An exclusive interview with small cap stock pioneer Chuck Royce who says small, top quality companies are selling at bargain prices.
WEALTHTRACK Episode #1301; Originally Broadcast on June 24, 2016
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CHARLES ROYCE
- Founder & Portfolio Manager,
- The Royce Funds
It’s hard to believe our twelfth season of WEALTHTRACK on Public Television starts this week! Our goal then and now is to help our viewers build long-term financial security, through disciplined, diversified investing, with advice from some of the top professionals in the business.
We are continuing that tradition this week with an exclusive interview with Charles “Chuck” Royce, founder of the Royce Funds, a pioneer in small cap stocks. Royce is a value investor with a long history of market outperformance with less than market volatility. However, as happens with even the best investors, he has just been through a multi-year period where his funds have not beaten the market.
There have been two widely recognized features of the stock market’s recovery since the 2009 low.
First of all, growth has outperformed value by a considerable margin. A good example is what has happened with the small company stock benchmarks, the Russell 2000 indexes. The Russell 2000 Growth Index has delivered 15% annualized returns since 2009, outpacing the Russell 2000 Value index’s 12% annualized performance.
Secondly, passive indexes have outperformed the vast majority of active stock managers. Although less pronounced with small cap stocks, it is really evident in the large cap universe. The Russell Large Cap 1000 Index experienced nearly 15% annualized returns, whereas actively managed large cap mutual funds delivered just under 13%.
Royce believes we are seeing a reversal of both of those trends now and that they will last. He will explain why.
Royce founded The Royce Funds in 1972. He recently announced the completion of a multi-year succession plan where he will remain Chairman, step down as CEO and focus on his first love, stock picking. He will continue to be the Lead Manager on his flagship Royce Pennsylvania Mutual Fund, which he has been running since 1972, as well as several other Royce funds, including Premier and Total Return.
If you miss the show on air this week, you can always watch it on our website. It’s available to ourPREMIUM viewers right now and to everyone else over the weekend. We also have a brief EXTRAinterview with Chuck Royce available exclusively online. As always, we welcome your feedback via the Contact Us link on our website, Facebook or Twitter.
Have a great summer weekend and make the week ahead a profitable and productive one.
Best Regards,
Consuelo
BE AWARE OF THE MARKET RISK IN INDEX FUNDS
BASIC INDEX FUNDS’ ADVANTAGES
- Broad, unfiltered & unhedged exposure to market
- Low fees and tax consequences
BASIC INDEX FUNDS’ DISADVANTAGES:
- Exposure to all companies in index: good & bad, expensive and cheap, profitable & unprofitable
No Bookshelf titles this week.
BRAND NAME BANK TECHNOLOGY
Diebold Inc (DBD)
- Price: $25.97 on 6/22/16
- 52-week range: $22.84 – $37.98
Ares Management LP (ARES)
Lazard Ltd (LAZ)
Cognex Corp (CGNX)
Lincoln Electric Holdings Inc (LECO)
WEALTHTRACK PREMIUM subscribers can access your copy here, otherwise this transcript is available here for purchase.
More information regarding WEALTHTRACK transcripts can be found here
Charles Royce from the WEALTHTRACK archives:
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MANAGING MONEY FOCUS
Half a century ago Chuck Royce identified small company stocks as a distinct asset class full of attractive investment opportunities. Starting with his flagship Royce Pennsylvania Mutual fund in 1972 he built a pioneering, small-cap oriented investment management firm, Royce & Associates which now has 18 micro, small and mid-cap focused mutual funds, several of them run by Royce himself. The firm recently announced its founder would retire from the day to day management duties as CEO and focus solely on managing money.
