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 Value 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
)


 


NET ASSETS:
 
 
 
 
 
 
 
 


 


Beginning
 of year
 
 
312,407,092

 
 
 
387,487,975

 


 


End of
 year (including undistributed net investment income (loss) of $(1,987,430) at 12/31/16
 and $(116,177) at 12/31/15)
 
$
363,700,753

 
 
$
312,407,092

 


 






THE ACCOMPANYING
 NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
 
2016 Annual
 Report to Stockholders | 35







Royce Micro-Cap
 Trust
 
Year Ended
 December 31, 2016






 


Statement
 of Operations






INVESTMENT
 INCOME:
 
 
 
 


INCOME:
 
 
 
 


Dividends
 
$
5,148,607
 


 


Foreign withholding
 tax
 
 
(90,286
)


 


Interest
 
 
9,197
 


 


Rehypothecation
 income
 
 
52,529
 


 


Total income

 
 
5,120,047

 


 


EXPENSES:
 
 
 
 


 


Investment
 advisory fees
 
 
2,811,209
 


 


Interest expense
 
 
775,138
 


 


Stockholder
 reports
 
 
125,590
 


 


Directors’ fees
 
 
87,305
 


 


Administrative
 and office facilities
 
 
78,686
 


 


Custody and
 transfer agent fees
 
 
78,184
 


 


Professional
 fees
 
 
56,507
 


 


Other expenses
 
 
67,125
 


 


Total expenses

 
 
4,079,744

 


 


Compensating
 balance credits
 
 
(78
)


 


Net expenses

 
 
4,079,666

 


 


Net investment
 income (loss)
 
 
1,040,381

 


 


REALIZED
 AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
 
 
 
 


NET REALIZED
 GAIN (LOSS):
 
 
 
 


 


Investments
 
 
17,310,170
 


 


Foreign currency
 transactions
 
 
(11,647
)


 


NET CHANGE
 IN UNREALIZED APPRECIATION (DEPRECIATION):
 
 
 
 


 


Investments
 and foreign currency translations
 
 
46,016,376
 


 


Other assets
 and liabilities denominated in foreign currency
 
 
1,258
 


 


Net realized
 and unrealized gain (loss) on investments and foreign currency
 
 
63,316,157

 


 


NET INCREASE
 (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS
 
$
64,356,538

 


 






36 | 2016
 Annual Report to Stockholders
 
THE ACCOMPANYING
 NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS







Royce Micro-Cap
 Trust
 
Year Ended
 December 31, 2016






 


Statement
 of Cash Flows






CASH FLOWS
 FROM OPERATING ACTIVITIES:
 
 
 
 


Net increase
 (decrease) in net assets from investment operations
 
$
64,356,538
 


 


Adjustments
 to reconcile net increase (decrease) in net assets from investment operations to
 net cash provided by operating activities:
 
 
 
 


 



Purchases
 of long-term investments
 
 
(89,262,035
)


 



Proceeds
 from sales and maturities of long-term investments
 
 
130,287,242
 


 



Net
 purchases, sales and maturities of short-term investments
 
 
(29,054,000
)


 



Net
 (increase) decrease in dividends and interest receivable and other assets
 
 
55,414
 


 



Net
 increase (decrease) in interest expense payable, accrued expenses and other liabilities
 
 
(54,868
)


 



Net
 change in unrealized appreciation (depreciation) on investments
 
 
(46,016,376
)


 



Net
 realized gain (loss) on investments and foreign currency
 
 
(17,298,523
)


 


Net cash
 provided by operating activities
 
 
13,013,392

 


 



CASH FLOWS
 FROM FINANCING ACTIVITIES:
 
 
 
 


Net increase
 (decrease) in revolving credit agreement
 
 
–
 


 



Distributions
 
 
(23,624,886
)


 



Reinvestment
 of distributions
 
 
10,562,009
 


 



Net cash
 used for financing activities
 
 
(13,062,877
)


 


INCREASE
 (DECREASE) IN CASH:
 
 
(49,485
)


 



Cash and
 foreign currency at beginning of year
 
 
50,124

 


 



Cash and
 foreign currency at end of year
 
$
639
 


 






THE ACCOMPANYING
 NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
 
2016 Annual
 Report to Stockholders | 37





Royce Micro-Cap Trust


 


Financial
 Highlights


This table
 is presented to show selected data for a share of Common Stock outstanding throughout
 each period, and to assist stockholders in evaluating the Fund’s performance
 for the periods presented.






 
 

YEARS ENDED


 
 
 


 
 
 
12/31/16

 
 
12/31/15

 
 
12/31/14

 
 
12/31/13

 
 
12/31/12

 


 


Net Asset
 Value, Beginning of Period
 
 
$
8.59
 
 
$
11.33
 
 
$
14.12
 
 
$
10.93
 
 
$
9.86
 


 


INVESTMENT
 OPERATIONS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Net investment
 income (loss)
 
 
 
0.03
 
 
 
0.03
 
 
 
(0.01
)
 
 
0.01
 
 
 
0.15
 


 


Net realized
 and unrealized gain (loss) on investments and foreign currency
 
 
 
1.70
 
 
 
(1.42
)
 
 
0.25
 
 
 
4.64
 
 
 
1.58
 


 


Total investment
 operations
 
 
 
1.73
 
 
 
(1.39
)
 
 
0.24
 
 
 
4.65
 
 
 
1.73
 


 


DISTRIBUTIONS
 TO PREFERRED STOCKHOLDERS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Net investment
 income
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
(0.02
)


 


Net realized
 gain on investments and foreign currency
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
(0.09
)


 


Total distributions
 to Preferred Stockholders
 
 
 
–

 
 
 
–

 
 
 
–

 
 
 
–

 
 
 
(0.11
)


 



Net Increase (Decrease) in Net Assets Applicable to Common Stockholders from Investment
 Operations
 
 
 
1.73
 
 
 
(1.39
)
 
 
0.24
 
 
 
4.65
 
 
 
1.62
 


 


DISTRIBUTIONS
 TO COMMON STOCKHOLDERS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Net investment
 income
 
 
 
(0.08
)
 
 
(0.01
)
 
 
(0.04
)
 
 
(0.03
)
 
 
(0.08
)


 


Net realized
 gain on investments and foreign currency
 
 
 
(0.56
)
 
 
(1.25
)
 
 
(2.86
)
 
 
(1.35
)
 
 
(0.43
)


 


Total distributions
 to Common Stockholders
 
 
 
(0.64
)
 
 
(1.26
)
 
 
(2.90
)
 
 
(1.38
)
 
 
(0.51
)


 


CAPITAL STOCK
 TRANSACTIONS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Effect of
 reinvestment of distributions by Common Stockholders
 
 
 
(0.05
)
 
 
(0.09
)
 
 
(0.13
)
 
 
(0.08
)
 
 
(0.04
)


 


Total capital
 stock transactions
 
 
 
(0.05
)
 
 
(0.09
)
 
 
(0.13
)
 
 
(0.08
)
 
 
(0.04
)


 


Net Asset
 Value, End of Period
 
 
$
9.63
 
 
$
8.59
 
 
$
11.33
 
 
$
14.12
 
 
$
10.93
 


 


Market
 Value, End of Period
 
 
$
8.16
 
 
$
7.26
 
 
$
10.08
 
 
$
12.61
 
 
$
9.45
 


 


TOTAL RETURN:1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Net Asset
 Value
 
 
 
21.98
%
 
 
(11.64
)%
 
 
3.46
%
 
 
44.66
%
 
 
17.23
%


Market Value
 
 
 
22.30
%
 
 
(16.06
)%
 
 
3.06
%
 
 
49.42
%
 
 
13.95
%


 


RATIOS BASED
 ON AVERAGE NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Investment
 advisory fee expense2
 
 
 
0.87
%
 
 
0.93
%
 
 
0.93
%
 
 
0.82
%
 
 
1.12
%


 


Other operating
 expenses
 
 
 
0.39
%
 
 
0.35
%
 
 
0.25
%
 
 
0.29
%
 
 
0.18
%


 


Total expenses
 (net)3
 
 
 
1.26
%
 
 
1.28
%
 
 
1.18
%
 
 
1.11
%
 
 
1.30
%


 


Expenses net
 of fee waivers and excluding interest expense
 
 
 
1.02
%
 
 
1.08
%
 
 
1.05
%
 
 
0.96
%
 
 
1.27
%


 


Expenses prior
 to fee waivers and balance credits
 
 
 
1.26
%
 
 
1.28
%
 
 
1.18
%
 
 
1.11
%
 
 
1.32
%


 


Expenses prior
 to fee waivers
 
 
 
1.26
%
 
 
1.28
%
 
 
1.18
%
 
 
1.11
%
 
 
1.32
%


 


Net investment
 income (loss)
 
 
 
0.32
%
 
 
0.26
%
 
 
(0.09
)%
 
 
0.08
%
 
 
1.46
%


 


SUPPLEMENTAL
 DATA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Net Assets
 Applicable to Common Stockholders, End of Period 
(in thousands)
 
 
$
363,701
 
 
$
312,407
 
 
$
387,488
 
 
$
433,121
 
 
$
318,545
 


 


Portfolio
 Turnover Rate
 
 
 
26
%
 
 
39
%
 
 
41
%
 
 
29
%
 
 
28
%


 


REVOLVING
 CREDIT AGREEMENT:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Asset coverage
 
 
 
908
%
 
 
794
%
 
 
746
%
 
 
1062
%
 
 
808
%


 


Asset coverage
 per $1,000
 
 
$
9,082
 
 
$
7,942
 
 
$
7,458
 
 
$
10,625
 
 
$
8,079
 


 






1
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.


2
The investment
 advisory fee is calculated based on average net assets over a rolling 36-month basis,
 while the above ratios of investment advisory fee expenses are based on the average
 net assets applicable to Common Stockholders over a 12-month basis.


3
Expense ratio
 based on total average net assets including liquidation value of Preferred Stock
 was 1.10% for the year ended December 31, 2012.






38 | 2016
 Annual Report to Stockholders
 
THE ACCOMPANYING
 NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS





Royce Micro-Cap Trust
Notes to Financial Statements


Summary
 of Significant Accounting Policies


Royce
 Micro-Cap Trust, Inc. (the “Fund”), is a diversified closed-end investment company
 that was incorporated under the laws of the State of Maryland on September 9, 1993.
 The Fund commenced operations on December 14, 1993.


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. Level 2 securities with values based on quoted prices for similar
 securities are 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 sector classification, please refer to the Schedule of Investments.






 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 LEVEL 1
 
 LEVEL 2
 
  LEVEL 3
 
     TOTAL
 


 


Common Stocks
 
 
$339,476,282
 
 
 
$24,253,914
 
 
 
$241,862
 
 
 
$363,972,058

 


 


Preferred
 Stocks
 
 
–
 
 
 
1,089,816
 
 
 
–
 
 
 
1,089,816

 


 


Cash Equivalents
 
 
–
 
 
 
43,472,000
 
 
 
–
 
 
 
43,472,000

 


 






Certain
 securities have transferred in and out of Level 1 and Level 2 measurements during
 the reporting period. The Fund recognizes transfers between levels as of the end
 of the reporting period. For the year ended December 31, 2016, securities valued
 at $594,776 were transferred from Level 1 to Level 2 within the fair value hierarchy.


2016 Annual Report to Stockholders | 39



Royce Micro-Cap Trust
Notes to Financial Statements (continued)

VALUATION OF INVESTMENTS (continued):



Level 3 Reconciliation:


 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
REALIZED
 AND UNREALIZED
 
 
 


 
 
 
BALANCE
 AS OF 12/31/15
 
 
GAIN
 (LOSS)1
 
 
BALANCE
 AS OF 12/31/16


 


Common Stocks
 
 
$225,738
 
 
$16,124
 
 
$241,862


 




1
The net change
 in unrealized appreciation (depreciation) is included in the accompanying Statement
 of Operations. Change in unrealized appreciation (depreciation) includes net unrealized
 appreciation (depreciation) resulting from changes in investment values during the
 reporting period and the reversal of previously recorded unrealized appreciation
 (depreciation) when gains or losses are realized. Net realized gain (loss) from
 investments and foreign currency transactions is included in the accompanying Statement
 of Operations.


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


 
 
 
FAIR
 VALUE AT
 
 
 
 
 
 
 
 
 
 
 
IMPACT
 TO VALUATION FROM


 
 
 
12/31/16

 
 
VALUATION
 TECHNIQUE(S)
 
 
UNOBSERVABLE
 INPUT(S)
 
 
RANGE
 AVERAGE
 
 
AN INCREASE
 IN INPUT1


 


Common Stocks
 
 
$241,862
 
 
Discounted
 Present Value
Balance Sheet Analysis
 
 
Liquidity
 Discount
 
 
30%-40%
 
 
Decrease


 




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






REPURCHASE
 AGREEMENTS:


The 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.

 


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”.

 


DISTRIBUTIONS:


The Fund pays quarterly distributions on the Fund’s Common Stock at the annual rate of 7% of the rolling average of the prior four calendar quarter-end NAVs of the Fund’s Common Stock, with the fourth quarter distribution being the greater of 1.75% of the rolling average or the distribution required by IRS regulations. Prior to November 15, 2012, distributions to Preferred Stockholders were accrued daily and paid quarterly. Distributions to Common Stockholders are recorded on ex-dividend date. Distributable capital gains and/or net investment income were first allocated to Preferred Stockholder distributions, with any excess allocable to Common Stockholders. If capital gains and/or net investment income were allocated to both Preferred and Common Stockholders, the tax character of such allocations was proportional. To the extent that distributions are not paid from long-term capital gains, net investment income or net short-term capital gains, they will represent a return of capital. Distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. Permanent book and tax differences relating to stockholder distributions will result in reclassifications within the capital accounts. Undistributed net investment income may include temporary book and tax basis differences, which will reverse in a subsequent period. Any taxable income or gain remaining undistributed at fiscal year end is distributed in the following year.


40 | 2016 Annual Report to Stockholders



Royce Micro-Cap Trust
Notes to Financial Statements (continued)



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. The Fund has adopted a deferred fee agreement that allows the Directors to defer the receipt of all or a portion of directors’ fees otherwise payable. The deferred fees are invested in certain Royce Funds until distributed in accordance with the agreement.


 


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 1,405,544 and 2,189,322 shares of Common Stock as reinvestment of distributions
 for the years ended December 31, 2016 and December 31, 2015, respectively.


 


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 $45,000,000. During
 the year ended December 31, 2016, the Fund borrowed an average daily balance of $45,000,000
 at a weighted average borrowing cost of 1.69%. The maximum amount outstanding during
 the year ended December 31, 2016 was $45,000,000. As of December 31, 2016, the aggregate
 value of rehypothecated securities was $39,021,909. During the year ended December
 31, 2016, the Fund earned $52,529 in fees from rehypothecated securities.


 


Investment
 Advisory Agreement:


As
 compensation for its services under the Investment Advisory Agreement, Royce receives
 a fee comprised of a Basic Fee (“Basic Fee”) and an adjustment to the
 Basic Fee based on the investment performance of the Fund in relation to the investment
 record of the Russell 2000.


2016 Annual Report to Stockholders | 41



Royce Micro-Cap Trust
Notes to Financial Statements (continued)



Investment
 Advisory Agreement (continued):


The Basic Fee is a monthly fee equal to 1/12 of 1% (1% on an annualized basis) of the average of the Fund’s month-end net assets applicable to Common Stockholders, plus the liquidation value of outstanding Preferred Stock through October 31, 2015, for the rolling 36-month period ending with such month (the “performance period”). The Basic Fee for each month is increased or decreased at the rate of 1/12 of .05% for each percentage point that the investment performance of the Fund exceeds, or is exceeded by, the percentage change in the investment record of the Russell 2000 for the performance period by more than two percentage points. The performance period for each such month is a rolling 36-month period ending with such month. The maximum increase or decrease in the Basic Fee for any month may not exceed 1/12 of .5%. Accordingly, for each month, the maximum monthly fee rate as adjusted for performance is 1/12 of 1.5% and is payable if the investment performance of the Fund exceeds the percentage change in the investment record of the Russell 2000 by 12 or more percentage points for the performance period, and the minimum monthly fee rate as adjusted for performance is 1/12 of .5% and is payable if the percentage change in the investment record of the Russell 2000 exceeds the investment performance of the Fund by 12 or more percentage points for the performance period.


For the twelve rolling 36-month periods in 2016, the Fund’s investment performance ranged from 2% to 14% below the investment performance of the Russell 2000. Accordingly, the net investment advisory fee consisted of a Basic Fee of $3,761,473 and a net downward adjustment of $950,264 for the performance of the Fund relative to that of the Russell 2000. For the year ended December 31, 2016, the Fund expensed Royce investment advisory fees totaling $2,811,209.


 


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 $87,234,808
 and $125,680,183, 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)


 


$6,527,654
 
 
$1,716,500
 
 
$683,950


 






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


 


2016
 
 
2015
 
 
 
2016
 
 
2015


 


$5,291,974
 
 
$7,501,533
 
 
 
$18,332,912
 
 
$36,418,446


 


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



ORDINARY

 
 
CAPITAL
 GAINS OR
 
 
APPRECIATION

 
 
POST-OCTOBER
 LOSS
 
 
DISTRIBUTABLE



INCOME

 
 
(CAPITAL
 LOSS CARRYFORWARD)
 
 
(DEPRECIATION)
1
 
 
DEFERRALS
2
 
 
EARNINGS



 


$2,106,421
 
 
$981,595
 
 
$43,842,633
 
 
$(646,532)
 
 
$46,284,117


 




1
Includes timing
 differences on foreign currency, recognition of losses on securities sold, investments
 in publicly traded partnerships and Trusts, investments in Real Estate Investment
 Trusts 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.


     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 and
 Trusts, foreign currency transactions, investments in Real Estate Investment Trusts
 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


 


$62,740
 
 
$(62,740)
 
 
$–


 


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.
42 | 2016 Annual Report to Stockholders



Royce Micro-Cap Trust
Report of Independent Registered Public
 Accounting Firm
To the Board of Directors and the Stockholders
 of Royce Micro-Cap 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
 Micro-Cap 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
2016 Annual Report to Stockholders | 43



Royce Value Trust


 


Schedule
 of Investments




Common Stocks
 – 97.8%
 
 
 
 
 
 


 
 
SHARES
 
 
 
VALUE


 


 
 
 
 
 
 
 


CONSUMER
 DISCRETIONARY – 10.3%
 
 
 
 
 
 


AUTO COMPONENTS
 - 1.5%
 
 
 
 
 
 


Cooper
 Tire & Rubber
 
64,500
 
 
$
2,505,825


Gentex
 Corporation
 
290,470
 
 
 
5,719,354


LCI
 Industries
 
61,616
 
 
 
6,639,124


Motorcar
 Parts of America 1
 
27,100
 
 
 
729,532


Sebang
 Global Battery
 
28,500
 
 
 
882,095


Standard
 Motor Products
 
50,391
 
 
 
2,681,809


 
 
 
 
 
 


 
 
 
 
 
 
19,157,739



 
 
 
 
 
 


AUTOMOBILES
 - 0.8%
 
 
 
 
 
 



Thor Industries 2
 
106,410
 
 
 
10,646,320



 
 
 
 
 
 


DISTRIBUTORS
 - 1.1%
 
 
 
 
 
 



Core-Mark Holding Company
 
245,400
 
 
 
10,569,378


Fenix
 Parts 1
 
255,000
 
 
 
719,100


Weyco
 Group
 
97,992
 
 
 
3,067,150


 
 
 
 
 
 


 
 
 
 
 
 
14,355,628



 
 
 
 
 
 


DIVERSIFIED
 CONSUMER SERVICES - 0.6%
 
 
 
 
 
 


American
 Public Education 1
 
42,400
 
 
 
1,040,920


Collectors
 Universe
 
50,000
 
 
 
1,061,500


DeVry
 Education Group
 
52,054
 
 
 
1,624,085


H&R Block
 
8,000
 
 
 
183,920


Liberty
 Tax Cl. A
 
141,573
 
 
 
1,897,078


Lincoln
 Educational Services 1
 
430,600
 
 
 
826,752


Universal
 Technical Institute
 
504,032
 
 
 
1,466,733


 
 
 
 
 
 


 
 
 
 
 
 
8,100,988



 
 
 
 
 
 


HOTELS, RESTAURANTS
 & LEISURE - 0.3%
 
 
 
 
 
 


Century
 Casinos 1
 
222,360
 
 
 
1,830,023


Lindblad
 Expeditions Holdings 1
 
178,300
 
 
 
1,684,935


 
 
 
 
 
 


 
 
 
 
 
 
3,514,958



 
 
 
 
 
 


HOUSEHOLD
 DURABLES - 1.6%
 
 
 
 
 
 


Cavco
 Industries 1
 
14,700
 
 
 
1,467,795


Ethan
 Allen Interiors
 
231,000
 
 
 
8,512,350


Flexsteel
 Industries
 
12,400
 
 
 
764,708


Mohawk
 Industries 1, 2
 
22,400
 
 
 
4,472,832


Natuzzi
 ADR 1
 
2,096,300
 
 
 
4,737,638


Samson
 Holding
 
2,500,000
 
 
 
180,527


Stanley
 Furniture 3
 
912,235
 
 
 
821,194


 
 
 
 
 
 


 
 
 
 
 
 
20,957,044



 
 
 
 
 
 


LEISURE PRODUCTS
 - 0.7%
 
 
 
 
 
 


Nautilus
 1
 
488,700
 
 
 
9,040,950



 
 
 
 
 
 


MEDIA - 0.5%
 
 
 
 
 
 


E.W.
 Scripps Company Cl. A 1
 
67,660
 
 
 
1,307,868


Global
 Eagle Entertainment 1
 
7,700
 
 
 
49,742


New
 Media Investment Group
 
60,100
 
 
 
960,999


Pico
 Far East Holdings
 
3,484,400
 
 
 
1,068,233


T4F
 Entretenimento
 
200,000
 
 
 
343,995


Technicolor
 
120,000
 
 
 
649,107


Wiley
 (John) & Sons Cl. A
 
46,500
 
 
 
2,534,250


 
 
 
 
 
 


 
 
 
 
 
 
6,914,194



 
 
 
 
 
 


MULTILINE
 RETAIL - 0.0%
 
 
 
 
 
 


New
 World Department Store China 1
 
1,447,500
 
 
 
186,343



 
 
 
 
 
 


SPECIALTY
 RETAIL - 1.9%
 
 
 
 
 
 


Barnes
 & Noble
 
26,000
 
 
 
289,900


Buckle
 (The) 2
 
122,415
 
 
 
2,791,062


Byggmax
 Group
 
70,000
 
 
 
483,381


Caleres
 
107,800
 
 
 
3,537,996


Container
 Store Group (The) 1
 
158,200
 
 
 
1,004,570


Destination
 Maternity
 
557,967
 
 
 
2,884,689


Genesco
 1
 
26,155
 
 
 
1,624,226


Haverty
 Furniture
 
23,700
 
 
 
561,690


I.T
 
827,000
 
 
 
328,545


Monro
 Muffler Brake
 
161,500
 
 
 
9,237,800


Oriental
 Watch Holdings
 
967,900
 
 
 
186,513


TravelCenters
 of America LLC 1
 
62,500
 
 
 
443,750


West
 Marine 1
 
131,100
 
 
 
1,372,617


 
 
 
 
 
 


 
 
 
 
 
 
24,746,739



 
 
 
 
 
 


TEXTILES,
 APPAREL & LUXURY GOODS - 1.3%
 
 
 
 
 
 


Crown
 Crafts
 
94,441
 
 
 
731,918


Culp
 
29,400
 
 
 
1,092,210


Deckers
 Outdoor 1
 
20,820
 
 
 
1,153,220


J.G.
 Boswell Company 4
 
3,940
 
 
 
2,411,280


Movado
 Group
 
74,061
 
 
 
2,129,254


Wolverine
 World Wide
 
360,200
 
 
 
7,906,390


YGM
 Trading
 
1,082,600
 
 
 
1,021,814


 
 
 
 
 
 


 
 
 
 
 
 
16,446,086



 


Total (Cost $114,690,819)

 
 
 
 
 
134,066,989



 


 
 
 
 
 
 
 


CONSUMER
 STAPLES – 2.2%
 
 
 
 
 
 


BEVERAGES
 - 0.2%
 
 
 
 
 
 


Compania
 Cervecerias Unidas ADR
 
134,000
 
 
 
2,811,320



 
 
 
 
 
 


FOOD PRODUCTS
 - 1.9%
 
 
 
 
 
 


Cal-Maine
 Foods
 
56,016
 
 
 
2,474,507


Farmer
 Bros. 1
 
52,300
 
 
 
1,919,410


Industrias
 Bachoco ADR
 
59,095
 
 
 
2,896,837


John
 B. Sanfilippo & Son
 
17,200
 
 
 
1,210,708


Sanderson
 Farms
 
15,400
 
 
 
1,451,296


Seneca
 Foods Cl. A 1
 
152,325
 
 
 
6,100,616


Seneca
 Foods Cl. B 1
 
13,840
 
 
 
581,280


SunOpta
 1
 
187,459
 
 
 
1,321,586


Tootsie
 Roll Industries 2
 
135,847
 
 
 
5,399,918


Waterloo
 Investment Holdings 1, 5
 
2,973,544
 
 
 
892,063


 
 
 
 
 
 


 
 
 
 
 
 
24,248,221



 
 
 
 
 
 


PERSONAL PRODUCTS
 - 0.1%
 
 
 
 
 
 


Inter
 Parfums
 
43,530
 
 
 
1,425,608



 


Total (Cost $21,361,098)

 
 
 
 
 
28,485,149



 


 
 
 
 
 
 
 


ENERGY
– 5.2%
 
 
 
 
 
 


ENERGY EQUIPMENT
 & SERVICES - 4.3%
 
 
 
 
 
 


CARBO
 Ceramics 1, 2
 
48,000
 
 
 
502,080


Diamond
 Offshore Drilling 1
 
189,000
 
 
 
3,345,300


Era
 Group 1
 
559,771
 
 
 
9,499,314


Forum
 Energy Technologies 1
 
129,654
 
 
 
2,852,388


Frank’s International
 
108,600
 
 
 
1,336,866


Helmerich
 & Payne
 
99,930
 
 
 
7,734,582


ION
 Geophysical 1
 
71,880
 
 
 
431,280


Oil
 States International 1
 
46,833
 
 
 
1,826,487


Pason
 Systems
 
532,180
 
 
 
7,784,616



SEACOR Holdings 1
 
150,469
 
 
 
10,725,430


TGS-NOPEC
 Geophysical
 
309,170
 
 
 
6,856,643


Trican
 Well Service 1
 
897,300
 
 
 
3,074,204


 
 
 
 
 
 


 
 
 
 
 
 
55,969,190



 
 
 
 
 
 


OIL, GAS
& CONSUMABLE FUELS - 0.9%
 
 
 
 
 
 


Dorchester
 Minerals L.P.
 
177,172
 
 
 
3,109,369


Dorian
 LPG 1
 
184,034
 
 
 
1,510,919


Hargreaves
 Services
 
57,683
 
 
 
193,339


San
 Juan Basin Royalty Trust
 
320,352
 
 
 
2,120,730


World
 Fuel Services
 
66,600
 
 
 
3,057,606






44 | 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


 


 
 
 
 
 
 
 


ENERGY
 (continued)
 
 
 
 
 
 


OIL, GAS
& CONSUMABLE FUELS (continued)
 
 
 
 
 
 


WPX
 Energy 1
 
110,000
 
 
$
1,602,700


 
 
 
 
 
 


 
 
 
 
 
 
11,594,663



 


Total (Cost $66,444,110)

 
 
 
 
 
67,563,853



 


 
 
 
 
 
 
 


FINANCIALS
– 14.9%
 
 
 
 
 
 


BANKS - 2.3%
 
 
 
 
 
 


Bank
 of N.T. Butterfield & Son
 
178,416
 
 
 
5,609,399


Blue
 Hills Bancorp
 
82,680
 
 
 
1,550,250


Canadian
 Western Bank
 
279,500
 
 
 
6,315,890


Farmers
 & Merchants Bank of Long Beach 4
 
1,080
 
 
 
7,344,000


Fauquier
 Bankshares
 
160,800
 
 
 
2,596,920


First
 Citizens BancShares Cl. A
 
17,026
 
 
 
6,044,230


 
 
 
 
 
 


 
 
 
 
 
 
29,460,689



 
 
 
 
 
 


CAPITAL MARKETS
 - 7.9%
 
 
 
 
 
 


Ares
 Management L.P.
 
375,900
 
 
 
7,217,280


Artisan
 Partners Asset Management Cl. A
 
246,600
 
 
 
7,336,350


ASA
 Gold and Precious Metals
 
199,821
 
 
 
2,206,024


Ashmore
 Group
 
1,354,000
 
 
 
4,724,550


Associated
 Capital Group Cl. A
 
20,200
 
 
 
663,570


Citadel
 Capital 1
 
8,549,921
 
 
 
476,306


Cowen
 Group 1
 
62,706
 
 
 
971,943


Dundee
 Corporation Cl. A 1
 
1,079,900
 
 
 
4,785,614


Edmond
 de Rothschild (Suisse)
 
153
 
 
 
2,102,675


Federated
 Investors Cl. B
 
162,840
 
 
 
4,605,115


Jupiter
 Fund Management
 
230,000
 
 
 
1,253,319


KKR
 & Co. L.P.
 
24,100
 
 
 
370,899


Lazard
 Cl. A
 
117,335
 
 
 
4,821,295


Manning
 & Napier Cl. A
 
395,692
 
 
 
2,987,475



MarketAxess Holdings
 
70,800
 
 
 
10,401,936


Medley
 Management Cl. A
 
109,500
 
 
 
1,084,050


Morningstar
 
84,600
 
 
 
6,223,176


mutares
 
39,266
 
 
 
471,775


MVC
 Capital
 
324,200
 
 
 
2,781,636


Oaktree
 Capital Group LLC Cl. A
 
101,100
 
 
 
3,791,250


Rothschild
 & Co
 
216,893
 
 
 
5,865,566


SEI
 Investments
 
185,600
 
 
 
9,161,216


Sprott
 
1,590,000
 
 
 
2,972,405


TMX
 Group
 
46,600
 
 
 
2,482,279


U.S.
 Global Investors Cl. A
 
520,551
 
 
 
707,949


Value
 Partners Group
 
5,453,000
 
 
 
4,337,809


Virtus
 Investment Partners
 
32,330
 
 
 
3,816,557


Westwood
 Holdings Group
 
49,073
 
 
 
2,943,889


ZAIS
 Group Holdings Cl. A 1, 2
 
492,300
 
 
 
723,681


 
 
 
 
 
 


 
 
 
 
 
 
102,287,589



 
 
 
 
 
 


CONSUMER FINANCE
 - 0.1%
 
 
 
 
 
 


Bajaj
 Finance
 
55,000
 
 
 
683,431



 
 
 
 
 
 


DIVERSIFIED
 FINANCIAL SERVICES - 0.5%
 
 
 
 
 
 


First
 Pacific
 
1,020,000
 
 
 
712,419


PICO
 Holdings 1
 
409,400
 
 
 
6,202,410


 
 
 
 
 
 


 
 
 
 
 
 
6,914,829


 
 
 
 
 
 


INSURANCE
 - 2.7%
 
 
 
 
 
 


Alleghany
 Corporation 1
 
2,109
 
 
 
1,282,525


Atlas
 Financial Holdings 1
 
30,000
 
 
 
541,500


eHealth
 1
 
65,000
 
 
 
692,250



E-L Financial
 
21,500
 
 
 
11,689,569


Erie
 Indemnity Cl. A
 
25,000
 
 
 
2,811,250


Independence
 Holding Company
 
314,523
 
 
 
6,148,925



MBIA 1
 
942,400
 
 
 
10,083,680


ProAssurance
 Corporation
 
17,139
 
 
 
963,212


WMIH
 1
 
77,742
 
 
 
120,500


 
 
 
 
 
 


 
 
 
 
 
 
34,333,411



 
 
 
 
 
 


INVESTMENT
 COMPANIES - 0.2%
 
 
 
 
 
 


RIT
 Capital Partners
 
130,500
 
 
 
3,025,860



 
 
 
 
 
 


THRIFTS &
 MORTGAGE FINANCE - 1.2%
 
 
 
 
 
 


Genworth
 MI Canada
 
258,195
 
 
 
6,472,903


Timberland
 Bancorp 3
 
444,200
 
 
 
9,177,172


Vestin
 Realty Mortgage II 1
 
53,557
 
 
 
125,324


 
 
 
 
 
 


 
 
 
 
 
 
15,775,399



 


Total (Cost $174,396,958)

 
 
 
 
 
192,481,208



 


 
 
 
 
 
 
 


HEALTH
 CARE – 4.2%
 
 
 
 
 
 


BIOTECHNOLOGY
 - 0.7%
 
 
 
 
 
 


ARIAD
 Pharmaceuticals 1, 2
 
29,700
 
 
 
369,468


Keryx
 Biopharmaceuticals 1
 
139,000
 
 
 
814,540


Sangamo
 BioSciences 1
 
469,315
 
 
 
1,431,411


Zealand
 Pharma 1
 
464,707
 
 
 
6,996,930


 
 
 
 
 
 


 
 
 
 
 
 
9,612,349



 
 
 
 
 
 


HEALTH CARE
 EQUIPMENT & SUPPLIES - 1.3%
 
 
 
 
 
 


Analogic
 Corporation
 
53,735
 
 
 
4,457,318


Atrion
 Corporation 2,6
 
15,750
 
 
 
7,988,400


Cerus
 Corporation 1
 
108,000
 
 
 
469,800


Invacare
 Corporation
 
38,900
 
 
 
507,645


Masimo
 Corporation 1
 
50,000
 
 
 
3,370,000


Neogen
 Corporation 1
 
6,800
 
 
 
448,800


 
 
 
 
 
 


 
 
 
 
 
 
17,241,963



 
 
 
 
 
 


HEALTH CARE
 PROVIDERS & SERVICES - 0.7%
 
 
 
 
 
 


Aceto
 Corporation
 
76,655
 
 
 
1,684,111


AMN
 Healthcare Services 1
 
15,900
 
 
 
611,355


Community
 Health Systems 1
 
790,000
 
 
 
4,416,100


Landauer
 
50,000
 
 
 
2,405,000


 
 
 
 
 
 


 
 
 
 
 
 
9,116,566



 
 
 
 
 
 


HEALTH CARE
 TECHNOLOGY - 0.2%
 
 
 
 
 
 


Cegedim
 1
 
10,000
 
 
 
276,057


Medidata
 Solutions 1
 
40,000
 
 
 
1,986,800


 
 
 
 
 
 


 
 
 
 
 
 
2,262,857



 
 
 
 
 
 


LIFE SCIENCES
 TOOLS & SERVICES - 1.2%
 
 
 
 
 
 


Bio-Rad
 Laboratories Cl. A 1
 
33,498
 
 
 
6,106,015


Bio-Techne
 
50,343
 
 
 
5,176,771


PAREXEL
 International 1
 
56,600
 
 
 
3,719,752


 
 
 
 
 
 


 
 
 
 
 
 
15,002,538



 
 
 
 
 
 


PHARMACEUTICALS
 - 0.1%
 
 
 
 
 
 


Theravance
 Biopharma 1
 
37,291
 
 
 
1,188,837



 


Total (Cost $38,859,309)

 
 
 
 
 
54,425,110



 


 
 
 
 
 
 
 


INDUSTRIALS
– 29.2%
 
 
 
 
 
 


AEROSPACE
 & DEFENSE - 2.7%
 
 
 
 
 
 


†Austal
 
 688,670
 
 
 
863,930


Ducommun
 1
 
117,200
 
 
 
2,995,632



HEICO Corporation
 
140,338
 
 
 
10,827,077



HEICO Corporation Cl. A
 
80,808
 
 
 
5,486,863


Magellan
 Aerospace
 
182,779
 
 
 
2,447,672


Mercury
 Systems 1
 
25,400
 
 
 
767,588


Teledyne
 Technologies 1
 
20,600
 
 
 
2,533,800


Wesco
 Aircraft Holdings 1
 
588,000
 
 
 
8,790,600


 
 
 
 
 
 


 
 
 
 
 
 
34,713,162



 
 
 
 
 
 






THE ACCOMPANYING
 NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
 
2016 Annual
 Report to Stockholders | 45





Royce Value Trust


 


Schedule
 of Investments (continued)




 
 
SHARES
 
 
 
VALUE


 


 
 
 
 
 
 
 


INDUSTRIALS
 (continued)
 
 
 
 
 
 


AIR FREIGHT
 & LOGISTICS - 1.8%
 
 
 
 
 
 


Expeditors
 International of Washington
 
158,900
 
 
$
8,415,344


Forward
 Air
 
179,750
 
 
 
8,516,555


Hub
 Group Cl. A 1, 2, 6
 
149,400
 
 
 
6,536,250


 
 
 
 
 
 


 
 
 
 
 
 
23,468,149



 
 
 
 
 
 


BUILDING PRODUCTS
 - 0.5%
 
 
 
 
 
 


Apogee
 Enterprises
 
68,900
 
 
 
3,690,284


Burnham
 Holdings Cl. B 4
 
36,000
 
 
 
567,000


Insteel
 Industries
 
55,780
 
 
 
1,987,999


Patrick
 Industries 1
 
9,850
 
 
 
751,555


 
 
 
 
 
 


 
 
 
 
 
 
6,996,838



 
 
 
 
 
 


COMMERCIAL
 SERVICES & SUPPLIES - 2.4%
 
 
 
 
 
 


Atento
 1
 
234,500
 
 
 
1,782,200


CECO
 Environmental
 
99,028
 
 
 
1,381,440


CompX
 International Cl. A
 
211,100
 
 
 
3,398,710



Copart 1
 
219,960
 
 
 
12,187,984


Heritage-Crystal
 Clean 1
 
152,527
 
 
 
2,394,674


Kimball
 International Cl. B
 
286,180
 
 
 
5,025,321


Ritchie
 Bros. Auctioneers
 
17,510
 
 
 
595,340


Steelcase
 Cl. A
 
219,560
 
 
 
3,930,124


UniFirst
 Corporation
 
6,470
 
 
 
929,415


 
 
 
 
 
 


 
 
 
 
 
 
31,625,208



 
 
 
 
 
 


CONSTRUCTION
 & ENGINEERING - 3.5%
 
 
 
 
 
 


EMCOR
 Group 2, 6
 
121,300
 
 
 
8,583,188



IES Holdings 1
 
539,482
 
 
 
10,331,080


Jacobs
 Engineering Group 1
 
164,900
 
 
 
9,399,300


KBR
 
325,300
 
 
 
5,429,257


Northwest
 Pipe 1
 
20,000
 
 
 
344,400


NV5
 Global 1
 
23,500
 
 
 
784,900


Sterling
 Construction 1
 
122,300
 
 
 
1,034,658


Valmont
 Industries 2
 
62,845
 
 
 
8,854,861


 
 
 
 
 
 


 
 
 
 
 
 
44,761,644



 
 
 
 
 
 


ELECTRICAL
 EQUIPMENT - 0.9%
 
 
 
 
 
 


Global
 Power Equipment Group 1, 4
 
631,820
 
 
 
2,988,508


Powell
 Industries
 
94,500
 
 
 
3,685,500


Preformed
 Line Products
 
91,600
 
 
 
5,323,792


 
 
 
 
 
 


 
 
 
 
 
 
11,997,800



 
 
 
 
 
 


INDUSTRIAL
 CONGLOMERATES - 0.5%
 
 
 
 
 
 


A.
 Soriano
 
2,791,000
 
 
 
336,770


Raven
 Industries
 
251,725
 
 
 
6,343,470


 
 
 
 
 
 


 
 
 
 
 
 
6,680,240



 
 
 
 
 
 


MACHINERY
 - 10.6%
 
 
 
 
 
 


Chen
 Hsong Holdings
 
1,159,000
 
 
 
289,620


China
 Metal International Holdings
 
554,524
 
 
 
174,797


CIRCOR
 International
 
85,384
 
 
 
5,539,714


CLARCOR
 
74,000
 
 
 
6,102,780


Colfax
 Corporation 1
 
77,242
 
 
 
2,775,305


Columbus
 McKinnon
 
20,975
 
 
 
567,164


Deutz
 
115,000
 
 
 
646,157


Donaldson
 Company
 
193,559
 
 
 
8,144,963


Exco
 Technologies
 
216,600
 
 
 
1,739,059


Federal
 Signal
 
56,280
 
 
 
878,531


Franklin
 Electric
 
104,600
 
 
 
4,068,940


Graco
 
89,276
 
 
 
7,417,943


Greenbrier
 Companies (The)
 
47,800
 
 
 
1,986,090


Hurco
 Companies
 
25,952
 
 
 
859,011


Hyster-Yale
 Materials Handling Cl. A
 
10,000
 
 
 
637,700


IDEX
 Corporation
 
67,400
 
 
 
6,070,044


John
 Bean Technologies
 
70,326
 
 
 
6,044,520


Kadant
 
42,200
 
 
 
2,582,640


Kennametal
 
160,100
 
 
 
5,004,726


Lincoln
 Electric Holdings
 
61,360
 
 
 
4,704,471


Lindsay
 Corporation 2
 
80,000
 
 
 
5,968,800


Luxfer
 Holdings ADR
 
28,100
 
 
 
306,009


Lydall
 1
 
30,580
 
 
 
1,891,373


NN
 
308,700
 
 
 
5,880,735


Nordson
 Corporation
 
24,296
 
 
 
2,722,367



RBC Bearings 1
 
125,000
 
 
 
11,601,250


Sarine
 Technologies
 
327,500
 
 
 
406,813



Sun Hydraulics
 
286,318
 
 
 
11,444,131


Tennant
 Company
 
111,900
 
 
 
7,967,280


Watts
 Water Technologies Cl. A
 
61,000
 
 
 
3,977,200


Westinghouse
 Air Brake Technologies
 
91,070
 
 
 
7,560,631


Westport
 Fuel Systems 1
 
327,100
 
 
 
369,623



Woodward
 
154,600
 
 
 
10,675,130


 
 
 
 
 
 


 
 
 
 
 
 
137,005,517



 
 
 
 
 
 


MARINE - 1.4%
 
 
 
 
 
 


Clarkson
 
291,000
 
 
 
7,792,316


Kirby
 Corporation 1
 
144,500
 
 
 
9,609,250


 
 
 
 
 
 


 
 
 
 
 
 
17,401,566



 
 
 
 
 
 


PROFESSIONAL
 SERVICES - 2.7%
 
 
 
 
 
 


Advisory
 Board (The) 1
 
190,277
 
 
 
6,326,710


Franklin
 Covey 1
 
40,800
 
 
 
822,120


Heidrick
 & Struggles International
 
66,480
 
 
 
1,605,492


ICF
 International 1
 
20,836
 
 
 
1,150,147



ManpowerGroup
 
112,858
 
 
 
10,029,691


On
 Assignment 1, 2, 6
 
179,295
 
 
 
7,917,667


Robert
 Half International
 
75,532
 
 
 
3,684,451


TrueBlue
 1
 
128,920
 
 
 
3,177,878


Volt
 Information Sciences 1
 
65,000
 
 
 
445,250


 
 
 
 
 
 


 
 
 
 
 
 
35,159,406



 
 
 
 
 
 


ROAD &
 RAIL - 1.7%
 
 
 
 
 
 


Genesee
 & Wyoming Cl. A 1
 
15,000
 
 
 
1,041,150


Knight
 Transportation
 
122,400
 
 
 
4,045,320



Landstar System
 
123,260
 
 
 
10,514,078


Patriot
 Transportation Holding 1
 
63,900
 
 
 
1,488,870


Saia
 1, 2
 
64,130
 
 
 
2,831,339


Trancom
 
4,932
 
 
 
241,015


Universal
 Logistics Holdings
 
78,916
 
 
 
1,290,277


 
 
 
 
 
 


 
 
 
 
 
 
21,452,049



 
 
 
 
 
 


TRADING COMPANIES
 & DISTRIBUTORS - 0.5%
 
 
 
 
 
 


Central
 Steel & Wire 4
 
4,862
 
 
 
2,138,064


Houston
 Wire & Cable
 
509,200
 
 
 
3,309,800


MSC
 Industrial Direct Cl. A 2
 
11,963
 
 
 
1,105,262


 
 
 
 
 
 


 
 
 
 
 
 
6,553,126



 
 
 
 
 
 


TRANSPORTATION
 INFRASTRUCTURE - 0.0%
 
 
 
 
 
 


Hopewell
 Highway Infrastructure
 
1,012,000
 
 
 
529,453



 


Total (Cost $224,439,887)

 
 
 
 
 
378,344,158



 


 
 
 
 
 
 
 


INFORMATION
 TECHNOLOGY – 16.8%
 
 
 
 
 
 


COMMUNICATIONS
 EQUIPMENT - 0.8%
 
 
 
 
 
 


ADTRAN
 2
 
234,973
 
 
 
5,251,647


Bel
 Fuse Cl. B
 
30,238
 
 
 
934,354


Clearfield
 1
 
55,600
 
 
 
1,150,920


NetScout
 Systems 1
 
58,500
 
 
 
1,842,750


Oclaro
 1
 
87,500
 
 
 
783,125


 
 
 
 
 
 


 
 
 
 
 
 
9,962,796



 
 
 
 
 
 






46 | 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


 


 
 
 
 
 
 
 


INFORMATION
 TECHNOLOGY (continued)
 
 
 
 
 
 


ELECTRONIC
 EQUIPMENT, INSTRUMENTS & COMPONENTS - 7.8%
 
 
 
 
 
 


Anixter
 International 1, 2, 6
 
70,895
 
 
$
5,746,040


Broadway
 Industrial Group 1
 
2,000,000
 
 
 
261,197



Cognex Corporation 2,6
 
210,970
 
 
 
13,421,911



Coherent 1
 
111,734
 
 
 
15,350,576


Dolby
 Laboratories Cl. A
 
21,250
 
 
 
960,287


FARO
 Technologies 1
 
157,067
 
 
 
5,654,412



FLIR Systems
 
317,000
 
 
 
11,472,230


HollySys
 Automation Technologies
 
53,882
 
 
 
987,118


Horiba
 
12,000
 
 
 
554,191


IPG
 Photonics 1, 2, 6
 
72,070
 
 
 
7,114,030


LRAD
 Corporation
 
776,544
 
 
 
1,327,890


Methode
 Electronics
 
54,030
 
 
 
2,234,141


National
 Instruments
 
261,850
 
 
 
8,070,217


Orbotech
 1
 
61,600
 
 
 
2,058,056


Perceptron
 1
 
357,700
 
 
 
2,375,128


Plexus
 Corporation 1
 
150,600
 
 
 
8,138,424


Richardson
 Electronics
 
573,732
 
 
 
3,614,512


Rogers
 Corporation 1
 
57,066
 
 
 
4,383,239


Systemax
 
58,520
 
 
 
513,220


TTM
 Technologies 1, 2
 
496,400
 
 
 
6,765,932


VST
 Holdings
 
979,000
 
 
 
342,190


 
 
 
 
 
 


 
 
 
 
 
 
101,344,941



 
 
 
 
 
 


INTERNET SOFTWARE
 & SERVICES - 2.1%
 
 
 
 
 
 


Actua
 Corporation 1
 
83,815
 
 
 
1,173,410


Care.com
 1
 
235,900
 
 
 
2,021,663


comScore
 1
 
227,236
 
 
 
7,176,113


HolidayCheck
 Group 1
 
44,900
 
 
 
110,924


IZEA
 1
 
70,106
 
 
 
316,178


j2
 Global
 
85,120
 
 
 
6,962,816


MiX
 Telematics ADR
 
2,641
 
 
 
16,348


QuinStreet
 1
 
526,082
 
 
 
1,978,068


RealNetworks
 1
 
224,670
 
 
 
1,091,896


Solium
 Capital 1
 
167,700
 
 
 
1,054,175


Spark
 Networks 1, 2
 
263,000
 
 
 
220,894


Stamps.com
 1
 
37,500
 
 
 
4,299,375


Support.com
 1
 
650,300
 
 
 
559,258


 
 
 
 
 
 


 
 
 
 
 
 
26,981,118



 
 
 
 
 
 


IT SERVICES
 - 1.1%
 
 
 
 
 
 


Acxiom
 Corporation 1
 
48,000
 
 
 
1,286,400


Convergys
 Corporation 2
 
121,000
 
 
 
2,971,760


DST
 Systems 2
 
10,000
 
 
 
1,071,500


Hackett
 Group (The)
 
417,266
 
 
 
7,368,918


Innodata
 1
 
274,314
 
 
 
672,069


MoneyGram
 International 1
 
59,400
 
 
 
701,514


Unisys
 Corporation 1
 
40,000
 
 
 
598,000


 
 
 
 
 
 


 
 
 
 
 
 
14,670,161



 
 
 
 
 
 


SEMICONDUCTORS
 & SEMICONDUCTOR EQUIPMENT - 2.7%
 
 
 
 
 
 


Amtech
 Systems 1
 
141,471
 
 
 
601,252


Brooks
 Automation
 
140,700
 
 
 
2,401,749


Cabot
 Microelectronics
 
15,300
 
 
 
966,501


CyberOptics
 Corporation 1
 
13,800
 
 
 
360,180


Daqo
 New Energy ADR 1
 
17,200
 
 
 
331,960


Diodes
 1
 
270,850
 
 
 
6,952,719


Exar
 Corporation 1
 
157,576
 
 
 
1,698,669


Intermolecular
 1
 
40,000
 
 
 
37,920


Kulicke
 & Soffa Industries 1
 
77,400
 
 
 
1,234,530


MKS
 Instruments
 
27,010
 
 
 
1,604,394


Nanometrics
 1
 
109,400
 
 
 
2,741,564


Nova
 Measuring Instruments 1
 
82,300
 
 
 
1,081,422


Photronics
 1
 
159,900
 
 
 
1,806,870


Sigma
 Designs 1
 
78,900
 
 
 
473,400


Silicon
 Motion Technology ADR
 
51,900
 
 
 
2,204,712


Teradyne
 
130,000
 
 
 
3,302,000


Tessera
 Holding Corporation
 
153,530
 
 
 
6,786,026


Ultra
 Clean Holdings 1
 
42,800
 
 
 
415,160


Veeco
 Instruments 1
 
17,500
 
 
 
510,125


 
 
 
 
 
 


 
 
 
 
 
 
35,511,153



 
 
 
 
 
 


SOFTWARE -
 1.6%
 
 
 
 
 
 


American
 Software Cl. A
 
108,690
 
 
 
1,122,768


ANSYS
 1, 2, 6
 
95,000
 
 
 
8,786,550


Computer
 Modelling Group
 
316,300
 
 
 
2,146,124


Mentor
 Graphics
 
89,523
 
 
 
3,302,503


Model
 N 1
 
300,387
 
 
 
2,658,425


Monotype
 Imaging Holdings
 
117,700
 
 
 
2,336,345


PSI
 
18,194
 
 
 
233,449


SeaChange
 International 1
 
247,069
 
 
 
568,259


 
 
 
 
 
 


 
 
 
 
 
 
21,154,423



 
 
 
 
 
 


TECHNOLOGY
 HARDWARE, STORAGE & PERIPHERALS - 0.7%
 
 
 
 
 
 


Diebold
 Nixdorf
 
266,600
 
 
 
6,704,990


Intevac
 1
 
214,500
 
 
 
1,833,975


 
 
 
 
 
 


 
 
 
 
 
 
8,538,965



 


Total (Cost $156,696,296)

 
 
 
 
 
218,163,557



 


 
 
 
 
 
 
 


MATERIALS
– 7.3%
 
 
 
 
 
 


CHEMICALS
 - 2.3%
 
 
 
 
 
 


Dyadic
 International 1, 4
 
75,000
 
 
 
123,000


FutureFuel
 Corporation
 
48,500
 
 
 
674,150


Hawkins
 
86,178
 
 
 
4,649,303


Innospec
 
36,883
 
 
 
2,526,486


Minerals
 Technologies
 
91,893
 
 
 
7,098,734



Quaker Chemical
 
109,669
 
 
 
14,031,052


 
 
 
 
 
 


 
 
 
 
 
 
29,102,725



 
 
 
 
 
 


CONSTRUCTION
 MATERIALS - 1.0%
 
 
 
 
 
 



Ash Grove Cement Cl. B 4
 
50,518
 
 
 
13,134,680



 
 
 
 
 
 


CONTAINERS
 & PACKAGING - 0.3%
 
 
 
 
 
 


Mayr-Melnhof
 Karton
 
34,000
 
 
 
3,603,744



 
 
 
 
 
 


METALS &
 MINING - 3.7%
 
 
 
 
 
 


Alamos
 Gold Cl. A
 
263,300
 
 
 
1,815,930


Ampco-Pittsburgh
 
36,966
 
 
 
619,180


Constellium
 Cl. A 1
 
90,000
 
 
 
531,000


Exeter
 Resource 1
 
240,000
 
 
 
179,736


†Ferroglobe (Warranty Insurance Trust) 1, 5
 
49,300
 
 
 
0


Franco-Nevada
 Corporation
 
127,300
 
 
 
7,607,448


Gold
 Fields ADR
 
370,000
 
 
 
1,113,700


Haynes
 International
 
113,900
 
 
 
4,896,561


Hecla
 Mining
 
321,300
 
 
 
1,683,612


Imdex
 1
 
350,000
 
 
 
144,988


Lundin
 Mining 1
 
640,000
 
 
 
3,050,683


Major
 Drilling Group International 1
 
739,243
 
 
 
3,865,107


Pretium
 Resources 1
 
165,000
 
 
 
1,366,551



Reliance Steel & Aluminum
 
139,940
 
 
 
11,130,828


Royal
 Gold
 
16,600
 
 
 
1,051,610


Synalloy
 Corporation 1
 
178,800
 
 
 
1,957,860


Worthington
 Industries
 
148,000
 
 
 
7,021,120


 
 
 
 
 
 


 
 
 
 
 
 
48,035,914



 
 
 
 
 
 






THE ACCOMPANYING
 NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
 
2016 Annual
 Report to Stockholders | 47







Royce Value
 Trust
 
December 31,
 2016






 


Schedule
 of Investments (continued)




 
 
SHARES
 
 
 
VALUE
 


 


 
 
 
 
 
 
 
 


MATERIALS
 (continued)
 
 
 
 
 
 
 


PAPER &
 FOREST PRODUCTS - 0.0%
 
 
 
 
 
 
 


TFS
 Corporation
 
453,967
 
 
$
543,587

 


 


Total (Cost $57,328,240)

 
 
 
 
 
94,420,650

 


 


 
 
 
 
 
 
 
 


REAL ESTATE
– 2.8%
 
 
 
 
 
 
 


REAL ESTATE
 MANAGEMENT & DEVELOPMENT - 2.8%
 
 
 
 
 
 
 


AV
 Homes 1
 
66,100
 
 
 
1,044,380
 


FirstService
 Corporation
 
135,100
 
 
 
6,414,548
 


Forestar
 Group 1
 
102,000
 
 
 
1,356,600
 


FRP
 Holdings 1
 
173,558
 
 
 
6,543,137
 


Kennedy-Wilson
 Holdings
 
101,300
 
 
 
2,076,650
 


Marcus
 & Millichap 1
 
246,113
 
 
 
6,576,139
 


St.
 Joe Company (The) 1
 
177,000
 
 
 
3,363,000
 


Tejon
 Ranch 1
 
360,035
 
 
 
9,155,690
 


 


Total (Cost $28,248,857)

 
 
 
 
 
36,530,144

 


 


 
 
 
 
 
 
 
 


TELECOMMUNICATION
 SERVICES– 0.5%
 
 
 
 
 
 
 


WIRELESS TELECOMMUNICATION
 SERVICES - 0.5%
 
 
 
 
 
 
 


Telephone
 and Data Systems
 
208,270
 
 
 
6,012,755

 


 


Total (Cost $5,433,816)

 
 
 
 
 
6,012,755

 


 

 


 
 
 
 
 
 
 
 


UTILITIES
– 0.1%
 
 
 
 
 
 
 


GAS UTILITIES
 - 0.1%
 
 
 
 
 
 
 


Shizuoka
 Gas
 
110,000
 
 
 
773,244
 


Toho
 Gas
 
60,000
 
 
 
487,291
 


 
 
 
 
 
 
 


 
 
 
 
 
 
1,260,535

 


 
 
 
 
 
 
 



MULTI-UTILITIES
 - 0.0%
 
 
 
 
 
 
 


Just
 Energy Group 2
 
18,520
 
 
 
101,119

 


 


Total (Cost $1,218,976)

 
 
 
 
 
1,361,654

 


 


 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 


MISCELLANEOUS
 7– 4.3%
 
 
 
 
 
 
 


 


Total (Cost $53,213,601)

 
 
 
 
 
56,034,275

 


 


 
 
 
 
 
 
 
 


TOTAL COMMON
 STOCKS
 
 
 
 
 
 
 


 


(Cost $942,331,967)

 
 
 
 
 
1,267,889,502

 


 


 


REPURCHASE
 AGREEMENT– 6.3%
 
 
 
 
 
 
 


Fixed Income Clearing Corporation, 0.03% dated 12/30/16, due 1/3/17, maturity value
$80,912,270 (collateralized by obligations of various U.S. Government Agencies, 2.50%-
3.375% due 8/15/23-5/15/44, valued at $82,531,094)


 


(Cost $80,912,000)

 
 
 
 
 
80,912,000

 


 


 
 
 
 
 
 
 
 


TOTAL INVESTMENTS
– 104.1%
 
 
 
 
 
 
 


 


(Cost $1,023,243,967)

 
 
 
 
 
1,348,801,502

 


 


 
 
 
 
 
 
 
 


LIABILITIES
 LESS CASH AND OTHER ASSETS – (4.1)%
 
 
 
 
 
(52,789,790
)


 
 
 
 
 
 
 


 
 
 
 
 
 
 
 


 


NET ASSETS
– 100.0%
 
 
 
 
$
1,296,011,712

 


 






 


†
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 $110,266,950.


 3
At December
 31, 2016, the Fund owned 5% or more of the Company’s outstanding voting securities
 thereby making the Company an Affiliated Company as that term is defined in the
 Investment Company Act of 1940. See Notes to Financial Statements.


 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
Securities
 for which market quotations are not readily available represent 0.1% 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.


 6
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 $64,652,459.


 7
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 $1,025,881,370.
 At December 31, 2016, net unrealized appreciation for all securities was $322,920,132
 consisting of aggregate gross unrealized appreciation of $405,405,905 and aggregate
 gross unrealized depreciation of $82,485,773. 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.


 






48 | 2016
 Annual Report to Stockholders
 
THE ACCOMPANYING
 NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS







Royce Value
 Trust
 
December 31,
 2016






 


Statement
 of Assets and Liabilities






ASSETS:
 
 
 
 


Investments
 at value
 
 
 
 


 


Non-Affiliated
 Companies
 
$
1,257,891,136
 


 


Affiliated
 Companies
 
 
9,998,366
 


 


Repurchase
 agreements (at cost and value)
 
 
80,912,000
 


 


Cash and foreign
 currency
 
 
65,248
 


 


Receivable
 for investments sold
 
 
18,100,968
 


 


Receivable
 for dividends and interest
 
 
1,351,828
 


 


Prepaid expenses
 and other assets
 
 
527,870
 


 


Total Assets

 
 
1,368,847,416

 


 


LIABILITIES:
 
 
 
 


Revolving
 credit agreement
 
 
70,000,000
 


 


Payable for
 investments purchased
 
 
1,973,762
 


 


Payable for
 investment advisory fee
 
 
489,564
 


 


Payable for
 directors’ fees
 
 
44,757
 


 


Payable for
 interest expense
 
 
11,363
 


 


Accrued expenses
 
 
242,350
 


 


Deferred capital
 gains tax
 
 
73,908
 


 


Total Liabilities

 
 
72,835,704

 


 


Net Assets

 
$
1,296,011,712

 


 


ANALYSIS OF
 NET ASSETS:
 
 
 
 


Paid-in capital
 - $0.001 par value per share; 81,791,924 shares outstanding (150,000,000 shares authorized)
 
$
962,812,872
 


 


Undistributed
 net investment income (loss)
 
 
(1,959,371
)


 


Accumulated
 net realized gain (loss) on investments and foreign currency
 
 
9,653,806
 


 


Net unrealized
 appreciation (depreciation) on investments and foreign currency
 
 
325,504,405
 


 


Net Assets
 (net asset value per share - $15.85)
 
$
1,296,011,712

 


 


Investments
 at identified cost
 
$
942,331,967
 


 






THE ACCOMPANYING
 NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
 
2016 Annual
 Report to Stockholders | 49





Royce Value Trust


 


Statement
 of Changes in Net Assets






 
 
YEAR ENDED 12/31/16
 
 
 
YEAR ENDED 12/31/15
 


 


 
 
 
 
 
 
 
 
 
 


INVESTMENT
 OPERATIONS:
 
 
 
 
 
 
 
 
 


Net investment
 income (loss)
 
$
9,680,260
 
 
 
$
9,193,108
 


 


Net realized
 gain (loss) on investments and foreign currency
 
 
75,719,009
 
 
 
 
43,117,817
 


 


Net change
 in unrealized appreciation (depreciation) on investments and foreign currency
 
 
186,502,762
 
 
 
 
(157,435,228
)


 


Net increase
 (decrease) in net assets from investment operations
 
 
271,902,031

 
 
 
 
(105,124,303
)


 


DISTRIBUTIONS:
 
 
 
 
 
 
 
 
 


Net investment
 income
 
 
(10,786,801
)
 
 
 
(12,151,910
)


 


Net realized
 gain on investments and foreign currency
 
 
(70,931,388
)
 
 
 
(83,306,926
)


 


Total distributions

 
 
(81,718,189
)
 
 
 
(95,458,836
)


 


CAPITAL STOCK
 TRANSACTIONS:
 
 
 
 
 
 
 
 
 


Reinvestment
 of distributions
 
 
33,793,124
 
 
 
 
40,663,247
 


 


Total capital
 stock transactions
 
 
33,793,124

 
 
 
 
40,663,247

 


 


Net Increase
 (Decrease) In Net Assets
 
 
223,976,966

 
 
 
 
(159,919,892
)


 


NET ASSETS:
 
 
 
 
 
 
 
 
 


 


Beginning
 of year
 
 
1,072,034,746

 
 
 
 
1,231,954,638

 


 


End of
 year (including undistributed net investment income (loss) of $(1,959,371) at 12/31/16
 and $(1,047,919) at 12/31/15)
 
$
1,296,011,712

 
 
 
$
1,072,034,746

 


 






50 | 2016
 Annual Report to Stockholders
 
THE ACCOMPANYING
 NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS







Royce Value
 Trust
 
Year Ended
 December 31, 2016






 


Statement
 of Operations






INVESTMENT
 INCOME:
 
 
 
 


 
 
 
 
 



INCOME:
 
 
 
 

								 
Dividends
 
 
 
 


 


Non-Affiliated
 Companies
 
$
16,827,595
 


 


Affiliated
 Companies
 
 
1,519,381
 


 


Foreign withholding
 tax
 
 
(433,390
)


 


Interest
 
 
50,925
 


 


Rehypothecation
 income
 
 
60,170
 


 


Total income

 
 
18,024,681

 


 


EXPENSES:
 
 
 
 


 


Investment
 advisory fees
 
 
5,849,115
 


 


Interest expense
 
 
1,205,769
 


 


Stockholder
 reports
 
 
404,144
 


 


Administrative
 and office facilities
 
 
276,617
 


 


Custody and
 transfer agent fees
 
 
194,234
 


 


Directors’ fees
 
 
171,715
 


 


Professional
 fees
 
 
95,084
 


 


Other expenses
 
 
147,845
 


 


Total expenses

 
 
8,344,523

 


 


Compensating
 balance credits
 
 
(102
)


 


Net expenses

 
 
8,344,421

 


 


Net investment
 income (loss)
 
 
9,680,260

 


 


REALIZED
 AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
 
 
 
 


NET REALIZED
 GAIN (LOSS):
 
 
 
 


 


Investments
 in Non-Affiliated Companies
 
 
75,894,203
 


 


Investments
 in Affiliated Companies
 
 
10,000
 


 


Foreign currency
 transactions
 
 
(185,194
)


 


NET CHANGE
 IN UNREALIZED APPRECIATION (DEPRECIATION):
 
 
 
 


 


Investments
 and foreign currency translations
 
 
186,470,163
 


 


Other assets
 and liabilities denominated in foreign currency
 
 
32,599
 


 


Net realized
 and unrealized gain (loss) on investments and foreign currency
 
 
262,221,771

 


 


NET INCREASE
 (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS
 
$
271,902,031

 


 






THE ACCOMPANYING
 NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
 
2016 Annual
 Report to Stockholders | 51







Royce 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
 
$
271,902,031
 


 


Adjustments
 to reconcile net increase (decrease) in net assets from investment operations to
 net cash provided by operating activities:
 
 
 
 


 


Purchases
 of long-term investments
 
 
(326,628,705
)


 


Proceeds
 from sales and maturities of long-term investments
 
 
434,894,498
 


 


Net
 purchases, sales and maturities of short-term investments
 
 
(70,185,000
)


 


Net
 (increase) decrease in dividends and interest receivable and other assets
 
 
(19,414
)


 


Net
 increase (decrease) in interest expense payable, accrued expenses and other liabilities
 
 
1,808
 


 


Net
 change in unrealized appreciation (depreciation) on investments
 
 
(186,470,163
)


 


Net
 realized gain (loss) on investments and foreign currency
 
 
(75,719,009
)


 


Net cash
 provided by operating activities
 
 
47,776,046

 


 


CASH FLOWS
 FROM FINANCING ACTIVITIES:
 
 
 
 


Net increase
 (decrease) in revolving credit agreement
 
 
–
 


 


Distributions
 
 
(81,718,189
)


 


Reinvestment
 of distributions
 
 
33,793,124
 


 


Net cash
 used for financing activities
 
 
(47,925,065
)


 


INCREASE
 (DECREASE) IN CASH:
 
 
(149,019
)


 


Cash and
 foreign currency at beginning of year
 
 
214,267

 


 


Cash and
 foreign currency at end of year
 
$
65,248

 


 






52 | 2016
 Annual Report to Stockholders
 
THE ACCOMPANYING
 NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS





Royce Value Trust


 


Financial
 Highlights


This table
 is presented to show selected data for a share of Common Stock outstanding throughout
 each period, and to assist stockholders in evaluating the Fund’s performance
 for the periods presented.






 
 

YEARS ENDED


 
 
 


 
 

12/31/16
 
 

12/31/15
 
 

12/31/14
 
 

12/31/13
 
 

12/31/12
 


 


Net Asset
 Value, Beginning of Period
 
$
13.56
 
 
$
16.24
 
 
$
18.17
 
 
$
15.40
 
 
$
14.18
 


 


INVESTMENT
 OPERATIONS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Net investment
 income (loss)
 
 
0.12
 
 
 
0.12
 
 
 
0.12
 
 
 
0.12
 
 
 
0.23
 


 


Net realized
 and unrealized gain (loss) on investments and foreign currency
 
 
3.27
 
 
 
(1.48
)
 
 
(0.13
)
 
 
4.89
 
 
 
2.02
 


 


Total investment
 operations
 
 
3.39
 
 
 
(1.36
)
 
 
(0.01
)
 
 
5.01
 
 
 
2.25
 


 


DISTRIBUTIONS
 TO PREFERRED STOCKHOLDERS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Net investment
 income
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
(0.04
)


 


Net realized
 gain on investments and foreign currency
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
(0.13
)


 


Total distributions
 to Preferred Stockholders
 
 
–

 
 
 
–

 
 
 
–

 
 
 
–

 
 
 
(0.17
)


 


Net Increase (Decrease) in Net Assets Applicable to Common Stockholders from Investment
 Operations
 
 
3.39
 
 
 
(1.36
)
 
 
(0.01
)
 
 
5.01
 
 
 
2.08
 


 


DISTRIBUTIONS
 TO COMMON STOCKHOLDERS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Net investment
 income
 
 
(0.13
)
 
 
(0.16
)
 
 
(0.14
)
 
 
(0.11
)
 
 
(0.17
)


 


Net realized
 gain on investments and foreign currency
 
 
(0.89
)
 
 
(1.08
)
 
 
(1.68
)
 
 
(2.08
)
 
 
(0.63
)


 


Total distributions
 to Common Stockholders
 
 
(1.02
)
 
 
(1.24
)
 
 
(1.82
)
 
 
(2.19
)
 
 
(0.80
)


 


CAPITAL STOCK
 TRANSACTIONS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Effect of
 reinvestment of distributions by Common Stockholders
 
 
(0.08
)
 
 
(0.08
)
 
 
(0.10
)
 
 
(0.05
)
 
 
(0.06
)


 


Total capital
 stock transactions
 
 
(0.08
)
 
 
(0.08
)
 
 
(0.10
)
 
 
(0.05
)
 
 
(0.06
)


 


Net Asset
 Value, End of Period
 
$
15.85
 
 
$
13.56
 
 
$
16.24
 
 
$
18.17
 
 
$
15.40
 


 


Market
 Value, End of Period
 
$
13.39
 
 
$
11.77
 
 
$
14.33
 
 
$
16.01
 
 
$
13.42
 


 


TOTAL RETURN:1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Net Asset
 Value
 
 
26.87
%
 
 
(8.09
)%
 
 
0.78
%
 
 
34.14
%
 
 
15.41
%


 


Market Value
 
 
23.48
%
 
 
(9.59
)%
 
 
0.93
%
 
 
35.63
%
 
 
16.22
%


 


RATIOS BASED
 ON AVERAGE NET ASSETS APPLICABLE TO 
COMMON STOCKHOLDERS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Investment
 advisory fee expense2
 
 
0.51
%
 
 
0.50
%
 
 
0.46
%
 
 
0.54
%
 
 
0.56
%


 


Other operating
 expenses
 
 
0.22
%
 
 
0.18
%
 
 
0.15
%
 
 
0.25
%
 
 
0.15
%


 


Total expenses
 (net)3
 
 
0.73
%
 
 
0.68
%
 
 
0.61
%
 
 
0.79
%
 
 
0.71
%


 


Expenses net
 of fee waivers and excluding interest expense
 
 
0.62
%
 
 
0.61
%
 
 
0.55
%
 
 
0.65
%
 
 
0.68
%


 


Expenses prior
 to fee waivers and balance credits
 
 
0.73
%
 
 
0.68
%
 
 
0.61
%
 
 
0.79
%
 
 
0.71
%


 


Expenses prior
 to fee waivers
 
 
0.73
%
 
 
0.68
%
 
 
0.61
%
 
 
0.79
%
 
 
0.71
%


 


Net investment
 income (loss)
 
 
0.85
%
 
 
0.78
%
 
 
0.72
%
 
 
0.70
%
 
 
1.57
%


 


SUPPLEMENTAL
 DATA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Net Assets
 Applicable to Common Stockholders, End of Period 
(in thousands)
 
$
1,296,012
 
 
$
1,072,035
 
 
$
1,231,955
 
 
$
1,307,829
 
 
$
1,082,426
 


 


Portfolio
 Turnover Rate
 
 
28
%
 
 
35
%
 
 
40
%
 
 
33
%
 
 
25
%


 


REVOLVING
 CREDIT AGREEMENT:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Asset coverage
 
 
1951
%
 
 
1631
%
 
 
1860
%
 
 
1289
%
 
 
822
%


 


Asset coverage
 per $1,000
 
$
19,514
 
 
$
16,315
 
 
$
18,599
 
 
$
12,889
 
 
$
8,216
 


 






1
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.


2
The investment
 advisory fee is calculated based on average net assets over a rolling 60-month basis,
 while the above ratios of investment advisory fee expenses are based on the average
 net assets applicable to Common Stockholders over a 12-month basis.


3
Expense ratio
 based on total average net assets including liquidation value of Preferred Stock
 was 0.60% for the year ended December 31, 2012.






THE ACCOMPANYING
 NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
 
2016 Annual
 Report to Stockholders | 53





Royce Value Trust
Notes to Financial Statements


Summary
 of Significant Accounting Policies:


Royce Value
 Trust, Inc. (the “Fund”), is a diversified closed-end investment company that was
 incorporated under the laws of the State of Maryland on July 1, 1986. The Fund commenced
 operations on November 26, 1986.


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. Level 2 securities with values based on quoted prices for similar securities are 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 sector classification, please refer to the Schedule of Investments.






 
 
LEVEL
 1
 
LEVEL
 2
 
LEVEL
 3
 
TOTAL



 


Common Stocks
 
$1,165,257,510
 
$101,739,929
 
$892,063
 
$1,267,889,502



 


Cash Equivalents
 
–
 
80,912,000
 
–
 
80,912,000



 


Certain securities
 have transferred in and out of Level 1 and Level 2 measurements during the reporting
 period. The Fund recognizes transfers between levels as of the end of the reporting
 period. For the year ended December 31, 2016, securities valued at $5,380,804 were
 transferred from Level 1 to Level 2 within the fair value hierarchy.
54 | 2016
 Annual Report to Stockholders



Royce Value Trust
Notes to Financial Statements (continued)

VALUATION OF INVESTMENTS (continued):
Level 3 Reconciliation:


 
 
 
 
 
 
REALIZED
 AND UNREALIZED
 
 


 
 
BALANCE
 AS OF 12/31/15
 
PURCHASES

 
GAIN
 (LOSS)1
 
BALANCE
 AS OF 12/31/16


 


Common Stocks
 
$167,629
 
$1,187,434
 
$(463,000)
 
$892,063


 




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.






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.


 


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”.


 


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.


 


DISTRIBUTIONS:


The Fund pays quarterly distributions on the Fund’s Common Stock at the annual rate of 7% of the rolling average of the prior four calendar quarter-end NAVs of the Fund’s Common Stock, with the fourth quarter distribution being the greater of 1.75% of the rolling average or the distribution required by IRS regulations. Prior to November 15, 2012, distributions to Preferred Stockholders were accrued daily and paid quarterly. Distributions to Common Stockholders are recorded on ex-dividend date. Distributable capital gains and/or net investment income were first allocated to Preferred Stockholder distributions, with any excess allocable to Common Stockholders. If capital gains and/or net investment income were allocated to both Preferred and Common Stockholders, the tax character of such allocations was proportional. To the extent that distributions are not paid from long-term capital gains, net investment income or net short-term capital gains, they will represent a return of capital. Distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. Permanent book and tax differences relating to stockholder distributions will result in reclassifications within the capital accounts. Undistributed net investment income may include temporary book and tax basis differences, which will reverse in a subsequent period. Any taxable income or gain remaining undistributed at fiscal year end is distributed in the following year.


 


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.


2016 Annual Report to Stockholders | 55



Royce Value Trust
Notes to Financial Statements (continued)



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. The Fund has adopted a deferred fee agreement that allows the Directors to defer the receipt of all or a portion of directors’ fees otherwise payable. The deferred fees are invested in certain Royce Funds until distributed in accordance with the agreement.


 


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
 2,740,162 and 3,183,214 shares of Common Stock as reinvestment of distributions
 for the years ended December 31, 2016 and December 31, 2015, respectively.


 


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 $70,000,000. During the year ended
 December 31, 2016, the Fund borrowed an average daily balance of $70,000,000 at a
 weighted average borrowing cost of 1.69%. The maximum amount outstanding during
 the year ended December 31, 2016 was $70,000,000. As of December 31, 2016, the aggregate
 value of rehypothecated securities was $64,652,459. During the year ended December
 31, 2016, the Fund earned $60,170 in fees from rehypothecated securities.


 


Investment
 Advisory Agreement:


As compensation
 for its services under the Investment Advisory Agreement, Royce receives a fee comprised
 of a Basic Fee (“Basic Fee”) and an adjustment to the Basic Fee based
 on the investment performance of the Fund in relation to the investment record of
 the S&P SmallCap 600 Index (“S&P 600”).


The Basic Fee is a monthly fee equal to 1/12 of 1% (1% on an annualized basis) of the average of the Fund’s month-end net assets applicable to Common Stockholders, plus the liquidation value of outstanding Preferred Stock, for the rolling 60-month period ending with such month (the “performance period“). The Basic Fee for each month is increased or decreased at the rate of 1/12 of .05% for each percentage point that the investment performance of the Fund exceeds, or is exceeded by, the percentage change in the investment record of the S&P 600 for the performance period by more than two percentage points. The performance period for each such month is a rolling 60-month period ending with such month. The maximum increase or decrease in the Basic Fee for any month may not exceed 1/12 of .5%. Accordingly, for each month, the maximum monthly fee rate as adjusted for performance is 1/12 of 1.5% and is payable if the investment performance of the Fund exceeds the percentage change in the investment record of the S&P 600 by 12 or more percentage points for the performance period, and the minimum monthly fee rate as adjusted for performance is 1/12 of .5% and is payable if the


56 | 2016 Annual Report to Stockholders



Royce Value Trust


Notes to
 Financial Statements (continued)


 


Investment
 Advisory Agreement (continued):


percentage
 change in the investment record of the S&P 600 exceeds the investment performance
 of the Fund by 12 or more percentage points for the performance period.


Notwithstanding the foregoing, Royce is not entitled to receive any fee for any month when the investment performance of the Fund for the rolling 36-month period ending with such month is negative. In the event that the Fund’s investment performance for such a performance period is less than zero, Royce will not be required to refund to the Fund any fee earned in respect of any prior performance period.


For the twelve rolling 60-month periods in 2016, the Fund’s investment performance ranged from 36% to 46% below the investment performance of the S&P 600. Accordingly, the net investment advisory fee consisted of a Basic Fee of $11,698,230 and a net downward adjustment of $5,849,115 for the performance of the Fund relative to that of the S&P 600. For the year ended December 31, 2016, the Fund expensed Royce investment advisory fees totaling $5,849,115.


 


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 $328,040,160 and $448,878,574, 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)


 


$56,862,131
 
$10,176,642
 
$(3,646,946)


 






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


 


2016
 
2015
 
2016
 
2015


 


$12,241,385
 
$16,352,099
 
$69,476,804
 
$79,106,737


 


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



ORDINARY

 
CAPITAL
 GAINS OR
 
APPRECIATION

 
POST-OCTOBER
 LOSS
 
DISTRIBUTABLE



INCOME
 
(CAPITAL LOSS CARRYFORWARD)
 
(DEPRECIATION)1
 
DEFERRALS2
 
EARNINGS


 


$3,266,059
 
$8,454,032
 
$322,867,003
 
$(1,388,254)
 
$333,198,840


 




1
Includes timing differences on foreign currency, recognition of losses on securities
 sold, investments in publicly traded partnerships and Trusts 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.


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 Real Estate Investment Trusts,
 publicly traded partnerships and Trusts, foreign currency transactions, foreign
 capital gains tax, dividend redesignations 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


 


$195,089
 
$(178,002)
 
$(17,087)


 


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 | 57



Royce Value Trust
Notes to Financial Statements (continued)



Transactions
 in Affiliated Companies:


An “Affiliated Company” as defined in the Investment Company Act of 1940, is a company in which a fund owns 5% or more of the company’s outstanding voting securities at any time during the period. The Fund effected the following transactions in shares of such companies for the year ended December 31, 2016:






 
 
SHARES

MARKET
 VALUE
COST
 OF
PROCEEDS

REALIZED

DIVIDEND

SHARES

MARKET
 VALUE

AFFILIATED
 COMPANY
 
12/31/15

12/31/15

PURCHASES

FROM
 SALES
GAIN
 (LOSS)
INCOME

12/31/16

12/31/16


 

Stanley Furniture
 
1,012,235
 
$2,824,136
 
–
 
$275,000
 
$10,000
 
$1,368,353
 
912,235
 
$   821,194
 


 

Timberland
 Bancorp
 
444,200
 
5,512,522
 
–
 
–
 
–
 
151,028
 
444,200
 
9,177,172
 

 

 
 
 
 
$8,336,658

 
 
 
 
 
$10,000

 
$1,519,381

 
 
 
$9,998,366

 

 

58 | 2016 Annual Report to
 Stockholders



Royce Value Trust
Report of Independent Registered Public
 Accounting Firm
To the Board of Directors and the Stockholders
 of Royce 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
 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
2016 Annual Report to Stockholders | 59



Directors and Officers
All Directors and Officers may be reached
 c/o The Royce Funds, 745 Fifth Avenue, New York, NY 10151
Charles M. Royce, Trustee1
Age: 77 |
 Number of Funds Overseen: 23 | Tenure: Since 1982
Non-Royce Directorships: Director
 of TICC Capital Corp.
Principal Occupation(s) During Past Five Years: Chairman of
 the Board of Managers of Royce & Associates (“Royce”), the Trust’s investment adviser; Chief Executive Officer (1972–June 2016), President
 (1972-July 2014) of Royce.
Christopher D. Clark, Trustee1, President

Age: 51 | Number of Funds Overseen: 23 | Tenure: Since 2014
Principal Occupation(s)
 During Past Five Years: Chief Executive Officer (since July 2016), President (since
 July 2014), Co-Chief Investment Officer (Since January 2014), Managing Director
 and, since June 2015, a Member of the Board of Managers of Royce, having been employed
 by Royce since May 2007.

Patricia W. Chadwick, Trustee
Age: 68
 | Number of Funds Overseen: 23 | Tenure: Since 2009
Non-Royce Directorships: Trustee
 of ING Mutual Funds and Director of Wisconsin Energy Corp.
Principal Occupation(s)
 During Past 5 Years: Consultant and President of Ravengate Partners LLC (since 2000).
Stephen L. Isaacs, Trustee
Age: 77 |
 Number of Funds Overseen: 23 | Tenure: Since 1989
Non-Royce Directorships: None

Principal Occupation(s) During Past Five Years: Attorney and President of Health
 Policy Associates, Inc., consultants. Mr. Isaacs’s prior business experience
 includes having served as President of the Center for Health and Social Policy (from
 1996 to 2012); Director of Columbia University Development Law and Policy Program
 and Professor at Columbia University (until August 1996).
Arthur S. Mehlman, Trustee
Age: 74 |
 Number of Funds Overseen: 43 | Tenure: Since 2004
Non-Royce Directorships: Director/Trustee
 of registered investment companies constituting the 18 Legg Mason Funds.
Principal
 Occupation(s) During Past Five Years: Director of The League for People with Disabilities,
 Inc.; Director of University of Maryland Foundation (non-profits). Formerly: Director
 of Municipal Mortgage & Equity, LLC (from October 2004 to April 1, 2011); Director
 of University of Maryland College Park Foundation (non-profit) (from 1998 to 2005);
 Partner, KPMG LLP (international accounting firm) (from 1972 to 2002); Director of
 Maryland Business Roundtable for Education (from July 1984 to June 2002).
David L. Meister, Trustee
Age: 77 | Number
 of Funds Overseen: 23 | Tenure: Since 1982
Non-Royce Directorships: None

Principal Occupation(s) During Past Five Years: Consultant. Chairman and Chief Executive
 Officer of The Tennis Channel (from June 2000 to March 2005). Mr. Meister’s
 prior business experience includes having served as Chief Executive Officer of Seniorlife.com,
 a consultant to the communications industry, President of Financial News Network,
 Senior Vice President of HBO, President of Time-Life Films, and Head of Broadcasting
 for Major League Baseball.
G. Peter O’Brien, Trustee
Age: 71
 | Number of Funds Overseen: 43 | Tenure: Since 2001
Non-Royce Directorships:
 Director/Trustee of registered investment companies constituting the 18 Legg Mason
 Funds; Director of TICC Capital Corp.
Principal Occupation(s) During Past Five
 Years: Trustee Emeritus of Colgate University (since 2005); Board Member of Hill
 House, Inc. (since 1999); Formerly: Trustee of Colgate University (from 1996 to
 2005), President of Hill House, Inc. (from 2001 to 2005) and Managing Director/Equity
 Capital Markets Group of Merrill Lynch & Co. (from 1971 to 1999).
Michael K. Shields, Trustee
Age: 58 |
 Number of Funds Overseen: 23 | Tenure: Since 2015
Principal Occupation(s) During
 Past Five Years: President and Chief Executive Officer of Piedmont Trust Company,
 a private North Carolina trust company (since May 2012). Mr. Shields’s prior
 business experience includes owning Shields Advisors, an investment consulting firm
 (from April 2010 to June 2012).

Francis D. Gannon, Vice President
Age:
 49 | Tenure: Since 2014
Principal Occupation(s) During Past Five Years: Co-Chief
 Investment Officer (since January 2014) and Managing Director of Royce, having been
 employed by Royce since September 2006.
Daniel A. O’Byrne, Vice President

Age: 54 | Tenure: Since 1994
Principal Occupation(s) During Past Five Years: Principal
 and Vice President of Royce, having been employed by Royce since October 1986.
Peter K. Hoglund, Treasurer
Age: 50 |
 Tenure: Since 2015
Principal Occupation(s) During Past Five Years: Chief Financial
 Officer, Chief Administrative Officer, and Managing Director of Royce, having been
 employed by Royce since December 2014. Prior to joining Royce, Mr. Hoglund spent
 more than 20 years with Munder Capital Management in Birmingham, MI, serving as
 Managing Director and Chief Financial Officer and overseeing all financial aspects
 of the firm. He began his career at Munder as a portfolio manager.
John E. Denneen, Secretary and Chief Legal
 Officer
Age: 49 | Tenure: 1996-2001 and Since 2002
Principal Occupation(s)
 During Past Five Years: General Counsel, Managing Director, and, since June 2015,
 a Member of the Board of Managers of Royce; Chief Legal and Compliance Officer and
 Secretary of Royce.
Lisa Curcio, Chief Compliance Officer

Age: 57 | Tenure: Since 2004
Principal Occupation(s) During Past Five Years: Chief
 Compliance Officer of The Royce Funds (since October 2004) and Compliance Officer
 of Royce (since June 2004).


1
 
Interested
 Director.


 
 
Director will
 hold office until their successors have been duly elected and qualified or until
 their earlier resignation or removal.


60 | 2016 Annual Report to Stockholders



Notes to Performance and Other Important
 Information
The thoughts expressed in this Review and
 Report concerning recent market movements and future prospects for small company
 stocks are solely the opinion of Royce at December 31, 2016, and, of course, historical
 market trends are not necessarily indicative of future market movements. Statements
 regarding the future prospects for particular securities held in the Funds’
 portfolios and Royce’s investment intentions with respect to those securities
 reflect Royce’s opinions as of December 31, 2016 and are subject to change at
 any time without notice. There can be no assurance that securities mentioned in
 this Review and Report will be included in any Royce-managed portfolio in the future.
 Investments in securities of micro-cap, small-cap and/or mid-cap companies may involve
 considerably more risk than investments in securities of larger-cap companies. All
 publicly released material information is always disclosed by the Funds on the website
 at www.roycefunds.com.
Sector weightings are determined using the
 Global Industry Classification Standard (“GICS”). GICS was developed by,
 and is the exclusive property of, Standard & Poor’s Financial Services
 LLC (“S&P”) and MSCI Inc. (“MSCI”). GICS is the trademark
 of S&P and MSCI. “Global Industry Classification Standard (GICS)”
 and “GICS Direct” are service marks of S&P and MSCI.
All indexes referred to are unmanaged and
 capitalization weighted. Each index’s returns include net reinvested dividends
 and/or interest income. Russell Investment Group is the source and owner of the
 trademarks, service marks, and copyrights related to the Russell Indexes. Russell®
 is a trademark of Russell Investment Group. The Russell 2000 Index is an index of
 domestic small-cap stocks. It measures the performance of the 2,000 smallest publicly
 traded U.S. companies in the Russell 3000 Index. The Russell 2000 Value and Growth
 Indexes consist of the respective value and growth stocks within the Russell 2000
 as determined by Russell Investments. The Russell Microcap Index includes 1,000
 of the smallest securities in the Russell 2000 Index along with the next smallest
 eligible securities as determined by Russell. The Russell 1000 Index is an index
 of domestic large-cap stocks. It measures the performance of the 1,000 largest publicly
 traded companies in the Russell 3000 Index. The Russell Midcap Index measures the
 performance of the mid-cap segment of the U.S. equity universe. It includes approximately
 800 of the smallest securities in the Russell 1000 Index. The Russell Global Small
 Cap Index is an unmanaged, capitalization-weighted index of global small-cap stocks.
 The Russell Global ex-U.S. Large Cap Index is an index of global large-cap stocks,
 excluding the United States. The Russell Global ex-U.S. Small Cap Index is an index
 of global small-cap stocks, excluding the United States. The S&P 500 and SmallCap
 600 are indexes of U.S. large- and small-cap stocks, respectively, selected by Standard
 & Poor’s based on market size, liquidity, and industry grouping, among
 other factors. The Nasdaq Composite is an index of the more than 3,000 common equities
 listed on the Nasdaq stock exchange. The performance of an index does not represent
 exactly any particular investment, as you cannot invest directly in an index. Returns
 for the market indexes used in this report were based on information supplied to
 Royce by Russell Investments.
The Price-Earnings, or P/E, Ratio is calculated
 by dividing a company’s share price by its trailing 12-month earnings-per share
 (EPS). The Price-to-Book, or P/B, Ratio is calculated by dividing a company’s
 share price by its book value per share. The Morningstar Style Map uses proprietary
 scores of a stock’s value and growth characteristics to determine its placement
 in one of the five categories listed on the horizontal axis. These characteristics
 are then compared to those of other stocks within the same market capitalization
 band. Each is scored from zero to 100 for both value and growth attributes. The
 value score is subtracted from the growth score to determine the overall style score.
 For the vertical, market cap axis, Morningstar subdivides into size groups. Giant-cap
 stocks are defined as those that account for the top 40% of the capitalization of
 each style zone; large-cap stocks represent the next 30%; mid-cap stocks the next
 20%; small-cap stocks the next 7%; micro-cap stocks the smallest 3%. The Royce Funds
 is a service mark of The Royce Funds. Distributor: Royce Fund Services, Inc.
Forward-Looking Statements
This material contains forward-looking statements
 within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange
 Act”), that involve risks and uncertainties, including, among others, statements
 as to:


•
the Funds’ future operating results


•
the prospects of the Funds’ portfolio companies


•
the impact of investments that the Funds have made or may make


•
the dependence of the Funds’ future success on the general economy and its impact on the companies and industries in which the Funds invest, and


•
the ability of the Funds’ portfolio companies to achieve their objectives.



This Review and Report uses words such as
 “anticipates,” “believes,” “expects,” “future,” “intends,” and similar expressions to identify forward-looking statements.
 Actual results may differ materially from those projected in the forward-looking
 statements for any reason.
The Royce Funds have based the forward-looking
 statements included in this Review and Report on information available to us on
 the date of the report, and we assume no obligation to update any such forward-looking
 statements. Although The Royce Funds undertake no obligation to revise or update
 any forward-looking statements, whether as a result of new information, future events
 or otherwise, you are advised to consult any additional disclosures that we may
 make through future stockholder communications or reports.
Authorized Share Transactions
Royce Global
 Value Trust, Royce Micro-Cap Trust, and Royce Value Trust may each repurchase up
 to 5% of the issued and outstanding shares of its respective common stock during
 the year ending December 31, 2017. Any such repurchases would take place at then
 prevailing prices in the open market or in other transactions. Common stock repurchases
 would be effected at a price per share that is less than the share’s then current
 net asset value.
Royce Global Value Trust, Royce Micro-Cap
 Trust, and Royce Value Trust are also authorized to offer their common stockholders
 an opportunity to subscribe for additional shares of their common stock through
 rights offerings at a price per share that may be less than the share’s then
 current net asset value. The timing and terms of any such offerings are within each
 Board’s discretion.
Annual Certifications
As required, the
 Funds have submitted to the New York Stock Exchange (“NYSE”) for the annual
 certification of the Funds’ Chief Executive Officer that he is not aware of
 any violation of the NYSE’s listing standards. The Funds also have included
 the certification of the Funds’ Chief Executive Officer and Chief Financial
 Officer required by section 302 of the Sarbanes-Oxley Act of 2002 as exhibits to
 the Funds’ form N-CSR for the period ended December 31, 2016, filed with the
 Securities and Exchange Commission.
Proxy Voting
A copy of the policies and
 procedures that The Royce Funds use to determine how to vote proxies relating to
 portfolio securities and information regarding how each of The Royce Funds voted
 proxies relating to portfolio securities during the most recent 12-month period
 ended June 30 is available, without charge, on The Royce Funds’ website at
 www. roycefunds.com, by calling (800) 221-4268 (toll-free) and on the website of
 the Securities and Exchange Commission (“SEC”), at www.sec.gov.
Form N-Q Filing
The Funds file their complete
 schedules of investments with the SEC for the first and third quarters of each fiscal
 year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website
 at www.sec.gov. The Royce Funds’ holdings are also on the Funds’ website
 approximately 15 to 20 days after each calendar quarter end and remain available
 until the next quarter’s holdings are posted. The Funds’ Forms N-Q may
 also be reviewed and copied at the SEC’s Public Reference Room in Washington,
 D.C. To find out more about this public service, call the SEC at (800) 732-0330.
 The Funds’ complete schedules of investments are updated quarterly, and are
 available at www.roycefunds.com.
2016 Annual Report to Stockholders | 61



Results of Stockholders Meetings
Royce Value Trust, Inc.
At the 2016 Annual Meeting of Stockholders
 held on September 19, 2016, the Fund’s stockholders elected three Directors,
 consisting of:



 
 
VOTES FOR
 
VOTES WITHHELD


 


Patricia W. Chadwick
 
65,092,387
 
1,661,512


 


Arthur S. Mehlman
 
65,433,776
 
1,320,123


 


Michael K. Shields
 
65,333,268
 
1,420,631


 



Royce Micro-Cap Trust, Inc.
At the 2016 Annual Meeting of Stockholders
 held on September 19, 2016, the Fund’s stockholders elected three Directors,
 consisting of


 
 
VOTES FOR
 
VOTES WITHHELD


 


Patricia W. Chadwick
 
31,664,949
 
618,088


 


Arthur S. Mehlman
 
31,852,719
 
430,318


 


Michael K. Shields
 
31,716,628
 
566,409


 



Royce Global Value Trust, Inc.
At the 2016 Annual Meeting of Stockholders
 held on September 19, 2016, the Fund’s stockholders elected three Directors,
 consisting of:


 
 
VOTES FOR
 
VOTES WITHHELD


 


Patricia W. Chadwick
 
8,891,002
 
230,341


 


Arthur S. Mehlman
 
8,891,058
 
230,284


 


Michael K. Shields
 
8,875,042
 
246,301


 


62 | 2016 Annual Report to Stockholders




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






 
 
 
 
 
 


 







 


 
 
 
 
 
 


 
 
 
 
 
 


 
 
 
 
 
 


 
About The Royce Funds
 
 
Contact Us
 


 
 
 
 
 
 


 
 
 
 
 
 


 
Unparalleled Knowledge + Experience
Pioneers in small-cap investing, with 40+ years
of experience, depth of knowledge, and focus.

Independent Thinking
The confidence to go against consensus, the insight
to uncover opportunities others might miss, and the
tenacity to stay the course through market cycles.
 
 
GENERAL INFORMATION
General Royce Funds information including an overview of our firm and Funds
(800) 221-4268
 


 
 
 
 
 
 


 
Specialized Approaches
Strategies that use value, core, or growth investment
approaches to select micro-cap, small-cap, and
mid-cap companies.


 
 
COMPUTERSHARE
Transfer Agent and Registrar
Speak with a representative about:
• Your account, transactions, and forms
(800) 426-5523
 


 
Unwavering Commitment
 
 
 
 


 
Our team of 16 portfolio managers have significant
personal investments in the strategies they manage.
 
 
FINANCIAL ADVISORS AND BROKER-DEALERS
Speak with your regional Royce contact regarding:
• Information about our firm, strategies, and Funds
• Fund Materials
(800) 337-6923
 


 


 
 
 
 
 
 


 
 
 
 
 
 


 
 
 
 
 
 


 

 
 




 
 
 
 
 
 


 
 
 
 
 
 












Item 2. Code(s) of Ethics. As of
 the end of the period covered by this report, the Registrant had adopted a code
 of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive
 officer, principal financial officer, principal accounting officer or controller,
 or persons performing similar functions. A copy of this code of ethics is filed
 as an exhibit to this Form N-CSR. No substantive amendments were approved or waivers
 were granted to this code of ethics during the period covered by this report.
Item 3. Audit Committee Financial Expert.



(a)(1)
 
The Board
 of Directors of the Registrant has determined that it has an audit committee financial
 expert.


 
 
 


(a)(2)
 
Arthur S.
 Mehlman and Patricia W. Chadwick were designated by the Board of Directors as the
 Registrant’s Audit Committee Financial Experts, effective April 15, 2004 and
 April 8, 2010, respectively. Mr. Mehlman and Ms. Chadwick are “independent” as defined under Item 3 of Form N-CSR.


Item 4. Principal Accountant Fees and
 Services.


(a)
 
Audit Fees:


 
 
Year ended
 December 31, 2016 - $43,935


 
 
Year ended
 December 31, 2016 - $43,500


 
 
 


(b)
 
Audit-Related
 Fees:


 
 
Year ended
 December 31, 2016 - $0


 
 
Year ended
 December 31, 2015 - $0


 
 
 


(c)
 
Tax Fees:


 
 
Year ended
 December 31, 2016 - $9,360 - Preparation of tax returns


 
 
Year ended
 December 31, 2015 - $7,200 - Preparation of tax returns


 
 
 


(d)
 
All Other
 Fees:


 
 
Year ended
 December 31, 2016 - $0


 
 
Year ended
 December 31, 2015 - $0


(e)(1)     Annual Pre-Approval: On an annual
 basis, the Registrant’s independent auditor submits to the Audit Committee
 a schedule of proposed audit, audit-related, tax and other non-audit services to
 be rendered to the Registrant and/or investment adviser(s) for the following year
 that require pre-approval by the Audit Committee. This schedule provides a description
 of each type of service that is expected to require pre-approval and the maximum
 fees that can be paid for each such service without further Audit Committee approval.
 The Audit Committee then reviews and determines whether to approve the types of
 scheduled services and the projected fees for them. Any subsequent revision to already
 pre-approved services or fees (including fee increases) are presented for consideration
 at the next regularly scheduled Audit Committee meeting, as needed.
If subsequent
 to the annual pre-approval of services and fees by the Audit Committee, the Registrant
 or one of its affiliates determines that it would like to engage the Registrant’s independent auditor to perform a service not already pre-approved, the request
 is to be submitted to the Registrant’s Chief Financial Officer, and if he or
 she determines that the service fits within the independence guidelines (e.g., it
 is not a prohibited service), he or she will then arrange for a discussion of the
 proposed service and fee to be included on the agenda for the next regularly scheduled
 Audit Committee meeting so that pre-approval can be considered.
Interim Pre-Approval:
 If, in the judgment of the Registrant’s Chief Financial Officer, a proposed
 engagement needs to commence before the next regularly scheduled Audit Committee
 meeting, he or she shall submit a written summary of the proposed engagement to
 all members of the Audit Committee, outlining the services, the estimated maximum
 cost, the category of the services (e.g., audit, audit-related, tax or other) and
 the rationale for engaging the Registrant’s independent auditor to perform
 the services. To the extent the proposed engagement involves audit, audit-related
 or tax services, any individual member of the Audit Committee who is an independent
 Board member is authorized to pre-approve the engagement. To the extent the proposed
 engagement involves non-audit services other than audit-related or tax, the Chairman
 of the Audit Committee is authorized to pre-approve the engagement. The Registrant’s Chief Financial Officer will arrange for this interim review and




coordinate with the appropriate member(s)
 of the Committee. The independent auditor may not commence the engagement under
 consideration until the Registrant’s Chief Financial Officer has informed the
 auditor in writing that pre-approval has been obtained from the Audit Committee
 or an individual member who is an independent Board member. The member of the Audit
 Committee who pre-approves any engagements in between regularly scheduled Audit
 Committee meetings is to report, for informational purposes only, any pre-approval
 decisions to the Audit Committee at its next regularly scheduled meeting.


(e)(2)
 
Not Applicable


 
 
 


(f)
 
Not Applicable


 
 
 


(g)
 
Year ended
 December 31, 2016 - $9,360


 
 
Year ended
 December 31, 2015 - $7,200


 
 
 


(h)
 
No such services
 were rendered during 2016 or 2015.


Item 5. Audit Committee of Listed Registrants.
The Registrant has a separately designated standing audit committee established
 in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. Patricia
 W. Chadwick, Richard M. Galkin, Stephen L. Isaacs, Arthur S. Mehlman, David L. Meister
 and G. Peter O’Brien are members of the Registrant’s audit committee.
Item 6. Investments.
(a) See Item
 1.

(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies
 and Procedures for Closed-End Management Investment Companies.
Royce & Associates, LP (“Royce”) has adopted written proxy voting policies and procedures (the “Proxy
 Voting Procedures”) for itself and client accounts for which Royce is responsible
 for voting proxies. Royce is generally granted proxy voting authority at the inception
 of its management of each client account. Proxy voting authority is generally either
 (i) specifically authorized in the applicable investment management agreement or
 other instrument; or (ii) where not specifically authorized, is granted to Royce
 where general investment discretion is given to Royce in the applicable investment
 management agreement. In voting proxies, Royce is guided by general fiduciary principles.
 Royce’s goal is to act prudently, solely in the best interest of the beneficial
 owners of the accounts it manages. Royce attempts to consider all factors of its
 vote that could affect the value of the investment and will vote proxies in the
 manner it believes will be consistent with efforts to enhance and/or protect stockholder
 value.
Royce’s personnel are responsible for
 monitoring receipt of all proxies and seeking to ensure that proxies are received
 for all securities for which Royce has proxy voting authority. Royce is not responsible
 for voting proxies it does not receive. Royce divides proxies into “regularly recurring”
 and “non-regularly recurring” matters. Examples of regularly recurring matters include
 non-contested elections of directors and non-contested approvals of independent
 auditors. Royce’s personnel are responsible for developing and maintaining
 a list of matters Royce treats as “regularly recurring” and for ensuring
 that instructions from a Royce Co-Chief Investment Officer are followed when voting
 those matters on behalf of Royce clients. Non-regularly recurring matters are all
 other proxy matters and are brought to the attention of the relevant portfolio manager(s)
 for the applicable account(s). After giving consideration to advisories provided
 by an independent third party research firm with respect to such non-regularly recurring
 matters, the portfolio manager(s) directs that such matters be voted in a way that
 he or she believes should better protect or enhance the value of the investment.
Certain Royce portfolio managers may provide
 instructions that they do not want regularly recurring matters to be voted in accordance
 with the standing instructions for their accounts and individual voting instructions
 on all matters, both regularly recurring and non-regularly recurring, will be obtained
 from such portfolio managers. Under certain circumstances, Royce may also vote against
 a proposal from the issuer’s board of directors or management. Royce’s
 portfolio managers decide these issues on a case-by-case basis. A portfolio manager
 of Royce




may, on occasion, decide to abstain from
 voting a proxy or a specific proxy item when such person concludes that the potential
 benefit of voting is outweighed by the cost or when it is not in the client’s
 best interest to vote.
There may be circumstances where Royce may
 not be able to vote proxies in a timely manner, including, but not limited to, (i)
 when certain securities are out on loan at the time of a record date; (ii) when
 administrative or operational constraints impede Royce’s ability to cast a
 timely vote, such as late receipt of proxy voting information; and/or (iii) when
 systems, administrative or processing errors occur (including errors by Royce or
 third party vendors).
To further Royce’s goal to vote proxies
 in the best interests of its client, Royce follows specific procedures outlined
 in the Proxy Voting Procedures to identify, assess and address material conflicts
 that may arise between Royce’s interests and those of its clients before voting
 proxies on behalf of such clients. In the event such a material conflict of interest
 is identified, the proxy will be voted by Royce in accordance with the recommendation
 given by an independent third party research firm.
You may obtain a copy of the Proxy Voting
 Procedures at www.roycefunds.com or by calling 212-508-4500. Additionally, you can
 obtain information on how your securities were voted by calling 212-508-4500.
Item 8. Portfolio Managers of Closed-End
 Management Investment Companies.
(a)(1) Portfolio Managers of Closed-End
 Management Investment Companies (information as of December 31, 2016)







Name


Title


Length of Service


Principal Occupation(s) During Past 5 Years


Charles M.
 Royce
Portfolio
 Manager and Member of the Board of Directors of the Registrant
Since 1986
Chairman of
 the Board of Managers of Royce & Associates, LP (“Royce”), Member
 of the boards of directors/trustees of the Registrant, Royce Micro-Cap Trust, Inc.
 (“RMT”), Royce Global Value Trust, Inc. ,The Royce Fund , and Royce Capital Fund
 (collectively, “The Royce Funds”).


Chris E. Flynn
Assistant
 Portfolio Manager*
Since April
 1, 2007
Assistant
 Portfolio Manager of the Registrant (since April 1, 2007); and Principal, Portfolio
 Manager and Senior Analyst at Royce (since 1993).


David A. Nadel
Assistant
 Portfolio Manager*
Since April
 1, 2007
Assistant
 Portfolio Manager of the Registrant (since April 1, 2007); Director of International
 Research at Royce (since 2010); Portfolio Manager and Senior Analyst at Royce( since
 2006); Senior Portfolio Manager at Neuberger Berman Inc. (2004-2006); and Senior
 Analyst at Pequot Capital Management, Inc. (2001-2003).


Lauren A.
 Romeo
Assistant
 Portfolio Manager*
Since May
 1, 2009
Assistant
 Portfolio of the Registrant (since May 1, 2009); Portfolio Manager and Analyst at
 Royce (since 2004); Portfolio Manager at Dalton, Grenier, Hartman & Maher (since
 2001); an Analyst with Legg Mason Funds Management (2000-2001); and an Analyst with
 T. Rowe Price Group (1996-2000).




 
* Assistant
 Portfolio Managers may have investment discretion over a portion of the Registrant’s portfolio subject to the supervision of Registrant’s Portfolio Manager.






(a)(2) Other Accounts Managed by Portfolio
 Manager and Potential Conflicts of Interest (information as of December 31, 2016)
Other Accounts







 Name of
 Portfolio
 Manager








Type of Account




 Number
 of
 Accounts
Managed






 Total
 Assets
Managed




 Number of
 Accounts
 Managed for which
 Advisory Fee is
Performance-Based


 Value
 of
 Managed
 Accounts for
 which
 Advisory Fee is
 Performance

Based



 Charles M.
 Royce
 
 
 
 
 


 
Registered
 investment companies
8
9,566,952,204
2
1,659,712,465


 
Private pooled
 investment vehicles
1
13,281,378
1
13,281,378


 
Other accounts*
12
50,618,847
-
-


 
 
 
 
 
 


 Chris E.
 Flynn
 
 
 
 
 


 
Registered
 investment companies
5
4,650,584,448
2
1,659,712,465


 
Private pooled
 investment vehicles
-
-
-
-


 
Other accounts*
-
-
-
-


 
 
 
 
 
 


 David A.
 Nadel
 
 
 
 
 


 
Registered
 investment companies
3
1,459,839,636
1
1,296,011,712


 
Private pooled
 investment vehicles
-
-
-
-


 
Other accounts*
-
-
-
-


 
 
 
 
 
 


 Lauren A.
 Romeo
 
 
 
 
 


 
Registered
 investment companies
3
6,095,999,143
1
1,296,011,712


 
Private pooled
 investment vehicles
2
507,901,029
-
-


 
Other accounts*
-
-
-
-




 
*Other accounts
 include all other accounts managed by the Portfolio Manager in either a professional
 or personal capacity except for personal accounts subject to pre-approval and reporting
 requirements under the Registrant’s Rule 17j-1 Code of Ethics.






Conflicts of Interest
The fact that
 a Portfolio Manager has day-to-day management responsibility for more than one client
 account may create actual, potential or only apparent conflicts of interest. For
 example, the Portfolio Manager may have an opportunity to purchase securities of
 limited availability. In this circumstance, the Portfolio Manager is expected to
 review each account’s investment guidelines, restrictions, tax considerations,
 cash balances, liquidity needs and other factors to determine the suitability of
 the investment for each account and to ensure that his or her managed accounts are
 treated equitably. The Portfolio Manager may also decide to purchase or sell the
 same security for multiple managed accounts at approximately the same time. To address
 any conflicts that this situation may create, the Portfolio Manager will generally
 combine managed account orders (i.e., enter a “bunched” order) in an effort to obtain
 best execution or a more favorable commission rate. In addition, if orders to buy
 or sell a security for multiple accounts managed by common Portfolio Managers on
 the same day are executed at different prices or commission rates, the transactions
 will generally be allocated by Royce to each of such managed accounts at the weighted
 average execution price and commission. In circumstances where a pre-allocated bunched
 order is not completely filled, each account will normally receive a pro-rated portion
 of the securities based upon the account’s level of participation in the order.
 Royce may under certain circumstances allocate securities in a manner other than
 pro-rata if it determines that the allocation is fair and equitable under the circumstances
 and does not discriminate against any account.
As described
 below, there is a revenue-based component of each Portfolio Manager’s Performance-Related
 Variable Compensation and the Portfolio Managers also receive Firm-Related Variable
 Compensation based on revenues (adjusted for certain imputed expenses) generated
 by Royce. In addition, Charles M. Royce receives variable compensation based on
 Royce’s retained pre-tax profits from operations. As a result, the Portfolio
 Managers may receive a greater relative benefit from activities that increase the
 value to Royce of The Royce Funds and/or other Royce client accounts, including,
 but not limited to, increases in sales of Registrant’s shares and assets under
 management.
Also, as described above, the Portfolio
 Managers generally manage more than one client account, including, among others,
 registered investment company accounts, separate accounts and private pooled accounts
 managed on behalf of institutions (e.g., pension funds, endowments and foundations)
 and for high-net-worth individuals. The appearance of a conflict of interest may
 arise where Royce has an incentive, such as a performance-based management fee (or
 any other variation in the level of fees payable by the Registrant or other Royce
 client accounts to Royce), which relates to the management of one or more of The
 Royce Funds or accounts with respect to which the same Portfolio Manager has day-to-day
 management responsibilities. Except as described below, no Royce Portfolio Manager’s compensation is tied to performance fees earned by Royce for the management
 of any one client account. Although variable and other compensation derived from
 Royce revenues or profits is impacted to some extent, the impact is relatively minor
 given the small percentage of Royce firm assets under management for which Royce
 receives performance-measured revenue. Notwithstanding the above, the Performance-Related
 Variable Compensation paid to Charles M. Royce as Portfolio Manager of two registered
 investment company accounts (the Registrant and RMT) is based, in part, on performance-based
 fee revenues. The Registrant and RMT pay Royce a fulcrum fee that is adjusted up
 or down depending on the performance of the Fund relative to its benchmark index.
Finally, conflicts of interest may arise
 when a Portfolio Manager personally buys, holds or sells securities held or to be
 purchased or sold for the Registrant or other Royce client account or personally
 buys, holds or sells the shares of one or more of The Royce Funds. To address this,
 Royce has adopted a written Code of Ethics designed to prevent and detect personal
 trading activities that may interfere or conflict with client interests (including
 Registrant’s stockholders’ interests). Royce generally does not permit
 its Portfolio Managers to purchase small- or micro-cap securities for their personal
 investment portfolios.
Royce and The Royce Funds have adopted certain
 compliance procedures which are designed to address the above-described types of
 conflicts. However, there is no guarantee that such procedures will detect each
 and every situation in which a conflict arises.




(a)(3) Description of Portfolio Manager
 Compensation Structure (information as of December 31, 2016)
Royce seeks
 to maintain a compensation program that is competitively positioned to attract and
 retain high-caliber investment professionals. All Portfolio Managers, receive from
 Royce a base salary, Portfolio-Related Variable Compensation (generally the largest
 element of each Portfolio Manager’s compensation with the exception of Charles
 M. Royce), Firm-Related Variable Compensation based primarily on registered investment
 company and other client account revenues generated by Royce and a benefits package.
 Portfolio Manager compensation is reviewed and may be modified from time to time
 as appropriate to reflect changes in the market, as well as to adjust the factors
 used to determine variable compensation. Except as described below, each Portfolio
 Manager’s compensation consists of the following elements:


-
 
BASE SALARY.
 Each Portfolio Manager is paid a base salary. In setting the base salary, Royce
 seeks to be competitive in light of the particular Portfolio Manager’s experience
 and responsibilities.


 
 
 


-
 
PORTFOLIO-RELATED
 VARIABLE COMPENSATION. Each Portfolio Manager receives quarterly Portfolio-Related
 Variable Compensation that is either asset-based, or revenue-based and therefore
 in part based on the value of the net assets of the account for which he or she
 is being compensated, determined with reference to each of the registered investment
 company and other client accounts they are managing. The revenue used to determine
 the quarterly Portfolio-Related Variable Compensation received by Charles M. Royce
 that relates to each of RMT and RVT is performance-based fee revenue.


Payment of
 the Portfolio-Related Variable Compensation may be deferred, and any amounts deferred
 are forfeitable, if the Portfolio Manager is terminated by Royce with or without
 cause or resigns. The amount of the deferred Portfolio-Related Variable Compensation
 will appreciate or depreciate during the deferral period, based on the total return
 performance of one or more Royce-managed registered investment company accounts
 selected by the Portfolio Manager at the beginning of the deferral period. The amount
 deferred will depend on the Portfolio Manager’s total direct, indirect beneficial
 and deferred unvested investments in the Royce registered investment company accounts
 for which he or she is receiving portfolio management compensation.


-
 
FIRM-RELATED
 VARIABLE COMPENSATION. Portfolio Managers receive quarterly variable compensation
 based on Royce’s net revenues.


 
 
 


-
 
BENEFIT PACKAGE.
 Portfolio Managers also receive benefits standard for all Royce employees, including
 health care and other insurance benefits, and participation in Royce’s 401(k)
 Plan and Money Purchase Pension Plan. From time to time, on a purely discretionary
 basis, Portfolio Managers may also receive options to acquire stock in Royce’s
 parent company, Legg Mason, Inc. Those options typically represent a relatively
 small portion of a Portfolio Manager’s overall compensation.


(a)(4) Dollar Range of Equity Securities
 in Registrant Beneficially Owned by Portfolio Manager (information as of December
 31, 2016)
The following
 table shows the dollar range of the Registrant’s shares owned beneficially
 and of record by the Portfolio Managers, including investments by his immediate
 family members sharing the same household and amounts invested through retirement
 and deferred compensation plans.


Portfolio
 Manager
Dollar
 Range of Registrant’s Shares Beneficially Owned


Charles M.
 Royce
Over$1,000,000


Chris E. Flynn
$100,001
 to$500,000


David A. Nadel
None


Lauren A.
 Romeo
$100,001
 to$500,000


(b) Not Applicable




Item 9. Purchases of Equity Securities
 by Closed-End Management Investment Company and Affiliated Purchasers. Not Applicable
Item 10. Submission of Matters to a Vote
 of Security Holders. Not Applicable.
Item 11. Controls and Procedures.
(a) Disclosure Controls and Procedures.
 The Principal Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on their evaluation
 of the Disclosure Controls and Procedures as of a date within 90 days of the filing
 date of this report.
(b) Internal Control over Financial Reporting.
 There were no significant changes in Registrant’s internal control over financial
 reporting or in other factors that could significantly affect this control subsequent
 to the date of the evaluation, including any corrective actions with regard to significant
 deficiencies and material weaknesses during the second fiscal quarter of the period
 covered by this report.
Item 12. Exhibits. Attached hereto.

(a)(1) The Registrant’s code of ethics pursuant to Item 2 of Form N-CSR.
(a)(2) Separate certifications by the Registrant’s Principal Executive Officer and Principal Financial Officer as required by
 Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not Applicable
(b) Separate certifications by the Registrant’s Principal Executive Officer and Principal Financial Officer, pursuant to
 Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under
 the Investment Company Act of 1940.
Pursuant to the requirements of the Securities
 Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has
 duly caused this report to be signed on its behalf by the undersigned, thereunto
 duly authorized.
ROYCE VALUE TRUST, INC.


BY:  /s/
 Christopher D. Clark


       Christopher
 D. Clark


       President



Date: March 3, 2017
Pursuant to the requirements of the Securities
 Exchange Act of 1934 and the Investment Company Act of 1940, this report has been
 signed below by the following persons on behalf of the registrant and in the capacities
 and on the dates indicated.


ROYCE VALUE
 TRUST, INC.
 
ROYCE VALUE
 TRUST, INC.


 
 
 


BY:  /s/
 Christopher D. Clark
 
BY:  /s/
 Peter K. Hoglund


       Christopher
 D. Clark
 
       Peter K.
 Hoglund


       President

 
       Treasurer



 
 
 


Date: March
 3, 2017
 
Date: March
 3, 2017