His firm now manages $11.8 billion, and almost all of it is invested in small-cap stocks.Warren Buffett aside, there aren't too many investors around today who got into the market before the advent of a major index like the S&P 500 way back in March, 1957.
"We were early in identifying this as a category for investing even before Russell showed up," he told Insider in a recent interview. Hishas an inception date of October 31, 1972, more than a decade before the small cap-focused Russell 2000 index was created. Royce's flagship fund has been on a roll lately, too. Over the 12 months that ended May 24, it returned 7.9% to investors, according to Morningstar. The Russell 2000 returned 1.7% over the same period. The fund has returned 12.6% annually for 50 years.Despite his deep roots in small-cap stocks, Royce didn't start out with a specific interest in smaller companies.
"We tend to focus on companies that have high return on invested capital, low leverage, strong balance sheets, and don't necessarily need access to capital," co-chief investment officer Francis Gannon added."They typically generate a lot of cash and put that cash back into the business and then get a good return on it.
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