UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-03599

Name of Registrant: The Royce Fund

Address of Registrant: 745 Fifth Avenue
New York, NY 10151

Name and address of agent for service:	John E. Denneen, Esq.
	745 Fifth Avenue
	New York, NY 10151

Registrant’s telephone number, including area code: (212) 508-4500
Date of fiscal year end: December 31, 2017
Date of reporting period: January 1, 2017 – June 30, 2017

Item 1. Reports to Shareholders.

JUNE 30, 2017

2017 Semiannual

Review and Report to Shareholders

Royce Dividend Value Fund
Royce Global Financial Services Fund
Royce International Micro-Cap Fund
Royce International Premier Fund
Royce Low-Priced Stock Fund
Royce Micro-Cap Fund
Royce Micro-Cap Opportunity Fund
Royce Opportunity Fund
Royce Pennsylvania Mutual Fund
Royce Premier Fund
Royce Small-Cap Leaders Fund
Royce Small-Cap Value Fund
Royce Small/Mid-Cap Premier Fund
Royce Smaller-Companies Growth Fund
Royce Special Equity Fund
Royce Special Equity Multi-Cap Fund
Royce Total Return Fund
roycefunds.com

Table of Contents
Semiannual Review
Letter to Our Shareholders	2
Performance and Expenses	8
The Royce Funds and Rolling Returns	9
Semiannual Report to Shareholders
Managers’ Discussions of Fund Performance
Royce Dividend Value Fund	10
Royce Global Financial Services Fund	12
Royce International Micro-Cap Fund	14
Royce International Premier Fund	16
Royce Low-Priced Stock Fund	18
Royce Micro-Cap Fund	20
Royce Micro-Cap Opportunity Fund	22
Royce Opportunity Fund	24
Royce Pennsylvania Mutual Fund	26
Royce Premier Fund	28
Royce Small-Cap Leaders Fund	30
Royce Small-Cap Value Fund	32
Royce Small/Mid-Cap Premier Fund	34
Royce Smaller-Companies Growth Fund	36
Royce Special Equity Fund	38
Royce Special Equity Multi-Cap Fund	40
Royce Total Return Fund	42
Schedules of Investments and Financial Statements	44
Notes to Financial Statements	110
Understanding Your Fund’s Expenses	125
Trustees and Officers	127
Board Approval of Investment Advisory Agreements	128
Notes to Performance and Other Important Information	131

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Letter to Our Shareholders

SMALL-CAP’S LONG AND WINDING ROAD

A good start for small-caps in 2017 masked
some key reversals

In a solid first half for small-cap stocks, the Russell 2000 Index gained 5.0% for the year-to-date period ended June 30, 2017. This followed a terrific 2016, in which the small-cap index advanced 21.3%. From our perspective as small-cap specialists, however, the big news in small-cap last year was the occurrence of three key reversals: leadership for value, improved results for cyclicals, and higher overall returns for small-caps than for large-caps. Perhaps because we had been waiting for so long—and based on history, we endured an inordinately protracted wait for value to resume leadership over growth—we were convinced as we entered 2017 that these reversals would remain in place. Yet the first half saw leadership shifting yet again, as large-caps, growth, and non-cyclicals (especially healthcare) all took the lead after lagging, some significantly, in 2016. (In addition, non-U.S. equities surged, though this came after several years of underperformance). The result was a small-cap market with narrow leadership for growth through most of the first six months.

      Recent rotations in small-cap style leadership could be seen clearly in the one-year results for the period ended June 30, 2017. The two style indexes finished the 12-month period in remarkably similar places—the Russell 2000 Value Index climbed 24.9% versus a gain of 24.4% for the Russell 2000 Growth Index—though their respective paths were strikingly divergent.

A Tale of Two Halves
1-Year Return Russell 2000 Value and Russell 2000 Growth

   In the second half of 2016, the small-cap value index rose 24.2% versus 13.1% for growth, while in the first half of 2017, value rose only 0.5% compared to a 10.0% increase for its growth sibling—A Tale of Two Halves. Our interpretation of these actions is that the first half of 2017 marked a catch-up phase for last year’s laggards and a pause for 2016’s leaders.

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LETTER TO OUR SHAREHOLDERS    

It’s important to remember that we are still walking the road back to normalization. This is not a straight road—and it was never going to be. If 2017’s first half showed us anything, it was that the path back to normalization (and away from zero interest rates and abundant financial liquidity) will be a winding one with a few sharp twists and turns.

   Given leadership for growth and non-cyclicals in a period of lackluster economic growth, some market commentators have compared the first half of 2017 to 2015, a year in which growth stocks shined while cyclicals suffered. Growth’s recent leadership notwithstanding, however, 2017 looks nothing like 2015. Today’s environment features rising interest rates, quantitative easing is unwinding in the U.S. (with signs that Europe will soon follow suit), and an increasing amount of data shows a global economy that’s beginning to heat up. In our view, this environment seems significantly different than it did during growth’s last period of extended leadership, which featured anemic global growth and the looming threat of renewed recessions. It’s important to remember that we are still walking the road back to normalization. This is not a straight road—and it was never going to be. If 2017’s first half showed us anything, it was that the path back to normalization (and away from zero interest rates and abundant financial liquidity) will be a winding one with a few sharp twists and turns. We think that we are far from a new regime for growth. In fact, the environment still looks very conducive, at least to us, for value’s leadership to resume and continue—driven by cyclical industries positioned to benefit from global growth.

CAN THE LOW ROAD LEAD TO OUTPERFORMANCE?

Attractive returns for small-caps in the low-return world we anticipate
Our cautious optimism is tempered by an important caveat—the likelihood of lower returns for small-cap stocks than we experienced over the past five years. We make no secret of our belief in reversion to the mean—and the Russell 2000’s 13.7% average annual total return for the five-year period ended June 30, 2017 was higher

Rolling 5-Year Returns vs. Latest 5-Year Avg. Annual Total Return
Russell 2000 Average Monthly Rolling Average Annual Total Return for 5-Year Periods Through 6/30/17

than its rolling monthly five-year average since the inception of the small-cap index on 12/31/78—a gain of 10.6%.
   In addition, the chart above shows that small-cap’s rolling five-year returns over the past 15- and 25-year periods are also lower than the current five-year average for the Russell 2000. This explains why we see a high probability of lower small-cap returns over the next few years—our take is based on reversion to the mean.
   That said, we still see positive, and quite likely very competitive, returns for small-caps ahead, with an argument that rests on two primary factors—the reasonable state of current valuations and the prospect for earnings strength and/or improvement.

Equity Indexes as of June 30, 2017 (%)

	YTD1	1-YR	3-YR	5-YR	10-YR
Russell 2000	4.99	24.60	7.36	13.70	6.92
Russell 2000 Value	0.54	24.86	7.02	13.39	5.92
Russell 2000 Growth	9.97	24.40	7.64	13.98	7.82
S&P 500	9.34	17.90	9.61	14.63	7.18
Russell 1000	9.27	18.03	9.26	14.67	7.29
Nasdaq Composite	14.07	26.80	11.68	15.91	8.96
Russell Midcap	7.99	16.48	7.69	14.72	7.67
Russell Microcap	4.23	27.60	6.69	13.73	5.47
Russell Global ex-U.S. Small Cap	15.01	19.59	2.85	9.24	2.47
Russell Global ex-U.S. Large Cap	14.30	20.61	1.05	7.63	1.40

¹ Not annualized

For details on The Royce Funds’ performance in the period, please turn to the Managers’ Discussions that begin on page 10.

Past performance is no guarantee of future results.

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LETTER TO OUR SHAREHOLDERS

We see positive, and quite likely very competitive, returns for small-caps ahead. Our argument rests on two primary factors—the reasonable state of current valuations and the prospect for earnings strength and/or improvement.

   While it is true that current small-cap valuations are elevated compared with history, it is also true that within a context of low bond yields, small-caps appear cheap versus bonds.

Two Perspectives on Small-Cap Market Valuation
Through 6/30/17

EV/EBIT >
Long-term Average

Suggests small-caps
are more than
fully valued






Equity Risk Premium >
Long-term Average

Suggests small-caps
are undervalued

Enterprise Value (EV) is calculated by adding a company’s market capitalization, long-term debt, preferred stock, and minority interest, then subtracting cash. EBIT is earnings before interest and tax. EV/EBIT is a harmonic weighted average. Cap Rate is a simple weighted average. Equity Risk Premium is the excess return that an equity investment provides over a risk-free rate, generally defined as the return from U.S. Treasury bonds.

   In addition, valuations actually became more attractive for small-cap companies as a whole in the first half of 2017, as earnings advanced at a faster rate than stock prices. At the end of 2016, the average P/E ratio for the Russell 2000 was 22.9x while at the end of June 2017 it had fallen to 21.7x. During this same period, the yield on the 10-year Treasury yield dropped from 2.4% to 2.3%, further increasing small-cap’s attractiveness versus bonds.
   Regarding the earnings outlook, our own analyses, our regular discussions with company management teams, and research from our friends at Strategas all reveal a quietly optimistic sales and earnings outlook for many small-cap businesses over the next

couple of years, especially if global growth continues to heat up. Small-cap earnings announcements in July 2017 offered some initial, if anecdotal, support for this thesis.
   We contend that if inflation stays below its historical average, then valuations can stay above their historical levels. We believe valuations do not need to increase from this point for small-caps to advance, and if small-caps can track earnings growth, then an expectation of mid- to high-single-digit returns over the next several years seems reasonable to us. In the low-return world we are anticipating, that could be a very competitive return.





TWO ROADS DIVERGING IN THE SMALL-CAP WORLD
Why mean reversion and history favor small-cap value



Of course, active small-cap managers do not buy the whole market—at least they shouldn’t. If we have sketched a reasonably accurate roadmap for this journey to normalization (of which higher interest rates are a crucial feature), it would have significant implications for investment approaches. Seeing in essence a mirror image of the 2011-2015 period, we think the road to normalization will continue to have divergent paths, with outperformance for value, cyclical, and active management and underperformance for growth, defensive, and passive strategies.
   Our favorable view of value is rooted in three observations: value’s long-term historical outperformance record versus growth, mean reversion for growth’s performance, and the interest-rate sensitivity of growth stock valuations. Below is a chart showing the most recent five-year returns for the small-cap value and growth indexes

Latest 5-Year Average Annual Total Returns vs. Average Monthly Rolling Average Annual Total 5-Year Returns Through 6/30/17

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LETTER TO OUR SHAREHOLDERS    

compared with the average five-year returns over all monthly rolling periods since inception (12/31/78). While the most recent five-year period may be seen as highly supportive for financial assets, small-cap value exceeded its historical five-year average return by only about 100 basis points, while its growth equivalent exceeded its historical average by approximately 550 basis points. Reversion to the mean strongly suggests a very challenging road ahead for small-cap growth stocks.

   In addition, valuations for cyclicals within small-cap look attractive versus defensives. The metric we prefer to use when examining valuations is the median relative enterprise value (“EV”) over earnings before interest and taxes (“EBIT”). We calculated it over the last 12 months ended June 30, 2017, excluding the companies in the Russell 2000 with negative EBIT. We think this gives a clear picture of the relative attractiveness of cyclicals versus defensive stocks. The results can be seen in the chart above, which shows that valuations for cyclical versus defensive sectors were below their long-term average at the end of June. We feel good about small-cap valuations for our preferred companies and see the greatest earnings potential for small-caps in cyclical areas of the market. Indeed, one of the underappreciated aspects of small-cap cyclicals is the degree to which many look poised to participate in global economic expansion.

   In fact, we would offer a qualified dissent to the idea that small-caps would be in a relatively unfavorable position if international economies outpace the rate of growth in the U.S. To be sure, this notion is sound enough when applied to the small-cap universe as a whole—the average company in the Russell 2000 derived only 19.8% of its sales from outside the U.S. at the end of June, compared to about 40% for the S&P 500. However, the level of foreign sales varies considerably by sector and industry in the Russell 2000, with Information Technology (44.1%) and Materials (33.4%) having the highest percentages of revenue derived from non-U.S. sources by sector.

Valuations for Cyclical Sectors Look Cheap vs. Defensives
Cyclical vs. Defensive Stocks Within the Russell 2000 Median Relative LTM EV/EBIT¹ Ex. Negative EBIT Through 6/30/17

¹ Last Twelve Months Enterprise Value/Earnings Before Interest and Taxes
Cyclical Definition: Consumer Discretionary, Energy, Financials, Industrials, Information Technology, Materials.
Defensive Definition: Consumer Staples, Health Care, Real Estate, Telecommunication Services, Utilities

Source: Factset

   There are also certain other cyclical industries, including auto components (47.2%) and machinery (35.9%), that boast significant international exposure and therefore appear well positioned to benefit from global expansion. Additionally, with the dollar weakening, we expect to see heightened demand for U.S. exports. As experienced small-cap specialists, we see a rebounding global economy as being a potential advantage for active managers who, like us, carry more of a cyclical tilt in their portfolios.
   Granted, our earnings-centric outlook pivots on there being not simply the tailwind of solid earnings and relatively attractive valuations for select cyclicals but also headwinds for growth and defensive companies. Rising interest rates, for example, are more likely to benefit companies with EPS growth and mute multiple expansion. In this Goldilocks, “not too fast, not too slow” economic environment, we expect higher-quality companies (as measured by

Information Technology & Materials Had Highest Percentage of Foreign Revenue for the 12 Months Ended 6/30/17
Russell 2000 GICS Sectors

Source: Factset

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LETTER TO OUR SHAREHOLDERS    

We feel good about small-cap valuations for our preferred companies and see the greatest earnings potential for small-caps in cyclical areas of the market. Indeed, one of the underappreciated aspects of small-cap cyclicals is the degree to which many look poised to participate in global economic expansion.

high returns on invested capital) to have an advantage. Companies that are able to make steady progress and fund their growth from internal cash flow rather than relying on increasingly pricey external sources of capital should be in a superior position to their financially less stable competitors.
SMALL-CAP’S SILK ROAD
The current opportunity in international small-cap
Additionally, there are timely opportunities in international small-cap stocks. As shown below, the trailing 10-year return for international small-caps is significantly lower than its long-term average. A regression to the mean of historical returns would result in more favorable performance. Prior to 2017, the Russell Global ex-U.S. Small Cap had underperformed the Russell 2000 by the widest spread since the inception of the non-U.S. small-cap index in July 1996. As of June 30, 2017, the performance spread between the two indexes was just shy of this lowest point. So while there is no guarantee of the course of future returns, we think the long-term performance history of the two small-cap indexes suggests that a multi-year run for international small-caps is possible. In our view, this is especially relevant when evaluating the opportunity in these companies.
Recent Returns for non-U.S. Small-Caps are at Low End of History Russell Global ex-U.S. Small Cap Index Quarterly Rolling 10-Year Returns as of 6/30/17
All of this adds up to an environment that appears supportive for active management. Three market environments have historically provided opportunities for many active managers—when value leads, when volatility rises, and when overall market returns are low. All three look more likely than not to us. To the last point, it’s interesting to note what’s shown in the following chart: active managers, with

the Morningstar Small Cap Blend Category Average serving as a proxy, had their widest outperformance spread in the five-year periods when the Russell 2000 returned between 5-10%. This is exactly the environment that we think is most likely.

Monthly Rolling 5-Year U.S. Small Blend¹ Average Excess Returns During Russell 2000 Return Ranges
From 12/31/73 through 6/30/17

¹ There were 524 U.S. Fund Small Blend Funds tracked by Morningstar with at least five years of performance history as of 6/30/17.
The excess return for a Morningstar category would be the category’s return for the period minus the Index return.

GO WITH THE FLOW

Corrections are historically typical within small-cap

Of course, the road to a lower-return environment likely entails a correction. We do not see this as chilling or discouraging news. Within small-cap, some kind of realignment of stock prices is common. In 18 of the last 20 calendar years, the Russell 2000 had an intra-year decline of at least 10% (and a downturn of 9.6% occurred in one of the two years that escaped the 10%-plus fall). Over the last 20 calendar years, the median intra-year correction was 14.2% while so far in 2017, the Russell 2000’s biggest decline was 4.7%. So we lean toward the likelihood of a pullback in the 8-12% range. We do not see it going much deeper than that because, at least currently, we see none of the signs of a major market top or a recession.

   Additionally, many market watchers were expecting a correction toward the end of the first quarter, and as of this writing we

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LETTER TO OUR SHAREHOLDERS    

Year-to-Date vs. Median Intra-Year Decline Largest Russell 2000 Intra-Year Declines Through 6/30/17
still have not seen one even in the midst of ample economic and political uncertainty. When this 20-year history is linked with the fact that we have still not experienced anything like a real correction since the February 2016 small-cap trough, then a downturn looks more than probable to us. So while we are confident that many small-cap companies are in fundamentally solid, even strong, shape, we have also seen over the years that markets simply do not keep ascending for this long without a little air being let out of them.
THE ROAD LESS TRAVELED A challenging path worth taking
To be sure, the current environment offers a number of challenges for small-cap investors. Yet we believe it also looks favorable for those who walk the road less traveled—those with disciplined small-cap active management approaches that are geared more globally. Current uncertainty should sooner or later result in higher levels of volatility. (Indeed, perhaps the oddest feature of 2017’s first half was its bullish placidity in the face of so much uncertainty—the 10-year Treasury showed as much, if not more, volatility in the year’s first six months as the stock market.) And we see increased volatility as potentially working to the advantage of the disciplined active manager.

   There is also the possibility of fiscal or regulatory support from Washington, which could of course help small-caps. Our view, however, is that investors place undue emphasis on this. We take issue with the common assumption that small-caps cannot continue to advance without a cocktail combining corporate tax cuts, deregulation, and infrastructure spending. Our outlook of measured optimism is not grounded on which policies emerge (or do not emerge) from Washington.
   Ultimately, of course, the success of what we do hinges on the companies in which we invest. On that score, we are encouraged. The ongoing optimism we have been hearing every day from management teams, for example, contradicts the expectation of an economic slowdown. Order books are continuing to fill up, and the majority of the companies we have been meeting with remain confident about their business. That in turn gives us ample confidence in what we do. We are convinced that small-cap active management approaches can remain successful as long as there is a reasonable amount of economic growth, whether here at home or overseas. Simply put, we see modest global economic growth leading to decent earnings growth which should result in moderate advances for small-caps as a group and greater advances for companies in cyclical businesses. Our advice? “Stay active, my friends.”

Sincerely,

Charles M. Royce	Christopher D. Clark	Francis D. Gannon
Chairman,	Chief Executive Officer, and	Co-Chief Investment Officer,
Royce & Associates, LP	Co-Chief Investment Officer,	Royce & Associates, LP
	Royce & Associates, LP
July 31, 2017

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Performance and Expenses

Performance and Expenses
	AVERAGE ANNUAL TOTAL RETURNS (%)								ANNUAL OPERATING EXPENSES (%)
	YTD1	1-YR	5-YR	10-YR	15-YR	20-YR	40-YR/SINCE INCEPTION	INCEPTION DATE		GROSS	NET
Royce Dividend Value Fund	7.72	20.07	11.02	6.85	N/A	N/A	8.74	5/3/04		1.34	1.34
Royce Global Financial Services Fund	9.83	23.41	14.13	5.85	N/A	N/A	8.17	12/31/03		1.78	1.60
Royce International Micro-Cap Fund	15.23	22.27	8.97	N/A	N/A	N/A	3.57	12/31/10		3.35	1.64
Royce International Premier Fund	22.33	20.11	11.66	N/A	N/A	N/A	7.18	12/31/10		1.84	1.44
Royce Low-Priced Stock Fund	0.97	20.17	3.88	2.09	6.21	8.94	9.91	12/15/93		1.53	1.50
Royce Micro-Cap Fund	2.01	23.04	5.32	3.11	7.61	8.98	10.91	12/31/91		1.48	1.48
Royce Micro-Cap Opportunity Fund	9.77	31.77	12.69	N/A	N/A	N/A	12.85	8/31/10		1.30	1.24
Royce Opportunity Fund	8.17	36.10	13.83	6.59	10.25	11.95	12.39	11/19/96		1.19	1.19
Royce Pennsylvania Mutual Fund	4.81	23.17	11.68	5.93	9.19	9.91	13.09	N/A		0.93	0.93
Royce Premier Fund	8.70	25.54	10.62	7.20	10.78	10.42	11.61	12/31/91		1.16	1.16
Royce Small-Cap Leaders Fund	1.14	19.80	9.04	5.72	N/A	N/A	9.43	6/30/03		1.58	1.49
Royce Small-Cap Value Fund	-4.21	12.22	7.87	3.75	10.00	N/A	9.26	6/14/01		1.49	1.49
Royce Small/Mid-Cap Premier Fund	5.68	18.27	10.11	5.73	9.04	11.39	12.33	12/27/95		1.30	1.30
Royce Smaller-Companies Growth Fund	11.26	26.08	12.35	4.53	10.98	N/A	11.42	6/14/01		1.51	1.49
Royce Special Equity Fund	-0.36	21.63	10.45	7.31	8.85	N/A	9.26	5/1/98		1.17	1.17
Royce Special Equity Multi-Cap Fund	5.95	21.04	10.14	N/A	N/A	N/A	9.96	12/31/10		1.34	1.24
Royce Total Return Fund	2.78	19.09	12.15	6.24	8.76	9.33	10.82	12/15/93		1.21	1.21
INDEX
Russell 2000 Index	4.99	24.60	13.70	6.92	9.19	7.98	N/A	N/A		N/A	N/A
Russell Microcap Index	4.23	27.60	13.73	5.47	8.44	N/A	N/A	N/A		N/A	N/A
Russell 2500 Index	5.97	19.84	14.04	7.42	9.98	9.19	N/A	N/A		N/A	N/A
Russell 1000 Index	9.27	18.03	14.67	7.29	8.62	7.42	N/A	N/A		N/A	N/A
Russell Global ex-U.S. Small Cap Index	15.01	19.59	9.24	2.47	9.92	6.37	N/A	N/A		N/A	N/A

¹ Not annualized.

Important Performance, Expense, and Risk Information

All performance information in this Review and Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Investment and Service Class shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund (2% for Royce International Micro-Cap and International Premier Funds). Redemption fees are not reflected in the performance shown above; if they were, performance would be lower. Current performance may be higher or lower than performance quoted. Current month-end performance may be obtained at www.roycefunds.com. All performance and expense information reflects results of the Funds’ oldest share Class (Investment Class or Service Class, as the case may be). Price and total return information is based on net asset values calculated for shareholder transactions. Gross annual operating expenses reflect the Fund’s gross total annual operating expenses and include management fees, any 12b-1 distribution and service fees, other expenses, and any applicable acquired fund fees and expenses. Net annual operating expenses reflect contractual fee waivers and/or reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive fees and/or reimburse operating expenses, excluding brokerage commissions, taxes, interest litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business, to the extent necessary to maintain net operating expenses at or below: 1.49% for Royce Global Financial Services, Low-Priced Stock, Small-Cap Leaders, and Smaller-Companies Growth Funds; 1.64% for Royce International Micro-Cap Fund; 1.44% for Royce International Premier Fund; 1.24% for Royce Micro-Cap Opportunity and Special Equity Multi-Cap Funds through April 30, 2018; at or below: 1.99% for Royce International Micro-Cap Fund through April 30, 2027. Acquired fund fees and expenses reflect the estimated amount of fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies.

Service Class shares bear an annual distribution expense that is not borne by the Funds’ Investment Class. If such distribution expenses had been reflected for Funds showing Investment Class performance, returns would have been lower. 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. (Please see “Primary Risks for Fund Investors” in the prospectus.) Certain Funds invest a significant portion of their respective assets in foreign companies that may be subject to different risks than investments in securities of U.S. companies, including adverse political, social, economic, or other developments that are unique to a particular country or region. (Please see “Investing in Foreign Securities” in the prospectus.) Therefore, the prices of securities of foreign companies in particular countries or regions may, at times, move in a different direction than those of securities of U.S. companies. (Please see “Primary Risk of Fund Investors” in the prospectus.) Certain Funds generally invest a significant portion of their assets in a limited number of stocks, which may involve considerably more risk than a more broadly diversified portfolio because a decline in the value of any of these stocks would cause their overall value to decline to a greater degree. A broadly diversified portfolio, however, does not ensure a profit or guarantee against loss. This Review and Report must be preceded or accompanied by a prospectus. Please read the prospectus carefully before investing or sending money. 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 unmanaged, capitalization-weighted 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 small-cap Russell 2000 Index along with the next smallest eligible securities as determined by Russell. The Russell 2500 is an unmanaged, capitalization-weighted index of the 2,500 smallest publicly traded U.S. companies in the Russell 3000 index. The Russell 1000 is an unmanaged, capitalization-weighted index of domestic large-cap stocks. It measures the performance of the 1,000 largest publicly traded U.S. companies in the Russell 3,000 Index. The Russell Global ex-U.S. Small Cap Index is an index of global small-cap stocks, excluding the United States. The performance of an index does not represent exactly any particular investment as you cannot invest directly in an index. Distributor: Royce Fund Services, LLC.

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The Royce Funds and Rolling Returns

We believe strongly in the idea that a long-term perspective is crucial for determining the success of an investment approach. Flourishing in an up market is wonderful, but surviving a bear market by losing less (or not at all) is equally desirable. In any case, the true tests of a portfolio’s mettle are results over bull and bear periods. This is why we prefer to examine results that include up and down market phases—primarily by looking at rolling return periods.

When evaluating fund performance, it is common practice to review results for the most recent year (often the calendar year) along with its related longer-term trailing periods. However, a calendar-year return is not necessarily any more or less important to consider than any other 12-month period (or related trailing period) during a manager’s tenure. It is also true that few investors buy mutual funds on New Year’s Eve and then sell exactly five or 10 years later. Of course, the reality is that trailing returns ending last month or last quarter are the most commonly available and easily comparable results, so these otherwise arbitrary periods often drive investor decisions and flows.

    Keeping in mind that investors will buy and sell at any time throughout any given year, we think it makes sense to examine performance over a larger series of dates. We believe rolling returns offer a more effective measure because they provide a more accurate and in-depth picture of a portfolio’s performance. Rather than “point-in-time” results anchored by the end of the month or quarter,

rolling returns account for the fact that investors typically do not invest at the beginning of the current five- or 10-year period but instead are in fact investing over many periods.

    So instead of assuming that an investment was made on January 1, rolling returns calculate all of the periods starting not only in January, but also in February, March, April, etc. For example, a monthly five-year rolling return accounts for all of the five-year returns beginning at a given inception date and advancing one month sequentially. This method allows an investor to evaluate the consistency of a fund’s performance over time—including the ups and downs of market cycles, which are an important test of a manager’s skill.

    We believe that rolling returns provide a particularly robust analytical tool for evaluating manager performance, especially during volatile periods when simply shifting the performance date range one or two months in either direction can paint a very different picture.

Royce Funds¹ vs. The Benchmark²

Monthly Rolling Average Annual Return Periods and Relative Results Since Fund Inception or Most Recent 20 Years through 6/30/17

	Average Annual 10-Year Rolling Return				Average Annual 5-Year Rolling Return
FUND	PERIODS BEATING THE INDEX		FUND AVG (%)3	INDEX AVG (%)3	PERIODS BEATING THE INDEX		FUND AVG (%)3	INDEX AVG (%)3
U.S. EQUITY
Dividend Value	29/38	76%	7.8	7.3	57/98	58%	8.8	8.2
Low-Priced Stock	66/121	55%	8.2	6.7	119/181	66%	8.7	7.7
Micro-Cap	60/85	71%	7.9	6.2	92/145	63%	8.5	7.9
Opportunity	97/121	80%	9.6	6.7	133/181	73%	11.4	7.7
Pennsylvania Mutual	91/121	75%	8.9	6.7	127/181	70%	10.0	7.7
Premier	120/121	99%	10.5	6.7	131/181	72%	10.9	7.7
Small-Cap Leaders	25/49	51%	8.1	7.7	61/109	56%	7.9	7.6
Small-Cap Value	44/73	60%	9.0	7.8	76/133	57%	9.7	8.7
Small/Mid-Cap Premier	99/121	82%	9.4	6.7	139/181	77%	10.3	7.7
Smaller-Companies Growth	37/73	51%	8.5	7.8	54/133	41%	9.7	8.7
Special Equity	96/110	87%	9.3	6.7	106/170	62%	10.7	8.3
Total Return	72/121	60%	8.1	6.7	115/181	64%	9.4	7.7
GLOBAL/INTERNATIONAL EQUITY
Global Financial Services	19/43	44%	7.1	7.5	32/103	31%	7.1	7.7

¹ Included are all Royce Funds with at least 12 years of history.

² The Russell 2000 Index is the benchmark for most funds. Royce Micro-Cap Fund is compared to the Russell Microcap Index from the inception of that index on 6/30/00.

³ Average return shown is the average of all month-end trailing five- and 10-year total returns.

Past performance is no guarantee of future results. For more information on performance please see page 8.

This page is not part of the 2017 Semiannual Report to Shareholders | 9

MANAGERS’ DISCUSSION

Royce Dividend Value Fund (RDV)

Chuck Royce
Jay Kaplan, CFA

FUND PERFORMANCE

Royce Dividend Value Fund increased 7.7% for the year-to-date period ended June 30, 2017, outpacing its small-cap benchmark, the Russell 2000 Index, which was up 5.0% for the same period. The first half of 2017 saw a number of reversals in market leadership from 2016, and three factors that hurt relative performance in 2016 became positives in the first half of 2017. Mid-cap stocks, in which a large percentage of the Fund’s assets are invested, outpaced their small-cap peers (the Russell Midcap Index rose 8.0% in the first half); the Fund also benefited from its investments in international stocks, as non-U.S. equities meaningfully outperformed their domestic counterparts; and investments in capital markets companies, by far the portfolio’s largest industry group weighting and the home of several of its non-U.S. holdings, which substantially beat both the small-cap index as a whole and the capital markets companies in the Russell 2000 for the first half. Altogether, it was an impressive performance in a period when most U.S. small- and mid-cap dividend payers lagged.

    Dividend Value was up 4.3% for the first quarter versus a 2.5% gain for its benchmark. The Fund then enjoyed a solid second quarter, advancing 3.3% while the Russell 2000 again rose 2.5%. Dividend Value also outperformed the small-cap index for the since inception (5/3/04) period ended June 30, 2017.

WHAT WORKED... AND WHAT DIDN’T

Seven of the portfolio’s 11 equity sectors finished the first half with net gains. Financials and Industrials led by significant margins, followed by Materials. Results for each of the two top sectors were dominated by a single industry group—capital markets for Financials and machinery for Industrials. Interestingly, the Fund’s two top contributing positions came from other industries. Recordati is an Italian pharmaceuticals company. This industry has been one of the few high-growth areas in an otherwise sluggish Italian economy, with drug companies increasing output and exports over the last seven years, which has helped to draw investors to Recordati’s shares. Global staffing and services company—and top-10 holding—ManpowerGroup saw its stock benefit from improved topline growth and a strong bottom line in 2016, solid fiscal first-quarter 2017 earnings, and a brightening global employment picture.

    Another top-10 position, alternative asset manager KKR & Co. L.P. was helped by strong investment performance, growth in its balance sheet investments, and improved fee-related earnings. IDEX Corporation, also a top-10 holding, is a Norwegian machinery company specializing in fingerprint, imaging, and recognition technology. Its shares were somewhat volatile during the first half, but we were pleased to see a strong increase in revenues as the firm progressed toward the commercialization of its sensor solution for biometric credit cards.
    Of the four sectors that detracted from first-half performance—Energy, Consumer Discretionary, Consumer Staples, and Telecommunication Services—none made a significant negative impact. The only industry to do so was specialty retail (Consumer Discretionary), where secular shifts in shopping and spending habits, driven in large part by the deep discounts offered by Amazon, have been wreaking havoc on sales and margins over the last few years. We sold our shares of footwear, headwear, and sports apparel retailer Genesco as first-quarter results and revised full-year guidance fell well below expectations due to intensified competition and management’s overconfidence that it could rebalance inventory to compensate for a key fashion shift it missed last year in its Journeys footwear chain. Ongoing net losses from declining sales also led us to sell our shares in value-priced fashion retailer The Cato Corporation. Retail was not the only industry undergoing problems in the first half. Tumbling oil prices created formidable challenges for companies involved in energy, and land and platform rig operator (and long-time Royce holding) Helmerich & Payne was no exception, as sales were adversely affected. We retain our high regard for its innovative approach to its core business, which included the early adoption of flexible rigs, and like the way it has been executing through this latest round of challenges for its industry.

    Relative to the Russell 2000, the Fund benefited most from stock selection in its two top-performing industries—capital markets and machinery. Hurting relative results were our significantly lower weighting in Health Care, specifically surging biotechnology stocks. Dividends are scarce throughout Health Care in the Russell 2000, where less than 8% of the companies in the sector were dividend payers at the end of June 2017, which accounts for the sector’s perennial underweight in the portfolio. A combination of our underweight and ineffective stock picks also hampered results in Information Technology.

Top Contributors to Performance
Year-to-Date Through 6/30/17 (%)1
Recordati	0.50
ManpowerGroup	0.50
KKR & Co. L.P.	0.48
IDEX Corporation	0.44
Hunter Douglas	0.42
1 Includes dividends

Top Detractors from Performance
Year-to-Date Through 6/30/17 (%)2
Helmerich & Payne	-0.28
Genesco	-0.22
Compass Minerals International	-0.22
Western Union	-0.19
Cato Corporation (The) Cl. A	-0.18
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

The most notable change we made in the first half was a reduction in both exposure and the number of names in the struggling specialty retail group, where we parted ways with The Buckle, Shoe Carnival, and Stein Mart. We are satisfied with our relatively large international weighting as we expect continued improvement in the global growth picture during the second half of 2017. At the end of June, the Fund’s three largest sectors—Financials, Industrials, and Materials—were also our three biggest overweights, consistent with our belief that cyclical companies with growing earnings look likely to lead over the next few years.

10 | The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS RYDVX RDVIX RDIIX RDVCX

Performance and Expenses Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	SINCE INCEPTION (5/3/04)
RDV	7.72	20.07	3.82	11.02	6.85	8.74
Annual Operating Expenses: 1.34%
1 Not annualized

Relative Risk Adjusted Returns: Monthly Rolling Sharpe Ratios
Since Inception Through 6/30/17
On a monthly rolling risk-adjusted basis, the Fund outperformed the Russell 2000 in 100% of all 10-year periods and 66% of all 5-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	38/38	100%	0.46	0.40
5-year	65/98	66%	0.55	0.49

¹Average of monthly rolling Sharpe Ratios over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 5/3/04 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Dentsply Sirona	2.6
KKR & Co. L.P.	2.3
ManpowerGroup	2.3
First Republic Bank	2.1
IDEX Corporation	2.1
Quaker Chemical	2.0
Donaldson Company	1.9
Reliance Steel & Aluminum	1.9
Expeditors International of Washington	1.9
FLIR Systems	1.8

Portfolio Sector Breakdown
% of Net Assets
Financials	29.8
Industrials	28.1
Materials	13.3
Consumer Discretionary	9.2
Information Technology	7.5
Health Care	4.7
Energy	2.7
Utilities	1.4
Consumer Staples	1.2
Telecommunication Services	0.5
Real Estate	0.2
Miscellaneous	1.1
Cash and Cash Equivalents	0.3

Calendar Year Total Returns (%)
YEAR	RDV
2016	16.4
2015	-5.7
2014	-2.1
2013	30.7
2012	16.9
2011	-4.5
2010	30.1
2009	37.7
2008	-31.5
2007	-0.0
2006	19.9
2005	7.3

Upside/Downside Capture Ratios

Periods Ended 6/30/17 (%)

	UPSIDE	DOWNSIDE
10-Year	86	81
From 6/30/04 (Start of Fund’s First Full Quarter)	87	76

Portfolio Diagnostics
Fund Net Assets	$198 million
Number of Holdings	106
Turnover Rate	11%
Average Market Capitalization1	$4,263 million
Weighted Average P/E Ratio2,3	20.2x
Weighted Average P/B Ratio2	2.8x
Active Share4	97%
U.S. Investments (% of Net Assets)	72.8%
Non-U.S. Investments (% of Net Assets)	26.9%

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 (6% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Certain immaterial adjustments were made to the net assets of Royce Dividend Value Fund at 6/30/15 for financial reporting purposes, and as a result the net asset values for shareholder transactions on that date and the calendar year Total Returns (%) based on those net asset values differ from the adjusted net asset values and calendar year total returns reported in the Financial Highlights. Operating expenses reflect the Fund’s gross total annual operating expenses for the Service Class as of the Fund’s most current prospectus and include management fees, 12b-1 distribution and service fees, and other expenses. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. The Sharpe Ratio is calculated for a specified period by dividing a fund’s annualized excess returns by its annualized standard deviation. The higher the Sharpe ratio, the better the fund’s historical risk-adjusted performance. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders | 11 

MANAGERS’ DISCUSSION

Royce Global Financial Services (RFS)

Chuck Royce
Chris Flynn

FUND PERFORMANCE

Royce Global Financial Services Fund advanced an impressive 9.8% for the year-to-date period ended June 30, 2017, well ahead of both its small-cap benchmark, the Russell 2000 Index, and the Russell 2500 Financial Services Index, which advanced 5.0% and 3.3%, respectively, for the same period. As we detail below, it was a particularly strong period for our intentionally unconventional approach to financial companies. It was also an opportune time in which to take a global approach to equities, virtually regardless of sector. The first half of 2017 was the best for stocks on a global basis since 2009.

    The Fund’s strength was consistent on both an absolute and relative basis throughout the first half. During the first quarter, Global Financial Services rose 4.5% versus respective gains of 2.5% and 1.3% for the small-cap index and the financial services component of the Russell 2500 Index. The second quarter saw more of the same as the Fund increased 5.1% versus 2.5% for the Russell 2000 and 2.0% for the Russell 2500 Financial Services Index. Second-quarter strength came from robust results for subindustries such as asset management & custody banks (within capital markets) and regional banks. Given the Fund’s somewhat unconventional sector fund approach, longer-term relative results were less consistent, though satisfying to us on an absolute basis. Global Financial Services outpaced the financial services companies in the Russell 2500 Index for the one-year and since inception periods (12/31/03) ended June 30, 2017. The bookend nature of this short- and long-term outperformance suggests to us that, with interest rates on the rise, the portfolio can continue to benefit from more historically typical conditions. The Fund also beat the Russell 2000 for the five-year period ended June 30, 2017 while trailing narrowly for the since inception period.

WHAT WORKED... AND WHAT DIDN’T

Our approach to the financial sector is non-traditional in that we have typically been underweight in banks and significantly overweight in capital markets, in large part because our position as a small-cap asset manager makes companies in this industry easier for us to understand at a deep level. Over the last couple of years, we have been increasingly drawn to non-traditional asset managers, specifically in the alternative asset management space, which we think is an undervalued zone in an asset-light business that is not well understood by other investors. U.K.-based emerging market bond specialist Ashmore Group was the best performer in the group as it benefited from increased net inflows and a rebound in emerging market bond performance. Alternative asset manager Fortress Investment Group, LLC was a strong contributor due to its takeover by Japan’s SoftBank. Financial exchanges & data was another standout subindustry, thanks in large part to MarketAxess Holdings, which manages the leading electronic bond trading platform. Its shares soared early in the year, lifted by significant increases in total trading volume, which included records for U.S. high-grade, Eurobond, and emerging market bond average daily volumes. It was a top-20 position at the end of the semiannual period. The portfolio’s top contributor in the first half was FirstService Corporation, a Toronto-based provider of real estate property management services. Its shares rose throughout the year’s first six months thanks to strong revenue and profit growth that exceeded expectations.

    Toronto-based Dundee Corporation, which is involved in wealth management, real estate, and natural resources, was the largest detractor in the first half as mounting losses in mining and resource based activities put downward pressure on its shares. BofI Holding is the holding company for Bank of Internet USA, a consumer-focused nationwide savings bank. Its previously rapid growth was slowed after the firm reported disappointing earnings and a deceleration in loan growth. MBIA provides financial guarantee insurance and has significant exposure to Puerto Rican bonds. Investors became increasingly concerned that losses on these bonds might have a meaningfully negative impact on MBIA’s balance sheet and credit rating.

Top Contributors to Performance
Year-to-Date Through 6/30/17 (%)1
FirstService Corporation	1.05
Ashmore Group	0.67
Fortress Investment Group LLC Cl. A	0.65
Live Oak Bancshares	0.55
MarketAxess Holdings	0.52
1 Includes dividends

Top Detractors from Performance
Year-to-Date Through 6/30/17 (%)2
Dundee Corporation Cl. A	-0.41
BofI Holding	-0.26
MBIA	-0.23
JSE	-0.23
Medley Management Cl. A	-0.19
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

The Fund’s long-term holdings continue to satisfy three criteria: business models that are highly profitable and preferably asset-light; industries where we believe our asset management experience yields relevant insights; and subsectors across financial services that appear positioned for above-average revenue growth. Areas where we see attractive growth prospects currently include specialized traditional asset management, private equity and private debt alternative asset management, wealth management, boutique M&A advisory firms, non-traditional providers of transaction platforms, and financial service providers in emerging economies. In addition, the Fund aims for opportunistic purchases in companies and industries that we believe are heading for improved conditions. The recent increased weighting in banks falls into this category. We anticipate that an economic environment with a steeper yield curve, a moderate pick-up in economic growth, and lighter regulation will support faster loan growth with expanding margins for many small-cap banks. The outlook we have developed from meeting with companies is one of increasing cyclical growth, particularly outside the U.S., though at a “just right” Goldilocks pace, and not so fast as to lead to an aggressive central bank response.

12 | The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYFSX RGFIX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	SINCE INCEPTION (12/31/03)
RFS	9.83	23.41	5.67	14.13	5.85	8.17
Annual Gross Operating Expenses: 1.78% Annual Net Operating Expenses: 1.60%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone™. 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 131 for additional information.

Value of $10,000

Invested on 12/31/03 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
E-L Financial	3.0
FirstService Corporation	2.9
Ashmore Group	2.5
First Citizens BancShares Cl. A	2.5
Popular	2.3
Sprott	2.3
Northern Trust	2.2
Live Oak Bancshares	2.1
Franco-Nevada Corporation	2.1
Virtu Financial Cl. A	2.1

Portfolio Industry Breakdown
% of Net Assets (Subject to Change)
Capital Markets	48.8
Banks	17.2
Real Estate Management & Development	7.2
Insurance	6.8
IT Services	3.0
Software	2.5
Metals & Mining	2.1
Professional Services	1.7
Marine	1.4
Thrifts & Mortgage Finance	1.2
Investment Companies	1.0
Equity Real Estate Investment Trusts (REITs)	0.9
Diversified Financial Services	0.3
Hotels, Restaurants & Leisure	0.2
Diversified Consumer Services	0.1
Internet Software & Services	0.1
Miscellaneous	3.0
Cash and Cash Equivalents	2.5

Upside/Downside Capture Ratios
Periods Ended 6/30/17 (%)
	UPSIDE	DOWNSIDE
10-Year	87	90
Fund’s First Full Quarter (12/31/03)	87	81

Calendar Year Total Returns (%)
YEAR	RFS
2016	12.9
2015	-4.7
2014	3.5
2013	42.0
2012	20.7
2011	-11.3
2010	18.5
2009	32.1
2008	-35.4
2007	-4.7
2006	24.8
2005	12.2
2004	15.1

Portfolio Country Breakdown1,2
% of Net Assets
United States	56.2
Canada	15.3
United Kingdom	8.8
Switzerland	2.6
India	1.9
France	1.7
Hong Kong	1.6
South Africa	1.6
Brazil	1.6

1	Represents countries that are 1.5% or more of net assets.
2	Securities are categorized by the country of their headquarters.

Portfolio Diagnostics
Fund Net Assets	$52 million
Number of Holdings	92
Turnover Rate	10%
Average Market Capitalization1	$2,206 million
Weighted Average P/E Ratio2,3	19.4x
Weighted Average P/B Ratio2	2.1x
Active Share4	99%

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 (8% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Gross operating expenses reflect the Fund’s gross total annual operating expenses for the Service Class and include management fees, 12b-1 distribution and service fees, other expenses and acquired fund fees and expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive fees and/or reimburse expenses to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.49% through April 30, 2018. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders  |  13

	MANAGERS’ DISCUSSION
Royce International Micro-Cap Fund (RMI)

Jim Harvey, CFA
Dilip Badlani, CFA

FUND PERFORMANCE
The first half of 2017 saw an impressive rebound for international equities, and Royce International Micro-Cap Fund fully participated. For the year-to-date period ended June 30, 2017, the Fund advanced 15.2%, just ahead of the 15.0% gain for its benchmark, the Russell Global ex-U.S. Small Cap Index, for the same period. After several years in which international small- and micro-cap stocks languished, the current resurgence has been more than welcome.
      The Fund got off to a strong start on an absolute basis in 2017, climbing 8.1% in the first quarter compared to 9.0% for its international small-cap benchmark. In the second quarter, the Fund improved on a relative basis, gaining 6.6% versus 5.5% for the benchmark. We were also pleased that International Micro-Cap beat the Russell Global ex-U.S. Small Cap for the one- and three-year periods ended June 30, 2017.

WHAT WORKED... AND WHAT DIDN’T

Nine of the Fund’s 10 equity sectors made positive contributions to first-half performance, with the most substantial positive impacts coming from its three largest—Information Technology, Industrials, and Consumer Discretionary. At the industry level, three technology industries led by a wide margin—IT services, semiconductors & semiconductor equipment, and electronic equipment, instruments & components. Energy was the only sector that detracted. It did so with comparatively minor losses. Net losses at the industry level were similarly modest, with oil, gas & consumable fuels (Energy) and distributors (Consumer Discretionary) detracting most.

The Fund’s top contributing position for the semiannual period was South Korea’s Modetour Network. One of that nation’s largest travel agencies, the company provides a wide range of services that include overseas bookings, package tours, air courier services, and discounted airline tickets. Modetour has benefited from South Korea’s growing GDP per capita, which has led to increased spending on travel. Seeing ongoing potential, we held a decent-sized position at the end of June. Conviviality is the largest distributor of liquor in the United Kingdom and also operates franchised off-license and convenience chain stores in the U.K. The company was formed through a series of acquisitions that were completed in 2015-16. The anticipated synergies from the combination have recently begun to bear fruit, lifting its stock price.

Canada’s AGT Food and Ingredients made the biggest negative impact among the portfolio’s holdings. The company exports pulses—edible seeds—as well as rice, wheat, and other staples. It experienced a major headwind as its key market of India had higher-than-anticipated pulse output of its own, thus curtailing demand for imports. There has also been heightened uncertainty surrounding a possible policy shift by the Indian government for imported pulses. Liking its core business and long-term prospects, we held shares at the end of June. We felt less confident about Quintis, an Australian firm that manages and cultivates sandalwood forests to produce sandalwood oil products. The resignation of its CEO and co-founder in March created uncertainty over the pricing of its Chinese contracts, which exerted substantial downward pressure on its shares. We chose to exit the position over concerns about the company’s uncertain future, including what we deemed to be growing corporate governance risk.

Relative to the Russell Global ex-U.S. Small Cap, the Fund benefited most from savvy stock selection in Consumer Discretionary names, our larger weighting in Information Technology, and our significantly lower exposure to the Energy sector, in which share prices mostly followed the downward trajectory of oil prices. Conversely, the portfolio’s cash position had the largest negative effect while stock selection in Health Care and Financials also impeded relative results. Based on geography, positions in Japan and the U.K. contributed most while those in the U.S. and Greece topped the list of countries that detracted.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
Modetour Network	0.62
Conviviality	0.61
Nova Measuring Instruments	0.59
Integrated Micro-Electronics	0.54
Proact IT Group	0.40
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
AGT Food and Ingredients	-0.37
Quintis	-0.37
Aegean Marine Petroleum Network	-0.19
AURELIUS Equity Opportunities	-0.18
Handsome	-0.18
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

Even after the strong start to 2017, we continue to find attractive opportunities in international micro-cap companies. Valuations in many parts of the world still looked attractive to us at the end of June, especially in the context of expanding global growth. Recent data showed that the second quarter of 2017 was the eurozone’s best in more than six years, boosted by strong manufacturing numbers, job growth, and elevated business confidence. Additionally, in mid-July China reported surprisingly strong GDP growth for the second quarter, driven by increased retail sales, investment, and industry output—all of which exceeded estimates. We also think the historical performance pattern of international small-caps relative to their large-cap peers is relevant. For example, the Russell Global ex-U.S. Small Cap outperformed the Russell Global ex-U.S. Large Cap in both rising and falling rate interest rate environments, but enjoyed a wider edge when rates were moving up. In fact, U.S. dollar investors received the best results when German Bund Yields were rising. This is arguably due to three overlapping factors: bond yields usually rise when economies are improving, international small-caps have more cyclical exposure than international large-caps, and Bund Yields have often risen during periods of U.S. dollar weakness, resulting in enhanced gains for U.S. dollar investors.

14  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS   ROIMX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	SINCE INCEPTION (12/31/10)
RMI	15.23	22.27	3.16	8.97	3.57
Annual Gross Operating Expenses: 3.35%  Annual Net Operating Expenses: 1.64%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 12/31/10 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Mantra Group	1.3
Atento	1.3
Huchems Fine Chemical	1.3
Minerva	1.3
Western Forest Products	1.2
Exco Technologies	1.2
IDOM	1.1
I.T	1.1
Eugene Technology	1.1
Sitronix Technology	1.1

Portfolio Sector Breakdown
% of Net Assets
Industrials	21.6
Consumer Discretionary	21.3
Information Technology	17.3
Consumer Staples	9.5
Financials	7.1
Real Estate	6.4
Materials	6.1
Health Care	4.6
Energy	1.2
Cash and Cash Equivalents	4.9

Calendar Year Total Returns (%)
YEAR	RMI
2016	6.3
2015	-1.0
2014	-2.4
2013	18.9
2012	13.6
2011	-21.5

Portfolio Country Breakdown1,2
% of Net Assets
Japan	19.5
United Kingdom	9.6
Canada	8.2
Taiwan	8.0
South Korea	6.3
Hong Kong	4.9
Australia	4.1
India	3.1
Sweden	3.1
Germany	3.0

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	$7 million
Number of Holdings	131
Turnover Rate	48%
Average Market Capitalization1	$492 million
Weighted Average P/E Ratio2,3	15.9x
Weighted Average P/B Ratio2	2.0x
Active Share4	99%

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 (4% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 2% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Gross operating expenses reflect total gross annual operating expenses and include management fees, 12b-1 distribution and service fees, and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive its fees and/or reimburse operating expenses, to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.64% through April 30, 2018 and at or below 1.99% through April 30, 2027. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017.

The Royce Funds 2017 Semiannual Report to Shareholders |  15

	MANAGERS’ DISCUSSION
Royce International Premier Fund (RIP)

David Nadel
Mark Rayner, CA

FUND PERFORMANCE
The first half of 2017 saw an impressive rebound for international equities, and the high-quality approach we use in Royce International Premier Fund more than fully participated. For the year-to-date period ended June 30, 2017, the Fund advanced 22.3%, well ahead of the 15.0% gain for its benchmark, the Russell Global ex-U.S. Small Cap Index, for the same period. After several years in which international small-caps languished, the current resurgence has been more than welcome.
      The Fund got off to a strong start in 2017, climbing 9.3% in the first quarter compared to 9.0% for its international small-cap benchmark. In the second quarter, the Fund did even better on both an absolute and relative basis, gaining 11.9% versus 5.5% for the index. We were also pleased that International Premier beat the Russell Global ex-U.S. Small Cap for the one-, three-, five-year, and since inception (12/31/10) periods ended June 30, 2017. The Fund’s average annual total return since inception was 7.2%.

WHAT WORKED... AND WHAT DIDN’T

All of the Fund’s nine equity sectors made positive contributions to first-half results. Industrials led by a sizable margin while Information Technology also made an impressive contribution, as did Financials and Health Care. By making the smallest contribution to first-half results, the Energy sector finished last.

Health care equipment & supplies (Health Care) enjoyed a substantial advantage over the portfolio’s other industry groups in the first half of 2017. Its high positive impact was driven by a trio of holdings—Fisher & Paykel Healthcare, a New Zealand company that makes products which treat sleep apnea, STRATEC Biomedical, a German firm that provides automated equipment and systems that analyze chemical and biological compounds, and Germany’s Carl Zeiss Meditec, which makes screening, diagnostic, and therapeutic systems that treat cataracts, glaucoma, and other vision problems. Showing the diversity of both the sector and geographies, Health Care was also home to the Fund’s two largest detractors at the position level. Shares of French veterinary medicine provider Virbac rallied late in 2016 after the U.S. Food & Drug Administration rescinded the warning letter on its St. Louis facility, only to take another hit in mid-March 2017 when an otherwise solid earnings announcement was accompanied by tepid guidance, including an anticipated decline in fiscal first-quarter revenues. We began to add shares in May. We also built our position in Brazilian dental benefits provider OdontoPrev after first-quarter results revealed some margin erosion and less robust growth than its competitors. We viewed this as a temporary setback and believe that OdontoPrev will remain a market leader.

Two financial companies contributed most overall to first-half results. Shares of Indian consumer finance business Bajaj Finance rebounded off a relatively weak fourth quarter of 2016 that resulted from the government’s surprising decision to demonetize in November. During the first half of 2017, however, fiscal third-quarter results (released in January) revealed margin improvement and high asset quality while fiscal fourth-quarter results released in May showed the strength of Bajaj’s 320-city presence in its consumer and commercial lending operations. We believe the company can continue to benefit from its strong position in India’s nascent credit markets. Swiss financial advisory firm Partners Group Holding saw its stock climb on the back of results reported in January that included higher-than-expected assets under management and improved profitability, as well as the market’s growing realization that much of the firm’s performance-fee stream recurs more frequently than is the industry’s norm. Japan’s Relo Group, which specializes in corporate benefits and overseas relocation support, enjoyed a terrific first half as the firm experienced better-than-anticipated growth in its property management business.

The Fund’s relative advantage over its benchmark in the first half was mostly the result of strong stock selection in three of its four largest sectors—Information Technology, Industrials, and Financials. By contrast, stock selection in Materials and our cash position created modest drags on first-half results. On a geographic basis, the portfolio’s large weightings in the U.K. and Japan helped performance while Brazil caused a minor drag.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
Bajaj Finance	1.60
Partners Group Holding	0.99
Relo Group	0.87
XP Power	0.84
Mayr-Melnhof Karton	0.76
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
Virbac	-0.24
OdontoPrev	-0.19
SH Kelkar & Company	-0.16
Spotless Group Holdings	-0.01
Fidessa Group	0.00
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

We were encouraged by the recent victories for more moderate parties in France, Austria, and the Netherlands. We are also hopeful that Theresa May’s shaky win may stimulate productive debate about the details of the Brexit. More important, we see the emerging data supporting strong growth in the eurozone as a significantly positive development. This year’s second quarter was the eurozone’s best in more than six years, buoyed by strong manufacturing numbers, job growth, and elevated business confidence. Moreover, we continue to see improving profitability from many holdings. Prior to 2017, profit margins appeared spring-loaded for several companies because their respective recoveries from the 2008-09 Financial Crisis were slow and often fitful. We have therefore been pleased to see that recent margin improvement for several holdings has been driven by ROIC-oriented key performance indicators. For disciplined quality-centric investors, then, the investment opportunities in high-quality international small-caps remain attractive from our perspective.

16  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYIPX RIPNX RINRX RINPX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	SINCE INCEPTION (12/31/10)
RIP	22.33	20.11	7.73	11.66	7.18
Annual Gross Operating Expenses: 1.84%  Annual Net Operating Expenses: 1.44%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 12/31/10 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
VZ Holding	3.2
Mayr-Melnhof Karton	3.0
Partners Group Holding	2.9
Meitec Corporation	2.5
USS	2.5
Santen Pharmaceutical	2.5
Relo Group	2.3
Vakrangee	2.3
Thermador Groupe	2.3
Bajaj Finance	2.2

Portfolio Sector Breakdown
% of Net Assets
Industrials	24.6
Health Care	19.2
Information Technology	17.9
Financials	10.7
Materials	10.3
Consumer Discretionary	5.6
Consumer Staples	3.4
Real Estate	2.3
Energy	1.4
Cash and Cash Equivalents	4.6

Upside/Downside Capture Ratios
Periods Ended 6/30/17 (%)
	UPSIDE	DOWNSIDE
Fund’s First Full Quarter (12/31/10)	107	83

Calendar Year Total Returns (%)
YEAR	RIP
2016	-1.1
2015	16.2
2014	-8.2
2013	18.3
2012	23.4
2011	-16.8

Portfolio Country Breakdown1,2
% of Net Assets
Japan	18.7
United Kingdom	13.3
Switzerland	11.6
Australia	9.0
Germany	6.8
India	6.2
France	5.5
Brazil	4.2
Canada	3.7
Sweden	3.3
Austria	3.0

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	$94 million
Number of Holdings	53
Turnover Rate	23%
Average Market Capitalization1	$2,193 million
Weighted Average P/E Ratio2,3	27.4x
Weighted Average P/B Ratio2	3.8x
Active Share4	99%

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 (2% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 2% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Price and total return information is based on net asset values for shareholder transactions. Certain immaterial adjustments were made to the net assets of Royce International Premier Fund at 6/30/14 for financial reporting purposes, and as a result the net asset values for shareholder transactions and the calendar year total returns based on those net assets values differ from the adjusted net values and calendar year total returns reported in the Financial Highlights. Gross operating expenses reflect total gross annual operating expenses and include management fees, 12b-1 distribution and service fees, and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive its fees and/or reimburse operating expenses to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.44% through April 30, 2018. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell Global ex-U.S. Small Cap). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders | 17

	MANAGER’S DISCUSSION
Royce Low-Priced Stock Fund (RLP)

Jim Stoeffel

FUND PERFORMANCE
Royce Low-Priced Stock Fund was up 1.0% for the year-to-date period ended June 30, 2017, trailing its small-cap benchmark, the Russell 2000 Index, which gained 5.0% for the same period. The leadership shifts that characterized the first quarter of 2017 remained in place for most of the second quarter as well, as growth stocks, large-caps, healthcare, and non-U.S. equities all stayed in the lead after lagging in 2016. The Fund was flat in the first quarter, returning 0.0% while the Russell 2000 was up 2.5%. There was some improvement on an absolute basis in the second quarter, with the Fund advancing 1.0% versus a 2.5% gain for the small-cap benchmark. Low-Priced Stock outperformed the Russell 2000 for the 20-year and since inception (12/15/93) periods ended June 30, 2017. The Fund’s average annual total return since inception was 9.9%.

WHAT WORKED... AND WHAT DIDN’T

Five of the portfolio’s 11 equity sectors made positive contributions to first-half performance. Information Technology led by a sizable margin, followed by notable net gains for Health Care and Industrials. Of the six sectors that detracted from results, only Consumer Discretionary and Energy made appreciable negative impacts. At the industry level, health care equipment & supplies (Health Care) made the biggest contribution, followed by two groups in Information Technology—semiconductors & semiconductor equipment and electronic equipment, instruments & components. Energy equipment & services (Energy), where tumbling oil prices impacted the shares of tech-based energy product maker Tesco Corporation, and chemicals (Materials) were among the industries that detracted most.
      No industry group, however, had a bigger negative effect than specialty retail (Consumer Discretionary), which continues to struggle with shifts in consumer spending and shopping habits, along with the ensuing margin contraction, developments keyed to a large degree by the omnipresence of Amazon. Two holdings from this industry detracted most from the Fund’s first-half results at the position level. Value-priced department store operator Stein Mart suffered from ongoing sales pressure associated with the shift to online shopping. This formidable challenge was exacerbated by a series of internal merchandising miscues. Despite our concern about the long-term shift to online, we held a small position at the end of the first half based on our view that correcting the internal miscues should provide a better exit point. We chose to sell our position in Ascena Retail Group, which is a holding company for several national chains of women’s and girls’ clothing stores, including Ann Taylor, Lane Bryant, and Justice, in the face of declining sales.
      The Fund’s top contributor at the position level was Canadian medical device maker Novadaq Technologies. The company provides a unique solution in the rapidly growing intraoperative fluorescent imaging market. The company’s products, which are used primarily to treat vascular and ophthalmic diseases and conditions, allow clinicians to make better informed decisions during surgery and have very good safety profiles. Reflecting the strength of its technology, Novadaq was the subject of a proposed acquisition by industry leader Stryker Corporation, prompting us to sell our position in June at an attractive premium. Top-20 holding Kratos Defense & Security Solutions is a defense contractor offering services in weapons systems lifecycle support, military weapon range, and security and surveillance systems. Increased revenue and earnings were driven by ongoing high demand for its satellite communications, cybersecurity, and technology and training divisions.
      Relative to the Russell 2000, stock selection woes in Consumer Discretionary, mostly in specialty retail, hurt first-half results most. Our much lower weighting in Health Care—where biotechnology led the small-cap index—and stock picks in Materials also affected relative results, but made a comparatively smaller negative impact. Conversely, stock selection was a strength in Industrials and in the struggling Energy sector, while our lower weighting in banks—as well as stock picking in that industry and in capital markets—gave us a relative edge in Financials.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
Novadaq Technologies	0.43
Kratos Defense & Security Solutions	0.37
Novanta	0.36
Kirkland Lake Gold	0.34
Zealand Pharma	0.28
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
Stein Mart	-0.48
Ascena Retail Group	-0.45
Tesco Corporation	-0.32
BioAmber	-0.32
Inventure Foods	-0.28
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

We made no significant changes to the portfolio during the first half. At the end of June, we remained overweight in the Fund’s three largest sectors: Information Technology, Industrials, and Consumer Discretionary while also having more exposure to Energy. Consumer stocks across several industries provide some of the most intriguing valuations among low-priced stocks, although these must be balanced against the significant challenges retailers face as market share continues its inexorable march to online shopping and, at least for the foreseeable future, reduced margins. We view both industrial and energy stocks as well positioned to benefit from a more relaxed U.S. regulatory environment and also continue to see a number of secular trends such as the Internet of Things and mobile computing that carry positive implications for small-cap technology companies with attractive niche businesses. Finally, while we remained substantially underweight in Health Care, we have been selectively adding to positions in later-stage, niche medical device companies that we believe have created defensible competitive positions.

18  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYLPX RLPHX RLPIX RLPRX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	SINCE INCEPTION (12/15/93)
RLP	0.97	20.17	-2.37	3.88	2.09	6.21	8.94	9.91
Annual Operating Expenses: 1.53%  Annual Net Operating Expenses: 1.50%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 12/15/93 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Zealand Pharma	1.1
CryoLife	1.0
AV Homes	1.0
American Outdoor Brands	0.9
Ardmore Shipping	0.9
CPI Aerostructures	0.9
AtriCure	0.9
Nautilus	0.9
LSI Industries	0.9
Clarkson	0.8

Portfolio Sector Breakdown
% of Net Assets
Information Technology	23.0
Industrials	19.7
Consumer Discretionary	17.6
Financials	13.0
Energy	7.1
Health Care	6.5
Materials	4.6
Consumer Staples	1.2
Telecommunication Services	0.8
Real Estate	0.5
Miscellaneous	4.0
Cash and Cash Equivalents	2.0

Calendar Year Total Returns (%)
YEAR	RLP
2016	16.1
2015	-10.4
2014	-3.4
2013	12.9
2012	4.5
2011	-14.6
2010	31.5
2009	53.6
2008	-36.0
2007	2.3
2006	19.0
2005	9.7
2004	13.6
2003	44.0
2002	-16.3

Upside/Downside Capture Ratios
Periods Ended 6/30/17 (%)
	UPSIDE	DOWNSIDE
10-Year	83	111
From 12/31/93 (Start of the Fund’s First Full Quarter)	101	94

Portfolio Diagnostics
Fund Net Assets	$284 million
Number of Holdings	165
Turnover Rate	17%
Average Market Capitalization1	$702 million
Weighted Average P/B Ratio2	1.8x
Active Share3	95%
U.S. Investments (% of Net Assets)	82.1%
Non-U.S. Investments (% of Net Assets)	15.9%

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	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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Price and total return information is based on net asset values for shareholder transactions. Certain immaterial adjustments were made to the net assets of Royce Low-Priced Stock Fund at 6/30/13 for financial reporting purposes, and as a result the net asset values for shareholder transactions and the calendar year total returns based on those net asset values differ from the adjusted net asset values and calendar year total returns reported in the Financial Highlights. Gross operating expenses reflect the Fund’s total gross annual operating expenses and include management fees, 12b-1 distribution and service fees, other expenses, and acquired fund fees and expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive fees and/or reimburse operating expenses to the extent necessary to maintain the Fund’s net annual operating expenses (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business) at or below 1.49% through April 30, 2018. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders  |  19

	MANAGERS’ DISCUSSION
Royce Micro-Cap Fund (RMC)

Jim Stoeffel
Brendan Hartman

FUND PERFORMANCE
Royce Micro-Cap Fund gained 2.0% for the year-to-date period ended June 30, 2017, falling short of both its benchmarks, the Russell Microcap Index, which was up 4.2%, and the small-cap Russell 2000 Index, which advanced 5.0% for the same period. During the first half of 2017, there was both a reversal in small-cap leadership from value to growth stocks and some inconsistency in relative results for micro-cap companies vis-à-vis their small-cap siblings.
    The first quarter proved the most challenging period for the Fund on a relative basis. Micro-Cap was down 0.7% for the quarter compared to respective gains of 0.4% and 2.5% for the micro-cap and small-cap indexes. The Fund then enjoyed solidly positive results on an absolute basis, up 2.7% in the second quarter marginally outpacing the Russell 2000 (+2.5%) while trailing the Russell Microcap (+3.8%) in this same period. In addition, the Fund outperformed the Russell 2000 for the 20-, 25-year, and since inception (12/31/91) periods ended June 30, 2017. (Data for the Russell Microcap only goes back to June 30, 2000.) The Fund’s average annual total return since inception was 10.9%.

WHAT WORKED... AND WHAT DIDN’T

Seven of the Fund’s 10 equity sectors finished the semiannual period in the black, with Health Care and Information Technology leading, followed by Industrials. Consumer Discretionary and, to a lesser degree, Energy made the biggest negative impacts while net losses for Consumer Staples were modest. At the industry level, the top contributor for the first half was health care equipment & supplies (Health Care), with the bulk of its contribution coming in the second quarter from two medical device makers, Novadaq Technologies, which was acquired, and Tactile Systems Technology. Machinery (Industrials) came next, with several companies contributing, including Kornit Digital, Alimak Group, and Kadant. It was followed by semiconductors & semiconductor equipment (Information Technology). Detractors at the industry level included the specialty retail group (Consumer Discretionary), where companies continued to struggle with secular shifts in consumer spending and behavior, and energy equipment & services (Energy), where tumbling oil prices impacted the shares of tech-based energy product maker Tesco Corporation.

Capital equipment subsystem provider Ultra Clean Holdings was the Fund’s top contributor at the position level in the first half. The company has been gaining market share with key OEM customers in a vibrant environment for semiconductor capital equipment spending. We held shares at the end of June because the rise in its shares has been driven primarily by earnings growth rather than multiple expansion and because we think Ultra Clean is positioned to grow faster than its underlying industry. Corium International manufactures transdermal patches that range from drug delivery to consumer products. While historically a contract manufacturer, Corium has been developing its own generic drugs over the past several years to leverage its delivery expertise. Constructive results in early clinical trials helped to push its shares higher.

Value-priced department store operator Stein Mart detracted most from first-half results. Like many retailers, it suffered from ongoing sales pressure associated with the shift to online shopping. This challenge was exacerbated by a series of internal merchandising miscues. We held a small position at the end of the first half based on our view that correcting the internal miscues should provide a better exit point. CUI Global offers a unique solution for measuring pipeline gas quality that’s quicker, cheaper, and more accurate than other existing technologies. While orders were respectable and the sales pipeline looks solid, the delivery schedule proved longer than expected. This exerted downward pressure on its shares, especially given CUI Global’s relatively small size and resources. Proceeding cautiously, we added shares in the first half because we believe its technology can ultimately be monetized successfully.
    Relative to the Russell Microcap, the Fund was disadvantaged most in the first half by poor stock selection in Consumer Discretionary, particularly in specialty retail, and Information Technology in the electronic equipment, instruments & components group. Conversely, we benefited from our underweight and better stock picking in Financials while enjoying a smaller advantage from stock selection in the Energy sector.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
Ultra Clean Holdings	0.59
Corium International	0.50
Novadaq Technologies	0.39
Everspin Technologies	0.39
Novanta	0.34
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
Stein Mart	-0.49
CUI Global	-0.35
Tesco Corporation	-0.33
BioAmber	-0.31
Kirkland’s	-0.31
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

We did not make significant changes during the first half. We continued to build positions in financial stocks, particularly in banks where we believe micro-cap names can benefit from a more relaxed regulatory environment. Financials remained, however, among our largest sector underweights at the end of June. We also maintained our lower exposure to Health Care, although we have been selectively adding to positions in medical device companies that we believe have created defensible competitive positions. Our largest weightings at the end of June remained Industrials, Information Technology, and Consumer Discretionary, with the first of these also reflecting our largest overweight. We continue to find value in all three of these sectors and view them as areas in which select companies have the potential to benefit from the relative strength of the U.S. economy.

20  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS   RYOTX RMCFX RYMCX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	25-YR	SINCE INCEPTION (12/31/91)
RMC	2.01	23.04	0.16	5.32	3.11	7.61	8.98	10.84	10.91
Annual Operating Expenses: 1.48%
1 Not annualized

Relative Returns: Monthly Rolling Average Annual Return Periods

Since Russell Microcap’s Inception (6/30/00) Through 6/30/17

On a monthly rolling basis, the Fund outperformed the Russell Microcap in 71% of all 10-year periods; 63% of all 5-year periods; and 53% of all 1-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	60/85	71%	7.9	6.2
5-year	92/145	63%	8.5	7.9
1-year	102/193	53%	10.5	10.3

¹Average of monthly rolling average annual total returns over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 6/30/00 (Russell Microcap Index
Inception) as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Zealand Pharma	1.1
CryoLife	1.0
AV Homes	1.0
Citi Trends	0.9
QAD Cl. A	0.9
CPI Aerostructures	0.9
AtriCure	0.9
Ardmore Shipping	0.9
Silicon Motion Technology ADR	0.9
PC Connection	0.8

Portfolio Sector Breakdown
% of Net Assets
Industrials	21.6
Information Technology	19.5
Consumer Discretionary	15.2
Financials	12.7
Health Care	8.0
Energy	5.7
Materials	5.5
Real Estate	1.8
Consumer Staples	1.2
Telecommunication Services	0.8
Miscellaneous	4.6
Cash and Cash Equivalents	3.4

Calendar Year Total Returns (%)
YEAR	RMC
2016	19.7
2015	-13.3
2014	-4.1
2013	21.3
2012	8.0
2011	-12.1
2010	30.1
2009	55.7
2008	-40.9
2007	7.1
2006	22.3
2005	11.5
2004	15.8
2003	52.6
2002	-13.4

Upside/Downside Capture Ratios
Periods Ended 6/30/17 (%)
	UPSIDE	DOWNSIDE
10-Year	77	85
From 6/30/00 (Russell Microcap Index Inception)	91	81

Portfolio Diagnostics
Fund Net Assets	$222 million
Number of Holdings	164
Turnover Rate	17%
Average Market Capitalization1	$450 million
Weighted Average P/E Ratio2,3	21.2x
Weighted Average P/B Ratio2	1.9x
Active Share4	90%
U.S. Investments (% of Net Assets)	83.3%
Non-U.S. Investments (% of Net Assets)	13.3%

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 (23% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Investment Class (its oldest class). Price and total return information is based on net asset values calculated for shareholder transactions. Operating expenses reflect the Fund’s total annual operating expenses for the Investment Class as of the Fund’s most current prospectus and include management fees and other expenses. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell Microcap Index). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders |  21

	MANAGERS’ DISCUSSION
Royce Micro-Cap Opportunity Fund (ROS)

Bill Hench
Buzz Zaino, CFA

FUND PERFORMANCE
Royce Micro-Cap Opportunity Fund advanced 9.8% for the year-to-date period ended June 30, 2017, outperforming its benchmark, the Russell Microcap Index, which was up 4.2% for the same period. We were especially pleased with the success of our deep value approach because it came in a period that was otherwise highly challenging for value stocks. The Russell Microcap Value Index was up 1.9% in 2017’s first half versus 8.1% for the Russell Microcap Growth.
    Micro-Cap Opportunity outpaced the Russell Microcap in the first quarter, up 4.5% versus a 0.4% gain while in the second quarter it increased 5.0% compared to 3.8% for the benchmark. We were also happy that the Fund outperformed the Russell Microcap for the one-year period ended June 30, 2017, up 31.8% versus 27.6%. Micro-Cap Opportunity’s average annual total return since inception (8/31/10) was 12.8%.

WHAT WORKED... AND WHAT DIDN’T

Six of the Fund’s 10 equity sectors made contributions to first-half performance, with the most impressive result coming from Information Technology. We did much of the seed work in tech stocks 18-24 months ago, when a slow business cycle lowered share prices in many industries in which we have a perennial interest, such as semiconductors and electronic components. In fact, much of the appeal of technology stocks is that the business cycle tends to go to extremes on both the up and the down side, which often creates attractive opportunities as long as one has the patience to wait and the discipline to endure falling prices. In addition, other value investors tend to avoid or underinvest in these companies, which in our view often enhances the attractiveness of the valuations.

The recovery we’ve seen in many technology companies over the last several months has been keyed by one of the largest buildouts since the early days of the Internet. It has been benefiting companies in a number of industries because the expansion encompasses multiple developments and innovations, including the move from 4G to 5G, artificial intelligence, autonomous driving, public and private cloud storage, and the expansion of the semiconductor industry in China. Prices in many cases began to exceed our sell targets in the spring, leading us to trim our overall exposure to the sector. However, we are confident that the buildout is in its early stages, so we will be watching carefully (as we always do) for opportunities to materialize.

Four industry groups from the sector helped to drive first-half results—electronic equipment, instruments & components, communications equipment, technology hardware storage & peripherals, and semiconductors & semiconductor equipment. The health care providers & services group also made a notable contribution to performance. KEMET Corporation, a solid tantalum and multilayer ceramic capacitor manufacturer that was also the top contributor in 2016’s fourth quarter, was the Fund’s top performer at the position level. Strong sales and earnings combined with margin expansion to fuel the rise of its shares. Nimble Storage is a leader in predictive flash storage solutions, a niche with growing importance in cloud storage, which helps to explain why Hewlett-Packard announced that it would buy Nimble for about a 45% premium in March.

Of the four sectors that detracted from first-half results, only Energy made a significant negative impact—net losses for Real Estate, Telecommunication Services, and Consumer Discretionary were modest. Detracting most at the industry level were road & rail (Industrials) and energy equipment & services (Energy), where declining oil prices led to disappointing results. The former industry is home to Celadon Group, which provides long-haul, full-truckload freight services as well as supply chain management solutions. The company had accounting issues in which the financing of its assets was questioned. We think the combination of its very cheap valuation and the value of its trucking assets make a turnaround possible. CareDx specializes in diagnostic testing for transplant recipients. It’s endured some reimbursement issues that have hurt results, but we anticipate favorable resolutions and like the commercial potential of its technologies.

The Fund’s biggest relative advantage in the first half came overwhelmingly from stock selection in Information Technology, where our larger weighting also helped. Stock selection in Industrials and a lower exposure to Financials provided an additional relative edge. Conversely, our low weighting and ineffective stock picks in biotechnology (Health Care) hurt relative performance, as did stock selection in Telecommunication Services.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
KEMET Corporation	1.83
Nimble Storage	1.12
Community Health Systems	0.83
Ichor Holdings	0.75
Kratos Defense & Security Solutions	0.75
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
Celadon Group	-0.66
CareDx	-0.50
Pengrowth Energy	-0.48
Sucampo Pharmaceuticals Cl. A	-0.48
TravelCenters of America LLC	-0.45
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

We remain encouraged by the pace of global economic growth, which should have a positive impact on the capital goods sector. We began to reduce some positions in Information Technology prior to June’s sell-off based on their lofty valuations, while we maintained most of our holdings in Industrials. We have also been looking to take advantage of improved consumer income by adding select names in Consumer Discretionary. In addition, we reduced the portfolio’s exposure to Financials as valuations for many holdings appeared full relative to where we began to buy three to five years ago. Finally, we benefited from a number of takeovers, which are running at a pace similar to last year.

22  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  ROSFX ROSSX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	SINCE INCEPTION (8/31/10)
ROS	9.77	31.77	1.67	12.69	12.85
Annual Gross Operating Expenses: 1.30%  Annual Net Operating Expenses: 1.24%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 8/31/10 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
FreightCar America	1.9
Gencor Industries	1.8
Surgery Partners	1.8
Ducommun	1.7
Beazer Homes USA	1.7
Alpha & Omega Semiconductor	1.7
Ethan Allen Interiors	1.7
Old Line Bancshares	1.7
Albany Molecular Research	1.6
New Home	1.6

Portfolio Sector Breakdown
% of Net Assets
Industrials	24.2
Information Technology	18.4
Health Care	18.3
Materials	9.2
Financials	8.2
Consumer Discretionary	7.3
Energy	3.1
Consumer Staples	2.6
Telecommunication Services	0.7
Real Estate	0.5
Miscellaneous	3.7
Cash and Cash Equivalents	3.8

Calendar Year Total Returns (%)
YEAR	ROS
2016	23.8
2015	-16.0
2014	-5.0
2013	44.6
2012	35.1
2011	-17.1

Portfolio Diagnostics
Fund Net Assets	$50 million
Number of Holdings	95
Turnover Rate	38%
Average Market Capitalization1	$460 million
Weighted Average P/B Ratio2	1.8x
Weighted Average P/S Ratio3	0.9x
Active Share4	95%
U.S. Investments (% of Net Assets)	93.5%
Non-U.S. Investments (% of Net Assets)	2.7%

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	Price to Sales is calculated by dividing the company’s market cap by the revenue in the most recent year.
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee, payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. Gross operating expenses reflect the Fund’s total gross annual operating expenses and include management fees and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Funds most current prospectus. Royce & Associates has contractually agreed to waive fees and/or reimburse operating expenses to the extent necessary to maintain the Fund’s net annual operating expenses, (excluding dividend and interest expenses relating to short sale activities, brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.24% through April 30, 2018. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017.

The Royce Funds 2017 Semiannual Report to Shareholders | 23

	MANAGERS’ DISCUSSION
Royce Opportunity Fund (ROF)

Buzz Zaino, CFA
Bill Hench

FUND PERFORMANCE
Royce Opportunity Fund advanced 8.2% for the year-to-date period ended June 30, 2017, outperforming its small-cap benchmark, the Russell 2000 Index, which was up 5.0% for the same period. We were especially pleased with the success of our deep value approach because it came in a period that was otherwise highly challenging for value stocks. The Russell 2000 Value Index was up 0.5% in 2017’s first half versus 10.0% for the Russell 2000 Growth.
      Opportunity outpaced the Russell 2000 in the first quarter, up 5.2% versus a 2.5% gain, while in the second quarter, the Fund increased 2.8% compared to 2.5% for the benchmark. We were also happy with longer-term results on both an absolute and relative basis. The Fund outperformed the Russell 2000 for the one-, five, 15-, 20-year, and since inception (11/19/96) periods ended June 30, 2017. Opportunity’s average annual total return since inception was 12.4%.

WHAT WORKED... AND WHAT DIDN’T

Seven of the Fund’s 11 equity sectors made contributions to first-half results, with the most impressive result coming from Information Technology. We did much of the seed work in tech stocks 18-24 months ago, when a slow business cycle lowered share prices in many industries in which we have a perennial interest, such as semiconductors and electronic components. In fact, much of the appeal of technology stocks is that the business cycle tends to go to extremes on both the up and the down side, which often creates attractive opportunities as long as one has the patience to wait and the discipline to endure falling prices. In addition, other value investors tend to avoid or underinvest in these companies, which in our view often enhances the attractiveness of the valuations.

The recovery we’ve seen in many technology companies over the last several months has been keyed by one of the largest buildouts since the early days of the Internet. The expansion encompasses multiple developments and innovations, including the move from 4G to 5G, artificial intelligence, autonomous driving, public and private cloud storage, and the expansion of the semiconductor industry in China. Prices in many cases began to exceed our sell targets in the spring, leading us to trim our overall exposure to the sector. However, we are confident that the buildout is in its early stages, so we will be watching carefully (as we always do) for opportunities to materialize.

Three industry groups from the sector drove first-half results for the Fund as a whole—semiconductors & semiconductor equipment, electronic equipment, instruments & components, and communications equipment. KEMET Corporation, a solid tantalum and multilayer ceramic capacitor manufacturer that was also one of the top contributors in 2016’s fourth quarter was the Fund’s top performer at the position level. Strong sales and earnings combined with margin expansion to fuel the rise of its shares. Both Brooks Automation, which offers automation-oriented software and hardware for semiconductors, and capital equipment subsystem provider Ultra Clean Holdings benefited from high demand for semiconductor equipment while environmental, engineering, and construction business TRC Companies (from the Industrials sector) proved a profitable acquisition target.

Of the four sectors that detracted from first-half results, only Energy had a significant negative impact—net losses for Telecommunication Services, Consumer Staples, and Real Estate were comparatively minor. This carried over to the industry level, where declining oil prices led to disappointing results for energy equipment & services and oil, gas & consumable fuels. The former industry is home to Matrix Service, a contractor to the energy, power, and industrial markets. Ongoing delays in new project awards and starts, depressed maintenance spending, and increased cost estimates on an electrical infrastructure project all discouraged investors. We chose to build our position based on a cautiously optimistic longer-term outlook. We received shares of Windstream Holdings after it bought a former portfolio holding and combined the two companies’ businesses. Fiscal first-quarter losses discouraged investors, notwithstanding management’s more optimistic full-year guidance for service revenue, free cash flow, and adjusted income. Our view was that its participation in growing markets and attractive assets made it worth holding.

The Fund’s biggest relative advantage in the first half came from stock selection in Information Technology, where our larger weighting also helped. Stock selection in Industrials and a lower exposure to Financials also provided a relative edge. Conversely, our lack of exposure to biotechnology (Health Care) hurt relative performance as did our cash position and stock selection in Telecommunication Services.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
KEMET Corporation	0.83
TRC Companies	0.59
Brooks Automation	0.51
Ultra Clean Holdings	0.50
Kratos Defense & Security Solutions	0.49
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
Matrix Service	-0.34
Windstream Holdings	-0.27
Tower International	-0.24
Wesco Aircraft Holdings	-0.24
Unisys Corporation	-0.24
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

We remain encouraged by the pace of global economic growth, which should have a positive impact on the capital goods sector. We began to reduce some positions in Information Technology prior to June’s sell-off based on their lofty valuations, while we maintained most of our holdings in Industrials. We have also been looking to take advantage of improved consumer income by adding select names in Consumer Discretionary. In addition, we reduced the portfolio’s exposure to Financials as valuations for many holdings appeared full relative to where we began to buy three to five years ago. Finally, we benefited from a number of takeovers.

24  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYPNX RYOFX ROFCX ROFIX ROFRX ROFKX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	SINCE INCEPTION (11/19/96)
ROF	8.17	36.10	5.46	13.83	6.59	10.25	11.95	12.39
Annual Operating Expenses: 1.19%
1 Not annualized

Relative Returns: Monthly Rolling Average Annual Return Periods

20 Years Through 6/30/17

On a monthly rolling basis, the Fund outperformed the Russell 2000 in 80% of all 10-year periods; 73% of all 5-year periods; and 68% of all 1-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	97/121	80%	9.6	6.7
5-year	133/181	73%	11.4	7.7
1-year	155/229	68%	14.6	9.2

¹Average of monthly rolling average annual total returns over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 11/19/96 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Kratos Defense & Security Solutions	1.2
Dana	1.1
Comtech Telecommunications	1.0
Tower International	1.0
General Cable	1.0
Commercial Metals	0.9
IXYS Corporation	0.9
Ferro Corporation	0.9
NCI Building Systems	0.9
Interface	0.8

Portfolio Sector Breakdown
% of Net Assets
Industrials	24.7
Information Technology	23.0
Consumer Discretionary	15.5
Materials	9.0
Financials	5.6
Health Care	5.6
Energy	4.0
Consumer Staples	1.7
Telecommunication Services	0.4
Real Estate	0.4
Utilities	0.2
Miscellaneous	2.5
Cash and Cash Equivalents	7.4

Calendar Year Total Returns (%)
YEAR	ROF
2016	29.9
2015	-13.6
2014	-0.5
2013	43.5
2012	22.6
2011	-13.0
2010	33.8
2009	62.1
2008	-45.7
2007	-2.0
2006	18.8
2005	4.8
2004	17.5
2003	72.9
2002	-17.0

Upside/Downside Capture Ratios
Periods Ended 6/30/17 (%)
	UPSIDE	DOWNSIDE
10-Year	119	128
From 12/31/96 (Start of Fund’s First Full Quarter)	124	110

Portfolio Diagnostics
Fund Net Assets	$1,501 million
Number of Holdings	257
Turnover Rate	20%
Average Market Capitalization1	$816 million
Weighted Average P/B Ratio2	1.7x
Weighted Average P/S Ratio3	0.8x
Active Share4	91%
U.S. Investments (% of Net Assets)	88.5%
Non-U.S. Investments (% of Net Assets)	4.1%

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	Price to Sales is calculated by dividing the company’s market cap by the revenue in the most recent year.
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Investment Class (its oldest class). Operating expenses reflect the Fund’s total annual operating expenses for the Investment Class as of the Fund’s most current prospectus and include management fees and other expenses. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders | 25

	MANAGERS’ DISCUSSION
Royce Pennsylvania Mutual Fund® (PMF)

Chuck Royce
Lauren Romeo, CFA
Jay Kaplan, CFA

FUND PERFORMANCE
Royce Pennsylvania Mutual Fund advanced 4.8% for the year-to-date period ended June 30, 2017, slightly trailing its small-cap benchmark, the Russell 2000 Index, which rose 5.0% for the same period. After a terrific absolute and relative showing in 2016—our flagship Fund’s fourth-best return in the last 25 years—some pullback was not surprising, especially in a period that showed more favor to high growth and low quality than the kind of companies we seek using Penn’s diversified, multi-theme core approach.
      In this more challenging environment, the Fund posted a modest first-quarter return (+1.5%) while lagging the benchmark (+2.5%). Several healthcare names from outside the resurgent biotechnology industry keyed Penn’s strong second-quarter results, up 3.2% versus 2.5% for the small-cap index. Looking at longer-term periods, we were pleased that Penn outpaced the Russell 2000 for the 15-, 20-, 25-, 30-, and 35-year periods ended June 30, 2017. The Fund’s average annual total return for the 40-year period ended June 30, 2017 was 13.1%, all under the management of Chuck Royce.

WHAT WORKED... AND WHAT DIDN’T

Eight of the Fund’s 11 equity sectors finished the semiannual period in the black (a ninth, Telecommunication Services, was essentially flat). Consumer Discretionary and Energy detracted, the first hurt by secular shifts in consumer spending and behavior, the second by falling oil prices. The most notable positive impacts came from Information Technology, Industrials (the Fund’s two largest sectors), and Health Care. The last is an area in which we have been active in 2017, increasing the Fund’s exposure to 10.2% at the end of June from 6.8% at the end of 2016. Consistent with our usual practice, we have mostly avoided the more speculative environs of the sector and instead have been concentrating on cash-flow generating companies with earnings in industries that have been historically less volatile than those in the bio-pharma complex. The result at the end of June was a comparatively larger weighting within the portfolio in equipment makers and suppliers, service providers, and life sciences tool manufacturers, many of which, including Merit Medical Systems, helped drive second-quarter results.
      Electronic equipment, instruments & components made the largest contribution at the industry level during 2017’s first half, led by the Fund’s three best performing positions for the period. Laser diode and equipment maker Coherent took the top spot, as it did in 2016, galvanized by ongoing sales and earnings growth driven by vibrant demand for ramped up OLED (organic light-emitting diode) capacity. IPG Photonics, which produces high-power fiber lasers and amplifiers, also saw earnings growth push its shares higher as the company continued to benefit from the accelerated pace with which its fiber lasers are replacing conventional lasers and non-laser technology on a global scale. Cognex Corporation is the market leader in machine vision technology, which captures and analyzes visual information to automate tasks that previously relied on human eyesight and is thus a major driver of industrial and process automation. The trend toward automation continues to improve order strength for its machine vision systems.
      Only two industries made sizable negative impacts on first-half results—specialty retail and energy equipment & services. The Fund’s leading detractor overall, however, was Core-Mark Holding Company, which comes from the distributors industry within Consumer Discretionary. The company specializes in supply and distribution services to convenience stores in the U.S. and Canada. Although profitable, Core-Mark reported lower-than-expected fiscal first-quarter earnings in May, which helped to send its shares lower. We reduced our stake in the first half prior to the announcement. Matrix Service is a contractor to the energy, power, and industrial markets. Its close association with the reeling energy industry, ongoing delays in new project awards and starts, depressed maintenance spending, and increased cost estimates on an electrical infrastructure project all discouraged investors, including us. We sold the last of our shares in Penn’s portfolio in June.
      Relative to the Russell 2000, poor stock selection in Consumer Discretionary—most impactfully in that sector’s specialty retail group—hurt most while our underweight in biotechnology also created a relative disadvantage. In contrast, Financials were strong relative contributors, aided by savvy stock selection and an underweight in banks, while effective stock picking in machinery stocks gave us an edge in Industrials.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
Coherent	0.55
IPG Photonics	0.33
Cognex Corporation	0.32
Merit Medical Systems	0.31
Raven Industries	0.28
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
Core-Mark Holding Company	-0.21
Matrix Service	-0.20
Team	-0.20
SEACOR Holdings	-0.17
Tejon Ranch	-0.14
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

In addition to increasing our weighting in select healthcare companies, we made a number of other changes to the portfolio. After an extended period of disappointing results, we have been reducing our weighting in retailers as we see an industry with substantial challenges ahead of it. On the brighter side, we trimmed several long-term winners in Information Technology and Industrials where valuations no longer merited high weightings in the portfolio. Along with healthcare, we have been redeploying some of these assets in banks, where we have sought to take advantage of relatively weak first-half performance.

26  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  PENNX RYPFX RPMIX RYPCX RPMRX RPMKX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	25-YR	30-YR	35-YR	40-YR
PMF	4.81	23.17	4.54	11.68	5.93	9.19	9.91	10.55	10.32	12.66	13.09
Annual Operating Expenses: 0.93%
1 Not annualized

Relative Returns: Monthly Rolling Average Annual Return Periods
20 Years Through 6/30/17

On a monthly rolling basis, the Fund outperformed the Russell 2000 in 75% of all 10-year periods; 70% of all 5-year periods; and 55% of all 1-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	91/121	75%	8.9	6.7
5-year	127/181	70%	10.0	7.7
1-year	125/229	55%	10.9	9.2

¹Average of monthly rolling average annual total returns over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 12/29/78 (Russell 2000 Inception)
as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Tennant Company	1.4
Quaker Chemical	1.4
HEICO Corporation	1.3
First Citizens BancShares Cl. A	1.3
Sun Hydraulics	1.3
E-L Financial	1.1
Bio-Techne	1.1
Valmont Industries	1.1
Raven Industries	1.1
Landstar System	1.1

Portfolio Sector Breakdown
% of Net Assets
Industrials	27.1
Information Technology	18.1
Financials	13.4
Consumer Discretionary	11.3
Health Care	10.2
Materials	8.6
Energy	3.9
Real Estate	2.4
Consumer Staples	2.0
Telecommunication Services	0.2
Utilities	0.1
Miscellaneous	2.1
Cash and Cash Equivalents	0.6

Calendar Year Total Returns (%)
YEAR	PMF
2016	26.5
2015	-11.4
2014	-0.7
2013	35.3
2012	14.6
2011	-4.2
2010	23.9
2009	36.3
2008	-34.8
2007	2.8
2006	14.8
2005	12.5
2004	20.2
2003	40.3
2002	-9.2

Upside/Downside Capture Ratios
Periods Ended 6/30/17 (%)
	UPSIDE	DOWNSIDE
10-Year	92	95
From 12/31/78 (Russell 2000 Inception)	89	71

Portfolio Diagnostics
Fund Net Assets	$2,329 million
Number of Holdings	327
Turnover Rate	16%
Average Market Capitalization1	$1,816 million
Weighted Average P/E Ratio2,3	22.1x
Weighted Average P/B Ratio2	2.4x
Active Share4	87%
U.S. Investments (% of Net Assets)	87.6%
Non-U.S. Investments (% of Net Assets)	11.8%

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 (7% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Investment Class (its oldest class). Operating expenses reflect the Fund’s total annual operating expenses for the Investment Class as of the Fund’s most current prospectus and include management fees, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investment in mutual funds, hedge funds, private equity funds, and other investment companies. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders | 27

	MANAGERS’ DISCUSSION
Royce Premier Fund (RPR)

Chuck Royce
Lauren Romeo, CFA
Steven McBoyle, CPA, CA

FUND PERFORMANCE
During the year’s first half, Royce Premier Fund performed impressively on both an absolute and relative basis, despite value stocks lagging growth stocks. The Fund returned 8.7% for the year-to-date period ended June 30, 2017 compared with 5.0% for its small-cap benchmark, the Russell 2000 Index. This was a strong vote of confidence for the kind of high-quality companies that we seek for the portfolio, those with discernible competitive advantages, high returns on capital, and a sustainable, moat-like franchise.
      For the first quarter, the Fund gained 6.7% versus 2.5% for the Russell 2000. This strong relative return was all the more notable as the quarter generally favored growth and low-quality stocks, neither of which fit the Fund’s quality approach. Value stocks continued to lag their growth counterparts in the second quarter, when the Fund delivered a respectable return of 1.9% compared with 2.5% for the small-cap index. Long-term results were strong on both an absolute and relative basis as Premier bested its benchmark for the one-, 10-, 15-, 20-, 25-year, and since inception (12/31/91) periods ended June 30, 2017. The Fund’s average annual total return since inception was 11.6%.

WHAT WORKED... AND WHAT DIDN’T

Eight of Premier’s nine equity sectors finished the semiannual period in the black. Information Technology was the top contributor by a sizable amount, with electronic equipment, instruments & components and semiconductors & semiconductor equipment companies doing best. Industrials made the second-biggest contribution, led by machinery stocks. The Fund’s only sector with negative performance for the first half was Energy, where share prices fell along with the price of oil. Detractions at the industry level were similarly modest, led by energy equipment & services (Energy), specialty retail (Consumer Discretionary), and metals & mining (Materials).
      The Fund’s two top contributing positions were also top-10 holdings at the end of June. Cognex Corporation is the market leader in machine vision technology, which captures and analyzes visual information to automate tasks that previously relied on human eyesight and is thus a major driver of industrial and process automation. The trend toward automation continues to drive broad order strength for its machine vision systems. Cognex also supplemented its robust technology portfolio with three small acquisitions that should enhance its capabilities in emerging areas such as 3D and adaptive learning. National Instruments supplies computer-based instrumentation hardware and software products for engineers and scientists. The company saw healthier order growth coincident with both improved global industrial activity and new products that should broaden its addressable markets in key growth areas such as semiconductor testing and the Internet of Things.
      The impact of detractors was far more modest. SEACOR Holdings provides marine transportation equipment and logistics services mostly for the energy and agricultural markets. Its earnings remained pressured by ongoing weakness in the offshore marine vessel business, which was exacerbated by the decline in oil prices in the first half, as well as overcapacity in its inland river barge and tow business. Weak volumes persisted through most of the first half for industrial equipment auctioneer Ritchie Bros. Auctioneers. This was primarily the result of tight supply in consigned heavy equipment for auction as well as uncertainty about the near-term growth trajectory for Iron Planet, a recent acquisition that conducts online equipment auctions.
      Relative to the Russell 2000, Information Technology provided the largest advantage in the first half. Our performance edge in this sector was driven by savvy stock picking, particularly in the electronic equipment, instruments & components industry. Financials was the second-biggest relative contributor. Both the Fund’s underweight in lagging banks and savvy stock picking among capital markets firms, notably Ashmore Group, the emerging market debt asset manager, helped relative returns. Conversely, our lower exposure to Health Care detracted most from relative performance. A perennial underweight in Premier’s portfolio, it was the top-contributing sector in the Russell 2000 for the first half. Materials also made a minor relative detraction. Shares of our largest holding in the sector, metals distributor and processor Reliance Steel & Aluminum, declined after the company reduced earnings guidance.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
Cognex Corporation	1.06
National Instruments	0.80
IDEXX Laboratories	0.70
Lincoln Electric Holdings	0.68
IPG Photonics	0.66
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
SEACOR Holdings	-0.35
Ritchie Bros. Auctioneers	-0.27
Monro Muffler Brake	-0.16
CIRCOR International	-0.14
Reliance Steel & Aluminum	-0.14
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

We slightly narrowed the number of portfolio holdings in the first half of 2017, adding three, including one spin-off, while eliminating four. We also actively trimmed some of our largest contributors, most notably in Information Technology and Industrials, where both valuations and portfolio weightings had become elevated. These actions led to the accumulation of a meaningful cash position of close to 8% at the end of June, as we wait for better opportunities to put this money to work. Until then, we are prepared to be patient. We are comfortable that the long and winding road to normalization that we see for equities will continue to be rewarding for the kind of high-quality companies and long-term compounders that we seek to hold in the Fund.

28  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYPRX RPFFX RPFIX RPRCX RPRRX RPRWX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	25-YR	SINCE INCEPTION (12/31/91)
RPR	8.70	25.54	3.63	10.62	7.20	10.78	10.42	11.80	11.61
Annual Operating Expenses: 1.16%
1 Not annualized

Relative Returns: Monthly Rolling Average Annual Return Periods

20 Years Through 6/30/17

On a monthly rolling basis, the Fund outperformed the Russell 2000 in 99% of all 10-year periods; 72% of all 5-year periods; and 63% of all 1-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	120/121	99%	10.5	6.7
5-year	131/181	72%	10.9	7.7
1-year	144/229	63%	11.4	9.2

¹Average of monthly rolling average annual total returns over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 12/31/91 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Lincoln Electric Holdings	3.6
Cognex Corporation	3.6
Copart	3.3
National Instruments	3.2
MKS Instruments	3.0
Woodward	2.8
Landstar System	2.8
Kirby Corporation	2.7
Valmont Industries	2.6
Alleghany Corporation	2.6

Portfolio Sector Breakdown
% of Net Assets
Industrials	33.2
Information Technology	19.6
Financials	12.1
Consumer Discretionary	9.3
Materials	7.0
Health Care	4.0
Energy	3.3
Consumer Staples	2.2
Real Estate	0.9
Miscellaneous	0.6
Cash and Cash Equivalents	7.8

Calendar Year Total Returns (%)
YEAR	RPR
2016	23.0
2015	-9.9
2014	-0.9
2013	27.7
2012	11.4
2011	-0.9
2010	26.5
2009	33.3
2008	-28.3
2007	12.7
2006	8.8
2005	17.1
2004	22.8
2003	38.7
2002	-7.8

Upside/Downside Capture Ratios
Periods Ended 6/30/16 (%)
	UPSIDE	DOWNSIDE
10-Year	92	87
From 12/31/91 (Start of Fund’s First Full Quarter)	92	72

Portfolio Diagnostics
Fund Net Assets	$2,282 million
Number of Holdings	55
Turnover Rate	3%
Average Market Capitalization1	$3,577 million
Weighted Average P/E Ratio2,3	23.7x
Weighted Average P/B Ratio2	2.8x
Active Share4	97%
U.S. Investments (% of Net Assets)	81.6%
Non-U.S. Investments (% of Net Assets)	10.6%

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 (4% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Investment Class (its oldest class). Operating expenses reflect the Fund’s total annual operating expenses for the Investment Class as of the Fund’s most current prospectus and include management fees and other expenses. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders | 29

	MANAGER’S DISCUSSION
Royce Small-Cap Leaders Fund (ROH)

Lauren Romeo, CFA

FUND PERFORMANCE
After benefiting in 2016 from a combination of strong stock-picking and the resumption of leadership for value and cyclical stocks, Royce Small-Cap Leaders Fund took a relative step back in 2017’s first half. The Fund was up 1.1% for the year-to-date period ended June 30, 2017, trailing its small-cap benchmark, the Russell 2000 Index, which gained 5.0% for the same period. The first half of 2017 featured a few reversals that affected relative performance for the kind of high-quality stocks that we seek, most notably a pronounced advantage for growth stocks, particularly in biotechnology.
      This pattern began early in the year. For the first quarter, Small-Cap Leaders rose 0.9% versus 2.5% for the Russell 2000 while the second quarter saw more of the same, with the Fund gaining 0.3% while the small-cap index was up 2.5%. Small-Cap Leaders’ average annual total return since inception (6/30/03) was 9.4%.

WHAT WORKED... AND WHAT DIDN’T

Of the Fund’s nine equity sectors, three detracted from first-half results, and a fourth was flat, while six made positive contributions, led by Financials and Information Technology. The largest negative impacts came from Consumer Discretionary, where specialty retail was the Fund’s worst-performing industry group, and Energy, where energy equipment & services finished second among the portfolio’s detractors at the industry level. Retailers have been under siege over the last few years as they attempt to cope with secular changes in consumer spending habits and the related margin-contracting specter of Amazon. As a result of these challenges—and the resulting downward pressure on stock prices—we reduced the Fund’s exposure to the industry in the first half. We sold our shares of footwear, headwear, and sports apparel retailer Genesco as first-quarter results and revised full-year guidance fell well below expectations due to intensified competition and management’s overconfidence that it could rebalance inventory to compensate for a key fashion shift it missed last year in its Journeys footwear chain. We also significantly reduced our exposure to The Buckle in the second quarter as business for this clothing retailer continued to deteriorate in part due to heightened online competition. We felt more confident about the long-term prospects for footwear wholesaler and retailer Caleres. Recent sales and earnings growth has been solid, but early 2017 results fell short of investors’ optimistic expectations—and even minor disappointments in the industry are severely punished in the current highly challenging environment. We netted out a modest increase in our position during the first half.
      Despite high employment and solid business confidence, revenue growth for office furniture manufacturer Steelcase remained constrained as North American customers were still cautious about spending. Additionally, while the company is introducing new product to address the “resi-mercial” office style trend, this growth has yet to offset sales declines from legacy office products. We were content to stay patient and held a good-sized stake at the end of June. Xperi was formed when Tessera Holding acquired DTS. The company, which licenses audio and semiconductor technologies, offered disappointing earnings guidance on the formation of the new company. The outlook is clouded by the pending resolution of a patent dispute with one large company and the signing of a licensing renewal by a second, which led us to reduce our position in the first half.
      Top-10 holding Genworth MI Canada, that country’s leading residential mortgage insurance provider, was the Fund’s top-contributing position in the first half. Its stock extended its strong run from 2016 based on expectations that loss ratios have bottomed in oil-rich provinces where it has residential mortgage insurance in force, combined with a premium increase that offset new, higher capital requirements. Lazard, another top-10 position, continued to gain market share in its global mergers & acquisitions advisory business, particularly in Europe where activity is rebounding. It also saw healthy inflows in its asset management segment that were driven by its global and quantitative offerings.
      Relative to the Russell 2000, the portfolio’s substantial underweight in Health Care, including a lack of exposure to biotechnology, hurt most. Also having a large negative impact was ineffective stock selection in Consumer Discretionary, mostly in specialty retail. Conversely, savvy stock picks provided a relative advantage in Financials and, to a lesser extent, Consumer Staples.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
Genworth MI Canada	0.44
Lazard CI. A	0.40
Fabrinet	0.33
Bio-Rad Laboratories CI. A	0.33
Industrias Bachoco ADR	0.32
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
Steelcase CI. A	-0.48
Xperi	-0.41
Genesco	-0.41
Oil States International	-0.39
Caleres	-0.38
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

Thus far in 2017, small-cap performance has reverted back to that of years such as 2015 – narrow leadership by growth-oriented sectors populated by unprofitable companies. During 2017’s first half, for example, Health Care and Information Technology accounted for approximately 90% of the Russell 2000’s return. However, we believe this is only a temporary pause in the long overdue reversion to the mean of small-cap value and quality outperformance that began in 2016. Fiscal rather than monetary policy will increasingly be the top-down focus of investors as the catalyst to a sustained breakout of U.S. GDP growth beyond the 1-2% range. Many of our more cyclical companies have become even more attractively valued after lagging in first-half stock price performance despite posting in-line financial results and guidance.

30  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYOHX ROHHX ROHRX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	SINCE INCEPTION (6/30/03)
ROH	1.14	19.80	1.49	9.04	5.72	9.43
Annual Gross Operating Expenses: 1.58%  Annual Net Operating Expenses: 1.49%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 6/30/03 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Minerals Technologies	3.0
Marcus & Millichap	3.0
Genworth MI Canada	2.9
Artisan Partners Asset Management Cl. A	2.8
Lazard Cl. A	2.6
Caleres	2.4
Pason Systems	2.3
Cal-Maine Foods	2.2
Bio-Techne	2.1
Houlihan Lokey Cl. A	2.1

Portfolio Sector Breakdown
% of Net Assets
Industrials	23.3
Financials	14.8
Consumer Discretionary	14.4
Information Technology	13.6
Consumer Staples	7.5
Health Care	5.9
Energy	5.2
Materials	4.6
Real Estate	3.0
Miscellaneous	1.2
Cash and Cash Equivalents	6.5

Calendar Year Total Returns (%)
YEAR	ROH
2016	25.5
2015	-12.5
2014	-3.3
2013	30.9
2012	11.5
2011	-6.5
2010	24.8
2009	38.0
2008	-29.2
2007	7.3
2006	13.7
2005	14.9
2004	27.2

Upside/Downside Capture Ratios
Periods Ended 6/30/17 (%)
	UPSIDE	DOWNSIDE
10-Year	89	93
From 6/30/03 (Start of Fund’s First Full Quarter)	93	93

Portfolio Diagnostics
Fund Net Assets	$90 million
Number of Holdings	73
Turnover Rate	32%
Average Market Capitalization1	$1,763 million
Weighted Average P/E Ratio2,3	18.5x
Weighted Average P/B Ratio2	2.5x
Active Share4	96%
U.S. Investments (% of Net Assets)	74.9%
Non-U.S. Investments (% of Net Assets)	18.6%

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 (6% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Gross operating expenses reflect the Fund’s gross total annual operating expenses for the Service Class and include management fees, 12b-1 distribution and service fees, and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive fees and/or reimburse operating expenses to the extent necessary to maintain the Service Class’s net annual operating expenses, (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.49% through April 30, 2018. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders | 31

	MANAGER’S DISCUSSION
Royce Small-Cap Value Fund (RVV)

Jay Kaplan, CFA

FUND PERFORMANCE
For the year-to-date period ended June 30, 2017, Royce Small-Cap Value Fund was down 4.2%, significantly lagging its small-cap benchmark, the Russell 2000 Index, which gained 5.0% for the same period. It was a difficult first half for value stocks and a disappointing one for our contrarian value approach.
The Fund slipped 1.5% in the first quarter versus a 2.5% advance for the small-cap index. Value stocks began to fall behind their growth counterparts early in the year, spurred in large part by strong results for biotechnology companies and less stellar performance for many of the cyclical areas that did so well in 2016. This pattern held sway in the second quarter, when Small-Cap Value was down 2.7% compared to another 2.5% increase for the Russell 2000. The leadership that began early in the year thus remained in place for most of the first half, as large-caps, growth, healthcare, and non-U.S. equities all stayed in the lead after lagging in 2016. Longer-term results were better as the Fund outperformed its benchmark for the 15-year and since inception (6/14/01) periods ended June 30, 2017. Small-Cap Value’s average annual total return since inception was 9.3%.

WHAT WORKED... AND WHAT DIDN’T

Consumer Discretionary made by far the largest negative impact at the sector level, detracting more than twice as much as Energy, the Fund’s second-biggest detractor for the semiannual period. The specialty retail industry disproportionately drove negative results, with seven of the Fund’s eight biggest first-half detractors coming from the group. Brick and mortar retailers continue to struggle with shifts in consumer spending and shopping habits, along with the ensuing margin contraction, developments keyed to a large degree by the omnipresence of Amazon. We sold our shares of footwear, headwear, and sports apparel retailer Genesco in June and reduced our stake in each of the Fund’s other positions in specialty retail during the first half, including sporting goods company Hibbett Sports, women’s fashion and accessories retailer The Cato Corporation, and footwear specialist Shoe Carnival. The energy equipment & services group also had a substantial negative impact, led by Matrix Service, the Fund’s top detractor at the position level in the first half. The company is a contractor to the energy, power, and industrial markets. Ongoing delays in new project awards and starts, depressed maintenance spending, and increased cost estimates on an electrical infrastructure project all discouraged investors, including us. We sold the last of our shares in the portfolio in May.
      Industrials, Information Technology, and Financials made the biggest sector-based contributions to 2017’s first-half results, while at the industry level, building products (Industrials), IT services (Information Technology), and capital markets (Financials) made notable positive impacts. Kitchen cabinet and vanity manufacturer American Woodmark led the building products group, and the Fund overall, thanks to impressive sales growth in both its new construction and remodeling products. We trimmed our stake as its share price climbed. We chose to add shares of truck trailer manufacturer (and top-10 holding) Wabash National in the first half. Investors seemed to respond positively to its raised earnings guidance for the rest of 2017 as well the company’s efforts to emphasize its diverse line of transportation products. NCI offers network engineering, information assurance, systems development, and integration for government agencies. Fiscal first-quarter revenues exceeded the midpoint of management’s guidance range given earlier in the year, driven in part by margin improvements resulting from higher contributions from fixed-price contracts.
      Relative to the Russell 2000, the Fund’s first-half results were affected most by both our overweight and ineffective stock picking in Consumer Discretionary, where the previously mentioned specialty retail group detracted most. Both our lower exposure to Health Care and ineffective stock picks in Information Technology also notably hurt relative results. Bright spots included better stock selection in Financials—most notably in capital markets stocks such as Moelis & Company—and Industrials, where American Woodmark helped the building products group to shine.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
American Woodmark	0.54
Wabash National	0.54
NCI Cl. A	0.50
Genworth MI Canada	0.38
Moelis & Company Cl. A	0.38
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
Matrix Service	-1.10
Hibbett Sports	-0.72
Genesco	-0.59
Shoe Carnival	-0.49
Kirkland’s	-0.46
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

Our outlook has not changed appreciably since the end of 2016. Our valuation-sensitive contrarian approach has made finding new ideas difficult because most of the cheap stocks we have been investigating look priced that way for very good reasons that look likely to persist—classic value traps. Patience, therefore, remains key. We still expect that more interesting opportunities will materialize when some of the current widespread optimism dissipates, and we are prepared to wait. In the event of a correction, we will act opportunistically as we always have when the market trends down. During the first half, in addition to reducing the specialty retail group, we made discrete purchases in both residential and non-residential construction companies, as well as in distribution and networking technology businesses—consistent with our ‘low-tech tech’ ethos and including top-10 holdings Fabrinet and PC Connection. We also purchased shares in a small number of boutique investment banks that look well positioned to benefit from ongoing global uncertainty as well as what we think will be a more robust M&A market in the months to come.

32  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYVFX RVVHX RVFIX RVFCX RVVRX RVFKX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	15-YR	SINCE INCEPTION (6/14/01)
RVV	-4.21	12.22	-0.26	7.87	3.75	10.00	9.26
Annual Operating Expenses: 1.49%
1 Not annualized

Relative Returns: Monthly Rolling Average Annual Return Periods

Since Inception Through 6/30/17

On a monthly rolling basis, the Fund outperformed the Russell 2000 in 60% of all 10-year periods; 57% of all 5-year periods; and 54% of all 1-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	44/73	60%	9.0	7.8
5-year	76/133	57%	9.7	8.7
1-year	98/181	54%	11.5	10.5

¹Average of monthly rolling average annual total returns over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 6/14/01 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Genworth MI Canada	2.3
Fabrinet	2.3
AMN Healthcare Services	2.1
PC Connection	2.1
Federated Investors Cl. B	2.1
Wabash National	2.1
Celestica	2.0
Gentex Corporation	2.0
Marcus & Millichap	2.0
Village Super Market Cl. A	2.0

Portfolio Sector Breakdown
% of Net Assets
Financials	21.9
Industrials	21.5
Information Technology	20.0
Consumer Discretionary	14.8
Health Care	2.6
Energy	2.4
Real Estate	2.0
Consumer Staples	2.0
Utilities	1.0
Miscellaneous	1.0
Cash and Cash Equivalents	10.8

Calendar Year Total Returns (%)
YEAR	RVV
2016	21.1
2015	-11.5
2014	-0.0
2013	27.8
2012	9.6
2011	-7.4
2010	25.0
2009	44.7
2008	-34.2
2007	3.8
2006	16.8
2005	17.2
2004	30.9
2003	54.3

Upside/Downside Capture Ratios
Periods Ended 6/30/17 (%)
	UPSIDE	DOWNSIDE
10-Year	81	95
From 6/30/01 (Start of Fund’s First Full Quarter)	99	91

Portfolio Diagnostics
Fund Net Assets	$365 million
Number of Holdings	74
Turnover Rate	33%
Average Market Capitalization1	$1,064 million
Weighted Average P/E Ratio2,3	16.5x
Weighted Average P/B Ratio2	1.9x
Active Share4	97%
U.S. Investments (% of Net Assets)	81.3%
Non-U.S. Investments (% of Net Assets)	7.9%

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 (4% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Certain immaterial adjustments were made to the net assets of Royce Small-Cap Value Fund at 6/30/16 for financial reporting purposes, and as a result the net asset values for shareholder transactions on that date and the calendar year Total Returns (%) based on those net asset values differ from the adjusted net asset values and calendar year total returns reported in the Financial Highlights. Operating expenses reflect the Fund’s total annual operating expenses for the Service Class as of the Fund’s most current prospectus and include management fees, 12b-1 distribution and service fees, and other expenses. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders  |  33

MANAGER’S DISCUSSION

Royce Small/Mid-Cap Premier Fund (RHF) (Formerly Royce Heritage Fund)

Steven McBoyle, CPA, CA

FUND PERFORMANCE

Royce Small/Mid-Cap Premier Fund (formerly Royce Heritage Fund) climbed 5.7% for the year-to-date period ended June 30, 2017, slightly trailing the 6.0% gain for its new small- and mid-cap benchmark, the Russell 2500 Index, while outpacing the 5.0% increase for the small-cap Russell 2000 Index for the same period. We changed the Fund’s name and shifted its benchmark from the Russell 2000 to the Russell 2500 to better reflect the portfolio’s small- and mid-cap selection universe, which Royce defines as those with market capitalizations up to $15 billion. The Fund’s investment approach, however, remained unchanged—we continue to seek companies that we consider “premier”—those that we believe have sustainable, moat-like franchises, discernible competitive advantages, a history of prudent capital allocation, and opportunities to profitably reinvest excess cash flow.

    The Fund outpaced both indexes in the first quarter, up 4.4% versus respective gains of 3.8% and 2.5% for the Russell 2500 and Russell 2000 Indexes. This was especially notable during a period in which growth stocks led and approaches similar to the Fund’s valuation-sensitive, high-quality approach were out of favor. Second-quarter results were more pedestrian, with the Fund gaining 1.2% versus 2.1% for the Russell 2500 and 2.5% for the Russell 2000. We were pleased that the Fund outpaced both benchmarks for the 20-year and since inception (12/27/95) periods ended June 30, 2017. Small/Mid-Cap Premier’s average annual total return since inception was 12.3%.

WHAT WORKED... AND WHAT DIDN’T

Eight of the Fund’s nine equity sectors finished the semiannual period in the black with Information Technology and Industrials leading by impressive margins. Two industries—one from each of the two leading sectors—made by far the biggest positive impacts on first-half performance: electronic equipment, instruments & components and professional services. Results for the first group were primarily driven by two positions. Top-10 position IPG Photonics, which produces high-power fiber lasers and amplifiers, saw earnings growth push its shares higher as the company continued to benefit from the accelerated pace at which its fiber lasers are replacing conventional lasers and non-laser technology on a global scale. The stock price of laser diode and equipment maker Coherent was galvanized by ongoing sales and earnings growth.

    The top contributing position in professional services, and second in the Fund as a whole, was global staffing and services company—and top-10 holding—ManpowerGroup. The company saw its stock benefit from improved topline growth and a strong bottom line in 2016, solid fiscal first-quarter 2017 earnings, and a brightening global employment picture. From the Consumer Discretionary sector, NVR builds homes and engages in mortgage banking activities. Its shares benefited from ongoing strength in the U.S. housing market, which helped the company post respective first-quarter increases in net income and diluted earnings per share of 58% and 59%.
    Consumer Discretionary was the only sector to detract from performance in the first half, though its impact was decidedly modest. While the sector offered an interesting mix of contributing and detracting industries and positions, its specialty retail group had a significant negative effect. Some of this is attributable to the “Amazon Effect,” a broadly used term that describes the significant shifts that are adversely affecting brick and mortar retailers. The growing popularity of e-commerce is introducing price transparency and algorithmic-based pricing strategies that are threatening profits across many industries, making it arguably the greatest deflationary force in the economy today. This has resulted in a regular reexamination of our holdings in the retail space. Speaking of which, two retailers topped the portfolio’s list of detractors. We substantially reduced our stake in Dicks Sporting Goods in the first half as the company, which has been cutting costs and streamlining operations, nonetheless reported disappointing fiscal first-quarter earnings due to poor sales. We opted to exit our position in Signet Jewelers, the company that operates Zales, Jared, and Kay Jewelers, due to our discomfort with the company’s reliance on in-house financing to spur sales and sluggish earnings.
    Relative to the Russell 2500, the Fund was disadvantaged by stock selection in Consumer Discretionary, a much lower weighting in Health Care, and the portfolio’s cash position. By contrast, our lack of exposure to Energy helped as did both our lower weightings and stock selection in Financials and Real Estate were also a plus. Effective stock selection in Information Technology and Industrials.

Top Contributors to Performance
Year-to-Date Through 6/30/17 (%)1
IPG Photonics	0.73
ManpowerGroup	0.55
NVR	0.50
Coherent	0.50
Westlake Chemical	0.50
1 Includes dividends

Top Detractors from Performance
Year-to-Date Through 6/30/17 (%)2
Dicks Sporting Goods	-0.53
Signet Jewelers	-0.53
Monro Muffler Brake	-0.25
Carlisle Companies	-0.19
Dollar Tree	-0.16
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

We continue to anticipate lower returns, higher volatility, and lower correlation levels. Evidence continues to mount that a normalization in the markets is taking place, which should make them far more discriminating. For these reasons, we believe our bottom-up, quality-oriented process has the potential to do well. Other than reducing our retail exposure, portfolio positioning has remained largely unchanged. The largest sectors at the end of June were Industrials, Consumer Discretionary, and Information Technology. Along with Materials, the first two were also our largest overweights versus the Russell 2500 at the end of the semiannual period.

34 | The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS RGFAX RHFHX RYGCX RHFRX

Performance and Expenses Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	SINCE INCEPTION (12/27/95)
RHF	5.68	18.27	3.80	10.11	5.73	9.04	11.39	12.33
Annual Operating Expenses: 1.30%
1 Not annualized

Relative Returns: Monthly Rolling Average Annual Return Periods
20 Years Through 6/30/17
On a monthly rolling basis, the Fund outperformed the Russell 2000 in 82% of all 10-year periods; 77% of all 5-year periods; and 59% of all 1-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	99/121	82%	9.4	6.7
5-year	139/181	77%	10.3	7.7
1-year	136/229	59%	12.9	9.2

¹Average of monthly rolling average annual total returns over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 12/27/95 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Copart	3.2
Alleghany Corporation	3.0
ManpowerGroup	2.6
LKQ Corporation	2.6
Westlake Chemical	2.6
Valmont Industries	2.4
IPG Photonics	2.3
Thor Industries	2.3
Standard Motor Products	2.2
Minerals Technologies	2.1

Portfolio Sector Breakdown
% of Net Assets
Industrials	27.2
Consumer Discretionary	24.7
Information Technology	11.5
Financials	8.8
Materials	8.2
Real Estate	4.4
Health Care	3.4
Consumer Staples	2.4
Utilities	1.4
Miscellaneous	0.7
Cash and Cash Equivalents	7.3

Calendar Year Total Returns (%)
YEAR	RHF
2016	17.8
2015	-6.5
2014	-1.1
2013	26.0
2012	14.3
2011	-9.3
2010	27.5
2009	51.8
2008	-36.2
2007	1.2
2006	22.6
2005	8.7
2004	20.4
2003	38.1
2002	-18.9

Upside/Downside Capture Ratios

Periods Ended 6/30/17 (%)

	UPSIDE	DOWNSIDE
10-Year	89	93
From 12/31/95 (Start of Fund’s First Full Quarter)	108	87

Portfolio Diagnostics
Fund Net Assets	$220 million
Number of Holdings	82
Turnover Rate	31%
Average Market Capitalization1	$5,022 million
Weighted Average P/E Ratio2,3	21.8x
Weighted Average P/B Ratio2	2.9x
Active Share4	98%
U.S. Investments (% of Net Assets)	84.5%
Non-U.S. Investments (% of Net Assets)	8.2%

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 (0% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Price and total return information is based on net asset values calculated for shareholder transactions. Operating expenses reflect the Fund’s total annual operating expenses for the Service Class as of the Fund’s most current prospectus and include management fees, 12b-1 distribution and service fees, and other expenses. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders | 35 

MANAGER’S DISCUSSION

Royce Smaller-Companies Growth Fund (RVP)

Chip Skinner, CFA

FUND PERFORMANCE

Royce Smaller-Companies Growth Fund came back strong and turned in an impressive absolute and relative performance in the first half. The Fund advanced 11.3% for the year-to-date period ended June 30, 2017, well ahead of its small-cap benchmark, the Russell 2000 Index, which was up 5.0% for the same period. We were also pleased that the Fund, which uses a valuation-aware, ‘growth-at-a-reasonable-price’ (GARP) strategy, outpaced the Russell 2000 Growth Index (+10.0%) in the first half.

    The first half of 2017 reversed most of the equity market leadership from 2016, including a rotation from value back to growth. This reversal, along with the related resurgence of biotechnology, was a factor in first-half performance. The Fund enjoyed a strong first quarter, gaining 5.1% versus 2.5% for the Russell 2000. It then slightly improved on that result with a 5.9% advance in the second quarter when the small-cap index once again climbed 2.5%. Smaller-Companies Growth also outpaced the Russell 2000 for the one-year, 15-year, and since inception (6/14/01) periods ended June 30, 2017. The Fund’s average annual total return since inception was 11.4%.

WHAT WORKED... AND WHAT DIDN’T

Eight of the Fund’s 10 equity sectors finished the semiannual period in the black. Perhaps unsurprisingly for a GARP strategy in a growth-driven market, Information Technology and Health Care made the biggest contributions to first-half results. The degree to which they dominated performance, however, was notable—at least to us. Three groups in tech, for example, were the portfolio’s leaders at the industry level—electronic equipment, instruments & components, software, and internet software & services. These were followed by pharmaceuticals, biotechnology, health care equipment & supplies, and health care providers & services—all from the Health Care sector.
    Top contributor and top-10 holding Clovis Oncology develops and acquires treatments that target specific subsets of cancer. It bypassed a competitor on the road to FDA approval for one product and went on to experience better-than-expected trial results. At the end of June, we thought both its existing product line and those in its pipeline made its business look highly attractive. Shopify is a Canadian company that provides a cloud-based, omni-channel commerce platform, mostly for smaller businesses. Fiscal first-quarter revenues soared by more than 75%, easily beating Wall Street’s consensus. We saw our investment as a toehold in a business with a long runway for growth, especially with growing demand for the company’s newer services. It was the Fund’s twelfth-largest holding at the end of June.
    Energy was the only portfolio sector to make a significant detraction in the first half as net losses for Consumer Staples were minor. After increasing our exposure to Energy in 2016, we cut back in 2017 in the face of tumbling oil prices and our contention that drilling innovations are disrupting the industry’s business cycle. Unit Corporation went from finishing 2016 as the portfolio’s top contributor to its second-biggest detractor in the first half. The company operates as a contract driller and exploration & production company while also offering energy-related services. Oil and gas production declined while its rig business suffered margin contraction due to long-term contract repricing and additional expenses from rig relocations and startups. We chose to sell our shares in June. We acted similarly with the Fund’s top detracting position, western and work gear retailer Boot Barn Holdings, whose business was hit with something of a double whammy, hurt by both the travails affecting many retailers and declining energy prices that slowed its previously strong business in oil-rich states.
    Relative to the Russell 2000, the Fund benefited most in the first half from savvy stock selection in Information Technology, Health Care, and Industrials. Conversely, our previously higher exposure to Energy, ineffective stock picks in Consumer Discretionary, and the Fund’s cash position all produced a relative detraction, although to a much lower degree.

Top Contributors to Performance
Year-to-Date Through 6/30/17 (%)1
Clovis Oncology	0.97
Shopify Cl. A	0.93
Universal Display	0.92
Paylocity Holding Corporation	0.82
Coherent	0.81
1 Includes dividends

Top Detractors from Performance
Year-to-Date Through 6/30/17 (%)2
Boot Barn Holdings	-0.62
Unit Corporation	-0.43
CyberOptics Corporation	-0.30
RSP Permian	-0.26
Progenics Pharmaceuticals	-0.24
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

After a strong first half, we have seen fewer businesses that fully satisfy the key criteria of our GARP approach. In addition, we have been trimming holdings that exceeded our sell targets and/or sported valuations that looked unsustainable and therefore too risky. The result was a higher-than-usual cash position of 7.0% at the end of June that we are eager to reduce as opportunities are hopefully uncovered in the year’s second half. We also remain cautiously optimistic that policies affecting corporate tax rates, regulation, and healthcare can be implemented over the next six to 12 months that could boost GDP growth. Moreover, we are still bullish on the themes that have guided much of our stock picking over the last 12-18 months: companies involved in cloud software and solutions, automation, robotics, and industrial technology, healthcare innovators (with a focus on device and drug discovery companies), and likely beneficiaries of increased spending on infrastructure and defense. At the end of the first half, we were overweight our two largest sectors, Information Technology and Health Care. Our exposure to both increased in the first half, mostly due to share price appreciation, as was the case with Financials and Industrials. We also actively reduced our weightings in Consumer Discretionary, Consumer Staples, and Energy due to our uncertainty about the near-term prospects for these underperforming areas.

36 | The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYVPX RVPHX RVPCX RVPIX RVPRX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	15-YR	SINCE INCEPTION (6/14/01)
RVP	11.26	26.08	6.05	12.35	4.53	10.98	11.42
Annual Operating Expenses: 1.51% Annual Net Operating Expenses: 1.49%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone™. 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 131 for additional information.

Value of $10,000

Invested on 6/14/01 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Unisys Corporation	2.0
TriState Capital Holdings	1.8
Supernus Pharmaceuticals	1.7
QAD Cl. A	1.7
Zealand Pharma	1.7
comScore	1.7
DIRTT Environmental Solutions	1.6
Clovis Oncology	1.6
IPG Photonics	1.5
ePlus	1.5

Portfolio Sector Breakdown
% of Net Assets
Information Technology	33.6
Health Care	16.0
Industrials	11.5
Financials	11.4
Consumer Discretionary	5.9
Materials	5.9
Real Estate	1.9
Energy	1.7
Telecommunication Services	0.9
Miscellaneous	4.2
Cash and Cash Equivalents	7.0

Calendar Year Total Returns (%)
YEAR	RVP
2016	9.4
2015	-1.8
2014	3.9
2013	32.5
2012	15.3
2011	-10.0
2010	19.7
2009	41.4
2008	-41.1
2007	3.2
2006	19.3
2005	13.2
2004	28.2
2003	79.9

Upside/Downside Capture Ratios
Periods Ended 6/30/17 (%)
	UPSIDE	DOWNSIDE
10-Year	93	107
From 6/30/01 (Start of Fund’s First Full Quarter)	114	100

Portfolio Diagnostics
Fund Net Assets	$396 million
Number of Holdings	108
Turnover Rate	30%
Average Market Capitalization1	$1,521 million
Weighted Average P/E Ratio2	3.5x
3-5 Year EPS Growth (est.)3	19.4%
Active Share4	95%
U.S. Investments (% of Net Assets)	81.8%
Non-U.S. Investments (% of Net Assets)	11.2%

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 3-5 Year EPS Growth (est.) is calculated as a simple weighted average of the pre-calculated mean long-term EPS growth rate estimates by brokerage analysts. Long Term Growth (LTG) is the annual EPS growth that the company can sustain over the next 3 or 5 years. Source: Factset
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Gross operating expenses reflect the Fund’s total gross annual operating expenses and include management fees, 12b-1 distribution and service fees, and other expenses. Net operating expenses reflect contractual fee waivers and/or expense reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive fees and/or reimburse operating expenses to the extent necessary to maintain the Fund’s net annual operating expenses (excluding brokerage commissions, taxes, interest, litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business) at or below 1.49% through April 30, 2018. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders  |  37

	MANAGERS’ DISCUSSION
Royce Special Equity Fund (RSE)

Charlie Dreifus, CFA
Steven McBoyle, CPA, CA

FUND PERFORMANCE
Royce Special Equity Fund fell 0.4% for the year-to-date period ended June 30, 2017, trailing its small-cap benchmark, the Russell 2000 Index, which rose 5.0% for the same period. After posting the best calendar-year return in its history in 2016, an increase of 32.2%, the Fund was susceptible to some adjustment in results. Further, there was a rotation in the first half of 2017 away from what worked last year—small-cap, value, many cyclical sectors—into what lagged, such as growth stocks and more defensive areas, neither of which suits our classic value approach. So while disappointing, first-half performance was not surprising in this inhospitable context.
    The return pattern was established in the first quarter, when small-cap results were dominated by the lowest return on equity, non-earners, non-dividend payers, fastest sales growth, and highest beta companies. Special Equity was down 0.3% for the quarter while the Russell 2000 was up 2.5%. The Fund fared only marginally better in the second quarter, which again saw leadership from more speculative businesses. Special Equity fell 0.05% versus a 2.5% increase for the small-cap benchmark. Longer-term results were better on both an absolute and relative basis, and we were pleased that the Fund outperformed the Russell 2000 for the 10-year and since inception (5/1/98) periods ended June 30, 2017. Special Equity’s average annual total return since inception was 9.3%.

WHAT WORKED... AND WHAT DIDN’T

Two of the Fund’s six equity sectors detracted from first-half performance, though only Consumer Staples made a significant negative impact—net losses for Real Estate were de minimis. Most of the net losses in Consumer Staples came from a disappointing performance for supermarket chain operator Weis Markets. The portfolio’s sole holding in the food & staples retailing group and its biggest overall detractor for the semiannual period, Weis was also a top-10 position at the end of June. While we finished the semiannual period with fewer shares than we owned at the end of 2016, we made small share purchases in April and June of this year as its stock price fell.
    Also detracting in the first half was multinational business consulting firm Resources Connection. We acted in a similar fashion with its stock by adding shares in the second quarter after trimming in the first. Children’s publishing, education, and media company Scholastic Corporation is another top-10 holding that fared poorly. We built our stake modestly in March. We also added to positions in two top-20 holdings. Flexsteel Industries manufactures residential and contract upholstered and wooden furniture while John B. Sanfilippo & Son, a second holding in Consumer Staples, distributes a diverse product line of mostly nut-based snack items.
    Of the four sectors that made positive contributions to first-half results, Information Technology made by far the most substantial impact, boosted by strong results for three industry groups—semiconductors & semiconductor equipment, electronic equipment, instruments & components, and IT services. The Fund’s top-performing industry, however, was machinery, which is in the Industrials sector. Automatic test equipment maker—and top-10 holding—Teradyne was the Fund’s best performer at the position level and in the semiconductors & semiconductor equipment group. Machinery company Wabash National, which manufactures truck trailers, made a notable contribution to first-half results, while manufacturer Bassett Furniture Industries turned around a difficult first quarter to make the list of top first-half contributors. Computer Services, which provides financial technology solutions and regulatory compliance software to banks, financial institutions, and other businesses, also contributed to results.
    Results relative to the Russell 2000 were affected most by both our overweight and ineffective stock picking in the Consumer Staples and Consumer Discretionary sectors, especially in the latter’s household durables group, where first-quarter losses outweighed the second-quarter rebound. Our lack of exposure to Health Care also detracted. Conversely, the Fund’s lack of exposure to both Financials and Energy was a strength relative to the benchmark in the first half.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
Teradyne	0.66
Wabash National	0.43
Bassett Furniture Industries	0.41
Computer Services	0.38
Kaiser Aluminum	0.36
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
Weis Markets	-1.18
Resources Connection	-0.48
Scholastic Corporation	-0.39
Flexsteel Industries	-0.25
John B. Sanfilippo & Son	-0.24
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

The market looks too complacent to us. Stocks advancing on the prospect of economic growth is inconsistent with declining bond yields that suggest a weaker outlook. Only one of these views can be right. Investors thus far seem willing to pay up for the shares of companies that they believe can continue to do well even if the overall outlook may be saying otherwise. The favored issues this year have had perceived growth at rates much more vibrant than the tepid outlook for the economy. A more refined approach— and dare we say a potentially more rewarding one?—might be companies that have the capacity and willingness to grow their dividends. We continue to believe that the world is both yield conscious and yield undernourished and think that an aging population with expectations of a longer retirement period will exert downward pressure on yields. We also suspect that this hunger, coupled with likely low absolute rates for the foreseeable future, portends a likely revolution of companies that will be raising their dividends. This remains a key component of our search. We think growing income scarcity is just as important as scarcity in revenue and earnings growth, perhaps even more so.

38  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS   RYSEX RSEFX RSEIX RSQCX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	15-YR	SINCE INCEPTION (5/1/98)
RSE	-0.36	21.63	5.23	10.45	7.31	8.85	9.26
Annual Operating Expenses: 1.17%
1 Not annualized

Relative Risk Adjusted Returns: Monthly Rolling Sharpe Ratios

Since Inception Through 6/30/17

On a monthly rolling risk-adjusted basis, the Fund outperformed the Russell 2000 in 100% of all 10-year periods and 74% of all 5-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	110/110	100%	0.55	0.33
5-year	126/170	74%	0.68	0.45

¹Average of monthly rolling Sharpe Ratios over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000
Invested on 5/1/98 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
AVX Corporation	5.3
Children’s Place	5.3
UniFirst Corporation	4.9
Scholastic Corporation	4.6
Standard Motor Products	4.4
Hubbell Cl. B	3.9
Meredith Corporation	3.5
Cooper Tire & Rubber	3.4
Weis Markets	3.4
Teradyne	3.4

Portfolio Sector Breakdown
% of Net Assets
Consumer Discretionary	38.2
Industrials	21.0
Information Technology	17.3
Materials	6.3
Consumer Staples	6.2
Real Estate	2.0
Cash and Cash Equivalents	9.0

Calendar Year Total Returns (%)
YEAR	RSE
2016	32.2
2015	-12.4
2014	1.1
2013	29.4
2012	15.4
2011	0.1
2010	19.6
2009	28.4
2008	-19.6
2007	4.7
2006	14.0
2005	-1.0
2004	13.9
2003	27.6
2002	15.3

Upside/Downside Capture Ratios
Periods Ended 6/30/17 (%)
	UPSIDE	DOWNSIDE
10-Year	77	64
From 6/30/98 (Start of Fund’s First Full Quarter)	73	48

Portfolio Diagnostics
Fund Net Assets	$1,532 million
Number of Holdings	41
Turnover Rate	11%
Average Market Capitalization1	$1,298 million
Weighted Average P/E Ratio2,3	19.1x
Weighted Average P/B Ratio2	2.1x
Active Share4	98%
U.S. Investments (% of Net Assets)	90.0%
Non-U.S. Investments (% of Net Assets)	1.0%

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 (4% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Investment Class (its oldest class). Operating expenses reflect the Fund’s total annual operating expenses for the Investment Class as of the Fund’s most current prospectus and include management fees and other expenses. The Sharpe Ratio is calculated for a specified period by dividing a fund’s annualized excess returns by its annualized standard deviation. The higher the Sharpe ratio, the better the fund’s historical risk-adjusted performance. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders |  39

	MANAGERS’ DISCUSSION
Royce Special Equity Multi-Cap Fund (RSM)

Charlie Dreifus, CFA
Steven McBoyle, CPA, CA

FUND PERFORMANCE
Royce Special Equity Multi-Cap Fund posted a solid absolute performance in the first half while trailing on a relative basis. The Fund increased 5.9% for the year-to-date period ended June 30, 2017 versus a 9.3% gain for its large-cap benchmark, the Russell 1000 Index, for the same period.
    The portfolio embodied A Tale of Two Quarters, at least when compared to its benchmark. For the first quarter, the Fund experienced the same lofty returns as most large-cap stocks—even more so, actually—and outpaced the Russell 1000, advancing 7.0% compared to 6.0% for the benchmark. Considering the strength in the first quarter of Information Technology, where we were underweighted, and Health Care, where we had no exposure, this was an especially gratifying outcome. Helping most were terrific results from Apple (the Fund’s top contributor in the first half) and, to a lesser extent, motion control products maker Parker Hannifin. There were also mostly minor losses from detractors, the largest of which was retailer Dicks Sporting Goods, 2016’s top contributor.
    The second quarter, on the other hand, saw less stellar results from contributors accompanied by further share price declines for Dicks and an impactful loss for industrial supplies distributor W.W. Grainger. The result was a loss of 0.9% for the Fund in the second quarter while the Russell 1000 climbed 3.1%. We were pleased, however, that Special Equity Multi-Cap outperformed the large-cap index for the one-year period ended June 30, 2017. The Fund’s average annual total return since inception (12/31/10) was 10.0%.

WHAT WORKED... AND WHAT DIDN’T

Four of the Fund’s six equity sectors finished the first half in the black, with Industrials leading by a substantial margin and Information Technology also making a notable contribution. Of the two sectors that detracted, Consumer Discretionary made the largest negative impact, thanks to disappointing results from Dicks Sporting Goods. While we are all too aware of the challenges facing retailers in the age of Amazon, we thought highly enough of the company’s long-term prospects to hold a large stake at the end of June.
    The last 12 years were characterized by central banks providing ample liquidity and keeping rates low. Barron’s recently referenced some compelling data on the period compiled by the University of Chicago’s Eugene Fama and Dartmouth College’s Kenneth French: For the 12 years ended April 30, 2017, value stocks underperformed growth by an annualized average of 0.7%. This was contrasted with the prior eight decades, going back to 1926, in which value outperformed growth by an average of 4.8% a year. The only other 12-year span since 1926 when value underperformed growth was the 12-year period ended March 31, 2000. We suspect that those who ignore this history, and its related force of mean reversion, invest in expensive growth at their peril.
    Much has been written about the low volatility in the current market. What has not received as much attention is its impact on drawdowns. We have seen a quiet market with a clear upside bias. The maximum drawdown for the S&P 500 in the first half of 2017 topped out at 2.8%, the second-smallest first-half in 89 years. Investors are simply far too comfortable in our view. We would ask whether the macro picture is currently so inviting as to justify this placidly positive mood. We certainly don’t believe it is and would hasten to add that complacency usually engenders negative outcomes. The Nasdaq 100 Index posted a larger number of higher daily closes only once before other than 2017—in 1999. This is not a good history in our estimation.
    Relative to the Russell 1000, the Fund suffered most in the first half from stock selection in Consumer Discretionary (thanks again to Dicks Sporting Goods). Our lack of exposure to the rebounding Health Care sector as well as the portfolio’s cash position were also drags on relative results. Conversely, the Fund’s lack of exposure to both correcting Energy stocks and Telecommunication Services companies was a plus, as was stock selection in Industrials, where global staffing and services company ManpowerGroup stood out.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
Apple	2.33
Illinois Tool Works	1.32
Parker Hannifin	0.97
ManpowerGroup	0.85
McDonald’s	0.63
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
Dicks Sporting Goods	-1.72
Grainger (W.W.)	-0.74
Avnet	-0.34
Carlisle Companies	-0.26
Snap-on	-0.22
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

Stocks advancing on the prospect of economic growth is inconsistent with declining bond yields that suggest a weaker outlook. Only one of these views can be right. Investors thus far seem willing to pay up for the shares of companies that they believe can continue to do well even if the overall outlook may be saying otherwise. The favored issues this year have had perceived growth at rates much more vibrant than the tepid outlook for the economy. A more refined approach—and dare we say a potentially more rewarding one?—might be companies that have the capacity and willingness to grow their dividends. We continue to believe that the world is both yield conscious and yield undernourished and think that an aging population with expectations of a longer retirement period will exert downward pressure on yields. We also suspect that this hunger, coupled with likely low absolute rates for the foreseeable future, portends a likely revolution of companies that will be raising their dividends. This remains a key component of our search. We think growing income scarcity is just as important as scarcity in revenue and earnings growth, perhaps even more so.

40  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOL   RSEMX RSMCX RMUIX RSMLX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	SINCE INCEPTION (12/31/10)
RSM	5.95	21.04	2.57	10.14	9.96
Annual Gross Operating Expenses: 1.34%  Annual Net Operating Expenses: 1.24%
1 Not annualized

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 12/31/10 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Apple	10.1
Illinois Tool Works	7.3
Genuine Parts	7.1
Dicks Sporting Goods	5.6
Parker Hannifin	5.1
Cisco Systems	4.0
VF Corporation	3.8
Snap-on	3.7
Grainger (W.W.)	3.1
Lowe’s Companies	3.0

Portfolio Sector Breakdown
% of Net Assets
Industrials	37.5
Consumer Discretionary	26.2
Information Technology	16.2
Consumer Staples	7.5
Materials	2.7
Financials	1.0
Cash and Cash Equivalents	8.9

Calendar Year Total Returns (%)
YEAR	RSM
2016	13.7
2015	-13.6
2014	9.3
2013	36.3
2012	11.6
2011	7.2

Portfolio Diagnostics
Fund Net Assets	$110 million
Number of Holdings	28
Turnover Rate	14%
Average Market Capitalization1	$33,365 million
Weighted Average P/E Ratio2,3	19.7x
Weighted Average P/B Ratio2	4.0x
Active Share4	92%
U.S. Investments (% of Net Assets)	91.1%
Non-U.S. Investments (% of Net Assets)	0.0%

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 (1% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Service Class (its oldest class). Gross operating expenses reflect gross total annual operating expenses for the Service Class and include management fees, 12b-1 distribution and service fees and other expenses. Net operating expenses reflect contractual fee waivers and/or reimbursements. All expense information is reported as of the Fund’s most current prospectus. Royce & Associates has contractually agreed to waive fees and/or reimburse operating expenses to the extent necessary to maintain the Service Classes’s net annual operating expenses, (excluding brokerage commissions, taxes, interest litigation expenses, acquired fund fees and expenses, and other expenses not borne in the ordinary course of business), at or below 1.24% through April 30, 2018. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017.

The Royce Funds 2017 Semiannual Report to Shareholders |  41

	MANAGERS’ DISCUSSION
Royce Total Return Fund (RTR)

Chuck Royce
Jay Kaplan, CFA

FUND PERFORMANCE
Royce Total Return Fund gained 2.8% for the year-to-date period ended June 30, 2017, behind its small-cap benchmark, the Russell 2000 Index, which was up 5.0% for the same period. Unlike 2016, a year in which both small-cap dividend payers and value stocks enjoyed higher relative returns, the first half of 2017 offered a narrower, growth-driven market that also featured very low levels of volatility. Against this backdrop, results for our dividend-focused value approach were not surprising.
    The Fund rose 2.2% in the first quarter versus 2.5% for the Russell 2000, a respectable result in light of the generally underwhelming results for value stocks. The second quarter proved difficult for several holdings in both consumer sectors as well as certain positions in the industrial space, while the portfolio’s substantially lower exposure to resurgent Health Care stocks was also a factor. The Fund was up 0.5% in the second quarter versus 2.5% for the small-cap index. Longer-term results were stronger on both an absolute and relative basis. Total Return outperformed the Russell 2000 for the 20-year and since inception (12/15/93) periods ended June 30, 2017. The Fund’s average annual total return since inception was 10.8%.

WHAT WORKED... AND WHAT DIDN’T

Seven of the Fund’s 11 equity sectors made positive contributions to first-half results. Driven by strength in the capital markets and insurance industries, Financials led by a wide margin. For many years one of the Fund’s largest sectors, financial companies offer great diversity in terms of business models, and many stocks in the sector also boast long dividend-paying histories. The sector’s top contributor in the first half of 2017 was Canadian investment and insurance business E-L Financial, which benefited from increases in net investment income, assets under management, and profits from wealth management.
    Other industries that did well in the first half included chemicals (Materials) and professional services (Industrials). The top-contributing holding was global staffing and services company ManpowerGroup, whose stock was helped by improved topline growth and a strong bottom line in 2016, solid fiscal first-quarter 2017 earnings, and a brightening global employment picture. Teleflex provides medical technology and devices used for critical care and surgical applications. Two consecutive quarters of better-than-expected earnings helped to draw investors. We initially liked its niche business, solid cash flow, and dividend. It’s a good example of our conservative, risk-conscious approach to the Health Care sector, where dividends are scarce. Less than 8% of the small-cap companies in the sector paid a dividend at the end of June 2017, which accounts for the sector’s perennial underweight in the portfolio.
    Four sectors detracted from first-half results, with Energy and Consumer Discretionary making the biggest negative impacts. The latter sector’s specialty retail group hurt performance most as the industry continues to struggle with secular shifts in consumer spending and behavior. We reduced our exposure by nearly half, selling our shares of holdings such as footwear, headwear, and sports apparel retailer Genesco and car repair and tire services business Monro Muffler Brake. The top detractor at the position level was SEACOR Holdings, which provides marine transportation equipment and logistics services mostly for the energy and agricultural markets. Its earnings remained pressured by ongoing weakness in the offshore marine vessel business, which was exacerbated by the decline in oil prices in the first half, as well as overcapacity in its inland river barge and tow business. HNI Corporation manufactures office furniture and household products. Its shares slumped due to declining revenues and disappointing earnings in the first quarter. Liking its long-term prospects, we built our stake in the first half.
    First-half relative performance suffered most from our significant underweight in Health Care. Both our larger weighting and disappointing results in specialty retail stocks created a disadvantage in Consumer Discretionary. The brightest spot for first-half relative performance came from Financials, where superior stock selection in capital markets and banks (where our underweight also helped) drove the sector’s results. Effective stock selection in the Materials sector was also a relative positive.

Top Contributors to Performance Year-to-Date Through 6/30/17 (%)1
ManpowerGroup	0.33
Teleflex	0.26
E-L Financial	0.26
Hill-Rom Holdings	0.26
Quaker Chemical	0.25
1 Includes dividends

Top Detractors from Performance Year-to-Date Through 6/30/17 (%)2
SEACOR Holdings	-0.23
HNI Corporation	-0.22
Cato Corporation (The) Cl. A	-0.21
Genesco	-0.19
Ritchie Bros. Auctioneers	-0.13
2 Net of dividends

CURRENT POSITIONING AND OUTLOOK

We reduced our exposure to Consumer Discretionary, not just in the specialty retail group but also in textile, apparel & luxury goods as the ongoing negative effects of e-commerce show no signs of abating. Additionally, we somewhat repositioned the Fund’s weightings in Financials by trimming property & casualty insurers and traditional asset managers in favor of banks and alterative asset managers. Over the last couple of years, we have been increasingly drawn to non-traditional asset managers, specifically in the alternative asset management space, which we think is an undervalued zone in an asset-light business that is not well understood by other investors. Overall, the portfolio is positioned to benefit from any cyclical upswing, with approximately two-thirds of its assets in Financials, Industrials, and Materials. We also think that its dividend-paying approach may help it to hold up relatively well if the long-awaited small-cap correction occurs in the second half.

42  |  The Royce Funds 2017 Semiannual Report to Shareholders

PERFORMANCE AND PORTFOLIO REVIEW TICKER SYMBOLS  RYTRX RYTFX RTRIX RYTCX RTRRX RTRKX RTRWX

Performance and Expenses
Average Annual Total Return (%) Through 6/30/17
	JAN-JUN 20171	1-YR	3-YR	5-YR	10-YR	15-YR	20-YR	SINCE INCEPTION (12/15/93)
RTR	2.78	19.09	5.80	12.15	6.24	8.76	9.33	10.82
Annual Operating Expenses: 1.21%
1Not Annualized

Relative Risk Adjusted Returns: Monthly Rolling Sharpe Ratios

20 Years Through 6/30/17

On a monthly rolling risk-adjusted basis, the Fund outperformed the Russell 2000 in 98% of all 10-year periods and 92% of all 5-year periods.

	PERIODS BEATING THE INDEX		FUND AVG (%)1	INDEX AVG (%)1
10-year	118/121	98%	0.46	0.32
5-year	167/181	92%	0.61	0.42

¹Average of monthly rolling Sharpe Ratios over the specified periods.

The Morningstar Style Map is the Morningstar Style Box^™ with the center 75% of fund holdings plotted as the Morningstar Ownership Zone^™. 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 131 for additional information.

Value of $10,000

Invested on 12/15/93 as of 6/30/17 ($)

Top 10 Positions
% of Net Assets
Quaker Chemical	1.9
E-L Financial	1.7
Erie Indemnity Cl. A	1.7
ManpowerGroup	1.6
Tennant Company	1.4
Albemarle Corporation	1.3
Thor Industries	1.2
Woodward	1.2
Teleflex	1.1
Alleghany Corporation	1.1

Portfolio Sector Breakdown
% of Net Assets
Financials	27.4
Industrials	24.9
Materials	13.7
Consumer Discretionary	9.8
Information Technology	6.0
Health Care	4.9
Consumer Staples	3.1
Energy	2.6
Utilities	2.3
Telecommunication Services	1.1
Real Estate	0.1
Miscellaneous	1.2
Corporate Bond	0.2
Cash and Cash Equivalents	2.7

Calendar Year Total Returns (%)
YEAR	RTR
2016	25.9
2015	-7.2
2014	1.3
2013	32.8
2012	14.4
2011	-1.7
2010	23.5
2009	26.2
2008	-31.2
2007	2.4
2006	14.5
2005	8.2
2004	17.5
2003	30.0
2002	-1.6

Upside/Downside Capture Ratios
Periods Ended 6/30/17 (%)
	UPSIDE	DOWNSIDE
10-Year	82	79
From 12/31/93 (Start of Fund’s First Full Quarter)	81	55

Portfolio Diagnostics
Fund Net Assets	$2,608 million
Number of Holdings	286
Turnover Rate	6%
Average Market Capitalization1	$2,119 million
Weighted Average P/E Ratio2,3	18.9x
Weighted Average P/B Ratio2	2.1x
Active Share4	90%
U.S. Investments (% of Net Assets)	85.5%
Non-U.S. Investments (% of Net Assets)	11.6%

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 (5% of portfolio holdings as of 6/30/17).
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 Expense Information

All performance information in this Report reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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 redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.roycefunds.com. All performance and risk information reflects results of the Investment Class (its oldest class). Certain immaterial adjustments were made to the net assets of Royce Total Return Fund at 6/30/17 for financial reporting purposes, and as a result the net asset values for shareholder transactions on that date and the calendar year Total Returns (%) based on those net asset values differ from the adjusted net asset values and calendar year total returns reported in the Financial Highlights. Operating expenses reflect the Fund’s total annual operating expenses for the Investment Class as of the Fund’s most current prospectus and include management fees, other expenses, and acquired fund fees and expenses. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by the Fund through its investments in mutual funds, hedge funds, private equity funds, and other investment companies. Regarding the “Top Contributors” and “Top Detractors” tables shown above, 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 2017. The Sharpe Ratio is calculated for a specified period by dividing a fund’s annualized excess returns by its annualized standard deviation. The higher the Sharpe ratio, the better the fund’s historical risk-adjusted performance. Upside Capture Ratio measures a manager’s performance in up markets relative to the Fund’s benchmark. It is calculated by measuring the Fund’s performance in quarters when the benchmark went up and dividing it by the benchmark’s return in those quarters. Downside Capture Ratio measures a manager’s performance in down markets relative to the Fund’s benchmark (Russell 2000). It is calculated by measuring the Fund’s performance in quarters when the benchmark goes down and dividing it by the benchmark’s return in those quarters.

The Royce Funds 2017 Semiannual Report to Shareholders | 43

Schedules of Investments

Royce Dividend Value Fund
Common Stocks – 99.7%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 9.2%
AUTO COMPONENTS - 2.6%
Autoliv	9,600	$	1,054,080
Gentex Corporation	110,496		2,096,109
Nokian Renkaat	47,000		1,945,401
			5,095,590
AUTOMOBILES - 0.8%
Thor Industries	14,940		1,561,529
HOUSEHOLD DURABLES - 1.2%
Hunter Douglas	27,600		2,350,064
MULTILINE RETAIL - 0.3%
Dillard’s Cl. A	11,400		657,666
SPECIALTY RETAIL - 3.0%
American Eagle Outfitters	173,800		2,094,290
DSW Cl. A	115,049		2,036,367
Fielmann	6,400		493,701
USS	70,000		1,389,731
			6,014,089
TEXTILES, APPAREL & LUXURY GOODS - 1.3%
HUGO BOSS	13,000		910,179
Stella International Holdings	100,000		179,316
Steven Madden 1	35,008		1,398,570
			2,488,065
Total (Cost $13,939,884)			18,167,003
CONSUMER STAPLES – 1.2%
FOOD & STAPLES RETAILING - 0.2%
FamilyMart UNY Holdings	6,000		343,010
FOOD PRODUCTS - 1.0%
Hormel Foods	47,900		1,633,869
Industrias Bachoco ADR	6,100		353,678
			1,987,547
Total (Cost $945,621)			2,330,557
ENERGY – 2.7%
ENERGY EQUIPMENT & SERVICES - 2.3%
Helmerich & Payne	44,654		2,426,498
TGS-NOPEC Geophysical	100,900		2,067,853
			4,494,351
OIL, GAS & CONSUMABLE FUELS - 0.4%
Gaztransport Et Technigaz	22,700		906,790
Total (Cost $6,095,175)			5,401,141
FINANCIALS – 29.8%
BANKS - 5.1%
BGEO Group	58,000		2,639,440
BLOM Bank GDR	63,000		762,300
BOK Financial	22,114		1,860,451
City Holding Company	8,689		572,345
First Republic Bank	42,500		4,254,250
			10,088,786
CAPITAL MARKETS - 22.4%
Ashmore Group	624,000		2,870,557
AURELIUS Equity Opportunities	9,000		483,489
BM&FBOVESPA	322,000		1,919,617
Bolsa Mexicana de Valores	1,443,000		2,534,766
Carlyle Group L.P.	141,000		2,784,750
Coronation Fund Managers	213,000		1,061,378
Federated Investors Cl. B	73,700		2,082,025
Gluskin Sheff + Associates	51,700		667,778
Houlihan Lokey Cl. A	17,500		610,750
Interactive Brokers Group Cl. A	22,600		845,692
Jupiter Fund Management	408,000		2,683,567
KKR & Co. L.P.	246,200		4,579,320
Lazard Cl. A	40,100		1,857,833
Moelis & Company Cl. A	43,220		1,679,097
Northern Trust	25,000		2,430,250
Oaktree Capital Group LLC Cl. A	59,500		2,772,700
SEI Investments	53,000		2,850,340
Singapore Exchange	70,000		373,198
Sprott	735,700		1,293,489
State Street	27,900		2,503,467
TD Ameritrade Holding Corporation	74,100		3,185,559
Value Partners Group	2,527,200		2,301,442
			44,371,064
DIVERSIFIED FINANCIAL SERVICES - 1.0%
Leucadia National	76,900		2,011,704
INSURANCE - 0.6%
Reinsurance Group of America	9,655		1,239,605
THRIFTS & MORTGAGE FINANCE - 0.7%
Genworth MI Canada	47,748		1,313,733
Total (Cost $43,230,624)			59,024,892
HEALTH CARE – 4.7%
HEALTH CARE EQUIPMENT & SUPPLIES - 2.6%
Dentsply Sirona	80,000		5,187,200
HEALTH CARE PROVIDERS & SERVICES - 0.2%
Ensign Group (The)	16,600		361,382
HEALTH CARE TECHNOLOGY - 0.2%
CompuGroup Medical	7,300		409,631
PHARMACEUTICALS - 1.7%
Recordati	66,000		2,677,564
Santen Pharmaceutical	52,000		704,583
			3,382,147
Total (Cost $5,453,789)			9,340,360
INDUSTRIALS – 28.1%
AEROSPACE & DEFENSE - 1.4%
HEICO Corporation Cl. A	45,165		2,802,488
AIR FREIGHT & LOGISTICS - 1.9%
Expeditors International of Washington	65,200		3,682,496
BUILDING PRODUCTS - 1.5%
Apogee Enterprises	18,600		1,057,224
Geberit	1,000		466,368
TOTO	37,000		1,411,247
			2,934,839
COMMERCIAL SERVICES & SUPPLIES - 0.3%
Societe BIC	5,600		664,548
CONSTRUCTION & ENGINEERING - 1.6%
Comfort Systems USA	16,700		619,570
Jacobs Engineering Group	10,000		543,900
KBR	136,900		2,083,618
			3,247,088
ELECTRICAL EQUIPMENT - 1.1%
Hubbell Cl. B	18,200		2,059,694
MACHINERY - 11.7%
Alamo Group	3,708		336,724
Donaldson Company	83,900		3,820,806
Federal Signal	11,829		205,351
Flowserve Corporation	20,100		933,243

44 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Dividend Value Fund (continued)
	SHARES		VALUE
INDUSTRIALS (continued)
MACHINERY (continued)
Graco	23,500	$	2,568,080
IDEX Corporation	37,300		4,215,273
Lincoln Electric Holdings	27,050		2,491,035
Lindsay Corporation	27,500		2,454,375
Pfeiffer Vacuum Technology	13,500		1,975,947
Spirax-Sarco Engineering	30,492		2,124,715
Wabash National	96,500		2,121,070
			23,246,619
MARINE - 1.1%
Clarkson	67,400		2,217,452
PROFESSIONAL SERVICES - 3.9%
Korn/Ferry International	53,200		1,836,996
ManpowerGroup	40,200		4,488,330
Robert Half International	29,100		1,394,763
			7,720,089
ROAD & RAIL - 2.0%
Amerco	8,442		3,090,278
Werner Enterprises	29,500		865,825
			3,956,103
TRADING COMPANIES & DISTRIBUTORS - 1.6%
Applied Industrial Technologies	53,700		3,170,985
Total (Cost $33,791,857)			55,702,401
INFORMATION TECHNOLOGY – 7.5%
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 3.4%
FLIR Systems	104,800		3,632,368
Methode Electronics	24,600		1,013,520
Vishay Intertechnology	123,188		2,044,921
			6,690,809
IT SERVICES - 1.2%
Convergys Corporation	17,000		404,260
Western Union	109,100		2,078,355
			2,482,615
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.3%
MKS Instruments	8,908		599,508
SOFTWARE - 0.8%
Computer Modelling Group	140,000		1,099,013
SimCorp	7,000		424,063
			1,523,076
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.8%
Diebold Nixdorf	128,000		3,584,000
Total (Cost $13,220,032)			14,880,008
MATERIALS – 13.3%
CHEMICALS - 2.1%
Quaker Chemical	26,800		3,892,164
Victrex	10,000		244,340
			4,136,504
CONTAINERS & PACKAGING - 3.1%
AptarGroup	41,200		3,578,632
Greif Cl. A	46,300		2,582,614
			6,161,246
METALS & MINING - 8.1%
Carpenter Technology	69,300		2,593,899
Compass Minerals International	38,100		2,487,930
Franco-Nevada Corporation	36,000		2,597,760
Reliance Steel & Aluminum	50,900		3,706,029
Royal Gold	19,900		1,555,583
Worthington Industries	62,200		3,123,684
			16,064,885
Total (Cost $18,423,598)			26,362,635
REAL ESTATE – 0.2%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.2%
Relo Group	23,000		447,219
Total (Cost $107,244)			447,219
TELECOMMUNICATION SERVICES – 0.5%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.5%
Inmarsat	105,000		1,052,347
Total (Cost $1,165,014)			1,052,347
UTILITIES – 1.4%
WATER UTILITIES - 1.4%
Aqua America	84,000		2,797,200
Total (Cost $2,013,787)			2,797,200
MISCELLANEOUS2 – 1.1%
Total (Cost $2,143,744)			2,067,324
TOTAL COMMON STOCKS
(Cost $140,530,369)			197,573,087
REPURCHASE AGREEMENT– 0.9%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $1,678,017 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $1,714,544)
(Cost $1,678,000)			1,678,000
TOTAL INVESTMENTS – 100.6%
(Cost $142,208,369)			199,251,087
LIABILITIES LESS CASH AND OTHER ASSETS – (0.6)%			(1,090,982	)
NET ASSETS – 100.0%		$	198,160,105

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 45

Schedules of Investments

Royce Global Financial Services Fund
Common Stocks – 97.5%
	SHARES		VALUE
BANKS - 17.2%
BankUnited	4,100	$	138,211
BLOM Bank GDR	8,000		96,800
BOK Financial	12,200		1,026,386
Capital City Bank Group	29,822		608,965
Chemung Financial	14,512		593,251
First Citizens BancShares Cl. A	3,465		1,291,405
First Republic Bank	10,400		1,041,040
Investors Bancorp	25,300		338,008
Live Oak Bancshares	45,000		1,089,000
Popular	28,900		1,205,419
State Bank Financial	12,500		339,000
Umpqua Holdings	17,400		319,464
†Webster Financial	14,600		762,412
Total (Cost $6,372,501)			8,849,361
CAPITAL MARKETS - 48.8%
Ares Management L.P.	51,700		930,600
Ashmore Group	285,000		1,311,072
Associated Capital Group Cl. A	14,084		478,856
BM&FBOVESPA	136,000		810,770
Canaccord Genuity Group	88,000		361,690
Carlyle Group L.P.	41,700		823,575
Charles Schwab (The) Corporation	20,900		897,864
Citadel Capital 1	150,000		6,623
Coronation Fund Managers	68,000		338,843
CRISIL	14,000		423,438
Dundee Corporation Cl. A 1	90,000		197,795
†Edelweiss Financial Services	155,000		458,495
Edmond de Rothschild (Suisse)	20		341,016
Egyptian Financial Group-Hermes Holding
Company	246,390		328,384
Financial Engines	14,820		542,412
Gluskin Sheff + Associates	70,500		910,607
GMP Capital 1	108,000		264,837
Hellenic Exchanges - Athens Stock Exchange	50,000		324,370
Intermediate Capital Group	39,111		424,076
INTL FCStone 1	12,100		456,896
IOOF Holdings	20,000		150,646
JSE	51,000		477,585
Jupiter Fund Management	118,800		781,392
KKR & Co. L.P.	23,900		444,540
Lazard Cl. A	7,500		347,475
MarketAxess Holdings	4,600		925,060
Medley Management Cl. A	31,302		203,463
MVC Capital	47,100		464,406
Northern Trust	11,600		1,127,636
NZX	440,000		361,124
Oaktree Capital Group LLC Cl. A	12,730		593,218
Partners Group Holding	670		415,387
Reinet Investments	7,200		176,723
Rothschild & Co	23,500		857,823
SEI Investments	19,900		1,070,222
Silvercrest Asset Management Group Cl. A	41,600		559,520
Singapore Exchange	105,000		559,797
Sprott	680,000		1,195,558
TD Ameritrade Holding Corporation	12,715		546,618
Tokai Tokyo Financial Holdings	9,400		52,067
U.S. Global Investors Cl. A	359,200		549,576
UOB-Kay Hian Holdings	129,000		126,494
Value Partners Group	672,000		611,969
Virtu Financial Cl. A	61,000		1,076,650
VZ Holding	1,850		593,740
Warsaw Stock Exchange	19,000		250,315
Total (Cost $21,448,738)			25,151,223
DIVERSIFIED CONSUMER SERVICES - 0.1%
H&R Block	2,000		61,820
Total (Cost $44,290)			61,820
DIVERSIFIED FINANCIAL SERVICES - 0.3%
SHUAA Capital 1	580,000		170,542
Total (Cost $308,882)			170,542
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.9%
†Colony NorthStar Cl. A	31,500		443,835
Total (Cost $383,891)			443,835
HOTELS, RESTAURANTS & LEISURE - 0.2%
Thomas Cook (India)	30,600		116,269
Total (Cost $28,633)			116,269
INSURANCE - 6.8%
E-L Financial	2,400		1,563,849
Jardine Lloyd Thompson Group	11,900		185,990
MBIA 1	95,300		898,679
National Western Life Group Cl. A	2,750		878,955
Total (Cost $2,992,178)			3,527,473
INTERNET SOFTWARE & SERVICES - 0.1%
Novation Companies 1,3	223,459		28,759
Total (Cost $101,010)			28,759
INVESTMENT COMPANIES - 1.0%
RIT Capital Partners	20,000		495,192
Total (Cost $394,542)			495,192
IT SERVICES - 3.0%
Cass Information Systems	3,800		249,432
DST Systems	5,800		357,860
GBST Holdings	105,000		239,688
PayPal Holdings 1	12,800		686,976
Total (Cost $1,351,561)			1,533,956
MARINE - 1.4%
Clarkson	22,000		723,797
Total (Cost $774,855)			723,797
METALS & MINING - 2.1%
Franco-Nevada Corporation	15,000		1,082,400
Total (Cost $782,045)			1,082,400
PROFESSIONAL SERVICES - 1.7%
IHS Markit 1	14,000		616,560
Verisk Analytics 1	3,200		269,984
Total (Cost $436,359)			886,544
REAL ESTATE MANAGEMENT & DEVELOPMENT - 7.2%
Altus Group	32,000		691,672
FirstService Corporation	23,200		1,484,336
†FRP Holdings 1	18,100		835,315

46 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Global Financial Services Fund (continued)
	SHARES			VALUE
REAL ESTATE MANAGEMENT & DEVELOPMENT (continued)
Midland Holdings 1	800,000		$	216,204
Midland IC&I 1	400,000			21,261
RMR Group Cl. A	10,000			486,500
Total (Cost $2,966,337)				3,735,288
SOFTWARE - 2.5%
Bottomline Technologies 1	13,600			349,384
Fair Isaac	6,660			928,471
Total (Cost $546,845)				1,277,855
THRIFTS & MORTGAGE FINANCE - 1.2%
BofI Holding 1	25,700			609,604
Total (Cost $466,954)				609,604
MISCELLANEOUS2 - 3.0%
Total (Cost $1,374,565)				1,532,648
TOTAL COMMON STOCKS
(Cost $40,774,186)				50,226,566
REPURCHASE AGREEMENT– 1.9%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $999,010 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $1,021,540)
(Cost $999,000)				999,000
TOTAL INVESTMENTS – 99.4%
(Cost $41,773,186)				51,225,566
CASH AND OTHER ASSETS LESS LIABILITIES – 0.6%				304,975
NET ASSETS – 100.0%		$		51,530,541

Royce International Micro-Cap Fund
Common Stocks – 95.1%
	SHARES		VALUE
AUSTRALIA – 4.1%
Austal	35,900	$	50,495
†Berkeley Energia 1	25,000		13,451
†Mantra Group	41,100		96,348
NetComm Wireless 1	23,300		30,802
Programmed Maintenance Services	36,400		52,177
Seeing Machines 1	445,200		22,469
†Tassal Group	12,600		36,897
Total (Cost $310,220)			302,639
BELGIUM – 0.7%
†Greenyard	2,300		54,483
Total (Cost $43,335)			54,483
BRAZIL – 2.2%
Minerva	24,900		92,523
T4F Entretenimento	35,400		65,716
Total (Cost $156,557)			158,239
CANADA – 8.2%
AGT Food and Ingredients	3,200		57,446
Altus Group	2,900		62,683
†Centric Health 1	119,200		66,182
Exco Technologies	10,300		84,827
†IBI Group 1	11,000		55,899
Magellan Aerospace	5,100		79,599
Sandstorm Gold 1	11,200		43,344
Solium Capital 1	8,600		65,057
Western Forest Products	49,300		88,959
Total (Cost $580,286)			603,996
CHINA – 1.2%
Xingda International Holdings	145,100		58,728
Xtep International Holdings	76,000		29,300
Total (Cost $91,831)			88,028
FRANCE – 2.0%
Bigben Interactive 1	4,600		50,753
HighCo	7,500		53,538
Manutan International	400		39,523
Total (Cost $90,002)			143,814
GERMANY – 3.0%
Amadeus Fire	300		26,349
CANCOM	1,000		60,797
HolidayCheck Group 1	8,600		30,145
mutares	1,800		27,919
†Surteco	1,400		37,945
VIB Vermoegen	1,600		37,791
Total (Cost $212,758)			220,946
GREECE – 0.3%
Aegean Marine Petroleum Network	3,200		18,720
Total (Cost $42,831)			18,720
HONG KONG – 4.9%
China Metal International Holdings	187,400		69,848
†CSI Properties	1,146,900		55,087
I.T	167,100		82,400
Oriental Watch Holdings	181,500		39,520
Pico Far East Holdings	102,200		42,804
Value Partners Group	29,700		27,047

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 47

Schedules of Investments

Royce International Micro-Cap Fund (continued)
	SHARES		VALUE
HONG KONG (continued)
†Wasion Group Holdings	100,400	$	46,294
Total (Cost $329,917)			363,000
INDIA – 3.1%
†Allcargo Logistics 1	18,000		47,689
eClerx Services	3,100		63,163
†Jagran Prakashan 1	17,700		50,167
†Multi Commodity Exchange of India	4,100		69,139
Total (Cost $236,487)			230,158
INDONESIA – 0.6%
Selamat Sempurna	462,600		41,826
Total (Cost $38,548)			41,826
IRELAND – 2.4%
Ardmore Shipping	5,200		42,380
Irish Continental Group	11,000		63,823
Irish Residential Properties REIT	47,057		73,095
Total (Cost $172,639)			179,298
ISRAEL – 0.8%
Nova Measuring Instruments 1	1,300		28,717
Sarine Technologies	29,100		32,551
Total (Cost $50,058)			61,268
ITALY – 0.7%
†Openjobmetis 1	4,300		51,666
Total (Cost $46,212)			51,666
JAPAN – 19.5%
†Asia Pile Holdings	6,600		44,010
†Ateam	2,600		68,886
C. Uyemura & Co.	1,000		51,389
†Digital Garage	2,700		50,627
†eGuarantee	3,400		79,835
GCA	5,100		45,434
G-Tekt	3,100		57,659
†IDOM	12,200		84,063
Inabata & Co.	4,400		58,249
†Information Services International-Dentsu	2,200		51,501
†Investors Cloud	1,400		68,211
Kenedix	6,700		31,572
Kenko Mayonnaise	2,400		69,135
Leopalace21	4,200		26,065
Mandom Corporation	500		27,073
Maruwa Unyu Kikan	1,500		55,946
Meitec Corporation	500		21,271
NS Solutions	1,500		35,608
Open House	1,100		33,839
Outsourcing	1,100		53,594
Pressance	4,200		55,340
Relia	4,800		52,150
Ryobi	15,200		61,760
SPARX Group	28,300		54,348
Sun Frontier Fudousan	6,200		62,179
Tokai Corporation	1,500		59,347
†Yumeshin Holdings	11,000		73,056
Total (Cost $1,315,919)			1,432,147
MALAYSIA – 1.4%
†AEON Credit Service	11,500		51,276
CB Industrial Product Holding	101,500		47,999
Total (Cost $90,568)			99,275
MEXICO – 0.9%
Rassini 1	13,900		68,547
Total (Cost $63,344)			68,547
NETHERLANDS – 1.2%
AMG Advanced Metallurgical Group	1,300		37,974
Constellium Cl. A 1	7,800		53,820
Total (Cost $77,844)			91,794
NEW ZEALAND – 0.2%
New Zealand Refining	8,900		15,913
Total (Cost $20,748)			15,913
NORWAY – 2.1%
Nordic Semiconductor 1	12,900		51,299
NRC Group	4,800		32,196
†Protector Forsikring	8,400		70,430
Total (Cost $158,545)			153,925
PHILIPPINES – 0.4%
Integrated Micro-Electronics	103,600		27,306
Total (Cost $12,633)			27,306
SINGAPORE – 1.3%
CSE Global	147,400		46,038
†Duty Free International	259,300		47,897
Total (Cost $104,657)			93,935
SOUTH AFRICA – 1.4%
†Adcock Ingram Holdings	9,800		44,271
Raubex Group	29,900		54,921
Total (Cost $86,326)			99,192
SOUTH KOREA – 6.3%
Eugene Technology	5,100		81,126
†Huchems Fine Chemical	4,000		93,519
Koh Young Technology	1,400		73,417
KT Skylife	5,600		80,024
Modetour Network	2,394		66,224
Samjin Pharmaceutical	2,400		69,222
Total (Cost $398,006)			463,532
SPAIN – 1.7%
Atento 1	8,400		93,660
Papeles y Cartones de Europa	3,800		32,551
Total (Cost $98,880)			126,211
SWEDEN – 3.1%
Byggmax Group	9,800		71,249
Dustin Group	6,500		54,008
Knowit	2,900		44,663
Proact IT Group	2,300		55,830
Total (Cost $173,086)			225,750
TAIWAN – 8.0%
Egis Technology 1	9,300		63,590
Flytech Technology	22,024		71,821
†Formosa Laboratories	21,800		62,562
Posiflex Technology	11,900		64,546
Sinmag Equipment	7,400		43,301

48 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce International Micro-Cap Fund (continued)
	SHARES		VALUE
TAIWAN (continued)
Sitronix Technology	26,000	$	80,171
Sporton International	14,383		72,813
Taiwan Paiho	18,800		70,763
TCI	8,900		56,612
Total (Cost $555,937)			586,179
THAILAND – 0.8%
†Krungthai Card	16,000		56,520
Total (Cost $60,475)			56,520
TURKEY – 0.9%
Tat Gida Sanayi	31,400		63,631
Total (Cost $62,353)			63,631
UNITED ARAB EMIRATES – 0.9%
Aramex	47,500		66,989
Total (Cost $23,304)			66,989
UNITED KINGDOM – 9.6%
Avon Rubber	3,800		50,483
Character Group	3,400		21,367
Connect Group	31,300		45,964
Consort Medical	3,500		47,637
Conviviality	13,300		53,353
dotdigital group	60,600		53,277
EMIS Group	4,800		57,610
Epwin Group	37,700		54,013
Finsbury Food Group	42,900		64,815
Hilton Food Group	6,000		57,672
Inspired Energy	156,600		35,694
Norcros	17,470		41,412
Pendragon	128,000		51,681
Rank Group	17,000		52,520
Real Estate Investors	27,700		21,827
Total (Cost $717,969)			709,325
UNITED STATES – 1.2%
Century Casinos 1	6,900		50,853
Currency Exchange International 1	2,000		40,561
Total (Cost $85,587)			91,414
TOTAL COMMON STOCKS
(Cost $6,507,862)			6,989,666
REPURCHASE AGREEMENT– 5.6%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $413,004 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $426,069)
(Cost $413,000)			413,000
TOTAL INVESTMENTS – 100.7%
(Cost $6,920,862)			7,402,666
LIABILITIES LESS CASH AND OTHER ASSETS – (0.7)%			(50,505	)
NET ASSETS – 100.0%		$	7,352,161

Royce International Premier Fund
Common Stocks – 95.4%
	SHARES		VALUE
AUSTRALIA – 9.0%
ALS	340,000	$	1,946,864
†Bravura Solutions 1	825,000		1,014,552
Cochlear	13,500		1,612,964
†Hansen Technologies	600,000		1,863,086
IPH	550,000		2,029,104
Total (Cost $7,252,125)			8,466,570
AUSTRIA – 3.0%
Mayr-Melnhof Karton	21,476		2,808,548
Total (Cost $2,560,020)			2,808,548
BRAZIL – 4.2%
OdontoPrev	577,500		2,030,811
TOTVS	206,000		1,875,384
Total (Cost $3,600,972)			3,906,195
CANADA – 3.7%
Morneau Shepell	110,000		1,767,736
Winpak	37,000		1,661,120
Total (Cost $2,900,794)			3,428,856
CHINA – 1.6%
TravelSky Technology	500,000		1,472,952
Total (Cost $804,192)			1,472,952
FRANCE – 5.5%
†Neurones	32,000		983,893
Thermador Groupe	20,000		2,128,967
Virbac 1	12,600		2,021,948
Total (Cost $5,283,500)			5,134,808
GERMANY – 6.8%
Carl Zeiss Meditec	37,000		1,920,273
Fielmann	17,900		1,380,820
KWS Saat	4,000		1,573,654
STRATEC Biomedical	22,000		1,442,307
Total (Cost $4,726,047)			6,317,054
HONG KONG – 1.3%
Value Partners Group	1,375,000		1,252,169
Total (Cost $1,380,516)			1,252,169
INDIA – 6.2%
Bajaj Finance	98,000		2,082,505
SH Kelkar & Company 1	390,000		1,587,151
†Vakrangee	320,000		2,129,043
Total (Cost $4,093,515)			5,798,699
ISRAEL – 1.1%
†Frutarom Industries	15,000		1,049,637
Total (Cost $1,022,533)			1,049,637
ITALY – 1.6%
DiaSorin	19,500		1,497,786
Total (Cost $876,927)			1,497,786
JAPAN – 18.7%
Ai Holdings	70,000		1,882,641
Horiba	20,500		1,244,854
Meitec Corporation	55,000		2,339,853
MISUMI Group	77,500		1,768,082
Nihon Kohden	82,500		1,902,690
Relo Group	110,000		2,138,875

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 49

Schedules of Investments

Royce International Premier Fund (continued)
	SHARES		VALUE
JAPAN (continued)
Santen Pharmaceutical	170,000	$	2,303,445
Sugi Holdings	30,000		1,605,690
USS	117,000		2,322,836
Total (Cost $14,005,224)			17,508,966
NEW ZEALAND – 2.0%
Fisher & Paykel Healthcare	220,000		1,845,923
Total (Cost $1,245,990)			1,845,923
NORWAY – 1.4%
TGS-NOPEC Geophysical	65,000		1,332,116
Total (Cost $1,321,253)			1,332,116
SINGAPORE – 1.1%
XP Power	33,000		1,044,005
Total (Cost $758,356)			1,044,005
SWEDEN – 3.3%
Addtech Cl. B	85,000		1,619,346
Bravida Holding	205,000		1,497,709
Total (Cost $2,550,958)			3,117,055
SWITZERLAND – 11.6%
Burckhardt Compression Holding	5,000		1,433,935
dormakaba Holding	2,200		1,911,148
LEM Holding	1,400		1,810,408
Partners Group Holding	4,300		2,665,919
VZ Holding	9,300		2,984,748
Total (Cost $7,806,378)			10,806,158
UNITED KINGDOM – 13.3%
Ashmore Group	220,000		1,012,056
AVEVA Group	45,000		1,137,039
Clarkson	30,000		986,996
Consort Medical	100,000		1,361,060
Elementis	250,000		957,626
Equiniti Group	400,000		1,301,147
ITE Group	750,000		1,504,329
Rotork	325,000		996,439
Spirax-Sarco Engineering	22,600		1,574,792
Victrex	65,000		1,588,207
Total (Cost $11,781,179)			12,419,691
TOTAL COMMON STOCKS
(Cost $73,970,479)			89,207,188
REPURCHASE AGREEMENT– 5.3%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $4,994,050 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $5,097,431)
(Cost $4,994,000)			4,994,000
TOTAL INVESTMENTS – 100.7%
(Cost $78,964,479)			94,201,188
LIABILITIES LESS CASH AND OTHER ASSETS – (0.7)%			(693,232	)
NET ASSETS – 100.0%		$	93,507,956

Royce Low-Priced Stock Fund
Common Stocks – 98.0%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 17.6%
AUTO COMPONENTS - 2.6%
Fox Factory Holding 1	56,900	$	2,025,640
†Modine Manufacturing 1	106,300		1,759,265
Stoneridge 1	121,400		1,870,774
Unique Fabricating	195,989		1,865,815
			7,521,494
AUTOMOBILES - 0.6%
Thor Industries	15,803		1,651,730
HOTELS, RESTAURANTS & LEISURE - 0.7%
Century Casinos 1	251,400		1,852,818
HOUSEHOLD DURABLES - 1.6%
AV Homes 1	135,800		2,722,790
TRI Pointe Group 1	143,700		1,895,403
			4,618,193
LEISURE PRODUCTS - 3.1%
Acushnet Holdings	86,000		1,706,240
American Outdoor Brands 1,4	120,300		2,665,848
MCBC Holdings 1	103,800		2,029,290
Nautilus 1	129,213		2,474,429
			8,875,807
MEDIA - 0.9%
Harte-Hanks 1	653,400		673,002
New Media Investment Group	140,300		1,891,244
			2,564,246
MULTILINE RETAIL - 0.4%
J.C. Penney Company 1,4	240,000		1,116,000
SPECIALTY RETAIL - 7.2%
American Eagle Outfitters	168,100		2,025,605
Buckle (The)	107,075		1,905,935
Build-A-Bear Workshop 1	174,100		1,819,345
Cato Corporation (The) Cl. A	76,150		1,339,478
Chico’s FAS	166,300		1,566,546
DSW Cl. A	50,000		885,000
Finish Line (The) Cl. A	102,500		1,452,425
Guess?	150,000		1,917,000
Kirkland’s 1	93,700		963,236
Shoe Carnival	92,700		1,935,576
Stein Mart	389,100		657,579
TravelCenters of America LLC 1	136,900		561,290
Urban Outfitters 1,4	85,000		1,575,900
West Marine	137,300		1,764,305
			20,369,220
TEXTILES, APPAREL & LUXURY GOODS - 0.5%
Vera Bradley 1	147,100		1,438,638
Total (Cost $49,304,406)			50,008,146
CONSUMER STAPLES – 1.2%
FOOD PRODUCTS - 1.2%
Inventure Foods 1,4	260,000		1,120,600
Landec Corporation 1	143,000		2,123,550
Total (Cost $3,442,029)			3,244,150
ENERGY – 7.1%
ENERGY EQUIPMENT & SERVICES - 4.9%
Gulf Island Fabrication	160,100		1,857,160
Newpark Resources 1	288,100		2,117,535
Pason Systems	128,150		1,911,182
Profire Energy 1	1,180,800		1,535,040
Tesco Corporation 1	323,416		1,439,201
TGS-NOPEC Geophysical	72,000		1,475,574

50 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Low-Priced Stock Fund (continued)
	SHARES		VALUE
ENERGY (continued)
ENERGY EQUIPMENT & SERVICES (continued)
Total Energy Services	203,100	$	2,082,997
Unit Corporation 1	78,800		1,475,924
			13,894,613
OIL, GAS & CONSUMABLE FUELS - 2.2%
Ardmore Shipping	312,000		2,542,800
Panhandle Oil and Gas Cl. A	82,000		1,894,200
SRC Energy 1	278,500		1,874,305
			6,311,305
Total (Cost $16,609,824)			20,205,918
FINANCIALS – 13.0%
BANKS - 2.8%
Blue Hills Bancorp	114,900		2,056,710
Boston Private Financial Holdings	100,500		1,542,675
Brookline Bancorp	122,400		1,787,040
HarborOne Bancorp 1	93,800		1,872,248
†Prime Meridian Holding Company 3	37,643		654,988
			7,913,661
CAPITAL MARKETS - 5.9%
Ares Management L.P.	95,000		1,710,000
Ashmore Group	475,363		2,186,790
Dundee Corporation Cl. A 1	492,800		1,083,035
Federated Investors Cl. B	71,900		2,031,175
Jupiter Fund Management	205,349		1,350,657
Newtek Business Services	85,800		1,397,682
Silvercrest Asset Management Group Cl. A	157,500		2,118,375
Sprott	1,254,400		2,205,453
Value Partners Group	2,270,100		2,067,309
ZAIS Group Holdings Cl. A 1,4	215,800		502,814
			16,653,290
DIVERSIFIED FINANCIAL SERVICES - 0.4%
GTY Technology Holdings 1	100,000		1,046,000
INSURANCE - 0.7%
MBIA 1	222,000		2,093,460
THRIFTS & MORTGAGE FINANCE - 3.2%
Beneficial Bancorp	108,000		1,620,000
Clifton Bancorp	119,000		1,967,070
Genworth MI Canada	72,500		1,994,756
Kearny Financial	135,800		2,016,630
Meridian Bancorp	96,100		1,624,090
			9,222,546
Total (Cost $33,587,928)			36,928,957
HEALTH CARE – 6.5%
BIOTECHNOLOGY - 2.0%
†Heron Therapeutics 1,4	57,500		796,375
Progenics Pharmaceuticals 1	224,274		1,522,820
Zealand Pharma 1,4	161,200		3,231,255
			5,550,450
HEALTH CARE EQUIPMENT & SUPPLIES - 1.9%
AtriCure 1	103,200		2,502,600
CryoLife 1	138,500		2,763,075
			5,265,675
HEALTH CARE TECHNOLOGY - 0.8%
Allscripts Healthcare Solutions 1	170,300		2,173,028
LIFE SCIENCES TOOLS & SERVICES - 0.5%
Harvard Bioscience 1	595,600		1,518,780
PHARMACEUTICALS - 1.3%
†Agile Therapeutics 1	368,900		1,383,375
Lipocine 1	334,500		1,344,690
Medicines Company (The) 1	27,432		1,042,691
			3,770,756
Total (Cost $13,471,222)			18,278,689
INDUSTRIALS – 19.7%
AEROSPACE & DEFENSE - 2.3%
CPI Aerostructures 1	268,866		2,527,340
Kratos Defense & Security Solutions 1	184,300		2,187,641
Wesco Aircraft Holdings 1	156,600		1,699,110
			6,414,091
COMMERCIAL SERVICES & SUPPLIES - 2.8%
Atento 1	180,600		2,013,690
Heritage-Crystal Clean 1	96,800		1,539,120
Hudson Technologies 1	271,813		2,296,820
Steelcase Cl. A	141,700		1,983,800
			7,833,430
CONSTRUCTION & ENGINEERING - 2.0%
Ameresco Cl. A 1	299,500		2,306,150
IES Holdings 1,4	79,800		1,448,370
KBR	135,800		2,066,876
			5,821,396
ELECTRICAL EQUIPMENT - 1.3%
LSI Industries	271,800		2,459,790
†Power Solutions International 1,3	141,000		1,177,350
			3,637,140
INDUSTRIAL CONGLOMERATES - 0.6%
Raven Industries	49,400		1,645,020
MACHINERY - 4.4%
FreightCar America	95,000		1,652,050
Harsco Corporation 1	121,300		1,952,930
Mueller Water Products Cl. A	172,500		2,014,800
Porvair	272,000		1,964,407
†Rexnord Corporation 1,4	63,500		1,476,375
Trinity Industries	53,200		1,491,196
Wabash National	94,000		2,066,120
			12,617,878
MARINE - 0.8%
Clarkson	70,531		2,320,461
PROFESSIONAL SERVICES - 4.8%
Acacia Research 1	204,405		838,061
Heidrick & Struggles International	90,140		1,960,545
Kforce	88,374		1,732,130
Korn/Ferry International	63,240		2,183,677
Navigant Consulting 1	86,023		1,699,815
Resources Connection	133,600		1,830,320
RPX Corporation 1	137,400		1,916,730
TrueBlue 1	57,472		1,523,008
			13,684,286
ROAD & RAIL - 0.7%
Werner Enterprises	68,000		1,995,800
Total (Cost $45,007,227)			55,969,502
INFORMATION TECHNOLOGY – 23.0%
COMMUNICATIONS EQUIPMENT - 3.1%
Finisar Corporation 1,4	57,500		1,493,850
Harmonic 1	275,000		1,443,750
Infinera Corporation 1,4	162,200		1,730,674
Oclaro 1	242,100		2,261,214

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 51

Schedules of Investments

Royce Low-Priced Stock Fund (continued)
		SHARES		VALUE
INFORMATION TECHNOLOGY (continued)
COMMUNICATIONS EQUIPMENT (continued)
Viavi Solutions 1,4		185,000	$	1,948,050
				8,877,538
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 6.2%
AVX Corporation		121,378		1,983,316
Electro Scientific Industries 1		185,000		1,524,400
LightPath Technologies Cl. A 1,4		675,000		1,822,500
Neonode 1		631,100		681,588
Novanta 1		55,500		1,998,000
Orbotech 1		58,900		1,921,318
PC Connection		69,100		1,869,846
TTM Technologies 1		118,958		2,065,111
Vishay Intertechnology		119,150		1,977,890
Vishay Precision Group 1		105,000		1,816,500
				17,660,469
INTERNET SOFTWARE & SERVICES - 2.4%
Amber Road 1		212,000		1,816,840
Carbonite 1		93,400		2,036,120
iPass 1		801,900		1,058,508
QuinStreet 1		460,942		1,922,128
				6,833,596
IT SERVICES - 0.7%
Convergys Corporation		85,000		2,021,300
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 8.7%
†Aehr Test Systems 1,4		285,000		1,068,750
Brooks Automation		63,482		1,376,925
Cirrus Logic 1		31,600		1,981,952
Cypress Semiconductor		103,000		1,405,950
FormFactor 1		156,500		1,940,600
Inphi Corporation 1		40,900		1,402,870
IXYS Corporation 1		123,500		2,031,575
Lam Research		13,300		1,881,019
MKS Instruments		25,927		1,744,887
Nanometrics 1		83,392		2,108,984
NeoPhotonics Corporation 1		189,600		1,463,712
PDF Solutions 1		76,800		1,263,360
Photronics 1		188,000		1,767,200
Rudolph Technologies 1		81,500		1,862,275
Teradyne		48,275		1,449,698
				24,749,757
SOFTWARE - 1.1%
Computer Modelling Group		210,900		1,655,585
SeaChange International 1		481,575		1,280,989
				2,936,574
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.8%
Super Micro Computer 1		92,100		2,270,265
Total (Cost $46,167,704)				65,349,499
MATERIALS – 4.6%
CHEMICALS - 1.5%
BioAmber 1,4		328,200		843,474
Trecora Resources 1		167,400		1,883,250
Victrex		60,000		1,466,037
				4,192,761
METALS & MINING - 3.1%
Alamos Gold Cl. A		192,800		1,367,798
Commercial Metals		77,900		1,513,597
Ferroglobe (Warranty Insurance Trust) 1,5		205,763		0
Kirkland Lake Gold		235,004		2,223,550
Orocobre 1		500,000		1,333,521
Pretium Resources 1		134,100		1,288,468
Schnitzer Steel Industries Cl. A		39,600		997,920
				8,724,854
Total (Cost $12,170,075)				12,917,615
REAL ESTATE – 0.5%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.5%
Kennedy-Wilson Holdings		75,460		1,437,513
Total (Cost $741,998)				1,437,513
TELECOMMUNICATION SERVICES – 0.8%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.8%
ORBCOMM 1		186,800		2,110,840
Total (Cost $1,173,979)				2,110,840
MISCELLANEOUS2 – 4.0%
Total (Cost $10,107,689)				11,452,298
TOTAL COMMON STOCKS
(Cost $231,784,081)				277,903,127
REPURCHASE AGREEMENT– 2.3%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $6,579,066 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $6,714,441)
(Cost $6,579,000)				6,579,000
		PRINCIPAL
		AMOUNT
COLLATERAL RECEIVED FOR SECURITIES LOANED – 6.3%
U.S. Treasury Bills
due 7/6/17-3/1/18	$	901,482		901,452
U.S. Treasury Bonds
2.25%-7.625%
due 2/15/25-2/15/47		1,100,280		1,114,492
U.S. Treasury Notes
0.625%-3.625%
due 8/31/17-2/15/27		7,058,540		7,089,940
U.S. Treasury Notes - Floating Rate
due 7/31/17-1/31/19		202,226		202,226
U.S. Treasury Strips - Interest
due 11/15/25-2/15/40		22,873		22,944
U.S. Treasury TIPS
0.125%-2.50%
due 4/15/18-2/15/46		1,324,840		1,326,890
Money Market Funds
Federated Government Obligations Fund (7 day yield-0.8114%)				7,311,563
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED
(Cost $17,969,507)				17,969,507
TOTAL INVESTMENTS – 106.6%
(Cost $256,332,588)				302,451,634
LIABILITIES LESS CASH AND OTHER ASSETS – (6.6)%				(18,820,768	)
NET ASSETS – 100.0%			$	283,630,866

52 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Micro-Cap Fund
Common Stocks – 96.6%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 15.2%
AUTO COMPONENTS - 2.8%
Fox Factory Holding 1,4	47,800	$	1,701,680
Standard Motor Products	29,500		1,540,490
Stoneridge 1	95,100		1,465,491
Unique Fabricating	151,900		1,446,088
			6,153,749
DIVERSIFIED CONSUMER SERVICES - 0.5%
Capella Education	14,051		1,202,766
HOTELS, RESTAURANTS & LEISURE - 1.1%
Del Taco Restaurants 1	98,800		1,358,500
Red Lion Hotels 1	150,100		1,103,235
			2,461,735
HOUSEHOLD DURABLES - 2.2%
AV Homes 1	109,050		2,186,453
Cavco Industries 1	10,210		1,323,727
ZAGG 1	146,800		1,269,820
			4,780,000
LEISURE PRODUCTS - 2.1%
American Outdoor Brands 1,4	51,165		1,133,816
MCBC Holdings 1	87,000		1,700,850
†Nautilus 1	94,400		1,807,760
			4,642,426
MEDIA - 0.6%
New Media Investment Group	106,500		1,435,620
SPECIALTY RETAIL - 4.5%
Buckle (The)	68,675		1,222,415
Build-A-Bear Workshop 1	137,600		1,437,920
Cato Corporation (The) Cl. A	58,250		1,024,618
Citi Trends	94,424		2,003,677
Haverty Furniture	64,100		1,608,910
Kirkland’s 1	73,240		752,907
Shoe Carnival	71,811		1,499,414
Stein Mart	295,934		500,128
			10,049,989
TEXTILES, APPAREL & LUXURY GOODS - 1.4%
Cherokee 1	130,600		907,670
Culp	34,174		1,110,655
Vera Bradley 1	111,800		1,093,404
			3,111,729
Total (Cost $28,445,465)			33,838,014
CONSUMER STAPLES – 1.2%
BEVERAGES - 0.6%
†Primo Water 1,4	96,400		1,224,280
FOOD PRODUCTS - 0.6%
John B. Sanfilippo & Son	22,000		1,388,420
Total (Cost $2,367,430)			2,612,700
ENERGY – 5.7%
ENERGY EQUIPMENT & SERVICES - 4.2%
Gulf Island Fabrication	102,718		1,191,529
Independence Contract Drilling 1	314,686		1,224,128
Natural Gas Services Group 1	61,687		1,532,922
Newpark Resources 1	225,600		1,658,160
Profire Energy 1	852,412		1,108,136
Tesco Corporation 1	254,000		1,130,300
Total Energy Services	155,400		1,593,785
			9,438,960
OIL, GAS & CONSUMABLE FUELS - 1.5%
Ardmore Shipping	239,375		1,950,906
Panhandle Oil and Gas Cl. A	58,300		1,346,730
			3,297,636
Total (Cost $12,138,399)			12,736,596
FINANCIALS – 12.7%
BANKS - 3.7%
Blue Hills Bancorp	85,600		1,532,240
Brookline Bancorp	73,900		1,078,940
Caribbean Investment Holdings 1	1,858,170		320,673
County Bancorp	50,900		1,221,600
†Franklin Financial Network1	31,700		1,307,625
HarborOne Bancorp 1	68,600		1,369,256
†Midway Investments 1,5	1,858,170		0
TriState Capital Holdings 1	53,157		1,339,556
			8,169,890
CAPITAL MARKETS - 4.0%
Canaccord Genuity Group	444,500		1,826,947
GAIN Capital Holdings	200,300		1,247,869
Gluskin Sheff + Associates	122,400		1,580,969
Newtek Business Services	65,449		1,066,164
Silvercrest Asset Management Group Cl. A	118,800		1,597,860
Westwood Holdings Group	27,572		1,563,057
			8,882,866
DIVERSIFIED FINANCIAL SERVICES - 0.4%
Waterloo Investment Holdings 1,5	2,760,860		828,258
INSURANCE - 1.2%
Atlas Financial Holdings 1	108,695		1,619,555
Blue Capital Reinsurance Holdings	60,000		1,098,000
			2,717,555
THRIFTS & MORTGAGE FINANCE - 3.4%
Beneficial Bancorp	66,900		1,003,500
Clifton Bancorp	101,200		1,672,836
Federal Agricultural Mortgage	20,000		1,294,000
Meridian Bancorp	73,600		1,243,840
†PCSB Financial 1,4	56,000		955,360
Western New England Bancorp	140,900		1,430,135
			7,599,671
Total (Cost $24,273,981)			28,198,240
HEALTH CARE – 8.0%
BIOTECHNOLOGY - 2.1%
BioSpecifics Technologies 1	21,000		1,039,710
Progenics Pharmaceuticals 1	174,600		1,185,534
Zealand Pharma 1,4	122,600		2,457,518
			4,682,762
HEALTH CARE EQUIPMENT & SUPPLIES - 3.1%
AtriCure 1	80,700		1,956,975
CryoLife 1	111,855		2,231,507
Surmodics 1	42,522		1,196,995
†Tactile Systems Technology1,4	53,500		1,529,030
			6,914,507
HEALTH CARE PROVIDERS & SERVICES - 0.5%
Landauer	21,200		1,108,760
LIFE SCIENCES TOOLS & SERVICES - 0.6%
Harvard Bioscience 1	505,079		1,287,951
PHARMACEUTICALS - 1.7%
Agile Therapeutics 1	283,982		1,064,933
Corium International 1,4	213,764		1,594,679
Lipocine 1	255,300		1,026,306

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 53

Schedules of Investments

Royce Micro-Cap Fund (continued)
	SHARES		VALUE
HEALTH CARE (continued)
PHARMACEUTICALS (continued)
Synergetics USA (Rights) 1,5	196,684	$	37,370
			3,723,288
Total (Cost $13,502,452)			17,717,268
INDUSTRIALS – 21.6%
AEROSPACE & DEFENSE - 1.5%
Astronics Corporation 1	42,100		1,282,787
Astronics Corporation Cl. B 1,3	5,640		170,610
CPI Aerostructures 1	208,318		1,958,189
			3,411,586
COMMERCIAL SERVICES & SUPPLIES - 2.6%
Acme United	41,100		1,175,460
Heritage-Crystal Clean 1	72,374		1,150,746
Hudson Technologies 1	215,604		1,821,854
Viad Corporation	32,800		1,549,800
			5,697,860
CONSTRUCTION & ENGINEERING - 0.7%
Northwest Pipe 1	103,200		1,678,032
ELECTRICAL EQUIPMENT - 2.4%
American Superconducter 1,4	188,600		871,332
Encore Wire	34,200		1,460,340
LSI Industries	192,936		1,746,071
Revolution Lighting Technologies 1,4	189,000		1,245,510
			5,323,253
INDUSTRIAL CONGLOMERATES - 0.6%
Raven Industries	37,600		1,252,080
MACHINERY - 8.6%
Alimak Group	103,400		1,718,281
CIRCOR International	26,759		1,588,949
FreightCar America	89,009		1,547,867
Global Brass and Copper Holdings	44,400		1,356,420
Graham Corporation	49,588		974,900
Greenbrier Companies (The)	24,800		1,147,000
Harsco Corporation 1	91,100		1,466,710
Kadant	21,776		1,637,555
Kornit Digital 1	81,100		1,569,285
Lindsay Corporation	19,500		1,740,375
Lydall 1	31,000		1,602,700
RBC Bearings 1	11,169		1,136,558
Sun Hydraulics	37,100		1,583,057
			19,069,657
MARINE - 0.8%
Clarkson	52,400		1,723,954
PROFESSIONAL SERVICES - 3.7%
CRA International	31,683		1,150,727
GP Strategies 1	57,618		1,521,115
Heidrick & Struggles International	72,200		1,570,350
Kforce	68,658		1,345,697
Navigant Consulting 1	58,400		1,153,984
Resources Connection	101,852		1,395,372
			8,137,245
ROAD & RAIL - 0.7%
Marten Transport	57,033		1,562,704
Total (Cost $33,768,708)			47,856,371
INFORMATION TECHNOLOGY – 19.5%
COMMUNICATIONS EQUIPMENT - 0.9%
EMCORE Corporation	122,400		1,303,560
Oclaro 1	66,400		620,176
			1,923,736
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 7.2%
Airgain 1,4	88,100		1,249,258
CUI Global 1	242,874		932,636
ePlus 1	21,634		1,603,079
Fabrinet 1	37,749		1,610,372
Mesa Laboratories	9,700		1,390,107
Neonode 1,4	775,396		837,428
Netlist 1,4	606,800		618,936
Novanta 1	39,942		1,437,912
Orbotech 1	45,300		1,477,686
PC Connection	67,700		1,831,962
Rogers Corporation 1	13,900		1,509,818
Vishay Precision Group 1	91,400		1,581,220
			16,080,414
INTERNET SOFTWARE & SERVICES - 0.7%
QuinStreet 1	375,004		1,563,767
IT SERVICES - 1.7%
Cass Information Systems	23,800		1,562,232
Computer Task Group 1	194,810		1,088,988
Unisys Corporation 1	82,500		1,056,000
			3,707,220
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.0%
Brooks Automation	48,500		1,051,965
†CyberOptics Corporation 1,4	14,800		305,620
†Everspin Technologies 1	72,400		1,446,552
Nanometrics 1	65,400		1,653,966
NeoPhotonics Corporation 1	179,400		1,384,968
PDF Solutions 1	59,000		970,550
Photronics 1	163,700		1,538,780
Rudolph Technologies 1	73,551		1,680,640
Silicon Motion Technology ADR	39,200		1,890,616
Ultra Clean Holdings 1	74,900		1,404,375
			13,328,032
SOFTWARE - 2.4%
Attunity 1	185,565		1,334,212
Computer Modelling Group	149,400		1,172,804
QAD Cl. A	62,200		1,993,510
SeaChange International 1	309,107		822,225
			5,322,751
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.6%
Super Micro Computer 1	51,246		1,263,214
Total (Cost $36,395,784)			43,189,134
MATERIALS – 5.5%
CHEMICALS - 2.0%
BioAmber 1,4	235,012		603,981
FutureFuel Corporation	81,000		1,222,290
Quaker Chemical	8,660		1,257,691
Trecora Resources 1	127,600		1,435,500
			4,519,462
CONSTRUCTION MATERIALS - 0.8%
U.S. Concrete 1	21,400		1,680,970
METALS & MINING - 2.7%
Haynes International	43,830		1,591,467
Kirkland Lake Gold	121,742		1,151,893
McEwen Mining	247,704		651,462
Pretium Resources 1	58,700		564,005

54 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Micro-Cap Fund (continued)
		SHARES		VALUE
MATERIALS (continued)
METALS & MINING (continued)
Richmont Mines 1		156,300	$	1,219,140
Schnitzer Steel Industries Cl. A		30,900		778,680
				5,956,647
Total (Cost $10,792,712)				12,157,079
REAL ESTATE – 1.8%
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.7%
Community Healthcare Trust		63,600		1,627,524
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.1%
FRP Holdings 1		20,575		949,536
Marcus & Millichap 1		57,300		1,510,428
				2,459,964
Total (Cost $3,048,574)				4,087,488
TELECOMMUNICATION SERVICES – 0.8%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.8%
ORBCOMM 1		156,200		1,765,060
Total (Cost $1,012,252)				1,765,060
MISCELLANEOUS2 – 4.6%
Total (Cost $9,696,441)				10,194,484
TOTAL COMMON STOCKS
(Cost $175,442,198)				214,352,434
REPURCHASE AGREEMENT– 3.6%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $7,888,079 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $8,049,116)
(Cost $7,888,000)				7,888,000
		PRINCIPAL
		AMOUNT
COLLATERAL RECEIVED FOR SECURITIES LOANED – 4.7%
U.S. Treasury Bills
due 7/20/17-3/1/18	$	223,414		223,406
U.S. Treasury Bonds
2.25%-5.50%
due 8/15/28-2/15/47		73,422		74,220
U.S. Treasury Notes
0.625%-3.625%
due 9/30/17-2/15/27		1,247,306		1,253,313
U.S. Treasury Notes - Floating Rate
due 7/31/17-1/31/19		30,103		30,103
U.S. Treasury TIPS
0.125%-2.50%
due 4/15/18-2/15/46		189,475		189,672
Money Market Funds
Federated Government Obligations Fund (7 day yield-0.8114%)				8,746,148
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED
(Cost $10,516,862)				10,516,862
TOTAL INVESTMENTS – 104.9%
(Cost $193,847,060)				232,757,296
LIABILITIES LESS CASH AND OTHER ASSETS – (4.9)%				(10,859,023	)
NET ASSETS – 100.0%			$	221,898,273

Royce Micro-Cap Opportunity Fund
Common Stocks – 96.2%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 7.3%
HOTELS, RESTAURANTS & LEISURE - 0.6%
Belmond Cl. A 1	23,500	$	312,550
HOUSEHOLD DURABLES - 6.1%
Beazer Homes USA 1	62,000		850,640
Ethan Allen Interiors	25,500		823,650
M.D.C. Holdings	15,050		531,716
New Home 1	70,663		810,505
			3,016,511
MEDIA - 0.1%
Harte-Hanks 1	40,072		41,274
SPECIALTY RETAIL - 0.5%
TravelCenters of America LLC 1	65,088		266,861
Total (Cost $3,446,348)			3,637,196
CONSUMER STAPLES – 2.6%
FOOD PRODUCTS - 2.6%
†Farmer Bros. 1	19,000		574,750
Landec Corporation 1	48,828		725,096
Total (Cost $1,207,915)			1,299,846
ENERGY – 3.1%
ENERGY EQUIPMENT & SERVICES - 2.5%
Aspen Aerogels 1	42,108		187,381
Basic Energy Services 1	14,500		361,050
Helix Energy Solutions Group 1	40,083		226,068
Newpark Resources 1	65,000		477,750
			1,252,249
OIL, GAS & CONSUMABLE FUELS - 0.6%
Pengrowth Energy 1	200,000		158,080
StealthGas 1	42,500		138,125
			296,205
Total (Cost $1,575,255)			1,548,454
FINANCIALS – 8.2%
BANKS - 3.6%
Old Line Bancshares	29,022		817,840
State Bank Financial	25,000		678,000
TriState Capital Holdings 1	12,041		303,433
			1,799,273
CAPITAL MARKETS - 1.4%
†Hamilton Lane Cl. A	30,028		660,316
INSURANCE - 0.7%
James River Group Holdings	9,106		361,781
THRIFTS & MORTGAGE FINANCE - 2.5%
BofI Holding 1	18,500		438,820
NMI Holdings Cl. A 1	69,150		791,768
			1,230,588
Total (Cost $2,862,161)			4,051,958
HEALTH CARE – 18.3%
BIOTECHNOLOGY - 0.5%
CareDx 1	207,431		230,248
HEALTH CARE EQUIPMENT & SUPPLIES - 4.5%
Accuray 1	125,000		593,750
Exactech 1	25,225		751,705
Invuity 1	98,939		717,308
Trinity Biotech ADR Cl. A 1	27,612		165,672
			2,228,435
HEALTH CARE PROVIDERS & SERVICES - 8.6%
Alliance HealthCare Services 1	26,974		358,754
Civitas Solutions 1	42,388		741,790

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 55

Schedules of Investments

Royce Micro-Cap Opportunity Fund (continued)
	SHARES		VALUE
HEALTH CARE (continued)
HEALTH CARE PROVIDERS & SERVICES (continued)
Community Health Systems 1	80,000	$	796,800
Cross Country Healthcare 1	56,000		722,960
Kindred Healthcare	67,500		786,375
Surgery Partners 1	38,200		869,050
			4,275,729
HEALTH CARE TECHNOLOGY - 1.6%
Castlight Health Cl. B 1	189,209		785,217
LIFE SCIENCES TOOLS & SERVICES - 1.6%
Albany Molecular Research 1	37,500		813,750
PHARMACEUTICALS - 1.5%
Sucampo Pharmaceuticals Cl. A 1	70,069		735,725
Total (Cost $8,437,658)			9,069,104
INDUSTRIALS – 24.2%
AEROSPACE & DEFENSE - 5.1%
Aerojet Rocketdyne Holdings 1	11,546		240,157
Ducommun 1	27,013		853,070
KEYW Holding Corporation 1	80,345		751,226
Kratos Defense & Security Solutions 1	60,011		712,331
			2,556,784
AIR FREIGHT & LOGISTICS - 1.3%
Atlas Air Worldwide Holdings 1	12,000		625,800
BUILDING PRODUCTS - 1.0%
Builders FirstSource 1	11,000		168,520
PGT Innovations 1	26,000		332,800
			501,320
CONSTRUCTION & ENGINEERING - 3.8%
Ameresco Cl. A 1	60,349		464,688
Great Lakes Dredge & Dock 1	91,674		394,198
Layne Christensen 1	57,500		505,425
Northwest Pipe 1	31,000		504,060
			1,868,371
ELECTRICAL EQUIPMENT - 3.2%
Encore Wire	11,500		491,050
General Cable	44,000		719,400
Power Solutions International 1,3	45,034		376,034
			1,586,484
MACHINERY - 7.1%
Commercial Vehicle Group 1	91,824		775,913
FreightCar America	53,000		921,670
Gencor Industries 1	56,031		907,702
Hyster-Yale Materials Handling Cl. A	3,800		266,950
Spartan Motors	72,331		640,129
			3,512,364
MARINE - 0.5%
Diana Shipping 1	57,500		233,450
PROFESSIONAL SERVICES - 1.6%
†GP Strategies 1	30,006		792,158
ROAD & RAIL - 0.6%
Celadon Group	100,000		315,000
Total (Cost $9,787,562)			11,991,731
INFORMATION TECHNOLOGY – 18.4%
COMMUNICATIONS EQUIPMENT - 3.0%
Aviat Networks 1	5,025		87,435
Comtech Telecommunications	39,015		740,114
EMCORE Corporation	52,000		553,800
Oclaro 1	12,000		112,080
			1,493,429
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 1.9%
KEMET Corporation 1	52,882		676,890
TTM Technologies 1	15,000		260,400
			937,290
INTERNET SOFTWARE & SERVICES - 2.1%
Amber Road 1	86,046		737,414
Limelight Networks 1	60,066		173,591
Tremor Video 1	52,035		129,567
			1,040,572
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 8.0%
Alpha & Omega Semiconductor 1	50,594		843,402
AXT 1	73,323		465,601
FormFactor 1	50,540		626,696
Ichor Holdings 1	36,575		737,352
Kopin Corporation 1	95,055		352,654
Nanometrics 1	15,038		380,311
Rubicon Technology 1	12,980		120,195
Rudolph Technologies 1	19,503		445,643
			3,971,854
SOFTWARE - 3.0%
A10 Networks 1	29,197		246,423
Bottomline Technologies 1	22,064		566,824
Datawatch Corporation 1	71,503		664,978
			1,478,225
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.4%
Intevac 1	17,520		194,472
Total (Cost $6,062,614)			9,115,842
MATERIALS – 9.2%
CHEMICALS - 4.5%
Calgon Carbon	33,000		498,300
Intrepid Potash 1	110,000		248,600
Kraton Corporation 1	20,000		688,800
Schulman (A.)	24,500		784,000
			2,219,700
CONSTRUCTION MATERIALS - 0.7%
U.S. Concrete 1	4,500		353,475
METALS & MINING - 2.9%
Haynes International	18,452		669,992
Universal Stainless & Alloy Products 1	39,780		775,710
			1,445,702
PAPER & FOREST PRODUCTS - 1.1%
Boise Cascade 1	18,000		547,200
Total (Cost $3,762,044)			4,566,077
REAL ESTATE – 0.5%
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.5%
RAIT Financial Trust	110,102		241,123
Total (Cost $349,963)			241,123
TELECOMMUNICATION SERVICES – 0.7%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.7%
†Ooma 1	43,200		345,600
Total (Cost $416,859)			345,600
MISCELLANEOUS2 – 3.7%
Total (Cost $1,877,662)			1,811,148
TOTAL COMMON STOCKS
(Cost $39,786,041)			47,678,079

56 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Micro-Cap Opportunity Fund (continued)
		VALUE
REPURCHASE AGREEMENT– 5.4%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $2,662,027 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $2,715,550)
(Cost $2,662,000)	$	2,662,000
TOTAL INVESTMENTS – 101.6%
(Cost $42,448,041)		50,340,079
LIABILITIES LESS CASH AND OTHER ASSETS – (1.6)%		(810,963	)
NET ASSETS – 100.0%	$	49,529,116

Royce Opportunity Fund
Common Stocks – 92.6%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 15.5%
AUTO COMPONENTS - 4.3%
American Axle & Manufacturing Holdings 1,4	511,345	$	7,976,982
Cooper Tire & Rubber	199,400		7,198,340
Dana	728,336		16,263,743
†Modine Manufacturing 1	538,700		8,915,485
Tower International	657,161		14,753,264
VOXX International Cl. A 1,6	1,227,178		10,062,860
			65,170,674
AUTOMOBILES - 0.6%
Winnebago Industries	251,022		8,785,770
DIVERSIFIED CONSUMER SERVICES - 0.9%
Houghton Mifflin Harcourt 1,4	736,600		9,060,180
K12 1	229,100		4,105,472
			13,165,652
HOTELS, RESTAURANTS & LEISURE - 1.1%
Belmond Cl. A 1	624,419		8,304,773
Carrols Restaurant Group 1	269,105		3,296,536
Jamba 1,4	357,125		2,782,004
Ruby Tuesday 1	791,492		1,590,899
			15,974,212
HOUSEHOLD DURABLES - 2.8%
Beazer Homes USA 1	751,879		10,315,780
Dixie Group 1,6	847,735		3,814,807
Ethan Allen Interiors	140,892		4,550,812
M.D.C. Holdings	137,132		4,844,873
M/I Homes 1	296,100		8,453,655
TRI Pointe Group 1	238,572		3,146,765
William Lyon Homes Cl. A 1	281,341		6,791,572
ZAGG 1	84,354		729,662
			42,647,926
INTERNET & DIRECT MARKETING RETAIL - 0.0%
EVINE Live 1	547,143		547,143
LEISURE PRODUCTS - 0.2%
Black Diamond 1	480,582		3,195,870
MEDIA - 0.6%
Ballantyne Strong 1	144,720		969,624
Entravision Communications Cl. A	202,200		1,334,520
McClatchy Company (The) Cl. A 1,4	326,205		3,046,755
New York Times Cl. A	221,599		3,922,302
			9,273,201
MULTILINE RETAIL - 0.3%
J.C. Penney Company 1,4	934,741		4,346,546
SPECIALTY RETAIL - 3.5%
American Eagle Outfitters	376,400		4,535,620
Ascena Retail Group 1	503,018		1,081,489
Barnes & Noble	630,624		4,792,742
bebe stores 1,4	158,905		943,896
Caleres	79,700		2,214,066
Chico’s FAS	164,300		1,547,706
Conn’s 1,4	217,936		4,162,578
DSW Cl. A	340,200		6,021,540
Guess?	346,000		4,421,880
Lumber Liquidators Holdings 1,4	261,264		6,547,276
New York & Company 1	202,917		280,025
Rent-A-Center	308,618		3,617,003
†Sally Beauty Holdings 1,4	262,700		5,319,675
Sears Hometown and Outlet Stores 1,4	19,897		53,722
Stage Stores	720,646		1,498,944
TravelCenters of America LLC 1	478,514		1,961,907

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 57

Schedules of Investments

Royce Opportunity Fund (continued)
	SHARES		VALUE
CONSUMER DISCRETIONARY (continued)
SPECIALTY RETAIL (continued)
West Marine	294,217	$	3,780,688
			52,780,757
TEXTILES, APPAREL & LUXURY GOODS - 1.2%
Skechers U.S.A. Cl. A 1,4	331,564		9,781,138
Unifi 1	236,467		7,283,183
Vince Holding 1	524,797		247,022
			17,311,343
Total (Cost $221,131,387)			233,199,094
CONSUMER STAPLES – 1.7%
FOOD & STAPLES RETAILING - 0.7%
Natural Grocers by Vitamin Cottage 1	574,894		4,754,374
SUPERVALU 1	833,100		2,740,899
United Natural Foods 1,4	101,600		3,728,720
			11,223,993
FOOD PRODUCTS - 1.0%
Inventure Foods 1,4	500,451		2,156,944
Landec Corporation 1	503,583		7,478,207
SunOpta 1	466,490		4,758,198
			14,393,349
Total (Cost $26,607,058)			25,617,342
ENERGY – 4.0%
ENERGY EQUIPMENT & SERVICES - 2.2%
Aspen Aerogels 1	316,891		1,410,165
Basic Energy Services 1,4	295,710		7,363,179
Independence Contract Drilling 1,4	690,200		2,684,878
Matrix Service 1	565,704		5,289,332
Newpark Resources 1	1,233,531		9,066,453
Patterson-UTI Energy	227,200		4,587,168
Willbros Group 1	1,028,909		2,541,405
			32,942,580
OIL, GAS & CONSUMABLE FUELS - 1.8%
Ardmore Shipping	415,700		3,387,955
Bill Barrett 1,4	493,200		1,514,124
Dorian LPG 1,4	497,297		4,067,890
Gener8 Maritime 1,4	513,300		2,920,677
Matador Resources 1	211,700		4,524,029
Pengrowth Energy 1	1,906,900		1,507,214
Scorpio Tankers	782,726		3,107,422
StealthGas 1	1,003,621		3,261,768
Stone Energy 1	133,000		2,444,540
			26,735,619
Total (Cost $87,001,425)			59,678,199
FINANCIALS – 5.6%
BANKS - 2.4%
Boston Private Financial Holdings	404,446		6,208,246
CenterState Banks	207,641		5,161,955
Guaranty Bancorp	175,760		4,780,672
Southern National Bancorp of Virginia	167,115		2,941,224
State Bank Financial	400,059		10,849,600
Umpqua Holdings	310,000		5,691,600
			35,633,297
CONSUMER FINANCE - 0.7%
Enova International 1	703,695		10,449,871
INSURANCE - 1.2%
Ambac Financial Group 1	50,446		875,238
Aspen Insurance Holdings	83,900		4,182,415
Heritage Insurance Holdings	338,700		4,409,874
MBIA 1	956,476		9,019,569
			18,487,096
INVESTMENT COMPANIES - 0.1%
BlackRock Resources & Commodities Strategy
Trust	262,600		2,103,426
THRIFTS & MORTGAGE FINANCE - 1.2%
BofI Holding 1,4	112,300		2,663,756
MGIC Investment 1	332,585		3,724,952
PHH Corporation 1,4	290,400		3,998,808
Radian Group	183,400		2,998,590
Walker & Dunlop 1	92,137		4,499,049
			17,885,155
Total (Cost $59,037,839)			84,558,845
HEALTH CARE – 5.6%
HEALTH CARE EQUIPMENT & SUPPLIES - 2.0%
Accuray 1	651,300		3,093,675
Analogic Corporation	108,138		7,856,226
AngioDynamics 1	490,041		7,943,564
Invacare Corporation	713,307		9,415,652
RTI Surgical 1	386,455		2,260,762
			30,569,879
HEALTH CARE PROVIDERS & SERVICES - 2.3%
Brookdale Senior Living 1	518,460		7,626,547
Community Health Systems 1	674,300		6,716,028
Cross Country Healthcare 1,4	264,261		3,411,610
Kindred Healthcare 4	449,050		5,231,432
PharMerica Corporation 1	212,700		5,583,375
†Surgery Partners 1,4	76,399		1,738,077
Tivity Health 1	90,234		3,595,825
			33,902,894
HEALTH CARE TECHNOLOGY - 0.8%
Allscripts Healthcare Solutions 1	886,936		11,317,303
LIFE SCIENCES TOOLS & SERVICES - 0.2%
Albany Molecular Research 1,4	124,244		2,696,095
PHARMACEUTICALS - 0.3%
Sucampo Pharmaceuticals Cl. A 1,4	464,397		4,876,169
Total (Cost $71,966,178)			83,362,340
INDUSTRIALS – 24.7%
AEROSPACE & DEFENSE - 3.6%
Aerojet Rocketdyne Holdings 1,4	433,140		9,009,312
Engility Holdings 1	173,347		4,923,055
KEYW Holding Corporation 1	546,235		5,107,297
Kratos Defense & Security Solutions 1	1,486,524		17,645,040
Mercury Systems 1	177,895		7,487,600
Wesco Aircraft Holdings 1	923,929		10,024,630
			54,196,934
AIR FREIGHT & LOGISTICS - 0.6%
Atlas Air Worldwide Holdings 1,4	180,000		9,387,000
BUILDING PRODUCTS - 3.6%
Builders FirstSource 1,4	306,794		4,700,084
Griffon Corporation	351,800		7,722,010
Insteel Industries	199,568		6,579,757
NCI Building Systems 1	774,200		12,929,140
PGT Innovations 1	674,783		8,637,223
Ply Gem Holdings 1	208,792		3,747,816

58 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Opportunity Fund (continued)
	SHARES		VALUE
INDUSTRIALS (continued)
BUILDING PRODUCTS (continued)
Quanex Building Products	421,686	$	8,918,659
			53,234,689
COMMERCIAL SERVICES & SUPPLIES - 2.7%
ABM Industries	90,000		3,736,800
Herman Miller	279,479		8,496,162
Interface	642,564		12,626,383
Kimball International Cl. B	102,150		1,704,883
Steelcase Cl. A	397,942		5,571,188
Team 1	328,216		7,696,665
			39,832,081
CONSTRUCTION & ENGINEERING - 1.9%
Aegion Corporation 1	461,736		10,102,784
Great Lakes Dredge & Dock 1,4	476,400		2,048,520
Layne Christensen 1	981,712		8,629,248
Northwest Pipe 1,6	489,326		7,956,441
			28,736,993
ELECTRICAL EQUIPMENT - 1.9%
Encore Wire	228,806		9,770,016
General Cable	879,574		14,381,035
Power Solutions International 1,3	203,905		1,702,607
Revolution Lighting Technologies 1,4	489,323		3,224,638
			29,078,296
MACHINERY - 7.8%
Astec Industries	118,461		6,575,770
Commercial Vehicle Group 1	907,168		7,665,570
DMC Global	337,662		4,423,372
Federal Signal	372,832		6,472,364
FreightCar America	464,220		8,072,786
Hardinge	600,997		7,464,383
Hurco Companies	202,073		7,022,037
Hyster-Yale Materials Handling Cl. A	150,174		10,549,723
Meritor 1	683,232		11,348,484
Mueller Industries	378,321		11,519,874
Mueller Water Products Cl. A	955,276		11,157,624
NN	362,107		9,939,837
Spartan Motors	680,105		6,018,929
Westport Fuel Systems 1	3,395,490		7,979,401
			116,210,154
MARINE - 0.4%
Diana Shipping 1	531,380		2,157,403
Navios Maritime Holdings 1	1,052,049		1,441,307
Scorpio Bulkers 1	375,990		2,669,529
			6,268,239
PROFESSIONAL SERVICES - 0.3%
Korn/Ferry International	136,100		4,699,533
ROAD & RAIL - 0.4%
Hertz Global Holdings 1,4	532,000		6,118,000
TRADING COMPANIES & DISTRIBUTORS - 1.5%
Herc Holdings 1,4	201,566		7,925,575
†Textainer Group Holdings 1,4	446,200		6,469,900
Univar 1	269,139		7,858,859
			22,254,334
Total (Cost $289,694,807)			370,016,253
INFORMATION TECHNOLOGY – 23.0%
COMMUNICATIONS EQUIPMENT - 3.6%
ARRIS International 1	309,960		8,685,079
Aviat Networks 1	254,029		4,420,105
Ciena Corporation 1	424,817		10,628,921
Comtech Telecommunications	806,752		15,304,085
EMCORE Corporation	459,468		4,893,334
Extreme Networks 1	456,056		4,204,836
Harmonic 1	517,319		2,715,925
Oclaro 1	210,675		1,967,705
Westell Technologies Cl. A 1	177,698		556,195
			53,376,185
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 6.7%
Benchmark Electronics 1	161,500		5,216,450
Daktronics	289,225		2,785,237
Echelon Corporation 1,6	230,152		1,203,695
Electro Scientific Industries 1	254,438		2,096,569
Frequency Electronics 1	226,979		2,165,380
Identiv 1	619,897		3,254,459
II-VI 1	256,678		8,804,055
KEMET Corporation 1	956,434		12,242,355
Knowles Corporation 1	441,877		7,476,559
Maxwell Technologies 1	855,142		5,122,301
Novanta 1	127,434		4,587,624
Park Electrochemical	203,034		3,739,886
PCM 1	164,033		3,075,619
Perceptron 1	413,026		3,006,829
RadiSys Corporation 1	488,978		1,838,557
Sanmina Corporation 1	254,123		9,682,086
SigmaTron International 1,6	337,947		2,223,691
Systemax	55,000		1,034,000
TTM Technologies 1	396,725		6,887,146
Vishay Intertechnology	685,923		11,386,322
Vishay Precision Group 1	190,342		3,292,917
			101,121,737
INTERNET SOFTWARE & SERVICES - 1.6%
Amber Road 1	216,771		1,857,728
†Bazaarvoice 1	239,300		1,184,535
Blucora 1	304,240		6,449,888
Care.com 1	64,057		967,261
Leaf Group 1	496,757		3,874,705
Limelight Networks 1	657,669		1,900,663
Marin Software 1	841,343		1,093,746
QuinStreet 1	798,831		3,331,125
Tremor Video 1	954,282		2,376,162
YuMe	165,980		780,106
			23,815,919
IT SERVICES - 1.2%
Computer Task Group 1	703,363		3,931,799
Perficient 1	117,100		2,182,744
Unisys Corporation 1	749,424		9,592,627
Virtusa Corporation 1,4	97,300		2,860,620
			18,567,790
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 9.0%
Advanced Energy Industries 1	30,271		1,958,231
Alpha & Omega Semiconductor 1	408,184		6,804,427
Amtech Systems 1	608,540		5,136,078
AXT 1	448,892		2,850,464
Brooks Automation	337,955		7,330,244
Cohu	315,806		4,970,786
Cree 1,4	426,414		10,511,105
Cypress Semiconductor	692,700		9,455,355
FormFactor 1	432,638		5,364,711
IXYS Corporation 1	856,615		14,091,317

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 59

Schedules of Investments

Royce Opportunity Fund (continued)
		SHARES		VALUE
INFORMATION TECHNOLOGY (continued)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (continued)
Kopin Corporation 1		1,055,122	$	3,914,503
Kulicke & Soffa Industries 1		611,388		11,628,600
MaxLinear Cl. A 1		266,222		7,424,931
Microsemi Corporation 1		265,754		12,437,287
Nanometrics 1		166,602		4,213,365
NeoPhotonics Corporation 1		646,296		4,989,405
Rubicon Technology 1,4		56,945		527,311
Rudolph Technologies 1		192,699		4,403,172
Sigma Designs 1		367,707		2,151,086
Ultra Clean Holdings 1		339,338		6,362,587
Veeco Instruments 1		146,100		4,068,885
Xcerra Corporation 1		419,554		4,099,043
				134,692,893
SOFTWARE - 0.1%
A10 Networks 1		260,699		2,200,300
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.8%
Avid Technology 1		275,098		1,447,016
Cray 1,4		264,392		4,864,813
Intevac 1		481,123		5,340,465
				11,652,294
Total (Cost $263,940,164)				345,427,118
MATERIALS – 9.0%
CHEMICALS - 3.1%
Calgon Carbon		506,360		7,646,036
Ferro Corporation 1		748,611		13,692,095
Huntsman Corporation		299,660		7,743,215
Kraton Corporation 1		140,418		4,835,996
Olin Corporation		124,800		3,778,944
Schulman (A.)		279,219		8,935,008
				46,631,294
METALS & MINING - 5.5%
AK Steel Holding Corporation 1,4		927,700		6,094,989
Allegheny Technologies 1,4		698,722		11,885,261
Carpenter Technology		301,241		11,275,451
Century Aluminum 1		675,503		10,524,337
Commercial Metals		725,561		14,097,650
Constellium Cl. A 1		316,400		2,183,160
Haynes International		276,250		10,030,637
Noranda Aluminum Holding Corporation 1,3,6		593,726		13,062
Synalloy Corporation 1		379,552		4,307,915
TimkenSteel Corporation 1,4		582,813		8,957,836
Universal Stainless & Alloy Products 1		125,402		2,445,339
				81,815,637
PAPER & FOREST PRODUCTS - 0.4%
Louisiana-Pacific Corporation 1		273,300		6,589,263
Total (Cost $98,243,539)				135,036,194
REAL ESTATE – 0.4%
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.1%
BRT Apartments 1		144,787		1,138,026
RAIT Financial Trust		163,766		358,647
				1,496,673
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.3%
Tejon Ranch 1		208,610		4,305,711
Total (Cost $6,552,479)				5,802,384
TELECOMMUNICATION SERVICES – 0.4%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.4%
Iridium Communications 1,4		591,213		6,532,903
Total (Cost $3,907,687)				6,532,903
UTILITIES – 0.2%
WATER UTILITIES - 0.2%
Pure Cycle 1		418,790		3,245,622
Total (Cost $1,750,542)				3,245,622
MISCELLANEOUS 2 – 2.5%
Total (Cost $36,690,947)				37,094,550
TOTAL COMMON STOCKS
(Cost $1,166,524,052)				1,389,570,844
REPURCHASE AGREEMENT– 7.3%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $109,896,099 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $112,097,292)
(Cost $109,895,000)				109,895,000
		PRINCIPAL
		AMOUNT
COLLATERAL RECEIVED FOR SECURITIES LOANED – 6.2%
U.S. Treasury Bills
due 7/6/17-3/1/18	$	4,900,525		4,900,353
U.S. Treasury Bonds
2.25%-7.625%
due 2/15/25-2/15/47		4,509,937		4,562,767
U.S. Treasury Notes
0.625%-3.625%
due 8/31/17-2/15/27		34,837,587		35,006,244
U.S. Treasury Notes - Floating Rate
due 7/31/17-1/31/19		947,374		947,366
U.S. Treasury Strips - Interest
due 11/15/25-2/15/40		82,160		82,417
U.S. Treasury TIPS
0.125%-2.50%
due 4/15/18-2/15/46		8,284,650		8,297,623
Money Market Funds
Federated Government Obligations Fund (7 day yield-0.8114%)				39,196,090
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED
(Cost $92,992,860)				92,992,860
TOTAL INVESTMENTS – 106.1%
(Cost $1,369,411,912)				1,592,458,704
LIABILITIES LESS CASH AND OTHER ASSETS – (6.1)%				(91,955,394	)
NET ASSETS – 100.0%			$	1,500,503,310

60 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Pennsylvania Mutual Fund
Common Stocks – 99.4%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 11.3%
AUTO COMPONENTS - 3.2%
Cooper Tire & Rubber	152,400	$	5,501,640
Dorman Products 1	219,000		18,126,630
Gentex Corporation	594,334		11,274,516
LCI Industries	167,065		17,107,456
Motorcar Parts of America 1,4	75,000		2,118,000
Standard Motor Products	88,651		4,629,355
STRATTEC SECURITY 6	242,747		8,593,244
Superior Industries International	422,900		8,690,595
			76,041,436
AUTOMOBILES - 1.1%
Thor Industries	67,981		7,105,374
Winnebago Industries	525,162		18,380,670
			25,486,044
DISTRIBUTORS - 1.1%
Core-Mark Holding Company	330,660		10,931,620
Weyco Group	504,800		14,073,824
			25,005,444
HOTELS, RESTAURANTS & LEISURE - 0.2%
Lindblad Expeditions Holdings 1	370,700		3,892,350
HOUSEHOLD DURABLES - 1.7%
AV Homes 1	80,800		1,620,040
Bassett Furniture Industries	23,400		888,030
Ethan Allen Interiors	682,169		22,034,059
Flexsteel Industries	91,500		4,951,065
PICO Holdings 1	605,341		10,593,467
			40,086,661
INTERNET & DIRECT MARKETING RETAIL - 0.1%
Etsy 1	225,500		3,382,500
LEISURE PRODUCTS - 0.4%
American Outdoor Brands 1,4	58,500		1,296,360
MCBC Holdings 1	140,500		2,746,775
Nautilus 1	276,700		5,298,805
			9,341,940
MEDIA - 0.5%
E.W. Scripps Company Cl. A 1	128,267		2,284,435
†Liberty Global LiLAC Group Cl. C 1,4	119,600		2,560,636
Saga Communications Cl. A	137,734		6,301,331
			11,146,402
MULTILINE RETAIL - 0.0%
Dillard’s Cl. A	14,448		833,505
SPECIALTY RETAIL - 2.5%
American Eagle Outfitters	537,391		6,475,562
America’s Car-Mart 1	375,100		14,591,390
AutoCanada	150,000		2,206,971
Barnes & Noble	86,000		653,600
Buckle (The)	97,713		1,739,291
Caleres	229,613		6,378,649
Cato Corporation (The) Cl. A	35,276		620,505
DSW Cl. A	265,529		4,699,863
Hibbett Sports 1	84,700		1,757,525
Kirkland’s 1	190,403		1,957,343
Monro Muffler Brake	182,600		7,623,550
Murphy USA 1,4	30,000		2,223,300
Shoe Carnival	313,840		6,552,979
			57,480,528
TEXTILES, APPAREL & LUXURY GOODS - 0.5%
Deckers Outdoor 1	68,730		4,691,510
Movado Group	112,126		2,831,181
Steven Madden 1	113,344		4,528,093
			12,050,784
Total (Cost $167,576,723)			264,747,594
CONSUMER STAPLES – 2.0%
FOOD & STAPLES RETAILING - 0.3%
Village Super Market Cl. A	250,711		6,498,429
FOOD PRODUCTS - 1.0%
Cal-Maine Foods 1,4	165,146		6,539,782
Farmer Bros. 1,4	47,777		1,445,254
Industrias Bachoco ADR	62,760		3,638,825
John B. Sanfilippo & Son	19,300		1,218,023
Lancaster Colony	15,200		1,863,824
Sanderson Farms	25,900		2,995,335
Seneca Foods Cl. A 1	85,369		2,650,707
Seneca Foods Cl. B 1	7,197		259,092
Tootsie Roll Industries	76,774		2,675,574
			23,286,416
PERSONAL PRODUCTS - 0.7%
Inter Parfums	302,600		11,090,290
Nutraceutical International	118,700		4,943,855
			16,034,145
Total (Cost $30,753,989)			45,818,990
ENERGY – 3.9%
ENERGY EQUIPMENT & SERVICES - 3.4%
Era Group 1	389,840		3,687,886
Forum Energy Technologies 1,4	90,665		1,414,374
Frank’s International	231,800		1,921,622
Helmerich & Payne	77,246		4,197,548
†Mammoth Energy Services 1,4	46,000		855,600
Newpark Resources 1	99,000		727,650
Oil States International 1,4	92,173		2,502,497
Pason Systems	1,199,920		17,895,167
RPC	337,775		6,826,433
SEACOR Holdings 1	271,509		9,312,759
†SEACOR Marine Holdings 1,4	394,978		8,041,752
TGS-NOPEC Geophysical	800,585		16,407,258
Unit Corporation 1	286,984		5,375,210
			79,165,756
OIL, GAS & CONSUMABLE FUELS - 0.5%
Centennial Resource Development Cl. A 1	12,545		198,462
San Juan Basin Royalty Trust	207,033		1,409,895
World Fuel Services	277,000		10,650,650
			12,259,007
Total (Cost $73,843,641)			91,424,763
FINANCIALS – 13.4%
BANKS - 3.4%
Ames National	25,433		778,250
Blue Hills Bancorp	96,590		1,728,961
BOK Financial	96,100		8,084,893
Camden National	117,982		5,062,608
City Holding Company	52,170		3,436,438
CNB Financial	152,105		3,645,957
Codorus Valley Bancorp	27,079		769,044
†FCB Financial Holdings 1,4	23,900		1,141,225
First Citizens BancShares Cl. A	78,876		29,397,085
Landmark Bancorp	7,950		244,860

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 61

Schedules of Investments

Royce Pennsylvania Mutual Fund (continued)
	SHARES		VALUE
FINANCIALS (continued)
BANKS (continued)
MidWestOne Financial Group	128,535	$	4,356,051
National Bankshares	85,600		3,492,480
Northrim BanCorp	99,206		3,015,862
Popular	181,300		7,562,023
Unity Bancorp	42,822		736,538
Webster Financial	111,800		5,838,196
			79,290,471
CAPITAL MARKETS - 6.3%
Ares Management L.P.	340,756		6,133,608
Artisan Partners Asset Management Cl. A	254,170		7,803,019
Bolsa Mexicana de Valores	3,780,000		6,639,928
Cohen & Steers	48,000		1,945,920
Diamond Hill Investment Group	71,200		14,197,280
Federated Investors Cl. B	413,472		11,680,584
Greenhill & Co.	200,000		4,020,000
Houlihan Lokey Cl. A	270,286		9,432,981
Lazard Cl. A	153,457		7,109,663
Moelis & Company Cl. A	136,290		5,294,866
Morningstar	117,304		9,189,595
Oaktree Capital Group LLC Cl. A	27,500		1,281,500
Reinet Investments	238,550		5,855,161
Reinet Investments DR	1,300,000		2,929,410
Rothschild & Co	328,346		11,985,648
SEI Investments	332,650		17,889,917
Sprott	2,788,700		4,903,020
Virtu Financial Cl. A	297,000		5,242,050
Virtus Investment Partners	8,270		917,557
Westwood Holdings Group	232,700		13,191,763
			147,643,470
INSURANCE - 2.0%
Alleghany Corporation 1	1,190		707,812
E-L Financial	41,100		26,780,922
MBIA 1	721,577		6,804,471
ProAssurance Corporation	30,000		1,824,000
Reinsurance Group of America	41,628		5,344,619
RLI Corp.	84,400		4,609,928
			46,071,752
INVESTMENT COMPANIES - 0.3%
RIT Capital Partners	275,300		6,816,309
THRIFTS & MORTGAGE FINANCE - 1.4%
BofI Holding 1,4	201,300		4,774,836
Genworth MI Canada	710,057		19,536,423
Southern Missouri Bancorp	11,100		358,086
Timberland Bancorp	41,900		1,058,813
TrustCo Bank Corp. NY	840,194		6,511,504
			32,239,662
Total (Cost $225,515,724)			312,061,664
HEALTH CARE – 10.2%
BIOTECHNOLOGY - 0.3%
†Flexion Therapeutics 1	50,000		1,011,000
Progenics Pharmaceuticals 1	304,800		2,069,592
Zealand Pharma 1	166,250		3,332,482
			6,413,074
HEALTH CARE EQUIPMENT & SUPPLIES - 3.0%
Analogic Corporation	155,400		11,289,810
Atrion Corporation	9,500		6,111,350
CryoLife 1	77,900		1,554,105
Hill-Rom Holdings	52,400		4,171,564
ICU Medical 1,4	47,400		8,176,500
Masimo Corporation 1	67,600		6,163,768
Merit Medical Systems 1	627,786		23,950,036
Neogen Corporation 1,4	134,500		9,295,295
			70,712,428
HEALTH CARE PROVIDERS & SERVICES - 3.0%
†AAC Holdings 1,4	100,000		693,000
AMN Healthcare Services 1,4	311,800		12,175,790
Ensign Group (The)	77,000		1,676,290
†HealthEquity 1	77,200		3,846,876
HealthSouth Corporation	183,713		8,891,709
Landauer	399,400		20,888,620
LHC Group 1	15,000		1,018,350
†Tivity Health 1,4	90,200		3,594,470
U.S. Physical Therapy	290,500		17,546,200
			70,331,305
HEALTH CARE TECHNOLOGY - 1.6%
†athenahealth 1	125,900		17,695,245
Medidata Solutions 1,4	235,665		18,429,003
			36,124,248
LIFE SCIENCES TOOLS & SERVICES - 2.3%
Bio-Rad Laboratories Cl. A 1	57,222		12,949,911
Bio-Techne	226,840		26,653,700
ICON 1,4	143,700		14,052,423
			53,656,034
Total (Cost $156,307,198)			237,237,089
INDUSTRIALS – 27.1%
AEROSPACE & DEFENSE - 1.9%
HEICO Corporation	315,518		22,666,813
HEICO Corporation Cl. A	137,575		8,536,529
Teledyne Technologies 1	70,100		8,948,265
Wesco Aircraft Holdings 1	504,473		5,473,532
			45,625,139
AIR FREIGHT & LOGISTICS - 1.1%
Forward Air	352,800		18,797,184
Hub Group Cl. A 1	165,500		6,346,925
			25,144,109
AIRLINES - 0.3%
Spirit Airlines 1	149,469		7,720,074
BUILDING PRODUCTS - 1.2%
American Woodmark 1	74,718		7,139,305
Apogee Enterprises	160,100		9,100,084
Gibraltar Industries 1	257,420		9,177,023
Insteel Industries	98,759		3,256,084
			28,672,496
COMMERCIAL SERVICES & SUPPLIES - 2.9%
Copart 1,4	531,700		16,902,743
Healthcare Services Group	235,900		11,047,197
Heritage-Crystal Clean 1	242,158		3,850,312
Herman Miller	137,900		4,192,160
HNI Corporation	97,400		3,883,338
Kimball International Cl. B	288,614		4,816,968
Mobile Mini	207,000		6,178,950
Steelcase Cl. A	385,470		5,396,580
Team 1	286,082		6,708,623
UniFirst Corporation	24,468		3,442,647
Viad Corporation	12,700		600,075
			67,019,593

62 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Pennsylvania Mutual Fund (continued)
	SHARES		VALUE
INDUSTRIALS (continued)
CONSTRUCTION & ENGINEERING - 1.9%
Comfort Systems USA	162,500	$	6,028,750
Jacobs Engineering Group	54,000		2,937,060
KBR	575,100		8,753,022
Valmont Industries	176,375		26,385,700
			44,104,532
ELECTRICAL EQUIPMENT - 0.9%
Encore Wire	181,218		7,738,008
Preformed Line Products 6	290,278		13,474,705
			21,212,713
INDUSTRIAL CONGLOMERATES - 1.1%
Raven Industries	777,945		25,905,569
MACHINERY - 10.1%
Alamo Group	18,262		1,658,372
CIRCOR International	417,879		24,813,655
Colfax Corporation 1	74,543		2,934,758
Federal Signal	96,624		1,677,393
Flowserve Corporation	28,800		1,337,184
Franklin Electric	325,748		13,485,967
Graco	137,549		15,031,355
Graham Corporation	25,000		491,500
Greenbrier Companies (The)	85,400		3,949,750
John Bean Technologies	239,783		23,498,734
Kadant	92,100		6,925,920
Lincoln Electric Holdings	167,619		15,436,034
Lindsay Corporation	121,500		10,843,875
Lydall 1	95,493		4,936,988
Miller Industries	270,732		6,727,690
Mueller Water Products Cl. A	62,500		730,000
Nordson Corporation	121,300		14,716,116
Proto Labs 1,4	15,000		1,008,750
RBC Bearings 1	116,806		11,886,179
Sun Hydraulics	688,787		29,390,541
Tennant Company	454,900		33,571,620
Wabash National	372,849		8,195,221
Westinghouse Air Brake Technologies	16,157		1,478,365
			234,725,967
MARINE - 0.8%
Clarkson	277,700		9,136,296
Diana Shipping 1	201,900		819,714
Kirby Corporation 1	121,100		8,095,535
			18,051,545
PROFESSIONAL SERVICES - 2.2%
Exponent	196,178		11,437,177
GP Strategies 1	44,900		1,185,360
Heidrick & Struggles International	232,352		5,053,656
ICF International 1	8,770		413,067
Korn/Ferry International	158,822		5,484,124
ManpowerGroup	130,305		14,548,553
Robert Half International	184,562		8,846,057
TrueBlue 1	158,249		4,193,599
			51,161,593
ROAD & RAIL - 1.8%
Landstar System	301,360		25,796,416
Marten Transport	38,600		1,057,640
Old Dominion Freight Line	12,290		1,170,500
Saia 1	63,777		3,271,760
Universal Logistics Holdings	586,484		8,797,260
Werner Enterprises	31,000		909,850
			41,003,426
TRADING COMPANIES & DISTRIBUTORS - 0.9%
Air Lease Cl. A	48,840		1,824,662
Applied Industrial Technologies	208,100		12,288,305
MSC Industrial Direct Cl. A	9,950		855,302
Richelieu Hardware	292,800		6,784,886
			21,753,155
Total (Cost $330,714,821)			632,099,911
INFORMATION TECHNOLOGY – 18.1%
COMMUNICATIONS EQUIPMENT - 0.5%
ADTRAN	79,700		1,645,805
Digi International 1	354,544		3,598,621
NETGEAR 1,4	83,900		3,616,090
NetScout Systems 1,4	58,600		2,015,840
TESSCO Technologies	123,189		1,638,414
			12,514,770
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 9.5%
Badger Meter	455,028		18,132,866
Benchmark Electronics 1	147,944		4,778,591
Celestica 1,4	732,295		9,944,566
Cognex Corporation	195,485		16,596,677
Coherent 1	89,800		20,204,102
Dolby Laboratories Cl. A	167,976		8,224,105
ePlus 1	8,000		592,800
Fabrinet 1	305,200		13,019,832
FARO Technologies 1	378,793		14,318,375
FLIR Systems	739,900		25,644,934
HollySys Automation Technologies	85,700		1,423,477
Insight Enterprises 1	148,400		5,934,516
IPG Photonics 1	125,600		18,224,560
†LightPath Technologies CI. A 1,4	307,600		830,520
Mesa Laboratories	24,630		3,529,725
Methode Electronics	135,860		5,597,432
MTS Systems	68,774		3,562,493
National Instruments	480,990		19,345,418
Orbotech 1	203,400		6,634,908
PC Connection	366,465		9,916,543
Plexus Corporation 1	138,102		7,260,022
Richardson Electronics	157,551		940,580
Vishay Intertechnology	399,089		6,624,877
			221,281,919
INTERNET SOFTWARE & SERVICES - 0.8%
†Benefitfocus 1,4	50,000		1,817,500
†Cars.com 1,4	20,000		532,600
comScore 1,3,4	275,709		7,223,576
j2 Global	50,750		4,318,317
Stamps.com 1	10,200		1,579,725
†WebMD Health 1	31,800		1,865,070
			17,336,788
IT SERVICES - 0.3%
Convergys Corporation	136,339		3,242,141
Genpact	42,000		1,168,860
NCI Cl. A 1	119,216		2,515,458
			6,926,459
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 3.7%
Advanced Energy Industries 1	296,514		19,181,491
Brooks Automation	164,200		3,561,498
Cabot Microelectronics	148,330		10,951,204
Cirrus Logic 1,4	133,688		8,384,911
Diodes 1	315,300		7,576,659

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 63

Schedules of Investments

Royce Pennsylvania Mutual Fund (continued)
		SHARES		VALUE
INFORMATION TECHNOLOGY (continued)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (continued)
FormFactor 1		55,200	$	684,480
IXYS Corporation 1		284,900		4,686,605
Kulicke & Soffa Industries 1		65,400		1,243,908
†M/A-COM Technology Solutions Holdings 1,4		34,500		1,924,065
MKS Instruments		215,135		14,478,586
Nanometrics 1		154,581		3,909,353
PDF Solutions 1,4		55,000		904,750
Photronics 1		149,560		1,405,864
Rudolph Technologies 1		98,800		2,257,580
Silicon Motion Technology ADR		82,100		3,959,683
Xperi		46,330		1,380,634
				86,491,271
SOFTWARE - 2.5%
ACI Worldwide 1		622,383		13,922,708
Blackbaud		123,643		10,602,387
Computer Modelling Group		700,200		5,496,635
Fair Isaac		87,300		12,170,493
†Guidewire Software 1,4		24,000		1,649,040
Manhattan Associates 1,4		15,000		720,900
Monotype Imaging Holdings		556,000		10,174,800
PTC 1		45,700		2,518,984
				57,255,947
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.8%
Cray 1		35,650		655,960
Diebold Nixdorf		470,132		13,163,696
Stratasys 1		67,500		1,573,425
Super Micro Computer 1,4		158,966		3,918,512
				19,311,593
Total (Cost $237,088,520)				421,118,747
MATERIALS – 8.6%
CHEMICALS - 3.7%
Balchem Corporation		258,200		20,064,722
FutureFuel Corporation		686,556		10,360,130
†Ingevity Corporation 1,4		20,000		1,148,000
Innospec		112,578		7,379,488
Minerals Technologies		141,702		10,372,586
†Platform Specialty Products 1		96,000		1,217,280
Quaker Chemical		230,940		33,539,416
Umicore		47,000		3,269,175
				87,350,797
CONTAINERS & PACKAGING - 0.8%
AptarGroup		204,000		17,719,440
METALS & MINING - 3.1%
Compass Minerals International		123,326		8,053,188
Franco-Nevada Corporation		271,000		19,555,360
Haynes International		23,493		853,031
Hecla Mining		173,300		883,830
Major Drilling Group International 1		1,546,250		10,123,121
Pretium Resources 1		102,600		985,808
Reliance Steel & Aluminum		210,714		15,342,086
Schnitzer Steel Industries Cl. A		58,200		1,466,640
Worthington Industries		276,733		13,897,531
				71,160,595
PAPER & FOREST PRODUCTS - 1.0%
Stella-Jones		695,400		23,734,118
Total (Cost $100,774,514)				199,964,950
REAL ESTATE – 2.4%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 2.4%
FirstService Corporation		52,800		3,378,144
FRP Holdings 1		444,276		20,503,338
Marcus & Millichap 1		576,135		15,186,919
St. Joe Company (The) 1,4		105,000		1,968,750
Tejon Ranch 1		689,385		14,228,906
Total (Cost $47,869,403)				55,266,057
TELECOMMUNICATION SERVICES – 0.2%
WIRELESS TELECOMMUNICATION SERVICES - 0.2%
Telephone and Data Systems		162,000		4,495,500
Total (Cost $4,308,624)				4,495,500
UTILITIES – 0.1%
GAS UTILITIES - 0.1%
Star Gas Partners L.P.		218,445		2,367,944
Total (Cost $2,209,201)				2,367,944
MISCELLANEOUS 2 – 2.1%
Total (Cost $46,725,261)				48,310,871
TOTAL COMMON STOCKS
(Cost $1,423,687,619)				2,314,914,080
REPURCHASE AGREEMENT– 1.3%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $29,850,299 (collateralized by obligations of various U.S. Government Agencies, 0.25% due 1/15/25, valued at $30,449,104)
(Cost $29,850,000)				29,850,000
		PRINCIPAL
		AMOUNT
COLLATERAL RECEIVED FOR SECURITIES LOANED – 3.8%
U.S. Treasury Bills
due 7/6/17-3/1/18	$	6,110,579		6,110,362
U.S. Treasury Bonds
2.25%-7.625%
due 2/15/25-2/15/47		2,815,027		2,846,607
U.S. Treasury Notes
0.625%-3.625%
due 8/31/17-2/15/27		60,872,715		61,125,316
U.S. Treasury Notes - Floating Rate
due 7/31/17-1/31/19		861,354		861,334
U.S. Treasury Strips - Interest
due 11/15/25-2/15/40		12,964		13,005
U.S. Treasury TIPS
0.125%-2.50%
due 4/15/18-2/15/46		6,219,875		6,227,552
Money Market Funds
Federated Government Obligations Fund (7 day yield-0.8114%)				12,317,236
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED
(Cost $89,501,412)				89,501,412
TOTAL INVESTMENTS – 104.5%
(Cost $1,543,039,031)				2,434,265,492
LIABILITIES LESS CASH AND OTHER ASSETS – (4.5)%				(105,178,899	)
NET ASSETS – 100.0%			$	2,329,086,593

64 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Premier Fund
Common Stocks – 92.2%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 9.3%
AUTO COMPONENTS - 2.3%
Dorman Products 1	636,300	$	52,666,551
AUTOMOBILES - 1.5%
Thor Industries	326,900		34,167,588
DISTRIBUTORS - 1.7%
Core-Mark Holding Company	127,962		4,230,424
Pool Corporation	281,900		33,142,983
			37,373,407
DIVERSIFIED CONSUMER SERVICES - 0.7%
Sotheby’s 1	287,000		15,403,290
SPECIALTY RETAIL - 0.6%
Camping World Holdings Cl. A	469,883		14,495,890
TEXTILES, APPAREL & LUXURY GOODS - 2.5%
Columbia Sportswear	531,072		30,834,040
Wolverine World Wide	954,464		26,734,537
			57,568,577
Total (Cost $88,396,316)			211,675,303
CONSUMER STAPLES – 2.2%
FOOD PRODUCTS - 2.2%
Cal-Maine Foods 1,4	345,100		13,665,960
Sanderson Farms	308,042		35,625,057
Total (Cost $17,137,163)			49,291,017
ENERGY – 3.3%
ENERGY EQUIPMENT & SERVICES - 3.3%
Pason Systems	2,573,600		38,381,727
SEACOR Holdings 1	571,002		19,585,369
†SEACOR Marine Holdings 1	853,984		17,387,114
Total (Cost $73,043,637)			75,354,210
FINANCIALS – 12.1%
CAPITAL MARKETS - 8.1%
Ares Management L.P.	2,463,476		44,342,568
Ashmore Group	10,815,000		49,751,727
Federated Investors Cl. B	733,400		20,718,550
Lazard Cl. A	575,800		26,676,814
Morningstar	404,000		31,649,360
TMX Group	217,700		11,845,244
			184,984,263
INSURANCE - 2.6%
Alleghany Corporation 1	98,260		58,445,048
THRIFTS & MORTGAGE FINANCE - 1.4%
Genworth MI Canada	1,164,500		32,039,914
Total (Cost $179,105,059)			275,469,225
HEALTH CARE – 4.0%
HEALTH CARE EQUIPMENT & SUPPLIES - 2.3%
IDEXX Laboratories 1	316,300		51,057,146
LIFE SCIENCES TOOLS & SERVICES - 1.7%
Bio-Techne	336,800		39,574,000
Total (Cost $33,861,889)			90,631,146
INDUSTRIALS – 33.2%
AIR FREIGHT & LOGISTICS - 1.8%
Forward Air	791,828		42,188,596
BUILDING PRODUCTS - 1.3%
Simpson Manufacturing	680,833		29,759,210
COMMERCIAL SERVICES & SUPPLIES - 4.6%
Copart 1,4	2,355,600		74,884,524
Ritchie Bros. Auctioneers	1,029,100		29,576,334
			104,460,858
CONSTRUCTION & ENGINEERING - 3.2%
EMCOR Group	220,800		14,435,904
Valmont Industries	399,700		59,795,120
			74,231,024
MACHINERY - 12.4%
CIRCOR International	711,832		42,268,584
Lincoln Electric Holdings	900,300		82,908,627
Lindsay Corporation	492,675		43,971,244
RBC Bearings 1	170,900		17,390,784
Sun Hydraulics	763,827		32,592,498
Woodward	941,101		63,599,605
			282,731,342
MARINE - 3.7%
Clarkson	675,000		22,207,418
Kirby Corporation 1	933,400		62,397,790
			84,605,208
ROAD & RAIL - 2.8%
Landstar System	739,300		63,284,080
TRADING COMPANIES & DISTRIBUTORS - 3.4%
Air Lease Cl. A	1,198,260		44,766,994
MSC Industrial Direct Cl. A	381,400		32,785,144
			77,552,138
Total (Cost $353,156,299)			758,812,456
INFORMATION TECHNOLOGY – 19.6%
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 9.8%
Anixter International 1	335,383		26,226,950
Cognex Corporation	961,100		81,597,390
IPG Photonics 1	303,100		43,979,810
National Instruments	1,801,944		72,474,188
			224,278,338
IT SERVICES - 3.5%
Gartner 1	258,000		31,865,580
Jack Henry & Associates	453,700		47,125,819
			78,991,399
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 4.2%
Cabot Microelectronics	382,774		28,260,205
MKS Instruments	1,000,900		67,360,570
			95,620,775
SOFTWARE - 2.1%
Fair Isaac	349,600		48,737,736
Total (Cost $128,952,351)			447,628,248
MATERIALS – 7.0%
CHEMICALS - 3.7%
Minerals Technologies	554,900		40,618,680
Westlake Chemical	655,800		43,420,518
			84,039,198
METALS & MINING - 1.9%
Reliance Steel & Aluminum	597,700		43,518,537
PAPER & FOREST PRODUCTS - 1.4%
Stella-Jones	932,012		31,809,725
Total (Cost $76,407,488)			159,367,460

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 65

Schedules of Investments

Royce Premier Fund (continued)
		SHARES		VALUE
REAL ESTATE – 0.9%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.9%
Jones Lang LaSalle		167,600	$	20,950,000
Total (Cost $4,731,391)				20,950,000
MISCELLANEOUS 2 – 0.6%
Total (Cost $14,988,276)				14,490,000
TOTAL COMMON STOCKS
(Cost $969,779,869)				2,103,669,065
REPURCHASE AGREEMENT– 7.3%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $167,267,673 (collateralized by obligations of various U.S. Government Agencies, 2.25% due 11/15/24, valued at $170,616,278)
(Cost $167,266,000)				167,266,000
		PRINCIPAL
		AMOUNT
COLLATERAL RECEIVED FOR SECURITIES LOANED – 0.6%
U.S. Treasury Bills
due 7/20/17-3/1/18	$	436,743		436,727
U.S. Treasury Bonds
2.50%-4.25%
due 8/15/40-2/15/46		111,279		112,443
U.S. Treasury Notes
0.75%-3.50%
due 10/31/17-2/15/27		2,383,058		2,394,504
U.S. Treasury Notes - Floating Rate
due 7/31/17-1/31/19		59,523		59,521
U.S. Treasury TIPS
0.125%-1.875%
due 4/15/18-2/15/46		338,665		338,975
Money Market Funds
Federated Government Obligations Fund (7 day yield-0.8114%)				10,332,000
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED
(Cost $13,674,170)				13,674,170
TOTAL INVESTMENTS – 100.1%
(Cost $1,150,720,039)				2,284,609,235
LIABILITIES LESS CASH AND OTHER ASSETS – (0.1)%				(2,547,929	)
NET ASSETS – 100.0%			$	2,282,061,306

Royce Small-Cap Leaders Fund
Common Stocks – 93.5%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 14.4%
AUTO COMPONENTS - 5.7%
Cooper Tire & Rubber	51,200	$	1,848,320
Gentex Corporation	95,734		1,816,074
LCI Industries	14,132		1,447,117
			5,111,511
AUTOMOBILES - 0.2%
Thor Industries	2,005		209,563
HOUSEHOLD DURABLES - 0.7%
PICO Holdings 1	39,000		682,500
LEISURE PRODUCTS - 2.4%
MCBC Holdings 1	50,600		989,230
†Nautilus 1	60,500		1,158,575
			2,147,805
MEDIA - 0.8%
E.W. Scripps Company Cl. A 1	39,490		703,317
SPECIALTY RETAIL - 2.8%
Buckle (The)	21,700		386,260
Caleres	77,600		2,155,728
			2,541,988
TEXTILES, APPAREL & LUXURY GOODS - 1.8%
Deckers Outdoor 1	8,720		595,227
Movado Group	41,000		1,035,250
			1,630,477
Total (Cost $10,691,974)			13,027,161
CONSUMER STAPLES – 7.5%
FOOD PRODUCTS - 6.0%
Cal-Maine Foods 1	49,658		1,966,457
Industrias Bachoco ADR	24,690		1,431,526
Sanderson Farms	8,690		1,004,998
Tootsie Roll Industries	28,869		1,006,085
			5,409,066
PERSONAL PRODUCTS - 1.5%
Inter Parfums	38,270		1,402,596
Total (Cost $5,423,995)			6,811,662
ENERGY – 5.2%
ENERGY EQUIPMENT & SERVICES - 5.2%
Oil States International 1,4	32,640		886,176
Pason Systems	136,340		2,033,325
TGS-NOPEC Geophysical	88,750		1,818,850
Total (Cost $3,721,794)			4,738,351
FINANCIALS – 14.8%
CAPITAL MARKETS - 10.2%
Artisan Partners Asset Management Cl. A	81,920		2,514,944
Federated Investors Cl. B	65,260		1,843,595
Houlihan Lokey Cl. A	54,200		1,891,580
Lazard Cl. A	50,270		2,329,009
Virtus Investment Partners	2,200		244,090
Westwood Holdings Group	6,000		340,140
			9,163,358
INSURANCE - 1.7%
†RLI Corp.	27,800		1,518,436
THRIFTS & MORTGAGE FINANCE - 2.9%
Genworth MI Canada	96,260		2,648,486
Total (Cost $10,488,838)			13,330,280

66 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Small-Cap Leaders Fund (continued)
		SHARES		VALUE
HEALTH CARE – 5.9%
BIOTECHNOLOGY - 0.9%
Zealand Pharma 1,4		40,340	$	808,615
HEALTH CARE PROVIDERS & SERVICES - 1.9%
AMN Healthcare Services 1		43,500		1,698,675
LIFE SCIENCES TOOLS & SERVICES - 3.1%
Bio-Rad Laboratories Cl. A 1		4,125		933,529
Bio-Techne		16,144		1,896,920
				2,830,449
Total (Cost $3,952,025)				5,337,739
INDUSTRIALS – 23.3%
BUILDING PRODUCTS - 3.7%
American Woodmark 1		10,000		955,500
Apogee Enterprises		28,100		1,597,204
Insteel Industries		24,900		820,953
				3,373,657
COMMERCIAL SERVICES & SUPPLIES - 3.2%
Steelcase Cl. A		127,120		1,779,680
UniFirst Corporation		8,100		1,139,670
				2,919,350
CONSTRUCTION & ENGINEERING - 2.8%
Comfort Systems USA		27,700		1,027,670
Valmont Industries		9,895		1,480,292
				2,507,962
MACHINERY - 9.8%
CIRCOR International		31,070		1,844,936
Greenbrier Companies (The)		28,200		1,304,250
John Bean Technologies		2,109		206,682
Kadant		12,160		914,432
Lydall 1		33,960		1,755,732
RBC Bearings 1		8,480		862,925
†Supreme Industries Cl. A		85,900		1,413,055
Westinghouse Air Brake Technologies		5,588		511,302
				8,813,314
PROFESSIONAL SERVICES - 1.3%
ICF International 1		3,743		176,295
Robert Half International		13,003		623,234
TrueBlue 1		15,200		402,800
				1,202,329
ROAD & RAIL - 2.2%
Landstar System		15,420		1,319,952
Saia 1		12,220		626,886
				1,946,838
TRADING COMPANIES & DISTRIBUTORS - 0.3%
MSC Industrial Direct Cl. A		3,177		273,095
Total (Cost $15,875,255)				21,036,545
INFORMATION TECHNOLOGY – 13.6%
COMMUNICATIONS EQUIPMENT - 0.7%
NetScout Systems 1		19,000		653,600
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 5.5%
†Celestica 1		102,500		1,391,950
Cognex Corporation		1,540		130,746
Fabrinet 1		35,500		1,514,430
FARO Technologies 1		12,760		482,328
Methode Electronics		17,850		735,420
Orbotech 1		20,590		671,646
				4,926,520
INTERNET SOFTWARE & SERVICES - 1.7%
j2 Global		18,524		1,576,207
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.7%
Cabot Microelectronics		8,636		637,596
MKS Instruments		13,145		884,658
Nanometrics 1		38,648		977,408
Rudolph Technologies 1		35,500		811,175
†Silicon Motion Technology ADR		27,200		1,311,856
Xperi		17,330		516,434
				5,139,127
Total (Cost $9,032,486)				12,295,454
MATERIALS – 4.6%
CHEMICALS - 3.1%
Minerals Technologies		37,556		2,749,099
METALS & MINING - 0.6%
Compass Minerals International		8,300		541,990
PAPER & FOREST PRODUCTS - 0.9%
†Stella-Jones		24,700		843,015
Total (Cost $3,449,677)				4,134,104
REAL ESTATE – 3.0%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.0%
Marcus & Millichap 1		104,210		2,746,976
Total (Cost $2,331,048)				2,746,976
MISCELLANEOUS 2– 1.2%
Total (Cost $989,793)				1,059,787
TOTAL COMMON STOCKS
(Cost $65,956,885)				84,518,059
REPURCHASE AGREEMENT– 6.5%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $5,869,059 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $5,990,637)
(Cost $5,869,000)				5,869,000
		PRINCIPAL
		AMOUNT
COLLATERAL RECEIVED FOR SECURITIES LOANED – 1.1%
U.S. Treasury Bills
due 7/20/17-3/1/18	$	61,590		61,587
U.S. Treasury Bonds
2.50%-4.25%
due 8/15/40-2/15/46		15,693		15,857
U.S. Treasury Notes
0.75%-3.50%
due 10/31/17-2/15/27		336,060		337,674
U.S. Treasury Notes - Floating Rate
due 7/31/17-1/31/19		8,394		8,394
U.S. Treasury TIPS
0.125%-1.875%
due 4/15/18-2/15/46		47,759		47,802
Money Market Funds
Federated Government Obligations Fund (7 day yield-0.8114%)				520,552
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED
(Cost $991,866)				991,866

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 67

Schedules of Investments

Royce Small-Cap Leaders Fund (continued)
		VALUE
TOTAL INVESTMENTS – 101.1%
(Cost $72,817,751)	$	91,378,925
LIABILITIES LESS CASH AND OTHER ASSETS – (1.1)%		(1,032,545	)
NET ASSETS – 100.0%	$	90,346,380

Royce Small-Cap Value Fund
Common Stocks – 89.2%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 14.8%
AUTO COMPONENTS - 3.1%
Gentex Corporation	384,556	$	7,295,027
†Stoneridge 1	251,500		3,875,615
			11,170,642
AUTOMOBILES - 0.1%
Thor Industries	3,900		407,628
HOUSEHOLD DURABLES - 1.4%
Flexsteel Industries	94,400		5,107,984
MEDIA - 1.6%
Saga Communications Cl. A	129,077		5,905,273
SPECIALTY RETAIL - 6.3%
American Eagle Outfitters	544,188		6,557,466
Buckle (The)	38,751		689,768
Cato Corporation (The) Cl. A	34,590		608,438
DSW Cl. A	289,102		5,117,105
Hibbett Sports 1	87,000		1,805,250
Kirkland’s 1	205,830		2,115,932
Shoe Carnival	295,141		6,162,544
			23,056,503
TEXTILES, APPAREL & LUXURY GOODS - 2.3%
Deckers Outdoor 1	51,385		3,507,540
Steven Madden 1	123,895		4,949,605
			8,457,145
Total (Cost $54,431,991)			54,105,175
CONSUMER STAPLES – 2.0%
FOOD & STAPLES RETAILING - 2.0%
Village Super Market Cl. A	279,903		7,255,086
Total (Cost $8,268,750)			7,255,086
ENERGY – 2.4%
ENERGY EQUIPMENT & SERVICES - 2.4%
Helmerich & Payne	74,499		4,048,275
Unit Corporation 1	261,178		4,891,864
Total (Cost $8,926,611)			8,940,139
FINANCIALS – 21.9%
BANKS - 9.3%
Ames National	115,348		3,529,649
Camden National	126,304		5,419,705
City Holding Company	56,740		3,737,464
CNB Financial	127,860		3,064,804
Codorus Valley Bancorp	32,904		934,474
Landmark Bancorp	11,600		357,280
MidWestOne Financial Group	142,560		4,831,358
National Bankshares	142,193		5,801,474
Northrim BanCorp	171,543		5,214,907
Unity Bancorp	63,110		1,085,492
			33,976,607
CAPITAL MARKETS - 6.3%
Federated Investors Cl. B	265,949		7,513,059
Greenhill & Co.	236,700		4,757,670
Houlihan Lokey Cl. A	152,396		5,318,620
Moelis & Company Cl. A	140,750		5,468,138
			23,057,487
INSURANCE - 1.5%
Reinsurance Group of America	40,735		5,229,967
THRIFTS & MORTGAGE FINANCE - 4.8%
Genworth MI Canada	308,200		8,479,778
Southern Missouri Bancorp	24,985		806,016

68 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Small-Cap Value Fund (continued)
		SHARES		VALUE
FINANCIALS (continued)
THRIFTS & MORTGAGE FINANCE (continued)
Timberland Bancorp		50,500	$	1,276,135
TrustCo Bank Corp. NY		912,064		7,068,496
				17,630,425
Total (Cost $61,158,635)				79,894,486
HEALTH CARE – 2.6%
HEALTH CARE PROVIDERS & SERVICES - 2.6%
AMN Healthcare Services 1,4		194,620		7,599,911
Ensign Group (The)		81,393		1,771,926
Total (Cost $9,444,804)				9,371,837
INDUSTRIALS – 21.5%
AIRLINES - 1.9%
Spirit Airlines 1		131,262		6,779,682
BUILDING PRODUCTS - 3.0%
American Woodmark 1		57,276		5,472,722
Apogee Enterprises		97,503		5,542,070
				11,014,792
COMMERCIAL SERVICES & SUPPLIES - 3.9%
†Herman Miller		148,800		4,523,520
HNI Corporation		106,400		4,242,168
Kimball International Cl. B		318,030		5,307,921
				14,073,609
CONSTRUCTION & ENGINEERING - 0.9%
Comfort Systems USA		91,311		3,387,638
MACHINERY - 6.4%
Alamo Group		19,691		1,788,140
Federal Signal		104,293		1,810,526
Miller Industries		282,041		7,008,719
†Supreme Industries Cl. A		323,700		5,324,865
Wabash National		340,900		7,492,982
				23,425,232
PROFESSIONAL SERVICES - 4.2%
Heidrick & Struggles International		254,083		5,526,305
Korn/Ferry International		169,009		5,835,881
Robert Half International		8,000		383,440
TrueBlue 1		133,210		3,530,065
				15,275,691
ROAD & RAIL - 1.2%
Old Dominion Freight Line		17,700		1,685,748
Saia 1		36,023		1,847,980
Werner Enterprises		33,402		980,349
				4,514,077
Total (Cost $63,822,363)				78,470,721
INFORMATION TECHNOLOGY – 20.0%
COMMUNICATIONS EQUIPMENT - 1.1%
NETGEAR 1		92,000		3,965,200
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 14.3%
Benchmark Electronics 1		162,068		5,234,797
†Celestica 1		539,700		7,329,126
Fabrinet 1		197,100		8,408,286
Insight Enterprises 1		165,371		6,613,186
Methode Electronics		128,500		5,294,200
†Orbotech 1		146,100		4,765,782
PC Connection		279,754		7,570,143
Vishay Intertechnology		431,868		7,169,009
				52,384,529
IT SERVICES - 2.5%
Convergys Corporation		147,000		3,495,660
†NCI Cl. A 1		261,489		5,517,418
				9,013,078
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.9%
MKS Instruments		46,447		3,125,883
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.2%
Super Micro Computer 1		177,706		4,380,453
Total (Cost $61,757,342)				72,869,143
REAL ESTATE – 2.0%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 2.0%
†Marcus & Millichap 1		276,100		7,277,996
Total (Cost $7,138,312)				7,277,996
UTILITIES – 1.0%
GAS UTILITIES - 1.0%
Star Gas Partners L.P.		357,758		3,878,097
Total (Cost $3,504,997)				3,878,097
MISCELLANEOUS 2 – 1.0%
Total (Cost $2,808,457)				3,519,240
TOTAL COMMON STOCKS
(Cost $281,262,262)				325,581,920
REPURCHASE AGREEMENT – 10.9%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $39,850,399 (collateralized by obligations of various U.S. Government Agencies, 2.25% due 11/15/24, valued at $40,651,561)
(Cost $39,850,000)				39,850,000
		PRINCIPAL
		AMOUNT
COLLATERAL RECEIVED FOR SECURITIES LOANED – 1.8%
U.S. Treasury Bills
due 7/20/17-3/1/18	$	856,377		856,347
U.S. Treasury Bonds
2.50%-4.25%
due 8/15/40-2/15/46		218,198		220,481
U.S. Treasury Notes
0.75%-3.50%
due 10/31/17-2/15/27		4,672,769		4,695,213
U.S. Treasury Notes - Floating Rate
due 7/31/17-1/31/19		116,714		116,711
U.S. Treasury TIPS
0.125%-1.875%
due 4/15/18-2/15/46		664,065		664,673
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED
(Cost $6,553,425)				6,553,425
TOTAL INVESTMENTS – 101.9%
(Cost $327,665,687)				371,985,345
LIABILITIES LESS CASH AND OTHER ASSETS – (1.9)%				(7,080,875	)
NET ASSETS – 100.0%			$	364,904,470

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 69

Schedules of Investments

Royce Small/Mid-Cap Premier Fund
Common Stocks – 92.7%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 24.7%
AUTO COMPONENTS - 5.8%
Cooper Tire & Rubber	54,202	$	1,956,692
Dorman Products 1	7,800		645,606
Gentex Corporation	105,200		1,995,644
LCI Industries	32,500		3,328,000
Standard Motor Products	94,422		4,930,717
			12,856,659
AUTOMOBILES - 2.3%
Thor Industries	48,400		5,058,768
DISTRIBUTORS - 3.6%
Genuine Parts	9,969		924,724
LKQ Corporation 1	172,691		5,690,169
Pool Corporation	12,000		1,410,840
			8,025,733
HOUSEHOLD DURABLES - 2.3%
Forbo Holding	335		548,842
Hooker Furniture	32,125		1,321,944
NVR 1	1,290		3,109,687
			4,980,473
MEDIA - 2.2%
†Media General (Rights) 1,5	102,272		194,317
Meredith Corporation	49,841		2,963,047
†Nexstar Media Group Cl. A	26,373		1,577,105
			4,734,469
MULTILINE RETAIL - 1.5%
Dollar Tree 1	46,675		3,263,516
SPECIALTY RETAIL - 5.3%
Camping World Holdings Cl. A	78,570		2,423,884
CarMax 1	18,275		1,152,422
Children’s Place	33,250		3,394,825
Dicks Sporting Goods	49,964		1,990,066
Monro Muffler Brake	46,150		1,926,763
USS	36,100		716,704
			11,604,664
TEXTILES, APPAREL & LUXURY GOODS - 1.7%
Coach	14,900		705,366
Wolverine World Wide	109,300		3,061,493
			3,766,859
Total (Cost $41,870,376)			54,291,141
CONSUMER STAPLES – 2.4%
FOOD & STAPLES RETAILING - 0.7%
Casey’s General Stores	14,800		1,585,228
FOOD PRODUCTS - 1.7%
Cal-Maine Foods 1	32,900		1,302,840
†Hormel Foods	70,257		2,396,466
			3,699,306
Total (Cost $5,511,073)			5,284,534
FINANCIALS – 8.8%
CAPITAL MARKETS - 5.7%
Affiliated Managers Group	27,080		4,491,489
Lazard Cl. A	92,033		4,263,889
Oaktree Capital Group LLC Cl. A	52,587		2,450,554
SEI Investments	22,700		1,220,806
			12,426,738
INSURANCE - 3.1%
Alleghany Corporation 1	11,164		6,640,347
Brown & Brown	4,700		202,429
			6,842,776
Total (Cost $16,055,036)			19,269,514
HEALTH CARE – 3.4%
HEALTH CARE EQUIPMENT & SUPPLIES - 2.6%
Dentsply Sirona	46,650		3,024,786
Hill-Rom Holdings	34,751		2,766,527
			5,791,313
LIFE SCIENCES TOOLS & SERVICES - 0.8%
Bio-Techne	14,500		1,703,750
Total (Cost $6,393,497)			7,495,063
INDUSTRIALS – 27.2%
AEROSPACE & DEFENSE - 1.7%
HEICO Corporation	9,000		646,560
Teledyne Technologies 1	23,319		2,976,670
			3,623,230
AIR FREIGHT & LOGISTICS - 0.5%
Expeditors International of Washington	20,900		1,180,432
BUILDING PRODUCTS - 1.2%
Simpson Manufacturing	61,412		2,684,319
COMMERCIAL SERVICES & SUPPLIES - 3.7%
Cintas Corporation	8,700		1,096,548
Copart 1	221,750		7,049,433
			8,145,981
CONSTRUCTION & ENGINEERING - 2.4%
Valmont Industries	35,694		5,339,822
ELECTRICAL EQUIPMENT - 2.4%
Generac Holdings 1	27,100		979,123
Hubbell Cl. B	37,722		4,268,999
			5,248,122
INDUSTRIAL CONGLOMERATES - 1.4%
Carlisle Companies	31,017		2,959,022
MACHINERY - 4.4%
Franklin Electric	24,000		993,600
Lincoln Electric Holdings	29,000		2,670,610
†Proto Labs 1,4	20,603		1,385,552
Sun Hydraulics	53,000		2,261,510
Westinghouse Air Brake Technologies	25,305		2,315,407
			9,626,679
MARINE - 1.9%
Kirby Corporation 1	63,000		4,211,550
PROFESSIONAL SERVICES - 5.8%
Equifax	18,025		2,476,995
IHS Markit 1	85,468		3,764,011
ManpowerGroup	51,175		5,713,689
Verisk Analytics 1,4	10,000		843,700
			12,798,395
ROAD & RAIL - 1.0%
Landstar System	26,400		2,259,840
TRADING COMPANIES & DISTRIBUTORS - 0.8%
Diploma	114,300		1,645,013
Total (Cost $45,247,648)			59,722,405
INFORMATION TECHNOLOGY – 11.5%
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 6.0%
AVX Corporation	224,713		3,671,811
Coherent 1	6,500		1,462,435

70 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Small/Mid-Cap Premier Fund (continued)
		SHARES		VALUE
INFORMATION TECHNOLOGY (continued)
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (continued)
II-VI 1		38,800	$	1,330,840
IPG Photonics 1		35,500		5,151,050
Littelfuse		9,300		1,534,500
				13,150,636
IT SERVICES - 1.8%
DST Systems		65,812		4,060,600
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.5%
Cabot Microelectronics		22,080		1,630,166
Lam Research		26,900		3,804,467
				5,434,633
SOFTWARE - 1.2%
Check Point Software Technologies 1,4		25,235		2,752,634
Total (Cost $18,891,403)				25,398,503
MATERIALS – 8.2%
CHEMICALS - 6.8%
Minerals Technologies		62,880		4,602,816
†NewMarket Corporation		5,325		2,452,056
RPM International		11,000		600,050
Sensient Technologies		19,109		1,538,848
Westlake Chemical		84,900		5,621,229
				14,814,999
METALS & MINING - 0.8%
Reliance Steel & Aluminum		24,650		1,794,766
PAPER & FOREST PRODUCTS - 0.6%
Stella-Jones		39,400		1,344,729
Total (Cost $14,620,729)				17,954,494
REAL ESTATE – 4.4%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 4.4%
Jones Lang LaSalle		26,540		3,317,500
Kennedy Wilson Europe Real Estate		145,500		2,103,521
Kennedy-Wilson Holdings		45,595		868,585
Realogy Holdings		104,600		3,394,270
Total (Cost $8,695,544)				9,683,876
UTILITIES – 1.4%
GAS UTILITIES - 1.4%
UGI Corporation		61,794		2,991,448
Total (Cost $1,831,399)				2,991,448
MISCELLANEOUS 2 – 0.7%
Total (Cost $1,622,613)				1,654,041
TOTAL COMMON STOCKS
(Cost $160,739,318)				203,745,019
REPURCHASE AGREEMENT – 9.2%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $20,316,203 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $20,723,395)
(Cost $20,316,000)			$	20,316,000
		PRINCIPAL
		AMOUNT
COLLATERAL RECEIVED FOR SECURITIES LOANED – 1.9%
U.S. Treasury Bills
due 7/6/17-3/1/18	$	415,724		415,709
U.S. Treasury Bonds
2.25%-7.625%
due 2/15/25-2/15/47		311,542		314,948
U.S. Treasury Notes
0.625%-3.625%
due 8/31/17-2/15/27		2,750,961		2,764,709
U.S. Treasury Notes - Floating Rate
due 7/31/17-1/31/19		60,066		60,065
U.S. Treasury Strips - Interest
due 11/15/25-2/15/40		1,848		1,854
U.S. Treasury TIPS
0.125%-2.50%
due 4/15/18-2/15/46		658,948		659,976
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED
(Cost $4,217,261)				4,217,261
TOTAL INVESTMENTS – 103.8%
(Cost $185,272,579)				228,278,280
LIABILITIES LESS CASH AND OTHER ASSETS – (3.8)%				(8,395,383	)
NET ASSETS – 100.0%			$	219,882,897

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 71

Schedules of Investments

Royce Smaller-Companies Growth Fund
Common Stocks – 93.0%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 5.9%
AUTO COMPONENTS - 0.2%
LCI Industries	9,000	$	921,600
HOTELS, RESTAURANTS & LEISURE - 3.0%
Dave & Busters Entertainment 1	60,000		3,990,600
Del Taco Restaurants 1	217,700		2,993,375
Texas Roadhouse	98,000		4,993,100
			11,977,075
HOUSEHOLD DURABLES - 0.5%
iRobot Corporation 1	22,000		1,851,080
LEISURE PRODUCTS - 1.0%
Callaway Golf	302,000		3,859,560
TEXTILES, APPAREL & LUXURY GOODS - 1.2%
Carter’s	9,900		880,605
Cherokee 1	230,000		1,598,500
Columbia Sportswear	15,000		870,900
Gildan Activewear	47,666		1,464,776
			4,814,781
Total (Cost $15,000,220)			23,424,096
ENERGY – 1.7%
ENERGY EQUIPMENT & SERVICES - 0.8%
Pason Systems	205,000		3,057,295
OIL, GAS & CONSUMABLE FUELS - 0.9%
Centennial Resource Development Cl. A 1	111,000		1,756,020
RSP Permian 1	56,000		1,807,120
			3,563,140
Total (Cost $3,962,369)			6,620,435
FINANCIALS – 11.4%
BANKS - 6.4%
Ameris Bancorp	60,000		2,892,000
†Banc of California	142,000		3,053,000
Enterprise Financial Services	138,500		5,650,800
Live Oak Bancshares	60,700		1,468,940
ServisFirst Bancshares	85,000		3,135,650
State Bank Financial	79,500		2,156,040
TriState Capital Holdings 1	279,057		7,032,236
			25,388,666
CAPITAL MARKETS - 4.4%
Financial Engines	157,800		5,775,480
Northern Trust	51,000		4,957,710
Oaktree Capital Group LLC Cl. A	55,800		2,600,280
WisdomTree Investments	383,200		3,897,144
			17,230,614
THRIFTS & MORTGAGE FINANCE - 0.6%
OceanFirst Financial	86,000		2,332,320
Total (Cost $31,504,623)			44,951,600
HEALTH CARE – 16.0%
BIOTECHNOLOGY - 4.8%
Clovis Oncology 1	66,000		6,179,580
Progenics Pharmaceuticals 1	468,200		3,179,078
Repligen 1,4	70,000		2,900,800
Zealand Pharma 1,4	335,799		6,731,093
			18,990,551
HEALTH CARE EQUIPMENT & SUPPLIES - 3.0%
ABIOMED 1,4	20,000		2,866,000
Entellus Medical 1	134,526		2,227,751
Inogen 1	37,755		3,602,582
Penumbra 1	10,000		877,500
West Pharmaceutical Services	23,000		2,173,960
			11,747,793
HEALTH CARE PROVIDERS & SERVICES - 1.9%
BioTelemetry 1	127,709		4,271,866
HealthEquity 1	62,000		3,089,460
			7,361,326
HEALTH CARE TECHNOLOGY - 0.5%
HealthStream 1,4	84,000		2,210,880
LIFE SCIENCES TOOLS & SERVICES - 2.0%
Cambrex Corporation 1	43,500		2,599,125
NeoGenomics 1,4	582,000		5,214,720
			7,813,845
PHARMACEUTICALS - 3.8%
†Axsome Therapeutics 1	656,000		3,608,000
Heska Corporation 1,4	21,000		2,143,470
Intersect ENT 1	94,000		2,627,300
†Supernus Pharmaceuticals 1	159,000		6,852,900
			15,231,670
Total (Cost $38,765,522)			63,356,065
INDUSTRIALS – 11.5%
AEROSPACE & DEFENSE - 0.5%
Mercury Systems 1	49,749		2,093,935
AIR FREIGHT & LOGISTICS - 1.8%
Atlas Air Worldwide Holdings 1	74,000		3,859,100
Forward Air	63,000		3,356,640
			7,215,740
BUILDING PRODUCTS - 1.6%
DIRTT Environmental Solutions 1	1,214,000		6,412,631
CONSTRUCTION & ENGINEERING - 0.8%
NV5 Global 1	69,585		2,957,363
MACHINERY - 2.5%
Astec Industries	36,000		1,998,360
Proto Labs 1,4	16,000		1,076,000
Tennant Company	44,937		3,316,351
Woodward	50,000		3,379,000
			9,769,711
MARINE - 2.1%
Clarkson	179,976		5,921,188
†Scorpio Bulkers 1	335,000		2,378,500
			8,299,688
PROFESSIONAL SERVICES - 1.1%
On Assignment 1,4	77,000		4,169,550
TRADING COMPANIES & DISTRIBUTORS - 1.1%
SiteOne Landscape Supply 1,4	87,000		4,529,220
Total (Cost $36,012,037)			45,447,838
INFORMATION TECHNOLOGY – 33.6%
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 8.7%
Airgain 1,4	185,623		2,632,134
Cognex Corporation	20,000		1,698,000
Coherent 1	16,000		3,599,840
ePlus 1	81,000		6,002,100
FLIR Systems	93,600		3,244,176
IPG Photonics 1	41,444		6,013,525
†Iteris 1,4	526,000		3,271,720
Knowles Corporation 1,4	154,000		2,605,680
†Universal Display	49,000		5,353,250
			34,420,425

72 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Smaller-Companies Growth Fund (continued)
		SHARES		VALUE
INFORMATION TECHNOLOGY (continued)
INTERNET SOFTWARE & SERVICES - 8.0%
Amber Road 1		367,000	$	3,145,190
Carbonite 1		162,000		3,531,600
comScore 1,3,4		256,071		6,709,060
Q2 Holdings 1,4		139,000		5,136,050
Shopify Cl. A 1		56,000		4,866,400
Stamps.com 1		32,000		4,956,000
2U 1		68,348		3,206,888
				31,551,188
IT SERVICES - 3.6%
Planet Payment 1		277,000		914,100
†Square Cl. A 1		235,000		5,513,100
Unisys Corporation 1		629,000		8,051,200
				14,478,400
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 4.6%
†Ambarella 1		34,000		1,650,700
CEVA 1,4		25,000		1,136,250
CyberOptics Corporation 1,4		277,000		5,720,050
†Ichor Holdings 1,4		100,000		2,016,000
Inphi Corporation 1		50,000		1,715,000
Integrated Device Technology 1,4		76,100		1,962,619
M/A-COM Technology Solutions Holdings 1,4		69,000		3,848,130
				18,048,749
SOFTWARE - 8.7%
†Atlassian Corporation Cl. A 1,4		82,000		2,884,760
†Callidus Software 1		132,000		3,194,400
8x8 1,4		169,000		2,458,950
HubSpot 1		53,000		3,484,750
Materialise ADR 1,4		453,577		5,383,959
Paylocity Holding Corporation 1		130,786		5,908,911
QAD Cl. A		213,000		6,826,650
RingCentral Cl. A 1		123,000		4,495,650
				34,638,030
Total (Cost $95,058,345)				133,136,792
MATERIALS – 5.9%
CHEMICALS - 2.0%
Albemarle Corporation		47,000		4,960,380
Kraton Corporation 1		91,000		3,134,040
				8,094,420
CONSTRUCTION MATERIALS - 2.4%
Eagle Materials		53,000		4,898,260
Summit Materials Cl. A 1,4		154,780		4,468,499
				9,366,759
METALS & MINING - 1.5%
Orocobre 1		2,150,000		5,734,140
Total (Cost $17,005,968)				23,195,319
REAL ESTATE – 1.9%
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 1.9%
Community Healthcare Trust		128,000		3,275,520
CyrusOne		78,000		4,348,500
Total (Cost $5,135,970)				7,624,020
TELECOMMUNICATION SERVICES – 0.9%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.9%
ORBCOMM 1		325,000		3,672,500
Total (Cost $1,909,714)				3,672,500
MISCELLANEOUS 2 – 4.2%
Total (Cost $16,148,866)				16,791,440
TOTAL COMMON STOCKS
(Cost $260,503,634)				368,220,105
REPURCHASE AGREEMENT – 6.9%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $27,192,272 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $27,740,704)
(Cost $27,192,000)				27,192,000
		PRINCIPAL
		AMOUNT
COLLATERAL RECEIVED FOR SECURITIES LOANED – 10.4%
U.S. Treasury Bills
due 7/6/17-3/1/18	$	2,047,479		2,047,406
U.S. Treasury Bonds
2.25%-7.625%
due 2/15/25-2/15/47		1,404,641		1,421,507
U.S. Treasury Notes
0.625%-3.625%
due 8/31/17-2/15/27		20,243,196		20,327,810
U.S. Treasury Notes - Floating Rate
due 7/31/17-1/31/19		331,529		331,524
U.S. Treasury Strips - Interest
due 11/15/25-2/15/40		16,664		16,716
U.S. Treasury TIPS
0.125%-2.50%
due 4/15/18-2/15/46		2,406,212		2,409,511
Money Market Funds
Federated Government Obligations Fund (7 day yield-0.8114%)				14,584,266
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED
(Cost $41,138,740)				41,138,740
TOTAL INVESTMENTS – 110.3%
(Cost $328,834,374)				436,550,845
LIABILITIES LESS CASH AND OTHER ASSETS – (10.3)%				(40,615,048	)
NET ASSETS – 100.0%			$	395,935,797

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 73

Schedules of Investments

Royce Special Equity Fund
Common Stocks – 91.0%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 38.2%
AUTO COMPONENTS - 8.7%
Cooper Tire & Rubber	1,435,000	$	51,803,500
Gentex Corporation	820,000		15,555,400
Standard Motor Products 6	1,280,000		66,841,600
			134,200,500
AUTOMOBILES - 2.0%
Winnebago Industries	865,000		30,275,000
DIVERSIFIED CONSUMER SERVICES - 3.3%
Capella Education 6	585,000		50,076,000
HOTELS, RESTAURANTS & LEISURE - 0.3%
Bowl America Cl. A 6	343,000		4,970,070
HOUSEHOLD DURABLES - 9.3%
Bassett Furniture Industries 6	800,000		30,360,000
CSS Industries 6	885,000		23,151,600
Ethan Allen Interiors	392,500		12,677,750
Flexsteel Industries 6	562,000		30,409,820
Hooker Furniture 6	1,110,000		45,676,500
			142,275,670
MEDIA - 8.1%
Meredith Corporation	896,000		53,267,200
Scholastic Corporation	1,620,000		70,615,800
			123,883,000
SPECIALTY RETAIL - 6.5%
Children’s Place	797,500		81,424,750
Haverty Furniture	740,000		18,574,000
			99,998,750
Total (Cost $392,630,269)			585,678,990
CONSUMER STAPLES – 6.2%
FOOD & STAPLES RETAILING - 3.4%
Weis Markets	1,061,000		51,691,920
FOOD PRODUCTS - 2.8%
John B. Sanfilippo & Son 6	680,000		42,914,800
Total (Cost $78,099,865)			94,606,720
INDUSTRIALS – 21.0%
AEROSPACE & DEFENSE - 3.3%
National Presto Industries 6	464,000		51,272,000
BUILDING PRODUCTS - 1.6%
Insteel Industries	730,000		24,068,100
COMMERCIAL SERVICES & SUPPLIES - 6.9%
Ennis	72,367		1,382,210
Herman Miller	955,000		29,032,000
UniFirst Corporation	533,000		74,993,100
			105,407,310
ELECTRICAL EQUIPMENT - 3.9%
Hubbell Cl. B	525,000		59,414,250
MACHINERY - 3.6%
†Gencor Industries 1	268,440		4,348,728
Hurco Companies 6	525,000		18,243,750
Kadant	130,000		9,776,000
Wabash National	1,050,000		23,079,000
			55,447,478
PROFESSIONAL SERVICES - 1.5%
Kelly Services Cl. A	110,000		2,469,500
Resources Connection 6	1,505,000		20,618,500
			23,088,000
TRADING COMPANIES & DISTRIBUTORS - 0.2%
Central Steel & Wire 3	6,500		3,575,000
Total (Cost $191,132,052)			322,272,138
INFORMATION TECHNOLOGY – 17.3%
COMMUNICATIONS EQUIPMENT - 1.1%
†NETGEAR 1	365,000		15,731,500
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 9.6%
AVX Corporation	5,000,000		81,700,000
Park Electrochemical 6	1,955,000		36,011,100
Vishay Intertechnology	1,760,000		29,216,000
			146,927,100
IT SERVICES - 2.3%
Computer Services 3,6	755,500		35,508,500
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 4.3%
†Kulicke & Soffa Industries 1	770,400		14,653,008
Teradyne	1,716,000		51,531,480
			66,184,488
Total (Cost $209,799,724)			264,351,588
MATERIALS – 6.3%
CHEMICALS - 0.4%
Hawkins	145,000		6,720,750
METALS & MINING - 2.8%
Kaiser Aluminum	475,000		42,047,000
PAPER & FOREST PRODUCTS - 3.1%
Neenah Paper	600,000		48,150,000
Total (Cost $68,679,689)			96,917,750
REAL ESTATE – 2.0%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 2.0%
Marcus & Millichap 1	1,138,500		30,010,860
Total (Cost $29,926,649)			30,010,860
TOTAL COMMON STOCKS
(Cost $970,268,248)			1,393,838,046
REPURCHASE AGREEMENT– 9.1%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $138,964,390 (collateralized by obligations of various U.S. Government Agencies, 0.25%- 2.25% due 11/15/24-1/15/25, valued at $141,744,273)
(Cost $138,963,000)			138,963,000
TOTAL INVESTMENTS – 100.1%
(Cost $1,109,231,248)			1,532,801,046
LIABILITIES LESS CASH AND OTHER ASSETS – (0.1)%			(894,440	)
NET ASSETS – 100.0%		$	1,531,906,606

74 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Special Equity Multi-Cap Fund
Common Stocks – 91.1%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 26.2%
DISTRIBUTORS - 7.2%
Genuine Parts	85,000	$	7,884,600
HOTELS, RESTAURANTS & LEISURE - 3.0%
McDonald’s	21,500		3,292,940
HOUSEHOLD DURABLES - 2.3%
Leggett & Platt	49,000		2,573,970
SPECIALTY RETAIL - 8.6%
Dicks Sporting Goods	154,000		6,133,820
Lowe’s Companies	43,000		3,333,790
			9,467,610
TEXTILES, APPAREL & LUXURY GOODS - 5.1%
Ralph Lauren Cl. A	19,100		1,409,580
VF Corporation	73,500		4,233,600
			5,643,180
Total (Cost $26,630,402)			28,862,300
CONSUMER STAPLES – 7.5%
FOOD PRODUCTS - 2.3%
Hormel Foods	73,000		2,490,030
HOUSEHOLD PRODUCTS - 5.2%
Kimberly-Clark	24,000		3,098,640
Procter & Gamble	30,000		2,614,500
			5,713,140
Total (Cost $8,108,635)			8,203,170
FINANCIALS – 1.0%
INSURANCE - 1.0%
Brown & Brown	26,000		1,119,820
Total (Cost $1,135,306)			1,119,820
INDUSTRIALS – 37.5%
AEROSPACE & DEFENSE - 5.6%
General Dynamics	16,500		3,268,650
United Technologies	23,500		2,869,585
			6,138,235
AIR FREIGHT & LOGISTICS - 1.1%
Expeditors International of Washington	21,000		1,186,080
ELECTRICAL EQUIPMENT - 1.1%
Emerson Electric	21,500		1,281,830
INDUSTRIAL CONGLOMERATES - 3.9%
Carlisle Companies	28,000		2,671,200
3M	7,700		1,603,063
			4,274,263
MACHINERY - 20.4%
Cummins	10,000		1,622,200
Illinois Tool Works	56,000		8,022,000
Parker Hannifin	35,000		5,593,700
Snap-on	26,000		4,108,000
Stanley Black & Decker	22,300		3,138,279
			22,484,179
PROFESSIONAL SERVICES - 2.3%
ManpowerGroup	23,000		2,567,950
TRADING COMPANIES & DISTRIBUTORS - 3.1%
Grainger (W.W.)	19,200		3,466,176
Total (Cost $30,193,863)			41,398,713
INFORMATION TECHNOLOGY – 16.2%
COMMUNICATIONS EQUIPMENT - 4.0%
Cisco Systems	141,000		4,413,300
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 2.2%
Avnet	61,500		2,391,120
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 10.0%
Apple	77,000		11,089,540
Total (Cost $12,286,863)			17,893,960
MATERIALS – 2.7%
CHEMICALS - 2.7%
NewMarket Corporation	6,500		2,993,120
Total (Cost $2,739,778)			2,993,120
TOTAL COMMON STOCKS
(Cost $81,094,847)			100,471,083
REPURCHASE AGREEMENT– 9.3%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $10,308,103 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $10,518,265)
(Cost $10,308,000)			10,308,000
TOTAL INVESTMENTS – 100.4%
(Cost $91,402,847)			110,779,083
LIABILITIES LESS CASH AND OTHER ASSETS – (0.4)%			(457,446	)
NET ASSETS – 100.0%		$	110,321,637

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 75

Schedules of Investments

Royce Total Return Fund
Common Stocks – 97.1%
	SHARES		VALUE
CONSUMER DISCRETIONARY – 9.8%
AUTO COMPONENTS - 1.6%
Cooper Tire & Rubber	52,180	$	1,883,698
Gentex Corporation	1,280,184		24,285,091
Nokian Renkaat	161,284		6,675,787
Standard Motor Products	91,445		4,775,258
STRATTEC SECURITY	99,881		3,535,787
			41,155,621
AUTOMOBILES - 1.2%
Thor Industries	302,364		31,603,085
DISTRIBUTORS - 0.3%
Weyco Group	264,397		7,371,388
DIVERSIFIED CONSUMER SERVICES - 0.3%
Capella Education	33,464		2,864,518
Liberty Tax Cl. A	454,430		5,884,869
			8,749,387
HOTELS, RESTAURANTS & LEISURE - 0.1%
Brinker International	39,520		1,505,712
Cheesecake Factory	32,527		1,636,108
Imvescor Restaurant Group	18,774		53,131
			3,194,951
HOUSEHOLD DURABLES - 1.3%
Bassett Furniture Industries	48,994		1,859,322
Ethan Allen Interiors	712,935		23,027,801
Flexsteel Industries	109,638		5,932,512
La-Z-Boy	100,864		3,278,080
			34,097,715
INTERNET & DIRECT MARKETING RETAIL - 0.6%
HSN	56,149		1,791,153
PetMed Express	301,167		12,227,380
			14,018,533
MEDIA - 1.3%
Gannett Company	303,941		2,650,366
Meredith Corporation	260,018		15,458,070
Saga Communications Cl. A	194,831		8,913,518
Wiley (John) & Sons Cl. A	120,855		6,375,101
			33,397,055
MULTILINE RETAIL - 0.3%
Big Lots	37,155		1,794,587
Dillard’s Cl. A	110,538		6,376,937
			8,171,524
SPECIALTY RETAIL - 2.1%
Aaron’s	37,776		1,469,486
American Eagle Outfitters	1,179,768		14,216,204
Buckle (The)	254,320		4,526,896
Caleres	59,593		1,655,494
Cato Corporation (The) Cl. A	295,451		5,196,983
Children’s Place	37,725		3,851,723
DSW Cl. A	613,277		10,855,003
GameStop Corporation Cl. A	84,533		1,826,758
Shoe Carnival	554,079		11,569,170
			55,167,717
TEXTILES, APPAREL & LUXURY GOODS - 0.7%
Columbia Sportswear	101,515		5,893,961
J.G. Boswell Company 3	1,138		747,666
Movado Group	79,583		2,009,471
Steven Madden 1	242,374		9,682,841
			18,333,939
Total (Cost $189,220,146)			255,260,915
CONSUMER STAPLES – 3.1%
BEVERAGES - 0.2%
Compania Cervecerias Unidas ADR	209,046		5,485,367
FOOD & STAPLES RETAILING - 0.6%
PriceSmart	11,724		1,027,022
Village Super Market Cl. A	562,140		14,570,669
			15,597,691
FOOD PRODUCTS - 2.1%
Flowers Foods	314,688		5,447,249
Fresh Del Monte Produce	219,747		11,187,320
Hershey Creamery 3	784		2,352,000
Lancaster Colony	118,190		14,492,458
Sanderson Farms	9,084		1,050,564
Tootsie Roll Industries	605,248		21,092,893
			55,622,484
HOUSEHOLD PRODUCTS - 0.1%
WD-40 Company	17,877		1,972,727
PERSONAL PRODUCTS - 0.1%
Nu Skin Enterprises Cl. A	34,144		2,145,609
Total (Cost $55,615,694)			80,823,878
ENERGY – 2.6%
ENERGY EQUIPMENT & SERVICES - 2.0%
CARBO Ceramics 1	81,615		559,063
Diamond Offshore Drilling 1,4	172,192		1,864,839
Helmerich & Payne	182,373		9,910,149
Oceaneering International	71,945		1,643,224
Pason Systems	1,006,222		15,006,426
Rowan Companies Cl. A 1,4	49,423		506,092
SEACOR Holdings 1	432,284		14,827,341
TGS-NOPEC Geophysical	383,160		7,852,514
			52,169,648
OIL, GAS & CONSUMABLE FUELS - 0.6%
Boardwalk Pipeline Partners L.P.	179,085		3,225,321
Dorchester Minerals L.P.	244,571		3,534,051
Permian Basin Royalty Trust	742,065		6,455,965
Sabine Royalty Trust	9,745		377,619
San Juan Basin Royalty Trust	397,109		2,704,312
			16,297,268
Total (Cost $70,969,932)			68,466,916
FINANCIALS – 27.4%
BANKS - 7.6%
Ames National	340,668		10,424,441
Associated Banc-Corp	462,839		11,663,543
Bank of Hawaii	303,502		25,181,561
Bank of the Ozarks	48,638		2,279,663
BLOM Bank GDR	245,135		2,966,133
BOK Financial	325,552		27,388,690
Camden National	290,215		12,453,126
Canadian Western Bank	609,434		12,867,291
City Holding Company	135,994		8,957,925
CNB Financial	304,443		7,297,499
Codorus Valley Bancorp	39,226		1,114,018
Farmers & Merchants Bank of Long Beach 3	467		3,572,550
First Citizens BancShares Cl. A	70,454		26,258,206
First National Bank Alaska 3	2,928		4,772,640
Landmark Bancorp	17,358		534,626
MidWestOne Financial Group	220,248		7,464,205
National Bankshares	188,844		7,704,835
Northrim BanCorp	227,159		6,905,634

76 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Total Return Fund (continued)
	SHARES		VALUE
FINANCIALS (continued)
BANKS (continued)
Peapack-Gladstone Financial	519,218	$	16,246,331
Unity Bancorp	64,286		1,105,719
			197,158,636
CAPITAL MARKETS - 9.0%
AllianceBernstein Holding L.P.	406,030		9,602,609
Apollo Global Management LLC Cl. A	415,076		10,978,760
Ares Management L.P.	414,924		7,468,632
Artisan Partners Asset Management Cl. A	144,941		4,449,689
Ashmore Group	2,901,450		13,347,402
Associated Capital Group Cl. A	191,597		6,514,298
Bolsa Mexicana de Valores	5,466,910		9,603,146
Cohen & Steers	314,432		12,747,073
Coronation Fund Managers	511,672		2,549,658
Edmond de Rothschild (Suisse)	238		4,058,087
Egyptian Financial Group-Hermes Holding Company	1,182,708		1,576,291
Federated Investors Cl. B	745,266		21,053,765
Fifth Street Finance	281,225		1,366,754
GAMCO Investors Cl. A	252,777		7,482,199
Greenhill & Co.	267,742		5,381,614
Houlihan Lokey Cl. A	198,694		6,934,421
KKR & Co. L.P.	1,346,883		25,052,024
Moelis & Company Cl. A	295,939		11,497,230
Morningstar	32,589		2,553,022
MVC Capital	445,330		4,390,954
Oaktree Capital Group LLC Cl. A	103,696		4,832,234
Och-Ziff Capital Management Group LLC Cl. A	637,547		1,632,120
Oppenheimer Holdings Cl. A	117,218		1,922,375
Rothschild & Co	545,304		19,905,288
Teton Advisors Cl. A 3	1,264		44,240
TMX Group	328,112		17,852,855
Value Partners Group	10,902,206		9,928,297
Vontobel Holding	70,622		4,588,331
Waddell & Reed Financial Cl. A	99,494		1,878,447
Westwood Holdings Group	80,767		4,578,681
			235,770,496
CONSUMER FINANCE - 0.1%
Nelnet Cl. A	45,249		2,127,156
DIVERSIFIED FINANCIAL SERVICES - 0.1%
First Pacific	693,772		511,835
Leucadia National	132,839		3,475,068
			3,986,903
INSURANCE - 9.2%
Alleghany Corporation 1	48,930		29,103,564
American Financial Group	105,447		10,478,268
Assured Guaranty	291,341		12,160,573
Baldwin & Lyons Cl. B	260,834		6,390,433
Cincinnati Financial	132,392		9,591,800
E-L Financial	67,498		43,981,963
Employers Holdings	76,237		3,224,825
Erie Indemnity Cl. A	345,427		43,202,555
First American Financial	79,572		3,556,073
Gallagher (Arthur J.) & Co.	242,314		13,872,477
HCI Group	57,016		2,678,612
Horace Mann Educators	18,774		709,657
Infinity Property & Casualty	11,833		1,112,302
Mercury General	113,423		6,124,842
National Western Life Group Cl. A	8,478		2,709,738
Old Republic International	552,236		10,785,169
ProAssurance Corporation	180,349		10,965,219
Reinsurance Group of America	74,480		9,562,487
RLI Corp.	132,568		7,240,864
Selective Insurance Group	26,341		1,318,367
State Auto Financial	175,294		4,510,315
United Fire Group	27,643		1,217,951
Universal Insurance Holdings	94,844		2,390,069
White Mountains Insurance Group	2,368		2,056,916
			238,945,039
INVESTMENT COMPANIES - 0.1%
RIT Capital Partners	89,494		2,215,833
THRIFTS & MORTGAGE FINANCE - 1.3%
Genworth MI Canada	762,224		20,971,740
Southern Missouri Bancorp	20,618		665,137
Timberland Bancorp	63,211		1,597,342
TrustCo Bank Corp. NY	1,574,507		12,202,429
			35,436,648
Total (Cost $435,546,483)			715,640,711
HEALTH CARE – 4.9%
HEALTH CARE EQUIPMENT & SUPPLIES - 2.7%
Analogic Corporation	142,315		10,339,185
Atrion Corporation	9,031		5,809,642
Hill-Rom Holdings	293,774		23,387,348
Meridian Bioscience	153,593		2,419,090
Teleflex	144,007		29,918,894
			71,874,159
HEALTH CARE PROVIDERS & SERVICES - 2.0%
Aceto Corporation	46,887		724,404
Chemed Corporation	20,284		4,148,687
Ensign Group (The)	114,553		2,493,819
Landauer	473,442		24,761,017
Owens & Minor	592,022		19,057,188
U.S. Physical Therapy	16,853		1,017,921
			52,203,036
PHARMACEUTICALS - 0.2%
Recordati	103,113		4,183,207
Total (Cost $55,958,480)			128,260,402
INDUSTRIALS – 24.9%
AEROSPACE & DEFENSE - 0.7%
HEICO Corporation	264,156		18,976,967
AIR FREIGHT & LOGISTICS - 0.9%
Expeditors International of Washington	394,746		22,295,254
BUILDING PRODUCTS - 1.1%
A. O. Smith Corporation	394,065		22,197,681
Apogee Enterprises	129,020		7,333,497
			29,531,178
COMMERCIAL SERVICES & SUPPLIES - 4.6%
ABM Industries	479,376		19,903,692
Deluxe Corporation	33,548		2,322,193
Ennis	177,801		3,395,999
Herman Miller	225,592		6,857,997
HNI Corporation	510,450		20,351,641
Kimball International Cl. B	1,116,102		18,627,742
McGrath RentCorp	300,388		10,402,436
MSA Safety	160,615		13,037,120
Ritchie Bros. Auctioneers	697,974		20,059,773
Tetra Tech	22,271		1,018,898

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 77

Schedules of Investments

Royce Total Return Fund (continued)
	SHARES		VALUE
INDUSTRIALS (continued)
COMMERCIAL SERVICES & SUPPLIES (continued)
UniFirst Corporation	20,929	$	2,944,710
			118,922,201
CONSTRUCTION & ENGINEERING - 0.9%
Comfort Systems USA	301,436		11,183,276
EMCOR Group	55,805		3,648,531
KBR	412,548		6,278,980
Valmont Industries	14,105		2,110,108
			23,220,895
ELECTRICAL EQUIPMENT - 1.7%
Hubbell Cl. B	227,723		25,771,412
LSI Industries	936,964		8,479,524
Preformed Line Products	220,018		10,213,236
			44,464,172
INDUSTRIAL CONGLOMERATES - 0.7%
Raven Industries	524,245		17,457,359
MACHINERY - 9.7%
Alamo Group	32,906		2,988,194
American Railcar Industries	219,952		8,424,162
Federal Signal	188,413		3,270,850
Franklin Electric	640,659		26,523,283
Gorman-Rupp Company (The)	446,886		11,382,186
Greenbrier Companies (The)	50,410		2,331,462
Hillenbrand	26,148		943,943
Kadant	24,611		1,850,747
Lincoln Electric Holdings	153,988		14,180,755
Lindsay Corporation	156,273		13,947,365
Miller Industries	466,563		11,594,091
Mueller (Paul) Company 1,3,6	109,436		3,121,115
Mueller Industries	363,275		11,061,724
Nordson Corporation	190,161		23,070,333
Standex International	43,799		3,972,569
Starrett (L.S.) Company (The) Cl. A 6	477,625		4,107,575
Sun Hydraulics	158,742		6,773,521
Tennant Company	494,259		36,476,314
Timken Company (The)	26,800		1,239,500
Trinity Industries	589,650		16,527,889
Wabash National	748,885		16,460,492
Woodward	459,556		31,056,794
			251,304,864
MARINE - 0.9%
Clarkson	735,601		24,201,183
PROFESSIONAL SERVICES - 3.3%
Exponent	61,626		3,592,796
Heidrick & Struggles International	411,793		8,956,498
Insperity	28,443		2,019,453
Kelly Services Cl. A	407,100		9,139,395
Korn/Ferry International	364,318		12,579,900
ManpowerGroup	366,391		40,907,555
Resources Connection	5,447		74,624
Robert Half International	201,512		9,658,470
			86,928,691
ROAD & RAIL - 0.2%
Werner Enterprises	195,804		5,746,848
TRADING COMPANIES & DISTRIBUTORS - 0.2%
Applied Industrial Technologies	46,887		2,768,677
Houston Wire & Cable 1	585,647		3,074,647
			5,843,324
Total (Cost $310,071,601)			648,892,936
INFORMATION TECHNOLOGY – 6.0%
COMMUNICATIONS EQUIPMENT - 0.2%
ADTRAN	137,869		2,846,995
TESSCO Technologies	231,380		3,077,354
			5,924,349
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 3.3%
AVX Corporation	880,926		14,394,331
Bel Fuse Cl. A	20,963		437,078
Methode Electronics	624,003		25,708,924
National Instruments	259,993		10,456,918
PC Connection	470,526		12,732,434
Systemax	212,256		3,990,413
Vishay Intertechnology	1,106,872		18,374,075
			86,094,173
IT SERVICES - 0.4%
Convergys Corporation	190,949		4,540,767
Forrester Research	40,179		1,573,008
MAXIMUS	51,551		3,228,639
			9,342,414
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.9%
MKS Instruments	325,327		21,894,507
Xperi	60,593		1,805,672
			23,700,179
SOFTWARE - 0.4%
Ebix	50,716		2,733,592
Fair Isaac	45,716		6,373,268
			9,106,860
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.8%
Diebold Nixdorf	773,167		21,648,676
Total (Cost $110,599,121)			155,816,651
MATERIALS – 13.7%
CHEMICALS - 6.6%
Albemarle Corporation	330,933		34,926,669
Balchem Corporation	333,140		25,888,309
Cabot Corporation	340,855		18,211,883
Chase Corporation	256,499		27,368,443
FutureFuel Corporation	219,287		3,309,041
Innospec	30,557		2,003,011
Quaker Chemical	349,614		50,774,441
Trinseo	34,455		2,367,059
Umicore	101,750		7,077,416
			171,926,272
CONSTRUCTION MATERIALS - 0.4%
Ash Grove Cement 3	37,169		9,850,157
CONTAINERS & PACKAGING - 2.8%
AptarGroup	108,268		9,404,159
Bemis Company	343,968		15,908,520
Greif Cl. A	443,719		24,750,646
Mayr-Melnhof Karton	56,225		7,352,888
Sonoco Products	307,079		15,790,002
			73,206,215
METALS & MINING - 3.1%
Agnico Eagle Mines	61,868		2,791,484
Alamos Gold Cl. A	224,999		1,596,230
Allegheny Technologies 1,4	228,060		3,879,301
Ampco-Pittsburgh	140,959		2,079,145
Carpenter Technology	130,466		4,883,342
Commercial Metals	145,259		2,822,382
Compass Minerals International	161,482		10,544,775
Ferroglobe	534,242		6,384,192

78 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

Royce Total Return Fund (continued)
	SHARES	VALUE

MATERIALS (continued)
METALS & MINING (continued)
Ferroglobe (Warranty Insurance Trust) 1,5		569,803	$	0
Franco-Nevada Corporation		82,490		5,952,478
Gold Fields ADR		1,394,785		4,853,852
Haynes International		278,405		10,108,885
Reliance Steel & Aluminum		28,502		2,075,231
Royal Gold		18,774		1,467,564
Schnitzer Steel Industries Cl. A		157,250		3,962,700
Worthington Industries		351,264		17,640,478
				81,042,039
PAPER & FOREST PRODUCTS - 0.8%
Deltic Timber		151,848		11,336,972
Domtar Corporation		110,213		4,234,383
Neenah Paper		36,770		2,950,792
Pope Resources L.P.		13,035		964,590
Resolute Forest Products 1		93,774		412,606
Schweitzer-Mauduit International		37,840		1,408,783
				21,308,126
Total (Cost $166,497,840)				357,332,809
REAL ESTATE – 0.1%
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.1%
Lexington Realty Trust		343,488		3,403,966
Total (Cost $1,918,553)				3,403,966
TELECOMMUNICATION SERVICES – 1.1%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.5%
ATN International		195,355		13,370,096
WIRELESS TELECOMMUNICATION SERVICES - 0.6%
Telephone and Data Systems		496,098		13,766,720
Total (Cost $16,448,096)				27,136,816
UTILITIES – 2.3%
ELECTRIC UTILITIES - 0.6%
ALLETE		155,220		11,126,170
Fortis		120,101		4,221,317
				15,347,487
GAS UTILITIES - 0.2%
Star Gas Partners L.P.		447,092		4,846,477
WATER UTILITIES - 1.5%
Aqua America		471,892		15,714,003
SJW		367,898		18,093,224
York Water		156,255		5,445,487
				39,252,714
Total (Cost $27,926,461)				59,446,678
MISCELLANEOUS2 – 1.2%
Total (Cost $31,242,916)				30,571,793
TOTAL COMMON STOCKS
(Cost $1,472,015,323)				2,531,054,471
		PRINCIPAL
		AMOUNT
CORPORATE BOND– 0.2%
Unit Corporation 6.625%
due 5/15/21
(Cost $3,759,874)	$	4,411,900		4,224,394
REPURCHASE AGREEMENT – 2.6%
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value $67,993,680 (collateralized by obligations of various U.S. Government Agencies, 2.375% due 8/15/24, valued at $69,356,895)
(Cost $67,993,000)				67,993,000
COLLATERAL RECEIVED FOR SECURITIES LOANED – 0.2%
U.S. Treasury Bills
due 7/6/17-3/1/18		120,884		120,879
U.S. Treasury Bonds
2.25%-5.50%
due 8/15/28-2/15/47		333,605		337,613
U.S. Treasury Notes
0.625%-3.625%
due 9/30/17-2/15/27		1,197,489		1,203,581
U.S. Treasury Notes - Floating Rate
due 7/31/17-1/31/19		9,420		9,419
U.S. Treasury TIPS
0.125%-2.50%
due 4/15/18-2/15/46		412,439		413,283
Money Market Funds
Federated Government Obligations Fund (7 day yield-0.8114%)				4,335,210
TOTAL COLLATERAL RECEIVED FOR SECURITIES LOANED
(Cost $6,419,985)				6,419,985
TOTAL INVESTMENTS – 100.1%
(Cost $1,550,188,182)				2,609,691,850
LIABILITIES LESS CASH AND OTHER ASSETS – (0.1)%				(1,656,253	)
NET ASSETS – 100.0%			$	2,608,035,597

†	New additions in 2017.
1	Non-income producing.
2	Includes securities first acquired in 2017 and less than 1% of net assets.
3	These securities are defined as Level 2 securities due to fair value being based on quoted prices for similar securities. See Notes to Financial Statements.
4	All or a portion of these securities were on loan at June 30, 2017.
5	Securities for which market quotations are not readily available represent 0.0%, 0.4%, 0.1% and 0.0% of net assets for Royce Low-Priced Stock Fund, Royce Micro-Cap Fund, Royce Small/Mid-Cap Premier Fund and Royce Total Return Fund. These securities have been valued at their fair value under procedures approved by the Fund’s Board of Trustees. 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.
6	At June 30, 2017, 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.
	Securities of International Funds are categorized by the country of their headquarters, with the exception of exchange-traded funds.
	Bold indicates a Fund’s 20 largest equity holdings in terms of June 30, 2017, market value.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 79

Statements of Assets and Liabilities

			Royce Global
	Royce Dividend		Financial Services		Royce International			Royce International
	Value Fund		Fund		Micro-Cap Fund			Premier Fund
ASSETS:
Investments at value
Non-Affiliated Companies	$	197,573,087	$	50,226,566	$	6,989,666		$	89,207,188
Repurchase agreements (at cost and value)		1,678,000		999,000		413,000			4,994,000
Cash and foreign currency		2,013		1,089		3,496			6,708
Receivable for investments sold		21,962		–		17,816			–
Receivable for capital shares sold		251,708		374,430		110			703,709
Receivable for dividends and interest		273,383		86,480		12,096			370,149
Prepaid expenses and other assets		3,574		1,119		123			1,126
Total Assets		199,803,727		51,688,684		7,436,307			95,282,880
LIABILITIES:
Payable for investments purchased		836,690		–		61,659			1,224,402
Payable for capital shares redeemed		492,088		32,536		987			51,340
Payable for investment advisory fees		125,915		35,502		791			74,964
Payable for trustees’ fees		6,871		1,431		175			3,233
Accrued expenses		182,058		57,178		20,534			146,121
Deferred capital gains tax		–		31,496		–			274,864
Total Liabilities		1,643,622		158,143		84,146			1,774,924
Net Assets	$	198,160,105	$	51,530,541	$	7,352,161		$	93,507,956
ANALYSIS OF NET ASSETS:
Paid-in capital	$	124,337,285	$	41,294,264	$	7,128,451		$	149,474,635
Undistributed net investment income (loss)		855,292		283,969		26,024			(581,151	)
Accumulated net realized gain (loss) on investments and foreign currency		15,924,987		531,752		(284,246	)		(70,329,867	)
Net unrealized appreciation (depreciation) on investments and foreign currency		57,042,541		9,420,556		481,932			14,944,339
Net Assets	$	198,160,105	$	51,530,541	$	7,352,161		$	93,507,956
Investment Class	$	97,796,756						$	38,320,676
Service Class		97,796,734	$	44,323,783	$	7,352,161			48,779,921
Consultant Class		1,574,236							6,344,139
Institutional Class		992,379		7,206,758
R Class									63,220
SHARES OUTSTANDING (unlimited number of $.001 par value):
Investment Class		12,712,801							3,314,507
Service Class		12,435,375		4,507,286		639,471			3,546,785
Consultant Class		175,064							424,360
Institutional Class		130,424		572,448
R Class									5,715
NET ASSET VALUES (Net Assets ÷ Shares Outstanding):
Investment Class1	$	7.69						$	11.56
Service Class1		7.86	$	9.83	$	11.50			13.75
Consultant Class2		8.99							14.95
Institutional Class3		7.61		12.59
R Class3									11.06
Investments at identified cost	$	140,530,369	$	40,774,186	$	6,507,862		$	73,970,479

1	Offering and redemption price per share; shares held less than 30 days may be subject to a 1% redemption fee, or a 2% redemption fee (Royce International Micro-Cap Fund and Royce International Premier Fund), payable to the Fund.
2	Offering and redemption price per share; shares held less than 365 days may be subject to a 1% contingent deferred sales charge, payable to Royce Fund Services, LLC.
3	Offering and redemption price per share.

80 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

	Royce Low-Priced			Royce Micro-Cap			Royce Micro-Cap			Royce Opportunity
	Stock Fund			Fund			Opportunity Fund			Fund
ASSETS:
Investments at value (including collateral on loaned securities)
Non-Affiliated Companies	$	295,872,634		$	224,869,296		$	47,678,079		$	1,457,289,148
Affiliated Companies		–			–			–			25,274,556
Repurchase agreements (at cost and value)		6,579,000			7,888,000			2,662,000			109,895,000
Cash and foreign currency		9,657			6,936			17			600
Receivable for investments sold		815,156			1,674,287			319,301			7,425,954
Receivable for capital shares sold		32,840			73,188			666			1,067,448
Receivable for dividends and interest		187,898			235,304			13,239			724,262
Prepaid expenses and other assets		–			304			1,080			22,513
Total Assets		303,497,185			234,747,315			50,674,382			1,601,699,481
LIABILITIES:
Payable for collateral on loaned securities		17,969,507			10,516,862			–			92,992,860
Payable for investments purchased		630,777			1,436,243			1,069,146			4,437,138
Payable for capital shares redeemed		367,895			478,916			15,797			1,916,658
Payable for investment advisory fees		232,414			227,281			40,071			1,226,048
Payable for trustees’ fees		8,267			6,990			1,180			41,152
Accrued expenses		657,459			182,750			19,072			582,315
Total Liabilities		19,866,319			12,849,042			1,145,266			101,196,171
Net Assets	$	283,630,866		$	221,898,273		$	49,529,116		$	1,500,503,310
ANALYSIS OF NET ASSETS:
Paid-in capital	$	220,602,860		$	167,859,079		$	39,605,818		$	1,154,509,187
Undistributed net investment income (loss)		(582,740	)		(1,396,824	)		(165,484	)		(1,283,286	)
Accumulated net realized gain (loss) on investments and foreign currency		17,491,656			16,533,439			2,196,743			124,230,616
Net unrealized appreciation (depreciation) on investments and foreign currency		46,119,090			38,902,579			7,892,039			223,046,793
Net Assets	$	283,630,866		$	221,898,273		$	49,529,116		$	1,500,503,310
Investment Class	$	20,997,834		$	176,671,662		$	48,486,929		$	755,381,146
Service Class		251,575,257			17,230,589			1,042,187			95,269,685
Consultant Class					27,996,022						20,134,171
Institutional Class		10,085,882									584,358,000
R Class		971,893									38,706,180
K Class											6,654,128
SHARES OUTSTANDING (unlimited number of $.001 par value):
Investment Class		2,514,225			14,534,317			2,570,012			54,330,892
Service Class		30,266,482			1,446,594			109,758			7,339,098
Consultant Class					2,934,128						1,747,584
Institutional Class		1,206,019									41,255,134
R Class		123,532									3,075,574
K Class											581,938
NET ASSET VALUES (Net Assets ÷ Shares Outstanding):
Investment Class1	$	8.35		$	12.16		$	18.87		$	13.90
Service Class1		8.31			11.91			9.50			12.98
Consultant Class2					9.54						11.52
Institutional Class3		8.36									14.16
R Class3		7.87									12.59
K Class3											11.43
Investments at identified cost	$	249,753,588		$	185,959,060		$	39,786,041		$	1,259,516,912
Market value of loaned securities		17,102,776			9,889,001			–			90,713,276

1	Offering and redemption price per share; shares held less than 30 days may be subject to a 1% redemption fee, payable to the Fund.
2	Offering and redemption price per share; shares held less than 365 days may be subject to a 1% contingent deferred sales charge, payable to Royce Fund Services, LLC.
3	Offering and redemption price per share.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 81

Statements of Assets and Liabilities

	Royce Pennsylvania		Royce Premier			Royce Small-Cap		Royce Small-Cap
	Mutual Fund		Fund			Leaders Fund		Value Fund
ASSETS:
Investments at value (including collateral on loaned securities)
Non-Affiliated Companies	$	2,382,347,543	$	2,117,343,235		$	85,509,925	$	332,135,345
Affiliated Companies		22,067,949		–			–		–
Repurchase agreements (at cost and value)		29,850,000		167,266,000			5,869,000		39,850,000
Cash and foreign currency		87		34,442			447		540
Receivable for investments sold		1,908,482		13,403,930			342,815		2,275,606
Receivable for capital shares sold		906,701		1,532,923			20,631		109,012
Receivable for dividends and interest		1,520,391		2,566,737			51,001		343,268
Prepaid expenses and other assets		2,637,442		8,873			33		869
Total Assets		2,441,238,595		2,302,156,140			91,793,852		374,714,640
LIABILITIES:
Payable for collateral on loaned securities		89,501,412		13,674,170			991,866		6,553,425
Payable for investments purchased		17,052,796		–			202,114		1,338,662
Payable for capital shares redeemed		2,758,265		2,840,252			73,672		1,302,133
Payable for investment advisory fees		1,454,441		1,886,708			75,334		302,128
Payable for trustees’ fees		74,116		65,234			3,169		13,528
Accrued expenses		1,310,972		1,628,470			101,317		300,294
Total Liabilities		112,152,002		20,094,834			1,447,472		9,810,170
Net Assets	$	2,329,086,593	$	2,282,061,306		$	90,346,380	$	364,904,470
ANALYSIS OF NET ASSETS:
Paid-in capital	$	1,148,800,268	$	881,409,812		$	61,176,473	$	314,568,683
Undistributed net investment income (loss)		209,133		(622,783	)		184,940		669,888
Accumulated net realized gain (loss) on investments and foreign currency		288,851,004		267,483,031			10,423,793		5,345,755
Net unrealized appreciation (depreciation) on investments and foreign currency		891,226,188		1,133,791,246			18,561,174		44,320,144
Net Assets	$	2,329,086,593	$	2,282,061,306		$	90,346,380	$	364,904,470
Investment Class	$	1,622,522,033	$	1,768,984,546		$	42,866,112	$	60,223,418
Service Class		78,286,752		51,848,296			45,448,596		171,076,571
Consultant Class		370,697,010		31,081,325					13,916,981
Institutional Class		238,644,018		269,806,399					102,372,977
W Class				147,282,802
R Class		16,215,199		13,057,938			2,031,672		15,260,998
K Class		2,721,581							2,053,525
SHARES OUTSTANDING (unlimited number of $.001 par value):
Investment Class		140,523,497		104,934,721			5,943,920		6,265,240
Service Class		6,784,199		3,159,004			6,390,578		17,902,507
Consultant Class		39,974,733		2,308,098					1,624,977
Institutional Class		20,632,234		15,786,868					10,643,891
W Class				8,708,005
R Class		1,488,580		833,074			206,758		1,658,931
K Class		286,521							310,314
NET ASSET VALUES (Net Assets ÷ Shares Outstanding):
Investment Class1	$	11.55	$	16.86		$	7.21	$	9.61
Service Class1		11.54		16.41			7.11		9.56
Consultant Class2		9.27		13.47					8.56
Institutional Class3		11.57		17.09					9.62
W Class3				16.91
R Class3		10.89		15.67			9.83		9.20
K Class3		9.50							6.62
Investments at identified cost	$	1,513,189,031	$	983,454,039		$	66,948,751	$	287,815,687
Market value of loaned securities		87,354,679		13,545,585			976,862		6,459,221

1	Offering and redemption price per share; shares held less than 30 days may be subject to a 1% redemption fee, payable to the Fund.
2	Offering and redemption price per share; shares held less than 365 days may be subject to a 1% contingent deferred sales charge, payable to Royce Fund Services, LLC.
3	Offering and redemption price per share.

82 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

June 30, 2017 (unaudited)

			Royce Smaller-
	Royce Small/Mid-Cap		Companies Growth			Royce Special Equity
	Premier Fund		Fund			Fund
ASSETS:
Investments at value (including collateral on loaned securities)
Non-Affiliated Companies	$	207,962,280	$	409,358,845		$	937,783,806
Affiliated Companies		–		–			456,054,240
Repurchase agreements (at cost and value)		20,316,000		27,192,000			138,963,000
Cash and foreign currency		5,518		904			630
Receivable for investments sold		589,925		7,317,611			786,801
Receivable for capital shares sold		74,981		239,090			1,984,054
Receivable for dividends and interest		138,402		126,494			1,080,263
Prepaid expenses and other assets		3,647		612			22,747
Total Assets		229,090,753		444,235,556			1,536,675,541
LIABILITIES:
Payable for collateral on loaned securities		4,217,261		41,138,740			–
Payable for investments purchased		1,323,398		5,500,051			1,196,529
Payable for capital shares redeemed		3,415,522		920,018			1,504,004
Payable for investment advisory fees		157,484		330,434			1,286,020
Payable for trustees’ fees		6,482		13,573			42,910
Accrued expenses		87,709		396,943			739,472
Total Liabilities		9,207,856		48,299,759			4,768,935
Net Assets	$	219,882,897	$	395,935,797		$	1,531,906,606
ANALYSIS OF NET ASSETS:
Paid-in capital	$	160,537,669	$	224,157,414		$	1,004,310,086
Undistributed net investment income (loss)		158,711		(1,528,934	)		4,057,335
Accumulated net realized gain (loss) on investments and foreign currency		16,182,219		65,590,742			99,969,387
Net unrealized appreciation (depreciation) on investments and foreign currency		43,004,298		107,716,575			423,569,798
Net Assets	$	219,882,897	$	395,935,797		$	1,531,906,606
Investment Class	$	85,044,942	$	97,657,769		$	1,134,092,606
Service Class		122,446,311		274,267,499			108,087,650
Consultant Class		10,455,887		10,952,993			47,245,452
Institutional Class				12,401,791			242,480,898
R Class		1,935,757		655,745
SHARES OUTSTANDING (unlimited number of $.001 par value):
Investment Class		5,492,169		7,811,219			51,694,007
Service Class		7,937,596		22,396,862			4,941,256
Consultant Class		952,464		1,026,586			2,364,652
Institutional Class				980,199			11,138,864
R Class		192,551		57,444
NET ASSET VALUES (Net Assets ÷ Shares Outstanding):
Investment Class1	$	15.48	$	12.50		$	21.94
Service Class1		15.43		12.25			21.87
Consultant Class2		10.98		10.67			19.98
Institutional Class3				12.65			21.77
R Class3		10.05		11.42
Investments at identified cost	$	164,956,579	$	301,642,374		$	970,268,248
Market value of loaned securities		4,137,574		39,964,689			–

1	Offering and redemption price per share; shares held less than 30 days may be subject to a 1% redemption fee, payable to the Fund.
2	Offering and redemption price per share; shares held less than 365 days may be subject to a 1% contingent deferred sales charge, payable to Royce Fund Services, LLC.
3	Offering and redemption price per share.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 83

Statements of Assets and Liabilities June 30, 2017 (unaudited)

	Royce Special Equity		Royce Total Return
	Multi-Cap Fund		Fund
ASSETS:
Investments at value (including collateral on loaned securities)
Non-Affiliated Companies	$	100,471,083	$	2,534,470,160
Affiliated Companies		–		7,228,690
Repurchase agreements (at cost and value)		10,308,000		67,993,000
Cash and foreign currency		591		95,092
Receivable for investments sold		–		70,605,878
Receivable for capital shares sold		21,927		2,814,272
Receivable for dividends and interest		153,714		2,604,022
Prepaid expenses and other assets		2,398		39,481
Total Assets		110,957,713		2,685,850,595
LIABILITIES:
Payable for collateral on loaned securities		–		6,419,985
Payable for investments purchased		535,234		226,867
Payable for capital shares redeemed		1,250		67,294,219
Payable for investment advisory fees		73,195		2,180,333
Payable for trustees’ fees		3,443		80,493
Accrued expenses		22,954		1,613,101
Total Liabilities		636,076		77,814,998
Net Assets	$	110,321,637	$	2,608,035,597
ANALYSIS OF NET ASSETS:
Paid-in capital	$	84,816,254	$	1,303,052,113
Undistributed net investment income (loss)		499,704		555,161
Accumulated net realized gain (loss) on investments and foreign currency		5,629,444		244,931,790
Net unrealized appreciation (depreciation) on investments and foreign currency		19,376,235		1,059,496,533
Net Assets	$	110,321,637	$	2,608,035,597
Investment Class	$	37,209,569	$	1,728,995,819
Service Class		29,091,789		112,300,929
Consultant Class		4,333,743		248,059,856
Institutional Class		39,686,536		344,933,332
W Class				85,375,969
R Class				52,169,809
K Class				36,199,883
SHARES OUTSTANDING (unlimited number of $.001 par value):
Investment Class		2,522,634		123,637,341
Service Class		1,968,516		7,863,253
Consultant Class		450,317		17,248,115
Institutional Class		2,691,632		24,963,388
W Class				6,111,873
R Class				3,622,031
K Class				3,902,671
NET ASSET VALUES (Net Assets ÷ Shares Outstanding):
Investment Class1	$	14.75	$	13.98
Service Class1		14.78		14.28
Consultant Class2		9.62		14.38
Institutional Class3		14.74		13.82
W Class3				13.97
R Class3				14.40
K Class3				9.28
Investments at identified cost	$	81,094,847	$	1,482,195,182
Market value of loaned securities		–		6,187,714

1	Offering and redemption price per share; shares held less than 30 days may be subject to a 1% redemption fee, payable to the Fund.
2	Offering and redemption price per share; shares held less than 365 days may be subject to a 1% contingent deferred sales charge, payable to Royce Fund Services, LLC.
3	Offering and redemption price per share.

84 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Statements of Changes in Net Assets

							Royce Global Financial						Royce International
	Royce Dividend Value Fund						Services Fund						Micro-Cap Fund
	Six Months Ended						Six Months Ended						Six Months Ended
	6/30/17 (unaudited)			Year Ended 12/31/16			6/30/17 (unaudited)			Year Ended 12/31/16			6/30/17 (unaudited)		Year Ended 12/31/16
INVESTMENT OPERATIONS:
Net investment income (loss)	$	1,511,306		$	3,671,006		$	259,824		$	632,883		$	41,566	$	40,959
Net realized gain (loss) on investments and foreign currency		7,509,944			23,693,288			1,159,952			(622,546	)		200,539		84,177
Net change in unrealized appreciation (depreciation) on investments and foreign currency		6,850,906			8,045,266			3,383,547			5,831,058			699,579		243,967
Net increase (decrease) in net assets from investment operations		15,872,156			35,409,560			4,803,323			5,841,395			941,684		369,103
DISTRIBUTIONS:
Net investment income
Investment Class		(652,563	)		(1,603,952	)
Service Class		(487,951	)		(1,483,597	)		–			(227,361	)		–		(94,073	)
Consultant Class		(2,614	)		(6,858	)
Institutional Class		(6,248	)		(12,914	)		–			(48,466	)
Net realized gain on investments and foreign currency
Investment Class		–			(9,347,539	)
Service Class		–			(10,322,532	)		–			(113,915	)		–		–
Consultant Class		–			(118,406	)
Institutional Class		–			(73,032	)		–			(13,575	)
Return of capital
Investment Class		–			–
Service Class		–			–			–			–			–		(3,148	)
Consultant Class		–			–
Institutional Class		–			–			–			–
Total distributions		(1,149,376	)		(22,968,830	)		–			(403,317	)		–		(97,221	)
CAPITAL SHARE TRANSACTIONS:
Net capital share transactions
Investment Class		(8,577,077	)		(21,449,693	)
Service Class		(25,389,973	)		(59,138,290	)		(3,455,188	)		(12,648,330	)		350,785		(314,555	)
Consultant Class		(107,778	)		(345,496	)
Institutional Class		107,695			134,631			79,295			5,299,129
Shareholder redemption fees
Investment Class		108			149
Service Class		3			306			328			1,391			–		3
Net increase (decrease) in net assets from capital share transactions		(33,967,022	)		(80,798,393	)		(3,375,565	)		(7,347,810	)		350,785		(314,552	)
Net Increase (Decrease) In Net Assets		(19,244,242	)		(68,357,663	)		1,427,758			(1,909,732	)		1,292,469		(42,670	)
NET ASSETS:
Beginning of period		217,404,347			285,762,010			50,102,783			52,012,515			6,059,692		6,102,362
End of period	$	198,160,105		$	217,404,347		$	51,530,541		$	50,102,783		$	7,352,161	$	6,059,692
Undistributed Net Investment Income (Loss) at End of Period	$	855,292		$	493,362		$	283,969		$	24,145		$	26,024	$	(15,542	)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 85

Statements of Changes in Net Assets

	Royce International Premier Fund						Royce Low-Priced Stock Fund						Royce Micro-Cap Fund
	Six Months Ended						Six Months Ended						Six Months Ended
	6/30/17 (unaudited)			Year Ended 12/31/16			6/30/17 (unaudited)			Year Ended 12/31/16			6/30/17 (unaudited)			Year Ended 12/31/16
INVESTMENT OPERATIONS:
Net investment income (loss)	$	338,843		$	440,469		$	(64,937	)	$	563,098		$	(508,401	)	$	(315,442	)
Net realized gain (loss) on investments and foreign currency		1,552,099			2,017,787			11,506,968			24,229,523			8,330,545			24,722,058
Net change in unrealized appreciation (depreciation) on investments and foreign currency		13,248,725			2,859,167			(8,930,498	)		18,925,368			(3,974,302	)		16,232,069
Net increase (decrease) in net assets from investment operations		15,139,667			5,317,423			2,511,533			43,717,989			3,847,842			40,638,685
DISTRIBUTIONS:
Net investment income
Investment Class		–			(578,473	)		–			(153,381	)		(86	)		(860,802	)
Service Class		–			(884,559	)		–			(1,280,579	)		–			(58,138	)
Consultant Class		–			(74,632	)								–			–
Institutional Class								–			(77,571	)
R Class		–			(1,365	)		–			(1,471	)
K Class		–			(643	)		–			(34,411	)
Net realized gain on investments and foreign currency
Investment Class		–			(22,488	)		–			(1,891,699	)		(1,945	)		(19,361,347	)
Service Class		–			(37,565	)		–			(23,339,027	)		–			(1,732,575	)
Consultant Class		–			(4,771	)								–			(4,361,373	)
Institutional Class								–			(1,002,506	)
R Class		–			(61	)		–			(92,435	)
K Class		–			(27	)		–			(400,675	)
Return of capital
Investment Class		–			(2,096	)		–			–			–			–
Service Class		–			(3,224	)		–			–			–			–
Consultant Class		–			(282	)								–			–
Institutional Class								–			–
R Class		–			(5	)		–			–
K Class		–			(2	)		–			–
Total distributions		–			(1,610,193	)		–			(28,273,755	)		(2,031	)		(26,374,235	)
CAPITAL SHARE TRANSACTIONS:
Net capital share transactions
Investment Class		13,307,240			(7,619,217	)		(2,067,963	)		(7,100,958	)		(19,284,546	)		(38,591,832	)
Service Class		1,332,901			(6,346,690	)		(32,494,097	)		(50,040,199	)		(423,305	)		(4,084,325	)
Consultant Class		151,306			(1,615,137	)								(5,935,379	)		(8,726,715	)
Institutional Class								(2,338,893	)		(25,653,966	)
R Class		581			11,570			(70,933	)		(159,633	)
K Class		(24,050	)		672			(1,100,085	)		(145,351	)
Value of shares issued in connection with the merger of Royce European Small-Cap Fund and Royce Global Value Fund					62,822,434
Shareholder redemption fees
Investment Class		–			758			–			–			56			70
Service Class		174			268			1,305			69			–			–
Net increase (decrease) in net assets from capital share transactions		14,768,152			47,254,658			(38,070,666	)		(83,100,038	)		(25,643,174	)		(51,402,802	)
Net Increase (Decrease) In Net Assets		29,907,819			50,961,888			(35,559,133	)		(67,655,804	)		(21,797,363	)		(37,138,352	)
NET ASSETS:
Beginning of period		63,600,137			12,638,249			319,189,999			386,845,803			243,695,636			280,833,988
End of period	$	93,507,956		$	63,600,137		$	283,630,866		$	319,189,999		$	221,898,273		$	243,695,636
Undistributed Net Investment Income (Loss) at End of Period	$	(581,151	)	$	(919,994	)	$	(582,740	)	$	(517,803	)	$	(1,396,824	)	$	(888,336	)

86 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

	Royce Micro-Cap Opportunity Fund						Royce Opportunity Fund						Royce Pennsylvania Mutual Fund
	Six Months Ended						Six Months Ended						Six Months Ended
	6/30/17 (unaudited)			Year Ended 12/31/16			6/30/17 (unaudited)			Year Ended 12/31/16			6/30/17 (unaudited)			Year Ended 12/31/16
INVESTMENT OPERATIONS:
Net investment income (loss)	$	(165,484	)	$	(220,205	)	$	(839,584	)	$	(2,560,355	)	$	1,937,184		$	11,458,260
Net realized gain (loss) on investments and foreign currency		3,649,697			(446,685	)		113,543,069			81,399,272			216,455,618			382,217,946
Net change in unrealized appreciation (depreciation) on investments and foreign currency		929,627			9,869,805			4,031,076			286,652,783			(111,172,760	)		196,021,249
Net increase (decrease) in net assets from investment operations		4,413,840			9,202,915			116,734,561			365,491,700			107,220,042			589,697,455
DISTRIBUTIONS:
Net investment income
Investment Class		–			–			–			–			–			(5,686,548	)
Service Class		–			–			–			–			–			(89,747	)
Consultant Class								–			–			–			–
Institutional Class								–			–			–			(1,114,871	)
R Class								–			–			–			–
K Class								–			–			–			–
Net realized gain on investments and foreign currency
Investment Class		–			–			–			(49,065,228	)		–			(107,426,917	)
Service Class		–			–			–			(5,193,491	)		–			(6,455,759	)
Consultant Class								–			(1,647,105	)		–			(31,772,229	)
Institutional Class								–			(37,279,779	)		–			(16,986,455	)
R Class								–			(2,795,339	)		–			(1,169,369	)
K Class								–			(525,822	)		–			(247,212	)
Total distributions		–			–			–			(96,506,764	)		–			(170,949,107	)
CAPITAL SHARE TRANSACTIONS:
Net capital share transactions
Investment Class		(969,851	)		1,678,178			(55,576,397	)		(130,921,772	)		(125,044,385	)		(525,830,125	)
Service Class		(44,781	)		(400,240	)		15,736,511			(40,726,682	)		(26,358,470	)		(14,214,408	)
Consultant Class								(2,488,386	)		(1,846,769	)		(47,042,838	)		(70,571,044	)
Institutional Class								(45,609,197	)		(125,523,167	)		(17,366,839	)		(328,652,837	)
R Class								(3,123,135	)		(127,892	)		(1,560,670	)		(4,149,765	)
K Class								(563,387	)		(4,132,187	)		(594,845	)		(1,338,061	)
Shareholder redemption fees
Investment Class		–			412			417			1,530			3,259			22,510
Service Class		99			24			387			124			2,907			2,869
Net increase (decrease) in net assets from capital share transactions		(1,014,533	)		1,278,374			(91,623,187	)		(303,276,815	)		(217,961,881	)		(944,730,861	)
Net Increase (Decrease) In Net Assets		3,399,307			10,481,289			25,111,374			(34,291,879	)		(110,741,839	)		(525,982,513	)
NET ASSETS:
Beginning of period		46,129,809			35,648,520			1,475,391,936			1,509,683,815			2,439,828,432			2,965,810,945
End of period	$	49,529,116		$	46,129,809		$	1,500,503,310		$	1,475,391,936		$	2,329,086,593		$	2,439,828,432
Undistributed Net Investment Income (Loss) at End of Period	$	(165,484	)	$	–		$	(1,283,286	)	$	(443,702	)	$	209,133		$	(1,728,050	)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 87

Statements of Changes in Net Assets

	Royce Premier Fund						Royce Small-Cap Leaders Fund						Royce Small-Cap Value Fund
	Six Months Ended						Six Months Ended						Six Months Ended
	6/30/17 (unaudited)			Year Ended 12/31/16			6/30/17 (unaudited)			Year Ended 12/31/16			6/30/17 (unaudited)			Year Ended 12/31/16
INVESTMENT OPERATIONS:
Net investment income (loss)	$	(837,717	)	$	7,651,793		$	186,090		$	479,509		$	551,464		$	2,821,887
Net realized gain (loss) on investments and foreign currency		193,790,812			268,086,942			8,689,012			6,469,616			4,085,348			10,075,800
Net change in unrealized appreciation (depreciation) on investments and foreign currency		(9,876,082	)		183,886,343			(7,716,519	)		15,358,937			(23,071,560	)		77,277,716
Net increase (decrease) in net assets from investment operations		183,077,013			459,625,078			1,158,583			22,308,062			(18,434,748	)		90,175,403
DISTRIBUTIONS:
Net investment income
Investment Class		(62	)		(4,446,718	)		–			(365,134	)		–			(574,909	)
Service Class		–			–			–			(263,257	)		–			(1,164,815	)
Consultant Class		–			–									–			–
Institutional Class		–			(816,383	)								–			(1,204,138	)
W Class		–			(358,070	)
R Class		–			–			–			(1,756	)		–			(50,816	)
K Class					(36,010	)		–			(1,370	)		–			(4,294	)
Net realized gain on investments and foreign currency
Investment Class		(2,941	)		(211,537,353	)		–			(4,574,543	)		–			(3,534,812	)
Service Class		–			(5,326,941	)		–			(4,826,822	)		–			(10,330,776	)
Consultant Class		–			(4,519,182	)								–			(880,547	)
Institutional Class		–			(28,846,485	)								–			(6,259,269	)
W Class		–			(18,160,148	)
R Class		–			(1,735,767	)		–			(130,446	)		–			(902,982	)
K Class					(1,812,751	)		–			(34,032	)		–			(206,890	)
Total distributions		(3,003	)		(277,595,808	)		–			(10,197,360	)		–			(25,114,248	)
CAPITAL SHARE TRANSACTIONS:
Net capital share transactions
Investment Class		(149,200,605	)		(386,079,798	)		(5,852,906	)		(7,875,386	)		(9,684,319	)		(14,802,713	)
Service Class		1,288,664			(19,076,174	)		(5,619,237	)		(13,442,897	)		(33,312,756	)		(68,631,289	)
Consultant Class		(2,739,029	)		(3,272,047	)								(1,816,308	)		(4,054,963	)
Institutional Class		5,463,711			(67,646,777	)								(20,184,194	)		(42,386,309	)
W Class		(13,044,672	)		(59,256,198	)
R Class		(1,917,191	)		(3,305,881	)		143,191			(27,116	)		(2,038,454	)		(3,390,856	)
K Class					(1,330,635	)		(507,282	)		98,793			(805,335	)		(3,533,475	)
Shareholder redemption fees
Investment Class		1,231			7,363			–			–			–			1,133
Service Class		210			–			9			72			116			559
Net increase (decrease) in net assets from capital share transactions		(160,147,681	)		(539,960,147	)		(11,836,225	)		(21,246,534	)		(67,841,250	)		(136,797,913	)
Net Increase (Decrease) In Net Assets		22,926,329			(357,930,877	)		(10,677,642	)		(9,135,832	)		(86,275,998	)		(71,736,758	)
NET ASSETS:
Beginning of period		2,259,134,977			2,617,065,854			101,024,022			110,159,854			451,180,468			522,917,226
End of period	$	2,282,061,306		$	2,259,134,977		$	90,346,380		$	101,024,022		$	364,904,470		$	451,180,468
Undistributed Net Investment Income (Loss) at End of Period	$	(622,783	)	$	214,996		$	184,940		$	(1,150	)	$	669,888		$	118,424

88 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

							Royce Smaller-Companies
	Royce Small/Mid-Cap Premier Fund						Growth Fund						Royce Special Equity Fund
	Six Months Ended						Six Months Ended						Six Months Ended
	6/30/17 (unaudited)			Year Ended 12/31/16			6/30/17 (unaudited)			Year Ended 12/31/16			6/30/17 (unaudited)			Year Ended 12/31/16
INVESTMENT OPERATIONS:
Net investment income (loss)	$	171,680		$	80,363		$	(1,708,963	)	$	(3,233,602	)	$	4,017,324		$	14,034,085
Net realized gain (loss) on investments and foreign currency		7,874,594			17,403,296			44,594,884			43,532,996			61,597,188			144,372,440
Net change in unrealized appreciation (depreciation) on investments and foreign currency		4,501,253			20,044,069			638,265			(8,118,296	)		(73,042,533	)		258,157,824
Net increase (decrease) in net assets from investment operations		12,547,527			37,527,728			43,524,186			32,181,098			(7,428,021	)		416,564,349
DISTRIBUTIONS:
Net investment income
Investment Class		–			(349,595	)		–			–			–			(10,976,670	)
Service Class		–			(225,517	)		–			–			–			(927,113	)
Consultant Class		–			–			–			–			–			(98,531	)
Institutional Class								–			–			–			(2,208,722	)
R Class		–			–			–			–
K Class		–			(8,467	)		–			–
Net realized gain on investments and foreign currency
Investment Class		–			(2,986,270	)		–			(10,605,399	)		–			(77,675,819	)
Service Class		–			(4,072,137	)		–			(30,194,249	)		–			(8,070,542	)
Consultant Class		–			(538,174	)		–			(1,333,802	)		–			(3,479,624	)
Institutional Class								–			(2,047,317	)		–			(14,305,337	)
R Class		–			(97,583	)		–			(89,046	)
K Class		–			(203,617	)		–			(38,133	)
Total distributions		–			(8,481,360	)		–			(44,307,946	)		–			(117,742,358	)
CAPITAL SHARE TRANSACTIONS:
Net capital share transactions
Investment Class		(8,297,156	)		(13,714,678	)		(11,858,703	)		(38,505,792	)		(85,306,093	)		(99,953,704	)
Service Class		(4,523,220	)		(15,044,344	)		(40,034,301	)		(116,353,750	)		(19,179,564	)		(6,665,803	)
Consultant Class		(1,766,543	)		(901,650	)		(750,182	)		(3,295,302	)		(2,804,582	)		(281,055	)
Institutional Class								(10,234,193	)		(17,982,903	)		36,639,634			(43,764,912	)
R Class		(113,810	)		(613,184	)		(216,405	)		(63,492	)
K Class		(4,272,121	)		(235,717	)		(210,263	)		(78,318	)
Shareholder redemption fees
Investment Class		57			2			–			30,251			3,619			22,992
Service Class		8			8			1,045			268			874			1,222
Net increase (decrease) in net assets from capital share transactions		(18,972,785	)		(30,509,563	)		(63,303,002	)		(176,249,038	)		(70,646,112	)		(150,641,260	)
Net Increase (Decrease) In Net Assets		(6,425,258	)		(1,463,195	)		(19,778,816	)		(188,375,886	)		(78,074,133	)		148,180,731
NET ASSETS:
Beginning of period		226,308,155			227,771,350			415,714,613			604,090,499			1,609,980,739			1,461,800,008
End of period	$	219,882,897		$	226,308,155		$	395,935,797		$	415,714,613		$	1,531,906,606		$	1,609,980,739
Undistributed Net Investment Income (Loss) at End of Period	$	158,711		$	(12,969	)	$	(1,528,934	)	$	180,029		$	4,057,335		$	40,011

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 89

Statements of Changes in Net Assets

	Royce Special Equity
	Multi-Cap Fund						Royce Total Return Fund
	Six Months Ended						Six Months Ended
	6/30/17 (unaudited)			Year Ended 12/31/16			6/30/17 (unaudited)			Year Ended 12/31/16
INVESTMENT OPERATIONS:
Net investment income (loss)	$	491,447		$	1,281,579		$	13,353,161		$	27,331,086
Net realized gain (loss) on investments and foreign currency		6,229,397			4,070,033			201,326,157			283,268,348
Net change in unrealized appreciation (depreciation) on investments and foreign currency		(187,526	)		9,868,313			(141,816,933	)		329,870,012
Net increase (decrease) in net assets from investment operations		6,533,318			15,219,925			72,862,385			640,469,446
DISTRIBUTIONS:
Net investment income
Investment Class		–			(444,817	)		(9,056,749	)		(28,673,118	)
Service Class		–			(339,957	)		(520,420	)		(1,495,071	)
Consultant Class		–			(44,532	)		–			(99,265	)
Institutional Class		–			(461,530	)		(2,452,583	)		(7,497,123	)
W Class								(387,636	)		(1,459,406	)
R Class								(110,652	)		(302,414	)
K Class								(101,525	)		(564,903	)
Net realized gain on investments and foreign currency
Investment Class		–			–			–			(138,580,935	)
Service Class		–			–			–			(10,479,295	)
Consultant Class		–			–			–			(19,570,898	)
Institutional Class		–			–			–			(31,762,325	)
W Class								–			(6,018,247	)
R Class								–			(3,941,629	)
K Class								–			(4,383,947	)
Total distributions		–			(1,290,836	)		(12,629,565	)		(254,828,576	)
CAPITAL SHARE TRANSACTIONS:
Net capital share transactions
Investment Class		250,806			(13,753,944	)		(145,652,994	)		(250,310,152	)
Service Class		(10,259,313	)		(14,795,597	)		(33,179,175	)		(11,414,322	)
Consultant Class		(929,661	)		(2,264,766	)		(24,693,172	)		(32,394,591	)
Institutional Class		48,606			(3,754,867	)		(84,606,645	)		(21,328,585	)
W Class								3,885,140			(53,411,042	)
R Class								(2,907,685	)		(3,978,781	)
K Class								(5,587,767	)		(28,303,584	)
Shareholder redemption fees
Investment Class		195			30			692			3,889
Service Class		2			84			2,970			614
Net increase (decrease) in net assets from capital share transactions		(10,889,365	)		(34,569,060	)		(292,738,636	)		(401,136,554	)
Net Increase (Decrease) In Net Assets		(4,356,047	)		(20,639,971	)		(232,505,816	)		(15,495,684	)
NET ASSETS:
Beginning of period		114,677,684			135,317,655			2,840,541,413			2,856,037,097
End of period	$	110,321,637		$	114,677,684		$	2,608,035,597		$	2,840,541,413
Undistributed Net Investment Income (Loss) at End of Period	$	499,704		$	8,257		$	555,161		$	(168,435	)

90 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Statements of Operations Six Months Ended June 30, 2017 (unaudited)

				Royce Global
	Royce Dividend			Financial Services			Royce International			Royce International
	Value Fund			Fund			Micro-Cap Fund			Premier Fund
INVESTMENT INCOME:
INCOME:
Dividends	$	2,864,800		$	652,530		$	101,968		$	922,538
Foreign withholding tax		(105,587	)		(30,750	)		(6,228	)		(59,937	)
Interest		22,267			306			207			4,379
Securities lending		129			–			–			–
Total income		2,781,609			622,086			95,947			866,980
EXPENSES:
Investment advisory fees		888,923			253,356			41,449			375,637
Distribution fees		142,547			54,876			8,290			81,129
Shareholder servicing		151,517			35,910			6,558			53,823
Shareholder reports		44,397			7,391			2,173			9,511
Administrative and office facilities		31,810			6,800			831			9,660
Custody		30,380			16,755			19,157			27,236
Registration		26,947			19,302			8,788			24,213
Audit		25,450			16,176			13,139			29,778
Trustees’ fees		11,617			2,618			319			3,604
Legal		2,743			596			73			832
Other expenses		7,253			1,764			472			2,839
Total expenses		1,363,584			415,544			101,249			618,262
Compensating balance credits		(1,213	)		(65	)		(11	)		(300	)
Fees waived by investment adviser and distributor		(74,417	)		(36,965	)		(44,433	)		(24,790	)
Expenses reimbursed by investment adviser		(17,651	)		(16,252	)		(2,424	)		(65,035	)
Net expenses		1,270,303			362,262			54,381			528,137
Net investment income (loss)		1,511,306			259,824			41,566			338,843
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
NET REALIZED GAIN (LOSS):
Investments		7,467,171			1,155,735			203,227			1,526,741
Foreign currency transactions		42,773			4,217			(2,688	)		25,358
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):
Investments and foreign currency translations		6,846,535			3,412,932			699,427			13,440,162
Other assets and liabilities denominated in foreign currency		4,371			(29,385	)		152			(191,437	)
Net realized and unrealized gain (loss) on investments and foreign currency		14,360,850			4,543,499			900,118			14,800,824
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS	$	15,872,156		$	4,803,323		$	941,684		$	15,139,667

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 91

Statements of Operations

	Royce Low-Priced			Royce Micro-Cap			Royce Micro-Cap			Royce Opportunity
	Stock Fund			Fund			Opportunity Fund			Fund
INVESTMENT INCOME:
INCOME:
Dividends	$	1,841,806		$	1,197,694		$	124,736		$	7,334,256
Foreign withholding tax		56,131			(21,694	)		–			–
Interest		18,016			10,352			900			49,672
Securities lending		184,609			165,356			–			458,772
Total income		2,100,562			1,351,708			125,636			7,842,700
EXPENSES:
Investment advisory fees		1,477,143			1,413,631			233,753			7,321,859
Distribution fees		330,088			171,372			1,266			299,287
Shareholder servicing		229,469			140,096			22,776			521,410
Shareholder reports		54,572			56,106			2,348			103,573
Administrative and office facilities		43,525			32,567			5,760			196,020
Custody		28,656			16,944			7,882			72,249
Registration		24,918			20,486			14,609			40,977
Audit		18,242			34,488			12,417			19,797
Trustees’ fees		16,220			12,201			2,271			74,956
Legal		3,765			2,821			504			19,334
Other expenses		9,437			6,776			1,494			36,608
Total expenses		2,236,035			1,907,488			305,080			8,706,070
Compensating balance credits		(1,003	)		(854	)		(20	)		(1,685	)
Fees waived by distributor		(26,180	)		–			–			–
Expenses reimbursed by investment adviser		(43,353	)		(46,525	)		(13,940	)		(22,101	)
Net expenses		2,165,499			1,860,109			291,120			8,682,284
Net investment income (loss)		(64,937	)		(508,401	)		(165,484	)		(839,584	)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
NET REALIZED GAIN (LOSS):
Investments in Non-Affiliated Companies		11,534,945			8,331,900			3,649,697			118,199,503
Investments in Affiliated Companies		–			–			–			(4,656,434	)
Foreign currency transactions		(27,977	)		(1,355	)		–			–
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):
Investments in Non-Affiliated Companies and foreign currency translations		(8,930,618	)		(3,983,716	)		929,627			(11,206,936	)
Investments in Affiliated Companies		–			–			–			15,238,012
Other assets and liabilities denominated in foreign currency		120			9,414			–			–
Net realized and unrealized gain (loss) on investments and foreign currency		2,576,470			4,356,243			4,579,324			117,574,145
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS	$	2,511,533		$	3,847,842		$	4,413,840		$	116,734,561

92 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Six Months Ended June 30, 2017 (unaudited)

	Royce
	Pennsylvania			Royce Premier			Royce Small-Cap			Royce Small-Cap
	Mutual Fund			Fund			Leaders Fund			Value Fund
INVESTMENT INCOME:
INCOME:
Dividends
Non-Affiliated Companies	$	14,618,829		$	12,539,020		$	849,053		$	3,374,756
Affiliated Companies		184,528			–			–			–
Foreign withholding tax		(318,815	)		(310,991	)		(23,700	)		(37,886	)
Interest		382,444			81,383			2,241			16,976
Securities lending		90,125			89,602			14,974			7,494
Total income		14,957,111			12,399,014			842,568			3,361,340
EXPENSES:
Investment advisory fees		8,945,342			11,141,528			478,016			2,031,607
Distribution fees		2,072,321			253,705			64,891			355,228
Shareholder servicing		1,007,823			898,013			61,873			237,361
Shareholder reports		243,305			258,428			17,368			45,765
Administrative and office facilities		345,976			304,878			13,520			62,929
Custody		115,951			93,624			11,749			27,550
Registration		43,208			40,012			19,167			34,033
Audit		26,226			39,300			13,728			16,332
Trustees’ fees		127,699			114,478			5,113			23,039
Legal		29,878			39,335			1,171			5,426
Other expenses		67,449			59,923			3,854			13,122
Total expenses		13,025,178			13,243,224			690,450			2,852,392
Compensating balance credits		(5,251	)		(3,002	)		(269	)		(778	)
Fees waived by distributor		–			–			(4,770	)		(9,440	)
Expenses reimbursed by investment adviser		–			(3,491	)		(28,933	)		(32,298	)
Net expenses		13,019,927			13,236,731			656,478			2,809,876
Net investment income (loss)		1,937,184			(837,717	)		186,090			551,464
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
NET REALIZED GAIN (LOSS):
Investments in Non-Affiliated Companies		216,555,530			193,755,609			8,687,765			4,078,919
Investments in Affiliated Companies		(110,352	)		–			–			–
Foreign currency transactions		10,440			35,203			1,247			6,429
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):
Investments in Non-Affiliated Companies and foreign currency translations		(106,683,498	)		(10,002,478	)		(7,716,439	)		(23,072,044	)
Investments in Affiliated Companies		(4,492,728	)		–			–			–
Other assets and liabilities denominated in foreign currency		3,466			126,396			(80	)		484
Net realized and unrealized gain (loss) on investments and foreign currency		105,282,858			183,914,730			972,493			(18,986,212	)
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS	$	107,220,042		$	183,077,013		$	1,158,583		$	(18,434,748	)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 93

Statements of Operations

				Royce Smaller-
	Royce Small/Mid-			Companies Growth			Royce Special
	Cap Premier Fund			Fund			Equity Fund
INVESTMENT INCOME:
INCOME:
Dividends
Non-Affiliated Companies	$	1,470,816		$	1,006,131		$	7,509,591
Affiliated Companies		–			–			5,761,978
Foreign withholding tax		2,010			(12,369	)		–
Interest		9,477			7,921			73,258
Securities lending		1,611			174,756			–
Total income		1,483,914			1,176,439			13,344,827
EXPENSES:
Investment advisory fees		957,361			2,013,224			7,793,411
Distribution fees		216,434			399,664			385,184
Shareholder servicing		71,462			293,879			626,456
Shareholder reports		28,556			75,537			128,067
Administrative and office facilities		30,890			61,873			203,986
Custody		20,750			24,700			64,869
Registration		24,824			31,993			33,205
Audit		25,421			16,313			18,869
Trustees’ fees		11,676			22,386			78,657
Legal		2,678			5,318			17,771
Other expenses		7,018			13,715			38,272
Total expenses		1,397,070			2,958,602			9,388,747
Compensating balance credits		(923	)		(980	)		(2,331	)
Fees waived by distributor		(67,908	)		(27,548	)		–
Expenses reimbursed by investment adviser		(16,005	)		(44,672	)		(58,913	)
Net expenses		1,312,234			2,885,402			9,327,503
Net investment income (loss)		171,680			(1,708,963	)		4,017,324
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
NET REALIZED GAIN (LOSS):
Investments in Non-Affiliated Companies		7,881,441			44,525,080			58,186,103
Investments in Affiliated Companies		–			–			3,411,085
Foreign currency transactions		(6,847	)		69,804			–
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):
Investments in Non-Affiliated Companies and foreign currency translations		4,498,715			638,136			(67,855,698	)
Investments in Affiliated Companies		–			–			(5,186,835	)
Other assets and liabilities denominated in foreign currency		2,538			129			–
Net realized and unrealized gain (loss) on investments and foreign currency		12,375,847			45,233,149			(11,445,345	)
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS	$	12,547,527		$	43,524,186		$	(7,428,021	)

94 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Six Months Ended June 30, 2017 (unaudited)

	Royce Special
	Equity Multi-Cap			Royce Total Return
	Fund			Fund
INVESTMENT INCOME:
INCOME:
Dividends
Non-Affiliated Companies	$	1,081,519		$	31,243,543
Affiliated Companies		–			368,288
Foreign withholding tax		–			(543,648	)
Interest		3,427			248,327
Securities lending		–			23,466
Total income		1,084,946			31,339,976
EXPENSES:
Investment advisory fees		472,639			13,719,259
Distribution fees		62,331			1,630,970
Shareholder servicing		38,564			1,451,963
Shareholder reports		5,263			301,213
Administrative and office facilities		15,984			383,133
Custody		8,945			143,953
Registration		25,932			53,260
Audit		13,577			36,874
Trustees’ fees		5,921			145,840
Legal		1,381			50,359
Other expenses		4,258			73,525
Total expenses		654,795			17,990,349
Compensating balance credits		(128	)		(3,534	)
Fees waived by investment adviser and distributor		(37,592	)		–
Expenses reimbursed by investment adviser		(23,576	)		–
Net expenses		593,499			17,986,815
Net investment income (loss)		491,447			13,353,161
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
NET REALIZED GAIN (LOSS):
Investments in Non-Affiliated Companies		6,229,397			200,920,966
Investments in Affiliated Companies		–			392,025
Foreign currency transactions		–			13,166
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):
Investments in Non-Affiliated Companies and foreign currency translations		(187,526	)		(143,264,567	)
Investments in Affiliated Companies		–			1,422,977
Other assets and liabilities denominated in foreign currency		–			24,657
Net realized and unrealized gain (loss) on investments and foreign currency		6,041,871			59,509,224
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS	$	6,533,318		$	72,862,385

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 95

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																													Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)		Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Dividend Value Fund–Investment Class
2017†	$	7.18	$	0.06	$	0.50		$	0.56		$	(0.05	)	$	–		$	(0.05	)	$	–	$	7.69		7.81	%1	$	97,797		1.13	%2		1.13	%2		1.07	%2		1.60	%2		11	%
2016		6.84		0.12		1.02			1.14			(0.11	)		(0.69	)		(0.80	)		–		7.18		16.75			99,462		1.16			1.16			1.11			1.64			21
2015		8.12		0.12		(0.57	)		(0.45	)		(0.13	)		(0.70	)		(0.83	)		–		6.84		(5.54	)		116,053		1.24			1.24			1.22			1.49			14
2014		8.90		0.11		(0.29	)		(0.18	)		(0.10	)		(0.50	)		(0.60	)		–		8.12		(1.90	)		176,002		1.21			1.21			1.19			1.25			22
2013		7.29		0.09		2.15			2.24			(0.10	)		(0.53	)		(0.63	)		–		8.90		31.23			211,589		1.21			1.21			1.21			1.13			36
2012		6.34		0.14		0.95			1.09			(0.12	)		(0.02	)		(0.14	)		–		7.29		17.26			118,820		1.19			1.19			1.19			1.99			28
Royce Dividend Value Fund–Service Class
2017†	$	7.33	$	0.05	$	0.52		$	0.57		$	(0.04	)	$	–		$	(0.04	)	$	–	$	7.86		7.72	%1	$	97,797		1.42	%2		1.42	%2		1.34	%2		1.32	%2		11	%
2016		6.96		0.10		1.04			1.14			(0.08	)		(0.69	)		(0.77	)		–		7.33		16.36			115,547		1.43			1.43			1.37			1.39			21
2015		8.22		0.10		(0.57	)		(0.47	)		(0.09	)		(0.70	)		(0.79	)		–		6.96		(5.72	)		167,165		1.49			1.49			1.47			1.25			14
2014		8.98		0.09		(0.29	)		(0.20	)		(0.06	)		(0.50	)		(0.56	)		–		8.22		(2.14	)		295,560		1.47			1.47			1.44			0.98			22
2013		7.35		0.07		2.16			2.23			(0.07	)		(0.53	)		(0.60	)		–		8.98		30.74			407,599		1.48			1.48			1.46			0.87			36
2012		6.38		0.12		0.95			1.07			(0.08	)		(0.02	)		(0.10	)		–		7.35		16.95			252,443		1.48			1.48			1.46			1.74			28
Royce Dividend Value Fund–Consultant Class a
2017†	$	8.39	$	0.03	$	0.59		$	0.62		$	(0.02	)	$	–		$	(0.02	)	$	–	$	8.99		7.33	%1	$	1,574		3.18	%2		3.18	%2		2.09	%2		0.59	%2		11	%
2016		7.90		0.05		1.17			1.22			(0.04	)		(0.69	)		(0.73	)		–		8.39		15.44			1,572		3.26			3.26			2.14			0.58			21
2015		9.22		0.04		(0.63	)		(0.59	)		(0.03	)		(0.70	)		(0.73	)		–		7.90		(6.39	)		1,886		3.78			3.78			2.24			0.46			14
2014		10.00		0.01		(0.27	)		(0.26	)		(0.02	)		(0.50	)		(0.52	)		–		9.22		(2.43	)1		912		9.25	2		9.25	2		2.24	2		0.45	2		22
Royce Dividend Value Fund–Institutional Class b
2017†	$	7.09	$	0.07	$	0.50		$	0.57		$	(0.05	)	$	–		$	(0.05	)	$	–	$	7.61		8.05	%1	$	992		2.79	%2		2.79	%2		0.89	%2		1.84	%2		11	%
2016		6.78		0.13		1.00			1.13			(0.13	)		(0.69	)		(0.82	)		–		7.09		16.70			823		3.30			3.30			0.93			1.81			21
2015		8.09		0.17		(0.62	)		(0.45	)		(0.16	)		(0.70	)		(0.86	)		–		6.78		(5.61	)		658		1.11			1.11			1.04			1.60			14
2014		8.88		0.12		(0.29	)		(0.17	)		(0.12	)		(0.50	)		(0.62	)		–		8.09		(1.76	)		40,942		1.10			1.10			1.04			1.42			22
2013		7.28		0.11		2.14			2.25			(0.12	)		(0.53	)		(0.65	)		–		8.88		31.46			31,236		1.11			1.11			1.04			1.29			36
2012		6.80		0.08		0.50			0.58			(0.08	)		(0.02	)		(0.10	)		–		7.28		8.51	1		23,460		1.33	2		1.33	2		1.04	2		3.48	2		28
Royce Global Financial Services Fund–Service Class
2017†	$	8.95	$	0.05	$	0.83		$	0.88		$	–		$	–		$	–		$	–	$	9.83		9.83	%1	$	44,324		1.65	%2		1.65	%2		1.49	%2		0.97	%2		10	%
2016		7.99		0.11		0.92			1.03			(0.05	)		(0.02	)		(0.07	)		–		8.95		12.93			43,629		1.67			1.67			1.49			1.25			37
2015		9.28		0.11		(0.55	)		(0.44	)		(0.11	)		(0.74	)		(0.85	)		–		7.99		(4.71	)		52,013		1.65			1.65			1.49			1.19			46
2014		9.68		0.09		0.22			0.31			(0.06	)		(0.65	)		(0.71	)		–		9.28		3.45			53,707		1.68			1.68			1.49			0.91			41
2013		6.83		0.04		2.82			2.86			(0.02	)		–			(0.02	)		0.01		9.68		42.00			47,593		1.89			1.89			1.49			0.59			23
2012		5.71		0.10		1.08			1.18			(0.06	)		–			(0.06	)		–		6.83		20.72			16,888		1.87			1.87			1.49			1.53			26
Royce Global Financial Services Fund–Institutional Class c
2017†	$	11.43	$	0.08	$	1.08		$	1.16		$	–		$	–		$	–		$	–	$	12.59		10.15	%1	$	7,207		1.57	%2		1.57	%2		1.04	%2		1.42	%2		10	%
2016		10.00		0.18		1.36			1.54			(0.09	)		(0.02	)		(0.11	)		–		11.43		15.41	1		6,474		1.85	2		1.85	2		1.04	2		1.82	2		37

96 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																														Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce International Micro-Cap Fund–Service Class
2017†	$	9.98	$	0.07		$	1.45		$	1.52		$	–		$	–		$	–		$	–	$	11.50		15.23	%1	$	7,352		3.05	%2		3.05	%2		1.64	%2		1.25	%2		48	%
2016		9.54		0.07			0.53			0.60			(0.16	)		–			(0.16	)		–		9.98		6.33			6,060		3.35			3.35			1.64			0.68			113
2015		9.66		0.04			(0.14	)		(0.10	)		(0.02	)		–			(0.02	)		–		9.54		(0.99	)		6,102		3.14			3.14			1.67			0.44			94
2014		10.04		0.06			(0.30	)		(0.24	)		(0.14	)		–			(0.14	)		–		9.66		(2.37	)		6,410		3.51			3.51			1.69			0.82			91
2013		8.61		0.11			1.51			1.62			(0.20	)		–			(0.20	)		0.01		10.04		18.95			5,209		3.86			3.86			1.69			1.22			103
2012		7.72		0.13			0.92			1.05			(0.16	)		–			(0.16	)		–		8.61		13.59			4,603		3.90			3.90			1.69			1.63			62
Royce International Premier Fund–Investment Class d
2017†	$	9.44	$	0.06		$	2.06		$	2.12		$	–		$	–		$	–		$	–	$	11.56		22.46	%1	$	38,321		1.37	%2		1.37	%2		1.19	%2		1.21	%2		23	%
2016		9.82		0.10			(0.19	)		(0.09	)		(0.28	)		(0.01	)		(0.29	)		–		9.44		(0.79	)		19,556		1.59			1.59			1.19			0.96			67
2015		8.71		0.16			1.27			1.43			(0.32	)		–			(0.32	)		–		9.82		16.42			3,623		2.80			2.80			1.38			1.72			67
2014		10.00		0.03			(0.85	)		(0.82	)		(0.16	)		(0.31	)		(0.47	)		–		8.71		(8.16	)1		3,481		3.17	2		3.17	2		1.44	2		1.00	2		62
Royce International Premier Fund–Service Class
2017†	$	11.24	$	0.05		$	2.46		$	2.51		$	–		$	–		$	–		$	–	$	13.75		22.33	%1	$	48,780		1.65	%2		1.65	%2		1.44	%2		0.82	%2		23	%
2016		11.64		0.06			(0.19	)		(0.13	)		(0.26	)		(0.01	)		(0.27	)		–		11.24		(1.06	)		38,884		1.84			1.84			1.44			0.66			67
2015		10.28		(0.00	)		1.66			1.66			(0.30	)		–			(0.30	)		–		11.64		16.22			9,015		2.65			2.65			1.60			1.10			67
2014		11.67		0.17			(1.13	)		(0.96	)		(0.12	)		(0.31	)		(0.43	)		–		10.28		(8.22	)		4,045		2.45			2.45			1.69			1.26			62
2013		10.01		0.10			1.73			1.83			(0.17	)		–			(0.17	)		–		11.67		18.31			9,470		2.82			2.82			1.69			1.09			51
2012		8.26		0.12			1.81			1.93			(0.18	)		–			(0.18	)		–		10.01		23.40			6,444		3.54			3.54			1.69			1.18			103
Royce International Premier Fund–Consultant Class e
2017†	$	12.27	$	0.00		$	2.68		$	2.68		$	–		$	–		$	–		$	–	$	14.95		21.84	%1	$	6,344		2.70	%2		2.70	%2		2.19	%2		0.07	%2		23	%
2016		11.59		0.01			0.85			0.86			(0.17	)		(0.01	)		(0.18	)		–		12.27		7.49	1		5,086		2.70	2		2.70	2		2.19	2		(0.04	)2		67
Royce International Premier Fund–R Class e
2017†	$	9.06	$	0.03		$	1.97		$	2.00		$	–		$	–		$	–		$	–	$	11.06		22.08	%1	$	63		18.34	%2		18.34	%2		1.74	%2		0.53	%2		23	%
2016		8.64		(0.02	)		0.70			0.68			(0.25	)		(0.01	)		(0.26	)		–		9.06		7.96	1		51		28.36	2		28.35	2		1.74	2		0.31	2		67
Royce Low-Priced Stock Fund–Investment Class
2017†	$	8.26	$	0.01		$	0.08		$	0.09		$	–		$	–		$	–		$	–	$	8.35		1.09	%1	$	20,998		1.34	%2		1.34	%2		1.24	%2		0.19	%2		17	%
2016		7.77		0.04			1.24			1.28			(0.06	)		(0.73	)		(0.79	)		–		8.26		16.42			22,852		1.31			1.31			1.24			0.39			34
2015		9.46		0.00			(0.97	)		(0.97	)		–			(0.72	)		(0.72	)		–		7.77		(10.21	)		28,732		1.28			1.28			1.24			0.03			53
2014		13.60		0.06			(0.58	)		(0.52	)		(0.01	)		(3.61	)		(3.62	)		–		9.46		(3.15	)		50,371		1.25			1.25			1.24			0.46			29
2013		13.83		0.05			1.71			1.76			(0.05	)		(1.94	)		(1.99	)		–		13.60		13.17			88,568		1.37			1.37			1.24			0.18			16
2012		14.34		0.15			0.50			0.65			(0.25	)		(0.91	)		(1.16	)		–		13.83		4.79			255,335		1.26			1.26			1.24			0.86			8

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 97

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																														Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Low-Priced Stock Fund–Service Class
2017†	$	8.23	$	(0.00	)	$	0.08		$	0.08		$	–		$	–		$	–		$	–	$	8.31		0.97	%1	$	251,575		1.53	%2		1.53	%2		1.49	%2		(0.07	)%2		17	%
2016		7.75		0.02			1.23			1.25			(0.04	)		(0.73	)		(0.77	)		–		8.23		16.09			281,873		1.52			1.52			1.49			0.14			34
2015		9.46		(0.02	)		(0.97	)		(0.99	)		–			(0.72	)		(0.72	)		–		7.75		(10.42	)		316,475		1.49			1.49			1.47			(0.20	)		53
2014		13.62		0.03			(0.58	)		(0.55	)		–			(3.61	)		(3.61	)		–		9.46		(3.37	)		520,905		1.55			1.55			1.49			0.21			29
2013		13.84		(0.00	)		1.72			1.72			(0.00	)		(1.94	)		(1.94	)		–		13.62		12.91			1,008,207		1.65			1.65			1.49			(0.02	)		16
2012		14.31		0.11			0.49			0.60			(0.16	)		(0.91	)		(1.07	)		–		13.84		4.48			1,800,089		1.57			1.57			1.49			0.54			8
Royce Low-Priced Stock Fund–Institutional Class
2017†	$	8.28	$	0.00		$	0.08		$	0.08		$	–		$	–		$	–		$	–	$	8.36		0.97	%1	$	10,086		1.30	%2		1.30	%2		1.30	%2		0.11	%2		17	%
2016		7.78		0.06			1.23			1.29			(0.06	)		(0.73	)		(0.79	)		–		8.28		16.50			12,336		1.21			1.21			1.21			0.41			34
2015		9.46		0.01			(0.97	)		(0.96	)		(0.00	)		(0.72	)		(0.72	)		–		7.78		(10.05	)		39,004		1.11			1.11			1.11			0.14			53
2014		13.61		0.08			(0.58	)		(0.50	)		(0.04	)		(3.61	)		(3.65	)		–		9.46		(3.01	)		101,473		1.16			1.16			1.16			0.47			29
2013		13.84		0.05			1.71			1.76			(0.05	)		(1.94	)		(1.99	)		–		13.61		13.20			345,983		1.22			1.22			1.22			0.26			16
2012		14.36		0.16			0.49			0.65			(0.26	)		(0.91	)		(1.17	)		–		13.84		4.81			969,664		1.20			1.20			1.20			0.92			8
Royce Low-Priced Stock Fund–R Class
2017†	$	7.81	$	(0.02	)	$	0.08		$	0.06		$	–		$	–		$	–		$	–	$	7.87		0.77	%1	$	972		2.98	%2		2.98	%2		1.84	%2		(0.42	)%2		17	%
2016		7.38		(0.01	)		1.18			1.17			(0.01	)		(0.73	)		(0.74	)		–		7.81		15.83			1,036		2.82			2.82			1.84			(0.21	)		34
2015		9.08		(0.05	)		(0.93	)		(0.98	)		–			(0.72	)		(0.72	)		–		7.38		(10.74	)		1,132		2.78			2.78			1.84			(0.58	)		53
2014		13.27		(0.02	)		(0.56	)		(0.58	)		–			(3.61	)		(3.61	)		–		9.08		(3.72	)		1,892		2.21			2.21			1.84			(0.15	)		29
2013		13.58		(0.05	)		1.68			1.63			–			(1.94	)		(1.94	)		–		13.27		12.44			3,130		2.21			2.21			1.84			(0.37	)		16
2012		14.05		0.04			0.50			0.54			(0.10	)		(0.91	)		(1.01	)		–		13.58		4.10			5,823		2.05			2.05			1.84			0.22			8
Royce Micro-Cap Fund–Investment Class
2017†	$	11.92	$	(0.02	)	$	0.26		$	0.24		$	–		$	–		$	–		$	–	$	12.16		2.01	%1	$	176,672		1.52	%2		1.52	%2		1.49	%2		(0.29	)%2		17	%
2016		11.09		0.01			2.18			2.19			(0.06	)		(1.30	)		(1.36	)		–		11.92		19.74			192,731		1.48			1.48			1.48			0.03			38
2015		14.47		0.02			(1.96	)		(1.94	)		–			(1.44	)		(1.44	)		–		11.09		(13.32	)		219,272		1.51			1.51			1.51			0.15			41
2014		16.68		(0.08	)		(0.65	)		(0.73	)		–			(1.48	)		(1.48	)		–		14.47		(4.13	)		414,120		1.52			1.52			1.52			(0.49	)		18
2013		14.78		(0.08	)		3.19			3.11			(0.02	)		(1.19	)		(1.21	)		–		16.68		21.29			650,773		1.53			1.53			1.53			(0.52	)		22
2012		14.55		0.05			1.07			1.12			(0.01	)		(0.88	)		(0.89	)		–		14.78		7.93			740,364		1.47			1.47			1.47			0.29			15
Royce Micro-Cap Fund–Service Class
2017†	$	11.69	$	(0.02	)	$	0.24		$	0.22		$	–		$	–		$	–		$	–	$	11.91		1.88	%1	$	17,230		1.85	%2		1.85	%2		1.61	%2		(0.41	)%2		17	%
2016		10.90		(0.01	)		2.15			2.14			(0.05	)		(1.30	)		(1.35	)		–		11.69		19.59			17,343		1.83			1.83			1.61			(0.11	)		38
2015		14.26		0.00			(1.92	)		(1.92	)		–			(1.44	)		(1.44	)		–		10.90		(13.37	)		20,538		1.80			1.80			1.63			0.01			41
2014		16.48		(0.10	)		(0.65	)		(0.75	)		–			(1.48	)		(1.48	)		0.01		14.26		(4.24	)		38,645		1.77			1.77			1.66			(0.63	)		18
2013		14.61		(0.10	)		3.16			3.06			–			(1.19	)		(1.19	)		–		16.48		21.20			79,890		1.74			1.74			1.66			(0.66	)		22
2012		14.41		0.02			1.06			1.08			–			(0.88	)		(0.88	)		–		14.61		7.76			109,457		1.74			1.74			1.66			0.14			15

98 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																														Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Micro-Cap Fund–Consultant Class
2017†	$	9.41	$	(0.06	)	$	0.19		$	0.13		$	–		$	–		$	–		$	–	$	9.54		1.38	%1	$	27,996		2.59	%2		2.59	%2		2.59	%2		(1.40	)%2		17	%
2016		9.04		(0.09	)		1.76			1.67			–			(1.30	)		(1.30	)		–		9.41		18.48			33,622		2.53			2.53			2.53			(1.02	)		38
2015		12.23		(0.10	)		(1.65	)		(1.75	)		–			(1.44	)		(1.44	)		–		9.04		(14.21	)		41,024		2.54			2.54			2.54			(0.90	)		41
2014		14.48		(0.20	)		(0.57	)		(0.77	)		–			(1.48	)		(1.48	)		–		12.23		(5.03	)		75,868		2.48			2.48			2.48			(1.45	)		18
2013		13.08		(0.21	)		2.80			2.59			–			(1.19	)		(1.19	)		–		14.48		20.08			117,538		2.52			2.52			2.52			(1.51	)		22
2012		13.11		(0.10	)		0.95			0.85			–			(0.88	)		(0.88	)		–		13.08		6.77			120,871		2.55			2.55			2.55			(0.77	)		15
Royce Micro-Cap Opportunity Fund–Investment Class
2017†	$	17.19	$	(0.06	)	$	1.74		$	1.68		$	–		$	–		$	–		$	–	$	18.87		9.77	%1	$	48,487		1.26	%2		1.26	%2		1.24	%2		(0.70	)%2		38	%
2016		13.88		(0.08	)		3.39			3.31			–			–			–			–		17.19		23.85			45,135		1.30			1.30			1.24			(0.55	)		83
2015		16.52		(0.09	)		(2.55	)		(2.64	)		–			(0.00	)		(0.00	)		–		13.88		(15.98	)		34,437		1.39			1.39			1.25			(0.58	)		105
2014		17.93		(0.11	)		(0.81	)		(0.92	)		–			(0.51	)		(0.51	)		0.02		16.52		(4.97	)		18,221		1.56			1.56			1.28			(0.60	)		131
2013		12.81		(0.13	)		5.79			5.66			–			(0.55	)		(0.55	)		0.01		17.93		44.61			17,461		1.78			1.78			1.29			(0.80	)		129
2012		10.33		0.07			3.50			3.57			(0.13	)		(0.96	)		(1.09	)		–		12.81		35.14			3,198		0.29	2		0.29	2		0.25	2		0.64	2		196
Royce Micro-Cap Opportunity Fund–Service Class a
2017†	$	8.66	$	(0.04	)	$	0.88		$	0.84		$	–		$	–		$	–		$	–	$	9.50		9.70	%1	$	1,042		3.36	%2		3.36	%2		1.49	%2		(0.95	)%2		38	%
2016		7.01		(0.06	)		1.71			1.65			–			–			–			–		8.66		23.54			995		3.37			3.37			1.49			(0.81	)		83
2015		8.37		(0.07	)		(1.29	)		(1.36	)		–			(0.00	)		(0.00	)		–		7.01		(16.24	)		1,212		3.22			3.22			1.51			(0.86	)		105
2014		10.00		(0.04	)		(1.11	)		(1.15	)		–			(0.51	)		(0.51	)		0.03		8.37		(11.11	)1		939		10.50	2		10.50	2		1.53	2		(0.65	)2		131
Royce Opportunity Fund–Investment Class
2017†	$	12.85	$	(0.01	)	$	1.06		$	1.05		$	–		$	–		$	–		$	–	$	13.90		8.17	%1	$	755,381		1.18	%2		1.18	%2		1.18	%2		(0.11	)%2		20	%
2016		10.57		(0.02	)		3.19			3.17			–			(0.89	)		(0.89	)		–		12.85		29.86			751,184		1.19			1.19			1.19			(0.18	)		26
2015		13.46		(0.03	)		(1.80	)		(1.83	)		–			(1.06	)		(1.06	)		–		10.57		(13.57	)		746,052		1.17			1.17			1.17			(0.27	)		27
2014		15.54		(0.05	)		(0.09	)		(0.14	)		–			(1.94	)		(1.94	)		–		13.46		(0.48	)		1,284,044		1.14			1.14			1.14			(0.30	)		36
2013		11.95		(0.05	)		5.18			5.13			–			(1.54	)		(1.54	)		–		15.54		43.50			1,426,214		1.16			1.16			1.16			(0.36	)		39
2012		10.32		0.00			2.30			2.30			–			(0.67	)		(0.67	)		–		11.95		22.59			921,473		1.13			1.13			1.13			0.02			34
Royce Opportunity Fund–Service Class
2017†	$	12.02	$	(0.03	)	$	0.99		$	0.96		$	–		$	–		$	–		$	–	$	12.98		7.99	%1	$	95,270		1.55	%2		1.55	%2		1.49	%2		(0.41	)%2		20	%
2016		9.95		(0.05	)		3.01			2.96			–			(0.89	)		(0.89	)		–		12.02		29.61			73,517		1.53			1.53			1.49			(0.48	)		26
2015		12.80		(0.07	)		(1.72	)		(1.79	)		–			(1.06	)		(1.06	)		–		9.95		(13.96	)		100,918		1.49			1.49			1.49			(0.59	)		27
2014		14.92		(0.09	)		(0.09	)		(0.18	)		–			(1.94	)		(1.94	)		–		12.80		(0.74	)		155,085		1.47			1.47			1.47			(0.64	)		36
2013		11.55		(0.09	)		5.00			4.91			–			(1.54	)		(1.54	)		–		14.92		43.10			208,237		1.47			1.47			1.47			(0.67	)		39
2012		10.03		(0.04	)		2.23			2.19			–			(0.67	)		(0.67	)		–		11.55		22.14			205,084		1.46			1.46			1.46			(0.32	)		34

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 99

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																														Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Opportunity Fund–Consultant Class
2017†	$	10.71	$	(0.07	)	$	0.88		$	0.81		$	-		$	-		$	-		$	-	$	11.52		7.56	%1	$	20,134		2.27	%2		2.27	%2		2.27	%2		(1.20	)%2		20	%
2016		9.01		(0.12	)		2.71			2.59			-			(0.89	)		(0.89	)		-		10.71		28.59			21,116		2.28			2.28			2.28			(1.27	)		26
2015		11.79		(0.15	)		(1.57	)		(1.72	)		–			(1.06	)		(1.06	)		–		9.01		(14.56	)		19,464		2.26			2.26			2.26			(1.34	)		27
2014		14.02		(0.19	)		(0.10	)		(0.29	)		–			(1.94	)		(1.94	)		–		11.79		(1.61	)		20,518		2.24			2.24			2.24			(1.40	)		36
2013		11.01		(0.20	)		4.75			4.55			–			(1.54	)		(1.54	)		–		14.02		41.93			18,643		2.31			2.31			2.31			(1.51	)		39
2012		9.67		(0.13	)		2.14			2.01			–			(0.67	)		(0.67	)		–		11.01		21.09			11,930		2.36			2.36			2.36			(1.22	)		34
Royce Opportunity Fund–Institutional Class
2017†	$	13.08	$	0.00		$	1.08		$	1.08		$	-		$	-		$	-		$	-	$	14.16		8.26	%1	$	584,358		1.07	%2		1.07	%2		1.07	%2		0.00	%2		20	%
2016		10.74		(0.01	)		3.24			3.23			-			(0.89	)		(0.89	)		-		13.08		29.94			583,975		1.07			1.07			1.07			(0.06	)		26
2015		13.64		(0.02	)		(1.82	)		(1.84	)		–			(1.06	)		(1.06	)		–		10.74		(13.46	)		600,945		1.05			1.05			1.05			(0.15	)		27
2014		15.71		(0.03	)		(0.10	)		(0.13	)		–			(1.94	)		(1.94	)		–		13.64		(0.41	)		799,131		1.03			1.03			1.03			(0.20	)		36
2013		12.06		(0.03	)		5.23			5.20			(0.01	)		(1.54	)		(1.55	)		–		15.71		43.69			853,886		1.03			1.03			1.03			(0.23	)		39
2012		10.40		0.01			2.32			2.33			–			(0.67	)		(0.67	)		–		12.06		22.70			689,939		1.04			1.04			1.04			0.11			34
Royce Opportunity Fund–R Class
2017†	$	11.67	$	(0.04	)	$	0.96		$	0.92		$	-		$	-		$	-		$	-	$	12.59		7.88	%1	$	38,706		1.80	%2		1.80	%2		1.80	%2		(0.74	)%2		20	%
2016		9.72		(0.08	)		2.92			2.84			-			(0.89	)		(0.89	)		-		11.67		29.08			38,902		1.82			1.82			1.82			(0.81	)		26
2015		12.56		(0.11	)		(1.67	)		(1.78	)		–			(1.06	)		(1.06	)		–		9.72		(14.15	)		32,599		1.82			1.82			1.82			(0.90	)		27
2014		14.73		(0.13	)		(0.10	)		(0.23	)		–			(1.94	)		(1.94	)		–		12.56		(1.12	)		33,699		1.78			1.78			1.78			(0.93	)		36
2013		11.46		(0.14	)		4.95			4.81			–			(1.54	)		(1.54	)		–		14.73		42.56			22,730		1.82			1.82			1.82			(1.02	)		39
2012		9.98		(0.07	)		2.22			2.15			–			(0.67	)		(0.67	)		–		11.46		21.85			6,612		2.01			2.01			1.84			(0.62	)		34
Royce Opportunity Fund–K Class
2017†	$	10.60	$	(0.04	)	$	0.87		$	0.83		$	-		$	-		$	-		$	-	$	11.43		7.83	%1	$	6,654		1.76	%2		1.76	%2		1.76	%2		(0.70	%2		20	%
2016		8.88		(0.07	)		2.68			2.61			-			(0.89	)		(0.89	)		-		10.60		29.24			6,698		1.75			1.75			1.75			(0.74	)		26
2015		11.57		(0.08	)		(1.55	)		(1.63	)		–			(1.06	)		(1.06	)		–		8.88		(14.06	)		9,706		1.62			1.62			1.62			(0.73	)		27
2014		13.70		(0.10	)		(0.09	)		(0.19	)		–			(1.94	)		(1.94	)		–		11.57		(0.90	)		22,892		1.59			1.59			1.59			(0.75	)		36
2013		10.70		(0.08	)		4.62			4.54			–			(1.54	)		(1.54	)		–		13.70		43.07			17,927		1.46			1.46			1.46			(0.65	)		39
2012		9.33		(0.04	)		2.08			2.04			–			(0.67	)		(0.67	)		–		10.70		22.19			8,828		1.52			1.52			1.52			(0.36	)		34
Royce Pennsylvania Mutual Fund–Investment Class
2017†	$	11.02	$	0.02		$	0.51		$	0.53		$	-		$	-		$	-		$	-	$	11.55		4.81	%1	$	1,622,522		0.93	%2		0.93	%2		0.93	%2		0.34	%2		16	%
2016		9.33		0.07			2.41			2 .48			(0.04	)		(0.75	)		(0.79	)		-		11.02		26.47			1,671,848		0.92			0.92			0.92			0.60			18
2015		13.00		0.09			(1.58	)		(1.49	)		(0.10	)		(2.08	)		(2.18	)		–		9.33		(11.43	)		1,925,419		0.92			0.92			0.92			0.58			21
2014		14.73		0.06			(0.21	)		(0.15	)		(0.04	)		(1.54	)		(1.58	)		–		13.00		(0.70	)		3,869,579		0.91			0.91			0.91			0.35			21
2013		11.50		0.03			3.99			4.02			(0.00	)		(0.79	)		(0.79	)		–		14.73		35.25			5,033,318		0.92			0.92			0.92			0.24			26
2012		10.76		0.15			1.39			1.54			(0.15	)		(0.65	)		(0.80	)		–		11.50		14.58			4,232,988		0.89			0.89			0.89			1.19			22

100 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																														Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Pennsylvania Mutual Fund–Service Class
2017†	$	11.03	$	(0.00	)	$	0.51		$	0.51		$	-		$	-		$	-		$	-	$	11.54		4.62	%1	$	78,287		1.26	%2		1.26	%2		1.26	%2		(0.00	)%2		16	%
2016		9.35		0.03			2.41			2.44			(0.01	)		(0.75	)		(0.76	)		-		11.03		25.99			100,598		1.26			1.26			1.26			0.27			18
2015		12.96		0.05			(1.56	)		(1.51	)		(0.02	)		(2.08	)		(2.10	)		-		9.35		(11.57	)		102,341		1.23			1.23			1.23			0.29			21
2014		14.69		0.00			(0.19	)		(0.19	)		-			(1.54	)		(1.54	)		-		12.96		(1.04	)		333,548		1.23			1.23			1.23			0.03			21
2013		11.51		(0.01	)		3.98			3.97			-			(0.79	)		(0.79	)		-		14.69		34.77			591,534		1.25			1.25			1.25			(0.08	)		26
2012		10.75		0.10			1.40			1.50			(0.09	)		(0.65	)		(0.74	)		-		11.51		14.15			473,624		1.24			1.24			1.24			0.90			22
Royce Pennsylvania Mutual Fund–Consultant Class
2017†	$	8.90	$	(0.03	)	$	0.40		$	0.37		$	-		$	-		$	-		$	-	$	9.27		4.16	%1	$	370,697		1.95	%2		1.95	%2		1.95	%2		(0.68	)%2		16	%
2016		7.70		(0.03	)		1.98			1.95			-			(0.75	)		(0.75	)		-		8.90		25.20			402,114		1.94			1.94			1.94			(0.42	)		18
2015		11.16		(0.05	)		(1.33	)		(1.38	)		-			(2.08	)		(2.08	)		-		7.70		(12.31	)		416,862		1.94			1.94			1.94			(0.44	)		21
2014		12.96		(0.08	)		(0.18	)		(0.26	)		-			(1.54	)		(1.54	)		-		11.16		(1.72	)		676,347		1.91			1.91			1.91			(0.64	)		21
2013		10.29		(0.09	)		3.55			3.46			-			(0.79	)		(0.79	)		-		12.96		33.94			788,017		1.94			1.94			1.94			(0.78	)		26
2012		9.69		0.01			1.25			1.26			(0.01	)		(0.65	)		(0.66	)		-		10.29		13.27			654,642		1.97			1.97			1.97			0.12			22
Royce Pennsylvania Mutual Fund–Institutional Class
2017†	$	11.04	$	0.02		$	0.51		$	0.53		$	-		$	-		$	-		$	-	$	11.57		4.80	%1	$	238,644		0.84	%2		0.84	%2		0.84	%2		0.43	%2		16	%
2016		9.34		0.09			2.41			2.50			(0.05	)		(0.75	)		(0.80	)		-		11.04		26.65			245,009		0.83			0.83			0.83			0.63			18
2015		13.02		0.11			(1.60	)		(1.49	)		(0.11	)		(2.08	)		(2.19	)		-		9.34		(11.34	)		498,374		0.81			0.81			0.81			0.68			21
2014		14.75		0.07			(0.20	)		(0.13	)		(0.06	)		(1.54	)		(1.60	)		-		13.02		(0.58	)		802,517		0.79			0.79			0.79			0.48			21
2013		11.52		0.05			3.99			4.04			(0.02	)		(0.79	)		(0.81	)		-		14.75		35.34			818,212		0.79			0.79			0.79			0.40			26
2012		10.79		0.13			1.43			1.56			(0.18	)		(0.65	)		(0.83	)		-		11.52		14.72			488,052		0.80			0.80			0.80			1.53			22
Royce Pennsylvania Mutual Fund–R Class
2017†	$	10.44	$	(0.02	)	$	0.47		$	0.45		$	-		$	-		$	-		$	-	$	10.89		4.31	%1	$	16,215		1.64	%2		1.64	%2		1.64	%2		(0.38	)%2		16	%
2016		8.90		(0.01	)		2.30			2.29			-			(0.75	)		(0.75	)		-		10.44		25.62			17,059		1.63			1.63			1.63			(0.11	)		18
2015		12.50		(0.02	)		(1.50	)		(1.52	)		-			(2.08	)		(2.08	)		-		8.90		(12.10	)		18,675		1.65			1.65			1.65			(0.15	)		21
2014		14.26		(0.03	)		(0.19	)		(0.22	)		-			(1.54	)		(1.54	)		-		12.50		(1.28	)		36,622		1.48			1.48			1.48			(0.21	)		21
2013		11.22		(0.05	)		3.88			3.83			-			(0.79	)		(0.79	)		-		14.26		34.42			44,094		1.56			1.56			1.56			(0.39	)		26
2012		10.50		0.07			1.35			1.42			(0.05	)		(0.65	)		(0.70	)		-		11.22		13.79			32,977		1.50			1.50			1.50			0.70			22
Royce Pennsylvania Mutual Fund–K Class
2017†	$	9.11	$	(0.03	)	$	0.42		$	0.39		$	-		$	-		$	-		$	-	$	9.50		4.28	%1	$	2,722		1.94	%2		1.94	%2		1.94	%2		(0.67	)%2		16	%
2016		7.86		(0.02	)		2.02			2.00			-			(0.75	)		(0.75	)		-		9.11		25.32			3,200		1.81			1.81			1.81			(0.28	)		18
2015		11.30		(0.00	)		(1.36	)		(1.36	)		-			(2.08	)		(2.08	)		-		7.86		(11.95	)		4,140		1.51			1.51			1.51			(0.01	)		21
2014		13.04		(0.02	)		(0.18	)		(0.20	)		-			(1.54	)		(1.54	)		-		11.30		(1.24	)		10,707		1.42			1.42			1.42			(0.15	)		21
2013		10.29		(0.02	)		3.56			3.54			-			(0.79	)		(0.79	)		-		13.04		34.72			11,685		1.37			1.37			1.37			(0.19	)		26
2012		9.68		0.09			1.24			1.33			(0.07	)		(0.65	)		(0.72	)		-		10.29		14.04			8,849		1.26			1.26			1.26			0.94			22

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 101

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																														Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Premier Fund–Investment Class
2017†	$	15.51	$	(0.00	)	$	1.35		$	1.35		$	-		$	-		$	-		$	-	$	16.86		8.70	%1	$	1,768,985		1.16	%2		1.16	%2		1.16	%2		(0.06	)%2		3	%
2016		14.28		0.06			3.25			3.31			(0.04	)		(2.04	)		(2.08	)		-		15.51		23.00			1,768,580		1.16			1.16			1.16			0.35			15
2015		19.72		0.13			(2.11	)		(1.98	)		(0.13	)		(3.33	)		(3.46	)		-		14.28		(9.90	)		2,015,905		1.13			1.13			1.13			0.49			13
2014		22.11		0.08			(0.32	)		(0.24	)		(0.08	)		(2.07	)		(2.15	)		-		19.72		(0.86	)		4,097,961		1.10			1.10			1.10			0.34			9
2013		19.16		0.00			5.22			5.22			-			(2.27	)		(2.27	)		-		22.11		27.73			5,096,793		1.09			1.09			1.09			0.02			11
2012		18.52		0.24			1.85			2.09			(0.24	)		(1.21	)		(1.45	)		-		19.16		11.45			4,629,272		1.06			1.06			1.06			1.19			7
Royce Premier Fund–Service Class
2017†	$	15.13	$	(0.03	)	$	1.31		$	1.28		$	-		$	-		$	-		$	-	$	16.41		8.46	%1	$	51,848		1.50	%2		1.50	%2		1.49	%2		(0.38	)%2		3	%
2016		13.98		0.00			3.19			3.19			-			(2.04	)		(2.04	)		-		15.13		22.63			46,550		1.50			1.50			1.49			0.02			15
2015		19.33		0.06			(2.04	)		(1.98	)		(0.04	)		(3.33	)		(3.37	)		-		13.98		(10.13	)		61,969		1.44			1.43			1.43			0.23			13
2014		21.70		0.01			(0.31	)		(0.30	)		-			(2.07	)		(2.07	)		-		19.33		(1.16	)		172,810		1.38			1.38			1.38			0.05			9
2013		18.89		(0.07	)		5.15			5.08			-			(2.27	)		(2.27	)		-		21.70		27.39			318,860		1.38			1.38			1.38			(0.33	)		11
2012		18.23		0.19			1.81			2.00			(0.13	)		(1.21	)		(1.34	)		-		18.89		11.14			560,553		1.33			1.33			1.32			0.92			7
Royce Premier Fund–Consultant Class
2017†	$	12.46	$	(0.07	)	$	1.08		$	1.01		$	-		$	-		$	-		$	-	$	13.47		8.11	%1	$	31,081		2.22	%2		2.22	%2		2.22	%2		(1.12	)%2		3	%
2016		11.89		(0.09	)		2.70			2.61			-			(2.04	)		(2.04	)		-		12.46		21.72			31,353		2.22			2.22			2.22			(0.72	)		15
2015		17.09		(0.09	)		(1.78	)		(1.87	)		-			(3.33	)		(3.33	)		-		11.89		(10.80	)		32,982		2.17			2.17			2.17			(0.55	)		13
2014		19.58		(0.13	)		(0.29	)		(0.42	)		-			(2.07	)		(2.07	)		-		17.09		(1.92	)		56,884		2.10			2.10			2.10			(0.66	)		9
2013		17.35		(0.20	)		4.70			4.50			-			(2.27	)		(2.27	)		-		19.58		26.47			66,712		2.13			2.13			2.13			(1.02	)		11
2012		16.87		0.02			1.69			1.71			(0.02	)		(1.21	)		(1.23	)		-		17.35		10.24			60,568		2.12			2.12			2.12			0.13			7
Royce Premier Fund–Institutional Class
2017†	$	15.72	$	0.01		$	1.36		$	1.37		$	-		$	-		$	-		$	-	$	17.09		8.72	%1	$	269,806		1.07	%2		1.07	%2		1.07	%2		0.07	%2		3	%
2016		14.44		0.08			3.30			3.38			(0.06	)		(2.04	)		(2.10	)		-		15.72		23.20			250,826		1.07			1.07			1.07			0.44			15
2015		19.91		0.16			(2.14	)		(1.98	)		(0.16	)		(3.33	)		(3.49	)		-		14.44		(9.82	)		294,477		1.02			1.02			1.02			0.60			13
2014		22.31		0.12			(0.34	)		(0.22	)		(0.11	)		(2.07	)		(2.18	)		-		19.91		(0.79	)		594,463		0.98			0.98			0.98			0.45			9
2013		19.30		0.03			5.25			5.28			-			(2.27	)		(2.27	)		-		22.31		27.85			989,100		0.98			0.98			0.98			0.13			11
2012		18.66		0.26			1.87			2.13			(0.28	)		(1.21	)		(1.49	)		-		19.30		11.57			866,277		0.98			0.98			0.98			1.30			7
Royce Premier Fund–W Class
2017†	$	15.57	$	(0.01	)	$	1.35		$	1 .34		$	-		$	-		$	-		$	-	$	16.91		8.61	%1	$	147,283		1.19	%2		1.19	%2		1.19	%2		(0.08	)%2		3	%
2016		14.32		0.06			3.27			3.33			(0.04	)		(2.04	)		(2.08	)		-		15.57		23.06			147,937		1.17			1.17			1.17			0.34			15
2015		19.76		0.14			(2.12	)		(1.98	)		(0.13	)		(3.33	)		(3.46	)		-		14.32		(9.88	)		192,785		1.12			1.12			1.12			0.51			13
2014		22.16		0.09			(0.33	)		(0.24	)		(0.09	)		(2.07	)		(2.16	)		-		19.76		(0.89	)		446,380		1.07			1.07			1.07			0.36			9
2013		19.20		0.00			5.23			5.23			-			(2.27	)		(2.27	)		-		22.16		27.73			552,732		1.09			1.09			1.09			0.01			11
2012		18.57		0.25			1.85			2.10			(0.26	)		(1.21	)		(1.47	)		-		19.20		11.46			533,763		1.05			1.05			1.05			1.19			7

102 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																														Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Premier Fund–R Class
2017†	$	14.47	$	(0.06	)	$	1.26		$	1 .20		$	-		$	-		$	-		$	-	$	15.67		8.29	%1	$	13,058		1.85	%2		1.85	%2		1.85	%2		(0.75	)%2		3	%
2016		13.49		(0.05	)		3.07			3.02			-			(2.04	)		(2.04	)		-		14.47		22.18			13,889		1.84			1.84			1.84			(0.33	)		15
2015		18.82		(0.03	)		(1.97	)		(2.00	)		-			(3.33	)		(3.33	)		-		13.49		(10.50	)		16,129		1.78			1.78			1.78			(0.16	)		13
2014		21.25		(0.06	)		(0.30	)		(0.36	)		-			(2.07	)		(2.07	)		-		18.82		(1.48	)		27,355		1.71			1.71			1.71			(0.28	)		9
2013		18.61		(0.13	)		5.04			4.91			-			(2.27	)		(2.27	)		-		21.25		26.88			32,577		1.74			1.74			1.74			(0.63	)		11
2012		17.99		0.11			1.80			1.91			(0.08	)		(1.21	)		(1.29	)		-		18.61		10.75			28,632		1.68			1.68			1.68			0.57			7
Royce Small-Cap Leaders Fund–Investment Class
2017†	$	7.12	$	0.02		$	0.07		$	0.09		$	-		$	-		$	-		$	-	$	7.21		1.26	%1	$	42,866		1.23	%2		1.23	%2		1.23	%2		0.53	%2		32	%
2016		6.28		0.05			1.58			1.63			(0.06	)		(0.73	)		(0.79	)		-		7.12		25.84			48,128		1.23			1.23			1.23			0.62			65
2015		8.74		0.03			(1.09	)		(1.06	)		(0.04	)		(1.36	)		(1.40	)		-		6.28		(12.21	)		50,410		1.24			1.24			1.24			0.40			64
2014		10.11		(0.00	)		(0.32	)		(0.32	)		-			(1.05	)		(1.05	)		-		8.74		(2.95	)		68,898		1.22			1.22			1.22			(0.03	)		39
2013		8.85		(0.00	)		2.71			2.71			(0.03	)		(1.42	)		(1.45	)		-		10.11		31.24			60,156		1.20			1.20			1.20			(0.07	)		31
2012		8.74		0.12			0.88			1.00			(0.15	)		(0.74	)		(0.89	)		-		8.85		11.78			68,395		1.19			1.19			1.19			1.31			13
Royce Small-Cap Leaders Fund–Service Class
2017†	$	7.03	$	0.01		$	0.07		$	0.08		$	-		$	-		$	-		$	-	$	7.11		1.14	%1	$	45,448		1.59	%2		1.59	%2		1.49	%2		0.27	%2		32	%
2016		6.21		0.03			1.56			1.59			(0.04	)		(0.73	)		(0.77	)		-		7.03		25.51			50,523		1.58			1.58			1.49			0.37			65
2015		8.65		0.02			(1.09	)		(1.07	)		(0.01	)		(1.36	)		(1.37	)		-		6.21		(12.50	)		57,729		1.54			1.54			1.49			0.18			64
2014		10.05		(0.04	)		(0.31	)		(0.35	)		-			(1.05	)		(1.05	)		-		8.65		(3.26	)		149,736		1.52			1.52			1.50			(0.39	)		39
2013		8.81		(0.04	)		2.70			2.66			(0.00	)		(1.42	)		(1.42	)		-		10.05		30.85			231,879		1.50			1.50			1.48			(0.36	)		31
2012		8.67		0.11			0.86			0.97			(0.09	)		(0.74	)		(0.83	)		-		8.81		11.52			220,674		1.46			1.46			1.42			1.03			13
Royce Small-Cap Leaders Fund–R Class
2017†	$	9.73	$	(0.00	)	$	0.10		$	0.10		$	-		$	-		$	-		$	-	$	9.83		1.03	%1	$	2,032		2.49	%2		2.48	%2		1.84	%2		(0.08	)%2		32	%
2016		8.36		(0.00	)		2.11			2.11			(0.01	)		(0.73	)		(0.74	)		-		9.73		25.18			1,871		2.74			2.74			1.84			(0.01	)		65
2015		11.14		(0.02	)		(1.40	)		(1.42	)		-			(1.36	)		(1.36	)		-		8.36		(12.84	)		1,681		2.75			2.75			1.84			(0.22	)		64
2014		12.67		(0.09	)		(0.39	)		(0.48	)		-			(1.05	)		(1.05	)		-		11.14		(3.61	)		1,983		2.23			2.23			1.84			(0.73	)		39
2013		10.84		(0.09	)		3.34			3.25			-			(1.42	)		(1.42	)		-		12.67		30.45			2,807		2.28			2.28			1.84			(0.72	)		31
2012		10.46		0.05			1.07			1.12			-			(0.74	)		(0.74	)		-		10.84		10.95			2,554		2.57			2.57			1.84			0.46			13
Royce Small-Cap Value Fund–Investment Class
2017†	$	10.03	$	0.02		$	(0.44	)	$	(0.42	)	$	-		$	-		$	-		$	-	$	9.61		(4.19	)%1	$	60,223		1.26	%2		1.26	%2		1.24	%2		0.42	%2		33	%
2016		8.74		0.08			1.79			1.87			(0.08	)		(0.50	)		(0.58	)		-		10.03		21.37			72,863		1.24			1.24			1.24			0.72			56
2015		11.81		0.10			(1.43	)		(1.33	)		(0.09	)		(1.65	)		(1.74	)		-		8.74		(11.25	)		77,821		1.23			1.23			1.23			0.69			60
2014		13.52		0.04			(0.05	)		(0.01	)		(0.03	)		(1.67	)		(1.70	)		-		11.81		0.27			140,163		1.18			1.18			1.18			0.32			38
2013		11.37		0.02			3.13			3.15			(0.03	)		(0.97	)		(1.00	)		-		13.52		28.06			196,854		1.21			1.21			1.21			0.11			51
2012		10.97		0.15			0.92			1.07			(0.14	)		(0.53	)		(0.67	)		-		11.37		9.88			206,316		1.19			1.19			1.19			1.22			25

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 103

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																														Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Small-Cap Value Fund–Service Class
2017†	$	9.98	$	0.01		$	(0.43	)	$	(0.42	)	$	-		$	-		$	-		$	-	$	9.56		(4.21	)%1	$	171,077		1.52	%2		1.52	%2		1.49	%2		0.17	%2		33	%
2016		8.70		0.05			1.79			1.84			(0.06	)		(0.50	)		(0.56	)		-		9.98		21.06			213,067		1.49			1.49			1.48			0.48			56
2015		11.76		0.06			(1.41	)		(1.35	)		(0.06	)		(1.65	)		(1.71	)		-		8.70		(11.51	)		252,814		1.48			1.48			1.48			0.45			60
2014		13.48		0.01			(0.06	)		(0.05	)		-			(1.67	)		(1.67	)		-		11.76		(0.02	)		477,999		1.45			1.45			1.45			0.04			38
2013		11.34		(0.02	)		3.13			3.11			-			(0.97	)		(0.97	)		-		13.48		27.76			680,674		1.48			1.48			1.48			(0.17	)		51
2012		10.94		0.12			0.91			1.03			(0.10	)		(0.53	)		(0.63	)		-		11.34		9.56			831,673		1.45			1.45			1.45			0.90			25
Royce Small-Cap Value Fund–Consultant Class
2017†	$	8.98	$	(0.03	)	$	(0.39	)	$	(0.42	)	$	-		$	-		$	-		$	-	$	8.56		(4.68	)%1	$	13,917		2.32	%2		2.32	%2		2.32	%2		(0.66	)%2		33	%
2016		7.89		(0.03	)		1.62			1.59			-			(0.50	)		(0.50	)		-		8.98		20.10			16,484		2.28			2.28			2.28			(0.33	)		56
2015		10.87		(0.04	)		(1.29	)		(1.33	)		-			(1.65	)		(1.65	)		-		7.89		(12.24	)		18,404		2.27			2.27			2.27			(0.36	)		60
2014		12.68		(0.09	)		(0.05	)		(0.14	)		-			(1.67	)		(1.67	)		-		10.87		(0.74	)		26,716		2.21			2.21			2.21			(0.71	)		38
2013		10.81		(0.12	)		2.96			2.84			-			(0.97	)		(0.97	)		-		12.68		26.61			31,604		2.29			2.29			2.29			(0.97	)		51
2012		10.46		0.02			0.89			0.91			(0.03	)		(0.53	)		(0.56	)		-		10.81		8.77			33,480		2.26			2.26			2.26			0.15			25
Royce Small-Cap Value Fund–Institutional Class
2017†	$	10.03	$	0.03		$	(0.44	)	$	(0.41	)	$	-		$	-		$	-		$	-	$	9.62		(4.09	)%1	$	102,373		1.09	%2		1.09	%2		1.09	%2		0.56	%2		33	%
2016		8.74		0.10			1.79			1.89			(0.10	)		(0.50	)		(0.60	)		-		10.03		21.54			127,741		1.08			1.08			1.08			0.86			56
2015		11.81		0.10			(1.40	)		(1.30	)		(0.12	)		(1.65	)		(1.77	)		-		8.74		(11.05	)		148,652		1.06			1.06			1.06			0.83			60
2014		13.53		0.06			(0.06	)		0.00			(0.05	)		(1.67	)		(1.72	)		-		11.81		0.35			196,543		1.05			1.05			1.05			0.46			38
2013		11.38		0.04			3.13			3.17			(0.05	)		(0.97	)		(1.02	)		-		13.53		28.22			219,667		1.05			1.05			1.05			0.27			51
2012		10.98		0.17			0.92			1.09			(0.16	)		(0.53	)		(0.69	)		-		11.38		10.04			202,643		1.05			1.05			1.05			1.41			25
Royce Small-Cap Value Fund–R Class
2017†	$	9.63	$	(0.01	)	$	(0.42	)	$	(0.43	)	$	-		$	-		$	-		$	-	$	9.20		(4.47	)%1	$	15,261		1.87	%2		1.87	%2		1.87	%2		(0.22	)%2		33	%
2016		8.42		0.01			1.73			1.74			(0.03	)		(0.50	)		(0.53	)		-		9.63		20.60			18,059		1.85			1.85			1.85			0.11			56
2015		11.43		0.01			(1.35	)		(1.34	)		(0.02	)		(1.65	)		(1.67	)		-		8.42		(11.71	)		19,200		1.83			1.83			1.83			0.09			60
2014		13.19		(0.03	)		(0.06	)		(0.09	)		-			(1.67	)		(1.67	)		-		11.43		(0.34	)		31,043		1.77			1.77			1.77			(0.26	)		38
2013		11.16		(0.06	)		3.06			3.00			-			(0.97	)		(0.97	)		-		13.19		27.21			37,409		1.83			1.83			1.83			(0.52	)		51
2012		10.78		0.07			0.91			0.98			(0.07	)		(0.53	)		(0.60	)		-		11.16		9.18			37,679		1.85			1.85			1.85			0.59			25
Royce Small-Cap Value Fund–K Class
2017†	$	6.93	$	(0.01	)	$	(0.30	)	$	(0.31	)	$	-		$	-		$	-		$	-	$	6.62		(4.47	)%1	$	2,053		2.49	%2		2.49	%2		1.99	%2		(0.33	)%2		33	%
2016		6.17		0.00			1.27			1.27			(0.01	)		(0.50	)		(0.51	)		-		6.93		20.52			2,966		1.95			1.95			1.95			(0.04	)		56
2015		8.90		0.02			(1.06	)		(1.04	)		(0.04	)		(1.65	)		(1.69	)		-		6.17		(11.69	)		6,026		1.80			1.80			1.80			0.11			60
2014		10.65		(0.02	)		(0.06	)		(0.08	)		-			(1.67	)		(1.67	)		-		8.90		(0.32	)		9,363		1.67			1.67			1.67			(0.18	)		38
2013		9.14		(0.03	)		2.51			2.48			-			(0.97	)		(0.97	)		-		10.65		27.55			16,285		1.62			1.62			1.62			(0.30	)		51
2012		8.95		0.09			0.75			0.84			(0.12	)		(0.53	)		(0.65	)		-		9.14		9.49			18,209		1.53			1.53			1.53			0.98			25

104 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																														Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Small/Mid-Cap Premier Fund–Investment Class
2017†	$	14.64	$	0.03		$	0.81		$	0.84		$	-		$	-		$	-		$	-	$	15.48		5.74	%1	$	85,045		0.98	%2		0.98	%2		0.98	%2		0.34	%2		31	%
2016		12.87		0.04			2.30			2.34			(0.06	)		(0.51	)		(0.57	)		-		14.64		18.12			88,378		1.02			1.02			1.02			0.22			67
2015		15.21		0.12			(1.09	)		(0.97	)		(0.11	)		(1.26	)		(1.37	)		-		12.87		(6.33	)		89,766		1.10			1.10			1.10			0.54			66
2014		16.24		0.10			(0.25	)		(0.15	)		(0.05	)		(0.83	)		(0.88	)		-		15.21		(0.81	)		160,558		1.09			1.09			1.09			0.66			35
2013		14.48		0.03			3.71			3.74			(0.05	)		(1.93	)		(1.98	)		-		16.24		26.37			117,306		1.13			1.13			1.13			0.36			79
2012		13.07		0.10			1.80			1.90			(0.13	)		(0.36	)		(0.49	)		-		14.48		14.70			40,374		1.20			1.20			1.20			0.94			39
Royce Small/Mid-Cap Premier Fund–Service Class
2017†	$	14.60	$	0.01		$	0.82		$	0.83		$	-		$	-		$	-		$	-	$	15.43		5.68	%1	$	122,446		1.32	%2		1.31	%2		1.20	%2		0.12	%2		31	%
2016		12.84		0.00			2.30			2.30			(0.03	)		(0.51	)		(0.54	)		-		14.60		17.84			120,254		1.36			1.36			1.25			(0.01	)		67
2015		15.17		0.05			(1.05	)		(1.00	)		(0.07	)		(1.26	)		(1.33	)		-		12.84		(6.53	)		120,381		1.46			1.46			1.35			0.31			66
2014		16.20		0.05			(0.25	)		(0.20	)		-			(0.83	)		(0.83	)		-		15.17		(1.14	)		175,433		1.43			1.43			1.40			0.32			35
2013		14.45		0.00			3.68			3.68			(0.00	)		(1.93	)		(1.93	)		-		16.20		25.99			223,533		1.45			1.45			1.42			0.02			79
2012		13.00		0.08			1.78			1.86			(0.05	)		(0.36	)		(0.41	)		-		14.45		14.39			203,112		1.46			1.46			1.45			0.56			39
Royce Small/Mid-Cap Premier Fund–Consultant Class
2017†	$	10.44	$	(0.04	)	$	0.58		$	0.54		$	-		$	-		$	-		$	-	$	10.98		5.17	%1	$	10,456		2.24	%2		2.24	%2		2.09	%2		(0.78	)%2		31	%
2016		9.37		(0.09	)		1.67			1.58			-			(0.51	)		(0.51	)		-		10.44		16.78			11,643		2.28			2.28			2.14			(0.89	)		67
2015		11.47		(0.06	)		(0.78	)		(0.84	)		-			(1.26	)		(1.26	)		-		9.37		(7.31	)		11,369		2.41			2.41			2.24			(0.58	)		66
2014		12.57		(0.07	)		(0.20	)		(0.27	)		-			(0.83	)		(0.83	)		-		11.47		(2.02	)		13,338		2.31			2.31			2.31			(0.59	)		35
2013		11.68		(0.12	)		2.94			2.82			-			(1.93	)		(1.93	)		-		12.57		24.73			15,942		2.37			2.37			2.37			(0.93	)		79
2012		10.64		(0.04	)		1.44			1.40			-			(0.36	)		(0.36	)		-		11.68		13.30			13,909		2.41			2.41			2.41			(0.39	)		39
Royce Small/Mid-Cap Premier Fund–R Class
2017†	$	9.54	$	(0.02	)	$	0.53		$	0.51		$	-		$	-		$	-		$	-	$	10.05		5.35	%1	$	1,936		2.24	%2		2.24	%2		1.69	%2		(0.38	)%2		31	%
2016		8.56		(0.05	)		1.54			1.49			-			(0.51	)		(0.51	)		-		9.54		17.32			1,945		2.27			2.27			1.74			(0.51	)		67
2015		10.60		(0.02	)		(0.73	)		(0.75	)		(0.03	)		(1.26	)		(1.29	)		-		8.56		(7.00	)		2,339		2.20			2.20			1.84			(0.19	)		66
2014		11.63		(0.02	)		(0.18	)		(0.20	)		-			(0.83	)		(0.83	)		-		10.60		(1.59	)		3,727		1.89			1.89			1.84			(0.14	)		35
2013		10.86		(0.05	)		2.75			2.70			-			(1.93	)		(1.93	)		-		11.63		25.51			6,805		1.90			1.90			1.84			(0.39	)		79
2012		9.87		0.02			1.34			1.36			(0.01	)		(0.36	)		(0.37	)		-		10.86		13.88			4,832		1.95			1.95			1.84			0.17			39
Royce Smaller-Companies Growth Fund–Investment Class
2017†	$	11.22	$	(0.04	)	$	1.32		$	1.28		$	-		$	-		$	-		$	-	$	12.50		11.41	%1	$	97,658		1.23	%2		1.23	%2		1.23	%2		(0.64	)%2		30	%
2016		11.36		(0.05	)		1.17			1.12			-			(1.26	)		(1.26	)		-		11.22		9.67			98,962		1.15			1.15			1.15			(0.41	)		59
2015		14.36		(0.06	)		(0.19	)		(0.25	)		-			(2.75	)		(2.75	)		-		11.36		(1.59	)		139,979		1.32			1.32			1.24			(0.38	)		45
2014		17.03		(0.07	)		0.68			0.61			-			(3.28	)		(3.28	)		-		14.36		4.04			295,412		1.33			1.33			1.33			(0.40	)		52
2013		13.90		(0.09	)		4.57			4.48			(0.00	)		(1.35	)		(1.35	)		-		17.03		32.59			244,269		1.37			1.37			1.37			(0.59	)		45
2012		12.04		(0.02	)		1.88			1.86			-			-			-			-		13.90		15.45			228,016		1.27			1.27			1.27			(0.14	)		32

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 105

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																														Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Smaller-Companies Growth Fund–Service Class
2017†	$	11.01	$	(0.05	)	$	1.29		$	1.24		$	-		$	-		$	-		$	-	$	12.25		11.26	%1	$	274,267		1.53	%2		1.53	%2		1.49	%2		(0.91	)%2		30	%
2016		11.20		(0.08	)		1.15			1.07			-			(1.26	)		(1.26	)		-		11.01		9.37			284,640		1.51			1.51			1.49			(0.74	)		59
2015		14.23		(0.08	)		(0.20	)		(0.28	)		-			(2.75	)		(2.75	)		-		11.20		(1.82	)		408,744		1.47			1.47			1.45			(0.58	)		45
2014		16.93		(0.09	)		0.67			0.58			-			(3.28	)		(3.28	)		-		14.23		3.89			572,899		1.44			1.44			1.42			(0.51	)		52
2013		13.83		(0.11	)		4.56			4.45			-			(1.35	)		(1.35	)		-		16.93		32.52			835,379		1.48			1.48			1.46			(0.69	)		45
2012		12.00		(0.04	)		1.87			1.83			-			-			-			-		13.83		15.25			966,735		1.45			1.45			1.44			(0.33	)		32
Royce Smaller-Companies Growth Fund–Consultant Class
2017†	$	9.63	$	(0.08	)	$	1.12		$	1.04		$	-		$	-		$	-		$	-	$	10.67		10.80	%1	$	10,953		2.41	%2		2.41	%2		2.24	%2		(1.65	)%2		30	%
2016		10.01		(0.14	)		1.02			0.88			-			(1.26	)		(1.26	)		-		9.63		8.58			10,593		2.35			2.35			2.24			(1.50	)		59
2015		13.12		(0.18	)		(0.18	)		(0.36	)		-			(2.75	)		(2.75	)		-		10.01		(2.61	)		14,411		2.32			2.32			2.24			(1.36	)		45
2014		15.99		(0.22	)		0.63			0.41			-			(3.28	)		(3.28	)		-		13.12		3.05			17,158		2.29			2.29			2.29			(1.37	)		52
2013		13.24		(0.24	)		4.34			4.10			-			(1.35	)		(1.35	)		-		15.99		31.31			22,614		2.36			2.36			2.36			(1.58	)		45
2012		11.60		(0.15	)		1.79			1.64			-			-			-			-		13.24		14.14			19,618		2.37			2.37			2.37			(1.21	)		32
Royce Smaller-Companies Growth Fund–Institutional Class
2017†	$	11.35	$	(0.04	)	$	1.34		$	1.30		$	-		$	-		$	-		$	-	$	12.65		11.45	%1	$	12,402		1.18	%2		1.18	%2		1.18	%2		(0.60	)%2		30	%
2016		11.48		(0.05	)		1.18			1.13			-			(1.26	)		(1.26	)		-		11.35		9.66			20,523		1.15			1.15			1.15			(0.41	)		59
2015		14.46		(0.03	)		(0.20	)		(0.23	)		-			(2.75	)		(2.75	)		-		11.48		(1.45	)		39,763		1.10			1.10			1.10			(0.22	)		45
2014		17.09		(0.03	)		0.68			0.65			-			(3.28	)		(3.28	)		-		14.46		4.26			38,718		1.06			1.06			1.06			(0.16	)		52
2013		13.94		(0.03	)		4.57			4.54			(0.04	)		(1.35	)		(1.39	)		-		17.09		32.99			142,923		1.07			1.07			1.07			(0.30	)		45
2012		12.05		0.01			1.88			1.89			-			-			-			-		13.94		15.68			216,572		1.06			1.06			1.06			0.08			32
Royce Smaller-Companies Growth Fund–R Class
2017†	$	10.28	$	(0.07	)	$	1.21		$	1.14		$	-		$	-		$	-		$	-	$	11.42		11.09	%1	$	656		3.38	%2		3.38	%2		1.84	%2		(1.27	)%2		30	%
2016		10.57		(0.11	)		1.08			0.97			-			(1.26	)		(1.26	)		-		10.28		8.97			793		3.33			3.33			1.84			(1.10	)		59
2015		13.64		(0.14	)		(0.18	)		(0.32	)		-			(2.75	)		(2.75	)		-		10.57		(2.20	)		886		2.99			2.99			1.84			(0.97	)		45
2014		16.43		(0.15	)		0.64			0.49			-			(3.28	)		(3.28	)		-		13.64		3.45			1,360		2.35			2.35			1.84			(0.93	)		52
2013		13.51		(0.16	)		4.43			4.27			-			(1.35	)		(1.35	)		-		16.43		31.95			1,605		2.41			2.41			1.84			(1.06	)		45
2012		11.77		(0.09	)		1.83			1.74			-			-			-			-		13.51		14.78			1,221		2.35			2.35			1.84			(0.66	)		32
Royce Special Equity Fund–Investment Class
2017†	$	22.02	$	0.06		$	(0.14	)	$	(0.08	)	$	-		$	-		$	-		$	-	$	21.94		(0.36	)%1	$	1,134,093		1.16	%2		1.16	%2		1.16	%2		0.55	%2		11	%
2016		17.94		0.21			5.57			5.78			(0.21	)		(1.49	)		(1.70	)		-		22.02		32.21			1,225,095		1.17			1.17			1.17			0.99			29
2015		22.86		0.22			(3.04	)		(2.82	)		(0.24	)		(1.86	)		(2.10	)		-		17.94		(12.36	)		1,098,106		1.15			1.15			1.15			0.80			15
2014		25.02		0.13			0.09			0.22			(0.12	)		(2.26	)		(2.38	)		-		22.86		1.09			1,950,211		1.12			1.12			1.12			0.47			21
2013		21.13		0.03			6.09			6.12			(0.03	)		(2.20	)		(2.23	)		-		25.02		29.36			2,510,346		1.13			1.13			1.13			0.13			28
2012		19.70		0.46			2.53			2.99			(0.46	)		(1.10	)		(1.56	)		-		21.13		15.36			2,048,091		1.13			1.13			1.13			2.20			31

106 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																														Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Special Equity Fund–Service Class
2017†	$	21.98	$	0.04		$	(0.15	)	$	(0.11	)	$	-		$	-		$	-		$	-	$	21.87		(0.50	)%1	$	108,088		1.49	%2		1.49	%2		1.39	%2		0.33	%2		11	%
2016		17.92		0.16			5.56			5.72			(0.17	)		(1.49	)		(1.66	)		-		21.98		31.92			128,102		1.50			1.50			1.39			0.77			29
2015		22.81		0.17			(3.03	)		(2.86	)		(0.17	)		(1.86	)		(2.03	)		-		17.92		(12.55	)		112,315		1.47			1.47			1.39			0.57			15
2014		24.97		0.06			0.09			0.15			(0.05	)		(2.26	)		(2.31	)		-		22.81		0.80			233,791		1.44			1.44			1.39			0.20			21
2013		21.12		(0.03	)		6.08			6.05			-			(2.20	)		(2.20	)		-		24.97		29.04			335,952		1.45			1.45			1.39			(0.13	)		28
2012		19.66		0.42			2.52			2.94			(0.38	)		(1.10	)		(1.48	)		-		21.12		15.10			250,915		1.43			1.43			1.39			1.90			31
Royce Special Equity Fund–Consultant Class
2017†	$	20.16	$	(0.05	)	$	(0.13	)	$	(0.18	)	$	-		$	-		$	-		$	-	$	19.98		(0.89	)%1	$	47,245		2.18	%2		2.18	%2		2.18	%2		(0.46	)%2		11	%
2016		16.57		(0.01	)		5.13			5.12			(0.04	)		(1.49	)		(1.53	)		-		20.16		30.91			50,514		2.20			2.20			2.20			(0.04	)		29
2015		21.27		(0.05	)		(2.76	)		(2.81	)		(0.03	)		(1.86	)		(1.89	)		-		16.57		(13.23	)		42,427		2.18			2.18			2.18			(0.24	)		15
2014		23.57		(0.13	)		0.09			(0.04	)		-			(2.26	)		(2.26	)		-		21.27		0.04			63,981		2.14			2.14			2.14			(0.56	)		21
2013		20.20		(0.21	)		5.78			5.57			-			(2.20	)		(2.20	)		-		23.57		27.97			71,333		2.17			2.17			2.17			(0.90	)		28
2012		18.88		0.23			2.42			2.65			(0.23	)		(1.10	)		(1.33	)		-		20.20		14.20			57,755		2.18			2.18			2.18			1.13			31
Royce Special Equity Fund–Institutional Class
2017†	$	21.84	$	0.07		$	(0.14	)	$	(0.07	)	$	-		$	-		$	-		$	-	$	21.77		(0.32	)%1	$	242,481		1.07	%2		1.07	%2		1.07	%2		0.62	%2		11	%
2016		17.80		0.23			5.53			5.76			(0.23	)		(1.49	)		(1.72	)		-		21.84		32.35			206,270		1.07			1.07			1.07			1.10			29
2015		22.71		0.33			(3.12	)		(2.79	)		(0.26	)		(1.86	)		(2.12	)		-		17.80		(12.27	)		208,952		1.04			1.04			1.04			1.02			15
2014		24.88		0.14			0.10			0.24			(0.15	)		(2.26	)		(2.41	)		-		22.71		1.17			639,723		1.02			1.02			1.02			0.56			21
2013		21.02		0.06			6.06			6.12			(0.06	)		(2.20	)		(2.26	)		-		24.88		29.51			700,200		1.01			1.01			1.01			0.26			28
2012		19.63		0.49			2.51			3.00			(0.51	)		(1.10	)		(1.61	)		-		21.02		15.46			571,388		1.02			1.02			1.02			2.28			31
Royce Special Equity Multi-Cap Fund–Investment Class f
2017†	$	13.90	$	0.07		$	0.78		$	0.85		$	-		$	-		$	-		$	-	$	14.75		6.12	%1	$	37,210		1.04	%2		1.04	%2		0.99	%2		0.97	%2		14	%
2016		12.34		0.17			1.55			1.72			(0.16	)		-			(0.16	)		-		13.90		13.92			34,858		1.02			1.02			0.97			1.15			50
2015		15.55		0.40			(2.48	)		(2.08	)		(0.35	)		(0.78	)		(1.13	)		-		12.34		(13.40	)		43,999		1.01			1.01			0.99			1.49			31
2014		14.92		0.10			1.30			1.40			(0.11	)		(0.66	)		(0.77	)		-		15.55		9.53			123,545		0.97			0.97			0.96			0.95			39
2013		11.64		0.12			4.11			4.23			(0.12	)		(0.83	)		(0.95	)		-		14.92		36.62			62,387		1.16			1.16			1.15			0.93			44
2012		11.54		0.12			0.22			0.34			(0.14	)		(0.10	)		(0.24	)		-		11.64		3.00	1		34,375		1.19	2		1.19	2		1.16	2		1.55	2		14
Royce Special Equity Multi-Cap Fund–Service Class
2017†	$	13.95	$	0.05		$	0.78		$	0.83		$	-		$	-		$	-		$	-	$	14.78		5.95	%1	$	29,092		1.39	%2		1.39	%2		1.24	%2		0.70	%2		14	%
2016		12.38		0.13			1.57			1.70			(0.13	)		-			(0.13	)		-		13.95		13.69			37,495		1.34			1.34			1.23			0.89			50
2015		15.60		0.26			(2.39	)		(2.13	)		(0.31	)		(0.78	)		(1.09	)		-		12.38		(13.64	)		47,630		1.29			1.29			1.23			1.21			31
2014		14.96		0.10			1.27			1.37			(0.07	)		(0.66	)		(0.73	)		-		15.60		9.28			94,878		1.34			1.34			1.24			0.66			39
2013		11.68		0.09			4.12			4.21			(0.10	)		(0.83	)		(0.93	)		-		14.96		36.26			78,233		1.61			1.61			1.38			0.69			44
2012		10.64		0.13			1.10			1.23			(0.09	)		(0.10	)		(0.19	)		-		11.68		11.62			43,690		1.51			1.51			1.36			1.15			14

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 107

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																														Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Special Equity Multi-Cap Fund–Consultant Class g
2017†	$	9.12	$	(0.00	)	$	0.50		$	0.50		$	-		$	-		$	-		$	-	$	9.62		5.48	%1	$	4,334		2.40	%2		2.40	%2		1.99	%2		(0.05	)%2		14	%
2016		8.15		0.02			1.03			1.05			(0.08	)		-			(0.08	)		-		9.12		12.89			4,986		2.38			2.38			1.99			0.12			50
2015		10.72		0.09			(1.63	)		(1.54	)		(0.25	)		(0.78	)		(1.03	)		-		8.15		(14.35	)		6,825		2.19			2.19			1.99			0.50			31
2014		10.00		(0.04	)		1.48			1.44			(0.06	)		(0.66	)		(0.72	)		-		10.72		14.57	1		9,223		2.54	2		2.54	2		1.99	2		(0.05	)2		39
Royce Special Equity Multi-Cap Fund–Institutional Class h
2017†	$	13.89	$	0.08		$	0.77		$	0.85		$	-		$	-		$	-		$	-	$	14.74		6.12	%1	$	39,686		0.99	%2		0.99	%2		0.89	%2		1.07	%2		14	%
2016		12.33		0.16			1.57			1.73			(0.17	)		-			(0.17	)		-		13.89		14.04			37,339		0.99			0.99			0.89			1.22			50
2015		15.56		0.34			(2.41	)		(2.07	)		(0.38	)		(0.78	)		(1.16	)		-		12.33		(13.32	)		36,864		0.94			0.94			0.89			1.56			31
2014		14.92		0.12			1.30			1.42			(0.12	)		(0.66	)		(0.78	)		-		15.56		9.64			75,941		0.93			0.93			0.89			1.01			39
2013		11.64		0.15			4.10			4.25			(0.14	)		(0.83	)		(0.97	)		-		14.92		36.73			48,063		1.10			1.10			1.04			1.02			44
2012		11.83		0.10			(0.03	)		0.07			(0.16	)		(0.10	)		(0.26	)		-		11.64		0.61	1		30,905		1.21	2		1.21	2		1.04	2		1.76	2		14
Royce Total Return Fund–Investment Class
2017†	$	13.68	$	0.07		$	0.30		$	0.37		$	(0.07	)	$	-		$	(0.07	)	$	-	$	13.98		2.71	%1	$	1,728,996		1.19	%2		1.19	%2		1.19	%2		1.06	%2		6	%
2016		11.91		0.15			2.93			3.08			(0.22	)		(1.09	)		(1.31	)		-		13.68		25.86			1,835,927		1.19			1.19			1.19			1.08			16
2015		14.74		0.17			(1.23	)		(1.06	)		(0.12	)		(1.65	)		(1.77	)		-		11.91		(7.19	)		1,850,309		1.15			1.15			1.15			1.18			11
2014		16.47		0.17			0.00			0.17			(0.28	)		(1.62	)		(1.90	)		-		14.74		1.34			3,077,951		1.13			1.13			1.13			0.95			18
2013		13.63		0.16			4.24			4.40			(0.14	)		(1.42	)		(1.56	)		-		16.47		32.76			3,657,904		1.13			1.13			1.13			1.00			21
2012		12.68		0.26			1.54			1.80			(0.23	)		(0.62	)		(0.85	)		-		13.63		14.42			3,044,664		1.10			1.10			1.10			1.89			17
Royce Total Return Fund–Service Class
2017†	$	13.98	$	0.06		$	0.30		$	0.36		$	(0.06	)	$	-		$	(0.06	)	$	-	$	14.28		2.54	%1	$	112,301		1.46	%2		1.46	%2		1.46	%2		0.79	%2		6	%
2016		12.12		0.11			3.00			3.11			(0.16	)		(1.09	)		(1.25	)		-		13.98		25.60			142,606		1.46			1.46			1.46			0.80			16
2015		14.98		0.13			(1.25	)		(1.12	)		(0.09	)		(1.65	)		(1.74	)		-		12.12		(7.48	)		137,594		1.43			1.43			1.43			0.90			11
2014		16.61		0.12			0.01			0.13			(0.14	)		(1.62	)		(1.76	)		-		14.98		1.08			232,814		1.42			1.42			1.42			0.60			18
2013		13.72		0.11			4.27			4.38			(0.07	)		(1.42	)		(1.49	)		-		16.61		32.38			493,111		1.48			1.48			1.48			0.68			21
2012		12.71		0.22			1.55			1.77			(0.14	)		(0.62	)		(0.76	)		-		13.72		14.11			264,528		1.39			1.39			1.39			1.58			17
Royce Total Return Fund–Consultant Class
2017†	$	14.07	$	0.01		$	0.30		$	0.31		$	-		$	-		$	-		$	-	$	14.38		2.20	%1	$	248,060		2.17	%2		2.17	%2		2.17	%2		0.08	%2		6	%
2016		12.15		0.01			3.01			3.02			(0.01	)		(1.09	)		(1.10	)		-		14.07		24.73			267,083		2.16			2.16			2.16			0.11			16
2015		15.05		0.03			(1.26	)		(1.23	)		(0.02	)		(1.65	)		(1.67	)		-		12.15		(8.15	)		262,131		2.16			2.16			2.16			0.18			11
2014		16.68		(0.00	)		0.02			0.02			(0.03	)		(1.62	)		(1.65	)		-		15.05		0.37			356,731		2.12			2.12			2.12			(0.04	)		18
2013		13.81		(0.00	)		4.29			4.29			-			(1.42	)		(1.42	)		-		16.68		31.38			404,498		2.15			2.15			2.15			(0.02	)		21
2012		12.77		0.11			1.56			1.67			(0.01	)		(0.62	)		(0.63	)		-		13.81		13.19			331,116		2.20			2.20			2.20			0.80			17

108 | The Royce Funds 2017 Semiannual Report to Shareholders THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Financial Highlights

This table is presented to show selected data for a share outstanding throughout each year or other indicated period and to assist shareholders in evaluating a Fund’s performance for the periods presented. Per share amounts have been determined on the basis of the weighted average number of shares outstanding during the period.

																													Ratio of Expenses to Average Net Assets									Ratio of Net
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)		Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency			Total from Investment Operations			Distributions from Net Investment Income			Distributions from Net Realized Gain on Investments and Foreign Currency			Total Distributions			Shareholder Redemption Fees		Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in thousands)		Prior to Fee Waivers and Balance Credits			Prior to Fee Waivers			Net of Fee Waivers			Investment Income (Loss) to Average Net Assets			Portfolio Turnover Rate
Royce Total Return Fund–Institutional Class
2017†	$	13.52	$	0.08	$	0.30		$	0.38		$	(0.08	)	$	-		$	(0.08	)	$	-	$	13.82		2.81	%1	$	344,933		1.06	%2		1.06	%2		1.06	%2		1.20	%2		6	%
2016		11.78		0.18		2.90			3.08			(0.25	)		(1.09	)		(1.34	)		-		13.52		26.13			420,375		1.05			1.05			1.05			1.22			16
2015		14.61		0.18		(1.22	)		(1.04	)		(0.14	)		(1.65	)		(1.79	)		-		11.78		(7.17	)		374,555		1.03			1.03			1.03			1.28			11
2014		16.35		0.18		0.02			0.20			(0.32	)		(1.62	)		(1.94	)		-		14.61		1.51			572,662		1.00			1.00			1.00			1.09			18
2013		13.55		0.18		4.21			4.39			(0.17	)		(1.42	)		(1.59	)		-		16.35		32.93			621,447		1.00			1.00			1.00			1.15			21
2012		12.64		0.27		1.54			1.81			(0.28	)		(0.62	)		(0.90	)		-		13.55		14.48			408,551		1.02			1.02			1.02			2.02			17
Royce Total Return Fund–W Class
2017†	$	13.67	$	0.07	$	0.30		$	0.37		$	(0.07	)	$	-		$	(0.07	)	$	-	$	13.97		2.67	%1	$	85,376		1.25	%2		1.25	%2		1.25	%2		1.01	%2		6	%
2016		11.88		0.17		2.91			3.08			(0.20	)		(1.09	)		(1.29	)		-		13.67		25.96			79,702		1.20			1.20			1.20			1.03			16
2015		14.72		0.16		(1.23	)		(1.07	)		(0.12	)		(1.65	)		(1.77	)		-		11.88		(7.28	)		118,167		1.18			1.18			1.18			1.17			11
2014		16.45		0.15		0.03			0.18			(0.29	)		(1.62	)		(1.91	)		-		14.72		1.35			261,829		1.13			1.13			1.13			0.97			18
2013		13.62		0.16		4.23			4.39			(0.14	)		(1.42	)		(1.56	)		-		16.45		32.71			249,035		1.15			1.15			1.15			0.99			21
2012		12.69		0.26		1.54			1.80			(0.25	)		(0.62	)		(0.87	)		-		13.62		14.41			171,603		1.12			1.12			1.12			1.97			17
Royce Total Return Fund–R Class
2017†	$	14.09	$	0.03	$	0.31		$	0.34		$	(0.03	)	$	-		$	(0.03	)	$	-	$	14.40		2.41	%1	$	52,170		1.78	%2		1.78	%2		1.78	%2		0.47	%2		6	%
2016		12.19		0.07		3.00			3.07			(0.08	)		(1.09	)		(1.17	)		-		14.09		25.14			53,896		1.78			1.78			1.78			0.49			16
2015		15.07		0.08		(1.25	)		(1.17	)		(0.06	)		(1.65	)		(1.71	)		-		12.19		(7.79	)		50,684		1.77			1.77			1.77			0.56			11
2014		16.73		0.07		0.01			0.08			(0.12	)		(1.62	)		(1.74	)		-		15.07		0.73			65,501		1.72			1.72			1.72			0.37			18
2013		13.82		0.06		4.30			4.36			(0.03	)		(1.42	)		(1.45	)		-		16.73		31.95			72,541		1.75			1.75			1.75			0.39			21
2012		12.79		0.18		1.55			1.73			(0.08	)		(0.62	)		(0.70	)		-		13.82		13.66			48,797		1.74			1.74			1.74			1.36			17
Royce Total Return Fund–K Class
2017†	$	9.07	$	0.03	$	0.21		$	0.24		$	(0.03	)	$	-		$	(0.03	)	$	-	$	9.28		2.59	%1	$	36,200		1.62	%2		1.62	%2		1.62	%2		0.63	%2		6	%
2016		8.19		0.08		2.01			2.09			(0.12	)		(1.09	)		(1.21	)		-		9.07		25.41			40,952		1.55			1.55			1.55			0.67			16
2015		10.71		0.09		(0.90	)		(0.81	)		(0.06	)		(1.65	)		(1.71	)		-		8.19		(7.54	)		62,597		1.49			1.49			1.49			0.85			11
2014		12.40		0.11		(0.03	)		0.08			(0.15	)		(1.62	)		(1.77	)		-		10.71		1.01			91,271		1.47			1.47			1.47			0.55			18
2013		10.53		0.07		3.27			3.34			(0.05	)		(1.42	)		(1.47	)		-		12.40		32.20			196,344		1.50			1.50			1.50			0.62			21
2012		9.90		0.17		1.21			1.38			(0.13	)		(0.62	)		(0.75	)		-		10.53		14.08			163,412		1.43			1.43			1.43			1.51			17

^†Six months ended June 30, 2017 (unaudited).

¹Not annualized

²Annualized

^aThe Class commenced operations on March 21, 2014.

^bThe Class commenced operations on September 4, 2012.

^cThe Class commenced operations on January 5, 2016.

^dThe Class commenced operations on January 22, 2014.

^eThe Class commenced operations on February 26, 2016.

^fThe Class commenced operations on March 1, 2012.

^gThe Class commenced operations on January 27, 2014.

^hThe Class commenced operations on April 18, 2012.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS The Royce Funds 2017 Semiannual Report to Shareholders | 109

Notes to Financial Statements (unaudited)

Summary of Significant Accounting Policies:

    Royce Dividend Value Fund, Royce Global Financial Services Fund, Royce International Micro-Cap Fund, Royce International Premier Fund, Royce Low-Priced Stock Fund, Royce Micro-Cap Fund, Royce Micro-Cap Opportunity Fund, Royce Opportunity Fund, Royce Pennsylvania Mutual Fund, Royce Premier Fund, Royce Small-Cap Leaders Fund, Royce Small-Cap Value Fund, Royce Small/Mid-Cap Premier Fund, Royce Smaller-Companies Growth Fund, Royce Special Equity Fund, Royce Special Equity Multi-Cap Fund and Royce Total Return Fund (the “Fund” or “Funds”), are the seventeen series of The Royce Fund (the “Trust”), a diversified open-end management investment company organized as a Delaware statutory trust. Effective May 1, 2017, Royce Heritage Fund became Royce Small/Mid-Cap Premier Fund.

Classes of shares have equal rights as to earnings and assets, except that each class may bear different fees and expenses for distribution, shareholder servicing, registration and shareholder reports, and receive different compensating balance credits and expense reimbursements. Investment income, realized and unrealized capital gains or losses on investments and foreign currency, and expenses other than those attributable to a specific class are allocated to each class of shares based on its relative net assets.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

Each 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”.

At June 30, 2017, officers, employees of Royce & Associates (“Royce”), Fund trustees, the Royce retirement plans and other affiliates owned more than 10% of the following Funds:

Royce International Micro-Cap Fund	50%
Royce Micro-Cap Opportunity Fund	15%

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 Funds value their 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 Trust’s Board of Trustees, 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, a Fund may fair value the security. The Funds use 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 a 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 each 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 Schedules 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.

110 | The Royce Funds 2017 Semiannual Report to Shareholders

VALUATION OF INVESTMENTS (continued):
    The following is a summary of the inputs used to value each Fund’s investments as of June 30, 2017. For a detailed breakout of common stocks by sector classification or country, please refer to the Schedules of Investments.

	LEVEL 1		LEVEL 2		LEVEL 3			TOTAL
Royce Dividend Value Fund
Common Stocks	$	197,573,087	$	–		$	–		$	197,573,087
Cash Equivalents		–		1,678,000			–			1,678,000
Royce Global Financial Services Fund
Common Stocks		50,197,807		28,759			–			50,226,566
Cash Equivalents		–		999,000			–			999,000
Royce International Micro-Cap Fund
Common Stocks		6,989,666		–			–			6,989,666
Cash Equivalents		–		413,000			–			413,000
Royce International Premier Fund
Common Stocks		89,207,188		–			–			89,207,188
Cash Equivalents		–		4,994,000			–			4,994,000
Royce Low-Priced Stock Fund
Common Stocks		276,070,789		1,832,338			0			277,903,127
Cash Equivalents		17,969,507		6,579,000			–			24,548,507
Royce Micro-Cap Fund
Common Stocks		213,316,196		170,610			865,628			214,352,434
Cash Equivalents		10,516,862		7,888,000			–			18,404,862
Royce Micro-Cap Opportunity Fund
Common Stocks		47,302,045		376,034			–			47,678,079
Cash Equivalents		–		2,662,000			–			2,662,000
Royce Opportunity Fund
Common Stocks		1,387,855,176		1,715,668			–			1,389,570,844
Cash Equivalents		92,992,860		109,895,000			–			202,887,860
Royce Pennsylvania Mutual Fund
Common Stocks		2,307,690,504		7,223,576			–			2,314,914,080
Cash Equivalents		89,501,412		29,850,000			–			119,351,412
Royce Premier Fund
Common Stocks		2,103,669,065		–			–			2,103,669,065
Cash Equivalents		13,674,170		167,266,000			–			180,940,170
Royce Small-Cap Leaders Fund
Common Stocks		84,518,059		–			–			84,518,059
Cash Equivalents		991,866		5,869,000			–			6,860,866
Royce Small-Cap Value Fund
Common Stocks		325,581,920		–			–			325,581,920
Cash Equivalents		6,553,425		39,850,000			–			46,403,425
Royce Small/Mid-Cap Premier Fund
Common Stocks		203,550,702		–			194,317			203,745,019
Cash Equivalents		4,217,261		20,316,000			–			24,533,261
Royce Smaller-Companies Growth Fund
Common Stocks		361,511,045		6,709,060			–			368,220,105
Cash Equivalents		41,138,740		27,192,000			–			68,330,740
Royce Special Equity Fund
Common Stocks		1,354,754,546		39,083,500			–			1,393,838,046
Cash Equivalents		–		138,963,000			–			138,963,000
Royce Special Equity Multi-Cap Fund
Common Stocks		100,471,083		–			–			100,471,083
Cash Equivalents		–		10,308,000			–			10,308,000
Royce Total Return Fund
Common Stocks		2,506,594,104		24,460,367			0			2,531,054,471
Corporate Bond		–		4,224,394			–			4,224,394
Cash Equivalents		6,419,985		67,993,000			–			74,412,985

The Royce Funds 2017 Semiannual Report to Shareholders | 111

Notes to Financial Statements (unaudited) (continued)

VALUATION OF INVESTMENTS (continued):

Certain securities have transferred in and out of Level 1 and Level 2 measurements during the reporting period. The Funds recognize transfers between levels as of the end of the reporting period. For the six months ended June 30, 2017, the following Funds had securities transfer from Level 1 to Level 2 and from Level 2 to Level 1 within the fair value hierarchy:

	TRANSFERS FROM		TRANSFERS FROM
	LEVEL 1 TO LEVEL 2		LEVEL 2 TO LEVEL 1
Royce Dividend Value Fund	$	–	$	39,738,757
Royce Global Financial Services Fund		–		11,871,335
Royce International Micro-Cap Fund		–		3,958,368
Royce International Premier Fund		–		75,530,622
Royce Low-Priced Stock Fund		–		17,396,010
Royce Micro-Cap Fund		–		5,899,752
Royce Micro-Cap Opportunity Fund		376,034		–
Royce Opportunity Fund		1,702,607		–
Royce Pennsylvania Mutual Fund		7,223,576		59,731,739
Royce Premier Fund		–		49,751,727
Royce Small-Cap Leaders Fund		–		2,627,466
Royce Small/Mid-Cap Premier Fund		–		5,014,081
Royce Total Return Fund		–		116,024,019

Level 3 Reconciliation:

REALIZED AND

UNREALIZED

BALANCE AS OF 12/31/16

PURCHASES

SALES

TRANSFERS IN

GAIN (LOSS)1

BALANCE AS OF 6/30/17

Royce Low-Priced Stock Fund

Common Stocks

$

0

$

–

$

–

$

–

$

–

$

0

Royce Micro-Cap Fund

Common Stocks

865,628

0

–

–

–

865,628

Royce Small/Mid-Cap Premier Fund

Common Stocks

–

0

–

–

194,317

194,317

Royce Total Return Fund

Common Stocks

0

–

–

–

–

0

¹ The 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.

The following table summarizes the valuation techniques used and unobservable inputs approved by the Valuation Committee to determine the fair value of certain, material Level 3 investments. The table does not include Level 3 investments with values derived utilizing prices from prior transactions or third party pricing information with adjustments (e.g. broker quotes, pricing services, net asset values).

	FAIR VALUE AT								IMPACT TO VALUATION FROM
	6/30/17		VALUATION TECHNIQUE(S)		UNOBSERVABLE INPUT(S)		RANGE AVERAGE		AN INCREASE IN INPUT1
Royce Micro-Cap Fund
				Discounted Present Value
Common Stocks	$	865,628		Balance Sheet Analysis		Liquidity Discount		30%-40%		Decrease
Royce Small/Mid-Cap Premier Fund
				Estimated Net Proceeds		Corporate Estimate
Common Stocks		194,317		from Asset Auction		Contained in 8K Filing		N/A		Increase

¹ This column represents the directional change in the fair value of the Level 3 investments that would result in an increase from the corresponding unobservable input. A decrease to the unobservable input would have the opposite effect. Significant increases and decreases in these unobservable inputs in isolation could result in significantly higher or lower fair value measurements.

REPURCHASE AGREEMENTS:
    The Funds may enter into repurchase agreements with institutions that the Funds’ investment adviser has determined are creditworthy. Each 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 each Fund to dispose of its underlying securities. The remaining contractual maturities of repurchase agreements held by the Funds at June 30, 2017 are overnight and continuous.

112 | The Royce Funds 2017 Semiannual Report to Shareholders

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 each 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 Funds loan securities through a lending agent to qualified institutional investors for the purpose of realizing additional income. Collateral for the Funds 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 Funds and any additional required collateral is delivered to the Funds on the next business day. The Funds retain 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. Loans of securities generally do not have stated maturity dates, and the Funds may recall a security at any time. The Funds’ 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.

    The following table presents by financial instrument, a Fund’s assets and liabilities net of related collateral held by the Fund at and June 30, 2017:

	GROSS AMOUNT OF ASSETS AND
	LIABILITIES IN THE STATEMENTS OF
	ASSETS AND LIABILITIES1		SECURITIES ON LOAN		NET AMOUNT
Royce Low-Priced Stock Fund
Collateral on Loaned Securities/Securities on Loan	$	17,969,507	$	(17,102,776)	$	866,731
Royce Micro-Cap Fund
Collateral on Loaned Securities/Securities on Loan		10,516,862		(9,889,001)		627,861
Royce Opportunity Fund
Collateral on Loaned Securities/Securities on Loan		92,992,860		(90,713,276)		2,279,584
Royce Pennsylvania Mutual Fund
Collateral on Loaned Securities/Securities on Loan		89,501,412		(87,354,679)		2,146,733
Royce Premier Fund
Collateral on Loaned Securities/Securities on Loan		13,674,170		(13,545,585)		128,585
Royce Small-Cap Leaders Fund
Collateral on Loaned Securities/Securities on Loan		991,866		(976,862)		15,004
Royce Small-Cap Value Fund
Collateral on Loaned Securities/Securities on Loan		6,553,425		(6,459,221)		94,204
Royce Small/Mid-Cap Premier Fund
Collateral on Loaned Securities/Securities on Loan		4,217,261		(4,137,574)		79,687
Royce Smaller-Companies Growth Fund
Collateral on Loaned Securities/Securities on Loan		41,138,740		(39,964,689)		1,174,051
Royce Total Return Fund
Collateral on Loaned Securities/Securities on Loan		6,419,985		(6,187,714)		232,271

¹ Absent an event of default, assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities.

DISTRIBUTIONS AND TAXES:
    As qualified regulated investment companies under Subchapter M of the Internal Revenue Code, the Funds are not subject to income taxes to the extent that each Fund distributes substantially all of its taxable income for its fiscal year.

Royce Dividend Value Fund and Royce Total Return Fund pay any dividends from net investment income quarterly and make any distributions from net realized gains annually in December. The other Funds pay any dividends and capital gain distributions annually in December. Dividends from net investment income are determined at a class level and distributions from capital gains are determined at a Fund level. 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.

The Royce Funds 2017 Semiannual Report to Shareholders | 113

Notes to Financial Statements (unaudited) (continued)

CAPITAL GAINS TAXES:

The Funds are subject to a tax imposed on short-term capital gains on securities of issuers domiciled in certain countries. The Funds record 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 Statements 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. Premiums 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 Funds incur direct and indirect expenses. Expenses directly attributable to a Fund are charged to the Fund’ 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 under an administration agreement and are included in administrative and office facilities and legal expenses. The Trust has adopted a deferred fee agreement that allows the Trustees to defer the receipt of all or a portion of trustees’ fees otherwise payable. The deferred fees are invested in certain Royce Funds until distributed in accordance with the agreement.

COMPENSATING BALANCE CREDITS:

The Funds have arrangements with their custodian bank and transfer agent, whereby a portion of the custodian’s fee and transfer agent’s fee is paid indirectly by credits earned on a Fund’s cash on deposit with the bank and transfer agent. These deposit arrangements are an alternative to purchasing overnight investments. Conversely, a Fund pays interest to the custodian on any cash overdrafts, to the extent they are not offset by credits earned on positive cash balances.

LINE OF CREDIT:

The Funds, along with certain other Royce Funds, participate in a $75 million line of credit (“Credit Agreement”) to be used for temporary or emergency purposes. This revolving Credit Agreement expires on October 13, 2017. Pursuant to the Credit Agreement, each participating Fund is liable only for principal and interest payments related to borrowings made by that Fund. Borrowings under the Credit Agreement bear interest at a rate equal to the higher of the federal funds rate or One-Month LIBOR rate. The Funds did not utilize the line of credit during the six months ended June 30, 2017.

Capital Share Transactions (in dollars):

						SHARES ISSUED FOR REINVESTMENT										NET INCREASE (DECREASE) FROM
	SHARES SOLD					OF DISTRIBUTIONS				SHARES REDEEMED						CAPITAL SHARE TRANSACTIONS
	Six Months Ended					Six Months Ended				Six Months Ended						Six Months Ended
	6/30/17			Period Ended		6/30/17		Period Ended		6/30/17			Period Ended			6/30/17			Period Ended
	(unaudited)			12/31/16		(unaudited)		12/31/16		(unaudited)			12/31/16			(unaudited)			12/31/16
Royce Dividend Value Fund
Investment Class	$	12,234,505	$		18,958,290	$	530,292	$	9,175,565	$	(21,341,874	)	$	(49,583,548	)	$	(8,577,077	)	$	(21,449,693	)
Service Class		3,138,534			7,065,296		393,908		9,959,042		(28,922,415	)		(76,162,628	)		(25,389,973	)		(59,138,290	)
Consultant Class		21,246			145,757		2,252		121,151		(131,276	)		(612,404	)		(107,778	)		(345,496	)
Institutional Class		117,445			73,405		6,248		85,945		(15,998	)		(24,719	)		107,695			134,631
Royce Global Financial Services Fund
Service Class		8,798,524			10,004,674		–		314,467		(12,253,712	)		(22,967,471	)		(3,455,188	)		(12,648,330	)
Institutional Class		485,900			5,237,088		–		62,041		(406,605	)		–			79,295			5,299,129
Royce International Micro-Cap Fund
Service Class		536,809			187,420		–		92,479		(186,024	)		(594,454	)		350,785			(314,555	)
Royce International Premier Fund
Investment Class		16,524,771			6,174,749		–		405,500		(3,217,531	)		(14,199,466	)		13,307,240			(7,619,217	)
Service Class		7,246,244			4,838,193		–		841,078		(5,913,343	)		(12,025,961	)		1,332,901			(6,346,690	)
Consultant Class		626,083			378,145		–		69,250		(474,777	)		(2,062,532	)		151,306			(1,615,137	)
R Class		581			10,139		–		1,431		–			–			581			11,570
K Class		–			–		–		672		(24,050	)		–			(24,050	)		672
Royce Low-Priced Stock Fund
Investment Class		2,130,876			1,971,123		–		1,820,228		(4,198,839	)		(10,892,309	)		(2,067,963	)		(7,100,958	)
Service Class		3,837,574			7,067,276		–		23,428,229		(36,331,671	)		(80,535,704	)		(32,494,097	)		(50,040,199	)
Institutional Class		200,515			583,934		–		1,067,221		(2,539,408	)		(27,305,121	)		(2,338,893	)		(25,653,966	)
R Class		38,226			162,573		–		89,653		(109,159	)		(411,859	)		(70,933	)		(159,633	)
K Class		13,656			107,931		–		434,240		(1,113,741	)		(687,522	)		(1,100,085	)		(145,351	)

114 | The Royce Funds 2017 Semiannual Report to Shareholders

Capital Share Transactions (in dollars) (continued):

					SHARES ISSUED FOR REINVESTMENT										NET INCREASE (DECREASE) FROM
	SHARES SOLD				OF DISTRIBUTIONS				SHARES REDEEMED						CAPITAL SHARE TRANSACTIONS
	Six Months Ended				Six Months Ended				Six Months Ended						Six Months Ended
	6/30/17		Period Ended		6/30/17		Period Ended		6/30/17			Period Ended			6/30/17			Period Ended
	(unaudited)		12/31/16		(unaudited)		12/31/16		(unaudited)			12/31/16			(unaudited)			12/31/16
Royce Micro-Cap Fund
Investment Class	$	2,793,225	$	9,466,655	$	2,031	$	18,015,282	$	(22,079,802	)	$	(66,073,769	)	$	(19,284,546	)	$	(38,591,832	)
Service Class		2,874,886		4,842,797		–		1,576,589		(3,298,191	)		(10,503,711	)		(423,305	)		(4,084,325	)
Consultant Class		291,950		1,293,781		–		4,079,826		(6,227,329	)		(14,100,322	)		(5,935,379	)		(8,726,715	)
Royce Micro-Cap Opportunity Fund
Investment Class		1,328,362		6,820,847		–		–		(2,298,213	)		(5,142,669	)		(969,851	)		1,678,178
Service Class		169,617		291,194		–		–		(214,398	)		(691,434	)		(44,781	)		(400,240	)
Royce Opportunity Fund
Investment Class		42,593,198		81,034,611		–		41,705,217		(98,169,595	)		(253,661,600	)		(55,576,397	)		(130,921,772	)
Service Class		32,281,334		16,933,706		–		4,661,818		(16,544,823	)		(62,322,206	)		15,736,511			(40,726,682	)
Consultant Class		469,970		2,287,388		–		1,568,020		(2,958,356	)		(5,702,177	)		(2,488,386	)		(1,846,769	)
Institutional Class		37,353,624		58,740,553		–		35,837,134		(82,962,821	)		(220,100,854	)		(45,609,197	)		(125,523,167	)
R Class		3,461,997		5,262,774		–		2,794,912		(6,585,132	)		(8,185,578	)		(3,123,135	)		(127,892	)
K Class		1,365,085		2,688,304		–		525,822		(1,928,472	)		(7,346,313	)		(563,387	)		(4,132,187	)
Royce Pennsylvania Mutual Fund
Investment Class		53,943,154		101,656,002		–		98,152,740		(178,987,539	)		(725,638,867	)		(125,044,385	)		(525,830,125	)
Service Class		17,178,366		27,866,036		–		5,127,006		(43,536,836	)		(47,207,450	)		(26,358,470	)		(14,214,408	)
Consultant Class		4,543,399		9,509,567		–		29,743,347		(51,586,237	)		(109,823,958	)		(47,042,838	)		(70,571,044	)
Institutional Class		21,373,994		135,118,511		–		18,093,080		(38,740,833	)		(481,864,428	)		(17,366,839	)		(328,652,837	)
R Class		2,096,336		2,588,691		–		1,140,459		(3,657,006	)		(7,878,915	)		(1,560,670	)		(4,149,765	)
K Class		229,735		507,920		–		247,212		(824,580	)		(2,093,193	)		(594,845	)		(1,338,061	)
Royce Premier Fund
Investment Class		62,655,944		132,149,740		3,003		179,639,115		(211,859,552	)		(697,868,653	)		(149,200,605	)		(386,079,798	)
Service Class		8,153,742		12,022,129		–		5,025,159		(6,865,078	)		(36,123,462	)		1,288,664			(19,076,174	)
Consultant Class		1,562,901		1,657,648		–		4,316,806		(4,301,930	)		(9,246,501	)		(2,739,029	)		(3,272,047	)
Institutional Class		190,614,950		80,363,260		–		29,595,890		(185,151,239	)		(177,605,927	)		5,463,711			(67,646,777	)
W Class		8,837,011		11,616,780		–		14,836,924		(21,881,683	)		(85,709,902	)		(13,044,672	)		(59,256,198	)
R Class		473,729		452,451		–		1,728,030		(2,390,920	)		(5,486,362	)		(1,917,191	)		(3,305,881	)
K Class				1,217,490				1,845,074					(4,393,199	)					(1,330,635	)
Royce Small-Cap Leaders Fund
Investment Class		2,336,572		2,943,260		–		4,254,065		(8,189,478	)		(15,072,711	)		(5,852,906	)		(7,875,386	)
Service Class		1,867,295		2,746,867		–		4,672,613		(7,486,532	)		(20,862,377	)		(5,619,237	)		(13,442,897	)
R Class		515,281		390,342		–		132,202		(372,090	)		(549,660	)		143,191			(27,116	)
K Class		8,625		124,715		–		35,143		(515,907	)		(61,065	)		(507,282	)		98,793
Royce Small-Cap Value Fund
Investment Class		4,683,978		15,238,437		–		3,520,923		(14,368,297	)		(33,562,073	)		(9,684,319	)		(14,802,713	)
Service Class		2,018,599		8,438,818		–		10,369,371		(35,331,355	)		(87,439,478	)		(33,312,756	)		(68,631,289	)
Consultant Class		360,273		923,536		–		835,891		(2,176,581	)		(5,814,390	)		(1,816,308	)		(4,054,963	)
Institutional Class		5,596,291		51,211,150		–		7,164,497		(25,780,485	)		(100,761,956	)		(20,184,194	)		(42,386,309	)
R Class		1,382,376		2,883,464		–		953,798		(3,420,830	)		(7,228,118	)		(2,038,454	)		(3,390,856	)
K Class		254,270		1,184,756		–		211,184		(1,059,605	)		(4,929,415	)		(805,335	)		(3,533,475	)
Royce Small/Mid-Cap Premier Fund
Investment Class		1,985,017		3,678,000		–		3,292,053		(10,282,173	)		(20,684,731	)		(8,297,156	)		(13,714,678	)
Service Class		6,101,811		1,980,974		–		4,133,928		(10,625,031	)		(21,159,246	)		(4,523,220	)		(15,044,344	)
Consultant Class		155,860		550,259		–		519,489		(1,922,403	)		(1,971,398	)		(1,766,543	)		(901,650	)
R Class		151,692		240,334		–		97,399		(265,502	)		(950,917	)		(113,810	)		(613,184	)
K Class		73,214		524,089		–		212,068		(4,345,335	)		(971,874	)		(4,272,121	)		(235,717	)
Royce Smaller-Companies Growth Fund
Investment Class		5,232,375		9,036,660		–		8,163,119		(17,091,078	)		(55,705,571	)		(11,858,703	)		(38,505,792	)
Service Class		3,977,761		14,663,751		–		28,201,863		(44,012,062	)		(159,219,364	)		(40,034,301	)		(116,353,750	)
Consultant Class		386,076		170,036		–		1,256,839		(1,136,258	)		(4,722,177	)		(750,182	)		(3,295,302	)
Institutional Class		1,677,611		4,456,412		–		1,910,324		(11,911,804	)		(24,349,639	)		(10,234,193	)		(17,982,903	)
R Class		47,488		212,289		–		89,046		(263,893	)		(364,827	)		(216,405	)		(63,492	)
K Class		10,337		24,433		–		38,133		(220,600	)		(140,884	)		(210,263	)		(78,318	)

The Royce Funds 2017 Semiannual Report to Shareholders | 115

Notes to Financial Statements (unaudited) (continued)

Capital Share Transactions (in dollars) (continued):

					SHARES ISSUED FOR REINVESTMENT										NET INCREASE (DECREASE) FROM
	SHARES SOLD				OF DISTRIBUTIONS				SHARES REDEEMED						CAPITAL SHARE TRANSACTIONS
	Six Months Ended				Six Months Ended				Six Months Ended						Six Months Ended
	6/30/17		Period Ended		6/30/17		Period Ended		6/30/17			Period Ended			6/30/17			Period Ended
	(unaudited)		12/31/16		(unaudited)		12/31/16		(unaudited)			12/31/16			(unaudited)			12/31/16
Royce Special Equity Fund
Investment Class	$	85,543,791	$	179,392,659	$	–	$	75,160,317	$	(170,849,884	)	$	(354,506,680	)	$	(85,306,093	)	$	(99,953,704	)
Service Class		9,983,159		30,335,347		–		6,662,481		(29,162,723	)		(43,663,631	)		(19,179,564	)		(6,665,803	)
Consultant Class		2,859,948		5,012,148		–		3,309,705		(5,664,530	)		(8,602,908	)		(2,804,582	)		(281,055	)
Institutional Class		104,884,931		45,055,283		–		15,454,797		(68,245,297	)		(104,274,992	)		36,639,634			(43,764,912	)
Royce Special Equity Multi-Cap Fund
Investment Class		2,119,365		9,065,075		–		361,721		(1,868,559	)		(23,180,740	)		250,806			(13,753,944	)
Service Class		1,826,570		1,179,738		–		291,900		(12,085,883	)		(16,267,235	)		(10,259,313	)		(14,795,597	)
Consultant Class		218,161		563,388		–		37,877		(1,147,822	)		(2,866,031	)		(929,661	)		(2,264,766	)
Institutional Class		180,913		175,067		–		461,530		(132,307	)		(4,391,464	)		48,606			(3,754,867	)
Royce Total Return Fund
Investment Class		110,357,620		294,955,069		7,259,661		136,990,355		(263,270,275	)		(682,255,576	)		(145,652,994	)		(250,310,152	)
Service Class		30,856,362		36,092,000		454,711		10,591,744		(64,490,248	)		(58,098,066	)		(33,179,175	)		(11,414,322	)
Consultant Class		4,610,884		10,401,986		–		17,832,355		(29,304,056	)		(60,628,932	)		(24,693,172	)		(32,394,591	)
Institutional Class		33,234,302		293,147,555		2,127,457		34,001,932		(119,968,404	)		(348,478,072	)		(84,606,645	)		(21,328,585	)
W Class		11,722,277		25,598,918		119,409		5,366,667		(7,956,546	)		(84,376,627	)		3,885,140			(53,411,042	)
R Class		8,919,550		7,424,801		110,573		4,240,875		(11,937,808	)		(15,644,457	)		(2,907,685	)		(3,978,781	)
K Class		6,609,786		22,509,661		101,525		4,948,018		(12,299,078	)		(55,761,263	)		(5,587,767	)		(28,303,584	)

Capital Share Transactions (in shares):

					SHARES ISSUED FOR REINVESTMENT										NET INCREASE (DECREASE) IN
	SHARES SOLD				OF DISTRIBUTIONS				SHARES REDEEMED						SHARES OUTSTANDING
	Six Months Ended				Six Months Ended				Six Months Ended						Six Months Ended
	6/30/17		Period Ended		6/30/17		Period Ended		6/30/17			Period Ended			6/30/17			Period Ended
	(unaudited)		12/31/16		(unaudited)		12/31/16		(unaudited)			12/31/16			(unaudited)			12/31/16
Royce Dividend Value Fund
Investment Class		1,647,244		2,660,858		70,304		1,266,523		(2,863,353	)		(7,026,219	)		(1,145,805	)		(3,098,838	)
Service Class		413,811		982,932		51,149		1,347,129		(3,788,748	)		(10,577,464	)		(3,323,788	)		(8,247,403	)
Consultant Class		2,468		18,781		253		14,300		(15,067	)		(84,343	)		(12,346	)		(51,262	)
Institutional Class		15,776		10,503		837		11,998		(2,174	)		(3,669	)		14,439			18,832
Royce Global Financial Services Fund
Service Class		940,983		1,190,188		–		35,333		(1,309,648	)		(2,858,179	)		(368,665	)		(1,632,658	)
Institutional Class		39,591		560,952		–		5,461		(33,556	)		–			6,035			566,413
Royce International Micro-Cap Fund
Service Class		49,533		20,043		–		9,360		(17,394	)		(61,674	)		32,139			(32,271	)
Royce International Premier Fund
Investment Class1		1,547,410		3,108,605		–		44,220		(304,762	)		(1,449,841	)		1,242,648			1,702,984
Service Class1		558,047		3,645,178		–		77,022		(470,094	)		(1,037,673	)		87,953			2,684,527
Consultant Class1		45,496		572,065		–		5,809		(35,745	)		(163,265	)		9,751			414,609
R Class1		58		5,494		–		163		–			–			58			5,657
K Class1		–		2,473		–		78		(2,551	)		–			(2,551	)		2,551
Royce Low-Priced Stock Fund
Investment Class		259,005		256,929		–		219,834		(510,393	)		(1,408,310	)		(251,388	)		(931,547	)
Service Class		466,374		908,878		–		2,839,785		(4,433,161	)		(10,354,471	)		(3,966,787	)		(6,605,808	)
Institutional Class		24,342		75,466		–		128,581		(308,779	)		(3,729,447	)		(284,437	)		(3,525,400	)
R Class		4,920		22,201		–		11,450		(14,050	)		(54,355	)		(9,130	)		(20,704	)
K Class		9,447		57,659		–		301,555		(770,346	)		(381,680	)		(760,899	)		(22,466	)
Royce Micro-Cap Fund
Investment Class		236,827		849,276		170		1,510,082		(1,866,429	)		(5,962,181	)		(1,629,432	)		(3,602,823	)
Service Class		248,075		435,709		–		134,751		(284,943	)		(971,095	)		(36,868	)		(400,635	)
Consultant Class		31,173		148,907		–		433,103		(669,721	)		(1,547,295	)		(638,548	)		(965,285	)
Royce Micro-Cap Opportunity Fund
Investment Class		74,705		499,875		–		–		(130,448	)		(354,864	)		(55,743	)		145,011
Service Class		18,536		40,382		–		–		(23,629	)		(98,358	)		(5,093	)		(57,976	)

¹ Includes shares issued in connection with the merger of Royce European Small-Cap Fund and Royce Global Value Fund (2,460,873 for Investment Class, 3,226,058 for Service Class, 542,120 for Consultant Class, 4,452 for R Class and 2,473 for K Class, for the period ended 12/31/16).

116 | The Royce Funds 2017 Semiannual Report to Shareholders

Capital Share Transactions (in shares) (continued):

					SHARES ISSUED FOR REINVESTMENT										NET INCREASE (DECREASE) IN
	SHARES SOLD				OF DISTRIBUTIONS				SHARES REDEEMED						SHARES OUTSTANDING
	Six Months Ended				Six Months Ended				Six Months Ended						Six Months Ended
	6/30/17		Period Ended		6/30/17		Period Ended		6/30/17			Period Ended			6/30/17			Period Ended
	(unaudited)		12/31/16		(unaudited)		12/31/16		(unaudited)			12/31/16			(unaudited)			12/31/16
Royce Opportunity Fund
Investment Class		3,202,738		7,169,819		–		3,210,563		(7,327,098	)		(22,519,005	)		(4,124,360	)		(12,138,623	)
Service Class		2,545,889		1,582,515		–		383,689		(1,325,226	)		(5,985,363	)		1,220,663			(4,019,159	)
Consultant Class		42,419		254,530		–		144,785		(267,107	)		(586,237	)		(224,688	)		(186,922	)
Institutional Class		2,745,958		5,099,929		–		2,708,778		(6,121,517	)		(19,157,014	)		(3,375,559	)		(11,348,307	)
R Class		287,976		525,049		–		236,853		(546,543	)		(781,985	)		(258,567	)		(20,083	)
K Class		125,675		280,506		–		49,097		(175,832	)		(790,088	)		(50,157	)		(460,485	)
Royce Pennsylvania Mutual Fund
Investment Class		4,817,419		10,226,806		–		8,810,839		(15,977,805	)		(73,784,191	)		(11,160,386	)		(54,746,546	)
Service Class		1,551,715		2,531,009		–		459,821		(3,884,985	)		(4,824,673	)		(2,333,270	)		(1,833,843	)
Consultant Class		505,544		1,165,040		–		3,308,492		(5,726,085	)		(13,450,271	)		(5,220,541	)		(8,976,739	)
Institutional Class		1,901,697		13,478,552		–		1,622,698		(3,469,677	)		(46,263,535	)		(1,567,980	)		(31,162,285	)
R Class		198,672		265,258		–		108,100		(344,854	)		(837,492	)		(146,182	)		(464,134	)
K Class		24,937		59,680		–		26,841		(89,595	)		(262,303	)		(64,658	)		(175,782	)
Royce Premier Fund
Investment Class		3,827,435		8,812,203		191		11,434,739		(12,890,567	)		(47,449,896	)		(9,062,941	)		(27,202,954	)
Service Class		511,822		805,849		–		328,013		(429,680	)		(2,490,902	)		82,142			(1,357,040	)
Consultant Class		120,213		132,228		–		342,061		(328,467	)		(732,856	)		(208,254	)		(258,567	)
Institutional Class		11,386,378		4,672,420		–		1,859,039		(11,556,791	)		(10,964,670	)		(170,413	)		(4,433,211	)
W Class		536,527		769,454		–		940,832		(1,331,641	)		(5,671,662	)		(795,114	)		(3,961,376	)
R Class		31,194		31,848		–		117,873		(157,687	)		(385,875	)		(126,493	)		(236,154	)
K Class				766,591				61,502,453					(63,925,467	)					(1,656,423	)
Royce Small-Cap Leaders Fund
Investment Class		328,231		429,323		–		594,974		(1,147,697	)		(2,292,098	)		(819,466	)		(1,267,801	)
Service Class		264,988		411,724		–		661,844		(1,065,153	)		(3,183,253	)		(800,165	)		(2,109,685	)
R Class		52,911		42,261		–		13,532		(38,563	)		(64,382	)		14,348			(8,589	)
K Class		860		13,532		–		3,507		(51,156	)		(6,453	)		(50,296	)		10,586
Royce Small-Cap Value Fund
Investment Class		483,346		1,706,503		–		347,918		(1,483,652	)		(3,693,241	)		(1,000,306	)		(1,638,820	)
Service Class		208,063		918,639		–		1,028,707		(3,649,888	)		(9,655,060	)		(3,441,825	)		(7,707,714	)
Consultant Class		40,944		112,192		–		92,160		(250,855	)		(700,893	)		(209,911	)		(496,541	)
Institutional Class		568,753		6,021,934		–		707,954		(2,663,494	)		(11,003,947	)		(2,094,741	)		(4,274,059	)
R Class		147,773		319,737		–		98,127		(364,575	)		(823,181	)		(216,802	)		(405,317	)
K Class		37,862		173,952		–		30,169		(155,576	)		(752,641	)		(117,714	)		(548,520	)
Royce Small/Mid-Cap Premier Fund
Investment Class		130,725		281,846		–		222,737		(675,581	)		(1,440,664	)		(544,856	)		(936,081	)
Service Class		401,379		149,122		–		280,456		(700,106	)		(1,565,689	)		(298,727	)		(1,136,111	)
Consultant Class		14,499		55,903		–		49,287		(177,734	)		(203,096	)		(163,235	)		(97,906	)
R Class		15,524		27,042		–		10,114		(26,870	)		(106,425	)		(11,346	)		(69,269	)
K Class		7,418		56,896		–		21,750		(431,031	)		(107,350	)		(423,613	)		(28,704	)
Royce Smaller-Companies Growth Fund
Investment Class		445,606		847,388		–		717,953		(1,451,969	)		(5,074,410	)		(1,006,363	)		(3,509,069	)
Service Class		344,051		1,409,846		–		2,529,315		(3,806,343	)		(14,572,615	)		(3,462,292	)		(10,633,454	)
Consultant Class		38,264		18,168		–		128,775		(112,096	)		(486,078	)		(73,832	)		(339,135	)
Institutional Class		139,358		412,595		–		166,115		(966,662	)		(2,234,312	)		(827,304	)		(1,655,602	)
R Class		4,434		20,463		–		8,546		(24,141	)		(35,661	)		(19,707	)		(6,652	)
K Class		1,824		4,217		–		6,933		(39,316	)		(23,979	)		(37,492	)		(12,829	)
Royce Special Equity Fund
Investment Class		3,943,565		9,260,512		–		3,410,178		(7,881,190	)		(18,239,504	)		(3,937,625	)		(5,568,814	)
Service Class		461,285		1,557,578		–		302,840		(1,347,658	)		(2,299,540	)		(886,373	)		(439,122	)
Consultant Class		145,073		271,702		–		164,009		(286,410	)		(489,570	)		(141,337	)		(53,859	)
Institutional Class		4,879,532		2,367,916		–		706,990		(3,184,626	)		(5,367,357	)		1,694,906			(2,292,451	)
Royce Special Equity Multi-Cap Fund
Investment Class		142,903		704,106		–		25,618		(127,345	)		(1,787,819	)		15,558			(1,058,095	)
Service Class		124,946		92,500		–		20,600		(844,796	)		(1,271,369	)		(719,850	)		(1,158,269	)
Consultant Class		22,919		64,759		–		4,086		(119,533	)		(358,839	)		(96,614	)		(289,994	)
Institutional Class		12,667		14,101		–		32,709		(9,001	)		(348,109	)		3,666			(301,299	)

The Royce Funds 2017 Semiannual Report to Shareholders | 117

Notes to Financial Statements (unaudited) (continued)

Capital Share Transactions (in shares) (continued):

					SHARES ISSUED FOR REINVESTMENT										NET INCREASE (DECREASE) IN
	SHARES SOLD				OF DISTRIBUTIONS				SHARES REDEEMED						SHARES OUTSTANDING
	Six Months Ended				Six Months Ended				Six Months Ended						Six Months Ended
	6/30/17		Period Ended		6/30/17		Period Ended		6/30/17			Period Ended			6/30/17			Period Ended
	(unaudited)		12/31/16		(unaudited)		12/31/16		(unaudited)			12/31/16			(unaudited)			12/31/16
Royce Total Return Fund
Investment Class		7,989,965		23,095,630		519,573		9,965,626		(19,037,673	)		(54,300,006	)		(10,528,135	)		(21,238,750	)
Service Class		2,187,949		2,651,956		31,853		752,701		(4,558,596	)		(4,555,567	)		(2,338,794	)		(1,150,910	)
Consultant Class		323,762		809,896		–		1,253,650		(2,057,427	)		(4,654,549	)		(1,733,665	)		(2,591,003	)
Institutional Class		2,427,540		22,240,210		154,151		2,503,885		(8,704,110	)		(25,442,830	)		(6,122,419	)		(698,735	)
W Class		847,632		2,022,318		8,564		391,422		(575,591	)		(6,527,081	)		280,605			(4,113,341	)
R Class		626,162		561,428		7,684		298,296		(835,711	)		(1,194,084	)		(201,865	)		(334,360	)
K Class		716,292		2,544,929		10,967		540,978		(1,337,414	)		(6,214,250	)		(610,155	)		(3,128,343	)

Investment Adviser and Distributor:

INVESTMENT ADVISER:
    Under the Trust’s investment advisory agreements with Royce, Royce is entitled to receive investment advisory fees in respect of each Fund that are computed daily and payable monthly. Royce’s commitment to waive its fees and reimburse class-specific expenses to the extent necessary to maintain certain Funds’ net annual operating expense ratios at specified levels through April 30, 2018, is shown below to the extent that it impacted net expenses for the six months ended June 30, 2017. See the Prospectus for contractual waiver expiration dates.

COMMITTED NET ANNUAL OPERATING EXPENSE RATIO CAP3

SIX MONTHS ENDED JUNE 30, 2017

ANNUAL CONTRACTUAL ADVISORY FEE AS A PERCENTAGE OF AVERAGE NET ASSETS 1

Investment Class

Service Class

Consultant Class

Institutional Class

W Class

R Class

K Class

Net advisory fees

Advisory fees waived

Royce Dividend Value Fund

0.85%

1.09%

1.34%

2.09%

0.89%

N/A

N/A

N/A

$

819,900

$

69,023

Royce Global Financial Services Fund

1.00%

N/A

1.49%

N/A

1.04%

N/A

N/A

N/A

218,586

34,770

Royce International Micro-Cap Fund

1.25%

N/A

1.64%

N/A

N/A

N/A

N/A

N/A

–

41,449

Royce International Premier Fund

1.00%

1.19%

1.44%

2.19%

N/A

N/A

1.74%

1.49%

372,084

3,553

Royce Low-Priced Stock Fund

1.00%

1.24%

1.49%

N/A

N/A

N/A

1.84%

1.59%

1,477,143

–

Royce Micro-Cap Fund

1.25%

1.49%

1.61%

N/A

N/A

N/A

N/A

N/A

1,413,631

–

Royce Micro-Cap Opportunity Fund

1.00%

1.24%

1.49%

N/A

N/A

N/A

N/A

N/A

233,753

–

Royce Opportunity Fund

1.00%

N/A

1.49%

N/A

N/A

N/A

N/A

N/A

7,321,859

–

Royce Pennsylvania Mutual Fund

0.76% 2

N/A

N/A

N/A

N/A

N/A

N/A

N/A

8,945,342

–

Royce Premier Fund

0.99%

N/A

1.49%

N/A

N/A

N/A

N/A

N/A

11,141,528

–

Royce Small-Cap Leaders Fund

1.00%

N/A

1.49%

N/A

N/A

N/A

1.84%

1.59%

478,016

–

Royce Small-Cap Value Fund

1.00%

1.24%

1.49%

N/A

N/A

N/A

N/A

1.99%

2,031,607

–

Royce Small/Mid-Cap Premier Fund

0.85%

N/A

N/A

2.09%

N/A

N/A

1.69%

1.44%

957,361

–

Royce Smaller-Companies Growth Fund

1.00%

N/A

1.49%

2.24%

N/A

N/A

1.84%

1.59%

2,013,224

–

Royce Special Equity Fund

1.00%

N/A

1.39%

N/A

N/A

N/A

N/A

N/A

7,793,411

–

Royce Special Equity Multi-Cap Fund

0.85%

N/A

1.24%

1.99%

0.89%

N/A

N/A

N/A

444,272

28,367

Royce Total Return Fund

0.99%

N/A

N/A

N/A

N/A

N/A

N/A

N/A

13,719,259

–

1	From a base annual rate of 1.00% (0.85% for Royce Dividend Value Fund, Royce Small/Mid-Cap Premier Fund and Royce Special Equity Multi-Cap Fund and 1.25% for Royce International Micro-Cap Fund and Royce Micro-Cap Fund), the annual rates of investment advisory fees payable by each of the Funds, other than Royce Pennsylvania Mutual Fund, are reduced by the indicated amount at the following breakpoints applicable to a Fund’s net assets in excess of $2 billion: more than $2 billion to $4 billion – .05% per annum; more than $4 billion to $6 billion – .10% per annum; over $6 billion – .15% per annum. Effective July 1, 2017, the breakpoints changed to more than $2 billion to $3 billion – .05% per annum; more than $3 billion to $4 billion – .10% per annum; over $4 billion – .15% per annum.
2	Royce Pennsylvania Mutual Fund’s fees are calculated at the annual rate of 1.00% of the first $50 million of the Fund’s average net assets, 0.875% of the next $50 million of average net assets and 0.75% of average net assets in excess of $100 million.
3	Committed net annual operating expense ratio cap excludes acquired fund fees and expenses.

DISTRIBUTOR:
    Royce Fund Services, LLC (“RFS”), the distributor of the Trust’s shares, is a wholly owned subsidiary of Royce. RFS is entitled to receive a distribution fees that are computed daily and payable monthly.

	ANNUAL CONTRACTUAL DISTRIBUTION FEE AS A		SIX MONTHS ENDED JUNE 30, 2017
	PERCENTAGE OF AVERAGE NET ASSETS		Net distribution fees		Distribution fees waived
Royce Dividend Value Fund – Service Class		0.25%	$	129,450	$	5,394
Royce Dividend Value Fund – Consultant Class		1.00%		7,703		–
Royce Global Financial Services Fund – Service Class		0.25%		52,681		2,195
Royce International Micro-Cap Fund – Service Class		0.25%		5,306		2,984

118 | The Royce Funds 2017 Semiannual Report to Shareholders

DISTRIBUTOR (continued):

	ANNUAL CONTRACTUAL DISTRIBUTION FEE AS A		SIX MONTHS ENDED JUNE 30, 2017
	PERCENTAGE OF AVERAGE NET ASSETS		Net distribution fees		Distribution fees waived
Royce International Premier Fund – Service Class		0.25%	$	31,856	$	21,237
Royce International Premier Fund – Consultant Class		1.00%		27,888		–
Royce International Premier Fund – R Class		0.50%		142		–
Royce International Premier Fund – K Class		0.25%		6		–
Royce Low-Priced Stock Fund – Service Class		0.25%		301,067		26,180
Royce Low-Priced Stock Fund – R Class		0.50%		2,432		–
Royce Low-Priced Stock Fund – K Class		0.25%		409		–
Royce Micro-Cap Fund – Service Class		0.25%		21,256		–
Royce Micro-Cap Fund – Consultant Class		1.00%		150,116		–
Royce Micro-Cap Opportunity Fund – Service Class		0.25%		1,266		–
Royce Opportunity Fund – Service Class		0.25%		93,806		–
Royce Opportunity Fund – Consultant Class		1.00%		101,421		–
Royce Opportunity Fund – R Class		0.50%		95,540		–
Royce Opportunity Fund – K Class		0.25%		8,520		–
Royce Pennsylvania Mutual Fund – Service Class		0.25%		117,211		–
Royce Pennsylvania Mutual Fund – Consultant Class		1.00%		1,910,938		–
Royce Pennsylvania Mutual Fund – R Class		0.50%		40,837		–
Royce Pennsylvania Mutual Fund – K Class		0.25%		3,335		–
Royce Premier Fund – Service Class		0.25%		62,300		–
Royce Premier Fund – Consultant Class		1.00%		157,919		–
Royce Premier Fund – R Class		0.50%		33,486		–
Royce Small-Cap Leaders Fund – Service Class		0.25%		54,850		4,770
Royce Small-Cap Leaders Fund – R Class		0.50%		5,082		–
Royce Small-Cap Leaders Fund – K Class		0.25%		189		–
Royce Small-Cap Value Fund – Service Class		0.25%		226,557		9,440
Royce Small-Cap Value Fund – Consultant Class		1.00%		75,769		–
Royce Small-Cap Value Fund – R Class		0.50%		40,738		–
Royce Small-Cap Value Fund – K Class		0.25%		2,724		–
Royce Small/Mid-Cap Premier Fund – Service Class		0.25%		86,428		67,908
Royce Small/Mid-Cap Premier Fund – Consultant Class		1.00%		55,694		–
Royce Small/Mid-Cap Premier Fund – R Class		0.50%		4,845		–
Royce Small/Mid-Cap Premier Fund – K Class		0.25%		1,559		–
Royce Smaller-Companies Growth Fund – Service Class		0.25%		316,804		27,548
Royce Smaller-Companies Growth Fund – Consultant Class		1.00%		53,385		–
Royce Smaller-Companies Growth Fund – R Class		0.50%		1,873		–
Royce Smaller-Companies Growth Fund – K Class		0.25%		54		–
Royce Special Equity Fund – Service Class		0.25%		143,968		–
Royce Special Equity Fund – Consultant Class		1.00%		241,216		–
Royce Special Equity Multi-Cap Fund – Service Class		0.25%		29,211		9,225
Royce Special Equity Multi-Cap Fund – Consultant Class		1.00%		23,895		–
Royce Total Return Fund – Service Class		0.25%		175,968		–
Royce Total Return Fund – Consultant Class		1.00%		1,276,639		–
Royce Total Return Fund – R Class		0.50%		131,181		–
Royce Total Return Fund – K Class		0.25%		47,182		–

Purchases and Sales of Investment Securities:
    For the six months ended June 30, 2017, the costs of purchases and the proceeds from sales of investment securities, other than short-term securities and collateral received for securities loaned, were as follows:

	PURCHASES		SALES1
Royce Dividend Value Fund	$	22,907,495	$	51,286,192
Royce Global Financial Services Fund		4,768,701		6,054,689
Royce International Micro-Cap Fund		3,431,134		2,936,402
Royce International Premier Fund		29,071,739		16,449,906
Royce Low-Priced Stock Fund		48,050,290		79,836,489
Royce Micro-Cap Fund		36,236,124		50,209,784
Royce Micro-Cap Opportunity Fund		17,220,337		17,863,055
Royce Opportunity Fund		277,469,328		380,031,955
Royce Pennsylvania Mutual Fund		369,098,207		569,741,205
Royce Premier Fund		69,840,269		247,779,395

The Royce Funds 2017 Semiannual Report to Shareholders | 119

Notes to Financial Statements (unaudited) (continued)

Purchases and Sales of Investment Securities (continued):

	PURCHASES		SALES1
Royce Small-Cap Leaders Fund	$	28,267,241	$	40,914,735
Royce Small-Cap Value Fund		117,189,900		175,130,699
Royce Small/Mid-Cap Premier Fund		72,247,495		60,956,724
Royce Smaller-Companies Growth Fund		116,113,322		194,869,364
Royce Special Equity Fund		150,035,734		171,187,721
Royce Special Equity Multi-Cap Fund		14,110,423		23,417,946
Royce Total Return Fund		169,084,861		416,398,833

¹ Excludes the value of securities delivered as a result of redemptions-in-kind.

Cross trades were executed by the Funds pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds to which Royce serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7. Cross trades for the six months ended June 30, 2017, were as follows:

	COST OF PURCHASES		PROCEEDS FROM SALES		REALIZED GAIN (LOSS)
Royce Dividend Value Fund	$	–	$	13,763,919	$	486,027
Royce Low-Priced Stock Fund		–		79,237		25,944
Royce Micro-Cap Fund		–		174,983		6,301
Royce Opportunity Fund		1,439,990		552,500		307,921
Royce Pennsylvania Mutual Fund		552,500		4,521,828		1,089,055
Royce Premier Fund		1,142,289		–		–
Royce Smaller-Companies Growth Fund		–		2,116,329		(2,174,137	)
Royce Total Return Fund		13,763,919		–		–

Redemptions-In-Kind:
    The Funds may make payment for Fund shares redeemed wholly or in part by distributing portfolio securities to shareholders. The net realized gain will not be realized for tax purposes. For the six months ended June 30, 2017, the following funds had redemptions in kind:

	PROCEEDS		REALIZED GAIN (LOSS)
Royce Premier Fund	$	140,719,649	$	80,482,308
Royce Total Return Fund		71,247,386		37,568,359

Class Specific Expenses:
    Class specific expenses, for Funds with multiple classes, were as follows for the six months ended June 30, 2017:

														CLASS LEVEL
														EXPENSES
														REIMBURSED BY
	NET DISTRIBUTION		SHAREHOLDER		SHAREHOLDER				TRANSFER AGENT					INVESTMENT
	FEES		SERVICING		REPORTS		REGISTRATION		BALANCE CREDITS			TOTAL		ADVISER
Royce Dividend Value Fund –
Investment Class	$	–	$	64,169	$	16,078	$	8,106	$	(74	)	$	88,279	$	–
Royce Dividend Value Fund – Service Class		129,450		80,775		27,971		8,204		(1,126	)		245,274		1,650
Royce Dividend Value Fund –
Consultant Class		7,703		3,546		339		5,528		(11	)		17,105		7,858
Royce Dividend Value Fund –
Institutional Class		–		3,027		9		5,109		(2	)		8,143		8,143
		137,153		151,517		44,397		26,947		(1,213	)				17,651
Royce Global Financial Services Fund –
Service Class		52,681		32,845		7,373		9,248		(63	)		102,084		3,117
Royce Global Financial Services Fund –
Institutional Class		–		3,065		18		10,054		(2	)		13,135		13,135
		52,681		35,910		7,391		19,302		(65	)				16,252
Royce International Premier Fund –
Investment Class		–		13,381		2,329		6,794		(20	)		22,484		22,484
Royce International Premier Fund –
Service Class		31,856		30,093		5,974		7,599		(226	)		75,296		21,341
Royce International Premier Fund –
Consultant Class		27,888		6,613		1,207		6,199		(49	)		41,858		13,872
Royce International Premier Fund – R Class		142		3,050		1		1,682		(1	)		4,874		4,715
Royce International Premier Fund – K Class		6		686		–		1,939		–			2,631		2,623
		59,892		53,823		9,511		24,213		(296	)				65,035

120 | The Royce Funds 2017 Semiannual Report to Shareholders

Class Specific Expenses (continued):

															CLASS LEVEL
															EXPENSES
															REIMBURSED BY
	NET DISTRIBUTION		SHAREHOLDER		SHAREHOLDER					TRANSFER AGENT					INVESTMENT
	FEES		SERVICING		REPORTS		REGISTRATION			BALANCE CREDITS			TOTAL		ADVISER
Royce Low-Priced Stock Fund –
Investment Class	$	–	$	17,983	$	4,020	$	5,651	$		(32	)	$	27,622	$	10,520
Royce Low-Priced Stock Fund –   Service Class		301,067		202,755		47,170		9,904			(913	)		559,983		24,881
Royce Low-Priced Stock Fund –
Institutional Class		–		3,222		2,901		5,709			(4	)		11,828		–
Royce Low-Priced Stock Fund – R Class		2,432		4,238		417		2,134			(7	)		9,214		5,527
Royce Low-Priced Stock Fund – K Class		409		1,271		64		1,520			(1	)		3,263		2,425
		303,908		229,469		54,572		24,918			(957	)				43,353
Royce Micro-Cap Fund – Investment Class		–		102,468		47,269		8,591			(730	)		157,598		26,512
Royce Micro-Cap Fund – Service Class		21,256		12,585		3,011		5,736			(19	)		42,569		20,013
Royce Micro-Cap Fund – Consultant Class		150,116		25,043		5,826		6,159			(82	)		187,062		–
		171,372		140,096		56,106		20,486			(831	)				46,525
Royce Micro-Cap Opportunity Fund –
Investment Class		–		18,473		2,042		9,172			(15	)		29,672		4,454
Royce Micro-Cap Opportunity Fund –
Service Class		1,266		4,303		306		5,437			(2	)		11,310		9,486
		1,266		22,776		2,348		14,609			(17	)				13,940
Royce Opportunity Fund – Investment Class		–		392,998		60,520		10,163			(1,327	)		462,354		–
Royce Opportunity Fund – Service Class		93,806		61,080		21,850		6,697			(59	)		183,374		22,101
Royce Opportunity Fund – Consultant Class		101,421		13,567		2,783		5,466			(89	)		123,148		–
Royce Opportunity Fund – Institutional Class		–		3,842		15,759		8,778			(27	)		28,352		–
Royce Opportunity Fund – R Class		95,540		40,098		1,980		4,818			(36	)		142,400		–
Royce Opportunity Fund – K Class		8,520		9,825		681		5,055			(22	)		24,059		–
		299,287		521,410		103,573		40,977			(1,560	)				22,101
Royce Pennsylvania Mutual Fund –
Investment Class		–		707,804		165,601		11,486			(4,054	)		880,837		–
Royce Pennsylvania Mutual Fund –
Service Class		117,211		72,762		11,907		7,672			(114	)		209,438		–
Royce Pennsylvania Mutual Fund –
Consultant Class		1,910,938		196,328		49,956		7,532			(966	)		2,163,788		–
Royce Pennsylvania Mutual Fund –
Institutional Class		–		4,223		13,372		7,434			(49	)		24,980		–
Royce Pennsylvania Mutual Fund – R Class		40,837		20,684		1,922		3,986			(59	)		67,370		–
Royce Pennsylvania Mutual Fund – K Class		3,335		6,022		547		5,098			(9	)		14,993		–
		2,072,321		1,007,823		243,305		43,208			(5,251	)				–
Royce Premier Fund – Investment Class		–		753,069		212,671		12,732			(2,315	)		976,157		–
Royce Premier Fund – Service Class		62,300		37,902		6,450		5,827			(141	)		112,338		3,491
Royce Premier Fund – Consultant Class		157,919		17,278		3,777		5,441			(81	)		184,334		–
Royce Premier Fund – Institutional Class		–		3,852		11,785		6,998			(16	)		22,619		–
Royce Premier Fund – W Class		–		68,505		23,201		6,809			(229	)		98,286		–
Royce Premier Fund – R Class		33,486		17,407		544		2,205			(15	)		53,627		–
		253,705		898,013		258,428		40,012			(2,797	)				3,491
Royce Small-Cap Leaders Fund –
Investment Class		–		15,293		6,477		7,485			(42	)		29,213		–
Royce Small-Cap Leaders Fund –
Service Class		54,850		40,214		9,723		7,388			(163	)		112,012		19,721
Royce Small-Cap Leaders Fund – R Class		5,082		5,303		858		2,806			(39	)		14,010		6,533
Royce Small-Cap Leaders Fund – K Class		189		1,063		310		1,488			(1	)		3,049		2,679
		60,121		61,873		17,368		19,167			(245	)				28,933

The Royce Funds 2017 Semiannual Report to Shareholders | 121

Notes to Financial Statements (unaudited) (continued)

Class Specific Expenses (continued):

														CLASS LEVEL
														EXPENSES
														REIMBURSED BY
	NET DISTRIBUTION		SHAREHOLDER		SHAREHOLDER				TRANSFER AGENT					INVESTMENT
	FEES		SERVICING		REPORTS		REGISTRATION		BALANCE CREDITS			TOTAL		ADVISER
Royce Small-Cap Value Fund –
Investment Class	$	–	$	47,138	$	8,451	$	6,155	$	(55	)	$	61,689	$	6,462
Royce Small-Cap Value Fund – Service Class		226,557		148,789		31,556		7,554		(579	)		413,877		20,405
Royce Small-Cap Value Fund –
Consultant Class		75,769		11,107		2,139		5,536		(43	)		94,508		–
Royce Small-Cap Value Fund –
Institutional Class		–		3,302		1,317		7,116		(10	)		11,725		–
Royce Small-Cap Value Fund – R Class		40,738		20,620		1,061		2,603		(36	)		64,986		–
Royce Small-Cap Value Fund – K Class		2,724		6,405		1,241		5,069		(7	)		15,432		5,431
		345,788		237,361		45,765		34,033		(730	)				32,298
Royce Small/Mid-Cap Premier Fund –
Investment Class		–		9,021		1,302		6,980		(24	)		17,279		–
Royce Small/Mid-Cap Premier Fund –
Service Class		86,428		46,785		23,845		8,203		(741	)		164,520		–
Royce Small/Mid-Cap Premier Fund –
Consultant Class		55,694		8,430		2,867		5,724		(73	)		72,642		8,408
Royce Small/Mid-Cap Premier Fund – R Class		4,845		5,154		359		2,292		(12	)		12,638		5,343
Royce Small/Mid-Cap Premier Fund – K Class		1,559		2,072		183		1,625		–			5,439		2,254
		148,526		71,462		28,556		24,824		(850	)				16,005
Royce Smaller-Companies Growth Fund –
Investment Class		–		49,417		19,640		6,784		(77	)		75,764		–
Royce Smaller-Companies Growth Fund –
Service Class		316,804		225,857		52,113		9,815		(771	)		603,818		27,619
Royce Smaller-Companies Growth Fund –
Consultant Class		53,385		10,228		2,029		5,596		(42	)		71,196		8,854
Royce Smaller-Companies Growth Fund –
Institutional Class		–		3,450		1,401		5,807		(6	)		10,652		–
Royce Smaller-Companies Growth Fund –
R Class		1,873		3,925		338		2,503		(8	)		8,631		5,753
Royce Smaller-Companies Growth Fund –
K Class		54		1,002		16		1,488		–			2,560		2,446
		372,116		293,879		75,537		31,993		(904	)				44,672
Royce Special Equity Fund – Investment Class		–		518,031		97,811		14,740		(1,344	)		629,238		–
Royce Special Equity Fund – Service Class		143,968		82,624		20,992		5,966		(762	)		252,788		58,913
Royce Special Equity Fund – Consultant Class		241,216		20,792		4,613		5,486		(109	)		271,998		–
Royce Special Equity Fund –
Institutional Class		–		5,009		4,651		7,013		(55	)		16,618		–
		385,184		626,456		128,067		33,205		(2,270	)				58,913
Royce Special Equity Multi-Cap Fund –
Investment Class		–		10,350		1,566		6,892		(34	)		18,774		–
Royce Special Equity Multi-Cap Fund –
Service Class		29,211		20,571		3,166		6,689		(79	)		59,558		5,472
Royce Special Equity Multi-Cap Fund –
Consultant Class		23,895		4,558		512		5,866		(11	)		34,820		8,517
Royce Special Equity Multi-Cap Fund –
Institutional Class		–		3,085		19		6,485		(2	)		9,587		9,587
		53,106		38,564		5,263		25,932		(126	)				23,576
Royce Total Return Fund – Investment Class		–		1,067,604		220,799		17,031		(2,504	)		1,302,930		–
Royce Total Return Fund – Service Class		175,968		97,384		13,299		6,744		(80	)		293,315		–
Royce Total Return Fund – Consultant Class		1,276,639		118,978		28,978		7,186		(585	)		1,431,196		–
Royce Total Return Fund – Institutional Class		–		5,299		10,039		6,870		(63	)		22,145		–
Royce Total Return Fund – W Class		–		54,969		20,860		7,280		(42	)		83,067		–
Royce Total Return Fund – R Class		131,181		56,024		3,649		2,769		(117	)		193,506		–
Royce Total Return Fund – K Class		47,182		51,705		3,589		5,380		(39	)		107,817		–
		1,630,970		1,451,963		301,213		53,260		(3,430	)				–

122 | The Royce Funds 2017 Semiannual Report to Shareholders

Tax Information:

At June 30, 2017, net unrealized appreciation (depreciation) based on identified cost for tax purposes was as follows:

			NET UNREALIZED		GROSS UNREALIZED
	TAX BASIS COST		APPRECIATION (DEPRECIATION)		Appreciation		Depreciation
Royce Dividend Value Fund	$	142,387,862	$	56,863,225	$	64,592,880	$	7,729,655
Royce Global Financial Services Fund		41,779,413		9,446,153		11,876,853		2,430,700
Royce International Micro-Cap Fund		6,933,651		469,015		762,878		293,863
Royce International Premier Fund		79,094,541		15,106,647		16,950,056		1,843,409
Royce Low-Priced Stock Fund		256,509,342		45,942,292		68,881,442		22,939,150
Royce Micro-Cap Fund		194,500,509		38,256,787		55,994,612		17,737,825
Royce Micro-Cap Opportunity Fund		42,673,477		7,666,602		10,084,740		2,418,138
Royce Opportunity Fund		1,378,230,639		214,228,065		373,230,484		159,002,419
Royce Pennsylvania Mutual Fund		1,545,712,509		888,552,983		941,482,772		52,929,789
Royce Premier Fund		1,151,917,633		1,132,691,602		1,136,096,860		3,405,258
Royce Small-Cap Leaders Fund		73,045,118		18,333,807		19,329,261		995,454
Royce Small-Cap Value Fund		328,468,118		43,517,227		57,227,426		13,710,199
Royce Small/Mid-Cap Premier Fund		185,462,012		42,816,268		45,130,389		2,314,121
Royce Smaller-Companies Growth Fund		329,863,623		106,687,222		112,306,245		5,619,023
Royce Special Equity Fund		1,109,289,383		423,511,663		440,952,642		17,440,979
Royce Special Equity Multi-Cap Fund		91,402,847		19,376,236		22,254,900		2,878,664
Royce Total Return Fund		1,551,178,990		1,058,512,860		1,123,340,656		64,827,796

The primary cause of the difference between book and tax basis cost is the timing of the recognition of losses on securities sold.

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 following transactions were effected in shares of such companies for the six months ended June 30, 2017:

									CHANGE IN NET
									UNREALIZED
	SHARES		MARKET VALUE		COST OF		PROCEEDS		APPRECIATION			REALIZED GAIN			DIVIDEND		SHARES		MARKET VALUE
AFFILIATED COMPANY	12/31/16		12/31/16		PURCHASES		FROM SALES		(DEPRECIATION)			(LOSS)			INCOME		6/30/17		6/30/17
Royce Opportunity Fund
Amtech Systems1		697,399	$	2,963,946	$	–	$	640,195	$	4,657,280		$	(1,844,953	)	$	–
Dixie Group		839,935		3,023,766		29,231		–		761,810			–			–		847,735	$	3,814,807
Echelon Corporation		230,152		1,081,714		–		–		121,981			–			–		230,152		1,203,695
Layne Christensen1		978,512		10,636,425		312,397		237,978		(2,083,689	)		2,093			–
LMI Aerospace1		831,730		7,169,513		–		11,369,995		6,890,852			(2,690,370	)		–
Noranda Aluminum Holding Corporation		593,726		14,131		–		–		(1,069	)		–			–		593,726		13,062
Northwest Pipe		461,994		7,955,537		469,114		28,255		(426,824	)		(13,131	)		–		489,326		7,956,441
SigmaTron International		344,772		1,630,772		–		30,304		689,191			(65,968	)		–		337,947		2,223,691
VOXX International Cl. A		1,283,078		6,030,467		139,915		691,897		4,628,480			(44,105	)		–		1,227,178		10,062,860
				40,506,271						15,238,012			(4,656,434	)		–				25,274,556
Royce Pennsylvania Mutual Fund
Preformed Line Products		290,278		16,870,957		–		–		(3,396,252	)		–			116,111		290,278		13,474,705
STRATTEC SECURITY		245,247		9,883,454		–		83,382		(1,096,476	)		(110,352	)		68,417		242,747		8,593,244
				26,754,411						(4,492,728	)		(110,352	)		184,528				22,067,949
Royce Special Equity Fund
Bassett Furniture Industries		735,000		22,344,000		1,695,330		–		6,320,670			–			153,500		800,000		30,360,000
Bowl America Cl. A		343,000		5,916,750		–		–		(946,680	)		–			116,620		343,000		4,970,070
Capella Education		577,700		50,722,060		3,325,770		2,784,875		(2,318,995	)		1,132,040			463,382		585,000		50,076,000
Computer Services		739,862		28,743,639		669,308		–		6,095,553			–			419,786		755,500		35,508,500
CSS Industries		885,000		23,956,950		–		–		(805,350	)		–			354,000		885,000		23,151,600
Flexsteel Industries		536,000		33,055,120		1,294,491		–		(3,939,791	)		–			224,508		562,000		30,409,820
Hooker Furniture		1,110,000		42,124,500		–		–		3,552,000			–			266,400		1,110,000		45,676,500
Hurco Companies		525,000		17,377,500		–		–		866,250			–			105,000		525,000		18,243,750
John B. Sanfilippo & Son		507,500		35,722,925		11,508,718		–		(4,316,843	)		–			–		680,000		42,914,800
National Presto Industries		450,000		47,880,000		1,369,728		–		2,022,272			–			2,475,000		464,000		51,272,000
Park Electrochemical		1,950,000		36,367,500		84,004		–		(440,404	)		–			390,500		1,955,000		36,011,100
Resources Connection		1,580,000		30,415,000		2,904,295		4,826,120		(8,507,959	)		633,284			316,382		1,505,000		20,618,500
Standard Motor Products		1,295,000		68,919,900		3,126,665		4,083,168		(2,767,558	)		1,645,761			476,900		1,280,000		66,841,600
				443,545,844						(5,186,835	)		3,411,085			5,761,978				456,054,240

The Royce Funds 2017 Semiannual Report to Shareholders | 123

Notes to Financial Statements (unaudited) (continued)

Transactions in Affiliated Companies (continued):

									CHANGE IN NET
									UNREALIZED
	SHARES		MARKET VALUE		COST OF		PROCEEDS		APPRECIATION			REALIZED GAIN			DIVIDEND		SHARES		MARKET VALUE
AFFILIATED COMPANY	12/31/16		12/31/16		PURCHASES		FROM SALES		(DEPRECIATION)			(LOSS)			INCOME		6/30/17		6/30/17
Royce Total Return Fund
Landauer 1		496,600	$	23,886,460	$	–	$	1,206,307	$	1,607,613		$	473,251		$	270,174
Mueller (Paul) Company		112,500		3,127,500		–		87,481		86,546			(5,450	)		–		109,436	$	3,121,115
Starrett (L.S.) Company (The)   Cl. A		491,000		4,566,300		–		111,767		(271,182	)		(75,776	)		98,114		477,625		4,107,575
				31,580,260						1,422,977			392,025			368,288				7,228,690

¹ Not an Affiliated Company at June 30, 2017.

Merger Information:
    On February 26, 2016, Royce International Premier Fund acquired all of the assets and assumed all of the liabilities of Royce European Small-Cap Fund and Royce Global Value Fund. Based on the opinion of counsel delivered to Royce International Premier Fund, the acquisition, which was approved by shareholders of Royce European Small-Cap Fund and Royce Global Value Fund on January 21, 2016, qualified as a tax-free reorganization for federal income tax purposes with no gain or loss recognized to the Funds or their shareholders. Royce European Small-Cap Fund’s net assets of $19,629,421, including $131,656 of unrealized depreciation and Royce Global Value Fund’s net assets of $43,193,013, including $2,001,574 of unrealized depreciation, were combined with Royce International Premier Fund for total net assets after the acquisition of $74,526,547.

124 | The Royce Funds 2017 Semiannual Report to Shareholders

Understanding Your Fund’s Expenses (unaudited)

As a shareholder of a mutual fund, you pay ongoing expenses, including management fees and other Fund expenses including, for some funds, distribution and/or service (12b-1) fees. Using the information below, you can estimate how these ongoing expenses (in dollars) affect your investment and compare them with the ongoing expenses of other funds. You may also incur one-time transaction expenses, including redemption fees, which are not shown in this section and would result in higher total costs. The example is based on an investment of $1,000 invested at January 1, 2017, and held for the entire six-month period ended June 30, 2017. Service, Consultant, R and K Class shares are generally available only through certain brokers or retirement plan administrators who receive distribution and/or service fees from the Fund for services that they perform. Institutional and W Class shares are generally available only to institutions or intermediaries with a minimum account size of $1 million.

Actual Expenses
    The first part of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value at June 30, 2017, by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes
    The second part of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
    Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, this section is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	ACTUAL						HYPOTHETICAL (5% PER YEAR RETURN BEFORE EXPENSES)
	Beginning Account		Ending Account		Expenses Paid		Beginning Account		Ending Account		Expenses Paid		Annualized Expense
	Value 1/1/17		Value 6/30/17		During the Period1		Value 1/1/17		Value 6/30/17		During the Period1		Ratio2
Investment Class
Royce Dividend Value Fund	$	1,000.00	$	1,078.14	$	5.51	$	1,000.00	$	1,019.49	$	5.36		1.07	%
Royce International Premier Fund		1,000.00		1,224.58		6.56		1,000.00		1,018.89		5.96		1.19	%
Royce Low-Priced Stock Fund		1,000.00		1,010.90		6.18		1,000.00		1,018.65		6.21		1.24	%
Royce Micro-Cap Fund		1,000.00		1,020.13		7.46		1,000.00		1,017.41		7.45		1.49	%
Royce Micro-Cap Opportunity Fund		1,000.00		1,097.73		6.45		1,000.00		1,018.65		6.21		1.24	%
Royce Opportunity Fund		1,000.00		1,081.71		6.09		1,000.00		1,018.94		5.91		1.18	%
Royce Pennsylvania Mutual Fund		1,000.00		1,048.09		4.72		1,000.00		1,020.18		4.66		0.93	%
Royce Premier Fund		1,000.00		1,087.04		6.00		1,000.00		1,019.04		5.81		1.16	%
Royce Small-Cap Leaders Fund		1,000.00		1,012.64		6.14		1,000.00		1,018.70		6.16		1.23	%
Royce Small-Cap Value Fund		1,000.00		958.13		6.02		1,000.00		1,018.65		6.21		1.24	%
Royce Small/Mid-Cap Premier Fund3		1,000.00		1,057.38		5.00		1,000.00		1,019.93		4.91		0.98	%
Royce Smaller-Companies Growth Fund		1,000.00		1,114.08		6.45		1,000.00		1,018.70		6.16		1.23	%
Royce Special Equity Fund		1,000.00		996.37		5.74		1,000.00		1,019.04		5.81		1.16	%
Royce Special Equity Multi-Cap Fund		1,000.00		1,061.15		5.06		1,000.00		1,019.89		4.96		0.99	%
Royce Total Return Fund		1,000.00		1,027.06		5.98		1,000.00		1,018.89		5.96		1.19	%
Service Class
Royce Dividend Value Fund		1,000.00		1,077.18		6.90		1,000.00		1,018.15		6.71		1.34	%
Royce Global Financial Services Fund		1,000.00		1,098.32		7.75		1,000.00		1,017.41		7.45		1.49	%
Royce International Micro-Cap Fund		1,000.00		1,152.30		8.75		1,000.00		1,016.66		8.20		1.64	%
Royce International Premier Fund		1,000.00		1,223.31		7.94		1,000.00		1,017.65		7.20		1.44	%
Royce Low-Priced Stock Fund		1,000.00		1,009.72		7.42		1,000.00		1,017.41		7.45		1.49	%
Royce Micro-Cap Fund		1,000.00		1,018.82		8.06		1,000.00		1,016.81		8.05		1.61	%
Royce Micro-Cap Opportunity Fund		1,000.00		1,097.00		7.75		1,000.00		1,017.41		7.45		1.49	%
Royce Opportunity Fund		1,000.00		1,079.87		7.68		1,000.00		1,017.41		7.45		1.49	%
Royce Pennsylvania Mutual Fund		1,000.00		1,046.24		6.39		1,000.00		1,018.55		6.31		1.26	%
Royce Premier Fund		1,000.00		1,084.60		7.70		1,000.00		1,017.41		7.45		1.49	%
Royce Small-Cap Leaders Fund		1,000.00		1,011.38		7.43		1,000.00		1,017.41		7.45		1.49	%
Royce Small-Cap Value Fund		1,000.00		957.92		7.23		1,000.00		1,017.41		7.45		1.49	%
Royce Small/Mid-Cap Premier Fund3		1,000.00		1,056.85		6.12		1,000.00		1,018.84		6.01		1.20	%
Royce Smaller-Companies Growth Fund		1,000.00		1,112.62		7.80		1,000.00		1,017.41		7.45		1.49	%
Royce Special Equity Fund		1,000.00		995.00		6.88		1,000.00		1,017.90		6.95		1.39	%
Royce Special Equity Multi-Cap Fund		1,000.00		1,059.50		6.33		1,000.00		1,018.65		6.21		1.24	%
Royce Total Return Fund		1,000.00		1,025.40		7.33		1,000.00		1,017.55		7.30		1.46	%

The Royce Funds 2017 Semiannual Report to Shareholders | 125

Understanding Your Fund’s Expenses (unaudited) (continued)

	ACTUAL						HYPOTHETICAL (5% PER YEAR RETURN BEFORE EXPENSES)
	Beginning Account		Ending Account		Expenses Paid		Beginning Account		Ending Account		Expenses Paid		Annualized Expense
	Value 1/1/17		Value 6/30/17		During the Period1		Value 1/1/17		Value 6/30/17		During the Period1		Ratio2
Consultant Class
Royce Dividend Value Fund	$	1,000.00	$	1,073.32	$	10.74	$	1,000.00	$	1,014.43	$	10.44		2.09	%
Royce International Premier Fund		1,000.00		1,218.42		12.05		1,000.00		1,013.93		10.94		2.19	%
Royce Micro-Cap Fund		1,000.00		1,013.82		12.93		1,000.00		1,011.95		12.92		2.59	%
Royce Opportunity Fund		1,000.00		1,075.63		11.68		1,000.00		1,013.54		11.33		2.27	%
Royce Pennsylvania Mutual Fund		1,000.00		1,041.57		9.87		1,000.00		1,015.12		9.74		1.95	%
Royce Premier Fund		1,000.00		1,081.06		11.46		1,000.00		1,013.79		11.08		2.22	%
Royce Small-Cap Value Fund		1,000.00		953.23		11.24		1,000.00		1,013.29		11.58		2.32	%
Royce Small/Mid-Cap Premier Fund3		1,000.00		1,051.72		10.63		1,000.00		1,014.43		10.44		2.09	%
Royce Smaller-Companies Growth Fund		1,000.00		1,108.00		11.71		1,000.00		1,013.69		11.18		2.24	%
Royce Special Equity Fund		1,000.00		991.07		10.76		1,000.00		1,013.98		10.89		2.18	%
Royce Special Equity Multi-Cap Fund		1,000.00		1,054.82		10.14		1,000.00		1,014.93		9.94		1.99	%
Royce Total Return Fund		1,000.00		1,022.03		10.88		1,000.00		1,014.03		10.84		2.17	%
Institutional Class
Royce Dividend Value Fund		1,000.00		1,080.55		4.59		1,000.00		1,020.38		4.46		0.89	%
Royce Global Financial Services Fund		1,000.00		1,101.49		5.42		1,000.00		1,019.64		5.21		1.04	%
Royce Low-Priced Stock Fund		1,000.00		1,009.66		6.48		1,000.00		1,018.35		6.51		1.30	%
Royce Opportunity Fund		1,000.00		1,082.57		5.53		1,000.00		1,019.49		5.36		1.07	%
Royce Pennsylvania Mutual Fund		1,000.00		1,048.01		4.27		1,000.00		1,020.63		4.21		0.84	%
Royce Premier Fund		1,000.00		1,087.15		5.54		1,000.00		1,019.49		5.36		1.07	%
Royce Small-Cap Value Fund		1,000.00		959.12		5.29		1,000.00		1,019.39		5.46		1.09	%
Royce Smaller-Companies Growth Fund		1,000.00		1,114.54		6.19		1,000.00		1,018.94		5.91		1.18	%
Royce Special Equity Fund		1,000.00		996.79		5.30		1,000.00		1,019.49		5.36		1.07	%
Royce Special Equity Multi-Cap Fund		1,000.00		1,061.20		4.55		1,000.00		1,020.38		4.46		0.89	%
Royce Total Return Fund		1,000.00		1,028.12		5.33		1,000.00		1,019.54		5.31		1.06	%
W Class
Royce Premier Fund		1,000.00		1,086.06		6.16		1,000.00		1,018.89		5.96		1.19	%
Royce Total Return Fund		1,000.00		1,026.72		6.28		1,000.00		1,018.60		6.26		1.25	%
R Class
Royce International Premier Fund		1,000.00		1,220.75		9.58		1,000.00		1,016.17		8.70		1.74	%
Royce Low-Priced Stock Fund		1,000.00		1,007.68		9.16		1,000.00		1,015.67		9.20		1.84	%
Royce Opportunity Fund		1,000.00		1,078.83		9.28		1,000.00		1,015.87		9.00		1.80	%
Royce Pennsylvania Mutual Fund		1,000.00		1,043.10		8.31		1,000.00		1,016.66		8.20		1.64	%
Royce Premier Fund		1,000.00		1,082.93		9.55		1,000.00		1,015.62		9.25		1.85	%
Royce Small-Cap Leaders Fund		1,000.00		1,010.28		9.17		1,000.00		1,015.67		9.20		1.84	%
Royce Small-Cap Value Fund		1,000.00		955.35		9.07		1,000.00		1,015.52		9.35		1.87	%
Royce Small/Mid-Cap Premier Fund		1,000.00		1,053.46		8.60		1,000.00		1,016.41		8.45		1.69	%
Royce Smaller-Companies Growth Fund		1,000.00		1,110.89		9.63		1,000.00		1,015.67		9.20		1.84	%
Royce Total Return Fund		1,000.00		1,024.13		8.93		1,000.00		1,015.97		8.90		1.78	%
K Class
Royce Opportunity Fund		1,000.00		1,078.30		9.07		1,000.00		1,016.07		8.80		1.76	%
Royce Pennsylvania Mutual Fund		1,000.00		1,042.81		9.83		1,000.00		1,015.17		9.69		1.94	%
Royce Small-Cap Value Fund		1,000.00		955.27		9.65		1,000.00		1,014.93		9.94		1.99	%
Royce Total Return Fund		1,000.00		1,025.92		8.14		1,000.00		1,016.76		8.10		1.62	%

1	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value for the period, multiplied by 181 days in the most recent fiscal half-year divided by 365 days (to reflect the half-year period).
2	Annualized expense ratio used to derive figures in the table is based on the most recent fiscal half-year.
3	GiftShare accounts pay an annual $50 trustee fee to Alliance Trust Company, as trustee. If these fees were included above, your costs would be higher.

126 | The Royce Funds 2017 Semiannual Report to Shareholders

Trustees and Officers

All Trustees and Officers may be reached c/o The Royce Funds, 745 Fifth Avenue, New York, NY 10151

Charles M. Royce, Trustee¹
Age: 77 | Number of Funds Overseen: 22 | Tenure: Since 1982
Non-Royce Directorships: Director of TICC Capital Corp.
Principal Occupation(s) During Past Five Years: Chairman of the Board of Managers of Royce & Associates, LP (“Royce”), the Trust’s investment adviser; Chief Executive Officer (1972-June 2017), President (1972-July 2014) of Royce.

Christopher D. Clark, Trustee¹, President
Age: 52 | Number of Funds Overseen: 22 | Tenure: Since 2014
Principal Occupation(s) During Past Five Years: Chief Executive Officer (since July 2017), 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, Trustee
Age: 68 | Number of Funds Overseen: 22 | 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).

Stephen L. Isaacs, Trustee
Age: 77 | Number of Funds Overseen: 22 | 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, Trustee
Age: 75 | Number of Funds Overseen: 40 | 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, Trustee
Age: 77 | Number of Funds Overseen: 22 | 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, Trustee
Age: 71 | Number of Funds Overseen: 40 | 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, Trustee
Age: 59 | Number of Funds Overseen: 22 | 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: 49 | 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: 55 | 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: 51 | Tenure: Since 2015
Principal Occupation(s) During Past Five Years: Chief Financial Officer, Chief Administrative Officer, and Managing Director 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: 50 | Tenure: 1996-2001 and Since 2002
Principal Occupation(s) During Past Five Years: General Counsel, Managing Director, and, since June 2015, a Member of the Board of Managers of Royce. Chief Legal and Compliance Officer and Secretary of Royce.

Lisa Curcio, Chief Compliance Officer
Age: 57 | 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 Trustee.

Trustees will hold office until their successors have been duly elected and qualified or until their earlier resignation or removal. The Statement of Additional Information, which contains additional information about the Trust’s trustees and officers, is available and can be obtained without charge at www.roycefunds.com or by calling (800) 221-4268.

The Royce Funds 2017 Semiannual Report to Shareholders | 127

Board Approval of Investment Advisory Agreements

At meetings held on June 5-6, 2017, the Board of Trustees of The Royce Fund (the “Board”), including all of the non-interested trustees, approved: (i) the continuation of an investment advisory agreement between Royce & Associates, LP (“R&A”) and The Royce Fund (“TRF”) relating to Royce Pennsylvania Mutual Fund; and (ii) amended and restated investment advisory agreements between R&A and TRF relating to each of Royce Micro-Cap Fund, Royce Premier Fund, Royce Low-Priced Stock Fund, Royce Total Return Fund, Royce Small/Mid-Cap Premier Fund (formerly Royce Heritage Fund), Royce Opportunity Fund, Royce Special Equity Fund, Royce Small-Cap Value Fund, Royce Smaller-Companies Growth Fund, Royce Small-Cap Leaders Fund, Royce Dividend Value Fund, Royce Micro-Cap Opportunity Fund, Royce Special Equity Multi-Cap Fund, Royce Global Financial Services Fund, Royce International Micro-Cap Fund, and Royce International Premier Fund (each, an “Investment Advisory Agreement” and collectively, the “Investment Advisory Agreements”). The Investment Advisory Agreements for each series of TRF other than Royce Pennsylvania Mutual Fund (“PMF”) were amended and restated to reflect new lower asset breakpoints; such amended and restated agreements are otherwise substantially identical to the previously existing agreements. In reaching these decisions, the Board reviewed, among other things, information prepared internally by R&A and independently by Morningstar Associates, LLC (“Morningstar”) containing detailed investment advisory fee, expense ratio, and investment performance comparisons for each series of TRF (each, a “Fund” and collectively, the “Funds”) with other mutual funds in its “peer group” and “category”, 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 the Board prepared by independent counsel to the non-interested trustees. R&A also provided the trustees with an analysis of its profitability with respect to providing investment advisory services to each Fund. In addition, the Board took into account information furnished throughout the year at regular Board meetings, including reports on investment performance, shareholder services, distribution fees and expenses, regulatory compliance, brokerage commissions and research, brokerage and other execution products and services provided to the Funds. The 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, payments made to affiliates of R&A, as well as payments made by R&A relating to distribution of Fund shares and other direct and indirect benefits to R&A and its affiliates from their relationship with the Funds. The trustees also met throughout the year with investment advisory personnel from R&A. The Board, in its deliberations, recognized that, for many of the Funds’ shareholders, 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 shareholders between R&A and each of the Funds. In considering factors relating to the approval of the continuance of the existing Investment Advisory Agreement for PMF and the approval of each amended and restated Investment Advisory Agreement for each Fund other than PMF, the non-interested trustees received assistance and advice from, and met separately with, their independent legal counsel. While continuation of the investment advisory and administrative arrangements for each Fund was considered at the same Board meeting, the trustees dealt with each Fund separately. Among other factors, the trustees considered the following:

The nature, extent and quality of services provided by R&A:
The Board considered the following factors to be of fundamental importance to its consideration of whether to approve the continuance of the existing Investment Advisory Agreement for PMF and to approve each amended and restated Investment Advisory Agreement for each Fund other than PMF: (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 many of 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 each Fund, other open-end mutual funds, and closed-end 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 shareholder interests as exemplified by capping expenses on smaller funds, closing funds to new investors when R&A believed such closings were in the best interests of existing shareholders, establishing breakpoints for a number of funds and providing expansive shareholder reporting and communications. The Board also noted that R&A’s compensation policy arrangements strongly encourage portfolio manager investment in each Fund that they manage. The Board also 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. The Board considered the fact that R&A provided certain administrative services to the Funds at cost pursuant to the Administration Agreement between TRF and R&A. The Board determined that the services to be provided to the Funds by R&A would be the same as those that it previously provided to the Funds. The Board also took into consideration the histories, reputations and backgrounds of R&A’s portfolio managers for each Fund, finding that these would likely have an impact on the continued success of such Fund. The Board also noted R&A’s ability to attract and retain qualified and experienced personnel. Lastly, the Board noted that R&A officers, employees, and their families had substantial amounts invested in various Funds. The Board 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 each Fund.

Investment performance of the Funds and R&A:
In light of R&A’s risk-averse approach to investing, the trustees believe that risk-adjusted performance continues to be the most appropriate measure of each Fund’s investment performance. One measure of risk-adjusted performance the trustees have historically used in their review of each Fund’s 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 Board attaches primary importance to risk-adjusted performance over relatively long periods of time, typically 3 to 10 years.

Overall, the Board noted that financial markets in 2016 were marked by increased return dispersion, declining correlation, and a steepening yield curve. These factors resulted in a very strong year for small-cap stocks and an even better year for small-cap value stocks and cyclical sectors. This market environment enabled many of the Funds to outperform their peers in 2016 as evidenced by their respective Sharpe Ratios. Fourteen of the seventeen Funds had higher percentile rankings in their Morningstar category in 2016 than they did in 2015, with many of those Funds achieving significant improvements. While the trustees recognize that one- year performance does not define a trend and place primary emphasis on medium-term and longer-term risk adjusted performance as referenced above, they also noted that the Funds’ improved relative risk-adjusted performance during the more historically customary market environment that prevailed during 2016 was not insignificant. Along those lines, the Board noted that the Funds also generally underperformed their peers, as evidenced by their respective Sharpe Ratios, from approximately March 2009 through the end of 2015. This post-2008 market period was marked by historically low interest rates and significant U.S. Federal Reserve market intervention. During this period, highly leveraged, non-earning companies and yield-oriented securities (e.g., master limited

128 | The Royce Funds 2017 Semiannual Report to Shareholders

Board Approval of Investment Advisory Agreements (continued)

partnerships, real estate investment trusts, and utilities) generally outperformed the higher 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) and cyclical companies favored by the Funds. The Board also noted, however, as discussed below, that the relative performance for certain Funds during the more historically customary market cycle preceding the 2008 financial crisis was quite strong.

Royce Pennsylvania Mutual Fund (“PMF”), Royce Small/Mid-Cap Premier Fund (formerly Royce Heritage Fund) (“RHF”), Royce Micro-Cap Fund (“RMC”), and Royce Small-Cap Leaders Fund (“ROH”) exemplified the trend of stronger 1-year relative risk-adjusted performance and weaker 3-year, 5-year, and 10-year relative risk-adjusted performance. For example, the Sharpe Ratio for RHF ranked in the 1st, 3rd, 4th, and 4th quartiles in the Morningstar Mid-Cap Growth category for the 1-year, 3-year, 5-year, and 10-year periods, respectively, ended December 31, 2016. PMF (1st, 4th, 4th, and 3rd quartiles), RMC (2nd, 4th, 4th, and 4th quartiles), and ROH (2nd, 4th, 4th, and 3rd quartiles) demonstrated similar performance patterns in the Morningstar Small Blend category for the 1-year, 3-year, 5-year, and 10-year periods ended December 31, 2016.

Royce Total Return Fund (“RTR”) notably differed from the above-referenced trend, with its Sharpe Ratio ranking in the 1st, 2nd, 2nd, and 1st quartiles in the Morningstar Small Blend category for the 1-year, 3-year, 5-year, and 10-year periods, respectively, ended December 31, 2016.

Royce Premier Fund (“RPR”), Royce Special Equity Fund (“RSE”), and Royce Dividend Value Fund (“RDV”) exhibited slightly different risk-adjusted performance patterns in their respective Morningstar categories during the relevant periods. These Funds produced stronger 1-year relative performance (RPR and RSE: 1st quartile; RDV: 2nd quartile), weaker 3-year relative performance (RPR and RSE: 3rd quartile; RDV: 4th quartile), weaker 5-year relative performance (RPR, RSE, and RDV: 4th quartile), and stronger 10-year relative performance (RPR and RDV: 2nd quartile; RSE: 1st quartile).

Royce Global Financial Services Fund (“RFS”) also differed from the above-referenced trends, with its Sharpe Ratio ranking in the 3rd, 4th, 3rd, and 1st quartiles in its Morningstar category for the 1-year, 3-year, 5-year, and 10-year periods, respectively, ended December 31, 2016.

Royce Low-Priced Stock Fund (“RLP”), Royce Small-Cap Value Fund (“RVV”), Royce Smaller-Companies Growth Fund (“RVP”), and Royce Opportunity Fund (“ROF”) exhibited weaker relative risk-adjusted performance in their respective Morningstar categories on a short-term, medium-term, and longer-term basis. For example, the Sharpe Ratio for RVP ranked in the 3rd, 3rd, 4th, and 4th quartiles in the Morningstar Small Growth category for the 1-year, 3-year, 5-year, and 10-year periods, respectively, ended December 31, 2016 while the Sharpe Ratio for ROF ranked in the 3rd, 4th, 4th, and 4th quartiles in the Morningstar Small Value category for the 1-year, 3-year, 5-year, and 10-year periods, respectively, ended December 31, 2016. The Board noted that RLP’s past over-weightings in materials companies, particularly Canadian gold and silver mining companies, and its underweighting of financials in 2016, contributed to its Sharpe Ratio ranking in the 4th quartile in the Morningstar Small Blend category for the 1-year, 3-year, 5-year, and 10-year periods ended December 31, 2016. The Board further noted that RVV’s overweight position and poor stock selection in the consumer discretionary sector along with a significant allocation to cash during 2016 contributed to its Sharpe Ratio ranking in the 4th, 3rd, 4th, and 4th quartiles in the Morningstar Small Value category for the 1-year, 3-year, 5-year, and 10-year periods, respectively, ended December 31, 2016.

Royce International Micro-Cap Fund (“RMI”), Royce International Premier Fund (“RIP”), Royce Micro-Cap Opportunity Fund (“ROS”), and Royce Special Equity Multi-Cap Fund (“RSM”) have been in existence for less than 10 years and demonstrated disparate performance patterns. RMI and RIP produced stronger 1-year relative performance (RMI: 1st quartile; RIP: 2nd quartile), stronger 3-year relative performance (RMI and RIP: 1st quartile), and weaker 5-year relative performance (RMI: 4th quartile; RIP: 3rd quartile) in their respective Morningstar categories. ROS and RSM, on the other hand, exhibited weaker relative risk-adjusted performance in their respective Morningstar categories for the 1-year (ROS: 3rd quartile; RSM: 4th quartile), 3-year (ROS and RSM: 4th quartile), and 5-year (ROS and RSM: 4th quartile) periods ended December 31, 2016. The Board noted that even though RMI, RIP, ROS, and RSM now have more than 5 years of performance, R&A’s general process of investing net inflows over longer periods of time contributed to larger cash positions and market lagging performance for most of these Funds in their initial periods of operation.

The Board also noted that the peer groups included in the Morningstar materials for a number of Funds may not be appropriate for performance comparisons and that R&A had augmented the Morningstar data provided to the Board throughout the years by including performance information for other funds that R&A believes are more comparable to those Funds.

In addition to the risk–adjusted performance of each Fund, the Board also reviewed and considered the absolute total returns for each Fund, down market performance and, for Funds in existence for such periods, long-term performance records over periods of 10 years or longer. The Board also considered it important to look beyond the current snapshot of performance as of December 31, 2016 and therefore examined extended performance histories for each Fund using monthly rolling average return periods through March 31, 2017. The Board also noted that many of the Funds outperformed their respective benchmarks for at least a majority of the monthly rolling average annual return periods during the 3-year, 5-year, and 10-year periods ended March 31, 2017.

The 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 the periods prior to the U.S. Federal Reserve’s near zero interest rate policy and related market interventions as well as in 2016 as referenced above. Although the 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 equity mutual funds to manage each Fund. The Board determined that R&A continued to be an appropriate investment adviser for each Fund and concluded that the performance of PMF supported the approval of the continuance of its existing Investment Advisory Agreement and that the performance of each Fund other than PMF supported the approval of its amended and restated Investment Advisory Agreement.

Cost of the services provided and profits realized by R&A from its relationship with each Fund:
The Board considered the cost of the services provided by R&A and the profits realized by R&A from its relationship with each Fund. As part of the analysis, the Board discussed with R&A its methodology in allocating its costs to each Fund and concluded that its allocations were reasonable. The Board noted that at times in the past R&A had closed certain of the Funds to new investors because of the rate of growth in Fund assets. The Board also noted that certain Funds were not profitable to R&A during the year ended December 31, 2016. The Board concluded that R&A’s profits with respect to each Fund that was profitable 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:
The 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

The Royce Funds 2017 Semiannual Report to Shareholders | 129

Board Approval of Investment Advisory Agreements (concluded)

there is potential for realization of any further economies of scale. The Board noted the time and effort involved in managing portfolios of small- and micro-cap stocks and that they did not involve the same efficiencies as do portfolios of large-cap stocks. The Board noted that in 2004 breakpoints were added to the investment advisory fees for all of the then-existing Funds except PMF (PMF’s fee schedule already had breakpoints) and that the investment advisory fees for all Funds organized since 2004 included breakpoints. The Board also noted the new proposed lower asset breakpoints for each Fund other than PMF. The Board concluded that the current fee structure for PMF and the new proposed fee structure for each Fund other than PMF were reasonable and that the relevant shareholders sufficiently participated in economies of scale.

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:
The 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 micro-, small-, and mid-cap stocks, as provided by Morningstar. The Board noted the importance of the net expense ratio in measuring a fund’s efficiency, particularly in light of the variations in the mutual fund industry as to which entity is responsible for particular types of expenses. The Board noted that the net expense ratio for ROS ranked within the 1st quintile among its Morningstar peers while the net expense ratios for PMF and RIP fell within the 2nd quintile among their respective Morningstar peers. The Board further noted that the net expense ratios for RHF, RDV, and RFS ranked within the middle quintile among their respective Morningstar peers.

Although the net expense ratio for the oldest share class for each of RPR (1.16%), RTR (1.19%), ROF (1.19%), RSE (1.17%), RVV (1.48%), ROH (1.49%), and RSM (1.23%) ranked within the 4th quintile among their respective Morningstar peers, the trustees noted that such expense ratios were not significantly higher than their respective peer group medians (e.g., RPR and RSM: 7 basis points higher than their respective peer group medians; RSE: 8 basis points higher than its peer group median; ROF: 9 basis points higher than its peer group median; RTR and RVV: 12 basis points higher than their respective peer group medians; and ROH: 14 basis points higher than its peer group median). The Board also noted that the oldest share class for RVV, ROH, and RSM is the Service Class, which includes a 0.25% Rule 12b-1 fee. This makes comparisons to peers more difficult for these Funds. Overall, the trustees believed that the net expense ratios for these 4th quintile Funds were reasonable in light of the average expense ratio of 1.41% for the 110 small-cap funds in the Morningstar small-cap category (oldest share class only, non-institutional, non-index, non-ETF funds with Rule 12b-1 fees of 0.25%).

The Board noted that the remaining Funds (i.e., RMC, RLP, RVP, and RMI) had 5th quintile net expense ratios among their Morningstar peers. Although these rankings can be attributed in large part to the investment advisory fees for the Funds, such fees are consistent with those of other R&A-advised open-end funds. With respect to RMC, the trustees noted that its net expense ratio of 1.48% was 22 basis points higher than its peer group median but only 1 basis point higher than the average net expense ratio for the 44 non-institutional, non-ETF domestic funds with weighted average market capitalizations of less than $1 billion within the Morningstar peer group. With respect to RLP, the trustees noted that its net expense ratio of 1.49% was 14 basis points higher than its peer group median but only 8 basis points higher than the 1.41% average for the 110 small-cap funds in the Morningstar small-cap category (oldest share class only, non-institutional, non-index, non-ETF funds with Rule 12b-1 fees of 0.25%). With respect to RVP, the trustees noted that its net expense ratio of 1.49% was 27 basis points higher than its peer group median but only 8 basis points higher than the 1.41% average for the 110 small-cap funds in the Morningstar small-cap category (oldest share class only, non-institutional, non-index, non-ETF funds with Rule 12b-1 fees of 0.25%). With respect to RMI, the trustees noted that its net expense ratio of 1.64% was 14 basis points higher than the median for its 8-fund peer group. The Board also noted that RMC, RLP, RVP, and RMI had the 3rd-lowest, 3rd-lowest, tied for 2nd-lowest, and lowest weighted average market capitalizations, respectively, in their Morningstar peer groups. After taking into consideration that the level of work necessary to invest in domestic and/or international micro-cap and small-cap equity securities is significantly greater than that necessary to invest in larger-cap securities, the Board noted that the basis point differentials in investment advisory fees, which in large measure give rise to the generally higher net expense ratios for RMC, RLP, RVP, and RMI, were appropriate for those Funds.

The Board also noted that R&A manages each 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 Board which demonstrated that mutual funds with high active share scores had higher expense ratios than mutual funds with lower active share scores due to the resources required for the active management of those funds. The Board noted that, for the year ended December 31, 2016, PMF and RMC had active shares of 88% and 89%, respectively, four Funds had active shares between 90% and 94%, and 11 Funds had active shares of 95% or greater.

The Board further noted that R&A has waived, both during the year ended December 31, 2016 and during earlier periods, investment advisory fees for numerous Funds in order to maintain expense ratios at competitive levels and acknowledged R&A’s intention to continue this expense limitation practice. In particular, R&A waived its entire investment advisory fee for RMI in 2016. The Board noted that the contractual investment advisory fee rates for RDV and RHF had been reduced as of May 1, 2016 to be more competitive with those of their respective peers. The Board also noted the new proposed lower asset breakpoints for each Fund other than PMF. The 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, each Fund’s advisory fees compared favorably to these other accounts.

No single factor was cited as determinative to the decision of the trustees. Rather, after weighing all of the considerations and conclusions discussed above, the entire Board, including all the non-interested trustees, determined to approve the continuation of the existing Investment Advisory Agreement for PMF, and determined to approve each amended and restated Investment Advisory Agreement with the lower asset breakpoints for each Fund other than PMF, concluding that a contract continuation on the existing terms for PMF, and that contract approvals on the amended terms for all of the Funds other than PMF, were in the best interests of the shareholders of the respective Funds and that each Fund’s investment advisory fee rate was reasonable in relation to the services provided.

130 | The Royce Funds 2017 Semiannual Report to Shareholders

Notes to Performance and Other Important Information

The thoughts expressed in this report concerning recent market movements and future prospects for small company stocks are solely the opinion of Royce at June 30, 2017, 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, 2017 and are subject to change at any time without notice. There can be no assurance that securities mentioned in this report will be included in any Royce-managed portfolio in the future.

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 2000 Value and Growth Indexes consist of the respective value and growth stocks within the Russell 2000 as determined by Russell Investments. The Russell 1000 Index is an index of domestic large-cap stocks. It measures the performance of the 1,000 largest 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 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 2500 is an unmanaged, capitalization-weighted index of the 2,500 smallest publicly traded U.S. companies in the Russell 3000 index. The Russell Global ex-U.S. Small Cap Index is an index of global small-cap stocks, excluding the United States. The Russell Global ex-U.S. Large Cap Index is an index of global large-cap stocks, excluding the United States. The S&P 500 is an index of U.S. large-cap stocks, 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 Nasdaq 100 is an index of the 100 largest and most active non-financial domestic and international issues 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. Royce has not independently verified the above described information.

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. Standard deviation is a statistical measure within which a fund’s total returns have varied over time. The greater the standard deviation, the greater a fund’s volatility. For the Morningstar Small Blend Category: © 2017 Morningstar. All Rights Reserved. The information regarding the category in this piece is: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. 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%. 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. (Please see “Primary Risks for Fund Investors” in the prospectus.) Investments in foreign securities, which generally may involve political, economic, currency, and other risks not encountered in U.S. investments. (Please see “Investing in Foreign Securities” in the prospectus.) A Fund that invests a significant portion of its assets in a limited number of stocks may be subject to considerably more risk than a more broadly diversified Fund because a decline in the value of any of these stocks would cause that Fund’s overall value to decline to a greater degree. A broadly diversified portfolio does not, however, ensure a profit for a Fund or guarantee against loss. Please read the prospectus carefully before investing or sending money. A copy of the Funds’ current prospectus and Statement of Additional Information may be obtained by calling (800) 221-4268 or by visiting www.roycefunds.com. All publicly released material Fund information is disclosed by the Funds on their website at www.roycefunds.com. The Royce Funds is a service mark of The Royce Funds. Distributor: Royce Fund Services, LLC.

Forward-Looking Statements
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:

• 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 review and report use 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 shareholder communications or reports.

The Royce Funds 2017 Semiannual Report to Shareholders | 131

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 (202) 942-8090. The Funds’ complete schedules of investments are updated quarterly and are available at www.roycefunds.com.

This page is not part of the 2017 Semiannual Report to Shareholders

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About The Royce Funds	Contact Us
Unparalleled Knowledge + Experience Pioneers in small-cap investing, with 40+ years of experience, depth of knowledge, and focus. Independent Thinking The confidence to go against consensus, the insight to uncover opportunities others might miss, and the tenacity to stay the course through market cycles.	GENERAL INFORMATION General Royce Funds information including: • How to open an account • An overview of our firm and Funds • Ordering literature including Prospectuses (800) 221-4268
Specialized Approaches Strategies that use value, core, or growth investment approaches to select micro-cap, small-cap, and mid-cap companies.	ACCOUNT INFORMATION Speak with a representative about: • Your account, transactions, and forms (800) 841-1180
Unwavering Commitment
Our team of 17 portfolio managers have significant personal investments in the strategies they manage.	FINANCIAL ADVISORS, CONSULTANTS, AND INSTITUTIONS Speak with your regional Royce contact regarding: • Scheduling a meeting or call • Information about our firm, strategies, and funds • Resources for financial professionals, such as   portfolio attribution reports (800) 337-6923
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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.

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.

Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not Applicable.

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.

THE ROYCE FUND

BY:	/c/ Christopher D. Clark
	Christopher D. Clark
	President

Date: August 29, 2017

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.

THE ROYCE FUND		THE ROYCE FUND
BY:	/c/ Christopher D. Clark	BY:	/s/ Peter K. Hoglund
	Christopher D. Clark		Peter K. Hoglund
	President		Chief Financial Officer
Date: August 29, 2017		Date: August 29, 2017