The Royce Fund
Supplement to Prospectus dated July 1, 1996
MANAGEMENT OF THE TRUST
The Trust's business and affairs are managed under the
direction of its Board of Trustees. Quest, the Funds'
investment adviser, is responsible for the management of the
Funds' portfolios, subject to the authority of the Board of
Trustees. Quest was organized in 1967 and has been the
Funds' adviser since their inception. Charles M. Royce,
Quest's President, Chief Investment Officer and sole voting
shareholder since 1972, is primarily responsible for
supervising Quest's investment management activities. Mr.
Royce is assisted by Jack E. Fockler, Jr. and W. Whitney
George, Vice Presidents of Quest, both of whom participate
in the investment management activities, with their specific
responsibilities varying from time to time. Quest is also
the investment adviser to Royce Value, Total Return and
Global Services Funds and PMF II, which are other series of
the Trust, and to other investment and non-investment
company accounts.
As compensation for its services to the Funds, Quest is
entitled to receive the following annual advisory fees: (i)
1% of the first $50 million of the average net assets, .875%
of the next $50 million of average net assets and .75% of
average net assets in excess of $100 million of
Pennsylvania Mutual Fund; (ii) 1% of the average net assets
of Royce Premier and Equity Income Funds; (iii) 1.5% of the
average net assets of Royce Micro-Cap and Low-Priced Stock
Funds; and (iv) 1.25% of the average net assets of Royce
GiftShares Fund. These fees are payable monthly from the
assets of the Funds involved and are higher (substantially
higher in the case of Royce Micro-Cap, Low-Priced Stock and
GiftShares Funds) than those paid by most other mutual funds
with similar investment objectives. For 1995, the fees paid
to Quest on average net assets were .77%, 1.00%, 1.45%, .91%
and .25% (net of voluntary waivers) for Pennsylvania Mutual,
Royce Premier, Micro-Cap, Equity Income and Low-Priced Stock
Funds, respectively.
Quest selects the brokers who execute the purchases and
sales of the Funds' portfolio securities and may place
orders with brokers who provide brokerage and research
services to Quest. Quest is authorized, in recognition of
the value of brokerage and research services provided, to
pay commissions to a broker in excess of the amount which
another broker might have charged for the same transaction.
Quest Distributors, Inc. ("QDI"), which is wholly-owned by
Charles M. Royce, acts as distributor of the Funds' shares.
The Trust has adopted a distribution plan for Royce Low-
Priced Stock Fund pursuant to Rule 12b-1. The plan provides
for payment to QDI of .25% per annum of the average net
assets of the Fund, which may be used for payment of sales
commissions and other fees to those who introduce investors
to the Fund and for various other promotional, sales-related
and servicing costs and expenses. QDI has committed to
waive its fees through April 1997.
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