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, Esq.     745 Fifth Avenue     New York, NY 10151
Registrant’s telephone number, including area code: (212) 508-4500 Date of fiscal year end: December 31, 2017 Date of reporting period: January 1, 2017 – June 30, 2017

Item 1. Reports to Shareholders.


                  JUNE 30, 2017                       2017 Semiannual     Review and Report to 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  
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 55 and 56. For additional information on the Funds’ Distribution Reinvestment and Cash Purchase Options and the benefits for stockholders, please see page 57 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.
 
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.
   

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

Table of Contents                       Semiannual Review               Letter to Our Stockholders   2           Performance   7           Semiannual Report to Stockholders             Royce Global Value Trust              

Manager’s Discussion of Fund Performance

  8          

Schedule of Investments

  10          

Other Financial Statements

  14           Royce Micro-Cap Trust            

Manager’s Discussion of Fund Performance

  22          

Schedule of Investments

  24          

Other Financial Statements

  29           Royce Value Trust            

Manager’s Discussion of Fund Performance

  38          

Schedule of Investments

  40          

Other Financial Statements

  46           History Since Inception   55           Distribution Reinvestment and Cash Purchase Options   57           Directors and Officers   58           Board Approval of Investment Advisory Agreements   59           Notes to Performance and Other Important Information   61  

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

Letter to Our Stockholders

SMALL-CAP’S LONG AND WINDING ROAD
A good start for small-caps in 2017 masked some
key reversals
In a solid first half for small-cap stocks, the Russell 2000 Index gained 5.0% for the year-to-date period ended June 30, 2017. This followed a terrific 2016, in which the small-cap index advanced 21.3%. From our perspective as small-cap specialists, however, the big news in small-cap last year was the occurrence of three key reversals: leadership for value, improved results for cyclicals, and higher overall returns for small-caps than for large-caps. Perhaps because we had been waiting for so long—and based on history, we endured an inordinately protracted wait for value to resume leadership over growth—we were convinced as we entered 2017 that these reversals would remain in place. Yet the first half saw leadership shifting yet again, as large-caps, growth, and non-cyclicals (especially healthcare) all took the lead after lagging, some significantly, in 2016. (In addition, non-U.S. equities surged, though this came after several years of underperformance). The result was a small-cap market with narrow leadership for growth through most of the first six months.
      Recent rotations in small-cap style leadership could be seen clearly in the one-year results for the period ended June 30, 2017. The two style indexes finished the 12-month period in remarkably similar places—the Russell 2000 Value Index climbed 24.9% versus a gain of 24.4% for the Russell 2000 Growth Index—though their respective paths were strikingly divergent.
      In the second half of 2016, the small-cap value index rose 24.2% versus 13.1% for growth, while in the first half of 2017, value rose only 0.5% compared to a 10.0% increase for its growth sibling—A Tale of Two Halves. Our interpretation of these actions is that the first half of 2017 marked a catch-up phase for last year’s laggards and a pause for 2016’s leaders.
    A Tale of Two Halves
1-Year Return Russell 2000 Value and Russell 2000 Growth

    Given leadership for growth and non-cyclicals in a period of lackluster economic growth, some market commentators have compared the first half of 2017 to 2015, a year in which growth stocks shined while cyclicals suffered. Growth’s recent leadership notwithstanding, however, 2017 looks nothing like 2015. Today’s environment features rising interest rates, quantitative easing is unwinding in the U.S. (with signs that Europe will soon follow suit), and an increasing amount of data shows a global economy that’s beginning to heat up. In our view, this environment seems significantly different than it did during growth’s last period of extended leadership, which featured anemic global growth and the looming threat of


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LETTER TO OUR STOCKHOLDERS    

It’s important to remember that we are still walking the road back to normalization. This is not a straight road—and it was never going to be. If 2017’s first half showed us anything, it was that the path back to normalization (and away from zero interest rates and abundant financial liquidity) will be a winding one with a few sharp twists and turns.
renewed recessions. It’s important to remember that we are still walking the road back to normalization. This is not a straight road—and it was never going to be. If 2017’s first half showed us anything, it was that the path back to normalization (and away from zero interest rates and abundant financial liquidity) will be a winding one with a few sharp twists and turns. We think that we are far from a new regime for growth. In fact, the environment still looks very conducive, at least to us, for value’s leadership to resume and continue—driven by cyclical industries positioned to benefit from global growth.
CAN THE LOW ROAD LEAD TO OUTPERFORMANCE?
Attractive returns for small-caps in the low-return world we anticipate
Our cautious optimism is tempered by an important caveat—the likelihood of lower returns for small-cap stocks than we experienced over the past five years. We make no secret of our belief in reversion to the mean—and the Russell 2000’s 13.7% average annual total return for the five-year period ended June 30, 2017 was higher than its rolling monthly five-year average since the inception of the small-cap index on 12/31/78—a gain of 10.6%.
      In addition, the chart below shows that small-cap’s rolling five-year returns over the past 15- and 25-year periods are also lower than the current five-year average for the Russell 2000. This explains why we see a high probability of lower small-cap returns over the next few years—our take is based on reversion to the mean.

    Rolling 5-Year Returns vs. Latest 5-Year Avg. Annual Total Return
Russell 2000 Average Monthly Rolling Average Annual Total Return for 5-Year Periods Through 6/30/17
That said, we still see positive, and quite likely very competitive, returns for small-caps ahead, with an argument that rests on two primary factors—the reasonable state of current valuations and the prospect for earnings strength and/or improvement.

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

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




EV/EBIT >
Long-term Average


Suggests small-caps
are more than
fully valued










Equity Risk Premium >
Long-term Average


Suggests small-caps
are undervalued

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

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

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

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

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

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

1 Last Twelve Months Enterprise Value/Earnings Before Interest and Taxes

Cyclical Definition: Consumer Discretionary, Energy, Financials, Industrials, Information Technology, Materials.
Defensive Definition: Consumer Staples, Health Care, Real Estate, Telecommunication Services, Utilities
Source: Factset

since inception (12/31/78). While the most recent five-year period may be seen as highly supportive for financial assets, small-cap value exceeded its historical five-year average return by only about 100 basis points, while its growth equivalent exceeded its historical average by approximately 550 basis points. Reversion to the mean strongly suggests a very challenging road ahead for small-cap growth stocks.
       In addition, valuations for cyclicals within small-cap look attractive versus defensives. The metric we prefer to use when examining valuations is the median relative enterprise value (“EV”) over earnings before interest and taxes (“EBIT”). We calculated it over the last 12 months ended June 30, 2017, excluding the companies in the Russell 2000 with negative EBIT. We think this gives a clear picture of the relative attractiveness of cyclicals versus defensive stocks. The results can be seen in the chart above, which shows that valuations for cyclical versus defensive sectors were below their long-term average at the end of June. We feel good about small-cap valuations for our preferred companies and see the greatest earnings potential for small-caps in cyclical areas of the market. Indeed, one of the underappreciated aspects of small-cap cyclicals is the degree to which many look poised to participate in global economic expansion.
       In fact, we would offer a qualified dissent to the idea that small-caps would be in a relatively unfavorable position if international economies outpace the rate of growth in the U.S. To be sure, this notion is sound enough when applied to the small-cap universe as a whole—the average company in the Russell 2000 derived only 19.8% of its sales from outside the U.S. at the end of June, compared to about 40% for the S&P 500. However, the level of foreign sales varies considerably by



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LETTER TO OUR STOCKHOLDERS


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

sector and industry in the Russell 2000, with Information Technology (44.1%) and Materials (33.4%) having the highest percentages of revenue derived from non-U.S. sources by sector.
      There are also certain other cyclical industries, including auto components (47.2%) and machinery (35.9%), that boast significant international exposure and therefore appear well positioned to benefit from global expansion. Additionally, with the dollar weakening, we expect to see heightened demand for U.S. exports. As experienced small-cap specialists, we see a rebounding global economy as being a potential advantage for active managers who, like us, carry more of a cyclical tilt in their portfolios.
      Granted, our earnings-centric outlook pivots on there being not simply the tailwind of solid earnings and relatively attractive valuations for select cyclicals but also headwinds for growth and defensive companies. Rising interest rates, for example, are more likely to benefit companies with EPS growth and mute multiple expansion. In this Goldilocks, “not too fast, not too slow” economic environment, we expect higher-quality companies (as measured by high returns on invested capital) to have an advantage. Companies that are able to make steady progress and fund their growth from internal cash flow rather than relying on increasingly pricey external sources of capital should be in a superior position to their financially less stable competitors.


SMALL-CAP’S SILK ROAD
The current opportunity in international small-cap
Additionally, there are timely opportunities in international small-cap stocks. As shown below, the trailing 10-year return for international small-caps is significantly lower than its long-term average. A regression to the mean of historical returns would result in more favorable performance. Prior to 2017, the Russell Global ex-U.S. Small Cap had underperformed the Russell 2000 by the widest spread since the inception of the non-U.S. small-cap index in July 1996. As of June 30,
2017, the performance spread between the two indexes was just shy of this lowest point. So while there is no guarantee of the course of future returns, we think the long-term performance history of the two small-cap indexes suggests that a multi-year run for international small-caps is possible. In our view, this is especially relevant when evaluating the opportunity in these companies.
Recent Returns for
non-U.S. Small-Caps
are at Low End of History


Russell Global ex-U.S. Small Cap
Index Quarterly Rolling 10-Year
Returns as of 6/30/17

      All of this adds up to an environment that appears supportive for active management. Three market environments have historically provided opportunities for many active managers—when value leads, when volatility rises, and when overall market returns are low. All three look more likely than not to us. To the last point, it’s interesting to note what’s shown in the following chart: active managers, with the Morningstar Small Cap Blend Category Average serving as a proxy, had their widest outperformance spread in the five-year periods when the Russell 2000 returned between 5-10%. This is exactly the environment that we think is most likely.
  Monthly Rolling 5-Year U.S. Small Blend1 Average Excess Returns During Russell 2000 Return Ranges from 12/31/73 through 6/30/17
1 There were 524 U.S. Fund Small Blend Funds tracked by Morningstar with at least five years of performance history as of 6/30/17.
The excess return for a Morningstar category would be the category’s return for the period minus the Index return.

GO WITH THE FLOW
Corrections are historically typical within small-cap

Of course, the road to a lower-return environment likely entails a correction. We do not see this as chilling or discouraging news. Within small-cap, some kind of realignment of stock prices is common. In 18 of the last 20 calendar years, the Russell 2000 had an intra-year decline of at least 10% (and a downturn of 9.6% occurred in one of the two years that escaped the 10%-plus fall). Over the last 20 calendar years,


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LETTER TO OUR STOCKHOLDERS    

the median intra-year correction was 14.2% while so far in 2017, the Russell 2000’s biggest decline was 4.7%. So we lean toward the likelihood of a pullback in the 8-12% range. We do not see it going much deeper than that because, at least currently, we see none of the signs of a major market top or a recession.
Year-to-Date vs. Median
Intra-Year Decline


Largest Russell 2000
Intra-Year Declines
Through 6/30/17

      Additionally, many market watchers were expecting a correction toward the end of the first quarter, and as of this writing we still have not seen one even in the midst of ample economic and political uncertainty. When this 20-year history is linked with the fact that we have still not experienced anything like a real correction since the February 2016 small-cap trough, then a downturn looks more than probable to us. So while we are confident that many small-cap companies are in fundamentally solid, even strong, shape, we have also seen over the years that markets simply do not keep ascending for this long without a little air being let out of them.

THE ROAD LESS TRAVELED
A challenging path worth taking
To be sure, the current environment offers a number of challenges for small-cap investors. Yet we believe it also looks favorable for those who walk the road less traveled—those with disciplined small-cap active management approaches that are geared more globally. Current uncertainty should sooner or later result in
higher levels of volatility. (Indeed, perhaps the oddest feature of 2017’s first half was its bullish placidity in the face of so much uncertainty—the 10-year Treasury showed as much, if not more, volatility in the year’s first six months as the stock market.) And we see increased volatility as potentially working to the advantage of the disciplined active manager.
      There is also the possibility of fiscal or regulatory support from Washington, which could of course help small-caps. Our view, however, is that investors place undue emphasis on this. We take issue with the common assumption that small-caps cannot continue to advance without a cocktail combining corporate tax cuts, deregulation, and infrastructure spending. Our outlook of measured optimism is not grounded on which policies emerge (or do not emerge) from Washington.
      Ultimately, of course, the success of what we do hinges on the companies in which we invest. On that score, we are encouraged. The ongoing optimism we have been hearing every day from management teams, for example, contradicts the expectation of an economic slowdown. Order books are continuing to fill up, and the majority of the companies we have been meeting with remain confident about their business. That in turn gives us ample confidence in what we do. We are convinced that small-cap active management approaches can remain successful as long as there is a reasonable amount of economic growth, whether here at home or overseas. Simply put, we see modest global economic growth leading to decent earnings growth which should result in moderate advances for small-caps as a group and greater advances for companies in cyclical businesses. Our advice? “Stay active, my friends.”


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



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Performance

  NAV Average Annual Total Returns
As of June 30, 2017 (%)
    YTD1   1-YR   3-YR   5-YR   10-YR   15-YR   20-YR   25-YR   30-YR     SINCE
INCEPTION
  INCEPTION
DATE
  Royce Global Value Trust   16.11   24.23   3.43   N/A   N/A   N/A   N/A   N/A   N/A     5.06   10/17/13   Royce Micro-Cap Trust   5.93   22.60   4.65   13.47   5.75   9.23   9.96   N/A   N/A     10.84   12/14/93   Royce Value Trust   7.29   25.76   6.95   13.38   5.56   8.77   9.52   10.81   10.47     10.63   11/26/86     INDEX                                                 Russell Global Small Cap Index   10.47   21.47   4.50   10.82   3.92   9.39   6.94   N/A   N/A     N/A   N/A   Russell Microcap Index   4.23   27.60   6.69   13.73   5.47   8.44   N/A   N/A   N/A     N/A   N/A   Russell 2000 Index   4.99   24.60   7.36   13.70   6.92   9.19   7.98   9.89   9.03     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.

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MANAGER’S DISCUSSION   Royce Global Value Trust (RGT)

Chuck Royce

FUND PERFORMANCE Royce Global Value Trust (“RGT”) advanced 16.1% on a net asset value (“NAV”) basis and 19.6% on a market price basis for the year-to-date period ended June 30, 2017, significantly outperforming its unleveraged benchmark, the Russell Global Small Cap Index, which was up 10.5% for the same period. These were impressive results on both an absolute and relative basis. We were especially pleased that positive performances came from holdings in the U.S., the U.K., Japan, and more than 20 other countries in the first half. Indeed, after several years in which international small-caps languished, their recent resurgence has been more than welcome, especially as more than two-thirds of RGT’s net assets were invested in non-U.S. companies at the end of June compared to 58.7% for the benchmark.     Getting off to a fast start, the Fund climbed 7.9% on an NAV basis and 9.4% on a market price basis for the first quarter, outperforming its benchmark, which was up 6.0% for the same period. This trend continued in the second quarter, in which RGT’s results tracked very closely to its first-quarter returns. The Fund was up 7.6% based on NAV and rose 9.3% based on market price compared to 4.2% for the Russell Global Small Cap Index in the second quarter. We were also pleased that the Fund outperformed its global small-cap benchmark for the one-year period ended June 30, 2017 on both an NAV and market price basis.   WHAT WORKED... AND WHAT DIDN’T Nine of the Fund’s 10 equity sectors finished the semiannual period in the black. Industrials and Information Technology led by fairly wide margins, though notable contributions also came from Financials and Health Care. At the industry level, four groups made particularly notable gains, led by capital markets (Financials), which has long been an area of focus for us, especially on a global level. Strong results also came from electronic equipment, instruments & components, health care equipment & supplies, and IT services. The first and third of these groups are in Information Technology, the second in Health Care. (Along with Industrials, these were the top-contributing sectors to the Russell Global Small Cap’s first-half performance.)
    At the position level, the portfolio’s top contributor was Indian consumer finance company Bajaj Finance, which rebounded off a relatively weak fourth quarter of 2016 owing to the government’s surprising decision to demonetize in November. During the first half of 2017, however, fiscal third-quarter results (released in January) revealed margin improvement and high asset quality while fiscal fourth-quarter results, which came in May, showed the strength of Bajaj’s 320-city presence in consumer and commercial lending operations. Although we trimmed our stake as its shares climbed, we believe the company can continue to benefit from its strong position in India’s nascent credit markets. The stock of California-based laser diode and equipment maker Coherent was galvanized by ongoing sales and earnings growth driven by vibrant demand for ramped up OLED (organic light-emitting diode) capacity. Raven Industries, also a U.S. firm, provides precision agriculture products, high-performance specialty films, and what it calls lighter-than-air technologies. Its shares rose on improvements in consolidated sales and earnings, driven by strength in the firm’s Applied Technology and Engineered Films units.
    Hurt by falling oil prices, Energy was the only sector that detracted from first-half performance, though its negative impact was comparably modest. Unsurprisingly, the portfolio industries that detracted most come from this same sector—energy equipment & services and oil, gas & consumable fuels. The top detractor at the position level was SEACOR Holdings, which provides marine transportation equipment and logistics services mostly for the energy and agricultural markets. Its earnings remained pressured by ongoing weakness in the offshore marine vessel business, which was exacerbated by the decline in oil prices in the first half, as well as overcapacity in its inland river barge and tow business. From the otherwise strong capital markets group, Toronto-based Dundee Corporation, which is involved in wealth management, real estate, and natural resources, experienced losses in mining- and resource-based activities that put downward pressure on its shares.
    Relative to the Russell Global Small Cap, the Fund benefited most from savvy stock selection in Financials, especially in capital markets and consumer finance. Also helping were superior stock picks in Industrials and Information Technology. The impact of relative detractors was far less significant and included ineffective stock picks in the Materials sector and our underweight in Telecommunication Services.

Top Contributors to Performance       Year-to-Date Through 6/30/17 (%)1               Bajaj Finance   0.59     Coherent   0.43     Raven Industries   0.38     Cognex Corporation   0.36     Relo Group   0.33     1 Includes dividends      
Top Detractors from Performance       Year-to-Date Through 6/30/17 (%)2               SEACOR Holdings   -0.25     Dundee Corporation Cl. A   -0.17     MBIA   -0.11     Signet Jewelers   -0.10     KBR   -0.09     2 Net of dividends      
CURRENT POSITIONING AND OUTLOOK Even after the strong start to 2017, we continue to find attractive opportunities in both U.S. and international companies. Select valuations in many parts of the world, including the U.S., still looked attractive to us at the end of June, especially in the context of expanding global growth. Recent data showed that the second quarter of 2017 was the eurozone’s best in more than six years, boosted by strong manufacturing numbers, job growth, and elevated business confidence. Additionally, in mid-July China reported surprisingly strong GDP growth for the second quarter, driven by increased retail sales, investment, and industry output. We are also confident in the prospects for smaller companies with earnings growth here in the U.S.
8 | 2017 Semiannual Report to Stockholders
       
PERFORMANCE AND PORTFOLIO REVIEW   SYMBOLS MARKET PRICE RGT NAV XRGTX
  Performance
Average Annual Total Return (%) Through 6/30/17
    JAN-JUN 20171   1-YR   3-YR   SINCE INCEPTION (10/17/13)   RGT (NAV)   16.11   24.23   3.43   5.06   1 Not Annualized                
  Market Price Performance History Since Inception (10/17/13)
Cumulative Performance of Investment1
    1-YR   5-YR   10-YR   15-YR   20-YR   SINCE INCEPTION (10/17/13)   RGT   28.7%   N/A   N/A   N/A   N/A   12.5%  

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   1.9   SEI Investments   1.9   Raven Industries   1.4   Lazard Cl. A   1.3   VZ Holding   1.3   Cognex Corporation   1.2   Virtu Financial Cl. A   1.1   Ashmore Group   1.1   Spirax-Sarco Engineering   1.1   Clarkson   1.1  
  Portfolio Sector Breakdown     % of Net Assets           Industrials   26.7   Information Technology   17.9   Financials   17.3   Materials   11.1   Health Care   10.7   Consumer Discretionary   7.7   Consumer Staples   3.4   Real Estate   2.7   Energy   2.7   Telecommunication Services   0.1   Outstanding Line of Credit, Net of Cash and Cash Equivalents   -0.3  
  Calendar Year Total Returns (%)    
YEAR
  RGT   2016   11.1   2015   -3.4   2014   -6.2  
  Portfolio Country Breakdown1,2
% of Net Assets
        United States   31.8     United Kingdom   11.6     Japan   9.9     Canada   8.6     France   4.4     Germany   4.3     Switzerland   4.0     1
Represents countries that are 3% or more of net assets.
2
Securities are categorized by the country of their headquarters.

  Portfolio Diagnostics               Fund Net Assets   $116 million     Number of Holdings   265     Turnover Rate   10%     Net Asset Value   $11.17     Market Price   $9.61     Net Leverage1   0.4%     Average Market Capitalization2   $1,864 million     Weighted Average P/E Ratio3,4   22.9x     Weighted Average P/B Ratio3   2.8x     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 (8% of portfolio holdings as of 6/30/17).
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 above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to-date performance for 2017.

2017 Semiannual Report to Stockholders | 9
       

Royce Global Value Trust

  Schedule of Investments Common Stocks – 100.3%       SHARES     VALUE                       AUSTRALIA 2.6%                

ALS

    125,000     $ 715,759  

Austal

    87,400       122,931  

†Berkeley Energia 1

    56,800       30,560  

Cochlear

    5,500       657,134  

†Hansen Technologies

    100,000       310,514  

IPH

    190,000       700,963  

†Mantra Group

    96,700       226,687  

NetComm Wireless 1

    26,700       35,297  

Programmed Maintenance Services

    60,500       86,723  

Seeing Machines 1

    1,084,800       54,750  

†Tassal Group

    29,400       86,094     Total (Cost $2,638,669)             3,027,412                       AUSTRIA 0.9%                

Mayr-Melnhof Karton

    7,900       1,033,131     Total (Cost $913,613)             1,033,131                       BELGIUM 0.1%                

†Greenyard

    6,600       156,342     Total (Cost $124,361)             156,342                       BERMUDA 1.3%                

Lazard Cl. A

    32,600       1,510,358     Total (Cost $1,010,334)             1,510,358                       BRAZIL 1.8%                

†BM&FBOVESPA

    32,847       195,819  

†Brasil Brokers Participacoes 1

    274,931       73,047  

Minerva

    52,500       195,078  

OdontoPrev

    200,000       703,311  

T4F Entretenimento

    44,000       81,681  

TOTVS

    88,000       801,135     Total (Cost $2,278,574)             2,050,071                       CANADA 8.6%                

Agnico Eagle Mines 2

    5,000       225,600  

AGT Food and Ingredients

    6,000       107,711  

Altus Group

    9,900       213,986  

Cameco Corporation 2

    24,500       222,950  

Canaccord Genuity Group

    92,000       378,131  

Computer Modelling Group

    108,000       847,810  

Dundee Corporation Cl. A 1

    80,000       175,817  

E-L Financial

    1,200       781,925  

Exco Technologies

    23,500       193,538  

FirstService Corporation

    10,300       658,994  

Franco-Nevada Corporation 2

    10,200       736,032  

Genworth MI Canada

    13,000       357,681  

Gluskin Sheff + Associates

    23,000       297,077  

Magellan Aerospace

    18,800       293,424  

Major Drilling Group International 1

    160,500       1,050,775  

Morneau Shepell

    35,000       562,461  

Pan American Silver 2,3

    31,800       534,876  

Sandstorm Gold 1

    25,300       97,911  

Solium Capital 1

    72,400       547,690  

Sprott

    520,600       915,305  

Western Forest Products

    123,100       222,127  

Winpak

    13,500       606,084     Total (Cost $10,882,436)             10,027,905                       CHINA 0.9%                

China Communications Services

    118,400       68,243  

TravelSky Technology

    250,000       736,476  

†Xingda International Holdings

    321,000       129,922  

Xtep International Holdings

    191,600       73,867     Total (Cost $627,507)             1,008,508                       CYPRUS 0.3%                

Globaltrans Investment GDR

    42,000       319,200     Total (Cost $212,014)             319,200                       DENMARK 1.9%                

Chr. Hansen Holding

    9,000       654,573  

Coloplast Cl. B

    7,000       584,915  

SimCorp

    7,500       454,353  

Zealand Pharma 1

    24,000       481,080     Total (Cost $1,550,713)             2,174,921                       FRANCE 4.4%                

Bigben Interactive 1

    10,000       110,332  

HighCo

    16,200       115,643  

Interparfums

    16,500       624,350  

Manutan International

    900       88,927  

Neurones

    22,250       684,113  

Rothschild & Co

    33,000       1,204,602  

Thermador Groupe

    9,500       1,011,259  

Vetoquinol

    10,000       583,867  

Virbac 1

    4,500       722,124     Total (Cost $3,880,469)             5,145,217                       GEORGIA 0.1%                

BGEO Group     2,200       100,117     Total (Cost $63,649)             100,117                       GERMANY 4.3%                

Bertrandt

    2,000       200,470  

CANCOM

    3,700       224,948  

Carl Zeiss Meditec

    17,500       908,237  

CompuGroup Medical

    12,500       701,423  

Fielmann

    8,000       617,126  

HolidayCheck Group 1

    25,100       87,982  

KWS Saat

    1,800       708,144  

MorphoSys 1

    6,000       425,565  

mutares

    5,000       77,552  

STRATEC Biomedical

    15,000       983,391  

VIB Vermoegen

    3,600       85,031     Total (Cost $3,732,480)             5,019,869                       GREECE 0.2%                

Aegean Marine Petroleum Network 2

    2,500       14,625  

Hellenic Exchanges - Athens Stock Exchange

    28,000       181,648     Total (Cost $160,960)             196,273                       HONG KONG 1.9%                

Anxin-China Holdings 1,4

    2,500,000       0  

China Metal International Holdings

    430,000       160,270  

First Pacific

    180,000       132,796  

HKBN

    105,900       106,206  

I.T

    365,800       180,383  

Oriental Watch Holdings

    465,900       101,445  

Pico Far East Holdings

    418,200       175,155  
10 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       

June 30, 2017 (unaudited)

  Schedule of Investments (continued)
      SHARES     VALUE                       HONG KONG (continued)                

Television Broadcasts

    54,000     $ 203,344  

Value Partners Group

    1,275,000       1,161,103     Total (Cost $2,495,560)             2,220,702                       INDIA 2.1%                

Bajaj Finance

    53,500       1,136,878  

IIFL Holdings

    5,500       51,522  

Kewal Kiran Clothing

    6,500       172,562  

Manappuram Finance

    55,100       83,199  

SH Kelkar & Company 1

    85,000       345,918  

†Vakrangee

    95,000       632,059     Total (Cost $1,546,947)             2,422,138                       INDONESIA 0.6%                

Selamat Sempurna

    8,000,000       723,316     Total (Cost $716,411)             723,316                       IRELAND 0.6%                

Ardmore Shipping 2,3

    12,300       100,245  

Irish Continental Group

    26,700       154,917  

Irish Residential Properties REIT

    57,281       88,976  

Keywords Studios

    37,500       364,604     Total (Cost $417,749)             708,742                       ISRAEL 0.4%                

†Frutarom Industries

    5,000       349,879  

Nova Measuring Instruments 1,2

    3,600       79,524  

Sarine Technologies

    25,700       28,747     Total (Cost $407,197)             458,150                       ITALY 0.9%                

†Banca Farmafactoring 1

    22,000       125,636  

DiaSorin

    10,000       768,096  

†Openjobmetis 1

    9,800       117,751     Total (Cost $668,671)             1,011,483                                         JAPAN 9.9%                

Ai Holdings

    30,000       806,846  

†Ateam

    5,500       145,721  

C. Uyemura & Co.

    1,300       66,806  

GCA

    11,000       97,995  

G-Tekt

    3,100       57,659  

Horiba

    10,000       607,246  

†IDOM

    29,600       203,956  

Inabata & Co.

    6,500       86,050  

†Investors Cloud

    2,600       126,677  

Itochu Techno-Solutions

    3,000       104,823  

Kenedix

    16,900       79,636  

Kenko Mayonnaise

    3,300       95,061  

Kintetsu World Express

    4,000       70,487  

Leopalace21

    10,600       65,782  

Mandom Corporation

    1,600       86,633  

Maruwa Unyu Kikan

    950       35,432  

Meitec Corporation

    26,300       1,118,875  

Miraca Holdings

    1,400       62,858  

MISUMI Group

    43,800       999,251  

Nabtesco

    2,400       69,669  

Nifco

    1,300       69,696  

Nihon Kohden

    35,000       807,202  

NS Solutions

    4,900       116,319  

Open House

    2,900       89,211  

Outsourcing

    2,200       107,188  

Pressance

    3,700       48,752  

Relo Group

    57,500       1,118,049  

Ryobi

    16,100       65,416  

Santen Pharmaceutical

    80,000       1,083,974  

Shimano

    3,500       553,279  

SPARX Group

    55,100       105,816  

Sugi Holdings

    12,500       669,038  

Sun Frontier Fudousan

    7,300       73,211  

Tokai Corporation

    1,800       71,216  

†Tokuyama Corporation 1

    19,800       95,237  

USS

    62,500       1,240,831  

†Yumeshin Holdings

    13,500       89,660  

†Zenkoku Hosho

    4,000       163,414     Total (Cost $8,584,143)             11,554,972                       MEXICO 0.8%                

†Becle SAB de CV 1

    200,000       341,070  

Bolsa Mexicana de Valores

    250,000       439,149  

Rassini 1

    23,400       115,396     Total (Cost $897,653)             895,615                       NETHERLANDS 0.1%                

†AMG Advanced Metallurgical Group

    2,400       70,105  

Constellium Cl. A 1

    8,900       61,410     Total (Cost $104,166)             131,515                       NEW ZEALAND 0.8%                

Fisher & Paykel Healthcare

    100,891       846,532  

New Zealand Refining

    43,100       77,064     Total (Cost $643,361)             923,596                       NORWAY 1.2%                

Nordic Semiconductor 1

    28,300       112,539  

NRC Group

    10,900       73,113  

†Protector Forsikring

    10,500       88,037   TGS-NOPEC Geophysical     55,000       1,127,175     Total (Cost $1,350,045)             1,400,864                       PHILIPPINES 0.2%                

Integrated Micro-Electronics

    756,900       199,500  

Universal Robina

    22,500       72,637     Total (Cost $155,675)             272,137                       POLAND 0.4%                

Warsaw Stock Exchange

    33,000       434,758     Total (Cost $459,764)             434,758                       SINGAPORE 0.8%                

CSE Global

    320,300       100,039  

†Duty Free International

    563,080       101,372  

XP Power

    25,000       790,912     Total (Cost $781,924)             992,323                       SOUTH AFRICA 0.5%                

Adcock Ingram Holdings

    24,100       108,871  

Coronation Fund Managers

    59,000       293,997  

JSE

    15,000       140,466  

Raubex Group

    46,100       84,677     Total (Cost $715,434)             628,011    
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 11
       

Royce Global Value Trust

  Schedule of Investments (continued)
      SHARES     VALUE                       SOUTH KOREA 0.5%                

Koh Young Technology

    3,200     $ 167,810  

KT Skylife

    11,600       165,765  

Modetour Network

    7,494       207,303     Total (Cost $398,205)             540,878                       SPAIN 0.1%                

Atento 1,2

    16,400       182,860     Total (Cost $181,133)             182,860                       SWEDEN 2.2%                

Addtech Cl. B

    53,960       1,027,999  

†Boozt 1

    10,000       98,520  

Bravida Holding

    100,000       730,590  

Byggmax Group

    21,400       155,584  

Dustin Group

    19,500       162,023  

Hoist Finance

    8,000       81,902  

Knowit

    6,200       95,487  

Proact IT Group

    7,600       184,481     Total (Cost $1,981,794)             2,536,586                       SWITZERLAND 4.0%                

Burckhardt Compression Holding

    2,500       716,967  

dormakaba Holding

    800       694,963  

LEM Holding

    600       775,889  

Partners Group Holding

    1,600       991,970  

VZ Holding

    4,600       1,476,327     Total (Cost $3,291,021)             4,656,116                       TAIWAN 1.0%                

Egis Technology 1

    9,600       65,641  

Flytech Technology

    32,780       106,896  

†Formosa Laboratories

    58,100       166,737  

Gourmet Master

    11,330       122,164  

Posiflex Technology

    17,404       94,401  

†Sinmag Equipment

    15,000       87,771  

Sitronix Technology

    40,400       124,573  

Sporton International

    26,997       136,671  

Taiwan Paiho

    42,500       159,969  

TCI

    21,700       138,033     Total (Cost $1,114,367)             1,202,856                       THAILAND 0.1%                

†Krungthai Card

    30,800       108,802     Total (Cost $117,472)             108,802                       TURKEY 0.1%                

Tat Gida Sanayi

    74,700       151,377     Total (Cost $148,678)             151,377                       UNITED KINGDOM 11.6%                

Abcam

    30,000       380,380  

Ashmore Group

    279,000       1,283,470  

AVEVA Group

    18,500       467,449  

Avon Rubber

    8,700       115,579  

Character Group

    11,400       71,641  

Clarkson

    38,100       1,253,485  

Computacenter

    14,800       156,331  

Connect Group

    68,500       100,593  

Consort Medical

    64,800       881,967  

Conviviality

    51,600       206,996  

Diploma

    30,000       431,762  

dotdigital group

    150,200       132,049  

Elementis

    175,000       670,338  

Epwin Group

    47,500       68,053  

Equiniti Group

    200,000       650,574  

Ferroglobe

    41,100       491,145  

Ferroglobe (Warranty Insurance Trust) 1,4

    41,100       0  

Fidessa Group

    10,000       301,778  

Finsbury Food Group

    66,400       100,320  

Hilton Food Group

    19,200       184,552  

Inspired Energy

    143,000       32,594  

ITE Group

    350,000       702,020  

Jupiter Fund Management

    36,000       236,785  

†Just Eat 1

    3,000       25,593  

Norcros

    57,560       136,444  

Pendragon

    278,600       112,487  

Polypipe Group

    60,000       298,756  

Rank Group

    40,000       123,577  

Real Estate Investors

    90,000       70,918  

Rotork

    175,000       536,544  

Spirax-Sarco Engineering

    18,000       1,254,259  

Stallergenes Greer 1

    10,800       465,408  

Victrex

    40,000       977,358  

Xaar

    115,000       566,175     Total (Cost $13,467,956)             13,487,380                       UNITED STATES 31.8%                

Air Lease Cl. A

    30,700       1,146,952  

Brooks Automation 2,3

    18,100       392,589  

Century Casinos 1

    21,400       157,718  

CIRCOR International

    18,100       1,074,778  

Cognex Corporation

    17,100       1,451,790  

Coherent 1

    5,000       1,124,950  

Commercial Metals

    42,000       816,060  

Copart 1

    37,200       1,182,588  

Diebold Nixdorf 2,3

    28,800       806,400  

Diodes 1

    20,500       492,615  

DST Systems

    11,600       715,720  

EnerSys 2

    11,000       796,950  

Expeditors International of Washington 2

    13,300       751,184  

FLIR Systems 2,3

    14,100       488,706  

Greif Cl. A 2

    8,700       485,286  

Innospec 2,3

    12,457       816,557  

Kadant

    7,800       586,560  

KBR 2

    73,400       1,117,148  

Kirby Corporation 1,2,3

    32,900       2,199,365  

Lindsay Corporation

    13,700       1,222,725  

Littelfuse

    5,000       825,000  

ManpowerGroup

    11,000       1,228,150  

MBIA 1

    80,300       757,229  

Nanometrics 1,2,3

    44,500       1,125,405  

National Instruments 2,3

    19,000       764,180  

†New York REIT 1

    50,000       432,000  

Oaktree Capital Group LLC Cl. A

    10,400       484,640  

Popular

    13,100       546,401  

Quaker Chemical 2

    8,400       1,219,932  

Raven Industries

    50,000       1,665,000  
12 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       

June 30, 2017 (unaudited)

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

Rogers Corporation 1,2

    6,000     $ 651,720  

Schnitzer Steel Industries Cl. A 2

    19,100       481,320  

SEACOR Holdings 1

    20,200       692,860  

†SEACOR Marine Holdings 1

    20,309       413,491  

SEI Investments 2

    40,600       2,183,468  

Sensient Technologies 2,3

    9,500       765,035  

Signet Jewelers

    5,500       347,820  

Standard Motor Products

    11,200       584,864  

Sun Hydraulics 2

    15,139       645,981  

Tennant Company 2,3

    11,600       856,080  

Valmont Industries

    4,500       673,200  

Virtu Financial Cl. A

    74,300       1,311,395  

World Fuel Services

    12,000       461,400     Total (Cost $29,763,578)             36,943,212                       URUGUAY 0.3%                

†Arcos Dorados Holdings Cl. A 1

    46,800       348,660     Total (Cost $351,426)             348,660                                         TOTAL COMMON STOCKS                   (Cost $98,836,109)             116,706,373                       REPURCHASE AGREEMENT 6.6%                 Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value
$7,657,077 (collateralized by obligations of various U.S. Government Agencies, 2.375%
due 8/15/24, valued at $7,812,982)
  (Cost $7,657,000)             7,657,000                       TOTAL INVESTMENTS 106.9%                   (Cost $106,493,109)             124,363,373                       LIABILITIES LESS CASH AND OTHER ASSETS – (6.9)%             (8,048,860 )                                     NET ASSETS 100.0%           $ 116,314,513    
New additions in 2017. 1 Non-income producing. 2
All or a portion of these securities were pledged as collateral in connection with the Fund’s revolving credit agreement at June 30, 2017. Total market value of pledged securities at June 30, 2017, was $13,389,556.
3
At June 30, 2017, a portion of these securities were rehypothecated in connection with the Fund’s revolving credit agreement in the aggregate amount of $6,211,095.
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 June 30, 2017, market value.
     
TAX INFORMATION: The cost of total investments for Federal income tax purposes was $106,553,829. At June 30, 2017, net unrealized appreciation for all securities was $17,809,544, consisting of aggregate gross unrealized appreciation of $23,819,812 and aggregate gross unrealized depreciation of $6,010,268. The primary cause of the difference between book and tax basis cost is the timing of the recognition of losses on securities sold.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 13
       
Royce Global Value Trust   June 30, 2017 (unaudited)
  Statement of Assets and Liabilities
ASSETS:           Investments at value     $ 116,706,373     Repurchase agreements (at cost and value)       7,657,000     Cash and foreign currency       15,447     Receivable for investments sold       9,942     Receivable for dividends and interest       218,254     Prepaid expenses and other assets       15,833     Total Assets       124,622,849     LIABILITIES:           Revolving credit agreement       8,000,000     Payable for investment advisory fee       118,929     Payable for directors’ fees       8,073     Payable for interest expense       999     Accrued expenses       40,297     Deferred capital gains tax       140,038     Total Liabilities       8,308,336     Net Assets     $ 116,314,513     ANALYSIS OF NET ASSETS:           Paid-in capital - $0.001 par value per share; 10,415,422 shares outstanding (150,000,000 shares authorized)     $ 117,477,118     Undistributed net investment income (loss)       (428,119 )   Accumulated net realized gain (loss) on investments and foreign currency       (18,464,782 )   Net unrealized appreciation (depreciation) on investments and foreign currency       17,730,296     Net Assets (net asset value per share - $11.17)     $ 116,314,513     Investments at identified cost     $ 98,836,109    
14 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       

Royce Global Value Trust

  Statement of Changes in Net Assets
    SIX MONTHS ENDED             6/30/17             (UNAUDITED)   YEAR ENDED 12/31/16                     INVESTMENT OPERATIONS:                 Net investment income (loss)   $ 244,621     $ 651,129     Net realized gain (loss) on investments and foreign currency     1,680,916       (1,449,508 )   Net change in unrealized appreciation (depreciation) on investments and foreign currency     14,161,189       10,740,946     Net increase (decrease) in net assets from investment operations     16,086,726       9,942,567     DISTRIBUTIONS:                   Net investment income           (1,435,789 ) Net realized gain on investments and foreign currency               Return of capital           (12,497 )   Total distributions           (1,448,286 )   CAPITAL STOCK TRANSACTIONS:                 Reinvestment of distributions           559,946     Total capital stock transactions           559,946     Net Increase (Decrease) In Net Assets     16,086,726       9,054,227     NET ASSETS:                   Beginning of period     100,227,787       91,173,560     End of period (including undistributed net investment income (loss) of $(428,119) at 6/30/17 and $(672,740) at 12/31/16)   $ 116,314,513     $ 100,227,787    
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 15
       
Royce Global Value Trust   Six Months Ended June 30, 2017 (unaudited)
  Statement of Operations
INVESTMENT INCOME:         INCOME:         Dividends   $ 1,212,111     Foreign withholding tax     (66,605 )   Interest     2,293     Rehypothecation income     1,149     Total income     1,148,948     EXPENSES:           Investment advisory fees     674,539     Interest expense     83,884     Custody and transfer agent fees     43,199     Stockholder reports     35,642     Professional fees     30,548     Directors’ fees     13,433     Administrative and office facilities     12,904     Other expenses     10,230     Total expenses     904,379     Compensating balance credits     (52 )   Net expenses     904,327     Net investment income (loss)     244,621     REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:         NET REALIZED GAIN (LOSS):           Investments     1,677,715     Foreign currency transactions     3,201     NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):           Investments and foreign currency translations     14,222,856     Other assets and liabilities denominated in foreign currency     (61,667 )   Net realized and unrealized gain (loss) on investments and foreign currency     15,842,105     NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS   $ 16,086,726    
16 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       
Royce Global Value Trust   Six Months Ended June 30, 2017 (unaudited)
  Statement of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES:         Net increase (decrease) in net assets from investment operations   $ 16,086,726     Adjustments to reconcile net increase (decrease) in net assets from investment operations to net cash used for operating activities:          

Purchases of long-term investments

    (12,260,513 )  

Proceeds from sales and maturities of long-term investments

    12,720,762    

Net purchases, sales and maturities of short-term investments

    (867,000 )  

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

    (17,895 )  

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

    57,981    

Net change in unrealized appreciation (depreciation) on investments

    (14,222,856 )  

Net realized gain (loss) on investments and foreign currency

    (1,680,916 )   Net cash used for operating activities     (183,711 )   CASH FLOWS FROM FINANCING ACTIVITIES:         Net increase (decrease) in revolving credit agreement         Distributions         Reinvestment of distributions         Net cash used for financing activities         INCREASE (DECREASE) IN CASH:     (183,711 )   Cash and foreign currency at beginning of period     199,158     Cash and foreign currency at end of period   $ 15,447    
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 17
       

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.
    SIX MONTHS
ENDED 6/30/2017(UNAUDITED)
  YEARS ENDED                                                       PERIOD ENDED       12/31/16   12/31/15   12/31/14   12/31/131   Net Asset Value, Beginning of Period   $ 9.62     $ 8.81     $ 9.25     $ 10.05     $ 9.78     INVESTMENT OPERATIONS:                                         Net investment income (loss)     0.02       0.06       0.10       0.13       (0.00 )   Net realized and unrealized gain (loss) on investments and foreign currency     1.53       0.90       (0.43 )     (0.77 )     0.27     Net increase (decrease) in net assets from investment operations     1.55       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   $ 11.17     $ 9.62     $ 8.81     $ 9.25     $ 10.05     Market Value, End of Period   $ 9.61     $ 8.04     $ 7.45     $ 8.04     $ 8.89     TOTAL RETURN:2                                         Net Asset Value     16.11 %3     11.12 %     (3.44 )%     (6.23 )%     2.76 %3   Market Value     19.58 %3     9.77 %     (6.06 )%     (7.86 )%     (0.95 )%3   RATIOS BASED ON AVERAGE NET ASSETS:                                         Investment advisory fee expense     1.25 %4     1.25 %     1.25 %     1.25 %     1.25 %4   Other operating expenses     0.43 %4     0.46 %     0.43 %     0.24 %     0.37 %4   Total expenses (net)     1.68 %4     1.71 %     1.68 %     1.49 %     1.62 %4   Expenses excluding interest expense     1.52 %4     1.57 %     1.58 %     1.49 %     1.62 %4   Expenses prior to balance credits     1.68 %4     1.71 %     1.68 %     1.49 %     1.62 %4   Net investment income (loss)     0.45 %4     0.69 %     1.03 %     1.30 %     (0.13 )%4   SUPPLEMENTAL DATA:                                         Net Assets End of Period (in thousands)   $ 116,315     $ 100,228     $ 91,174     $ 95,285     $ 102,684     Portfolio Turnover Rate     10 %     59 %     65 %     43 %     7 %   REVOLVING CREDIT AGREEMENT:                                         Asset coverage     1554 %     1353 %     1240 %                   Asset coverage per $1,000     15,539       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
18 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       

Royce Global Value Trust

Notes to Financial Statements (unaudited)

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 June 30, 2017. 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   $116,706,373     $     $0     $116,706,373   Cash Equivalents           7,657,000             7,657,000    

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 six months ended June 30, 2017, securities valued at $61,425,779 were transferred from Level 2 to Level 1 within the fair value hierarchy.


2017 Semiannual Report to Stockholders | 19
       

Royce Global Value Trust

Notes to Financial Statements (unaudited) (continued)

VALUATION OF INVESTMENTS (continued):

Level 3 Reconciliation:                         BALANCE AS OF 12/31/16   REALIZED AND UNREALIZED
GAIN (LOSS)1
  BALANCE AS OF 6/30/17   Common Stocks     $9,349       $(9,349)       $0     1
The net change in unrealized appreciation (depreciation) is included in the accompanying Statement of Operations. Change in unrealized appreciation (depreciation) includes net unrealized appreciation (depreciation) resulting from changes in investment values during the reporting period and the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized. Net realized gain (loss) from investments and foreign currency transactions is included in the accompanying Statement of Operations.

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 June 30, 2017 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.

20 | 2017 Semiannual Report to Stockholders
       

Royce Global Value Trust

Notes to Financial Statements (unaudited) (continued)

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 shares of Common Stock as reinvestment of distributions for the year ended December 31, 2016.
  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 June 30, 2017, the Fund has outstanding borrowings of $8,000,000. During the six months ended June 30, 2017, the Fund borrowed an average daily balance of $8,000,000 at a weighted average borrowing cost of 2.09%. The maximum amount outstanding during the six months ended June 30, 2017 was $8,000,000. As of June 30, 2017, the aggregate value of rehypothecated securities was $6,211,095. During the six months ended June 30, 2017, the Fund earned $1,149 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 six months ended June 30, 2017, the Fund expensed Royce investment advisory fees totaling $674,539.
  Purchases and Sales of Investment Securities:
For the six months ended June 30, 2017, the costs of purchases and proceeds from sales of investment securities, other than short-term securities, amounted to $11,134,896 and $11,226,117, respectively.
2017 Semiannual Report to Stockholders | 21
       
MANAGER’S DISCUSSION   Royce Micro-Cap Trust (RMT)
Chuck Royce
FUND PERFORMANCE Royce Micro-Cap Trust (“RMT”) gained a more-than-respectable 5.9% on a net asset value (“NAV”) basis and an impressive 10.1% on a market price basis for the year-to-date period ended June 30, 2017, outpacing each of its unleveraged benchmarks: the small-cap Russell 2000 Index was up 5.0% while the Russell Microcap Index increased 4.2% for the same period. The Fund’s results were all the more notable in that they were achieved in a period that showed more favor to larger market caps, high growth, and low quality than was given to the kind of micro-cap companies we seek using RMT’s diversified, multi-theme core approach. In fact, leadership in the first half of 2017 reversed most of what worked in 2016, when the Fund also beat both its benchmarks.     In a challenging first quarter for both value stocks and micro-caps, RMT gained 2.4% on an NAV basis and 4.8% based on market price while the Russell 2000 was up 2.5% and the Russell Microcap gained 0.4%. The first quarter’s leadership shifts remained largely in place through the end of June—with large-caps, growth, healthcare, and non-U.S. equities all staying in the lead after lagging in 2016. For the second quarter, the Fund advanced 3.5% on an NAV basis and 5.0% on a market price basis compared to 2.5% for the small-cap index and 3.8% for the micro-cap index. On an NAV basis, RMT outpaced the Russell Microcap for the 10- and 15-year periods ended June 30, 2017 while it also beat the Russell 2000 for the 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 June 30, 2017 was 10.8%.   WHAT WORKED... AND WHAT DIDN’T Eight of the Fund’s 11 equity sectors made positive contributions to first-half performance, led by Information Technology, Industrials, and Health Care. (After correcting in 2016, Health Care rallied in the first half to land as the top-contributing sector in both the small- and micro-cap indexes.) While several of the portfolio’s industry groups made solid contributions to performance in the semiannual period, the positive impacts of machinery (Industrials) and biotechnology (Health Care) stood out most. Also notable was the fact that the Information Technology sector had five groups among the Fund’s 10-best performers at the industry level.     RMT’s top contributor at the position level in the first half was Sangamo Therapeutics, which develops genomic therapies and medications that treat genetic diseases. Its share price surged in May when a collaboration with Pfizer to work on gene therapies for hemophilia was announced. From the Information Technology sector, Care.com offers home care services for children, adults, seniors, and even pets. Two consecutive quarters of revenue growth made investors feel at home, as did the company’s announcement of increased guidance for the rest of fiscal 2017. Shares of gold miner Exeter Resource were mostly moving upward before the announcement of its acquisition at an attractive premium drove its shares even higher and led us to begin selling our position.
    Of the three sectors that detracted from first-half results, only Energy made a notably negative impact, as net losses for Consumer Discretionary and Financials were comparably minor. A similar pattern played out at the industry level, where the only significant detraction came from energy equipment & services. At each level, tumbling oil prices led to formidable difficulties. The Fund’s top detractor at the position level was Era Group, which provides helicopter transportation services and personnel primarily to and from offshore oil drilling rigs and platforms. The challenges wrought by falling oil prices were reflected in disappointing earnings. Liking the long-term prospects for its niche business, we held shares at the end of June. Our experience with automotive parts recycler and reseller Fenix Parts continued to be highly disappointing as its shares were delisted on Nasdaq when it missed financial reporting filing deadlines. Toronto-based Dundee Corporation, which is involved in wealth management, real estate, and natural resources, experienced losses in mining- and resource-based activities that put downward pressure on its shares.
    Relative to the Russell 2000, RMT benefited most from superior stock selection in Industrials, specifically in the previously mentioned machinery group. Also helping relative results were our lower exposure to banks, which gave us an edge in Financials, and stock-picking advantages in Materials and Information Technology. Conversely, stock selection in both Health Care and, to a lesser extent, Consumer Discretionary hurt the Fund vis-à-vis the small-cap index.
Top Contributors to Performance       Year-to-Date Through 6/30/17 (%)1               Sangamo Therapeutics   0.39     Care.com   0.34     Exeter Resource   0.28     Intevac   0.27     Major Drilling Group International   0.25     1 Includes dividends      
Top Detractors from Performance       Year-to-Date Through 6/30/17 (%)2               Era Group   -0.54     Fenix Parts   -0.25     Dundee Corporation Cl. A   -0.24     Matrix Service   -0.18     Alcobra   -0.17     2 Net of dividends      
CURRENT POSITIONING AND OUTLOOK We think that RMT’s portfolio remains well-positioned to benefit from a cyclical upswing. So while a correction would not be surprising, we are optimistic that expanding global growth can help certain micro-cap companies, especially those with earnings growth. The message that we have been receiving from the companies we speak to each day remains positive. With order books continuing to fill up, the management teams remain confident about their business, which in turn gives us a lot of confidence in the long-term prospects for RMT’s multi-themed core approach.
22 | 2017 Semiannual Report to Stockholders
       
PERFORMANCE AND PORTFOLIO REVIEW   SYMBOLS MARKET PRICE RMT NAV XOTCX
  Performance
Average Annual Total Return (%) Through 6/30/17
    JAN-JUN 20171   1-YR   3-YR   5-YR   10-YR   15-YR   20-YR   SINCE INCEPTION (12/14/93)   RMT (NAV)   5.93   22.60   4.65   13.47   5.75   9.23   9.96   10.84   1 Not Annualized                        
  Market Price Performance History Since Inception (12/14/93)
Cumulative Performance of Investment1
    1-YR   5-YR   10-YR   15-YR   20-YR   SINCE INCEPTION (12/14/93)   RMT   27.3%   89.5%   54.5%   246.3%   587.5%   865.4%  

1Reflects 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.
2Reflects 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               Major Drilling Group International   1.5     Mesa Laboratories   1.3     Surmodics   1.1     IES Holdings   1.1     Atrion Corporation   1.1     Kadant   1.1     Zealand Pharma   1.1     Heritage-Crystal Clean   1.0     Quaker Chemical   1.0     Seneca Foods   1.0    
  Portfolio Sector Breakdown       % of Net Assets               Industrials   21.1     Information Technology   19.9     Consumer Discretionary   15.0     Health Care   14.9     Financials   11.6     Materials   6.7     Energy   4.6     Real Estate   4.1     Consumer Staples   2.8     Utilities   0.4     Telecommunication Services   0.2     Miscellaneous   4.2     Outstanding Line of Credit, Net of Cash and Cash Equivalents   -5.5    
  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   $377 million     Number of Holdings   365     Turnover Rate   5%     Net Asset Value   $9.82     Market Price   $8.65     Net Leverage1   5.5%     Average Market Capitalization2   $416 million     Weighted Average P/B Ratio3   1.9x     Active Share4   94%     U.S. Investments (% of Net Assets)   84.0%     Non-U.S. Investments (% of Net Assets)   21.5%    
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 above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to-date performance for 2017.

2017 Semiannual Report to Stockholders | 23 
       

Royce Micro-Cap Trust

  Schedule of Investments Common Stocks – 105.5%       SHARES     VALUE                         CONSUMER DISCRETIONARY 15.0%                 AUTO COMPONENTS - 1.8%                

Fox Factory Holding1

    5,300     $ 188,680  

Motorcar Parts of America1

    57,100       1,612,504  

Sebang Global Battery

    50,500       1,754,469  

Standard Motor Products

    53,860       2,812,569  

Stoneridge1

    7,500       115,575  

Unique Fabricating

    12,200       116,144                                 6,599,941                   DISTRIBUTORS - 0.7%                

Fenix Parts1,2

    440,800       185,577  

Uni-Select

    33,800       816,329  

Weyco Group

    56,600       1,578,008                                 2,579,914                   DIVERSIFIED CONSUMER SERVICES - 1.9%                

American Public Education1

    73,200       1,731,180  

Collectors Universe

    108,200       2,688,770  

Liberty Tax Cl. A

    148,900       1,928,255  

Universal Technical Institute1

    270,000       963,900                                 7,312,105                   HOTELS, RESTAURANTS & LEISURE - 1.3%                

Century Casinos1

    222,500       1,639,825  

Del Taco Restaurants1

    8,200       112,750  

Lindblad Expeditions Holdings1

    234,000       2,457,000  

Lindblad Expeditions Holdings (Warrants)1

    18,100       40,725  

Red Lion Hotels1

    90,000       661,500                                 4,911,800                   HOUSEHOLD DURABLES - 4.0%                

AV Homes1

    82,000       1,644,100  

Cavco Industries1,3,4

    19,141       2,481,631  

Ethan Allen Interiors3

    45,200       1,459,960  

Flexsteel Industries3

    16,100       871,171  

iRobot Corporation1,3,4

    15,000       1,262,100  

Lifetime Brands3,4

    124,294       2,255,936  

PICO Holdings1,3,4

    147,100       2,574,250  

Stanley Furniture

    193,468       218,619  

Universal Electronics1

    15,100       1,009,435  

ZAGG1

    131,300       1,135,745                                 14,912,947                   INTERNET & DIRECT MARKETING RETAIL - 0.7%                

FTD Companies1

    67,200       1,344,000  

Gaia Cl. A1,3,4

    125,000       1,400,000                                 2,744,000                   LEISURE PRODUCTS - 1.1%                

American Outdoor Brands1,3,4

    27,100       600,536  

Black Diamond1

    194,926       1,296,258  

Nautilus1

    118,500       2,269,275                                 4,166,069                   MEDIA - 0.6%                

Entravision Communications Cl. A

    126,200       832,920  

McClatchy Company (The) Cl. A1

    69,313       647,383  

New Media Investment Group

    66,200       892,376                                 2,372,679                   SPECIALTY RETAIL - 1.6%                

AutoCanada

    115,200       1,694,954  

Barnes & Noble Education1

    80,000       850,400  

Destination Maternity1

    212,000       686,880  

Destination XL Group1

    50,000       117,500  

Haverty Furniture

    30,000       753,000  

Kirkland’s1

    11,000       113,080  

MarineMax1

    7,600       148,580  

Shoe Carnival3

    21,028       439,064  

Stage Stores3

    15,000       31,200  

TravelCenters of America LLC1

    5,400       22,140                  

West Marine

    86,000       1,105,100                                 5,961,898                   TEXTILES, APPAREL & LUXURY GOODS - 1.3%                

Crown Crafts

    112,159       773,897  

Culp

    32,900       1,069,250  

J.G. Boswell Company2

    2,490       1,635,930  

YGM Trading

    1,482,000       1,378,084                                 4,857,161       Total (Cost $54,578,416)             56,418,514                         CONSUMER STAPLES 2.8%                 BEVERAGES - 0.2%                

Crimson Wine Group1,2

    58,124       619,021                   FOOD PRODUCTS - 2.5%                

Farmer Bros.1,3,4

    62,600       1,893,650  

John B. Sanfilippo & Son3

    17,800       1,123,358  

Landec Corporation1,3,4

    75,610       1,122,809  

Seneca Foods Cl. A1

    73,087       2,269,351  

Seneca Foods Cl. B1

    40,400       1,454,400  

SunOpta1

    176,281       1,798,066                                 9,661,634                   HOUSEHOLD PRODUCTS - 0.1%                

Central Garden & Pet1

    12,000       381,480       Total (Cost $6,140,646)             10,662,135                         ENERGY 4.6%                 ENERGY EQUIPMENT & SERVICES - 1.8%                

Aspen Aerogels1

    94,985       422,683  

CARBO Ceramics1,3,4

    34,000       232,900  

CES Energy Solutions

    25,000       111,428  

Dawson Geophysical1

    73,654       288,724  

Era Group1

    297,409       2,813,489  

Geospace Technologies1,3

    9,500       131,385  

Independence Contract Drilling1

    134,400       522,816  

Matrix Service1,3,4

    53,700       502,095  

Newpark Resources1

    11,200       82,320  

North American Energy Partners

    50,000       220,000  

Pioneer Energy Services1,3

    215,400       441,570  

TerraVest Capital

    84,000       647,749  

Tesco Corporation1,3

    58,000       258,100  

Trican Well Service1

    53,300       149,197                                 6,824,456                   OIL, GAS & CONSUMABLE FUELS - 2.8%                

Ardmore Shipping

    182,700       1,489,005  

Cross Timbers Royalty Trust

    67,631       1,036,107  

Dorchester Minerals L.P.

    106,127       1,533,535  

Dorian LPG1

    50,000       409,000  

Hugoton Royalty Trust

    287,574       517,633  

Panhandle Oil and Gas Cl. A

    5,500       127,050  

Permian Basin Royalty Trust

    176,333       1,534,097  

Sabine Royalty Trust

    59,548       2,307,485  

San Juan Basin Royalty Trust

    143,407       976,602  
24 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       
June 30, 2017 (unaudited)   Schedule of Investments (continued)         SHARES     VALUE                         ENERGY (continued)                 OIL, GAS & CONSUMABLE FUELS (continued)                

StealthGas1

    229,664     $ 746,408                                 10,676,922       Total (Cost $20,962,860)             17,501,378                         FINANCIALS 11.6%                 BANKS - 2.3%                

Bank of N.T. Butterfield & Son

    43,810       1,493,921  

Blue Hills Bancorp

    50,000       895,000  

Bryn Mawr Bank

    25,000       1,062,500  

Caribbean Investment Holdings1

    735,647       126,954  

Chemung Financial

    31,000       1,267,280  

Fauquier Bankshares

    133,200       2,564,100  

Live Oak Bancshares

    30,900       747,780  

†Midway Investments1,5

    735,647       0  

Peapack-Gladstone Financial

    20,606       644,762                                 8,802,297                   CAPITAL MARKETS - 8.0%                

ASA Gold and Precious Metals

    171,150       2,000,743  

Canaccord Genuity Group

    224,100       921,077  

Diamond Hill Investment Group3,4

    3,584       714,650  

Dundee Corporation Cl. A1

    413,200       908,097  

EQT Holdings

    43,150       587,354  

Fiera Capital Cl. A

    78,000       827,036  

GAIN Capital Holdings

    25,000       155,750  

Gluskin Sheff + Associates

    67,400       870,566  

INTL FCStone1,3,4

    41,727       1,575,611  

JZ Capital Partners

    209,999       1,538,511  

Manning & Napier Cl. A

    136,600       594,210  

Medley Management Cl. A

    153,400       997,100  

MVC Capital3

    360,300       3,552,558  

OHA Investment

    154,620       196,367  

Pzena Investment Management Cl. A

    6,100       61,976  

Queen City Investments2

    948       1,256,100  

Silvercrest Asset Management Group Cl. A

    203,300       2,734,385  

Sprott

    1,414,533       2,486,995  

U.S. Global Investors Cl. A

    646,254       988,769  

Urbana Corporation

    237,600       646,767  

Value Line

    144,774       2,649,364  

Virtu Financial Cl. A

    107,800       1,902,670  

Warsaw Stock Exchange

    52,900       696,930  

Westaim Corporation1

    20,000       48,890  

Westwood Holdings Group3

    12,400       702,956  

ZAIS Group Holdings Cl. A1,3

    262,960       612,697                                 30,228,129                   CONSUMER FINANCE - 0.4%                

EZCORP Cl. A1,3,4

    201,000       1,547,700  

J.G. Wentworth Company Cl. A1,2

    135,000       28,350                                 1,576,050                   DIVERSIFIED FINANCIAL SERVICES - 0.1%                

Banca Finnat Euramerica

    568,000       240,034  

Waterloo Investment Holdings1,5

    806,207       241,862                                 481,896                   INSURANCE - 0.8%                

Hallmark Financial Services1,3,4

    114,000       1,284,780  

State Auto Financial

    59,264       1,524,863                                 2,809,643       Total (Cost $48,839,680)             43,898,015                         HEALTH CARE 14.9%                 BIOTECHNOLOGY - 4.7%                

Abeona Therapeutics1

    312,221       1,998,214  

Aquinox Pharmaceuticals1,3,4

    145,397       2,045,736  

ARCA biopharma1

    179,847       440,625  

BioCryst Pharmaceuticals1

    144,000       800,640  

Invitae Corporation1

    156,412       1,495,299  

Keryx Biopharmaceuticals1

    117,725       851,152  

Kindred Biosciences1

    126,000       1,083,600  

Knight Therapeutics1

    187,000       1,483,829  

Progenics Pharmaceuticals1

    6,500       44,135  

Sangamo Therapeutics1

    281,785       2,479,708  

Zafgen1

    332,491       1,167,043  

Zealand Pharma1

    199,700       4,002,988                                 17,892,969                   HEALTH CARE EQUIPMENT & SUPPLIES - 5.3%                

Analogic Corporation

    18,200       1,322,230  

Atrion Corporation3,4

    6,569       4,225,838  

Cerus Corporation1,3,4

    140,000       351,400  

CRH Medical1

    133,000       756,894  

Exactech1,3,4

    112,300       3,346,540  

Inogen1

    5,400       515,268  

Invacare Corporation3

    44,300       584,760  

LeMaitre Vascular

    5,000       156,100  

STRATEC Biomedical

    14,000       917,831  

Surmodics1

    151,992       4,278,575  

Syneron Medical1

    69,200       757,740  

TearLab Corporation1

    8,500       14,280  

Utah Medical Products

    36,200       2,620,880                                 19,848,336                   HEALTH CARE PROVIDERS & SERVICES - 3.1%                

Aceto Corporation

    79,600       1,229,820  

BioTelemetry1

    49,700       1,662,465  

Cross Country Healthcare1

    157,100       2,028,161  

Landauer

    30,400       1,589,920  

National Research Cl. A

    89,529       2,408,330  

PharMerica Corporation1

    40,000       1,050,000  

Psychemedics Corporation

    37,500       935,625  

U.S. Physical Therapy

    10,000       604,000                                 11,508,321                   HEALTH CARE TECHNOLOGY - 0.2%                

Connecture1

    20,000       12,358  

Vocera Communications1

    33,100       874,502                                 886,860                   PHARMACEUTICALS - 1.6%                

Agile Therapeutics1,3,4

    80,000       300,000  

Alcobra1

    745,055       834,462  

Flex Pharma1

    310,210       1,194,308  

Lipocine1

    355,404       1,428,724  

Theravance Biopharma1

    59,009       2,350,919                                 6,108,413       Total (Cost $38,115,232)             56,244,899                         INDUSTRIALS 21.1%                 AEROSPACE & DEFENSE - 0.7%                

Astronics Corporation1

    4,400       134,068  

Astronics Corporation Cl. B1,2

    660       19,965  

CPI Aerostructures1

    11,800       110,920  

FLYHT Aerospace Solutions1

    1,916,800       332,573  

Innovative Solutions and Support1

    142,828       628,443  
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 25
       

Royce Micro-Cap Trust

  Schedule of Investments (continued)         SHARES     VALUE                         INDUSTRIALS (continued)                 AEROSPACE & DEFENSE (continued)                

Mercury Systems1,3,4

    29,700     $ 1,250,073  

SIFCO Industries1

    45,800       304,570                                 2,780,612                   BUILDING PRODUCTS - 1.3%                

Burnham Holdings Cl. A2

    117,000       1,772,550  

DIRTT Environmental Solutions1

    171,000       903,262  

Insteel Industries

    44,200       1,457,274  

Patrick Industries1

    11,500       837,775                                 4,970,861                   COMMERCIAL SERVICES & SUPPLIES - 2.3%                

Atento1

    246,001       2,742,911  

CompX International Cl. A

    107,500       1,639,375  

Heritage-Crystal Clean1,3,4

    241,677       3,842,664  

Team1,3

    17,500       410,375                                 8,635,325                   CONSTRUCTION & ENGINEERING - 2.5%                

Aecon Group

    40,500       504,064  

Ameresco Cl. A1

    261,900       2,016,630  

IES Holdings1

    234,000       4,247,100  

Layne Christensen1,3,4

    50,000       439,500  

Northwest Pipe1,3,4

    61,600       1,001,616  

NV5 Global1,3,4

    27,400       1,164,500                                 9,373,410                   ELECTRICAL EQUIPMENT - 1.1%                

Encore Wire3

    4,100       175,070  

LSI Industries

    154,212       1,395,619  

Orion Energy Systems1

    170,000       217,600  

Powell Industries

    21,400       684,586  

Power Solutions International1,2,3,4

    21,100       176,185  

Preformed Line Products

    20,743       962,890  

Revolution Lighting Technologies1

    81,200       535,108                                 4,147,058                   INDUSTRIAL CONGLOMERATES - 1.0%                

Raven Industries3

    108,959       3,628,335                   MACHINERY - 8.3%                

Chart Industries1

    1,100       38,203  

CIRCOR International3

    56,900       3,378,722  

Columbus McKinnon

    1,500       38,130  

Eastern Company (The)

    39,750       1,194,487  

Exco Technologies

    118,200       973,455  

Foster (L.B.) Company1,3,4

    99,300       2,129,985  

FreightCar America

    81,000       1,408,590  

Global Brass and Copper Holdings

    7,600       232,180  

Graham Corporation3,4

    78,050       1,534,463  

Harsco Corporation1

    4,400       70,840  

Hurco Companies

    36,866       1,281,094  

Kadant

    53,500       4,023,200  

Kornit Digital1

    35,700       690,795  

Lindsay Corporation3

    29,400       2,623,950  

Luxfer Holdings ADR3

    59,712       763,716  

Lydall1

    1,800       93,060  

NN

    45,300       1,243,485  

Sun Hydraulics

    78,700       3,358,129  

Tennant Company

    36,600       2,701,080  

Titan International

    225,700       2,710,657  

Westport Fuel Systems1

    377,900       888,065                                 31,376,286                   MARINE - 1.0%                

Clarkson

    109,900       3,615,696                   PROFESSIONAL SERVICES - 1.4%                

Acacia Research1,3

    190,000       779,000  

BG Staffing

    2,400       41,712  

CBIZ1

    47,000       705,000  

Franklin Covey1

    40,100       773,930  

GP Strategies1

    7,600       200,640  

Heidrick & Struggles International

    46,300       1,007,025  

Kforce3

    4,700       92,120  

Resources Connection

    8,800       120,560  

RPX Corporation1

    100,000       1,395,000                                 5,114,987                   ROAD & RAIL - 0.6%                

Marten Transport

    3,300       90,420  

Patriot Transportation Holding1,3

    55,764       996,503  

Universal Logistics Holdings3,4

    77,600       1,164,000                                 2,250,923                   TRADING COMPANIES & DISTRIBUTORS - 0.9%                

Central Steel & Wire2

    788       433,400  

EnviroStar

    64,400       1,742,020  

Houston Wire & Cable1

    249,918       1,312,069                                 3,487,489       Total (Cost $60,718,126)             79,380,982                         INFORMATION TECHNOLOGY 19.9%                                   COMMUNICATIONS EQUIPMENT - 1.0%                

ADTRAN

    23,300       481,145  

Applied Optoelectronics1,3,4

    3,500       216,265  

CalAmp Corporation1

    3,100       63,023  

Clearfield1

    61,300       809,160  

EMCORE Corporation

    8,300       88,395  

Harmonic1

    147,000       771,750  

Oclaro1

    131,700       1,230,078  

PCTEL

    34,100       241,428                                 3,901,244                   ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 5.8%                

Airgain1

    3,500       49,630  

Bel Fuse Cl. A

    67,705       1,411,649  

ePlus1

    3,000       222,300  

Fabrinet1

    2,200       93,852  

FARO Technologies1,3

    81,700       3,088,260  

Firan Technology Group1

    25,000       83,475  

HollySys Automation Technologies

    62,900       1,044,769  

Inficon Holding

    3,420       1,685,212  

LRAD Corporation1

    853,456       1,442,341  

Mesa Laboratories3,4

    35,000       5,015,850  

Netlist1

    63,600       64,872  

Novanta1

    37,600       1,353,600  

Orbotech1,3,4

    92,500       3,017,350  

PC Connection

    43,716       1,182,955  

Perceptron1

    8,500       61,880  

Richardson Electronics

    316,900       1,891,893  

Rogers Corporation1,3

    600       65,172  

Vishay Precision Group1

    10,000       173,000                                 21,948,060                   INTERNET SOFTWARE & SERVICES - 3.7%                

Actua Corporation1

    36,876       518,108  

Care.com1,3,4

    181,787       2,744,984  
26 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       
June 30, 2017 (unaudited)   Schedule of Investments (continued)         SHARES     VALUE                         INFORMATION TECHNOLOGY (continued)                 INTERNET SOFTWARE & SERVICES (continued)                

comScore1,2

    64,195     $ 1,681,909  

IZEA1

    126,070       240,794  

MINDBODY Cl. A1

    38,900       1,058,080  

QuinStreet1

    525,550       2,191,543  

Reis

    25,000       531,250  

Solium Capital1

    309,700       2,342,811  

Stamps.com1

    14,500       2,245,687  

Support.com1

    105,600       247,104                                 13,802,270                   IT SERVICES - 0.6%                

Computer Task Group1,3

    150,838       843,184  

Hackett Group (The)

    27,700       429,350  

Innodata1

    437,275       765,231  

Virtusa Corporation1

    8,100       238,140                                 2,275,905                   SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 4.6%                

Amtech Systems1,3

    160,284       1,352,797  

Brooks Automation

    103,800       2,251,422  

CyberOptics Corporation1

    43,000       887,950  

FormFactor1

    22,869       283,576  

Intermolecular1

    240,000       223,200  

IXYS Corporation1

    18,800       309,260  

Kopin Corporation1

    242,200       898,562  

Kulicke & Soffa Industries1

    88,000       1,673,760  

MoSys1

    68,427       117,010  

Nanometrics1

    67,300       1,702,017  

NeoPhotonics Corporation1

    14,000       108,080  

Nova Measuring Instruments1

    73,400       1,621,406  

PDF Solutions1

    25,000       411,250  

Photronics1

    189,700       1,783,180  

Sigma Designs1

    89,000       520,650  

Silicon Motion Technology ADR

    34,100       1,644,643  

Ultra Clean Holdings1

    49,900       935,625  

Veeco Instruments1

    17,500       487,375  

Xcerra Corporation1

    11,300       110,401                                 17,322,164                   SOFTWARE - 2.9%                

Agilysys1

    170,587       1,726,341  

American Software Cl. A

    120,352       1,238,422  

BSQUARE Corporation1

    83,675       468,580  

Computer Modelling Group

    337,700       2,650,976  

Model N1

    166,693       2,217,017  

Monotype Imaging Holdings

    15,000       274,500  

PSI

    34,000       546,964  

RealNetworks1

    130,171       563,640  

Rubicon Project1

    92,200       473,908  

SeaChange International1

    284,200       755,972  

Varonis Systems1

    2,600       96,720                                 11,013,040                   TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.3%                

Intevac1

    293,400       3,256,740  

Kortek

    135,007       1,563,469                                 4,820,209       Total (Cost $62,452,717)             75,082,892                         MATERIALS 6.7%                 CHEMICALS - 2.2%                

Balchem Corporation

    11,775     915,035  

FutureFuel Corporation

    85,262       1,286,604  

LSB Industries1

    135,800       1,402,814  

Quaker Chemical3

    26,000       3,775,980  

Trecora Resources1

    89,600       1,008,000                                 8,388,433                   CONSTRUCTION MATERIALS - 0.8%                

Ash Grove Cement2

    7,600       2,014,076  

Monarch Cement2

    16,303       821,671  

U.S. Concrete1

    3,400       267,070                                 3,102,817                   CONTAINERS & PACKAGING - 0.3%                

UFP Technologies1

    36,445       1,031,394                   METALS & MINING - 3.4%                

Alamos Gold Cl. A

    186,044       1,319,868  

Ampco-Pittsburgh

    79,002       1,165,279  

Comstock Mining1

    1,875,000       342,750  

Haynes International3

    26,100       947,691  

Imdex1

    400,666       232,504  

MAG Silver1

    74,050       965,612  

Major Drilling Group International1

    850,357       5,567,189  

Olympic Steel

    35,000       681,800  

Pretium Resources1

    80,000       768,661  

Universal Stainless & Alloy Products1

    15,300       298,350  

Victoria Gold1

    890,000       398,057                                 12,687,761       Total (Cost $18,309,690)             25,210,405                         REAL ESTATE 4.1%                 EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.5%                

BRT Apartments1

    230,331       1,810,402                   REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.6%                

Altus Group

    87,000       1,880,483  

Forestar Group1,3

    44,000       754,600  

FRP Holdings1,3,4

    76,500       3,530,475  

Griffin Industrial Realty

    43,384       1,360,956  

Hopefluent Group Holdings

    1,400,000       478,773  

Marcus & Millichap1,3,4

    49,567       1,306,586  

RMR Group Cl. A

    37,100       1,804,915  

Tejon Ranch1,3,4

    115,162       2,376,944                                 13,493,732       Total (Cost $12,345,792)             15,304,134                         TELECOMMUNICATION SERVICES 0.2%                 DIVERSIFIED TELECOMMUNICATION SERVICES - 0.2%                

ORBCOMM1

    67,100       758,230       Total (Cost $570,215)             758,230                         UTILITIES 0.4%                 GAS UTILITIES - 0.1%                

Shizuoka Gas

    40,000       266,015                   INDEPENDENT POWER & RENEWABLE ELECTRICITY PRODUCER - 0.0%                

Alterra Power

    45,000       197,447                   WATER UTILITIES - 0.3%                

Global Water Resources

    106,000       1,049,400       Total (Cost $1,145,614)             1,512,862      
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 27
       
Royce Micro-Cap Trust   June 30, 2017 (unaudited)
  Schedule of Investments (continued)               VALUE                       MISCELLANEOUS6 4.2%                                     Total (Cost $15,862,541)           $ 15,944,179                       TOTAL COMMON STOCKS                   (Cost $340,041,529)             397,918,625                       REPURCHASE AGREEMENT 5.9%                 Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value
$22,318,223 (collateralized by obligations of various U.S. Government Agencies, 2.375% due
8/15/24, valued at $22,766,474)
  (Cost $22,318,000)             22,318,000                       TOTAL INVESTMENTS 111.4%                   (Cost $362,359,529)             420,236,625                       LIABILITIES LESS CASH AND OTHER ASSETS (11.4)%             (43,098,058 )                                   NET ASSETS 100.0%           $ 377,138,567    
New additions in 2017. 1 Non-income producing. 2
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.
3
All or a portion of these securities were pledged as collateral in connection with the Fund’ s revolving credit agreement at June 30, 2017. Total market value of pledged securities at June 30, 2017, was $71,646,333.
4
At June 30, 2017, a portion of these securities were rehypothecated in connection with the Fund’ s revolving credit agreement in the aggregate amount of $43,068,441.
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
Includes securities first acquired in 2017 and less than 1% of net assets.
     
Bold indicates the Fund’s 20 largest equity holdings in terms of June 30, 2017, market value.
     
TAX INFORMATION: The cost of total investments for Federal income tax purposes was $363,939,812. At June 30, 2017, net unrealized appreciation for all securities was $56,296,813, consisting of aggregate gross unrealized appreciation of $107,251,959 and aggregate gross unrealized depreciation of $50,955,146. The primary cause of the difference between book and tax basis cost is the timing of the recognition of losses on securities sold.
   
28 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       
Royce Micro-Cap Trust   June 30, 2017 (unaudited)     Statement of Assets and Liabilities   ASSETS:           Investments at value     $ 397,918,625     Repurchase agreements (at cost and value)       22,318,000     Cash and foreign currency       238,591     Receivable for investments sold       2,073,915     Receivable for dividends and interest       201,909     Prepaid expenses and other assets       25,599     Total Assets       422,776,639     LIABILITIES:           Revolving credit agreement       45,000,000     Payable for investments purchased       384,641     Payable for investment advisory fee       148,907     Payable for directors’ fees       24,804     Payable for interest expense       5,622     Accrued expenses       74,098     Total Liabilities       45,638,072     Net Assets     $ 377,138,567     ANALYSIS OF NET ASSETS:           Paid-in capital - $0.001 par value per share; 38,409,192 shares outstanding (150,000,000 shares authorized)     $ 322,651,287     Undistributed net investment income (loss)       (1,398,007 )   Accumulated net realized gain (loss) on investments and foreign currency       10,150,463     Net unrealized appreciation (depreciation) on investments and foreign currency       57,876,187     Quarterly distributions       (12,141,363 )   Net Assets (net asset value per share - $9.82)     $ 377,138,567     Investments at identified cost     $ 340,041,529    
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 29
       

Royce Micro-Cap Trust

  Statement of Changes in Net Assets
    SIX MONTHS ENDED             6/30/17             (UNAUDITED)   YEAR ENDED 12/31/16                     INVESTMENT OPERATIONS:                 Net investment income (loss)   $ 589,423     $ 1,040,381     Net realized gain (loss) on investments and foreign currency     9,012,314       17,298,523     Net change in unrealized appreciation (depreciation) on investments and foreign currency     10,742,788       46,017,634     Net increase (decrease) in net assets from investment operations     20,344,525       64,356,538     DISTRIBUTIONS:                 Net investment income     (485,655 )1     (2,974,373 )   Net realized gain on investments and foreign currency     (10,927,226 )1     (20,650,513 )   Return of capital     (728,482 )1         Total distributions     (12,141,363 )     (23,624,886 )   CAPITAL STOCK TRANSACTIONS:                 Reinvestment of distributions     5,234,652       10,562,009     Total capital stock transactions     5,234,652       10,562,009     Net Increase (Decrease) In Net Assets     13,437,814       51,293,661     NET ASSETS:                   Beginning of period     363,700,753       312,407,092     End of period (including undistributed net investment income (loss) of $(1,398,007) at 6/30/17 and $(1,987,430) at 12/31/16)   $ 377,138,567     $ 363,700,753    
1 Amounts are subject to change and recharacterization at year end.
30 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       
Royce Micro-Cap Trust   Six Months Ended June 30, 2017 (unaudited)
  Statement of Operations
INVESTMENT INCOME:         INCOME:         Dividends   $ 2,218,874     Foreign withholding tax     (55,348 )   Interest     15,462     Rehypothecation income     28,765     Total income     2,207,753     EXPENSES:           Investment advisory fees     903,122     Interest expense     471,847     Stockholder reports     64,884     Administrative and office facilities     44,726     Directors’ fees     42,314     Custody and transfer agent fees     41,301     Professional fees     28,058     Other expenses     22,126     Total expenses     1,618,378     Compensating balance credits     (48 )   Net expenses     1,618,330     Net investment income (loss)     589,423     REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:         NET REALIZED GAIN (LOSS):           Investments     9,003,885     Foreign currency transactions     8,429     NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):           Investments and foreign currency translations     10,742,220     Other assets and liabilities denominated in foreign currency     568     Net realized and unrealized gain (loss) on investments and foreign currency     19,755,102     NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS $   20,344,525    
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 31
       
Royce Micro-Cap Trust   Six Months Ended June 30, 2017 (unaudited)
  Statement of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES:         Net increase (decrease) in net assets from investment operations   $ 20,344,525     Adjustments to reconcile net increase (decrease) in net assets from investment operations to
net cash provided by operating activities:
         

Purchases of long-term investments

    (33,255,508 )  

Proceeds from sales and maturities of long-term investments

    18,367,371    

Net purchases, sales and maturities of short-term investments

    21,154,000    

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

    314,850    

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

    (26,041 )  

Net change in unrealized appreciation (depreciation) on investments

    (10,742,220 )  

Net realized gain (loss) on investments and foreign currency

    (9,012,314 )   Net cash provided by operating activities     7,144,663     CASH FLOWS FROM FINANCING ACTIVITIES:         Net increase (decrease) in revolving credit agreement         Distributions     (12,141,363 )   Reinvestment of distributions     5,234,652     Net cash used for financing activities     (6,906,711 )   INCREASE (DECREASE) IN CASH:     237,952     Cash and foreign currency at beginning of period     639     Cash and foreign currency at end of period   $ 238,591    
32 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       

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.
    SIX MONTHS   YEARS ENDED                   ENDED 6/30/17                                             (UNAUDITED)   12/31/16   12/31/15   12/31/14   12/31/13   12/31/12   Net Asset Value, Beginning of Period   $ 9.63     $ 8.59     $ 11.33     $ 14.12     $ 10.93     $ 9.86     INVESTMENT OPERATIONS:                                                 Net investment income (loss)     0.02       0.03       0.03       (0.01 )     0.01       0.15     Net realized and unrealized gain (loss) on investments and
foreign currency
    0.51       1.70       (1.42 )     0.25       4.64       1.58     Total investment operations     0.53       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

    0.53       1.73       (1.39 )     0.24       4.65       1.62     DISTRIBUTIONS TO COMMON STOCKHOLDERS:                                                 Net investment income     (0.01 )1     (0.08 )     (0.01 )     (0.04 )     (0.03 )     (0.08 )   Net realized gain on investments and foreign currency     (0.29 )1     (0.56 )     (1.25 )     (2.86 )     (1.35 )     (0.43 )   Return of capital     (0.02 )1                                 Total distributions to Common Stockholders     (0.32 )     (0.64 )     (1.26 )     (2.90 )     (1.38 )     (0.51 )   CAPITAL STOCK TRANSACTIONS:                                                 Effect of reinvestment of distributions by Common Stockholders     (0.02 )     (0.05 )     (0.09 )     (0.13 )     (0.08 )     (0.04 )   Total capital stock transactions     (0.02 )     (0.05 )     (0.09 )     (0.13 )     (0.08 )     (0.04 )   Net Asset Value, End of Period   $ 9.82     $ 9.63     $ 8.59     $ 11.33     $ 14.12     $ 10.93     Market Value, End of Period   $ 8.65     $ 8.16     $ 7.26     $ 10.08     $ 12.61     $ 9.45     TOTAL RETURN:2                                                 Net Asset Value     5.93 %3     21.98 %     (11.64 )%     3.46 %     44.66 %     17.23 %   Market Value     10.12 %3     22.30 %     (16.06 )%     3.06 %     49.42 %     13.95 %   RATIOS BASED ON AVERAGE NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS:                     Investment advisory fee expense4     0.50 %5     0.87 %     0.93 %     0.93 %     0.82 %     1.12 %   Other operating expenses     0.39 %5     0.39 %     0.35 %     0.25 %     0.29 %     0.18 %   Total expenses (net)6     0.89 %5     1.26 %     1.28 %     1.18 %     1.11 %     1.30 %   Expenses net of fee waivers and excluding interest expense     0.63 %5     1.02 %     1.08 %     1.05 %     0.96 %     1.27 %   Expenses prior to fee waivers and balance credits     0.89 %5     1.26 %     1.28 %     1.18 %     1.11 %     1.32 %   Expenses prior to fee waivers     0.89 %5     1.26 %     1.28 %     1.18 %     1.11 %     1.32 %   Net investment income (loss)     0.32 %5     0.32 %     0.26 %     (0.09 )%     0.08 %     1.46 %   SUPPLEMENTAL DATA:                                                 Net Assets Applicable to Common Stockholders,
End of Period (in thousands)
  $ 377,139     $ 363,701     $ 312,407     $ 387,488     $ 433,121     $ 318,545     Portfolio Turnover Rate     5 %     26 %     39 %     41 %     29 %     28 %   REVOLVING CREDIT AGREEMENT:                                                 Asset coverage     938 %     908 %     794 %     746 %     1062 %     808 %   Asset coverage per $1,000   $ 9,381     $ 9,082     $ 7,942     $ 7,458     $ 10,625     $ 8,079    
1 Amounts are subject to change and recharacterization at year end. 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 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. 5 Annualized 6 Expense ratio based on total average net assets including liquidation value of Preferred Stock was 1.10% for the year ended December 31, 2012.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 33
       

Royce Micro-Cap Trust

Notes to Financial Statements (unaudited)

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 June 30, 2017. 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   $387,032,029     $10,644,734     $241,862     $397,918,625     Cash Equivalents       22,318,000         22,318,000    
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 six months ended June 30, 2017, securities valued at $2,043,671 were transferred from Level 1 to Level 2 and securities valued at $19,504,834 were transferred from Level 2 to Level 1 within the fair value hierarchy.

34 | 2017 Semiannual Report to Stockholders


       

Royce Micro-Cap Trust

Notes to Financial Statements (unaudited) (continued)

VALUATION OF INVESTMENTS (continued):

Level 3 Reconciliation:
    BALANCE AS OF 12/31/16   PURCHASES   REALIZED AND UNREALIZED
GAIN (LOSS)1
  BALANCE AS OF 6/30/17   Common Stocks   $241,862   $0   $–   $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
6/30/17
  VALUATION TECHNIQUE(S)   UNOBSERVABLE INPUT(S)   RANGE AVERAGE   IMPACT TO VALUATION FROM
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 June 30, 2017 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.

2017 Semiannual Report to Stockholders | 35


       

Royce Micro-Cap Trust

Notes to Financial Statements (unaudited) (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 628,862 and 1,405,544 shares of Common Stock as reinvestment of distributions for the six months ended June 30, 2017 and the year ended December 31, 2016, 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 June 30, 2017, the Fund has outstanding borrowings of $45,000,000. During the six months ended June 30, 2017, the Fund borrowed an average daily balance of $45,000,000 at a weighted average borrowing cost of 2.09%. The maximum amount outstanding during the six months ended June 30, 2017 was $45,000,000. As of June 30, 2017, the aggregate value of rehypothecated securities was $43,068,441. During the six months ended June 30, 2017, the Fund earned $28,765 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.

36 | 2017 Semiannual Report to Stockholders


       

Royce Micro-Cap Trust

Notes to Financial Statements (unaudited) (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 six rolling 36-month periods ended June 2017, the Fund’s investment performance ranged from 13% to 15% below the investment performance of the Russell 2000. Accordingly, the net investment advisory fee consisted of a Basic Fee of $1,806,242 and a net downward adjustment of $903,120 for the performance of the Fund relative to that of the Russell 2000. For the six months ended June 30, 2017, the Fund expensed Royce investment advisory fees totaling $903,122.
  Purchases and Sales of Investment Securities:
For the six months ended June 30, 2017, the costs of purchases and proceeds from sales of investment securities, other than short-term securities, amounted to $33,365,684 and $20,263,468, 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 six months ended June 30, 2017, were as follows:

COST OF PURCHASES   PROCEEDS FROM SALES   REALIZED GAIN (LOSS)   $1,007,283   $–   $–  

2017 Semiannual Report to Stockholders | 37


       
MANAGER’S DISCUSSION   Royce Value Trust (RVT)
Chuck Royce
FUND PERFORMANCE We were very pleased with Royce Value Trust’s (“RVT”) first-half results. Strong on both an absolute and relative basis, performance was all the more impressive in a semiannual period that saw value underperform growth and was thus not entirely conducive to the Fund’s multiple investment theme approach. RVT advanced 7.3% on a net asset value (“NAV”) basis and 13.1% on a market price basis for the year-to-date period ended June 30, 2017, in both cases outperforming its unleveraged small-cap benchmarks, the Russell 2000 and S&P SmallCap 600 Indexes, which had respective increases of 5.0% and 2.8% for the same period.     For the first quarter, RVT gained 3.8% based on NAV and 6.5% on market price, outpacing the Russell 2000, which was up 2.5%, and the S&P SmallCap 600, which rose 1.0%, for the same period. The Fund’s relative advantage extended to the second quarter, when it climbed 3.4% on an NAV basis and 6.2% on a market price basis versus 2.5% for the Russell 2000 and 1.7% for the S&P SmallCap 600. RVT beat both of its benchmarks on an NAV basis for the one-, 30-year, and since inception (11/26/86) periods ended June 30, 2017. The Fund added advantages over the Russell 2000 for the 20- and 25-year periods ended June 30, 2017 based on both NAV and market price. RVT’s average annual NAV total return for the since inception period was 10.6%, all under the management of Chuck Royce.   WHAT WORKED... AND WHAT DIDN’T Seven of the Fund’s 11 equity sectors finished the first half in the black, two were essentially flat, and two more detracted from performance. Information Technology and Industrials made the biggest positive impacts. At the industry level, a group from each sector dominated returns in a similar fashion—the electronic equipment, instruments & components group (Information Technology) and machinery stocks (Industrials).     The Fund’s two top contributors at the position level were holdovers from 2016’s top performers. Laser diode and equipment maker Coherent took the top spot, as it did in 2016, galvanized by ongoing sales and earnings growth driven by vibrant demand for ramped up OLED (organic light-emitting diode) capacity. Cognex Corporation is the market leader in machine vision technology, which captures and analyzes visual information to automate tasks that previously relied on human eyesight and is thus a major driver of industrial and process automation. The trend toward automation continues to drive broad order strength for its machine vision systems. Cognex also supplemented its robust technology portfolio with three small acquisitions that should enhance its capabilities in emerging areas such as 3D and adaptive learning. Another top contributor, The Advisory Board specializes in performance improvement software and solutions to the healthcare and higher education industries. Among 2016’s top detractors, it rebounded soundly in the first half as an activist investor disclosed a large equity stake, which encouraged other investors.
    Of the two portfolio sectors that detracted from first-half performance, only Energy had a significant negative impact. Net losses for Consumer Discretionary were modest, a pattern that was mirrored at the industry level. The energy equipment & services group (Energy) was by far the portfolio’s biggest detractor, followed by an appreciably lower negative impact for specialty retail (Consumer Discretionary), which continued to struggle with secular shifts in consumer spending and behavior. The top detractor at the position level was Era Group, which provides helicopter transportation services and personnel primarily to and from offshore oil drilling rigs and platforms. The cratering price of oil created challenges for its business that were reflected in disappointing earnings. Liking the long-term prospects for its niche business, we held shares at the end of June. Toronto-based Dundee Corporation, which is involved in wealth management, real estate, and natural resources, experienced losses in mining- and resource-based activities that put downward pressure on its shares.
    Relative to the Russell 2000, RVT benefited most from savvy stock picking in three sectors—Financials, where capital markets stood out, Industrials, where machinery and professional services provided a sizable relative edge, and Information Technology, where electronic equipment, instruments & components outperformed. Conversely, poor stock selection in specialty retail and an overweight in distributors created a disadvantage in Consumer Discretionary while our underweights in biotechnology (Health Care) and, to a lesser extent, Utilities also hurt relative results.

Top Contributors to Performance       Year-to-Date Through 6/30/17 (%)1               Coherent   0.76     Cognex Corporation   0.34     Advisory Board (The)   0.28     MarketAxess Holdings   0.27     Community Health Systems   0.25     1 Includes dividends      
Top Detractors from Performance       Year-to-Date Through 6/30/17 (%)2               Era Group   -0.30     Dundee Corporation Cl. A   -0.18     Wesco Aircraft Holdings   -0.18     Monro Muffler Brake   -0.17     Core-Mark Holding Company   -0.17     2 Net of dividends      
CURRENT POSITIONING AND OUTLOOK We think that RVT’s portfolio remains well-positioned to benefit from a cyclical upswing, with more than 70% of its net assets invested in Industrials, Information Technology, Financials, and Materials at the end of June. So while a correction would not be surprising, we are optimistic that the expanding rate of global growth can help small-cap companies, especially those with growing earnings, to excel. The message that we receive from the companies we speak to each day remains positive. With order books continuing to fill up, the management teams remain confident about their business, which in turn gives us confidence in the long-term prospects for RVT’s multi-themed core approach.
38 | 2017 Semiannual Report to Stockholders
       
PERFORMANCE AND PORTFOLIO REVIEW   SYMBOLS MARKET PRICE RVT NAV XRVTX
  Performance
Average Annual Total Return (%) Through 6/30/17
    JAN-JUN 20171   1-YR   3-YR   5-YR   10-YR   15-YR   20-YR   25-YR   30-YR   SINCE INCEPTION (11/26/86)   RVT (NAV)   7.29   25.76   6.95   13.38   5.56   8.77   9.52   10.81   10.47   10.63   1 Not Annualized                          
  Market Price Performance History Since Inception (11/26/86)
Cumulative Performance of Investment through 6/30/171
    1-YR   5-YR   10-YR   15-YR   20-YR   SINCE INCEPTION (11/26/86)   RVT   33.8%   92.2%   55.2%   215.6%   549.8%   1746.1%  

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               Coherent   1.7     HEICO Corporation   1.4     Cognex Corporation   1.3     Quaker Chemical   1.2     E-L Financial   1.0     Copart   1.0     Ash Grove Cement Cl. B   1.0     Nautilus   1.0     ManpowerGroup   0.9     RBC Bearings   0.9    
  Portfolio Sector Breakdown       % of Net Assets               Industrials   30.6     Information Technology   17.9     Financials   14.9     Consumer Discretionary   11.0     Materials   7.5     Health Care   5.7     Energy   4.1     Real Estate   3.0     Consumer Staples   2.2     Telecommunication Services   0.6     Utilities   0.1     Miscellaneous   2.2     Cash and Cash Equivalents, Net of
Outstanding Line of Credit
  0.2    
  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   $1,361 million     Number of Holdings   448     Turnover Rate   8%     Net Asset Value   $16.37     Market Price   $14.59     Average Market Capitalization1   $1,590 million     Weighted Average P/E Ratio2,3   21.3x     Weighted Average P/B Ratio2   2.2x     Active Share4   89%     U.S. Investments (% of Net Assets)   82.3%     Non-U.S. Investments (% of Net Assets)   17.5%     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 (16% of portfolio holdings as of 6/30/17).
4
Active Share is the sum of the absolute values of the different weightings of each holding in the Fund versus each holding in the benchmark, divided by two.

Important Performance and 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 above, the sum of all contributors to, and all detractors from, performance for all securities in the portfolio would approximate the Fund’s year-to date performance for 2017.

2017 Semiannual Report to Stockholders | 39 
       

Royce Value Trust

  Schedule of Investments               Common Stocks – 99.8%                   SHARES       VALUE                     CONSUMER DISCRETIONARY 11.0%               AUTO COMPONENTS - 1.4%              

Cooper Tire & Rubber

  86,700     $ 3,129,870  

Gentex Corporation

  222,170       4,214,565  

LCI Industries

  74,016       7,579,238  

Sebang Global Battery

  28,500       990,146  

Standard Motor Products

  50,391       2,631,418                             18,545,237                 AUTOMOBILES - 0.7%              

Thor Industries1

  91,310       9,543,721                 DISTRIBUTORS - 0.8%              

Core-Mark Holding Company

  220,900       7,302,954  

Fenix Parts2,3

  255,000       107,355  

Uni-Select

  30,200       729,383  

Weyco Group

  97,992       2,732,017                             10,871,709                 DIVERSIFIED CONSUMER SERVICES - 0.8%              

Adtalem Global Education3

  52,054       1,975,449  

American Public Education3

  42,400       1,002,760  

Cambium Learning Group3

  100,000       507,000  

Collectors Universe

  50,000       1,242,500  

H&R Block

  8,000       247,280  

Liberty Tax Cl. A

  151,573       1,962,871  

Lincoln Educational Services3

  330,600       1,024,860  

Regis Corporation3

  40,000       410,800  

Universal Technical Institute3

  504,032       1,799,394                             10,172,914                 HOTELS, RESTAURANTS & LEISURE - 0.4%              

Biglari Holdings3

  1,500       599,610  

Century Casinos3

  222,360       1,638,793  

Lindblad Expeditions Holdings3

  207,600       2,179,800  

Rank Group

  400,000       1,235,764  

Zoe’s Kitchen3

  15,000       178,650                             5,832,617                 HOUSEHOLD DURABLES - 2.3%              

AV Homes3

  66,100       1,325,305  

Cavco Industries3

  14,700       1,905,855  

Ethan Allen Interiors

  231,000       7,461,300  

Flexsteel Industries

  13,900       752,129  

Mohawk Industries1,3,4

  22,400       5,413,856  

Natuzzi ADR3

  2,096,300       5,555,195  

PICO Holdings3

  409,400       7,164,500  

Samson Holding

  2,500,000       204,932  

Stanley Furniture5

  912,235       1,030,826                             30,813,898                 INTERNET & DIRECT MARKETING RETAIL - 0.5%              

CafePress 3

  110,000       284,900  

FTD Companies3

  298,014       5,960,280                             6,245,180                 LEISURE PRODUCTS - 1.1%              

Character Group

  91,500       575,015  

MCBC Holdings3

  84,500       1,651,975  

Nautilus3

  677,500       12,974,125                             15,201,115                 MEDIA - 0.4%              

E.W. Scripps Company Cl. A1,3,4

  64,460       1,148,033  

Entravision Communications Cl. A

  108,200       714,120  

Global Eagle Entertainment3

  110,000       391,600  

Gray Television3

  50,000       685,000  

New Media Investment Group

  60,100       810,148  

Pico Far East Holdings

  3,484,400       1,459,374  

T4F Entretenimento

  150,000       278,457  

Technicolor

  120,000       523,287                             6,010,019                 MULTILINE RETAIL - 0.0%              

New World Department Store China3

  1,447,500       357,822                 SPECIALTY RETAIL - 1.3%              

AutoCanada

  78,800       1,159,396  

Barnes & Noble

  47,000       357,200  

Barnes & Noble Education3

  20,000       212,600  

Buckle (The)1

  36,115       642,847  

Byggmax Group

  70,000       508,920  

Caleres 1

  132,300       3,675,294  

Container Store Group (The)1,3,4

  158,200       936,544  

Destination Maternity3

  557,967       1,807,813  

Haverty Furniture

  23,700       594,870  

I.T

  827,000       407,809  

Monro Muffler Brake

  111,500       4,655,125  

Oriental Watch Holdings

  967,900       210,751  

Topps Tiles

  750,000       805,891  

TravelCenters of America LLC3

  92,500       379,250  

West Marine

  131,100       1,684,635                             18,038,945                 TEXTILES, APPAREL & LUXURY GOODS - 1.3%              

Crown Crafts

  97,741       674,413  

Culp

  29,400       955,500  

Deckers Outdoor3

  14,920       1,018,439  

J.G. Boswell Company2

  3,940       2,588,580  

Movado Group

  67,261       1,698,341  

Wolverine World Wide

  360,200       10,089,202  

YGM Trading

  1,082,600       1,006,689                             18,031,164     Total (Cost $130,786,940)           149,664,341       CONSUMER STAPLES 2.2%               BEVERAGES - 0.2%              

Compania Cervecerias Unidas ADR1

  99,500       2,610,880                 FOOD & STAPLES RETAILING - 0.0%              

Conviviality

  90,000       361,039                 FOOD PRODUCTS - 1.8%              

AGT Food and Ingredients

  9,000       161,567  

Cal-Maine Foods3

  84,316       3,338,913  

Farmer Bros.3

  54,700       1,654,675  

Hilton Food Group

  75,000       720,906  

Industrias Bachoco ADR

  43,495       2,521,840  

John B. Sanfilippo & Son

  17,200       1,085,492  

Lancaster Colony

  8,200       1,005,484  

Sanderson Farms

  15,000       1,734,750  

Seneca Foods Cl. A3

  147,605       4,583,135  

Seneca Foods Cl. B3

  13,840       498,240  

SunOpta 1,3,4

  187,459       1,912,082  

Tootsie Roll Industries1

  155,308       5,412,484                             24,629,568                 HOUSEHOLD PRODUCTS - 0.0%              

Central Garden & Pet3

  10,300       327,437                 PERSONAL PRODUCTS - 0.2%              

Inter Parfums

  63,730       2,335,705     Total (Cost $23,077,724)           30,264,629    
40 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       
June 30, 2017 (unaudited)
  Schedule of Investments (continued)                                   SHARES       VALUE                     ENERGY 4.1%               ENERGY EQUIPMENT & SERVICES - 3.1%              

CARBO Ceramics1,3,4

  48,000     $ 328,800  

Diamond Offshore Drilling1,3,4

  189,000       2,046,870  

Era Group3

  535,771       5,068,394  

Forum Energy Technologies3

  118,654       1,851,002  

Frank’s International1,4

  108,600       900,294  

Helmerich & Payne1,4

  89,000       4,836,260  

ION Geophysical1,3,4

  71,880       312,678  

Oil States International3

  65,833       1,787,366  

Pason Systems

  503,480       7,508,716  

Pioneer Energy Services3

  138,100       283,105  

Precision Drilling3

  73,100       249,271  

SEACOR Holdings3

  150,469       5,161,087  

TGS-NOPEC Geophysical

  425,870       8,727,816  

Trican Well Service3

  944,000       2,642,443                             41,704,102                 OIL, GAS & CONSUMABLE FUELS - 1.0%              

Ardmore Shipping

  61,600       502,040  

Dorchester Minerals L.P.

  177,172       2,560,135  

Dorian LPG3

  184,034       1,505,398  

Green Plains

  50,000       1,027,500  

Hallador Energy

  21,000       163,170  

Hargreaves Services

  57,683       252,998  

New Zealand Refining

  310,000       554,290  

San Juan Basin Royalty Trust

  320,352       2,181,597  

World Fuel Services

  110,800       4,260,260  

WPX Energy3

  110,000       1,062,600                             14,069,988     Total (Cost $69,549,196)           55,774,090       FINANCIALS 14.9%               BANKS - 2.4%              

Banca Sistema

  200,000       539,095  

Bank of N.T. Butterfield & Son

  178,416       6,083,986  

Blue Hills Bancorp

  54,080       968,032  

Canadian Western Bank

  279,500       5,901,226  

Farmers & Merchants Bank of Long Beach2

  1,080       8,262,000  

Fauquier Bankshares

  160,800       3,095,400  

First Citizens BancShares Cl. A

  14,676       5,469,745  

Webster Financial

  40,300       2,104,466                             32,423,950                 CAPITAL MARKETS - 8.0%              

Ares Management L.P.

  366,300       6,593,400  

Artisan Partners Asset Management Cl. A

  270,500       8,304,350  

ASA Gold and Precious Metals

  199,821       2,335,908  

Ashmore Group

  1,354,000       6,228,741  

Associated Capital Group Cl. A1

  20,200       686,800  

Citadel Capital3

  8,549,921       377,480  

Cowen Group3

  62,706       1,018,973  

Dundee Corporation Cl. A3

  1,079,900       2,373,315  

Edmond de Rothschild (Suisse)

  153       2,608,770  

Federated Investors Cl. B

  108,640       3,069,080  

Gluskin Sheff + Associates

  57,600       743,985  

Houlihan Lokey Cl. A

  91,100       3,179,390  

Jupiter Fund Management

  230,000       1,512,795  

KKR & Co. L.P.

  24,100       448,260  

Lazard Cl. A

  99,535       4,611,457  

Manning & Napier Cl. A

  395,692       1,721,260  

MarketAxess Holdings

  56,600       11,382,260  

Medley Management Cl. A1,4

  109,500       711,750  

Morningstar

  84,600       6,627,564  

mutares

  39,266       609,031  

MVC Capital

  324,200       3,196,612  

Oaktree Capital Group LLC Cl. A

  101,100       4,711,260  

Rothschild & Co

  216,893       7,917,268  

SEI Investments

  185,600       9,981,568  

Sprott

  1,927,000       3,388,001  

TMX Group

  40,700       2,214,522  

U.S. Global Investors Cl. A

  520,551       796,443  

Value Partners Group

  5,453,000       4,965,876  

Virtu Financial Cl. A

  101,200       1,786,180  

Virtus Investment Partners

  3,930       436,034  

Westwood Holdings Group

  49,073       2,781,948  

ZAIS Group Holdings Cl. A1,3,4

  492,300       1,147,059                             108,467,340                 CONSUMER FINANCE - 0.1%              

Bajaj Finance

  55,000       1,168,752  

Currency Exchange International3

  30,000       608,421                             1,777,173                 DIVERSIFIED FINANCIAL SERVICES - 0.1%              

First Pacific

  1,020,000       752,512  

Waterloo Investment Holdings3,6

  2,973,544       892,063                             1,644,575                 INSURANCE - 2.7%              

Alleghany Corporation3

  709       421,713  

Atlas Financial Holdings3

  48,900       728,610  

E-L Financial

  21,500       14,009,485  

Erie Indemnity Cl. A

  25,000       3,126,750  

Independence Holding Company

  314,523       6,431,995  

MBIA 3

  942,400       8,886,832  

ProAssurance Corporation

  17,139       1,042,051  

RLI Corp.

  46,300       2,528,906  

WMIH 3

  77,742       97,178                             37,273,520                 INVESTMENT COMPANIES - 0.2%              

RIT Capital Partners

  130,500       3,231,124                 THRIFTS & MORTGAGE FINANCE - 1.4%              

BofI Holding1,3,4

  16,300       386,636  

Genworth MI Canada

  239,395       6,586,685  

Timberland Bancorp5

  444,200       11,224,934  

Vestin Realty Mortgage II2,3

  53       117,130                             18,315,385     Total (Cost $173,007,388)           203,133,067       HEALTH CARE 5.7%               BIOTECHNOLOGY - 1.1%              

Keryx Biopharmaceuticals1,3,4

  139,000       1,004,970  

Novavax 1,3,4

  550,000       632,500  

Sangamo Therapeutics3

  469,315       4,129,972  

Zealand Pharma3

  479,607       9,613,725                             15,381,167                 HEALTH CARE EQUIPMENT & SUPPLIES - 2.0%              

Analogic Corporation

  53,735       3,903,848  

Atrion Corporation

  15,750       10,131,975  

Cerus Corporation3

  108,000       271,080  

Hill-Rom Holdings

  5,000       398,050  

Integer Holdings3

  42,400       1,833,800  
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 41
       

Royce Value Trust

  Schedule of Investments (continued)                                   SHARES       VALUE                     HEALTH CARE (continued)               HEALTH CARE EQUIPMENT & SUPPLIES (continued)              

Invacare Corporation

  38,900     $ 513,480  

Masimo Corporation3

  50,000       4,559,000  

Neogen Corporation3

  16,800       1,161,048  

Surmodics 3

  138,500       3,898,775                             26,671,056                 HEALTH CARE PROVIDERS & SERVICES - 1.0%              

Aceto Corporation

  18,800       290,460  

AMN Healthcare Services3

  74,300       2,901,415  

Community Health Systems3

  790,000       7,868,400  

Landauer

  50,000       2,615,000                             13,675,275                 HEALTH CARE TECHNOLOGY - 0.6%              

†athenahealth1,3,4

  32,500       4,567,875  

Cegedim 3

  10,000       347,213  

Medidata Solutions3

  50,000       3,910,000                             8,825,088                 LIFE SCIENCES TOOLS & SERVICES - 0.9%              

Bio-Rad Laboratories Cl. A3

  26,998       6,109,917  

Bio-Techne

  46,243       5,433,553  

Dyadic International2,3

  75,000       101,250                             11,644,720                 PHARMACEUTICALS - 0.1%              

Intra-Cellular Therapies3

  30,000       372,600  

Theravance Biopharma3

  34,291       1,366,153                             1,738,753     Total (Cost $49,830,571)           77,936,059       INDUSTRIALS 30.6%               AEROSPACE & DEFENSE - 2.7%              

Austal

  688,670       968,640  

Ducommun 3

  117,200       3,701,176  

HEICO Corporation

  175,422       12,602,316  

HEICO Corporation Cl. A

  101,010       6,267,671  

Magellan Aerospace

  182,779       2,852,751  

Mercury Systems3

  25,400       1,069,086  

Teledyne Technologies3

  20,600       2,629,590  

Wesco Aircraft Holdings3

  588,000       6,379,800                             36,471,030                 AIR FREIGHT & LOGISTICS - 1.8%              

Expeditors International of Washington

  158,900       8,974,672  

Forward Air

  179,750       9,577,080  

Hub Group Cl. A1,3

  149,400       5,729,490                             24,281,242                 BUILDING PRODUCTS - 0.6%              

American Woodmark3

  17,100       1,633,905  

Apogee Enterprises1

  48,700       2,768,108  

Burnham Holdings Cl. B2

  36,000       545,400  

DIRTT Environmental Solutions3

  65,000       343,345  

Epwin Group

  70,000       100,289  

Insteel Industries1

  79,380       2,617,159  

Patrick Industries3

  9,850       717,572                             8,725,778                 COMMERCIAL SERVICES & SUPPLIES - 2.7%              

Atento 3

  271,200       3,023,880  

CECO Environmental

  99,028       909,077  

CompX International Cl. A

  211,100       3,219,275  

Copart3

  439,920       13,985,057  

Heritage-Crystal Clean3

  152,527       2,425,179  

Kimball International Cl. B

  286,180       4,776,344  

Mobile Mini

  105,000       3,134,250  

Steelcase Cl. A

  256,260       3,587,640  

UniFirst Corporation

  13,370       1,881,159                             36,941,861                 CONSTRUCTION & ENGINEERING - 3.5%              

Aecon Group

  34,500       429,388  

Ameresco Cl. A3

  55,000       423,500  

Comfort Systems USA

  48,100       1,784,510  

EMCOR Group1

  121,300       7,930,594  

IES Holdings3

  594,244       10,785,528  

Jacobs Engineering Group

  164,900       8,968,911  

KBR

  326,000       4,961,720  

Northwest Pipe3

  20,000       325,200  

NV5 Global3

  23,500       998,750  

Sterling Construction1,3

  122,300       1,598,461  

Valmont Industries1

  65,145       9,745,692                             47,952,254                 ELECTRICAL EQUIPMENT - 0.7%              

Global Power Equipment Group2,3

  631,820       2,021,824  

Powell Industries

  94,500       3,023,055  

Preformed Line Products

  91,600       4,252,072                             9,296,951                 INDUSTRIAL CONGLOMERATES - 0.6%              

A. Soriano

  2,791,000       348,460  

Raven Industries

  251,725       8,382,443                             8,730,903                 MACHINERY - 11.2%              

Chen Hsong Holdings

  1,159,000       317,679  

China Metal International Holdings

  554,524       206,683  

CIRCOR International

  101,384       6,020,182  

Colfax Corporation3

  77,242       3,041,017  

Deutz

  115,000       969,736  

Donaldson Company

  193,559       8,814,677  

Exco Technologies

  205,700       1,694,075  

Franklin Electric

  104,600       4,330,440  

Graco

  89,276       9,756,081  

Greenbrier Companies (The)

  46,800       2,164,500  

Hurco Companies

  25,952       901,832  

Hyster-Yale Materials Handling Cl. A

  10,000       702,500  

IDEX Corporation

  67,400       7,616,874  

John Bean Technologies

  68,626       6,725,348  

Kadant

  42,200       3,173,440  

Kennametal

  160,100       5,990,942  

Lincoln Electric Holdings

  61,360       5,650,642  

Lindsay Corporation1

  80,000       7,140,000  

Luxfer Holdings ADR

  28,100       359,399  

Lydall 1,3

  55,480       2,868,316  

NN

  308,700       8,473,815  

Nordson Corporation

  24,296       2,947,591  

Proto Labs3

  10,000       672,500  

RBC Bearings3

  123,700       12,587,712  

Sarine Technologies

  327,500       366,334  

Sun Hydraulics

  286,318       12,217,189  

†Supreme Industries Cl. A1

  141,300       2,324,385  

Tennant Company

  111,900       8,258,220  

Titan International

  173,100       2,078,931  

Wabash National

  43,600       958,328  
42 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       
June 30, 2017 (unaudited)
  Schedule of Investments (continued)                                   SHARES       VALUE                     INDUSTRIALS (continued)               MACHINERY (continued)              

Watts Water Technologies Cl. A

  61,000     $ 3,855,200  

Westinghouse Air Brake Technologies

  90,570       8,287,155  

Westport Fuel Systems1,3

  327,100       768,685  

Woodward

  154,600       10,447,868                             152,688,276                 MARINE - 1.4%              

Clarkson

  291,000       9,573,864  

Kirby Corporation3

  144,500       9,659,825                             19,233,689                 PROFESSIONAL SERVICES - 3.0%              

Advisory Board (The)1,3,4

  209,377       10,782,915  

Franklin Covey3

  40,800       787,440  

Heidrick & Struggles International

  66,480       1,445,940  

ICF International3

  6,336       298,426  

ManpowerGroup

  112,858       12,600,596  

On Assignment1,3,4

  179,295       9,708,824  

Quess Corporation3

  15,720       223,515  

Robert Half International

  44,032       2,110,454  

TrueBlue 3

  75,820       2,009,230  

Volt Information Sciences3

  75,000       296,250                             40,263,590                 ROAD & RAIL - 1.8%              

Genesee & Wyoming Cl. A3

  15,000       1,025,850  

Knight Transportation1,4

  122,400       4,534,920  

Landstar System

  142,460       12,194,576  

Patriot Transportation Holding3

  139,100       2,485,717  

Saia 1,3,4

  59,730       3,064,149  

Universal Logistics Holdings

  78,916       1,183,740                             24,488,952                 TRADING COMPANIES & DISTRIBUTORS - 0.5%              

Central Steel & Wire2

  4,862       2,674,100  

Houston Wire & Cable3

  509,200       2,673,300  

MSC Industrial Direct Cl. A1

  5,463       469,600  

SIG

  350,000       677,404                             6,494,404                 TRANSPORTATION INFRASTRUCTURE - 0.1%              

Hopewell Highway Infrastructure

  1,012,000       581,993     Total (Cost $240,658,301)           416,150,923       INFORMATION TECHNOLOGY 17.9%               COMMUNICATIONS EQUIPMENT - 0.5%              

ADTRAN 1,4

  234,973       4,852,192  

Clearfield 1,3,4

  55,600       733,920  

NetScout Systems3

  31,100       1,069,840  

Oclaro 1,3,4

  91,000       849,940                             7,505,892                 ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 9.0%              

Anixter International1,3,4

  70,895       5,543,989  

Bel Fuse Cl. B

  30,238       746,878  

Celestica 3

  169,600       2,303,168  

Cognex Corporation1,4

  201,870       17,138,763  

Coherent3

  100,534       22,619,145  

Dolby Laboratories Cl. A

  9,150       447,984  

Fabrinet 3

  60,600       2,585,196  

FARO Technologies3

  161,467       6,103,453  

FLIR Systems

  317,000       10,987,220  

HollySys Automation Technologies

  53,882       894,980  

Horiba

  12,000       728,695  

IPG Photonics1,3,4

  58,000       8,415,800  

LRAD Corporation3

  744,944       1,258,955  

Methode Electronics

  30,530       1,257,836  

National Instruments

  261,850       10,531,607  

Orbotech 3

  34,500       1,125,390  

Perceptron 3

  357,700       2,604,056  

Plexus Corporation3

  150,600       7,917,042  

Richardson Electronics

  573,732       3,425,180  

Rogers Corporation3

  57,066       6,198,509  

Systemax

  38,520       724,176  

TTM Technologies1,3,4

  496,400       8,617,504  

VST Holdings

  979,000       295,928  

Wasion Group Holdings

  1,500,000       691,647                             123,163,101                 INTERNET SOFTWARE & SERVICES - 2.0%              

Actua Corporation3

  63,815       896,601  

Care.com 3

  209,300       3,160,430  

CommerceHub Ser. C3

  50,000       872,000  

comScore 2,3

  211,136       5,531,763  

HolidayCheck Group3

  44,900       157,386  

IZEA 3

  110,106       210,302  

j2 Global

  61,620       5,243,246  

Leaf Group3

  50,000       390,000  

MiX Telematics ADR

  57,985       456,922  

QuinStreet 3

  526,082       2,193,762  

Solium Capital3

  182,800       1,382,841  

Spark Networks1,3

  363,000       348,480  

Stamps.com 3

  37,500       5,807,813  

Support.com 3

  216,766       507,232                             27,158,778                 IT SERVICES - 1.0%              

Acxiom Corporation3

  48,000       1,247,040  

Convergys Corporation1

  121,000       2,877,380  

DST Systems1,4

  20,000       1,234,000  

Hackett Group (The)

  417,266       6,467,623  

Innodata 3

  274,314       480,050  

Unisys Corporation3

  60,000       768,000                             13,074,093                 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.8%              

Amtech Systems3

  141,471       1,194,015  

Brooks Automation

  121,000       2,624,490  

Cabot Microelectronics

  14,000       1,033,620  

CyberOptics Corporation3

  37,600       776,440  

Diodes 3

  270,850       6,508,526  

Intermolecular 3

  40,000       37,200  

Kulicke & Soffa Industries3

  77,400       1,472,148  

MKS Instruments

  24,210       1,629,333  

Nanometrics 3

  61,000       1,542,690  

Nova Measuring Instruments3

  46,500       1,027,185  

Photronics 3

  159,900       1,503,060  

Rudolph Technologies1,3

  62,700       1,432,695  

Sigma Designs3

  78,900       461,565  

Silicon Motion Technology ADR

  97,000       4,678,310  

Teradyne

  130,000       3,903,900  

Ultra Clean Holdings3

  42,800       802,500  

Veeco Instruments3

  17,500       487,375  

Versum Materials

  123,000       3,997,500  
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 43
       

Royce Value Trust

  Schedule of Investments (continued)                                   SHARES       VALUE                     INFORMATION TECHNOLOGY (continued)               SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (continued)              

Xperi

  111,430     $ 3,320,614                             38,433,166                 SOFTWARE - 1.9%              

American Software Cl. A

  108,690       1,118,420  

ANSYS1,3,4

  95,000       11,559,600  

BroadSoft 3

  25,000       1,076,250  

Computer Modelling Group

  316,300       2,482,984  

Micro Focus International

  25,000       739,466  

Model N3

  300,387       3,995,147  

Monotype Imaging Holdings

  117,700       2,153,910  

PSI

  18,194       292,690  

RealNetworks 3

  219,879       952,076  

Rosetta Stone3

  40,000       431,200  

SeaChange International3

  247,069       657,204                             25,458,947                 TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.7%              

Diebold Nixdorf

  266,600       7,464,800  

Intevac 3

  168,700       1,872,570                             9,337,370     Total (Cost $158,446,124)           244,131,347       MATERIALS 7.5%               CHEMICALS - 2.3%              

FutureFuel Corporation

  48,500       731,865  

Hawkins

  86,178       3,994,350  

Innospec

  36,883       2,417,681  

Minerals Technologies

  108,793       7,963,647  

Quaker Chemical

  109,669       15,927,229                             31,034,772                 CONSTRUCTION MATERIALS - 1.0%              

Ash Grove Cement Cl. B2

  50,518       13,387,775                 CONTAINERS & PACKAGING - 0.3%              

Mayr-Melnhof Karton

  34,000       4,446,389                 METALS & MINING - 3.8%              

Alamos Gold Cl. A

  263,300       1,867,952  

Ampco-Pittsburgh

  36,966       545,249  

Constellium Cl. A3

  70,000       483,000  

Ferroglobe

  50,000       597,500  

Ferroglobe (Warranty Insurance Trust)3,6

  49,300       0  

Franco-Nevada Corporation

  107,300       7,742,768  

Gold Fields ADR

  370,000       1,287,600  

Haynes International1

  113,900       4,135,709  

Hecla Mining

  321,300       1,638,630  

Lundin Mining

  640,000       3,637,261  

Major Drilling Group International3

  960,900       6,290,901  

Pretium Resources3

  165,000       1,585,364  

Reliance Steel & Aluminum

  128,720       9,372,103  

Royal Gold

  16,600       1,297,622  

Sandstorm Gold3

  270,000       1,044,900  

Synalloy Corporation3

  178,800       2,029,380  

Tree Island Steel

  30,000       90,685  

Worthington Industries

  148,000       7,432,560                             51,079,184                 PAPER & FOREST PRODUCTS - 0.1%              

Stella-Jones

  40,300       1,375,446     Total (Cost $59,812,511)           101,323,566    
REAL ESTATE 3.0%               EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.0%              

Irish Residential Properties REIT

  200,000       310,665                 REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.0%              

Altus Group

  24,200       523,077  

FirstService Corporation

  135,100       8,643,698  

Forestar Group3

  81,000       1,389,150  

FRP Holdings3

  178,558       8,240,452  

Kennedy-Wilson Holdings

  101,300       1,929,765  

Marcus & Millichap3

  273,013       7,196,622  

Real Estate Investors

  500,000       393,991  

RMR Group Cl. A1

  27,200       1,323,280  

St. Joe Company (The)3

  177,000       3,318,750  

Tejon Ranch3

  360,035       7,431,122                             40,389,907     Total (Cost $29,473,281)           40,700,572       TELECOMMUNICATION SERVICES 0.6%               DIVERSIFIED TELECOMMUNICATION SERVICES - 0.1%              

China Communications Services

  750,182       432,384  

HKBN

  500,000       501,444                             933,828                 WIRELESS TELECOMMUNICATION SERVICES - 0.5%              

Boingo Wireless3

  50,000       748,000  

Telephone and Data Systems

  208,270       5,779,493                             6,527,493     Total (Cost $6,918,793)           7,461,321       UTILITIES 0.1%               GAS UTILITIES - 0.1%              

Shizuoka Gas

  110,000       731,540  

Toho Gas

  60,000       436,364                             1,167,904                 INDEPENDENT POWER & RENEWABLE ELECTRICITY PRODUCER - 0.0%              

Calpine Corporation3

  30,000       405,900                 MULTI-UTILITIES - 0.0%              

Just Energy Group1

  18,520       97,045     Total (Cost $1,561,806)           1,670,849       MISCELLANEOUS7 2.2%                 Total (Cost $29,970,345)           29,755,191       TOTAL COMMON STOCKS                 (Cost $973,092,980)           1,357,965,955                     REPURCHASE AGREEMENT 5.0%              
Fixed Income Clearing Corporation, 0.12% dated 6/30/17, due 7/3/17, maturity value
$68,755,688 (collateralized by obligations of various U.S. Government Agencies, 2.25%-
2.375% due 8/15/24-11/15/24, valued at $70,132,893)
  (Cost $68,755,000)           68,755,000       TOTAL INVESTMENTS 104.8%                 (Cost $1,041,847,980)           1,426,720,955                     LIABILITIES LESS CASH AND OTHER ASSETS (4.8)%           (65,914,590 )                                 NET ASSETS 100.0%         $ 1,360,806,365    
44 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       
June 30, 2017 (unaudited)
New additions in 2017. 1
All or a portion of these securities were pledged as collateral in connection with the Fund’s revolving credit agreement at June 30, 2017. Total market value of pledged securities at June 30, 2017, was $114,108,923.
2
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.
3 Non-income producing. 4
At June 30, 2017, a portion of these securities were rehypothecated in connection with the Fund’s revolving credit agreement in the aggregate amount of $66,420,057.
5
At June 30, 2017, the Fund owned 5% or more of the Company’s outstanding voting securities thereby making the Company an Affiliated Company as that term is defined in the Investment Company Act of 1940. See Notes to Financial Statements.
6
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.
7 Includes securities first acquired in 2017 and less than 1% of net assets.       Bold indicates the Fund’s 20 largest equity holdings in terms of June 30, 2017, market value.      
TAX INFORMATION: The cost of total investments for Federal income tax purposes was $1,044,320,297. At June 30, 2017, net unrealized appreciation for all securities was $382,400,658, consisting of aggregate gross unrealized appreciation of $471,036,166 and aggregate gross unrealized depreciation of $88,635,508. The primary cause of the difference between book and tax basis cost is the timing of the recognition of losses on securities sold.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 45
       
Royce Value Trust   June 30, 2017 (unaudited)
  Statement of Assets and Liabilities                   ASSETS:         Investments at value          

Non-Affiliated Companies

  $ 1,345,710,195    

Affiliated Companies

    12,255,760     Repurchase agreements (at cost and value)     68,755,000     Cash and foreign currency     280,471     Receivable for investments sold     4,042,117     Receivable for dividends and interest     906,311     Prepaid expenses and other assets     600,253     Total Assets     1,432,550,107     LIABILITIES:         Revolving credit agreement     70,000,000     Payable for investments purchased     943,432     Payable for investment advisory fee     496,668     Payable for directors’ fees     48,125     Payable for interest expense     8,745     Accrued expenses     140,880     Deferred capital gains tax     105,892     Total Liabilities     71,743,742     Net Assets   $ 1,360,806,365     ANALYSIS OF NET ASSETS:         Paid-in capital - $0.001 par value per share; 83,108,427 shares outstanding (150,000,000 shares authorized)   $ 981,272,685     Undistributed net investment income (loss)     2,033,021     Accumulated net realized gain (loss) on investments and foreign currency     36,276,725     Net unrealized appreciation (depreciation) on investments and foreign currency     384,752,871     Quarterly distributions     (43,528,937 )   Net Assets (net asset value per share - $16.37)   $ 1,360,806,365     Investments at identified cost   $ 973,092,980    
46 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       

Royce Value Trust

  Statement of Changes in Net Assets                                       SIX MONTHS ENDED             6/30/17             (UNAUDITED)   YEAR ENDED 12/31/16                     INVESTMENT OPERATIONS:                 Net investment income (loss)   $ 3,992,392     $ 9,680,260     Net realized gain (loss) on investments and foreign currency     26,622,919       75,719,009     Net change in unrealized appreciation (depreciation) on investments and foreign currency     59,248,466       186,502,762     Net increase (decrease) in net assets from investment operations     89,863,777       271,902,031     DISTRIBUTIONS:                 Net investment income     (3,482,315 )1     (10,786,801 )   Net realized gain on investments and foreign currency     (29,164,388 )1     (70,931,388 )   Return of capital     (10,882,234 )1         Total distributions     (43,528,937 )     (81,718,189 )   CAPITAL STOCK TRANSACTIONS:                 Reinvestment of distributions     18,459,813       33,793,124     Total capital stock transactions     18,459,813       33,793,124     Net Increase (Decrease) In Net Assets     64,794,653       223,976,966     NET ASSETS:                   Beginning of period     1,296,011,712       1,072,034,746     End of period (including undistributed net investment income (loss) of $2,033,021 at 6/30/17 and $(1,959,371) at 12/31/16)   $ 1,360,806,365     $ 1,296,011,712                       1 Amounts are subject to change and recharacterization at year end.    
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 47
       
Royce Value Trust   Six Months Ended June 30, 2017 (unaudited)
  Statement of Operations                   INVESTMENT INCOME:         INCOME:         Dividends          

Non-Affiliated Companies

  $ 8,351,412    

Affiliated Companies

    97,724     Foreign withholding tax     (229,771 )   Interest     112,157     Rehypothecation income     13,888     Total income     8,345,410     EXPENSES:           Investment advisory fees     2,959,024     Interest expense     733,983     Stockholder reports     192,588     Administrative and office facilities     159,233     Custody and transfer agent fees     95,490     Directors’ fees     83,239     Professional fees     81,518     Other expenses     48,216     Total expenses     4,353,291     Compensating balance credits     (273 )   Net expenses     4,353,018     Net investment income (loss)     3,992,392     REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:         NET REALIZED GAIN (LOSS):           Investments     26,582,541     Foreign currency transactions     40,378     NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):         Investments in Non-Affiliated Companies and foreign currency translations     57,058,047     Investments in Affiliated Companies     2,257,394     Other assets and liabilities denominated in foreign currency     (66,975 )   Net realized and unrealized gain (loss) on investments and foreign currency     85,871,385     NET INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS   $ 89,863,777    
48 | 2017 Semiannual Report to Stockholders   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       
Royce Value Trust   Six Months Ended June 30, 2017 (unaudited)
  Statement of Cash Flows                   CASH FLOWS FROM OPERATING ACTIVITIES:         Net increase (decrease) in net assets from investment operations   $ 89,863,777     Adjustments to reconcile net increase (decrease) in net assets from investment operations to net cash provided by operating activities:          

Purchases of long-term investments

    (114,948,208 )  

Proceeds from sales and maturities of long-term investments

    123,838,636    

Net purchases, sales and maturities of short-term investments

    12,157,000    

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

    373,134    

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

    (61,632 )  

Net change in unrealized appreciation (depreciation) on investments

    (59,315,441 )  

Net realized gain (loss) on investments and foreign currency

    (26,622,919 )   Net cash provided by operating activities     25,284,347     CASH FLOWS FROM FINANCING ACTIVITIES:         Net increase (decrease) in revolving credit agreement         Distributions     (43,528,937 )   Reinvestment of distributions     18,459,813     Net cash used for financing activities     (25,069,124 )   INCREASE (DECREASE) IN CASH:     215,223     Cash and foreign currency at beginning of period     65,248     Cash and foreign currency at end of period   $ 280,471    
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS   2017 Semiannual Report to Stockholders | 49
       
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.

    SIX MONTHS   YEARS ENDED                   ENDED 6/30/17                                             (UNAUDITED)   12/31/16   12/31/15   12/31/14   12/31/13   12/31/12   Net Asset Value, Beginning of Period   $ 15.85     $ 13.56     $ 16.24     $ 18.17     $ 15.40     $ 14.18     INVESTMENT OPERATIONS:                                                 Net investment income (loss)     0.05       0.12       0.12       0.12       0.12       0.23     Net realized and unrealized gain (loss) on investments and
foreign currency
    1.03       3.27       (1.48 )     (0.13 )     4.89       2.02     Total investment operations     1.08       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

    1.08       3.39       (1.36 )     (0.01 )     5.01       2.08     DISTRIBUTIONS TO COMMON STOCKHOLDERS:                                                 Net investment income     (0.04 )1     (0.13 )     (0.16 )     (0.14 )     (0.11 )     (0.17 )   Net realized gain on investments and foreign currency     (0.36 )1     (0.89 )     (1.08 )     (1.68 )     (2.08 )     (0.63 )   Return of capital     (0.13 )1                                 Total distributions to Common Stockholders     (0.53 )     (1.02 )     (1.24 )     (1.82 )     (2.19 )     (0.80 )   CAPITAL STOCK TRANSACTIONS:                                                 Effect of reinvestment of distributions by Common Stockholders     (0.03 )     (0.08 )     (0.08 )     (0.10 )     (0.05 )     (0.06 )   Total capital stock transactions     (0.03 )     (0.08 )     (0.08 )     (0.10 )     (0.05 )     (0.06 )   Net Asset Value, End of Period   $ 16.37     $ 15.85     $ 13.56     $ 16.24     $ 18.17     $ 15.40     Market Value, End of Period   $ 14.59     $ 13.39     $ 11.77     $ 14.33     $ 16.01     $ 13.42     TOTAL RETURN:2                                                 Net Asset Value     7.22 %3     26.87 %     (8.09 )%     0.78 %     34.14 %     15.41 %   Market Value     13.12 %3     23.48 %     (9.59 )%     0.93 %     35.63 %     16.22 %  

RATIOS BASED ON AVERAGE NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS:

                                                Investment advisory fee expense4     0.45 %5     0.51 %     0.50 %     0.46 %     0.54 %     0.56 %   Other operating expenses     0.21 %5     0.22 %     0.18 %     0.15 %     0.25 %     0.15 %   Total expenses (net)6     0.66 %5     0.73 %     0.68 %     0.61 %     0.79 %     0.71 %   Expenses net of fee waivers and excluding interest expense     0.55 %5     0.62 %     0.61 %     0.55 %     0.65 %     0.68 %   Expenses prior to fee waivers and balance credits     0.66 %5     0.73 %     0.68 %     0.61 %     0.79 %     0.71 %   Expenses prior to fee waivers     0.66 %5     0.73 %     0.68 %     0.61 %     0.79 %     0.71 %   Net investment income (loss)     0.60 %5     0.85 %     0.78 %     0.72 %     0.70 %     1.57 %   SUPPLEMENTAL DATA:                                                 Net Assets Applicable to Common Stockholders,
End of Period (in thousands)  
  $ 1,360,806     $ 1,296,012     $ 1,072,035     $ 1,231,955     $ 1,307,829     $ 1,082,426     Portfolio Turnover Rate     8 %     28 %     35 %     40 %     33 %     25 %   REVOLVING CREDIT AGREEMENT:                                                 Asset coverage     2044 %     1951 %     1631 %     1860 %     1289 %     822 %   Asset coverage per $1,000   $ 20,440     $ 19,514     $ 16,315     $ 18,599     $ 12,889     $ 8,216    
1
Amounts are subject to change and recharacterization at year end.
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
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.
5
Annualized
6
Expense ratio based on total average net assets including liquidation value of Preferred Stock was 0.60% for the year ended December 31, 2012.

50 | 2017 Semiannual Report to Stockholders
  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
       

Royce Value Trust

Notes to Financial Statements (unaudited)

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 June 30, 2017. 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   $1,321,736,715   $35,337,177   $892,063   $1,357,965,955     Cash Equivalents     68,755,000     68,755,000    
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 six months ended June 30, 2017, securities valued at $5,639,118 were transferred from Level 1 to Level 2 and securities valued at $82,049,938 were transferred from Level 2 to Level 1 within the fair value hierarchy.

2017 Semiannual Report to Stockholders | 51
       

Royce Value Trust

Notes to Financial Statements (unaudited) (continued)

VALUATION OF INVESTMENTS (continued):

Level 3 Reconciliation:

    BALANCE AS OF 12/31/16   REALIZED AND UNREALIZED
GAIN (LOSS)1
  BALANCE AS OF 6/30/17   Common Stocks   $892,063   $–   $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.
The following table summarizes the valuation techniques used and unobservable inputs approved by the Valuation Committee to determine the fair value of certain, material Level 3 investments. The table does not include Level 3 investments with values derived utilizing prices from prior transactions or third party pricing information with adjustments (e.g. broker quotes, pricing services, net asset values).

      FAIR VALUE AT               IMPACT TO VALUATION FROM       6/30/17   VALUATION TECHNIQUE(S)   UNOBSERVABLE INPUT(S)   RANGE AVERAGE   AN INCREASE IN INPUT1             Discounted Present Value             Common Stocks     $892,063   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 June 30, 2017 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

52 | 2017 Semiannual Report to Stockholders
       

Royce Value Trust

Notes to Financial Statements (unaudited) (continued)

DISTRIBUTIONS (continued):
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.

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 1,316,503 and 2,740,162 shares of Common Stock as reinvestment of distributions for the six months ended June 30, 2017 and the year ended December 31, 2016, 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 June 30, 2017, the Fund has outstanding borrowings of $70,000,000. During the six months ended June 30, 2017, the Fund borrowed an average daily balance of $70,000,000 at a weighted average borrowing cost of 2.09%. The maximum amount outstanding during the six months ended June 30, 2017 was $70,000,000. As of June 30, 2017, the aggregate value of rehypothecated securities was $66,420,057. During the six months ended June 30, 2017, the Fund earned $13,888 in fees from rehypothecated securities.

2017 Semiannual Report to Stockholders | 53
       

Royce Value Trust

Notes to Financial Statements (unaudited) (continued)

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 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 six rolling 60-month periods ended June 2017, the Fund’s investment performance ranged from 22% to 39% below the investment performance of the S&P 600. Accordingly, the net investment advisory fee consisted of a Basic Fee of $5,918,045 and a net downward adjustment of $2,959,021 for the performance of the Fund relative to that of the S&P 600. For the six months ended June 30, 2017, the Fund expensed Royce investment advisory fees totaling $2,959,024.

Purchases and Sales of Investment Securities:
For the six months ended June 30, 2017, the costs of purchases and proceeds from sales of investment securities, other than short-term securities, amounted to $113,917,878 and $100,392,526, 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 six months ended June 30, 2017, were as follows:

COST OF PURCHASES   PROCEEDS FROM SALES   REALIZED GAIN (LOSS)     $2,700,488   $–   $–      
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 six months ended June 30, 2017:


    SHARES   MARKET
VALUE
  COST OF   PROCEEDS   CHANGE IN NET
UNREALIZED
APPRECIATION
  REALIZED   DIVIDEND   SHARES   MARKET VALUE AFFILIATED COMPANY   12/31/16   12/31/16   PURCHASES   FROM SALES   (DEPRECIATION)   GAIN (LOSS)   INCOME   6/30/17   6/30/17   Stanley Furniture     912,235     $ 821,194                   $   209,632       $ –     $       912,235     $ 1,030,826     Timberland Bancorp     444,200       9,177,172                   2,047,762             97,724       444,200       11,224,934                 $ 9,998,366                       $2,257,394       $ –     $ 97,724             $ 12,255,760     54 | 2017 Semiannual Report to Stockholders
       

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       10,111       8,446     6/30/17       $ 8,975               1,051     $ 11,740     $ 10,100       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       92,689       78,540     2017   Year-to-date distribution total $0.32             8.317       374                     6/30/17       $ 8,900               9,999     $ 98,190     $ 86,491    
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. 2017 Semiannual Report to Stockholders | 55
       

History Since Inception (continued)

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       293,880       248,425     2017   Year-to-date distribution total $0.53               14.023       708                     6/30/17         $ 21,922               19,261     $ 315,303     $ 281,018    
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.
56 | 2017 Semiannual Report to Stockholders
       

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 June 30, 2017.

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 June 30, 2017. 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.).

2017 Semiannual Report to Stockholders | 57
           

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, Director1
Age: 77 | Number of Funds Overseen: 22 | Tenure: Since 1982
Non-Royce Directorships: Director of TICC Capital Corp.
Principal Occupation(s) During Past Five Years: Chairman of the Board of Managers of Royce & Associates, LP (“Royce”), the Trust’s investment adviser; Chief Executive Officer (1972–June 2017), President (1972-July 2014) of Royce.

Christopher D. Clark, Director1, President
Age: 52 | Number of Funds Overseen: 22 | Tenure: Since 2014
Principal Occupation(s) During Past Five Years: Chief Executive Officer (since July 2017), President (since July 2014), Co-Chief Investment Officer (Since January 2014), Managing Director and, since June 2015, a Member of the Board of Managers of Royce, having been employed by Royce since May 2007.


Patricia W. Chadwick, Director
Age: 68 | Number of Funds Overseen: 22 | Tenure: Since 2009
Non-Royce Directorships: Trustee of ING Mutual Funds and Director of Wisconsin Energy Corp.
Principal Occupation(s) During Past 5 Years: Consultant and President of Ravengate Partners LLC (since 2000).

Stephen L. Isaacs, Director
Age: 77 | Number of Funds Overseen: 22 | Tenure: Since 1989
Non-Royce Directorships: None
Principal Occupation(s) During Past Five Years: Attorney and President of Health Policy Associates, Inc., consultants. Mr. Isaacs’s prior business experience includes having served as President of the Center for Health and Social Policy (from 1996 to 2012); Director of Columbia University Development Law and Policy Program and Professor at Columbia University (until August 1996).

Arthur S. Mehlman, Director
Age: 75 | Number of Funds Overseen: 40 | Tenure: Since 2004
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 18 Legg Mason Funds.
Principal Occupation(s) During Past Five Years: Director of The League for People with Disabilities, Inc.; Director of University of Maryland Foundation (non-profits). Formerly: Director of Municipal Mortgage & Equity, LLC (from October 2004 to April 1, 2011); Director of University of Maryland College Park Foundation (non-profit) (from 1998 to 2005); Partner, KPMG LLP (international accounting firm) (from 1972 to 2002); Director of Maryland Business Roundtable for Education (from July 1984 to June 2002).

David L. Meister, Director
Age: 77 | Number of Funds Overseen: 22 | Tenure: Since 1982
Non-Royce Directorships: None
Principal Occupation(s) During Past Five Years: Consultant. Chairman and Chief Executive Officer of The Tennis Channel (from June 2000 to March 2005). Mr. Meister’s prior business experience includes having served as Chief Executive Officer of Seniorlife.com, a consultant to the communications industry, President of Financial News Network, Senior Vice President of HBO, President of Time-Life Films, and Head of Broadcasting for Major League Baseball.

G. Peter O’Brien, Director
Age: 71 | Number of Funds Overseen: 40 | Tenure: Since 2001
Non-Royce Directorships: Director/Trustee of registered investment companies constituting the 18 Legg Mason Funds; Director of TICC Capital Corp.
Principal Occupation(s) During Past Five Years: Trustee Emeritus of Colgate University (since 2005); Board Member of Hill House, Inc. (since 1999); Formerly: Trustee of Colgate University (from 1996 to 2005), President of Hill House, Inc. (from 2001 to 2005) and Managing Director/Equity Capital Markets Group of Merrill Lynch & Co. (from 1971 to 1999).

Michael K. Shields, Director
Age: 59 | Number of Funds Overseen: 22 | Tenure: Since 2015
Principal Occupation(s) During Past Five Years: President and Chief Executive Officer of Piedmont Trust Company, a private North Carolina trust company (since May 2012). Mr. Shields’s prior business experience includes owning Shields Advisors, an investment consulting firm (from April 2010 to June 2012).


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

Daniel A. O’Byrne, Vice President
Age: 55 | Tenure: Since 1994
Principal Occupation(s) During Past Five Years: Principal and Vice President of Royce, having been employed by Royce since October 1986.

Peter K. Hoglund, Treasurer
Age: 51 | Tenure: Since 2015
Principal Occupation(s) During Past Five Years: Chief Financial Officer, Chief Administrative Officer, and Managing Director of Royce, having been employed by Royce since December 2014. Prior to joining Royce, Mr. Hoglund spent more than 20 years with Munder Capital Management in Birmingham, MI, serving as Managing Director and Chief Financial Officer and overseeing all financial aspects of the firm. He began his career at Munder as a portfolio manager.

John E. Denneen, Secretary and Chief Legal Officer
Age: 50 | Tenure: 1996-2001 and Since 2002
Principal Occupation(s) During Past Five Years: General Counsel, Managing Director, and, since June 2015, a Member of the Board of Managers of Royce. Chief Legal and Compliance Officer and Secretary of Royce.

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

1 Interested Director. Director will hold office until their successors have been duly elected and qualified or until their earlier resignation or removal.
58 | 2017 Semiannual Report to Stockholders
           

Board Approval of Investment Advisory Agreements

At meetings held on June 5-6, 2017, the Funds’ respective Boards of Directors, including all of the non-interested directors, approved the continuation of investment advisory agreements (each, an “Investment Advisory Agreement” and collectively, the “Investment Advisory Agreements”) between Royce & Associates, LP (“R&A”) and each of Royce Value Trust, Inc., Royce Micro-Cap Trust, Inc., and Royce Global Value Trust, Inc. (each, a “Fund” and collectively, the “Funds”). In reaching these decisions, each Board reviewed the materials provided by R&A, which included, among other things, information prepared internally by R&A and independently by Morningstar Associates, LLC (“Morningstar”) containing detailed investment advisory fee, expense ratio, and investment performance comparisons for the Funds with other funds in their respective “peer groups”, information regarding the past performance of the Funds and other registered investment companies managed by R&A and a memorandum outlining the legal duties of each Board prepared by independent counsel to the non-interested directors. R&A also provided the directors with an analysis of its profitability with respect to providing investment advisory services to each of the Funds. In addition, each Board took into account information furnished throughout the year at regular Board meetings, including reports on investment performance, stockholder services, regulatory compliance, brokerage commissions and research, and brokerage and other execution products and services provided to the Funds. Each Board also considered other matters it deemed important to the approval process, such as allocation of brokerage commissions, “soft dollar” research services R&A receives and other direct and indirect benefits to R&A and its affiliates, from their relationship with the relevant Fund. The directors also met throughout the year with investment advisory personnel from R&A. Each Board, in its deliberations, recognized that, for many of the Funds’ stockholders, the decision to purchase Fund shares included a decision to select R&A as the investment adviser and that there was a strong association in the minds of Fund stockholders between R&A and each Fund. In considering factors relating to the approval of the continuance of the Investment Advisory Agreements, the non-interested directors received assistance and advice from, and met separately with, their independent counsel. While all three of the Investment Advisory Agreements were considered at the same Board meetings, the Boards dealt with each agreement separately. Among other factors, the directors considered the following:

The nature, extent and quality of services provided by R&A:
Each Board considered the following factors to be of fundamental importance to its consideration of whether to approve the continuance of the Investment Advisory Agreement: (i) R&A’s more than 40 years of value investing experience and track record; (ii) the history of long-tenured R &A portfolio managers managing the Funds; (iii) R&A’s focus on mid-cap, small-cap and micro-cap value investing; (iv) the consistency of R&A’s approach to managing the Funds and open-end mutual funds over more than 40 years; (v) the integrity and high ethical standards adhered to at R&A; (vi) R&A’s specialized experience in the area of trading small- and micro-cap securities; (vii) R&A’s historical ability to attract and retain portfolio management talent and (viii) R&A’s focus on stockholder interests as exemplified by expansive stockholder reporting and communications. The Boards also noted that R&A’s compensation policy arrangements strongly encourage portfolio manager investment in each Fund that they manage. Each Board reviewed the services that R&A provides to each Fund, including, but not limited to, managing each Fund’s investments in accordance with the stated policies of each Fund. Each Board considered the fact that R&A provided certain administrative services to the Funds at cost pursuant to the Administration Agreement between the Funds and R&A. Each Board determined that the services to be provided to each Fund by R&A would be the same as those that it previously provided to the relevant Fund. The Boards also took into consideration the histories, reputations and backgrounds of R&A’s portfolio managers for the Funds, finding that these would likely have an impact on the continued success of the Funds. Lastly, each Board noted R&A’s ability to attract and retain qualified and experienced personnel. The directors concluded that the investment advisory services provided by R&A to each Fund compared favorably to services provided by R&A to other R&A client accounts, including other funds, in both nature and quality, and that the scope of services provided by R&A would continue to be suitable for the Funds.

Investment performance of the Funds and R&A:
In light of R&A’s risk-averse approach to investing, each Board believes that risk-adjusted performance continues to be the most appropriate measure of each Fund’s investment performance. One measure of risk-adjusted performance the Boards use in their review of the Funds’ performance is the Sharpe Ratio. The Sharpe Ratio is a risk-adjusted measure of performance developed by Nobel Laureate William Sharpe. It is calculated by dividing a Fund’s annualized excess returns by its annualized standard deviation to determine reward per unit of risk. The higher the Sharpe Ratio, the better a Fund’s historical risk-adjusted performance. The Boards attach primary importance to risk-adjusted performance over relatively long periods of time, typically 3 to 10 years. It was noted, however, that Royce Global Value Trust, Inc. (“RGT”) had less than five full calendar years of performance because its inception date was October 18, 2013. Overall, the Boards noted that financial markets in 2016 were marked by increased return dispersion, declining correlation, and a steepening yield curve. These factors resulted in a very strong year for small-cap stocks and an even better year for small-cap value stocks and cyclical sectors. The 2016 market environment enabled each of Royce Value Trust, Inc. (“RVT”) and Royce Micro-Cap Trust, Inc. (“RMT”) to outperform its peers in 2016 as evidenced by its Sharpe Ratio. While the directors recognize that one-year performance does not define a trend and place primary emphasis on medium-term and longer-term risk adjusted performance as referenced above, they also noted that the improved relative risk-adjusted performance of RVT and RMT during the more historically customary market environment that prevailed during 2016 was not insignificant. Along those lines, the relevant Boards noted that RVT and RMT also generally underperformed their respective peers, as evidenced by their Sharpe Ratios, from approximately March 2009 through the end of 2015. This post-2008 market period was marked by historically low interest rates and significant U.S. Federal Reserve market intervention. During this period, highly leveraged, non-earning companies and yield-oriented securities (e.g., master limited partnerships, real estate investment trusts, and utilities) generally outperformed the higher quality companies (e.g., those with solid balance sheets, low leverage, the ability to generate and effectively allocate free cash flow, and strong returns on invested capital) and cyclical companies favored by each of RVT and RMT. The directors also noted, however, as discussed below, that the relative performance for each of RVT and RMT during the more historically customary market cycle preceding the 2008 financial crisis was quite strong. Using Morningstar data, the Sharpe Ratio for RVT placed in the 1st, 4th, 4th, and 4th quartiles within the Small Blend category assigned by Morningstar for the 1-year, 3-year, 5-year, and 10-year periods, respectively, ended December 31, 2016 while the Sharpe Ratio for RMT placed in the 2nd, 4th, 4th, and 4th quartiles within the Small Blend category assigned by Morningstar for the 1-year, 3-year, 5-year, and 10-year periods, respectively, ended December 31, 2016. The relevant Boards further noted that the use of leverage by each of RVT and RMT through preferred stock (prior to November 15, 2012) and borrowings resulted in higher volatility and worse down market performance.
     The 2016 market environment also enabled RGT to outperform its peers in 2016 as evidenced by its Sharpe Ratio. Using Morningstar data, the Sharpe Ratio for RGT in the 1st and 2nd quartiles within the Foreign Small/Mid Value category assigned by Morningstar for the 1-year and 3-year periods, respectively, ended December 31, 2016. The Board noted the inherent limitations of using 1-year and 3-year Sharpe Ratios in evaluating RGT’s investment performance.
    In addition to each Fund’s risk–adjusted performance, the Boards also reviewed and considered the absolute total returns and down market performance for each Fund and the long-term performance records of each of RVT and RMT for periods of 10 years and longer. The Boards further noted that R&A manages a number of funds that invest in micro-cap, small-cap, and mid-cap issuers, many of which had outperformed

2017 Semiannual Report to Stockholders | 59
           

Board Approval of Investment Advisory Agreements (continued)

their benchmark indexes and their competitors during the periods prior to the U.S. Federal Reserve’s near zero interest rate policy and related market interventions and during 2016 as noted above. Although each Board recognized that past performance is not necessarily an indicator of future results, it found that R&A had the necessary qualifications, experience and track record in managing micro-cap, small-cap, and mid-cap securities to manage the relevant Fund. Each Board determined that R&A continued to be an appropriate investment adviser for the relevant Fund and concluded that the relevant Fund’s performance supported the approval of the continuance of its Investment Advisory Agreement.

Cost of the services provided and profits realized by R&A from its relationship with the Funds:
Each Board considered the cost of the services provided by R&A and profits realized by R&A from its relationship with each Fund. As part of the analysis, each Board discussed with R&A its methodology in allocating its costs to each Fund and concluded that its allocations were reasonable. The RVT Board noted that RVT was not profitable to R&A during the year ended December 31, 2016. The Boards of RMT and RGT concluded that R&A’s profits in respect of RMT and RGT, respectively, were reasonable in relation to the nature and quality of services provided.

The extent to which economies of scale would be realized as the Funds grow and whether fee levels would reflect such economies of scale:
Each Board considered whether there have been economies of scale in respect of the management of each Fund, whether each Fund has appropriately benefited from any economies of scale and whether there is potential for realization of any further economies of scale. Each Board noted the time and effort involved in managing portfolios of micro-, small- and mid-cap stocks and that they did not involve the same efficiencies as do portfolios of large-cap stocks. The directors noted that, as closed-end funds, the Funds generally would not be expected to have significant inflows of capital that might produce increasing economies of scale. Each Board concluded that the current fee structure for each Fund was reasonable, that stockholders sufficiently participated in economies of scale and that no changes were currently necessary.

Comparison of services to be rendered and fees to be paid to those under other investment advisory contracts, such as contracts of the same and other investment advisers or other clients:
Each Board reviewed the investment advisory fee paid by each Fund and compared both the services to be rendered and the fees to be paid under the Investment Advisory Agreements to other contracts of R&A and to contracts of other investment advisers to registered investment companies investing in small- and micro-cap stocks, as provided by Morningstar. Each Board noted the importance of the net expense ratio in measuring a fund’s efficiency, particularly in light of the variations in the mutual fund industry as to which entity is responsible for particular types of expenses. In the case of RVT, its Board noted that it had a 1.00% basic fee that is subject to adjustment up or down (up to 0.50% in either direction) based on its performance versus the S&P 600 SmallCap Index over a rolling period of 60 months. The fee is charged on average net assets over that rolling period. As a result, in a rising market, the fee will be smaller than a fee calculated on the current year’s average net assets, and vice versa. The Board determined that the performance adjustment feature continued to serve as an appropriate incentive to R&A to manage RVT for the benefit of its long-term common stockholders. The Board also noted that the fee arrangement, which also includes a provision for no fee in periods where RVT’s trailing three-year performance is negative, requires R&A to measure RVT’s performance monthly against the S&P 600, an unmanaged index. Instead of receiving a set fee regardless of its performance, R&A is penalized for poor performance. The Board noted that RVT’s net expense ratio of 0.73% placed it in the 1st quartile within its Morningstar peer group for 2016. In the case of RMT, the Board noted that it also had a 1.00% basic fee subject to adjustment up or down based on its performance versus the Russell 2000 Index over a rolling 36 month period. The fee is charged on average net assets over that rolling period. As a result, in a rising market, the fee will be smaller than a fee calculated on the current year’s average net assets, and vice versa. The Board determined that the performance adjustment feature continued to serve as an incentive to R&A to manage RMT for the benefit of its long-term common stockholders. The Board noted that RMT’s net expense ratio of 1.26% placed it in the 2nd quartile when compared against its Morningstar peer group for 2016. The Board further noted that RMT’s net expense ratio was actually 2 basis points lower than its peer group median and 15 basis points lower than the average expense ratio for the 44 non-institutional, non-ETF domestic funds with weighted average market capitalizations of less than $1 billion within the Morningstar peer group. Finally, in the case of RGT, the Board noted that its net expense ratio based on average net assets fell within the 4th quartile of its Morningstar peer group, 46 basis points above the Morningstar category median. The Board noted, however, that RGT had the third lowest weighted average market capitalization within that category.
    The Boards also noted that R&A manages the Funds in an active fashion. The industry accepted metric for measuring how actively an equity portfolio is managed is called “active share.” In particular, active share measures how much the holdings of an equity portfolio differ from the holdings of its appropriate passive benchmark index. At the extremes, a portfolio with no holdings in common with the benchmark would have 100% active share, while a portfolio that is identical to the benchmark would have 0% active share. R&A presented a chart to the Boards which demonstrated that funds with high active share scores had higher expense ratios than funds with lower active share scores due to the resources required for the active management of those funds. The Boards noted that the active shares for RVT, RMT, and RGT were 89%, 95%, and 97%, respectively, for the calendar year ended December 31, 2016.
    Each Board also considered fees charged by R&A to institutional and other clients and noted that, given the greater levels of services that R&A provides to registered investment companies such as the Funds as compared to other accounts, the base investment advisory fee for RVT and RMT and the advisory fee for RGT compared favorably to the investment advisory fees charged to those other accounts.
    No single factor was cited as determinative to the decision of the directors. Rather, after weighing all of the considerations and conclusions discussed above, each entire Board, including all of the non-interested directors, approved the continuation of the relevant Investment Advisory Agreement, concluding that the continuation of such agreements was in the best interest of the shareholders of the respective Funds and that each Fund’s investment advisory fee rate was reasonable in relation to the services provided.

60 | 2017 Semiannual 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 June 30, 2017, and, of course, historical market trends are not necessarily indicative of future market movements. Statements regarding the future prospects for particular securities held in the Funds’ portfolios and Royce’s investment intentions with respect to those securities reflect Royce’s opinions as of June 30, 2017 and are subject to change at any time without notice. There can be no assurance that securities mentioned in this 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 Priceto- Book, or P/B, Ratio is calculated by dividing a company’s share price by its book value per share. For the Morningstar Small Blend Category: © 2017 Morningstar. All Rights Reserved. The information regarding the category in this piece is: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The Morningstar Style Map uses proprietary scores of a stock’s value and growth characteristics to determine its placement in one of the five categories listed on the horizontal axis. These characteristics are then compared to those of other stocks within the same market capitalization band. Each is scored from zero to 100 for both value and growth attributes. The value score is subtracted from the growth score to determine the overall style score. For the vertical, market cap axis, Morningstar subdivides into size groups. Giant-cap stocks are defined as those that account for the top 40% of the capitalization of each style zone; large-cap stocks represent the next 30%; mid-cap stocks the next 20%; small-cap stocks the next 7%; micro-cap stocks the smallest 3%. The Royce Funds is a service mark of The Royce Funds. Distributor: Royce Fund Services, LLC.

Forward-Looking Statements
This material contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve risks and uncertainties, including, among others, statements as to:
the Funds’ future operating results the prospects of the Funds’ portfolio companies the impact of investments that the Funds have made or may make
the dependence of the Funds’ future success on the general economy and its impact on the companies and industries in which the Funds invest, and
the ability of the Funds’ portfolio companies to achieve their objectives.
    This Review and Report 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.

2017 Semiannual Report to Stockholders | 61
                                                               












                                      About The Royce Funds   Contact Us                        
Unparalleled Knowledge + Experience
Pioneers in small-cap investing, with 40+ years
of experience, depth of knowledge, and focus.
  GENERAL INFORMATION
General Royce Funds information including
an overview of our firm and Funds
(800) 221-4268
             
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The confidence to go against consensus, the insight
to uncover opportunities others might miss, and the
tenacity to stay the course through market cycles.
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• Your account, transactions, and forms
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approaches to select micro-cap, small-cap, and
mid-cap companies.
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Item 2. Code(s) of Ethics.  Not applicable to this semi-annual report.

Item 3. Audit Committee Financial Expert.   Not applicable to this semi-annual report.

Item 4. Principal Accountant Fees and Services.  Not applicable to this semi-annual report.

Item 5. Audit Committee of Listed Registrants.   Not applicable to this semi-annual report.

Item 6. Investments.
(a) See Item 1.

(b)  Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.  Not applicable to this semi-annual report.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.  Not applicable to this semi-annual report.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.  Not Applicable

Item 10. Submission of Matters to a Vote of Security Holders.  Not Applicable.

Item 11. Controls and Procedures.

(a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.

(b) Internal Control over Financial Reporting. There were no significant changes in Registrant’s internal control over financial reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses during the second fiscal quarter of the period covered by this report.


Item 12. Exhibits.  Attached hereto.
(a)(1)  Not applicable to this semi-annual report.

(a)(2)  Separate certifications by the Registrant’s Principal Executive Officer and Principal Financial Officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.

(a)(3)  Not Applicable

(b)  Separate certifications by the Registrant’s Principal Executive Officer and Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ROYCE VALUE TRUST, INC.

BY:  /s/ Christopher D. Clark            Christopher D. Clark      President         Date: August 30, 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      Chief Financial Officer           Date: August 30, 2017   Date: August 30, 2017