Royce Smaller-Companies Growth Fund FY 2025: What Worked... And What Didn't

The Royce Funds120 FollowersFollow5ShareSavePlay(10min)CommentsSummaryNine of the portfolio’s 10 equity sectors made a positive impact on performance, with Health Care, Industrials, and Materials making the largest positive contributions.Palvella’s shares appreciated significantly in 2025 as investors grew more confident in the company’s pipeline following a grant from the FDA, patent wins, and a positive Phase II readout.Impinj is a long time holding in the portfolio with a very large total addressable market expansion opportunity, a strong patent portfolio, and an increasingly diversified customer base.Defense technology continues to be an area of investor focus entering 2026 and beyond given the potential of significant increases in military spending due to geopolitical uncertainty.ACV Auctions underperformed in 2025 due to a deceleration of organic growth, increased competition, and a continued weak used car auction environment. Galeanu Mihai/iStock via Getty Images The following segment was excerpted from the Royce Smaller-Companies Growth Fund FY 2025 Commentary. Nine of the portfolio’s 10 equity sectors made a positive impact on calendar year performance, with Health Care, Industrials, and Materials making theThis article was written byThe Royce Funds120 FollowersFollowThe Royce Funds is a small-cap specialist with unparalleled knowledge and experience, offering distinct investment approaches to meet a variety of investors’ goals.