ROYCE GIFTSHARES FUND
Schedule of Investments at December 31, 1995
COMMON STOCKS - 42.5%
Value
Shares (Note 1)
CONSUMER DURABLES - 9.6%
2,000 * Aldila, Inc. $8,498
500 * Ethan Allen Interiors Inc. 10,188
600 Juno Lighting, Inc. 9,600
900 Justin Industries, Inc. 9,900
1,100 * Lifetime Hoan Corporation 10,175
48,361
FINANCIAL - 2.2%
1,000 + Willis Corroon Group plc 11,070
INDUSTRIAL CYCLICALS - 11.8%
600 P. H. Glatfelter Company 10,275
2,000 Kasler Holdings Co. 13,000
800 Lilly Industries, Inc. Cl. A 10,200
400 The Lincoln Electric Company 9,600
800 * Simpson Manufacturing Co., Inc. 10,800
100 * Tecumseh Products Company Cl. A 5,175
59,050
RETAIL - 6.9%
1,200 * CATHERINES STORES CORPORATION 9,900
1,000 * The Dress Barn, Inc. 9,875
400 Family Dollar Stores, Inc. 5,500
700 * Mikasa, Inc. 9,450
34,725
SERVICES - 9.2%
300 Arnold Industries, Inc. 5,213
500 Jenny Craig, Inc. 4,938
1,700 Frozen Food Express Industries, Inc. 14,875
400 Jackpot Enterprises, Inc. 4,650
200 * Marshall Industries 6,425
700 Sotheby's Holdings, Inc. Cl. A 9,975
46,076
TECHNOLOGY - 2.8%
300 * Exar Corporation 4,425
700 Scitex Corporation Limited 9,538
13,963
The accompanying notes are an integral part of the financial statements.
<PAGE>
TOTAL INVESTMENTS - 42.5%
(Cost $212,406) 213,245
CASH AND OTHER ASSETS
LESS LIABILITIES - 57.5% 288,594
NET ASSETS -1 00.0% $501,839
*Non-income producing.
+American Depository Receipt.
Income Tax Information - The cost for federal income tax purposes was
$212,406. At December 31, net unrealized apprecation for all securities
amounted to $839, consisting of aggregate gross unrealized appreciation
of $2,976 and aggregate gross unrealized depreciation of $2,137.
The accompanying notes are an integral part of the financial statements.
<PAGE>
ROYCE GIFTSHARES FUND
Statement of Assets and Liabilities at December 31, 1995
ASSETS:
Investments at value (identified cost $212,406) $213,245
Cash 501,000
Deferred organization costs 20,000
Receivable for dividends and interest 48
TOTAL ASSETS 734,293
LIABILITIES:
Payable for investments purchased 212,406
Organizational costs payable 20,000
Accrued expenses 48
TOTAL LIABILITIES 232,454
NET ASSETS $501,839
ANALYSIS OF NET ASSETS:
Net unrealized appreciation on investments $839
Shares of beneficial interest 100
Additional paid-in capital 500,900
NET ASSETS $501,839
PRICING OF SHARES:
Net asset value, offering and redemption price per share
($501,839 / 100,200 shares outstanding) $5.01
STATEMENT OF CHANGES IN NET ASSETS
For the period
December 27,1995
through
From Investment Activities: December 31,1995
Net unrealized appreciation on investments $839
Increase in net assets resulting from operations 839
Dividends and Distributions from:
Net investment income --
Net realized gains --
From Capital Share Transactions:
Increase in net assets from capital share transactions 500,000
Increase in Net Assets 500,839
Net Assets:
Beginning of period 1,000
End of period $501,839
The accompanying notes are an integral part of the financial statements.
<PAGE>
ROYCE GIFTSHARES FUND
Statement of Operations for the year ended December 31, 1995
INVESTMENT INCOME:
Income:
Dividend income $48
Expenses:
Investment adviser fees 86
Organizational costs 48
Fees waived by investment adviser (86)
Total Expenses 48
Net Investment Income 0
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net unrealized appreciation on investments 839
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $839
Financial Highlights
This table is presented to show selected data for a share
outstanding throughout the period, and to assist shareholders in
evaluating the Fund's performance.
For the period
December 27,1995
through
December 31,1995
Net Asset Value, Beginning of Period $5.00
Income From Investment Operations:
Net investment income --
Net realized and unrealized gain on investments 0.01
Total from investment operations 0.01
Dividends and Distributions:
Net investment income --
Net realized gain --
--
Net Asset Value, End of Period $5.01
Total Return 0.2%
Ratios/Supplemental Data:
Net Assets, End of Period $501,839
Ratio of Expenses to Average Net Assets (a) 0.70%
Ratio of Net Investment Loss to Average Net Assets 0%
Portfolio Turnover Rate 0%
*Annualized.
(a) Expenses are shown after waivers by the investment adviser.
For the period ended December 31, 1995, the expense ratio
would have been 1.95%.
The accompanying notes are an integral part of the financial statements.
<PAGE>
ROYCE GIFTSHARES FUND
Notes to Financial Statements
1. Summary of Significant Accounting Policies:
Royce GiftShares (the "Fund") is a series of The Royce Fund
(the "Trust"), a diversified open-end management investment company
established as a business trust under the laws of Massachusetts The
Fund, commenced operations on December 27, 1995.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and 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.
a. Valuation of Investments:
Securities listed on an exchange or on the Nasdaq National
Market System are valued on the basis of the last reported sale
prior to the time the valuation is made or, if no sale is reported
for such day, at their bid price for exchange-listed securities and
at the average of their bid and asked prices for Nasdaq securities.
Quotations are taken from the market where the security is
primarily traded. Other over-the-counter securities for which
market quotations are readily available are valued at their bid
price. Securities for which market quotations are not readily
available are valued at their fair value under procedures
established and supervised by the Board of Trustees. Bonds and
other fixed income securities may be valued by reference to other
securities with comparable ratings, interest rates and maturities,
using established independent pricing services.
b. Investment transactions and related investment income:
Investment transactions are accounted for on the trade date
and dividend income is recorded on the ex-dividend date. Interest
income is recorded on the accrual basis. Realized gains and losses
from investment transactions and unrealized appreciation and
depreciation of investments are determined on the basis of
identified cost for book and tax purposes.
c. Taxes:
The Fund intends to qualify as a qualified regulated
investment company under Subchapter M of the Internal Revenue Code
and 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 "Income Tax Information".
<PAGE>
ROYCE GIFTSHARES FUND
Notes to Financial Statements (continued)
d. Distributions to shareholders:
Any dividend and capital gain distributions are recorded on
the ex-dividend date and paid annually in December. These
distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting
principles. Permanent book and tax basis differences relating to
shareholder distributions will result in reclassifications to paid-
in capital and may affect net investment income per share.
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 at fiscal year end is
distributed in the following year.
e. Repurchase agreements:
The Fund may enter into repurchase agreements with respect to
its portfolio securities solely with State Street Bank and Trust
Company ("SSB&T"), the custodian of its assets. The Fund restricts
repurchase agreements to maturities of no more than seven days.
Securities pledged as collateral for repurchase agreements are held
by SSB&T until maturity of the repurchase agreements. Repurchase
agreements could involve certain risks in the event of default or
insolvency of SSB&T, including possible delays or restrictions upon
the ability of the Fund to dispose of the underlying securities.
f. Organizational expenses:
Costs incurred by the Fund in connection with its organization
and initial registration of shares of $20,000 have been deferred
and are being amortized on a straight line basis over a five-year
period from the date of commencement of operations.
2. Investment Adviser:
Under its investment advisory agreement with Quest Advisory
Corp. ("Quest"), Quest voluntarily waived total advisory fees of
$86 for the year ended December 31, 1995. The agreement provides
for fees equal to 1.25% per annum of the Fund's average total net
assets. Such fees are computed daily and are payable monthly to
Quest.
3. Fund Shares:
The Board of Trustees has authority to issue an unlimited
number of shares of beneficial interest of the Fund, with a par
value of $.001. Share transactions were as follows:
For the period
December 27, 1995 through
December 31, 1995
Shares Amount
Sold........ 100,000 $500,000
Issued as reinvested
dividends and
distributions... 0 0
Redeemed........ 0 0
<PAGE>
ROYCE GIFTSHARES FUND
Notes to Financial Statements (continued)
4. Purchases and Sales of Securities:
For the year ended December 31, 1995, the cost of purchases of
portfolio securities, other than short-term securities, amounted to
$212,406.
<PAGE>
ROYCE GIFTSHARES FUND
Report of Independent Accountants
To the Board of Trustees of The Royce Fund and Shareholders of
Royce GiftShares Fund
We have audited the accompanying statement of assets and
liabilities of Royce GiftShares Fund, including the schedule of
investments as of December 31, 1995, the related statement of
operations and changes in net assets, and the financial highlights
for the period from December 27, 1995 (commencement of operations)
to December 31, 1995. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities
owned as of December 31, 1995, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of Royce GiftShares Fund as of
December 31, 1995, the results of its operations and changes in its
net assets, and the financial highlights for the period from
December 27, 1995 (commencement of operations) to December 31,
1995, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 7, 1996
<PAGE>
[ARTICLE] 6
[CIK] 0000709364
[NAME] THE ROYCE FUND
[SERIES]
[NUMBER] 11
[NAME] ROYCE GLOBAL SERVICES FUND
<TABLE>
<S> <C>
[PERIOD-TYPE] OTHER
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] DEC-31-1995
[INVESTMENTS-AT-COST] 212406
[INVESTMENTS-AT-VALUE] 213245
[RECEIVABLES] 48
[ASSETS-OTHER] 20000
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 734293
[PAYABLE-FOR-SECURITIES] 212406
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 20048
[TOTAL-LIABILITIES] 501839
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 500499
[SHARES-COMMON-STOCK] 501
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 839
[NET-ASSETS] 501839
[DIVIDEND-INCOME] 48
[INTEREST-INCOME] 0
[OTHER-INCOME] 0
[EXPENSES-NET] 48
[NET-INVESTMENT-INCOME] 0
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 839
[NET-CHANGE-FROM-OPS] 839
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 500000
[NUMBER-OF-SHARES-REDEEMED] 0
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 500839
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 86
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 134
[AVERAGE-NET-ASSETS] 501839
[PER-SHARE-NAV-BEGIN] 5
[PER-SHARE-NII] 0
[PER-SHARE-GAIN-APPREC] .01
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 5.01
[EXPENSE-RATIO] .70
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
