<PAGE>
The Royce Funds
1414 Avenue of the Americas
New York, NY 10019
(212) 355-7311
(800) 221-4268
Dear Stockholder:
After a left foot start in January, small
company stocks, as measured by the Russell 2000
Index, outperformed their large company brethren
(S&P 500) in February, March, April and May
(15.2% versus 6.2%), but were unable to continue
their winning ways in June (-4.1% versus 0.4%).
June's downturn in performance was the first sign of
potentially higher volatility for small-cap issues. In
fact, the Nasdaq Composite closed the second
quarter off over 5% from the high it established on
June 5th, its largest decline since a 13.8% drop in
the second quarter of 1994. In spite of June's
downturn, and because of the February - May
surge, the Russell 2000 index of small-cap stocks
won the first half performance derby with a 10.4%
total return versus a 10.2% total return for the
large-cap oriented S&P 500.
Royce Global Services Fund's ("RGS")
value oriented approach to investing in domestic
and foreign companies in service industries
produced a 7.7% return for the first six months.
This compares to a 7.1% return for the globally
oriented Morgan Stanley World Index ("MSWI")
Currently RGS has approximately $2 million
in assets and while the Fund's investment history is
relatively short, we are pleased with its early results.
Average annual total returns for the Fund over the
one year and since inception periods (December 15,
1994) ended June 30, 1996 were 13.0% and
19.8%, respectively. We believe that our approach
of investing in high quality, domestic and foreign
companies in service industries is an appropriate
strategy for generating above average results.
Fireworks In July
[Picture of firecracker exploding]
Louis Pasteur once said, "Chance favors the
prepared mind." Although everyone was prepared
for the fireworks of July 4th, few were prepared for
the market fireworks which began in June and
intensified throughout July. Double digit gains in
small-cap indices were erased and many investors
now find themselves starting over at mid-year.
We view the current pyrotechnics of July
from the vantage point that these fluctuations are
inevitable and desirable, and part of the normal
rhythm of the market. We are prone to keep
ourselves at a distance. This is largely common
sense--no special preparation needed.
Worth Repeating
To be quoted is flattering. To quote oneself
presents the dual risk of boring our readers and
tooting our own horn. Nevertheless, we want to
repeat some of our comments from the 1995
Annual Report. (We promise we won't do this
again.)
In our last report we said:
"An interesting aspect of this five year rise in both stocks
and bonds is the ever increasing participation of individual
investors....In fact, it is that very same demand which is
believed to ensure future success and prevent any major reversal
in market fortunes....The suggestion that continued success is
nearly guaranteed by demand is a scary proposition....We remain
most astonished, not with the magnitude of investor appetite for
stocks, but with the nearly universal assumption of its permanence."
We now think:
In a perverse way, the least informed (the
purchasing public) now appear to be dictating
investment policy to those presumed most
knowledgeable (portfolio managers). Normally
prudent professionals have taken comfort in the fact
that the public is pouring money into equity mutual
funds. As one of our shareholders commented,
"The inmates are running the asylum."
Also in the 1995 Annual Report we said:
"We are certain, particularly in a global economy, that an
ample supply of securities can be created to meet and even
exceed investors' demands."
And now:
The $132 billion of new investments in
equity mutual funds for the first half of 1996 has
eclipsed the prior annual record set in 1993 ($130
billion for the full year). Yet, the dramatic upward
progress that this commitment was expected to
produce has not materialized. A move up in long-
term interest rates and increased corporate insider
selling activity are partly to blame, as well as a surge
in IPO activity. By late June, roughly 80 new
offerings a week were producing a fresh supply of
securities at the rate of approximately $20 billion a
month.
[Picture of a prospectus cover of Berkshire Hathaway Inc]
One of the most instructive offerings of the
recent IPO boom was the creation and issuance of
Berkshire Hathaway Inc. Class B shares. Berkshire
Hathaway's Chairman, Warren Buffett, is perhaps
the best known investor of our time. Multiple
warnings on the front page of the prospectus
included: "Neither Mr. Buffet nor Mr. Munger
(Vice Chairman) would currently buy Berkshire
shares (at the current price), nor would they
recommend that their families or friends do so" and
"Berkshire has attempted to assess the current
demand for Class B shares and has tailored the size
of this offering to fully satisfy that demand (and)
therefore, buyers hoping to capture quick profits are
almost certain to be disappointed." Yet, despite the
warnings, over $500 million was raised. Wall
Street has been successful in creating an ample
supply of new and secondary offerings to fully
satisfy demand. However, it provides no similar
"warning labels."
Additionally we said:
"The magnitude of the decline in interest rates is
virtually not repeatable. Consequently, a further
decline in interest rates will not have the same
favorable impact on stock prices, no matter how bullish
one is on rates."
And now:
The consensus expectations of lower rates
(then at 6%) in an election year have proved to be
wrong. Long-term government bond yields rose by
over 20% in the first half to a current yield of over
7.0%. While this surprise has not ended the party,
it's getting hard to find the punch bowl.
And finally we said:
"The Next Five Years Will Be Different! It's not likely
that the next five years will rival the previous five in
terms of ideal wind conditions or spectacular performance.
History tells us that periods of high valuation and high
return are usually followed by periods of lower, less dynamic
returns.... We see no reason why performance should not revert
to the mean and thus, a period of lower five year returns is
likely. Very simply, the last five years were a period in which
risk and reward were synonymous and one in which risk management
provided virtually no benefit. It's likely that we have completed
the best five year performance period for this decade."
And now?
Enough said.
The Value In Value Investing
A basic premise of value investing is that
stocks, like other goods and services, should be
purchased at the most attractive prices possible,
preferably at a discount to their "intrinsic worth."
The reality for most investors is just the
opposite. In other words, investor comfort levels
and, therefore, demand increase when prices rise,
and diminish as prices decline. The higher a
stock rises, the greater the perceived opportunity.
Value investing, on the other hand, takes
a contrary view to this highly emotional process.
By systematically reducing risk when others
ignore it and taking risk when it is feared, one can
capitalize on valuation discrepancies
(opportunities) which develop from time to time.
The greatest risk that the value investor
confronts is the loss of either patience or
discipline when faced with the prospect of being
out-of-sync with the market. The value in
"value investing" is to provide a coherent
system for rational decision making ... the
purpose of which is to compound wealth while
minimizing risk. Its basic premise is that the
price one pays for an investment makes a
significant difference in the return one receives.
What We Do
[Picture of a scale balancing a dollar sign and a factory]
Royce Global Services Fund uses a risk-
averse approach to invest in domestic and foreign
common in service industries. Service industries
include banking, insurance, securities, investment
management, advertising, publishing, consulting,
communication, etc. Experience tells us that
paying attention to risk does not diminish long-
term results, although individual market phases
may not always confirm this.
Our approach attempts to understand and
value an company's private worth - what we
believe an enterprise would sell for in a private
transaction between rational parties. The price
we will pay for a security must be significantly
under our appraisal of its private worth. The
consistent use of this discipline, applied to less
well-known securities, is the source of our
performance.
Are There Any Real Investors Left?
[Picture of a ticker tape machine]
The term "investor" denotes a long-term
supplier of capital. In contrast, a "speculator" is one
who takes opportunistic risk in hopes of generating
quick profits. In essence, investors expect to get
paid by the correct assessment of underlying
business fundamentals, whereas speculators count
on others (often referred to as greater fools) to buy
them out profitably.
In the current bull market, it has become
very difficult to tell the difference between investors
and speculators. For example, what exactly is
"momentum investing?" The term seems
oxymoronic. While equities represent a permanent
ownership position in an enterprise, in many fund
portfolios, they are reviewed and replaced more
frequently than three month Treasury Bills. Wall
Street brokerage firms publish "Buy" and "Sell"
recommendations based on a company's quarterly
progress down to the penny per share; and the
country's largest equity mutual fund lost its star
manager after a short period of underperformance,
which may have contributed to the decision by that
fund's investors to withdraw in excess of $1 billion.
Only time and more difficult market
conditions will separate the true investors from
disappointed speculators. Given that we believe
equities represent long-term interests in
businesses, the term "investor" suits us just fine.
What Do We Do Now?
Given our belief that the next phase of the
market will include lower equity returns and greater
volatility -- the need for basic blocking and tackling,
in the form of commitment, focus and experience, is
paramount. We remain committed to investing in
high quality companies using absolute valuation
standards; our focus remains sharp, and exclusively
on companies in service industries; and our 20+
years of investment experience ensures that our
vigilance and discipline remain constant. Your
continued confidence is appreciated.
Yours faithfully,
Charles M. Royce Jack E. Fockler, Jr.
President W. Whitney George
Vice Presidents
August 1, 1996
P.S. Our "new era" fund will wait for the "new
era."
The Russell 2000, S&P 500, and Morgan Stanley World indices are unmanaged and
include the reinvestment of dividends. The Nasdaq Composite is an unmanaged
index.
<PAGE>
FINANCIAL REVIEW
Period Total Return Average Annual Total Return
1996 (thru 6/30) 7.7% 1-year 13.0%
1995 21.2% Since Inception* 19.8%
Royce Global Services Fund
Value of $10,000 Invested on 12/15/94
[Chart of RGS performance vs. Morgan Stanley World Index]
* Inception date - December 15, 1994
The results presented in this Annual Report should not be considered
representative of the total return from an investment in the Fund today. They
are provided only to give an historical perspective of the Fund. The
investment return and principal value of Fund shares will fluctuate so that
the shares may be worth more or less than their original cost when redeemed.
Redemption fees are not included because they apply only to purchases held for
less than one year.
The Morgan Stanley World Index is an arithmatic average, weighted by
market value, of the performance of approximately 1,450 securities listed on
the stock exchanges of 20 countries including the U.S.A., Europe, Canada,
Australia, New Zealand and the Far East. The average company in the index
has a market capitalization of about $3.5 billion.
<PAGE>
ROYCE GLOBAL SERVICES FUND
Schedule of Investments at June 30, 1996 (unaudited)
COMMON STOCKS- 98.8%
Shares Value
CONSUMER DURABLES- 4.4%
1,000 Ethan Allen Interiors Inc. $24,750
1,000 K-Swiss Inc. Cl. A 10,875
5,000 Semi-Tech Corp. * 25,000
1,300 The Singer Company N.V. 26,325
86,950
CONSUMER STAPLES- 10.6%
500 Amway Asia Pacific Ltd. 15,125
1,000 Amway Japan Limited 24,875
1,000 Coca-Cola FEMSA, S.A. de C.V. ADS 28,625
1,000 Panamerican Beverages Inc. 44,750
1,005 South African Brewereies ADR 29,396
1,500 Stanhome Inc. 39,750
500 Velcro Industries N.V. 27,750
210,271
ENERGY- 1.3%
1,000 J. Ray McDermott, S.A. * 25,000
FINANCIAL- 39.4%
Banking - 11.1%
1,000 Banca Quadrum, S.A. Institucion de Banca Multiple * 5,125
300 Barclays PLC 14,250
1,000 BHI Corporation 14,625
1,500 Comdisco, Inc. 39,938
2,000 Grupo Financiero Ser Fin S.A. * 10,250
700 Mellon Bank Corporation 39,900
625 Oriental Federal Savings Bank 11,875
5,000 Pennsylvania Manufacturers Corporation 85,000
220,963
Insurance - 15.9%
2,000 Alexander & Alexander Services Inc. 39,500
300 Aon Corporation 15,225
400 Crawford & Company Cl. A 6,800
1,650 Fremont General Corporation 37,950
2,000 PXRE Corporation 48,500
5,000 Willis Corroon Group plc ADR 59,375
4,000 Zenith National Insurance Corp. 109,500
316,850
Securities and Investment Management Industries - 12.4%
1,000 American Express Company 44,625
1,000 C.I. Fund Management Inc. 9,485
2,000 Clemente Global Growth Fund 16,750
1,000 Dean Witter, Discover & Co. 57,250
2,000 Global Small Cap Fd. Inc. * 23,500
300 Invesco plc 10,500
2,000 Japan OTC Equity Fund, Inc. 17,250
1,500 The Pioneer Group, Inc. 40,125
900 Piper Jaffray Companies Inc. 11,250
5,000 U.S. Global Investors Inc. Cl. A * 14,375
245,110
782,923
HEALTH- 4.6%
5,000 Haemonetics Corporation * 91,250
INDUSTRIAL CYCLICALS- 10.6%
1,000 Concordia Paper (Holdings) Limited * 7,125
2,000 Devcon International Corp. * 18,500
10,000 MK Gold Company * 15,000
700 Nordson Corporation 39,550
2,500 Oregon Steel Mills, Inc. 34,375
3,000 Penn Engineering and Manufacturing Inc. * 56,968
2,000 Simpson Manufacturing Co., Inc. * 40,000
211,518
RETAIL- 3.2%
2,000 InterTAN Inc. * 11,500
9,700 Suzy Shier Ltd. * 52,930
64,430
SERVICES- 11.2%
200 Bowne & Co., Inc. 4,125
4,000 Cordiant, Inc. PLC (United Kingdom ADR Tem) * 20,000
7,000 FCA International Ltd. * 11,895
500 Grupo Televisa, S.A. de C.V. GDS 15,375
2,700 The Harper Group 52,650
2,000 Heidemij N.V. 20,500
1,000 Marshall Industries * 28,000
1,700 Sotheby's Holdings, Inc. Cl. A 24,650
1,000 Telefonica De Argentina SA ADS 29,625
900 Vallen Corporation * 15,750
222,570
TECHNOLOGY- 5.3%
3,500 Nam Tai Electronics, Inc. 39,812
5,000 PCD Inc. * 66,250
106,062
UTILITIES- 4.3%
500 Telecomunicacoes Brasileiras S.A. - Telebras ADR 34,813
1,500 Telefonos de Mexico, S.A. de C.V., Cl. L ADS 50,250
85,063
MISCELLANEOUS- 3.9% 78,025
Total Common Stocks
(Cost $ 1,786,863) 1,964,062
CASH AND OTHER ASSETS LESS LIABILITIES- 1.2% 24,694
NET ASSETS- 100.0% $1,988,756
* Non-income producing.
The abbreviations ADR, ADS, and GDS refer to American Depository Receipt,
American Depository Share and Global Depository Share, respectively.
Income Tax Information- The cost of total investments for federal income tax
purposes was $ 1,786,863. At June 30, 1996, net unrealized appreciation for
all securities was $ 177,199, consisting of aggregate gross unrealized
appreciation of $ 272,698 and aggregate gross unrealized depreciation of
$ 95,499.
The accompanying notes are an integral part of the financial statements.
<PAGE>
ROYCE GLOBAL SERVICES FUND
Statement of Assets and Liabilities at June 30, 1996 (unaudited)
ASSETS:
Investments at value (identified cost $1,786,863) $1,964,062
Cash 13,986
Receivable for investments sold 68,698
Receivable for dividends 3,731
Prepaid expenses and other assets 11,856
TOTAL ASSETS 2,062,333
LIABILITIES:
Payable for investments purchased 66,168
Accrued expenses 7,409
TOTAL LIABILITIES 73,577
NET ASSETS $1,988,756
ANALYSIS OF NET ASSETS:
Net investment loss ($960)
Accumulated net realized gain on investments 87,219
Net unrealized appreciation on investments 177,199
Shares of beneficial interest 325
Additional paid-in capital 1,724,973
NET ASSETS $1,988,756
PRICING OF SHARES:
Net asset value, offering and redemption price per share
($1,988,756 / 324,724 shares outstanding) $6.12
STATEMENTS OF CHANGES IN NET ASSETS
Six Months ended Year ended
June 30, 1996 December 31,
(unaudited) 1995
From Investment Activities:
Net investment loss ($960) ($7,845)
Net realized gain on investments 45,192 169,118
Net change in unrealized appreciation
on investments 91,061 79,372
Net increase in net assets
resulting from operations 135,293 240,645
Dividends and Distributions:
Net realized gain on investments 0 (119,246)
Capital Share Transactions:
Net increase in net assets from capital 226,806 990,766
Net Increase in Net Assets 362,099 1,112,165
Net Assets:
Beginning of period 1,626,657 514,492
End of period $1,988,756 $1,626,657
The accompanying notes are an integral part of the financial statements.
<PAGE>
ROYCE GLOBAL SERVICES FUND
Statement of Operations for the period ended June 30, 1996 (unaudited)
INVESTMENT INCOME:
Income:
Dividends $13,564
Interest 135
Total Income 13,699
Expenses:
Investment advisory fees 13,965
Distribution fees 2,327
Professional fees 5,973
Federal and state registration fees 2,514
Custodian and transfer agent fees 1,600
Administrative and office facilities expenses 492
Other expenses 4,080
Total Expenses 30,951
Fees waived by investment adviser and distributor (16,292)
Net Expenses 14,659
Net Investment Loss (960)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments 45,192
Net change in unrealized appreciation on investments 91,061
Net realized and unrealized gain on investments 136,253
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $135,293
Financial Highlights
This table is presented to show selected data for a share outstanding
throughout each period, and to assist shareholders in evaluating the Fund's
performance for the periods presented.
Six months Period
ended Year ended ended
June 30, 1996 December 31, December 31,
(unaudited) 1995 1994
Net Asset Value, Beginning of
Period $5.68 $5.06 $5.00
Investment Operations:
Net investment loss - - -
Net realized and unrealized
gain on investments 0.44 1.07 0.06
Total from investment operations 0.44 1.07 0.06
Dividends and Distributions:
Net realized gain on investments - (0.45) -
Net Asset Value, End of Period $6.12 $5.68 $5.06
Total Return 7.8% 21.2% 1.2%
Ratios/Supplemental Data:
Net Assets, End of Period $1,988,756 $1,626,657 $514,492
Ratio of Expenses to Average
Net Assets (a) 1.57%* 1.97% 1.78%*
Ratio of Net Investment Loss to
Average Net Assets -0.10%* -0.58% 0%
Portfolio Turnover Rate 28% 106% 0%
Average Commission Rate Paid+ $0.0576 - -
(a) Expenses are shown after fee waivers by the investment adviser and
distributor. For the period ended June 30, 1996 and for the periods ended
December 31, 1995 and 1994, the expense ratios before fee waivers would have
been 3.32%, 3.72%, and 3.69%, respectively.
*Annualized.
+For fiscal years beginning on or after October 1, 1995, the Fund is required
to disclose its average commission rate paid per share for purchases and sales
of securities.
The accompanying notes are an integral part of the financial statements.
<PAGE>
ROYCE GLOBAL SERVICES FUND
Notes to Financial Statements (unaudited)
1. Summary of Significant Accounting Policies:
Royce Global Services Fund (the "Fund") is a series of The
Royce Fund (the "Trust"), a diversified open-end management
investment company. The Trust, originally established as a
business trust under the laws of Massachusetts, converted to a
Delaware business trust at the close of business on June 28, 1996.
The Fund commenced operations on December 15, 1994.
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 are determined on the basis of identified cost for
book and tax purposes.
c. 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
"Income Tax Information".
<PAGE>
ROYCE GLOBAL SERVICES FUND
Notes to Financial Statements (unaudited) (continued)
d. Distributions:
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 reclassification to paid-
in capital and may affect net investment income per share.
Undistributed 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 enters 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
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 and Distributor:
Under the Trust's investment advisory agreement with Quest
Advisory Corp. ("Quest"), advisory fees of $13,965 were voluntarily
waived by Quest for the six months ended June 30, 1996. The
agreement provides for fees equal to 1.50% per annum of the Fund's
average net assets. Such fees are computed daily and are payable
monthly to Quest.
Quest Distributors, Inc. ("QDI"), the distributor of the
Fund's shares, is an affiliate of Quest. QDI voluntarily waived
the Fund's distribution fee of $2,327 for the six months ended June
30, 1996. The distribution agreement provides for maximum fees of
.25% per annum of the Fund's average net assets.
<PAGE>
ROYCE GLOBAL SERVICES FUND
Notes to Financial Statements (unaudited) (continued)
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:
Six Months ended
June 30, 1996 Year ended
(unaudited) December 31, 1995
Shares Amount Shares Amount
Sold 40,515 $238,837 166,855 $892,138
Issued as reinvested
dividends and
distributions - - 21,147 119,060
Redeemed (2,018) (12,031) (3,362) (20,431)
Shares redeemed within one year of purchase are subject to a 1%
redemption fee, payable to the Fund, which is used to offset costs
asssociated with the redemption.
4. Purchases and Sales of Investment Securities:
For the six months ended June 30, 1996, the cost of purchases
and the proceeds from sales of investment securities, other than
short-term securities, amounted to $833,027 and $465,930,
respectively.
<PAGE>
At the Special Meeting of Shareholders held on June 26, 1996, Trust
shareholders approved a conversion of the Trust to a Delaware business
trust, elected Trustees and ratified the Board's selection of the Trust's
independent public accountants, and Fund shareholders approved a proposal
to permit investment in warrants, rights and options.
Proposal/ Votes Votes Votes Cast Votes
Name of Trustee Cast For Withheld Against Abstained
Convert the Trust to a
Delaware Business Trust 37,472,360 N/A 845,090 3,121,147
Proposal to change the Fund's
investment policy concerning
warrants, rights and options 256,115 N/A N/A N/A
Ratification of independent
public accountants 51,370,026 N/A 442,499 2,816,187
Charles M. Royce 52,309,497 2,319,215 N/A N/A
Thomas R. Ebright 52,314,207 2,314,505 N/A N/A
Hubert L. Cafritz 52,219,769 2,408,943 N/A N/A
Richard M.Galkin 52,305,456 2,323,256 N/A N/A
Stephen L. Isaacs 52,258,406 2,370,306 N/A N/A
William L. Koke 52,300,723 2,327,989 N/A N/A
David L. Meister 52,282,477 2,346,235 N/A N/A
<PAGE>
POSTSCRIPT: New Era Definitions
A by-product of any new era is a change in its
language. The use of new words and definitions
typically signifies the emergence of a new culture.
For example, the acceptance of popular slang words
"cool" and "hip" in the '60s ushered in an era known
as "pop culture."
The protracted bull market of the last five
years has many believing that we have entered into a
new age of investing. Just as "bad" came to mean
"good" in the slang of the '70s, Steve Leuthold, stock
market researcher and money manager, with further
corroboration from USA Today "Money Talk"
columnist, Daniel Kadlec, has suggested, with tongue
firmly in cheek, that the following "new definitions for
a new era" have replaced those established by Mr.
Webster:
Bear Market: When stocks decline for a week.
Major Correction: When stocks decline for a day.
Old-Timer: A person who knows someone who lost money in the
stock market.
Cynic: Anyone reminding you stocks can go down.
Conservative: Anyone without a margin account.
Risk: How much you can lose being out of the market.
Inflation: Historical phenomena that used to adversely affect stocks.
Contrarian: Someone with nothing to talk about at parties.
IPO: Instant profit opportunity.
Short Sale: Temporary condition associated with memory failure.
Graham & Dodd: Ancient philosophers who believed the book value of a
company was too much to pay. It's widely assumed they also believed
the world was flat.
Mutual Fund: A pool of money guaranteed to grow because it has lots
of contributors, and you just know that many people can't be wrong.
As conservative cynics, we can only hope that when the current market
is no longer "hip," it will not find too many people feeling "bad,"
as it was originally defined.
The Royce Funds
General Information and Telephone Purchases ... 1 (800) 221-4268
Shareholder Account Services .................. 1 (800) 841-1180
Investment Advisor Services ................... 1 (800) 33-ROYCE
The Royce Funds InfoLine ...................... 1 (800) 78-ROYCE
E-mail Address ................................ [email protected]
Internet Homepage ............................. http://www.roycefunds.com
1414 Avenue of the Americas, New York, New York 10019
This report must be accompanied by or preceded by a current prospectus
of the Fund.
