Royce Global Trust: A Disciplined Value Approach in Global Equities

Royce Global Trust (NYSE: RGT), a closed-end fund focused on global equities, has demonstrated its ability to navigate varying political landscapes and market cycles through its disciplined value approach. As of January 31, 2025, the fund has maintained an average annual total return of 6.2% since inception (10/17/13) through 12/31/24, outperforming the MSCI ACWI Small Cap Index in various periods. This article explores how RGT's investment strategy, which emphasizes fundamentals over short-term market noise, has contributed to its long-term performance.

RGT's investment strategy focuses on small-cap and mid-cap companies, particularly in the technology and insurance sectors. The fund's portfolio management team, led by Steven McBoyle, seeks to find small-cap companies with high returns on invested capital that can compound value by reinvesting their earnings into the business at high rates of return over the long run. This disciplined value approach has resulted in consistent performance across different political landscapes and market cycles.

One of the key factors contributing to RGT's performance is its positive outlook on companies with strong leadership and quality stocks. The fund has praised companies like Starbucks and Travelers for their ability to adapt to changing consumer preferences and generate consistent earnings growth. RGT's portfolio has benefited from the growth and innovation of these companies, as seen in their stock price appreciation. For instance, Starbucks' stock price increased by approximately 30% between 2021 and 2022, while Travelers' stock price rose by around 25% between 2020 and 2021. These positive outlooks, combined with RGT's disciplined value approach, have helped the fund outperform the MSCI ACWI Small Cap Index in various periods.

RGT's global exposure has also allowed it to capitalize on opportunities in various markets and sectors. By investing in companies across different countries and regions, RGT has been able to diversify its portfolio and mitigate risks associated with relying solely on U.S. investments. This global exposure has enabled the fund to participate in the growth of emerging markets, which have historically offered higher returns than developed markets.

In conclusion, Royce Global Trust's disciplined value approach, which emphasizes fundamentals over short-term market noise, has proven effective in navigating varying political landscapes and market cycles. The fund's focus on small-cap and mid-cap companies, particularly in the technology and insurance sectors, combined with its positive outlook on companies with strong leadership and quality stocks, has contributed to its long-term performance. RGT's global exposure has further enhanced its ability to capitalize on growth opportunities in various markets and sectors.