Royce Global Trust: Navigating Global Markets in 2024

As of November 30, 2024, Royce Global Trust (NYSE: RGT) has demonstrated a strong performance in the global equity market, driven by its diversified investment strategy and adaptability to market conditions. With a focus on long-term capital growth, RGT has maintained a consistent track record despite geopolitical challenges and market fluctuations.

RGT's investment strategy, focusing on global equity exposure and sector diversification, has contributed significantly to its performance. As of 9/26/2024, the fund had 117 holdings across various sectors, with top sectors including Industrials (33.79%), Financial Services (23.10%), and Technology (17.95%). This diversification has helped RGT navigate market fluctuations and maintain a consistent performance track record.

Geopolitical factors, such as trade wars and political instability, have played a significant role in RGT's performance. The fund's exposure to international markets, particularly in countries like China, India, and Brazil, has been influenced by these factors. For instance, the US-China trade war has impacted RGT's holdings in Chinese companies, with the fund's NAV experiencing a -19.44% discount to its 52-week low in late 2024. Additionally, political instability in countries like Brazil has affected RGT's investments in the region, contributing to the fund's overall performance.

RGT's portfolio characteristics, including top holdings and country allocation, have influenced its performance in the global equity market. As of Nov 30, 2024, RGT's top holdings included Vistry Group PLC (3.75%), FTAI Aviation Ltd (2.76%), and Transcat Inc (2.46%). The fund's country allocation was broad, with the US (43.16%) and Canada (16.39%) being the largest equity exposures. RGT's performance in the global equity market has been influenced by its exposure to these sectors and countries. For instance, the fund's strong performance in 2023 (14.57%) can be attributed to its exposure to the US, which achieved stronger economic growth than Europe. However, RGT's exposure to cyclical sectors may also make it vulnerable to economic downturns.

RGT's investment strategy has evolved over time, with a focus on long-term growth of capital. As of 9/26/2024, the fund invests at least 80% of its net assets in equity securities, with at least 40% in companies outside the US. This global diversification has contributed to its performance, with a 5-year annualized return of 11.74% (as of 9/27/2024). However, the fund's premium/discount has fluctuated, averaging -12.89% over the past 3 years, indicating periods of undervaluation.

Key factors driving RGT's returns have included its global equity focus and sector allocation. Over the past year, the fund has seen a shift in its top holdings, with Vistry Group PLC and FTAI Aviation Ltd replacing previous top holdings like Sprott Inc and APi Group Corp. This change reflects the fund's adaptability in responding to market conditions and opportunities. Additionally, RGT's exposure to cyclical and sensitive sectors, such as Industrials and Financial Services, has contributed to its performance. The fund's leverage and expense ratios have remained relatively stable, with effective leverage at 4.47% and annual expense ratios at 2.52%.

In conclusion, Royce Global Trust (NYSE: RGT) has demonstrated a strong performance in the global equity market, driven by its diversified investment strategy and adaptability to market conditions. Despite geopolitical challenges and market fluctuations, RGT has maintained a consistent track record, making it an attractive option for investors seeking global equity exposure and sector diversification.