N-CSR 1 e45905_rmt.htm
 
 
 
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: 811-04875
 
Name of Registrant: Royce Micro-Cap Trust, Inc.
 
Address of Registrant: 745 Fifth Avenue
New York, NY 10151

Name and address of agent for service:   John E. Denneen, Esquire
    745 Fifth Avenue
    New York, NY 10151
     
Registrant’s telephone number, including area code: (212) 508-4500
Date of fiscal year end: December 31
Date of reporting period: January 1, 2016 – December 31, 2016
     

Item 1. Reports to Shareholders.

       
     
    DECEMBER 31, 2016
     
     
     
    2016 Annual
    Review and Report to Stockholders
     
     
     
     
     
     
     
    Royce Global Value Trust
       
    Royce Micro-Cap Trust
       
    Royce Value Trust
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
    roycefunds.com
       
       
       

A Few Words on Closed-End Funds

Royce & Associates, LP manages three closed-end funds: Royce Global Value Trust, which invests primarily in companies with headquarters outside of the United States, Royce Micro-Cap Trust, which invests primarily in micro-cap securities; and Royce Value Trust, which invests primarily in small-cap securities. A closed-end fund is an investment company whose shares are listed and traded on a stock exchange. Like all investment companies, including open-end mutual funds, the assets of a closed-end fund are professionally managed in accordance with the investment objectives and policies approved by the fund’s Board of Directors. A closed-end fund raises cash for investment by issuing a fixed number of shares through initial and other public offerings that may include shelf offerings and periodic rights offerings. Proceeds from the offerings are invested in an actively managed portfolio of securities. Investors wanting to buy or sell shares of a publicly traded closed-end fund after the offerings must do so on a stock exchange, as with any publicly traded stock. Shares of closed-end funds frequently trade at a discount to their net asset value. This is in contrast to open-end mutual funds, which sell and redeem their shares at net asset value on a continuous basis.

A Closed-End Fund Can Offer Several Distinct Advantages
A closed-end fund does not issue redeemable securities or offer its securities on a continuous basis, so it does not need to liquidate securities or hold uninvested assets to meet investor demands for cash redemptions.
   
In a closed-end fund, not having to meet investor redemption requests or invest at inopportune times can be effective for value managers who attempt to buy stocks when prices are depressed and sell securities when prices are high.
   
A closed-end fund may invest in less liquid portfolio securities because it is not subject to potential stockholder redemption demands. This is potentially beneficial for Royce-managed closed-end funds, with significant investments in small- and micro-cap securities.
   
The fixed capital structure allows permanent leverage to be employed as a means to enhance capital appreciation potential.
   
Royce Micro-Cap Trust and Royce Value Trust distribute capital gains, if any, on a quarterly basis. Each of these Funds has adopted a quarterly distribution policy for its common stock.

We believe that the closed-end fund structure can be an appropriate investment for a long-term investor who understands the benefits of a more stable pool of capital.

Why Dividend Reinvestment Is Important
A very important component of an investor’s total return comes from the reinvestment of distributions. By reinvesting distributions, our investors can maintain an undiluted investment in a Fund. To get a fair idea of the impact of reinvested distributions, please see the charts on pages 12 and 13. For additional information on the Funds’ Distribution Reinvestment and Cash Purchase Options and the benefits for stockholders, please see page 14 or visit our website at www.roycefunds.com.

Managed Distribution Policy
The Board of Directors of each of Royce Micro-Cap Trust and Royce Value Trust has authorized a managed distribution policy (“MDP”). Under the MDP, Royce Micro-Cap Trust and Royce Value Trust pay quarterly distributions at an annual rate of 7% of the average of the prior four quarter-end net asset values, with the fourth quarter being the greater of these annualized rates or the distribution required by IRS regulations. With each distribution, the Fund will issue a notice to its stockholders and an accompanying press release that provides detailed information regarding the amount and composition of the distribution (including whether any portion of the distribution represents a return of capital) and other information required by a Fund’s MDP. You should not draw any conclusions about a Fund’s investment performance from the amount of distributions or from the terms of a Fund’s MDP. A Fund’s Board of Directors may amend or terminate the MDP at any time without prior notice to stockholders; however, at this time there are no reasonably foreseeable circumstances that might cause the termination of any of the MDPs.


This page is not part of the 2016 Annual Report to Stockholders

       

Table of Contents      
       
       
Annual Review      
       
Letter to Our Stockholders   2  
       
Performance   5  
       
       
Annual Report to Stockholders      
       
Managers’ Discussions of Fund Performance      
       

Royce Global Value Trust

  6  
       

Royce Micro-Cap Trust

  8  
       

Royce Value Trust

  10  
       
History Since Inception   12  
       
Distribution Reinvestment and Cash Purchase Options   14  
       
Schedules of Investments and Other Financial Statements      
       

Royce Global Value Trust

  15  
       

Royce Micro-Cap Trust

  29  
       

Royce Value Trust

  44  
       
Directors and Officers   60  
       
Notes to Performance and Other Important Information   61  
       
Results of Stockholders Meetings   62  




This page is not part of the 2016 Annual Report to Stockholders

       

Letter to Our Stockholders

A MOST WONDERFUL YEAR FOR SMALL-CAPS,
VALUE, AND CYCLICALS
By any measure, 2016 was a terrific year for domestic small-cap stocks, one that featured a double-digit positive return for the Russell 2000 Index, which advanced 21.3%, and a solid advantage over their large-cap counterparts. It was an even better year for small-cap value stocks and a highly rewarding one for cyclical sectors. These last two factors were critical in boosting results for certain active management approaches within the asset class, including a number of our own. Arguably even more important was what these developments may be telling us about the subsequent direction of small-cap equity returns. We flesh out the details later in this letter, but these three reversals—positive results for small-caps, leadership for value over growth, and outperformance for cyclicals—should be key in setting the tone for the direction of small-caps going forward. They coalesced around the central, normalizing force of rising interest rates.

     The major impact of these reversals was both highly welcome and long overdue. We saw 2015—a year in which large-cap beat small-cap, the Russell 2000 had a negative return, and market leadership was extremely narrow—as a hinge year. It marked the transition out of the period that began in 2011, when an unprecedented amount of monetary intervention into the global economy had the unintended effect of stoking an intense appetite for yield and safety at one extreme of the U.S. equity markets and a hunger for high risk at the other. The bottom of a commodity super cycle, with the attendant slowdowns in the world’s largest developing markets, only exacerbated the challenges then faced by value stocks and active management approaches.
    As has usually been the case historically, the longer market trends last, the more regularly they are mistaken for permanent realignments. In this most recent instance, the consensus lined up around the perpetuation of near-zero rates, growth stock dominance, and the futility of active management. Whether in good times or bad for our own approaches, however, we have always stayed mindful of the fact that trends do not last forever—they persist, then, more often than not, they reverse. This investment truism should serve as a corrective for those who would take the example of a highly anomalous period for the markets and economy to validate an implacable bias against active management.

THE POWER OF RATES AND THE IMPACT
OF THE PARADIGM SHIFT

Even as small-cap specialists, we recognize that few forces act as powerfully on the value of investments as interest rates. The effects can be as obvious as they are subtle. We think three conditions matter most: the level of rates, the spread between short- and long-term rates, and the disparity in borrowing rates between better-run companies and worse ones. Capitalism tends to best foster economic growth when short rates hover a bit above inflation; when long rates are high enough to encourage lenders but not so high as to discourage borrowers; and when there is a premium for fiscal prudence and a commensurate penalty for profligate debtors. During the era of zero (or near-zero) rates—roughly 2011-2015—these historically “normal” conditions were largely absent. Yet we believe they began to manifest themselves again in 2016, marking a paradigm shift to a period of higher rates and a consequent reassessment of the relative values of financial assets. More normalized rates have historically been better for stocks than


2 | This page is not part of the 2016 Annual Report to Stockholders

       

LETTER TO OUR STOCKHOLDERS

bonds. More important for our purposes, they have also supported small-caps over large, value over growth stocks, and cyclicals over defensive areas. In many ways, 2016’s results exemplified exactly this shift—and we think it is just the beginning of what could be a steady, though not linear, multi-year run.

     With 2016’s stellar results fresh in the mind, it may be difficult to recall just how poorly the year started and how fatalistic the expectations were for equities. Small-cap stocks plunged from the first peal of 2016’s opening bell. The downdraft exacerbated a trend that had begun the previous summer following the small-cap peak on June 23, 2015. By the time it was all over with the small-cap bottom on February 11, 2016, the Russell 2000 had fallen 25.7%. The last leg of the downdraft included many of the signs of a classic bottoming-out process—panic selling in a number of sectors (most notably within the biopharma complex), small-caps losing more than large-caps, and more resilience from value stocks—to us, the most significant development in the down phase. As unpleasant as any bear market is, we noted that the leadership shift, because it was nearly concomitant with the rate hike, was likely to last.

     Moreover, these signs also gave us some assurance that this was a historically conventional decline, making us confident that the small-cap market was undergoing its own important and familiar shift. The depths plumbed by this bear market were comparable to previous downturns—and that encouraged our belief that the worst was over just before the Russell 2000 rebounded sharply from its February low through the end of the year. These small-cap bear and bull markets received so little comment beyond our own and that of fellow small-cap specialists that we refer to them as “stealth” markets. They also reinforced our contention that this small-cap rally has room to run. Despite its strong showing in 2016, the Russell 2000 finished the year only 7.2% above its June 2015 peak. For additional context, it is worth noting that small-cap upswings usually extend well beyond the

 
Equity Indexes as of December 31, 2016 (%)                    
    1-YR   3-YR   5-YR   10-YR
 
Russell 2000     21.31       6.74       14.46       7.07  
 
Russell 2000 Value     31.74       8.31       15.07       6.26  
 
Russell 2000 Growth     11.32       5.05       13.74       7.76  
 
S&P 500     11.96       8.87       14.66       6.95  
 
Russell 1000     12.05       8.59       14.69       7.08  
 
Nasdaq Composite     7.50       8.83       15.62       8.34  
 
Russell Midcap     13.80       7.92       14.72       7.86  
 
Russell Microcap     20.37       5.77       15.59       5.47  
 
Russell Global ex-U.S. Small Cap     5.04       0.57       7.22       2.65  
 
Russell Global ex-U.S. Large Cap     4.30       -1.51       5.35       1.24  
 
For details on The Royce Funds’ performance in the period, please turn to the Managers’ Discussions that begin on page 8.
47.4% advance the small-cap index made from its February bottom through the end of 2016. There have been 12 declines of 15% or more for the Russell 2000 since its 1979 inception. The median return for the subsequent recovery period was 98.8%. So both history and the currently hospitable economic environment suggest to us that there may well be plenty of life left in the small-cap rally.

VALUE’S TURN?
The recent extended run of small-cap growth leadership makes it worth recalling that it is actually small-cap value stocks that own the pronounced long-term historical edge in relative performance. Of course, it makes sense that many investors were not conscious of this history at the beginning of the year. Prior to resuming leadership, the Russell 2000 Value Index trailed the Russell 2000 Growth Index in six out of seven years between 2009 and 2015. Based on their long-term performance and leadership history, this was an inordinately lengthy span. Is it now value’s turn, then? We think so. Prolonged periods of leadership for small-cap growth have historically been followed by long tenures at the helm for value. Multi-year trends typically do not have brief reversals before reappearing. Based on this pattern, we think the current leadership status of small-cap value is likely to last. Further, value stocks have historically outpaced growth issues when the economy is expanding—growth companies generally being most highly valued when growth is scarce in the economy. Rising interest rates have also historically provided a relative headwind for growth stocks because their valuations typically have a long-duration bond aspect to them that is highly sensitive to changes in rates.

     We saw the post-election rally and the sudden shift in investor perspective that came with it as more symptom than cause of an overall improved environment for both the economy and stocks. After all, some had forecast the pickup in GDP growth prior to any votes being cast just as many investors realized that the era of “lower forever” interest rates had reached its conclusion before the Fed officially announced the hike in December. There were also encouraging pickups in employment and incremental growth in wages. Along with the added certainty that comes after nearly every election, especially a contentious one, all of this stoked bullishness. So while the election was undoubtedly an accelerant, it seemed to us that many investors—and management teams—simply needed the experience of a tangible event before they felt comfortable enough to embrace the good news that had been accumulating prior to November.


This page is not part of the 2016 Annual Report to Stockholders | 3

       

LETTER TO OUR STOCKHOLDERS    

     The aftermath of the election has set the stage for changes that could benefit small-cap companies, beginning with a lower corporate tax rate. With the bulk of their money coming from domestic sources, many small-cap businesses would receive a disproportionate benefit from any rate reduction. Also encouraging are the prospects for repatriation. It was not surprising, then, that the postelection period also witnessed a dramatic rotation away from safety—bonds and defensive stocks most notably. Investors are bullish on the potential for accelerated economic growth and the policy shift from monetary to fiscal—chiefly in the form of tax cuts and projected spending increases on infrastructure and defense. The critical question going forward is, how much of this has already been priced in?

TURN THE PAGE
All of this has convinced us that we have turned the page on that 2011-2015 period in which financial markets behaved in such odd and unprecedented ways. We firmly believe that we are back on the road to a more historically normal market environment. We expect a multi-year run for the current environment of increased return dispersion, declining correlation, and a steepening yield curve, such as we saw in 2016, and think this will also lead to more historically normal relative return patterns for equity asset classes.

     Only time will tell, of course. However, we do not think a significant correction—that is, a decline of 15% or more—is in the offing. We see no signs of a recession or financial crisis. Still, a downdraft of anywhere from 8-10% would not be at all unexpected, and arguably healthy, given the strength of small-cap’s 2016 run. When one does occur, we are prepared to act opportunistically by trying to turn any volatility to our investors’ long-term advantage. In any event, we see ongoing leadership not only for small-cap value but for many cyclical sectors as well. Cyclicals lagged for so long that, as with value stocks (with which there is substantial overlap), we were anticipating a shift, which is precisely what we are seeing in the current cycle. Financials are benefiting from the steepening yield curve, which should help to lift bank profits, while the
potential for accelerated economic growth is boosting Industrials and many Materials stocks. The latter are also benefiting from rebounding commodity prices that ignited energy stocks as well. In addition, the U.S. consumer continues to spend. We see all of these as potentially ongoing trends. And although the global outlook is admittedly less certain, any rebound in worldwide industrial activity would be an additional, and significant, positive.

A NEW DAY FOR ACTIVE MANAGEMENT
Ongoing leadership for value and the related strength of cyclicals could produce distinct advantages for small-cap active management. As rates continue to rise and access to capital begins to contract more consistently, the number of bankruptcies should escalate, restoring the healthy, Darwinian force that generally ensures survival for the best-run, most prudently managed enterprises while putting others at potentially greater risk. It creates challenges for more debt-dependent, long-duration growth while offering potential benefits for companies that are conservatively capitalized. If we are correct in our argument that a multi-year period of value leadership is just beginning, then we also expect it to be a strong period for thoughtful and disciplined small-cap active management.

     To be sure, this was the case for domestic small-caps in 2016. Royce Micro-Cap Trust and Royce Value Trust increased more than 20% (and bested their respective benchmarks in the process). These performances were largely rooted in our dogged commitment to disciplined approaches to small-cap stock investing. They support the confidence we have going forward, which is also bolstered by the fact that our analysis of the dynamics in our asset class was sound. We felt validated not only by the high returns for our two domestically oriented portfolios but also that performance took place against the backdrop of a gradually growing economy. Historically, value-led periods have been good for many Royce Funds, and we remain committed to the effort of delivering strong results for our investors in the years to come.

     You have our great thanks and deep appreciation for the commitment you have shown to us and our approaches over the years.


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
         
January 31, 2017        

4 | This page is not part of the 2016 Annual Report to Stockholders

 

Performance

 
 
NAV Average Annual Total Returns
As of December 31, 2016 (%)
                     
                                           
      1-YR   3-YR   5-YR   10-YR   15-YR   20-YR   25-YR   30-YR   SINCE
INCEPTION
  INCEPTION
DATE
 
Royce Global Value Trust   11.12   0.20   N/A   N/A   N/A   N/A   N/A   N/A   1.05   10/17/13
 
Royce Micro-Cap Trust   21.98   3.70   13.59   6.07   9.22   10.26   N/A   N/A   10.81   12/14/93
 
Royce Value Trust   26.79   5.50   12.70   5.81   8.26   9.81   10.73   10.58   10.55   11/26/86
 

INDEX
                                       
 
Russell 2000 Index   21.31   6.74   14.46   7.07   8.49   8.25   9.69   9.62   N/A   N/A
 
Russell Microcap Index   20.37   5.77   15.59   5.47   8.16   N/A   N/A   N/A   N/A   N/A
 
Russell Global Small Cap Index   11.50   2.98   9.92   4.17   8.87   6.82   N/A   N/A   N/A   N/A
 
1 Not Annualized

Important Performance and Risk Information

All performance information in this Review and Report reflects past performance, is presented on a total return basis, net of the Fund’s investment advisory fee, and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, so that shares may be worth more or less than their original cost when sold. Current performance may be higher or lower than performance quoted. Current month-end performance may be obtained at www.roycefunds.com. The Funds are closed-end registered investment companies whose respective shares of common stock may trade at a discount to the net asset value. Shares of each Fund’s common stock are also subject to the market risk of investing in the underlying portfolio securities held by each Fund. Certain immaterial adjustments were made to the net assets of Royce Micro-Cap Trust at 12/31/12, as well as 12/31/14 and of Royce Value Trust at 12/31/16, for financial reporting purposes, and as a result the net asset value originally calculated on that date and the total return based on that net asset value differs from the adjusted net asset value and total return reported in the Financial Highlights. All indexes referenced are unmanaged and capitalization-weighted. Each index’s returns include net reinvested dividends and/or interest income. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. The Russell 2000 Index is an index of domestic small-cap stocks that measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 Index. The Russell Microcap Index includes 1,000 of the smallest securities in the small-cap Russell 2000 Index, along with the next smallest eligible securities as determined by Russell. The Russell Global Small Cap Index is an unmanaged, capitalization-weighted index of global small-cap stocks. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index. Index returns include net reinvested dividends and/or interest income. Royce Value, Micro-Cap and Global Value Trust shares of common stock trade on the NYSE. Royce Fund Services, Inc (“RFS”) is a member of FINRA and files certain material with FINRA on behalf of each Fund. RFS is not an underwriter or distributor of any of the Funds.

This page is not part of the 2016 Annual Report to Stockholders | 5


 
MANAGER’S DISCUSSION
Royce Global Value Trust (RGT)

Chuck Royce
 
FUND PERFORMANCE
Royce Global Value Trust advanced 11.1% on a net asset value (“NAV”) basis and 9.8% on a market price basis compared to a gain of 11.5% for its unleveraged benchmark, the Russell Global Small Cap Index, for the same period. This was a solid absolute result, though it disappointed on a relative basis. U.S. small-caps were very strong in 2016, in contrast to their international cousins. The Fund’s lower exposure to U.S. companies than the index, therefore, was a factor in its slight relative disadvantage for the calendar year. Investors in non-U.S. small-caps generally showed more favor to commodity-based international small-cap companies—oil & gas as well as metals & mining were among the top performers—than they did to the kind of businesses that we seek: small- and mid-cap stocks (those with market caps up to $10 billion) with high returns on invested capital or those with strong fundamentals and/or prospects trading at what Royce believes are attractive valuations.

     During the first half of 2016, the Fund was up 3.9% on an NAV basis and 2.0% based on market price versus a 1.4% gain for the global small-cap index. Both the Fund and its benchmark showed even more life in the third quarter as many stocks bounced back or stabilized following Brexit-bred volatility. RGT was up 6.3% in the third quarter (while increasing 6.9% based on its market price) compared to a gain of 8.3% for the Russell Global Small Cap Index. During the fourth quarter, however, many international small-caps declined, which had a larger impact on RGT. The Fund increased 0.6% based on its NAV (and 0.7% based on market price) in the year’s final quarter compared to a 1.5% advance for the benchmark. A portion of RGT’s second-half lag can be traced to currency effects. The rising U.S. dollar was particularly strong against the British pound, which declined significantly in the wake of the Brexit vote, making things difficult for the Fund’s sizable investments in the U.K.

WHAT WORKED... AND WHAT DIDN’T
Eight of the portfolio’s 10 equity sectors finished 2016 in the black. The most significant contributions came from Materials, Financials, Information Technology, and Industrials, which made a much larger impact than the remaining four contributing sectors. Health Care detracted—it was the only sector in the Russell Global Small Cap with a negative return in 2016—while Telecommunication Services was basically flat. Four industries had a substantial positive impact in 2016: metals & mining (Materials), electronic equipment, instruments & components (Information Technology), capital markets (Financials), and machinery (Industrials). The effect of detracting industries was comparatively modest. Pharmaceuticals (Health Care) detracted most by a sizable margin, followed by technology hardware, storage & peripherals (Information Technology), and oil, gas & consumable fuels (Energy).

     The Fund’s top contributor at the position level was Genworth MI Canada, one of that country’s leading residential mortgage insurance providers. Its stock first began to rebound with consecutive quarters of improved operating results. The recovery of energy prices also helped as about 20% of Genworth’s policies are written in resource-rich Alberta. The company then announced solid results for its fiscal third quarter in November. We reduced our position in 2016. Pan American Silver was part of a group of both precious and industrial metals companies that came back strong in 2016 as commodity prices rose.
 
     The portfolio’s top detractor at the position level was Virbac, a French firm that makes vaccines, antibiotics, and other veterinary medications. Its shares suffered mostly from the negative results of a 2014 FDA investigation of its U.S. plant in St. Louis that were released earlier this year. In December 2016, however, the FDA rescinded the warning letter, leaving the status of Virbac’s U.S. operations where they were at the beginning of the year, which allowed its shares to begin to recover. It was a top-40 holding in the Fund at the end of 2016. Value Partners Group is a Hong Kong-based asset manager that emphasizes value approaches. Subpar short-term performance, net outflows, and a CEO resignation all contributed to investors’ concerns. Because we remain confident in its long-term prospects, particularly in China, as well as in its Chairman, who has assumed CEO responsibilities, we were comfortable holding our stake.

     Relative to the Russell Global Small Cap, the Fund was hurt most by ineffective stock picking in the Industrials sector, most meaningfully in the machinery and commercial services & supplies industries. Stock selection was also an issue in Financials. Conversely, both our overweight and savvy stock picking gave us a relative edge in Materials while stock selection also helped in Information Technology.

         
  Top Contributors to Performance
For 2016 (%)1
     
         
  Genworth MI Canada   0.65  
     
  Pan American Silver   0.63  
     
  CETIP - Mercados Organizados   0.50  
     
  Quaker Chemical   0.46  
     
  Nanometrics   0.44  
     
  1 Includes dividends      
         

         
  Top Detractors from Performance
For 2016 (%)2
     
         
  Virbac   -0.54  
     
  Value Partners Group   -0.46  
     
  Santen Pharmaceutical   -0.40  
     
  Consort Medical   -0.35  
     
  Clarkson   -0.31  
     
  2 Net of dividends      
         

CURRENT POSITIONING AND OUTLOOK
At the end of 2016, the Fund’s largest country weights were the U.S., the U.K., Japan, and Canada. We think the global markets continue to offer terrific potential in a number of sectors and regions to find the kind of underappreciated, fundamentally solid companies that have long been our focus here at Royce. In our view cyclicals both in and outside the U.S. look well-positioned for ongoing leadership. In addition to our usual cyclical tilt, we are looking in some defensive areas such as healthcare. It is very much on a stock-by-stock basis, with a focus on individual companies that combine attractive valuations with strong fundamentals.

6 | 2016 Annual Report to Stockholders

 

PERFORMANCE AND PORTFOLIO REVIEW   SYMBOLS  MARKET PRICE RGT NAV XRGTX

 
Performance
Average Annual Total Return (%) Through 12/31/16
    JUL-DEC 20161   1-YR   3-YR   SINCE INCEPTION (10/17/13)
 
RGT (NAV)   6.99   11.12   0.20   1.05
 
1 Not Annualized                


Market Price Performance History Since Inception (10/17/13)
Cumulative Performance of Investment1

1
Reflects the cumulative performance experience of a continuous common stockholder who purchased one share at inception ($8.975 IPO) and
reinvested all distributions.
2
Reflects the actual month-end market price movement of one share as it has traded on NYSE and, prior to 12/1/03, on the Nasdaq.


The Morningstar Style Map is the Morningstar Style 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 61 for additional information.


Top 10 Positions    
% of Net Assets    
     
Kirby Corporation   2.2
 
SEI Investments   2.0
 
SEACOR Holdings   1.4
 
Meitec Corporation   1.4
 
Lazard Cl. A   1.3
 
VZ Holding   1.3
 
Raven Industries   1.3
 
KBR   1.2
 
Virtu Financial Cl. A   1.2
 
Nanometrics   1.1
 


Portfolio Sector Breakdown    
% of Net Assets    
     
Industrials   28.8
 
Financials   18.1
 
Information Technology   17.3
 
Materials   11.4
 
Health Care   10.0
 
Consumer Discretionary   7.2
 
Energy   3.4
 
Consumer Staples   2.8
 
Real Estate   2.5
 
Telecommunication Services   0.2
 
Outstanding Line of Credit, Net of Cash and Cash Equivalents   -1.7
 


Calendar Year Total Returns (%)    
     
YEAR   RGT
 
2016   11.1
 
2015   -3.4
 
2014   -6.2
 


Portfolio Country Breakdown 1,2
% of Net Assets
   
     
 
United States   32.7
 
United Kingdom   13.0
 
Japan   9.7
 
Canada   8.4
 
Germany   4.6
 
France   4.3
 
Switzerland   4.3
 
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   $100 million
 
Number of Holdings   274
 
Turnover Rate   59%
 
Net Asset Value   $9.62
 
Market Price   $8.04
 
Net Leverage1   1.7%
 
Average Market Capitalization2   $1,558 million
 
Weighted Average P/E Ratio3, 4   20.5x
 
Weighted Average P/B Ratio3   2.6x
 
Active Share5   97%
 
1 
Net leverage is the percentage, in excess of 100%, of the total value of equity type investments, divided by net assets.
2 
Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median.
3 
Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks.
4 
The Fund’s P/E ratio calculation excludes companies with zero or negative earnings (10% of portfolio holdings as of 12/31/16).
5 
Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two.

Important Performance and Risk Information

All performance information reflects past performance, is presented on a total return basis, net of the Fund’s investment advisory fee, and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month-end may be obtained at www.roycefunds.com. The market price of the Fund’s shares will fluctuate, so that shares may be worth more or less than their original cost when sold. The Fund invests primarily in securities of small- and mid-cap companies, which may involve considerably more risk than investments in securities of larger-cap companies. The Fund’s broadly diversified portfolio does not ensure a profit or guarantee against loss. From time to time, the Fund may invest a significant portion of its net assets in foreign securities, which may involve political, economic, currency and other risks not encountered in U.S. investments. Regarding the “Top Contributors” and “Top Detractors” tables shown on page 6, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to-date performance for 2016.

2016 Annual Report to Stockholders | 7

 

    MANAGER’S DISCUSSION
Royce Micro-Cap Trust (RMT)    

Chuck Royce

FUND PERFORMANCE
Royce Micro-Cap Trust (“RMT”) advanced 22.0% on a net asset value (“NAV”) basis and 22.3% on a market price basis in 2016, ahead of both of its unleveraged benchmarks: the small-cap Russell 2000 Index was up 21.3% while the Russell Microcap Index increased 20.4% for the same period. We were very pleased with the Fund’s results on both an absolute and relative basis, particularly in a year in which small-cap stocks held a slight edge over their micro-cap siblings. RMT’s multi-strategy core approach was well-positioned for a market that rewarded factors such as low valuation, liquidity, low volatility, and quality, all of which outperformed within the Russell 2000 and provided some validation for our approach.

      The two halves of 2016 were mirror images of one another. The first was stronger on a relative basis while the second was better on an absolute scale. During the first half of 2016, the Fund was up 5.4% on an NAV basis (and 5.8% on a relative basis) versus a gain of 2.2% for the Russell 2000 and a decline of 1.7% for the Russell Microcap for the same period. In the second half, RMT increased 15.7% on an NAV basis and 15.6% based on market price basis. This compared to respective gains of 18.7% and 22.4% for the small-cap and micro-cap indexes. On an NAV basis, RMT outpaced the Russell Microcap for the one-, 10-, and 15-year periods ended December 31, 2016 while also beating the Russell 2000 for the one-, 15-, 20-year, and since inception (12/14/93) periods. (Returns for the Russell Microcap Index only go back to 2000.) RMT’s average annual NAV total return for the since inception period ended December 31, 2016 was 10.8%.
 
WHAT WORKED... AND WHAT DIDN’T
Each of the portfolio’s 11 equity sectors made a contribution to calendar-year results. The largest positive impact by far came from Information Technology and Industrials, RMT’s two largest sectors, followed by noteworthy net gains from Materials and Financials. Some of the smallest contributions came from those sectors with the smallest weightings: Real Estate, Consumer Staples, Telecommunication Services, and Utilities. At the industry level, the top-contributors by a sizable margin were electronic equipment, instruments & components (Information Technology), metals & mining (Materials), and machinery (Industrials). Detractors made a very modest negative impact, led by software (Information Technology), distributors (Consumer Discretionary), and IT services (Information Technology).

      RMT’s top-contributing position was IES Holdings, which provides electrical contracting and maintenance services to the commercial, industrial, residential, and power line markets. The firm also engages in data communication services, including the installation of fiber optic telecommunications systems. Very healthy earnings and a strong outlook, both of which were boosted by five acquisitions the firm made between mid-2015 and the end of 2016, attracted investors. Top-five position Major Drilling Group International performs contract drilling for companies involved in mining and mineral exploration. In a challenging environment for miners early in 2016, the company was able to increase revenues and margins. Revenue growth continued throughout the year as business conditions, while remaining competitive, began to improve. Newport Corporation is a photonics technology specialist whose shares climbed in February after the company agreed to be acquired by MKS Instruments.
 
As for those holdings that detracted from performance, we held the bulk of our position in ZAIS Group Holdings, an investment manager focused on specialized credit strategies—an asset management segment with what we think is ample long-term potential. Its shares fell with a quarterly loss reported in March and were mostly down through the end of June. A falling stock price in the first half and our confidence in its long-term prospects led us to add shares of Fenix Parts, which recycles and resells original equipment manufacturer automotive parts and products. Consecutive quarterly losses drove investors away before its shares rallied a bit only to fall again when accounting and regulatory issues surfaced. However, we like its core business and were hopeful that the company could resolve these issues in 2017.
 
Relative to the Russell 2000, the Fund derived the bulk of its advantage from savvy stock selection in Health Care, the only sector in the Russell 2000 with a negative return in 2016. Stock picking offered a more modest advantage in Information Technology. Conversely, our underweight in banks and ineffective stock picks caused Financials to lag, as did poor stock selection in Consumer Discretionary.

  Top Contributors to Performance
For 2016 (%)1
     
     
IES Holdings   0.88
 
Major Drilling Group International   0.68
 
Newport Corporation   0.57
 
Era Group   0.47
 
Surmodics   0.47
 
1 Includes dividends    

  Top Detractors from Performance
For 2016 (%)2
     
     
ZAIS Group Holdings Cl. A   -0.71
 
Fenix Parts   -0.52
 
SeaChange International   -0.43
 
Sangamo BioSciences   -0.39
 
Zealand Pharma   -0.37
 
2 Net of dividends    

CURRENT POSITIONING AND OUTLOOK
We are grateful to have been able to deliver such strong absolute and relative results for our investors and firmly believe that we have turned the page on the anomalous 2011-2015 period, in which extraordinary monetary accommodations caused financial markets to behave in odd and unprecedented ways. In our view, we are on the road back to a more historically normal market environment. We think this bodes well for micro-cap and small-cap stocks. In our view cyclicals look well-positioned for ongoing leadership. In addition to our usual cyclical tilt, we are looking in some defensive areas such as healthcare. It is very much on a stock-by-stock basis, with a focus on individual companies that combine attractive valuations with strong fundamentals.

8  |  2016 Annual Report to Stockholders  

 

PERFORMANCE AND PORTFOLIO REVIEW SYMBOLS MARKET PRICE RMT NAV XOTCX


Performance                                
Average Annual Total Return (%) Through 12/31/16                        
    JUL-DEC 20161   1-YR   3-YR   5-YR   10-YR   15-YR   20-YR   SINCE INCEPTION (12/14/93)
RMT (NAV)   15.74   21.98   3.70   13.59   6.07   9.22   10.26   10.81
 
1 Not Annualized                                


Market Price Performance History Since Inception (12/14/93)
Cumulative Performance of Investment1                


1
Reflects the cumulative performance experience of a continuous common stockholder who purchased one share at inception ($7.50 IPO), reinvested all distributions and fully participated in the primary subscription of the Fund’s 1994 rights offering.
2
Reflects the actual month-end market price movement of one share as it has traded on NYSE and, prior to 12/1/03, on the Nasdaq.
   
 

The Morningstar Style Map is the Morningstar Style 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 61 for additional information.


Top 10 Positions    
% of Net Assets    
     
Era Group   1.4
 
IES Holdings   1.2
 
Seneca Foods   1.1
 
Heritage-Crystal Clean   1.0
 
Major Drilling Group International   1.0
 
Atrion Corporation   1.0
 
Sun Hydraulics   1.0
 
Orbotech   0.9
 
Kadant   0.9
 
Quaker Chemical   0.9
 


Portfolio Sector Breakdown    
% of Net Assets    
     
Information Technology   19.0
 
Industrials   18.4
 
Consumer Discretionary   14.2
 
Health Care   13.4
 
Financials   11.9
 
Materials   6.2
 
Energy   5.7
 
Real Estate   3.7
 
Consumer Staples   2.7
 
Telecommunication Services   0.1
 
Utilities   0.1
 
Miscellaneous   4.7
 
Preferred Stock   0.3
 
Outstanding Line of Credit, Net of Cash and Cash Equivalents   -0.4
 


Calendar Year Total Returns (%)  
     
YEAR   RMT
 
2016   22.0
 
2015   -11.7
 
2014   3.5
 
2013   44.5
 
2012   17.3
 
2011   -7.7
 
2010   28.5
 
2009   46.5
 
2008   -45.5
 
2007   0.6
 
2006   22.5
 
2005   6.8
 
2004   18.7
 
2003   55.5
 
2002   -13.8
 


Portfolio Diagnostics    
     
Fund Net Assets   $364 million
 
Number of Holdings   338
 
Turnover Rate   26%
 
Net Asset Value   $9.63
 
Market Price   $8.16
 
Net Leverage1   0.4%
 
Average Market Capitalization2   $384 million
 
Weighted Average P/B Ratio3   1.7x
 
Active Share4   95%
 
U.S. Investments (% of Net Assets)   81.2%
 
Non-U.S. Investments (% of Net Assets)   19.2%
 
 
1 Net leverage is the percentage, in excess of 100%, of the total value of equity type investments, divided by net assets.
2 Geometric Average. This weighted calculation uses each portfolio holding’s market cap in a way designed to not skew the effect of very large or small holdings; instead, it aims to better identify the portfolio’s center, which Royce believes offers a more accurate measure of average market cap than a simple mean or median.
3 Harmonic Average. This weighted calculation evaluates a portfolio as if it were a single stock and measures it overall. It compares the total market value of the portfolio to the portfolio’s share in the earnings or book value, as the case may be, of its underlying stocks.
4 Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two.

Important Performance and Risk Information

All performance information reflects past performance, is presented on a total return basis, net of the Fund’s investment advisory fee, and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month-end may be obtained at www.roycefunds.com. Certain immaterial adjustments were made to the net assets of Royce Micro-Cap Trust at 12/31/12 and 12/31/14 for financial reporting purposes, and as a result the net asset value originally calculated on that date and the total return based on that net asset value differs from the adjusted net asset value and total return reported in the Financial Highlights. The market price of the Fund’s shares will fluctuate, so that shares may be worth more or less than their original cost when sold. The Fund normally invests in micro-cap companies, which may involve considerably more risk than investments in securities of larger-cap companies. The Fund’s broadly diversified portfolio does not ensure a profit or guarantee against loss. From time to time, the Fund may invest a significant portion of its net assets in foreign securities, which may involve political, economic, currency and other risks not encountered in U.S. investments. Regarding the “Top Contributors” and “Top Detractors” tables shown on page 8, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to-date performance for 2016.

    2016 Annual Report to Stockholders |  9

 

    MANAGER’S DISCUSSION
Royce Value Trust (RVT)    

Chuck Royce

FUND PERFORMANCE
Royce Value Trust Fund advanced 26.8% on a net asset value (“NAV”) basis and 23.5% on a market price basis in 2016, compared to respective increases of 21.3% and 26.5% for its unleveraged small-cap benchmarks, the Russell 2000 and S&P SmallCap 600 Indexes, for the same period. In such a strong year for small-cap stocks, we were pleased with the Fund’s terrific absolute and relative NAV showing. RVT’s multi-themed core approach served investors well during a year in which factors such as low valuation, liquidity, low volatility, and quality all outperformed within the Russell 2000. Calendar-year performance was even more gratifying in light of the questions both active management and value-oriented approaches were facing between 2011 and 2015, which made the year feel very much like a validation for our approach.

     The Fund outperformed during the first half of 2016, gaining 8.2% on an NAV basis and 4.4% based on market price versus respective gains of 2.2% and 6.2% for the Russell 2000 and S&P SmallCap 600. The second half was stronger on an absolute basis but less so on a relative scale. During this period, RVT rose 17.3% based on NAV and 18.3% based on its market price compared to 18.7% for the Russell 2000 and 19.1% for the S&P SmallCap 600. Looking at longer-term periods, we were pleased that RVT outpaced the Russell 2000 for the one-, 20-, 25-, 30-year, and since inception (11/26/86) periods ended December 31, 2016. The Fund’s average annual NAV total return since inception was 10.6%, all under the management of Chuck Royce.
 
WHAT WORKED... AND WHAT DIDN’T
All of the portfolio’s 11 equity sectors finished 2016 with net gains. Industrials led by a considerable margin, followed by a strong contribution from Information Technology that was considerably higher than the meaningfully positive impact of Materials, the Fund’s third-highest contributor. Notable net gains also came from the Consumer Discretionary and Financials sectors. This widespread cyclical strength was consistent with trends in the overall small-cap market. Within Industrials, the best-performing industries were machinery (our largest industry weighting in the sector), commercial services & supplies, and construction & engineering. The portfolio’s top-performing industry, however, came from the Information Technology sector—electronic equipment, instruments & components. Coherent, which manufactures laser diodes and equipment, owned the top spot by position. Its shares skyrocketed in 2016, lifted by a combination of strong profits, a record backlog, and a robust order pipeline. Cognex Corporation is the market leader in machine vision technology that captures and analyzes visual information to automate tasks that previously relied on human eyesight. This technology is a major driver of industrial and process automation. Sales to the auto industry accelerated, its consumer electronics segment proved better than expected, and it gained share among logistics services providers. All of these factors produced an impressive performance for the stock.

      Even in a good year there are a few disappointments. ZAIS Group Holdings is an investment manager focused primarily on structured credits. Recent credit market turmoil has caused investment performance to fall below various “high-water” marks, meaningfully dampening profitability and future growth opportunities. We chose to hold our shares in 2016 in light of its highly discounted valuation. We also chose to hold our position in The Advisory Board. Its shares fell most precipitously during the fall as this specialist in performance improvement software and solutions to the health care and higher education industries reported disappointing fiscal third-quarter revenues. We like its niche business and think its long-term prospects remain promising. We also held on to most of our shares of Zealand Pharma, a Danish firm whose share price decline was mostly driven by the sell-off in its industry. We remain optimistic about its long-term growth potential.
 
Relative results in 2016 were driven by our underweight in the lagging Health Care sector, as well as positive stock selection in the sector. Also aiding relative performance was savvy stock selection in Information Technology. The two largest relative detractors had a similar theme—our underweight in banks caused the Fund to lag in Financials and our underweighting in REITs led to underperformance in the Real Estate sector. The Fund is typically underweight in these interest rate sensitive areas.

  Top Contributors to Performance
For 2016 (%)1
     
     
Coherent   0.95
 
Cognex Corporation   0.60
 
Thor Industries   0.53
 
Quaker Chemical   0.53
 
Newport Corporation   0.50
 
1 Includes dividends    

  Top Detractors from Performance
For 2016 (%)2
     
     
ZAIS Group Holdings Cl. A   -0.42
 
Advisory Board (The)   -0.32
 
Zealand Pharma   -0.29
 
Value Partners Group   -0.22
 
Citadel Capital   -0.18
 
2 Net of dividends    

CURRENT POSITIONING AND OUTLOOK
We are grateful to have been able to deliver such strong absolute and relative NAV results for our investors and firmly believe that we have turned the page on the anomalous 2011-2015 period, in which extraordinary monetary accommodations caused financial markets to behave in odd and unprecedented ways. In our view, we are on the road back to a more historically normal market environment. We think this bodes well for small-cap stocks. In our view cyclicals look well-positioned for ongoing leadership. In addition to our usual cyclical tilt, we are looking in some defensive areas such as healthcare. It is very much on a stock-by-stock basis, with a focus on individual companies that combine attractive valuations with strong fundamentals.

10  |  2016 Annual Report to Stockholders  

 

PERFORMANCE AND PORTFOLIO REVIEW SYMBOLS MARKET PRICE RVT NAV XRVTX


Performance                                  
Average Annual Total Return (%) Through 12/31/16                  
    JUL-DEC 20161   1-YR   3-YR   5-YR   10-YR   15-YR   20-YR   25-YR   30-YR   SINCE INCEPTION (11/26/86)
RVT (NAV)   17.21   26.79   5.50   12.70   5.81   8.26   9.81   10.73   10.58   10.55
 
1 Not Annualized                              


Market Price Performance History Since Inception (11/26/86)
Cumulative Performance of Investment through 12/31/161                


1
Reflects the cumulative performance of an investment made by a stockholder who purchased one share at inception ($10.00 IPO), reinvested all distributions and fully participated in primary subscriptions of the Fund’s rights offerings.
2
Reflects the actual month-end market price movement of one share as it has traded on the NYSE.
   
 


The Morningstar Style Map is the Morningstar Style 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 61 for additional information.


Top 10 Positions    
% of Net Assets    
     
HEICO Corporation   1.3
 
Coherent   1.2
 
Quaker Chemical   1.1
 
Cognex Corporation   1.0
 
Ash Grove Cement Cl. B   1.0
 
Copart   0.9
 
E-L Financial   0.9
 
RBC Bearings   0.9
 
FLIR Systems   0.9
 
Sun Hydraulics   0.9
 


Portfolio Sector Breakdown    
% of Net Assets    
     
Industrials   29.2
 
Information Technology   16.8
 
Financials   14.9
 
Consumer Discretionary   10.3
 
Materials   7.3
 
Energy   5.2
 
Health Care   4.2
 
Real Estate   2.8
 
Consumer Staples   2.2
 
Telecommunication Services   0.5
 
Utilities   0.1
 
Miscellaneous   4.3
 
Cash and Cash Equivalents, Net of Outstanding Line of Credit   2.2
 


Calendar Year Total Returns (%)  
     
YEAR   RVT
 
2016   26.8
 
2015   -8.1
 
2014   0.8
 
2013   34.1
 
2012   15.4
 
2011   -10.1
 
2010   30.3
 
2009   44.6
 
2008   -45.6
 
2007   5.0
 
2006   19.5
 
2005   8.4
 
2004   21.4
 
2003   40.8
 
2002   -15.6
 


Portfolio Diagnostics    
     
Fund Net Assets   $1,296 million
 
Number of Holdings   424
 
Turnover Rate   28%
 
Net Asset Value   $15.84
 
Market Price   $13.39
 
Average Market Capitalization1   $1,477 million
 
Weighted Average P/E Ratio2,3   20.3x
 
Weighted Average P/B Ratio2   2.1x
 
Active Share4   89%
 
U.S. Investments (% of Net Assets)   82.6%
 
Non-U.S. Investments (% of Net Assets)   15.2%
 
 
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 (17% of portfolio holdings as of 12/31/16).
4 Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two.

Important Performance and Risk Information

All performance information reflects past performance, is presented on a total return basis, net of the Fund’s investment advisory fee, and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month-end may be obtained at www.roycefunds.com. Certain immaterial adjustments were made to the net assets of Royce Value Trust at 12/31/16 for financial reporting purposes, and as a result the net asset value originally calculated on that date and the total return based on that net asset value differs from the adjusted net asset value and total return reported in the Financial Highlights. The market price of the Fund’s shares will fluctuate, so that shares may be worth more or less than their original cost when sold. The Fund invests primarily in securities of small- and micro-cap companies, which may involve considerably more risk than investing in larger-cap companies. The Fund’s broadly diversified portfolio does not ensure a profit or guarantee against loss. Regarding the “Top Contributors” and “Top Detractors” tables shown on page 10, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to date performance for 2015.

    2016 Annual Report to Stockholders |  11

History Since Inception

The following table details the share accumulations by an initial investor in the Funds who reinvested all distributions and participated fully in primary subscriptions for each of the rights offerings. Full participation in distribution reinvestments and rights offerings can maximize the returns available to a long-term investor. This table should be read in conjunction with the Performance and Portfolio Reviews of the Funds.

HISTORY         AMOUNT INVESTED     PURCHASE PRICE1       SHARES       NAV VALUE2       MARKET VALUE2
 
Royce Global Value Trust                                    
10/17/13 Initial Purchase   $ 8,975   $ 8.975       1,000     $ 9,780     $ 8,975
 
12/11/14   Distribution $0.15           7.970       19       9,426       8,193
 
12/10/15   Distribution $0.10           7.230       14       9,101       7,696
 
12/9/16   Distribution $0.14           7.940       18                
 
12/31/16       $ 8,975             1,051     $ 10,111     $ 8,446
 
                                         
Royce Micro-Cap Trust                                    
12/14/93 Initial Purchase   $ 7,500   $ 7.500       1,000     $ 7,250     $ 7,500
 
10/28/94   Rights Offering     1,400     7.000       200                
 
12/19/94   Distribution $0.05           6.750       9       9,163       8,462
 
12/7/95   Distribution $0.36           7.500       58       11,264       10,136
 
12/6/96   Distribution $0.80           7.625       133       13,132       11,550
 
12/5/97   Distribution $1.00           10.000       140       16,694       15,593
 
12/7/98   Distribution $0.29           8.625       52       16,016       14,129
 
12/6/99   Distribution $0.27           8.781       49       18,051       14,769
 
12/6/00   Distribution $1.72           8.469       333       20,016       17,026
 
12/6/01   Distribution $0.57           9.880       114       24,701       21,924
 
2002   Annual distribution total $0.80           9.518       180       21,297       19,142
 
2003   Annual distribution total $0.92           10.004       217       33,125       31,311
 
2004   Annual distribution total $1.33           13.350       257       39,320       41,788
 
2005   Annual distribution total $1.85           13.848       383       41,969       45,500
 
2006   Annual distribution total $1.55           14.246       354       51,385       57,647
 
2007   Annual distribution total $1.35           13.584       357       51,709       45,802
 
2008   Annual distribution total $1.193           8.237       578       28,205       24,807
 
3/11/09   Distribution $0.223           4.260       228       41,314       34,212
 
12/2/10   Distribution $0.08           9.400       40       53,094       45,884
 
2011   Annual distribution total $0.533           8.773       289       49,014       43,596
 
2012   Annual distribution total $0.51           9.084       285       57,501       49,669
 
2013   Annual distribution total $1.38           11.864       630       83,110       74,222
 
2014   Annual distribution total $2.90           10.513       1,704       86,071       76,507
 
2015   Annual distribution total $1.26           7.974       1,256       75,987       64,222
 
2016   Annual distribution total $0.64           7.513       779                
 
12/31/16       $ 8,900             9,625     $ 92,689     $ 78,540
 
1 The purchase price used for annual distribution totals is a weighted average of the distribution reinvestment prices for the year.
2 Values are stated as of December 31 of the year indicated, after reinvestment of distributions, other than for initial purchase.
3 Includes a return of capital.

12 | 2016 Annual Report to Stockholders


HISTORY           AMOUNT INVESTED       PURCHASE PRICE1       SHARES       NAV VALUE2       MARKET VALUE2
 
Royce Value Trust                                      
11/26/86     Initial Purchase   $ 10,000     $ 10.000       1,000     $ 9,280     $ 10,000
 
10/15/87     Distribution $0.30             7.000       42                
 
12/31/87     Distribution $0.22             7.125       32       8,578       7,250
 
12/27/88     Distribution $0.51             8.625       63       10,529       9,238
 
9/22/89     Rights Offering     405       9.000       45                
 
12/29/89     Distribution $0.52             9.125       67       12,942       11,866
 
9/24/90     Rights Offering     457       7.375       62                
 
12/31/90     Distribution $0.32             8.000       52       11,713       11,074
 
9/23/91     Rights Offering     638       9.375       68                
 
12/31/91     Distribution $0.61             10.625       82       17,919       15,697
 
9/25/92     Rights Offering     825       11.000       75                
 
12/31/92     Distribution $0.90             12.500       114       21,999       20,874
 
9/27/93     Rights Offering     1,469       13.000       113                
 
12/31/93     Distribution $1.15             13.000       160       26,603       25,428
 
10/28/94     Rights Offering     1,103       11.250       98                
 
12/19/94     Distribution $1.05             11.375       191       27,939       24,905
 
11/3/95     Rights Offering     1,425       12.500       114                
 
12/7/95     Distribution $1.29             12.125       253       35,676       31,243
 
12/6/96     Distribution $1.15             12.250       247       41,213       36,335
 
1997     Annual distribution total $1.21             15.374       230       52,556       46,814
 
1998     Annual distribution total $1.54             14.311       347       54,313       47,506
 
1999     Annual distribution total $1.37             12.616       391       60,653       50,239
 
2000     Annual distribution total $1.48             13.972       424       70,711       61,648
 
2001     Annual distribution total $1.49             15.072       437       81,478       73,994
 
2002     Annual distribution total $1.51             14.903       494       68,770       68,927
 
1/28/03     Rights Offering     5,600       10.770       520                
 
2003     Annual distribution total $1.30             14.582       516       106,216       107,339
 
2004     Annual distribution total $1.55             17.604       568       128,955       139,094
 
2005     Annual distribution total $1.61             18.739       604       139,808       148,773
 
2006     Annual distribution total $1.78             19.696       693       167,063       179,945
 
2007     Annual distribution total $1.85             19.687       787       175,469       165,158
 
2008     Annual distribution total $1.723             12.307       1,294       95,415       85,435
 
3/11/09     Distribution $0.323             6.071       537       137,966       115,669
 
12/2/10     Distribution $0.03             13.850       23       179,730       156,203
 
2011     Annual distribution total $0.783             13.043       656       161,638       139,866
 
2012     Annual distribution total $0.80             13.063       714       186,540       162,556
 
2013     Annual distribution total $2.194             16.647       1,658       250,219       220,474
 
2014     Annual distribution total $1.82             14.840       1,757       252,175       222,516
 
2015     Annual distribution total $1.24             12.725       1,565       231,781       201,185
 
2016     Annual distribution total $1.02             12.334       1,460                
 
12/31/16         $ 21,922               18,533     $ 293,880     $ 248,425
 

1 The purchase price used for annual distribution totals is a weighted average of the distribution reinvestment prices for the year.
2 Values are stated as of December 31 of the year indicated, after reinvestment of distributions, other than for initial purchase.
3 Includes a return of capital.
4 Includes Royce Global Value Trust spin-off of $1.40 per share.

2016 Annual Report to Stockholders | 13


Distribution Reinvestment and Cash Purchase Options

Why should I reinvest my distributions?
By reinvesting distributions, a stockholder can maintain an undiluted investment in the Fund. The regular reinvestment of distributions has a significant impact on stockholder returns. In contrast, the stockholder who takes distributions in cash is penalized when shares are issued below net asset value to other stockholders.
 
How does the reinvestment of distributions from the Royce closed-end funds work?
The Funds automatically issue shares in payment of distributions unless you indicate otherwise. The shares are generally issued at the lower of the market price or net asset value on the valuation date.
 
How does this apply to registered stockholders?
If your shares are registered directly with a Fund, your distributions are automatically reinvested unless you have otherwise instructed the Funds’ transfer agent, Computershare, in writing, in which case you will receive your distribution in cash. A registered stockholder also may have the option to receive the distribution in the form of a stock certificate.
 
What if my shares are held by a brokerage firm or a bank?
If your shares are held by a brokerage firm, bank, or other intermediary as the stockholder of record, you should contact your brokerage firm or bank to be certain that it is automatically reinvesting distributions on your behalf. If they are unable to reinvest distributions on your behalf, you should have your shares registered in your name in order to participate.
 
What other features are available for registered stockholders?
The Distribution Reinvestment and Cash Purchase Plans also allow registered stockholders to make optional cash purchases of shares of a Fund’s common stock directly through Computershare on a monthly basis, and to deposit certificates representing your RVT and RMT shares with Computershare for safekeeping. (RGT does not issue shares in certificated form). Plan participants are subject to a $0.75 service fee for each voluntary cash purchase under the Plans. The Funds’ investment adviser absorbed all commissions on optional cash purchases under the Plans through December 31, 2016.
 
How do the Plans work for registered stockholders?
Computershare maintains the accounts for registered stockholders in the Plans and sends written confirmation of all transactions in the account. Shares in the account of each participant will be held by Computershare in non-certificated form in the name of the participant, and each participant will be able to vote those shares at a stockholder meeting or by proxy. A participant may also send stock certificates for RVT and RMT held by them to Computershare to be held in non-certificated form. RGT does not issue shares in certificated form. There is no service fee charged to participants for reinvesting distributions. If a participant elects to sell shares from a Plan account, Computershare will deduct a $2.50 service fee from the sale transaction. The Funds’ investment adviser absorbed all commissions on optional sales under the Plans through December 31, 2016. If a nominee is the registered owner of your shares, the nominee will maintain the accounts on your behalf.
 
How can I get more information on the Plans?
You can call an Investor Services Representative at (800) 221-4268 or you can request a copy of the Plan for your Fund from Computershare. All correspondence (including notifications) should be directed to: [Name of Fund] Distribution Reinvestment and Cash Purchase Plan, c/o Computershare, PO Box 43078, Providence, RI 02940-3078, telephone (800) 426-5523 (from 9:00 A.M. to 5:00 P.M.).

14 | 2016 Annual Report to Stockholders

Royce Global Value Trust   December 31, 2016

 
Schedule of Investments
Common Stocks – 101.7%
             
    SHARES       VALUE
 
 
AUSTRALIA 2.2%            

ALS

  88,176     $ 383,315

Austal

  95,500       119,804

Cochlear

  5,000       441,394

Imdex 1

  130,600       54,101

IPH

  140,000       516,390

NetComm Wireless 1

  26,700       41,279

Seeing Machines 1

  1,676,800       87,782

Spotless Group Holdings

  500,000       356,515

TFS Corporation

  137,045       164,100
 
Total (Cost $2,157,377)           2,164,680
 
 
AUSTRIA 0.9%            

Mayr-Melnhof Karton

  8,000       847,939

UBM Development

  1,800       58,731
 
Total (Cost $994,664)           906,670
 
 
BELGIUM 0.1%            

Barco

  1,100       92,599
 
Total (Cost $91,797)           92,599
 
 
BERMUDA 1.3%            

Lazard Cl. A

  32,600       1,339,534
 
Total (Cost $1,010,334)           1,339,534
 
 
BRAZIL 1.8%            

Brasil Brokers Participacoes 1

  205,000       100,087

CETIP - Mercados Organizados

  35,000       478,665

Minerva 1

  52,500       195,952

OdontoPrev

  200,000       774,704

T4F Entretenimento

  61,100       105,090

TOTVS

  23,000       169,042
 
Total (Cost $1,884,557)           1,823,540
 
 
CANADA 8.4%            

Agnico Eagle Mines 2

  5,000       210,000

AGT Food and Ingredients

  5,200       141,904

Altus Group

  5,900       136,047

Cameco Corporation 2

  24,500       256,515

Canaccord Genuity Group 1

  92,000       326,846

Canfor Corporation 1

  18,900       214,950

Computer Modelling Group

  108,000       732,790

Dream Global Real Estate Investment Trust

  14,700       103,463

Dundee Corporation Cl. A 1

  80,000       354,523

E-L Financial

  1,200       652,441

Exco Technologies

  23,500       188,679

FirstService Corporation

  10,300       489,044

Franco-Nevada Corporation 2,3

  10,200       609,552

Genworth MI Canada

  13,000       325,908

Gluskin Sheff + Associates

  23,000       298,752

Magellan Aerospace

  19,400       259,794

Major Drilling Group International 1

  110,500       577,746

Morneau Shepell

  35,000       500,242

Pan American Silver 2

  31,800       479,226

Questor Technology 1

  90,600       47,910

RDM Corporation

  30,400       108,681

Sandstorm Gold 1

  29,400       114,660

Solium Capital 1

  24,800       155,895

Sprott

  280,600       524,564

Western Forest Products

  123,100       173,283

Winpak

  13,500       456,686
 
Total (Cost $10,238,840)           8,440,101
 
 
CHINA 0.9%            

China Communications Services

  134,500       85,598

Haichang Ocean Park Holdings 1

  321,000       75,586

TravelSky Technology

  310,000       649,062

Xtep International Holdings

  191,600       80,093
 
Total (Cost $655,485)           890,339
 
 
CYPRUS 0.3%            

Globaltrans Investment GDR

  42,000       265,818
 
Total (Cost $212,014)           265,818
 
 
DENMARK 2.0%            

Chr. Hansen Holding

  9,000       497,840

Coloplast Cl. B

  7,000       471,046

SimCorp

  14,000       681,612

Zealand Pharma 1

  24,000       361,360
 
Total (Cost $1,846,468)           2,011,858
 
 
FINLAND 0.1%            

BasWare 1

  1,600       61,114
 
Total (Cost $80,466)           61,114
 
 
FRANCE 4.3%            

Chargeurs

  4,400       73,894

Groupe Crit

  700       50,095

HighCo

  16,200       109,621

Interparfums

  15,000       432,539

Manutan International

  900       66,025

Neurones

  22,250       524,266

Rothschild & Co

  33,000       892,439

Thermador Groupe

  10,500       922,863

Vetoquinol

  10,000       479,013

Virbac 1

  4,500       790,977
 
Total (Cost $3,996,446)           4,341,732
 
 
GEORGIA 0.1%            

BGEO Group

  2,200       81,052
 
Total (Cost $63,649)           81,052
 
 
GERMANY 4.6%            

ADLER Real Estate 1

  9,400       143,323

Allgeier

  3,700       67,090

Bertrandt

  2,500       254,107

CANCOM

  3,700       174,573

Carl Zeiss Meditec

  17,500       644,746

CompuGroup Medical

  12,500       512,412

Fielmann

  10,000       659,347

HolidayCheck Group 1

  25,100       62,009

KWS Saat

  2,500       741,903

MorphoSys 1

  6,000       307,301

msg life 1

  22,100       67,409

mutares

  5,000       60,074

PNE Wind

  56,600       129,909

STRATEC Biomedical

  15,000       722,193

VIB Vermoegen

  4,900       101,329
 
Total (Cost $4,609,813)           4,647,725
 

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2016 Annual Report to Stockholders | 15

Royce Global Value Trust

 
Schedule of Investments (continued)
               
      SHARES       VALUE
 
               
GREECE 0.2%              

Aegean Marine Petroleum Network

    5,000     $ 50,750

Hellenic Exchanges - Athens Stock Exchange

    28,000       144,119
 
Total (Cost $184,327)             194,869
 
 
HONG KONG 2.1%              

Anxin-China Holdings 1,4

    2,500,000       9,349

China Metal International Holdings

    430,000       135,545

First Pacific

    180,000       125,721

HKBN

    126,000       137,857

I.T

    365,800       145,323

Oriental Watch Holdings

    465,900       89,778

Pico Far East Holdings

    470,500       144,244

Television Broadcasts

    54,000       177,557

Value Partners Group

    1,325,000       1,054,025

VST Holdings

    232,400       81,231
 
Total (Cost $2,646,499)             2,100,630
 
 
INDIA 1.6%              

Bajaj Finance

    77,500       963,017

IIFL Holdings

    18,500       70,558

Kewal Kiran Clothing

    6,500       170,393

Quess Corporation 1

    7,200       69,481

SH Kelkar & Company

    72,000       326,883
 
Total (Cost $1,290,842)             1,600,332
 
 
INDONESIA 0.6%              

Selamat Sempurna

    8,000,000       580,455
 
Total (Cost $716,411)             580,455
 
 
IRELAND 0.7%              

Ardmore Shipping 2

    12,300       91,020

Irish Continental Group

    43,700       206,824

Irish Residential Properties REIT

    148,481       182,800

Keywords Studios

    37,500       244,408
 
Total (Cost $629,762)             725,052
 
 
ISRAEL 0.3%              

Nova Measuring Instruments 1,2

    12,400       162,936

Sapiens International

    5,300       76,002

Sarine Technologies

    86,800       107,821
 
Total (Cost $304,789)             346,759
 
 
ITALY 0.8%              

Banca Sistema

    72,800       168,493

DiaSorin

    11,000       651,183
 
Total (Cost $697,808)             819,676
 
 
JAPAN 9.7%              

Ai Holdings

    27,500       546,017

BML

    2,600       61,867

C. Uyemura & Co.

    1,300       56,632

EM Systems

    4,500       61,855

en-japan

    3,100       55,247

GCA

    8,900       62,487

G-Tekt

    3,100       59,979

Horiba

    16,000       738,921

Inabata & Co.

    6,500       71,471

Itochu Techno-Solutions

    2,300       59,738

Kakaku.com

    3,200       52,907

Kenedix

    16,900       59,954

Kenko Mayonnaise

    2,300       64,891

Kintetsu World Express

    4,000       55,339

Leopalace21

    10,600       58,496

Mandom Corporation

    1,600       68,892

Maruwa Unyu Kikan

    1,900       46,949

Meitec Corporation

    36,600       1,398,814

Miraca Holdings

    1,400       62,703

MISUMI Group

    50,800       833,715

Nabtesco

    2,400       55,717

Nifco

    1,300       68,427

Nihon Kohden

    27,500       606,863

NS Solutions

    3,800       68,173

Obara Group

    1,300       57,888

Open House

    2,900       68,882

Outsourcing

    2,200       68,404

Pressance

    3,700       45,881

Relo Group

    5,900       842,512

Ryobi

    16,100       63,085

Sangetsu

    3,600       62,299

Santen Pharmaceutical

    80,000       976,999

Shimano

    3,500       547,831

SPARX Group

    55,100       106,752

Sugi Holdings

    6,000       284,313

Sun Frontier Fudousan

    7,300       64,216

Takara Leben

    9,400       54,679

Tokai Corporation

    1,800       61,251

Tokai Tokyo Financial Holdings

    11,000       58,355

Trancom

    1,200       58,641

USS

    62,500       993,607
 
Total (Cost $8,526,307)             9,691,649
 
 
MEXICO 0.4%              

Bolsa Mexicana de Valores

    250,000       328,756

Rassini

    23,400       88,037
 
Total (Cost $559,325)             416,793
 
 
NETHERLANDS 0.1%              

Constellium Cl. A 1

    15,600       92,040
 
Total (Cost $77,927)             92,040
 
 
NEW ZEALAND 0.7%              

Fisher & Paykel Healthcare

    100,891       595,472

New Zealand Refining

    43,100       77,809
 
Total (Cost $643,367)             673,281
 
 
NORWAY 1.1%              

Nordic Semiconductor 1

    28,300       115,044

NRC Group 1

    8,800       69,307

TGS-NOPEC Geophysical

    42,200       935,894
 
Total (Cost $968,480)             1,120,245
 
 
PHILIPPINES 0.2%              

Integrated Micro-Electronics

    756,900       92,331

Universal Robina

    22,500       73,884
 
Total (Cost $155,675)             166,215
 
 
POLAND 0.3%              

Warsaw Stock Exchange

    33,000       314,873
 
Total (Cost $459,764)             314,873
 

16 | 2016 Annual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

December 31, 2016

 
Schedule of Investments (continued)            
             
    SHARES       VALUE
 
             
SINGAPORE 1.3%            

ARA Asset Management

  600,000     $ 705,639

CSE Global

  379,000       119,085

XP Power

  25,000       535,298
 
Total (Cost $1,166,436)           1,360,022
 
 
SOUTH AFRICA 0.7%            

Coronation Fund Managers

  59,000       301,383

JSE

  15,000       179,366

Net 1 UEPS Technologies 1

  10,500       120,540

Raubex Group

  49,000       87,671
 
Total (Cost $799,668)           688,960
 
 
SOUTH KOREA 0.5%            

Handsome 1

  4,400       126,996

Koh Young Technology

  4,200       156,970

KT Skylife

  6,800       96,910

Modetour Network 1

  6,300       150,919
 
Total (Cost $558,478)           531,795
 
 
SPAIN 0.1%            

Atento 1,2

  16,400       124,640
 
Total (Cost $181,133)           124,640
 
 
SWEDEN 2.1%            

AcadeMedia 1

  18,200       99,657

Addtech Cl. B

  53,960       843,812

Bravida Holding

  100,000       605,362

Byggmax Group

  16,600       114,630

Dustin Group

  27,500       192,951

Hoist Finance

  8,000       74,317

Knowit

  6,200       61,069

Proact IT Group

  7,600       121,784
 
Total (Cost $2,060,081)           2,113,582
 
 
SWITZERLAND 4.3%            

Burckhardt Compression Holding

  4,000       1,051,796

dormakaba Holding

  800       594,793

LEM Holding

  700       654,463

Partners Group Holding

  1,600       748,809

VZ Holding

  4,300       1,290,092
 
Total (Cost $3,696,122)           4,339,953
 
 
TAIWAN 1.1%            

Chipbond Technology

  50,700       71,996

Egis Technology 1

  11,600       94,978

Flytech Technology

  32,780       95,483

Gourmet Master

  8,500       64,445

Posiflex Technology

  12,804       70,133

Realtek Semiconductor

  28,800       90,559

Shih Her Technologies

  85,600       79,131

Sitronix Technology

  32,100       101,724

Sporton International

  26,997       142,744

Taiwan Paiho

  38,700       113,931

TCI

  26,800       136,103
 

Total (Cost $1,162,767)

          1,061,227
 
             
TURKEY 0.1%            

Tat Gida Sanayi

  74,700       121,245
 
Total (Cost $148,678)           121,245
 
 
UNITED KINGDOM 13.0%            

Abcam

  30,000       283,379

Ashmore Group

  274,000       956,076

AVEVA Group

  17,500       403,291

Avon Rubber

  8,700       111,454

Berendsen

  50,000       534,116

BrainJuicer Group

  9,400       63,686

Character Group

  11,400       71,657

Clarkson

  41,300       1,105,920

Computacenter

  15,600       152,921

Connect Group

  68,500       128,828

Consort Medical

  64,800       845,439

Conviviality

  75,500       200,051

Diploma

  30,000       384,035

dotdigital group

  206,200       146,117

Elementis

  175,000       596,748

Epwin Group

  47,500       59,794

Equiniti Group

  200,000       481,047

Exova Group

  175,000       410,624

FDM Group Holdings

  30,000       208,818

Ferroglobe

  41,100       445,113

Ferroglobe (Warranty Insurance Trust) 1,4

  41,100       0

Finsbury Food Group

  76,000       112,377

Hilton Food Group

  24,800       189,943

Inspired Energy

  515,300       87,341

ITE Group

  325,000       616,567

Jupiter Fund Management

  36,000       196,172

Micro Focus International

  6,100       163,644

Norcros

  64,360       142,304

Pendragon

  258,000       99,053

Polypipe Group

  60,000       239,163

Rank Group

  31,500       75,673

Real Estate Investors

  99,300       68,005

Rotork

  160,000       473,134

Spirax-Sarco Engineering

  18,000       924,418

Stallergenes Greer 1

  10,800       351,022

Trifast

  29,000       73,303

Vertu Motors

  164,300       88,059

Victrex

  40,000       948,070

Xaar

  115,000       564,789
 
Total (Cost $15,103,056)           13,002,151
 
 
UNITED STATES 32.7%            

Air Lease Cl. A

  30,700       1,053,931

Brooks Automation 2

  18,100       308,967

Century Casinos 1

  21,400       176,122

CIRCOR International

  12,800       830,464

Cognex Corporation

  17,100       1,087,902

Coherent 1

  5,000       686,925

Commercial Metals

  42,000       914,760

Copart 1

  18,600       1,030,626

Diebold Nixdorf 2

  28,800       724,320

Diodes 1

  20,500       526,235

DST Systems

  5,800       621,470

EnerSys 2,3

  11,000       859,100

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2016 Annual Report to Stockholders | 17

Royce Global Value Trust   December 31, 2016

 
Schedule of Investments (continued)              
               
    SHARES       VALUE  
 
               
UNITED STATES (continued)              

Expeditors International of Washington 2

  13,300     $ 704,368  

FLIR Systems 2

  14,100       510,279  

Greif Cl. A 2

  8,700       446,397  

Innospec 2,3

  12,457       853,304  

Kadant

  7,800       477,360  

KBR 2,3

  73,400       1,225,046  

Kirby Corporation 1,2,3

  32,900       2,187,850  

Lindsay Corporation

  13,700       1,022,157  

Littelfuse

  5,000       758,850  

ManpowerGroup

  11,000       977,570  

MBIA 1

  80,300       859,210  

Nanometrics 1,2,3

  44,500       1,115,170  

National Instruments 2

  19,000       585,580  

Oaktree Capital Group LLC Cl. A

  10,400       390,000  

Popular

  13,100       574,042  

Quaker Chemical 2

  8,400       1,074,696  

Raven Industries

  50,000       1,260,000  

Rogers Corporation 1,2

  6,000       460,860  

Schnitzer Steel Industries Cl. A 2

  19,100       490,870  

SEACOR Holdings 1

  20,200       1,439,856  

SEI Investments 2

  40,600       2,004,016  

Sensient Technologies 2,3

  9,500       746,510  

Standard Motor Products

  11,200       596,064  

Sun Hydraulics 2

  15,139       605,106  

Tennant Company 2

  11,600       825,920  

Virtu Financial Cl. A

  74,300       1,185,085  

World Fuel Services

  12,000       550,920  
 
Total (Cost $27,774,093)           32,747,908  
 
 
TOTAL COMMON STOCKS              
 
(Cost $98,353,705)           102,001,114  
 
 
REPURCHASE AGREEMENT 6.8%              
Fixed Income Clearing Corporation, 0.03% dated 12/30/16, due 1/3/17, maturity value $6,790,023 (collateralized by obligations of various U.S. Government Agencies, 2.25% due 11/15/24, valued at $6,927,235)
 
(Cost $6,790,000)           6,790,000  
 
 
TOTAL INVESTMENTS 108.5%              
 
(Cost $105,143,705)           108,791,114  
 
               
LIABILITIES LESS CASH AND OTHER ASSETS (8.5)%           (8,563,327 )
             
               
 
NET ASSETS 100.0%         $ 100,227,787  
 
               

 
New additions in 2016.
1 Non-income producing.
2
All or a portion of these securities were pledged as collateral in connection with the revolving credit agreement at December 31, 2016. Total market value of pledged securities at December 31, 2016, was $13,345,249.
3
At December 31, 2016, a portion of these securities were rehypothecated in connection with the Fund’s revolving credit agreement in the aggregate amount of $5,535,180.
4
Securities for which market quotations are not readily available represent 0.0% of net assets. These securities have been valued at their fair value under procedures approved by the Fund’s Board of Directors. These securities are defined as Level 3 securities due to the use of significant unobservable inputs in the determination of fair value. See Notes to Financial Statements.
   
 
Securities of Global/International Funds are categorized by the country of their headquarters, with the exception of exchange-traded funds.
   
 
Bold indicates the Fund’s 20 largest equity holdings in terms of December 31, 2016, market value.
   
 
TAX INFORMATION: The cost of total investments for Federal income tax purposes was $105,661,885. At December 31, 2016, net unrealized appreciation for all securities was $3,129,229, consisting of aggregate gross unrealized appreciation of $12,156,709 and aggregate gross unrealized depreciation of $9,027,480. The primary causes of the differences between book and tax basis cost are the timing of the recognition of losses on securities sold, investments in publicly traded partnerships and mark-to-market of Passive Foreign Investment Companies.
 

18 | 2016 Annual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Royce Global Value Trust   December 31, 2016
     
 
Statement of Assets and Liabilities

ASSETS:          
Investments at value     $ 102,001,114  
 
Repurchase agreements (at cost and value)       6,790,000  
 
Cash and foreign currency       199,158  
 
Receivable for investments sold       191,757  
 
Receivable for dividends and interest       182,620  
 
Prepaid expenses and other assets       32,564  
 
Total Assets       109,397,213  
 
LIABILITIES:          
Revolving credit agreement       8,000,000  
 
Payable for investments purchased       920,079  
 
Payable for investment advisory fee       105,686  
 
Payable for directors’ fees       7,170  
 
Payable for interest expense       1,299  
 
Accrued expenses       65,575  
 
Deferred capital gains tax       69,617  
 
Total Liabilities       9,169,426  
 
Net Assets     $ 100,227,787  
 
ANALYSIS OF NET ASSETS:          
Paid-in capital - $0.001 par value per share; 10,415,421 shares outstanding (150,000,000 shares authorized)     $ 117,477,118  
 
Undistributed net investment income (loss)       (672,740 )
 
Accumulated net realized gain (loss) on investments and foreign currency       (20,145,698 )
 
Net unrealized appreciation (depreciation) on investments and foreign currency       3,569,107  
 
Net Assets (net asset value per share - $9.62)     $ 100,227,787  
 
Investments at identified cost     $ 98,353,705  
 

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2016 Annual Report to Stockholders | 19

Royce Global Value Trust
 
 
Statement of Changes in Net Assets

      YEAR ENDED 12/31/16     YEAR ENDED 12/31/15
 
                     
INVESTMENT OPERATIONS:                    
Net investment income (loss)     $ 651,129       $ 985,324  
 
Net realized gain (loss) on investments and foreign currency       (1,449,508 )       (11,820,601 )
 
Net change in unrealized appreciation (depreciation) on investments and foreign currency       10,740,946         7,399,963  
 
Net increase (decrease) in net assets from investment operations       9,942,567         (3,435,314 )
 
DISTRIBUTIONS:                    
Net investment income       (1,435,789 )       (1,029,597 )
 
Net realized gain on investments and foreign currency                
 
Return of capital       (12,497 )        
 
Total distributions       (1,448,286 )       (1,029,597 )
 
CAPITAL STOCK TRANSACTIONS:                    
Reinvestment of distributions       559,946         353,733  
 
Total capital stock transactions       559,946         353,733  
 
Net Increase (Decrease) In Net Assets       9,054,227         (4,111,178 )
 
NET ASSETS:                    
 
Beginning of year       91,173,560         95,284,738  
 
End of year (including undistributed net investment income (loss) of $(672,740) at 12/31/16 and $(224,615) at 12/31/15)     $ 100,227,787       $ 91,173,560  
 

20 | 2016 Annual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Royce Global Value Trust   Year Ended December 31, 2016
     
 
Statement of Operations
     

INVESTMENT INCOME:          
INCOME:          
Dividends     $ 2,444,670  
 
Foreign withholding tax       (180,561 )
 
Interest       1,406  
 
Rehypothecation income       2,462  
 
Total income       2,267,977  
 
EXPENSES:          
 
Investment advisory fees       1,180,559  
 
Interest expense       137,802  
 
Custody and transfer agent fees       101,314  
 
Stockholder reports       68,472  
 
Professional fees       37,193  
 
Directors’ fees       27,769  
 
Administrative and office facilities       23,307  
 
Other expenses       40,473  
 
Total expenses       1,616,889  
 
Compensating balance credits       (41 )
 
Net expenses       1,616,848  
 
Net investment income (loss)       651,129  
 
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:          
NET REALIZED GAIN (LOSS):          
 
Investments       (1,409,168 )
 
Foreign currency transactions       (40,340 )
 
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):          
 
Investments and foreign currency translations       10,791,065  
 
Other assets and liabilities denominated in foreign currency       (50,119 )
 
Net realized and unrealized gain (loss) on investments and foreign currency       9,291,438  
 
NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS     $ 9,942,567  
 

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2016 Annual Report to Stockholders | 21

Royce Global Value Trust   Year Ended December 31, 2016
     
 
Statement of Cash Flows

CASH FLOWS FROM OPERATING ACTIVITIES:          
Net increase (decrease) in net assets from investment operations     $ 9,942,567  
 
Adjustments to reconcile net increase (decrease) in net assets from investment operations to net cash provided by operating activities:          
 

Purchases of long-term investments

      (57,799,439 )
 

Proceeds from sales and maturities of long-term investments

      63,325,760  
 

Net purchases, sales and maturities of short-term investments

      (5,087,000 )
 

Net (increase) decrease in dividends and interest receivable and other assets

      (11,777 )
 

Net increase (decrease) in interest expense payable, accrued expenses and other liabilities

      54,782  
 

Net change in unrealized appreciation (depreciation) on investments

      (10,791,065 )
 

Net realized gain (loss) on investments and foreign currency

      1,449,508  
 
Net cash provided by operating activities       1,083,336  
 
CASH FLOWS FROM FINANCING ACTIVITIES:          
Net increase (decrease) in revolving credit agreement       -  
 
Distributions       (1,448,286 )
 
Reinvestment of distributions       559,946  
 
Net cash used for financing activities       (888,340 )
 
INCREASE (DECREASE) IN CASH:       194,996  
 
Cash and foreign currency at beginning of year       4,162  
 
Cash and foreign currency at end of year     $ 199,158  
 

22 | 2016 Annual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Royce Global Value Trust
 
 
Financial Highlights
This table is presented to show selected data for a share outstanding throughout each period, and to assist stockholders in evaluating the Fund’s performance for the periods presented.

  YEARS ENDED     PERIOD ENDED
             
    12/31/16     12/31/15     12/31/14     12/31/131
 
Net Asset Value, Beginning of Period   $ 8.81       $ 9.25       $ 10.05       $ 9.78  
 
INVESTMENT OPERATIONS:                                      
Net investment income (loss)     0.06         0.10         0.13         (0.00 )
 
Net realized and unrealized gain (loss) on investments and foreign currency     0.90         (0.43 )       (0.77 )       0.27  
 
Net increase (decrease) in net assets from investment operations     0.96         (0.33 )       (0.64 )       0.27  
 
DISTRIBUTIONS:                                      
Net investment income     (0.14 )       (0.10 )       (0.15 )        
 
Net realized gain on investments and foreign currency                              
 
Total distributions     (0.14 )       (0.10 )       (0.15 )        
 
CAPITAL STOCK TRANSACTIONS:                                      
Effect of reinvestment of distributions by Common Stockholders     (0.01 )       (0.01 )       (0.01 )        
 
Total capital stock transactions     (0.01 )       (0.01 )       (0.01 )        
 
Net Asset Value, End of Period   $ 9.62       $ 8.81       $ 9.25       $ 10.05  
 
Market Value, End of Period   $ 8.04       $ 7.45       $ 8.04       $ 8.89  
 
TOTAL RETURN:2                                      
Net Asset Value     11.12 %       (3.44 )%       (6.23 )%       2.76 %3
Market Value     9.77 %       (6.06 )%       (7.86 )%       (0.95 )%3
 
RATIOS BASED ON AVERAGE NET ASSETS:                                      
Investment advisory fee expense     1.25 %       1.25 %       1.25 %       1.25 %4
 
Other operating expenses     0.46 %       0.43 %       0.24 %       0.37 %4
 
Total expenses (net)     1.71 %       1.68 %       1.49 %       1.62 %4
 
Expenses excluding interest expense     1.57 %       1.58 %       1.49 %       1.62 %4
 
Expenses prior to balance credits     1.71 %       1.68 %       1.49 %       1.62 %4
 
Net investment income (loss)     0.69 %       1.03 %       1.30 %       (0.13 )%4
 
SUPPLEMENTAL DATA:                                      
Net Assets End of Period (in thousands)   $ 100,228       $ 91,174       $ 95,285       $ 102,684  
 
Portfolio Turnover Rate     59 %       65 %       43 %       7 %
 
REVOLVING CREDIT AGREEMENT:                                      
Asset coverage     1353 %       1240 %                    
 
Asset coverage per $1,000     13,528         12,397                      
 
1 The Fund commenced operations on October 18, 2013.
2
The Market Value Total Return is calculated assuming a purchase of Common Stock on the opening of the first business day and a sale on the closing of the last business day of each period. Dividends and distributions are assumed for the purposes of this calculation to be reinvested at prices obtained under the Fund’s Distribution Reinvestment and Cash Purchase Plan. Net Asset Value Total Return is calculated on the same basis, except that the Fund’s net asset value is used on the purchase and sale dates instead of market value.
3 Not annualized
4 Annualized

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2016 Annual Report to Stockholders | 23

Royce Global Value Trust
 
Notes to Financial Statements

Summary of Significant Accounting Policies

Royce Global Value Trust, Inc. (the “Fund”), is a diversified closed-end investment company that was incorporated under the laws of the State of Maryland on February 14, 2011. The Fund commenced operations on October 18, 2013.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 “Financial Services-Investment Companies”.


VALUATION OF INVESTMENTS:

Securities are valued as of the close of trading on the New York Stock Exchange (NYSE) (generally 4:00 p.m. Eastern time) on the valuation date. Securities that trade on an exchange, and securities traded on Nasdaq’s Electronic Bulletin Board, are valued at their last reported sales price or Nasdaq official closing price taken from the primary market in which each security trades or, if no sale is reported for such day, at their highest bid price. Other over-the-counter securities for which market quotations are readily available are valued at their highest bid price, except in the case of some bonds and other fixed income securities which may be valued by reference to other securities with comparable ratings, interest rates and maturities, using established independent pricing services. The Fund values its non-U.S. dollar denominated securities in U.S. dollars daily at the prevailing foreign currency exchange rates as quoted by a major bank. Securities for which market quotations are not readily available are valued at their fair value in accordance with the provisions of the 1940 Act, under procedures approved by the Fund’s Board of Directors, and are reported as Level 3 securities. As a general principle, the fair value of a security is the amount which the Fund might reasonably expect to receive for the security upon its current sale. However, in light of the judgment involved in fair valuations, there can be no assurance that a fair value assigned to a particular security will be the amount which the Fund might be able to receive upon its current sale. In addition, if, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and may make the closing price unreliable, the Fund may fair value the security. The Fund uses an independent pricing service to provide fair value estimates for relevant non-U.S. equity securities on days when the U.S. market volatility exceeds a certain threshold. This pricing service uses proprietary correlations it has developed between the movement of prices of non-U.S. equity securities and indices of U.S.-traded securities, futures contracts and other indications to estimate the fair value of relevant non-U.S. securities. When fair value pricing is employed, the prices of securities used by the Fund may differ from quoted or published prices for the same security. Investments in money market funds are valued at net asset value per share.

Various inputs are used in determining the value of the Fund’s investments, as noted above. These inputs are summarized in the three broad levels below:

    Level 1 quoted prices in active markets for identical securities.
    Level 2
other significant observable inputs (including quoted prices for similar securities, foreign securities that may be fair valued and repurchase agreements). The table below includes all Level 2 securities. Any Level 2 securities with values based on quoted prices for similar securities would be noted in the Schedule of Investments.
    Level 3
significant unobservable inputs (including last trade price before trading was suspended, or at a discount thereto for lack of marketability or otherwise, market price information regarding other securities, information received from the company and/or published documents, including SEC filings and financial statements, or other publicly available information).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s investments as of December 31, 2016. For a detailed breakout of common stocks by country, please refer to the Schedule of Investments.


                               
    LEVEL 1   LEVEL 2   LEVEL 3   TOTAL
 
Common Stocks   $ 44,107,378     $ 57,884,387     $ 9,349     $ 102,001,114
 
Cash Equivalents           6,790,000             6,790,000
 

Level 3 Reconciliation:                                
                        REALIZED AND UNREALIZED        
        BALANCE AS OF 12/31/15       PURCHASES       GAIN (LOSS)1       BALANCE AS OF 12/31/16
 
Common Stocks       $18,710       $0       $(9,361)       $9,349
 
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.

24 | 2016 Annual Report to Stockholders

Royce Global Value Trust
 
Notes to Financial Statements (continued)

REPURCHASE AGREEMENTS:

The Fund may enter into repurchase agreements with institutions that the Fund’s investment adviser has determined are creditworthy The Fund restricts repurchase agreements to maturities of no more than seven days. Securities pledged as collateral for repurchase agreements, which are held until maturity of the repurchase agreements, are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). Repurchase agreements could involve certain risks in the event of default or insolvency of the counter-party, including possible delays or restrictions upon the ability of the Fund to dispose of its underlying securities. The remaining contractual maturity of the repurchase agreement held by the Fund at December 31, 2016 is overnight and continuous.


FOREIGN CURRENCY:

Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, expiration of currency forward contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, including investments in securities at the end of the reporting period, as a result of changes in foreign currency exchange rates.


DISTRIBUTIONS AND TAXES:

As a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the Fund is not subject to income taxes to the extent that it distributes substantially all of its taxable income for its fiscal year. The Schedule of Investments includes information regarding income taxes under the caption “Tax Information”.

The Fund pays any dividends and capital gain distributions annually in December. Because federal income tax regulations differ from generally accepted accounting principles, income and capital gain distributions determined in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Accordingly, the character of distributions and composition of net assets for tax purposes differ from those reflected in the accompanying financial statements.


CAPITAL GAINS TAXES:

The Fund is subject to a tax imposed on short-term capital gains on securities of issuers domiciled in certain countries. The Fund records an estimated deferred tax liability for these securities that have been held for less than one year. This amount, if any, is reported as deferred capital gains tax in the accompanying Statement of Assets and Liabilities, assuming those positions were disposed of at the end of the period, and accounted for as a reduction in the market value of the security.


INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME:

Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Non-cash dividend income is recorded at the fair market value of the securities received. Interest income is recorded on an accrual basis. 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 Fund incurs direct and indirect expenses. Expenses directly attributable to the Fund are charged to the Fund’s operations, while expenses applicable to more than one of the Royce Funds are allocated equitably. Certain personnel, occupancy costs and other administrative expenses related to the Funds are allocated by Royce & Associates (“Royce”) under an administration agreement and are included in administrative and office facilities and professional fees.


COMPENSATING BALANCE CREDITS:

The Fund has an arrangement with its custodian bank, whereby a portion of the custodian’s fee is paid indirectly by credits earned on the Fund’s cash on deposit with the bank. This deposit arrangement is an alternative to purchasing overnight investments. Conversely, the Fund pays interest to the custodian on any cash overdrafts, to the extent they are not offset by credits earned on positive cash balances.


Capital Stock:

The Fund issued 70,522 and 48,927 shares of Common Stock as reinvestment of distributions for the years ended December 31, 2016 and December 31, 2015, respectively.


2016 Annual Report to Stockholders | 25

Royce Global Value Trust
 
Notes to Financial Statements (continued)

Borrowings:

The Fund is party to a revolving credit agreement (the credit agreement) with BNP Paribas Prime Brokerage International, Limited (BNPPI). The Fund pays a commitment fee of 0.50% per annum on the unused portion of the credit agreement. The credit agreement has a 360-day rolling term that resets daily; however, if the Fund exceeds certain net asset value triggers, the credit agreement may convert to a 60-day rolling term that resets daily. The Fund is required to pledge portfolio securities as collateral in an amount up to two times the loan balance outstanding or as otherwise required by applicable regulatory standards and has granted a security interest in the securities pledged to, and in favor of, BNPPI as security for the loan balance outstanding. If the Fund fails to meet certain requirements, or maintain other financial covenants required under the credit agreement, the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the credit agreement which may necessitate the sale of portfolio securities at potentially inopportune times. BNPPI may terminate the credit agreement upon certain ratings downgrades of its corporate parent, which would result in the Fund’s entire loan balance becoming immediately due and payable. The occurrence of such ratings downgrades may necessitate the sale of portfolio securities at potentially inopportune times. The credit agreement also permits, subject to certain conditions, BNPPI to rehypothecate portfolio securities pledged by the Fund up to the amount of the loan balance outstanding. The Fund continues to receive payments in lieu of dividends and interest on rehypothecated securities. The Fund also has the right under the credit agreement to recall the rehypothecated securities from BNPPI on demand. If BNPPI fails to deliver the recalled security in a timely manner, the Fund is compensated by BNPPI for any fees or losses related to the failed delivery or, in the event a recalled security is not returned by BNPPI, the Fund, upon notice to BNPPI, may reduce the loan balance outstanding by the value of the recalled security failed to be returned. The Fund receives a portion of the fees earned by BNPPI in connection with the rehypothecation of portfolio securities.

As of December 31, 2016, the Fund has outstanding borrowings of $8,000,000. During the year ended December 31, 2016, the Fund borrowed an average daily balance of $8,000,000 at a weighted average borrowing cost of 1.69%. The maximum amount outstanding during the year ended December 31, 2016 was $8,000,000. As of December 31, 2016, the aggregate value of rehypothecated securities was $5,535,180. During the year ended December 31, 2016, the Fund earned $2,462 in fees from rehypothecated securities.


Investment Advisory Agreement:

The Investment Advisory Agreement between Royce and the Fund provides for fees to be paid at an annual rate of 1.25% of the Fund’s average daily net assets. For the year ended December 31, 2016, the Fund expensed Royce investment advisory fees totaling $1,180,559.


Purchases and Sales of Investment Securities:

For the year ended December 31, 2016, the costs of purchases and proceeds from sales of investment securities, other than short-term securities, amounted to $57,964,353 and $62,888,734, respectively.

Cross trades were executed by the Fund 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 year ended December 31, 2016, were as follows:


COST OF PURCHASES     PROCEEDS FROM SALES     REALIZED GAIN (LOSS)
 
$5,938,615     $314,870     $131,420
 

Tax Information:

Distributions during the years ended December 31, 2016 and 2015, were characterized as follows for tax purposes:


ORDINARY INCOME   LONG-TERM CAPITAL GAINS   RETURN OF CAPITAL
 
2016 2015   2016 2015   2016 2015
 
$1,435,789 $1,029,597   $ – $ –   $12,497 $ –
 

The tax basis components of distributable earnings at December 31, 2016, were as follows:


                                     
                    QUALIFIED LATE YEAR                
UNDISTRIBUTED     UNDISTRIBUTED LONG-TERM       NET UNREALIZED     ORDINARY AND       TOTAL       CAPITAL LOSS
ORDINARY     CAPITAL GAINS OR       APPRECIATION     POST-OCTOBER LOSS       DISTRIBUTABLE       CARRYFORWARD
INCOME     (CAPITAL LOSS CARRYFORWARD)       (DEPRECIATION)1     DEFERRALS2       EARNINGS       UTILIZED
 
$ –     $(19,718,673)       $3,050,927     $(581,585)       $(17,249,331)       $941,067
 
1
Includes timing differences on foreign currency, investments in publicly traded parternships, recognition of losses on securities sold and mark-to-market of Passive Foreign Investment Companies.
2
Under the current tax law, capital losses and qualified late year ordinary losses incurred after October 31 may be deferred and treated as occurring on the first day of the following fiscal year.

26 | 2016 Annual Report to Stockholders

Royce Global Value Trust
 
Notes to Financial Statements (continued)

Tax Information (continued):
 

For financial reporting purposes, capital accounts and distributions to stockholders are adjusted to reflect the tax character of permanent book/tax differences. For the year ended December 31, 2016, the Fund recorded the following permanent reclassifications, which relate primarily to current investments in publicly traded partnerships, foreign currency transactions, foreign capital gains tax and gains from the sale of Passive Foreign Investment Companies. Results of operations and net assets were not affected by these reclassifications.


UNDISTRIBUTED NET     ACCUMULATED NET      
INVESTMENT INCOME     REALIZED GAIN (LOSS)     PAID-IN CAPITAL
 
$336,535     $(336,535)     $ –
 

Management has analyzed the Fund’s tax positions taken on federal income tax returns for all open tax years (2013-2016) and has concluded that as of December 31, 2016, no provision for income tax is required in the Fund’s financial statements.


2016 Annual Report to Stockholders | 27

Royce Global Value Trust
 
Report of Independent Registered Public Accounting Firm

To the Board of Directors and the Stockholders of Royce Global Value Trust, Inc.:
 
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statement of operations, of changes in net assets and of cash flows and the financial highlights present fairly, in all material respects, the financial position of Royce Global Value Trust, Inc. (the “Fund”) as of December 31, 2016, the results of its operations, the changes in its net assets, its cash flows and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of December 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The financial highlights for each of the periods presented in the period ended December 31, 2014 were audited by other independent accountants whose report dated February 23, 2015 expressed an unqualified opinion on those statements.



PricewaterhouseCoopers LLP
Baltimore, Maryland
February 22, 2017

28 | 2016 Annual Report to Stockholders

Royce Micro-Cap Trust   December 31, 2016

   
Schedule of Investments            
Common Stocks – 100.1%            
             
    SHARES     VALUE  
   
             
CONSUMER DISCRETIONARY 14.2%            
AUTO COMPONENTS - 2.6%            

Fox Factory Holding 1

  5,300   $ 147,075  

LCI Industries 2, 3

  17,700     1,907,175  

Motorcar Parts of America 1

  88,700     2,387,804  

Sebang Global Battery

  50,500     1,563,010  

Standard Motor Products

  60,160     3,201,715  

Unique Fabricating

  6,800     99,280  
           
          9,306,059  
           
DISTRIBUTORS - 0.8%            

Fenix Parts 1

  422,300     1,190,886  

Weyco Group

  56,600     1,771,580  
           
          2,962,466  
           
DIVERSIFIED CONSUMER SERVICES - 1.9%            

American Public Education 1

  73,200     1,797,060  

Collectors Universe

  116,100     2,464,803  

Liberty Tax Cl. A

  148,900     1,995,260  

Universal Technical Institute

  270,000     785,700  
           
          7,042,823  
           
HOTELS, RESTAURANTS & LEISURE - 1.1%            

Century Casinos 1

  222,500     1,831,175  

Lindblad Expeditions Holdings 1

  234,000     2,211,300  
           
          4,042,475  
           
HOUSEHOLD DURABLES - 2.6%            

Cavco Industries 1, 2, 3

  19,291     1,926,206  

Ethan Allen Interiors 2

  45,200     1,665,620  

Flexsteel Industries 2

  14,400     888,048  

iRobot Corporation 1, 2

  15,000     876,750  

Lifetime Brands 2, 3

  124,294     2,206,219  

Stanley Furniture

  193,468     174,160  

Universal Electronics 1

  15,100     974,705  

ZAGG 1

  119,700     849,870  
           
          9,561,578  
           
INTERNET & DIRECT MARKETING RETAIL - 0.7%            

FTD Companies 1

  67,200     1,602,048  

Gaia Cl. A 1, 2

  100,000     865,000  
           
          2,467,048  
           
LEISURE PRODUCTS - 1.0%            

American Outdoor Brands 2

  22,400     472,192  

Black Diamond 1

  194,926     1,042,854  

Nautilus 1

  111,200     2,057,200  
           
          3,572,246  
           
MEDIA - 0.5%            

McClatchy Company (The) Cl. A 1

  69,313     913,545  

New Media Investment Group

  66,200     1,058,538  
           
          1,972,083  
           
SPECIALTY RETAIL - 1.6%            

AutoCanada

  115,200     1,983,707  

Destination Maternity

  212,000     1,096,040  

Haverty Furniture

  30,000     711,000  

Kirkland’s 1

  11,000     170,610  

MarineMax 1

  7,600     147,060  

Shoe Carnival 2

  21,028     567,335  

Stage Stores 2

  15,000     65,550  

TravelCenters of America LLC 1

  5,400     38,340  

West Marine 1

  86,000     900,420  
           
          5,680,062  
           
TEXTILES, APPAREL & LUXURY GOODS - 1.4%            

Crown Crafts

  104,059     806,457  

Culp

  32,900     1,222,235  

J.G. Boswell Company 4

  2,490     1,523,880  

YGM Trading

  1,482,000     1,398,790  
           
          4,951,362  
   
Total (Cost $48,324,100)         51,558,202  
   
 
CONSUMER STAPLES 2.7%            
BEVERAGES - 0.2%            

Crimson Wine Group 1, 4

  58,124     543,460  
           
FOOD PRODUCTS - 2.5%            

Farmer Bros. 1, 2

  61,000     2,238,700  

John B. Sanfilippo & Son 2

  17,800     1,252,942  

Landec Corporation 1

  75,610     1,043,418  

Seneca Foods Cl. A 1

  29,701     1,189,525  

Seneca Foods Cl. B 1

  40,400     1,696,800  

SunOpta 1

  207,981     1,466,266  

Waterloo Investment Holdings 1, 5

  806,207     241,862  
           
          9,129,513  
   
Total (Cost $5,670,338)         9,672,973  
   
 
ENERGY 5.7%            
ENERGY EQUIPMENT & SERVICES - 2.7%            

Aspen Aerogels 1

  94,985     392,288  

Canadian Energy Services & Technology

  25,000     142,629  

CARBO Ceramics 1

  34,000     355,640  

Dawson Geophysical 1

  73,654     592,178  

Era Group 1

  307,409     5,216,731  

Geospace Technologies 1, 2

  9,500     193,420  

Matrix Service 1, 2

  53,700     1,218,990  

Newpark Resources 1

  11,200     84,000  

North American Energy Partners

  50,000     192,500  

Pioneer Energy Services 1, 2

  57,500     393,875  

TerraVest Capital

  84,000     556,809  

Tesco Corporation 1, 2, 3

  58,000     478,500  
           
          9,817,560  
           
OIL, GAS & CONSUMABLE FUELS - 3.0%            

Ardmore Shipping

  182,700     1,351,980  

Cross Timbers Royalty Trust

  67,631     1,215,329  

Dorchester Minerals L.P.

  106,127     1,862,529  

Dorian LPG 1

  50,000     410,500  

Hugoton Royalty Trust

  287,574     611,095  

Panhandle Oil and Gas Cl. A

  5,500     129,525  

Permian Basin Royalty Trust

  176,333     1,359,528  

Sabine Royalty Trust

  59,548     2,093,112  

San Juan Basin Royalty Trust

  143,407     949,354  

StealthGas 1

  229,664     776,264  
           
          10,759,216  
   
Total (Cost $20,040,644)         20,576,776  
   
 
FINANCIALS 11.9%            
BANKS - 2.2%            

Bank of N.T. Butterfield & Son

  43,810     1,377,387  

Blue Hills Bancorp

  50,000     937,500  

Bryn Mawr Bank

  25,000     1,053,750  

Caribbean Investment Holdings 1

  735,647     86,128  

Chemung Financial

  31,000     1,126,850  

Fauquier Bankshares

  133,200     2,151,180  

Live Oak Bancshares

  30,900     571,650  

Peapack-Gladstone Financial

  20,606     636,313  
           
          7,940,758  
           

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2016 Annual Report to Stockholders | 29

Royce Micro-Cap Trust
 
 
Schedule of Investments (continued)

    SHARES     VALUE  
 
             
FINANCIALS (continued)            
CAPITAL MARKETS - 7.6%            

ASA Gold and Precious Metals

  171,150   $ 1,889,496  

Cowen Group 1

  25,000     387,500  

Diamond Hill Investment Group 2

  4,479     942,292  

Dundee Corporation Cl. A 1

  413,200     1,831,110  

EQT Holdings

  43,150     544,826  

Fiera Capital Cl. A

  78,000     742,442  

GAIN Capital Holdings

  25,000     164,500  

INTL FCStone 1, 2

  41,727     1,652,389  

JZ Capital Partners

  209,999     1,311,854  

Manning & Napier Cl. A

  136,600     1,031,330  

Medley Management Cl. A

  153,400     1,518,660  

MVC Capital 2

  360,300     3,091,374  

OHA Investment

  154,620     267,493  

Queen City Investments 4

  948     1,232,400  

Silvercrest Asset Management Group Cl. A

  203,300     2,673,395  

Sprott

  1,414,533     2,644,381  

U.S. Global Investors Cl. A

  646,254     878,905  

Urbana Corporation

  237,600     504,346  

Value Line

  144,774     2,823,093  

Warsaw Stock Exchange

  52,900     504,752  

Westwood Holdings Group 2

  12,400     743,876  

ZAIS Group Holdings Cl. A 1, 2

  262,960     386,551  
           
          27,766,965  
           
CONSUMER FINANCE - 0.6%            

EZCORP Cl. A 1, 2, 3

  201,000     2,140,650  

J.G. Wentworth Company Cl. A 1, 4

  135,000     49,950  
           
          2,190,600  
           
DIVERSIFIED FINANCIAL SERVICES - 0.7%            

Banca Finnat Euramerica

  568,000     222,196  

PICO Holdings 1, 2, 3

  147,100     2,228,565  
           
          2,450,761  
           
INSURANCE - 0.8%            

Hallmark Financial Services 1, 2

  114,000     1,325,820  

State Auto Financial

  59,264     1,588,868  
           
          2,914,688  
   
Total (Cost $47,276,681)         43,263,772  
   
 
HEALTH CARE 13.4%            
BIOTECHNOLOGY - 4.1%            

Abeona Therapeutics 1

  312,221     1,514,272  

Aquinox Pharmaceuticals 1, 2

  159,497     2,633,295  

ARIAD Pharmaceuticals 1, 2

  25,802     320,977  

BioCryst Pharmaceuticals 1

  144,000     911,520  

Invitae Corporation 1

  156,412     1,241,911  

Keryx Biopharmaceuticals 1

  117,725     689,868  

Kindred Biosciences 1

  148,000     629,000  

Knight Therapeutics 1

  187,000     1,495,833  

Progenics Pharmaceuticals 1

  6,500     56,160  

Sangamo BioSciences 1

  281,785     859,444  

Zafgen 1

  504,075     1,602,959  

Zealand Pharma 1

  199,700     3,006,813  
           
          14,962,052  
           
HEALTH CARE EQUIPMENT & SUPPLIES - 4.9%            

Analogic Corporation

  18,200     1,509,690  

Atrion Corporation 2, 3

  6,914     3,506,781  

Cerus Corporation 1, 2, 3

  140,000     609,000  

Derma Sciences 1

  177,100     920,920  

Exactech 1, 2, 3

  112,300     3,065,790  

Inogen 1

  5,400     362,718  

Invacare Corporation 2

  44,300     578,115  

STRATEC Biomedical

  14,000     674,047  

Surmodics 1

  130,492     3,314,497  

Syneron Medical 1

  69,200     581,280  

TearLab Corporation 1

  85,000     43,358  

Trinity Biotech ADR Cl. A 1

  6,200     42,904  

Utah Medical Products

  36,200     2,633,550  
           
          17,842,650  
           
HEALTH CARE PROVIDERS & SERVICES - 2.8%            

Aceto Corporation

  79,600     1,748,812  

BioTelemetry 1

  49,700     1,110,795  

Cross Country Healthcare 1

  157,100     2,452,331  

Landauer

  30,400     1,462,240  

National Research Cl. A

  40,033     760,627  

PharMerica Corporation 1

  40,000     1,006,000  

Psychemedics Corporation

  37,500     925,500  

U.S. Physical Therapy

  10,000     702,000  
           
          10,168,305  
           
HEALTH CARE TECHNOLOGY - 0.2%            

Connecture 1

  20,000     33,600  

Vocera Communications 1

  33,100     612,019  
           
          645,619  
           
PHARMACEUTICALS - 1.4%            

Agile Therapeutics 1, 2

  80,000     456,000  

Alcobra 1

  645,055     1,354,615  

Lipocine 1

  355,404     1,307,887  

Theravance Biopharma 1

  66,009     2,104,367  
           
          5,222,869  
   
Total (Cost $36,000,489)         48,841,495  
   
 
INDUSTRIALS 18.4%            
AEROSPACE & DEFENSE - 0.6%            

Astronics Corporation 1

  4,400     148,896  

Astronics Corporation Cl. B 1, 4

  660     22,209  

CPI Aerostructures 1

  9,500     87,875  

FLYHT Aerospace Solutions 1

  1,916,800     321,216  

Innovative Solutions and Support 1

  142,828     475,617  

Mercury Systems 1

  29,700     897,534  

SIFCO Industries 1

  45,800     350,370  
           
          2,303,717  
           
BUILDING PRODUCTS - 1.4%            

Burnham Holdings Cl. A 4

  117,000     1,842,750  

DIRTT Environmental Solutions 1

  171,000     798,548  

Insteel Industries

  44,200     1,575,288  

Patrick Industries 1

  11,500     877,450  
           
          5,094,036  
           
COMMERCIAL SERVICES & SUPPLIES - 2.2%            

Atento 1

  246,001     1,869,607  

CompX International Cl. A

  107,500     1,730,750  

Heritage-Crystal Clean 1, 2, 3

  241,677     3,794,329  

Team 1, 2

  17,500     686,875  
           
          8,081,561  
           
CONSTRUCTION & ENGINEERING - 2.3%            

Ameresco Cl. A 1

  261,900     1,440,450  

IES Holdings 1

  234,000     4,481,100  

Layne Christensen 1, 2

  50,000     543,500  

Northwest Pipe 1

  58,400     1,005,648  

30 | 2016 Annual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

December 31, 2016

 
Schedule of Investments (continued)

    SHARES       VALUE
 
             
INDUSTRIALS (continued)            
CONSTRUCTION & ENGINEERING (continued)

NV5 Global 1

  27,400     $ 915,160
           
            8,385,858
           
ELECTRICAL EQUIPMENT - 1.1%            

Encore Wire 2

  4,100       177,735

LSI Industries

  144,212       1,404,625

Orion Energy Systems 1

  170,000       368,900

Powell Industries

  21,400       834,600

Power Solutions International 1, 2

  7,100       53,250

Preformed Line Products

  20,743       1,205,583
           
            4,044,693
           
INDUSTRIAL CONGLOMERATES - 0.8%            

Raven Industries 2

  117,159       2,952,407
           
MACHINERY - 6.8%            

Chart Industries 1

  1,100       39,622

CIRCOR International 2

  26,100       1,693,368

Columbus McKinnon

  1,500       40,560

Eastern Company (The)

  39,750       830,775

Foster (L.B.) Company 2

  99,300       1,350,480

FreightCar America

  81,000       1,209,330

Graham Corporation 2, 3

  78,050       1,728,807

Hurco Companies

  36,866       1,220,264

Kadant

  54,600       3,341,520

Lindsay Corporation

  29,400       2,193,534

Luxfer Holdings ADR

  59,712       650,264

Lydall 1

  1,800       111,330

NN

  50,300       958,215

Pfeiffer Vacuum Technology

  6,000       560,622

Sun Hydraulics

  86,900       3,473,393

Tennant Company

  36,600       2,605,920

Titan International

  237,600       2,663,496

Twin Disc 1

  5,300       77,380
           
            24,748,880
           
MARINE - 0.6%            

Clarkson

  74,500       1,994,940
           
PROFESSIONAL SERVICES - 1.5%            

Acacia Research 1, 2

  190,000       1,235,000

CBIZ 1

  47,000       643,900

Franklin Covey 1

  40,100       808,015

GP Strategies 1

  7,600       217,360

Heidrick & Struggles International

  46,300       1,118,145

Kforce 2

  4,700       108,570

Resources Connection

  8,800       169,400

RPX Corporation 1

  100,000       1,080,000
           
            5,380,390
           
ROAD & RAIL - 0.6%            

Marten Transport

  3,300       76,890

Patriot Transportation Holding 1, 2

  29,460       686,418

Universal Logistics Holdings 2

  77,600       1,268,760
           
            2,032,068
           
TRADING COMPANIES & DISTRIBUTORS - 0.5%            

Central Steel & Wire 4

  788       346,523

Houston Wire & Cable

  249,918       1,624,467
           
            1,970,990
 
Total (Cost $53,738,212)           66,989,540
 
             
INFORMATION TECHNOLOGY 19.0%
COMMUNICATIONS EQUIPMENT - 1.6%            

ADTRAN

  23,300       520,755

Applied Optoelectronics 1, 2

  7,000       164,080

Bel Fuse Cl. A

  67,705       1,713,614

CalAmp Corporation 1

  3,100       44,950

Clearfield 1

  61,300       1,268,910

Harmonic 1

  147,000       735,000

Oclaro 1

  123,600       1,106,220

PCTEL

  34,100       183,458

Sandvine Corporation

  35,200       73,669
           
            5,810,656
           
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 5.4%

Agilysys 1

  170,587       1,767,281

ePlus 1

  2,100       241,920

Fabrinet 1

  2,200       88,660

FARO Technologies 1, 2, 3

  81,700       2,941,200

HollySys Automation Technologies

  62,900       1,152,328

Inficon Holding

  3,420       1,232,788

LRAD Corporation

  853,456       1,459,410

Mesa Laboratories 2, 3

  22,700       2,786,425

Netlist 1

  63,600       64,872

Novanta 1

  37,600       789,600

Orbotech 1, 2, 3

  102,800       3,434,548

PC Connection

  43,716       1,227,983

Perceptron 1

  8,500       56,440

Richardson Electronics

  316,900       1,996,470

Rogers Corporation 1, 2

  600       46,086

Vishay Precision Group 1

  10,000       189,000
           
            19,475,011
           
INTERNET SOFTWARE & SERVICES - 3.3%

Actua Corporation 1

  46,876       656,264

Care.com 1, 2, 3

  207,587       1,779,020

comScore 1

  81,905       2,586,560

IZEA 1

  81,770       368,783

QuinStreet 1

  525,550       1,976,068

RealNetworks 1

  135,362       657,859

Reis

  25,000       556,250

Solium Capital 1

  215,400       1,354,021

Stamps.com 1

  14,500       1,662,425

Support.com 1

  316,800       272,448
           
            11,869,698
           
IT SERVICES - 1.1%            

Computer Task Group 2

  140,838       592,928

Hackett Group (The)

  55,500       980,130

Innodata 1

  437,275       1,071,324

MoneyGram International 1

  102,003       1,204,655

Virtusa Corporation 1

  8,100       203,472
           
            4,052,509
           
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 4.2%

Amtech Systems 1, 2

  160,284       681,207

Brooks Automation

  129,100       2,203,737

CyberOptics Corporation 1

  16,200       422,820

Daqo New Energy ADR 1

  20,000       386,000

FormFactor 1

  22,869       256,133

Intermolecular 1

  240,000       227,520

IXYS Corporation

  18,800       223,720

Kopin Corporation 1

  242,200       687,848

Kulicke & Soffa Industries 1

  88,000       1,403,600

MoSys 1, 2

  684,275       157,452

Nanometrics 1

  67,300       1,686,538

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2016 Annual Report to Stockholders | 31

Royce Micro-Cap Trust

 
Schedule of Investments (continued)

    SHARES       VALUE  
 
               
INFORMATION TECHNOLOGY (continued)              
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (continued)

Nova Measuring Instruments 1

  128,400     $ 1,687,176  

PDF Solutions 1

  25,000       563,750  

Photronics 1

  189,700       2,143,610  

Sigma Designs 1

  89,000       534,000  

Silicon Motion Technology ADR

  34,100       1,448,568  

Ultra Clean Holdings 1

  49,900       484,030  

Xcerra Corporation 1

  20,900       159,676  
             
            15,357,385  
             
SOFTWARE - 2.1%              

American Software Cl. A

  120,352       1,243,236  

BSQUARE Corporation 1

  83,675       489,499  

Computer Modelling Group

  337,700       2,291,325  

Model N 1

  166,693       1,475,233  

Monotype Imaging Holdings

  15,000       297,750  

PSI

  34,000       436,258  

Rubicon Project 1

  92,200       684,124  

SeaChange International 1

  284,200       653,660  
             
            7,571,085  
             
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.3%

Intevac 1

  379,300       3,243,015  

Kortek

  135,007       1,555,879  
             
            4,798,894  
 
Total (Cost $62,002,414)           68,935,238  
 
               
MATERIALS 6.2%              
CHEMICALS - 1.8%              

Balchem Corporation

  11,775       988,158  

FutureFuel Corporation

  85,262       1,185,142  

Quaker Chemical 2

  26,000       3,326,440  

Trecora Resources 1

  89,600       1,240,960  
             
            6,740,700  
             
CONSTRUCTION MATERIALS - 0.8%              

Ash Grove Cement 4

  7,900       2,054,000  

Monarch Cement 4

  16,303       745,862  

U.S. Concrete 1

  3,400       222,700  
             
            3,022,562  
             
CONTAINERS & PACKAGING - 0.3%              

UFP Technologies 1

  36,445       927,525  
             
METALS & MINING - 3.3%              

Alamos Gold Cl. A

  186,044       1,283,110  

Ampco-Pittsburgh

  79,002       1,323,283  

Comstock Mining 1

  1,875,000       493,125  

Exeter Resource 1

  1,195,400       895,235  

Haynes International 2

  25,000       1,074,750  

Imdex 1

  525,666       217,758  

MAG Silver 1

  74,050       816,772  

Major Drilling Group International 1

  706,757       3,695,255  

Olympic Steel

  35,000       848,050  

Pretium Resources 1

  80,000       662,570  

Universal Stainless & Alloy Products 1

  11,600       156,716  

Victoria Gold 1

  890,000       371,206  
             
            11,837,830  
 
Total (Cost $16,417,272)           22,528,617  
 
               
REAL ESTATE 3.7%              
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.5%

BRT Realty Trust 1

  230,331       1,886,411  
             
REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.2%

AV Homes 1

  82,000       1,295,600  

Forestar Group 1, 2

  53,000       704,900  

FRP Holdings 1, 2, 3

  58,300       2,197,910  

Griffin Industrial Realty

  43,384       1,376,574  

Hopefluent Group Holdings

  1,400,000       387,169  

Marcus & Millichap 1

  49,567       1,324,430  

RMR Group Cl. A

  37,100       1,465,450  

Tejon Ranch 1, 2, 3

  115,162       2,928,570  
             
            11,680,603  
 
Total (Cost $11,153,885)           13,567,014  
 
               
TELECOMMUNICATION SERVICES 0.1%              
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.1%              

ORBCOMM 1

  67,100       554,917  
 
Total (Cost $570,215)           554,917  
 
               
UTILITIES 0.1%              
GAS UTILITIES - 0.1%              

Shizuoka Gas

  40,000       281,180  
             
INDEPENDENT POWER & RENEWABLE ELECTRICITY PRODUCER - 0.0%

Alterra Power

  45,000       174,617  
 
Total (Cost $467,214)           455,797  
 
               
MISCELLANEOUS 6 4.7%              
 
Total (Cost $15,686,815)           17,027,717  
 
               
TOTAL COMMON STOCKS              
 
(Cost $317,348,279)           363,972,058  
 
               
PREFERRED STOCK 0.3%              

Seneca Foods Conv. 1, 4

  45,409       1,089,816  
 
(Cost $578,719)           1,089,816  
 
               
REPURCHASE AGREEMENT 11.9%              
Fixed Income Clearing Corporation, 0.03% dated 12/30/16, due 1/3/17, maturity value
$43,472,145 (collateralized by obligations of various U.S. Government Agencies, 2.25%
due 11/15/24, valued at $44,344,237)
 
(Cost $43,472,000)           43,472,000  
 
               
TOTAL INVESTMENTS 112.3%              
 
(Cost $361,398,998)           408,533,874  
 
               
LIABILITIES LESS CASH AND OTHER ASSETS – (12.3)%       (44,833,121 )
             
               
 
NET ASSETS 100.0%         $ 363,700,753  
 

32 | 2016 Annual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

December 31, 2016

 
New additions in 2016.
1 Non-income producing.
2
All or a portion of these securities were pledged as collateral in connection with the revolving credit agreement at December 31, 2016. Total market value of pledged securities at December 31, 2016, was $71,014,926.
3
At December 31, 2016, a portion of these securities were rehypothecated in connection with the Fund’s revolving credit agreement in the aggregate amount of $39,021,909.
4
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.
5
A security for which market quotations are not readily available represents 0.1% of net assets. This security has been valued at its fair value under procedures approved by the Fund’s Board of Directors. This security is defined as a Level 3 security due to the use of significant unobservable inputs in the determination of fair value. See Notes to Financial Statements.
6 Includes securities first acquired in 2016 and less than 1% of net assets.
 

Bold indicates the Fund’s 20 largest equity holdings in terms of December 31, 2016, market value.
 

TAX INFORMATION: The cost of total investments for Federal income tax purposes was $364,689,765. At December 31, 2016, net unrealized appreciation for all securities was $43,844,109, consisting of aggregate gross unrealized appreciation of $90,607,363 and aggregate gross unrealized depreciation of $46,763,254. The primary causes of the differences between book and tax basis cost are the timing of the recognition of losses on securities sold, investments in publicly traded partnerships and Trusts and mark-to-market of Passive Foreign Investment Companies.
 

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2016 Annual Report to Stockholders | 33

Royce Micro-Cap Trust   December 31, 2016

 
Statement of Assets and Liabilities

ASSETS:        
Investments at value   $ 365,061,874  
 
Repurchase agreements (at cost and value)     43,472,000  
 
Cash and foreign currency     639  
 
Receivable for investments sold     177,818  
 
Receivable for dividends and interest     519,587  
 
Prepaid expenses and other assets     22,771  
 
Total Assets     409,254,689  
 
LIABILITIES:        
Revolving credit agreement     45,000,000  
 
Payable for investments purchased     274,464  
 
Payable for investment advisory fee     152,896  
 
Payable for directors’ fees     23,341  
 
Payable for interest expense     7,305  
 
Accrued expenses     95,930  
 
Total Liabilities     45,553,936  
 
Net Assets   $ 363,700,753  
 
ANALYSIS OF NET ASSETS:        
Paid-in capital -$0.001 par value per share; 37,780,330 shares outstanding (150,000,000 shares authorized)   $ 317,416,636  
 
Undistributed net investment income (loss)     (1,987,430 )
 
Accumulated net realized gain (loss) on investments and foreign currency     1,138,148  
 
Net unrealized appreciation (depreciation) on investments and foreign currency     47,133,399  
 
Net Assets (net asset value per share - $9.63)   $ 363,700,753  
 
Investments at identified cost   $ 317,926,998  
 
         

34 | 2016 Annual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

Royce Micro-Cap Trust

 
Statement of Changes in Net Assets

    YEAR ENDED 12/31/16     YEAR ENDED 12/31/15  
 
                 
INVESTMENT OPERATIONS:                
Net investment income (loss)   $ 1,040,381     $ 917,928  
 
Net realized gain (loss) on investments and foreign currency     17,298,523       21,372,239  
 
Net change in unrealized appreciation (depreciation) on investments and foreign currency     46,017,634       (71,062,194 )
 
Net increase (decrease) in net assets from investment operations     64,356,538       (48,772,027 )
 
DISTRIBUTIONS:                
Net investment income     (2,974,373 )     (399,672 )
 
Net realized gain on investments and foreign currency     (20,650,513 )     (43,520,307 )
 
Total distributions     (23,624,886 )     (43,919,979 )
 
CAPITAL STOCK TRANSACTIONS:                
Reinvestment of distributions     10,562,009       17,611,123  
 
Total capital stock transactions     10,562,009       17,611,123  
 
Net Increase (Decrease) In Net Assets     51,293,661       (75,080,883 )