0.80 13.063 714 186,540 162,556 2013 Annual distribution total $2.194 16.647 1,658 250,219 220,474 2014 Annual distribution total $1.82 14.840 1,757 252,175 222,516 2015 Year-to-Date distribution total $0.59 14.196 652 6/30/15 $ 21,922 16,180 $ 256,453 $ 223,122 1 The purchase price used for annual distribution totals is a weighted average of the distribution reinvestment prices for the year. 2 Values are stated as of December 31 of the year indicated, after reinvestment of distributions, other than for initial purchase. 3 Includes a return of capital. 4 Includes Royce Global Value Trust spin-off of $1.40 per share.
12 | 2015 Semiannual Report to Stockholders
HISTORY AMOUNT INVESTED PURCHASE PRICE1 SHARES NAV VALUE2 MARKET VALUE2 Royce Micro-Cap Trust 12/14/93 Initial Purchase $ 7,500 $ 7.500 1,000 $ 7,250 $ 7,500 10/28/94 Rights Offering 1,400 7.000 200 12/19/94 Distribution $0.05 6.750 9 9,163 8,462 12/7/95 Distribution $0.36 7.500 58 11,264 10,136 12/6/96 Distribution $0.80 7.625 133 13,132 11,550 12/5/97 Distribution $1.00 10.000 140 16,694 15,593 12/7/98 Distribution $0.29 8.625 52 16,016 14,129 12/6/99 Distribution $0.27 8.781 49 18,051 14,769 12/6/00 Distribution $1.72 8.469 333 20,016 17,026 12/6/01 Distribution $0.57 9.880 114 24,701 21,924 2002 Annual distribution total $0.80 9.518 180 21,297 19,142 2003 Annual distribution total $0.92 10.004 217 33,125 31,311 2004 Annual distribution total $1.33 13.350 257 39,320 41,788 2005 Annual distribution total $1.85 13.848 383 41,969 45,500 2006 Annual distribution total $1.55 14.246 354 51,385 57,647 2007 Annual distribution total $1.35 13.584 357 51,709 45,802 2008 Annual distribution total $1.193 8.237 578 28,205 24,807 3/11/09 Distribution $0.223 4.260 228 41,314 34,212 12/2/10 Distribution $0.08 9.400 40 53,094 45,884 2011 Annual distribution total $0.533 8.773 289 49,014 43,596 2012 Annual distribution total $0.51 9.084 285 57,501 49,669 2013 Annual distribution total $1.38 11.864 630 83,110 74,222 2014 Annual distribution total $2.90 10.513 1,704 86,071 76,507 2015 Year-to-Date distribution total $0.45 9.597 360 6/30/15 $ 8,900 7,950 $ 85,622 $ 73,299 Royce Global Value Trust 10/17/13 Initial Purchase $ 8,975 $ 8.975 1,000 $ 9,780 $ 8,975 12/11/14 Distribution $0.15 7.970 19 9,426 8,193 6/30/15 $ 8,975 1,019 $ 9,956 $ 8,468
1 The purchase price used for annual distribution totals is a weighted average of the distribution reinvestment prices for the year. 2 Values are stated as of December 31 of the year indicated, after reinvestment of distributions, other than for initial purchase. 3 Includes a return of capital.
2015 Semiannual Report to Stockholders | 13
Distribution Reinvestment and Cash Purchase Options
Why should I reinvest my distributions?
By reinvesting distributions, a stockholder can maintain an undiluted investment in the Fund. The regular reinvestment of distributions has a significant impact on stockholder returns. In contrast, the stockholder who takes distributions in cash is penalized when shares are issued below net asset value to other stockholders.
How does the reinvestment of distributions from the Royce closed-end funds work?
The Funds automatically issue shares in payment of distributions unless you indicate otherwise. The shares are generally issued at the lower of the market price or net asset value on the valuation date.
How does this apply to registered stockholders?
If your shares are registered directly with a Fund, your distributions are automatically reinvested unless you have otherwise instructed the Funds’ transfer agent, Computershare, in writing, in which case you will receive your distribution in cash. A registered stockholder also may have the option to receive the distribution in the form of a stock certificate.
What if my shares are held by a brokerage firm or a bank?
If your shares are held by a brokerage firm, bank, or other intermediary as the stockholder of record, you should contact your brokerage firm or bank to be certain that it is automatically reinvesting distributions on your behalf. If they are unable to reinvest distributions on behalf, you should have your shares registered in your name in order to participate.
What other features are available for registered stockholders?
The Distribution Reinvestment and Cash Purchase Plans also allow registered stockholders to make optional cash purchases of shares of a Fund’s common stock directly through Computershare on a monthly basis, and to deposit certificates representing your RVT and RMT shares with Computershare for safekeeping. (RGT does not issue shares in certificated form). Plan participants are subject to a $0.75 service fee for each voluntary cash purchase under the Plans. The Funds’ investment adviser absorbed all commissions on optional cash purchases under the Plans through December 31, 2014.
How do the Plans work for registered stockholders?
Computershare maintains the accounts for registered stockholders in the Plans and sends written confirmation of all transactions in the account. Shares in the account of each participant will be held by Computershare in non-certificated form in the name of the participant, and each participant will be able to vote those shares at a stockholder meeting or by proxy. A participant may also send stock certificates for RVT and RMT held by them to Computershare to be held in non-certificated form. RGT does not issue shares in certificated form. There is no service fee charged to participants for reinvesting distributions. If a participant elects to sell shares from a Plan account, Computershare will deduct a $2.50 service fee from the sale transaction. The Funds’ investment adviser absorbed all commissions on optional sales under the Plans through December 31, 2014. If a nominee is the registered owner of your shares, the nominee will maintain the accounts on your behalf.
How can I get more information on the Plans?
You can call an Investor Services Representative at (800) 221-4268 or you can request a copy of the Plan for your Fund from Computershare. All correspondence (including notifications) should be directed to: [Name of Fund] Distribution Reinvestment and Cash Purchase Plan, c/o Computershare, PO Box 43078, Providence, RI 02940-3078, telephone (800) 426-5523 (from 9:00 A.M. to 5:00 P.M.).
14 | 2015 Semiannual Report to Stockholders
Royce Value Trust June 30, 2015 (unaudited)
Schedule of Investments Common Stocks – 98.8% SHARES VALUE CONSUMER DISCRETIONARY – 12.4% AUTO COMPONENTS - 1.2%Drew Industries
93,736 $ 5,438,563Fuel Systems Solutions 1
107,000 800,360Gentex Corporation
223,050 3,662,481Global & Yuasa Battery
28,500 977,296Motorcar Parts of America 1
7,990 240,419MRF
800 429,585Selamat Sempurna
1,816,700 628,845Standard Motor Products
50,391 1,769,732Superior Industries International
21,600 395,496 14,342,777 AUTOMOBILES - 1.1%Thor Industries 2
153,460 8,636,729Winnebago Industries
211,400 4,986,926 13,623,655 DISTRIBUTORS - 0.8%Core-Mark Holding Company
115,200 6,825,600Weyco Group
97,992 2,922,121 9,747,721 DIVERSIFIED CONSUMER SERVICES - 1.2%American Public Education 1
36,100 928,492Collectors Universe
50,400 1,004,976Lincoln Educational Services 1
712,300 1,438,846Regis Corporation 1, 2, 3
233,800 3,684,688Sotheby’s
138,200 6,252,168Universal Technical Institute
130,432 1,121,715 14,430,885 HOTELS, RESTAURANTS & LEISURE - 0.3%Biglari Holdings 1
700 289,625Century Casinos 1
209,600 1,320,480Monarch Casino & Resort 1
28,103 577,798MTY Food Group
48,400 1,283,433Thomas Cook (India)
100,000 350,581Tropicana Entertainment 1, 4
10,000 157,600 3,979,517 HOUSEHOLD DURABLES - 2.4%Ethan Allen Interiors
320,800 8,449,872Flexsteel Industries
23,700 1,021,233Forbo Holding
110 130,831Harman International Industries
28,600 3,401,684Lifetime Brands
53,726 793,533Mohawk Industries 1, 2
28,000 5,345,200Natuzzi ADR 1
2,096,300 4,402,230NVR 1
2,340 3,135,600Stanley Furniture 1, 5
1,012,235 3,006,338 29,686,521 INTERNET & CATALOG RETAIL - 0.2%Blue Nile 1
67,100 2,039,169Manutan International
4,200 199,609 2,238,778 LEISURE PRODUCTS - 1.3%Beneteau
20,800 354,326LeapFrog Enterprises Cl. A 1
348,100 487,340Nautilus 1
667,100 14,349,321Shimano
3,500 477,591Smith & Wesson Holding Corporation 1
30,600 507,654 16,176,232 MEDIA - 1.4%E.W. Scripps Company Cl. A
76,640 1,751,224Harte-Hanks
166,730 993,711McClatchy Company (The) Cl. A 1
334,200 360,936Morningstar
84,600 6,729,930Pico Far East Holdings
3,484,400 1,114,785Rentrak Corporation 1
17,400 1,214,520RLJ Entertainment 1
35,600 14,026T4F Entretenimento 1
143,800 168,817Technicolor
30,000 195,656Television Broadcasts
173,400 1,027,889Wiley (John) & Sons Cl. A
62,440 3,394,863 16,966,357 MULTILINE RETAIL - 0.1%New World Department Store China
2,947,500 790,913Parkson Retail Asia
345,800 121,955 912,868 SPECIALTY RETAIL - 1.2%Aeropostale 1
110,000 178,200Buckle (The) 2
110,965 5,078,868Destination Maternity
42,200 492,052Genesco 1
62,935 4,155,598I.T
1,127,000 424,539Lewis Group
75,000 607,780Oriental Watch Holdings
543,000 92,467Signet Jewelers
1,900 243,656Systemax 1
194,000 1,676,160TravelCenters of America LLC 1
62,500 928,125West Marine 1
131,100 1,263,804 15,141,249 TEXTILES, APPAREL & LUXURY GOODS - 1.2%Asia Brands
59,900 28,418Crown Crafts
139,141 1,113,128Culp
48,400 1,500,400Daphne International Holdings
662,800 165,880Grendene
100,000 538,098J.G. Boswell Company 4
2,492 1,756,860Kewal Kiran Clothing
1,482 49,361Movado Group
122,651 3,331,201Pacific Textiles Holdings
285,500 456,709Stella International Holdings
155,700 371,597Van de Velde
11,700 672,144Wolverine World Wide 2
123,500 3,517,280YGM Trading
1,082,600 1,399,417 14,900,493 Total (Cost $124,747,109) 152,147,053 CONSUMER STAPLES – 2.5% BEVERAGES - 0.2%Compania Cervecerias Unidas ADR
134,000 2,838,120Crimson Wine Group 1, 4
11,876 111,041 2,949,161 FOOD PRODUCTS - 1.9%Alico
27,000 1,224,720Binggrae
14,000 1,060,559Cal-Maine Foods
78,436 4,094,359Farmer Bros. 1
57,300 1,346,550Industrias Bachoco ADR
36,045 1,950,395Sanderson Farms
7,500 563,700Seneca Foods Cl. A 1
229,255 6,366,411
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 15
Royce Value Trust
Schedule of Investments (continued) SHARES VALUE CONSUMER STAPLES (continued) FOOD PRODUCTS (continued)Seneca Foods Cl. B 1
13,840 $ 411,878SunOpta 1
116,100 1,245,753Tootsie Roll Industries 2
127,859 4,131,124Waterloo Investment Holdings 1, 6
598,676 227,497 22,622,946 PERSONAL PRODUCTS - 0.4%Nu Skin Enterprises Cl. A 2, 3
99,460 4,687,550 Total (Cost $26,210,495) 30,259,657 ENERGY – 2.8% ENERGY EQUIPMENT & SERVICES - 2.5%CARBO Ceramics 2, 3
63,000 2,622,690Ensign Energy Services
134,000 1,313,178Gulf Island Fabrication
32,964 368,208Helmerich & Payne
42,780 3,012,568ION Geophysical 1
1,078,200 1,153,674Oil States International 1
30,733 1,144,190Pason Systems
351,560 6,290,925SEACOR Holdings 1
131,042 9,296,119TGS-NOPEC Geophysical
78,060 1,822,955Tidewater 2
24,000 545,520Unit Corporation 1
112,330 3,046,390 30,616,417 OIL, GAS & CONSUMABLE FUELS - 0.3%Green Plains
28,000 771,400Permian Basin Royalty Trust
161,000 1,297,660World Fuel Services
16,600 795,970WPX Energy 1
110,000 1,350,800 4,215,830 Total (Cost $44,917,420) 34,832,247 FINANCIALS – 17.1% BANKS - 1.5%Bank of N.T. Butterfield & Son
1,784,161 2,908,183BCB Holdings 1
209,426 27,970Blue Hills Bancorp 1
104,180 1,458,520Farmers & Merchants Bank of Long Beach 4
1,200 7,176,000Fauquier Bankshares
160,800 2,555,112First Citizens BancShares Cl. A
17,026 4,478,519 18,604,304 CAPITAL MARKETS - 8.5%AllianceBernstein Holding L.P.
102,000 3,012,060Ares Management L.P.
101,600 1,879,600Artisan Partners Asset Management Cl. A
134,210 6,235,396ASA Gold and Precious Metals
324,821 3,154,012Ashmore Group
649,800 2,952,727Azimut Holding
8,000 234,029BHF Kleinwort Benson Group 1
293,500 1,436,445CETIP - Mercados Organizados
485,700 5,323,938Citadel Capital 1
11,799,921 3,077,548†Citadel Capital (Rights) 1, 6
2,507,483 0Cowen Group 1
421,158 2,695,411Dundee Corporation Cl. A 1
329,800 3,311,202Eaton Vance 2, 3
40,500 1,584,765Edmond de Rothschild (Suisse)
133 2,745,494Federated Investors Cl. B
299,420 10,027,576GAMCO Investors Cl. A
20,200 1,387,942GCA Savvian
24,000 298,076Jupiter Fund Management
230,000 1,610,704Lazard Cl. A
79,695 4,482,047Medley Management Cl. A
152,200 1,802,048mutares
330 37,894MVC Capital
324,200 3,306,840Newtek Business Services
89,800 1,591,256Paris Orleans
196,893 6,289,947Partners Group Holding
1,075 321,367RCS Capital Cl. A 1
66,100 506,326SEI Investments
226,135 11,087,399Sprott
590,000 1,166,773U.S. Global Investors Cl. A
661,751 1,839,668Value Partners Group
5,428,000 8,571,024Virtus Investment Partners
26,240 3,470,240VZ Holding
1,300 312,851Westwood Holdings Group
54,573 3,250,914ZAIS Group Holdings Cl. A 1
492,300 5,366,070 104,369,589 CONSUMER FINANCE - 0.2%EZCORP Cl. A 1
213,000 1,582,590Shriram City Union Finance
12,500 350,188 1,932,778 DIVERSIFIED FINANCIAL SERVICES - 1.5%Bajaj Holdings & Investment
15,600 356,928Banca Finnat Euramerica
1,060,000 575,508First Pacific
1,020,000 859,260MarketAxess Holdings
100,000 9,277,000PICO Holdings 1
100,400 1,477,888Sofina
19,698 2,198,227TMX Group
91,000 3,872,418 18,617,229 INSURANCE - 2.1%Alleghany Corporation 1
4,179 1,958,948Atlas Financial Holdings 1
9,500 188,385E-L Financial
16,500 8,661,575Erie Indemnity Cl. A
25,000 2,051,750Greenlight Capital Re Cl. A 1
230,561 6,725,465Independence Holding Company
349,423 4,608,889Lancashire Holdings
50,000 484,338MBIA 1
19,400 116,594ProAssurance Corporation
17,139 791,993†WMIH 1, 4
77,742 202,129 25,790,066 INVESTMENT COMPANIES - 0.3%RIT Capital Partners
149,000 3,621,778 REAL ESTATE MANAGEMENT & DEVELOPMENT - 2.1%AV Homes 1
55,500 797,535E-House (China) Holdings ADR 2, 3
108,765 730,901Forestar Group 1
102,000 1,342,320FRP Holdings 1
212,958 6,906,228Hopefluent Group Holdings
680,000 230,715Kennedy Wilson Europe Real Estate
24,000 428,386Kennedy-Wilson Holdings
101,300 2,490,967Midland Holdings 1
700,000 316,969St. Joe Company (The) 1, 2
177,000 2,748,810Sun Frontier Fudousan
17,600 142,658Tejon Ranch 1
342,600 8,808,246
16 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
June 30, 2015 (unaudited)
Schedule of Investments (continued) SHARES VALUE FINANCIALS (continued) REAL ESTATE MANAGEMENT & DEVELOPMENT (continued)Tejon Ranch (Warrants) 1
96,561 $ 43,452 24,987,187 THRIFTS & MORTGAGE FINANCE - 0.9%Genworth MI Canada
251,903 6,615,227Timberland Bancorp 5
444,200 4,450,884Vestin Realty Mortgage II 1
53,557 208,337 11,274,448 Total (Cost $189,071,119) 209,197,379 HEALTH CARE – 5.0% BIOTECHNOLOGY - 0.5%Aquinox Pharmaceuticals 1
65,232 452,710ARIAD Pharmaceuticals 1, 2
140,000 1,157,800Cancer Genetics 1
56,900 669,144Celsion Corporation 1
97,604 229,370Genomic Health 1
33,000 917,070Green Cross
3,100 712,851Myriad Genetics 1, 2, 3
18,993 645,572Zealand Pharma 1
102,000 1,684,275 6,468,792 HEALTH CARE EQUIPMENT & SUPPLIES - 2.2%Analogic Corporation
38,135 3,008,851Atrion Corporation 2, 3
17,079 6,700,262bioMerieux
4,000 425,694Cerus Corporation 1
198,000 1,027,620CONMED Corporation
81,500 4,749,005Derma Sciences 1
87,142 623,937DiaSorin
7,000 319,572IDEXX Laboratories 1, 2, 3
114,822 7,364,683Invacare Corporation
38,900 841,407Meridian Bioscience
39,600 738,144Synergetics USA 1, 2
53,665 252,226Trinity Biotech ADR Cl. A
66,100 1,193,766 27,245,167 HEALTH CARE PROVIDERS & SERVICES - 0.4%Aceto Corporation
39,015 960,939Addus HomeCare 1
49,000 1,365,140Landauer
50,000 1,782,000Psychemedics Corporation
39,600 587,268 4,695,347 HEALTH CARE TECHNOLOGY - 0.2%Medidata Solutions 1
40,000 2,172,800 LIFE SCIENCES TOOLS & SERVICES - 1.1%Bio-Rad Laboratories Cl. A 1
23,828 3,588,735Bio-Techne
39,993 3,938,111PAREXEL International 1
56,600 3,639,946PerkinElmer
39,000 2,052,960 13,219,752 PHARMACEUTICALS - 0.6%Boiron
4,200 412,048Lannett Company 1
21,140 1,256,562Lipocine 1
144,333 1,238,377Medicines Company (The) 1
58,000 1,659,380Repros Therapeutics 1
62,000 443,300Santen Pharmaceutical
52,000 736,332Stallergenes
8,000 488,304Theravance Biopharma 1
63,291 824,049Vetoquinol
10,400 431,313 7,489,665 Total (Cost $37,598,792) 61,291,523 INDUSTRIALS – 28.4% AEROSPACE & DEFENSE - 2.0%Ducommun 1
117,200 3,008,524HEICO Corporation
155,938 9,091,186HEICO Corporation Cl. A
80,808 4,102,622Hexcel Corporation
47,500 2,362,650Magellan Aerospace
124,800 1,704,634Moog Cl. A 1
25,000 1,767,000Teledyne Technologies 1
20,600 2,173,506 24,210,122 AIR FREIGHT & LOGISTICS - 2.6%Expeditors International of Washington
158,900 7,326,085Forward Air
209,750 10,961,535Frontier Services Group 1
2,301,714 968,011Hub Group Cl. A 1, 2, 3
149,400 6,026,796UTi Worldwide 1
635,400 6,347,646 31,630,073 BUILDING PRODUCTS - 0.7%American Woodmark 1
117,135 6,424,855Burnham Holdings Cl. B 4
36,000 665,280Patrick Industries 1
18,450 702,022Polypipe Group
121,000 516,179 8,308,336 COMMERCIAL SERVICES & SUPPLIES - 2.8%Atento 1
76,600 1,101,508Brady Corporation Cl. A
45,900 1,135,566CompX International Cl. A
211,100 2,406,540Copart 1
178,360 6,328,213Heritage-Crystal Clean 1
102,527 1,507,147InnerWorkings 1
114,000 760,380Intersections 1
178,500 547,995Kaba Holding
600 357,131Kimball International Cl. B
286,180 3,479,949Latchways
35,000 431,701Ritchie Bros. Auctioneers
484,494 13,527,072Societe BIC
1,500 239,135Steelcase Cl. A
109,950 2,079,155 33,901,492 CONSTRUCTION & ENGINEERING - 2.4%EMCOR Group 2, 3
149,400 7,136,838Integrated Electrical Services 1
677,482 4,810,122Jacobs Engineering Group 1, 2, 3
164,900 6,698,238KBR
421,192 8,204,820Northwest Pipe 1
38,000 774,060Sterling Construction 1
326,671 1,306,684 28,930,762 ELECTRICAL EQUIPMENT - 1.2%EnerSys
5,100 358,479Franklin Electric
209,200 6,763,436Global Power Equipment Group
159,519 1,237,868Powell Industries
94,500 3,323,565Preformed Line Products
91,600 3,455,152 15,138,500
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 17
Royce Value Trust
Schedule of Investments (continued) SHARES VALUE INDUSTRIALS (continued) INDUSTRIAL CONGLOMERATES - 0.5%A. Soriano
2,791,000 $ 427,099Carlisle Companies 2, 3
21,595 2,162,092Raven Industries
197,125 4,007,551 6,596,742 MACHINERY - 10.5%Astec Industries
20,000 836,400Burckhardt Compression Holding
8,400 3,182,737Chen Hsong Holdings
1,159,000 343,893China Metal International Holdings
249,000 80,628CIRCOR International
89,962 4,905,628CLARCOR
92,500 5,757,200Columbus McKinnon
104,885 2,622,125Deutz
115,000 658,988Donaldson Company
193,559 6,929,412Federal Signal
98,640 1,470,722Graco
104,776 7,442,239Graham Corporation
20,568 421,438Hurco Companies
25,952 898,458Hyster-Yale Materials Handling Cl. A
15,485 1,072,801IDEX Corporation
67,400 5,296,292John Bean Technologies
175,536 6,598,398Kennametal
198,160 6,761,219Lincoln Electric Holdings
46,360 2,822,860Lindsay Corporation 2, 3
36,000 3,164,760Lydall 1
65,220 1,927,903Mincon Group
384,100 297,232Mueller Water Products Cl. A
33,600 305,760NN
308,700 7,878,024Nordson Corporation
24,296 1,892,416Pfeiffer Vacuum Technology
14,000 1,247,383PMFG 1
378,352 2,432,803Rational
1,000 367,287RBC Bearings 1
121,800 8,740,368Rotork
100,000 365,473Semperit AG Holding
12,940 533,768Spirax-Sarco Engineering
7,600 405,175Sun Hydraulics
71,018 2,706,496Tecumseh Products 1
46,700 115,349Tennant Company
78,900 5,155,326Valmont Industries 2
67,235 7,992,225Wabash National 1
40,400 506,616WABCO Holdings 1
43,400 5,369,448Wabtec Corporation
82,840 7,806,842Woodward
208,400 11,459,916 128,772,008 MARINE - 0.6%Clarkson
164,671 7,081,694 PROFESSIONAL SERVICES - 3.6%Acacia Research
61,100 535,847Advisory Board (The) 1, 2, 3
150,277 8,215,644Franklin Covey 1
69,700 1,414,213Heidrick & Struggles International
88,080 2,297,126ICF International 1
30,546 1,064,833ManpowerGroup
83,858 7,495,228On Assignment 1
334,995 13,158,604Robert Half International
14,812 822,066Towers Watson & Co. Cl. A
65,300 8,214,740Volt Information Sciences 1
49,000 475,790 43,694,091 ROAD & RAIL - 0.8%Genesee & Wyoming Cl. A 1
20,000 1,523,600Landstar System
99,400 6,646,878Trancom
8,000 437,309Universal Truckload Services
78,916 1,732,995 10,340,782 TRADING COMPANIES & DISTRIBUTORS - 0.5%Kloeckner & Co
31,300 282,473MISUMI Group
27,000 383,429MSC Industrial Direct Cl. A 2
84,023 5,862,285 6,528,187 TRANSPORTATION INFRASTRUCTURE - 0.2%Hopewell Highway Infrastructure
1,012,000 497,413Touax
40,040 662,883Wesco Aircraft Holdings 1
68,400 1,036,260 2,196,556 Total (Cost $214,361,387) 347,329,345 INFORMATION TECHNOLOGY – 19.7% COMMUNICATIONS EQUIPMENT - 0.5%ADTRAN
234,973 3,818,311Alliance Fiber Optic Products
42,900 795,795Bel Fuse Cl. B
30,238 620,484EVS Broadcast Equipment
7,800 226,092Extreme Networks 1
212,000 570,280 6,030,962 ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 9.4%Agilysys 1
165,125 1,515,847Anixter International 1, 2
70,895 4,618,809Benchmark Electronics 1
156,900 3,417,282Cognex Corporation
69,800 3,357,380Coherent 1
156,006 9,903,261Dolby Laboratories Cl. A
93,410 3,706,509DTS 1
245,000 7,470,050FARO Technologies 1
90,000 4,203,000FEI Company
82,100 6,808,553FLIR Systems
262,600 8,093,332HollySys Automation Technologies
35,582 855,035IPG Photonics 1, 2, 3
58,760 5,004,883Kimball Electronics 1
214,635 3,131,525LRAD Corporation 1
548,244 1,091,005Mercury Systems 1
38,200 559,248MTS Systems
5,200 358,540National Instruments
251,850 7,419,501Newport Corporation 1
541,000 10,257,360Oxford Instruments
4,200 64,046PC Connection
16,301 403,287Perceptron 1
357,700 3,777,312Plexus Corporation 1
176,100 7,727,268Richardson Electronics
573,732 4,635,755Rofin-Sinar Technologies 1
257,501 7,107,028Rogers Corporation 1
57,066 3,774,345TTM Technologies 1, 2, 3
496,400 4,959,036Vishay Precision Group 1
74,826 1,126,880 115,346,077
18 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
June 30, 2015 (unaudited)
Schedule of Investments (continued) SHARES VALUE INFORMATION TECHNOLOGY (continued) INTERNET SOFTWARE & SERVICES - 1.4%Care.com 1
369,400 $ 2,186,848j2 Global
32,870 2,233,188QuinStreet 1
463,732 2,991,071RealNetworks 1
376,750 2,038,217Spark Networks 1, 2
346,700 1,064,369Stamps.com 1
34,400 2,530,808Support.com 1
1,599,399 2,255,153Tomorrow Focus 1
44,900 217,496United Online 1
102,371 1,604,154 17,121,304 IT SERVICES - 2.7%Computer Task Group
155,300 1,198,916Convergys Corporation
121,000 3,084,290eClerx Services
13,500 317,572Hackett Group (The)
1,039,366 13,958,685Hexaware Technologies
75,000 300,330Innodata 1
314,314 826,646MAXIMUS
107,500 7,065,975MoneyGram International 1
75,000 689,250Persistent Systems
35,000 329,362Prodware 1
20,100 137,588Sykes Enterprises 1
142,734 3,461,299Unisys Corporation 1
94,000 1,879,060 33,248,973 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.5%Amtech Systems 1
105,371 1,094,805Brooks Automation
101,900 1,166,755Cascade Microtech 1
44,300 674,467Diodes 1
270,850 6,530,193Exar Corporation 1
157,576 1,541,093Integrated Silicon Solution
14,715 325,790Intermolecular 1
185,448 365,333Kopin Corporation 1
242,200 835,590Kulicke & Soffa Industries 1
63,800 747,098MKS Instruments
187,490 7,113,371MoSys 1, 2, 3
337,000 640,300Nanometrics 1
145,440 2,344,493Photronics 1
131,400 1,249,614Teradyne
130,000 2,507,700Ultra Clean Holdings 1
113,000 703,990Veeco Instruments 1, 2, 3
91,760 2,637,182 30,477,774 SOFTWARE - 2.1%American Software Cl. A
88,490 840,655ANSYS 1, 2, 3
95,000 8,667,800AVEVA Group
11,200 318,172Blackbaud
31,400 1,788,230Computer Modelling Group
192,000 1,946,133Cyient
39,000 349,732Envivio 1
262,532 498,811ePlus 1
12,700 973,455Mentor Graphics
92,083 2,433,754Model N 1
104,000 1,238,640Monotype Imaging Holdings
137,320 3,310,785PSI 1
52,500 605,781SeaChange International 1
228,369 1,600,867SimCorp
9,300 370,366Totvs
50,000 627,191 25,570,372 TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.1%Avid Technology 1
37,700 502,918BlackBerry 1, 2
10,000 81,800Diebold 2, 3
266,600 9,331,000Intevac 1
114,000 666,900Kortek
99,000 1,366,802Silicon Graphics International 1
141,410 914,923 12,864,343 Total (Cost $184,727,597) 240,659,805 MATERIALS – 7.3% CHEMICALS - 2.1%C. Uyemura & Co.
5,800 311,836Chase Corporation
11,497 457,006FutureFuel Corporation
51,500 662,805Hawkins
86,178 3,480,729Innospec
57,178 2,575,297KMG Chemicals
44,000 1,119,360Minerals Technologies
94,843 6,461,654Quaker Chemical
109,669 9,742,994Umicore
6,000 284,487Victrex
8,000 242,601 25,338,769 CONSTRUCTION MATERIALS - 0.9%Ash Grove Cement Cl. B 4
50,518 10,154,118Mardin Cimento Sanayii
255,200 402,782 10,556,900 CONTAINERS & PACKAGING - 0.7%Greif Cl. A
106,344 3,812,433Mayr-Melnhof Karton
32,000 3,615,680UFP Technologies 1
59,609 1,247,020 8,675,133 METALS & MINING - 3.5%AuRico Gold
132,000 374,880Central Steel & Wire 4
4,862 3,014,440Exeter Resource 1
475,000 229,188Franco-Nevada Corporation
118,000 5,622,700Fresnillo
20,000 218,089Gold Fields ADR
865,000 2,793,950Haynes International
23,000 1,134,360Hecla Mining
660,000 1,735,800IAMGOLD Corporation 1
510,000 1,020,000Imdex 1
741,766 171,693Kirkland Lake Gold 1
90,000 405,685Lundin Mining 1
640,000 2,628,663Major Drilling Group International
491,323 2,458,582Pan American Silver
130,430 1,120,394Pretium Resources 1
246,000 1,331,433Reliance Steel & Aluminum
168,130 10,168,502Seabridge Gold 1, 2
282,000 1,723,020Synalloy Corporation
178,800 2,449,560Victoria Gold 1
550,000 61,649Vista Gold 1
124,000 40,920Worthington Industries
148,000 4,448,880 43,152,388
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 19
Royce Value Trust June 30, 2015 (unaudited)
Schedule of Investments (continued) SHARES VALUE MATERIALS (continued) PAPER & FOREST PRODUCTS - 0.1%Schweitzer-Mauduit International
22,198 $ 885,256TFS Corporation
246,700 305,498 1,190,754 Total (Cost $80,095,702) 88,913,944 TELECOMMUNICATION SERVICES – 0.5% WIRELESS TELECOMMUNICATION SERVICES - 0.5%Spok Holdings
18,595 313,140Telephone and Data Systems
208,270 6,123,138 Total (Cost $5,721,184) 6,436,278 UTILITIES – 0.1% GAS UTILITIES - 0.1%Shizuoka Gas
110,000 768,476Toho Gas
60,000 355,436 1,123,912 MULTI-UTILITIES - 0.0%Just Energy Group 2
20,600 107,326 Total (Cost $1,234,656) 1,231,238 MISCELLANEOUS 7 – 3.0% Total (Cost $34,748,812) 37,321,928 TOTAL COMMON STOCKS (Cost $943,434,273) 1,209,620,397 REPURCHASE AGREEMENT – 7.3% Fixed Income Clearing Corporation, 0.00% dated 6/30/15, due 7/1/15, maturity value $89,420,000
(collateralized by obligations of various U.S. Government Agencies, 2.125% due 1/31/21,
valued at $91,208,579) (Cost $89,420,000) 89,420,000 TOTAL INVESTMENTS – 106.1% (Cost $1,032,854,273) 1,299,040,397 LIABILITIES LESS CASH AND OTHER ASSETS – (6.1)% (74,840,748) NET ASSETS – 100.0% $ 1,224,199,649
† New additions in 2015. 1 Non-income producing. 2All or a portion of these securities were pledged as collateral in connection with the revolving credit agreement at June 30, 2015. Total market value of pledged securities at June 30, 2015, was $110,779,080.3At June 30, 2015, a portion of these securities were rehypothecated in connection with the Fund’s revolving credit agreement in the aggregate amount of $65,665,298.4These securities are defined as Level 2 securities due to fair value being based on quoted prices for similar securities. See Notes to Financial Statements.5At June 30, 2015, the Fund owned 5% or more of the Company’s outstanding voting securities thereby making the Company an Affiliated Company as that term is defined in the Investment Company Act of 1940. See Notes to Financial Statements.6Securities for which market quotations are not readily available represent 0.0% of net assets. These securities have been valued at their fair value under procedures approved by the Fund’s Board of Directors. These securities are defined as Level 3 securities due to the use of significant unobservable inputs in the determination of fair value. See Notes to Financial Statements.7Includes securities first acquired in 2015 and less than 1% of net assets.Bold indicates the Fund’s 20 largest equity holdings in terms of June 30, 2015, market value.TAX INFORMATION: The cost of total investments for Federal income tax purposes was $1,033,991,063. At June 30, 2015, net unrealized appreciation for all securities was $265,049,334, consisting of aggregate gross unrealized appreciation of $347,502,881 and aggregate gross unrealized depreciation of $82,453,547. The primary difference between book and tax basis cost is the timing of the recognition of losses on securities sold.
20 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Royce Value Trust June 30, 2015 (unaudited)
Statement of Assets and Liabilities ASSETS: Investments at valueNon-Affiliated Companies (cost $935,250,548)
$ 1,202,163,175Affiliated Companies (cost $8,183,725)
7,457,222 Total investments at value 1,209,620,397 Repurchase agreements (at cost and value) 89,420,000 Cash and foreign currency 7,975 Receivable for investments sold 2,214,780 Receivable for dividends and interest 931,282 Prepaid expenses and other assets 548,484 Total Assets 1,302,742,918 LIABILITIES: Revolving credit agreement 70,000,000 Payable for investments purchased 7,733,832 Payable for investment advisory fee 491,871 Payable for directors’ fees 46,197 Payable for interest expense 4,801 Accrued expenses 209,864 Deferred capital gains tax 56,704 Total Liabilities 78,543,269 Net Assets $ 1,224,199,649 ANALYSIS OF NET ASSETS: Paid-in capital - $0.001 par value per share; 77,251,036 shares outstanding (150,000,000 shares authorized) $ 907,619,001 Undistributed net investment income (loss) 7,493,931 Accumulated net realized gain (loss) on investments and foreign currency 87,943,951 Net unrealized appreciation (depreciation) on investments and foreign currency 266,107,071 Quarterly distributions (44,964,305 ) Net Assets (net asset value per share - $15.85) $ 1,224,199,649 Investments at identified cost $ 943,434,273
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 21
Royce Value Trust Six Months Ended June 30, 2015 (unaudited)
Statement of Operations INVESTMENT INCOME: INCOME: DividendsNon-Affiliated Companies
$ 9,042,544Affiliated Companies
53,304 Foreign withholding tax (227,460 ) Interest 44,437 Rehypothecation income 265,265 Securities lending 668 Total income 9,178,758 EXPENSES: Investment advisory fees 2,927,659 Interest expense 429,480 Stockholder reports 211,103 Custody and transfer agent fees 131,224 Administrative and office facilities 84,173 Directors’ fees 79,029 Professional fees 41,766 Other expenses 66,709 Total expenses 3,971,143 Compensating balance credits (13 ) Net expenses 3,971,130 Net investment income (loss) 5,207,628 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: NET REALIZED GAIN (LOSS): Investments 42,709,081 Foreign currency transactions (17,114 ) NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): Investments and foreign currency translations (30,510,696 ) Other assets and liabilities denominated in foreign currency 180,895 Net realized and unrealized gain (loss) on investments and foreign currency 12,362,166 NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS $ 17,569,794
22 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Royce Value Trust
Statement of Changes in Net Assets SIX MONTHS ENDED
6/30/15
(UNAUDITED) YEAR ENDED 12/31/14 INVESTMENT OPERATIONS: Net investment income (loss) $ 5,207,628 $ 9,123,977 Net realized gain (loss) on investments and foreign currency 42,691,967 130,855,526 Net change in unrealized appreciation (depreciation) on investments and foreign currency (30,329,801 ) (140,388,974 ) Net increase (decrease) in net assets from investment operations 17,569,794 (409,471 ) DISTRIBUTIONS: Net investment income – (10,008,114 ) Net realized gain on investments and foreign currency – (123,263,927 ) Quarterly distributions 1 (44,964,305 ) – Total distributions (44,964,305 ) (133,272,041 ) CAPITAL STOCK TRANSACTIONS: Reinvestment of distributions 19,639,522 57,806,861 Total capital stock transactions 19,639,522 57,806,861 Net Increase (Decrease) In Net Assets (7,754,989 ) (75,874,651 ) NET ASSETS: Beginning of period 1,231,954,638 1,307,829,289 End of period (including undistributed net investment income (loss) of $7,493,931 at 6/30/15 and $2,286,303 at 12/31/14) $ 1,224,199,649 $ 1,231,954,638
1 To be allocated to net investment income, net realized gains and/or return of capital at year end.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 23
Royce Value Trust Six Months Ended June 30, 2015 (unaudited)
Statement of Cash Flows CASH FLOWS FROM OPERATING ACTIVITIES: Net increase (decrease) in net assets from investment operations $ 17,569,794 Adjustments to reconcile net increase (decrease) in net assets from investment operations to net cash provided by operating activities:Purchases of long-term investments
(202,375,047 )Proceeds from sales and maturities of long-term investments
282,196,062Net purchases, sales and maturities of short-term investments
(59,865,000 )Net (increase) decrease in dividends and interest receivable and other assets
58,603Net increase (decrease) in interest expense payable, accrued expenses and other liabilities
(196,204 )Net change in unrealized appreciation (depreciation) on investments
30,510,696Net realized gain on investments and foreign currency
(42,691,967 ) Net cash provided by operating activities 25,206,937 CASH FLOWS FROM FINANCING ACTIVITIES: Distributions (44,964,305 ) Reinvestment of distributions 19,639,522 Net cash used for financing activities (25,324,783 ) INCREASE (DECREASE) IN CASH: (117,846 ) Cash and foreign currency at beginning of period 125,821 Cash and foreign currency at end of period $ 7,975
24 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Royce Value Trust Financial HighlightsThis table is presented to show selected data for a share of Common Stock outstanding throughout each period, and to assist stockholders in evaluating the Fund’s performance for the periods presented.
SIX MONTHS YEARS ENDED ENDED
6/30/15
(UNAUDITED) 12/31/14 12/31/13 12/31/12 12/31/11 12/31/10 Net Asset Value, Beginning of Period $ 16.24 $ 18.17 $ 15.40 $ 14.18 $ 16.73 $ 12.87 INVESTMENT OPERATIONS: Net investment income (loss) 0.07 0.12 0.12 0.23 0.10 0.24 Net realized and unrealized gain (loss) on investments and foreign currency 0.17 (0.13 ) 4.89 2.02 (1.62 ) 3.85 Total investment operations 0.24 (0.01 ) 5.01 2.25 (1.52 ) 4.09 DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: Net investment income – – – (0.04 ) (0.03 ) (0.20 ) Net realized gain on investments and foreign currency – – – (0.13 ) (0.16 ) – Total distributions to Preferred Stockholders – – – (0.17 ) (0.19 ) (0.20 ) Net Increase (Decrease) in Net Assets Applicable to Common Stockholders fromInvestment Operations
0.24 (0.01 ) 5.01 2.08 (1.71 ) 3.89 DISTRIBUTIONS TO COMMON STOCKHOLDERS: Net investment income – (0.14 ) (0.11 ) (0.17 ) (0.08 ) (0.03 ) Net realized gain on investments and foreign currency – (1.68 ) (2.08 ) (0.63 ) (0.43 ) – Return of capital – – – – (0.27 ) – Quarterly distributions 1 (0.59 ) – – – – – Total distributions to Common Stockholders (0.59 ) (1.82 ) (2.19 ) (0.80 ) (0.78 ) (0.03 ) CAPITAL STOCK TRANSACTIONS: Effect of reinvestment of distributions by Common Stockholders (0.04 ) (0.10 ) (0.05 ) (0.06 ) (0.06 ) (0.00 ) Total capital stock transactions (0.04 ) (0.10 ) (0.05 ) (0.06 ) (0.06 ) (0.00 ) Net Asset Value, End of Period $ 15.85 $ 16.24 $ 18.17 $ 15.40 $ 14.18 $ 16.73 Market Value, End of Period $ 13.79 $ 14.33 $ 16.01 $ 13.42 $ 12.27 $ 14.54 TOTAL RETURN: 2 Net Asset Value 1.69 % 3 0.78 % 34.14 % 15.41 % (10.06 )% 30.27 % Market Value 0.27 % 3 0.93 % 35.63 % 16.22 % (10.46 )% 35.05 % RATIOS BASED ON AVERAGE NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS: Investment advisory fee expense 4 0.48 % 5 0.46 % 0.54 % 0.56 % 0.86 % 0.11 % Other operating expenses 0.17 % 5 0.15 % 0.25 % 0.15 % 0.12 % 0.12 % Total expenses (net) 6 0.65 % 5 0.61 % 0.79 % 0.71 % 0.98 % 0.23 % Expenses net of fee waivers and excluding interest expense 0.58 % 5 0.55 % 0.65 % 0.68 % 0.98 % 0.23 % Expenses prior to fee waivers and balance credits 0.65 % 5 0.61 % 0.79 % 0.71 % 0.98 % 0.23 % Expenses prior to fee waivers 0.65 % 5 0.61 % 0.79 % 0.71 % 0.98 % 0.23 % Net investment income (loss) 0.85 % 5 0.72 % 0.70 % 1.57 % 0.63 % 1.69 % SUPPLEMENTAL DATA: Net Assets Applicable to Common Stockholders, End of Period (in thousands) $ 1,224,200 $ 1,231,955 $ 1,307,829 $ 1,082,426 $ 966,640 $ 1,105,879 Liquidation Value of Preferred Stock, End of Period (in thousands) $ 220,000 $ 220,000 Portfolio Turnover Rate 17 % 40 % 33 % 25 % 26 % 30 % PREFERRED STOCK: Total shares outstanding 8,800,000 8,800,000 Asset coverage per share $ 134.88 $ 150.67 Liquidation preference per share $ 25.00 $ 25.00 Average month-end market value per share $ 25.37 $ 25.06 REVOLVING CREDIT AGREEMENT: Asset coverage 1849 % 1860 % 1289 % 822 % Asset coverage per $1,000 $ 18,489 $ 18,599 $ 12,889 $ 8,216
1To be allocated to net investment income, net realized gains and/or return of capital at year end.2The Market Value Total Return is calculated assuming a purchase of Common Stock on the opening of the first business day and a sale on the closing of the last business day of each period. Dividends and distributions are assumed for the purposes of this calculation to be reinvested at prices obtained under the Fund’s Distribution Reinvestment and Cash Purchase Plan. Net Asset Value Total Return is calculated on the same basis, except that the Fund’s net asset value is used on the purchase and sale dates instead of market value.3 Not annualized 4The investment advisory fee is calculated based on average net assets over a rolling 60-month basis, while the above ratios of investment advisory fee expenses are based on the average net assets applicable to Common Stockholders over a 12-month basis.5 Annualized 6Expense ratios based on total average net assets including liquidation value of Preferred Stock were 0.60%, 0.82% and 0.18% for the years ended December 31, 2012, 2011 and 2010, respectively.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 25
Royce Value Trust
Notes to Financial Statements (unaudited)
Summary of Significant Accounting Policies:Royce Value Trust, Inc. (the "Fund"), is a diversified closed-end investment company that was incorporated under the laws of the State of Maryland on July 1, 1986. The Fund commenced operations on November 26, 1986.The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 “Financial Services-Investment Companies”.
VALUATION OF INVESTMENTS:Securities are valued as of the close of trading on the New York Stock Exchange (NYSE) (generally 4:00 p.m. Eastern time) on the valuation date. Securities that trade on an exchange, and securities traded on Nasdaq’s Electronic Bulletin Board, are valued at their last reported sales price or Nasdaq official closing price taken from the primary market in which each security trades or, if no sale is reported for such day, at their highest bid price. Other over-the-counter securities for which market quotations are readily available are valued at their highest bid price, except in the case of some bonds and other fixed income securities which may be valued by reference to other securities with comparable ratings, interest rates and maturities, using established independent pricing services. The Fund values its non-U.S. dollar denominated securities in U.S. dollars daily at the prevailing foreign currency exchange rates as quoted by a major bank. Securities for which market quotations are not readily available are valued at their fair value in accordance with the provisions of the 1940 Act, under procedures approved by the Fund’s Board of Directors, and are reported as Level 3 securities. As a general principle, the fair value of a security is the amount which the Fund might reasonably expect to receive for the security upon its current sale. However, in light of the judgment involved in fair valuations, there can be no assurance that a fair value assigned to a particular security will be the amount which the Fund might be able to receive upon its current sale. In addition, if, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and may make the closing price unreliable, the Fund may fair value the security. The Fund uses an independent pricing service to provide fair value estimates for relevant non-U.S. equity securities on days when the U.S. market volatility exceeds a certain threshold. This pricing service uses proprietary correlations it has developed between the movement of prices of non-U.S. equity securities and indices of U.S.-traded securities, futures contracts and other indications to estimate the fair value of relevant non-U.S. securities. When fair value pricing is employed, the prices of securities used by the Fund may differ from quoted or published prices for the same security. Investments in money market funds are valued at net asset value per share.Various inputs are used in determining the value of the Fund’s investments, as noted above. These inputs are summarized in the three broad levels below:Level 1 –quoted prices in active markets for identical securities.Level 2 –other significant observable inputs (including quoted prices for similar securities, foreign securities that may be fair valued and repurchase agreements). The table below includes all Level 2 securities. Level 2 securities with values based on quoted prices for similar securities are noted in the Schedule of Investments.Level 3 –significant unobservable inputs (including last trade price before trading was suspended, or at a discount thereto for lack of marketability or otherwise, market price information regarding other securities, information received from the company and/or published documents, including SEC filings and financial statements, or other publicly available information).The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.The following is a summary of the inputs used to value the Fund’s investments as of June 30, 2015. For a detailed breakout of common stocks by sector classification, please refer to the Schedule of Investments.
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Common Stocks $1,186,155,432 $23,237,468 $227,497 $1,209,620,397 Cash Equivalents – 89,420,000 – 89,420,000For the six months ended June 30, 2015, certain securities have transferred in and out of Level 1 and Level 2 measurements. The Fund recognizes transfers between levels as of the end of the reporting period. At June 30, 2015, securities valued at $79,743,661 were transferred from Level 2 to Level 1 within the fair value hierarchy.
26 | 2015 Semiannual Report to Stockholders
Royce Value Trust
Notes to Financial Statements (unaudited) (continued)
VALUATION OF INVESTMENTS (continued):
Level 3 Reconciliation:
BALANCE AS OF 12/31/14 PURCHASES SALES REALIZED AND UNREALIZED
GAIN (LOSS) 1 BALANCE AS OF 6/30/15 Common Stocks $ 270,001 $ 0 $ 1 $ (42,503) $227,497 Preferred Stocks 1,216,350 – 724,062 (492,288) – 1The net change in unrealized appreciation (depreciation) is included in the accompanying Statement of Operations. Change in unrealized appreciation (depreciation) includes net unrealized appreciation (depreciation) resulting from changes in investment values during the reporting period and the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized. Net realized gain (loss) from investments and foreign currency transactions is included in the accompanying Statement of Operations.
REPURCHASE AGREEMENTS:The Fund may enter into repurchase agreements with institutions that the Fund’s investment adviser has determined are creditworthy. The Fund restricts repurchase agreements to maturities of no more than seven days. Securities pledged as collateral for repurchase agreements, which are held until maturity of the repurchase agreements, are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). Repurchase agreements could involve certain risks in the event of default or insolvency of the counter-party, including possible delays or restrictions upon the ability of the Fund to dispose of its underlying securities.
FOREIGN CURRENCY:Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, expiration of currency forward contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, including investments in securities at the end of the reporting period, as a result of changes in foreign currency exchange rates.
SECURITIES LENDING:The Fund loans securities through a lending agent to qualified institutional investors for the purpose of realizing additional income. Collateral for the Fund on all securities loaned is accepted in cash and cash equivalents and invested temporarily by the custodian. The collateral maintained is at least 100% of the current market value of the loaned securities. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. The Fund retains the risk of any loss on the securities on loan as well as incurring the potential loss on investments purchased with cash collateral received for securities lending. The Fund’s securities lending income consists of the income earned on investing cash collateral, plus any premium payments received for lending certain securities, less any rebates paid to borrowers and lending agent fees associated with the loan. The lending agent is not affiliated with Royce.
TAXES:As a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the Fund is not subject to income taxes to the extent that it distributes substantially all of its taxable income for its fiscal year. The Schedule of Investments includes information regarding income taxes under the caption “Tax Information”.
CAPITAL GAINS TAXES:The Fund is subject to a tax imposed on short-term capital gains on securities of issuers domiciled in certain countries. The Fund records an estimated deferred tax liability for these securities that have been held for less than one year. This amount, if any, is reported as deferred capital gains tax in the accompanying Statement of Assets and Liabilities, assuming those positions were disposed of at the end of the period, and accounted for as a reduction in the market value of the security.
DISTRIBUTIONS:The Fund pays quarterly distributions on the Fund’s Common Stock at the annual rate of 7% of the rolling average of the prior four calendar quarter-end NAVs of the Fund’s Common Stock, with the fourth quarter distribution being the greater of 1.75% of the rolling average or the distribution required by IRS regulations. Prior to November 15, 2012, distributions to Preferred Stockholders were accrued daily and paid quarterly. Distributions to Common Stockholders are recorded on ex-dividend date. Distributable capital gains and/or net investment income were first allocated to Preferred Stockholder distributions, with any excess allocable to Common Stockholders. If capital gains and/or net investment income were allocated to both Preferred and Common Stockholders, the tax character of such allocations was proportional. To the extent that distributions are not paid from long-term capital gains, net investment income or net short-term capital gains, they will represent a return of capital. Distributions are determined in accordance with income tax regulations that may
2015 Semiannual Report to Stockholders | 27
Royce Value Trust
Notes to Financial Statements (unaudited) (continued)
DISTRIBUTIONS (continued):differ from accounting principles generally accepted in the United States of America. Permanent book and tax differences relating to stockholder distributions will result in reclassifications within the capital accounts. Undistributed net investment income may include temporary book and tax basis differences, which will reverse in a subsequent period. Any taxable income or gain remaining undistributed at fiscal year end is distributed in the following year.
INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME:Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Non-cash dividend income is recorded at the fair market value of the securities received. Interest income is recorded on an accrual basis. Premium and discounts on debt securities are amortized using the effective yield-to-maturity method. Realized gains and losses from investment transactions are determined on the basis of identified cost for book and tax purposes.
EXPENSES:The Fund incurs direct and indirect expenses. Expenses directly attributable to the Fund are charged to the Fund’s operations, while expenses applicable to more than one of the Royce Funds are allocated equitably. Certain personnel, occupancy costs and other administrative expenses related to the Funds are allocated by Royce & Associates, LLC (“Royce”) under an administration agreement and are included in administrative and office facilities and professional fees. The Fund has adopted a deferred fee agreement that allows the Directors to defer the receipt of all or a portion of directors’ fees otherwise payable. The deferred fees are invested in certain Royce Funds until distributed in accordance with the agreement.
COMPENSATING BALANCE CREDITS:The Fund has an arrangement with its custodian bank, whereby a portion of the custodian’s fee is paid indirectly by credits earned on the Fund’s cash on deposit with the bank. This deposit arrangement is an alternative to purchasing overnight investments. Conversely, the Fund pays interest to the custodian on any cash overdrafts, to the extent they are not offset by credits earned on positive cash balances.
Capital Stock:The Fund issued 1,382,488 and 3,894,284 shares of Common Stock as reinvestment of distributions for the six months ended June 30, 2015 and the year ended December 31, 2014, respectively.
Borrowings:The Fund has entered into a revolving credit agreement (the credit agreement) with BNP Paribas Prime Brokerage Inc. (BNPP). The Fund pays a commitment fee of 0.50% per annum on the unused portion of the credit agreement. The credit agreement has a 360-day rolling term that resets daily; however, if the Fund exceeds certain net asset value triggers, the credit agreement may convert to a 60-day rolling term that resets daily. The Fund is required to pledge portfolio securities as collateral in an amount up to two times the loan balance outstanding and has granted a security interest in the securities pledged to, and in favor of, BNPP as security for the loan balance outstanding. If the Fund fails to meet certain requirements, or maintain other financial covenants required under the credit agreement, the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the credit agreement necessitating the sale of portfolio securities at potentially inopportune times. The credit agreement also permits, subject to certain conditions, BNPP to rehypothecate portfolio securities pledged by the Fund up to the amount of the loan balance outstanding. The Fund continues to receive payments in lieu of dividends and interest on rehypothecated securities. The Fund also has the right under the credit agreement to recall the rehypothecated securities from BNPP on demand. If BNPP fails to deliver the recalled security in a timely manner, the Fund is compensated by BNPP for any fees or losses related to the failed delivery or, in the event a recalled security is not returned by BNPP, the Fund, upon notice to BNPP, may reduce the loan balance outstanding by the amount of the recalled security failed to be returned. The Fund receives a portion of the fees earned by BNPP in connection with the rehypothecation of portfolio securities.As of June 30, 2015, the Fund has outstanding borrowings of $70,000,000. During the six months ended June 30, 2015, the Fund borrowed an average daily balance of $70,000,000 at a weighted average borrowing cost of 1.22%. The maximum amount outstanding during the six months ended June 30, 2015 was $70,000,000. As of June 30, 2015, the aggregate value of rehypothecated securities was $65,665,298. During the six months ended June 30, 2015, the Fund earned $265,265 in fees from rehypothecated securities.
Investment Advisory Agreement:As compensation for its services under the Investment Advisory Agreement, Royce receives a fee comprised of a Basic Fee (“Basic Fee”) and an adjustment to the Basic Fee based on the investment performance of the Fund in relation to the investment record of the S&P SmallCap 600 Index (“S&P 600").
28 | 2015 Semiannual Report to Stockholders
Royce Value Trust
Notes to Financial Statements (unaudited) (continued)
Investment Advisory Agreement (continued):The Basic Fee is a monthly fee equal to 1/12 of 1% (1% on an annualized basis) of the average of the Fund’s month-end net assets applicable to Common Stockholders, plus the liquidation value of outstanding Preferred Stock, for the rolling 60-month period ending with such month (the "performance period"). The Basic Fee for each month is increased or decreased at the rate of 1/12 of .05% for each percentage point that the investment performance of the Fund exceeds, or is exceeded by, the percentage change in the investment record of the S&P 600 for the performance period by more than two percentage points. The performance period for each such month is a rolling 60-month period ending with such month. The maximum increase or decrease in the Basic Fee for any month may not exceed 1/12 of .5%. Accordingly, for each month, the maximum monthly fee rate as adjusted for performance is 1/12 of 1.5% and is payable if the investment performance of the Fund exceeds the percentage change in the investment record of the S&P 600 by 12 or more percentage points for the performance period, and the minimum monthly fee rate as adjusted for performance is 1/12 of .5% and is payable if the percentage change in the investment record of the S&P 600 exceeds the investment performance of the Fund by 12 or more percentage points for the performance period.Notwithstanding the foregoing, Royce is not entitled to receive any fee for any month when the investment performance of the Fund for the rolling 36-month period ending with such month is negative. In the event that the Fund’s investment performance for such a performance period is less than zero, Royce will not be required to refund to the Fund any fee earned in respect of any prior performance period.For the six rolling 60-month periods ended June 2015, the Fund’s investment performance ranged from 37% to 45% below the investment performance of the S&P 600. Accordingly, the net investment advisory fee consisted of a Basic Fee of $5,855,318 and a net downward adjustment of $2,927,659 for the performance of the Fund relative to that of the S&P 600. For the six months ended June 30, 2015, the Fund accrued and paid Royce investment advisory fees totaling $2,927,659.
Purchases and Sales of Investment Securities:For the six months ended June 30, 2015, the costs of purchases and proceeds from sales of investment securities, other than short-term securities, amounted to $207,153,233 and $277,887,228, respectively.
Transactions in Affiliated Companies:An “Affiliated Company” as defined in the Investment Company Act of 1940, is a company in which a fund owns 5% or more of the company’s outstanding voting securities at any time during the period. The Fund effected the following transactions in shares of such companies for the six months ended June 30, 2015:
AFFILIATED COMPANY SHARES
12/31/14 MARKET VALUE
12/31/14 COST OF
PURCHASES COST OF
SALES REALIZED
GAIN (LOSS) DIVIDEND
INCOME SHARES
6/30/15 MARKET VALUE
6/30/15 Stanley Furniture 1,012,235 $2,773,524 – – – – 1,012,235 $3,006,338 Timberland Bancorp 444,200 4,708,520 – – – $53,304 444,200 4,450,884 $7,482,044 $53,304 $7,457,222
2015 Semiannual Report to Stockholders | 29
Royce Micro-Cap Trust
Schedule of Investments Common Stocks – 105.9% SHARES VALUE CONSUMER DISCRETIONARY – 16.6% AUTO COMPONENTS - 2.6%Drew Industries 1, 2
55,400 $ 3,214,308Fuel Systems Solutions 3
152,000 1,136,960Global & Yuasa Battery
50,500 1,731,700Motorcar Parts of America 3
50,000 1,504,500Standard Motor Products
61,853 2,172,278 9,759,746 DISTRIBUTORS - 0.7%Core-Mark Holding Company
16,800 995,400Weyco Group
59,600 1,777,272 2,772,672 DIVERSIFIED CONSUMER SERVICES - 1.9%American Public Education 3
68,300 1,756,676Capella Education
1,300 69,771Collectors Universe
83,100 1,657,014Liberty Tax Cl. A
108,264 2,679,534Lincoln Educational Services 3
425,800 860,116 7,023,111 HOTELS, RESTAURANTS & LEISURE - 0.6%Monarch Casino & Resort 3
31,997 657,858MTY Food Group
55,300 1,466,402Nathan’s Famous
2,100 77,826 2,202,086 HOUSEHOLD DURABLES - 3.1%Cavco Industries 3
18,691 1,410,049Ethan Allen Interiors 1
69,700 1,835,898Flexsteel Industries 1, 2
53,900 2,322,551iRobot Corporation 1, 2, 3
15,000 478,200Lifetime Brands
192,094 2,837,228Skyline Corporation 3
183,400 539,196Stanley Furniture 3
93,468 277,600Universal Electronics 3
37,900 1,888,936 11,589,658 INTERNET & CATALOG RETAIL - 1.0%Blue Nile 3
76,500 2,324,835FTD Companies 3
48,700 1,372,853 3,697,688 LEISURE PRODUCTS - 1.7%Arctic Cat
11,500 381,915LeapFrog Enterprises Cl. A 1, 3
446,000 624,400Nautilus 3
177,700 3,822,327Smith & Wesson Holding Corporation 1, 2, 3
92,600 1,536,234Sturm, Ruger & Co.
1,100 63,195 6,428,071 MEDIA - 1.1%Rentrak Corporation 3
34,500 2,408,100Sizmek 3
5,800 41,180Value Line
169,000 1,754,220 4,203,500 SPECIALTY RETAIL - 1.8%Aeropostale 3
165,000 267,300America’s Car-Mart 1, 2, 3
18,100 892,692Destination Maternity
190,600 2,222,396Kirkland’s
7,900 220,173Le Chateau Cl. A 3
685,000 318,094Lewis Group
57,000 461,913Shoe Carnival 1
31,628 912,784Stage Stores 1
27,800 487,334Systemax 1, 2, 3
44,000 380,160West Marine 3
86,000 829,040 6,991,886 TEXTILES, APPAREL & LUXURY GOODS - 2.1%Crown Crafts
159,359 1,274,872Culp
55,100 1,708,100J.G. Boswell Company 4
2,490 1,755,450Movado Group 1
44,374 1,205,198YGM Trading
1,422,000 1,838,141 7,781,761 Total (Cost $56,674,496) 62,450,179 CONSUMER STAPLES – 2.8% BEVERAGES - 0.1%Crimson Wine Group 3, 4
58,124 543,459 FOOD PRODUCTS - 2.7%Binggrae
18,078 1,369,484Farmer Bros. 1, 3
67,400 1,583,900John B. Sanfilippo & Son
26,900 1,396,110Landec Corporation 3
75,610 1,091,052Limoneira Company
6,400 142,272Seneca Foods Cl. A 3
51,400 1,427,378Seneca Foods Cl. B 3
42,500 1,264,800SunOpta 3
138,700 1,488,251Waterloo Investment Holdings 3, 5
806,207 306,359 10,069,606 Total (Cost $7,527,262) 10,613,065 ENERGY – 1.7% ENERGY EQUIPMENT & SERVICES - 0.9%Canadian Energy Services & Technology
25,000 144,115Dawson Geophysical 3
93,654 440,174Geospace Technologies 1, 2, 3
9,500 218,975Gulf Island Fabrication
103,216 1,152,923Matrix Service 1, 2, 3
25,300 462,484North American Energy Partners
50,000 121,500Pioneer Energy Services 1, 3
57,500 364,550Tesco Corporation 1
58,000 632,200 3,536,921 OIL, GAS & CONSUMABLE FUELS - 0.8%Ardmore Shipping
10,600 128,366Permian Basin Royalty Trust
266,333 2,146,644Resolute Energy 1, 2, 3
102,100 98,680StealthGas 3
74,500 502,875 2,876,565 Total (Cost $9,118,156) 6,413,486 FINANCIALS – 19.8% BANKS - 2.0%Bank of N.T. Butterfield & Son
438,100 714,103BCB Holdings 3
566,936 75,718Blue Hills Bancorp 3
50,000 700,000Bryn Mawr Bank
25,000 754,000Chemung Financial 1
31,000 820,880Fauquier Bankshares 1, 2
140,200 2,227,778First Bancorp (The)
40,200 781,488Peapack-Gladstone Financial
53,606 1,191,125 7,265,092 CAPITAL MARKETS - 11.1%ASA Gold and Precious Metals
206,150 2,001,716
30 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
June 30, 2015 (unaudited)
Schedule of Investments (continued)
SHARES VALUE FINANCIALS (continued) CAPITAL MARKETS (continued)BHF Kleinwort Benson Group 3
230,000 $ 1,125,664Cowen Group 3
245,900 1,573,760Diamond Hill Investment Group 1,2
23,354 4,662,860Dundee Corporation Cl. A 3
120,000 1,204,804Equity Trustees
43,150 678,832FBR & Co. 3
51,684 1,195,968Fiera Capital Cl. A
78,000 773,755†Fifth Street Asset Management Cl. A
211,603 2,175,279INTL FCStone 1,2,3
41,727 1,387,005JZ Capital Partners
253,999 1,789,945Medley Management Cl. A
210,800 2,495,872MVC Capital 1,2
387,400 3,951,480Newtek Business Services
86,600 1,534,552OHA Investment
230,820 1,313,366Queen City Investments 4
948 1,090,200Silvercrest Asset Management Group Cl. A
228,600 3,214,116Sprott
984,300 1,946,534U.S. Global Investors Cl. A
676,254 1,879,986Urbana Corporation
237,600 410,901Westwood Holdings Group 1
34,700 2,067,079ZAIS Group Holdings Cl. A 3
292,160 3,184,544 41,658,218 CONSUMER FINANCE - 1.0%EZCORP Cl. A 1,2,3
201,000 1,493,430J.G. Wentworth Company Cl. A 3
160,000 1,472,000Regional Management 3
51,400 918,004 3,883,434 DIVERSIFIED FINANCIAL SERVICES - 0.6%Banca Finnat Euramerica
1,310,000 711,241GAIN Capital Holdings
25,000 239,000PICO Holdings 1,3
45,700 672,704Warsaw Stock Exchange
52,900 666,033 2,288,978 INSURANCE - 2.1%Hallmark Financial Services 3
114,000 1,297,320Independence Holding Company
105,380 1,389,962National Western Life Insurance Cl. A 1
7,033 1,684,333State Auto Financial 1,2
97,264 2,329,473United Fire Group 1
38,603 1,264,635 7,965,723 REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.4%BRT Realty Trust 3
230,331 1,619,227 REAL ESTATE MANAGEMENT & DEVELOPMENT - 2.6%AV Homes 3
75,300 1,082,061Forestar Group 1,2,3
53,000 697,480FRP Holdings 1,2,3
88,381 2,866,196Griffin Industrial Realty
47,746 1,529,782Hopefluent Group Holdings
1,400,000 475,002Marcus & Millichap 3
2,700 124,578Tejon Ranch 1,2,3
112,162 2,883,685Tejon Ranch (Warrants) 3
13,146 5,915 9,664,699 Total (Cost $67,746,119) 74,345,371 HEALTH CARE – 10.7% BIOTECHNOLOGY - 1.2%Aquinox Pharmaceuticals 3
47,622 330,497ARIAD Pharmaceuticals 1,3
114,102 943,624Celsion Corporation 3
115,555 271,554ChemoCentryx 3
70,000 576,100Fortress Biotech 3
147,400 495,264Zealand Pharma 3
104,000 1,717,300 4,334,339 HEALTH CARE EQUIPMENT & SUPPLIES - 4.5%Allied Healthcare Products 3
45,172 66,403AngioDynamics 1,2,3
42,163 691,473Atrion Corporation
10,294 4,038,439Cerus Corporation 1,2,3
140,000 726,600Cynosure Cl. A 3
1,500 57,870Derma Sciences 3
74,958 536,699Exactech 1,2,3
137,200 2,857,876Inogen 3
5,400 240,840Invacare Corporation 1
44,300 958,209Meridian Bioscience
45,400 846,256STRATEC Biomedical
14,000 771,108Symmetry Surgical 3
2,975 25,942Synergetics USA 1,3
61,735 290,155Syneron Medical 3
69,200 734,904TearLab Corporation 3
100,000 202,000Trinity Biotech ADR Cl. A
81,600 1,473,696Utah Medical Products
38,100 2,271,903 16,790,373 HEALTH CARE PROVIDERS & SERVICES - 3.4%Aceto Corporation
72,219 1,778,754Addus HomeCare 3
66,900 1,863,834CorVel Corporation 1,3
40,000 1,280,800Cross Country Healthcare 3
240,700 3,052,076Landauer
32,343 1,152,704National Research Cl. A
40,033 568,869PharMerica Corporation 1,2,3
40,000 1,332,000Psychemedics Corporation
83,200 1,233,856U.S. Physical Therapy
12,600 689,976 12,952,869 HEALTH CARE TECHNOLOGY - 0.6%Computer Programs and Systems
24,000 1,282,080HealthStream 3
24,227 736,985Vocera Communications 3
33,100 378,995 2,398,060 PHARMACEUTICALS - 1.0%Agile Therapeutics 1,3
80,000 687,200Lipocine 3
122,800 1,053,624Repros Therapeutics 3
129,000 922,350Theravance Biopharma 3
83,509 1,087,287 3,750,461 Total (Cost $30,310,628) 40,226,102 INDUSTRIALS – 20.7% AEROSPACE & DEFENSE - 1.6%Breeze-Eastern Corporation 3
24,233 278,680CPI Aerostructures 3
90,700 907,907Ducommun 1,2,3
75,700 1,943,219FLYHT Aerospace Solutions 3
800,200 150,558Innovative Solutions and Support 3
142,828 471,332Kratos Defense & Security Solutions 3
72,324 455,641SIFCO Industries
45,800 682,420
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 31
Royce Micro-Cap Trust Schedule of Investments (continued)
SHARES VALUE INDUSTRIALS (continued) AEROSPACE & DEFENSE (continued)Sparton Corporation 1,2,3
35,700 $ 975,324 5,865,081 AIR FREIGHT & LOGISTICS - 0.7%Frontier Services Group 3
6,137,286 2,581,103 BUILDING PRODUCTS - 1.7%AAON 1,2
30,300 682,356Apogee Enterprises
31,900 1,679,216Burnham Holdings Cl. A 4
117,000 2,162,160Insteel Industries
60,500 1,131,350Patrick Industries 3
21,150 804,758 6,459,840 COMMERCIAL SERVICES & SUPPLIES - 1.6%CompX International Cl. A
107,500 1,225,500Heritage-Crystal Clean 3
235,077 3,455,632Horizon North Logistics
22,300 68,739Intersections 1,2,3
203,700 625,359Team 1,2,3
17,500 704,375 6,079,605 CONSTRUCTION & ENGINEERING - 3.2%Ameresco Cl. A 3
295,700 2,262,105Integrated Electrical Services 3
570,682 4,051,842Layne Christensen 1,2,3
50,000 447,500MYR Group 1,2,3
107,100 3,315,816Northwest Pipe 3
32,000 651,840Orbit Garant Drilling 3
1,512,500 1,235,188 11,964,291 ELECTRICAL EQUIPMENT - 1.0%Encore Wire 1
15,000 664,350Global Power Equipment Group
55,649 431,836LSI Industries
99,012 924,772Orion Energy Systems 3
100,000 251,000Powell Industries
28,400 998,828Preformed Line Products
17,243 650,406 3,921,192 INDUSTRIAL CONGLOMERATES - 0.6%Raven Industries 1
103,400 2,102,122 MACHINERY - 5.2%ARC Group Worldwide 1,2,3
39,250 208,025CIRCOR International 1
1,100 59,983Columbus McKinnon
39,850 996,250Douglas Dynamics
50,000 1,074,000Eastern Company (The)
39,750 736,170Foster (L.B.) Company 1
46,400 1,605,904Graham Corporation 1
111,948 2,293,815Hurco Companies
57,266 1,982,549Kadant
21,200 1,000,640Luxfer Holdings ADR
27,812 361,556NN
141,600 3,613,632Pfeiffer Vacuum Technology
21,000 1,871,074Sun Hydraulics
8,200 312,502Tecumseh Products 3
265,000 654,550Tennant Company 1,2
33,500 2,188,890Twin Disc
7,000 130,480Wabash National 3
46,100 578,094 19,668,114 MARINE - 0.4%Clarkson
32,700 1,406,267 PROFESSIONAL SERVICES - 2.7%Acacia Research 1
69,700 611,269CBIZ 3
47,000 453,080Franklin Covey 3
78,700 1,596,823Heidrick & Struggles International
98,268 2,562,830ICF International 3
15,700 547,302Kforce 1
66,600 1,523,142Mistras Group 3
4,100 77,818Navigant Consulting 3
5,100 75,837Resources Connection
60,160 967,974RPX Corporation 3
104,900 1,772,810 10,188,885 ROAD & RAIL - 1.0%Marten Transport
3,300 71,610†Patriot Transportation Holding 1,2,3
29,460 726,189Universal Truckload Services 1
134,200 2,947,032 3,744,831 TRADING COMPANIES & DISTRIBUTORS - 0.8%DXP Enterprises 3
1,600 74,400Houston Wire & Cable
162,075 1,607,784Lawson Products 3
47,769 1,121,616MFC Industrial 3
70,000 283,500 3,087,300 TRANSPORTATION INFRASTRUCTURE - 0.2%Touax
53,197 880,704 Total (Cost $60,432,284) 77,949,335 INFORMATION TECHNOLOGY – 22.6% COMMUNICATIONS EQUIPMENT - 1.2%Alliance Fiber Optic Products
48,900 907,095Applied Optoelectronics 1,2,3
7,500 130,200Bel Fuse Cl. A
67,705 1,398,785CalAmp Corporation 3
5,500 100,430Ceragon Networks 3
29,700 34,155ClearOne
25,000 322,625Extreme Networks 3
320,000 860,800KVH Industries 3
8,900 119,705Oclaro 3
27,900 63,054PCTEL
44,100 316,638Sandvine Corporation 3
22,700 65,247 4,318,734 ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 8.4%Agilysys 3
170,587 1,565,989Deswell Industries
544,371 979,868DTS 3
96,300 2,936,187†FARO Technologies 3
60,000 2,802,000Inficon Holding
3,600 1,230,226LRAD Corporation 3
401,756 799,494Mercury Systems 3
47,500 695,400Mesa Laboratories 1,2
38,489 3,421,672Newport Corporation 1,2,3
200,023 3,792,436Orbotech 1,2,3
127,800 2,658,240PC Connection
43,716 1,081,534Richardson Electronics
330,900 2,673,672Rofin-Sinar Technologies 3
71,100 1,962,360Rogers Corporation 1,3
14,700 972,258TTM Technologies 1,2,3
179,400 1,792,206Vishay Precision Group 3
154,000 2,319,240 31,682,782
32 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
June 30, 2015 (unaudited)
Schedule of Investments (continued)
SHARES VALUE INFORMATION TECHNOLOGY (continued) INTERNET SOFTWARE & SERVICES - 3.6%Care.com 1,2,3
372,254 $ 2,203,744LivePerson 3
3,700 36,297Marchex Cl. B
95,000 470,250QuinStreet 3
306,900 1,979,505Qumu Corporation 3
161,800 1,333,232RealNetworks 3
244,000 1,320,040Reis
25,000 554,500Stamps.com 3
10,800 794,556Support.com 3
1,357,663 1,914,305Textura Corporation 1,2,3
50,000 1,391,500United Online 3
97,400 1,526,258 13,524,187 IT SERVICES - 1.9%Cass Information Systems 1
29,150 1,638,813Computer Task Group 1
256,233 1,978,119Hackett Group (The)
170,000 2,283,100Innodata 3
437,275 1,150,033Sykes Enterprises 3
6,300 152,775 7,202,840 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 3.3%Amtech Systems 3
120,700 1,254,073Brooks Automation
116,300 1,331,635Cascade Microtech 3
86,200 1,312,395Exar Corporation 3
180,208 1,762,434Intermolecular 3
260,000 512,200IXYS Corporation
18,800 287,640Kulicke & Soffa Industries 3
72,300 846,633MoSys 1,2,3
402,275 764,322Nanometrics 3
50,800 818,896Nova Measuring Instruments 3
71,800 897,500Photronics 3
162,700 1,547,277Rubicon Technology 1,2,3
76,899 186,865Ultra Clean Holdings 3
128,300 799,309Xcerra Corporation 3
26,200 198,334 12,519,513 SOFTWARE - 3.0%American Software Cl. A
122,752 1,166,144BSQUARE Corporation 3
98,675 669,017†Computer Modelling Group
276,500 2,802,634Envivio 3
489,376 929,814ePlus 3
24,899 1,908,508Gigamon 3
3,600 118,764Model N 3
65,000 774,150PSI 3
34,000 392,316Rubicon Project 3
60,500 905,080SeaChange International 3
204,000 1,430,040 11,096,467 TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.2%Avid Technology 3
49,500 660,330Intevac 3
251,700 1,472,445Kortek
135,007 1,863,918TransAct Technologies
78,600 525,048 4,521,741 Total (Cost $80,654,554) 84,866,264 MATERIALS – 6.4% CHEMICALS - 2.1%Balchem Corporation 1,2
11,775 656,103Chase Corporation
13,503 536,744FutureFuel Corporation
109,700 1,411,839Hawkins 1
29,314 1,183,993KMG Chemicals
49,900 1,269,456Quaker Chemical 1,2
30,400 2,700,736 7,758,871 CONSTRUCTION MATERIALS - 0.5%Ash Grove Cement 4
8,000 1,608,000Monarch Cement 4
16,303 497,241 2,105,241 CONTAINERS & PACKAGING - 0.4%UFP Technologies 3
68,036 1,423,313 METALS & MINING - 3.4%AuRico Gold
91,250 259,150Central Steel & Wire 4
788 488,560Comstock Mining 3
615,000 359,775Exeter Resource 3
246,500 118,936Haynes International 1
51,401 2,535,097Hecla Mining
44,518 117,082Horsehead Holding Corporation 1,2,3
11,900 139,468Imdex 3
633,900 146,726MAG Silver 3
96,050 752,072Major Drilling Group International
460,857 2,306,130Materion Corporation
50,000 1,762,500Midway Gold 3,5
275,000 2,750Olympic Steel
100,000 1,744,000Pretium Resources 3
90,000 487,110Universal Stainless & Alloy Products 3
73,800 1,450,170 12,669,526 Total (Cost $23,496,105) 23,956,951 TELECOMMUNICATION SERVICES – 0.1% DIVERSIFIED TELECOMMUNICATION SERVICES - 0.1%ORBCOMM 3
38,000 256,500 Total (Cost $237,587) 256,500 UTILITIES – 0.3% GAS UTILITIES - 0.1%Shizuoka Gas
40,000 279,446 INDEPENDENT POWER & RENEWABLE ELECTRICITY PRODUCER - 0.0%Alterra Power 3
450,000 151,321 WATER UTILITIES - 0.2%GWR Global Water Resources
106,000 606,806 Total (Cost $936,784) 1,037,573 MISCELLANEOUS6 – 4.2% Total (Cost $15,669,416) 15,627,997 TOTAL COMMON STOCKS (Cost $352,803,391) 397,742,823 PREFERRED STOCK - 0.3%Seneca Foods Conv. 3,4
45,409 1,208,787(Cost $578,719)
1,208,787
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 33
Royce Micro-Cap Trust June 30, 2015 (unaudited) Schedule of Investments (continued)
VALUE REPURCHASE AGREEMENT– 9.5% Fixed Income Clearing Corporation, 0.00% dated 6/30/15, due 7/1/15, maturity value
$35,460,000 (collateralized by obligations of various U.S. Government Agencies, 2.125%
due 1/31/21, valued at $36,170,243) (Cost $35,460,000) $ 35,460,000 TOTAL INVESTMENTS – 115.7% (Cost $388,842,110) 434,411,610 LIABILITIES LESS CASH AND OTHER ASSETS – (15.7)% (58,846,984) NET ASSETS – 100.0% $ 375,564,626
† New additions in 2015. 1All or a portion of these securities were pledged as collateral in connection with the revolving credit agreement at June 30, 2015. Total market value of pledged securities at June 30, 2015, was $91,521,219.2At June 30, 2015, a portion of these securities were rehypothecated in connection with the Fund’s revolving credit agreement in the aggregate amount of $57,832,231.3Non-income producing.4These securities are defined as Level 2 securities due to fair value being based on quoted prices for similar securities. See Notes to Financial Statements.5Securities for which market quotations are not readily available represent 0.1% of net assets. These securities have been valued at their fair value under procedures approved by the Fund’s Board of Directors. These securities are defined as Level 3 securities due to the use of significant unobservable inputs in the determination of fair value. See Notes to Financial Statements.6Includes securities first acquired in 2015 and less than 1% of net assets.Bold indicates the Fund’s 20 largest equity holdings in terms of June 30, 2015, market value.TAX INFORMATION: The cost of total investments for Federal income tax purposes was $389,802,264. At June 30, 2015, net unrealized appreciation for all securities was $44,609,346, consisting of aggregate gross unrealized appreciation of $91,413,136 and aggregate gross unrealized depreciation of $46,803,790. The primary difference between book and tax basis cost is the timing of the recognition of losses on securities sold.
34 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Royce Micro-Cap Trust June 30, 2015 (unaudited) Statement of Assets and Liabilities
ASSETS: Total investments at value $ 398,951,610 Repurchase agreements (at cost and value) 35,460,000 Cash and foreign currency 3,466 Receivable for investments sold 4,431,491 Receivable for dividends and interest 328,651 Prepaid expenses and other assets 37,662 Total Assets 439,212,880 LIABILITIES: Revolving credit agreement 60,000,000 Payable for investments purchased 3,215,986 Payable for investment advisory fee 321,697 Payable for directors’ fees 24,227 Payable for interest expense 4,116 Accrued expenses 82,228 Total Liabilities 63,648,254 Net Assets $ 375,564,626 ANALYSIS OF NET ASSETS: Paid-in capital - $0.001 par value per share; 34,872,042 shares outstanding (150,000,000 shares authorized) $ 296,277,254 Undistributed net investment income (loss) (1,858,384 ) Accumulated net realized gain (loss) on investments and foreign currency 51,037,376 Net unrealized appreciation (depreciation) on investments and foreign currency 45,569,041 Quarterly distributions (15,460,661 ) Net Assets (net asset value per share - $10.77) $ 375,564,626 Investments at identified cost $ 353,382,110
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 35
Royce Micro-Cap Trust Six Months Ended June 30, 2015 (unaudited) Statement of Operations
INVESTMENT INCOME: INCOME: Dividends $ 2,367,224 Foreign withholding tax (39,792 ) Rehypothecation income 115,684 Total income 2,443,116 EXPENSES: Investment advisory fees 1,922,807 Interest expense 368,126 Stockholder reports 72,049 Custody and transfer agent fees 47,750 Directors’ fees 41,194 Administrative and office facilities 27,113 Professional fees 26,537 Other expenses 32,538 Total expenses 2,538,114 Net investment income (loss) (94,998 ) REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: NET REALIZED GAIN (LOSS): Investments 23,665,285 Foreign currency transactions (13,397 ) NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): Investments and foreign currency translations (26,614,570 ) Other assets and liabilities denominated in foreign currency 5,651 Net realized and unrealized gain (loss) on investments and foreign currency (2,957,031 ) NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS $ (3,052,029 )
36 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Royce Micro-Cap Trust Statement of Changes in Net Assets SIX MONTHS ENDED
6/30/15
(UNAUDITED) YEAR ENDED 12/31/14 INVESTMENT OPERATIONS: Net investment income (loss) $ (94,998 ) $ (382,932 ) Net realized gain (loss) on investments and foreign currency 23,651,888 94,504,058 Net change in unrealized appreciation (depreciation) on investments and foreign currency (26,608,919 ) (85,903,074 ) Net increase (decrease) in net assets from investment operations (3,052,029 ) 8,218,052 DISTRIBUTIONS: Net investment income – (1,343,094 ) Net realized gain on investments and foreign currency – (89,530,419 ) Quarterly distributions1 (15,460,661 ) – Total distributions (15,460,661 ) (90,873,513 ) CAPITAL STOCK TRANSACTIONS: Reinvestment of distributions 6,589,341 37,022,256 Total capital stock transactions 6,589,341 37,022,256 Net Increase (Decrease) In Net Assets (11,923,349 ) (45,633,205 ) NET ASSETS: Beginning of period 387,487,975 433,121,180 End of period (including undistributed net investment income (loss) of $(1,858,384) at 6/30/15 and $(1,763,387) at 12/31/14) $ 375,564,626 $ 387,487,975
1 To be allocated to net investment income, net realized gains and/or return of capital at year end.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 37
Royce Micro-Cap Trust Six Months Ended June 30, 2015 (unaudited) Statement of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES: Net increase (decrease) in net assets from investment operations $ (3,052,029 ) Adjustments to reconcile net increase (decrease) in net assets from investment operations to net cash provided by operating activities:Purchases of long-term investments
(65,222,690 )Proceeds from sales and maturities of long-term investments
107,042,282Net purchases, sales and maturities of short-term investments
(32,804,000 )Net (increase) decrease in dividends and interest receivable and other assets
(542 )Net increase (decrease) in interest expense payable, accrued expenses and other liabilities
(51,103 )Net change in unrealized appreciation (depreciation) on investments
26,614,570Net realized gain on investments and foreign currency
(23,651,888 ) Net cash provided by operating activities 8,874,600 CASH FLOWS FROM FINANCING ACTIVITIES: Distributions (15,460,661 ) Reinvestment of distributions 6,589,341 Net cash used for financing activities (8,871,320 ) INCREASE (DECREASE) IN CASH: 3,280 Cash and foreign currency at beginning of period 186 Cash and foreign currency at end of period $ 3,466
38 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Royce Micro-Cap Trust
Financial HighlightsThis table is presented to show selected data for a share of Common Stock outstanding throughout each period, and to assist stockholders in evaluating the Fund’s performance for the periods presented.
SIX MONTHS
YEARS ENDED ENDED
6/30/15
(UNAUDITED) 12/31/14 12/31/13 12/31/12 12/31/11 12/31/10 Net Asset Value, Beginning of Period $ 11.33 $ 14.12 $ 10.93 $ 9.86 $ 11.34 $ 8.90 INVESTMENT OPERATIONS: Net investment income (loss) (0.00 ) (0.01 ) 0.01 0.15 0.04 0.08Net realized and unrealized gain (loss) on investments and foreign currency
(0.08 ) 0.25 4.64 1.58 (0.82 ) 2.58 Total investment operations (0.08 ) 0.24 4.65 1.73 (0.78 ) 2.66 DISTRIBUTIONS TO PREFERRED STOCKHOLDERS: Net investment income – – – (0.02 ) (0.02 ) (0.10 ) Net realized gain on investments and foreign currency – – – (0.09 ) (0.11 ) (0.03 ) Total distributions to Preferred Stockholders - - - (0.11 ) (0.13 ) (0.13 )Net Increase (Decrease) in Net Assets Applicable to Common Stockholders from
(0.08 ) 0.24 4.65 1.62 (0.91 ) 2.53 DISTRIBUTIONS TO COMMON STOCKHOLDERS: Net investment income – (0.04 ) (0.03 ) (0.08 ) (0.05 ) (0.06 ) Net realized gain on investments and foreign currency – (2.86 ) (1.35 ) (0.43 ) (0.24 ) (0.02 ) Return of capital – – – – (0.24 ) – Quarterly distributions1 (0.45 ) – – – – – Total distributions to Common Stockholders (0.45 ) (2.90 ) (1.38 ) (0.51 ) (0.53 ) (0.08 ) CAPITAL STOCK TRANSACTIONS: Effect of reinvestment of distributions by Common Stockholders (0.03 ) (0.13 ) (0.08 ) (0.04 ) (0.04 ) (0.01 ) Total capital stock transactions (0.03 ) (0.13 ) (0.08 ) (0.04 ) (0.04 ) (0.01 ) Net Asset Value, End of Period $ 10.77 $ 11.33 $ 14.12 $ 10.93 $ 9.86 $ 11.34 Market Value, End of Period $ 9.22 $ 10.08 $ 12.61 $ 9.45 $ 8.77 $ 9.80 TOTAL RETURN:2 Net Asset Value (0.43 )%3 3.46 % 44.66 % 17.23 % (7.69 )% 28.50 % Market Value (4.19 )%3 3.06 % 49.42 % 13.95 % (4.99 )% 34.10 %
Investment OperationsRATIOS BASED ON AVERAGE NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS:
Investment advisory fee expense4 1.02 %5 0.93 % 0.82 % 1.12 % 0.97 % 0.97 % Other operating expenses 0.33 %5 0.25 % 0.29 % 0.18 % 0.15 % 0.15 % Total expenses (net)6 1.35 %5 1.18 % 1.11 % 1.30 % 1.12 % 1.12 % Expenses net of fee waivers and excluding interest expense 1.16 %5 1.05 % 0.96 % 1.27 % 1.12 % 1.12 % Expenses prior to fee waivers and balance credits 1.35 %5 1.18 % 1.11 % 1.32 % 1.15 % 1.17 % Expenses prior to fee waivers 1.35 %5 1.18 % 1.11 % 1.32 % 1.15 % 1.17 % Net investment income (loss) (0.05 )%5 (0.09 )% 0.08 % 1.46 % 0.40 % 0.84 % SUPPLEMENTAL DATA:Net Assets Applicable to Common Stockholders, End of Period (in thousands)
$ 375,565 $ 387,488 $ 433,121 $ 318,545 $ 279,292 $ 311,279 Liquidation Value of Preferred Stock, End of Period (in thousands) $ 60,000 $ 60,000 Portfolio Turnover Rate 17 % 41 % 29 % 28 % 30 % 27 % PREFERRED STOCK: Total shares outstanding 2,400,000 2,400,000 Asset coverage per share $ 141.37 $ 154.70 Liquidation preference per share $ 25.00 $ 25.00 Average month-end market value per share $ 25.41 $ 25.11 REVOLVING CREDIT AGREEMENT: Asset coverage 726 % 746 % 1062 % 808 % Asset coverage per $1,000 $ 7,259 $ 7,458 $ 10,625 $ 8,079
1To be allocated to net investment income, net realized gains and/or return of capital at year end.2The Market Value Total Return is calculated assuming a purchase of Common Stock on the opening of the first business day and a sale on the closing of the last business day of each period. Dividends and distributions are assumed for the purposes of this calculation to be reinvested at prices obtained under the Fund’s Distribution Reinvestment and Cash Purchase Plan. Net Asset Value Total Return is calculated on the same basis, except that the Fund’s net asset value is used on the purchase and sale dates instead of market value.3Not annualized4The investment advisory fee is calculated based on average net assets over a rolling 36-month basis, while the above ratios of investment advisory fee expenses are based on the average net assets applicable to Common Stockholders over a 12-month basis.5Annualized6Expense ratios based on total average net assets including liquidation value of Preferred Stock were 1.10%, 0.93% and 0.91% for the years ended December 31, 2012, 2011 and 2010, respectively.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 39
Royce Micro-Cap Trust
Notes to Financial Statements (unaudited)
Summary of Significant Accounting PoliciesRoyce Micro-Cap Trust, Inc. (the “Fund”), is a diversified closed-end investment company that was incorporated under the laws of the State of Maryland on September 9, 1993. The Fund commenced operations on December 14, 1993.The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 “Financial Services-Investment Companies”.
VALUATION OF INVESTMENTS:Securities are valued as of the close of trading on the New York Stock Exchange (NYSE) (generally 4:00 p.m. Eastern time) on the valuation date. Securities that trade on an exchange, and securities traded on Nasdaq’s Electronic Bulletin Board, are valued at their last reported sales price or Nasdaq official closing price taken from the primary market in which each security trades or, if no sale is reported for such day, at their highest bid price. Other over-the-counter securities for which market quotations are readily available are valued at their highest bid price, except in the case of some bonds and other fixed income securities which may be valued by reference to other securities with comparable ratings, interest rates and maturities, using established independent pricing services. The Fund values its non-U.S. dollar denominated securities in U.S. dollars daily at the prevailing foreign currency exchange rates as quoted by a major bank. Securities for which market quotations are not readily available are valued at their fair value in accordance with the provisions of the 1940 Act, under procedures approved by the Fund’s Board of Directors, and are reported as Level 3 securities. As a general principle, the fair value of a security is the amount which the Fund might reasonably expect to receive for the security upon its current sale. However, in light of the judgment involved in fair valuations, there can be no assurance that a fair value assigned to a particular security will be the amount which the Fund might be able to receive upon its current sale. In addition, if, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and may make the closing price unreliable, the Fund may fair value the security. The Fund uses an independent pricing service to provide fair value estimates for relevant non-U.S. equity securities on days when the U.S. market volatility exceeds a certain threshold. This pricing service uses proprietary correlations it has developed between the movement of prices of non-U.S. equity securities and indices of U.S.-traded securities, futures contracts and other indications to estimate the fair value of relevant non-U.S. securities. When fair value pricing is employed, the prices of securities used by the Fund may differ from quoted or published prices for the same security. Investments in money market funds are valued at net asset value per share.Various inputs are used in determining the value of the Fund’s investments, as noted above. These inputs are summarized in the three broad levels below:Level 1 – quoted prices in active markets for identical securities. Level 2 – other significant observable inputs (including quoted prices for similar securities, foreign securities that may be fair valued and repurchase agreements). The table below includes all Level 2 securities. Level 2 securities with values based on quoted prices for similar securities are noted in the Schedule of Investments. Level 3 – significant unobservable inputs (including last trade price before trading was suspended, or at a discount thereto for lack of marketability or otherwise, market price information regarding other securities, information received from the company and/or published documents, including SEC filings and financial statements, or other publicly available information).The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.The following is a summary of the inputs used to value the Fund’s investments as of June 30, 2015. For a detailed breakout of common stocks by sector classification, please refer to the Schedule of Investments.
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Common Stocks $389,288,643 $ 8,145,071 $309,109 $397,742,823 Preferred Stocks – 1,208,787 – 1,208,787 Cash Equivalents – 35,460,000 – 35,460,000 For the six months ended June 30, 2015, certain securities have transferred in and out of Level 1, Level 2 and Level 3 measurements. The Fund recognizes transfers between levels as of the end of the reporting period. At June 30, 2015, securities valued at $22,618,659 were transferred from Level 2 to Level 1 and securities valued at $2,750 were transferred from Level 1 to Level 3 within the fair value hierarchy.40 | 2015 Semiannual Report to Stockholders
Royce Micro-Cap Trust
Notes to Financial Statements (unaudited) (continued)
VALUATION OF INVESTMENTS (continued):
Level 3 Reconciliation:
BALANCE AS OF 12/31/14 TRANSFERS IN SALES REALIZED AND UNREALIZED
GAIN (LOSS)1 BALANCE AS OF 6/30/15 Common Stocks $325,702 $2,750 $1 $(19,342) $309,109 1The net change in unrealized appreciation (depreciation) is included in the accompanying Statement of Operations. Change in unrealized appreciation (depreciation) includes net unrealized appreciation (depreciation) resulting from changes in investment values during the reporting period and the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized. Net realized gain (loss) from investments and foreign currency transactions is included in the accompanying Statement of Operations.
REPURCHASE AGREEMENTS:The Fund may enter into repurchase agreements with institutions that the Fund’s investment adviser has determined are creditworthy. The Fund restricts repurchase agreements to maturities of no more than seven days. Securities pledged as collateral for repurchase agreements, which are held until maturity of the repurchase agreements, are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). Repurchase agreements could involve certain risks in the event of default or insolvency of the counter-party, including possible delays or restrictions upon the ability of the Fund to dispose of its underlying securities.
FOREIGN CURRENCY:Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, expiration of currency forward contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, including investments in securities at the end of the reporting period, as a result of changes in foreign currency exchange rates.
TAXES:As a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the Fund is not subject to income taxes to the extent that it distributes substantially all of its taxable income for its fiscal year. The Schedule of Investments includes information regarding income taxes under the caption “Tax Information”.
DISTRIBUTIONS:The Fund pays quarterly distributions on the Fund’s Common Stock at the annual rate of 7% of the rolling average of the prior four calendar quarter-end NAVs of the Fund’s Common Stock, with the fourth quarter distribution being the greater of 1.75% of the rolling average or the distribution required by IRS regulations. Prior to November 15, 2012, distributions to Preferred Stockholders were accrued daily and paid quarterly. Distributions to Common Stockholders are recorded on ex-dividend date. Distributable capital gains and/or net investment income were first allocated to Preferred Stockholder distributions, with any excess allocable to Common Stockholders. If capital gains and/or net investment income were allocated to both Preferred and Common Stockholders, the tax character of such allocations was proportional. To the extent that distributions are not paid from long-term capital gains, net investment income or net short-term capital gains, they will represent a return of capital. Distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. Permanent book and tax differences relating to stockholder distributions will result in reclassifications within the capital accounts. Undistributed net investment income may include temporary book and tax basis differences, which will reverse in a subsequent period. Any taxable income or gain remaining undistributed at fiscal year end is distributed in the following year.
INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME:Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Non-cash dividend income is recorded at the fair market value of the securities received. Interest income is recorded on an accrual basis. Premium and discounts on debt securities are amortized using the effective yield-to-maturity method. Realized gains and losses from investment transactions are determined on the basis of identified cost for book and tax purposes.
EXPENSES:The Fund incurs direct and indirect expenses. Expenses directly attributable to the Fund are charged to the Fund’s operations, while expenses applicable to more than one of the Royce Funds are allocated equitably. Certain personnel, occupancy costs and other administrative expenses related to the Funds are allocated by Royce & Associates, LLC (“Royce”) under an administration agreement and are included in administrative and office facilities and professional fees. The Fund has adopted a deferred fee agreement that allows the Directors to defer the receipt of all or a portion of directors’ fees otherwise payable. The deferred fees are invested in certain Royce Funds until distributed in accordance with the agreement.2015 Semiannual Report to Stockholders | 41
Royce Micro-Cap Trust
Notes to Financial Statements (unaudited) (continued)
COMPENSATING BALANCE CREDITS:The Fund has an arrangement with its custodian bank, whereby a portion of the custodian’s fee is paid indirectly by credits earned on the Fund’s cash on deposit with the bank. This deposit arrangement is an alternative to purchasing overnight investments. Conversely, the Fund pays interest to the custodian on any cash overdrafts, to the extent they are not offset by credits earned on positive cash balances.
Capital Stock:The Fund issued 686,578 and 3,505,620 shares of Common Stock as reinvestment of distributions for the six months ended June 30, 2015 and year ended December 31, 2014, respectively.
Borrowings:The Fund has entered into a revolving credit agreement (the credit agreement) with BNP Paribas Prime Brokerage Inc. (BNPP). The Fund pays a commitment fee of 0.50% per annum on the unused portion of the credit agreement. The credit agreement has a 360-day rolling term that resets daily; however, if the Fund exceeds certain net asset value triggers, the credit agreement may convert to a 60-day rolling term that resets daily. The Fund is required to pledge portfolio securities as collateral in an amount up to two times the loan balance outstanding and has granted a security interest in the securities pledged to, and in favor of, BNPP as security for the loan balance outstanding. If the Fund fails to meet certain requirements, or maintain other financial covenants required under the credit agreement, the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the credit agreement necessitating the sale of portfolio securities at potentially inopportune times. The credit agreement also permits, subject to certain conditions, BNPP to rehypothecate portfolio securities pledged by the Fund up to the amount of the loan balance outstanding. The Fund continues to receive payments in lieu of dividends and interest on rehypothecated securities. The Fund also has the right under the credit agreement to recall the rehypothecated securities from BNPP on demand. If BNPP fails to deliver the recalled security in a timely manner, the Fund is compensated by BNPP for any fees or losses related to the failed delivery or, in the event a recalled security is not returned by BNPP, the Fund, upon notice to BNPP, may reduce the loan balance outstanding by the amount of the recalled security failed to be returned. The Fund receives a portion of the fees earned by BNPP in connection with the rehypothecation of portfolio securities.As of June 30, 2015, the Fund has outstanding borrowings of $60,000,000. During the six months ended June 30, 2015, the Fund borrowed an average daily balance of $60,000,000 at a weighted average borrowing cost of 1.22%. The maximum amount outstanding during the six months ended June 30, 2015 was $60,000,000. As of June 30, 2015, the aggregate value of rehypothecated securities was $57,832,231. During the six months ended June 30, 2015, the Fund earned $115,684 in fees from rehypothecated securities.
Investment Advisory Agreement:As compensation for its services under the Investment Advisory Agreement, Royce receives a fee comprised of a Basic Fee (“Basic Fee”) and an adjustment to the Basic Fee based on the investment performance of the Fund in relation to the investment record of the Russell 2000.The Basic Fee is a monthly fee equal to 1/12 of 1% (1% on an annualized basis) of the average of the Fund’s month-end net assets applicable to Common Stockholders, plus the liquidation value of outstanding Preferred Stock, for the rolling 36-month period ending with such month (the “performance period”). The Basic Fee for each month is increased or decreased at the rate of 1/12 of .05% for each percentage point that the investment performance of the Fund exceeds, or is exceeded by, the percentage change in the investment record of the Russell 2000 for the performance period by more than two percentage points. The performance period for each such month is a rolling 36-month period ending with such month. The maximum increase or decrease in the Basic Fee for any month may not exceed 1/12 of .5%. Accordingly, for each month, the maximum monthly fee rate as adjusted for performance is 1/12 of 1.5% and is payable if the investment performance of the Fund exceeds the percentage change in the investment record of the Russell 2000 by 12 or more percentage points for the performance period, and the minimum monthly fee rate as adjusted for performance is 1/12 of .5% and is payable if the percentage change in the investment record of the Russell 2000 exceeds the investment performance of the Fund by 12 or more percentage points for the performance period.For the six rolling 36-month periods ended June 2015, the Fund’s investment performance ranged from 1% to 2% below the investment performance of the Russell 2000. Accordingly, the net investment advisory fee consisted of a Basic Fee of $1,922,807 and no adjustment for the performance of the Fund relative to that of the Russell 2000. For the six months ended June 30, 2015, the Fund accrued and paid Royce investment advisory fees totaling $1,922,807.
Purchases and Sales of Investment Securities:For the six months ended June 30, 2015, the costs of purchases and proceeds from sales of investment securities, other than short-term securities, amounted to $67,772,993 and $90,086,737, respectively.42 | 2015 Semiannual Report to Stockholders
Royce Global Value Trust June 30, 2015 (unaudited)
Schedule of Investments Common Stocks – 105.8% SHARES VALUE AUSTRALIA – 1.1%ALS
45,300 $ 204,465Collection House
140,658 242,010Imdex 1
473,700 109,645Medusa Mining 1
82,600 53,215†Platinum Asset Management
37,000 213,534Programmed Maintenance Services
27,400 60,884TFS Corporation
85,000 105,259Webjet
31,300 72,207 Total (Cost $1,299,400) 1,061,219 AUSTRIA – 1.7%Mayr-Melnhof Karton
10,800 1,220,292Semperit AG Holding
11,000 453,744 Total (Cost $1,731,546) 1,674,036 BELGIUM – 0.5%BHF Kleinwort Benson Group 1
55,000 269,180Ion Beam Applications
600 16,335Picanol Group
900 51,573Van de Velde
3,436 197,392 Total (Cost $477,806) 534,480 BERMUDA – 1.0%Lazard Cl. A 2
12,500 703,000†Signet Jewelers
2,300 294,952 Total (Cost $824,194) 997,952 BRAZIL – 3.6%Brasil Brokers Participacoes
225,400 155,868CETIP - Mercados Organizados
140,000 1,534,592MAHLE Metal Leve
50,000 344,151Mills Estruturas e Servicos de Engenharia 1
26,500 57,533T4F Entretenimento 1
112,200 131,720Totvs
73,000 915,699Valid Solucoes
30,000 462,192 Total (Cost $4,273,296) 3,601,755 CANADA – 10.1%†Absolute Software
10,500 75,576Agnico Eagle Mines 2
20,000 567,400AirBoss of America
10,300 183,899Alamos Gold
38,000 215,100†Altus Group
11,000 156,765†Cameco Corporation
24,500 349,860Canyon Services Group
10,900 50,704COM DEV International
27,000 124,732Computer Modelling Group
57,300 580,799†Dundee Corporation Cl. A 1
55,900 561,238†easyhome
8,300 129,584E-L Financial
200 104,989FLYHT Aerospace Solutions 1
140,000 26,341Franco-Nevada Corporation 2, 3
22,700 1,081,655†Genworth MI Canada
75,000 1,969,576†HNZ Group Cl. B
5,700 85,386Horizon North Logistics
41,100 126,689Magellan Aerospace
41,900 572,309Major Drilling Group International
110,500 552,942MTY Food Group
8,800 233,351Pan American Silver 2
63,700 547,183Ritchie Bros. Auctioneers 2
24,300 678,456Sprott 280,600 554,910
†TMX Group 14,000 595,757
Total Energy Services 5,200 63,491 Total (Cost $11,776,509) 10,188,692 CHILE – 0.5%
†Inversiones La Construccion 40,000 448,007 Total (Cost $465,957) 448,007 CHINA – 1.5%
Daphne International Holdings 1,696,500 424,587
Daqo New Energy ADR 1, 2 1,800 42,390
†E-House (China) Holdings ADR 33,600 225,792
Hopefluent Group Holdings 280,000 95,001
Noah Holdings ADR 1, 2 16,700 504,841
Pacific Online 402,700 177,672
Xtep International Holdings 213,000 77,489 Total (Cost $2,280,677) 1,547,772 CYPRUS – 0.5%
Globaltrans Investment GDR 1 112,000 532,000 Total (Cost $834,068) 532,000 DENMARK – 1.6%
Chr Hansen 10,000 487,903
†Coloplast Cl. B 4,500 295,275
SimCorp 8,000 318,594
Zealand Pharma 1 30,200 498,678 Total (Cost $1,496,431) 1,600,450 FINLAND – 1.7%
BasWare 3,900 173,916
Nokian Renkaat 27,000 846,137
Vaisala Cl. A 27,500 720,472 Total (Cost $1,981,889) 1,740,525 FRANCE – 8.7%
aufeminin 1 2,100 57,172
Gaztransport Et Technigaz 16,000 1,012,105
Lectra 8,700 124,150
Manutan International 21,700 1,031,315
Neurones 28,450 473,225
Nexity 18,500 725,990
Paris Orleans 37,000 1,182,002
Prodware 1 10,800 73,928
Societe Internationale de Plantations d’Heveas 1 1,531 58,101
Stallergenes 17,300 1,055,958
†Tarkett 22,500 485,377
†Thermador Groupe 4,900 409,762
Vetoquinol 24,139 1,001,102
Virbac 4,820 1,031,726 Total (Cost $8,897,151) 8,721,913 GERMANY – 4.1%
†Adler Modemaerkte 5,700 65,135
†ADLER Real Estate 1 10,900 156,273
Amadeus Fire 600 53,513
†Bertrandt 5,000 656,368
†Carl Zeiss Meditec 17,500 446,191
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 43
Royce Global Value Trust
Schedule of Investments (continued) SHARES VALUE GERMANY (continued)†CompuGroup Medical
10,000 $ 349,896†Deutz
11,100 63,607†Fielmann
3,500 237,903GFT Technologies
5,800 119,688KUKA
9,000 749,714†KWS Saat
1,000 332,783LPKF Laser & Electronics
15,500 133,057mutares
800 91,864†SQS Software Quality Systems
15,200 147,477†STRATEC Biomedical
5,500 302,935Tomorrow Focus 1
39,600 191,823Hellenic Exchanges - Athens Stock Exchange
28,000 144,841StealthGas 1, 2
17,000 114,750 Total (Cost $286,362) 259,591 HONG KONG – 7.4%Anxin-China Holdings 1, 4
2,500,000 80,629China Metal International Holdings
430,000 139,237First Pacific
180,000 151,634Great Eagle Holdings
203,125 759,929I.T
500,000 188,349Le Saunda Holdings
268,600 129,595Luen Thai Holdings
475,000 103,560Luk Fook Holdings (International)
120,100 354,030Midland Holdings 1
1,400,000 633,938New World Department Store China
4,659,700 1,250,353Oriental Watch Holdings
2,223,000 378,551Pico Far East Holdings
1,053,300 336,989†Stella International Holdings
100,000 238,662Television Broadcasts
81,000 480,156Texwinca Holdings
302,000 320,640Tse Sui Luen Jewellery (International)
215,000 83,209Value Partners Group
1,015,000 1,602,725YGM Trading
169,400 218,974 Total (Cost $8,667,949) 7,451,160 INDIA – 1.0%†Bajaj Finance
6,000 513,317†Kewal Kiran Clothing
6,300 209,835†Motherson Sumi Systems
35,500 288,660 Total (Cost $947,168) 1,011,812 INDONESIA – 0.3%Selamat Sempurna
593,300 205,369Supra Boga Lestari 1
3,945,000 106,521 Total (Cost $366,447) 311,890 IRELAND – 0.2%†Keywords Studios
75,000 197,977 Total (Cost $176,944) 197,977 ISRAEL – 0.3%Fox Wizel
2,900 58,477†Nova Measuring Instruments 1
7,200 90,000Sarine Technologies
80,300 135,935 Total (Cost $267,954) 284,412 ITALY – 2.1%†Azimut Holding
13,000 380,298De’Longhi
49,500 1,134,605†DiaSorin
8,500 388,051†Recordati
10,000 209,703 Total (Cost $1,768,082) 2,112,657 JAPAN – 11.9%C. Uyemura & Co.
7,300 392,483EPS Holdings
74,000 897,904FamilyMart
8,200 377,219Freund Corporation
42,200 509,979Fujimori Kogyo
2,000 60,465GCA Savvian
8,300 103,084†Horiba
8,500 345,876Itoki Corporation
34,300 195,904†Leopalace21 Corporation 1
20,600 126,409†Meitec Corporation
9,500 353,965Milbon
3,100 98,660MISUMI Group
64,800 920,230Namura Shipbuilding
9,600 82,363Nishikawa Rubber
8,200 132,663Nitto Kohki
9,100 206,113Obara Group
3,900 209,683†Pressance Corporation
4,400 147,583Relo Holdings
14,000 1,384,157Santen Pharmaceutical
50,000 708,012Shimano
9,100 1,241,737SPARX Group
66,400 139,435†Square Enix Holdings
16,500 365,229Sun Frontier Fudousan
10,200 82,677T Hasegawa
7,000 101,524Tokai Corporation
4,400 159,448†TOTO
19,000 342,477Trancom
22,000 1,202,598†Trend Micro
11,500 393,717†USS
18,500 334,069YAMADA Consulting Group
6,400 213,621Zuiko Corporation
4,400 151,718 Total (Cost $9,974,254) 11,981,002 MALAYSIA – 0.7%Asia Brands
71,600 33,969CB Industrial Product Holding
1,000,000 530,082Media Prima
199,500 77,199NTPM Holdings
242,300 43,348 Total (Cost $698,050) 684,598 MEXICO – 1.0%Bolsa Mexicana de Valores
250,000 432,639Fresnillo
55,000 599,746 Total (Cost $1,245,701) 1,032,385 NEW ZEALAND – 0.2%Trade Me Group
83,000 193,397 Total (Cost $280,441) 193,397 NORWAY – 2.1%Borregaard
16,300 115,383Ekornes
45,000 545,249
44 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
June 30, 2015 (unaudited)
Schedule of Investments (continued) SHARES VALUE NORWAY (continued)†Kongsberg Automotive 1
143,000 $ 99,401Oslo Bors VPS Holding
8,500 98,655TGS-NOPEC Geophysical
55,000 1,284,429 Total (Cost $2,619,835) 2,143,117 PHILIPPINES – 0.9%Asian Terminals 375,000 106,454
Universal Robina 195,000 838,988 Total (Cost $659,732) 945,442 POLAND – 0.4%
†Warsaw Stock Exchange 33,000 415,484 Total (Cost $459,764) 415,484 SINGAPORE – 1.2%
†Asian Pay Television Trust 150,000 94,666
Hour Glass (The) 858,000 535,115
Parkson Retail Asia 274,300 96,739
†Riverstone Holdings 76,400 95,865
Silverlake Axis 552,000 401,648 Total (Cost $1,046,101) 1,224,033 SOUTH AFRICA – 2.5%
Blue Label Telecoms 390,000 259,337
Cashbuild 17,500 432,969
Coronation Fund Managers 59,000 399,654
JSE 15,000 158,421
Lewis Group 60,000 486,224
Metrofile Holdings 314,100 117,213
PSG Group 36,500 614,884 Total (Cost $1,981,754) 2,468,702 SOUTH KOREA – 0.3%
Eugene Technology 12,036 172,644
Handsome 2,200 70,411
Hankuk Carbon 10,000 62,307
Huvis Corporation 3,900 37,935 Total (Cost $373,452) 343,297 SPAIN – 0.3%
Atento 1, 2 18,000 258,840 Total (Cost $261,557) 258,840 SRI LANKA – 0.1%
Distilleries Company of Sri Lanka 46,100 93,027 Total (Cost $76,313) 93,027 SWEDEN – 0.5%
Bufab Holding 55,000 326,423
Nolato Cl. B 4,400 100,581
Recipharm Cl. B 3,300 61,702 Total (Cost $496,573) 488,706 SWITZERLAND – 5.3%
†Belimo Holding 175 417,402
†Burckhardt Compression Holding 600 227,338
†Burkhalter Holding 2,650 308,947
Forbo Holding 975 1,159,634
†Geberit 800 266,710
†Inficon Holding 1,250 427,162
†Kaba Holding 550 327,370
†LEM Holding 500 384,245
†Partners Group Holding 1,200 358,736
†Straumann Holding 1,000 274,346
†VZ Holding 4,700 1,131,077 Total (Cost $4,979,066) 5,282,967 TAIWAN – 0.8%
†Flytech Technology 35,900 143,114
Kinik Company 48,500 92,427
Lumax International 74,200 132,025
Makalot Industrial 17,959 154,535
Shih Her Technologies 67,800 90,094
Taiwan Paiho 55,800 157,339 Total (Cost $692,309) 769,534 TURKEY – 0.5%
Mardin Cimento Sanayii 300,000 473,490 Total (Cost $752,323) 473,490 UNITED ARAB EMIRATES – 0.7%
Aramex 750,000 710,610 Total (Cost $652,528) 710,610 UNITED KINGDOM – 13.4%
†Abcam 45,000 366,258
Ashmore Group 269,000 1,222,351
†AVEVA Group 16,200 460,213
Brammer 14,000 67,917
†Character Group 11,400 85,173
Clarkson 47,800 2,055,644
Consort Medical 92,500 1,322,600
e2v technologies 125,000 492,980
Elementis 110,000 443,501
Fenner 75,000 244,231
†Fidessa Group 12,500 446,824
Hargreaves Services 11,000 59,024
HellermannTyton Group 55,000 297,108
†ITE Group 200,000 537,367
Jupiter Fund Management 108,000 756,330
Kennedy Wilson Europe Real Estate 25,000 446,235
Latchways 29,000 357,695
Luxfer Holdings ADR 2 4,500 58,500
Mattioli Woods 10,600 85,774
Norcros 543,600 164,420
Pendragon 144,600 86,337
†Polypipe Group 95,700 408,251
Rotork 214,000 782,112
Senior 80,000 360,759
Spirax-Sarco Engineering 21,989 1,172,289
†Synthomer 40,000 195,841
Trifast 82,700 159,829
†Victrex 12,500 379,064 Total (Cost $13,150,143) 13,514,627 UNITED STATES – 14.8%
Bel Fuse Cl. A 2 26,672 551,044
Brooks Automation 2 18,100 207,245
†Century Casinos 1 6,200 39,060
Commercial Metals 2 42,000 675,360
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 45
Royce Global Value Trust June 30, 2015 (unaudited)
Schedule of Investments (continued) SHARES VALUE UNITED STATES (continued)Diebold 2, 3
28,800 $ 1,008,000Diodes 1, 2, 3
20,500 494,255EnerSys 2
11,000 773,190Expeditors International of Washington 2, 3
19,300 889,827Fairchild Semiconductor International 1, 2, 3
24,600 427,548Greif Cl. A 2
13,400 480,390Hallador Energy 2, 3
18,600 155,124Innospec 2
12,457 561,063†INTL FCStone 1
21,800 724,632KBR 2, 3
59,200 1,153,216†MSC Industrial Direct Cl. A
7,200 502,344Nanometrics 1, 2, 3
44,500 717,340†National Instruments
17,900 527,334Quaker Chemical 2, 3
8,400 746,256Rogers Corporation 1, 2
6,000 396,840Schnitzer Steel Industries Cl. A 2
19,100 333,677SEACOR Holdings 1, 2, 3
6,000 425,640Sensient Technologies 2, 3
12,100 826,914Sun Hydraulics 2
15,139 576,947Tecumseh Products 1, 2
84,900 209,703Tennant Company 2
6,200 405,108Valmont Industries
6,200 736,994†Wiley (John) & Sons Cl. A
7,000 380,590 Total (Cost $15,961,671) 14,925,641 TOTAL COMMON STOCKS (Cost $108,999,389) 106,392,030 REPURCHASE AGREEMENT– 3.2% Fixed Income Clearing Corporation, 0.00% dated 6/30/15, due 7/1/15, maturity value
$3,261,000 (collateralized by obligations of various U.S. Government Agencies, 1.875%
due 6/30/20, valued at $3,327,950) (Cost $3,261,000) 3,261,000 TOTAL INVESTMENTS – 109.0% (Cost $112,260,389) 109,653,030 LIABILITIES LESS CASH AND OTHER ASSETS – (9.0)% (9,067,913 ) NET ASSETS – 100.0% $ 100,585,117
†New additions in 2015.1Non-income producing.2All or a portion of these securities were pledged as collateral in connection with the revolving credit agreement at June 30, 2015. Total market value of pledged securities at June 30, 2015, was $15,622,944.3At June 30, 2015, a portion of these securities were rehypothecated in connection with the Fund’s revolving credit agreement in the aggregate amount of $6,502,726.4A security for which market quotations are not readily available represents 0.1% of net assets. This security has been valued at its fair value under procedures approved by the Fund’s Board of Directors. This security is defined as a Level 3 security due to the use of significant unobservable inputs in the determination of fair value. See Notes to Financial Statements.Securities of Global/International Funds are categorized by the country of their headquarters, with the exception of exchange-traded funds.Bold indicates the Fund’s 20 largest equity holdings in terms of June 30, 2015, market value.TAX INFORMATION: The cost of total investments for Federal income tax purposes was $113,433,246. At June 30, 2015, net unrealized depreciation for all securities was $3,780,216, consisting of aggregate gross unrealized appreciation of $8,709,780 and aggregate gross unrealized depreciation of $12,489,996. The primary difference between book and tax basis cost is the timing of the recognition of losses on securities sold.
46 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Royce Global Value Trust June 30, 2015 (unaudited)
Statement of Assets and Liabilities ASSETS: Total investments at value $ 106,392,030 Repurchase agreements (at cost and value) 3,261,000 Receivable for investments sold 812,885 Receivable for dividends and interest 179,011 Prepaid expenses and other assets 37,663 Total Assets 110,682,589 LIABILITIES: Revolving credit agreement 8,000,000 Payable to custodian for cash and foreign currency overdrawn 286,748 Payable for investments purchased 1,653,109 Payable for investment advisory fee 105,219 Payable for directors’ fees 7,870 Payable for interest expense 548 Accrued expenses 40,810 Deferred capital gains tax 3,168 Total Liabilities 10,097,472 Net Assets $ 100,585,117 ANALYSIS OF NET ASSETS: Paid-in capital - $0.001 par value per share; 10,295,973 shares outstanding (150,000,000 shares authorized) $ 116,575,937 Undistributed net investment income (loss) 595,867 Accumulated net realized gain (loss) on investments and foreign currency (13,978,721 ) Net unrealized appreciation (depreciation) on investments and foreign currency (2,607,966 ) Net Assets (net asset value per share - $9.77) $ 100,585,117 Investments at identified cost $ 108,999,389
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 47
Royce Global Value Trust Six Months Ended June 30, 2015 (unaudited)
Statement of Operations INVESTMENT INCOME: INCOME: Dividends $ 1,761,171 Foreign withholding tax (160,705 ) Rehypothecation income 1,050 Securities lending 247 Total income 1,601,763 EXPENSES: Investment advisory fees 609,914 Custody and transfer agent fees 55,214 Interest expense 45,330 Stockholder reports 42,756 Professional fees 15,091 Directors’ fees 13,050 Administrative and office facilities 6,752 Other expenses 18,487 Total expenses 806,594 Net investment income (loss) 795,169 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: NET REALIZED GAIN (LOSS): Investments (7,445,330 ) Foreign currency transactions (13,297 ) NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): Investments and foreign currency translations 11,962,130 Other assets and liabilities denominated in foreign currency 1,707 Net realized and unrealized gain (loss) on investments and foreign currency 4,505,210 NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS $ 5,300,379
48 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Royce Global Value Trust
Statement of Changes in Net Assets SIX MONTHS ENDED 6/30/15 (UNAUDITED) YEAR ENDED 12/31/14 INVESTMENT OPERATIONS: Net investment income (loss) $ 795,169 $ 1,335,060 Net realized gain (loss) on investments and foreign currency (7,458,627 ) (6,230,541 ) Net change in unrealized appreciation (depreciation) on investments and foreign currency 11,963,837 (1,573,933 ) Net increase (decrease) in net assets from investment operations 5,300,379 (6,469,414 ) DISTRIBUTIONS: Net investment income – (1,533,038 ) Net realized gain on investments and foreign currency – – Total distributions – (1,533,038 ) CAPITAL STOCK TRANSACTIONS: Reinvestment of distributions – 603,492 Total capital stock transactions – 603,492 Net Increase (Decrease) In Net Assets 5,300,379 (7,398,960 ) NET ASSETS: Beginning of period 95,284,738 102,683,698 End of period (including undistributed net investment income (loss) of $595,867 at 6/30/15 and $(199,302) at 12/31/14) $ 100,585,117 $ 95,284,738
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 49
Royce Global Value Trust Six Months Ended June 30, 2015 (unaudited)
Statement of Cash Flows CASH FLOWS FROM OPERATING ACTIVITIES: Net increase (decrease) in net assets from investment operations $ 5,300,379 Adjustments to reconcile net increase (decrease) in net assets from investment operations to net cash used for operating activities:Purchases of long-term investments (39,557,494 )
Proceeds from sales and maturities of long-term investments 34,123,323
Net purchases, sales and maturities of short-term investments (3,261,000 )
Net (increase) decrease in dividends and interest receivable and other assets (60,830 )
Net increase (decrease) in interest expense payable, accrued expenses and other liabilities (12,118 )
Net change in unrealized appreciation (depreciation) on investments (11,962,130 )
Net realized gain on investments and foreign currency 7,458,627 Net cash used for operating activities (7,971,243 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in revolving credit agreement 8,000,000 Net cash provided by financing activities 8,000,000 INCREASE (DECREASE) IN CASH: 28,757 Cash and foreign currency at beginning of period (315,505 ) Cash and foreign currency at end of period $ (286,748 )
50 | 2015 Semiannual Report to Stockholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Royce Global Value Trust
Financial HighlightsThis table is presented to show selected data for a share outstanding throughout each period, and to assist stockholders in evaluating the Fund’s performance for the periods presented.
SIX MONTHS ENDED 6/30/2015 YEAR ENDED PERIOD ENDED (UNAUDITED) 12/31/2014 12/31/20131 Net Asset Value, Beginning of Period $ 9.25 $ 10.05 $ 9.78 INVESTMENT OPERATIONS: Net investment income (loss) 0.08 0.13 (0.00 ) Net realized and unrealized gain (loss) on investments and foreign currency 0.44 (0.77 ) 0.27 Net increase (decrease) in net assets from investment operations 0.52 (0.64 ) 0.27 DISTRIBUTIONS: Net investment income – (0.15 ) – Net realized gain on investments and foreign currency – – – Total distributions – (0.15 ) – CAPITAL STOCK TRANSACTIONS: Effect of reinvestment of distributions by Common Stockholders – (0.01 ) – Total capital stock transactions – (0.01 ) – Net Asset Value, End of Period $ 9.77 $ 9.25 $ 10.05 Market Value, End of Period $ 8.31 $ 8.04 $ 8.89 TOTAL RETURN: 2 Net Asset Value 5.62 %3 (6.23 )% 2.76 %3 Market Value 3.36 %3 (7.86 )% (0.95 )%3 RATIOS BASED ON AVERAGE NET ASSETS: Investment advisory fee expense 1.25 %4 1.25 % 1.25 %4 Other operating expenses 0.40 %4 0.24 % 0.37 %4 Total expenses (net) 1.65 %4 1.49 % 1.62 %4 Expenses excluding interest expense 1.56 %4 1.49 % 1.62 %4 Expenses prior to balance credits 1.65 %4 1.49 % 1.62 %4 Net investment income (loss) 1.63 %4 1.30 % (0.13 )%4 SUPPLEMENTAL DATA: Net Assets End of Period (in thousands) $ 100,585 $ 95,285 $ 102,684 Portfolio Turnover Rate 34 % 43 % 7 % REVOLVING CREDIT AGREEMENT: Asset coverage 1357 % Asset coverage per $1,000 13,573
1 The Fund commenced operations on October 18, 2013. 2The Market Value Total Return is calculated assuming a purchase of Common Stock on the opening of the first business day and a sale on the closing of the last business day of each period. Dividends and distributions are assumed for the purposes of this calculation to be reinvested at prices obtained under the Fund’s Distribution Reinvestment and Cash Purchase Plan. Net Asset Value Total Return is calculated on the same basis, except that the Fund’s net asset value is used on the purchase and sale dates instead of market value.3 Not annualized 4 Annualized
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2015 Semiannual Report to Stockholders | 51
Royce Global Value Trust
Notes to Financial Statements (unaudited)
Summary of Significant Accounting PoliciesRoyce Global Value Trust, Inc. (the “Fund”), is a diversified closed-end investment company that was incorporated under the laws of the State of Maryland on February 14, 2011. The Fund commenced operations on October 18, 2013.The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 “Financial Services-Investment Companies”.
VALUATION OF INVESTMENTS:Securities are valued as of the close of trading on the New York Stock Exchange (NYSE) (generally 4:00 p.m. Eastern time) on the valuation date. Securities that trade on an exchange, and securities traded on Nasdaq’s Electronic Bulletin Board, are valued at their last reported sales price or Nasdaq official closing price taken from the primary market in which each security trades or, if no sale is reported for such day, at their highest bid price. Other over-the-counter securities for which market quotations are readily available are valued at their highest bid price, except in the case of some bonds and other fixed income securities which may be valued by reference to other securities with comparable ratings, interest rates and maturities, using established independent pricing services. The Fund values its non-U.S. dollar denominated securities in U.S. dollars daily at the prevailing foreign currency exchange rates as quoted by a major bank. Securities for which market quotations are not readily available are valued at their fair value in accordance with the provisions of the 1940 Act, under procedures approved by the Fund’s Board of Directors, and are reported as Level 3 securities. As a general principle, the fair value of a security is the amount which the Fund might reasonably expect to receive for the security upon its current sale. However, in light of the judgment involved in fair valuations, there can be no assurance that a fair value assigned to a particular security will be the amount which the Fund might be able to receive upon its current sale. In addition, if, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and may make the closing price unreliable, the Fund may fair value the security. The Fund uses an independent pricing service to provide fair value estimates for relevant non-U.S. equity securities on days when the U.S. market volatility exceeds a certain threshold. This pricing service uses proprietary correlations it has developed between the movement of prices of non-U.S. equity securities and indices of U.S.-traded securities, futures contracts and other indications to estimate the fair value of relevant non-U.S. securities. When fair value pricing is employed, the prices of securities used by the Fund may differ from quoted or published prices for the same security. Investments in money market funds are valued at net asset value per share.Various inputs are used in determining the value of the Fund’s investments, as noted above. These inputs are summarized in the three broad levels below:Level 1 –quoted prices in active markets for identical securities.Level 2 –other significant observable inputs (including quoted prices for similar securities, foreign securities that may be fair valued and repurchase agreements). The table below includes all Level 2 securities. Any Level 2 securities with values based on quoted prices for similar securities would be noted in the Schedule of Investments.Level 3 –significant unobservable inputs (including last trade price before trading was suspended, or at a discount thereto for lack of marketability or otherwise, market price information regarding other securities, information received from the company and/or published documents, including SEC filings and financial statements, or other publicly available information).The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.The following is a summary of the inputs used to value the Fund’s investments as of June 30, 2015. For a detailed breakout of common stocks by country, please refer to the Schedule of Investments.
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Common Stocks $106,311,401 $ – $80,629 $106,392,030 Cash Equivalents – 3,261,000 – 3,261,000
For the six months ended June 30, 2015, certain securities have transferred in and out of Level 1, Level 2 and Level 3 measurements. The Fund recognizes transfers between levels as of the end of the reporting period. At June 30, 2015, securities valued at $58,121,457 were transferred from Level 2 to Level 1 and securities valued at $80,629 were transferred from Level 2 to Level 3 within the fair value hierarchy.52 | 2015 Semiannual Report to Stockholders
Royce Global Value Trust
Notes to Financial Statements (unaudited) (continued)
VALUATION OF INVESTMENTS (continued):
Level 3 Reconciliation:
UNREALIZED BALANCE AS OF 12/31/14 TRANSFERS IN GAIN (LOSS)1 BALANCE AS OF 6/30/15 Common Stocks $ – $ 80,629 $ – $ 80,629 1The net change in unrealized appreciation (depreciation) is included in the accompanying Statement of Operations. Change in unrealized appreciation (depreciation) includes net unrealized appreciation (depreciation) resulting from changes in investment values during the reporting period and the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized. Net realized gain (loss) from investments and foreign currency transactions is included in the accompanying Statement of Operations.
REPURCHASE AGREEMENTS:The Fund may enter into repurchase agreements with institutions that the Fund’s investment adviser has determined are creditworthy. The Fund restricts repurchase agreements to maturities of no more than seven days. Securities pledged as collateral for repurchase agreements, which are held until maturity of the repurchase agreements, are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). Repurchase agreements could involve certain risks in the event of default or insolvency of the counter-party, including possible delays or restrictions upon the ability of the Fund to dispose of its underlying securities.
FOREIGN CURRENCY:Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, expiration of currency forward contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, including investments in securities at the end of the reporting period, as a result of changes in foreign currency exchange rates.
SECURITIES LENDING:The Fund loans securities through a lending agent to qualified institutional investors for the purpose of realizing additional income. Collateral for the Fund on all securities loaned is accepted in cash and cash equivalents and invested temporarily by the custodian. The collateral maintained is at least 100% of the current market value of the loaned securities. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. The Fund retains the risk of any loss on the securities on loan as well as incurring the potential loss on investments purchased with cash collateral received for securities lending. The Fund’s securities lending income consists of the income earned on investing cash collateral, plus any premium payments received for lending certain securities, less any rebates paid to borrowers and lending agent fees associated with the loan. The lending agent is not affiliated with Royce.
DISTRIBUTIONS AND TAXES:As a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the Fund is not subject to income taxes to the extent that it distributes substantially all of its taxable income for its fiscal year. The Schedule of Investments includes information regarding income taxes under the caption “Tax Information”.The Fund pays any dividends and capital gain distributions annually in December. Because federal income tax regulations differ from generally accepted accounting principles, income and capital gain distributions determined in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Accordingly, the character of distributions and composition of net assets for tax purposes differ from those reflected in the accompanying financial statements.
CAPITAL GAINS TAXES:The Fund is subject to a tax imposed on short-term capital gains on securities of issuers domiciled in certain countries. The Fund records an estimated deferred tax liability for these securities that have been held for less than one year. This amount, if any, is reported as deferred capital gains tax in the accompanying Statement of Assets and Liabilities, assuming those positions were disposed of at the end of the period, and accounted for as a reduction in the market value of the security.
INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME:Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Non-cash dividend income is recorded at the fair market value of the securities received. Interest income is recorded on an accrual basis. Premium and discounts on debt securities are amortized using the effective yield-to-maturity method. Realized gains and losses from investment transactions are determined on the basis of identified cost for book and tax purposes.
2015 Semiannual Report to Stockholders | 53
Royce Global Value Trust
Notes to Financial Statements (unaudited) (continued)
EXPENSES:The Fund incurs direct and indirect expenses. Expenses directly attributable to the Fund are charged to the Fund’s operations, while expenses applicable to more than one of the Royce Funds are allocated equitably. Certain personnel, occupancy costs and other administrative expenses related to the Funds are allocated by Royce & Associates, LLC (“Royce”) under an administration agreement and are included in administrative and office facilities and professional fees.
COMPENSATING BALANCE CREDITS:The Fund has an arrangement with its custodian bank, whereby a portion of the custodian’s fee is paid indirectly by credits earned on the Fund’s cash on deposit with the bank. This deposit arrangement is an alternative to purchasing overnight investments. Conversely, the Fund pays interest to the custodian on any cash overdrafts, to the extent they are not offset by credits earned on positive cash balances.
Capital Stock:The Fund issued 75,721 shares of Common Stock as reinvestment of distributions for the year ended December 31, 2014.
Borrowings:The Fund has entered into a revolving credit agreement (the credit agreement) with BNP Paribas Prime Brokerage Inc. (BNPP). The Fund pays a commitment fee of 0.50% per annum on the unused portion of the credit agreement. The credit agreement has a 360-day rolling term that resets daily; however, if the Fund exceeds certain net asset value triggers, the credit agreement may convert to a 60-day rolling term that resets daily. The Fund is required to pledge portfolio securities as collateral in an amount up to two times the loan balance outstanding and has granted a security interest in the securities pledged to, and in favor of, BNPP as security for the loan balance outstanding. If the Fund fails to meet certain requirements, or maintain other financial covenants required under the credit agreement, the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the credit agreement necessitating the sale of portfolio securities at potentially inopportune times. The credit agreement also permits, subject to certain conditions, BNPP to rehypothecate portfolio securities pledged by the Fund up to the amount of the loan balance outstanding. The Fund continues to receive payments in lieu of dividends and interest on rehypothecated securities. The Fund also has the right under the credit agreement to recall the rehypothecated securities from BNPP on demand. If BNPP fails to deliver the recalled security in a timely manner, the Fund is compensated by BNPP for any fees or losses related to the failed delivery or, in the event a recalled security is not returned by BNPP, the Fund, upon notice to BNPP, may reduce the loan balance outstanding by the amount of the recalled security failed to be returned. The Fund receives a portion of the fees earned by BNPP in connection with the rehypothecation of portfolio securities.As of June 30, 2015, the Fund has outstanding borrowings of $8,000,000. During the six months ended June 30, 2015, the Fund borrowed an average daily balance of $7,381,215 at a weighted average borrowing cost of 1.22%. The maximum amount outstanding during the six months ended June 30, 2015 was $8,000,000. As of June 30, 2015, the aggregate value of rehypothecated securities was $6,502,726. During the six months ended June 30, 2015, the Fund earned $1,050 in fees from rehypothecated securities.
Investment Advisory Agreement:The Investment Advisory Agreement between Royce and the Fund provides for fees to be paid at an annual rate of 1.25% of the Fund’s average daily net assets. For the six months ended June 30, 2015, the Fund accrued and paid Royce investment advisory fees totaling $609,914.
Purchases and Sales of Investment Securities:For the six months ended June 30, 2015, the costs of purchases and proceeds from sales of investment securities, other than short-term securities, amounted to $41,210,604 and $34,808,867, respectively.54 | 2015 Semiannual Report to Stockholders
Directors and Officers
All Directors and Officers may be reached c/o The Royce Funds, 745 Fifth Avenue, New York, NY 10151
Charles M. Royce, Director1 Age: 75 | Number of Funds Overseen: 27 | Tenure: Since 1982 Non-Royce Directorships: Director of TICC Capital Corp. Principal Occupation(s) During Past Five Years: Chief Executive Officer and a Member of the Board of Managers of Royce & Associates, LLC (“Royce”), the Trust’s investment adviser. Christopher D. Clark, Trustee1, President Age: 50 | Number of Funds Overseen: 27 | Tenure: Since 2014 Principal Occupation(s) During Past Five Years: President (since July 2014), Co-Chief Investment Officer (since January 2014), Managing Director and, since June 2015, a Member of the Board of Managers of Royce having been employed by Royce since May 2007. Patricia W. Chadwick, Director Age: 66 | Number of Funds Overseen: 27 | Tenure: Since 2009 Non-Royce Directorships: Trustee of ING Mutual Funds and Director of Wisconsin Energy Corp. Principal Occupation(s) During Past 5 Years: Consultant and President of Ravengate Partners LLC (since 2000). Richard M. Galkin, Director Age: 77 | Number of Funds Overseen: 27 | Tenure: Since 1982 Non-Royce Directorships: None Principal Occupation(s) During Past Five Years: Private investor. Mr. Galkin’s prior business experience includes having served as President of Richard M. Galkin Associates, Inc., telecommunications consultants, President of Manhattan Cable Television (a subsidiary of Time, Inc.), President of Haverhills Inc. (another Time, Inc. subsidiary), President of Rhode Island Cable Television, and Senior Vice President of Satellite Television Corp. (a subsidiary of Comsat). Stephen L. Isaacs, Director Age: 75 | Number of Funds Overseen: 27 | Tenure: Since 1989 Non-Royce Directorships: None Principal Occupation(s) During Past Five Years: Attorney and President of Health Policy Associates, Inc., consultants. Mr. Isaacs’s prior business experience includes having served as President of the Center for Health and Social Policy (from 1996 to 2012); Director of Columbia University Development Law and Policy Program and Professor at Columbia University (until August 1996). Arthur S. Mehlman, Director Age: 73 | Number of Funds Overseen: 45 | Tenure: Since 2004 Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 18 Legg Mason Funds. Principal Occupation(s) During Past Five Years: Director of The League for People with Disabilities, Inc.; Director of University of Maryland Foundation (non-profits). Formerly: Director of Municipal Mortgage & Equity, LLC (from October 2004 to April 1, 2011); Director of University of Maryland College Park Foundation (non-profit) (from 1998 to 2005); Partner, KPMG LLP (international accounting firm) (from 1972 to 2002); Director of Maryland Business Roundtable for Education (from July 1984 to June 2002). David L. Meister, Director Age: 75 | Number of Funds Overseen: 27 | Tenure: Since 1982 Non-Royce Directorships: None Principal Occupation(s) During Past Five Years: Consultant. Chairman and Chief Executive Officer of The Tennis Channel (from June 2000 to March 2005). Mr. Meister’s prior business experience includes having served as Chief Executive Officer of Seniorlife.com, a consultant to the communications industry, President of Financial News Network, Senior Vice President of HBO, President of Time-Life Films, and Head of Broadcasting for Major League Baseball. G. Peter O’Brien, Director Age: 69 | Number of Funds Overseen: 45 | Tenure: Since 2001 Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 18 Legg Mason Funds; Director of TICC Capital Corp. Principal Occupation(s) During Past Five Years: Trustee Emeritus of Colgate University (since 2005); Board Member of Hill House, Inc. (since 1999); Formerly: Trustee of Colgate University (from 1996 to 2005), President of Hill House, Inc. (from 2001 to 2005) and Managing Director/Equity Capital Markets Group of Merrill Lynch & Co. (from 1971 to 1999). Michael K. Shields, Director Age: 57 | Number of Funds Overseen: 27 | Tenure: Since 2015 Principal Occupation(s) During Past Five Years: President and Chief Executive Officer of Piedmont Trust Company, a private North Carolina trust company (since May 2012). Mr. Shields’s prior business experience includes owning Shields Advisors, an investment consulting firm (from April 2010 to June 2012). Francis D. Gannon, Vice President Age: 47 | Tenure: Since 2014 Principal Occupation(s) During Past Five Years: Co-Chief Investment Officer (since January 2014) and Managing Director of Royce, having been employed by Royce since September 2006. Daniel A. O’Byrne, Vice President Age: 53 | Tenure: Since 1994 Principal Occupation(s) During Past Five Years: Principal and Vice President of Royce, having been employed by Royce since October 1986. Peter K. Hoglund, Treasurer Age: 49 | Tenure: Since 2015 Principal Occupation(s) During Past Five Years: Principal, Chief Financial Officer, and Chief Administrative Officer of Royce, having been employed by Royce since December 2014. Prior to joining Royce, Mr. Hoglund spent more than 20 years with Munder Capital Management in Birmingham, MI, serving as Managing Director and Chief Financial Officer and overseeing all financial aspects of the firm. He began his career at Munder as a portfolio manager. John E. Denneen, Secretary and Chief Legal Officer Age: 48 | Tenure: 1996-2001 and Since 2002 Principal Occupation(s) During Past Five Years: General Counsel and, since June 2015, a Member of the Board of Managers of Royce; Chief Legal and Compliance Officer and Secretary of Royce; Secretary and Chief Legal Officer of The Royce Funds. Lisa Curcio, Chief Compliance Officer Age: 55 | Tenure: Since 2004 Principal Occupation(s) During Past Five Years: Chief Compliance Officer of The Royce Funds (since October 2004) and Compliance Officer of Royce (since June 2004).
1 Interested Director.Director will hold office until their successors have been duly elected and qualified or until their earlier resignation or removal.2015 Semiannual Report to Stockholders | 55
Board Approval of Investment Advisory Agreements
At meetings held on June 3-4, 2015, the Funds’ respective Boards of Directors, including all of the non-interested directors, approved the continuance of the Investment Advisory Agreements between Royce & Associates, LLC (“R&A”) and each of Royce Value Trust, Inc., Royce Micro-Cap Trust, Inc., and Royce Global Value Trust, Inc. (each, a “Fund” and collectively, the “Funds”). In reaching these decisions, each Board reviewed the materials provided by R&A, which included, among other things, information prepared internally by R&A and independently by Morningstar Associates, LLC (“Morningstar”) containing detailed expense ratio and investment performance comparisons for the Funds with other funds in their respective “peer groups”, information regarding the past performance of the Funds and other registered investment companies managed by R&A and a memorandum outlining the legal duties of each Board prepared by independent counsel to the non-interested directors. R&A also provided the directors with an analysis of its profitability with respect to providing investment advisory services to each of the Funds. In addition, each Board took into account information furnished throughout the year at regular Board meetings, including reports on investment performance, stockholder services, regulatory compliance, brokerage commissions and research, and brokerage and execution products and services provided to the Funds. Each Board also considered other matters it deemed important to the approval process, such as allocation of Fund brokerage commissions, “soft dollar” research services R&A receives and other direct and indirect benefits to R&A and its affiliates, from their relationship with the relevant Fund. The directors also met throughout the year with investment advisory personnel from R&A. Each Board, in its deliberations, recognized that, for many of the Funds’ stockholders, the decision to purchase Fund shares included a decision to select R&A as the investment adviser and that there was a strong association in the minds of Fund stockholders between R&A and each Fund. In considering factors relating to the approval of the continuance of the Investment Advisory Agreements, the non-interested directors received assistance and advice from, and met separately with, their independent counsel. While the Investment Advisory Agreements were considered at the same Board meetings, the Boards dealt with each agreement separately. Among other factors, the directors considered the following:
The nature, extent and quality of services provided by R&A: Each Board considered the following factors to be of fundamental importance to its consideration of whether to approve the continuance of the relevant Fund’s Investment Advisory Agreement: (i) R&A’s more than 40 years of value investing experience and track record; (ii) the history of long-tenured R&A portfolio managers managing the Funds; (iii) R&A’s focus on mid-cap, small-cap and micro-cap value investing; (iv) the consistency of R&A’s approach to managing the Funds and open-end mutual funds over more than 40 years; (v) the integrity and high ethical standards adhered to at R&A; (vi) R&A’s specialized experience in the area of trading small- and micro-cap securities; (vii) R&A’s historical ability to attract and retain portfolio management talent and (viii) R&A’s focus on stockholder interests as exemplified by expansive stockholder reporting and communications. Each Board reviewed the services that R&A provides to each Fund, including, but not limited to, managing each Fund’s investments in accordance with the stated policies of each Fund. Each Board considered the fact that R&A provided certain administrative services to the Funds at cost pursuant to the Administration Agreement between the Funds and R&A. Each Board determined that the services to be provided to each Fund by R&A would be the same as those that it previously provided to the relevant Fund. The Boards also took into consideration the histories, reputations and backgrounds of R&A’s portfolio managers for the Funds, finding that these would likely have an impact on the continued success of the Funds. Lastly, each Board noted R&A’s ability to attract and retain qualified and experienced personnel. The directors concluded that the investment advisory services provided by R&A to each Fund compared favorably to services provided by R&A to other R&A client accounts, including other funds, in both nature and quality, and that the scope of services provided by R&A would continue to be suitable for the Funds.Investment performance of the Funds and R&A: In light of R&A’s risk-averse approach to investing, each Board believes that risk-adjusted performance continues to be the most appropriate measure of each Fund’s investment performance. One measure of risk-adjusted performance the Boards use in their review of the Funds’ performance is the Sharpe Ratio. The Sharpe Ratio is a risk-adjusted measure of performance developed by Nobel Laureate William Sharpe. It is calculated by dividing a fund’s annualized excess returns by its annualized standard deviation to determine reward per unit of risk. The higher the Sharpe Ratio, the better a fund’s historical risk-adjusted performance. The Boards attach primary importance to risk-adjusted performance over relatively long periods of time, typically 3 to 10 years. It was noted, however, that Royce Global Value Trust, Inc. (“RGT”) only commenced operations in October 2013. Using Morningstar data, the Sharpe Ratio for Royce Value Trust, Inc. (“RVT”) placed in the 4th quartile within the Small Blend category assigned by Morningstar for the 3-year, 5-year, and 10-year periods ended December 31, 2014 while the Sharpe Ratio for Royce Micro-Cap Trust, Inc. (“RMT”) placed in the 3rd quartile within the same Morningstar category for those same periods. It was noted that each of RVT and RMT focuses on high quality companies (e.g., those with solid balance sheets, low leverage, the ability to generate and effectively allocate free cash flow, and strong returns on invested capital), which hurt their relative performance during the recent market period that has been marked by historically low interest rates and U.S. Federal Reserve market intervention. In addition, the past use of leverage by each of RVT and RMT through preferred stock created higher volatility and worse down market performance. The Sharpe Ratio for RGT placed in the third quartile within the Foreign Small/Mid Value category assigned by Morningstar for the 1-year period ended December 31, 2014. The Board noted the inherent limitations of a one-year Sharpe Ratio in evaluating RGT’s investment performance.
In addition to each Fund’s risk–adjusted performance, each Board also reviewed and considered each Fund’s absolute total returns, down market performance, and long-term performance records for periods of 10 years and longer for RVT and RMT. Each Board also considered it important to look beyond the current snapshot of performance as of December 31, 2014 and therefore examined extended performance histories for each Fund using monthly rolling average return periods through March 31, 2015.
Each Board noted that R&A manages a number of funds that invest in micro-cap, small-cap, and mid-cap issuers, many of which had outperformed their benchmark indexes and their competitors during preceding periods. Although each Board recognized that past performance is not necessarily an indicator of future results, it found that R&A had the necessary qualifications, experience and track record in managing micro-cap, small-cap, and mid-cap securities to manage the relevant Fund. The directors determined that R&A continued to be an appropriate investment adviser for the Funds and concluded that each Fund’s performance supported the renewal of its Investment Advisory Agreement.
Cost of the services provided and profits realized by R&A from its relationship with the Funds: Each Board considered the cost of the services provided by R&A and profits realized by R&A from its relationship with each Fund. As part of the analysis, each Board
56 | 2015 Semiannual Report to Stockholders
Board Approval of Investment Advisory Agreements (continued)
discussed with R&A its methodology in allocating its costs to each Fund and concluded that its allocations were reasonable. Each Board concluded that R&A’s profits were reasonable in relation to the nature and quality of services provided.
The extent to which economies of scale would be realized as the Funds grow and whether fee levels would reflect such economies of scale: Each Board considered whether there have been economies of scale in respect of the management of each Fund, whether each Fund has appropriately benefited from any economies of scale and whether there is potential for realization of any further economies of scale. Each Board noted the time and effort involved in managing portfolios of micro-, small- and mid-cap stocks and that they did not involve the same efficiencies as do portfolios of large-cap stocks. Each Board concluded that the current fee structure for each Fund was reasonable, that stockholders sufficiently participated in economies of scale and that no changes were currently necessary.
Comparison of services to be rendered and fees to be paid to those under other investment advisory contracts, such as contracts of the same and other investment advisers or other clients: Each Board reviewed the investment advisory fee paid by each Fund and compared both the services to be rendered and the fees to be paid under the Investment Advisory Agreements to other contracts of R&A and to contracts of other investment advisers to registered investment companies investing in small- and micro-cap stocks, as provided by Morningstar. In the case of RVT, its Board noted that it had a 1.00% basic fee that is subject to adjustment up or down (up to 0.50% in either direction) based on its performance versus the S&P 600 SmallCap Index over a rolling period of 60 months. The fee is charged on average net assets over that rolling period. As a result, in a rising market, the fee will be smaller than a fee calculated on the current year’s average net assets, and vice versa. The Board determined that the performance adjustment feature continued to serve as an appropriate incentive to R&A to manage RVT for the benefit of its long-term common stockholders. The Board also noted that the fee arrangement, which also includes a provision for no fee in periods where RVT’s trailing three-year performance is negative, requires R&A to measure RVT’s performance monthly against the S&P 600, an unmanaged index. Instead of receiving a set fee regardless of its performance, R&A is penalized for poor performance. The Board noted that RVT’s net expense ratio placed it in the 1st percentile within its Morningstar peer group for 2014. In the case of RMT, the Board noted that it also had a 1.00% basic fee subject to adjustment up or down based on its performance versus the Russell 2000 Index over a rolling 36 month period. The fee is charged on average net assets over that rolling period. As a result, in a rising market, the fee will be smaller than a fee calculated on the current year’s average net assets, and vice versa. The Board determined that the performance adjustment feature continued to serve as an incentive to R&A to manage RMT for the benefit of its long-term common stockholders. The Board noted that RMT’s net expense ratio placed it in the 1st quartile when compared against its Morningstar peer group for 2014. Finally, in the case of RGT, the Board noted that its net expense ratio based on average net assets fell within the 75th percentile of its Morningstar-assigned open-end peer group, 15 basis points above the Morningstar peer group median.
Each Board also noted that R&A manages the relevant Fund in an active fashion. The industry accepted metric for measuring how actively an equity portfolio is managed is called “active share.” In particular, active share measures how much the holdings of an equity portfolio differ from the holdings of its appropriate passive benchmark index. At the extremes, a portfolio with no holdings in common with the benchmark would have 100% active share, while a portfolio that is identical to the benchmark would have 0% active share. R&A presented a chart to the Boards which demonstrated that funds with high active share scores had higher expense ratios than funds with lower active share scores due to the resources required for the active management of those funds.
Each Board also considered fees charged by R&A to institutional and other clients and noted that, given the greater levels of services that R&A provides to registered investment companies such as the Funds as compared to other accounts, the base investment advisory fee for RVT and RMT and the advisory fee for RGT compared favorably to the investment advisory fees charged to those other accounts.
It was noted that no single factor was cited as determinative to the decision of the directors. Rather, after weighing all of the considerations and conclusions discussed above, each entire Board, including all of the non-interested directors, approved the continuation of the existing Investment Advisory Agreement, concluding that a contract continuation on the existing terms was in the best interest of the stockholders of each Fund and that each investment advisory fee rate was reasonable in relation to the services provided.2015 Semiannual Report to Stockholders | 57
Notes to Performance and Other Important Information
The thoughts expressed in this Review and Report concerning recent market movements and future prospects for small company stocks are solely the opinion of Royce at June 30, 2015, and, of course, historical market trends are not necessarily indicative of future market movements. Statements regarding the future prospects for particular securities held in the Funds’ portfolios and Royce’s investment intentions with respect to those securities reflect Royce’s opinions as of June 30, 2015 and are subject to change at any time without notice. There can be no assurance that securities mentioned in this Review and Report will be included in any Royce-managed portfolio in the future. Investments in securities of micro-cap, small-cap and/or mid-cap companies may involve considerably more risk than investments in securities of larger-cap companies. All publicly released material information is always disclosed by the Funds on the website at www.roycefunds.com.
Sector weightings are determined using the Global Industry Classification Standard (“GICS”). GICS was developed by, and is the exclusive property of, Standard & Poor’s Financial Services LLC (“S&P”) and MSCI Inc. (“MSCI”). GICS is the trademark of S&P and MSCI. “Global Industry Classification Standard (GICS)” and “GICS Direct” are service marks of S&P and MSCI.
All indexes referred to are unmanaged and capitalization weighted. Each index’s returns include net reinvested dividends and/or interest income. Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. The Russell 2000 Index is an index of domestic small-cap stocks. It measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 Index. The Russell Microcap Index includes 1,000 of the smallest securities in the Russell 2000 Index along with the next smallest eligible securities as determined by Russell. The Russell 1000 Index is an index of domestic large-cap stocks. It measures the performance of the 1,000 largest publicly traded companies in the Russell 3000 Index. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. It includes approximately 800 of the smallest securities in the Russell 1000 Index. The Russell Global Small Cap Index is an unmanaged, capitalization-weighted index of global small-cap stocks. The Russell Global ex-U.S. Large Cap Index is an index of global large-cap stocks, excluding the United States. The Russell Global ex-U.S. Small Cap Index is an index of global small-cap stocks, excluding the United States. The S&P 500 and SmallCap 600 are indexes of U.S. large- and small-cap stocks, respectively, selected by Standard & Poor’s based on market size, liquidity, and industry grouping, among other factors. The Nasdaq Composite is an index of the more than 3,000 common equities listed on the Nasdaq stock exchange. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index. Returns for the market indexes used in this report were based on information supplied to Royce by Russell Investments.
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 Price-to-Book, or P/B, Ratio is calculated by dividing a company’s share price by its book value per share. The Morningstar Style Map uses proprietary scores of a stock’s value and growth characteristics to determine its placement in one of the five categories listed on the horizontal axis. These characteristics are then compared to those of other stocks within the same market capitalization band. Each is scored from zero to 100 for both value and growth attributes. The value score is subtracted from the growth score to determine the overall style score. For the vertical, market cap axis, Morningstar subdivides into size groups. Giant-cap stocks are defined as those that account for the top 40% of the capitalization of each style zone; large-cap stocks represent the next 30%; mid-cap stocks the next 20%; small-cap stocks the next 7%; micro-cap stocks the smallest 3%. The Royce Funds is a service mark of The Royce Funds. Distributor: Royce Fund Services, Inc.Forward-Looking Statements
• the Funds’ future operating results • the prospects of the Funds’ portfolio companies • the impact of investments that the Funds have made or may make • the dependence of the Funds’ future success on the general economy and its impact on the companies and industries in which the Funds invest, and • the ability of the Funds’ portfolio companies to achieve their objectives.
This material contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve risks and uncertainties, including, among others, statements as to:This Review and Report uses words such as “anticipates,” “believes,” “expects,” “future,” “intends,” and similar expressions to identify forward-looking statements. Actual results may differ materially from those projected in the forward-looking statements for any reason.
The Royce Funds have based the forward-looking statements included in this Review and Report on information available to us on the date of the report, and we assume no obligation to update any such forward-looking statements. Although The Royce Funds undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make through future stockholder communications or reports.Authorized Share Transactions
Royce Value Trust, Royce Micro-Cap Trust, and Royce Global Value Trust may each repurchase up to 5% of the issued and outstanding shares of its respective common stock during the year ending December 31, 2015. Any such repurchases would take place at then prevailing prices in the open market or in other transactions. Common stock repurchases would be effected at a price per share that is less than the share’s then current net asset value.
Royce Value Trust, Royce Micro-Cap Trust, and Royce Global Value Trust are also authorized to offer their common stockholders an opportunity to subscribe for additional shares of their common stock through rights offerings at a price per share that may be less than the share’s then current net asset value. The timing and terms of any such offerings are within each Board’s discretion.Annual Certifications
As required, the Funds have submitted to the New York Stock Exchange (“NYSE”) for Royce Value Trust, Royce Micro-Cap Trust, and Royce Global Value Trust the annual certification of the Funds’ Chief Executive Officer that he is not aware of any violation of the NYSE’s listing standards. The Funds also have included the certification of the Funds’ Chief Executive Officer and Chief Financial Officer required by section 302 of the Sarbanes-Oxley Act of 2002 as exhibits to the Funds’ form N-CSR for the period ended December 31, 2014, filed with the Securities and Exchange Commission.58 | 2015 Semiannual Report to Stockholders
Notes to Performance and Other Important Information (continued)
Proxy Voting
A copy of the policies and procedures that The Royce Funds use to determine how to vote proxies relating to portfolio securities and information regarding how each of The Royce Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available, without charge, on The Royce Funds’ website at www.roycefunds.com, by calling (800) 221-4268 (toll-free) and on the website of the Securities and Exchange Commission (“SEC”), at www.sec.gov.
Form N-Q Filing
The Funds file their complete schedules of investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at www.sec.gov. The Royce Funds’ holdings are also on the Funds’ website approximately 15 to 20 days after each calendar quarter end and remain available until the next quarter’s holdings are posted. The Funds’ Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. To find out more about this public service, call the SEC at (800) 732-0330. The Funds’ complete schedules of investments are updated quarterly, and are available at www.roycefunds.com.2015 Semiannual Report to Stockholders | 59
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About The Royce Funds Contact Us
Wealth of ExperienceGENERAL INFORMATION
With approximately $27 billion in total assets under management, Royce & Associates is committed to the same investment principles that have served us well for more than 40 years. Chuck Royce, our Chief Executive Officer, enjoys one of the longest tenures of any active mutual fund manager. Royce’s investment staff also includes 23 portfolio managers and analysts and eight traders.
General Royce Funds information including
an overview of our firm and Funds
(800) 221-4268Multiple Funds, Common FocusCOMPUTERSHARE
Our goal is to offer both individual and institutional investors the best available micro-cap, small-cap, and/or mid-cap portfolios. We have chosen to concentrate on smaller-company investing by providing investors with a range of funds that take full advantage of this large and diverse sector.
Transfer Agent and Registrar
Speak with a representative about:
• Your account, transactions, and forms
(800) 426-5523Consistent DisciplineFINANCIAL ADVISORS AND BROKER-DEALERS
Our approach emphasizes paying close attention to risk and maintaining the same discipline, regardless of market movements and trends. The price we pay for a security must be below our appraisal of its current worth. This requires a thorough analysis of the financial and business dynamics of an enterprise, as though we were purchasing the entire company.
Speak with your regional Royce contact regarding:
• Information about our firm, strategies, and Funds
• Fund Materials
(800) 337-6923Co-Ownership of Fundsroycefunds.com
It is important that our employees and Stockholders share a common financial goal. Our officers, employees, and their families currently have more than $127 million invested in The Royce Funds and are often among the largest individual Stockholders.
Item 2. Code(s) of Ethics. Not applicable to this semi-annual report.
Item 3. Audit Committee Financial Expert. Not applicable to this semi-annual report.
Item 4. Principal Accountant Fees and Services. Not applicable to this semi-annual report.
Item 5. Audit Committee of Listed Registrants. Not applicable to this semi-annual report.
Item 6. Investments.
(a) See Item 1.(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable to this semi-annual report.
Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable to this semi-annual report.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders. Not applicable.
Item 11. Controls and Procedures.
(a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.
(b) Internal Control over Financial Reporting. There were no significant changes in Registrant’s internal control over financial reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses during the second fiscal quarter of the period covered by this report.
Item 12. Exhibits. Attached hereto.
(a)(1) Not applicable to this semi-annual report.
(a)(2) Separate certifications by the Registrant’s Principal Executive Officer and Principal Financial Officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable
(b) Separate certifications by the Registrant’s Principal Executive Officer and Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ROYCE GLOBAL VALUE TRUST, INC.
BY: /s/ Christopher D. Clark Christopher D. Clark PresidentDate: August 28, 2015
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
ROYCE GLOBAL VALUE TRUST, INC. ROYCE GLOBAL VALUE TRUST, INC. BY: /s/ Christopher D. Clark BY: /s/ Peter K. Hoglund Christopher D. Clark Peter K. Hoglund President Chief Financial Officer Date: August 28, 2015 Date: August 28, 2015
